SAN MIGUEL CORPORATION v.

NATIONAL LABOR RELATIONS COMMISSION

G.R. No. 80774
May 31, 1988
Feliciano, J.

FACTS: In line with an Innovation Program sponsored by petitioner San Miguel Corporation, private
respondent Rustico Vega submitted on an innovation proposal entitled "Modified Grande Pasteurization
Process," and was supposed to eliminate certain alleged defects in the quality and taste of the product
"San Miguel Beer Grande"

Petitioner Corporation, however, did not find the aforequoted proposal acceptable and consequently
refused Mr. Vega's subsequent demands for a cash award under the Innovation Program. Thereafter, a
Complaint was filed against petitioner Corporation. Private respondent alleged there that his proposal
had been accepted and claimed entitlement to a cash prize award offered under the Innovation
Program.

In an Answer, petitioner Corporation denied having approved or adopted Mr. Vega's proposal as part of
the Corporation's brewing procedure. Petitioner further alleged that the Labor Arbiter had no
jurisdiction, Mr. Vega having improperly bypassed the grievance machinery procedure prescribed under
a then existing collective bargaining agreement.

ISSUE: Whether the Labor Arbiter and the Commission has jurisdiction over the money claim filed by
private respondent?

HELD: No, the Labor Arbiter and the Commission has no jurisdiction over the money claim of Vega. The
court ruled that the money claim of private respondent Vega arose out of or in connection with his
employment with petitioner. However, it is not enough to bring Vega’s money claim within the original
and exclusive jurisdiction of Labor Arbiters.

The SMC Innovation Program was essentially an invitation from petitioner Corporation to its employees
to submit innovation proposals. Such undertaking, though unilateral in origin, could nonetheless ripen
into an enforceable contractual obligation on the part of petitioner Corporation under certain
circumstances. Thus, whether or not an enforceable contract, had arisen between petitioner
Corporation and private respondent Vega in the circumstances of this case, and if so, whether or not it
had been breached, are pre- eminently legal questions, questions not to be resolved by referring to
labor legislation and having nothing to do with wages or other terms and conditions of employment, but
rather having recourse to our law on contracts.
 SANYO PHILIPPINES WORKERS UNION-PSSLU v. HON. POTENCIANO S. CANIZARES
G.R. No. 101619
July 8, 1992
Medialdea, J.

FACTS: PSSLU had an existing CBA with Sanyo Philippines Inc.. The same CBA contained a union security
clause. In a letter, PSSLU, through its national president, informed the management of Sanyo that the
following employees were notified that their membership with PSSLU were cancelled for anti-union,
activities. The same letter informed Sanyo that the same employees refused to submit themselves to
the union's grievance investigation committee.

As per request of the union's letter to management, should the listed employees fail to appeal the
decision of the union for dismissal, said listed employees shall be considered dismissed from the
company. The company received no information on whether or not said employees appealed to PSSLU.
Hence, it considered them dismissed as of March 23, 1991.

Thereafter, the dismissed employees filed a complaint with the NLRC for illegal dismissal. PSSLU filed a
motion to dismiss the complaint alleging that the Labor Arbiter was without jurisdiction over the case,
relying on Article 217 which provides that cases arising from the interpretation or implementation of the
collective bargaining agreements shall be disposed of by the labor arbiter by referring the same to the
grievance machinery and voluntary arbitration.

The complainants opposed the motion to dismiss complaint on the ground that the NLRC Labor Arbiter
had jurisdiction over the case which was a termination dispute pursuant to Article 217 (2) of the Labor
Code.

ISSUE: Whether the Labor Arbiter have jurisdiction in cases of termination disputes?

HELD: Yes. Under paragraph (c) of Article 217 which provides that cases arising from the interpretation
or implementation of collective bargaining agreements and those arising from the interpretation and
enforcement of company personnel policies shall be disposed of by the Labor Arbiter by referring the
same to the grievance machinery and voluntary arbitration as may be provided in said agreements.

The reference to a Grievance Machinery and Voluntary Arbitrators for the adjustment or resolution of
grievances arising from the interpretation or implementation of their CBA and those arising from the
interpretation or enforcement of company personnel policies is mandatory.

In the instant case, however, we hold that the Labor Arbiter and not the Grievance Machinery provided
for in the CBA has the jurisdiction to hear and decide the complaints of the private respondents. While it
appears that the dismissal of the private respondents was made upon the recommendation of PSSLU
pursuant to the union security clause provided in the CBA, We are of the opinion that these facts do not
come within the phrase "grievances arising from the interpretation or implementation of their Collective
Bargaining Agreement and those arising from the interpretation or enforcement of company personnel
policies," the jurisdiction of which pertains to the Grievance Machinery or thereafter, to a voluntary
arbitrator or panel of voluntary arbitrators.

It is further provided in said article that the parties to a CBA shall name or designate their respective
representatives to the grievance machinery and if the grievance is not settled in that level, it shall
automatically be referred to voluntary arbitrators designated in advance by the parties. Hence, only
disputes involving the union and the company shall be referred to the grievance machinery or voluntary
arbitrators.

In the instant case, both the union and the company are united or have come to an agreement regarding
the dismissal of private respondents. No grievance between them exists which could be brought to a
grievance machinery. The problem or dispute in the present case is between the union and the company
on the one hand and some union and non-union members who were dismissed, on the other hand. The
dispute has to be settled before an impartial body. The grievance machinery with members designated
by the union and the company cannot be expected to be impartial against the dismissed employees.
Due process demands that the dismissed workers grievances be ventilated before an impartial body.
Since there has already been an actual termination, the matter falls within the jurisdiction of the Labor
Arbiter.
 SAN MIGUEL CORPORATION EMPLOYEES UNION-PTGWO v. HON. JESUS G. BERSAMIRA
G.R. No. 87700
June 13, 1990
Melencio-Herrera, J.

FACTS: SanMig entered into contracts for merchandising services with Lipercon and D'Rite. In said
contracts, it was expressly understood and agreed that the workers employed by the contractors were
to be paid by the latter and that none of them were to be deemed employees or agents of SanMig.
There was to be no employer-employee relation between the contractors and/or its workers.

The Union advised SanMig that some Lipercon and D'Rite workers had signed up for union membership
and sought the regularization of their employment with SMC. The Union alleged that this group of
employees, while appearing to be contractual workers supposedly independent contractors, have been
continuously working for SanMig for a period ranging from six (6) months to fifteen (15) years and that
their work is neither casual nor seasonal as they are performing work or activities necessary or desirable
in the usual business or trade of SanMig. Thus, it was contended that there exists a "labor-only"
contracting situation. It was then demanded that the employment status of these workers be
regularized.

On 12 January 1989 on the ground that it had failed to receive any favorable response from SanMig, the
Union filed a notice of strike for unfair labor practice, CBA violations, and union.

ISSUE: Whether the labor courts correctly assumed jurisdiction over the present controversy?

HELD: Yes, petitioners take the position that it is beyond dispute that the controversy involves out of a
labor dispute and is directly connected with the cases pending with the NCMB-DOLE, and is thus beyond
the ambit of the public respondent's jurisdiction. That the acts complained of are within the
competence of labor tribunals, is beyond question.

As the case is indisputably linked with a labor dispute, jurisdiction belongs to the labor tribunals. Under
Article 217 of the Labor Code, prior to its amendment by R.A. No. 6715 on 21 March 1989, since the suit
below was instituted on 6 March 1989, Labor Arbiters have original and exclusive jurisdiction to hear
and decide the following cases involving all workers.

The claim of SanMig that the action below is for damages under Articles 19, 20 and 21 of the Civil Code
would not suffice to keep the case within the jurisdictional boundaries of regular Courts. We recognize
the proprietary right of SanMig to exercise an inherent management prerogative and its best business
judgment to determine whether it should contract out the performance of some of its work to
independent contractors. However, the rights of all workers to self-organization, collective bargaining
and negotiations, and peaceful concerted activities, including the right to strike in accordance with law
equally call for recognition and protection.