G.R. No. 128024. May 9, 2000.

BEBIANO M. BAÑEZ, Petitioner, v. HON. DOWNEY C. VALDEVILLA and ORO MARKETING, INC., Respondents.

GONZAGA-REYES, J.:

The orders of respondent judge 1 dated June 20, 1996 and October 16, 1996, taking jurisdiction over an action for
damages filed by an employer against its dismissed employee, are assailed in this petition for certiorari under Rule 65 of
the Rules of Court for having been issued in grave abuse of discretion.

Petitioner was the sales operations manager of private respondent in its branch in Iligan City. In 1993, private respondent
"indefinitely suspended" petitioner and the latter filed a complaint for illegal dismissal with the National Labor Relations
Commission ("NLRC") in Iligan City. In a decision dated July 7, 1994, Labor Arbiter Nicodemus G. Palangan found
petitioner to have been illegally dismissed and ordered the payment of separation pay in lieu of reinstatement, and of
backwages and attorney’s fees. The decision was appealed to the NLRC, which dismissed the same for having been filed
out of time. 2 Elevated by petition for certiorari before this Court, the case was dismissed on technical grounds 3;
however, the Court also pointed out that even if all the procedural requirements for the filing of the petition were met, it
would still be dismissed for failure to show grave abuse of discretion on the part of the NLRC.chanrobles virtua| |aw |
ibrary

On November 13, 1995, private respondent filed a complaint for damages before the Regional Trial Court ("RTC") of
Misamis Oriental, docketed as Civil Case No. 95-554, which prayed for the payment of the following:chanrob1es virtual
1aw library

a. P709,217.97 plus 12% interest as loss of profit and/or unearned income of three years;

b. P119,700.00 plus 12% interest as estimated cost of supplies, facilities, properties, space, etc. for three years;

c. P5,000.00 as initial expenses of litigation; and

d. P25,000.00 as attorney’s fees. 4

On January 30, 1996, petitioner filed a motion to dismiss the above complaint. He interposed in the court below that the
action for damages, having arisen from an employer-employee relationship, was squarely under the exclusive original
jurisdiction of the NLRC under Article 217(a), paragraph 4 of the Labor Code and is barred by reason of the final judgment
in the labor case. He accused private respondent of splitting causes of action, stating that the latter could very well have
included the instant claim for damages in its counterclaim before the Labor Arbiter. He also pointed out that the civil
action of private respondent is an act of forum-shopping and was merely resorted to after a failure to obtain a favorable
decision with the NLRC.

Ruling upon the motion to dismiss, respondent judge issued the herein questioned Order, which summarized the basis for
private respondent’s action for damages in this manner:chanrob1es virtual 1aw library

Paragraph 5 of the complaint alleged that the defendant violated the plaintiff’s policy re: His business in his branch at
Iligan City wherein defendant was the Sales Operations Manager, and paragraph 7 of the same complaint briefly narrated
the modus operandi of defendant, quoted herein: Defendant canvassed customers personally or through salesmen of
plaintiff which were hired or recruited by him. If said customer decided to buy items from plaintiff on installment basis,
defendant, without the knowledge of said customer and plaintiff, would buy the items on cash basis at ex-factory price, a
privilege not given to customers, and thereafter required the customer to sign promissory notes and other documents using
the name and property of plaintiff, purporting that said customer purchased the items from plaintiff on installment basis.
Thereafter, defendant collected the installment payments either personally or through Venus Lozano, a Group Sales Manager
of plaintiff but also utilized by him as secretary in his own business for collecting and receiving of installments, purportedly
for the plaintiff but in reality on his own account or business. The collection and receipt of payments were made inside the
Iligan City branch using plaintiff’s facilities, property and manpower. That accordingly plaintiff’s sales decreased and
reduced to a considerable extent the profits which it would have earned. 5

In declaring itself as having jurisdiction over the subject matter of the instant controversy, respondent court
stated:chanrob1es virtual 1aw library

A perusal of the complaint which is for damages does not ask for any relief under the Labor Code of the Philippines. It
seeks to recover damages as redress for defendant’s breach of his contractual obligation to plaintiff who was damaged
and prejudiced. The Court believes such cause of action is within the realm of civil law, and jurisdiction over the
controversy belongs to the regular courts.

While seemingly the cause of action arose from employer- employee relations, the employer’s claim for damages is
grounded on the nefarious activities of defendant causing damage and prejudice to plaintiff as alleged in paragraph 7 of
the complaint. The Court believes that there was a breach of a contractual obligation, which is intrinsically a civil dispute.
The averments in the complaint removed the controversy from the coverage of the Labor Code of the Philippines and
brought it within the purview of civil law. (Singapore Airlines, Ltd. Vs. Pañ o, 122 SCRA 671.) . . . 6

Petitioner’s motion for reconsideration of the above Order was denied for lack of merit on October 16, 1996. Hence, this
petition.

Acting on petitioner’s prayer, the Second Division of this Court issued a Temporary Restraining Order ("TRO") on March
5, 1997, enjoining respondents from further proceeding with Civil Case No. 95-554 until further orders from the Court.
By way of assignment of errors, the petition reiterates the grounds raised in the Motion to Dismiss dated January 30,
1996, namely, lack of jurisdiction over the subject matter of the action, res judicata, splitting of causes of action, and
forum-shopping. The determining issue, however, is the issue of jurisdiction.

Article 217(a), paragraph 4 of the Labor Code, which was already in effect at the time of the filing of this case,
reads:chanrobles.com.ph:red

ARTICLE 217. Jurisdiction of Labor Arbiters and the Commission. — (a) Except as otherwise provided under this Code,
the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days after
the submission of the case by the parties for decision without extension, even in the absence of stenographic notes, the
following cases involving all workers, whether agricultural or non-agricultural:chanrob1es virtual 1aw library

x x x

4. Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations;

x x x

The above provisions are a result of the amendment by Section 9 of Republic Act ("R.A.") No. 6715, which took effect on
March 21, 1989, and which put to rest the earlier confusion as to who between Labor Arbiters and regular courts had
jurisdiction over claims for damages as between employers and employees.

It will be recalled that years prior to R.A. 6715, jurisdiction over all money claims of workers, including claims for
damages, was originally lodged with the Labor Arbiters and the NLRC by Article 217 of the Labor Code. 7 On May 1, 1979,
however, Presidential Decree ("P.D.") No. 1367 amended said Article 217 to the effect that "Regional Directors shall not
indorse and Labor Arbiters shall not entertain claims for moral or other forms of damages." 8 This limitation in
jurisdiction, however, lasted only briefly since on May 1, 1980, P.D. No. 1691 nullified P.D. No. 1367 and restored Article
217 of the Labor Code almost to its original form. Presently, and as amended by R.A. 6715, the jurisdiction of Labor
Arbiters and the NLRC in Article 217 is comprehensive enough to include claims for all forms of damages "arising from
the employer-employee relations" .

Whereas this Court in a number of occasions had applied the jurisdictional provisions of Article 217 to claims for damages
filed by employees, 9 we hold that by the designating clause "arising from the employer-employee relations" Article 217
should apply with equal force to the claim of an employer for actual damages against its dismissed employee, where the
basis for the claim arises from or is necessarily connected with the fact of termination, and should be entered as a
counterclaim in the illegal dismissal case.

Even under Republic Act No. 875 (the "Industrial Peace Act", now completely superseded by the Labor Code),
jurisprudence was settled that where the plaintiff’s cause of action for damages arose out of, or was necessarily
intertwined with, an alleged unfair labor practice committed by the union, the jurisdiction is exclusively with the (now
defunct) Court of Industrial Relations, and the assumption of jurisdiction of regular courts over the same is a nullity. 10
To allow otherwise would be "to sanction split jurisdiction, which is prejudicial to the orderly administration of justice."
11 Thus, even after the enactment of the Labor Code, where the damages separately claimed by the employer were
allegedly incurred as a consequence of strike or picketing of the union, such complaint for damages is deeply rooted from
the labor dispute between the parties, and should be dismissed by ordinary courts for lack of jurisdiction. As held by this
Court in National Federation of Labor v. Eisma, 127 SCRA 419:chanrob1es virtual 1aw library

Certainly, the present Labor Code is even more committed to the view that on policy grounds, and equally so in the
interest of greater promptness in the disposition of labor matters, a court is spared the often onerous task of determining
what essentially is a factual matter, namely, the damages that may be incurred by either labor or management as a result
of disputes or controversies arising from employer-employee relations.

There is no mistaking the fact that in the case before us, private respondent’s claim against petitioner for actual damages
arose from a prior employer-employee relationship. In the first place, private respondent would not have taken issue with
petitioner’s "doing business of his own" had the latter not been concurrently its employee. Thus, the damages alleged in
the complaint below are: first, those amounting to lost profits and earnings due to petitioner’s abandonment or neglect of
his duties as sales manager, having been otherwise preoccupied by his unauthorized installment sale scheme; and second,
those equivalent to the value of private respondent’s property and supplies which petitioner used in conducting his
"business" .

Second, and more importantly, to allow respondent court to proceed with the instant action for damages would be to
open anew the factual issue of whether petitioner’s installment sale scheme resulted in business losses and the
dissipation of private respondent’s property. This issue has been duly raised and ruled upon in the illegal dismissal case,
where private respondent brought up as a defense the same allegations now embodied in his complaint, and presented
evidence in support thereof. The Labor Arbiter, however, found to the contrary — that no business losses may be
attributed to petitioner as in fact, it was by reason of petitioner’s installment plan that the sales of the Iligan branch of
private respondent (where petitioner was employed) reached its highest record level to the extent that petitioner was
awarded the 1989 Field Sales Achievement Award in recognition of his exceptional sales performance, and that the
installment scheme was in fact with the knowledge of the management of the Iligan branch of private Respondent. 12 In
other words, the issue of actual damages has been settled in the labor case, which is now final and executory.
Still on the prospect of re-opening factual issues already resolved by the labor court, it may help to refer to that period
from 1979 to 1980 when jurisdiction over employment-predicated actions for damages vacillated from labor tribunals to
regular courts, and back to labor tribunals. In Ebon v. de Guzman, 113 SCRA 52, 13 this Court discussed:chanrob1es
virtual 1aw library

The lawmakers in divesting the Labor Arbiters and the NLRC of jurisdiction to award moral and other forms of damages
in labor cases could have assumed that the Labor Arbiters’ position-paper procedure of ascertaining the facts in dispute
might not be an adequate tool for arriving at a just and accurate assessment of damages, as distinguished from backwages
and separation pay, and that the trial procedure in the Court of First Instance would be a more effective means of
determining such damages. . .

Evidently, the lawmaking authority had second thoughts about depriving the Labor Arbiters and the NLRC of the
jurisdiction to award damages in labor cases because that setup would mean duplicity of suits, splitting the cause of
action and possible conflicting findings and conclusions by two tribunals on one and the same claim.chanrobles.com :
virtual law library

So, on May 1, 1980, Presidential Decree No. 1691 (which substantially reenacted Article 217 in its original form) nullified
Presidential Decree No. 1367 and restored to the Labor Arbiter and the NLRC their jurisdiction to award all kinds of
damages in cases arising from employer-employee relations . . . (Emphasis supplied)

Clearly, respondent court’s taking jurisdiction over the instant case would bring about precisely the harm that the
lawmakers sought to avoid in amending the Labor Code to restore jurisdiction over claims for damages of this nature to
the NLRC.

This is, of course, to distinguish from cases of actions for damages where the employer-employee relationship is merely
incidental and the cause of action proceeds from a different source of obligation. Thus, the jurisdiction of regular courts
was upheld where the damages, claimed for were based on tort 14 , malicious prosecution 15 , or breach of contract, as
when the claimant seeks to recover a debt from a former employee 16 or seeks liquidated damages in enforcement of a
prior employment contract. 17

Neither can we uphold the reasoning of respondent court that because the resolution of the issues presented by the
complaint does not entail application of the Labor Code or other labor laws, the dispute is intrinsically civil. Article 217(a)
of the Labor Code, as amended, clearly bestows upon the Labor Arbiter original and exclusive jurisdiction over claims for
damages arising from employer-employee relations — in other words, the Labor Arbiter has jurisdiction to award not
only the reliefs provided by labor laws, but also damages governed by the Civil Code. 18

Thus, it is obvious that private respondent’s remedy is not in the filing of this separate action for damages, but in properly
perfecting an appeal from the Labor Arbiter’s decision. Having lost the right to appeal on grounds of untimeliness, the
decision in the labor case stands as a final judgment on the merits, and the instant action for damages cannot take the
place of such lost appeal.

Respondent court clearly having no jurisdiction over private respondent’s complaint for damages, we will no longer pass
upon petitioner’s other assignments of error.

WHEREFORE, the Petition is GRANTED, and the complaint in Civil Case No. 95-554 before Branch 39 of the Regional Trial
Court of Misamis Oriental is hereby DISMISSED. No pronouncement as to costs.

SO ORDERED.
G.R. No. L-65377 May 28, 1984
MOLAVE MOTOR SALES, INC., petitioner, vs. HON. CRISPIN C. LARON, Presiding Judge of the Regional Trial Court of
Pangasinan, Branch XLIV and PEDRO GEMENIANO, respondents.

Nuelino B. Ranchez for petitioner.

Santos Areola for private respondent.

MELENCIO-HERRERA, J.:

Respondent Judge, presiding Branch XLIV of the Regional Trial Court in Dagupan City, had dismissed the case below for
lack of jurisdiction and had denied reconsideration for lack of merit.

Petitioner, PLAINTIFF in the case below, is a corporation engaged in the sale and repair of motor vehicles in Dagupan City.
Private respondent, the DEFENDANT in the case below, was, or is, the sales manager of PLAINTIFF. Whether or not there
was still a relationship of employer and employee between the parties when the complaint was filed is an unsettled
question which need not be resolved in this instance.

Alleging that DEFENDANT was a former employee, PLAINTIFF had sued him, on March 22, 1983, for payment of accounts
pleaded as follows:

That during his incumbency as such the defendant caused and without authority from the plaintiff incurred accounts with
the remaining balances in the total sum of P33,890.38 excluding interests, arising from

the purchases of vehicles and parts,

repair jobs of his personal cars and

cash advances,

faithful reproductions of the Vehicle Invoice, Debit Memos, Deed of Absolute Sale, Repair Orders, Charge Invoices,
Vouchers, Promissory Notes, Acknowledgement Letter and Statement of Account, hereto attached and marked as Annexes
"A", "B", "C", "D", "E", "F", "G", "H", "I", "J", "K", "L", "M", and "N" respectively and the contents of which being herein
additionally pleaded and made integral parts hereof; (Emphasis supplied)

In his Answer, DEFENDANT denied

... that he incurred any unpaid unauthorized accounts with the plaintiff in the total sum of P33,890.38 excluding interests
therefor, and,

specifically denies under oath that the annexed Vehicle Invoice, Debits Memos Deed of Absolute Sale, Repair Orders,
Charge Invoices, Vouchers, Promissory Notes, Acknowledgement Letter and Statement of Account

have remained unpaid as in fact the truth of the matter is as follows, to wit: (Emphasis supplied)

DEFENDANT further alleged in a counterclaim that he should still be considered an employee of PLAINTIFF inasmuch as
there has been no application for clearance in regards to his separation.

At the pre-trial conference, the DEFENDANT raised the question of jurisdiction of the Court stating that PLAINTIFF's
complaint arose out of employer-employee relationship, and he subsequently moved for dismissal. It was then when
respondent Judge dismissed the case finding that the sum of money and damages sued upon arose from employer-
employee relationship and that jurisdiction belonged to the Labor Arbiter and the NLRC.

Before the enactment of BP Blg. 227 on June 1, 1982, Labor Arbiters, under paragraph 5 of Article 217 of the Labor Code
had jurisdiction over "all other cases arising from employer-employee relation, unless expressly excluded by this Code."
Even then, the principle followed by this Court was that, although a controversy is between an employer and an employee,
the Labor Arbiters have no jurisdiction if the Labor Code is not involved. In Medina vs. Castro-Bartolome, 116 SCRA 597,
604, in negating jurisdiction of the Labor Arbiter, although the parties were an employer and two employees, Mr. Justice
Abad Santos stated:

The pivotal question to Our mind is whether or not the Labor Code has any relevance to the reliefs sought by the
plaintiffs. For if the Labor Code has no relevance, any discussion concerning the statutes amending it and whether or not
they have retroactive effect is unnecessary.

It is obvious from the complaint that the plaintiffs have not alleged any unfair labor practice. Theirs is a simple action for
damages for tortious acts allegedly committed by the defendants. Such being the case, the governing statute is the Civil
Code and not the Labor Code. It results that the orders under review are based on a wrong premise.

And in Singapore Airlines Limited vs. Pañ o, 122 SCRA 671, 677, the following was said:

Stated differently, petitioner seeks protection under the civil laws and claims no benefits under the Labor Code. The
primary relief sought is for liquidated damages for breach of a contractual obligation. The other items demanded are not
labor benefits demanded by workers generally taken cognizance of in labor disputes, such as payment of wages, overtime
compensation or separation pay. The items claimed are the natural consequences flowing from breach of an obligation,
intrinsically a civil dispute.

In the case below, PLAINTIFF had sued for monies loaned to DEFENDANT, the cost of repair jobs made on his personal
cars, and for the purchase price of vehicles and parts sold to him. Those accounts have no relevance to the Labor Code.
The cause of action was one under the civil laws, and it does not breach any provision of the Labor Code or the contract of
employment of DEFENDANT. Hence, the civil courts, not the Labor Arbiters and the NLRC, should have jurisdiction.

BP Blg. 227 has amended Article 217 of the Labor Code to read as follows:

ART. 217. Jurisdiction of Labor Arbiters and the Commission. — (a) The Labor Arbiters shall have the original and
exclusive jurisdiction to hear and decide within thirty (30) working days after submission of the case by the parties for
decision, the following cases involving all workers, whether agricultural or non-agricultural:

1. Unfair labor practice cases;

2. Those that ( involve) WORKERS MAY FILE INVOLVING wages, hours of work and other terms and conditions of
employment;

3. All money claims of workers, including those based on non-payment or underpayment of wages, overtime
compensation, separation pay and other benefits provided by law or appropriate agreement, except claims for employees
compensation, social security, and maternity benefits;

4. Cases involving household services; and

5. CASES ARISING FROM ANY VIOLATION OF ARTICLE 265 OF THIS CODE, INCLUDING QUESTIONS INVOLVING THE
LEGALITY OF STRIKES AND LOCKOUTS.

6. All other claims arising from employer-employee relations, unless expressly excluded by this Code]. (Italics and
bracketed portions indicate the deletions, while the amendments introduced are capitalized).

The dismissal of the case below on the ground that the sum of money and damages sued upon arose from employer-
employee relationship was erroneous. Claims arising from employer-employee relations are now limited to those
mentioned in paragraphs 2 and 3 of Article 217. There is no difficulty on our part in stating that those in the case below
should not be faulted for not being aware of the last amendment to the frequently changing Labor Code.

The claim of DEFENDANT that he should still be considered an employee of PLAINTIFF, because the latter has not sought
clearance for his separation from the service, will not affect the jurisdiction of respondent Judge to resolve the complaint
of PLAINTIFF. DEFENDANT could still be liable to PLAINTIFF for payment of the accounts sued for even if he remains an
employee of PLAINTIFF.

WHEREFORE, the Petition is granted, and respondent Judge is hereby ordered to take cognizance of the case below and to
render judgment therein accordingly.

No costs.

SO ORDERED.
G.R. No. 141020 June 12, 2008
CASINO LABOR ASSOCIATION, petitioner, vs. COURT OF APPEALS, PHIL. CASINO OPERATORS CORPORATION
(PCOC) and PHIL. SPECIAL SERVICES CORPORATION (PSSC), respondents.

PUNO, C.J.:

This petition for certiorari1 assails the Decision2 and Resolution3 of the Court of Appeals (CA) in CA-G.R. SP No. 50826.
The CA dismissed the petition for certiorari filed by the petitioner against the First Division of the National Labor
Relations Commission (NLRC) and denied petitioner's motion for reconsideration.

The series of events which ultimately led to the filing of the petition at bar started with the consolidated cases4 filed by
the petitioner labor union with the Arbitration Branch of the NLRC. In an Order5 dated 20 July 1987, the Labor Arbiter
dismissed the consolidated cases for lack of jurisdiction over the respondents therein, Philippine Amusement and Gaming
Corporation (PAGCOR) and Philippine Casino Operators Corporation (PCOC).

On appeal to the NLRC, the Commission en banc issued a Resolution6 dated 15 November 1988, which dismissed the
separate appeals filed by the petitioner on the ground that the NLRC has no jurisdiction over PAGCOR.

Petitioner then elevated the case to this Court, via a petition for review on certiorari,7 entitled Casino Labor Association v.
National Labor Relations Commission, Philippine Amusement & Gaming Corporation, Philippine Casino Operators
Corporation and Philippine Special Services Corporation and docketed as G.R. No. 85922. In a Resolution8 dated 23
January 1989, the Third Division of the Court dismissed the petition for failure of the petitioner to show grave abuse of
discretion on the part of the NLRC.

Petitioner filed a motion for reconsideration, but the same was denied with finality in a 15 March 1989 Resolution.9 The
Resolution states, in part:

x x x Any petitions brought against private companies will have to be brought before the appropriate agency or office of
the Department of Labor and Employment.

Based solely on that statement, petitioner filed a Manifestation/Motion10 with the NLRC praying that the records of the
consolidated cases be "remanded to the Arbitration Branch for proper prosecution and/or disposition thereof against
private respondents Philippine Casino Operators Corporation (PCOC) and Philippine Special Services Corporation
(PSSC)."

Acting on the Manifestation/Motion, the NLRC First Division issued an Order11 dated 30 June 1989, which granted the
motion and ordered that the records of the cases be forwarded to the Arbitration Branch for further proceedings.

Respondents PCOC and PSSC filed a motion for reconsideration. In an Order12 dated 22 July 1994, the NLRC First Division
granted the motion, set aside the 30 June 1989 Order for having been issued without legal basis, and denied with finality
the petitioner's Manifestation/Motion. Petitioner's motion for reconsideration was likewise denied in a Resolution13
dated 28 November 1997.

Petitioner filed a petition for certiorari14 with this Court asserting that the NLRC First Division committed grave abuse of
discretion in ignoring the mandate of G.R. No. 85922. Petitioner argued that, with the statement "(a)ny petitions brought
against private companies will have to be brought before the appropriate agency or office of the Department of Labor and
Employment," this Court laid down the law of the case and mandated that petitions against respondents PCOC and PSSC
should be brought before the NLRC. By way of resolution,15 this Court referred the case to the CA in accordance with the
ruling in St. Martin Funeral Homes v. NLRC.16

On 22 June 1999, the CA rendered its Decision dismissing the petition for certiorari. The CA found no grave abuse of
discretion on the part of the NLRC First Division when it issued: (a) the 22 July 1994 Order, which set aside its 30 June
1989 Order remanding the case to the Arbitration Branch for further proceedings; and (b) the 28 November 1998
Resolution, which denied petitioner's motion for reconsideration. Petitioner filed a motion for reconsideration, which the
CA denied in its 6 December 1999 Resolution.

Hence, the instant petition for certiorari in which the petitioner raises this sole issue:

CAN THE COURT OF APPEALS IGNORE THE MANDATE OF THE HONORABLE SUPREME COURT'S RESOLUTION IN G.R.
85922, THAT PETITIONS AGAINST PRIVATE RESPONDENTS PCOC AND PSSC SHOULD BE TRIED BY THE COMMISSION
(NLRC) THRU ITS ARBITRATION BRANCH?

To determine whether the CA acted with grave abuse of discretion correctable by certiorari, it is necessary to resolve one
core issue: whether the Supreme Court, in G.R. No. 85922, mandated that the NLRC assume jurisdiction over the cases
filed against PCOC and PSSC.

The resolution of the case at bar hinges on the intended meaning of the Third Division of the Court when it stated in its 15
March 1989 Resolution in G.R. No. 85922, viz:

x x x Any petitions brought against private companies will have to be brought before the appropriate agency or office of
the Department of Labor and Employment.
Petitioner considers the foregoing statement as a legal mandate warranting the remand of the consolidated labor cases to
the Arbitration Branch of the NLRC for further proceedings against respondents PCOC and PSSC.

We do not agree.

A court decision must be read as a whole. With regard to interpretation of judgments, Republic v. De Los Angeles stated:

As a general rule, judgments are to be construed like other written instruments. The determinative factor is the intention
of the court, as gathered from all parts of the judgment itself. In applying this rule, effect must be given to that which is
unavoidably and necessarily implied in a judgment, as well as to that which is expressed in the most appropriate
language. Such construction should be given to a judgment as will give force and effect to every word of it, if possible, and
make it as a whole consistent, effective and reasonable.17

Hence, a close scrutiny of the full text of the 23 January and 15 March 1989 Resolutions in G.R. No. 85922 sheds much
needed light. In the first Resolution, the Third Division of this Court dismissed the petitioner's case in this wise:

The issue in this case is whether or not the National Labor Relations Commission has jurisdiction over employee-
employer problems in the Philippine Amusement and Gaming Corporation (PAGCOR), the Philippine Casino Operators
Corporation (PCOC), and the Philippine Special Services Corporation (PSSC).

The present Constitution specifically provides in Article IX B, Section 2(1) that "the civil service embraces all branches,
subdivisions, instrumentalities, and agencies of the Government, including government-owned or controlled corporations
with original charters." (Emphasis supplied)

There appears to be no question from the petition and its annexes that the respondent corporations were created by an
original charter, P.D. No. 1869 in relation to P.D. Nos. 1067-A, 1067-C, 1399 and 1632.

In the recent case of National Service Corporation, et al. v. Honorable Third Division, National Labor Relations
Commission, et al. (G.R. No. 69870, November 29, 1988), this Court ruled that subsidiary corporations owned by
government corporations like the Philippine National Bank but which have been organized under the General
Corporation Code are not governed by Civil Service Law. They fall under the jurisdiction of the Department of Labor and
Employment and its various agencies. Conversely, it follows that government corporations created under an original
charter fall under the jurisdiction of the Civil Service Commission and not the Labor Department.

Moreover, P.D. 1869, Section 18, specifically prohibits formation of unions among casino employees and exempts them
from the coverage of Labor Code provisions. Under the new Constitution, they may now form unions but subject to the
laws passed to regulate unions in offices and corporations governed by the Civil Service Law.

CONSIDERING the failure of the petitioner to show grave abuse of discretion on the part of the public respondent, the
COURT RESOLVED to DISMISS the petition.

Thus, in resolving the issue of whether or not the NLRC has jurisdiction over employer-employee relations in PAGCOR,
PCOC and PSSC, the Third Division made the definitive ruling that "there appears to be no question from the petition and
its annexes that the respondent corporations were created by an original charter." The Court collectively referred to all
respondent corporations, including PCOC and PSSC, and held that in accordance with the Constitution and jurisprudence,
corporations with original charter "fall under the jurisdiction of the Civil Service Commission and not the Labor
Department." The Court stated further that P.D. 1869 exempts casino employees from the coverage of Labor Code
provisions and although the employees are empowered by the Constitution to form unions, these are "subject to the laws
passed to regulate unions in offices and corporations governed by the Civil Service Law." Thus, in dismissing the petition,
the ruling of the Third Division was clear - - - it is the Civil Service Commission, and not the NLRC, that has jurisdiction
over the employer-employee problems in PAGCOR, PCOC and PSSC.

In its motion for reconsideration, petitioner lamented that its complaint might be treated as a "pingpong ball" by the
Department of Labor and Employment and the Civil Service Commission. It argued:

x x x the petitioner will now be in a dilemna (sic) for the reason, that the charter creating PAGCOR expressly exempts it
from the coverage of the Civil Service Laws and therefore the petitioner, will now be in a quandary whether it will be
allowed to prosecute its case against PAGCOR before the Civil Service Commission while its own charter expressly
exempts it from the coverage of the Civil Service Law x x x18

The Third Division denied the motion for reconsideration in a Resolution dated 15 March 1989, which contained the
statement upon which the petitioner's whole case relies. The Court stated:

The petitioner states in its motion for reconsideration that the PAGCOR charter expressly exempts it from the coverage of
the Civil Service Laws and, consequently, even if it has an original charter, its disputes with management should be
brought to the Department of Labor and Employment. This argument has no merit. Assuming that there may be some
exemptions from the coverage of Civil Service Laws insofar as eligibility requirements and other rules regarding entry
into the service are concerned, a law or charter cannot supersede a provision of the Constitution. The fear that the
petitioner's complaint will be rejected by the Civil Service Commission is unfounded as the Commission must act in
accordance with its coverage as provided by the Constitution. Any petitions brought against private companies will have
to be brought before the appropriate agency or office of the Department of Labor and Employment.

CONSIDERING THE FOREGOING, the COURT RESOLVED to DENY the motion for reconsideration. This DENIAL is FINAL.
(emphasis added)
Petitioner contends that the "private companies" referred to therein pertain to respondents PCOC and PSSC, and
consequently, this Court has laid down the law of the case in G.R. No. 85922 and has directed that the cases against PCOC
and PSSC should be prosecuted before the Department of Labor and Employment or NLRC.

Petitioner's contention is untenable. It is well-settled that to determine the true intent and meaning of a decision, no
specific portion thereof should be resorted to, but the same must be considered in its entirety.19 Hence, petitioner cannot
merely view a portion of the 15 March 1989 Resolution in isolation for the purpose of asserting its position. The 23
January 1989 Resolution already ruled on the NLRC's lack of jurisdiction over all the respondents in the case - PAGCOR,
PCOC and PSSC. The Third Division neither veered away nor reversed such ruling in its 15 March 1989 Resolution to
petitioner's motion for reconsideration. A reading of the two aforementioned resolutions clearly shows that the phrase
"private companies" could not have referred to PCOC and PSSC for that would substantially alter the Court's ruling that
petitioner's labor cases against the respondents are cognizable by the Civil Service Commission, and not by the NLRC. In
its assailed decision, the Court of Appeals ratiocinated:

Evidently, the [March 15] Resolution containing the questioned pronouncement did not give legal mandate to petitioner
to file its Petition with the Department of Labor and Employment or any of its agencies. On the contrary, the Resolution
decided with finality that petitions brought against the PAGCOR or similar agencies/instrumentalities of the government
must be filed with the Civil Service Commission which has jurisdiction on the matter. The questioned pronouncement, to
Our mind, was made only to illustrate the instance when jurisdiction is instead conferred on the Department of Labor vis-
à -vis the Civil Service Commission; that is, when the petitions are filed [against] private companies.

Finally, as pointed out by the Office of the Solicitor General, the subject matter of the pronouncement in question is "any
petition" not the petition filed by petitioners. Likewise, the petition must be one which is brought against "private
companies" not against private respondents. Apparently, the abovequoted pronouncement is intended to be a general
rule that will govern petitions filed against private companies. It is not intended to be a specific rule that will apply only to
the petition filed by herein petitioners. Where the law makes no distinctions, one does not distinguish. A fortiori, where
the questioned pronouncement makes no distinctions, one does not distinguish.

We agree with the CA. The statement that "(a)ny petitions brought against private companies will have to be brought
before the appropriate agency or office of the Department of Labor and Employment," upon which petitioner's entire case
relies, is of no consequence. It is obiter dictum.

In its memorandum,20 petitioner presents a second issue not otherwise raised in its petition for certiorari, contending
that respondents waived their rights to controvert petitioner's valid and just claims when they filed a motion to dismiss
the consolidated cases with the labor arbiter on the ground of lack of jurisdiction. However, in our 20 August 2003
Resolution requiring the parties to submit their respective memoranda, we specifically stated that "no new issues may be
raised by a party in his/its Memorandum." Moreover, petitioner, in support of this additional issue, presents its
arguments on the merits of the consolidated labor cases. This Court is not a trier of facts. In Santiago v. Vasquez, we
reiterated:

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.21

In this case, the Civil Service Commission is the proper venue for petitioner to ventilate its claims.

The Court is not oblivious to petitioner's plea for justice after waiting numerous years for relief since it first filed its
claims with the labor arbiter in 1986. However, petitioner is not completely without fault. The 23 January 1989
Resolution in G.R. No. 85922, declaring the lack of jurisdiction by the NLRC over PAGCOR, PCOC and PSSC, became final
and executory on March 27, 1989. The petitioner did not file a second motion for reconsideration nor did it file a motion
for clarification of any statement by the Court which petitioner might have thought was ambiguous. Neither did petitioner
take the proper course of action, as laid down in G.R. No. 85922, to file its claims before the Civil Service Commission.
Instead, petitioner pursued a protracted course of action based solely on its erroneous understanding of a single sentence
in the Court's resolution to a motion for reconsideration.

IN VIEW WHEREOF, the instant petition for certiorari is DISMISSED. The assailed 22 June 1999 Decision and 6 December
1999 Resolution of the Court of Appeals in CA-G.R. SP No. 50826 are AFFIRMED.

SO ORDERED.
G.R. No. 162419 July 10, 2007
PAUL V. SANTIAGO, petitioner, vs. CF SHARP CREW MANAGEMENT, INC., respondent.

TINGA, J.:

At the heart of this case involving a contract between a seafarer, on one hand, and the manning agent and the foreign
principal, on the other, is this erstwhile unsettled legal quandary: whether the seafarer, who was prevented from leaving
the port of Manila and refused deployment without valid reason but whose POEA-approved employment contract
provides that the employer-employee relationship shall commence only upon the seafarer’s actual departure from the
port in the point of hire, is entitled to relief?

This treats of the petition for review filed by Paul V. Santiago (petitioner) assailing the Decision and Resolution of the
Court of Appeals dated 16 October 2003 and 19 February 2004, respectively, in CA-G.R. SP No. 68404.1

Petitioner had been working as a seafarer for Smith Bell Management, Inc. (respondent) for about five (5) years.2 On 3
February 1998, petitioner signed a new contract of employment with respondent, with the duration of nine (9) months.
He was assured of a monthly salary of US$515.00, overtime pay and other benefits. The following day or on 4 February
1998, the contract was approved by the Philippine Overseas Employment Administration (POEA). Petitioner was to be
deployed on board the "MSV Seaspread" which was scheduled to leave the port of Manila for Canada on 13 February
1998.

A week before the scheduled date of departure, Capt. Pacifico Fernandez, respondent’s Vice President, sent a facsimile
message to the captain of "MSV Seaspread," which reads:

I received a phone call today from the wife of Paul Santiago in Masbate asking me not to send her husband to MSV
Seaspread anymore. Other callers who did not reveal their identity gave me some feedbacks that Paul Santiago this time if
allowed to depart will jump ship in Canada like his brother Christopher Santiago, O/S who jumped ship from the C.S.
Nexus in Kita-kyushu, Japan last December, 1997.

We do not want this to happen again and have the vessel penalized like the C.S. Nexus in Japan.

Forewarned is forearmed like his brother when his brother when he was applying he behaved like a Saint but in his heart
he was a serpent. If you agree with me then we will send his replacement.

Kindly advise.3

To this message the captain of "MSV Seaspread" replied:

Many thanks for your advice concerning P. Santiago, A/B. Please cancel plans for him to return to Seaspread.4

On 9 February 1998, petitioner was thus told that he would not be leaving for Canada anymore, but he was reassured that
he might be considered for deployment at some future date.

Petitioner filed a complaint for illegal dismissal, damages, and attorney's fees against respondent and its foreign principal,
Cable and Wireless (Marine) Ltd.5 The case was raffled to Labor Arbiter Teresita Castillon-Lora, who ruled that the
employment contract remained valid but had not commenced since petitioner was not deployed. According to her,
respondent violated the rules and regulations governing overseas employment when it did not deploy petitioner, causing
petitioner to suffer actual damages representing lost salary income for nine (9) months and fixed overtime fee, all
amounting to US$7, 209.00.

The labor arbiter held respondent liable. The dispositive portion of her Decision dated 29 January 1999 reads:

WHEREFORE, premises considered, respondent is hereby Ordered to pay complainant actual damages in the amount of
US$7,209.00 plus 10% attorney's fees, payable in Philippine peso at the rate of exchange prevailing at the time of
payment.

All the other claims are hereby DISMISSED for lack of merit.

SO ORDERED.6

On appeal by respondent, the National Labor Relations Commission (NLRC) ruled that there is no employer-employee
relationship between petitioner and respondent because under the Standard Terms and Conditions Governing the
Employment of Filipino Seafarers on Board Ocean Going Vessels (POEA Standard Contract), the employment contract
shall commence upon actual departure of the seafarer from the airport or seaport at the point of hire and with a POEA-
approved contract. In the absence of an employer-employee relationship between the parties, the claims for illegal
dismissal, actual damages, and attorney’s fees should be dismissed.7 On the other hand, the NLRC found respondent’s
decision not to deploy petitioner to be a valid exercise of its management prerogative.8 The NLRC disposed of the appeal
in this wise:
WHEREFORE, in the light of the foregoing, the assailed Decision dated January 29, 1999 is hereby AFFIRMED in so far as
other claims are concerned and with MODIFICATION by VACATING the award of actual damages and attorney’s fees as
well as excluding Pacifico Fernandez as party respondent.

SO ORDERED.

Petitioner moved for the reconsideration of the NLRC’s Decision but his motion was denied for lack of merit.10 He
elevated the case to the Court of Appeals through a petition for certiorari.

In its Decision11 dated 16 October 2003, the Court of Appeals noted that there is an ambiguity in the NLRC’s Decision
when it affirmed with modification the labor arbiter’s Decision, because by the very modification introduced by the
Commission (vacating the award of actual damages and attorney’s fees), there is nothing more left in the labor arbiter’s
Decision to affirm.12

According to the appellate court, petitioner is not entitled to actual damages because damages are not recoverable by a
worker who was not deployed by his agency within the period prescribed in

the POEA Rules.13 It agreed with the NLRC’s finding that petitioner’s non-deployment was a valid exercise of
respondent’s management prerogative.14 It added that since petitioner had not departed from the Port of Manila, no
employer-employee relationship between the parties arose and any claim for damages against the so-called employer
could have no leg to stand on.15

Petitioner’s subsequent motion for reconsideration was denied on 19 February 2004.16

The present petition is anchored on two grounds, to wit:

A. The Honorable Court of Appeals committed a serious error of law when it ignored [S]ection 10 of Republic Act [R.A.]
No. 8042 otherwise known as the Migrant Worker’s Act of 1995 as well as Section 29 of the Standard Terms and
Conditions Governing the Employment of Filipino Seafarers On-Board Ocean-Going Vessels (which is deemed
incorporated under the petitioner’s POEA approved Employment Contract) that the claims or disputes of the Overseas
Filipino Worker by virtue of a contract fall within the jurisdiction of the Labor Arbiter of the NLRC.

B. The Honorable Court of Appeals committed a serious error when it disregarded the required quantum of proof in labor
cases, which is substantial evidence, thus a total departure from established jurisprudence on the matter.17

Petitioner maintains that respondent violated the Migrant Workers Act and the POEA Rules when it failed to deploy him
within thirty (30) calendar days without a valid reason. In doing so, it had unilaterally and arbitrarily prevented the
consummation of the POEA- approved contract. Since it prevented his deployment without valid basis, said deployment
being a condition to the consummation of the POEA contract, the contract is deemed consummated, and therefore he
should be awarded actual damages, consisting of the stipulated salary and fixed overtime pay.18 Petitioner adds that
since the contract is deemed consummated, he should be considered an employee for all intents and purposes, and thus
the labor arbiter and/or the NLRC has jurisdiction to take cognizance of his claims.19

Petitioner additionally claims that he should be considered a regular employee, having worked for five (5) years on board
the same vessel owned by the same principal and manned by the same local agent. He argues that respondent’s act of not
deploying him was a scheme designed to prevent him from attaining the status of a regular employee.20

Petitioner submits that respondent had no valid and sufficient cause to abandon the employment contract, as it merely
relied upon alleged phone calls from his wife and other unnamed callers in arriving at the conclusion that he would jump
ship like his brother. He points out that his wife had executed an affidavit21 strongly denying having called respondent,
and that the other alleged callers did not even disclose their identities to respondent.22 Thus, it was error for the Court of
Appeals to adopt the unfounded conclusion of the NLRC, as the same was not based on substantial evidence.23

On the other hand, respondent argues that the Labor Arbiter has no jurisdiction to award petitioner’s monetary claims.
His employment with respondent did not commence because his deployment was withheld for a valid reason.
Consequently, the labor arbiter and/or the NLRC cannot entertain adjudication of petitioner’s case much less award
damages to him. The controversy involves a breach of contractual obligations and as such is cognizable by civil courts.24
On another matter, respondent claims that the second issue posed by petitioner involves a recalibration of facts which is
outside the jurisdiction of this Court.25

There is some merit in the petition.

There is no question that the parties entered into an employment contract on 3 February 1998, whereby petitioner was
contracted by respondent to render services on board "MSV Seaspread" for the consideration of US$515.00 per month for
nine (9) months, plus overtime pay. However, respondent failed to deploy petitioner from the port of Manila to Canada.
Considering that petitioner was not able to depart from the airport or seaport in the point of hire, the employment
contract did not commence, and no employer-employee relationship was created between the parties.26

However, a distinction must be made between the perfection of the employment contract and the commencement of the
employer-employee relationship. The perfection of the contract, which in this case coincided with the date of execution
thereof, occurred when petitioner and respondent agreed on the object and the cause, as well as the rest of the terms and
conditions therein. The commencement of the employer-employee relationship, as earlier discussed, would have taken
place had petitioner been actually deployed from the point of hire. Thus, even before the start of any employer-employee
relationship, contemporaneous with the perfection of the employment contract was the birth of certain rights and
obligations, the breach of which may give rise to a cause of action against the erring party. Thus, if the reverse had
happened, that is the seafarer failed or refused to be deployed as agreed upon, he would be liable for damages.

Moreover, while the POEA Standard Contract must be recognized and respected, neither the manning agent nor the
employer can simply prevent a seafarer from being deployed without a valid reason.

Respondent’s act of preventing petitioner from departing the port of Manila and boarding "MSV Seaspread" constitutes a
breach of contract, giving rise to petitioner’s cause of action. Respondent unilaterally and unreasonably reneged on its
obligation to deploy petitioner and must therefore answer for the actual damages he suffered.

We take exception to the Court of Appeals’ conclusion that damages are not recoverable by a worker who was not
deployed by his agency. The fact that the POEA Rules27 are silent as to the payment of damages to the affected seafarer
does not mean that the seafarer is precluded from claiming the same. The sanctions provided for non-deployment do not
end with the suspension or cancellation of license or fine and the return of all documents at no cost to the worker. They
do not forfend a seafarer from instituting an action for damages against the employer or agency which has failed to deploy
him.

The POEA Rules only provide sanctions which the POEA can impose on erring agencies. It does not provide for damages
and money claims recoverable by aggrieved employees because it is not the POEA, but the NLRC, which has jurisdiction
over such matters.

Despite the absence of an employer-employee relationship between petitioner and respondent, the Court rules that the
NLRC has jurisdiction over petitioner’s complaint. The jurisdiction of labor arbiters is not limited to claims arising from
employer-employee relationships. Section 10 of R.A. No. 8042 (Migrant Workers Act), provides that:

Sec. 10. Money Claims. – Notwithstanding any provision of law to the contrary, the Labor Arbiters of the National Labor
Relations Commission (NLRC) shall have the original and exclusive jurisdiction to hear and decide, within ninety (90)
calendar days after the filing of the complaint, the claims arising out of an employer-employee relationship or by virtue of
any law or contract involving Filipino workers for overseas deployment including claims for actual, moral, exemplary and
other forms of damages. x x x [Emphasis supplied]

Since the present petition involves the employment contract entered into by petitioner for overseas employment, his
claims are cognizable by the labor arbiters of the NLRC.

Article 2199 of the Civil Code provides that one is entitled to an adequate compensation only for such pecuniary loss
suffered by him as he has duly proved. Respondent is thus liable to pay petitioner actual damages in the form of the loss of
nine (9) months’ worth of salary as provided in the contract. He is not, however, entitled to overtime pay. While the
contract indicated a fixed overtime pay, it is not a guarantee that he would receive said amount regardless of whether or
not he rendered overtime work. Even though petitioner was "prevented without valid reason from rendering regular
much less overtime service,"28 the fact remains that there is no certainty that petitioner will perform overtime work had
he been allowed to board the vessel. The amount of US$286.00 stipulated in the contract will be paid only if and when the
employee rendered overtime work. This has been the tenor of our rulings in the case of Stolt-Nielsen Marine Services
(Phils.), Inc. v. National Labor Relations Commission29 where we discussed the matter in this light:

The contract provision means that the fixed overtime pay of 30% would be the basis for computing the overtime pay if
and when overtime work would be rendered. Simply stated, the rendition of overtime work and the submission of
sufficient proof that said work was actually performed are conditions to be satisfied before a seaman could be entitled to
overtime pay which should be computed on the basis of 30% of the basic monthly salary. In short, the contract provision
guarantees the right to overtime pay but the entitlement to such benefit must first be established. Realistically speaking, a
seaman, by the very nature of his job, stays on board a ship or vessel beyond the regular eight-hour work schedule. For
the employer to give him overtime pay for the extra hours when he might be sleeping or attending to his personal chores
or even just lulling away his time would be extremely unfair and unreasonable.30

The Court also holds that petitioner is entitled to attorney’s fees in the concept of damages and expenses of litigation.
Attorney's fees are recoverable when the defendant's act or omission has compelled the plaintiff to incur expenses to
protect his interest.31 We note that respondent’s basis for not deploying petitioner is the belief that he will jump ship just
like his brother, a mere suspicion that is based on alleged phone calls of several persons whose identities were not even
confirmed. Time and again, this Court has upheld management prerogatives so long as they are exercised in good faith for
the advancement of the employer’s interest and not for the purpose of defeating or circumventing the rights of the
employees under special laws or under valid agreements.32 Respondent’s failure to deploy petitioner is unfounded and
unreasonable, forcing petitioner to institute the suit below. The award of attorney’s fees is thus warranted.

However, moral damages cannot be awarded in this case. While respondent’s failure to deploy petitioner seems baseless
and unreasonable, we cannot qualify such action as being tainted with bad faith, or done deliberately to defeat petitioner’s
rights, as to justify the award of moral damages. At most, respondent was being overzealous in protecting its interest
when it became too hasty in making its conclusion that petitioner will jump ship like his brother.

We likewise do not see respondent’s failure to deploy petitioner as an act designed to prevent the latter from attaining the
status of a regular employee. Even if petitioner was able to depart the port of Manila, he still cannot be considered a
regular employee, regardless of his previous contracts of employment with respondent. In Millares v. National Labor
Relations Commission,33 the Court ruled that seafarers are considered contractual employees and cannot be considered
as regular employees under the Labor Code. Their employment is governed by the contracts they sign every time they are
rehired and their employment is terminated when the contract expires. The exigencies of their work necessitates that
they be employed on a contractual basis.34
WHEREFORE, petition is GRANTED IN PART. The Decision dated 16 October 2003 and the Resolution dated 19 February
2004 of the Court of Appeals are REVERSED and SET ASIDE. The Decision of Labor Arbiter Teresita D. Castillon-Lora
dated 29 January 1999 is REINSTATED with the MODIFICATION that respondent CF Sharp Crew Management, Inc. is
ordered to pay actual or compensatory damages in the amount of US$4,635.00

representing salary for nine (9) months as stated in the contract, and attorney’s fees at the reasonable rate of 10% of the
recoverable amount.

SO ORDERED.

G.R. No. 176085 February 8, 2012

FEDERICO S. ROBOSA, ROLANDO E. PANDY, NOEL D. ROXAS, ALEXANDER ANGELES, VERONICA GUTIERREZ,
FERNANDO EMBAT, and NANETTE H. PINTO, Petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION (First
Division), CHEMO-TECHNISCHE MANUFACTURING, INC. and its responsible officials led by FRANKLIN R. DE
LUZURIAGA, and PROCTER & GAMBLE PHILIPPINES, INC., Respondents.

BRION, J.:

We resolve the petition for review on certiorari1 seeking the reversal of the resolutions of the Court of Appeals (CA)
rendered on February 24, 20062 and December 14, 20063 in CA-G.R. SP No. 80436.

Factual Background

Federico S. Robosa, Rolando E. Pandy, Noel D. Roxas, Alexander Angeles, Veronica Gutierrez, Fernando Embat and Nanette
H. Pinto (petitioners) were rank-and-file employees of respondent Chemo-Technische Manufacturing, Inc. (CTMI), the
manufacturer and distributor of "Wella" products. They were officers and members of the CTMI Employees Union-DFA
(union). Respondent Procter and Gamble Philippines, Inc. (P & GPI) acquired all the interests, franchises and goodwill of
CTMI during the pendency of the dispute.

Sometime in the first semester of 1991, the union filed a petition for certification election at CTMI. On June 10, 1991, Med-
Arbiter Rasidali Abdullah of the Office of the Department of Labor and Employment in the National Capital Region (DOLE-
NCR) granted the petition. The DOLE-NCR conducted a consent election on July 5, 1991, but the union failed to garner the
votes required to be certified as the exclusive bargaining agent of the company.

On July 15, 1991, CTMI, through its President and General Manager Franklin R. de Luzuriaga, issued a memorandum4
announcing that effective that day: (1) all sales territories were demobilized; (2) all vehicles assigned to sales
representatives should be returned to the company and would be sold; (3) sales representatives would continue to
service their customers through public transportation and would be given transportation allowance; (4) deliveries of
customers’ orders would be undertaken by the warehouses; and (5) revolving funds for ex-truck selling held by sales
representatives should be surrendered to the cashier (for Metro Manila) or to the supervisor (for Visayas and Mindanao),
and truck stocks should immediately be surrendered to the warehouse.

On the same day, CTMI issued another memorandum5 informing the company’s sales representatives and sales drivers of
the new system in the Salon Business Group’s selling operations.

The union asked for the withdrawal and deferment of CTMI’s directives, branding them as union busting acts constituting
unfair labor practice. CTMI ignored the request. Instead, it issued on July 23, 1991 a notice of termination of employment
to the sales drivers, due to the abolition of the sales driver positions.6

On August 1, 1991, the union and its affected members filed a complaint for illegal dismissal and unfair labor practice,
with a claim for damages, against CTMI, De Luzuriaga and other CTMI officers. The union also moved for the issuance of a
writ of preliminary injunction and/or temporary restraining order (TRO).

The Compulsory Arbitration Proceedings

The labor arbiter handling the case denied the union’s motion for a stay order on the ground that the issues raised by the
petitioners can best be ventilated during the trial on the merits of the case. This prompted the union to file on August 16,
1991 with the National Labor Relations Commission (NLRC), a petition for the issuance of a preliminary mandatory
injunction and/or TRO.7

On August 23, 1991, the NLRC issued a TRO.8 It directed CTMI, De Luzuriaga and other company executives to (1) cease
and desist from dismissing any member of the union and from implementing the July 23, 1991 memorandum terminating
the services of the sales drivers, and to immediately reinstate them if the dismissals have been effected; (2) cease and
desist from implementing the July 15, 1991 memorandum grounding the sales personnel; and (3) restore the status quo
ante prior to the formation of the union and the conduct of the consent election.

Allegedly, the respondents did not comply with the NLRC’s August 23, 1991 resolution. They instead moved to dissolve
the TRO and opposed the union’s petition for preliminary injunction.

On September 12, 1991, the NLRC upgraded the TRO to a writ of preliminary injunction.9 The respondents moved for
reconsideration. The union opposed the motion and urgently moved to cite the responsible CTMI officers in contempt of
court.
On August 25, 1993, the NLRC denied the respondents’ motion for reconsideration and directed Labor Arbiter Cristeta
Tamayo to hear the motion for contempt. In reaction, the respondents questioned the NLRC orders before this Court
through a petition for certiorari and prohibition with preliminary injunction. The Court dismissed the petition for being
premature. It also denied the respondents’ motion for reconsideration, as well as a second motion for reconsideration,
with finality. This notwithstanding, the respondents allegedly refused to obey the NLRC directives. The respondents’
defiance, according to the petitioners, resulted in the loss of their employment.

Meanwhile, the NLRC heard the contempt charge. On October 31, 2000, it issued a resolution10 dismissing the charge. It
ordered the labor arbiter to proceed hearing the main case on the merits.

The petitioners moved for, but failed to secure, a reconsideration from the NLRC on the dismissal of the contempt charge.
They then sought relief from the CA by way of a petition for certiorari under Rule 65.

The CA Decision

The CA saw no need to dwell on the issues raised by the petitioners as the question it deemed appropriate for resolution
is whether the NLRC’s dismissal of the contempt charge against the respondents may be the proper subject of an appeal. It
opined that the dismissal is not subject to review by an appellate court. Accordingly, the CA Special Sixth Division
dismissed the petition in its resolution of February 24, 2006.11

The CA considered the prayer of P & GPI to be dropped as party-respondent moot and academic.

The petitioners sought a reconsideration, but the CA denied the motion in its resolution of December 14, 2006.12 Hence,
the present Rule 45 petition.

The Petition

The petitioners charge the CA with grave abuse of discretion in upholding the NLRC resolutions, despite the reversible
errors the labor tribunal committed in dismissing the contempt charge against the respondents. They contend that the
respondents were guilty of contempt for their failure (1) to observe strictly the NLRC status quo order; and (2) to
reinstate the dismissed petitioners and to pay them their lost wages, sales commissions, per diems, allowances and other
employee benefits. They also claim that the NLRC, in effect, overturned this Court’s affirmation of the TRO and of the
preliminary injunction.

The petitioners assail the CA’s reliance on the Court’s ruling that a contempt charge partakes of a criminal proceeding
where an acquittal is not subject to appeal. They argue that the facts obtaining in the present case are different from the
facts of the cases where the Court’s ruling was made. They further argue that by the nature of this case, the Labor Code
and its implementing rules and regulations should apply, but in any event, the appellate court is not prevented from
reviewing the factual basis of the acquittal of the respondents from the contempt charges.

The petitioners lament that the NLRC, in issuing the challenged resolutions, had unconstitutionally applied the law. They
maintain that not only did the NLRC unconscionably delay the disposition of the case for more than twelve (12) years; it
also rendered an unjust, unkind and dubious judgment. They bewail that "[f]or some strange reason, the respondent
NLRC made a queer [somersault] from its earlier rulings which favor the petitioners."13

The Case for the Respondents

Franklin K. De Luzuriaga

De Luzuriaga filed a Comment14 on May 17, 2007 and a Memorandum on December 4, 2008,15 praying for a dismissal of
the petition.

De Luzuriaga argues that the CA committed no error when it dismissed the petition for certiorari since the dismissal of
the contempt charge against the respondents amounted to an acquittal where review by an appellate court will not lie. In
any event, he submits, the respondents were charged with indirect contempt which may be initiated only in the
appropriate regional trial court, pursuant to Section 12, Rule 71 of the Rules of Court. He posits that the NLRC has no
jurisdiction over an indirect contempt charge. He thus argues that the petitioners improperly brought the contempt
charge before the NLRC.

Additionally, De Luzuriaga points out that the petition raises only questions of facts which, procedurally, is not allowed in
a petition for review on certiorari. Be this as it may, he submits that pursuant to Philippine Long Distance Telephone
Company, Inc. v. Tiamson,16 factual findings of labor officials, who are deemed to have acquired expertise in matters
within their respective jurisdictions, are generally accorded not only respect but even finality. He stresses that the CA
committed no reversible error in not reviewing the NLRC’s factual findings.

Further, De Luzuriaga contends that the petitioners’ verification and certification against forum shopping is defective
because it was only Robosa and Pandy who executed the document. There was no indication that they were authorized by
Roxas, Angeles, Gutierrez, Embat and Pinto to execute the required verification and certification.

Lastly, De Luzuriaga maintains that the petitioners are guilty of forum shopping as the reliefs prayed for in the petition
before the CA, as well as in the present petition, are the same reliefs that the petitioners may be entitled to in the
complaint before the labor arbiter.17

P & GPI
As it did with the CA when it was asked to comment on the petitioners’ motion for reconsideration,18 P & GPI prays in its
Comment19 and Memorandum20 that it be dropped as a party-respondent, and that it be excused from further
participating in the proceedings. It argues that inasmuch as the NLRC resolved the contempt charge on the merits, an
appeal from its dismissal through a petition for certiorari is barred. Especially in its case, the dismissal of the petition for
certiorari is correct because it was never made a party to the contempt proceedings and, thus, it was never afforded the
opportunity to be heard. It adds that it is an entity separate from CTMI. It submits that it cannot be made to assume any or
all of CTMI’s liabilities, absent an agreement to that effect but even if it may be liable, the present proceedings are not the
proper venue to determine its liability, if any.

On December 16, 2008, the petitioners filed a Memorandum21 raising essentially the same issues and arguments laid
down in the petition.

The Court’s Ruling

Issues

The parties’ submissions raise the following issues:

(1) whether the NLRC has contempt powers;

(2) whether the dismissal of a contempt charge is appealable; and

(3) whether the NLRC committed grave abuse of discretion in dismissing the contempt charge against the respondents.

On the first issue, we stress that under Article 21822 of the Labor Code, the NLRC (and the labor arbiters) may hold any
offending party in contempt, directly or indirectly, and impose appropriate penalties in accordance with law. The penalty
for direct contempt consists of either imprisonment or fine, the degree or amount depends on whether the contempt is
against the Commission or the labor arbiter. The Labor Code, however, requires the labor arbiter or the Commission to
deal with indirect contempt in the manner prescribed under Rule 71 of the Rules of Court.23

Rule 71 of the Rules of Court does not require the labor arbiter or the NLRC to initiate indirect contempt proceedings
before the trial court. This mode is to be observed only when there is no law granting them contempt powers.24 As is
clear under Article 218(d) of the Labor Code, the labor arbiter or the Commission is empowered or has jurisdiction to
hold the offending party or parties in direct or indirect contempt. The petitioners, therefore, have not improperly brought
the indirect contempt charges against the respondents before the NLRC.

The second issue pertains to the nature of contempt proceedings, especially with respect to the remedy available to the
party adjudged to have committed indirect contempt or has been absolved of indirect contempt charges. In this regard,
Section 11, Rule 71 of the Rules of Court states that the judgment or final order of a court in a case of indirect contempt
may be appealed to the proper court as in a criminal case. This is not the point at issue, however, in this petition. It is
rather the question of whether the dismissal of a contempt charge, as in the present case, is appealable. The CA held that
the NLRC’s dismissal of the contempt charges against the respondents amounts to an acquittal in a criminal case and is
not subject to appeal.

The CA ruling is grounded on prevailing jurisprudence.

In Yasay, Jr. v. Recto,25 the Court declared:

A distinction is made between a civil and [a] criminal contempt. Civil contempt is the failure to do something ordered by a
court to be done for the benefit of a party. A criminal contempt is any conduct directed against the authority or dignity of
the court.26

The Court further explained in Remman Enterprises, Inc. v. Court of Appeals27 and People v. Godoy28 the character of
contempt proceedings, thus –

The real character of the proceedings in contempt cases is to be determined by the relief sought or by the dominant
purpose. The proceedings are to be regarded as criminal when the purpose is primarily punishment and civil when the
purpose is primarily compensatory or remedial.

Still further, the Court held in Santiago v. Anunciacion, Jr.29 that:

But whether the first or the second, contempt is still a criminal proceeding in which acquittal, for instance, is a bar to a
second prosecution. The distinction is for the purpose only of determining the character of punishment to be
administered.

In the earlier case of The Insurance Commissioner v. Globe Assurance Co., Inc.,30 the Court dismissed the appeal from the
ruling of the lower court denying a petition to punish the respondent therein from contempt for lack of evidence. The
Court said in that case:

It is not the sole reason for dismissing this appeal. In the leading case of In re Mison, Jr. v. Subido, it was stressed by
Justice J.B.L. Reyes as ponente, that the contempt proceeding far from being a civil action is "of a criminal nature and of
summary character in which the court exercises but limited jurisdiction." It was then explicitly held: "Hence, as in criminal
proceedings, an appeal would not lie from the order of dismissal of, or an exoneration from, a charge of contempt of
court." [footnote omitted]
Is the NLRC’s dismissal of the contempt charges against the respondents beyond review by this Court? On this important
question, we note that the petitioners, in assailing the CA main decision, claim that the appellate court committed grave
abuse of discretion in not ruling on the dismissal by the NLRC of the contempt charges.31 They also charge the NLRC of
having gravely abused its discretion and having committed reversible errors in:

(1) setting aside its earlier resolutions and orders, including the writ of preliminary injunction it issued, with its dismissal
of the petition to cite the respondents in contempt of court;

(2) overturning this Court’s resolutions upholding the TRO and the writ of preliminary injunction;

(3) failing to impose administrative fines upon the respondents for violation of the TRO and the writ of preliminary
injunction; and

(4) failing to order the reinstatement of the dismissed petitioners and the payment of their accrued wages and other
benefits.

In view of the grave abuse of discretion allegation in this case, we deem it necessary to look into the NLRC’s dismissal of
the contempt charges against the respondents. As the charges were rooted into the respondents’ alleged non-compliance
with the NLRC directives contained in the TRO32 and the writ of preliminary injunction,33 we first inquire into what
really happened to these directives.

The assailed NLRC resolution of October 31, 200034 gave us the following account on the matter -

On the first directive, x x x We find that there was no violation of the said order. A perusal of the records would show that
in compliance with the temporary restraining order (TRO), respondents reinstated back to work the sales drivers who
complained of illegal dismissal (Memorandum of Respondents, page 4).

Petitioners’ allegation that there was only payroll reinstatement does not make the respondents guilty of contempt of
court. Even if the drivers were just in the garage doing nothing, the same does not make respondents guilty of contempt
nor does it make them violators of the injunction order. What is important is that they were reinstated and receiving their
salaries.

As for petitioners Danilo Real, Roberto Sedano and Rolando Manalo, they have resigned from their jobs and were paid
their separation pay xxx (Exhibits "6," "6-A," "7," "7-A," "8," "8-A," Respondents’ Memorandum dated August 12, 1996).
The issue of whether they were illegally dismissed should be threshed out before the Labor Arbiter in whose sala the case
of unfair labor practice and illegal dismissal were (sic) filed. Records also show that petitioner Antonio Desquitado during
the pendency of the case executed an affidavit of desistance asking that he be dropped as party complainant in as much as
he has already accepted separation benefits totaling to ₱63,087.33.

With respect to the second directive ordering respondents to cease and desist from implementing the memoranda dated
July 15, 1991 designed to ground sales personnel who are members of the union, respondents alleged that they can no
longer be restrained or enjoined and that the status quo can no longer be restored, for implementation of the
memorandum was already consummated or was a fait accompli. x x x

All sales vehicles were ordered to be turned over to management and the same were already sold[.] xxx [I]t would be hard
to undo the sales transactions, the same being valid and binding. The memorandum of July 15, 1991 authorized still all
sales representatives to continue servicing their customers using public transportation and a transportation allowance
would be issued.

xxxx

The third directive of the Commission is to preserve the "status quo ante" between the parties.

Records reveal that WELLA AG of Germany terminated its Licensing Agreement with respondent company effective
December 31, 1991 (Exhibit "11," Respondents’ Memorandum).

On January 31, 1992, individual petitioners together with the other employees were terminated xxx. In fact, this event
resulted to the closure of the respondent company. The manufacturing and marketing operations ceased. This is
evidenced by the testimony of Rosalito del Rosario and her affidavit (Exh. "9," memorandum of Respondents) as well as
Employer’s Monthly Report on Employees Termination/dismissals/suspension xxx (Exhibits "12-A" to "12-F," ibid) as
well as the report that there is a permanent shutdown/total closure of all units of operations in the establishment (Ibid).
A letter was likewise sent to the Department of Labor and Employment (Exh. "12," Ibid) in compliance with Article 283 of
the Labor Code, serving notice that it will cease business operations effective January 31, 1992.

The petitioners strongly dispute the above account. They maintain that the NLRC failed to consider the following:

1. CTMI violated the status quo ante order when it did not restore to their former work assignments the dismissed sales
drivers. They lament that their being "garaged" deprived them of benefits, and they were subjected to ridicule and
psychological abuse. They assail the NLRC for considering the payroll reinstatement of the drivers as compliance with its
stay order.

They also bewail the NLRC’s recognition of the resignation of Danilo Real, Roberto Sedano, Rolando Manalo and Antonio
Desquitado as they were just compelled by economic necessity to resign from their employment. The quitclaims they
executed were contrary to public policy and should not bar them from claiming the full measure of their rights, including
their counsel who was unduly deprived of his right to collect attorney’s fees.
2. It was error for the NLRC to rule that the memorandum, grounding the sales drivers, could no longer be restrained or
enjoined because all sales vehicles were already sold. No substantial evidence was presented by the respondents to prove
their allegation, but even if there was a valid sale of the vehicles, it did not relieve the respondents of responsibility under
the stay order.

3. The alleged termination of the licensing agreement between CTMI and WELLA AG of Germany, which allegedly resulted
in the closure of CTMI’s manufacturing and marketing operations, occurred after the NLRC’s issuance of the injunctive
reliefs. CTMI failed to present substantial evidence to support its contention that it folded up its operations when the
licensing agreement was terminated. Even assuming that there was a valid closure of CTMI’s business operations, they
should have been paid their lost wages, allowances, incentives, sales commissions, per diems and other employee benefits
from August 23, 1991 up to the date of the alleged termination of CTMI’s marketing operations.

Did the NLRC commit grave abuse of discretion in dismissing the contempt charges against the respondents? An act of a
court or tribunal may only be considered as committed in grave abuse of discretion when it was performed in a capricious
or whimsical exercise of judgment which is equivalent to lack of jurisdiction. The abuse of discretion must be so patent
and gross as to amount to an evasion of a positive duty enjoined by law, or to act at all in contemplation of law, as where
the power is exercised in an arbitrary and despotic manner by reason of passion or personal hostility.35

The petitioners insist that the respondents violated the NLRC directives, especially the status quo ante order, for their
failure to reinstate the dismissed petitioners and to pay them their benefits. In light of the facts of the case as drawn
above, we cannot see how the status quo ante or the employer-employee situation before the formation of the union and
the conduct of the consent election can be maintained. As the NLRC explained, CTMI closed its manufacturing and
marketing operations after the termination of its licensing agreement with WELLA AG of Germany. In fact, the closure
resulted in the termination of CTMI’s remaining employees on January 31, 1992, aside from the sales drivers who were
earlier dismissed but reinstated in the payroll, in compliance with the NLRC injunction. The petitioners’ termination of
employment, as well as all of their money claims, was the subject of the illegal dismissal and unfair labor practice
complaint before the labor arbiter. The latter was ordered by the NLRC on October 31, 2000 to proceed hearing the
case.36 The NLRC thus subsumed all other issues into the main illegal dismissal and unfair labor practice case pending
with the labor arbiter. On this point, the NLRC declared:

Note that when the injunction order was issued, WELLA AG of Germany was still under licensing agreement with
respondent company. However, the situation has changed when WELLA AG of Germany terminated its licensing
agreement with the respondent, causing the latter to close its business.

Respondents could no longer be ordered to restore the status quo as far as the individual petitioners are concerned as
these matters regarding the termination of the employees are now pending litigation with the Arbitration Branch of the
Commission. To resolve the incident now regarding the closure of the respondent company and the matters alleged by
petitioners such as the creations of three (3) new corporations xxx as successor-corporations are matters best left to the
Labor Arbiter hearing the merits of the unfair labor practice and illegal dismissal cases.37

We find no grave abuse of discretion in the assailed NLRC ruling. It rightly avoided delving into issues which would clearly
be in excess of its jurisdiction for they are issues involving the merits of the case which are by law within the original and
exclusive jurisdiction of the labor arbiter.38 To be sure, whether payroll reinstatement of some of the petitioners is
proper; whether the resignation of some of them was compelled by dire economic necessity; whether the petitioners are
entitled to their money claims; and whether quitclaims are contrary to law or public policy are issues that should be
heard by the labor arbiter in the first instance. The NLRC can inquire into them only on appeal after the merits of the case
shall have been adjudicated by the labor arbiter.

The NLRC correctly dismissed the contempt charges against the respondents.1â wphi1 The CA likewise committed no
grave abuse of discretion in not disturbing the NLRC resolution.

In light of the above discussion, we find no need to dwell into the other issues the parties raised.

WHEREFORE, premises considered, we hereby DENY the petition for lack of merit and AFFIRM the assailed resolutions of
the Court of Appeals.

SO ORDERED.
G.R. No. 142244 November 18, 2002
ATLAS FARMS, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION,
JAIME O. DELA PEÑA and MARCIAL I. ABION, respondents.

QUISUMBING, J.:

Petitioner seeks the reversal of the decision1 dated January 10, 2000 of the Court of Appeals in CA-G.R. SP No. 52780,
dismissing its petition for certiorari against the NLRC, as well as the resolution2 dated February 24, 2000, denying its
motion for reconsideration.

The antecedent facts of the case, as found by the Court of Appeals,3 are as follows:

Private respondent Jaime O. dela Peñ a was employed as a veterinary aide by petitioner in December 1975. He was among
several employees terminated in July 1989. On July 8, 1989, he was re-hired by petitioner and given the additional job of
feedmill operator. He was instructed to train selected workers to operate the feedmill.

On March 13, 1993,4 Peñ a was allegedly caught urinating and defecating on company premises not intended for the
purpose. The farm manager of petitioner issued a formal notice directing him to explain within 24 hours why disciplinary
action should not be taken against him for violating company rules and regulations. Peñ a refused, however, to receive the
formal notice. He never bothered to explain, either verbally or in writing, according to petitioner. Thus, on March 20,
1993, a notice of termination with payment of his monetary benefits was sent to him. He duly acknowledged receipt of his
separation pay of P13,918.67.

From the start of his employment on July 8, 1989, until his termination on March 20, 1993, Peñ a had worked for seven
days a week, including holidays, without overtime, holiday, rest day pay and service incentive leave. At the time of his
dismissal from employment, he was receiving P180 pesos daily wage, or an average monthly salary of P5,402.

Co-respondent Marcial I. Abion5 was a carpenter/mason and a maintenance man whose employment by petitioner
commenced on October 8, 1990. Allegedly, he caused the clogging of the fishpond drainage resulting in damages worth
several hundred thousand pesos when he improperly disposed of the cut grass and other waste materials into the pond’s
drainage system. Petitioner sent a written notice to Abion, requiring him to explain what happened, otherwise,
disciplinary action would be taken against him. He refused to receive the notice and give an explanation, according to
petitioner. Consequently, the company terminated his services on October 27, 1992. He acknowledged receipt of a written
notice of dismissal, with his separation pay.

Like Peñ a, Abion worked seven days a week, including holidays, without holiday pay, rest day pay, service incentive leave
pay and night shift differential pay. When terminated on October 27, 1992, Abion was receiving a monthly salary of
P4,500.

Peñ a and Abion filed separate complaints for illegal dismissal that were later consolidated. Both claimed that their
termination from service was due to petitioner’s suspicion that they were the leaders in a plan to form a union to compete
and replace the existing management-dominated union.

On November 9, 1993, the labor arbiter dismissed their complaints on the ground that the grievance machinery in the
collective bargaining agreement (CBA) had not yet been exhausted. Private respondents availed of the grievance process,
but later on refiled the case before the NLRC in Region IV. They alleged "lack of sympathy" on petitioner’s part to engage
in conciliation proceedings.

Their cases were consolidated in the NLRC. At the initial mandatory conference, petitioner filed a motion to dismiss, on
the ground of lack of jurisdiction, alleging private respondents themselves admitted that they were members of the
employees’ union with which petitioner had an existing CBA. This being the case, according to petitioner, jurisdiction over
the case belonged to the grievance machinery and thereafter the voluntary arbitrator, as provided in the CBA.

In a decision dated January 30, 1996, the labor arbiter dismissed the complaint for lack of merit, finding that the case was
one of illegal dismissal and did not involve the interpretation or implementation of any CBA provision. He stated that
Article 217 (c) of the Labor Code6 was inapplicable to the case. Further, the labor arbiter found that although both
complainants did not substantiate their claims of illegal dismissal, there was proof that private respondents voluntarily
accepted their separation pay and petitioner’s financial assistance.

Thus, private respondents brought the case to the NLRC, which reversed the labor arbiter’s decision. Dissatisfied with the
NLRC ruling, petitioner went to the Court of Appeals by way of a petition for review on certiorari under Rule 65, seeking
reinstatement of the labor arbiter’s decision. The appellate court denied the petition and affirmed the NLRC resolution
with some modifications, thus:

WHEREFORE, the petition is DENIED. The resolution in NLRC CA No. 010520-96 is AFFIRMED with the following
modifications:

1) The private respondents can not be reinstated, due to their acceptance of the separation pay offered by the petitioner;

2) The private respondents are entitled to their full back wages; and,

3) The amount of the separation pay received by private respondents from petitioner shall not be deducted from their full
back wages.

Costs against petitioner.

SO ORDERED.7

Petitioner forthwith filed its motion for reconsideration, which was denied in a resolution dated February 24, 2000, which
reads:

Acting on the Motion for Reconsideration filed by petitioner[s] which drew an opposition from private respondents, the
Court resolved to DENY the aforesaid motion for reconsideration, as the issues raised therein have been passed upon by
the Court in its questioned decision and no substantial arguments were presented to warrant its reversal, let alone
modification.

SO ORDERED.8

In this petition now before us, petitioner alleges that the appellate court erred in:

I. … DENYING THE PETITION FOR CERTIORARI AND IN EFFECT AFFIRMING THE RULINGS OF THE PUBLIC
RESPONDENT NLRC THAT THE PRIVATE RESPONDENTS WERE ILLEGALLY DISMISSED;

II. … RULING THAT THE PRIVATE RESPONDENTS ARE ENTITLED TO SEPARATION PAY AND FULL BACKWAGES;

III. … RULING THAT PETITIONER IS LIABLE FOR COSTS OF SUIT.9

Petitioner contends that the dismissal of private respondents was for a just and valid cause, pursuant to the provisions of
the company’s rules and regulations. It also alleges lack of jurisdiction on the part of the labor arbiter, claiming that the
cases should have been resolved through the grievance machinery, and eventually referred to voluntary arbitration, as
prescribed in the CBA.

For their part, private respondents contend that they were illegally dismissed from employment because management
discovered that they intended to form another union, and because they were vocal in asserting their rights. In any case,
according to private respondents, the petition involves factual issues that cannot be properly raised in a petition for
review on certiorari under Rule 45 of the Revised Rules of Court.10

In fine, there are three issues to be resolved: 1) whether private respondents were legally and validly dismissed; 2)
whether the labor arbiter and the NLRC had jurisdiction to decide complaints for illegal dismissal; and 3) whether
petitioner is liable for costs of the suit.

The first issue primarily involves questions of fact, which can serve as basis for the conclusion that private respondents
were legally and validly dismissed. The burden of proving that the dismissal of private respondents was legal and valid
falls upon petitioner. The NLRC found that petitioner failed to substantiate its claim that both private respondents
committed certain acts that violated company rules and regulations,11 hence we find no factual basis to say that private
respondents’ dismissal was in order. We see no compelling reason to deviate from the NLRC ruling that their dismissal
was illegal, absent a showing that it reached its conclusion arbitrarily.12 Moreover, factual findings of agencies exercising
quasi-judicial functions are accorded not only respect but even finality, aside from the consideration here that this Court
is not a trier of facts. 13

Anent the second issue, Article 217 of the Labor Code provides that labor arbiters have original and exclusive jurisdiction
over termination disputes. A possible exception is provided in Article 261 of the Labor Code, which provides that-

The Voluntary Arbitrator or panel of voluntary arbitrators shall have original and exclusive jurisdiction to hear and
decide all unresolved grievances arising from the interpretation or implementation of the Collective Bargaining
Agreement and those arising from the interpretation or enforcement of company personnel policies referred to in the
immediately preceding article. Accordingly, violations of a Collective Bargaining Agreement, except those which are gross
in character, shall no longer be treated as unfair labor practice and shall be resolved as grievances under the Collective
Bargaining Agreement. For purposes of this article, gross violations of Collective Bargaining Agreement shall mean
flagrant and or malicious refusal to comply with the economic provisions of such agreement.

The Commission, its Regional Offices and the Regional Directors of the Department of Labor and Employment shall not
entertain disputes, grievances or matters under the exclusive and original jurisdiction of the Voluntary Arbitrator or
panel of Voluntary Arbitrators and shall immediately dispose and refer the same to the grievance Machinery or
Arbitration provided in the Collective Bargaining Agreement.
But as held in Vivero vs. CA,14 "petitioner cannot arrogate into the powers of Voluntary Arbitrators the original and
exclusive jurisdiction of Labor Arbiters over unfair labor practices, termination disputes, and claims for damages, in the
absence of an express agreement between the parties in order for Article 262 of the Labor Code [Jurisdiction over other
labor disputes] to apply in the case at bar."

Moreover, per Justice Bellosillo:

It may be observed that under Policy Instruction No. 56 of the Secretary of Labor, dated 6 April 1993, "Clarifying the
Jurisdiction Between Voluntary Arbitrators and Labor Arbiters Over Termination Cases and Providing Guidelines for the
Referral of Said Cases Originally Filed with the NLRC to the NCMB," termination cases arising in or resulting from the
interpretation and implementation of collective bargaining agreements and interpretation and enforcement of company
personnel policies which were initially processed at the various steps of the plant-level Grievance Procedures under the
parties’ collective bargaining agreements fall within the original and exclusive jurisdiction of the voluntary arbitrator
pursuant to Art. 217 (c) and Art. 261 of the Labor Code; and, if filed before the Labor Arbiter, these cases shall be
dismissed by the Labor Arbiter for lack of jurisdiction and referred to the concerned NCMB Regional Branch for
appropriate action towards and expeditious selection by the parties of a Voluntary Arbitrator or Panel of Arbitrators
based on the procedures agreed upon in the CBA.

As earlier stated, the instant case is a termination dispute falling under the original and exclusive jurisdiction of the Labor
Arbiter, and does not specifically involve the application, implementation or enforcement of company personnel policies
contemplated in Policy Instruction No. 56. Consequently, Policy Instruction No. 56 does not apply in the case at bar.15 x x
x

Records show, however, that private respondents sought without success to avail of the grievance procedure in their
CBA.16 On this point, petitioner maintains that by so doing, private respondents recognized that their cases still fell under
the grievance machinery. According to petitioner, without having exhausted said machinery, the private respondents filed
their action before the NLRC, in a clear act of forum-shopping.17 However, it is worth pointing out that private
respondents went to the NLRC only after the labor arbiter dismissed their original complaint for illegal dismissal. Under
these circumstances private respondents had to find another avenue for redress. We agree with the NLRC that it was
petitioner who failed to show proof that it took steps to convene the grievance machinery after the labor arbiter first
dismissed the complaints for illegal dismissal and directed the parties to avail of the grievance procedure under Article
VII of the existing CBA. They could not now be faulted for attempting to find an impartial forum, after petitioner failed to
listen to them and after the intercession of the labor arbiter proved futile. The NLRC had aptly concluded in part that
private respondents had already exhausted the remedies under the grievance procedure.18 It erred only in finding that
their cause of action was ripe for arbitration.

In the case of Maneja vs. NLRC,19 we held that the dismissal case does not fall within the phrase "grievances arising from
the interpretation or implementation of the collective bargaining agreement and those arising from the interpretation or
enforcement of company personnel policies." In Maneja, the hotel employee was dismissed without hearing. We ruled that
her dismissal was unjustified, and her right to due process was violated, absent the twin requirements of notice and
hearing. We also held that the labor arbiter had original and exclusive jurisdiction over the termination case, and that it
was error to give the voluntary arbitrator jurisdiction over the illegal dismissal case.

In Vivero vs. CA,20 private respondents attempted to justify the jurisdiction of the voluntary arbitrator over a termination
dispute alleging that the issue involved the interpretation and implementation of the grievance procedure in the CBA.
There, we held that since what was challenged was the legality of the employee’s dismissal for lack of cause and lack of
due process, the case was primarily a termination dispute. The issue of whether there was proper interpretation and
implementation of the CBA provisions came into play only because the grievance procedure in the CBA was not observed,
after he sought his union’s assistance. Since the real issue then was whether there was a valid termination, there was no
reason to invoke the need to interpret nor question an implementation of any CBA provision.

One significant fact in the present petition also needs stressing. Pursuant to Article 26021 of the Labor Code, the parties to
a CBA shall name or designate their respective representatives to the grievance machinery and if the grievance is
unsettled in that level, it shall automatically be referred to the voluntary arbitrators designated in advance by the parties
to a CBA. Consequently only disputes involving the union and the company shall be referred to the grievance machinery
or voluntary arbitrators. In these termination cases of private respondents, the union had no participation, it having failed
to object to the dismissal of the employees concerned by the petitioner. It is obvious that arbitration without the union’s
active participation on behalf of the dismissed employees would be pointless, or even prejudicial to their cause.

Coming to the merits of the petition, the NLRC found that petitioner did not comply with the requirements of a valid
dismissal. For a dismissal to be valid, the employer must show that: (1) the employee was accorded due process, and (2)
the dismissal must be for any of the valid causes provided for by law.22 No evidence was shown that private respondents
refused, as alleged, to receive the notices requiring them to show cause why no disciplinary action should be taken against
them. Without proof of notice, private respondents who were subsequently dismissed without hearing were also deprived
of a chance to air their side at the level of the grievance machinery. Given the fact of dismissal, it can be said that the cases
were effectively removed from the jurisdiction of the voluntary arbitrator, thus placing them within the jurisdiction of the
labor arbiter. Where the dispute is just in the interpretation, implementation or enforcement stage, it may be referred to
the grievance machinery set up in the CBA, or brought to voluntary arbitration. But, where there was already actual
termination, with alleged violation of the employee’s rights, it is already cognizable by the labor arbiter.23

In sum, we conclude that the labor arbiter and then the NLRC had jurisdiction over the cases involving private
respondents’ dismissal, and no error was committed by the appellate court in upholding their assumption of jurisdiction.

However, we find that a modification of the monetary awards is in order. As a consequence of their illegal dismissal,
private respondents are entitled to reinstatement to their former positions. But since reinstatement is no longer feasible
because petitioner had already closed its shop, separation pay in lieu of reinstatement shall be awarded.24 A terminated
employee’s receipt of his separation pay and other monetary benefits does not preclude reinstatement or full benefits
under the law, should reinstatement be no longer possible.25 As held in Cariñ o vs. ACCFA:26

Acceptance of those benefits would not amount to estoppel. The reason is plain. Employer and employee, obviously, do
not stand on the same footing. The employer drove the employee to the wall. The latter must have to get hold of the
money. Because out of job, he had to face the harsh necessities of life. He thus found himself in no position to resist money
proffered. His, then, is a case of adherence, not of choice. One thing sure, however, is that petitioners did not relent their
claim. They pressed it. They are deemed not to have waived their rights. Renuntiato non praesumitur.

Conformably, private respondents are entitled to separation pay equivalent to one month’s salary for every year of
service, in lieu of reinstatement.27 As regards the award of damages, in order not to further delay the disposition of this
case, we find it necessary to expressly set forth the extent of the backwages as awarded by the appellate court. Pursuant
to R.A. 6715, as amended, private respondents shall be entitled to full backwages computed from the time of their illegal
dismissal up to the date of promulgation of this decision without qualification, considering that reinstatement is no longer
practicable under the circumstances.28

Having found private respondents’ dismissal to be illegal, and the labor arbiter and the NLRC duly vested with jurisdiction
to hear and decide their cases, we agree with the appellate court that petitioner should pay the costs of suit.

WHEREFORE, the petition is DENIED for lack of merit. The decision of the Court of Appeals in CA-G.R. SP No. 52780 is
AFFIRMED with the MODIFICATION that petitioner is ordered to pay private respondents (a) separation pay, in lieu of
their reinstatement, equivalent to one month’s salary for every year of service, (b) full backwages from the date of their
dismissal up to the date of the promulgation of this decision, together with (c) the costs of suit.

SO ORDERED.
G.R. No. 197763, December 07, 2015
SMART COMMUNICATIONS, INC., MR. NAPOLEON L. NAZARENO, AND MR. RICKY P. ISLA, Petitioners, v. JOSE LENI Z.
SOLIDUM, Respondent.

G.R. No. 197836

JOSE LENI Z. SOLIDUM, Petitioner, v. SMART COMMUNICATIONS, INC., MR. NAPOLEON L. NAZARENO, AND MR.
RICKY P. ISLA, Respondent.

VELASCO JR., J.:

The Case

These are consolidated petitions filed under Rule 45 of the Rules of Court assailing the Decision dated April 4, 20111 and
Resolution dated July 14, 20112 of the Court of Appeals (CA) in CA-G.R. SP No. 109765 entitled Jose Leni Z. Solidum v.
National Labor Relations Commission (First Division), Smart Communications, Inc., Napoleon L. Nazareno and Ricky P.
Isla. The CA Decision affirmed with modification the Resolution dated January 26, 2009 and Decision dated May 29, 2009
of the National Labor Relations Commission (NLRC) in NLRC Case No. 00-11-09564-05.

The Facts

The facts as found by the CA are as follows:chanRoblesvirtualLawlibrary

In an Employment Contract dated April 26, 2004,3 Smart Communications, Inc. (Smart) hired Jose Leni Solidum (Solidum)
as Department Head of Smart Prepaid/Buddy Activations under the Product Marketing Group. Existing company
procedures provide that a department head shall approve project proposals coming from his marketing assistants and
product managers/officers. Once approved, a finance officer will assign a reference number to the project with a stated
budget allocation. If the Company decides to engage the services of a duly accredited creative agency, the department
head will coordinate with it to discuss the details of the project. The implementation details and total amount of the
project will then be included in a Cost Estimate (CE) submitted to the Company, routed for approval, and returned to the
selected agency for implementation. After the project is carried out, the agency will bill the Company by sending the CE
with attached invoices and other supporting documents.

On September 21, 2005, Solidum received a Notice to Explain of even date4 from the Company charging him with acts of
dishonesty and breach of trust and confidence. In summary, he was charged with violating "various company policies by
misrepresenting and using his position and influence in his grant plot to defraud Smart by conceptualizing fictitious
marketing events, appointing fictitious advertising agencies to supposedly carry out marketing events and submitting
fictitious documents to make it appear that the marketing events transpired."5 He was charged with the following
infractions: (1) falsification and/or knowingly submitting falsified contents of reports/documents relative to his duties
and responsibilities; (2) obtaining through fraudulent means materials, goods or services from the Company; (3) failing or
refusing to disclose to the Company any existing or future dealings, transactions, relationships, etc. posing or would pose
possible conflict of interest; (4) other forms of deceit, fraud, swindling, and misrepresentation committed by an employee
against the company or its representative; and (5) fraud or willful breach of trust in relation to transactions covered by
Invoice No. 2921 and CE No. 2005-533 as well as CE Nos. 2005-413, 2005-459, 2005-461, 2005-526, 2005-460, 2005-552
and 2005-527 that were approved/noted by him. Solidum received a copy of the Notice on the same date. Pending
administrative investigation, Solidum was placed under preventive suspension without pay for a period of thirty (30)
days.

In a letter dated September 26, 2005,6 Solidum denied the charges and claimed that he never defrauded nor deceived the
Company in his transactions.

Continued audit investigation, however, revealed that Solidum approved/noted several CEs covering activities for which
payments were made but did not actually carried out. Unaccredited third parties were also engaged in the
implementation of the projects. Thus, the Company issued another Notice to Explain dated October 21, 20057 to Solidum,
this time covering the following additional CEs: 2005-416, 2005-480, 2005-481, 2005-479, 2005-512, 2005-513, and
2005-533. Solidum was again preventively suspended for another ten (10) days. Further, the Company scheduled the
administrative investigation of the case on October 26, 2005.
Solidum then sent a letter dated October 24, 20058 to the Company requesting copies of the pertinent documents so he
can prepare an intelligible explanation. In another letter dated October 26, 2005,9 Solidum stated that the investigation is
highly suspicious and his extended suspension imposed undue burden. He also reserved his right to present evidence. In
his last letter dated October 28, 2005,10 Solidum declared that he shall no longer receive or entertain notices or
memorandum, except the final decision resolving the administrative charges against him.

Thereafter, the Company issued a letter dated November 2, 2005, alleging that Solidum refused to accept the documents
that he had requested. Using this allegation, the Company imposed an additional preventive suspension often (10) days
on Solidum.

Based on the available evidence, the Company decided to dismiss Solidum for breach of trust in a Notice of Decision dated
November 9, 2005.11 Corollarily, a Notice of Termination was served on him on November 11, 2005.

Aggrieved, Solidum filed a complaint dated November 19, 2005 for illegal suspension and dismissal with money claims
before the Arbitration Branch of the NLRC claiming that his extended suspension and subsequent termination were
without just cause and due process.

In a Decision dated July 3, 2006,12 the labor arbiter declared that the extended period of suspension without pay was
illegal and that Solidum was unjustly dismissed from work without observance of procedural due process. He was
ordered reinstated and was awarded backwages and monetary claims. The labor arbiter ratiocinated that the ground of
breach of trust and confidence is restricted to managerial employees; however, no substantial evidence was presented to
prove that Solidum has the prerogatives akin to a manager other than his titular designation as department head.

The Company appealed the adverse decision of the labor arbiter to the NLRC but was denied for having been filed out of
time and/or for non-perfection, thus:
Records show that respondents received a copy of the Decision on "July 10, 2006" (See Registry Return Receipt, p. 561,
Record) However, respondents filed their appeal only on "July 25, 2006" x x x already beyond the reglementary ten (10)
calendar day period for filing an appeal to the Commission. x x x

Moreover, perusal of the appeal shows that the appeal bond attached to it is not accompanied by a security deposit or
collateral. The CERTIFICATE OF NO COLLATERAL x x x that was submitted by the bonding company stating that the bond
was issued on (sic) behalf of respondent SMART "without collateral because they are our valued client" and that "[t]he
company declares its commitment to honor the validity of the foregoing bond notwithstanding the absence of collateral"
does not serve any purpose other than an admission that the security deposit or collateral requirement under Section 6,
Rule VI of the Revised Rules of [Procedure of the NLRC for perfecting an appeal was not complied with. Needless to state,
the absence of a security deposit or collateral securing the bond renders the appeal legally
infirm.13ChanRoblesVirtualawlibrary
In its motion for reconsideration, the Company insisted that the appeal was filed within the reglementary period
considering that it received the labor arbiter's decision only on July 13, 2006 and not July 10, 2006. It presented among
others the Certification from Makati Central Post Office, the pertinent page of the letter carrier's Registry Book, and the
respective affidavit of the letter carrier and the Company's receiving clerk. It added that in case of conflict between the
registry receipt and the postmaster's certification, the latter should prevail. Likewise, the Company maintained that the
surety bond was secured by its goodwill and the alleged lack of collateral or security will not render the bond invalid in
view of the surety's unequivocal commitment to pay the monetary award.

Finding merit in the motion, the NLRC issued a Resolution dated January 26, 200914 reversing its earlier ruling and giving
due course to the appeal. It upheld the certification of the postmaster over the registry receipt and found that there was
substantial compliance with the bond requirement, viz:
Given the factual milieu, the Commission rules that respondents' appeal was indeed filed within the ten (10) day period x
x x. Since the Decision [of the Labor Arbiter] dated July 3, 2006 was received by respondents on July 13, 2006,
respondents have (sic) effectively until July 25, 2006 (considering that July 23 was a Sunday, and July 24 was a declared
nonworking day) x x x.

xxxx

As to the absence of security deposit or collateral, the Commission x x x finds that respondents were able to comply
substantially with the pre-requisite for the perfection of appeal.

x x x While the appeal bond was posted without security or collateral, the Certification dated July 20, 2006, issued by the
bonding company attests to the latter's "commitment to honor the validity of the foregoing bond notwithstanding the
absence of collateral." Otherwise stated, the very purpose of a security or collateral should be deemed served considering
the guarantee of the bonding company to pay the entire amount of the bond in the event respondents suffer an adverse
disposition of their appeal. It matters not that the bond was issued on behalf of respondents without collateral for after
all, the bond is accompanied by a declaration under oath bearing the bonding company's commitment to honor the
validity of the surety bond and attesting that the surety bond is genuine and shall be in effect until the final disposition of
the case.
The NLRC likewise reversed the labor arbiter's decision. It ruled that the seriousness of Solidum's infractions justified the
additional period of suspension. It added that the labor arbiter erred in declaring Solidum's dismissal illegal and without
just cause on the basis that he is not a managerial employee. On the contrary, overwhelming evidence showed that
Solidum holds a position of trust and has violated various company policies. Finally, the NLRC found that Solidum was
accorded procedural due process. The dispositive portion of the Resolution thus reads:
WHEREFORE, the foregoing considered, the Commission hereby resolves as follows:
complainant's Motion to Inhibit dated June 13, 2008 is DENIED for lack of merit.
respondents' Motion for Reconsideration dated July 27, 2007 is GRANTED and their instant appeal dated July 25, 2006 is
given DUE COURSE.

the Commission's Resolution dated July 4, 2007 is SET ASIDE and VACATED.

the appealed Decision a quo dated July 3, 2006 is SET ASIDE and new one is ENTERED dismissing the complaint below for
lack of merit.
SO ORDERED.
Thus, Solidum appealed to the CA. The CA then rendered the assailed Decision dated April 4, 2011 affirming with
modification the Decision of the NLRC. The dispositive portion of the CA Decision reads:
FOR THESE REASONS, the Court AFFIRMS the NLRC Resolution dated January 26, 2009 with the MODIFICATION that
petitioner Jose Leni Solidum be paid his salaries and benefits which accrued during the period of his extended preventive
suspension.

SO ORDERED.
From such Decision both parties moved for reconsideration. The CA denied such Motions in a Resolution dated July 14,
2011. From such ruling of the appellate court, both parties appealed. Hence, the instant petitions.

The Issues

In G.R. No. 197763, Smart raises the following issues:

(A)

The Court of Appeals gravely erred in declaring illegal the second preventive suspension imposed by petitioner Smart
upon the respondent.

(B)

The Court of Appeals gravely erred in declaring that petitioner Smart may not place the respondent under another
preventive suspension after discovery of additional offenses notwithstanding that the offenses committed by the
respondent warrant another preventive suspension.15ChanRoblesVirtualawlibrary
In G.R. No. 197836, Solidum raises the following issues, to wit:
A.

Whether or not the public respondent Court of Appeal's Decision dated April 4, 2011 and Resolution dated July 14, 2011,
ruling that the appeal of private respondent Smart filed with public respondent NLRC was well taken within the
reglementary period, is in accordance with law, rules and prevailing jurisprudence.

B.

Whether or not the public respondent Court of Appeal's Decision dated April 4, 2011 and Resolution dated July 14, 2011,
considering private respondent Smart's appeal with the NLRC as perfected by upholding the validity of the appeal bond
posted by said private respondent Smart even if there was no security deposit or collateral, is in accordance with Section
4 and 6, Rule VI of the 2005 NLRC Revised Rules of Procedure, NLRC Memorandum Circular 1-01, series of 2004, and
prevailing jurisprudence.

C.

Whether or not the public respondent Court of Appeals gravely erred in failing to consider the evidence petitioner
showing that even up to the present, or more than five (5) years after the expiration of the 10-day reglementary period to
file a perfected appeal with the NLRC on July 20, 2006, private respondent Smart still fails to provide petitioner with a
certified true copy of the surety bond and copy of the security deposit required for the perfection of the appeal under
Section 6, Rule VI of the 2005 NLRC Revised Rules of Procedure.

D.

Whether or not the public respondent Court of Appeals committed grave abuse of discretion in upholding the validity of
the appeal bond filed by private respondent Smart despite the fact that both the appeal bond and collateral securing the
said bond had long expired.

E.

Whether or not the public respondent Court of Appeals gravely erred in ruling that the technical rules are not controlling
in any proceeding before the NLRC.

F.

Whether or not the public respondent Court of Appeals gravely erred in affirming the Resolution of public respondent
NLRC dated January 26, 2009 which set aside the decision of the labor arbiter dated July 3, 2006 declaring that
petitioner's preventive suspension for more than 30 days without pay is illegal and tantamount to constructive dismissal.

G.

Whether or not the public respondent Court of Appeals gravely erred in finding that petitioner was afforded procedural
due process by private respondent under the Two-Notice Rule.
H.

Whether or not the public respondent Court of Appeals gravely erred in finding that those irregularities committed by
petitioner were proven by documentary evidence and testimonies of his product managers and marketing assistants
despite the fact that none of those product managers and marketing assistants appeared and testified during the hearings
and, most importantly, during the hearing for cross-examination on their submitted affidavits and documentary evidence
as scheduled by the labor arbiter upon specific request and manifestation by the petitioner invoking his constitutional
right to cross-examine.

I.

Whether or not the public respondent Court of Appeals gravely erred in finding that herein petitioner is a fiduciary
employee and is therefore covered by the trust and confidence rule to a wider latitude.

J.

Whether or not the public respondent Court of Appeals gravely erred in finding that petitioner is a managerial employee.

K.

Whether or not the public respondent Court of Appeals gravely erred in finding that there was just and valid cause to
terminate the petitioner from the service.16ChanRoblesVirtualawlibrary
The Court's Ruling

The petitions must be denied.

Solidum's 2nd preventive suspension is valid

In G.R. No. 197763, Smart contended:

On the same vein, the respondent was validly placed under second preventive suspension for the reason that pending
investigation of separate and distinct set of offenses committed by the respondent as contained in the second Notice to
Explain dated 21 October 2005 (Annex F hereof), his continued presence in the company premises during the
investigation poses serious and imminent threat to the life or property of the employer and co-
workers.17ChanRoblesVirtualawlibrary
On the other hand, Solidum claims that his preventive suspension of 20 days is an extension of his initial 30-day
suspension and, hence, illegal and constitutes constructive dismissal.

Smart's position is impressed with merit.

The relevant provisions regarding preventive suspensions are found in Sections 8 and 9 of Rule XXIII, Book V of the
Omnibus Rules Implementing the Labor Code (Omnibus Rules), as amended by Department Order No. 9, Series of 1997,
which read as follows:
Section 8. Preventive suspension. The employer may place the worker concerned under preventive suspension only if his
continued employment poses a serious and imminent threat to the life or property of the employer or of his co-workers.

Section 9. Period of suspension. No preventive suspension shall last longer than thirty (30) days. The employer shall
thereafter reinstate the worker in his former or in a substantially equivalent position or the employer may extend the
period of suspension provided that during the period of extension, he pays the wages and other benefits due to the
worker. In such case, the worker shall not be bound to reimburse the amount paid to him during the extension if the
employer decides, after completion of the hearing, to dismiss the worker, (Emphasis supplied)
By a preventive suspension an employer protects itself from further harm or losses because of the erring employee. This
concept was explained by the Court in Gatbonton v. National Labor Relations Commission:18
Preventive suspension is a disciplinary measure for the protection of the company's property pending investigation of
any alleged malfeasance or misfeasance committed by the employee. The employer may place the worker concerned
under preventive suspension if his continued employment poses a serious and imminent threat to the life or property of
the employer or of his co-workers. However, when it is determined that there is no sufficient basis lo justify an
employee's preventive suspension, the latter is entitled to the payment of salaries during the time of preventive
suspension. (Emphasis supplied)
Such principle was applied by the Court in Bluer Than Blue Joint Ventures/Mary Ann Dela Vega v. Esteban,19 where it
was ruled:
Preventive suspension is a measure allowed by law and afforded to the employer if an employee's continued employment
poses a serious and imminent threat to the employer's life or property or of his co-workers. It may be legally imposed
against an employee whose alleged violation is the subject of an investigation.

In this case, the petitioner was acting well within its rights when it imposed a 10-day preventive suspension on Esteban.
While it may be that the acts complained of were committed by Esteban almost a year before the investigation was
conducted, still, it should be pointed out that Esteban was performing functions that involve handling of the petitioner's
property and funds, and the petitioner had every right to protect its assets and operations pending Esteban's
investigation. (Emphasis supplied)
While the Omnibus Rules limits the period of preventive suspension to thirty (30) days, such time frame pertains only to
one offense by the employee. For an offense, it cannot go beyond 30 days. However, if the employee is charged with
another offense, then the employer is entitled to impose a preventive suspension not to exceed 30 days specifically for the
new infraction. Indeed, a fresh preventive suspension can be imposed for a separate or distinct offense. Thus, an employer
is well within its rights to preventively suspend an employee for other wrongdoings that may be later discovered while
the first investigation is ongoing.

As in this case, Smart was able to uncover other wrongdoings committed by Solidum during the investigation for the
initial charges against him. These newly discovered transgressions would, thus, require an additional period to
investigate. The first batch of offenses was captured in the September 21, 2005 Notice to Explain issued by Smart. The
notice covers fraud or willful breach of trust in relation to transactions covered by Invoice No. 2921 and CE No. 2005-533
as well as CE Nos. 2005-413, 2005-459, 2005-461, 2005-526, 2005-460, 2005-552 and 2005-527 that were noted by him.
For these offenses, Solidum was issued a preventive suspension without pay for 30 days.

On October 21, 2005, Smart, however, issued another notice to explain to Solidum this time involving additional CEs:
2005-416, 2005-480, 2005-481, 2005-479, 2005-512, and 2005-513. Solidum was again preventively suspended for
twenty (20) days. The preventive suspension of 20 days is not an extension of the suspension issued in relation to the
September 21, 2005 Notice to Explain but is a totally separate preventive suspension for the October 21, 2005 Notice to
Explain. As earlier pointed out, the transactions covered by the 30-day preventive suspension are different from that
covered by the 20-day preventive suspension. Such being the case the court a quo was incorrect when it treated said
suspension as an "extension" and, consequently, it is a miscue to award Solidum the payment of back salaries and benefits
corresponding to the 20-day preventive suspension of Solidum.

As to the issues raised by Solidum in G.R. No. 197836, the same are bereft of merit.

Smart's appeal from the Decision of the labor arbiter was filed within the reglementary period

Solidum contends that Smart's motion for reconsideration of the labor arbiter's Decision was filed out of time. The issue
here is: When did Smart receive a copy of the Decision? The confusion originated from the date stamped by the receiving
clerk of Smart on the receiving copy of the Decision as July 10, 2006. Smart claims that the stamped date was erroneous as
it actually received a copy of the Decision only on July 13, 2006. Such claim is supported by the certification from the
postmaster of the Makati Central Post Office, the letter carrier's Registry Book, and the affidavits of the letter carrier and
Smart's receiving clerk. With such overwhelming evidence, there can be no other conclusion except that Smart received a
copy of the Decision on July 13, 2006 and filed their motion for reconsideration within the prescribed 10-day period on
July 25, 2006, as July 24, 2006 fell on a Sunday. Thus, Smart's Motion was timely filed.

Smart substantially complied with the requirements of an appeal bond

Next, Solidum questions the validity of the appeal bond filed by Smart, pointing out the lack of a proof of security deposit
or collateral necessary to perfect its appeal to the NLRC. To recall, Section 6, Rule VI of the 2005 NLRC Revised Rules of
Procedure states:
Section 6. Bond. - In case the decision of the Labor Arbiter or the Regional Director involves a monetary award, an appeal
by the employer may be perfected only upon the posting of a bond, which shall either be in the form of cash deposit or
surety bond equivalent in amount to the monetary award, exclusive of damages and attorney's fees.

In case of surety bond, the same shall be issued by a reputable bonding company duly accredited by the Commission or
the Supreme Court, and shall be accompanied by original or certified true copies of the following:
xxxx

c) proof of security deposit or collateral securing the bond: provided, that a check shall not be considered as an acceptable
security. (Emphasis supplied)
Thus, Solidum claims that the lack of proof of security deposit or collateral securing the bond renders the bond irregular
and the appeal legally infirm.

We disagree.

As aptly found by the NLRC, substantial compliance with the rules on appeal bonds has been repeatedly held by this Court
to be sufficient for the perfection of an appeal:
The perfection of an appeal within the reglementary period and in the manner prescribed by law is jurisdictional, and
noncompliance with such legal requirement is fatal and effectively renders the judgment final and executory. As provided
in Article 223 of the Labor Code, as amended, in case of a judgment involving a monetary award, an appeal by the
employer may be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly
accredited by the Commission in the amount equivalent to the monetary award in the judgment appealed from.

However, not only in one case has this Court relaxed this requirement in order to bring about the immediate and
appropriate resolution of cases on the merits. In Quiambao v. National Labor Relations Commission, this Court allowed
the relaxation of the requirement when there is substantial compliance with the rule. Likewise, in Ong v. Court of Appeals,
the Court held that the bond requirement on appeals may be relaxed when there is substantial compliance with the Rules
of Procedure of the NLRC or when the appellant shows willingness to post a partial bond. The Court held that "while the
bond requirement on appeals involving monetary awards has been relaxed in certain cases, this can only be done where
there was substantial compliance of the Rules or where the appellants, at the very least, exhibited willingness to pay by
posting a partial bond."20ChanRoblesVirtualawlibrary
Furthermore, considering that it is the NLRC that has interpreted its own rules on this matter, the Court is inclined to
accept such interpretation. The Court has held, "By reason of the special knowledge and expertise of administrative
agencies over matters falling under their jurisdiction, they are in a better position to pass judgment on those matters."21
Moreover, the NLRC properly relaxed the rules on appeal bonds.

The NLRC has the power and authority to promulgate rules of procedure under Article 218(a) of the Labor Code. As such,
it can suspend the rules if it finds that the interests of justice will be better served if the strict compliance with the rules
should be relaxed. In short, a substantial compliance may be allowed by the NLRC especially in this case where the party
which submitted the bond is a multibillion company which can easily pay whatever monetary award may be adjudged
against it. Even if there is no proof of security deposit or collateral, the surety bond issued by an accredited company is
adequate to answer for the liability if any to be incurred by Smart.

Solidum is not entitled to reinstatement

Next, Solidum claims that due to the extension of his period of preventive suspension, he must be considered as having
been constructively dismissed and entitled to reinstatement and backwages. To support his claim, Solidum cites
Maricalum Mining Corporation v. Decorion22 Such case, however, is not factually on all fours with the instant case. In
Maricalum, the Court ruled that Decorion was illegally constructively dismissed, which is why he was entitled to
reinstatement. Here, Solidum was validly dismissed for loss of trust and confidence. Thus, his reliance on Maricalum is
misplaced and will not justify his reinstatement.

As to Solidum's claim of denial of due process, such issues are factual in nature. This Court, not being a trier of facts, will
not pass upon such issues, as ruled in Nahas v. Olarte:23
The Court is not a trier of facts; factual findings of the labor tribunals when affirmed by the CA are generally accorded not
only respect, but even finality, and are binding on this Court.
Notably, Solidum's allegation that he was denied his right to counsel was passed upon the NLRC in this wise:
Similarly, the Commission is not convinced with Labor Arbiter Pati's finding that the complainant was deprived on his
right to counsel when he was not allowed to be assisted by his counsel at the alleged investigation held on September 21,
2005. Other than his bare claim, there is no evidence on record buttressing complainant's claim.24 x x x (Emphasis
supplied)
Similarly, Solidum contends that he did not receive other documents necessary for him to be apprised of the charges
against him. Such are also issues of fact. The NLRC ruled on this matter in this wise:
The Commission is likewise not convinced with the finding of Labor Arbiter Pati that complainant was deprived of due
process when he was not furnished copies of the documents he referred to in his letter dated October 24, 2005 thereby
prompting him not to attend the hearings on October 26 and 28, 2005. There is evidence to show that respondents
furnished copies of the documents requested by complainant but which the latter refused to received when they were
sent to his residence.25 x x x (Emphasis supplied)
It is not necessary that witnesses be cross-examined by counsel of the adverse party in proceedings before the labor
arbiter

Solidum further alleges that he was denied the right to cross-examine the witnesses who submitted affidavits in favor of
Smart; thus, the affidavits must be considered hearsay and inadmissible. In support of such contention, Solidum cites
Naguit v. National Labor Relations Commission26

Such contention is misplaced.

The controlling jurisprudence on the matter is the ruling in the more recent Philippine Long Distance Telephone
Company v. Honrado,27 where the Court ruled:
It is hornbook in employee dismissal cases that "[t]he essence of due process is an opportunity to be heard, or as applied
to administrative proceedings, an opportunity to explain one's side x x x. A formal or trial type hearing is not at all times
and in all instances essential to due process, the requirements of which are satisfied where the parties are afforded fair
and reasonable opportunity to explain their side of the controversy." Neither is it necessary that the witnesses be cross-
examined by counsel for the adverse party. (Emphasis supplied)
The Court explained the reason why cross-examination is not required in the proceedings before the labor arbiter in
Reyno v. Manila Electric Company,28 citing Rabago v. National Labor Relations Commission29 where the Court ruled:
x x x The argument that the affidavit is hearsay because the affiants were not presented for cross-examination is not
persuasive because the rules of evidence are not strictly observed in proceedings before administrative bodies like the
NLRC where decisions may be reached on the basis of position papers only. x x x
Clearly, the alleged denial of Solidum's request to cross-examine the witnesses of Smart does not render their affidavits
hearsay. Thus, these pieces of evidence were properly considered by the labor tribunal.

Solidum was a managerial employee of Smart

Next, Solidum argues that he is not a fiduciary or managerial employee and, therefore, cannot be legally dismissed on the
ground of loss of trust and confidence. Article 212(m) of the Labor Code defines a Managerial Employee as:
(m) 'Managerial employee' is one who is vested with powers or prerogatives to lay down and execute management
policies and/or to hire, transfer, suspend, lay-off recall, discharged, assign or discipline employees. x x x
The NLRC found that Solidum was a managerial employee in this wise:
The facts on hand indubitably show that complainant occupied the position of Department Mead and held the same with
trust and confidence as required him under his employment contract. As Department Head of the Smart Buddy
Activations and Usage Group, complainant led and directed his subordinates composed of product managers, product
officers, and senior marketing assistants to achieving the company's marketing goals. Moreover, complainant appears to
have the authority to devise, implement and control strategic and operational policies of the Department he was then
heading. Likewise, it cannot be denied that complainant's Department has a budget of millions of pesos over which he
exercises the power to allocate to different marketing projects conceptualized by him and/or his subordinates. The
records would also show that for complainant's services, he received a monthly salary in the hefty amount of
P233,910.00, monthly allowance of P19,000.00, and bonuses and incentives of more than P7 Million.

Under the foregoing facts, complainant's duties and responsibilities, coupled with the amount of salaries he is receiving
and other benefits he is entitled to, certainly show that his position of Department Head is managerial in nature.30
(Emphasis supplied)
Solidum denies that he is a managerial employee by stating that just because he directed subordinates, he should be
considered a managerial employee. He also argues that just because he had a large salary does not mean that he was a
managerial employee. Finally, Solidum denies having the power to lay down and execute management policies.

Notably, however, Solidum does not deny having "the authority to devise, implement and control strategic and
operational policies of the Department he was then heading." This is clearly the authority to lay down and execute
management policies. Consequently, the CA affirmed these findings. Thus, the NLRC and the CA correctly found that
Solidum was a managerial employee. As such, he may be validly dismissed for loss of trust and confidence.

The rulings of trial court in criminal cases generally do not bind the labor tribunals

Further, Solidum alleges that he did not commit any dishonesty-related offense that would justify Smart's loss of
confidence in him. He supports such allegation with the rulings of two (2) trial courts of Makati City that ruled that
Solidum did not commit any fraud in the subject transactions.

Solidum's reliance on the rulings of the trial courts is misplaced. His acquittal before such courts cannot bind the labor
tribunal.

In Amadeo Fishing Corporation v. Nierra,31 the Court ruled that "an acquittal in criminal prosecution does not have the
effect of extinguishing liability for dismissal on the ground of breach of trust and confidence." While in Vergara v. National
Labor Relations Commission,32 the Court was even more succinct and ruled that the filing of the complaint by. the public
prosecutor is a sufficient ground for a dismissal of an employee for loss of trust and confidence, to wit:
The Court finds adequate basis for private respondent's loss of trust and confidence in petitioner, x x x Besides, the
evidence supporting the criminal charge, found after preliminary investigation as sufficient to show prima facie guilt,
constitutes just cause for his termination based on loss of trust and confidence. To constitute just cause, petitioner's
malfeasance did not require criminal conviction. Verily, petitioner was dismissed not because he was convicted of theft,
but because his dishonest acts were substantially proven, (Emphasis supplied)
In the instant case, both the NLRC and the CA found Solidum guilty of the alleged acts that constituted grounds for his
dismissal for loss of trust and confidence, which were summarized by the CA as follows:
First, Solidum noted two versions of CE No. 2005-533 with description "Buy SIM Download All You Can" but containing
different particulars. Specifically, the second CE included charges from various radio stations which are not found in the
first CE. However, the Company discovered that the only projects with approved radio components were the "Mindanao
Kolek Mo To Promo" which ended on July 15, 2005; the "Visayas Kolek Mo To Promo" which ended on August 15, 2005,
and the "Smart Download and Win" with promo period from August 22 to October 22, 2005. The "Buy SIM Download All
You Can" has no approved radio component. Moreover, Solidum submitted certificates of performance from various radio
stations which are outside of the promo periods.

Second, in the implementation of several projects, Solidum endorsed unaccredited third parties, which is already a
violation of established company policies. One of these corporations is M&M Events, Inc., which turned out as a non-
existing corporation. The Smart Senior Product Officer Ma. Luisa Suguitan even testified that she has not worked with an
agency such as M&M Events, Inc. Worse, the said entity cannot be found in its declared business address and the VAT
registration number appearing on its sales invoice is registered under a different company. Moreover, Solidum approved
CE No. 2005-459 and CE No. 2005-460, pertaining to different projects, but with attached invoices from M&M Events, Inc.
bearing the same date and amount. Finally, Solidum deviated from the existing company procedures. He presented CEs to
his subordinate product manager for signature with his approval already affixed. Later, it was discovered that the duly
signed CEs were altered without the knowledge of the product manager. He even dictated to the agency the title to be
used and the details that should be included in the CEs. The CEs were then forwarded directly to him instead of the Smart
marketing point person. Solidum also charged certain projects against the budget of another approved program.
Such findings of the NLRC and affirmed by the CA are binding on this Court. Thus, Solidum's petition must also fail on this
point.

WHEREFORE, the petition of Jose Leni Z. Solidum in G.R. No. 197836 is hereby DENIED. The petition of petitioners Smart
Communications, Inc, et al. in G.R. No. 197763 is PARTIALLY GRANTED. The Court of Appeals Decision dated April 4, 2011
is hereby AFFIRMED with MODIFICATION that the award of salaries and benefits that accrued during the period of
extended preventive suspension is DELETED.

No costs.

SO ORDERED.
G.R. No. 130866 September 16, 1998
ST. MARTIN FUNERAL HOME, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and BIENVENIDO
ARICAYOS, respondents.

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. Martin's 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 then 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." (Emphasis 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 impassè, 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 . . . the Labor Code of the Philippines under Presidential Decree No. 442, as amended, . . . ." 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 xxx 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:

. . . 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 people's 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 xxx 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. (Emphasis supplied).

xxx xxx 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 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 hence forth 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.

G.R. No. 143813 July 7, 2003

KING INTEGRATED SECURITY SERVICES, INC., and/or MINA KING, petitioners, vs. GALO S. GATAN, respondent.

SANDOVAL-GUTIERREZ, J.:

For resolution is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended,
assailing the Decision1 dated November 26, 1999 and the Resolution2 dated June 26, 2000 rendered by the Court of
Appeals in CA-G.R. SP No. 53985.

Galo S. Gatan, respondent, filed with the Labor Arbiter a complaint for illegal deduction and underpayment of wages
against King Integrated Security Services, Inc. and/or Mina King, petitioners, docketed as NLRC-NCR Case No. 04-
0264295.

Eventually, the Labor Arbiter rendered a Decision, the dispositive portion of which reads:

"WHEREFORE, respondent is hereby ordered to pay complainant herein his wage differential in the total amount of ONE
HUNDRED EIGHTY-FOUR THOUSAND SEVEN HUNDRED EIGHTY and 30/100 (P184,780.30) PESOS.

"SO ORDERED."

On appeal, the National Labor Relations Commission (NLRC) issued a Resolution modifying the Labor Arbiter’s Decision
by deleting the amount representing respondent’s wage differential for the period from November 2,1990 to February 10,
1992, pursuant to Article 291 of the Labor Code which provides that all money claims arising from employer-employee
relations shall be filed within three (3) years from the time the cause of action accrued, otherwise, they shall be forever
barred.

The NLRC Resolution, having become final and executory, the Labor Arbiter issued an order directing the issuance of a
writ of execution. From this order, petitioners interposed an appeal to the NLRC, but it was dismissed in a Resolution3
dated February 26, 1999. Their motion for reconsideration was denied in a Resolution4 dated April 26, 1999.

Forthwith, petitioners filed with the Court of Appeals a petition for certiorari, docketed as CA-G.R. SP No. 53985, assailing
the NLRC Resolution dismissing their appeal.

In a Decision dated November 26, 1999, the Court of Appeals dismissed the petition and affirmed with modification the
Resolutions of the NLRC, thus:

"WHEREFORE, the petition is DISMISSED and the assailed resolutions are AFFIRMED except as to the monetary award
covering the period from February 11, 1992 to April 9, 1992, which shall be deducted from the computation made by the
Research and Information Unit of the National Labor Relations Commission.

"SO ORDERED."

Petitioners filed a motion for partial reconsideration but it was denied for lack of merit in a Resolution dated June 26,
2000.

Petitioners alleged in the instant petition that the Court of Appeals erred: a) in disregarding their documentary evidence
showing that respondent received in full his monthly salary; and, b) in failing to consider his admission that his monthly
salary rates effective December 16, 1993 and April 1, 1994 were P5,029.16 and P5,397.97, respectively.

The petition lacks merit. We have ruled that an order of execution of a final and executory judgment is not appealable,
otherwise, there would be no end to a case.5
In Fabular vs. Court of Appeals,6 we held:

"The judgment in this case had long become final and had in fact, been executed. It is now beyond the power of the lower
court, or of this Court for that matter, to modify the same. Settled is the rule that after a judgment has become final, no
additions can be made thereto, and nothing can be done therewith except its execution; otherwise, there would be no end
to litigations, thus setting at naught the main role of courts of justice, which is to assist in the enforcement of the rule of
law and the maintenance of peace and order, by setting justiceable controversies with finality."

Yet, despite the fact that what is being assailed is the NLRC Resolution ordering the issuance of a writ of execution, still
the Court of Appeals gave due course to the petition for certiorari and evaluated the parties’ evidence. Clearly, the Court of
Appeals overstepped its jurisdiction.

Once a decision or resolution becomes final and executory, it is the ministerial duty of the court or tribunal to order its
execution. Such order, we repeat, is not appealable.

WHEREFORE, the petition is DENIED. The assailed Decision dated November 26, 1999 and Resolution dated June 26,
2000 of the Court of Appeals in CA-G.R. SP No. 53985 are SET ASIDE.

Costs against petitioners.

SO ORDERED.

G.R. No. 193484 January 18, 2012

HYPTE R. AUJERO, Petitioner, vs. PHILIPPINE COMMUNICATIONS SATELLITE CORPORATION, Respondent.

REYES, J.:

This is a Petition for Review under Rule 45 of the Rules of Court from the November 12, 2009 Decision1 and July 28, 2010
Resolution2 of the Court of Appeals (CA) in CA-G.R. SP No. 107233 entitled "Hypte R. Aujero v. National Labor Relations
Commission and Philippine Communications Satellite Corporation."

In its November 12, 2009 Decision, the CA dismissed the petitioner’s petition for certiorari under Rule 65 of the Rules of
Court from the National Labor Relations Commission’s (NLRC) July 4, 2008 and September 29, 2008 Resolutions, the
dispositive portion of which states:

WHEREFORE, the petition is DISMISSED. The assailed Resolutions dated July 4, 2008 and September 29, 2008 of public
respondent National Labor Relations Commission in NLRC NCR Case No. 00-07-08921-2004 [NLRC NCR CA No. 049644-
06] are AFFIRMED.

SO ORDERED.3

The petitioner filed a Motion for Reconsideration from the above Decision but this was likewise denied by the CA in its
July 28, 2010 Resolution.

The Antecedent Facts

It was in 1967 that the petitioner started working for respondent Philippine Communications Satellite Corporation
(Philcomsat) as an accountant in the latter's Finance Department. On August 15, 2001 or after thirty-four (34) years of
service, the petitioner applied for early retirement. His application for retirement was approved, effective September 15,
2001, entitling him to receive retirement benefits at a rate equivalent to one and a half of his monthly salary for every
year of service. At that time, the petitioner was Philcomsat's Senior Vice-President with a monthly salary of Two Hundred
Seventy-Four Thousand Eight Hundred Five Pesos (₱274,805.00).4

On September 12, 2001, the petitioner executed a Deed of Release and Quitclaim5 in Philcomsat’s favor, following his
receipt from the latter of a check in the amount of Nine Million Four Hundred Thirty-Nine Thousand Three Hundred
Twenty-Seven and 91/100 Pesos (₱9,439,327.91).6

Almost three (3) years thereafter, the petitioner filed a complaint for unpaid retirement benefits, claiming that the actual
amount of his retirement pay is Fourteen Million Fifteen Thousand and Fifty-Five Pesos (₱14,015,055.00) and the
₱9,439,327.91 he received from Philcomsat as supposed settlement for all his claims is unconscionable, which is more
than enough reason to declare his quitclaim as null and void. According to the petitioner, he had no choice but to accept a
lesser amount as he was in dire need thereof and was all set to return to his hometown and he signed the quitclaim
despite the considerable deficiency as no single centavo would be released to him if he did not execute a release and
waiver in Philcomsat's favor.7

The petitioner claims that his right to receive the full amount of his retirement benefits, which is equivalent to one and a
half of his monthly salary for every year of service, is provided under the Retirement Plan that Philcomsat created on
January 1, 1977 for the benefit of its employees.8 On November 3, 1997, Philcomsat and the United Coconut Planters
Bank (UCPB) executed a Trust Agreement, where UCPB, as trustee, shall hold, administer and manage the respective
contributions of Philcomsat and its employees, as well as the income derived from the investment thereof, for and on
behalf of the beneficiaries of the Retirement Plan.9
The petitioner claims that Philcomsat has no right to withhold any portion of his retirement benefits as the trust fund
created pursuant to the Retirement Plan is for the exclusive benefit of Philcomsat employees and Philcomsat had
expressly recognized that it has no right or claim over the trust fund even on the portion pertaining to its contributions.10
As Section 4 of the Trust Agreement provides:

Section 4 – The Companies, in accordance with the provisions of the Plan, hereby waive all their rights to their
contributions in money or property which are and will be paid or transferred to the Trust Fund, and no person shall have
any right in, or with respect to, the Trust Fund or any part thereof except as expressly provided herein or in the Plan. At
no time, prior to the satisfaction of all liabilities with respect to the participants and their beneficiaries under the Plan,
shall any part of the corpus or income of the Fund be used for or diverted to purposes other than for the exclusive benefit
of Plan participants and their beneficiaries.11

The petitioner calls attention to the August 15, 2001 letter of Philcomsat's Chairman and President, Mr. Carmelo Africa,
addressed to UCPB for the release of ₱9,439,327.91 to the petitioner and ₱4,575,727.09 to Philcomsat, which predated
the execution of his quitclaim on September 12, 2001.12 According to the petitioner, this indicates Philcomsat’s pre-
conceived plans to deprive him of a significant portion of his retirement pay.

On May 31, 2006, Labor Arbiter Joel S. Lustria (LA Lustria) issued a Decision13 in the petitioner’s favor, directing
Philcomsat to pay him the amount of ₱4,575,727.09 and ₱274,805.00, representing the balance of his retirement benefits
and salary for the period from August 15 to September 15, 2001, respectively. LA Lustria found it hard to believe that the
petitioner would voluntary waive a significant portion of his retirement pay. He found the consideration supporting the
subject quitclaim unconscionable and ruled that the respondent failed to substantiate its claim that the amount received
by the petitioner was a product of negotiations between the parties. Thus:

It would appear from the tenor of the letter that, rather that the alleged agreement, between complainant and respondent,
respondent is claiming payment for an "outstanding due to Philcomsat" out of the retirement benefits of complainant.
This could hardly be considered as proof of an agreement to reduce complainant’s retirement benefits. Absent any
showing of any agreement or authorization, the deductions from complainant’s retirement benefits should be considered
as improper and illegal.

If we were to give credence to the claim of respondent, it would appear that complainant has voluntarily waived a total
amount of [₱]4,575,727.09. Given the purpose of retirement benefits to provide for a retiree a source of income for the
remainder of his years, it defies understanding how complainant could accept such an arrangement and lose more than
[₱]4.5 million in the process. One can readily see the unreasonableness of such a proposition. By the same token, the
Quitclaim and Waiver over benefits worth millions is apparently unconscionable and unacceptable under normal
circumstances. The Supreme Court has consistently ruled that waivers must be fair, reasonable, and just and must not be
unconscionable on its face. The explanation of the complainant that he was presented with a lower amount on pain that
the entire benefits will not be released is more believable and consistent with evidence. We, therefore, rule against the
effectivity of the waiver and quitclaim, thus, complainant is entitled to the balance of his retirement benefits in the
amount of [₱]4,575,727.09.14

In its July 4, 2008 Resolution,15 the NLRC granted Philcomsat’s appeal and reversed and set aside LA Lustria’s May 31,
2006 Decision. The NLRC dismissed the petitioner’s complaint for unpaid retirement benefits and salary in consideration
of the Deed of Release and Quitclaim he executed in September 12, 2001 following his receipt from Philcomsat of the
amount of ₱9,439,327.91, which constitutes the full settlement of all his claims against Philcomsat. According to the NLRC,
the petitioner failed to allege, much less, adduce evidence that Philcomsat employed means to vitiate his consent to the
quitclaim. The petitioner is well-educated, a licensed accountant and was Philcomsat’s Senior Vice-President prior to his
retirement; he cannot therefore claim that he signed the quitclaim without understanding the consequences and
implications thereof. The relevant portions of the NLRC’s July 4, 2008 Resolution states:

After analyzing the antecedent, contemporaneous and subsequent facts surrounding the alleged underpayment of
retirement benefits, We rule that respondent-appellant have no more obligation to the complainant-appellee.

The complainant-appellee willingly received the check for the said amount, without having filed any objections nor
reservations thereto, and even executed and signed a Release and Quitclaim in favor of the respondent-appellant.
Undoubtedly, the quitclaim the complainant-appellee signed is valid. Complainant-appellee has not denied at any time its
due execution and authenticity. He never imputed claims of coercion, undue influence, or fraud against the respondent-
appellant. His statement in his reply to the respondent-appellant’s position paper that the quitclaim is void alleging that it
was obtained through duress is only an afterthought to make his claim appear to be convincing. If it were true,
complainant-appellee should have asserted such fact from the very beginning. Also, there was no convincing proof shown
by the complainant-appellee to prove existence of duress exerted against him. His stature and educational attainment
would both negate that he can be forced into something against his will.

It should be stressed that complainant-appellee even waited for a period of almost three (3) years before he filed the
complaint. If he really felt aggrieved by the amount he received, prudence dictates that he immediately would call the
respondent-appellant’s attention and at the earliest opportune shout his objections, rather than wait for years, before
deciding to claim his supposed benefits, [e]specially that his alleged entitlement is a large sum of money. Thus, it is
evident that the filing of the instant case is a clear case of afterthought, and that complainant-appellee simply had a
change of mind. This We cannot allow.

xxxx

In the instant case, having willingly signed the Deed of Release and Quitclaim dated September 12, 2001, it is hard to
conclude that the complainant-appellee was merely forced by the necessity to execute the quitclaim. Complainant-
appellee is not a gullible or unsuspecting person who can easily be tricked or inveigled and, thus, needs the extra
protection of law. He is well-educated and a highly experienced man. The release and quitclaim executed by the
complainant-appellee is therefore considered valid and binding on him and the respondent-appellant. He is already
estopped from questioning the same.16

Philcomsat’s appeal to the NLRC from LA Lustria’s May 31, 2006 Decision was filed and its surety bond posted beyond the
prescribed period of ten (10) days. On June 20, 2006, a copy of LA Lustria’s Decision was served on Maritess Querubin
(Querubin), one of Philcomsat’s executive assistants, as Philcomsat’s counsel and the executive assistant assigned to her
were both out of the office. It was only the following day that Querubin gave a copy of the said Decision to the executive
assistant of Philcomsat’s counsel, leading the latter to believe that it was only then that the said Decision had been served.
In turn, this led Philcomsat’s counsel to believe that it was on June 21, 2006 that the ten (10) day-period started to run.

Having in mind that the delay was only one (1) day and the explanation offered by Philcomsat’s counsel, the NLRC
disregarded Philcomsat’s procedural lapse and proceeded to decide the appeal on its merits. Thus:

It appears that on June 20[,] 2006[,] copy of the Decision was received by one (Maritess) who is not the Secretary of
respondents-appellants’ counsel and therefore not authorized to receive such document. It was only the following day,
June 21, 2006, that respondents-appellants[’] counsel actually received the Decision which was stamped received on said
date. Verily, counsel has until July 3, 2006 within which to perfect the appeal, which he did. In PLDT vs. NLRC, et al., G.R.
No. 60250, March 26, 1984, the Honorable Supreme Court held that: "where notice of the Decision was served on the
receiving station at the ground floor of the defendant’s company building, and received much later at the office of the legal
counsel on the ninth floor of said building, which was his address of record, service of said decision has taken effect from
said later receipt at the aforesaid office of its legal counsel."

Be that as it may, the provisions of Section 10, Rule VII of the NLRC Rules of Procedure, states, that:

"SECTION 10. TECHNICAL RULES NOT BINDING. The rules of procedure and evidence prevailing in courts of law and
equity shall not be controlling and the Commission shall use every and all reasonable means to ascertain the facts in each
case speedily and objectively, without regard to technicalities of law or procedure, all in the interest of due process. x x x"

Additionally, the Supreme Court has allowed appeals from decisions of the Labor Arbiter to the NLRC, even if filed beyond
the reglementary period, in the interest of justice. Moreover, under Article 218 (c) of the Labor Code, the NLRC may, in the
exercise of its appellate powers, correct, amend or waive any error, defect or irregularity whether in substance or in form.
Further, Article 221 of the same provides that: In any proceedings before the Commission or any of the Labor Arbiters,
the rules of evidence prevailing in courts of law or equity shall not be controlling and it is the spirit and intention of this
Code that the Commission and its members and the Labor Arbiters shall use in each case speedily and objectively and
without regard to technicalities of law or procedure, all in the interest of due process.17

In his petition for certiorari under Rule 65 of the Rules of Court to the CA, the petitioner accused the NLRC of grave abuse
of discretion in giving due course to the respondent’s belated appeal by relaxing the application of one of the fundamental
requirements of appeal. An appeal, being a mere statutory right, should be exercised in a manner that strictly conforms to
the prescribed procedure. As of July 3, 2006, or when Philcomsat filed its appeal and posted its surety bond, LA Lustria’s
Decision had become final and executory and Philcomsat’s counsel’s failure to verify when the copy of said Decision was
actually received does not constitute excusable negligence.

The petitioner likewise anchored his allegation of grave abuse of discretion against the NLRC on the latter's refusal to
strike as invalid the quitclaim he executed in Philcomsat’s favor. According to the petitioner, his retirement pay amounts
to ₱14,015,055.00 and ₱9,439,327.91 he received from Philcomsat as supposed settlement for all his claims against it is
unconscionable and this is more than enough reason to declare his quitclaim as null and void.

By way of the assailed Decision, the CA found no merit in the petitioner’s claims, holding that the NLRC did not act with
grave abuse of discretion in giving due course to the respondent’s appeal.

The Supreme Court has ruled that where a copy of the decision is served on a person who is neither a clerk nor one in
charge of the attorney’s office, such service is invalid. In the case at bar, it is undisputed that Maritess Querubin, the
person who received a copy of the Labor Arbiter’s decision, was neither a clerk of Atty. Yanzon, private respondent’s
counsel, nor a person in charge of Atty. Yanzon’s office. Hence, her receipt of said decision on June 20, 2006 cannot be
considered as notice to Atty. Yanzon. Since a copy of the decision was actually delivered by Maritess to Atty. Yanzon’s
secretary only on June 21, 2006, it was only on this date that the ten-day period for the filing of private respondent’s
appeal commenced to run. Thus, private respondent’s July 3, 2006 appeal to the NLRC was seasonably filed.

Similarly, the provision of Article 223 of the Labor Code requiring the posting of a bond for the perfection of an appeal of a
monetary award must be given liberal interpretation in line with the desired objective of resolving controversies on the
merits. If only to achieve substantial justice, strict observance of the reglementary periods may be relaxed if warranted.
However, this liberal interpretation must be justified by substantial compliance with the rule. As the Supreme Court ruled
in Buenaobra v. Lim King Guan:

xxxx

We note that in the instant case, private respondent substantially complied with the filing of its appeal and the required
appeal bond on July 3, 2006 – the next working day after July 1, 2006, the intervening days between the said two dates
being a Saturday and a Sunday. Substantial justice dictates that the present case be decided on the merits, especially since
there was a mere one-day delay in the filing by private respondent of its appeal and appeal bond with the NLRC. x x x.18
(citation omitted)
The CA further ruled that the NLRC was correct in upholding the validity of the petitioner’s quitclaim. Thus:

In the same vein, this Court finds that the NLRC did not act with grave abuse of discretion amounting to lack or excess of
jurisdiction in declaring as valid the Deed of Release and Quitclaim dated September 12, 2001 – absolving private
respondent from liability arising from any and all suits, claims, demands or other causes of action of whatever nature in
consideration of the amount petitioner received in connection with his retirement – signed by petitioner. x x x

xxxx

The assertion of petitioner that the Deed of Release and Quitclaim he signed should be struck down for embodying
unconscionable terms is simply untenable. Petitioner himself admits that he has received the amount of [₱]9,327,000.00 –
representing his retirement pay and other benefits – from private respondent. By no stretch of the imagination could the
said amount be considered unconscionably low or shocking to the conscience, so as to warrant the invalidation of the
Deed of Release and Quitclaim. Granting that the source of the retirement pay of petitioner is the trust fund maintained by
private respondent at the UCPB for the payment of the retirement pay of private-respondent’s employees, the said
circumstance would still not justify the invalidation of the Deed of Release and Quitclaim, for petitioner clearly
understood the contents thereof at the time of its execution but still choose to sign the deed. The terms thereof being
reasonable and there being no showing that private respondent employed coercion, fraud or undue influence upon
petitioner to compel him to sign the same, the subject Deed of Release and Quitclaim signed by petitioner shall be upheld
as valid.19 (citations omitted)

The petitioner ascribes several errors on the part of the CA. Specifically, the petitioner claims that the CA erred in not
dismissing the respondent’s appeal to the NLRC, which was filed beyond the prescribed period. There is no dispute that
Querubin was authorized to receive mails and correspondences on behalf of Philcomsat’s counsel and her receipt of LA
Lustria’s Decision on June 20, 2006 is binding on Philcomsat. Also, the failure of Philcomsat’s counsel to ascertain when
exactly the copy of LA Lustria’s Decision was received by Querubin is inexcusable negligence. Since the perfection of an
appeal within the ten (10)-day period is a mandatory and jurisdictional requirement, Philcomsat’s failure to justify its
delay should have been reason enough to dismiss its appeal.

The petitioner also claims that the CA erred in upholding the validity of the subject quitclaim. The respondent has no right
to retain a portion of his retirement pay and the consideration for the execution of the quitclaim is simply unconscionable.
The petitioner submits that the CA should have taken into account that Philcomsat’s retirement plan was for the exclusive
benefit of its employees and to allow Philcomsat to appropriate a significant portion of his retirement pay is a clear case of
unjust enrichment.

On the other hand, Philcomsat alleges that the petitioner willfully and knowingly executed the subject quitclaim in
consideration of his receipt of his retirement pay. Albeit his retirement pay was in the reduced amount of ₱9,439,327.91,
Philcomsat alleges that this was arrived at following its negotiations with the petitioner and the latter participated in the
computation thereof, taking into account his accountabilities to Philcomsat and the latter’s financial debacles.

Philcomsat likewise alleges that the NLRC is clothed with ample authority to set aside technical rules; hence, the NLRC did
not act with grave abuse of discretion in entertaining Philcomsat’s appeal in consideration of the circumstances
surrounding the late filing thereof and the amount subject of the dispute.

Issues

In view of the conflicting positions adopted by the parties, this Court is confronted with two (2) issues that are far from
being novel, to wit:

a. Whether the delay in the filing of Philcomsat’s appeal and posting of surety bond is inexcusable; and

b. Whether the quitclaim executed by the petitioner in Philcomsat’s favor is valid, thereby foreclosing his right to institute
any claim against Philcomsat.

Our Ruling

A petition for certiorari under Rule 65 of the Rules of Court is confined to the correction of errors of jurisdiction and will
not issue absent a showing of a capricious and whimsical exercise of judgment, equivalent to lack of jurisdiction. Not
every error in a proceeding, or every erroneous conclusion of law or of fact, is an act in excess of jurisdiction or an abuse
of discretion.20 The prerogative of writ of certiorari does not lie except to correct, not every misstep, but a grave abuse of
discretion.21

Procedural rules may be relaxed to give way to the full determination of a case on its merits.

Confronted with the task of determining whether the CA erred in not finding grave abuse of discretion in the NLRC's
decision to give due course to Philcomsat's appeal despite its being belatedly filed, this Court rules in Philcomsat's favor.

Procedural rules may be waived or dispensed with in absolutely meritorious cases. A review of the cases cited by the
petitioner, Rubia v. Government Service Insurance System22 and Videogram Regulatory Board v. Court of Appeals,23
where this Court adhered to the strict implementation of the rules and considered them inviolable, shows that the patent
lack of merit of the appeals render liberal interpretation pointless and naught. The contrary obtains in this case as
Philcomsat's case is not entirely unmeritorious. Specifically, Philcomsat alleged that the petitioner's execution of the
subject quitclaim was voluntary and he made no claim that he did so. Philcomsat likewise argued that the petitioner's
educational attainment and the position he occupied in Philcomsat's hierarchy militate against his claim that he was
pressured or coerced into signing the quitclaim.
The emerging trend in our jurisprudence is to afford every party-litigant the amplest opportunity for the proper and just
determination of his cause free from the constraints of technicalities.24 Far from having gravely abused its discretion, the
NLRC correctly prioritized substantial justice over the rigid and stringent application of procedural rules. This, by all
means, is not a case of grave abuse of discretion calling for the issuance of a writ of certiorari.

Absent any evidence that any of the vices of consent is present and considering the petitioner’s position and education,
the quitclaim executed by the petitioner constitutes a valid and binding agreement.

In Goodrich Manufacturing Corporation, v. Ativo,25 this Court reiterated the standards that must be observed in
determining whether a waiver and quitclaim has been validly executed:

Not all waivers and quitclaims are invalid as against public policy. If the agreement was voluntarily entered into and
represents a reasonable settlement, it is binding on the parties and may not later be disowned simply because of a change
of mind. It is only where there is clear proof that the waiver was wangled from an unsuspecting or gullible person, or the
terms of settlement are unconscionable on its face, that the law will step in to annul the questionable transaction. But
where it is shown that the person making the waiver did so voluntarily, with full understanding of what he was doing, and
the consideration for the quitclaim is credible and reasonable, the transaction must be recognized as a valid and binding
undertaking.26 (emphasis supplied)

In Callanta v. National Labor Relations Commission,27 this Court ruled that:

It is highly unlikely and incredible for a man of petitioner’s position and educational attainment to so easily succumb to
private respondent company’s alleged pressures without even defending himself nor demanding a final audit report
before signing any resignation letter. Assuming that pressure was indeed exerted against him, there was no urgency for
petitioner to sign the resignation letter. He knew the nature of the letter that he was signing, for as argued by respondent
company, petitioner being "a man of high educational attainment and qualification, x x x he is expected to know the
import of everything that he executes, whether written or oral."28

While the law looks with disfavor upon releases and quitclaims by employees who are inveigled or pressured into signing
them by unscrupulous employers seeking to evade their legal responsibilities, a legitimate waiver representing a
voluntary settlement of a laborer's claims should be respected by the courts as the law between the parties.29
Considering the petitioner's claim of fraud and bad faith against Philcomsat to be unsubstantiated, this Court finds the
quitclaim in dispute to be legitimate waiver.

While the petitioner bewailed as having been coerced or pressured into signing the release and waiver, his failure to
present evidence renders his allegation self-serving and inutile to invalidate the same. That no portion of his retirement
pay will be released to him or his urgent need for funds does not constitute the pressure or coercion contemplated by law.

That the petitioner was all set to return to his hometown and was in dire need of money would likewise not qualify as
undue pressure sufficient to invalidate the quitclaim. "Dire necessity" may be an acceptable ground to annul quitclaims if
the consideration is unconscionably low and the employee was tricked into accepting it, but is not an acceptable ground
for annulling the release when it is not shown that the employee has been forced to execute it.30 While it is our duty to
prevent the exploitation of employees, it also behooves us to protect the sanctity of contracts that do not contravene our
laws.31

The petitioner is not an ordinary laborer.1awphi1 He is mature, intelligent and educated with a college degree, who
cannot be easily duped or tricked into performing an act against his will. As no proof was presented that the said
quitclaim was entered into through fraud, deception, misrepresentation, the same is valid and binding. The petitioner is
estopped from questioning the said quitclaim and cannot renege after accepting the benefits thereunder. This Court will
never satisfy itself with surmises, conjectures or speculations for the purpose of giving imprimatur to the petitioner's
attempt to abdicate from his obligations under a valid and binding release and waiver.

The petitioner's educational background and employment stature render it improbable that he was pressured,
intimidated or inveigled into signing the subject quitclaim. This Court cannot permit the petitioner to relieve himself from
the consequences of his act, when his knowledge and understanding thereof is expected. Also, the period of time that the
petitioner allowed to lapse before filing a complaint to recover the supposed deficiency in his retirement pay clouds his
motives, leading to the reasonable conclusion that his claim of being aggrieved is a mere afterthought, if not a mere
pretention.

The CA and the NLRC were unanimous in holding that the petitioner voluntarily executed the subject quitclaim. The
Supreme Court (SC) is not a trier of facts, and this doctrine applies with greater force in labor cases. Factual questions are
for the labor tribunals to resolve and whether the petitioner voluntarily executed the subject quitclaim is a question of
fact. In this case, the factual issues have already been determined by the NLRC and its findings were affirmed by the CA.
Judicial review by this Court does not extend to a reevaluation of the sufficiency of the evidence upon which the proper
labor tribunal has based its determination.32

Factual findings of labor officials who are deemed to have acquired expertise in matters within their respective
jurisdictions are generally accorded not only respect, but even finality, and are binding on the SC. Verily, their conclusions
are accorded great weight upon appeal, especially when supported by substantial evidence. Consequently, the SC is not
duty-bound to delve into the accuracy of their factual findings, in the absence of a clear showing that the same were
arbitrary and bereft of any rational basis.33

WHEREFORE, premises considered, the Petition is hereby DENIED. The assailed November 12, 2009 Decision and July 28,
2010 Resolution of the Court of Appeals in CA-G.R. SP No. 107233 are hereby AFFIRMED.
No pronouncements as to cost.

SO ORDERED.

G.R. Nos. 94929-30 March 18, 1992

PORT WORKERS UNION OF THE PHILIPPINES (PWUP), petitioner, vs. THE HONORABLE UNDERSECRETARY OF
LABOR AND EMPLOYMENT BIENVENIDO E. LAGUESMA, ATTY. ANASTACIO L. BACTIN, MED-ARBITER NCR-DOLE,
Public Respondents; INTERNATIONAL CONTAINER TERMINAL SERVICES, INC., (ICTSI) and ASSOCIATED PORT
CHECKERS AND WORKERS UNION (APCWU), Private Respondents; SANDIGAN NG MANGGAGAWA SA DAUNGAN
(SAMADA) and PORT EMPLOYEES ASSOCIATION AND LABOR UNION (PEALU), Nominal Private Respondents,
respondents.

CRUZ, J.:

There was muffled excitement among the workers of the International Container Terminal Services, Inc. (ICTSI) because
its collective bargaining agreement with private respondents Associate Port Checkers and Workers Union (APCWU), the
incumbent union, was due to expire on April 14, 1990. Other unions were seeking to represent the laborers in the
negotiation of the next CBA and were already plotting their moves.

The first challenge to APCWU was hurled on March 14, 1990, when the Sandigan ng Manggagawa sa Daungan (SAMADA)
filed a petition for certification election. The consent signatures of at least 25% of the employees in the bargaining unit
were submitted on March 26, 1990, or eleven days after the petition.

On April 2, 1990, herein petitioner Port Workers Union of the Philippines (PWUP) filed a petition for intervention.

Still another petition for certification election was filed by the Port Employees Association and Labor Union (PEALU), on
April 6, 1990. The consent signatures were submitted on May 11, 1990, or thirty-five days after the filing of the petition.

The petitions of SAMADA and PEALU were consolidated for joint decision. On April 26, 1990, APCWU filed a motion to
dismiss them on the ground that they did not comply with the requirement set forth in Section 6, Rule V, Book V of the
Implementing Rules, quoted in part as follows:

In a petition involving an organized establishment or enterprise where the majority status of the incumbent collective
bargaining union is questioned through a verified petition by a legitimate labor organization, the Med-Arbiter shall
immediately order the certification election by secret ballot if the petition is filed during the last sixty (60) days of the
collective bargaining agreement and supported by the written consent of at least twenty-five percent (25%) of all the
employees in the bargaining unit. Any petition filed before or after the sixty-day freedom period shall be dismissed
outright. The twenty-five percent (25%) requirement shall be satisfied upon the filing of the petition, otherwise the
petition shall be dismissed. (Emphasis supplied.)

Specifically, APCWU faulted both petitions for non-compliance with the requirement for the 25% consent signatures at
the time of filing. This contention was upheld by the Med-Arbiter in an order dated June 5, 1990, dismissing the
consolidated petitions. 1

PWUP appealed to the Secretary of Labor on June 28, 1990, arguing that Article 256 of the Labor Code did not require the
written consent to be submitted simultaneously with the petition for certification election. The principal petitioners did
not appeal. On August 21, 1990, DOLE Undersecretary Bienvenido Laguesma affirmed the order of the Med-Arbiter and
dismissed PWUP's appeal. 2
Thereafter, ICTSI and APCWU resumed negotiations for a new collective bargaining agreement, which was concluded on
September 28, 1990. This was ratified on October 7, 1990, by a majority of the workers in the bargaining unit, i.e., 910 out
of the 1,223 members, and subsequently registered with the DOLE.

PWUP is now before us, claiming grave abuse of discretion on the part of the public respondent in the application of
Article 256 of the Labor Code. The article provides in part as follows:

Art. 256. Representation issue in organized establishments. — In organized establishments, when a verified petition
questioning the majority status of the incumbent bargaining agent is filed before the Department of Labor and
Employment within the sixty-day period before the expiration of the collective bargaining agreement, the Med-Arbiter
shall automatically order an election by secret ballot when the verified petition is supported by the written consent of at
least twenty-five (25%) percent of all the employees in the bargaining unit to ascertain the will of the employees in the
appropriate bargaining unit. . . .

The petitioner argues that under this article, the Med-Arbiter should automatically order election by secret ballot when
the petition is supported by at least 25% of all employees in the bargaining unit. SAMADA and PEALU substantially
complied with the law when they submitted the required consent signatures several days after filing the petition. The
petitioner complains that the dismissal of the petitions for certification election, including its own petition for
intervention, had the effect of indirectly certifying APCWU as the sole and exclusive bargaining representative of the ICTSI
employees.

Private respondent ICTSI maintains that the dismissal was based on Article 256 of the Labor Code as implemented by
Section 6, Rule V, Book V of the Implementing Rules, quoted above. Moreover, under Section 10, Rule V, Book V of the
Implementing Rules, decisions of the Secretary in certification election cases shall be final and unappealable.

ICTSI also cites the following ruling of this Court in Tupas v. Inciong: 3

We find no merit in the petition. As observed by the Solicitor General, while the petition of TUPAS for a certification
election may have the written support of 30 per cent of all the workers of the bargaining unit, it is also an undisputed fact
that UMI (the rival union of TUPAS) has a clear majority of the said workers, as shown by the fact that 499 workers out of
the total working force of 641 have not only ratified the collective bargaining agreement concluded between UMI and
LUSTEVECO, but also affirmed their membership in UMI so that there is no more need for holding a certification election.
(Emphasis supplied.)

For its part, APCWU questions PWUP's personality in these proceedings in view of the lack of consent signatures in its
petition, and argues as well that the petitioner has no authority to represent SAMADA or PEALU, which had not appealed.
The private respondent also invokes Tupas and maintains that the ratification of the new CBA by the majority of the
workers was an affirmation of their membership in the union that negotiated that agreement.

In his own Comment, the Solicitor General agrees with the petitioner that there has been substantial compliance with the
requirements of the law. He submits that Article 256 should be liberally interpreted pursuant to Article 4 of the Labor
Code, stating as follows:

Art. 4. Construction in favor of labor. — All doubts in the implementation and interpretation of the provisions of this Code
including its implementing rules and regulations, shall be resolved in favor of labor.

The Court has deliberated on the arguments of the parties in their respective pleadings and finds for the petitioner.

We have held that pursuant to the constitutional provision guaranteeing workers the right to self-organization and
collective bargaining, "the constant and unwavering policy of this Court" has been "to require a certification election as
the best means of ascertaining which labor organization should be the collective bargaining representative." 4

The certification election is the most democratic and expeditious method by which the laborers can freely determine the
union that shall act as their representative in their dealings with the establishment where they are working. 5 As we
stressed in Belyca Corporation vs. Ferrer-Calleja, 6 the holding of a certification election is a statutory policy that should
not be circumvented.

This Court also held in Western Agusan Workers Union-Local 101 of the United Lumber and General Workers of the
Philippines vs. Trajano: 7

. . . it has long been settled that the policy of the Labor Code is indisputably partial to the holding of a certification election
so as to arrive in a manner definitive and certain concerning the choice of the labor organization to represent the workers
in a collective bargaining unit. Conformably to said basic concept, this Court recognized that the Bureau of Labor
Relations in the exercise of sound discretion, may order a certification election notwithstanding the failure to meet the
30% requirement. (Scout Ramon V. Albano Memorial College v. Noriel, 85 SCRA 494 [1978]; Vicmico Industrial Wokers
Asso. v. Noriel, 131 SCRA 569 [1984])

In line with the policy, we feel that the administrative rule requiring the simultaneous submission of the 25% consent
signatures upon the filing of petition for certification election should not be strictly applied to frustrate the determination
of the legitimate representative of the workers. Significantly, the requirement in the rule is not found in Article 256, the
law it seeks to implement. This is all the more reason why the regulation should at best be given only a directory effect.
Accordingly, we hold that the mere filing of a petition for certification election within the freedom period is sufficient
basis for the issuance of an order for the holding of a certification election, 8 subject to the submission of the consent
signatures within a reasonable period from such filing.
This interpretation is consonant with Philippine Association of Free Labor Unions v. Bureau of Labor Relations,9 where
we declared:

. . . even conceding that the statutory requirement of 30% of the labor force asking for a certification election had not been
strictly complied with, respondent Director is still empowered to order that it be held precisely for the purpose of
ascertaining which (of the contending labor organizations) shall be the exclusive collective bargaining representative.
(National Mines and Allied Workers Union v. Luna, et al., 83 SCRA 607)

It is not denied that the petition to intervene filed by PWUP did not carry the 25% consent signatures, but that the
requirement is in fact not applicable to a petition in intervention. We so held in PAFLU v. Ferrer-Calleja thus: 10

It is crystal clear from the said provisions that the requisite written consent of at least 20% of the workers in the
bargaining unit applies to petitioners for certification election only and not to motions for intervention. . . . As long as the
motion for intervention has been properly and timely filed and the intervention would not cause any injustice to anyone,
it should not be denied and this is so even if the eventual purpose of the Motion for Intervention is to participate in the
Certification Election. After all, the original applicant had already met the 20% requirement.

The contention that the petitioners had no right to represent the principal petitioners which had not appealed the
dismissal order is also not acceptable. We repeat that the certification election is not litigation but a mere investigation of
a non-adversary character where the rules of procedure are not strictly applied. 11 Technical rules and objections should
not hamper the correct ascertainment of the labor union that has the support of confidence of the majority of the workers
and is thus entitled to represent them in their dealings with management.

The above-quoted decision affirms the right of PWUP to call for the holding of the election although it was initially only an
intervenor. That recognition should not be defeated by the circumstance that the other petitioning unions have not seen
fit to appeal the dismissal of their petitions even if such dismissal was questionable and is in fact being reversed here. The
petition for intervention was viable at the time it was filed because the principal petitions had complied with the
requirement for the consent signatures as specified by Article 256. Hence, its intervention should not be disallowed
simply because of the withdrawal or failure to appeal of SAMADA and PEALU.

It is correct to say that as a matter of strict procedure, a petition for intervention should be deemed automatically
dismissed where the principal petition itself fails. However, that technical rule should be allowed to prevent a correct
determination of the real representative of the workers in line with their constitutional rights to self-organization and
collective bargaining.

Regarding the invocation of Inciong by the private respondents, the Court has modified that decision in Associated Labor
Unions vs. Calleja, 12 where we held:

Finally, the petitioner assails the decision of the respondent Director on the ground that "the ratification of the collective
bargaining agreement renders the certification election moot and academic."

This contention finds no basis in law.

The petitioner was obviously referring to the contract-bar rule where the law prohibits the holding of certification
elections during the lifetime of the collective bargaining agreement. Said agreement was hastily and prematurely entered
into apparently in an attempt to avoid the holding of a certification election.

Deviation from the contract-bar rule is justified only where the need for industrial stability is clearly shown to be
imperative. 13 Subject to this singular exception, contracts where the identity of the authorized representative of the
workers is in doubt must be rejected in favor of a more certain indication of the will of the workers. As we stated in
Philippine Association of Free Labor Union vs. Estrella, 14 any stability that does not establish the type of industrial peace
contemplated by the law must be subordinated to the employees' freedom to choose their real representative.

The private respondents contend that the overwhelming ratification of the CBA is an affirmation of their membership in
the bargaining agent, rendering the representation issue moot and academic and conclusively barring the holding of a
certification election thereon. That conclusion does not follow. Even Tupas did not say that the mere ratification of the
CBA by the majority of the workers signified their affirmation of membership in the negotiating union. That case required,
first, ratification of the CBA, the second, affirmation of membership in the negotiating union. The second requirement has
not been established in the case at bar as the record does not show that the majority of the workers, besides ratifying the
new CBA, have also formally affiliated with APCWU.

Section 4, Rule V, Book V of the Omnibus Rules implementing the Labor Code provides that the representation case shall
not be adversely affected by a collective agreement submitted before or during the last 60 days of a subsisting agreement
or during the pendency of the representation case. As the new CBA was entered into at the time when the representation
case was still pending, it follows that it cannot be recognized as the final agreement between the ICTSI and its workers.

On the allegation that the decision of the Secretary of Labor on certification election is final and inappealable, this Court
held in San Miguel Corp. v. Secretary of Labor 15 that:

It is generally understood that as to administrative agencies exercising quasi-judicial or legislative power there is an
underlying power in 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. (73, C.J.S. 506, note 56). . . . judicial review is proper in case of lack of jurisdiction, grave
abuse of discretion. error of law, fraud or collusion (Timbancaya v. Vicente, 82 O.G. 9424; Macatangay v. Secretary of
Public Works and Communication, 63 O.G. 11236; Ortua v. Singson Encarnacion, 59 Phil. 440).
There was indeed grave abuse of discretion amounting to lack or excess of jurisdiction on the part of public respondents
when they dismissed the petitions for certification election because the consent signatures had not been submitted
simultaneously with the petition. The issue of majority representation thus remains open and awaits settlement.
Following the rulings above-quoted, we hereby declare that the newly-concluded CBA cannot constitute a bar to the
holding of a certification election.

It is possible that the APCWU will prevail in the certification election, in which event the new CBA it concluded with ICTSI
will be upheld and recognized. It is also possible that another union will be chosen, in which event it will have to enter
into its own negotiations with ICTSI that may result in the adoption of a new CBA. In the meantime, however, the old CBA
having expired, it is necessary to lay down the rules regulating the relations of the workers with the management. For this
reason, the Court hereby orders that the new CBA concluded by ICTSI and APCWU shall remain effective between the
parties, subject to the result and effects of the certification election to be called.

The certification election is the best method of determining the will of the workers on the crucial question of who shall
represent them in their negotiations with the management for a collective bargaining agreement that will best protect
and promote their interests. It is essential that there be no collusion against this objective between an unscrupulous
management and a union covertly supporting it while professing its loyalty to labor, or at least that the hopes of labor be
not frustrated because of its representation by a union that does not enjoy its approval and support. It is therefore sound
policy that any doubt regarding the real representation of the workers be resolved in favor of the holding of the
certification election. This is preferable to the suppression of the voice of the workers through the prissy observance of
technical rules that will exalt procedure over substantial justice.

WHEREFORE, the petition is GRANTED. The challenged order dated August 21, 1990, is REVERSED and SET ASIDE and
the public respondent is DIRECTED to schedule and hold certification election among the workers of the International
Container Terminal Services, Inc., this to be done with all possible dispatch. No costs.

SO ORDERED.

G.R. No. 211145

SAMAHAN NG MANGGAGAWA SA HANJIN SHIPYARD rep. by its President, ALFIE ALIPIO, Petitioner vs. BUREAU OF
LABOR RELATIONS, HANJIN HEAVY INDUSTRIES AND CONSTRUCTION CO., LTD. (HHIC-PIDL.),, Respondents

mendoza, J.:

The right to self-organization is not limited to unionism. Workers may also form or join an association for mutual aid and
protection and for other legitimate purposes.

This is a petition for review on certiorari seeking to reverse and set aside the July 4, 2013 Decision1 and the January 28,
2014 Resolution2 of the Court of Appeals (CA) in CA-G.R. SP No. 123397, which reversed the November 28, 2011
Resolution3 of the Bureau of Labor Relations (BLR) and reinstated the April 20, 2010 Decision 4 of the Department of
Labor and Employment (DOLE) Regional Director, cancelling the registration of Samahan ng Manggagawa sa Hanjin
Shipyard (Samahan) as a worker's association under Article 243 (now Article 249) of the Labor Code.

The Facts

On February 16, 2010, Samahan, through its authorized representative, Alfie F. Alipio, filed an application for registration
5 of its name "Samahan ng Mga Manggagawa sa Hanjin Shipyard" with the DOLE. Attached to the application were the list
of names of the association's officers and members, signatures of the attendees of the February 7, 2010 meeting, copies of
their Constitution and By-laws. The application stated that the association had a total of 120 members.

On February 26, 2010, the DOLE Regional Office No. 3, City of San Fernando, Pampanga (DOLE-Pampanga), issued the
corresponding certificate of registration6 in favor of Samahan.

On March 15, 2010, respondent Hanjin Heavy Industries and Construction Co., Ltd. Philippines (Hanjin), with offices at
Greenbeach 1, Renondo Peninsula, Sitio Agustin, Barangay Cawag, Subic Bay Freeport Zone, filed a petition7 with DOLE-
Pampanga praying for the cancellation of registration of Samahan' s association on the ground that its members did not
fall under any of the types of workers enumerated in the second sentence of Article 243 (now 249).

Hanjin opined that only ambulant, intermittent, itinerant, rural workers, self-employed, and those without definite
employers may form a workers' association. It further posited that one third (1/3) of the members of the association had
definite employers and the continued existence and registration of the association would prejudice the company's
goodwill.

On March 18, 2010, Hanjin filed a supplemental petition,8 adding the alternative ground that Samahan committed a
misrepresentation in connection with the list of members and/or voters who took part in the ratification of their
constitution and by-laws in its application for registration. Hanjin claimed that Samahan made it appear that its members
were all qualified to become members of the workers' association.

On March 26, 2010, DOLE-Pampanga called for a conference, wherein Samahan requested for a 10-day period to file a
responsive pleading. No pleading, however, was submitted. Instead, Samahan filed a motion to dismiss on April 14, 2010.9

The Ruling of the DOLE Regional Director

On April 20, 2010, DOLE Regional Director Ernesto Bihis ruled in favor of Hanjin. He found that the preamble, as stated in
the Constitution and By-Laws of Samahan, was an admission on its part that all of its members were employees of Hanjin,
to wit:

KAMI, ang mga Manggagawa sa HANJIN Shipyard (SAMAHAN) ay naglalayong na isulong ang pagpapabuti ng kondisyon
sa paggawa at katiyakan sa hanapbuhay sa pamamagitan ng patuloy na pagpapaunlad ng kasanayan ng para sa mga
kasapi nito. Naniniwala na sa pamamagitan ng aming mga angking lakas, kaalaman at kasanayan ay aming maitataguyod
at makapag-aambag sa kaunlaran ng isang lipunan. Na mararating at makakamit ang antas ng pagkilala, pagdakila at
pagpapahalaga sa mga tulad naming mga manggagawa.

XXX10

The same claim was made by Samahan in its motion to dismiss, but it failed to adduce evidence that the remaining 63
members were also employees of Hanjin. Its admission bolstered Hanjin's claim that Samahan committed
misrepresentation in its application for registration as it made an express representation that all of its members were
employees of the former. Having a definite employer, these 57 members should have formed a labor union for collective
bargaining.11 The dispositive portion of the decision of the Dole Regional Director, reads:

WHEREFORE, premises considered, the petition is hereby GRANTED. Consequently, the Certificate of Registration as
Legitimate Workers Association (LWA) issued to the SAMAHAN NG MGA MANGGAGAWA SA HANJIN SHIPYARD
(SAMAHAN) with Registration Numbers R0300-1002-WA-009 dated February 26, 2010 is hereby CANCELLED, and said
association is dropped from the roster of labor organizations of this Office.

SO DECIDED.12

The Ruling of the Bureau of Labor Relations

Aggrieved, Samahan filed an appeal13 before the BLR, arguing that Hanjin had no right to petition for the cancellation of
its registration. Samahan pointed out that the words "Hanjin Shipyard," as used in its application for registration, referred
to a workplace and not as employer or company. It explained that when a shipyard was put up in Subic, Zambales, it
became known as Hanjin Shipyard. Further, the remaining 63 members signed the Sama-Samang Pagpapatunay which
stated that they were either working or had worked at Hanjin. Thus, the alleged misrepresentation committed by
Samahan had no leg to stand on.14

In its Comment to the Appeal,15 Hanjin averred that it was a party-ininterest. It reiterated that Samahan committed
misrepresentation in its application for registration before DOLE Pampanga. While Samahan insisted that the remaining
63 members were either working, or had at least worked in Hanjin, only 10 attested to such fact, thus, leaving its 53
members without any workplace to claim.

On September 6, 2010, the BLR granted Samahan's appeal and reversed the ruling of the Regional Director. It stated that
the law clearly afforded the right to self-organization to all workers including those without definite employers.16 As an
expression of the right to self-organization, industrial, commercial and self-employed workers could form a workers'
association if they so desired but subject to the limitation that it was only for mutual aid and protection.17 Nowhere could
it be found that to form a workers' association was prohibited or that the exercise of a workers' right to self-organization
was limited to collective bargaining.18

The BLR was of the opinion that there was no misrepresentation on the part of Samahan. The phrase, "KAMI, ang mga
Manggagawa sa Hanjin Shipyard," if translated, would be: "We, the workers at Hanjin Shipyard." The use of the
preposition "at" instead of "of' would indicate that "Hanjin Shipyard" was intended to describe a place.19 Should Hanjin
feel that the use of its name had affected the goodwill of the company, the remedy was not to seek the cancellation of the
association's registration. At most, the use by Samahan of the name "Hanjin Shipyard" would only warrant a change in the
name of the association.20 Thus, the dispositive portion of the BLR decision reads:

WHEREFORE, the appeal is hereby GRANTED. The Order of DOLE Region III Director Ernesto C. Bihis dated 20 April 2010
is REVERSED and SET ASIDE.

Accordingly, Samahan ng mga Manggagawa sa Hanjin Shipyard shall remain in the roster of legitimate workers'
association.21

On October 14, 2010, Hanjin filed its motion for reconsideration.22

In its Resolution,23 dated November 28, 2011, the BLR affirmed its September 6, 2010 Decision, but directed Samahan to
remove the words "Hanjin Shipyard" from its name. The BLR explained that the Labor Code had no provision on the use of
trade or business name in the naming of a worker's association, such matters being governed by the Corporation Code.
According to the BLR, the most equitable relief that would strike a balance between the contending interests of Samahan
and Hanjin was to direct Samahan to drop the name "Hanjin Shipyard" without delisting it from the roster of legitimate
labor organizations. The fallo reads:

WHEREFORE, premises considered, our Decision dated 6 September 2010 is hereby AFFIRMED with a DIRECTIVE for
SAMAHAN to remove "HANJIN SHIPYARD" from its name.

SO RESOLVED.24

Unsatisfied, Samahan filed a petition for certiorari25 under Rule 65 before the CA, docketed as CA-G.R. SP No. 123397.
In its March 21, 2012 Resolution,26 the CA dismissed the petition because of Samahan's failure to file a motion for
reconsideration of the assailed November 28, 2011 Resolution.

On April 17, 2012, Samahan filed its motion for reconsideration27 and on July 18, 2012, Hanjin filed its comment28 to
oppose the same. On October 22, 2012, the CA issued a resolution granting Samahan's motion for reconsideration and
reinstating the petition. Hanjin was directed to file a comment five (5) days from receipt of notice.29

On December 12, 2012, Hanjin filed its comment on the petition,30 arguing that to require Samahan to change its name
was not tantamount to interfering with the workers' right to self-organization.31 Thus, it prayed, among others, for the
dismissalof the petition for Samahan's failure to file the required motion for reconsideration.32

On January 17, 2013, Samahan filed its reply.33

On March 22, 2013, Hanjin filed its memorandum.34

The Ruling of the Court of Appeals

On July 4, 2013, the CA rendered its decision, holding that the registration of Samahan as a legitimate workers' association
was contrary to the provisions of Article 243 of the Labor Code.35 It stressed that only 57 out of the 120 members were
actually working in Hanjin while the phrase in the preamble of Samahan's Constitution and By-laws, "KAMI, ang mga
Manggagawa sa Hanjin Shipyard," created an impression that all its members were employees of HHIC. Such unqualified
manifestation which was used in its application for registration, was a clear proof of misrepresentation which warranted
the cancellation of Samahan' s registration.

It also stated that the members of Samahan could not register it as a legitimate worker's association because the place
where Hanjin's industry was located was not a rural area. Neither was there any evidence to show that the members of
the association were ambulant, intermittent or itinerant workers.36

At any rate, the CA was of the view that dropping the words "Hanjin Shipyard" from the association name would not
prejudice or impair its rightto self-organization because it could adopt other appropriate names. The dispositive portion
reads:

WHEREFORE, the petition is DISMISSED and the BLR's directive, ordering that the words "Hanjin Shipyard" be removed
from petitioner association's name, is AFFIRMED. The Decision dated April 20, 2010 of the DOLE Regional Director in
Case No. Ro300-1003-CP-001, which ordered the cancellation of petitioner association's registration is REINSTATED.

SO ORDERED.37

Hence, this petition, raising the following

ISSUES

I. THE COURT OF APPEALS SEfilOUSLY ERRED IN FINDING THAT SAMAHAN CANNOT FORM A WORKERS' ASSOCIATION
OF EMPLOYEES IN HANJIN AND INSTEAD SHOULD HA VE FORMED A UNION, HENCE THEIR REGISTRATION AS A
WORKERS' ASSOCIATION SHOULD BE CANCELLED.

II. THE COURT OF APPEALS SERIOUSLY ERRED IN ORDERING THE REMOVAL/DELETION OF THE WORD "HANJIN" IN
THE NAME OF THE UNION BY REASON OF THE COMPANY'S PROPERTY RIGHT OVER THE COMP ANY NAME "HANJIN."38

Samahan argues that the right to form a workers' association is not exclusive to intermittent, ambulant and itinerant
workers. While the Labor Code allows the workers "to form, join or assist labor organizations of their own choosing" for
the purpose of collective bargaining, it does not prohibit them from forming a labor organization simply for purposes of
mutual aid and protection. All members of Samahan have one common place of work, Hanjin Shipyard. Thus, there is no
reason why they cannot use "Hanjin Shipyard" in their name.39

Hanjin counters that Samahan failed to adduce sufficient basis that all its members were employees of Hanjin or its
legitimate contractors, and that the use of the name "Hanjin Shipyard" would create an impression that all its members
were employess of HHIC.40

Samahan reiterates its stand that workers with a definite employer can organize any association for purposes of mutual
aid and protection. Inherent in the workers' right to self-organization is its right to name its own organization. Samahan
referred "Hanjin Shipyard" as their common place of work. Therefore, they may adopt the same in their association's
name.41

The Court's Ruling

The petition is partly meritorious.

Right to self-organization includes

right to form a union, workers '
association and labor management
councils
More often than not, the right to self-organization connotes unionism. Workers, however, can also form and join a
workers' association as well as labor-management councils (LMC). Expressed in the highest law of the land is the right of
all workers to self-organization. Section 3, Article XIII of the 1987 Constitution states:

Section 3. The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full
employment and equality of employment opportunities for all. It shall guarantee 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. xxx [Emphasis Supplied]

And Section 8, Article III of the 1987 Constitution also states:

Section 8. The right of the people, including those employed in the public and private sectors, to form unions, associations,
or societies for purposes not contrary to law shall not be abridged.

In relation thereto, Article 3 of the Labor Code provides:

Article 3. Declaration of basic policy. The State shall afford protection to labor, promote full employment, ensure equal
work opportunities regardless of sex, race or creed and regulate the relations between workers and employers. The State
shall assure the rights of workers to self-organization, collective bargaining, security of tenure, and just and humane
conditions of work.

[Emphasis Supplied]

As Article 246 (now 252) of the Labor Code provides, the right to self-organization includes the right to form, join or
assist labor organizations fer the purpose of collective bargaining through representatives of their own choosing and to
engage in lawful concerted activities for the same purpose for their mutual aid and protection. This is in line with the
policy of the State to foster the free and voluntary organization of a strong and united labor movement as well as to make
sure that workers participate in policy and decision-making processes affecting their rights, duties and welfare.42

The right to form a union or association or to self-organization comprehends two notions, to wit: (a) the liberty or
freedom, that is, the absence of restraint which guarantees that the employee may act for himself without being prevented
by law; and (b) the power, by virtue of which an employee may, as he pleases, join or refrain from joining an
association.43

In view of the revered right of every worker to self-organization, the law expressly allows and even encourages the
formation of labor organizations. A labor organization is defined as "any union or association o[ employees which exists
in whole or in part for the purpose of collective bargaining or of dealing with employers concerning terms and conditions
of employment."44 A labor organization has two broad rights: (1) to bargain collectively and (2) to deal with the
employer concerning terms and conditions of employment. To bargain collectively is a right given to a union once it
registers itself with the DOLE. Dealing with the employer, on the other hand, is a generic description of interaction
between employer and employees concerning grievances, wages, work hours and other terms and conditions of
employment, even if the employees' group is not registered with the DOLE.45

A union refers to any labor organization in the private sector organized for collective bargaining and for other legitimate
purpose,46 while a workers' association is an organization of workers formed for the mutual aid and protection of its
members or for any legitimate purpose other than

collective bargaining.47

Many associations or groups of employees, or even combinations of only several persons, may qualify as a labor
organization yet fall short of constituting a labor union. While every labor union is a labor organization, not every labor
organization is a labor union. The difference is one of organization, composition and operation.48

Collective bargaining is just one of the forms of employee participation. Despite so much interest in and the promotion of
collective bargaining, it is incorrect to say that it is the device and no other, which secures industrial democracy. It is
equally misleading to say that collective bargaining is the end-goal of employee representation. Rather, the real aim is
employee participation in whatever form it may appear, bargaining or no bargaining, union or no union.49 Any labor
organization which may or may not be a union may deal with the employer. This explains why a workers' association or
organization does not always have to be a labor union and why employer-employee collective interactions are not always
collective bargaining.50

To further strengthen employee participation, Article 255 (now 261)51 of the Labor Code mandates that workers shall
have the right to participate in policy and decision-making processes of the establishment where they are employed
insofar as said processes will directly affect their rights, benefits and welfare. For this purpose, workers and employers
may form LMCs.

A cursory reading of the law demonstrates that a common element between unionism and the formation of LMCs is the
existence of an employer-employee relationship. Where neither party is an employer nor an employee of the other, no
duty to bargain collectively would exist.52 In the same manner, expressed in Article 255 (now 261) is the requirement
that such workers be employed in the establishment before they can participate in policy and decision making processes.

In contrast, the existence of employer-employee relationship is not mandatory in the formation of workers' association.
What the law simply requires is that the members of the workers' association, at the very least, share the same interest.
The very definition of a workers' association speaks of "mutual aid and protection."
Right to choose whether to form or
join a union or workers' association
belongs to workers themselves

In the case at bench, the Court cannot sanction the opinion of the CA that Samahan should have formed a union for
purposes of collective bargaining instead of a workers' association because the choice belonged to it. The right to form or
join a labor organization necessarily includes the right to refuse or refrain from exercising the said right. It is self-evident
that just as no one should be denied the exercise of a right granted by law, so also, no one should be compelled to exercise
such a conferred right.53 Also inherent in the right to self-organization is the right to choose whether to form a union for
purposes of collective bargaining or a workers' association for purposes of providing mutual aid and protection.

The right to self-organization, however, is subject to certain limitations as provided by law. For instance, the Labor Code
specifically disallows managerial employees from joining, assisting or forming any labor union. Meanwhile, supervisory
employees, while eligible for membership in labor organizations, are proscribed from joining the collective bargaining
unit of the rank and file employees.54 Even government employees have the right to self-organization. It is not, however,
regarded as existing or available for purposes of collective bargaining, but simply for the furtherance and protection of
their interests.55

Hanjin posits that the members of Samahan have definite employers, hence, they should have formed a union instead of a
workers' association. The Court disagrees. There is no provision in the Labor Code that states that employees with
definite employers may form, join or assist unions only.

The Court cannot subscribe either to Hanjin's position that Samahan's members cannot form the association because they
are not covered by the second sentence of Article 243 (now 249), to wit:

Article 243. Coverage and employees' right to selforganization. All persons employed in commercial, industrial and
agricultural enterprises and in religious, charitable, medical, or educational institutions, whether operating for profit or
not, shall have the right to self-organization and to form, join, or assist labor organizations of their own choosing for
purposes of collective bargaining. Ambulant, intermittent and itinerant workers, selfemployed people, rural workers and
those without any definite employers may form labor organizations for their mutual aid and protection. (As amended by
Batas Pambansa Bilang 70, May 1, 1980)

[Emphasis Supplied]

Further, Article 243 should be read together with Rule 2 of Department Order (D. 0.) No. 40-03, Series of 2003, which
provides:

RULE II

COVERAGE OF THE RIGHT TO SELF-ORGANIZATION

Section 1. Policy. - It is the policy of the State to promote the free and responsible exercise of the right to self-organization
through the establishment of a simplified mechanism for the speedy registration of labor unions and workers
associations, determination of representation status and resolution of inter/intra-union and other related labor relations
disputes. Only legitimate or registered labor unions shall have the right to represent their members for collective
bargaining and other purposes. Workers' associations shall have the right to represent their members for purposes other
than collective bargaining.

Section 2. Who may join labor unions and workers' associations. - All persons employed in commercial, industrial and
agricultural enterprises, including employees of government owned or controlled corporations without original charters
established under the Corporation Code, as well as employees of religious, charitable, medical or educational institutions
whether operating for profit or not, shall have the right to self-organization and to form, join or assist labor unions for
purposes of collective bargaining: provided, however, that supervisory employees shall not be eligible for membership in
a labor union of the rank-and-file employees but may form, join or assist separate labor unions of their own. Managerial
employees shall not be eligible to form, join or assist any labor unions for purposes of collective bargaining. Alien
employees with valid working permits issued by the Department may exercise the right to self-organization and join or
assist labor unions for purposes of collective bargaining if they are nationals of a country which grants the same or similar
rights to Filipino workers, as certified by the Department of Foreign Affairs.

For purposes of this section, any employee, whether employed for a definite period or not, shall beginning on the first day
of his/her service, be eligible for membership in any labor organization.

All other workers, including ambulant, intermittent and other workers, the self-employed, rural workers and those
without any definite employers may form labor organizations for their mutual aid and protection and other legitimate
purposes except collective bargaining.

[Emphases Supplied]

Clearly, there is nothing in the foregoing implementing rules which provides that workers, with definite employers,
cannot form or join a workers' association for mutual aid and protection. Section 2 thereof even broadens the coverage of
workers who can form or join a workers' association. Thus, the Court agrees with Samahan's argument that the right to
form a workers' association is not exclusive to ambulant, intermittent and itinerant workers. The option to form or join a
union or a workers' association lies with the workers themselves, and whether they have definite employers or not.

No misrepresentation on the part

of Samahan to warrant cancellation
of registration

In this case, Samahan's registration was cancelled not because its members were prohibited from forming a workers'
association but because they allegedly committed misrepresentation for using the phrase, "KAMI, ang mga Manggagawa
sa HANJIN Shipyard."

Misrepresentation, as a ground for the cancellation of registration of a labor organization, is committed "in connection
with the adoption, or ratification of the constitution and by-laws or amendments thereto, the minutes of ratification, the
list of members who took part in the ratification of the constitution and by-laws or amendments thereto, and those in
connection with the election of officers, minutes of the election of officers, and the list of voters, xxx."56

In Takata Corporation v. Bureau of Relations,57 the DOLE Regional Director granted the petition for the cancellation of
certificate of registration of Samahang Lakas Manggagawa sa Takata (Salamat) after finding that the employees who
attended the organizational meeting fell short of the 20% union registration requirement. The BLR, however, reversed
the ruling of the DOLE Regional Director, stating that petitioner Takata Corporation (Takata) failed to prove deliberate
and malicious misrepresentation on the part of respondent Salamat. Although Takata claimed that in the list of members,
there was an employee whose name appeared twice and another was merely a project employee, such facts were not
considered misrepresentations in the absence of showing that the respondent deliberately did so for the purpose of
increasing their union membership. The Court ruled in favor of Salamat.

In S.S. Ventures International v. S.S. Ventures Labor Union,58 the petition for cancellation of certificate of registration was
denied. The Court wrote:

If the union's 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. R0300-oo-02-UR-0003
necessarily implies that its application for registration and the supporting documents thereof are prima facie free from
any vitiating irregularities. Another factor which militates against the veracity of the allegations in the Sinumpaang
Petisyon is the lack of particularities on how, when and where respondent union perpetrated the alleged fraud on each
member. Such details are crucial for in the proceedings for cancellation of union registration on the ground of fraud or
misrepresentation, what needs to be established is that the specific act or omission of the union deprived the complaining
employees-members of their right to choose.

[Emphases Supplied]

Based on the foregoing, the Court concludes that misrepresentation, to be a ground for the cancellation of the certificate of
registration, must be done maliciously and deliberately. Further, the mistakes appearing in the application or attachments
must be grave or refer to significant matters. The details as to how the alleged fraud was committed must also be
indubitably shown.

The records of this case reveal no deliberate or malicious intent to commit misrepresentation on the part of
Samahan.1â wphi1 The use of such words "KAMI, ang mga Manggagawa sa HANJIN Shipyard" in the preamble of the
constitution and by-laws did not constitute misrepresentation so as to warrant the cancellation of Samahan's certificate of
registration. Hanjin failed to indicate how this phrase constitutes a malicious and deliberate misrepresentation. Neither
was there any showing that the alleged misrepresentation was serious in character. Misrepresentation is a devious charge
that cannot simply be entertained by mere surmises and conjectures.

Even granting arguendo that Samahan' s members misrepresented themselves as employees or workers of Hanjin, said
misrepresentation does not relate to the adoption or ratification of its constitution and by-laws or to the election of its
officers.

Removal of the word "Hanjin Shipyard"

from the association 's name, however,
does not infringe on Samahan 's right to
self-organization

Nevertheless, the Court agrees with the BLR that "Hanjin Shipyard" must be removed in the name of the association. A
legitimate workers' association refers to an association of workers organized for mutual aid and protection of its
members or for any legitimate purpose other than collective bargaining registered with the DOLE.59 Having been granted
a certificate of registration, Samahan's association is now recognized by law as a legitimate workers' association.

According to Samahan, inherent in the workers' right to selforganization is its right to name its own organization. It seems
to equate the dropping of words "Hanjin Shipyard" from its name as a restraint in its exercise of the right to self-
organization. Hanjin, on the other hand, invokes that "Hanjin Shipyard" is a registered trade name and, thus, it is within
their right to prohibit its use.

As there is no provision under our labor laws which speak of the use of name by a workers' association, the Court refers
to the Corporation Code, which governs the names of juridical persons. Section 18 thereof provides:

No corporate name may be allowed by the Securities and Exchange Commission if the proposed name is identical or
deceptively or confusingly similar to that of any existing corporation or to any other name already protected by law or is
patently deceptive, confusing or contrary to existing laws. When a change in the corporate name is approved, the
Commission shall issue an amended certificate of incorporation under the amended name.
[Emphases Supplied]

The policy underlying the prohibition in Section 18 against the registration of a corporate name which is "identical or
deceptively or confusingly similar" to that of any existing corporation or which is "patently deceptive" or "patently
confusing" or "contrary to existing laws," is the avoidance of fraud upon the public which would have occasion to deal
with the entity concerned, the evasion of legal obligations and duties, and the reduction of difficulties of administration
and supervision over corporations.60

For the same reason, it would be misleading for the members of Samahan to use "Hanjin Shipyard" in its name as it could
give the wrong impression that all of its members are employed by Hanjin.

Further, Section 9, Rule IV of D.O. No. 40-03, Series of 2003 explicitly states:

The change of name of a labor organization shall not affect its legal personality. All the rights and obligations of a labor
organization under its old name shall continue to be exercised by the labor organization under its new name.

Thus, in the directive of the BLR removing the words "Hanjin Shipyard," no abridgement of Samahan's right to self-
organization was committed.

WHEREFORE, the petition is PARTIALLY GRANTED. The July 4, 2013 Decision and the January 28, 2014 Resolution of the
Court of Appeals are hereby REVERSED and SET ASIDE. The September 6, 2010 Resolution of the Bureau of Labor
Relations, as modified by its November 28, 2011 Resolution, is REINSTATED. SO ORDERED.

G.R. No. 152322 February 15, 2005

ERNESTO C. VERCELES, DIOSDADO F. TRINIDAD, SALVADOR G. BLANCIA, ROSEMARIE DE LUMBAN, FELICITAS F.
RAMOS, MIGUEL TEAÑO, JAIME BAUTISTA and FIDEL ACERO, as Officers of the University of the East Employees’
Association, petitioners, vs. BUREAU OF LABOR RELATIONS-DEPARTMENT OF LABOR AND EMPLOYMENT,
DEPARTMENT OF LABOR AND EMPLOYMENT-NATIONAL CAPITAL REGION, RODEL E. DALUPAN, EFREN J. DE
OCAMPO, PROCESO TOTTO, JR., ELIZABETH ALARCA, ELVIRA S. MANALO, and RICARDO UY, respondents.

DECISION

CHICO-NAZARIO, J.:

Before Us is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, assailing the Decision1
and Resolution2 rendered by the Court of Appeals, dated 24 October 2001 and 15 February 2002, respectively.

The Facts

Private respondents Rodel E. Dalupan, Efren J. De Ocampo, Proceso Totto, Jr., Elizabeth Alarca, and Elvira S. Manalo are
members of the University of the East Employees’ Association (UEEA). On 15 September 1997, they each received a
Memorandum from the UEEA charging them with spreading false rumors and creating disinformation among the
members of the said association. They were given seventy-two hours from receipt of the Memorandum to submit their
Answer.3

The acts of the respondents allegedly fall under General Assembly Resolution No. 4, Series of 1979, to wit:

1. Circulating false rumors about the progress of the negotiations for collective bargaining;

2. Creating distrust or loss of trust and confidence of members in the Association;

3. Creating dissension among the members;

4. Circulating false rumors about the work of the Association or sabotaging the same;

5. Withholding from the Association and/or members material information as to their rightful entitlement to benefits
and/or money claims;

6. Acting as a spy against the Association or divulging confidential matters to persons not entitled thereto;

7. Such other offenses, which may injure or disrupt the functions of the Association.4

Through a collective reply dated 19 September 1997, private respondents denied the allegations. Thereafter, on 23
September 1997, they sent a letter dated 22 September 1997 to the Chairman and Members of UEEA’s Disciplinary
Committee, informing them that the Memorandum of 15 September 1997 was vague and without legal basis, therefore, no
intelligent answer may be made by them. They likewise stated that any sanction that will be imposed by the committee
would be violative of their right to due process.5

The Disciplinary Committee issued another Memorandum, dated 24 September 1997, giving the respondents another
seventy-two hours from receipt within which to properly reply, explaining that the collective reply letter and
supplemental answer which were earlier submitted were not responsive to the first Memorandum. Their failure would be
construed as an admission of the truthfulness and veracity of the charges.6

On 01 October 1997, the respondents issued a denial for the second time, and inquired from the Disciplinary Committee
as to whether they were being formally charged.7

On 09 October 1997, Ernesto Verceles, in his capacity as president of the association, through a Memorandum, informed
Rodel Dalupan, et al., that their membership in the association has been suspended and shall take effect immediately upon
receipt thereof. Verceles said he was acting upon the disciplinary committee’s finding of a prima facie case against them.8
Respondent Ricardo Uy also received a similar memorandum on 03 November 1997.9

On 01 December 1997, a complaint10 for illegal suspension, willful and unlawful violation of UEEA constitution and by-
laws, refusal to render financial and other reports, deliberate refusal to call general and special meetings, illegal holdover
of terms and damages was filed by the respondents against herein petitioners Ernesto C. Verceles, Diosdado F. Trinidad,
Salvador G. Blancia, Rosemarie De Lumban, Felicitas Ramos, Miguel Teañ o, Jaime Bautista and Fidel Acero before the
Department of Labor and Employment, National Capital Region (DOLE-NCR).

A few days after the filing of the complaint, i.e., on 10 December 1997, a resolution11 was passed by UEEA which reads as
follows:

RESOLUTION

WHEREAS, the Association has gone thru a most arduous, difficult, and trying times in working to obtain the best terms
and conditions of employment for its members, specifically for the period 1992 to 1996;

WHEREAS, said difficulties are in the form of near strikes, cases with the Department of Labor and Employment and its
agencies, as well as with the Supreme Court;

WHEREAS, the general membership (has) shown exceptional patience and perseverance and generally (had)
demonstrated full trust and confidence in the Association officers and accordingly approved the manner and/or actions
undertaken in pursuing said difficult task of arriving at a most beneficial agreement for the general membership;

NOW, THEREFORE, be it resolved as it is hereby resolved that:

...

b) the general membership reiterate its loyalty to the Association and commends the Association officers for their effort
expended in working for the benefit of the whole membership.

APPROVED.

Manila. 10 December 1997.

On 22 November 1999, a decision12 was rendered by Regional Director Maximo B. Lim, adverse to petitioners, the
dispositive portion of which reads:

WHEREFORE, premises considered, respondent[s] [are] hereby ordered:

1. to immediately lift suspension imposed upon the complainants;

2. to hold a general membership meeting wherein they (respondents) make open and available the union’s/association’s
books of accounts and other documents pertaining to the union funds [and] thereby explain the financial status of the
union;

3. to regularly conduct special and general membership meetings in accordance with the union’s constitution and by-
laws;

4. to immediately hold/conduct an election of officers in accordance with the union’s constitution and by-laws.

Accordingly, the claims of complainants for damages [are] hereby ordered dismissed for lack of jurisdiction.

However, within ten (10) days upon receipt of this Order, the complainants are hereby directed to submit a written report
whether or not the respondents had complied with this Order.

The petitioners appealed to the Bureau of Labor Relations of the Department of Labor and Employment (BLR-DOLE).
During the pendency of this appeal, or on 07 April 2000, an election of officers was held by the UEEA. The appeal,
however, was dismissed for lack of merit in a Resolution13 dated 22 September 2000, the decretal portion of which
reads:
WHEREFORE, the appeal is hereby DISMISSED for lack of merit and the decision dated 22 (November) 1999 of Regional
Director Maximo B. Lim, DOLE-NCR, is AFFIRMED.

Meanwhile, Resolution No. 8, Series of 2000, was passed by the UEEA, wherein the members allegedly reiterated their
support and approval of the acts and collateral actions of the officers.14

A Motion for Reconsideration15 was filed by the petitioners with the BLR-DOLE, but was denied in a Resolution16 dated
15 January 2001.

A special civil action for certiorari17 was thereafter filed before the Court of Appeals citing grave abuse of discretion
amounting to lack or excess of jurisdiction. In a Resolution18 dated 22 February 2001, the Court of Appeals dismissed the
petition outright for failure to comply with the provisions of Section 1, Rule 65 in relation to Section 3, Rule 46 of the 1997
Rules of Civil Procedure. A Motion for Reconsideration19 was filed which was granted in a Resolution20 dated 24 April
2001, thus, reinstating the petition.1awphi1.nét

On 24 October 2001, the Court of Appeals rendered a Decision21 dismissing the petition, the dispositive portion of which
reads:

WHEREFORE, premises considered, the instant petition is DENIED DUE COURSE and DISMISSED for lack of merit. No
pronouncement as to costs.

A Motion for Reconsideration22 was thereafter filed by the petitioners. In a Resolution23 dated 15 February 2002, the
Court of Appeals modified its earlier decision. The decretal portion of which states:

WHEREFORE, the questioned decision of this court is MODIFIED. The 22 September 2000 and 15 January 2001
resolutions of the BLR insofar as they affirmed the part of the 22 November 1999 decision of the Regional Director of
DOLE-NCR ordering the immediate holding of election are HEREBY ANNULLED AND SET ASIDE. All the other aspects of
the assailed Resolutions are AFFIRMED.

Not satisfied, the petitioners filed a petition for review on certiorari24 before this Court.

The Issues

The petitioners raise the following issues:

1. WHETHER OR NOT THERE IS REVERSIBLE ERROR IN THE COURT OF APPEALS’ UPHOLDING THE DOLE-NCR AND
BLR-DOLE DECISIONS BASED ONLY ON THE COMPLAINT AND ANSWER;

2. WHETHER OR NOT IT IS REVERSIBLE ERROR FOR THE COURT OF APPEALS TO HOLD THE ELECTION OF APRIL 7,
2000 AS INVALID AND A NULLITY;

3. WHETHER OR NOT IT IS REVERSIBLE ERROR TO UPHOLD BLR-DOLE’S FINDING THAT THE SUSPENSION WAS
ILLEGAL; and

4. WHETHER OR NOT THE ALLEGED NON-HOLDING OF MEETINGS AND ALLEGED NON-SUBMISSION OF REPORTS ARE
MOOT AND ACADEMIC, AND WHETHER THE DECISION TO HOLD MEETINGS AND SUBMIT REPORTS CONTRADICT AND
OVERRIDE THE SOVEREIGN WILL OF THE MAJORITY.25

The Court’s Rulings

We shall discuss the issues in seriatim.

First Issue: was the court a quo correct in upholding the DOLE-NCR and BLR-DOLE decisions based only on the complaint
and answer?

Petitioners contend that the complaint filed by the private respondents in DOLE-NCR was a mere recital of bare, self
serving and unsubstantiated allegations. Both parties did not submit position papers, and the DOLE-NCR resolved the
case based only on the complaint and answer. Also, by failing to submit a reply to the answer, private respondents, in
effect admitted the petitioners’ controversion of the charges.26 They further argue that the private respondents did not
exhaust administrative remedies and that the requirement of support by at least 30% of the members of the association
pursuant to Section 1, Rule XIV, Article I, Department Order No. 9 of DOLE, was not complied with.27

Private respondents, on the other hand, assert that the records show that despite their failure to submit their position
papers, they nonetheless moved that the case be resolved by DOLE-NCR based on the complaint, answer and available
exhibits or annexes integrated with the aforesaid pleadings.28 The principle of non-exhaustion of administrative
remedies that would warrant the dismissal of the case should not operate against them because they were deprived of
their right to due process when they were indefinitely suspended without the benefit of a formal charge which is
sufficient in form and substance.29 The respondents also point out that the thirty percent (30%) support requirement
pursuant to Section 1, Rule XIV, Article I, Department Order No. 9, is not applicable to them because their complaint was
primordially predicated on their suspension while the rest of the causes of action were mere collateral consequences of
the principal cause of action.30

It is worthy to note that the BLR-DOLE, in its Resolution dated 22 September 2000, underscored the negligence of herein
petitioners not only in the submission of their pleadings but also in attending the hearings called for the purpose.31 Even
the Court of Appeals, in its decision, made this observation, thus:
It is apparent, however, that petitioners were to blame for their predicament. They repeatedly failed to appear in a series
of conferences scheduled by the DOLE-NCR, asked for resetting of hearings, and requested for extension of time to file its
answer. Hence, when they again did not attend a hearing on a date they themselves asked for, private respondents
(complainants therein) moved for the submission of the case based on their complaint, position paper and annexes
attached thereto.

When DOLE-NCR directed the parties to submit their respective position papers, petitioners again moved for extension of
time to file the same. When another notice was given to the parties to comply with the directive, petitioners prayed for
another extension of time. (Private respondents, however, reiterated their earlier motion to have the case resolved based
on available pleadings.) After six (6) months or so, petitioners finally filed not their position paper but their answer.32

The Court of Appeals was justified in upholding the DOLE-NCR and BLR-DOLE decisions based on the complaint and
answer. We cannot accept petitioners’ line of reasoning that since no position papers were submitted, no decision may be
made by the adjudicating body. As ruled by Regional Director Maximo B. Lim in his decision, the complaint and the
answer thereto were adopted as the parties’ position papers. Thereafter, the case shall be deemed submitted for
resolution.33

Labor laws mandate the speedy disposition of cases, with the least attention to technicalities but without sacrificing the
fundamental requisites of due process.34 The essence of due process is simply an opportunity to be heard.35 In this case,
it cannot be said that there was a denial of due process on the part of the petitioners because they were given all the
chances to refute the allegations of the private respondents, and the delay in the proceedings before the DOLE-NCR was
clearly attributable to them.

The argument that there was failure to exhaust administrative remedies cannot be sustained. One of the instances when
the rule of exhaustion of administrative remedies may be disregarded is when there is a violation of due process.36 In this
case, the respondents have chronicled from the very beginning that they were indefinitely suspended without the benefit
of a formal charge sufficient in form and substance. Therefore, the rule on exhaustion of administrative remedies cannot
squarely apply to them.

On the matter concerning the 30% support requirement needed to report violations of rights and conditions of union
membership, as found in the last paragraph of Article 241 of the Labor Code,37 we likewise cannot sanction the
petitioners. We have already made our pronouncement in the case of Rodriguez v. Director, Bureau of Labor Relations38
that the 30% requirement is not mandatory. In this case, the Court, speaking through Chief Justice Andres R. Narvasa,39
held in part:

The respondent Director’s ruling, however, that the assent of 30% of the union membership, mentioned in Article 242 of
the Labor Code, was mandatory and essential to the filing of a complaint for any violation of rights and conditions of
membership in a labor organization (such as the arbitrary and oppressive increase of union dues here complained of),
cannot be affirmed and will be reversed. The very article relied upon militates against the proposition. It states that a
report of a violation of rights and conditions of membership in a labor organization may be made by "(a)t least thirty
percent (30%) of all the members of a union or any member or members specially concerned." The use of the permissive
"may" in the provision at once negates the notion that the assent of 30% of all the members is mandatory. More decisive
is the fact that the provision expressly declares that the report may be made, alternatively by "any member or members
specially concerned." And further confirmation that the assent of 30% of the union members is not a factor in the
acquisition of jurisdiction by the Bureau of Labor Relations is furnished by Article 226 of the same Labor Code, which
grants original and exclusive jurisdiction to the Bureau, and the Labor Relations Division in the Regional Offices of the
Department of Labor, over "all inter-union and intra-union conflicts, and all disputes, grievances or problems arising from
or affecting labor management relations," making no reference whatsoever to any such 30%-support requirement.
Indeed, the officials mentioned are given the power to act "on all inter-union and intra-union conflicts (1) " upon request
of either or both parties" as well as (2) "at their own initiative."

Second Issue: was the election held on 07 April 2000 valid or a nullity?

This issue arose from the fact that the original decision of the DOLE-NCR dated 22 November 1999, ordered petitioners,
among other things, to "immediately hold/conduct an election of officers . . ." Petitioners, it must be recalled, appealed
from the DOLE-NCR decision to the BLR-DOLE. During the pendency of the appeal, however, an election of officers was
held on 07 April 2000. Subsequently, the BLR-DOLE affirmed the decision of the DOLE-NCR, but with the pronouncement
that ". . . the supposed election conducted on (07) April 2000 is null and void and cannot produce legal effects adverse to
appellants."40

The petitioners contend that since the election was held on 07 April 2000, and the original complaint before the DOLE-
NCR was filed on 01 December 1997, the former could not have been the subject of the complaint. There was, according to
petitioners, reversible error in the BLR-DOLE’s adding to the DOLE-NCR’s decision, the nullification of the 07 April 2000
election. The BLR–DOLE should have limited itself to affirming, modifying or setting aside and canceling the provisions of
the dispositive portion of the DOLE-NCR’s decision which was subject of the appeal. The election was held because the
term of the petitioners (extended for five years under Republic Act No. 671541 ) expired on 07 April 2000. As amended
by Republic Act 6715, paragraph (c) of Article 241 of the Labor Code now reads:

(c) The members shall directly elect their officers in the local union, as well as their national officers in the national union
or federation to which they or their local union is affiliated, by secret ballots at intervals of five (5) years.

It just so happened that the holding of the election coincided with the DOLE-NCR decision.42
The private respondents, in answer to this, point out that the 07 April 2000 election, as appearing in the 22 September
2000 Resolution of the BLR-DOLE, was set aside not on the flimsy reason that there was no complaint to invalidate it, but
due to the appeal of the petitioners questioning the BLR-DOLE’s order. The appeal effectively suspended the effect of the
DOLE-NCR Regional Director’s order for the immediate holding of election of officers in accordance with the union’s
constitution and by-laws.43

On this matter, the Court of Appeals made the following observation:

Consequently, the Regional Director of DOLE-NCR erred in ordering the immediate holding of election of officers of UEEA,
and the Bureau of Labor Relations (BLR)-Department of Labor and Employment, insofar as it affirmed this particular
order, committed an act amounting to grave abuse of discretion.

Nonetheless, despite of this finding, the election of UEEA officers on 7 April 2000 cannot acquire a semblance of legality.
First, it was conducted pursuant to the aforesaid (erroneous) order of the Regional Director as manifested by the
petitioners. Second, it was purposely done to pre-empt the resolution of the case by the BLR and to deprive private
respondents their substantial right to participate in the election. Third, petitioners cannot be allowed to take an
inconsistent position to later on claim that the election of 7 April 2000 was held because it was already due while
previously declaring that it was made in line with the order of the Regional Director, for this would go against the
principle of fair play.

Thus, while the BLR was wrong in affirming the order of the Regional Director for the immediate holding of election, it
was right in nullifying the 7 April 2000 UEEA election of officers. It was simply improper for the petitioners to implement
the said order which was then one of the subjects of their appeal in the BLR. To hold otherwise would be to dispossess the
BLR of its inherent power to control the conduct of the proceedings of cases pending before it for resolution.44

Based on the prevailing facts of this case, we affirm the foregoing findings of the court a quo. We cannot hold the election
of 07 April 2000 valid as this would make us condone an iniquitous act. Said election was perceptibly done to hinder any
resolution or decision that would be made by BLR-DOLE. The Regional Director indeed ordered the immediate holding of
an election in its Order dated 22 November 1999. The records show that the petitioners questioned this order of the
Regional Director before the BLR-DOLE by way of appeal,45 and yet, they conducted the election, allegedly because it was
due under Republic Act No. 6715. Why this was done by the petitioners escapes us. But as rightfully observed by the BLR-
DOLE:

. . . Indeed, it is obvious that the general membership meeting and election of officers was done purposely to pre-empt our
resolution of this case and, more importantly, the participation of appellees in the election. This cannot be tolerated.46

Third Issue: was the indefinite suspension of the private respondents illegal?

We rule in the affirmative.

The petitioners posit the theory that the records do not support the findings of the BLR-DOLE that no investigation was
conducted making the suspension illegal because of lack of due process.

It is best to remind the petitioners that this Court, as we have held in a long line of decisions, is not a trier of facts.47 The
instant case is a petition for review on certiorari48 where only questions of law may be raised. The exceptions49 to this
rule find no application here. This being the case, the findings of fact of the DOLE-NCR and the BLR-DOLE as affirmed by
the Court of Appeals to the effect that no investigation was conducted, shall not be disturbed. As properly held by the
court a quo:

Petitioners have failed to show that the findings of facts and conclusions of law of both the DOLE-NCR and BLR-DOLE
were arrived at with grave abuse of discretion or without substantial evidence. A careful review of the pleadings before
Us reveals that the decision and resolutions of the concerned agencies were correctly anchored in law and on substantial
evidence.50

Fourth Issue: is the non-holding of meetings and non-submission of reports by the petitioners moot and academic, and
whether the decision to hold meetings and submit reports contradict and override the sovereign will of the majority?

We do not believe so.

This issue was precipitated by the Court of Appeals decision affirming the order of DOLE Regional Director Maximo B. Lim
for the petitioners to hold a general membership meeting wherein they make open and available the union’s/association’s
books of accounts and other documents pertaining to the union funds, and to regularly conduct special and general
membership meetings in accordance with the union’s constitution and by-laws.51 It is to be recalled that the private
respondents, when they filed a complaint before the DOLE-NCR also complained of petitioners’ refusal to render financial
and other reports, and deliberate refusal to call general and special meetings.

Petitioners do not hide the fact that they belatedly submitted their financial reports and the minutes of their meetings to
the DOLE. The issue of belatedly submitting these reports, according to the petitioners, had been rendered moot and
academic by their eventual compliance. Besides, this has been the practice of the association.52 Moreover, the petitioners
likewise maintain that the passage of General Assembly Resolution No. 10 dated 10 December 1997 and Resolution No. 8,
Series of 2000, following the application of the principle that the sovereign majority rules, cured any liability that may
have been brought about by their belated actions.53 1awphi1.nét

As found by the Court of Appeals, the financial statements for the years 1995 up to 1997 were submitted to DOLE-NCR
only on 06 February 1998 while that for the year 1998 was submitted only on 16 March 1999.54 The last association’s
meeting was conducted on 21 April 1995, and the copy of the minutes thereon was submitted to BLR-DOLE only on 24
February 1998.

The passage of General Assembly Resolution No. 10 dated 10 December 1997 and Resolution No. 8, Series of 2000,55
which supposedly cured the lapses committed by the association’s officers and reiterated the approval of the general
membership of the acts and collateral actions of the association’s officers cannot redeem the petitioners from their
predicament. The obligation to hold meetings and render financial reports is mandated by UEEA’s constitution and by-
laws. This fact was never denied by the petitioners. Their eventual compliance, as what happened in this case, shall not
release them from the obligation to accomplish these things in the future.

Prompt compliance in rendering financial reports together with the holding of regular meetings with the submission of
the minutes thereon with the BLR-DOLE and DOLE-NCR shall negate any suspicion of dishonesty on the part of UEEA’s
officers. This is not only true with UEEA, but likewise with other unions/associations, as this matter is imbued with public
interest. Undeniably, transparency in the official undertakings of union officers will bolster genuine trade unionism in the
country.

WHEREFORE, in view of all the foregoing, the Decision and Resolution of the Court of Appeals subjects of the instant case,
are affirmed. Costs against the petitioners.

SO ORDERED.