LABOR STANDARDS REVIEWER:

PART ONE- INTRODUCTION/CONSTITUTION AND LABOR

I. GENERAL PRINCIPLES

A. LAW CLASSIFICATION:

1. Labor Standards

 Refers to that part of labor law which prescribes the minimum terms and conditions of employment which the employer is required to grant to its employees. Examples: Books One to Four of the Labor Code as well as Book VI thereof which deal with working conditions, wages, hours of work, holiday pay and other benefits, conditions of employment of women, minors, househelpers and homeworkers, medical and dental services, occupational health and safety, termination of employment and retirement

2. Labor Relations

 Refers to that part of labor law which regulates the relations between employers and workers. Example: Book V of the Labor Code which deals with labor organizations, collective bargaining, grievance machinery, voluntary arbitration, conciliation and mediation, unfair labor practices, strikes, picketing and lockout

3. Welfare Laws

The promotion of the welfare of all the people, the adoption by the government of measures calculated to insure economic stability of all the component elements of society thru the maintenance of proper economic and social equilibrium in the interrelations of the members of the community,

constitutionality, thru the adoption of measures legally justifiable or extra-constitutionality thru the exercise of powers underlying the existence of all governments, on the time honored principle of salus populi esta suprema lex..( The welfare, or the salvation, of the people is the supreme law)

B. Historical Perspective:

Cases:

1. Adkins Vs. Children’s Hospital (251 U.S 525)

Adkins v. Children's Hospital, 261 U.S. 525 (1923), is a United States Supreme Court opinion holding that federal minimum wage legislation for women was an unconstitutional infringement of liberty of contract, as protected by the due process clause of the Fifth Amendment.

Adkins was overturned in West Coast Hotel Co. v. Parrish, 300 U.S. 379 (1937). In the Adkins vs. CH case, the court found that upholding the statute would dangerously extend the police power of the state.

Background 

In 1918, Congress passed a law setting minimum wages for women and children in the District of Columbia. As in other cases, the question was one of balancing the police power of Congress to regulate health and safety with the right of individuals to conduct their own affairs without legislative interference. Children's Hospital and a female elevator operator at a hotel brought this case to prevent enforcement of the act by Jesse C. Adkins and the two other members of a wage board.

Judgment 

The Court opinion, by Justice Sutherland, held that previous decisions (Muller v. Oregon, 208 U.S. 412 (1908) and Bunting v. Oregon, 243 U.S. 426 (1917)) did not overrule the holding in Lochner v. New York, 198 U.S. 45 (1905), protecting freedom of contract. The Muller cases, Sutherland noted, addressed maximum hours; this case addressed a minimum wage. The maximum hour laws left the parties free to negotiate about wages, unlike this law. Moreover, the minimum wage artificially restricts the employer’s side of the negotiation. The Court argued that if legislatures were permitted to set minimum wage laws, they would be permitted to set maximum wage laws.

Sutherland's majority opinion also cites the changes that had occurred in the years since Muller, and in particular the passage of the Nineteenth Amendment, granting women the right to vote. He notes that Muller and other cases had emphasized differences between men and women as justifying special protection for women. But "[in] view of the great--not to say revolutionary--changes which have taken place since [Muller], in the contractual, political, and civil status of women, culminating in the Nineteenth Amendment, it is not unreasonable to say that these differences have now come almost, if not quite, to the vanishing point."

Chief Justice Taft, dissenting, argued that there was no distinction between minimum wage laws and maximum hour laws, considering that these essentially both add up to restrictions on the contract. He noted that Lochner’s limitations had appeared to be overruled in Muller and Bunting.

Justice Holmes, also dissenting, noted that there were plenty of other constraints on contract (e.g. blue laws, usury laws, etc.). He cited the reasonable person standard he had put forth in Lochner: if a reasonable person could see a power in the Constitution, the Court ought to defer to legislation using that power.

2. People Vs. Julio Pomar (G.R No. L-22008, November 3, 1924)

Facts:

The accused being the manager and person in charge of La Flor de la Isabela, a tobacco factory pertaining to La Campania General de Tabacos de Filipinas, a corporation duly authorized to transact business and the petitioner Macaria Fajardo, whom he granted vacation leave which began on the 16th day of July, 1923, by reason of her pregnancy, did then and there willfully, unlawfully, and feloniously fail and refuse to pay to said woman the sum of eighty pesos (P80), Philippine currency, to which she was entitled as her regular wages corresponding to thirty days before and thirty days after her delivery and confinement which took place on the 12th day of August, 1923, despite and over the demands made by her, the said Macaria Fajardo, upon said accused, to do so.

To said complaint, the defendant contended that the provisions of said Act No. 3071, upon which the complaint was based were illegal, unconstitutional and void.

The lower court, found the defendant guilty of the alleged offense described in the complaint, and sentenced him to pay a fine of P50, in accordance with the provisions of section 15 of said Act, to suffer subsidiary imprisonment in case of insolvency, and to pay the costs.

From that sentence the defendant appealed, and now makes the following assignments of error: That the court erred in overruling the demurrer; in

convicting him of the crime charged in the information; and in not declaring section 13 of Act No. 3071, unconstitutional.

Issue:

Whether or not the provisions of sections 13 and 15 of Act No. 3071 are a reasonable and lawful exercise of the police power of the state

Held:

Said section 13 was enacted by the Legislature of the Philippine Islands in the exercise of its supposed police power, with the praiseworthy purpose of safeguarding the health of pregnant women laborers in "factory, shop or place of labor of any description," and of insuring to them, to a certain extent, reasonable support for one month before and one month after their delivery.

The statute now under consideration is attacked upon the ground that it authorizes an unconstitutional interference with the freedom of contract including within the guarantees of the due process clause of the 5th Amendment. That the right to contract about one's affairs is a part of the liberty of the individual protected by this clause is settled by the decision of this court, and is no longer open to question. The law takes account of the necessities of only one party to the contract. It ignores the necessities of the employer by compelling him to pay not less than a certain sum, not only whether the employee is capable of earning it, but irrespective of the ability of his business to sustain the burden, generously leaving him, of course, the privilege of abandoning his business as an alternative for going on at a loss. Liberty includes not only the right to labor, but to refuse to labor, and, consequently, the right to contract to labor or for labor, and to terminate such contracts, and to refuse to make such contracts.. Hence, we are of the opinion that this Act contravenes those provisions of the state and Federal

constitutions, which guarantee that no person shall be deprived of life, liberty or property without due process of law.

Clearly, therefore, the law has deprived, every person, firm, or corporation owning or managing a factory, shop or place of labor of any description within the Philippine Islands, of his right to enter into contracts of employment upon such terms as he and the employee may agree upon. The law creates a term in every such contract, without the consent of the parties. Such persons are, therefore, deprived of their liberty to contract. The constitution of the Philippine Islands guarantees to every citizen his liberty and one of his liberties is the liberty to contract. It has been decided in a long line of decisions of the Supreme Court of the United States, that the right to contract about one's affairs is a part of the liberty of the individual, protected by the "due process of law" clause of the constitution. The rule in this jurisdiction is, that the contracting parties may establish any agreements, terms, and conditions they may deem advisable, provided they are not contrary to law, morals or public policy. (Art. 1255, Civil Code.)

For all of the foregoing reasons, we are fully persuaded, under the facts and the law, that the provisions of section 13, of Act No. 3071 of the Philippine Legislature, are unconstitutional and void, in that they violate and are contrary to the provisions of the first paragraph of section 3 of the Act of Congress of the United States of August 29, 1916. (Vol. 12, Public Laws, p. 238.)

3. West Coast Hotel Co. Vs. Parrish (300 U.S 379; 1937)

Fact- A women named Elsie Parrish, who was an employee for the West Coast Hotel Company, thought she was being paid unfairly for her work. So she brought a suit against the West Coast Hotel Company to recover the difference between what the wages paid her and the minimum wage fixed pursuant to the state law which was $14.50 per week of 48 hours.

The judicial history of the case is that there were lower state court hearings and they ruled the minimum wage statue unconstitutional. Adkins vs. Children's Hospital helped play a role in their decision in the lower state courts because the Supreme Court in 1923 ruled that a minimum wage law for women was unconstitutional. The West Coast Hotel then appealed to the Supreme Court after the lower courts ruled in Parrish's favor.

Issue- Is it constitutional to have fixed minimum wages for women? Does having a fixed minimum wage for women violate the due process clause of the 14th amendment which forbids a state to deprive any person of life, liberty or property?

Reasoning- (Mr. Justice Hughes) Hughes stated that the "Constitution speaks of liberty and prohibits the deprivation of liberty without due process of law. In prohibiting that deprivation, the Constitution does not recognize an absolute and uncontrollable liberty. Liberty in each of its phases has its history and connotation. Liberty under the Constitution is thus necessarily subject to the restraints of due process, and regulation which is reasonable in relation to its subject and is adopted in the interests of the community is due process" (449). The court ruled that the minimum wage law did not violate due process.

The State of Washington thinks that it is unlawful to employ women workers in any industry within the state where the wages are not adequate for their maintenance.

In a 5-to-4 decision, the Court held that the establishment of minimum wages for women was constitutionally legitimate. The Court noted that the Constitution did not speak of the freedom of contract and that liberty was subject to the restraints of due process. The Court also noted that

employers and employees were not equally "free" in negotiating contracts, since employees often were constrained by practical and economic realities. This was found to be especially true in the case of women. This case explicitly overruled the Court's decision in Adkins v. Children's Hospital (1923).

4. Philippine Association of Service Exporters Vs. Drilon (G.R No. 81958; June 30, 1988)

Facts:

The petitioner, Philippine Association of Service Exporters, Inc. (PASEI, for short), a firm "engaged principally in the recruitment of Filipino workers, male and female, for overseas placement," challenges the Constitutional validity of Department Order No. 1, Series of 1988, of the Department of Labor and Employment, in the character of "GUIDELINES GOVERNING THE TEMPORARY SUSPENSION OF DEPLOYMENT OF FILIPINO DOMESTIC AND HOUSEHOLD WORKERS," in this petition for certiorari and prohibition. Specifically, the measure is assailed for "discrimination against males or females;" that it "does not apply to all Filipino workers but only to domestic helpers and females with similar skills;" and that it is violative of the right to travel. It is held likewise to be an invalid exercise of the lawmaking power, police power being legislative, and not executive, in character.

On May 25, 1988, the Solicitor General, on behalf of the respondents Secretary of Labor and Administrator of the Philippine Overseas Employment Administration, filed a Comment informing the Court that on March 8, 1988, the respondent Labor Secretary lifted the deployment ban

in the states of Iraq, Jordan, Qatar, Canada, Hongkong, United States, Italy, Norway, Austria, and Switzerland. * In submitting the validity of the challenged "guidelines," the Solicitor General invokes the police power of the Philippine State.

Issue:

Whether or not the Department Order 1, series of 1988, of the Department of Labor and Employment valid.

Held:

"The police power of the State ... is a power coextensive with self- protection, and it is not inaptly termed the "law of overwhelming necessity." It may be said to be that inherent and plenary power in the State which enables it to prohibit all things hurtful to the comfort, safety, and welfare of society."

The consequence the deployment ban has on the right to travel does not impair the right. The right to travel is subject, among other things, to the requirements of "public safety," "as may be provided by law." Department Order No. 1 is a valid implementation of the Labor Code, in particular, its basic policy to "afford protection to labor," pursuant to the respondent Department of Labor's rule-making authority vested in it by the Labor Code. The petitioner assumes that it is unreasonable simply because of its impact on the right to travel, but as we have stated, the right itself is not absolute. The disputed Order is a valid qualification thereto.

Neither is there merit in the contention that Department Order No. 1 constitutes an invalid exercise of legislative power. It is true that police

power is the domain of the legislature, but it does not mean that such an authority may not be lawfully delegated. As we have mentioned, the Labor Code itself vests the Department of Labor and Employment with rulemaking powers in the enforcement whereof.

C. Constitutional Basis/Rights

1. Sections 9, 10, 13, 14 and 18, Article II of the 1987 Constitution

Section 9. The State shall promote a just and dynamic social order that will ensure the prosperity and independence of the nation and free the people from poverty through policies that provide adequate social services, promote full employment, a rising standard of living, and an improved quality of life for all.

Section 10. The State shall promote social justice in all phases of national development.

Section 13. The State recognizes the vital role of the youth in nation-building and shall promote and protect their physical, moral, spiritual, intellectual, and social well-being. It shall inculcate in the youth patriotism and nationalism, and encourage their involvement in public and civic affairs.

Section 14. The State recognizes the role of women in nation-building, and shall ensure the fundamental equality before the law of women and men.

Section 18. The State affirms labor as a primary social economic force. It shall protect the rights of workers and promote their welfare.

2. Sections 1 and 3, Article XIII of the 1987 Constitution

Section 1. The Congress shall give highest priority to the enactment of measures that protect and enhance the right of all the people to human dignity, reduce social, economic, and political inequalities, and remove cultural inequities by equitably diffusing wealth and political power for the common good.

To this end, the State shall regulate the acquisition, ownership, use, and disposition of property and its increments.

LABOR

Section 3. The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and equality of employment opportunities for all.

It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and peaceful concerted activities, including the

right to strike in accordance with law. They shall be entitled to security of tenure, humane conditions of work, and a living wage. They shall also participate in policy and decision-making processes affecting their rights and benefits as may be provided by law.

The State shall promote the principle of shared responsibility between workers and employers and the preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce their mutual compliance therewith to foster industrial peace.

The State shall regulate the relations between workers and employers, recognizing the right of labor to its just share in the fruits of production and the right of enterprises to reasonable returns to investments, and to expansion and growth.

CASES:

1. Sime Darby vs. NLRC (April 15, 1998)

FACTSSime Darby Pilipinas (the Company) declared and implemented a lockout against all the hourly employees of its tire factory on the ground of sabotage and work slowdown. This after failed negotiations with Sime Darby Employees Association (the Union) for the remaining two years of their CBA. The Union contested the lockout before the DOLE-NLRC. Subsequently the company decided to sell its tire manufacturing assets and close the business. As a result, all employees were terminated, including the petitioners. The company later found a buyer of its assets and business in Goodyear Philippines, Inc..

Petitioners filed a complaint for Illegal Dismissal before the DOLE and later a complaint for Unfair Labor Practice (ULP), both cases eventually consolidated. The labor arbiter ordered the parties to submit their respective memorandum but instead of doing this, the Union filed an Appeal Memorandum with a petition for injunction and/or a TRO before the NLRC. The labor arbiter later dismissed the case for lack of merit. It found the lockout valid and legal, and justified by the incidents of continued work slowdown, mass absences, and consistent low production output, high rate of waste and scrap tires and machine breakdown. It also considered the mass termination of all the employees valid as an authorized termination of employment due to closure of the establishment, the company having complied with due process.

Petitioners appealed the labor arbiter’s Decision to the NLRC which was also dismissed for lack of merit. It also ruled that that the labor arbiter could not have lost jurisdiction over the case when petitioners appealed the former’s order since the order was interlocutory in nature and cannot be appealed separately. In the Court of Appeals, the petition was similarly denied.

Petitioners reiterate that they were denied due process when they were dismissed right on the day they were handed down their termination letters, without the benefit of the thirty (30)-day notice as required by law, and invoke the Court’s ruling in Serrano v. NLRC; that the labor arbiter had lost jurisdiction over the issue when have already perfected their appeal to the NLRC; and that labor arbiter deprived petitioners of the chance to present their evidence during the formal trial.

ISSUES

1. Whether or not the labor arbiter has lost jurisdiction over the Union’s petition due to the appeal on the labor arbiter’s order that the Union filed before the NLRC?

2. Whether or not petitioners were deprived by the labor arbiter of the right to a presentation of evidence in a formal trial?

3. Whether or not petitioners were illegally dismissed due to lack of due process and also as a consequence of an illegal lockout?

HELD

Petition DENIED. Decision affirmed as the labor arbiter never lost its jurisdiction to decide on the case and has decided the case without grave abuse of discretion. The Court gives due credence to the factual findings of the labor arbiter and NLRC.

The order by the labor arbiter to the parties to submit their respective memorandum is in the nature of an interlocutory order. An interlocutory order is not appealable until after the rendition of the judgment on the merits for a contrary rule would delay the administration of justice and unduly burden the courts. Nor could the Court finds any grave abuse of discretion on the labor arbiter’s part. For one, the holding of an adversarial trial is discretionary on the labor arbiter and the parties cannot demand it as a matter of right. The New Rules of Procedure of the NLRC grants the labor arbiter wide latitude to determine, after the

submission by the parties of their position papers/memoranda, if there is need for a formal trial or hearing.

Petitioners’ argument that had the labor arbiter allowed respondents to present their evidence during the formal trial, the Decision would have been different, cannot be sustained. As previously stated, the labor arbiter enjoys wide discretion in determining whether there is a need for a formal hearing in a given case, and he or she may use all reasonable means to ascertain the facts of each case without regard to technicalities. When the parties submitted their position papers and other pertinent pleadings to the labor arbiter, it is understood / given /deemed that they have included therein all the pieces of evidence needed to establish their respective cases. A formal hearing is not compulsory in consonance with the need for speedy disposition of labor cases. If it were necessary, the parties may then willfully withhold their evidence and disclose the same only during the formal hearing, thus creating surprises which could merely complicate the issues and prolong the trial. There is a dire need to lessen technicalities in the process of settling labor disputes.Well-settled is the rule that hearings and resolutions of labor disputes are not governed by the strict and technical rules of evidence and procedure observed in the regular courts of law. Technical rules of procedure are not applicable in labor cases, but may apply only by analogy or in a suppletory character, for instance, when there is a need to attain substantial justice and an expeditious, practical and convenient solution to a labor problem.Petitioners claim that the alleged failure of the company to notify them of their termination renders their dismissal illegal, and thus they should be reinstated and paid with full backwages or given separation pay,

following the Court’s ruling in Serrano v. Court of Appeals. The argument does not hold. The ruling in Serrano has already been superseded by the case of Agabon v. National Labor Relation Commission. The Agabon enunciates the new doctrine that if the dismissal is for just cause but statutory due process was not observed, the dismissal should be upheld. While the procedural infirmity cannot be cured, it should not invalidate the dismissal. However, the employer should be held liable for non-compliance with the procedural requirements of due process.But in any case, the issue of illegal dismissal had already been resolved by the NLRC and the Court of Appeals, which both found that the company had an authorized cause and had complied with the requirements of due process when it dismissed petitioners.

2. Globe-Mackay Cable vs. NLRC (March 3 1992)3. Calalang vs. Williams (December 2, 1940)

Facts:

The National Traffic Commission, in its resolution of 17 July 1940, resolved to recommend to the Director of Public Works and to the Secretary of Public Works and Communications that animal-drawn vehicles be prohibited from passing along Rosario Street extending from Plaza Calderon de la Barca to Dasmariñas Street, from 7:30 a.m. to 12:30 p.m. and from 1:30 p.m. to 5:30 p.m.; and along Rizal Avenue extending from the railroad crossing at Antipolo Street to Echague Street, from 7 a.m. to 11 p.m., from a period of one year from the date of the opening of the Colgante Bridge to traffic.

The Chairman of the National Traffic Commission, on 18 July 1940, recommended to the Director of Public Works the adoption of the measure proposed in the resolution, in pursuance of the provisions of Commonwealth Act 548, which authorizes said Director of Public Works, with the approval of the Secretary of Public Works and Communications, to promulgate rules and regulations to regulate and control the use of and traffic on national roads. On 2 August 1940, the Director of Public Works, in his first indorsement to the Secretary of Public Works and Communications, recommended to the latter the approval of the recommendation made by the Chairman of the National Traffic Commission, with the modification that the closing of Rizal Avenue to traffic to animal-drawn vehicles be limited to the portion thereof extending from the railroad crossing at Antipolo Street to Azcarraga Street.

On 10 August 1940, the Secretary of Public Works and Communications, in his second indorsement addressed to the Director of Public Works, approved the recommendation of the latter that Rosario Street and Rizal Avenue be closed to traffic of animal-drawn vehicles, between the points and during the hours as indicated, for a period of 1 year from the date of the opening of the Colgante Bridge to traffic.

The Mayor of Manila and the Acting Chief of Police of Manila have enforced and caused to be enforced the rules and regulations thus adopted. Maximo Calalang, in his capacity as a private citizen and as a taxpayer of Manila, brought before the Supreme court the petition for a writ of prohibition against A. D. Williams, as Chairman of the National Traffic Commission; Vicente Fragante, as Director of Public Works; Sergio Bayan, as Acting Secretary of Public Works and Communications; Eulogio Rodriguez, as Mayor of the City of Manila; and Juan Dominguez, as Acting Chief of Police of Manila.

Issue:

Whether the rules and regulations promulgated by the Director of Public Works infringe upon the constitutional precept regarding the promotion of social justice to insure the well-being and economic security of all the people.

Held:

The promotion of social justice is to be achieved not through a mistaken sympathy towards any given group. Social justice is "neither communism, nor despotism, nor atomism, nor anarchy," but the humanization of laws and the equalization of social and economic forces by the State so that justice in its rational and objectively secular conception may at least be approximated. Social justice means the promotion of the welfare of all the people, the adoption by the Government of measures calculated to insure economic stability of all the competent elements of society, through the maintenance of a proper economic and social equilibrium in the interrelations of the members of the community, constitutionally, through the adoption of measures legally justifiable, or extra-constitutionally, through the exercise of powers underlying the existence of all governments on the time-honored principle of salus populi est suprema lex. Social justice, therefore, must be founded on the recognition of the necessity of interdependence among divers and diverse units of a society and of the protection that should be equally and evenly extended to all groups as a combined force in our social and economic life, consistent with the fundamental and paramount objective of the state of promoting the health, comfort, and quiet of all persons, and of bringing about "the greatest good to the greatest number."

Facts:In pursuance of Commonwealth Act 548 which mandates the Director of Public Works, with the approval of the Secretary of Public Works and Communications, shall promulgate the necessary rules and regulations to

regulate and control the use of and traffic on such roads and streets to promote safe transit upon, and avoid obstructions on, roads and streets designated as national roads, the Director of Public Works adopted the resolution of the National Traffic Commission, prohibiting the passing of animal drawn vehicles in certainstreets in Manila. Petitioner questioned this as it constitutes an undue delegation of legislative power.

Issues: Whether or not there is a undue delegation of legislative power?

Ruling:There is no undue delegation of legislative power. Commonwealth Act 548 does not confer legislative powers to the Director of Public Works. The authority conferred upon them and under which they promulgated the rules and regulations now complained of is not to determine what public policy demands but merely to carry out the legislative policy laid down by the National Assembly in said Act, to wit, “to promote safe transit upon and avoid obstructions on, roads and streets designated as national roads by acts of the National Assembly or by executive orders of the President of the Philippines” and to close them temporarily to any or all classes of traffic “whenever the condition of the road or the traffic makes such action necessary or advisable in the public convenience and interest.”

The delegated power, if at all, therefore, is not the determination of what the law shall be, but merely the ascertainment of the facts and circumstances upon which the application of said law is to be predicated.

To promulgate rules and regulations on the use of national roads and to

determine when and how long a national road should be closed to traffic, in view of the condition of the road or the traffic thereon and the requirements of public convenience and interest, is an administrative function which cannot be directly discharged by the National Assembly. It must depend on the discretion of some other government official to whom is confided the duty of determining whether the proper occasion exists for executing the law. But it cannot be said that the exercise of such discretion is the making of the law.

4. PLDT vs. Balbastro (March 28, 2007)

AUSTRIA-MARTINEZ, J.:Before us is a Petition for Review on Certiorari filed by Philippine Long Distance and Telephone Company, Inc. (petitioner) seeking to annul the Decision1 dated July 31, 2002 and the Resolution2 dated February 7, 2003 of the Court of Appeals (CA) in CA-G.R. SP No. 51060.

Amparo Balbastro (private respondent) was employed by petitioner in 1978 as its telephone operator until her questioned dismissal from employment on October 5, 1989. She was dismissed by petitioner for her absences without authorized leave due to unconfirmed sick leave on June 28 to July 14, 1989, which constituted her third offense3 punishable by dismissal under petitioner’s rules and regulations.4

On October 28, 1991, private respondent filed a Complaint5 with the Labor Arbiter against petitioner and its President, Antonio Cojuangco, for illegal dismissal, non-payment of salary wage, premium pay for rest day, 13th month pay, and damages. In her position paper, she alleged that she was dismissed on the ground of unconfirmed sick leave despite her presentation of medical certificates from her attending

physicians which were not considered by petitioner’s medical doctors; and that she has four minor children and it was not her intention to habitually absent herself without reason considering that her loss of job which was based only on opinions of petitioner’s doctors had caused her great deprivation and moral suffering. She prayed for reinstatement, backwages, and damages.

Petitioner filed its position paper with Motion to Dismiss6 alleging that private respondent’s habitual and unjustified absences was a just and valid cause for her termination under its rules and regulations; and that her record of unauthorized absences for 1989 showed the following:

First unauthorized absences, from March 19 to 29, 1989. Private respondent absented herself from work for nine days excluding rest days on March 23 to 24, 1989 without notice to petitioner. She gave marital problem as the reason for her absence. She was penalized with 18 days suspension for violating petitioner’s rules and regulations regarding absences.

Second unauthorized absences, from June 11 to 13, 1989. Private respondent called in sick from Tanauan, Batangas on June 5 that she was suffering from gastroenteritis. She absented herself from June 5 to 13, 1989. On June 14, 1989, she presented herself to petitioner’s doctor, Dr. Melissa Musngi and submitted a medical certificate where it was stated that she was under treatment from June 5 to 8, 1989 of gastroenteritis. Dr. Musngi confirmed private respondent’s sick leave from June 5 to 10, 1989 but did not confirm her absences from June 11 to 13, 1989 because her medical certificate covered only the period from June 5 to 8, 1989. Furthermore, petitioner reasons out that if she

really had such illness, certain normal logical medical procedures should have been taken, such as stool examinations and hospitalization; and she bore no post-illness manifestations of gastroenteritis. Private respondent’s unconfirmed leave of absence was considered by petitioner unauthorized due to her patent abuse of sick leave privileges and treated it as her second offense and was penalized with 15 days suspension.

Third unauthorized absences, from June 28 to July 14, 1989. On June 25, 1989, private respondent made a sick call that she had sore eyes and absented herself from June 25 to July 14, 1989. On July 3, 1989, she was outvisited at her given address in Makati but was not found home. On July 15, 1989, she reported for work and presented herself to the clinic for confirmation. She had her medical certificate issued by her attending physician showing that she had been under his professional treatment from June 25 to July 12, 1989 for systemic viral infection. Petitioner’s doctor, Dr. Benito Dungo, confirmed her sick leave from June 25 to 27, 1989 but did not confirm as to the rest of the dates when she was absent from work. When asked to explain, private respondent said that she had a viral infection during the said period; and that she was in Tanauan, Batangas during the said dates so she was not found in Makati when outvisited. Petitioner’s doctor did not confirm her leave of absence from June 28 to July 14, 1989 on the ground that such illness did not warrant a very long time of rest; certain laboratory examinations should have been conducted by her attending physician; and there was patent abuse of her sick leave privileges.

While private respondent’s third leave of absence was being deliberated upon, she absented herself from August 6 to 12, 1989. She

called in sick on August 6, 1989 informing her supervisor that she had a fever. The medical certificate issued by her attending physician showed that she was under treatment from August 7 to 10, 1989 for influenza. Petitioner’s doctor, Dr. Eduardo Co, confirmed private respondent’s leave of absence from August 6 to 8, 1989 but did not confirm the rest because her absences from August 9 to 12, 1989 were not covered by a medical certificate; her illness did not warrant prolonged absence; and it was medically impossible for her to contract the same illness which she contracted the previous month since it is a medical fact that there is no such thing as an immediately recurrent viral infection.

In view of her repeated absences without authorized leave for the third time, petitioner terminated private respondent’s service effective October 5, 1989.

The Labor Arbiter conducted a hearing where private respondent testified on her behalf, while petitioner presented the three medical doctors who did not confirm portions of private respondent’s leave of absence, and its Employee Relations and Service Department Manager.

On May 30, 1994, the Labor Arbiter issued its Decision,7 the dispositive portion of which reads:

WHEREFORE, all the foregoing premises being considered, judgment is hereby rendered ordering the respondent Philippine Long Distance [and] Telephone Co. to reinstate the complainant to her former position as telephone operator with all the rights, privileges and benefits

appertaining thereto, including seniority, plus backwages equivalent to one (1) year salary in the sum of P78,000.00 (P6,500.00/mo. x 12 mos.).

SO ORDRED.8

The Labor Arbiter held that private respondent’s first incident of absence from March 19 to 29, 1989 were unauthorized but not as to the other succeeding absences. It found that private respondent, on her first day of absence, called in sick and when she reported for work, she went to petitioner’s clinic for check-up and submitted her medical certificates, thus she complied with the standard requirements on matters of sick leave; that petitioner’s doctors did not confirm some portions of private respondent’s leave of absence based merely on their medical opinions; that such justification was not warranted under Department Order No. ADM-79-02 wherein absences due to illness were considered unauthorized and without pay when the attending doctor’s signature is forged, there is alteration as to the date and contents of the medical certificate, the certificate is false as to the facts alleged therein, the doctor issuing the medical certificate is not qualified to attend to the illness, there are falsities and misrepresentations, and when there is patent abuse of sick leave privileges; and that these circumstances were not proven in this case.

The Labor Arbiter gave more credence to the doctor who actually attended to private respondent rather than to the medical opinion of petitioner’s doctors. It concluded that petitioner’s doctors should have coordinated with private respondent’s attending physicians to settle any doubts as to the medical certificates.

Petitioner filed its appeal with the National Labor Relations Commission (NLRC).9 On January 19, 1996, the NLRC issued a

Resolution10 affirming the decision of the Labor Arbiter.

The NLRC found that company practice allows leave of absence due to sickness if supported by a medical certificate issued by the attending physician; that a difference in opinion by the Medical Director from that of the attending physician should not prejudice private respondent since the Medical Director can consider absences unauthorized only in cases of forgery and patent abuse of sick leave privileges which were not proven in this case; that if the Medical Director entertained doubts as to the medical certificate, he should have asked the attending physician to submit himself for cross-examination and then present an independent physician for an expert opinion on the matter.

Petitioner’s Motion for Reconsideration was denied in a Resolution11 dated March 14, 1996.

Undaunted, petitioner filed with us a Petition for Certiorari with prayer for the issuance of a Temporary Restraining Order (TRO). A TRO was issued to enjoin the enforcement of the NLRC Resolution until further orders.12

In a Resolution dated December 7, 1998,13 we referred the petition to

the CA in accordance with the St. Martin Funeral Home v. National Labor Relations Commission14 ruling.

On July 31, 2002, the CA issued its assailed Decision which dismissed the petition and affirmed the NLRC Decision. The CA held that as long as the medical certificate presented did not fall under any of the infirmities set forth in petitioner’s rules and regulations, the unconfirmed leave should be treated merely as absence without leave and was not subject to disciplinary action; that petitioner may not rely on the previous absences of respondents in 1978 and 1982 to show abuse of sick leave privileges because petitioner had acknowledged that respondent had already been penalized with suspension, and those absences were committed beyond the three-year period mentioned in their rules and regulations; that in its desire to clothe private respondent’s dismissal with a semblance of legality, petitioner points to private respondent’s fourth unauthorized leave of absence committed in August 1989 while the third unauthorized leave of absence was being deliberated upon; and that the notice of dismissal referred only to her third unauthorized leave, thus she could not be faulted for an infraction for which she was not charged.

Petitioner’s Motion for Reconsideration was denied in a Resolution dated February 7, 2003.

Hence, petitioner filed the instant Petition for Review on Certiorari alleging the following grounds:

I

WITH ALL DUE RESPECT, THE HONORABLE COURT FAILED TO CONSIDER THAT THE PETITION HEREIN DOES NOT MERELY

INQUIRE UPON THE RELATIVE WEIGHT OF THE EVIDENCE PRESENTED BY THE PARTIES, BUT IS ANCHORED ON MANIFESTLY ERRONEOUS CONCLUSIONS ON THE PART OF THE NLRC ARISING FROM GROSS MISAPPREHENSION OF THE FACTS OBTAINING IN THE CASE. AMONG OTHERS, IT WAS GRAVE ERROR TO CONCLUDE THAT THERE WAS NO PATENT ABUSE OF THE SICK LEAVE PRIVILEGE ON THE PART OF THE PRIVATE RESPONDENT BECAUSE THE MEDICAL CERTIFICATES SHE PRESENTED WERE NOT FALSE, FORGED, OR ALTERED TOTALLY DISREGARDING THE FACT THAT "ABUSE OF SICK LEAVE PRIVILEGE" IS A CAUSE SEPARATELY ENUMERATED UNDER THE RULES AS A GROUND FOR DISCIPLINARY ACTION.

II

WITH ALL DUE RESPECT, THE HONORABLE COURT FAILED TO CONSIDER THAT THE CONCLUSIONS OF THE NLRC ARE BEREFT OF ANY LEGAL OR FACTUAL BASES AS THERE WERE LEGALLY NO MEDICAL CERTIFICATES TO SPEAK OF, AND THE EXISTENCE THEREOF ARE PURE AND SIMPLE HEARSAY, HENCE COULD NOT BE VALIDLY RELIED UPON OR INVOKED BY THE PRIVATE RESPONDENT TO SUPPORT HER DEFENSE EVEN SUPPOSING TECHNICAL RULES ON EVIDENCE COULD BE RELAXED IN LABOR PROCEEDINGS. 15

Petitioner argues that the NLRC’s conclusions that private respondent had not committed a patent abuse of sick leave privileges and that her dismissal was illegal are utterly without any factual or legal basis; that the NLRC’s conclusion that the dismissal was illegal was merely

based: (1) on the evidence of private respondent; (2) on medical certificates which are clearly hearsay and of no probative value whatsoever; and (3) on medical certificates which, even supposing could be considered, simply failed to cover the period of the leave requested and set forth implausible diagnoses.

Petitioner claims that the CA as well as the NLRC failed to resolve the issue of whether or not the medical certificate should be given any credence at all; that it had presented four witnesses which included their three medical doctors who were subjected to cross-examinations, and yet credence was given to private respondent’s hearsay evidence consisting merely of a medical certificate by the latter’s attending physician who was not even presented to testify; that since the content of the medical certificate had been rebutted and refuted by petitioner’s witnesses, the burden of evidence is shifted to private respondent to show that the medical certificate she submitted was competent, proper, and sound which she failed to do.

Petitioner further claims that the CA erred in not finding that private respondent committed a patent abuse of sick leave privileges which does not arise solely from forgery or alteration of the medical certificate, but on the fact that an employee had frequently and incorrigibly absented herself and then applied for sick leave with absolute impunity armed with medical certificates which not only failed to cover the entire length of the leave but also with implausible diagnoses; that excluding private respondent’s unauthorized absences in 1989, she had accumulated 93 days of sick leave from January to July 1989 and 115 days of sick leave in 1988, thus, how can the conclusion be drawn that there was no patent abuse of sick leave

privileges; and that her unauthorized absence for which she was terminated all occurred in 1989, thus, the CA erred in saying that petitioner may not rely on the previous absences of respondent in 1978 and 1982 to justify private respondent’s dismissal.

We find the petition meritorious. Private respondent was validly dismissed by petitioner. It must be borne in mind that the basic principle in termination cases is that the burden of proof rests upon the employer to show that the dismissal is for just and valid cause and failure to do so would necessarily mean that the dismissal was not justified and, therefore, was illegal.16 For dismissal to be valid, the evidence must be substantial and not arbitrary and must be founded on clearly established facts.17 We find that petitioner had discharged this burden.

Under petitioner’s Department Order No. ADM-79-02, for the absence due to an alleged illness to be considered unauthorized, without pay, and subject to disciplinary action, it must be shown that the medical certificate is forged, altered as to the date and contents, false as to the facts stated therein, issued by a doctor not qualified to attend to the patient’s illness, and there is patent abuse of sick leave privileges. The penalty for three offenses of unauthorized absences committed within the three-year period is dismissal.

Private respondent’s unconfirmed absences from June 28 to July 14, 1989 is the crucial period in this particular case.

The Labor Arbiter and the NLRC found that private respondent was illegally dismissed by petitioner. Such finding was affirmed by the CA.

They all concluded that the medical certificate which private respondent presented did not fall under the circumstances enumerated in Department Order No. ADM-79-02, and there was no patent abuse of sick leave privileges, thus, there was no basis for petitioner’s doctors not to confirm her sick leave and consider the same unauthorized.

The jurisdiction of this Court in a petition for review on certiorari is limited to reviewing only errors of law, not of fact, unless the factual findings being assailed are not supported by evidence on record or the impugned judgment is based on a misapprehension of facts.18 We find that those exceptions are present in the instant case.

We find that petitioner had sufficiently established that private respondent committed a patent abuse of her sick leave privileges which is one of the grounds listed in Department Order No. ADM-79-02 for disciplinary action.

Private respondent was absent on June 25, 1989 and the reason given was sore eyes. She was then absent from June 25 to July 14, 1989. When she reported for work on July 15, 1989, she went to petitioner’s doctor, Dr. Benito Dungo, for confirmation of her leave of absence and presented a medical certificate19 from her attending physician, Dr. Manuel C. Damian of Tanauan Batangas, who certified that she had been under his professional care from June 25 to July 12, 1989 for systemic viral disease.

Dr. Dungo confirmed private respondent’s leave of absence from June 25 to 27, 1989 only and did not confirm her leave from June 28 to July 14, 1989 for the following reasons: (a) systemic viral disease indicated

in the medical certificate does not warrant such a very long time of rest and recuperation; (b) if she really had an infection, the logical recourse is for the attending physician to conduct a chest x-ray and blood examination to determine the cause of the prolonged fever, but such was not made; (c) if she was really ill for such a long time, she would have already been confined in a hospital for treatment as petitioner has standing agreements with various hospitals to provide immediate medical assistance free of charge; (d) she displayed no residue of symptoms of flu, thus casting doubt on the veracity of her claim; (e) she called in sick on June 25, 1989 that she was suffering from sore eyes but her medical certificate made no mention of such condition; and (f) her medical records reveal a pattern of abuse of sick leave privileges.20

Private respondent’s reason for her absence on June 25, 1989 was sore eyes, however the medical certificate that she presented for her prolonged absence from June 25 to July 14, 1989 was systemic viral disease and as correctly observed by Dr. Dungo, sore eyes was never mentioned therein.

Moreover, in the medical progress note21 of Dr. Damian dated October 10, 1989 attached to private respondent’s position paper submitted before the Labor Arbiter, it was shown that private respondent was seen by Dr. Damian on June 25, 1989 at 9:00 a.m. and her temperature was 40 degrees and she was complaining of severe headache and body pain. It would appear that there was a discrepancy between the reason given when she called in sick on June 25, 1989 and her complaints when she consulted Dr. Damian on the same day. In fact, when private respondent was asked on cross-

examination why sore eyes was never mentioned in her medical certificate, all that she could say was "the diagnosis was systemic viral disease, sama-sama na lahat".22

The medical certificate issued by Dr. Damian showed that private respondent was under his professional care from June 25 to July 12, 1989. However, the medical progress note dated October 10, 1989 of the same doctor showed that private respondent consulted him only on June 25, 27, and 29, 1989. It was never mentioned that Dr. Damian had seen private respondent after June 29, 1989. Thus, there was even a discrepancy between the medical certificate dated July 13, 1989 and the medical progress note as to the time frame that private respondent was seen by Dr. Damian. The medical certificate did not cover private respondent’s absences from July 13 to 14, 1989 and she only reported for work on July 15, 1989.

It bears stressing that from the time private respondent called in sick on June 25, 1989 due to sore eyes, she never called up petitioner again until she reported for work on July 15, 1989. She never went to petitioner’s doctors for them to verify her sickness.

Private respondent had committed the first two offenses of unauthorized absences in the same year. First, she did not report for work from March 19 to 29, 1989 without notice to petitioner, thus her absence was treated as unauthorized and considered her first offense for which she was penalized with suspension. Second, she again did not report for work from June 5 to 13, 1989 and when she reported for work and presented her medical certificate, it covered the period from June 5 to 8, 1989 only but she did not report for work until June 14,

1989. Petitioner’s doctor did not confirm her absences from June 11 to 13, 1989, thus, the same was considered unauthorized and her second offense for which she was penalized again with suspension. These two unauthorized absences together with her third unauthorized absences committed from June 28 to July 14, 1989 are sufficient bases for petitioner’s finding that private respondent patently abused her sick leave privileges.

Previous infractions may be used as justification for an employee’s dismissal from work in connection with a subsequent similar offense.23 Moreover, it is in petitioner’s rules and regulations that the same offense committed within the three-year period merits the penalty of dismissal. The CA’s finding that petitioner may not rely on the previous absences of private respondent in 1978 and 1982 to show abuse of sick leave privileges has no basis since private respondent was dismissed for committing her three unauthorized absences all in 1989.

It had also been established by Dr. Dungo’s testimony that private respondent’s medical record showed that she did not go to the clinic for consultation as she would only present a medical certificate and get a clearance for her sick leave;24 that the same medical record showed her absences in 1989 as follows: (1) From April 27 to May 4 due to urinary tract infection and she submitted a medical certificate;25 (2) From May 5 to 14 due to back pain;26 (3) From May 20 to 21 due to migraine;27 (4) June 5 to 13 due to gastroenteritis (penalized as her second offense); (5) June 15 to 24 due to conjunctivitis and submitted a medical certificate;28 and (6) June 25 to July 14, 1989 due to systemic viral disease with medical certificate (her third offense penalized with dismissal). Private respondent had incurred a total

absence of 85 days from January to October 1989;29 and 115 days in 1988.30 It had also been established that petitioner’s doctors confirmed most of her sick leave out of compassion31 and that her medical records showed that there were several warnings given her regarding her unconfirmed sick leave.32

As petitioner stated in its pleadings, it is a telecommunication service company which provides the country with various telecommunication services and facilities. Its operations are a vital part to many transactions all over the country and abroad, and private respondent was one of its telephone operators who used to connect all these calls. Thus, her patent abuse of her sick leave privileges is detrimental to petitioner’s business.

While it is true that compassion and human consideration should guide the disposition of cases involving termination of employment since it affects one's source or means of livelihood, it should not be overlooked that the benefits accorded to labor do not include compelling an employer to retain the services of an employee who has been shown to be a gross liability to the employer. The law in protecting the rights of the employees authorizes neither oppression nor self-destruction of the employer.33 It should be made clear that when the law tilts the scale of justice in favor of labor, it is but a recognition of the inherent economic inequality between labor and management. The intent is to balance the scale of justice; to put the two parties on relatively equal positions. There may be cases where the circumstances warrant favoring labor over the interests of management but never should the scale be so tilted if the result is an injustice to the employer. Justitia nemini neganda est (Justice is to be denied to none).34

WHEREFORE, the instant petition is GRANTED. The Decision dated July 31, 2002 and the Resolution dated February 7, 2003 of the Court of Appeals in CA-G.R. SP No. 51060 are hereby REVERSED and SET ASIDE. The complaint of Amparo Balbastro is DISMISSED.

5. Phil. Movie Workers Association vs. Premiere Productions, Inc (1953)

This is a petition for review of two orders of the Court of Industrial Relations, one dated November 8, 1951, and the other November 24, 1951, which give authority to respondent to lay-off forty-four (44) of its employees in accordance with its urgent petition on condition that, in the event work is available in the future where their ability may be required, the same workers should be reemployed and that, if after the termination of the case, the court would find that at the time of their lay off work was available, the respondent shall pay to them the back wages to which they are entitled. These two holders were upheld by the court en banc in a resolution dated March 10, 1952, which is also involved in the present petition for review.

On October 2, 1951, respondent filed with the Court of Industrial Relations an urgent petition seeking authority to lay-off 44 men working in three of its departments, the first batch to be laid off thirty (30) days after the filing of the petition and the rest 45 days thereafter, in order that in the intervening period it may finish the filming of its pending picture. The ground for the lay-off is the financial losses which respondent was allegedly suffering during the current year.

Petitioner opposed the request alleging that the claim of financial losses has no basis in fact it being only an act of retaliation on the part of respondent for the strike staged by the workers days before in an attempt to harass and intimidate them and weaken and destroy the union to which they belong.

On November 5, 1951, date when the urgent petition was set for hearing, at the request of counsel for respondent, Hon. Arsenio C. Roldan, presiding judge of the Court of Industrial Relations, held an ocular inspection of the studios and filming premises of respondent in the course of which he interrogated about fifteen laborers who were then present in the place. On the strength of the evidence adduced during the ocular inspection Judge Roldan issued an order on November 8, 1951, allowing respondent to lay-off the workers mentioned in its petition with respect to Unit No. 2 and those assigned to the Ground Maintenance Department subject to the condition that, in the event that work is available in the future, they should be re-employed. With respect to the workers assigned to Unit No. 1, the hearing was postponed.

A subsequent hearing was held in connection with the workers assigned to Unit. 1 and on the strength of the evidence submitted by respondent, Judge Roldan again found the petition justifiable and authorized their lay-off in an order dated November 24, 1951, under the same condition as those contained in his previous order.

Petitioner moved for the reconsideration of both orders dated November 8 and November 24, 1951, which motion the court en banc

denied in a resolution issued on March 10, 1952. Hence this petition for review.

The only issue submitted to this court for reconsideration is: May the Court of Industrial Relations authorize the lay off of workers on the basis of an ocular inspection without receiving full evidence to determine the cause or motive of such lay-off?

It appears that when the case was called for hearing to look in the merits of the urgent petition of respondent seeking to lay-off 44 men who were working in three of its departments on the ground of lack of work and because its business was suffering financial losses during the current year the court, which was then represented by its presiding Judge, decided to make an ocular inspection of the studios and filming premises of respondent following a request made to that effect by its counsel, and in the course of said inspection Judge Roldan proceeded to interrogate the workers he found in the place in the presence of the counsel of both parties. The testimony of those interrogated was taken down and the counsel of both parties were allowed to cross-examine them. Judge Roldan also proceeded to examine some of the records of respondent company among them the time cards of some workers which showed that while the workers reported for work, when their presence was checked they were found to be no longer in the premises. And on the strength of the findings made by judge Roldan in this ocular inspection he reached the conclusion that the petition for lay-off was justified because there was no more work for the laborers to do in connection with the different jobs given to them. It is now contended that such a procedure is unfair to the labor union in that it deprived the workers affected of the opportunity to disprove what

apparently was represented to the court during the ocular inspection which at best may only be the result of prearrangement devised by the company to justify its claim of lack of work and that what the court should have done was to make a full-dress investigation if not a formal hearing giving both parties all the time and opportunity to present their evidence before deciding such an important matter which affects the position and the only means of livelihood of the workers affected by the petition. In other words, the petitioning labor union workers were deprived of their employment without due process of law.

The claim of petitioner that the laborers were not given an opportunity to present their evidence to disprove the claim of lack of work is disputed by counsel for respondent company who claims that the labor union had its day in court because its counsel was present in the investigation or ocular inspection and even presented some witnesses to protect its interest. The record before the court on this matter is not clear and for such reason it has no way of determining the truth of both claims. The stenographic notes taken during the ocular inspection have not been elevated for the reason undoubtedly that this is a petition for review and the only issue before the court is one of law. In the face of this confusing situations on an issue which is determinative of the controversy, the only guide that the court finds is the order of the court of origin which happily contains a reference to the evidence that it has considered and which has served as basis for its conclusion resulting in lay-off of the workers in whose behalf the present petition was brought before this court. We refer to the order of November 8, 1951, subject of the petition for review, wherein Judge Roldan makes express mention of the evidence can only refer to testimony given by the workers interrogated by him and to whatever documents he found

or examined in the course of such inspection. It is true, as counsel for respondent avers, that hearing were conducted by the court a quo on October 8, and 15, 1951, and on November 5, 6, 15, and 21, 1951, but it is likewise true that those hearings do not necessarily refer to the petition under consideration but to other matters and incidents which were then before the court for determination such as the petition of the labor union containing fourteen (14) demands and the petition of the same union to declare respondent in contempt for having violated certain directives of the court. At any rate, this matter does not appear clear and we are inclined to resolve the doubt in favor of labor considering the spirit of our Constitution.

The right to labor is a constitutional as well as statutory right. Every man has a natural right to the fruits of his own industry. A man who has been employed to undertake certain labor and has put into it his time and effort is entitled to be protected. The right of a person to his labor is deemed to be property within the meaning of constitutional guarantees. That is his means of livelihood. He cannot be deprived of his labor or work without due process of law (11 Am. Jur., 333, pp. 1151-1153; 11 Am. Jur., section 344. pp. 1168-1171).

Although the Court of Industrial Relations, in the determination of any question or controversy, may adopt its own rules of procedure and may act according to justice and equity without regard to technicalities, and for that matter is not bound by any technical rules of evidence (section 20, Commonwealth Act No. 103), this broad grant of power should not be interpreted to mean that it can ignore or disregard the fundamental requirements of due process in the trials and investigation of cases brought before it for determination. As aptly pointed out by this court,

there are certain cardinal primary rights which the Court of Industrial Relations must respect in the trial of every labor case. One of them is the right to a hearing which includes the right of the party interested to present his own case and submit evidence in support thereof (Manila Trading and Supply Co. vs. Philippine Labor Union, 71 Phil., 124, 129). An ocular inspection of the establishment or premise involved is proper if the court finds it necessary, but such is authorized only to help the court in clearing a doubt, reaching a conclusion, or finding the truth. But it is not the main trial nor should it exclude the presentation of other evidence which the parties may deem necessary to establish their case. It is merely an auxiliary remedy the law affords the parties or the court to reach an enlightened determination of the case.

Considering the merits of the controversy before us, we are of the opinion that the required due process has not been followed. The court a quo merely acted on the strength of the ocular inspection it conducted in the premises of the respondent company. The petition for lay-off was predicated on the lack of work and of the further fact that the company was incurring financial losses. These allegations cannot be established by a mere inspection of the place of labor specially when such inspection was conducted at the request of the interested party. As counsel for petitioner says, such inspection could at best witness "the superficial fact of cessation of work but it could not be determinative of the larger and more fundamental issue of lack of work due to lack of funds". This fundamental issue cannot be determined without looking into the financial situation of the respondent company. In fact, this matter is now being looked into by the court a quo in connection with the fourteen demands of the labor union, but before finishing its inquiry it decided to grant the lay-off pending final

determination of the main case. This action is in our opinion premature and has worked injustice to the laborers.

WHEREFORE, the orders subject of the present petition for review are hereby set aside, and it is ordered that the cause be remanded to the court of origin for further proceedings giving to petitioner an opportunity to present its evidence in support of its opposition to the urgent petition for lay-off of respondent company. No pronouncement as to costs.

6. Maquiling vs. Phil. Tuberculosis Society (February 4, 2005)

Facts:Petitioner Dr. Maquiling was employed by respondent Philippine Tuberculosis Society, Inc. (PTS). Dr. Maquiling, then earning a monthly salary of thirteen thousand nine hundred pesos (P13,900.00) was dismissed from service as Deputy Executive Director after serving PTS for twenty-three (23)years on the ground of lost of trust and confidence constituted, among others, by: delayed GSIS remittances, reported deficit of P7.3 million appearing in the PTS’s financial statement. Dr. Maquiling filed a complaint against PTS for reinstatement or, in the alternative, for payment of full backwages and separation pay in accordance with Article 279 of the Labor Code, as well as moral damages in the amount of five hundred thousand pesos (P500,000.00) and exemplary damages in the amount of one hundred thousand pesos (P100,000.00). The complaint was assigned to a labor arbiter. After PTS failed to appear despite having requested for several postponements, Dr. Maquiling was allowed to present his evidenceex parte

consisting of his testimony on direct examination and documentary proof. Dr. Maquiling moved for submission of the case for resolution, which motion was granted. After considering the evidence adduced by the parties, the labor arbiter rendered a decision ordering PTS to immediately reinstate Dr. Maquiling to the position of Deputy Executive Director or its equivalent rank. Upon appeal by PTS to the NLRC, the Commission upheld the decision of the labor arbiter and dismissed the appeal. However, PTS appealed the decision to the Court of Appeals which reversed the decisions of the NLRC and labor arbiter by ordering the dismissal of the complaint and declaring that his dismissal from employment as legal and valid. It, however, ordered PTS to pay Dr. Maquiling the amount of ten thousand pesos (P10,000.00) as damages or indemnity for violation of his right to procedural due process.IssueGranting that there is lack of statutory due process, will the dismissal for a just cause render the same ineffectual? Is Dr. Maquiling entitled to damages resulting from a violation of his right to procedural due process? If yes, what kind of damages is allowed and not allowed?Held: Yes. Where the dismissal is for a just cause, as in the instant case, the lack of statutory due process should not nullify the dismissal, or render it illegal, or ineffectual. However, the employer should indemnify the employee for the violation of his statutory rights.The indemnity to be imposed should be stiffer to discourage the abhorrent practice of “dismiss now, pay later,” which we sought to deter in theSerrano ruling

. The sanction should be in the nature of indemnification or penalty and should depend on the facts of each case, taking into special consideration the gravity of the due process violation of the employer.The violation of the petitioner’s right to statutory due process by the private respondent warrants the payment of indemnity in the form of nominal damages.The amount of such damages is addressed to the sound discretion of the court, taking into account the relevant circumstances. It may be also argued that actual or compensatory damages may be recovered in employment termination cases.Actual or compensatory damages is not available as a matter of right to an employee dismissed for just cause but denied statutory due process.The award must be based on clear factual and legal bases and correspond to such pecuniary loss suffered by the employee as duly proven.Evidently, thereis a less degree of discretion to award actual or compensatorydamages.

7. Victoriano vs. Elizalde Rope Workers’ Union (59 SCRA 54)

Victoriano, an Iglesia ni Cristo member, has been an employee of the Elizalde Rope Factory since 1958. He was also a member of the EPWU. Under the CBA between ERF and EPWU, a close shop agreement is being enforced which means that employment in the factory relies on the membership in the EPWU; that in order to retain employment in the said factory one must be a member of the said Union. In 1962, Victoriano tendered his resignation from EPWU claiming that as per RA 3350 he is an exemption to the close shop

agreement by virtue of his being a member of the INC because apparently in the INC, one is forbidden from being a member of any labor union. It was only in 1974 that his resignation from the Union was acted upon by EPWU which notified ERF about it. ERF then moved to terminate Victoriano due to his non-membership from the EPWU. EPWU and ERF reiterated that he is not exempt from the close shop agreement because RA 3350 is unconstitutional and that said law violates the EPWU’s and ERF’s legal/contractual rights.

ISSUE: Whether or not RA 3350 is unconstitutional.HELD: The right to religion prevails over contractual or legal rights. As such, an INC member may refuse to join a labor union and despite the fact that there is a close shop agreement in the factory where he was employed, his employment could not be validly terminated for his non-membership in the majority therein. Further, the right to join a union includes the right not to join a union. The law is not unconstitutional. It recognizes both the rights of unions and employers to enforce terms of contracts and at the same time it recognizes the workers’ right to join or not to join union. But the RA recognizes as well the primacy of a constitutional right over a contractual right.

Facts: Plaintiff is a member of the Elizalde Rope Workers Union who later resigned from his affiliation to the said union by reason of the prohibition of his religion for its members to become affiliated with any labor organization. The union has subsisting closed shop agreement in their collective bargaining agreement with their employer that all permanent employees of the company must be a member of the union and later was amended by Republic Act No. 3350 with the provision stating "but such agreement shall not cover members of any religious

sects which prohibit affiliation of their members in any such labor organization".. By his resignation, the union wrote a letter to the company to separate the plaintiff from the service after which he was informed by the company that unless he makes a satisfactory arrangement with the union he will be dismissed from the service. The union contends that RA 3350 impairs obligation of contract stipulated in their CBA and discriminatorily favors religious sects in providing exemption to be affiliated with any labor unions.

Issue: WON RA 3350 impairs the right to form association.Held: The court held that what the Constitution and the Industrial Peace Act recognize and guarantee is the "right" to form or join associations which involves two broad notions, namely: first, liberty or freedom, i.e., the absence of legal restraint, whereby an employee may act for himself without being prevented by law; and second, power, whereby an employee may join or refrain from joining an association. Therefore the right to join a union includes the right to abstain from joining any union. The exceptions provided by the assailed Republic Act is that members of said religious sects cannot be compelled or coerced to join labor unions even when said unions have closed shop agreements with the employers; that in spite of any closed shop agreement, members of said religious sects cannot be refused employment or dismissed from their jobs on the sole ground that they are not members of the collective bargaining union. Thus this exception does not infringe upon the constitutional provision on freedom of association but instead reinforces it.

D. International Covenants and Labor and Welfare Laws

1. Universal Declaration of Human Rights (Articles 3, 7, 17, 22, 23, 24, 25)

Article 3.

Everyone has the right to life, liberty and security of person.

Article 7.

All are equal before the law and are entitled without any discrimination to equal protection of the law. All are entitled to equal protection against any discrimination in violation of this Declaration and against any incitement to such discrimination.

Article 17.

(1) Everyone has the right to own property alone as well as in association with others.

(2) No one shall be arbitrarily deprived of his property.

Article 22.

Everyone, as a member of society, has the right to social security and is entitled to realization, through national effort and international co-operation and in accordance with the organization and resources of each State, of the economic, social and cultural rights indispensable for his dignity and the free development of his personality.

Article 23.

(1) Everyone has the right to work, to free choice of employment, to just and favourable conditions of work and to protection against unemployment.

(2) Everyone, without any discrimination, has the right to equal pay for equal work.

(3) Everyone who works has the right to just and favourable remuneration ensuring for himself and his family an existence worthy of human dignity, and supplemented, if necessary, by other means of social protection.

(4) Everyone has the right to form and to join trade unions for the protection of his interests.

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Article 24.

Everyone has the right to rest and leisure, including reasonable limitation of working hours and periodic holidays with pay.

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Article 25.

(1) Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.

(2) Motherhood and childhood are entitled to special care and assistance. All children, whether born in or out of wedlock, shall enjoy the same social protection.

2. International Covenant on Economic, Social and Cultural Rights (Part III, Articles 6, 7, 9, 11)

Article 6

1. The States Parties to the present Covenant recognize the right to work, which includes the right of everyone to the opportunity to gain his living

by work which he freely chooses or accepts, and will take appropriate steps to safeguard this right.

2. The Steps to be taken by a State Party to the present Covenant to achieve the full realization of this right shall include technical and vocational guidance and training programmes, policies and techniques to achieve steady economic, social and cultural development and full and productive employment under conditions safeguarding fundamental political and economic freedoms to the individual.

Article 7The States to the present Covenant recognize the right of everyone to the enjoyment of just and favourable conditions of work which ensure, in particular:

1. Remuneration which provides all workers, as a minimum, with:1. Fair wages and equal remuneration for work of equal value

without distinction of any kind, in particular women being guaranteed conditions of work not inferior to those enjoyed by men, with equal pay for equal work;

2. A decent living for themselves and their families in accordance with the provisions of the present Covenant;

2. Safe and healthy working conditions;3. Equal opportunity for everyone to be promoted in his employment to an

appropriate higher level, subject to no considerations other than those of seniority and competence;

4. Rest, leisure and reasonable limitation of working hours and periodic holidays with pay, as well as remuneration for public holidays.

Article 9The States Parties to the present Covenant recognize the right of everyone to social security, including social insurance.

Article 11

1. The States Parties to present Covenant recognize the right of everyone to an adequate standard of living for himself and his family, including adequate food, clothing and housing, and to the continuous improvement of living conditions. The States Parties will take appropriate steps to ensure the international co-operation based on free consent.

2. The States Parties to present Covenant, recognizing the fundamental right of everyone to be free from hunger, shall take, individually and through international co-operation, the measures, including specific programmes, which are needed:

1. To improve methods of production, conservation and distribution of food by making full use of technical and scientific knowledge, by disseminating knowledge of the principles of nutrition and by developing or reforming agrarian systems in such a way as to achieve the most efficient development and utilization of natural resources;

2. Taking into account the problems of both food-importing and food-exporting countries, to ensure an equitable distribution of world food supplies in relation to need.

3. Relevant conventions and recommendations of the International Labor Organization (ILO)

ConventionsMain article: List of International Labour Organization Conventions

Through July 2011, the ILO has adopted 189 conventions. If these conventions are ratified by enough governments, they become in force.

However, ILO conventions are considered international labor standards regardless of ratifications. When a convention comes into force, it creates a legal obligation for ratifying nations to apply its provisions.

Every year the International Labour Conference's Committee on the Application of Standards examines a number of alleged breaches of international labour standards. Governments are required to submit reports detailing their compliance with the obligations of the conventions they have ratified. Conventions that have not been ratified by member states have the same legal force as do recommendations.

In 1998, the 86th International Labour Conference adopted the Declaration on Fundamental Principles and Rights at Work. This declaration contains four fundamental policies:

1. The right of workers to associate freely and bargain collectively;2. The end of forced and compulsory labour;3. The end of child labour; and4. The end of unfair discrimination among workers.

The ILO asserts that its members have an obligation to work towards fully respecting these principles, embodied in relevant ILO Conventions. The ILO Conventions which embody the fundamental principles have now been ratified by most member states.

RecommendationsRecommendations do not have the binding force of conventions and are not subject to ratification. Recommendations may be adopted at the same time as conventions to supplement the latter with additional or more detailed provisions. In other cases recommendations may be adopted separately and may address issues separate from particular conventions.

Cases:

1.International School Alliance of Educators vs. Quisumbing

Facts: Receiving salaries less than their counterparts hired abroad, the local-hires of private respondent School, mostly Filipinos, cry discrimination. We agree. That the local-hires are paid more than their colleagues in other schools is, of course, beside the point. The point is that employees should be given equal pay for work of equal value.

Private respondent International School, Inc. (the School, for short), pursuant to Presidential Decree 732, is a domestic educational institution established primarily for dependents of foreign diplomatic personnel and other temporary residents. To enable the School to continue carrying out its educational program and improve its standard of instruction, Section 2(c) of the same decree authorizes the School to employ its own teaching and management personnel selected by it either locally or abroad, from Philippine or other nationalities, such personnel being exempt from otherwise applicable laws and regulations attending their employment, except laws that have been or will be enacted for the protection of employees.

Accordingly, the School hires both foreign and local teachers as members of its faculty, classifying the same into two: (1) foreign-hires and (2) local-hires. 

The School grants foreign-hires certain benefits not accorded local-hires. These include housing, transportation, shipping costs, taxes, and home leave travel allowance. Foreign-hires are also paid a salary rate twenty-five percent (25%) more than local-hires. The School justifies the difference on two "significant economic disadvantages" foreign-hires have to endure, namely: (a)

the "dislocation factor" and (b) limited tenure.

Issue: Whether or Not the grants provided by the school to foreign hires and not to local hires discriminative of their constitutional right to the equal protection clause.

Held: The foregoing provisions impregnably institutionalize in this jurisdiction the long honored legal truism of "equal pay for equal work." Persons who work with substantially equal qualifications, skill, effort and responsibility, under similar conditions, should be paid similar salaries. This rule applies to the School, its "international character" notwithstanding.

The School contends that petitioner has not adduced evidence that local-hires perform work equal to that of foreign-hires. The Court finds this argument a little cavalier. If an employer accords employees the same position and rank, the presumption is that these employees perform equal work. This presumption is borne by logic and human experience. If the employer pays one employee less than the rest, it is not for that employee to explain why he receives less or why the others receive more. That would be adding insult to injury. The employer has discriminated against that employee; it is for the employer to explain why the employee is treated unfairly.

While we recognize the need of the School to attract foreign-hires, salaries should not be used as an enticement to the prejudice of local-hires. The local-hires perform the same services as foreign-hires and they ought to be paid the same salaries as the latter. For

the same reason, the "dislocation factor" and the foreign-hires' limited tenure also cannot serve as valid bases for the distinction in salary rates. 

The Constitution enjoins the State to "protect the rights of workers and promote their welfare," "to afford labor full protection." The State, therefore, has the right and duty to regulate the relations between labor and capital. These relations are not merely contractual but are so impressed with public interest that labor contracts, collective bargaining agreements included, must yield to the common good. Should such contracts contain stipulations that are contrary to public policy, courts will not hesitate to strike down these stipulations.

In this case, we find the point-of-hire classification employed by respondent School to justify the distinction in the salary rates of foreign-hires and local hires to be an invalid classification. There is no reasonable distinction between the services rendered by foreign-hires and local-hires. 

Wherefore, the petition is given due course. The petition is hereby granted in part. The orders of the secretary of labor and employment dated June 10, 1996 and march 19, 1997, are hereby reversed and set aside insofar as they uphold the practice of respondent school of according foreign-hires higher salaries than local-hires.

3. Standard Chartered Bank Employees’ Union vs. Confesor

Confidential Employees – Exclusion as Appropriate Bargaining Unit

The 1998-2000 Collective Bargaining Agreement between the Standard Chartered Bank employees Union and the Standard Chartered Bank expired so the parties tried to renew it but then a

deadlock ensued. Under the old CBA, the following are excluded as appropriate bargaining unit:

A. All covenanted and assistant officers (now called National Officers)

B. One confidential secretary of each of the:

1. Chief Executive, Philippine Branches

2. Deputy Chief Executive/Head, Corporate Banking Group

3. Head, Finance

4. Head, Human Resources

5. Manager, Cebu

6. Manager, Iloilo

7. Covenanted Officers provided said positions shall be filled by new recruits.

C. The Chief Cashiers and Assistant Cashiers in Manila, Cebu and Iloilo, and in any other branch that the BANK may establish in the country.

D. Personnel of the Telex Department

E. All Security Guards

F. Probationary employees, without prejudice to Article 277 (c) of the Labor Code, as amended by R.A. 6715, casuals or emergency employees; and

G. One (1) HR Staff

But then in the renewal sought by SCBEU-NUBE, they only wanted the exclusion to apply only to the following employees from the appropriate bargaining unit – all managers who are vested with the right to hire and fire employees, confidential employees, those with access to labor relations materials, Chief Cashiers, Assistant Cashiers, personnel of the Telex Department and one Human Resources (HR) staff.

SCBEU-NUBE also averred that employees assigned in an acting capacity for at least a week should be given salary raise.

A notice of strike was given to the Department of Labor due to this deadlock. Then DOLE Secretary Patricia Sto. Tomas issued an order dismissing the Union’s plea.

ISSUE: Whether or not the confidential employees sought to be removed from the exclusion as appropriate bargaining unit by SCBEU-NUBE holds ground.

HELD: No. Whether or not the employees sought to be excluded from the appropriate bargaining unit are confidential employees is a question of fact, which is not a proper issue in a petition for review

under Rule 45 of the Rules of Court. SCBEU-NUBE insists that the foregoing employees are not confidential employees; however, it failed to buttress its claim. Aside from its generalized arguments, and despite the Secretary’s finding that there was no evidence to support it, SCBEU-NUBE still failed to substantiate its claim. SCBEU-NUBE did not even bother to state the nature of the duties and functions of these employees, depriving the Court of any basis on which it may be concluded that they are indeed confidential employees.

With regard to the salary increase of employees in acting capacities, the Supreme Court agreed with the Court of Appeals that a restrictive provision would curtail management’s prerogative, and at the same time, recognized that employees should not be made to work in an acting capacity for long periods of time without adequate compensation. The usual rule that “employees in acting capacities for at least a month should be given salary raise” is upheld.