Adjudicatory Power: Appellate

G.R. No. 116347 October 3, 1996

NATIVIDAD PONDOC, petitioner, vs.
NATIONAL LABOR RELATIONS COMMISSION (Fifth Division, Cagayan de Oro City) and EMILIO
PONDOC, respondents.

DECISION
DAVIDE, JR., J.:
The novel issue that confronts us in this case is whether the Fifth Division of the National Labor
Relations Commission (NLRC) can validly defeat a final judgment of the Labor Arbiter in favor of the
complainant in a labor case by: (a) entertaining a petition for injunction and damages, and an appeal from
the Labor Arbiter's denial of a claim for set-off based on an alleged indebtedness of the laborer and order
of execution of the final judgment; and, (b) thereafter, by receiving evidence and adjudging recovery on
such indebtedness and authorizing it to offset the Labor Arbiter's final award.

The petitioner takes the negative view. In its Manifestation and Motion in Lieu of Comment, 1 the
Office of the Solicitor General joins her in her plea, hence we required the NLRC to file its own comment.

We resolved to give due course to the petition after the filing by the NLRC and the private
respondent of their separate comments.

Petitioner Natividad Pondoc was the legitimate wife of Andres Pondoc. Atter her death on 5
December 1994, she was substituted by Hipolito Pondoc, her only legitimate son. 2

The Office of the Solicitor General summarized the factual antecedents of this case in its
Manifestation and Motion in Lieu of Comment:

Private respondent Eulalio Pondoc is the owner-proprietor of Melleonor General

Merchandise and Hardware Supply located at Poblacion, Sindangan, Zamboanga del
Norte. Respondent is engaged, among others, in the business of buying and selling copra,
rice, corn, "binangkol," junk iron and empty bottles. He has in his employ more than twenty
(20) regular workers (Records, pp. 9-11)

Records disclose that Andres Pondoc was employed by Eulalio Pondoc as a laborer from
October 1990 up to December 1991, receiving a wage rate of P20.00 per day. He was
required to work twelve (12) hours a day from 7:00 AM to 8:00 PM, Monday to Sunday.
Despite working on his rest days and holidays, he was not paid his premium pay as
required by law (Ibid).

Consequently, on May 14, 1992, Natividad Pondoc, on behalf of her husband, filed a
complaint for salary differential, overtime pay, 13th month pay, holiday pay and other
money claims before the Sub-Regional Arbitration Branch No. 9 of the NLRC, docketed as
Sub-RAB Case No. 09-05-10102-92 (Records, p.1).

In his position paper, private respondent questioned, among others, the existence of [an]
employer-employee relationship between them. He further averred that Melleonor General
Merchandise and Hardware Supply is a fictitious establishment (Records, pp. 64-68).

On June 17, 1993, Labor Arbiter Esteban Abecia rendered a Decision finding the existence
of [an] employer-employee relationship between the parties. The dispositive portion of the
Decision reads:

WHEREFORE, judgment is hereby rendered: (a) ordering respondent

Eulalio Pondoc to pay complainant the following claims:

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 (1) Salary differential for
reason of underpayment P35,776.00;
—————
(2) Regular holiday and
premium pay for holiday services 902.00;
————
(3) Premium pay for rest day
services 3,840.00;
————
(4) 13th month pay 3,600.00
————

or the total amount of FORTY-FOUR [sic] THOUSAND AND ONE

HUNDRED EIGHTEEN PESOS (P44,118.00).

Other claims are denied for lack of merit. SO ORDERED (Records, pp.
323-324).

On his last day to perfect an appeal, private respondent filed a Manifestation before the
Labor Arbiter praying that his liabilities be set-off against petitioner's alleged indebtedness
to him (Records, pp. 325-327). The Labor Arbiter denied, however, the compensation, and,
instead, issued a writ of execution as prayed for by petitioner (Records, p. 328).

Before the execution order could be implemented, however, private respondent was able
to obtain a restraining order from the NLRC, where he filed a Petition for "Injunction and
Damages," docketed as NLRC Case No. ICM-000065.

On February 28, 1994, public respondent NLRC allowed compensation between

petitioner's monetary award and her alleged indebtedness to private respondent. It
disposed:
WHEREFORE, the appealed order is hereby vacated and set aside. A new
one is entered declaring the setting-off of complainant's indebtedness
which allegedly amounted to P41,051.35 against the complainant's
monetary award in the amount of P44,118.00. The additional amount of
P5,000.00 which complainant allegedly got from respondent on 10 July
1993 could not be credited in view of appellant's failure to submit evidence
to prove that complainant was really paid P5,000.00.

Accordingly, respondent Eulalio Pondoc is hereby directed to pay

complainant Natividad Pondoc the amount of P3,066.65.

The Temporary restraining order issued herein is hereby made

permanent. SO ORDERED (Annex "D" of Petition). 3

Her motion for reconsideration of the judgment having been denied by the NLRC, the petitioner
instituted this special civil action for certiorari under Rule 65 of the Rules of Court wherein she prays this
Court annul the challenged decision of the NLRC, Fifth Division (Cagayan de Oro City), in NLRC Case No.
IC No. M-000065, and direct the enforcement of the writ of execution in NLRC Case No. SRAB-09-05-
10102-92, on the ground that the NLRC, Fifth Division, acted without or in excess of jurisdiction or with
grave abuse of discretion when it proceeded to determine the alleged indebtedness of the petitioner and
set-off the same against the liabilities of the private respondent. The petitioner asserts that the decision of
the Labor Arbiter in NLRC Case No. SRAB-09-05-10102-92 was already final and executory when the
private respondent tried to defeat the judgment by asserting an alleged indebtedness of Andres Pondoc as
a set-off, a claim not pleaded before the Labor Arbiter at any time before judgment, hence deemed waived.
Moreover the indebtedness "did not evolve out [sic] employer-employee relationship, hence, purely civil in
aspect."

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 The Office of the Solicitor General agreed with the petitioner and stressed further that the asserted
indebtedness was never proven to have arisen out of or in connection with the employer-employee
relationship between the private respondent and the late Andres Pondoc, or to have any causal connection
thereto. Accordingly, both the Labor Arbiter and the NLRC did not have jurisdiction over the private
respondent's claim.

As expected, the private respondent and the NLRC prayed for the dismissal of this case.

We rule for the petitioner.

The proceedings before the NLRC were fatally flawed.

In the first place, the NLRC should not have entertained the private respondent's separate or
independent petition for "Injunction and Damages" (NLRC IC No. M-000065). It was obvious that the petition
was a scheme to defeat or obstruct the enforcement of the judgment in NLRC Case No. SRAB-09-05-
10102-92 where, in fact, a writ of execution had been issued. Article 218(e) of the Labor Code does not
provide blanket authority to the NLRC or any of its divisions to issue writs of injunction, while Rule XI of the
New Rules of Procedure of the NLRC makes injunction only an ancillary remedy in ordinary labor disputes
such as the one brought by the petitioner in NLRC Case No. SRAB-09-05-10102-92. This is clear from
Section 1 of the said Rule which pertinently provides as follows:

Sec. 1. Injunction in Ordinary Labor Disputed. — A preliminary injunction or a restraining

order may be granted by the Commission through its divisions pursuant to the provisions
of paragraph (e) of Article 218 of the Labor Code, as amended, when it is established on
the bases of the sworn allegations in the petition that the acts complained of, involving or
arising from any labor dispute before the Commission, which, if not restrained or performed
forthwith, may cause grave or irreparable damage to any party or render ineffectual any
decision in favor of such party.
xxx xxx xxx
The foregoing ancillary power may be exercised by the Labor Arbiters only as an incident
to the cases pending before them in order to preserve the rights of the parties during the
pendency of the case, but excluding labor disputes involving strike or lockout. (emphasis
supplied).

Hence, a petition or motion for preliminary injunction should have been filed in the appeal
interposed by the private respondent, i.e., in NLRC Case No. SRAB-09-05-10102-92. This matter, however,
became academic when the NLRC consolidated the two cases as shown by the captions in its challenged
decision of 28 February 1994 and resolution of 6 May 1994.

Secondly, the appeal of the private respondent in NLRC Case No. SRAB-09-05-10102-92 was not
from the decision therein, but from the order of the Labor Arbiter denying the set-off insisted upon by the
private respondent and directing the execution of the judgment. Therefore, the private respondent admitted
the final and executory character of the judgment.

The Labor Arbiter, in denying the set-off, reasoned "[i]t could have been considered if it was
presented before the decision of this case." 4 While this is correct, there are stronger reasons why the set-
off should, indeed, be denied. As correctly contended by the Office of the Solicitor General, there is a
complete want of evidence that the indebtedness asserted by the private respondent against Andres
Pondoc arose out of or was incurred in connection with the employer-employee relationship between them.
The Labor Arbiter did not then have jurisdiction over the claim as under paragraph (a) of Article 217 of the
Labor Code, Labor Arbiters have exclusive and original jurisdiction only in the following cases:

1. Unfair labor practice cases;

2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that workers may file
involving wages, rates of pay, hours of work and other terms and conditions of employment;

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 4. Claim for actual, moral, exemplary and other forms of damages arising from employer-
employee relations;
5. Cases arising from any violation of Article 264 of this Code, including questions involving
the legality of strikes and lockouts; and
6. Except claims for Employees Compensation, Social Security, Medicare and maternity
benefits, all other claims, arising from employer-employee relations, including those of
persons in domestic or household service, involving an amount exceeding five thousand
pesos (P5,000.00) regardless of whether accompanies with a claim for reinstatement.

On the other hand, under paragraph (b) thereof, the NLRC has exclusive appellate jurisdiction over
all cases decided by the Labor Arbiters. This simply means that the NLRC does not have original jurisdiction
over the cases enumerated in paragraph (a) and that if a claim does not fall within the exclusive original
jurisdiction of the Labor Arbiter, the NLRC cannot have appellate jurisdiction thereon.

The conclusion then is inevitable that the NLRC was without jurisdiction, either original or appellate,
to receive evidence on the alleged indebtedness, render judgment thereon, and direct that its award be set-
off against the final judgment of the Labor Arbiter.

Finally, even assuming arguendo that the claim for the alleged indebtedness fell within the
exclusive original jurisdiction of the Labor Arbiter, it was deemed waived for not having been pleaded as an
affirmative defense or barred for not having been set up as a counterclaim before the Labor Arbiter at any
appropriate time prior to the rendition of the decision in NLRC Case No. SRAB-09-05-10102-92. Under the
Rules of Court, which is applicable in a suppletory character in labor cases before the Labor Arbiters or the
NLRC pursuant to Section 3, Rule I of the New Rules of Procedure of the NLRC, defenses which are not
raised either in a motion to dismiss or in the answer are deemed waived 5 and counterclaims not set up in
the answer are barred. 6 Set-off or compensation is one of the modes of extinguishing obligations 7 and
extinguishment is an affirmative defense and a ground for a motion to dismiss. 8

We do not then hesitate to rule that the NLRC acted without jurisdiction or with grave abuse of
discretion in entertaining an independent action for injunction and damages (NLRC IC No. M-000065), in
receiving evidence and rendering judgment on the alleged indebtedness of Andres Pondoc, and in ordering
such judgment to offset the final award of the Labor Arbiter in NLRC Case No. SRAB-09-05-10102-92.

WHEREFORE, the instant petition is GRANTED and the challenged decision of 28 February 1994
and resolution of 6 May 1994 of the National Labor Relations Commission in NLRC Case No. IC No. M-
000065 and NLRC Case No. SRAB-09-05-10102-92 are ANNULLED and SET ASIDE. The judgment of
the Labor Arbiter in NLRC Case No. SRAB-09-05-10102-92 should forthwith be enforced without any further
delay, the award therein bearing interest at the rate of twelve per centum (12%) per annum from the finality
of such judgment until it shall have been fully paid.

Costs against the private respondent. SO ORDERED.

Power to Issue Injunction or TRO

G.R. No. 117964 March 28, 2001
PLACIDO O. URBANES, JR., petitioner, vs.
COURT OF APPEALS, SOCIAL SECURITY SYSTEM, HECTOR B. INDUCTIVO, in his capacity as
Chairman of the Purchase and Bidding Committee, GODOFREDO S. SISON, ISABELO I. LISCANO,
AURORA E.L. ORTEGA, SUSANA K. INCIONG, EDGAR B. SOLILAPSI AND CECILIA C. CANLAS, as
Members, respondents.

DECISION
YNARES-SANTIAGO, J.:
This is a petition for review seeking to annul and set aside the decision of the Court of Appeals in
CA-G.R. SP No.34345, the dispositive portion of which reads:

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 WHEREFORE, in view of all the foregoing, the instant Petition for Certiorari is GRANTED.

The assailed Orders dated 13 May 1994 (Annex "A"), 31 May 1994 (Annex "B") and the
Writ of Preliminary Injunction dated 01 June 1994 (Annex "C") are hereby declared NULL
and VOID and SET ASIDE, and the complaint in Civil Case No. Q-94-20557 ordered
DISMISSED.1

The antecedent facts are as follows:

Petitioner Placido O. Urbanes, Jr. is the owner and operator of the Catalina Security Agency
(hereinafter referred to as CATALINA), which was first awarded a contract to provide security services to
the Social Security System (SSS) through a public bidding conducted way back in 1987, covering the period
July 1, 1988 to June 30, 1989. Thereafter, the contract was extended on a month-to-month basis, until
another public bidding was held on August 16, 1990 where CATALINA was one of the bidders. However,
the contract was awarded to Bolinao Security and Investigation Services.

Claiming that the public bidding was attended by irregularities and anomalies, CATALINA filed an
action, which was docketed as Civil Case No. Q-91- 7798, before the Regional Trial Court of Quezon City,
praying that the award of the security services contract in favor of Bolinao be enjoined. The trial court issued
a writ of preliminary injunction restraining the SSS from awarding the contract for security services to
Bolinao Security and Investigation Services.

Consequently, the SSS filed a petition for certiorari before the Court of Appeals, which was
docketed as CA-G.R. SP No.26633, seeking the annulment of the writ of preliminary injunction issued by
the trial court. The petition was dismissed due to the failure of SSS to attach to the petition certified true
copies of the assailed orders of the trial court as well as its failure to state certain material data. The SSS
filed a motion for reconsideration, but the same was denied by the appellate court. Not satisfied, the SSS
filed a second petition for certiorari for the nullification of the questioned orders of the trial court. This petition
was likewise dismissed by the Court of Appeals in a decision dated October 30, 1992.

Meanwhile, a compromise agreement was forged between respondent Urbanes of CATALINA and
the SSS. Consequently, the trial court rendered a decision approving the compromise agreement. The
terms of the compromise agreement are as follows:

1) That each party mutually agrees to withdraw its claim for damages against the other
party;

2) That SSS shall conduct a new public bidding, with CATALINA already considered a
qualified participant; and

3) That in the meantime, CATALINA shall continue to provide security services to the SSS
until such time that a new public bidding is actually conducted and a valid award is made. 2

Accordingly, the SSS conducted a new public bidding, with CATALINA as one of he qualified
participants. The Social Security Commission awarded the contract to Jaguar Security and Investigation
Services, Inc. (JAGUAR) and, on May 12, 1994, the contract for security services was executed between
the Social Security Commission and JAGUAR. The following day, a formal notice was sent to CATALINA
for it to turn over the security services to JAGUAR.

Convinced that there was fraud and arbitrariness in the evaluation of the bids, CATALINA filed an
action for damages and injunction, with application for temporary restraining order, before the Regional
Trial Court of Quezon City, praying for the issuance of a writ of preliminary injunction to: (1) prevent, restrain
and enjoin the SSS from terminating CATALINA's services; and (2) to annul the award made in favor of
JAGUAR. CATALINA further prayed for an award of penal and exemplary damages as well.

On May 13, 1994, the trial court issued an order granting the temporary restraining order. After due
hearing, the trial court granted the preliminary injunction prayed for, directing as follows:

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 WHEREFORE, upon the posting of a bond in the sum of P100,000.00, let the Writ of Preliminary
Prohibitory Injunction issue, enjoining and restraining respondents Social Security System, the
Chairman and Members of the Purchase and Bidding Committee, namely Hector B. Inductive, as
Chairman; Godofredo S. Sison, Isabelo I. Liscano, Aurora E.L. Ortega, Susana K. Inciong, Edgar
B. Solilapsi and Cecilia C. Canlas, as Members, their agents, attorneys and/or representatives,
from terminating the services of the plaintiff and from proceeding with the award of the security
contract in favor of Jaguar or any other party until the matter of propriety of permanent injunction is
appropriately determined. SO ORDERED.3

On June 1, 1994, the trial court issued the writ of preliminary injunction, enjoining the SSS and
anyone acting on its behalf to cease and desist from terminating the services of CATALINA and from
proceeding with the award of the contract to JAGUAR or any other party.

On June 14, 1994, the SSS and members of its Purchase and Bidding Committee, private
respondents herein, filed a petition for certiorari before the Court of Appeals, docketed as CA-G.R. SP No.
34345, seeking the issuance of a writ of preliminary injunction and/or a temporary restraining order to enjoin
the enforcement of the orders issued by the respondent trial court on May 13 and 31, 1994 as well as the
writ of preliminary injunction dated June 1, 1994. Private respondents also prayed that petitioner be
restrained from proceeding with Civil Case No. Q-94-20557.

Private respondents cited the following grounds in support of their petition:

(1) Respondent judge totally ignored petitioners' evidence that the bidding conducted by
the SSS was legal and fair and that the bid of Catalina was not advantageous to the SSS;

(2) Respondent judge totally disregarded the legal presumption of regularity of the public
bidding conducted by SSS;

(3) Respondent judge disregarded the right of SSS to reject any or all bids;

(4) Catalina has no existing clear legal right that is being threatened and that needs to by
protected by an injunctive order;

(5) There is no possible irreparable injury to Catalina that cannot be pecuniarily

compensated in an action for damages, assuming it has a right thereto;

(6) The order and writ would enjoin the award of the contract which has already become a
fait accompli;

(7) The order and writ practically disposed of the case on the merits on the basis of purely
imagined facts;

(8) The order for the issuance of the writ of injunction and the writ itself were issued under
questionable circumstances.4

On June 22, 1994, the Court of Appeals issued a temporary restraining order enjoining the trial
court from enforcing the orders dated May 13 and 31, 1994, as well as the writ of preliminary injunction.

On July 22, 1994, the Court of Appeals rendered the assailed decision granting the petition for
certiorari and nullifying the orders of the trial court. The appellate court also ordered the dismissal of Case
No. Q-94-20557 pending before the trial court. CATALINA's subsequent motion for reconsideration was
denied by the Court of Appeals in a Resolution dated November 11, 1994.5

Hence, this petition for review based on the following grounds:

(1) Respondent Court of Appeals exceeded its jurisdiction in ordering the dismissal of Civil
Case No. Q-94-20557.

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 (2) Respondent Court of Appeals exceeded its jurisdiction in reviewing the findings of the
lower court. It should have limited its jurisdiction to determining whether the lower court
abused its discretion or exceeded its jurisdiction in issuing the questioned preliminary
injunction.

(3) Respondent Court of Appeals erred in not finding that at the hearing on the preliminary
injunction before the lower court, plaintiff (the herein petitioner) had presented prima facie
evidence of the irregularities in the bidding which justified issuance by the lower court of
the questioned writ of preliminary injunction.

The primordial issue to be resolved in this petition is: Can the Court of Appeals, in certiorari
proceedings assailing an interlocutory order, review the alleged errors of judgment of a trial court, reverse
the trial court's factual findings, and dismiss the main action pending trial before the trial court?

Rule 58 of the Rules of Court provides for both preliminary and permanent injunction. A preliminary
injunction is defined in Section 1 thereof as:

. "(A)n order granted at any stage of an action prior to the judgment or final order, requiring
a party or a court, agency or a person to refrain from a particular act or acts."

On the other hand, Section 9 of the same rule defines a permanent injunction in this wise:
"x x x. If after the trial of the action it appears that the applicant is entitled to have the act
or acts complained of permanently enjoined, the court shall grant a final injunction
perpetually restraining the party or person enjoined from the commission or continuance
of the act or acts or confirming the preliminary mandatory injunction."

By their very definitions, the action for injunction is distinct from the ancillary remedy of preliminary
injunction which cannot exist except only as part or an incident of an independent action or proceeding. As
a matter of course, in an action for injunction, the auxiliary remedy of preliminary injunction, whether
prohibitory or mandatory, may issue. Under the present state of the law, the main action of injunction seeks
a judgment embodying a final injunction which is distinct from, and should not be confused with the
provisional remedy of preliminary injunction, the sole object of which is to preserve the status quo until the
merits can be heard.6

A writ of preliminary injunction is generally based solely on initial and incomplete evidence. The
evidence submitted during the hearing on an application for a writ of preliminary injunction is not conclusive
or complete for only a "sampling" is needed to give the trial court an idea of the justification for the
preliminary injunction pending the decision of the case on the merits.7 As such, the findings of fact and
opinion of a court when issuing the writ of preliminary injunction are interlocutory in nature and made even
before the trial on the merits is commenced or terminated. There are vital facts that have yet to be presented
during the trial which may not be obtained or presented during the hearing on the application for the
injunctive writ. The trial court needs to conduct substantial proceedings in order to put the main controversy
to rest.8 It does not necessarily proceed that when a writ of preliminary injunction is issued, a final injunction
will follow.9

In this case, however, the Court of Appeals dismissed the main action for damages and injunction
after evaluating the incomplete and selective evidence presented during the hearing held for the ancillary
remedy of preliminary injunction, notwithstanding that there still remained for the resolution of the trial court
the issue of whether or not the petitioner is entitled to the damages prayed for as well as the final injunction.

In disposing of the petition for certiorari, the Court of Appeals did not limit itself to determining that
the said writ of preliminary injunction was issued by the trial court with grave abuse of discretion amounting
to a lack or excess of jurisdiction. It overstepped its boundaries when it dismissed the main action for
damages and injunction. In fine, the judgment in a certiorari proceeding questioning an interlocutory matter
was used to finally determine a main case which was still awaiting trial.

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 Furthermore, the Court of Appeals delved into the facts and merits of the main case despite the
well-established rule that certiorari cannot be raised to correct erroneous conclusions of fact or law. 10 In
justifying the dismissal of the main action pending before the trial court, the Court of

Appeals necessarily ruled that the trial court made errors in judgment, but such errors are
reviewable only by an appeal,11 since questions of fact are beyond the scope of a petition for certiorari.12

In a corollary case where the Court of Appeals affirmed the trial court's judgment on the merits of
a case, even when what was elevated before the said appellate court was only the propriety of the issuance
of the writ of execution of the judgment of the trial court, the Supreme Court ruled that the Court of Appeals
acted ultra jurisdictio. It was held that:

[T]he authority of the respondent appellate court was confined only to ruling upon the issue
of whether the Regional Trial Court committed grave abuse of discretion in issuing the
order directing the issuance of a writ of execution against petitioner. Whether the trial court
committed a mistake in deciding the case on the merits is an issue way beyond the
competence of respondent appellate court to pass upon in a certiorari proceeding.13

In like manner, we find that the Court of Appeals exceeded its jurisdiction when it decided the main
case for damages and injunction even when what was elevated before it was the question of propriety of
the issuance of the ancillary writ of preliminary injunction.

The trial court did not commit any act that was diametrically opposed to the time-honored legal
principles. The issuance of the questioned writ of preliminary injunction was well-supported by sufficient
evidence presented by the petitioner during the hearing held for that purpose. The trial court's evaluation
of the evidence presented by both contending parties led the said court to hold that justice and equity would
be better served if the status quo is preserved until a final determination of the merits of the pending case
for damages and injunction is laid down. We find nothing whimsical, arbitrary, or capricious in the trial court's
ruling.

In the exercise of its discretion, the trial court found all the requisites for the issuance of an injunctive
writ to be attendant. First, the court- approved compromise agreement in Civil Case No.7798 established
that CATALINA will continue to provide security services to the SSS until such time that a new public bidding
is actually conducted and a valid award is made, giving the petitioner a clear and unmistakable
right. Second, the invasion of the petitioner's right was material and substantial in that the SSS has
attempted to oust CATALINA from rendering such services within the SSS premises by awarding the
contract to JAGUAR despite CATALINA's protests that the public bidding was fraught with
anomalies. Third, and last, there was an urgent necessity for the writ to prevent serious damage to
CATALINA while the main case was still pending. While private respondents may have presented evidence
to rebut CATALINA's assertions, these will be better assessed and considered in the trial proper. Besides,
the assailed injunctive writ was not a judgment on the merits of the case.

Apart from reversing the trial court's findings and conclusions of fact, the Court of Appeals also
ruled that the trial court acted with grave abuse of discretion amounting to lack or excess of jurisdiction in
issuing the writ of preliminary injunction. Grave abuse of discretion in the issuance of writs implies a
capricious and whimsical exercise of judgment that is equivalent to lack of jurisdiction, or where the power
is exercised in an arbitrary or despotic manner by reason of passion, prejudice or personal aversion
amounting to an evasion of positive duty or to a virtual refusal to perform the duty enjoined, or to act at all
in contemplation of law.14 Thus, for the extraordinary writ of certiorari to lie, there must be capricious,
arbitrary and whimsical exercise of power.15

Clearly, the Court of Appeals erred in interfering with the trial court's exercise of discretion when
the former went over the preliminary evidence with a fine-toothed comb. The rule is well-entrenched that
the issuance of the writ of preliminary injunction as an ancillary or preventive remedy to secure the right of
a party in a pending case rests upon the sound discretion of the trial court. Rule 58, Section 7 of the Rules
of Court gives generous latitude to the trial courts in this regard for the reason that conflicting claims in an

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application for a provisional writ more often than not involve a factual determination which is not the function
of the appellate courts. Hence, the exercise of sound judicial discretion by the trial court in injunctive matters
must not be interfered with except when there is manifest abuse. 16

Significantly, the SSS and PBAC were given their day in court to oppose petitioner's application for
the ancillary writ. In this connection, we have consistently held that there is no grave abuse of discretion in
the issuance of a writ of preliminary injunction where a party was not deprived of its day in court, as it was
heard and had exhaustively presented all its arguments and defenses. 17 There is no denying that private
respondents, along with herein petitioner, were given ample time and opportunity to present their respective
evidence as well as arguments in support of their opposing positions. Consequently, the trial court
committed no grave abuse of discretion in issuing the writ of preliminary injunction. It was the Court of
Appeals that committed reversible error in concluding otherwise.18

Finally, the Court of Appeals erred in dismissing the main case pending before the trial court. Even
assuming for the moment that grave abuse of discretion attended the issuance of the writ of preliminary
injunction, only the said writ could. be nullified, and the respondent appellate court would still be
overstepping the bounds of its jurisdiction and authority by dismissing the main case before the same could
be heard by the trial court.

WHEREFORE, in view of all the foregoing, the instant petition is GRANTED. The Decision dated
July 22, 1994 and the Resolution dated November 14, 1994 in CA-G.R. SP No.34345 are ANNULLED and
SET ASIDE. The case is REMANDED to the Regional Trial Court of Quezon City, Branch 220 for further
proceedings.

No pronouncement as to costs. SO ORDERED.

G.R. No. 113541 November 22, 2001

THE HONGKONG AND SHANGHAI BANKING CORPORATION EMPLOYEES UNION, petitioner, vs.
NATIONAL LABOR RELATIONS COMMISSION AND THE HONGKONG AND SHANGHAI BANKING
CORPORATION LIMITED, respondents.

DECISION
SANDOVAL-GUTIERREZ, J.:
The instant petition for certiorari1 with prayer for a temporary restraining order assails the
Resolution2 dated January 31, 1994 of the National Labor Relations Commission in NLRC IC CASE No.
000422-93, entitled "THE HONGKONG AND SHANGHAI BANKING CORPORATION, LIMITED, versus
THE HONGKONG AND SHANGHAI BANKING CORPORATION EMPLOYEES UNION, et al."

The challenged Resolution issued by the NLRC granted the preliminary injunction prayed for by
The Hongkong and Shanghai Banking Corporation, Limited ("respondent bank") enjoining The Hongkong
and Shanghai Banking Corporation Employees Union ("petitioner union"), its agents, sympathizers or
anyone acting in its behalf from unlawfully barricading and/or obstructing the free ingress to and egress
from the respondent bank's offices in Makati City and Ortigas Center, Pasig City.

On December 22, 1993, the officers and members of petitioner union staged a strike against
respondent bank for its (1) arbitrary and unilateral reduction of the "CBA-established entry level of clerical
pay rates" and (2) whimsical refusal to bargain collectively on wage rates, among others.

The next day, December 23, 1993, respondent bank filed a petition for injunction3 with the National
Labor Relations Commission ("respondent NLRC") praying that petitioner union's acts of obstructing the
ingress to and egress from the bank's premises be enjoined and, in the interim, a temporary restraining
order be issued. Respondent bank claimed that the unlawful obstruction has caused grave and irreparable
damage to its banking activities, and that unless these acts are restrained, it will continue to suffer greater
injury.

9
 At the initial hearing of the petition for injunction on December 28, 1993 before Labor Arbiter Jesus
B. Afable (whom respondent NLRC delegated to receive evidence thereon), petitioner union orally prayed
for the dismissal of the petition on the ground that respondent bank failed to specifically allege therein the
provisions of Article 218 (e, 3 and 4) of the Labor Code, as amended, to wit:

"ART. 218. POWERS OF THE COMMISSION. — The Commission shall have the power
and authority:
xxx xxx xxx
(e). To enjoin or restrain any actual or threatened commission of any or all prohibited or
unlawful acts or to require the performance of a particular act in any labor dispute which, if
not restrained or performed forthwith, may cause grave or irreparable damage to any party
or render ineffectual any decision in favor of such party: Provided, That no temporary or
permanent injunction in any case involving or growing out of a labor dispute as defined in
this Code shall be issued except after hearing x x x, and only after a finding of fact by the
Commission, to the effect:
xxx xxx xxx
(3) That as to each item of relief to be granted, greater injury will be inflicted
upon complainant by the denial of relief than will be inflicted upon
defendants by the granting of relief;

(4) That complainant has no adequate remedy at law; and

x x x " (Emphasis ours)

On January 4, 1994, respondent bank filed a supplemental petition alleging that petitioner union's
officers and members continue to commit acts of intimidation, coercion, and obstruction in violation of Article
264 (e)4 of the Labor Code.

Finding the petition and the supplemental petition to be in accordance with Article 218 of the Labor
Code, respondent NLRC issued a Resolution5 on January 6, 1994 granting a temporary restraining order
and setting the hearing of respondent bank's application for preliminary injunction, thus impliedly denying
petitioner union's oral motion to dismiss the petition.

Petitioner union then filed a motion for reconsideration of the said Resolution but was denied by
respondent NLRC in its Resolution of January 20, 1994. This Resolution also directed Labor Arbiter Afable
to conduct trial on January 24, 25 and 26, 1994. During these dates, respondent bank presented
testimonial, documentary and real evidence. Upon motion by petitioner union, the Labor Arbiter ordered the
exclusion for being immaterial, of all evidence pertaining to the events prior to the said dates. Respondent
bank then objected to this order of exclusion by filing an "Exception with Tender of Excluded Evidence (Ex
Abundante Cautelam)". After respondent bank rested its case, petitioner union did not present evidence.
Its counsel argued in open session for the dismissal of the petition, citing the insufficiency of evidence in
support of the issuance of a temporary restraining order or preliminary injunction.

On January 31, 1994, respondent NLRC issued the questioned Resolution (1) denying petitioner
union's oral motion to dismiss the petition; (2) issuing a writ of preliminary injunction in favor of respondent
bank, and (3) directing the Labor Arbiter to conduct further hearing for the reception of additional evidence
to sustain the issuance of a writ of permanent injunction.

Without first filing a motion for reconsideration of the said Resolution, petitioner union comes to this
Court via the present petition raising the sole issue of whether or not respondent NLRC acted with grave
abuse of discretion in denying its motion to dismiss and granting respondent bank's prayer for the issuance
of a writ of preliminary injunction.

Petitioner union vigorously maintains that the petition for injunction filed by the respondent bank
with the NLRC suffers from a fatal flaw for it failed to specifically allege therein the matters set forth under
Nos. 3 and 4 of Article 218 (e) of the Labor Code. Petitioner union further alleges that it was deprived of its
right to due process because it was not given the opportunity "to cross-examine the bank's witnesses

10
concerning the excluded evidence relied upon by respondent Commission for its findings, and to present
testimony in opposition thereto."6

The petition is devoid of merit.

In a special civil action for certiorari, the petitioner has to show not merely a reversible error
committed by the public respondent, but that it acted with grave abuse of discretion amounting to lack or
excess of jurisdiction.7 "Grave abuse of discretion" implies such capricious and whimsical exercise of
judgment as is equivalent to lack of jurisdiction, or where the power is exercised in an arbitrary or despotic
manner by reason of passion or personal hostility which must be so patent and gross as to amount to an
invasion of positive duty or to a virtual refusal to perform the duty enjoined or to act at all in contemplation
of law.8 Mere abuse of discretion is not enough.9

Here, we see no grave abuse of discretion on the part of respondent NLRC in giving due course to
the petition for injunction filed by respondent bank. As aptly observed by the Solicitor General, it is not
necessary for the respondent bank to allege in verbatim the requisites for the issuance of the temporary
restraining order and/or writ of preliminary injunction under Article 218 (e) of the Labor Code.10 In its original
and supplemental petition for injunction, respondent bank made sufficient allegations that members of
petitioner union were unlawfully preventing or obstructing the free ingress to and egress from the
respondent bank premises; and disrupting operations, causing great and continuing damage to the bank in
terms of lost revenues. These allegations, as found by respondent NLRC, were proven by respondent bank
during the proceedings for the issuance of a writ of preliminary injunction. Incidentally, it is not our function
in this certiorari proceedings to review the findings of facts of respondent NLRC since we are confined only
to issues of jurisdiction or grave abuse of discretion.11 Indeed, this Court is not a trier of facts; factual issues
are beyond the ambit of our authority to review on certiorari.12

Anent the contention of petitioner union that it was deprived of the opportunity to cross-examine
the bank's witnesses, the same is totally unavailing. In the proceedings before respondent NLRC, petitioner
union's counsel, instead of cross-examining those witnesses, merely resorted to oral argument and moved
to dismiss the petition for insufficiency of evidence. The oral motion to dismiss was opposed, also in open
session, by respondent bank, after which, the entire incident was considered submitted for resolution.
Respondent NLRC had no recourse but to decide the motion based solely on the evidence presented. In
any event, respondent NLRC gave petitioner union the opportunity to controvert respondent bank's
evidence when it directed the Labor Arbiter to receive evidence. Clearly, respondent NLRC, in issuing the
assailed Resolution, did not commit any grave abuse of discretion.

WHEREFORE, the petition is DISMISSED. SO ORDERED.

Injunction from NLRC not Proper Remedy against Employee’s Dismissal

G.R. No. 120567 March 20, 1998
PHILIPPINE AIRLINES, INC., petitioner, vs.
NATIONAL LABOR RELATIONS COMMISSION, FERDINAND PINEDA and GOGFREDO
CABLING, respondents.

DECISION
MARTINEZ, J.:
Can the National Labor Relations Commission (NLRC), even without a complaint for illegal
dismissal tiled before the labor arbiter, entertain an action for injunction and issue such writ enjoining
petitioner Philippine Airlines, inc. from enforcing its Orders of dismissal against private respondents, and
ordering petitioner to reinstate the private respondents to their previous positions?

This is the pivotal issue presented before us in this petition for certiorari under Rule 65 of the
Revised Rules of Court which seeks the nullification of the injunctive writ dated April 3, 1995 issued by the

11
NLRC and the Order denying petitioner's motion for reconsideration on the ground that the said Orders
were issued in excess of jurisdiction.

Private respondents are flight stewards of the petitioner. Both were dismissed from the service for
their alleged involvement in the April 3, 1993 currency smuggling in Hong Kong.

Aggrieved by said dismissal, private respondents filed with the NLRC a petition1 for injunction
praying that:
I. Upon filing of this Petition, a temporary restraining order be issued, prohibiting
respondents (petitioner herein) from effecting or enforcing the Decision dated Feb. 22,
1995, or to reinstate petitioners temporarily while a hearing on the propriety of the issuance
of a writ of preliminary injunction is being undertaken;

II. After hearing, a writ of preliminary mandatory injunction be issued ordering respondent
to reinstate petitioners to their former positions pending the hearing of this case, or,
prohibiting respondent from enforcing its Decision dated February 22, 1995 while this case
is pending adjudication;

III. After hearing, that the writ of preliminary injunction as to the reliefs sought for be made
permanent, that petitioners be awarded full backwages, moral damages of PHP
500,000.00 each and exemplary damages of PHP 500,000.00 each, attorney's fees
equivalent to ten percent of whatever amount is awarded, and the costs of suit.

On April 3, 1995, the NLRC issued a temporary mandatory injunction 2 enjoining petitioner to cease
and desist from enforcing its February 22, 1995 Memorandum of dismissal. In granting the writ, the NLRC
considered the following facts, to wit:

. . . that almost two (2) years ago, i.e. on April 15, 1993, the petitioners were instructed to
attend an investigation by respondent's "Security and Fraud Prevention Sub-Department"
regarding an April 3, 1993 incident in Hongkong at which Joseph Abaca, respondent's
Avionics Mechanic in Hongkong "was intercepted by the Hongkong Airport Police at Gate
05 . . . the ramp area of the Kai Tak International Airport while . . . about to exit said gate
carrying a . . . bag said to contain some 2.5 million pesos in Philippine Currencies. That at
the Police Station. Mr. Abaca claimed that he just found said plastic bag at the Skybed
Section of the arrival flight PR300/03 April 93," where petitioners served as flight stewards
of said flight PR300; . . the petitioners sought "a more detailed account of what this HKG
incident is all about"; but instead, the petitioners were administratively charged, "a hearing"
on which "did not push through" until almost two (2) years after, i.e, "on January 20, 1995
. . . where a confrontation between Mr. Abaca and petitioners herein was compulsorily
arranged by the respondent's disciplinary board" at which hearing, Abaca was made to
identify petitioners as co-conspirators; that despite the fact that the procedure of
identification adopted by respondent's Disciplinary Board was anomalous "as there was no
one else in the line-up (which could not be called one) but petitioners . . . Joseph Abaca
still had difficulty in identifying petitioner Pineda as his co-conspirator, and as to petitioner
Cabling, he was implicated and pointed by Abaca only after respondent's Atty. Cabatuando
pressed the former to identify petitioner Cabling as co-conspirator"; that with the hearing
reset to January 25, 1995, "Mr. Joseph Abaca finally gave exculpating statements to the
board in that he cleared petitioners from any participation or from being the owners of the
currencies, and at which hearing Mr. Joseph Abaca volunteered the information that the
real owner of said money was one who frequented his headquarters in Hongkong to which
information, the Disciplinary Board Chairman, Mr. Ismael Khan," opined "for the need for
another hearing to go to the bottom of the incident"; that from said statement, it appeared
"that Mr. Joseph Abaca was the courier, and had another mechanic in Manila who hid the
currency at the plane's skybed for Abaca to retrieve in Hongkong, which findings of how
the money was found was previously confirmed by Mr. Joseph Abaca himself when he was
first investigated by the Hongkong authorities"; that just as petitioners "thought that they

12
 were already fully cleared of the charges, as they no longer received any summons/notices
on the intended "additional hearings" mandated by the Disciplinary Board," they were
surprised to receive "on February 23, 1995. . . a Memorandum dated February 22, 1995"
terminating their services for alleged violation of respondent's Code of Discipline "effective
immediately"; that sometime . . . first week of March, 1995, petitioner Pineda received
another Memorandum from respondent Mr. Juan Paraiso, advising him of his termination
effective February 3, 1995, likewise for violation of respondent's Code of Discipline; . . .

In support of the issuance of the writ of temporary injunction, the NLRC adapted the view that: (1)
private respondents cannot be validly dismissed on the strength of petitioner's Code of Discipline which
was declared illegal by this Court in the ease at PAL, Inc. vs. NLRC, (G.R. No. 85985), promulgated August
13, 1993, for the reason that it was formulated by the petitioner without the participation of its employees
as required in R.A. 6715, amending Article 211 of the Labor Code; (2) the whimsical, baseless and
premature dismissals of private respondents which "caused them grave and irreparable injury" is enjoinable
as private respondents are left "with no speedy and adequate remedy at law" except the issuance of a
temporary mandatory injunction; (3) the NLRC is empowered under Article 218 (e) of the Labor Code not
only to restrain any actual or threatened commission of any or all prohibited or unlawful acts but also to
require the performance of a particular act in any labor dispute, which, if not restrained or performed
forthwith, may cause grave or irreparable damage to any party; and (4) the temporary power of the NLRC
was recognized by this Court in the case of Chemo-Technische Mfg., Inc. Employees Union, DFA,
et. al. vs. Chemo-Technische Mfg., Inc. [G.R. No. 107031, January 25, 1993].

On May 4, 1995, petitioner moved for reconsideration3 arguing that the NLRC erred:
1. . . . in granting a temporary injunction order when it has no jurisdiction to issue an
injunction or restraining order since this may be issued only under Article 218 of the Labor
Code if the case involves or arises from labor disputes;

2. . . . in granting a temporary injunction order when the termination of private respondents

have long been carried out;

3. . . . in ordering the reinstatement of private respondents on the basis of their mere

allegations, in violation of PAL's right to due process:

4. . . . in arrogating unto itself management prerogative to discipline its employees and

divesting the labor arbiter of its original and exclusive jurisdiction over illegal dismissal
cases;

5. . . . in suspending the effects of termination when such action is exclusively within the
jurisdiction of the Secretary of Labor;

6. . . . in issuing the temporary injunction in the absence of any irreparable or substantial

injury to both private respondents.

On May 31, 1995, the NLRC denied petitioner's motion for reconsideration, ruling:
"The respondent (now petitioner), for one, cannot validly claim that we cannot exercise our
injunctive power under Article 218 (e) of the Labor Code on the pretext that what we have
here is not a labor dispute as long as it concedes that as defined by law, a" (l) "Labor
Dispute" includes any controversy or matter concerning terms or conditions of
employment." If security of tenure, which has been breached by respondent and which,
precisely, is sought to be protected by our temporary mandatory injunction (the core of
controversy in this case) is not a "term or condition of employment", what then is?
xxx xxx xxx
Anent respondent's second argument . . . . Article 218 (e) of the Labor Code . . . empowered
the Commission not only to issue a prohibitory injunction, but a mandatory ("to require the
performance") one as well. Besides, as earlier discussed, we already exercised (on August
23, 1991) this temporary mandatory injunctive power in the case of "Chemo-Technische

13
 Mfg., Inc. Employees Union-DFA et. al. vs. Chemo-Technische Mfg., Inc., et. al." (supra)
and effectively enjoined one (1) month old dismissals by Chemo-Technische and that our
aforesaid mandatory exercise of injunctive power, when questioned through a petition
for certiorari, was sustained by the Third Division of the Supreme court per its Resolution
dated January 25, 1993.
xxx xxx xxx
Respondent's fourth argument that petitioner's remedy for their dismissals is "to file an
illegal dismissal case against PAL which cases are within the original and exclusive
jurisdiction of the Labor Arbiter' is ignorant. In requiring as a condition for the issuance of
a "temporary or permanent injunction" — "(4) That complainant has no adequate remedy
at law;" Article 218 (e) of the Labor Code clearly envisioned adequacy, and not
plain availability of a remedy at law as an alternative bar to the issuance of an injunction.
An illegal dismissal suit (which takes, on its expeditious side, three (3) years before it can
be disposed of) while available as a remedy under Article 217 (a) of the Labor Code, is
certainly not an "adequate; remedy at law, Ergo, it cannot as an alternative remedy, bar
our exercise of that injunctive power given us by Article 218 (e) of the Code.
xxx xxx xxx
Thus, Article 218 (e), as earlier discussed [which empowers this Commission "to require
the performance of a particular act" (such as our requiring respondent "to cease and desist
from enforcing" its whimsical memoranda of dismissals and "instead to reinstate petitioners
to their respective position held prior to their subject dismissals") in "any labor dispute
which, if not . . . performed forthwith, may cause grave and irreparable damage to any
party"] stands as the sole "adequate remedy at law" for petitioners here.

Finally, the respondent, in its sixth argument claims that even if its acts of dismissing
petitioners "may be great, still the same is capable of compensation", and that
consequently, "injunction need not be issued where adequate compensation at law could
be obtained". Actually, what respondent PAL argues here is that we need not interfere in
its whimsical dismissals of petitioners as, after all, it can pay the latter its backwages. . . .

But just the same, we have to stress that Article 279 does not speak alone of backwages
as an obtainable relief for illegal dismissal; that reinstatement as well is the concern of said
law, enforceable when necessary, through Article 218 (e) of the Labor Code (without need
of an illegal dismissal suit under Article 217 (a) of the Code) if such whimsical and
capricious act of illegal dismissal will "cause grave or irreparable injury to a party". . . . . 4

Hence, the present recourse.

Generally, injunction is a preservative remedy for the protection of one's substantive rights or
interest. It is not a cause of action in itself but merely a provisional remedy, an adjunct to a main suit. It is
resorted to only when there is a pressing necessity to avoid injurious consequences which cannot be
remedied under any standard of compensation. The application of the injunctive writ rests upon the
existence of an emergency or of a special reason before the main case be regularly heard. The essential
conditions for granting such temporary injunctive relief are that the complaint alleges facts which appear to
be sufficient to constitute a proper basis for injunction and that on the entire showing from the contending
parties, the injunction is reasonably necessary to protect the legal rights of the plaintiff pending the
litigation.5 Injunction is also a special equitable relief granted only in cases where there is no plain, adequate
and complete remedy at law.6

In labor cases, Article 218 of the Labor Code empowers the NLRC —
(e) To enjoin or restrain any actual or threatened commission of any or all prohibited or
unlawful acts or to require the performance of a particular act in any labor dispute which, if
not restrained or performed forthwith, may cause grave or irreparable damage to any party
or render ineffectual any decision in favor of such party; . . ." (Emphasis Ours)

14
 Complementing the above-quoted provision, Sec. 1, Rule XI of the New Rules of Procedure of the
NLRC, pertinently provides as follows:

Sec. 1. Injunction in Ordinary Labor Dispute. — A preliminary injunction or a restraining

order may be granted by the Commission through its divisions pursuant to the provisions
of paragraph (e) of Article 218 of the Labor Code, as amended, when it is established on
the bases of the sworn allegations in the petition that the acts complained of, involving or
arising from any labor dispute before the Commission, which, if not restrained or performed
forthwith, may cause grave or irreparable damage to any party or render ineffectual any
decision in favor of such party.
xxx xxx xxx
The foregoing ancillary power may be exercised by the Labor Arbiters only as an incident
to the cases pending before them in order to preserve the rights of the parties during the
pendency of the case, but excluding labor disputes involving strikes or lockout. 7 (Emphasis
Ours)

From the foregoing provisions of law, the power of the NLRC to issue an injunctive writ originates
from "any labor dispute" upon application by a party thereof, which application if not granted "may cause
grave or irreparable damage to any party or render ineffectual any decision in favor of such party."

The term "labor dispute" is defined as "any controversy or matter concerning terms and conditions
of employment or the association or representation of persons in negotiating, fixing. maintaining, changing,
or arranging the terms and conditions of employment regardless of whether or not the disputants stand in
the proximate relation of employers and employees." 8

The term "controversy" is likewise defined as "a litigated question; adversary proceeding in a court
of law; a civil action or suit, either at law or in equity; a justiciable dispute."9

A "justiciable controversy" is "one involving an active antagonistic assertion of a legal right on one
side and a denial thereof on the other concerning a real, and not a mere theoretical question or issue." 10

Taking into account the foregoing definitions, it is an essential requirement that there must first be
a labor dispute between the contending parties before the labor arbiter. In the present case, there is no
labor dispute between the petitioner and private respondents as there has yet been no complaint for illegal
dismissal filed with the labor arbiter by the private respondents against the petitioner.

The petition for injunction directly filed before the NLRC is in reality an action for illegal dismissal.
This is clear from the allegations in the petition which prays for; reinstatement of private respondents; award
of full backwages, moral and exemplary damages; and attorney's fees. As such, the petition should have
been filed with the labor arbiter who has the original and exclusive jurisdiction to hear and decide the
following cases involving all workers, whether agricultural or non-agricultural:

(1) Unfair labor practice;

(2) Termination disputes;
(3) If accompanied with a claim for reinstatement, those cases that workers may file
involving wages, rates of pay, hours of work and other terms and conditions of employment;
(4) Claims for actual, moral, exemplary and other forms of damages arising from the
employer-employee relations;
(5) Cases arising from any violation of Article 264 of this Code, including questions
involving the legality of strikes and lockouts; and
(6) Except claims for employees compensation, social security, medicare and maternity
benefits, all other claims arising from employer- employee relations, including those of
persons in domestic or household service, involving an amount exceeding five thousand
pesos (P5,000.00), whether or not accompanied with a claim for reinstatement. 11

15
 The jurisdiction conferred by the foregoing legal provision to the labor arbiter is both original and
exclusive, meaning, no other officer or tribunal can take cognizance of, hear and decide any of the cases
therein enumerated. The only exceptions are where the Secretary of Labor and Employment or the NLRC
exercises the power of compulsory arbitration, or the parties agree to submit the matter to voluntary
arbitration pursuant to Article 263 (g) of the Labor Code, the pertinent portions of which reads:

(g) When, in his opinion, there exists a labor dispute causing or likely to cause a strike or
lockout in an industry indispensable to the national interest, the Secretary of Labor and
Employment may assume jurisdiction over the dispute and decide it or certify the same to
the Commission for compulsory arbitration. Such assumption or certification shall have the
effect of automatically enjoining the intended or impending strike or lockout as specified in
the assumption or certification order. If one has already taken place at the time of
assumption or certification, all striking or locked out employees shall immediately resume
operations and readmit all workers under the same terms and conditions prevailing before
the strike or lockout. The Secretary of Labor and Employment or the Commission may seek
the assistance of law enforcement agencies to ensure compliance with this provision as
well as with such orders as he may issue to enforce the same.

On the other hand, the NLRC shall have exclusive appellate jurisdiction over all cases decided by
labor arbiters as provided in Article 217(b) of the Labor Code. In short, the jurisdiction of the NLRC in illegal
dismissal cases is appellate in nature and, therefore, it cannot entertain the private respondents' petition
for injunction which challenges the dismissal orders of petitioner. Article 218(e) of the Labor Code does not
provide blanket authority to the NLRC or any of its divisions to issue writs of injunction, considering that
Section 1 of Rule XI of the New Rules of Procedure of the NLRC makes injunction only an ancillary remedy
in ordinary labor disputes." 12

Thus, the NLRC exceeded its jurisdiction when it issued the assailed Order granting private
respondents' petition for injunction and ordering the petitioner to reinstate private respondents.

The argument of the NLRC in its assailed Order that to file an illegal dismissal suit with the labor
arbiter is not an "adequate" remedy since it takes three (3) years before it can be disposed of, is patently
erroneous. An "adequate" remedy at law has been defined as one "that affords relief with reference to the
matter in controversy, and which is appropriate to the particular circumstances of the case." 13 It is a remedy
which is equally, beneficial, speedy and sufficient which will promptly relieve the petitioner from the injurious
effects of the acts complained of. 14

Under the Labor Code, the ordinary and proper recourse of an illegally dismissed employee is to
file a complaint for illegal dismissal with the labor arbiter. 15 In the case at bar, private respondents
disregarded this rule and directly went to the NLRC through a petition for injunction praying that petitioner
be enjoined from enforcing its dismissal orders. In Lamb vs. Phipps, 16 we ruled that if the remedy is
specifically provided by law, it is presumed to be adequate. Moreover, the preliminary mandatory injunction
prayed for by the private respondents in their petition before the NLRC can also be entertained by the labor
arbiter who, as shown earlier, has the ancillary power to issue preliminary injunctions or restraining orders
as an incident in the cases pending before him in order to preserve the rights of the parties during the
pendency of the case. 17

Furthermore, an examination of private respondents' petition for injunction reveals that it has no
basis since there is no showing of any urgency or irreparable injury which the private respondents might
suffer. An injury is considered irreparable if it is of such constant and frequent recurrence that no fair and
reasonable redress can be had therefor in a court of law, 18 or where there is no standard by which their
amount can be measured with reasonable accuracy, that is, it is not susceptible of mathematical
computation. It is considered irreparable injury when it cannot be adequately compensated in damages due
to the nature of the injury itself or the nature of the right or property injured or when there exists no certain
pecuniary standard for the measurement of damages. 19

16
 In the case at bar, the alleged injury which private respondents stand to suffer by reason of their
alleged illegal dismissal can be adequately compensated and therefore, there exists no "irreparable injury,"
as defined above which would necessitate the issuance of the injunction sought for. Article 279 of the Labor
Code provides that an employee who is unjustly dismissed from employment shall be entitled to
reinstatement, without loss of seniority rights and other privileges, and to the payment of full backwages,
inclusive of allowances, and to other benefits or their monetary equivalent computed from the time his
compensation was withheld from him up to the time of his actual reinstatement.

The ruling of the NLRC that the Supreme Court upheld its power to issue temporary mandatory
injunction orders in the case of Chemo-Technische Mfg., Inc. Employees Union-DFA, et. al. vs. Chemo-
Technische Mfg., Inc. et. al., docketed as G.R. No. 107031, is misleading. As correctly argued by the
petitioner, no such pronouncement was made by this Court in said case. On January 25, 1993, we issued
a Minute Resolution in the subject case stating as follows:

Considering the allegations contained, the issues raised and the arguments adduced in
the petition for certiorari, as well as the comments of both public and private respondents
thereon, and the reply of the petitioners to private respondent's motion to dismiss the
petition, the Court Resolved to DENY the same for being premature.

It is clear from the above resolution that we did not in anyway sustain the action of the NLRC in
issuing such temporary mandatory injunction but rather we dismissed the petition as the NLRC had yet to
rule upon the motion for reconsideration filed by petitioner. Thus, the minute resolution denying the petition
for being prematurely filed.

Finally, an injunction, as an extraordinary remedy, is not favored in labor law considering that it
generally has not proved to be an effective means of settling labor disputes. 20 It has been the policy of the
State to encourage the parties to use the non-judicial process of negotiation and compromise, mediation
and arbitration. 21 Thus, injunctions may be issued only in cases of extreme necessity based on legal
grounds clearly established, after due consultations or hearing and when all efforts at conciliation are
exhausted which factors, however, are clearly absent in the present case.

WHEREFORE, the petition is hereby GRANTED. The assailed Orders dated April 3, 1995 and May
31, 1995, issued by the National Labor Relations Commission (First Division), in NLRC NCR IC No. 000563-
95, are hereby REVERSED and SET ASIDE. SO ORDERED.

17