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[5]

PATRICIA HALAGUEA, MA. ANGELITA L. PULIDO, MA. G.R. No. 172013 equal treatment with their male counterparts. This demand was reiterated in a letter by
TERESITA P. SANTIAGO, petitioners' counsel addressed to respondent demanding the removal of gender discrimination
MARIANNE V. KATINDIG, Present: provisions in the coming re-negotiations of the PAL-FASAP CBA.
BERNADETTE A. CABALQUINTO,
LORNA B. TUGAS, MARY CHRISTINE A. VILLARETE, On July 12, 2004, Robert D. Anduiza, President of FASAP submitted their 2004-2005 CBA
CYNTHIA A. STEHMEIER, ROSE ANNA G. VICTA, YNARES-SANTIAGO, J., [6]
proposals and manifested their willingness to commence the collective bargaining negotiations
NOEMI R. CRESENCIO, and other flight attendants of Chairperson, between the management and the association, at the soonest possible time.
PHILIPPINE AIRLINES, CHICO-NAZARIO,
Petitioners, VELASCO, JR., On July 29, 2004, petitioners filed a Special Civil Action for Declaratory Relief with Prayer for the
NACHURA, and [7]
Issuance of Temporary Restraining Order and Writ of Preliminary Injunction with the Regional
- versus - PERALTA, JJ. Trial Court (RTC) of Makati City, Branch 147, docketed as Civil Case No. 04-886, against
respondent for the invalidity of Section 144, Part A of the PAL-FASAP CBA. The RTC set a hearing
on petitioners' application for a TRO and, thereafter, required the parties to submit their respective
PHILIPPINE AIRLINES INCORPORATED, memoranda.
Respondent.
[8]
On August 9, 2004, the RTC issued an Order upholding its jurisdiction over the present case. The
RTC reasoned that:
Promulgated: In the instant case, the thrust of the Petition is Sec. 144 of the subject CBA
October 2, 2009 which is allegedly discriminatory as it discriminates against female flight
x--------------------------------------------------x attendants, in violation of the Constitution, the Labor Code, and the CEDAW.
The allegations in the Petition do not make out a labor dispute arising from
employer-employee relationship as none is shown to exist. This case is not
DECISION directed specifically against respondent arising from any act of the latter, nor
does it involve a claim against the respondent. Rather, this case seeks a
PERALTA, J.: declaration of the nullity of the questioned provision of the CBA, which is
within the Court's competence, with the allegations in the Petition constituting
Before this Court is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to the bases for such relief sought.
[1] [2]
annul and set aside the Decision and the Resolution of the Court of Appeals (CA) in CA-G.R.
SP. No. 86813.
Petitioners were employed as female flight attendants of respondent Philippine Airlines (PAL) on [9]
The RTC issued a TRO on August 10, 2004, enjoining the respondent for implementing Section
different dates prior to November 22, 1996. They are members of the Flight Attendants and 144, Part A of the PAL-FASAP CBA.
Stewards Association of the Philippines (FASAP), a labor organization certified as the sole and
exclusive certified as the sole and exclusive bargaining representative of the flight attendants, flight [10]
The respondent filed an omnibus motion seeking reconsideration of the order overruling its
stewards and pursers of respondent. objection to the jurisdiction of the RTC the lifting of the TRO. It further prayed that the (1)
petitioners' application for the issuance of a writ of preliminary injunction be denied; and (2) the
On July 11, 2001, respondent and FASAP entered into a Collective Bargaining petition be dismissed or the proceedings in this case be suspended.
[3]
Agreement incorporating the terms and conditions of their agreement for the years 2000 to 2005,
hereinafter referred to as PAL-FASAP CBA. [11]
On September 27, 2004, the RTC issued an Order directing the issuance of a writ of preliminary
injunction enjoining the respondent or any of its agents and representatives from further
Section 144, Part A of the PAL-FASAP CBA, provides that: implementing Sec. 144, Part A of the PAL-FASAP CBA pending the resolution of the case.
A. For the Cabin Attendants hired before 22 November 1996: Aggrieved, respondent, on October 8, 2004, filed a Petition for Certiorari and Prohibition with
xxxx [12]
Prayer for a Temporary Restraining Order and Writ of Preliminary Injunction with the Court of
Appeals (CA) praying that the order of the RTC, which denied its objection to its jurisdiction, be
3. Compulsory Retirement annuled and set aside for having been issued without and/or with grave abuse of discretion
amounting to lack of jurisdiction.
Subject to the grooming standards provisions of this Agreement, compulsory
retirement shall be fifty-five (55) for females and sixty(60) for males. x x x. The CA rendered a Decision, dated August 31, 2005, granting the respondent's petition, and ruled
that:
[4]
In a letter dated July 22, 2003, petitioners and several female cabin crews manifested that the
aforementioned CBA provision on compulsory retirement is discriminatory, and demanded for an
WHEREFORE, the respondent court is by us declared to have NO 24. Petitioners have the constitutional right to fundamental equality with men
JURISDICTION OVER THE CASE BELOW and, consequently, all the under Section 14, Article II, 1987 of the Constitution and, within the specific
proceedings, orders and processes it has so far issued therein are ANNULED context of this case, with the male cabin attendants of Philippine Airlines.
and SET ASIDE. Respondent court is ordered to DISMISS its Civil Case No.
04-886. 26. Petitioners have the statutory right to equal work and employment
opportunities with men under Article 3, Presidential Decree No. 442, The
SO ORDERED. Labor Code and, within the specific context of this case, with the male cabin
attendants of Philippine Airlines.
[13]
Petitioner filed a motion for reconsideration, which was denied by the CA in its Resolution dated 27. It is unlawful, even criminal, for an employer to discriminate against
March 7, 2006. women employees with respect to terms and conditions of employment solely
on account of their sex under Article 135 of the Labor Code as amended by
Hence, the instant petition assigning the following error: Republic Act No. 6725 or the Act Strengthening Prohibition on Discrimination
Against Women.
THE COURT OF APPEALS' CONCLUSION THAT THE SUBJECT MATTER
IS A LABOR DISPUTE OR GRIEVANCE IS CONTRARY TO LAW AND 28. This discrimination against Petitioners is likewise against the Convention
JURISPRUDENCE. on the Elimination of All Forms of Discrimination Against Women (hereafter,
The main issue in this case is whether the RTC has jurisdiction over the petitioners' action CEDAW), a multilateral convention that the Philippines ratified in 1981. The
challenging the legality or constitutionality of the provisions on the compulsory retirement age Government and its agents, including our courts, not only must condemn all
contained in the CBA between respondent PAL and FASAP. forms of discrimination against women, but must also implement measures
Petitioners submit that the RTC has jurisdiction in all civil actions in which the subject of the towards its elimination.
litigation is incapable of pecuniary estimation and in all cases not within the exclusive jurisdiction of
any court, tribunal, person or body exercising judicial or quasi-judicial functions. The RTC has the 29. This case is a matter of public interest not only because of Philippine
power to adjudicate all controversies except those expressly witheld from the plenary powers of the Airlines' violation of the Constitution and existing laws, but also because it
court. Accordingly, it has the power to decide issues of constitutionality or legality of the provisions highlights the fact that twenty-three years after the Philippine Senate ratified
of Section 144, Part A of the PAL-FASAP CBA. As the issue involved is constitutional in character, the CEDAW, discrimination against women continues.
the labor arbiter or the National Labor Relations Commission (NLRC) has no jurisdiction over the 31. Section 114, Part A of the PAL-FASAP 2000-20005 CBA on compulsory
case and, thus, the petitioners pray that judgment be rendered on the merits declaring Section 144, retirement from service is invidiously discriminatory against and manifestly
Part A of the PAL-FASAP CBA null and void. prejudicial to Petitioners because, they are compelled to retire at a lower age
(fifty-five (55) relative to their male counterparts (sixty (60).
Respondent, on the other hand, alleges that the labor tribunals have jurisdiction over the present
case, as the controversy partakes of a labor dispute. The dispute concerns the terms and 33. There is no reasonable, much less lawful, basis for Philippine Airlines to
conditions of petitioners' employment in PAL, specifically their retirement age. The RTC has no distinguish, differentiate or classify cabin attendants on the basis of sex and
jurisdiction over the subject matter of petitioners' petition for declaratory relief because the thereby arbitrarily set a lower compulsory retirement age of 55 for Petitioners
Voluntary Arbitrator or panel of Voluntary Arbitrators have original and exclusive jurisdiction to hear for the sole reason that they are women.
and decide all unresolved grievances arising from the interpretation or implementation of the CBA.
Regular courts have no power to set and fix the terms and conditions of employment. Finally, 37. For being patently unconstitutional and unlawful, Section 114, Part A of
respondent alleged that petitioners' prayer before this Court to resolve their petition for declaratory the PAL-FASAP 2000-2005 CBA must be declared invalid and stricken down
relief on the merits is procedurally improper and baseless. to the extent that it discriminates against petitioner.

The petition is meritorious. 38. Accordingly, consistent with the constitutional and statutory guarantee of
Jurisdiction of the court is determined on the basis of the material allegations of the complaint and equality between men and women, Petitioners should be adjudged and
[14]
the character of the relief prayed for irrespective of whether plaintiff is entitled to such relief. declared entitled, like their male counterparts, to work until they are sixty (60)
years old.
In the case at bar, the allegations in the petition for declaratory relief plainly show that petitioners'
cause of action is the annulment of Section 144, Part A of the PAL-FASAP CBA. The pertinent PRAYER
portion of the petition recites:
WHEREFORE, it is most respectfully prayed that the Honorable Court:
CAUSE OF ACTION
c. after trial on the merits:
(I) declare Section 114, Part A of the PAL-FASAP 2000- Whether the case involves void or voidable contracts is still a judicial
2005 CBA INVALID, NULL and VOID to the extent that it question. It may, in some instances, involve questions of fact especially with
discriminates against Petitioners; x x x x regard to the determination of the circumstances of the execution of the
contracts. But the resolution of the validity or voidness of the contracts
remains a legal or judicial question as it requires the exercise of judicial
From the petitioners' allegations and relief prayed for in its petition, it is clear that the issue raised function. It requires the ascertainment of what laws are applicable to the
is whether Section 144, Part A of the PAL-FASAP CBA is unlawful and unconstitutional. Here, the dispute, the interpretation and application of those laws, and the rendering of a
petitioners' primary relief in Civil Case No. 04-886 is the annulment of Section 144, Part A of the judgment based thereon. Clearly, the dispute is not a mining conflict. It is
PAL-FASAP CBA, which allegedly discriminates against them for being female flight essentially judicial. The complaint was not merely for the determination of
attendants. The subject of litigation is incapable of pecuniary estimation, exclusively cognizable by rights under the mining contracts since the very validity of those contracts is
[15]
the RTC, pursuant to Section 19 (1) of Batas Pambansa Blg. 129, as amended. Being an put in issue.
ordinary civil action, the same is beyond the jurisdiction of labor tribunals.
[21]
In Saura v. Saura, Jr., this Court emphasized the primacy of the regular court's judicial power
The said issue cannot be resolved solely by applying the Labor Code. Rather, it requires the enshrined in the Constitution that is true that the trend is towards vesting administrative bodies like
application of the Constitution, labor statutes, law on contracts and the Convention on the the SEC with the power to adjudicate matters coming under their particular specialization, to insure
[16]
Elimination of All Forms of Discrimination Against Women, and the power to apply and interpret a more knowledgeable solution of the problems submitted to them. This would also relieve the
the constitution and CEDAW is within the jurisdiction of trial courts, a court of general jurisdiction. regular courts of a substantial number of cases that would otherwise swell their already clogged
[17]
In Georg Grotjahn GMBH & Co. v. Isnani, this Court held that not every dispute between an dockets. But as expedient as this policy may be, it should not deprive the courts of justice
employer and employee involves matters that only labor arbiters and the NLRC can resolve in the of their power to decide ordinary cases in accordance with the general laws that do not
exercise of their adjudicatory or quasi-judicial powers. The jurisdiction of labor arbiters and the require any particular expertise or training to interpret and apply. Otherwise, the creeping
NLRC under Article 217 of the Labor Code is limited to disputes arising from an employer- take-over by the administrative agencies of the judicial power vested in the courts would
employee relationship which can only be resolved by reference to the Labor Code, other labor render the judiciary virtually impotent in the discharge of the duties assigned to it by the
statutes, or their collective bargaining agreement. Constitution.
[22]
Not every controversy or money claim by an employee against the employer or vice-versa is within To be sure, in Rivera v. Espiritu, after Philippine Airlines (PAL) and PAL Employees Association
the exclusive jurisdiction of the labor arbiter. Actions between employees and employer where the (PALEA) entered into an agreement, which includes the provision to suspend the PAL-PALEA CBA
employer-employee relationship is merely incidental and the cause of action precedes from a for 10 years, several employees questioned its validity via a petition for certiorari directly to the
[18]
different source of obligation is within the exclusive jurisdiction of the regular court. Here, the Supreme Court. They said that the suspension was unconstitutional and contrary to public policy.
employer-employee relationship between the parties is merely incidental and the cause of action Petitioners submit that the suspension was inordinately long, way beyond the maximum statutory
ultimately arose from different sources of obligation, i.e., the Constitution and CEDAW. life of 5 years for a CBA provided for in Article 253-A of the Labor Code. By agreeing to a 10-year
suspension, PALEA, in effect, abdicated the workers' constitutional right to bargain for another
Thus, where the principal relief sought is to be resolved not by reference to the Labor Code or CBA at the mandated time.
other labor relations statute or a collective bargaining agreement but by the general civil law, the In that case, this Court denied the petition for certiorari, ruling that there is available to petitioners a
jurisdiction over the dispute belongs to the regular courts of justice and not to the labor arbiter and plain, speedy, and adequate remedy in the ordinary course of law. The Court said that while the
the NLRC. In such situations, resolution of the dispute requires expertise, not in labor management petition was denominated as one for certiorari and prohibition, its object was actually the
relations nor in wage structures and other terms and conditions of employment, but rather in the nullification of the PAL-PALEA agreement. As such, petitioners' proper remedy is an ordinary civil
application of the general civil law. Clearly, such claims fall outside the area of competence or action for annulment of contract, an action which properly falls under the jurisdiction of the regional
expertise ordinarily ascribed to labor arbiters and the NLRC and the rationale for granting trial courts.
[19]
jurisdiction over such claims to these agencies disappears.
The change in the terms and conditions of employment, should Section 144 of the CBA be held
If We divest the regular courts of jurisdiction over the case, then which tribunal or forum shall invalid, is but a necessary and unavoidable consequence of the principal relief sought, i.e.,
determine the constitutionality or legality of the assailed CBA provision? nullification of the alleged discriminatory provision in the CBA. Thus, it does not necessarily follow
that a resolution of controversy that would bring about a change in the terms and conditions of
This Court holds that the grievance machinery and voluntary arbitrators do not have the power to employment is a labor dispute, cognizable by labor tribunals. It is unfair to preclude petitioners from
determine and settle the issues at hand. They have no jurisdiction and competence to decide invoking the trial court's jurisdiction merely because it may eventually result into a change of the
constitutional issues relative to the questioned compulsory retirement age. Their exercise of terms and conditions of employment. Along that line, the trial court is not asked to set and fix the
jurisdiction is futile, as it is like vesting power to someone who cannot wield it. terms and conditions of employment, but is called upon to determine whether CBA is consistent
with the laws.
[20]
In Gonzales v. Climax Mining Ltd., this Court affirmed the jurisdiction of courts over questions on
constitutionality of contracts, as the same involves the exercise of judicial power. The Court said: Although the CBA provides for a procedure for the adjustment of grievances, such referral to the
grievance machinery and thereafter to voluntary arbitration would be inappropriate to the
petitioners, because the union and the management have unanimously agreed to the terms of the provision, because the manner of implementing the same is clear in itself. The only controversy lies
CBA and their interest is unified. in its intrinsic validity.
[23]
In Pantranco North Express, Inc., v. NLRC, this Court held that: Although it is a rule that a contract freely entered between the parties should be respected, since a
contract is the law between the parties, said rule is not absolute.
x x x Hence, only disputes involving the union and the company shall be
[25]
referred to the grievance machinery or voluntary arbitrators. In Pakistan International Airlines Corporation v. Ople, this Court held that:
In the instant case, both the union and the company are united or have come
to an agreement regarding the dismissal of private respondents. No grievance The principle of party autonomy in contracts is not, however, an absolute
between them exists which could be brought to a grievance machinery. The principle. The rule in Article 1306, of our Civil Code is that the contracting
problem or dispute in the present case is between the union and the company parties may establish such stipulations as they may deem convenient,
on the one hand and some union and non-union members who were provided they are not contrary to law, morals, good customs, public order or
dismissed, on the other hand. The dispute has to be settled before an public policy. Thus, counter-balancing the principle of autonomy of contracting
impartial body. The grievance machinery with members designated by the parties is the equally general rule that provisions of applicable law, especially
union and the company cannot be expected to be impartial against the provisions relating to matters affected with public policy, are deemed written
dismissed employees. Due process demands that the dismissed workers into the contract. Put a little differently, the governing principle is that parties
grievances be ventilated before an impartial body. x x x . may not contract away applicable provisions of law especially peremptory
provisions dealing with matters heavily impressed with public interest. The law
Applying the same rationale to the case at bar, it cannot be said that the relating to labor and employment is clearly such an area and parties are not at
"dispute" is between the union and petitioner company because both have liberty to insulate themselves and their relationships from the impact of labor
previously agreed upon the provision on "compulsory retirement" as laws and regulations by simply contracting with each other.
embodied in the CBA. Also, it was only private respondent on his own who
questioned the compulsory retirement. x x x. Moreover, the relations between capital and labor are not merely contractual. They are so
[26]
In the same vein, the dispute in the case at bar is not between FASAP and respondent PAL, who impressed with public interest that labor contracts must yield to the common good.x x x The
have both previously agreed upon the provision on the compulsory retirement of female flight supremacy of the law over contracts is explained by the fact that labor contracts are not ordinary
attendants as embodied in the CBA. The dispute is between respondent PAL and several female contracts; these are imbued with public interest and therefore are subject to the police power of the
[27]
flight attendants who questioned the provision on compulsory retirement of female flight attendants. state. It should not be taken to mean that retirement provisions agreed upon in the CBA are
Thus, applying the principle in the aforementioned case cited, referral to the grievance machinery absolutely beyond the ambit of judicial review and nullification. A CBA, as a labor contract, is not
and voluntary arbitration would not serve the interest of the petitioners. merely contractual in nature but impressed with public interest. If the retirement provisions in the
CBA run contrary to law, public morals, or public policy, such provisions may very well be
[28]
Besides, a referral of the case to the grievance machinery and to the voluntary arbitrator under the voided.
CBA would be futile because respondent already implemented Section 114, Part A of PAL-FASAP
CBA when several of its female flight attendants reached the compulsory retirement age of 55. Finally, the issue in the petition for certiorari brought before the CA by the respondent was the
alleged exercise of grave abuse of discretion of the RTC in taking cognizance of the case for
Further, FASAP, in a letter dated July 12, 2004, addressed to PAL, submitted its association's declaratory relief. When the CA annuled and set aside the RTC's order, petitioners sought relief
bargaining proposal for the remaining period of 2004-2005 of the PAL-FASAP CBA, which includes before this Court through the instant petition for review under Rule 45. A perusal of the petition
the renegotiation of the subject Section 144. However, FASAP's attempt to change the questioned before Us, petitioners pray for the declaration of the alleged discriminatory provision in the CBA
provision was shallow and superficial, to say the least, because it exerted no further efforts to against its female flight attendants.
pursue its proposal. When petitioners in their individual capacities questioned the legality of the
compulsory retirement in the CBA before the trial court, there was no showing that FASAP, as their This Court is not persuaded. The rule is settled that pure questions of fact may not be the proper
representative, endeavored to adjust, settle or negotiate with PAL for the removal of the difference subject of an appeal by certiorari under Rule 45 of the Revised Rules of Court. This mode of
in compulsory age retirement between its female and male flight attendants, particularly those appeal is generally limited only to questions of law which must be distinctly set forth in the petition.
[29]
employed before November 22, 1996. Without FASAP's active participation on behalf of its female The Supreme Court is not a trier of facts.
flight attendants, the utilization of the grievance machinery or voluntary arbitration would be
pointless. The question as to whether said Section 114, Part A of the PAL-FASAP CBA is discriminatory or
not is a question of fact. This would require the presentation and reception of evidence by the
The trial court in this case is not asked to interpret Section 144, Part A of the PAL-FASAP CBA. parties in order for the trial court to ascertain the facts of the case and whether said provision
Interpretation, as defined in Black's Law Dictionary, is the art of or process of discovering and violates the Constitution, statutes and treaties. A full-blown trial is necessary, which jurisdiction to
[24]
ascertaining the meaning of a statute, will, contract, or other written document. The provision hear the same is properly lodged with the the RTC. Therefore, a remand of this case to the RTC for
regarding the compulsory retirement of flight attendants is not ambiguous and does not require the proper determination of the merits of the petition for declaratory relief is just and proper.
interpretation. Neither is there any question regarding the implementation of the subject CBA
WHEREFORE, the petition is PARTLY GRANTED. The Decision and Resolution of the Court of
Appeals, dated August 31, 2005 and March 7, 2006, respectively, in CA-G.R. SP. No. 86813
are REVERSED and SET ASIDE. The Regional Trial Court of Makati City, Branch 147
is DIRECTED to continue the proceedings in Civil Case No. 04-886 with deliberate dispatch.

SO ORDERED.
THIRD DIVISION plaintiffs Complaint, the rate adjustment payable by defendant amounted
to P462,346.25. Defendant opposed the Complaint by raising the following
defenses: (1) the rate adjustment is the obligation of the plaintiff as employer
[G.R. No. 112139. January 31, 2000]
of the security guards; (2) assuming its liability, the sum it should pay is less in
amount; and (3) the Wage Orders violate the impairment clause of the
LAPANDAY AGRICULTURAL DEVELOPMENT CORPORATION, petitioner, vs. THE Constitution.
HONORABLE COURT OF APPEALS (Former Eighth Division) and COMMANDO SECURITY
SERVICE AGENCY, INC., respondents.
The trial court decided in favor of the plaintiff. It held:

DECISION
xxx

GONZAGA-REYES, J.:
"However, in order for the security agency to pay the
security guards, the Wage Orders made specific
[1] [2]
Before us is a Petition for Review on Certiorari of the decision of the Court of Appeals in CA- provisions to amend existing contracts for security
G.R. CV No. 33893 entitled COMMANDO SECURITY SERVICE AGENCY, INCORPORATED vs. services by allowing the adjustment of the consideration
[3]
LAPANDAY AGRICULTURAL DEVELOPMENT CORPORATION which affirmed the decision of paid by the principal to the security agency concerned.
the Regional Trial Court, 11th Judicial Region, Branch 9, Davao City in Civil Case No. 19203-88. (Eagle Security Agency, Inc. vs. NLRC, Phil. Tuberculosis
Society, Inc. vs. NLRC, et al., May 18, 1989).
The pertinent facts as found by the Court of Appeals are as follows:
The Wage Orders require the amendment of the contract
as to the consideration to cover the service contractors
"The evidence shows that in June 1986, plaintiff Commando Security Service
payment of the increases mandated. However, in the case
Agency, Inc., and defendant Lapanday Agricultural Development Corporation
at bar, the contract for security services had earlier been
entered into a Guard Service Contract. Plaintiff provided security guards in terminated without the corresponding amendment. Plaintiff
defendants banana plantation. The contract called for the payment to a guard
now demands adjustment in the contract price as the
of P754.28 on a daily 8-hour basis and an additional P565.72 for a four hour
same was deemed amended by Wage Order Nos. 5 and
overtime while the shift-in-charge was to be paid P811.40 on a daily 8-hour 6.
basis and P808.60 for the 4-hour overtime.

Before the plaintiff could pay the minimum wage as


Wage Orders increasing the minimum wage in 1983 were complied with by the mandated by law, adjustments must be paid by the
defendant. On June 16, 1984, Wage Order No. 5 was promulgated directing
principal to the security agency concerned.
an increase of P3.00 per day on the minimum wage of workers in the private
sector and a P5.00 increase on the ECOLA. This was followed on November
1, 1984 by Wage Order No. 6 which further increased said minimum wage "Given these circumstances, if PTS
by P3.00 on the ECOLA. Both Wage Orders contain the following provision: pays the security guards, it cannot
claim reimbursements from Eagle.
But if its Eagle that pays them, the
"In the case of contract for construction projects and for
latter can claim reimbursement from
security, janitorial and similar services, the increase in the
PTS in lieu of an adjustment,
minimum wage and allowances rates of the workers shall considering that the contract had
be borne by the principal or client of the
expired and had not been renewed.
construction/service contractor and the contracts shall be
(Eagle Security Agency vs. NLRC
deemed amended accordingly, subject to the provisions of and Phil. Tuberculosis Society, Inc.
Sec. 3 (b) of this order" (Sec. 6 and Sec. 9, Wage Orders
vs. NLRC, et al., 18 May 1989).
No. 5 and 6, respectively)."

"As to the issue that Wage Orders Nos. 5 and 6 constitute


Plaintiff demanded that its Guard Service Contract with defendant be
impairments of contracts in violation of constitutional
upgraded in compliance with Wage Order Nos. 5 and 6. Defendant refused.
guarantees, the High Court ruled" The Supreme Court has
Their Contract expired on June 6, 1986 without the rate adjustment called for rejected the impairment of contract argument in sustaining
Wage Order Nos. 5 and 6 being implemented. By the time of the filing of
the validity and constitutionality of labor and social
legislation like the Blue Sunday Law, compulsory their amended Guard Service Contract, the increases/adjustments in wages and ECOLA are due
coverage of private sector employees in the Social to private respondent and not to the security guards who are not parties to the said contract. It is
Security System, and the abolition of share tenancy therefore immaterial whether or not private respondent paid its security guards their wages as
enacted pursuant to the police power of the state (Eagle adjusted by said Wage Orders and that since the forty-two (42) security guards are not parties to
Security Agency, Inc. vs. National Labor Relation the Guard Service Contract, there is no need for them to authorize the filing of, or be joined in, this
Commission and Phil. Tuberculosis Society, Inc. vs. suit.
NLRC, et al., May 18, 1989)."
As regards the award to private respondent of the amount of P115,585.31 as attorneys fees,
[4]
Petitioners motion for reconsideration was denied; hence this petition where petitioner cites the private respondent maintains that there is enough evidence and/or basis for the grant thereof,
following grounds to support the instant petition for review: considering that the adamant attitude of the petitioner (in implementing the questioned Wage
Orders) compelled the herein private respondent, to litigate in court. Furthermore, since the legal
fee payable by private respondent to its counsel is essentially on contingent basis, the amount
"1. THE WAGE INCREASES PROVIDED FOR IN THE WAGE ORDERS
of P115,583.31 granted by the trial court which is 25% of the total claim is not unconscionable.
WERE DUE TO THE GUARDS AND NOT THE SECURITY AGENCY;

As regards the jurisdiction of the RTC, private respondent alleges that the suit filed before the trial
2. A SECURITY AGENCY WHO DID NOT PAY WAGE INCREASE TO ITS
court is for the purpose of securing the upgrading of the Guard Service Contract entered into by
GUARDS IT HAD ALREADY TERMINATED AND WITHOUT THEIR
herein petitioner and private respondent in June 1983. The enforcement of this written contract
AUTHORIZATION CANNOT INSTITUTE AN ACTION TO RECOVER SAID
does not fall under the jurisdiction of the NLRC because the money claims involved therein did not
WAGE INCREASE FOR ITS BENEFIT;
arise from employer-employee relations between the parties and is intrinsically a civil dispute.
Thus, jurisdiction lies with the regular courts. Private respondent further contends that petitioner is
3. IN THE ABSENCE OF BAD FAITH AND WITHOUT THE TRIAL COURT estopped or barred from raising the question of jurisdiction for the first time before the Supreme
CORRECTLY ESTABLISHING THE BASIS FOR ATTORNEYS FEES, THE Court after having voluntarily submitted to the jurisdiction of the regular courts below and having
[7]
SAME MAY NOT BE AWARDED. lost its case therein.

4. THE NATIONAL LABOR RELATIONS (SIC) IS THE PROPER FORUM We resolve to grant the petition.
THAT HAS THE JURISDICTION TO RESOLVE THE ISSUE OF WHETHER
OR NOT THE PETITIONER IS LIABLE TO PAY THE PRIVATE
We resolve first the issue of jurisdiction. We agree with the respondent that the RTC has
RESPONDENT THE WAGE AND ALLOWANCE INCREASES MANDATED
[5] jurisdiction over the subject matter of the present case. It is well settled in law and jurisprudence
UNDER WAGE ORDER NOS. 5 AND 6."
that where no employer-employee relationship exists between the parties and no issue is involved
which may be resolved by reference to the Labor Code, other labor statutes or any collective
[8]
Reiterating its position below, petitioner asserts that private respondent has no factual and legal bargaining agreement, it is the Regional Trial Court that has jurisdiction. In its complaint, private
basis to collect the benefits under subject Wage Order Nos. 5 and 6 intended for the security respondent is not seeking any relief under the Labor Code but seeks payment of a sum of money
guards without the authorization of the security guards concerned. Inasmuch as the services of the and damages on account of petitioners alleged breach of its obligation under their Guard Service
forty-two (42) security guards were already terminated at the time the complaint was filed on Contract. The action is within the realm of civil law hence jurisdiction over the case belongs to the
[9]
August 15, 1988, private respondents complaint partakes of the nature of an action for recovery of regular courts. While the resolution of the issue involves the application of labor laws, reference
what was supposedly due the guards under said Wage Orders, amounts that they claim were to the labor code was only for the determination of the solidary liability of the petitioner to the
never paid by private respondent and therefore not collectible by the latter from the petitioner. respondent where no employer-employee relation exists. Article 217 of the Labor Code as
Petitioner also assails the award of attorneys fees in the amount of P115,585.31 or 25% of the total amended vests upon the labor arbiters exclusive original jurisdiction only over the following:
adjustment claim of P462,341.25 for lack of basis and for being unconscionable.
1. Unfair labor practices;
Moreover, petitioner submits that it is the National Labor Relations Commission (NLRC) and not
the civil courts that has jurisdiction to resolve the issue involved in this case for it refers to the
2. Termination disputes;
enforcement of wage adjustment and other benefits due to private respondents security guards
mandated under Wage Order Nos. 5 and 6. Considering that the RTC has no jurisdiction, its
[6]
decision is without force and effect. 3. If accompanied with a claim for reinstatement, those cases that workers
may file involving wages, rates of pay, hours of work and other terms and
conditions of employment;
On the other hand, private respondent contends that the basis of its action against petitioner-
appellant is the enforcement of the Guard Service Contract entered into by them, which is deemed
amended by Section 6 of Wage Order No. 5 and Section 9 of Wage Order No. 6; that pursuant to
[14]
4. Claims for actual, moral exemplary and other forms of damages arising from NLRC that the joint and several liability of the contractor and the principal is mandated by the
employer-employee relations; Labor Code to assure compliance with the provisions therein including the minimum wage. The
contractor is made liable by virtue of his status as direct employer. The principal, on the other
hand, is made the indirect employer of the contractors employees to secure payment of their
5. Cases arising from any violation of Article 264 of this Code, including [15]
wages should the contractor be unable to pay them. Even in the absence of an employer-
questions involving legality of strikes and lockouts; and
employee relationship, the law itself establishes one between the principal and the employees of
the agency for a limited purpose i.e. in order to ensure that the employees are paid the wages due
6. Except claims for Employees Compensation, Social Security, Medicare and them. In the above-mentioned cases, the solidary liability of the principal and contractor was held
[16]
maternity benefits, all other claims, arising from employer-employee relations, to apply to the aforementioned Wage Order Nos. 5 and 6. In ruling that under the Wage Orders,
including those of persons in domestic or household service, involving an existing security guard services contracts are amended to allow adjustment of the consideration in
amount exceeding five thousand pesos (P5,000.00) regardless of whether order to cover payment of mandated increases, and that the principal is ultimately liable for the said
accompanied with a claim for reinstatement. increases, this Court stated:

In all these cases, an employer-employee relationship is an indispensable jurisdictional "The Wage Orders are explicit that payment of the increases are to be borne
[10]
requisite; and there is none in this case. by the principal or client. To be borne, however, does not mean that the
principal, PTSI in this case, would directly pay the security guards the wage
and allowance increases because there is no privity of contract between them.
On the merits, the core issue involved in the present petition is whether or not petitioner is liable to The security guards contractual relationship is with their immediate employer,
the private respondent for the wage adjustments provided under Wage Order Nos. 5 and 6 and for
EAGLE. As an employer, EAGLE is tasked, among others, with the payment of
attorneys fees.
their wages [See Article VII Sec. 3 of the Contract for Security
Services, supra and Bautista vs. Inciong, G. R. No. 52824, March 16, 1988,
Private respondent admits that there is no employer-employee relationship between it and the 158 SCRA 665].
[11]
petitioner. The private respondent is an independent/job contractor who assigned security
guards at the petitioners premises for a stipulated amount per guard per month. The Contract of On the other hand, there existed a contractual agreement between PTSI and
Security Services expressly stipulated that the security guards are employees of the Agency and
[12] EAGLE wherein the former availed of the security services provided by the
not of the petitioner. Articles 106 and 107 of the Labor Code provides the rule governing the
latter. In return, the security agency collects from its client payment for its
payment of wages of employees in the event that the contractor fails to pay such wages as follows: security services. This payment covers the wages for the security guards and
also expenses for their supervision and training, the guards bonds, firearms
"Art. 106. Contractor or subcontractor. Whenever an employer enters into a with ammunitions, uniforms and other equipments, accessories, tools,
contract with another person for the performance of the formers work, the materials and supplies necessary for the maintenance of a security force.
employees of the contractor and of the latters subcontractor, if any, shall be
paid in accordance with the provisions of this Code.
Premises considered, the security guards immediate recourse for the payment
of the increases is with their direct employer, EAGLE. However, in order for
In the event that the contractor or subcontractor fails to pay the wages of his the security agency to comply with the new wage and allowance rates it has to
employees in accordance with this Code, the employer shall be jointly and pay the security guards, the Wage Orders made specific provision to amend
severally liable with his contractor or subcontractor to such employees to the existing contracts for security services by allowing the adjustment of the
extent of the work performed under the contract, in the same manner and consideration paid by the principal to the security agency concerned. What the
extent that he is liable to employees directly employed by him. Wage Orders require, therefore, is the amendment of the contracts as to the
consideration to cover the service contractors payment of the increases
mandated. In the end, therefore, ultimate liability for the payment of the
xxx increases rests with the principal.

ART. 107. Indirect employer. The provisions of the immediately preceding In view of the foregoing, the security guards should claim the amount of the
Article shall likewise apply to any person, partnership, association or increases from EAGLE. Under the Labor Code, in case the agency fails to pay
corporation which, not being an employer, contracts with an independent them the amounts claimed, PTSI should be held solidarily liable with EAGLE
contractor for the performance of any work, task, job or project." [Articles 106, 107 and 109]. Should EAGLE pay, it can claim an adjustment
from PTSI for an increase in consideration to cover the increases payable to
[17]
It will be seen from the above provisions that the principal (petitioner) and the contractor the security guards."
(respondent) are jointly and severally liable to the employees for their wages. This Court held
[13]
in Eagle Security, Inc. vs. NLRC and Spartan Security and Detective Agency, Inc. vs.
It is clear also from the foregoing that it is only when contractor pays the increases mandated that it
can claim an adjustment from the principal to cover the increases payable to the security guards.
The conclusion that the right of the contractor (as principal debtor) to recover from the principal as
solidary co-debtor) arises only if he has paid the amounts for which both of them are jointly and
severally liable is in line with Article 1217 of the Civil Code which provides:

"Art. 1217. Payment made by one of the solidary debtors extinguishes the
obligation. If two or more solidary debtors offer to pay, the creditor may choose
which offer to accept.

He who made payment may claim from his codebtors only the share which
corresponds to each, with interest for the payment already made. If the
payment is made before the debt is due, no interest for the intervening period
may be demanded. xxx"

Pursuant to the above provision, the right of reimbursement from a co-debtor is recognized in favor
of the one who paid.

It will be seen that the liability of the petitioner to reimburse the respondent only arises if and when
respondent actually pays its employees the increases granted by Wage Order Nos. 5 and 6.
Payment, which means not only the delivery of money but also the performance, in any other
[18]
manner, of the obligation, is the operative fact which will entitle either of the solidary debtors to
seek reimbursement for the share which corresponds to each of the debtors.

The records show that judgment was rendered by Labor Arbiter Newton R. Sancho holding both
petitioner and private respondent jointly and solidarily liable to the security guards in a
[19] [20]
Decision dated October 17, 1986 (NLRC Case No. 2849-MC-XI-86). However, it is not
disputed that the private respondent has not actually paid the security guards the wage increases
granted under the Wage Orders in question. Neither is it alleged that there is an extant claim for
such wage adjustments from the security guards concerned, whose services have already been
terminated by the contractor. Accordingly, private respondent has no cause of action against
petitioner to recover the wage increases. Needless to stress, the increases in wages are intended
for the benefit of the laborers and the contractor may not assert a claim against the principal for
salary wage adjustments that it has not actually paid. Otherwise, as correctly put by the
respondent, the contractor would be unduly enriching itself by recovering wage increases, for its
own benefit.

Finally, considering that the private respondent has no cause of action against the petitioner,
private respondent is not entitled to attorneys fees.

WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals dated May 24,
1993 is REVERSED and SET ASIDE. The complaint of private respondent COMMANDO
SECURITY SERVICE AGENCY, INC. is hereby DISMISSED.
G.R. No. 182295 June 26, 2013 corporation claimed that he had voluntarily stopped reporting for work after receiving a verbal
reprimand for his sales performance; hence, it was he who was guilty of abandonment of
employment. Respondent made an oral manifestation that he was adopting the position paper he
7K CORPORATION, Petitioner,
submitted to the labor arbiter, a position paper in which the former claimed that he had been
vs. 12
illegally dismissed.
EDDIE ALBARICO, Respondent.

On 12 January 2005, almost 12 years after the filing of the NCMB case, both parties appeared in a
DECISION 13
hearing before the NCMB. Respondent manifested that he was willing to settle the case amicably
with petitioner based on the decision of the labor arbiter ordering the payment of separation pay in
SERENO, CJ.: lieu of reinstatement, backwages and attorney’s fees. On its part, petitioner made a counter-
manifestation that it was likewise amenable to settling the dispute. However, it was willing to pay
only the separation pay and the sales commission according to the Submission Agreement dated
This is a Petition for Review on Certiorari filed under Rule 45 of the Revised Rules of Court, asking 14
19 April 1993.
the Court to determine whether a voluntary arbitrator in a labor dispute exceeded his jurisdiction in
deciding issues not specified in the submission agreement of the parties. It assails the
1 2
Decision dated 18 September 2007 and the Resolution dated 17 March 2008 of the Court of The factual findings of the voluntary arbitrator, as well as of the CA, are not clear on what
3
Appeals (CA). happened afterwards. Even the records are bereft of sufficient information.

FACTS On 18 November 2005, the NCMB voluntary arbitrator rendered a Decision finding petitioner
15
corporation liable for illegal dismissal. The termination of respondent Albarico, by reason of
16
alleged poor performance, was found invalid. The arbitrator explained that the promotions,
When he was dismissed on 5 April 1993, respondent Eddie Albarico (Albarico) was a regular increases in salary, and awards received by respondent belied the claim that the latter was
employee of petitioner 7K Corporation, a company selling water purifiers. He started working for 17
4 performing poorly. It was also found that Albarico could not have abandoned his job, as the
the company in 1990 as a salesman. Because of his good performance, his employment was
abandonment should have been clearly shown. Mere absence was not sufficient, according to the
regularized. He was also promoted several times: from salesman, he was promoted to senior sales arbitrator, but must have been accompanied by overt acts pointing to the fact that the employee did
representative and then to acting team field supervisor. In 1992, he was awarded the President’s
not want to work anymore. It was noted that, in the present case, the immediate filing of a
Trophy for being one of the company’s top water purifier specialist distributors.
complaint for illegal dismissal against the employer, with a prayer for reinstatement, showed that
the employee was not abandoning his work. The voluntary arbitrator also found that Albarico was
In April of 1993, the chief operating officer of petitioner 7K Corporation terminated Albarico’s dismissed from his work without due process.
5
employment allegedly for his poor sales performance. Respondent had to stop reporting for work,
and he subsequently submitted his money claims against petitioner for arbitration before the However, it was found that reinstatement was no longer possible because of the strained
National Conciliation and Mediation Board (NCMB). The issue for voluntary arbitration before the 18
relationship of the parties. Thus, in lieu of reinstatement, the voluntary arbitrator ordered the
NCMB, according to the parties’ Submission Agreement dated 19 April 1993, was whether
corporation to pay separation pay for two years at ₱4,456 for each year, or a total amount of
respondent Albarico was entitled to the payment of separation pay and the sales commission ₱8,912.
6
reserved for him by the corporation.

Additionally, in view of the finding that Albarico had been illegally dismissed, the voluntary arbitrator
While the NCMB arbitration case was pending, respondent Albarico filed a Complaint against 19
also ruled that the former was entitled to backwages in the amount of ₱90,804. Finally, the
petitioner corporation with the Arbitration Branch of the National Labor Relations Commission
arbitrator awarded attorney’s fees in respondent’s favor, because he had been compelled to file an
(NLRC) for illegal dismissal with money claims for overtime pay, holiday compensation, 20
7 action for illegal dismissal.
commission, and food and travelling allowances. The Complaint was decided by the labor arbiter
in favor of respondent Albarico, who was awarded separation pay in lieu of reinstatement,
8
backwages and attorney’s fees. Petitioner corporation subsequently appealed to the CA, imputing to the voluntary arbitrator grave
abuse of discretion amounting to lack or excess of jurisdiction for awarding backwages and
21
attorney’s fees to respondent Albarico based on the former’s finding of illegal dismissal. The
On appeal by petitioner, the labor arbiter’s Decision was vacated by the NLRC for forum shopping
9 arbitrator contended that the issue of the legality of dismissal was not explicitly included in the
on the part of respondent Albarico, because the NCMB arbitration case was still pending. The
Submission Agreement dated 19 April 1993 filed for voluntary arbitration and resolution. It prayed
NLRC Decision, which explicitly stated that the dismissal was without prejudice to the pending that the said awards be set aside, and that only separation pay of ₱8,912.00 and sales commission
10
NCMB arbitration case, became final after no appeal was taken.
of ₱4,787.60 be awarded.

On 17 September 1997, petitioner corporation filed its Position Paper in the NCMB arbitration
11
case. It denied that respondent was terminated from work, much less illegally dismissed. The
The CA affirmed the Decision of the voluntary arbitrator, but eliminated the award of attorney’s fees The phrase "Except as otherwise provided under this Code" refers to the following exceptions:
22
for having been made without factual, legal or equitable justification. Petitioner’s Motion for Partial
23
Reconsideration was denied as well.
A. Art. 217. Jurisdiction of Labor Arbiters . . .

Hence, this Petition.


xxxx

ISSUE
(c) Cases arising from the interpretation or implementation of collective bargaining agreement and
those arising from the interpretation or enforcement of company procedure/policies shall be
The issue before the Court is whether the CA committed reversible error in finding that the disposed of by the Labor Arbiter by referring the same to the grievance machinery and voluntary
voluntary arbitrator properly assumed jurisdiction to decide the issue of the legality of the dismissal arbitrator as may be provided in said agreement.
of respondent as well as the latter’s entitlement to backwages, even if neither the legality nor the
entitlement was expressedly claimed in the Submission Agreement of the parties.
B. Art. 262. Jurisdiction over other labor disputes. The Voluntary Arbitrator or panel of Voluntary
Arbitrators, upon agreement of the parties, shall also hear and decide all other labor disputes
The Petition is denied for being devoid of merit. including unfair labor practices and bargaining deadlocks. (Emphasis supplied)

DISCUSSION We also said in the same case that "the labor disputes referred to in the same Article 262 of the
Labor Code can include all those disputes mentioned in Article 217 over which the Labor Arbiter
26
has original and exclusive jurisdiction."
Preliminarily, we address petitioner’s claim that under Article 217 of the Labor Code, original and
exclusive jurisdiction over termination disputes, such as the present case, is lodged only with the
24
labor arbiter of the NLRC. From the above discussion, it is clear that voluntary arbitrators may, by agreement of the parties,
assume jurisdiction over a termination dispute such as the present case, contrary to the assertion
of petitioner that they may not.
Petitioner overlooks the proviso in the said article, thus:

We now resolve the main issue. Petitioner argues that, assuming that the voluntary arbitrator has
Art. 217. Jurisdiction of the Labor Arbiters and the Commission.
jurisdiction over the present termination dispute, the latter should have limited his decision to the
issue contained in the Submission Agreement of the parties – the issue of whether respondent
a. Except as otherwise provided under this Code, the Labor Arbiters shall have original and Albarico was entitled to separation pay and to the sales commission the latter earned before being
27
exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the submission of the terminated. Petitioner asserts that under Article 262 of the Labor Code, the jurisdiction of a
case by the parties for decision without extension, even in the absence of stenographic notes, the voluntary arbitrator is strictly limited to the issues that the parties agree to submit. Thus, it contends
following cases involving all workers, whether agricultural or nonagricultural: that the voluntary arbitrator exceeded his jurisdiction when he resolved the issues of the legality of
the dismissal of respondent and the latter’s entitlement to backwages on the basis of a finding of
illegal dismissal.
xxxx

According to petitioner, the CA wrongly concluded that the issue of respondent’s entitlement to
2. Termination disputes;
separation pay was necessarily based on his allegation of illegal dismissal, thereby making the
issue of the legality of his dismissal implicitly submitted to the voluntary arbitrator for
28
xxxx resolution. Petitioner argues that this was an erroneous conclusion, because separation pay may
in fact be awarded even in circumstances in which there is no illegal dismissal.
6. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits,
all other claims arising from employer-employee relations, including those of persons in domestic We rule that although petitioner correctly contends that separation pay may in fact be awarded for
or household service, involving an amount exceeding five thousand pesos (₱5,000.00) regardless reasons other than illegal dismissal, the circumstances of the instant case lead to no other
of whether accompanied with a claim for reinstatement. (Emphases supplied) conclusion than that the claim of respondent Albarico for separation pay was premised on his
allegation of illegal dismissal. Thus, the voluntary arbitrator properly assumed jurisdiction over the
issue of the legality of his dismissal.
Thus, although the general rule under the Labor Code gives the labor arbiter exclusive and original
jurisdiction over termination disputes, it also recognizes exceptions. One of the exceptions is
25
provided in Article 262 of the Labor Code. In San Jose v. NLRC, we said: True, under the Labor Code, separation pay may be given not only when there is illegal dismissal.
In fact, it is also given to employees who are terminated for authorized causes, such as
29
redundancy, retrenchment or installation of labor-saving devices under Article 283 of the Labor In Sime Darby we ruled that although the specific issue presented by the parties to the voluntary
Code. Additionally, jurisprudence holds that separation pay may also be awarded for arbitrator was only "the issue of performance bonus," the latter had the authority to determine not
considerations of social justice, even if an employee has been terminated for a just cause other only the issue of whether or not a performance bonus was to be granted, but also the related
30
than serious misconduct or an act reflecting on moral character. The Court has also ruled that question of the amount of the bonus, were it to be granted. We explained that there was no
separation pay may be awarded if it has become an established practice of the company to pay the indication at all that the parties to the arbitration agreement had regarded "the issue of
31
said benefit to voluntarily resigning employees or to those validly dismissed for non-membership performance bonus" as a two-tiered issue, of which only one aspect was being submitted to
32
in a union as required in a closed-shop agreement. arbitration. Thus, we held that the failure of the parties to limit the issues specifically to that which
was stated allowed the arbitrator to assume jurisdiction over the related issue.
The above circumstances, however, do not obtain in the present case.1âwphi1 There is no claim
that the issue of entitlement to separation pay is being resolved in the context of any authorized Similarly, in the present case, there is no indication that the issue of illegal dismissal should be
cause of termination undertaken by petitioner corporation. Neither is there any allegation that a treated. as a two-tiered issue whereupon entitlement to backwages must be determined
consideration of social justice is being resolved here. In fact, even in instances in which separation separately. Besides, "since arbitration is a final resort for the adjudication of disputes," the
pay is awarded in consideration of social justice, the issue of the validity of the dismissal still needs voluntary arbitrator in the present case can assume that he has the necessary power to make a
35
to be resolved first. Only when there is already a finding of a valid dismissal for a just cause does final settlement. Thus, we rule that the voluntary arbitrator correctly assumed jurisdiction over the
the court then award separation pay for reason of social justice. The other circumstances when issue of entitlement of respondent Albarico to backwages on the basis of the former's finding of
separation pay may be awarded are not present in this case. illegal dismissal.

The foregoing findings indisputably prove that the issue of separation pay emanates solely from WHEREFORE, premises considered, the instant Petition is DENIED. The 18 September 2007
respondent’s allegation of illegal dismissal. In fact, petitioner itself acknowledged the issue of illegal Decision and 17 March 2008 Resolution of the Court of Appeals in CA-G.R. SP No. 92526, are
dismissal in its position paper submitted to the NCMB. hereby AFFIRMED.

Moreover, we note that even the NLRC was of the understanding that the NCMB arbitration case SO ORDERED.
sought to resolve the issue of the legality of the dismissal of the respondent. In fact, the identity of
the issue of the legality of his dismissal, which was previously submitted to the NCMB, and later
submitted to the NLRC, was the basis of the latter’s finding of forum shopping and the consequent
dismissal of the case before it. In fact, petitioner also implicitly acknowledged this when it filed
before the NLRC its Motion to Dismiss respondent’s Complaint on the ground of forum shopping.
Thus, it is now estopped from claiming that the issue before the NCMB does not include the issue
of the legality of the dismissal of respondent. Besides, there has to be a reason for deciding the
issue of respondent’s entitlement to separation pay. To think otherwise would lead to absurdity,
because the voluntary arbitrator would then be deciding that issue in a vacuum. The arbitrator
would have no basis whatsoever for saying that Albarico was entitled to separation pay or not if the
issue of the legality of respondent’s dismissal was not resolve first.

Hence, the voluntary arbitrator correctly assumed that the core issue behind the issue of
separation pay is the legality of the dismissal of respondent. Moreover, we have ruled in Sime
33
Darby Pilipinas, Inc. v. Deputy Administrator Magsalin that a voluntary arbitrator has plenary
jurisdiction and authority to interpret an agreement to arbitrate and to determine the scope of his
own authority when the said agreement is vague — subject only, in a proper case, to the certiorari
jurisdiction of this Court.

Having established that the issue of the legality of dismissal of Albarico was in fact necessarily –
albeit not explicitly – included in the Submission Agreement signed by the parties, this Court rules
that the voluntary arbitrator rightly assumed jurisdiction to decide the said issue.

Consequently, we also rule that the voluntary arbitrator may award backwages upon a finding of
illegal dismissal, even though the issue of entitlement thereto is not explicitly claimed in the
Submission Agreement. Backwages, in general, are awarded on the ground of equity as a form of
34
relief that restores the income lost by the terminated employee by reason of his illegal dismissal.
SECOND DIVISION Management representative informed that complainant is a drama
PEOPLES BROADCASTING G.R. No. 179652 talent hired on a per drama participation basis hence no employer-
(BOMBO RADYO PHILS., INC.), employeeship [sic] existed between them. As proof of this, management
Petitioner, Present: presented photocopies of cash vouchers, billing statement, employments of
specific undertaking (a contract between the talent director & the complainant),
*
CARPIO MORALES, J., summary of billing of drama production etc. They (mgt.) has [sic] not control of
Acting Chairperson, the talent if he ventures into another contract w/ other broadcasting industries.
- versus - TINGA,
VELASCO, JR., On the other hand, complainant Juezans alleged violation of non-
**
LEONARDO-DE CASTRO, and diminution of benefits is computed as follows:
BRION, JJ.
THE SECRETARY OF THE @ P 2,000/15 days + 1.5 mos = P 6,000
DEPARTMENT OF LABOR AND Promulgated: (August 1/03 to Sept 15/03)
EMPLOYMENT, THE REGIONAL
DIRECTOR, DOLE REGION VII, May 8, 2009 Note: Recommend for summary investigation or whatever action
[5]
and JANDELEON JUEZAN, deem proper.
Respondents.
x----------------------------------------------------------------------------x Petitioner was required to rectify/restitute the violations within five (5) days from receipt. No
rectification was effected by petitioner; thus, summary investigations were conducted, with the
[6]
parties eventually ordered to submit their respective position papers.
DECISION
[7]
In his Order dated 27 February 2004, DOLE Regional Director Atty. Rodolfo M. Sabulao
TINGA, J.: (Regional Director) ruled that respondent is an employee of petitioner, and that the former is
entitled to his money claims amounting to P203,726.30. Petitioner sought reconsideration of the
The present controversy concerns a matter of first impression, requiring as it does the Order, claiming that the Regional Director gave credence to the documents offered by respondent
determination of the demarcationline between the prerogative of the Department of Labor and without examining the originals, but at the same time he missed or failed to consider
[8]
Employment (DOLE) Secretary and his duly authorized representatives, on the one hand, and the petitioners evidence.Petitioners motion for reconsideration was denied. On appeal to the DOLE
jurisdiction of the National Labor Relations Commission, on the other, under Article 128 (b) of the Secretary, petitioner denied once more the existence of employer-employee relationship. In its
Labor Code in an instance where the employer has challenged the jurisdiction of the DOLE at the Order dated 27 January 2005, the Acting DOLE Secretary dismissed the appeal on the ground that
very first level on the ground that no employer-employee relationship ever existed between the petitioner did not post a cash or surety bond and instead submitted a Deed of Assignment of Bank
[9]
parties. Deposit.

I. Petitioner elevated the case to the Court of Appeals, claiming that it was denied due process when
the DOLE Secretary disregarded the evidence it presented and failed to give it the opportunity to
refute the claims of respondent. Petitioner maintained that there is no employer-employee
The instant petition for certiorari under Rule 65 assails the decision and the resolution of the Court relationship had ever existed between it and respondent because it was the drama directors and
of Appeals dated 26 October 2006 and 26 June 2007, respectively, in C.A. G.R. CEB-SP No. producers who paid, supervised and disciplined respondent. It also added that the case was
[1]
00855. beyond the jurisdiction of the DOLE and should have been considered by the labor arbiter
because respondents claim exceeded P5,000.00.
The petition traces its origins to a complaint filed by Jandeleon Juezan (respondent) against
Peoples Broadcasting Service, Inc. (Bombo Radyo Phils., Inc) (petitioner) for illegal deduction, The Court of Appeals held that petitioner was not deprived of due process as the essence thereof
th
non-payment of service incentive leave, 13 month pay, premium pay for holiday and rest day and is only an opportunity to be heard, which petitioner had when it filed a motion for reconsideration
illegal diminution of benefits, delayed payment of wages and non-coverage of SSS, PAG-IBIG and with the DOLE Secretary. It further ruled that the latter had the power to order and enforce
Philhealth before the Department of Labor and Employment (DOLE) Regional Office No. compliance with labor standard laws irrespective of the amount of individual claims because the
[2]
VII, Cebu City. On the basis of the complaint, the DOLE conducted a plant level inspection on 23 limitation imposed by Article 29 of the Labor Code had been repealed by Republic Act No.
[3] [10] [11]
September 2003. In the Inspection Report Form, the Labor Inspector wrote under the heading 7730. Petitioner sought reconsideration of the decision but its motion was denied.
Findings/Recommendations non-diminution of benefits and Note: Respondent deny employer-
employee relationship with the complainant- see Notice of Inspection results. In the Notice of Before this Court, petitioner argues that the National Labor Relations Commission (NLRC), and not
[4]
Inspection Results also bearing the date 23 September 2003, the Labor Inspector made the the DOLE Secretary, has jurisdiction over respondents claim, in view of Articles 217 and 128 of the
[12]
following notations: Labor Code. It adds that the Court of Appeals committed grave abuse of discretion when it
dismissed petitioners appeal without delving on the issues raised therein, particularly the claim that
no employer-employee relationship had ever existed between petitioner and respondent. Finally,
petitioner avers that there is no appeal, or any plain, speedy and adequate remedy in the ordinary The first situation is categorically covered by Sec. 3, Rule 11 of the Rules on the Disposition
[15]
course of law available to it. of Labor Standards Cases issued by the DOLE Secretary. It reads:

On the other hand, respondent posits that the Court of Appeals did not abuse its discretion. He Rule II MONEY CLAIMS ARISING FROM COMPLAINT/ROUTINE
invokes Republic Act No. 7730, which removes the jurisdiction of the Secretary of Labor and INSPECTION
Employment or his duly authorized representatives, from the effects of the restrictive provisions of
Article 129 and 217 of the Labor Code, regarding the confinement of jurisdiction based on the Sec. 3. Complaints where no employer-employee relationship actually
[13]
amount of claims. Respondent also claims that petitioner was not denied due process since exists. Where employer-employee relationship no longer exists by reason of
even when the case was with the Regional Director, a hearing was conducted and pieces of the fact that it has already been severed, claims for payment of monetary
evidence were presented. Respondent stands by the propriety of the Court of Appeals ruling that benefits fall within the exclusive and original jurisdiction of the labor
there exists an employer-employee relationship between him and petitioner.Finally, respondent arbiters. Accordingly, if on the face of the complaint, it can be ascertained
argues that the instant petition for certiorari is a wrong mode of appeal considering that petitioner that employer-employee relationship no longer exists, the case, whether
had earlier filed a Petition for Certiorari, Mandamus and Prohibition with the Court of accompanied by an allegation of illegal dismissal, shall immediately be
[14]
Appeals; petitioner, instead, should have filed a Petition for Review. endorsed by the Regional Director to the appropriate branch of the National
II. Labor Relations Commission (NLRC).
[16]
The significance of this case may be reduced to one simple questiondoes the Secretary of Labor In the recent case of Bay Haven, Inc. v. Abuan, this Court recognized the first situation
have the power to determine the existence of an employer-employee relationship? and accordingly ruled that a complainants allegation of his illegal dismissal had deprived the DOLE
[17]
of jurisdiction as per Article 217 of the Labor Code.
To resolve this pivotal issue, one must look into the extent of the visitorial and enforcement power
of the DOLE found in Article 128 (b) of the Labor Code, as amended by Republic Act 7730. It In the first situation, the claim has to be referred to the NLRC because it is the NLRC which
reads: has jurisdiction in view of the termination of the employer-employee relationship. The same
procedure has to be followed in the second situation since it is the NLRC that has jurisdiction in
Article 128 (b) Notwithstanding the provisions of Articles 129 and 217 of this view of the absence of employer-employee relationship between the evidentiary parties from the
Code to the contrary, and in cases where the relationship of employer- start.
employee still exists, the Secretary of Labor and Employment or his duly
authorized representatives shall have the power to issue compliance orders to Clearly the law accords a prerogative to the NLRC over the claim when the employer-
give effect to the labor standards provisions of this Code and other labor employee relationship has terminated or such relationship has not arisen at all. The reason is
legislation based on the findings of labor employment and enforcement officers obvious. In the second situation especially, the existence of an employer-employee relationship is
or industrial safety engineers made in the course of inspection. The Secretary a matter which is not easily determinable from an ordinary inspection, necessarily so, because the
or his duly authorized representative shall issue writs of execution to the elements of such a relationship are not verifiable from a mere ocular examination. The intricacies
appropriate authority for the enforcement of their orders, except in cases where and implications of an employer-employee relationship demand that the level of scrutiny should be
the employer contests the findings of the labor employment and enforcement far above the cursory and the
officer and raises issues supported by documentary proofs which were not mechanical. While documents, particularly documents found in the employers
considered in the course of inspection. (emphasis supplied)

xxx

The provision is quite explicit that the visitorial and enforcement power of the DOLE office are the primary source materials, what may prove decisive are factors related to the history
comes into play only in cases when the relationship of employer-employee still exists. It also of the employers business operations, its current state as well as accepted contemporary practices
underscores the avowed objective underlying the grant of power to the DOLE which is to give in the industry. More often than not, the question of employer-employee relationship becomes a
effect to the labor standard provision of this Code and other labor legislation. Of course, a persons battle of evidence, the determination of which should be comprehensive and intensive and
entitlement to labor standard benefits under the labor laws presupposes the existence of employer- therefore best left to the specialized quasi-judicial body that is the NLRC.
employee relationship in the first place.
It can be assumed that the DOLE in the exercise of its visitorial and enforcement
The clause in cases where the relationship of employer-employee still exists signifies that power somehow has to make a determination of the existence of an employer-employee
the employer-employee relationship must have existed even before the emergence of the relationship. Such prerogatival determination, however, cannot be coextensive with the
controversy. Necessarily, the DOLEs power does not apply in two instances, namely: (a) visitorial and enforcement power itself. Indeed, such determination is merely preliminary,
where the employer-employee relationship has ceased; and (b) where no such relationship incidental and collateral to the DOLEs primary function of enforcing labor standards
has ever existed. provisions. The determination of the existence of employer-employee relationship is still
primarily lodged with the NLRC. This is the meaning of the clause in cases where the
relationship of employer-employee still exists in Art. 128 (b).
This decision should not be considered as placing an undue burden on the Secretary of
Thus, before the DOLE may exercise its powers under Article 128, two important Labor in the exercise of visitorial and enforcement powers, nor seen as an
questions must be resolved: (1) Does the employer-employee relationship still exist, or unprecedented diminution of the same, but rather a recognition of the statutory limitations thereon.
alternatively, was there ever an employer-employee relationship to speak of; and (2) Are there A mere assertion of absence of employer-employee relationship does not deprive the DOLE of
violations of the Labor Code or of any labor law? jurisdiction over the claim under Article 128 of the Labor Code. At least a prima facie showing of
such absence of relationship, as in this case, is needed to preclude the DOLE from the exercise of
its power. The Secretary of Labor would not have been precluded from exercising the powers
The existence of an employer-employee relationship is a statutory prerequisite to under Article 128 (b) over petitioner if another person with better-grounded claim of
and a limitation on the power of the Secretary of Labor, one which the legislative branch is employmentthan that which respondent had. Respondent, especially if he were an employee, could
entitled to impose. The rationale underlying this limitation is to eliminate the prospect of have very well enjoined other employees to complain with the DOLE, and, at the same time,
competing conclusions of the Secretary of Labor and the NLRC, on a matter fraught with questions petitioner could ill-afford to disclaim an employment relationship with all of the people under its
of fact and law, which is best resolved by the quasi-judicial body, which is the NRLC, rather than an aegis.
administrativeofficial of the executive branch of the government. If the Secretary of Labor proceeds
to exercise his visitorial and enforcement powers absent the first requisite, as the dissent Without a doubt, petitioner, since the inception of this case had been consistent in
proposes, his office confers jurisdiction on itself which it cannot otherwise acquire. maintaining that respondent is not its employee. Certainly, a preliminary determination, based on
the evidence offered, and noted by the Labor Inspector during the inspection as well as submitted
The approach suggested by the dissent is frowned upon by common law. To wit: during the proceedings before the Regional Director puts in genuine doubt the existence of
employer-employee relationship. From that point on, the prudent recourse on the part of the DOLE
[I]t is a general rule, that no court of limited jurisdiction can give should have been to referrespondent to the NLRC for the proper dispensation of his
itself jurisdiction by a wrong decision on a point collateral to the merits of claims. Furthermore, as discussed earlier, even the evidence relied on by the Regional Director in
the case upon which the limit to its jurisdiction depends; and however its his order are mere self-serving declarations of respondent, and hence cannot be relied upon as
decision may be final on all particulars, making up together that subject matter proof of employer-employee relationship.
which, if true, is within its jurisdiction, and however necessary in many cases it III.
may be for it to make a preliminary inquiry, whether some collateral matter be or
be not within the limits, yet, upon this preliminary question, its decision must Aside from lack of jurisdiction, there is another cogent reason to to set aside the Regional
[18]
always be open to inquiry in the superior court. Directors 27 February 2004Order. A careful study of the case reveals that the said Order, which
found respondent as an employee of petitioner and directed the payment of respondents money
claims, is not supported by substantial evidence, and was even made in disregard of the evidence
on record.

It is not enough that the evidence be simply considered. The standard is substantial
A more liberal interpretative mode, pragmatic or functional analysis, has also emerged in evidence as in all other quasi-judicial agencies. The standard employed in the last sentence of
ascertaining the jurisdictional boundaries of administrative agencies whose jurisdiction is Article 128(b) of the Labor Code that the documentary proofs be considered in the course of
established by statute. Under this approach, the Court examines the intended function of the inspection does not apply. It applies only to issues other than the fundamental issue of existence of
tribunal and decides whether a particular provision falls within or outside that function, rather than employer-employee relationship. A contrary rule would lead to controversies on the part of labor
[19]
making the provision itself the determining centerpiece of the analysis. Yet even under this more officials in resolving the issue of employer-employee relationship. The onset of arbitrariness is the
expansive approach, the dissent fails. advent of denial of substantive due process.

A reading of Art. 128 of the Labor Code reveals that the Secretary of Labor or his As a general rule, the Supreme Court is not a trier of facts. This applies with greater force
authorized representatives was granted visitorial and enforcement powers for the purpose in cases before quasi-judicial agencies whose findings of fact are accorded great respect and even
of determining violations of, and enforcing, the Labor Code and any labor law, wage order, or rules finality. To be sure, the same findings should be supported by substantial evidence from which the
and regulations issued pursuant thereto. Necessarily, the actual existence of an employer- said tribunals can make its own independent evaluation of the facts. Likewise, it must not be
employee relationship affects the complexion of the putative findings that the Secretary of Labor rendered with grave abuse of discretion; otherwise, this Court will not uphold the tribunals
[20]
may determine, since employees are entitled to a different set of rights under the Labor Code from conclusion. In the same manner, this Court will not hesitate to set aside the labor tribunals
the employer as opposed to non-employees.Among these differentiated rights are those accorded findings of fact when it is clearly shown that they were arrived at arbitrarily or in disregard of the
[21]
by the labor standards provisions of the Labor Code, which the Secretary of Labor is mandated to evidence on record or when there is showing of fraud or error of law.
enforce. If there is no employer-employee relationship in the first place, the duty of the employer to
adhere to those labor standards with respect to the non-employees is questionable. At the onset, it is the Courts considered view that the existence of employer- employee
relationship could have been easily resolved, or at least prima facie determined by the labor
inspector, during the inspection by looking at the records of petitioner which can be found in the
work premises. Nevertheless, even if the labor inspector had noted petitioners manifestation and
documents in the Notice of Inspection Results, it is clear that he did not give much credence to said
evidence, as he did not find the need to investigate the matter further. Considering that the Undertaking, wherein respondent was appointed by different drama directors as spinner/narrator
[25]
documents shown by petitioner, namely: cash vouchers, checks and statements of account, for specific radio programs.
summary billings evidencing payment to the alleged real employer of respondent, letter-contracts
denominated as Employment for a Specific Undertaking, prima facie negate the existence of
employer-employee relationship, the labor inspector could have exerted a bit more effort and
looked into petitioners payroll, for example, or its roll of employees, or interviewed other employees
in the premises. After all, the labor inspector, as a labor regulation officer is given access to
employers records and premises at any time of day or night whenever work is being undertaken In his Order, the Regional Director merely made a passing remark on petitioners claim of
therein, and the right to copy therefrom, to question any employee and investigate any fact, lack of employer-employee relationshipa token paragraphand proceeded to a detailed recitation of
condition or matter which may be necessary to determine violations or which may aid in the respondents allegations. The documents introduced by petitioner in its position paper and even
enforcement of this Code and of any labor law, wage order or rules and regulations pursuant those presented during the inspection were not given an iota of credibility. Instead, full recognition
[22]
thereto. Despite these far-reaching powers of labor regulation officers, records reveal that no and acceptance was accorded to the claims of respondentfrom the hours of work to his monthly
additional efforts were exerted in the course of the inspection. salary, to his alleged actual duties, as well as to his alleged evidence. In fact, the findings are
anchored almost verbatim on the self-serving allegations of respondent.
The Court further examined the records and discovered to its dismay that even the Regional
Director turned a blind eye to the evidence presented by petitioner and relied instead on the self- Furthermore, respondents pieces of evidencethe identification card and the certification
serving claims of respondent. issued by petitioners Greman Solante are not even determinative of an employer-employee
relationship. The certification, issued upon the request of respondent, specifically stated that MR.
In his position paper, respondent claimed that he was hired by petitioner in September 1996 JANDELEON JUEZAN is a program employee of PEOPLES BROADCASTING SERVICES, INC.
as a radio talent/spinner, working from 8:00 am until 5 p.m., six days a week, on a gross rate (DYMF- Bombo Radyo Cebu), it is not therefore crystal clear that complainant is a station
of P60.00 per script, earning an average of P15,0000.00 per month, payable on a semi-monthly employee rather than a program employee hence entitled to all the benefits appurtenant
[26]
basis. He added that the payment of wages was delayed; that he was not given any service thereto, as found by the DOLE Regional Director.Respondent should be bound by his own
th
incentive leave or its monetary commutation, or his 13 month pay; and that he was not made a evidence. Moreover, the classification as to whether one is a station employee and program
[27]
member of the Social Security System (SSS), Pag-Ibig and PhilHealth. By January 2001, the employee, as lifted from Policy Instruction No. 40, dividing the workers in the broadcast industry
number of radio programs of which respondent was a talent/spinner was reduced, resulting in the into only two groups is not binding on this Court, especially when the classification has no basis
[28]
reduction of his monthly income from P15,000.00 to only P4,000.00, an amount he could barely either in law or in fact.
live on. Anent the claim of petitioner that no employer-employee relationship ever existed,
respondent argued that that he was hired by petitioner, his wages were paid under the payroll of Even the identification card purportedly issued by petitioner is not proof of employer-
the latter, he was under the control of petitioner and its agents, and it was petitioner who had the employee relationship since it only identified respondent as an Authorized Representative of
[23]
power to dismiss him from his employment. In support of his position paper, respondent attached Bombo Radyo, and not as an employee. The phrase gains significance when compared vis a
a photocopy of an identification card purportedly issued by petitioner, bearing respondents picture vis the following notation in the sample identification cards presented by petitioner in its motion for
and name with the designation Spinner; at the back of the I.D., the following is written: This certifies reconsideration:
that the card holder is a duly Authorized MEDIA Representative of BOMBO RADYO PHILIPPINES
[24]
THE NO.1 Radio Network in the Country ***BASTA RADYO BOMBO*** Respondent likewise 1. This is to certify that the person whose picture and signature
included a Certification which reads: appear hereon is an employee of Bombo Radio Philippines.
2. This ID must be worn at all times within Bombo
This is to certify that MR. JANDELEON JUEZAN is a program employee of Radyo Philippines premises for proper identification and security.
PEOPLES BROADCASTING SERVICES, INC. (DYMF- Bombo Radyo Cebu) Furthermore, this is the property of Bombo
since 1990 up to the present. Radyo Philippines and must be surrendered upon separation from the
Furtherly certifies that Mr. Juezan is receiving a monthly salary of FIFTEEN company.
THOUSAND (P15,000.00) PESOS.
This certification is issued upon the request of the above stated name to
substantiate loan requirement. HUMAN RESOURCE DEPARMENT
th
Given this 18 day of April 2000, Cebu City , Philippines. (Signed)
(signed) JENALIN D. PALER
GREMAN B. SOLANTE HRD HEAD
Station Manager

On the other hand, petitioner maintained in its position paper that respondent had never
been its employee. Attached as annexes to its position paper are photocopies of cash vouchers it Respondent tried to address the discrepancy between his identification card and the
issued to drama producers, as well as letters of employment captioned Employment for a Specific standard identification cards issued by petitioner to its employees by arguing that what he annexed
to his position paper was the old identification card issued to him by petitioner. He then presented a
photocopy of another old identification card, this time purportedly issued to one of the employees The provision on appeals from the DOLE Regional Offices to the DOLE Secretary is in the last
[29]
who was issued the new identification card presented by petitioner. Respondents argument does paragraph of Art. 128 (b) of the Labor Code, which reads:
not convince. If it were true that he is an employee of petitioner, he would have been issued a new
identification card similar to the ones presented by petitioner, and he should have presented a An order issued by the duly authorized representative of the
copy of such new identification card. His failure to show a new identification card merely Secretary of Labor and Employment under this article may be appealed to the
demonstrates that what he has is only his Media ID, which does not constitute proof of his latter. In case said order involves a monetary award, an appeal by the
employment with petitioner. employer may be perfected only upon the posting of a cash or surety
bond issued by a reputable bonding company duly accredited by the
It has long been established that in administrative and quasi-judicial proceedings, substantial Secretary of Labor and Employment in the amount equivalent to the
evidence is sufficient as a basis for judgment on the existence of employer-employee monetary award in the order appealed from. (emphasis supplied)
relationship. Substantial evidence, which is the quantum of proof required in labor cases, is that
amount of relevant evidence which a reasonable mind might accept as adequate to justify a
[30]
conclusion. No particular form of evidence is required to prove the existence of such employer- While the requirements for perfecting an appeal must be strictly followed as they are
employee relationship.Any competent and relevant evidence to prove the relationship may be considered indispensable interdictions against needless delays and for orderly discharge of judicial
[31]
admitted. Hence, while no particular form of evidence is required, a finding that such relationship business, the law does admit exceptions when warranted by the circumstances. Technicality
exists must still rest on some substantial evidence. Moreover, the substantiality of the evidence should not be allowed to stand in the way of equitably and completely resolving the rights and
[32] [37]
depends on its quantitative as well as its qualitative aspects. obligations of the parties. Thus, in some cases, the bond requirement on appeals involving
monetary awards had been relaxed, such as when (i) there was substantial compliance with the
In the instant case, save for respondents self-serving allegations and self-defeating Rules; (ii) the surrounding facts and circumstances constitute meritorious ground to reduce the
evidence, there is no substantial basis to warrant the Regional Directors finding that respondent is bond; (iii) a liberal interpretation of the requirement of an appeal bond would serve the desired
an employee of petitioner. Interestingly, the Order of the Secretary of Labor denying petitioners objective of resolving controversies on the merits; or (iv) the appellants, at the very least exhibited
[38]
appeal dated 27 January 2005, as well as the decision of the Court of Appeals dismissing the their willingness and/or good faith by posting a partial bond during the reglementary period.
petition for certiorari, are silent on the issue of the existence of an employer-employee relationship,
which further suggests that no real and proper determination the existence of such relationship was A review of the documents submitted by petitioner is called for to determine whether they should
ever made by these tribunals. Even the dissent skirted away from the issue of the existence of have been admitted as or in lieu of the surety or cash bond to sustain the appeal and serve the
employer-employee relationship and conveniently ignored the dearth of evidence presented by ends of substantial justice.
respondent.
The Deed of Assignment reads:
Although substantial evidence is not a function of quantity but rather of quality, the peculiar
environmental circumstances of the instant case demand that something more should have been DEED OF ASSIGNMENT OF BANK DEPOSIT
[33]
proffered. Had there been other proofs of employment, such as respondents inclusion in WITH SPECIAL POWER OF ATTORNEY
petitioners payroll, or a clear exercise of control, the Court would have affirmed the finding of
employer-employee relationship. The Regional Director, therefore, committed grievous error in
ordering petitioner to answer for respondents claims. Moreover, with the conclusion that no KNOW ALL MEN BY THESE PRESENTS:
employer-employee relationship has ever existed between petitioner and respondent, it is crystal-
clear that the DOLE Regional Director had no jurisdiction over respondents complaint. Thus, the That I, GREMAN B. SOLANTE in my capacity as Station Manager of DYMF
improvident exercise of power by the Secretary of Labor and the Regional Director behooves the Cebu City, PEOPLES BROADCASTING SERVICES, INC., a corporation
court to subject their actions for review and to invalidate all the subsequent orders they issued. duly authorized and existing under and by virtue of the laws of the
Philippines, for and in consideration of the sum of PESOS: TWO HUNDRED
THREE THOUSAND SEVEN HUNDRED TWENTY SIX PESOS & 30/100
ONLY (P203,726.30) Phil. Currency, as CASH BOND GUARANTEE for the
monetary award in favor to the Plaintiff in the Labor Case docketed as LSED
IV. Case No. R0700-2003-09-CI-09, now pending appeal.

The records show that petitioners appeal was denied because it had allegedly failed to post a cash That Respondent-Appellant do hereby undertake to guarantee available and
[34]
or surety bond. What it attached instead to its appeal was the Letter Agreement executed by sufficient funds covered by Platinum Savings Deposit (PSD) No. 010-8-
[35]
petitioner and its bank, the cash voucher, and theDeed of Assignment of Bank 00038-4 of PEOPLES BROADCASTING SERVICES, INC. in the amount of
[36]
Deposits. According to the DOLE, these documents do not constitute the cash or surety bond PESOS: TWO HUNDRED THREE THOUSAND SEVEN HUNDRED
contemplated by law; thus, it is as if no cash or surety bond was posted when it filed its appeal. TWENTY SIX PESOS & 30/100 ONLY (P203,726.30) payable to Plaintiff-
Appellee/Department of Labor and Employment Regional Office VII at
The Court does not agree. Queen City Development Bank, Cebu Branch, Sanciangko St. Cebu City.
It is understood that the said bank has the full control of Platinum Savings purposes it may serve. There was no indication that the said deposit was made specifically for the
Deposit (PSD) No. 010-8-00038-4 from and after this date and that said sum pending appeal, as in the instant case. Thus, the Court ruled that the bank certification had not in
cannot be withdrawn by the Plaintiff-Appellee/ Department of Labor and any way ensured that the award would be paid should the appeal fail. Neither was the appellee in
Employment Regional Office VII until such time that a Writ of Execution shall the case prevented from making withdrawals from the savings account. Finally, the amount
[42]
be ordered by the Appellate Office. deposited was measly compared to the total monetary award in the judgment.

FURTHER, this Deed of Assignment is limited to the principal amount of V.


PESOS: TWO HUNDRED THREE THOUSAND SEVEN HUNDRED
TWENTY SIX PESOS & 30/100 ONLY (P203,726.30) Phil. Currency, Another question of technicality was posed against the instant petition in the hope that it would not
therefore, any interest to be earned from the said Deposit will be for the be given due course.Respondent asserts that petitioner pursued the wrong mode of appeal and
account holder. thus the instant petition must be dismissed. Once more, the Court is not convinced.
th
IN WITNESS WHEREOF, I have hereunto affixed my signature this 18 day A petition for certiorari is the proper remedy when any tribunal, board or officer
if June, 2004, in the City of Cebu, Philippines. exercising judicial or quasi-judicial functions has acted without or in excess of its jurisdiction, or
with grave abuse of discretion amounting to lack or excess of jurisdiction and there is no appeal,
PEOPLES BROADCASTING SERVICES, INC. nor any plain speedy, and adequate remedy at law. There is grave abuse of discretion when
By: respondent acts in a capricious or whimsical manner in the exercise of its judgment as to be
[43]
equivalent to lack of jurisdiction.
(Signed)
GREMAN B. SOLANTE Respondent may have a point in asserting that in this case a Rule 65 petition is a wrong
Station Manager mode of appeal, as indeed the writ of certiorari is an extraordinary remedy, and certiorari
jurisdiction is not to be equated with appellate jurisdiction.Nevertheless, it is settled, as a general
As priorly mentioned, the Deed of Assignment was accompanied by a Letter Agreement proposition, that the availability of an appeal does not foreclose recourse to the extraordinary
between Queen City Development Bank and petitioner concerning Platinum Savings Deposit remedies, such as certiorari and prohibition, where appeal is not adequate or equally beneficial,
[39]
(PSD) No. 010-8-00038-4, and a Cash Voucher issued by petitioner showing speedy and sufficient, as where the orders of the trial court were issued in excess of or without
the amount of P203,726.30 deposited at the said bank. jurisdiction, or there is need to promptly relieve the aggrieved party from the injurious effects of the
[44]
Casting aside the technical imprecision and inaptness of words that mark the three documents, a acts of an inferior court or tribunal, e.g., the court has authorized execution of the judgment. This
liberal reading reveals the documents petitioner did assign, as cash bond for the monetary award Court has even recognized that a recourse to certiorari is proper not only where there is a clear
in favor of respondent in LSED Case NO. RO700-2003-CI-09, the amount of P203,726.30 covered deprivation of petitioners fundamental right to due process, but so also where other special
[45]
by petitioners PSD Account No. 010-8-00038-4 with the Queen City Development Bank at circumstances warrant immediate and more direct action.
Sanciangko St. Cebu City, with the depositary bank authorized to remit the amount to, and upon
withdrawal by respondent and or the Department of Labor and Employment Regional Office VII, on In one case, it was held that the extraordinary writ of certiorari will lie if it is satisfactorily
the basis of the proper writ of execution. The Court finds that the Deed of Assignment constitutes established that the tribunal acted capriciously and whimsically in total disregard of evidence
[46]
substantial compliance with the bond requirement. material to or even decisive of the controversy, and if it is shown that the refusal to allow a Rule
65 petition would result in the infliction of an injustice on a party by a judgment that evidently was
The purpose of an appeal bond is to ensure, during the period of appeal, against any rendered whimsically and capriciously, ignoring and disregarding uncontroverted facts and familiar
[47]
occurrence that would defeat or diminish recovery by the aggrieved employees under the judgment legal principles without any valid cause whatsoever.
[40]
if subsequently affirmed. The Deed of Assignment in the instant case, like a cash or surety bond,
serves the same purpose. First, the Deed of Assignment constitutes not just a partial amount, but It must be remembered that a wide breadth of discretion is granted a court of justice in certiorari
[48]
rather the entire award in the appealed Order. Second, it is clear from the Deed of Assignment that proceedings. The Court has not too infrequently given due course to a petition for certiorari, even
the entire amount is under the full control of the bank, and not of petitioner, and is in fact payable to when the proper remedy would have been an appeal, where valid and compelling considerations
[49]
the DOLE Regional Office, to be withdrawn by the same office after it had issued a writ of would warrant such a recourse. Moreover, the Court allowed a Rule 65 petition, despite the
execution. For all intents and purposes, the Deed of Assignment in tandem with the Letter availability of plain, speedy or adequate remedy, in view of the importance of the issues raised
Agreement and Cash Voucher is as good as cash. Third, the Court finds that the execution of the
Deed of Assignment, the Letter Agreement and the Cash Voucher were made in good faith, and
constitutedclear manifestation of petitioners willingness to pay the judgment amount.
[50]
The Deed of Assignment must be distinguished from the type of bank certification submitted by therein. The rules were also relaxed by the Court after considering the public interest involved in
[41] [51]
appellants in Cordova v. Keysas Boutique, wherein this Court found that such bank certification the case; when public welfare and the advancement of public policy dictates; when the broader
did not come close to the cash or surety bond required by law. The bank certification interest of justice so requires; when the writs issued are null and void; or when the questioned
[52]
in Cordova merely stated that the employer maintains a depository account with a balance order amounts to an oppressive exercise of judicial authority.
of P23,008.19, and that the certification was issued upon the depositors request for whatever legal
The peculiar circumstances of this case warrant, as we held in Republic v. Court of
Appeals, 107 SCRA 504, 524, the exercise once more of our exclusive prerogative to suspend our
own rules or to exempt a particular case from its operation as in x x Republic of the Philippines v.
Court of Appeals, et al., (83 SCRA 453, 478-480 [1978]), thus: x x The Rules have been
drafted with the primary objective of enhancing fair trials and expediting justice. As a corollary, if
their applications and operation tend to subvert and defeat instead of promote and enhance it, their
[53]
suspension is justified.

The Regional Director fully relied on the self-serving allegations of respondent and
misinterpreted the documents presented as evidence by respondent. To make matters worse,
DOLE denied petitioners appeal based solely on petitioners alleged failure to file a cash or surety
bond, without any discussion on the merits of the case. Since the petition for certioraribefore the
Court of Appeals sought the reversal of the two aforesaid orders, the appellate court necessarily
had to examine the evidence anew to determine whether the conclusions of the DOLE were
supported by the evidence presented. It appears, however, that the Court of Appeals did not even
review the assailed orders and focused instead on a general discussion of due process and the
jurisdiction of the Regional Director. Had the appellate court truly reviewed the records of the case,
it would have seen that there existed valid and sufficient grounds for finding grave abuse of
discretion on the part of the DOLE Secretary as well the Regional Director. In ruling and acting as it
did, the Court finds that the Court of Appeals may be properly subjected to
its certiorari jurisdiction. After all, this Court has previously ruled
that the extraordinary writ ofcertiorari will lie if it is satisfactorily
established that the tribunal had acted capriciously and whimsically in total disregard of evidence
[54]
material to or even decisive of the controversy.

The most important consideration for the allowance of the instant petition is the opportunity
for the Court not only to set the demarcation between the NLRCs jurisdiction and the
DOLEs prerogative but also the procedure when the case involves the fundamental
challenge on the DOLEs prerogative based on lack of employer-employee relationship.
Asexhaustively discussed here, the DOLEs prerogative hinges on the existence
of employer-employee relationship, the issue is which is at the very heart of this case. And
the evidence clearly indicates private respondent has never been petitioners employee. But
the DOLE did not address, while the Court of Appeals glossed over, the issue. The
peremptory dismissal of the instant petition on a technicality would deprive the Court of the
opportunity to resolve the novel controversy.

WHEREFORE, the petition is GRANTED. The Decision dated 26 October 2006 and the
Resolution dated 26 June 2007 of the Court of Appeals in C.A. G.R. CEB-SP No. 00855
are REVERSED and SET ASIDE. The Order of the then Acting Secretary of the Department of
Labor and Employment dated 27 January 2005 denying petitioners
appeal, and the Orders of the Director, DOLE Regional Office No. VII, dated 24 May 2004 and 27
February 2004, respectively, are ANNULLED. The complaint against petitioner is DISMISSED.

SO ORDERED.
6
G.R. Nos. 178034 & 178117 G R. Nos. 186984-85 October 17, 2013 In a Decision dated September 30, 2004, the LA declared McBurnie as having been illegally
dismissed from employment, and thus entitled to receive from the respondents the following
amounts: (a) US$985,162.00 as salary and benefits for the unexpired term of their employment
ANDREW JAMES MCBURNIE, Petitioner,
contract, (b) ₱2,000,000.00 as moral and exemplary damages, and (c) attorney’s fees equivalent to
vs.
10% of the total monetary award.
EULALIO GANZON, EGI-MANAGERS, INC. and E. GANZON, INC., Respondents.
7
Feeling aggrieved, the respondents appealed the LA’s Decision to the NLRC. On November 5,
RESOLUTION 8 9
2004, they filed their Memorandum of Appeal and Motion to Reduce Bond , and posted an appeal
bond in the amount of ₱100,000.00. The respondents contended in their Motion to Reduce Bond,
REYES, J.: inter alia, that the monetary awards of the LA were null and excessive, allegedly with the intention
of rendering them incapable of posting the necessary appeal bond. They claimed that an award of
"more than ₱60 Million Pesos to a single foreigner who had no work permit and who left the
For resolution are the –
country for good one month after the purported commencement of his employment" was a patent
10
nullity. Furthermore, they claimed that because of their business losses that may be attributed to
1
(1) third motion for reconsideration filed by Eulalio Ganzon (Ganzon), EGI-Managers, an economic crisis, they lacked the capacity to pay the bond of almost ₱60 Million, or even the
Inc. (EGI) and E. Ganzon, Inc. (respondents) on March 27, 2012, seeking a millions of pesos in premium required for such bond.
2
reconsideration of the Court’s Decision dated September 18, 2009 that ordered the
dismissal of their appeal to the National Labor Relations Commission (NLRC) for failure 11
On March 31, 2005, the NLRC denied the motion to reduce bond, explaining that "in cases
to post additional appeal bond in the amount of ₱54,083,910.00; and
involving monetary award, an employer seeking to appeal the [LA’s] decision to the Commission is
unconditionally required by Art. 223, Labor Code to post bond in the amount equivalent to the
3 12
(2) motion for reconsideration filed by petitioner Andrew James McBurnie (McBurnie) on monetary award x x x." Thus, the NLRC required from the respondents the posting of an
4
September 26, 2012, assailing the Court en banc’s Resolution dated September 4, additional bond in the amount of ₱54,083,910.00.
2012 that (1) accepted the case from the Court’s Third Division and (2) enjoined the
implementation of the Labor Arbiter’s (LA) decision finding him to be illegally dismissed 13
When their motion for reconsideration was denied, the respondents decided to elevate the matter
by the respondents.
to the Court of Appeals (CA) via the Petition for Certiorari and Prohibition (With Extremely Urgent
Prayer for the Issuance of a Preliminary Injunction and/or Temporary Restraining
14
Antecedent Facts Order) docketed as CA-G.R. SP No. 90845.

The Decision dated September 18, 2009 provides the following antecedent facts and proceedings In the meantime, in view of the respondents’ failure to post the required additional bond, the NLRC
15
– dismissed their appeal in a Resolution dated March 8, 2006. The respondents’ motion for
16
reconsideration was denied on June 30, 2006. This prompted the respondents to file with the CA
the Petition for Certiorari (With Urgent Prayers for the Immediate Issuance of a Temporary
On October 4, 2002, McBurnie, an Australian national, instituted a complaint for illegal dismissal 17
Restraining Order and a Writ of Preliminary Injunction) docketed as CA-G.R. SP No. 95916,
and other monetary claims against the respondents. McBurnie claimed that on May 11, 1999, he which was later consolidated with CA-G.R. SP No. 90845.
5
signed a five-year employment agreement with the company EGI as an Executive Vice-President
who shall oversee the management of the company’s hotels and resorts within the Philippines. He
performed work for the company until sometime in November 1999, when he figured in an accident CA-G.R. SP Nos. 90845 and 95916
that compelled him to go back to Australia while recuperating from his injuries. While in Australia,
he was informed by respondent Ganzon that his services were no longer needed because their 18
On February 16, 2007, the CA issued a Resolution granting the respondents’ application for a writ
intended project would no longer push through. of preliminary injunction. It directed the NLRC, McBurnie, and all persons acting for and under their
authority to refrain from causing the execution and enforcement of the LA’s decision in favor of
The respondents opposed the complaint, contending that their agreement with McBurnie was to McBurnie, conditioned upon the respondents’ posting of a bond in the amount of ₱10,000,000.00.
jointly invest in and establish a company for the management of hotels. They did not intend to McBurnie sought reconsideration of the issuance of the writ of preliminary injunction, but this was
19
create an employer-employee relationship, and the execution of the employment contract that was denied by the CA in its Resolution dated May 29, 2007.
being invoked by McBurnie was solely for the purpose of allowing McBurnie to obtain an alien work
permit in the Philippines. At the time McBurnie left for Australia for his medical treatment, he had 20
McBurnie then filed with the Court a Petition for Review on Certiorari docketed as G.R. Nos.
not yet obtained a work permit.
178034 and 178117, assailing the CA Resolutions that granted the respondents’ application for the
injunctive writ. On July 4, 2007, the Court denied the petition on the ground of McBurnie’s failure to
comply with the 2004 Rules on Notarial Practice and to sufficiently show that the CA committed
21 22
any reversible error. A motion for reconsideration was denied with finality in a Resolution dated of the LA, and entered a new one dismissing McBurnie’s complaint. It explained that based on
October 8, 2007. records, McBurnie was never an employee of any of the respondents, but a potential investor in a
project that included said respondents, barring a claim of dismissal, much less, an illegal dismissal.
Granting that there was a contract of employment executed by the parties, McBurnie failed to
Unyielding, McBurnie filed a Motion for Leave (1) To File Supplemental Motion for Reconsideration 36
23 obtain a work permit which would have allowed him to work for any of the respondents. In the
and (2) To Admit the Attached Supplemental Motion for Reconsideration, which was treated by
absence of such permit, the employment agreement was void and thus, could not be the source of
the Court as a second motion for reconsideration, a prohibited pleading under Section 2, Rule 56 of
24 any right or obligation.
the Rules of Court. Thus, the motion for leave was denied by the Court in a Resolution dated
November 26, 2007. The Court’s Resolution dated July 4, 2007 then became final and executory
on November 13, 2007; accordingly, entry of judgment was made in G.R. Nos. 178034 and Court Decision dated September 18, 2009
25
178117.
37
On September 18, 2009, the Third Division of this Court rendered its Decision which reversed the
In the meantime, the CA ruled on the merits of CA-G.R. SP No. 90845 and CA-G.R. SP No. 95916 CA Decision dated October 27, 2008 and Resolution dated March 3, 2009. The dispositive portion
26
and rendered its Decision dated October 27, 2008, allowing the respondents’ motion to reduce reads:
appeal bond and directing the NLRC to give due course to their appeal. The dispositive portion of
the CA Decision reads:
WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals in CA-G.R. SP
Nos. 90845 and 95916 dated October 27, 2008 granting respondents’ Motion to Reduce Appeal
WHEREFORE, in view of the foregoing, the petition for certiorari and prohibition docketed as CA Bond and ordering the National Labor Relations Commission to give due course to respondents’
GR SP No. 90845 and the petition for certiorari docketed as CA GR SP No. 95916 are GRANTED. appeal, and its March 3, 2009 Resolution denying petitioner’s motion for reconsideration, are
Petitioners’ Motion to Reduce Appeal Bond is GRANTED. Petitioners are hereby DIRECTED to REVERSED and SET ASIDE. The March 8, 2006 and June 30, 2006 Resolutions of the National
post appeal bond in the amount of ₱10,000,000.00. The NLRC is hereby DIRECTED to give due Labor Relations Commission in NLRC NCR CA NO. 042913-05 dismissing respondents’ appeal for
course to petitioners’ appeal in CA GR SP No. 95916 which is ordered remanded to the NLRC for failure to perfect an appeal and denying their motion for reconsideration, respectively, are
further proceedings. REINSTATED and AFFIRMED.

27 38
SO ORDERED. SO ORDERED.

28
On the issue of the NLRC’s denial of the respondents’ motion to reduce appeal bond, the CA The Court explained that the respondents’ failure to post a bond equivalent in amount to the LA’s
39
ruled that the NLRC committed grave abuse of discretion in immediately denying the motion monetary award was fatal to the appeal. Although an appeal bond may be reduced upon motion
without fixing an appeal bond in an amount that was reasonable, as it denied the respondents of by an employer, the following conditions must first be satisfied: (1) the motion to reduce bond shall
29
their right to appeal from the decision of the LA. The CA explained that "(w)hile Art. 223 of the be based on meritorious grounds; and (2) a reasonable amount in relation to the monetary award is
Labor Code requiring bond equivalent to the monetary award is explicit, Section 6, Rule VI of the posted by the appellant. Unless the NLRC grants the motion to reduce the cash bond within the 10-
NLRC Rules of Procedure, as amended, recognized as exception a motion to reduce bond upon day reglementary period to perfect an appeal from a judgment of the LA, the employer is mandated
40
meritorious grounds and upon posting of a bond in a reasonable amount in relation to the monetary to post the cash or surety bond securing the full amount within the said 10-day period. The
30
award." respondents’ initial appeal bond of ₱100,000.00 was grossly inadequate compared to the LA’s
monetary award.
31
On the issue of the NLRC’s dismissal of the appeal on the ground of the respondents’ failure to
41
post the additional appeal bond, the CA also found grave abuse of discretion on the part of the The respondents’ first motion for reconsideration was denied by the Court for lack of merit via a
42
NLRC, explaining that an appeal bond in the amount of ₱54,083,910.00 was prohibitive and Resolution dated December 14, 2009.
excessive. Moreover, the appellate court cited the pendency of the petition for certiorari over the
denial of the motion to reduce bond, which should have prevented the NLRC from immediately
32 Meanwhile, on the basis of the Court’s Decision, McBurnie filed with the NLRC a motion for
dismissing the respondents’ appeal.
reconsideration with motion to recall and expunge from the records the NLRC Decision dated
43 44
November 17, 2009. The motion was granted by the NLRC in its Decision dated January 14,
45
Undeterred, McBurnie filed a motion for reconsideration. At the same time, the respondents moved 2010.
that the appeal be resolved on the merits by the CA. On March 3, 2009, the CA issued a
33
Resolution denying both motions. McBurnie then filed with the Court the Petition for Review on
34 Undaunted by the denial of their first motion for reconsideration of the Decision dated September
Certiorari docketed as G.R. Nos. 186984-85.
18, 2009, the respondents filed with the Court a Motion for Leave to Submit Attached Second
46 47
Motion for Reconsideration and Second Motion for Reconsideration, which motion for leave was
48
In the meantime, the NLRC, acting on the CA’s order of remand, accepted the appeal from the granted in a Resolution dated March 15, 2010. McBurnie was allowed to submit his comment on
35
LA’s decision, and in its Decision dated November 17, 2009, reversed and set aside the Decision the second motion, and the respondents, their reply to the comment. On January 25, 2012,
49
however, the Court issued a Resolution denying the second motion "for lack of merit," THE HONORABLE COURT HAS HELD IN NUMEROUS LABOR CASES THAT WITH RESPECT
50
"considering that a second motion for reconsideration is a prohibited pleading x x x." TO ARTICLE 223 OF THE LABOR CODE, THE REQUIREMENTS OF THE LAW SHOULD BE
GIVEN A LIBERAL INTERPRETATION, ESPECIALLY IF THERE ARE SPECIAL MERITORIOUS
CIRCUMSTANCES AND ISSUES.
The Court’s Decision dated September 18, 2009 became final and executory on March 14, 2012.
51
Thus, entry of judgment was made in due course, as follows:
IV. THE LA’S JUDGMENT WAS PATENTLY VOID SINCE IT AWARDS MORE THAN ₱60
MILLION PESOS TO A SINGLE FOREIGNER WHO HAD NO WORK PERMIT, AND NO
ENTRY OF JUDGMENT
WORKING VISA.

This is to certify that on September 18, 2009 a decision rendered in the above-entitled cases was
V.
filed in this Office, the dispositive part of which reads as follows:

PETITIONER MCBURNIE DID NOT IMPLEAD THE NATIONAL LABOR RELATIONS


xxxx
COMMISSION (NLRC) IN HIS APPEAL HEREIN, MAKING THE APPEAL INEFFECTIVE
AGAINST THE NLRC.
and that the same has, on March 14, 2012 become final and executory and is hereby recorded in
52
the Book of Entries of Judgments.
VI.

The Entry of Judgment indicated that the same was made for the Court’s Decision rendered in
NLRC HAS DISMISSED THE COMPLAINT OF PETITIONER MCBURNIE IN ITS NOVEMBER 17,
G.R. Nos. 186984-85.
2009 DECISION.

On March 27, 2012, the respondents filed a Motion for Leave to File Attached Third Motion for
VII.
Reconsideration, with an attached Motion for Reconsideration (on the Honorable Court’s 25
January 2012 Resolution) with Motion to Refer These Cases to the Honorable Court En
53
Banc. The third motion for reconsideration is founded on the following grounds: THE HONORABLE COURT’S 18 SEPTEMBER 2009 DECISION WAS TAINTED WITH VERY
SERIOUS IRREGULARITIES.
I.
VIII.
THE PREVIOUS 15 MARCH 2010 RESOLUTION OF THE HONORABLE COURT ACTUALLY
GRANTED RESPONDENTS’ "MOTION FOR LEAVE TO SUBMIT A SECOND MOTION FOR GR NOS. 178034 AND 178117 HAVE BEEN INADVERTENTLY INCLUDED IN THIS CASE.
RECONSIDERATION."
IX.
HENCE, RESPONDENTS RESPECTFULLY CONTEND THAT THE SUBSEQUENT 25 JANUARY
2012 RESOLUTION CANNOT DENY THE " SECOND MOTION FOR RECONSIDERATION " ON
THE HONORABLE COURT DID NOT DULY RULE UPON THE OTHER VERY MERITORIOUS
THE GROUND THAT IT IS A PROHIBITED PLEADING. MOREOVER, IT IS RESPECTFULLY
ARGUMENTS OF THE RESPONDENTS WHICH ARE AS FOLLOWS:
CONTENDED THAT THERE ARE VERY PECULIAR CIRCUMSTANCES AND NUMEROUS
IMPORTANT ISSUES IN THESE CASES THAT CLEARLY JUSTIFY GIVING DUE COURSE TO
RESPONDENTS’ "SECOND MOTION FOR RECONSIDERATION," WHICH ARE: (A) PETITIONER NEVER ATTENDED ANY OF ALL 14 HEARINGS BEFORE THE [LA]
(WHEN 2 MISSED HEARINGS MEAN DISMISSAL).
II.
(B) PETITIONER REFERRED TO HIMSELF AS A "VICTIM" OF LEISURE EXPERTS,
INC., BUT NOT OF ANY OF THE RESPONDENTS.
THE 10 MILLION PESOS BOND WHICH WAS POSTED IN COMPLIANCE WITH THE OCTOBER
27, 2008 DECISION OF THE COURT OF APPEALS IS A SUBSTANTIAL AND SPECIAL
MERITORIOUS CIRCUMSTANCE TO MERIT RECONSIDERATION OF THIS APPEAL. (C) PETITIONER’S POSITIVE LETTER TO RESPONDENT MR. EULALIO GANZON
CLEARLY SHOWS THAT HE WAS NOT ILLEGALLY DISMISSED NOR EVEN
DISMISSED BY ANY OF THE RESPONDENTS AND PETITIONER EVEN PROMISED
III.
TO PAY HIS DEBTS FOR ADVANCES MADE BY RESPONDENTS.
(D) PETITIONER WAS NEVER EMPLOYED BY ANY OF THE RESPONDENTS. Sec. 3. Second motion for reconsideration. ― The Court shall not entertain a second motion for
PETITIONER PRESENTED WORK FOR CORONADO BEACH RESORT WHICH IS reconsideration, and any exception to this rule can only be granted in the higher interest of justice
[NEITHER] OWNED NOR CONNECTED WITH ANY OF THE RESPONDENTS. by the Court en banc upon a vote of at least two-thirds of its actual membership. There is
reconsideration "in the higher interest of justice" when the assailed decision is not only legally
erroneous, but is likewise patently unjust and potentially capable of causing unwarranted and
(E) THE [LA] CONCLUDED THAT PETITIONER WAS DISMISSED EVEN IF THERE
irremediable injury or damage to the parties. A second motion for reconsideration can only be
WAS ABSOLUTELY NO EVIDENCE AT ALL PRESENTED THAT PETITIONER WAS
entertained before the ruling sought to be reconsidered becomes final by operation of law or by the
DISMISSED BY THE RESPONDENTS.
Court’s declaration.

(F) PETITIONER LEFT THE PHILIPPINES FOR AUSTRALIA JUST 2 MONTHS AFTER
x x x x (Emphasis ours)
THE START OF THE ALLEGED EMPLOYMENT AGREEMENT, AND HAS STILL NOT
RETURNED TO THE PHILIPPINES AS CONFIRMED BY THE BUREAU OF
IMMIGRATION. In a line of cases, the Court has then entertained and granted second motions for reconsideration
"in the higher interest of substantial justice," as allowed under the Internal Rules when the assailed
decision is "legally erroneous," "patently unjust" and "potentially capable of causing unwarranted
(G) PETITIONER COULD NOT HAVE SIGNED AND PERSONALLY APPEARED
and irremediable injury or damage to the parties." In Tirazona v. Philippine EDS Techno-Service,
BEFORE THE NLRC ADMINISTERING OFFICER AS INDICATED IN THE COMPLAINT 59
Inc. (PET, Inc.), we also explained that a second motion for reconsideration may be allowed in
SHEET SINCE HE LEFT THE COUNTRY 3 YEARS BEFORE THE COMPLAINT WAS
54 instances of "extraordinarily persuasive reasons and only after an express leave shall have been
FILED AND HE NEVER CAME BACK. 60 61
obtained." In Apo Fruits Corporation v. Land Bank of the Philippines, we allowed a second
motion for reconsideration as the issue involved therein was a matter of public interest, as it
55 56
On September 4, 2012, the Court en banc issued a Resolution accepting the case from the pertained to the proper application of a basic constitutionally-guaranteed right in the government’s
62
Third Division. It also issued a temporary restraining order (TRO) enjoining the implementation of implementation of its agrarian reform program. In San Miguel Corporation v. NLRC, the Court set
the LA’s Decision dated September 30, 2004. This prompted McBurnie’s filing of a Motion for aside the decisions of the LA and the NLRC that favored claimants-security guards upon the
57
Reconsideration, where he invoked the fact that the Court’s Decision dated September 18, 2009 Court’s review of San Miguel Corporation’s second motion for reconsideration. In Vir-Jen Shipping
63
had become final and executory, with an entry of judgment already made by the Court. and Marine Services, Inc. v. NLRC, et al., the Court en banc reversed on a third motion for
reconsideration the ruling of the Court’s Division on therein private respondents’ claim for wages
and monetary benefits.
Our Ruling

It is also recognized that in some instances, the prudent action towards a just resolution of a case
In light of pertinent law and jurisprudence, and upon taking a second hard look of the parties’
is for the Court to suspend rules of procedure, for "the power of this Court to suspend its own rules
arguments and the records of the case, the Court has ascertained that a reconsideration of this or to except a particular case from its operations whenever the purposes of justice require it,
Court’s Decision dated September 18, 2009 and Resolutions dated December 14, 2009 and 64 65
cannot be questioned." In De Guzman v. Sandiganbayan, the Court, thus, explained:
January 25, 2012, along with the lifting of the entry of judgment in G.R. No. 186984-85, is in order.

The rules of procedure should be viewed as mere tools designed to facilitate the attainment of
The Court’s acceptance of the
justice. Their strict and rigid application, which would result in technicalities that tend to frustrate
rather than promote substantial justice, must always be avoided. Even the Rules of Court envision
third motion for reconsideration this liberality. This power to suspend or even disregard the rules can be so pervasive and
encompassing so as to alter even that which this Court itself has already declared to be final, as
we are now compelled to do in this case. x x x.
At the outset, the Court emphasizes that second and subsequent motions for reconsideration are,
as a general rule, prohibited. Section 2, Rule 52 of the Rules of Court provides that "no second
motion for reconsideration of a judgment or final resolution by the same party shall be entertained." xxxx
The rule rests on the basic tenet of immutability of judgments. "At some point, a decision becomes
58
final and executory and, consequently, all litigations must come to an end." The Rules of Court was conceived and promulgated to set forth guidelines in the dispensation of
justice but not to bind and chain the hand that dispenses it, for otherwise, courts will be mere
The general rule, however, against second and subsequent motions for reconsideration admits of slaves to or robots of technical rules, shorn of judicial discretion. That is precisely why courts in
settled exceptions. For one, the present Internal Rules of the Supreme Court, particularly Section rendering real justice have always been, as they in fact ought to be, conscientiously guided by the
3, Rule 15 thereof, provides: norm that when on the balance, technicalities take a backseat against substantive rights, and not
the other way around. Truly then, technicalities, in the appropriate language of Justice Makalintal,
66
"should give way to the realities of the situation." x x x. (Citations omitted)
74
Consistent with the foregoing precepts, the Court has then reconsidered even decisions that have January 25, 2012 a Resolution denying the motion to reconsider for lack of merit, merely citing
attained finality, finding it more appropriate to lift entries of judgments already made in these cases. that it was a "prohibited pleading under Section 2, Rule 52 in relation to Section 4, Rule 56 of the
67 75
In Navarro v. Executive Secretary, we reiterated the pronouncement in De Guzman that the 1997 Rules of Civil Procedure, as amended." In League of Cities of the Philippines (LCP) v.
76
power to suspend or even disregard rules of procedure can be so pervasive and compelling as to Commission on Elections, we reiterated a ruling that when a motion for leave to file and admit a
alter even that which this Court itself has already declared final. The Court then recalled in Navarro second motion for reconsideration is granted by the Court, the Court therefore allows the filing of
an entry of judgment after it had determined the validity and constitutionality of Republic Act No. the second motion for reconsideration. In such a case, the second motion for reconsideration is no
9355, explaining that: longer a prohibited pleading. Similarly in this case, there was then no reason for the Court to still
consider the respondents’ second motion for reconsideration as a prohibited pleading, and deny it
plainly on such ground. The Court intends to remedy such error through this resolution.
Verily, the Court had, on several occasions, sanctioned the recall of entries of judgment in light of
attendant extraordinary circumstances. The power to suspend or even disregard rules of procedure
can be so pervasive and compelling as to alter even that which this Court itself had already More importantly, the Court finds it appropriate to accept the pending motion for reconsideration
declared final. In this case, the compelling concern is not only to afford the movants-intervenors the and resolve it on the merits in order to rectify its prior disposition of the main issues in the petition.
right to be heard since they would be adversely affected by the judgment in this case despite not Upon review, the Court is constrained to rule differently on the petitions. We have determined the
being original parties thereto, but also to arrive at the correct interpretation of the provisions of the grave error in affirming the NLRC’s rulings, promoting results that are patently unjust for the
[Local Government Code (LGC)] with respect to the creation of local government units. x x respondents, as we consider the facts of the case, pertinent law, jurisprudence, and the degree of
68
x. (Citations omitted) the injury and damage to the respondents that will inevitably result from the implementation of the
Court’s Decision dated September 18, 2009.
69
In Munoz v. CA, the Court resolved to recall an entry of judgment to prevent a miscarriage of
70
justice. This justification was likewise applied in Tan Tiac Chiong v. Hon. Cosico, wherein the The rule on appeal bonds
Court held that:
We emphasize that the crucial issue in this case concerns the sufficiency of the appeal bond that
The recall of entries of judgments, albeit rare, is not a novelty. In Muñoz v. CA , where the case was posted by the respondents. The present rule on the matter is Section 6, Rule VI of the 2011
was elevated to this Court and a first and second motion for reconsideration had been denied with NLRC Rules of Procedure, which was substantially the same provision in effect at the time of the
finality , the Court, in the interest of substantial justice, recalled the Entry of Judgment as well as respondents’ appeal to the NLRC, and which reads:
71
the letter of transmittal of the records to the Court of Appeals. (Citation omitted)
RULE VI
72
In Barnes v. Judge Padilla, we ruled: APPEALS

A final and executory judgment can no longer be attacked by any of the parties or be modified, Sec. 6. BOND. – In case the decision of the Labor Arbiter or the Regional Director involves a
directly or indirectly, even by the highest court of the land. monetary award, an appeal by the employer may be perfected only upon the posting of a cash or
surety bond. The appeal bond shall either be in cash or surety in an amount equivalent to the
monetary award, exclusive of damages and attorney’s fees.
However, this Court has relaxed this rule in order to serve substantial justice considering (a)
matters of life, liberty, honor or property, (b) the existence of special or compelling circumstances,
(c) the merits of the case, (d) a cause not entirely attributable to the fault or negligence of the party xxxx
favored by the suspension of the rules, (e) a lack of any showing that the review sought is merely
73
frivolous and dilatory, and (f) the other party will not be unjustly prejudiced thereby. (Citations
No motion to reduce bond shall be entertained except on meritorious grounds and upon the
omitted)
posting of a bond in a reasonable amount in relation to the monetary award.

As we shall explain, the instant case also qualifies as an exception to, first, the proscription against
The filing of the motion to reduce bond without compliance with the requisites in the preceding
second and subsequent motions for reconsideration, and second, the rule on immutability of
paragraph shall not stop the running of the period to perfect an appeal. (Emphasis supplied)
judgments; a reconsideration of the Decision dated September 18, 2009, along with the
Resolutions dated December 14, 2009 and January 25, 2012, is justified by the higher interest of
substantial justice. While the CA, in this case, allowed an appeal bond in the reduced amount of ₱10,000,000.00 and
then ordered the case’s remand to the NLRC, this Court’s Decision dated September 18, 2009
provides otherwise, as it reads in part:
To begin with, the Court agrees with the respondents that the Court’s prior resolve to grant , and
not just merely note, in a Resolution dated March 15, 2010 the respondents’ motion for leave to
submit their second motion for reconsideration already warranted a resolution and discussion of The posting of a bond is indispensable to the perfection of an appeal in cases involving monetary
the motion for reconsideration on its merits. Instead of doing this, however, the Court issued on awards from the decision of the Labor Arbiter. The lawmakers clearly intended to make the bond a
mandatory requisite for the perfection of an appeal by the employer as inferred from the provision The filing of a motion to reduce bond and compliance with the two conditions stop the running of
that an appeal by the employer may be perfected "only upon the posting of a cash or surety bond." the period to perfect an appeal. x x x
The word "only" makes it clear that the posting of a cash or surety bond by the employer is the
essential and exclusive means by which an employer’s appeal may be perfected. x x x.
xxxx

Moreover, the filing of the bond is not only mandatory but a jurisdictional requirement as well, that
The NLRC has full discretion to grant or deny the motion to reduce bond, and it may rule on the
must be complied with in order to confer jurisdiction upon the NLRC. Non-compliance therewith
motion beyond the 10-day period within which to perfect an appeal. Obviously, at the time of the
renders the decision of the Labor Arbiter final and executory. This requirement is intended to
filing of the motion to reduce bond and posting of a bond in a reasonable amount, there is no
assure the workers that if they prevail in the case, they will receive the money judgment in their
assurance whether the appellant’s motion is indeed based on "meritorious ground" and whether
favor upon the dismissal of the employer’s appeal. It is intended to discourage employers from
the bond he or she posted is of a "reasonable amount." Thus, the appellant always runs the risk of
using an appeal to delay or evade their obligation to satisfy their employees’ just and lawful claims.
failing to perfect an appeal.

xxxx
x x x In order to give full effect to the provisions on motion to reduce bond, the appellant must be
allowed to wait for the ruling of the NLRC on the motion even beyond the 10-day period to perfect
Thus, it behooves the Court to give utmost regard to the legislative and administrative intent to an appeal. If the NLRC grants the motion and rules that there is indeed meritorious ground and that
strictly require the employer to post a cash or surety bond securing the full amount of the monetary the amount of the bond posted is reasonable, then the appeal is perfected. If the NLRC denies the
award within the 10[-]day reglementary period. Nothing in the Labor Code or the NLRC Rules of motion, the appellant may still file a motion for reconsideration as provided under Section 15, Rule
Procedure authorizes the posting of a bond that is less than the monetary award in the judgment, VII of the Rules. If the NLRC grants the motion for reconsideration and rules that there is indeed
or would deem such insufficient posting as sufficient to perfect the appeal. meritorious ground and that the amount of the bond posted is reasonable, then the appeal is
perfected. If the NLRC denies the motion, then the decision of the labor arbiter becomes final and
executory.
While the bond may be reduced upon motion by the employer, this is subject to the conditions that
(1) the motion to reduce the bond shall be based on meritorious grounds; and (2) a reasonable
amount in relation to the monetary award is posted by the appellant, otherwise the filing of the xxxx
motion to reduce bond shall not stop the running of the period to perfect an appeal. The
qualification effectively requires that unless the NLRC grants the reduction of the cash bond within
In any case, the rule that the filing of a motion to reduce bond shall not stop the running of the
the 10-day reglementary period, the employer is still expected to post the cash or surety bond
period to perfect an appeal is not absolute. The Court may relax the rule. In Intertranz Container
securing the full amount within the said 10-day period. If the NLRC does eventually grant the
Lines, Inc. v. Bautista, the Court held:
motion for reduction after the reglementary period has elapsed, the correct relief would be to
reduce the cash or surety bond already posted by the employer within the 10-day
77
period. (Emphasis supplied; underscoring ours) "Jurisprudence tells us that in labor cases, an appeal from a decision involving a monetary award
may be perfected only upon the posting of cash or surety bond. The Court, however, has relaxed
this requirement under certain exceptional circumstances in order to resolve controversies on their
To begin with, the Court rectifies its prior pronouncement – the unqualified statement that even an
merits. These circumstances include: (1) fundamental consideration of substantial justice; (2)
appellant who seeks a reduction of an appeal bond before the NLRC is expected to post a cash or
prevention of miscarriage of justice or of unjust enrichment; and (3) special circumstances of the
surety bond securing the full amount of the judgment award within the 10-day reglementary period 80
case combined with its legal merits, and the amount and the issue involved." (Citations omitted
to perfect the appeal.
and emphasis ours)

The suspension of the period to


A serious error of the NLRC was its outright denial of the motion to reduce the bond, without even
perfect the appeal upon the filing of
considering the respondents’ arguments and totally unmindful of the rules and jurisprudence that
a motion to reduce bond
allow the bond’s reduction. Instead of resolving the motion to reduce the bond on its merits, the
NLRC insisted on an amount that was equivalent to the monetary award, merely explaining:
To clarify, the prevailing jurisprudence on the matter provides that the filing of a motion to reduce
bond, coupled with compliance with the two conditions emphasized in Garcia v. KJ
78 We are constrained to deny respondents’ motion for reduction. As held by the Supreme Court in a
Commercial for the grant of such motion, namely, (1) a meritorious ground, and (2) posting of a
recent case, in cases involving monetary award, an employer seeking to appeal the Labor Arbiter’s
bond in a reasonable amount, shall suffice to suspend the running of the period to perfect an
79 decision to the Commission is unconditionally required by Art. 223, Labor Code to post bond in the
appeal from the labor arbiter’s decision to the NLRC. To require the full amount of the bond within
amount equivalent to the monetary award (Calabash Garments vs. NLRC, G.R. No. 110827,
the 10-day reglementary period would only render nugatory the legal provisions which allow an 81
August 8, 1996). x x x (Emphasis ours)
appellant to seek a reduction of the bond. Thus, we explained in Garcia:
91 92
When the respondents sought to reconsider, the NLRC still refused to fully decide on the motion. It In Blancaflor v. NLRC, the Court also emphasized that while Article 223 of the Labor Code, as
refused to at least make a preliminary determination of the merits of the appeal, as it held: amended by Republic Act No. 6715, which requires a cash or surety bond in an amount equivalent
to the monetary award in the judgment appealed from may be considered a jurisdictional
requirement for the perfection of an appeal, nevertheless, adhering to the principle that substantial
We are constrained to dismiss respondents’ Motion for Reconsideration. Respondents’ contention
justice is better served by allowing the appeal on the merits to be threshed out by the NLRC, the
that the appeal bond is excessive and based on a decision which is a patent nullity involves the
82 foregoing requirement of the law should be given a liberal interpretation.
merits of the case. x x x

As the Court, nonetheless, remains firm on the importance of appeal bonds in appeals from
Prevailing rules and jurisprudence
monetary awards of LAs, we stress that the NLRC, pursuant to Section 6, Rule VI of the NLRC
allow the reduction of appeal bonds.
Rules of Procedure, shall only accept motions to reduce bond that are coupled with the posting of a
bond in a reasonable amount. Time and again, we have explained that the bond requirement
By such haste of the NLRC in peremptorily denying the respondents’ motion without considering imposed upon appellants in labor cases is intended to ensure the satisfaction of awards that are
the respondents’ arguments, it effectively denied the respondents of their opportunity to seek a made in favor of appellees, in the event that their claims are eventually sustained by the
93
reduction of the bond even when the same is allowed under the rules and settled jurisprudence. It courts. On the part of the appellants, its posting may also signify their good faith and willingness
was equivalent to the NLRC’s refusal to exercise its discretion, as it refused to determine and rule to recognize the final outcome of their appeal.
on a showing of meritorious grounds and the reasonableness of the bond tendered under the
83
circumstances. Time and again, the Court has cautioned the NLRC to give Article 223 of the
At the time of a motion to reduce appeal bond’s filing, the question of what constitutes "a
Labor Code, particularly the provisions requiring bonds in appeals involving monetary awards, a
84 reasonable amount of bond" that must accompany the motion may be subject to differing
liberal interpretation in line with the desired objective of resolving controversies on the merits. The
interpretations of litigants. The judgment of the NLRC which has the discretion under the law to
NLRC’s failure to take action on the motion to reduce the bond in the manner prescribed by law
determine such amount cannot as yet be invoked by litigants until after their motions to reduce
and jurisprudence then cannot be countenanced. Although an appeal by parties from decisions
appeal bond are accepted.
that are adverse to their interests is neither a natural right nor a part of due process, it is an
essential part of our judicial system. Courts should proceed with caution so as not to deprive a
party of the right to appeal, but rather, ensure that every party has the amplest opportunity for the Given these limitations, it is not uncommon for a party to unduly forfeit his opportunity to seek a
85
proper and just disposition of their cause, free from the constraints of technicalities. Considering reduction of the required bond and thus, to appeal, when the NLRC eventually disagrees with the
the mandate of labor tribunals, the principle equally applies to them. party’s assessment. These have also resulted in the filing of numerous petitions against the NLRC,
citing an alleged grave abuse of discretion on the part of the labor tribunal for its finding on the
sufficiency or insufficiency of posted appeal bonds.
Given the circumstances of the case, the Court’s affirmance in the Decision dated September 18,
2009 of the NLRC’s strict application of the rule on appeal bonds then demands a re-examination.
Again, the emerging trend in our jurisprudence is to afford every party-litigant the amplest It is in this light that the Court finds it necessary to set a parameter for the litigants’ and the NLRC’s
opportunity for the proper and just determination of his cause, free from the constraints of guidance on the amount of bond that shall hereafter be filed with a motion for a bond’s reduction.
86
technicalities. Section 2, Rule I of the NLRC Rules of Procedure also provides the policy that "the To ensure that the provisions of Section 6, Rule VI of the NLRC Rules of Procedure that give
Rules shall be liberally construed to carry out the objectives of the Constitution, the Labor Code of parties the chance to seek a reduction of the appeal bond are effectively carried out, without
the Philippines and other relevant legislations, and to assist the parties in obtaining just, however defeating the benefits of the bond requirement in favor of a winning litigant, all motions to
87
expeditious and inexpensive resolution and settlement of labor disputes." reduce bond that are to be filed with the NLRC shall be accompanied by the posting of a cash or
surety bond equivalent to 10% of the monetary award that is subject of the appeal, which shall
provisionally be deemed the reasonable amount of the bond in the meantime that an appellant’s
In accordance with the foregoing, although the general rule provides that an appeal in labor cases
motion is pending resolution by the Commission. In conformity with the NLRC Rules, the monetary
from a decision involving a monetary award may be perfected only upon the posting of a cash or
award, for the purpose of computing the necessary appeal bond, shall exclude damages and
surety bond, the Court has relaxed this requirement under certain exceptional circumstances in 94
attorney’s fees. Only after the posting of a bond in the required percentage shall an appellant’s
order to resolve controversies on their merits. These circumstances include: (1) the fundamental
period to perfect an appeal under the NLRC Rules be deemed suspended.
consideration of substantial justice; (2) the prevention of miscarriage of justice or of unjust
enrichment; and (3) special circumstances of the case combined with its legal merits, and the
88
amount and the issue involved. Guidelines that are applicable in the reduction of appeal bonds The foregoing shall not be misconstrued to unduly hinder the NLRC’s exercise of its discretion,
89
were also explained in Nicol v. Footjoy Industrial Corporation. The bond requirement in appeals given that the percentage of bond that is set by this guideline shall be merely provisional. The
involving monetary awards has been and may be relaxed in meritorious cases, including instances NLRC retains its authority and duty to resolve the motion and determine the final amount of bond
in which (1) there was substantial compliance with the Rules, (2) surrounding facts and that shall be posted by the appellant, still in accordance with the standards of "meritorious grounds"
circumstances constitute meritorious grounds to reduce the bond, (3) a liberal interpretation of the and "reasonable amount". Should the NLRC, after considering the motion’s merit, determine that a
requirement of an appeal bond would serve the desired objective of resolving controversies on the greater amount or the full amount of the bond needs to be posted by the appellant, then the party
merits, or (4) the appellants, at the very least, exhibited their willingness and/or good faith by shall comply accordingly. The appellant shall be given a period of 10 days from notice of the NLRC
90
posting a partial bond during the reglementary period. order within which to perfect the appeal by posting the required appeal bond.
Meritorious ground as a condition The agreement with EGI Managers, Inc. is made now to support your need to facilitate your work
for the reduction of the appeal bond permit with the Department of Labor in view of the expiration of your contract with Pan Pacific.

In all cases, the reduction of the appeal bond shall be justified by meritorious grounds and Regards,
accompanied by the posting of the required appeal bond in a reasonable amount.
103
Sgd. Eulalio Ganzon (p. 203, Records)
The requirement on the existence of a "meritorious ground" delves on the worth of the parties’
arguments, taking into account their respective rights and the circumstances that attend the case.
95 For the NLRC, the employment agreement could not have given rise to an employer-employee
The condition was emphasized in University Plans Incorporated v. Solano, wherein the Court
relationship by reason of legal impossibility. The two conditions that form part of their agreement,
held that while the NLRC’s Revised Rules of Procedure "allows the [NLRC] to reduce the amount
namely, the successful completion of the project financing for the hotel project in Baguio City and
of the bond, the exercise of the authority is not a matter of right on the part of the movant, but lies 104
96 McBurnie’s acquisition of an Alien Employment Permit, remained unsatisfied. The NLRC
within the sound discretion of the NLRC upon a showing of meritorious grounds." By
concluded that McBurnie was instead a potential investor in a project that included Ganzon, but the
jurisprudence, the merit referred to may pertain to an appellant’s lack of financial capability to pay
97 said project failed to pursue due to lack of funds. Any work performed by McBurnie in relation to
the full amount of the bond, the merits of the main appeal such as when there is a valid claim that
98 the project was merely preliminary to the business venture and part of his "due diligence" study
there was no illegal dismissal to justify the award, the absence of an employer-employee
99 100 before pursuing the project, "done at his own instance, not in furtherance of the employment
relationship, prescription of claims, and other similarly valid issues that are raised in the 105
101 contract but for his own investment purposes." Lastly, the alleged employment of the petitioner
appeal. For the purpose of determining a "meritorious ground", the NLRC is not precluded from
would have been void for being contrary to law, since it is undisputed that McBurnie did not have
receiving evidence, or from making a preliminary determination of the merits of the appellant’s
102 any work permit. The NLRC declared:
contentions.

Absent an employment permit, any employment relationship that McBurnie contemplated with the
In this case, the NLRC then should have considered the respondents’ arguments in the
respondents was void for being contrary to law. A void or inexistent contract, in turn, has no force
memorandum on appeal that was filed with the motion to reduce the requisite appeal bond.
and effect from the beginning as if it had never been entered into. Thus, without an Alien
Although a consideration of said arguments at that point would have been merely preliminary and
Employment Permit, the "Employment Agreement" is void and could not be the source of a right or
should not in any way bind the eventual outcome of the appeal, it was apparent that the
obligation. In support thereof, the DOLE issued a certification that McBurnie has neither applied nor
respondents’ defenses came with an indication of merit that deserved a full review of the decision 106
been issued an Alien Employment Permit (p. 204, Records).
of the LA. The CA, by its Resolution dated February 16, 2007, even found justified the issuance of
a preliminary injunction to enjoin the immediate execution of the LA’s decision, and this Court, a
temporary restraining order on September 4, 2012. McBurnie moved to reconsider, citing the Court’s Decision of September 18, 2009 that reversed
and set aside the CA’s Decision authorizing the remand. Although the NLRC granted the motion on
107
the said ground via a Decision that set aside the NLRC’s Decision dated November 17, 2009, the
Significantly, following the CA’s remand of the case to the NLRC, the latter even rendered a
findings of the NLRC in the November 17, 2009 decision merit consideration, especially since the
Decision that contained findings that are inconsistent with McBurnie’s claims. The NLRC reversed
findings made therein are supported by the case records.
and set aside the decision of the LA, and entered a new one dismissing McBurnie’s complaint. It
explained that McBurnie was not an employee of the respondents; thus, they could not have
dismissed him from employment. The purported employment contract of the respondents with the In addition to the apparent merit of the respondents’ appeal, the Court finds the reduction of the
petitioner was qualified by the conditions set forth in a letter dated May 11, 1999, which reads: appeal bond justified by the substantial amount of the LA’s monetary award. Given its considerable
amount, we find reason in the respondents’ claim that to require an appeal bond in such amount
could only deprive them of the right to appeal, even force them out of business and affect the
May 11, 1999 108 109
livelihood of their employees. In Rosewood Processing, Inc. v. NLRC, we emphasized:
"Where a decision may be made to rest on informed judgment rather than rigid rules, the equities
MR. ANDREW MCBURNIE of the case must be accorded their due weight because labor determinations should not be
110
‘secundum rationem but also secundum caritatem.’"
Re: Employment Contract
What constitutes a reasonable
amount in the determination of the
Dear Andrew,
final amount of appeal bond

It is understood that this Contract is made subject to the understanding that it is effective only when
As regards the requirement on the posting of a bond in a "reasonable amount," the Court holds that
the project financing for our Baguio Hotel project pushed through.
the final determination thereof by the NLRC shall be based primarily on the merits of the motion
and the main appeal.
Although the NLRC Rules of Procedure, particularly Section 6 of Rule VI thereof, provides that the In dismissing outright the motion to reduce bond filed by petitioners, NLRC abused its discretion. It
bond to be posted shall be "in a reasonable amount in relation to the monetary award ," the merit of should have fixed an appeal bond in a reasonable amount. Said dismissal deprived petitioners of
the motion shall always take precedence in the determination. Settled is the rule that procedural their right to appeal the Labor Arbiter’s decision.
rules were conceived, and should thus be applied in a manner that would only aid the attainment of
justice. If a stringent application of the rules would hinder rather than serve the demands of
111 xxxx
substantial justice, the former must yield to the latter.

NLRC Rules allow reduction of appeal bond on meritorious grounds (Sec. 6, Rule VI, NLRC Rules
Thus, in Nicol where the appellant posted a bond of ₱10,000,000.00 upon an appeal from the LA’s
of Procedure). This Court finds the appeal bond in the amount of ₱54,083,910.00 prohibitive and
award of ₱51,956,314.00, the Court, instead of ruling right away on the reasonableness of the 115
excessive, which constitutes a meritorious ground to allow a motion for reduction thereof.
bond’s amount solely on the basis of the judgment award, found it appropriate to remand the case
112
to the NLRC, which should first determine the merits of the motion. In University Plans, the Court
also reversed the outright dismissal of an appeal where the bond posted in a judgment award of The foregoing declaration of the Court requiring a bond in a reasonable amount, taking into
more than ₱30,000,000.00 was ₱30,000.00. The Court then directed the NLRC to first determine account the merits of the motion and the appeal, is consistent with the oft-repeated principle that
116
the merit, or lack of merit, of the motion to reduce the bond, after the appellant therein claimed that letter-perfect rules must yield to the broader interest of substantial justice.
it was under receivership and thus, could not dispose of its assets within a short notice. Clearly, the
rule on the posting of an appeal bond should not be allowed to defeat the substantive rights of the
113 The effect of a denial of the appeal
parties.

to the NLRC
Notably, in the present case, following the CA’s rendition of its Decision which allowed a reduced
appeal bond, the respondents have posted a bond in the amount of ₱10,000,000.00. In Rosewood,
the Court deemed the posting of a surety bond of ₱50,000.00, coupled with a motion to reduce the In finding merit in the respondents’ motion for reconsideration, we also take into account the
appeal bond, as substantial compliance with the legal requirements for an appeal from a unwarranted results that will arise from an implementation of the Court’s Decision dated September
₱789,154.39 monetary award "considering the clear merits which appear, res ipsa loquitor, in the 18, 2009. We emphasize, moreover, that although a remand and an order upon the NLRC to give
appeal from the LA’s Decision, and the petitioner’s substantial compliance with rules governing due course to the appeal would have been the usual course after a finding that the conditions for
114
appeals." The foregoing jurisprudence strongly indicate that in determining the reasonable the reduction of an appeal bond were duly satisfied by the respondents, given such results, the
amount of appeal bonds, the Court primarily considers the merits of the motions and appeals. Court finds it necessary to modify the CA’s order of remand, and instead rule on the dismissal of
the complaint against the respondents.
Given the circumstances in this case and the merits of the respondents’ arguments before the
NLRC, the Court holds that the respondents had posted a bond in a "reasonable amount", and had Without the reversal of the Court’s Decision and the dismissal of the complaint against the
thus complied with the requirements for the perfection of an appeal from the LA’s decision. The CA respondents, McBurnie would be allowed to claim benefits under our labor laws despite his failure
was correct in ruling that: to comply with a settled requirement for foreign nationals.

In the case of Nueva Ecija I Electric Cooperative, Inc. (NEECO I) Employees Association, Considering that McBurnie, an Australian, alleged illegal dismissal and sought to claim under our
President Rodolfo Jimenez, and members, Reynaldo Fajardo, et al. vs. NLRC, Nueva Ecija I labor laws, it was necessary for him to establish, first and foremost, that he was qualified and duly
Electric Cooperative, Inc. (NEECO I) and Patricio de la Peña (GR No. 116066, January 24, 2000), authorized to obtain employment within our jurisdiction. A requirement for foreigners who intend to
the Supreme Court recognized that: "the NLRC, in its Resolution No. 11-01-91 dated November 7, work within the country is an employment permit, as provided under Article 40, Title II of the Labor
1991 deleted the phrase "exclusive of moral and exemplary damages as well as attorney’s fees in Code which reads:
the determination of the amount of bond, and provided a safeguard against the imposition of
excessive bonds by providing that "(T)he Commission may in meritorious cases and upon motion
of the appellant, reduce the amount of the bond." Art. 40. Employment permit for non-resident aliens. Any alien seeking admission to the Philippines
for employment purposes and any domestic or foreign employer who desires to engage an alien for
employment in the Philippines shall obtain an employment permit from the Department of Labor.
In the case of Cosico, Jr. vs. NLRC, 272 SCRA 583, it was held:
117
In WPP Marketing Communications, Inc. v. Galera, we held that a foreign national’s failure to
"The unreasonable and excessive amount of bond would be oppressive and unjust and would have seek an employment permit prior to employment poses a serious problem in seeking relief from the
118
the effect of depriving a party of his right to appeal." Court. Thus, although the respondent therein appeared to have been illegally dismissed from
employment, we explained:
xxxx
This is Galera’s dilemma: Galera worked in the Philippines without proper work permit but now October. During the period of employment, the respondents must have paid his salaries in the sum
wants to claim employee’s benefits under Philippine labor laws. of US$26,000.00, more or less.

xxxx However, McBurnie failed to present a single evidence that [the respondents] paid his salaries like
payslip, check or cash vouchers duly signed by him or any document showing proof of receipt of
his compensation from the respondents or activity in furtherance of the employment contract.
The law and the rules are consistent in stating that the employment permit must be acquired prior
Granting again that there was a valid contract of employment, it is undisputed that on November 1,
to employment. The Labor Code states: "Any alien seeking admission to the Philippines for 121
1999, McBurnie left for Australia and never came back. x x x. (Emphasis supplied)
employment purposes and any domestic or foreign employer who desires to engage an alien for
employment in the Philippines shall obtain an employment permit from the Department of Labor."
Section 4, Rule XIV, Book I of the Implementing Rules and Regulations provides: Although the NLRC’s Decision dated November 17, 2009 was set aside in a Decision dated
January 14, 2010, the Court’s resolve to now reconsider its Decision dated September 18, 2009
and to affirm the CA’s Decision and Resolution in the respondents’ favor effectively restores the
"Employment permit required for entry. – No alien seeking employment, whether as a resident or
NLRC’s basis for rendering the Decision dated November 17, 2009.
non-resident, may enter the Philippines without first securing an employment permit from the
Ministry. If an alien enters the country under a non-working visa and wishes to be employed
thereafter, he may be allowed to be employed upon presentation of a duly approved employment More importantly, the NLRC’s findings on the contractual relations between McBurnie and the
permit." respondents are supported by the records.

Galera cannot come to this Court with unclean hands. To grant Galera’s prayer is to sanction the First, before a case for illegal dismissal can prosper, an employer-employee relationship must first
122
violation of the Philippine labor laws requiring aliens to secure work permits before their be established. Although an employment agreement forms part of the case records, respondent
123
employment. We hold that the status quo must prevail in the present case and we leave the parties Ganzon signed it with the notation "per my note." The respondents have sufficiently explained
124
where they are. This ruling, however, does not bar Galera from seeking relief from other that the note refers to the letter dated May 11, 1999 which embodied certain conditions for the
119
jurisdictions. (Citations omitted and underscoring ours) employment’s effectivity. As we have previously explained, however, the said conditions,
particularly on the successful completion of the project financing for the hotel project in Baguio City
and McBurnie’s acquisition of an Alien Employment Permit, failed to materialize. Such defense of
Clearly, this circumstance on the failure of McBurnie to obtain an employment permit, by itself,
the respondents, which was duly considered by the NLRC in its Decision dated November 17,
necessitates the dismissal of his labor complaint.
2009, was not sufficiently rebutted by McBurnie.

Furthermore, as has been previously discussed, the NLRC has ruled in its Decision dated
Second, McBurnie failed to present any employment permit which would have authorized him to
November 17, 2009 on the issue of illegal dismissal. It declared that McBurnie was never an
120 obtain employment in the Philippines. This circumstance negates McBurnie’s claim that he had
employee of any of the respondents. It explained:
been performing work for the respondents by virtue of an employer-employee relationship. The
absence of the employment permit instead bolsters the claim that the supposed employment of
All these facts and circumstances prove that McBurnie was never an employee of Eulalio Ganzon McBurnie was merely simulated, or did not ensue due to the non-fulfillment of the conditions that
or the respondent companies, but a potential investor in a project with a group including Eulalio were set forth in the letter of May 11, 1999.
Ganzon and Martinez but said project did not take off because of lack of funds.
Third, besides the employment agreement, McBurnie failed to present other competent evidence to
McBurnie further claims that in conformity with the provision of the employment contract pertaining prove his claim of an employer-employee relationship. Given the parties’ conflicting claims on their
to the obligation of the respondents to provide housing, respondents assigned him Condo Unit # true intention in executing the agreement, it was necessary to resort to the established criteria for
812 of the Makati Cinema Square Condominium owned by the respondents. He was also allowed the determination of an employer-employee relationship, namely: (1) the selection and
to use a Hyundai car. If it were true that the contract of employment was for working visa purposes engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the
125
only, why did the respondents perform their obligations to him? power to control the employee’s conduct. The rule of thumb remains: the onus probandi falls on
the claimant to establish or substantiate the claim by the requisite quantum of evidence. Whoever
claims entitlement to the benefits provided by law should establish his or her right
There is no question that respondents assigned him Condo Unit # 812 of the MCS, but this was not 126
thereto. McBurnie failed in this regard.1âwphi1 As previously observed by the NLRC, McBurnie
free of charge. If it were true that it is part of the compensation package as employee, then
even failed to show through any document such as payslips or vouchers that his salaries during the
McBurnie would not be obligated to pay anything, but clearly, he admitted in his letter that he had time that he allegedly worked for the respondents were paid by the company. In the absence of an
to pay all the expenses incurred in the apartment.
employer-employee relationship between McBurnie and the respondents, McBurnie could not
successfully claim that he was dismissed, much less illegally dismissed, by the latter. Even
Assuming for the sake of argument that the employment contract is valid between them, record granting that there was such an employer-employee relationship, the records are barren of any
shows that McBurnie worked from September 1, 1999 until he met an accident on the last week of document showing that its termination was by the respondents’ dismissal of McBurnie.
Given these circumstances, it would be a circuitous exercise for the Court to remand the case to Furthermore, on the matter of the filing and acceptance of motions to reduce appeal bond, as
the NLRC, more so in the absence of any showing that the NLRC should now rule differently on the provided in Section 6, Rule VI of the 2011 NLRC Rules of Procedure, the Court hereby
127
case’s merits. In Medline Management, Inc. v. Roslinda, the Court ruled that when there is RESOLVES that henceforth, the following guidelines shall be observed:
enough basis on which the Court may render a proper evaluation of the merits of the case, the
Court may dispense with the time-consuming procedure of remanding a case to a labor tribunal in
(a) The filing o a motion to reduce appeal bond shall be entertained by the NLRC subject
order "to prevent delays in the disposition of the case," "to serve the ends of justice" and when a
to the following conditions: (1) there is meritorious ground; and (2) a bond in a
remand "would serve no purpose save to further delay its disposition contrary to the spirit of fair
128 129 reasonable amount is posted;
play." In Real v. Sangu Philippines, Inc., we again ruled:

(b) For purposes o compliance with condition no. (2), a motion shall be accompanied by
With the foregoing, it is clear that the CA erred in affirming the decision of the NLRC which
the posting o a provisional cash or surety bond equivalent to ten percent (10,) of the
dismissed petitioner’s complaint for lack of jurisdiction. In cases such as this, the Court normally
monetary award subject o the appeal, exclusive o damages and attorney's fees;
remands the case to the NLRC and directs it to properly dispose of the case on the merits.
"However, when there is enough basis on which a proper evaluation of the merits of petitioner’s
case may be had, the Court may dispense with the time-consuming procedure of remand in order (c) Compliance with the foregoing conditions shall suffice to suspend the running o the 1
to prevent further delays in the disposition of the case." "It is already an accepted rule of procedure 0-day reglementary period to perfect an appeal from the labor arbiter's decision to the
for us to strive to settle the entire controversy in a single proceeding, leaving no root or branch to NLRC;
bear the seeds of litigation. If, based on the records, the pleadings, and other evidence, the dispute
can be resolved by us, we will do so to serve the ends of justice instead of remanding the case to
130 (d) The NLRC retains its authority and duty to resolve the motion to reduce bond and
the lower court for further proceedings." x x x. (Citations omitted)
determine the final amount o bond that shall be posted by the appellant, still in
accordance with the standards o meritorious grounds and reasonable amount; and
It bears mentioning that although the Court resolves to grant the respondents’ motion for
reconsideration, the other grounds raised in the motion, especially as they pertain to insinuations
(e) In the event that the NLRC denies the motion to reduce bond, or requires a bond that
on irregularities in the Court, deserve no merit for being founded on baseless conclusions.
Furthermore, the Court finds it unnecessary to discuss the other grounds that are raised in the exceeds the amount o the provisional bond, the appellant shall be given a fresh period o
ten 1 0) days from notice o the NLRC order within which to perfect the appeal by posting
motion, considering the grounds that already justify the dismissal of McBurnie’s complaint.
the required appeal bond.

All these considered, the Court also affirms its Resolution dated September 4, 2012; accordingly,
SO ORDERED.
McBurnie’s motion for reconsideration thereof is denied.

WHEREFORE, in light of the foregoing, the Court rules as follows:

(a) The motion for reconsideration filed on September 26, 2012 by petitioner Andrew
James McBurnie is DENIED;

(b) The motion for reconsideration filed on March 27, 2012 by respondents Eulalio
Ganzon, EGI-Managers, Inc. and E. Ganzon, Inc. is GRANTED.

(c) The Entry of Judgment issued in G.R. Nos. 186984-85 is LIFTED. This Court’s
Decision dated September 18, 2009 and Resolutions dated December 14, 2009 and
January 25, 2012 are SET ASIDE. The Court of Appeals Decision dated October 27,
2008 and Resolution dated March 3, 2009 in CA-G.R. SP No. 90845 and CA-G.R. SP
No. 95916 are AFFIRMED WITH MODIFICATION. In lieu of a remand of the case to the
National Labor Relations Commission, the complaint for illegal dismissal filed by
petitioner Andrew James McBurnie against respondents Eulalio Ganzon, EGI-Managers,
Inc. and E. Ganzon, Inc. is DISMISSED.
G.R. No. 196047 January 15, 2014 authority. Private respondent vehemently denied the charge. Consequently, he was dismissed from
his work.
LEPANTO CONSOLIDATED MINING CORPORATION, Petitioner,
vs. Private respondent claimed that his dismissal from work was without just or authorized cause since
BELIO ICAO, Respondent. petitioners failed to prove by ample and sufficient evidence that he stole gold bearing highgrade
ores from the company premises. If private respondent was really placing a wrapped object inside
his boots, he should have been sitting or bending down to insert the same, instead of just standing
DECISION
on a muckpile as alleged by petitioners. Moreover, it is beyond imagination that a person, knowing
fully well that he was being chased for allegedly placing wrapped ore inside his boots, will transfer
SERENO, CJ: it to his skullguard. The tendency in such situation is to throw the object away. As such, private
respondent prayed that 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
This Petition under Rule 45 of the Rules of Court seeks to annul and set aside the Court of Appeals
attorney’s fees.
(CA) Decision dated 27 September 2010 and the Resolution dated 11 March 2011 in CA-G.R. SP.
1
No. 113095. In the assailed Decision and Resolution, the CA upheld the Order of the National
Labor and Relations Commission (NLRC) First Division dismissing petitioner s appeal for allegedly For their defense, petitioners averred that SG Bulwayan saw private respondent standing on a
failing to post an appeal bond as required by the Labor Code. Petitioner had instead filed a motion muckpile and inserting a wrapped object inside his right rubber boot. SG Bulwayan immediately ran
to release the cash bond it posted in another NLRC case which had been decided with finality in its towards private respondent, but the latter ran away to escape. He tried to chase private respondent
favor with a view to applying the bond to the appealed case before the NLRC First Division. Hence, but failed to capture him. Thereafter, while SG Bulwayan was on his way to see his co-guard SG
the Court is now asked to rule whether petitioner had complied with the appeal bond requirement. Papsa-ao, he saw private respondent moving out of a stope. He then shouted at SG Papsa-ao to
If it had, its appeal before the NLRC First Division should be reinstated. intercept him. When private respondent was apprehended, SG Bulwayan ordered him to remove
his skullguard for inspection and saw a wrapped object placed inside the helmet. SG Bulwayan
grabbed it, but the harness of the skullguard was also detached causing the object to fall on the
The Facts
ground. Immediately, SG Bulwayan recovered and inspected the same which turned out to be
pieces of stone ores. Private respondent and the stone ores were later turned over to the
We quote the CA s narration of facts as follows: Mankayan Philippine National Police where he was given a written notice of the charge against
him. On January 9, 2008, a hearing was held where private respondent, together with the officers
of his union as well as the apprehending guards appeared. On February 4, 2008, private
The instant petition stemmed from a complaint for illegal dismissal and damages filed by private respondent received a copy of the resolution of the company informing him of his dismissal from
respondent Belio C. Icao [Icao] against petitioners Lepanto Consolidated Mining Company (LCMC) employment due to breach of trust and confidence and the act of highgrading.
2

and its Chief Executive Officer [CEO] Felipe U. Yap [Yap] before the Arbitration Branch of the
NLRC.
THE LABOR ARBITER’S RULING THAT
PETITIONER LCMC IS LIABLE FOR ILLEGAL DISMISSAL
Private respondent essentially alleged in his complaint that he was an employee of petitioner
LCMC assigned as a lead miner in its underground mine in Paco, Mankayan, Benguet. On January
4, 2008, private respondent reported for the 1st shift of work (11:00 p.m. to 7:00 a.m.) and was On 30 September 2008, the labor arbiter rendered a Decision holding petitioner and its CEO liable
assigned at 248-8M2, 750 Level of the mining area. At their workplace, private respondent did for illegal dismissal and ordering them to pay respondent Icao ₱345,879.45, representing his full
3
some barring down, installed five (5) rock bolt support, and drilled eight (8) blast holes for the mid- backwages and separation pay. The alleged highgrading attributed by LCMC’s security guards
shift blast. They then had their meal break. When they went back to their workplace, they again was found to have been fabricated; consequently, there was no just cause for the dismissal of
barred down loose rocks and drilled eight (8) more blast holes for the last round of blast. While respondent. The labor arbiter concluded that the claim of the security guards that Icao had inserted
waiting for the time to ignite their round, one of his co-workers shouted to prepare the explosives ores in his boots while in a standing position was not in accord with normal human physiological
4
for blasting, prompting private respondent to run to the adjacent panels and warn the other miners. functioning.
Thereafter, he decided to take a bath and proceeded at [sic] the bathing station where four (4) of
his co-workers were also present. Before he could join them, he heard a voice at his back and saw The labor arbiter also noted that it was inconsistent with normal human behavior for a man, who
Security Guard (SG) Larry Bulwayan instructing his companion SG Dale Papsa-ao to frisk him. As
knew that he was being chased for allegedly placing wrapped ore inside his boots, to then transfer
private respondent was removing his boots, SG Bulwayan forcibly pulled his skullguard from his 5
the ore to his skullguard, where it could be found once he was apprehended. To further support
head causing it to fall down [sic] to the ground including its harness and his detergent soap which the improbability of the allegation of highgrading, the labor arbiter noted that throughout the 21
was inserted in the skullguard harness. A few minutes later, private respondent saw SG Bulwayan
years of service of Icao to LCMC, he had never been accused of or penalized for highgrading or
[pick] up a wrapped object at the bathing station and gave it to his companion. SGs Bulwayan and 6
any other infraction involving moral turpitude – until this alleged incident.
Papsa-ao 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 the act of
concealing, possessing or unauthorized extraction of highgrade material/ore without proper
14
THE NLRC ORDER DISMISSING THE APPEAL and used by them. Their motion was denied in a Resolution dated 27 November 2009. Hence,
OF PETITIONER LCMC FOR FAILURE TO POST THE APPEAL BOND they filed a Petition for Certiorari with the CA.

On 8 December 2008, petitioner and its CEO filed an Appearance with Memorandum of THE CA RULING AFFIRMING THE ORDER OF THE NLRC
7
Appeal before the NLRC. Instead of posting the required appeal bond in the form of a cash bond
or a surety bond in an amount equivalent to the monetary award of ₱345,879.45 adjudged in favor 15
On 27 September 2010, the CA issued its assailed Decision affirming the Order of the NLRC First
of Icao, they filed a Consolidated Motion For Release Of Cash Bond And To Apply Bond Subject
8 Division, which had dismissed the appeal of petitioner and the latter’s CEO. According to the CA,
For Release As Payment For Appeal Bond (Consolidated Motion). They requested therein that the 16
they failed to comply with the requirements of law and consequently lost the right to appeal.
NLRC release the cash bond of ₱401,610.84, which they had posted in the separate case Dangiw
9
Siggaao v. LCMC, and apply that same cash bond to their present appeal bond liability. They
reasoned that since this Court had already decided Dangiw Siggaao in their favor, and that the The CA explained that under Article 223 of the Labor Code, an appeal from the labor arbiter’s
ruling therein had become final and executory, the cash bond posted therein could now be Decision must be filed within 10 calendar days from receipt of the decision. In case of a judgment
10
released. They also cited financial difficulty as a reason for resorting to this course of action and involving a monetary award, the posting of a cash or surety bond in an amount equivalent to the
prayed that, in the interest of justice, the motion be granted. 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 to
₱345,879.45. Instead, it filed a Consolidated Motion praying that the cash bond it had previously
In its Order dated 27 February 2009, the NLRC First Division dismissed the appeal of petitioner
11 posted in another labor case be released and applied to the present one. According to the CA, this
and the latter’s CEO for non-perfection. It found that they had failed to post the required appeal 17
arrangement is not allowed under the rules of procedure of the NLRC.
bond equivalent to the monetary award of ₱345,879.45. It explained that their Consolidated Motion
for the release of the cash bond in another case (Dangiw Siggaao), for the purpose of applying the
same bond to the appealed case before it, could not be considered as compliance with the Furthermore, the CA said that since the payment of appeal fees and the posting of an appeal bond
requirement to post the required appeal bond. Consequently, it declared the labor arbiter’s are indispensable jurisdictional requirements, noncompliance with them resulted in petitioner’s
Decision to be final and executory. The pertinent portions of the assailed Order are quoted below: failure to perfect its appeal. Consequently, the labor arbiter’s Decision became final and executory
18
and, hence, binding upon the appellate court.
The rules are clear. Appeals from decision involving a monetary award maybe [sic] perfected only
upon posting of a cash or surety-bond within the ten (10) day reglementary period for filing an Nevertheless, the CA ruled that the CEO of petitioner LCMC should be dropped as a party to this
19
appeal. Failure to file and post the required appeal bond within the said period results in the appeal case. No specific act was alleged in private respondent’s pleadings to show that he had a hand in
not being perfected and the appealed judgment becomes final and executory. Thus, the Icao’s illegal dismissal; much less, that he acted in bad faith. In fact, the labor arbiter did not cite
Commission loses authority to entertain or act on the appeal much less reverse the decision of the any factual or legal basis in its Decision that would render the CEO liable to respondent. The rule is
Labor Arbiter (Gaudia vs. NLRC, 318 SCRA 439). that in the absence of bad faith, an officer of a corporation cannot be made personally liable for
corporate liabilities.
In this case, respondents failed to post the required appeal bond equivalent to the monetary award
of ₱345,879.45. The Consolidated Motion for Release of Cash Bond (posted as appeal bond in THE ISSUE
another case) with prayer to apply the bond to be released as appeal bond may not be considered
as compliance with the jurisdictional requirement, as the application or posting is subject to the
The sole issue before the Court is whether or not petitioner complied with the appeal bond
condition that the cash bond would be released. Besides, even if the motion for release is
approved, the ten (10) day period has long expired, rendering the statutory right to appeal forever requirement under the Labor Code and the NLRC Rules by filing a Consolidated Motion to release
the cash bond it posted in another case, which had been decided with finality in its favor, with a
lost.
view to applying the same cash bond to the present case.

WHEREFORE, respondents’ appeal is hereby DISMISSED for non-perfection and the questioned
OUR RULING
decision is declared as having become final and executory. Let the Motion for Release of Cash
bond be forwarded to the Third Division, this Commission, for appropriate action.
The Petition is meritorious. The Court finds that petitioner substantially complied with the appeal
12 bond requirement.
SO ORDERED. (Emphasis supplied)

Petitioner and its CEO filed a Motion for Reconsideration. They emphasized therein that they had Before discussing its ruling, however, the Court finds it necessary to emphasize the well-
entrenched doctrine that an appeal is not a matter of right, but is a mere statutory privilege. It may
tried to comply in good faith with the requisite appeal bond by trying to produce a cash bond anew
be availed of only in the manner provided by law and the rules. Thus, a party who seeks to
and also to procure a new surety bond. However, after canvassing several bonding companies, the
13
costs have proved to be prohibitive. Hence, they resorted to using the cash bond they posted in exercise the right to appeal must comply with the requirements of the rules; otherwise, the privilege
20
is lost.
Dangiw Siggaao because the bond was now free, unencumbered and could rightfully be withdrawn
In appeals from any decision or order of the labor arbiter, the posting of an appeal bond is required Second, it is also undisputed that petitioner has an unencumbered amount of money in the form of
under Article 223 of the Labor Code, which reads: 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
Article 223. APPEAL. — Decisions, awards, or orders of the Labor Arbiter are final and executory
of the Court in Dangiw Siggaao had become final and executory as of 28 April 2008, or more than
unless appealed to the Commission by any or both parties within ten (10) calendar days from
seven months before petitioner had to file its appeal in the present case. This fact is shown by the
receipt of such decisions, awards, or orders. Such appeal may be entertained only on any of the
Entry of Judgment on file with the aforementioned office. Hence, the cash bond in that case ought
following grounds:
to have been released to petitioner then.

xxxx
Under the Rule VI, Section 6 of the 2005 NLRC Rules, "[a] cash or surety bond shall be valid and
effective from the date of deposit or posting, until the case is finally decided, resolved or
In case of a judgment involving a monetary award, an appeal by the employer may be perfected terminated, or the award satisfied." Hence, it is clear that a bond is encumbered and bound to a
only upon the posting of a cash or surety bond issued by a reputable bonding company duly case only for as long as 1) the case has not been finally decided, resolved or terminated; or 2) the
accredited by the Commission in the amount equivalent to the monetary award in the judgment award has not been satisfied. Therefore, once the appeal is finally decided and no award needs to
appealed from. (Emphasis and underlining supplied) be satisfied, the bond is automatically released. Since the money is now unencumbered, the
employer who posted it should now have unrestricted access to the cash which he may now use as
he pleases – as appeal bond in another case, for instance. This is what petitioner simply did. Third,
The 2011 NLRC Rules of Procedure (NLRC Rules) incorporates this requirement in Rule VI, the cash bond in the amount of ₱401,610.84 posted in Dangiw Siggaao is more than enough to
Section 6, which provides:
cover the appeal bond in the amount of ₱345,879.45 required in the present case.

SECTION 6. Bond. — In case the decision of the Labor Arbiter or the Regional Director involves a Fourth, this ruling remains faithful to the spirit behind the appeal bond requirement which is to
monetary award, an appeal by the employer may be perfected only upon the posting of a bond,
ensure that workers will receive the money awarded in their favor when the employer’s appeal
which shall either be in the form of cash deposit or surety bond equivalent in amount to the 24
eventually fails. There was no showing at all of any attempt on the part of petitioner to evade the
monetary award, exclusive of damages and attorney’s fees. (Emphases and underlining supplied) posting of the appeal bond. On the contrary, petitioner’s move showed a willingness to comply with
the requirement. Hence, the welfare of Icao is adequately protected.
21
In Viron Garments Manufacturing Co., Inc. v. NLRC, the Court explained the mandatory nature of
this requirement as follows: Moreover, this Court has liberally applied the NLRC Rules and the Labor Code provisions on the
25
posting of an appeal bond in exceptional cases. In Your Bus Lines v. NLRC, the Court excused
The intention of the lawmakers to make the bond an indispensable requisite for the perfection of an the appellant’s failure to post a bond, because it relied on the notice of the decision. While the
appeal by the employer, is clearly limned in the provision that an appeal by the employer may be notice enumerated all the other requirements for perfecting an appeal, it did not include a bond in
26
perfected "only upon the posting of a cash or surety bond." The word "only" makes it perfectly the list. In Blancaflor v. NLRC, the failure of the appellant therein to post a bond was partly
clear, that the lawmakers intended the posting of a cash or surety bond by the employer to be the caused by the labor arbiter’s failure to state the exact amount of monetary award due, which would
exclusive means by which an employer's appeal may be perfected. (Emphases supplied) have been the basis of the amount of the bond to be posted. In Cabalan Pastulan Negrito Labor
27
Association v. NLRC petitioner-appellant was an association of Negritos performing trash-sorting
services in the American naval base in Subic Bay. The plea of the association that its appeal be
We now turn to the main question of whether petitioner’s Consolidated Motion to release the cash given due course despite its non-posting of a bond, on account of
bond it posted in a previous case, for application to the present case, constitutes compliance with
the appeal bond requirement. While it is true that the procedure undertaken by petitioner is not
provided under the Labor Code or in the NLRC Rules, we answer the question in the affirmative. its insolvency and poverty, was granted by this Court. In UERM-Memorial Medical Center v.
22 28
We reiterate our pronouncement in Araneta v. Rodas, where the Court said that when the law NLRC we allowed the appellant-employer to post a property bond in lieu of a cash or surety bond.
does not clearly provide a rule or norm for the tribunal to follow in deciding a question submitted, The assailed judgment involved more than ₱17 million; thus, its execution could adversely affect
but leaves to the tribunal the discretion to determine the case in one way or another, the judge the economic survival of the employer, which was a medical center.
must decide the question in conformity with justice, reason and equity, in view of the circumstances
of the case. Applying this doctrine, we rule that petitioner substantially complied with the mandatory
If n the above-cited cases, the Court found exceptional circumstances that warranted an
requirement of posting an appeal bond for the reasons explained below.
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.
23
First, there is no question that the appeal was filed within the 10-day reglementary period. Except We emphasize that in this case we are not even exempting petitioner from the rule, as in fact we
for the alleged failure to post an appeal bond, the appeal to the NLRC was therefore in order. are enforcing compliance with the posting of an appeal bond. We are simply liberally applying the
rules on what constitutes compliance with the requirement, given the special circumstances
surrounding the case as explained above.
Having complied with the appeal bond requirement, petitioner s appeal before the NLRC must
therefore be reinstated.1âwphi1

Finally, a word of caution. Lest litigants be misled into thinking that they may now wantonly
disregard the rules on appeal bond in labor cases, we reiterate the mandatory nature of the
requirement. The Court will liberally apply the rules only in very highly exceptional cases such as
this, in keeping with the dictates of justice, reason and equity.

WHEREFORE, premises considered, the instant Rule 45 Petition is GRANTED. The Court of
Appeals Decision dated 27 September 2010 and its Resolution dated March 2011 in CA-G.R. SP.
No. 113095, which dismisse4 petitioner s Rule 65 Petition, are hereby REVERSED. Finally, the
National Labor Relations Commission Resolutions dated 27 February 2009 and 27 November
2009 are SET ASIDE and the appeal of petitioner before it is hereby REINSTATED.

SO ORDERED.
G.R. No. 87530 June 13, 1990 and a similar motion was filed by Samahang Kabuhayan ng Barangay Luz Banzon (SKLB for
brevity) to which an opposition was filed by petitioner.
GERONIMO SADOL, petitioner,
vs. On September 30, 1988, a resolution was promulgated by the same division of the NLRC, setting
PILIPINAS KAO, INC., REQUITO VEGA, BELEN GOMEZ, ARTURO GOMEZ & NLRC SECOND aside its decision and dismissing the case for lack of merit. A motion for reconsideration thereof
DIVISION, respondents. filed by petitioner who besides questioning its findings of facts raised the issue that said
respondent's appeal having been filed out of time its motion for reconsideration of the decision
should not have been entertained as it raised issues for the first on appeal which were not raised
Oliver A. Luproso for petitioner.
before the labor arbiter. This motion was denied on November 27, 1988.

Cayetano W. Paderanga for private respondent.


Hence, the herein petition for certiorari wherein petitioner recites the following assignment of
errors:

I
GANCAYCO, J.:
THE HONORABLE COMMISSION, SECOND DIVISION, SERIOUSLY
The issue posed in this case is whether or not a party who failed to appeal from a decision of the ERRED IN FINDING THAT RESPONDENTS REQUITO VEGA, ARTURO
labor arbiter to the National Labor Relations Commission (NLRC) within the ten (10) day GOMEZ AND BELEN GOMEZ IS A LAWFUL INDEPENDENT LABOR
reglementary period can still participate in a separate appeal timely interposed by the adverse CONTRACTOR;
party by filing a motion for reconsideration of a decision of the NLRC on such appeal.
II
Petitioner was recruited as a laborer by private respondents Requito Vega, Antonio Gomez and
Belen Gomez, who are the owners of Vega & Co., a private recruitment agency, with assignment at
THE HONORABLE COMMISSION, SECOND DIVISION, SERIOUSLY
respondent Pilipinas Kao, Inc. (PKI for brevity), particularly at the Pit Burning area. Sometime on
ERRED IN FINDING IN ITS RESOLUTION THAT COMPLAINANT-
April 16, 1984, he was allegedly summarily dismissed. Hence, on July 24, 1986, he filed a
APPELLANT VOLUNTARILY ABANDONED HIS JOB;
complaint for reinstatement and backwages with Region X of the Department of Labor and
Employment in Cagayan de Oro City.
III
On November 13, 1986, the labor arbiter ordered all parties to submit their position papers. Only
petitioner complied. On December 17, 1986, petitioner filed an urgent motion that the failure of THE HONORABLE COMMISSION, SECOND DIVISION, SERIOUSLY
respondent to file their position papers is a waiver and so judgment should be rendered in favor of ERRED AND/OR COMMITTED GRAVE ABUSE OF DISCRETION IN GIVING
petitioner. Similar motions were filed by petitioner on January 23, 1987 and May 15, 1987. DUE COURSE AND/OR ENTERTAINING THE MOTION FOR
RECONSIDERATION FILED BY RESPONDENT-APPELLANTS AND
REVERSING ITS OWN DECISION/RESOLUTION DATED AUGUST 26,
On June 26, 1987, the labor arbiter rendered a decision ordering private respondents to jointly and
1988;
solidarity pay petitioner his separation pay computed at one month for every year of service within
the reglementary period. Petitioner appealed to the NLRC. Said respondents also appealed but it
was filed out of time. IV

On August 26, 1988, the Second Division of the NLRC promulgated a decision modifying the THE HONORABLE COMMISSION, SECOND DIVISION, SERIOUSLY
appealed decision in that respondent PKI was ordered to reinstate petitioner to his former position ERRED IN FAILING TO GIVE DUE CONSIDERATION OF COMPLAINANT-
without loss of seniority rights and other accrued benefits and with full backwages from the time of APPELLANT'S OPPOSITION TO MOTION FOR RECONSIDERATION
1
dismissal up to his actual reinstatement, and in case reinstatement is impossible, payment of full DATED SEPTEMBER 27, 1988.
backwages and separation pay of one (1) month salary for every year of service. The appeal of
respondent Pig was dismissed for having been filed out of time.
The third and fourth assignment of errors shall first be resolved.

The PKI allegedly received a copy of the decision of the NLRC only on September 13, 1988. A
There is no question that private respondents failed to file a timely appeal from the derision of the
motion for reconsideration of said decision dated September 22, 1988 was filed by said respondent
labor arbiter while the petitioner was able to interpose his appeal within the reglementary period. It
is also an accepted postulate that issues not raised in the lower court or the labor arbiter may not employer in all matters connected with the performance of
be raised for the first time on appeal. the service, except as to the result of the work.

Note is taken of the fact that even the Solicitor General refused to represent the NLRC in this To further buttress respondent SKLB's claim of being an independent labor
proceeding as it shares the view of petitioner that the decision of the labor arbiter having become contractor and employer of complainant, it submitted a copy of a Memorandum
final by the failure to respondent PKI to appeal on time the NLRC may no longer amend, modify, dated April 21, 1984 sent to complainant requiring the latter to report to its
2
much less set aside the same. office immediately otherwise he would be deemed to have abandoned his
work.
This posture is correct insofar as respondent PKI is concerned. However, as petitioner had filed a
timely appeal the NLRC had jurisdiction to give due se to his appeal and render the decision of It does strike Us as odd that if indeed complainant was dismissed sometime in
August 28, 1988, a copy of which was furnished respondents. Having lost the right to appeal can April 1984 it took him almost three (3) years before filing the instant case for
respondent PKI file a motion for reconsideration of said decision? The Court resolves the question illegal dismissal . This circumstance adds a significant dimension to
in the affirmative. The rules of technicality must yield to the broader interest of justice. It is only by respondent's position that indeed complainant abandoned his job to look for
giving due course to the motion for reconsideration that was timely filed that the NLRC may be greener pastures and it was only when he failed to find such opportunity that
able, to equitably evaluate the conflicting versions of facts presented by the parties. he came back to demand that he be allowed to resume the employment which
he unceremoniously abandoned.
In the now questioned resolution of the NLRC dated September 30,1988, the following findings and
conclusions were made: All the foregoing undisputed taken together, preponderate in favor of
respondent SKLB's claim of being a lawful independent labor contractor which
employed complainant who unjustifiably abandoned his employment.
Respondent SKLB assails the finding of the Commission that it is engaged in
labor-only contracting. In support thereof, respondent submitted a Clearance
Certificate issued by the Department of Labor and Employment, Regional WHEREFORE, the derision sought to be reconsidered is hereby SET ASIDE
3
Office No. 10 situated in Cagayan de Oro City, certifying to its being cleared and a new one entered, dismissing the case for lack of merit.
for issuance of a permit as a labor contractor. It also submitted payrolls
showing that it indeed operated as such independent labor contractor in
The factual findings of the NLRC are conclusive on this Court because the same appear to be
accordance with Article 106 of the Labor Code.
supported by substantial evidence.

Attached to respondent SKLB's motion likewise is the joint affidavit of one


WHEREFORE, the petition is DISMISSED for lack of merit. No costs.
Mario T. Ecarnum and Benito U. Ecarnum who jointly stated that they were
neighbors and co- workers of the complainant in the pit burning area, in a work
contracted by aforesaid respondent with respondent Pilipinas Kao, Inc.; that SO ORDERED.
complainant abandoned his work starting April 19,1984 when he went to
Manila to apply for work abroad and it wall only about eight (8) months later
that he returned when he failed to secure an overseas employment; that
complainant's prolonged absence was without prior permission or leave of
absence.

Respondent SKLB further contends that it meets all requirements set by law
and jurisprudence pertaining to an independent labor contractor, citing the
case of Vda. de Eustaquio vs. Workmen's Compensation Commission, 97
SCRA 255, thus:

An independent contractor is one who, in rendering


services, exercise an independent employment or
occupation and represents the will of his employer only as
to the results of his work; and who is engaged to perform
a certain service to another according to his own manner
and methods, free from control and direction of his
FIRST DIVISION Petitioner filed with the NLRC a notice of appeal with a memorandum of appeal and paid the
docket fees therefor. However, instead of posting the required cash or surety bond, he filed a
motion to reduce the appeal bond. The NLRC, in a resolution dated April 28, 2000, denied the
G.R. No. 152494 September 22, 2004
motion to reduce bond and dismissed the appeal for failure to post cash or surety bond within the
7 8
reglementary period. Petitioner’s motion for reconsideration was likewise denied.
MARIANO ONG, doing business under the name and style MILESTONE METAL
MANUFACTURING, petitioner,
Petitioner filed a petition for certiorari with the Court of Appeals alleging that the NLRC acted with
vs.
grave abuse of discretion in dismissing the appeal for non-perfection of appeal although a motion
THE COURT OF APPEALS, CONRADO DABAC, BERNABE TAYACTAC, MANUEL
to reduce appeal bond was seasonably filed. However, the petition was dismissed and thereafter
ABEJUELLA, LOLITO ABELONG, RONNIE HERRERO, APOLLO PAMIAS, JAIME ONGUTAN, 9
the motion for reconsideration was likewise dismissed for lack of merit.
NOEL ATENDIDO, CARLOS TABBAL, JOEL ATENDIDO, BIENVENIDO EBBER, RENATO
ABEJUELLA, LEONILO ATENDIDO, JR., LODULADO FAA and JAIME LOZADA, respondents.
Hence, this petition for review on the following assignment of errors:
DECISION
I.
YNARES-SANTIAGO, J.:
PUBLIC RESPONDENT COURT OF APPEALS COMMITTED SERIOUS ERROR AND
1 GRAVE ABUSE OF DISCRETION IN AFFIRMING THE DECISION OF THE NLRC
This is a petition for review on certiorari assailing the decision of the Court of Appeals in CA-G.R.
DISMISSING THE APPEAL OF PETITIONERS (sic) FOR NON-PERFECTION WHEN A
SP No. 62129, dated October 10, 2001, which dismissed the petition for certiorari for lack of merit,
2 MOTION TO REDUCE APPEAL BOND WAS SEASONABLY FILED WHICH IS
as well as the resolution, dated March 7, 2002, denying the motion for reconsideration.
ALLOWED BY THE RULES OF PROCEDURE OF THE NLRC.

Petitioner is the sole proprietor of Milestone Metal Manufacturing (Milestone), which manufactures,
3 II.
among others, wearing apparels, belts, and umbrellas. Sometime in May 1998, the business
suffered very low sales and productivity because of the economic crisis in the country. Hence, it
adopted a rotation scheme by reducing the workdays of its employees to three days a week or less PUBLIC RESPONDENT COURT OF APPEALS COMMITTED SERIOUS ERROR AND
4
for an indefinite period. GRAVE ABUSE OF DISCRETION IN AFFIRMING THE DISMISSAL BY NLRC OF
PETITIONER’S APPEAL AND IN EFFECT UPHOLDING THE ERRONEOUS DECISION
OF THE LABOR ARBITER AWARDING SEPARATION PAY TO PRIVATE
On separate dates, the 15 respondents filed before the National Labor Relations Commission
RESPONDENTS DESPITE THE FINDING THAT THERE WAS NO ILLEGAL
(NLRC) complaints for illegal dismissal, underpayment of wages, non-payment of overtime pay,
DISMISSAL MADE BY MILESTONE.
holiday pay, service incentive leave pay, 13th month pay, damages, and attorney’s fees against
petitioner. These were consolidated and assigned to Labor Arbiter Manuel Manasala.
III.
Petitioner claimed that 9 of the 15 respondents were not employees of Milestone but of Protone
Industrial Corporation which, however, stopped its operation due to business losses. Further, he PUBLIC RESPONDENT COURT OF APPEALS COMMITTED SERIOUS ERROR IN
claims that respondents Manuel Abuela, Lolita Abelong, Ronnie Herrero, Carlos Tabbal, Conrado AFFIRMING THE NLRC’S DISMISSAL OF PETITIONER’S APPEAL AND IN EFFECT
Dabac, and Lodualdo Faa were not dismissed from employment; rather, they refused to work after UPHOLDING THE ERRONEOUS DECISION OF THE LABOR ARBITER THAT
the rotation scheme was adopted. Anent their monetary claims, petitioner presented documents PETITIONER MILESTONE HAS VIOLATED THE MINIMUM WAGE LAW AND THAT
showing that he paid respondents’ minimum wage, 13th month pay, holiday pay, and contributions PRIVATE RESPONDENTS WERE UNDERPAID.
5
to the SSS, Medicare, and Pag-Ibig Funds.
IV.
On November 25, 1999, the Labor Arbiter rendered a decision awarding to the respondents the
aggregate amount of P1,111,200.40 representing their wage differential, holiday pay, service
PUBLIC RESPONDENT COURT OF APPEALS COMMITTED SERIOUS ERROR IN
incentive leave pay and 13th month pay, plus 10% thereof as attorney’s fees. Further, petitioner
AFFIRMING THE NLRC’S DISMISSAL OF PETITIONER’S APPEAL AND IN EFFECT
was ordered to pay the respondents separation pay equivalent to ½ month salary for every year of
UPHOLDING THE ERRONEOUS DECISION OF THE LABOR ARBITER THAT
service due to the indefiniteness of the rotation scheme and strained relations caused by the filing
6 PETITIONER MILESTONE HAS NOT PAID PRIVATE RESPONDENTS THEIR
of the complaints.
SERVICE INCENTIVE LEAVE PAY, 13th MONTH PAY, AND HOLIDAY PAY.
V. prayed for; and a statement of the date when the appellant received the appealed
decision, order or award and proof of service on the other party of such appeal.
PUBLIC RESPONDENT COURT OF APPEALS COMMITTED SERIOUS ERROR IN
AFFIRMING THE NLRC’S DISMISSAL OF PETITIONER’S APPEAL AND IN EFFECT A mere notice of appeal without complying with the other requisite aforestated shall not
UPHOLDING THE ERRONEOUS DECISION OF THE LABOR ARBITER THAT THE stop the running of the period for perfecting an appeal.
EVIDENCE SUBMITTED BY PRIVATE RESPONDENTS IN SUPPORT OF THEIR
CLAIMS ARE NOT SELF-SERVING, IRRELEVANT AND IMMATERIAL TO THE FACTS
10 xxx xxx xxx
AND LAW IN ISSUE IN THIS CASE.

Section 6. Bond. – In case the decision of the Labor Arbiter, the Regional Director or his
The petition lacks merit.
duly authorized Hearing Officer involves a monetary award, an appeal by the employer
shall be perfected only upon the posting of a cash or surety bond, which shall be in
Time and again it has been held that the right to appeal is not a natural right or a part of due effect until final disposition of the case, issued by a reputable bonding company duly
process, it is merely a statutory privilege, and may be exercised only in the manner and in accredited by the Commission or the Supreme Court in an amount equivalent to the
accordance with the provisions of law. The party who seeks to avail of the same must comply with monetary award, exclusive of damages and attorney’s fees.
11
the requirements of the rules. Failing to do so, the right to appeal is lost.
The employer, his counsel, as well as the bonding company, shall submit a joint declaration under
Article 223 of the Labor Code, as amended, sets forth the rules on appeal from the Labor Arbiter’s oath attesting that the surety bond posted is genuine.
monetary award:
The Commission may, in justifiable cases and upon Motion of the Appellant, reduce the
ART. 223. Appeal. – Decisions, awards, or orders of the Labor Arbiter are final and amount of the bond. The filing of the motion to reduce bond shall not stop the running of
executory unless appealed to the Commission by any or both parties within ten (10) the period to perfect appeal. (Emphasis ours)
calendar days from receipt of such decisions, awards, or orders. x x x.
In the case at bar, petitioner received the decision of the Labor Arbiter on January 6, 2000. He filed
xxx xxx xxx his notice of appeal with memorandum of appeal and paid the corresponding appeal fees on
January 17, 2000, the last day of filing the appeal. However, in lieu of the required cash or surety
bond, he filed a motion to reduce bond alleging that the amount of P1,427,802,04 as bond is
In case of a judgment involving a monetary award, an appeal by the employer may be
"unjustified and prohibitive" and prayed that the same be reduced to a "reasonable level." The
perfected only upon the posting of a cash or surety bond issued by a reputable
NLRC denied the motion and consequently dismissed the appeal for non-perfection. Petitioner now
bonding company duly accredited by the Commission in the amount equivalent to the
contends that he was deprived of the chance to post bond because the NLRC took 102 days to
monetary award in the judgment appealed from. (Emphasis ours)
decide his motion.
12
The pertinent provisions of Rule VI of the New Rules of Procedure of the NLRC, which were in
Petitioner’s argument is unavailing.
effect when petitioner filed his appeal, provide:

While, Section 6, Rule VI of the NLRC’s New Rules of Procedure allows the Commission to reduce
Section 1. Periods of Appeal. – Decisions, awards or orders of the Labor Arbiter and the
the amount of the bond, the exercise of the authority is not a matter of right on the part of the
POEA Administrator shall be final and executory unless appealed to the Commission by
movant but lies within the sound discretion of the NLRC upon showing of meritorious
any or both parties within ten (10) calendar days from receipt of such decisions, awards 13
grounds. Petitioner’s motion reads:
or orders of the Labor Arbiter x x x.

1. The appeal bond which respondents-appellants will post in this case is P1,427,802.04.
xxx xxx xxx
They are precisely questioning this amount as being unjustified and prohibitive under the
premises.
Section 3. Requisites for Perfection of Appeal. – (a) The appeal shall be filed within the
reglementary period as provided in Section 1 of this Rule; shall be under oath with proof
2. The amount of this appeal bond must be reduced to a reasonable level by this
of payment of the required appeal fee and the posting of a cash or surety bond as
Honorable Office.
provided in Section 5 of this Rule; shall be accompanied by a memorandum of appeal
which shall state the grounds relied upon and the arguments in support thereof; the relief
WHEREFORE, in view thereof, it is respectfully prayed of this Honorable Office that the While the bond requirement on appeals involving monetary awards has been relaxed in certain
14
appeal bond of P1,427,802.04 be reduced. cases, this can only be done where there was substantial compliance of the Rules or where the
22
appellants, at the very least, exhibited willingness to pay by posting a partial bond. Petitioner’s
23
reliance on the case of Rosewood Processing, Inc. v. NLRC is misplaced. Petitioner in the said
After careful scrutiny of the motion to reduce appeal bond, we agree with the Court of Appeals that
case substantially complied with the rules by posting a partial surety bond of fifty thousand pesos
the NLRC did not act with grave abuse of discretion when it denied petitioner’s motion for the same
issued by Prudential Guarantee and Assurance, Inc. while his motion to reduce appeal bond was
failed to either elucidate why the amount of the bond was "unjustified and prohibitive" or to indicate
15 pending before the NLRC.
what would be a "reasonable level."

16 In the case at bar, petitioner did not post a full or partial appeal bond within the prescribed period,
In Calabash Garments, Inc. v. NLRC, it was held that "a substantial monetary award, even if it
thus, no appeal was perfected from the decision of the Labor Arbiter. For this reason, the decision
runs into millions, does not necessarily give the employer-appellant a "meritorious case" and does
sought to be appealed to the NLRC had become final and executory and therefore immutable.
not automatically warrant a reduction of the appeal bond."
Clearly, then, the NLRC has no authority to entertain the appeal, much less to reverse the decision
of the Labor Arbiter. Any amendment or alteration made which substantially affects the final and
Even granting arguendo that petitioner has meritorious grounds to reduce the appeal bond, the executory judgment is null and void for lack of jurisdiction, including the entire proceeding held for
24
result would have been the same since he failed to post cash or surety bond within the prescribed that purpose.
period.
WHEREFORE, in view of the foregoing, the petition is DENIED. The assailed decision of the Court
The above-cited provisions explicitly provide that an appeal from the Labor Arbiter to the NLRC of Appeals in CA-G.R. SP No. 62129, dated October 10, 2001, dismissing the petition for certiorari
must be perfected within ten calendar days from receipt of such decisions, awards or orders of the for lack of merit, is AFFIRMED.
Labor Arbiter. In a judgment involving a monetary award, the appeal shall be perfected only upon
(1) proof of payment of the required appeal fee; (2) posting of a cash or surety bond issued by a
No pronouncement as to costs.
reputable bonding company; and (3) filing of a memorandum of appeal. A mere notice of appeal
without complying with the other requisites mentioned shall not stop the running of the period for
17
perfection of appeal. The posting of cash or surety bond is not only mandatory but jurisdictional SO ORDERED.
as well, and non-compliance therewith is fatal and has the effect of rendering the judgment final
18
and executory. This requirement is intended to discourage employers from using the appeal to
19
delay, or even evade, their obligation to satisfy their employee’s just and lawful claims.

The intention of the lawmakers to make the bond an indispensable requisite for the perfection of an
appeal by the employer is underscored by 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
20
exclusive means by which an employer’s appeal may be perfected.

The fact that the NLRC took 102 days to resolve the motion will not help petitioner’s case. The
NLRC Rules clearly provide that "the filing of the motion to reduce bond shall not stop the running
of the period to perfect appeal."Petitioner should have seasonably filed the appeal bond within the
ten-day reglementary period following the receipt of the order, resolution or decision of the NLRC
to forestall the finality of such order, resolution or decision. In the alternative, he should have paid
only a moderate and reasonable sum for the premium, as was held in Biogenerics Marketing and
21
Research Corporation v. NLRC, to wit:

x x x The mandatory filing of a bond for the perfection of an appeal is evident from the
aforequoted provision that the appeal may be perfected only upon the posting of cash or
surety bond. It is not an excuse that the over P2 million award is too much for a small
business enterprise, like the petitioner company, to shoulder. The law does not require
its outright payment, but only the posting of a bond to ensure that the award will
be eventually paid should the appeal fail. What petitioners have to pay is a
moderate and reasonable sum for the premium for such bond. (Emphasis ours)
[G.R. No. 126322. January 16, 2002] 4. It appealed to the NLRC the order of the Labor Arbiter dated August 13, 1995 which dismissed
the appeal for lack of merit on December 8, 1995.

5. It filed an original petition for mandatory injunction with the NLRC on November 16, 1995. This
YUPANGCO COTTON MILLS, INC., petitioner, vs. COURT OF APPEALS, HON. URBANO C. was docketed as Case No. NLRC-NCR-IC. 0000602-95. This case is still pending with that
VICTORIO, SR., Presiding Judge, RTC Branch 50, Manila, RODRIGO SY MENDOZA, Commission.
SAMAHANG MANGGAGAWA NG ARTEX (SAMAR-ANGLO) represented by its
Local President RUSTICO CORTEZ, and WESTERN GUARANTY 6. It filed a complaint in the Regional Trial Court in Manila which was docketed as Civil Case No.
CORPORATION, respondents. 95-76395. The dismissal of this case by public respondent triggered the filing of the instant petition.

DECISION In all of the foregoing actions, petitioner raised a common issue, which is that it is the owner of the
properties located in the compound and buildings of Artex Development Corporation, which were
PARDO, J.: erroneously levied upon by the sheriff of the NLRC as a consequence of the decision rendered by
[2]
the said Commission in a labor case docketed as NLRC-NCR Case No. 00-05-02960-90.

[3]
The Case On March 29, 1996, the Court of Appeals promulgated a decision dismissing the petition on
the ground of forum shopping and that petitioners remedy was to seek relief from this Court.

On April 18, 1996, petitioner filed with the Court of Appeals a motion for reconsideration of
[4]
The case is a petition for review on certiorari of the decision of the Court of the decision. Petitioner argued that the filing of a complaint for accion reinvindicatoria with the
[1]
Appeals dismissing the petition ruling that petitioner was guilty of forum shopping and that the Regional Trial Court was proper because it is a remedy specifically granted to an owner (whose
proper remedy was appeal in due course, not certiorari or mandamus. properties were subjected to a writ of execution to enforce a decision rendered in a labor dispute in
which it was not a party) by Section 17 (now 16), Rule 39, Revised Rules of Court and by the
In its decision, the Court of Appeals sustained the trial courts ruling that the remedies [5] [6]
doctrines laid down in Sy v. Discaya, Santos v. Bayhon and Manliguez v. Court of Appeals.
[7]

granted under Section 17, Rule 39 of the Rules of Court are not available to the petitioner because
the Manual of Instructions for Sheriffs of the NLRC does not include the remedy of an independent In addition, petitioner argued that the reliefs sought and the issues involved in the complaint
action by the owner to establish his right to his property. for recovery of property and damages filed with the Regional Trial Court of Manila, presided over
by respondent judge, were entirely distinct and separate from the reliefs sought and the issues
involved in the proceedings before the Labor Arbiter and the NLRC. Besides, petitioner pointed out
that neither the NLRC nor the Labor Arbiter is empowered to adjudicate matters involving
The Facts ownership of properties.
[8]
On August 27, 1996, the Court of Appeals denied petitioners motion for reconsideration.
The facts, as found by the Court of Appeals, are as follows: Hence, this appeal.
[9]

From the records before us and by petitioners own allegations and admission, it has taken the
following actions in connection with its claim that a sheriff of the National Labor Relations
Commission erroneously and unlawfully levied upon certain properties which it claims as its own. The Issues

1. It filed a notice of third-party claim with the Labor Arbiter on May 4, 1995.
The issues raised are (1) whether the Court of Appeals erred in ruling that petitioner was
guilty of forum shopping, and (2) whether the Court of Appeals erred in dismissing the
2. It filed an Affidavit of Adverse Claim with the National Labor Relations Commission (NLRC) on petitioners accion reinvindicatoria on the ground of lack of jurisdiction of the trial court.
July 4, 1995, which was dismissed on August 30, 1995, by the Labor Arbiter.

3. It filed a petition for certiorari and prohibition with the Regional Trial Court of Manila, Branch 49,
docketed as Civil Case No. 95-75628 on October 6, 1995. The Regional Trial Court dismissed the The Courts Ruling
case on October 11, 1995 for lack of merit.
On the first issue raised, we rule that there was no forum shopping. b) If the third party claim is denied, the third party may appeal the denial to the
[13]
[10]
NLRC.
In Golangco v. Court of Appeals, we held:
Even if a third party claim was denied, a third party may still file a proper action with a
competent court to recover ownership of the property illegally seized by the sheriff. This finds
What is truly important to consider in determining whether forum shopping exists or not is the
support in Section 17 (now 16), Rule 39, Revised Rules of Court, to wit:
vexation caused the courts and parties-litigant by a party who asks different courts and/or
administrative agencies to rule on the same or related causes and/or grant the same or
substantially the same reliefs, in the process creating possibility of conflicting decisions being SEC. 17 (now 16). Proceedings where property claimed by third person. -If property claimed by
rendered by the different for a upon the same issues. any other person than the judgment debtor or his agent, and such person makes an affidavit of his
title thereto or right to the possession thereof, stating the grounds of such right or title, and serve
the same upon the officer making the levy, and a copy thereof upon the judgment creditor, the
xxx xxx xxx
officer shall not be bound to keep the property, unless such judgment creditor or his agent, on
demand of the officer, indemnify the officer against such claim by a bond in a sum not greater than
There is no forum-shopping where two different orders were questioned, two distinct causes of the value of the property levied on. In case of disagreement as to such value, the same shall be
action and issues were raised, and two objectives were sought. (Underscoring ours) determined by the court issuing the writ of execution.

In the case at bar, there was no identity of parties, rights and causes of action and reliefs The officer is not liable for damages, for the taking or keeping of the property, to any third-party
sought. claimant unless a claim is made by the latter and unless an action for damages is brought by him
against the officer within one hundred twenty (120) days from the date of the filing of the bond. But
The case before the NLRC where Labor Arbiter Reyes issued a writ of execution on the nothing herein contained shall prevent such claimant or any third person from vindicating his claim
property of petitioner was a labor dispute between Artex and Samar-Anglo. Petitioner was not a to the property by any proper action.
party to the case. The only issue petitioner raised before the NLRC was whether or not the writ of
execution issued by the labor arbiter could be satisfied against the property of petitioner, not a
party to the labor case. When the party in whose favor the writ of execution runs, is the Republic of the Philippines, or any
officer duly representing it, the filing of such bond shall not be required, and in case the sheriff or
On the other hand, the accion reinvindicatoria filed by petitioner in the trial court was to levying officer is sued for damages as a result of the levy, he shall be represented by the Solicitor
recover the property illegally levied upon and sold at auction. Hence, the causes of action in these General and if held liable therefor, the actual damages adjudged by the court shall be paid by the
cases were different. National Treasurer out of such funds as may be appropriated for the purpose. (Underscoring ours)

The rule is that for forum-shopping to exist both actions must involve the same transactions, [14]
the same circumstances. The actions must also raise identical causes of action, subject matter and In Sy v. Discaya, we ruled that:
[11]
issues.
[12] The right of a third-party claimant to file an independent action to vindicate his claim of ownership
In Chemphil Export & Import Corporation v. Court of Appeals, we ruled that: over the properties seized is reserved by Section 17 (now 16), Rule 39 of the Rules of Court, x x x:

Forum-shopping or the act of a party against whom an adverse judgment has been rendered in xxxxxxxxx
one forum, of seeking another (and possible) opinion in another forum (other than by appeal or the
special civil action of certiorari), or the institution of two (2) or more actions or proceedings
grounded on the same cause on the supposition that one or the other would make a favorable As held in the case of Ong v. Tating, et. al., construing the aforecited rule, a third person whose
disposition. property was seized by a sheriff to answer for the obligation of a judgment debtor may invoke the
supervisory power of the court which authorized such execution. Upon due application by the third
person and after summary hearing, the court may command that the property be released from the
On the second issue, a third party whose property has been levied upon by a sheriff to mistaken levy and restored to the rightful owner or possessor. What said court do in these
enforce a decision against a judgment debtor is afforded with several alternative remedies to instances, however, is limited to a determination of whether the sheriff has acted rightly or wrongly
protect its interests. The third party may avail himself of alternative remedies cumulatively, and one in the performance of his duties in the execution of judgment, more specifically, if he has
will not preclude the third party from availing himself of the other alternative remedies in the event indeed taken hold of property not belonging to the judgmentdebtor. The court does not and
he failed in the remedy first availed of. cannot pass upon the question of title to the property, with any character of finality. It can treat of
Thus, a third party may avail himself of the following alternative remedies: the matter only insofar as may be necessary to decide if the sheriff has acted correctly or not. It
can require the sheriff to restore the property to the claimants possession if warranted by the
a) File a third party claim with the sheriff of the Labor Arbiter, and evidence. However, if the claimants proof do not persuade the court of the validity of his title or
right of possession thereto, the claim will be denied.
Independent of the above-stated recourse, a third-party claimant may also avail of the remedy properties claimed by respondent Carrera pending the determination of the validity of the sale
known as terceria, provided in Section 17 (now 16), Rule 39, by serving on the officer making the made in her favor by the judgment debtor Poly-Plastic Products and Anthony Ching.
levy an affidavit of his title and a copy thereof upon the judgment creditor. The officer shall not be
bound to keep the property, unless such judgment creditor or his agent, on demand of the officer, In dismissing the petition for certiorari filed by Labor Arbiter Santos, we ruled that:
indemnifies the officer against such claim by a bond in a sum not greater than the value of the
property levied on. An action for damages may be brought against the sheriff within one hundred x x x. The power of the NLRC to execute its judgments extends only to properties unquestionably
twenty (120) days from the filing of the bond. belonging to the judgment debtor (Special Servicing Corp. v. Centro La Paz, 121 SCRA 748).

The aforesaid remedies are nevertheless without prejudice to any proper action that a third-party The general rule that no court has the power to interfere by injunction with the judgments or
claimant may deem suitable to vindicate his claim to the property. Such a proper action is, decrees of another court with concurrent or coordinate jurisdiction possessing equal power to grant
obviously, entirely distinct from that explicitly prescribed in Section 17 of Rule 39, which is an injunctive relief, applies only when no third-party claimant is involved (Traders Royal Bank v.
action for damages brought by a third-party claimant against the officer within one hundred twenty Intermediate Appellate Court, 133 SCRA 141 [1984]). When a third-party, or a stranger to the
(120) days from the date of the filing of the bond for the taking or keeping of the property subject of action, asserts a claim over the property levied upon, the claimant may vindicate his claim by an
the terceria. independent action in the proper civil court which may stop the execution of the judgment on
property not belonging to the judgment debtor. (Underscoring ours)
Quite obviously, too, this proper action would have for its object the recovery of ownership
or possession of the property seized by the sheriff, as well as damages resulting from the allegedly In Consolidated Bank and Trust Corp. v. Court of Appeals, 193 SCRA 158 [1991], we ruled
wrongful seizure and detention thereof despite the third-party claim; and it may be brought against that:
the sheriff and such other parties as may be alleged to have colluded with him in the supposedly
wrongful execution proceedings, such as the judgment creditor himself. Such proper action, as
above pointed out, is and should be an entirely separate and distinct action from that in which The well-settled doctrine is that a proper levy is indispensable to a valid sale on execution. A
execution has issued, if instituted by a stranger to the latter suit. sale unless preceded by a valid levy is void.Therefore, since there was no sufficient levy on the
execution in question, the private respondent did not take any title to the properties sold thereunder
x x x.
The remedies above mentioned are cumulative and may be resorted to by a third-party
claimant independent of or separately from and without need of availing of the others. If a
third-party claimant opted to file a proper action to vindicate his claim of ownership, he must A person other than the judgment debtor who claims ownership or right over the levied properties
institute an action, distinct and separate from that in which the judgment is being enforced, with the is not precluded, however, from taking other legal remedies. (Underscoring ours)
court of competent jurisdiction even before or without need of filing a claim in the court which
issued the writ, the latter not being a condition sine qua non for the former. In such proper action, Jurisprudence is likewise replete with rulings that since the third-party claimant is not one of
the validity and sufficiency of the title of the third-party claimant will be resolved and a writ of the parties to the action, he could not, strictly speaking, appeal from the order denying his claim,
preliminary injunction against the sheriff may be issued. (Emphasis and underscoring ours) but should file a separate reinvindicatory action against the execution creditor or the purchaser of
the property after the sale at public auction, or a complaint for damages against the bond filed by
[17]
In light of the above, the filing of a third party claim with the Labor Arbiter and the NLRC did the judgment creditor in favor of the sheriff.
not preclude the petitioner from filing a subsequent action for recovery of property and damages [18]
with the Regional Trial Court. And, the institution of such complaint will not make petitioner guilty of And in Lorenzana v. Cayetano, we ruled that:
[15]
forum shopping.
[16] The rights of a third-party claimant should not be decided in the action where the third-party claim
In Santos v. Bayhon, wherein Labor Arbiter Ceferina Diosana rendered a decision in has been presented, but in a separate action to be instituted by the third person. The appeal that
NLRC NCR Case No. 1-313-85 in favor of Kamapi, the NLRC affirmed the decision. Thereafter, should be interposed if the term appeal may properly be employed, is a separate reinvindicatory
Kamapi obtained a writ of execution against the properties of Poly-Plastic Products or Anthony action against the execution creditor or the purchaser of the property after the sale at public
Ching. However, respondent Priscilla Carrera filed a third-party claim alleging that Anthony Ching auction, or complaint for damages to be charged against the bond filed by the judgment creditor
had sold the property to her. Nevertheless, upon posting by the judgment creditor of an indemnity in favor of the sheriff. Such reinvindicatory action is reserved to the third-party claimant.
bond, the NLRC Sheriff proceeded with the public auction sale. Consequently, respondent Carrera
filed with Regional Trial Court, Manila an action to recover the levied property and obtained a
temporary restraining order against Labor Arbiter Diosana and the NLRC Sheriff from issuing a A separate civil action for recovery of ownership of the property would not constitute
certificate of sale over the levied property. Eventually, Labor Arbiter Santos issued an order interference with the powers or processes of the Arbiter and the NLRC which rendered the
allowing the execution to proceed against the property of Poly-Plastic Products. Also, Labor Arbiter judgment to enforce and execute upon the levied properties. The property levied upon being that of
Santos and the NLRC Sheriff filed a motion to dismiss the civil case instituted by respondent a stranger is not subject to levy. Thus, a separate action for recovery, upon a claim and prima-
Carrera on the ground that the Regional Trial Court did not have jurisdiction over the labor facie showing of ownership by the petitioner, cannot be considered as interference.
case. The trial court issued an order enjoining the enforcement of the writ of execution over the
The Fallo

WHEREFORE, the Court REVERSES the decision of the Court of Appeals and the
[19]
resolution denying reconsideration. In lieu thereof, the Court renders judgment ANNULLING the
sale on execution of the subject property conducted by NLRC Sheriff Anam Timbayan in favor of
respondent SAMAR-ANGLO and the subsequent sale of the same to Rodrigo Sy Mendoza. The
Court declares the petitioner to be the rightful owner of the property involved and remands the case
to the trial court to determine the liability of respondents SAMAR-ANGLO, Rodrigo Sy Mendoza,
and WESTERN GUARANTY CORPORATION to pay actual damages that petitioner claimed.

Costs against respondents, except the Court of Appeals.

SO ORDERED.
[G.R. No. 120567. March 20, 1998] x x x that almost two (2) years ago, i.e. on April 15, 1993, the petitioners were instructed to attend
an investigation by respondents Security and Fraud Prevention Sub-Department regarding an April
3, 1993 incident in Hongkong at which Joseph Abaca, respondents Avionics Mechanic in
Hongkong was intercepted by the Hongkong Airport Police at Gate 05 xxx the ramp area of the Kai
Tak International Airport while xxx about to exit said gate carrying a xxx bag said to contain some
PHILIPPINE AIRLINES, INC., petitioner, vs., NATIONAL LABOR RELATIONS COMMISSION, 2.5 million pesos in Philippine Currencies. That at the Police Station, Mr. Abaca claimed that he
FERDINAND PINEDA and GODOFREDO CABLING, respondents. just found said plastic bag at the Skybed Section of the arrival flight PR300/03 April 93, where
petitioners served as flight stewards of said flight PR300; x x the petitioners sought a more detailed
account of what this HKG incident is all about; but instead, the petitioners were administratively
DECISION
charged, a hearing on which did not push through until almost two (2) years after, i.e. on January
MARTINEZ, J.: 20, 1995 xxx where a confrontation between Mr. Abaca and petitioners herein was compulsorily
arranged by the respondents disciplinary board at which hearing, Abaca was made to identify
petitioners as co-conspirators; that despite the fact that the procedure of identification adopted by
Can the National Labor Relations Commission (NLRC), even without a complaint for illegal respondents Disciplinary Board was anomalous as there was no one else in the line-up (which
dismissal filed before the labor arbiter, entertain an action for injunction and issue such writ could not be called one) but petitioners xxx Joseph Abaca still had difficulty in identifying petitioner
enjoining petitioner Philippine Airlines, Inc. from enforcing its Orders of dismissal against private Pineda as his co-conspirator, and as to petitioner Cabling, he was implicated and pointed by Abaca
respondents, and ordering petitioner to reinstate the private respondents to their previous only after respondents Atty. Cabatuando pressed the former to identify petitioner Cabling as co-
positions? conspirator; that with the hearing reset to January 25, 1995, Mr. Joseph Abaca finally gave
exculpating statements to the board in that he cleared petitioners from any participation or from
This is the pivotal issue presented before us in this petition for certiorari under Rule 65 of the being the owners of the currencies, and at which hearing Mr. Joseph Abaca volunteered the
Revised Rules of Court which seeks the nullification of the injunctive writ dated April 3,1995 issued information that the real owner of said money was one who frequented his headquarters in
by the NLRC and the Order denying petitioner's motion for reconsideration on the ground that the Hongkong to which information, the Disciplinary Board Chairman, Mr. Ismael Khan, opined for the
said Orders were issued in excess of jurisdiction. need for another hearing to go to the bottom of the incident; that from said statement, it appeared
Private respondents are flight stewards of the petitioner. Both were dismissed from the that Mr. Joseph Abaca was the courier, and had another mechanic in Manila who hid the currency
service for their alleged involvement in the April 3, 1993 currency smuggling in Hong Kong. at the planes skybed for Abaca to retrieve in Hongkong, which findings of how the money was
found was previously confirmed by Mr. Joseph Abaca himself when he was first investigated by the
Aggrieved by said dismissal, private respondents filed with the NLRC a petition for
[1] Hongkong authorities; that just as petitioners thought that they were already fully cleared of the
injunction praying that: charges, as they no longer received any summons/notices on the intended additional hearings
mandated by the Disciplinary Board, they were surprised to receive on February 23, 1995 xxx a
Memorandum dated February 22, 1995 terminating their services for alleged violation of
"I. Upon filing of this Petition, a temporary restraining order be issued, prohibiting respondents respondents Code of Discipline effective immediately; that sometime xxx first week of March, 1995,
(petitioner herein) from effecting or enforcing the Decision dated Feb. 22, 1995, or to reinstate petitioner Pineda received another Memorandum from respondent Mr. Juan Paraiso, advising him
petitioners temporarily while a hearing on the propriety of the issuance of a writ of preliminary of his termination effective February 3, 1995, likewise for violation of respondents Code of
injunction is being undertaken; Discipline; x x x"

"II. After hearing, a writ of preliminary mandatory injunction be issued ordering respondent to In support of the issuance of the writ of temporary injunction, the NLRC adopted the view
reinstate petitioners to their former positions pending the hearing of this case, or, prohibiting that: (1) private respondents cannot be validly dismissed on the strength of petitioner's Code of
respondent from enforcing its Decision dated February 22,1995 while this case is pending Discipline which was declared illegal by this Court in the case of PAL, Inc. vs. NLRC, (G.R. No.
adjudication; 85985), promulgated August 13, 1993, for the reason that it was formulated by the petitioner
without the participation of its employees as required in R.A. 6715, amending Article 211 of the
"III. After hearing, that the writ of preliminary injunction as to the reliefs sought for be made Labor Code; (2) the whimsical, baseless and premature dismissals of private respondents which
permanent, that petitioners be awarded full backwages, moral damages of PHP 500,000.00 each "caused them grave and irreparable injury" is enjoinable as private respondents are left "with no
and exemplary damages of PHP 500,000.00 each, attorneys fees equivalent to ten percent of speedy and adequate remedy at law'"except the issuance of a temporary mandatory injunction; (3)
whatever amount is awarded, and the costs of suit." the NLRC is empowered under Article 218 (e) of the Labor Code not only to restrain any actual or
threatened commission of any or all prohibited or unlawful acts but also to require the performance
[2]
of a particular act in any labor dispute, which, if not restrained or performed forthwith, may cause
On April 3, 1995, the NLRC issued a temporary mandatory injunction enjoining petitioner to grave or irreparable damage to any party; and (4) the temporary mandatory power of the NLRC
cease and desist from enforcing its February 22, 1995 Memorandum of dismissal. In granting the was recognized by this Court in the case of Chemo-Technicshe Mfg., Inc. Employees Union,DFA,
writ, the NLRC considered the following facts, to wit: et.al. vs. Chemo-Technische Mfg., Inc. [G.R. No. 107031, January 25,1993].
[3]
On May 4,1995, petitioner moved for reconsideration arguing that the NLRC erred:
1. in granting a temporary injunction order when it has no jurisdiction to issue an injunction or 'temporary or permanent injunction'- '(4) That complainant has no adequate remedy at law;' Article
restraining order since this may be issued only under Article 218 of the Labor Code if the 218 (e) of the Labor Code clearly envisioned adequacy , and not plain availability of a
case involves or arises from labor disputes; remedy at law as an alternative bar to the issuance of an injunction. An illegal dismissal suit
(which takes, on its expeditious side, three (3) years before it can be disposed of) while
available as a remedy under Article 217 (a) of the Labor Code, is certainly not an 'adequate;
2. in granting a temporary injunction order when the termination of private respondents have long
remedy at law. Ergo, it cannot, as an alternative remedy, bar our exercise of that injunctive
been carried out;
power given us by Article 218 (e) of the Code.

3. ..in ordering the reinstatement of private respondents on the basis of their mere allegations, in
xxx xxx xxx
violation of PAL's right to due process;

Thus, Article 218 (e), as earlier discussed [which empowers this Commission 'to require the
4. ..in arrogating unto itself management prerogative to discipline its employees and divesting the
performance of a particular act' (such as our requiring respondent 'to cease and desist from
labor arbiter of its original and exclusive jurisdiction over illegal dismissal cases;
enforcing' its whimsical memoranda of dismissals and 'instead to reinstate petitioners to their
respective position held prior to their subject dismissals') in 'any labor dispute which, if not xxx
5. ..in suspending the effects of termination when such action is exclusively within the jurisdiction of performed forthwith, may cause grave and irreparable damage to any party'] stands as the sole
the Secretary of Labor; 'adequate remedy at law' for petitioners here.

6. ..in issuing the temporary injunction in the absence of any irreparable or substantial Finally, the respondent, in its sixth argument claims that even if its acts of dismissing petitioners
injury to both private respondents. 'may be great, still the same is capable of compensation', and that consequently, 'injunction need
not be issued where adequate compensation at law could be obtained'. Actually, what respondent
PAL argues here is that we need not interfere in its whimsical dismissals of petitioners as, after all,
On May 31,1995, the NLRC denied petitioner's motion for reconsideration, ruling:
it can pay the latter its backwages. x x x

The respondent (now petitioner), for one, cannot validly claim that we cannot exercise our
But just the same, we have to stress that Article 279 does not speak alone of backwages as an
injunctive power under Article 218 (e) of the Labor Code on the pretext that what we have
obtainable relief for illegal dismissal;that reinstatement as well is the concern of said law,
here is not a labor dispute as long as it concedes that as defined by law, a(l) Labor Dispute
enforceable when necessary, through Article 218 (e) of the Labor Code (without need of an illegal
includes any controversy or matter concerning terms or conditions of employment. . If dismissal suit under Article 217 (a) of the Code) if such whimsical and capricious act of illegal
security of tenure, which has been breached by respondent and which, precisely, is sought to be [4]
dismissal will 'cause grave or irreparable injury to a party'. x x x "
protected by our temporary mandatory injunction (the core of controversy in this case) is not a term
or condition of employment, what then is?
Hence, the present recourse.
xxxxxxxxx Generally, injunction is a preservative remedy for the protection of one's substantive rights or
interest. It is not a cause of action in itself but merely a provisional remedy, an adjunct to a main
Anent respondents second argument x x x, Article 218 (e) of the Labor Code x x suit. It is resorted to only when there is a pressing necessity to avoid injurious consequences
x empowered the Commission not only to issue a prohibitory injunction, but a mandatory which cannot be remedied under any standard of compensation. The application of the injunctive
(to require the performance) one as well. Besides, as earlier discussed, we already writ rests upon the existence of an emergency or of a special reason before the main case be
exercised (on August 23,1991) this temporary mandatory injunctive power in the case of regularly heard. The essential conditions for granting such temporary injunctive relief are that the
Chemo-Technische Mfg., Inc. Employees Union-DFA et.al. vs. Chemo-Technishe Mfg., Inc., complaint alleges facts which appear to be sufficient to constitute a proper basis for injunction and
et. al. (supra) and effectively enjoined one (1) month old dismissals by Chemo-Technische that on the entire showing from the contending parties, the injunction is reasonably necessary to
[5]
and that our aforesaid mandatory exercise of injunctive power, when questioned through a protect the legal rights of the plaintiff pending the litigation. Injunction is also a special equitable
[6]
petition for certiorari, was sustained by the Third Division of the Supreme court per its relief granted only in cases where there is no plain, adequate and complete remedy at law.
Resolution dated January 25,1993.
In labor cases, Article 218 of the Labor Code empowers the NLRC-

xxxxxxxxx
"(e) To enjoin or restrain any actual or threatened commission of any or all prohibited or unlawful
acts or to require the performance of a particular act in any labor dispute which, if not restrained
Respondents fourth argument that petitioner's remedy for their dismissals is 'to file an or performed forthwith, may cause grave or irreparable damage to any party or render
illegal dismissal case against PAL which cases are within the original and exclusive ineffectual any decision in favor of such party; x x x." (Emphasis Ours)
jurisdiction of the Labor Arbiter' is ignorant. In requiring as a condition for the issuance of a
Complementing the above-quoted provision, Sec. 1, Rule XI of the New Rules of Procedure (3) If accompanied with a claim for reinstatement, those cases that workers may file
of the NLRC, pertinently provides as follows: involving wages, rates of pay, hours of work and other terms and conditions of
employment;
"Section 1. Injunction in Ordinary Labor Dispute.-A preliminary injunction or a restraining order may
be granted by the Commission through its divisions pursuant to the provisions of paragraph (e) of (4) Claims for actual, moral, exemplary and other forms of damages arising from the
Article 218 of the Labor Code, as amended, when it is established on the bases of the sworn employer-employee relations;
allegations in the petition that the acts complained of, involving or arising from any labor
dispute before the Commission, which, if not restrained or performed forthwith, may cause grave
(5) Cases arising from any violation of Article 264 of this Code, including questions involving the
or irreparable damage to any party or render ineffectual any decision in favor of such party.
legality of strikes and lockouts; and

xxx xxx xxx


(6) Except claims for employees compensation, social security, medicare and maternity benefits,
all other claims arising from employer-employee relations, including those of persons in domestic
The foregoing ancillary power may be exercised by the Labor Arbiters only as an incident or household service, involving an amount exceeding five thousand pesos (P 5,000.00), whether or
[11]
to the cases pending before them in order to preserve the rights of the parties during the pendency not accompanied with a claim for reinstatement.
[7]
of the case, but excluding labor disputes involving strikes or lockout. (Emphasis Ours)

From the foregoing provisions of law, the power of the NLRC to issue an injunctive writ The jurisdiction conferred by the foregoing legal provision to the labor arbiter is
originates from "any labor dispute" upon application by a party thereof, which application if not both original and exclusive, meaning, no other officer or tribunal can take cognizance of, hear
granted "may cause grave or irreparable damage to any party or render ineffectual any decision in and decide any of the cases therein enumerated. The only exceptions are where the Secretary of
favor of such party." Labor and Employment or the NLRC exercises the power of compulsory arbitration, or the parties
agree to submit the matter to voluntary arbitration pursuant to Article 263 (g) of the Labor Code, the
The term "labor dispute" is defined as "any controversy or matter concerning terms and pertinent portions of which reads:
conditions of employment or the association or representation of persons in negotiating, fixing,
maintaining, changing, or arranging the terms and conditions of employment regardless of
[8] "(g) When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout
whether or not the disputants stand in the proximate relation of employers and employees."
in an industry indispensable to the national interest, the Secretary of Labor and Employment may
The term "controversy" is likewise defined as "a litigated question; adversary proceeding assume jurisdiction over the dispute and decide it or certify the same to the Commission for
in a court of law; a civil action or suit, either at law or in equity; a justiciable dispute."
[9] compulsory arbitration. Such assumption or certification shall have the effect of automatically
enjoining the intended or impending strike or lockout as specified in the assumption or certification
A "justiciable controversy" is "one involving an active antagonistic assertion of a legal right on order. If one has already taken place at the time of assumption or certification, all striking or locked
one side and a denial thereof on the other concerning a real, and not a mere theoretical question out employees shall immediately resume operations and readmit all workers under the same terms
[10]
or issue." and conditions prevailing before the strike or lockout. The Secretary of Labor and Employment or
the Commission may seek the assistance of law enforcement agencies to ensure compliance with
Taking into account the foregoing definitions, it is an essential requirement that there must this provision as well as with such orders as he may issue to enforce the same.
first be a labor dispute between the contending parties before the labor arbiter. In the present case,
there is no labor dispute between the petitioner and private respondents as there has yet been no
complaint for illegal dismissal filed with the labor arbiter by the private respondents against the xxxxxxxxx"
petitioner.
On the other hand, the NLRC shall have exclusive appellate jurisdiction over all cases
The petition for injunction directly filed before the NLRC is in reality an action for illegal decided by labor arbiters as provided in Article 217(b) of the Labor Code. In short, the jurisdiction
dismissal. This is clear from the allegations in the petition which prays for: reinstatement of private of the NLRC in illegal dismissal cases is appellate in nature and, therefore, it cannot entertain the
respondents; award of full backwages, moral and exemplary damages; and attorney's fees. As private respondents' petition for injunction which challenges the dismissal orders of petitioner.
such, the petition should have been filed with the labor arbiter who has the original and exclusive Article 218(e) of the Labor Code does not provide blanket authority to the NLRC or any of its
jurisdiction to hear and decide the following cases involving all workers, whether agricultural or divisions to issue writs of injunction, considering that Section 1 of Rule XI of the New Rules of
non-agricultural: Procedure of the NLRC makes injunction only an ancillary remedy in ordinary labor disputes"
[12]

(1) Unfair labor practice; Thus, the NLRC exceeded its jurisdiction when it issued the assailed Order granting private
respondents' petition for injunction and ordering the petitioner to reinstate private respondents.

(2) Termination disputes; The argument of the NLRC in its assailed Order that to file an illegal dismissal suit with the
labor arbiter is not an "adequate" remedy since it takes three (3) years before it can be disposed of,
is patently erroneous. An "adequate" remedy at law has been defined as one "that affords relief
with reference to the matter in controversy, and which is appropriate to the particular policy of the State to encourage the parties to use the non-judicial process of negotiation and
[13] [21]
circumstances of the case." It is a remedy which is equally beneficial, speedy and sufficient compromise, mediation and arbitration. Thus, injunctions may be issued only in cases of
[14]
which will promptly relieve the petitioner from the injurious effects of the acts complained of. extreme necessity based on legal grounds clearly established, after due consultations or hearing
and when all efforts at conciliation are exhausted which factors, however, are clearly absent in the
Under the Labor Code, the ordinary and proper recourse of an illegally dismissed present case.
[15]
employee is to file a complaint for illegal dismissal with the labor arbiter. In the case at bar,
private respondents disregarded this rule and directly went to the WHEREFORE, the petition is hereby GRANTED. The assailed Orders dated April 3,1995
NLRC througha petition for injunction praying that petitioner be enjoined from enforcing its and May 31,1995, issued by the National Labor Relations Commission (First Division), in NLRC
[16]
dismissal orders. In Lamb vs. Phipps, we ruled that if the remedy is specifically provided by law, NCR IC No. 000563-95, are hereby REVERSED and SET ASIDE.
it is presumed to be adequate. Moreover, the preliminary mandatory injunction prayed for by the
private respondents in their petition before the NLRC can also be entertained by the labor arbiter SO ORDERED.
who, as shown earlier, has the ancillary power to issue preliminary injunctions or restraining orders
as an incident in the cases pending before him in order to preserve the rights of the parties during
[17]
the pendency of the case.

Furthermore, an examination of private respondents' petition for injunction reveals that it has
no basis since there is no showing of any urgency or irreparable injury which the private
respondents might suffer. An injury is considered irreparable if it is of such constant and frequent
[18]
recurrence that no fair and reasonable redress can be had therefor in a court of law, or where
there is no standard by which their amount can be measured with reasonable accuracy, that is, it is
not susceptible of mathematical computation. It is considered irreparable injury when it cannot be
adequately compensated in damages due to the nature of the injury itself or the nature of the right
or property injured or when there exists no certain pecuniary standard for the measurement of
[19]
damages.

In the case at bar, the alleged injury which private respondents stand to suffer by reason of
their alleged illegal dismissal can be adequately compensated and therefore, there exists no
"irreparable injury," as defined above which would necessitate the issuance of the injunction sought
for. Article 279 of the Labor Code provides that an employee who is unjustly dismissed from
employment shall be entitled to reinstatement, without loss of seniority rights and other privileges,
and to the payment of full backwages, inclusive ofallowances, and to other benefits or their
monetary equivalent computed from the time his compensation was withheld from him up to the
time of his actual reinstatement.

The ruling of the NLRC that the Supreme Court upheld its power to issue temporary
mandatory injunction orders in the case of Chemo-Technische Mfg., Inc. Employees Union-DFA,
et.al. vs. Chemo-Technische Mfg., Inc. et.al., docketed as G.R. No. 107031, is misleading. As
correctly argued by the petitioner, no such pronouncement was made by this Court in said case.
On January 25,1993, we issued a Minute Resolution in the subject case stating as follows:

"Considering the allegations contained, the issues raised and the arguments adduced in the
petition for certiorari , as well as the comments of both public and private respondents thereon, and
the reply of the petitioners to private respondent's motion to dismiss the petition, the Court
Resolved to DENY the same for being premature."

It is clear from the above resolution that we did not in anyway sustain the action of the NLRC
in issuing such temporary mandatory injunction but rather we dismissed the petition as the NLRC
had yet to rule upon the motion for reconsideration filed by peitioner. Thus, the minute resolution
denying the petition for being prematurely filed.

Finally, an injunction, as an extraordinary remedy, is not favored in labor law considering that
[20]
it generally has not proved to be an effective means of settling labor disputes. It has been the
THIRD DIVISION

Promulgated:
EMILIO E. DIOKNO, VICENTE R. G.R. No. 168475
ALCANTARA, ANTONIO Z. VERGARA, JR., July 4, 2007
DANTE M. TONG, JAIME C. MENDOZA,
ROMEO M. MACAPULAY, ROBERTO M.
MASIGLAT, LEANDRO C. ATIENZA,
ROMULO AQUINO, JESUS SAMIA,
GAUDENCIO CAMIT, DANTE PARAO, Present:
ALBERTO MABUGAT, EDGARDO
VILLANUEVA, JR., FRANCISCO ESCOTO, YNARES-SANTIAGO, J.
EDGARDO SEVILLA, FELICITO MACASAET, Chairperson,
and JOSE Z. TULLO, AUSTRIA-MARTINEZ,
Petitioners, CHICO-NAZARIO, and
NACHURA, JJ.

- versus -

HON. HANS LEO J. CACDAC, in his


capacity as Director of the Bureau of Labor
Relations, DOLE, MANILA, MED-ARBITER
TRANQUILINO C. REYES, EDGARDO DAYA,
PABLO LUCAS, LEANDRO M. TABILOG,
REYNALDO ESPIRITU, JOSE VITO,
ANTONIO DE LUNA, ARMANDO YALUNG,
EDWIN LAYUG, NARDS PABILONA,
REYNALDO REYES, EVANGELINE ESCALL,
ALBERTO ALCANTARA, ROGELIO x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
CERVITILLO, MARCELINO MORELOS,
FAUSTINO ERMINO, JIMMY S. ONG,
ALFREDO ESCALL, NARDITO C. ALVAREZ, DECISION
JAIME T. VALERIANO, JOHNSON S. REYES,
GAUDENCIO JIMENEZ, JR., GAVINO R.
VIDANES, ARNALDO G. TAYAO,
BONIFACIO F. CIRUJANO, EDGARDO G.
CADVONA, MAXIMO A. CAOC, JOSE O. CHICO-NAZARIO, J.:
MACLIT, JR., LUZMINDO D. ACORDA, JR.,
LEMUEL R. RAGASA, and GIL G. DE VERA, This is a Petition for Review on Certiorari under Rule 45 of the 1997 Revised Rules of Civil
Respondents. [1] [2]
Procedure, seeking the nullification of the Decision and Resolution of the Court of Appeals in
CA-G.R. SP No. 83061, dated 17 June 2004 and 10 June 2005, respectively, which dismissed
petitioners Petition for Certiorari and denied their Motion for Reconsideration thereon.

The Facts

The First Line Association of Meralco Supervisory Employees (FLAMES) is a legitimate


labor organization which is the supervisory union of Meralco. Petitioners and private respondents
are members of FLAMES.

On 1 April 2003, the FLAMES Executive Board created the Committee on Election
[3]
(COMELEC) for the conduct of its union elections scheduled on 7 May 2003. The COMELEC was
composed of petitioner Dante M. Tong as its chairman, and petitioners Jaime C. Mendoza and
Romeo M. Macapulay as members. Subsequently, private respondents Jimmy S. Ong, Nardito C. Romulo C. Aquino Treasurer
Alvarez, Alfredo J. Escall, and Jaime T. Valerianofiled their respective certificates of Jesus D. Samia Asst. Treasurer
candidacy. On 12 April 2003, the COMELEC rejected Jimmy S. Ongs candidacy on the ground that Gaudencio C. Camit Auditor
he was not a member of FLAMES.Meanwhile, the certificates of candidacy of Nardito C. Alvarez, Rodante B. [Parao] Asst. Auditor
Alfredo J. Escall, and Jaime T. Valeriano were similarly rejected on the basis of the exclusion of Jose Z. Tullo Central Coordinator
their department from the scope of the existing collective bargaining agreement (CBA). The Bernardo C. Sevilla North Coordinator
employees assigned to the aforesaid department are allegedly deemed disqualified from Francis B. Escoto South Coordinator
membership in the union for being confidential employees.

On 24 April 2003, private respondents Jimmy S. Ong, Nardito C. Alvarez, Alfredo J. Escall, Jaime On 8 May 2003, private respondents Daya, et al., along with Ong, et al., filed with the
[4] [13]
T. Valeriano (Ong, et al.), and a certain Leandro M. Tabilog filed a Petition before the Med- Med-Arbitration Unit of the DOLE-NCR, a Petition to: a) Nullify Order of Disqualification; b)
Arbitration Unit of the Department of Labor and Employment (DOLE). They prayed, inter alia, for Nullify Election Proceedings and Counting of Votes; c) Declare Failure of Election; and d) Declare
[5]
the nullification of the order of the COMELEC which disallowed their candidacy. They further Holding of New Election to be Controlled and Supervised by the DOLE. The Petition was docketed
prayed that petitioners be directed to render an accounting of funds with full and detailed disclosure as Case No. NCR-OD-0304-002-LRD.
of expenditures and financial transactions; and that a representative from the Bureau of Labor
Relations (BLR) be designated to act as chairman of the COMELEC in lieu of petitioner Dante M. On 14 May 2003, another group led by private respondent Gaudencio Jimenez, Jr.,
[6]
Tong. along with private respondents Johnson S. Reyes, Gavino R. Vidanes, Arnaldo G. Tayao,
Bonifacio F. Cirujano, Edgardo G. Cadavona, Maximo A. Caoc, Jose O. Maclit, Jr., Luzmindo D.
[7]
On 30 April 2003, DOLE-NCR Regional Director Alex E. Maraan issued an Order directing DOLE Acorda, Jr., Lemuel R. Ragasa and Gil G. de Vera (Jimenez, et al.) filed a Petition with the Med-
[8]
personnel to observe the conduct of the FLAMES election on 7 May 2003. Arbitration Unit of the DOLE-NCR against petitioners to nullify the 7 May 2003 election on the
ground that the same was not free, orderly, and peaceful. It was docketed as Case No. NCR-OD-
[9]
On 2 May 2003, petitioners filed a Petition with the COMELEC seeking the disqualification of 0305-004-LRD, which was subsequently consolidated with the Petition of Daya, et al. and the
private respondents Edgardo Daya, Pablo Lucas, Leandro Tabilog, Reynaldo Espiritu, Jose Vito, earlier Petition of Ong, et al.
Antonio de Luna, Armando Yalung, Edwin Layug, Nards Pabilona, Reynaldo Reyes, Evangeline
Escall, Alberto Alcantara, Rogelio Cervitillo, Marcelino Morelos, and Faustino Ermino (Daya, et Meanwhile, the records show that a subsequent election was held on 30 June 2004,
al.). Petitioners alleged that Daya, et al.,allowed themselves to be assisted by non-union members, which was participated in and won by herein private respondents Daya, et al. The validity of the 30
[14]
and committed acts of disloyalty which are inimical to the interest of FLAMES. In their campaign, June 2004 elections was assailed by herein petitioners before the DOLE and taken to the Court
they allegedly colluded with the officers of the Meralco Savings and Loan Association (MESALA) of Appeals in CA-G.R. SP No. 88264 on certiorari, which case does not concern us in the instant
[15]
and the Meralco Mutual Aid and Benefits Association (MEMABA) and exerted undue influence on Petition. The Court of Appeals, in the aforesaid case, rendered a Decision dated 12 January
the members of FLAMES. 2007, upholding the validity of the 30 June 2004 elections, and the declaration of herein private
respondents Daya, et al., as the duly elected winners therein.
[10]
On 6 May 2003, the COMELEC issued a Decision, declaring Daya, et al., officially disqualified to
run and/or to participate in the 7 May 2003 FLAMES elections. The COMELEC also resolved to The Decision of the Med-Arbiter
exclude their names from the list of candidates in the polls or precincts, and further declared that
[16]
any vote cast in their favor shall not be counted.According to the COMELEC, Daya, et al., violated On 7 July 2003, Med-Arbiter Tranquilino B. Reyes, Jr. issued a Decision in favor of
[11]
Article IV, Section 4(a)(6) of the FLAMES Constitution and By-Laws (CBL) by allowing non- private respondents, Daya, et al. However, the petition of Jimenez, et al., was dismissed because it
members to aid them in their campaign. Their acts of solicitation for support from non-union was premature, it appearing that the COMELEC had not yet resolved their protest prior to their
members were deemed inimical to the interest of FLAMES. resort to the Med-Arbiter. Finally, the Petition of Ong, et al., seeking to declare themselves as bona
fide members of FLAMES was ordered dismissed.
On 7 May 2003, the COMELEC proclaimed the following candidates, including some of
[12]
herein petitioners as winners of the elections, to wit : The Med-Arbiter noted in his decision that during a conference which was held on 15
May 2003, the parties agreed that the issue anent the qualifications of private respondents Ong, et
[17]
NAME POSITION al. had been rendered moot and academic.

Emilio E. Diokno President The Med-Arbiter reversed the disqualification imposed by the COMELEC against private
Vicente P. Alcantara Executive Vice President External respondents Daya, et al. He said that the COMELEC accepted all the allegations of petitioners
Antonio Z. Vergara, Jr. Executive Vice President Internal against private respondents Daya, et al., sans evidence to substantiate the same.Moreover, he
Alberto L. Mabugat Vice-President Organizing found that the COMELEC erred in relying on Article IV, Section 4(a) (6) of the CBL as basis for
Roberto D. Masiglat, Jr. Vice-President Education their disqualification. The Med-Arbiter read the aforesaid provision to refer to the dismissal and/or
Leandro C. Atienza Vice-President Chief Steward expulsion of a member from FLAMES, but not to the disqualification of a member as a candidate in
Felito C. Macasaet Secretary a union election. He rationalized that the COMELEC cannot disqualify a candidate on the same
Edgardo R. Villanueva Asst. Secretary grounds for expulsion of members, which power is vested by the CBL on the Executive Board. The
Med-Arbiter also held that there was a denial of due process because the COMELEC failed to By themselves, such acts could not be taken as repugnant of COMELECs
receive private respondents Daya, et al.s motion for reconsideration of the order of their authority. Sensing that they were prejudiced by the disqualification order, it
disqualification.The COMELEC was also found to have refused to receive their written protest in was only incumbent upon [private respondents Daya, et al.] to seek remedy
[18]
violation of the unions CBL. before a body, which they thought has a more objective perspective over the
situation. In short, they opted to bypass the administrative remedies within the
Lastly, the Med-Arbiter defended his jurisdiction over the case. He concluded that even union. Such a move could not be taken against [private respondents Daya, et
as the election of union officers is an internal affair of the union, his office has the right to inquire al.] considering that non-exhaustion of administrative remedies is justified in
[19]
into the merits and conduct of the election when its jurisdiction is sought. instances where it would practically amount to a denial of justice, or would be
[23]
illusory or vain, as in the present controversy.
The decretal portion of the Med-Arbiters Decision states, viz:

WHEREFORE, premises considered, the [P]etition to Nullify the The BLR Director disposed in this wise:
Order of Disqualification; Nullify Election proceedings and counting of Votes;
and Declare a Failure of Elections is hereby granted. The disqualification of WHEREFORE, the appeal is DISMISSED for lack of merit. The Decision of
[private respondent] Ed[gardo] Daya, et al., is hereby considered as null and Med-Arbiter Tranquilino B. Reyes, DOLE-NCR, dated 7 July 2003 is
void. Perforce, the election of union officers of FLAMES on May 7, 2003 is AFFIRMED in its entirety.
declared a failure and a new election is ordered conducted under the
supervision of the Department of Labor and Employment. Let the records of this case be returned to the DOLE-NCR for the immediate
conduct of election of officers of the First Line Association of Meralco
The [P]etition to conduct an accounting of union funds and to stop Supervisory Employees (FLAMES) under the supervision of DOLE-NCR
[24]
the release of funds to [petitioner] Diokno, et al., is ordered dismissed for lack personnel.
of merit.

And the Petition to Declare [private respondents] Jimmy Ong, Subsequently, petitioners sought a reversal of the 3 December 2003 Resolution, but the BLR
[25]
Alfredo [E]scall, Nardito Alvarez, and Jaime Valeriano as members of Director issued a Resolution dated 10 February 2003, refusing to reverse his earlier Resolution
FLAMES is hereby ordered dismissed for lack of merit. for lack of merit.

The [P]etition to Nullify the election filed by [private respondents] Petitioners elevated the case to the Court of Appeals via a Petition for Certiorari.
[20]
Gaudencio Jimenez, et al., is likewise ordered dismissed.

The Ruling of the Court of Appeals


Aggrieved, petitioners filed an appeal before the Director of the BLR.
The Court of Appeals found petitioners appeal to be bereft of merit.
The Ruling of the BLR Director
[21]
On 3 December 2003, the Director of the BLR issued a Resolution, affirming in toto the assailed The appellate court held that the provision relied upon by the COMELEC concerns the dismissal
Decision of the Med-Arbiter. and/or expulsion of union members, which power is vested in the FLAMES Executive Board, and
not the COMELEC. It affirmed the finding of the BLR Director that the COMELEC, in disqualifying
Public respondent Director Hans Leo J. Cacdac ruled, inter alia, that the COMELECs reliance on private respondents Daya, et al., committed a procedural shortcut. It held:
Article IV, Section 4(a) (6) of the CBL, as a ground for disqualifying private respondents Daya, et
al., was premature. He echoed the interpretation of the Med-Arbiter that the COMELEC Without the requisite two-thirds (2/3) vote of the Executive Board dismissing
erroneously resorted to the aforecited provision which refers to the expulsion of a member from the and/or expelling private respondents for acts contemplated thereunder, the
union on valid grounds and with due process, along with the requisite 2/3 vote of the Executive COMELEC was clearly violating the unions constitution and bylaws (sic) by
Board. Hence, the COMELEC cut short the expulsion proceedings in disqualifying private utilizing the aforequoted provision in its said May 6, 2003 decision and, in the
[22]
respondents Daya, et al. The BLR Director further held that the case involves a question of process, arrogating unto itself a power it did not possess. As the document
disqualification on account of the alleged commission by private respondents Daya, et al., of illegal embodying the covenant between a union and its members and the
campaign acts, which acts were not specifically mentioned in the guidelines for the conduct of fundamental law governing the members rights and obligations, it goes without
election as issued by the COMELEC. Likewise, on the alleged refusal of private respondents saying that the constitution and bylaws (sic) should be upheld for as long as
[26]
Daya, et al., to submit to the jurisdiction of the COMELEC by failing to file a petition to nullify its they are not contrary to law, good morals or public policy.
order of disqualification, the BLR Director deemed the same as an exception to the rule on
exhaustion of administrative remedies. Thus:
On the matter of the failure of private respondents Daya, et al. to come up with 30
percent (30%) members support in filing the Petition to Nullify the COMELECs Decision before the
[32]
Med-Arbiter, the Court of Appeals said that the petition did not involve the entire membership of Petitioners attribute to the Court of Appeals several errors to substantiate their Petition. They all
FLAMES, so there was no need to comply with the aforesaid requirement.Furthermore, the boil down, though, to the question of whether the Court of Appeals committed grave abuse of
appellate court applied the exception to the rule on exhaustion of administrative remedies on the discretion when it affirmed the jurisdiction of the BLR to take cognizance of the case and then
[27]
ground, inter alia, that resort to such a remedy would have been futile, illusory or vain. Indeed, upheld the ruling of the BLR Director and Med-Arbiter, nullifying the COMELECs order of
the Court of Appeals emphasized that private respondents Daya, et al., were directed by the disqualification of private respondents Daya et al., and annulling the 7 May 2003 FLAMES
COMELEC to file their Answer to the petition for their disqualification only on 5 May 2003. Private elections.
respondents Daya, et al., filed their Answer on 6 May 2003. On the same day, the COMELEC
issued its Decision disqualifying them. A day after, the 7 May 2003 election was held. The Court of The Courts Ruling
Appeals further stressed that private respondents Daya, et al.s efforts to have their disqualification
reconsidered were rebuffed by the COMELEC; hence, they were left with no choice but to seek the The Petition is devoid of merit.
[28]
intervention of the BLR, which was declared to have jurisdiction over intra-union disputes even at
[29]
its own initiative under Article 226 of the Labor Code. We affirm the finding of the Court of Appeals upholding the jurisdiction of the BLR.Article
226 of the Labor Code is hereunder reproduced, to wit:
Petitioners sought a reconsideration of the 17 June 2004 Decision of the Court of
[30]
Appeals, but the same was denied in a Resolution dated 10 June 2005. ART. 226. BUREAU OF LABOR RELATIONS. The Bureau of Labor Relations
and the Labor Relations Divisions in the regional offices of the Department of
Hence, the instant Petition. Labor shall have original and exclusive authority to act, at their own initiative or
upon request of either or both parties, on all inter-union and intra-union
At the outset, petitioners contend that the instant Petition falls under the exceptions to conflicts, and all disputes, grievances or problems arising from or affecting
the rule that the Supreme Court is not a trier of facts. They implore this Court to make factual labor-management relations in all workplaces whether agricultural or
determination anent the conduct of the 7 May 2003 elections. They also question the jurisdiction of nonagricultural, except those arising from the implementation or interpretation
the BLR on the case at bar because of the failure of private respondents Daya, et al., to exhaust of collective bargaining agreements which shall be the subject of grievance
[31]
administrative remedies within the union. It is the stance of petitioner that Article 226 of the procedure and/or voluntary arbitration.
Labor Code which grants power to the BLR to resolve inter-union and intra-union disputes is dead
law, and has been amended by Section 14 of Republic Act No. 6715, whereby the conciliation, The Bureau shall have fifteen (15) working days to act on labor cases before it, subject
mediation and voluntary arbitration functions of the BLR had been transferred to the National to extension by agreement of the parties.
Conciliation and Mediation Board.
[33]
The amendment to Article 226, as couched in Republic Act No. 6715, which is relied
Petitioners similarly assert that the 7 May 2003 election was conducted in a clean, upon by petitioners in arguing that the BLR had been divested of its jurisdiction, simply reads, thus:
honest, and orderly manner, and that private respondents, some of whom are not bona
fide members of FLAMES, were validly disqualified by the COMELEC from running in the Sec. 14. The second paragraph of Article 226 of the same Code is
election. They also rehashed their argument that non-members of the union were allowed by likewise hereby amended to read as follows:
private respondents Daya, et al., to participate in the affair. They challenge the finding of the BLR
Director that the reliance by the COMELEC on Article IV, Section 4(a)(6) of the CBL, was "The Bureau shall have fifteen (15) calendar days to act on labor
premature. Petitioners insist that the COMELEC had the sole and exclusive power to pass upon cases before it, subject to extension by agreement of the parties."
the qualification of any candidate, and therefore, it has the correlative power to disqualify any
candidate in accordance with its guidelines.
[34]
This Court in Bautista v. Court of Appeals, interpreting Article 226 of the Labor Code,
For their part, private respondents Daya, et al., maintain that the Petition they filed before was explicit in declaring that the BLR has the original and exclusive jurisdiction on all inter-union
the DOLE-NCR Med-Arbiter questioning the disqualification order of the COMELEC and seeking and intra-union conflicts. We said that since Article 226 of the Labor Code has declared that the
the nullification of the 7 May 2003 election involves an intra-union dispute which is within the BLR shall have original and exclusive authority to act on all inter-union and intra-union conflicts,
jurisdiction of the BLR. They further claim that the COMELEC, in disqualifying them, mistakenly there should be no more doubt as to its jurisdiction. As defined, an intra-union conflict would refer
relied on a provision in the FLAMES CBL that addresses the expulsion of members from the union, to a conflict within or inside a labor union, while an inter-union controversy or dispute is one
[35]
and no expulsion proceedings were held against them. Finally, they underscore the finding of the occurring or carried on between or among unions. More specifically, an intra-union dispute is
appellate court that there was disenfranchisement among the general membership of FLAMES due defined under Section (z), Rule I of the Rules Implementing Book V of the Labor Code, viz:
to their wrongful disqualification which restricted the members choices of candidates. They
reiterate the conclusion of the Court of Appeals that had the COMELEC tabulated the votes cast in (z) Intra-Union Dispute refers to any conflict between and among
their favor, there would have been, at least, a basis for the declaration that they lost in the union members, and includes all disputes or grievances arising from any
elections. violation of or disagreement over any provision of the constitution and by-laws
of a union, including cases arising from chartering or affiliation of labor
Issues organizations or from any violation of the rights and conditions of union
membership provided for in the Code.
the jurisdictional requirement because it was not supported by at least thirty percent (30%) of the
members of the union. Section 1 of Rule XIV of the Implementing Rules of Book V mandates the
The controversy in the case at bar is an intra-union dispute. There is no question that this is one thirty percent (30%) requirement only in cases where the issue involves the entire membership of
which involves a dispute within or inside FLAMES, a labor union. At issue is the propriety of the the union, which is clearly not the case before us.The issue is obviously limited to the
disqualification of private respondents Daya, et al., by the FLAMES COMELEC in the 7 May disqualification from participation in the elections by particular union members.
2003 elections. It must also be stressed that even as the dispute involves allegations that private
respondents Daya, et al., sought the help of non-members of the union in their election campaign Having resolved the jurisdictional cobwebs in the instant case, it is now apt for this Court to
to the detriment of FLAMES, the same does not detract from the real character of the address the issue anent the disqualification of private respondents and the conduct of the 7 May
controversy. It remains as one which involves the grievance over the constitution and bylaws of a 2003 elections.
union, and it is a controversy involving members of the union. Moreover, the non-members of the
union who were alleged to have aided private respondents Daya, et al., are not parties in the On this matter, petitioners want this Court to consider the instant case as an exception to the rule
case. We are, therefore, unable to understand petitioners persistence in placing the controversy that the Supreme Court is not a trier of facts; hence, importuning that we make findings of fact
outside of the jurisdiction of the BLR. The law is very clear. It requires no further interpretation. The anew. It bears stressing that in a petition for review on certiorari, the scope of this Courts judicial
[43]
Petition which was initiated by private respondents Daya, et al., before the BLR was properly within review of decisions of the Court of Appeals is generally confined only to errors of law, and
its cognizance, it being an intra-union dispute. Indubitably, when private respondents Daya, et questions of fact are not entertained. We elucidated on our fidelity to this rule, and we said:
al., brought the case to the BLR, it was an invocation of the power and authority of the BLR to act Thus, only questions of law may be brought by the parties and passed upon by
on an intra-union conflict. this Court in the exercise of its power to review. Also, judicial review by this
Court does not extend to a reevaluation of the sufficiency of the evidence upon
[44]
After having settled the jurisdiction of the BLR, we proceed to determine if petitioners correctly which the proper labor tribunal has based its determination.
raised the argument that private respondents Daya, et al., prematurely sought the BLRs jurisdiction
on the ground that they failed to exhaust administrative remedies within the union. On this matter,
we affirm the findings of the Court of Appeals which upheld the application by the BLR Director of It is aphoristic that a re-examination of factual findings cannot be done through a petition for review
the exception to the rule of exhaustion of administrative remedies. on certiorari under Rule 45 of the Rules of Court because as earlier stated, this Court is not a trier
[45]
of facts; it reviews only questions of law. The Supreme Court is not duty-bound to analyze and
[46]
In this regard, this Court is emphatic that before a party is allowed to seek the intervention of the weigh again the evidence considered in the proceedings below. This is already outside the
court, it is a pre-condition that he should have availed of all the means of administrative processes province of the instant Petition for Certiorari. While there may be exceptions to this rule, petitioners
afforded him. Hence, if a remedy within the administrative machinery can still be resorted to by miserably failed to show why the exceptions should be applied here. With greater force must this
giving the administrative officer concerned every opportunity to decide on a matter that comes rule be applied in the instant case where the factual findings of the Med-Arbiter were affirmed by
within his jurisdiction when such remedy should be exhausted first before the courts judicial power the BLR Director, and then, finally, by the Court of Appeals. The findings below had sufficient
can be sought. The premature invocation of courts judicial intervention is fatal to ones cause of bases both in fact and in law. The uniform conclusion was that private respondents Daya, et
[36]
action. al., were wrongfully disqualified by the COMELEC; consequently, the FLAMES election should be
annulled.
[37]
Verily, there are exceptions to the applicability of the doctrine. Among the established
exceptions are: 1) when the question raised is purely legal; 2) when the administrative body is in On the issue of disqualification, there was a blatant misapplication by the COMELEC of the
[47]
estoppel; 3) when the act complained of is patently illegal; 4) when there is urgent need for judicial FLAMES CBL. As has been established ad nauseam, the provision relied upon by the
intervention; 5) when the claim involved is small; 6) when irreparable damage will be suffered; 7) COMELEC in disqualifying private respondents Daya, et al., applies to a case of expulsionof
when there is no other plain, speedy, and adequate remedy; 8) when strong public interest is members from the union.
involved; 9) when the subject of the proceeding is private land; 10) in quo
[38]
warranto proceedings; and 11) where the facts show that there was a violation of due In full, Article IV, Section 4 (a) (6) of the FLAMES CBL, provides, to wit:
[39]
process. As aptly determined by the BLR Director, private respondents Daya, et al., were
prejudiced by the disqualification order of the COMELEC. They endeavored to seek Section 4(a). Any member may be DISMISSED and/or EXPELLED from
[40]
reconsideration, but the COMELEC failed to act thereon. The COMELEC was also found to have the UNION, after due process and investigation, by a two-thirds (2/3) vote of
[41]
refused to receive their written protest. The foregoing facts sustain the finding that private the Executive Board, for any of the following causes:
respondents Daya, et al., were deprived of due process. Hence, it becomes incumbent upon
private respondents Daya, et al., to seek the aid of the BLR. To insist on the contrary is to render xxxx
[42]
their exhaustion of remedies within the union as illusory and vain. These antecedent
circumstances convince this Court that there was proper application by the Med-Arbiter of the (6) Acting in a manner harmful to the interest and welfare of
[48]
exception to the rule of exhaustion of administrative remedies, as affirmed by the BLR Director, the UNION and/or its MEMBERS.
and upheld by the Court of Appeals.

We cannot accept, and the Court of Appeals rightfully rejected, the contention of petitioners that We highlight five points, thus:
the private respondents Daya, et al.s complaint filed before the Med-Arbiter failed to comply with
First, Article IV, Section 4(a)(6) of the FLAMES CBL, embraces exclusively the case of dismissal
and/or expulsion of members from the union. Even a cursory reading of the provision does not tell
us that the same is to be automatically or directly applied in the disqualification of a candidate from
union elections, which is the matter at bar. It cannot be denied that the COMELEC erroneously SO ORDERED.
relied on Article IV, Section 4(a)(6) because the same does not contemplate the situation of private
respondents Daya, et al. The latter are not sought to be expelled or dismissed by the Executive
Board. They were brought before the COMELEC to be disqualified as candidates in the 7 May
2003 elections.

Second, the aforecited provision evidently enunciates with clarity the procedural course
that should be taken to dismiss and expel a member from FLAMES. The CBL is succinct in stating
that the dismissal and expulsion of a member from the union should be after due process and
investigation, the same to be exercised by two-thirds (2/3) vote of the Executive Board for any of
[49]
the causes mentioned therein. The unmistakable directive is that in cases of expulsion and
dismissal, due process must be observed as laid down in the CBL.

Third, nevertheless, even if we maintain a lenient stance and consider the applicability
of Article IV, Section 4(a)(6) in the disqualification of private respondents Daya, et al., from the
elections of 7 May 2003, still, the disqualification made by the COMELEC pursuant to the subject
provision was a rank disregard of the clear due process requirement embodied therein. Nowhere
do we find that private respondents Daya, et al. were investigated by the Executive Board. Neither
do we see the observance of the voting requirement as regards private respondents Daya, et al. In
all respects, they were denied due process.

Fourth, the Court of Appeals, the BLR Director, and the Med-Arbiter uniformly found that
due process was wanting in the disqualification order of the COMELEC. We are in accord with their
conclusion. If, indeed, there was a violation by private respondents Daya, et al., of the FLAMES
CBL that could be a ground for their expulsion and/or dismissal from the union, which in turn could
possibly be made a ground for their disqualification from the elections, the procedural requirements
for their expulsion should have been observed. In any event, therefore, whether the case involves
dismissal and/or expulsion from the union or disqualification from the elections, the proper
procedure must be observed. The disqualification ruled by the COMELEC against private
respondents Daya, et al., must not be allowed to abridge a clear procedural policy established in
the FLAMES CBL. If we uphold the COMELEC, we are countenancing a clear case of denial of due
process which is anathema to the Constitution of the Philippines which safeguards the right to due
process.

Fifth, from another angle, the erroneous disqualification of private respondents Daya, et
al., constituted a case of disenfranchisement on the part of the member-voters of FLAMES. By
wrongfully excluding them from the 7 May 2003 elections, the options afforded to the union
members were clipped. Hence, the mandate of the union cannot be said to have been rightfully
determined. The factual irregularities in the FLAMES elections clearly provide proper bases for the
annulment of the union elections of 7 May 2003.
On a final note, as it appears that the question of the qualifications of private
[50]
respondents Ong, et al. had been rendered moot and academic, we do not find any reason for
this Court to rule on the matter. As borne out by the records, the question had been laid to rest
[51]
even when the case was still before the Med-Arbiter.

WHEREFORE, the Petition is DENIED. The Decision of the Court of Appeals dated 17
June 2004, and its Resolution dated 10 June 2005 in CA-G.R. SP No. 83061
are AFFIRMED. Costs against petitioners.
the convention delegates allowed Atty. Montaos candidacy. He emerged victorious and was proclaimed as the
FIRST DIVISION National Vice-President.
[11]
ATTY. ALLAN S. MONTAO, G.R. No. 168583 On May 28, 2001, through a letter to the Chairman of FFW COMELEC, Atty. Verceles reiterated his protest
Petitioner, over Atty. Montaos candidacy which he manifested during the plenary session before the holding of the election
[12]
in the Convention. On June 18, 2001, Atty. Verceles sent a follow-up letter to the President of FFW
Present: requesting for immediate action on his protest.

CORONA, C. J., Chairperson, Proceedings before the Bureau of Labor Relations


- versus - VELASCO, JR.,
LEONARDO-DE CASTRO, On July 13, 2001, Atty. Verceles, as President of UEEA-FFW and officer of the Governing Board of FFW, filed
[13]
DEL CASTILLO, and before the BLR a petition for the nullification of the election of Atty. Montao as FFW National Vice-
PEREZ, JJ. President. He alleged that, as already ruled by the FFW COMELEC, Atty. Montao is not qualified to run for the
position because Section 76 of Article XIX of the FFW Constitution and By-Laws prohibits federation employees
ATTY. ERNESTO C. VERCELES, Promulgated: from sitting in its Governing Board. Claiming that Atty. Montaos premature assumption of duties and formal
[14]
Respondent. July 26, 2010 induction as vice-president will cause serious damage, Atty. Verceles likewise prayed for injunctive relief.
x-------------------------------------------------------------x
[15]
Atty. Montao filed his Comment with Motion to Dismiss on the grounds that the Regional Director of the
Department of Labor and Employment (DOLE) and not the BLR has jurisdiction over the case; that the filing of
DECISION the petition was premature due to the pending and unresolved protest before the FFW COMELEC; and that,
Atty. Verceles has no legal standing to initiate the petition not being the real party in interest.
Meanwhile, on July 16, 2001, the FFW COMELEC sent a letter to FFW National President, Bro.
DEL CASTILLO, J.: Ramon J. Jabar, in reference to the election protest filed before it by Atty. Verceles. In this correspondence,
which was used by Atty. Verceles as an additional annex to his petition before the BLR, the FFW COMELEC
The Federation/Unions Constitution and By-Laws govern the relationship between and among its intimated its firm stand that Atty. Montaos candidacy contravenes the FFWs Constitution, by stating:
members. They are akin to ordinary contracts in that their provisions have obligatory force upon the federation/
union and its member. What has been expressly stipulated therein shall be strictly binding on both. At the time Atty. Verceles lodged his opposition in the floor before the holding of the
election, we, the Comelec unanimously made the decision that Atty. Montao and others
[1]
By this Petition for Review on Certiorari, petitioner Atty. Allan S. Montao (Atty. Montao) assails the are disqualified and barred from running for any position in the election of the Federation,
[2] [3]
Decision dated May 28, 2004 and Resolution dated June 28, 2005 of the Court of Appeals (CA) in CA-G.R. in view of pertinent provisions of the FFW Constitution.
SP No. 71731, which declared as null and void his election as the National Vice-President of Federation of Free
[4]
Workers (FFW), thereby reversing the May 8, 2002 Decision of the Bureau of Labor Relations (BLR) in BLR- Our decision which we repeated several times as final was however further deliberated
O-TR-66-7-13-01. upon by the body, which then gave the go signal for Atty. Montaos candidacy
notwithstanding our decision barring him from running and despite the fact that several
Factual Antecedents delegates took the floor [stating] that the convention body is not a constitutional
convention body and as such could not qualify to amend the FFWs present constitution
[5]
Atty. Montao worked as legal assistant of FFW Legal Center on October 1, 1994. Subsequently, he joined the to allow Atty. Montao to run.
union of rank-and-file employees, the FFW Staff Association, and eventually became the employees union
[6]
president in July 1997. In November 1998, he was likewise designated officer-in-charge of FFW Legal Center. We would like to reiterate what we stated during the plenary session that our
decision was final in view of the cited pertinent provisions of the FFW Constitution and
st
During the 21 National Convention and Election of National Officers of FFW, Atty. Montao was nominated for we submit that the decision of the convention body in allowing Atty. Montaos candidacy
[7]
the position of National Vice-President. In a letter dated May 25, 2001, however, the Commission on Election is not valid in view of the fact that it runs counter to the FFW Constitution and the body at
(FFW COMELEC), informed him that he is not qualified for the position as his candidacy violates the 1998 FFW that time was not acting as a Constitutional Convention body empowered to amend the
[8] [9]
Constitution and By-Laws, particularly Section 76 of Article XIX and Section 25 (a) of Article VIII, both in FFW Constitution on the spot.
[10]
Chapter II thereof. Atty. Montao thus filed an Urgent Motion for Reconsideration praying that his name be
included in the official list of candidates. Our having conducted the election does not depart from the fact that we did not change
our decision disqualifying candidates such as Atty. Allan S. Montao, and others from
Election ensued on May 26-27, 2001 in the National Convention held at Subic International running. The National Convention as a co-equal constitutional body of the Comelec was
Hotel, Olongapo City. Despite the pending motion for reconsideration with the FFW COMELEC, and strong not given the license nor the authority to violate the Constitution. It therefore, cannot
opposition and protest of respondent Atty. Ernesto C. Verceles (Atty. Verceles), a delegate to the convention reverse the final decision of the Comelec with regard to the candidacy of Atty. Allan
[16]
and president of University of the East Employees Association (UEEA-FFW) which is an affiliate union of FFW, Montao and other disqualified candidates.
THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION,
[17]
The BLR, in its Order dated August 20, 2001, did not give due course to Atty. Montaos Motion to Dismiss but AMOUNTING TO LACK AND/OR EXCESS OF JURISDICTION, IN RENDERING
ordered the latter to submit his answer to the petition pursuant to the rules. The parties thereafter submitted their THE ASSAILED DECISION, IN THAT:
respective pleadings and position papers.
A.) THE SOLE GROUND USED AND/OR INVOKED IN
[18]
On May 8, 2002, the BLR rendered a Decision dismissing the petition for lack of merit. While it upheld its GRANTING THE PETITION A QUO WAS NOT EVEN RAISED
jurisdiction over the intra-union dispute case and affirmed, as well, Atty. Verceles legal personality to institute the AND/OR INVOKED BY PETITIONER;
action as president of an affiliate union of FFW, the BLR ruled that there were no grounds to hold Atty. Montao
unqualified to run for National Vice-President of FFW. It held that the applicable provision in the FFW B.) THE DECLARATION THAT FFW STAFF ASSOCIATION IS
Constitution and By-Laws to determine whether one is qualified to run for office is not Section 76 of Article NOT A LEGITIMATE LABOR ORGANIZATION, WITHOUT
[19] [20]
XIX but Section 26 of Article VIII thereof. The BLR opined that there was sufficient compliance with the GIVING SAID ORGANIZATION A DAY IN COURT AMOUNTS TO
requirements laid down by this applicable provision and, besides, the convention delegates unanimously A COLLATERAL ATTACK PROSCRIBED UNDER THE LAW;
decided that Atty. Montao was qualified to run for the position of National Vice-President. AND

Atty. Verceles filed a Motion for Reconsideration but it was denied by the BLR. C.) THE COURT OF APPEALS FAILED AND/OR REFUSED TO
PASS UPON OTHER LEGAL ISSUES WHICH HAD BEEN
Proceedings before the Court of Appeals TIMELY RAISED, SPECIFICALLY ON THE PREMATURITY OF
THE COMPLAINT AND THE LACK OF CERTIFICATION
[21]
Atty. Verceles thus elevated the matter to the CA via a petition for certiorari, arguing that the Convention had AGAINST FORUM SHOPPING OF THE PETITION A QUO.
no authority under the FFW Constitution and By-Laws to overrule and set aside the FFW COMELECs Decision
rendered pursuant to the latters power to screen candidates. II.
THE COURT OF APPEALS ERRED IN UPHOLDING THE EXERCISE OF
On May 28, 2004, the CA set aside the BLRs Decision. While it agreed that jurisdiction was properly lodged JURISDICTION BY HEREIN RESPONDENT BUREAU AND IN NOT ORDERING
with the BLR, that Atty. Verceles has legal standing to institute the petition, and that the applicable provision of THE DISMISSAL OF THE CASE, DESPITE EXPRESS PROVISION OF LAW
FFW Constitution and By-Laws is Section 26 of Article VIII and not Section 76 of Article XIX, the CA however GRANTING SAID JURISDICTION OVER CASES INVOLVING PROTESTS AND
ruled that Atty. Montao did not possess the qualification requirement under paragraph (d) of Section 26 that PETITIONS FOR ANNULMENT OF RESULTS OF ELECTIONS TO THE REGIONAL
candidates must be an officer or member of a legitimate labor organization. According to the CA, since Atty. DIRECTORS OF THE DEPARTMENT OF LABOR AND EMPLOYMENT.
Montao, as legal assistant employed by FFW, is considered as confidential employee, consequently, he is
ineligible to join FFW Staff Association, the rank-and-file union of FFW. The CA, thus, granted the petition and III.
nullified the election of Atty. Montao as FFW National Vice-President. IN THE ALTERNATIVE, THE COURT OF APPEALS LIKEWISE ERRED IN NOT
ORDERING THE DISMISSAL OF THE PETITION A QUO, IN THAT:
Atty. Montao moved for reconsideration claiming that the CA seriously erred in granting Atty. Verceles petition
on the ground that FFW Staff Association, of which he is an officer and member, is not a legitimate labor A.) THE FILING OF THE PETITION FOR
organization. He asserted that the legitimacy of the union was never raised as an issue. Besides, the NULLIFICATION OF THE RESULT OF ELECTION IS
declaration of the CA that FFW Staff Association is not a legitimate labor organization amounts to a collateral PREMATURE, IN VIEW OF PENDENCY OF HEREIN
attack upon its legal personality, which is proscribed by law. Atty. Montao also reiterated his allegations of lack RESPONDENT ATTY. VERCELES PROTEST BEFORE
of jurisdiction and lack of cause of action due to a pending protest. In addition, he claimed violation of the THE COMMISSION ON ELECTION OF THE FEDERATION
mandatory requirement on certification against forum shopping and mootness of the case due to the OF FREE WORKERS (FFW COMELEC) AT THE TIME OF
appointment of Atty. Verceles as Commissioner of the National Labor Relations Commission (NLRC), thereby THE FILING OF THE SAID PETITION, HENCE, HE HAS NO
divesting himself of interest in any matters relating to his affiliation with FFW. CAUSE OF ACTION; AND
Believing that it will be prejudiced by the CA Decision since its legal existence was put at stake, the FFW Staff
Association, through its president, Danilo A. Laserna, sought intervention. B.) HEREIN RESPONDENT ATTY. VERCELES
HAS VIOLATED SECTION 5, RULE 7 OF THE 1997 RULES
[22] [23]
On June 28, 2005, the CA issued a Resolution denying both Atty. Montaos motion for reconsideration and ON CIVIL PROCEDURE, AS HIS PETITION A QUO HAS NO
[24]
FFW Staff Associations motion for intervention/clarification. CERTIFICATION AGAINST FORUM SHOPPING, WHICH IS
A MANDATORY REQUIREMENT. IT IS ALSO IN UTTER
Issues DISREGARD AND IN GROSS VIOLATION OF SUPREME
COURT CIRCULAR NO. 04-94.
Hence, this petition anchored on the following grounds:
IV.
I. FINALLY, ASSUMING ARGUENDO THAT HEREIN RESPONDENT BUREAU
ACTED WITH JURISDICTION OVER THE CASE; AND ASSUMING
FURTHER THAT HEREIN RESPONDENT ATTY. VERCELES HAS A CAUSE OF The matter of venue becomes problematic when the intra-union dispute involves a
ACTION, DESPITE THE PENDENCY OF HIS PROTEST BEFORE FFWS federation, because the geographical presence of a federation may encompass more
COMELEC AT THE TIME HE FILED HIS PETITION A QUO; AND ASSUMING than one administrative region. Pursuant to its authority under Article 226, this Bureau
FINALLY, THAT HEREIN RESPONDENT ATTY. VERCELES BE EXCUSED IN exercises original jurisdiction over intra-union disputes involving federations. It is well-
DISREGARDING THE MANDATORY REQUIREMENT ON CERTIFICATION settled that FFW, having local unions all over the country, operates in more than one
AGAINST FORUM SHOPPING WHICH WAS TIMELY OBJECTED TO, THE COURT administrative region. Therefore, this Bureau maintains original and exclusive jurisdiction
OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION, AMOUNTING TO over disputes arising from any violation of or disagreement over any provision of its
[30]
LACK AND/OR EXCESS OF JURISDICTION, IN NOT ORDERING THE DISMISSAL constitution and by-laws.
OF THE CASE FOR HAVING BEEN RENDERED MOOT AND ACADEMIC BY A
SUPERVENING EVENT THAT WAS, WHEN HEREIN RESPONDENT ATTY.
VERCELES SOUGHT APPOINTMENT AND WAS APPOINTED AS The petition to annul Atty. Montaos election as VP
COMMISSIONER OF THE NATIONAL LABOR RELATIONS COMMISSION (NLRC), was not prematurely filed.
THUS, DIVESTING HIMSELF WITH ANY INTEREST WITH MATTERS RELATING
TO HIS FORMER MEMBERSHIP AND AFFILIATION WITH THE FEDERATION OF
FREE WORKERS (FFW), HENCE, HE IS NO LONGER A REAL PARTY IN There is likewise no merit to petitioners argument that the petition should have been immediately
INTEREST, AS HE DOES NOT STAND TO BE INJURED OR BENEFITED BY THE dismissed due to a pending and unresolved protest before the FFW COMELEC pursuant to Section 6, Rule
[25] [31]
JUDGMENT IN THE INSTANT CASE. XV, Book V of the Omnibus Rules Implementing the Labor Code.

Atty. Montao contends that the CA gravely erred in upholding the jurisdiction of the BLR; in not declaring as It is true that under the Implementing Rules, redress must first be sought within the organization itself
premature the petition in view of the pending protest before FFW COMELEC; in not finding that the petition in accordance with its constitution and by-laws. However, this requirement is not absolute but yields to
[32]
violated the rule on non-forum shopping; in not dismissing the case for being moot in view of the appointment of exception under varying circumstances. In the case at bench, Atty. Verceles made his protest over Atty.
Atty. Verceles as NLRC Commissioner; and in granting the petition to annul his election as FFW National Vice- Montaos candidacy during the plenary session before the holding of the election proceedings. The FFW
President on the ground that FFW Staff Association is not a legitimate labor organization. COMELEC, notwithstanding its reservation and despite objections from certain convention delegates, allowed
Atty. Montaos candidacy and proclaimed him winner for the position. Under the rules, the committee on election
Our Ruling shall endeavor to settle or resolve all protests during or immediately after the close of election proceedings and
any protest left unresolved shall be resolved by the committee within five days after the close of the election
[33]
The petition is devoid of merit. proceedings. A day or two after the election, Atty. Verceles made his written/formal protest over Atty. Montaos
candidacy/proclamation with the FFW COMELEC. He exhausted the remedies under the constitution and by-
The BLR has jurisdiction over intra-union disputes laws to have his protest acted upon by the proper forum and even asked for a formal hearing on the
involving a federation. matter. Still, the FFW COMELEC failed to timely act thereon. Thus, Atty. Verceles had no other recourse but to
take the next available remedy to protect the interest of the union he represents as well as the whole federation,
especially so that Atty. Montao, immediately after being proclaimed, already assumed and started to perform
We find no merit in petitioners claim that under Section 6 of Rule the duties of the position. Consequently, Atty. Verceles properly sought redress from the BLR so that the right to
[26] [27]
XV in relation to Section 1 of Rule XIV of Book V of the Omnibus Rules Implementing the Labor Code, it is due process will not be violated. To insist on the contrary is to render the exhaustion of remedies within the
[34]
the Regional Director of the DOLE and not the BLR who has jurisdiction over election protests. union as illusory and vain.
[28]
Section 226 of the Labor Code clearly provides that the BLR and the Regional Directors of DOLE have The allegation regarding certification against forum
concurrent jurisdiction over inter-union and intra-union disputes. Such disputes include the conduct or shopping was belatedly raised.
[29]
nullification of election of union and workers association officers. There is, thus, no doubt as to the BLRs
jurisdiction over the instant dispute involving member-unions of a federation arising from disagreement over the
provisions of the federations constitution and by-laws. Atty. Montao accuses Atty. Verceles of violating the rules on forum shopping. We note however that this issue
was only raised for the first time in Atty. Montaos motion for reconsideration of the Decision of the CA, hence,
We agree with BLRs observation that: the same deserves no merit. It is settled that new issues cannot be raised for the first time on appeal or on
[35]
motion for reconsideration. While this allegation is related to the ground of forum shopping alleged by Atty.
Rule XVI lays down the decentralized intra-union dispute settlement mechanism. Montao at the early stage of the proceedings, the latter, as a ground for the dismissal of actions, is separate and
[36]
Section 1 states that any complaint in this regard shall be filed in the Regional Office distinct from the failure to submit a proper certificate against forum shopping.
where the union is domiciled. The concept of domicile in labor relations regulation is
equivalent to the place where the union seeks to operate or has established There is necessity to resolve the case despite the
a geographical presence for purposes of collective bargaining or for dealing with issues having become moot.
employers concerning terms and conditions of employment.
During the pendency of this case, the challenged term of office held and served by Atty. Montao expired in
2006, thereby rendering the issues of the case moot. In addition, Atty. Verceles appointment in 2003 as NLRC WHEREFORE, the petition is DENIED. The assailed May 28, 2004 Decision of the Court of Appeals in CA-
Commissioner rendered the case moot as such supervening event divested him of any interest in and affiliation G.R. SP No. 71731 nullifying the election of Atty. Allan S. Montao as FFW National Vice-President and the
[37]
with the federation in accordance with Article 213 of the Labor Code. However, in a number of cases, we still June 28, 2005 Resolution denying the Motion for Reconsideration are AFFIRMED.
delved into the merits notwithstanding supervening events that would ordinarily render the case moot, if the
issues are capable of repetition, yet evading review, as in this case. SO ORDERED.

As manifested by Atty. Verceles, Atty. Montao ran and won as FFW National President after his challenged
term as FFW National Vice-President had expired. It must be stated at this juncture that the legitimacy of Atty.
Montaos leadership as National President is beyond our jurisdiction and is not in issue in the instant case. The
only issue for our resolution is petitioners qualification to run as FFW National Vice-President during the May
26-27, 2001 elections. We find it necessary and imperative to resolve this issue not only to prevent further
repetition but also to clear any doubtful interpretation and application of the provisions of FFW Constitution &
By-laws in order to ensure credible future elections in the interest and welfare of affiliate unions of FFW.

Atty. Montao is not qualified to run as FFW National


Vice-President in view of the prohibition established in
Section 76, Article XIX of the 1998 FFW Constitution
and By-Laws.

Section 76, Article XIX of the FFW Constitution and By-laws provides that no member of the Governing Board
shall at the same time be an employee in the staff of the federation. There is no dispute that Atty. Montao, at the
time of his nomination and election for the position in the Governing Board, is the head
of FFW Legal Center and the President of FFW Staff Association. Even after he was elected, albeit challenged,
he continued to perform his functions as staff member of FFW and no evidence was presented to show that he
[38]
tendered his resignation. On this basis, the FFW COMELEC disqualified Atty. Montao. The BLR, however,
overturned FFW COMELECs ruling and held that the applicable provision is Section 26 of Article VIII. The CA
subsequently affirmed this ruling of the BLR but held Atty. Montao unqualified for the position for failing to meet
the requirements set forth therein.

We find that both the BLR and CA erred in their findings.

To begin with, FFW COMELEC is vested with authority and power, under the FFW Constitution and By-Laws,
to screen candidates and determine their qualifications and eligibility to run in the election and to adopt and
[39]
promulgate rules concerning the conduct of elections. Under the Rules Implementing the Labor Code, the
Committee shall have the power to prescribe rules on the qualification and eligibility of candidates and such
[40]
other rules as may facilitate the orderly conduct of elections. The Committee is also regarded as the final
[41]
arbiter of all election protests. From the foregoing, FFW COMELEC, undeniably, has sufficient authority to
adopt its own interpretation of the explicit provisions of the federations constitution and by-laws and unless it is
shown to have committed grave abuse of discretion, its decision and ruling will not be interfered with. The FFW
Constitution and By-laws are clear that no member of the Governing Board shall at the same time perform
functions of the rank-and-file staff. The BLR erred in disregarding this clear provision. The FFW COMELECs
ruling which considered Atty. Montaos candidacy in violation of the FFW Constitution is therefore correct.

We, thus, concur with the CA that Atty. Montao is not qualified to run for the position but not for failure to meet
the requirement specified under Section 26 (d) of Article VIII of FFW Constitution and By-Laws. We note that
the CAs declaration of the illegitimate status of FFW Staff Association is proscribed by law, owing to the
[42]
preclusion of collateral attack. We nonetheless resolve to affirm the CAs finding that Atty. Montao is
disqualified to run for the position of National Vice-President in view of the proscription in the FFW Constitution
and By-Laws on federation employees from sitting in its Governing Board. Accordingly, the election of Atty.
Montao as FFW Vice-President is null and void.
G.R. No. 78909 June 30, 1989 (P654,756.01), representing underpayment of wages and ecola to the THIRTY
SIX (36) employees of the said hospital as appearing in the attached Annex
"F" worksheets and/or whatever action equitable under the premises. (p.
MATERNITY CHILDREN'S HOSPITAL, represented by ANTERA L. DORADO,
99, Rollo)
President, petitioner,
vs.
THE HONORABLE SECRETARY OF LABOR AND THE REGIONAL DlRECTOR OF LABOR, Based on this inspection report and recommendation, the Regional Director issued an Order dated
REGION X, respondents. August 4, 1986, directing the payment of P723,888.58, representing underpayment of wages and
ECOLAs to all the petitioner's employees, the dispositive portion of which reads:

WHEREFORE, premises considered, respondent Maternity and Children


Hospital is hereby ordered to pay the above-listed complainants the total
MEDIALDEA, J.:
amount indicated opposite each name, thru this Office within ten (10) days
from receipt thereof. Thenceforth, the respondent hospital is also ordered to
This is a petition for certiorari seeking the annulment of the Decision of the respondent Secretary of pay its employees/workers the prevailing statutory minimum wage and
Labor dated September 24, 1986, affirming with modification the Order of respondent Regional allowance.
Director of Labor, Region X, dated August 4, 1986, awarding salary differentials and emergency
cost of living allowances (ECOLAS) to employees of petitioner, and the Order denying petitioner's
SO ORDERED. (p. 34, Rollo)
motion for reconsideration dated May 13, 1987, on the ground of grave abuse of discretion.

Petitioner appealed from this Order to the Minister of Labor and Employment, Hon. Augusto S.
Petitioner is a semi-government hospital, managed by the Board of Directors of the Cagayan de
Sanchez, who rendered a Decision on September 24, 1986, modifying the said Order in that
Oro Women's Club and Puericulture Center, headed by Mrs. Antera Dorado, as holdover
deficiency wages and ECOLAs should be computed only from May 23, 1983 to May 23, 1986, the
President. The hospital derives its finances from the club itself as well as from paying patients,
dispositive portion of which reads:
averaging 130 per month. It is also partly subsidized by the Philippine Charity Sweepstakes Office
and the Cagayan De Oro City government.
WHEREFORE, the August 29, 1986 order is hereby MODIFIED in that the
deficiency wages and ECOLAs should only be computed from May 23, 1983 to
Petitioner has forty-one (41) employees. Aside from salary and living allowances, the employees
May 23, 1986. The case is remanded to the Regional Director, Region X, for
are given food, but the amount spent therefor is deducted from their respective salaries (pp. 77-
recomputation specifying the amounts due each the complainants under each
78, Rollo).
of the applicable Presidential Decrees. (p. 40, Rollo)

On May 23, 1986, ten (10) employees of the petitioner employed in different capacities/positions
On October 24, 1986, the petitioner filed a motion for reconsideration which was denied by the
filed a complaint with the Office of the Regional Director of Labor and Employment, Region X, for
Secretary of Labor in his Order dated May 13, 1987, for lack of merit (p. 43 Rollo).
underpayment of their salaries and ECOLAS, which was docketed as ROX Case No. CW-71-86.

The instant petition questions the all-embracing applicability of the award involving salary
On June 16, 1986, the Regional Director directed two of his Labor Standard and Welfare Officers
differentials and ECOLAS, in that it covers not only the hospital employees who signed the
to inspect the records of the petitioner to ascertain the truth of the allegations in the complaints (p.
complaints, but also those (a) who are not signatories to the complaint, and (b) those who were no
98, Rollo). Payrolls covering the periods of May, 1974, January, 1985, November, 1985 and May,
longer in the service of the hospital at the time the complaints were filed.
1986, were duly submitted for inspection.

Petitioner likewise maintains that the Order of the respondent Regional Director of Labor, as
On July 17, 1986, the Labor Standard and Welfare Officers submitted their report confirming that
affirmed with modifications by respondent Secretary of Labor, does not clearly and distinctly state
there was underpayment of wages and ECOLAs of all the employees by the petitioner, the
the facts and the law on which the award was based. In its "Rejoinder to Comment", petitioner
dispositive portion of which reads:
further questions the authority of the Regional Director to award salary differentials and ECOLAs to
private respondents, (relying on the case of Encarnacion vs. Baltazar, G.R. No. L-16883, March
IN VIEW OF THE FOREGOING, deficiency on wage and ecola as verified and 27, 1961, 1 SCRA 860, as authority for raising the additional issue of lack of jurisdiction at any
confirmed per review of the respondent payrolls and interviews with the stage of the proceedings, p. 52, Rollo), alleging that the original and exclusive jurisdiction over
complainant workers and all other information gathered by the team, it is money claims is properly lodged in the Labor Arbiter, based on Article 217, paragraph 3 of the
respectfully recommended to the Honorable Regional Director, this office, that Labor Code.
Antera Dorado, President be ORDERED to pay the amount of SIX HUNDRED
FIFTY FOUR THOUSAND SEVEN HUNDRED FIFTY SIX & 01/100
The primary issue here is whether or not the Regional Director had jurisdiction over the case and if Art. 216. Jurisdiction of the Commission. — The Commission shall have
so, the extent of coverage of any award that should be forthcoming, arising from his visitorial and exclusive appellate jurisdiction over all cases decided by the Labor Arbiters
enforcement powers under Article 128 of the Labor Code. The matter of whether or not the and compulsory arbitrators.
decision states clearly and distinctly statement of facts as well as the law upon which it is based,
becomes relevant after the issue on jurisdiction has been resolved.
The Labor Arbiters shall have exclusive jurisdiction to hear and decide the
following cases involving all workers whether agricultural or non-agricultural.
This is a labor standards case, and is governed by Art. 128-b of the Labor Code, as amended by
E.O. No. 111. Labor standards refer to the minimum requirements prescribed by existing laws,
xxx xxx xxx
rules, and regulations relating to wages, hours of work, cost of living allowance and other monetary
and welfare benefits, including occupational, safety, and health standards (Section 7, Rule I, Rules
on the Disposition of Labor Standards Cases in the Regional Office, dated September 16, (c) All money claims of workers, involving non-payment or
1
1987). Under the present rules, a Regional Director exercises both visitorial and enforcement underpayment of wages, overtime compensation,
power over labor standards cases, and is therefore empowered to adjudicate money separation pay, maternity leave and other money claims
claims, providedthere still exists an employer-employee relationship, and the findings of the arising from employee-employer relations, except claims
regional office is not contested by the employer concerned. for workmen's compensation, social security and
medicare benefits;
Prior to the promulgation of E.O. No. 111 on December 24, 1986, the Regional Director's authority
over money claims was unclear. The complaint in the present case was filed on May 23, 1986 (d) Violations of labor standard laws;
when E.O. No. 111 was not yet in effect, and the prevailing view was that stated in the case
of Antonio Ong, Sr. vs. Henry M. Parel, et al., G.R. No. 76710, dated December 21, 1987, thus:
xxx xxx xxx

. . . the Regional Director, in the exercise of his visitorial and enforcement


(Emphasis supplied)
powers under Article 128 of the Labor Code, has no authority to award money
claims, properly falling within the jurisdiction of the labor arbiter. . . .
The Regional Director exercised visitorial rights only under then Article 127 of the Code as follows:
. . . If the inspection results in a finding that the employer has violated certain
labor standard laws, then the regional director must order the necessary ART. 127. Visitorial Powers. — The Secretary of Labor or his duly authorized
rectifications. However, this does not include adjudication of money claims, representatives, including, but not restricted, to the labor inspectorate, shall
clearly within the ambit of the labor arbiter's authority under Article 217 of the have access to employers' records and premises at any time of the day or
Code. night whenever work is being undertaken therein, and the right to copy
therefrom, to question any employee and investigate any fact, condition or
matter which may be necessary to determine violations or in aid in the
The Ong case relied on the ruling laid down in Zambales Base Metals Inc. vs. The Minister of
Labor, et al., (G.R. Nos. 73184-88, November 26, 1986, 146 SCRA 50) that the "Regional Director enforcement of this Title and of any Wage Order or regulation issued pursuant
to this Code.
was not empowered to share in the original and exclusive jurisdiction conferred on Labor Arbiters
by Article 217."
With the promulgation of PD 850, Regional Directors were given enforcement powers, in
addition to visitorial powers. Article 127, as amended, provided in part:
We believe, however, that even in the absence of E. O. No. 111, Regional Directors already had
enforcement powers over money claims, effective under P.D. No. 850, issued on December 16,
1975, which transferred labor standards cases from the arbitration system to the enforcement SEC. 10. Article 127 of the Code is hereby amended to read as follows:
system.
Art. 127. Visitorial and enforcement powers. —
To clarify matters, it is necessary to enumerate a series of rules and provisions of law on the
disposition of labor standards cases.
xxx xxx xxx

Prior to the promulgation of PD 850, labor standards cases were an exclusive function of labor
arbiters, under Article 216 of the then Labor Code (PD No. 442, as amended by PD 570-a), which (b) The Secretary of Labor or his duly
read in part: authorized representatives shall have
the power to order and administer,
after due notice and POLICY INSTRUCTIONS NO. 6
hearing, compliance with the labor
standards provisions of this Code
TO: All Concerned
based on the findings of labor
regulation officers or industrial safety
engineers made in the course of SUBJECT: DISTRIBUTION OF JURISDICTION OVER LABOR CASES
inspection, and to issue writs of
execution to the appropriate authority
for the enforcement of their order. xxx xxx xxx

1. The following cases are under the exclusive original


xxx xxx xxx
jurisdiction of the Regional Director.

Labor Arbiters, on the other hand, lost jurisdiction over labor standards cases. Article 216, as then
a) Labor standards cases arising from
amended by PD 850, provided in part:
violations of labor standard
laws discovered in the course of
SEC. 22. Article 216 of the Code is hereby amended to read as follows: inspection or complaints where
employer-employee relations still
exist;
Art. 216. Jurisdiction of Labor Arbiters and the
Commission. — (a) The Labor Arbiters shall
have exclusive jurisdiction to hear and decide the xxx xxx xxx
following cases involving all workers, whether agricultural
or non-agricultural:
2. The following cases are under the exclusive original
jurisdiction of the Conciliation Section of the Regional
xxx xxx xxx Office:

(3) All money claims of workers a) Labor standards cases where


involving non-payment or employer-employee
underpayment of wages, overtime or relations no longer exist;
premium compensation, maternity or
service incentive leave, separation
xxx xxx xxx
pay and other money claims arising
from employer-employee relations,
except claims for employee's 6. The following cases are certifiable to the Labor Arbiters:
compensation, social security and
medicare benefits and as otherwise
provided in Article 127 of this Code. a) Cases not settled by the
Conciliation Section of the Regional
Office, namely:
xxx xxx xxx
1) labor standard cases where
(Emphasis supplied) employer-employee relations no
longer exist;
Under the then Labor Code therefore (PD 442 as amended by PD 570-a, as further amended by
PD 850), there were three adjudicatory units: The Regional Director, the Bureau of Labor Relations xxx xxx xxx
and the Labor Arbiter. It became necessary to clarify and consolidate all governing provisions on
2
jurisdiction into one document. On April 23, 1976, MOLE Policy Instructions No. 6 was issued,
and provides in part (on labor standards cases) as follows: (Emphasis supplied)
MOLE Policy Instructions No. 7 (undated) was likewise subsequently issued, enunciating the the Regional Office of the Ministry of Labor. "Conciliable
rationale for, and the scope of, the enforcement power of the Regional Director, the first and cases" which were thus previously under the jurisdiction of
second paragraphs of which provide as follows: the defunct Conciliation Section of the Regional Office for
purposes of conciliation or amicable settlement, became
immediately assignable to the Arbitration Branch for
POLICY INSTRUCTIONS NO. 7
joint conciliation and compulsory arbitration. In addition,
the Labor Arbiter had jurisdiction even over termination
TO: All Regional Directors and labor-standards cases that may be assigned to them
for compulsory arbitration by the Director of the Regional
Office. PD 1391 merged conciliation and compulsory
SUBJECT: LABOR STANDARDS CASES
arbitration functions in the person of the Labor Arbiter.
The procedure governing the disposition of cases at the
Under PD 850, labor standards cases have been taken from the arbitration Arbitration Branch paralleled those in the Special Task
system and placed under the enforcement system, except where a) questions Force and Field Services Division, with one major
of law are involved as determined by the Regional Director, b) the amount exception: the Labor Arbiter exercised full and
involved exceeds P100,000.00 or over 40% of the equity of the employer, untrammelled authority in the disposition of the case,
whichever is lower, c) the case requires evidentiary matters not disclosed or particularly in the substantive aspect, his decisions and
3
verified in the normal course of inspection, or d) there is no more employer- orders subject to review only on appeal to the NLRC.
employee relationship.
3. MOLE Policy Instructions No. 37 — Because of the
The purpose is clear: to assure the worker the rights and benefits due to him seemingly overlapping functions as a result of PD 1391,
under labor standards laws without having to go through arbitration. The MOLE Policy Instructions No. 37 was issued on October
worker need not litigate to get what legally belongs to him. The whole 7, 1978, and provided in part:
enforcement machinery of the Department of Labor exists to insure its
expeditious delivery to him free of charge. (Emphasis supplied)
POLICY INSTRUCTIONS NO. 37

Under the foregoing, a complaining employee who was denied his rights and benefits due him TO: All Concerned
under labor standards law need not litigate. The Regional Director, by virtue of his enforcement
power, assured "expeditious delivery to him of his rights and benefits free of charge", provided of
course, he was still in the employ of the firm. SUBJECT: ASSIGNMENT OF CASES TO LABOR ARBITERS

After PD 850, Article 216 underwent a series of amendments (aside from being re-numbered as Pursuant to the provisions of Presidential Decree No.
Article 217) and with it a corresponding change in the jurisdiction of, and supervision over, the 1391 and to insure speedy disposition of labor cases, the
Labor Arbiters: following guidelines are hereby established for the
information and guidance of all concerned.
1. PD 1367 (5-1-78) — gave Labor Arbiters exclusive
jurisdiction over unresolved issues in collective 1. Conciliable Cases.
bargaining, etc., and those cases arising from employer-
employee relations duly indorsed by the Regional
Cases which are conciliable per se i.e., (a) labor
Directors. (It also removed his jurisdiction over moral or
standards cases where employer-employee
other damages) In other words, the Labor Arbiter
relationship no longer exists; (b) cases involving deadlock
entertained cases certified to him. (Article 228, 1978
in collective bargaining, except those falling under P.D.
Labor Code.)
823, as amended; (c) unfair labor practice cases; and (d)
overseas employment cases, except those involving
2. PD 1391 (5-29-78) — all regional units of the National overseas seamen, shall be assigned by the Regional
Labor Relations Commission (NLRC) were integrated into Director to the Labor Arbiter for conciliation and arbitration
the Regional Offices Proper of the Ministry of Labor; without coursing them through the conciliation section of
effectively transferring direct administrative control and the Regional Office.
supervision over the Arbitration Branch to the Director of
2. Labor Standards Cases. Parel (supra) and the Zambales Base Metals, Inc. vs. TheMinister of Labor (supra) cases, a
Regional Director is precluded from adjudicating money claims on the ground that this is an
exclusive function of the Labor Arbiter under Article 217 of the present Code.
Cases involving violation of labor standards laws where
employer- employee relationship still exists shall be
4
assigned to the Labor Arbiters where: On August 4, 1986, when the order was issued, Article 128(b) read as follows:

a) intricate questions of law are (b) The Minister of Labor or his duly authorized
involved; or representatives shall have the power to order and
administer, after due notice and hearing, compliance with
the labor standards provisions of this Code based on the
b) evidentiary matters not disclosed
findings of labor regulation officers or industrial safety
or verified in the normal course of
engineers made in the course of inspection, and to issue
inspection by labor regulations
writs of execution to the appropriate authority for the
officers are required for their proper
enforcement of their order, except in cases where the
disposition.
employer contests the findings of the labor regulations
officer and raises issues which cannot be resolved without
3. Disposition of Cases. considering evidentiary matters that are not verifiable in
the normal course of inspection. (Emphasis supplied)
When a case is assigned to a Labor Arbiter, all issues
raised therein shall be resolved by him including those On the other hand, Article 217 of the Labor Code as amended by P.D. 1691, effective May 1, 1980;
which are originally cognizable by the Regional Director to Batas Pambansa Blg. 130, effective August 21, 1981; and Batas Pambansa Blg. 227, effective
avoid multiplicity of proceedings. In other words, the whole June 1, 1982, inter alia, provides:
case, and not merely issues involved therein, shall be
assigned to and resolved by him.
ART. 217. Jurisdiction of Labor Arbiters and the Commission. — (a) The Labor
Arbiters shall have the original and exclusive jurisdiction to hear and decide
xxx xxx xxx within thirty (30) working days after submission of the case by the parties for
decision, the following cases involving all workers, whether agricultural or non-
agricultural:
(Emphasis supplied)

1. Unfair labor practice cases;


4. PD 1691(5-1-80) — original and exclusive jurisdiction
over unresolved issues in collective bargaining and money
claims, which includes moral or other damages. 2. Those that workers may file involving wages, hours of
work and other terms and conditions of employment;
Despite the original and exclusive jurisdiction of labor arbiters over money
claims, however, the Regional Director nonetheless retained his enforcement 3. All money claims of workers, including those based on
power, and remained empowered to adjudicate uncontested money claims. non-payment or underpayment of wages, overtime
compensation, separation pay and other benefits provided
by law or appropriate agreement, except claims for
5. BP 130 (8-21-8l) — strengthened voluntary arbitration. employees' compensation, social security, medicare and
The decree also returned the Labor Arbiters as part of the
maternity benefits;
NLRC, operating as Arbitration Branch thereof.

4. Cases involving household services; and


6. BP 227(6-1- 82) — original and exclusive jurisdiction
over questions involving legality of strikes and lock-outs.
5. Cases arising from any violation of Article 265 of this
Code, including questions involving the legality of strikes
The present petition questions the authority of the Regional Director to issue the Order, dated
and lock-outs. (Emphasis supplied)
August 4, 1986, on the basis of his visitorial and enforcement powers under Article 128 (formerly
Article 127) of the present Labor Code. It is contended that based on the rulings in the Ong vs.
The Ong and Zambales cases involved workers who were still connected with the company. Note further the second paragraph of Policy Instructions No. 7 indicating that the transfer of labor
However, in the Ong case, the employer disputed the adequacy of the evidentiary foundation standards cases from the arbitration system to the enforcement system is
(employees' affidavits) of the findings of the labor standards inspectors while in the Zambales case,
the money claims which arose from alleged violations of labor standards provisions were not
. . to assure the workers the rights and benefits due to him under labor
discovered in the course of normal inspection. Thus, the provisions of MOLE Policy Instructions
standard laws, without having to go through arbitration. . .
Nos. 6, (Distribution of Jurisdiction Over Labor Cases) and 37 (Assignment of Cases to Labor
Arbiters) giving Regional Directors adjudicatory powers over uncontested money claims discovered
in the course of normal inspection, provided an employer-employee relationship still exists, are so that
inapplicable.
. . the workers would not litigate to get what legally belongs to him. .. ensuring
In the present case, petitioner admitted the charge of underpayment of wages to workers still in its delivery . . free of charge.
employ; in fact, it pleaded for time to raise funds to satisfy its obligation. There was thus no contest
against the findings of the labor inspectors.
Social justice legislation, to be truly meaningful and rewarding to our workers, must not be
hampered in its application by long-winded arbitration and litigation. Rights must be asserted and
Barely less than a month after the promulgation on November 26, 1986 of the Zambales Base benefits received with the least inconvenience. Labor laws are meant to promote, not defeat, social
5
Metals case, Executive Order No. 111 was issued on December 24, 1986, amending Article justice.
128(b) of the Labor Code, to read as follows:
This view is in consonance with the present "Rules on the Disposition of Labor Standard Cases in
7
(b) THE PROVISIONS OF ARTICLE 217 OF THIS CODE the Regional Offices " issued by the Secretary of Labor, Franklin M. Drilon on September 16,
TO THE CONTRARY NOTWITHSTANDING AND IN 1987.
CASES WHERE THE RELATIONSHIP OF EMPLOYER-
EMPLOYEE STILL EXISTS, the Minister of Labor and
Thus, Sections 2 and 3 of Rule II on "Money Claims Arising from Complaint Routine Inspection",
Employment or his duly authorized representatives shall
have the power to order and administer, after due notice provide as follows:
and hearing, compliance with the labor standards
provisions of this Code AND OTHER LABOR Section 2. Complaint inspection. — All such complaints shall immediately be
LEGISLATION based on the findings of labor regulation forwarded to the Regional Director who shall refer the case to the appropriate
officers or industrial safety engineers made in the course unit in the Regional Office for assignment to a Labor Standards and Welfare
of inspection, and to issue writs of execution to the Officer (LSWO) for field inspection. When the field inspection does not
appropriate authority for the enforcement of their orders, produce the desired results, the Regional Director shall summon the parties for
except in cases where the employer contests the findings summary investigation to expedite the disposition of the case. . . .
of the labor regulation officer and raises issues which
cannot be resolved without considering evidentiary
matters that are not verifiable in the normal course of Section 3. Complaints where no employer-employee relationship actually
inspection. (Emphasis supplied) exists. — Where employer-employee relationship no longer exists by reason of
the fact that it has already been severed, claims for payment of monetary
benefits fall within the exclusive and original jurisdiction of the labor arbiters. . .
As seen from the foregoing, EO 111 authorizes a Regional Director to order compliance by an . (Emphasis supplied)
employer with labor standards provisions of the Labor Code and other legislation. It is Our
considered opinion however, that the inclusion of the phrase, " The provisions of Article 217 of this
Code to the contrary notwithstanding and in cases where the relationship of employer-employee Likewise, it is also clear that the limitation embodied in MOLE Policy Instructions No. 7 to amounts
still exists" ... in Article 128(b), as amended, above-cited, merely confirms/reiterates the not exceeding P100,000.00 has been dispensed with, in view of the following provisions of pars.
enforcement adjudication authority of the Regional Director over uncontested money claims in (b) and (c), Section 7 on "Restitution", the same Rules, thus:
6
cases where an employer-employee relationship still exists.
xxx xxx xxx
Viewed in the light of PD 850 and read in coordination with MOLE Policy Instructions Nos. 6, 7 and
37, it is clear that it has always been the intention of our labor authorities to provide our workers (b) Plant-level restitutions may be effected for money
immediate access (when still feasible, as where an employer-employee relationship still exists) to claims not exceeding Fifty Thousand (P50,000.00). . . .
their rights and benefits, without being inconvenienced by arbitration/litigation processes that prove
to be not only nerve-wracking, but financially burdensome in the long run.
(c) Restitutions in excess of the aforementioned amount . . It would be highly derogatory to the rights of the workers, if after
shall be effected at the Regional Office or at the worksite categorically finding the respondent hospital guilty of underpayment of wages
subject to the prior approval of the Regional Director. and ECOLAs, we limit the award to only those who signed the complaint to the
exclusion of the majority of the workers who are similarly situated. Indeed, this
would be not only render the enforcement power of the Minister of Labor and
which indicate the intention to empower the Regional Director to award money claims in excess of
Employment nugatory, but would be the pinnacle of injustice considering that it
P100,000.00; provided of course the employer does not contest the findings made, based on the
would not only discriminate but also deprive them of legislated benefits.
provisions of Section 8 thereof:

. . . (pp. 38-39, Rollo).


Section 8. Compromise agreement. — Should the parties arrive at an
agreement as to the whole or part of the dispute, said agreement shall be
reduced in writing and signed by the parties in the presence of the Regional This view is further bolstered by the provisions of Sec. 6, Rule II of the "Rules on the Disposition of
Director or his duly authorized representative. Labor Standards cases in the Regional Offices" (supra) presently enforced, viz:

E.O. No. 111 was issued on December 24, 1986 or three (3) months after the promulgation of the SECTION 6. Coverage of complaint inspection. — A complaint inspection shall
Secretary of Labor's decision upholding private respondents' salary differentials and ECOLAs on not be limited to the specific allegations or violations raised by the
September 24, 1986. The amendment of the visitorial and enforcement powers of the Regional complainants/workers but shall be a thorough inquiry into and verification of
Director (Article 128-b) by said E.O. 111 reflects the intention enunciated in Policy Instructions Nos. the compliance by employer with existing labor standards and shall cover all
6 and 37 to empower the Regional Directors to resolve uncontested money claims in cases where workers similarly situated. (Emphasis supplied)
an employer-employee relationship still exists. This intention must be given weight and entitled to
great respect. As held in Progressive Workers' Union, et. al. vs. F.P. Aguas, et. al. G.R. No. 59711-
However, there is no legal justification for the award in favor of those employees who were no
12, May 29, 1985, 150 SCRA 429:
longer connected with the hospital at the time the complaint was filed, having resigned therefrom in
1984, viz:
. . The interpretation by officers of laws which are entrusted to their
administration is entitled to great respect. We see no reason to detract from
1. Jean (Joan) Venzon (See Order, p. 33, Rollo)
this rudimentary rule in administrative law, particularly when later events have
2. Rosario Paclijan
proved said interpretation to be in accord with the legislative intent. ..
3. Adela Peralta
4. Mauricio Nagales
The proceedings before the Regional Director must, perforce, be upheld on the basis of Article 5. Consesa Bautista
128(b) as amended by E.O. No. 111, dated December 24, 1986, this executive order "to be 6. Teresita Agcopra
considered in the nature of a curative statute with retrospective application." (Progressive Workers' 7. Felix Monleon
Union, et al. vs. Hon. F.P. Aguas, et al. (Supra); M. Garcia vs. Judge A. Martinez, et al., G.R. No. 8. Teresita Salvador
L- 47629, May 28, 1979, 90 SCRA 331). 9. Edgar Cataluna; and

We now come to the question of whether or not the Regional Director erred in extending the award 10. Raymond Manija ( p.7, Rollo)
to all hospital employees. We answer in the affirmative.
The enforcement power of the Regional Director cannot legally be upheld in cases of separated
The Regional Director correctly applied the award with respect to those employees who signed the employees. Article 129 of the Labor Code, cited by petitioner (p. 54, Rollo) is not applicable as said
complaint, as well as those who did not sign the complaint, but were still connected with the article is in aid of the enforcement power of the Regional Director; hence, not applicable where the
hospital at the time the complaint was filed (See Order, p. 33 dated August 4, 1986 of the Regional employee seeking to be paid underpayment of wages is already separated from the service. His
Director, Pedrito de Susi, p. 33, Rollo). claim is purely a money claim that has to be the subject of arbitration proceedings and therefore
within the original and exclusive jurisdiction of the Labor Arbiter.
The justification for the award to this group of employees who were not signatories to the complaint
is that the visitorial and enforcement powers given to the Secretary of Labor is relevant to, and Petitioner has likewise questioned the order dated August 4, 1986 of the Regional Director in that it
exercisable over establishments, not over the individual members/employees, because what is does not clearly and distinctly state the facts and the law on which the award is based.
sought to be achieved by its exercise is the observance of, and/or compliance by, such
firm/establishment with the labor standards regulations. Necessarily, in case of an award resulting
We invite attention to the Minister of Labor's ruling thereon, as follows:
from a violation of labor legislation by such establishment, the entire members/employees should
benefit therefrom. As aptly stated by then Minister of Labor Augusto S. Sanchez:
Finally, the respondent hospital assails the order under appeal as null and void
because it does not clearly and distinctly state the facts and the law on which
the awards were based. Contrary to the pretensions of the respondent
hospital, we have carefully reviewed the order on appeal and we found that the
same contains a brief statement of the (a) facts of the case; (b) issues
involved; (c) applicable laws; (d) conclusions and the reasons therefor; (e)
specific remedy granted (amount awarded). (p. 40, Rollo)

ACCORDINGLY, this petition should be dismissed, as it is hereby DISMISSED, as regards all


persons still employed in the Hospital at the time of the filing of the complaint, but GRANTED as
regards those employees no longer employed at that time.

SO ORDERED.
G.R. No. 74621 February 7, 1990 This case originated from a complaint filed by private respondents against petitioner on September
21, 1984 with the Regional Office of the MOLE, Region XI, Davao City for non-compliance with the
provisions of Wage Order No. 5. After due healing the Regional Director rendered a decision dated
BROKENSHIRE MEMORIAL HOSPITAL, INC., petitioner,
November 16, 1984 in favor of private respondents. Judgment having become final and executory,
vs.
the Regional Director issued a Writ of Execution whereby some movable properties of the hospital
THE HONORABLE MINISTER OF LABOR & EMPLOYMENT AND BROKENSHIRE MEMORIAL
(petitioner herein) were levied upon and its operating expenses kept with the bank were garnished.
HOSPITAL EMPLOYEES AND WORKER'S UNION-FFW Represented by EDUARDO A.
The levy and garnishment were lifted when petitioner hospital paid the claim of the private
AFUAN, respondents.
respondents (281 hospital employees) directly, in the total amount of P163,047.50 covering the
period from June 16 to October 15, 1984.
Renato B. Pagatpatan for petitioner.
After making said payment, petitioner hospital failed to continue to comply with Wage Order No. 5
and likewise, failed to comply with the new Wage Order No. 6 which took effect on November 1,
1984, prompting private respondents to file against petitioner another complaint docketed as ROXI-
LSED-14-85, which is now the case at bar.
PARAS, J.:

In its answer, petitioner raised the following affirmative defenses:


This petition for review by certiorari seeks the annulment or modification of the Order of public
respondent Minister of Labor dated December 9, 1985 in a case for non-compliance with Wage
Order Nos. 5 and 6 docketed as ROXI-LSED Case No. 14-85 which 1) denied petitioner's Motion 1) That the Regional Office of the Ministry of Labor did not acquire jurisdiction
for Reconsideration dated February 3, 1986 and 2) affirmed the Order of Regional Director over it for want of allegation that it has the capacity to be sued and
Eugenio I. Sagmit, Jr., Regional Office No. XI Davao City, dated April 12, 1985, the dispositive
portion of which reads as follows:
2) That Wage Order Nos. 5 and 6 are non-constitutional and therefore void.
Significantly petitioner never averred any counterclaim in its Answer.
WHEREFORE, premises considered, respondent Brokenshire Memorial
Hospital, Incorporated is hereby ordered to pay the above-named workers,
After the complainants had filed their reply, petitioner filed a Motion for the Certification of the case
through this Office, within fifteen (15) days from receipt hereof, the total sum of
to the National Labor Relations Commission for a full-blown hearing on the matter, including the
TWO HUNDRED EIGHTY- FOUR THOUSAND SIX HUNDRED TWENTY
counterclaim interposed that the complainants had unpaid obligations with the Hospital which might
FIVE (P284,625.00) PESOS representing their living allowance under Wage
be offset with the latter's alleged obligation to the former.
Order No. 5 covering the period from October 16, 1984 to February 28, 1985
and under Wage Order No. 6 effective November 1, 1984 to February 28,
1985. Respondent is further ordered to pay the employees who are likewise Issues having been joined, the Regional Director rendered a decision on April 12, 1985 in favor of
entitled to the claims here presented, but whose names were inadvertently the complainants (private respondents herein) declaring that petitioner (respondent therein) is
omitted in the list and computation. (Rollo, p. 7) estopped from questioning the acquisition of jurisdiction because its appearance in the hearing is in
itself submission to jurisdiction and that this case is merely a continuance of a previous case where
the hospital already willingly paid its obligations to the workers on orders of the Regional Office. On
Petitioner contends that the respondent Minister of Labor and Employment acted without, or in
the matter of the constitutionality of the Wage Order Nos. 5 and 6, the Regional Director declared
excess of his jurisdiction or with grave abuse of discretion in failing to hold:
that only the court can declare a law or order unconstitutional and until so declared by the court,
the Office of the Regional Director is duly bound to enforce the law or order.
A) That the Regional Director committed grave abuse of discretion in asserting
exclusive jurisdiction and in not certifying this case to the Arbitration Branch of
Aggrieved, petitioner appealed to the Office of the Minister of Labor, which dismissed the appeal
the National Labor Relations Commission for a full-blown hearing on the
for lack of merit. A motion for reconsideration was likewise denied by said Office, giving rise to the
merits;
instant petition reiterating the issues earlier mentioned.

B) That the Regional Director erred in not ruling on the counterclaim raised by
The crucial issue We are tasked to resolve is whether or not the Regional Director has jurisdiction
the respondent (in the labor case, and now petitioner in this case);
over money claims of workers concurrent with the Labor Arbiter.

C) That the Regional Director erred -in skirting the constitutional and legal
It is worthy of note that the instant case was deliberated upon by this Court at the same time
issues raised. (Rollo, p. 4)
that Briad Agro Development Corporation v. de la Cerna, G.R. No. 82805 and L.M. Camus
Engineering Corporation v. Hon. Secretary of Labor, et al. G.R. No. 83225, promulgated on June
29,1989 and Maternity Children's Hospital vs. Hon. Secretary of Labor, et al., G.R. No. 78909, househelper do not exceed five thousand pesos (P5,000.00). The Regional
promulgated 30 June 1989, where deliberated upon; for all three (3) cases raised the same issue Director or hearing officer shall decide or resolve the complaint within thirty
of jurisdiction of the Regional Director of the Department of Labor to pass upon money claims of (30) calendar days from the date of the filing of the same . . .
employees. Hence, we will be referring to these cases, most especially the case of Briad Agro
which, as will be seen later, was reconsidered by the court.
Any decision or resolution of the Regional Director or hearing officer pursuant
to this provision may be appealed on the same grounds provided in Article 223
Contrary to the claim of petitioners that the original and exclusive jurisdiction over said money of this Code, within five (5) calendar days from 11 receipt of a copy of said
claims is properly lodged in the Labor Arbiter (relying on the case of Zambales Base Metals Inc. v. decision or resolution, to the National Labor Relations Commission which shall
Minister of Labor, 146 SCRA 50) and the Regional Director has no jurisdiction over workers' money resolve the appeal within ten (10) calendar days from the submission of the
claims, the Court in the three (3) cases above-mentioned ruled that in view of the promulgation of last pleading required or allowed under its rules.
Executive Order No. 111, the ruling in the earlier case of Zambales Base Metals is already
abandoned. In accordance with the rulings in Briad Agro, L.M. Camus, and Maternity Children's
ART. 217. Jurisdiction of Labor Arbiters and the Commission. —Except as
Hospital, the Regional Director exercises concurrent jurisdiction with the Labor Arbiter over money
otherwise provided under this code, the Labor Arbiters shall have original and
claims. Thus,
exclusive jurisdiction to hear and decide, within thirty (30) calendar days after
the submission of the case by the parties for decision without extension, even
. . . . Executive Order No. 111 is in the character of a curative law, that is to in the absence of steno graphic notes, the following cases involving all
say, it was intended to remedy a defect that, in the opinion of the legislative workers, whether agricultural or non-agricultural:
(the incumbent Chief Executive in this case, in the exercise of her lawmaking
power under the Freedom Constitution) had attached to the provision subject
(1) Unfair labor practice cases;
of the amendment. This is clear from the proviso: "The provisions of Article
217 to the contrary notwithstanding . . ." Plainly, the amendment was meant to
make both the Secretary of Labor (or the various Regional Directors) and the (2) Termination disputes;
Labor Arbiter share jurisdiction. (Briad Agro Dev. Corp. v. Sec. of
Labor, supra).
(3) If accompanied with a claim of reinstatement, those cases that workers
may file involving wages, rates of pay, hours of work and other terms and
Under the present rules, a Regional Director exercises both visitorial and conditions of employment;
enforcement power over labor standards cases, and is therefore empowered
to adj udicate money claims, provided there still existsan employer-employee
(4) Claims for actual, moral, exemplary and other forms of damages arising
relationship, and the findings of the regional office is not contested by the
employer concerned. (Maternity Children's Hospital v. Sec. of Labor, supra). from the employer-employee relation;

(5) Cases arising from any violation of Article 264 of this Code, including
However, it is very significant to note, at this point, that the decision in the consolidated cases of
Briad Agro Development Corp. and L.M. Camus Engineering Corp. was reconsidered and set questions involving the legality of strikes and lockouts; and
aside by this Court in a Resolution promulgated on November 9,1989. In view of the enactment of
Republic Act No. 6715, approved on March 2, 1989, the Court found that reconsideration was (6) Except claims for employees compensation, social security, medicare and
proper. maternity benefits, all other claims arising from employer-employee relations,
including those of persons in domestic or household service, involving an
amount not exceeding five thousand pesos (P5,000.00), whether or not
RA 6715 amended Art. 129 and Art. 217 of the Labor Code, to read as follows:
accompanied with a claim for reinstatement.

ART. 129. Recovery of wages, simple money claims and other benefits.—
It will be observed that what in fact conferred upon Regional Directors and other hearing officers of
Upon complaint of any interested party, the Regional Director of the
Department of Labor and Employment or any of the duly authorized hearing the Department of Labor (aside from the Labor Arbiters) adjudicative powers, i.e., the power to try
and decide, or hear and determine any claim brought before them for recovery of wages, simple
officers of the Department is empowered, through summary proceeding and
money claims, and other benefits, is Republic Act 6715, provided that the following requisites
after due notice, to hear and decide any matter involving the recovery of
wages and other monetary claims and benefits, including legal interest, owing concur, to wit:
to an employee or person employed in domestic or household service or
househelper under this code, arising from employer-employee relations, 1) The claim is presented by an employee or person employed in domestic or
Provided, That such complaint does not include a claim for reinstatement; household service, or househelper under the code;
Provided, further, That the aggregate money claims of each employee or
2) The claimant, no longer being employed, does not seek reinstatement; and and his duty is merely to enforce the law which stands valid, unless otherwise declared by this
Tribunal to be unconstitutional. On our part, We hereby declare the assailed Wage Orders as
constitutional, there being no provision of the 1973 Constitution (or even of both the Freedom
3) The aggregate money claim of the employee or househelper does not
Constitution and the 1987 Constitution) violated by said Wage Orders, which Orders are without
exceed five thousand pesos (P5,000.00).
doubt for the benefit of labor.

In the absence of any of the three (3) requisites, the Labor Arbiters have exclusive original
Based on the foregoing considerations, it is our shared view that the findings of the labor
jurisdiction over all claims arising from employer-employee relations, other than claims for
regulations officers may not be deemed uncontested as to bring the case at bar within the
employee's compensation, social security, medicare and maternity benefits.
competence of the Regional Director, as duly authorized representative of the Secretary of Labor,
pursuant to Article 128 of the Labor Code, as amended. Considering further that the aggregate
We hereby adopt the view taken by Mr. Justice Andres Narvasa in his Separate Opinion in the claims involve an amount in excess of P5,000.00, We find it more appropriate that the issue of
case of Briad Agro Dev. Corp., as reconsidered, a portion of which reads: petitioner hospital's liability therefor, including the proposal of petitioner that the obligation of
private respondents to the former in the aggregate amount of P507,237.57 be used to offset its
obligations to them, be ventilated and resolved, not in a summary proceeding before the Regional
In the resolution, therefore, of any question of jurisdiction over a money claim Director under Article 128 of the Labor Code, as amended, but in accordance With the more formal
arising from employer-employee relations, the first inquiry should be into
and extensive proceeding before the Labor Arbiter. Nevertheless, it should be emphasized that the
whether the employment relation does indeed still exist between the claimant
amount of the employer's liability is not quite a factor in determining the jurisdiction of the Regional
and the respondent. Director. However, the power to order compliance with labor standards provisions may not be
exercised where the employer contends or questions the findings of the labor regulation officers
If the relation no longer exists, and the claimant does not seek reinstatement, and raises issues which cannot be determined without taking into account evidentiary matters not
the case is cognizable by the Labor Arbiter, not by the Regional Director. On verifiable in the normal course of inspection, as in the case at bar.
the other hand, if the employment relation still exists, or reinstatement is
sought, the next inquiry should be into the amount involved.
Viewed in the light of RA 6715 and read in consonance with the case of Briad Agro Development
Corp., as reconsidered, We hold that the instant case falls under the exclusive original jurisdiction
If the amount involved does not exceed P5,000.00, the Regional Director of the Labor Arbiter RA 6715 is in the nature of a curative statute. Curative statutes have long been
undeniably has jurisdiction. But even if the amount of the claim exceeds considered valid in our jurisdiction, as long as they do not affect vested rights. In this case, We do
P5,000.00, the claim is not on that account necessary removed from the not see any vested right that will be impaired by the application of RA 6715. Inasmuch as petitioner
Regional Director's competence. In respect thereof, he may still exercise the had already paid the claims of private respondents in the amount of P163,047.50 pursuant to the
visitorial and enforcement powers vested in him by Article 128 of the Labor decision rendered in the first complaint, the only claim that should be deliberated upon by the
Code, as amended, supra; that is to say, he may still direct his labor Labor Arbiter should be limited to the second amount given by the Regional Director in the second
regulations officers or industrial safety engineers to inspect the employer's complaint together with the proposal to offset the obligations.
premises and examine his records; and if the officers should find that there
have been violations of labor standards provisions, the Regional Director may, WHEREFORE, the assailed decision of the Regional Director dated April 12, 1985, is SET ASIDE.
after due notice and hearing, order compliance by the employer therewith and
The case is REFERRED, if the respondents are so minded, to the Labor Arbiter for proper
issue a writ of execution to the appropriate authority for the enforcement
proceedings.
thereof. However, this power may not, to repeat, be exercised by him where
the employer contests the labor regulation officers' findings and raises issues
which cannot be resolved without considering evidentiary matters not verifiable SO ORDERED.
in the normal course of inspection. In such an event, the case will have to be
referred to the corresponding Labor Arbiter for adjudication, since it falls within
the latter's exclusive original jurisdiction.

Anent the other issue involved in the instant case, petitioner's contention that the constitutionality of
Wage Order Nos. 5 and 6 should be passed upon by the National Labor Relations Commission,
lacks merit. The Supreme Court is vested by the Constitution with the power to ultimately declare a
law unconstitutional. Without such declaration, the assailed legislation remains operative and can
be the source of rights and duties especially so in the case at bar when petitioner complied with
Wage Order No. 5 by paying the claimants the total amount of P163,047.50, representing the
latter's minimum wage increases up to October 16, 1984, instead of questioning immediately at
that stage before paying the amount due, the validity of the order on grounds of constitutionality.
The Regional Director is plainly ,without the authority to declare an order or law unconstitutional
G.R. No. 175492 February 27, 2013 On May 31, 2002, PLDT and GUTS entered into another CBA covering the period January 1, 2002
to December 31, 2004 (CBA of 2002-2004) which provided for the following salary increases: 8%
of basic wage or ₱2,000.00 whichever is higher for the first year (2002); 10% of basic wage or
CARLOS L. OCTAVIO, Petitioner,
₱2,700.00 whichever is higher for the second year (2003); and, 10% of basic wage or ₱2,400.00
vs. 9
whichever is higher for the third year (2004).
PIDLIPPINE LONG DISTANCE TELEPHONE COMPANY, Respondent.

Claiming that he was not given the salary increases of ₱2,500.00 effective January 1, 2001 and
DECISION
₱2,000.00 effective January 1, 2002, Octavio wrote the President of GUTS, Adolfo Fajardo
10
(Fajardo). Acting thereon and on similar grievances from other GUTS members, Fajardo wrote
DEL CASTILLO, J.: the PLDT Human Resource Head to inform management of the GUTS members’ claim for
11
entitlement to the across-the-board salary increases.
Every Collective Bargaining Agreement (CBA) shall provide a grievance machinery to which all
disputes arising from its implementation or interpretation will be subjected to compulsory Accordingly, the Grievance Committee convened on October 7, 2002 consisting of representatives
negotiations. This essential feature of a CBA provides the parties with a simple, inexpensive and from PLDT and GUTS. The Grievance Committee, however, failed to reach an agreement. In
expedient system of finding reasonable and acceptable solutions to disputes and helps in the effect, it denied Octavio’s demand for salary increases. The Resolution (Committee Resolution),
attainment of a sound and stable industrial peace. reads as follows:

1 2
Before us is a Petition for Review on Certiorari assailing the August 31, 2006 Decision of the October 7, 2002
Court of Appeals (CA) in CA-G.R. SP No. 93578, which dismissed petitioner Carlos L. Octavio's
3 4
(Octavio) Petition for Certiorari assailing the September 30, 2005 Resolution of the National Labor
5 UNION ISSUE :
Relations Commission (NLRC). Said NLRC Resolution affirmed the August 30, 2004 Decision of
the Labor Arbiter which dismissed Octavio's Complaint for payment of salary increases against
respondent Philippine Long Distance Company (PLDT). Likewise assailed in this Petition is the 1. Mr. Carlos L. Octavio, Sales System Analyst I, CCIM-Database, was
6 7
November 15, 2006 Resolution which denied Octavio’s Motion for Reconsideration. promoted to S2 from S1 last February 01, 2002. He claimed that the whole
₱2,000 (1st yr. GUTS-CBA increase) was not given to him.
Factual Antecedents
2. He was hired as a probationary employee on October 01, 2000 and was
regularized on January 01, 2001. He claimed that Management failed to grant
On May 28, 1999, PLDT and Gabay ng Unyon sa Telekominaksyon ng mga Superbisor (GUTS)
him the GUTS-CBA increase last January 2001.
entered into a CBA covering the period January 1, 1999 to December 31, 2001 (CBA of 1999-
2001). Article VI, Section I thereof provides:
MANAGEMENT POSITION :
Section 1. The COMPANY agrees to grant the following across-theboard salary increase during the
three years covered by this Agreement to all employees covered by the bargaining unit as of the Issue # 1:
given dates:
A) Promotional Policy: adjustment of basic monthly salary to the minimum
Effective January 1, 1999 – 10% of basic wage or ₱2,000.00 whichever is higher; salary of the new position.

Effective January 1, 2000 – 11% of basic wage or ₱2,250.00 whichever is higher; B) Mr. Octavio’s salary at the time of his promotion and before the conclusion
of the GUTS CBA was ₱10,000.00.
8
Effective January 1, 2001 – 12% of basic wage or ₱2,500.00 whichever is higher.
C) Upon the effectivity of his promotion on February 1, 2002, his basic monthly
salary was adjusted to ₱13,730.00, the minimum salary of the new position.
On October 1, 2000, PLDT hired Octavio as Sales System Analyst I on a probationary status. He
became a member of GUTS. When Octavio was regularized on January 1, 2001, he was receiving
a monthly basic salary of ₱10,000.00. On February 1, 2002, he was promoted to the position of D) In June 2002, the GUTS-CBA was concluded and Mr. Octavio’s basic
Sales System Analyst 2 and his salary was increased to ₱13,730.00. salary was recomputed to include the ₱2,000.00 1st year increase retroactive
January 2002. The resulting basic salary was ₱12,000.00.
E) Applying the above-mentioned policy, Mr. Octavio’s basic salary was negotiation as it has the force of law between the parties. Finally, Octavio claimed that PLDT
adjusted to the minimum salary of the new position, which is ₱13,730.00. committed an act of unfair labor practice because, while it granted the claim for salary increase of
18 supervisory employees who were regularized on January 1, 2002 and onwards, it discriminated
against him by refusing to grant him the same salary increase. He thus prayed for an additional
Issue # 2:
award of damages and attorney’s fees.

All regularized supervisory employees as of January 1 are not entitled to the GUTS CBA increase.
PLDT countered that the issues advanced by Octavio had already been resolved by the Union-
However, as agreed with GUTS in the grievance case of 18 personnel of International & Luzon
Management Grievance Committee when it denied his claims through the Committee Resolution.
Core Network Management Center, probationary employees who were hired outside of PLDT and
Moreover, the grant of across-the board salary increase for those who were regularized starting
regularized as supervisors/management personnel on January 1, 2002 shall be entitled to GUTS
January 1, 2002 and the exclusion thereto of those who were regularized on January 1, 2001, do
CBA. This decision shall be applied prospectively and all previous similar cases are not covered.
not constitute an act of unfair labor practice as would result in any discrimination or encourage or
discourage membership in a labor organization. In fact, when the Union-Management Grievance
RESOLUTION : Committee came up with the Committee Resolution, they considered the same as the most
practicable and reasonable solution for both management and union. At any rate, the said
Committee Resolution had already become final and conclusive between the parties for failure of
After protracted deliberation of these issues, the committee failed to reach an agreement. Hence,
Octavio to elevate the same to the proper forum. In addition, PLDT claimed that the NLRC has no
Management position deemed adopted.
jurisdiction to hear and decide Octavio’s claims.

In a Decision dated August 30, 2004, the Labor Arbiter dismissed the Complaint of Octavio and
MANAGEMENT UNION upheld the Committee Resolution.

Ruling of the National Labor Relations Commission


_______(signed)_______ _______(signed)_______
WILFREDO A. GUADIA ADOLFO L.FAJARDO
Upon Octavio’s appeal, the NLRC, in its September 30, 2005 Resolution, affirmed the Labor
Arbiter’s Decision. It upheld the Labor Arbiter’s finding that Octavio’s salary had already been
adjusted in accordance with the provisions of the CBA. The NLRC further ruled that it has no
_______(signed)_______ _______(signed)_______
jurisdiction to decide the issues presented by Octavio, as the same involved the interpretation and
ROSALINDA S. RUIZ CONFESOR A. ESPIRITU
implementation of the CBA. According to it, Octavio should have brought his claim before the
proper body as provided in the 2002-2004 CBA’s provision on grievance machinery and procedure.

_______(signed)_______ _______(signed)_______
ALEJANDRO C. FABIAN CHARLITO A. AREVALO
12 Octavio’s Motion for Reconsideration was likewise dismissed by the NLRC in its November 21,
13
2005 Resolution.

Ruling of the Court of Appeals


Aggrieved, Octavio filed before the Arbitration Branch of the NLRC a Complaint for payment of said
salary increases.
14
Octavio thus filed a Petition for Certiorari which the CA found to be without merit. In its August 31,
15
2006 Decision, the CA declared the Committee Resolution to be binding on Octavio, he being a
Ruling of the Labor Arbiter
member of GUTS, and because he failed to question its validity and enforceability.

Octavio claimed entitlement to salary increases per the CBAs of 1999-2001 and 2002-2004. He 16
In his Motion for Reconsideration, Octavio disclaimed his alleged failure to question the
insisted that when he was regularized as a supervisory employee on January 1, 2001, he became
Committee Resolution by emphasizing that he filed a Complaint before the NLRC against PLDT.
entitled to receive the across-the-board increase of ₱2,500.00 as provided for under the CBA of
However, the CA denied Octavio’s Motion for Reconsideration in its November 15, 2006
1999-2001 which took effect on January 1, 1999. Then pursuant to the CBA of 2002-2004, he 17
Resolution.
should have received an additional increase of ₱2,000.00 apart from the merit increase of
₱3,730.00 which was given him due to his promotion on February 1, 2002. However, PLDT
unilaterally decided to deem as included in the said ₱3,730.00 the ₱2,000.00 across-the-board Issues
increase for 2002 as stipulated in the CBA of 2002-2004. This, according to Octavio, amounts to
diminution of benefits. Moreover, Octavio averred that the CBA cannot be the subject of further
Hence, Octavio filed this Petition raising the following issues for our consideration:
a. Whether x x x the employer and bargaining representative may amend the provisions exerted to avoid such an open conflict. In furtherance of these principles, the parties agree to
of the collective bargaining agreement without the consent and approval of the observe the following grievance procedures.
employees;
Step 1. Any employee (or group of employees) who believes that he has a justifiable grievance
b. If so, whether the said agreement is binding [on] the employees; shall present the matter initially to his division head, or if the division is involved in the grievance, to
the company official next higher to the division head (the local manager in the provincial
exchanges) not later that fifteen (15) days after the occurrence of the incident giving rise to the
c. Whether x x x merit increases may be awarded simultaneously with increases given in
grievance. The initial presentation shall be made to the division head either by the aggrieved party
the Collective Bargaining Agreement;
himself or by the Union Steward or by any Executive Officer of the Union who is not a member of
the grievance panel.1âwphi1 The initial presentation may be made orally or in writing.
d. Whether x x x damages may be awarded to the employee for violation by the
18
employer of its commitment under its existing collective bargaining agreement.
Step 2. Any party who is not satisfied with the resolution of the grievance at Step 1 may appeal in
writing to the Union-Management Grievance Committee within seven (7) days from the date of
Octavio submits that the CA erred in upholding the Committee Resolution which denied his claim receipt of the department head’s decision.
for salary increases but granted the same request of 18 other similarly situated employees. He
likewise asserts that both PLDT and GUTS had the duty to strictly implement the CBA salary
Step 3. If the grievance is not settled either because of deadlock or the failure of the
increases; hence, the Committee Resolution, which effectively resulted in the modification of the
committee to decide the matter, the grievance shall be transferred to a Board of Arbitrators
CBAs’ provision on salary increases, is void.
for the final decision. The Board shall be composed of three (3) arbitrators, one to be nominated
by the Union, another to be nominated by the Management, and the third to be selected by the
Octavio also insists that PLDT is bound to grant him the salary increase of ₱2,000.00 for the year management and union nominees. The decision of the board shall be final and binding both the
2002 on top of the merit increase given to him by reason of his promotion. It is his stance that merit company and the Union in accordance with law. Expenses of arbitration shall be divided equally
21
increases are distinct and separate from across-the-board salary increases provided for under the between the Company and the Union. (Emphasis supplied)
CBA.
Indisputably, the present controversy involves the determination of an employee’s salary increases
Our Ruling as provided in the CBAs. When Octavio’s claim for salary increases was referred to the Union-
Management Grievance Committee, the clear intention of the parties was to resolve their
differences on the proper interpretation and implementation of the pertinent provisions of the CBAs.
The Petition has no merit.
And in accordance with the procedure prescribed therein, the said committee made up of
representatives of both the union and the management convened. Unfortunately, it failed to reach
19
Under Article 260 of the Labor Code, grievances arising from the interpretation or implementation an agreement. Octavio’s recourse pursuant to the CBA was to elevate his grievance to the Board
of the parties’ CBA should be resolved in accordance with the grievance procedure embodied of Arbitrators for final decision. Instead, nine months later, Octavio filed a Complaint before the
therein. It also provides that all unsettled grievances shall be automatically referred for voluntary NLRC.
arbitration as prescribed in the CBA.
It is settled that "when parties have validly agreed on a procedure for resolving grievances and to
20
In its Memorandum, PLDT set forth the grievance machinery and procedure provided under submit a dispute to voluntary arbitration then that procedure should be strictly
22
Article X of the CBA of 2002-2004, viz: observed." Moreover, we have held time and again that "before a party is allowed to seek the
intervention of the court, it is a precondition that he should have availed of all the means of
administrative processes afforded him. Hence, if a remedy within the administrative machinery can
Section 1. GRIEVANCE MACHINERY - there shall be a Union-Management Grievance Committee still be resorted to by giving the administrative officer concerned every opportunity to decide on a
composed of three (3) Union representatives designated by the UNION Board of Directors and matter that comes within his jurisdiction, then such remedy should be exhausted first before the
three (3) Management representatives designated by the company President. The committee shall court’s judicial power can be sought. The premature invocation of the court’s judicial intervention is
act upon any grievance properly processed in accordance with the prescribed procedure. The 23
fatal to one’s cause of action." "The underlying principle of the rule on exhaustion of
Union representatives to the Committee shall not lose pay for attending meetings where administrative remedies rests on the presumption that when the administrative body, or grievance
Management representatives are in attendance. machinery, is afforded a chance to pass upon the matter, it will decide the same correctly."
24

Section 2. GRIEVANCE PROCEDURE - The parties agree that all disputes between labor and By failing to question the Committee Resolution through the proper procedure prescribed in the
management may be settled through friendly negotiations; that the parties have the same interest CBA, that is, by raising the same before a Board of Arbitrators, Octavio is deemed to have waived
in the continuity of work until all points in dispute shall have been discussed and settled; that an his right to question the same. Clearly, he departed from the grievance procedure mandated in the
open conflict in any form involves losses to the parties; and that therefore, every effort shall be CBA and denied the Board of Arbitrators the opportunity to pass upon a matter over which it has
jurisdiction. Hence, and as correctly held by the CA, Octavio’s failure to assail the validity and
enforceability of the Committee Resolution makes the same binding upon him. On this score alone,
Octavio’s recourse to the labor tribunals below, as well as to the CA, and, finally, to this Court,
must therefore fail.

At any rate, Octavio cannot claim that the Committee Resolution is not valid, binding and
25
conclusive as to him for being a modification of the CBA in violation of Article 253 of the Labor
Code. It bears to stress that the said resolution is a product of the grievance procedure outlined in
the CBA itself. It was arrived at after the management and the union through their respective
representatives conducted negotiations in accordance with the CBA. On the other hand, Octavio
never assailed the competence of the grievance committee to take cognizance of his case. Neither
did he question the authority or credibility of the union representatives; hence, the latter are
deemed to have properly bargained on his behalf since "unions are the agent of its members for
26
the purpose of securing just and fair wages and good working conditions." In fine, it cannot be
gainsaid that the Committee Resolution is a modification of the CBA. Rather, it only provides for
the proper implementation of the CBA provision respecting salary increases.

Finally, Octavio’s argument that the denial of his claim for salary increases constitutes a violation of
27
Article 100 of the Labor Code is devoid of merit. Even assuming that there has been a diminution
of benefits on his part, Article 100 does not prohibit a union from offering and agreeing to reduce
wages and benefits of the employees as the right to free collective bargaining includes the right to
28
suspend it. PLDT averred that one of the reasons why Octavio’s salary was recomputed as to
include in his salary of ₱13,730.00 the ₱2,000.00 increase for 2002 is to avoid salary distortion. At
this point, it is well to emphasize that bargaining should not be equated to an "adversarial litigation
29
where rights and obligations are delineated and remedies applied." Instead, it covers a process of
finding a reasonable and acceptable solution to stabilize labor-management relations to promote
30
stable industrial peace. Clearly, the Committee Resolution was arrived at after considering the
intention of both PLDT and GUTS to foster industrial peace.

All told, we find no error on the part of the Labor Arbiter, the NLRC and the CA in unanimously
upholding the validity and enforceability of the Grievance Committee Resolution dated October 7,
2002.

WHEREFORE, the petition is DENIED. The August 31, 2006 Decision and November 15, 2006
Resolution of the Court of Appeals in CA-G.R. SP No. 93578 are AFFIRMED.

SO ORDERED.