Labrel - Cases - Set 1

7/28/2019 Labrel - Cases - Set 1

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G.R. No. L-48645 January 7, 1987

"BROTHERHOOD" LABOR UNITY MOVEMENT OF THE PHILIPPINES, ANTONIOCASBADILLO, PROSPERO TABLADA, ERNESTO BENGSON, PATRICIOSERRANO, ANTONIO B. BOBIAS, VIRGILIO ECHAS, DOMINGO PARINAS,NORBERTO GALANG, JUANITO NAVARRO, NESTORIO MARCELLANA,TEOFILO B. CACATIAN, RUFO L. EGUIA, CARLOS SUMOYAN, LAMBERTORONQUILLO, ANGELITO AMANCIO, DANILO B. MATIAR, ET AL., petitioners,vs.HON. RONALDO B. ZAMORA, PRESIDENTIAL ASSISTANT FOR LEGALAFFAIRS, OFFICE OF THE PRESIDENT, HON. AMADO G. INCIONG,UNDERSECRETARY OF LABOR, SAN MIGUEL CORPORATION, GENARO

OLIVES, ENRIQUE CAMAHORT, FEDERICO OATE, ERNESTO VILLANUEVA,ANTONIO BOCALING and GODOFREDO CUETO, respondents.

GUTIERREZ, JR., J.:

The elemental question in labor l aw of whether or not an employer-employeerelationship exists between petitioners-members of the "Brotherhood Labor UnitMovement of the Philippines" (BLUM) and respondent San Miguel Corporation, is themain issue in this petition. The disputed decision of public respondent RonaldoZamora, Presidential Assistant for legal Affairs, contains a brief summary of the factsinvolved:

1. The records disclose that on July 11, 1969, BLUM filed a complaintwith the now defunct Court of Industrial Relations, charging San MiguelCorporation, and the following officers: Enrique Camahort, FedericoOfiate Feliciano Arceo, Melencio Eugenia Jr., Ernesto Villanueva,Antonio Bocaling and Godofredo Cueto of unfair l abor practice as set

forth in Section 4 (a), sub-sections (1) and (4) of Republic Act No. 875and of Legal dismissal. It was alleged that respondents ordered theindividual complainants to disaffiliate from the complainant union; andthat management dismissed the individual complainants when theyinsisted on their union membership.On their part, respondents moved for the dismissal of the complaint onthe grounds that the complainants are not and have never beenemployees of respondent company but employees of the independentcontractor; that respondent company has never had control over themeans and methods followed by the independent contractor whoenjoyed full authority to hire and control said employees; and that theindividual complainants are barred by estoppel from asserting that theyare employees of respondent company.While pending with the Court of Industrial Relations CIR pleadings andtestimonial and documentary evidences were duly presented, althoughthe actual hearing was delayed by several postponements. The disputewas taken over by the National Labor Relations Commission (NLRC)

with the decreed abolition of the CIR and the hearing of the caseintransferably commenced on September 8, 1975.On February 9, 1976, Labor Arbiter Nestor C. Lim found forcomplainants which was concurred in by the NLRC in a decision datedJune 28, 1976. The amount of backwages awarded, however, wasreduced by NLRC to the equivalent of one (1) year salary.On appeal, the Secretary in a decision dated June 1, 1977, set asidethe NLRC ruling, stressing the absence of an employer-mployeerelationship as borne out by the records of the case. ...

The petitioners strongly argue that there exists an employer-employee relationshipbetween them and the respondent company and that they were dismissed for

unionism, an act constituting unfair labor practice "for which respondents must bemade to answer."

Unrebutted evidence and testimony on record establish that the petitioners areworkers who have been employed at the San Miguel Parola Glass Factory since1961, averaging about seven (7) years of service at the time of their termination.They worked as "cargadores" or "pahinante" at the SMC Plant loading, unloading,piling or palleting empty bottles and woosen shells to and from company trucks andwarehouses. At times, they accompanied the company trucks on their deliveryroutes.

The petitioners first reported for work to Superintendent-in-Charge Camahort. Theywere issued gate passes signed by Camahort and were provided by the respondentcompany with the tools, equipment and paraphernalia used in the loading, unloading,piling and hauling operation.

Job orders emanated from Camahort. The orders are then transmitted to anassistant-officer-in-charge. In turn, the assistant informs the warehousemen andcheckers regarding the same. The latter, thereafter, relays said orders to thecapatazes or group leaders who then give orders to the workers as to where, whenand what to load, unload, pile, pallet or clean.

Work in the glass factory was neither regular nor continuous, depending wholly onthe volume of bottles manufactured to be loaded and unloaded, as well as thebusiness activity of the company. Work did not necessarily mean a full eight (8) hourday for the petitioners. However, work,at times, exceeded the eight (8) hour day andnecessitated work on Sundays and holidays. For this, they were neither paid

overtime nor compensation for work on Sundays and holidays.

Petitioners were paid every ten (10) days on a piece rate basis, that is, according tothe number of cartons and wooden shells they were able to load, unload, or pile. Thegroup leader notes down the number or volume of work that each individual workerhas accomplished. This is then made the basis of a report or statement which iscompared with the notes of the checker and warehousemen as to whether or not theytally. Final approval of report is by officer-in-charge Camahort. The pay check isgiven to the group l eaders for encashment, distribution, and payment to thepetitioners in accordance with payrolls prepared by said leaders. From the totalearnings of the group, the group leader gets a participation or share of ten (10%)percent plus an additional amount from the earnings of each individual.

The petitioners worked exclusive at the SMC plant, never having been assigned toother companies or departments of SMC plant, even when the volume of work was atits minimum. When any of the glass furnaces suffered a breakdown, making a

shutdown necessary, the petitioners work was temporarily suspended. Thereafter,the petitioners would return to work at the glass plant.

Sometime in January, 1969, the petitioner workers numbering one hundred andforty (140) organized and affiliated themselves with t he petitioner union and engagedin union activities. Believing themselves entitled to overtime and holiday pay, thepetitioners pressed management, airing other grievances such as being paid belowthe minimum wage law, inhuman treatment, being forced to borrow at usurious ratesof interest and to buy raffle tickets, coerced by withholding their salaries, and salarydeductions made without their consent. However, their gripes and grievances werenot heeded by the respondents.

On February 6, 1969, the petitioner union filed a notice of strike with the Bureau ofLabor Relations in connection with the dismissal of some of its members who wereallegedly castigated for their union membership and warned that should they persistin continuing with their union activities they would be dismissed from their jobs.Several conciliation conferences were scheduled in order to thresh out theirdifferences, On February 12, 1969, union member Rogelio Dipad was dismissed fromwork. At the scheduled conference on February 19, 1969, the complainant unionthrough its officers headed by National President Artemio Portugal Sr., presented aletter to the respondent company containing proposals and/or labor demandstogether with a request for recognition and collective bargaining.

San Miguel refused to bargain with the petitioner union alleging that the workers are

not their employees.

On February 20, 1969, all the petitioners were dismissed from their jobs and,thereafter, denied entrance to respondent company's glass factory despite theirregularly reporting for work. A complaint for illegal dismissal and unfair labor practicewas filed by the petitioners.

The case reaches us now with the same issues to be resolved as when it had begun.

The question of whether an employer-employee relationship exists in a certainsituation continues to bedevil the courts. Some businessmen try to avoid the bringingabout of an employer-employee relationship in their enterprises because that judicialrelation spawns obligations connected with workmen's compensation, social security,medicare, minimum wage, termination pay, and unionism. (Mafinco TradingCorporation v. Ople, 70 SCRA 139).

In determining the existence of an employer-employee relationship, the elements thatare generally considered are the following: (a) the selection and engagement of theemployee; (b) the payment of wages; (c) the power of dismissal; and (d) theemployer's power to control the employee with respect to the means and methods bywhich the work is to be accomplished. It. is the called "control test" that is the mostimportant element (Investment Planning Corp. of the Phils. v. The Social SecuritySystem, 21 SCRA 924; Mafinco Trading Corp. v. Ople, supra,and Rosario Brothers,Inc. v. Ople, 131 SCRA 72).

Applying the above criteria, the evidence strongly indicates the existence of anemployer-employee relationship between petitioner workers and respondent SanMiguel Corporation. The respondent asserts that the petitioners are employees of theGuaranteed Labor Contractor, an independent labor contracting firm.

The facts and evidence on record negate respondent SMC's claim.

The existence of an independent contractor relationship is generally established bythe following criteria: "whether or not the contractor is carrying on an independentbusiness; the nature and extent of the work; the skill required; the term and durationof the relationship; the right to assign the performance of a specified piece of work;the control and supervision of the work to another; the employer's power with respectto the hiring, firing and payment of the contractor's workers; the control of thepremises; the duty to supply the premises tools, appliances, materials and labor; andthe mode, manner and terms of payment" (56 CJS Master and Servant, Sec. 3(2),46; See also 27 AM. Jur. Independent Contractor, Sec. 5, 485 and Annex 75 ALR7260727)

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None of the above criteria exists in the case at bar.

Highly unusual and suspect is the absence of a written contract to specify theperformance of a specified piece of work, the nature and extent of the work and theterm and duration of the relationship. The records fail to show that a largecommercial outfit, such as the San Miguel Corporation, entered into mere oralagreements of employment or labor contracting where the same would involveconsiderable expenses and dealings with a large number of workers over a longperiod of time. Despite respondent company's allegations not an i ota of evidence wasoffered to prove the same or its particulars. Such failure makes respondent SMC'sstand subject to serious doubts.

Uncontroverted is the fact that for an average of seven (7) years, each of thepetitioners had worked continuously and exclusively for the respondent company'sshipping and warehousing department. Considering the length of time that thepetitioners have worked with the respondent company, there is j ustification toconclude that they were engaged to perform activities necessary or desirable in theusual business or trade of the respondent, and the petitioners are, therefore regularemployees (Phil. Fishing Boat Officers and Engineers Union v. Court of IndustrialRelations, 112 SCRA 159 and RJL Martinez Fishing Corporation v. National LaborRelations Commission, 127 SCRA 454).

As we have found in RJL Martinez Fishing Corporation v. National Labor RelationsCommission (supra):

... [T]he employer-employee relationship between the parties herein isnot coterminous with each loading and unloading job. As earlier shown,respondents are engaged in the business of fishing. For this purpose,they have a fleet of fishing vessels. Under this situation, respondents'

activity of catching fish is a continuous process and could hardly beconsidered as seasonal in nature. So that the activities performed byherein complainants, i.e. unloading the catch of t una fish fromrespondents' vessels and then l oading the same to refrigerated vans,are necessary or desirable in the business of respondents. Thiscircumstance makes the employment of complainants a regular one, inthe sense that it does not depend on any specific project or seasonableactivity. (NLRC Decision, p. 94, Rollo). lwphl@it

so as it with petitioners in the case at bar. In fact, despite past shutdowns of the glassplant for repairs, the petitioners, thereafter, promptly returned to their jobs, neverhaving been replaced, or assigned elsewhere until the present controversy arose.The term of the petitioners' employment appears indefinite. The continuity andhabituality of petitioners' work bolsters their claim of employee status vis-a-visrespondent company,

Even under the assumption that a contract of employment had indeed been executedbetween respondent SMC and the alleged labor contractor, respondent's case will,nevertheless, fail.

Section 8, Rule VIII, Book III of the Implementing Rules of the Labor Code provides:Job contracting. There is job contracting permissible under the Codeif the following conditions are met:(1) The contractor carries on an independent business and undertakesthe contract work on his own account under his own responsibilityaccording to his own manner and method, free from the control anddirection of his employer or principal in all matters connected with theperformance of the work except as to the results thereof; and

(2) The contractor has substantial capital or investment in the form oftools, equipment, machineries, work premises, and other materialswhich are necessary in the conduct of his business.

We find that Guaranteed and Reliable Labor contractors have neither substantialcapital nor investment to qualify as an independent contractor under the law. Thepremises, tools, equipment and paraphernalia used by the petitioners in their jobs areadmittedly all supplied by respondent company. It is only the manpower or labor forcewhich the alleged contractors supply, suggesting the existence of a "labor only"contracting scheme prohibited by law (Article 106, 109 of the Labor Code; Section9(b), Rule VIII, Book III, Implementing Rules and Regulations of the Labor Code). Infact, even the alleged contractor's office, which consists of a space at respondent

company's warehouse, table, chair, typewriter and cabinet, are provided for byrespondent SMC. It is therefore clear that the alleged contractors have no capitaloutlay involved in the conduct of its business, in the maintenance thereof or in thepayment of its workers' salaries.

The payment of the workers' wages is a critical factor i n determining the actuality ofan employer-employee relationship whether between respondent company andpetitioners or between the alleged independent contractor and petitioners. It isimportant to emphasize that in a truly independent contractor-contractee relationship,the fees are paid directly to the manpower agency in lump sum without indicating orimplying that the basis of such lump sum is the salary per worker multiplied by thenumber of workers assigned to the company. This is the rule inSocial SecuritySystem v. Court of Appeals (39 SCRA 629, 635).

The alleged independent contractors in the case at bar were paid a lump sumrepresenting only the salaries the workers were entitled to, arrived at by adding the

salaries of each worker which depend on the volume of work they. had accomplishedindividually. These are based on payrolls, reports or statements prepared by theworkers' group leader, warehousemen and checkers, where they note down thenumber of cartons, wooden shells and bottles each worker was able to load, unload,pile or pallet and see whether they tally. The amount paid by respondent company tothe alleged independent contractor considers no business expenses or capital outlayof the latter. Nor is the profit or gain of the alleged contractor in the conduct of itsbusiness provided for as an amount over and above the workers' wages. Instead, thealleged contractor receives a percentage from the total earnings of all the workersplus an additional amount corresponding to a percentage of the earnings of eachindividual worker, which, perhaps, accounts for the petitioners' charge ofunauthorized deductions from their salaries by the respondents.

Anent the argument that the petitioners are not employees as they worked on piecebasis, we merely have to cite our rulings in Dy Keh Beng v. International Labor andMarine Union of the Philippines (90 SCRA 161), as follows:

"[C]ircumstances must be construed to determine indeed if payment bythe piece is just a method of compensation and does not define theessence of the relation. Units of time . . . and units of work are inestablishments like respondent (sic) just yardsticks whereby todetermine rate of compensation, to be applied whenever agreed upon.We cannot construe payment by the piece where work is done in suchan establishment so as to put the worker completely at liberty to turnhim out and take in another at pleasure."

Article 106 of the Labor Code provides the legal effect of a labor only contractingscheme, to wit:

... the person or intermediary shall be considered merely as an agent ofthe employer who shall be responsible to the workers in the samemanner and extent as if the latter were directly employed by him.

Firmly establishing respondent SMC's role as employer is the control exercised by itover the petitioners that is, control in the means and methods/manner by whichpetitioners are to go about their work, as well as in disciplinary measures imposed byit.

Because of the nature of the petitioners' work as cargadores or pahinantes,supervision as to the means and manner of performing the same is practically nil.

For, how many ways are there to load and unload bottles and wooden shells? Themere concern of both respondent SMC and the alleged contractor is that the job ofhaving the bottles and wooden shells brought to and from the warehouse be done.More evident and pronounced is respondent company's right to control in thediscipline of petitioners. Documentary evidence presented by the petitioners establishrespondent SMC's right to impose disciplinary measures for violations or infractionsof its rules and regulations as well as its right to recommend transfers and dismissalsof the piece workers. The inter-office memoranda submitted in evidence prove thecompany's control over the petitioners. That respondent SMC has the power torecommend penalties or dismissal of the piece workers, even as to Abner Bungaywho is alleged by SMC to be a representative of the alleged labor contractor, is thestrongest indication of respondent company's right of control over the petitioners asdirect employer. There is no evidence to show that the alleged labor contractor hadsuch right of control or much less had been there to supervise or deal with thepetitioners.

The petitioners were dismissed allegedly because of the shutdown of the glass

manufacturing plant. Respondent company would have us believe t hat this was acase of retrenchment due to the closure or cessation of operations of theestablishment or undertaking. But such is not the case here. The respondent'sshutdown was merely temporary, one of its furnaces needing repair. Operationscontinued after such repairs, but the petitioners had already been refused entry to thepremises and dismissed from respondent's service. New workers manned theirpositions. It is apparent that the closure of respondent's warehouse was merely aploy to get rid of the petitioners, who were then agitating the respondent company forbenefits, reforms and collective bargaining as a union. There is no showing thatpetitioners had been remiss in their obligations and inefficient in their jobs to warranttheir separation.

As to the charge of unfair l abor practice because of SMC's refusal to bargain with thepetitioners, it is clear that the respondent company had an existing collectivebargaining agreement with the IBM union which is the recognized collectivebargaining representative at the respondent's glass plant.

There being a recognized bargaining representative of all employees at thecompany's glass plant, the petitioners cannot merely form a union and demandbargaining. The Labor Code provides the proper procedure for the recognition ofunions as sole bargaining representatives. This must be followed.

WHEREFORE, IN VIEW OF THE FOREGOING, the petition is GRANTED. The SanMiguel Corporation is hereby ordered to REINSTATE petitioners, with three (3) yearsbackwages. However, where reinstatement is no longer possible, the respondentSMC is ordered to pay the petitioners separation pay equivalent to one (1) month payfor every year of service. SO ORDERED.

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G.R. No. 87700 June 13, 1990

SAN MIGUEL CORPORATION EMPLOYEES UNION-PTGWO, DANIEL S.L.BORBON II, HERMINIA REYES, MARCELA PURIFICACION, ET AL., petitioners,vs.HON. JESUS G. BERSAMIRA, IN HIS CAPACITY AS PRESIDING JUDGE OFBRANCH 166, RTC, PASIG, and SAN MIGUEL CORPORATION, respondents.

MELENCIO-HERRERA, J.:

Respondent Judge of the Regional Trial Court of Pasig, Branch 166, is taken to taskby petitioners in this special civil action for certiorari and Prohibition for having issuedthe challenged Writ of Preliminary Injunction on 29 March 1989 in Civil Case No.57055 of his Court entitled "San Miguel Corporation vs. SMCEU-PTGWO, et als."

Petitioners' plea is that said Writ was issued without or in excess of jurisdiction andwith grave abuse of discretion, a labor dispute being involved. Private respondentSan Miguel Corporation (SanMig. for short), for its part, defends the Writ on theground of absence of any employer-employee relationship between it and thecontractual workers employed by the companies Lipercon Services, Inc. (Lipercon)and D'Rite Service Enterprises (D'Rite), besides the fact that the Union is bereft ofpersonality to represent said workers for purposes of collective bargaining. TheSolicitor General agrees with the position of SanMig.

The antecedents of the controversy reveal that:

Sometime in 1983 and 1984, SanMig entered into contracts for merchandisingservices with Lipercon and D'Rite (Annexes K and I, SanMig's Comment,respectively). These companies are independent contractors duly licensed by theDepartment of Labor and Employment (DOLE). SanMig entered into those contractsto maintain its competitive position and in keeping with the imperatives of efficiency,business expansion and diversity of its operation. In said contracts, it was expresslyunderstood and agreed that the workers employed by the contractors were to be paidby the latter and that none of them were to be deemed employees or agents ofSanMig. There was to be no employer-employee relation between the contractorsand/or its workers, on the one hand, and SanMig on the other.

Petitioner San Miguel Corporation Employees Union-PTWGO (the Union, for brevity)is the duly authorized representative of the monthly paid rank-and-file employees ofSanMig with whom the latter executed a Collective Bargaining Agreement (CBA)effective 1 July 1986 to 30 June 1989 (Annex A, SanMig's Comment). Section 1 oftheir CBA specifically provides that "temporary, probationary, or contract employeesand workers are excluded from the bargaining unit and, therefore, outside the scopeof this Agreement."

In a letter, dated 20 November 1988 (Annex C, Petition), the Union advised SanMigthat some Lipercon and D'Rite workers had signed up for union membership andsought the regularization of their employment with SMC. The Union alleged that thisgroup of employees, while appearing to be contractual workers supposedlyindependent contractors, have been continuously working for SanMig for a periodranging from six (6) months to fifteen (15) years and that their work is neither casualnor seasonal as they are performing work or activities necessary or desirable in theusual business or trade of SanMig. Thus, it was contended that there exists a "labor-only" contracting situation. It was then demanded that the employment status ofthese workers be regularized.

On 12 January 1989 on the ground that it had failed to receive any favorableresponse from SanMig, the Union filed a notice of strike for unfair labor practice, CBAviolations, and union busting (Annex D, Petition).

On 30 January 1989, the Union again filed a second notice of strike for unfair laborpractice (Annex F, Petition).

As in the first notice of strike. Conciliatory meetings were held on the second notice.Subsequently, the two (2) notices of strike were consolidated and several conciliationconferences were held to settle the dispute before the National Conciliation andMediation Board (NCMB) of DOLE (Annex G, Petition).

Beginning 14 February 1989 until 2 March 1989, series of pickets were staged byLipercon and D'Rite workers in various SMC plants and offices.

On 6 March 1989, SMC filed a verified Complaint for Injunction and Damages beforerespondent Court to enjoin the Union from:

a. representing and/or acting for and in behalf of theemployees of LIPERCON and/or D'RITE for the purposesof collective bargaining;

b. calling for and holding a strike vote, to compel plaintiff tohire the employees or workers of LIPERCON and D'RITE;

c. inciting, instigating and/or i nducing the employees orworkers of LIPERCON and D'RITE to demonstrate and/orpicket at the plants and offices of plaintiff within thebargaining unit referred to in the CBA,...;

d. staging a strike to compel plaintiff to hire the employeesor workers of LIPERCON and D'RITE;

e. using the employees or workers of LIPERCON ANDD'RITE to man the strike area and/or picket lines and/orbarricades which the defendants may set up at the plantsand offices of plaintiff within the bargaining unit referred toin the CBA ...;

f. intimidating, threatening with bodily harm and/ormolesting the other employees and/or contract workers ofplaintiff, as well as t hose persons lawfully transactingbusiness with plaintiff at the work places within thebargaining unit referred to in the CBA, ..., to compelplaintiff to hire the employees or workers of LIPERCONand D'RITE;

g. blocking, preventing, prohibiting, obstructing and/orimpeding the free ingress to, and egress from, the workplaces within the bargaining unit referred to in the CBA ..,to compel plaintiff to hire the employees or workers ofLIPERCON and D'RITE;

h. preventing and/or disrupting the peaceful and normaloperation of plaintiff at the work places within thebargaining unit referred to in the CBA, Annex 'C' hereof, tocompel plaintiff to hire the employees or workers ofLIPERCON and D'RITE. (Annex H, Petition)

Respondent Court f ound the Complaint sufficient in form and substance and issued aTemporary Restraining Order for the purpose of maintaining the status quo, and setthe application for Injunction for hearing.

In the meantime, on 13 March 1989, the Union filed a Motion to Dismiss SanMig's

Complaint on the ground of lack of jurisdiction over the case/nature of the action,which motion was opposed by SanMig. That Motion was denied by respondent Judgein an Order dated 11 April 1989.

After several hearings on SanMig's application for injunctive relief, where the partiespresented both testimonial and documentary evidence on 25 March 1989,respondent Court issued the questioned Order (Annex A, Petition) granting theapplication and enjoining the Union from Committing the acts complained of, supra.Accordingly, on 29 March 1989, respondent Court issued the corresponding Writ ofPreliminary Injunction after SanMig had posted the required bond of P100,000.00 toanswer for whatever damages petitioners may sustain by reason thereof.

In issuing the Injunction, respondent Court rationalized:

The absence of employer-employee relationship negatesthe existence of labor dispute. Verily, this court hasjurisdiction to take cognizance of plaintiff's grievance.

The evidence so far presented indicates that plaintiff hascontracts for services with Lipercon and D'Rite. Theapplication and contract for employment of the defendants'witnesses are either with Lipercon or D'Rite. What couldbe discerned is that there is no employer-employeerelationship between plaintiff and the contractual workersemployed by Lipercon and D'Rite. This, however, does notmean that a fi nal determination regarding the question ofthe existence of employer-employee relationship hasalready been made. To finally resolve this dispute, thecourt must extensively consider and delve into the mannerof selection and engagement of the putative employee; themode of payment of wages; the presence or absence of apower of dismissal; and the Presence or absence of a

power to control the putative employee's conduct. Thisnecessitates a full-blown trial. If the acts complained of arenot restrained, plaintiff would, undoubtedly, sufferirreparable damages. Upon the other hand, a writ ofinjunction does not necessarily expose defendants toirreparable damages.

Evidently, plaintiff has established its right to the reliefdemanded. (p. 21, Rollo)

Anchored on grave abuse of discretion, petitioners are now before us seekingnullification of the challenged Writ. On 24 April 1989, we issued a Temporary

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Restraining Order enjoining the implementation of the Injunction i ssued byrespondent Court. The Union construed this to mean that "we can now strike," whichit superimposed on the Order and widely circulated to entice t he Union membershipto go on strike. Upon being apprised thereof, in a Resolution of 24 May 1989, werequired the parties to "RESTORE the status quo ante declaration of strike" (p. 2,62Rollo).

In the meantime, however, or on 2 May 1989, the Union went on strike. Apparently,some of the contractual workers of Lipercon and D'Rite had been laid off. The strikeadversely affected thirteen (13) of the latter's plants and offices.

On 3 May 1989, the National Conciliation and Mediation Board (NCMB) called theparties to conciliation. The Union stated that it would li ft the strike if the thirty (30)Lipercon and D'Rite employees were recalled, and discussion on their otherdemands, such as wage distortion and appointment of coordinators, were made.Effected eventually was a Memorandum of Agreement between SanMig and theUnion that "without prejudice to the outcome of G.R. No. 87700 (this case) and CivilCase No. 57055 (the case below), the laid-off individuals ... shall be recalled effective8 May 1989 to their former jobs or equivalent positions under the same terms andconditions prior to "lay-off" (Annex 15, SanMig Comment). In turn, the Union wouldimmediately lift the pickets and return to work.

After an exchange of pleadings, this Court, on 12 October 1989, gave due course tothe Petition and required the parties to submit their memoranda simultaneously, thelast of which was filed on 9 January 1990.

The focal issue for determination is whether or not respondent Court correctly

assumed jurisdiction over the present controversy and properly issued the Writ ofPreliminary Injunction to the resolution of that question, is the matter of whether, ornot the case at bar involves, or is in connection with, or relates to a labor dispute. Anaffirmative answer would bring the case within the original and exclusive jurisdictionof labor tribunals to the exclusion of the regular Courts.

Petitioners take the position that 'it is beyond dispute that the controversy in thecourt

a quo involves or arose out of a labor dispute and is directly connected orinterwoven with the cases pending with the NCMB-DOLE, and is thus beyond theambit of the public respondent's jurisdiction. That the acts complained of (i.e., themass concerted action of picketing and the reliefs prayed for by the privaterespondent) are within the competence of labor tribunals, is beyond question" (pp. 6-7, Petitioners' Memo).

On the other hand, SanMig denies the existence of any employer-employeerelationship and consequently of any labor dispute between itself and the Union.

SanMig submits, in particular, that "respondent Court is vested with jurisdiction andjudicial competence to enjoin the specific type of strike staged by petitioner union andits officers herein complained of," for the reasons that:

A. The exclusive bargaining representative of an employerunit cannot strike to compel the employer to hire andthereby create an employment relationship with contractualworkers, especially were the contractual workers wererecognized by the union, under the governing collectivebargaining agreement, as excluded from, and thereforestrangers to, the bargaining unit.

B. A strike is a coercive economic weapon granted thebargaining representative only in the event of a deadlock ina labor dispute over 'wages, hours of work and all otherand of the employment' of the employees in the unit. Theunion leaders cannot instigate a strike to compel theemployer, especially on the eve of certification elections, tohire strangers or workers outside the unit, in the hope thelatter will help re-elect them.

C. Civil courts have the jurisdiction to enjoin the abovebecause this specie of strike does not arise out of a l abordispute, is an abuse of right, and violates the employer's

constitutional liberty to hire or not to hire. (SanMig'sMemorandum, pp. 475-476, Rollo).

We find the Petition of a meritorious character.

A "labor dispute" as defined in Article 212 (1) of the Labor Code includes "anycontroversy or matter concerning terms and conditions of employment or theassociation or representation of persons i n negotiating, fixing, maintaining, changing,or arranging the terms and conditions of employment, regardless of whether thedisputants stand in the proximate relation of employer and employee."

While it is SanMig's submission that no employer-employee relationship existsbetween itself, on the one hand, and the contractual workers of Lipercon and D'Riteon the other, a labor dispute can nevertheless exist "regardless of whether thedisputants stand in the proximate relationship of employer and employee" (Article 212

[1], Labor Code, supra) provided the controversy concerns, among others, the termsand conditions of employment or a "change" or "arrangement" thereof ( ibid). Putdifferently, and as defined by law, the existence of a labor dispute is not negative bythe fact that the plaintiffs and defendants do not stand in the proximate relation ofemployer and employee.

That a labor dispute, as defined by the law, does exist herein is evident. At bottom,what the Union seeks is to regularize the status of the employees contracted byLipercon and D'Rite in effect, that they be absorbed into the working unit of SanMig.This matter definitely dwells on the working relationship between said employees vis-a-vis SanMig. Terms, tenure and conditions of their employment and thearrangement of those terms are thus involved bringing the matter within the purviewof a labor dispute. Further, the Union also seeks to represent those workers, whohave signed up for Union membership, for the purpose of collective bargaining.SanMig, for its part, resists that Union demand on the ground that there is noemployer-employee relationship between it and those workers and because thedemand violates the terms of their CBA. Obvious then is that representation and

association, for the purpose of negotiating the conditions of employment are alsoinvolved. In fact, the injunction sought by SanMig was precisely also to prevent suchrepresentation. Again, the matter of representation falls within the scope of a labordispute. Neither can it be denied that the controversy below is directly connected withthe labor dispute already taken cognizance of by t he NCMB-DOLE (NCMB-NCR- NS-01- 021-89; NCMB NCR NS-01-093-83).

Whether or not the Union demands are valid; whether or not SanMig's contracts withLipercon and D'Rite constitute "labor-only" contracting and, therefore, a regularemployer-employee relationship may, in fact, be said to exist; whether or not theUnion can lawfully represent the workers of Lipercon and D'Rite in their demandsagainst SanMig in the light of the existing CBA; whether or not the notice of strike

was valid and the strike itself legal when it was allegedly instigated to compel theemployer to hire strangers outside the working unit; those are issues the resolutionof which call for the application of labor laws, and SanMig's cause's of action in theCourt below are inextricably linked with those issues.

The precedent in Layno vs. de la Cruz (G.R. No. L-29636, 30 April 1965, 13 SCRA738) relied upon by SanMig is not controlling as in that case there was nocontroversy over terms, tenure or conditions, of employment or the representation ofemployees that called for the application of labor laws. In that case, what t hepetitioning union demanded was not a change in working terms and conditions, or therepresentation of the employees, but that its members be hired as stevedores in theplace of the members of a rival union, which petitioners wanted discharged

notwithstanding the existing contract of the arrastre company with the latter union.Hence, the ruling therein, on the basis of those facts unique to that case, that such ademand could hardly be considered a labor dispute.

As the case is indisputably linked with a l abor dispute, jurisdiction belongs to thelabor tribunals. As explicitly provided for in Article 217 of the Labor Code, prior to itsamendment by R.A. No. 6715 on 21 March 1989, since the suit below was institutedon 6 March 1989, Labor Arbiters have original and exclusive jurisdiction to hear anddecide the following cases involving all workers including "1. unfair labor practicecases; 2. those that workers may file involving wages, hours of work and other termsand conditions of employment; ... and 5. cases arising from any violation of Article265 of this Code, including questions involving the legality of striker and lockouts. ..."Article 217 lays down the plain command of the law.

The claim of SanMig that the action below is for damages under Articles 19, 20 and21 of the Civil Code would not suffice to keep the case within the jurisdictional

boundaries of regular Courts. That claim for damages is interwoven with a labordispute existing between the parties and would have to be ventilated before theadministrative machinery established for the expeditious settlement of those disputes.To allow the action filed below to prosper would bring about "split jurisdiction" whichis obnoxious to the orderly administration of justice (Philippine Communications,Electronics and Electricity Workers Federation vs. Hon. Nolasco, L-24984, 29 July1968, 24 SCRA 321).

We recognize the proprietary right of SanMig to exercise an inherent managementprerogative and its best business judgment to determine whether it should contractout the performance of some of its work to independent contractors. However, therights of all workers to self-organization, collective bargaining and negotiations, andpeaceful concerted activities, including the right to strike in accordance with law(Section 3, Article XIII, 1987 Constitution) equally call for recognition and protection.Those contending interests must be placed in proper perspective and equilibrium.

WHEREFORE, the Writ of certiorariis GRANTED and the Orders of respondentJudge of 25 March 1989 and 29 March 1989 are SET ASIDE. The Writ of Prohibitionis GRANTED and respondent Judge is enjoined from taking any further action in CivilCase No. 57055 except for the purpose of dismissing it. The status quo antedeclaration of strike ordered by the Court on 24 May 1989 shall be observed pendingthe proceedings in the National Conciliation Mediation Board-Department of Laborand Employment, docketed as NCMB-NCR-NS-01-02189 and NCMB-NCR-NS-01-093-83. No costs. SO ORDERED.

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G.R. No. 172013 October 2, 2009

PATRICIA HALAGUEA, MA. ANGELITA L. PULIDO, MA. TERESITA P.SANTIAGO, MARIANNE V. KATINDIG, BERNADETTE A. CABALQUINTO,LORNA B. TUGAS, MARY CHRISTINE A. VILLARETE, CYNTHIA A. STEHMEIER,ROSE ANNA G. VICTA, NOEMI R. CRESENCIO, and other flight attendants ofPHILIPPINE AIRLINES, Petitioners,vs.PHILIPPINE AIRLINES INCORPORATED, Respondent.

D E C I S I O N

PERALTA, J.:

Before this Court is a petition for review on certiorariunder Rule 45 of the Rules ofCourt seeking to annul and set aside the Decision1and the Resolution2of the Courtof Appeals (CA) in CA-G.R. SP. No. 86813.

Petitioners were employed as female flight attendants of respondent PhilippineAirlines (PAL) on different dates prior to November 22, 1996. They are members ofthe Flight Attendants and Stewards Association of the Philippines (FASAP), a labororganization certified as the sole and exclusive certified as the sole and exclusivebargaining representative of the flight attendants, flight stewards and pursers ofrespondent.

On July 11, 2001, respondent and FASAP entered into a Collective Bargaining

Agreement3 incorporating the terms and conditions of their agreement for the years2000 to 2005, hereinafter referred to as PAL-FASAP CBA.

Section 144, Part A of the PAL-FASAP CBA, provides that:

A. For the Cabin Attendants hired before 22 November 1996:

x x x x

3. Compulsory Retirement

Subject to the grooming standards provisions of this Agreement, compulsoryretirement shall be fifty-five (55) for females and sixty (60) for males. x x x.

In a letter dated July 22, 2003,4petitioners and several female cabin crewsmanifested that the aforementioned CBA provision on compulsory retirement isdiscriminatory, and demanded for an equal treatment with their male counterparts.This demand was reiterated in a letter5by petitioners' counsel addressed torespondent demanding the removal of gender discrimination provisions in the comingre-negotiations of the PAL-FASAP CBA.

On July 12, 2004, Robert D. Anduiza, President of FASAP submitted their 2004-2005CBA proposals6and manifested their willingness to commence the collectivebargaining negotiations between the management and the association, at thesoonest possible time.

On July 29, 2004, petitioners filed a Special Civil Action for Declaratory Relief withPrayer for the Issuance of Temporary Restraining Order and Writ of PreliminaryInjunction7with the Regional Trial Court (RTC) of Makati City, Branch 147, docketedas Civil Case No. 04-886, against respondent for the invalidity of Section 144, Part Aof the PAL-FASAP CBA. T he RTC set a hearing on petitioners' application for a TROand, thereafter, required the parties to submit their respective memoranda.

On August 9, 2004, the RTC issued an Order8upholding its jurisdiction over thepresent case. The RTC reasoned that:

In the instant case, the thrust of the Petition is Sec. 144 of the subject CBA which is

allegedly discriminatory as it discriminates against female flight attendants, inviolation of the Constitution, the Labor Code, and the CEDAW. The allegations in thePetition do not make out a labor dispute arising from employer-employee relationshipas none is shown to exist. This case is not directed specifically against respondentarising from any act of the latter, nor does it involve a claim against the respondent.Rather, this case seeks a declaration of the nullity of the questioned provision of theCBA, which is within the Court's competence, with the allegations in the Petitionconstituting the bases for such relief sought.

The RTC issued a TRO on August 10, 2004,9enjoining the respondent forimplementing Section 144, Part A of the PAL-FASAP CBA.

The respondent filed an omnibus motion10seeking reconsideration of the orderoverruling its objection to the jurisdiction of the RTC the lifting of the TRO. It furtherprayed that the (1) petitioners' application for the issuance of a writ of preliminaryinjunction be denied; and (2) the petition be dismissed or the proceedings in this case

be suspended.

On September 27, 2004, the RTC issued an Order11directing the issuance of a writ ofpreliminary injunction enjoining the respondent or any of i ts agents andrepresentatives from further implementing Sec. 144, Part A of the PAL-FASAP CBApending the resolution of the case.

Aggrieved, respondent, on October 8, 2004, filed a Petition f or Certiorari andProhibition with Prayer for a Temporary Restraining Order and Writ of PreliminaryInjunction12with the Court of Appeals (CA) praying that the order of the RTC, whichdenied its objection to its jurisdiction, be annuled and set aside for having beenissued without and/or with grave abuse of discretion amounting to lack of jurisdiction.

The CA rendered a Decision, dated August 31, 2005, granting the respondent'spetition, and ruled that:

WHEREFORE, the respondent court is by us declared to have NO JURISDICTIONOVER THE CASE BELOW and, consequently, all the proceedings, orders andprocesses it has so far issued therein are ANNULED and SET ASIDE. Respondentcourt is ordered to DISMISS its Ci vil Case No. 04-886.

SO ORDERED.

Petitioner filed a motion for reconsideration,13 which was denied by the CA in itsResolution dated March 7, 2006.

Hence, the instant petition assigning the following error:

THE COURT OF APPEALS' CONCLUSION THAT THE SUBJECT MATTER IS ALABOR DISPUTE OR GRIEVANCE IS CONTRARY TO LAW ANDJURISPRUDENCE.

The main issue in this case is whether the RTC has jurisdiction over the petitioners'action challenging the legality or constitutionality of the provisions on the compulsoryretirement age contained in the CBA between respondent PAL and FASAP.

Petitioners submit that the RTC has jurisdiction in all civil actions in which the subjectof the litigation is i ncapable of pecuniary estimation and in all cases not within theexclusive jurisdiction of any court, tri bunal, person or body exercising judicial orquasi-judicial functions. The RTC has the power to adjudicate all controversiesexcept those expressly witheld from the plenary powers of the court. Accordingly, ithas the power to decide issues of constitutionality or legality of the provisions ofSection 144, Part A of t he PAL-FASAP CBA. As the issue involved is constitutional incharacter, the labor arbiter or the National Labor Relations Commission (NLRC) hasno jurisdiction over the case and, thus, the petitioners pray that judgment be renderedon the merits declaring Section 144, Part A of the PAL-FASAP CBA null and void.

Respondent, on the other hand, alleges that the labor tribunals have jurisdiction overthe present case, as the controversy partakes of a labor dispute. The disputeconcerns the terms and conditions of petitioners' employment in PAL, specificallytheir retirement age. The RTC has no jurisdiction over the subject matter ofpetitioners' petition for declaratory relief because the Voluntary Arbitrator or panel ofVoluntary Arbitrators have original and exclusive jurisdiction to hear and decide all

unresolved grievances arising from the interpretation or implementation of the CBA.Regular courts have no power to set and fix the terms and conditions of employment.Finally, respondent alleged that petitioners' prayer before this Court to resolve theirpetition for declaratory relief on the merits is procedurally improper and baseless.

The petition is meritorious.

Jurisdiction of the court is determined on the basis of the material allegations of thecomplaint and the character of the relief prayed for irrespective of whether plaintiff isentitled to such relief.14

In the case at bar, the allegations in the petition for declaratory relief plainly show thatpetitioners' cause of action is the annulment of Section 144, Part A of the PAL-FASAP CBA. The pertinent portion of the petition recites:

CAUSE OF ACTION

24. Petitioners have the constitutional right to fundamental equality withmen under Section 14, Article II, 1987 of t he Constitution and, within thespecific context of this case, with the male cabin attendants of PhilippineAirlines.

26. Petitioners have the statutory ri ght to equal work and employmentopportunities with men under Article 3, Presidential Decree No. 442,The Labor Code and, within the specific context of this case, with themale cabin attendants of Philippine Airlines.

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27. It is unlawful, even criminal, for an employer to discriminate againstwomen employees with respect to terms and conditions of employmentsolely on account of their sex under Article 135 of the Labor Code asamended by Republic Act No. 6725 or the Act Strengthening Prohibitionon Discrimination Against Women.

28. This discrimination against Petitioners is likewise against theConvention on the Elimination of All Forms of Discrimination AgainstWomen (hereafter, "CEDAW"), a multilateral convention that thePhilippines ratified in 1981. The Government and i ts agents, includingour courts, not only must condemn all forms of discrimination againstwomen, but must also implement measures towards its elimination.

29. This case is a matter of public interest not only because ofPhilippine Airlines' violation of the Constitution and existing laws, butalso because it highlights the fact that twenty-three years after thePhilippine Senate ratified the CEDAW, discrimination against womencontinues.

31. Section 114, Part A of the PAL-FASAP 2000-20005 CBA oncompulsory retirement from service is invidiously discriminatory againstand manifestly prejudicial to Petitioners because, they are compelled toretire at a lower age (fift y-five (55) relative to their male counterparts(sixty (60).

33. There is no reasonable, much less lawful, basis for PhilippineAirlines to distinguish, differentiate or classify cabin attendants on the

basis of sex and thereby arbitrarily set a l ower compulsory retirementage of 55 for Petitioners for the sole reason that they are women.

37. For being patently unconstitutional and unlawful, Section 114, Part Aof the PAL-FASAP 2000-2005 CBA must be declared invalid andstricken down to the extent that it discriminates against petitioner.

38. Accordingly, consistent with the constitutional and statutoryguarantee of equality between men and women, Petitioners should beadjudged and declared entitled, like their male counterparts, to workuntil they are sixty (60) years old.

PRAYER

WHEREFORE, it is most respectfully prayed that the Honorable Court:

c. after trial on the merits:

(I) declare Section 114, Part A of the PAL-FASAP 2000-2005 CBA INVALID, NULLand VOID to the extent that it discriminates against Petitioners; x x x x

From the petitioners' allegations and relief prayed for in its petition, i t is clear that theissue raised is whether Section 144, Part A of the PAL-FASAP CBA is unlawful andunconstitutional. Here, the petitioners' primary relief in Civil Case No. 04-886 is theannulment of Section 144, Part A of the PAL-FASAP CBA, which allegedlydiscriminates against them for being female flight attendants. The subject of litigation

is incapable of pecuniary estimation, exclusively cognizable by the RTC, pursuant toSection 19 (1) of Batas Pambansa Blg. 129, as amended.15Being an ordinary civilaction, the same is beyond the jurisdiction of labor tribunals.

The said issue cannot be resolved solely by applying the Labor Code. Rather, itrequires the application of the Constitution, labor statutes, law on contracts and theConvention on the Elimination of All Forms of Discrimination Against Women,16andthe power to apply and interpret the constitution and CEDAW is within the jurisdictionof trial courts, a court of general jurisdiction. In Georg Grotjahn GMBH & Co. v.Isnani,17this Court held that not every dispute between an employer and employeeinvolves matters that only labor arbiters and the NLRC can resolve in the exercise oftheir adjudicatory or quasi-judicial powers. The jurisdiction of labor arbiters and the

NLRC under Article 217 of the Labor Code is li mited to disputes arising from anemployer-employee relationship which can only be resolved by reference to theLabor Code, other labor statutes, or their collective bargaining agreement.

Not every controversy or money claim by an employee against the employer or vice-versa is within the exclusive jurisdiction of the labor arbiter. Actions betweenemployees and employer where the employer-employee relationship is merelyincidental and the cause of action precedes from a different source of obligation iswithin the exclusive jurisdiction of the regular court.18Here, the employer-employeerelationship between the parties is merely incidental and the cause of actionultimately arose from different sources of obligation, i.e., the Constitution andCEDAW.

Thus, where the principal relief sought is to be resolved not by reference to the LaborCode or other labor relations statute or a collective bargaining agreement but by thegeneral civil law, the jurisdiction over the dispute belongs to the regular courts of

justice and not to the labor arbiter and the NLRC. In such situations, resolution of thedispute requires expertise, not in labor management relations nor in wage structuresand other terms and conditions of employment, but rather in the application of thegeneral civil law. Clearly, such claims fall outside the area of competence orexpertise ordinarily ascribed to labor arbiters and the NLRC and the rationale forgranting jurisdiction over such claims to these agencies disappears.19

If We divest the regular courts of jurisdiction over the case, then which tri bunal orforum shall determine the constitutionality or l egality of the assailed CBA provision?

This Court holds that the grievance machinery and voluntary arbitrators do not havethe power to determine and settle the issues at hand. They have no jurisdiction andcompetence to decide constitutional issues relative to the questioned compulsoryretirement age. Their exercise of jurisdiction is futile, as it is like vesting power tosomeone who cannot wield it.

In Gonzales v. Climax Mining Ltd.,20this Court affirmed the jurisdiction of courts overquestions on constitutionality of contracts, as the same involves the exercise ofjudicial power. The Court said:

Whether the case involves void or voidable contracts is still a judicial question. Itmay, in some instances, involve questions of fact especially with regard to thedetermination of the circumstances of the execution of the contracts. But theresolution of the validity or voidness of the contracts remains a legal or judicialquestion as it requires the exercise of judicial function. It requires the ascertainmentof what laws are applicable to the dispute, the interpretation and application of thoselaws, and the rendering of a judgment based thereon. Clearly, the dispute is not a

mining conflict. It is essentially judicial. The complaint was not merely for thedetermination of rights under the mining contracts since the very validity of thosecontracts is put in issue.

In Saura v. Saura, Jr.,21this Court emphasized the primacy of the regular court'sjudicial power enshrined in the Constitution that is true that the trend is towardsvesting administrative bodies like the SEC with the power to adjudicate matterscoming under their particular specialization, to insure a more knowledgeable solutionof the problems submitted to them. This would also relieve the regular courts of asubstantial number of cases that would otherwise swell their already cloggeddockets. But as expedient as this policy may be, it should not deprive thecourts of justice of their power to decide ordinary cases in accordance with the

general laws that do not require any particular expertise or training to interpretand apply. Otherwise, the creeping take-over by the administrative agencies ofthe judicial power vested in the courts would render the judiciary virtuallyimpotent in the discharge of the duties assigned to it by the Constitution .

To be sure, in Rivera v. Espiritu,22after Philippine Airlines (PAL) and PAL EmployeesAssociation (PALEA) entered into an agreement, which i ncludes the provision tosuspend the PAL-PALEA CBA for 10 years, several employees questioned its validityvia a petition for certiorari directly to the Supreme Court. They said that thesuspension was unconstitutional and contrary to public policy. Petitioners submit thatthe suspension was inordinately long, way beyond the maximum statutory life of 5years for a CBA provided for in Article 253-A of the Labor Code. By agreeing to a 10-year suspension, PALEA, in effect, abdicated the workers' constitutional right tobargain for another CBA at the mandated time.

In that case, this Court denied the petition for certiorari, ruling that there is available

to petitioners a plain, speedy, and adequate remedy in the ordinary course of law.The Court said that while the petition was denominated as one for certiorari andprohibition, its object was actually the nullification of the PAL-PALEA agreement. Assuch, petitioners' proper remedy is an ordinary civil action for annulment of contract,an action which properly falls under the jurisdiction of the regional trial courts.

The change in the terms and conditions of employment, should Section 144 of theCBA be held invalid, is but a necessary and unavoidable consequence of theprincipal relief sought, i.e., nullification of the alleged discriminatory provision in theCBA. Thus, it does not necessarily follow that a resolution of controversy that wouldbring about a change in the terms and conditions of employment is a labor dispute,cognizable by labor tribunals. It is unfair to preclude petitioners from invoking the trialcourt's jurisdiction merely because it may eventually result into a change of the termsand conditions of employment. Along that line, the trial court is not asked to set andfix the terms and conditions of employment, but is called upon to determine whetherCBA is consistent with the laws.

Although the CBA provides for a procedure for the adjustment of grievances, suchreferral to the grievance machinery and thereafter to voluntary arbitration would beinappropriate to the petitioners, because the union and the management haveunanimously agreed to the terms of the CBA and their interest is unified.

In Pantranco North Express, Inc., v. NLRC,23this Court held that:

x x x Hence, only disputes involving the union and the company shall be referred tothe grievance machinery or voluntary arbitrators.

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In the instant case, both the union and the company are united or have come to anagreement regarding the dismissal of private respondents. No grievance betweenthem exists which could be brought to a grievance machinery. The problem ordispute in the present case is between the union and the company on t he one handand some union and non-union members who were dismissed, on the other hand.The dispute has to be settled before an impartial body. The grievance machinery withmembers designated by the union and the company cannot be expected to beimpartial against the dismissed employees. Due process demands that the dismissedworkers grievances be ventilated before an impartial body. x x x .

Applying the same rationale to the case at bar, it cannot be said that the "dispute" isbetween the union and petitioner company because both have previously agreed

upon the provision on "compulsory retirement" as embodied in the CBA. Also, it wasonly private respondent on his own who questioned the compulsory retirement. x x x.

In the same vein, the dispute in the case at bar is not between FASAP andrespondent PAL, who have both previously agreed upon the provision on thecompulsory retirement of female flight attendants as embodied in the CBA. Thedispute is between respondent PAL and several female flight attendants whoquestioned the provision on compulsory retirement of female flight attendants. Thus,applying the principle in the aforementioned case cited, referral to the grievancemachinery and voluntary arbitration would not serve the interest of the petitioners.

Besides, a referral of the case to the grievance machinery and to the voluntaryarbitrator under the CBA would be futile because respondent already implementedSection 114, Part A of PAL-FASAP CBA when several of its female flight attendantsreached the compulsory retirement age of 55.

Further, FASAP, in a letter dated July 12, 2004, addressed to PAL, submitted itsassociation's bargaining proposal for the remaining period of 2004-2005 of the PAL-FASAP CBA, which includes the renegotiation of the subject Section 144. However,FASAP's attempt to change the questioned provision was shallow and superficial, tosay the least, because it exerted no further efforts to pursue its proposal. Whenpetitioners in their individual capacities questioned the legality of the compulsoryretirement in the CBA before the trial court, there was no showing that FASAP, astheir representative, endeavored to adjust, settle or negotiate with PAL for theremoval of the difference in compulsory age retirement between its female and maleflight attendants, particularly those employed before November 22, 1996. WithoutFASAP's active participation on behalf of its female flight attendants, the utilization ofthe grievance machinery or voluntary arbitration would be pointless.

The trial court in this case is not asked to interpret Section 144, Part A of the PAL-FASAP CBA. Interpretation, as defined in Black's Law Dictionary, is the art of orprocess of discovering and ascertaining the meaning of a statute, will, contract, or

other written document.24The provision regarding the compulsory retirement of flightattendants is not ambiguous and does not require interpretation. Neither is there anyquestion regarding the implementation of the subject CBA provision, because themanner of implementing the same is clear in itself. The only controversy lies in itsintrinsic validity.

Although it is a rule that a contract freely entered between the parties should berespected, since a contract is the law between the parties, said rule is not absolute.

In Pakistan International Airlines Corporation v. Ople,25this Court held that:

The principle of party autonomy in contracts is not, however, an absolute principle.The rule in Article 1306, of our Civil Code is that the contracting parties may establishsuch stipulations as they may deem convenient, "provided they are not contrary tolaw, morals, good customs, public order or public policy." Thus, counter-balancing theprinciple of autonomy of contracting parties is the equally general rule that provisionsof applicable law, especially provisions relating to matters affected with public policy,are deemed written into the contract. Put a little differently, the governing principle isthat parties may not contract away applicable provisions of law especially peremptoryprovisions dealing with matters heavily impressed with public interest. The lawrelating to labor and employment is clearly such an area and parties are not at libertyto insulate themselves and their relationships from the impact of labor laws andregulations by simply contracting with each other.

Moreover, the relations between capital and labor are not merely contractual. Theyare so impressed with public interest that labor contracts must yield to the commongood.x x x26The supremacy of the law over contracts is explained by the fact thatlabor contracts are not ordinary contracts; these are imbued with public interest andtherefore are subject to the police power of the state.27 It should not be taken to meanthat retirement provisions agreed upon in the CBA are absolutely beyond the ambit ofjudicial review and nullification. A CBA, as a labor contract, is not merely contractualin nature but impressed with public interest. If the retirement provisions in the CBArun contrary to law, public morals, or public policy, such provisions may very well bevoided.28

Finally, the issue in the petition for certiorari brought before the CA by the respondentwas the alleged exercise of grave abuse of discretion of the RTC in takingcognizance of the case for declaratory relief. When the CA annuled and set aside theRTC's order, petitioners sought relief before this Court through the instant petition forreview under Rule 45. A perusal of the petition before Us, petitioners pray for thedeclaration of the alleged discriminatory provision in the CBA against its female flightattendants.

This Court is not persuaded. The rule is settled that pure questions of fact may not bethe proper subject of an appeal by certiorari under Rule 45 of the Revised Rules ofCourt. This mode of appeal is generally limited only to questions of law which mustbe distinctly set forth in the petition. T he Supreme Court is not a trier of facts.29

The question as to whether said Section 114, Part A of the PAL-FASAP CBA isdiscriminatory or not is a question of fact. This would require the presentation andreception of evidence by the parties in order for the trial court to ascertain the facts ofthe case and whether said provision violates the Constitution, statutes and treaties. Afull-blown trial is necessary, which jurisdiction to hear the same is properly lodgedwith the the RTC. Therefore, a remand of this case to the RTC for the properdetermination of the merits of the petition for declaratory relief is just and

proper.1avvphi1

WHEREFORE, the petition is PARTLY GRANTED. The Decision and Resolution ofthe Court of Appeals, dated August 31, 2005 and March 7, 2006, respectively, in CA-G.R. SP. No. 86813 are REVERSED and SET ASIDE. The Regional Trial Court ofMakati City, Branch 147 is DIRECTED to continue the proceedings in Civil Case No.04-886 with deliberate dispatch.

SO ORDERED.

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Labrel - Cases - Set 1