[G.R. No. 118651. October 16, 1997] decision.
decision.[2] Petitioners filed their partial motion for reconsideration which the
PIONEER TEXTURIZING CORP. and/or JULIANO LIM, petitioners, vs.
NATIONAL LABOR RELATIONS COMMISSION, PIONEER TEXTURIZING
WORKERS UNION and LOURDES A. DE JESUS, respondents.
DECISION
FRANCISCO, J.:
The facts are as follows:
Private respondent Lourdes A. de Jesus is petitioners reviser/trimmer since 1980.
As reviser/trimmer, de Jesus based her assigned work on a paper note posted by
petitioners. The posted paper which contains the corresponding price for the work
to be accomplished by a worker is identified by its P.O. Number. On August 15,
1992, de Jesus worked on P.O. No. 3853 by trimming the cloths ribs. She
thereafter submitted tickets corresponding to the work done to her supervisor.
Three days later, de Jesus received from petitioners personnel manager a
memorandum requiring her to explain why no disciplinary action should be taken
against her for dishonesty and tampering of official records and documents with
the intention of cheating as P.O. No. 3853 allegedly required no trimming. The
memorandum also placed her under preventive suspension for thirty days
starting from August 19, 1992. In her handwritten explanation, de Jesus
maintained that she merely committed a mistake in trimming P.O. No. 3853 as it
has the same style and design as P.O. No. 3824 which has an attached price list
for trimming the ribs and admitted that she may have been negligent in
presuming that the same work was to be done with P.O. No. 3853, but not for
dishonesty or tampering Petitioners personnel department, nonetheless,
terminated her from employment and sent her a notice of termination dated
September 18, 1992.
On September 22, 1992, de Jesus filed a complaint for illegal dismissal against
petitioners. The Labor Arbiter who heard the case noted that de Jesus was amply
accorded procedural due process in her termination from service. Nevertheless,
after observing that de Jesus made some further trimming on P.O. No. 3853 and
that her dismissal was not justified, the Labor Arbiter held petitioners guilty of
illegal dismissal. Petitioners were accordingly ordered to reinstate de Jesus to her
previous position without loss of seniority rights and with full backwages from the
time of her suspension on August 19, 1992. Dissatisfied with the Labor Arbiters
decision, petitioners appealed to the public respondent National Labor Relations
Commission (NLRC). In its July 21, 1994 decision, the NLRC[1] ruled that de Jesus
was negligent in presuming that the ribs of P.O. No. 3853 should likewise be
trimmed for having the same style and design as P.O. No. 3824, thus petitioners
cannot be entirely faulted for dismissing de Jesus. The NLRC declared that the
status quo between them should be maintained and affirmed the Labor Arbiters
order of reinstatement, but without backwages. The NLRC further directed
petitioner to pay de Jesus her back salaries from the date she filed her motion for
execution on September 21, 1993 up to the date of the promulgation of [the]
NLRC denied, hence this petition anchored substantially on the alleged NLRCs
error in holding that de Jesus is entitled to reinstatement and back salaries. On
March 6, 1996, petitioners filed its supplement to the petition amplifying further
their arguments. In a resolution dated February 20, 1995, the Court required
respondents to comment thereon. Private respondent de Jesus and the Office of
the Solicitor General, in behalf of public respondent NLRC, subsequently filed their
comments. Thereafter, petitioners filed two rejoinders [should be replies] to
respondents respective comments. Respondents in due time filed their rejoinders.
These are two interrelated and crucial issues, namely: (1) whether or not de Jesus
was illegally dismissed, and (2) whether or not an order for reinstatement needs a
writ of execution.
Petitioners insist that the NLRC gravely abused its discretion in holding that de
Jesus is entitled to reinstatement to her previous position for she was not illegally
dismissed in the first place. In support thereof, petitioners quote portions of the
NLRC decision which stated that respondent [petitioners herein] cannot be
entirely faulted for dismissing the complaint[3] and that there was no illegal
dismissal to speak of in the case at bar.[4] Petitioners further add that de Jesus
breached the trust reposed in her, hence her dismissal from service is proper on
the basis of loss of confidence, citing as authority the cases of Ocean Terminal
Services, Inc. v. NLRC, 197 SCRA 491; Coca-Cola Bottlers Phil., Inc. v. NLRC, 172
SCRA 751, and Piedad v. Lanao del Norte Electric Cooperative,[5] 154 SCRA 500.
The arguments lack merit.
The entire paragraph which comprises the gist of the NLRCs decision from where
petitioners derived and isolated the aforequoted portions of the NLRCs
observation reads in full as follows:
We cannot fully subscribe to the complainants claim that she trimmed the ribs of
PO3853 in the light of the sworn statement of her supervisor Rebecca Madarcos
(Rollo, p. 64) that no trimming was necessary because the ribs were already of
the proper length. The complainant herself admitted in her sinumpaang salaysay
(Rollo, p. 45) that Aking napansin na hindi pantay-pantay ang lapad ng mga ribs
PO3853 - mas maigsi ang nagupit ko sa mga ribs ng PO3853 kaysa sa mga ribs
ng mga nakaraang POs. The complaint being an experienced reviser/trimmer for
almost twelve (12) years should have called the attention of her supervisor
regarding her observation of PO3853. It should be noted that complainant was
trying to claim as production output 447 pieces of trimmed ribs of PO3853 which
respondents insists that complainant did not do any. She was therefore negligent
in presuming that the ribs of PO3853 should likewise be trimmed for having the
same style and design as PO3824. Complainant cannot pass on the blame to her
supervisor whom she claimed checked the said tickets prior to the submission to
the Accounting Department. As explained by respondent, what the supervisor
does is merely not the submission of tickets and do some checking before
forwarding the same to the Accounting Department. It was never disputed that it
is the Accounting Department who does the detailed checking and computation of
the tickets as has been the company policy and practice. Based on the foregoing
and considering that respondent cannot be entirely faulted for dismissing
complainant as the complainant herself was also negligent in the performance of
her job, We hereby rule that status quo between them should be maintained as a
matter of course. We thus affirm the decision of Labor Arbiter reinstating the
complainant but without backwages. The award of backwages in general are
granted on grounds of equity for earnings which a worker or employee has lost
due to his illegal dismissal. (Indophil Acrylic Mfg. Corporation vs. NLRC, G.R. No.
96488 September 27, 1993) There being no illegal dismissal to speak in the case
at bar, the award for backwages should necessarily be deleted.[6]
We note that the NLRCs decision is quite categorical in finding that de Jesus was
merely negligent in the performance of her duty. Such negligence, the Labor
Arbiter delineated, was brought about by the petitioners plain improvidence.
Thus:
After careful assessment of the allegations and documents available on record,
we are convinced that the penalty of dismissal was not justified.
At the outset, it is remarkable that respondents did not deny nor dispute that P.O.
3853 has the same style and design as P.O. 3824; that P.O. 3824 was made as
guide for the work done on P.O. 3853; and, most importantly, that the notation
correction on P.O. 3824 was made only after the error was discovered by
respondents Accounting Department.
Be sure that as it may, the factual issue in this case is whether or not complaint
trimmed the ribs of P.O. 3853?
Respondents maintained that she did not because the record in Accounting
Department allegedly indicates that no trimming is to be done on P.O. 3853.
Basically, this allegation is unsubstantiated.
It must be emphasized that in termination cases the burdent of proof rests upon
the employer.
In the instant case, respondents mere allegation that P.O. 3853 need not be
trimmed does not satisfy the proof required to warrant complainants dismissal.
Now, granting that the Accounting record is correct, we still believe that
complainant did some further trimming on P.O. 3853 based on the following
grounds:
First, Supervisor Rebecca Madarcos who ought to know the work to be performed
because she was in-charged of assigning jobs, reported no anomally when the
tickets were submitted to her.
Incidentally, supervisor Madarcos testimony is suspect because if she could recall
what she ordered the complainant to do seven (7) months ago (to revise the
collars and plackets of shirts) there was no reason for her not to detect the
alleged tampering at the time complainant submitted her tickets, after all, that
was part of her job, if not her main job.
Secondly, she did not exceed her quota, otherwise she could have simply asked
for more.
That her output was remarkably big granting misinterpreted it is true, is well
explained in that the parts she had trimmed were lesser compared to those which
she had cut before.
In this connection, respondents misinterpreted the handwritten explanation of the
complainant dated 20 August 1992, because the letter never admits that she
never trimmed P.O. 3853, on the contrary the following sentence,
Sa katunayan nakapagbawas naman talaga ako na di ko inaasahang inalis na pala
ang presyo ng Sec. 9 P.O. 3853 na ito.
is crystal clear that she did trim the ribs on P.O. 3853. [7]
Gleaned either from the Labor Arbiters observations or from the NLRCs
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 burdent 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.[8] Lack
of a just cause in the dismissal from service of an employee, as in this case,
renders the dismissal illegal, despite the employers observance of procedural due
process.[9] And while the NLRC stated that there was no illegal dismissal to speak
of in the case at bar and that petitioners cannot be entirely faulted therefor, said
statements are inordinate pronouncements which did not remove the assailed
dismissal from the realm of illegality. Neither can these pronouncements preclude
us from holding otherwise.
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.[10] The employer should bear
in mind that, in the exercise of such right, what is at stake is not only the
employees position but her livelihood as well.
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 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.[11] In this cae, 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 employees functions.[12] Surely, de Jesus
who occupies the position of a reviser/trimmer does not require the petitioners
perpetual and full confidence. In this regard, petitioners reliance on the cases of
Ocean Terminal Services, Inc. v. NLRC; Coca-Cola Bottlers Phil., Inc. v. NLRC; and
Piedad v. Lanao del Norte Electric Cooperative, which when perused involve
positions that require the employers full trust and confidence, is wholly
misplaced. In Ocean Terminal Services, for instance, the dismissed employee was
designated as expediter and canvasser whose responsibility is mainly to make
emergency procurements of tools and equipments and was entrusted with the
necessary cash for buying them. The case of Coca-Cola Bottlers, on the other
hand, involves a sales agent whose job exposes him to the everyday financial
transactions involving the employers goods and funds, while that of Piedad
concerns a bill collector who essentially handles the employers cash collections.
Undoubtedly, the position of a reviser/trimmer could not be equated with that of a
canvasser, sales agent, or a bill collector. Besides, the involved employees in the
three aforementioned cases were clearly proven guilty of infractions unlike
private respondent in the case at bar. Thus, petitioners dependence on these
cited cases is inaccurate, to say the least. More, whether or not de Jesus meets
the days quota of work she, just the same, is paid the daily minimum wage.[13]
Corollary to our determination that de Jesus was illegally dismissed is her
imperative entitlement to reinstatement and backwages as mandated by law.[14]
Whence, we move to the second issue, i.e., whether or not an order for
reinstatement needs a writ of execution.
Petitioners theory is that an order for reinstatement is not self-executory. They
stress that there must be a writ of execution which may be issued by the NLRC or
by the Labor Arbiter motu proprio or on motion of an interested party. They
further maintain that even if a writ of execution was issued, a timely appeal
coupled by the posting of appropriate supersedeas bond, which they did in this
case, effectively forestalled and stayed execution of the reinstatement order of
the Labor Arbiter. As supporting authority, petitioners emphatically cite and bank
on the case of Maranaw Hotel Resort Corporation (Century Park Sheraton Manila)
v. NLRC, 238 SCRA 190.
Private respondent de Jesus, for her part, maintains that petitioners should have
reinstated her immediately after the decision of the Labor Arbiter ordering her
reinstatement was promulgated since the law mandates that an order for
reinstatement is immediately executory. An appeal, she says, could not stay the
execution of a reinstatement order for she could either be admitted back to work
or merely reinstated in the payroll without need of a writ of execution. De Jesus
argues that a writ of execution is necessary only for the enforcement of decisions,
orders, or awards which have acquired finality. In effect, de Jesus is urging the
Court to re-examine the ruling laid down in Maranaw.
Article 223 of the Labor Code, as amended by R.A. No. 6715 which took effect on
March 21, 1989, pertinently provides:
ART. 223. Appeal. --Decisions, awards, or orders of the Labor Arbiter are final and
executory unless appealed to the Commission by any or both parties within ten
(10) calendar days from receipt of such decisions, awards, or orders. Such appeal
maybe entertained only on any of the following grounds:
xxx xxx xxx
In an event, the decision of the Labor Arbiter reinstating a dismissed or separated
employee, insofar as the reinstatement aspect is concerned, shall immediately be
executory, even pending appeal. The employee shall either be admitted back to
work under the same terms and conditions prevailing prior to his dismissal or
separation or, at the option of the employer, merely reistated in the payroll. The
posting of a bond by the employer shall not stay the execution for reinstatement
provided herein.
xxx xxx xxx
We initially interpreted the aforequoted provision in Inciong v. NLRC.[15] The
Court[16] made this brief comment:
The decision of the Labor Arbiter in this case was rendered on December 18,
1988, or three (3) months before Article 223 of the Labor Code was amended by
Republic Act 6715 (which became law on March 21, 1989), providing that a
decision of the Labor Arbiter ordering the reinstatement of a dismissed or
separated employee shall be immediately executory insofar as the reinstatement
aspect is concerned, and the posting of an appeal bond by the employer shall not
stay such execution. Since this new law contains no provision giving it retroactive
effect (Art. 4, Civil Code), the amendment may not be applied to this case.
which the Court adopted and applied in Callanta v. NLRC.[17] In Zamboanga City
Water District v. Buat,[18] the Court construed Article 223 to mean exactly what it
says. We said:
Under the said provision of law, the decision of the Labor Arbiter reinstating a
dismissed or separated employee insofar as the reinstatement aspect is
concerned, shall be immediately executory, even pending appeal. The employer
shall reinstate the employee concerned either by: (a) actually admitting him back
to work under the same terms and conditions prevailing prior to his dismissal or
separation; or (b) at the option of the employer, merely reinstating him in the
payroll. Immediate reinstatement is mandated and is not stayed by the fact that
the employer has appealed, or has posted a cash or surety bond pending appeal.
[19]
We expressed a similar view a year earlier in Medina v. Consolidated Broadcasting
System (CBS) DZWX[20] and laid down the rule that an employer who fails to
comply with an order of reinstatement makes him liable for the employees
salaries. Thus:
Petitioners construe the above paragraph to mean that the refusal of the
employer to reinstate an employee as directed in an executory order of
reinstatement would make it liable to pay the latters salaries. This interpretation
is correct. Under Article 223 of the Labor Code, as amended, an employer has two
options in order for him to comply with an order of reinstatement, which is
immediately executory, even pending appeal. Firstly, he can admit the dismissed
employee back to work under the same terms and conditions prevailing prior to
his dismissal or separation or to a substantially equivalent position if the former
position is already filled up as we have ruled in Union of Supervisors (RB) NATU
vs. Sec. of Labor, 128 SCRA 442 [1984]; and Pedroso vs. Castro, 141 SCRA 252
[1986]. Secondly, he can reinstate the employee merely in the payroll. Failing to
exercise any of the above options, the employer can be compelled under pain of
contempt, to pay instead the salary of the employee. This interpretation is more
in consonance with the constitutional protection to labor (Section 3, Art. XIII, 1987
Constitution). The right of a person to his labor is deemed to be property within
the meaning of the constitutional guaranty that no one shall be deprived of life,
liberty, and property without due process of law. Therefore, he should be
protected against any arbitrary and unjust deprivation of his job (Bondoc vs.
Peoples Bank and Trust Co., Inc., 103 SCRA 599 [1981]). The employee should not
be left without any remedy in case the employer unreasonably delays
reinstatement. Therefore, we hold that the unjustified refusal of the employer to
reinstate an illegally dismissed employee entitles the employee to payment of his
salaries x x x.[21]
The Court, however, deviated from this construction in the case of Maranaw.
Reinterpreting the import of Article 223 in Maranaw, the Court[22] declared that
the reinstatement aspect of the Labor Arbiters decision needs a writ of execution
as it is not self-executory, a declaration the Court recently reiterated and adopted
in Archilles Manufacturing Corp. v. NLRC.[23]
We note that prior to the enactment of R.A. No. 6715, Article 223[24] 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 therby the legislatures
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[25] and that the presumption is that the word shall, when used in a
statute, is mandatory.[26] 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. In Globe-Mackay Cable and Radio Corporation v. NLRC,[27] we held that:
Under the principles of statutory construction, if a statute is clear, plain and free
from ambiguity, it must be given its literal meaning and applied without
attempted interpretation. This plain-meaning rule or verba legis derived from the
maxim index animi sermo est (speech is the index of intention) rests on the valid
presumption that the words employed by the legislature in a statute correctly
express its intent by the use of such words as are found in the statute. Verba legis
non est recedendum, or from the words of a statute there should be no departure.
[28]
And in conformity with the executory nature of the reinstatement order, Rule V,
Section 16 (3) of the New Rules of Procedure of the NLRC strictly requires the
Labor Arbiter to direct the employer to immediately reinstate the dismissed
employee. Thus:
In case the decision includes an order of reinstatement, the Labor Arbiter shall
direct the employer to immediately reinstate the dismissed or separated
employee even pending appeal. The order of reinstatement shall indicate that the
employee shall either be admitted back to work under the same terms and
conditions prevailing prior to his dismissal or separation or, at the option of the
employer, merely reinstated in the payroll.
In declaring that reinstatement order is not self-executory and needs a writ of
execution, the Court, in Maranaw, adverted to the rule provided under Article 224.
We said:
It must be stressed, however, that although the reinstatement aspect of the
decision is immediately executory, it does not follow that it is self-executory.
There must be a writ of execution which may be issued motu proprio or on motion
of an interested party. Article 224 of the Labor Code provides:
ART. 224. Execution of decisions, orders or awards. (a) The Secretary of Labor and
Employment or any Regional Director, the Commission or any Labor Arbiter, or
med-arbiter or voluntary arbitrator may, motu propio or on motion of any
interested party, issue a writ of execution on a judgment within five (5) years
from the date it becomes final and executory (emphasis supplied)
The second paragraph of Section 1, Rule VIII of the New Rules of Procedure of the
NLRC also provides:
The Labor Arbiter, POEA Administrator, or the Regional Director, or his duly
authorized hearing officer of origin shall, motu propio or on motion of any
interested party, issue a writ of execution on a judgment within five (5) years
from the date it becomes final and executory . No motion for execution shall be
entertained nor a writ be issued unless the Labor Arbiter is in possession of the
records of the case which shall include an entry of judgment. (emphasis supplied)
xxx xxx xxx
In the absence them of an order for the issuance of a writ of execution on the
reinstatement aspect of the decision of the Labor Arbiter, the petitioner was
under no legal obligation to admit back to work the private respondent under the
terms and conditions prevailing prior to her dismissal or, at the petitioners option,
to merely reinstate her in the payroll. An option is a right of election to exercise a
privilege, and the option in Article 223 of the Labor Code is exclusively granted to
the employer. The event that gives rise for its exercise is not the reinstatement
decree of a Labor Arbiter, but the writ for its execution commanding the employer
to reinstate the employee, while the final act which compels the employer to
exercise the option is the service upon it of the writ of execution when, instead of
admitting the employee back to his work, the employer chooses to reinstate the
employee in the payroll only. If the employer does not exercise this option, it must
forthwith admit the employee back to work, otherwise it may be punished for
contempt.[29]
A closer examination, however, shows that the necessity for a writ of execution
under Article 224 applies only to final and executory decisions which are not
within the coverage of Article 223. For comparison, we quote the material
portions of the subject articles:
ART. 223. Appeal. x x x
In any event, the decision of the Labor Arbiter reinstating a dismissed or
separated employee, insofar as the reinstatement aspect is concerned, shall
immediately be executory, even pending appeal. The employee shall either be
admitted back to work under the same terms and conditions prevailing prior to
his dismissal or separation or, at the option of the employer, merely reinstated in
the payroll. The posting of a bond by the employer shall not stay the execution for
reinstatement provided herein.
xxx xxx xxx
ART. 224. Execution of decisions, orders, or awards. --(a) The Secretary of Labor
and Employment or any Regional Director, the Commission or any Labor Arbiter,
or med-arbiter or voluntary arbitrator may, motu propio or on motion of any
interested party, issue a writ of execution on a judgment within five (5) years
from the date it becomes final and executory, requiring a sheriff or a duly
deputized officer to execute or enforce final decicions, orders or awards of the
Secretary of Labor and Employment or regional director, the Commission, the
arbiter or med-arbiter, or voluntary arbitrators. In any case, it shall be the duty of
the responsible officer to separately furnish immediately the counsels of record
and the parties with copies of said decisions, orders or awards. Failure to comply
with the duty prescribed herein shall subject such responsible officer to
appropriate administrative sanctions."
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 awards becomes final and executory. It
cannot 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 content 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. In enacting the law, the legislature is presumed to have ordaineda
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.[30] And where
statues are fairly susceptible of two or more construction, that construction
should be adopted which will most tend to give effect to the manifest intent of the
law maker 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.[31] 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.
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 reinstatement does not require a writ of execution the Court is simply
adhering and giving meaning to this rule. Henceforth, we rule that 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. In
either instance, the employer has to inform the employee of his choice. The
notification is based on practical considerations for without notice, the employee
has no way of knowing if he has to report for work or not.
WHEREFORE, the petition is DENIED and the decision of the Labor Arbiter is
hereby REINSTATED.
Costs against petitioner.
SO ORDERED.
YUPANGCO COTTON MILLS, INC., petitioner, vs. RODRIGO SY MENDOZA, BOY
RAYMUNDO, ANAM TIMBAYAN, RENE MASILUNGAN and ELPIDIO CERVANTES,
respondents.
DECISION
TINGA, J.:
In the maze of the flurry of suits and counter-suits between the contending
parties, the central question posed before the Court in this petition is whether the
prevailing party or its representatives, as well as the sheriffs, may be haled to
court on robbery charges for hauling the properties which said party purchased at
the execution sale.
This is a petition for review on certiorari, assailing the Decision[1] of the Court of
Appeals dated 09 October 1998 and Resolution[2] dated 17 August 1999 in
CAG.R. SP No. 46811 entitled Rodrigo Sy Mendoza, et al. v. The Honorable
Secretary of Justice Silvestre Bello III, et al.
In 1986, the Development Bank of the Philippines foreclosed the properties
mortgaged to it by Artex Development Company (Artex). The loan of Artex was
thereafter transferred to the Assets Privatization Trust, which created a Direct
Debt Buy-Out Scheme to enable Artex to pay its loans. In 1989, Yupangco Cotton
Mills, Inc. bought the real and personal properties of Artex, otherwise known as
the Artex Compound in Panghulo, Malabon. On 15 May 1991, new transfer
certificates of title over these properties were issued in the name of Yupangco.[3]
Sometime in 1990, the Samahang Manggagawa ng Artex Union (SAMAR) filed a
complaint docketed as NLRC-NCR Case No. 00-05-02960-90 with the National
Labor Relations Commission (NLRC) for underpayment of wages against Artex.[4]
On 08 October 1992, Labor Arbiter Ramon Valentin Reyes found Artex liable and
ordered it to pay the complaining members of SAMAR wage differentials
amounting to P19,824,804.00. Artex appealed the decision, but the appeal was
dismissed for having been filed out of time. Entry of judgment was recorded on 17
January 1994. Thus, SAMAR moved for the issuance of the corresponding writ of
execution and Labor Arbiter Reyes obliged by issuing the writ on 28 September
1993.[5]
On 06 October 1994, Sheriff Max Lago of the NLRC, together with officers of
SAMAR went to the Artex Compound in Panghulo, Malabon to implement the writ
of execution but failed to do so because security guards prevented their entry
therein. On 12 October 1994, SAMAR filed a motion for the issuance of a break-
open order so that the writ could be implemented.[6]
On 18 October 1994, the Malabon Municipal Assessor issued a certification to the
effect that the Artex Compound had been transferred to Yupangco Cotton Mills,
Inc. since February 1991. The same information was reflected in the Sheriffs
Return dated 29 November 1994.[7] Nonetheless, a break-open order was issued
by the Labor Arbiter on 30 March 1995. Yupangco moved to set aside this order
on 26 April 1995, but its motion was denied on 01 June 1995.
Meanwhile, on 22 April 1995, Labor Arbiter Reyes issued an Order,[8] the
dispositive portion of which reads:
WHEREFORE, premises considered, the assigned Sheriff in this case and his
assistants are hereby ordered with the assistance of the police or military, if they
deem necessary for an orderly implementation of this Order, to gain access to the
premises/compound of the respondent corporation where the properties may be
found by breaking open doors, windows, gates and other obstacles leading to said
properties.[9]
An Alias Writ of Execution was issued on 25 April 1995.
On 04 May 1995, Yupangco filed a Notice of Third Party Claim[10] with the NLRC,
claiming ownership over the Artex Compound and praying for the stay of any
break-open order until further hearing of the case. Thereafter, on 12 May 1995,
Yupangco filed an Urgent Motion to Quash the Alias Writ of Execution.[11]
On 03 July 1995, Sheriff Lago levied all the properties found inside the Artex
Compound.[12] A day later, or on 04 July 1995, Yupangco filed an Affidavit of
Adverse Claim,[13] alleging, among others, that Yupangco is the owner in fee
simple of all the properties of Artex. In the 30 August 1995 Order of Labor Arbiter
Reyes, Yupangcos notice of adverse claim was dismissed for lack of merit.[14]
Aggrieved, Yupangco filed a petition for certiorari and prohibition with the
Regional Trial Court (RTC) of Manila, docketed as Civil Case No. 95-75628, entitled
Yupangco Cotton Mills, Inc. v. Hon. Ramon Valentin Reyes, et al., maintaining that
it was the owner of all the properties previously belonging to Artex.[15] The
petition was dismissed on 11 October 1995, with the trial court ruling that the
dismissal of Yupangcos third party claim is appealable to the NLRC and recourse
to the regular court does not lie.
In view of the dismissal of the petition for certiorari and prohibition, SAMAR
moved for the issuance of an alias writ of execution. On 18 October 1995, a third
alias writ of execution was issued.[16] After the filing of an indemnity bond of
P10,000,000.00[17] by SAMAR, and upon due publication and notice, the sheriff
sold the levied properties in a public auction held on 13 November 1995, wherein
SAMAR, as represented by its President, Rustico Cortez, emerged as the winning
bidder.[18] Thereafter, SAMAR sold the properties to Rodrigo Sy Mendoza.[19]
On 14 November 1995, the sheriff started to withdraw from Artex Compound the
levied properties sold at the execution sale.[20] On 16 November 1995, Yupangco
filed a petition for mandatory injunction, docketed as NLRC NCR IC No. 0000602-
95 and entitled Yupangco Cotton Mills, Inc. v. Hon. Ramon Valentin Reyes, et al.
[21] Acting on the petition, the NLRC issued a temporary restraining order
enjoining the enforcement of the final judgment.[22]
Meanwhile, on 08 December 1995, the NLRC issued a resolution dismissing
Yupangcos appeal from the denial of its adverse claim.[23] In view of this
dismissal, on 09 December 1995, SAMAR and Mendoza, with the assistance of
sheriffs Timbayan and Masilungan and some members of the Malabon police
force, proceeded to the Artex Compound to haul the properties bought at the
public auction.[24]
Undaunted, Yupangco filed a complaint, docketed as Civil Case No. 95-76395 with
the RTC of Manila for recovery of property and damages with prayer for the
issuance of a temporary restraining order and/or writ of preliminary prohibitory
and mandatory injunction.[25] On 12 December 1995, the RTC of Manila, Branch
50 issued a temporary restraining order for three (3) days, which was extended
by seventeen (17) more days by virtue of an order dated 15 December 1995.[26]
On 05 January 1996, the complaint was, however, dismissed for lack of
jurisdiction.[27]
In view of the dismissal of the complaint, SAMAR requested the sheriffs assistance
for the continuation of the hauling of the properties sold on execution. Hence, on
10 January 1996, acting on the letter request of SAMAR, members of SAMAR,
Mendoza, with sheriffs Timbayan and Masilungan and some members of the
Malabon police continued the hauling of the properties.[28]
Yupangco moved for the reconsideration of the dismissal of Civil Case No. 95-
76395, and by reason thereof, the trial court issued a status quo order on 11
January 1996, which was complied with by respondents.[29] Yupangcos motion for
reconsideration was eventually denied on 31 January 1996.[30]
Once more, SAMAR requested the sheriffs assistance in hauling out the properties
from the Artex Compound. Hence, on 03 February 1996, more properties subject
of the auction sale were hauled out.[31]
Unhappy with the decision of the RTC, Yupangco filed a special civil action for
certiorari and mandamus with the Court of Appeals, docketed as CA-G.R. SP No.
39700 and entitled Yupangco Cotton Mills v. Hon. Urbano C. Victorio, Sr., et al.,
seeking to annul the questioned ruling of the RTC. On 29 March 1996, the Court of
Appeals dismissed the petition.[32]
In the interim, Yupangco, through its property manager, Marylen A. Bartolome,
filed on 20 February 1996 a Complaint/Affidavit[33] before the Office of the City
Prosecutor of Caloocan. Bartolome stated that on various dates14 and 17
November 1995, 11 and 12 December 1995, 10 and 11 January 1996, and 3, 4,
and 5 February 1996respondents Sheriffs Timbayan and Masilungan, Mendoza,
Boy Raymundo, and a certain Protacio, together with armed men forcibly entered
the Artex Compound and forcibly opened the padlocks, chains and wooden
barricades of the doors of certain buildings and carried away truckloads of
generators, machines, equipment, motors and fabrics. In addition, Bartolome
alleged that among those hauled were properties not listed among those levied
and eventually sold on execution to SAMAR. Yupangco charged the above-named
persons for robbery with intimidation and robbery with the use of force upon
things under Arts. 293, 294 and 299 of the Revised Penal Code. Mendoza and
Raymundo filed their joint answer and counter-affidavits[34] while Sheriffs
Timbayan, Masilungan and Cervantes[35] filed theirs also jointly.[36]
In a Resolution dated 20 May 1996, the City Prosecutor recommended the filing of
informations against Mendoza, Raymundo, Protacio, Sheriffs Timbayan and
Masilungan for three (3) counts of robbery committed during the following
periods, namely: from 14 November to 12 December 1995, from 09 to 12
December 1995, and from 10 January to 05 February 1996, under Art. 302 of the
Revised Penal Code; and against Cervantes for one (1) count of robbery
committed from 10 January to 05 February 1996.[37] The City Prosecutor stated:
The acts of the respondents constitute robbery committed on three separate and
distinct occasions. One, by unlawfully taking personal properties belonging to
Yupangco by intimidation over properties listed in the Sheriffs Levy and Certificate
of Sale from 14 November to 12 December 1995, second, over properties not
included in the Sheriffs Levy and Certificate of Sale from 9-12 December 1995,
and third, by force upon things over properties without any alias writ of execution
from 10 January to 05 February 1996. Respondents could not hide under the cloak
of legality of their acts just because the writ specified Artex, not Yupangco, as
owner. It is very improbable that they were not aware that the properties were
already owned by Yupangco and not Artex when they enforced the writ. The Levy
and Certificate of Sale may be valid but when the respondents found out that the
properties already belonged to Yupangco, their taking of the same became
unlawful. A writ cannot be issued or enforced against the wrong party (Luna v.
Intermediate Appellate Court, 137 SCRA 7).[38]
....
Assuming that the properties were owned by Artex, this does not mean that
respondents are exempted from criminal liability in the commission of the crime
of robbery. It is not necessary that the person from whom the property is taken
shall be the owner thereof. It is sufficient if the property is taken for the purpose
of gain on the part of the person appropriating it. The possession of property is
sufficient. Ownership is not necessary (US v. Albao, 29 Phil. 86).
Even assuming further that the levy was validly done because the subject
properties are owned and possessed by Artex, respondents act of taking personal
properties outside those listed in the levy constitutes unlawful taking, the intent
to gain being presumed from the act of taking beyond what is listed in the levy.
[39]
In the meantime, the Court of Appeals dismissed CA-G.R. SP No. 39700. It held
that Yupangco was guilty of forum-shopping, taking note of Yupangcos previous
suits filed with the NLRC and the trial courts, wherein it presented the same
issues and asked for substantially the same reliefs. It also found no grave abuse
of discretion on the part of the respondent judge.[40] The Court of Appeals also
dismissed Yupangcos motion for reconsideration. Thereafter, Yupangco filed a
petition with this Court, seeking review of the dismissal of its petition in the Court
of Appeals.[41]
On 17 June 1996, three (3) informations for robbery were filed against
respondents before Branch 74 of the RTC of Malabon.[42] Meanwhile, a petition
for review of the City Prosecutors resolution was filed before the Department of
Justice.
On 18 December 1996, Chief State Prosecutor Jovencito Zuno dismissed the
petition for review.[43] He held in part:
Apparently, even if respondents may have been armed with writs of levy and/or
execution, definitely the enforcement thereof against the properties of the
complainant and not that of ARTEX constituted an unlawful taking of
complainants properties. Since the said taking was done with force and
intimidation as it was made in the presence of armed persons, there was the
breaking of the gate lock and locks, and padlocks in the different buildings, such
circumstances qualify the unlawful taking as robbery. In this regard, except for
respondents bare denial, they failed to controvert complainants positive evidence
that the taking of the questioned properties were made under such
circumstances.[44]
....
Finally, in view of the totally opposing claims and allegations of the parties, it
becomes necessary to determine the probability and credibility of the parties
testimonies. This determination is properly within the province of the trial court
(Pp. vs. Bania, 134 SCRA 347) as the full blown trial in court where evidence is
presented extensively and witnesses may be cross examined places the trial
judge in a more competent position to discriminate against the true and the false.
[45]
Respondents moved for the reconsideration of the dismissal of their petition for
review, which motion, however, was denied[46] by then Secretary of Justice
Teofisto T. Guingona, Jr. on 13 January 1998. According to him, the issue of
ownership had long been settled by the NLRC, and the execution of the labor
judgment against Artex in favor of SAMAR was made on properties that were by
then already owned by Yupangco. Secretary Guingona added that the matters
raised by respondents were mere rehashes apart from being evidentiary in
nature, which are best left for the court to determine in a full-blown trial.[47]
Meanwhile, on 28 January 1997, Labor Arbiter Jovencio Mayor, in another labor
case,[48] declared:
Based on the testimonial and documentary evidence adduced during the
hearings, it has been established by clear, convincing evidence that Yupangco
Cotton Mills, Inc. has become the absolute owner and possessor of the real and
personal properties located at 12 Panghulo, Malabon, Metro Manila since May 29,
1989 up to the present. Hence, the Third Party Claim of Yupangco Cotton Mills,
Inc. is declared to be valid.[49]
....
Finally, the testimonies and documents have established the fact that as of the
time of the issuance of the Writ of Execution on September 19, 1996 by this Office
and up to the present, Yupangco Cotton Mills is the absolute owner and actual
possessor of the properties located at 12 Panghulo, Malabon, Metro Manila.[50]
....
PREMISES CONSIDERED, the Third Party Claim filed by Yupangco Cotton Mills, Inc.
is hereby declared VALID, having established beyond any doubt its absolute
ownership and actual possession of the properties located at 12 Panghulo,
Malabon, Metro Manila, since 1989 up to the present.[51]
The losing partys appeal from the above-quoted order proved futile as it was
dismissed for lack of merit.[52]
While the petition for review of the City Prosecutors resolution was pending, Artex
and Yupangco filed before the NLRC a joint motion for an order declaring the labor
case closed and terminated by reason of full satisfaction of the judgment in NLRC-
NCR Case No. 00-05-02960-90. Labor Arbiter Reyes issued the sought order on 16
November 1998. In the said order, he noted that[53]:
It would be unjust and unlawful to tolerate the further taking and hauling of
properties inside the premises located at Panghulo, Malabon, Metro Manila to
satisfy the previous judgment considering that the amount and value of
properties previously taken were more and above the value of the judgment.
Likewise, Artex and not Yupangco is the judgment debtor.
Not satisfied with the decision of the Secretary of Justice, respondents filed a
petition for certiorari under Rule 65 of the Rules of Court with the Court of
Appeals, imputing grave abuse of discretion amounting to lack or excess of
jurisdiction in the finding that there was probable cause for the filing of robbery
charges against the respondents. On 9 October 1998, the Court of Appeals
promulgated its Decision, granting the petition, setting aside the resolutions
dated 13 January 1998 and 18 December 1996 of the Secretary of Justice and
Chief State Prosecutor, respectively, and directing the RTC of Malabon, Branch 74,
to dismiss the criminal cases against respondents.[54]
The Court of Appeals held that Yupangco was not able to show unlawful taking on
the part of respondents to substantiate the charge of robbery. Citing the case of
Bobis v. Provincial Sheriff of Camarines Norte,[55] the appellate court ratiocinated
that since the levied properties claimed by Yupangco were taken and sold
pursuant to a writ of execution, respondent sheriffs did not wrongfully or
unlawfully take the same and therefire cannot be held liable.[56] Moreover, it
found that no item allegedly outside those listed in the levy were specified by the
supposed eyewitnesses for Yupangco in their respective affidavits. Besides, even
assuming that respondents took properties not listed in the levy, the same does
not warrant the filing of criminal charges against them.[57]
The Court of Appeals stated that the law provides a third-party claimant several
remedies for asserting his rights over levied properties, such as a separate action
to prosecute his claim over the levied properties or a third- party claim in the
court issuing the writ of execution.[58] Taking judicial notice of the findings and
pronouncements of its Decision dated 29 May 1996 in CAG.R. SP No. 39700,[59]
the appellate court found that Yupangco availed of all such remedies to the point
of unabashedly violating the prohibition against forum-shopping.[60] Finally, the
Court of Appeals held that:
The foregoing, taken in the light of the present case, betrays Yupangcos
continuing abuse of judicial processes through culpable forum-shopping. As in the
proceedings mentioned in our quoted Decision, the subject matter of the present
case are the levied properties and the main issue raised in the Complaint/Affidavit
in this case is the ownership of Yupangco over the levied properties. It appears
that the criminal case lodged against petitioners constitutes an additional forum
for their repeatedly failed bid to recover the levied properties.
To deny the present petition would therefore allow a trifling of the courts and its
processes.[61]
Yupangcos motion for reconsideration was also denied by the Court of Appeals.
[62]
In the present petition, Yupangco presents the issues, thus:
IN THE LIGHT OF THE AFOREMENTIONED CIRCUMSTANCES, THE PRINCIPAL ISSUE
IN THIS CASE IS WHETHER THERE EXISTS A PROBABLE CAUSE THAT ROBBERY BY
FORCE OR INTIMIDATION HAS BEEN COMMITTED IN THE TAKING OF THE
PERSONAL PROPERTIES IN PANGHULO, MALABON BY RESPONDENTS.
WHETHER OR NOT INJUNCTION WILL LIE TO RESTRAIN A CRIMINAL ACTION. [63]
Petitioner concedes that its initial failure to establish its ownership in connection
with NLRC-NCR Case No. 00-05-02960-90 and the collateral suits before the RTC
and the Court of Appeals may have given a color of validity to the levy and
auction of the properties in the Artex Compound. Specifically, its position is that
while the withdrawal of properties before the 28 January 1997 order of Labor
Arbiter Mayor is valid the pullout of properties not covered by the levy, sale and
certificate of sale constitutes robbery.[64]
To support this contention, Yupangco relies on the findings of the public
prosecutor and the Department of Justice. It insists that the elements constituting
robbery are present in this case: (1) the properties taken by respondents do not
belong to them but to Yupangco, petitioner claims that there was excessive
execution, which included properties not belonging to Artex, but to Yupangco; (2)
the taking of said properties are unlawful because they were not among those
covered by a valid writ of execution; (3) intent to gain is evidenced by the fact
that the taking was illegal, and (4) violence and/or intimidation was present when
the taking was made with the aid of armed men and by breaking open the
padlocks and doors. Yupangco adds that a public prosecutors determination of
probable cause rests on his findings of facts which are not the proper subject of a
special civil action under Rule 65, the same being limited to whether or not said
public respondent acted without or in excess of its jurisdiction or with grave abuse
of discretion.[65]
Yupangco depends on the 28 January 1997 and the 16 November 1998 orders of
the NLRC, upholding its ownership of the disputed properties. It maintains that
since it had already presented positive evidence that respondents took its
properties and those not included in the levy and execution, respondents denial
and allegation of mistake in carting away said properties should be heard by the
trial court, and should not be taken up in a certiorari proceeding.
For their part, respondent sheriffs claim that they did not commit any crime, as
the items they took all belonged to the general class of goods described in bulk or
by lots in the Notice of Levy.[66] Banking on the Court of Appeals ruling that
Yupangco was unable to prove that they took properties not listed in the Notice of
Levy, respondents maintain that the presumption of regularity in the performance
of their official duties had not been overturned.[67]
Lastly, respondent sheriffs point to the change in Yupangcos theory of the case by
limiting the charges of robbery on items supposedly taken which were not
included in the levy. They claim that Yupangco made the change in theory in order
to evade charges of violating the rule against forum-shopping.[68]
On the other hand, respondent Mendoza postulates that he acquired the
properties in question in good faith and by virtue of a Certificate of Sale issued by
the sheriff, and thus when he withdrew the said properties from the Artex
Compound, he was only doing so in the concept of owner.[69] He adds that the
legal remedy available to Yupangco, if any, is not to file a complaint for robbery
against respondents, but to file a civil complaint for replevin or delivery of
personal property under Rule 60 of the Rules of Court, or for it to run after Artex
Development Co., the former owner of the properties.[70]
While the instant petition was pending, the Court decided the case of Yupangco
Cotton Mills, Inc. v. Court of Appeals, Hon. Urbano C. Victorio, Sr. et al.[71] In the
said case, the Court ruled that there was no forum-shopping as there was no
identity of parties, rights and causes of action and reliefs sought. The case before
the NLRC was a labor case on which Yupangco was not a party, while the accion
reinvindicatoria was filed to recover the property illegally levied upon and sold at
public auction. The Court held that a third party may avail himself of alternative
remedies cumulatively, and one will not preclude the third party from availing
himself of the alternative remedies in the event he failed in the remedy first
availed of. The Court likewise annulled the sale on execution of the subject
property and the subsequent sale of the same, disposing of the case as follows:
WHEREFORE, the Court REVERSES the decision of the Court of Appeals and the
resolution denying reconsideration. In lieu thereof, the Court renders judgment
ANNULING the sale on execution of the subject property conducted by NLRC
Sheriff Anam Timbayan in favor of respondent SAMAR-ANGLO and the subsequent
sale of the same to Rodrigo Sy Mendoza. The Court declares the petitioner to be
the rightful owner of the property involved and remands the case to the trial court
to determine the liability of respondents SAMAR-ANGLO, Rodrigo Sy Mendoza, and
WESTERN GUARANTY CORPORATION to pay actual damages that petitioner
claimed.[72]
Now, the ruling of the Court in this case.
The main issue for consideration is whether the Court of Appeals erred in finding
that the Secretary of Justice and the State Prosecutor gravely abused their
discretion in filing robbery charges against respondents, and in ordering that their
resolutions be set aside and the criminal cases filed against respondents
dismissed.
The petition must be denied.
The Court of Appeals granted respondents petition on two grounds, namely; (1)
lack of probable cause for filing robbery charges; and (2) forum-shopping on the
part of petitioner. The Court in G.R. No. 126322 has long dismissed the charge of
forum-shopping. However, the Court finds that the Court of Appeals is correct in
holding that no probable cause exists in this case.
The general rule is that the determination of the existence of probable cause is
the function of the prosecutor.[73] This Court has adopted a policy of non-
interference in the conduct of preliminary investigations and leaves to the
investigating prosecutor sufficient latitude of discretion in the determination of
what constitutes sufficient evidence as will establish probable cause for the filing
of information against the supposed offender.[74]
Ordinarily, the determination of probable cause is not lodged with this Court. Its
duty in an appropriate case is confined to the issue of whether the determination
of probable cause was done without or in excess of jurisdiction or with grave
abuse of discretion amounting to want of jurisdiction. This is consistent with the
rule that criminal prosecutions may not be restrained or stayed by injunction,
preliminary or final.[75]
This policy of non-interference, however, admits several exceptions, to wit:
a. To afford adequate protection to the constitutional rights of the accused
(Hernandez vs. Albano, et al., L-19272, January 25, 1967, 19 SCRA 95);
b. When necessary for the orderly administration of justice or to avoid
oppression or multiplicity of actions (Dimayuga, et al. vs. Fernandez, 43 Phil. 304;
Hernandez vs. Albano, supra; Fortun vs. Labang, et al., L-38383, May 27, 1981
104 SCRA 607);
c. When there is a pre-judicial question which is sub judice (De Leon vs.
Mabanag, 70 Phil. 202);
d. When the acts of the officer are without or in excess of authority (Planas vs.
Gil, 67 Phil. 62);
e. Where the prosecution is under an invalid law, ordinance or regulation
(Young vs. Rafferty, 33 Phil. 556, Yu Cong Eng vs. Trinidad, 47 Phil. 385,389);
f. When double jeopardy is clearly apparent (Sangalang vs. People and
Alvendia, 109 Phil. 1140);
g. Where the court has no jurisdiction over the offense (Lopez vs. City Judge, L-
25795, October 29, 1966, 18 SCRA 616);
h. Where it is a case of persecution rather than prosecution (Rustia vs.
Ocampo, CA-G.R. No. 4760, March 25, 1960);
i. Where the charges are manifestly false and motivated by the lust for
vengeance (Recto vs. Catelo, 18 L.J. [1953], cited in Raoa vs. Alvendia, CA-G.R.
No. 30720-R, October 8, 1962; Cf. Guingona, et al. vs. City Fiscal, L-60033, April 4,
1984, 128 SCRA 577); and
j. Where there is clearly no prima facie case against the accused and a
motion to quash on that ground has been denied (Salonga vs. Pao, et al., L-59524,
February 18, 1985, 134 SCRA 438).
k. Preliminary injunction has been issued by the Supreme Court to prevent the
threatened unlawful arrest of petitioners (Rodriquez vs. Castelo, L-6374, August 1,
1953). (cited in Regalado, Remedial Law Compendium, p. 188, 1988 Ed.)[76]
To constitute the crime of robbery, the following elements must be established:
(1) the subject is personal property belonging to another; (2) there is unlawful
taking of that property; (3) the taking is with the intent to gain; and (4) there is
violence against or intimidation of any person or use of force upon things.[77]
From the records of the case and prevailing jurisprudence, respondents cannot be
held liable for robbery; nor does there exist probable cause for the filing of
robbery charges against them.
In the case at bar, the determination of whether robbery was committed, most
especially by respondent sheriffs, has to be related to the orderly administration
of justice, and more importantly, the unhampered performance of the sheriffs role
in our judicial system. Indeed, it is important to note the duty of the sheriff in
implementing a writ of execution. The NLRC Manual on Execution of Judgment[78]
(Manual) requires the sheriff to serve all writs, execute all processes and carry
into effect any judgment as defined therein.[79] Rule VI of the Manual provides:
RULE VI
THIRD PARTY CLAM
SECTION 1. Definition A third party claim is a claim whereby a person, not a party
to the case, asserts title to or right to the possession of the property levied upon.
SECTION 2. ProceedingsIf property levied upon be claimed by any person other
than the losing party or his agent, such person shall make an affidavit of his title
thereto or right to the possession thereof, stating the grounds of such right or title
and shall file the same with the sheriff and copies thereof served upon the Labor
Arbiter or proper officer issuing the writ shall conduct a hearing with due notice to
all parties concerned and resolve the validity of the claim within ten (10) working
days from notice, and the Commission shall resolve the appeal within the same
period.
However, should the prevailing party put up an indemnity bond in a sum not less
than the value of the property levied, the execution shall proceed. In case of
disagreement as to such value, the same shall be determined by the Commission
or Labor Arbiter who issued the writ.
SECTION 3. Resolution of the Third Party Claim, Effect. In the event the third party
claim is declared to be valid, the sheriff shall immediately release the property to
the third party claimant, his agent or representative and the levy on execution
shall immediately be lifted or discharged. However, should the third party claim
be found to be without factual or legal basis, the sheriff must proceed with the
execution of the property levied upon as if no third party claim had been filed.[80]
If a third-party claim is filed, the sheriff is not bound to proceed with the levy of
the property unless he is given by the judgment creditor an indemnity bond
against the claim.[81] In this case, execution of judgment was continued despite
the filing of a third-party claim/notice of adverse claim by Yupangco because
SAMAR was able to put up an indemnity bond as provided in the Manual and as
required by the third alias writ of execution issued by Labor Arbiter Reyes.[82]
Thus, respondent sheriffs cannot be reproached, much more charged with robbery
for their faithful compliance with the writ of execution, or with their duties in
accordance with the Manual. With greater reason, Mendoza, who merely
purchased the property from SAMAR, cannot be held liable for robbery. So long as
the officer confines his acts to the mandate of the writ, he is not liable; but all of
his acts that are not as justified by the writ are without authority of law.
While Yupangcos ownership of the subject properties has been settled in G.R. No.
126322, respondents taking of the same does not constitute robbery. It is best to
remember that the taking was made from 1995 to 1996, way before Yupangco
was declared owner of the property. Hence, at the time the taking was done,
respondents had acted by virtue of a presumptively valid levy and writ of
execution. Thus, there can be no unlawful taking as the hauling of the properties
was made by virtue of the alias writs of execution duly issued by the Labor Arbiter
a quo.
Yupangco, however, claims that the taking was unlawful as it involved properties
not included/covered by the writ of execution. The Court agrees with the Court of
Appeals finding that Yupangco was unable to identify the items taken which were
allegedly not listed in the levy. When supported by substantial evidence, the
findings of fact of the Court of Appeals are conclusive and binding on the parties
and are not reviewable by this Court.[83] Indeed, the Court will not interfere with
the findings of the Court of Appeals.
There was likewise no basis for Yupangcos allegation that intent to gain and use
of force and violence were present in the execution. As earlier stated, at the time
the execution and taking were made, the writ of execution was, essentially, legal
and valid. Intent to gain cannot simply be implied from the mere execution of the
judgment. Moreover, it goes beyond saying that the assistance provided by the
Malabon police and other officers, which was primarily the basis for Yupangcos
allegation of force and/or intimidation, was allowed by the Labor Arbiter in the
writ of execution.
As discussed by the Court in G.R. No. 126322, a third party whose property has
been levied upon by the sheriff to enforce a decision against a judgment debtor is
afforded several alternative remedies to protect its interests. The third party may
avail himself of certain remedies cumulatively, and his choice of one remedy will
not preclude him from availing himself of the other remedies should he fail in the
remedy first availed of.[84] Thus, a third party may file a third-party claim with
the sheriff of the Labor Arbiter, and if the third-party claim is denied, the third
party may appeal the denial to the NLRC.[85] Even if a third-party claim is denied,
a third party may still file a proper action with a competent court to recover
ownership of the property illegally seized by the sheriff.[86] This Yupangco did,
and it succeeded in having itself declared owner of the subject properties.
Yupangcos reliance, however, on the 28 January 1997 order of the Labor Arbiter
Mayor in NLRC-NRC Case No. 10-05985-91 is misplaced. While said order
validated Yupangcos third-party claim and even declared its absolute ownership
and actual possession of the subject properties, the order pertains to a case very
different from the one for which the subject execution was made. Hence, it is not
binding on the respondents. Neither can the finding made by Labor Arbiter Reyes
in his order dated 16 November 1998 that Artex and not Yupangco is the
judgment debtor have any bearing on the allegations against respondents. Said
orders, much like this Courts Decision in G.R. No. 126322, were obviously issued
after the questioned hauling of properties had been effected and they do not
detract from the validity of respondents acts at the time of the levy and
execution.
When petitioner filed its complaint/affidavit, it charged respondents with robbery
for hauling properties located in the Artex Compound through the use of force and
intimidation. When the instant case reached this Court, however, petitioner
limited the charge of robbery to the properties allegedly not included in the notice
of levy. Additionally, it claimed that there was excessive execution which included
items not owned by Artex, but by Yupangco.
The change of theory notwithstanding, the Court still cannot see any probable
cause for the filing of robbery charges. The distinction made by Yupangco is not
legally workable and appears baseless. It must be borne in mind that at the time
the auction sale and the subsequent sale to Mendoza were made, SAMAR had the
lawful right to the properties of Artex by virtue of the finality of judgment in NLRC-
NCR Case No. 00-05-02960-90. In its complaint/affidavit, Yupangco did not even
question the validity of the notice of levy and execution, nor that of the auction
sale which culminated in the pullout of the properties to effect execution. SAMAR
acquired the properties in a sealed bidding, wherein the properties were sold in
bulk or by lots, with the descriptions in the notice of levy and the certificate of
sale sufficiently covering the items hauled by respondents.[87] The same is true
for the sale between SAMAR and Mendoza, wherein for and in consideration of the
bid price P6,000,000.00, the latter bought the chattels and personal properties
listed in the notice of sale, which list was carried over in the certificate of sale.
[88] Thus, all the properties which fit the descriptions contained in the notice of
levy were, at that time, properly levied upon and thereafter legally taken by
respondents.
Even assuming for the nonce that properties not listed in the notice of levy or
certificate of sale were taken, a criminal action for robbery would still not prosper.
In the case of Aristorenas v. Molina,[89] this Court held that a sheriffs role in the
execution of judgment is purely ministerial and he has no discretion whether or
not to execute the judgment. Any objection against the levy and sale must be
addressed to the judgment of the tribunal which issued the order, because it is
within its jurisdiction to correct the errors or excesses of its ministerial officers
and to control its own processes. Thus, the remedy of Yupangco, if any, is not the
filing of a criminal action, but an action before the NLRC which had control over
the respondent sheriffs.
In Marcelo v. Sandiganbayan,[90] this Court held that the act of a sheriff taking
personal property not included in the notice of levy, without issuing a receipt
therefor, or listing the same in the sheriffs return, is not criminal in nature, the
appropriate relief against the erring sheriff being a civil action for damages or an
administrative complaint for the faulty implementation of the writ of execution.
[91]
In addition, at the time of the withdrawal of the subject properties, Mendoza had
already posted a P10,000,000.00 supersedeas bond to secure respondent sheriffs
against any loss, damage or injury which Artex, or any person or entity may suffer
as a consequence of any wrongful implementation and enforcement of the final
judgment in the labor case a quo. Yupangco is protected by the same
supersedeas bond. Hence, its remedy is not to run after respondents through a
criminal action, but to proceed against the bonding company or Mendoza, as the
case may be, which is what it actually did in Civil Case No. 95-76395.
The Court adheres to the view that a preliminary investigation serves not only the
purposes of the State, but more importantly, it is a significant part of freedom and
fair play which every individual is entitled to.[92] It is thus the duty of the
prosecutor or the judge, as the case may be, to relieve the accused of going
through a trial once it is determined that there is no sufficient evidence to sustain
a finding of probable cause to form a sufficient belief that the accused has
committed a crime. In this case, absent sufficient evidence to establish probable
cause for the prosecution of respondents for the crime of robbery, the filing of LEONARDO-DE CASTRO, and
informations against respondents constitute grave abuse of discretion. BRION, JJ.

To repeat, Yupangco may have been greatly inconvenienced by the turn of events, Promulgated:
but there is simply no sufficient basis for the filing of criminal charges against the
respondents. However, Yupangco is not left without any remedy. As can be seen January 20, 2009
from the foregoing discussion, Yupangco still has a venue to ventilate its x-----------------------------------------------------------------------------------------x
grievance against respondents, with the Court in G.R. No. 126322 paving the way
for the continuation of its action for recovery and damages against respondents. DECISION

WHEREFORE, the petition is DISMISSED and the assailed Decision and Resolution CARPIO MORALES, J.:
of the Court of Appeals in CA-G.R. SP No. 46811 are AFFIRMED. Costs against the
petitioner. Petitioners Juanito A. Garcia and Alberto J. Dumago assail the December 5, 2003
Decision and April 16, 2004 Resolution of the Court of Appeals[1] in CA-G.R. SP
SO ORDERED. No. 69540 which granted the petition for certiorari of respondent, Philippine
Airlines, Inc. (PAL), and denied petitioners Motion for Reconsideration,
JUANITO A. GARCIA and ALBERTO J. DUMAGO, respectively. The dispositive portion of the assailed Decision reads:
Petitioners,
WHEREFORE, premises considered and in view of the foregoing, the instant
petition is hereby GIVEN DUE COURSE. The assailed November 26, 2001
Resolution as well as the January 28, 2002 Resolution of public respondent
National Labor Relations Commission [NLRC] is hereby ANNULLED and SET ASIDE
for having been issued with grave abuse of discretion amounting to lack or excess
- versus - of jurisdiction. Consequently, the Writ of Execution and the Notice of Garnishment
issued by the Labor Arbiter are hereby likewise ANNULLED and SET ASIDE.

SO ORDERED.[2]

PHILIPPINE AIRLINES, INC.,

Respondent. The case stemmed from the administrative charge filed by PAL against its
employees-herein petitioners[3] after they were allegedly caught in the act of
G.R. No. 164856 sniffing shabu when a team of company security personnel and law enforcers
Present: raided the PAL Technical Centers Toolroom Section on July 24, 1995.

PUNO, C.J., After due notice, PAL dismissed petitioners on October 9, 1995 for transgressing
QUISUMBING, the PAL Code of Discipline,[4] prompting them to file a complaint for illegal
YNARES-SANTIAGO, dismissal and damages which was, by Decision of January 11, 1999,[5] resolved
CARPIO, by the Labor Arbiter in their favor, thus ordering PAL to, inter alia, immediately
AUSTRIA-MARTINEZ, comply with the reinstatement aspect of the decision.
CORONA, Prior to the promulgation of the Labor Arbiters decision, the Securities and
CARPIO MORALES, Exchange Commission (SEC) placed PAL (hereafter referred to as respondent),
AZCUNA, which was suffering from severe financial losses, under an Interim Rehabilitation
TINGA, Receiver, who was subsequently replaced by a Permanent Rehabilitation Receiver
CHICO-NAZARIO, on June 7, 1999.
VELASCO, JR.,
NACHURA,
From the Labor Arbiters decision, respondent appealed to the NLRC which, by
Resolution of January 31, 2000, reversed said decision and dismissed petitioners
complaint for lack of merit.[6]
Petitioners Motion for Reconsideration was denied by Resolution of April 28, 2000
and Entry of Judgment was issued on July 13, 2000.[7]
Subsequently or on October 5, 2000, the Labor Arbiter issued a Writ of Execution
(Writ) respecting the reinstatement aspect of his January 11, 1999 Decision, and
on October 25, 2000, he issued a Notice of Garnishment (Notice). Respondent
thereupon moved to quash the Writ and to lift the Notice while petitioners moved
to release the garnished amount.
In a related move, respondent filed an Urgent Petition for Injunction with the NLRC
which, by Resolutions of November 26, 2001 and January 28, 2002, affirmed the
validity of the Writ and the Notice issued by the Labor Arbiter but suspended and
referred the action to the Rehabilitation Receiver for appropriate action.
Respondent elevated the matter to the appellate court which issued the herein
challenged Decision and Resolution nullifying the NLRC Resolutions on two
grounds, essentially espousing that: (1) a subsequent finding of a valid dismissal
removes the basis for implementing the reinstatement aspect of a labor arbiters
decision (the first ground), and (2) the impossibility to comply with the
reinstatement order due to corporate rehabilitation provides a reasonable
justification for the failure to exercise the options under Article 223 of the Labor
Code (the second ground).
By Decision of August 29, 2007, this Court PARTIALLY GRANTED the present
petition and effectively reinstated the NLRC Resolutions insofar as it suspended
the proceedings, viz:
Since petitioners claim against PAL is a money claim for their wages during the
pendency of PALs appeal to the NLRC, the same should have been suspended
pending the rehabilitation proceedings. The Labor Arbiter, the NLRC, as well as
the Court of Appeals should have abstained from resolving petitioners case for
illegal dismissal and should instead have directed them to lodge their claim
before PALs receiver.
However, to still require petitioners at this time to re-file their labor claim against
PAL under peculiar circumstances of the case that their dismissal was eventually
held valid with only the matter of reinstatement pending appeal being the issue
this Court deems it legally expedient to suspend the proceedings in this case.
WHEREFORE, the instant petition is PARTIALLY GRANTED in that the instant
proceedings herein are SUSPENDED until further notice from this Court.
Accordingly, respondent Philippine Airlines, Inc. is hereby DIRECTED to quarterly
update the Court as to the status of its ongoing rehabilitation. No costs.
SO ORDERED.[8] (Italics in the original; underscoring supplied)
By Manifestation and Compliance of October 30, 2007, respondent informed the
Court that the SEC, by Order of September 28, 2007, granted its request to exit
from rehabilitation proceedings.[9]
In view of the termination of the rehabilitation proceedings, the Court now
proceeds to resolve the remaining issue for consideration, which is whether
petitioners may collect their wages during the period between the Labor Arbiters
order of reinstatement pending appeal and the NLRC decision overturning that of
the Labor Arbiter, now that respondent has exited from rehabilitation
proceedings.
Amplification of the First Ground
The appellate court counted on as its first ground the view that a subsequent
finding of a valid dismissal removes the basis for implementing the reinstatement
aspect of a labor arbiters decision.
On this score, the Courts attention is drawn to seemingly divergent decisions
concerning reinstatement pending appeal or, particularly, the option of payroll
reinstatement. On the one hand is the jurisprudential trend as expounded in a line
of cases including Air Philippines Corp. v. Zamora,[10] while on the other is the
recent case of Genuino v. National Labor Relations Commission.[11] At the core of
the seeming divergence is the application of paragraph 3 of Article 223 of the
Labor Code which reads:
In any event, the decision of the Labor Arbiter reinstating a dismissed or
separated employee, insofar as the reinstatement aspect is concerned, shall
immediately be executory, pending appeal. The employee shall either be
admitted back to work under the same terms and conditions prevailing prior to
his dismissal or separation or, at the option of the employer, merely reinstated in
the payroll. The posting of a bond by the employer shall not stay the execution for
reinstatement provided herein. (Emphasis and underscoring supplied)
The view as maintained in a number of cases is that:
x x x [E]ven 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. On the other hand, if the employee has been reinstated during the appeal
period and such reinstatement order is reversed with finality, the employee is not
required to reimburse whatever salary he received for he is entitled to such, more
so if he actually rendered services during the period.[12] (Emphasis in the
original; italics and underscoring supplied)
In other words, 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.[13]
The opposite view is articulated in Genuino which states:
If the decision of the labor arbiter is later reversed on appeal upon the finding
that the ground for dismissal is valid, then the employer has the right to require
the dismissed employee on payroll reinstatement to refund the salaries s/he
received while the case was pending appeal, or it can be deducted from the
accrued benefits that the dismissed employee was entitled to receive from his/her
employer under existing laws, collective bargaining agreement provisions, and
company practices. However, if the employee was reinstated to work during the
pendency of the appeal, then the employee is entitled to the compensation
received for actual services rendered without need of refund.
Considering that Genuino was not reinstated to work or placed on payroll
reinstatement, and her dismissal is based on a just cause, then she is not entitled
to be paid the salaries stated in item no. 3 of the fallo of the September 3, 1994
NLRC Decision.[14] (Emphasis, italics and underscoring supplied)
It has thus been advanced that there is no point in releasing the wages to
petitioners since their dismissal was found to be valid, and to do so would
constitute unjust enrichment.
Prior to Genuino, there had been no known similar case containing a dispositive
portion where the employee was required to refund the salaries received on
payroll reinstatement. In fact, in a catena of cases,[15] the Court did not order the
refund of salaries garnished or received by payroll-reinstated employees despite a
subsequent reversal of the reinstatement order.
The dearth of authority supporting Genuino is not difficult to fathom for it would
otherwise render inutile the rationale of reinstatement pending appeal.
x x x [T]he law itself has laid down a compassionate policy which, once more,
vivifies and enhances the provisions of the 1987 Constitution on labor and the
working man.
xxxx
These duties and responsibilities of the State are imposed not so much to express
sympathy for the workingman as to forcefully and meaningfully underscore labor
as a primary social and economic force, which the Constitution also expressly
affirms with equal intensity. Labor is an indispensable partner for the nation's
progress and stability.
xxxx
x x x In short, with respect to decisions reinstating employees, the law itself has
determined a sufficiently overwhelming reason for its execution pending appeal.
xxxx
x x x Then, by and pursuant to the same power (police power), the State may
authorize an immediate implementation, pending appeal, of a decision reinstating
a dismissed or separated employee since that saving act is designed to stop,
although temporarily since the appeal may be decided in favor of the appellant, a
continuing threat or danger to the survival or even the life of the dismissed or
separated employee and his family.[16]
The social justice principles of labor law outweigh or render inapplicable the civil
law doctrine of unjust enrichment espoused by Justice Presbitero Velasco, Jr. in his
Separate Opinion. The constitutional and statutory precepts portray the otherwise
unjust situation as a condition affording full protection to labor.
Even outside the theoretical trappings of the discussion and into the mundane
realities of human experience, the refund doctrine easily demonstrates how a
favorable decision by the Labor Arbiter could harm, more than help, a dismissed
employee. The employee, to make both ends meet, would necessarily have to use
up the salaries received during the pendency of the appeal, only to end up having
to refund the sum in case of a final unfavorable decision. It is mirage of a stop-
gap leading the employee to a risky cliff of insolvency.
Advisably, the sum is better left unspent. It becomes more logical and practical
for the employee to refuse payroll reinstatement and simply find work elsewhere
in the interim, if any is available. Notably, the option of payroll reinstatement
belongs to the employer, even if the employee is able and raring to return to
work. Prior to Genuino, it is unthinkable for one to refuse payroll reinstatement. In
the face of the grim possibilities, the rise of concerned employees declining
payroll reinstatement is on the horizon.
Further, the Genuino ruling not only disregards the social justice principles behind
the rule, but also institutes a scheme unduly favorable to management. Under
such scheme, the salaries dispensed pendente lite merely serve as a bond posted
in installment by the employer. For in the event of a reversal of the Labor Arbiters
decision ordering reinstatement, the employer gets back the same amount
without having to spend ordinarily for bond premiums. This circumvents, if not
directly contradicts, the proscription that the posting of a bond [even a cash
bond] by the employer shall not stay the execution for reinstatement.[17]
In playing down the stray posture in Genuino requiring the dismissed employee
on payroll reinstatement to refund the salaries in case a final decision upholds the
validity of the dismissal, the Court realigns the proper course of the prevailing
doctrine on reinstatement pending appeal vis--vis the effect of a reversal on
appeal.
Respondent insists that with the reversal of the Labor Arbiters Decision, there is
no more basis to enforce the reinstatement aspect of the said decision. In his
Separate Opinion, Justice Presbitero Velasco, Jr. supports this argument and finds
the prevailing doctrine in Air Philippines and allied cases inapplicable because,
unlike the present case, the writ of execution therein was secured prior to the
reversal of the Labor Arbiters decision.
The proposition is tenuous. First, the matter is treated as a mere race against
time. The discussion stopped there without considering the cause of the delay.
Second, it requires the issuance of a writ of execution despite the immediately
executory nature of the reinstatement aspect of the decision. In Pioneer Texturing
Corp. v. NLRC,[18] which was cited in Panuncillo v. CAP Philippines, Inc.,[19] the
Court observed:
x x x The provision of Article 223 is clear that an award [by the Labor Arbiter] 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 [including the issuance of a writ of execution] 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. 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. x x x In introducing a new rule on the reinstatement aspect of a
labor decision under Republic Act No. 6715, Congress should not be considered to
be indulging in mere semantic exercise. x x x[20] (Italics in the original; emphasis
and underscoring supplied)
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.[21] 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
employees salaries.[22]
Amplification of the Second Ground
The remaining issue, nonetheless, is resolved in the negative on the strength of
the second ground relied upon by the appellate court in the assailed issuances.
The Court sustains the appellate courts finding that the peculiar predicament of a
corporate rehabilitation rendered it impossible for respondent to exercise its
option under the circumstances.
The spirit of the rule on reinstatement pending appeal animates the proceedings
once the Labor Arbiter issues the decision containing an order of reinstatement.
The immediacy of its execution needs no further elaboration. Reinstatement
pending appeal necessitates its immediate execution during the pendency of the
appeal, if the law is to serve its noble purpose. At the same time, any attempt on
the part of the employer to evade or delay its execution, as observed in
Panuncillo and as what actually transpired in Kimberly,[23] Composite,[24] Air
Philippines,[25] and Roquero,[26] should not be countenanced.
After the labor arbiters decision is reversed by a higher tribunal, the employee
may be barred from collecting the accrued wages, if it is shown that the delay in
enforcing the reinstatement pending appeal was without fault on the part of the
employer.
The test is two-fold: (1) there must be actual delay or the fact that the order of
reinstatement pending appeal was not executed prior to its reversal; and (2) the
delay must not be due to the employers unjustified act or omission. If the delay is
due to the employers unjustified refusal, the employer may still be required to
pay the salaries notwithstanding the reversal of the Labor Arbiters decision.
In Genuino, there was no showing that the employer refused to reinstate the
employee, who was the Treasury Sales Division Head, during the short span of
four months or from the promulgation on May 2, 1994 of the Labor Arbiters
Decision up to the promulgation on September 3, 1994 of the NLRC Decision.
Notably, the former NLRC Rules of Procedure did not lay down a mechanism to
promptly effectuate the self-executory order of reinstatement, making it difficult
to establish that the employer actually refused to comply.

In a situation like that in International Container Terminal Services, Inc. v.
NLRC[27] where it was alleged that the employer was willing to comply with the
order and that the employee opted not to pursue the execution of the order, the
Court upheld the self-executory nature of the reinstatement order and ruled that
the salary automatically accrued from notice of the Labor Arbiter's order of
reinstatement until its ultimate reversal by the NLRC. It was later discovered that
the employee indeed moved for the issuance of a writ but was not acted upon by
the Labor Arbiter. In that scenario where the delay was caused by the Labor
Arbiter, it was ruled that the inaction of the Labor Arbiter who failed to act upon
the employees motion for the issuance of a writ of execution may no longer
adversely affect the cause of the dismissed employee in view of the self-
executory nature of the order of reinstatement.[28]
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 Arbiters decision,[29] 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 employers intransigence in immediately complying with the
order.
In the case at bar, petitioners exerted efforts[30] to execute the Labor Arbiters
order of reinstatement until they were able to secure a writ of execution, albeit
issued on October 5, 2000 after the reversal by the NLRC of the Labor Arbiters
decision. Technically, there was still actual delay which brings to the question of
whether the delay was due to respondents unjustified act or omission.
It is apparent that there was inaction on the part of respondent to reinstate them,
but whether such omission was justified depends on the onset of the exigency of
corporate rehabilitation.
It is settled that upon appointment by the SEC of a rehabilitation receiver, all
actions for claims before any court, tribunal or board against the corporation shall
ipso jure be suspended.[31] As stated early on, during the pendency of
petitioners complaint before the Labor Arbiter, the SEC placed respondent under
an Interim Rehabilitation Receiver. After the Labor Arbiter rendered his decision,
the SEC replaced the Interim Rehabilitation Receiver with a Permanent
Rehabilitation Receiver.
Case law recognizes that unless there is a restraining order, the implementation
of the order of reinstatement is ministerial and mandatory.[32] This injunction or
suspension of claims by legislative fiat[33] partakes of the nature of a restraining
order that constitutes a legal justification for respondents non-compliance with
the reinstatement order. Respondents failure to exercise the alternative options of
actual reinstatement and payroll reinstatement was thus justified. Such being the
case, respondents obligation to pay the salaries pending appeal, as the normal
effect of the non-exercise of the options, did not attach.
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.
The parallelism between a judicial order of corporation rehabilitation as a
justification for the non-exercise of its options, on the one hand, and a claim of
actual and imminent substantial losses as ground for retrenchment, on the other
hand, stops at the red line on the financial statements. Beyond the analogous
condition of financial gloom, as discussed by Justice Leonardo Quisumbing in his
Separate Opinion, are more salient distinctions. Unlike the ground of substantial
losses contemplated in a retrenchment case, the state of corporate rehabilitation
was judicially pre-determined by a competent court and not formulated for the
first time in this case by respondent.
More importantly, 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.
In sum, the obligation to pay the employees salaries upon the employers failure
to exercise the alternative options under Article 223 of the Labor Code is not a
hard and fast rule, considering the inherent constraints of corporate
rehabilitation.
WHEREFORE, the petition is PARTIALLY DENIED. Insofar as the Court of Appeals
Decision of December 5, 2003 and Resolution of April 16, 2004 annulling the
NLRC Resolutions affirming the validity of the Writ of Execution and the Notice of
Garnishment are concerned, the Court finds no reversible error.
SO ORDERED.
[G.R. No. 130866. September 16, 1998]
ST. MARTIN FUNERAL HOME, petitioner, vs. NATIONAL LABOR RELATIONS
MARTINEZ, COMMISSION and BIENVENIDO ARICAYOS, respondents.
DECISION
REGALADO, J.:
The present petition for certiorari stemmed from a complaint for illegal dismissal
filed by herein private respondent before the National Labor Relations
Commission (NLRC), Regional Arbitration Branch No. III, in San Fernando,
Pampanga. Private respondent alleges that he started working as Operations
Manager of petitioner St. Martin Funeral Home on February 6, 1995. However,
there was no contract of employment executed between him and petitioner nor
was his name included in the semi-monthly payroll. On January 22, 1996, he was
dismissed from his employment for allegedly misappropriating P38,000.00 which
was intended for payment by petitioner of its value added tax (VAT) to the Bureau
of Internal Revenue (BIR).[1]
Petitioner on the other hand claims that private respondent was not its employee
but only the uncle of Amelita Malabed, the owner of petitioner St. Martins Funeral
Home. Sometime in 1995, private respondent, who was formerly working as an
overseas contract worker, asked for financial assistance from the mother of
Amelita. Since then, as an indication of gratitude, private respondent voluntarily
helped the mother of Amelita in overseeing the business.
In January 1996, the mother of Amelita passed away, so the latter she took over
the management of the business. She then discovered that there were arrears in
the payment of taxes and other government fees, although the records purported
to show that the same were already paid. Amelita then made some changes in
the business operation and private respondent and his wife were no longer
allowed to participate in the management thereof. As a consequence, the latter
filed a complaint charging that petitioner had illegally terminated his
employment.[2]
Based on the position papers of the parties, the labor arbiter rendered a decision
in favor of petitioner on October 25, 1996 declaring that no employer-employee
relationship existed between the parties and, therefore, his office had no
jurisdiction over the case.[3]
Not satisfied with the said decision, private respondent appealed to the NLRC
contending that the labor arbiter erred (1) in not giving credence to the evidence
submitted by him; (2) in holding that he worked as a volunteer and not as an
employee of St. Martin Funeral Home from February 6, 1995 to January 23, 1996,
or a period of about one year; and (3) in ruling that there was no employer-
employee relationship between him and petitioner.[4]
On June 13, 1997, the NLRC rendered a resolution setting aside the questioned
decision and remanding the case to the labor arbiter for immediate appropriate
proceedings.[5] Petitioner then filed a motion for reconsideration which was
denied by the NLRC in its resolution dated August 18, 1997 for lack of merit,[6]
hence the present petition alleging that the NLRC committed grave abuse of
discretion.[7]
Before proceeding further into the merits of the case at bar, 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. 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.
We prefatorily delve into the legal history of the NLRC. It was first established in
the Department of Labor by P.D. No. 21 on October 14, 1972, and its decisions
were expressly declared to be appealable to the Secretary of Labor and,
ultimately, to the President of the Philippines.
On May 1, 1974, P.D. No. 442 enacted the Labor Code of the Philippines, the same
to take effect six months after its promulgation.[8] Created and regulated therein
is the present NLRC which was attached to the Department of Labor and
Employment for program and policy coordination only.[9] Initially, Article 302
(now, Article 223) thereof also granted an aggrieved party the remedy of appeal
from the decision of the NLRC to the Secretary of Labor, but P.D. No. 1391
subsequently amended said provision and abolished such appeals. No appellate
review has since then been provided for.
Thus, to repeat, under the present state of the law, there is no provision for
appeals from the decision of the NLRC.[10] The present Section 223, as last
amended by Section 12 of R.A. No. 6715, instead merely provides that the
Commission shall decide all cases within twenty days from receipt of the answer
of the appellee, and that such decision shall be final and executory after ten
calendar days from receipt thereof by the parties.
When the issue was raised in an early case on the argument that this Court has
no jurisdiction to review the decisions of the NLRC, and formerly of the Secretary
of Labor, since there is no legal provision for appellate review thereof, the Court
nevertheless rejected that thesis. It held that there is an underlying power of the
courts to scrutinize the acts of such agencies on questions of law and jurisdiction
even though no right of review is given by statute; that the purpose of judicial
review is to keep the administrative agency within its jurisdiction and protect the
substantial rights of the parties; and that it is that part of the checks and
balances which restricts the separation of powers and forestalls arbitrary and
unjust adjudications.[11]
Pursuant to such ruling, and as sanctioned by subsequent decisions of this Court,
the remedy of the aggrieved party is to timely file a motion for reconsideration as
a precondition for any further or subsequent remedy,[12] and then seasonably
avail of the special civil action of certiorari under Rule 65,[13] for which said Rule
has now fixed the reglementary period of sixty days from notice of the decision.
Curiously, although the 10-day period for finality of the decision of the NLRC may
already have lapsed as contemplated in Section 223 of the Labor Code, it has
been held that this Court may still take cognizance of the petition for certiorari on
jurisdictional and due process considerations if filed within the reglementary
period under Rule 65.[14]
Turning now to the matter of judicial review of NLRC decisions, B.P. No. 129
originally provided as follows:
SEC. 9. Jurisdiction. - The Intermediate Appellate Court shall exercise:
(1) Original jurisdiction to issue writs of mandamus, prohibition, certiorari, habeas
corpus, and quo warranto, and auxiliary writs or processes, whether or not in aid
of its appellate jurisdiction;
(2) Exclusive original jurisdiction over actions for annulment of judgments of
Regional Trial Courts; and
(3) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions,
orders, or awards of Regional Trial Courts and quasi-judicial agencies,
instrumentalities, boards, or commissions, except those falling within the
appellate jurisdiction of the Supreme Court in accordance with the Constitution,
the provisions of this Act, and of subparagraph (1) of the third paragraph and
subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act of
1948.
The Intermediate Appellate Court shall have the power to try cases and conduct
hearings, receive evidence and perform any and all acts necessary to resolve
factual issues raised in cases falling within its original and appellate jurisdiction,
including the power to grant and conduct new trials or further proceedings.
These provisions shall not apply to decisions and interlocutory orders issued
under the Labor Code of the Philippines and by the Central Board of Assessment
Appeals.[15]
Subsequently, and as it presently reads, this provision was amended by R.A. No.
7902 effective March 18, 1995, to wit:
SEC. 9. Jurisdiction. - The Court of Appeals shall exercise:
(1) Original jurisdiction to issue writs of mandamus, prohibition, certiorari, habeas
corpus, and quo warranto, and auxiliary writs or processes, whether or not in aid
of its appellate jurisdiction;
(2) Exclusive original jurisdiction over actions for annulment of judgments of
Regional Trial Courts; and
(3) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions,
orders or awards of Regional Trial Courts and quasi-judicial agencies,
instrumentalities, boards or commissions, including the Securities and Exchange
Commission, the Social Security Commission, the Employees Compensation
Commission and the Civil Service Commission, except those falling within the
appellate jurisdiction of the Supreme Court in accordance with the Constitution,
the Labor Code of the Philippines under Presidential Decree No. 442, as amended,
the provisions of this Act, and of subparagraph (1) of the third paragraph and
subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act of
1948.
The Court of Appeals shall have the power to try cases and conduct hearings,
receive evidence and perform any and all acts necessary to resolve factual issues
raised in cases falling within its original and appellate jurisdiction, including the
power to grant and conduct new trials or further proceedings. Trials or hearings in
the Court of Appeals must be continuous and must be completed within, three (3)
months, unless extended by the Chief Justice.
It will readily be observed that, aside from the change in the name of the lower
appellate court,[16] the following amendments of the original provisions of
Section 9 of B.P. No. 129 were effected by R.A. No. 7902, viz.:
1. The last paragraph which excluded its application to the Labor Code of the
Philippines and the Central Board of Assessment Appeals was deleted and
replaced by a new paragraph granting the Court of Appeals limited powers to
conduct trials and hearings in cases within its jurisdiction.
2. The reference to the Labor Code in that last paragraph was transposed to
paragraph (3) of the section, such that the original exclusionary clause therein
now provides except those falling within the appellate jurisdiction of the Supreme
Court in accordance with the Constitution, the Labor Code of the Philippines under
Presidential Decree No. 442, as amended, the provisions of this Act, and of
subparagraph (1) of the third paragraph and subparagraph (4) of the fourth
paragraph of Section 17 of the Judiciary Act of 1948. (Italics supplied)
3. Contrarily, however, specifically added to and included among the quasi-
judicial agencies over which the Court of Appeals shall have exclusive appellate
jurisdiction are the Securities and Exchange Commission, the Social Security
Commission, the Employees Compensation Commission and the Civil Service
Commission.
This, then, brings us to a somewhat perplexing impass, both in point of purpose
and terminology. As earlier explained, our mode of judicial review over decisions
of the NLRC has for some time now been understood to be by a petition for
certiorari under Rule 65 of the Rules of Court. This is, of course, a special original
action limited to the resolution of jurisdictional issues, that is, lack or excess of
jurisdiction and, in almost all cases that have been brought to us, grave abuse of
discretion amounting to lack of jurisdiction.
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.[17] 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.
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.
A review of the legislative records on the antecedents of R.A. No. 7902 persuades
us that there may have been an oversight in the course of the deliberations on
the said Act or an imprecision in the terminology used therein. In fine, Congress
did intend to provide for judicial review of the adjudications of the NLRC in labor
cases by the Supreme Court, but there was an inaccuracy in the term used for the
intended mode of review. This conclusion which we have reluctantly but prudently
arrived at has been drawn from the considerations extant in the records of
Congress, more particularly on Senate Bill No. 1495 and the Reference Committee
Report on S. No. 1495/H. No. 10452.[18]
In sponsoring Senate Bill No. 1495, Senator Raul S. Roco delivered his sponsorship
speech[19] from which we reproduce the following excerpts:
The Judiciary Reorganization Act, Mr. President, Batas Pambansa Blg. 129,
reorganized the Court of Appeals and at the same time expanded its jurisdiction
and powers. Among others, its appellate jurisdiction was expanded to cover not
only final judgment of Regional Trial Courts, but also all final judgment(s),
decisions, resolutions, orders or awards of quasi-judicial agencies,
instrumentalities, boards and commissions, except those falling within the
appellate jurisdiction of the Supreme Court in accordance with the Constitution,
the provisions of BP Blg. 129 and of subparagraph 1 of the third paragraph and
subparagraph 4 of Section 17 of the Judiciary Act of 1948.
Mr. President, the purpose of the law is to ease the workload of the Supreme
Court by the transfer of some of its burden of review of factual issues to the Court
of Appeals. However, whatever benefits that can be derived from the expansion
of the appellate jurisdiction of the Court of Appeals was cut short by the last
paragraph of Section 9 of Batas Pambansa Blg. 129 which excludes from its
coverage the decisions and interlocutory orders issued under the Labor Code of
the Philippines and by the Central Board of Assessment Appeals.
Among the highest number of cases that are brought up to the Supreme Court are
labor cases. Hence, Senate Bill No. 1495 seeks to eliminate the exceptions
enumerated in Section 9 and, additionally, extends the coverage of appellate
review of the Court of Appeals in the decision(s) of the Securities and Exchange
Commission, the Social Security Commission, and the Employees Compensation
Commission to reduce the number of cases elevated to the Supreme Court.
(Emphases and corrections ours)
xxx
Senate Bill No. 1495 authored by our distinguished Colleague from Laguna
provides the ideal situation of drastically reducing the workload of the Supreme
Court without depriving the litigants of the privilege of review by an appellate
tribunal.
In closing, allow me to quote the observations of former Chief Justice Teehankee
in 1986 in the Annual Report of the Supreme Court:
x x x Amendatory legislation is suggested so as to relieve the Supreme Court of
the burden of reviewing these cases which present no important issues involved
beyond the particular fact and the parties involved, so that the Supreme Court
may wholly devote its time to cases of public interest in the discharge of its
mandated task as the guardian of the Constitution and the guarantor of the
peoples basic rights and additional task expressly vested on it now to determine
whether or not there has been a grave abuse of discretion amounting to lack of
jurisdiction on the part of any branch or instrumentality of the Government.
We used to have 500,000 cases pending all over the land, Mr. President. It has
been cut down to 300,000 cases some five years ago. I understand we are now
back to 400,000 cases. Unless we distribute the work of the appellate courts, we
shall continue to mount and add to the number of cases pending.
In view of the foregoing, Mr. President, and by virtue of all the reasons we have
submitted, the Committee on Justice and Human Rights requests the support and
collegial approval of our Chamber.
xxx
Surprisingly, however, in a subsequent session, the following Committee
Amendment was introduced by the said sponsor and the following proceedings
transpired:[20]
Senator Roco. On page 2, line 5, after the line Supreme Court in accordance with
the Constitution, add the phrase THE LABOR CODE OF THE PHILIPPINES UNDER
P.D. 442, AS AMENDED. So that it becomes clear, Mr. President, that issues arising
from the Labor Code will still be appealable to the Supreme Court.
The President. Is there any objection? (Silence) Hearing none, the amendment is
approved.
Senator Roco. On the same page, we move that lines 25 to 30 be deleted. This
was also discussed with our Colleagues in the House of Representatives and as
we understand it, as approved in the House, this was also deleted, Mr. President.
The President. Is there any objection? (Silence) Hearing none, the amendment is
approved.
Senator Roco. There are no further Committee amendments, Mr. President.
Senator Romulo. Mr. President, I move that we close the period of Committee
amendments.
The President. Is there any objection? (Silence) Hearing none, the amendment is
approved. (Italics supplied)
xxx
Thereafter, since there were no individual amendments, Senate Bill No. 1495 was
passed on second reading and being a certified bill, its unanimous approval on
third reading followed.[21]; Record of the Senate, Vol. V, No. 63, pp. 180-181.21
The Conference Committee Report on Senate Bill No. 1495 and House Bill No.
10452, having theretofore been approved by the House of Representatives, the
same was likewise approved by the Senate on February 20, 1995,[22] inclusive of
the dubious formulation on appeals to the Supreme Court earlier discussed.
The Court is, therefore, of the considered opinion that ever since appeals from the
NLRC to the Supreme Court were eliminated, the legislative intendment was that
the special civil action of certiorari was and still is the proper vehicle for judicial
review of decisions of the NLRC. The use of the word appeal in relation thereto
and in the instances we have noted could have been a lapsus plumae because
appeals by certiorari and the original action for certiorari are both modes of
judicial review addressed to the appellate courts. The important distinction
between them, however, and with which the Court is particularly concerned here
is that the special civil action of certiorari is within the concurrent original
jurisdiction of this Court and the Court of Appeals;[23] whereas to indulge in the
assumption that appeals by certiorari to the Supreme Court are allowed would not
subserve, but would subvert, the intention of Congress as expressed in the
sponsorship speech on Senate Bill No. 1495.
Incidentally, it was noted by the sponsor therein that some quarters were of the
opinion that recourse from the NLRC to the Court of Appeals as an initial step in
the process of judicial review would be circuitous and would prolong the
proceedings. On the contrary, as he commendably and realistically emphasized,
that procedure would be advantageous to the aggrieved party on this reasoning:
On the other hand, Mr. President, to allow these cases to be appealed to the Court
of Appeals would give litigants the advantage to have all the evidence on record
be reexamined and reweighed after which the findings of facts and conclusions of
said bodies are correspondingly affirmed, modified or reversed.
Under such guarantee, the Supreme Court can then apply strictly the axiom that
factual findings of the Court of Appeals are final and may not be reversed on
appeal to the Supreme Court. A perusal of the records will reveal appeals which
are factual in nature and may, therefore, be dismissed outright by minute
resolutions.[24]
While we do not wish to intrude into the Congressional sphere on the matter of
the wisdom of a law, on this score we add the further observations that there is a
growing number of labor cases being elevated to this Court which, not being a
trier of fact, has at times been constrained to remand the case to the NLRC for
resolution of unclear or ambiguous factual findings; that the Court of Appeals is
procedurally equipped for that purpose, aside from the increased number of its
component divisions; and that there is undeniably an imperative need for
expeditious action on labor cases as a major aspect of constitutional protection to
labor.
Therefore, all references in the amended Section 9 of B.P. No. 129 to supposed
appeals from the NLRC to the Supreme Court are interpreted and hereby declared
to mean and refer to petitions for certiorari under Rule 65. Consequently, all such
petitions should henceforth be initially filed in the Court of Appeals in strict
observance of the doctrine on the hierarchy of courts as the appropriate forum for
the relief desired.
Apropos to this directive that resort to the higher courts should be made in
accordance with their hierarchical order, this pronouncement in Santiago vs.
Vasquez, et al.[25] should be taken into account:
One final observation. We discern in the proceedings in this case a propensity on
the part of petitioner, and, for that matter, the same may be said of a number of
litigants who initiate recourses before us, to disregard the hierarchy of courts in
our judicial system by seeking relief directly from this Court despite the fact that
the same is available in the lower courts in the exercise of their original or
concurrent jurisdiction, or is even mandated by law to be sought therein. This
practice must be stopped, not only because of the imposition upon the precious
time of this Court but also because of the inevitable and resultant delay, intended
or otherwise, in the adjudication of the case which often has to be remanded or
referred to the lower court as the proper forum under the rules of procedure, or as
better equipped to resolve the issues since this Court is not a trier of facts. We,
therefore, reiterate the judicial policy that this Court will not entertain direct
resort to it unless the redress desired cannot be obtained in the appropriate
courts or where exceptional and compelling circumstances justify availment of a
remedy within and calling for the exercise of our primary jurisdiction.
WHEREFORE, under the foregoing premises, the instant petition for certiorari is
hereby REMANDED, and all pertinent records thereof ordered to be FORWARDED,
to the Court of Appeals for appropriate action and disposition consistent with the
views and ruling herein set forth, without pronouncement as to costs.
SO ORDERED.
S.S. VENTURES INTERNATIONAL, G.R. No. 161690
INC.,
Petitioner,
Present:
QUISUMBING, J., Chairperson,
- versus - YNARES-SANTIAGO,*
CARPIO MORALES,
TINGA, and
VELASCO, JR., JJ.
S.S. VENTURES LABOR UNION
(SSVLU) and DIR. HANS LEO Promulgated:
CACDAC, in His capacity as
Director of the Bureau of Labor July 23, 2008
Relations (BLR),
Respondents.
x-----------------------------------------------------------------------------------------x
DECISION
VELASCO, JR., J.:
Petitioner S.S. Ventures International, Inc. (Ventures), a PEZA-registered export
firm with principal place of business at Phase I-PEZA-Bataan Export Zone,
Mariveles, Bataan, is in the business of manufacturing sports shoes. Respondent
S.S. Ventures Labor Union (Union), on the other hand, is a labor organization
registered with the Department of Labor and Employment (DOLE) under
Certificate of Registration No. RO300-00-02-UR-0003.
On March 21, 2000, the Union filed with DOLE-Region III a petition for certification
election in behalf of the rank-and-file employees of Ventures. Five hundred forty
two (542) signatures, 82 of which belong to
______________________
* Additional member as per Special Order No. 509 dated July 1, 2008.
terminated Ventures employees, appeared on the basic documents supporting
the petition.
On August 21, 2000, Ventures filed a Petition[1] to cancel the Unions certificate of
registration invoking the grounds set forth in Article 239(a) of the Labor Code.[2]
Docketed as Case No. RO300-0008-CP-002 of the same DOLE regional office, the
petition alleged the following:
(1) The Union deliberately and maliciously included the names of more or less 82
former employees no longer connected with Ventures in its list of members who
attended the organizational meeting and in the adoption/ratification of its
constitution and by-laws held on January 9, 2000 in Mariveles, Bataan; and the
Union forged the signatures of these 82 former employees to make it appear they
took part in the organizational meeting and adoption and ratification of the
constitution;
(2) The Union maliciously twice entered the signatures of three persons namely:
Mara Santos, Raymond Balangbang, and Karen Agunos;
(3) No organizational meeting and ratification actually took place; and
(4) The Unions application for registration was not supported by at least 20% of
the rank-and-file employees of Ventures, or 418 of the total 2,197-employee
complement. Since more or less 82 of the 500[3] signatures were forged or
invalid, then the remaining valid signatures would only be 418, which is very
much short of the 439 minimum (2197 total employees x 20% = 439.4) required
by the Labor Code.[4]
In its Answer with Motion to Dismiss,[5] the Union denied committing the imputed
acts of fraud or forgery and alleged that: (1) the organizational meeting actually
took place on January 9, 2000 at the Shoe City basketball court in Mariveles; (2)
the 82 employees adverted to in Ventures petition were qualified Union members
for, although they have been ordered dismissed, the one-year prescriptive period
to question their dismissal had not yet lapsed; (3) it had complied with the 20%-
member registration requirement since it had 542 members; and (4) the double
signatures were inadvertent human error.
In its supplemental reply memorandum[6] filed on March 20, 2001, with
attachments, Ventures cited other instances of fraud and misrepresentation,
claiming that the affidavits executed by 82 alleged Union members show that
they were deceived into signing paper minutes or were harassed to signing their
attendance in the organizational meeting. Ventures added that some employees
signed the affidavits denying having attended such meeting.
In a Decision dated April 6, 2001, Regional Director Ana C. Dione of DOLE-Region
III found for Ventures, the dispositive portion of which reads:
Viewed in the light of all the foregoing, this office hereby grants the petition.
WHEREFORE, this office resolved to CANCEL Certificate of Registration No.
[RO300-00-02-UR-0003] dated 28 February 2000 of respondent S.S. Ventures
Labor Union-Independent.
So Ordered.[7]
Aggrieved, the Union interposed a motion for reconsideration, a recourse which
appeared to have been forwarded to the Bureau of Labor Relations (BLR).
Although it would later find this motion to have been belatedly filed, the BLR, over
the objection of Ventures which filed a Motion to Expunge, gave it due course and
treated it as an appeal.
Despite Ventures motion to expunge the appeal,[8] the BLR Director rendered on
October 11, 2002 a decision[9] in BLR-A-C-60-6-11-01, granting the Unions appeal
and reversing the decision of Dione. The fallo of the BLRs decision reads:
WHEREFORE, the appeal is hereby GRANTED. The Decision of Director Ana C.
Dione dated 6 April 2001 is hereby REVERSED and SET ASIDE. S.S. Ventures Labor
Union-Independent shall remain in the roster of legitimate labor organizations.
SO ORDERED.[10]
Ventures sought reconsideration of the above decision but was denied by the BLR.
Ventures then went to the Court of Appeals (CA) on a petition for certiorari under
Rule 65, the recourse docketed as CA-G.R. SP No. 74749. On October 20, 2003,
the CA rendered a Decision,[11] dismissing Ventures petition. Ventures motion for
reconsideration met a similar fate.[12]
Hence, this petition for review under Rule 45, petitioner Ventures raising the
following grounds:
I.
PUBLIC RESPONDENT ACTED RECKLESSLY AND IMPRUDENTLY, GRAVELY ABUSED
ITS DISCRETION AND EXCEEDED ITS JURISDICTION IN DISREGARDING THE
SUBSTANTIAL AND OVERWHELMING EVIDENCE ADDUCED BY THE PETITIONER
SHOWING THAT RESPONDENT UNION PERPETRATED FRAUD, FORGERY,
MISREPRESENTATION AND MISSTATEMENTS IN CONNECTION WITH THE ADOPTION
AND RATIFICATION OF ITS CONSTITUTION AND BY-LAWS, AND IN THE
PREPARATION OF THE LIST OF MEMBERS WHO TOOK PART IN THE ALLEGED
ORGANIZATIONAL MEETING BY HOLDING THAT:
A.
THE 87 AFFIDAVITS OF ALLEGED UNION MEMBERS HAVE NO EVIDENTIARY
WEIGHT.
B.
THE INCLUSION OF THE 82 EMPLOYEES IN THE LIST OF ATTENDEES TO THE
JANUARY 9, 2000 MEETING IS AN INTERNAL MATTER WITHIN THE AMBIT OF THE
WORKERS RIGHT TO SELF-ORGANIZATION AND OUTSIDE THE SPHERE OF
INFLUENCE (OF) THIS OFFICE (PUBLIC RESPONDENT IN THIS CASE) AND THE
PETITIONER.
II.
PUBLIC RESPONDENT ACTED RECKLESSLY AND IMPRUDENTLY, GRAVELY ABUSED
ITS DISCRETION AND EXCEEDED ITS JURISDICTION IN IGNORING AND
DISREGARDING THE BLATANT PROCEDURAL LAPSES OF THE RESPONDENT UNION
IN THE FILING OF ITS MOTION FOR RECONSIDERATION AND APPEAL.
A.
BY GIVING DUE COURSE TO THE MOTION FOR RECONSIDERATION FILED BY THE
RESPONDENT UNION DESPITE THE FACT THAT IT WAS FILED BEYOND THE
REGLEMENTARY PERIOD.
B.
BY ADMITTING THE APPEAL FILED BY ATTY. ERNESTO R. ARELLANO AND HOLDING
THAT THE SAME DOES NOT CONSTITUTE FORUM SHOPPING UNDER SUPREME
COURT CIRCULAR NO. 28-91.
III.
PUBLIC RESPONDENT ACTED RECKLESSLY AND IMPRUDENTLY, GRAVELY ABUSED
ITS DISCRETION AND EXCEEDED ITS JURISDICTION IN INVOKING THE
CONSTITUTIONAL RIGHT TO SELF-ORGANIZATION AND ILO CONVENTION NO. 87
TO JUSTIFY THE MASSIVE FRAUD, MISREPRESENTATION, MISSTATEMENTS AND
FORGERY COMMITTED BY THE RESPONDENT UNION.[13]
The petition lacks merit.
The right to form, join, or assist a union is specifically protected by Art. XIII,
Section 3[14] of the Constitution and such right, according to Art. III, Sec. 8 of the
Constitution and Art. 246 of the Labor Code, shall not be abridged. Once
registered with the DOLE, a union is considered a legitimate labor organization
endowed with the right and privileges granted by law to such organization. While
a certificate of registration confers a union with legitimacy with the concomitant
right to participate in or ask for certification election in a bargaining unit, the
registration may be canceled or the union may be decertified as the bargaining
unit, in which case the union is divested of the status of a legitimate labor
organization.[15] Among the grounds for cancellation is the commission of any of
the acts enumerated in Art. 239(a)[16] of the Labor Code, such as fraud and
misrepresentation in connection with the adoption or ratification of the unions
constitution and like documents. The Court, has in previous cases, said that to
decertify a union, it is not enough to show that the union includes ineligible
employees in its membership. It must also be shown that there was
misrepresentation, false statement, or fraud in connection with the application for
registration and the supporting documents, such as the adoption or ratification of
the constitution and by-laws or amendments thereto and the minutes of
ratification of the constitution or by-laws, among other documents.[17]
Essentially, Ventures faults both the BLR and the CA in finding that there was no
fraud or misrepresentation on the part of the Union sufficient to justify
cancellation of its registration. In this regard, Ventures makes much of, first, the
separate hand-written statements of 82 employees who, in gist, alleged that they
were unwilling or harassed signatories to the attendance sheet of the
organizational meeting.
We are not persuaded. As aptly noted by both the BLR and CA, these mostly
undated written statements submitted by Ventures on March 20, 2001, or seven
months after it filed its petition for cancellation of registration, partake of the
nature of withdrawal of union membership executed after the Unions filing of a
petition for certification election on March 21, 2000. We have in precedent
cases[18] said that the employees withdrawal from a labor union made before the
filing of the petition for certification election is presumed voluntary, while
withdrawal after the filing of such petition is considered to be involuntary and
does not affect the same. Now then, if a withdrawal from union membership done
after a petition for certification election has been filed does not vitiate such
petition, is it not but logical to assume that such withdrawal cannot work to nullify
the registration of the union? Upon this light, the Court is inclined to agree with
the CA that the BLR did not abuse its discretion nor gravely err when it concluded
that the affidavits of retraction of the 82 members had no evidentiary weight.
It cannot be over-emphasized that the registration or the recognition of a labor
union after it has submitted the corresponding papers is not ministerial on the
part of the BLR. Far from it. After a labor organization has filed the necessary
registration documents, it becomes mandatory for the BLR to check if the
requirements under Art. 234[19] of the Labor Code have been sedulously
complied with.[20] If the unions application is infected by falsification and like
serious irregularities, especially those appearing on the face of the application
and its attachments, a union should be denied recognition as a legitimate labor
organization. Prescinding from these considerations, the issuance to the Union of
Certificate of Registration No. RO300-00-02-UR-0003 necessarily implies that its
application for registration and the supporting documents thereof are prima facie
free from any vitiating irregularities.
Second, Ventures draws attention to the inclusion of 82 individuals to the list of
participants in the January 9, 2000 organizational meeting. Ventures submits that
the 82, being no longer connected with the company, should not have been
counted as attendees in the meeting and the ratification proceedings immediately
afterwards.
The assailed inclusion of the said 82 individuals to the meeting and proceedings
adverted to is not really fatal to the Unions cause for, as determined by the BLR,
the allegations of falsification of signatures or misrepresentation with respect to
these individuals are without basis.[21] The Court need not delve into the
question of whether these 82 dismissed individuals were still Union members
qualified to vote and affix their signature on its application for registration and
supporting documents. Suffice it to say that, as aptly observed by the CA, the
procedure for acquiring or losing union membership and the determination of who
are qualified or disqualified to be members are matters internal to the union and
flow from its right to self-organization.
To our mind, the relevancy of the 82 individuals active participation in the Unions
organizational meeting and the signing ceremonies thereafter comes in only for
purposes of determining whether or not the Union, even without the 82, would
still meet what Art. 234(c) of the Labor Code requires to be submitted, to wit:
Art. 234. Requirements of Registration.Any applicant labor organization x x x shall
acquire legal personality and shall be entitled to the rights and privileges granted
by law to legitimate labor organizations upon issuance of the certificate of
registration based on the following requirements:
xxxx
(c) The names of all its members comprising at least twenty percent (20%) of all
the employees in the bargaining unit where it seeks to operate.
The BLR, based on its official records, answered the poser in the affirmative.
Wrote the BLR:
It is imperative to look into the records of respondent union with this Bureau
pursuant to our role as a central registry of union and CBA records under Article
231 of the Labor Code and Rule XVII of the rules implementing Book V of the
Labor Code, as amended x x x.
In its union records on file with this Bureau, respondent union submitted the
names of [542] members x x x. This number easily complied with the 20%
requirement, be it 1,928 or 2,202 employees in the establishment. Even
subtracting the 82 employees from 542 leaves 460 union members, still within
440 or 20% of the maximum total of 2,202 rank-and-file employees.
Whatever misgivings the petitioner may have with regard to the 82 dismissed
employees is better addressed in the inclusion-exclusion proceedings during a
pre-election conference x x x. The issue surrounding the involvement of the 82
employees is a matter of membership or voter eligibility. It is not a ground to
cancel union registration. (Emphasis added.)
The bare fact that three signatures twice appeared on the list of those who
participated in the organizational meeting would not, to our mind, provide a valid
reason to cancel Certificate of Registration No. RO300-00-02-UR-0003. As the
Union tenably explained without rebuttal from Ventures, the double entries are no
more than normal human error, effected without malice. Even the labor arbiter
who found for Ventures sided with the Union in its explanation on the absence of
malice.[22]
The cancellation of a unions registration doubtless has an impairing dimension on
the right of labor to self-organization. Accordingly, we can accord concurrence to
the following apt observation of the BLR: [F]or fraud and misrepresentation [to be
grounds for] cancellation of union registration under Article 239 [of the Labor
Code], the nature of the fraud and misrepresentation must be grave and
compelling enough to vitiate the consent of a majority of union members.[23]
In its Comment, the Union points out that for almost seven (7) years following the
filing of its petition, no certification election has yet been conducted among the
rank-and-file employees. If this be the case, the delay has gone far enough and
can no longer be allowed to continue. The CA is right when it said that Ventures
should not interfere in the certification election by actively and persistently
opposing the certification election of the Union. A certification election is
exclusively the concern of employees and the employer lacks the legal
personality to challenge it.[24] In fact, jurisprudence frowns on the employers
interference in a certification election for such interference unduly creates the
impression that it intends to establish a company union.[25]
Ventures allegations on forum shopping and the procedural lapse supposedly
committed by the BLR in allowing a belatedly filed motion for reconsideration
need not detain us long. Suffice it to state that this Court has consistently ruled
that the application of technical rules of procedure in labor cases may be relaxed
to serve the demands of substantial justice.[26] So it must be in this case.
WHEREFORE, the petition is DENIED. The Decision and Resolution dated October
20, 2003 and January 19, 2004, respectively, of the CA are AFFIRMED. S.S.
Ventures Labor Union shall remain in the roster of legitimate labor organizations,
unless it has in the meantime lost its legitimacy for causes set forth in the Labor
Code. Costs against petitioner.
SO ORDERED.
G.R. No. 77395 November 29, 1988
BELYCA CORPORATION, petitioner,
vs.
DIR. PURA FERRER CALLEJA, LABOR RELATIONS, MANILA, MINISTRY OF LABOR AND
EMPLOYMENT; MED-ARBITER, RODOLFO S. MILADO, MINISTRY OF LABOR AND
EMPLOYMENT, REGIONAL OFFICE NO. 10 AND ASSOCIATED LABOR UNION (ALU-
TUCP), MINDANAO REGIONAL OFFICE, CAGAYAN DE ORO CITY, respondents.
Soriano and Arana Law Offices for petitioner.
The Solicitor General for public respondent.
Francisco D. Alas for respondent Associated Labor Unions-TUCP.
PARAS, J.:
This is a petition for certiorari and prohibition with preliminary injunction seeking
to annul or to set aside the resolution of the Bureau of Labor Relations dated
November 24, 1986 and denying the appeal, and the Bureau's resolution dated
January 13, 1987 denying petitioner's motion for reconsideration.
The dispositive portion of the questioned resolution dated November 24, 1986
(Rollo, p. 4) reads as follows:
WHEREFORE, in view of all the foregoing considerations, the Order is affirmed and
the appeal therefrom denied.
Let, therefore, the pertinent records of the case be remanded to the office of
origin for the immediate conduct of the certification election.
The dispositive portion of the resolution dated January 13, 1987 (Rollo, p. 92)
reads, as follows:
WHEREFORE, the Motion for Reconsideration filed by respondent Belyca
Corporation (Livestock Agro-Division) is hereby dismissed for lack of merit and the
Bureau's Resolution dated 24 November 1986 is affirmed. Accordingly, let the
records of this case be immediately forwarded to the Office of origin for the
holding of the certification elections.
No further motion shall hereafter be entertained.
The antecedents of the case are as follows:
On June 3, 1986, private respondent Associated Labor Union (ALU)-TUCP, a
legitimate labor organization duly registered with the Ministry of Labor and
Employment under Registration Certificate No. 783-IP, filed with the Regional
Office No. 10, Ministry of Labor and Employment at Cagayan de Oro City, a
petition for direct certification as the sole and exclusive bargaining agent of all
the rank and file employees/workers of Belyca Corporation (Livestock and Agro-
Division), a duly organized, registered and existing corporation engaged in the
business of poultry raising, piggery and planting of agricultural crops such as
corn, coffee and various vegetables, employing approximately 205 rank and file
employees/workers, the collective bargaining unit sought in the petition, or in
case of doubt of the union's majority representation, for the issuance of an order
authorizing the immediate holding of a certification election (Rollo, p. 18).
Although the case was scheduled for hearing at least three times, no amicable
settlement was reached by the parties. During the scheduled hearing of July 31,
1986 they, however, agreed to submit simultaneously their respective position
papers on or before August 11, 1986 (rollo. p. 62).
Petitioner ALU-TUCP, private respondent herein, in its petition and position paper
alleged, among others, (1) that there is no existing collective bargaining
agreement between the respondent employer, petitioner herein, and any other
existing legitimate labor unions; (2) that there had neither been a certification
election conducted in the proposed bargaining unit within the last twelve (12)
months prior to the filing of the petition nor a contending union requesting for
certification as the. sole and exclusive bargaining representative in the proposed
bargaining unit; (3) that more than a majority of respondent employer's rank-and-
file employees/workers in the proposed bargaining unit or one hundred thirty-
eight (138) as of the date of the filing of the petition, have signed membership
with the ALU-TUCP and have expressed their written consent and authorization to
the filing of the petition; (4) that in response to petitioner union's two letters to
the proprietor/ General Manager of respondent employer, dated April 21, 1986
and May 8, 1 986, requesting for direct recognition as the sole and exclusive
bargaining agent of the rank-and-file workers, respondent employer has locked
out 119 of its rank-and-file employees in the said bargaining unit and had
dismissed earlier the local union president, vice-president and three other active
members of the local unions for which an unfair labor practice case was filed by
petitioner union against respondent employer last July 2, 1986 before the NLRC in
Cagayan de Oro City (Rollo, pp. 18; 263).<re||an1w>
Respondent employer, on the other hand, alleged in its position paper, among
others, (1) that due to the nature of its business, very few of its employees are
permanent, the overwhelming majority of which are seasonal and casual and
regular employees; (2) that of the total 138 rank-and-file employees who
authorized, signed and supported the filing of the petition (a) 14 were no longer
working as of June 3, 1986 (b) 4 resigned after June, 1986 (c) 6 withdrew their
membership from petitioner union (d) 5 were retrenched on June 23, 1986 (e) 12
were dismissed due to malicious insubordination and destruction of property and
(f) 100 simply abandoned their work or stopped working; (3) that the 128
incumbent employees or workers of the livestock section were merely transferred
from the agricultural section as replacement for those who have either been
dismissed, retrenched or resigned; and (4) that the statutory requirement for
holding a certification election has not been complied with by the union (Rollo, p.
26).
The Labor Arbiter granted the certification election sought for by petitioner union
in his order dated August 18, 1986 (Rollo, p. 62).
On February 4, 1987, respondent employer Belyca Corporation, appealed the
order of the Labor Arbiter to the Bureau of Labor Relations in Manila (Rollo, p. 67)
which denied the appeal (Rollo, p. 80) and the motion for reconsideration (Rollo,
p. 92). Thus, the instant petition received in this Court by mail on February 20,
1987 (Rollo, p. 3).
In the resolution of March 4, 1987, the Second Division of this Court required
respondent Union to comment on the petition and issued a temporary restraining
order (,Rollo, p. 95).
Respondent union filed its comment on March 30, 1987 (Rollo, p. 190); public
respondents filed its comment on April 8, 1987 (Rollo, p. 218).
On May 4, 1987, the Court resolved to give due course to the petition and to
require the parties to submit their respective memoranda within twenty (20) days
from notice (Rollo, p. 225).
The Office of the Solicitor General manifested on June 11, 1987 that it is adopting
the comment for public respondents as its memorandum (Rollo, p. 226);
memorandum for respondent ALU was filed on June 30, 1987 (Rollo, p. 231); and
memorandum for petitioner, on July 30, 1987 (Rollo, p. 435).
The issues raised in this petition are:
I
WHETHER OR NOT THE PROPOSED BARGAINING UNIT IS AN APPROPRIATE
BARGAINING UNIT.
II
WHETHER OR NOT THE STATUTORY REQUIREMENT OF 30% (NOW 20%) OF THE
EMPLOYEES IN THE PROPOSED BARGAINING UNIT, ASKING FOR A CERTIFICATION
ELECTION HAD BEEN STRICTLY COMPLIED WITH.
In the instant case, respondent ALU seeks direct certification as the sole and
exclusive bargaining agent of all the rank-and-file workers of the livestock and
agro division of petitioner BELYCA Corporation (Rollo, p. 232), engaged in piggery,
poultry raising and the planting of agricultural crops such as corn, coffee and
various vegetables (Rollo, p. 26). But petitioner contends that the bargaining unit
must include all the workers in its integrated business concerns ranging from
piggery, poultry, to supermarts and cinemas so as not to split an otherwise single
bargaining unit into fragmented bargaining units (Rollo, p. 435).<re||an1w> justifies the format or existence as a separate appropriate collective bargaining
The Labor Code does not specifically define what constitutes an appropriate
collective bargaining unit. Article 256 of the Code provides:
Art. 256. Exclusive bargaining representative.The labor organization
designated or selected by the majority of the employees in an appropriate
collective bargaining unit shall be exclusive representative of the employees in
such unit for the purpose of collective bargaining. However, an individual
employee or group of employee shall have the right at any time to present
grievances to their employer.
According to Rothenberg, a proper bargaining unit maybe said to be a group of
employees of a given employer, comprised of all or less than all of the entire body
of employees, which the collective interests of all the employees, consistent with
equity to the employer, indicate to be best suited to serve reciprocal rights and
duties of the parties under the collective bargaining provisions of the law
(Rothenberg in Labor Relations, p. 482).
This Court has already taken cognizance of the crucial issue of determining the
proper constituency of a collective bargaining unit.
Among the factors considered in Democratic Labor Association v. Cebu
Stevedoring Co. Inc. (103 Phil 1103 [1958]) are: "(1) will of employees (Glove
Doctrine); (2) affinity and unity of employee's interest, such as substantial
similarity of work and duties or similarity of compensation and working
conditions; (3) prior collective bargaining history; and (4) employment status,
such as temporary, seasonal and probationary employees".
Under the circumstances of that case, the Court stressed the importance of the
fourth factor and sustained the trial court's conclusion that two separate
bargaining units should be formed in dealing with respondent company, one
consisting of regular and permanent employees and another consisting of casual
laborers or stevedores. Otherwise stated, temporary employees should be treated
separately from permanent employees. But more importantly, this Court laid
down the test of proper grouping, which is community and mutuality of interest.
Thus, in a later case, (Alhambra Cigar and Cigarette Manufacturing Co. et al. v.
Alhambra Employees' Association 107 Phil. 28 [1960]) where the employment
status was not at issue but the nature of work of the employees concerned; the
Court stressed the importance of the second factor otherwise known as the
substantial-mutual-interest test and found no reason to disturb the finding of the
lower Court that the employees in the administrative, sales and dispensary
departments perform work which has nothing to do with production and
maintenance, unlike those in the raw leaf, cigar, cigarette and packing and
engineering and garage departments and therefore community of interest which
unit.
Still later in PLASLU v. CIR et al. (110 Phil. 180 [1960]) where the employment
status of the employees concerned was again challenged, the Court reiterating
the rulings, both in Democratic Labor Association v. Cebu Stevedoring Co. Inc.
supra and Alhambra Cigar and Cigarette Co. et al. v. Alhambra Employees'
Association (supra) held that among the factors to be considered are:
employment status of the employees to be affected, that is the positions and
categories of work to which they belong, and the unity of employees' interest
such as substantial similarity of work and duties.
In any event, whether importance is focused on the employment status or the
mutuality of interest of the employees concerned "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
Co. Inc. supra)
Hence, still later following the substantial-mutual interest test, the Court ruled
that there is a substantial difference between the work performed by musicians
and that of other persons who participate in the production of a film which suffice
to show that they constitute a proper bargaining unit. (LVN Pictures, Inc. v.
Philippine Musicians Guild, 1 SCRA 132 [1961]).
Coming back to the case at bar, it is beyond question that the employees of the
livestock and agro division of petitioner corporation perform work entirely
different from those performed by employees in the supermarts and cinema.
Among others, the noted difference are: their working conditions, hours of work,
rates of pay, including the categories of their positions and employment status.
As stated by petitioner corporation in its position paper, due to the nature of the
business in which its livestock-agro division is engaged very few of its employees
in the division are permanent, the overwhelming majority of which are seasonal
and casual and not regular employees (Rollo, p. 26). Definitely, they have very
little in common with the employees of the supermarts and cinemas. To lump all
the employees of petitioner in its integrated business concerns cannot result in an
efficacious bargaining unit comprised of constituents enjoying a community or
mutuality of interest. Undeniably, the rank and file employees of the livestock-
agro division fully constitute a bargaining unit that satisfies both requirements of
classification according to employment status and of the substantial similarity of
work and duties which will ultimately assure its members the exercise of their
collective bargaining rights.
II
It is undisputed that petitioner BELYCA Corporation (Livestock and Agro Division)
employs more or less two hundred five (205) rank-and-file employees and
workers. It has no existing duly certified collective bargaining agreement with any
legitimate labor organization. There has not been any certification election
conducted in the proposed bargaining unit within the last twelve (12) months
prior to the filing of the petition for direct certification and/or certification election
with the Ministry of Labor and Employment, and there is no contending union
requesting for certification as the sole and exclusive bargaining representative in
the proposed bargaining unit.
The records show that on the filing of the petition for certification and/or
certification election on June 3, 1986; 124 employees or workers which are more
than a majority of the rank-and-file employees or workers in the proposed
bargaining unit had signed membership with respondent ALU-TUCP and had
expressed their written consent and authorization to the filing of the petition.
Thus, the Labor Arbiter ordered the certification election on August 18, 1986 on a
finding that 30% of the statutory requirement under Art. 258 of the Labor Code
has been met.
But, petitioner corporation contends that after June 3, 1986 four (4) employees
resigned; six (6) subsequently withdrew their membership; five (5) were
retrenched; twelve (12) were dismissed for illegally and unlawfully barricading the
entrance to petitioner's farm; and one hundred (100) simply abandoned their
work.
Petitioner's claim was however belied by the Memorandum of its personnel officer
to the 119 employees dated July 28, 1986 showing that the employees were on
strike, which was confirmed by the finding of the Bureau of Labor Relations to the
effect that they went on strike on July 24, 1986 (Rollo, p. 419). Earlier the local
union president, Warrencio Maputi; the Vice-president, Gilbert Redoblado and
three other active members of the union Carmen Saguing, Roberto Romolo and
Iluminada Bonio were dismissed and a complaint for unfair labor practice, illegal
dismissal etc. was filed by the Union in their behalf on July 2, 1986 before the
NLRC of Cagayan de Oro City (Rollo, p. 415).<re||an1w> The complaint was
amended on August 20, 1986 for respondent Union to represent Warrencio Maputi
and 137 others against petitioner corporation and Bello Casanova President and
General Manager for unfair labor practice, illegal dismissal, illegal lockout, etc.
(Rollo, p. 416).
Under Art. 257 of the Labor Code once the statutory requirement is met, the
Director of Labor Relations has no choice but to call a certification election (Atlas
Free Workers Union AFWU PSSLU Local v. Noriel, 104 SCRA 565 [1981]; Vismico
Industrial Workers Association (VIWA) v. Noriel, 131 SCRA 569 [1984]) It becomes
in the language of the New Labor Code "Mandatory for the Bureau to conduct a
certification election for the purpose of determining the representative of the
employees in the appropriate bargaining unit and certify the winner as the
exclusive bargaining representative of all employees in the unit." (Federacion
Obrera de la Industria Tabaquera y Otros Trabajadores de Filipinas v. Noriel, 72
SCRA 24 [1976]; Kapisanan Ng Mga Manggagawa v. Noriel, 77 SCRA 414 [1977]);
more so when there is no existing collective bargaining agreement. (Samahang
Manggagawa Ng Pacific Mills, Inc. v. Noriel, 134 SCRA 152 [1985]); and there has
not been a certification election in the company for the past three years (PLUM
Federation of Industrial and Agrarian Workers v. Noriel, 119 SCRA 299 [1982]) as
in the instant case.
It is significant to note that 124 employees out of the 205 employees of the
Belyca Corporation have expressed their written consent to the certification
election or more than a majority of the rank and file employees and workers;
much more than the required 30% and over and above the present requirement
of 20% by Executive Order No. 111 issued on December 24, 1980 and applicable
only to unorganized establishments under Art. 257, of the Labor Code, to which
the BELYCA Corporation belong (Ass. Trade Unions (ATU) v. Trajano, G.R. No.
75321, June 20, 1988).) More than that, any doubt cast on the authenticity of
signatures to the petition for holding a certification election cannot be a bar to its
being granted (Filipino Metals Corp. v. Ople 107 SCRA 211 [1981]). Even doubts as
to the required 30% being met warrant holding of the certification election (PLUM
Federation of Industrial and Agrarian Workers v. Noriel, 119 SCRA 299 [1982]). In
fact, once the required percentage requirement has been reached, the
employees' withdrawal from union membership taking place after the filing of the
petition for certification election will not affect said petition. On the contrary, the
presumption arises that the withdrawal was not free but was procured through
duress, coercion or for a valuable consideration (La Suerte Cigar and Cigarette
Factory v. Director of the Bureau of Labor Relations, 123 SCRA 679 [1983]).
Hence, the subsequent disaffiliation of the six (6) employees from the union will
not be counted against or deducted from the previous number who had signed up
for certification elections Vismico Industrial Workers Association (VIWA) v. Noriel
131 SCRA 569 [1984]).<re||an1w> Similarly, until a decision, final in SO ORDERED.
character, has been issued declaring the strike illegal and the mass dismissal or
retrenchment valid, the strikers cannot be denied participation in the certification
election notwithstanding, the vigorous condemnation of the strike and the fact
that the picketing were attended by violence. Under the foregoing circumstances,
it does not necessarily follow that the strikers in question are no longer entitled to
participate in the certification election on the theory that they have automatically
lost their jobs. (Barrera v. CIR, 107 SCRA 596 [1981]). For obvious reasons, the
duty of the employer to bargain collectively is nullified if the purpose of the
dismissal of the union members is to defeat the union in the consent requirement
for certification election. (Samahang Manggagawa Ng Via Mare v. Noriel, 98 SCRA
507 [1980]). As stressed by this Court, the holding of a certification election is a
statutory policy that should not be circumvented. (George and Peter Lines Inc. v.
Associated Labor Unions (ALU), 134 SCRA 82 [1986]).
Finally, as a general rule, a certification election is the sole concern of the
workers. The only exception is where the employer has to file a petition for
certification election pursuant to Art. 259 of the Labor Code because the latter
was requested to bargain collectively. But thereafter the role of the employer in
the certification process ceases. The employer becomes merely a bystander
(Trade Union of the Phil. and Allied Services (TUPAS) v. Trajano, 120 SCRA 64
[1983]).
There is no showing that the instant case falls under the above mentioned
exception. However, it will be noted that petitioner corporation from the outset
has actively participated and consistently taken the position of adversary in the
petition for direct certification as the sole and exclusive bargaining representative
and/or certification election filed by respondent Associated Labor Unions (ALU)-
TUCP to the extent of filing this petition for certiorari in this Court. Considering
that a petition for certification election is not a litigation but a mere investigation
of a non-adversary character to determining the bargaining unit to represent the
employees (LVN Pictures, Inc. v. Philippine Musicians Guild, supra; Bulakena
Restaurant & Caterer v. Court of Industrial Relations, 45 SCRA 88 [1972]; George
Peter Lines, Inc. v. Associated Labor Union, 134 SCRA 82 [1986]; Tanduay
Distillery Labor Union v. NLRC, 149 SCRA 470 [1987]), and its only purpose is to
give the employees true representation in their collective bargaining with an
employer (Confederation of Citizens Labor Unions CCLU v. Noriel, 116 SCRA 694
[1982]), there appears to be no reason for the employer's objection to the
formation of subject union, much less for the filing of the petition for a
certification election.
PREMISES CONSIDERED, (a) the petition is DISMISSED for lack of merit (b)
resolution of the Bureau of Labor Relations dated Nov. 24, 1986 is AFFIRMED; and
the temporary restraining order issued by the Court on March 4, 1987 is LIFTED
permanently.
[G.R. No. 157146. April 29, 2005]
LAGUNA AUTOPARTS MANUFACTURING CORPORATION, petitioner, vs. OFFICE OF
THE SECRETARY, DEPARTMENT OF LABOR AND EMPLOYMENT (DOLE) and LAGUNA
AUTOPARTS MANUFACTURING CORPORATION OBRERO PILIPINO-LAMCOR
CHAPTER, respondents.
DECISION
CALLEJO, SR., J.:
This is a petition for review of the Decision[1] of the Court of Appeals (CA) in CA-
G.R. SP No. 67424 dated September 13, 2002, and the Resolution dated February
5, 2003 denying the motion for reconsideration thereof. The assailed decision
affirmed in toto the decision of the Secretary of Labor and Employment, granting
the petition for certification election filed by respondent Laguna Autoparts
Manufacturing Corporation Obrero Pilipino-LAMCOR Chapter.
On May 3, 1999, the respondent union filed a petition for certification election
before the Department of Labor and Employment (DOLE), Regional Office No. IV,
Calamba, Laguna. In its petition, the respondent union alleged that Obrero Pilipino
was a legitimate labor organization under Registration Certificate No. NCR-LF-11-
04-92 issued by DOLE on November 11, 1992 and that its chapter affiliate,
LAMCOR Chapter, had been assigned Control No. RO400-9807-CC-030 dated
March 23, 1999. A copy of the respondent unions Certificate of Creation was
attached to the petition. The petition further alleged that the bargaining unit
sought to be represented was composed of all the rank-and-file employees in the
petitioner company, more or less, 160 employees. It averred that the said
bargaining unit is unorganized and that there has been no certification election
conducted for the past 12 months prior to the filing of the petition.[2]
The petitioner company moved to dismiss the petition for certification election. It
claimed that the respondent union was not a legitimate labor organization for
failure to show that it had complied with the registration requirements, such as
the submission of the following requirements to the Regional Office or the Bureau
of Labor Relations (BLR):
a) Proof of payment of registration fee;
b) List of officers and their addresses, and the address of the principal place of
business of the union;
c) Minutes of the organizational meeting and the list of workers who participated
in the said meeting;
d) Names of the members comprising at least twenty percent (20%) of all the
employees in the bargaining unit where the union seeks to operate;
e) Copies of financial reports or books of accounts; and
f) Copies of petitioners constitution and by-laws, minutes of its adoption or
ratification, and list of members who participated in it.[3]
The petitioner company further asserted in the said motion that even if the
respondent union was issued a certificate of registration, it could not file a
petition for certification election since its legal personality was at question.[4]
On October 24, 2000, Med-Arbiter Anastasio L. Bactin dismissed the petition for
certification election for the respondent unions lack of legal personality. The Med-
Arbiter found that the respondent union had not yet attained the status of a
legitimate labor organization because it failed to indicate its principal office on the
documents it submitted to the Regional Office. He opined that this was a fatal
defect tantamount to failure to submit the complete requirements, which
warranted the dismissal of the petition for certification election.[5]
The respondent union appealed the case to the Secretary of Labor and
Employment, Patricia A. Sto. Tomas, who ruled as follows:
WHEREFORE, the appeal is GRANTED. The order dated 24 October 2000 of the
Med-Arbiter is REVERSED and SET ASIDE. Accordingly, let the entire records of
this case be remanded to the regional office of origin for the immediate conduct
of a certification election, subject to the usual pre-election conference, among the
rank-and-file employees of Laguna Auto Parts Manufacturing Corporation
(LAMCOR), with the following choices:
1. Obrero Pilipino LAMCOR Chapter; and
2. No Union
Pursuant to Section 11.1, Rule XI of the New Implementing Rules, the employer is
hereby directed to submit to the regional office of origin the certified list of
current employees in the bargaining unit for the last three months prior to the
issuance of this decision.
SO DECIDED.[6]
Finding no cogent reason to alter her decision, the Secretary of Labor and
Employment denied the motion for reconsideration thereof.[7]
Not convinced, the petitioner filed a petition for certiorari with the CA on the
following grounds:
I. PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION IN FINDING
THAT PRIVATE RESPONDENT HAS COMPLIED WITH ALL REQUIREMENTS FOR
REGISTRATION;
II. THE PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION IN
FINDING THAT PRIVATE RESPONDENT IS A LEGITIMATE LABOR UNION DESPITE
LACK OF REGISTRATION AS SUCH.[8]
On September 13, 2002, the CA rendered a Decision in favor of the respondent
union, thus:
WHEREFORE, the instant petition is hereby DENIED and the assailed decision of
the Secretary of Labor and Employment is AFFIRMED in toto.
SO ORDERED.[9]
The CA stressed that a local or chapter need not be registered to become a
legitimate labor organization. It pointed out that a local or chapter acquires legal
personality as a labor organization from the date of filing of the complete
documents enumerated in Section 1[10] of Rule VI of the Implementing Rules of
Book V (as amended by Department Order [D.O.] No. 9). The CA held that the
findings of the Labor Secretary was amply supported by the records; such findings
would not be reversed since she is considered to have acquired expertise as her
jurisdiction is confined to specific matters. The CA, citing the case of Pagpalain
Haulers, Inc. vs. Trajano,[11] also upheld the validity of D.O. No. 9 since the
petitioner failed to show that it was contrary to law or the Constitution.
Finally, the CA noted that it was the employer which offered the most tenacious
resistance to the holding of a certification election among its regular rank-and-file
employees. It opined that this must not be so for the choice of a collective
bargaining agent was the sole concern of the employees, and the employer
should be a mere bystander.[12]
The petitioner filed a motion for reconsideration of the CA decision, but the same
was likewise denied in a Resolution dated February 5, 2003.

Hence, this petition for review wherein the petitioner relies on the sole ground
WITH DUE RESPECT, THE HON. COURT OF APPEALS COMMITTED REVERSIBLE
ERRORS OF FACTS AND LAW WHEN IT AFFIRMED THE DECISION DATED JULY 5,
2001 OF THE HON. SECRETARY PATRICIA STO. TOMAS IN THE CASE IN RE:
PETITION FOR CERTIFICATION ELECTION AMONG THE RANK- AND-FILE EMPLOYEES
OF LAGUNA AUTO PARTS MFTG. CORP. CASE NO. RO400-9905-RU-001 WHEN IT
RENDERED ITS DECISION DATED SEPTEMBER 13, 2002.[13]
The issues are the following: (a) whether or not the respondent union is a
legitimate labor organization; (b) whether or not a chapters legal personality may
be collaterally attacked in a petition for certification election; and (c) whether or
not the petitioner, as the employer, has the legal standing to oppose the petition
for certification election.
The petitioner submits that there is no law prohibiting it from questioning and
impugning the status of the respondent union even in a petition for certification
election. It stresses that the right to file a petition for certification election is a
mere statutory right and, to enjoy such right, the respondent union must comply
with the requirements provided under the law, particularly the requirement that
the applicant must be a legitimate labor organization. In this case, the Med-
Arbiter found that the respondent union, which is a local or chapter, had not yet
attained the status of a legitimate labor organization for failure to indicate its
principal office on the list of officers it submitted to the Regional Office. The
petitioner insists that substantial compliance with the requirements is not
sufficient; as such, even if such address was indicated in the other documents
submitted to the Regional Office, the requirement would still not be considered
fulfilled. The petitioner concludes that the respondent union, therefore, does not
have the right to file a petition for certification election.
The petitioner further postulates that in order to be considered legitimate, a labor
organization must be issued a certificate of registration. It contends that D.O. No.
9, insofar as it requires that the mere submission of documentary requirements as
sufficient to give legitimate personality to a labor organization, is ultra vires. The
petitioner avers that the said Department Order could not amend Article 234 of
the Labor Code which clearly states that the registration of a union is the
operative act that imbues it with legitimate personality.
The petitioner then argues that since the mere submission of documents does not
vest legitimate status on a local or chapter, it follows that such status may be
questioned collaterally in a petition for certification election. It adds that the issue
of whether or not the respondent union has the legal personality must first be
resolved before the petition for certification election should be granted.
Finally, the petitioner maintains that in a number of cases,[14] the employer was
allowed to question the status of the union-applicant in a petition for certification
election.[15]
For its part, the respondent union avers that the petitioners active participation in
the representation proceedings was an act of intervention of the employees right
to self-organization. It asserts that the CA was correct in finding that the
petitioner did not observe a strictly hands-off policy in the representation
proceedings, in violation of established jurisprudence. It argues that the
petitioners alleged violation of the requirements of D.O. No. 9, for failure to
indicate its principal address, has already been resolved by the decision of the
Secretary of Labor and Employment.[16]
The petition is unmeritorious.
In a petition for review on certiorari as a mode of appeal under Rule 45 of the
Rules of Court, a petitioner can raise only questions of law the Supreme Court is
not the proper venue to consider a factual issue as it is not a trier of facts.[17]
Findings of fact of administrative agencies and quasi-judicial bodies, which have
acquired expertise because their jurisdiction is confined to specific matters, are
generally accorded not only great respect but even finality.[18] This is particularly
true where the CA affirms such findings of fact. In this case, the CA affirmed the
finding of the Secretary of Labor and Employment that the respondent union is a
legitimate labor organization.
Indeed, a local or chapter need not be independently registered to acquire legal
personality. Section 3, Rule VI of the Implementing Rules of Book V, as amended
by D.O. No. 9 clearly states
SEC. 3. Acquisition of legal personality by local/chapter. A local/chapter
constituted in accordance with Section 1 of this Rule shall acquire legal
personality from the date of filing of the complete documents enumerated
therein. Upon compliance with all documentary requirements, the Regional Office
or Bureau shall issue in favor of the local/chapter a certificate indicating that it is
included in the roster of legitimate labor organizations.[19]
As gleaned from the said provision, the task of determining whether the local or
chapter has submitted the complete documentary requirements is lodged with
the Regional Office or the BLR, as the case may be. The records of the case show
that the respondent union submitted the said documents to Regional Office No. IV
and was subsequently issued the following certificate:
CERTIFICATE OF CREATION OF LOCAL/ CHAPTER NO.
This certifies that as of July 16, 1998 the OBRERO PILIPINO-LAMCOR submitted to
this Office Charter Certificate No. 07-98 issued by OBRERO PILIPINO with
complete supporting documents. From said date, it has acquired legal personality
as a labor organization. It shall have the right to represent its members for all
purposes not contrary to law or applicable regulations and to its constitution and
by-laws.
The legitimate personality of OBRERO PILIPINO-LAMCOR CHAPTER is without
prejudice to whatever grounds for revocation or cancellation as may be
prescribed by applicable laws and regulations.
March 23, 1999
Date
By:
(SGD.)
RAYMUNDO G. AGRAVANTE
Labor Relations Division Chief[20]
Hence, the Regional Office, through the Labor Relations Division Chief, has
determined that the respondent union complied with the requirements under the
law. It, therefore, declared that the respondent union has acquired legal
personality as a labor organization. Absent any pronouncement to the contrary,
such determination of the Labor Relations Division Chief will stand, on the
presumption that the duty of determining whether the respondent union
submitted the complete documentary requirements has been regularly
performed.
We rule, however, that such legal personality may not be subject to a collateral
attack but only through a separate action instituted particularly for the purpose of
assailing it. This is categorically prescribed by Section 5, Rule V of the
Implementing Rules of Book V, which states as follows:
SEC. 5. Effect of registration. The labor organization or workers association shall
be deemed registered and vested with legal personality on the date of issuance of
its certificate of registration. Such legal personality cannot thereafter be subject
to collateral attack but may be questioned only in an independent petition for
cancellation in accordance with these Rules.[21]
Hence, to raise the issue of the respondent unions legal personality is not proper
in this case. The pronouncement of the Labor Relations Division Chief, that the
respondent union acquired a legal personality with the submission of the
complete documentary requirement, cannot be challenged in a petition for
certification election.
The discussion of the Secretary of Labor and Employment on this point is also
enlightening, thus:
Section 5, Rule V of D.O. 9 is instructive on the matter. It provides that the legal
personality of a union cannot be the subject of collateral attack in a petition for
certification election, but may be questioned only in an independent petition for
cancellation of union registration. This has been the rule since NUBE v. Minister of
Labor, 110 SCRA 274 (1981). What applies in this case is the principle that once a
union acquires legitimate status as a labor organization, it continues as such until
its certificate of registration is cancelled or revoked in an independent action for
cancellation.
Equally important is Section 11, Paragraph II, Rule IX of D.O. 9, which provides for
the dismissal of a petition for certification election based on the lack of legal
personality of a labor organization only in the following instances: (1) appellant is
not listed by the Regional Office or the BLR in its registry of legitimate labor
organizations; or (2) appellants legal personality has been revoked or cancelled
with finality. Since appellant is listed in the registry of legitimate labor
organizations, and its legitimacy has not been revoked or cancelled with finality,
the granting of its petition for certification election is proper.[22]
Finally, on the issue of whether the petitioner has the legal standing to oppose
the petition for certification election, we rule in the negative. Our ruling in San
Miguel Foods, Inc.-Cebu B-Meg Feed Plant v. Laguesma[23] is still sound, thus:
In any case, this Court notes that it is petitioner, the employer, which has offered
the most tenacious resistance to the holding of a certification election among its
monthly-paid rank-and-file employees. This must not be so, for the choice of a
collective bargaining agent is the sole concern of the employees. The only
exception to this rule is where the employer has to file the petition for
certification election pursuant to Article 258 of the Labor Code because it was
requested to bargain collectively, which exception finds no application in the case
before us. Its role in a certification election has aptly been described in Trade
Unions of the Philippines and Allied Services (TUPAS) v. Trajano, as that of a mere
bystander. It has no legal standing in a certification election as it cannot oppose
the petition or appeal the Med-Arbiters orders related thereto. [24]
In conclusion, we find no reversible error in the CAs decision dismissing the
petition for certiorari for the nullification of the decision of the Secretary of Labor
and Employment. It should be stressed that certiorari will issue only to correct
errors of jurisdiction and not to correct errors of judgment or mistakes in the
tribunals findings and conclusions.[25] The petitioner failed to demonstrate any
grave abuse of discretion on the part of the Secretary of Labor and Employment
in granting the petition for certification election.
WHEREFORE, premises considered, the petition is DENIED DUE COURSE. The
Decision of the Court of Appeals in CA-G.R. SP No. 67424 and the Resolution
dated February 5, 2003 are AFFIRMED.
SO ORDERED.
Puno, (Chairman), Austria-Martinez, Tinga, and Chico-Nazario, JJ., concur.
[G.R. No. 125038. November 6, 1997]
THE HONGKONG AND SHANGHAI BANKING CORPORATION EMPLOYEES UNION,
petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION AND THE HONGKONG
AND SHANGHAI BANKING CORPORATION, LTD., respondents.
DECISION
REGALADO, J.:
In an Order dated November 27, 1995,[1] respondent National Labor Relations
Commission (NLRC) reversed and set aside the order issued by Labor Arbiter
Felipe T. Garduque II which dismissed and remanded for further proceedings the
case for unfair labor practice filed by private respondent Hongkong and Shanghai
Banking Corporation, Ltd. (the Bank) against petitioner Hongkong and Shanghai
Banking Corporation Employees Union (the Union), the recognized bargaining
representative of the Banks regular rank and file employees. This petition for
certiorari impugns the aforesaid Order of respondent commission.
The case at bar arose from the issuance of a non-executive job evaluation
program (JEP) lowering the starting salaries of future employees, resulting from
the changes made in the job grades and structures, which was unilaterally
implemented by the Bank retroactive to January 1, 1993. The program in question
was announced by the Bank on January 18, 1993.
In a letter dated January 20, 1993,[2] the Union, through its President, Peter Paul
Gamelo, reiterated its previous verbal objections to the Banks unilateral decision
to devise and put into effect the said program because it allegedly was in
violation of the existing collective bargaining agreement (CBA) between the
parties and thus constituted unfair labor practice. The Union demanded the
suspension of the implementation of the JEP and proposed that the same be
instead taken up or included in their upcoming CBA negotiations.
The Bank replied in a letter dated January 25, 1993[3] that the JEP was issued in
compliance with its obligation under the CBA, apparently referring to Article III,
Section 18 thereof which provides that:
Within the lifetime of this Agreement the BANK shall conduct a job evaluation of
employee positions. The implementation timetable of the said exercise shall be
furnished the UNION by the BANK within two (2) months from the signing of this
Agreement.
This prompted the Union to undertake concerted activities to protest the
implementation of the JEP, such as whistle blowing during office hours starting on
March 15, 1993 up to the 23rd day, and writing to clients of the Bank allegedly to
inform them of the real situation then obtaining and of an imminent disastrous
showdown between the Bank and the Union.
The Union engaged in said activities despite the fact that as early as February 11,
1993,[4] it had already initiated the renegotiation of the non-representational
provisions of the CBA by submitting their proposal to the Bank, to which the latter
submitted a reply. As a matter of fact, negotiations on the CBA commenced on
March 5, 1993 and continued through March 24, 1993 when the Bank was forced
to declare a recess to last for as long as the Union kept up with its concerted
activities. The Union refused to concede to the demand of the Bank unless the
latter agreed to suspend the implementation of the JEP.
Instead of acquiescing thereto, the Bank filed on April 5, 1993[5] with the
Arbitration Branch of the NLRC a complaint for unfair labor practice against the
Union allegedly for engaging in the contrived activities against the ongoing CBA
negotiations between the Bank and the Union in an attempt to unduly coerce and
pressure the Bank into agreeing to the Unions demand for the suspension of the
implementation of the JEP. It averred that such concerted activities, despite the
ongoing CBA negotiations, constitute unfair labor practice (ULP) and a violation of
the Unions duty to bargain collectively under Articles 249 (c) and 252 of the Labor
Code.
The Union filed a Motion to Dismiss[6] on the ground that the complaint states no
cause of action. It alleged that its united activities were actually being waged to
protest the Banks arbitrary imposition of a job evaluation program and its
unjustifiable refusal to suspend the implementation thereof. It further claimed
that the unilateral implementation of the JEP was in violation of Article I, Section 3
of the CBA which prohibits a diminution of existing rights, privileges and benefits
already granted and enjoyed by the employees. To be sure, so the Union
contended, the object of the Bank in downgrading existing CBA salary scales,
despite its sanctimonious claim that the reduced rates will apply only to future
employees, is to torpedo the salary structure built by the Union through three
long decades of periodic hard bargaining with the Bank and to thereafter replace
the relatively higher-paid unionized employees with cheap newly hired personnel.
In light of these circumstances, the Union insists that the right to engage in these
concerted activities is protected under Article 246 of the Labor Code regarding
non-abridgment of the right to self-organization and, hence, is not actionable in
law.
In its Opposition,[7] the Bank stated that the Union was actually challenging
merely that portion of the JEP providing for a lower rate of salaries for future
employees. Contrary to the Unions allegations in its motion to dismiss that the JEP
had resulted in diminution of existing rights, privileges and benefits, the program
has actually granted salary increases to, and in fact is already being availed of by,
the rank and file staff. The Unions objections are premised on the erroneous belief
that the salary rates for future employees is a matter which must be subject of
collective bargaining negotiation. The Bank believes that the implementation of
the JEP and the resultant lowering of the starting salaries of future employees, as
long as there is no diminution of existing benefits and privileges being accorded
to existing rank and file staff, is entirely a management prerogative.
In an Order dated July 29, 1993,[8] the labor arbiter dismissed the complaint with
prejudice and ordered the parties to continue with the collective bargaining
negotiations, there having been no showing that the Union acted with criminal
intent in refusing to comply with its duty to bargain but was motivated by the
refusal of management to suspend the implementation of its job evaluation
program, and that it is not evident that the concerted activities caused damage to
the Bank. It concluded that, at any rate, the Bank is not left without recourse, in
case more aggressive and serious acts be committed in the future by the Union,
since it could institute a petition to declare illegal such acts which may constitute
a strike or picketing.
On appeal, respondent NLRC declared that based on the facts obtaining in this
case, it becomes necessary to resolve whether or not the Unions objections to the
implementation of the JEP are valid and, if it is without basis, whether or not the
concerted activities conducted by the Union constitute unfair labor practice. It
held that the labor arbiter exceeded his authority when he ordered the parties to
return to the bargaining table and continue with CBA negotiations, considering
that his jurisdiction is limited only to labor disputes arising from those cases
provided for under Article 217 of the Labor Code, and that the labor arbiters
participation in this instance only begins when the appropriate complaint for
unfair labor practice due to a partys refusal to bargain collectively is filed.
Consequently, the case was ordered remanded to the arbitration branch of origin
for further proceedings in accordance with the guidelines provided for therein.
Hence, this petition.
The Union asserts that respondent NLRC committed grave abuse of discretion in
failing to decide that it is not guilty of unfair labor practice considering that the
concerted activities were actually directed against the implementation of the JEP
and not at the ongoing CBA negotiations since the same were launched even
before the start of negotiations. Hence, it cannot be deemed to have engaged in
bad-faith bargaining. It claims that respondent NLRC gravely erred in remanding
the case for further proceedings to determine whether the objections raised by
the Union against the implementation of the JEP are valid or not, for the simple
reason that such is not the issue involved in the complaint for ULP filed by the
Bank but rather whether the Union is guilty of bargaining in bad faith in violation
of the Labor Code. It is likewise averred that Labor Arbiter Garduque cannot be
considered to have exceeded his authority in ordering the parties to proceed with
the CBA negotiations because it was precisely a complaint for ULP which the Bank
filed against the Union.
We find no merit in the petition.
The main issue involved in the present case is whether or not the labor arbiter
correctly ordered the dismissal with prejudice of the complaint for unfair labor
practice on the bases merely of the Complaint, the Motion to Dismiss as well as
the Opposition thereto, filed by the parties. We agree with respondent NLRC that
there are several questions that need to be threshed out before there can be an
intelligent and complete determination of the propriety of the charges made by
the Bank against the Union.
A perusal of the allegations and arguments raised by the parties in the Motion to
Dismiss and the Opposition thereto will readily reveal that there are several issues
that must preliminarily be resolved and which will require the presentation of
evidence other than the bare allegations in the pleadings which have been filed,
in order to ascertain the propriety or impropriety of the ULP charge against the
Union.
Foremost among the issues requiring resolution are:
1. Whether or not the unilateral implementation of the JEP constitutes a violation
of the CBA provisions requiring the Bank to furnish the Union with the job
evaluation implementation timetable within two months from the signing of the
CBA on July 30, 1990,[9] and prohibiting the diminution of existing rights,
privileges and benefits already granted and enjoyed by the employees;[10]
2. Whether or not the concerted acts committed by the Union were done with just
cause and in good faith in the lawful exercise of their alleged right under Article
246 of the Labor Code on non-abridgment of the right to self-organization; and
3. Whether or not the fixing of salaries of future employees pursuant to a job
evaluation program is an exclusive management prerogative or should be subject
of collective bargaining negotiation.
It does not fare petitioner any better that it had, wittingly or unwittingly, alleged
in its Consolidated Reply[11] that the concerted actions began on January 22,
1993 even before the commencement of CBA negotiations which started in
March, 1993. Apparently that was an attempt on the part of the Union to rectify
the incriminating pronouncement of the labor arbiter in his questioned order to
the effect that the challenged activities occurred from March 15 to 23, 1993
during the CBA negotiations. This seemingly conflicting factual allegations are
crucial in resolving the issue of whether or not the concerted activities were
committed in violation of the Unions duty to bargain collectively and would
therefore constitute unfair labor practice.
Likewise, the labor arbiter, in finding that the Union was not motivated by any
criminal intent in resorting to said concerted activities, merely gave a sweeping
statement without bothering to explain the factual and evidentiary bases therefor.
The declaration that there was no damage caused to the Bank by reason of such
Union activities remains unsubstantiated. Nowhere is there any showing in the
labor arbiters order of dismissal from which it can be fairly inferred that such a
statement is supported by even a preponderance of evidence. What purportedly
is an adjudication on the merits is in truth and in fact a short discourse devoid of
evidentiary value but very liberal with generalities and hasty conclusions.
The fact that there is an alternative remedy available to the Bank, as the labor
arbiter would suggest, will not justify an otherwise erroneous order. It bears
emphasizing that by the very nature of an unfair labor practice, it is not only a
violation of the civil rights of both labor and management but is also a criminal
offense against the State which is subject to prosecution and punishment.[12]
Essentially, a complaint for unfair labor practice is no ordinary labor dispute and
therefore requires a more thorough analysis, evaluation and appreciation of the
factual and legal issues involved.
One further point. The need for a more than cursory disposition on the unfair
labor practice issue is made doubly exigent in view of the Banks allegation in its
Comment[13] that a strike has been launched by the Union specifically to protest
the implementation of the JEP. Although the strike incident is not an issue in this
case, this supervening event bespeaks the worsening situation between the
parties that calls for a more circumspect assessment of the actual issues herein
involved.
Necessarily, a determination of the validity of the Banks unilateral
implementation of the JEP or the Unions act of engaging in concerted activities
involves an appraisal of their motives. In cases of this nature, motivations are
seldom expressly avowed, and avowals are not always candid. There must thus
be a measure of reliance on the administrative agency. It was incumbent upon the
labor arbiter, in the first instance, to weigh such expressed motives in
determining the effect of an otherwise equivocal act. The Labor Code does not
undertake the impossible task of specifying in precise and unmistakable language
each incident which constitutes an unfair labor practice. Rather, it leaves to the
court the work of applying the laws general prohibitory language in light of infinite
combinations of events which may be charged as violative of its terms.[14]
It has been held that the crucial question whether or not a party has met his
statutory duty to bargain in good faith typically turns on the facts of the individual
case. There is no per se test of good faith in bargaining. Good faith or bad faith is
an inference to be drawn from the facts. To some degree, the question of good
faith may be a question of credibility. The effect of an employers or a unions
actions individually is not the test of good-faith bargaining, but the impact of all
such occasions or actions, considered as a whole, and the inferences fairly drawn
therefrom collectively may offer a basis for the finding of the NLRC.[15]
This, the court or the quasi-judicial agency concerned can do only after it has
made a comprehensive review of the allegations made in the pleadings filed and
the evidence presented in support thereof by the parties, but definitely not
where, as in the present case, the accusation of unfair labor practice was negated
and subsequently discharged on a mere motion to dismiss.
It is a well-settled rule that labor laws do not authorize interference with the
employers judgment in the conduct of his business. The Labor Code and its
implementing rules do not vest in the labor arbiters nor in the different divisions
of the NLRC nor in the courts managerial authority.[16] The hiring, firing, transfer,
demotion, and promotion of employees has been traditionally identified as a
management prerogative subject to limitations found in the law, a collective
bargaining agreement, or in general principles of fair play and justice. This is a
function associated with the employers inherent right to control and manage
effectively its enterprise. Even as the law is solicitous of the welfare of
employees, it must also protect the right of an employer to exercise what are
clearly management prerogatives. The free will of management to conduct its
own business affairs to achieve its purpose cannot be denied.[17]
Accordingly, this Court, in a number of cases, has recognized and affirmed the
prerogative of management to implement a job evaluation program or a
reorganization for as long as it is not contrary to law, morals or public policy.
Thus, in Batongbacal vs. Associated Bank, et al.,[18] involving the dismissal of an
assistant vice-president for refusing to tender his courtesy resignation which the
bank required in line with its reorganization plan, the Court held, among others,
that it is not prepared to preempt the employers prerogative to grant salary
increases to its employees by virtue of the implementation of the reorganization
plan which thereby caused a distortion in salaries, notwithstanding that there is a
semblance of discrimination in this aspect of the banks organizational setup.
In the case of National Sugar Refineries Corporation vs. National Labor Relations
Commission, et al.,[19] the petitioner implemented a job evaluation program
affecting all employees, from rank and file to department heads. The JEP was
designed to rationalize the duties and functions of all positions, reestablish levels
of responsibility, and reorganize both wage and operational structures. Jobs were
ranked according to effort, responsibility, training and working conditions and
relative worth of the job. As a result, all positions were re-evaluated, and all
employees were granted salary adjustments and increases in benefits
commensurate to their actual duties and functions. With the JEP, the supervisory
employees, who were members of the respondent Union therein and were
formerly treated in the same manner as rank and file employees, were considered
no longer entitled to overtime, rest day and holiday pay but their basic salaries
increased by 50%. The respondents therein sued for recovery of those benefits.
In upholding managements prerogative to implement the JEP, the Court held
therein that:
In the case at bar, private respondent union has miserably failed to convince this
Court that the petitioner acted in bad faith in implementing the JE Program. There
is no showing that the JE Program was intended to circumvent the law and
deprive the members of respondent union of the benefits they used to receive.
x x x It is the prerogative of management to regulate, according to its discretion
and judgment, all aspects of employment. This flows from the established rule
that labor law does not authorize the substitution of the judgment of the
employer in the conduct of its business. Such management prerogative may be
availed of without fear of any liability so long as it is exercised in good faith for
the advancement of the employers interest and not for the purpose of defeating
or circumventing the rights of employees under special laws or valid agreement
and are not exercised in a malicious, harsh, oppressive, vindictive or wanton
manner or out of malice or spite.
Just recently, this Court had the occasion to reiterate and uphold the established
and unequivocal right of an employer to implement a reorganization in the valid
exercise of its management prerogative, thus:
Being a regular employee, petitioner is of the view that she had already acquired
a vested right to the position of Executive Secretary, together with its
corresponding grade, rank and salary, which cannot be impaired by the 1991
reorganization of CENECO.
xxx
In Aurelio vs. National Labor Relations Commission, et al., we upheld the power of
the board of directors of a corporation to implement a reorganization, including
the abolition of various positions, as implied or incidental to its power to conduct
the regular business affairs of the corporation. In recognition of the right of
management to conduct its own business affairs in achieving its purpose, we
declared that management is at liberty, absent any malice on its part, to abolish
positions which it deems no longer necessary.
This Court, absent any finding of bad faith on the part of management, will not
deny it the right to such initiative simply to protect the person holding that office.
In other words, where there is nothing that would indicate that an employees
position was abolished to ease him out of employment, the deletion of that
position should be accepted as a valid exercise of management prerogative.
xxx
No ill will can be ascribed to private respondents as all the positions specified in
the old plantilla were abolished and all other employees were given new
appointments. In short, petitioner was not singled out. She was not the only
employee affected by the reorganization. The reorganization was fair to
petitioner, if not to all of the employees of CENECO.
It should be remembered that petitioners new appointment was made as a result
of valid organizational changes. A thorough review of both the indispensable and
the unessential positions was undertaken by a committee, specifically formed for
this purpose, before the Board of Directors abolished all the positions. Based on
the qualifications and aptitude of petitioner, the committee and, subsequently,
private respondents, deemed it best to appoint petitioner as Secretary of the
Engineering Department. We cannot meddle in such a decision lest we interfere
with the private respondents right to independently control and manage their
operations absent any unfair or inequitable acts.
If the purpose of a reorganization is to be achieved, changes in positions and
ranking of employees should be expected. To insist on ones old position and
ranking after a reorganization would render such endeavor ineffectual. Here, to
compel private respondents to give petitioner her old ranking would deprive them
of their right to adopt changes in the cooperatives personnel structure as
proposed by the Steering Committee.
xxx
x x x As we have held, security of tenure, while constitutionally guaranteed,
cannot be used to deprive an employer of its prerogatives under the law. Even if
the law is solicitous of the welfare of the employees, it must also protect the right
of an employer to exercise what are clearly management prerogatives.[20]
Notwithstanding the relevance of the foregoing disquisition, considering however
the factual antecedents in this case, or the lack of a complete presentation
thereof, we are constrained to refrain from ruling outright in favor of the Bank.
While it would appear that remanding the case would mean a further delay in its
disposition, we are not inclined to sacrifice equity and justice for procedural
technicalities or expediency. The order dismissing the complaint for ULP with
prejudice, to say the least, leaves much to be desired.
Anent the question on whether or not the labor arbiter has jurisdiction to order
the parties to return to and continue with the collective bargaining negotiations,
there is a commentary to the effect that, as one of the reliefs which may be
granted in ULP cases, the Court may, in addition to the usual cease and desist
orders, issue an affirmative order to the employer to bargain with the bargaining
agent, as the exclusive representative of its employees, with respect to the rate
of pay, hours of work, and other conditions of employment.[21] On this aspect,
respondent NLRC stands to be reversed. Nevertheless, its directive on this point is
deemed vacated and ineffectual by our decision to remand the case for further
proceedings.
WHEREFORE, subject to the foregoing observation, the challenged disposition of
respondent National Labor Relations Commission is hereby AFFIRMED.
SO ORDERED.
Puno, and Mendoza, JJ., concur.
G.R. No. 75704 July 19, 1989
RUBBERWORLD (PHILS.), INC. and ELPIDIO HIDALGO, petitioners,
vs.
THE NATIONAL LABOR RELATIONS COMMISSION (THIRD DIVISION) and NESTOR
MALABANAN, respondents.
MEDIALDEA, J.:
This is a petition for certiorari under Rule 65 of the Rules of Court seeking the
annulment of the decision of the respondent National Labor Relations Commission
dated June 17, 1986 (p. 23, Rollo) in NLRC NCR Case No. 6-2158-84 entitled
"Nestor Malabanan and Jonathan Transmil, Complainants, versus Rubberworld
(Phils.), Inc. and Elpidio Hidalgo, Respondents," reversing the decision of the
Labor Arbiter which dismissed the complaint for illegal dismissal for lack of merit.
The antecedent facts are as follows:
Respondent Malabanan was employed by petitioner Rubberworld (Phils.), Inc. on
September 25,1978 as an ordinary clerk. In May, 1980, he was promoted to the
position of production scheduler with a corresponding salary increase. He was
again transferred to the Inventory Control Section as stock clerk on September 1,
1983.
On April 6,1984, Elpidio Hidalgo, the Plant I General Manager of petitioner
company, received a copy of the Financial Audit Report from the Internal Audit
Department of the company showing a significant material variance between the
year-end actual inventory and that of the Cards (SC)/EDP Control Records. As a
result thereof, Noel Santiago, Section Head of the Inventory Control Section,
where respondent Malabanan was assigned, conducted an investigation of the
reported discrepancies in the stock cards upon the request of the Plant General
Manager. Santiago then submitted his report to the general manager
recommending the dismissal of respondent Malabanan.
Consequently, Malabanan's case was endorsed to the Human Resources Division
of petitioner company, which conducted a reinvestigation on the matter and
which affirmed the recommendation of the Inventory Control Section Head for the
termination of employment of respondent Malabanan.
On June 6, 1984, respondent Malabanan was dismissed by petitioner company.
On June 16, 1984, respondent Malabanan, along with another complainant named
Jonathan Transmit, filed a complaint for unfair labor practice and illegal dismissal
against petitioner company alleging that they (respondent Malabanan and
complainant Transmil) were members of the monthly salaried employees' union
affiliated with TUPAS; that petitioner company forced them to disaffiliate from the
union; and that due to their refusal to resign from the union, they were ultimately
dismissed from employment by petitioner company.
Petitioner company on the other hand, denied complainants' allegations and
averred that respondent Malabanan's dismissal was due to gross and habitual
neglect of his duty and not due to his union affiliation.
During the hearing of the case, the other complainant, Jonathan Transmil
withdrew from the case since he already found another employment abroad.
On January 30, 1985, the Labor Arbiter rendered a decision (pp. 17- 22, Rollo), the
dispositive portion of which reads:
WHEREFORE, premises considered, this case should be, as it is hereby,
DISMISSED, for lack of merit.
SO ORDERED.
Respondent Malabanan appealed from the adverse decision to the respondent
Commission. On June 17, 1986, respondent Commission reversed the appealed
decision of the Labor Arbiter and stated, inter alia:
Confronted with this factual backgrounds, we find ourselves inclined to the view
that the appealed decision merits a reversal.
xxx
WHEREFORE, premises considered, the appealed decision should be, as it is
hereby REVERSED. Consequently, the respondents are directed to reinstate
complainant Nestor Malabanan to his former position as production scheduler,
with full backwages from the time he was illegally terminated up to actual
reinstatement, without loss of seniority rights and benefits appurtenant thereto.
SO ORDERED. (pp. 23-27, Rollo)
The petitioner company moved for a reconsideration on the ground that the
respondent Commission's decision is not in accordance with facts and evidence
on record. On July 23, 1986, the said motion for reconsideration was denied.
On September 3, 1986, petitioner filed the instant petition contending that the
respondent Commission committed grave abuse of discretion amounting to lack
of jurisdiction in reversing the Labor Arbiter's decision.
The two issues to be resolved in the instant case are: (1) whether or not the
dismissal of respondent Malabanan is tainted with unfair labor practice; and (2)
whether or not a just and valid cause exists for the dismissal of private
respondent Malabanan.
Petitioner alleges that the National Labor Relations Commission gravely erred in
concluding that the demotion of Malabanan from production scheduler to a stock
clerk at the Stock and Inventory Section was intended to discourage Malabanan
from union membership. It argued that the Labor Arbiter was correct in finding
that the private respondent had not shown ample proof to the effect that he was
a member of a labor organization prior to his transfer to another position.
We believe that the foregoing contentions are impressed with merit. Art. 248 of
the Labor Code, PD No. 442, as amended, provides:
Art. 248. Unfair labor practices of employers. It shall be unlawful for an
employer to commit any of the following unfair labor practices:
(a) To interfere with, restrain or coerce employees in the exercise of their right to
self-organization;
xxx
The question of whether an employee was dismissed because of his union
activities is essentially a question of fact as to which the findings of the
administrative agency concerned are conclusive and binding if supported by
substantial evidence. Substantial evidence has been defined as such relevant
evidence as a reasonable mind might accept as adequate to support a conclusion.
It means such evidence which affords a substantial basis from which the fact in
issue can be reasonably inferred (Philippine Metal Foundries, Inc. v. Court of
Industrial Relations, et. al., No. L- 34948-49, May 15, 1979, 90 SCRA 135). The
findings of the Labor Arbiter on the non-existence of unfair labor practice on the
part of the company are more in accord and supported by the evidence submitted
by the parties in the instant case, to wit:
Complainant had stated that he was a member of the monthly salaried
employees union affiliated with TUPAS. He, however, offered no proof to support
his allegation. In fact, no evidence was presented to prove the existence of such
union. We (note] from the records that, as the usual practice, in cases like this
one, complainant is usually supported by the union of which he is a member. And
ordinarily, the union itself is impleaded as a co- complainant. Such circumstances,
surprisingly, [are] not present in this case. In fact, complainant categorically
alleged that he had solicited the services of the PAFLU Labor Union in filing this
case. It is, indeed, surprising that complainant had to solicit the help of a labor
union (PAFLU) of which he was not a member instead of soliciting the aid of the
labor union (TUPAS) of which he was allegedly a member. These circumstances
alone [destroy] the credibility of complainant's allegations. (p. 21, Rollo).
Nowhere in the records can We find that the company actually performed positive
acts to restrain the union participation of private respondent. For one, it is
doubtful whether Malabanan was really engaged in the organization of a labor
union affiliated with the federation TUPAS. The only evidence presented by him to
prove this contention is his affidavit and that of his father. It is therefore, not in
accordance with ordinary experience and common practice that the private
respondent pursued his battle alone, without the aid and support of his co-
members in the union and his federation especially in a case of serious nature as
this one involving company intervention with union activity.
As a rule, it is the prerogative of the company to promote, transfer or even
demote its employees to other positions when the interests of the company
reasonably demand it. Unless there are instances which directly point to
interference by the company with the employees' right to self-organization, the
transfer of private respondent should be considered as within the bounds allowed
by law. Furthermore, although private respondent was transferred to a lower
position, his original rank and salary remained undiminished, which fact was not
refuted or questioned by private respondent.
In view of the foregoing conclusions of the Labor Arbiter, We are compelled to
agree with the latter that the petitioner company did not commit any unfair labor
practice in transferring and thereafter dismissing private respondent.
The remaining issue to be resolved on this point is whether the dismissal of
respondent Malabanan was for a just and lawful cause. Article 282 of the Labor
Code, as amended, provides:
Article 282. Termination by employer. An employer may terminate an
employment for any of the following just causes:
xxx
b) Gross and habitual neglect by the employee of his duties;
x x x.
Petitioner contends that private respondent Malabanan was guilty of gross
negligence when he caused the posting of incorrect entries in the stock card
without counter checking the actual movement status of the items at the
warehouse, thereby resulting into unmanageable inaccuracies in the data posted
in the stock cards. The respondent Commission correctly ruled:
Penultimately, even assuming for the sake of argument that herein complainant
'posted entries in the stock card without counter checking the actual movement
status of the items at the warehouse, thereby resulting in an inaccurate posting of
data on the stock cards," to our impression does not constitute as a just cause for
dismissal. Records show that he was only transferred to the Inventory Control
Section on September 1, 1983 and was not so familiar and experienced as a stock
clerk, and prior to his transfer, the record shows no derogatory records in terms of
his performance. His failure to carry out efficiently his duties as a stock clerk is
not so gross and habitual. In other words he was not notoriously negligent to
warrant his severance from the service. Considering that there is nothing on
record that shows that he wilfully defied instructions of his superior with regards
to his duties and that he gained personal benefit of the discrepancy, his dismissal
is unwarranted. (p. 26, Rollo).
It does not appear that private respondent Malabanan is an incorrigible offender
or that what he did inflicted serious damage to the company so much so that his
continuance in the service would be patently inimical to the employer's interest.
Assuming, in gratia argumenti that the private respondent had indeed committed
the said mistakes in the posting of accurate data, this was only his first infraction
with regard to his duties. It would thus be cruel and unjust to mete out the drastic
penalty of dismissal, for it is not proportionate to the gravity of the misdeed.
In fact, the promotion of the private respondent from the position of ordinary clerk
to production scheduler establishes the presumption that his performance of his
work is acceptable to the company. The petitioner even admitted that it was due
to heavy financial and business reverses that the company assigned the private
respondent to the position of Stock Clerk and not because of his unsatisfactory
performance as production scheduler (p. 6, Rollo). It has been held that there
must be fair and reasonable criteria to be used in selecting employees to be
dismissed (Asiaworld Publishing House, Inc. v. Ople, No. L-56398, July 23, 1987,
152 SCRA 219).
It is worthy to note that the prerogative of management to dismiss or lay-off an
employee must be done without abuse of discretion, for what is at stake is not
only petitioner's position, but also his means of livelihood. This is so because the
preservation of the lives of the citizens is a basic duty of the State, more vital
than the peservation of corporate profits (Euro-Linea, Phils., Inc. v. NLRC, L-75782,
December 1, 1987,156 SCRA 79).
The law regards the worker with compassion. Our society is a compassionate one.
Where a penalty less punitive would suffice, whatever missteps may be
committed by the worker should not be visited by the supreme penalty of
dismissal. This is not only because of the law's concern for the working man.
There is in addition, his family to consider. After all, labor determinations should
not only be secundum rationem but also secundum caritatem (Almira, et al., v. BF
Goodrich Philippines, Inc., et al., G.R. No. L-34974, July 25, 1974, 58 SCRA 120).
ACCORDINGLY, the petition is DISMISSED for lack of merit. However, the decision
of the public respondent is hereby MODIFIED to the effect that petitioner company
is ordered to reinstate private respondent Nestor Malabanan to the position of
stock clerk or substantially equivalent position, with the same rank and salary he
is enjoying at the time of his termination, with three years backwages and without
loss of seniority rights and benefits appurtenant thereto.
Should the reinstatement of the private respondent as herein ordered be
rendered impossible by the supervention of circumstances which prevent the
same, the petitioner is further ordered to pay private respondent separation pay
equivalent to one (1) month's salary for every year of service rendered, computed
at his last rate of salary.
G.R. No. L-51382 December 29, 1986
RAFAEL ENRIQUEZ and VIRGILIO ECARMA, petitioners,
vs.
THE HONORABLE RONALDO B. ZAMORA, THE HONORABLE BLAS F. OPLE,
NATIONAL LABOR RELATIONS COMMISSION, ARBITER NESTOR LIM, PHILIPPINE AIR
LINES, AIR LINES PILOT ASSOCIATION OF THE PHILIPPINES and ORTIZ' GROUP, *
respondents.
FERNAN, J.:
In this petition for certiorari and mandamus, pilots Rafael Enriquez and Virgilio
Ecarma seek the restoration of their seniority rights and other privileges which
the Philippine Air Lines [PAL] declared as forfeited by the pilots who joined the
mass retirement/resignation of the members of the Air Lines Pilot Association of
the Philippines [ALPAP] to protest the dismissal of their president, Captain Felix
Gaston.
Enriquez and Ecarma were employed by PAL on October 2, 1961 and March 3,
1966, respectively. Consequently, they became members of ALPAP. On October 3,
1970, Philippine Air Lines Employees Association [PALEA] and ALPAP staged a
strike against PAL to demand pay increases, better working conditions on the
Manila-Karachi and Rome-Amsterdam flights, and a better retirement plan.
Pursuant to Section 10 of Republic Act No. 875, the President of the Philippines
certified the strike to the Court of Industrial Relations [CIR]. Said court, through
Associate Judge Ansberto Paredes, issued an order dated October 7, 1970
directing the officers and members of PALEA and ALPAP to call off the strike, lift
the picket lines in all places of operation of PAL, and return to work not later than
Friday, October 9, 1970. PAL management, on the other hand, was ordered to
admit the striking employees "back to work under the same terms and conditions
of employment existing before the strikes" and "not to suspend, dismiss or lay-off
any employee as a result" of said strikes. The CIR further stated that failure to
comply with its order would constitute contempt of court and "the employee
failing or refusing to return to work by October 9, 1970, without justifiable cause,
shall immediately be replaced by PAL, and may not be reinstated without prior
Court order and on justifiable grounds" [Rollo, pp. 33-34].
The strikers moved for a reconsideration of the order but after it was denied by
the court, they returned to work on October 22, 1970. Five days later or on
October 27, 1970, PAL dismissed strike leader Captain Gaston.
On October 30, 1970, the board of directors of ALPAP adopted a resolution
condemning PAL's alleged "continued acts of harassment and other unfair labor
practices" against the ALPAP such as the attempted lockout of ten members, the
actual lockout of three other members, the forced retirement of Captain Regino
Masias [Macias] and the dismissal of ALPAP leader Captain Gaston. The board
resolved to undertake the grounding of all PAL planes and the filing of applications
for "protest retirement" of members who had completed five years of continuous
service, and "protest resignation" for those who had rendered less than five years
of service in the company [Rollo, pp. 36-37].
On November 9, 1970, the said board of directors adopted another resolution
calling on all union members to accomplish their respective "protest retirement"
or "protest resignation" forms on or before November 17, 1970. To implement said
resolution, Captain Gaston issued on November 12, 1970, a circular setting the
deadline for the submission of retirement/resignation papers on November 17,
1970 at 2400H [Rollo, pp. 38-39].
Upon learning that many members of the ALPAP had signed their respective
"protest retirement/resignation" papers, and that ALPAP would submit them en
masse to PAL at a time to coincide with the then forthcoming Papal visit, PAL filed
with the CIR an ex-parte urgent motion to enjoin ALPAP officers and members
from retiring or resigning en masse from PAL [Annex "B " to Petition, Rollo, p. 35].
Acting on said motion, the Court of Industrial Relations issued an order on
November 26, 1970 which states:
WHEREFORE, pending hearing of the subject motion, the petitioner, its members
and officers, and respondents and its officers are hereby ordered to maintain
status quo; the members and officers of said petitioner ALPAP, and ALPAP itself,
are ordered not to strike or in any way cause any stoppage in the operation and
service of PAL, under pain of dismissal and forfeiture of rights and privileges
accruing to their respective employments should they disregard this Order; and
PAL is also ordered not to lockout any of such members and officers of ALPAP
under pain of contempt and cancellation of its franchise. [Rollo, p. 142]
Notwithstanding this order, some of the officers and majority of the members of
ALPAP submitted their respective retirement or resignation letters to PAL on
December 12, 1970. The pilots tendered their retirement or resignation
individually. Their similarly worded retirement or resignation letters read as
follows:
Gentlemen:
In vigorous protest to your provocative harassments, unfair labor tactics, the
contemptuous lockout of our co-members and your vicious and vindictive attitude
towards labor most exemplified by the illegal termination of the services of our
President, Capt. Felix C. Gaston, we, the undersigned, are hereby retiring from our
employment in accordance with Par. [b] of Section 1 of Article VI of the
Retirement Plan effective immediately upon receipt hereof.
We expect payment of the benefits due us within seventy-two [72] hours from
receipt hereof
Very truly yours,
[SGD] (Rollo, pp. 235 367)
PAL acknowledged receipt of said letters through its own letter which reads in
part:
We acknowledge receipt of your letter dated December 12, 1970, informing us
that you 'are hereby retiring from our employment ... effective immediately upon
receipt' hereof. We have accordingly dropped you from our payrolls as of 1:30 P.M.
December 14, 1970, the time and date we received the letter from ALPAP.
However, since your 'retirement' was in pursuance of a conspiracy and in violation
of the Order dated November 26, 1970 promulgated by the Court of Industrial
Relations in CIR Case No. 101-IPA[B], you are not entitled to any of the benefits
claimed by you under the Retirement Plan nor to any of the other rights, benefits
and privileges to which you may otherwise be entitled by reason of your former
employment with PAL, you having committed acts resulting in the forfeiture of the
same.
You are hereby requested to report immediately to the Industrial Relations
Department in order to secure the necessary clearances and to settle any account
you may have with the company. [Rollo, pp. 236, 367-368].
Among the pilots whose "protest resignation/retirement" was accepted by PAL
were petitioners Enriquez and Ecarma. However, on January 12, 1971, Ecarma
returned to PAL after having been away for thirty days. Enriquez, who had, not
reported to work for thirty-six days, followed suit on January 18, 1971.
Before their re-admission, PAL required them to accept two conditions, namely:
that they sign conformity to PAL's letter of acceptance of their retirement and/or
resignation and that they submit an application for employment as new
employees without protest or reservation [Rollo, p. 6].
On March 17, 1971, PAL issued a new seniority list for pilots. Enriquez's and
Ecarmas new seniority dates were listed as January 18, 1971 and January 12,
1971, respectively. Thus, Enriquez and Ecarma respectively lost their almost
10yeai and 5-year seniority, and started from zero seniority.
Aggrieved by this action of PAL, Enriquez and Ecarma, together with twenty-three
other pilots, filed before the CIR a petition to restore their seniority and other
privileges [Rollo, p, 46]. They alleged therein that they had not been apprised by
the union of the legal consequences of their respective retirement or resignation
for they were merely told to obey, otherwise they would be expelled from the
union, and that, in fact, they were expelled by ALPAP on February 12, 1971.
PAL opposed the petition. It alleged that the mass retirement/resignation of the
pilots constituted contempt of court and that the returning pilots, who had filed
applications for employment as new pilots, "were accepted on probationary basis
for a period of six months". PAL added that as the pilots' retirement or resignation
violated the November 26, 1970 order of the Court of Industrial Relations, said
pilots lost whatever privileges or benefits they had acquired as employees of PAL
[Rollo, pp. 52-55].
Some members of ALPAP under the leadership of Captain Ben Hur Gomez who
chose not to retire or resign, filed a manifestation stating that they would submit
to any final ruling of the court on the matter [Rollo, pp. 62-63].
Another group of pilots, headed by Captain Carlos Ortiz, who were hired by PAL as
a result of ALPAP's mass action, intervened in the case. They averred that they
had earned their seniority on a first-come-first-serve basis and would be
prejudiced should the petition of Enriquez's group be granted [Rollo, pp. 63-64].
During the pendency of the petition, the Court of industrial Relations was
abolished, and the case was turned over to the National Labor Relations
Commission [NLRC] for adjudication. On March 31, 1975, Acting Labor Arbiter
Nestor C. Lim issued an order denying the petition for restoration of seniority and
other privileges [Rollo, pp. 58-171]. Said order stated that the seniority ranking on
March 17, 1971 should be respected to avoid injustice and demoralization in the
ranks of the pilots and to forestall the disruption of the smooth operation of PAL.
To eliminate sources of irritants between PAL and its employees and "by way of
mitigating the penalty" on the returning pilots, they were allowed to receive "fifty
percent [50%] or one-half of the retirement benefits which they would have
received under the PAL-ALPAP Retirement Plan, were it not for the fact that their
retirement/resignation was in violation of a court order" [Rollo, p. 167].
Both PAL and the Enriquez group appealed to the NLRC en banc. On August 15,
1975, at the conference-hearing held before said commission, the parties entered
into a compromise agreement whereby the following were stipulated and agreed
upon:
A] The parties shall recognize the termination of the employee-employer
relationship between PAL and the pilots who joined the mass
retirement/resignation in December 1970 and the consequent loss by the said
pilots of their seniority accuring to their old employment.
B] By way of compromise and to temper the penalty of forfeiture of all
privileges decreed in the Order of November 26, 1970 of the Court of Industrial
Relations for those who joined the aforesaid mass retirement/resignation, PAL
shall pay to the aforesaid pilots who reapplied as new pilots and who were already
taken in as such by PAL, eighty-five [85%] per cent of their retirement pay under
the PAL-ALPAP Retirement Plan in effect in December 1970. With respect to pilots
not entitled to any retirement pay under the said plan, they shall be paid eighty-
five [85%] per cent of their separation pay under the Termination Pay Act in effect
in December 1970.
C] With the payment of the aforementioned 85% of their
retirement/separation pay, the pilots shall release PAL from any demand, claim or
claims of whatever nature or kind, arising from or connected with all the matters
alleged in their 'Petition for Restoration of Seniority and Other Privileges. ' [Rollo,
pp. 187-188]
On September 16, 1975, said compromise agreement was approved by the NLRC
en banc and the case was dismissed "with prejudice". [Rollo, pp. 172-173]
Eight of the eleven petitioners approved the compromise agreement while one, N.
Salgado, was absent. Enriquez and Ecarma did not conform to the compromise
agreement. They appealed to the then Secretary of Labor on the ground that the
resolution approving the compromise agreement was "not in accordance with law
and contrary to the constitutional guarantees of non-deprivation of property
without due process, as well as the labor and social justice protection in the
constitution". [Rollo, p. 184]
On August 3, 1976, then Secretary of Labor Blas F. Ople issued an order ruling
that as far as Enriquez, Ecarma and Salgado are concerned, the NLRC should not
have dismissed the case but decided it on the merits. However, finding the
compromise agreement to be beneficial to appellants, he affirmed the decision of
Labor Arbiter Lim and directed Enriquez, Ecarma and Salgado to comply with its
terms. [Rollo, pp. 181-1851
Enriquez and Ecarma then filed with this Court a motion for an extension of time
to file a petition for review on certiorari. On September 16, 1976, they filed a
manifestation stating that they would not file said petition for they intended to
exhaust administrative remedies. Accordingly, that case was archived [G.R. No. L-
44452, Capt. Rafael Enriquez and Capt. Virgilio Ecarma vs. Hon. Secretary of
Labor, National Labor Relations Commission and Philippine Air Lines, Inc.]
Enriquez and Ecarma elevated the case to the Office of the President. On October
10, 1977, Presidential Assistant for Legal Affairs Ronaldo B. Zamora affirmed the
order of the Secretary of labor. He noted that by extending the benefits of the
compromise agreement to Enriquez and Ecarma, the Secretary of Labor was
following the "constitutional mandate for the state to protect labor" [Rollo, p.
214].
Enriquez and Ecarma were able to obtain a copy of the decision of the Office of
the President on August 24, 1979 or almost two years later. Whereupon, they filed
the instant petition for mandamus and certiorari.
Petitioners submit that the issues involved in this petition are: whether by their
employment, they are entitled to the restoration of their seniority rights and
whether the mass strike" on December 12, 1970 was a concerted action
protected by law [Memorandum, p. 26; Rollo, p. 425].
In their petition, Enriquez and Ecarma contend that it is beyond the coercive and
punitive powers of the Court of Industrial Relations [now the National Labor
Relations Commission] to order the forfeiture of their seniority rights and other
privileges. They assert that seniority is a vested right which they cannot be
deprived of without due process of law. They believe that PAL's refusal to
reinstate them unless they give up their seniority rights, constitutes an unfair
labor practice [Rollo, p. 24].
Petitioners' contentions are unmeritorious.
An employee has no inherent right to seniority. He has only such rights as may be
based on a contract, a statute, or an administrative regulation relative thereto [51
C.J.S. 586 citing Trailmobile Co. vs. Whirls, 67 S. Ct. 982, 331 U.S. 40, 91 L.Ed.
1328 and other cases]. Seniority rights, which are acquired by an employee
through long-time employment, are contractual and not constitutional. Hence, the
discharge of such employee, thereby terminating such rights, would not violate
the Constitution [51 C.J.S. 587 citing Wicks vs. Southern Pacific Co., 121 F. Supp.
454].
When the pilots tendered their respective retirement or resignation and PAL
immediately accepted them, both parties mutually terminated the contractual
employment relationship between them thereby curtailing whatever seniority
rights and privileges the pilots had earned through the years. Hence, contrary to
petitioners' contention, loss of seniority rights was not a penalty for their
precipitate retirement or resignation. Rather, it was the expected consequence of
the acceptance of their retirement or resignation.
The pilots' mass action was not a strike because employees who go on strike do
not quit their employment. Ordinarily, the relationship of employer and employee
continues until one or the other of the parties acts to sever the relationship or
they mutually act to accomplish that purpose [Words and Phrases, Vol. 40, 1964
ed., p. 465 quoting Kitchen vs. G.R. Herberger's Inc., 114 N.W. 2d 64, 67, 262
Minn. 135]. As they did not assume the status of strikers, their "protest
retirement/resignation" was not a concerted activity which was protected by law
[First National Bank of Omaha vs. N.L.R.B., 413 F. 2d 921]. Petitioners cannot,
therefore, validly claim that PAL committed an unfair labor practice because,
having voluntarily terminated their employment relationship with PAL, they were
not dismissed.
Moreover, the issue of whether the retirement/resignation of ALPAP members on
December 12, 1970 was a concerted activity protected by law was put to rest in
Chavez vs. Martinez, L-35206 which was decided by this Court on April 15, 1977
together with Air Line Pilots Association of the Philippines vs. Court of Industrial
Relations, L-33705. We pronounced therein that:
Parenthetically, contrary to ALPAP [Gaston's] argument that the pilots'
retirement/resignation was a legitimate concerted activity, citing Section 2[l] of
the Industrial Peace Act which defines 'Strike' as 'any temporary stoppage of work
by the concerted action of employees as a result of an industrial dispute', it is
worthwhile to observe that as the law defines it, a strike means only a 'temporary
stoppage of work'. What the mentioned pilots did, however, cannot be considered
in the opinion of this Court, as mere 'temporary stoppage of work'. What they
contemplated was evidently a permanent cut-off of employment relationship with
their erstwhile employer, the Philippine Air Lines. In any event, the dispute below
having been certified as existing in an industry indispensable to the national
interest, the said pilots' rank disregard for the compulsory orders of the industrial
court and their daring and calculating venture to disengage themselves from that
court's jurisdiction, for the obvious purpose of satisfying their narrow economic
demands to the prejudice of the public interest, are evident badges of bad faith.
A legitimate concerted activity is a matter that cannot be used to circumvent
judicial orders or be tossed around like a plaything. Definitely, neither employers
nor employees should be allowed to make of judicial authority a now-you've-got-
it-now-you-don't affair. The courts cannot hopefully effectuate and vindicate the
sound policies of the Industrial Peace Act and all our labor laws if employees,
particularly those who on account of their highly advanced technical background
and relatively better life status are far above the general working class spectrum,
will be permitted to defy and invoke the jurisdiction of the courts whenever the
alternative chosen will serve to feather their pure and simple economic demands.
[76 SCRA 274, 293]
Petitioners asseverate that their retirement or resignation was a "sham" for there
was "no honest or genuine desire to terminate the employee relationship with
PAL" [Rollo, p. 533]. We perceive, however, that the unorthodox manner by which
the pilots aired their demands against PAL, even if it was allegedly only a bluff
calculated to bring favorable results, exposed them to the risk that PAL would act
accordingly and take their "sham" retirement or resignation seriously, as what
happened in this case.
Petitioners' insistence that they were not advised of the legal consequences of
their "protest retirement/resignation" cannot hold water considering that they are
highly educated. Enriquez obtained his Bachelor of Science degree from the
Philippine Military Academy and took two years of graduate studies in Business
Administration at the University of the Philippines [Rollo, p. 77]. Expert legal
advice was available to him as his father is a retired justice of the Court of
Appeals who also appears as one of petitioners' counsel in this case. On the other
hand, Ecarma took three years and one semester of a commerce course and went
through a two-year course in the Philippine Air Force Flying School [Rollo, p. 92].
Verily, they are not the ordinary, illiterate laborers that they purport to be in this
case.
The employment relationship between petitioners and PAL having been
terminated, Enriquez, who worked as pilot for 9 years, 2 months and 12 days
before his retirement, is entitled as a matter of right, to the full benefits under the
company's retirement plan. Ecarma, who was a pilot for 4 years, 9 months and 11
days and who apparently tendered his resignation in accordance with the October
30, 1970 resolution of the ALPAP, should also be granted the full separation pay
under the Termination Pay Act in force at the time of his resignation. Thus, as to
petitioners, the compromise agreement of August 15, 1975 which gave retiring or
resigning pilots only 85% of their respective retirement or separation benefits,
should be considered inapplicable.
We take exception to the Labor arbiter's opinion that "to grant in full the reliefs
prayed for by petitioning pilots Enriquez, et. al. would amount to giving premium
to wilful disobedience to a lawful order issued by the CIR and would unjustifiably
punish the other pilots in the employ of PAL who elected to remain and obey the
Court" [Rollo p. 164.] By granting to petitioners full retirement and separation
benefits, this Court is not in any way condoning the mass action undertaken by
the pilots. We are only granting to them what by law they are entitled to receive
even if their course of action was the result of their erroneous collective
judgment.
The issue of whether forfeiture of seniority and other privileges is within the
coercive and punitive powers of the Court of Industrial Relations and, after its
dissolution, of the labor arbiter and the National Labor Relations Commission, is of
no moment in this case considering that petitioners lost their seniority rights not
by virtue of the labor arbiter' order and its affirmance by the National Labor
Relations Commission, the Secretary of Labor and the Office of the President but
by the operative act of their retirement or resignation.
Enriquez and Ecarma were, therefore, new employees with entirely new seniority
rankings when they were readmitted by PAL on January 18, 1971 and January 12,
1971, respectively. Certainly, PAL was merely exercising its prerogative as an
employer when it imposed two conditions for the reemployment of petitioners
inasmuch as hiring or rehiring policies are matters for the company's
management to determine in the absence of an anti-union motivation
[Metropolitan Life Ins. Co. vs. N.L.R.B., 371 F. 2d 573].
WHEREFORE, the petition for certiorari and mandamus is hereby dismissed. The
public respondents' orders and decision are hereby affirmed subject to the
modification that petitioners are granted full retirement and separation benefits
with legal interest from their accrual until petitioners are fully paid. No costs.
SO ORDERED.
G.R. No. L-87672 October 13, 1989
WISE AND CO., INC., petitioner,
vs.
WISE & CO., INC. EMPLOYEES UNION-NATU AND HONORABLE BIENVENIDO G.
LAGUESMA, in his capacity as voluntary Arbitrator, respondents.
Angara, Abello, Concepcion, Regala & Cruz for petitioner.

GANCAYCO, J.:
The center of controversy in this petition is whether the grant by management of
profit sharing benefits to its non-union member employees is discriminatory
against its workers who are union members.
The facts are undisputed. On April 3,1987 the management issued a
memorandum circular introducing a profit sharing scheme for its managers and
supervisors the initial distribution of which was to take effect March 31, 1988.
On July 3,1987 the respondent union wrote petitioner through its president asking
for participation in this scheme. This was denied by petitioner on the ground that
it had to adhere strictly to the Collective Bargaining Agreement (CBA).
In the meantime, talks were underway for early negotiation by the parties of the
CBA which was due to expire on April 30, 1988. The negotiation thus begun
earlier than the freedom period. On November 11, 1987 petitioner wrote
respondent union advising the latter that they were prepared to consider
including the employees covered by the CBA in the profit sharing scheme
beginning the year 1987 provided that the ongoing negotiations were concluded
prior to December 1987. However, the collective bargaining negotiations reached
a deadlock on the issue of the scope of the bargaining unit. Conciliation efforts to
settle the dispute on 29 March 1988 were made but no settlement was reached.
On March 30, 1988, petitioner distributed the profit sharing benefit not only to
managers and supervisors but also to all other rank and file employees not
covered by the CBA. This caused the respondent union to file a notice of strike
alleging that petitioner was guilty of unfair labor practice because the union
members were discriminated against in the grant of the profit sharing benefits.
Consequently, management refused to proceed with the CBA negotiations unless
the last notice of strike was first resolved. The union agreed to postpone
discussions on the profit sharing demand until a new CBA was concluded. After a
series of conciliation conferences, the parties agreed to settle the dispute through
voluntary arbitration. After the parties submitted their position papers, a rejoinder
and reply, on March 20,1989 the voluntary arbitrator issued an award ordering
petitioner to likewise extend the benefits of the 1987 profit sharing scheme to the
members of respondent union. 1 Hence, this petition wherein petitioner alleged
the following grounds in support thereof
I
THE HONORABLE VOLUNTARY ARBITRATOR ACTED WITH GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN HE
ORDERED THE EXTENSION OF PROFIT SHARING BENEFITS TO THOSE EMPLOYEES
COVERED BY THE CBA DESPITE PATENT LACK OF FACTUAL AND LEGAL BASIS
THEREFOR IN THAT-
1. DISCRIMINATION PER SE IS NOT UNLAWFUL ESPECIALLY WHEN THE
EMPLOYEES ARE NOT SIMILARLY SITUATED.
2. THE TERMS AND CONDITIONS STIPULATED IN THE CBA HAVE THE FORCE
AND EFFECT OF A LAW BETWEEN THE PARTIES. PRIVATE RESPONDENT,
THEREFORE CANNOT DEMAND, AS A MATTER OF RIGHT, WHAT IS NOT
STIPULATED IN THE CBA.
3. THE ACT OF THE UNION IN NEGOTIATING FOR THE INCLUSION OF THE
PROFIT SHARING BENEFIT IN THE PRESENT CBA IS AN IMPLIED ADMISSION THAT
THEY WERE NOT ENTITLED TO IT IN 1987.
II
THE HONORABLE VOLUNTARY ARBITRATOR COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN HE MADE
THE CLEARLY BASELESS CONCLUSION THAT THE PETITIONER WAS MOTIVATED BY
ITS DESIRE TO DEFEAT OR OTHERWISE PREJUDICE THE BASIC RIGHTS OF ITS
EMPLOYEES. 2
The petition is impressed with merit.
Under the CBA between the parties that was in force and effect from May 1, 1985
to April 30,1988 it was agreed that the "bargaining unit" covered by the CBA
"consists of all regular or permanent employees, below the rank of assistant
supervisor, 3 Also expressly excluded from the term "appropriate bargaining unit"
are all regular rank and file employees in the office of the president, vice-
president, and the other offices of the company personnel office, security
office, corporate affairs office, accounting and treasurer department . 4
It is to this class of employees who were excluded in the "bargaining unit" and
who do not derive benefits from the CBA that the profit sharing privilege was
extended by petitioner.
There can be no discrimination committed by petitioner thereby as the situation
of the union employees are different and distinct from the non-union employees.
5 Indeed, discrimination per se is not unlawful. There can be no discrimination
where the employees concerned are not similarly situated.
Respondent union can not claim that there is grave abuse of discretion by the
petitioner in extending the benefits of profit sharing to the non-union employees
as they are two (2) groups not similarly situated. These non-union employees are
not covered by the CBA. They do not derive and enjoy the benefits under the CBA. SO ORDERED.

The contention of the respondent union that the grant to the non-union
employees of the profit sharing benefits was made at a time when there was a
deadlock in the CBA negotiation so that apparently the motive thereby was to
discourage such non-union employees from joining the union is not borne by the
record. Petitioner denies this accusation and instead points out that inspite of this
benefit extended to them, some non-union workers actually joined the respondent
union thereafter.

Respondent union also decries that no less than the president of the petitioner
agreed to include its members in the coverage of the 1987 profit sharing benefit
provided that they would agree to an earlier negotiation for the renewal of the
CBA which expired in 1988. Be this as it may, since there was actually a deadlock
in the negotiation and it was not resolved and consummated on the period
expected, private respondent can not now claim that petitioner has a duty to
extend the profit sharing benefit to the union members.

The Court holds that it is the prerogative of management to regulate, according to

its discretion and judgment, all aspects of employment. This flows from the
established rule that labor law does not authorize the of the employer in the
conduct of its business. 6 such management prerogative may be availed of
without fear of any liability so long as it is exercised in good faith for the
advancement of the employers' interest and not for the purpose of defeating or
circumventing the rights of employees under special laws or valid agreement and
are not exercised in a malicious, harsh, oppressive, vindictive or wanton manner
or out of malice or spite. 7

The grant by petitioner of profit sharing benefits to the employees outside the
"bargaining unit" falls under the ambit of its managerial prerogative. It appears to
have been done in good faith and without ulterior motive. More so when as in this
case there is a clause in the CBA where the employees are classified into those
who are members of the union and those who are not. In the case of the union
members, they derive their benefits from the terms and conditions of the CBA
contract which constitute the law between the contracting parties. 8 Both the
employer and the union members are bound by such agreement.

However, the court serves notice that it will not hesitate to strike down any act of
the employer that tends to be discriminatory against union members. It is only
because of the peculiar circumstances of this case showing there is no such
intention that this court ruled otherwise.

WHEREFORE, the petition is GRANTED and the award of respondent Voluntary

Arbitrator dated March 20,1989 is hereby REVERSED AND SET ASIDE being null
and void, without pronouncement as to costs.