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1. Peoples Broadcasting v. Sec. of DOLEG.R. no. 179652. May 8, 2009 Facts: Jandeleon Juezan (respondent) filed a complaint against People¶s Broadcasting Service, Inc. (BomboRadyo Phils., Inc) (petitioner) for illegal deduction, non-payment of service incentive leave, 13 thmonth pay, premium pay for holiday and rest day and illegal diminution of benefits, delayed payment of wages and non-coverage of SSS, PAG-IBIG and Philhealth before the Department of Labor and Employment (DOLE)Regional Office No. VII,Cebu City.On the basis of the complaint, the DOLE conducted a plant level inspection on 23 September 2003. Inthe Inspection Report Form, the Labor Inspector wrote under the heading ³Findings/Recommendations´ ³non-diminution of benefits´ and ³Note: Respondent deny employer- employee relationship with the complainant- see Notice of Inspection results.´Petitioner was required to rectify/restitute the violations within five (5) days from receipt. No rectificationwas effected by petitioner; thus, summary investigations were conducted, with the parties eventually ordered tosubmit their respective position papers.In his Order dated 27 February 2004, DOLE Regional Director Atty. Rodolfo M. Sabulao (RegionalDirector) ruled that respondent is an employee of petitioner, and that the former is entitled to his money claimsamounting to P203, 726.30. Petitioner sought reconsideration of the Order, claiming that the Regional Director gavecredence to the documents offered by respondent without examining the originals, but at the same time he missed or failed to consider petitioner¶s evidence. Petitioner¶s motion for reconsideration was denied. On appeal to theDOLE Secretary, petitioner denied once more the existence of employer-employee relationship. In its Order dated 27 January 2005, the Acting DOLE Secretary dismissed the appeal on the ground that petitioner did not post acash or surety bond and instead submitted a Deed of Assignment of Bank Deposit. Petitioner maintained that there isno employer-employee relationship had ever existed between it and respondent because it was the drama directorsand

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1. Peoples Broadcasting v. Sec. of DOLEG.R. no. 179652. May 8, 2009

Facts:

Jandeleon Juezan (respondent) filed a complaint against People¶s Broadcasting Service, Inc. (BomboRadyo Phils., Inc) (petitioner) for illegal deduction, non-payment of service incentive leave, 13

thmonth pay, premium pay for holiday and rest day and illegal diminution of benefits, delayed payment of wages and non-coverage of SSS, PAG-IBIG and Philhealth before the Department of Labor and Employment (DOLE)Regional Office No. VII,Cebu City.On the basis of the complaint, the DOLE conducted a plant level inspection on 23 September 2003. Inthe Inspection Report Form,

the Labor Inspector wrote under the heading ³Findings/Recommendations´ ³non-diminution of benefits´ and ³Note: Respondent deny employer-employee relationship with the complainant- see Notice of Inspection results.´Petitioner was required to rectify/restitute the violations within five (5) days from receipt. No rectificationwas effected by petitioner; thus, summary investigations were conducted, with the parties eventually ordered tosubmit their respective position papers.In his Order dated 27 February 2004, DOLE Regional Director Atty. Rodolfo M. Sabulao (RegionalDirector) ruled that respondent is an employee of petitioner, and that the former is entitled to his money claimsamounting to P203, 726.30. Petitioner sought reconsideration of the Order, claiming that the Regional Director gavecredence to the documents offered by respondent without examining the originals, but at the same time he missed or failed to consider petitioner¶s evidence. Petitioner¶s motion for reconsideration was denied.

On appeal to theDOLE Secretary, petitioner denied once more the existence of employer-employee relationship. In its Order dated 27 January 2005, the Acting DOLE Secretary dismissed the appeal on the ground that petitioner did not post acash or surety bond and instead submitted a Deed of Assignment of Bank Deposit. Petitioner maintained that there isno employer-employee relationship had ever existed between it and respondent because it was the drama directorsand producers who paid, supervised and disciplined respondent. It also added that the case was beyond the jurisdiction of the DOLE and should have been considered by the labor arbiter because respondent¶s claimexceeded P5,000.00.

Issue:

Does the Secretary of Labor have the power to determine the existence of an employer-employeerelationship?

Held:

No.Clearly the law accords a prerogative to the NLRC over the claim when the employer-employee relationshiphas terminated or such relationship has not arisen at all. The reason is obvious. In the second situation especially,the existence of an employer-employee relationship is a matter which is not easily determinable from an ordinaryinspection, necessarily so, because the elements of such a relationship are not verifiable from a mere ocular examination. The intricacies and implications of an employer-employee relationship demand that the level of scrutiny should be far above the cursory and themechanical. While documents, particularly documents found in the employer¶s office are the primary sourcematerials, what may prove decisive are factors related to the history of the employer¶s business operations, itscurrent state as well as accepted contemporary practices in the industry. More often than not, the question of

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employer-employee relationship becomes a battle of evidence, the determination of which should be comprehensiveand intensive and therefore best left to the specialized quasi-judicial body that is the NLRC.

It can be assumed that the DOLE in the exercise of its visitorial and enforcement power somehow has tomake a determination of the existence of an employer-employee relationship. Such prerogativaldetermination, however, cannot be coextensive with the visitorial and enforcement power itself. Indeed, suchdetermination is merely preliminary, incidental and collateral to the DOLE¶s primary function of enforcinglabor standards provisions. The determination of the existence of employer-employee relationship is stillprimarily lodged with the NLRC. This is the meaning of the clause ³in cases where the relationship of employer-employee still exists´ in Art. 128 (b)

2. REFORMIST UNION OF R.B. LINER, INC., HEVER DETROS, ET AL., petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, R.B. LINER, INC., BERNITA DEJERO, FELIPE DEJERO, RODELIO DEJERO, ANA TERESA DEJERO, and RODELIO RYAN DEJERO, respondents.

Labor Law; Compulsory Arbitration; Strikes; When an employer accedes to the peaceful settlement brokered by the NLRC, agreeing to accept all employees who had not yet returned to work, it waives the issue of the illegality of the strike.—The private respondents can no longer contest the legality of the strike held by the petitioners on 13 December 1989, as the private respondents themselves sought compulsory arbitration in order to resolve that very issue, hence their letter to the Labor Secretary read, in part: This is to request your good office to certify for compulsory arbitration or to assume jurisdiction over the labor dispute (strike continuing) between R.B. Liner, Inc. . . . and the Lakas Manggagawa sa Pilipinas . . . The current strike by Lakas which started on December 13, 1989 even before Certification Election could be held could not be resolved by the NCR Conciliation-Mediation Division after six meetings/conferences between the parties. The dispute or strike was settled when the company and the union entered into an agreement on 19 January 1990 where the private respondents agreed to accept all employees who, by then, had not yet returned to work. By acceding to the peaceful settlement brokered by the NLRC, the private respondents waived the issue of the illegality of the strike.

Same; Same; Same; Words and Phrases; Compulsory Arbitration, Defined.—The very nature of compulsory arbitration makes the settlement binding upon the private respondents, for compulsory arbitration has been defined both as “the process of settlement of labor disputes by a government agency which has the authority to investigate and to make an award which is binding on all the parties,” and as a mode of arbitration where the parties are “compelled to accept the resolution of their dispute through arbitration by a third party.” Clearly then, the legality of the strike could no longer be reviewed by the Labor Arbiter, much less by the NLRC, as [Reformist Union of R.B. Liner, Inc. vs. NLRC, 266 SCRA 713(1997)] this had already been resolved. It was the sole issue submitted for compulsory arbitration by the private respondents, as is obvious from the portion of their letter quoted above. The case certified by the Labor Secretary to the NLRC was dismissed after the union and the company drew up the agreement mentioned earlier. This conclusively disposed of the strike issue.

Same; Same; Same; Jurisdiction; Neither the Labor Arbiter nor the NLRC could review the same issue passed upon in a certified case, and their decisions to the contrary are rendered in grave abuse of discretion amounting to excess of jurisdiction.—The Labor Code provides that the decision in

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compulsory arbitration proceedings “shall be final and executory ten (10) calendar days after receipt thereof by the parties.” The parties were informed of the dismissal of the case in a letter dated 14 February 1990, and while nothing in the record indicates when the said letter was received by the parties, it is reasonable to infer that more than ten days elapsed—hence, the NLRC decision had already become final and executory—before the private respondents filed their complaint with the Labor Arbiter on 13 July 1990. A final judgment is no longer susceptible to change, revision, amendment, or reversal. Neither the Labor Arbiter nor the NLRC, therefore, could review the same issue passed upon in NLRC Certified Case No. 0542, and their decisions to the contrary have been rendered in grave abuse of discretion amounting to excess of jurisdiction.

Same; Same; Same; Compromise Agreements; While the Supreme Court is not abandoning the rule that “unfair labor practice acts are beyond and outside the sphere of compromises,” the agreement in the instant case was voluntarily entered into and represents a reasonable settlement, thus binding upon the parties.—The agreement entered into by the company and the union, moreover, was in the nature of a compromise agreement, i.e., “an agreement between two or more persons, who, for preventing or putting an end to a lawsuit, adjust their difficulties by mutual consent in the manner which they agree on, and which everyone of them prefers to the hope of gaining, balanced by the danger of losing.” Thus, in the agreement, each party made concessions in favor of the other to avoid a protracted litigation. While we do not abandon the rule that “unfair labor practice acts are beyond and outside the sphere of compromises,” the agreement herein was voluntarily entered into and represents a reasonable settlement, thus it binds the parties. [Reformist Union of R.B. Liner, Inc. vs. NLRC, 266 SCRA 713(1997)] Same; Illegal Dismissals; The burden of proving just and valid cause for dismissing employees from employment rests on the employer, and the latter’s failure to do so results in a finding that the dismissal was unfounded.—The only barrier then to the petitionersemployees’ reinstatement is their defiance of the Labor Secretary’s return-to-work order, which the private respondents claim as one reason to validly dismiss the petitioners-employees. We disagree, however, with the finding that Lakas/Reformist violated the said order. It is upon the private respondents to substantiate the aforesaid defiance, as the burden of proving just and valid cause for dismissing employees from employment rests on the employer, and the latter’s failure to do so results in a finding that the dismissal was unfounded. The private respondents fell short of discharging this burden.

Same; Same; Return-to-Work Orders; Grave Abuse of Discretion; Where the employer fails to satisfactorily establish any violation of the Labor Secretary’s return-to-work order, any contrary finding by the Labor Arbiter and the NLRC is committed with grave abuse of discretion.—The private respondents thus failed to satisfactorily establish any violation of the Labor Secretary’s return-to-work order, and consequently, the Labor Arbiter’s and the NLRC’s contrary finding is not anchored on substantial evidence. Grave abuse of discretion was thus committed once more.

Same; Same; Same; Reinstatement; Where there was, in fact, no defiance of the Labor Secretary’s return-to-work order, and no cause to decree the employees’ dismissal in the first instance, reinstatement of the dismissed employees can be the only outcome.—As regards the illegal lockout alleged by the petitioners, we agree with the NLRC’s finding that the petitioners had sufficient basis to believe in good faith that the private respondents were culpable. The NLRC found this circumstance to justify the petitioners-employees’ reinstatement; we add that since there was, in fact, no defiance of the Labor Secretary’s

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return-to-work order, and no cause to decree the petitioners-employees’ dismissal in the first instance, reinstatement of the dismissed employees can be the only outcome in this case.

Same; Same; Same; Same; Separation Pay; Separation pay, equivalent to one month’s salary for every year of service, is awarded as an alternative to reinstatement when the latter is no longer an option, and is computed from the commencement of employment up to the time of termination, including the imputed service for which the [Reformist Union of R.B. Liner, Inc. vs. NLRC, 266 SCRA 713(1997)]

Same; Illegal Dismissals; The burden of proving just and valid cause for dismissing employees from employment rests on the employer, and the latter’s failure to do so results in a finding that the dismissal was unfounded.—The only barrier then to the petitioners employees’ reinstatement is their defiance of the Labor Secretary’s return-to-work order, which the private respondents claim as one reason to validly dismiss the petitioners-employees. We disagree, however, with the finding that Lakas/Reformist violated the said order. It is upon the private respondents to substantiate the aforesaid defiance, as the burden of proving just and valid cause for dismissing employees from employment rests on the employer, and the latter’s failure to do so results in a finding that the dismissal was unfounded. The private respondents fell short of discharging this burden.

Same; Same; Return-to-Work Orders; Grave Abuse of Discretion; Where the employer fails to satisfactorily establish any violation of the Labor Secretary’s return-to-work order, any contrary finding by the Labor Arbiter and the NLRC is committed with grave abuse of discretion.—The private respondents thus failed to satisfactorily establish any violation of the Labor Secretary’s return-to-work order, and consequently, the Labor Arbiter’s and the NLRC’s contrary finding is not anchored on substantial evidence. Grave abuse of discretion was thus committed once more.

Same; Same; Same; Reinstatement; Where there was, in fact, no defiance of the Labor Secretary’s return-to-work order, and no cause to decree the employees’ dismissal in the first instance, reinstatement of the dismissed employees can be the only outcome.—As regards the illegal lockout alleged by the petitioners, we agree with the NLRC’s finding that the petitioners had sufficient basis to believe in good faith that the private respondents were culpable. The NLRC found this circumstance to justify the petitioners-employees’ reinstatement; we add that since there was, in fact, no defiance of the Labor Secretary’s return-to-work order, and no cause to decree the petitioners-employees’ dismissal in the first instance, reinstatement of the dismissed employees can be the only outcome in this case.

Same; Same; Same; Same; Separation Pay; Separation pay, equivalent to one month’s salary for every year of service, is awarded as an alternative to reinstatement when the latter is no longer an option, and is computed from the commencement of employment up to the time of termination, including the imputed service for which the [Reformist Union of R.B. Liner, Inc. vs. NLRC, 266 SCRA 713(1997)

3. DAVAO CITY WATER DISTRICT, CAGAYAN DE ORO CITY WATER DISTRICT, METRO CEBU WATER DISTRICT, ZAMBOANGA CITY WATER DISTRICT, LEYTE METRO WATER DISTRICT, BUTUAN CITY WATER DISTRICT, CAMARINES NORTE WATER DISTRICT, LAGUNA WATER DISTRICT, DUMAGUETE CITY WATER DISTRICT, LA UNION WATER DISTRICT, BAYBAY WATER DISTRICT, METRO LINGAYEN WATER DISTRICT, URDANETA WATER DISTRICT, COTABATO CITY WATER DISTRICT, MARAWI WATER DISTRICT, TAGUM

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WATER DISTRICT, DIGOS WATER DISTRICT, BISLIG WATER DISTRICT, and MECAUAYAN WATER DISTRICT, petitioners, vs. CIVIL SERVICE COMMISSION, and COMMISSION ON AUDIT, respondents.

Corporation Law; Civil Service Law; Court reiterates the ruling in Tanjay case declaring water district government-owned or controlled corporations with original charter.—After a fair consideration of the parties’ arguments coupled with a careful study of the applicable laws as well as the constitutional provisions-involved, We rule against the petitioners and reiterate Our ruling in Tanjay case declaring water districts government-owned or controlled corporations with original charter.

Same; Same; Same; A water district is a corporation created pursuant to a special law—P.D. No. 198, as amended, and as such its officers and employees are covered by the Civil Service Law.—As. early as Baguio Water District v. Trajano, et al., (G.R. No. 65428, February 20, 1984, 127 SCRA 730), We already ruled that a water district is a corporation created pursuant to a special law—P.D. No. 198, as amended, and as such its officers and employees are covered by the Civil Service Law.

Same; Same; Same; Same; P.D. No. 198 is a special law applicable only to the different water districts created pursuant thereto; Court’s resolution in Metro Iloilo case declaring PD 198 as a general legislation is abandoned.—Ascertained from a consideration of the whole statute, PD 198 is a special law applicable only to the different water districts created pursuant thereto. In all its essential terms, it is obvious that it pertains to a special purpose which is intended to meet a particular set of conditions and circumstances. The fact that said decree generally applies to all water districts throughout the country does not change the fact that PD 198 is a special law. Accordingly, this Court’s resolution in Metro Iloilo case declaring PD 198 as a general legislation is hereby abandoned,

Same; Same; Same; Same; By government-owned or controlled corporation with original charter means government owned or controlled corporation created by a special law and not under the Corporation Code of the Philippines.—By “government-owned or controlled corporation with original charter,” We mean government owned or controlled corporation created by a special law and not under the Corporation Code of the Philippines.

Same; Same; Same; Same; Same; From the foregoing pronouncement, it is clear that what has been excluded from the coverage of the CSC are those corporations created pursuant to the Corporation Code.—From the foregoing pronouncement, it is clear that what has been excluded from the coverage of the CSC are those corporations created pursuant to the Corporation Code. Significantly, petitioners are not created under the said code, but on the contrary, they were created pursuant to a special law and are governed primarily by its provision. [Davao City Water District vs. Civil Service Commission, 201 SCRA 593(1991)]

4. VICTORIANO ZAMORAS, petitioner, vs. ROQUE SU, JR., ANITA SU HORTELLANO and NATIONAL LABOR RELATIONS COMMISSION, respondents.

Agrarian Law; Tenant, defined; Agricultural tenancy, defined.—Un-der Section 5 (a) of R.A. No. 1199, a tenant is “a person who by himself, or with the aid available from within his immediate household, cultivates the land belonging to or possessed by another, with the latter’s consent for purposes of production, sharing the produce with the landholder or for a price certain or ascertainable in produce or in

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money or both, under the leasehold tenancy system” (Matienzo vs. Servidad, 107 SCRA 276). Agricultural tenancy is defined as “the physical possession by a person of land devoted to agriculture, belonging to or legally possessed by another for the purpose of production through the labor of the former and of the members of his immediate farm household in consideration of which the former agrees to share the harvest with the latter or to pay a price certain or ascertainable, whether in produce or in money, or both” (Sec. 3, R.A. No. 1199; 50 O.G. 4655-56; Miguel Carag vs. CA, et al., 151 SCRA 44).

Same; Same; Same; Requisites of tenancy relationship.—The essential requisites of a tenancy relationship are: (1) the parties are the landholder and the tenant; (2) the subject is the agricultural holding; (3) there is consent between the parties; (4) the purpose is agricultural production; (5) there is personal cultivation by the tenant; and (6) there is a sharing of harvests between landlord and tenant (Antonio Castro vs. CA and De la Cruz, G.R. L-34613, January 26, 1989; Tiongson vs. CA, 130 SCRA 482; Guerrero vs. CA, 142 SCRA 138).

Same; Same; Same; Elements of personal cultivation.—The element of personal cultivation of the land, or with the aid of his farm household, essential in establishing a landlord-tenant or a lessor-lessee relationship, is absent in the relationship between Su and Zamoras (Co vs. IAC, 162 SCRA 390; Graza vs. CA, 163 SCRA 39), for Zamoras did not cultivate any part of Su’s plantation either by himself or with the help of his household.

Same; NLRC, Jurisdiction; It is the NLRC, not the Court of Agrarian Relations, that has jurisdiction to try and decide Zamoras’ complaint for illegal dismissal.—Since Zamoras was an employee, not a tenant of Su, it is the NLRC, not the Court of Agrarian Relations, that has jurisdiction to try and decide Zamoras’ complaint for illegal dismissal (Art. 217, Labor Code; Manila Mandarin Employees Union vs. NLRC, 154 SCRA 368; Jacqueline Industries Dunhill Bags Industries, et al. vs. NLRC, et al., 69 SCRA 242). [Zamoras vs. Su, Jr., 184 SCRA 248(1990)]

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5. FORTUNE CEMENT CORPORATION, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION (First Division) and ANTONIO M. LAGDAMEO, respondents.

Labor Law; National Labor Relations Commission; Dismissal; Corporation Law; PD 902-A; Securities and Exchange Commission; A complaint filed by a corporate executive vice-president for illegal dismissal, resulting from a board resolution dismissing him as such officer is within the jurisdiction of the SEC, not of the NLRC.—In PSBA vs. Leaño (127 SCRA 778), this Court, confronted with a similar controversy, ruled that the SEC, not the NLRC, has jurisdiction: “This is not a case of dismissal. The situation is that of a corporate office having been declared vacant, and of Tan’s not having been elected thereafter. The matter of whom to elect is a prerogative that belongs to the Board, and involves the exercise of deliberate choice and the faculty of discriminative selection. Generally speaking, the relationship of a person to a corporation, whether as officer or as agent or employee is not determined by the nature of the services performed, but by the incidents of the relationship as they actually exist.” x x x The issue of the SEC’s power or jurisdiction is decisive and renders unnecessary a consideration of the other questions raised by Lagdameo. Thus did this Court rule in the case of Dy vs. National Labor Relations Commission (145 SCRA 211) which involved a similar situation: “It is of no moment that Vailoces, in his amended complaint, seeks other reliefs which would seemingly fall under the jurisdiction of the Labor Arbiter, because a closer look at these—underpayment of salary and non-payment of living allowance—shows that they are actually part of the perquisites of his elective position, hence, intimately linked with his relations with the corporation. The question of remuneration, involving as it does, a person who is not a mere employee but a stockholder and officer, an integral part, it might be said, of the corporation, is not a simple labor problem but a matter that comes within the area of corporate affairs and management, and is in fact a corporate controversy in contemplation of the Corporation Code.” (Italics ours.) [Fortune Cement Corporation vs. NLRC, 193 SCRA 258(1991)]

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6. SOUTHEAST ASIAN FISHERIES DEVELOPMENT CENTER-AQUACULTURE DEPARTMENT (SEAFDEC-AQD), DR. FLOR LACANILAO (CHIEF), RUFIL CUEVAS (HEAD, ADMINISTRATIVE DIV.), BEN DELOS REYES (FINANCE OFFICER), petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION AND JUVENAL LAZAGA, respondents.

Labor Law; Independency of SEAFDEC as intergovernmental organization from state.—Being an intergovernmental organization, SEAFDEC including its Departments (AQD), enjoys functional independence and freedom from control of the state in whose territory its office is located.

Same; Jurisdiction; Estoppel; Estoppel does not apply to confer jurisdiction to a tribunal that has none over a cause of action.—Estoppel does not apply to confer jurisdiction to a tribunal that has none over a cause of action. Jurisdiction is conferred by law. Where there is none, no agreement of the parties can provide one.

Same; Same.—Decision of a tribunal not vested with appropriate jurisdiction is null and void.

Same; Same; Appeal.—The lack of jurisdiction of a court may be raised at any stage of the proceedings, even on appeal. This doctrine has been qualified by recent pronouncements which stemmed principally from the ruling in the cited case of Sibonghanoy. It is to be regretted, however, that the holding in said case had been applied to situations which were obviously not contemplated therein. The exceptional circumstances involved in Sibonghanoy which justified the departure from the accepted concept of non-waivability of objection to jurisdiction has been ignored and, instead a blanket doctrine had been repeatedly upheld that rendered the supposed ruling in Sibonghanoy not as the exception, but rather the general rule, virtually overthrowing altogether the time-honored principle that the issue of jurisdiction is not lost by waiver or by estoppel.” [Southeast Asian Fisheries Development Center-Aquaculture Department vs. National Labor Relations Commission, 206 SCRA 283(1992)]

7. BOY SCOUTS OF THE PHILIPPINES, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, FORTUNATO ESGUERRA, ROBERTO MALABORBOR, ESTANISLAO MISA, VICENTE EVANGELISTA, and MARCELINO GARCIA, respondents.

Constitutional Law; Public Corporations; BSP’s functions as set out in its statutory charter do have a public aspect; Case at bar.—Examining the relevant statutory provisions and the arguments outlined above, the Court considers that the following need to be considered in arriving at the appropriate legal characterization of the BSP for purposes of determining whether its officials and staff members are embraced in the Civil Service. Firstly, BSP’s functions as set out in its statutory charter do have a public aspect. BSP’s functions do relate to the fostering of the public virtues of citizenship and patriotism and the general improvement of the moral spirit and fiber of our youth. The social value of activities like those to which the BSP dedicates itself by statutory mandate have in fact, been accorded constitutional recognition. Article II of the 1987 Constitution includes in the “Declaration of Principles and State Policies,” the following: “Sec. 13. The State recognizes the vital role of the youth in nation-building and shall promote and protect their physical, moral, spiritual, intellectual, and social well-being. It shall inculcate in the youth patriotism and nationalism, and encourage their involvement in public and civic affairs.” At the same time, BSP’s functions do not relate to the governance of any part of territory of the

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Philippines; BSP is not a public corporation in the same sense that municipal corporations or local governments are public corporations. BSP’s functions can not also be described as proprietary functions in the same sense that the func- [Boy Scouts of the Philippines vs NLRC, 196 SCRA 176(1991)]

8. IBM PHILIPPINES, INC., VIRGILIO L. PEÑA, and VICTOR V. REYES, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and ANGEL D. ISRAEL, respondents.

Labor Law; Appeals; The practice of admitting additional evidence on appeal in labor cases has been sanctioned by this Court.—It is indeed true that administrative agencies, such as the NLRC, are not bound by the technical rules of procedure and evidence in the adjudication of cases. This was the reason private respondent was allowed to submit additional evidence even after the case was deemed submitted for resolution by the labor arbiter. The practice of admitting additional evidence on appeal in labor cases has been sanctioned by this Court.

Same; Same; The provision for flexibility in administrative procedure “does not go so far as to justify orders without a basis in evidence having rational probative value.”—The liberality of procedure in administrative actions is subject to limitations imposed by basic requirements of due process. As this Court said in Ang Tibay v. CIR, the provision for flexibility in administrative procedure “does not go so far as to justify orders without a basis in evidence having rational probative value.”

Same; Same; In proceedings before the NLRC, the evidence presented before it must at least have a modicum of admissibility for it to be given some probative value.—The computer print-outs, which constitute the only evidence of petitioners, afford no assurance of their authenticity because they are unsigned. The decisions of this Court, while adhering to a liberal view in the conduct of proceedings before administrative agencies, have nonetheless consistently required some proof of authenticity or reliability as condition for the admission of documents.

Same; Dismissals; Due Process; The law requires an employer to furnish the employee two written notices before termination of his employment may be ordered.—The law requires an employer to furnish the employee two written notices before termination of his [IBM Philippines, Inc. vs. NLRC, 305 SCRA 592(1999)]

9. PEPSI COLA DISTRIBUTORS OF THE PHILIPPINES, INC., represented by its Plant General Manager ANTHONY B. SIAN, ELEAZAR LIMBAB, IRENEO BALTAZAR & JORGE HERAYA, petitioners, vs. HON. LOLITA O. GAL-LANG, SALVADOR NOVILLA, ALEJANDRO OLIVA, WILFREDO CABAÑAS & FULGENCIO LEGO, respondents.

Civil Law; Labor Law; Jurisdiction; Not every controversy involving workers and their employers can be resolved only by the labor arbiters; There must be a reasonable causal connection between the claim asserted and employee-employer relations to put the case under the provisions of Article 217.—It must be stressed that not every controversy involving workers and their employers can be resolved only by the labor arbiters. This will be so only if there is a “reasonable causal connection” between the claim asserted and employee-employer relations to put the case under the provisions of Article 217. Absent such a link, the complaint will be cognizable by the regular courts of justice in the exercise of their civil and criminal jurisdiction.

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Same; Same; Same; Same; Although a controversy is between an employer and an employee, the Labor Arbiters have no jurisdiction if the Labor Code is not involved.—ln Molave Motor Sales, Inc. v. Laron, the same Justice held for the Court that the claim of the plaintiff against its sales manager for payment of certain accounts pertaining to his purchase of vehicles and automotive parts, repairs of such vehicles, and cash advances from the corporation was properly cognizable by the Regional Trial Court of Dagupan City and not the labor arbiter, because “although a controversy is between an employer and an employee, the Labor Arbiters have no jurisdiction if the Labor Code is not involved.”

Same; Same; Same; Same; No reasonable causal connection between the complaint and the relations of the parties as employer and employees in the case at bar.—The case now before the Court involves a complaint for damages for malicious prosecution which was filed with the Regional Trial Court of Leyte by the employees of the defendant company. It does not appear that there is a “reasonable causal connection” between the complaint and the relations of the [Pepsi Cola Distributors of the Phils., Inc. vs. Gal-lang, 201 SCRA 695(1991)]

10. EVELYN TOLOSA, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, QWANA KAIUN (through its residentagent, FUMIO NAKAGAWA), ASIA BULK TRANSPORT PHILS., INC., PEDRO GARATE and MARIO ASIS, respondents.

Labor Law; National Labor Relations Commission; Jurisdiction; The allegations in the complaint determine the nature of the action and, consequently, the jurisdiction of the courts.—Time and time again, we have held that the allegations in the complaint determine the nature of the action and, consequently, the jurisdiction of the courts. After carefully examining the complaint/position paper of petitioner, we are convinced that the allegations therein are in the nature of an action based on a quasi delict or tort. It is evident that she sued Pedro Garate and Mario Asis for gross negligence.

Same; Same; Same; Damages; The jurisdiction of labor tribunals is limited to disputes arising from employer-employee relations.—The jurisdiction of labor tribunals is limited to disputes arising from employer-employee relations, as we ruled in Georg Grotjahn GMBH & Co. v. Isnani: “Not every dispute between an employer and employee involves matters that only labor arbiters and the NLRC can resolve in the exercise of their adjudicatory or quasi-judicial powers. The jurisdiction of labor arbiters and the NLRC under Article 217 of the Labor Code is limited to disputes arising from an employer-employee relationship which can only be resolved by reference to the Labor Code, other labor statutes, or their collective bargaining agreement.”

Same; Same; Same; Same; Reliefs to be awarded by labor arbiters and the NLRC must still be based on an action that has a reasonable causal connection with labor laws.—While it is true that labor arbiters and the NLRC have jurisdiction to award not only reliefs provided by labor laws, but also damages governed by the Civil Code, these reliefs must still be based on an action that has a reasonable causal connection with the Labor Code, other labor statutes, or collective bargaining agreements.

Same; Same; Same; Same; Where such principal relief is to be granted under labor legislation or a collective bargaining agreement, the case should fall within the jurisdiction of the Labor Arbiter and the NLRC.—“It is the character of the principal relief sought that appears essential in this connection. Where such principal relief is to be granted under labor legislation or a collective bargaining agreement, the case

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should fall within the jurisdiction of the Labor Arbiter and the NLRC, even though a claim for damages might be asserted as an incident to such claim.”

Same; Same; Same; Same; It is not the NLRC but the regular courts that have jurisdiction over actions for damages.—It is not the NLRC but the regular courts that have jurisdiction over actions for damages, in which the employer-employee relation is merely incidental, and in which the cause of action proceeds from a different source of obligation such as a tort. Since petitioner’s claim for damages is predicated on a quasi delict or tort that has no reasonable causal connection with any of the claims provided for in Article 217, other labor statutes, or collective bargaining agreements, jurisdiction over the action lies with the regular courts—not with the NLRC or the labor arbiters.

Same; Same; Appeals; Well-settled is the rule that issues not raised below cannot be raised for the first time on appeal.—This argument cannot be passed upon in this appeal, because it was not raised in the tribunals a quo. Well-settled is the rule that issues not raised below cannot be raised for the first time on appeal. Thus, points of law, theories, and arguments not brought to the attention of the Court of Appeals need not—and ordinarily will not—be considered by this Court. Petitioner’s allegation cannot be accepted by this Court on its face; to do so would be tantamount to a denial of respondents’ right to due process. [Tolosa vs. National Labor Relations Commission, 401 SCRA 291(2003)]

11. RUFINO C. MONTOYA, petitioner, vs. TRANSMED MANILA CORPORATION/MR. EDILBERTO ELLENA and GREAT LAKE NAVIGATION CO., LTD., respondents.

Labor Law; Termination of Employment; A work-relatedness could possibly have been shown since the tuberculosis, apparently dormant when Montoya boarded his ship, “flared up” after the work-related accident and its stresses intervened. This possible line of argument, however, is one that escaped the parties and the tribunals below, and to date has remained unexplored.—To recapitulate, the CA properly recognized that the NLRC committed no grave abuse of discretion in dismissing Montoya’s complaint; the NLRC’s findings of facts have sufficient basis in evidence and in the records of the case and, in our own view, far from the arbitrariness that characterizes excess of jurisdiction. If Montoya had any basis at all to support his claim, such basis might have been found after considering that he was medically fit when he boarded the ship based on the requisite pre-employment examination; his tuberculosis was only discovered after repatriation, and the company doctor himself certified that it could have been pre-existing and might have just flared up because of the accident. Under this Court’s ruling in Belarmino v. Employees’ Compensation Commission (185 SCRA 304 [1990]), a work-relatedness could possibly have been shown since the tuberculosis, apparently dormant when Montoya boarded his ship, “flared up” after the work-related accident and its stresses intervened. This possible line of argument, however, is one that escaped the parties and the tribunals below, and to date has remained unexplored. In any event, even if invoked, the CA’s omission to recognize the validity of this line of argument would have only been an error of judgment, not a grave abuse of discretion, since the argument would have simply embodied a competing theory that the CA did not adopt in a situation not attended by any arbitrariness or grave abuse of discretion. [Montaya vs. Transmed Manila Corporation, 597 SCRA 334(2009)]

12. NAZARIO C. AUSTRIA, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, ABETO A. UY and PHILIP-PINE STEEL COATING CORPORATION, respondents.

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Labor Law; Administrative Law; Words and Phrases; “Sub-stantial Evidence,” Explained; The Supreme Court cannot affirm the decision of the National Labor Relations Commission when its findings of fact on which the conclusion was based are not supported by substantial evidence.—Petitioner, in effect, assigns grave abuse of discretion on the part of public respondent NLRC for its misappreciation of the evidence and giving it undue weight. Basic is the rule that judicial review of labor cases does not go so far as to evaluate the sufficiency of evidence on which the labor officials’ findings rest; more so when both the Labor Arbiter and the NLRC share the same findings. This, notwithstanding, we cannot affirm the decision of the NLRC especially when its findings of fact on which the conclusion was based are not supported by substantial evidence. By substantial evidence, we mean the amount of relevant evidence which a reasonable mind might accept as adequate to justify the conclusion.

Same; Evidence; Burden of Proof; Pleadings and Practice; Unlike in other cases where the complainant has the burden of proof to discharge, in labor cases concerning illegal dismissals, the burden of proving that the employee was dismissed with just cause rests upon the employer.—The NLRC grounded its findings on the following postulates: (a) the witnesses of PHILSTEEL are credible for petitioner failed to show any ground for them to falsely testify, especially in the light of his excellent job performance; and, (b) respondents’ witnesses are more credible than petitioner’s—Lukban who, insofar as the source of the information is concerned, impressed the NLRC as evasive. The NLRC however entertained a patent misapprehension of the burden of proof rule in labor termination cases. Unlike in other cases where the complainant has the burden of proof to discharge, in labor cases concerning illegal dismissals, the burden of proving that the employee was dismissed with just cause rests upon the employer. Such is the mandate of Art. 278 of the Labor Code.

Same; Same; Hearsay Evidence; Witnesses; Loss of Trust and Confidence; Reliance both by the Labor Arbiter and the National Labor Relations Commission on the hearsay testimonies in assessing the evidence reflects a dangerous propensity for baseless conclusions amounting to grave abuse of discretion; While loss of confidence or breach of trust is a valid ground for termination, it must rest on some basis which must be convincingly established.—The reliance both by the Labor Arbiter and the NLRC on the hearsay testimonies in assessing the evidence of private respondents reflects a dangerous propensity for baseless conclusions amounting to grave abuse of

13. PAL EMPLOYEES SAVINGS AND LOAN ASSOCIATION, INC. (PESALA), petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and ANGEL V. ESQUEJO, respondents.

Appeals; Certiorari; Abuse of Discretion; Special civil action of certiorari should be instituted within a period of three months.—At the outset, we would like to rectify the statement made by the Solicitor General that the “petitioner did not appeal from the Decision of (public) respondent NLRC.” The elevation of the said case by appeal is not possible. The only remedy available from an order or decision of the NLRC is a petition for certiorari under Rule 65 of the Rules of Court alleging lack or excess of jurisdiction or grave abuse of discretion. The general rule now is that the special civil action of certiorari should be instituted within a period of three months. Hence, when the petition was filed on July 10, 1992, three months had not yet elapsed from petitioner’s receipt of the assailed Decision (should really be from receipt of the order denying the motion for reconsideration).

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Labor Law; Labor Contracts; Contracts of labor are explicitly subject to the police power of the State.—In connection with the foregoing, we should add that even if there had been a meeting of the minds in the instant case, the employment contract could not have effectively shielded petitioner from the just and valid claims of private respondent. Generally speaking, contracts are respected as the law between the contracting parties, and they may establish such stipulations, clauses, terms and conditions as they may see fit; and for as long as such agreements are not contrary to law, morals, good customs, public policy or public order, they shall have the force of law between them. However, “x x x, while it is the inherent and inalienable right of every man to have the utmost liberty of contracting, and agreements voluntarily and fairly made will be held valid and enforced in the courts, the general right to contract is subject to the limitation that the agreement must not be in violation of the Constitution, the statute or some rule of law (12 Am. Jur. pp. 641-642).” And under the Civil Code, contracts of labor are explicitly subject to the police power of the State because they are not ordinary contracts but are impressed with public interest. Inasmuch as in this particular instance the contract in question would have been deemed in violation of pertinent labor laws, the provisions of said laws would prevail over the terms of the contract, and private respondent would still be entitled to overtime pay.

Same; Same; When an employee fails to assert his right immediately upon violation of the agreement, such failure cannot ipso facto be deemed as a waiver of the oppression.—The interpretation of the provision in question having been put in issue, the Court is constrained to determine which interpretation is more in accord with the intent of the parties. To ascertain the intent of the parties, the Court is bound to look at their contemporaneous and subsequent acts. Private respondent’s silence and failure to claim his overtime pay since 1986 cannot be considered as proving the understanding on his part that the rate provided in his employment contract covers overtime pay. Precisely, that is the very question raised by private respondent with the arbiter, because contrary to the claim of petitioner, private respondent believed that he was not paid his overtime pay and that such pay is not covered by the rate agreed upon and stated in his Appointment Memorandum. The subsequent act of private respondent in filing money claims negates the theory that there was clear agreement as to the inclusion of his overtime pay in the contracted salary rate. When an employee fails to assert his right immediately upon violation thereof, such failure cannot ipso facto be deemed as a waiver of the oppression. We must recognize that the worker and his employer are not equally situated. When a worker keeps silent inspite of flagrant violations of his rights, it may be because he is seriously fearful of losing his job. And the dire consequences thereof on his family and his dependents prevent him from complaining. In short, his thoughts of sheer survival weigh heavily against launching an attack upon his more powerful employer.

[PAL Employees Savings and Loan Association, Inc. vs. NLRC, 260 SCRA 758(1996)]

14. CELESTINO VIVERO, petitioner, vs. COURT OF APPEALS, HAMMONIA MARINE SERVICES, and HANSEATIC SHIPPING CO., LTD., respondents.

Labor Law; Voluntary Arbitrations; Collective Bargaining Agreements; Illegal Dismissals; Jurisdiction; Words and Phrases; Absent an express stipulation in the CBA, the phrase “all disputes” should be construed as limited to the areas of conflict traditionally within the jurisdiction of Voluntary Arbitrators, i.e., disputes relating to contract-interpretation, contract-implementation, or interpretation or enforcement of company personnel policies—illegal termination disputes in the absence of an express CBA provision, do not fall within any of these categories, and are within the exclusive original jurisdiction of Labor Arbiters by express provision of law.—In San Miguel Corp. v. National Labor Relations Commission this

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Court held that the phrase “all other labor disputes” may include termination disputes provided that the agreement between the Union and the Company states “in unequivocal language that [the parties] conform to the submission of termination disputes and unfair labor practices to voluntary arbitration.” Ergo, it is not sufficient to merely say that parties to the CBA agree on the principle that “all disputes” should first be submitted to a Voluntary Arbitrator. There is a need for an express stipulation in the CBA that illegal termination disputes should be resolved by a Voluntary Arbitrator or Panel of Voluntary Arbitrators, since the same fall within a special class of disputes that are generally within the exclusive original jurisdiction of Labor Arbiters by express provision of law. Absent such express stipulation, the phrase “all disputes” should be construed as limited to the areas of conflict traditionally within the jurisdiction of Voluntary Arbitrators, i.e., disputes relating to contract-interpretation, contract-implementation, or interpretation or enforcement of company personnel policies. Illegal termination disputes—not falling within any of these categories—should then be considered as a special area of interest governed by a specific provision of law.

Same; Same; Same; The use of the word “may” shows the intention of the parties to reserve the right to submit the illegal termination dispute to the jurisdiction of the Labor Arbiter, rather than to a Voluntary Arbitrator-—In this case, however, while the parties did agree to make termination disputes the proper subject of voluntary arbitration, such submission remains discretionary upon the parties. A perusal of the CBA provisions shows that Sec. 6, Art. XII (Grievance Procedure) of the CBA is the general agreement of the parties to refer grievances, disputes or misunderstandings to a grievance committee, and henceforth, to a voluntary arbitration committee, x x x The use of the word “may” shows the intention of the parties to reserve the right to submit the illegal termination dispute to the jurisdiction of the Labor Arbiter, rather than to a Voluntary Arbitrator. Petitioner validly exercised his option to submit his case to a Labor Arbiter when he filed his Complaint before the proper government agency.

Same; Same; Same; When the parties have validly agreed on a procedure for resolving grievances and to submit a dispute to voluntary arbitration then that procedure should be strictly observed.—The CBA clarifies the proper procedure to be followed in situations where the parties expressly stipulate to submit termination disputes to the jurisdiction of a Voluntary Arbitrator or Panel of Voluntary Arbitrators. For when the parties have validly agreed on a procedure for resolving grievances and to submit a dispute to voluntary arbitration then that procedure should be strictly observed. Non-compliance therewith cannot be excused, as petitioner suggests, by the fact that he is not well-versed with the “fine prints” of the CBA. It was his responsibility to find out, through his Union, what the provisions of the CBA were and how they could affect his rights.

Same; Same; Same; Grievance Procedure; Where under the CBA, both Union and the employer are responsible for selecting an impartial arbitrator or for convening an arbitration committee, yet neither made a move towards this end, the employee should not be deprived of his legitimate recourse because of the refusal of both Union and the employer to follow the grievance procedure.—After the grievance proceedings have failed to bring about a resolution, AMOSUP, as agent of petitioner, should have informed him of his option to settle the case through voluntary arbitration. Private respondents, on their part, should have timely invoked the provision of their CBA requiring the referral of their unresolved disputes to a Voluntary Arbitrator once it became apparent that the grievance machinery failed to resolve it prior to the filing of the case before the proper tribunal. The private respondents should not have waited for nine (9) months from the filing of their Position Paper with the POEA before it moved to dismiss the

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case purportedly for lack of jurisdiction. As it is, private respondents are deemed to have waived their right to question the procedure followed by petitioner, assuming that they have the right to do so. Under their CBA, both Union and respondent companies are responsible for selecting an impartial arbitrator or for convening an arbitration committee; yet, it is apparent that neither made a move towards this end. Consequently, [Vivero vs. Court of Appeals, 344 SCRA 268(2000)]

15. ATLAS FARMS, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, JAIME O. DELA PEÑA and MARCIAL I. ABION, respondents.

Labor Law; Dismissals; Appeals; Factual findings of agencies exercising quasi-judicial functions are accorded not only respect but even finality.—The burden of proving that the dismissal of private respondents was legal and valid falls upon petitioner. The NLRC found that petitioner failed to substantiate its claim that both private respondents committed certain acts that violated company rules and regulations, hence we find no factual basis to say that private respondents’ dismissal was in order. We see no compelling reason to deviate from the NLRC ruling that their dismissal was illegal, absent a showing that it reached its conclusion arbitrarily. Moreover, factual findings of agencies exercising quasi-judicial functions are accorded not only respect but even finality, aside from the consideration here that this Court is not a trier of facts. Same; Same; Requisites for a valid dismissal.—For a dismissal to be valid, the employer must show that: (1) the employee was accorded due process, and (2) the dismissal must be for any of the valid causes provided for by law.

Same; Same; Benefits; A terminated employee’s receipt of his separation pay and other monetary benefits does not preclude reinstatement or full benefits under the law, should reinstatement be no longer possible.—As a consequence of their illegal dismissal, private respondents are entitled to reinstatement to their former positions. But since reinstatement is no longer feasible because petitioner had already closed its shop, separation pay in lieu of reinstatement shall be awarded. A terminated employee’s receipt of his separation pay and other monetary benefits does not preclude reinstatement or full benefits under the law, should reinstatement be no longer possible. [Atlas Farms, Inc. vs. National Labor Relations Commission, 392 SCRA 128(2002)]

16. PIONEER TEXTURIZING CORP. and/or JULIANO LIM, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, PIONEER TEXTURIZING WORKERS UNION and LOURDES A. DE JESUS, respondents.

Labor Law; Illegal Dismissal; Due Process; Lack of a just cause in the dismissal from service of an employee renders the dismissal illegal, despite the employer’s observance of procedural due process.—Gleaned either from the Labor Arbiter’s observations or from the NLRC’s assessment, it distinctly appears that petitioners’ accusation of dishonesty and tampering of official records and documents with intention of cheating against de Jesus was not substantiated by clear and convincing evidence. Petitioners simply failed, both before the Labor Arbiter and the NLRC, to discharge the burden of proof and to validly justify de Jesus’ dismissal from service. The law, in this light, directs the employers, such as herein petitioners, not to terminate the services of an employee except for a just or authorized cause under the Labor Code. Lack of a just cause in the dismissal from service of an employee, as in this case, renders the dismissal illegal, despite the employer’s observance of procedural due process.

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Same; Same; Management Prerogatives; While an employer has the inherent right to discipline its employees, this right must always be exercised humanely, and the penalty it must impose should be commensurate to the offense involved and to the degree of its infraction.—We also find the imposition of the extreme penalty of dismissal against de Jesus as certainly harsh and grossly disproportionate to the negligence committed, especially where said employee holds a faithful and an untarnished twelve-year service record. While an employer has the inherent right to discipline its employees, we have always held that this right must always be exercised humanely, and the penalty it must impose should be commensurate to the offense involved and to the degree of its infraction. The employer should bear in mind that, in the exercise of such right, what is at stake is not only the employee’s position but her livelihood as well.

Same; Same; Loss of Confidence; While loss of confidence is one of the valid grounds for termination of employment, the same, however, cannot be used as a pretext to vindicate each and every instance of unwarranted dismissal—to be a valid ground, it must be shown that the employee concerned is responsible for the misconduct or infraction and that the nature of his participation therein rendered him absolutely unworthy of the trust and confidence demanded by his position.—Equally unmeritorious is petitioners’ assertion that the dismissal is justified on the basis of loss of confidence. While loss of confidence, as correctly argued by petitioners, is one of the valid grounds for termination of employment, the same, however, cannot be used as a pretext to vindicate each and every instance of unwarranted dismissal. To be a valid ground, it must be shown that the employee concerned is responsible for the misconduct or infraction and that the nature of his participation therein rendered him absolutely unworthy of the trust and confidence demanded by his position. In this case, petitioners were unsuccessful in establishing their accusations of dishonesty and tampering of records with intention of cheating. Indeed, even if petitioners’ allegations against de Jesus were true, they just the same failed to prove that her position needs the continued and unceasing trust of her employers. The breach of trust must be related to the performance of the employee’s functions. Surely, de Jesus who occupies the position of a reviser/trimmer does not require the petitioners’ perpetual and full confidence.

Same; Same; Reinstatement; Statutory Construction; As a rule, “shall” in a statute commonly denotes an imperative obligation and is inconsistent with the idea of discretion—the presumption is that the word “shall,” when used in a statute, is mandatory.—We note that prior to the enactment of R.A. No. 6715, Article 223 of the Labor Code contains no provision dealing with the reinstatement of an illegally dismissed employee. The amendment introduced by R.A. No. 6715 is an innovation and a far departure from the old law indicating thereby the legislature’s unequivocal intent to insert a new rule that will govern the reinstatement aspect of a decision or resolution in any given labor dispute. In fact, the law as now worded employs the phrase “shall immediately be executory” without qualification emphasizing the need for prompt compliance. As a rule, “shall” in a statute commonly denotes an imperative obligation and is inconsistent with the idea of discretion and that the presumption is that the word “shall,” when used in a statute, is mandatory. An appeal or posting of bond, by plain mandate of the law, could not even forestall nor stay the executory nature of an order of reinstatement. The law, moreover, is unambiguous and clear. Thus, it must be applied according to its plain and obvious meaning, according to its express terms.

Same; Same; Same; Same; To require the application for and issuance of a writ of execution as prerequisites for the execution of a reinstatement award would certainly betray and run counter to the

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very object and intent of Art. 223 of the Labor Code, i.e., the immediate execution of a reinstatement order.—Article 224 states that the need for a writ of execution applies only within five (5) years from the date a decision, an order or award becomes final and executory. It can not relate to an award or order of reinstatement still to be appealed or pending appeal which Article 223 contemplates. The provision of Article 223 is clear that an award for reinstatement shall be immediately executory even pending appeal and the posting of a bond by the employer shall not stay the execution for reinstatement. The legislative intent is quite obvious, i.e., to make an award of reinstatement immediately enforceable, even pending appeal. To require the application for and issuance of a writ of execution as prerequisites for the execution of a reinstatement award would certainly betray and run counter to the very object and intent of Article 223, i.e., the immediate execution of a reinstatement order. The reason is simple. An application for a writ of execution and its issuance could be delayed for numerous reasons. A mere continuance or postponement of a scheduled hearing, for instance, or an inaction on the part of the Labor Arbiter or the NLRC could easily delay the issuance of the writ thereby setting at naught the strict mandate and noble purpose envisioned by Article 223. In other words, if the requirements of Article 224 were to govern, as we so declared in Maranaw, then the executory nature of a reinstatement order or award contemplated by Article 223 will be unduly circumscribed and rendered ineffectual.

Same; Same; Same; Same; In introducing a new rule on the reinstatement aspect of a labor decision under R.A. No. 6715, Congress should not be considered to be indulging in mere semantic exercise; On appeal the appellate tribunal concerned may enjoin or suspend the reinstatement order in the exercise of its sound discretion.—In enacting the law, the legislature is presumed to have ordained a valid and sensible law, one which operates no further than may be necessary to achieve its specific purpose. Statutes, as a rule, are to be construed in the light of the purpose to be achieved and the evil sought to be remedied. And where the statute is fairly susceptible of two or more constructions, that construction should be adopted which will most tend to give effect to the manifest intent of the lawmaker and promote the object for which the statute was enacted, and a construction should be rejected which would tend to render abortive other provisions of the statute and to defeat the object which the legislator sought to attain by its enactment. In introducing a new rule on the reinstatement aspect of a labor decision under R.A. No. 6715, Congress should not be considered to be indulging in mere semantic exercise. On appeal, however, the appellate tribunal concerned may enjoin or suspend the reinstatement order in the exercise of its sound discretion.

Same; Same; Same; Same; Henceforth, an award or order for reinstatement is self-executory—after receipt of the decision or resolution ordering the employee’s reinstatement, the employer has the right to choose whether to re-admit the employee to work under the same terms and conditions prevailing prior to his dismissal or to reinstate the employee in the payroll.—Furthermore, the rule is that all doubts in the interpretation and implementation of labor laws should be resolved in favor of labor. In ruling that an order or award for rein-

17. ST. MARTIN FUNERAL HOME, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and BIENVENIDO ARICAYOS, respondents.

Labor Law; Judicial Review; Appeals; Pleadings and Practice; The Court feels that it is now exigent and opportune to reexamine the functional validity and systemic practicability of the mode of judicial review it has long adopted and still follows with respect to decisions of the NLRC.—Before proceeding further into the merits of the case at bar, the Court feels that it is now exigent and opportune to reexamine the

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functional validity and systemic practicability of the mode of judicial review it has long adopted and still follows with respect to decisions of the NLRC. The increasing number of labor disputes that find their way to this Court and the legislative changes introduced over the years into the provisions of Presidential Decree (P.D.) No. 442 (The Labor Code of the Philippines and Batas Pambansa Blg. (B.P. No.) 129 (The Judiciary Reorganization Act of 1980) now stridently call for and warrant a reassessment of that procedural aspect.

Same; Same; Same; Jurisdiction; Statutes; The excepting clause provided for in paragraph (3), Section 9 of B.P. No. 129, as amended by R.A. No. 7902, contradicts what has been ruled and said all along that appeal does not lie from decisions of the NLRC.—It will, however, be noted that paragraph (3), Section 9 of B.P. No. 129 now grants exclusive appellate jurisdiction to the Court of Appeals over all final adjudications of the Regional Trial Courts and the quasi-judicial agencies generally or specifically referred to therein except, among others, “those falling within the appellate jurisdiction of the Supreme Court in accordance with x x x the Labor Code of the Philippines under Presidential Decree No. 442, as amended, x x x.” This would necessarily contradict what has been ruled and said all along that appeal does not lie from decisions of the NLRC. Yet, under such excepting clause literally construed, the appeal from the NLRC cannot be brought to the Court of Appeals, but to this Court by necessary implication.

Same; Same; Same; Same; There are no cases in the Labor Code the decisions, resolutions, orders or awards wherein are within the appellate jurisdiction of the Supreme Court or of any other court for that matter.—The same exceptive clause further confuses the situation by declaring that the Court of Appeals has no appellate jurisdiction over decisions falling within the appellate jurisdiction of the Supreme Court in accordance with the Constitution, the provisions of B.P. No. 129, and those specified cases in Section 17 of the Judiciary Act of 1948. These cases can, of course, be properly excluded from the exclusive appellate jurisdiction of the Court of Appeals. However, because of the aforementioned amendment by transposition, also supposedly excluded are cases falling within the appellate jurisdiction of the Supreme Court in accordance with the Labor Code. This is illogical and impracticable, and Congress could not have intended that procedural gaffe, since there are no cases in the Labor Code the decisions, resolutions, orders or awards wherein are within the appellate jurisdiction of the Supreme Court or of any other court for that matter. [St. Martin Funeral Home vs. NLRC, 295 SCRA 494(1998)]

18. JUANITO A. GARCIA and ALBERTO J. DUMAGO, petitioners, vs. PHILIPPINE AIRLINES, INC., respondent.

Labor Law; Wages; A dismissed employee whose case was favorably decided by the Labor Arbiter is entitled to receive wages pending appeal upon reinstatement, which is immediately executory—unless there is a restraining order, it is ministerial upon the Labor Arbiter to implement the order of reinstatement and it is mandatory on the employer to comply therewith.—A dismissed employee whose case was favorably decided by the Labor Arbiter is entitled to receive wages pending appeal upon reinstatement, which is immediately executory. Unless there is a restraining order, it is ministerial upon the Labor Arbiter to implement the order of reinstatement and it is mandatory on the employer to comply therewith.

Same; Reinstatement; It settles the view that the Labor Arbiter’s order of reinstatement is immediately executory and the employer has to either re-admit them to work under the same terms and conditions prevailing prior to their dismissal, or to reinstate them in the payroll, and that failing to exercise the

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options in the alternative, employer must pay the employee’s salaries.—The Court reaffirms the prevailing principle that even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory on the part of the employer to reinstate and pay the wages of the dismissed employee during the period of appeal until reversal by the higher court. It settles the view that the Labor Arbiter’s order of reinstatement is immediately executory and the employer has to either re-admit them to work under the same terms and conditions prevailing prior to their dismissal, or to reinstate them in the payroll, and that failing to exercise the options in the alternative, employer must pay the employee’s salaries.

Same; Same; While reinstatement pending appeal aims to avert the continuing threat or danger to the survival or even the life of the dismissed employee and his family, it does not contemplate the period when the employer-corporation itself is similarly in a judicially monitored state of being resuscitated in order to survive.—While reinstatement pending appeal aims to avert the continuing threat or danger to the survival or even the life of the dismissed employee and his family, it does not contemplate the period when the employer-corporation itself is similarly in a judicially monitored state of being resuscitated in order to survive.

Same; Writ of Execution; The new National Labor Relations Commission (NLRC) Rules of Procedure, which took effect on January 7, 2006, now require the employer to submit a report of compliance within ten (10) calendar days from receipt of the Labor Arbiter’s decision, disobedience to which clearly denotes a refusal to reinstate—the employee need not file a motion for the issuance of the writ of execution since the Labor Arbiter shall thereafter motu proprio issue the writ, and, with the new rules in place, there is hardly any difficulty in determining the employer’s intransigence in immediately complying with the order.—The new NLRC Rules of Procedure, which took effect on January 7, 2006, now require the employer to submit a report of compliance within 10 calendar days from receipt of the Labor Arbiter’s decision, disobedience to which clearly denotes a refusal to reinstate. The employee need not file a motion for the issuance of the writ of execution since the Labor Arbiter shall thereafter motu proprio issue the writ. With the new rules in place, there is hardly any difficulty in determining the employer’s intransigence in immediately complying with the order.

Same; Corporate Rehabilitation; Had there been no need to rehabilitate, respondent may have opted for actual physical reinstatement pending appeal to optimize the utilization of resources—then again, though the management may think this wise, the rehabilitation receiver may decide otherwise, not to mention the subsistence of the injunction on claims.—There are legal effects arising from a judicial order placing a corporation under rehabilitation. Respondent was, during the period material to the case, effectively deprived of the alternative choices under Article 223 of the Labor Code, not only by virtue of the statutory injunction but also in view of the interim relinquishment of management control to give way to the full exercise of the powers of the rehabilitation receiver. Had there been no need to rehabilitate, respondent may have opted for actual physical reinstatement pending appeal to optimize the utilization of resources. Then again, though the management may think this wise, the rehabilitation receiver may decide otherwise, not to mention the subsistence of the injunction on claims. [Garcia vs. Philippine Airlines, Inc., 576 SCRA 479(2009)]

19. EMCO Plywood Corporation vs. Abelgas, 427 SCRA 496(2004)

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Same; Same; Same; The losses must be substantial and the retrenchment must be reasonably necessary to avert such losses, and the employer bears the burden of proving the existence or the imminence of substantial losses with clear and satisfactory evidence that there are legitimate business reasons justifying a retrenchment.—The Court is not persuaded. “Not every loss incurred or expected to be incurred by a company will justify retrenchment. The losses must be substantial and the retrenchment must be reasonably necessary to avert such losses.” The employer bears the burden of proving the existence or the imminence of substantial losses with clear and satisfactory evidence that there are legitimate business reasons justifying a retrenchment. Should the employer fail to do so, the dismissal shall be deemed unjustified.

Same; Same; Same; Retrenchment must be exercised essentially as a measure of last resort, after less drastic means have been tried and found wanting, and the fact that an employer did not resort to other such measures seriously belies its claim that retrenchment was done in good faith to avoid losses.—Retrenchment is a management prerogative consistently recognized and affirmed by this Court. It is, however, subject to faithful compliance with the substantive and the procedural requirements laid down by law and jurisprudence. It must be exercised essentially as a measure of last resort, after less drastic means have been tried and found wanting. The only less drastic measure that EMCO undertook was the rotation work scheme: the three-day-work per employee per week schedule. It did not try other measures, such as cost reduction, lesser investment on raw materials, adjustment of the work routine to avoid the scheduled power failure, reduction of the bonuses and salaries of both management and rank-and-file, improvement of manufacturing efficiency, trimming of marketing and advertising costs, and so on. The fact that petitioners did not resort to other such measures seriously belies their claim that retrenchment was done in good faith to avoid losses.

Same; Same; Notice Requirement; For a valid termination due to retrenchment, written notices of the intended retrenchment must be served by the employer on the workers and on the Department of Labor and Employment at least one (1) month before the actual date of the retrenchment, and the written notice should be served on the employees themselves, not on their supervisors.—For a valid termination due to retrenchment, the law requires that written notices of the intended retrenchment be served by the employer on the worker and on the Department of Labor and Employment at least one (1) month before the actual date of the retrenchment. The purpose of this requirement is to give employees some time to prepare for the eventual loss of their jobs, as well as to give DOLE the opportunity to ascertain the verity of the alleged cause of termination. There is no showing that such notice was served on the employees in the present case. Petitioners argue that on January 20, 1993, Petitioner [EMCO Plywood Corporation vs. Abelgas, 427 SCRA 496(2004)]

20. WYETH-SUACO LABORATORIES, INC., AYERST LABORATORIES (PHILS.), INC. and THOMAS LEBER, petitioners, vs. -NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER DAISY G. BARCELONA and ROLANDO SANTOS, respondents.

Labor Law; Waiver of rights of employees and laborers; Quitclaims; A quitclaim executed in favor of a company by an employee amounts to a valid and binding compromise agreement between them.—A quitclaim executed in favor of a company by an employee amounts to a valid and binding compromise agreement between them (Samaniego v. NLRC, 198 SCRA 111 [1991]). Article 227 of the Labor Code provides that any compromise settlement voluntarily agreed upon with the assistance of the Bureau of

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Labor Relations or the regional office of the DOLE, shall be final and binding upon the parties and the NLRC or any court "shall not assume jurisdiction over issues involved therein except in case of non-compliance thereof or if there is prima facie evidence that the settlement was obtained through fraud, misrepresentation, or coercion." [Wyeth-Suaco Laboratories, Inc. vs. National Labor Relations Commission, 219 SCRA 356(1993)] Same; Same; Same; Reason why quitclaim are commonly frowned upon as contrary to public policy and they are ineffective to bar claims for the full measure of the workers' legal rights.—Quit-claims are commonly frowned upon as contrary to public policy and they are ineffective to bar claims for the full measure of the workers' legal rights (Lopez Sugar Corporation v. FFW, 189 SCRA 179 [1990]). The reason for this is because the employer and the employee do not stand on the same footing, such that quitclaims usually take the form of contracts of adherence, not of choice.

Same; Same; Same; While dire necessity as a reason for signing a quitclaim is not acceptable reason to set aside the quitclaim in the absence of a showing that the employee had been forced to execute it, such reason gains importance if the consideration for the quitclaim is unconscionably low and the employee has been tricked into accepting it.—In the case at bar, both the labor arbiter and the NLRC found for private respondent primarily because of the fact that petitioners were guilty of misrepresentation by their failure to disclose to the ALPI employees the real nature of the negotiations and transaction between Wyeth and ALPI. The Court is bound by this finding of fact there being no showing that neither the arbiter nor the NLRC gravely abused their discretion or otherwise acted without jurisdiction or in excess of the same.

Same; Evidence; Appeal; Court is bound by the findings of fact there being no showing that neither the arbiter nor the NLRC gravely abused their discretion or otherwise acted without jurisdiction or in excess of the same.—Indeed, Santos resigned because of the uncertainty as to the future of ALPI. Like the other employees, he was made to believe that the deal between the two companies was merely a merger but it really was a projected buy-out. While "dire necessity" as a reason for signing a quitclaim is not acceptable reason to set aside the quitclaim in the absence of a showing that the employee had been forced to execute it, such reason gains importance if the consideration for the quitclaim is unconscionably low and the employee has been tricked into accepting it.

21. NATIONAL ASSOCIATION OF FREE TRADE UNIONS (NAFTU), petitioner, vs. MAINIT LUMBER DEVELOPMENT COMPANY WORKERS UNION-UNITED LUMBER AND GENERAL WORKERS OF THE PHILIPPINES. (MALDECOWU-ULGWP), respondents.

Labor Relations; Unions; Certification Election; The basic test of an asserted bargaining unit's acceptability is whether or not it is fundamentally the combination which will best assure to all employees the exercise of their collective bargaining rights.—Moreover, while the existence of a bargaining history is a factor that may be reckoned with in determining the appropriate bargaining unit, the same is not decisive or conclusive. Other factors must be considered. The test of grouping is community or mutuality of interests. This is so because "the basic test of an asserted bargaining unit's acceptability is whether or not it is fundamentally the combination which will best assure to all employees the exercise of their collective bargaining rights." (Democratic Labor Association v. Cebu Stevedoring Company, Inc., et al., 103 Phil. 1103 [1958]).

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Judgments; Res Judicata; The principle of res judicata applies as well to the judicial and quasi-judicial acts of public, executive, or administrative officers and boards acting within their jurisdiction as to the judgments of courts having general judicial powers.—Secondly, the issue had been raised earlier by petitioner. The respondent Bureau of Labor Relations had already ruled on the same in its decision dated April 28,1986 affirming the Med-Arbiter's Order dated April 11, 1985 which granted the petition for Certification Election. NAFTU did not elevate the April 28,1986 decision to this Court. On the contrary, it participated in the questioned election and later it did not raise the issue in its election protest (Rollo, p. 210). Hence, the principle of res judicata applies. It was settled as early as 1956 that "the rule which forbids the reopening of a matter once judicially determined by competent authority applies as well to the judicial and quasi-judicial acts of public, executive or administrative officers and boards acting within their jurisdiction as to the judgments of courts having general judicial powers x x x" (B.F. Goodrich Philippines, Inc. v. Workmen's Compen- [National Association of Free Trade Unions vs. Mainit Lumber Development Company Workers Union-United Lumber and General Workers of the Phils., 192 SCRA 598(1990)]

22. MERALCO vs Secretary of Labor

GR 91902

Facts:

On November 22, 1988, the Staff and Technical Employees Association of MERALCO, a labor organization of staff and technical employees of MERALCO, filed a petition for certification election, seeking to represent regular employees of MERALCO. MERALCO moved for the dismissal of the petition on the grounds that the employees sought to be represented by petitioner are security services personnel who are prohibited from joining or assisting the rank-and-file union, among others.

Issue: WON security guards may join rank-and-file or supervisors union.

Held:

While therefore under the old rules, security guards were barred from joining a labor organization of the rank and file, under RA 6715, they may now freely join a labor organization of the rank and file or that of the supervisory union, depending on their rank.

We are aware however of possible consequences in the implementation of the law in allowing security personnel to join labor unions within the company they serve. The law is apt to produce divided loyalties in the faithful performance of their duties. Economic reasons would present the employees concerned with the temptation to subordinate their duties to the allegiance they owe the union of which they are members, aware as they are that it is usually union action that obtains for them increased pecuniary benefits.

Thus, in the event of a strike declared by their union, security personnel may neglect or outrightly abandon their duties, such as protection of property of their employer and the persons of its officials and employees, the control of access to the employer’s premises, and the maintenance of order in the event of emergencies and untoward incidents.

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It is hoped that the corresponding amendatory and/or suppletory laws be passed by Congress to avoid possible conflict of interest in security personnel.

Petition dismissed.

from Atty. Alba^^

23. Philips Industrial Development, Inc. vs NLRC

Facts:- PIDI is a domestic corporation engaged in the manufacturing and marketing of electronic products.Since 1971, it had a total of 6 collective bargaining agreements with private respondent PhilipsEmployees Organization-FFW (PEO-FFW), a registered labor union and the certified bargaining agent of all rank and file employees of PIDI.- In the first CBA, the supervisors (referred to in RA 875), confidential employees, security guards,temporary employees and sales representatives were excluded in the bargaining unit. In the second to thefifth, the sales force, confidential employees and heads of small units, together with the managerialemployees, temporary employees and security personnel were excluded from the bargaining unit. Theconfidential employees are the division secretaries of light/telecom/data and consumer electronics,marketing managers, secretaries of the corporate planning and business manager, fiscal and financialsystem manager and audit and EDP manager, and the staff of both the General Management and thePersonnel Department.- In the sixth CBA, it was agreed that the subject of inclusion or exclusion of service engineers, sales personnel and confidential employees in the coverage of the bargaining unit would be submitted for arbitration. The parties failed to agree on a voluntary arbitrator and the Bureau of Labor Relationsendorsed the petition to the Executive Labor Arbiter of the NCR for compulsory arbitration.- March 1998, Labor Arbiter: A referendum will be conducted to determine the will of the serviceengineers and sales representatives as to their inclusion or exclusion in the bargaining unit. It was alsodeclared that the Division Secretaries and all staff of general management, personnel and industrialrelations department, secretaries of audit, EDP, financial system are confidential employees are deemedexcluded in the bargaining unit.- PEO-FFW appealed to the NLRC; NLRC declared PIDI's Service Engineers, Sales Force, divisionsecretaries, all Staff of General Management, Personnel and Industrial Relations Department, Secretariesof Audit, EDP and Financial Systems are included within the rank and file bargaining unit, citing theImplementing Rules of E.O 111 and Article 245 of the Labor Code (all workers, except managerialemployees and security personnel, are qualified to join or be a part of the bargaining unit)

Issue:-Whether service engineers, sales representatives and confidential employees of petitioner are qualified to be part of the existing bargaining unit- Whether the "Globe Doctrine" should be applied

Held: NLRC decision is set aside while the decision of the Executive Labor Arbiter is reinstated. Confidentialemployees are excluded from the bargaining unit while a referendum will be conducted to determine thewill of the service engineers and sales representatives as to their inclusion or exclusion from the bargaining unit, but those who are holding supervisory positions or functions are ineligible to join a labor organization of the rank and file employees but may join, assist or form a separate labor organization of their own.Ratio:The exclusion of confidential employees:The rationale behind the

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ineligibility of managerial employees to form, assist or join a labor union equally applies to confidential employees. With the presence of managerial employees in a union,the union can become company-dominated as their loyalty cannot be assured. In Golden Farms vs Calleja,the Court states that confidential employees, who have access to confidential information, may becomethe source of undue advantage.

Colgate v Ople

Facts: Before us is a Petition for Certiorari seeking to set aside and annul the Order of respondent Minister of Labor and Employment (MOLE) directly certifying private respondent as the recognized and duly-authorized collective bargaining agent for petitioner's sales force and ordering the reinstatement of three employees of petitioner.

The respondent Union, on the other hand, reiterated the issue in its Notice to Strike, alleging that it was duly registered with the Bureau of Labor Relations with a total membership of 87 regular salesmen (nationwide) out of 117 regular salesmen presently employed by the company as of November 30, 1985. In addition, it stated that since the registration of the Union up to the present, more than 213 of the total salesmen employed are already members of the Union, leaving no doubt that the true sentiment of the salesmen was to form and organize the Colgate Palmolive Salesmen Union. The Union further alleged that the company is unreasonably delaying the recognition of the union because when it was informed of the organization of the union, and when it was presented with a set of proposals for a collective bargaining agreement, the company took an adversarial stance by secretly distributing a "survey sheet on union membership" to newly hired salesmen from the Visayas, Mindanao and Metro Manila areas. Moreover, District Sales Managers and Sales Supervisors coerced salesmen from the Visayas and Mindanao by requiring them to fill up and/or accomplish said form by checking answers which were adverse to the union; that with a handful of the survey sheets secured by management through coercion, it now would like to claim that all salesmen are not in favor of the organization of the union, which acts are clear manifestations of unfair labor practices.

Issue: Whether or not the employer can be compelled to continue with the employment of a person who is guilty of misfeasance towards his employer.

Held: No. The order of the respondent Minister to reinstate the employees despite a clear finding of guilt on their part is not in conformity with law. Reinstatement is simply incompatible with a finding of guilt. Where the totality of the evidence was sufficient to warrant the dismissal of the employees the law warrants their dismissal without making any distinction between a first offender and a habitual delinquent. Under the law, the respondent Minister is duly mandated to equally protect and respect not only the labor or workers' side but also the management and/or employers' side. The law, in protecting the rights of the laborer, authorizes neither oppression nor self-destruction of the employer. To order the reinstatement of the erring employees namely, Mejia, Sayson and Reynante would in effect encourage unequal protection of the laws as a managerial employee of the petitioner company involved in the same incident which was already dismissed and was not ordered to be reinstated. As stated in the case of San Miguel Brewery vs. National Labor Union, "an employer cannot legally be compelled to continue with the employment of a person who admittedly was guilty of misfeasance or malfeasance towards his employer, and whose continuance in the service of the latter is patently inimical to his interest.”

24. Union of Nestlé Workers Cagayan de Oro Factory vs.

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Nestlé Philippines, Inc.

G.R. No. 148303. October 17, 2002.*

UNION OF NESTLÉ WORKERS CAGAYAN DE ORO FACTORY (UNWCF for brevity), represented by its President YURI P. BERTULFO and officers, namely, DEXTER E. AGUSTIN, DANTE S. SEÑAREZ, EDDIE P. OGNIR, JEFFREY C. RELLIQUETE, ENRIQUITO B. BUAGAS, EDWIN P. SALVAÑA, RAMIL B. MONSANTO, JERRY A. TABILIRAN, ARNOLD A. TADLAS, REYQUE A. FACTURA, NAPOLEON S. GALERINA, JR., TOLENTINO T. MICABALO and EDDIE O. MACASOCOL, petitioners, vs. NESTLÉ PHILIPPINES, INC., represented by its President JUAN B. SANTOS, RUDY P. TRILLANES, Factory Manager, Cagayan de Oro City Branch and FRANCIS L. LACSON, Cagayan de Oro City Human Resources Manager, respondents.

Actions; Pleadings and Practice; Jurisdiction; Well-settled is the rule that jurisdiction is determined by the allegations in the complaint.—On the first issue, we hold that petitioners’ insistence that the RTC has jurisdiction over their complaint since it raises constitutional and legal issues is sorely misplaced. The fact that the complaint was denominated as one for injunction does not necessarily mean that the RTC has jurisdiction. Well-settled is the rule that jurisdiction is determined by the allegations in the complaint. Labor Law; Management Prerogatives; Personnel Policies; Drug Testing; Company personnel policies are guiding principles stated in broad, long-range terms that express the philosophy or beliefs of an organization’s top authority regarding personnel matters.—Respondent Nestlé’s Drug Abuse Policy states that “(i)llegal drugs and use of regulated drugs beyond the medically prescribed limits are prohibited in the workplace. Illegal drug use puts at risk the integrity of Nestlé operations and the safety of our products. It is detrimental to the health, safety and work-performance of employees and is harmful to the welfare of families and the surrounding community.” This pronouncement is a guiding principle adopted by Nestlé to safeguard its employees’ welfare and ensure their efficiency and wellbeing. To our minds, this is a company personnel policy. In San Miguel Corp. vs. NLRC, this Court held: “Company personnel policies are guiding principles stated in broad, long-range terms that express the philosophy or beliefs of an organization’s top authority regarding personnel matters. They deal with matter affecting efficiency and well-being of employees and include, among others, the procedure in the administration of wages, benefits, promotions, transfer and other personnel movements which are usually not spelled out in the collective agreement.”

Same; Same; Same; Same; Courts; Jurisdiction; It is the Voluntary Arbitrators or Panel of Voluntary Arbitrators, not the Regional Trial Court, which exercises jurisdiction over a Drug Abuse Policy which is part of a company personnel policy.—Considering that the Drug Abuse Policy is a company personnel policy, it is the Voluntary Arbitrators or Panel of Voluntary Arbitrators, not the RTC, which exercises jurisdiction over this case. Article 261 of the Labor Code, as amended, pertinently provides: Art. 261. Jurisdiction of Voluntary Arbitrators or Panel of Voluntary Arbitrators.—The Voluntary Arbitrator or panel of Voluntary Arbitrators shall have original and exclusive jurisdiction to hear and decide all unresolved grievances arising from the interpretation or implementation of the Collective Bargaining Agreement and those arising from the interpretation or enforcement of company personnel policies x x x.” (Emphasis supplied)

Actions; Certiorari; For certiorari to prosper, it is not enough that the trial court committed grave abuse of discretion amounting to lack or excess of jurisdiction—the requirement that there is no appeal, nor any

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plain, speedy and adequate remedy in the ordinary course of law must likewise be satisfied.—With respect to the second issue raised by petitioners, what they should have interposed is an appeal to the Court of Appeals, not a petition for certiorari which they initially filed with this Court, since the assailed RTC order is final. Certiorari is not a substitute for an appeal. For certiorari to prosper, it is not enough that the trial court committed grave abuse of discretion amounting to lack or excess of jurisdiction, as

25. GENERAL MILLING CORPORATION vs HON. COURT OF APPEALS, GENERAL MILLINGCORPORATION INDEPENDENT LABOR UNION (GMC-ILU), and RITO MANGUBAT

FACTS: In its two plants located at Cebu City and Lapu-Lapu City, petitioner General MillingCorporation (GMC) employed 190 workers. They were all members of private respondent GeneralMilling Corporation Independent Labor Union. On April 28, 1989, GMC and the union concluded acollective bargaining agreement (CBA) which included the issue of representation effective for a termof three years. The day before the expiration of the CBA, the union sent GMC a proposed CBA, with arequest that a counter-proposal be submitted within ten (10) days. However, GMC had receivedcollective and individual letters from workers who stated that they had withdrawn from their unionmembership, on grounds of religious affiliation and personal differences. Believing that the union nolonger had standing to negotiate a CBA, GMC did not send any counter-proposal.

On December 16, 1991, GMC wrote a letter to the union’s officers, Rito Mangubat and Victor

Lastimoso. The letter stated that it felt there was no basis to negotiate with a union which no longerexisted, but that management was nonetheless always willing to dialogue with them on matters of common concern and was open to suggestions on how the company may improve its operations. Inanswer, the union officers wrote a letter dated December 19, 1991 disclaiming any massivedisaffiliation or resignation from the union and submitted a manifesto, signed by its members, statingthat they had not withdrawn from the union.NLRC held that the action of GMC in not negotiating was ULP.

ISSUE: WON the company (GMC) should have entered into collective bargaining with the union

HELD:

The law mandates that the representation provision of a CBA should last for fiveyears.

The relation between labor and managementshould be undisturbed until the last 60 daysof the fifth year.

Hence, it is indisputable that when the union requested for a renegotiation of the economic terms of the CBA on November 29, 1991,it was still the certified collective bargaining agent of the workers, because it was seeking said renegotiation within five (5) years from the date of effectivity of the CBA on December 1, 1988. The union’s proposal was also

submitted within the prescribed 3-year period from the date of effectivity of the CBA, albeit just before the last day of said period.

It was obvious that

GMC had no valid reason to refuseto negotiate in good faith with the union.

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For refusing to send a counter-proposal to the union

and to bargain anew on the economic terms of the CBA, the company committed an unfair laborpractice under Article 248 of the Labor Code.

ART. 253-A

Terms of a collective bargaining agreement.

Any Collective Bargaining Agreementthat the parties may enter into shall, insofar as the representation aspect is concerned, be for a term of five (5) years. No petition questioning the majority status of the incumbent bargaining

agent shall be entertained and no certification election shall be conducted by the Department of Laborand Employment outside of the sixty-day period immediately before the date of expiry of such fiveyear term of the Collective Bargaining Agreement. All other provisions of the Collective Bargaining

Agreement shall be renegotiated not later than three (3) years after its execution….

ART. 248

Unfair labor practices of employers.

It shall be unlawful for an employer to commitany of the following unfair labor practice:(g) To violate the duty to bargain collectively as prescribed by this Code;Under Article 252 abovecited, both parties are required to perform their mutual obligation to meet andconvene promptly and expeditiously in good faith for the purpose of negotiating an agreement. Theunion lived up to this obligation when it presented proposals for a new CBA to GMC within three (3)

26. G.R. No. 149434. June 3, 2004.*

PHILIPPINE APPLIANCE CORPORATION (PHILACOR), petitioner, vs. THE COURT OF APPEALS, THE HONORABLE SECRETARY OF LABOR BIENVENIDO E. LAGUESMA and UNITED PHILACOR WORKERS UNION-NAFLU, respondents.

Labor Law; Collective Bargaining Agreements; Signing Bonus; The signing bonus is a grant motivated by the goodwill generated when a CBA is successfully negotiated and signed between the employer and the union.—In the case of MERALCO v. The Honorable Secretary of Labor, we stated that the signing bonus is a grant motivated by the goodwill generated when a CBA is successfully negotiated and signed between the employer and the union. In that case, we sustained the argument of the Solicitor General, viz: When negotiations for the last two years of the 1992-1997 CBA broke down and the parties sought the assistance of the NCMB, but which failed to reconcile their differences, and when petitioner MERALCO bluntly invoked the jurisdiction of the Secretary of Labor in the resolution of the labor dispute, whatever goodwill existed between petitioner MERALCO and respondent union disappeared. . . . Verily, a signing bonus is justified by and is the consideration paid for the goodwill that existed in the negotiations that culminated in the signing of a CBA.

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Same; Same; Same; While the Court does not fault one party for failure of the negotiations, it is apparent that there was no more goodwill between the parties where the CBA was clearly not signed through their mutual efforts alone.—In the case at bar, the CBA negotiation between petitioner and respondent union failed notwithstanding the intervention of the NCMB. Respondent union went on strike for eleven days and blocked the ingress to and egress from petitioner’s two work plants. The labor dispute had to be referred to the Secretary of Labor and Employment because neither of the parties was willing to compromise their respective positions regarding the four remaining items which stood unresolved. While we do not fault any one party for the failure of the negotiations, it is apparent that there was no more goodwill between the parties and that the CBA was clearly not signed through their mutual efforts alone. Hence, the payment of the signing bonus is no longer justified and to order such payment would be unfair and unreasonable for petitioner.

Same; Same; Same; A bonus is not a demandable and enforceable obligation unless the giving of such bonus has been the company’s long and regular practice—i.e., the giving of the bonus should have been done over a long period of time, and must be shown to have been consistent and deliberate.—Furthermore, we have consistently ruled that a bonus is not a demandable and enforceable obligation. True, it may nevertheless be granted on equitable considerations as when the giving of such bonus has been the company’s long and regular practice. To be considered a “regular practice,” however, the giving of the bonus should have been done over a long period of time, and must be shown to have been consistent and deliberate. The test or rationale of this rule on long practice requires an indubitable showing that the employer agreed to continue giving the benefits knowing fully well that said employees are not covered by the law requiring payment thereof. Respondent does not contest the fact that petitioner initially offered a signing bonus only during the previous CBA negotiation. Previous to that, there is no evidence on record that petitioner ever offered the same or that the parties included a signing bonus among the items to be resolved in the CBA negotiation. Hence, the giving of such bonus cannot be deemed as an established practice considering that the same was given only once, that is, during the 1997 CBA negotiation.

27. NEW PACIFIC TIMBER & SUPPLY COMPANY, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, MUSIB M. BUAT, LEON G. GONZAGA, JR., ET AL., NATIONAL FEDERATION OF LABOR, MARIANO AKILIT and 350 OTHERS, respondents.

Labor Law; National Labor Relations Commission; Appeals; No grave abuse of discretion on the part of the NLRC, when it entertained the petition for relief filed by the private respondents and treated it as an appeal, even if it was filed beyond the reglementary period for filing an appeal.—We find no grave abuse of discretion on the part of the NLRC, when it entertained the petition for relief filed by the private respondents and treated it as an appeal, even if it was filed beyond the reglementary period for filing an appeal. Ordinarily, once a judgment has become final and executory, it can no longer be disturbed, altered or modified. However, a careful scrutiny of the facts and circumstances of the instant case warrants liberality in the application of technical rules and procedure. It would be a greater injustice to deprive the concerned employees of the monetary benefits rightly due them because of a circumstance over which they had no control.

Same; Same; Same; Supreme Court has allowed appeals from decisions of the Labor Arbiter to the NLRC, even if filed beyond the reglementary period in the interest of justice.—The Supreme Court-has

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allowed appeals from decisions of the labor arbiter to the NLRC, even if filed beyond the reglementary period, in the interest of justice. Moreover, under Article 218 (c) of the Labor Code, the NLRC may, in the exercise of its appellate powers, “correct, amend or waive any error, defect or irregularity whether in substance or in form.” Further, Article 221 of the same provides that: “In any proceeding before the Commission or any of the Labor Arbiters, the rules of evidence prevailing in courts of law or equity shall not be controlling and it is the spirit and intention of this Code that the Commission and its members and the Labor Arbiters shall use every and all reasonable means to ascertain the facts in each case speedily and objectively and without regard to technicalities of law or procedure, all in the interest of due process. x x x”

Same; Labor Code; Labor Unions; Until a new Collective Bargaining Agreement has been executed by and between the parties, they are duty bound to keep the status quo and to continue in full force and effect the terms and conditions of the existing agreement.—It is clear from the above provision of law that until a new Collective Bargaining Agreement has been executed by and between the parties, they are duty-bound to keep the status quo and to continue in full force and effect the terms and conditions of the existing agreement. The law does not provide for any exception nor qualification as to which of the economic provisions of the existing agreement are to retain force and effect; therefore, it must be understood as encompassing all the terms and conditions in the said agreement.

Same; Same; Same; When a collective bargaining contract is entered into by the union representing the employees and the employer, even the non-member employees are entitled to the benefits of the contract.—In a long line of cases, this Court has held that when a collective bargaining contract is entered into by the union representing the employees and the employer, even the non-member employees are entitled to the benefits of the contract. To accord its benefits only to members of the union without any valid reason would constitute undue discrimination against nonmembers. It is even conceded, that a laborer can claim benefits from a CBA entered into between the company and the union of which he is a member at the time of the conclusion of the agreement, after he has resigned from said union.

SPECIAL CIVIL ACTION in the Supreme Court. Certiorari.

The facts are stated in the opinion of the Court.

     Siguion-Reyna, Montecillo & Ongsiako for petitioner.

     Rene J. Santos and Romulo D. Plagata for private respondents.

     Dioscoro Albarico, Sr. authorized representative of private respondents.

KAPUNAN, J.:

May the term of a Collective Bargaining Agreement (CBA) as to its economic provisions be extended beyond the term expressly stipulated therein, and, in the absence of a new CBA, even beyond the three-year period provided by law? Are employees hired after the stipulated term of a CBA entitled to the benefits provided thereunder?

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These are the issues at the heart of the instant petition for certiorari with prayer for the issuance of preliminary injunction and/or temporary restraining order filed by petitioner New Pacific Timber & Supply Company, Incorporated against the National Labor Relations Commission (NLRC), et al. and the National Federation of Labor, et al.

The antecedent facts, as found by the NLRC, are as follows:

The National Federation of Labor (NFL, for brevity) was certified as the sole and exclusive bargaining representative of all the regular rank-and-file employees of New Pacific Timber & Supply Co., Inc. (hereinafter referred to as petitioner Company).1 As such, NFL started to negotiate for better terms and conditions of employment for the employees in the bargaining unit which it represented. However, the same was allegedly met with stiff resistance by petitioner Company, so that the former was prompted to file a complaint for unfair labor practice (ULP) against the latter on the ground of refusal to bargain collectively.2

On March 31, 1987, then Executive Labor Arbiter Hakim S. Abdulwahid issued an order declaring (a) herein petitioner Company guilty of ULP; and (b) the CBA proposals submitted by the NFL as the CBA between the regular rank-and-file employees in the bargaining unit and petitioner Company.3

Petitioner Company appealed the above order to the NLRC. On November 15, 1989, the NLRC rendered a decision dismissing the appeal for lack of merit. A motion for reconsideration thereof was, likewise, denied in a Resolution, dated November 12, 1990.4 Unsatisfied, petitioner Company filed a petition for certiorari with this Court. But the Court dismissed said petition in a Resolution, dated January 21, 1991.5

Thereafter, the records of the case were remanded to the arbitration branch of origin for the execution of Labor Arbiter Abdulwahid’s Order, dated March 31, 1987, granting monetary benefits consisting of wage increases, housing allowances, bonuses, etc. to the regular rank-and-file employees. Following a series of conferences to thresh out the details of computation, Labor Arbiter Reynaldo S. Villena issued an Order, dated October 18, 1993, directing petitioner Company to pay the 142 employees entitled to the aforesaid benefits the respective amounts due them under the CBA. Petitioner Company complied; and, the corresponding quitclaims were executed. The case was considered closed following NFL’s manifestation that it will no longer appeal the October 18, 1993 Order of Labor Arbiter Villena.6

However, notwithstanding such manifestation, a “Petition for Relief was filed in behalf of 186 of the private respondents “Mariano J. Akilit and 350 others” on May 12, 1994. In their petition, they claimed that they were wrongfully excluded from enjoying the benefits under the CBA since the agreement with NFL and petitioner Company limited the CBA’s implementation to only the 142 rank-and-file employees enumerated. They claimed that NFL’s misrepresentations had precluded them from appealing their exclusion.7

Treating the petition for relief as an appeal, the NLRC entertained the same. On August 4, 1994, said commission issued a resolution8 declaring that the 186 excluded employees “form part and parcel of the then existing rank-and-file bargaining unit” and were, therefore, entitled to the benefits under the CBA. The NLRC held, thus: [New Pacific Timber & Supply Company, Inc. vs. NLRC, 328 SCRA 404(2000)]

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FACTS: The NFL was the sole and exclusive bargaining representative for the rank and file employees of petitioner. NFL started to negotiate for better terms and conditions of employment; which were met with resistance by Petitioner Company. The NFL filed a complaint for ULP on the ground of refusal to bargain collectively. LA issued an order declaring the company guilty of ULP and ordering the CBA proposals submitted by the NFL as the CBA between parties. Later, 186 of private respondents claiming they were wrongfully excluded from the benefits under the CBA filed a petition for relief. Petitioner asserts that private respondents are not parties to the agreement and may not claim benefits thereunder. As for the CBA, petitioner maintains that the force and effect of the CBA’s terms are limited to only three years and cannot extend to terms and conditions which ceased to have force and effect.

ISSUES:

1. W/N the terms of an existing CBA as to its economic provisions can be extended beyond the period stipulated therein, even beyond the three year period prescribed by law, in the absence of a new agreement.

2. W/N the rank and file employees hired after the term of the CBA, considering their subsequent membership in the bargaining unit, are parties to the agreement and may claim benefits thereunder.

HELD:

1. Yes. It is clear from Art. 253 that until a new CBA has been executed by and between the parties; they are duly bound to keep the status quo and to continue in full force and effect the terms and conditions of the existing agreement. In the case at bar, no new agreement was entered between the parties pending appeal of the decision in the NLRC. Consequently, the employees from to the year 1985 (after expiration of the CBA) onwards would be deprived of a substantial amount of monetary benefits if the terms and conditions of the CBA were not to remain in force and effect which runs counter to the intent of the Labor Cod to curb labor unrest and promote industrial peace.

2. Yes. When a CBA is entered into by the union representing the employees and the employer, even the non-union members are entitled to the benefits of the contract. A laborer can claim benefits from a CBA entered into the company and the union of which he is a member at the time of the conclusion of the agreement even after he has resigned from said union. Therefore, the benefits under the CBA should be extended to those who only became such after it expired; to exclude them would constitute undue discrimination.