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1 CASE DIGESTS IN LABOR RELATION(2011-2012) 1ST SEM ATTY. GUTTIEREZ CHARM

1..Case Digest_De La Salle University v De La

Salle University Employees AssociationGR No. 109002 April 12, 2000

Facts: On December 1986, De La Salle University and De La Salle University Employees Association entered into a collective bargaining agreement with a life span of 3 years, that is, from December 23, 1986-December 22, 1989. During the freedom period, or 60 days before the expiration of the said collective bargaining agreement, the Union initiated negotiations with the University for a new collective bargaining agreement, which however, turned out to be unsuccessful, hence the Union filed a Notice of Strike with the National Conciliation and Mediation Board, National Capital Region. After several conciliation-mediation meetings, 5 out of the 11 issues raised in the Notice of Strike were resolved by the parties. A partial collective bargaining agreement was executed by the parties. On March 18, 1991, the parties entered into a Submission Agreement identifying the 6 unresolved issues. The parties appointed Buenaventura Magsalin as voluntary arbitrator. The Voluntary Arbitrator is constrained to respect the original intention of the parties, the same being not contrary to law, morals or public policy. Subsequently, both parties filed their respective motions for reconsideration which, however, were not entertained by the voluntary arbitrator.On March 5, 1993, the University filed with the Second Division of this Court a petition for certiorari with temporary restraining order and/or preliminary injunction assailing the decision of the voluntary arbitrator, as having been rendered “in excess of jurisdiction and/or grave abuse of discretion.”

Likewise, the Union also filed a petition for certiorari with the First Division. Upon motion by the Solicitor General, both petitions were consolidated and transferred to the Second Division. The Solicitor General came to the conclusion sufficient evidence to justify the Union’s proposal to consider the University and the CSB as only one entity because the latter is but a mere integral part of the university.

Hence, this petition.

Issue: Whether or not the voluntary arbitrator committed grave abuse of discretion with

respect to (1) computer operators assigned at the University’s Computer Services Center and the University’s discipline officers may be considered as confidential employees and should therefore be excluded from the bargaining unit; (2) a union shop clause should be included in the parties’ collective bargaining agreement; (3) the denial of the Union’s proposed method of laying-off employees is proper; (4) the ruling that on the basis of the University’s proposed budget, the University can no longer be required to grant a second round of wage increases for the school years 1991-92; (5) the denial of the Union’s proposals on the deloading of the union president is proper; (6) the finding that the mulit-sectoral committee is the legitimate group which determines the annual salary increases; and (7) the ruling that 70% share in the incremental tuition proceeds is the only source of salary increases and fringe benefits of the employees is proper.

Held: The petitions in the consolidated cases are partially granted. On the first issue, the Court agrees with the Solicitor General that the express exclusion of the computer operators and discipline officers from the bargaining unit of rank-and-file employees in the 1986 collective bargaining agreement does not bar any re-negotiation for the future inclusion of the said employees in the bargaining unit. On the second issue, the right to join a labor organization should carry with it the corollary right not to join the same. On the third issue, the Supreme Court affirms the ruling of the voluntary arbitrator for the inclusion of a union shop provision in addition to the existing maintenance of membership clause in the collective bargaining agreement. The right to refrain from joining labor organizations recognized by Section 3 of the Industrial Peace Act is however limited. The legal protection granted to such right to refrain from joining is withdrawn by operation of law, where a labor union and an employer have agreed on a closed shop, by virtue of which the employer may employ only members of the collective bargaining union, and the employees must continue to be members of the union for the duration of the contract in order to keep their jobs. On the fourth issue, the university can no longer be required to grant a second round of wage increases for the school years 1991-9222 and 1992-93 and charge the same to the incremental proceeds. The voluntary arbitrator


committed grave abuse of discretion amounting to lack of excess of jurisdiction. On the fifth issue, the Supreme Court agrees with the voluntary arbitrator’s rejection of the said demands, there being no justifiable reason for the granting of the same. On the sixth issue, the Court finds that the voluntary arbitrator did not gravely abuse his discretion on the matter. It appears that during the parties’ negotiations for a new collective bargaining agreement, the Union demanded for a 25% and 40% salary increase for the 2nd and 3rd years. Assuming for the sake of argument that the said committee is the group responsible for determining wage increases and fringe benefits, as ruled by the voluntary arbitrator, the committee’s determination must still be based on duly audited financial statements.On the secventh issue, the Court deems that any determination of this alleged error is unnecessary and irrelevant, in view of the rulings on the fourth and preceding issues and there being no evidence presented before the voluntary arbitrator that the University held incremental tuition fee proceeds from which any wage increase or fringe benefit may be satisfied.

2.A.C. No. 4763 March 20, 2003

DR. GIL Y. GAMILLA, NORMA S. CALAGUAS, IRMA E. POTENCIANO, EDITHA OCAMPO,

LUZ DE GUZMAN, GLICERIA BALDRES, FERDINAND LIMOS, MA. LOURDES C.

MEDINA, HIDELITA GABO, CORAZON CUI, REMEDIOS T. GARCIA, RENE ARNEJO,

RENE LUIS TADLE, LAURA ABARA, PHILIP AGUINALDO, BENEDICTA ALAVA, LEONCIO

CASAL, CARMELITA ESPINA, ZENAIDA FAMORCA, CELSO NIERA, CESAR REYES, NATIVIDAD SANTOS and MAFEL YSRAEL,

complainants, vs. ATTY. EDUARDO J. MARIÑO JR., respondent.

FACTS: Sometime in 1986 respondent Atty. Mariño Jr. as president of the UST Faculty Union and other union officers entered into a CBA with the management of UST for the provision of economic benefits amounting to P35 million. The 1986 CBA expired in 1988 but efforts to forge a new one unfortunately failed. In 1989 the faculty members of UST went on strike and as a counter-measure UST terminated the employment of 16 officers and directors of the

UST Faculty Union including respondent. The administration of UST and the UST Faculty Union entered into a compromise agreement for the payment of P7M from which P5M was intended to settle the back wages and other claims of the dismissed employees who were earlier ordered reinstated by the Court, and the sum of P2M to satisfy the remaining obligations of UST under the 1986 CBA. In 1992 UST and the UST Faculty Union executed a memorandum of agreement to settle the salary increases and other benefits under the CBA effective 1988 for a total of P42M. It was agreed that the benefits accruing from 1 June 1991 to 31 October 1992 were to be taken from the sum of P42M which UST would release directly to the faculty members, while the remainder of the P42M package would be ceded by UST to the UST Faculty Union which would then disburse the balance to cover the benefits from 1 November 1992 to 31 May 1993. The memorandum of agreement also charged the amount of P2M agreed upon in the 1990 compromise agreement as well as the attorney's fees of Atty. Mariño worth P4.2M against the P42M outlay. Complainants as members of the UST Faculty Union questioned the alleged lack of transparency among the officers and directors of the union in the management and disbursement of the monetary benefits for the faculty members. Complainants filed the instant complaint for disbarment against Atty. Mariño accusing him of (a) compromising their entitlements under the 1986 CBA without the knowledge, consent or ratification of the union members, and worse, for only P2,000,000.00 when they could have received more than P9,000,000.00; (b) failing to account for the P7,000,000.00 received by him and other officers and directors in the UST Faculty Union under the 1990 compromise agreement; (c) lack of transparency in the administration and distribution of the remaining balance of the P42,000,000.00 package under the 1992 memorandum of agreement; (d) refusal to remit and account for the P4,200,000.00 in favor of the faculty members although the amount was denominated as attorney's fees.

ISSUE: Whether or not Respondent must be reprimanded from practice of law due to misconduct?

HELD: There are ethical lapses on the part of respondent Atty. Eduardo J. Mariño Jr. in the


manner by which he secured the P7M by virtue of the compromise agreement and the P4.2 attorney's fees under the memorandum of agreement. Although the record shows that the Bureau of Labor Relations found respondent as having adequately accounted for the disbursement of the funds which the UST Faculty Union received through the series of agreements with the management of UST, the Court believes that Atty. Mariño failed to avoid conflict of interests, first, when he negotiated for the compromise agreement wherein he played the diverse roles of union president, union attorney and interested party being one of the dismissed employees seeking his own restitution, and thereafter, when he obtained the attorney's fees of P4,200,000.00 without full prior disclosure of the circumstances justifying such claim to the members of the UST Faculty Union. As one of the sixteen (16) union officers and directors seeking compensation from the University of Santo Tomas for their illegal dismissal, respondent was involved in obvious conflict of interests when in addition he chose to act as concurrent lawyer and president of the UST Faculty Union in forging the compromise agreement. The test of conflict of interest among lawyers is "whether the acceptance of a new relation will prevent an attorney from the full discharge of his duty of undivided fidelity and loyalty to his client or invite suspicion of unfaithfulness or double-dealing in the performance thereof."15 In the same manner, it is undoubtedly a conflict of interests for an attorney to put himself in a position where self-interest tempts, or worse, actually impels him to do less than his best for his client. Thus it has been held that an attorney or any other person occupying fiduciary relations respecting property or persons is utterly disabled from acquiring for his own benefit the property committed to his custody for management.16 This rule is entirely independent of whether fraud has intervened as in fact no fraud need be shown; no excuse will be heard from an attorney because the rule stands on the moral obligation to refrain from placing oneself in positions that ordinarily excite conflict between self-interest and integrity. Necessarily, a lawyer cannot continue representing a client in an action or any proceeding against a party even with the client's consent after the lawyer brings suit in his own behalf against the same defendant if it is uncertain whether the defendant will be able to satisfy both judgments.

No doubt, a lawyer is not authorized to have financial stakes in the subject matter of the suit brought in behalf of his client.

3.

STA. LUCIA EAST COMMERCIAL CORP., petitioner, vs. HON. SECRETARY OF LABOR AND EMPLOYMENT and STA. LUCIA EAST

COMMERCIAL CORP. WORKERS ASSOCIATION, respondent.

FACTS: Confederated Labor Union of the Philippines (CLUP), in behalf of its chartered local, instituted a petition for certification election among the regular rank-and-file employees of Sta. Lucia East Commercial Corp. and its Affiliates. Med-Arbiter Bactin ordered the dismissal of the petition due to inappropriateness of the bargaining unit. CLUP-SLECC and its Affiliates Workers Union then reorganized itself and re-registered as CLUP-Sta. Lucia East Commercial Corporation Workers Association (CLUP-SLECCWA), limiting its membership to the rank-and-file employees of Sta. Lucia East Commercial Corporation. CLUP-SLECCWA then filed the instant petition. It alleged that SLECC employs about 115 employees and that more than 20% of employees belonging to the rank-and-file category are its members. CLUP-SLECCWA claimed that no certification election has been held among them within the last 12 months prior to the filing of the petition, and while there is another union registered covering the same employees, namely SMSLEC, it has not been recognized as the exclusive bargaining agent of SLECC’s employees. Subsequently, SLECC filed a motion to dismiss the petition. It averred that it has voluntarily recognized SMSLEC as the exclusive bargaining agent of its regular rank-and-file employees, and that collective bargaining negotiations already commenced between them. Then a CBA between SMSLEC and SLECC was ratified by its rank-and-file employees and registered with DOLE.

ISSUE: Whether or not certification election must be conducted in the SLECC?

HELD: Article 212(g) of the Labor Code defines a labor organization as “any union or association of employees which exists in whole or in part for the purpose of collective bargaining or of dealing with employers concerning terms and conditions of employment.” Upon compliance with all the


documentary requirements, the Regional Office or Bureau shall issue in favor of the applicant labor organization a certificate indicating that it is included in the roster of legitimate labor organizations. Any applicant labor organization shall acquire legal personality and shall be entitled to the rights and privileges granted by law to legitimate labor organizations upon issuance of the certificate of registration. The concepts of a union and of a legitimate labor organization are different from, but related to, the concept of a bargaining unit. A bargaining unit is a “group of employees of a given employer, comprised of all or less than all of the entire body of employees, consistent with equity to the employer, indicated to be the best suited to serve the reciprocal rights and duties of the parties under the collective bargaining provisions of the law.” However, employees in two corporations cannot be treated as a single bargaining unit even if the businesses of the two corporations are related. The inclusion in the union of disqualified employees is not among the grounds for cancellation of registration, unless such inclusion is due to misrepresentation, false statement or fraud under the circumstances enumerated in Sections (a) to (c) of Article 239 of the Labor Code.蜉[10] Thus, CLUP-SLECC and its affiliates workers union, having been validly issued a certificate of registration, should be considered as having acquired juridical personality which may not be attacked collaterally. The proper procedure for SLECC is to file a petition for cancellation of certificate of registration of CLUP-SLECC and its affiliates’ workers union and not to immediately commence voluntary recognition proceedings with SMSLEC.

WHEREFORE, petition is denied.

3. FVC Labor Union-PTGWO vs SANAMA-FVC-SIGLO

G.R. No. 176249, November 27, 2009Facts:

On December 22, 1997, the petitioner FVCLU-PTGWO – the recognized bargaining agent of the rank-and-file employees of the FVC Philippines, Incorporated – signed a five-year collective bargaining agreement with the company. The five-year CBA period was from February 1, 1998 to January 30, 2003. At the end of the 3rd year of the five-year term and pursuant to the CBA,

FVCLU-PTGWO and the company entered into the renegotiation of the CBA and modified, among other provisions, the CBA’s duration. Article XXV, Section 2 of the renegotiated CBA provides that “this re-negotiation agreement shall take effect beginning February 1, 2001 and until May 31, 2003” thus extending the original five-year period of the CBA by four (4) months. On January 21, 2003, nine (9) days before the January 30, 2003 expiration of the originally-agreed five-year CBA term (and four [4] months and nine [9] days away from the expiration of the amended CBA period), the respondent Sama-Samang Nagkakaisang Manggagawa sa FVC-Solidarity of Independent and General Labor Organizations (SANAMA-SIGLO) filed before the Department of Labor and Employment (DOLE) a petition for certification election for the same rank-and-file unit covered by the FVCLU-PTGWO CBA. FVCLU-PTGWO moved to dismiss the petition on the ground that the certification election petition was filed outside the freedom period or outside of the sixty (60) days before the expiration of the CBA on May 31, 2003.

Issue:

Was the certification election filed within the freedom period?

Ruling:

Yes. While the parties may agree to extend the CBA’s original five-year term together with all other CBA provisions, any such amendment or term in excess of five years will not carry with it a change in the union’s exclusive collective bargaining status. By express provision of Article 253-A, the exclusive bargaining status cannot go beyond five years and the representation status is a legal matter not for the workplace parties to agree upon. In other words, despite an agreement for a CBA with a life of more than five years, either as an original provision or by amendment, the bargaining union’s exclusive bargaining status is effective only for five years and can be challenged within sixty (60) days prior to the expiration of the CBA’s first five years.

In the present case, the CBA was originally signed for a period of five years, i.e., from February 1, 1998 to January 30, 2003, with a provision for the renegotiation of the CBA’s other provisions at the end of the 3rd year of the


five-year CBA term. Thus, prior to January 30, 2001 the workplace parties sat down for renegotiation but instead of confining themselves to the economic and non-economic CBA provisions, also extended the life of the CBA for another four months, i.e., from the original expiry date on January 30, 2003 to May 30, 2003.

This negotiated extension of the CBA term has no legal effect on the FVCLU-PTGWO’s exclusive bargaining representation status which remained effective only for five years ending on the original expiry date of January 30, 2003. Thus, sixty days prior to this date, or starting December 2, 2002, SANAMA-SIGLO could properly file a petition for certification election. Its petition, filed on January 21, 2003 or nine (9) days before the expiration of the CBA and of FVCLU-PTGWO’s exclusive bargaining status, was seasonably filed.

4. Mariwasa Siam Ceramics vs. Secretary of Labor and Employment, et. al.

G.R. No. 183317 December 21, 2009

Facts:

On May 2005, private respondent Samahan Ng Mga Manggagawa Sa Mariwasa Siam Ceramics, Inc. (SMMSC-Independent) was issued a Certificate of Registration as a legitimate labor organization by the Department of Labor and Employment (DOLE), Region IV-A.On June 2005, petitioner Mariwasa Siam Ceramics, Inc. filed a Petition for Cancellation of Union Registration against private respondent, claiming that the latter violated Article 234 of the Labor Code for not complying with the 20% requirement and that it committed massive fraud and misrepresentation in violation of Article 239 of the same code.

The Regional Director of DOLE IV-A issued an Order granting the petition, revoking the registration of respondent, and delisting it from the roster of active labor unions. SMMSC-Independent appealed to the Bureau of Labor Relations. BLR ruled in favor of the respondent, thus, they remain in the roster of legitimate labor organizations. The petitioner appealed and insisted that private respondent failed to comply with the 20% union membership requirement for its registration as a legitimate labor organization because of the disaffiliation from the total number of union members of 102 employees who

executed affidavits recanting their union membership. Hence, this petition for review on certiorari under Rule 45 of the Rules of Court.

Issues:

1) Was there failure to comply with the 20% union membership requirement?

2) Did the withdrawal of 31 union members affect the petition for certification election insofar as the 30% requirement is concerned?

Ruling:No.While it is true that the withdrawal of support may be considered as a resignation from the union, the fact remains that at the time of the union’s application for registration, the affiants were members of respondent and they comprised more than the required 20% membership for purposes of registration as a labor union. Article 234 of the Labor Code merely requires a 20% minimum membership during the application for union registration. It does not mandate that a union must maintain the 20% minimum membership requirement all throughout its existence.

On the second issue, it appears undisputedly that the 31 union members had withdrawn their support to the petition before the filing of said petition. The distinction must be that withdrawals made before the filing of the petition are presumed voluntary unless there is convincing proof to the contrary, whereas withdrawals made after the filing of the petition are deemed involuntary. Therefore, following jurisprudence, the employees were not totally free from the employer’s pressure and so the voluntariness of the employees’ execution of the affidavits becomes suspect.

The cancellation of a union’s registration doubtless has an impairing dimension on the right of labor to self-organization. For fraud and misrepresentation to be grounds for cancellation of union registration under the Labor Code, the nature of the fraud and misrepresentation must be grave and compelling enough to vitiate the consent of a majority of union members.

5. HOTEL ENTERPRISES OF THE PHILIPPINES, INC. (HEPI), owner of Hyatt Regency Manila,


Petitioner - versus - SAMAHAN NG MGA MANGGAGAWA SA HYATT-NATIONAL

UNION OF WORKERS IN THE HOTEL AND RESTAURANT AND ALLIED INDUSTRIES

(SAMASAH-NUWHRAIN),NACHURA, J.:

The Constitution affords full protection to labor, but the policy is not to be blindly followed at the expense of capital. Always, the interests of both sides must be balanced in light of the evidence adduced and the peculiar circumstances surrounding each case.

FACTS:

Respondent Union is the certified collective bargaining agent of the rank-and-file employees of Hyatt Regency Manila, a hotel owned by petitioner Hotel Enterprises of the Philippines, Inc. (HEPI).

In 2001, HEPIs hotel business suffered a slump due to the local and international economic slowdown, aggravated by the events of September 11, 2001 in the United States. An audited financial report made by Sycip Gorres Velayo (SGV) & Co. on January 28, 2002 indicated that the hotel suffered a gross operating loss amounting to P16,137,217.00 in 2001,[5] a staggering decline compared to its P48,608,612.00 gross operating profit[6] in year 2000.[7] According to petitioner, the management initially decided to cost-cut by implementing energy-saving schemes: prioritizing acquisitions/purchases; reducing work weeks in some of the hotels departments; directing the employees to avail of their vacation leaves; and imposing a moratorium on hiring employees for the year 2001 whenever practicable.[8]

Meanwhile, on August 31, 2001, the Union filed a notice of strike due to a bargaining deadlock before the National Conciliation Mediation Board (NCMB), docketed as NCMB-NCR-NS 08-253-01.[9] In the course of the proceedings, HEPI submitted its economic proposals for the rank-and-file employees covering the years 2001, 2002, and 2003. The proposal included manning and staffing standards for the 248 regular rank-and-file employees. The Union accepted the economic proposals. Hence, a new collective

bargaining agreement (CBA) was signed on November 21, 2001, adopting the manning standards for the 248 rank-and-file employees.[10]

Then, on December 21, 2001, HEPI issued a memorandum offering a Special Limited Voluntary Resignation/Retirement Program (SLVRRP) to its regular employees. Employees who were qualified to resign or retire were given separation packages based on the number of years of service.[11] The vacant positions, as well as the regular positions vacated, were later filled up with contractual personnel and agency employees.[12]

Subsequently, on January 21, 2002, petitioner decided to implement a downsizing scheme after studying the operating costs of its different divisions to determine the areas where it could obtain significant savings. It found that the hotel could save on costs if certain jobs, such as engineering services, messengerial/courier services, janitorial and laundry services, and operation of the employees cafeteria, which by their nature were contractable pursuant to existing laws and jurisprudence, were abolished and contracted out to independent job contractors

On April 12, 2002, the Union filed a notice of strike based on unfair labor practice (ULP) against HEPI.

On July 20, 2004, the CA promulgated the assailed Decision,[44] reversing the resolution of the NLRC and reinstating the October 30, 2002 decision of the Labor Arbiter which declared the strike valid. The CA also ordered the reinstatement of the 48 terminated employees on account of the hotel managements illegal redundancy and retrenchment scheme and the payment of their backwages from the time they were illegally dismissed until their actual reinstatement.[45] HEPI moved for reconsideration but the same was denied for lack of merit.[46]

Hence, this petition.


The issue boils down to whether the CAs decision, reversing the NLRC ruling, is in accordance with law and established facts.

We answer in the negative.

ISSUE: To resolve the correlative issues (i.e., the validity of the strike; the charges of ULP against petitioner; the propriety of petitioners act of hiring contractual employees from employment agencies; and the entitlement of Union officers and terminated employees to reinstatement, backwages and strike duration pay), we answer first the most basic question: Was petitioners downsizing scheme valid?

HELD: ART. 283. 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 worker and the [Department] of Labor and Employment at least one (1) 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 (1) month pay or to at least one (1) month pay for every year of service, whichever is higher. In case of retrenchment to prevent losses and in cases of closures 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 (1) month pay or at least one-half (1/2) month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be considered as one (1) whole year.

Retrenchment is the reduction of work personnel usually due to poor financial returns, aimed to cut down costs for operation particularly on salaries and wages.[47] Redundancy, on the other hand, exists where the number of employees is in excess of what is reasonably demanded by the actual requirements of the enterprise.[48] Both are forms of downsizing and are often resorted to by the employer during periods of business recession, industrial depression, or seasonal fluctuations, and during lulls in production occasioned by lack of orders,

shortage of materials, conversion of the plant for a new production program, or introduction of new methods or more efficient machinery or automation.[49] Retrenchment and redundancy are valid management prerogatives, provided they are done in good faith and the employer faithfully complies with the substantive and procedural requirements laid down by law and jurisprudence.[50] chanroblesvirtuallawlibrary

For a valid retrenchment, the following requisites must be complied with: (1) the retrenchment is necessary to prevent losses and such losses are proven; (2) written notice to the employees and to the DOLE at least one month prior to the intended date of retrenchment; and (3) payment of separation pay equivalent to one-month pay or at least one-half month pay for every year of service, whichever is higher.[51] chanroblesvirtuallawlibrary

In case of redundancy, the employer must prove that: (1) a written notice was served on both the employees and the DOLE at least one month prior to the intended date of retrenchment; (2) separation pay equivalent to at least one month pay or at least one month pay for every year of service, whichever is higher, has been paid; (3) good faith in abolishing the redundant positions; and (4) adoption of fair and reasonable criteria in ascertaining which positions are to be declared redundant and accordingly abolished.[52] chanroblesvirtuallawlibraryIt is the employer who bears the onus of proving compliance with these requirements, retrenchment and redundancy being in the nature of affirmative defenses.[53] Otherwise, the dismissal is not justified.[54]

6.Case Digest_Jackbilt Industries Inc v Jackbilt Employees Workers Union-NAFLU-

KMU GR No. 171618-19 March 20, 2009Facts: Due to the adverse effects of the Asian economics crisis on the construction industry beginning 1997 petitioner decided to temporarily stop its business, compelling most of its employees to go on leave for 6 months. Respondent immediately protested the temporary shutdown. Because its collective bargaining agreement with petition was expiring during the period of the shutdown, respondent claimed that petition halted production to avoid its duty to bargain collectively. Respondent went


on strike. Petitioner filed a petition for injunction with a prayer for the issuance of a TRO in the NLRC. It sought to enjoin respondb ent from obstructing free entry to and exit from its production facility. On April 14, 1998, the NLRC issued a TRO directing the respondents to refrain from preventing access to petitioner’s property. The NLRC ordered the issuance of a writ of preliminary injunction. Meanwhile, petitioner sent individual memoranda to the officers and members of respondent who participated in the strike ordering them to explain why they should not be dismissed for committing illegal acts in the course of a strike. Aggrieved, respondent filed complaints for illegal lockout, runaway shop and damages, unfair labor practice, illegal dismissal and attorney’s fees, and refusal to bargain on behalf of its officers and members against petitioner and its corporate officers. In a decision, the labor arbiter dismissed the complaints for illegal lockout and unfair labor practice for lack of merit. However, because petitioner did not file a petition to declare the strike illegal, it was found guilty of illegal dismissal. On appeal, it modified the decision of the labor arbiter. Both petitioner and respondent moved for reconsideration but they were both denied for lack of merit. The petitioner assailed the decision of the NLRC via a petition for certiorari, but the CA dismissed the petition. Thus, this recourse.

Issue: Whether or not the filing of a petition with the labor arbiter to declare a strike illegal is a condition sine qua non for the valid termination of employees who commit an illegal act in the course of such strike

Held: The petition is granted. Article 264(e) of the Labor Code prohibits any person engaged in picketing from obstructing the free ingress to and egress from the employer’s premises. Since respondent was found by the NLRC to have prevented the free entry into and exit vehicles from petitioner’s compound, respondent’s officers and employees clearly committed illegal acts in the course of the March 9, 1998 strike. We uphold the legality of the dismissal of respondent’s officers and employees. Article 264 of the Labor Code further provides that an employer may terminate employees found to have committed illegal acts in the course of a strike.

7.G.R. No. 168406 July 13, 2009CLUB FILIPINO, INC. and ATTY. ROBERTO

F. DE LEON, Petitioners, vs. BENJAMIN BAUTISTA, RONIE SUALOG, JOEL CALIDA,

JOHNNY ARINTO AND ROBERTO DE GUZMAN, Respondents.

FACTS: Petitioner Club Filipino, Inc. is a non-stock, non profit corporation duly formed, organized and existing under Philippine laws, with petitioner Atty. Roberto F. de Leon as its president. Respondents Ronnie Sualog, Joel Calida, Johnny Arinto and Roberto de Guzman, on the other hand, were former officers and members of the Club Filipino Employees Association. The union and the company had a CBA which expired on May 31, 2000. Prior to the expiration of the CBA and within the freedom period, the union made several demands for negotiation. No negotiations, however, took place for various reasons proffered by the company, among them the illness of the chairman of the management panel. The union then filed a notice of strike on the grounds of bargaining deadlock and failure to bargain. The company formally responded to the demands of the union when it submitted the first part of its economic counter-proposal; the second part was submitted on May 11, 2001. Meanwhile, on May 4, 2001, the union conducted a strike vote under the supervision of the DOLE. In response to the company’s counter-proposal, the union sent the company its improved proposal, but the company refused to improve on its offer. This prompted the union to stage a strike on May 26, 2001 on the ground of a CBA bargaining deadlock. The company then filed a petition to declare the strike illegal.

ISSUE: whether or not the strike staged by respondents was legal?

HELD: Rule XXII, Section 4 of the Omnibus Rules Implementing the Labor Code states: In cases of bargaining deadlocks, the notice shall, as far as practicable, further state the unresolved issues in the bargaining negotiations and be accompanied by the written proposals of the union, the counter-proposals of the employer and the proof of a request for conference to settle differences. In cases of unfair labor practices, the notice shall, as far as practicable, state the acts complained of, and efforts taken to resolve the dispute amicably. In the instant case, the union cannot be faulted for its omission of not


attaching the counter-proposal of the company in the notice of strike it submitted to the NCMB as there was no such counter-proposal. To recall, the union filed a notice of strike on April 6, 2001 after several requests to start negotiations but it was only on April 22, 2001 when the company formally responded to the union by submitting the first part of its counter-proposal. Worse, it took the company another 3 weeks to complete it by submitting on May 11, 2001 the second part of its counter-proposal. The Implementing Rules use the words "as far as practicable." In this case, attaching the counter-proposal of the company to the notice of strike of the union was not practicable. Indeed, compliance with the requirement was impossible because no counter-proposal existed at the time the union filed a notice of strike. The law does not exact compliance with the impossible. Nemo tenetur ad impossibile.

Moreover, it is hornbook doctrine that a mere finding of the illegality of the strike should not be automatically followed by the wholesale dismissal of the strikers from employment. The law is clear: Any union officer who knowingly participates in an illegal strike and any worker or union officer who knowingly participates in the commission of illegal acts during a strike may be declared to have lost his employment status. Note that the verb "participates" is preceded by the adverb "knowingly." This reflects the intent of the legislature to require "knowledge" as a condition sine qua non before a union officer can be dismissed from employment for participating in an illegal strike. The provision is worded in such a way as to make it very difficult for employers to circumvent the law by arbitrarily dismissing employees in the guise of exercising management prerogative. This is but one aspect of the State’s constitutional and statutory mandate to protect the rights of employees to self-organization.

8.THE HERITAGE HOTEL MANILA (OWNED AND OPERATED BY GRAND PLAZA HOTEL

CORPORATION) Petitioner, vs. PINAG-ISANG GALING AT LAKAS NG MGA

MANGGAGAWA SA HERITAGE MANILA (PIGLAS-HERITAGE), Respondent

This case is about a company’s objections to the registration of its rank and file union for non-

compliance with the requirements of its registration.

FACTS: Sometime in 2000, certain rank and file employees of petitioner Heritage Hotel Manila (petitioner company) formed the "Heritage Hotel Employees Union" (the HHE union). The Department of Labor and Employment-National Capital Region (DOLE-NCR) later issued a certificate of registration to this union. Subsequently, the HHE union filed a petition for certification election that petitioner company opposed alleging that the HHE union misrepresented itself to be an independent union, when it was, in truth, a local chapter of the National Union of Workers in Hotel and Restaurant and Allied Industries (NUWHRAIN) and the company also filed a petition for the cancellation of the HHE union’s registration certificate.

The Med-Arbiter granted the HHE union’s petition for certification election. Petitioner company appealed it and filed a motion for reconsideration which was both denied respectively, prompting it to file a petitioin for certiorari with the CA.On October 12, 2001 the Court of Appeals issued a writ of injunction against the holding of the HHE union’s certification election, effective until the petition for cancellation of that union’s registration shall have been resolved with finality. The decision of the Court of Appeals became final when the HHE union withdrew the petition for review that it filed with this Court.

On December 10, 2003 certain rank and file employees of petitioner company held a meeting and formed another union, the respondent Pinag-Isang Galing at Lakas ng mga Manggagawa sa Heritage Manila (the PIGLAS union). This union applied for registration with the DOLE-NCR and got its registration certificate on February 9, 2004. Two months later, the members of the first union, the HHE union, adopted a resolution for its dissolution. The HHE union then filed a petition for cancellation of its union registration. On September 4, 2004 respondent PIGLAS union filed a petition for certification election that petitioner company also opposed, alleging that the new union’s officers and members were also those who comprised the old union. According to the company, the employees involved formed the PIGLAS union to circumvent the Court of Appeals’ injunction against the holding of the


certification election sought by the former union. Despite the company’s opposition, however, the Med-Arbiter granted the petition for certification election. On December 6, 2004, petitioner Company filed a petition to cancel the union registration of respondent PIGLAS union. The company claimed that the union made fatal misrepresentation in its application for union registration and committed “dual unionism" which is a ground for canceling a union’s registration.

ISSUE: Whether or not the new Union can have a valid certification election?

RULING: The charge that a labor organization committed fraud and misrepresentation in securing its registration is a serious charge and deserves close scrutiny. Once such charge is proved, the labor union acquires none of the rights accorded to registered organizations. Here, the discrepancies in the number of union members or employees stated in the various supporting documents that respondent PIGLAS union submitted to labor authorities can be explained. While it appears in the minutes of the December 10, 2003 organizational meeting that only 90 employees responded to the roll call at the beginning, it cannot be assumed that such number could not grow to 128 as reflected on the signature sheet for attendance. There is also nothing essentially mysterious or irregular about the fact that only 127 members ratified the union’s constitution and by-laws when 128 signed the attendance sheet. It cannot be assumed that all those who attended approved of the constitution and by-laws. Any member had the right to hold out and refrain from ratifying those documents or to simply ignore the process. At any rate, the Labor Code and its implementing rules do not require that the number of members appearing on the documents in question should completely dovetail. For as long as the documents and signatures are shown to be genuine and regular and the constitution and by-laws democratically ratified, the union is deemed to have complied with registration requirements. Petitioner company claims that respondent PIGLAS union was required to submit the names of all its members comprising at least 20 percent of the employees in the bargaining unit. Yet the list it submitted named only 100 members notwithstanding that the signature and attendance sheets reflected a membership of 127 or 128 employees. This omission, said the

company, amounted to material misrepresentation that warranted the cancellation of the union’s registration.But, as the labor authorities held, this discrepancy is immaterial. A comparison of the documents shows that, except for six members, the names found in the subject list are also in the attendance and signature sheets. Notably, the bargaining unit that respondent PIGLAS union sought to represent consisted of 250 employees. Only 20 percent of this number or 50 employees were required to unionize. Here, the union more than complied with such requirement. And last, the fact that some of respondent PIGLAS union’s members were also members of the old rank and file union, the HHE union, is not a ground for canceling the new union’s registration. The right of any person to join an organization also includes the right to leave that organization and join another one.

9. G.R. Nos. 174040-41 : September 22, 2010

INSULAR HOTEL EMPLOYEES UNION-NFL, Petitioner, vs. WATERFRONT INSULAR

HOTEL DAVAO, Respondent.PERALTA, J.:

FACTS: On November 6, 2000, respondent Waterfront Insular Hotel Davao (respondent) sent the Department of Labor and Employment (DOLE), Region XI, Davao City, a Notice of Suspension of Operations5cralaw notifying the same that it will suspend its operations for a period of six months due to severe and serious business losses. In said notice, respondent assured the DOLE that if the company could not resume its operations within the six-month period, the company would pay the affected employees all the benefits legally due to them.

During the period of the suspension, Domy R. Rojas (Rojas), the President of Davao Insular Hotel Free Employees Union (DIHFEU-NFL), the recognized labor organization in Waterfront Davao, sent respondent a number of letters asking management to reconsider its decision.

After series of negotiations, respondent and DIHFEU-NFL, represented by its President, Rojas, and Vice-Presidents, Exequiel J. Varela Jr. and Avelino C. Bation, Jr., signed a Memorandum of Agreement14cralaw (MOA) wherein respondent agreed to re-open the hotel subject


to certain concessions offered by DIHFEU-NFL in its Manifesto.

Accordingly, respondent downsized its manpower structure to 100 rank-and-file employees as set forth in the terms of the MOA. Moreover, as agreed upon in the MOA, a new pay scale was also prepared by respondent.

The retained employees individually signed a "Reconfirmation of Employment"15cralaw which embodied the new terms and conditions of their continued employment. Each employee was assisted by Rojas who also signed the document.

On June 15, 2001, respondent resumed its business operations.

Issue: whether or not a union is prohibited from offering and agreeing to reduce wages and benefits of the employees?

Held:Article 100 of the Labor Code provides:

PROHIBITION AGAINST ELIMINATION OR DIMINUTION OF BENEFITS- Nothing in this Book shall be construed to eliminate or in any way diminish supplements, or other employee benefits being enjoyed at the time of the promulgation of this Code.

Clearly, the prohibition against elimination or diminution of benefits set out in Article 100 of the Labor Code is specifically concerned with benefits already enjoyed at the time of the promulgation of the Labor Code. Article 100 does not, in other words, purport to apply to situations arising after the promulgation date of the Labor Code x x

Even assuming arguendo that Article 100 applies to the case at bar, this Court agrees with respondent that the same does not prohibit a union from offering and agreeing to reduce wages and benefits of the employees. In Rivera v. Espiritu, this Court ruled that the right to free collective bargaining, after all, includes the right to suspend it, thus:

A CBA is "a contract executed upon request of either the employer or the exclusive bargaining representative incorporating the agreement reached after negotiations with respect to wages, hours of work and all other terms and

conditions of employment, including proposals for adjusting any grievances or questions arising under such agreement." The primary purpose of a CBA is the stabilization of labor-management relations in order to create a climate of a sound and stable industrial peace. In construing a CBA, the courts must be practical and realistic and give due consideration to the context in which it is negotiated and the purpose which it is intended to serve.

10.G.R. No. 159460 : November 15, 2010

SOLIDBANK CORPORATION (now known as FIRST METRO INVESTMENT

CORPORATION), Petitioner, v. ERNESTO U. GAMIER, ELENA R. CONDEVILLAMAR,

JANICE L. ARRIOLA and OPHELIA C. DE GUZMAN, Respondents.

Facts: Sometime in October 1999, petitioner Solidbank and respondent Solidbank Employees’ Union (Union) were set to renegotiate the economic provisions of their 1997-2001 Collective Bargaining Agreement (CBA) to cover the remaining two years thereof. Negotiations commenced on November 17, 1999 but seeing that an agreement was unlikely, the Union declared a deadlock on December 22, 1999 and filed a Notice of Strike on December 29, 1999.[2] During the collective bargaining negotiations, some Union members staged a series of mass actions. In view of the impending actual strike, then Secretary of Labor and Employment Bienvenido E. Laguesma assumed jurisdiction over the labor dispute, pursuant to Article 263 (g) of the Labor Code, as amended. The assumption order dated January 18, 2000 directed the parties “to cease and desist from committing any and all acts that might exacerbate the situation.”[3]

Was private respondents’ act of massing in front of the DOLE Building calculated by them to cause work stoppage, or were they merely airing their grievance over the ruling of the Labor Secretary in exercise of their civil liberties? Who can divine the motives of their hearts? But when two different interpretations are possible, the courts must lean towards that which gives meaning and vitality to the Bill of Rights. x x x[37]

On April 2, 2003, petitioners filed a motion for reconsideration but this was denied by the CA in its Resolution[38] dated August 7, 2003.


Petitioners argued that the CA erred in holding that the mass action of April 3, 2000 infront of the Office of the Secretary of Labor was not a strike considering that it had all the elements of a strike and the respondents judicially admitted that it was a strike. The CA deemed the mass action as an exercise of the respondents’ freedom of expression but such constitutional right is not absolute and subject to certain well-defined exceptions. Moreover, a mass action of this nature is considered a strike and not an exercise of one’s freedom of expression, considering further that the Secretary’s Order dated January 18, 2000 is a valid exercise of police power. Petitioners assail the CA in not considering the damage and prejudice caused to the bank and its clients by respondents’ illegal acts. Respondents’ mass actions crippled banking operations. Over-the-counter transactions were greatly undermined. Checks for clearing were significantly delayed. On-line transactions were greatly hampered, causing inestimable damage to the nationwide network of automated teller machines. Respondent Union’s actions clearly belie its allegation that its mass action was merely intended to protest and express their dissatisfaction with the Secretary’s Order dated March 24, 2000.

In view of the illegal strike conducted in violation of the Secretary’s assumption order, petitioners maintain that the dismissal of respondents was not illegal, as consistently ruled by this Court in many cases. Even granting arguendo that their termination was illegal, the CA erred in ordering the reinstatement of respondents and holding that Solidbank, FMIC and Metrobank are solidarily liable to the respondents. Lastly, the CA erred in not finding that respondents were guilty of forum shopping as respondents’ claim that they did not know the Union had filed a complaint was unbelievable under the circumstances.[39]

Petitioners contend that the CA erred in ruling that the dismissal of respondents Gamier, Condevillamar, Arriola and De Guzman was illegal, considering that this was not an issue raised in the petition for certiorari before the appellate court. What was raised by petitioners was only the propriety of the award of separation

pay by the NLRC which in fact declared their dismissal to be valid and legal.

Petitioners maintain that respondents are not entitled to separation pay even if the dismissal was valid because they committed serious misconduct and/or illegal act in defying the Secretary’s assumption order. Moreover, the CA also erred in disregarding the Release, Waiver and Quitclaim executed by twenty-one (21) individual respondents who entered into a compromise agreement with Solidbank.[40]

Issues

The fundamental issues to be resolved in this controversy are: (1) whether the protest rally and concerted work abandonment/boycott staged by the respondents violated the Order dated January 18, 2000 of the Secretary of Labor; (2) whether the respondents were validly terminated; and (3) whether the respondents are entitled to separation pay or financial assistance Our Ruling

Article 212 of the Labor Code, as amended, defines strike as any temporary stoppage of work by the concerted action of employees as a result of an industrial or labor dispute. A labor dispute includes any controversy or matter concerning terms and conditions of employment or the association or representation of persons in negotiating, fixing, maintaining, changing or arranging the terms and conditions of employment, regardless of whether or not the disputants stand in the proximate relation of employers and employees.[41] The term “strike” shall comprise not only concerted work stoppages, but also slowdowns, mass leaves, sitdowns, attempts to damage, destroy or sabotage plant equipment and facilities and similar activities.[42] Thus, the fact that the conventional term “strike” was not used by the striking employees to describe their common course of action is inconsequential, since the substance of the situation, and not its appearance, will be deemed to be controlling.[43]

After a thorough review of the records, we hold that the CA patently erred in concluding that the concerted mass actions staged by respondents cannot be considered a strike but a legitimate exercise of the respondents’ right to express


their dissatisfaction with the Secretary’s resolution of the economic issues in the deadlocked CBA negotiations with petitioners. It must be stressed that the concerted action of the respondents was not limited to the protest rally infront of the DOLE Office on April 3, 2000. Respondent Union had also picketed the Head Office and Paseo de Roxas Branch. About 712 employees, including those in the provincial branches, boycotted and absented themselves from work in a concerted fashion for three continuous days that virtually paralyzed the employer’s banking operations. Considering that these mass actions stemmed from a bargaining deadlock and an order of assumption of jurisdiction had already been issued by the Secretary of Labor to avert an impending strike, there is no doubt that the concerted work abandonment/boycott was the result of a labor dispute.

11. CIRTEK EMPLOYEES LABOR UNION-FEDERATION OF FREE WORKERS,

- versus -CIRTEK ELECTRONICS, INC.,

G.R. No. 190515November 15, 2010CARPIO MORALES, J.:

FACTS: Cirtek Electronics, Inc. (respondent), an electronics and semi-conductor firm situated inside the Laguna Technopark, had an existing Collective Bargaining Agreement (CBA) with Cirtek Employees Labor Union-Federation of Free Workers (petitioner) for the period January 1, 2001 up to December 31, 2005. Prior to the 3rd year of the CBA, the parties renegotiated its economic provisions but failed to reach a settlement, particularly on the issue of wage increases. Petitioner thereupon declared a bargaining deadlock and filed a Notice of Strike with the National Conciliation and Mediation Board-Regional Office No. IV (NCMB-RO IV) on April 26, 2004. Respondent, upon the other hand, filed a Notice of Lockout on June 16, 2004. While the conciliation proceedings were ongoing, respondent placed seven union officers including the President, a Vice President, the Secretary and the Chairman of the Board of Directors under preventive suspension for allegedly spearheading a boycott of overtime work. The officers were eventually dismissed from employment, prompting petitioner to file another Notice of Strike which was, after conciliation

meetings, converted to a voluntary arbitration case. The dismissal of the officers was later found to be legal, hence, petitioner appealed. In the meantime, as amicable settlement of the CBA was deadlocked, petitioner went on strike on June 20, 2005. By Order[1] dated June 23, 2005, the Secretary of Labor assumed jurisdiction over the controversy and issued a Return to Work Order which was complied with. Before the Secretary of Labor could rule on the controversy, respondent created a Labor Management Council (LMC) through which it concluded with the remaining officers of petitioner a Memorandum of Agreement (MOA)[2] providing for daily wage increases of P6.00 per day effective January 1, 2004 and P9.00 per day effective January 1, 2005. Petitioner submitted the MOA via Motion and Manifestation[3] to the Secretary of Labor, alleging that the remaining officers signed the MOA under respondent’s assurance that should the Secretary order a higher award of wage increase, respondent would comply. By Decision[7] of September 24, 2009, the appellate court ruled in favor of respondent and accordingly set aside the Decision of the Secretary of Labor. It held that the Secretary of Labor gravely abused his discretion in not respecting the MOA. It did not give credence to the minutes of the meeting[8] that attended the forging of the MOA as it was not verified, nor to the “Paliwanag”[9] submitted by respondent union members explaining why they signed the MOA as it was not notarized.

ISSUES:

The relevant issues for resolution are 1) whether the Secretary of Labor is authorized to give an award higher than that agreed upon in the MOA, and 2) whether the MOA was entered into and ratified by the remaining officers of petitioner under the condition, which was not incorporated in the MOA, that respondent would honor the Secretary of Labor’s award in the event that it is higher.

HELD: The Court resolves both issues in the affirmative.

It is well-settled that the Secretary of Labor, in the exercise of his power to assume jurisdiction under Art. 263 (g)[11] of the Labor Code, may resolve all issues involved in the


controversy including the award of wage increases and benefits.[12] While an arbitral award cannot per se be categorized as an agreement voluntarily entered into by the parties because it requires the intervention and imposing power of the State thru the Secretary of Labor when he assumes jurisdiction, the arbitral award can be considered an approximation of a collective bargaining agreement which would otherwise have been entered into by the parties, hence, it has the force and effect of a valid contract obligation.[13]

While a contract constitutes the law between the parties, this is so in the present case with respect to the CBA, not to the MOA in which even the union’s signatories had expressed reservations thereto. But even assuming arguendo that the MOA is treated as a new CBA, since it is imbued with public interest, it must be construed liberally and yield to the common good. While the terms and conditions of a CBA constitute the law between the parties, it is not, however, an ordinary contract to which is applied the principles of law governing ordinary contracts. A CBA, as a labor contract within the contemplation of Article 1700 of the Civil Code of the Philippines which governs the relations between labor and capital, is not merely contractual in nature but impressed with public interest, thus, it must yield to the common good. As such, it must be construed liberally rather than narrowly and technically, and the courts must place a practical and realistic construction upon it, giving due consideration to the context in which it is negotiated and purpose which it is intended to serve.[17] (emphasis and underscoring supplied) WHEREFORE, the petition is GRANTED. The Decision dated September 24, 2009 and the Resolution dated December 2, 2009 of the Court of Appeals are REVERSED and SET ASIDE and the Order dated March 16, 2006 and Resolution dated August 12, 2008 of the Secretary of Labor are REINSTATED.

12.G.R. No. 162025 : August 3, 2010

TUNAY NA PAGKAKAISA NG MANGGAGAWA SA ASIA BREWERY,

Petitioner, vs. ASIA BREWERY, INC., Respondent.

FACTS:

Respondent Asia Brewery, Inc. (ABI) is engaged in the manufacture, sale and distribution of beer, shandy, bottled water and glass products. ABI entered into a Collective Bargaining Agreement (CBA),4cra1aw effective for five (5) years from August 1, 1997 to July 31, 2002, with Bisig at Lakas ng mga Manggagawa sa Asia-Independent (BLMA-INDEPENDENT), the exclusive bargaining representative of ABI's rank-and-file employees. On October 3, 2000, ABI and BLMA-INDEPENDENT signed a renegotiated CBA effective from August 1, 2000 to 31 July 2003.

, a dispute arose when ABI's management stopped deducting union dues from eighty-one (81) employees, believing that their membership in BLMA-INDEPENDENT violated the CBA. Eighteen (18) of these affected employees are QA Sampling Inspectors/Inspectresses and Machine Gauge Technician who formed part of the Quality Control Staff. Twenty (20) checkers are assigned at the Materials Department of the Administration Division, Full Goods Department of the Brewery Division and Packaging Division. The rest are secretaries/clerks directly under their respective division managers.7cra1aw

BLMA-INDEPENDENT claimed that ABI's actions restrained the employees' right to self-organization and brought the matter to the grievance machinery. As the parties failed to amicably settle the controversy, BLMA-INDEPENDENT lodged a complaint before the National Conciliation and Mediation Board (NCMB). The parties eventually agreed to submit the case for arbitration to resolve the issue of "[w]hether or not there is restraint to employees in the exercise of their right to self-organization."8cra1aw

In his Decision, Voluntary Arbitrator Bienvenido Devera sustained the BLMA-INDEPENDENT after finding that the records submitted by ABI showed that the positions of the subject employees qualify under the rank-and-file category because their functions are merely routinary and clerical. He noted that the positions occupied by the checkers and secretaries/clerks in the different divisions are not managerial or supervisory, as evident from


the duties and responsibilities assigned to them. With respect to QA Sampling Inspectors/Inspectresses and Machine Gauge Technician, he ruled that ABI failed to establish with sufficient clarity their basic functions as to consider them Quality Control Staff who were excluded from the coverage of the CBA. Accordingly, the subject employees were declared eligible for inclusion within the bargaining unit represented by BLMA-INDEPENDENT.9cra1aw

On appeal, the CA reversed the Voluntary Arbitrator

ISSUE: THE COURT OF APPEALS ERRED IN RULING THAT THE 81 EMPLOYEES ARE EXCLUDED FROM AND ARE NOT ELIGIBLE FOR INCLUSION IN THE BARGAINING UNIT AS DEFINED IN SECTION 2, ARTICLE 1 OF THE CBA[;]

HELD: Although Article 245 of the Labor Code limits the ineligibility to join, form and assist any labor organization to managerial employees, jurisprudence has extended this prohibition to confidential employees or those who by reason of their positions or nature of work are required to assist or act in a fiduciary manner to managerial employees and hence, are likewise privy to sensitive and highly confidential records.14cra1aw Confidential employees are thus excluded from the rank-and-file bargaining unit. The rationale for their separate category and disqualification to join any labor organization is similar to the inhibition for managerial employees because if allowed to be affiliated with a Union, the latter might not be assured of their loyalty in view of evident conflict of interests and the Union can also become company-denominated with the presence of managerial employees in the Union membership.15cra1aw Having access to confidential information, confidential employees may also become the source of undue advantage. Said employees may act as a spy or spies of either party to a collective bargaining agreement.16cra1aw

Unfair labor practice refers to "acts that violate the workers' right to organize." The prohibited acts are related to the workers' right to self organization and to the observance of a CBA. For a charge of unfair labor practice to prosper, it

must be shown that ABI was motivated by ill will, "bad faith, or fraud, or was oppressive to labor, or done in a manner contrary to morals, good customs, or public policy, and, of course, that social humiliation, wounded feelings or grave anxiety resulted x x x"28cra1aw from ABI's act in discontinuing the union dues deduction from those employees it believed were excluded by the CBA. Considering that the herein dispute arose from a simple disagreement in the interpretation of the CBA provision on excluded employees from the bargaining unit, respondent cannot be said to have committed unfair labor practice that restrained its employees in the exercise of their right to self-organization, nor have thereby demonstrated an anti-union stance.

WHEREFORE, the petition is GRANTED. The Decision dated November 22, 2002 and Resolution dated January 28, 2004 of the Court of Appeals in CA-G.R. SP No. 55578 are hereby REVERSED and SET ASIDE. The checkers and secretaries/clerks of respondent company are hereby declared rank-and-file employees who are eligible to join the Union of the rank-and-file employees.

13.Picop Resources Incorporated (PRI) v.

Tañeca, G.R. No. 160828, August 9, 2010

FACTS:

On February 13, 2001, respondents Anacleto Tañeca, Loreto Uriarte, Joseph Balgoa, Jaime Campos, Geremias Tato, Martiniano Magayon, Manuel Abucay and fourteen (14) others filed a Complaint for unfair labor practice, illegal dismissal and money claims against petitioner PICOP Resources, Incorporated (PRI), Wilfredo Fuentes (in his capacity as PRI's Vice President/Resident Manager), Atty. Romero Boniel (in his capacity as PRI's Manager of Legal/Labor), Southern Philippines Federation of Labor (SPFL), Atty. Wilbur T. Fuentes (in his capacity as Secretary General of SPFL), Pascasio Trugillo (in his capacity as Local President of Nagkahiusang Mamumuo sa PICOP Resources, Inc.- SPFL [NAMAPRI-SPFL]) and Atty. Proculo Fuentes, Jr.[6] (in his capacity as National President of SPFL).

Respondents were regular rank-and-file employees of PRI and bona fide members of Nagkahiusang Mamumuo sa PRI Southern


Philippines Federation of Labor (NAMAPRI-SPFL), which is the collective bargaining agent for the rank-and-file employees of petitioner PRI.

PRI has a collective bargaining agreement (CBA) with NAMAPRI-SPFL for a period of five (5) years from May 22, 1995 until May 22, 2000.

On October 16, 2000, PRI served notices of termination for causes to the 31 out of the 46 employees whom NAMAPRIL-SPFL sought to be terminated on the ground of “acts of disloyalty” committed against it when respondents allegedly supported and signed the Petition for Certification Election of FFW before the “freedom period” during the effectivity of the CBA. A Notice dated October 21, 2000 was also served on the Department of Labor and Employment Office (DOLE), Caraga Region.

Respondents then accused PRI of Unfair Labor Practice punishable under Article 248 (a), (b), (c), (d) and (e) of the Labor Code, while Atty. Fuentes and Wilbur T. Fuentes and Pascasio Trujillo were accused of violating Article 248 (a) and (b) of the Labor Code.

ISSUES:I

WHETHER AN EXISTING COLLECTIVELY (sic) BARGAINING AGREEMENT (CBA) CAN BE

GIVEN ITS FULL FORCE AND EFFECT IN ALL ITS TERMS AND CONDITION INCLUDING ITS UNION SECURITY CLAUSE, EVEN BEYOND

THE 5-YEAR PERIOD WHEN NO NEW CBA HAS YET BEEN ENTERED INTO.

IIWHETHER OR NOT AN HONEST ERROR IN

THE INTERPRETATION AND/OR CONCLUSION OF LAW FALL WITHIN THE AMBIT OF THE EXTRAORDINARY REMEDY OF CERTIORARI

UNDER RULE 65, REVISED RULES OF COURT.?

HELD: 1. Petitioner is mistaken.

The power of the Court of Appeals to review NLRC decisions via Rule 65 or Petition for Certiorari has been settled as early as in our decision in St. Martin Funeral Home v. National Labor Relations Commission.[11] This Court held that the proper vehicle for such review was a Special Civil Action for Certiorari under Rule

65 of the Rules of Court, and that this action should be filed in the Court of Appeals in strict observance of the doctrine of the hierarchy of courts.[12] Moreover, it is already settled that under Section 9 of Batas Pambansa Blg. 129, as amended by Republic Act No. 7902[10] (An Act Expanding the Jurisdiction of the Court of Appeals, amending for the purpose of Section Nine of Batas Pambansa Blg. 129 as amended, known as the Judiciary Reorganization Act of 1980), the Court of Appeals – pursuant to the exercise of its original jurisdiction over Petitions for Certiorari – is specifically given the power to pass upon the evidence, if and when necessary, to resolve factual issues. [13] 2. We now come to the main issue of whether there was just cause to terminate the employment of respondents.

Petitioner's argument is untenable.

“Union security" is a generic term, which is applied to and comprehends "closed shop," “union shop," "maintenance of membership," or any other form of agreement which imposes upon employees the obligation to acquire or retain union membership as a condition affecting employment. There is union shop when all new regular employees are required to join the union within a certain period as a condition for their continued employment. There is maintenance of membership shop when employees, who are union members as of the effective date of the agreement, or who thereafter become members, must maintain union membership as a condition for continued employment until they are promoted or transferred out of the bargaining unit, or the agreement is terminated. A closed shop, on the other hand, may be defined as an enterprise in which, by agreement between the employer and his employees or their representatives, no person may be employed in any or certain agreed departments of the enterprise unless he or she is, becomes, and, for the duration of the agreement, remains a member in good standing of a union entirely comprised of or of which the employees in interest are a part.[15]

However, in terminating the employment of an employee by enforcing the union security clause, the employer needs to determine and prove that:


(1) the union security clause is applicable; (2) the union is requesting for the enforcement of the union security provision in the CBA; and (3) there is sufficient evidence to support the decision of the union to expel the employee from the union. These requisites constitute just cause for terminating an employee based on the union security provision of the CBA.[16]

As to the first requisite, there is no question that the CBA between PRI and respondents included a union security clause, specifically, a maintenance of membership as stipulated in Sections 6 of Article II, Union Security and Check-Off. Following the same provision, PRI, upon written request from the Union, can indeed terminate the employment of the employee who failed to maintain its good standing as a union member.

Secondly, it is likewise undisputed that NAMAPRI-SPFL, in two (2) occasions demanded from PRI, in their letters dated May 16 and 23, 2000, to terminate the employment of respondents due to their acts of disloyalty to the Union.

However, as to the third requisite, we find that there is no sufficient evidence to support the decision of PRI to terminate the employment of the respondents.

We will emphasize anew that the power to dismiss is a normal prerogative of the employer. This, however, is not without limitations. The employer is bound to exercise caution in terminating the services of his employees especially so when it is made upon the request of a labor union pursuant to the Collective Bargaining Agreement. Dismissals must not be arbitrary and capricious. Due process must be observed in dismissing an employee, because it affects not only his position but also his means of livelihood. Employers should, therefore, respect and protect the rights of their employees, which include the right to labor.[25]

An employee who is illegally dismissed is entitled to the twin reliefs of full backwages and reinstatement. If reinstatement is not viable, separation pay is awarded to the employee. In awarding separation pay to an illegally dismissed employee, in lieu of reinstatement, the amount to be awarded shall be equivalent to one month

salary for every year of service. Under Republic Act No. 6715, employees who are illegally dismissed are entitled to full backwages, inclusive of allowances and other benefits, or their monetary equivalent, computed from the time their actual compensation was withheld from them up to the time of their actual reinstatement. But if reinstatement is no longer possible, the backwages shall be computed from the time of their illegal termination up to the finality of the decision. Moreover, respondents, having been compelled to litigate in order to seek redress for their illegal dismissal, are entitled to the award of attorney’s fees equivalent to 10% of the total monetary award.[26]

WHEREFORE, the petition is DENIED.

14. SCA Hygiene Products Corporation Employees Association-FFW vs. SCA Hygiene

Products Corporation, G.R. No. 182877, August 9, 2010.

FACTS:Respondent SCA Hygiene Products Corporation is a domestic corporation engaged in the manufacture, sale and distribution of industrial paper, tissue and allied products. It has existing Collective Bargaining Agreements (CBAs) with SCA Hygiene Products Corporation Monthly Employees Union-FSM (Monthly Employees Union) and petitioner SCA Hygiene Products Corporation Employees Association-FFW (Daily Employees Union), which represent the monthly and daily paid rank-and-file employees, respectively.

As a result, the Monthly Employees Union demanded that the 22 daily paid rank-and-file employees be given conversion increase, promotion increase as well as retroactive salary increase from the time the job evaluation was completed on the ground that their positions had been converted into a higher job grade level which amounted to a promotion. Likewise, the Daily Employees Union asked for the adjustment of said employees’ compensation since the conversion warranted their entitlement to the benefits, status and privileges of a monthly paid rank-and-file employee.

As respondent failed to respond, both unions submitted their grievances for mediation. When


the parties failed to reach an amicable settlement, they submitted the case for voluntary arbitration. On appeal, the Court of Appeals ruled in favor of respondent. First, it held that the job evaluation was conducted as a reorganization process to standardize the company’s organizational set-up. It was not designed to provide any conversion or adjustment to the salaries of the employees. The CBAs merely provided the procedure for the implementation of the job evaluation. It did not specifically state that the covered employees are entitled to any salary adjustment after the job evaluation. Hence, in the absence of any law or agreement between the parties, any conversion much less promotion is left entirely to respondent’s sound discretion. Second, the appellate court did not give credence to the unions’ claim that the grant of conversion/promotion increase was respondent’s long-standing practice. To be considered a regular practice, the grant of such increase should have been done over a long period of time and must be shown to be consistent and deliberate. In this case, there was no evidence that respondent agreed to continue giving the benefits knowing fully well that its employees are not covered by the law requiring payment thereof. Third, the appellate court noted that those employees converted to Job Grade Level 3 positions were given salary and benefits increase since they became managerial employees after the job evaluation. The same could not be said with regard to those holding Job Grade Level 2 positions since they remained rank-and-file employees.

ISSUE: THE HONORABLE COURT OF APPEALS GROSSLY ERRED WHEN IT DECIDED THE CASE IN UTTER DISREGARD OF THE SUBSTANTIATED FACTS THAT A PROMOTION TOOK PLACE WHEN THE TWENTY-TWO (22) DAILY PAID EMPLOYEES, WHO WERE PREVIOUSLY OCCUPYING JOB LEVEL I POSITIONS, WERE SUBSEQUENTLY CONVERTED INTO OR PROMOTED TO JOB LEVEL 2 POSITIONS AFTER THE RESULT OF THE JOB EVALUATION ON FEBRUARY 24, 2004.

HELD:

Employee; evaluation and promotion. The fact that employees were re-classified from Job Grade

Level 1 to Job Grade Level 2 as a result of a job evaluation program does not automatically entail a promotion or grant them an increase in salary. Of primordial consideration is not the nomenclature or title given to the employee, but the nature of his functions. What transpired in this case was only a promotion in nomenclature. The employees continued to occupy the same positions they were occupying prior to the job evaluation. Moreover, their job titles remained the same and they were not given additional duties and responsibilities.

15.BPI v. BPI Employees Union-Davao Chapter-

Federation of Unions in BPI Unibank, G.R. No. 164301, August 10, 2010

FACTS: On March 23, 2000, the Bangko Sentral ng Pilipinas approved the Articles of Merger executed on January 20, 2000 by and between BPI, herein petitioner, and FEBTC.This Article and Plan of Merger was approved by the Securities and Exchange Commission on April 7, 2000.

Pursuant to the Article and Plan of Merger, all the assets and liabilities of FEBTC were transferred to and absorbed by BPI as the surviving corporation. FEBTC employees, including those in its different branches across the country, were hired by petitioner as its own employees, with their status and tenure recognized and salaries and benefits maintained.

Respondent BPI Employees Union-Davao Chapter - Federation of Unions in BPI Unibank (hereinafter the “Union,” for brevity) is the exclusive bargaining agent of BPI’s rank and file employees in Davao City. The former FEBTC rank-and-file employees in Davao City did not belong to any labor union at the time of the merger. Prior to the effectivity of the merger, or on March 31, 2000, respondent Union invited said FEBTC employees to a meeting regarding the Union Shop Clause (Article II, Section 2) of the existing CBA between petitioner BPI and respondent Union.[7] After two months of management inaction on the request, respondent Union informed petitioner BPI of its decision to refer the issue of the implementation of the Union Shop Clause of the CBA to the Grievance Committee. However, the issue remained unresolved at this level and so it


was subsequently submitted for voluntary arbitration by the parties.[11]

Voluntary Arbitrator Rosalina Letrondo-Montejo, in a Decision[12] dated November 23, 2001, ruled in favor of petitioner BPI’s interpretation that the former FEBTC employees were not covered by the Union Security Clause of the CBA between the Union and the Bank on the ground that the said employees were not new employees who were hired and subsequently regularized, but were absorbed employees “by operation of law” because the “former employees of FEBTC can be considered assets and liabilities of the absorbed corporation.” The Voluntary Arbitrator concluded that the former FEBTC employees could not be compelled to join the Union, as it was their constitutional right to join or not to join any organization.

The Court of Appeals pertinently ruled in its Decision:

A union-shop clause has been defined as a form of union security provision wherein non-members may be hired, but to retain employment must become union members after a certain period.

There is no question as to the existence of the union-shop clause in the CBA between the petitioner-union and the company. The controversy lies in its application to the “absorbed” employees.

To rule otherwise would definitely result to a very awkward and unfair situation wherein the “absorbed” employees shall be in a different if not, better situation than the existing BPI employees. The existing BPI employees by virtue of the “union-shop” clause are required to pay the monthly union dues, remain as members in good standing of the union otherwise, they shall be terminated from the company, and other union-related obligations. On the other hand, the “absorbed” employees shall enjoy the “fruits of labor” of the petitioner-union and its members for nothing in exchange. Certainly, this would disturb industrial peace in the company which is the paramount reason for the existence of the CBA and the union.

ISSUES:

I

WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN RULING THAT THE

FORMER FEBTC EMPLOYEES SHOULD BE CONSIDERED ‘NEW’ EMPLOYEES OF BPI FOR PURPOSES OF APPLYING THE UNION SHOP

CLAUSE OF THE CBA

IIWHETHER OR NOT THE COURT OF APPEALS

GRAVELY ERRED IN FINDING THAT THE VOLUNTARY ARBITRATOR’S INTERPRETATION

OF THE COVERAGE OF THE UNION SHOP CLAUSE IS “AT WAR WITH THE SPIRIT AND

THE RATIONALE WHY THE LABOR CODE ITSELF ALLOWS THE EXISTENCE OF SUCH

PROVISION”[16]

HELD:Merger; employee terms and conditions.

That BPI is the same entity as FEBTC after the merger is but a legal fiction intended as a tool to adjudicate rights and obligations between and among the merged corporations and the persons that deal with them. Although in a merger it is as if there is no change in the personality of the employer, there is in reality a change in the situation of the employee. Once an FEBTC employee is absorbed, there are presumably changes in his condition of employment even if his previous tenure and salary rate is recognized by BPI. It is reasonable to assume that BPI would have different rules and regulations and company practices than FEBTC and it is incumbent upon the former FEBTC employees to obey these new. Not the least of these changes is the fact that prior to the merger FEBTC employees were employees of an unorganized establishment and after the merger they became employees of a unionized company that had an existing CBA with the certified union. Thus, although in a sense BPI is continuing FEBTC’s employment of these absorbed employees, BPI’s employment of these absorbed employees will not be under exactly the same terms and conditions as stated in the latter’s employment contracts with FEBTC

In essence, the sole issue in this case is whether or not the former FEBTC employees that were absorbed by petitioner upon the merger between FEBTC and BPI should be covered by the Union Shop Clause found in the existing CBA between petitioner and respondent Union.


Petitioner is of the position that the former FEBTC employees are not new employees of BPI for purposes of applying the Union Shop Clause of the CBA, on this note, petitioner points to Section 2, Article II of the CBA, which provides:

New employees falling within the bargaining unit as defined in Article I of this Agreement, who may hereafter be regularly employed by the Bank shall, within thirty (30) days after they become regular employees, join the Union as a condition of their continued employment. It is understood that membership in good standing in the Union is a condition of their continued employment with the Bank.[17] (Emphases supplied.)

Section 2, Article II of the CBA is silent as to how one becomes a “regular employee” of the BPI for the first time. There is nothing in the said provision which requires that a “new” regular employee first undergo a temporary or probationary status before being deemed as such under the union shop clause of the CBA.

“Union security” is a generic term which is applied to and comprehends “closed shop,” “union shop,” “maintenance of membership” or any other form of agreement which imposes upon employees the obligation to acquire or retain union membership as a condition affecting employment. There is union shop when all new regular employees are required to join the union within a certain period for their continued employment. There is maintenance of membership shop when employees, who are union members as of the effective date of the agreement, or who thereafter become members, must maintain union membership as a condition for continued employment until they are promoted or transferred out of the bargaining unit or the agreement is terminated. A closed-shop, on the other hand, may be defined as an enterprise in which, by agreement between the employer and his employees or their representatives, no person may be employed in any or certain agreed departments of the enterprise unless he or she is, becomes, and, for the duration of the agreement, remains a member in good standing of a union entirely comprised of or of which the employees in interest are a part.[19]

In other words, the purpose of a union shop or other union security arrangement is to guarantee the continued existence of the union through enforced membership for the benefit of the workers.

To reiterate, petitioner insists that the term “new employees,” as the same is used in the Union Shop Clause of the CBA at issue, refers only to employees hired by BPI asnon-regular employees who later qualify for regular employment and become regular employees, and not those who, as a legal consequence of a merger, are allegedly automatically deemed regular employees of BPI. However, the CBA does not make a distinction as to how a regular employee attains such a status. Moreover, there is nothing in the Corporation Law and the merger agreement mandating the automatic employment as regular employees by the surviving corporation in the merger.

In the case of former FEBTC employees who initially joined the union but later withdrew their membership, there is even greater reason for the union to request their dismissal from the employer since the CBA also contained a Maintenance of Membership Clause.

WHEREFORE, the petition is hereby DENIED, and the Decision dated September 30, 2003 of the Court of Appeals is AFFIRMED, subject to the thirty (30) day notice requirement imposed herein. Former FEBTC employees who opt not to become union members but who qualify for retirement shall receive their retirement benefits in accordance with law, the applicable retirement plan, or the CBA, as the case may be.

16.

PHIMCO INDUSTRIES, INC.- versus -

PHIMCO INDUSTRIES LABOR ASSOCIATION (PILA),

G.R. No. 170830

FACTS:

PHIMCO is a corporation engaged in the production of matches, with principal address at Phimco Compound, Felix Manalo St., Sta. Ana, Manila. Respondent Phimco Industries Labor Association (PILA) is the duly authorized bargaining representative of PHIMCO’s daily-


paid workers. The 47 individually named respondents are PILA officers and members.

When the last collective bargaining agreement was about to expire on December 31, 1994, PHIMCO and PILA negotiated for its renewal. The negotiation resulted in a deadlock on economic issues, mainly due to disagreements on salary increases and benefits. On March 9, 1995, PILA filed with the National Conciliation and Mediation Board (NCMB) a Notice of Strike on the ground of the bargaining deadlock. On May 3, 1995, PHIMCO filed with the NLRC a petition for preliminary injunction and temporary restraining order (TRO), to enjoin the strikers from preventing – through force, intimidation and coercion – the ingress and egress of non-striking employees into and from the company premises. On May 15, 1995, the NLRC issued an ex-parte TRO, effective for a period of twenty (20) days, or until June 5, 1995.

On July 6, 1995, PILA filed a complaint for unfair labor practice and illegal dismissal (illegal dismissal case) with the NLRC. The case was docketed as NLRC NCR Case No. 00-07-04705-95, and raffled to Labor Arbiter (LA) Pablo C. Espiritu, Jr. LA Mayor decided the case on February 4, 1998,[5] and found the strike illegal; the respondents committed prohibited acts during the strike by blocking the ingress to and egress from PHIMCO’s premises and preventing the non-striking employees from reporting for work. He observed that it was not enough that the picket of the strikers was a moving picket, since the strikers should allow the free passage to the entrance and exit points of the company premises. Thus, LA Mayor declared that the respondent employees, PILA officers and members, have lost their employment status. On March 5, 1998, PILA and its officers and members appealed LA Mayor’s decision to the NLRC. THE NLRC RULING The NLRC decided the appeal on December 29, 1998, and set aside LA Mayor’s decision.[6] The NLRC did not give weight to PHIMCO’s evidence, and relied instead on the respondents’ evidence showing that the union conducted a peaceful moving picket. THE CA RULING In a Decision[10] promulgated on February 10, 2004, the CA

dismissed PHIMCO’s petition for certiorari. The CA noted that the NLRC findings, that the picket was peaceful and that PHIMCO’s evidence failed to show that the picket constituted an illegal blockade or that it obstructed the points of entry to and exit from the company premises, were supported by substantial evidence. THE CASE FOR THE RESPONDENTS The respondents, on the other hand, submit that the issues raised in this case are factual in nature that we cannot generally touch in a petition for review, unless compelling reasons exist; the company has not shown any such compelling reason as the picket was peaceful and uneventful, and no human barricade blocked the company premises. THE ISSUE Did the CA correctly determine whether the NLRC committed grave abuse of discretion in ruling on the case? In this light, the core issue in the present case is whether the CA correctly ruled that the NLRC did not act with grave abuse of discretion in ruling that the union’s strike was legal. OUR RULINGWe find the petition partly meritorious. Requisites of a valid strike A strike is the most powerful weapon of workers in their struggle with management in the course of setting their terms and conditions of employment. Because it is premised on the concept of economic war between labor and management, it is a weapon that can either breathe life to or destroy the union and its members, and one that must also necessarily affect management and its members.[14] In light of these effects, the decision to declare a strike must be exercised responsibly and must always rest on rational basis, free from emotionalism, and unswayed by the tempers and tantrums of hot heads; it must focus on legitimate union interests. To be legitimate, a strike should not be antithetical to public welfare, and must be pursued within legal bounds. The right to strike as a means of attaining social justice is never meant to oppress or destroy anyone, least of all, the employer.[15]


Since strikes affect not only the relationship between labor and management but also the general peace and progress of the community, the law has provided limitations on the right to strike. Procedurally, for a strike to be valid, it must comply with Article 263[16] of the Labor Code, which requires that: (a) a notice of strike be filed with the Department of Labor and Employment (DOLE) 30 days before the intended date thereof, or 15 days in case of unfair labor practice; (b) a strike vote be approved by a majority of the total union membership in the bargaining unit concerned, obtained by secret ballot in a meeting called for that purpose; and (c) a notice be given to the DOLE of the results of the voting at least seven days before the intended strike. These requirements are mandatory, and the union’s failure to comply renders the strike illegal.[17] The 15 to 30-day cooling-off period is designed to afford the parties the opportunity to amicably resolve the dispute with the assistance of the NCMB conciliator/mediator, while the seven-day strike ban is intended to give the DOLE an opportunity to verify whether the projected strike really carries the imprimatur of the majority of the union members.[18]

17.

ELPIDIO CALIPAY ,- versus -

NATIONAL LABOR RELATIONS COMMISSION, TRIANGLE ACE CORPORATION and JOSE LEE,

G.R. No. 166411

Facts: On July 16, 1999, a Complaint[3] for illegal dismissal, unfair labor practice, underpayment of wages and 13th month pay, non-payment of service incentive leave pay, overtime pay, premium pay for holiday, rest day, night shift allowances and separation pay was filed by herein petitioner Elpidio Calipay, together with Alfredo Mission and Ernesto Dimalanta against herein private respondents Triangle Ace Corporation (Triangle) and Jose Lee. Calipay and the other complainants alleged in their Position Paper that in the course of their employment, they were not given any specific work assignment; they performed various kinds

of work imposed upon them by Lee; in discharging their functions, they were required by Lee to work for nine (9) hours a day, beginning from 7:00 a.m. and ending at 6:00 p.m. with a break of one hour at 12:00 noon; they were also required to report from Monday to Sunday; for work rendered from Mondays to Saturdays beyond the normal eight (8) working hours in a day, they were paid a uniform daily wage in the amount of P140.00 even during holidays; for work performed on Sundays, they were not paid any wage due to the policy of Lee that his workers must provide work without pay at least a day in the week under his so-called “bayanihan system”; in receiving their wages, they were not given any duly accomplished payslips; instead, they were forced to sign a blank form of their daily time records and salary vouchers. It was further alleged that in May 1998, Lee confronted Calipay and Mission regarding their alleged participation and assistance in Dimalanta’s claim for disability benefits with the Social Security System; despite their denials, Lee scolded Calipay and Mission; this incident later led to their dismissal in the same month.In their Position Paper, private respondents countered that the termination of Calipay and the other complainants was for a valid or just cause and that due process was observed. They claimed, among others, that Calipay was on absence without leave (AWOL) status from November 2, 1998 up to November 17, 1998; a memorandum dated November 17, 1998, requiring him to explain why his services should not be terminated, was sent by mail but he refused to receive the same; for failure to explain his side, another memorandum dated December 11, 1998 was issued terminating Calipay’s employment on the ground of abandonment of work; there is no unfair labor practice because there is no union; there is full compliance with the law regarding payment of wages and other benefits due to their employees; non-payment of nightshift premium is true, because the company does not operate at night. On July 10, 2000, the Labor Arbiter handling the case rendered a Decision[4] dismissing the Complaint for lack of merit. Calipay and the other complainants filed an appeal with the National Labor Relations Commission (NLRC).[5]


ISSUE:

WHETHER OR NOT PUBLIC RESPONDENT COURT OF APPEALS COMMITTED A REVERSIBLE ERROR WHEN IT ISSUED ITS DECISION DATED 24 AUGUST 2004 AND RESOLUTION DATED 10 DECEMBER 2004 DISMISSING THE PETITION FOR CERTIORARI AND AFFIRMING THE RESOLUTIONS OF PUBLIC RESPONDENT NLRC DATED 30 JUNE 2003 AND 24 SEPTEMBER 2002, WHICH RESOLUTIONS DISMISSED PETITIONER’S COMPLAINT FOR ILLEGAL DISMISSAL BY REVERSING RESPONDENT NLRC’S PREVIOUS RESOLUTION DATED 01 FEBRUARY 2002.

HELD:

Procedural rules; strict application. Procedural rules setting the period for perfecting an appeal or filing a petition for review are generally inviolable. It is doctrinally entrenched that an appeal is not a constitutional right, but a mere statutory privilege. Hence, parties who seek to avail themselves of such privilege must comply with the statutes or rules allowing it. Furthermore, the perfection of an appeal in the manner and within the period permitted by law is not only mandatory, but also jurisdictional. Failure to perfect the appeal renders the judgment of the court final and executory. Just as a losing party has the privilege to file an appeal within the prescribed period, so does the winner also have the correlative right to enjoy the finality of the decision.

We agree with the Labor Arbiter’s finding that petitioner Calipay had abandoned his work. x x x In the instant case, petitioner Calipay had failed to report for work for unknown reasons x x x His continued absences without the private respondents’ approval constituted gross and habitual neglect which is a just cause for termination under Article 282 of the Labor Code of the Philippines.[24] On the basis of the foregoing, the Court arrives at the conclusion that the filing of the complaint for illegal dismissal appears only as a convenient afterthought on the part of petitioner and the

other complainants after they were dismissed in accordance with law. Jurisprudence has held time and again that abandonment is totally inconsistent with the immediate filing of a complaint for illegal dismissal, more so if the same is accompanied by a prayer for reinstatement.[27] In the present case, however, petitioner filed his complaint more than one year after his alleged termination from employment. Moreover, petitioner and the other complainants’ inconsistency in their stand is also shown by the fact that in the complaint form which they personally filled up and filed with the NLRC, they only asked for payment of separation pay and other monetary claims. They did not ask for reinstatement. It is only in their Position Paper later prepared by their counsel that they asked for reinstatement. This is an indication that petitioner and the other complainants never had the intention or desire to return to their jobs. In fact, there is no evidence to prove that petitioner and his former co-employees ever attempted to return to work after they were dismissed from employment.

Finally, it bears to point out that the Decision of the Labor Arbiter was affirmed by the NLRC and the CA. The settled rule is that the factual findings of the Labor Arbiter and the NLRC, especially when affirmed by the CA, are accorded not only great respect but also finality, and are deemed binding upon this Court so long as they are supported by substantial evidence.[28] In the present case, the Court finds no cogent reason to depart from this rule. WHEREFORE, the petition is DENIED.

18. Alex Gurango vs. Best Chemicals and Plastic, Inc., et al., G.R. No. 174593, August 25, 2010.

FACTS: Respondent Best Chemicals and Plastics, Inc. (BCPI) is a corporation engaged in the manufacture of biaxially oriented polypropylene and related products. Respondent Moon Pyo Hong (Hong) is the president and chief executive officer of BCPI.

Petitioner Alex R. Gurango (Gurango) and Romeo S. Albao (Albao) worked as boiler operator and


security guard, respectively, in BCPI. In a memorandum7 dated 2 May 2003, BCPI prohibited its empoyees from bringing personal items to their work area. Erring employees would be suspended for six days.

The NLRC’s Ruling

In its 17 October 2005 Resolution, the NLRC affirmed in toto the Labor Arbiter’s 6 July 2004 Decision. The NLRC held that:

Although fighting within company premises constitute serious misconduct, this however, does not apply in this case. Complainant did not start nor provoke the fight. It was precipitated, instead, by guard Albao when he tried to get the complainant’s camera for no valid reason. The statement of Albao that complainant tried to snatch his service firearm is not only unbelievable but is also exaggerated. The Labor Arbiter is correct and we concur in his finding that the complainant was not foolish enough to try to snatch the gun of Albao. The camera is undisputably owned by complainant. The Court of Appeals’ Ruling

In its 20 July 2006 Decision, the Court of Appeals set aside the 17 October 2005 and 24 January 2006 Resolutions of the NLRC. The Court of Appeals held that “private respondent engaged himself in a fistfight with the security guard”23 and that engaging in a fistfight constituted serious misconduct.

Gurango filed a motion24 for reconsideration, which the Court of Appeals denied in its 11 September 2006 Resolution. Hence, the present petition.

The Issue

Gurango raises as issue that the Court of Appeals erred in ruling that he was legally dismissed. BCPI failed to prove that he engaged in a fistfight and that there was just cause for his dismissal.

The Court’s Ruling

The petition is meritorious.

Rule 45; review of factual findings. As a general rule, only questions of law may be raised in petitions for certiorari under Rule 45 of the Rules of Court. However, there are recognized exceptions to the rule. Among the exceptions are when the findings of fact are conflicting and when the findings are conclusions without citation of specific evidence on which they are based. In the present case, the findings of fact of the Court of Appeals conflict with the findings of fact of the NLRC and the Labor Arbiter. Also, the finding of the Court of Appeals that Gurango engaged in a fistfight is a conclusion without citation of specific evidence on which it is based .

19.

Century Canning Corporation, Ricardo T. Po, Jr., et al. vs. Vicente Randy R. Ramil,

G.R. No. 171630, August 8, 2010.

FACTS: Petitioner Century Canning Corporation, a company engaged in canned food manufacturing, employed respondent Vicente Randy Ramil in August 1993 as technical specialist. Prior to his dismissal on May 20, 1999, his job included, among others, the preparation of the purchase requisition (PR) forms and capital expenditure (CAPEX) forms, as well as the coordination with the purchasing department regarding technical inquiries on needed products and services of petitioner's different departments. On March 3, 1999, respondent prepared a CAPEX form for external fax modems and terminal server, per order of Technical Operations Manager Jaime Garcia, Jr. and endorsed it to Marivic Villanueva, Secretary of Executive Vice-President Ricardo T. Po, for the latter's signature. The CAPEX form, however, did not have the complete details[3] and some required signatures.[4] The following day, March 4, 1999, with the form apparently signed by Po, respondent transmitted it to Purchasing Officer Lorena Paz in Taguig Main Office. Paz processed the paper and found that some details in the CAPEX form were left blank. She also doubted the genuineness of the signature of Po, as appearing in the form. Paz then transmitted the CAPEX form to Purchasing Manager Virgie


Garcia and informed her of the questionable signature of Po. Consequently, the request for the equipment was put on hold due to Po's forged signature. However, due to the urgency of purchasing badly needed equipment, respondent was ordered to make another CAPEX form, which was immediately transmitted to the Purchasing Department. Suspecting him to have committed forgery, respondent was asked to explain in writing the events surrounding the incident. He vehemently denied any participation in the alleged forgery. Respondent was, thereafter, suspended on April 21, 1999. Subsequently, he received a Notice of Termination from Armando C. Ronquillo, on May 20, 1999, for loss of trust and confidence. Due to the foregoing, respondent, on May 24, 1999, filed a Complaint for illegal dismissal, non-payment of overtime pay, separation pay, moral and exemplary damages and attorney's fees against petitioner and its officers before the Labor Arbiter (LA) Frustrated by this turn of events, respondent filed a petition for certiorari with the CA. The CA, in its Decision dated December 1, 2005, rendered judgment in favor of respondent and reinstated the earlier decision of the NLRC, dated August 26, 2002.

ISSUE: THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN DISREGARDING THE UNANIMOUS FINDINGS OF THE LABOR ARBITER AND THE NATIONAL LABOR RELATIONS COMMISSION SUSTAINING THE LEGALITY OF PRIVATE RESPONDENT'S TERMINATION FROM HIS EMPLOYMENT.

HELD: Dismissal; burden of proof. The law mandates that the burden of proving the validity of the termination of employment rests with the employer. Failure to discharge this evidentiary burden would necessarily mean that the dismissal was not justified and, therefore, illegal. Unsubstantiated suspicions, accusations, and conclusions of employers do not provide for legal justification for dismissing employees. In case of doubt, such cases should be resolved in favor of labor, pursuant to the social justice policy of labor laws and the Constitution.

20

Pharmacia and Upjohn, Inc., et al. vs. Ricardo P. Albayda, Jr., G.R. No. 172724,

August 23, 2010.

FACTS:

Respondent Ricardo P. Albayda, Jr. (respondent) was an employee of Upjohn, Inc. (Upjohn) in 1978 and continued working there until 1996 when a merger between Pharmacia and Upjohn was created. After the merger, respondent was designated by petitioner Pharmacia and Upjohn (Pharmacia) as District Sales Manager assigned to District XI in the Western Visayas area. During the period of his assignment, respondent settled in Bacolod City. Sometime on August 9, 1999, a district meeting was held in Makati City wherein one of the topics discussed was the district territorial configuration for the new marketing and sales direction for the year 2000. In December 1999, respondent received a Memorandum[4] announcing the sales force structure for the year 2000. In the said memorandum, respondent was reassigned as District Sales Manager to District XII in the Northern Mindanao area. One of the key areas covered in District XII is Cagayan de Oro City. In response to the memorandum, respondent wrote a letter[5] dated December 27,1999 to Felicito M. Garcia (Garcia), Pharmacia’s Vice-President for Sales and Marketing, questioning his transfer from District XI to District XII. Respondent said that he has always been assigned to the Western Visayas area and that he felt that he could not improve the sales of products if he was assigned to an unfamiliar territory. Respondent concluded that his transfer might be a way for his managers to dismiss him from employment. Respondent added that he could not possibly accept his new assignment in Cagayan de Oro City because he will be dislocated from his family; his wife runs an established business in Bacolod City; his eleven- year-old daughter is studying in Bacolod City; and his two-year-old son is under his and his wife’s direct care.

On August 14, 2000, respondent filed a Complaint[22] with the NLRC, Regional Arbitration Branch No. VI, Bacolod City against Pharmacia, Chu, Montilla and Garcia for


constructive dismissal. Also included in the complaint was Ashley Morris, Pharmacia’s President. Since mandatory conciliation failed between the parties, both sides were directed to submit their position papers. On July 12, 2002, the Labor Arbiter (LA) rendered a Decision[23] dismissing the case,

ISSUE:

WHETHER OR NOT THE COURT OF APPEALS (CEBU CITY) CAN REVERSE OR SET ASIDE THE FACTUAL AND LEGAL FINDINGS OF THE NLRC WHICH WAS BASED ON SUBSTANTIAL EVIDENCE WHEN THERE IS NO SHOWING OF PALPABLE ERROR OR THAT THE FINDINGS OF FACTS OF THE LABOR ARBITER IS CONTRARY TO THAT OF THE NLRC.[31] HELD:

The petition is meritorious.

Dismissal; due process. In termination proceedings of employees, procedural due process consists of the twin requirements of notice and hearing. The employer must furnish the employee with two written notices before the termination of employment can be effected: (1) the first apprises the employee of the particular acts or omissions for which his dismissal is sought; and (2) the second informs the employee of the employer’s decision to dismiss him. The requirement of a hearing is complied with as long as there was an opportunity to be heard, and not necessarily that an actual hearing was conducted

21. Wensha Spa Center, inc. and/or Xu Zhi Jie ,vs. Loreta T. Yung, G.R. No. 185122,

August 16, 2010.

FACTS: Wensha Spa Center, Inc. (Wensha) in Quezon City is in the business of sauna bath and massage services. Xu Zhi Jie a.k.a. Pobby Co (Xu) is its president,[3] respondent Loreta T. Yung (Loreta) was its administrative manager at the time of her termination from employment. In her position paper,[4] Loreta stated that she used to be employed by Manmen Services Co., Ltd. (Manmen) where Xu was a client. Xu was

apparently impressed by Loreta’s performance. After he established Wensha, he convinced Loreta to transfer and work at Wensha. Loreta was initially reluctant to accept Xu’s offer because her job at Manmen was stable and she had been with Manmen for seven years. But Xu was persistent and offered her a higher pay. Enticed, Loreta resigned from Manmen and transferred to Wensha. She started working on April 21, 2004 as Xu’s personal assistant and interpreter at a monthly salary of P12,000.00. Loreta introduced positive changes to Wensha which resulted in increased business. This pleased Xu so that on May 18, 2004, she was promoted to the position of Administrative Manager.[5] Loreta recounted that on August 10, 2004, she was asked to leave her office because Xu and a Feng Shui master were exploring the premises. Later that day, Xu asked Loreta to go on leave with pay for one month. She did so and returned on September 10, 2004. Upon her return, Xu and his wife asked her to resign from Wensha because, according to the Feng Shui master, her aura did not match that of Xu. Loreta refused but was informed that she could no longer continue working at Wensha. That same afternoon, Loreta went to the NLRC and filed a case for illegal dismissal against Xu and Wensha. Wensha and Xu denied illegally terminating Loreta’s employment. They claimed that two months after Loreta was hired, they received various complaints against her from the employees so that on August 10, 2004, they advised her to take a leave of absence for one month while they conducted an investigation on the matter. Based on the results of the investigation, they terminated Loreta’s employment on August 31, 2004 for loss of trust and confidence.[6] The Labor Arbiter (LA) Francisco Robles dismissed Loreta’s complaint for lack of merit. He found it more probable that Loreta was dismissed from her employment due to Wensha’s loss of trust and confidence in her.

This ruling was affirmed by the NLRC in its December 29, 2006 Resolution,[9] citing its observation that Wensha was still considering the proper action to take on the day Loreta left Wensha and filed her complaint. The NLRC


added that this finding was bolstered by Wensha’s September 10, 2004 letter to Loreta asking her to come back to personally clarify some matters, but she declined because she had already filed a case. Loreta moved for a reconsideration of the NLRC’s ruling but her motion was denied. Loreta then went to the CA on a petition for certiorari. The CA reversed the ruling of the NLRC on the ground that it gravely abused its discretion in appreciating the factual bases that led to Loreta’s dismissal.

ISSUE: W/N The Honorable COURT OF APPEALS committed grave abuse of discretion and serious errors when it held that petitioner XU ZHI JIE to be solidarily liable with WENSHA, assuming that respondent was illegally dismissed?

HELD:

Dismissal; feng shui; breach of trust and confidence. The Court finds that the complainant’s allegations are more credible and that she was dismissed from her employment because the Feng Shui master found that complainant’s Chinese Zodiac Sign was a mismatch to that of respondents. This is not a just and valid cause for an employee’s dismissal.In contrast, respondent’s pleadings and evidence suffer from several inconsistencies and the affidavits presented by respondents only pertain to petty matters that are not sufficient to support respondent’s alleged loss of trust and confidence. To be a valid cause for termination of employment, the act or acts constituting breach of trust must have been done intentionally, knowingly, and purposely; and they must be founded on clearly established facts

22

Jesus E. Dycoco, Jr.vs. Equitable PCI Bank (now Banco de Oro), Rene Bunaventura and Siles Samalea, G.R. No. 188271, August 16,

2010.

FACTS: In February 1997, petitioner was hired by respondent bank as Assistant Manager and/or OIC Branch Head of its Legazpi City Branch, Region V (Legazpi branch). In 2000, petitioner became Branch Head and in September 2003,

respondent bank underwent an internal reorganization. Pursuant thereto, petitioner became the Personal Banking Manager (PBM) of the Legazpi branch. In June 2005, several clients of the Legazpi branch filed complaints for alleged unauthorized abstractions of various trust funds, treasury placements and deposits. Respondent bank promptly commenced an investigation. Consequently, “show cause” letters were issued to the officers of the Legazpi branch, including Branch Center Head Glena Orogo, former Service Officer respondent Siles Samalea, Service Officer Irene Tabuzo, Operations Officers Imelda Espiritu and Maria Fe Gianan, Investment Clerk Carlo Quirong and the petitioner as the PBM.

Petitioner Jesus E. Dycoco, Jr. seeks reconsideration of the August 26, 2009 resolution denying his petition[1] wherein he assailed the February 16, 2009 decision and May 12, 2009 resolution of the Court of Appeals (CA) in CA-G.R. SP No. 105126. The CA affirmed the decision and resolution of the National Labor Relations Commission (NLRC) in Jesus Dycoco, Jr. v. Equitable PCI Bank / Rene Buenaventura, et al., docketed as LAC No. 01-000390-08. The NLRC, on the other hand, reversed and set aside the July 24, 2007 decision of the labor arbiter of the Regional Arbitration Branch No. V, Legazpi City, in RAB-V Case No. 09-00407-06 which held that petitioner was illegally dismissed by respondents Equitable PCI Bank (now Banco de Oro), Rene Buenaventura and Siles Samalea. In reversing the labor arbiter, the NLRC ruled that petitioner’s dismissal was for just cause. He was guilty of serious misconduct, willful disobedience and gross negligence for not performing his duty to complete the documentary requirements in the opening of accounts pursuant to the bank’s internal procedures. This directly resulted in the unauthorized abstraction of bank funds.

ISSUE: W/N CA was thus correct in upholding the dismissal of petitioner.

HELD:


Dismissal; gross negligence and loss of confidence. Gross negligence connotes “want of care in the performance of one’s duties.” Petitioner’s failure on 3 separate occasions to require clients to sign the requisite documents constituted gross negligence. Furthermore, it has been held that if the employees are cashiers, managers, supervisors, salesmen or other personnel occupying positions of responsibility, the employer’s loss of trust and confidence in said employees may justify the termination of their employment. As the Bank’s Personal Banking Manager, petitioner’s failure to comply with basic banking policies and procedures were inimical to the interests of the bank, making his dismissal based on loss of confidence justified.

23Carlos De Castro vs. Liberty Broadcasting

Network, Inc. and Edgardo Quigue, G.R. No. 165153. August 25, 2010.

FACTS:

The petitioner, Carlos C. de Castro, worked as a chief building administrator at LBNI. On May 31, 1996, LBNI dismissed de Castro on the grounds of serious misconduct, fraud, and willful breach of the trust reposed in him as a managerial employee.

Aggrieved, de Castro filed a complaint for illegal dismissal against LBNI with the National Labor Relations Commission (NLRC) Arbitration Branch, National Capital Region, praying for reinstatement, payment of backwages, damages, and attorney’s fees.[4] He maintained that he could not have solicited commissions from suppliers considering that he was new in the company.[5] Moreover, the accusations were belatedly filed as the imputed acts happened in 1995. He explained that the one gallon of Delo oil he allegedly took was actually found in Gil Balais’ room.[6] He denied threatening Vicente Niguidula, whom he claimed verbally assaulted him and challenged him to a fight, an incident which he reported to respondent Edgardo Quiogue, LBNI’s executive vice president, and to the Makati police.[7] De Castro alleged that prior to executing affidavits against him, Niguidula and Balais had serious clashes with him.[8] The respondent, Liberty Broadcasting Network, Inc. (LBNI), filed the present Motion for Reconsideration with Motion to Suspend Proceedings, asking us, first, to set aside our

Decision[1] and, second, to suspend the court proceedings in view of the Stay Order issued on August 19, 2005 by the Regional Trial Court (RTC) of Makati, Branch 138, in relation to the corporate rehabilitation proceedings that LBNI initiated. The dispositive part of our Decision reads: WHEREFORE, premises considered, we hereby GRANT the petition. Accordingly, we REVERSE and SET ASIDE the Decision and Resolution of the CA promulgated on May 25, 2004 and August 30, 2004, respectively, and REINSTATE in all respects the Resolution of the National Labor Relations Commission dated September 20, 2002. Costs against the respondents. SO ORDERED

ISSUE: W/N DISMISSAL VALID?

HELD:Dismissal; probationary employment. Though the acts charged against de Castro took place when he was still under probationary employment, the records show that de Castro was dismissed on the ninth month of his employment with LBNI. By then, he was already a regular employee by operation of law. As a regular employee, de Castro was entitled to security of tenure and his illegal dismissal from LBNI justified the awards of separation pay, backwages, and damages

24D.M. Consunji, Inc. vs. Antonio Gobres, et

al., G.R. No. 169170, August 8, 2010.

FACTS:

Respondents Antonio Gobres, Magellan Dalisay, Godofredo Paragsa, Emilio Aleta and Generoso Melo worked as carpenters in the construction projects of petitioner D.M. Consunji, Inc., a construction company, on several occasions and/or at various times. Their termination from employment for each project was reported to the Department of Labor and Employment (DOLE), in accordance with Policy Instruction No. 20, which was later superseded by Department Order No. 19, series of 1993. Respondents’ last assignment was at Quad 4-Project in Glorietta, Ayala, Makati, where they started working on September 1, 1998. On October 14, 1998, respondents saw their names included in the


Notice of Termination posted on the bulletin board at the project premises. Respondents filed a Complaint with the Arbitration Branch of the National Labor Relations Commission (NLRC) against petitioner D.M. Consunji, Inc. and David M. Consunji for illegal dismissal, and non-payment of 13th month pay, five (5) days service incentive leave pay, damages and attorney’s fees. Petitioner D.M. Consunji, Inc. and David M. Consunji countered that respondents, being project employees, are covered by Policy Instruction No. 20, as superseded by Department Order No. 19, series of 1993 with respect to their separation or dismissal. Respondents were employed per project undertaken by petitioner company and within varying estimated periods indicated in their respective project employment contracts. Citing the employment record of each respondent, petitioner and David M. Consuji averred that respondents’ services were terminated when their phases of work for which their services were engaged were completed or when the projects themselves were completed. Respondents’ notices of termination were filed with the DOLE, in compliance with Policy Instruction No. 20,[2] superseded by Department Order No.19, series of 1993.[3] With respect to respondent Generoso G. Melo, petitioner and David M. Consuji maintained the same positions they had against the case of Melo’s co-complainants.[4] Petitioner contended that since respondents were terminated by reason of the completion of their respective phases of work in the construction project, their termination was warranted and legal.[5] Moreover, petitioner claimed that respondents have been duly paid their service incentive leave pay and 13th month pay through their respective bank accounts, as evidenced by bank remittances.[6] Respondents replied that the Quad 4-Project at Glorietta, Ayala, Makati City was estimated to take two years to finish, but they were dismissed within the two-year period. They had no prior notice of their termination. Hence, granting that they were project employees, they were still illegally dismissed for non-observance of procedural due process.[7]

On October 4, 1999, the Labor Arbiter rendered a Decision[8] dismissing respondents’ complaint. The Labor Arbiter found that respondents were project employees, that they were dismissed from the last project they were assigned to when their respective phases of work were completed, and that petitioner D.M. Consunji, Inc. and David M. Consunji reported their termination of services to the DOLE in accordance with the requirements of law. Respondents appealed the Labor Arbiter’s Decision to the NLRC

This is a petition for review on certiorari[1] of the Decision of the Court of Appeals in CA-G.R. SP No. 70708, dated March 9, 2005, and its Resolution, dated August 2, 2005, denying petitioner’s motion for reconsideration. ISSUE: W/N DISMISSAL VALID?

HELD:

Dismissal; project employees; damages. Prior or advance notice of termination is not part of procedural due process if the termination of a project employee is brought about by the completion of the contract or phase thereof. This is because completion of the work or project automatically terminates the employment, in which case, the employer is, under the law, only obliged to render a report to the DOLE. Therefore, failing to give project employees advance notice of their termination is not a violation of procedural due process and cannot be the basis for the payment of nominal damages.

25Winston F. Garcia vs. Mario I. Molina, et

al./Winston F. Garcia Vs. Mario I. Molina, et al., G.R. No. 157383/G.R. No. 174137,

August 10, 2010.FACTS:

Respondents Molina and Velasco, both Attorney V of the GSIS, received two separate Memoranda[5] dated May 23, 2002 from petitioner charging them with grave misconduct. Specifically, Molina was charged for allegedly committing the following acts: 1) directly and continuously helping some alleged disgruntled employees to conduct concerted protest actions and/or illegal assemblies against the


management and the GSIS President and General Manager; 2) leading the concerted protest activities held in the morning of May 22, 2002 during office hours within the GSIS compound; and 3) continuously performing said activities despite warning from his immediate superiors. [6] In addition to the charge for grave misconduct for performing the same acts as Molina, Velasco was accused of performing acts in violation of the Rules on Office Decorum for leaving his office without informing his supervisor of his whereabouts; and gross insubordination for persistently disregarding petitioner’s instructions that Velasco should report to the petitioner’s office.[7] These acts, according to petitioner, were committed in open betrayal of the confidential nature of their positions and in outright defiance of the Rules and Regulations on Public Sector Unionism. In the same Memoranda, petitioner required respondents to submit their verified answer within seventy two (72) hours. Considering the gravity of the charges against them, petitioner ordered the preventive suspension of respondents for ninety (90) days without pay, effective immediately.[8] The following day, a committee was constituted to investigate the charges against respondents. In their Answer[9] dated May 27, 2002, respondents denied the charges against them. Instead, they averred that petitioner was motivated by vindictiveness and bad faith in charging them falsely. They likewise opposed their preventive suspension for lack of factual and legal basis. They strongly expressed their opposition to petitioner acting as complainant, prosecutor and judge. On May 28, 2002, respondents filed with the Civil Service Commission (CSC) an Urgent Petition to Lift Preventive Suspension Order.[10] They contended that the acts they allegedly committed were arbitrarily characterized as grave misconduct. Consistent with their stand that petitioner could not act as the complainant, prosecutor and judge at the same time, respondents filed with the CSC a Petition to Transfer Investigation to This Commission.[11] Meanwhile, the GSIS hearing officer directed petitioners to submit to the jurisdiction of the investigating committee and required them to appear at the scheduled hearing.[12]

Despite their urgent motions, the CSC failed to resolve respondents’ motions to lift preventive suspension order and to transfer the case from the GSIS to the CSC. On October 10, 2002, respondents filed with the CA a special civil action for certiotari and prohibition with prayer for Temporary Restraining Order (TRO).[13] The case was docketed as CA-G.R. SP No. 73170. Respondents sought the annulment and setting aside of petitioner’s order directing the former to submit to the jurisdiction of the committee created to hear and investigate the administrative case filed against them. They likewise prayed that petitioner (and the committee) be prohibited from conducting the scheduled hearing and from taking any action on the aforesaid administrative case against respondents.

On January 2, 2003, the CA rendered a decision[14] in favor of respondents,

ISSUE: WHETHER OR NOT THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN FINDING THAT THE PETITIONERS ABUSED THEIR AUTHORITY AND HAVE BEEN PARTIAL IN REGARD TO THE ADMINISTRATIVE CASES AGAINST THE RESPONDENTS; AND IN PERPETUALLY RESTRAINING THE PETITIONERS FROM HEARING AND INVESTIGATING THE ADMINISTRATIVE CASES FILED AGAINST THE RESPONDENTS – SOLELY ON THE BASIS OF THE TOTALLY UNFOUNDED ALLEGATIONS OF THE RESPONDENTS THAT THE PETITIONERS ARE PARTIAL AGAINST THEM.

HELD:

Due process; decision rendered without due process.

The violation of a party’s right to due process raises a serious jurisdictional issue that cannot be glossed over or disregarded at will. Where the denial of the fundamental right to due process is apparent, a decision rendered in disregard of that right is void for lack of jurisdiction. This rule is equally true in quasi-judicial and administrative proceedings, for the constitutional guarantee that no man shall be deprived of life, liberty, or property without due process is unqualified by the type of proceedings (whether judicial or administrative) where he stands to lose the sameLabor Procedure


CSC; rules for dismissal. The filing of formal charges against the

respondents without complying with the mandated preliminary investigation or at least giving the respondents the opportunity to comment violated the latter’s right to due process. These rules on due process apply even in cases where the complainant is the disciplining officer himself, as in this case. The fact that the charges against the respondents are serious or that the evidence of their guilt is strong cannot compensate for the procedural shortcut undertaken by petitioner.

26.Erector Advertsing Sign Group, Inc. v. NLRC, G.R. No. 167218, July 2, 2010

G.R. No. 167218July 2, 2010

FACTS: Petitioner Erector Advertising Sign Group, Inc. is a domestic corporation engaged in the business of constructing billboards and advertising signs. Sometime in the middle of 1996, petitioner engaged the services of Expedito Cloma (Cloma) as company driver and the latter had served as such until his dismissal from service in May 2000.[4] In his Complaint[5] filed with the National Labor Relations Commission (NLRC), Cloma alleged that he was illegally suspended and then dismissed from his employment without due process of law. He likewise claimed his unpaid monetary benefits such as overtime pay, premium pay for worked rest days, service incentive leave pay and 13th month pay, as well as moral, exemplary and actual damages and attorneys fees.

It is conceded by petitioner that Cloma has been suspended several times from work due to frequent tardiness and absenteeism, but the instant case appears to be likewise the result of documented instances of absenteeism without prior notice to and approval from his superior, and of misbehavior. The former happened between May 12 and May 15, 2000 when Cloma supposedly failed to report for work without prior notice and prior leave approval[6] which thus effectively prevented the other workers from being transported to the job site as there was no other driver available; whereas the latter incident happened on May 11, 2000 when

allegedly, Cloma, without authority, suddenly barged into the premises of the Outright Division and, without being provoked, threatened the employees with bodily harm if they did not stop from doing their work.[7] This second incident was supposedly narrated fully in a letter dated May 13, 2000 addressed to the personnel manager and signed by one Victor Morales and Ruben Que.[8]

The NLRC pointed out that not only was Cloma dismissed without due process but also, that he was dismissed without just cause. The NLRC based its finding on the termination letter served by petitioner on Cloma such that with respect to the first ground of termination

Hence, this petition,

ISSUE: whether Cloma was dismissed with just cause and with due process of law.

HELD:

We find no merit in the petition.

The validity of an employee’s dismissal from service hinges on the satisfaction of the two substantive requirements for a lawful termination. These are, first, whether the employee was accorded due process the basic components of which are the opportunity to be heard and to defend himself. This is the procedural aspect. And second, whether the dismissal is for any of the causes provided in the Labor Code of the Philippines. This constitutes the substantive aspect.[27]

With respect to due process requirement, the employer is bound to furnish the employee concerned with two (2) written notices before termination of employment can be legally effected. One is the notice apprising the employee of the particular acts or omissions for which his dismissal is sought and this may loosely be considered as the proper charge. The other is the notice informing the employee of the management’s decision to sever his employment. This decision, however, must come only after the employee is given a reasonable period from receipt of the first notice within which to answer the charge, thereby giving him ample opportunity to be heard and defend himself with the assistance of his representative should he so desire. The requirement of notice,


it has been stressed, is not a mere technicality but a requirement of due process to which every employee is entitled.[28]

In this case, we find that Cloma’s dismissal from service did not comply with this basic precept.

Finally, anent the charge that Cloma had terrorized the staff of the Outright Division and incited a work stoppage, it is clear, from the May 17, 2000 suspension order, that he has already been penalized with suspension for this offense and, hence, this act may no longer be added to support the imposition of the ultimate penalty of dismissal from service nor may it be used as an independent ground to that end.[30]

All told, we find that no error has been committed by the Court of Appeals in ruling that Cloma’s dismissal from service was both without just cause and without due process of law.

WHEREFORE, the petition is DENIED.

27

G.R. No. 167401 : July 5, 2010BAGONG PAGKAKAISA NG MANGGAGAWA

NG TRIUMPH INTERNATIONAL, represented by SABINO F. GRAGANZA,

Union President, and REYVILOSA TRINIDAD, Petitioners, vs. SECRETARY OF

THE DEPARTMENT OF LABOR AND EMPLOYMENT and TRIUMPH

INTERNATIONAL (PHILS.), INC., Respondents.

FACTS: The union and the company had a collective bargaining agreement (CBA) that expired on July 18, 1999. Theunion seasonably submitted proposals to the company for its renegotiation. Among these proposals were economic demands for a wage increase of P180.00 a day, spread over three (3) years, as follows: P70.00/day from July 19, 1999 ; P60.00/day from July 19, 2000, and P50.00/day from July 19, 2001. The company countered with a wage increase offer, initially at P42.00 for three years, then increased it to P45.00, also for three years.

The negotiations reached a deadlock, leading to a Notice of Strike the union filed on October 15, 1999 .7cralaw The National Conciliation and

Mediation Board (NCMB ) exerted efforts but failed to resolve the deadlock.

On November 15, 1999, the company filed a Notice of Lock-out8cralaw for unfair labor practice due to the union's alleged work slowdown. The unionwent on strike three days later, or on November 18, 1999.

On February 2 and 3, 2000, several employees attempted to report for work, but the striking employees prevented them from entering the company premises. The Labor Secretary reiterated his directives in another order dated February 22, 2000 ,11cralaw and deputized Senior Superintendent Manuel A. Cabigon, Director of the Southern Police District, " to assist in the peaceful and orderly implementation of this Order ."

On June 8, 2000, the union and the officers filed a petition to cite the company and its responsible officers for contempt, and moved that a reinstatement order be issued.23cralaw They claimed that: (1) the company officials violated the Labor Secretary's return-to-work order when these officials placed them under preventive suspension and refused them entry into the company premises; (2) the company also violated the March 9, 2000 order of the Labor Secretary when they were reinstated only in the payroll; and (3) the company committed unfair labor practice and dismissed them without basis.

The union's other economic demands and non-economic proposals were all denied.

The CA found the petition partly meritorious. It affirmed the Labor Secretary's wage increase award, but modified his ruling on the dismissal of the union officers.33

ISSUE:

The Illegal Dismissal Issue

Before we rule on the substantive aspect of this issue, we deem it proper to resolve first the company's submission that the CA erred: (1) in ruling that the Labor Secretary gravely abused his discretion in not deciding the dismissal issue; and, (2) in deciding the factual issue itself, instead of remanding the case, thereby depriving it of the right to present evidence on the matter.


HELD:

We agree with the CA's conclusion that the Labor Secretary erred, to the point of abusing his discretion, when he did not resolve the dismissal issue on the mistaken reading that this issue falls within the jurisdiction of the labor arbiter. This was an egregious error and an abdication of authority on the matter of strikes - the ultimate weapon in labor disputes that the law specifically singled out under Article 263 of the Labor Code by granting the Labor Secretary assumption of jurisdiction powers. Article 263(g) is both an extraordinary and a preemptive power to address an extraordinary situation - a strike or lockout in an industry indispensable to the national interest. This grant is not limited to the grounds cited in the notice of strike or lockout that may have preceded the strike or lockout; nor is it limited to the incidents of the strike or lockout that in the meanwhile may have taken place. As the term "assume jurisdiction" connotes, the intent of the law is to give the Labor Secretary full authority to resolve all matters within the dispute that gave rise to or which arose out of the strike or lockout; it includes and extends to all questions and controversies arising from or related to the dispute, including cases over which the labor arbiter has exclusive jurisdiction.54

In the present case, what the Labor Secretary refused to rule upon was the dismissal from employment that resulted from the strike. Article 264 significantly dwells on this exact subject matter by defining the circumstances when a union officer or member may be declared to have lost his employment. We find from the records that this was an issue that arose from the strike and was, in fact, submitted to the Labor Secretary, through the union's motion for the issuance of an order for immediate reinstatement of the dismissed officers and the company's opposition to the motion. Thus, the dismissal issue was properly brought before the Labor Secretary and this development in fact gave rise to his mistaken ruling that the matter is legally within the jurisdiction of the labor arbiter to decide.

For having participated in a prohibited activity not once, but twice, the union officers, except those our Decision can no longer reach because of the amicable settlement they entered into with the company, legally deserve to be dismissed

from the service. For failure of the company, however, to prove by substantial evidence the illegal acts allegedly committed by Rosalinda Olangar, who is a shop steward but not a union officer, we find her dismissal without a valid cause.

28.G.R. No. 188223 : July 5, 2010

SENTINEL INTEGRATED SERVICES, INC., Petitioner, vs. RIO JOSE REMO, Respondent.

BRION, J.:

FACTS: Sentinel Integrated Services, Inc. (Sentinel) challenges, in this petition for review on certiorari,1cralaw cralawthe decision2cralaw cralawand the resolution3cralaw cralawof February 12, 2009 and June 3, 2009, respectively, of the Court of Appeals (CA) in CA-G.R. SP No. 99550.cra4

The challenged CA rulings reversed and set aside the resolution of the National Labor Relations Commission (NLRC) dated January 31, 2007,5cralaw cralawthat in turn affirmed the labor arbiter's decision dated January 31, 2006.cra6cralaw cralawThe labor arbiter's decision upheld the dismissal of respondent Rio Jose Remo (Remo) on the ground of retrenchment. (Remo served Sentinel for almost twenty [20] years, commencing employment on March 21, 1986 as a janitor, and rising to the position of operations officer in 2005.)chanroblesvirtualawlibray

The CA Decision

The CA ruled that the NLRC committed grave abuse of discretion in upholding Remo's dismissal on the ground of retrenchment. The appellate court found that Sentinel failed to discharge the burden of proving that the losses it incurred warranted Remo's dismissal. The CA rejected Sentinel's financial statements from 1995 to 2005 (which were submitted during the compulsory arbitration) in the absence of evidence that these were "fully audited by an independent external auditor." Also, it held that the NLRC should not have factored in the P5 million awarded by this Court in another case7cralaw cralawas an actual loss because the award, although final, could still be the subject of compromise. The CA considered the hiring of a replacement (Marcelo Albay) for Remo, as an


indication that Sentinel's financial distress was not as serious as it claimed, and that retrenchment was not the actual reason for Remo's dismissal. Lastly, the CA pointed out that there was no showing that other less drastic means had been tried and found insufficient or inadequate before Sentinel resorted to retrenchment - a jurisprudential requisite in retrenchments.cra8cralaw cralawIt, therefore, opined that Sentinel did not act in good faith in terminating Remo's employment.

Court's Ruling We resolve to deny the petition for lack of merit.

We find, after considering the records and the parties' submissions, that although the CA focused more on the retrenchment aspect of the disputed dismissal, it still committed no reversible error in nullifying the NLRC resolution as it found grave abuse of discretion in the labor tribunal's gross misappreciation of the other adduced evidence.

The labor tribunals glossed over this misrepresentation and failed to appreciate it for what it was - an act of active bad faith that fatally tainted Remo's dismissal and rendered it illegal. We note that the CA correctly noted this fatal flaw when it stated that, "If this was so, then the termination of [Remo] should not have been attributed to retrenchment."12cralaw cralawThis finding totally renders any further discussion of Sentinel's submitted financial statements and its audit-related issues unnecessary.

ISSUE: W/N Remo's dismissal is valid on the ground of retrenchment?

HELD: As a rule, an illegal dismissal merits the penalty of reinstatement and the payment of backwages from the time of dismissal up to actual reinstatement.cra13cralaw cralawConsidering, however, the sensitive nature of Remo's position, viewed in light of what had transpired between the parties, we deem it appropriate to order the payment of separation pay in lieu of reinstatement, computed from the time of Remo's dismissal up to the time of finality of this Decision.cra14cralaw cralawThis is the same result that the CA decreed, although not for the same reason and under a computation reckoned from the finality of its own decision.

WHEREFORE, premises considered, we AFFIRM the challenged decision and resolution of the Court of Appeals in CA-G.R. SP No. 99550, with MODIFICATION with respect to the exact basis for the finding of illegality and the computation of separation pay of one month pay for every year of service which should be from the date of the respondent's dismissal up to the finality of this Decision.

SO ORDERED.

29. G.R. No. 170464 : July 12, 2010

LAMBERT PAWNBROKERS and JEWELRY CORPORATION and LAMBERT LIM,

Petitioners, vs. HELEN BINAMIRA, Respondent.

DEL CASTILLO, J.:

It is fundamental that an employer is liable for illegal dismissal when it terminates the services of the employee without just or authorized cause and without due process of law.

FACTS: Petitioner Lambert Lim (Lim) is a Malaysian national operating various businesses in Cebu and Bohol one of which is Lambert Pawnbrokers and Jewelry Corporation. Lim is married to Rhodora Binamira, daughter of Atty. Boler Binamira, Sr., (Atty. Binamira), who is also the counsel and father-in-law of respondent Helen Binamira (Helen). Lambert Pawnbrokers and Jewelry Corporation - Tagbilaran Branch hired Helen as an appraiser in July 1995 and designated her as Vault Custodian in 1996.

On September 14, 1998, Helen received a letter5cralaw from Lim terminating her employment effective that same day. Lim cited business losses necessitating retrenchment as the reason for the termination.

Helen thus filed a case for illegal dismissal against petitioners docketed as NLRC RAB-VII CASE NO. 01-0003-99-B.6cralaw In her Position Paper7cralaw Helen alleged that she was dismissed without cause and the benefit of due process. She claimed that she was a mere

http://www.chanrobles.com/scdecisions/jurisprudence2010/july2010/170464.php#rnt7




casualty of the war of attrition between Lim and the Binamira family. Moreover, she claimed that there was no proof that the company was suffering from business losses.

In their Position Paper,8cralaw petitioners asserted that they had no choice but to retrench respondent due to economic reverses. The corporation suffered a marked decline in profits as well as substantial and persistent increase in losses. In its Statement of Income and Expenses, its gross income for 1998 dropped from P1million to P665,000.00.

Ruling of the Labor Arbiter On November 26, 1999, Labor Arbiter Geoffrey P. Villahermosa rendered a Decision9cralaw which held that Helen was not illegally dismissed but was validly retrenched. The dispositive portion of the Labor Arbiter's Decision reads:chan robles virtual law library

Ruling of the NLRC On appeal, the NLRC reversed and set aside the Decision of the Labor Arbiter. It observed that for retrenchment to be valid, a written notice shall be given to the employee and to the Department of Labor and Employment (DOLE) at least one month prior to the intended date thereof. Since none was given in this case, then the retrenchment of Helen was not valid. The dispositive portion of the Decision law library

Ruling of the Court of Appeals On petition for certiorari,16cralaw the CA found that both the Labor Arbiter and the NLRC failed to consider substantial evidence showing that the exercise of management prerogative, in this instance, was done in bad faith and in violation of the employee's right to due process. The CA ruled that there was no redundancy because the position of vault custodian is a requisite, necessary and desirable position in the pawnshop business. There was likewise no retrenchment because none of the conditions for retrenchment is present in this case.

Issue

Whether the CA gravely erred in reversing, through the extra-ordinary remedy of certiorari, the findings of facts of both the Labor Arbiter

and the NLRC that the dismissal of respondent was with valid and legal basis.

RULE:

The petition is without merit.

There was no valid dismissal based on retrenchment.

Retrenchment is the termination of employment initiated by the employer through no fault of and without prejudice to the employees. It is resorted to during periods of business recession, industrial depression, seasonal fluctuations, or during lulls occasioned by lack of orders, shortage of materials, conversion of the plant to a new production program, or automation.21cralaw It is a management prerogative resorted to avoid or minimize business losses, and is recognized by Article 283 of the Labor Code, which reads:chan robles virtual law library

Art. 283. Closure of establishment and reduction of personnel.- The employer may also terminate the employment of any employee due to x x x retrenchment to prevent losses or the closing or cessation of operations of the establishment x x x by serving a written notice on the worker and the DOLE at least one month before the intended date thereof. x x x In case of retrenchment to prevent losses, the separation pay shall be equivalent to one (1) month pay or at least one-half month for every year of service whichever is higher. x x x (Emphasis ours)

To effect a valid retrenchment, the following elements must be present: (1) the retrenchment is reasonably necessary and likely to prevent business losses which, if already incurred, are not merely de minimis, but substantial, serious and real, or only if expected, are reasonably imminent as perceived objectively and in good faith by the employer; (2) the employer serves written notice both to the employee/s concerned and the DOLE at least one month before the intended date of retrenchment; (3) the employer pays the retrenched employee separation pay in an amount prescribed by the Code; (4) the employer exercises its prerogative to retrench in good faith; and (5) the employer uses fair and






reasonable criteria in ascertaining who would be retrenched or retained.22

There was no valid dismissal based on redundancy.

Redundancy, on the other hand, exists when the service capability of the workforce is in excess of what is reasonably needed to meet the demands of the enterprise. A redundant position is one rendered superfluous by any number of factors, such as over hiring of workers, decreased volume of business, dropping of a particular product line previously manufactured by the company, or phasing out of a service activity previously undertaken by the business. Under these conditions, the employer has no legal obligation to keep in its payroll more employees than are necessary for the operation of its business.24

For the implementation of a redundancy program to be valid, the employer must comply with the following requisites: (1) written notice served on both the employees and the DOLE at least one month prior to the intended date of termination of employment; (2) payment of separation pay equivalent to at least one month pay for every year of service; (3) good faith in abolishing the redundant positions; and (4) fair and reasonable criteria in ascertaining what positions are to be declared redundant and accordingly abolished.25

Lambert Pawnbrokers and Jewelry Corporation is solely liable for the illegal dismissal of respondent.

As a general rule, only the employer-corporation, partnership or association or any other entity, and not its officers, which may be held liable for illegal dismissal of employees or for other wrongful acts. This is as it should be because a corporation is a juridical entity with legal personality separate and distinct from those acting for and in its behalf and, in general, from the people comprising it.27cralaw A corporation, as a juridical entity, may act only through its directors, officers and employees. Obligations incurred as a result of the directors' and officers' acts as corporate agents, are not their personal liability but the direct responsibility of the corporation they represent.28cralaw It is settled that in the absence of malice and bad faith, a

stockholder or an officer of a corporation cannot be made personally liable for corporate liabilities. 29cralaw They are only solidarily liable with the corporation for the illegal termination of services of employees if they acted with malice or bad faith. In Philippine American Life and General Insurance v. Gramaje,30 bad faith is defined as a state of mind affirmatively operating with furtive design or with some motive of self-interest or ill will or for ulterior purpose. It implies a conscious and intentional design to do a wrongful act for a dishonest purpose or moral obliquity.

In the present case, malice or bad faith on the part of Lim as a corporate officer was not sufficiently proven to justify a ruling holding him solidarily liable with the corporation. The lack of authorized or just cause to terminate one's employment and the failure to observe due process do not ipso facto mean that the corporate officer acted with malice or bad faith. There must be independent proof of malice or bad faith which is lacking in the present case.

30. MARIBAGO BLUEWATER BEACH RESORT, INC - versus - NITO DUAL,

G.R. NO. 180660 July 20, 2010FACTS:

Petitioner Maribago is a corporation operating a resort hotel and restaurant in Barangay Maribago, Lapu-Lapu City. 1995[3], it hired respondent Dual as waiter and promoted him later as outlet cashier of its Poolbar/Allegro Restaurant.[4]

On 9 January 2005, around 6:30 p.m., a group of Japanese guests and their companions dined at Allegro.[5] Captain waiter Alvin Hiyas (Hiyas for brevity) took their dinner orders comprising of six (6) sets of lamb and six (6) sets of fish. As per company procedure, Hiyas forwarded one copy of the order slip to the kitchen and another copy to respondent.[6] Pursuant to the order slip, fourteen (14) sets of dinner were prepared by the chef. Hiyas and waiter Genaro Mission, Jr. (Missionfor brevity) served twelve (12) set dinners to the guests, and another two (2) sets to their guides[7] free of charge(total of 14 sets of dinner).

After dinner, at around 9:00 p.m., the guests asked for their bill. Since Hiyas was attending to









other guests, he gave a signal to Mission to give the bill. Missionasked respondent Dual for the sales transaction receipt and presented this to the guests. The guests paid the amount indicated on the receipt and thereafter left in a hurry.[8]

In view of the discrepancy between the order slip and the receipt issued, petitioner Maribago, through its Human Resource Development (HRD) manager, issued memoranda, all dated 12 January 2005, requiring respondent Dual, Alvin Hiyas, Ernesto Avenido and Basilio Alcoseba to explain why they should not be penalized for violating House

After the investigation, respondent Dual was found guilty of dishonesty for his fabricated statements and for asking one of the waiters (Mission) to corroborate his allegations. He was terminated per memorandum dated 22 January 2005. Alcoseba was also terminated for dishonesty based on his admission that he altered the order slip.[11]

Respondent Dual confirms that the orders were for six (6) sets of lamb dinner and six (6) sets of fish dinner. He, however, alleges that four (4) sets were cancelled and two (2) sets were given to the guides for free. He was able to confirm the cancellation with Alcoseba and Hiyas. Hence, he received the payment for the six (6) sets only.[12]

He avers that when he noticed the alteration in the order slip, he verified this with Mission. The latter allegedly told him that the order slip was handed by Alcoseba. Respondent further avers that he went to see Alcoseba who, in turn, told him that some orders were cancelled because some of the companions of the Japanese guests did not take their dinner. Upon verification from chief waiter Hiyas, he was allegedly told that the sets of dinner were indeed cancelled and placed in the utensil station. According to respondent, he checked the utensil station and found the

Petitioner Maribago submits that the transaction receipt handed to Mission by respondent Dual amounted to P10,100.00 (more or less). The guests allegedly gave Mission P10,500.00 with the instruction to return only P200.00. The rest can be kept by the waiter as tip.

Mission then handed Dual the P10,500.00 and relayed the guests’ instruction. Dual handed Mission the P200.00 which the latter gave to the guests.

It was discovered later that only P3,036.00 was entered by Dual in the cash register. The rest of the payment was missing. The original transaction receipt for P10,100.00 was likewise missing and in its place, only a transaction receipt for P3.036.00 was registered. Upon verification, it was also found out that the order slip was tampered by Alcoseba to make it appear that only six (6) set dinners were ordered.

According to petitioner, on 14 January 2005, Dual and Alcoseba tried to convince Mission to say that he altered the order slip from twelve (12) sets of dinner to six (6) sets.[13] Mission did not report for work and did not attend the 15 January 2005 clarificatory hearing since he could not “in conscience” tell a lie.[14] At past 11:00 p.m. of 15 January 2005, Dual met Mission and tried again to convince him to say that only six (6) sets of dinner were ordered.[15] Mission reported on 16 January 2005 and attended the hearing that day. Dual was not present.[16]

On 3 February 2005, Dual filed a complaint[17] for unfair labor practice, illegal dismissal, non-payment of 13th month and separation pay, and damages before the NLRC, Regional Arbitration Branch No. VII, Cebu City.

The Labor Arbiter found that respondent’s termination was without valid cause and ruled that respondent is entitled to separation pay, to wit:

The NLRC set aside the Labor Arbiter’s decision and dismissed the complaint, to wit:

WHEREFORE, premises considered, the decision of the Labor Arbiter dated 03 August 2005 is VACATED and SET ASIDE and the complainant’s complaint is DISMISSEDfor lack of merit.[19]

It ruled that complainant’s act of depriving respondent of its lawful revenue is tantamount to fraud against the company which warrants dismissal from the service.[21] Falsification of commercial documents as a means to malverse


company funds constitutes fraud against the company.[22]

The Court of Appeals reversed the decision and resolution of the NLRC. Finding no sufficient valid cause to justify respondent’s dismissal, the Court of Appeals ordered petitioner to pay respondent full backwages and separation pay, as follows:

ISSUE:

WHETHER OR NOT THE COURT OF APPEALS COMMITTED A GRAVE AND REVERSIBLE ERROR IN REVERSING THE NATIONAL LABOR RELATIONS COMMISSION AND DIRECTING PETITIONER TO PAY RESPONDENT FULL BACKWAGES FROM THE TIME HE WAS ILLEGALLY DISMISSED, UP TO THE FINALITY OF [ITS] DECISION AND SEPARATION PAY OF ONE MONTH SALARY FOR EVERY YEAR OF SERVICE.[24]

In essence, the issue is whether the Court of Appeals erred in ruling that respondent was illegally dismissed.

HELD:

After a full review of the case, we are constrained to reverse the Court of Appeals.

The law requires that an employer shall not terminate the services of an employee except for a just or authorized cause. Otherwise, an employee unjustly dismissed from work is entitled to reinstatement and full backwages.[32] The law also requires the employer to observe due process in termination cases.[33] InAgabon v. National Labor Relations Commission,[34] we ruled that violation of the employee’s statutory right to due process makes the employer liable to pay indemnity in the form of nominal damages. The law further requires that the burden of proving the cause for termination rests with the employer.[35]

Withal, the law, in protecting the rights of the laborers, authorizes neither oppression nor self-destruction of the employer. While the Constitution is committed to the policy of social justice and the protection of the working class, it should not be supposed that every labor dispute will be automatically decided in favor of

labor. The management also has its own rights, as such, are entitled to respect and enforcement in the interest of simple fair play. Out of its concern for those with less privileges in life, the Supreme Court has inclined more often than not toward the worker and upheld his cause in his conflicts with the employer. Such favoritism, however, has not blinded the Court to the rule that justice is in every case for the deserving, to be dispensed in the light of the established facts and applicable law and doctrine.[38]

Regarding the due process requirement, petitioner had complied with it as clearly shown by the facts.

WHEREFORE, the petition is GRANTED. The assailed Decision and Resolution dated 7 March 2007 and 30 July 2007, respectively, of the Court of Appeals in CA-G.R. SP No. 02062 are REVERSED and SET ASIDE. The complaint of respondent Nito Dual is DISMISSED.

31.G.R. No. 172988 : July 26, 2010

JOSE P. ARTIFICIO, Petitioner, vs. NATIONAL LABOR RELATIONS

COMMISSION, RP GUARDIANS SECURITY AGENCY, INC., JUAN VICTOR K. LAURILLA,

ALBERTO AGUIRRE, and ANTONIO A. ANDRES, Respondents.

FACTS: Petitioner Jose P. Artificio was employed as security guard by respondent RP Guardians Security Agency, Inc., a corporation duly organized and existing under Philippine Laws and likewise duly licensed to engage in the security agency business.

Sometime in June 2002, Artificio had a heated argument with a fellow security guard, Merlino B. Edu (Edu). On 25 July 2002, Edu submitted a confidential report5cralaw to Antonio A. Andres (Andres), Administration & Operations Manager, requesting that Artificio be investigated for maliciously machinating Edu's hasty relief from his post and for leaving his post during night shift duty to see his girlfriend at a nearby beerhouse.

On 29 July 2002, another security guard, Gutierrez Err (Err), sent a report 6cralaw to Andres stating that Artificio arrived at the office of RP Guardians Security Agency, Inc. on 25 June 2002, under the influence of liquor. When Artificio learned that no salaries would be given


that day, he bad-mouthed the employees of RP Guardians Security Agency, Inc. and threatened to "arson" their office.

Andres informed Artificio that a hearing will be held on 12 August 2002.cra9

Without waiting for the hearing to be held, Artificio filed on 5 August 2002, a complaint for illegal dismissal, illegal suspension, non-payment of overtime pay, holiday pay, premium pay for holiday and rest days, 13th month pay, and damages. He also prayed for payment of separation pay in lieu of reinstatement.cra10

After hearing, the Labor Arbiter rendered a decision dated 6 October 2003, finding respondents guilty of illegal suspension and dismissal. It ruled that Edu's allegation of irregularity in the observance of relieving time was not specifically detailed. Since Edu had an axe to grind against Artificio, his allegation should be taken with utmost caution. It was also held that Artificio should have been allowed to confront Edu and Err before he was preventively suspended. Since he was denied due process, his preventive suspension was illegal. Such preventive suspension ripened into illegal dismissal. LA rendered declaring respondents guilty of illegal suspension/lay-off and illegal dismissal.

On appeal, the NLRC, in a Decision13cralaw dated 31 August 2004, set aside the decision of the Labor Arbiter. It ruled that the Labor Arbiter erred in considering preventive suspension as a penalty. While it is true that preventive suspension can ripen into constructive dismissal when it goes beyond the 30-day maximum period allowed by law, such is not prevailing in this case since Artificio immediately filed a complaint before the labor tribunal. It added that it was Artificio who terminated his relationship with respondents when he asked for separation pay in lieu of reinstatement although he has not yet been dismissed. The NLRC clarified further that: virtual law library

x x x While it is true that preventive suspension can ripen into a constructive dismissal when such goes beyond the 30 day maximum period allowable by law, such is not prevailing in the case at bar as it was complainant who chose to file a complaint and have due process before the

courts of law. It was complainant who terminated the relationship with respondents by asking for separation pay in lieu of reinstatement when the fact of dismissal has not yet happened. From the documents presented, complainant was put on preventive suspension pending investigation of company violations which were supported by documentary evidences on July 29, 2002. He was set to be heard on August 12, 2002 but before the respondents could hear his side, he filed this instant complaint on August 5, 2002, pre-empting the administrative investigation undertaken by respondents.cra14cralaw

ISSUE: WHETHER OR NOT PETITIONER MAY BE TERMINATED FROM HIS EMPLOYMENT ON THE VERY DATE HE RECEIVED A LETTER FOR HIS PURPORTED RELIEF WITHOUT FIRST BEING GIVEN AN OPPORTUNITY TO ANSWER THE CHARGES LEVELED AGAINST HIM AND BEING INFORMED OF [THE] NATURE AND CAUSE OF HIS DISMISSAL.

Artificio maintains that he was illegally suspended since his preventive suspension was for an indefinite period and was imposed without investigation. He also argues that he was illegally dismissed because the charges against him were couched in general and broad terms. Further, he was not given any notice requiring him to explain his side.

Respondents counter that Artificio was not dismissed but merely placed under preventive suspension pending investigation of the charges against him.

As succinctly stated above, preventive suspension is justified where the employee's continued employment poses a serious and imminent threat to the life or property of the employer or of the employee's co-workers. Without this kind of threat, preventive suspension is not proper.cra19

In this case, Artificio's preventive suspension was justified since he was employed as a security guard tasked precisely to safeguard respondents' client. His continued presence in respondents' or its client's premises poses a serious threat to respondents, its employees and client in light of the serious allegation of conduct unbecoming a security guard such as abandonment of post during night shift duty, light threats and


irregularities in the observance of proper relieving time.

Besides, as the employer, respondent has the right to regulate, according to its discretion and best judgment, all aspects of employment, including work assignment, working methods, processes to be followed, working regulations, transfer of employees, work supervision, lay-off of workers and the discipline, dismissal and recall of workers. Management has the prerogative to discipline its employees and to impose appropriate penalties on erring workers pursuant to company rules and regulations.

This Court has upheld a company's management prerogatives so long as they are exercised in good faith for the advancement of the employer's interest and not for the purpose of defeating or circumventing the rights of the employees under special laws or under valid agreements.cra20cralawArtificio is entitled to separation pay considering that while reinstatement is an option, Artificio himself has never, at anytime after the notice of preventive suspension intended to remain in the employ of private respondents.

WHEREFORE, the instant petition is PARTIALLY GRANTED. The Decision dated 31 March 2006, as well as the Resolution dated 1 June 2006, of the Court of Appeals in CA-G.R. SP No. 88188 are hereby AFFIRMED with the modification that, in lieu of reinstatement, separation pay be granted to Artificio computed at the rate of one (1) month pay for every year of service reckoned from the start of his employment with the respondents in 1986 until 2002.

32. Golden Ace Builders vs. Jose A. TaldeGR No. 187200; May 5, 2010

Facts: Jose Tadle was hired in 1990 as a carpenter by petitioner Golden Ace Builders. In February 1999, petitioner, alleging the unavailability of construction projects, stopped giving work assignments to respondent, prompting the latter to file a complaint for illegal dismissal. The Labor Arbiter ruled in favor of Talde and his immediate reinstatement without loss of seniority rights and other privileges, and with payment of full back wages. Pending appeal with the NLRC and in compliance with the Labor Arbiter’s decision, petitioner advised Talde to report for work in the construction site. Talde

however submitted a a manifestation to the Labor Arbiter that actual animosities existed between him and petitioners and there had been threats to his life and his family’s safety, hence, he opted for the payment of separation pay.

The NLRC dismissed the appeal holding that respondent was a regular employee and not a project employee, and that there was no valid ground for the termination of his services. The petitioner and Talde were then referred to the Fiscal Examiner of the NLRC for the recomputation of the amount due to Talde. The NLRC ruled that since respondent did not appeal the Decision of the Labor Arbiter granting him only reinstatement and backwages, not separation pay in lieu thereof, he may not be afforded affirmative relief; and since he refused to go back to work, he may recover backwages only up to May 20, 2001, the day he was supposed to return to the job site.

The CA set aside the Resolution of the NLRC holding that Talde is entitled to both backwages and separation pay, even if separation pay was not granted by the Labor Arbiter, the latter in view of the strained relations between the parties.

Issue:

Is Talde entitled to separation pay?

Ruling:

Yes. The basis for the payment of backwages is different from that for the award of separation pay. Separation pay is granted where reinstatement is no longer advisable because of strained relations between the employee and the employer. Backwages represent compensation that should have been earned but were not collected because of the unjust dismissal. The basis for computing backwages is usually the length of the employee’s service while that for separation pay is the actual period when the employee was unlawfully prevented from working.

Under Article 279 of the Labor Code and as held in a catena of cases, an employee who is dismissed without just cause and without due process is entitled to backwages and reinstatement or payment of separation pay in lieu thereof. The accepted doctrine is that


separation pay may avail in lieu of reinstatement if reinstatement is no longer practical or in the best interest of the parties. Separation pay in lieu of reinstatement may likewise be awarded if the employee decides not to be reinstated.

Under the doctrine of strained relations, the payment of separation pay is considered an acceptable alternative to reinstatement when the latter option is no longer desirable or viable. On one hand, such payment liberates the employee from what could be a highly oppressive work environment. On the other hand, it releases the employer from the grossly unpalatable obligation of maintaining in its employ a worker it could no longer trust.

Strained relations must be demonstrated as a fact, however, to be adequately supported by substantial evidence. In the present case, the Labor Arbiter found that actual animosity existed between petitioner and Talde as a result of the filing of the illegal dismissal case. Such finding, especially when affirmed by the appellate court as in the case at bar, is binding upon the Court.

Clearly then, respondent is entitled to backwages and separation pay as his reinstatement has been rendered impossible due to strained relations. As correctly held by the appellate court, the backwages due respondent must be computed from the time he was unjustly dismissed until his actual reinstatement, or from February 1999 until June 30, 2005 when his reinstatement was rendered impossible without fault on his part.

As to the computation of separation pay, petitioner was hired in 1990, however, and he must be considered to have been in the service not only until 1999, when he was unjustly dismissed, but until June 30, 2005, the day he is deemed to have been actually separated (his reinstatement having been rendered impossible) from petitioner company or for a total of 15 years. Thus, Talde is entitled to separation pay for 15 years.

33. Caltex vs. AgadG.R. 162017, APRIL 23, 2010

Facts:

Petitioner Caltex Philippines, Inc. (Caltex) employed respondent Hermie G. Agad (Agad) as Depot Superintendent-A on a probationary basis for six months. On 28 February 1984, Agad became a regular employee. After Agad had served for two years since 1990 as Superintendent of the Tacloban Bulk Depot (Depot) in Leyte, Caltex transferred Agad to Bauan Bulk Depot in Batangas effective 16 May 1992. To transfer his belongings from Leyte to Batangas, Agad secured the carpentry services of Alfredo Delda (Delda), the owner of A.A. Delda Engineering Services (Delda Services) for the construction of two crates. Agad paid Delda P15,500, evidenced by Official Receipt and submitted the receipt and Caltex reimbursed him the said amount.

Caltex conducted its regular audit of employees’ account and expenses. The company auditor of Caltex verified the crating expense incurred by Agad with Delda. Delda alleged that he was forced by Agad to issue the official receipt in order to get a favorable recommendation from the incoming superintendent of the Depot.

In another audit report, the company auditor declared that 190 pieces of 11 kg. liquefied petroleum gas (LPG) cylinders from the Depot were allegedly withdrawn when Agad was still depot superintendent In a Confidential Memorandum, Agad was informed of his dismissal on the grounds of serious misconduct and loss of trust and confidence. The LA held that there were no just causes for Agad’s termination of employment. The NLRC reversed the decision of the LA and held that there existed just causes which justified Agad’s dismissal. Agad filed a Motion for Reconsideration which was denied. He then filed a petition for certiorari under Rule 65 with the CA for the nullification of the decision of the NLRC. The CA modified the judgment of the NLRC and ruled in favor of Agad. Caltex filed a Motion for Reconsideration which was denied. Hence, the instant petition.

Issue:

Did Caltex legally terminate Agad’s employment on just causes?

Ruling:


The findings of the CA and National Labor Relations Commission (NLRC) establish the following: (1) Agad’s request for withdrawal of the 190 cylinders of LPG as stated in a Memorandum dated 12 February 1992 cannot be given credence since the Memorandum pertains to the replacement of the scrap materials due to Boy Bato consisting of 3,000 kilograms of black iron plates and not to the subject LPG cylinders; (2) Agad did not observe Caltex’s rules and regulations when he transferred the said cylinders to Millanes’ compound without the RMRD form as required under Caltex’s Field Accounting Manual; (3) Agad gave specific instructions to Millanes to sell the cylinders without bidding to third parties in violation of company rules; (4) Agad failed to submit the periodic inventory report of the LPG cylinders to the accounting department; (5) Agad did not remit the proceeds of the sale of the LPG cylinders; and (6) even if considered as scrap materials, the LPG cylinders still had monetary value which Agad cannot appropriate for himself without Caltex’s consent.

Considering these findings, it is clear that Agad committed a serious infraction amounting to theft of company property. This act is akin to serious misconduct or willful disobedience by the employee of the lawful orders of his employer in connection with his work, a just cause for termination of employment recognized under Article 282(a) of the Labor Code. Misconduct has been defined as a transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error in judgment. To be serious, the misconduct must be of such grave and aggravated character.

34. Peñaflor vs. Outdoor Clothing Manufacturing Corp.

G.R. No. 177114, April 13, 2010

Facts:

Peñaflor was hired as probationary HRD Manager of Outdoor Clothing on September 2, 1999. On March 13, 2000, more than six months from the time he was hired, Peñaflor learned that Outdoor Clothing’s President, Nathaniel Syfu (Syfu), appointed Edwin Buenaobra (Buenaobra) as the concurrent HRD and Accounting

Manager. After enduring what he claimed as discriminatory treatment at work, Peñaflor considered the appointment of Buenaobra to his position as the last straw, and thus filed his irrevocable resignation from Outdoor Clothing effective at the close of office hours on March 15, 2000. He thereafter filed an illegal dismissal complaint with the labor arbiter claiming that he had been constructively dismissed. The labor arbiter agreed with Peñaflor and issued a decision in his favour.

On appeal, the National Labor Relations Commission (NLRC) reversed the labor arbiter’s ruling. When Peñaflor questioned the NLRC’s decision before the CA, the appellate court affirmed the NLRC’s decision. Hence, Peñaflor filed a petition for review on certiorari with the Court.

Issue:

Was Peñaflor constructively dismissed?

Ruling:

Yes. While the letter states that Peñaflor’s resignation was irrevocable, it does not necessarily signify that it was also voluntarily executed. Precisely because of the attendant hostile and discriminatory working environment, Peñaflor decided to permanently sever his ties with Outdoor Clothing. This falls squarely within the concept of constructive dismissal that jurisprudence defines, among others, as involuntarily resignation due to the harsh, hostile, and unfavorable conditions set by the employer. It arises when a clear discrimination, insensibility, or disdain by an employer exists and has become unbearable to the employee. The gauge for constructive dismissal is whether a reasonable person in the employee’s position would feel compelled to give up his employment under the prevailing circumstances. With the appointment of Buenaobra to the position he then still occupied, Peñaflor felt that he was being eased out and this perception made him decide to leave the company.

The fact of filing a resignation letter alone does not shift the burden of proving that the employee’s dismissal was for a just and valid


cause from the employer to the employee. In Mora v. Avesco [G.R. No. 177414, November 14, 2008, 571 SCRA 226], the Court ruled that should the employer interpose the defense of resignation, it is still incumbent upon the employer to prove that the employee voluntarily resigned.

35.G.R. No. 178989 March 18, 2010EAGLE RIDGE GOLF & COUNTRY CLUB, Petitioner, vs.COURT OF APPEALS and

EAGLE RIDGE EMPLOYEES UNION (EREU), Respondents.

The FactsOn December 6, 2005, at least 20% of Eagle Ridge’s rank-and-file employee had a meeting where they organized themselves into an independent labor union, named "Eagle Ridge Employees Union" (EREU or Union),5 elected a set of officers,6 and ratified7 their constitution and by-laws.8 On December 19, 2005, EREU formally applied for registration9 and filed BLR Reg. Form No. I-LO, s. 199810 before the Department of Labor and Employment (DOLE) Regional Office IV (RO IV). In time, DOLE RO IV granted the application and issued EREU Registration Certificate (Reg. Cert.) No. RO400-200512-UR-003.The EREU then filed a petition for certification election in Eagle Ridge Golf & Country Club, Eagle Ridge opposed this petition,11 followed by its filing of a petition for the cancellation12 of Registration, Eagle Ridge’s petition ascribed misrepresentation, false statement, or fraud to EREU in connection with the adoption of its constitution and by-laws, the numerical composition of the Union, and the election of its officers. Going into specifics, Eagle Ridge alleged that the EREU declared in its application for registration having 30 members, when the minutes of its December 6, 2005 organizational meeting showed it only had 26 members. The misrepresentation was exacerbated by the discrepancy between the certification issued by the Union secretary and president that 25 members actually ratified the constitution and by-laws on December 6, 2005 and the fact that 26 members affixed their signatures on the documents, making one signature a forgery. Issue: Whether THERE WAS FRAUD, MISREPRESENTATION AND/OR FALSE STATEMENT WHICH WARRANT THE CANCELLATION OF CERTIFICATE OF REGISTRATION OF EREU.28

The Union submitted the required documents attesting to the facts of the organizational meeting on December 6, 2005, the election of its officers, and the adoption of the Union’s constitution and by-laws. It submitted before the DOLE Regional Office with its Application for Registration and the duly filled out BLR Reg. Form No. I-LO, s. 1998, the following documents, to wit: (a) the minutes of its organizational meeting43 held on December 6, 2005 showing 26 founding members who elected its union officers by secret ballot; (b) the list of rank-and-file employees44 of Eagle Ridge who attended the organizational meeting and the election of officers with their individual signatures; (c) the list of rank-and-file employees45 who ratified the union’s constitution and by-laws showing the very same list as those who attended the organizational meeting and the election of officers with their individual signatures except the addition of four employees without their signatures, i.e., Cherry Labajo, Grace Pollo, Annalyn Poniente and Rowel Dolendo; (d) the union’s constitution and by-laws46 as approved on December 6, 2005; (e) the list of officers47 and their addresses; (f) the list of union members48 showing a total of 30 members; and(g) the Sworn Statement49 of the union’s elected president and secretary. All the foregoing documents except the sworn statement of the president and the secretary were accompanied by Certifications50 by the union secretary duly attested to by the union president. The members of the EREU totaled 30 employees when it applied on December 19, 2005 for registration. The Union thereby complied with the mandatory minimum 20% membership requirement under Art. 234(c). Of note is the undisputed number of 112 rank-and-file employees in Eagle Ridge, as shown in the Sworn Statement of the Union president and secretary and confirmed by Eagle Ridge in its petition for cancellation.Upon this light, the Court is inclined to agree with the CA that the BLR did not abuse its discretion nor gravely err when it concluded that the affidavits of retraction of the members had no evidentiary weight to warrant the cancellation of the Certificate of Registration.


36. Miguela Santuyo, et al. vs. Remerco Garments Manufacturing, Inc. and/or

Victoria ReyesGR No. 174420; March 22, 2010

Facts:

Petitioners, who are employees of the Remerco Garments Manufacturing, Inc. (RGMI), were among those recalled to work by the company, after their union, the Kaisahan ng Manggagawa sa Remerco Garments Manufacturing Inc. (KMM Kilusan), staged a 2-year illegal strike from 1992 to 1994. Among the conditions of their recall was that they would no longer be paid a daily rate but on a piece-rate basis. However, even before RGMI could normalize its operations, the union filed a notice of strike in the National Conciliation and Mediation Board (NCMB) on August 8, 1995. According to the union, RGMI conducted a time and motion study and changed the salary scheme from a daily rate to piece-rate basis without consulting it. It claimed that RGMI therefore not only violated the existing collective bargaining agreement (CBA) but also diminished the salaries agreed upon. It therefore committed an unfair labor practice. The conciliation proceedings between the union and RGMI before the NCMB resulted in a lock-out. The union went on strike in November 1995. Therafter, the Secretary of Labor assumed jurisdiction over the case, pursuant to Article 263(g) of the Labor Code. It ordered all striking workers to return to work.

The Secretary of Labor found that the employees would receive higher wages if they were paid on a piece-rate rather than on a daily rate basis. Hence, the new salary scheme would be more advantageous to the employees. For this reason, despite the provisions of the CBA, the change in salary scheme was validated.

In an order dated September 18, 1996, the Secretary of Labor ordered all employees to return to work and RGMI to pay its employees their unpaid salaries (from September 25, 1995 to October 14, 1995) on the piece-rate basis. Neither the union nor RGMI appealed the aforementioned order. Meanwhile, however, on October 18, 1995, while the conciliation proceedings between the union and respondent were pending, petitioners filed a complaint for illegal dismissal against RGMI and respondent

Victoria Reyes, accusing the latter of harassment. Petitioners subsequently amended their complaint, demanding payment of their accrued salaries from September 25 to October 14, 1995.

Respondents moved to dismiss the complaint in view of the pending conciliation proceedings, involving the same issue, in the NCMB. It also claimed that alleged violations of the CBA should be resolved according to the grievance procedure laid out therein. It argued that the labor arbiter had no jurisdiction over the complaint. The labor arbiter assumed jurisdiction over the case and rendered a decision granting the claims of the union. The NLRC denied the appeal of the respondents. The Court of Appeals, however, reversed the NLRC and ruled that the labor arbiter had no jurisdiction over the complaint. This prompted the petitioners to elevate the matter to the Supreme Court.

Issues:

1. Did the labor arbiter have jurisdiction over the complaint filed by the petitioners?

2. Was the labor arbiter barred by prior judgment from assuming jurisdiction over the complaint?

Ruling (First Issue):

No, the labor arbiter did not have jurisdiction over the complaint. Petitioners clearly and consistently questioned the legality of RGMI’s adoption of the new salary scheme (i.e., piece-rate basis), asserting that such action, among others, violated the existing CBA. The controversy was not a simple case of illegal dismissal but a labor dispute involving the manner of ascertaining employees’ salaries, a matter which was governed by the existing CBA. Article 217 of the Labor Code provides that “[c]ases arising from the interpretation or implementation 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.”

This provision requires labor arbiters to refer cases involving the implementation of CBAs to


the grievance machinery provided therein and to voluntary arbitration.

Moreover, Article 260 of the Labor Code clarifies that such disputes must be referred first to the grievance machinery and, if unresolved within seven days, they shall automatically be referred to voluntary arbitration. Thus, under Article 261 of the Labor Code, voluntary arbitrators have original and exclusive jurisdiction over matters which have not been resolved by the grievance machinery. Pursuant to Articles 217 in relation to Articles 260 and 261 of the Labor Code, the labor arbiter should have referred the matter to the grievance machinery provided in the CBA. Because the labor arbiter clearly did not have jurisdiction over the subject matter, his decision was void.

(Second Issue):

Yes, the labor arbiter was barred by prior judgment from assuming jurisdiction over the complaint. The Secretary of Labor resolved the labor dispute between the union and RGMI in his September 18, 1996 order. Since neither the union nor RGMI appealed the said order, it became final and executory. Article 263(g) of the Labor Code gives the Secretary of Labor discretion to assume jurisdiction over a labor dispute likely to cause a strike or a lockout in an industry indispensable to the national interest and to decide the controversy or to refer the same to the NLRC for compulsory arbitration. In doing so, the Secretary of Labor shall resolve all questions and controversies in order to settle the dispute. The Secretary of Labor assumed jurisdiction over the controversy because RGMI had a substantial number of employees and was a major exporter of garments to the United States and Canada

Settled is the rule that unions are the agent of its members for the purpose of securing just and fair wages and good working conditions. Since petitioners were part of the bargaining unit represented by the union and members thereof, the September 18, 1996 order of the Secretary of Labor applies to them.

Furthermore, since the union was the bargaining agent of petitioners, the complaint was barred under the principle of conclusiveness of judgments. The parties to a case are bound by the findings in a previous judgment with respect to matters actually raised and adjudged therein. Hence, the labor arbiter should have dismissed the complaint on the ground of res judicata.

37. G.R. No. 149552 March 10, 2010

GENERAL MILLING CORPORATION, Petitioner, vs.ERNESTO CASIO, ROLANDO

IGOT, MARIO FAMADOR, NELSON LIM, FELICISIMO BOOC, PROCOPIO OBREGON, JR., and ANTONIO ANINIPOK, Respondents,andVIRGILIO PINO, PAULINO CABREROS,

MA. LUNA P. JUMAOAS, DOMINADOR BOOC, FIDEL VALLE, BARTOLOME AUMAN, REMEGIO CABANTAN, LORETO GONZAGA,

EDILBERTO MENDOZA and ANTONIO PANILAG, Respondents.

Facts:

On November 30, 1991, IBM-Local 31, through its officers and board members, namely, respondents Virgilio Pino,4 Paulino Cabreros, Ma. Luna P. Jumaoas, Dominador Booc, Bartolome Auman, Remegio Cabantan, Fidel Valle, Loreto Gonzaga, Edilberto Mendoza and Antonio Panilag (Pino, et al.), entered into a Collective Bargaining Agreement (CBA) with GMC. The effectivity of the said CBA was retroactive to August 1, 1991.5Gabiana then wrote a letter10 dated March 10, 1992, addressed to Eduardo Cabahug (Cabahug), GMC Vice-President for Engineering and Plant Administration, informing the company of the expulsion of Casio, et al. from the union pursuant to the Resolution dated February 29, 1992 of IBM-Local 31 officers and board members. Gabiana likewise requested that Casio, et al. "be immediately dismissed from their work for the interest of industrial peace in the plant." Pressured by the threatened filing of a suit for unfair labor practice, GMC acceded to Gabiana’s request to terminate the employment of Casio, et al. GMC issued a Memorandum dated March 24, 1992 terminating the employment of Casio, et al. effective April 24, 1992 and placing the latter under preventive suspension for the meantime.On March 27, 1992, Casio, et al., in the name of IBM-Local 31, filed a Notice of Strike with the NCMB-Regional Office No. VII (NCMB-RO).


Casio, et al. alleged as bases for the strike the illegal dismissal of union officers and members, discrimination, coercion, and union busting. The NCMB-RO held conciliation proceedings, but no settlement was reached among the parties.12 Casio, et al. next sought recourse from the National Labor Relations Commission (NLRC) Regional Arbitration Branch VII by filing on August 3, 1992 a Complaint against GMC and Pino, et al. for unfair labor practice, particularly, the termination of legitimate union officers, illegal suspension, illegal dismissal, and moral and exemplary damages. Finding that the Case did not undergo voluntary arbitration, the Labor Arbiter dismissed the case for lack of jurisdictionSince the dismissal is not for a cause detrimental to the interest of the company, respondent General Milling Corporation is, nonetheless, ordered to pay separation pay to all [Casio, et al.] within seven (7) calendar days

Issue:

Whether THE HONORABLE PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT SAID THAT PETITIONER GMC FAILED TO ACCORD DUE PROCESS TO [Casio, et al.].

Held: The twin requirements of notice and hearing constitute the essential elements of procedural due process. The law requires the employer to furnish the employee sought to be dismissed with two written notices before termination of employment can be legally effected: (1) a written notice apprising the employee of the particular acts or omissions for which his dismissal is sought in order to afford him an opportunity to be heard and to defend himself with the assistance of counsel, if he desires, and (2) a subsequent notice informing the employee of the employer’s decision to dismiss him. This procedure is mandatory and its absence taints the dismissal with illegality.34 Irrefragably, GMC cannot dispense with the requirements of notice and hearing before dismissing Casio, et al. even when said dismissal is pursuant to the closed shop provision in the CBA. The rights of an employee to be informed of the charges against him and to reasonable opportunity to present his side in a controversy with either the company or his own union are not wiped away by a union security clause or a union shop clause in a collective bargaining

agreement. An employee is entitled to be protected not only from a company which disregards his rights but also from his own union the leadership of which could yield to the temptation of swift and arbitrary expulsion from membership and hence dismissal from his job.35

38. Lepanto Ceramics, Inc. vs. Lepanto Ceramics Employees AssociationG.R. No. 180866, March 2, 2010

Facts:

Petitioner Lepanto Ceramics, Inc., a corporation primarily in the business of manufacture, makes, buy and sell, on whole sale basis, tiles, marbles, mosaics and other similar products. Respondent Lepanto Ceramics Employees Association is the sole and exclusive bargaining agent in the establishment of petitioner.

In 1998, petitioner gave P3, 000.00 as bonus to its employees, members of the respondent Association. Subsequently, in September 1999, petitioner and respondent Association entered into a Collective Bargaining Agreement (CBA) which provides for, among others, the grant of a Christmas gift package/bonus to the members of the respondent Association.

In the succeeding years, 1999, 2000, 2001, petitioner gave bonuses in a form of a certificate which is equivalent to P3, 000.00. However, in 2002, petitioner gave only P600.00 as cash benefit. Respondent Association objected to the P600.00 cash benefit and argued that it was in violation of the CBA. Petitioner averred that the giving of extra compensation was based on the company’s available resources for a given year and the workers are not entitled to a bonus if the company does not make profits. Unable to amicably settle the dispute, the case was referred to the Voluntary Arbitrator. The Voluntary Arbitrator rendered a decision, declaring that petitioner is bound to grant each of its workers a Christmas bonus of P3,000.00 for the reason that the bonus was given prior to the effectivity of the CBA between the parties and that the financial losses of the company is not a sufficient reason to exempt it from granting the same. On appeal, the Court of Appeals affirmed the ruling of the Voluntary Arbitrator.

Issue:


Is petitioner obliged to give a Christmas bonus to respondent Association?

Ruling:

Yes. Generally, a bonus is not a demandable and enforceable obligation. For a bonus to be enforceable, it must have been promised by the employer and expressly agreed upon by the parties. Given that the bonus in this case is integrated in the CBA, the same partakes the nature of a demandable obligation. Verily, by virtue of its incorporation in the CBA, the Christmas bonus due to respondent Association has become more than just an act of generosity on the part of the petitioner but a contractual obligation it has undertaken.

A reading of the provision of the CBA reveals that the same provides for the giving of a "Christmas gift package/bonus" without qualification. The said provision did not state that the Christmas package shall be made to depend on the petitioner’s financial standing. The records are also bereft of any showing that the petitioner made it clear during CBA negotiations that the bonus was dependent on any condition. Indeed, if the petitioner and respondent Association intended that the P3,000.00 bonus would be dependent on the company earnings, such intention should have been expressed in the CBA.

All given, business losses are a feeble ground for petitioner to repudiate its obligation under the CBA. The rule is settled that any benefit and supplement being enjoyed by the employees cannot be reduced, diminished, discontinued or eliminated by the employer. The principle of non-diminution of benefits is founded on the constitutional mandate to protect the rights of workers and to promote their welfare and to afford labor full protection.

39. G.R. No. 171231 February 17, 2010

PNCC SKYWAY TRAFFIC MANAGEMENT AND SECURITY DIVISION WORKERS

ORGANIZATION (PSTMSDWO), represented by its President, RENE SORIANO,

Petitioner, vs.PNCC SKYWAY CORPORATION, Respondent.

D E C I S I O NPERALTA, J.:

Facts: PNCC Skyway Corporation Traffic Management and Security Division Workers' Organization (PSTMSDWO) is a labor union duly registered with the Department of Labor and Employment (DOLE). PNCC Skyway Corporation is a corporation duly organized and operating under and by virtue of the laws of the Philippines.On November 15, 2002, petitioner and respondent entered into a Collective Bargaining Agreement (CBA) incorporating the terms and conditions of their agreement which included vacation leave and expenses for security license provisions.

Petitioner objected to the implementation of the said memorandum. It insisted that the individual members of the union have the right to schedule their vacation leave. Due to the disagreement between the parties, petitioner elevated the matter to the DOLE-NCMB for preventive mediation. For failure to settle the issue amicably, the parties agreed to submit the issue before the voluntary arbitrator.Respondent filed a motion for reconsideration, from the decision of the arbitrator which the voluntary arbitrator denied in the Order7 dated August 11, 2004.Respondent filed a Petition for Certiorari with Prayer for Temporary Restraining Order and/or Writ of Preliminary Injunction with the CA, and the CA rendered a Decision dated October 4, 2005,8 annulling and setting aside the decision and order of the voluntary arbitrator. Petitioner filed a motion for reconsideration, which the CA denied. Hence, the instant petition assigning errors:Respondent alleged that the petition was fatally defective due to the lack of authority of its union president, Rene Soriano, to sign the certification and verification against forum shopping on petitioner's behalf. It alleged that the authority of Rene Soriano to represent the union was only conferred on June 30, 2006 by virtue of a board resolution,10 while the Petition for Review had long been filed on February 27, 2006. Thus, Rene Soriano did not possess the required authority at the time the petition was filed on February 27, 2006.

Issue: Whether or not Rene Soriano possess the required authority at the time the petition was filed on February 27, 2006.


Held: In the case at bar, the Supreme Court rule that Rene Soriano has sufficient authority to sign the verification and certification against forum shopping for the following reasons: First, the resolution dated June 30, 2006 was merely a reiteration of the authority given to the Union President to file a case before this Court assailing the CBA violations committed by the management, which was previously conferred during a meeting held on October 5, 2005. Thus, it can be inferred that even prior to the filing of the petition before Us on February 27, 2006, the president of the union was duly authorized to represent the union and to file a case on its behalf. Second, being the president of the union, Rene Soriano is in a position to verify the truthfulness and correctness of the allegations in the petition. Third, assuming that Mr. Soriano has no authority to file the petition on February 27, 2006, the passing on June 30, 2006 of a Board Resolution authorizing him to represent the union is deemed a ratification of his prior execution, on February 27, 2006, of the verification and certificate of non-forum shopping, thus curing any defects thereof.

40G.R. No. 183810 :: January 21, 2010

FARLEY FULACHE, MANOLO JABONERO, DAVID CASTILLO, JEFFREY LAGUNZAD,

MAGDALENA MALIG-ON BIGNO, FRANCISCO CABAS, JR., HARVEY PONCE and ALAN C. ALMENDRAS, Petitioners, vs. ABS-CBN BROADCASTING CORPORATION,

Respondent

FACTS: In June 2001, petitioners Farley Fulache, Manolo Jabonero, David Castillo, Jeffrey Lagunzad, Magdalena Malig-on Bigno, Francisco Cabas, Jr., Harvey Ponce and Alan C. Almendras (petitioners) and Cresente Atinen (Atinen) filed two separate complaints for regularization, unfair labor practice and several money claims (regularization case) against ABS-CBN Broadcasting Corporation-Cebu (ABS-CBN). Fulache and Castillo were drivers/cameramen; Atinen, Lagunzad and Jabonero were drivers; Ponce and Almendras were cameramen/editors; Bigno was a PA/Teleprompter Operator-Editing, and Cabas was a VTR man/editor. The complaints (RAB VII Case Nos. 06-1100-01 and 06-1176-01) were consolidated and were assigned to Labor Arbiter Julie C. Rendoque.

The petitioners alleged that on December 17, 1999, ABS-CBN and the ABS-CBN Rank-and-File Employees Union (Union) executed a collective bargaining agreement (CBA) effective December 11, 1999 to December 10, 2002; they only became aware of the CBA when they obtained copies of the agreement; they learned that they had been excluded from its coverage as ABS-CBN considered them temporary and not regular employees, in violation of the Labor Code. They claimed they had already rendered more than a year of service in the company and, therefore, should have been recognized as regular employees entitled to security of tenure and to the privileges and benefits enjoyed by regular employees. They asked that they be paid overtime, night shift differential, holiday, rest day and service incentive leave pay. They also prayed for an award of moral damages and attorneys fees.

The Illegal Dismissal Case.

While the appeal of the regularization case was pending, ABS-CBN dismissed Fulache, Jabonero, Castillo, Lagunzad and Atinen (all drivers) for their refusal to sign up contracts of employment with service contractor Able Services. The four drivers and Atinen responded by filing a complaint for illegal dismissal (illegal dismissal case). The case (RAB VII Case No. 07-1300-2002) was likewise handled by Labor Arbiter Rendoque.

In defense, ABS-CBN alleged that even before the labor arbiter rendered his decision of January 17, 2002 in the regularization case, it had already undertaken a comprehensive review of its existing organizational structure to address its operational requirements. It then decided to course through legitimate service contractors all driving, messengerial, janitorial, utility, make-up, wardrobe and security services for both the Metro Manila and provincial stations, to improve its operations and to make them more economically viable. Fulache, Jabonero, Castillo, Lagunzad and Atinen were not singled out for dismissal; as drivers, they were dismissed because they belonged to a job category that had already been contracted out. It argued that even if the petitioners had been found to have been illegally dismissed, their reinstatement had become a physical impossibility because their employer-employee relationships had been strained and that Atinen had executed a quitclaim and release.The CA Petition and Decision

The petitioners went to the CA through a petition for certiorari under Rule 65 of the Rules of Court. They charged the NLRC with grave abuse of discretion in: (1) denying them the benefits under the CBA; (2) finding no evidence that they are


part of the company’s bargaining unit; (3) not reinstating and awarding backwages to Fulache, Jabonero, Castillo and Lagunzad; and (4) ruling that they are not entitled to damages and attorneys fees.

ABS-CBN, on the other hand, questioned the propriety of the petitioners use of a certiorari petition. It argued that the proper remedy for the petitioners was an appeal from the reinstated decisions of the labor arbiter.

ISSUE: W/N VALID DISMISSAL

HELD: We find merit in the petitioner’s positions.

As regular employees, the petitioners fall within the coverage of the bargaining unit and are therefore entitled to CBA benefits as a matter of law and contract. In the root decision (the labor arbiters decision of January 17, 2002) that the NLRC and CA affirmed, the labor arbiter declared:

WHEREFORE, IN THE LIGHT OF THE FOREGOING, taking into account the factual scenario and the evidence adduced by both parties, it is declared that complainants in these cases are REGULAR EMPLOYEES of respondent ABS-CBN and not INDEPENDENT CONTRACTORS and thus henceforth they are entitled to the benefits and privileges attached to regular status of their employment.

All these go to show that ABS-CBN acted with patent bad faith. A close parallel we can draw to characterize this bad faith is the prohibition against forum-shopping under the Rules of Court. In forum-shopping, the Rules characterize as bad faith the act of filing similar and repetitive actions for the same cause with the intent of somehow finding a favorable ruling in one of the actions filed. ABS-CBNs actions in the two cases, as described above, are of the same character, since its obvious intent was to defeat and render useless, in a roundabout way and other than through the appeal it had taken, the labor arbiter’s decision in the regularization case. Forum-shopping is penalized by the dismissal of the actions involved. The penalty against ABS-CBN for its bad faith in the present case should be no less.

41. G.R. No. 155125 December 4, 2009

YSS EMPLOYEES UNION - PHILIPPINE TRANSPORT AND GENERAL WORKERS

ORGANIZATION, Petitioner,vs.

YSS LABORATORIES, INC., Respondent

It is a Petition for Review on Certiorari filed by petitioner YSS Employees Union (YSSEU) – Philippine Transport and General Workers Organization seeking to reverse and set aside

the Decision dated 26 November 2001 and the Resolution dated 29 August 2002 of the Court of Appeals in CA-G.R. SP No. 66095 nullifying the Orders of the Secretary of the Department of Labor and Employment (DOLE) dated 11 May 2001 and 9 June 2001 which enjoined the strike staged by petitioner, and ordered respondent YSS Laboratories Inc. (YSS Laboratories) to accept the workers back to their work, including those who were retrenched from employment due to serious business losses.

FACTS: YSS Laboratories is a domestic corporation engaged in the pharmaceutical business. YSSEU is a duly registered labor organization and the sole and exclusive bargaining representative of the rank and file employees of YSS Laboratories.

In order to arrest escalating business losses, YSS Laboratories implemented a retrenchment program which affected 11 employees, nine were officers and members of YSSEU. Initially, these employees were given the option to avail themselves of the early retirement program of the company. When no one opted to retire early, YSS Laboratories exercised its option to terminate the services of its employees. Copies of the Notices of Termination were filed with DOLE on 19 March 2001 and were served to concerned employees on 20 March 2001. Claiming that YSS Laboratories was guilty of discrimination and union-busting in carrying out the said retrenchment program, YSSEU decided to hold a strike. The Secretary of Labor to finally intervene in order to put an end to a prolonged labor dispute, the Secretary of Labor deemed that the continuation of the labor dispute was inimical to national interest. Thus, in an Order dated 11 May 2001, the Secretary of Labor certified the labor dispute to the National Labor Relations Commission (NLRC) for compulsory arbitration. Accordingly, all striking workers were thereby directed to return to work within 24 hours from their receipt of the said Order, and YSS Laboratories to accept them under the terms and conditions prevailing before the strike. YSS Laboratories, however, refused to fully comply with the directive of the Secretary of Labor. YSS Laboratories argued that nine union officers and members who were previously terminated from service pursuant to a valid retrenchment should be excluded from the operation of the return-to-work order. It also asserted that the union officers11 who


participated in the purported illegal strike should likewise not be allowed to be back to their employment for they were deemed to have already lost their employment status. YSSEU, for its part, moved that YSS Laboratories be cited for contempt for refusing to admit the 18 workers back to work. In addition, YSSEU prayed for the award of backwages in favor of these employees who were not permitted by YSS Laboratories to return to their respective stations despite the Secretary of Labor’s directive. Acting on the aforesaid motions, the Secretary of Labor, on 9 June 2001, granted the motion of YSSEU and thus issued an Order directing YSS Laboratories to immediately accept back to work the nine retrenched employees and the nine union officers who initiated the alleged illegal strike pending determination of the validity of the retrenchment and illegal strike cases. Unyielding, YSS Laboratories brought a Petition for Certiorari before the Court of Appeals, seeking to annul the certification order and the return-to-work order issued by the Secretary of Labor. On 26 November 2001, the Court of Appeals rendered a Decision granting the Petition and reversing the assailed Orders dated 11 May 2001 and 9 June 2001, as they found that YSS Laboratories validly carried out its retrenchment program, which effectively severed the concerned employees’ employment with the company.

ISSUE: Whether or not the retrenched employees should be excluded from the operation to the return work order?

RULING: YSS Laboratories’ vigorous insistence on the exclusion of the retrenched employees from the coverage of the return-to-work order seriously impairs the authority of the Secretary of Labor to forestall a labor dispute that he deems inimical to the national economy. The Secretary of Labor is afforded plenary and broad powers, and is granted great breadth of discretion to adopt the most reasonable and expeditious way of writing finis to the labor dispute. The Secretary of Labor directed YSS Laboratories to accept all the striking workers back to work; the Secretary did not exceed his jurisdiction, or gravely abuse the same. By harping on the validity of the retrenchment and on the exclusion of the retrenched employees from the coverage of the return-to-work order, YSS Laboratories undermines the underlying principle embodied in Article 263(g) of the Labor

Code on the settlement of labor disputes -- that assumption and certification orders are executory in character and are to be strictly complied with by the parties, even during the pendency of any petition questioning their validity. Accepting back the workers in this case is not a matter of option, but of obligation mandated by law for YSS Laboratories to faithfully comply with. Its compulsory character is mandated, not to cater to a narrow segment of society, or to favor labor at the expense of management, but to serve the greater interest of society by maintaining the economic equilibrium.

42. Case Digest_S.S. Ventures International Inc v S.S. Ventures Labor Union

Facts: Petitioner S.S. Ventures International Inc is in the business of manufacturing sports shoes. Respondent S.S. Ventures Labor Union is a labor organization registered with the DOLE. On March 21, 2000, the Union filed with DOLE a petition for certification election in behalf of the rank-and-file employees of Ventures. Five hundred forty two signatures, 82 of which belong to 2008.Terminated Ventures employees, appeared on the basic documents supporting the petition. ON August 21, 2000, Ventures filed a Petition to cancel the Union's certificate of registration invoking the grounds set forth in Article 239(a) of the Labor Code. The Union denied committing the imputed acts of fraud or forgery. In its supplemental reply memorandum filed on March 20, 2001, Ventures cited other instances of fraud and misrepresentation, claiming that the “affidavits” executed by 82 alleged Union members show that they were deceived into signing paper minutes or were harrassed to signing their attendance in the organizational meeting. Ventures added that some employees signed the “affidavits” denying having attended such meeting. In a decision, Regional Deirector of DOLE-Region III fournd for Ventures. It resolved to cancel Certificate Registration No. (RO300-00-02-UR-0003).Aggrieved, the Union interposed a motion for reconsideration, a recourse which appeared to have been forwarded to the BLR. Although it would later find this motion to have been belatedly filed, the BLR, over the objection of Ventures which filed a Motion to Expunge, gave it due course and treated it as an appeal.


Despite Ventures' motion to expunge the appeal, the BLR Director rendered a decision granting the Union's appeal and reversing the decision of Dione.Ventures sought reconsideration fo the above decision but was denied by the BLR. Ventures then went to the CA on a petition for certiorarti under Rule 65. The CA dismissed Ventures' petiton. Venturs' motion for reconsideration met a similar fate. Hence, this peition for review under Rule 45.Issue: whether or not the inclusion fo the 82 employees in the list of attendees to the January 9, 2000 meeting is an internal matter within the ambit of the worker's right ot self-organization and outside the sphere of influence of this office and the petitionerHeld: The petition is denied. The right to form, join, or assist a union is specifically protected by Art. XIII, Section 3 of the Constitution and such right, according to Art. III, Sec. 8 of the Constitution and Art. 246 of the Labor Code, shall not be abridged. Once registered with the DOLE, a union is considered a legitimate labor organization endowed with the right and privileges granted by law to such organization. While a certificate of registration confers a union with legitimacy with the concomitant right to participate in or ask for certification election in a bargaining unit, the registration may be canceled or the union may be decertified as the bargaining unit, in which case the union is divested of the status of a legitimate labor organization. Among the grounds for cancellation is the commission of any of the acts enumerated in Art. 239(a) of the Labor Code, such as fraud and misrepresentation in connection with the adoption or ratification of the union's constitution and like documents. Whatever misgivings the petitioner may have with regard to the 82 dismissed employees is better addressed in the inclusion-exclusion proceedings during a pre-election conference. The issue surrounding the involvement of the 82 employees is a matter of membership or voter eligibility. It is not a ground to cancel union registration.

43. Case Digest_Republic of the Philippines Represented by DOLE v Kawashima Textile

MFG Philippines Inc.

Facts: KFWU filed with DOLE a Petition for Certification Election to be conducted in the bargaining until composed of 145 rank-and-file

employees of respondent. Attached to its petition are a Certificate of Creation of Local/Chapter issued on January 19, 2000 by DOLE, stating that it submitted to said office a Charter Certificate issued to it by the national federation Phil. Transport & General Workers Organization, and a Report of Creation of Local/Chapter.

Respondent filed a Motion to Dismiss the petition on the ground that KFWU did not acquire any legal personality because its membership of mixed rank-and-file and supervisory employees violated Article 245 of the Labor Code, and its failure to submit its books of account contravened the ruling of the Court in Progressive Development Corporation v Secretary, DOLE.In an Order, Med-Arbiter found KFWU's legal personality defective and dismissed its petition for certification election. Meanwhile, KFWU appealed to the DOLE which issued a decision granting the appeal. The DOLE held that Med-Arbiter Bactin's reliance on the decisions of the Court was misplaced, for while 245 declares supervisory employees ineligible for membership in a labor organization for rank-and-file employees, the provision did not state the effect of such prohibited membership on the legitimacy of the labor organization and its right to file for certification election.

Respondent filed a Motion for Reconsideration but the DOLE denied the same. However, on appeal by respondent, the CA rendered the decision assailed herein, reversing the August 18, 2000 DOLE. KFWU filed a Motion for Reconsideration but the CA denied it.

The RP filed the present petition to seek closure.

Issue: Whether or not a mixed membership of rank-and-file and supervisory employees in a union is a ground for the dismissal of a petition for certification election

Held: The petition is granted. In the case at bar, as respondent union's membership list contains the names of at least twenty-seven (27) supervisory employees in Level Five positions, the union could not, prior to purging itself of its supervisory employee members, attain the status of a legitimate labor organization. Not being one, it cannot possess the requisite personality to file a petition for certification election.n Dunlop, n


which the labor organization that filed a petition for certification election was one for supervisory employees, but in which the membership included rank-and-file employees, the Court reiterated that such labor organization had no legal right to file a certification election to represent a bargaining unit composed of supervisors for as long as it counted rank-and-file employees among its members.

Except when it is requested to bargain collectively, an employer is a mere bystander to any petition for certification election; such proceeding is non-adversarial and merely investigative, for the purpose thereof is to determine which organization will represent the employees in their collective bargaining with the employer. The choice of their representative is the exclusive concern of the employees; the employer cannot have any partisan interest therein; it cannot interfere with, much less oppose, the process by filing a motion to dismiss or an appeal from it, note even a mere allegaiton that some employees participating in a petition for certification election are actually managerial employees will lend an employer legal personality to block the certification election.

44. G.R. No. 172013 October 2, 2009

PATRICIA HALAGUEÑA, MA. ANGELITA L. PULIDO, MA. TERESITA P. SANTIAGO,

MARIANNE V. KATINDIG, BERNADETTE A. CABALQUINTO, LORNA B. TUGAS, MARY CHRISTINE A. VILLARETE, CYNTHIA A.

STEHMEIER, ROSE ANNA G. VICTA, NOEMI R. CRESENCIO, and other flight attendants of PHILIPPINE AIRLINES, Petitioners, vs. PHILIPPINE AIRLINES INCORPORATED,

Respondent.

FACTS: Petitioners were employed as female flight attendants of respondent PAL on different dates prior to November 22, 1996. They are members of the Flight Attendants and Stewards Association of the Philippines (FASAP), a labor organization certified as the sole and exclusive certified as the sole and exclusive bargaining representative of the flight attendants, flight stewards and pursers of respondent. Respondent and FASAP then entered into a CBA incorporating the terms and conditions of their agreement for the years 2000 to 2005. Section 144, Part A of the PAL-FASAP CBA, provides that: “A. For the Cabin Attendants hired before

22 November 1996: x x x x 3. Compulsory Retirement - Subject to the grooming standards provisions of this Agreement, compulsory retirement shall be fifty-five (55) for females and sixty (60) for males. x x x.” Petitioners filed a Special Civil Action for Declaratory Relief with Prayer for the Issuance of Temporary Restraining Order and Writ of Preliminary Injunction with the RTC of Makati City, Branch 147 against respondent for the invalidity of Section 144, Part A of the PAL-FASAP CBA.

ISSUE: Whether the RTC has jurisdiction over the petitioners' action challenging the legality or constitutionality of the provisions on the compulsory retirement age contained in the CBA between respondent PAL and FASAP? Whether Section 144, Part A of the PAL-FASAP CBA is unlawful and unconstitutional?

HELD: The Court held that the jurisdiction of labor arbiters and the NLRC under Article 217 of the Labor Code is limited to disputes arising from an employer-employee relationship which can only be resolved by reference to the Labor Code, other labor statutes, or their CBA. Here, the employer-employee relationship between the parties is merely incidental and the cause of action ultimately arose from different sources of obligation, i.e., the Constitution and CEDAW.

Thus, where the principal relief sought is to be resolved not by reference to the Labor Code or other labor relations statute or a CBA but by the general civil law, the jurisdiction over the dispute belongs to the regular courts of justice and not to the labor arbiter and the NLRC. This Court held that the grievance machinery and voluntary arbitrators do not have the power to determine and settle the issues at hand. They have no jurisdiction and competence to decide constitutional issues relative to the questioned compulsory retirement age. Hence, only disputes involving the union and the company shall be referred to the grievance machinery or voluntary arbitrators. In the case at bar, the dispute is not between FASAP and respondent PAL, who have both previously agreed upon the provision on the compulsory retirement of female flight attendants as embodied in the CBA. The dispute is between respondent PAL and several female flight attendants who questioned the provision on compulsory retirement of female flight attendants. Thus, referral to the grievance


machinery and voluntary arbitration would not serve the interest of the petitioners.

The rule is settled that pure questions of fact may not be the proper subject of an appeal by certiorari. This mode of appeal is generally limited only to questions of law which must be distinctly set forth in the petition. The Supreme Court is not a trier of facts. The question as to whether Section 114, Part A of the PAL-FASAP CBA is discriminatory or not being a question of fact that would require a full-blown trial which jurisdiction to hear the same is properly lodged with the the RTC, is therefore, remanded to the RTC for the proper determination of the merits of the petition for declaratory relief is just and proper.

WHEREFORE, the petition is PARTLY GRANTED.

45. G.R. No. 177594 July 23, 2009UNIVERSITY OF SAN AGUSTIN, INC. Petitioners, vs. UNIVERSITY OF SAN AGUSTIN EMPLOYEES UNION- FFW,

Respondent.

FACTS: Petitioner forged with the University of San Agustin Employees Union-FFW a CBA effective for 5 years. Among other things, the parties agreed to include a provision on salary increases based on the incremental tuition fee increases or tuition incremental proceeds (TIP) and pursuant to Republic Act No. 6728, The Tuition Fee Law. It appears that for the School Year 2001-2002, the parties disagreed on the computation of the salary increases. Respondent refused to accept petitioner’s proposed across-the-board salary increase of P1,500 per month and its subtraction from the computation of the TIP of the scholarships and tuition fee discounts it grants to deserving students and its employees and their dependents. Respondent likewise rejected petitioner’s interpretation of the term "salary increases" as referring not only to the increase in salary but also to corresponding increases in other benefits. Respondent argued that the provision in question referred to "salary increases" alone, hence, the phrase "P1,500.00 or 80% of the TIP, whichever is higher," should apply only to salary increases and should not include the other increases in benefits received by employees.

Resort to the existing grievance machinery having failed, the parties agreed to submit the case to voluntary arbitration.

ISSUE: Whether or not the salary increase of P1500 or 80% of the TIP is correct?

HELD: Sec. 3, Art. VIII of the 2000-20005 CBA reads: “Salary Increases. The following shall be the increases under this Agreement:

SY 2000-2001 – P2,000.00 per month, across the board.SY 2001-2002 – P1,500.00 per month or 80% of the TIP, whichever is higher, across the board.SY 2002-2003 – P1,500.00 per month or 80% of the TIP, whichever is higher, across the board. (Emphasis supplied)It is a familiar and fundamental doctrine in labor law that the CBA is the law between the parties and they are obliged to comply with its provisions. If the terms of a contract, in this case the CBA, are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of their stipulations shall control. A reading of the above-quoted provision of the CBA shows that the parties agreed that 80% of the TIP or at the least the amount of P1,500 is to be allocated for individual salary increases. The CBA does not speak of any other benefits or increases which would be covered by the employees’ share in the TIP, except salary increases. The CBA reflects the incorporation of different provisions to cover other benefits such as Christmas bonus (Art. VIII, Sec. 1), service award (Art. VIII, Sec.5), leaves (Article IX), educational benefits (Sec.2, Art. X), medical and hospitalization benefits (Secs. 3, 4 and 5, Art. 10), bereavement assistance (Sec. 6, Art. X), and signing bonus (Sec. 8, Art. VIII), without mentioning that these will likewise be sourced from the TIP. Thus, petitioner’s belated claim that the 80% TIP should be taken to mean as covering ALL increases and not merely the salary increases as categorically stated in Sec. 3, Art. VIII of the CBA does not lie. In the present case, petitioner could have, during the CBA negotiations, opposed the inclusion of or renegotiated the provision allotting 80% of the TIP to salary increases alone, as it was and is not under any obligation to accept respondent’s demands hook, line and sinker. Art. 252 of the Labor Code is clear on the matter: The duty to bargain collectively means the performance of a mutual obligation to meet and convene promptly


and expeditiously in good faith for the purpose of negotiating an agreement with respect to wages, hours, of work and all other terms and conditions of employment including proposals for adjusting any grievances or questions arising under such agreement and executing a contract incorporating such agreements if requested by either party but such duty does not compel any party to agree to a proposal or to make any concession. The records are thus bereft of any showing that petitioner had made it clear during the CBA negotiations that it intended to source not only the salary increases but also the increases in other employee benefits from the 80% of the TIP. Absent any proof that petitioner’s consent was vitiated by fraud, mistake or duress, it is presumed that it entered into the CBA voluntarily, had full knowledge of the contents thereof, and was aware of its commitments under the contract. Even a perusal of the law will show that it does not make 70% as the mandated ceiling. Unmistakably, what the law sets is the minimum, not the maximum percentage, and there is even a 10% portion the disposition of which the law does not regulate. Hence, if academic institutions wish to allot a higher percentage for salary increases and other benefits, nothing in the law prohibits them from doing so.

46. G.R. No. 171587 October 13, 2009

EASTERN SHIPPING LINES, INC., Petitioner, vs. FERRER D. ANTONIO,

Respondent.

FACTS: Respondent was hired by petitioner to work as a seaman on board its various vessels. Respondent started as an Apprentice Engineer on December 12, 1981 and worked in petitioner's various vessels where he was assigned to different positions. The last position he held was that of 3rd Engineer on board petitioner's vessel M/V Eastern Venus, where he worked until February 22, 1996. On February 13, 1996, while in Yokohama, Japan and still in the employ of petitioner, he suffered a fractured left transverse process of the fourth lumbar vertebra. He consulted a doctor in Osaka, Japan and was advised to rest for a month. He was later examined by the company doctor and declared fit to resume work. However, he was not admitted back to work. Being in dire financial need at that time to support his family, he applied for an optional retirement on January

16, 1997 but was disapproved by the petitioner. Consequently, respondent filed a complaint for payment of optional retirement benefits against petitioner before the DOLE.

ISSUE: Whether respondent shall be granted the optional retirement benefit being applied for under the gratuity plan of petitioner?

HELD: The age of retirement is primarily determined by the existing agreement or employment contract. In the absence of such agreement, the retirement age shall be fixed by law. Under the Labor Code, the mandated compulsory retirement age is set at 65 years, while the minimum age for optional retirement is set at 60 years. In the case at bar, there is a retirement gratuity plan between the petitioner and the respondent. Under Paragraph B of the plan, a shipboard employee, upon his written request, may retire from service if he has reached the eligibility age of 60 years. While under Paragraph C, it will be the exclusive prerogative and sole option of the company to retire any covered employee who shall have rendered at least 15 years of credited service for land-based employees and 3,650 days actually on board vessel for shipboard personnel. Records show that respondent was only 41 years old when he applied for optional retirement, which was 19 years short of the required eligibility age. Thus, he cannot claim either of the optional retirement benefits under the plan as a matter of right.

It is also worth to note that respondent, being a seaman, is not entitled to the payment of separation pay. It is clear that seafarers are considered contractual employees. Thus, they are not entitled to reinstatement or payment of separation pay or backwages. However, the Court held that financial assistance may be allowed as a measure of social justice and exceptional circumstances, and as an equitable concession. In the present case, for having been deprived of continued employment with petitioner's vessel, respondent opted to apply for optional retirement. Records also show that respondent's seaman's book, as duly noted and signed by the captain of the vessel was marked "Very Good," and "recommended for hire." Respondent had no derogatory record on file over his long years of service with the petitioner. Thus, ends of social and compassionate justice would be served best if respondent will be given


some equitable relief. The award of P100,000.00 to respondent as financial assistance is , therefore, deemed equitable under the circumstances.

WHEREFORE, the petition is GRANTED.

47. G.R. No. 160236 October 16, 2009

"G" HOLDINGS, INC., Petitioner,vs.

NATIONAL MINES AND ALLIED WORKERS UNION Local 103 (NAMAWU); SHERIFFS

RICHARD H. APROSTA and ALBERTO MUNOZ, all acting Sheriffs; DEPARTMENT OF LABOR AND EMPLOYMENT, Region VI,

Bacolod District Office, Bacolod City, Respondents.

Before this Court is a petition for review on certiorari under Rule 45 of the Rules of Court assailing the October 14, 2003 Decision1 of the Court of Appeals (CA) in CA-G.R. SP No. 75322.

FACTS: The petitioner, "G" Holdings, Inc. (GHI), is a domestic corporation primarily engaged in the business of owning and holding shares of stock of different companies. It was registered with the Securities and Exchange Commission on August 3, 1992. Private respondent, National Mines and Allied Workers Union Local 103 (NAMAWU), was the exclusive bargaining agent of the rank and file employees of Maricalum Mining Corporation (MMC), an entity operating a copper mine and mill complex at Sipalay, Negros Occidental.

On October 2, 1992, pursuant to a Purchase and Sale Agreement6 executed between GHI and Asset Privatization Trust (APT), the former bought ninety percent (90%) of MMC’s shares and financial claims. These financial claims were converted into three Promissory Notes issued by MMC in favor of GHI totaling P500M and secured by mortgages over MMC’s properties.

Upon the signing of the Purchase and Sale Agreement and upon the full satisfaction of the stipulated down payment, GHI immediately took physical possession of the mine site and its facilities, and took full control of the management and operation of MMC.

Almost four years thereafter, or on August 23, 1996, a labor dispute (refusal to bargain

collectively and unfair labor practice) arose between MMC and NAMAWU, with the latter eventually filing with the National Conciliation and Mediation Board of Bacolod City a notice of strike. Then Labor Secretary later assumed jurisdiction over the dispute and ruled in favor of NAMAWU. In his July 30, 1997 Order in OS-AJ-10-96-014 (Quisumbing Order), Secretary Quisumbing declared that the lay-off (of workers) implemented on May 7, 1996 and October 7, 1996 was illegal and that MMC committed unfair labor practice. He then ordered the reinstatement of the laid-off workers, with payment of full backwages and benefits, and directed the execution of a new collective bargaining agreement (CBA) incorporating the terms and conditions of the previous CBA providing for an annual increase in the workers’ daily wage.

On May 11, 2001, then Acting Department of Labor and Employment (DOLE) Secretary, now also an Associate Justice of this Court, Arturo D. Brion, on motion of NAMAWU, directed the issuance of a partial writ of execution (Brion Writ), and ordered the DOLE sheriffs to proceed to the MMC premises for the execution of the same. Much later, in 2006, this Court, in G.R. Nos. 157696-97, entitled Maricalum Mining Corporation v. Brion and NAMAWU, affirmed the propriety of the issuance of the Brion Writ. The Brion Writ was not fully satisfied because MMC’s resident manager resisted its enforcement. On motion of NAMAWU, then DOLE Secretary Patricia A. Sto. Tomas ordered the issuance of the July 18, 2002 Alias Writ of Execution and Break-Open Order (Sto. Tomas Writ). On October 11, 2002, the respondent acting sheriffs, the members of the union, and several armed men implemented the Sto. Tomas Writ, and levied on the properties of MMC located at its compound in Sipalay, Negros Occidental. On October 14, 2002, GHI filed with the Regional Trial Court (RTC) of Kabankalan City, Negros Occidental, Special Civil Action (SCA) No. 1127 for Contempt with Prayer for the Issuance of a Temporary Restraining Order (TRO) and Writ of Preliminary Injunction and to Nullify the Sheriff’s Levy on Properties. GHI contended that the levied properties were the subject of a Deed of Real Estate and Chattel Mortgage, dated September 5, 1996 executed by MMC in favor of GHI to secure the aforesaid P550M promissory


notes; that this deed was registered on February 24, 2000; and that the mortgaged properties were already extrajudicially foreclosed in July 2001 and sold to GHI as the highest bidder on December 3, 2001, as evidenced by the Certificate of Sale dated December 4, 2001.

The trial court issued ex parte a TRO effective for 72 hours, and set the hearing on the application for a writ of injunction. On October 17, 2002, the trial court ordered the issuance of a Writ of Injunction (issued on October 18, 2002) enjoining the DOLE sheriffs from further enforcing the Sto. Tomas Writ and from conducting any public sale of the levied-on properties, subject to GHI’s posting of a P5M bond.

Aggrieved, NAMAWU filed with the CA a petition for certiorari under Rule 65, assailing the October 17, 18 and December 4, 2002 orders of the RTC, the appellate court rendered a Decision setting aside the RTC issuances and directing the immediate execution of the Sto. Tomas Writ. The CA ruled, among others, that the circumstances surrounding the execution of the September 5, 1996 Deed of Real Estate and Chattel Mortgage yielded the conclusion that the deed was sham, fictitious and fraudulent; that it was executed two weeks after the labor dispute arose in 1996, but surprisingly, it was registered only on February 24, 2000, immediately after the Court affirmed with finality the Quisumbing Order. The CA also found that the certificates of title to MMC’s real properties did not contain any annotation of a mortgage lien, and, suspiciously, GHI did not intervene in the long drawn-out labor proceedings to protect its right as a mortgagee of virtually all the properties of MMC. The CA further ruled that the subsequent foreclosure of the mortgage was irregular, effected precisely to prevent the satisfaction of the judgment against MMC. It noted that the foreclosure proceedings were initiated in July 2001, shortly after the issuance of the Brion Writ; and, more importantly, the basis for the extrajudicial foreclosure was not the failure of MMC to pay the mortgage debt, but its failure "to satisfy any money judgment against it rendered by a court or tribunal of competent jurisdiction, in favor of any person, firm or entity, without any legal ground or reason.

ISSUE: Whether or not the mortgage and sale agreement between GHI and MMC is valid and

would prevent the satisfaction of the claims of NAMAWU because of unfair labor practice?

RULING: The mortgage was not a sham.Republic etc., v. "G" Holdings, Inc. acknowledged the existence of the Purchase and Sale Agreement between the APT and the GHI, and recounts the facts attendant to that transaction, as follows:The series of negotiations between the petitioner Republic of the Philippines, through the APT as its trustee, and "G" Holdings culminated in the execution of a purchase and sale agreement on October 2, 1992. Under the agreement, the Republic undertook to sell and deliver 90% of the entire issued and outstanding shares of MMC, as well as its company notes, to "G" Holdings in consideration of the purchase price of P673,161,280. It also provided for a down payment of P98,704,000 with the balance divided into four tranches payable in installment over a period of ten years." The "company notes" mentioned therein were actually the very same three (3) Promissory Notes amounting to P550M, issued by MMC in favor of GHI. As already adverted to above, these notes uniformly contained stipulations "establishing and constituting" mortgages over MMC’s real and personal properties.It may be remembered that APT acquired the MMC from the PNB and the DBP. Then, in compliance with its mandate to privatize government assets, APT sold the aforesaid MMC shares and notes to GHI. To repeat, this Court has recognized this Purchase and Sale Agreement in Republic, etc., v. "G" Holdings, Inc. The participation of the Government, through APT, in this transaction is significant. Because the Government had actively negotiated and, eventually, executed the agreement, then the transaction is imbued with an aura of official authority, giving rise to the presumption of regularity in its execution. This presumption would cover all related transactional acts and documents needed to consummate the privatization sale, inclusive of the Promissory Notes. It is obvious, then, that the Government, through APT, consented to the "establishment and constitution" of the mortgages on the assets of MMC in favor of GHI, as provided in the notes. Accordingly, the notes (and the stipulations therein) enjoy the benefit of the same presumption of regularity accorded to government actions. Given the Government consent thereto, and clothed with the


presumption of regularity, the mortgages cannot be characterized as sham, fictitious or fraudulent. It is difficult to conceive that these mortgages, already existing in 1992, almost four (4) years before NAMAWU filed its notice of strike, were a "fictitious" arrangement intended to defraud NAMAWU. After all, they were agreed upon long before the seeds of the labor dispute germinated.

We are not unmindful, however, of the fact that the labor claims of NAMAWU, acknowledged by this Court in Maricalum, still await final execution. As success fades from NAMAWU’s efforts to execute on the properties of MMC, which were validly foreclosed by GHI, we see that NAMAWU always had, and may still have, ample supplemental remedies found in Rule 39 of the Rules of Court in order to protect its rights against MMC.

48. G.R. No. 177024 October 30, 2009

THE HERITAGE HOTEL MANILA (OWNED AND OPERATED BY GRAND PLAZA HOTEL

CORPORATION) Petitioner,vs.

PINAG-ISANG GALING AT LAKAS NG MGA MANGGAGAWA SA HERITAGE MANILA

(PIGLAS-HERITAGE), Respondent

This case is about a company’s objections to the registration of its rank and file union for non-compliance with the requirements of its registration.

FACTS: Sometime in 2000, certain rank and file employees of petitioner Heritage Hotel Manila (petitioner company) formed the "Heritage Hotel Employees Union" (the HHE union). The Department of Labor and Employment-National Capital Region (DOLE-NCR) later issued a certificate of registration to this union. Subsequently, the HHE union filed a petition for certification election that petitioner company opposed alleging that the HHE union misrepresented itself to be an independent union, when it was, in truth, a local chapter of the National Union of Workers in Hotel and Restaurant and Allied Industries (NUWHRAIN) and the company also filed a petition for the cancellation of the HHE union’s registration certificate.

The Med-Arbiter granted the HHE union’s petition for certification election. Petitioner company appealed it and filed a motion for reconsideration which was both denied respectively, prompting it to file a petitioin for certiorari with the CA.On October 12, 2001 the Court of Appeals issued a writ of injunction against the holding of the HHE union’s certification election, effective until the petition for cancellation of that union’s registration shall have been resolved with finality. The decision of the Court of Appeals became final when the HHE union withdrew the petition for review that it filed with this Court.

On December 10, 2003 certain rank and file employees of petitioner company held a meeting and formed another union, the respondent Pinag-Isang Galing at Lakas ng mga Manggagawa sa Heritage Manila (the PIGLAS union). This union applied for registration with the DOLE-NCR and got its registration certificate on February 9, 2004. Two months later, the members of the first union, the HHE union, adopted a resolution for its dissolution. The HHE union then filed a petition for cancellation of its union registration. On September 4, 2004 respondent PIGLAS union filed a petition for certification election that petitioner company also opposed, alleging that the new union’s officers and members were also those who comprised the old union. According to the company, the employees involved formed the PIGLAS union to circumvent the Court of Appeals’ injunction against the holding of the certification election sought by the former union. Despite the company’s opposition, however, the Med-Arbiter granted the petition for certification election. On December 6, 2004, petitioner Company filed a petition to cancel the union registration of respondent PIGLAS union. The company claimed that the union made fatal misrepresentation in its application for union registration and committed “dual unionism" which is a ground for canceling a union’s registration.

ISSUE: Whether or not the new Union can have a valid certification election?

RULING: The charge that a labor organization committed fraud and misrepresentation in securing its registration is a serious charge and deserves close scrutiny. Once such charge is proved, the labor union acquires none of the rights accorded to registered organizations.


Here, the discrepancies in the number of union members or employees stated in the various supporting documents that respondent PIGLAS union submitted to labor authorities can be explained. While it appears in the minutes of the December 10, 2003 organizational meeting that only 90 employees responded to the roll call at the beginning, it cannot be assumed that such number could not grow to 128 as reflected on the signature sheet for attendance. There is also nothing essentially mysterious or irregular about the fact that only 127 members ratified the union’s constitution and by-laws when 128 signed the attendance sheet. It cannot be assumed that all those who attended approved of the constitution and by-laws. Any member had the right to hold out and refrain from ratifying those documents or to simply ignore the process. At any rate, the Labor Code and its implementing rules do not require that the number of members appearing on the documents in question should completely dovetail. For as long as the documents and signatures are shown to be genuine and regular and the constitution and by-laws democratically ratified, the union is deemed to have complied with registration requirements. Petitioner company claims that respondent PIGLAS union was required to submit the names of all its members comprising at least 20 percent of the employees in the bargaining unit. Yet the list it submitted named only 100 members notwithstanding that the signature and attendance sheets reflected a membership of 127 or 128 employees. This omission, said the company, amounted to material misrepresentation that warranted the cancellation of the union’s registration.But, as the labor authorities held, this discrepancy is immaterial. A comparison of the documents shows that, except for six members, the names found in the subject list are also in the attendance and signature sheets. Notably, the bargaining unit that respondent PIGLAS union sought to represent consisted of 250 employees. Only 20 percent of this number or 50 employees were required to unionize. Here, the union more than complied with such requirement. And last, the fact that some of respondent PIGLAS union’s members were also members of the old rank and file union, the HHE union, is not a ground for canceling the new union’s registration. The right of any person to join an organization also includes the right to leave that organization and join another one.

49. G.R. No. 89920 October 18, 1990UNIVERSITY OF STO. TOMAS, petitioner,

vs. NATIONAL LABOR RELATIONS COMMISSION, UST FACULTY UNION,

respondents. FACT: The University of Sto. Tomas (UST) terminated the employment of all 16 union officers and directors of respondent UST Faculty Union on the ground that in publishing or causing to be published in Strike the libelous and defamatory attacks against the Father Rector, has committed the offenses of grave misconduct, serious disrespect to a superior and conduct unbecoming a faculty member. As a result of the dismissal of said employees, some faculty members staged mass leaves of absence and several days thereafter, disrupting classes in all levels at the University. The faculty union filed a complaint for illegal dismissal and unfair labor practice with the DOLE. The labor arbiter certified the matter to the Secretary of Labor and Employment for a possible suspension of the effects of termination. Secretary Franklin Drilon subsequently issued an order suspending the termination of the 16 employees. Petitioner UST filed a motion for reconsideration. Secretary Drilon issued another order modifying his previous order, ordering UST to readmit all its faculty members under the same terms and conditions prevailing prior to the present dispute. The NLRC subsequently caned the parties to a conference. The respondent union filed before the NLRC a motion to implement the orders of the Honorable Secretary of Labor and Employment; while petitioner filed its opposition to the private respondent's motion. The NLRC issued a resolution, which is the subject of this petition for certiorari. ISSUES: Whether or not the order of the alternative remedies of actual reinstatement or payroll reinstatement of the dismissed faculty members is proper? Whether or not the University can be required to pay full backwages of the dismissed employees? Whether or not NLRC is correct when it arrogated upon itself the exercise of the right and prerogatives reposed by law to the petitioner university in the latter’s capacity as employer?

HELD: (1) It was held that it was error for the NLRC to order the alternative remedies of


payroll reinstatement or actual reinstatement. However, the order did not amount to grave abuse of discretion. Such error is merely an error of judgment which is not correctible by a special civil action for certiorari. The NLRC was only trying its best to work out a satisfactory ad hoc solution to a festering and serious problem. The payroll reinstatement will actually minimize the petitioners’ problems in the payment of full backwages.

(2) A return-to-work order is immediately effective and executory despite the filing of a motion for reconsideration by the petitioner. Additionally, although the Secretary's order was modified, the return-to-work portion of the earlier order which states that "the faculty members should be admitted under the same terms and conditions prevailing prior to the dispute" was affirmed. Since the factual findings of quasi-judicial agencies like the NLRC are generally accorded not only respect but even finality if such findings are supported by substantial evidence. There is no showing that such substantial evidence is not present. The reinstated faculty members' refusal to assume their substantially equivalent academic assignments does not contravene the Secretary's return-to-work order. They were merely insisting on being given actual teaching loads, on the return-to-work order being followed. It was found that their persistence justified as they are rightfully and legally entitled to actual reinstatement. Since the petitioner failed to comply with the Secretary's order of actual reinstatement, it was adjudged that the NLRC's award of backwages until actual reinstatement is correct.

(3) The hiring, firing, transfer, demotion and promotion of employees are traditionally Identified as management prerogatives. However, these are not absolute prerogatives. They are subject to limitations found in law, a CBA, or general principles of fair play and justice. Article 263(g) is one such limitation provided by law. To the extent that Art. 263(g) calls for the admission of all workers under the same terms and conditions prevailing before the strike, the petitioner University is restricted from exercising its generally unbounded right to transfer or reassign its employees. The petitioner manifests the fear that if the temporarily reinstated faculty members will be allowed to handle actual teaching assignments in the

classroom, the latter would take advantage of the situation by making the classroom the forum not for the purpose of imparting knowledge to the students but for the purpose of assailing and lambasting the administration. There may be a basis for such a fear. However, such a fear is speculative and does not warrant a deviation from the principle that the dismissed faculty members must be actually reinstated pending resolution of the labor dispute.

50. G.R. No. 182836 October 13, 2009

CONTINENTAL STEEL MANUFACTURING CORPORATION, Petitioner, vs. HON.

ACCREDITED VOLUNTARY ARBITRATOR ALLAN S. MONTAÑO and NAGKAKAISANG

MANGGAGAWA NG CENTRO STEEL CORPORATION-SOLIDARITY OF UNIONS IN

THE PHILIPPINES FOR EMPOWERMENT AND REFORMS (NMCSC-SUPER),

Respondents.

FACTS: Hortillano, an employee of petitioner Continental Steel and a member of respondent Union filed on 9 January 2006, a claim for Paternity Leave, Bereavement Leave and Death and Accident Insurance for dependent, pursuant to the CBA concluded between Continental and the Union. The claim was based on the death of Hortillano’s unborn child. Hortillano’s wife had a premature delivery while she was in the 38th week of pregnancy. According to the Certificate of Fetal Death, the female fetus died during labor due to fetal Anoxia secondary to uteroplacental insufficiency. Continental Steel immediately granted Hortillano’s claim for paternity leave but denied his claims for bereavement leave and other death benefits, consisting of the death and accident insurance. ISSUE: Whether or not the CBA is clear and unambiguous so that the literal and legal meaning of death should be applied such that only one with juridical personality can die and a dead fetus never acquired a juridical personality?

HELD: As identified, the elements for bereavement leave under Article X, Section 2 of the CBA are: (1) death; (2) the death must be of a dependent; and (3) legitimate relations of the dependent to the employee. The requisites for death and accident insurance under Article


XVIII, Section 4(3) of the CBA are same with the above elements with additional element of presentation of the proper legal document to prove such death.

Death has been defined as the cessation of life. Life is not synonymous with civil personality. One need not acquire civil personality first before he/she could die. Even a child inside the womb already has life. As such, then the cessation thereof even prior to the child being delivered, qualifies as death. A dependent is "one who relies on another for support; one not able to exist or sustain oneself without the power or aid of someone else." Under said general definition, even an unborn child is a dependent of its parents. Additionally, the CBA did not provide a qualification for the child dependent. Therefore, child shall be understood in its more general sense, which includes the unborn fetus in the mother’s womb. The term legitimate merely addresses the dependent child’s status in relation to his/her parents. A legitimate child is a product of, and, therefore, implies a valid and lawful marriage. The children conceived or born during the marriage of the parents are legitimate. Hortillano and his wife were validly married and that their child was conceived during said marriage, hence, making said child legitimate upon her conception. Hortillano was also able to comply with the fourth element entitling him to death and accident insurance under the CBA or the presentation of the death certificate of his unborn child. Given the existence of all the requisites for bereavement leave and other death benefits under the CBA, Hortillano’s claims for the same should have been granted by Continental Steel.

IN VIEW WHEREOF, the Petition is DENIED.

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