China Banking Corporation v. BorromeoG.R. No. 156515, 19 October 2004, SECOND DIVISION (Callejo, Sr., J.)

Mariano M. Borromeo, respondent and employee of China Banking Corporation (CBC),petitioner, rose up the ranks from Manager Level I with a position of manager to Senior Manager Level IIwith a position of Assistant Vice-President, having experienced a total of four promotions in seven years.Prior to his last promotion and then unknown to CBC, Borromeo, without authority from the ExecutiveCommittee or the Board of Directors, approved several checks "Drawn Against UncollectedDeposits/Bills Purchased" (DAUD/BP) amounting to Php 2,441,375 in favor of Joel Maniwan.DAUD/BP are checks which are not sufficiently funded by cash and are generally not honored by banks;the grant of such checks must be accompanied by express authority from CBC's Executive Committee orBoard of Directors, pursuant to the bank's standard operating procedure. Upon knowledge of the bank ofthe unauthorized DAUD/BP accommodations, a letter was immediately sent to Borromeo for clarificationpurposes to which Borromeo answered his readiness to face the consequences of his actions. Thereafter,Borromeo tendered his resignation from CBC. Subsequently, in a Memorandum issued by CBC, Borromeowas directed to restitute 90% of the amount representing the losses suffered by CBC, however, in view ofBorromeo's resignation, CBC earmarked a portion of Borromeo's separation benefits or pay, to bewithheld until CBC has satisfied its claims from the civil action instituted against Maniwan (restitution).

Consequently, Borromeo filed a complaint before the National Labor Relations Commission(NLRC) for payment of separation pay, mid-year bonus, profit share and damages against CBC. The LaborArbiter promulgated the Decision dismissing Borromeo's complaint. On appeal, the NLRC dismissed theappeal and affirmed the findings of the Labor Arbiter. Borromeo's reconsideration was likewise denied.Upon a petition for certiorari before the CA, the latter rendered a decision setting aside the NLRC'sdecision and ordering the remand of the records of the case to the Labor Arbiter for further hearings.

ISSUES:

1. Whether or not the CA erred in remanding the case to the Labor Arbiter2. Whether or not restitution may be properly imposed on Borromeo3. Whether or not Borromeo's right to due process was violated by CBC

HELD:

It is settled that administrative bodies like the NLRC, including the Labor Arbiter, are not boundby the technical niceties of the law and procedure and the rules obtaining in courts of law. Rules of evidenceare not strictly observed in proceedings before administrative bodies like the NLRC, where decisions maybe reached on the basis of position papers. The holding of a formal hearing or trial is discretionary withthe Labor Arbiter and is something that the parties cannot demand as a matter of right. As a corollary,trial-type hearings are not even required as the cases may be decided based on verified position papers,with supporting documents and their affidavits. Hence, the Labor Arbiter acted well within his authoritywhen he issued the Order dated February 26, 1999 submitting the case for resolution upon finding that hecould judiciously pass on the merits without the necessity of further hearing.

On the other hand, the assailed CA decision’s directive requiring him to conduct further hearingsconstitutes undue interference with the Labor Arbiter’s discretion. Moreover, to require the conduct ofhearings would be to negate the rationale and purpose of the summary nature of the proceedings mandatedby the Rules and to make mandatory the application of the technical rules of evidence.

The appellate court, therefore, committed reversible error in ordering the remand of the case tothe Labor Arbiter for further hearings.

In this case, the factual findings of the Labor Arbiter and those of the NLRC concur on thefollowing material points: the respondent was a responsible officer of the petitioner Bank; by his ownadmission, he granted DAUD/BP accommodations in excess of the authority given to him and in violationof the bank’s standard operating procedures; the petitioner Bank’s Code of Ethics provides thatrestitution/forfeiture of benefits may be imposed on the employees for, inter alia, infraction of the bank’sstandard operating procedures; and, the respondent resigned from the petitioner Bank on May 31, 1998.These factual findings are amply supported by the evidence on record.

It is well recognized that company policies and regulations are, unless shown to be grosslyoppressive or contrary to law, generally binding and valid on the parties and must be complied with untilfinally revised or amended unilaterally or preferably through negotiation or by competent authority.Moreover, management has the prerogative to discipline its employees and to impose appropriate penaltieson erring workers pursuant to company rules and regulations. With more reason should these truismsapply to the respondent, who, by reason of his position, was required to act judiciously and to exercise hisauthority in harmony with company policies.

Contrary to the respondent’s contention that the petitioner Bank could not properly impose theaccessory penalty of restitution on him without imposing the principal penalty of "WrittenReprimand/Suspension," the latter’s Code of Ethics expressly sanctions the imposition ofrestitution/forfeiture of benefits apart from or independent of the other penalties. Obviously, in view ofhis voluntary separation from the petitioner Bank, the imposition of the penalty of reprimand orsuspension would be futile. The petitioner Bank was left with no other recourse but to impose the ancillarypenalty of restitution. It was certainly within the petitioner Bank’s prerogative to impose on the respondentwhat it considered the appropriate penalty under the circumstances pursuant to its company rules andregulations.

Anent the issue that the respondent’s right to due process was violated by the petitioner Banksince no administrative investigation was conducted prior to the withholding of his separation benefits,the Court rules that, under the circumstances obtaining in this case, no formal administrative investigationwas necessary. Due process simply demands an opportunity to be heard and this opportunity was notdenied the respondent.

It bears stressing that the respondent was not just a rank and file employee. At the time of hisresignation, he was the Assistant Vice- President, Branch Banking Group for the Mindanao area of thepetitioner Bank. His position the Assistant Vice- President, Branch Banking Group for the Mindanao areaof the petitioner Bank. His position carried authority for the exercise of independent judgment anddiscretion, characteristic of sensitive posts in corporate hierarchy. As such, he was, as earlier intimated,required to act judiciously and to exercise his authority in harmony with company policies.

On the other hand, the petitioner Bank’s business is essentially imbued with public interest andowes great fidelity to the public it deals with. It is expected to exercise the highest degree of diligence inthe selection and supervision of their employees. As a corollary, and like all other business enterprises, itsprerogative to discipline its employees and to impose appropriate penalties on erring workers pursuant tocompany rules and regulations must be respected. The law, in protecting the rights of labor, authorizedneither oppression nor self-destruction of an employer company which itself is possessed of rights thatmust be entitled to recognition and respect.

Maternity Children's Hospital v. Secretary of LaborG.R. No. 78909, 30 June 1989, EN BANC (Medialdea, J.)

10 employees of the Maternity Children's Hospital (MCH), petitioner, employed in differentcapacities/positions filed a complaint with the Office of the Regional Director of Labor and Employmentfor underpayment of their salaries and emergency cost of living allowances (ECOLAS). TheRegional Director, thereafter, took steps to ascertain the truth of the allegations in the complaints.Subsequently, the Labor Standard and Welfare Officers submitted their report confirming that there wasunderpayment of wages and ECOLAs of all the employees by the MCH. Based on the aforementionedreport, the Regional Director issued an Order directing the payment of Php 723,888.58, representing theclaims, to all the MCH's employees.

MCH appealed the order above to the Minister of Labor and Employment on the ground that theRegional Director lacked jurisdiction to issue the Order. It is contended that the adjudication of moneyclaims is an exclusive function of the Labor Arbiter. Thus, a Decision was rendered modifying the saidOrder in that deficiency wages and ECOLAs should by computed only from 1893 to 1896. Dissatisfied,MCH filed a motion for reconsideration which was denied by the Secretary of Labor in an Order.

ISSUE:

Whether or not the Regional Director had jurisdiction over the case and if so, the extent ofcoverage of any award that should by forthcoming, arising from his visitorial and enforcement powersunder Article 128 of the Labor Code

HELD:

This is a labor standards case, and is governed by Art. 128-b of the Labor Code, as amended byE.O. No. 111. Labor standards refer to the minimum requirements prescribed by existing laws, rules, andregulations relating to wages, hours of work, cost of living allowance and other monetary and welfarebenefits, including occupational, safety, and health standards (Section 7, Rule I, Rules on the Dispositionof Labor Standards Cases in the Regional Office, dated September 16, 1987). Under the present rules, aRegional Director exercises both visitorial and enforcement power over labor standards cases, and istherefore empowered to adjudicate money claims, provided there still exists an employer-employeerelationship, and the findings of the regional office is not contested by the employer concerned.

Prior to the promulgation of E.O. No. 111 on December 24, 1986, the Regional Director'sauthority over money claims was unclear. The complaint in the present case was filed on May 23, 1986when E.O. No. 111 was not yet in effect. We believe, however, that even in the absence of E. O. No. 111,Regional Directors already had enforcement powers over money claims, effective under P.D. No. 850,issued on December 16, 1975, which transferred labor standards cases from the arbitration system to theenforcement system.

Viewed in the light of PD 850 and read in coordination with MOLE Policy Instructions Nos. 6, 7and 37, it is clear that it has always been the intention of our labor authorities to provide our workersimmediate access (when still feasible, as where an employer-employee relationship still exists) to their rightsand benefits, without being inconvenienced by arbitration/litigation processes that prove to be not onlynerve-wracking, but financially burdensome in the long run. Note further the second paragraph of PolicyInstructions No. 7 indicating that the transfer of labor standards cases from the arbitration system to theenforcement system is so that:

. . to assure the workers the rights and benefits due to him under labor standard laws, without having to gothrough arbitration. . .. . the workers would not litigate to get what legally belongs to him. .. ensuring delivery . . free of charge.

E.O. No. 111 was issued on December 24, 1986 or three (3) months after the promulgation of theSecretary of Labor's decision upholding private respondents' salary differentials and ECOLAs onSeptember 24, 1986. The amendment of the visitorial and enforcement powers of the Regional Director(Article 128-b) by said E.O. 111 reflects the intention enunciated in Policy Instructions Nos. 6 and 37 toempower the Regional Directors to resolve uncontested money claims in cases where an employer-employee relationshipstill exists. This intention must be given weight and entitled to great respect.

The proceedings before the Regional Director must, perforce, be upheld on the basis of Article128(b) as amended by E.O. No. 111, dated December 24, 1986, this executive order "to be considered inthe nature of a curative statute with retrospective application." The Regional Director correctly applied theaward with respect to those employees who signed the complaint, as well as those who did not sign thecomplaint, but were still connected with the hospital at the time the complaint was filed. The justification for the awardto this group of employees who were not signatories to the complaint is that the visitorial and enforcementpowers given to the Secretary of Labor is relevant to, and exercisable over establishments, not over theindividual members/employees, because what is sought to be achieved by its exercise is the observanceof, and/or compliance by, such firm/establishment with the labor standards regulations.

Necessarily, in case of an award resulting from a violation of labor legislation by suchestablishment, the entire members/employees should benefit therefrom. However, there is no legaljustification for the award in favor of those employees who were no longer connected with the hospital at thetime the complaint was filed, having resigned therefrom in 1984. The enforcement power of the RegionalDirector cannot legally be upheld in cases of separated employees. Article 129 of the Labor Code, cited bypetitioner (p. 54, Rollo) is not applicable as said article is in aid of the enforcement power of the Regional Director;hence, not applicable where the employee seeking to be paid underpayment of wages is already separatedfrom the service. His claim is purely a money claim that has to be the subject of arbitration proceedingsand therefore within the original and exclusive jurisdiction of the Labor Arbiter.

Mendoza v. Rural Bank of LucbanG.R. No. 155421, 7 July 2004, FIRST DIVISION (Panganiban, J.)

The Board of Directors of the Rural Bank of Lucban, Inc. issued Board Resolution Nos. 99-52and 99-53, providing for the reshuffling of assignments of all officers and employees and naming theemployees subject of the reshuffle, respectively. Elmer Mendoza, petitioner and one of the employeessubject of the reshuffle, wrote a letter to Alejo B. Daya, the bank's board chairman, expressing Mendoza'sopinion on the reshuffling of which Mendoza deemed as a demotion without any legal basis; Mendoza,his present position being an Appraiser, was re-assigned as a Clerk. Daya replied, to which Daya assuredMendoza that it was never the intention of management to downgrade Mendoza's position in the bankconsidering that Mendoza's due compensation as Bank Appraiser is maintained. Therafter, Mendozaapplied for two leaves of absences on separate occasions, the first for 10 days and the second for 20 days.On his second leave of absence, Mendoza filed a Complaint before the National Labor RelationsCommission (NLRC) for illegal dismissal, underpayment, separation pay and damages against the RuralBank of Lucban. The labor arbiter rendered a Decision in favor of Mendoza.

On appeal, the NLRC reversed the labor arbiter. After the NLRC denied Mendoza's Motion forReconsideration, Mendoza brought before the CA a Petition for Certiorari to which the CA ruled againstMendoza and found no grave abuse of discretion on the NLRC's part.

ISSUE:

Whether or not Mendoza was constructively dismissed from his employment

HELD:

Constructive dismissal is defined as an involuntary resignation resorted to when continuedemployment is rendered impossible, unreasonable or unlikely; when there is a demotion in rank or adiminution of pay; or when a clear discrimination, insensibility or disdain by an employer becomesunbearable to the employee. Petitioner argues that he was compelled to file an action for constructivedismissal, because he had been demoted from appraiser to clerk and not given any work to do, while histable had been placed near the toilet and eventually removed. He adds that the reshuffling of employeeswas done in bad faith, because it was designed primarily to force him to resign.

Jurisprudence recognizes the exercise of management prerogatives. For this reason, courts oftendecline to interfere in legitimate business decisions of employers. Indeed, labor laws discourageinterference in employers’ judgments concerning the conduct of their business. The law must protect notonly the welfare of employees, but also the right of employers. In the pursuit of its legitimate businessinterest, management has the prerogative to transfer or assign employees from one office or area ofoperation to another -- provided there is no demotion in rank or diminution of salary, benefits, and otherprivileges; and the action is not motivated by discrimination, made in bad faith, or effected as a form ofpunishment or demotion without sufficient cause. This privilege is inherent in the right of employers tocontrol and manage their enterprise effectively.

The right of employees to security of tenure does not give them vested rights to their positions tothe extent of depriving management of its prerogative to change their assignments or to transfer them.Managerial prerogatives, however, are subject to limitations provided by law, collective bargainingagreements, and general principles of fair play and justice.

The employer bears the burden of proving that the transfer of the employee has complied withthe foregoing test. In the instant case, we find no reason to disturb the conclusion of the NLRC and theCA that there was no constructive dismissal. Their finding is supported by substantial evidence -- thatamount of relevant evidence that a reasonable mind might accept as justification for a conclusion.Petitioner’s transfer was made in pursuit of respondent’s policy to “familiarize bank employees with thevarious phases of bank operations and further strengthen the existing internal control system” of allofficers and employees. We have previously held that employees may be transferred -- based on theirqualifications, aptitudes and competencies -- to positions in which they can function with maximumbenefit to the company.

There appears no justification for denying an employer the right to transfer employees to expandtheir competence and maximize their full potential for the advancement of the establishment. Petitionerwas not singled out; other employees were also reassigned without their express consent. Neither was thereany demotion in the rank of petitioner; or any diminution of his salary, privileges and other benefits. Thisfact is clear in respondent’s Board Resolutions, the April 30, 1999 letter of Bank President Daya to BranchManager Cada, and the May 10, 1999 letter of Daya to petitioner.

On the other hand, petitioner has offered no sufficient proof to support his allegations. Given nocredence by both lower tribunals was his bare and self-serving statement that he had been positioned nearthe comfort room, made to work without a table, and given no work assignment. Purely conjectural is hisclaim that the reshuffle of personnel was a harassment in retaliation for an alleged falsification case filedby his relatives against a public official. While the rules of evidence prevailing in courts of law are notcontrolling in proceedings before the NLRC, parties must nonetheless submit evidence to support theircontentions.

P.I. Manufacturing Incorporated v. P.I Manufacturing UnionG.R. No. 167217, 4 February 2008, FIRST DIVISION (Sandoval-Gutierrez, J.)

In 1987, the President signed into law Republic Act (RA) No. 6640 providing, among others, anincrease in the statutory minimum wage and salary rates of employees and workers in the private sector.Thereafter, P.I. Manufacturing Incorporated (P.I), petitioner, and P.I. Manufacturing Supervisors andForemen Association (PIMASUFA), respondents, entered into a new Collective Bargaining Agreement(1987 CBA) whereby the supervisors were granted an increase of Php 625 per month and the foremen,Php 475 per month. In 1989, PIMASUFA and the National Labor Union filed a complaint with theNational Labor Relations Commission (NLRC) charging P.I. with violation of RA No. 6640, contendingthat the implementation of the said statute had resulted in a wage distortion.

The Labor Arbiter rendered a Decision in favor of PIMASUFA, ordering P.I. to pay all themembers of PIMASUFA (across the board) wage increases equivalent to 13.5%of their basic pay. Onappeal, the NLRC rendered a Resolution affirming the Labor Arbiter's judgement. Thereafter, P.I. filed apetition for Certiorari with this Court, which the Court referred to the CA. The CA rendered a Decisionaffirming that of the NLRC's with modification by raising the 13.5% wage increase to 18.5%. A motionfor reconsideration was filed by P.I. but it was denied.

ISSUE:

Whether the implementation of RA No. 6640 resulted in a wage distortion and whether suchdistortion was cured or remedied by the 1987 CBA

HELD:

Wage distortion means the disappearance or virtual disappearance of pay differentials betweenlower and higher positions in an enterprise because of compliance with a wage order.

In this case, the Court of Appeals correctly ruled that a wage distortion occurred due to theimplementation of R.A. No. 6640. Notably, the implementation of R.A. No. 6640 resulted in the increaseof P10.00 in the wage rates of Alcantara, supervisor, and Morales and Salvo, both foremen. They arepetitioner’s lowest paid supervisor and foremen. As a consequence, the increased wage rates offoremen Morales and Salvo exceeded that of supervisor Buencuchillo. Also, the increased wage rateof supervisor Alcantara exceeded those of supervisors Buencuchillo and Del Prado. Consequently,the P9.79 gap or difference between the wage rate of supervisor Del Prado and that of supervisor Alcantarawas eliminated. Instead, the latter gained a P.21 lead over Del Prado. Like a domino effect, these gaps ordifferences between and among the wage rates of all the above employees have been substantially alteredand reduced. It is therefore undeniable that the increase in the wage rates by virtue of R.A. No. 6640resulted in wage distortion or the elimination of the intentional quantitative differences in thewage rates of the above employees.

However, while we find the presence of wage distortions, we are convinced that the same werecured or remedied when respondent PIMASUFA entered into the 1987 CBA with petitioner afterthe effectivity of R.A. No. 6640. The 1987 CBA increased the monthly salaries of the supervisors byP625.00 and the foremen, by P475.00, effective May 12, 1987. These increases re-established andbroadened the gap, not only between the supervisors and the foremen, but also between themand the rank-and-file employees. Significantly, the 1987 CBA wage increases almost doubled that of theP10.00 increase under R.A. No. 6640. The P625.00/month means P24.03 increase per day for thesupervisors, while the P475.00/month means P18.26 increase per day for the foremen. These increases

were to be observed every year, starting May 12, 1987 until July 26, 1989. Clearly, the gap between thewage rates of the supervisors and those of the foremen was inevitably re-established. It continued tobroaden through the years.

Interestingly, such gap as re-established by virtue of the CBA is more than a substantial compliancewith R.A. No. 6640. We hold that the Court of Appeals erred in not taking into account the provisionsof the CBA viz-a-viz the wage increase under the said law. It has not escaped our attention that requiringpetitioner to pay all the members of respondent PIMASUFA a wage increase of 18.5%, over and abovethe negotiated wage increases provided under the 1987 CBA, is highly unfair and oppressive to theformer. Obviously, it was not the intention of R.A. No. 6640 to grant an across-the-board increase in payto all the employees of petitioner.

Almost all of the members of respondent PIMASUFA have been receiving wage rates aboveP100.00 and, therefore, not entitled to the P10.00 increase. Only three (3) of them are receiving wagerates below P100.00, thus, entitled to such increase. Now, to direct petitioner to grant an across-the-board increase to all of them, regardless of the amount of wages they are already receiving, would be harshand unfair to the former.

In fine, it must be emphasized that in the resolution of labor cases, this Court has always beenguided by the State policy enshrined in the Constitution that the rights of workers and the promotion oftheir welfare shall be protected. However, consistent with such policy, the Court cannot favor oneparty, be it labor or management, in arriving at a just solution to a controversy if the partyconcerned has no valid support to its claim, like respondents here.

Philippine Association of Service Exporters, Inc. v. DrilonG.R. No. 81958, 30 June 1988, EN BANC (Sarmiento, J.)

The Philippine Association of Service Exporters, Inc. (PASEI), a firm "engaged principally in therecruitment of Filipino workers, male and female, for overseas placement," challenges the Constitutionalvalidity of Department Order No. 1, Series of 1988, of the Department of Labor and Employment ,in the character of "GUIDELINES GOVERNING THE TEMPORARY SUSPENSION OFDEPLOYMENT OF FILIPINO DOMESTIC AND HOUSEHOLD WORKERS." The measure isassailed for "discrimination against males or females;" that it "does not apply to all Filipinoworkers but only to domestic helpers and females with similar skills;" that it is violative of the rightto travel; and that it is an invalid exercise of the lawmaking power, police power being legislative, andnot executive in character.

ISSUE:

Whether or not Department Order No. 1, a police power measure, is valid under the Constitution

HELD:

As a general rule, official acts enjoy a presumed validity. In the absence of clear and convincingevidence to the contrary, the presumption logically stands. The petitioner has shown no satisfactory reasonwhy the contested measure should be nullified. There is no question that Department Order No. 1 appliesonly to "female contract workers," but it does not thereby make an undue discrimination between thesexes. It is well-settled that "equality before the law" under the Constitution does not import a perfectIdentity of rights among all men and women. It admits of classifications, provided that (1) suchclassifications rest on substantial distinctions; (2) they are germane to the purposes of the law; (3) they arenot confined to existing conditions; and (4) they apply equally to all members of the same class.

The Court is satisfied that the classification made-the preference for female workers — rests onsubstantial distinctions. As a matter of judicial notice, the Court is well aware of the unhappy plight thathas befallen our female labor force abroad, especially domestic servants, amid exploitative workingconditions marked by, in not a few cases, physical and personal abuse. The sordid tales of maltreatmentsuffered by migrant Filipina workers, even rape and various forms of torture, confirmed by testimonies ofreturning workers, are compelling motives for urgent Government action. As precisely the caretaker ofConstitutional rights, the Court is called upon to protect victims of exploitation. In fulfilling that duty, theCourt sustains the Government's efforts. Discrimination in this case is justified.

There is likewise no doubt that such a classification is germane to the purpose behind the measure.Unquestionably, it is the avowed objective of Department Order No. 1 to "enhance the protection forFilipino female overseas workers" this Court has no quarrel that in the midst of the terrible mistreatmentFilipina workers have suffered abroad, a ban on deployment will be for their own good and welfare.

The Order does not narrowly apply to existing conditions. Rather, it is intended to applyindefinitely so long as those conditions exist. This is clear from the Order itself ("Pending review of theadministrative and legal measures, in the Philippines and in the host countries . . ."), meaning to say thatshould the authorities arrive at a means impressed with a greater degree of permanency, the ban shall belifted. As a stop-gap measure, it is possessed of a necessary malleability, depending on the circumstancesof each case.

The Court finds, finally, the impugned guidelines to be applicable to all female domestic overseasworkers. That it does not apply to "all Filipina workers" is not an argument for unconstitutionality. Hadthe ban been given universal applicability, then it would have been unreasonable and arbitrary. For obviousreasons, not all of them are similarly circumstanced. What the Constitution prohibits is the singling out ofa select person or group of persons within an existing class, to the prejudice of such a person or group orresulting in an unfair advantage to another person or group of persons.

Department Order No. 1 is a valid implementation of the Labor Code, in particular, its basicpolicy to "afford protection to labor," pursuant to the respondent Department of Labor's rule-makingauthority vested in it by the Labor Code. The petitioner assumes that it is unreasonable simply because ofits impact on the right to travel, but as we have stated, the right itself is not absolute. The disputed Orderis a valid qualification thereto. Neither is there merit in the contention that Department Order No. 1constitutes an invalid exercise of legislative power. It is true that police power is the domain of thelegislature, but it does not mean that such an authority may not be lawfully delegated. As we havementioned, the Labor Code itself vests the Department of Labor and Employment with rulemakingpowers in the enforcement whereof.

The petitioners's reliance on the Constitutional guaranty of worker participation "in policy anddecision-making processes affecting their rights and benefits" is not well-taken. The right granted by thisprovision, again, must submit to the demands and necessities of the State's power of regulation.

Sosito v. Aguinaldo Development CorporationG.R. No. L-48926, 14 December 1987, FIRST DIVISION (Cruz, J.)

Manuel Sosito, petitioner, was employed in Aguinaldo Development Corporation (ADC),respondent. In January 1976, Sosito went on indefinite leave with the consent of ADC. On July 20, 1976,ADC announced a retrenchment program and offered separation pay to employees in the active serviceas of June 30, 1976. Sosito decided to accept this offer and so submitted his resignation. However, hisresignation was not acted upon and he was never given the separation pay he expected. Sosito complainedto the Department of Labor, and Sosito was thereafter sustained. On appeal to the National LaborRelations Commission, the prior decision was reversed and it was held that Sosito was not covered by theretrenchment program.

ISSUE:

Whether or not Sosito is covered by the retrenchment program

HELD:

It is clear from the memorandum that the offer of separation pay was extended only to those whowere in the active service of the company as of June 30, 1976. It is equally clear that the petitioner was noteligible for the promised gratuity as he was not actually working with the company as of the said date.Being on indefinite leave, he was not in the active service of the private respondent although, if one wereto be technical, he was still in its employ. Even so, during the period of indefinite leave, he was not entitledto receive any salary or to enjoy any other benefits available to those in the active service.

It seems to us that the petitioner wants to enjoy the best of two worlds at the expense of theprivate respondent. He has insulated himself from the insecurities of the floundering firm but at the sametime would demand the benefits it offers. Being on indefinite leave from the company, he could seek andtry other employment and remain there if he should find it acceptable; but if not, he could go back to hisformer work and argue that he still had the right to return as he was only on leave.

We note that under the law then in force the private respondent could have validly reduced itswork force because of its financial reverses without the obligation to grant separation pay. This waspermitted under the original Article 272(a), of the Labor Code, which was in force at the time. To its credit,however, the company voluntarily offered gratuities to those who would agree to be phased out pursuantto the terms and conditions of its retrenchment program, in recognition of their loyalty and to tide themover their own financial difficulties. The Court feels that such compassionate measure deservescommendation and support but at the same time rules that it should be available only to those who arequalified therefore. We hold that the petitioner is not one of them.

While the Constitution is committed to the policy of social justice and the protection of theworking class, it should not be supposed that every labor dispute will be automatically decided in favor oflabor. Management also has its own rights which, as such, are entitled to respect and enforcement in theinterest of simple fair play. Out of its concern for those with less privileges in life, this Court has inclinedmore often than not toward the worker and upheld his cause in his conflicts with the employer. Suchfavoritism, however, has not blinded us to the rule that justice is in every case for the deserving, to bedispensed in the light of the established facts and the applicable law and doctrine.

SSS Employees Association v.CAG.R. No. 85279, 28 July 1989, THIRD DIVISION (Cortes, J.)

The officers and members of the Social Security System Employees Association (SSSEA) stagedan illegal strike and baricaded the entrances to the SSS Building after the SSS failed to act on the union'sdemands and after the Social Security System (SSS) deducted certain amounts from the salaries of theemployees and allegedly committed acts of discrimination and unfair labor practices. The strike wasreported to the Public Sector Labor - Management Council, which ordered the strikers to return to work.The strikers refused to return to work and as a result, the SSS suffered damages. On the basis of theforegoing, the SSS filed a complaint for damages with a writ of preliminary injunction against the SSSEAbefore the RTC. Eventually, the RTC, having found that the strike was illegal, issued a writ of preliminaryinjunction. As the SSSEA's motion for reconsideration of the RTC's decision was denied, SSSEA filed apetition for certiorari and prohibition with preliminary injunction before this Court. In a resolution, theCourt resolved to refer the case to the CA whereby the CA ruled against the SSSEA.

ISSUES:

1. Whether or not the employees of the SSS have the right to strike2. Whether or not the RTC has jurisdiction to hear the case initiated by the SSS and to enjoin the

strikers from continuing with the strike and to order them to return to work

HELD:

By itself, this provision would seem to recognize the right of all workers and employees, includingthose in the public sector, to strike. But the Constitution itself fails to expressly confirm this impression,for in the Sub-Article on the Civil Service Commission, it provides, after defining the scope of the civilservice as "all branches, subdivisions, instrumentalities, and agencies of the Government, includinggovernment-owned or controlled corporations with original charters," that "[t]he right to self-organizationshall not be denied to government employees" [Art. IX(B), Sec. 2(l) and (50)]. Parenthetically, the Bill ofRights also provides that "[tlhe right of the people, including those employed in the public and privatesectors, to form unions, associations, or societies for purposes not contrary to law shall not abridged" [Art.III, Sec. 8]. Thus, while there is no question that the Constitution recognizes the right of governmentemployees to organize, it is silent as to whether such recognition also includes the right to strike. The Courtis of the considered view that they are. Considering that under the 1987 Constitution "[t]he civil serviceembraces all branches, subdivisions, instrumentalities, and agencies of the Government, includinggovernment-owned or controlled corporations with original charters" [Art. IX(B), Sec. .2(l) see also Sec. 1of E.O. No. 180 where the employees in the civil service are denominated as "government employees"]and that the SSS is one such government-controlled corporation with an original charter, having beencreated under R.A. No. 1161, its employees are part of the civil service [NASECO v. NLRC, G.R. Nos.69870 & 70295, November 24, 1988] and are covered by the Civil Service Commission's memorandumprohibiting strikes. This being the case, the strike staged by the employees of the SSS was illegal.

E.O. No. 180, which provides guidelines for the exercise of the right to organize of governmentemployees, while clinging to the same hilosophy, has, however, relaxed the rule to allow negotiation wherethe terms and conditions of employment involved are not among those fixed by law. Thus: Governmentemployees may, therefore, through their unions or associations, either petition the Congress for thebetterment of the terms and conditions of employment which are within the ambit of legislation ornegotiate with the appropriate government agencies for the improvement of those which are not fixed bylaw. If there be any unresolved grievances, the dispute may be referred to the Public Sector Labor -Management Council for appropriate action. But employees in the civil service may not resort to strikes,

walk-outs and other temporary work stoppages, like workers in the private sector, to pressure theGovemment to accede to their demands. As now provided under Sec. 4, Rule III of the Rules andRegulations to Govern the Exercise of the Right of Government-Employees to Self- Organization, whichtook effect after the instant dispute arose, "[t]he terms and conditions of employment in the government,including any political subdivision or instrumentality thereof and government-owned and controlledcorporations with original charters are governed by law and employees therein shall not strike for thepurpose of securing changes thereof."

The strike staged by the employees of the SSS belonging to petitioner union being prohibited bylaw, an injunction may be issued to restrain it. It is futile for the petitioners to assert that the subject labordispute falls within the exclusive jurisdiction of the NLRC and, hence, the Regional Trial Court had nojurisdiction to issue a writ of injunction enjoining the continuance of the strike. The Labor Code itselfprovides that terms and conditions of employment of government employees shall be governed by theCivil Service Law, rules and regulations [Art. 276]. More importantly, E.O. No. 180 vests the Public SectorLabor - Management Council with jurisdiction over unresolved labor disputes involving governmentemployees [Sec. 16]. Clearly, the NLRC has no jurisdiction over the dispute. This being the case, theRegional Trial Court was not precluded, in the exercise of its general jurisdiction under B.P. Blg. 129, asamended, from assuming jurisdiction over the SSS's complaint for damages and issuing the injunctive writprayed for therein. Unlike the NLRC, the Public Sector Labor - Management Council has not been grantedby law authority to issue writs of injunction in labor disputes within its jurisdiction. Thus, since it is theCouncil, and not the NLRC, that has jurisdiction over the instant labor dispute, resort to the general courtsof law for the issuance of a writ of injunction to enjoin the strike is appropriate.