ISAE v. Quisumbing G.R. No.

128845, June 1, 2000

Fact: Private respondent, the School, hires both foreign and local teachers as members
of its faculty, classifying the same into two: (1) foreign-hires and (2) local-hires. The
School employs four tests to determine whether a faculty member should be classified
as a foreign-hire or a local hire. Should the answer to any of four tests queries point to
the Philippines, the faculty member is classified as a local hire; otherwise, he or she is
deemed a foreign-hire. The School grants foreign-hires salary rate twenty-five percent
(25%) more than local-hires. The School justifies the difference on two “significant
economic disadvantages” foreign-hires have to endure, namely: (a) the “dislocation
factor” and (b) limited tenure. When negotiations for a new collective bargaining
agreement were held on June 1995, petitioner International School Alliance of
Educators, “a legitimate labor union and the collective bargaining representative of all
faculty members” of the School, contested the difference in salary rates between foreign
and local-hires. This issue eventually caused a deadlock between the parties. Petitioner
filed a notice of strike. The failure of the National Conciliation and Mediation Board to
bring the parties to a compromise prompted the DOLE to assume jurisdiction over the
dispute. DOLE Acting Secretary, issued an Order resolving the parity and
representation issues in favor of the School. Then DOLE Secretary Leonardo A.
Quisumbing subsequently denied petitioner’s motion for reconsideration in an Order
dated March 19, 1997. Petitioner now seeks relief to the Supreme Court.
Issue: Whether Foreign-hires are also paid a salary rate twenty-five percent (25%) more
than local-hires is an invalid and unreasonable classification and violates the Equal
Protection Clause.
Held:  Yes, Discrimination, particularly in terms of wages, is frowned upon by the Labor
Code. The foregoing provisions impregnably institutionalize in this jurisdiction the long
honored legal truism of “equal pay for equal work.” Persons who work with substantially
equal qualifications, skill, effort and responsibility, under similar conditions, should be
paid similar salaries. This rule applies to the School, its “international character”
notwithstanding. The School contends that petitioner has not adduced evidence that
local-hires perform work equal to that of foreign-hires. The employer in this case has
failed to show evidence that foreign-hires perform 25% more efficiently or effectively
than the local-hires. Both groups have similar functions and responsibilities, which they
perform under similar working conditions. In this case, the court find the point-of-hire
classification employed by respondent School to justify the distinction in the salary rates
of foreign-hires and local hires to be an invalid classification. There is no reasonable
distinction between the services rendered by foreign-hires and local-hires. The practice
of the School of according higher salaries to foreign-hires contravenes public policy and,
certainly, does not deserve the sympathy of the Court.
Calalang v Williams (Labor Standards)
Calalang v Williams 

1
GR No. 47800 
December 2, 1940  

FACTS:    

Pursuant to the power delegated to it by the Legislature, the Director of Public Works
promulgated rules and regulations pertaining to the closure of Rosario Street and Rizal
Avenue to traffic of 

animal-drawn vehicles for a year from the date of the opening of the Colgante Bridge to
traffic.   

Among others, the petitioner Calalang, concerned citizen, aver that the rules and
regulations complained of:  
 infringe upon constitutional precept on the promotion of social justice to insure the well
being and economic security of all people; 
 and that it constitutes unlawful interference with legitimate business or trade and
abridge the right to personal liberty and freedom of locomotion.  

ISSUE:  Whether or not the rules and regulation promote social justice.  

HELD:  
YES, it still promotes social justice. In enacting the said law, the National Assembly was
prompted by considerations of public convenience and welfare.  

The promotion of Social Justice is to be adhered not through a mistaken sympathy

towards any given group (e.g. the poor - because social justice is bringing the greatest
good to the greatest number, not necessarily just the poor like the drivers of the animal-
drawn vehicles).  

Social justice:   

2
: "neither communism, nor despotism, nor atomism, nor anarchy," but the humanization
of laws and the equalization of social and economic force by the State so that justice in
its rational and objectively secular conception may at least be approximated.      

: the promotion of the welfare of all the people, the adoption by the Government of
measures calculated to insure economic stability of all the competent elements of
society, through the maintenance of a proper economic and social equilibrium in the
interrelations of the members of the     community, constitutionally, through the adoption
of measures legally justifiable, or extra-constitutionally, through the exercise of powers
underlying the existence of all governments on the time-honored principle of salus
populi est suprema lex.      

: must be founded on the recognition of the necessity of interdependence among divers

and diverse units of a society and of the protection that should be equally and evenly
extended to all groups as a combined force in our social and economic life, consistent
with the fundamental and paramount     objective of the state of promoting the health,
comfort and quiet of all persons, and of bringing about "the greatest good to the greatest
number."  

RATIO: 
(1) Liberty is a blessing without which life is a misery, but liberty should not be made to
prevail over authority because then society will fall into anarchy.  

(2)The citizen should achieve the required balance of liberty and authority in his mind
through education and personal discipline so that there may be established the resultant
equilibrium, which means peace and order and happiness of all. 

2) Whether the rules and regulations complained of infringe upon the constitutional
precept regarding the promotion of social justice to insure the well-being and economic
security
of all the people?
Held:
1) No. The promulgation of the Act aims to promote safe transit upon and avoid
obstructions on

3
national roads in the interest and convenience of the public. In enacting said law, the
National
Assembly was prompted by considerations of public convenience and welfare. It was
inspired by
the desire to relieve congestion of traffic, which is a menace to the public safety. Public
welfare
lies at the bottom of the promulgation of the said law and the state in order to promote
the
general welfare may interfere with personal liberty, with property, and with business and
occupations. Persons and property may be subject to all kinds of restraints and burdens
in order
to secure the general comfort, health, and prosperity of the State. To this fundamental
aims of the
government, the rights of the individual are subordinated. Liberty is a blessing which
should not
be made to prevail over authority because society will fall into anarchy. Neither should
authority
be made to prevail over liberty because then the individual will fall into slavery. The
paradox lies
in the fact that the apparent curtailment of liberty is precisely the very means of insuring
its
preserving.
2) No. Social justice is “neither communism, nor despotism, nor atomism, nor anarchy,”
but the
humanization of laws and the equalization of social and economic forces by the State so
that
justice in its rational and objectively secular conception may at least be approximated.
Social
justice means the promotion of the welfare of all the people, the adoption by the
Government of
measures calculated to insure economic stability of all the competent elements of
society,
through the maintenance of a proper economic and social equilibrium in the
interrelations of the

4
members of the community, constitutionally, through the adoption of measures legally
justifiable, or extra-constitutionally, through the exercise of powers underlying the
existence of
all governments on the time-honored principles of salus populi estsuprema lex.
Social justice must be founded on the recognition of the necessity of interdependence
among
divers and diverse units of a society and of the protection that should be equally and
evenly
extended to all groups as a combined force in our social and economic life, consistent
with the
fundamental and paramount objective of the state of promoting health, comfort and
quiet of all
persons, and of bringing about “the greatest good to the greatest number.
G.R. No. 168716               April 16, 2009
HFS PHILIPPINES, INC., RUBEN T. DEL ROSARIO and IUM SHIPMANAGEMENT
AS, Petitioners,
vs.
RONALDO R. PILAR, Respondent.
DECISION
CORONA, J.:
This petition1 seeks to reverse and set aside the November 22, 2004 decision2 and
June 22, 2005 resolution3 of the Court of Appeals (CA) in CA-G.R. SP No. 85197.
On October 4, 2001, respondent Ronaldo R. Pilar was engaged by petitioners IUM
Shipmanagement AS and its Philippine manning agent, HFS Philippines, Inc. (HFS), as
a crew member of the Norwegian vessel M/V Hual Triumph under the following terms
and conditions:
Duration of the contract : 9 months
Position : Electrician
Basic monthly salary : US $981 per month
Hours of work : 44 hours per week
Overtime : US $646 per month
Vacation leave with pay : 8 days per month

5
 Point of hire : Manila4
Respondent boarded the vessel on October 27, 2001.5
In March 2002 or roughly four months after he boarded M/V Hual Triumph, respondent
complained of loss of appetite, nausea, vomiting and severe nervousness. Despite
being given medical treatment, his condition did not improve.
When the vessel reached Nagoya, Japan on April 3, 2002, respondent was brought to
the Komatsu Hospital where he was diagnosed with depression and gastric ulcer.6 The
attending physician declared him unfit for work and recommended his hospitalization
and repatriation.7 Respondent returned to Manila on the same day.
Upon reaching Manila, respondent was met by a representative of HFS who
immediately brought him to the Medical Center Manila. HFS-designated physician Dr.
Nicomedes G. Cruz confirmed that respondent was suffering from major depression.
Thus, he placed respondent under continuous medical treatment for several months.8
On September 19, 2003, respondent was declared fit to work.9
Meanwhile, respondent likewise sought the opinion of other physicians.
Dr. Anselmo T. Tronco of the Philippine General Hospital10 and Dr. Raymond Jude L.
Changco of the Mary Chiles Hospital11 opined that respondent continued to suffer from
major depression.
Dr. Arlito C. Veneracion of the Mary Chiles Hospital, on the other hand, evaluated the
results of respondent’s ultrasound and endoscopy. He revealed that respondent was
suffering "cholecystolithiasis, mild fatty liver and chronic gastritis."12 Thus, Dr.
Veneracion declared respondent unfit to work.13
On November 27, 2002, respondent filed a complaint for underpayment of disability and
medical benefits and for moral and exemplary damages in the National Labor Relations
Commission (NLRC).14 Because respondent was a registered member of the
Associated Marine Officers and Seaman’s Union of the Philippines (AMOSUP), the
NLRC referred the complaint to the National Conciliation and Mediation Board (NCMB)
on May 6, 2003.15
In his position paper, respondent claimed that, while sleeping during his rest hours on
March 9, 2002, he was suddenly awakened by his officer who hit him on the head. He
was so traumatized by the incident that thereafter, he lost his appetite, vomited
incessantly and experienced severe nervousness. He claimed to be entitled to disability
compensation under Article 12 of the Collective Bargaining Agreement (CBA) between
AMOSUP and the Norwegian Shipowner’s Association which provides:
ARTICLE 12
DISABILITY COMPENSATION

6
If a seafarer due to no fault of his own, suffers injury as a result of an accident while
serving on board or while traveling to or from the vessel on the company’s business or
due to marine peril, and as a result his ability to work is permanently reduced, totally or
partially, the Company shall pay him a disability compensation which including the
amounts stipulated by the [Philippine Overseas Employment Agency’s] rules and
regulation shall be maximum:

Radio officers, chief stewards,

electricians, electro technicians US $90,000

Ratings US $70,000

The disability compensation shall be calculated on the basis of the POEA’s schedule of
disability or impediment for injuries at a percentage recommended by a doctor
authorized by the Norwegian authorities for the medical examination of seafarers.
The company shall take out the necessary insurance to cover the benefits mentioned
above. Coverage arranged with P & I Club recognized by the Norwegian authorities will
meet these requirements. (emphasis supplied)
Petitioners, on the other hand, asserted that in the absence of proof his depression was
caused by an accident, respondent was not entitled to disability and medical benefits
under Article 12 of the CBA. Instead, he was only entitled to the 120-day sick pay
provided under Article 10 of the CBA which provides:
ARTICLE 10
SICKNESS AND INJURY
During the period of employment and at the time of signing off, the officer shall submit to
a medical examination when requested by the company or its representative, at the
company’s expense.
While serving on board, a sick or injured officer is entitled to treatment at the company’s
expense. The company is not responsible for conservative denial treatment. If the
officer is sick or injured at the termination of the service period, he has the same
entitlement for a maximum period of one hundred and twenty (120) days from the date
of signing off. In accordance with Part II, Section C of the [Philippine Overseas
Employment Agency’s (POEA)] rules and regulations, the officer must submit to a post-
employment medical examination within three (3) working days after his return to the
Philippines to obtain these benefits. If he should be unable by reason of physical
incapacity to do so, a written notice to the agency within the same period is deemed as
compliance provided the incapacity is certified by the Master or an authorized physician.
In the event of sickness or injury necessitating signing-off, the officer is entitled to travel
to Manila at the company’s expense.

7
The officer is entitled to sick pay (at the same rate as basic wage) for up to 120 days
after signing off, provided the sickness or the injury is verified by written statement from
an authorized physician. The sick pay will be in addition to the vacation leave
compensation mentioned in Art. 8 but not in the addition to the termination pay
compensation mentioned in Art. 5 points a to c.
It is understood that an officer who is signed off by reason of sickness or injury must
return to the Philippines within the usual period of travel from the date and place of
disembarkation indicated in homeward bound ticket. On arrival in the Philippines, he
shall report to the company’s designated physician within three (3) working days from
the time of arrival for post employment medical examination, otherwise, the employer’s
liability shall be deemed terminated. In case however, of failure to report due to officers’
physical incapacity, a written notice to the company within three (3) working days from
arrival is deemed as compliance provided the incapacity is certified by the Master or an
authorized physician. (emphasis supplied)16
Pursuant to this provision, Section 20(B) of the Standard Employment Contract of the
POEA between respondent and petitioners (employment contract) stated:
B. COMPENSATION AND BENEFITS FOR ILLNESS AND INJURY
The liabilities of the employer when the seafarer suffers injury or illness during the term
of his contract are as follows:
xxxxxxxxx
3. Upon sign-off from the vessel for medical treatment, the seafarer is entitled to
sickness allowance equivalent to his basic wage until he is declared fit to work or of the
degree of permanent disability has been assessed by the company-designated
physician, but in no case shall this period exceed one-hundred twenty (120) days.
For this purpose, the seafarer shall submit himself to a post-employment medical
examination by a company designated physician within three working days upon his
return except when he is physically incapacitated to do so, in which case, a written
notice to the agency within the same period is deemed as compliance. Failure of the
seafarer to comply with the mandatory reporting requirement shall result in his forfeiture
of the right to claim the above benefits. (emphasis supplied)
xxxxxxxxx
The NCMB held that the nature of respondent’s occupation significantly contributed to
the deterioration of his psychological condition. Respondent’s depression was therefore
a compensable sickness since it arose out of his employment. In view of the principle of
social justice (that those who have less in life should have more in the law), the NCMB
awarded disability compensation to him:17
WHEREFORE, judgment is hereby rendered in favor of [respondent]. [Petitioners],
jointly and severally, are hereby ordered to pay disability benefits claimed by

8
[respondent] in accordance with the [AMOSUP]-CBA in the amount of US$90,000 and
attorney’s fees equivalent to 10% of the total amount awarded.
SO ORDERED.
Aggrieved, petitioners assailed the NCMB decision in the CA via petition for
certiorari18 asserting that it committed grave abuse of discretion in awarding disability
compensation to respondent. The NCMB erred in applying Article 12 of the CBA since
the respondent’s depression and gastric ulcer were not due to an accident.
In a decision dated November 22, 2004, the CA held that Article 12 of the CBA applies
when a seafarer suffers an injury (1) as a consequence of an accident that took place
on board the vessel or (2) while traveling to and from the vessel on company business
or (3) due to a marine peril. Since respondent’s illnesses were not the result of any of
the said circumstances, he was not entitled to disability compensation granted by the
CBA. Nonetheless, because he proved that his illnesses impaired him, he is entitled to
disability benefits granted by Section 3219 of the employment contract.20
Unsatisfied with the decision of the CA, petitioners moved for reconsideration but it was
denied.21
The primordial issue in this petition is whether respondent is entitled to disability pay.
Petitioners contend that the CA erred in awarding disability pay to respondent. Section
20(B) of the employment contract requires that the seafarer should be declared unfit for
work by the company physician. Respondent, in this instance, was declared fit for work
by Dr. Cruz.
We deny the petition.
Just like any other contract, a CBA is the law between the contracting parties and
compliance therewith in good faith is required by law.22 Inasmuch as respondent was a
registered member of the AMOSUP, the present controversy should be decided in
accordance with the CBA.
It is undisputed that respondent fell ill while he was onboard M/V Hual Triumph. This
fact was confirmed not only by petitioner’s accredited physicians but also by
respondent’s own independent physicians.
In view thereof, respondent is clearly entitled to sick-pay. Article 10 of the CBA and
Section 20(B) of the employment contract apply when a seafarer contracts an illness in
the course of his employment. They provide that if, in the opinion of the employer-
accredited physician, the nature of the seafarer’s illness, regardless of its cause,
requires a sign-off (or repatriation to Manila), the seafarer is entitled to sick-pay
equivalent to not more than 120-days worth of regular wage.
However, with regard to whether respondent is entitled to disability compensation, we
rule in the negative. Article 12 of the CBA requires:

9
(a) the seafarer must suffer an injury;
(b) injury must have been the result of an accident while on board or while traveling to
or from the vessel on company’s business or it must have been due to marine peril and
(c) as a result of the injury, he becomes totally or partially disabled.
This provision is limited to injuries. It does not cover all kinds of illnesses such as those
suffered by respondent. Moreover, neither the NCMB nor the CA found that
respondent’s illnesses were the result of an accident or a marine peril.
Nonetheless, while respondent is not entitled to disability compensation under the CBA,
Section 20(B) of the Contract provides:
5. In case of permanent total or partial disability of the seafarer during the term of
employment caused by either injury or illness the seafarer shall be compensated in
accordance with the schedule of benefits enumerated in Section [32] of this Contract.
Computations arising from any illness or disease shall be governed by the rates and
rules of compensation applicable at the time the illness or disease was contracted.
(emphasis supplied)
Under this provision, a seafarer may be entitled to disability compensation if (1) he is
shown to have contracted an illness or suffered an injury in the course of his
employment and (2) such illness or injury resulted in his total or partial disability.
In this case, the company-accredited doctor opined that respondent was fit to work but
respondent’s own physicians declared otherwise.
We note that Section 20(B) of the employment contract states that it is the company-
designated physician who determines a seafarer’s fitness to work or his degree of
disability. Nonetheless, a claimant may dispute the company-designated physician’s
report by seasonably consulting another doctor. In such a case, the medical report
issued by the latter shall be evaluated by the labor tribunal and the court, based on its
inherent merit.231avvphi1
Dr. Tronco made the following observations about respondent:
The [patient] started to feel weak, anxious, depressed, with loss of interest and feeling
of hopelessness one month before consultation. These symptoms interfered with work.
He was thus repatriated on the fifth month of work as a seaman. He was given anti-
depressants which led to his gradual improvement.
Presently, [patient] is energetic and not anxious.
Impression: major depression
He will be maintained on Zoloft pills within the next [six to nine] months. Prognosis is
good.24
However, Dr. Chango found that respondent’s depression persisted:
10
Patient is under medication but persists to be depressed. In view of this, I recommend
that in the Schedule of Disability he be graded 6 (moderate mental disorder) which limits
worker to ADL with some directed care.25
Dr. Veneracion, on the other hand, issued a certification to the following effect:
This is to certify that I have seen and examined Mr. Ronaldo Pilar on September 22,
2003 at Mary Chiles General Hospital. Ultrasound done at March 26, 2003 showed
cholecystilithiasis and mild fatty liver. Endoscopy with gastric biopsy done April 2, 2003
revealed chronic gastritis.

Diagnosis : Cholecystilithiasis
Mild fatty liver
Chronic gastritis

Remarks : POEA Disability Grade 7

Unfit to work

This certification was issued upon Mr. Rolando Pilar’s request for the purpose of
claiming disability benefits. 26
There was clearly a discrepancy between the certification of the company-designated
physician and those of respondent’s chosen doctors. The company-designated
physician expectedly downplayed his findings on the ratings.27 It is for this reason that
the employment contract affords the seaman the option to seek the opinion of an
independent physician.28
The company-designated physician declared respondent as having suffered a major
depression but was already cured and therefore fit to work. On the other hand, the
independent physicians stated that respondent’s major depression persisted and
constituted a disability. More importantly, while the former totally ignored the diagnosis
of the Japanese doctor that respondent was also suffering from gastric ulcer, the latter
addressed this. The independent physicians thus found that respondent was suffering
from chronic gastritis and declared him unfit for work.
The bottomline is this: the certification of the company-designated physician would
defeat respondent’s claim while the opinion of the independent physicians would uphold
such claim. In such a situation, we adopt the findings favorable to respondent.
The law looks tenderly on the laborer. Where the evidence may be reasonably
interpreted in two divergent ways, one prejudicial and the other favorable to him, the
balance must be tilted in his favor consistent with the principle of social justice.29
WHEREFORE, the petition is hereby DENIED. The November 22, 2004 decision and
June 22, 2005 resolution of the Court of Appeals in CA-G.R. SP No. 85197 affirming the
May 27, 2002 decision of the National Conciliation Mediation Board in NCMB Case No.
NCMB-NCR-CRN Case No. 06-007-03 are AFFIRMED.

11
Costs against petitioners.
SO ORDERED.
PLDT vs. NLRC
OCTOBER 23, 2012 ~ VBDIAZ
PLDT vs. NLRC
G.R. No. 80609  August 23, 1988
Facts:
Abucay, a traffic operator of the PLDT, was accused by two complainants of having
demanded and received from them the total amount of P3,800.00 in consideration of
her promise to facilitate approval of their applications for telephone installation. 
Investigated and heard, she was found guilty as charged and accordingly separated
from the service. She went to the Ministry of Labor and Employment claiming she had
been illegally removed. After consideration of the evidence and arguments of the
parties, the company was sustained and the complaint was dismissed for lack of merit.
Nevertheless, the dispositive portion of labor arbiter’s decision declared:
WHEREFORE, the instant complaint is dismissed for lack of merit.
Considering that Dr. Bangayan and Mrs. Martinez are not totally blameless in the light of
the fact that the deal happened outhide the premises of respondent company and that
their act of giving P3,800.00 without any receipt is tantamount to corruption of public
officers, complainant must be given one month pay for every year of service as financial
assistance.
Both the petitioner and the private respondent appealed to the National Labor Relations
Board, which upheld the said decision in toto and dismissed the appeals.  The private
respondent took no further action, thereby impliedly accepting the validity of her
dismissal. The petitioner, however, is now before us to question the affirmance of the
above- quoted award as having been made with grave abuse of discretion.
The position of the petitioner is simply stated: It is conceded that an employee illegally
dismissed is entitled to reinstatement and backwages as required by the labor laws.
However, an employee dismissed for cause is entitled to neither reinstatement nor
backwages and is not allowed any relief at all because his dismissal is in accordance
with law. In the case of the private respondent, she has been awarded financial
assistance equivalent to ten months pay corresponding to her 10 year service in the
company despite her removal for cause. She is, therefore, in effect rewarded rather
than punished for her dishonesty, and without any legal authorization or justification.
The award is made on the ground of equity and compassion, which cannot be a
substitute for law. Moreover, such award puts a premium on dishonesty and
encourages instead of deterring corruption.

12
For its part, the public respondent claims that the employee is sufficiently punished with
her dismissal. The grant of financial assistance is not intended as a reward for her
offense but merely to help her for the loss of her employment after working faithfully with
the company for ten years. In support of this position, the Solicitor General cites the
cases of Firestone Tire and Rubber Company of the Philippines v. Lariosa and Soco v.
Mercantile Corporation of Davao, where the employees were dismissed for cause but
were nevertheless allowed separation pay on grounds of social and compassionate
justice.
Issue: WON Separation pay is proper.
Held:
We hold that henceforth separation pay shall be allowed as a measure of social justice
only in those instances where the employee is validly dismissed for causes other than
serious misconduct or those reflecting on his moral character. Where the reason for the
valid dismissal is, for example, habitual intoxication or an offense involving moral
turpitude, like theft or illicit sexual relations with a fellow worker, the employer may not
be required to give the dismissed employee separation pay, or financial assistance, or
whatever other name it is called, on the ground of social justice.
A contrary rule would, as the petitioner correctly argues, have the effect, of rewarding
rather than punishing the erring employee for his offense. And we do not agree that the
punishment is his dismissal only and that the separation pay has nothing to do with the
wrong he has committed. Of course it has. Indeed, if the employee who steals from the
company is granted separation pay even as he is validly dismissed, it is not unlikely that
he will commit a similar offense in his next employment because he thinks he can
expect a like leniency if he is again found out. This kind of misplaced compassion is not
going to do labor in general any good as it will encourage the infiltration of its ranks by
those who do not deserve the protection and concern of the Constitution.
The policy of social justice is not intended to countenance wrongdoing simply because it
is committed by the underprivileged. At best it may mitigate the penalty but it certainly
will not condone the offense. Compassion for the poor is an imperative of every humane
society but only when the recipient is not a rascal claiming an undeserved privilege.
Social justice cannot be permitted to be refuge of scoundrels any more than can equity
be an impediment to the punishment of the guilty. Those who invoke social justice may
do so only if their hands are clean and their motives blameless and not simply because
they happen to be poor. This great policy of our Constitution is not meant for the
protection of those who have proved they are not worthy of it, like the workers who have
tainted the cause of labor with the blemishes of their own character.
Applying the above considerations, we hold that the grant of separation pay in the case
at bar is unjustified. The private respondent has been dismissed for dishonesty, as
found by the labor arbiter and affirmed by the NLRC and as she herself has impliedly
admitted. The fact that she has worked with the PLDT for more than a decade, if it is to

13
be considered at all, should be taken against her as it reflects a regrettable lack of
loyalty that she should have strengthened instead of betraying during all of her 10 years
of service with the company. If regarded as a justification for moderating the penalty of
dismissal, it will actually become a prize for disloyalty, perverting the meaning of social
justice and undermining the efforts of labor to cleanse its ranks of all undesirables.
Petition granted
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TMPCWA VS. NLRC et al DIGEST
DECEMBER 21, 2016 ~ VBDIAZ
TOYOTA MOTOR PHILS. CORP. WORKERS ASSOC. (TMPCWA) NLRC, TOYOTA
MOTOR PHIL CORP et al
G.R. Nos. 158786 & 158789
October 19, 2007
FACTS: The Union filed a petition for certification election among the Toyota rank and
file employees with the National Conciliation and Mediation Board (NCMB). The Med-
Arbiter denied the petition, but, on appeal, the DOLE Secretary granted the Union’s
prayer, and, through an Order, directed the immediate holding of the certification
election.
After Toyota’s plea for reconsideration was denied, the certification election was
conducted. The Med-Arbiter’s Order certified the Union as the sole and exclusive
bargaining agent of all the Toyota rank and file employees. Toyota challenged said
Order via an appeal to the DOLE Secretary.
-STRIKE-
In the meantime, the Union submitted its CBA proposals to Toyota, but the latter
refused to negotiate in view of its pending appeal. Consequently, the Union filed
a notice of strike with the NCMB based on Toyota’s refusal to bargain. In connection
with Toyota’s appeal, Toyota and the Union were required to attend a hearing on before
the Bureau of Labor Relations (BLR). The February 21, 2001 hearing was cancelled
and reset to February 22.
STRIKE 1: On February 21, 135 Union officers and members failed to render the
required overtime work, and instead marched to and staged a picket in front of the BLR
office. The Union, in a letter of the same date, also requested that its members be
allowed to be absent on February 22 to attend the hearing and instead work on their
next scheduled rest day. This request however was denied by Toyota.
Despite denial of the Union’s request, more than 200 employees staged mass
actions on February 22 and 23 in front of the BLR and the DOLE offices, to protest the

14
partisan and anti-union stance of Toyota. Due to the deliberate absence of a
considerable number of employees on February 22 to 23, Toyota experienced acute
lack of manpower in its manufacturing and production lines, and was unable to meet its
production goals resulting in huge losses.
On February 27,  Toyota sent individual letters to some 360 employees requiring them
to explain within 24 hours why they should not be dismissed for their obstinate defiance
of the company’s directive to render overtime work on February 21, for their failure to
report for work on February 22 and 23, and for their participation in the concerted
actions which severely disrupted and paralyzed the plant’s operations. These letters
specifically cited Section D, paragraph 6 of the Company’s Code of Conduct, to wit:
xx
Inciting or participating in riots, disorders, alleged strikes, or concerted actions
detrimental to [Toyota’s] interest.
1st offense – dismissal.11
xx
On the next day, the Union filed with the NCMB another notice of strike for union
busting amounting to unfair labor practice.
On March 1,  the Union nonetheless submitted an explanation in compliance with the
February 27 notices sent by Toyota to the erring employees. Consequently, on March 2
and 5, Toyota issued 2 memoranda to the concerned employees to clarify whether or
not they are adopting the March 1, 2001 Union’s explanation as their own. The
employees were also required to attend an investigative interview, but they refused to
do so.
On March 16, Toyota terminated the employment of 227 employees for participation in
concerted actions in violation of its Code of Conduct and for misconduct under Article
282 of the Labor Code.
STRIKE 2: In reaction to the dismissal of its union members and officers, the Union
went on strike on March 17. Subsequently, from March 28 to April 12,  the Union
intensified its strike by barricading the gates of Toyota’s Bicutan and Sta. Rosa plants.
The strikers prevented workers who reported for work from entering the plants.
On March 29, Toyota filed a petition for injunction with a prayer for the issuance of a
TRO with the NLRC. It sought free ingress to and egress from its Bicutan and Sta. Rosa
manufacturing plants. Acting on said petition, the NLRC issued a TRO against the
Union, ordering its leaders and members as well as its sympathizers to remove their
barricades and all forms of obstruction to ensure free ingress to and egress from the
company’s premises.

15
Meanwhile, Toyota filed a petition to declare the strike illegal with the NLRC arbitration
branch, , and prayed that the erring Union officers, directors, and members be
dismissed.
On April 10,  the DOLE Secretary assumed jurisdiction over the labor dispute and
issued an Order certifying the labor dispute to the NLRC. In said Order, the DOLE
Secretary directed all striking workers to return to work at their regular shifts by April 16.
On the other hand, it ordered Toyota to accept the returning employees under the same
terms and conditions obtaining prior to the strike or at its option, put them under payroll
reinstatement. The parties were also enjoined from committing acts that may worsen
the situation.
The Union ended the strike on April 12. The union members and officers tried to return
to work on April 16 but were told that Toyota opted for payroll-reinstatement authorized
by the Order of the DOLE Secretary.
STRIKE 3: Meanwhile, on May 23, despite the issuance of the DOLE Secretary’s
certification Order, several payroll-reinstated members of the Union staged a protest
rally in front of Toyota’s Bicutan Plant bearing placards and streamers in defiance of the
April 10 Order. Then, on May 28, around Union members staged another protest action
in front of the Bicutan Plant. At the same time, some payroll-reinstated employees
picketed in front of the Santa Rosa Plant’s main entrance, and were later joined by other
Union members.
On June 5, notwithstanding the certification Order, the Union filed another notice of
strike.
—
In the meantime, the NLRC ordered both parties to submit their respective position
papers on June 8. The union, however, requested for abeyance of the proceedings
considering that there is a pending petition for certiorari with the CA assailing the validity
of the DOLE Secretary’s Assumption of Jurisdiction Order.
Thereafter, on June 19, the NLRC issued an Order, reiterating its previous order for
both parties to submit their respective position papers on or before June 2, 2001. Only
Toyota submitted its position paper. During the August 3, 2001 hearing, the Union,
despite several accommodations, still failed to submit its position paper. Later that day,
the Union claimed it filed its position paper by registered mail.
NLRC decision
Subsequently, the NLRC, in its August 9 Decision, declared the strikes staged by the
Union on February 21 to 23 (as the Union failed to comply with the procedural
requirements of a valid strike under Art. 263 of the Labor Code) and May 23 and
28 as illegal and Declared that the dismissal of the 227 who participated in the illegal

16
strike on February 21-23 is legal. Lastly, award of severance compensation was given
to the dismissed Union members
After the DOLE Secretary assumed jurisdiction over the Toyota dispute on April 10, the
Union again staged strikes on May 23 and 28. The NLRC found the strikes illegal as
they violated Art. 264 of the Labor Code which proscribes any strike or lockout after
jurisdiction is assumed over the dispute by the President or the DOLE Secretary.
The NLRC held that both parties must have maintained the status quo after the DOLE
Secretary issued the assumption/certification Order, and ruled that the Union did not
respect the DOLE Secretary’s directive.
Accordingly, both Toyota and the Union filed MRs, which the NLRC denied.
Consequently, both parties questioned the Resolutions of the NLRC in separate
petitions for certiorari filed with the CA. The CA then consolidated the petitions.
[In its February 27, 2003 Decision, the CA ruled that the Union’s petition is defective in
form for its failure to append a proper verification and certificate of non-forum shopping,
given that, out of the 227 petitioners, only 159 signed the verification and certificate of
non-forum shopping. Despite the flaw, the CA proceeded to resolve the petitions on the
merits and affirmed the assailed NLRC Decision and Resolution with a modification,
however, of deleting the award of severance compensation to the dismissed Union
members.
However, in its June 20, 2003 Resolution, the CA modified its February 27, 2003
Decision by reinstating severance compensation to the dismissed employees based on
social justice.]
ISSUE:
(1) Whether the mass actions committed by the Union on different occasions are illegal
strikes; and
(2) Whether separation pay should be awarded to the Union members who participated
in the illegal strikes.
HELD: WHEREFORE, the petitions in G.R. Nos. 158786 and 158789 are DENIED while
those in G.R. Nos. 158798-99 are GRANTED.
The June 20, 2003 CA Resolution restoring the grant of severance compensation is
ANNULLED and SET ASIDE.
The February 27, 2003 CA Decision which affirmed the August 9, 2001 Decision of the
NLRC but deleted the grant of severance compensation, is REINSTATED and
AFFIRMED.
YES, THERE IS ILLEGAL STRIKE

17
A strike means any temporary stoppage of work by the concerted action of employees
as a result of an industrial or labor dispute. A labor dispute, in turn, includes any
controversy or matter concerning terms or 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 whether the disputants stand in
the proximate relation of the employer and the employee
Noted authority on labor law, Ludwig Teller, lists six (6) categories of an illegal strike,
viz:
(1) [when it] is contrary to a specific prohibition of law, such as strike by employees
performing governmental functions; or
(2) [when it] violates a specific requirement of law[, such as Article 263 of the Labor
Code on the requisites of a valid strike]; or
(3) [when it] is declared for an unlawful purpose, such as inducing the employer to
commit an unfair labor practice against non-union employees; or
(4) [when it] employs unlawful means in the pursuit of its objective, such as a
widespread terrorism of non-strikers [for example, prohibited acts under Art. 264(e) of
the Labor Code]; or
(5) [when it] is declared in violation of an existing injunction[, such as injunction,
prohibition, or order issued by the DOLE Secretary and the NLRC under Art. 263 of the
Labor Code]; or
(6) [when it] is contrary to an existing agreement, such as a no-strike clause or
conclusive arbitration clause
Petitioner Union contends that the protests or rallies conducted on February 21 and 23
are not within the ambit of strikes as defined in the Labor Code, since they were
legitimate exercises of their right to peaceably assemble and petition the government for
redress of grievances. The Union’s position fails to convince us.
Applying pertinent legal provisions and jurisprudence, we rule that the protest actions
undertaken by the Union officials and members on February 21 to 23 are not valid and
proper exercises of their right to assemble and ask government for redress of their
complaints, but are illegal strikes in breach of the Labor Code. The Union’s position is
weakened by the lack of permit from the City of Manila to hold “rallies.” Shrouded as
demonstrations, they were in reality temporary stoppages of work perpetrated through
the concerted action of the employees who deliberately failed to report for work on the
convenient excuse that they will hold a rally at the BLR and DOLE offices on February
21 to 23. The purported reason for these protest actions was to safeguard their rights
against any abuse which the med-arbiter may commit against their cause. However, the
Union failed to advance convincing proof that the med-arbiter was biased against them.
The acts of the med-arbiter in the performance of his duties are presumed regular. Sans

18
ample evidence to the contrary, the Union was unable to justify the February 2001 mass
actions. What comes to the fore is that the decision not to work for two days
was designed and calculated to cripple the manufacturing arm of Toyota. It becomes
obvious that the real and ultimate goal of the Union is to coerce Toyota to finally
acknowledge the Union as the sole bargaining agent of the company. This is not a legal
and valid exercise of the right of assembly and to demand redress of grievance.
It is obvious that the February 21 to 23 concerted actions were undertaken without
satisfying the prerequisites for a valid strike under Art. 263 of the Labor Code. The
Union failed to comply with the following requirements:
(1) a notice of strike filed with the DOLE 30 days before the intended date of strike, or
15 days in case of unfair labor practice;
(2) strike vote approved by a majority of the total union membership in the bargaining
unit concerned obtained by secret ballot in a meeting called for that purpose; and
(3) notice given to the DOLE of the results of the voting at least seven days before the
intended strike. These requirements are mandatory and the failure of a union to comply
with them renders the strike illegal.
The evident intention of the law in requiring the strike notice and the strike-vote report is
to reasonably regulate the right to strike, which is essential to the attainment of
legitimate policy objectives embodied in the law. As they failed to conform to the law,
the strikes on February 21, 22, and 23 (STRIKE 1) were illegal.
With respect to the strikes committed from March 17 to April 12 (STRIKE 2),  those
were initially legal as the legal requirements were met. However, on March 28 to April
12, the Union barricaded the gates of the Bicutan and Sta. Rosa plants and blocked the
free ingress to and egress from the company premises. Toyota employees, customers,
and other people having business with the company were intimidated and were refused
entry to the plants. As earlier explained, these strikes were illegal because unlawful
means were employed. The acts of the Union officers and members are in palpable
violation of Art. 264(e), which proscribes acts of violence, coercion, or intimidation, or
which obstruct the free ingress to and egress from the company premises. Undeniably,
the strikes from March 28 to April 12 (STRIKE 2) were illegal.
Petitioner Union also posits that strikes were not committed on May 23 and 28 (STRIKE
3). The Union asserts that the rallies held on May 23 and 28 could not be considered
strikes, as the participants were the dismissed employees who were on payroll
reinstatement. It concludes that there was no work stoppage.
This contention has no basis. It is clear that once the DOLE Secretary assumes
jurisdiction over the labor dispute and certifies the case for compulsory arbitration with
the NLRC, the parties have to revert to the status quo ante (the state of things as it was
before).

19
This was not heeded by the Union and the individual respondents who staged illegal
concerted actions on May 23 and 28, in contravention of the Order of the DOLE
Secretary that no acts should be undertaken by them to aggravate the “already
deteriorated situation.”
Anent the grant of severance compensation to legally dismissed union members:
The general rule is that when just causes for terminating the services of an employee
under Art. 282 of the Labor Code exist, the employee is not entitled to separation pay.
As in any rule, there are exceptions. One exception where separation pay is given even
though an employee is validly dismissed is when the court finds justification in applying
the principle of social justice well entrenched in the 1987 Constitution. In one case, the
Court laid down the rule that severance compensation shall be allowed only when the
cause of the dismissal is other than serious misconduct or that which reflects adversely
on the employee’s moral character.
Explicit in PLDT ase are two exceptions when the NLRC or the courts should not grant
separation pay based on social justice:
serious misconduct (which is the first ground for dismissal under Art. 282) or
acts that reflect on the moral character of the employee.
Considering that the dismissal of the employees was due to their participation in the
illegal strikes as well as violation of the Code of Conduct of the company, the same
constitutes serious misconduct. A serious misconduct is a transgression of some
established and definite rule of action, a forbidden act, a dereliction of duty, willful in
character, and implies wrongful intent and not mere error in judgment.
Based on existing jurisprudence, the award of separation pay to the Union officials and
members in the instant petitions cannot be sustained.
NOTES:
The Union contends that the NLRC violated its right to due process when it disregarded
its position paper in deciding Toyota’s petition to declare the strike illegal.
We rule otherwise.
It is entirely the Union’s fault that its position paper was not considered by the NLRC.
Records readily reveal that the NLRC was even too generous in affording due process
to the Union. It issued no less than 3 orders for the parties to submit its position papers,
which the Union ignored until the last minute. No sufficient justification was offered why
the Union belatedly filed its position paper. In Datu Eduardo Ampo v. The Hon. Court of
Appeals, it was explained that a party cannot complain of deprivation of due process if
he was afforded an opportunity to participate in the proceedings but failed to do so. If he
does not avail himself of the chance to be heard, then it is deemed waived or forfeited

20
without violating the constitutional guarantee. Thus, there was no violation of the
Union’s right to due process on the part of the NLRC.
CIVIL PROCEDURE GUYS! HEHE
On a procedural aspect, the Union faults the CA for treating its petition as an unsigned
pleading and posits that the verification signed by 159 out of the 227 petitioners has
already substantially complied with and satisfied the requirements under Secs. 4 and 5
of Rule 7 of the ROC.
The Union’s proposition is partly correct.
Sec. 4 of Rule 7 of the ROC states:
Sec. 4. Verification.—Except when otherwise specifically required by law or rule,
pleadings need not be under oath, verified or accompanied by affidavit.
A pleading is verified by an affidavit that the affiant has read the pleading and that the
allegations therein are true and correct of his personal knowledge or based on authentic
records.
A pleading required to be verified which contains a verification based on “information
and belief” or upon “knowledge, information and belief,” or lacks a proper verification,
shall be treated as an unsigned pleading.
The verification requirement is significant, as it is intended to secure an assurance that
the allegations in the pleading are true and correct and not the product of the
imagination or a matter of speculation.30 This requirement is simply a condition
affecting the form of pleadings, and noncompliance with the requirement does not
necessarily render it fatally defective. Indeed, verification is only a formal and not a
jurisdictional requirement.
In this case, the problem is not the absence but the adequacy of the Union’s verification,
since only 159 out of the 227 petitioners executed the verification. Undeniably, the
petition meets the requirement on the verification with respect to the 159 petitioners who
executed the verification, attesting that they have sufficient knowledge of the truth and
correctness of the allegations of the petition. However, their signatures cannot be
considered as verification of the petition by the other 68 named petitioners unless the
latter gave written authorization to the 159 petitioners to sign the verification on their
behalf. Thus, in Loquias v. Office of the Ombudsman, we ruled that the petition satisfies
the formal requirements only with regard to the petitioner who signed the petition but not
his co-petitioner who did not sign nor authorize the other petitioner to sign it on his
behalf. The proper ruling in this situation is to consider the petition as compliant with the
formal requirements with respect to the parties who signed it and, therefore, can be
given due course only with regard to them. The other petitioners who did not sign the
verification and certificate against forum shopping cannot be recognized as petitioners

21
have no legal standing before the Court. The petition should be dismissed outright with
respect to the non-conforming petitioners.
In the case at bench, however, the CA, in the exercise of sound discretion,
did not strictly apply the ruling in Loquias and instead proceeded to decide the case on
the merits.
Union officers are liable for unlawful strikes or illegal acts during a strike. Art. 264(a)
sanctions the dismissal of a union officer who knowingly participates in an illegal strike
or who knowingly participates in the commission of illegal acts during a lawful strike.
The rule is well entrenched in this jurisdiction that factual findings of the labor tribunal,
when affirmed by the appellate court, are generally accorded great respect, even finality
Member’s liability depends on participation in illegal acts. Art. 264(a) of the Labor Code
provides that a member is liable when he knowingly participates in an illegal act “during
a strike.” While the provision is silent on whether the strike is legal or illegal, we find that
the same is irrelevant.
Now, what are considered “illegal acts” under Art. 264(a)?
No precise meaning was given to the phrase “illegal acts.” It may encompass a number
of acts that violate existing labor or criminal laws, such as the following:
(1) Violation of Art. 264(e) of the Labor Code which provides that “[n]o person engaged
in picketing shall commit any act of violence, coercion or intimidation or obstruct the free
ingress to or egress from the employer’s premises for lawful purposes, or obstruct
public thoroughfares”;
(2) Commission of crimes and other unlawful acts in carrying out the strike;54 and
(3) Violation of any order, prohibition, or injunction issued by the DOLE Secretary or
NLRC in connection with the assumption of jurisdiction/certification Order under Art.
263(g) of the Labor Code.
As earlier explained, this enumeration is not exclusive and it may cover other breaches
of existing laws.
However, There must be proof that he committed illegal acts during the strike and the
striker who participated in the commission of illegal act[s] must be identified. But proof
beyond reasonable doubt is not required. Substantial evidence available under the
circumstances, which may justify the imposition of the penalty of dismissal, may suffice.
Noted labor law expert, Professor Cesario A. Azucena, Jr., traced the history relating to
the liability of a union member in an illegal strike, starting with the “rule of vicarious
liability,” thus:
Under [the rule of vicarious liability], mere membership in a labor union serves as basis
of liability for acts of individuals, or for a labor activity, done on behalf of the union. The

22
union member is made liable on the theory that all the members are engaged in a
general conspiracy, and the unlawful acts of the particular members are viewed as
necessary incidents of the conspiracy. It has been said that in the absence of statute
providing otherwise, the rule of vicarious liability applies.
Even the Industrial Peace Act, however, which was in effect from 1953 to 1974,
did not adopt the vicarious liability concept. It expressly provided that:
No officer or member of any association or organization, and no association or
organization participating or interested in a labor dispute shall be held responsible or
liable for the unlawful acts of individual officers, members, or agents, except upon proof
of actual participation in, or actual authorization of, such acts or of ratifying of such acts
after actual knowledge thereof.
Replacing the Industrial Peace Act, the Labor Code has not adopted the vicarious
liability rule

G.R. No. L-58639 August 12, 1987

CEBU ROYAL PLANT (SAN MIGUEL CORPORATION), petitioner,
vs.
THE HONORABLE DEPUTY MINISTER OF LABOR and RAMON
PILONES, respondents.

CRUZ, J.:
The private respondent was removed by the petitioner and complained to the Ministry of
Labor. His complaint was dismissed by the regional director, who was, however,
reversed by the public respondent. Required to reinstate the separated employee and
pay him back wages, the petitioner has come to us, faulting the Deputy Minister with
grave abuse of discretion. We have issued in the meantime a temporary restraining
order. 1
The public respondent held that Ramon Pilones, the private respondent, was already a
permanent employee at the time of his dismissal and so was entitled to security of
tenure. The alleged ground for his removal, to wit, "pulmonary tuberculosis minimal,"
was not certified as incurable within six months as to justify his
separation. 2 Additionally, the private respondent insists that the petitioner should have
first obtained a clearance, as required by the regulations then in force, for the
termination of his employment.
The petitioner for its part claims that the private respondent was still on probation at the
time of his dismissal and so had no security of tenure. His dismissal was not only in
conformity with company policy but also necessary for the protection of the public

23
health, as he was handling ingredients in the processing of soft drinks which were being
sold to the public. It is also argued that the findings of the regional director, who had
direct access to the facts, should not have been disturbed on appeal. For these same
reasons, it contends, the employee's reinstatement as ordered by the public respondent
should not be allowed.
The original findings were contained in a one-page order 3 reciting simply that
"complainant was employed on a probationary period of employment for six (6) months.
After said period, he underwent medical examination for qualification as regular
employee but the results showed that he is suffering from PTB minimal. Consequently,
he was informed of the termination of his employment by respondent." The order then
concluded that the termination was "justified." That was all.
As there is no mention of the basis of the above order, we may assume it was the
temporary payroll authority 4 submitted by the petitioner showing that the private
respondent was employed on probation on February 16, 1978. Even supposing that it is
not self- serving, we find nevertheless that it is self-defeating. The six-month period of
probation started from the said date of appointment and so ended on August 17, 1978,
but it is not shown that the private respondent's employment also ended then; on the
contrary, he continued working as usual. Under Article 282 of the Labor Code, "an
employee who is allowed to work after a probationary period shall be considered a
regular employee." Hence, Pilones was already on permanent status when he was
dismissed on August 21, 1978, or four days after he ceased to be a probationer.
The petitioner claims it could not have dismissed the private respondent earlier because
the x-ray examination was made only on August 17, 1978, and the results were not
immediately available. That excuse is untenable. We note that when the petitioner had
all of six months during which to conduct such examination, it chose to wait until exactly
the last day of the probation period. In the light of such delay, its protestations now that
reinstatement of Pilones would prejudice public health cannot but sound hollow and
hypocritical. By its own implied admission, the petitioner had exposed its customers to
the employee's disease because of its failure to examine him before entrusting him with
the functions of a "syrup man." Its belated concern for the consuming public is hardly
persuasive, if not clearly insincere and self-righteous.
There is proof in fact that the private respondent was first hired not on February 16,
1978, but earlier in 1977. This is the 1977 withholding tax statement 5 issued for him by
the petitioner itself which it does not and cannot deny. The petitioner stresses that this is
the only evidence of the private respondent's earlier service and notes that he has not
presented any co-worker to substantiate his claim. This is perfectly understandable.
Given the natural reluctance of many workers to antagonize their employers, we need
not wonder why none of them testified against the petitioner.
We are satisfied that whether his employment began on February 16, 1978, or even
earlier as he claims, the private respondent was already a regular employee when he

24
was dismissed on August 21, 1978. As such, he could validly claim the security of
tenure guaranteed to him by the Constitution and the Labor Code.
The applicable rule on the ground for dismissal invoked against him is Section 8, Rule I,
Book VI, of the Rules and Regulations Implementing the Labor Code reading as follows:
Sec. 8. Disease as a ground for dismissal. — Where the employee suffers from a
disease and his continued employment is prohibited by law or prejudicial to his health or
to the health of his co-employees, the employer shall not terminate his employment
unless there is a certification by a competent public health authority that the disease is
of such nature or at such a stage that it cannot be cured within a period of six (6)
months even with proper medical treatment. If the disease or ailment can be cured
within the period, the employer shall not terminate the employee but shall ask the
employee to take a leave. The employer shall reinstate such employee to his former
position immediately upon the restoration of his normal health.
The record does not contain the certification required by the above rule. The medical
certificate offered by the petitioner came from its own physician, who was not a
"competent public health authority," and merely stated the employee's disease, without
more. We may surmise that if the required certification was not presented, it was
because the disease was not of such a nature or seriousness that it could not be cured
within a period of six months even with proper medical treatment. If so, dismissal was
unquestionably a severe and unlawful sanction.
It is also worth noting that the petitioner's application for clearance to terminate the
employment of the private respondent was filed with the Ministry of Labor only on
August 28, 1978, or seven days after his dismissal. 6 As the NLRC has repeatedly and
correctly said, the prior clearance rule (which was in force at that time) was not a "trivial
technicality." It required "not just the mere filing of a petition or the mere attempt to
procure a clearance" but that "the said clearance be obtained prior to the operative act
of termination. 7
We agree that there was here an attempt to circumvent the law by separating the
employee after five months' service to prevent him from becoming a regular employee,
and then rehiring him on probation, again without security of tenure. We cannot permit
this subterfuge if we are to be true to the spirit and mandate of social justice. On the
other hand, we have also the health of the public and of the dismissed employee
himself to consider. Hence, although we must rule in favor of his reinstatement, this
must be conditioned on his fitness to resume his work, as certified by competent
authority.
We take this opportunity to reaffirm our concern for the lowly worker who, often at the
mercy of his employers, must look up to the law for his protection. Fittingly, that law
regards him with tenderness and even favor and always with faith and hope in his
capacity to help in shaping the nation's future. It is error to take him for granted. He
deserves our abiding respect. How society treats him will determine whether the knife in

25
his hands shall be a caring tool for beauty and progress or an angry weapon of defiance
and revenge. The choice is obvious, of course. If we cherish him as we should, we must
resolve to lighten "the weight of centuries" of exploitation and disdain that bends his
back but does not bow his head.
WHEREFORE, the petition is DISMISSED and the temporary restraining order of
November 18, 1981, is LIFTED. The Order of the public respondent dated July 14,
1981, is AFFIRMED, but with the modification that the backwages shall be limited to
three years only and the private respondent shall be reinstated only upon certification by
a competent public health authority that he is fit to return to work. Costs against the
petitioner.
SO ORDERED.
624 Phil. 523

CARPIO MORALES, J.:

Respondent Jebsens Maritime, Inc. (represented by Ma. Theresa Gutay), on behalf of
its foreign principal co-respondent Atle Jebsens Management A/S, hired[2] on January
13, 2001 Rizaldy M. Quitoriano (petitioner) as 2nd Officer aboard the vessel M/V
Trimnes for a period of six months with a basic monthly salary of US$936.[3]

On May 23, 2001, petitioner, who was assigned as navigating officer from 12:00
midnight to 4:00 a.m. and port watcher from 12:00 midnight to 6:00 a.m., complained of
dizziness with severe headache, "general body weakness, chest pains, easy
fatigability," "weak grip strength," and "numbness on the left side of his body" and was
observed to be "dragging his left foot," "his mouth slightly down to one side," and his
speech "slurred."[4]

When the vessel berthed on May 26, 2001 at Port Huelva, Spain, petitioner was brought
to a hospital where he was diagnosed as suffering from "hypertension arterial" or "mild
stroke."[5] Since his health condition did not improve, petitioner was repatriated to the
Philippines on May 30, 2001 to undergo further medical examination and treatment.

Upon arrival in Manila, petitioner underwent several tests at the Medical Center Manila
under the care of Dr. Nicomedes G. Cruz (Dr. Cruz), the company-designated
physician. On June 6, 2001, Dr. Cruz, noting that petitioner "still complain[ed] of chest
pain and easy fatigability,"[6] gave the following diagnosis, medications and
recommendation:

26
DIAGNOSIS:
Hypertension
Transient ischemic attack

MEDICATIONS:
Diovan 80mg/capsule once daily
Sulodexide one tablet two times daily
Aspilet one tablet once daily

RECOMMENDATION:
Cranial CT scan
Carotid Doppler
He is advised to come back on June 14, 2001.[7]

On November 16, 2001 or 169 days after petitioner's repatriation, Dr. Cruz issued a

medical report declaring him "fit to work," thus:

The patient has no nuchal pain, headache, chest pain and dizziness noted. His blood
pressure is normal at 130/87. There is no motor or sensory deficit noted. Triglycerides
and routine urinalysis were within normal limits. He was evaluated by our cardiologist
and neurologist who allowed him to resume his previous activities.

DIAGNOSIS:
Hypertension
Cerebrovascular disease, right internal capsule probably ischemic or infarct

He is fit to work effective today, November 16, 2001.[8] (emphasis and underscoring

supplied)

Petitioner later sought the opinion of an independent internist-cardiologist, Dr. Sharon A.

Lacson of the Philippine Heart Center, who diagnosed him as suffering from
"hypertension cardiovascular disease and hyperlipidemia."[9] Dr. Abdias V. Aquino of
the same hospital also found him to have "cerebral infarction, R, basal ganglia
area."[10]

Petitioner thereupon repeatedly asked respondents for full permanent disability

compensation but was unsuccessful. He thus filed on February 26, 2002 a complaint to
recover permanent total disability compensation of US$80,000, as provided for in the
Collective Bargaining Agreement (CBA) forged with respondents, and attorney's fees
before the National Labor Relations Commission (NLRC) Arbitration Office in Quezon

27
City, docketed as NLRC-NCR OFW Case No. 02-02-0561-00.[11]

Respondents disclaimed petitioner's entitlement to any disability benefits in view of the

company-designated physician's certification that he is fit to work.[12] Petitioner
countered, however, that the "fit to work" assessment did not reflect his real health
condition; and that his illness, given its delicate nature, could recur anytime once he
resumes sea duties.[13]

By Decision of July 5, 2004, Labor Arbiter Madjayran H. Ajan dismissed petitioner's

complaint, finding that petitioner "ha[d] recovered from his disability" based on the
company-designated physician's "fit to work" certification.[14]

On appeal by petitioner, the NLRC, by Decision[15] of August 31,

2005, affirmed with modification the Labor Arbiter's findings by ordering respondents to
"allow [petitioner] to resume sea duty," thus:

Since x x x the Labor Arbiter based his decision on the opinion of the company-
designated physician that appellant was declared "fit to work" to resume sea duty, We
have no reason to disturb his finding, x x x.

But complainant should be allowed to resume sea duty considering the fit to work
findings of the company-designated physician.

WHEREFORE, premises considered, judgment is rendered affirming the assailed

decision of the Labor Arbiter with slight modification by ordering the respondents to
allow complainant to resume sea duty.

SO ORDERED.[16] (Underscoring and emphasis supplied)

Petitioner's Motion for Reconsideration of the NLRC decision having been denied by
Resolution of December 28, 2005, he brought the case on Certiorari to the Court of
Appeals which, by Decision[17] of March 8, 2007 in CA-G.R. SP No. 93332, affirmed
the NLRC decision, and by Resolution of September 14, 2007,[18] denied his Motion for
Reconsideration thereof.

Hence, the present Petition for Review on Certiorari, petitioner faulting the Court of
Appeals for not finding that his disability is considered permanent and total, and for not
awarding him attorney's fees.

The petition is impressed with merit.

28
In accordance with the avowed policy of the State to give maximum aid and full
protection to labor, the Court has applied the Labor Code concept of permanent total
disability to Filipino seafarers,[19] it holding that the notion of disability is intimately
related to the worker's capacity to earn, what is compensated being not his injury or
illness but his inability to work resulting in the impairment of his earning capacity; hence,
disability should be understood less on its medical significance but more on the loss of
earning capacity.[20]

The standard employment contract for seafarers was formulated by the POEA pursuant
to its mandate under E.O. No. 247 to "secure the best terms and conditions of
employment of Filipino contract workers and ensure compliance therewith" and to
"promote and protect the well-being of Filipino workers overseas." Even without this
provision, a contract of labor is so impressed with public interest that the New Civil
Code expressly subjects it to "the special laws on labor unions, collective bargaining,
strikes and lockouts, closed shop, wages, working conditions, hours of labor and similar
subjects" (Art. 1700).

Thus, the Court has applied the Labor Code concept of permanent total disability to the
case of seafarers. x x x.

xxxx

There are three kinds of disability benefits under the Labor Code, as amended by P.D.
No. 626: (1) temporary total disability, (2) permanent total disability, and (3) permanent
partial disability. Section 2, Rule VII of the Implementing Rules of Book V of the Labor
Code differentiates the disabilities as follows:

Sec. 2. Disability.- (a) A total disability is temporary if as a result of the injury or sickness
the employee is unable to perform any gainful occupation for a continuous period not
exceeding 120 days, except as otherwise provided for in Rule X of these Rules.

(b) A disability is total and permanent if as a result of the injury or sickness the
employee is unable to perform any gainful occupation for a continuous period exceeding
120 days, except as otherwise provided for in Rule X of these Rules.

(c) A disability is partial and permanent if as a result of the injury or sickness the
employee suffers a permanent partial loss of the use of any part of his body.

In Vicente v. ECC (G.R. No. 85024, January 23, 1991, 193 SCRA 190, 195):

29
x x x the test of whether or not an employee suffers from `permanent total disability' is a
showing of the capacity of the employee to continue performing his work
notwithstanding the disability he incurred. Thus, if by reason of the injury or sickness he
sustained, the employee is unable to perform his customary job for more than 120
days and he does not come within the coverage of Rule X of the Amended Rules on
Employees Compensability (which, in more detailed manner, describes what constitutes
temporary total disability), then the said employee undoubtedly suffers from `permanent
total disability' regardless of whether or not he loses the use of any part of his body.

A total disability does not require that the employee be absolutely disabled or totally
paralyzed. What is necessary is that the injury must be such that the employee cannot
pursue his usual work and earn therefrom (Austria v. Court of Appeals, G.R. No.
146636, Aug. 12, 2002, 387 SCRA 216, 221). On the other hand, a total disability
is considered permanent if it lasts continuously for more than 120 days. Thus, in the
very recent case of Crystal Shipping, Inc. v. Natividad (G.R. No. 134028, December 17,
1999, 321 SCRA 268, 270-271), we held:

Permanent disability is inability of a worker to perform his job for more than 120 days,
regardless of whether or not he loses the use of any part of his body. x x x.

Total disability, on the other hand, means the disablement of an employee to earn

wages in the same kind of work of similar nature that he was trained for, or accustomed
to perform, or any kind of work which a person of his mentality and attainments could
do. It does not mean absolute helplessness. In disability compensation, it is not the
injury which is compensated, but rather it is the incapacity to work resulting in the
impairment of one's earning capacity.[21] (Emphasis and underscoring supplied)

Applying the standards reflected in the immediately quoted ruling of the Court vis-à-
vis the fact that it was only on November 16, 2001 that the "fit to work" certification was
issued by Dr. Cruz or more than five months from the time petitioner was medically
repatriated on May 30, 2001, petitioner's disability is considered permanent and total.

Significantly, it is gathered that petitioner remained unemployed even after he filed on

February 26, 2002 his complaint to recover permanent total disability compensation and
despite the August 31, 2005 Decision of the NLRC which was affirmed by the Court of
Appeals, ordering respondents to "allow complainant to resume sea duty."

That petitioner was not likely to fully recover from his disability is mirrored by the Labor

30
Arbiter's finding that his illness would possibly recur once he resumes his sea duties.
Such finding could account why petitioner was not re-deployed by respondents.[22]

Petitioner's disability being then permanent and total, he is "entitled to 100%

compensation, i.e., US$80,000 for officers," as stipulated in par. 20.1.7 of the parties'
CBA.[23]

Petitioner, having been compelled to litigate due to respondents' failure to satisfy his
valid claim, is also entitled to attorney's fees of ten percent (10%) of the total award at
its peso equivalent at the time of actual payment, following prevailing jurisprudence.[24]

WHEREFORE, the March 8, 2007 Decision and September 14, 2007 Resolution of the
Court of Appeals in CA-G.R. SP No. 93332 are REVERSED and SET ASIDE.
Respondents are held jointly and severally liable to pay petitioner 1) permanent total
disability benefits of US$80,000.00 at its peso equivalent at the time of actual payment;
and 2) attorney's fees of ten percent (10%) of the total monetary award at its peso
equivalent at the time of actual payment.

Digested Cases in Labor Law

CALALANG v. WILLIAMS, 70 PHIL 726, GR No. 47800, December 2, 1940
 
FACTS:  The National Traffic Commission resolved that animal-drawn vehicles be
prohibited from passing along some major streets such a Rizal Ave. in Manila for a
period of one year from the date of the opening of the Colgante Bridge to traffic. The
Secretary of Public Works approved the resolution on August 10,1940. The Mayor of
Manila and the Acting Chief of Police of Manila have enforced the rules and regulation.
As a consequence, all animal-drawn vehicles are not allowed to pass and pick up
passengers in the places above mentioned to the detriment not only of their owners but
of the riding public as well.
 
ISSUE:  Does the rule infringe upon the constitutional precept regarding the promotion
of social justice? What is Social Justice?
 
HELD:  No. The regulation aims to promote safe transit and avoid obstructions on
national roads in the interest and convenience of the public. Persons and property may
be subject to all kinds of restraints and burdens in order to secure the general comfort,
health, and prosperity of the State. To this fundamental aims of the government, the
rights of the individual are subordinated.

31
Social justice is “neither communism, nor despotism, nor atomism, nor anarchy,” but the
humanization of laws and the equalization of social and economic forces by the State so
that justice in its rational and objectively secular conception may  at least be
approximated. Social justice means the promotion of the welfare of all the people, the
adoption by the Government of measures calculated to insure economic stability of all
the competent elements of society, through the maintenance of a proper economic and
social equilibrium in the interrelations of the members of the community, constitutionally,
through the adoption of measures legally justifiable, or extra-constitutionally, through the
exercise of powers underlying the existence of all governments on the time-honored
principles of Salus Populi est Suprema Lex.(Justice Laurel)
 
 
CASTOR-GARUPA v. ECC, 487 SCRA 171
 
FACTS:  Petitioner is resident physician in a hospital in Negros Oriental, who was
diagnosed of a kidney disease. After having her kidney transplant, she filed a work-
related sickness compensation claim with the respondent ECC through the GSIS, which
denied the same, arguing that the disease she contracted is not listed among the
occupational diseases determined by them to be compensable as work-related
sickness. Petitioner appealed contending that the bacteria causing the disease was
contracted while being employed in the hospital since symptoms have already
manifested since 1994, and relying upon the theory that her employment poses an
increased risk in contracting the diseases. 
 
ISSUE:  Is the contention of the petitioner correct?
 
HELD:  Yes. In determining whether an injury or sickness is work-related or not, what
the law requires is reasonable work connection, not a direct causal connection. It is
observed that the WCL has not ceased to be a social legislation, hence liberality of the
law in the form of the workingman or woman still prevails.
 
 
GSIS v. VALENCIANO, 487 SCRA 109
 
FACTS:  While being an employee of the Philippine Ports Authority, respondent was
inflicted with tuberculosis, hypertension and diabetes. He then filed with the petitioner
32
Government Service Insurance System (GSIS) a claim for compensation benefits under
PD No. 626. However, petitioner denied the respondent’s claim on the ground that the
ailments are not considered occupational diseases, and there is no clear evidence, such
as medical records, showing that he contracted the diseases during his work or his
duties have increased the risk of contracting said ailments. Petitioner rejected
respondent's contention that there is probability of contracting TB with the kind of job the
respondent has.
 
ISSUE:  How should PD 626 be applied with respect to determining compensability of
work-related diseases?
 
HELD:  A social legislation should interpreted liberally. In applying liberality in the
interpretation of Workmen's Compensation Law, the degree of proof required by the law
is such relevant evidence as a reasonable mind may accept to support a conclusion.
Probability, not certainty, is the touchstone. Any doubt on this matter has to be
interpreted in favor of the employees considering that PD 626 is a social legislation.
 
 
PRIMICIAS v. FUGUSO, 80 PHIL 71
 
FACTS: Mayor Fuguso refused to grant the petitioner and his party a permit to hold a
public meeting at Plaza Miranda, based on a city ordinance which grants the mayor the
discretion to regulate such conduct of public assemblies, as a lawful exercise of police
power.
 
ISSUE:  What is police power? How was it supposed to be exercised by the Manila City
Officials?
 
HELD:  Police Power is the power of the State to enact laws and prescribe regulations
that will promote the health, morals, education, good order, safety, and general welfare
of the People. However, in the exercise of police power the council may, in its
discretion, regulate the exercise of such rights in a reasonable manner, but cannot
suppress them, directly or indirectly, by attempting to commit the power of doing so to
the mayor or any other officer. The ordinance grants the mayor the power to regulate as
to how, when and where a public assembly should be held, but not the discretion to

33
refuse the grant of such permit to derogate the right of the petitioner to peaceably
assemble and seek redress against the government.
 
 
PASEI v DRILON, 163 SCRA 386
 
FACTS:  The Department of Labor and Employment issued an order suspending the
deployment of Filipino domestic and household workers, in view of the heightened
abuses committed against OFWs abroad. The petitioner, a local recruitment agency,
petitioned for the invalidation of such order for alleged violation of equal protection
clause.
 
ISSUE:  Is the deployment ban a valid exercise of police power? What is police power?
 
HELD:  Yes, the deployment ban of domestic helpers is a valid exercise of police power.
Police Power is the inherent power of the State to enact legislation that may interfere
with personal liberty and property in order to promote the general welfare.
 
 
CAPITOL MEDICAL CENTER (CMC) v. MERIS,
 
FACTS:  Petitioner closed its industrial service unit due to alleged loss and extinct
demand resulting to the termination of the employment of the respondent. The latter
filed an illegal dismissal case but the same was denied by the labor arbiter, and
subsequently by the NLRC contending that the same is part of the management
prerogative.
 
ISSUE:  Has employer the right to close its business even without basis resulting to the
displacement of the worker?
 
HELD:  No. Employers are also accorded with rights and privileges to assure their self-
determination and independence and reasonable return of capital. This mass of
privileges is called management prerogatives. Although they may be broad and

34
unlimited in scope, the State has the right to determine whether an employer's privilege
is exercised in a manner that complies with the legal requirements and does not offend
the protected rights of labor.
 
 
BREWMASTER INTERNATIONAL INC. v. NAFLU
 
FACTS:  Private respondent Estrada is a member of the respondent labor union. He did
not report for work for 1 month due to a grave family problem as his wife deserted him
and nobody was there to look after his children. He was required to explain. Finding his
reasons to be unjustified, the petitioner terminated him, since according to company
rules, absence for 6 consecutive days is considered abandonment of work.
 
ISSUE:  Should a worker be summarily dismissed relying on some company rules?
 
HELD:  No. While the employer is not precluded from prescribing rules and regulations
to govern the conduct of his employees, these rules and their implementation must be
fair, just and reasonable. No less than the Constitution looks with compassion on the
workingman and protects his rights not only under a general statement of a state policy
but under the Article on Social Justice and Human Rights, thus placing labor contracts
on a higher plane and with greater safeguards. Verily, relations between labor and
capital are not merely contractual. They are impressed with public interest and labor
contracts must, perforce, yield to the common good.
 
 
JAMER v. NLRC

FACTS:  Petitioners are cashiers of Isetann Department Store who were dismissed for
having accumulated shortages. Petitioners admitted this in their affidavits. The labor
arbiter ruled them having been illegally dismissed. The NLRC reversed the ruling.
 
ISSUE: Were the petitioners validly dismissed?
 

35
HELD:  Yes. The failure of the petitioners to report to the management the irregularities
constitute "fraud or willful breach of the trust reposed in them by their employer or duly
authorized representative"--one of the just causes of valid termination of employment.
The employer cannot be compelled to retain employees who were guilty of malfeasance
as their continued employment will be prejudicial to the former's best interest. The law,
in protecting the rights of the employees, authorizes neither oppression nor self-
destruction of the employer.
 
 
GANDARA MILL SUPPLY v. NLRC

FACTS:  Private respondent Silvestre Germane did not report for work because his wife
delivered their first child. He did not however notify his employer, causing a disruption in
the business of the latter. When the respondent returned to work he was surprised upon
knowing that someone has been hired to take his place.
 
ISSUE:  Was there a case of illegal dismissal?
 
HELD:  Yes. It appeared that the respondent was illegally dismissed. While a prolonged
absence without leave may constitute as a just cause for dismissal, its illegality stems
from the non-observance of due process. Applying the WenPhil Doctrine by analogy,
where dismissal was not preceded by the twin requirement of notice and hearing, the
illegality of the dismissal in question, is under heavy clouds and therefore illegal.
 
 
PHIL MOVIE PICTURES WORKERS ASSOC. v. PREMIERE PRODUCTIONS, 92 PHIL
843
 
FACTS:  Respondent filed 2 petitions with the CIR: 1.) to lay off its 44 employees on the
ground that the company is losing its operations, and 2.) to lease its equipment to
certain individuals. Judge Roldan of the CIR, after ocular inspection, approved the
petitions, thereby leaving the petitioners, if not unemployed, having nothing to do
because of absence of equipment in the studios. Petitioner assailed the ruling of the
judge, and appealed to the CIR en banc.
 

36
ISSUE:  Should the court grant a petition for mass dismissal without hearing the side of
the employees concerned?
 
HELD:  No. A worker cannot be deprived of his job or his wages without due process of
law. The case was then remanded to CIR for proper hearing.
 
 
CALLANTA v. CARNATION PHILS., 145 SCRA 268, G.R. No. 70615 October 28, 1986
 
FACTS: Upon clearance approved by the MOLE Regional Office, respondent dismissed
the petitioner in June 1979. On July 1982, petitioner filed an illegal dismissal case with
claim for reinstatement with the Labor Arbiter, who granted it. On appeal, the NLRC
reversed the judgment based on the contention that the action by the petitioner has
already prescribed, since Art. 291 & 292 of the Labor Code is expressed that offenses
penalized under the Code and all money claims arising from employer-employee
relationships shall be filed within 3 years from when such cause of action arises,
otherwise it will be barred.
 
ISSUE: Is ruling of the NLRC correct?
 
HELD: No. It is a principle well recognized in this jurisdiction, that one's employment,
profession, trade or calling is a property right, and the wrongful interference therewith is
an actionable wrong. The right is considered to be property within the protection of the
Constitutional guarantee of due process of law.

Verily, the dismissal without just cause of an employee from his employment constitutes
a violation of the Labor Code and its implementing rules and regulations. Such violation,
however, does not amount to an "offense" as understood under Article 291 of the Labor
Code. In its broad sense, an offense is an illegal act which does not amount to a crime
as defined in the penal law, but which by statute carries with it a penalty similar to those
imposed by law for the punishment of a crime. The confusion arises over the use of the
term "illegal dismissal" which creates the impression that termination of an employment
without just cause constitutes an offense. It must be noted, however that unlike in cases
of commission of any of the prohibited activities during strikes or lockouts under Article
265, unfair labor practices under Article 248, 249 and 250 and illegal recruitment
activities under Article 38, among others, which the Code itself declares to be unlawful,

37
termination of an employment without just or valid cause is not categorized as an
unlawful practice.
 
 
DE LEON v. NLU, 100 PHIL 789
 
FACTS: The defendant-appellees had been picketing the Dalisay Theater owned by the
plaintiff for the purpose of securing reinstatement to their respective jobs in the theater
when it was run and operated by the Filipino Theatrical Enterprises (FTE), then a lessee
of the parcel of land owned by plaintiff on which the theater was erected. The
defendant-appellees lost their jobs upon termination of the lease contract between De
Leon and the FTE, which turned over the rights  to the theater back to De Leon, the
owner of the lot.
 
ISSUE: Has terminated employees the right to strike in this case?
 
HELD: Yes. Although the employees has no business with the owner of the
establishment, they have nevertheless the right to peaceful picketing which applies also
to cases where employer-employee relationship is absent. The picketing, a form of
freedom of expression, is conducted not to disrupt the business of the owner but to
appeal for a humanitarian consideration, after having been laid off due to the
termination of the business of their previous employer.
 
 
PAFLU v. CLORIBEL, 27 SCRA 465

FACTS: Petitioner labor union picketed against Metrobank, which is occupying an office

space in the Wellington building. Wellington complained that the picketers were
annoyingly blocking the common passageway of the building, the only ingress and
egress being used by the occupants of the second to the sixth floors thereof as well as
by their respective employees, clients and customers, so that the picket has caused a
disruption of the business of Wellington as well as the other lessors in the building.
 
ISSUE: Does the court have the power to enjoin the picket, despite being peaceful?

38
 
HELD: Yes. The courts are vested with the power to limit the exercise of the right of
peaceful picketing to parties involved in the labor dispute, or having a direct interest to
the context of this issue. Wellington is a mere "innocent bystander" who is not involved
in the labor dispute. Thus, they are entitled to seek protection of their rights from the
courts and the courts may, accordingly, legally extend the same.
 
 
LIWAYWAY PUBLICATIONS v. PCWU, 108 SCRA 16

FACTS:  The picket held by defendant-appellant union against their employer prevented

herein plaintiff-appellee's truck from loading and unloading of its products inside the
premises of Permanent Concrete Products, where the plaintiff-appellee was occupying
as a sub-lessee. Hence, the latter sought to enjoin the picket.
 
ISSUE:  May a picket be enjoined at the instance of a third party?
 
HELD:  Yes. Peaceful picketing, while being allowed as a phase of freedom of
expression guaranteed by the Constitution and could not be curtailed even in the
absence of employer-employee relationship, is not an absolute right. The courts are not
without power to localize the sphere of demonstration, whose interest are foreign to the
context of the dispute. Thus the right may be recognized at the instance of an "innocent
bystander" who is not involved in the labor dispute if it appears that the result of the
picketing is create an impression that a labor dispute exists between him and the
picketing union.
 
 
KAPISANAN NG MANGGAGAWA SA CAMARA SHOES v. CAMARA SHOES, 111
SCRA 478
 
FACTS:  Petitioner Ramos was suspended for writing the phrase "under protest" in the
company payroll to object to the P1.0 deduction made by the respondent for allegedly
getting P500 worth of lumber in 1964. The deduction started only in 1969, at the peak of
union activities of the petitioner when several complaints of unfair labor practices were
filed by the union against the respondent.
 
39
ISSUE: Is the action of the petitioner a lawful exercise of freedom of expression?
 
HELD: Yes. The freedom of expression is available to individual workers subject to legal
limitation of industrial peace to air valid grievances. It is thus too clear from the
foregoing that petitioner Ramos was justified in airing his grievances against the
unauthorized and illegal deductions made by respondent company. By writing "under
protest" on the company payroll, petitioner Ramos was well within the ambit of his
constitutional freedom of expression as well as the right to petition against what was
obviously a calculated undue harassment amounting to unfair labor practice
perpetuated by respondent employer herein.
 
 
VICTORIANO v. ERWU, 59 SCRA 54
 
FACTS:  Stepping on the provisions of RA 3350 exempting members of religious sects
which prohibit its members from joining associations, plaintiff-appellee, being of a
faithful of Iglesia ni Cristo, withdrew his membership from the appellant union. The
latter, who have pact a closed-shop provision in their collective bargaining agreement
with respondent company sought the separation of the plaintiff-appellee. The trial court
enjoined the supposed dismissal, prompting the union to assail the validity of RA 3350
particularly the provision granting exemption to members of above-mentioned sects.
 
ISSUE: Does the law infringe the right or freedom of labor to associate?
 
HELD: No. Freedom of association implies not only the right to join a labor union, but
also the privilege of not joining one,  of selecting which union to join, and of disaffiliating
from a union. It is clear that the assailed Act, far from infringing the constitutional
provision on freedom of association, upholds and reinforces it. It does not prohibit the
members of said religious sects from affiliating with labor unions. It still leaves to said
members the liberty and the power to affiliate, or not to affiliate, with labor unions. If,
notwithstanding their religious beliefs, the members of said religious sects prefer to sign
up with the labor union, they can do so. If in deference and fealty to their religious faith,
they refuse to sign up, they can do so; the law does not coerce them to join; neither
does the law prohibit them from joining; and neither may the employer or labor union
compel them to join.
 

40
 
REPUBLIC SAVINGS BANK v. CIR, 21 SCRA 226
 
FACTS:  Petitioner bank terminated private respondents for having written and
published a "patently libelous letter tending to cause dishonor, discredit or contempt not
only the officers and employees of the bank, but also their employer" by demanding the
resignation of the bank president on grounds of immorality, nepotism and favoritism.
CIR ruled that the petitioner's act constitutes an unfair labor practice.
 
ISSUE: Does the dismissal of employees airing their grievance against their employer
constitute unfair labor practice?
 
HELD: Yes. Even assuming that respondents acted in their individual capacities when
they wrote the letter, they were nonetheless protected for they were engaged in
concerted activity, in the exercise of their right to self-organization that includes
concerted activity for mutual aid and protection, interference with which constitutes
unfair labor practice.

The petitioner should have allowed the respondents to air their grievances as a
mechanism in a collective bargaining agreement. Collective bargaining... normally takes
the form of negotiation when major conditions of employment to be written into an
agreement are under consideration, and of grievance committee meetings and
arbitration when questions arising from the administration of an agreement are at stake.
 
 
SSS EMPLOYEES ASSOC. v. CA, 175 SCRA 686
 
FACTS:  Petitioners went on strike after their employer SSS failed to act upon the
union's demands concerning the implementation of their CBA. SSS filed an injunction
contending that the petitioners are covered by Civil Service laws which prohibits
employees of the government from staging a strike. SSSEA on the other hand, argued
that the NLRC has the jurisdiction of the case by virtue of the provisions of the Labor
Code.
 

41
ISSUE: Does the court have jurisdiction? Do employees covered by the Civil Service
have the right to strike?
 
HELD:  On question of jurisdiction, yes. The RTC, in the exercise of its general
jurisdiction under BP 129, has jurisdiction over petitioner's claim for damages and for
the issuance of a writ of injunction to stop the strike, since the Labor Code do not apply
to government employees.

On the right to strike of government workers, No. The Constitution provides guarantee
among workers with the right to organize and conduct peaceful concerted activities. On
the other hand, EO 180 provides that the Civil Service law and rules governing
concerted activities in government service shall be observed subject to any legislation
that may be enacted by Congress. Referring to Memo Circular No.6, s. 1987 of the CSC
which states that prior to the enactment by Congress of applicable laws concerning
strike by government employees, enjoins under pain of administrative sanctions, all
government officials and employees from staging a strike, demonstrations, mass
leaves, walk-outs and other forms of mass action which will result in temporary
stoppage or disruption of public service, the court ruled that in the absence of any
legislation allowing government employees to strike, they are therefore prohibited from
doing so.
 

GARCIA v. PAL, GR 164856, Jan. 20, 2009

FACTS: PAL filed an administrative case against Garcia and Dumago after they were
allegedly caught sniffing shabu at the PAL Tool Room. After due notice, they were
dismissed for transgressing the PAL Code of Discipline. The petitioners filed a
complaint for illegal dismissal. The Labor Arbiter decided in favor of petitioners with an
immediate reinstatement. A writ was issued to such effect pending appeal with the
NLRC.

ISSUE: Can the petitioners collect wages on the period of appeal from the Labor
Arbiter’s order up to the final decision of the higher court?

HELD: Yes. The State forcefully and meaningfully underscore labor as a primary social
and economic force. In short, with respect to decisions reinstating employees, the law
itself has determined a sufficiently overwhelming reason for its execution pending
appeal. Therefore, the petitioners can collect wages from the period of the execution of
the decision of the labor arbiter to the time of the final decision of the higher court.

42
 

MORTERA v. CIR, GR L-1340, Oct. 13, 1947

FACTS: All laborers of Canlubang Sugar Estate were ordered to return to work
immediately and stop the strike with the admonition that those who will fail to report will
not only lose any concession but the company was authorized by the public respondent
herein to employ new employees or laborers to take the places or positions of those
who fail to report. The public respondent ordered that picketing under any guise or form,
is entirely prohibited considering that the industry was into sugar, a very important and
essential food, lack of supply would mean destruction of sugar centrals of many
provinces.

ISSUE: Was there a  denial of the right to strike?

HELD: Yes. The order on prohibition to strike should be understood to cover only illegal
picketing, that is, picketing through the use of illegal means. Peaceful picketing cannot
be prohibited. It is part of the freedom of speech guaranteed by the Constitution.
Petitioners have not shown reasons to annul the order. Petition dismissed.
 
 
FELIX UY v. COA, GR 130685, March 21, 2000

FACTS: Petitioners were among the more than 60 dismissed permanent employees of
the Capitol of Agusan del Sur by the newly incumbent Governor Paredes. They
contended that the dismissal was a political vengeance because he hired new
employees. The Governor averred that the dismissal was not illegal because it was due
to the reduction in work force due to lack of funds and it is a valid ground of terminating
the services of the employees. The Merit System Protection Board held the dismissal
illegal and ordered their reinstatement but Governor Paredes refused to abide from the
order. The COA on the other hand affirmed the decision of the MSPB but denied the
motion of the petitioners stating that it is the personal liability of Governor Paredes and
not the Provincial Government of Agusan del Sur.

ISSUE: Can government employees receive backwages and other monetary benefits
from the government?

HELD: Yes. If the MSPB found bad faith on the part of Governor Paredes, it would have
categorically decreed his personal liability for the illegal dismissal of the petitioners. To
be sure, even the petitioners did not proceed from the theory that their dismissal is the

43
personal liability of Governor Paredes. Familiar learning is our ruling that bad faith
cannot be presumed and he who alleges bad faith has the onus of proving it. In the
case at bar, the decision of the MSPB by itself does not meet the quantum of proof
necessary to overcome the presumption of good faith.
 
 
TIRAZONA v. PHILIPPINE EDS TECHNO-SERVICE (PET) INC
FACTS: The petitioner, a managerial employee who was holding a position of trust and
confidence, was admonished by the latter of her improper handling of a situation
involving a rank-and-file employee. She admitted having read a supposed confidential
letter for the PET directors containing a  legal opinion of the respondent's counsel
regarding the status of her employment. As a consequence, she was terminated for
willful breach of trust reposed upon by her employer. She claimed having been denied
of due process.
 
ISSUE: Was her dismissal justified?
 
HELD: Yes. The petitioner has given the respondent more than enough reasons to
distrust her. The arrogance and hostility she has shown towards the company her
stubborn uncompromising stance in almost all  instances justify the company's
termination of her employment.
 
 
PANTRANCO v. PSC, GR 47065, June 26, 1940

FACTS: Petitioner wanted to have Sec. 1 of CA 454 be declared unconstitutional or that

if constitutional be declared inapplicable to valid and subsisting certificates issued prior
to its enactment. This arose from the time petitioner applied for ten additional trucks to
comply with his existing certificates of public convenience issued before the enactment
of the CA 454 because he was not agreeable with the conditions set forth by PSC. He
contended that this Act violates the constitutional guarantee of non-impairment of
contracts.
 
ISSUE: Was the constitutional guarantee of non-impairment of obligations and contracts
violated?

44
HELD:  No. Statutes for the regulation of public utilities are a proper exercise by the
state of its police power for the control and regulation of public utilities in order to protect
the public. If one voluntarily placed his property in public service, he cannot complain of
the regulation of the State through its police power. A regulation of public utilities applies
not only to future but also to present contracts in operation. Such statutes are, therefore,
not unconstitutional, either impairing the obligation of contracts, taking property without
due process, or denying the equal protection of the laws, especially inasmuch as the
question whether or not private property shall be devoted to a public and the
consequent burdens assumed is ordinarily for the owner to decide.
 
 
PALMERIA v. NLRC, 247 SCRA 57

FACTS:  Palmeria was employed by private respondent Coca-cola, which later entered
into a contract of service with Lipercon Services. It was made to appear that the
petitioner was an employee of Lipercon, before being dismissed by Coca-cola.
Petitioner was able to prove his employment with Coca-cola, hence sought for
reinstatement. The labor arbiter and NLRC ruled that reinstatement could not be availed
of because of the vehement refusal of the respondent to accept back the petitioner.
 
ISSUE: Should the petition for reinstatement be granted despite the strained relations
between employee and employer?
 
HELD: Yes. The importance of the remedy of reinstatement to an unjustly dismissed
employee cannot be overstated. It is the remedy that most effectively restores the right
of an employee to his employment and all its benefits before its violation by his
employer. Yet despite all its virtues, reinstatement does not and cannot fully vindicate all
of an employees injuries for reinstatement no more than compensates for his financial
damages. It cannot make up for his other sufferings, intangible yet valuable xxx  It is a
right which cannot be allowed to be devalued by the purchasing power of employers
who are only too willing to bankroll the separation pay of their illegally dismissed
employees to get rid of them.
 

BANGALISAN v. CA, 276 SCRA 619

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FACTS:  Petitioners were among the 800 public school teachers who staged “mass
actions” on September 17 to 19, 1990 to dramatize their grievances against the alleged
failure of the government to implement measures intended for their material benefit. The
Education Secretary issued a Return-to-Work Order but the petitioners failed to comply.
Hence they were charged by the Secretary with several administrative cases leading to
their dismissal from service.
 
ISSUE: Can government employees engage in a strike?
 
HELD:  No. As a general rule, even in the absence of express statutory prohibition like
Memo Circ. No.6 public employees are denied the right to strike or engage in work
stoppage against a public employer. The right of the sovereign to prohibit strikes or
work stoppages public employees was clearly recognized at common law. To grant
employees of the public sector the right to strike there must be a clear and direct
legislative authority therefor. In the absence of any express legislation allowing
government employees to strike, recognizing their right to do so, or regulating the
exercise of the right, employees in the public service may not engage in strike, walk-
outs and temporary work stoppage like workers in the private sector.
 
 
KAISAHAN v. GOTAMCON SAWMILLS, 80 PHIL 521
 
FACTS: During the pendency of the labor dispute between the petitioners and the
respondents, the CIR managed to forge a voluntary agreement which results into a
return-to-work order, and the respondents was prohibited to, among others, lay-off any
of the petitioners. Barely 4 months the contract, petitioners again staged a strike,
violating the condition of the agreement. The latter countered by assailing the Sec 19 of
CA 103, the law upon which the voluntary agreement was based, arguing that the same
results to involuntary servitude.
 
ISSUE: Should a voluntary agreement with a condition that workers must return to work
be voided upon a ground of involuntary servitude?
 
HELD:  No. An employee entering into a contract of employment voluntarily accepts,
among other conditions, those prescribed in Section 19 of CA 103. The voluntariness of

46
the employee's entering into it or not--with such implied condition, negatives the
possibility of involuntary servitude ensuing.
 
 
MABEZA v. NLRC, G.R. No. 118506 April 18, 1997

FACTS: The petitioner and her co-employees were asked by their employer to sign an
instrument attesting to the latter’s compliance with minimum wage and other labor
standard provision, and that they have no complaints against the management. The
petitioner signed the affidavit but refused to go to the City’s Prosecutor’s Office to
confirm the veracity and contents of the affidavit as instructed by management. That
same day she was ordered by the hotel management to turn over the keys to her living
quarters and to remove her belongings in the hotel’s premises. She then filed a leave of
absence which was denied by her employer. She attempted to return to work but the
hotel’s cashier told her that she should not report to work and instead continue with her
unofficial leave of absence. The management defended upon a ground of loss of
confidence.
 
ISSUE: Was the dismissal of the petitioner valid?
 
HELD:  No. The pivotal question in any case where unfair labor practice on the part of
the employer is alleged is whether or not the employer has exerted pressure, in the form
of restraint, interference or coercion, against his employee’s right to institute concerted
action for better terms and conditions of employment. Without doubt, the act of
compelling employees to sign an instrument indicating that the employer observed labor
standard provisions of the law when he might not have, together with the act of
terminating or coercing those who refuse to cooperate with the employers’ scheme
constitutes unfair labor practice.
 
 
BULLETIN PUBLISHING CORP. v. SANCHEZ, 144 SCRA 628
 
FACTS: Supervisors  and managers in petitioner company formed a union separate
from that of the rank-and-file union, petitioned for certification election, and staged a
strike against the petitioner, prompting the latter to seek a permanent injunction.
 
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ISSUE: Are supervisors or managers allowed by law to form a union?
 
HELD:  No. The supervisory employees of petitioner firm may not, under the law, form a
supervisors union, separate and distinct from the existing bargaining unit (BEU),
composed of the rank-and-file employees of the Bulletin Publishing Corporation. It is
evident that most of the private respondents are considered managerial employees. xxx
The rationale for this inhibition has been stated to be, because if these managerial
employees would belong to or be affiliated with a Union, the latter might not be assured
of their loyalty to the Union in view of evident conflict of interests. The Union can also
become company- dominated with the presence of managerial employees in Union
membership.
Philippine Movie Pictures Workers' Association v. Premier Productions Inc 92 Phil 843
(1953)
PHILIPPINE MOVIE PICTURES WORKERS' ASSOCIATION vs. PREMIERE
PRODUCTIONS, INC.
92 Phil 843 (1953)
Facts:

1.     Respondent filed with the Court of Industrial Relations (CIR) an urgent petition
seeking authority to lay off 44 men working in three of its departments,  first batch to be
laid off  30 days after the filing of the petition and the rest 45 days thereafter.
a.     in order that in the intervening period it may finish the filming of its pending picture.
The ground for the lay off is the financial losses which respondent was allegedly
suffering during the current year.

2.     Petitioner opposed, alleging that

a.     the claim of financial losses has no basis in fact it being only an act of retaliation
for the strike staged by the workers days before in an attempt to harass and intimidate
them and weaken and destroy the union to which they belong.

3.     When the urgent petition was set for hearing, at the request of counsel for
respondent, judge Roldan of the CIR, held an ocular inspection of the studios and
filming premises of respondent. He interrogated about 15 laborers who were then
present in the place.
a.     Judge Roldan allowed respondent to lay off the workers with respect to Unit No. 2
and those assigned to the Ground Maintenance Department subject to the condition
48
that, in the event that work is available in the future, they should be reemployed. (nov 8
order)

4.     A subsequent hearing was held in connection with the workers assigned to Unit
No. 1 and on the strength of the evidence submitted by respondent, Judge Roldan
again found the petition justifiable and authorized their lay off in an order under the
same condition as those contained in his previous order.
5.     Petitioner moved for the reconsideration of both orders- Court in banc DENIED;
Hence this petition for review.

Issue:
May the CIR authorize the layoff of workers on the basis of an ocular inspection without
receiving full evidence to determine the cause or motive of such layoff?

Petitioner (contention)- such a procedure is unfair to the labor union in that it deprived
the workers affected of the opportunity to disprove what apparently was represented to
the court during the ocular inspection which at best may only be the result of a
prearrangement devised by the company to justify its claim of lack of work and that what
the court should have done was to make a full-dress investigation if not a formal hearing
giving both parties all the time and opportunity to present their evidence before deciding
such an important matter which affects the position and the only means of livelihood of
the workers affected by the petition.

*With the procedure adopted by the court, the workers were deprived of their
employment without due process of law.

Respondent- claims that the labor union had its day in court because its counsel was
present in the investigation or ocular inspection and even presented some witnesses to
protect its interest.

Held: No
In the course of the ocular inspection Judge Roldan proceeded to interrogate the
workers he found in the place in the presence of the counsel of both parties. The
testimony of those interrogated was taken down and the counsel of both parties were
allowed to cross-examine them. Judge Roldan also proceeded to examine some of the

49
records of respondent company among them the time cards of some workers which
showed that while the workers reported for work, when their presence was checked
they were found to be no longer in the premises. And on the strength of the findings
made by Judge Roldan in this ocular inspection he reached the conclusion that the
petition for layoff was justified because there was no more work for the laborers to do in
connection with the different jobs given to them.

The record before the court on this matter is not clear and for such reason it has no way
of determining the truth of both claims.
-        The stenographic notes taken during the ocular inspection have not been elevated
for the reason undoubtedly that this is a petition for review and the only issue before the
court is one of law.
-        The only guide that the court finds is the order itself of the court of origin which
contains a reference to the evidence that it has considered for the  layoff of the workers.
– NOV 8 Order

It is true, as counsel for respondent avers, that hearings were conducted by the court a
quo  xxx but it is likewise true that those hearings do not necessarily refer to the petition
under consideration but to other matters such as the petition of the labor union
containing 14 demands and the petition of the same union to declare respondent in
contempt for having violated certain directives of the court. At any rate, this matter does
not appear clear and we are inclined to resolve the doubt in favor of labor considering
the spirit of our Constitution.

* The right to labor is a constitutional as well as a statutory right. Every man has a
natural right to the fruits of his own industry. A man who has been employed to
undertake certain labor and has put into it his time and effort is entitled to be protected.
The right of a person to his labor is deemed to be property within the meaning of
constitutional guarantees. That is his means of livelihood. He cannot be deprived of his
labor or work without due process of law

Although the CIR, in the determination of any question or controversy, may adopt, its
own rules of procedure and may act according to justice and equity without regard to
technicalities, and for that matter is not bound by any technical rules of evidence, this
broad grant of power should not be interpreted to mean that it can ignore or disregard
the fundamental requirements of due process in the trials and investigations of cases
brought before it for determination. As aptly pointed out by this court, there are certain
cardinal primary rights which the CIR must respect in the trial of every labor case. One

50
of them is the right to a hearing which includes the right of the party interested to
present his own case and submit evidence in support thereof.

An ocular inspection of the establishment or premises involved is proper if the court

finds it necessary, but such is authorized only to help the court in clearing a doubt,
reaching a conclusion, or finding the truth. But it is not the main trial nor should it
exclude the presentation of other evidence which the parties may deem necessary to
establish their case. It is merely an auxiliary remedy the law affords the parties or the
court to reach an enlightened determination of the case.

Considering the merits of the controversy before us, we are of the opinion that
the required due process has not been followed. The court a quo merely acted on the
strength of the ocular inspection it conducted in the premises of the respondent
company. The petition for layoff was predicated on the lack of work and of the further
fact that the company was incurring financial losses. These allegations cannot be
established by a mere inspection of the place of labor specially when such inspection
was conducted at the request of the interested party.

As counsel for petitioner says, such inspection could at best witness "the superficial fact
of cessation of work but it could not be determinative of the larger and more
fundamental issue of lack of work due to lack of funds". This fundamental issue cannot
be determined without looking into the financial situation of the respondent company. In
fact, this matter is now being looked into by the court a quo in connection with the
fourteen demands of the labor union, but before finishing its inquiry it decided to grant
the lay- off pending final determination of the main case. This action is in our opinion
premature and has worked injustice to the laborers.
G.R. No. 106107 June 2, 1994
AGUSTIN CHU, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and VICTORIAS MILLING COMPANY,
INC. respondents.
Legaspi, Rufon, Necesario & Asso. Law Office for petitioner.
Decena, Tabat, Jardaleza & Tañoso Law Office for private respondent.

QUIASON, J.:

51
This is a petition for certiorari under Rule 65 of the Revised Rules of Court to reverse
and set aside the Decision of the Fourth Division of the National Labor Relations
Commission (NLRC) in Case No. 06-02-10081-89 which dismissed petitioner’s appeal
and its Resolution dated March 20, 1992, which denied petitioner’s motion for
reconsideration.
We dismiss the petition.
I
Petitioner retired from the service of private respondent upon reaching the age of sixty
under its regular retirement program. He was granted an extention of service by the
Board of Directors of private respondent under a "Special Contract of Employment." The
contract provided, inter alia, that its term was for a period of one year commencing on
August 1, 1988; that petitioner was employed as Head of the Warehousing, Sugar,
Shipping and Marine Department; and that he was to receive a basic salary of
P6,941.00 per month.
Private respondent issued Memorandum No. 1012-PS dated December 12, 1988 and
Memorandum No. 1028-PS dated January 16, 1989, both providing for a rotation of the
personnel and other organizational changes. Pursuant to the memoranda, petitioner
was transferred to the Sugar Sales Department.
Petitioner protested his transfer and requested a reconsideration thereof, which was
denied. Consequently, on February 27, 1989, petitioner filed a complaint for illegal
dismissal, contending that he was constructively dismissed from his employment (RAB
IV Case No. 06-02-10081-89).
In support of his decision holding that there was no constructive dismissal of petitioner,
the Labor Arbiter said that: (1) petitioner was transferred to the Sugar Sales Department
from the Warehousing, Sugar, Shipping and Marine Department, both of which are
under the Sugar Sales Area; (2) petitioner’s transfer was without change in rank or
salary; (3) petitioner’s designation in either department was the same; (4) the personnel
rotation was pursuant to organizational changes done in the valid exercise of
management prerogatives; (5) there was no bad faith in the transfer of petitioner, as
other employees similarly situated as he were likewise affected; and (6) petitioner failed
to show that he was prejudiced by the changes or transferred to a demeaning or
humiliating position.
Petitioner appealed to the NLRC which, in a resolution dated January 13, 1992, affirmed
the Labor Arbiter’s decision. In a resolution dated March 20, 1992, the NLRC denied
petitioner’s motion for reconsideration.
II
In this petition, petitioner contends that there was no valid exercise of management
prerogative because: (1) his transfer violated the "Special Contract of Employment"

52
which was the law between the parties; and (2) said transfer was unreasonable and
caused inconvenience to him.
Petitioner argues that private respondent’s prerogative to transfer him was limited by the
"Special Contract of Employment," which was the "law" between the parties. Thus,
petitioner urges that private respondent, by employing him specifically as Head of the
Warehousing, Sugar, Shipping, and Marine Department, waived its prerogative to
reassign him within the term of the contract to another department.
We disagree.
An owner of a business enterprise is given considerable leeway in managing his
business because it is deemed important to society as a whole that he should succeed.
Our law, therefore, recognizes certain rights as inherent in the management of business
enterprises. These rights are collectively called management prerogatives or acts by
which one directing a business is able to control the variables thereof so as to enhance
the chances of making a profit. "Together, they may be taken as the freedom to
administer the affairs of a business enterprise such that the costs of running it would be
below the expected earnings or receipts. In short, the elbow room in the quest for
profits" (Fernandez and Quiason, The Law on Labor Relations, 1963 ed., p. 43).
One of the prerogatives of management, and a very important one at that, is the right to
transfer employees in their work station. In Philippine Japan Active Carbon Corporation
v. National Labor Relations Commission, 171 SCRA 164 (1989), we held:
It is the employer’s prerogative, based on its assessment and perception of its
employees’ qualifications, aptitudes, and competence to move them around in the
various areas of its business operations in order to ascertain where they will function
with maximum benefit to the company. An employee’s right to security of tenure does
not give him such a vested right in his position as would deprive the company of its
prerogative to change his assignment or transfer him where he will be most useful.
When his transfer is not unreasonable, nor inconvenient, nor prejudicial to him, and it
does not involve a demotion in rank or a diminution of his salaries, benefits, and other
privileges, the employee may not complain that it amounts to a constructive dismissal.
In Abbot Laboratories (Phils.) Inc. v. NLRC, 154 SCRA 713 (1987), we also held in
referring to the prerogative of transfer of employees, that:
This is a function associated with the employer’s inherent right to control and manage
effectively its enterprise. Even as the law is solicitous of the welfare of employees, it
must also protect the right of an employer to exercise what are clearly management
prerogatives. The free will of management to conduct its own business affairs to
achieve its purpose cannot be denied.
Of course, like other prerogatives, the right to transfer or re-assign is subject to
limitations arising under the law, contract or general principles of fair play and justice
(Abbot Laboratories (Phil.) Inc. v. NLRC, 154 SCRA 713 [1987]). Jurisprudence

53
1111proscribes transfers or re-assignments of employees when such acts are
unreasonable and cause inconvenience or prejudice to them (Philippine Japan Active
Carbon Corporation v. NLRC, supra).
We find nothing in the "Special Contract of Employment" invoked by petitioner wherein
private respondent had waived its right to transfer or re-assign petitioner to any other
position in the company. Before such right can be deemed to have been waived or
contracted away, the stipulation to that effect must be clearly stated so as to leave no
room to doubt the intentions of the parties. The mere specification in the employment
contract of the position to be held by the employee is not such stipulation.
As held in Philippine Japan Active Carbon Corporation v. National Labor Relations
Commission, supra:
An employee’s right to security of tenure does not give him such a vested right in his
position as would deprive the company of its prerogatives to change his assignment or
transfer him where he will be most useful.
Petitioner’s bare assertion that the transfer was unreasonable and caused him
inconvenience cannot override the fact, as found by the Labor Arbiter and respondent
Commission, that the rotation was made in good faith and was not discriminatory, and
that there was no demotion in rank or a diminution of his salary, benefits and privileges.
WHEREFORE, the petition for certiorari is DISMISSED.
SO ORDERED.
San Miguel Brewery Sales Force Union(PTGWO) vs. Hon. Blas Ople G.R. No. L-53515,
February 8, 1989
FACTS:
For 3 years, a collective bargaining agreement was being implemented by San Miguel C
orporation Sales Force Union (PTGWO), and San Miguel Corporation. Section 1, of Arti
cle IV of which provided “Employees within the appropriate bargaining unit shall be entitl
ed to a basic monthly compensation plus commission based on their respective sales.” 
Then, the company introduced a marketing scheme known as “Complementary Distribut
ion System”(CDS) whereby its beer products were offered for sale directly to wholesaler
s through San Miguel’s Sales Offices. The union alleged that the new marketing schem
e violates Sec 1, Art IV f the CBA because the introduction of the CDS would reduce the 
take home pay of the salesmen.
ISSUE:
Whether or not the new marketing scheme should be upheld considering that the act wa
s unilaterally made by the employer.
 

54
RULING:
Yes, because it is a valid exercise of managerial prerogative. So long as a company’s m
anagement prerogatives are exercised in good faith for the advancement of the employ
er’s interest and not for the purpose of defeating or circumventing the rights of the empl
oyees under special laws or under valid agreements, this Court will uphold them. San M
iguel Corporation’s offer to compensate the members of its sales force who will be adve
rsely affected by the implementation of the CDS by paying them a so-called “back adjus
tment commission” to make up for the commissions they might lose as a result of the C
DS proves the company’s good faith and lack of intention to bust their union.

55