reyMaternity Childrens Hospital vs. Secretary of Labor G.R. No.

78909 June 30 1984 Labor Law Defined Facts: Petitioner is a semi-government hospital, managed by the Board of Directors of the Cagayan de Oro Women's Club and Puericulture Center, headed by Mrs. Antera Dorado, as holdover President. The hospital derives its finances from the club itself as well as from paying patients, averaging 130 per month. It is also partly subsidized by the Philippine Charity Sweepstakes Office and the Cagayan De Oro City government. Petitioner has forty-one (41) employees. Aside from salary and living allowances, the employees are given food, but the amount spent therefor is deducted from their respective salaries (pp. 77-78, Rollo). On May 23, 1986, ten (10) employees of the petitioner employed in different capacities/positions filed a complaint with the Office of the Regional Director of Labor and Employment, Region X, for underpayment of their salaries and ECOLAS, which was docketed as ROX Case No. CW-71-86. The Regional Director issued and order based on the reports of the Labor Standard and Welfare Officers, directing payment of P723, 888.58 representing underpayment of wages and ECOLAs to all the petitioners employees. Petitioner appealed to the Minister of Labor and Employment which modified the decision as to the period for the payment ECOLAs only. A motion for reconsideration was filed by petitioner and was denied by the Secretary of Labor. Held: Labor standards refer to the minimum requirements prescribed by existing laws, rules, and regulations relating to wages, hours of work, cost of living allowance and other monetary and welfare benefits, zo including occupational, safety, and health standards (Section 7, Rule I, Rules on the Disposition of Labor Standards Cases in the Regional Office, dated September 16, 1987). === People vs Vera Reyes G..R. No. L-45748 April 5, 1939 Facts:

The defendant was charged in the Court of First Instance of Manila by the assistant city fiscal with a violation of Act No. 2549, as amended by Acts Nos. 3085 and 3958. The information alleged that from September 9 to October 28, 1936, the accused, in his capacity as president and general manager of the Consolidated Mines, having engaged the services of Severa Velasco de Vera as stenographer, at an agreed salary of P35 a month willfully and illegally refused to pay the salary of said stenographer corresponding to the above-mentioned period of time, which was long due and payable, in spite of her repeated demands. After the hearing, the court sustained the demurrer, declaring unconstitutional the last part of section 1 of Act No. 2549 as last amended by Act No. 3958, which considers as an offense the facts alleged in the information, for the reason that it violates the constitutional prohibition against imprisonment for debt, and dismissed the case, with costs de oficio. The fiscal appealed from said order. In the appeal, the Solicitor-General contends that the court erred in declaring Act No. 3958 unconstitutional, and in dismissing the cause. The last part of section 1 of Act No. 2549, as last amended by section 1 of Act No. 3958 considers as illegal the refusal of an employer to pay, when he can do so, the salaries of his employees or laborers on the fifteenth or last day of every month or on Saturday of every week, with only two days extension, and the nonpayment of the salary within the periods specified is considered as a violation of the law. The same Act exempts from criminal responsibility the employer who, having failed to pay the salary, should prove satisfactorily that it was impossible to make such payment. Issue: (a) W/N the last part of section 1 of Act No. 2549 as last amended by Act No. 3958 is constitutional and valid? Held: The court held that this provision is null because it violates the provision of section 1 (12), Article III, of the Constitution, which provides that no person shall be imprisoned for debt. We do not believe that this constitutional provision has been correctly applied in this case. A close perusal of the last part of section 1 of Act No. 2549, as amended by section 1 of Act No. 3958, will show that its language refers only to the employer who, being able to make payment, shall abstain or refuse to do so, without justification and to the prejudice of the laborer or employee. An employer so circumstanced is not unlike a person who defrauds another, by refusing to pay his just debt. In both cases the deceit or fraud is the essential element constituting the offense. The first case is a violation of Act No. 3958, and the second is estafa punished by the Revised Penal Code. In either case the offender cannot certainly invoke the constitutional prohibition against imprisonment for debt.

Police power is the power inherent in a government to enact laws, within constitutional limits, to promote the order, safety, health, morals, and general welfare of society. (12 C. J., p. 904.) In the exercise of this power the Legislature has ample authority to approve the disputed portion of Act No. 3958 which punishes the employer who, being able to do so, refuses to pay the salaries of his laborers or employers in the specified periods of time. The Court of Appeal held that the last part of section 1 of Act No. 2549, as last amended by section 1 of Act No. 3958, is valid, and reversed the appealed order with instructions to the lower court to proceed with the trial of the criminal case until it is terminated, without special pronouncement as to costs in this instance. So ordered. === THE PEOPLE OF THE PHILIPPINE ISLANDS, plaintiff-appellee, vs. JULIO POMAR, defendant-appellant. G.R. No. L-22008 November 3, 1924 Facts: The accused being the manager and person in charge of La Flor de la Isabela, a tobacco factory pertaining to La Campania General de Tabacos de Filipinas, a corporation duly authorized to transact business and the petitioner Macaria Fajardo, whom he granted vacation leave which began on the 16th d,y of July, 1923, by reason of her pregnancy, did then and there willfully, unlawfully, and feloniously fail and refuse to pay to said woman the sum of eighty pesos (P80), Philippine currency, to which she was entitled as her regular wages corresponding to thirty days before and thirty days after her delivery and confinement which took place on the 12th day of August, 1923, despite and over the demands made by her, the said Macaria Fajardo, upon said accused, to do so. To said complaint, the defendant contended that the provisions of said Act No. 3071, upon which the complaint was based were illegal, unconstitutional and void. The lower court, found the defendant guilty of the alleged offense described in the complaint, and sentenced him to pay a fine of P50, in accordance with the provisions of section 15 of said Act, to suffer subsidiary imprisonment in case of insolvency, and to pay the costs. From that sentence the defendant appealed, and now makes the following assignments of error: That the court erred in overruling the demurrer; in convicting him of the crime charged in the information; and in not declaring section 13 of Act No. 3071, unconstitutional. Issue: Whether or not the provisions of sections 13 and 15 of Act No. 3071 are a reasonable and lawful exercise of the police power of the state

Held: Said section 13 was enacted by the Legislature of the Philippine Islands in the exercise of its supposed police power, with the praiseworthy purpose of safeguarding the health of pregnant women laborers in "factory, shop or place of labor of any description," and of insuring to them, to a certain extent, reasonable support for one month before and one month after their delivery. The statute now under consideration is attacked upon the ground that it authorizes an unconstitutional interference with the freedom of contract including within the guarantees of the due process clause of the 5th Amendment. That the right to contract about one's affairs is a part of the liberty of the individual protected by this clause is settled by the decision of this court, and is no longer open to question. The law takes account of the necessities of only one party to the contract. It ignores the necessities of the employer by compelling him to pay not less than a certain sum, not only whether the employee is capable of earning it, but irrespective of the ability of his business to sustain the burden, generously leaving him, of course, the privilege of abandoning his business as an alternative for going on at a loss. Liberty includes not only the right to labor, but to refuse to labor, and, consequently, the right to contract to labor or for labor, and to terminate such contracts, and to refuse to make such contracts.. Hence, we are of the opinion that this Act contravenes those provisions of the state and Federal constitutions, which guarantee that no person shall be deprived of life, liberty or property without due process of law. Clearly, therefore, the law has deprived, every person, firm, or corporation owning or managing a factory, shop or place of labor of any description within the Philippine Islands, of his right to enter into contracts of employment upon such terms as he and the employee may agree upon. The law creates a term in every such contract, without the consent of the parties. Such persons are, therefore, deprived of their liberty to contract. The constitution of the Philippine Islands guarantees to every citizen his liberty and one of his liberties is the liberty to contract. It has been decided in a long line of decisions of the Supreme Court of the United States, that the right to contract about one's affairs is a part of the liberty of the individual, protected by the "due process of law" clause of the constitution. The rule in this jurisdiction is, that the contracting parties may establish any agreements, terms, and conditions they may deem advisable, provided they are not contrary to law, morals or public policy. (Art. 1255, Civil Code.) For all of the foregoing reasons, we are fully persuaded, under the facts and the law, that the provisions of section 13, of Act No. 3071 of the Philippine Legislature, are unconstitutional and void, in that they violate and are contrary to the provisions of the first paragraph of section 3 of the Act of Congress of the United States of August 29, 1916. (Vol. 12, Public Laws, p. 238.) === Philippine Association of Service Exporters v Drilon GR No. 81958

June 30, 1988 Facts: PASEI is engaged in the recruitment of Filipino workers, male and female, for overseas employment. It challenged the validity of Department Order No. 1 of the Department of Labor and Employment in the character of Guidelines Governing the Temporary Suspension of Deployment of Filipino Domestic and Household Workers. Measure is assailed for being discriminatory against female domestic workers/helpers and that it is violative of the right to travel. Further, the company contended that the measure is an invalid exercise of the lawmaking power, being that police power is legislative and not executive in character. Issue: Whether or not the Department Order is a valid regulation. Held: The Labor Code has vested the Department of Labor and Employment with the rule-making powers in order to effectively promote the welfare and interests of Filipino workers. Protection to labor does not only signify the promotion of employment alone, more important is that such be decent, just and humane. The preference for female workers being covered by the said regulation has been motivated by a growing incidence of Filipina abuses overseas. Official acts enjoy a presumed validity. === CLARA CEREZO, plaintiff-appellant, vs. THE ATLANTIC GULF & PACIFIC COMPANY, defendant-appellant. G.R. No. L-10107 February 4, 1916 Facts: This is an action for damages against the defendant for negligently causing the death of the plaintiff's son, Jorge Ocumen, on the 7th of July, 1913, deceased being plaintiff's only means of support. Judgment was entered in a favor of the plaintiff for the sum of P1,250, together with interest and costs. Defendant appealed.

The deceased was an employee of the defendant as a day laborer on the 8th of July, 1913, assisting in laying gas pipes on Calle Herran in the city of Manila . The digging of the trench was completed both ways from the cross-trench in Calle Paz, and the pipes were laid therein up to that point. The men of the deceased's gang were filling the west end, and there was no work in the progress at the east end of the trench. Shortly after the deceased entered the trench at the east end to answer a call of nature, the bank caved in, burying him to his neck in dirt, where he died before he could be released. It has not been shown that the deceased had received orders from the defendant to enter the trench at this point; nor that the trench had been prepared by the defendant as a place to be used as a water-closet; nor that the defendant acquiesced in the using of this place for these purposes. The trench at the place where the accident occurred was between 3 and 4 feet deep. Nothing remained to be done there except to refill the trench as soon as the pipes were connected. The refilling was delayed at that place until the completion of the connection. At the time of the accident the place where the deceased's duty of refilling the trench required him to be was at the west end. There is no contention that there was any danger whatever in the refilling of the trench. Issue: Whether or not the plaintiffs right to recover is based on the Employers Liability Act (Act No. 1874) Held: Act No. 1874 is essentially a copy of the Massachusetts Employers' Liability Act (Rev. Laws. 1902, chap. 106 secs. 71-79), it having been originally enacted in that jurisdiction in 1887. (Stat. 1887, chap. 270.) The Massachusetts statute was "copied verbatim, with some variations of detail, from the English statute (43 & 44 Vict., c. 42). This court is not finally concluded by the decision of any other State court or the British court, in their construction of a similar statute, but the opinion of learned courts upon similar questions are entitled to great weight and this is especially true when the statute, from which ours was copied, had been construed prior to its enactment by our legislature." ( Birmingham Ry. and Electric Co. vs. Allen, 99 Ala. 359, 371; 120 L. R. A., 457.) The right of the master to shift responsibility for the performance of all or at least most of these personal duties to the shoulders of a subordinate and thereby escape liability for the injuries suffered by his workmen through his non-performance of these duties, was, in England, definitely settled by the House of Lords in the case of Wilson vs. Merry (L.R. 1 H.L. Sc. Appl Cas., 326; 19 Eng. Rul. Cas., 132). This was just two years before the enactment of the Employers' Liability Act of 1880, and no doubt the full significance of such a doctrine was one of the impelling causes which expedited the passage of the Act, and chiefly accounts for the presence in it of subsection 1 of section 1. The cause of Ocumen's death was not the weight of the earth which fell upon him, but was due to suffocation. He was sitting or squatting when the slide gave way. Had he been even

half-erect, it is highly probable that he would have escaped suffocation or even serious injury. Hence, the accident was of a most unusual character. Experience and common sense demonstrate that ordinarily no danger to employees is to be anticipated from such a trench as that in question. The fact that the walls had maintained themselves for a week, without indication of their giving way, strongly indicates that the necessity for bracing or shoring the trench was remote. To require the company to guard against such an accident as the one in question would virtually compel it to shore up every foot of the miles of trenches dug by it in the city of Manila for the gas mains. Upon a full consideration of the evidence, we are clearly of the opinion that ordinary care did not require the shoring of the trench walls at the place where the deceased met his death. The event properly comes within the class of those which could not be foreseen; and, therefore, the defendant is not liable under the Civil Code. Effect upon the Law in this country The act was not intended to curtail the any of the rights which an employee had under the pre-existing law. Under the act, the defense of contributory negligence would defeat an action for damages. For the foregoing reasons the judgment appealed from is reversed and the complaint dismissed, without costs. So ordered. === Abella v NLRC GR No. 71818 July 20, 1987 Facts: Ricardo Dionele, Sr. (private respondent) has been a regular farm worker since 1949 in Hacienda Danao-Ramona located in Ponteverde, Negros Occidential. Said farm land was leased to Rosalina Abella (petitioner) for a period of ten (10) years, renewable for another ten years. Upon the expiration of her leasehold rights, petitioner dismissed Ricardo and another coemployee. Private respondents filed a complaint against the petitioner at the Ministry of Labor and Employment for overtime pay, illegal dismissal and reinstatement with backwages. After presenting their respective evidence, the Labor Arbiter ruled that the dismissal is warranted by the cessation of business, but granted the private respondents separation pay. Petitioner filed a motion for reconsideration but the same was denied. Hence, the present petition. Issue:

Whether or not private respondents are entitled to separation pay? Held: The petition is devoid of merit. Article 284 of the Labor Code is the law applicable in this case. Art.284. Closure of establishment and reduction of personnel. The employer may also terminate the employment of any employee due to the installation of labor-saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this title, by serving a written notice on the workers and the Ministry of Labor and Employment at least month before the intended date thereof. In case of termination due to the installation of labor-saving devices or redundancy, the worker affected thereby shall be entitled to a separation pay equivalent to at least his one month pay or to at least one month pay for every year of service, whichever is higher. In case of retrenchment to prevent losses and in cases of closure or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses, the separation pay shall be equivalent to one month pay or at least one-half month pay for every year of service whichever is higher. A fraction of at least six months shall be considered one whole year." The purpose of the said article is obvious: the protection of the workers whose employment is terminated because of the closure of establishment and reduction of personnel. Without said law, employees like private respondents in the case at bar will lose the benefits to which they are entitled for the number of years served. Although they were absorbed by the new management of the hacienda, in the absence of any showing that the latter has assumed the responsibilities of the former employer, they will be considered as new employees and the years of service behind them would amount to nothing. In any event, it is well-settled that in the implementation and interpretation of the provisions of the Labor Code and its implementing regulations, the workingmans welfare should be the primordial and paramount consideration. The instant petition is hereby dismissed and the decision of the Labor Arbiter and the Resolution of the Ministry of Labor and Employment are hereby affirmed. === Euro-Linea Phil, Inc. vs. NLRC G.R. No. 78782 December 1 , 1987 Laborers Welfare: Liberal Approach

Facts: Petitioner Euro-Linea Phil, Inc hired private respondent Pastoral as shipping expediter on a probationary basis for a period of six months. Prior to hiring by petitioner, Pastoral had been employed by Fitscher Manufacturing Corporation also as shipping expediter. On 4 February 1984, Pastoral received a memorandum terminating his probationary employment in view of his failure to meet the performance standards set by the company. Pastoral filed a complaint for illegal dismissal against petitioner. On 19 July 1985, the Labor Arbiter found petitioner guilty of illegal dismissal. Petitioner appealed the decision to the NLRC on 5 August 1985 but the appeal was dismissed. Hence the petition for review seeking to reverse and set aside the resolution of public respondent NLRC, affirming the decision of the Labor Arbiter, which ordered the reinstatement of complainant with six months backwages. Issue: Whether or not the National Labor Relations Commission acted with grave abuse of discretion amounting to excess of jurisdiction in ruling against the dismissal of the respondent, a temporary or probationary employee, by his employer. Ruling: Although a probationary or temporary employee has a limited tenure, he still enjoys the constitutional protection of security of tenure. Furthermore, what makes the dismissal highly suspicious is the fact that while petitioner claims that respondent was inefficient, it retained his services until the last remaining two weeks of the six months probationary employment. No less important is the fact that private respondent had been a shipping expediter for more than one and a half years before he was absorbed by petitioner. It therefore appears that the dismissal in question is without sufficient justification. It must be emphasized that the prerogative of management to dismiss or lay-off an employee must be done without abuse of discretion, for what is at stake is not only petitioner's position but also his means of livelihood. The right of an employer to freely select or discharge his employees is subject to regulation by the State, basically in the exercise of its paramount police power. Petition dismissed for lack of merit and decision by the NLRC is affirmed. === Manila Electric Company vs. NLRC G.R. No. 78763 July 12, 1989 Labors Liberal Approach

Facts: 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 Peafrancia 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. As a result, services of the respondent were terminated and this prompted respondent to file a complaint for illegal dismissal, unpaid wages and separation pay. The Labor Arbiter rendered a decision directing the petitioner to reinstate respondent without back wages. Both parties appealed to the Commission and were dismissed by the Commission for lack of merit and affirmed the decision of the Labor Arbiter. Issue: Whether or not respondent Signo should be dismissed from petitioner company on grounds of serious misconduct and loss of trust and confidence. Held: No. 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. (ItogonSuyoc 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 selfdestruction 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). === G.R. No. L-48926 MANUEL SOSITO vs. AGUINALDO DEVELOPMENT CORPORATION DECEMBER 14, 1987 Facts: Petitioner Manuel Sosito filed for an indefinite leave from the company on January 16, 1976. Months later, the company underwent a retrenchment program but offered separation pay to those who had been in the active service as of June 30, 1976 and had tendered their resignation not later than July 31, 1976. Petitioner, to avail of the benefits, submitted his resignation. The company denied him the benefits. Issue:

Whether or not petitioner was entitled to the benefits? Held: The Court held that the petitioner was not qualified to avail of the benefits because at the time he submitted his resignation, he was not in the active service, having been on voluntary indefinite leave. The petitioner cannot just do as he please to the detriment of the company. The Court expressed that labor disputes arent necessarily immediately tipped in favor of labor. The Management also has its own rights, which must also be afforded the same protection as that of labor. The Court held that justice is in every case for the deserving, to be dispensed in the light of the established facts and the applicable law and doctrine. === Facts: Before us is a Petition for Certiorari seeking to set aside and annul the Order of respondent Minister of Labor and Employment (MOLE) directly certifying private respondent as the recognized and duly-authorized collective bargaining agent for petitioner's sales force and ordering the reinstatement of three employees of petitioner. The respondent Union, on the other hand, reiterated the issue in its Notice to Strike, alleging that it was duly registered with the Bureau of Labor Relations with a total membership of 87 regular salesmen (nationwide) out of 117 regular salesmen presently employed by the company as of November 30, 1985. In addition, it stated that since the registration of the Union up to the present, more than 213 of the total salesmen employed are already members of the Union, leaving no doubt that the true sentiment of the salesmen was to form and organize the Colgate Palmolive Salesmen Union. The Union further alleged that the company is unreasonably delaying the recognition of the union because when it was informed of the organization of the union, and when it was presented with a set of proposals for a collective bargaining agreement, the company took an adversarial stance by secretly distributing a "survey sheet on unionmembership" to newly hired salesmen from the Visayas, Mindanao and Metro Manila areas. Moreover, District Sales Managers and Sales Supervisors coerced salesmen from the Visayas and Mindanao by requiring them to fill up and/or accomplish said form by checking answers which were adverse to the union; that with a handful of the survey sheets secured by management through coercion, it now would like to claim that all salesmen are not in favor of the organization of the union, which acts are clear manifestations of unfair labor practices. Issue: Whether or not the employer can be compelled to continue with the employment of a person who is guilty of misfeasance towards his employer. Held: No. The order of the respondent Minister to reinstate theemployees despite a clear finding of guilt on their part is not in conformity with law. Reinstatement is simply incompatible with a finding of guilt. Where the totality of the evidence was sufficient to warrant the dismissal of the employees the law warrants theirdismissal without making any distinction between a first offender and a habitual delinquent. Under the law, the respondent Minister is duly mandated to equally protect and respect not only the labor or workers' side but also the management and/or employers' side. The law, in protecting the rights of the laborer, authorizes neither oppression nor self-destruction of the employer. To order the

reinstatement of the erring employees namely, Mejia, Sayson and Reynante would in effect encourage unequal protection of the laws as a managerial employee of the petitioner company involved in the same incident which was already dismissed and was not ordered to be reinstated. As stated in the case of San Miguel Brewery vs. National Labor Union, "an employer cannot legally be compelled to continue with the employment of a person who admittedly was guilty of misfeasance or malfeasance towards his employer, and whose continuance in the service of the latter is patently inimical to his interest. = Facts: Respondent Union filed a Notice of Strike with the Bureau of Labor Relations (BLR) on ground of unfair labor practice consisting of alleged refusal to bargain, dismissal of union officers/members; and coercing employees to retract their membership with the union and restraining non-union members from joining the union. The Office of the MOLE, upon petition of petitioner, assumed jurisdiction over the dispute pursuant to Article 264 (g) of the Labor Code. Petitioner pointed out that the allegations regarding dismissal from employment due to union membership were false. It also averred that the suspension and eventual dismissal of the three employees were due to infractions committed by them and that the management reserves the right to discipline erring employees. Petitioner also assailed the legality of the Union, among others. The minister rendered its decision, ruling that there was no merit in the Unions complaint. It also ruled that the three dismissed employees were not without fault but nonetheless ordered the reinstatement of the same. At the same time, respondent Minister directly certified the respondent Union as the collective bargaining agent for the sales force in petitioner company and ordered the reinstatement of the three salesmen to the company on the ground that the employees were first offenders. Issue: Whether or not the minister erred in directly certifying the Union based on the latters selfserving assertion that it enjoys the support of the majority of the sales force in petitioners company and in ordering the reinstatement of the three dismissed employees. Held: The Court held that the minister failed to determine with legal certainty whether the Union indeed enjoyed majority representation. The Court held that by relying only on the Notice of Strike, the minister had encouraged disrespect of the law. He had also erroneously vested upon himself the right to choose the collective bargaining representative which ought to have been upon the employees. The Court held that the reinstatement of the three employees despite a clear finding of guilt on their part is not in conformity with law. Ruling otherwise would only encourage unequal protection of the laws with respect to the rights of the management and the employees. The court rendered the decision of the minister reversed and set aside, ordering petitioners to give the three employees their separation pay.

=== ELMER M. MENDOZA, petitioner, vs. RURAL BANK OF LUCBAN, respondent G.R. No. 155421 July 7, 2004 Facts: On April 25, 1999, the Board of Directors of the Rural Bank of Lucban, Inc., issued Board Resolution Nos. 99-52 and 99-53, that in line with the policy of the bank to familiarize bank employees with the various phases of bank operations and further strengthen the existing internal control system[,] all officers and employees are subject to reshuffle of assignments. Moreover, this resolution does not preclude the transfer of assignment of bank officers and employees from the branch office to the head office and vice-versa." Petitioner filed a Complaint before Arbitration Branch No. IV of the National Labor Relations Commission (NLRC). The Complaint -- for illegal dismissal, underpayment, separation pay and damages. Petitioner argues that he was compelled to file an action for constructive dismissal, because he had been demoted from appraiser to clerk and not given any work to do, while his table had been placed near the toilet and eventually removed. He adds that the reshuffling of employees was done in bad faith, because it was designed primarily to force him to resign. After the NLRC denied his Motion for Reconsideration, petitioner brought before the CA a Petition for Certiorari assailing the foregoing Resolution. The Court of appeals Find that no grave abuse of discretion could be attributed to the NLRC. Hence, this Petition. Issue: Whether the petitioner was constructively dismissed from his employment? Held: The Petition has no merit. Constructive dismissal is defined as an involuntary resignation resorted to when continued employment is rendered impossible, unreasonable or unlikely; when there is a demotion in rank or a diminution of pay; or when a clear discrimination, insensibility or disdain by an employer becomes unbearable to the employee. Jurisprudence recognizes the exercise of management prerogatives. For this reason, courts often decline to interfere in legitimate

business decisions of employers. Indeed, labor laws discourage interference in employers' judgments concerning the conduct of their business. The law must protect not only the welfare of employees, but also the right of employers. In the pursuit of its legitimate business interest, management has the prerogative to transfer or assign employees from one office or area of operation to another -- provided there is no demotion in rank or diminution of salary, benefits, and other privileges; and the action is not motivated by discrimination, made in bad faith, or effected as a form of punishment or demotion without sufficient cause. This privilege is inherent in the right of employers to control and manage their enterprise effectively. The right of employees to security of tenure does not give them vested rights to their positions to the extent of depriving management of its prerogative to change their assignments or to transfer them. The law protects both the welfare of employees and the prerogatives of management. Courts will not interfere with business judgments of employers, provided they do not violate the law, collective bargaining agreements, and general principles of fair play and justice. The transfer of personnel from one area of operation to another is inherently a managerial prerogative that shall be upheld if exercised in good faith -- for the purpose of advancing business interests, not of defeating or circumventing the rights of employees. "The reshuffling of its employees was done in good faith and cannot be made the basis of a finding of constructive dismissal. WHEREFORE, this Petition is DENIED, and the June 14, 2002 Decision and the September 25, 2002 Resolution of the Court of Appeals are AFFIRMED. Costs against petitioner. === GELMART INDUSTRIES PHILS., INC., petitioner, vs. THE HON. NATIONAL LABOR RELATIONS COMMISSION AND FELIX FRANCIS, respondents. G.R. No. 85668 August 10, 1989 Facts: Private respondent Felix Francis started working as an auto-mechanic for petitioner Gelmart Industries Phils., Inc. (hereinafter referred to as GELMART) sometime in 1971 As such, his work consisted of the repair of engines and underchassis, as well as trouble shooting and overhauling of company vehicles. He is likewise entrusted with some tools and spare parts in furtherance of the work assigned to him.

On April 11, 1987, private respondent was caught by the security guards taking out of GELMART's premises one (1) plastic container filled with about 16 ounces of "used' motor oil, without the necessary gate pass to cover the same as required under GELMART's rules and regulations. By reason thereof, petitioner, on April 13, 1987, was placed under preventive suspension pending investigation for violation of company rules and regulations. Under the said rules, theft and/or pilferage of company property merits an outright termination from employment. After due investigation, or on May 20, 1987, private respondent was found guilty of theft of company property. As a consequence, his services were severed. Thereafter, private respondent filed a complaint for illegal dismissal before the NLRC. In a decision dated February 26, 1988, Labor Arbiter Ceferina J. Diosana ruled that private respondent was illegally dismissed and, accordingly, ordered the latter's reinstatement with full backwages from April 13, 1987 up to the time of actual reinstatement. Issue: Whether or not the National Labor Relations Commission (NLRC) committed a grave abuse of discretion amounting to lack or excess of jurisdiction in ordering the reinstatement of private respondent to his former position with payment of backwages equivalent to six (6) months. Held: Consistent with the policy of the State to bridge the gap between the underprivileged workingmen and the more affluent employers, the NLRC rightfully tilted the balance in favor of the workingmen and this was done without being blind to the concomitant right of the employer to the protection of his property. Thus, without being too harsh to the employer, on the one hand, and naively liberal to labor, on the other, the NLRC correctly pointed out that private respondent cannot totally escape liability for what is patently a violation of company rules and regulations. Considering that private respondent herein has no previous derogatory record in his fifteen (15) years of service with petitioner GELMART the value of the property pilfered (16 ounces of used motor oil) is very minimal, plus the fact that petitioner failed to reasonably establish that non-dismissal of private respondent would work undue prejudice to the viability of their operation or is patently inimical to the company's interest, it is more in consonance with the policy of the State, as embodied in the Constitution, to resolve all doubts in favor of labor. === Facts: Petitioner Romeo Lagatic was employed in May 1986 by Cityland. As a marketing specialist, hewas tasked with soliciting sales for the company, with the corresponding duties of acceptingcall-ins, referrals, and making client calls and cold calls (the practice of prospecting

for clientsthrough the telephone directory). Cityland, believing that the same is an effective and cost-efficient method of finding clients, requires all its marketing specialists to make cold calls butnonetheless requires submission of daily progress reports on the same in order to assess todetermine the results thereof.On November 1992, petitioner was suspended for three days for failing to submit cold callreports on various dates of September and October 1992 notwithstanding a written reprimandfor infraction of the same committed a year earlier and a warning that further non-compliancewould result to termination.Notwithstanding the aforesaid suspension and warning, petitioner again failed to submit cold callreports for five (5) days of February 1993. He was verbally reminded to submit the same andwas even given up to February 17, 1993 to do so. Instead of complying with said directive,Petitioner, on February 16, 1993, wrote a note, TO HELL WITH COLD CALLS! WHO CARES?and exhibited the same to his co-employees. To worsen matters, he left the same lying on hisdesk where everyone could see it.On February 23, 1993, petitioner received a memorandum requiring him to explain why Citylandshould not make good its previous warning for his failure to submit cold call reports, as well asfor issuing the written statement aforementioned. On February 24, 1993, he sent a letter-replyalleging that his failure to submit cold call reports should not be deemed as grossinsubordination. He denied any knowledge of the damaging statement, TO HELL WITH COLDCALLS!Finding petitioner guilty of gross insubordination, Cityland served a notice of dismissal upon himon February 26, 1993. Aggrieved by such dismissal, petitioner filed a complaint against Citylandfor illegal dismissal, illegal deduction, underpayment, overtime and rest day pay, damages andattorneys fees. The labor arbiter dismissed the petition for lack of merit. On appeal, the samewas affirmed by the NLRC; hence the present recourse. Issue: Whether or not the respondent NLRC gravely abused its discretion in not finding the petitioner illegally dismissed. Held: The petition lacks merit To constitute a valid dismissal from employment, two requisites must be met, namely: (1) theemployee must be afforded due process, and (2) the dismissal must be for a valid cause.Petitioner loses sight of the fact that except as provided for, or limited by, special laws, anemployer is free to regulate, according to his discretion and judgment, all aspects of employment. Employers may, thus, make reasonable rules and regulations for the governmentof their employees, and when employees, with knowledge of an established rule, enter theservice, the rule becomes a part of the contract of employment. It is also generally recognizedthat company policies and regulations, unless shown to be grossly oppressive or contrary tolaw, are generally valid and binding on the parties and must be complied with.Corollarily, an employee may be validly dismissed for violation of a reasonable company rule or regulation adopted for the conduct of the company business. An employer cannot rationally beexpected to retain the employment of a person whose x x x lack of regard for his employersrules x x x has so plainly and completely been bared. Petitioners continued infraction of company policy requiring cold call reports, as evidenced by the 28 instances of non-submissionof aforesaid reports, justifies his dismissal. He cannot be allowed to arrogate unto himself theprivilege of setting company policy on the effectivity of solicitation methods. To do so would beto sanction oppression and the self-destruction of the employer.More than that, his written statement shows his open defiance and disobedience to lawful rulesand

regulations of the company. Likewise, said company policy of requiring cold calls and theconcomitant reports thereon is clearly reasonable and lawful, sufficiently known to petitioner,and in connection with the duties which he had been engaged to discharge. There is, thus, justcause for his dismissal. Decision: WHEREFORE, premises considered, the assailed Resolution is AFFIRMED and this petition ishereby DISMISSED for lack of merit. Costs against petitioner. SO ORDERED. Narvasa, C.J., (Chairman), Melo, Francisco, and Panganiban, JJ., concur. === China Banking Corporation v Borromeo G.R. No. 156515 Facts: Respondent Mariano Borromeo was Assistant Vice-President of the Branch Banking Group of China Banking Corporation for the Mindanao Area. Without authority from the Executive Committee or Board of Directors of the bank, he approved several DAUD/BP (Drawn Against Uncollected Deposits/Bills Purhcased) accommodations amounting to P2,441,375 in favour of Joel Maniwan. Such checks, which are not sufficiently funded by cash, are generally not honoured by banks. This came to the knowledge of the bank authorities. A memorandum was issued to the Mariano seeking clarification relative to the matter. The respondent accepted full responsibility for committing an error in judgment and abuse of discretion. Mariano resigned from the Bank and apologized for all the trouble I have caused because of the Maniwan case. The respondent, however, vehemently denied benefitting therefrom. His acts having constituted violation of the Banks Code of Ethics, the respondent was directed to restitute the amount of P1,507,736.79 representing 90% of the total loss of P1,675,263.10 incurred by the Bank. However, in view of his resignation and considering the years of service in the Bank, the management earmarked only P836,637.08 from the respondents total separation benefits or pay. The said amount would be released upon recovery of the sums demanded from Maniwan in a civil case filed against him by the bank with the RTC in Cagayan de Oro City. The respondent made a demand on the bank for the payment of his separation pay and other benefits, but the bank maintained its position to withhold the sum of P836,637.08. Thus, Mariano filed with the NLRC a complaint for payment of separation pay, mid-year bonus, profit share and damages against the bank. The Labor Arbiter ruled in favour of the bank. Respondent appealed to the NLRC but it affirmed in toto the findings of the Labor Arbiter. The CA, however, alleging that respondent w/as denied his right to due process, set aside the NLRC decision and ordered that the

records of the case be remanded to the Labor Arbiter for further hearings on the factual issues involved. The bank filed a motion for reconsidered but denied the same. Hence, this petition. Issue: Whether or not the bank has the prerogative/right to impose on the respondent what it considered the appropriate penalty under the circumstances pursuant to its company rules and regulations. Held: The petition is meritorious. The bank was left with no other course but to impose the ancillary penalty of restitution. It was certainly within the banks prerogative to impose on the respondent what it considered the appropriate penalty under the circumstances pursuant to its company rules and regulations. The petitioners bank business is essentially imbued with public interest and owes great fidelity to the public it deals with. It is expected to exercise the highest degree of diligence in the selection and supervision of their employees. As a corollary, and like all other business enterprises, its prerogative to discipline its employees and to impose appropriate penalties on erring workers pursuant to company rules and regulations must be respected. The law, in protecting the rights of labor, authorized neither oppression nor self-destruction of an employer company which itself is possessed of rights that must be entitled to recognition and respect. Significantly, the respondent is not wholly deprived of his separation benefits. As the Labor Arbiter stressed in his decision, the separation benefits due the complainant were merely withheld. Even the petitioner bank itself gives the assurance that as soon as the bank has satisfied a judgment in the civil case, the earmarked portion of his benefits will be released without delay. WHEREFORE, the petition is granted. The decision of the CA is reversed and set aside. The Resolution of the NLRC is reinstated. === Associated Watchmen and Security Union v. Lanting G.R. No. L-141120 February 29, 1960 Management Rights: Right to Prescribe Rules

Facts: The Republic Ships Security Agency is one of three agencies, together with K. Tagle Ship Watchmen Agency and the City Watchmen and Security Agency, employed by certain shipping agencies in the City of Manila and respondent Macondray and Company, Inc., in guarding ships or vessels arriving at the port of Manila and discharging cargo on its piers. Thirty-eight affiliates of the Republic Ships Security Agency belong to the petitioner labor union. Petitioner union and its members declared a strike against 19 shipping firms in the City of Manila. Attempts were made by the Court of Industrial Relations to settle the strike. At the hearing or conference before the court on 16 March 1956, the strikers, through counsel, expressed their desire to return back to work and maintain the status quo. The manager of respondent Macondray and Company, Inc. expressed willingness to employ the strikers belonging to the petitioner union under the condition that the agency to which they belong file a bond in the sum of P5,000 in favor of Macondray and Company, Inc. to respond for any negligence, misfeasance or malfeasance of any of the watchmen of petitioner However, the Republic Ships Security Agency, to which most of the members of the petitioner union belonged, failed to comply with the demands of Macondray and Company, Inc. that they furnish such a bond. Because of the failure of the Republic Ships Security Agency to furnish a bond, Macondray and Company, Inc. refused to employ watchmen from the said agency. On 15 November 1956, Macondray and Company, Inc. was charged with unfair labor practice for having dismissed and refused to employ 38 members of the petitioner herein. Respondent contends that they did not demand a bond from the members of the petitioner union but from the Republic Ships Security Agency; that it has not discriminated against members of the petitioner union. Issue: Validity of the bond imposed by respondent Macondray and Company, Inc. Ruling: The refusal of the respondent to employ guards affiliated with a security or watchmen agency that does not furnish a bond can not constitute an unfair labor practice. Such refusal is merely the exercise of respondent's legitimate right to protect its own interests. Respondent never had any contract or agreement with the petitioner union; respondent secured security guards through the three watchmen agencies above mentioned, without

reference to the unions to which the different guards may have pertained. The members of the petitioner union or of the shipping agencies are not ordinary permanent and continuous employees, but merely casual guards who are employed only when there is a ship to be guarded and during the stay of the ship in the port of Manila. Ruled in favor of the respondents. === Pampanga Bus Company vs. Pambusco Employees Union G.R. No. 46739 September 23, 1939 Right to Select Employees Facts: On May 31, 1939, the Court of Industrial Relations issued an order, directing the petitioner herein, Pampanga Bus Company, Inc., to recruit from the respondent, Pambusco Employees' Union, Inc., new employees or laborers it may need to replace members of the union who may be dismissed from the service of the company, with the proviso that, if the union fails to provide employees possessing the necessary qualifications, the company may employ any other persons it may desire. This order, in substance and in effect, compels the company, against its will, to employ preferentially, in its service, the members of the union. Issue: Whether or not the right of the employer to select its employees was violated. Held: Yes.We hold that the court has no authority to issue such compulsory order. The general right to make a contract in relation to one's business is an essential part of the liberty of the citizens protected by the due-process clause of the Constitution. The right of the laborer to sell his labor to such person as he may choose is, in its essence, the same as the right of an employer to purchase labor from any person whom it chooses. The employer and the employee have thus an equality of right guaranteed by the Constitution. "If the employer can compel the employee to work against the latter's will, this is servitude. If the employee can compel the employer to give him work against the employer's will, this is oppression." (Mills vs. United States Printing Co., 99 App. Div., 605; 91 N.Y.S., 185, 189-192.) chanrobles virtual law library. Section of Commonwealth Act No. 213 confers upon labor organizations the right "to collective bargaining with employers for the purpose of seeking better working and living conditions, fair wages, and shorter working hours for laborers, and, in general, to promote the material, social and moral well-being of their members." The term "collective bargaining"

denotes, in common usage as well as in legal terminology, negotiations looking toward a collective agreement. This provision in granting to labor unions merely the right of collective bargaining, impliedly recognizes the employer's liberty to enter or not into collective agreements with them. Indeed, we know of no provision of the law compelling such agreements. Such a fundamental curtailment of freedom, if ever intended by law upon grounds of public policy, should be effected in a manner that is beyond all possibility of doubt. The supreme mandates of the Constitution should not be loosely brushed aside. As held by the Supreme Court of the United States in Hitchman Coal & Co. vs. Mitchell (245 U. S., 229; 62 Law. ed., 260, 276): . . . Whatever may be the advantages of "collective bargaining," it is not bargaining at all, in any just sense, unless it is voluntary on both sides. The same liberty which enables men to form unions, and through the union to enter into agreements with employers willing to agree, entitles other men to remain independent of the union, and other employers to agree with them to employ no man who owes any allegiance or obligation to the union. In the latter case, as in the former, the parties are entitled to be protected by the law in the enjoyment of the benefits of any unlawful agreements they make. This court repeatedly has held that the employer is as free to make non-membership in a union a condition or employment, as the working man is free to join the union, and that this is a part of the constitutional rights of personal liberty and private property, not to be taken away by legislation, unless through some proper exercise of the paramount police power. === Princess C. Aragon2011-0238GREGORIO ARANETA EMPLOYEES VS. ROLDANG.R. No. L-6846July 20, 1955Petitioner: Gregorio Araneta Employees' Union, etc., et al. Respondent: Arsenio C. Roldan, et al. Ponente: J. Jugo Facts: The Agricultural Division of the Gregorio Araneta, Inc., was established in 1947 with a capital ofP200,000. The total investment in that Division in 1953 was about P3,000,000. To reduce thisovercapitalization, the Board of Directors felt that it was necessary either to invite fresh capital fromoutside or to adopt a retrenchment policy. When Heacock and Company refused the invitation to invest inthe enterprise, the Board took the alternative of retrenchment.The Board required a reduction in the volume of business necessitating likewise a reduction ofpersonnel and caused the laying off of 17 employees. The selection of those to be laid off was made by atechnical man and approved by the Board. These employees were given one month separation pay,except Nicolas Gonzalez who refused to receive it. Issue: Whether or not the retrenchment policy adopted by the company is an unfair labor practice. Held: No. The reorganization of the Agricultural Division was adopted by unanimous resolution of theBoard of Directors as a consequence of the retrenchment policy. Thus, the laying off of

the 17 employeeswas due to the retrenchment policy which the Company had to adopt in order to reduce theovercapitalization and minimize expenses. The volume of business was considerably reduced. This wasadopted even before the petitioner, "Gregorio Araneta Employees' Union", was organized and;consequently, it was never directed against the union or any of its members for union or labor activities.The petition is denied, without pronouncement as to costs. === Philippine Sheet Metal Workers Union vs CIR G..R. No. L-2028 April 28, 1949 Facts: This is a petition for certiorari to review an order of the Court of Industrial Relations on the ground that the same was rendered in excess of jurisdiction and with grave abuse of discretion. On March 1, 1985, the respondent Union filed a Notice of Strike with the Bureau of Labor Relations (BLR) on ground of unfair labor practice consisting of alleged refusal to bargain, dismissal of union officers/members; and coercing employees to retract their membership with the union and restraining non-union members from joining the union. The said order was issued of said court involving an industrial dispute between the respondent company (a corporation engaged in the manufacture of tin plates, aluminum sheets, etc.) and its laborers some of whom belong to the Philippine Sheet Metal Workers' Union (CLO) and some to the Liberal Labor Union. The dispute was over certain demands made upon the company by the laborers, one of the demands, being for the recall of eleven workers who had been laid off. Temporarily taken back on certain conditions pending final determination of the controversy, these eleven workers were in the end ordered retained in the decision handed down by the court on February 19, 1947. The petitioner tried to prove that the 11 laborers were laid off by the respondent company due to their union activities. On February 10, 1947, that is, nine days before the decision came down, filed a motion in the case, asking for authority to lay off at least 15 workers in its can department on the ground that the installation and operation of nine new labor-saving machines in said department had rendered the services of the said workers unnecessary. Issue: W/N the firing of the laborers due to their union activities is valid?

Held: Yes. The right to reduce personnel should, of course, not be abused. It should not be made a pretext for easing out laborers on account of their union activities. But neither should it be denied when it is shows that they are not discharging their duties in a manner consistent with good discipline and the efficient operation of an industrial enterprise. The petitioner contends that the order complained of was made with grave abuse of discretion and in excess of jurisdiction in that it is contrary to the pronouncement made by the lower court in its decision in the main case where it disapproved of the dismissal of eleven workers "with whom the management is displeased due to their union activities." It appears, however, that the pronouncement was made upon a distinct set of facts, which are different from those found by the court in connection with the present incident, and that very decision, in ordering the reinstatement of the eleven laborers, qualifies the order by saying that those laborers are to be retained only "until the occurrence of facts that may give rise to a just cause of their laying off or dismissal, or there is evidence of sufficient weight to convince the Court that their conduct is not satisfactory." After a careful review of the record, we find that the Court of Industrial Relations has neither exceeded its jurisdiction nor committed grave abuse of discretion in rendering the order complained of. The petition for certiorari is, therefore, denied, but without costs against the petitioner for the reasons stated in its motion to litigate as pauper. === TIONG KING, petitioner, vs. COURT OF INDUSTRIAL RELATIONS and THE NATIONAL TAILOR'S ASSOCIATION, respondents G.R. No. L-3587 December 21, 1951 Facts: Gaw Pun So owned and operated a tailor shop known as the Army Shirt Factory, located in his own house at Nos. 231-245 Soler Street, Manila. In January, 1948, he had a labor dispute with his personnel and, pending the case in the Court of Industrial Relations, Gaw Pun So, irked and worried by the incidents of litigation, thought of dissolving the business and selling the sewing machines. Tiong King offered to take over the business by leasing the place and the sewing machines. The transfer was put in writing. Tiong King continued the Army Shirt Factory from the month of February with the same employees had by Gaw Pun So. This transfer was known to the personnel, so much so that the latter, as petitioner in the pending dispute in the Court of Industrial Relations, prayed that Tiong King be included as a respondent. In due time, the National Tailors Association entered that all cases were

terminated against the respondents. This agreement was duly approved by the Court of Industrial Relations. On April 27, 1948, Tiong King filed a petition in the Court of Industrial Relations Case No. 117-V-3, alleging that since he operated his shop in February, 1948, he had continually suffered losses; that as there remained only very little of the capital originally invested, and that he was definitely closing the shop on May 30, 1948. Tiong King accordingly prayed that he be allowed to close his tailor shop and business from six o'clock in the afternoon of May 29, 1948. On May 29, 1948, Presiding Judge Arsenio C. Roldan of the Court of Industrial Relations issued an order enjoining Tiong King not to close his factory and not to dismiss, suspend or lay off any laborer or employee without previous authority of said court. Upon petitioner for reconsideration filed by counsel for Tiong King, the Court of Industrial Relations promulgated a resolution dated May 27, 1949, allowing Tiong King to close his business and shop, subject to the condition that, upon reopening the same, his former personnel would be taken back. Upon motion for reconsideration filed by counsel for the National Tailor's Association, the Court of Industrial Relations, promulgated a resolution dated October 31, 1949, reaffirming their stand on the resolution of the Court of Industrial Relations under date of July 1, 1949. The present appeal by certiorari was taken by Tiong King against the last resolution of the Court of Industrial Relations. Issue: Whether he was the owner or operator thereof and had the right to file the petition in the Court of Industrial Relations to close the tailors shop? Held: Upon this point, it is only sufficient to recall that the National Tailors Association entered into a stipulation with Tiong King alone whereby they agreed that all cases against the former owners of the business were terminated. That Tiong King was conceded to be the owner and operator of the army shirt factory at the time his petition to close it was filed, is conclusively borne out by the fact that Presiding Judge Roldan in his decision of January 13, 1949, ordered Tiong King, and not Gaw Pun So, to pay the salaries and wages of the personnel. It is contended, however, that "If at all the court has approved of the agreement between the National Tailors' Association and Mr. Tiong King it was because 'this arrangement is a very good solution to the present conflict as it is advantageous not only to the union but also the management, and, is in consonance with the contract entered into between the management and the new workers." This contention is followed with the remark that the approval of said agreement did not include a finding that Tiong King was either the owner or the lessee of the Army Shirt Factory. We are unable to agree. In entering into the agreement with the National Tailors Association, Tiong King acted in his own behalf, regardless of the

former owners of the business. Indeed, it was covenanted that all the cases against the latter were deemed terminated. Considerations of fair play and justice demand that Tiong King be given the full legal effect of said agreement which before the sanction of the Court of Industrial Relations. There being no question that Tiong King's capital invested in the Army Shirt Factory was almost exhausted at the time of the filing of his petition to close it, said petition must necessity be granted. It is admitted by all the Judges of the Court of Industrial Relations that an employer may close his business, provided the same is done in good faith and is due beyond his control. To rule otherwise, would be oppressive and inhuman. Wherefore, reversing the resolution of the Court of Industrial Relations dated October 31, 1949, we hereby affirm the resolution of said court dated May 27, 1949. So ordered without costs. === === RIZAL EMPIRE INSURANCE GROUP AND/OR SERGIO CORPUS, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, TEODORICO L. RUIZ, as Labor Arbiter and ROGELIO R. CORIA, respondents. G.R. No. 73140 May 29, 1987 Facts: In August, 1977, herein private respondent Rogelio R. Coria was hired by herein petitioner Rizal Empire Insurance Group as a casual employee with a salary of P10.00 a day. On January 1, 1978, he was made a regular employee, having been appointed as clerk-typist, with a monthly salary of P300.00. Being a permanent employee, he was furnished a copy of petitioner company's "General Information, Office Behavior and Other Rules and Regulations." In the same year, without change in his position-designation, he was transferred to the Claims Department and his salary was increased to P450.00 a month. In 1980, he was transferred to the Underwriting Department and his salary was increased to P580.00 a month plus cost of living allowance, until he was transferred to the Fire Department as filing clerk. In July, 1983, he was made an inspector of the Fire Division with a monthly salary of P685.00 plus allowances and other benefits. On October 15, 1983, private respondent Rogelio R. Coria was dismissed from work, allegedly, on the grounds of tardiness and unexcused absences. Accordingly, he filed a complaint with the Ministry of Labor and Employment (MOLE), and in a Decision dated

March 14, 1985 (Record, pp. 80-87), Labor Arbiter Teodorico L. Ruiz reinstated him to his position with back wages. Petitioner filed an appeal with the National labor Relations Commission (NLRC) but, in a Resolution dated November 15, 1985 (Ibid, pp. 31-32), the appeal was dismissed on the ground that the same had been filed out of time. Hence, the instant petition. Issue: Whether or not NLRC committed a grave abuse of discretion amounting to lack of jurisdiction in dismissing petitioners appeal on a technicality. Held: Rule VIII of the Revised Rules of the National Labor Relations Commission on appeal, provides: SECTION 1. (a) Appeal. Decision or orders of a labor Arbiter shall be final and executory unless appealed to the Commission by any or both of the parties within ten (10) calendar days from receipt of notice thereof. SECTION 6. No extension of period. No motion or request for extension of the period within which to perfect an appeal shall be entertained. The record shows that the employer (petitioner herein) received a copy of the decision of the Labor Arbiter on April 1, 1985. It filed a Motion for Extension of Time to File Memorandum of Appeal on April 11, 1985 and filed the Memorandum of Appeal on April 22, 1985. Pursuant to the "no extension policy" of the National Labor Relations Commission, aforesaid motion for extension of time was denied in its resolution dated November 15, 1985 and the appeal was dismissed for having been filed out of time. The Revised Rules of the National Labor Relations Commission are clear and explicit and leave no room for interpretation. Moreover, it is an elementary rule in administrative law that administrative regulations and policies enacted by administrative bodies to interpret the law which they are entrusted to enforce, have the force of law, and are entitled to great respect (Espanol v. Philippine Veterans Administration, 137 SCRA 314 [1985]). Under the above-quoted provisions of the Revised NLRC Rules, the decision appealed from in this case has become final and executory and can no longer be subject to appeal. Even on the merits, the ruling of the Labor Arbiter appears to be correct; the consistent promotions in rank and salary of the private respondent indicate he must have been a highly efficient worker, who should be retained despite occasional lapses in punctuality and attendance. Perfection cannot after all be demanded. WHEREFORE, this petition is DISMISSED.

=== CBTC Employees Union v. Clave G.R. No. 49582 January 7, 1986 Article 5: Rules and Regulations Facts: Petitioner Commercial Bank and Trust Company Employees' Union (CBTC) lodged a complaint with the Department of Labor, against private respondent bank (Comtrust) for nonpayment of the holiday pay benefits provided for under Article 95 (now Article 94) of the Labor Code. Failing to arrive at an amicable settlement at conciliation level, the parties opted to submit their dispute for voluntary arbitration. On 22 April 1976, the Arbitrator handed down an award on the dispute in favor of petitioner union. The next day, 23 April 1976, the Department of Labor released Policy Instructions No. 9, a policy regarding the implementation of the ten (10) paid legal holidays. Said bank interposed an appeal to the National Labor Relations Commission (NLRC), contending that the Arbitrator demonstrated gross incompetence and/or grave abuse of discretion when he failed to apply Policy Instructions No. 9. This appeal was dismissed on 16 August 1976. Private respondent then appealed to the Secretary of Labor. On 30 June 1977, the Acting Secretary of Labor reversed the NLRC decision. On the principal issue of holiday pay, the Acting Secretary, guided by Policy Instructions No. 9, applied the same retrospectively, among other things. Issue: Whether or not the monthly pay of the covered employees already includes what Article 94 of the Labor Code requires as regular holiday pay benefit in the amount of his regular daily wage. Ruling: In excluding the union members the benefits of the holiday pay law, public respondent predicated his ruling on Section 2, Rule IV, Book III of the Rules to implement Article 94 of the Labor Code promulgated by the then Secretary of Labor and Policy Instructions No. 9. In Insular Bank of Asia and America Employees' Union (IBAAEU) vs. Inciong, this Court's Second Division, speaking through former Justice Makasiar, expressed the view and declared that the section and interpretative bulletin are null and void, having been promulgated by the then Secretary of Labor in excess of his rule-making authority.

The questioned Section 2, Rule IV, Book III of the Integrated Rules and the Secretary's Policy Instruction No. 9 add another excluded group, namely, 'employees who are uniformly paid by the month'. While the additional exclusion is only in the form of a presumption that all monthly paid employees have already been paid holiday pay, it constitutes a taking away or a deprivation which must be in the law if it is to be valid. An administrative interpretation which diminishes the benefits of labor more than what the statute delimits or withholds is obviously ultra vires. Ruled in favor of the petitioners. Presidential Executive Assistant and the Acting Secretary of labor are set aside, and the award of the Arbitrator reinstated. === National Housing Corp. v. Juco 134 SCRA 172 (1985) Applicability of Article 6 Facts: Juco was an employee of the NHA. He filed a complaint for illegal dismissal w/ MOLE but his case was dismissed by the labor arbiter on the ground that the NHA is a govt-owned corp. and jurisdiction over its employees is vested in the CSC. On appeal, the NLRC reversed the decision and remanded the case to the labor arbiter for further proceedings. NHA in turn appealed to the SC. Issue: Are employees of the National Housing Corporation, a GOCC without original charter, covered by the Labor Code or by laws and regulations governing the civil service. Held: Sec. 11, Art XII-B of the Constitution specifically provides: "The Civil Service embraces every branch, agency, subdivision and instrumentality of the Government, including every government owned and controlled corporation.The inclusion of GOCC within the embrace of the civil service shows a deliberate effort at the framers to plug an earlier loophole which allowed GOCC to avoid the full consequences of the civil service system. All offices and firms of the government are covered. This consti provision has been implemented by statute PD 807 is unequivocal that personnel of GOCC belong to the civil service and subject to civil service requirements."Every" means each one of a group, without exception. This case refers to a GOCC. It does not cover cases involving private firms taken over by the government in foreclosure or similar proceedings.

For purposes of coverage in the Civil Service, employees of govt- owned or controlled corps. whether created by special law or formed as subsidiaries are covered by the Civil Service Law, not the Labor Code, and the fact that pvt. corps. owned or controlled by the govt may be created by special charter does not mean that such corps. not created by special law are not covered by the Civil Service. The infirmity of the resp's position lies in its permitting the circumvention or emasculation of Sec. 1, Art. XII-B [now Art IX, B, Sec. 2 (1)] of the Consti. It would be possible for a regular ministry of govt to create a host of subsidiary corps. under the Corp. Code funded by a willing legislature. A govt-owned corp. could create several subsidiary corps. These subsidiary corps. would enjoy the best of two worlds. Their officials and employees would be privileged individuals, free from the strict accountability required by the Civil Service Dec. and the regulations of the COA. Their incomes would not be subject to the competitive restraint in the open market nor to the terms and conditions of civil service employment. Conceivably, all govt-owned or controlled corps. could be created, no longer by special charters, but through incorp. under the general law. The Constitutional amendment including such corps. in the embrace of the civil service would cease to have application. Certainly, such a situation cannot be allowed. === National Service Corp. v. NLRC, 168 SCRA 125 (1988) -The civil service does not include Government owned or controlledcorporations (GOCC) which are organized as subsidiaries of GOCC under the general corporation law.F: Eugenio Credo was an employee of the National Service Corporation. She claims she was illegally dismissed. NLRC ruledordering her reinstatement. NASECO argues that NLRC has no jurisdiction to order her reinstatement. NASECO as a governmentcorporation by virtue of its being a subsidiary of the NIDC, which is wholly owned by the Phil. National Bank which is in turn aGOCC, the terms and conditions of employment of its employees are governed by the Civil Service Law citing National Housing vJuco.ISSUE: W/N employees of NASECO, a GOCC without original charter, are governed by the Civil Service Law.HELD: NO. The holding in NHC v Juco should not be given retroactive effect, that is to cases that arose before its promulgation of Jan 17, 1985. To do otherwise would be oppressive to Credo and other employees similarly situated because under the 1973 Constibut prior to the ruling in NHC v Juco, this court recognized the applicability of the Labor jurisdiction over disputes involving terms andconditions of employment in GOCC's, among them NASECO.In the matter of coverage by the civil service of GOCC, the 1987 Consti starkly differs from the 1973 consti where NHC v Juco wasbased. It provides that the "civil service embraces all branches, subdivisions, instrumentalities, and agencies of the Government,including government owned or controlled corporation with original charter." Therefore by clear implication, the civil service doesnot include GOCC which are organized as subsidiaries of GOCC under the general corporation law === Republic vs Court of Appeals

G..R. No. 87676 December 20, 1989 Facts: The Regional Trial Court of Manila, Branch III, dismissed for lack of jurisdiction, the petitioner's complaint in Civil Case No. 88- 44048 praying for a declaration of illegality of the strike of the private respondents and to restrain the same. The Court of Appeals denied the petitioner's petition for certiorari, hence, this petition for review. Although the NPDC was originally created in 1963 under Executive Order No. 30, as the Executive Committee for the development of the Quezon Memorial, Luneta and other national parks, and later renamed as the National Parks Development Committee under Executive Order No. 68, on September 21, 1967, it was registered in the Securities and Exchange Commission (SEC) as a non-stock and non-profit corporation, known as "The National Parks Development Committee, Inc." However, in August, 1987, the NPDC was ordered by the SEC to show cause why its Certificate of Registration should not be suspended for: (a) failure to submit the General Information Sheet from 1981 to 1987; (b) failure to submit its Financial Statements from 1981 to 1986; (c) failure to register its Corporate Books; and (d) failure to operate for a continuous period of at least five (5) years since September 27, 1967. Issue: W/N the petitioner, National Parks Development Committee (NPDC), is a government agency, or a private corporation, for on this issue depends the right of its employees to strike. Held: Since NPDC is a government agency, its employees are covered by civil service rules and regulations (Sec. 2, Article IX, 1987 Constitution). Its employees are civil service employees (Sec. 14, Executive Order No. 180). While NPDC employees are allowed under the 1987 Constitution to organize and join unions of their choice, there is as yet no law permitting them to strike. In case of a labor dispute between the employees and the government, Section 15 of Executive Order No. 180 dated June 1, 1987 provides that the Public Sector Labor- Management Council, not the Department of Labor and Employment, shall hear the dispute. Clearly, the Court of Appeals and the lower court erred in holding that the labor dispute between the NPDC and the members of the NPDSA is cognizable by the Department of Labor and Employment. WHEREFORE, the petition for review is granted. The decision of the Court of Appeals in CAG.R. SP No. 14204 is hereby set aside. The private respondents' complaint should be filed in the Public Sector Labor-Management Council as provided in Section 15 of Executive Order No. 180. Costs against the private respondents.

=== LUZON DEVELOPMENT BANK, petitioner, vs. ASSOCIATION OF LUZON DEVELOPMENT BANK EMPLOYEES and ATTY. ESTER S. GARCIA in her capacity as VOLUNTARY ARBITRATOR, respondents G.R. No. 120319 October 6, 1995 Facts: From a submission agreement of the Luzon Development Bank (LDB) and the Association of Luzon Development Bank Employees (ALDBE) arose an arbitration case to resolve the following issue: whether or not the company has violated the Collective Bargaining Agreement provision and the Memorandum of Agreement dated April 1994, on promotion. At a conference, the parties agreed on the submission of their respective Position Papers on December 1-15, 1994. Atty. Ester S. Garcia, in her capacity as Voluntary Arbitrator, received ALDBE's Position Paper on January 18, 1995. LDB, on the other hand, failed to submit its Position Paper despite a letter from the Voluntary Arbitrator reminding them to do so. As of May 23, 1995 no Position Paper had been filed by LDB. On May 24, 1995, without LDB's Position Paper, the Voluntary Arbitrator rendered a decision disposing as follows: WHEREFORE, finding is hereby made that the Bank has not adhered to the Collective Bargaining Agreement provision nor the Memorandum of Agreement on promotion. Hence, this petition for certiorari and prohibition seeking to set aside the decision of the Voluntary Arbitrator and to prohibit her from enforcing the same. Issue: Which court has the jurisdiction for the appellate review of adjudications of all quasi-judicial entities Held: Section 9 of B.P. Blg. 129, as amended by Republic Act No. 7902, provides that the Court of Appeals shall exercise: (B) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders or awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or commissions, including the Securities and Exchange Commission, the Employees Compensation Commission and the Civil Service Commission, except those falling within the appellate jurisdiction of the Supreme Court in accordance with the Constitution, the Labor Code of the Philippines under Presidential Decree No. 442, as amended, the provisions of

this Act, and of subparagraph (1) of the third paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act of 1948. The voluntary arbitrator no less performs a state function pursuant to a governmental power delegated to him under the provisions therefor in the Labor Code and he falls, therefore, within the contemplation of the term "instrumentality" in the aforequoted Sec. 9 of B.P. 129. The fact that his functions and powers are provided for in the Labor Code does not place him within the exceptions to said Sec. 9 since he is a quasi-judicial instrumentality as contemplated therein A fortiori, the decision or award of the voluntary arbitrator or panel of arbitrators should likewise be appealable to the Court of Appeals, in line with the procedure outlined in Revised Administrative Circular No. 1-95, just like those of the quasi-judicial agencies, boards and commissions enumerated therein. This would be in furtherance of, and consistent with, the original purpose of Circular No. 1-91 to provide a uniform procedure for the appellate review of adjudications of all quasi-judicial entities not expressly excepted from the coverage of Sec. 9 of B.P. 129 by either the Constitution or another statute. In the same vein, it is worth mentioning that under Section 22 of Republic Act No. 876, also known as the Arbitration Law, arbitration is deemed a special proceeding of which the court specified in the contract or submission, or if none be specified, the Regional Trial Court for the province or city in which one of the parties resides or is doing business, or in which the arbitration is held, shall have jurisdiction. A party to the controversy may, at any time within one (1) month after an award is made, apply to the court having jurisdiction for an order confirming the award and the court must grant such order unless the award is vacated, modified or corrected. In effect, this equates the award or decision of the voluntary arbitrator with that of the regional trial court. Consequently, in a petition for certiorari from that award or decision, ACCORDINGLY, the Court resolved to REFER this case to the Court of Appeals. === SOCIAL SECURITY SYSTEM EMPLOYEES ASSOCIATION (SSSEA), DIONISION T. BAYLON, RAMON MODESTO, JUANITO MADURA, REUBEN ZAMORA, VIRGILIO DE ALDAY, SERGIO ARANETA, PLACIDO AGUSTIN, VIRGILIO MAGPAYO, petitioner, vs. THE COURT OF APPEALS, SOCIAL SECURITY SYSTEM (SSS), HON. CEZAR C. PERALEJO, RTC, BRANCH 98, QUEZON CITY, respondents. G.R. No. 85279 July 28, 1989 Facts:

On June 11, 1987, the SSS filed with the Regional Trial Court of Quezon City a complaint for damages with a prayer for a writ of preliminary injunction against petitioners, alleging that on June 9, 1987, the officers and members of SSSEA staged an illegal strike and baricaded the entrances to the SSS Building, preventing non-striking employees from reporting for work and SSS members from transacting business with the SSS; that the strike was reported to the Public Sector Labor - Management Council, which ordered the strikers to return to work; that the strikers refused to return to work; and that the SSS suffered damages as a result of the strike. The complaint prayed that a writ of preliminary injunction be issued to enjoin the strike and that the strikers be ordered to return to work; that the defendants (petitioners herein) be ordered to pay damages; and that the strike be declared illegal. It appears that the SSSEA went on strike after the SSS failed to act on the union's demands, which included: implementation of the provisions of the old SSS-SSSEA collective bargaining agreement (CBA) on check-off of union dues; payment of accrued overtime pay, night differential pay and holiday pay; conversion of temporary or contractual employees with six (6) months or more of service into regular and permanent employees and their entitlement to the same salaries, allowances and benefits given to other regular employees of the SSS; and payment of the children's allowance of P30.00, and after the SSS deducted certain amounts from the salaries of the employees and allegedly committed acts of discrimination and unfair labor practices. Issue: Whether or not employees of the Social Security System (SSS) have the right to strike. Held: The 1987 Constitution, in the Article on Social Justice and Human Rights, provides that the State "shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and peaceful concerted activities, including the right to strike in accordance with law" [Art. XIII, Sec. 31]. Resort to the intent of the framers of the organic law becomes helpful in understanding the meaning of these provisions. A reading of the proceedings of the Constitutional Commission that drafted the 1987 Constitution would show that in recognizing the right of government employees to organize, the commissioners intended to limit the right to the formation of unions or associations only, without including the right to strike. Considering that under the 1987 Constitution "the civil service embraces all branches, subdivisions, instrumentalities, and agencies of the Government, including governmentowned or controlled corporations with original charters" [Art. IX(B), Sec. .2(l) see also Sec. 1 of E.O. No. 180 where the employees in the civil service are denominated as "government employees"] and that the SSS is one such government-controlled corporation with an original charter, having been created under R.A. No. 1161, its employees are part of the civil service [NASECO v. NLRC, G.R. Nos. 69870 & 70295, November 24,1988] and are covered by the

Civil Service Commission's memorandum prohibiting strikes. This being the case, the strike staged by the employees of the SSS was illegal.