PART I. training under maximum supervision.
But barely twenty-one (21) days
1.
[G.R. NO. 148279 : May 27, 2004]
CORPORATE INN HOTEL, ANNIE DEL ROSARIO AND JULIE
PALINSAD, Petitioners, v.  JENNEVIE H. LIZO, Respondent.
DECISION
SANDOVAL-GUTIERREZ, J.:
At the heart of the controversy is the issue of whether Petitioners, by the
simple expedient of arguing substantial justice and miscarriage of justice,
may be allowed to disregard the mandatory 10-day period of perfecting an
appeal from the decision of the Labor Arbiter.A reverberating negative
ruling was rendered by both the Court of Appeals and the National Labor
Relations Commission (NLRC).
Before us is a Petition for Review on Certiorari under Rule 45 of the 1997
Rules of Civil Procedure, as amended, assailing the Decision1 dated March
30, 2001 and the Resolution2 dated May 23, 2001 rendered by the Court of
Appeals in CA-G.R. SP No. 59037, entitled Corporate Inn Hotel, Annie Del
Rosario and Julie Palinsad v. Jennevie H. Lizo.
The undisputed facts of the case are as follows: chanroblesvirtua1awlibrary
On January 25, 1999, Corporate Inn Hotel, petitioner,engaged the services
of Jennevie Lizo, respondent, as a probationary account executive.In such
capacity, she was tasked to deal with clients, entertain customers, and
promote patronage of the hotel.However, just a few weeks after her
employment, petitioner received complaints from its clients against her for
undesirable conduct.They also called petitioners attention to her
inefficiency in discharging her duties.
Prompted by such reports, Petitioner, on February 8, 1999, evaluated
respondents performance.The evaluation disclosed her inability to deal
with hotel guests.Thus, she was recommended to undergo an additional
after her employment, petitioner terminated her services effective
February 15, 1999.
Aggrieved, respondent filed with the Labor Arbiter a complaint for illegal
dismissal and other monetary claims against petitioner and its officers,
Annie Del Rosario and Julie Palinsad, docketed as NLRC NCR Case No. 00-
03-02577-99.
On September 30, 1999, the Labor Arbiter rendered a Decision holding
that respondent was illegally dismissed, thus:chanroblesvirtua1awlibrary
All told, it is the finding of this Arbitration Branch that the imputation
against the complainant are but the product of afterthoughts, if not
surmises, and guessworks. The inevitable conclusion is that complainant
was dismissed without just and valid cause and absent due process.
Accordingly, she is entitled to her backwages from February 15, 1999 up
to the date of this decision and to separation pay equivalent to one (1)
month salary, hereunder computed as follows:
Backwages: P6,000.00/mo. x7.5 mos=P 45,000.00
Separation Pay:at one (1) month pay=P6,000.00
---------------
TOTAL P51,000.00
On the matter of the complainants claim for moral and exemplary
damages, this is not substantiated by the complainant. Mere allegation of
illegal dismissal is not enough as it is required that complainant must
prove that bad faith on the part of the respondents attended her dismissal
from employment.
WHEREFORE, all the foregoing premises being considered, judgment is
hereby rendered ordering the respondents to pay complainant the sum
of P51,000.00.
SO ORDERED.
Upon appeal, the National Labor Relations Commission (NLRC), in a
Resolution dated March 31, 2000, dismissed the same for being late.
Petitioners filed a motion for reconsideration but was denied by the NLRC
in a Resolution dated April 28, 2000.
Consequently, petitioners filed with the Court of Appeals a Petition
for Certiorari.
In a Decision promulgated on March 30, 2001, the Appellate Court
affirmed in toto the NLRC Resolution, ratiocinating thus:
We dismiss the petition.
First.The perfection of an appeal within the reglementary period and in the
manner prescribed by law is jurisdictional. Non-compliance therewith is
fatal and it renders the judgment final and executory. Non-compliance with
the required procedure deprives the appellate court of jurisdiction to alter
the final judgment, much less, to entertain the appeal. The requirements
for the perfection of an appeal are intended to discourage employers from
using the appeal to delay or evade their obligations to their employees. It
also assures employees that the money judgment in their favor will be
satisfied.
The reglementary period for perfecting an appeal is provided for in Art.
223 of the Labor Code, to wit:chanroblesvirtua1awlibrary
ART. 223. Appeal. Decisions, awards, or orders of the Labor Arbiter are
final and executory unless appealed to the Commission by any or both
parties within ten (10) calendar days from receipt of such decisions,
awards, or orders. Such appeal may be entertained only on any of the
following grounds: x x x
Whereas, the manner for perfecting an appeal is outlined in Section 3(a),
Rule VI of the NLRC New Rules of Procedure, to wit: chanroblesvirtua1awlibrary
SECTION 3. REQUISITES FOR PERFECTION OF APPEAL. a) The Appeal shall
be filed within the reglementary period as provided in Section 1 of this
Rule shall be under oath with proof of payment of the required appeal fee
and the posting of a cash or surety bond as provided in Section 6 of this
Rule; shall be accompanied by memorandum of appeal which shall state
the grounds relied upon and the arguments in support thereof; the relief
prayed for and a statement of the date when the appellant received the
appealed decision, order or award and proof of service on the other party
of such appeal.
A mere notice of appeal without complying with the other
requisites aforestated shall not stop the running of the period for
perfecting an appeal. (underscoring ours)
chanroblesvirtua1awlibrary
In addition, Art. 223 of the Labor Code, 2nd paragraph, provides that: chanroblesvirtua1awlibrary
In case of a judgment involving a monetary award, an appeal by the
employer may be perfected only upon the posting of a cash or surety bond
issued by a reputable bonding company duly accredited by the Commission
in the amount equivalent to the monetary award in the judgment appealed
from.
Therefore, an appeal is perfected by simultaneously filing a notice of
appeal and a memorandum of appeal and by posting an appeal bond, all
within the period of ten (10) days from receipt of the questioned decision.
In the instant case, petitioner Corporate Inns appeal to the NLRC was filed
out of time and petitioner realized this lapse from start but it pleaded for
leniency with the NLRC, as it does now before Us, x x x: chanroblesvirtua1awlibrary
xxx
Unfortunately, none of these circumstances sways Us to relax the rules in
favor of petitioner.x x x
xxx
Third.So far, petitioner has taken great pains to plead for a relaxation of
the reglementary period for filing an appeal. But while doing so, it failed to
establish the other requisite for the perfection of an appeal - the posting of
an appeal bond. Understandably, the NLRC no longer saw it fit to discuss
this requisite due to its conclusion that the appeal was filed out of time.
However, it was incumbent upon petitioner to allege compliance with the
required appeal bond in its petition to add more depth to the theory that it
has perfected its appeal, but it did not. This lapse compounds petitioners
clearly untenable position on its tardy appeal and leaves no doubt in Our
minds that indeed petitioners failed in all aspects to perfect its appeal.
WHEREFORE, the instant petition is hereby DISMISSED and the resolutions
of the NLRC, dated 31 March 2000 and 28 April 2000 are SUSTAINED in
toto. Costs against petitioners.
SO ORDERED.
From the said Decision, petitioners filed a motion for reconsideration, but
was denied by the Court of Appeals in a Resolution dated May 23, 2001.
Hence, this Petition for Review on Certiorari .
The issue before us is not novel.
At the outset, it bears stressing that the right to appeal is a statutory right
and one who seeks to avail of the right must comply with the statute or
rules.The rules, particularly the requirements for perfecting an appeal
within the reglementary period specified in the law, must be
strictly followed as they are considered indispensable interdictions
against needless delays and for orderly discharge of judicial business.3  cralawred
The NLRC Rules, akin to the Rules of Court, promulgated by authority of
law, have the force and effect of law; and such NLRC rules prescribing the
time within which certain acts must be done, or certain proceedings taken,
are considered absolutely indispensable to the prevention of needless
delays and to the orderly and speedy discharge of judicial business.4  cralawred
Thus, petitioners are mandated to perfect their appeal in the manner and
within the period permitted by law and failure to do so renders the
judgment of the Labor Arbiter final and executory.
In Veterans Philippine Scout Security Agency v. National Labor Relations
Commission and Roberto De Los Santos,5 we held: chanroblesvirtua1awlibrary
Under Article 223 of the Labor Code, a decision of a Labor Arbiter is final
and executory unless appealed to the National Labor Relations Commission
by any or both of the parties within ten (10) days from notice of the said
Decision.Thus, the perfection of an appeal within the reglementary
period for the same is jurisdictional in character.
Similarly, in Peftok Integrated Services, Inc. v. NLRC,  6 we considered the
appeal of petitioner therein as flawed for being late, its appeal having been
interposed seven (7) days beyond the 10-day reglementary period.
While we may have sidestepped the rule on the statutory or reglementary
period for filing an appeal, yet, we emphasized this caveat: we cannot
respond with alacrity to every clamor of injustice and bend the rules to
placate a vociferous protestor crying and claiming to be a victim of a
wrong.It is only in highly meritorious cases that this Court opts not to
strictly apply the rules and thus prevent a grave injustice from being
done.7 However this exception does not obtain here.
We thus find no compelling reason to reverse the Decision and Resolution
of the Court of Appeals.
WHEREFORE, the petition is DENIED.The Decision dated March 30, 2001
and Resolution dated May 23, 2001 of the Court of Appeals inCA-G.R. SP
No. 59037 are hereby AFFIRMED.
SO ORDERED.
2. On 10 January 1919, the master of the vessel complainant Rogelio H.
Bisula, received a cable from the Company advising him of the
G.R. No. L-58011 & L-58012 November 18, 1983 possibility that the vessel might be directed to call at ITF-controlled
ports said at the same time informing him of the procedure to be
VIR-JEN SHIPPING AND MARINE SERVICES, INC., petitioner, followed in the computation of the special or additional compensation
vs. of crew members while in said ports. ITF is the acronym for the
NATIONAL LABOR RELATIONS COMMISSION, ROGELIO BISULA RUBEN International Transport Workers Federation, a militant international
ARROZA JUAN GACUTNO LEONILO ATOK, NILO CRUZ, ALVARO ANDRADA, labor organization with affiliates in different ports of the world, which
NEMESIO ADUG SIMPLICIO BAUTISTA, ROMEO ACOSTA, and JOSE reputedly can tie down a vessel in a port by preventing its loading or
ENCABO respondents. unloading, This is a sanction resorted to by ITF to enforce the
payment of its wages rates for seafarers the so-called ITF rates, if the
wages of the crew members of a vessel who have affiliated with it are
Antonio R. Atienza for petitioner.
below its prescribed rates.) In the same cable of the Company, the
expressed its regrets for hot clarifying earlier the procedure in
The Solicitor General for respondent NLRC, computing the special compensation as it thought that the vessel
would 'trade in Caribbean ports only.
Quasha, Asperilia, Ancheta &- Valmonte Pena Marcos Law Offices for private
respondents. On 22 March 1979, the Company sent another cable to complainant
Bisula, this time informing him of the respective amounts each of the
RESOLUTION officers and crew members would receive as special compensation
when the vessel called at the port of Kwinana Australia, an ITF-
  controlled port. This was followed by another cable on 23 March 1979,
informing him that the officers and crew members had been enrolled
GUTIERREZ, JR., J.: ñé+.£ªwph!1
as members of the ITF in Sidney, Australia, and that the membership
fee for the 28 personnel complement of the vessel had already been
Before the Court en banc is a motion to reconsider the decision promulgated on July paid.
20, 1982 which set aside the decision of respondent National Labor Relations
Commission and reinstated the decision of the National Seamen Board. In answer to the Company's cable last mentioned, complainant Bisula,
in representation of the other officers and crew members, sent on 24
To better understand the issues raised in the motion for reconsideration, we reiterate March 1979 a cable informing the Company that the officers and crew
the background facts of the case, Taken from the decision of the National Labor members were not agreeable to its 'suggestion'; that they were not
Relations Commission:  contented with their present salaries 'based on the volume of works,
type of ship with hazardous cargo and registered in a world wide
têñ.£îhqwâ£

trade': that the 'officers and crew (were) not interested in ITF
It appears that on different dates in December, 1978 and January,
membership if not actually paid with ITF rate that their 'demand is only
1979, the Seamen entered into separate contracts of employment with
50% increase based on present basic salary and that the proposed
the Company, engaging them to work on board M/T' Jannu for a
wage increase is the 'best and only solution to solve ITF problem'
period of twelve (12) months. After verification and approval of their
since the Company's salary rates 'especially in tankers (are) very far
contracts by the NSB, the Seamen boarded their vessel in Japan.
in comparison with other shipping agencies in Manila ...
 In reply, the Company proposed a 25% increase in the basic pay of
the complainant crew members, although it claimed, that it would
"suffer and absorb considerable amount of losses." The proposal was
accepted by the Seamen with certain conditions which were accepted
by the Company. Conformably with the agreement of the parties which
was effected through the cables abovementioned, the Seamen were
paid their new salary rates.
Subsequently, the Company sought authority from the NSB to cancel
the contracts of employment of the Seamen, claiming that its
principals had terminated their manning agreement because of the
actuations of the Seamen. The request was granted by the NSB
Executive Director in a letter dated 10 April 1979. Soon thereafter, the
Company cabled the Seamen informing them that their contracts
would be terminated upon the vessel's arrival in Japan. On 19 April
1979 they Arere asked to disembark from the vessel, their contracts
were terminated, and they were repatriated to Manila. There is no
showing that the Seamen were given the opportunity to at least
comment on the Company's request for the cancellation of their
contracts, although they had served only three (3) out of the twelve
(12) months' duration of their contracts.
The private respondents filed a complaint for illegal dismissal and non-payment of
earned wages with the National Seamen Board. The Vir-jen Shipping and Marine
Services Inc. in turn filed a complaint for breach of contract and recovery of excess
salaries and overtime pay against the private respondents. On July 2, 1980, the NSB
rendered a decision declaring that the seamen breached their employment contracts
when they demanded and received from Vir-jen Shipping wages over and above their
contracted rates. The dismissal of the seamen was declared legal and the seamen
were ordered suspended.
The seamen appealed the decision to the NLRC which reversed the decision of the
NSB and required the petitioner to pay the wages and other monetary benefits
corresponding to the unexpired portion of the manning contract on the ground that the
termination of the contract by the petitioner was without valid cause. Vir-jen Shipping
filed the present petition.
The private respondents submit the following issues in their motion for
reconsideration: 
têñ.£îhqwâ£
A. THIS HONORABLE COURT DID VIOLENCE TO LAW AND
JURISPRUDENCE WHEN IT HELD THAT THE FINDING OF FACT
OF THE NATIONAL SEAMEN BOARD THAT THE SEAMEN
VIOLATED THEIR CONTRACTS IS MORE CREDIBLE THAN THE
FINDING OF FACT OF THE NATIONAL LABOR RELATIONS
COMMISSION THAT THE SEAMEN DID NOT VIOLATE THEIR
CONTRACT.
B. THIS HONORABLE COURT ERRED IN FINDING THAT VIR-
JEN'S HAVING AGREED TO A 25% INCREASE OF THE SEAMEN'S
BASIC WAGE WAS NOT VOLUNTARY BUT WAS DUE TO
THREATS.
C. THIS HONORABLE COURT ERRED WHEN IT TOOK
COGNIZANCE OF THE ADDENDUM AGREEMENT; ASSUMING
THAT THE ADDENDUM AGREEMENT COULD BE TAKEN
COGNIZANCE OF, THIS HONORABLE COURT ERRED WHEN' IT
FOUND THAT PRIVATE RESPONDENTS HAD VIOLATED THE
SAME.
D, THIS HONORABLE COURT ERRED WHEN IT DID NOT FIND
PETITIONER VIRJEN LIABLE FOR HAVING TERMINATED BEFORE
EXPIRY DATE THE EMPLOYMENT CONTRACTS OF PRIVATE
RESPONDENTS, THERE BEING NO LEGAL AND JUSTIFIABLE
GROUND FOR SUCH TERMINATION.
E. THIS HONORABLE COURT ERRED IN FINDING THAT THE
PREPARATION BY PETITIONER OF THE TWO PAYROLLS AND
THE EXECUTION OF THE SIDE CONTRACT WERE NOT MADE IN
BAD FAITH.
F. THIS HONORABLE COURT INADVERTENTLY DISCRIMINATED
AGAINST PRIVATE RESPONDENTS.
At the outset, we are faced with the question whether or not the Court en banc should
give due course to the motion for reconsideration inspite of its having been denied
twice by the Court's Second Division. The case was referred to and accepted by the
Court en banc because of the movants' contention that the decision in this case by
the Second Division deviated from Wallem Phil. Shipping Inc. v. Minister of Labor (L-
50734-37, February 20, 1981), a First Division case with the same facts and issues.
We are constrained to answer the initial question in the affirmative.
A fundamental postulate of Philippine Constitutional Law is the fact, that there is only
one Supreme Court from whose decisions all other courts are required to take their
bearings. (Albert v. Court of First Instance, 23 SCRA 948; Barrera v. Barrera, 34
SCRA 98; Tugade v. Court of Appeals, 85 SCRA 226). The majority of the Court's
work is now performed by its two Divisions, but the Court remains one court, single,
unitary, complete, and supreme. Flowing from this nature of the Supreme Court is the
fact that, while ' individual Justices may dissent or partially concur with one another,
when the Court states what the law is, it speaks with only one voice. And that voice
being authoritative should be a clear as possible.
Any doctrine or principle of law laid down by the Court, whether en banc or in
Division, may be modified or reversed only by the Court en banc. (Section 2(3), Article
X, Constitution.) In the rare instances when one Division disagrees in its views with
the other Division, or the necessary votes on an issue cannot be had in a Division, the
case is brought to the Court en banc to reconcile any seeming conflict, to reverse or
modify an earlier decision, and to declare the Court's doctrine. This is what has
happened in this case.
The decision sought to be reconsidered appears to be a deviation from the Court's
decision, speaking through the First Division, in Wallem Shipping, Inc. v. Hon.
Minister of Labor (102 SCRA 835). Faced with two seemingly conflicting resolutions
of basically the same issue by its two Divisions, the Court. therefore, resolved to
transfer the case to the Court en banc. Parenthetically, the petitioner's comment on
the third motion for reconsideration states that the resolution of the motion might be
the needed vehicle to make the ruling in the Wallem case clearer and more in time
with the underlying principles of the Labor Code. We agree with the petitioner.
After an exhaustive, painstaking, and perspicacious consideration of the motions for
reconsideration and the comments, replies, and other pleadings related thereto, the
Court en banc is constrained to grant the motions. To grant the motion is to keep faith
with the constitutional mandate to afford protection to labor and to assure the rights of
workers to self-organization and to just and humane conditions of work. We sustain
the decision of the respondent National labor Relations Commission.
There are various arguments raised by the petitioners but the common thread running
through all of them is the contention, if not the dismal prophecy, that if the respondent
seamen are sustained by this Court, we would in effect "kill the en that lays the golden
egg." In other words, Filipino seamen, admittedly among the best in the world, should
remain satisfied with relatively lower if not the lowest, international rates of
compensation, should not agitate for higher wages while their contracts of
employment are subsisting, should accept as sacred, iron clad, and immutable the
side contracts which require them to falsely pretend to be members of international
labor federations, pretend to receive higher salaries at certain foreign ports only to
return the increased pay once the ship leaves that port, should stifle not only their
right to ask for improved terms of employment but their freedom of speech and
expression, and should suffer instant termination of employment at the slightest sign
of dissatisfaction with no protection from their Government and their courts.
Otherwise, the petitioners contend that Filipinos would no longer be accepted as
seamen, those employed would lose their jobs, and the still unemployed would be left
hopeless.
This is not the first time and it will not be the last where the threat of unemployment
and loss of jobs would be used to argue against the interests of labor; where efforts
by workingmen to better their terms of employment would be characterized as
prejudicing the interests of labor as a whole.
In 1867 or one hundred sixteen years ago. Chief Justice Beasley of the Supreme
Court of New Jersey was ponente of the court's opinion declaring as a conspiracy the
threat of workingmen to strike in connection with their efforts to promote unionism,  têñ.£îhqwâ£
It is difficult to believe that a right exists in law which we can scarcely
conceive can produce, in any posture of affairs, other than injuriois
results. It is simply the right of workmen, by concert of action, and by
taking advantage of their position, to control the business of another, I
am unwilling to hold that a right which cannot, in any, event, be
advantageous to the employee, and which must always be hurtful to
the employer, exists in law. In my opinion this indictment sufficiently
shows that the force of the confederates was brought to bear upon
their employer for the purpose of oppression and mischief and that
this amounts to a conspiracy, (State v. Donaldson, 32 NJL 151, 1867.
Cited in Chamberlain, Sourcebook on Labor, p. 13. Emphasis
supplied)
The same arguments have greeted every major advance in the rights of the
workingman. And they have invariably been proved unfounded and false.
Unionism, employers' liability acts, minimum wages, workmen's compensation, social
security and collective bargaining to name a few were all initially opposed by
employers and even well meaning leaders of government and society as "killing the
hen or goose which lays the golden eggs." The claims of workingmen were described
as outrageously injurious not only to the employer but more so to the employees
themselves before these claims or demands were established by law and
jurisprudence as "rights" and before these were proved beneficial to management,
labor, and the nation as a whole beyond reasonable doubt.
The case before us does not represent any major advance in the rights of labor and
the workingmen. The private respondents merely sought rights already established.
No matter how much the petitioner-employer tries to present itself as speaking for the
entire industry, there is no evidence that it is typical of employers hiring Filipino
seamen or that it can speak for them.
The contention that manning industries in the Philippines would not survive if the
instant case is not decided in favor of the petitioner is not supported by evidence. The
Wallem case was decided on February 20, 1981. There have been no severe
repercussions, no drying up of employment opportunities for seamen, and none of the
dire consequences repeatedly emphasized by the petitioner. Why should Vir-jen be all
exception?
The wages of seamen engaged in international shipping are shouldered by the
foreign principal. The local manning office is an agent whose primary function is
recruitment and who .usually gets a lump sum from the shipowner to defray the
salaries of the crew. The hiring of seamen and the determination of their
compensation is subject to the interplay of various market factors and one key factor
is how much in terms of profits the local manning office and the foreign shipowner
may realize after the costs of the voyage are met. And costs include salaries of
officers and crew members.
Filipino seamen are admittedly as competent and reliable as seamen from any other
country in the world. Otherwise, there would not be so many of them in the vessels
sailing in every ocean and sea on this globe. It is competence and reliability, not
cheap labor that makes our seamen so greatly in demand. Filipino seamen have
never demanded the same high salaries as seamen from the United States, the
United Kingdom, Japan and other developed nations. But certainly they are entitled to
government protection when they ask for fair and decent treatment by their
employer.-, and when they exercise the right to petition for improved terms of
employment, especially when they feel that these are sub-standard or are capable of
improvement according to internationally accepted rules. In the domestic scene, there
are marginal employers who prepare two sets of payrolls for their employees — one
in keeping with minimum wages and the other recording the sub-standard wages that
the employees really receive, The reliable employers, however, not only meet the
minimums required by fair labor standards legislation but even go way above the
minimums while earning reasonable profits and prospering. The same is true of
international employment. There is no reason why this Court and the Ministry of Labor
and. Employment or its agencies and commissions should come out with
pronouncements based on the standards and practices of unscrupulous or inefficient
shipowners, who claim they cannot survive without resorting to tricky and deceptive
schemes, instead of Government maintaining labor law and jurisprudence according
to the practices of honorable, competent, and law-abiding employers, domestic or
foreign.
If any minor advantages given to Filipino seamen may somehow cut into the profits of
local manning agencies and foreign shipowners, that is not sufficient reason why the
NSB or the ILRC should not stand by the former instead of listening to
unsubstantiated fears that they would be killing the hen which lays the golden eggs.
Prescinding from the above, we now hold that neither the National Seamen Board nor
the National Labor Relations Commission should, as a matter of official policy,
legitimize and enforce cubious arrangements where shipowners and seamen enter
into fictitious contracts similar to the addendum agreements or side contracts in this
case whose purpose is to deceive. The Republic of the Philippines and its ministries
and agencies should present a more honorable and proper posture in official acts to
the whole world, notwithstanding our desire to have as many job openings both here
and abroad for our workers. At the very least, such as sensitive matter involving no
less than our dignity as a people and the welfare of our workingmen must proceed
from the Batasang Pambansa in the form of policy legislation, not from administrative
rule making or adjudication
Another issue raised by the movants is whether or not the seamen violated their
contracts of employment.
The form contracts approved by the National Seamen Board are designed to protect
Filipino seamen not foreign shipowners who can take care of themselves. The
standard forms embody' the basic minimums which must be incorporated as parts of
the employment contract. (Section 15, Rule V, Rules and Regulations Implementing
the Labor Code.) They are not collective bargaining agreements or immutable
contracts which the parties cannot improve upon or modify in the course of the agreed
period of time. To state, therefore, that the affected seamen cannot petition their
employer for higher salaries during the 12 months duration of the contract runs
counter to established principles of labor legislation. The National Labor Relations
Commission, as the appellate tribunal from decisions of the National Seamen Board,
correctly ruled that the seamen did not violate their contracts to warrant their
dismissal.
The respondent Commission ruled:  têñ.£îhqwâ£
 In the light of all the foregoing facts, we find that the cable of the
seamen proposing an increase in their wage rates was not and could
not have been intended as a threat to comp el the Company to accede
to their proposals. But even assuming, if only for the sake of
argument, that the demand or — proposal for a wage increase was
accompanied by a threat that they would report to ITF if the Company
did not accede to the contract revision - although there really was no
such threat as pointed out earlier — the Seamen should not be held at
fault for asking such a demand. In the same case cited above, the
Supreme Court held:  têñ.£îhqwâ£
Petitioner claims that the dismissal of private
respondents was justified because the latter
threatened the ship authorities in acceding to their
demands, and this constitutes serious misconduct as
contemplated by the Labor Code. This contention is
not well-taken. But even if there had been such a
threat, respondents' behavior should not be censured
because it is but natural for them to employ some
means of pressing their demands for petitioner, the
refusal to abide with the terms of the Special
Agreement, to honor and respect the same, They were
only acting in the exercise of their rights, and to
deprive them of their freedom of expression is contrary
to law and public policy. There is no serious
misconduct to speak of in the case at bar which would
justify respondents' dismissal just because of their
firmness in their demand for the fulfillment by petitioner
of its obligation it entered into without any coercion,
specially on the part of private respondents.
(Emphasis supplied).
The above citation is from Wallem.
The facts show that when the respondents boarded the M/T Jannu there was no
intention to send their ship to Australia. On January 10, 1979, the petitioner sent a
cable to respondent shipmaster Bisula informing him of the procedure to be followed
in the computation of special compensation of crewmembers while in ITF controlled
ports and expressed regrets for not having earlier clarified the procedure as it thought
that the vessel would trade in Carribean ports only.
On March 22, 1979, the petitioner sent another cable informing Bisula of the special
compensation when the ship would call at Kwinana Australia.
The following day, shipmaster Bisula cabled Vir-jen stating that the officers and crews
were not interested in ITF membership if not paid ITF rates and that their only
demand was a 50 percent increase based on their then salaries. Bisula also pointed
out that Vir-jen rates were "very far in comparison with other shipping agencies in
Manila."
In reply, Vir-jen counter proposed a 25 percent increase. Only after Kyoei Tanker Co.,
Ltd., declined to increase the lumps sum amount given monthly to Vir-jen was the
decision to terminate the respondents' employment formulated.
The facts show that Virjen Initiated the discussions which led to the demand for
increased . The seamen made a proposal and the petitioner organized with a counter-
proposal. The ship had not vet gone to Australia or any ITF controlled port. There was
absolutely no mention of any strike. much less a threat to strike. The seamen had
done in act which under Philippine law or any other civilized law would be termed
illegal, oppressive, or malicious. Whatever pressure existed, it was mild compared to
accepted valid modes of labor activity.
We reiterate our ruling in Wallem. 
têñ.£îhqwâ£
Petitioner claims that the dismissal of private
respondents was justified because the latter
threatened the ship authorities in acceding to their
demands, and this constitutes serious misconduct as
contemplated by the Labor Code. This contention is
not well-taken. The records fail to establish clearly the
commission of any threat, But even if there had been
such a threat, respondents' behavior should not be
censured because it is but natural for them to employ
some means of pressing their demands for petitioner,
who refused to abide with the terms of the Special
Agreement, to honor and respect the same, They were
only acting in the exercise of their rights, and to
deprive them of their form of expression is contrary to
law and public policy. ...
Our dismissing the petition is premised on the assumption that the Ministry of Labor
and Employment and all its agencies exist primarily for the workinginan's interests
and, of course, the nation as a whole. The points raised by the Solicitor-General in his
comments refer to the issue of allowing what the petitioner importunes under the
argument of "killing the hen which lays the golden eggs." This is one of policy which
should perhaps be directed to the Batasang Pambansa and to our country's other
policy makers for more specific legislation on the matter, subject to the constitutional
provisions protecting labor, promoting social justice, and guaranteeing non-
abridgement of the freedom of speech, press, peaceable assembly and petition. We
agree with the movants that there is no showing of any cause, which under the Labor
Code or any current applicable law, would warrant the termination of the respondents'
services before the expiration of their contracts. The Constitution guarantees State
assurance of the rights of workers to security of tenure. (Sec. 9, Article II,
Constitution). Presumptions and provisions of law, the evidence on record, and
fundamental State policy all dictate that the motions for reconsideration should be
granted.

WHEREFORE, the motions for reconsideration are hereby GRANTED. The petition is
DISMISSED for lack of merit. The decision of the National Labor Relations
Commission is AFFIRMED. No costs.

SO ORDERED. 1äwphï1.ñët
 G.R. No. 125038 November 6, 1997
THE HONGKONG AND SHANGHAI BANKING CORPORATION EMPLOYEES
UNION, Petitioner, v. NATIONAL LABOR RELATIONS COMMISSION AND
THE HONGKONG AND SHANGHAI BANKING CORPORATION,
LTD., Respondents.
REGALADO, J.:
In an Order dated November 27, 1995, 1 respondent National Labor Relations
Commission (NLRC) reversed and set aside the order issued by Labor Arbiter
Felipe T. Garduque II which dismissed and remanded for further proceedings
the case for unfair labor practice filed by private respondent Hongkong and
Shanghai Banking Corporation, Ltd. (the "Bank") against petitioner Hongkong
and Shanghai Banking Corporation Employees Union (the "Union"), the
recognized bargaining representative of the Bank's regular rank and file
employees. The petition for certiorari impugns the aforesaid Order of
respondent commission.
The case at bar arose from the issuance of a non-executive job evaluation
program (JEP) lowering the starting salaries of future employees, resulting
from the changes made in the job grades and structures, which was
unilaterally implemented by the Bank retroactive to January 1, 1993. The
program in question was announced by the Bank on January 18, 1993.
In a letter dated January 20, 1993, 2 the Union, through its President, Peter
Paul Gamelo, reiterated its previous verbal objections to the Bank's unilateral
decision to devise and put into effect the said program because it allegedly
was in violation of the existing collective bargaining agreement (CBA) between
the parties and thus constituted unfair labor practice. The Union demanded the
suspension of the implementation of the JEP and proposed that the same be
instead taken up or included in their upcoming CBA negotiations.
The Bank replied in a letter dated January 25, 1993 3 that the JEP was issued
in compliance with its obligation under the CBA, apparently referring to Article
III, Section 18 thereof which provides that:
Within the lifetime of this Agreement the BANK shall conduct a job evaluation
of employee positions. The implementation timetable of the said exercise shall
be furnished the UNION by the BANK within two (2) months from the signing
of this Agreement.
This prompted the Union to undertake concerted activities to protest the
implementation of the JEP, such as whistle blowing during office hours starting
on March 15, 1993 up to the 23rd day, and writing to clients of the Bank
allegedly to inform them of the real situation then obtaining and of an
imminent disastrous showdown between the Bank and the Union.
The Union engaged in said activities despite the fact that as early as February
11, 1993, 4 it had already initiated the renegotiation of the non-
representational provisions of the CBA by submitting their proposal to the
Bank, to which the latter submitted a reply. As a matter of fact, negotiations
on the CBA commenced on March 5, 1993 and continued through March 24,
1993 when the Bank was forced to declare a "recess" to last for as long as the
Union kept up with its concerted activities. The Union refused to concede to
the demand of the Bank unless the latter agreed to suspend the
implementation of the JEP.
Instead of acquiescing thereto, the Bank filed on April 5, 1993 5 with the
Arbitration Branch of the NLRC a complaint for unfair labor practice against the
Union allegedly for engaging in the contrived activities against the ongoing
CBA negotiations between the Bank and the Union in an attempt to unduly
coerce and pressure the Bank into agreeing to the Union's demand for the
suspension of the implementation of the JEP. It averred that such concerted
activities, despite the ongoing CBA negotiations, constitute unfair labor
practice (ULP) and a violation of the Union's duty to bargain collectively under
Articles 249 (c) and 252 of the Labor Code.
The Union filed a Motion to Dismiss 6 on the ground that the complaint states
no cause of action. It alleged that its united activities were actually being
waged to protest the Bank's arbitrary imposition of a job evaluation program
and its unjustifiable refusal to suspend the implementation thereof. It further
claimed that the unilateral implementation of the JEP was in violation of Article
I, Section 3 of the CBA which prohibits a diminution of existing rights,
privileges and benefits already granted and enjoyed by the employees. To be
sure, so the Union contended, the object of the Bank in downgrading existing
CBA salary scales, despite its sanctimonious claim that the reduced rates will
apply only to future employees, is to torpedo the salary structure built by the
Union through three long decades of periodic hard bargaining with the Bank
and to thereafter replace the relatively higher-paid unionized employees with
cheap newly hired personnel. In light of these circumstances, the Union insists
that the right to engage in these concerted activities is protected under Article
246 of the Labor Code regarding non-abridgment of the right to self-
organization and, hence, is not actionable in law.
In its Opposition, 7 the Bank stated that the Union was actually challenging
merely that portion of the JEP providing for a lower rate of salaries for future
employees. Contrary to the Union's allegations in its motion to dismiss that the
JEP had resulted in diminution of existing rights, privileges and benefits, the
program has actually granted salary increases to, and in fact is already being
availed of by, the rank and file staff. The Union's objections are premised on
the erroneous belief that the salary rates for future employees is a matter
which must be subject of collective bargaining negotiation. The Bank believes
that the implementation of the JEP and the resultant lowering of the starting
salaries of future employees, as along as there is no diminution of existing
benefits and privileges being accorded to existing rank and file staff, is entirely
a management prerogative.
In an Order dated July 29, 1993, 8 the labor arbiter dismissed the complaint
with prejudice and ordered the parties to continue with the collective
bargaining negotiations, there having been no showing that the Union acted
with criminal intent in refusing to comply with its duty to bargain but was
motivated by the refusal of management to suspend the implementation of its
job evaluation program, and that it is not evident that the concerted activities
caused damage to the Bank. It concluded that, at any rate, the Bank is not left
without recourse, in case more aggressive and serious acts be committed in
the future by the Union, since it could institute a petition to declare illegal such
acts which may constitute a strike or picketing.
On appeal, respondent NLRC declared that based on the facts obtaining in this
case, it becomes necessary to resolve whether or not the Union's objections to
the implementation of the JEP are valid hand, if it is without basis, whether or
not the concerted activities conducted by the Union constitute unfair labor
practice. It held that the labor arbiter exceeded his authority when he ordered
the parties to return to the bargaining table and continue with CBA
negotiations, considering that his jurisdiction is limited only to labor disputes
arising from those cases provided for under Article 217 of the Labor Code, and
that the labor arbiter's participation in this instance only begins when the
appropriate complaint for unfair labor practice due to a party's refusal to
bargain collectively is filed. Consequently, the case was ordered remanded to
the arbitration branch of origin for further proceedings in accordance with the
guidelines provided for therein.
Hence, this petition.
The Union asserts that respondent NLRC committed grave abuse of discretion
in failing to decide that it is not guilty of unfair labor practice considering that
the concerted activities were actually directed against the implementation of
the JEP and not at before the start of negotiations. Hence, it cannot be
deemed to have engaged in bad-faith bargaining. It claims that respondent
NLRC gravely erred in remanding the case for further proceedings to
determine whether the objections raised by the Union against the
implementation of the JEP are valid or not, for the simple reason that such is
not the issue involved in the complaint for ULP filed by the Bank but rather
whether the Union is guilty of bargaining in bad faith in violation of the Labor
Code. It is likewise averred that Labor Arbiter Garduque cannot be considered
to have exceeded his authority in ordering the parties to proceed with the CBA
negotiations because it was precisely a complaint for ULP which the Bank filed
against the Union.
We find no merit in the petition.
The main issue involved in the present case is whether or not the labor arbiter
correctly ordered the dismissal with prejudice of the complaint for unfair labor
practice on the case merely of the Complaint, the Motion to Dismiss as well as
the Opposition thereto, filed by the parties. We agree with respondent NLRC
that there are several questions that need to be threshed out before there can
be an intelligent and complete determination of the propriety of the charges
made by the Bank against the Union.
A perusal of the allegations and arguments raised by the parties in the Motion
to Dismiss and the Opposition thereto will readily reveal that there are several
issues that must preliminarily be resolved and which will require the
presentation of evidence other than the bare allegations in the pleadings which
have been filed, in order to ascertain the propriety or impropriety of the ULP
charge against the Union.
Foremost among the issues requiring resolution are:
1. Whether or not the unilateral implementation of the JEP constitutes a
violation of the CBA provisions requiring the Bank to furnish the Union with the
job evaluation implementation timetable within two months from the signing
of the CBA on July 30, 1990, 9 and prohibiting the diminution of existing rights,
privileges and benefits already granted and enjoyed by the employees; 10
2. Whether or not the concerted acts committed by the Union were done with
just cause and in good faith in the lawful exercise of their alleged right under
Article 246 of the Labor Code on non-abridgment of the right to self-
organization; and
3. Whether or not the fixing of salaries of future employees pursuant to a job
evaluation program is an exclusive management prerogative or should be
subject of collective bargaining negotiation.
It does not fare petitioner any better that it had, wittingly or unwittingly,
alleged in its Consolidated Reply 11 that the concerted actions began on
January 22, 1993 even before the commencement of CBA negotiations which
started in March, 1993. Apparently that was an attempt on the part of the
Union to rectify the incriminating pronouncement of the labor arbiter in his
questioned order to the effect that the challenged activities occurred from
March 15 to 23, 1993 during the CBA negotiations. This seemingly conflicting
factual allegations are crucial in resolving the issue of whether or not the
concerted activities were committed in violation of the Union's duty to bargain
collectively and would therefore constitute unfair labor practice.
Likewise, the labor arbiter, in finding that the Union was not motivated by any
criminal intent in resorting to said concerted activities, merely gave a
sweeping statement without bothering to explain the factual and evidentiary
bases therefor. The declaration that there was no damage caused to the Bank
by reason of such Union activities remains unsubstantiated. Nowhere is there
any showing in the labor arbiter's order of dismissal from which it can be fairly
inferred that such a statement is supported by even a preponderance of
evidence. What purportedly is an adjudication on the merits is in truth and in
fact a short discourse devoid of evidentiary value but every liberal with
generalities and hasty conclusions.
The fact that there is an alternative remedy available to the Bank, as the labor
arbiter would suggest, will not justify an otherwise erroneous order. It bears
emphasizing that by the very nature of an unfair labor practice, it is not only a
violation of the civil rights of both labor and management but is also a criminal
offense against the State which is subject to prosecution and
punishment. 12 Essentially, a complaint for unfair labor practice is no ordinary
labor dispute and therefore requires a more thorough analysis, evaluation and
appreciation of the factual and legal issues involved.
One further point. The need for a more than cursory disposition on the unfair
labor practice issue is made doubly exigent in view of the Bank's allegation in
its Comment 13 that a strike has been launched by the Union specifically to
protest the implementation of the JEP. Although the strike incident is not an
issue in this case, this supervening event bespeaks the worsening situation
between the parties that calls for a more circumspect assessment of the actual
issues herein involved.
Necessarily, a determination of the validity of the Bank's unilateral
implementation of the JEP or the Union's act of engaging in concerted
activities involves an appraisal of their motives. In cases of this nature,
motivations are seldom expressly avowed, and avowals are not always candid.
There must thus be a measure of reliance on the administrative agency. It was
incumbent upon the labor arbiter, in the first instance, to weigh such
expressed motives in determining the effect of an otherwise equivocal act. The
Labor Code does not undertake the impossible task of specifying in precise and
unmistake language each incident which constitutes an unfair labor practice.
Rather, it leaves to the court the work of applying the law's general prohibitory
language in light
of infinite combinations of events which may be charged as violative of its
terms. 14
It has been held that the crucial question whether or not a party has met his
statutory duty to bargain in good faith typically turns on the facts of the
individual case. There is no per se test of good faith in bargaining. Good faith
or bad faith is an inference to be drawn from the facts. To some degree, the
question of good faith may be a question of credibility. The effect of an
employer's or a union's actions individually is not the test of good-faith
bargaining, but the impact of all such occasions or actions, considered as a
whole, and the inferences fairly drawn therefrom collectively may offer a basis
for the finding of the NLRC. 15
This, the court or the quasi-judicial agency concerned can do only after it has
made a comprehensive review of the allegations made in the pleadings filed
and the evidence presented in support thereof by the parties, but definitely
not where, as in the present case, the accusation of unfair labor practice was
negated and subsequently discharged on a mere motion to dismiss.
It is a well-settled rule that labor laws do not authorize interference with the
employer's judgment in the conduct of his business. The Labor Code and its
implementing rules do not vest in the labor arbiters nor in the different
divisions of the NLRC nor in the courts managerial authority. 16 The hiring,
firing, transfer, demotion, and promotion of employees has been traditionally
identified as a management prerogative subject to limitations found in the law,
a collective bargaining agreement, or in general principles of fair play and
justice. 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. 17
Accordingly, this Court, in a number of cases, has recognized and affirmed the
prerogative of management to implement a job evaluation program or a
reorganization for as long as it is not contrary to law, morals or public policy.
Thus, in Batongbacal vs. Associated Bank, et al., 18 involving the dismissal of
an assistant vice-president for refusing to tender his courtesy resignation
which the bank required in line with its reorganization plan, the Court held,
among others, that it is not prepared to preempt the employer's prerogative to
grant salary increases to its employees by virtue of the implementation of the
reorganization plan which thereby caused a distortion in salaries,
notwithstanding that there is a semblance of discrimination in this aspect of
the bank's organizational setup.
In the case of National Sugar Refineries Corporation vs. National Labor
Relations Commission, et al., 19 the petitioner implemented a job evaluation
program affecting all employees, from rank and file to department heads. The
JEP was designed to rationalize the duties and functions of all positions,
reestablish levels of responsibility, and reorganize both wage and operational
structures. Jobs were ranked according to effort, responsibility, training and
working conditions and relative worth of the job. As a result, all positions were
re-evaluated, and all employees were granted salary adjustments and
increases in benefits commensurate to their actual duties and functions. With
the JEP, the supervisory employees, who were members of the respondent
Union therein and were formerly treated in the same manner as rank and file
employees, were considered no longer entitled to overtime, rest day and
holiday pay but their basic salaries increased by 50%. The respondents therein
sued for recovery of those benefits.
In upholding management's prerogative to implement the JEP, the Court held
therein that:
In the case at bar, private respondent union has miserably failed to convince
this Court that the petitioner acted in bad faith in implementing the JE
Program. There is no showing that the JE Program was intended to circumvent
the law and deprive the members of respondent union of the benefits they
used to receive.
. . . It is the prerogative of management to regulate, according to its
discretion and judgment, all aspects of employment. This flows from the
established rule that labor laws does not authorize the substitution of the
judgment of the employer in the conduct of its business. Such management
prerogative may be availed of without fear of any liability so long as it is
exercised in good faith for the advancement of the employers' interest and not
for the purpose of defeating or circumventing the rights of employees under
special laws or valid agreement and are not exercised in a malicious, harsh,
oppressive, vindictive or wanton manner or out of malice or spite.
Just recently, this Court had the occasion to reiterate and uphold the
established and unequivocal right of an employer to implement a
reorganization in the valid exercise of its management prerogative, thus:
Being a regular employee, petitioner is of the view that she had already
acquired a vested right to the position of Executive Secretary, together with its
corresponding grade, rank and salary, which cannot be impaired by the 1991
reorganization of CENECO.
xxx xxx xxx
In Aurelio vs. National Labor Relations Commission, et al., we upheld the
power of the board of directors of a corporation to implement a reorganization,
including the abolition of various positions, as implied or incidental to its power
to conduct the regular business affairs of the corporation. In recognition of the
right of management to conduct its own business affairs in achieving its
purpose, we declared that management is at liberty, absent any malice of its
part, to abolish positions which it deems no longer necessary.
This Court, absent any finding of bad faith on the part of management, will not
deny it the right to such initiative simply to protect the person holding that
office. In other words, where there is nothing that would indicate that an
employee's position was abolished to ease him out of employment, the
deletion of that position should be accepted as a valid exercise of management
prerogative.
xxx xxx xxx
No ill will can be ascribed to private respondents as all the positions specified
in the old plantilla were abolished and all other employees were given new
appointments. In short, petitioner was not singled out. She was not the only
employee affected by the reorganization. The reorganization was fair to
petitioner, if not to all of the employees of CENECO.
It should be remembered that petitioner's new appointment was made as a
result of valid organizational changes. A thorough review of both the
indispensable and the unessential positions was undertaken by a committee,
specifically formed for this purpose, before the Board of Directors abolished all
the positions. Based on the qualifications and aptitude of petitioner, the
committee and, subsequently, private respondents, deemed it best to appoint
petitioner as Secretary of the Engineering Department. We cannot meddle in
such a decision lest we interfere with the private respondents' right to
independently control and manage their operations absent any unfair or
inequitable acts.
Notwithstanding the relevance of the foregoing disquisition, considering
however the factual antecedents in this case, or the lack of a complete
presentation thereof, we are constrained to refrain from ruling outright in
favor of the Bank. While it would appear that remanding the case would mean
a further delay in its disposition, we are not inclined to sacrifice equity and
justice for procedural technicalities or expediency. The order dismissing the
complaint for ULP with prejudice, to say the least, leaves much to be desired.
Anent the question on whether or not the labor arbiter has jurisdiction to order
the parties to return to and continue with the collective bargaining
negotiations, there is a commentary to the effect that, as one of the reliefs
which may be granted in ULP cases, the Court may, in addition to the usual
cease and desist orders, issue an affirmative order to the employer to
"bargain" with the bargaining agent, as the exclusive representative of its
employees, with respect to the rate of pay, hours of work, and other
conditions of employment. 21 On this aspect, respondent NLRC stands to be
reversed. Nevertheless, its directive on this point is deemed vacated and
ineffectual by our decision to remand the case for further proceedings.
WHEREFORE, subject to the foregoing observation, the challenged disposition
of respondent National Labor Relations Commission is hereby AFFIRMED.
SO ORDERED.

If the purpose of a reorganization is to be achieved, changes in positions and

ranking of employees should be expected. To insist on one's old position and
ranking after a reorganization would render such endeavor ineffectual. Here,
to compel private respondents to give petitioner her old ranking would deprive
them of their right to adopt changes in the cooperative's personnel structure
as proposed by the Steering Committee.

xxx xxx xxx

. . . As we have held, security of tenure, while constitutionally guaranteed,

cannot be used to deprive an employer of its prerogatives under the law. Even
if the law is solicitous of the welfare of the employees, it must also protect the
right of an employer to exercise what are clearly management prerogatives. 20