Case Full Text Labor

7/29/2019 Case Full Text Labor

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G.R. No. 106231 November 16, 1994

HAWAIIAN-PHILIPPINE COMPANY, petitioner,vs.REYNALDO J. GULMATICO, Labor Arbiter, Regional Arbitration Branch No. VI, AND NATIONAL FEDERATIONOF SUGAR WORKERS-FOOD AND GENERAL TRADES representing all the sugar farm workers of theHAWAIIAN PHILIPPINE MILLING DISTRICT, respondents.

Angara, Abella, Concepcion, Regala & Cruz for petitioner.

Manlapao, Ymballa and Chaves for private respondent.

BIDIN, J.:

This petition forcertiorariand prohibition with preliminary injunction seeks to annul the Order dated June 29, 1992issued by public respondent Labor Arbiter Reynaldo J. Gulmatico denying petitioner's motion for "Claims on R.A. 809"in RAB VI Case No. 06-07-10256-89, the dispositive portion of which reads, in part:

WHEREFORE, premises considered, the motion to dismiss dated July 31, 1989 and thesupplement thereto dated September 19, 1989 filed by respondent company together with themotion to dismiss filed by respondent Ramon Jison dated August 27, 1990 and Francisco Jisondated September 20, 1990, respectively, are hereby DENIED.

xxx xxx xxx

(Rollo, p. 59)

The antecedent facts are as follows:

On July 4, 1989, respondent union, the National Federation of Sugar Workers-Food and General Trades (NFSW-FGT) filed RAB VI Case No. 06-07-10256-89 against herein petitioner Hawaiian-Philippine Company for claims under

Republic Act 809 (The Sugar Act of 1952). Respondent union claimed that the sugar farm workers within petitioner'smilling district have never availed of the benefits due them under the law.

Under Section 9 of R.A 809, otherwise known as the Sugar Act of 1952, it is provided, to wit:

Sec. 9. In addition to the benefits granted by the Minimum Wage Law, the proceeds of any increasein participation granted to planters under this Act and above their present share shall be dividedbetween the planter and his laborers in the following proportions;

Sixty per centum of the increase participation for the laborers and forty per centum for the planters.The distribution of the share corresponding to the laborers shall be made under the supervision ofthe Department of Labor.

xxx xxx xxx

(Emphasis supplied.)

On July 31, 1989, petitioner filed a "Motion to Dismiss," followed by a "Supplemental Motion to Dismiss" onSeptember 19, 1989. Petitioner contended that public respondent Labor Arbiter has no jurisdiction to entertain andresolve the case, and that respondent union has no cause of action against petitioner.

On August 23, 1989, respondent union filed an "Opposition to Motion to Dismiss."


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On October 3,1989, petitioner applied a "Reply to Opposition" followed by a "Citation of Authorities in Support ofMotion to Dismiss."

On December 20, 1989, respondent union filed an amended complaint additionally impleading as complainants EfrenElaco, Bienvenido Gulmatico, Alberto Amacio, Narciso Vasquez, Mario Casociano and all the other farm workers ofthe sugar planters milling with petitioner from 1979 up to the present, and as respondents, Jose Maria Regalado,Ramon Jison, Rolly Hernaez, Rodolfo Gamboa, Francisco Jison and all other sugar planters milling their canes with

petitioner from 1979 up to the present.

On August 27, 1990, Ramon Jison, one of the respondents impleaded in the amended complaint, filed a "Motion toDismiss and/or to Include Necessary Parties," praying for the inclusion as co-respondents of the Asociacion deHacenderos de Silan-Saravia, Inc. and the Associate Planters of Silay-Saravia, Inc.

On June 29, 1992, public respondent promulgated the assailed Order denying petitioner's Motion to Dismiss andSupplemental Motion to Dismiss.

Hence, this petition filed by Hawaiian-Philippine Company.

Petitioner reasserts the two lesson earlier raised in its Motion to Dismiss which public respondent unfavorablyresolved in the assailed Order.

These two issues are first, whether public respondent Labor Arbiter has jurisdiction to hear and decide the caseagainst petitioner; and the second, whether respondent union and/or the farm workers represented by it have a causeof action against petitioner.

Petitioner contends that the complaint filed against it cannot be categorized under any of the cases falling within thejurisdiction of the Labor Arbiter as enumerated in Article 217 of the Labor Code, as amended, considering that noemployer-employee relationship exists between petitioner milling company and the farm workers represented byrespondent union. Article 217 of the Labor Code provides:

Art. 217. Jurisdiction of Labor Arbiters and the Commission. (a) Except as otherwise providedunder this Code, the Labor Arbiters shall have original and exclusive jurisdiction to hear anddecide, within thirty (30) calendar days after the submission of the case by the parties for decisionwithout extension, even in the absence of stenographic notes, the following cases involving all

workers, whether agricultural or non-agricultural:

1. Unfair labor practice cases;

2. Termination disputes;

3. If accompanied with a claim for reinstatement, those cases that workers may file involvingwages, rates of pay, hours of work and other terms and conditions of employment;

4. Claims for actual, moral, exemplary and other forms of damages arising from employer-employee relations;

5. Cases arising from any violation of Article 264 of this Code, including questions involving the

legality of strikes and lockouts; and

6. Except claims for employees' compensation, social security, medicare from maternitybenefits, all other claims arising from employer-employee relations, including those of persons indomestic or household service, involving an amount exceeding Five Thousand Pesos (P5,000.00),whether or not accompanied with a claim for reinstatement. (Emphasis supplies)

In support of the contention that the Labor Arbiter has no jurisdiction to hear and decide the case against petitioner,the latter cites the ruling in San Miguel Corporation vs. NLRC, 161 SCRA 719 [1988], wherein it was held that asingle unifying element runs through the cases and disputes falling under the jurisdiction of the Labor Arbiter and that


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is that all the enumerated cases and disputes arise out of or are in connection with an employer-employeerelationship, or some aspect or incident of such relationship. Likewise, in Federation of Free Farmers vs. Court of

Appeals, 107 SCRA 411 [1981], this Court held that:

. . . . From the beginning of the sugar industry, the centrals have never had any privity with theplantation laborers, since they had their own laborers to take care of. . . . Nowhere in Republic Act809 (the Sugar Act of 1952) can we find anything that creates any relationship between the

laborers of the planters and the centrals. . . .

. . . Under no principle of law or equity can we impose on the central. . . any liability to theplantation laborers. . . . (Emphasis supplied)

On the strength of the aforecited authorities, petitioner contends that it is not a proper party and has no involvementin the case filed by respondent union as it is not the employer of the respondent sugar workers.

Furthermore, to bolster its contention, petitioner cites the Rules and Regulations Implementing RA 809 issued by thethen Wage Administration Service pursuant to the Administrative Order of the Labor Secretary dated October 1,1952. Section 1 thereof states:

Sec. 1. The payment of the proceeds derived from the sixty per centum of any increase in the

participation due the laborers shall be directly paid to the individual laborerconcerned at the end ofeach milling season by his respective planter under the Supervision of the Secretary of Laboror hisduly authorized representative by means of payrolls prepared by said planter. (Emphasis supplied)

In addition, under Letter of Instruction No. 854 dated May 1, 1979, it is provided:

1. Payment subject to supervision. The workers' share shall be paid directly by the planterconcerned to the workers or claimants entitled thereto subject to the supervision of the Minister ofLabor or his duly designated representative.

The responsibility for the payment of the sugar workers' benefits under R.A. 809 was categorically ruled upon inthe Federation of Free Farmers case, supra., to wit:

. . . the matter of paying the plantation laborers of the respective planters becomes exclusively theconcern of the planters, the laborers and the Department of Labor. Under no principle of law orequity can we impose on the Central here VICTORIAS any liability to the respective plantationlaborers, should any of their respective planters-employers fail to pay their legal share. After all,since under the law it is the Department of Labor which is the office directly called upon tosupervise such payment, it is but reasonable to maintain that if any blame is to be fixed for theunfortunate situation of the unpaid laborers, the same should principally be laid on the planters andsecondarily on the Department of Labor, but surely never on the central.

Whatever liability there exists between favor of the plantation laborers should be pinned on thePLANTERS, their respective employers. (Emphasis supplied)

On the other hand, public respondent and respondent union maintain the position that privity exists betweenpetitioner and the sugar workers. Actually, public respondent, in resolving petitioner's Motion to Dismiss, skirted theissue of whether an employer-employee relationship indeed exists between petitioner milling company and the sugar

workers. He did not categorically rule thereon but instead relied on the observation that when petitioner delivered toits planters the quedans representing its share, petitioner did not first ascertain whether the shares of all workers orclaimants were fully paid/covered pursuant to LOI No. 854, and that petitioner did not have the necessary certificationfrom the Department of Labor attesting to such fact of delivery. In view of these observations, public respondentsubscribed to the possibility that petitioner may still have a liability vis-a-vis the workers' share. Consequently, in orderthat the workers would not have to litigate their claim separately, which would be tantamount to tolerating the splittingof a cause of action, public respondent held that petitioner should still be included in this case as an indispensableparty without which a full determination of this case would not be obtained.

We find for petitioner.


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The Solicitor General, in its adverse Comment, correctly agreed with petitioner's contention that while the jurisdictionover controversies involving agricultural workers has been transferred from the Court of Agrarian Relations to theLabor Arbiters under the Labor Code as amended, the said transferred jurisdiction is however, not without limitations.The dispute or controversy must still fall under one of the cases enumerated under Article 217 of the Labor Code,which cases, as ruled in San Miguel, supra., arise out of or are in connection with an employer-employee relationship.

In the case at bar, it is clear that there is no employer-employee relationship between petitioner milling company and

respondent union and/or its members-workers, a fact which, the Solicitor General notes, public respondent did notdispute or was silent about. Absent the jurisdictional requisite of an employer-employee relationship betweenpetitioner and private respondent, the inevitable conclusion is that public respondent is without jurisdiction to hear anddecide the case with respect to petitioner.

Anent the issue of whether respondent union and/or its members-workers have a cause of action against petitioner,the same must be resolved in the negative. To have a cause of action, the claimant must show that he has a legalright and the respondent a correlative duty in respect thereof, which the latter violated by some wrongful act oromission (Marquez vs. Varela, 92 Phil. 373 [1952]). In the instant case, a simple reading of Section 9 of R.A. 809 andSection 1 of LOI 845 as aforequoted, would show that the payment of the workers' share is a liability of the planters-employers, and not of the milling company/sugar central. We thus reiterate Our ruling on this matter, as enunciatedin Federation of Free Farmers, supra., to wit:

. . . . Nowhere in Republic Act No. 809 can we find anything that creates any relationship between

the laborers of the planters and the centrals. Under the terms of said Act, the old practice of thecentrals issuing the quedans to the respective PLANTERS for their share of the proceeds of milledsugar per their milling contracts has not been altered or modified. In other words, the language ofthe Act does not in any manner make the central the insurer on behalf of the plantation laborersthat the latter's respective employers-planters would pay them their share. . . .

. . . . Accordingly, the only obligation of the centrals (under Section 9 of the Act), like VICTORIAS,is to give to the respective planters, like PLANTERS herein, the planters' share in the proportionstipulated in the milling contract which would necessarily include the portion of 60% pertaining tothe laborers. Once this has been done, the central is already out of the picture. . . . (Emphasissupplied)

In the case at bar, it is disputed that petitioner milling company has already distributed to its planters their respectiveshares. Consequently, petitioner has fulfilled its part and has nothing more to do with the subsequent distribution by

the planters of the workers' share.

Public respondent's contention that petitioner is an indispensable party is not supported by the applicable provisionsof the Rules of Court. Under Section 7, Rule 3 thereof, indispensable parties are "parties in interest" without whom nofinal determination of the action can be obtained. In this case, petitioner cannot be deemed as a party in interestsince there is no privity or legal obligation linking it to respondent union and/or its members-workers.

In order to further justify petitioner's compulsory joinder as a party to this case, public respondent relies on petitioners'lack of certification from the Department of Labor of its delivery of the planters' shares as evidence of an alleged"conspicuous display of concerted conspiracy between the respondent sugar central (petitioner) and its adherentplanters to deprive the workers or claimants of their shares in the increase in participation of the adherent planters."(Rollo, p. 56)

The assertion is based on factual conclusions which have yet to be proved. And even assuming for the sake of

argument that public respondent's conclusions are true, respondent union's and/or its workers' recourse lies with theSecretary of Labor, upon whom authority is vested under RA 809 to supervise the payment of the workers' shares.

Any act or omission involving the legal right of the workers to said shares may be acted upon by the Labor Secretaryeithermotu proprio or at the instance of the workers. In this case however, no such action has been brought by thesubject workers, thereby raising the presumption that no actionable violation has been committed.

Public respondent is concerned that the respondent planters may easily put up the defense that the workers' share iswith petitioner milling company, giving rise to multiplicity of suits. The Solicitor General correctly postulates that theplanters cannot legally set up the said defense since the payment of the workers' share is a direct obligation of theplanters to their workers that cannot be shifted to the miller/central. Furthermore, the Solicitor General notes that


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there is nothing in RA 809 which suggests directly or indirectly that the obligation of the planter to pay the workers'share is dependent upon his receipt from the miller of his own share. If indeed the planter did not receive his just anddue share from the miller, he is not without legal remedies to enforce his rights. The proper recourse against areneging miller or central is for the planter to implead the former not as an indispensable party but as a third partydefendant under Section 12, Rule 6 of the Rules of Court. In such case, herein petitioner milling company would be aproper third party dependent because it is directly liable to the planters (the original defendants) for all or part of theworkers' claim. However, the planters involved in this controversy have not filed any complaint of such a nature

against petitioner, thereby lending credence to the conclusion that petitioner has fulfilled its part vis-a-vis its obligationunder RA 809.

WHEREFORE, premises considered, the petition is GRANTED. Public respondent Reynaldo J. Gulmatico is herebyORDERED to DISMISS RAB VI Case No. 06-07-10256-89 with respect to herein petitioner Hawaiian-PhilippineCompany and to PROCEED WITH DISPATCH in resolving the said case.

SO ORDERED.

[G.R. No. 117650. March 7, 1996]

SULPICIO LINES, INC., pet i t ioner, vs. NATIONAL LABOR RELATIONSCOMMISSION and JAIME CAGATAN, respondents.

D E C I S I O N

KAPUNAN, J.:

Petitioner Sulpicio Lines, Inc., owner of MV Cotabato Princess, onJanuary 15, 1992 dismissed private respondent Jaime Cagatan,

a messman of the said vessel, allegedly for being absent without leave for aprolonged period of six (6) months.

As a result of his dismissal, the private respondent filed a complaint forillegal dismissal before the National Labor Relations Commission (NLRC)through its National Capital Region Arbitration Branch in Manila, docketed asNLRC-NCR Case No. 00-06-3163-92.[1]

Responding to the said complaint, petitioner, on June 25, 1992, filed aMotion to Dismiss on the ground of improper venue, stating, among otherthings, that the case for illegal dismissal should have been lodged with

the NLRCs Regional Branch No. VII (Cebu), as its main office was locatedin Cebu City.[2]

In an Order dated August 21, 1992 Labor Arbiter Arthur L. Amansec of theNLRC-NCR denied petitioners Motion to Dismiss, holding that:
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Considering that the complainant is a ship steward, traveled on board respondents

ship along the Manila-Enstancia-Iloilo-Zamboanga-Cotabato vice-versa route, Manila

can be said to be part of the complainants territorial workplace.[3]

The aforequoted Order was seasonably appealed to the NLRC by

petitioner. On February 28, 1994, respondent NLRC found petitioners appealunmeritorious and sustained the LaborArbiters August 21, 1992 ruling,explaining that under the New NLRC Rules, the Commission or the Labor

Arbiter before whom the case is pending may order a change ofvenue.[4]Finding no grave abuse of discretion in the Labor Arbiters assailedOrder, respondent NLRC emphasized that:

[T]he complainant instituted the Action in Manila where he resides. Hence, we see no

grave abuse of discretion on the part ofthe labor arbiter in denying the respondents

Motion to Dismiss as We find support in the basic principle that the State shall afford

protection to labor and that the NLRC is not bound by strict technical rules ofprocedure.[5]

Undaunted, petitioner sought a reconsideration of the above Order, whichthe public respondent denied in its Resolution dated July 22,1994.[6]Consequently, petitioner comes to this Court for relief, in the form of aSpecial Civil Action for Certiorari under Rule 65 of the Rules of Court,contending that public respondent NLRC acted with grave abuse of discretionamounting to lack or excess of jurisdiction when it issued its assailed rulings.[7]

It is petitioners principal contention that a ship or vessel as workplace isan extension of its homeport or principal place of business, and that beingpart of the territory of the homeport, (such) vessel is governed to a largeextent by the laws and is under the jurisdiction of the homeport.[8]Based onthis submission, petitioner avers that its vessel-as-workplace is under theterritorial jurisdiction of the Regional Arbitration branch where (its) . . .principal office is located, which is Branch VII, located in Cebu City.[9]

We disagree.

As early as 1911, this Court held that the question of venue essentially

relates to the trial and touches more upon the convenience of the parties,rather than upon the substance and merits of the case.[10]Our permissive rulesunderlying provisions on venue are intended to assure convenience for theplaintiff and his witnesses and to promote the ends of justice. This axiom allthe more finds applicability in cases involving labor and management becauseof the principle, paramount in our jurisdiction, that the State shall afford fullprotection to labor.[11]
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Even in cases where venue has been stipulated by the parties by contract,this Court has not hesitated to set aside agreements on venue if the samewould lead to a situation so grossly inconvenient to one party as to virtuallynegate his claim. In Sweet Lines vs. Teves,[12]involving a contract of adhesion,we held that:

An agreement will not be held valid where it practically negates the action of the

claimants, such as the private respondents herein. The philosophy underlying the

provisions on transfer of venue of actions is the convenience of the plaintiffs as well

as his witnesses and to promote the ends of justice. Considering the expense and

trouble a passenger residing outside Cebu City would incur to prosecute a claim in the

City of Cebu, he would most probably decide not to file the action at all. The

condition will thus defeat, instead of enhance, the ends of justice. Upon the other

hand, petitioner had branches or offices in the respective ports of call of the vessels

and can afford to litigate in any of these places. Hence, the filing of the suit in the

CFI of Misamis Oriental, as was done in the instant case will not cause inconvenience

to, much less prejudice petitioner.[13]

In the case at bench, it is not denied that while petitioner maintains itsprincipal office in Cebu City, it retains a major booking and shipping office inManila from which it earns considerable revenue, and from which it hires andtrains a significant number of its workforce. Its virulent insistence on holdingthe proceedings in the NLRCs regional arbitration branch in Cebu City isobviously a ploy to inconvenience the private respondent, a mere stewardwho resides in Metro Manila, who would obviously not be able to afford thefrequent trips to Cebu City in order to follow up his case.

Even the provisions cited by petitioner in support of its contention thatvenue of the illegal dismissal case lodged by private respondent is improperlylaid, would not absolutely support his claim that respondent NLRC acted withgrave abuse of discretion in allowing the private respondent to file his casewith the NCR arbitration branch.

Section 1, Rule IV of the NLRC Rules of Procedure on Venue, providesthat:

Section 1. Venue - (a) All cases in which Labor Arbiters have authority to hear and

decide maybe filed in the Regional Arbitration Branch having jurisdiction over the

workplace of the complainant/petitioner.

This provision is obviously permissive, for the said section uses the wordmay, allowing a different venue when the interests of substantial justicedemand a different one. In any case, as stated earlier, the Constitutional
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protection accorded to labor is a paramount and compelling factor, providedthe venue chosen is not altogether oppressive to the employer.

Moreover, Section 1, Rule IV of the 1990 NLRC Rules additionallyprovides that, for purposes of venue, workplace shall be understood as the

place or locality where the employee is regularly assigned when the cause ofaction arose. Since the private respondents regular place of assignment isthe vessel MV Cotabato Princess which plies the Manila-Estancia-Iloilo-Zamboanga-Cotabato route, we are of the opinion that Labor Arbiter ArthurL. Amansec was correct in concluding that Manila could be considered part ofthe complainants territorial workplace. Respondent NLRC, therefore,committed no grave abuse of discretion in sustaining the labor arbiters denialof herein petitioners Motion to Dismiss.

WHEREFORE, premises considered, the instant petition is herebyDISMISSED for lack of merit.

SO ORDERED.

G.R. No. L-56431 January 19, 1988

NATIONAL UNION OF BANK EMPLOYEES, In Its Own Right And In Behalf Of CBTC EMPLOYEES AffiliatedWith It; CBTC EMPLOYEES UNION, In Its Own Right And Interest And In Behalf Of All CBTC Rank And FileEmployees Including Its Members, BENJAMIN GABAT, BIENVENIDO MORALEDA, ELICITA GAMBOA,FAUSTINO TEVES, SALVADOR LISING, and NESTOR DE LOS SANTOS, petitioners,

vs.THE HON. JUDGE ALFREDO M. LAZARO, CFI-MANILA BRANCH XXXV; COMMERCLKL BANK AND TRUSTCOMPANY OF THE PHILIPPINES; BANK OF THE PHILIPPINE ISLANDS; AYALA CORPORATION; MANUEL J.MARQUEZ; ENRIQUE ZOBEL; ALBERTO VILLA-ABRILLE; VICENTE A. PACIS, JR.; and DEOGRACIAS A.

FERNANDO, respondents.

SARMIENTO, J .:

The sole issue in this special civil action for certiorari is whether or not the courts may take cognizance of claims fordamages arising from a labor controversy.

The antecedent facts are not disputed.

On July 1, 1977, the Commercial Bank and Trust Company, a Philippine banking institution, entered into a collectivebargaining agreement with the Commercial Bank and Trust Company Union, representing the rank and file of the

bank with a membership of over one thousand employees, and an affiliated local of the National Union of BankEmployees, a national labor organization.

The agreement was effective until June 30, 1980, with an automatic renewal clause until the parties execute a newagreement.

On May 20, 1980, the union, together with the National Union of Bank Employees, submitted to the bankmanagement proposals for the renegotiation of a new collective bargaining agreement. The following day, however,the bank suspended negotiations with the union. The bank had meanwhile entered into a merger with the Bank of thePhilippine Islands, another Philippine banking institution, which assumed all assets and liabilities thereof.


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As a consequence, the union went to the then Court of First Instance of Manila, presided over by the respondentJudge, on a complaint for specific performance, damages, and preliminary injunction against the private respondents.

Among other things, the complaint charged:

xxx xxx xxx

51. In entering in to such arrangement for the termination of the CURRENT CBA, and theconsequent destruction to existing rights, interests and benefits thereunder,CBTC is liable for wilfulinjury to the contract and property rights thereunder as provided in Article 2220 of the Civil Code ofthe Philippines;

52. By arranging for the termination of the CURRENT CBA in the manner above described, CBTCcommitted breach of said contract in bad faith, in that CBTC had taken undue advantage of its ownemployees, by concealing and hiding the negotiations towards an agreement on the sales andmerger, when it was under a statutory duty to disclose and bargain on the effects thereof,according to law;

xxx xxx xxx

54. In virtually suppressing the collective bargaining rights of plaintiffs under the law and as

provided in the CURRENT CBA, through shadow bargaining, calculated delay, suspension ofnegotiations, concealment of bargainable issues and high-handed dictation, the CBTC and itsdefendant officials, as well as the BANK OF P.I. and its defendant officials, were all actuated by adishonest purpose to secure an undue advantage; on the part of the CBTC it was to avoid freshand additional contractual commitments, which would substantially lessen and diminish theprofitability of the sale; and on the part of the BANKOF P.I., it was to avoid having to face highercompensation rates of CBTC employees in the course of integration and merger which could forcethe upgrading of the benefit package for the personnel of the merged operations, and therebypushed personnel costs upwards; substantial outlays and costs thereby entailed were all deftlyavoided and evaded, through the expedient of deliberate curtailment and suppression ofcontractual bargaining rights;

55. All the other defendants have actively cooperated with and abetted the CBTC and itsdefendant officers in negotiating, contriving and effecting the above arrangements for the

attainment of its dishonest purpose, for abuse of its rights, and for taking undueadvantage of its very own employees, through the secret sale and scheduled merger; thecollective participation therein evinces machination, deceit, wanton attitude, bad faith,and oppressive intent, wilfully causing loss or injury to plaintiffs in a manner that iscontrary to law, morals, good customs and public policy, in violation of Articles 21 and 28of the Civil Code; 1

xxx xxx xxx

Predictably, the private respondents moved for the dismissal of the case on the ground, essentially, of lack ofjurisdiction of the court.

On November 26, 1980, the respondent Judge issued an order, dismissing the case for lack of jurisdiction. Accordingto the court, the complaint partook of an unfair labor practice dispute notwithstanding the incidental claim fordamages, jurisdiction over which is vested in the labor arbiter. This order, as well as a subsequent one denyingreconsideration, is now alleged as having been issued 'in excess of his jurisdiction amounting to a grave abuse ofdiscretion."

We sustain the dismissal of the case, which is, as correctly held by the respondent court, an unfair labor practicecontroversy within the original and exclusive jurisdiction of the labor arbiters and the exclusive appellate jurisdiction ofthe National Labor Relations Commission. The claim against the Bank of Philippine Islands the principalrespondent according to the petitioners for allegedly inducing the Commercial Bank and Trust Company to violatethe existing collective bargaining agreement in the process of re-negotiation, consists mainly of the civil aspect of theunfair labor practice charge referred to under Article 247 2 of the Labor Code.


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Under Article 248 3 of the Labor Code, it shall be an unfair labor practice:

(a) To interfere with, restrain or coerce employees in the exercise of their right to self-organization;

xxx xxx xxx

(g) To violate the duty to bargain collectively as prescribed by this Code;

xxx xxx xxx

The act complained of is broad enough to embrace either provision. Since it involves collective bargaining whetheror not it involved an accompanying violation of the Civil Code it may rightly be categorized as an unfair laborpractice. The civil implications thereof do not defeat its nature as a fundamental labor offense.

As we stated, the damages (allegedly) suffered by the petitioners only form part of the civil component of the injuryarising from the unfair labor practice. Under Article 247 of the Code, "the civil aspects of all cases involving unfairlabor practices, which may include claims for damages and other affirmative relief, shall be under the jurisdiction ofthe labor arbiters. 4

The petitioners' claimed injury as a consequence of the tort allegedly committed by the private respondents,specifically, the Bank of the Philippine Islands, under Article 1314 of the Civil Code, 5 does not necessarily give thecourts jurisdiction to try the damage suit. Jurisdiction is conferred by law 6 and not necessarily by the nature of theaction. Civil controversies are not the exclusive domain of the courts. In the case at bar, Presidential Decree No. 442,as amended by Batas Blg. 70, has vested such a jurisdiction upon the labor arbiters, a jurisdiction the courts may notassume.

Jurisdiction over unfair labor practice cases, moreover, belongs generally to the labor department of the government,never the courts. In Associated Labor Union v. Gomez, 7 we said:

A rule buttressed upon statute and reason that is frequently reiterated in jurisprudence is that laborcases involving unfair practice are within the exclusive jurisdiction of the CIR. By now, this rule hasripened into dogma. It thus commands adherence, not breach.

The fact that the Bank of the Philippine Islands is not a party to the collective bargaining agreement, for which it"cannot be sued for unfair labor practice at the time of the action," 8 cannot bestow on the respondent court thejurisdiction it does not have. In Cebu Portland Cement Co. v. Cement Workers' Union, 9 we held:

xxx xxx xxx

There is no merit in the allegation. In the first place, it must be remembered thatjurisdiction is conferred by law; it is not determined by the existence of an action inanother tribunal. In other words, it is not filing of an unfair labor case in the IndustrialCourt that divests the court of first instance jurisdiction over actions properly belonging tothe former. It is the existence of a controversy that properly falls within the exclusivejurisdiction of the Industrial Court and to which the civil action is linked or connected thatremoves said civil case from the competence of the regular courts. It is for this reason

that civil actions found to be intertwined with or arising out of, a dispute exclusivelycognizable by the Court of Industrial Relations were dismissed, even if the cases werecommenced ahead of the unfair labor practice proceeding, and jurisdiction to restrainpicketing was decreed to belong to the Court of Industrial Relations although no unfairlabor practice case has as yet been instituted. For the court of first instance to loseauthority to pass upon a case, therefore, it is enough that unfair labor practice case is infact involved in or attached to the action, such fact of course being established bysufficient proof. 10

xxx xxx xxx


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Furthermore, to hold that the alleged tortious act now attributed to the Bank of the Philippine Islands may be thesubject of a separate suit is to sanction split jurisdiction long recognized to be an offense against the orderlyadministration of justice. As stated in Nolganza v. Apostol: 11

xxx xxx xxx

As far back as Associated Labor Union vs. Gomez [L-25999, February 9, 1967, 19 SCRA 304] theexclusive jurisdiction of the Court of Industrial Relations in disputes of this character was upheld."To hold otherwise," as succinctly stated by the ponente, Justice Sanchez, "is to sanction split

jurisdiction-which is obnoxious to the orderly administration of justice." Then, in Progressive LaborAssociation vs. Atlas Consolidated Mining and Development Corporation [L-27585, May 29, 1970,33 SCRA 349] decided three years later, Justice J.B.L. Reyes, speaking for the Court, stressed thatto rule that such demand for damages is to be passed upon by the regular courts of justice, insteadof leaving the matter to the Court of Industrial Relations, 'would be to sanction split jurisdiction,which is prejudicial to the orderly administration of justice'. Thereafter, this Court, in the cases ofLeoquinco vs. Canada Dry Bottling Co. [L-28621, February 22, 1971, 37 SCRA 535] and

Associated Labor Union v. Cruz ([L-28978, September 22, 1971, 41 SCRA 12], with the opinionscoming from the same distinguished jurist, adhered to such a doctrine. The latest case in point, asnoted at the outset, is the Goodrich Employees Association decision [L-30211, October 5, 1976, 73SCRA 297].

xxx xxx xxx

The petitioners' reliance upon Calderon v. Court of Appeals 12 is not well-taken. Calderon has since lost its persuasive

force, beginning with our ruling in PEPSI-COLA BOTTLING COMPANY v. MARTINEZ, 13EBON v. DEGUZMAN, 14 and AGUSAN DEL NORTE ELECTRIC COOP., INC. v. SUAREZ, 15 and following the promulgation ofPresidential Decree No. 1691, restoring the jurisdiction to decide money claims unto the labor arbiters.

Neither does the fact that the Bank of the Philippine Islands "was not an employer at the time the act was committed'abate a recourse to the labor arbiter. It should be noted indeed that the Bank of the Philippine Islands assumed "all

the assets and liabilities" 16of the Commercial Bank and Trust Company. Moreover, under the Corporation Code:

xxx xxx xxx

5. The surviving or consolidated corporation shall be responsible and liable for all theliabilities and obligations of each of the constituent corporations in the same manner as ifsuch surviving or consolidated corporation had itself incurred such liabilities orobligations; and any claim, action or proceeding pending by or against any of suchconstituent corporations may be prosecuted by or against the surviving or consolidatedcorporation, as the case may be. Neither the rights of creditors nor any lien upon theproperty of any of such constituent corporations shall be impaired by such merger orconsolidation. 17

xxx xxx xxx

In sum, the public respondent has not acted with grave abuse of discretion.

WHEREFORE, the petition is DISMISSED. No costs.

[G.R. No. 110226. June 19, 1997]


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ALBERTO S. SILVA, EDILBERTO VIRAY, ANGELES BARON,CEFERINO ROMERO, JAIME ACEVEDO, RODOLFO JUAN,ANDREW DE LA ISLA, BAYANI PILAR, ULDARICO GARCIA,ANANIAS HERMOCILLA, WALLY LEONES, PABLO ALULOD,RODOLFO MARIANO, HERNANI ABOROT, CARLITO CHOSAS,VALERIANO MAUBAN, RENAN HALILI, MANOLITO CUSTODIO,NONILON DAWAL, RICARDO ESCUETA, SEVERINO ROSETE,ERNESTO LITADA, ERNESTO BARENG, BONIFACIO URBANO,VICENTE SANTOS, MARIO CREDO, BERNABE GERONIMO,ERNESTO BANAY, PASTOR VELUZ, RICARDO CUEVAS,FELOMENO BALLON, ORLANDO MENDOZA, ANICETO ARBAN,GERONIMO ESPLANA, VICENTE CHAVEZ, STEVE VELECINA,and RICARDO B. VENTURA, pet i t ioners, vs. NATIONAL LABORRELATIONS COMMISSION and PHILTREAD (FIRESTONE) TIRE

AND RUBBER CORPORATION, respondents.

D E C I S I O N

ROMERO, J.:

Petitioners, all former employees of private respondent Philtread(Firestone) Tire and Rubber Corporation (Philtread, for brevity), impute graveabuse of discretion on the National Labor Relations Commission (NLRC)[1]forissuing two resolutions, dated April 7, 1993, and November 18, 1992, whichreconsidered a resolution it rendered on April 15, 1992. They allege that its

resolution of April 15, 1992 became final and executory when Philtread failedto seasonably file a motion for reconsideration within the ten-day reglementaryperiod required by Article 223 of the Labor Code.

The record unfolds the following facts:

Sometime in 1985, petitioners, then rank-and-file employees andmembers of Philtread Workers Union (PWU), volunteered for, and availed of,the retrenchment program instituted by Philtread with the understanding thatthey would have priority in re-employment in the event that the companyrecovers from its financial crisis, in accordance with Section 4, Article III of theCollective Bargaining Agreement concluded on July 5, 1983.[2]

In November 1986, Philtread, apparently having recovered from itsfinancial reverses, expanded its operations and hired new personnel. Upondiscovery of this development, petitioners filed their respective applications foremployment with Philtread, which however, merely agreed to consider themfor future vacancies. Subsequent demands for re-employment made by
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petitioners were ignored. Even the request of the incumbent union forPhiltread to stop hiring new personnel until petitioners were first hired failed toelicit any favorable response.

Thus, on December 5, 1988, petitioners lodged a complaint[3]with the

National Capital Region Arbitration Branch of the NLRC for unfair laborpractice (ULP), damages and attorneys fees against Philtread.

Both parties submitted their respective position papers. On its part,Philtread moved for the dismissal of the complaint based on two grounds,namely: (1) that the NLRC lacked jurisdiction, there being no employer-employee relationship between it and petitioners and that the basic issueinvolved was the interpretation of a contract, the CBA, which was cognizableby the regular courts; and (2) that petitioners had no locus standi, not beingprivy to the CBA executed between the union and Philtread.

Petitioners, however, challenging Philtreads motion to dismiss, stressedthat the complaint was one for unfair labor practice precipitated by the unjustand unreasonable refusal of Philtread to re-employ them, as mandated by theprovisions of Section 4, Article III of the 1986 and 1983 CBAs. Being one forunfair labor practice, petitioners concluded that the NLRC had jurisdiction overthe case, pursuant to Article 217 (a) (1) of the Labor Code.

On August 31, 1989, Labor Arbiter Edgardo M. Madriaga rendered adecision dismissing the complaint but directing Philtread to give petitionerspriority in hiring, as well as those former employees similarly situated foravailable positions provided they meet the necessary currentqualifications.[4]In dismissing the complaint, the Labor Arbiter, however, did nottackle the jurisdictional issue posed by Philtread in its position paper. Instead,he dwelt solely on the question whether the petitioners were entitled to priorityin re-employment on the basis of the CBA.

Petitioners duly appealed the decision of the Labor Arbiter to theNLRC. Philtread opted not to interpose an appeal despite the Labor Arbitersfailure to rule squarely on the question of jurisdiction.

On April 15, 1992, the NLRC issued a resolution reversing the decision of

the Labor Arbiter. It directed Philtread to re-employ petitioners and otheremployees similarly situated, regardless of age qualifications and other pre-employment conditions, subject only to existing vacancies and a finding ofgood physical condition. This resolution was received by Atty. Abraham B.Borreta of the law firm of Borreta, Gutierrez and Leogardo on May 5, 1992, asshown by the bailiffs return.
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Subsequently, Atty. Borreta filed with the NLRC on May 20, 1992, an exparte manifestation explaining that he was returning the copy of the resolutionrendered on April 15, 1992, which, according to him, was erroneously servedon him by the process server of the NLRC. He alleged that in the severalconciliation conferences held, it was Atty. Daniel C. Gutierrez who exclusively

handled the case on behalf of Philtread and informed the Labor Arbiter andpetitioners that the law firm of Borreta, Gutierrez and Leogardo had alreadybeen dissolved.

Being of the impression that the April 15, 1992 resolution of the NLRC hadbeen properly served at the address of the law firm of Atty. Gutierrez and thatno seasonable motion for reconsideration was ever filed by Philtread,petitioners moved for its execution.

On November 18, 1992, the NLRC, acting on a motion for reconsiderationfiled by Atty. Gutierrez, promulgated one of its challenged resolutionsdismissing the complaint of petitioners. It ruled that while petitioners hadstanding to sue, the complaint should have been filed with the voluntaryarbitrator, pursuant to Article 261 of the Labor Code, since the primary issuewas the implementation and interpretation of the CBA.

Dismayed by the NLRCs sudden change of position, petitionersimmediately moved for reconsideration. They pointed out that the NLRCsreliance on Article 261 of the Labor Code was patently erroneous because itwas the amended provision which was being cited by the NLRC. They addedthat the amendment of Article 261 introduced by Republic Act No. 6715 took

effect only on March 21, 1989, or after the filing of the complaint on December5, 1988. This being the case, petitioners argued that the subsequentamendment cannot retroactively divest the Labor Arbiter of the jurisdictionalready acquired in accordance with Articles 217 and 248 of the Labor Code.Petitioners further stressed that the resolution of April 15, 1992, had alreadybecome final and executory since Philtreads counsel of record did not file anymotion for reconsideration within the period of ten (10) days from receipt ofthe resolution on May 5, 1992.

The NLRC, however, was not convinced by petitioners assertions. In

another resolution issued on April 7, 1993, it affirmed its earlier resolutiondated November 18, 1992, ruling that even before the amendatory law tookeffect, matters involving bargaining agreements were already within theexclusive jurisdiction of the voluntary arbitrator, as set forth in Article 262 ofthe Labor Code. Hence, this petition.

As stated at the outset, petitioners fault the NLRC for issuing the assailedresolutions even when the resolution sought to be reconsidered had already


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attained finality upon Philtreads failure to timely move for itsreconsideration. They posit that since the bailiffs return indicated May 5,1992, as the date of receipt of the April 15, 1992 resolution by the law firm ofBorreta, Gutierrez and Leogardo, Philtreads counsel of record, then Philtreadonly had ten (10) calendar days or until May 15, 1992, within which to file a

motion for reconsideration. Since Philtread indisputably failed to file any suchmotion within said period, petitioners deemed it highly irregular andcapricious for the NLRC to still allow reconsideration of its April 15, 1992resolution.

The petition is impressed with merit.

Time and again, this Court has been emphatic in ruling that theseasonable filing of a motion for reconsideration within the 10-dayreglementary period following the receipt by a party of any order, resolution ordecision of the NLRC, is a mandatory requirement to forestall the finality ofsuch order, resolution or decision.[5]The statutory bases for this is found in

Article 223 of the Labor Code [6]and Section 14, Rule VII of the New Rules ofProcedure of the National Labor Relations Commission.[7]

In the case at bar, it is uncontroverted that Philtreads counsel filed amotion for reconsideration of the April 15, 1992 resolution only on June 5,1992,[8]or 31 days after receipt of said resolution.[9]It was thus incumbent uponthe NLRC to have dismissed outright Philtreads late motion forreconsideration. By doing exactly the opposite, its actuation was not onlywhimsical and capricious but also a demonstration of its utter disregard for its

very own rules. Certiorari, therefore, lies.

To be sure, it is settled doctrine that the NLRC, as an administrative andquasi-judicial body, is not bound by the rigid application of technical rules ofprocedure in the conduct of its proceedings.[10]However, the filing of a motionfor reconsideration and filing it ON TIME are not mere technicalities ofprocedure. These are jurisdictional and mandatory requirements which mustbe strictly complied with. Although there are exceptions to said rule, the caseat bar presents no peculiar circumstances warranting a departure therefrom.

The Court is aware of Philtreads obvious attempt to skirt the requirement

for seasonable filing of a motion for reconsideration by persuading us thatboth the Labor Arbiter and the NLRC have no jurisdiction over petitionerscomplaint. Jurisdiction, Philtread claims, lies instead with thevoluntary arbitrator so that when the Labor Arbiter and the NLRC tookcognizance of the case, their decisions thereon were null and void and,therefore, incapable of attaining finality. In short, Philtread maintains that the
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ten-day reglementary period could not have started running and, therefore, itsmotion could not be considered late.

The argument is not tenable. While we agree with the dictum that a voidjudgment cannot attain finality, said rule, however, is only relevant if the

tribunal or body which takes cognizance of a particular subject matter indeedlacks jurisdiction over the same. In this case, the rule adverted to ismisapplied for it is actually the Labor Arbiter and the NLRC which possess

jurisdiction over petitioners complaint and NOT the voluntary arbitrator, aserroneously contended by Philtread.

In this regard, we observe that there is a confusion in the minds of bothPhiltread and the NLRC with respect to the proper jurisdiction of the voluntaryarbitrator. They appear to share the view that once the question involved isan interpretation or implementation of CBA provisions, which in this case isthe re-employment clause, then the same necessarily falls within thecompetence of the voluntary arbitrator pursuant to Article 261 of the LaborCode.

Respondents posture is too simplistic and finds no support in law or injurisprudence. When the issue concerns an interpretation or implementationof the CBA, one cannot immediately jump to the conclusion that jurisdiction iswith the voluntary arbitrator. There is an equally important need to inquirefurther if the disputants involved are the union and the employer; otherwise,the voluntary arbitrator cannot assume jurisdiction. To this effect was theruling of the Court in Sanyo Philippines Workers Union - PSSLU v.

Canizares,[11]where we clarified the jurisdiction of the voluntary arbitrator in thismanner:

In the instant case, however, We hold that the Labor Arbiter and not the Grievance

Machinery provided for in the CBA has the jurisdiction to hear and decide the

complaints of the private respondents. While it appears that the dismissal of the

private respondents was made upon the recommendation of PSSLU pursuant to the

union security clause provided in the CBA, We are of the opinion that these facts do

not come within the phrase grievances arising from the interpretation or

implementation of (their) Collective Bargaining Agreement and those arising from

the interpretation or enforcement of company personnel policies, the jurisdiction ofwhich pertains to the Grievance Machinery or thereafter, to a voluntary arbitrator or

panel of voluntary arbitrators. Article 260 of the Labor Code on grievance machinery

and voluntary arbitratorstates that (t)he parties to a Collective Bargaining Agreement

shall include therein provisions that will ensure the mutual observance of its terms and

conditions. They shall establish a machinery for the adjustment and resolution of

grievances arising from the interpretation or implementation of their Collective
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Bargaining Agreement and those arising from the interpretation or enforcement of

company personnel policies. It is further provided in said article that the parties to a

CBA shall name or designate their respective representatives to the grievance

machinery and if the grievance is not settled in that level, it shall automatically be

referred to voluntary arbitrators (or panel of voluntary arbitrators) designated in

advance by the parties. It need not be mentioned that the parties to a CBA are theunion and the company. Hence, only disputes involving the union and the company

shall be referred to the grievance machinery or voluntary arbitrators. (Underscoring

supplied)

Since the contending parties in the instant case are not the union andPhiltread, then pursuant to the Sanyo doctrine, it is not the voluntary arbitratorwho can take cognizance of the complaint, notwithstanding Philtreads claimthat the real issue is the interpretation of the CBA provision on re-employment.

The Court, however, does not write finis to the discussion. A moreimportant question arises: If the voluntary arbitrator could not have assumed

jurisdiction over the case, did the Labor Arbiter and the NLRC validly acquirejurisdiction when both of them entertained the complaint?

A brief review of relevant statutory provisions is in order.

We note that at the time petitioners filed their complaint for unfair laborpractice, damages and attorneys fees on December 5, 1988, the governingprovision of the Labor Code with respect to the jurisdiction of the Labor Arbiter

and the NLRC was Article 217 which states:

ART. 217.Jurisdiction of Labor Arbiters and the Commission. (a) The

Labor Arbiters shall have the original and exclusive jurisdiction to hear and

decide within thirty (30) working days after submission of the case by the

parties for decision, the following cases involving all workers, whether

agricultural or non-agricultural:


2. Those that workers may file involving wages, hours of work and other terms andconditions of employment;

3. All money claims of workers, including those based on non-payment or

underpayment of wages, overtime compensation, separation pay and other benefits

provided by law or appropriate agreement, except claims for employees

compensation, social security, medicare and maternity benefits;


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4. Cases involving household services; and

5. Cases arising from any violation of Article 265 of this Code, including questions

involving the legality of strikes and lockouts.

(b) The Commission shall have exclusive appellate jurisdiction over all cases decidedby Labor Arbiters.

Articles 261 and 262, on the other hand, defined the jurisdiction of thevoluntary arbitrator, viz.:

ART. 261. Grievance machinery. - Whenever a grievance arises from the

interpretation or implementation of a collective agreement, including disciplinary

actions imposed on members of the bargaining unit, the employer and the bargaining

representative shall meet to adjust the grievance. Where there is no collective

agreement and in cases where the grievance procedure as provided herein does notapply, grievances shall be subject to negotiation, conciliation or arbitration as provided

elsewhere in this Code.

ART. 262. Voluntary arbitration. - All grievances referred to in the immediately

preceding Article which are not settled through the grievance procedure provided in

the collective agreement shall be referred to voluntary arbitration prescribed in said

agreement: Provided, That termination disputes shall be governed by Article 278 of

this Code, as amended, unless the parties agree to submit them to voluntary

arbitration.

Under the above provisions then prevailing, one can understand whypetitioners lodged their complaint for ULP with the Labor Arbiter. To theirmind, Philtreads refusal to re-employ them was tantamount to a violation ofthe re-employment clause in the 1983 CBA which was also substantiallyreproduced in the 1986 CBA. At the time, any violation of the CBA wasunqualifiedly treated as ULP of the employer falling within the competence ofthe Labor Arbiter to hear and decide. Thus:

ART. 248. Unfair labor practices of employers. - It shall be unlawful for an

employer to commit any of the following unfair labor practice:

x x x x xx x x x

(i) To violate a collective bargaining agreement.


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On March 21, 1989, however, Republic Act 6715,[12]or the so-calledHerrera-Veloso Amendments, took effect, amending several provisions ofthe Labor Code, including the respective jurisdictions of the Labor Arbiter, theNLRC and the voluntary arbitrator. As a result, the present jurisdiction of theLabor Arbiter and the NLRC is as follows:

ART. 217. Jurisdiction of Labor Arbiters and the Commission. - (a) Except as

otherwise provided under this Code the Labor Arbiters shall have original and

exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the

submission of the case by the parties for decision without extension, even in the

absence of stenographic notes, the following cases involving all workers, whether

agricultural or non-agricultural:


2. Termination disputes;

3. If accompanied with a claim for reinstatement, those cases thatworkers may file involving wages, rates of pay, hours of work and

other terms and conditions of employment;

4. Claims for actual, moral, exemplary and other forms of damages

arising from the employer-employee relations;

5. Cases arising from any violation of Article 264 of this Code,

including questions involving the legality of strikes and lockouts; and

6. Except claims for Employees Compensation, Social Security, Medicare and

maternity benefits, all other claims, arising from employer-employee

relations, including those of persons in domestic or household service,

involving an amount exceeding five thousand pesos (P5,000.00) regardless of

whether accompanied with a claim for reinstatement.

(b) The Commission shall have exclusive appellate jurisdiction

over all cases decided by Labor Arbiters.

(c) Cases arising from the interpretation 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.

while that of the voluntary arbitrator is defined in this wise:

ART. 261. Jurisdiction of Voluntary Arbitrators or panel of Voluntary Arbitrators. -

The Voluntary Arbitrator or panel of Voluntary Arbitrators shall have original and

exclusive jurisdiction to hear and decide all unresolved grievances arising from the


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interpretation or implementation of the Collective Bargaining Agreement and those

arising from the interpretation or enforcement of company personnel policies referred

to in the immediately preceding article. Accordingly, violations of a Collective

Bargaining Agreement, except those which are gross in character, shall no longer be

treated as unfair labor practice and shall be resolved as grievances under the Collective

Bargaining Agreement. For purposes of this article, gross violations of CollectiveBargaining Agreement shall mean flagrant and/or malicious refusal to comply with the

economic provisions of such agreement. x x x. (Underscoring supplied)

ART. 262. Jurisdiction over other labor disputes. - The Voluntary Arbitrator or panel

of Voluntary Arbitrators, upon agreement of the parties, shall also hear and decide all

other labor disputes including unfair labor practices and bargaining deadlocks.

With the amendments introduced by RA 6715, it can be gleaned that theLabor Arbiter still retains jurisdiction over ULP cases. There is, however, a

significant change: The unqualified jurisdiction conferred upon the LaborArbiter prior to the amendment by RA 6715 has been narrowed down so thatviolations of a Collective Bargaining Agreement, except those which aregross in character, shall no longer be treated as unfair labor practice but asgrievances under the Collective Bargaining Agreement. It is further statedthat gross violations of Collective Bargaining Agreement shall mean flagrantand/or malicious refusal to comply with the economic provisions of suchagreement. Hence, for a ULP case to be cognizable by the Labor Arbiter,and the NLRC to exercise its appellate jurisdiction, the allegations in thecomplaint should showprima facie the concurrence of two things, namely: (1)gross violation of the CBA; AND (2) the violation pertains to the economicprovisions of the CBA.

In several instances prior to the instant case, the Court already made itspronouncement that RA 6715 is in the nature of a curative statute. As such,we declared that it can be applied retroactively to pending cases. Thus,in Briad Agro Development Corporation v. Dela Cerna,[13]we held:

Republic Act No. 6715, like its predecessors, Executive Order No. 111 and Article

217, as amended, has retroactive application. Thus, when this new law divested

Regional Directors of the power to hear money claims, the divestment affectedpending litigations. It also affected this particular case. (Note that under par. 6,

where the claim does not exceed P5,000.00, regional directors have jurisdiction).

In Garcia v. Martinez, we categorically held that amendments relative to the

jurisdiction of labor arbiters (under Presidential Decree No. 1367, divesting the labor

arbiter of jurisdiction) partake of the nature of curative statutes, thus:


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It now appears that at the time this case was decided the lower court had jurisdiction

over Velascos complaint although at the time it was filed said court was not clothed

with such jurisdiction. The lack of jurisdiction was cured by the issuance of the

amendatory decree which is in the nature of a curative statute with retrospective

application to a pending proceeding, like Civil Case No. 9657 (See 82 C.J.S. 1004).

Garcia has since been uniformly applied in subsequent cases. Thus, in Calderon v.

Court of Appeals, reiterated that PD No. 1367 [is] curative and retrospective

in nature.

The Decision of this case, finally, acknowledged the retrospective characteristics of

Executive Order No. 111. x x x.

With the Briad ruling in place, the implication is that the qualifiedjurisdiction of the Labor Arbiter and the NLRC should have been applied

when the ULP complaint was still pending. This means that petitioners shouldhave been required to show in their complaint the gross nature of the CBAviolation, as well as the economic provision violated, without which thecomplaint would be dismissible. Herein lies the problem. The Courtsappreciation of petitioners cause of action is that, while it would make out acase for ULP, under present law, however, the same falls short of the specialrequirements necessary to make it cognizable by the Labor Arbiter and theNLRC. Unsubstantiated conclusions of bad faith and unjustified refusal tore-employ petitioners, to our mind, do not constitute gross violation of the CBAfor purposes of lodging jurisdiction with the Labor Arbiter and theNLRC. Although evidentiary matters are not required (and even discouraged)to be alleged in a complaint, still, sufficient details supporting the conclusionof bad faith and unjust refusal to re-employ petitioners must beindicated. Furthermore, it is even doubtful if the CBA provision on re-employment fits into the accepted notion of an economic provision of theCBA. Thus, given the foregoing considerations, may the Briad doctrine beapplied to the instant case and cause its dismissal for want of jurisdiction ofthe Labor Arbiter and the NLRC?

Upon a careful and meticulous study of Briad, the Court holds that the

rationale behind it does not apply to the present case. We adopt instead themore recent case of Erectors, Inc. v. National Labor RelationsCommission,[14]where we refused to give retroactive application to ExecutiveOrder No. 797 which created the Philippine Overseas Employment

Administration (POEA). Under said law, POEA was vested with original andexclusive jurisdiction over all cases, including money claims, involvingemployer-employee relations arising out of or by virtue of any law or contract


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involving Filipino workers for overseas employment,[15]which jurisdiction wasoriginally conferred upon the Labor Arbiter. As in the instant case, the Labor

Arbiters assumption of jurisdiction therein was likewise questioned in view ofthe subsequent enactment of E.O. 797. In ruling against the retroactiveapplication of the law, the Court explained its position as follows:

The rule is that jurisdiction over the subject matter is determined by the law in force

at the time of the commencement of the action. On March 31, 1982, at the time

private respondent filed his complaint against the petitioner, the prevailing laws were

Presidential Decree No. 1691 and Presidential Decree No. 1391 which vested the

Regional Offices of the Ministry of Labor and the Labor Arbiters with original and

exclusive jurisdiction over all cases involving employer-employee relations including

money claims arising out of any law or contracts involving Filipino workers for

overseas employment. At the time of the filing of the complaint, the Labor Arbiter

had clear jurisdiction over the same.

E.O. No. 797 did not divest the Labor Arbiters authority to hear and decide the case

filed by private respondent prior to its effectivity. Laws should only be applied

prospectively unless the legislative intent to give them retroactive effect is expressly

declared or is necessarily implied from the language used. We fail to perceive in the

language of E.O. No. 797 an intention to give it retroactive effect.

The case ofBriad Agro Development Corp. vs. Dela Cerna cited by the petitioner is

not applicable to the case at bar. InBriad, the Court applied the exception rather than

the general rule. In this case, Briad Agro Development Corp. and L.M. Camus

Engineering Corp. challenged the jurisdiction of the Regional Director of the

Department of Labor and Employment over cases involving workers money claims,

since Article 217 of the Labor Code, the law in force at the time of the filing of the

complaint, vested in the Labor Arbiters exclusive jurisdiction over such cases. The

Court dismissed the petition in its Decision dated June 29, 1989. It ruled that the

enactment of E.O. No. 111, amending Article 217 of the Labor Code, cured the

Regional Directors lack of jurisdiction by giving the Labor Arbiter and the Regional

Director concurrent jurisdiction over all cases involving money claims. However, on

November 9, 1989, the Court, in a Resolution, reconsidered and set aside its June 29

Decision and referred the case to the Labor Arbiter for proper proceedings, in view of

the promulgation of Republic Act (R.A.) 6715 which divested the Regional Directors

of the power to hear money claims. It bears emphasis that the Court accorded E.O.

No. 111 and R.A. 6715 a retroactive application because as curative statutes, they fall

under the exceptions to the rule on prospectivity of laws.

E.O. No. 111, amended Article 217 of the Labor Code to widen the workers access to

the government for redress of grievances by giving the Regional Directors and Labor


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Arbiters concurrent jurisdiction over cases involving money claims. This amendment,

however, created a situation where the jurisdiction of the Regional Directors and the

Labor Arbiters overlapped. As a remedy, R.A. 6715 further amended Article 217 by

delineating their respective jurisdictions. Under R.A. 6715, the Regional Director has

exclusive original jurisdiction over cases involving money claims provided: (1) the

claim is presented by an employer or person employed in domestic or householdservice, or househelper under the Code; (2) the claimant, no longer being employed,

does not seek reinstatement; and (3) the aggregate money claim of the employee or

househelper does not exceed P5,000.00. All other cases within the exclusive and

original jurisdiction of the Labor Arbiter. E.O. No. 111 and R.A. 6715 are therefore

curative statutes. A curative statute is enacted to cure defects in a prior law or to

validate legal proceedings, instruments or acts of public authorities which would

otherwise be void for want of conformity with certain existing legal requirements.

The law at bar, E.O. No. 797, is not a curative statute. x x x.

We do not find any reason why the Court should not apply the aboveruling to the case at bar, notwithstanding the fact that a different law isinvolved. Actually, this is not the first time that the Court refused to apply RA6715 retroactively.[16]Our previous decisions on whether to give it retroactiveapplication or not depended to a great extent on what amended provisionswere under consideration, as well as the factual circumstances to which theywere made to apply. In Briad, the underlying reason for applying RA 6715retroactively was the fact that prior to its amendment, Article 217 of the LaborCode, as amended by then Executive Order No. 111, created a scenario

where the Labor Arbiters and the Regional Directors of the Department ofLabor and Employment (DOLE) had overlapping jurisdiction over moneyclaims. This situation was viewed as a defect in the law so that when RA No.6715 was passed and delineated the jurisdiction of the Labor Arbiters andRegional Directors, the Court deemed it a rectification of such defect; hence,the conclusion that it was curative in nature and, therefore, must be appliedretroactively.

The same thing cannot be said of the case at bar. Like in Erectors, theinstant case presents no defect in the law requiring a remedy insofar as the

jurisdiction of the Labor Arbiter and the Voluntary Arbitrator isconcerned. There is here no overlapping of jurisdiction to speak of becausematters involving interpretation and implementation of CBA provisions, as wellas interpretation and enforcement of company personnel policies, havealways been determined by the Voluntary Arbitrator even prior to RA6715. Similarly, all ULP cases were exclusively within the jurisdiction of theLabor Arbiter. What RA 6715 merely did was to re-apportion the jurisdiction


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over ULP cases by conferring exclusive jurisdiction over such ULP cases thatdo not involve gross violation ofa CBAs economic provision upon thevoluntary arbitrator. We do not see anything in the act of re-apportioning

jurisdiction curative of any defect in the law as it stood prior to the enactmentof RA 6715. The Court view it as merely a matter of change in policy of the

lawmakers, especially since the 1987 Constitution adheres to the preferentialuse of voluntary modes of dispute settlement.[17]This, instead of the inherentdefect in the law, must be the rationale that prompted theamendment. Hence, we uphold the jurisdiction of the Labor Arbiter whichattached to this case at the time of its filing on December 5, 1988.

Finally, the contention that it was Atty. Gutierrez who exclusivelyrepresented Philtread and that the law firm of Borreta, Gutierrez and Leogardohad been dissolved, are lame excuses to cast doubt on the propriety ofservice to Atty. Borreta. It must be noted that the complaint of petitioners was

filed on December 5, 1988. Presumably, the preliminary conferencesadverted to by Atty. Borreta, where Atty. Gutierrez supposedly declared thathe was exclusively representing Philtread, transpired at around that date. TheCourt, however, is surprised to discover that the record bears a Noticeof Change of Address dated March 12, 1990, filed by Atty. Gutierrez,indicating therein that the counsel for respondent (Philtread) was Borreta,Gutierrez and Leogardo whose address could be found at the 3rd Floor,Commodore Condominium Arquiza corner M. Guerrero Streets, Ermita,Manila. If, indeed, Atty. Gutierrez declared during the Labor Arbitersproceedings that he was exclusively representing Philtread, why then did he

use the firms name, and its new address at that, in the aforementioned noticeto the NLRC? Moreover, why did Atty. Borreta take fifteen days to file hisManifestation and inform the NLRC of the improper service of the resolutionto him? Why did he not object immediately to the service by thebailiff? Considering that Atty. Gutierrez and Atty. Borreta were once partnersin their law firm, it behooves Atty. Borreta to have at least advised his formerpartner of the receipt of the resolution. As a lawyer, his receipt of the adverseresolution should have alerted him of the adverse consequences which mightfollow if the same were not acted upon promptly, as what in fact happenedhere. As for Atty. Gutierrez, if the law firm of Borreta, Gutierrez, and Leogardo

were really dissolved, it was incumbent upon him not to have used the firmsname in the first place, or he should have withdrawn the appearance of thefirm and entered his own appearance, in case the dissolution took placemidstream. By failing to exercise either option, Atty. Gutierrez cannot nowblame the NLRC for serving its resolution at the address of the firm still onrecord.[18]To our mind, these excuses cannot camouflage the clever ploy ofPhiltreads counsel to earn a last chance to move for reconsideration. This
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Court, it bears emphasizing, is not impressed, but looks incredulously at suchsuperficial moves.

WHEREFORE, the instant petition is hereby GRANTED. The assailedresolutions of the NLRC dated November 18, 1992, and April 7, 1993, are

SET ASIDE, while its resolution dated April 15, 1992, is REINSTATED forimmediate execution.

SO ORDERED.

Regalado, (Chairman), Puno, Mendoza, and Torres, Jr., JJ., concur.

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