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Y


FIRST DIVISION
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petitioner,
vs.


 
 
ñrespondents.
Angara, Abello, Concepcion, Regala & Cruz for petitioner.
Dominador Maglalang for private respondent.

!!d "
This is a petition for certiorari under Rule 65 of the Rules of Court seeking the annulment of the
resolution of the respondent National Labor Relations Commission dated March 12, 1987 (p.
28, Rollo) in NLRC Case No. NCR-8-3808-83, entitled, "Apolinario M. Signo, Complainant,
versus Manila Electric Company, Respondents", affirming the decision of the Labor Arbiter
which ordered the reinstatement of private respondent herein, Apolinario Signo, to his former
position without backwages.
The antecedent facts are as follows:
Private respondent Signo was employed in petitioner company as supervisor-leadman since
January 1963 up to the time when his services were terminated on May 18, 1983.
In 1981, a certain Fernando de Lara filed an application with the petitioner company for
electrical services at his residence at Peñafrancia Subdivision, Marcos Highway, Antipolo, Rizal.
Private respondent Signo facilitated the processing of the said application as well as the
required documentation for said application at the Municipality of Antipolo, Rizal. In
consideration thereof, private respondent received from Fernando de Lara the amount of
P7,000.00. Signo thereafter filed the application for electric services with the Power Sales
Division of the company.
It was established that the area where the residence of de Lara was located is not yet within the
serviceable point of Meralco, because the place was beyond the 30-meter distance from the
nearest existing Meralco facilities. In order to expedite the electrical connections at de Lara's
residence, certain employees of the company, including respondent Signo, made it appear in
the application that the sari-sari store at the corner of Marcos Highway, an entrance to the
subdivision, is applicant de Lara's establishment, which, in reality is not owned by the latter.
As a result of this scheme, the electrical connections to de Lara's residence were installed and
made possible. However, due to the fault of the Power Sales Division of petitioner company,
Fernando de Lara was not billed for more than a year.
Petitioner company conducted an investigation of the matter and found respondent Signo
responsible for the said irregularities in the installation. Thus, the services of the latter were
terminated on May 18, 1983.
On August 10 1983, respondent Signo filed a complaint for illegal dismissal, unpaid wages, and
separation pay.
After the parties had submitted their position papers, the Labor Arbiter rendered a decision (p.
79, Rollo) on April 29, 1985, which stated, inter alia:
Verily, complainant's act of inducing the Meralco employees to effectuate the
installation on Engr. de Lara's residence prejudiced the respondent, and
therefore, complainant himself had indeed became a participant in the
transactions, although not directly, which turned out to be illegal, not to mention
that some of the materials used therein belongs to Meralco, some of which were
inferior quality. . . .
While complainant may deny the violation, he cannot do away with company's
Code on Employee Discipline, more particularly Section 7, par. 8 and Section 6,
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À



par. 24 thereof However, as admitted by the respondent, the infraction of the

above cited Code is punishable by reprimand to dismissal."
... . And in this case, while considering that complainant indeed committed the
above-cited infractions of company Code of Employee Discipline, We shall also
consider his records of uninterrupted twenty (20) years of service coupled with
two (2) commendations for honesty. Likewise, We shall take note that subject
offense is his first, and therefore, to impose the extreme penalty of dismissal is
certainly too drastic. A penalty short of dismissal is more in keeping with justice,
and adherence to compassionate society.
WHEREFORE, respondent Meralco is hereby directed to reinstate complainant
Apolinario M. Signo to his former position as Supervisor Leadman without
backwages, considering that he is not at all faultless. He is however, here
warned, that commission of similar offense in the future, shall be dealt with more
severely.
SO ORDERED.
Both parties appealed from the decision to the respondent Commission. On March 12, 1987, the
respondent Commission dismissed both appeals for lack of merit and affirmed in toto the
decision of the Labor Arbiter.
On June 23, 1987, the instant petition was filed with the petitioner contending that the
respondent Commission committed grave abuse of discretion in affirming the decision of the
Labor Arbiter. A temporary restraining order was issued by this Court on August 3, 1987,
enjoining the respondents from enforcing the questioned resolution of the respondent
Commission.
The issue to resolve in the instant case is whether or not respondent Signo should be dismissed
from petitioner company on grounds of serious misconduct and loss of trust and confidence.
Petitioner contends that respondent Signo violated Sections 6 and 7 of the company's Code on
Employee Discipline, which provide:
Section 6, Par. 24²Encouraging, inducing or threatening another employee to
perform an act constituting a violation of this Code or of company work, rules or
an offense in connection with the official duties of the latter, or allowing himself to
be persuaded, induced or influenced to commit such offense.
Penalty²Reprimand to dismissal, depending upon the gravity of the offense.
Section 7, Par. 8²Soliciting or receiving money, gift, share, percentage or
benefits from any person, personally or through the mediation of another, to
perform an act prejudicial to the Company.
Penalty²Dismissal. (pp. 13-14, Rollo)
Petitioner further argues that the acts of private respondent constituted breach of trust and
caused the petitioner company economic losses resulting from the unbilled electric consumption
of de Lara; that in view thereof, the dismissal of private respondent Signo is proper considering
the circumstances of the case.
The power to dismiss is the normal prerogative of the employer. An employer, generally, can
dismiss or lay-off an employee for just and authorized causes enumerated under Articles 282
and 283 of the Labor Code. However, the right of an employer to freely discharge his
employees is subject to regulation by the State, basically in the exercise of its paramount police
power. This is so because the preservation of the lives of the citizens is a basic duty of the
State, more vital than the preservation of corporate profits (Euro-Linea, Phil. Inc. v. NLRC, G.R.
No. 75782, December 1, 1987,156 SCRA 78).
There is no question that herein respondent Signo is guilty of breach of trust and violation of
company rules, the penalty for which ranges from reprimand to dismissal depending on the
gravity of the offense. However, as earlier stated, the respondent Commission and the Labor
Arbiter found that dismissal should not be meted to respondent Signo considering his twenty
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(20) years of service in the employ of petitioner, without any previous derogatory record, in
addition to the fact that petitioner company had awarded him in the past, two (2)
commendations for honesty. If ever the petitioner suffered losses resulting from the unlisted
electric consumption of de Lara, this was found to be the fault of petitioner's Power Sales
Division.
We find no reason to disturb these findings. Well-established is the principle that findings of
administrative agencies which have acquired expertise because their jurisdiction is confined to
specific matters are generally accorded not only respect but even finality. Judicial review by this
Court on labor cases does not go so far as to evaluate the sufficiency of the evidence upon
which the proper labor officer or office based his or its determination but is limited to issues of
jurisdiction or grave abuse of discretion (Special Events and Central Shipping Office Workers
Union v. San Miguel Corporation, G.R. Nos. L-51002-06, May 30,1983,122 SCRA 557).
This Court has held time and again, in a number of decisions, that notwithstanding the existence
of a valid cause for dismissal, such as breach of trust by an employee, nevertheless, dismissal
should not be imposed, as it is too severe a penalty if the latter has been employed for a
considerable length of time in the service of his employer. (Itogon-Suyoc Mines, Inc. v. NLRC, et
al., G.R. No. L- 54280, September 30,1982,117 SCRA 523; Meracap v. International Ceramics
Manufacturing Co., Inc., et al., G.R. Nos. L-48235-36, July 30,1979, 92 SCRA 412; Sampang v.
Inciong, G.R. No. 50992, June 19,1985,137 SCRA 56; De Leon v. NLRC, G.R. No. L-52056,
October 30,1980, 100 SCRA 691; Philippine Airlines, Inc. v. PALEA, G.R. No. L-24626, June
28, 1974, 57 SCRA 489).
In a similar case, this Court ruled:
As repeatedly been held by this Court, an employer cannot legally be compelled
to continue with the employment of a person who admittedly was guilty of breach
of trust towards his employer and whose continuance in the service of the latter
is patently inimical to its interest. The law in protecting the rights of the laborers,
authorized neither oppression nor self- destruction of the employer.
However, taking into account private respondent's 'twenty-three (23) years of
service which undisputedly is unblemished by any previous derogatory record' as
found by the respondent Commission itself, and since he has been under
preventive suspension during the pendency of this case, in the absence of a
showing that the continued employment of private respondent would result in
petitioner's oppression or self-destruction, We are of the considered view that his
dismissal is a drastic punishment. ... .
xxx xxx xxx
The ends of social and compassionate justice would therefore be served if
private respondent is reinstated but without backwages in view of petitioner's
obvious good faith. (Itogon- Suyoc Mines, Inc. v. NLRC, et al., 11 7 SCRA 528)
Further, in carrying out and interpreting the Labor Code's provisions and its implementing
regulations, the workingman's welfare should be the primordial and paramount consideration.
This kind of interpretation gives meaning and substance to the liberal and compassionate spirit
of the law as provided for in Article 4 of the New Labor Code which states that "all doubts in the
implementation and interpretation of the provisions of the Labor Code including its implementing
rules and regulations shall be resolved in favor of labor" (Abella v. NLRC, G.R. No. 71812, July
30,1987,152 SCRA 140).
In view of the foregoing, reinstatement of respondent Signo is proper in the instant case, but
without the award of backwages, considering the good faith of the employer in dismissing the
respondent.
ACCORDINGLY, premises considered, the petition is hereby DISMISSED and the assailed
decision of the National Labor Relations Commission dated March 12, 1987 is AFFIRMED. The
temporary restraining order issued on August 3, 1987 is lifted. SO ORDERED.
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FIRST DIVISION
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 Petitioners,
vs.


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 Respondents.
DECISION
0(d "
Challenged in this petition for review on certiorari is the Decision1 of the Court of Appeals (CA)
dated January 29, 2004 in CA-G.R. SP No. 75732 affirming the decision2 dated August 23,
2002 rendered by the National Labor Relations Commission (NLRC) in NLRC CA No. 026225-
00.
The antecedent facts are as follows:
Petitioner Maribel S. Santos was hired as X-Ray Technician in the Radiology department of
private respondent St. Luke's Medical Center, Inc. (SLMC) on October 13, 1984. She is a
graduate of Associate in Radiologic Technology from The Family Clinic Incorporated School of
Radiologic Technology.
On April 22, 1992, Congress passed and enacted Republic Act No. 7431 known as the
"Radiologic Technology Act of 1992." Said law requires that no person shall practice or offer to
practice as a radiology and/or x-ray technologist in the Philippines without having obtained the
proper certificate of registration from the Board of Radiologic Technology.
On September 12, 1995, the Assistant Executive Director-Ancillary Services and HR Director of
private respondent SLMC issued a final notice to all practitioners of Radiologic Technology to
comply with the requirement of Republic Act No. 7431 by December 31, 1995; otherwise, the
unlicensed employee will be transferred to an area which does not require a license to practice
if a slot is available.
On March 4, 1997, the Director of the Institute of Radiology issued a final notice to petitioner
Maribel S. Santos requiring the latter to comply with Republic Act. No. 7431 by taking and
passing the forthcoming examination scheduled in June 1997; otherwise, private respondent
SLMC may be compelled to retire her from employment should there be no other position
available where she may be absorbed.
On May 14, 1997, the Director of the Institute of Radiology, AED-Division of Ancillary Services
issued a memorandum to petitioner Maribel S. Santos directing the latter to submit her PRC
Registration form/Examination Permit per Memorandum dated March 4, 1997.
On March 13, 1998, the Director of the Institute of Radiology issued another memorandum to
petitioner Maribel S. Santos advising her that only a license can assure her of her continued
employment at the Institute of Radiology of the private respondent SLMC and that the latter is
giving her the last chance to take and pass the forthcoming board examination scheduled in
June 1998; otherwise, private respondent SLMC shall be constrained to take action which may
include her separation from employment.
On November 23, 1998, the Director of the Institute of Radiology issued a notice to petitioner
Maribel S. Santos informing the latter that the management of private respondent SLMC has
approved her retirement in lieu of separation pay.
On November 26, 1998, the Personnel Manager of private respondent SLMC issued a "Notice
of Separation from the Company" to petitioner Maribel S. Santos effective December 30, 1998
in view of the latter's refusal to accept private respondent SLMC's offer for early retirement. The
notice also states that while said private respondent exerted its efforts to transfer petitioner
Maribel S. Santos to other position/s, her qualifications do not fit with any of the present vacant
positions in the hospital.
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In a letter dated December 18, 1998, a certain Jack C. Lappay, President of the Philippine
Association of Radiologic Technologists, Inc., wrote Ms. Judith Betita, Personnel Manager of
private respondent SLMC, requesting the latter to give "due consideration" to the organization's
three (3) regular members of his organization (petitioner Maribel S. Santos included) "for not
passing yet the Board of Examination for X-ray Technology," "by giving them an assignment in
any department of your hospital awaiting their chance to pass the future Board Exam."
On January 6, 1999, the Personnel Manager of private respondent SLMC again issued a
"Notice of Separation from the Company" to petitioner Maribel S. Santos effective February 5,
1999 after the latter failed to present/ submit her appeal for rechecking to the Professional
Regulation Commission (PRC) of the recent board examination which she took and failed.
On March 2, 1999, petitioner Maribel S. Santos filed a complaint against private respondent
SLMC for illegal dismissal and non-payment of salaries, allowances and other monetary
benefits. She likewise prayed for the award of moral and exemplary damages plus attorney's
fees.
In the meantime, petitioner Alliance of Filipino Workers (AFW), through its President and Legal
Counsel, in a letter dated September 22, 1999 addressed to Ms. Rita Marasigan, Human
Resources Director of private respondent SLMC, requested the latter to accommodate petitioner
Maribel S. Santos and assign her to the vacant position of CSS Aide in the hospital arising from
the death of an employee more than two (2) months earlier.
In a letter dated September 24, 1999, Ms. Rita Marasigan replied thus:
Gentlemen:
Thank you for your letter of September 22, 1999 formally requesting to fill up the vacant regular
position of a CSS Aide in Ms. Maribel Santos' behalf.
The position is indeed vacant. Please refer to our Recruitment Policy for particulars especially
on minimum requirements of the job and the need to meet said requirements, as well as other
pre-employment requirements, in order to be considered for the vacant position. As a matter of
fact, Ms. Santos is welcome to apply for any vacant position on the condition that she
possesses the necessary qualifications.
As to the consensus referred to in your letter, may I correct you that the agreement is,
regardless of the vacant position Ms. Santos decides to apply, she must go through the usual
application procedures. The formal letter, I am afraid, will not suffice for purposes of recruitment
processing. As you know, the managers requesting to fill any vacancy has a say on the matter
and correctly so. The manager's inputs are necessarily factored into the standard recruitment
procedures. Hence, the need to undergo the prescribed steps.
Indeed we have gone through the mechanics to accommodate Ms. Santos' transfer while she
was employed with SLMC given the prescribed period. She was given 30 days from issuance of
the notice of termination to look for appropriate openings which incidentally she wittingly
declined to utilize. She did this knowing fully well that the consequences would be that her
application beyond the 30-day period or after the effective date of her termination from SLMC
would be considered a re-application with loss of seniority and shall be subjected to the
pertinent application procedures.
Needless to mention, one of the 3 X-ray Technologists in similar circumstances as Ms. Santos
at the time successfully managed to get herself transferred to E.R. because she opted to apply
for the appropriate vacant position and qualified for it within the prescribed 30-day period. The
other X-ray Technologist, on the other hand, as you may recall, was eventually terminated not
just for his failure to comply with the licensure requirement of the law but for cause (refusal to
serve a customer).
Why Ms. Santos opted to file a complaint before the Labor Courts and not to avail of the
opportunity given her, or assuming she was not qualified for any vacant position even if she
tried to look for one within the prescribed period, I simply cannot understand why she also
refused the separation pay offered by Management in an amount beyond the minimum required
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M



by law only to re-apply at SLMC, which option would be available to her anyway even (if she)
chose to accept the separation pay!
Well, here's hoping that our Union can timely influence our employees to choose their options
well as it has in the past.
(Signed)
RITA MARASIGAN
Subsequently, in a letter dated December 27, 1999, Ms. Judith Betita, Personnel Manager of
private respondent SLMC wrote Mr. Angelito Calderon, President of petitioner union as follows:
Dear Mr. Calderon:
This is with regard to the case of Ms. Maribel Santos. Please recall that last Oct. 8, 1999, Ms.
Rita Marasigan, HR Director, discussed with you and Mr. Greg Del Prado the terms regarding
the re-hiring of Ms. Maribel Santos. Ms. Marasigan offered Ms. Santos the position of Secretary
at the Dietary Department. In that meeting, Ms. Santos replied that she would think about the
offer. To date, we still have no definite reply from her. Again, during the conference held on Dec.
14, 1999, Atty. Martir promised to talk to Ms. Santos, and inform us of her reply by Dec. 21,
1999. Again we failed to hear her reply through him.
Please be informed that said position is in need of immediate staffing. The Dietary Department
has already been experiencing serious backlog of work due to the said vacancy. Please note
that more than 2 months has passed since Ms. Marasigan offered this compromise.
Management cannot afford to wait for her decision while the operation of the said department
suffers from vacancy.
Therefore, Management is giving Ms. Santos until the end of this month to give her decision. If
we fail to hear from her or from you as her representatives by that time, we will consider it as a
waiver and we will be forced to offer the position to other applicants so as not to jeopardize the
Dietary Department's operation.
For your immediate action.
(Signed)
JUDITH BETITA
Personnel Manager
On September 5, 2000, the Labor Arbiter came out with a Decision ordering private respondent
SLMC to pay petitioner Maribel S. Santos the amount of One Hundred Fifteen Thousand Five
Hundred Pesos (P115,500.00) representing her separation pay. All other claims of petitioner
were dismissed for lack of merit.
Dissatisfied, petitioner Maribel S. Santos perfected an appeal with the public respondent NLRC.
On August 23, 2002, public respondent NLRC promulgated its Decision affirming the Decision
of the Labor Arbiter. It likewise denied the Motion for Reconsideration filed by petitioners in its
Resolution promulgated on December 27, 2002.
Petitioner thereafter filed a petition for certiorari with the CA which, as previously mentioned,
affirmed the decision of the NLRC.
Hence, this petition raising the following issues:
I. Whether the CA overlooked certain material facts and circumstances on petitioners'
legal claim in relation to the complaint for illegal dismissal.
II. Whether the CA committed grave abuse of discretion and erred in not resolving with
clarity the issues on the merit of petitioner's constitutional right of security of tenure.3
For its part, private respondent St. Luke's Medical Center, Inc. (SLMC) argues in its
comment4 that: 1) the petition should be dismissed for failure of petitioners to file a motion for
reconsideration; 2) the CA did not commit grave abuse of discretion in upholding the NLRC and
the Labor Arbiter's ruling that petitioner was legally dismissed; 3) petitioner was legally and
validly terminated in accordance with Republic Act Nos. 4226 and 7431; 4) private respondent's
decision to terminate petitioner Santos was made in good faith and was not the result of unfair
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discrimination; and 5) petitioner Santos' non-transfer to another position in the SLMC was a
valid exercise of management prerogative.
The petition lacks merit.
Generally, the Court has always accorded respect and finality to the findings of fact of the CA
particularly if they coincide with those of the Labor Arbiter and the NLRC and are supported by
substantial evidence.5 True this rule admits of certain exceptions as, for example, when the
judgment is based on a misapprehension of facts, or the findings of fact are not supported by
the evidence on record6 or are so glaringly erroneous as to constitute grave abuse of
discretion.7 None of these exceptions, however, has been convincingly shown by petitioners to
apply in the present case. Hence, the Court sees no reason to disturb such findings of fact of
the CA.
Ultimately, the issue raised by the parties boils down to whether petitioner Santos was illegally
dismissed by private respondent SLMC on the basis of her inability to secure a certificate of
registration from the Board of Radiologic Technology.
The requirement for a certificate of registration is set forth under R.A. No. 74318 thus:
Sec. 15. Requirement for the Practice of Radiologic Technology and X-ray Technology. - Unless
exempt from the examinations under Sections 16 and 17 hereof, no person shall practice or
offer to practice as a radiologic and/or x-ray technologist in the Philippines without having
obtained the proper certificate of registration from the Board.
It is significant to note that petitioners expressly concede that the sole cause for petitioner
Santos' separation from work is her failure to pass the board licensure exam for X-ray
technicians, a precondition for obtaining the certificate of registration from the Board. It is
argued, though, that petitioner Santos' failure to comply with the certification requirement did not
constitute just cause for termination as it violated her constitutional right to security of tenure.
This contention is untenable.
While the right of workers to security of tenure is guaranteed by the Constitution, its exercise
may be reasonably regulated pursuant to the police power of the State to safeguard health,
morals, peace, education, order, safety, and the general welfare of the people. Consequently,
persons who desire to engage in the learned professions requiring scientific or technical
knowledge may be required to take an examination as a prerequisite to engaging in their
chosen careers.9 The most concrete example of this would be in the field of medicine, the
practice of which in all its branches has been closely regulated by the State. It has long been
recognized that the regulation of this field is a reasonable method of protecting the health and
safety of the public to protect the public from the potentially deadly effects of incompetence and
ignorance among those who would practice medicine.10 The same rationale applies in the
regulation of the practice of radiologic and x-ray technology. The clear and unmistakable
intention of the legislature in prescribing guidelines for persons seeking to practice in this field is
embodied in Section 2 of the law:
Sec. 2. Statement of Policy. - It is the policy of the State to upgrade the practice of radiologic
technology in the Philippines for the purpose of protecting the public from the hazards posed by
radiation as well as to ensure safe and proper diagnosis, treatment and research through the
application of machines and/or equipment using radiation.11
In this regard, the Court quotes with approval the disquisition of public respondent NLRC in its
decision dated August 23, 2002:
The enactment of R.A. (Nos.) 7431 and 4226 are recognized as an exercise of the State's
inherent police power. It should be noted that the police power embraces the power to prescribe
regulations to promote the health, morals, educations, good order, safety or general welfare of
the people. The state is justified in prescribing the specific requirements for x-ray technicians
and/or any other professions connected with the health and safety of its citizens. Respondent-
appellee being engaged in the hospital and health care business, is a proper subject of the cited
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6



law; thus, having in mind the legal requirements of these laws, the latter cannot close its eyes
and [let] complainant-appellant's private interest override public interest.
Indeed, complainant-appellant cannot insist on her "sterling work performance without any
derogatory record" to make her qualify as an x-ray technician in the absence of a proper
certificate of Registration from the Board of Radiologic Technology which can only be obtained
by passing the required examination. The law is clear that the Certificate of Registration cannot
be substituted by any other requirement to allow a person to practice as a Radiologic
Technologist and/or X-ray Technologist (Technician).12
No malice or ill-will can be imputed upon private respondent as the separation of petitioner
Santos was undertaken by it conformably to an existing statute. It is undeniable that her
continued employment without the required Board certification exposed the hospital to possible
sanctions and even to a revocation of its license to operate. Certainly, private respondent could
not be expected to retain petitioner Santos despite the inimical threat posed by the latter to its
business. This notwithstanding, the records bear out the fact that petitioner Santos was given
ample opportunity to qualify for the position and was sufficiently warned that her failure to do so
would result in her separation from work in the event there were no other vacant positions to
which she could be transferred. Despite these warnings, petitioner Santos was still unable to
comply and pass the required exam. To reiterate, the requirement for Board certification was set
by statute. Justice, fairness and due process demand that an employer should not be penalized
for situations where it had no participation or control.13
It would be unreasonable to compel private respondent to wait until its license is cancelled and it
is materially injured before removing the cause of the impending evil. Neither can the courts
step in to force private respondent to reassign or transfer petitioner Santos under these
circumstances. Petitioner Santos is not in the position to demand that she be given a different
work assignment when what necessitated her transfer in the first place was her own fault or
failing. The prerogative to determine the place or station where an employee is best qualified to
serve the interests of the company on the basis of the his or her qualifications, training and
performance belongs solely to the employer.14 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.15
While our laws endeavor to give life to the constitutional policy on social justice and the
protection of labor, it does not mean that every labor dispute will be decided in favor of the
workers. The law also recognizes that management has rights which are also entitled to respect
and enforcement in the interest of fair play.16 Labor laws, to be sure, do not authorize
interference with the employer's judgment in the conduct of the latter's business. Private
respondent is free to determine, using its own discretion and business judgment, all elements of
employment, "from hiring to firing" except in cases of unlawful discrimination or those which may
be provided by law. None of these exceptions is present in the instant case.
The fact that another employee, who likewise failed to pass the required exam, was allowed by
private respondent to apply for and transfer to another position with the hospital does not
constitute unlawful discrimination. This was a valid exercise of management prerogative,
petitioners not having alleged nor proven that the reassigned employee did not qualify for the
position where she was transferred. In the past, the Court has ruled that an objection founded
on the ground that one has better credentials over the appointee is frowned upon so long as the
latter possesses the minimum qualifications for the position.17 Furthermore, the records show
that Ms. Santos did not even seriously apply for another position in the company.
-
,
, the petition is !!for lack of merit. Costs against petitioners.
SO ORDERED.


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î



FIRST DIVISION
ñ
  #
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   (petitioner,
vs.


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respondents.



d

This is a petition for certiorari to set aside the Decision of the National Labor Relations
Commission (NLRC) dated March 14, 1991, which reversed the Decision dated May 21, 1990 of
Labor Arbiter Manuel R Caday, on the ground of lack of jurisdiction.
Petitioner Benjamin C. Juco was hired as a project engineer of respondent National Housing
Corporation (NHC) from November 16, 1970 to May 14, 1975. On May 14, 1975, he was
separated from the service for having been implicated in a crime of theft and/or malversation of
public funds.
On March 25, 1977, petitioner filed a complaint for illegal dismissal against the NHC with the
Department of Labor.
On September 17, 1977, the Labor Arbiter rendered a decision dismissing the complaint on the
ground that the NLRC had no jurisdiction over the case.
Petitioner then elevated the case to the NLRC which rendered a decision on December 28,
1982, reversing the decision of the Labor Arbiter. 
Dissatisfied with the decision of the NLRC, respondent NHC appealed before this Court and on
January 17, 1985, we rendered a decision, the dispositive portion thereof reads as follows:
WHEREFORE, the petition is hereby GRANTED. The questioned decision of the
respondent National Labor Relations Commission is SET ASIDE. The decision of
the Labor Arbiter dismissing the case before it for lack of jurisdiction is
REINSTATED. 
On January 6, 1989, petitioner filed with the Civil Service Commission a complaint for illegal
dismissal, with preliminary mandatory injunction. 4
On February 6, 1989, respondent NHC moved for the dismissal of the complaint on the ground
that the Civil Service Commission has no jurisdiction over the case. $
On April 11, 1989, the Civil Service Commission issued an order dismissing the complaint for
lack of jurisdiction. It ratiocinated that:
The Board finds the comment and/or motion to dismiss meritorious. It was not
disputed that NHC is a government corporation without an original charter but
organized/created under the Corporation Code.
Article IX, Section 2 (1) of the 1987 Constitution provides:
The civil service embraces all branches, subdivisions,
instrumentalities and agencies of the Government, including
government owned and controlled corporations Îith original
charters. (emphasis supplied)
From the aforequoted constitutional provision, it is clear that respondent NHC is
not within the scope of the civil service and is therefore beyond the jurisdiction of
this Board. Moreover, it is pertinent to state that the 1987 Constitution was
ratified and became effective on February 2, 1987.
WHEREFORE, for lack of jurisdiction, the instant complaint is hereby dismissed.
On April 28, 1989, petitioner filed with respondent NLRC a complaint for illegal dismissal with
preliminary mandatory injunction against respondent NHC. 
On May 21, 1990, respondent NLRC thru Labor Arbiter Manuel R. Caday ruled that petitioner
was illegally dismissed from his employment by respondent as there was evidence in the record
that the criminal case against him was purely fabricated, prompting the trial court to dismiss the
 c
Y



charges against him. Hence, he concluded that the dismissal was illegal as it was devoid of
basis, legal or factual.
He further ruled that the complaint is not barred by prescription considering that the period from
which to reckon the reglementary period of four years should be from the date of the receipt of
the decision of the Civil Service Commission promulgated on April 11, 1989. He also
ratiocinated that:
It appears . . . complainant filed the complaint for illegal dismissal with the Civil
Service Commission on January 6, 1989 and the same was dismissed on April
11, 1989 after which on April 28, 1989, this case was filed by the complainant.
Prior to that, this case was ruled upon by the Supreme Court on January 17,
1985 which enjoined the complainant to go to the Civil Service Commission
which in fact, complainant did. Under the circumstances, there is merit on the
contention that the running of the reglementary period of four (4) years was
suspended with the filing of the complaint with the said Commission. Verily, it
was not the fault of the respondent for failing to file the complaint as alleged by
the respondent but due to, in the words of the complainant, a "legal knot" that
has to be untangled. 
Thereafter, the Labor Arbiter rendered a decision, the dispositive portion of which reads:
Premises considered, judgment is hereby rendered declaring the dismissal of the
complainant as illegal and ordering the respondent to immediately reinstate him
to his former position without loss of seniority rights with full back wages inclusive
of allowance and to his other benefits or equivalent computed from the time it is
withheld from him when he was dismissed on March 27, 1977, until actually
reinstated. 
On June 1, 1990, respondent NHC filed its appeal before the NLRC and on March 14, 1991, the
NLRC promulgated a decision which reversed the decision of Labor Arbiter Manuel R. Caday on
the ground of lack of jurisdiction. #
The primordial issue that confronts us is whether or not public respondent committed grave
abuse of discretion in holding that petitioner is not governed by the Labor Code.
Under the laws then in force, employees of government-owned and/or controlled corporations
were governed by the Civil Service Law and not by the Labor Code. Hence,
Article 277 of the Labor Code (PD 442) then provided:
The terms and conditions of employment of all government employees, including
employees of government-owned and controlled corporations shall be governed
by the Civil Service Law, rules and regulations . . . .
The 1973 Constitution, Article II-B, Section 1(1), on the other hand provided:
The Civil Service embraces every branch, agency, subdivision and
instrumentality of the government, including government-owned or controlled
corporations.
Although we had earlier ruled in Ãational Housing Corporation v.
Juco, that employees of government-owned and/or controlled corporations, whether created
by special law or formed as subsidiaries under the general Corporation Law, are governed by
the Civil Service Law and not by the Labor Code, this ruling has been supplanted by the 1987
Constitution. Thus, the said Constitution now provides:
The civil service embraces all branches, subdivisions, instrumentalities, and
agencies of the Government, including government owned or controlled
corporations with original charter. (Article IX-B, Section 2[1])
In Ãational Service Corporation (ÃASECO) v. Ãational Labor Relations Commission,  we had
the occasion to apply the present Constitution in deciding whether or not the employees of
NASECO are covered by the Civil Service Law or the Labor Code notwithstanding that the case
arose at the time when the 1973 Constitution was still in effect. We ruled that the NLRC has
 c
YY



jurisdiction over the employees of NASECO on the ground that it is the 1987 Constitution that
governs because it is the Constitution in place at the time of the decision. Furthermore, we ruled
that the new phrase "with original charter" means that government-owned and controlled
corporations refer to corporations chartered by special law as distinguished from corporations
organized under the Corporation Code. Thus, NASECO which had been organized under the
general incorporation statute and a subsidiary of the National Investment Development
Corporation, which in turn was a subsidiary of the Philippine National Bank, is exluded from the
purview of the Civil Service Commission.
We see no cogent reason to depart from the ruling in the aforesaid case.
In the case at bench, the National Housing Corporation is a government owned corporation
organized in 1959 in accordance with Executive Order No. 399, otherwise known as the Uniform
Charter of Government Corporation, dated January 1, 1959. Its shares of stock are and have
been one hundred percent (100%) owned by the Government from its incorporation under Act
1459, the former corporation law. The government entities that own its shares of stock are the
Government Service Insurance System, the Social Security System, the Development Bank of
the Philippines, the National Investment and Development Corporation and the People's
Homesite and Housing Corporation.  Considering the fact that the NHA had been incorporated
under Act 1459, the former corporation law, it is but correct to say that it is a government-owned
or controlled corporation whose employees are subject to the provisions of the Labor Code. This
observation is reiterated in the recent case of grade Union of the Philippines and Allied Services
(gUPAS) v. Ãational Housing
Corporation, 4 where we held that the NHA is now within the jurisdiction of the Department of
Labor and Employment, it being a government-owned and/or controlled corporation without an
original charter. Furthermore, we also held that the workers or employees of the NHC (now
NHA) undoubtedly have the right to form unions or employee's organization and that there is no
impediment to the holding of a certification election among them as they are covered by the
Labor Code.
Thus, the NLRC erred in dismissing petitioner's complaint for lack of jurisdiction because the
rule now is that the Civil Service now covers only government-owned or controlled corporations
with original charters. $ Having been incorporated under the Corporation Law, its relations with
its personnel are governed by the Labor Code and come under the jurisdiction of the National
Labor Relations Commission.
One final point. Petitioners have been tossed from one forum to another for a simple illegal
dismissal case. It is but apt that we put an end to his dilemna in the interest of justice.
WHEREFORE, the decision of the NLRC in NLRC NCR-04-02036089 dated March 14, 1991 is
hereby REVERSED and the Decision of the Labor Arbiter dated May 21, 1990 is REINSTATED.
SO ORDERED.













 c
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FIRST DIVISION
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!!petitioner,
vs.


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respondent.
)(d

This is a petition for review on certiorari under Rule 45, assailing the Decision of the Court of
Appeals dated November 23, 1999 in CA-G.R. SP No. 527551 and the Resolution dated August
31, 2000 denying petitioner Dily Dany Nacpil's motion for reconsideration. The Court of Appeals
reversed the decisions promulgated by the Labor Arbiter and the National Labor Relations
Commission (NLRC), which consistently ruled in favor of petitioner.
Petitioner states that he was Assistant General Manager for Finance/Administration and
Comptroller of private respondent Intercontinental Broadcasting Corporation (IBC) from 1996
until April 1997. According to petitioner, when Emiliano Templo was appointed to replace IBC
President Tomas Gomez III sometime in March 1997, the former told the Board of Directors that
as soon as he assumes the IBC presidency, he would terminate the services of petitioner.
Apparently, Templo blamed petitioner, along with a certain Mr. Basilio and Mr. Gomez, for the
prior mismanagement of IBC. Upon his assumption of the IBC presidency, Templo allegedly
harassed, insulted, humiliated and pressured petitioner into resigning until the latter was forced
to retire. However, Templo refused to pay him his retirement benefits, allegedly because he had
not yet secured the clearances from the Presidential Commission on Good Government and the
Commission on Audit. Furthermore, Templo allegedly refused to recognize petitioner's
employment, claiming that petitioner was not the Assistant General Manager/Comptroller of IBC
but merely usurped the powers of the Comptroller. Hence, in 1997, petitioner filed with the
Labor Arbiter a complaint for illegal dismissal and non-payment of benefits.Y ÎphiY.nêt
Instead of filing its position paper, IBC filed a motion to dismiss alleging that the Labor Arbiter
had no jurisdiction over the case. IBC contended that petitioner was a corporate officer who was
duly elected by the Board of Directors of IBC; hence, the case qualifies as an intra-corporate
dispute falling within the jurisdiction of the Securities and Exchange Commission (SEC).
However, the motion was denied by the Labor Arbiter in an Order dated April 22, 1998.2
On August 21, 1998, the Labor Arbiter rendered a Decision stating that petitioner had been
illegally dismissed. The dispositive portion thereof reads:
WHEREFORE, in view of all the foregoing, judgment is hereby rendered in favor of the
complainant and against all the respondents, jointly and severally, ordering the latter:
1. To reinstate complainant to his former position without diminution of salary or
loss of seniority rights, and with full backwages computed from the time of his
illegal dismissal on May 16, 1997 up to the time of his actual reinstatement which
is tentatively computed as of the date of this decision on August 21, 1998 in the
amount of P1,231,750.00 (i.e., P75,000.00 a month x 15.16 months =
P1,137,000.00 plus 13th month pay equivalent to 1/12 of P 1,137,000.00 =
P94,750.00 or the total amount of P 1,231,750.00). Should complainant be not
reinstated within ten (10) days from receipt of this decision, he shall be entitled to
additional backwages until actually reinstated.
2. Likewise, to pay complainant the following:
a) P 2 Million as and for moral damages;
b) P500,000.00 as and for exemplary damages; plus and (sic)
c) Ten (10%) percent thereof as and for attorney's fees.
SO ORDERED.3
IBC appealed to the NLRC, but the same was dismissed in a Resolution dated March 2, 1999,
for its failure to file the required appeal bond in accordance with Article 223 of the Labor
 c
Y 



Code.4 IBC then filed a motion for reconsideration that was likewise denied in a Resolution
dated April 26, 1999.5
IBC then filed with the Court of Appeals a petition for certiorari under Rule 65, which petition
was granted by the appellate court in its Decision dated November 23, 1999. The dispositive
portion of said decision states:
WHEREFORE, premises considered, the petition for Certiorari is GRANTED. The
assailed decisions of the Labor Arbiter and the NLRC are REVERSED and SET ASIDE
and the complaint is DISMISSED without prejudice.
SO ORDERED.6
Petitioner then filed a motion for reconsideration, which was denied by the appellate court in a
Resolution dated August 31, 2000.
Hence, this petition.
Petitioner Nacpil submits that:
I.
THE COURT OF APPEALS ERRED IN FINDING THAT PETITIONER WAS
APPOINTED BY RESPONDENT'S BOARD OF DIRECTORS AS COMPTROLLER.
THIS FINDING IS CONTRARY TO THE COMMON, CONSISTENT POSITION AND
ADMISSION OF BOTH PARTIES. FURTHER, RESPONDENT'S BY-LAWS DOES NOT
INCLUDE COMPTROLLER AS ONE OF ITS CORPORATE OFFICERS.
II.
THE COURT OF APPEALS WENT BEYOND THE ISSUE OF THE CASE WHEN IT
SUBSTITUTED THE NATIONAL LABOR RELATIONS COMMISSION'S DECISION TO
APPLY THE APPEAL BOND REQUIREMENT STRICTLY IN THE INSTANT CASE.
THE ONLY ISSUE FOR ITS DETERMINATION IS WHETHER NLRC COMMITTED
GRAVE ABUSE OF DISCRETION IN DOING THE SAME.7
The issue to be resolved is whether the Labor Arbiter had jurisdiction over the case for illegal
dismissal and non-payment of benefits filed by petitioner. The Court finds that the Labor Arbiter
had no jurisdiction over the same.
Under Presidential Decree No. 902-A (the Revised Securities Act), the law in force when the
complaint for illegal dismissal was instituted by petitioner in 1997, the following cases fall under
the exclusive of the SEC:
a) Devices or schemes employed by or any acts of the board of directors, business
associates, its officers or partners, amounting to fraud and misrepresentation which may
be detrimental to the interest of the public and/or of the stockholders, partners, members
of associations or organizations registered with the Commission;
b) Controversies arising out of intra-corporate or partnership relations, between and
among stockholders, members or associates; between any or all of them and the
corporation, partnership or association of which they are stockholders, members or
associates, respectively; and between such corporation, partnership or association and
the State insofar as it concerns their individual franchise or right to exist as such entity;
c) 3%56%2762 73'666&37%8873963: 7%6&3%23%
23662::7&6%2%
916%2:2
&'&%8%3728%36%2'782%22&7372;
d) Petitions of corporations, partnerships, or associations to be declared in the state of
suspension of payments in cases where the corporation, partnership or association
possesses property to cover all of its debts but foresees the impossibility of meeting
them when they respectively fall due or in cases where the corporation, partnership or
association has no sufficient assets to cover its liabilities, but is under the Management
Committee created pursuant to this decree. (Emphasis supplied.)
The Court has consistently held that there are two elements to be considered in determining
whether the SEC has jurisdiction over the controversy, to wit: (1) the status or relationship of the
parties; and (2) the nature of the question that is the subject of their controversy.8
 c
Yo



Petitioner argues that he is not a corporate officer of the IBC but an employee thereof since he
had not been elected nor appointed as Comptroller and Assistant Manager by the IBC's Board
of Directors. He points out that he had actually been appointed as such on January 11, 1995 by
the IBC's General Manager, Ceferino Basilio. In support of his argument, petitioner underscores
the fact that the IBC's By-Laws does not even include the position of comptroller in its roster of
corporate officers.9 He therefore contends that his dismissal is a controversy falling within the
jurisdiction of the labor courts.10
Petitioner's argument is untenable. Even assuming that he was in fact appointed by the General
Manager, such appointment was subsequently approved by the Board of Directors of the
IBC.11 That the position of Comptroller is not expressly mentioned among the officers of the IBC
in the By-Laws is of no moment, because the IBC's Board of Directors is empowered under
Section 25 of the Corporation Code12 and under the corporation's By-Laws to appoint such other
officers as it may deem necessary. The By-Laws of the IBC categorically provides:
XII. OFFICERS
The officers of the corporation shall consist of a President, a Vice-President, a
Secretary-Treasurer, a General Manager,   2
&' 3'6% ::7&6%2 2 3'6 %  :
!7%6&3%2 9 :%9 3796 3 3796 62 :73 3 8%57 6 :%  7  ::7&6%2 2' <6
66&36 <9=%73 536:3'6% :!7%6&3%2 and shall have such powers and
duties as shall hereinafter provide (Emphasis supplied).13
The Court has held that in most cases the "by-laws may and usually do provide for such other
officers,"14 and that where a corporate office is not specifically indicated in the roster of
corporate offices in the by-laws of a corporation, the board of directors may also be empowered
under the by-laws to create additional officers as may be necessary.15
An "office" has been defined as a creation of the charter of a corporation, while an "officer" as a
person elected by the directors or stockholders. On the other hand, an "employee" occupies no
office and is generally employed not by action of the directors and stockholders but by the
managing officer of the corporation who also determines the compensation to be paid to such
employee.16
As petitioner's appointment as comptroller required the approval and formal action of the IBC's
Board of Directors to become valid,17 it is clear therefore holds that petitioner is a corporate
officer whose dismissal may be the subject of a controversy cognizable by the SEC under
Section 5(c) of P.D. 902-A which includes controversies involving both election
and 8873963 of corporate directors, trustees, officers, and managers.18 Had petitioner been
an ordinary employee, such board action would not have been required.
Thus, the Court of Appeals correctly held that:
Since complainant's appointment was approved unanimously by the Board of Directors
of the corporation, he is therefore considered a corporate officer and his claim of illegal
dismissal is a controversy that falls under the jurisdiction of the SEC as contemplated by
Section 5 of P.D. 902-A. The rule is that dismissal or non-appointment of a corporate
officer is clearly an intra-corporate matter and jurisdiction over the case properly belongs
to the SEC, not to the NLRC.19
As to petitioner's argument that the nature of his functions is recommendatory thereby making
him a mere managerial officer, the Court has previously held that the relationship of a person to
a corporation, whether as officer or agent or employee is not determined by the nature of the
services performed, but instead by the incidents of the relationship as they actually exist.20
It is likewise of no consequence that petitioner's complaint for illegal dismissal includes money
claims, for such claims are actually part of the perquisites of his position in, and therefore linked
with his relations with, the corporation. The inclusion of such money claims does not convert the
issue into a simple labor problem. Clearly, the issues raised by petitioner against the IBC are
matters that come within the area of corporate affairs and management, and constitute a
corporate controversy in contemplation of the Corporation Code.21
 c
Y




Petitioner further argues that the IBC failed to perfect its appeal from the Labor Arbiter's
Decision for its non-payment of the appeal bond as required under Article 223 of the Labor
Code, since compliance with the requirement of posting of a cash or surety bond in an amount
equivalent to the monetary award in the judgment appealed from has been held to be both
mandatory and jurisdictional.22 Hence, the Decision of the Labor Arbiter had long become final
and executory and thus, the Court of Appeals acted with grave abuse of discretion amounting to
lack or excess of jurisdiction in giving due course to the IBC's petition for certiorari, and in
deciding the case on the merits.
The IBC's failure to post an appeal bond within the period mandated under Article 223 of the
Labor Code has been rendered immaterial by the fact that the Labor Arbiter did not have
jurisdiction over the case since as stated earlier, the same is in the nature of an intra-corporate
controversy. The Court has consistently held that where there is a finding that any decision was
rendered without jurisdiction, the action shall be dismissed. Such defense can be interposed at
any time, during appeal or even after final judgment.23 It is a well-settled rule that jurisdiction is
conferred only by the Constitution or by law. It cannot be fixed by the will of the parties; it cannot
be acquired through, enlarged or diminished by, any act or omission of the parties.24
Considering the foregoing, the Court holds that no error was committed by the Court of Appeals
in dismissing the case filed before the Labor Arbiter, without prejudice to the filing of an
appropriate action in the proper court. Y ÎphiY.nêt
It must be noted that under Section 5.2 of the Securities Regulation Code (Republic Act No.
8799) which was signed into law by then President Joseph Ejercito Estrada on July 19, 2000,
the SEC's jurisdiction over all cases enumerated in Section 5 of P.D. 902-A has been
transferred to the Regional Trial Courts.25
-
,
, the petition is hereby !!and the Decision of the Court of Appeals in
CA-G.R. SP No. 52755 is ,,
!.

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 c
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SECOND DIVISION

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d

The issue presented in the case at bar is whether or not the Secretary of Labor and
Employment has jurisdiction to cancel or revoke the license of a private fee-charging
employment agency.
From July 24 to September 9, 1987, petitioner Trans Action Overseas Corporation, a private
fee-charging employment agency, scoured Iloilo City for possible recruits for alleged job
vacancies in Hongkong. Private respondents sought employment as domestic helpers through
petitioner's employees, Luzviminda Aragon, Ben Hur Domincil and his wife Cecille. The
applicants paid placement fees ranging from P1,000.00 to P14,000.00, but petitioner failed to
deploy them. Their demands for refund proved unavailing; thus, they were constrained to
institute complaints against petitioner for violation of Articles 32 and 34(a) of the Labor Code,
as amended.
Petitioner denied having received the amounts allegedly collected from respondents, and
averred that Aragon, whose only duty was to pre-screen and interview applicants, and the
spouses Domincil were not authorized to collect fees from the applicants. Accordingly, it cannot
be held liable for the money claimed by respondents. Petitioner maintains that it even warned
respondents not to give any money to unauthorized individuals.
POEA Regional Extension Unit Coordinator Edgar Somes testified that although he was aware
that petitioner collected fees from respondents, the latter insisted that they be allowed to make
the payments on the assumption that it could hasten their deployment abroad. He added that
Mrs. Honorata Manliclic, a representative of petitioner tasked to oversee the conduct of the
interviews, told him that she was leaving behind presigned receipts to Aragon as she cannot
stay in Iloilo City for the screening of the applicants. Manliclic, however, denied this version and
argued that it was Somes who instructed her to leave the receipts behind as it was perfectly
alright to collect fees.
On April 5, 1991, then Labor Undersecretary Nieves R. Confesor rendered the assailed order,
the dispositive portion of which reads:
WHEREFORE, respondents are hereby ordered to pay, jointly and severally, the
following claims:
1. Rosele Castigador P14,000.00
2. Josefina Mamon 3,000.00
3. Jenelyn Casa 3,000.00
4. Peachy Laniog 13,500.00
5. Verdelina Belgira 2,000.00
6. Elma Flores 2,500.00
7. Ramona Liturco 2,500.00
 c
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8. Grace Sabando 3,500.00

9. Gloria Palma 1,500.00
10. Avelyn Alvarez 1,500.00
11. Candelaria Nono 1,000.00
12. Nita Bustamante 5,000.00
13. Cynthia Arandillo 1,000.00
14. Sandie Aguilar 3,000.00
15. Digna Panaguiton 2,500.00
16. Veronica Bayogos 2,000.00
17. Sony Jamuat 4,500.00
18. Irma Sobrequil 2,000.00
19. Elsie Penarubia 2,000.00
20. Antonia Navarro 2,000.00
21. Selfa Palma 3,000.00
22. Lenirose Abangan 13,300.00
23. Paulina Cordero 1,400.00
24. Nora Maquiling 2,000.00
25. Rosalie Sondia 2,000.00
26. Ruby Sepulvida 3,500.00
27. Marjorie Macate 1,500.00
28. Estelita Biocos 3,000.00
29. Zita Galindo 3,500.00
30. Nimfa Bucol 1,000.00
31. Nancy Bolivar 2,000.00
32. Leonora Caballero 13,900.00
33. Julianita Aranador 14,000.00
The complaints of Ma. Luz Alingasa, Nimfa Perez, and Cleta Mayo are hereby
dismissed in view of their desistance.
The following complaints are hereby dismissed for failure to appear/prosecute:
1. Jiyasmin Bantillo 6. Edna Salvante
2. Rosa de Luna Senail 7. Thelma Beltiar
3. Elnor Bandojo 8. Cynthia Cepe
4. Teresa Caldeo 9. Rosie Pavillon
5. Virginia Castroverde
The complaints filed by the following are hereby dismissed for lack of evidence:
1. Aleth Palomaria 5. Mary Ann Beboso
2. Emely Padrones 6. Josefina Tejero
3. Marybeth Aparri 7. Bernadita Aprong
4. Lenia Biona 8. Joji Lull
Respondent agency is liable for twenty eight (28) counts of violation of Article 32
and five (5) counts of Article 34 (a) with a corresponding suspension in the
aggregate period of sixty six (66) months. Considering however, that under the
schedule of penalties, any suspension amounting to a period of 12 months merits
the imposition of the penalty of cancellation, the license of respondent gRAÃS
ACg
OÃ OVERSEAS CORPORAg
OÃ to participate in the overseas placement
and recruitment of Îorkers is hereby ordered CAÃCELLED, effective
immediately.
SO ORDERED. (Emphasis supplied)
On April 29, 1991, petitioner filed its Motion for Temporary Lifting of Order of Cancellation
alleging, among other things, that to deny it the authority to engage in placement and
recruitment activities would jeopardize not only its contractual relations with its foreign
 c
Y6



principals, but also the welfare, interests, and livelihood of recruited workers scheduled to leave
for their respective assignments. Finally, it manifested its willingness to post a bond to insure
payment of the claims to be awarded, should its appeal or motion be denied.
Finding the motion to be well taken, Undersecretary Confesor provisionally lifted the
cancellation of petitioner's license pending resolution of its Motion for Reconsideration filed on
May 6, 1991. On January 30, 1992, however, petitioner's motion for reconsideration was
eventually denied for lack of merit, and the April 5, 1991, order revoking its license was
reinstated.
Petitioner contends that Secretary; Confesor acted with grave abuse of discretion in rendering
the assailed orders on alternative grounds, viz.: (1) it is the Philippine Overseas Employment
Administration (POEA) which has the exclusive and original jurisdiction to hear and decide
illegal recruitment cases, including the authority to cancel recruitment licenses, or (2) the
cancellation order based on the 1987 POEA Schedule of Penalties is not valid for non-
compliance with the Revised Administrative Code of 1987 regarding its registration with the U.P.
Law Center.
Under Executive Order No. 797 (E.O. No. 797) and Executive Order No. 247 (E.O. No.
247),4 the POEA was established and mandated to assume the functions of the Overseas
Employment Development Board (OEDB), the National Seamen Board (NSB), and the overseas
employment function of the Bureau of Employment Services (BES). Petitioner theorizes that
when POEA absorbed the powers of these agencies, Article 35 of the Labor Code, as amended,
was rendered ineffective.
The power to suspend or cancel any license or authority to recruit employees for overseas
employment is vested upon the Secretary of Labor and Employment. Article 35 of the Labor
Code, as amended, which provides:
Art. 5. Suspension and/or Cancellation of License or Authority ² The Minister of
Labor shall have the power to suspend or cancel any license or authority to
recruit employees for overseas employment for violation of rules and regulations
issued by the Ministry of Labor, the Overseas Employment Development Board,
and the National Seamen Board, or for violation of the provisions of this and
other applicable laws, General Orders and Letters of Instructions.
In the case of Eastern Assurance and Surety Corp. v. Secretary of
Labor,$ we held that:
The penalties of suspension and cancellation of license or authority are
prescribed for violations of the above quoted provisions, among others. And the
Secretary of Labor has the poÎer under Section 35 of the laÎ to apply these
sanctions, as well as the authority, conferred by Section 36, not only to "restrict
and regulate the recruitment and placement activities of all agencies," but also to
"promulgate rules and regulations to carry out the objectives and implement the
provisions" governing said activities. Pursuant to this rule-making power thus
granted, the Secretary of Labor gave the POEA, "on its own initiative or upon
filing of a complaint or report or upon request for investigation by any aggrieved
person, . . (authority to) conduct the necessary proceedings for the suspension or
cancellation of the license or authority of any agency or entity" for certain
enumerated offenses including ²
1) the imposition or acceptance, directly or indirectly, of any amount of money,
goods or services, or any fee or bond in excess of what is prescribed by the
Administration, and
2) any other violation of pertinent provisions of the Labor Code and other relevant
laws, rules and regulations.
 c
Yî



The Administrator was also given the power to "order the dismissal of the case of
the suspension of the license or authority of the respondent agency or contractor
or recommend to the Minister the cancellation thereof." (Emphasis supplied)
This power conferred upon the Secretary of Labor and Employment was echoed in People
v. Diaz, viz.:
A non-licensee or non-holder of authority means any person, corporation or entity
which has not been issued a valid license or authority to engage in recruitment
and placement by the Secretary of Labor, or Îhose license or authority has been
suspended, revoked or cancelled by the POEA or the Secretary. (Emphasis
supplied)
In view of the Court's disposition on the matter, we rule that the power to suspend or cancel any
license or authority to recruit employees for overseas employment is concurrently vested with
the POEA and the Secretary of Labor.
As regards petitioner's alternative argument that the non-filing of the 1987 POEA Schedule of
Penalties with the UP Law Center rendered it ineffective and, hence, cannot be utilized as basis
for penalizing them, we agree with Secretary Confesor's explanation, to wit:
On the other hand, the POEA Revised Rules on the Schedule of Penalties was
issued pursuant to Article 34 of the Labor Code, as amended. The same merely
amplified and particularized the various violations of the rules and regulations of
the POEA and clarified and specified the penalties therefore (sic). Indeed, the
questioned schedule of penalties contains only a listing of offenses. It does not
prescribe additional rules and regulations governing overseas employment but
only detailed the administrative sanctions imposable by this Office for some
enumerated prohibited acts.
Under the circumstances, the license of the respondent agency was cancelled on
the authority of Article 35 of the Labor Code, as amended, and not pursuant to
the 1987 POEA Revised Rules on Schedule of Penalties. #
WHEREFORE, in view of the foregoing, the instant petition is hereby DISMISSED. Accordingly,
the decision of the Secretary of Labor dated April 5, 1991, is AFFIRMED. No costs.
SO ORDERED.

,3362
1 "Art. 32. Fees to be paid by workers. ² Any person
applying with a private fee-charging employment agency
for employment assistance shall not be charged any fee
until he has obtained employment through its efforts or
has actually commenced employment. Such fee shall be
always covered with the appropriate receipt clearly
showing the amount paid. The Secretary of Labor shall
promulgate a schedule of allowable fees."
"Art. 34. Prohibited practices. ² It shall be unlawful for
any individual, entity, licensee, or holder of authority:
(a) To charge or accept, directly or indirectly, any amount
greater than that specified in the schedule of allowable
fees prescribed by the Secretary of Labor, or to make a
worker pay any amount greater than that actually
received by him as a loan or advance; . . ."




 c
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SECOND DIVISION

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petitioners,
vs.


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 respondents
Genjamin S. David for petitioners.
De Luna, Sumnoad and Gaerlan for private respondent.


d

Presented before Us for review is the decision of public respondent National Labor Relations
Commission handed down on March 16, 1988 reversing the decision of the Philippine Oversees
Employment Administration and correspondingly dismissing the cases for lack of merit. The
POEA decision granted overtime pay to petitioners equivalent to 30% of their basic pay.
We do not dispute the facts as found by the Solicitor General. Thus:
On April 17 and 18,1985, petitioners, all seamen, entered into separate contracts
of employment with the Golden Light Ocean Transport, Ltd., through its local
agency, private respondent ACE MARITIME AGENCIES, INC. Petitioners, with
their respective ratings and monthly salary rates, are as follows:
Petitioners Rating Salary per month
Julio Cagampan 2nd Engineer US$500.00
Silvino Vicera 2nd Engineer US$800.00
Juanito de Jesus Ordinary Seaman US$120.00
Jorge C. de Castro Ordinary Seaman US$160.00
Arnold Miranda 3rd Officer US$310.00
Maximo Rosello Cook US$230.00
Aniceto Betana 3rd Engineer US$400.00
Petitioners were deployed on May 7, 1985, and discharged on July 12, 1986.
Thereafter, petitioners collectively and/or individually filed complaints for non-
payment of overtime pay, vacation pay and terminal pay against private
respondent. In addition, they claimed that they were made to sign their contracts
in blank. Likewise, petitioners averred that although they agreed to render
services on board the vessel Rio Colorado managed by Golden Light Ocean
Transport, Ltd., the vessel they actually boarded was MV "SOIC I" managed by
Columbus Navigation. Two (2) petitioners, Jorge de Castro and Juanito de
Jesus, charged that although they were employed as ordinary seamen (OS), they
actually performed the work and duties of Able Seamen (AB).
Private respondent was furnished with copies of petitioners' complaints and
summons, but it failed to file its answer within the reglementary period. Thus, on
January 12, 1987, an Order was issued declaring that private respondent has
waived its right to present evidence in its behalf and that the cases are submitted
for decision (Page 68, Records).
On August 5, 1987, the Philippine Overseas Employment Administration (POEA)
rendered a Decision dismissing petitioners' claim for terminal pay but granted
their prayer for leave pay and overtime pay. The dispositive portion of the
Decision reads:
IN VIEW OF THE FOREGOING, judgment is hereby rendered
ordering respondent (private respondent) Ace Maritime Agencies,
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ÀY



Inc. to pay the following complainants (petitioners) in the amounts

opposite their names:
1. Julio Cagampan²US$583.33 plus US$2,125.00 representing
the 30% guaranteed overtime pay;
2. Silvino Vicera²US$933.33 plus US$3,400.00 representing the
30% guaranteed overtime pay;
3. Jorge de Castro²US$233.33 plus US$850.00 representing the
30% guaranteed overtime pay;
4. Juanito de Jesus²US$233.33 plus US$850.00 representing
the 30% guaranteed overtime pay;
5. Lauro Diongzon²US$233.33 plus US$850.00 representing the
30% guaranteed overtime pay;
6. Arnold Miranda²US$455.00 plus US$1,659.50 representing
the 30% guaranteed overtime pay;
7. Maximo Rosello²US$303.33 plus US$1,105.00 representing
the 30% guaranteed overtime pay; and
8. Aniceto Betana²US$583.33 plus US$2,125.00 representing
the 30% guaranteed overtime pay.
The payments represent their leave pay equivalent to their
respective salary (sic) of 35 days and should be paid in Philippine
currency at the current rate of exchange at the time of actual
payment. (pp. 81-82, Records)
Private respondent appealed from the POEA's Decision to the NLRC on August
24, 1987. On March 16, 1988, the NLRC promulgated a Decision, the dispositive
portion of which reads:
WHEREFORE, premises considered, the appealed decision is
hereby REVERSED and SET ASIDE and another one entered
dismissing these cases for lack of merit. (p. 144, Records)
On May 8, 1988, petitioners filed an Urgent Motion for Reconsideration of the
NLRC's Decision (p. 210, Records), but the same was denied by the NLRC for
lack of merit in its Resolution dated September 12, 1988 (p. 212, Records).
Hence, this appeal from the decision and resolution of the respondent NLRC.
Petitioners allege that respondent Commission gravely abused its discretion or erred in deciding
in favor of private respondent company by reason of the following:
1. Respondent NLRC overlooked the fact that private respondent company had repeatedly
failed and refused to file its answer to petitioners' complaints with their supporting documents.
2. Respondent Commission erred in reversing and setting aside the POEA decision and
correspondingly dismissing the appeal of petitioners, allegedly in contravention of law and
jurisprudence.
Private respondent maritime company disclaims the aforesaid allegations of petitioners through
these arguments:
1. As borne out by the records, its former counsel attended all the hearings before the POEA
wherein he raised the basis objection that the complaint of petitioners was so generally couched
that a more detailed pleading with supporting documents was repeatedly requested for the latter
to submit.
2. The NLRC never abused its discretion in arriving at assailed decision considering that the
same was based on the Memorandum on Appeal dated August 14, 1987 filed by private
respondent.
3. In the hearings conducted by respondent Commission, all the arguments of both parties were
properly ventilated and considered by said Commission in rendering its decision.
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4. The Labor Code basically provides that the rules of evidence prevailing in courts of law or
equity shall not be controlling and it is the spirit and intention of the Code that the Commission
and its members and Labor Arbiters should use every and an reasonable means to ascertain
the facts in each case speedily and objectively and without regard to technicalities of law and
procedure, all in the interest of due process.
5. Petitioners' motion for reconsideration of the NLRC decision did not invoke the merits of the
case but merely raised purely technical and procedural matters. Even assuming that private
respondent, technically speaking, waived the presentation of evidence, its appeal to the NLRC
was valid since it involved merely a correct interpretation and clarification of certain provisions of
the contract the validity of which has never been questioned.
The Solicitor General, arguing for public respondent NLRC, contends:
1. Petitioners' assumption that a party who is declared to have waived his right to present
evidence also loses his right to appeal from an adverse judgment made against him is a falsity
for, although the technical rules of evidence prevailing in the courts of law or equity do not bind
labor tribunals, even the Rules of Court allows a party declared in default to appeal from said
judgment by attaching the propriety of the relief awarded therein.
2. The NLRC did not abuse its discretion in the rendition of subject decision because the
evidence presented by petitioners in support of their complaint is by itself sufficient to back up
the decision. The issue of the disallowance of overtime pay stems from an interpretation of
particular provisions of the employment contract.
We cannot sustain petitioners' position.
The failure of respondent to submit its responsive pleading was not fatal as to invalidate its case
before the Phil. Overseas Employment Authority. Evidently, such formal or technical defect was
rectified by the fact that the POEA proceeded with the hearings on the case where both parties
were given sufficient leeway to ventilate their cases.
Petitioners' manifest pursuit of their claims before the POEA in the absence of the answer
produced the effect of condoning the failure of private respondent to submit the said answer.
Their submission to the POEA's authority without questioning its jurisdiction to continue the
hearings further strengthens the fact that the alleged technical defect had already been cured.
After all, what is there to complain of when the POEA handed down a decision favorable to
petitioners with the allowance of the latter's leave pay and overtime pay.
Notably, it was only when private respondent appealed the NLRC decision to this Court that
petitioners suddenly unearth the issue of private respondent's default in the POEA case. Had
the decision favoring them not been reversed by the NLRC, petitioners could have just clammed
up. They resorted to bringing up a technical, not a substantial, defect in their desperate attempt
to sway the Court's decision in their favor.
Private respondent has pointedly argued that the NLRC anchored its decision primarily upon the
Memorandum on Appeal. In the case of Manila Doctors Hospital v. NLRC (153 SCRA 262) this
Court ruled that the National Labor Relations Commission and the Labor Arbiter have authority
under the Labor Code to decide a case based on the position papers and documents submitted
without resorting to the technical rules of evidence.
On the issue of whether or not petitioners should be entitled to terminal pay, Xe sustain the
finding of respondent NLRC that petitioners were actually paid more than the amounts fixed in
their employment contracts. The pertinent portion of the NLRC decision reads as follows.
On this award for leave pay to the complainants (petitioners), the (private)
respondent maintains that the actually they Îere paid much more than Îhat they
Îere legally entitled to under their contract.ghis fact has not been disputed by the
complainants (petitioners.) Thus, as mentioned in (private) respondent's
Memorandum on Appeal dated 14 August 1987, their overpayment is more than
enough and sufficient to offset Îhatever claims for leave pay they filed in this
case and for which the POEA favorably considered in their favor. For
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À 



complainant (petitioner) Aniceto Getana, it appears that under the crew contract
his monthly salary was US$400 while he was overpaid by US$100 as he actually
received US$500. In fine, Betana had received at least US1,400 excess salary
for a period of fourteen (14) months which was the period of his employment. In
the case of complainant (petitioner) Jorge C.de Castro his stipulated monthly pay
was US$160 but he actually received a monthly pay of US$200 or an
overpayment of US$560 for the same period of service. For complainant
(petitioner) Juanito R.de Jesus, his overpayment is US$1120. Complainant
(petitioner) Arnold J. Miranda has also the same amount of excess payment as
de Jesus. Indeed, We cannot simply ignore this material fact. It is our duty to
prevent a miscarriage of justice for if We sustain the award for leave pay in the
face of undisputed facts that the complainants (petitioners) were even paid much
more than what they should receive by way of leave pay, then they would be
enriching themselves at the expense of others. Accordingly, justice and equity
compel Us to deny this award.
Even as the denial of petitioners' terminal pay by the NLRC has been justified, such denial
should not have been applied to petitioners Julio Cagampan and Silvino Vicera. For, a deeper
scrutiny of the records by the Solicitor General has revealed that the fact of overpayment does
not cover the aforenamed petitioners since the amounts awarded them were equal only to the
amounts stipulated in the crew contracts. Since petitioners Cagampan and Vicera were not
overpaid by the company, they should be paid the amounts of US$583.33 and US$933.33,
respectively. Further examination by the Solicitor General shows that petitioner Maximo Rosello
was also overpaid in the amount of US$420.00.
Hence, with respect to petitioners Cagampan and Vicera, the NLRC decision must be modified
correspondingly.
As regards the question of overtime pay, the NLRC cannot be faulted for disallowing the
payment of said pay because it merely straightened out the distorted interpretation asserted by
petitioners and defined the correct interpretation of the provision on overtime pay embodied in
the contract conformably with settled doctrines on the matter. Notably, the NLRC ruling on the
disallowance of overtime pay is ably supported by the fact that petitioners never produced any
proof of actual performance of overtime work.
Petitioners have conveniently adopted the view that the "guaranteed or fixed overtime pay of
30% of the basic salary per month" embodied in their employment contract should be awarded
to them as part of a "package benefit." They have theorized that even without sufficient
evidence of actual rendition of overtime work, they would automatically be entitled to overtime
pay. Their theory is erroneous for being illogical and unrealistic. Their thinking even runs
counter to the intention behind the provision. The contract provision means that the fixed
overtime pay of 30% would be the basis for computing the overtime pay if and when overtime
work would be rendered. Simply, stated, the rendition of overtime work and the submission of
sufficient proof that said work was actually performed are conditions to be satisfied before a
seaman could be entitled to overtime pay which should be computed on the basis of 30% of the
basic monthly salary. In short, the contract provision guarantees the right to overtime pay but
the entitlement to such benefit must first be established. Realistically speaking, a seaman, by
the very nature of his job, stays on board a ship or vessel beyond the regular eight-hour work
schedule. For the employer to give him overtime pay for the extra hours when he might be
sleeping or attending to his personal chores or even just lulling away his time would be
extremely unfair and unreasonable.
We already resolved the question of overtime pay of a worker aboard a vessel in the case
of Ãational Shipyards and Steel Corporation v. C
R (3 SCRA 890). We ruled:
We can not agree with the Court below that respondent Malondras should be
paid overtime compensation for every hour in excess of the regular working
 c
Ào



hours that he was on board his vessel or barge each day, irrespective of whether
or not he actually put in work during those hours. Seamen are required to stay on
board their vessels by the very nature of their duties, and it is for this reason that,
in addition to their regular compensation, they are given free living quarters and
subsistence allowances when required to be on board. It could not have been the
purpose of our law to require their employers to pay them overtime even when
they are not actually working; otherwise, every sailor on board a vessel would be
entitled to overtime for sixteen hours each day, even if he spent all those hours
resting or sleeping in his bunk, after his regular tour of duty. ghe correct criterion
in determining Îhether or not sailors are entitled to overtime pay is not, therefore,
Îhether they Îere on board and can not leave ship beyond the regular eight
Îorking hours a day, but Îhether they actually rendered service in excess of said
number of hours. (Emphasis supplied)
The aforequoted ruling is a reiteration of Our resolution in Luzon Stevedoring Co.,
nc. vs. Luzon
Marine Department Union, et al. (G.R. No. 9265, April 29, 1957).
WHEREFORE, the decision of the NLRC is hereby AFFIRMED with the modification that
petitioners Cagampan and Vicera are awarded their leave pay according to the terms of the
contract.
SO ORDERED.






























 c
À




EN BANC
ñ
 + $#
1
23  
  

  !!(
  petitioners,
vs.

 respondent.
Manuel O. Chan for petitioners.
Madrid LaÎ Office for respondent.
!0d "
Appeal by certiorari taken by A. L. Ammen Transportation Co., Inc. and Consolidated Auto
Lines, Inc. from an order of the Court of Industrial Relations in Case No. 6-V Bicol dated May 9,
1960 and its Resolution of August 27, 1960 denying their motion for reconsideration. The
dispositive part of the appealed order is as follows:
IN VIEW OF THE FOREGOING, respondents are hereby ordered to pay petitioner for
the services rendered by the latter in excess of eight hours a day from January 1, 1952
up to and including March 10, 1957. In connection herewith, the Chief Examiner and
Economist of this Court or his duly authorized representative is hereby directed to
proceed to the premises of the respondents and make the necessary computations to
determine the exact amount due to the petitioner. The computation of the number of
hours worked in excess of eight hours a day should be based on the inspector's
notebook of the petitioner and/or the abstract thereof in the possession of the
respondents. The count should start from the first inspection up to the last, as stated in
said inspector's notebooks. But in no case shall count be stopped until 6:00 P.M.
because if the last inspection was terminated before said time, petitioner was given
investigation work.
The bonus of P30.00 a month is to be included as part of the basic salary of the
petitioner, it having been regularly given by respondents since 1951 for some
meritorious work rendered by petitioner and should, therefore, be deemed as part of his
regular salary. However, an allowance of 30 minutes a day for lunch break should be
deducted from the total number of working hours rendered by petitioner. Further, the
work not in excess of eight hours a day, rendered by petitioner for respondents during
Sundays and holidays should not be considered as compensable overtime work
because the respondents are public service corporations.
Respondent Jose Borja was employed by petitioners as Supervising Inspector, with a basic
salary of P180.00 a month, P3.00 daily per diems, and a monthly bonus of P30.00, from
January 1, 1952 to March 10, 1957 when he was dismissed from the service.
On April 15, 1958 respondent filed an action against petitioners in the Court of First Instance of
Albay (Civil Case No. 1905) to recover compensation for overtime work rendered by him during
the above-mentioned period, a damages. In their answer, petitioners denied respondent claim
for overtime pay, and alleged, by way of affirmative defense, that respondent had filed the same
claim with Department of Labor, Regional Office No. IV at Naga City on May 29, 1957 but the
same was dismissed with prejudice upon the latter's petition, on April 30, 1958.
Pending trial of the abovementioned case, respondent commenced the present proceedings in
the Court of Industrial Relations substantially reproducing the claim involve in Civil Case No.
1905. Petitioners, after likewise producing their answer in said case, asserted, by way additional
affirmative defense, the pendency of Civil Case No. 1905 between the same parties and for the
same cause. .
After due trial, the Court of Industrial Relations issued its order of May 9, 1960 and its resolution
of August 27, 1960 subject of the present appeal.
To reverse the order and resolution appealed from, petitioner contends that the Court of
Industrial Relations erred firstly, in not holding that respondent's cause of action has prescribed;
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ÀM



secondly, in taking cognizance of this case although it had no jurisdiction over the same; and
lastly, in disregarding petitioner's memorandum to the respondent prohibiting him to work in
excess of eight (8) hours daily.
On the question of prescription, petitioner claims the respondent's action was commenced only
in December 1958; that in accordance with Republic Act 1994, amending Commonwealth Act
No. 444, any action to enforce a cause action under said Act shall be commenced within three
(3) years after its accrual; that respondent's cause of action having accrued more than three
years before December 1958, his action was filed too late.YÎphïY.ñët
We find petitioner's contention to be untenable. The Court of Industrial Relations made a finding
of fact the effect that respondent had commenced his action against petitioner before June 22,
1957 ² the effective date of Republic Act No. 1994, amending Commonwealth Act No. 444.
This finding is not now reviewable.
But even on the merits, petitioner's contention is without merit. Respondent itself admitted in its
answer dated May 6, 1959, filed in the above-mentioned case No. 6-V Bicol, that petitioner had
originally filed his complaint with the Department of Labor, Regional Office No. 4 on May 29,
1957. It is clear therefore that his action had already been commenced before the effective date
of Republic Act 1994, and is covered by the exception provided for therein.
But petitioner contends in this regard that the phrase "actions already commenced" employed in
the statute should be construed as meaning only actions filed in a regular court of justice. With
this limited and narrow interpretation, we can not agree. The statute under consideration is
undoubtedly a labor statute and, as such, must be liberally construed in favor of the laborer
concerned. (Art. 1702, New Civil Code). Consequently, the term "actions" should include every
judicial and administrative proceeding intended to enforce a right or secure redress for a wrong
already committed. Since respondent admittedly first filed his claim against petitioner with the
Department of Labor on May 29, 1957, in accordance with laws then in force, it seems clear
that, as already stated, it is covered by the exception provided for in Republic Act No. 1994,
whose date of effectivity was June 22, 1957.
On the question of jurisdiction, petitioner claims that, as respondent sought to collect overtime
wages, and nothing more, this case was not within the jurisdiction of the Court of Industrial
Relations.
This is also without merit. The complaint filed by respondent with the Court of Industrial
Relations alleged, inter alia, that he "was' separated automatically from the said employment
with defendants, and notwithstanding pleas for reinstatement defendants refused and still refuse
to reinstate plaintiff", and, aside from some specific reliefs, respondent herein also asked that
"other reliefs be granted him".
A reasonable interpretation of respondent's pleading fully justifies the opinion of the Court of
Industrial Relations to the effect that respondent, aside from overtime wages, also sought
reinstatement. The case, therefore, was within the jurisdiction of said Court.
In connection with its last contention, petitioner claims that the Court of Industrial Relations
erred in disregarding the memorandum of the company prohibiting respondent from working in
excess of eight hours daily. Such memorandum could not fairly apply to respondent because
according to the Court of Industrial Relations, there sufficient evidence showing that inspite of it,
respondent had received verbal instructions from superior authority to inspect the first trip, noon
trip, and last trip; that this connection he had submitted to petitioner a daily report of inspection
which stated the period or number hours he had worked for the day, and that since January 1,
1952 up to and including March 10, 1957, respondent had been rendering overtime service with
full knowledge petitioner. All these show conclusively that the Court Industrial Relations was
right in awarding to respondent the corresponding overtime compensation.
WHEREFORE, the order and resolution appealed from are affirmed, with costs.
 c
À



THIRD DIVISION
ñ
 $ 569<6% 
!>),petitioner,
vs.
 

,

!,
( respondents.
ghe Chief Legal Counsel for petitioner.
Dante P. Sindac for private respondents.


d

Petitioner Development Bank of the Philippines seeks the nullification of an order dated July 29,
1987 and issued by the Undersecretary of Labor and Employment, affirming that of National
Capital Region Officer-in-Charge Romeo A. Young, directing the petitioner to deliver the
properties of Riverside Mills Corporation (RMC) which it had in its possession to the Ministry
(now Department) of Labor and Employment (MOLE) for proper disposition in Case No. NCR-
LSED-7-334-84 pursuant to Article 110 of the Labor Code.
Labor Case No. NCR-LSED-7-334-84 involves a complaint for illegal dismissal, unfair labor
practice, illegal deductions from salaries and violation of the minimum wage law filed by private
respondents herein against RMC. On July 3, 1985, a decision was rendered by Director Severo
M. Pucan of the National Capital Region, MOLE, ordering RMC to pay private respondents
backwages and separation benefits. A corresponding writ of execution was issued on October
22, 1985 directing the sheriff to collect the amount of ONE MILLION TWO HUNDRED FIFTY-
SIX THOUSAND SIX HUNDRED SEVENTY-EIGHT PESOS AND SEVENTY SIX CENTAVOS
(P1,256,678.76) from RMC and, in case of failure to collect, to execute the writ by selling the
goods and chattel of RMC not exempt from execution or, in case of insufficiency thereof, the
real or immovable properties of RMC.
However, on May 23, 1986, the writ of execution was returned unserved and unsatisfied, with
the information that the company premises of RMC had been padlocked and foreclosed by
petitioner. It appears that petitioner had instituted extra-judicial foreclosure proceedings as early
as 1983 on the properties and other assets of RMC as a result of the latter's failure to meet its
obligations on the loans it secured from petitioner.
Consequently, private respondents filed with the MOLE a "Motion for Delivery of Properties of
the [RMC] in the Possession of the [DBP] to the [MOLE] for Proper Disposition," stating that
pursuant to Article 110 of the Labor Code, they enjoy first preference over the mortgaged
properties of RMC for the satisfaction of the judgment rendered in their favor notwithstanding
the foreclosure of the same by petitioner as mortgage creditor [Rollo, pp. 16-17]. Petitioner filed
its opposition.
In an order signed by Officer-in-Charge Romeo A. Young and dated December 11, 1986,
private respondents' motion was granted based on the finding that Article 110 of the Labor Code
and the ruling laid down in Philippine Commercial and
ndustrial Gank v. Ãatural Mines and
Allied Xorkers' (ÃAMAXU-M
) [G.R. No. 50402, August 19, 1982, 115 SCRA 873] support the
conclusion that private respondents still enjoyed a preferential lien for the payment of their
backwages and separation benefits over the properties of RMC which were foreclosed by
petitioner [Rollo, pp. 21-22].
Petitioner then filed its motion for reconsideration on December 24,1986 contending that Article
110 of the Labor Code finds no application in the case at bar for the following reasons: (1) The
properties sought to be delivered have ceased to belong to RMC in view of the fact that
petitioner had foreclosed on the mortgage, and the properties have been sold and delivered to
third parties; (2) The requisite condition for the application of Article 110 of the Labor Code is
not present since no bankruptcy or insolvency proceedings over RMC properties and assets
have been undertaken [Rollo, pp. 24-28]. In an order dated July 29, 1987, petitioner's motion for
reconsideration was denied for lack of merit by Undersecretary Dionisio C. dela Serna.
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À6



Hence, petitioner filed this special civil action for certiorari with prayer for the issuance of a writ
of preliminary injunction. On August 27, 1987, this Court issued a temporary restraining order
enjoining public respondent from enforcing or carrying out its order dated July 29, 1987. After
considering the allegations made and issues raised in the petition, comments thereto and reply,
the Court, on March 14, 1988, resolved to give due course to the petition and to require the
parties to submit their respective memoranda. Petitioner and private respondent submitted their
memoranda, while public respondent adopted as its memorandum the comment it had
previously submitted.
After a careful study of the various arguments adduced, as well as the legal provisions and
jurisprudence on the matter, the Court finds the petition impressed with merit. Indeed, the
assailed Order suffers from infirmities which must be rectified by the grant of a writ
of certiorari in favor of petitioner.
Firstly, public respondent acted with grave abuse of discretion amounting to lack or excess of
jurisdiction in enforcing private respondents' right of first preference under Article 110 of the
Labor Code notwithstanding the absence of bankruptcy, liquidation or insolvency proceedings
against RMC.
Article 110 of the Labor Code and Section 10, Rule VIII, Book III of the Omnibus Rules
Implementing the Labor Code provide the following:
Article 110. WORKER PREFERENCE IN CASE OF BANKRUPTCY.²
n the
event of bankruptcy or liquidation of an employer's business, his workers shall
enjoy first preference as regards wages due them for services rendered during
the period prior to the bankruptcy or liquidation, any provision of law to the
contrary notwithstanding. Unpaid wages shall be paid in full before other
creditors may establish any claim to a share in the assets of the employer
[Emphasis supplied].
Section 10. PAYMENT OF WAGES IN CASE OF BANKRUPTCY.² Unpaid
wages earned by the employees before the declaration of bankruptcy or judicial
liquidation of the employer's business shall be given first preference and shall be
paid in full before other creditors may establish any claim to a share in the assets
of the employer.
It is clear from the wording of the law that the preferential right accorded to employees and
workers under Article 110 may be invoked only during bankruptcy or judicial liquidation
proceedings against the employer. The law is unequivocal and admits of no other construction.
Respondents contend that the terms "bankruptcy" or "liquidation" are broad enough to cover a
situation where there is a cessation of the operation of the employer's business as in the case at
bar. However, this very same contention was struck down as unmeritorious in the case
of Development Gank of the Philippines vs. Hon. Labor Arbiter Ariel C. Santos [G.R. Nos.
78261-62, March 8, 1989] involving a group of RMC employees which sought to enforce its
preference of credit Article 110 against DBP over certain RMC real properties. In that case, the
Court laid down the ruling that Article 110 of the Labor Code, which cannot be viewed in
isolation of, and must always be reckoned with the provisions of the Civil Code on concurrence
and preference of credits, may not be invoked by employees or workers of RMC like private
respondents herein, in the absence of a formal declaration of bankruptcy or a judicial liquidation
order of RMC.
The rationale for making the application of Article 110 of the Labor Code contingent upon the
institution of bankruptcy or judicial liquidation proceedings against the employer is premised
upon the very nature of a preferential right of credit. A preference of credit bestows upon the
preferred creditor an advantage of having his credit satisfied first ahead of other claims which
may be established against the debtor. Logically, it becomes material only when the properties
and assets of the debtor are insufficient to pay his debts in full; for if the debtor is amply able to
pay his various creditors in full, how can the necessity exist to determine which of his creditors
 c
Àî



shall be paid first or whether they shall be paid out of the proceeds of the sale of the debtor's
specific property? Indubitably, the preferential right of credit attains significance only after the
properties of the debtor have been inventoried and liquidated, and the claims held by his various
creditors have been established [Kuenzle & Streiff (Ltd.) v. Villanueva, 41 Phil. 611 (1916);
Barrette v. Villanueva, G.R. No. L-14938, December 29, 1962, 6 SCRA 928; Philippine Savings
Bank v. Lantin, G.R. No. L-33929, September 2, 1983, 124 SCRA 476].
In this jurisdiction, bankruptcy, insolvency and general judicial liquidation proceedings provide
the only proper venue for the enforcement of a creditor's preferential right such as that
established in Article 110 of the Labor Code, for these are in rem proceedings binding against
the whole world where all persons having any interest in the assets of the debtor are given the
opportunity to establish their respective credits [Philippine Savings Bank v. Lantin, supra;
Development Bank of the Philippines v. Santos supra].
Secondly, public respondent's Order directing petitioner to deliver to the MOLE the properties it
had foreclosed from RMC for the purpose of executing the judgment rendered against RMC in
Case No. NCR-LSED 7-334-84 violates the basic rule that the power of a court or tribunal in the
execution of its judgment extends only over properties unquestionably belonging to the
judgment debtor [Special Services Corporation v. Centro La Paz, G.R. No. L- 44100, April 28,
1983, 121 SCRA 748; National Mines and Allied Workers' Union v. Vera, G.R. No. L-44230,
November 19, 1984, 133 SCRA 295].
It appears on record, and remains undisputed by respondents, that petitioner had extra-judicially
foreclosed the subject properties from RMC as early as 1983 and purchased the same at public
auction, and that RMC had failed to exercise its right to redeem. Thus, when Officer-in-Charge
Young issued on December 11, 1986 the order which directed the delivery of these properties to
the MOLE, RMC had ceased to be the absolute owner thereof [See Dizon v. Gaborra, G.R. No.
L-36821, June 22, 1978, 83 SCRA 688]. Consequently, the order was directed against
properties which no longer belonged to the judgment debtor RMC.
However, respondents, in citing the case of PC
G v. ÃAMAXU-M
 [supra], argue that by virtue
of Article 110 of the Labor Code, an "automatic first lien" was created in favor of private
respondents on RMC properties²a "lien" which predated the foreclosure of the subject
properties by petitioner, and remained vested on these properties even after its sale to petitioner
and other parties.
There is no merit to this contention. It proceeds from a misconception which must be corrected.
What Article 110 of the Labor Code establishes is not a lien, but a preference of credit in favor
of employees [See Republic v. Peralta, G.R. No. 56568, May 20, 1987, 150 SCRA 37]. This
simply means that during bankruptcy, insolvency or liquidation proceedings involving the
existing properties of the employer, the employees have the advantage of having their unpaid
wages satisfied ahead of certain claims which may be proved therein.
It bears repeating that a preference of credit points out solely the order in which creditors would
be paid from the properties of a debtor inventoried and appraised during bankruptcy, insolvency
or liquidation proceedings. Moreover, a preference does not exist in any effective way prior to,
and apart from, the institution of these proceedings, for it is only then that the legal provisions on
concurrence and preference of credits begin to apply. Unlike a lien, a preference of credit does
not create in favor of the preferred creditor a charge or proprietary interest upon any particular
property of the debtor. Neither does it vest as a matter of course upon the mere accrual of a
money claim against the debtor. Certainly, the debtor could very well sell, mortgage or pledge
his property, and convey good title thereon, to third parties free from such preference [Kuenzle
& Streiff v. Villanueva,supra].
Incidentally, the Court is not unmindful of the 1989 amendments to the article introduced by
Section 1, R.A. No. 6715 [March 21, 1989]. Article 110 of the Labor Code as amended reads:
WORKER PREFERENCE IN CASE OF BANKRUPTCY.² In the event of
bankruptcy or liquidation of an employer's business, his workers shall enjoy first
 c
 



preference as regards their unpaid Îages and other monetary claims, any
provision of law to the contrary notwithstanding. Such unpaid wages and
monetary claims shall be paid in full before the claims of the Government and
other creditors may be paid. [Amendments indicated.]
However, these amendments only relate to the scheme of concurrence and preference of
credits; they do not affect the issues heretofore discussed regarding the applicability of Article
110 to the attendant facts.
WHEREFORE, considering the foregoing, the present petition is hereby GRANTED. The
assailed order dated July 29, 1987 is SET ASIDE and the temporary restraining order issued by
the Court on August 27, 1987 is made PERMANENT.
SO ORDERED.




































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THIRD DIVISION

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Presidential Decree 902-A, as amended, provides that "upon the appointment of a management
committee, rehabilitation receiver, board or body pursuant to this Decree, all actions for claims
against corporations, partnerships, or associations under management or receivership pending
before any court, tribunal, board or body shall be suspended accordingly. Such suspension is
intended to give enough breathing space for the management committee or rehabilitation
receiver to make the business viable again, without having to divert attention and resources to
litigations in various fora. Among the actions suspended are those for money claims before
labor tribunals, like the National Labor Relations Commission (NLRC) and the labor arbiters.
Statement of the Case
The foregoing summarizes this Court's grant of the Petition for Certiorari under Rule 65 of the
Rules of Court, assailing the April 26, 1996 Resolution  promulgated by the NLRC  which
upheld the labor arbiter's refusal to suspend proceedings involving monetary claims of the
petitioner's employees.
Petitioner likewise assails the June 20, 1996 NLRC Resolution 4 which denied its Motion for
Reconsideration.
On November 20, 1996, this Court issued a temporary restraining order, signed by then Chief
Justice Andres R. Narvasa, "restraining the public respondents from further conducting
proceedings in the aforesaid cases effective immediately . . .
ghe acts
The facts are undisputed. They are narrated by the Office of the Solicitor general as follows:
Petitioner . . . is a domestic corporation which used to be in the business of
manufacturing footwear, bags and garments. It filed with the Securities and
Exchange Commission on November 24, 1994 a petition for suspension of
payments praying that it be declared in a state of suspension of payments and
that the SEC accordingly issue an order restraining its creditors from enforcing
their claims against petitioner corporation. It further prayed for the creation of a
management committee as well as for the approval of the proposed rehabilitation
plan and memorandum of agreement between petitioner corporation and its
creditors.
In an order dated December 28, 1994, the SEC favorably ruled on the petition for
suspension of payments thusly:
Accordingly, with the creation of the Management Committee, all
actions for claims against Rubberworld Philippines, Inc. pending
 c
 À



before any court, tribunal, office, board, body Commission of

Sheriff are hereby deemed SUSPENDED.
Consequently, all pending incidents for preliminary injunctions,
writ of attachments (sic), foreclosures and the like are hereby
rendered moot and academic.
Private respondents, who claim to be employees of petitioner corporation, filed
against petitioners [from] April to July 1995 their respective complaints for illegal
dismissal, unfair labor practice, damages and payment of separation pay,
retirement benefits, 13th month pay and service incentive pay.
Petitioners moved to suspend the proceedings in the above labor cases on the
strength of the SEC Order dated December 28, 1994. Likewise, petitioners cited
the rulings of G Homes vs. Court of Appeals (190 SCRA 262), Alemar's Sibal &
Sons.
nc., vs. Elbinias (186 SCRA 94) and Gank of Philippine
slands vs. Court
of Appeals (229 SCRA 223) to support their motion to suspend the proceedings
in the labor cases.
In an Order dated September 25, 1995, the Labor Arbiter denied the aforesaid
motion holding that the injunction contained in the SEC Order applied only to the
enforcement of established rights and did not include the suspension of
proceedings involving claims against petitioner which have yet to be ascertained.
The Labor Arbiter further held that the order of the SEC suspending all actions
for claims against petitioners does not cover the claims of private respondents in
the labor cases because said claims and the concomitant liability of petitioners
still had to be determined, thus carrying no dissipation of the assets of
petitioners.Y ÎphiY.nêt
Petitioners appealed the adverse order of the Labor Arbiter to public respondent
which, in a Resolution dated April 26, 1996, dismissed the appeal for lack of
merit and, instead, sustained the rulings of the Labor Arbiter.
The motion for reconsideration of petitioners fared no better and was denied by
public respondent in a Resolution dated June 20, 1996. $
Hence, this petition. 
ghe
ssue
Petitioner raises only one issue:
Whether or not the Respondent NLRC acted without or in excess of jurisdiction
or with grave abuse of discretion amounting to lack of jurisdiction in affirming the
order of Labor Arbiter Voltaire A. Balitaan denying petitioners' motion to suspend
proceedings despite the Order of the Securities and Exchange Commission
under Sec. 6 (c) of P.D. 902-A directing the suspension of all actions against a
company under the first stages of insolvency proceedings. 
ghis Court's Ruling
The petition is meritorious.
Sole
ssue:
Suspension of Proceedings
Jurisprudence teaches us:
. . . where the petition filed is one for declaration of a state of suspension of
payments due to a recognition of the inability to pay one's debts and liabilities,
and where the petitioning corporation either: (a) has sufficient property to cover
all its debts but foresees the impossibility of meeting them when they fall due
(solvent but illiquid) or (b) has no sufficient property (insolvent) but is under the
management of a rehabilitation receiver or a management committee, the
applicable law is P.D. 902-A pursuant to Sec. 5 par. (d) thereof. However, if the
petitioning corporation has no sufficient assists to cover its liabilities and is not
 c
 



under a rehabilitation receiver or a management committee created under P.D.

902-A and does not seek merely to have the payments of its debts suspended,
but seeks a declaration of insolvency . . . the applicable law is Act 1956 [The
Insolvency Law] on voluntary Insolvency, . . . 
In the case at bar, Petitioner Rubberworld filed before the SEC a Petition for Declaration of
Suspension of Payments, as well as a proposed rehabilitation plan. On December 28, 1994, the
SEC ordered the creation of a management committee and the suspension of all actions for
claims against Rubberworld. Clearly, the applicable law is PD 902-A, as amended, the relevant
provisions of which read:
Sec. 5. In addition to the regulatory adjudicative functions of the Commission
over corporations, partnerships and other forms of associations registered with it
as expressly granted under existing laws and decrees, it shall have original and
exclusive jurisdiction to hear and decide cases involving:
xxx xxx xxx
d) Petitions of corporations, partnerships or associations to be declared in the
state of payments in cases where the corporation, partnership or association
possesses sufficient property to cover all its debts regulatory but foresees the
impossibility of meeting them when they respectively fall due or in cases where
the corporation, partnership or association has no sufficient assets to cover its
liabilities, but is under the management of a rehabilitation receiver or
management committee created pursuant to this Decree.
Sec. 6. In order to effectively exercise such jurisdiction, the Commission shall
possess the following powers:
xxx xxx xxx
c) To appoint one or more receivers of the property, real or personal, which is the
subject of the action pending before the Commission in accordance with the
pertinent provisions of the Rules of Court in such other cases whenever
necessary in order to preserve the rights of the parties-litigants and/or protect the
interest of the investing public and creditors: . . . Provided, finally, That upon
appointment of a management committee, the rehabilitation receiver, board or
body, pursuant to this Decree, all actions for claims against corporations,
partnerships, or associations under management or receivership pending before
any court, tribunal, board or body shall be suspended accordingly.
It is plain from the foregoing provisions of law that "upon the appointment [by the SEC] of a
management committee or a rehabilitation receiver," all actions for claims against the
corporation pending before any court, tribunal or board shall ipso jure be suspended.  The
justification for the automatic stay of all pending actions for claims "is to enable the management
committee or the rehabilitation receiver to effectively exercise its/his powers free from any
judicial or extra-judicial interference that might unduly hinder or prevent the "rescue" of the
debtor company. To allow such other actions to continue would only add to the burden of the
management committee or rehabilitation receiver, whose time, effort and resources would be
wasted in defending claims against the corporation instead of being directed toward its
restructuring and rehabilitation. #
Parenthetically, the rehabilitation of a financially distressed corporation benefits its employees,
creditors, stockholders and, in a larger sense, the general public, And in considering whether to
rehabilitate or not, the SEC gives preference to the interest of creditors, including employees.
The reason its that shareholders can recover their investments only upon liquidation of the
corporation, and only if there are assets remaining after all corporate creditors are paid.
Labor Claims
ncluded
in Suspension Order
 c
 o



The solicitor general, representing Public Respondent NLRC, argues that the rationale for an
automatic stay will not be frustrated even if the NLRC proceeds with the disposition of these
labor cases, because any favorable obtained by the private respondents would only establish
their rights as creditors. The solicitor general also contends that the assailed Resolutions of the
NLRC will not result in an undue preference for the assets of Rubberworld, as the private
respondents will still present their claims before the management committee. 
We disagree. The law is clear: upon the creation of a management committee or the
appointment of a rehabilitation receiver, all claims for actions "shall be suspended accordingly."
No exception in favor of labor claims is mentioned in the law. Since the law makes no distinction
or exemptions, neither should this Court. Ubi lex non distinguit nec nos distinguere
debemos. Allowing labor cases to proceed clearly defeats the purpose of the automatic stays
and severally encumbers the management committee's and resources. The said committee
would need to defend against these suits, to the detriment of its primary and urgent duty to work
towards rehabilitating the corporation and making it viable again. The rule otherwise would open
the floodgates to other similarly situated claimants and forestall if not defeat the rescue efforts.
Besides, even if the NLRC awards the claims of private respondents, as it did, its ruling could
not be enforced as long as the petitioner is under the management committee. 4
In Chua v. Ãational Labor Relations Commission, $ we ruled that labor claims cannot proceed
independently of a bankruptcy liquidation proceeding, since these claims "would spawn
needless controversy, delays, and
confusion."  With more reason, allowing labor claims to continue in spite of a SEC suspension
order in a rehabilitation case would merely lead to such results.
The solicitor general insists that since Article 217 of the Labor Code  vested [public
respondent with jurisdiction to hear and decide these labor cases, the NLRC did not exceed its
jurisdiction when it refused to suspend the proceeding therein.  The Court is not persuaded.
Article 217 of the Labor Code should be construed not in isolation but in harmony with PD 902-
A, according to the basic rule in statutory construction that implied repeals are not
favored.  Indeed, it is axiomatic that each and every statute must be construed in a way that
would avoid conflict with existing laws. # true, the NLRC has the power to hear and decide labor
disputes, but such authority is deemed suspended when PD 902-A is put into effect by the
Securities and Exchange Commission.
Preference in avor of Xorkers in
Case of Gankruptcy or Liquidation
The private respondents contend that automatic stay under PD 902-A is not applicable to the
instant case; otherwise, the preference granted to workers by Article 110 of the Labor Code
would be rendered ineffective.  This contention is misleading.
The preferential right of workers and employees under Article 110 of the Labor code may be
invoked only upon the institution of insolvency or judicial liquidation proceeding.  Indeed, it is
well-settled that "a declaration of bankruptcy or a judicial liquidation must be present before
preferences over various money claims may be enforced."  But debtors resort to preference of
credit ² giving preferred creditors the rights to have their claims paid ahead of those of other
claimants ² only when their assets are insufficient to pay their debts fully. 4 The purpose of
rehabilitation proceedings is precisely to enable the company to gain a new lease on life and
thereby allow creditors to be paid their claims from its earnings. In insolvency proceedings, on
the other hand, the company stops operating, and the claims of creditors are satisfied from the
assets of the insolvent corporation. The present case involves the rehabilitation, not the
liquidation, of petitioner-corporation. Hence, the preference of credit granted to workers or
employees under Article 110 of the Labor Code is not applicable.
Duration of Automatic
Stay Under PD 902-A
 c





Finally, private respondents posit that under Section 6 of the Insolvency Law, the December 28,
1994 Order of the SEC suspending all actions for claims against Rubberworld should have
expired after three months, in the absence of an agreement between the company and the
corporate creditors. $ Private respondents also accuse the SEC of abusing its power by
"allowing said suspension order to remain pending for many years without resolving and
approving any rehabilitation plan." They contend that "[t]his is fatal to the instant petition for it
had been a party to the abuse by the SEC of its suspension order." 
This Court notes that PD 902-A itself does not provide for the duration of the automatic stay.
Neither does the Order of the SEC. Hence, the suspensive effect has no time limit and
remains in force as long as reasonably necessary to accomplish the purpose of the Order. On
the other hand, the attack against the SEC's alleged "abuse of power" is misplaced. Under
review in this Petition for Certiorari are Resolutions of the NLRC, nor of the SEC. The scope of
this review is thus limited to whether the NLRC gravely abused or exceeded its jurisdiction in
refusing to heed the SEC Order of Suspension and in issuing its challenged Resolutions. In any
event, the bare allegation of inaction is insufficient to condemn the Securities and Exchange
Commission and the management committee where, it should be noted, all affected parties,
including the labor union in the company, are represented.
WHEREFORE, the petition is hereby GRANTED. The assailed Resolutions of the NLRC dated
April 26, 1996, and June 20, 1996, are REVERSED and SET ASIDE. No costs.Y ÎphiY.nêt
SO ORDERED.

,3362
17 Art. 217 Jurisdiction of Labor Arbiters and the Commission. (a) Except as otherwise
provided under this Code the Labor Arbiters shall have original and exclusive jurisdiction
to hear and decide within thirty (30) calendar days after the submission of the case by the
parties for decision without extension, even in the absence of stenographic notes, the
following cases involving all workers, whether agricultural or non-agricultural:
1 Unfair labor practice cases
2 Termination disputes
3 If accompanied with a claim for reinstatement those cases that workers may file
involving wages rates of pay hours of work and other terms and conditions of
employment
4 Claims for actual moral exemplary and other forms of damages arising from the
employer-employee relations
5 Cases arising from any violation of Article 264 of this Code, including questions
involving the legality of strikes and lockouts.
6 Except claims for Employees Compensation, Social Security, Medicare and maternity
benefits all other claims arising from employer-employee relations, including those of
persons in domestic or household service, involving an amount exceeding five thousand
pesos (P5,000.00) regardless of whether accompanied with a claim for reinstatement.
(b) The Commission shall have exclusive appellate jurisdiction over all cases decided by
Labor Arbiters
(c) Cases arising from the interpretation of collective bargaining agreements and those
arising from the interpretation or enforcement of company personnel policies shall be
disposed of by the Labor Arbiter by referring the same to the grievance machinery and
voluntary arbitration as may be provided in said agreements.

21 Memorandum for Private Respondent, pp. 6-7; rollo, pp. 268-269.

Art. 110. Workers preference in case of bankruptcy. ² In the event of bankruptcy or
liquidation of an employer's business, his workers shall enjoy first preference as regards
their wages and other monetary claims, any provisions of law to the contrary
notwithstanding. Such unpaid wages and monetary claims shall be paid in full before
claims of the government and other creditors may be paid.