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used by the petitioners in their jobs are all supplied by

“BROTHERHOOD” LABOR UNITY MOVEMENT vs the respondent SMC. It is only the manpower or labor
HON. ZAMORA (1991) force which the alleged contractors supply, suggesting
the existence of a "labor only" contracting scheme
FACTS: prohibited by law

It is important to emphasize that that in a truly

 Petitioners-members of “Brotherhood Labor
independent contractor-contractee relationship, the
Unit Movement of the Philippines” (BLUM), worked fees are paid directly to the manpower agency in lump
as “cargadores” or “pahinante” since 1961 at the sum without indicating or implying that the basis of
SMC Plant. Sometime in January 1969, the such lump sum is the salary per worker multiplied by
petitioner workers – numbering 140 organized the number of workers assigned to the company.
themselves and engaged in union activities. In the CAB, the alleged independent
 Believing that they are entitled to overtime and contractors were paid a lump sum representing only
holiday pay, the petitioners aired their gripes and the salaries the workers were entitled to, arrived at by
grievances but it was not heeded by the adding the salaries of each worker which depend on
respondents. One of the union member was the volume of work they had accomplished individually.
dismissed from work. Hence, the petitioners filed a Therefore, there is no independent contractor-
complaint of unfair labor practice against contractee relationship.
respondent SMC on the ground of illegal dismissal.
 On the other hand, SMC argued that the WHEREFORE, PETITION IS GRANTED.
complainant are not or have never been their
employees but they are the employees of the
Guaranteed Labor Contractor, an independent HAWAIIAN-PHILIPPINE COMPANY vs
labor contracting firm GULMATICO (1994)
 Labor Arbiter Nestor Lim rendered a decision
in favor of the complainants which was affirmed FACTS:
by the NLRC
 On appeal, the Secretary set aside the NLRC  Respondent-Union, the National Federation of
ruling stressing the absence of an employer- Sugar Workers-Food and General Trades, filed an
employee relationship action against petitioner Hawaiian Phil Co. for
claims under RA 809 (The Sugar Act of 1952).
Issue: Whether an employer-employee relationship Respondent Union alleged that they have never
exists between petitioners and respondent San Miguel availed of the benefits due them under the law.
Corporation  Under the said act: “the proceeds of any
increase in participation granted to planters under
HELD: YES this Act and above their present share shall be
In determining the existence of an employer-employee divided between the planter and his laborers in the
relationship, the elements that are generally following proportions. 60% of the increase
considered are the following: (a) the selection and participation for the laborers and 40% for the
engagement of the employee; (b) the payment of planters.
wages; (c) the power of dismissal; and (d) the  Petitioner argued that respondent Labor Arbiter
employer's power to control the employee with respect Gulmatico has no jurisdiction over the case
to the means and methods by which the work is to be considering their case does not fall under those
accomplished. It is the called "control test" that is the enumerated in Article 217 of the Labor Code which
most important element provides the jurisdiction of Labor Arbiters and the
Commission. Further, petitioner contends that it
In the CAB, petitioners worked continuously and has no ER-EE relationship with the respondent
exclusively for an average of 7 years for the company. sugar workers and that respondent union has no
Considering the length of time that the petitioners cause of action because it is the planters-
have worked, there is justification to conclude that employers who is liable to pay the worker’s share
they were engaged to perform activities necessary or under LOI No. 854.
desirable in the usual business of trade of the
respondent. Hence, petitioners are considered “regular Issue1: Whether public respondent Labor Arbiter has
employees.” jurisdiction to hear and decide the case against
petitioner
Even assuming that there is a contract of employment HELD: NO
executed between SMC and the said labor contractor, While jurisdiction over controversies involving
the court ruled that Guaranteed and Reliable Labor agricultural workers has been transferred from the
contractors have neither substantial capital nor Court of Agrarian Relations to the Labor Arbiters under
investment to qualify as an independent contractor the Labor Code, said transferred jurisdiction is
under the law. The premises, tools and equipments however, not without limitations. The controversy must

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fall under one of the cases enumerated under the the Commission SET ASIDE it’s previous decision
Labor Code which arise out of or are in connection with and remanded the case to the original arbitration
an ER-EE relationship branch of the NCR for further proceedings.
 Young filed his own MFR and the NLRC
In the CAB, there is no ER-EE relationship between reinstated it’s first decision directing the transfer of
petitioner company and respondent union. Hence, the case to Cebu City.
respondent Labor Arbiter has no jurisdiction to hear
and decide the case against petitioner. Issue: Whether the Labor Arbiter acted with grave
abuse of discretion when it entertained Young’s motion
Issue1: Whether respondent union has a cause of to transfer
action
HELD: NO HELD: NO
To have a cause of action, the claimant must show that The SC ruled that litigations should, as much as
he has a legal right and the respondent a correlative possible, be decided on the merits and not
duty in respect thereof, which the latter violated by technicalities. Petitioners were able to file an
some wrongful act or omission. opposition on the “motion to transfer case” which was
considered by Labor Arbiter Cenizares. Hence, there is
In the instant case, it would show that the payment of no showing that they have been unduly prejudiced by
the worker’s share is liability of the planters- the motion’s failure to give notice and hearing.
employers, and not of the petitioner milling company.
It is disputed that petitioner milling company has However, Young cannot derive comfort from this
already distributed to its planters their respective petition. The SC held that the question of venue
shares. Hence, it has fulfilled its part and has nothing relates more to the convenience of the parties rather
more to do with the subsequent contribution by the than upon the substance and merits of the case. This
planters of the worker’s share. is to assure convenience for the plaintiff and his
witness and to promote the ends of justice under the
WHEREFORE, PETITION IS GRANTED. principle that “the State shall afford protection to
labor.” The reason for this is that the worker, being
the economically-disadvantaged party, the nearest
DAYAG vs HON. CENIZARES, JR. (1998) governmental machinery to settle the dispute must be
placed at his immediate disposal, and the other party
FACTS: is not to be given the choice of another competent
agency sitting in another place as this will unduly
burden the former
 Petitioners were hired to work as tower crane
operators by one Alfredo Young, a building In the instant case, the ruling specifying the NCR
contractor doing business in the name of Young’s Arbitration Branch as the venue of the present action
construction. In 1991, they were transferred to cannot be considered oppressive to Young because his
Cebu City to work for Young’s Shoemart Cebu residence in Corinthian Gardens also serves as his
Project. Petitioner William Dayag asked permission correspondent office. Hearing the case in Manila would
to go to Manila to attend family matters and was clearly expedite the proceedings and bring speedy
allowed to do so but was not paid for January 23- resolution to the instant case.
30 due to his accountability for the loss of certain
construction tools. The other petitioners left due to WHEREFORE, PETITION IS GRANTED.
harassment by Young. Thereafter, petitioners
banded together and filed a complaint against
Young before the NCR Arbitration Branch NLRC
NATIONAL UNION OF BANK EMPLOYEES vs
which was assigned to Labor Arbiter Cenizares.
LAZARO (1988)
 Young filed a “Motion to transfer the case” to
the Regional Arbitration Branch, Region VII of the FACTS:
NLRC. He contended that the case should be filed
in Cebu City because there is where the workplace
of the petitioners.  The Commercial Bank and Trust Company
entered into a collective bargaining agreement with
 Petitioners opposed the same, arguing that all Commercial Bank and Trust Company Union,
of them are from Metro Manila and that they could representing the file and rank of the bank with a
not afford trips to Cebu. Besides, they claimed that membership of over 1,000 employees
respondent’s main office is in Corinthian Garden in
QC.  In 1980, the union, together with the National
Union of Bank EEs submitted to bank management
 Labor Arbiter Cenizares GRANTED Young’s proposals for the negotiation of a new collective
“motion to transfer the case in Cebu.” bargaining agreement. The following day, however,
 Petitioners appealed to NLRC but it was the bank suspended negotiations with the union.
dismissed. Hence, they filed a MFR and this time The bank entered into a merger with BPI which

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assumed all assets and liabilities. in the performance of his duties

 The Union went to the CFI Manila, presided  The Executive Labor Arbiter ruled that
over by respondent Judge Lazaro, and filed a Vailoces was illegally dismissed because he was
complaint for specific performance, damages, and not afforded due process of law. NLRC affirmed
preliminary injunction against private respondents. the decision of the Labor Arbiter because of the
 Private Respondent filed a “Motion to Dismiss” appeal of the petitioners was filed late.
on the ground of lack of jurisdiction of the court.
Respondent Judge dismissed the case on the Issue: Whether the election of the Directors were
ground that the complaint partook of unfair labor validly held
practice dispute and jurisdiction over which is
vested in the labor arbiter. HELD: YES
Under PD No. 902-A, “Controversies in the election or
Issue: Whether courts may take cognizance of claims appointments of directors, trustees, officers or
for damages arising from labor controversy managers of such corporations, partnerships or
associations, are explicitly declared to be within the
HELD: NO original and exclusive jurisdiction of the Securities and
The SC sustained the dismissal of the case and Exchange Commission.”
held that the act complained of involves collecting
bargaining which is categorized to be an unfair labor In the CAB, it shows that the controversy between the
practice. Under the Labor Code, “all cases involving parties is intra-corporate in nature because it revolves
unfair labor practices shall be under the jurisdiction of around the election of directors, officers or managers
the labor arbiters.” of the Rural Bank of Ayungon, the relation between
and among its stockholders, and between them and
As correctly held by the respondent court, an unfair the corporation. It is well settled that the decision of a
labor practice controversy is within the original and tribunal not vested with appropriate jurisdiction is null
exclusive jurisdiction of the Labor Arbiters and the and void.
exclusive appellate jurisdiction of the NLRC.
Jurisdiction is conferred by law and not Therefore, the judgment of the Labor Arbiter and the
necessarily by the nature of action. In the CAB, PD NLRC are void for lack of jurisdiction.
No. 442, as amended by Batas Blg. 70, has vested
jurisdiction upon the Labor Arbiters, a jurisdiction the WHEREFORE, PETITION IS GRANTED
courts may not assume.

WHEREFORE, PETITION DENIED ESPINO vs NLRC and PAL (1995)

FACTS:
DY vs NLRC (1986)
 Petitioner Leslie W. Espino was the Exec. Vice
FACTS: President-Chief Operating Officer of respondent
Phil Airlines (PAL) when his service was terminated
 Private Respondent Carlito H. Vailoces was the in 1990 as a result of the findings of the panels
manager of the Rural Bank of Ayungon (Negros created by then President Corazon C. Aquino to
Oriental). He was also a director and stockholder of investigate the administrative charges filed against
the bank. him. It appears that petitioner and other several
 In 1983, a special stockholder’s meeting was senior officers of PAL were charged for their
called for the purpose of electing the members of involvement in 4 cases, labeled as “Goldair,”
the bank’s Board of Directors. Petitioner Lorenzo “Robelle,” “Kabash/Primavera,” and “Middle East.”
Dy was elected president. Vailoces was not re-  The PAL Board of Directors issued separate
elected as bank manager. resolutions wherein Espino was considered resign
 Vailoces filed a complaint for illegal dismissal from the service effective immediately for loss of
and damages with the Ministry of Labor and confidence
Employment against Lorenzo Dy asserting that Dy,  Espino filed a complaint for “illegal dismissal”
after obtaining control of the majority stock of the against PAL with the NLRC, Arbitration Branch,
bank, called an illegal stockholder’s meeting and NCR.
elected a Board of Directors controlled by him; and  PAL argued that board resolutions cannot be
that he was illegally dismissed as manager, without reviewed by the NLRC and that the recourse of the
giving him the opportunity to be heard first. petitioner Espino should have been addressed by
 Dy denied the charge of illegal dismissal and way of appeal, to the OP.
pointed out that Vailoces’ position was an elective
one, and he was not re-elected as bank manager  Labor Arbiter Cresencio J. Ramos rendered a
because of the Board’s loss of confidence in him decision in favor of petitioner Espino
brought about by his absenteeism and negligence  PAL asserted that the Labor Arbiter’s decision

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is null and void for lack of jurisdiction over the it committed some irregularities in the conduct of
subject matter as it is the SEC, and not the NLRC its business. On the basis of its findings, DOLE
which has jurisdiction over involving dismissal or ordered petitioner corporation to pay its 13
removal of corporate officers. employees, which included Movilla, an amount
 NLRC promulgated a resolution and this time representing their salaries, holiday pay,
ruled in favor of PAL on the ground of lack of service incentive leave pay differentials, unpaid
jurisdiction wages and 13th month pay. All the employees
 Petitioner Espino contended that it is the NLRC listed in the DOLE’s order were paid by
that has jurisdiction over the case as it involves petitioner except Movilla.
the termination of a regular employee and involves  Movilla filed a case against petitioner with the
claim for backwages and other benefits and DOLE in Davao City. However, in 1992, Movilla died
damages while the case was being tried. Hence, he was
substituted by his heirs, private respondents
Issue: Whether the NLRC has jurisdiction over the herein.
complaint filed by the petitioner for illegal dismissal  The Labor Arbiter dismissed the complaint on
the ground that the controversy is intra-corporate
HELD: NO in nature hence it is the SEC who has jurisdiction
Under P.D. No. 902-A, it is the Securities and Exchange over and not the Labor Arbiter.
Commission and not the NLRC that has original and
exclusive jurisdiction over cases involving the removal  On appeal, the NLRC reversed the Labor
from employment of corporate officers. Under the said Arbiter and ruled that the case was one which
decree, the SEC has the exclusive and original involved a labor dispute, thus the NLRC has
jurisdiction to hear and decide cases involving jurisdiction to resolve the case
“Controversies in the election or appointments of
directors, trustees, officers or managers of such Issue: Whether the NLRC has jurisdiction over the
corporations, partnerships or associations.” controversy and not the SEC

It has been ruled that a corporate officer’s dismissal is HELD: YES

always a corporate act and/or an intra-corporate The NLRC has jurisdiction over the case. The fact that
controversy and that nature is not altered by the the parties involved in the controversy are all
reason or wisdom which the Board of Directors may stockholders and the corporation does not necessarily
have in taking such action. Evidently, this intra- place the dispute within the jurisdiction of SEC. In
corporate controversy must be place under the order that the SEC can take cognizance of a case, the
specialized competence and expertise of the SEC. controversy must pertain to factors such as the status
or relationship of the parties or the nature of the
The fact that petitioner sought payment of his question that is the subject of their controversy.
backwages, other benefits, as well as damages and Furthermore, it does not necessarily follow that every
attorney's fees in his complaint for illegal dismissal will conflict between corporation and its stockholders can
not operate to prevent the SEC from exercising its only be resolve by the SEC.
jurisdiction under PD 902-A. As to the contention of
Espino that PAL is estopped from questioning the In the CAB, the claim for unpaid wages and separation
jurisdiction of the NLRC, it is well-settled that pay involves a labor dispute. It does not involve an
jurisdiction over the subject matter is conferred by law intra-corporate matter, even when it is between a
and the question of lack of jurisdiction may be raised stockholder and a corporation. It relates to an ER-EE
anytime even on appeal. relationship which is distinct from the corporate
relationship of one with the other. Therefore, since the
WHERFORE, PETITION IS DENIED complaint of Movilla involves a labor dispute, it is the
NLRC which has jurisdiction over the CAB.

WHEREFORE, PETITION IS DENIED

MAINLAND CONSTRUCTION CO., INC. vs
MOVILLA (1995)

FACTS:
PEPSI-COLA BOTTLING COMPANY vs HON.
 Ernest Movilla, who was a CPA during his MARTINEZ (1982)
lifetime, was hired by Mainland in 1977.
Thereafter, he was promoted to the position of FACTS:
Administrative Officer. He has a monthly salary of
P4,700.00/month and he was registered with SSS  Respondent Abraham Tumala, Jr. was salesman
as an employee of petitioner corporation petitioner company in Davao City. In the annual
 In 1991, The DOLE conducted a routine “Sumakwel” contest conducted by the company, he
inspection on petitioner corporation and found that was declared the winner of the “Lapu-Lapu Award”

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for his performance as top salesman of the year, proposal and refused Mr. Vega’s subsequent
an award which entitled him to a prize of a house demands for cash award under the innovation
and lot. Petitioner company, despite demands, program. Hence, Vega filed a complaint with the
have unjustly refused to deliver said prize. then Ministry of Labor and Employment in Cebu.
 It was alleged that in 1980, petitioner He argued that his proposal had been accepted by
company, in a manner oppressive to labor and the methods analyst and was implemented by the
without prior clearance from the Ministry of Labor, SMC and it finally solved the problem of the
arbitrarily and illegally terminated his employment. Corporation in the production of Beer Grande.
Hence, Tumala filed a complaint in the CFI Davao  Petitioner denied of having approved Vega’s
and prayed that petitioner be ordered to deliver his proposal. It stated that said proposal was turned
prize of house and lot or its cash equivalent, and to down for “lack of originality” and the same, even if
pay his back salaries and separation benefits. implemented, could not achieve the desire result.
 Petitioner moved to dismiss the complaint on Further, petitioner Corporation alleged that the
grounds of lack of jurisdiction. Respondent Tumala Labor Arbiter had no jurisdiction.
maintains that the controversy is triable exclusively  The Labor Arbiter dismissed the complaint for
by the court of general jurisdiction lack of jurisdiction because the claim of Vega is
“not a necessary incident of his employment” and
Issue: Whether it is the court of general jurisdiction does not fall under Article 217 of the Labor Code.
and not the Labor Arbiter that has exclusive However, in a gesture of compassion and to show
jurisdiction over the recovery of unpaid salaries, the government’s concern for the working man,
separation and damages the Labor Arbiter ordered petitioner to pay Vega
P2,000 as “financial assistance.” Both parties
HELD: NO assailed said decision of the Labor Arbiter. The
SC ruled that the Labor Arbiter has exclusive NLRC set aside the decision of the Labor Arbiter
jurisdiction over the case. Jurisdiction over the subject and ordered SMC to pay complainant the amount
matter is conferred by the sovereign authority which of P60,000
organizes the court; and it is given by law.
Jurisdiction is never presumed; it must be Issue: Whether the Labor Arbiter and the Commission
conferred by law in words that do not admit of has jurisdiction over the money claim filed by private
doubt. respondent

Under the Labor Code, the NLRC has the exclusive HELD: NO
jurisdiction over claims, money or otherwise, arising The Labor Arbiter and the Commission has no
from ER-EE relations, except those expressly excluded jurisdiction over the money claim of Vega.
therefrom. The claim for the said prize unquestionable
arose from an ER-EE relation and, therefore, falls The court ruled that the money claim of private
within the coverage of P.D. 1691, which speaks of “all respondent Vega arose out of or in connection with his
claims arising from ER-EE relations, unless expressly employment with petitioner. However, it is not enough
excluded by this Code. To hold that Tumala’s claim for to bring Vega’s money claim within the original and
the prize should be passed upon by the regular courts exclusive jurisdiction of Labor Arbiters.
of justice would be to sanction split jurisdiction and
multiplicity of suits which are prejudicial to the orderly In the CAB, the undertaking of petitioner SMC to grant
of administration of justice. cash awards to employees could ripen into an
enforceable contractual obligation on the part of
WHEREFORE, PETITION IS GRANTED. petitioner SMC under certain circumstances. Hence,
the issue whether an enforceable contract had arisen
between SMC and Vega, and whether it has been
SAN MIGUEL CORP. vs NLRC (1988) breached, are legal questions that labor legislations
cannot resolved because it’s recourse is the law on
FACTS: contracts.

Where the claim is to be resolved not by reference to

 Petitioner San Miguel Corporation (SMC)
the Labor Code or other labor relations statute or a
sponsored an Innovation Program which grant cash collective bargaining agreement BUT by the general
rewards to all “SMC employees who submit to the civil law, the jurisdiction over the dispute belongs to
corporation ideas and suggestions found to the regular courts of justice and not to the Labor
beneficial to the corporation. Arbiter and NLRC.
 Private Respondent Rustico Vega, who is a
mechanic in the Bottling Department of the SMC WHEREFORE, PETITION IS GRANTED
submitted an innovation proposal which supposed
to eliminate certain defects in the quality and taste
of the product “San Miguel Beer Grande.”
SUARIO vs BPI (1989)
 Petitioner Corporation did not accept the said

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FACTS:
The SC did not find any bad faith or fraud on the part
 Petitioner Leonardo D. Suario was the head of of the bank officials who denied the petitioner’s
the loan section of respondent BPI in 1976. During request for 6 months’ leave of absence without pay. He
his employment he pursued his studies of law with was merely given personal assurances which could be
the consent of the BPI reconsidered in later developments. There is no
evidence that they meant to deceive the petitioner.
 Sometime in March 1976, Suario verbally
requested the then VP and Branch Manager, Mr. Therefore, the fact that petitioner’s request was
Armando N. Guilatico, for a 6-month leave of denied, does not entitle him to damages.
absence without pay in order for him to take the
pre-bar review in Manila. Mr. Guilatico informed WHEREFORE, PETITION DENIED.
Suario that there would be no problem as to the
requested leave of absence. Sometime in May
1976, Suario received a verbal notice from the new
SOCO vs MERCANTILE CORP. OF DAVAO (1987)
Branch Manager, Mr. Vicente Casino, that he was
approved only a 30 day LOA. However, Mr
FACTS:
Guilatico, then assigned in Head Office as VP
advised Mr. Casino to inform Suario to avail the 30-
day LOA and proceed to Manila since the request  Respondent Mercantile Corp is engaged in the
would be ultimately granted. Suario availed the 30- sale and distribution of Ice Cream in Davao.
day LOA and proceeded to Manila. During the 1st Petitioner, who was employed as driver of
week of August, he received a letter ordering him respondent’s delivery van, was the President
to report back for work since his request was MERCO Employees Labor Union, an affiliate of the
disapproved. He decided not to report back Federation of Free Workers (FFW).
because of the considerable expenses already  An investigation was conducted due to reports
incurred in Manila. Hence, he received a that Soco was carrying on his union activities
application for a clearance to terminate on the during working hours. It appears that on January
ground of resignation/or abandonment. Suario 1979, Soco was ordered to deliver ice cream at
failed to file his opposition because he was busy Imperial Hotel and Your Goody Mart, but he
taking up the review deviated from his usual route and went to his co-
 During the 1st week of December 1976, Suario employee, who was then off duty. The personnel
went to respondent BPI but was verbally informed officer advised Soco to report to his office to
that he was already dismissed. He wrote a letter to explain his unauthorized deviation but Soco did not
the respondent bank requesting for a written and comply. MERCO wrote to FFW asking for a
formal advise as to his real status. The lawyers of grievance conference but Soco refused to attend in
BPI replied that his services is terminated. his belief that such in unnecessary. Hence, MERCO
Therefore, Suario filed a complaint for separation suspended Soco for 5 days for violation of
pay, damages and attorney’s fees against the BPI Company Rule No. 19(a).
on the ground that he was illegally dismissed.  On February 13, 1979, Soco, after making
 The Labor Arbiter ordered BPI to pay Suario’s deliveries of ice cream, went to the Office of the
claim for separation pay. His claim for damages SPFL Union. The Manager of MERCO saw the
and attorney’s fee were dismissed for lack of merit company vehicle parked along the street. He called
 On appeal, NLRC affirmed the decision of the two of his co-employees and took out the rotor of
Labor Arbiter the van. When Soco came out of the building, he
was unable to start the engine and called for
Issue1: Whether NLRC has no authority to entertain company assistance. Again, he was advised to
claims for moral and other forms of damages report to the office to explain but refused to do so.
HELD:NO He also refused to attend in the grievance
P.D. 1691, a decree which substantially reenacted conference.
Article 217 of the Labor Code in its original form,  Soco filed a complaint for Unfair Labor Practice
nullified P.D. 1367 and restored to the Labor Arbiters against MERCO alleging that the 5 days suspension
and the NLRC their jurisdiction to award all kinds of imposed on him was on account of his union
damages in cases arising from ER-EE relationship. activities. On the other hand, MERCO filed an
“application for clearance to terminate the services
Issue2: Whether petitioner Suario is entitled to his of Soco.” These 2 cases were consolidated and
claim for moral damages tried jointly as agreed by the contending parties
HELD: NO  The Regional Director granted MERCO’s
Although it is already settled that Labor Arbiters are application to terminate employment of petitioner
allowed to award moral and other forms of damages and dismissed the Soco’s complaint for unfair labor
arising from ER-EE relations, it is consistently ruled practice
that in the absence of a wrongful act or omission or of  On appeal, the Deputy Minister of Labor
fraud or bad faith, moral damages cannot be awarded affirmed

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 Petitioner Soco argued that under Policy No. 6

of the Ministry of Labor and Employment (MOLE),
the Regional Director has no jurisdiction to hear DEPARTMENT OF AGRICULTURE vs NLRC (1993)
and decide unfair labor practice cases because
such belongs to the Conciliation Section of the FACTS:
Regional Office of the MOLE. In short, such cases
should be first resolved by the Labor Arbiter and  Petitioner DOA and Sultan Security Agency
not the Regional Director. Furthermore, Soco entered into a contract for security services to be
asserts that the Deputy Minister of Labor violated provided by the latter to the said government
the constitutional provision of security of tenure of entity. In September 13, 1990, several guards of
employees and that assuming that he violated the the Sultan Security Agency filed a complaint for
company rule, he cannot be dismissed because his underpayment of wages, non-payment of 13th
violation only minimal and did not hamper the month pay, uniform allowances, night shift
operations of MERCO. differential pay, holiday pay and overtime pay, as
well as for damages against the DOA and the
Issue1: Whether the Regional Director has no Sultan Security Agency before the Regional
authority to decide the unfair labor practice cases Arbitration Branch in Cagayan De Oro City
HELD1: NO  The Labor Arbiter found DOA jointly and
After voluntarily submitting a cause and encountering severally liable with Sultan Agency for the payment
an adverse decision on the merits, it’s too late for the of money claim of the guards
loser to question the jurisdiction or the power of the
court.  The Labor Arbiter issued a “Writ of Execution”
commanding the City Sheriff to enforce and
In the CAB, in the initial hearing conducted by the execute the judgment against the DOA and Sultan.
Regional Director, it was agreed by the parties to The City Sheriff levied on execution 3 motor
consolidate the 2 cases considering that both cases vehicles of the DOA
concern the same parties and the issues involved are  Petitioner DOA filed a “petition for injunction,
interrelated. Petitioner Soco obviously accepted the prohibition and mandamus, with prayer for
jurisdiction of the Regional Director by presenting his preliminary injunction” with the NLRC Cagayan De
evidence. By having asked for affirmative relief, Oro. It argued that the writ of execution was
without challenging the Regional Director's power to effected without the Labor Arbiter having duly
hear and try his complaint for unfair labor practice, he acquired jurisdiction over the DOA. Hence, its
cannot rightfully now challenge the resolution made in decision was null and void. It also pointed out that
said cases by the same Director, based on the latter's the attachment of its property would jeopardize its
alleged lack of jurisdiction. governmental functions to the prejudice of the
public good
Issue2: Whether petitioner can avail the security of  NLRC --- dismissed the petition for injunction
tenure for lack of basis and a Temporary Stay of
HELD2: Execution is issued for a period of 2 months but
It is the prerogative of an employer company to not extendible.
prescribe reasonable rules and regulations necessary
or proper for the conduct of its business and to provide  DOA charges NLRC for grave abuse of
certain disciplinary measures in order to implement discretion for refusing to quash the writ of
said rules and to assure that the same would be execution. It argued that money claims against the
complied with. A rule prohibiting employees from Department falls under the exclusive jurisdiction of
using company vehicles for private purpose without the Commission on Audit. Further, the DOA asserts
authority from management is, from our viewpoint, a that the NLRC has disregarded the cardinal rule on
reasonable one. the non-suability of the State.
NLRC, on the other hand, argue that petitioner has
The Court is not unmindful of the fact that petitioner impliedly waived its immunity from suit by concluding
has, as he says, been employed with petitioner a service contract with Sultan Security Agency
Company for eighteen (18) years. On this singular
consideration, the Court deems it proper to afford Issue: Whether the DOA can be sued
some equitable relief to petitioner due to the
past services rendered by him to MERCO. Thus, it HELD:
is but appropriate that petitioner should be given by Under the Constitution, it says that “the State cannot
respondent MERCO, separation pay, equivalent to one be sued without its consent.” This simply means that a
month salary for every year of his service to said sovereign is exempt from suit on the ground that there
Company. can be no legal right as against the authority that
makes the law on which the right depends. This
WHEREFORE, PETITION IS DENIED but MERCO is doctrine is also called “the royal prerogative of
nevertheless, ordered to grant Soco his dishonesty” because it grants the State the prerogative
separation pay. to defeat any legitimate claim against it by simply

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invoking its non-suability application of the Civil Service Law. However, the Labor
Arbiter failed to take into account that P.D. 1479 wiped
This rule is not really absolute for it does not say that away the said exemption
state may not be sued under any circumstances. The
State’s consent may be given expressly or impliedly. Moreover, the NLRC relied upon Article 9, Section 2, of
Express consent may be made through a general law the 1987 Constitution which provides that: “[T]he Civil
or special law. On the other hand, Implied consent is Service embraces ... government owned or controlled
when the State itself commences litigation, thus corporations with original charters.”
opening itself to a counterclaim, or when it enters into
a contract At the time the dispute in the CAB arose, and at the
time the Labor Arbiter rendered its decision (which is
In the CAB, the claims of the security guards arising on March 17, 1986), the applicable law is that the
from the Contract for Service, clearly constitute money Labor Arbiter has no jurisdiction to render a decision
claims. Under Act No. 3083, a general law, the State that he in fact rendered. By the time the NLRC
consents and submits to be sued upon any moneyed rendered its decision (August 20, 1987), the 1987
claim involving liability arising from contract, express Constitution has already come into effect. The SC
or implied. However, the money claim must first be believes that the 1987 Constitution does not operate
brought to the Commission on Audit retroactively as to confer jurisdiction upon the Labor
Arbiter to render a decision, which was before outside
WHEREFORE, PETITION IS GRANTED the scope of its competence.

Therefore, a decision rendered by the Labor Arbiter

HAGONOY WATER DISTRICT vs NLRC (1988) without jurisdiction over the case is a complete nullity,
vesting no rights and imposing no liabilities.
FACTS: Villanueva, if he so wishes, may refile this complaint in
an appropriate
 Private Respondent Dante Villanueva was
WHEREFORE, PETITION IS GRANTED
employed as service foreman by petitioner
Hagonoy when he was indefinitely suspended and
thereafter dismissed for abandonment of work and Sadol vs. Pilipinas Kao, Inc., et al (1990)
conflict of interest
 Villanueva filed a complaint for illegal
dismissal, illegal suspension and underpayment of
wages and emergency cost of living allowance
against Hagonoy with the Ministry of Labor and
Employment in San Fernando, Pampanga
 Petitioner Hagonoy moved for dismissal on the
ground of lack of jurisdiction. Being government
entity, its personnel are governed by the provisions
of the Civil Service Law and not by the Labor Code.
And the protests concerning the lawlessness of
dismissal from service fall within the jurisdiction of
the Civil Service Commission and not the Ministry
of Labor and Employment.
 The Labor Arbiter rendered a decision on favor
of Villanueva
 NLRC affirmed the decision of the Labor
Arbiter. A “Writ of Execution” was issued by the
Labor Arbiter to garnish petitioner Hagonoy’s
deposits with the planters Development Bank.
 Hagonoy filed a “Motion to Quash the Writ of
Execution with Application for Writ of Preliminary
Injunction”. NLRC denied the application.

Issue: Whether local water districts are GOCC whose

employees are subject to the provisions of the Civil
Service Law

HELD: YES
The Labor Arbiter, in asserting that it has jurisdiction
over the employees of Hagonoy, relied on P.D. No. 198,
known as “Provincial Water Utilities Act of 1973” which
exempts employees of water districts from the

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case to the SC charging the NLRC with grave abuse of

Facts: discretion.
Petitioner was dismissed from work by private
respondents who are owners of Vega & Co., private Issue: Whether the petitioner may avail the special civil
recruitment agency, with assignment at respondent PKI. action for certiorari?
He filed a complaint for reinstatement and backwages
with the DOLE in Cagayan de Oro City. The Labor Arbiter Held: NO
ruled in favor of Sadol and ordered respondents to pay A petition for certiorari should be preceded by exhaustion
petitioner’s separation pay “at one month for every year of administrative remedies. Under said doctrine, a motion
of service.” Both parties appealed but respondent’s for reconsideration must first be filed before the special
appeal was filed out of time. The appeal of respondent action for certiorari may be availed of. In the case at
was dismissed for having been filed out of time. bench, the petitioner make a claim that it filed a motion
for the reconsideration of the challenged decision before it
Issue: Whether the respondent has lost the right to came to us through this action.
appeal

HELD: YES Midas Touch Food Corp. vs NLRC and Iris Fe Isaac
A party, who failed to appeal on time from a decision of (1996)
the Labor Abiter to the NLRC, may still participate in a
separate appeal timely filed by the adverse party by a Facts:
Motion for Reconsideration of the NLRC decision. In the Respondent Iris Fe Isaac was dismissed as operations
CAB, there is no question that respondents failed to file a manager by petitioner for alleged lack of self confidence.
timely appeal from the decision of the Labor Arbiter. Respondent filed a complaint for illegal dismissal before
Hence, having lost the right to appeal, the respondent the Labor Arbiter which rendered a decision in favor of
may choose to file a Motion for Reconsideration instead. petitioner finding the said dismissal to be valid. However,
petitioner was ordered to pay the complainants there
separation pay, etc. Both parties appealed to the NLRC
St. Martin Funeral Homes vs. NLRC and B. Aricayos and the decision of the Labor Arbiter was reversed, this
(1998) time ruling in favor of Isaac. Hence, petitioner elevated
the case to the SC assailing the decision of the NLRC.
Facts:
P. respondent was dismissed from work by petitioner for Issue: Whether the petitioner may avail the special civil
allegedly misappropriating P38,000.00. Hence, a action for certiorari?
complaint was filed for illegal dismissal before the NLRC.
Petitioner argued that respondent was not its employee. Held: YES
The Labor Arbiter ruled in favor of petitioner declaring The rule requiring motion for reconsideration before filing
that no employer-employee relationship between the a petition for certiorari “admits of certain exceptions,
parties and therefore his office had no jurisdiction over among which is the finding that under the circumstances
the case. On appeal, the NLRC set aside the questioned of the case, a motion for reconsideration would be
decision and remanding the case to the labor arbiter for useless.”
immediate appropriate proceedings.
In this case, the Supreme Court found it quite impossible
Issue: Whether or not the decision of the NLRC are for the NLRC to reverse itself under the foregoing facts
appealable to the Court of Appeals. and so, a motion for reconsideration will be deemed
useless.
Held: YES
The Supreme Court clarified and stressed that ever since Alindao vs Hon. Hoson (1996)
appeals from the NLRC to the Supreme Court were
eliminated, the legislative intendment is that the special Facts:
civil action of certiorari was and still the proper vehicle Petitioner applied for employment for Saudi Arabia
for judicial review of decisions of the NLRC. The through private respondent Hisham General Services
concurrent original jurisdiction of the Supreme Court can Contractor. She paid a placement fee of P15,000.00
be availed of only under compelling and exceptional without receipt. When she arrived in Saudi arrived in Saudi
circumstances. Arabia, she was made to work as a domestic helper.
Because of unfair working conditions, she worked at
To further explain, (1) the way to review NLRC decision several residences until she saved enough money to return
is through the special civil action of certiorari under Rule home. When she arrived in the Philippines, she filed with
65; (2) the jurisdiction of such action belongs both to the POEA a complaint against Hisham for breach of contract.
SC and CA; but (3) in line with the doctrine of hierarchy, The POEA rendered a decision suspending Hisham and to
of courts, the petition should be initially presented to the pay petitioner her money claims. Hisham appealed to the
lower court of the two courts, that is the Court of NLRC and filed a MFR with the POEA. The NLRC affirmed
Appeals. the decision of the POEA. Hisham now argues that the
order cannot be enforced because the MFR was still
pending with the POEA. Respondent POEA administrator
Sunshine Transportation Inc. vs NLRC and R. Joson find the MFR of Hisham to be meritorious. Hence,
Santos (1996) petitioner elevated this case to the SC

Facts: Issue: Whether the petitioner may avail the special civil
P. respondent Santos was dismissed from work as a bus action for certiorari without first filing a motion for
driver by Petitioner for failing to submit a written reconsideration?
explanation why he failed to report for his scheduled trip.
Respondent filed a complaint with the Labor Arbiter for Held: YES
illegal dismissal. The Labor Arbiter ruled in favor of the It has been held that the requirement of a motion for
petitioner and dismissed the complaint. This was reconsideration may be dispensed with in the following
affirmed by the NLRC but granted Santps money claims. instances: (1) when the issue raised is one purely of law;
Unsatisfied with the decision, petitioner elevated the (2) where public interest is involved; (3) in cases of

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urgency; and (4) where special circumstances warrant that order "on the merits or in substance can no longer be
immediate or more direct action. entertained
On the other hand, among the accepted exceptions to
the rule on exhaustion of administrative remedies are: Issue: Whether the NLRC committed grave abuse of
(1) where the question in dispute is purely a legal one; discretion
and (2) where the controverted act is patently illegal or
was performed without jurisdiction or in excess of Held: YES
jurisdiction. The NLRC committed grave abuse of discretion in refusing
to take account of the fact, as shown in the record, that
The petition involves a pure question of law and the the appeal of Nolasco was late because it was not filed
challenged order is void for want of jurisdiction on the within the reglementary period
part of respondent Joson.
No acceptable reason has been advanced by Nolasco, and
none appears upon the record, to excuse his tardiness in
Metro Transit Organization vs. CA, et al. (2002) the taking of the appeal. Petitioner's opposition to the
appeal should have been sustained, and the NLRC should
Facts: never have taken cognizance of the appeal.
Respondent Ruperto Evangelista, a cash assistant in the
treasury division of the petitioner, was dismissed from
work for being alleged to be responsible for the loss of
tokens. He was terminated for lack of trust and
confidence. Evangelista filed a case for illegal dismissal.
The Labor Arbiter ruled in his favor and ordered his
reinstatement with payment of full backwages. This was PAL vs. NLRC (1989)
affirmed by the NLRC. Hence, petitioner directly filed
with the Court of Appeals a petition for certiorari under Facts:
Rule 65. The CA, on the other hand, affirmed the ruling Private respondent Dolina completed his training course
of both the labor arbiter and NLRC, holding that a motion with PAL as pilot. He was given temporary appointment for
for reconsideration is necessary before resorting to a 6 months as Limited First Officer. He applied for
petition for certioarari. regularization as First Officer and undergoes the required
psychological examination wherein his "Adaptability
Issue: Whether the petitioner may elevate the case Rating" was found to be "unacceptable" and the Pilot
before the CA without first filing a motion for Acceptance Qualifications Board finds him not qualified for
reconsideration with the NLRC? regular employment in the Company. Dolina was placed
under preventive suspension; hence he filed a complaint
Held: NO for illegal dismissal.
Generally, certiorari as a special civil action will not lie The Labor Arbiter found the dismissal of Dolina justified,
unless a motion for reconsideration is filed before the hence, PAL discontinued the payment of Dolina’s salary.
respondent tribunal to allow it an opportunity to correct Dolina objected on the ground that the discontinuance an
its imputed errors. However, the following have been “earlier agreement” that he would be kept in the payroll
recognized as exceptions to the rule: until the case was finally resolved by arbitration. On
(1) when the issue raised is one purely of law; (2) where appeal, the NLRC affirmed the decision of the Labor
public interest is involved; (3) in cases of urgency; and Arbiter but ordered the company to continue paying
(4) where special circumstances warrant immediate or Dolina’s salary since the arbitration case was not yet over.
more direct action. Issue: Whether the NLRC committed grave abuse of
On the other hand, among the accepted exceptions to discretion in holding that Dolina was entitled to his
the rule on exhaustion of administrative remedies are: salaries "until this case is finally resolved."
(1) where the question in dispute is purely a legal one; Held: YES
and (2) where the controverted act is patently illegal or The order of the NLRC to continue paying Dolina his salary
was performed without jurisdiction or in excess of was an abuse of discretion. The clause "pending final
jurisdiction. resolution of the case by arbitration" should be understood
to be limited only to the proceedings before the Labor
To dispense with a motion for reconsideration, there Arbiter, such that when the latter rendered his decision,
must a be concrete, compelling and valid reason for the the case was finally resolved by arbitration.
failure to comply with the requirement.

Pacific Mills, Inc. vs. NLRC (1990)

MAI Philippines, Inc. vs. NLRC, et al (1987)
Facts:
Facts: In the case of Pacific Mills, Inc. vs. NLRC (1988), the SC
The Regional Director declared that petitioner illegally dismissed the petition on the ground that petitioner failed
dismissed its Customer Engineering Manager Rodolfo to show that the NLRC committed grave abuse of
Nolasco. It ordered petitioner to reinstate Nolasco and to discretion. The entry of judgment having been effected,
pay him his full backwages. The petitioner complied to the NLRC, in the process of execution, made a
pay Nolasco but declined to reinstate him. Nolasco filed computation of the award to the private respondents.
a complaint with the Labor Arbiter to recover damages. Petitioner filed a “motion to stay execution/reconsideration
The Labor Arbiter dismissed the complaint for being a citing supervening events that affect the computation of
duplication of the earlier labor case involving the same the award” as follows:
parties. Nolasco received the notice of the Labor Arbiter’s (1) The computation on separation pay did not consider
decision 12 days after. He filed an appeal before the the length of service of each complainant as borne out
NLRC. Petitioner opposed the appeal and contended that from the records; (2) The computation did not consider
it should be dismissed because it was filed out of time. the wage exemptions granted the petitioner-respondent
NLRC ruled that since the order of the Regional Director company; (3) The computation included payment of
requiring reinstatement of Nolasco with full back wages awards to a respondent who had already been recalled to
had already become final and executory, attacks against active duty, one who was already paid in a case separately
filed, and another who was already paid; (4) All the capital

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assets of the petitioner have already been attached

and/or otherwise foreclosed. Nova vs. Judge Sancho Dames II (2001)

The NLRC denied the motion and ordered immediate Facts:

implementation of the partial writ of execution Complainant Greogorio S. Nova filed with the NLRC
complaint for illegal dismissal against R.A. Broadcasting
Issue: Whether the execution of a final judgment of the Corporation represented by its Vice President for
NLRC may be stayed in view of supervening events. Operations Vilma J. Barcelona and Station Manager Deo
Trinidad. The Labor Arbiter rendered judgment in favor of
Held: YES Nova and ordered R.A. Broadcasting to pay his separation
Generally, one a judgment becomes final and executory, pay and full backwages. NLRC affirmed such decision and
it canno longer be disturbed, altered or modified. The denied the MFR filed by R.A. Construction on the ground
principle, however, admits of exceptions as in cases that it was filed out of time. The NLRC issued an alias writ
where, because of supervening events, it becomes of execution and the property of Sps. Barcelona was
imperative, in the higher interest of justice, to direct its scheduled in an auction sale. The said spouses filed with
modification in order to harmonize the disposition with the RTC Camarines Norte action for damages with prayer
the prevailing circumstances or whenever it is necessary of TRO to restrain the NLRC from conducting the
to accomplish the aims of justice. scheduled public auction. The RTC granted the TRO. Nova
argued that under the Labor Code, issuance of the TRO or
There can be no question that the supervening events preliminary injunction in a case arising from labor dispute
cited by petitioner would certainly affect the computation is prohibited.
of the award in the decision of the NLRC. It is the duty of
the NLRC to consider the same and inquire into the Issue: Whether the RTC cannot issue injunction against
correctness of the execution, as such supervening events NLRC?
may affect such execution.
Held: YES
Regular courts have no jurisdiction to hear and decide
questions which arise and are incidental to the
Yupangco Cotton Mills, Inc. vs. CA (2002) enforcement of decisions, orders or awards rendered in
labor cases by appropriate officers and tribunals of the
DOLE. Corollarily, any controversy in the execution of the
Facts: judgment shall be referred to the tribunal which issued the
Petitioner contended that a sheriff of the NLRC writ of execution since it has the inherent power to control
“erroneously and unlawfully levied” certain properties its own processes in order to enforce its judgments and
which it claims as its own. It filed a 3rd party claim with orders.
the Labor Arbiter and recovery of property and damages True, an action for damages lies within the jurisdiction of a
with the RTC. The RTC dismissed the case. In the CA, the regional trial court. However, the RTC has no jurisdiction to
court dismissed the petition on the ground of forum issue a TRO in labor cases. The SC finds respondent Judge
shopping and that the proper remedy was appeal in due guilty of gross ignorance of the law.
course, not certiorari or mandamus. Petitioner filed a
MFR and argued that the filing of a complaint for accion
reinvindicatoria with the RTC was proper because it is a
remedy specifically granted to an owner (whose
properties were subjected to a writ of execution to
enforce a decision rendered in a labor dispute in which it
was not a party). The MFR was denied. Hence, petitioner
filed this appeal.

Issue: Whether the CA has jurisdiction over the case

Held: YES
A third party whose property has been levied upon by a
sheriff to enforce a decision against a judgment debtor is
afforded with several alternative remedies to protect its
interests. The third party may avail himself of alternative
remedies cumulatively, and one will not preclude the
third party from availing himself of the other alternative
remedies in the event he failed in the remedy first
availed of.

Thus, a third party may avail himself of the following

alternative remedies:
a) File a third party claim with the sheriff of the
Labor Arbiter, and
b) If the third party claim is denied, the third party
may appeal the denial to the NLRC.
Even if a third party claim was denied, a third party
may still file a proper action with a competent court
to recover ownership of the property illegally seized
by the sheriff.
The filing of a third party claim with the Labor Arbiter
and the NLRC did not preclude the petitioner from filing a
subsequent action for recovery of property and damages
with the Regional Trial Court. And, the institution of such
complaint will not make petitioner guilty of forum
shopping.

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legitimate labor organization, including the right to file a

petition for certification election for the purpose of
collective bargaining.

In the given case, as respondent union's membership list

contains the names of at least 27 supervisory employees
in Level Five positions, the union could not, prior to
purging itself of its supervisory employee members, attain
the status of a legitimate labor organization. Not being
one, it cannot possess the requisite personality to file a
petition for certification election. The union's composition
being in violation of the Labor Code's Prohibition of unions
composed of supervisory and rank-and-file employees, it
could not possess the requisite personality to file for
recognition as a legitimate labor organization.

ATLAS LITHOGRAPHIC SERVICE vs. LAGUESMA

(1992)

FACTS:
A petition for certification election was filed by private
respondents “Kampil-Katipunan” on behalf of the
“supervisors union”, a union where the supervisory,
administrative personnel, production, accounting and
confidential employees of the petitioner were affiliated.
Petitioner opposed the petition on the ground that Kampil
Katipunan cannot represent the supervisory employees for
the purpose of collective bargaining because said Kampil
Katipunan also represents the rank-and-file employees
union. The Med-Arbiter rendered a decision in favor of the
private respondent. On appeal, the Secretary of Labor
affirmed the decision of the Med-Arbiter. Petitioner now
argue that to allow the supervisory employees to affiliate
with the Kampil Katipunan is tantamount to allowing the
circumvention of the “principle of the separation of unions”
under Art. 245 of the Labor Code.

Issue: Whether a local union of supervisory employees

may be allowed to affiliate with a national federation of
labor organizations of rank-and-file employees for purpose
of CBA?

TOYOTA MOTOR PHIL. CORP vs. TOYOTA MOTOR Held: NO. Petition Granted
PHIL. CORP LABOR UNION (1997) We agree with the petitioner's contention that a conflict of
interest may arise in the areas of discipline, collective
FACTS: bargaining and strikes. Members of the supervisory union
Toyota Motor Phil Corp. Labor Union filed a petition for might refuse to carry out disciplinary measures against
certification election with Dept. of Labor, for all rank-and- their co-member rank-and-file employees.
file employees of the petitioner Toyota Motor Corp.
Petitioner seek the denial of the holding of the Under Article 245 of the Labor Code as amended by
certification election on 2 grounds: (1) the union, being Rep. Act No. 6715 provides:
“process of registration” had no legal personality to file Art. 245. Ineligibility of managerial employees to join
the same as it was not a legitimate labor organization at any labor organization: right of supervisory employees.
the time the petition was file; and (2) that the union was — Managerial employees are not eligible to join, assist
composed of both rank-and-file and supervisory or form any labor organization. Supervisory employees
employees in violation of the law. The Med-Arbiter shall not be eligible for membership in a labor
dismissed the petition for certification election in favor organization of the rank-and-file employees but may
with the grounds stated by petitioner. However, on join, assist or form separate labor organizations of their
appeal, the Secretary of Labor set aside the decision of own.
the Me-Arbiter and ordered the holding of the The Court construes Article 245 to mean that supervisors
certification election contending that the union was shall not be given an occasion to bargain together with the
already a legitimate labor organization at the time of the rank-and-file against the interests of the employer
filing of the petition evidenced by a certificate of regarding terms and conditions of work. Thus, if the intent
registration. of the law is to avoid a situation where supervisors would
merge with the rank and-file or where the supervisors'
Issue: Whether the Secretary of Labor committed grave labor organization would represent conflicting interests,
abuse of discretion in directing the certification election then a local supervisors' union should not be allowed to
affiliate with the national federation of union of rank-and-
Held: YES. Petition Granted. file employees where that federation actively participates
A labor organization composed of both rank-and-file and in union activity in the company.
supervisory employees is no labor organization at all. It
cannot, for any guise or purpose, be a legitimate labor SOUTHERN PHILIPPINES FEDERATION OF LABOR vs.
organization. Not being one, an organization which HON. FERRER-CALLEJA (1989)
carries a mixture of rank-and-file and supervisory
employees cannot possess any of the rights of a

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FACTS:
Petitioner SPF filed with the DOLE a petition for
certification election among the rank-and-file employees PHILIPPINE PHOSPHATE FERTILIZER CORP. vs.
of private respondent Apex Minong Co. The Med-Arbiter HON. TORRES (1974)
granted the petition and directed the holding of the
certification election. During the pre-election conference,
petitioner union objected to the inclusion in the list of FACTS:
workers prepared by Apex the following: (1) employees
occupying the positions of Supervisor I, II and III; (2) Issue:
employees under confidential/special payrolls; and (3)
employees who were not paying dues. According to Held:
petitioner, the mentioned employees were disqualified
from participating in the certification election since the
Supervisors were managerial employees while the last NATIONAL ASSOCIATION OF TRADE UNIONS vs.
two were disqualified by virtue of their non-membership HON. TORRES (1994)
in the Union and their exclusion from the benefits of the
collective bargaining agreement. After the certification of
election was conducted, respondent Union filed an FACTS:
“urgent motion to open the challenged ballots.” The Med- Petitioner NATU filed a petition for certification election to
Arbiter granted the motion and directed the challenged determine the “exclusive bargaining representative” of
ballots be opened and inventoried. Petitioner appealed to respondent’s bank employees occupying supervisory
the BLR wherein respondent Director Ferrer-Calleja positions. The Bank moved to dismiss on the ground that
dismissed said appeal and affirmed the decision of the said supervisory employees were actually
Med-Arbiter and ordered that the 197 ballots should be managerial/confidential employees, thus, they are
opened and canvassed. As a consequence of the opening ineligible to join, assist or form a union. The Med-Arbiter
and canvass of the challenged ballots, the Med-Arbiter granted the petition and directed the holding of the
certification election. The Bank appealed to the Secretary
Issue: Whether respondent Director committed grave of Labor. Said court partially granted the appeal ruling that
abuse of discretion in not excluding the 197 employees the Department Managers, Assistant Managers, Branch
from voting in the certification election Managers, Cashiers and Controllers are declared
managerial employees and cannot join the union of the
Held: NO supervisors.
The functions of the questioned positions are not
managerial in nature because they only execute Issue: Whether
approved and established policies leaving little or no
discretion at all whether to implement the said policies or Held:
not. The respondent Director, therefore, did not commit Petitioner concludes that subject employees are not
grave abuse of discretion in dismissing the petitioner's managerial employees but supervisors. Even assuming
appeal from the Med-Arbiter's Order to open and count that they are confidential employees, there is no legal
the challenged ballots in denying the petitioner's motion prohibition against confidential employees who are not
for reconsideration and in certifying the respondent performing managerial functions to form and join a union.
Union as the sole and exclusive bargaining A confidential employee is one entrusted with confidence
representative of the rank-and-file employees of on delicate matters, or with the custody, handling, or care
respondent Apex . and protection of the employer's property. While Art. 245
As regards the employees in the confidential payroll, the of the Labor Code singles out managerial employees as
petitioner has not shown that the nature of their jobs is ineligible to join, assist or form any labor organization,
classified as managerial except for its allegation that under the doctrine of necessary implication, confidential
they are considered by management as occupying employees are similarly disqualified.
managerial positions and highly confidential. Neither can
payment or non-payment of union dues be the
determining factor of whether the challenged employees MERALCO vs. HON. QUISUMBING (1999)
should be excluded from the bargaining unit since the
union shop provision in the CBA applies only to newly FACTS:
hired employees but not to members of the bargaining A petition for certification election was filed by the labor
unit who were not members of the union at the time of organization of staff and technical employees of MERALCO
the signing of the CBA. It is, therefore, not impossible seeking to represent regular employees of MERALCO.
for employees to be members of the bargaining unit MERALCO contended that those in the Patrol Division and
even though they are non-union members or not paying Treasury Security Service Section, since these employees
union dues. are tasked with providing security to the company, they
are not eligible to join the rank and file bargaining unit.
GOLDEN FARMS INC. vs. HON. FERRER-CALLEJA The Med-Arbiter ruled that having been excluded from the
(1989) existing Collective Bargaining Agreement for rank and file
employees, these employees have the right to form a
FACTS: union of their own, except those employees performing
The National Federation of Labor (NFL) filed a petition for managerial functions. The Secretary of Labor affirmed said
certification election in behalf of certain employees and order.
foreman of petitioner before the DOLE. Petitioner
opposed said petition arguing that Issue: Whether security guards may join rank-and-file or
supervisors union
The NFL appealed but it was dismissed. Hence, it re-filed
the petition for certification which was also dismissed. Held:
Under the old rules, security guards were barred from
joining a labor organization of the rank and file, under RA
Issue: 6715, they may now freely join a labor organization of the
rank and file or that of the supervisory union, depending
Held: on their rank. By accommodating supervisory employees,

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the Secretary of Labor must likewise apply the provisions the management wrote to the Union that it was willing
of RA 6715 to security guards by favorably allowing them to consider including the union members in the profit-
free access to a labor organization, whether rank and file sharing scheme provided that the negotiations would
or supervisory, in recognition of their constitutional right be concluded prior to December 1987
to self-organization.  Sometime later, the company distributed the
profit-sharing benefit not only to the managers and
supervisors but also to all rank-and-file employees not
covered by the CBA because they were excluded from
the definition of bargaining unit.
MARIANO vs. ROYAL INTEROCEAN LINES (1961)  This caused the respondent Union to file a notice
of strike alleging that petitioner was guilty of unfair
FACTS labor practice because the union were discriminated
against in the grant of the profit sharing benefits
 Petitioner Ermidia A. Mariano was a
Issue: Whether the grant by management of profit
stenographer-typist and filing clerk of respondent sharing benefits to its non-union member employees is
when she was dismissed from work. She sent a letter
discriminatory against its workers who are union members
to the managing directors of the company in HK and amounts to ULP?
through its manager in the Philippines, respondent
J.V. Kamerling. In the letter, she complained about
Kamerling’s “inconsiderate and untactful attitude” Held: NO. Petition Granted
towards the employees under him and the clients of There can be no discrimination committed by petitioner as
the company. Kamerling adviced petitioner that her the situation of the union employees are different and
letter had been forwarded to the managing directors distinct from the non-union employees. Discrimination
in HK and that said directors believed that it was per se is not unlawful. There can be no discrimination
impossible to maintain her in the company. where the employees concerned are not similarly situated.
 Petitioner sought reconsideration of her dismissal
from the managing directors in HK but received no The grant by petitioner of profit sharing benefits to the
answer to any of her 5 letters. employees outside the "bargaining unit" falls under the
ambit of its managerial prerogative. It appears to have
 The Company finally offered a “compromise been done in good faith and without ulterior motive. More
settlement” with the petitioner whereby she would so when as in this case there is a clause in the CBA where
be paid a sum equivalent to 6 months salary, the employees are classified into those who are members
provided that she would sign a quitclaim embodying of the union and those who are not. In the case of the
a provision that she would release the company from union members, they derive their benefits from the terms
any liability arising from her employment. Not and conditions of the CBA contract which constitute the
satisfied with the compromise, the petitioner filed a law between the contracting parties. Both the employer
complaint for unfair labor practice against the and the union members are bound by such agreement.
company. The CIR rendered judgment holding the
company guilty of unfair labor practice and ordered
them to reinstate petitioner to her former position.
PHIL. GRAPHIC ARTS INC. vs. NLRC (1988)
 The company filed with the SC a petition to
review the decision of the CIR. The SC ruled in favor
FACTS:
of the company. Hence, this appeal.

Issue: Whether the petitioner was guilty of unfair labor  In October 1984, petitioner corporation was forced
practice in dismissing the respondent by economic circumstances to require its workers to
go on mandatory vacation leave in batches of seven or
Held: NO. Petition Denied. nine for periods ranging from 15, 30, to 45 days. The
As the respondent's dismissal has no relation to union workers were paid while on leave but the pay was
activities and the charges filed by her against the charged against their respective earned leaves.
petitioner had nothing to do with or did not arise from  As a result, the private respondents filed
her union activities, the dismissal did not constitute complaints for unfair labor practice and discrimination.
Unfair Labor Practice. Despite the employees right to self
organization, the employer still retains his inherent right Issue: Whether the forced vacation leave without pay
to discipline his employees, “his normal prerogrative to constitutes unfair labor practice
hire or dismiss them.” In this case, the court ruled that
the dismissal of the employee was unjustified, but the Held: NO. Petition Granted
employer did not commit Unfair Labor Practice because There was no unfair labor practice in this case. Private
the act has no union connection. respondents never questioned the existence of an
economic crisis but, in fact, admitted its existence. There
is basis for the petitioner's contentions that the reduction
WISE AND CO. INC. vs. WISE AND CO. INC. of work schedule was temporary, that it was taken only
EMPLOYEES UNION (1989) after notice and consultations with the workers and
supervisors, that a consensus was reached on how to deal
FACTS: with deteriorating economic conditions and reduced sales
and that the temporary reduction of working days was a
 The management issued a Memorandum Circular more humane solution instead of a retrenchment and
introducing a profit-sharing scheme for its managers reduction of personnel. The petitioner further points out
and supervisors. that this is in consonance with the CBA between the
 Respondent Union wrote to petitioner to ask that employer and its employees.
the union members be allowed to participate in the
profit-sharing program. The management denied the Likewise, the forced leave was enforced neither in a
request on the ground that such participation was malicious, harsh, oppressive, vindictive nor wanton
not provided in the CBA manner, or out of malice or spite. Hence, ULP is not
 When renegotiation of the CBA was approaching, committed.

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services of a number of employees pursuant to its

retrenchment program. Respondent union filed a
complaint of illegal lockout against the petitioner.
 Respondent Union filed a complaint for ULP.

Issue: Whether the “mass-lay off” of petitioner due to

alleged income loss constitutes ULP

Held: YES. Petition Denied

The petitioner’s “capital reduction efforts,” to camouflage
the fact that it has been making profits, and to justify the
“mass lay-off of its employees,” especially union members,
DABUET vs. ROCHE PHARMACEUTICALS (1987) were an ULP which can neither be countenanced nor
condoned.
FACTS: Petitioner, confronted with the demand of the union for
wage increases, decided to evade its responsibility towards
 The petitioners, all officers of the Roche Products the employees by a devised capital reduction. While the
reduction in capital stock created a need for retrenchment,
Labor Union, wrote the respondent company
it was just a mask for the purge of union members, who,
expressing their grievances and seeking formal
by then, had agitated for wage increases. In the face of
conference with management regarding the previous
the petitioner company's piling profits, the unionists had
dismissal of the union’s president and vice-president.
the right to demand for such salary adjustments.
 At the meeting, instead of discussing the
problems affecting the labor union and management,
Retrenchment can only be availed of if the company is
the company’s general manager allegedly berated
losing or meeting financial reverses in its operation. Thus
the petitioners for writing the said letter and called
the mass lay-off or dismissal of the employees under the
the letter and the person who prepared it “stupid.”
guise of retrenchment policy is a lame excuse and a
 Feeling that he was the one alluded to, since he veritable smoke-screen of its scheme to bust the Union
had prepared the letter, the counsel for the labor and thus unduly disturb the employment tenure of the
union filed a case for “Grave Slander” against the employees concerned, which act is certainly an ULP.
general manager. The charge was based on the
affidavit executed by the petitioners.
 In turn, the company and the manager filed a COMPLEX ELECTRONICS UNION. vs. NLRC (1999)
complaint for “Perjury” against petitioners alleging
that their affidavit contained false statements
FACTS:
 The company construed the execution by
petitioners of the affidavit as an “act of breach of  Complex Electronics Corporation was a
trust and confidence.” Hence, they were suspended subcontractor of electronic products. Its customers
and later on dismissed. were foreign-based companies with different product
lines. One of its customers is the Lite-On Philippines
Issue: Whether respondent company, in terminating the Electronics Co.
employment of the petitioners without just and lawful  Complex received a message from Lite-On
cause, committed an unfair labor practice. Philippines requiring it to lower its price by 10%.
Complex informed Lite-On that such request was not
Held: YES. Petition Granted feasible as they were already incurring losses at the
Respondent company had committed unfair labor present prices of their products. Complex informed the
practice in dismissing the petitioners without just and employees that it was left with no alternative but to
valid cause. Their dismissal, under the circumstances, close down the operations of the Lite-On Line. The
amounted to interference with, and restraint or coercion company promised that it would follow the law by
of, the petitioners in the exercise of their right to engage giving 1 month notice and retrenchment pay.
in concerted activities for their mutual aid and protection  Sometime later, the machinery, equipment and
materials being used for production at Complex were
Breach of trust and confidence, the grounds alleged for pulled-out from the company premises and transferred
petitioners' dismissal, "must not be indiscriminately used to the premises of Ionics Circuit, Inc. in Laguna. The
as a shield to dismiss an employee arbitrarily. following day, Complex totally closed its operation.
 The Complex Employees Union filed a complaint
for ULP, illegal closure/illegal lockout and money
MADRIGAL & CO. vs. HON. ZAMORA (1987) claims. It claims that business has not ceased at
Complex but was merely transferred to Ionics, a
FACTS: runaway shop, which is an act constituting ULP. To
prove that Ionics was just a runaway shop, petitioner
 In December 1973, respondent Madrigal Central asserts that Complex owns the majority of the shares
comprising the increased capital stock of Ionics. The
Office Employees Union sought for the renewal of its
Union alleged that the reason for the closure of the
CBA with the petitioner company. It proposed a wage
establishment was due to the union activities of the
increase of P200.00 a month, an allowance of
employees.
P100.00 a month, and other economic benefits.
 By an alleged resolution of its stockholders, the Issue: Whether Complex Electronics Corp. committed ULP
petitioner reduced its capital stock from 765,000
shares to 267,366 shares. Petitioner alleged that HELD: NO
because of the desire of the stockholders to phase Resorting to a runaway shop is ULP. A “runaway shop” is
out the operations of the Madrigal & Co. due to lack defined as an industrial plant moved by its owners from
of business incentives and prospect, it had to reduce one location to another to escape union labor regulations
its capital stock and effected a retrenchment policy or state laws, but the term is also used to describe a plant
(downsizing) of its employees and operations removed to a new location in order to discriminate against
 Petitioner applied for clearance to terminate the

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employees at the old plant because of their union Held: YES.

activities. It is one wherein the employer moves its The retrenchment undertaken by the Company is valid.
business to another location or it temporarily closes its However, the manner in which this is exercised should not
business for anti-union purposes. be tainted with abuse of discretion. Labor is a person's
means of livelihood. He cannot be deprived of his labor or
In this case, Ionics was not set up for the purpose of work without due process of law. The retrenchment of
transferring the business of Complex. At the time the employees who belong to a particular union, with no
labor dispute arose, Ionics was already existing as an satisfactory justification why said employees were singled
independent company. It cannot, therefore, be said that out, constitutes ULP.
the temporary closure in Complex and its subsequent
transfer of business to Ionics was for anti-union In this case, the Company had indeed been discriminatory
purposes. in selecting the employees who were to be retrenched. All
We, likewise, disagree with the Union that there was in of the retrenched employees are officers and members of
this case an illegal lockout/illegal dismissal. Lockout is the NAFLU. It leads Us to conclude that the firm had been
the temporary refusal of employer to furnish work as a discriminating against membership in the NAFLU, an act
result of an industrial or labor dispute. It may be which amounts to interference in the employees' exercise
manifested by the employer's act of excluding employees of their right of self-organization. This interference is
who are union members. considered an act of ULP

PROGRESSIVE DEVP’T CO. vs. CIR (1977)

TANDUAY DISTILLERY LABOR UNION vs. NLRC
FACTS: (1987)

 The Araneta Coliseum Employees Association FACTS:

(ACEA) in behalf of 48 members, filed for ULP
against petitioner Progressive Devpt Corp., its  Tanduay Distillery, Inc. (TDI) and Tanduay
officers, and the Progressive Employees Union (PEU). Distillery Labor Union (TDLU) entered into a CBA which
 The complainants alleged that they were contained a “union security clause,” which provided:
dismissed because they refused to resign from the “All workers who are or may during the effectivity of
ACEA and to affiliate with the PEU. this Contract, become members of the Union in
 There is evidence that the Progressive accordance with its Constitution and By-Laws shall, as
Employees Union became inactive after the death of a condition of their continued employment, maintain
Atty. Reonista the former counsel of the Progressive membership in good standing in the Union for the
Development Corporation. This shows that the duration of the agreement.”
Progressive Employees Union was organized to  While the CBA was still in effect, a number of the
camouflage the petitioner corporation's dislike for the TDLU, joined another union, the Kaisahan Ng
Araneta Coliseum Employees Association and to Manggagawang Pilipino (KAMPIL) and organized its
stave off the latter's recognition. Further, the PEU did local chapter in TDI.
not conclude and enter into a CBA with the  The TDLU required those who disaffiliated to
management. explain why they should not be punished for
“disloyalty.” TDLU created a committee to investigate
Issue: Whether the dismissal of the employees its erring members. The committee recommended that
constitutes ULP the disaffiliating members be expelled and that they
should be terminated from service in pursuant to the
Held: YES union security clause. Acting on said request, the
The dismissal of employees because of their refusal to company terminated the employment of the
resign from their union and to join the union favorable to disaffiliating union members.
the employer constitutes ULP. Under the circumstances
and equity of the case, and considering the length of Issue: Whether the dismissal of the disaffiliating
time and the union-busting activities of petitioner, the members pursuant to a security clause constitutes ULP
individual complainants are granted back wages for five
(5) years without qualification or deduction. Held: NO
The private respondents cannot escape the effects of the
security clause of their own applicable CBA. Union Security
Clauses in CBA, if freely and voluntarily entered into, are
BATAAN SHIPYARD vs. NLRC (1988) valid and binding. Thus, the dismissal of an employee by
the company pursuant to a labor union’s demand in
FACTS: accordance with a union security agreement does not
constitute ULP.
 The National Federation of Labor Unions (NAFLU)
is a labor organization in petitioner Bataan Shipyard The respondent employer did nothing but to put in force
& Engineering Co., Inc. The Company has thousand their agreement when it separated the herein
employees in its payroll and more than a hundred of complainants upon the recommendation of said union.
them belong to the said labor organization. Such a stipulation is not only necessary to maintain loyalty
 Sometime before 1984, the Company filed with and preserve the integrity of the union but is allowed by
the NLRC an “application for the retrenchment” of the Magna Charta of Labor when it provided that while it is
285 of its employees on the ground that the firm had recognized that an employee shall have the right to self-
been incurring heavy losses. In the meantime, some organization, it is at the same time postulated that such
employees who had been on sick leave earlier were right shall not injure the right of the labor organization to
considered retrenched. All of those so retrenched prescribe its own rules with respect to the acquisition or
happen to be officers and members of the NAFLU. retention of membership therein

Issue: Whether the Company is guilty of discriminatory In Villar v. Inciong, we held that "petitioners, although
acts in the selection of employees to be retrenched entitled to disaffiliation from their union and to form a new
organization of their own must however, suffer the

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consequences of their separation from the union under  Both the Labor Arbiter and the NLRC found the
the security clause of the CBA" CBA and theunion security clause valid and considered
the termination of petitioners justified.
 Petitioners argue that their dismissal is not valid
because they did not affiliate with the NAFLU. They
claim that there is a connivance between respondents
Company and Union in their illegal dismissal in order
to avoid the payment of separation pay by respondent
company.

Issue: Whether the act of asking help from another union

constitutes “disloyalty”

Held: NO
The mere act of seeking help from the NAFLU cannot
constitute disloyalty as contemplated in the Collective
Bargaining Agreement. At most it was an act of self-
preservation of workers who, driven to desperation found
shelter in the NAFLU who took the cudgels for them.

MABEZA vs. NLRC (1997)

FACTS:

 Petitioner Norma Mabeza contends that she and

her co-employees at the Hotel Supreme in Baguio
City were asked by the hotel's management to sign
an instrument wherein it states that they are in
compliance with minimum wage and other labor
standard provisions of law.
 Petitioner signed the affidavit but refused to go
to the City Prosecutor's Office to swear to the truth
of her statement. Her refusal displeased the
employer.
 Thereafter, she was ordered to turn over the
keys to her living quarters and to remove her
belongings from the hotel. Subsequently, she as
charged with of abandonment of job and stealing of
company property; finally she was dismissed for loss
of confidence.

Issue: Whether the dismissal constitutes ULP?

Held: YES
The act of compelling employees to sign an instrument
indicating that the employer observed labor standards
provisions of law when he might have not, together with
the act of terminating or coercing those who refuse to
cooperate with the employer's scheme constitutes unfair
labor practice. The first act clearly preempts the right of
the hotel's workers to seek better terms and conditions
of employment through concerted action. In not giving
positive testimony in favor of her employer, petitioner
had reserved not only her right to dispute the claim and
proffer evidence in support thereof but also to work for
better terms and conditions of employment.

RANCE vs. NLRC (1988)

FACTS:

 Polybag Manufacturing Corporation and Polybag

Workers Union entered into a CBA which provides a
union security clause which states that a union
member who loses his membership in the union shall
be dismissed from service by the company.
 Petitioners, who were members of the Polybag
Workers Union, were expelled by said union for
“disloyalty” for allegedly joining the National
Federation of Labor Union (NAFLU). Because of the
expulsion, petitioners were dismissed by the
Corporation upon the union’s demand.

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to bargain, accompanied with a copy of the proposed

Collective Bargaining Agreement, to the Company not only
once but twice which were left unanswered and unacted
upon; and (3) the Company made no counter proposal
whatsoever all of which conclusively indicate lack of a
sincere desire to negotiate.

From the overall conduct of the company, it is indubitably

shown that it disregarded its obligation to bargain in good
faith.

MERALCO vs. QUISUMBING, MEWA (1999)

FACTS:

 MEWA informed MERALCO of its intention to re-

negotiate the terms&conditions of their existing CBA
 MEWA submitted its proposal to MERALCO and the
collective bargaining negotiations proceeded. However,
despite the series of meetings between the negotiating
panels of MERALCO and MEWA, the parties failed to
arrive at "terms and conditions acceptable to both of
them."
KIOK LOY vs. NLRC (1986)
 As a result, MEWA filed a Notice of Strike, on the
grounds of bargaining deadlock and ULP
FACTS:
 Secretary of Labor: granted the economic as
 In a certification election held, the Pambansang well as the political demand of the MEWA, and ordered
Kilusang Paggawa, a legitimate late labor federation, to grant the wage increase and to incorporation into
won and was subsequently certified as the sole and the CBA of all existing employee benefits.
exclusive bargaining agent of the rank-and-file  MERALCO filed a MR alleging that the Secretary of
employees of Sweden Ice Cream Plant. Labor did not properly appreciate the effect of the
 The Union furnished the Company with two awarded wages and benefits on MERALCO's financial
copies of its proposed collective bargaining viability.
agreement. At the same time, it requested the  MEWA likewise filed a motion asking the Secretary
Company for its counter proposals but the requests of Labor to reconsider its Order on the wage increase
were ignored and remained unacted upon by the and other benefits.
Company.
 As a result, the Union filed a "Notice of Strike", Issue: Whether the Secretary's actions have been
with the BLR on the ground of unresolved economic reasonable in light of the parties positions and the
issues in collective bargaining. evidence they presented.
 In the labor arbiter: due to series of
postponements, and non-appearance at the hearing Held:
conducted it ruled that the Company has waived its The Court ruled that a collective bargaining dispute such
right to present further evidence and, therefore, as this one requires due consideration and proper
considered the case submitted for resolution. balancing of the interest of the parties to the dispute and
those who might be affected by the dispute.
 NLRC: ruled that respondent Sweden Ice Cream
is guilty of unjustified refusal to bargain, in violation As a rule, affordability and capacity to pay should be take
of Section (g) Article 248 (now Article 249) into account BUT cannot be the sole yardstick in
determining the wage award, especially in a PUBLIC
Issue: WON respondent is guilty of unjustified refusal to UTILITY like MERALCO. In considering a public utility, it
bargain? must always take into account the PUBLIC interest aspect.
The MERALCO’s income and the amount of money
Held: YES available for operating expenses including labor costs are
The Court affirmed the NLRC, and ruled that, petitioner subject to state regulations. We must also keep in mind
Company is GUILTY of unfair labor practice, because the that high operating costs will certainly and eventually be
jurisdictional preconditions of Collective Bargaining passed on the consuming public.
establish such as:

1. possession of the majority representation; SMC UNION vs. HON. CONFESOR (1996)
2. proof of majority representation;
3. a demand to bargain under Article 251, par. (a) FACTS:

Collective bargaining which is defined as negotiations  Petitioner San Miguel Corporation Employees
towards a collective agreement, is one of the democratic Union entered into a CBA with private respondent San
frameworks under the New Labor Code, designed to Miguel Corporation (SMC)
stabilize the relation between labor and management  It provides that the agreement SHALL REMAIN IN
and to create a climate of sound and stable industrial FORCE AND EFFECTIVE until 1992, and the terms of
peace. It is a mutual responsibility of the employer and the agreement shall be for 5 years. from 1989 to
the Union and is characterized as a legal obligation. 1992.
 For purposes of business expansion, the SMC
In the case at bar, (1) respondent Union was a duly would undergo with reconstructing, the magnolia and
certified bargaining agent; (2) it made a definite request the Feeds and livestock Division were spun-off and

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become two separate and distinct corporation. But  The union filed a complaint with the NLRC alleging
the CBA remain in forced and effective. that private respondent's act of promise clearly
 During the negotiation the petitioner union constitutes act of unfair labor practice through
insisted that the bargaining unit of SMC should still bargaining in bad faith."
include the employees of the spun-off corporations,
which is the MAGNOLIA and SMFI and that the Labor Arbiter: denied the complaint for lack of merit.
renegotiation terms of the CBA shall be effective NLRC: affirmed the LA
ONLY for the remaining period of 2 years.
 On the other hand the SMC contended that the Issue: WON the act of the private respondent constitute
members or employees WHO HAD MOVED TO unfair labor practice through bargaining in BAD FAITH.
MAGNOLIA AND SMFI, SHALL AUTHOMATICALLY
CEASED TO BE PART OF THE BARGAINING UNIT at Held: NO
the SMC, and that the CBA shall be effective for The Court ruled that under Article 252 it states that the
3years in accordance with ART.253-A duty to bargain "does not compel any party to agree to a
 Unable to agree with these issues of bargaining proposal or make any concession." Thus, petitioner union
unit and duration of the CBA, petitioner union may not validly claim that the proposal embodied in the
declared a deadlock and filed a notice of strike. Minutes of the negotiation forms part of the CBA that it
finally entered into with private respondent.
Held:
Spin-off of Magnolia and San Miguel Foods Companies And by making such promise, private respondent may not
from the San Miguel Corporation as separate corporate be considered in bad faith or at the very least, petitioner
entities. Existing CBA included all four divisions. During union had, under the law, the right and the opportunity to
the renewal or renegotiation for two years on the insist on the fulfillment of the private respondent's
economic provisions, spin-off corporations were already promise by demanding its incorporation in the CBA.
in existence. The Union insisted that the employees of "Because the proposal was never embodied in the CBA,
the spun-off corporations were still to be considered as the promise has remained just that, a promise, the
part of the appropriate bargaining unit. implementation of which cannot be validly demanded
under the law."
Considering the spin-off, the companies would
consequently have their respective and distinctive
concerns in terms of the nature of work, wages, hours of
work and other conditions of employment. The interests NEW PACIFIC TIMBER vs. NLRC (1988)
of the employees in different companies would perforce
differ. SMC is engaged in beer manufacturing; Magnolia FACTS:
with manufacturing and processing of dairy products; SM
Foods with production of feeds and processing of  The National Federation of Labor (NFL) was
chicken. The nature of the products and sales of certified as the sole and exclusive bargaining
business may require diff. Skills which must necessarily representative of all the regular rank-and-file
be commensurated by different compensation packages; employees of New Pacific Timber & Supply Co., Inc.
different volumes of work and working conditions. It  NFL started to negotiate for the employees in the
would then be best to have separate bargaining units for bargaining unit. However, the same was allegedly met
different companies where the employees can bargain with stiff resistance by petitioner Company, so that the
separately accdg. to their needs and working conditions. former was prompted to file a complaint for ULP on
the ground of refusal to bargain collectively.
 Labor Arbiter: issued an order declaring (a)
SAMAHANG MANGGAGAWA SA TOP FORM
herein petitioner Company guilty of ULP; and (b) the
MANUFACTURING UNITED WORKERS OF THE
CBA proposals submitted by the NFL as the CBA
PHILS. (SMTFM-UWP) vs. NLRC (1998)
between the regular rank-and-file employees in the
bargaining unit and petitioner Company.
FACTS:
 NLRC: dismissed the complaint for lack of merit.
 Petitioner Samahang Manggagawa sa Top Form  A "Petition for Relief" was filed in behalf of 186 of
was the certified collective bargaining representative the private respondents "Mariano J. Akilit and 350
of all regular rank and file employees of private others". In their petition, they claimed that they were
respondent Top Form Manufacturing Philippines, Inc. "wrongfully excluded from enjoying the benefits under
 At the subsequent collective bargaining the CBA since the agreement with NFL and petitioner
negotiations, the union insisted on the incorporation Company limited the CBA's implementation to only the
in the (CBA) of the union proposal on "automatic 142 rank-and-file employees enumerated."
across-the-board wage increase."  NLRC declared that the 186 excluded employees
 There was a Wage Order granting an increase of "form part and parcel of the then existing rank-and-file
P17.00 per day in the salary of workers. This was bargaining unit" and were, therefore, entitled to the
followed by another Wage Order providing for a benefits under the CBA.
P12.00 daily increase in salary.  Petitioners argues that the private respondents are
 The union requested the implementation of said not entitled to the benefits under the CBA because
wage orders. However, they demanded that the employees hired after the term of a CBA are not
increase be on an across-the-board basis. parties to the agreement, and therefore, may not
 Private respondent refused to accede to that claim benefits thereunder, even if they subsequently
demand. Instead, it implemented a scheme of become members of the bargaining unit.
increases purportedly to avoid wage distortion.  As for the term of the CBA, petitioner maintains
 The union, wrote private respondent a letter that Article 253 of the Labor Code refers to the
reiterated that it had agreed to "retain the old continuation in full force and effect of the previous
provision of CBA" on the strength of private CBA's terms and conditions. By necessity, it could not
respondent's "promise and assurance" of an across- possibly refers to terms and conditions which, as
the-board salary increase should the government expressly stipulated, ceased to have force and effect.
mandate salary increases.

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Issue: WON the private respondent are entitled to the may result in the deprivation of an employees means of
benefits under the CBA. livelihood which is a property right.

Held: And the CBA may not be interpreted as cession of

It is clear from the above provision of law that until a employees right to participate in the deliberation of
new Collective Bargaining Agreement has been executed matters which may affects their rights and the formulation
by and between the parties, they are duty-bound to keep of a code of discipline.
the status quo and to continue in full force and effect the
terms and conditions of the existing agreement. The law
does not provide for any exception nor qualification as to ALHAMBRA CIGAR CO vs. ALHAMBRA UNION
which of the economic provisions of the existing
agreement are to retain force and effect, therefore, it FACTS:
must be understood as encompassing all the terms and
conditions in the said agreement.  Respondent Alhambra Employees' Association ,a
legitimate labor organization, filed a petition in which
In the case at bar, no new agreement was entered into it is prayed that said union be certified as the sole and
by and between petitioner Company and NFL pending exclusive bargaining agent for all the employees in the
appeal of the decision in NLRC Case No. RAB-IX-0334- administrative, sales, engineering and dispensary
82; nor were any of the economic provisions and/or departments of the “Alhambra Cigar and Cigarette
terms and conditions pertaining to monetary benefits in Manufacturing Company.”
the existing agreement modified or altered. Therefore,  The petition is opposed by the Company and
the existing CBA in its entirety continues to have legal another legitimate labor organization, the Federacion
effect. Obrera de la Industria Tabaquera de Filipinas
(FOITAF).
Court has held that when a collective bargaining contract  They alleged that there is an existing CBA between
is entered into by the union representing the employees the company and the FOITAF which constitutes a bar
and the employer, even the non-member employees are to the instant certification proceeding.
entitled to the benefits of the contract. To accord its  Petitioner contends that all the employees paid in
benefits only to members of the union without any valid the administrative, sales, engineering, and dispensary
reason would constitute undue discrimination against departments constitute an appropriate unit which is an
nonmembers. 22 It is even conceded, that a laborer can employer unit
claim benefits from the CBA entered into between the
company and the union of which he is a member at the Issue: WON the lower court erred in holding that all the
time of the conclusion of the agreement, after he has employees in the administrative, sales, and dispensary
resigned from the said union. departments of petitioner company, with the exception of
PAL vs. NLRC (1993) the supervisors, security guards, and confidential
employees therein, constitute an appropriate separate
FACTS: collective bargaining unit.

 The Philippine Airlines, Inc. (PAL) completely Held:

revised its 1966 Code of Discipline. Subsequently, The Court ruled that, no reason to disturb said finding of
some of the employees were subjected to the lower court that, said employees in the
disciplinary measures for alleged violation of revised administrative, sales, and dispensary departments perform
code. work which have nothing to do with production and
 Philippine Airlines Employees Association (PALEA) maintenance, unlike those in the raw leaf (manlalasi),
filed a complaint before the (NLRC) for "ULP with cigar, cigarette, packing (precinteria), and engineering and
arbitrary implementation of PAL's Code of Discipline garage departments whose functions involve production
without notice and prior discussion with Union by and maintenance, they have a community of interest
Management." PALEA contended that PAL was guilty which justifies their formation or existence as a separate
of ULP because the copies of the Code had been appropriate collective bargaining unit.
circulated in limited numbers; that being penal in
nature the Code must conform with the requirements
of sufficient publication, and that the Code was PAGKAKAISA NG MGA MANGGAGAWA SA TRIUMPH
arbitrary, oppressive, and prejudicial to the rights of INTERNATIONAL-UNITED LUMBER AND GENERAL
the employees. WORKERS OF THE PHILS. vs. FERRER-CALLEJA
 PAL filed a “motion to dismiss” the complaint,
asserting its prerogative as an employer to prescribe FACTS:
rules and regulations regarding employees' conduct
in carrying out their duties and functions.  The petitioner is the recognized collective
 Labor Arbiter: dismissed the complaint and bargaining agent of the rank-and-file employees of
ruled that no ULP had been committed and no bad Triumph International with which the latter has a valid
faith in adopting the Code. and existing collective bargaining agreement effective
up to September 24, 1989.
 NLRC: found no evidence of ULP and affirmed  In 1987, a petition for certification election was
the dismissal of the complaint. filed by the respondent union with the Department of
Labor and Employment.
Issue: Whether or not the formulation of a Code of  a motion to dismiss the petition for certification
Discipline among employees is a shared responsibility of election was filed by Triumph International on the
the employer and the employees. grounds that the respondent union cannot lawfully
represent managerial employees and that the petition
Held: YES cannot prosper by virtue of the contract-bar rule.
The Court upheld the union’s right, and ruled that, the  But the Labor Arbiter issued an order granting the
management should see to it that its employees are at petition for certification election and directing the
least properly informed of its decisions or modes of holding of a certification election to determine the sole
action, because the implementation of the provisions and exclusive bargaining representative of all monthly-

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paid administrative, technical, confidential and petitioner was certified as the sole and exclusive
supervisory employees of Triumph International. bargaining representative of all the regular rank-and-file
employees of Barbizon Philippines, Inc. (formerly
Issue: Whether or not the public respondent gravely Philippine Lingerie Corporation).
abused its discretion in ordering the immediate holding
of a certification election among the workers sought to  BUKLOD was certified as the sole and exclusive
be represented by the respondent union. bargaining representative of all the rank-and-file
employees of Barbizon Phils (former PLC)
Held:  While the CBA was still in force, several
Where the supervisory employees sought to be employees organized themselves into the
represetned by the union are actually NOT INVOLVED “Nagkakaisang Supervisors Ng Barbizon Philippines,
in policy making, and their recommendatory powers are Inc. (NSBPI)” and the “Nagkakaisang Excluded
not even instantly effective since they are subject to Monthly Paid Employees Ng Barbizon, Philippines, Inc.
review by at least three (3) managers (dept. mgr., (NEMPEBPI)” allegedly because they were excluded
personnel mgr. And general manager), then it is evident from the coverage of the existing CBA between
that these employees doe not possess managerial petitioner Barbizon and BUKLOD.
status.  Petitioner Barbizon alleged that the “petitions for
certification election” filed by the Nagkakaisang
The fact that their work designations are either Supervisor ng Barbizon Philippines, Inc. — NAFLU
managerial or supervisory is of no moment, (NSBPI) must necessarily fail because the employees
considering that it is the nature of their functions designated as "supervisors" cannot legally form a
and NOT SAID NOMENCLATURES which determines supervisors' union. Being part of the rank and file,
their respective status. petitioner avers that said employees belong to the
"employer wide unit," which is the appropriate
bargaining unit of all its rank and file employees and
A careful examination of the records of this case reveals
which is represented by the BUKLOD.
no evidence that rules out the commonality or
 The Secretary of Labor granted the petition for
community of interest among the rank-and-file members
certification election filed by NSBPI
of the petitioners, and the herein declared rank-and-file
members of the respondent union. Instead of forming
ISSUE: Whether the Undersecretary of Labor committed
another bargaining unit, the law requires them to be
grave abuse of discretion in granting NSBPI's petition for
members of the existing one. The ends of unionism
certification election
are better served if all the rank-and-file members
with substantially the same interests and who
HELD: YES
invoke their right to self-organization are part of a
It has been the policy of the BLR to encourage the
single unit so they can deal with their ER with
formation of an employer unit unless circumstances
JUST ONE AND YET POTENT VOICE. The Ees
otherwise require. In other words, one employer
bargaining power with management is
enterprise constitutes only one bargaining unit. The more
strengthened thereby.
solid the employees are, the stronger is their bargaining
capacity.
In the case at bar, there is no dispute that the petitioner
is the exclusive bargaining representative of the rank- However, the "one union — one company" rule is not
and-file employees of Triumph International. without exception. The exclusion of the subject employees
from the rank-and-file bargaining unit and the CBA is
indefinitely a "compelling reason" for it completely
BARBIZON PHILS INC. vs. NAGKAKAISANG deprived them of the chance to bargain collectively with
SUPERVISOR NG BARBIZON PHILS (1996) petitioner and are thus left with no recourse but to group
themselves into a separate and distinct bargaining unit
FACTS: and form their own organization.

The usual exception, of course, is where the employer unit

 Petitioner Phil. Lingerie Corp. (now Barbizon has to give way to the other units like the craft unit, plant
Philippines Inc.) filed a “petition for certification unit, or a subdivision thereof; the recognition of these
election” among its rank-and-file employees. As a exceptions takes into accountant the policy to assure
consequence thereof, 2 unions sought recognition: employees of the fullest freedom in exercising their rights.
( 11 PHILIPPINE LINGERIE WORKERS UNION- Otherwise stated, the one company-one union policy must
ALAB and yield to the right of the employees to form unions or
( 11 BUKLOD NG MANGGAGAWA NG associations for purposes not contrary to law, to self-
PHILIPPINE LINGERIE CORPORATION organization and to enter into collective bargaining
 PLW Union moved for the exclusion of a number negotiations, among others, which the Constitution
of employees who were allegedly holding guarantees.
“supervisory positions.”

Med-Arbiter: denied the said motion.

INDOPHIL TEXTILE MILL WORKERS UNION vs.
BLR: affirmed the Med-Arbiter and ordered the election
VOLUNTARY ARBITRATOR CALICA (1992)
to be conducted.
FACTS:
 A certification election was conducted with the
votes of "supervisors and confidential" employees
 Petitioner Indophil Textile Mills Union and
being challenged.
respondent Indophil Textile Mills, Inc. executed a CBA
 PLW UNION filed an election protest. In the  Indophil Acrylic Manufacturing Corp. was formed
meantime, BUKLOD moved for the opening of the and registered with the SEC. It became operational
challenged ballots. and hired workers according to its criteria and
standards.
BLR: denied the protest and ruled that the alleged
supervisors are not managerial employees. The
 The petitioner union contends the plant facilities

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built and set up by Acrylic should be considered as certification or certification election” among the rank
an extension or expansion of the facilities of and file workers of Dacongcogon.
respondent Company. In other words, it is the  Respondent NSFW moved to dismiss the petition
petitioner's contention that Acrylic is part of the on the grounds that the petition was filed out of time
Indophil bargaining unit; that the creation of the and that there is a deadlocked of CBA negotiation
Indophil Acrylic is a device of respondent Indophil
Textile to evade the application of the CBA between Med-Arbiter: denied the Motion to Dismiss and direct the
the union and the company to Acrylic people. conduct of a certification election among rank-and-file
 On the other hand, respondent Indophil Textile employees
submits that it is a juridical entity separate and BLR: set aside the order of the Med-Arbiter and ruled in
distinct from Acrylic and cited the case of Diatagon favor of respondent
Labor Federations vs. Ople, which ruled that 2
corporations cannot be treated as single bargaining Issue: Whether the BLR committed grave abuse of
unit even if their business are related. discretion?

Voluntary Arbitrator: ruled in favor of the respondent Held: NO. Petition Denied.
and found that the provision in the CBA between The “Deadlock Bar” Rule simply provides that a petition for
Indophil Textile Inc. and Indophil Textile Union does not certification election can only be entertained if there is no
extend to the employees of Indophil Acrylic Corp pending bargaining deadlock submitted to conciliation or
arbitration or had become the subject of a valid notice of
Issue: Whether the voluntary arbitrator committed strike or lockout. The principal purpose is to ensure
grave abuse of discretion in failing to disregard the stability in the relationship of the workers and the
corporate entity of Indophil Acrylic management.

Held: NO It is a rule in this jurisdiction that only a certified CBA —

Acrylic Indophil Corporation cannot be considered an i.e., an agreement duly certified by the BLR may serve as
extension of Indophil Corporation, as to cover in one a bar to certification elections.
bargaining unit all employees thereof. Note separate
corporate entities: doctrine of piercing the veil of This rule simply provides that a petition for certification
corporate entity not applied. election or a motion for intervention can only be
entertained within sixty days prior to the expiry date of an
The fact that the businesses of private respondent and existing collective bargaining agreement. Otherwise put,
Acrylic are related, that some of the employees of the the rule prohibits the filing of a petition for certification
private respondent are the same persons manning and election during the existence of a CBA except within the
providing for auxilliary services to the units of Acrylic, freedom period, as it is called, when the said agreement is
and that the physical plants, offices and facilities are about to expire. The purpose, obviously, is to ensure
situated in the same compound, it is our considered stability in the relationships of the workers and the
opinion that these facts are not sufficient to justify the management by preventing frequent modifications of any
piercing of the corporate veil of Acrylic. CBA earlier entered into by them in good faith and for the
stipulated original period.
Hence, the Acrylic not being an extension or expansion
of private respondent, the rank-and-file employees
working at Acrylic should not be recognized as part of, ASSOCIATED LABOR UNIONS (ALU) vs.
and/or within the scope of the petitioner, as the HON. FERRER-CALLEJA (1989)
bargaining representative of private respondent.
FACTS:

 GAW Trading, Inc. recognized ALU as the sole and

exclusive bargaining agent for the majority of its
NATIONAL CONGRESS OF UNIONS IN THE SUGAR employees. A CBA was executed.
INDUSTRY OF THE PHILS (NACUSIP) vs.  In the meantime, Southern Philippines Federation
HON. FERRER-CALLEJA (1992) of Labor (SPFL) together with Nagkaisang Mamumuo
sa GAW (NAMGAW) undertook a Strike after it failed to
FACTS: get GAW Trading Inc. to sit for a conference respecting
its demands in an effort to pressure GAW Trading Inc.
 Dacongcogon Sugar and Rice Milling Co. entered to make a turnabout of its standing recognition of ALU
into a CBA with respondent National Federation of as the sole and exclusive bargaining representative of
Sugar Workers (NFSW) its employees
 GAW Trading Inc. filed a TRO
 When the CBA expired, it was extended for Labor Arbiter: held the strike as illegal
another 3 years with reservation to negotiate for its
amendment, particularly on wage increases, hours of  GAW Lumad Labor Union (GALLU-PSSLU)
work, and other terms and conditions of Federation ... filed a Certification Election petition
employment.
 However, a deadlock in negotiation ensued on Med-Arbiter: ruled for the holding of a certification
the matter of wage increases and optional election in all branches of GAW Trading Inc.
retirement. In order to obviate friction and tension, BLR: granted ALU’s appeal (MR) and reversed the Med-
the parties agreed on a suspension to provide a Arbiter on the ground that the CBA has been effective and
cooling-off period to give them time to evaluate and valid and the contract bar rule applicable
further study their positions. Hence, a Labor
Management Council was set up and convened, with  SPFL filed a MR to the BR
a representative of the Department of Labor and
Employment, acting as chairman, to resolve the BLR: reversed its previous decision and ordered the
issues. holding of a certification election among the rank-and-file
 Petitioner filed filed a “petition for direct workers of GAW Trading, Inc. and ruled that the “contract-

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bar rule” does not apply in this case because the CBA There is a deadlock when there is a complete blocking or
involved is defective as it was not duly submitted in stoppage resulting from the action of equal and opposed
accordance with the Implementing Rules. xxx “There is forces . . . . The word is synonymous with the word
no proof tending to show that the CBA has been posted impasse, which . . "presupposes reasonable effort at good
in at least 2 conspicuous places in the establishment at faith bargaining which, despite noble intentions, does not
least 5 days before its ratification and that it has been conclude in agreement between the parties."
ratified by the majority of the employees in the While it is true that, in the case at bench, one year had
bargaining unit. lapsed since the time of declaration of a final certification
result, and that there is no collective bargaining deadlock,
Issue: Whether the contract-bar rule is applicable in this public respondent did not commit grave abuse of
case? discretion when it ruled in respondent union's favor since
the delay in the forging of the CBA could not be attributed
HELD: NO to the fault of the latter.
Wind no reversible error in the challenged decision of
respondent director. A careful consideration of the facts If the law proscribes the conduct of a certification election
culled from the records of this case, yields the conclusion when there is a bargaining deadlock submitted to
that the collective bargaining agreement in question is conciliation or arbitration, with more reason should it not
indeed defective hence unproductive of the legal effects be conducted if, despite attempts to bring an employer to
attributed to it by the former director in his decision the negotiation table by the "no reasonable effort in good
which was subsequently and properly reversed. faith" on the employer certified bargaining agent, there
was to bargain collectively. It is only just and equitable
To be a bar to a certification election, the CBA must be that the circumstances in this case should be considered
adequate in that it comprise substantial terms and as similar in nature to a "bargaining deadlock" when no
conditions of employment certification election could be held.

CAPITOL MEDICAL CENTER OF CONCERNED KAISAHAN NG MANGGAGAWANG PILIPINO

EMPLOYEES-UNIFIED FILIPINO SERVICE (KAMPIL-KATIPUNAN) vs. HON. TRAJAN0 (1991)
WORKERS vs. HON. LAGUESMA (1997)
FACTS:
FACTS:
 National Federation of Labor Union (NAFLU) was
 Respondent CMC Employees Assoc.-Alliance of declared by the BLR the exclusive bargaining agent of
Filipino Workers filed a “petition for certification all rank-and-file employees of Viron Garments
election” among the rank-and-file employees of the  More than 4 years after, another union, KAMPIL-
Capitol Medical Center (CMC). After the election, Katipunan, filed with the BLR a “petition for
respondent union was held as the sole and exclusive certification election” with the support of more than
bargaining representative of the rank and file 30% of the workers VIRON.
employees at CMC.  Despite NAFLU’s opposition, the Med-Arbiter
 Respondent Union invited the CMC to the ordered the holding of a certification election, citing
bargaining table by submitting its economic proposal the fact that since the certification of NAFLU in 1981
for a CBA. However, CMC refused to negotiate and as the sole bargaining agent, no CBA has been
instead challenged the union’s legal personality concluded.
through a “petition for cancellation of the certificate  NAFLU appealed, contending that at the time the
of registration.” Respondent union was left with no petition for certification election was filed, it was in the
other recourse but to file a “notice of strike” against process of collective bargaining with VIRON; that in
CMC for ULP. This eventually led to a strike. fact a deadlock in negotiations prompted it to file a
 In the meantime, petitioner Capitol Medical notice of strike; that these circumstances barred a
Center Employees-Unified Filipino Service Workers petition for certification election, pursuant to the Rules
filed a “petition for certification election” among the Implementing the Labor Code.
rank-and-file employees of the CMC. It alleged in its
petition that a certification election can now be BLR: upheld NAFLU’s contentions and dismissed the
conducted as more that 12 months have lapsed since petition for certification election.
the last certification election was held and that no
CBA was executed before. Issue: Whether KAMPIL’s petition for certification election
 Respondent union opposed the petition and is barred by the alleged bargaining deadlock between
moved for its dismissal. It contended that it is the NAFLU and VIRON
certified bargaining agent of the rank-and-file HELD: NO
employees of the CMC Hospital. For a bargaining deadlock to bar a petition for certification
 Petitioner claims that since there is no evidence election, such deadlock must have been submitted to
on record that there exists a CBA deadlock, the law conciliation or arbitration, or must have been the subject
allowing the conduct of a certification election after of a valid strike or lockout notice before – not after – the
twelve months must be given effect in the interest of filing of the petition for certification election.
the right of the workers to freely choose their sole
and exclusive bargaining agent The records do not show that there was a bargaining
deadlock prior to the filing of the petition for certification
The Secretary of Labor: dismissed the petition for election. When NAFLU was proclaimed the exclusive
certification election and directed CMC to negotiate a bargaining representative of all VIRON employees up to
CBA with respondent union when KAMPIL filed its petition for certification election or a
period of more than four (4) years, no collective
Issue: Whether there is a bargaining deadlock between bargaining agreement was ever executed, and no deadlock
CMC and respondent union, before the filing of petitioner ever arose from negotiations between NAFLU and VIRON
of a petition for certification election resulting in conciliation proceedings or the filing of a valid
strike notice. In the case, the strikes and submission to
HELD: NONE

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compulsory arbitration took place after the filing of the  The ballots provided for 2 choices: (a) TUPAS; (b)
petition for certification election TUEU-OLALIA; and (c) NO UNION.
 The challenged votes were those cast by the 141
INK members. They were segregated and excluded
LA SUERTE CIGAR & CIGARETTE FACTORY vs. from the final count because the competing unions
DIRECTOR OF THE BLR (1983) agreed earlier that the INK members should not be
allowed to vote “because they are not members of any
FACTS: union and refused to participate in the previous
certification election.”
 The La Suerte Cigar and Cigarette Factory  The INK employees protested the exclusion of
Provincial and Metro Manila Sales Force Association their votes. They filed a petition to cancel the election
applied for and was granted chapter status by the alleging that it “was not fair” and the result thereof did
National Association of Trade Unions (NATU) “not reflect the true sentiments of the majority of the
 Sometime later, 31 local union members signed a employees.”
joint letter withdrawing their membership in NATU.  TUEU-OLALIA opposed the petition. It contended
 The local union and NATU filed a petition for that petitioners “do not have legal personality to
certification election. protest the results of the election because they are not
 The company opposed on the ground that it was members of either the contending unions, but of the
not supported by at least 30% (now 25%) of the INK which prohibits its followers to, on religious
proposed bargaining unit because (a) of the alleged grounds, from joining or forming any labor
48 members of the local union, 31 had withdrawn organization.
prior to the filing of the petition, and (b) 14 of the
alleged members of the union were not employees of Med-Arbiter: seeing no merit in the INK employees’
the company but were independent contractors. The petition, certified the TUEU-OLALIA as the sole and
BLR director denied the company’s objection exclusive bargaining agent of the rank-and-file employees.
BLR: denied the appeal of the petitioner
Issue: Whether the withdrawal of 31 unions from NATU
affected the petition for certification election insofar as Issue: Whether the INK members may vote in the
the 30% requirement is concerned certification election

HELD: YES HELD: YES

The SC reversed the BLR, it appearing that the 31 union Logically, the right NOT to join, affiliate with, or assist any
members has withdrawn their support to the petition union, and to disaffiliate or resign from a labor
BEFORE the filing of said petition. It would be otherwise organization, is subsumed in the right to join, affiliate
if the withdrawal was made AFTER the filing of the with, or assist any union, and to maintain membership
petition for it would then be presumed that the therein. The right to form or join a labor organization
withdrawal was not free and voluntary. The presumption necessarily includes the right to refuse or refrain from
would arise that the withdrawal was procured through exercising said right. It is self-evident that just as no one
duress, coercion or for valuable consideration. In other should be denied the exercise of a right granted by law, so
words, the distinction must be that withdrawals made also, no one should be compelled to exercise such a
before the filing of the petition are presumed voluntary conferred right. The fact that a person has opted to
unless there is convincing proof to the contrary, whereas acquire membership in a labor union does not preclude his
withdrawals made after the filing of the petition are subsequently opting to renounce such membership.
deemed involuntary.
In the Certification Election, all members of the unit,
The reason for such distinction is that if the withdrawal whether union members or not, have the right to vote.
or retraction is made before the filing of the petition, the Union membership is not prerequisite. If majority of the
names of employees supporting the petition are unit members do not want a union, as expressed in the
supposed to be held secret to the opposite party. certification election, such majority decision must be
Logically, any such withdrawal or retraction shows respected. Hence, the INK members may vote.
voluntariness in the absence of proof to the contrary.
Moreover, it becomes apparent that such employees had
not given consent to the filing of the petition, hence the
subscription requirement has not been met.

We hold and rule that the 14 members of respondent

local union are dealers or independent contractors. They
are not employees of petitioner company. With the
withdrawal by 31 members of their support to the
petition prior to or before the filing thereof, making a
total of 45, the remainder of 3 out of the 48 alleged to
have supported the petition can hardly be said to
represent the union.
REYES vs. TRAJANO (1992)
NATIONAL FEDERATION OF LABOR vs.
SECRETARY OF LABOR (1998)
FACTS:

 The BLR authorized the conduct of certification FACTS:

election among the employees of Tri-Union Industries
Corporation. The competing unions were the TUEU-  A certification election was conducted among the
OLALIA and TUPAS. rank-and-file employees of the Hijo Plantation, Inc.
 Of the 384 workers initially deemed to be (HPI).
qualified voters, only 240 actually took part in the  Petitioner NFL (National Federation of Labor) was
election. Among the 240 who cast their votes, 141 chosen as the bargaining agent of its rank-and-file
were members of the Iglesia ni Kristo (INK) employees

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 Protests filed by the company and three other vouchers.

unions against the results of the election on the  After more than 1 year of service, De Leon
ground that the certification election was marred by requested to be included in the payroll of regular
massive fraud and irregularities because number of workers. Company’s response was to dismiss him from
employees were not able to cast their votes because his employment. De Leon demanded reinstatement
they were not properly notified of the date but company refused repeatedly.
 De Leon filed a complaint for illegal dismissal,
Labor Secretary: denied the petition to annul the reinstatement & payment of backwages
election and instead certified petitioner NFL as the sole
and exclusive bargaining representative of the rank-and-  LA: found for De Leon & declared the dismissal as
file employees of private respondent HPI. illegal. He ruled that De Leon was not a mere casual
employee but a regular employee.
 However, on motion of HPI, the Secretary of  NLRC: reversed LA. MR denied. Hence, this
Labor, reversed his resolution. NFL’s MR was denied. appeal.
Hence, this petition
ISSUE: WON De Leon was mere casual employee
Issue: Whether the DOLE should not have given due Held: NO, reversal of the decision was erroneous
course to private respondent's petition for annulment of
the results of the certification election. Under Art. 281 of the LC, the primary standard of
determining a regular employment is the reasonable
HELD: connection bet. the particular activity performed by the
The SC ruled in favor of the NFL. The workers in this employee in relation to the usual business or trade of the
case were denied this opportunity. Not only were a employer. Also, if the employee has been performing the
substantial number of them disfranchised, there were, in job for at least 1 year, even if the performance is not
addition, allegations of fraud and other irregularities continuous or merely intermittent, the law deems the
which put in question the integrity of the election. repeated & continuing need for its performance as
Workers wrote letters and made complaints protesting sufficient evidence for the necessity if not indispensability
the conduct of the election. The Report of Med-Arbiter of that activity to the business.
Pura who investigated these allegations found the
allegations of fraud and irregularities to be true. In this case, the records reveal that De Leon’s tasks
assigned to him included not only the painting of building
The SC invalidated the certification election upon a as claimed by the respondent but also cleaning & oiling
showing of disfranchisement, lack of secrecy in the machines, even operating a drilling machine & other odd
voting and bribery. The workers' right to self- jobs.
organization as enshrined in both the Constitution and - A regular employee, Tanque, attested in his
Labor Code would be rendered nugatory if their right to affidavit that De Leon worked w/ him as
choose their collective bargaining representative were maintenance man when there was no painting job.
denied. Indeed, the policy of the Labor Code favors the
- In its comment, company confirmed the veracity
holding of a certification election as the most conclusive
of De Leon’s claim when it admitted that he was
way of choosing the labor organization to represent
occasionally instructed to do other odd things in
workers in a collective bargaining unit. In case of doubt,
connection w/ the maintenance while he was
the doubt should be resolved in favor of the holding of a
waiting for materials he would need in his job or
certification election.
when he had finished early the one assigned to
him
 The law demands that the nature & entirety of the
activities performed by the employee be considered.
 Furthermore, the petitioner performed his work of
painting & maintenance activities during his
employment which lasted for more than 1 year, until
early Jan., 1983 when he demanded to be regularized
but was dismissed.
 The fact that he was rehired weeks after shows that
it can not be denied that his activities as regular
painter & maintenance man still exist.

 What determines whether a certain

employment is regular or casual is not the will &
word of employer to which the desperate worker
often accedes nor the procedure of hiring or
manner of payment of salary. It is the nature of
the activities performed in relation to the
particular business or trade considering all
circumstances, & in some cases the length of time
of its performance & its continued existence.
There was an obvious devious dismissal of De Leon to
evade the obligations of petitioner to the worker.
DE LEON vs. NATIONAL LABOR UNION (1989)

FACTS: Petition granted.


 De Leon was employed by La Tondeña, Inc. at
the Maintenance Section of its Engineering
Department where his work consisted mainly of
painting & other odd jobs related to maintenance. He
was paid on a daily basis through petty cash

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FACTS:
 Petitioner Narcisa B. de Leon is the owner of a
parcel of land in Manila. She leased said land to the
Filipino Theatrical Enterprises, Inc., The lease contract
provided that the De Leon would become the owner of
the building, together with all the equipment and
accessories, at the expiration of the lease
 Before the expiration of the lease, the Filipino
theatrical notified its EEs of their termination. After the
expiration of the lease, the theater building was turned
over to De Leon who immediately demolished the
building, and on the same site she constructed the
new Dalisay Theater Building;
 The theatre was opened, with a new set of
personnel, retaining only the services of four old EEs;
Said theater was operated jointly by the motion
picture firms LVN Pictures, Inc., Premier Productions
and the Sampaguita Pictures, Inc., as lessees thereof.
 30 persons, all members of the NLU, picketed at
the said theater by walking to and from on the
sidewalk fronting the lobby of the theater and
displaying placards
 Defendants during the picketing tried to persuade
patrons or customers of the Dalisay Theater to refrain
from buying tickets or seeing the show. Plaintiffs
sought to recover damages and an injunctive relief in
the court.

Issue: Whether the picketing of the EEs are illegal

HELD: NO
The Court finds that the acts of the defendants were not
such as to disturb the public peace at the place. There was
no clear and present danger of destruction to life or
property or of other forms of breach of the peace.

There was no existence of a relationship of employers and

employees between plaintiffs and defendants, although
defendants' purpose in picketing plaintiffs was for the
defendants' reinstatement of their services in the new
Dalisay Theater under the new Management.

Picketing peacefully carried out is not illegal even in the

absence of employer-employee relationship, for peaceful
picketing is a part of the freedom of speech guaranteed by
the Constitution.

LIWAYWAY PUBLICATIONS, INC. vs. PERMANENT

CONCRETE WORKERS UNION (1981)

FACTS:
 Liwayway Publications, Inc. was the 2nd sub-lessee
of the premises of the respondent Permanent Concrete
Products, Inc, in Manila
 The EEs of Permanent Concrete declared a strike.
For unknown reason, they picketed, stopped and
prohibited Liwayway’s truck from entering the
compound to load newsprint from its bodega. The
union members also intimidated the and threatened to
harm the Liwayway’s EEs who were in the truck.
 Liwayway filed an action for damages and
injunction against the union in the CFI Manila
 CFI: issued preliminary injunction and award
damages to the ER.
 The union contends that the CFI has no jurisdiction
over the case because the case arose out of labor
dispute and that their picketing is an extension of
PICKETING AND freedom of speech guaranteed by the Constitution
OTHER CONCERTED ACTIVITIES
Issue: Whether Liwayway is a third-party or an innocent
bystander whose right has been invaded and, therefore
DE LEON vs. NATIONAL LABOR UNION (1957) entitled to protection by regular courts
HELD: YES

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We find and hold that there is no connection between the  Domingo and de la Rosa sued GREPALIFE for illegal
Liwayway Publications, Inc. and the striking Union dismissal, ULP and damages.
 Labor Arbiter: ruled in favor of the EEs and
Although picketing is not prohibited , a picketing labor ordered their reinstatement.
union has no right to prevent employees of another
 NLRC: reversed LA and ruled in favor of ER.
company from getting in and out of its rented premises,
otherwise it will be held liable for damages for its act
Issue: Whether the dismissal of the union officers is
against innocent bystanders.
discriminatory constituting ULP?

HELD: NO. NLRC affirmed.

PHIL BLOOMING MILLS EMPLOYEES ORG. vs. PHIL The right to strike, while constitutionally recognized, is not
BLOOMING MILLS INC. (1973) without legal constrictions.

FACTS: Under Art. 264 of the LC, ''any worker or union officer
 The workers of respondent Blooming Mills Inc. who knowingly participates in the commission of illegal
planned a demonstration in Malacanang to protest acts during a strike may be declared to have lost his
alleged abuses of the Pasig Police employment status."
 Upon learning of this plan, the Company
management called a meeting with the union officers The decision of respondent GREPALIFE to consider the
 The Company officers warned the union officers union officers as unfit for reinstatement is not essentially
that the planned demonstration would be in violation discriminatory and constitutive of an ULP. Discriminating
of the “no strike clause” of the CBA. involves either encouraging membership in any labor
 The union officers asserted that the organization or is made on account of the employee's
demonstration had nothing to do with the Company having given or being about to give testimony under the
with which the Union had no dispute Labor Code. These have not been proved in this case
 When the workers proceeded with the
demonstration despite the pleas of the Company, it To elucidate further, there can be no discrimination where
filed an ULP case against the Union and its officers the employees concerned are not similarly situated. A
for violation of the “no strike clause” of the CBA union officer has larger and heavier responsibilities than a
 CIR: declared the Union and its officers guilty if union member. Union officers are duty bound to respect
bargaining in bad faith for violating the CBA and the law and to exhort and guide their members to do the
ordered the dismissal of the union officers same; their position mandates them to lead by example.
By committing prohibited activities during the strike, de la
Issue: Whether the Union and its officers were rightfully Rosa as Vice President of petitioner UNION demonstrated
dismissed the respondent company? a high degree of imprudence and irresponsibility. Verily,
this justifies his dismissal from employment. Since the
HELD: NO. CIR reversed. objective of the Labor Code is to ensure a stable but
The demonstration held by the EEs before the Malacanag dynamic and just industrial peace, the dismissal of
was against alleged abuses of some Pasig Policemen and undesirable labor leaders should be upheld.
not against the ER. Said demonstration was purely and
completely an exercise of freedom of expression. They
are only in the exercise of their civil and political rights GOLD CITY PORT SERVICE vs. NLRC (1995)
for their mutual aid and protection from what they
believed are police excesses. FACTS:
 EEs of petitioner Gold City declared a strike
against the latter. ER filed a complaint for Illegal Strike
GREAT PACIFIC LIFE EMPLOYEES UNION vs. GREAT with prayer for a restraining order/preliminary
PACIFIC LIFE ASSURANCE CORP. (1999) injunction.
 LA: found the strike to be illegal. The workers who
FACTS: participated in the illegal strike did not, however, lose
 Petitioner Great Pacific Life Employees Union and their employment, since there was no evidence that
Respondent Great Pacific Life Assurance Corporation they participated in illegal acts. As regards the six
entered into a CBA. Before the expiration of the CBA, union officers, the Labor Arbiter ruled that they could
the parties submitted their respective proposals and not have possibly been "duped or tricked" into signing
counter-proposals on its projected renewal. the strike notice for they were active participants in
 The ensuing series of negotiations however the conciliation meetings and were thus fully aware of
resulted in a deadlock which later on resulted into a what was going on. Hence, said union officers should
Strike be accepted back to work after seeking
 The Company required all striking employees to reconsideration from herein petitioner.
explain in writing within 48 hours why no disciplinary  NLRC: affirmed with modification the Arbiter's
action, including possible dismissal, should be taken decision. It held that the concerted action by the
against them. Complying with the order, UNION workers was more of a "protest action" than a strike.
President Alan Domingo and some strikers explained Private respondents, including the six union officers,
that they did not violate any law as they were merely should also be allowed to work unconditionally to avoid
exercising their constitutional right to strike. discrimination.
Petitioner Rodel P. de la Rosa and the rest of the
strikers however ignored the management directive. Issue: Whether the union members and officers were
 GREPALIFE found the explanation of Domingo rightfully dismissed?
totally unsatisfactory and considered de la Rosa as
having waived his right to be heard. Thus, both HELD:
UNION officers were terminated. Notwithstanding Under Article 264 of the Labor Code, a worker merely
their dismissal from employment, Domingo and de la participating in an illegal strike may not be terminated
Rosa continued to lead the members of the striking from his employment. It is only when he commits
union in their concerted action against management. illegal acts during a strike that he may be declared to
have lost his employment status. Since there appears no

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proof that these union members committed illegal acts faith here, but rather, plain arrogance, pride, and cynicism
during the strike, they cannot be dismissed. Hence, they of certain workers.
are entitled to reinstatement.

However, considering that a decade has already lapsed

from the time the disputed strike occurred, we find that CROMWELL COMMERCIAL EMPLOYEES AND
to award separation pay in lieu of reinstatement would LABORERS UNION vs. CIR (1964)
be more practical and appropriate. No backwages will be
awarded to union members as a penalty for their FACTS:
participation in the illegal strike.  Cromwell Commercial Inc. and its Company Union
entered into a CBA, among those agreed is a salary
The fate of Union Officers is different. Their insistence increase to the permanent EEs and to restore all
on unconditional reinstatement or separation pay salesmen to the status of salary basis.
and backwages is unwarranted and unjustified. For  However, the company gave no salary increase to
knowingly participating in an illegal strike, the law its employees, except to 3 who were not union
mandates that a union officer may be terminated from members. The salaries of the salesmen were not really
employment. The union officers are, therefore, not restored.
entitled to any relief,  When 2 EEs were dismissed, the Union struck and
picketed the premises of the company. The company
WHO DECLARES LOSS OF EMPLOYMENT STATUS? – warned the strikers that they will be dismissed if they
The Employer. The law, using the word “may,” grants the will not return to work because the strike violates the
ER the option of declaring a union officer who “no strike clause” in the CBA
participated in an illegal strike as having lost his  The Union filed with the CIR a ULP case against
employment. the Company.
 CIR: ordered reinstatement to some of the EEs
giving them only half backwages, other strikers was
RELIANCE SURETY & INSURANCE INC. vs. NLRC
not awarded any backwages at all, and there were 3
strikers denied of reinstatement.
FACTS:
 Reliance Surety Insurance Co., Inc., thru its Issue: Whether the EEs that were denied reinstatement
manager, effected a change in the seating were discriminatorily dismissed, hence entitled to
arrangement of its personnel to avoid unnecessary backwages?
loss of productive working time due to personal and
non-work-related conversations, personal telephone HELD: NO. CIR AFFIRMED
calls and non-work-connected visits by personnel to
other departments 2 types of employees involved in ULP cases:
 4 EEs protested the transfer of their tables and (1) those who were discriminatorily dismissed for
seats, claiming that the change was without prior union activities; and
notice and was done merely to harass them as union (2) those who voluntarily went on strike.
members. A heated discussion ensued, during which
said EEs were alleged to have hurled unprintable Both are entitled to reinstatement. HOWEVER, although
insults to the manager and supervisors. They were discriminatorily discharged, reinstatement can be denied
placed under preventive suspension and dismissed because of (1) unlawful conduct or (2) because of
after investigation violence.
 The Company Union filed in behalf of the
dismissed EEs a complaint for illegal dismissal. GR: No BACKWAGES on strike. In an economic strike, the
 While the complaint for illegal dismissal and ULP strikers are not entitled to backwages on the principle that
was pending, the union went on strike and picketed “a fair day’s wage” accrues only for a “fair day’s labor”
the company premises by forming human barricades, EXPN: Discriminatorily dismissed EEs received backpay
which effectively obstructed the free ingress to and from the date of the act of discrimination
egress from its premises, preventing its officials and
employees from doing their usual duties.
In the CAB, the EEs denied of reinstatement were found
 The Company filed a petition to declare the strike guilty of acts of violence consisting of hurling stones which
illegal for failure to observe legal strike smashed glass windows of the building of the company
requirements. and the headlights of a car and the utterance of
 LA: found the strike to be illegal. obscenities such as "putang ina."
 NLRC: affirmed LA. However, it ordered that the
striking union officers be reinstated without IF, DURING THE STRIKE, A STRIKING EE HAS FOUND
backwages instead of being dismissed. ANOTHER JOB, IS HE ENTITLED FOR
REINSTATEMENT?
Issue: Whether strikers who have staged an “illegal” ∼ YES. The mere fact that strikers or dismissed EEs
strike and not marked with good faith may be reinstated have found such employment elsewhere is not
to work. necessarily a bar to their reinstatement.

HELD: NO. NLRC REVERSED.

There is no dispute that the strike in question was CONSOLIDATED LABOR ASSOCIATION OF THE
illegal, for failure of the striking personnel to observe PHILS. vs. MARSMAN & CO., INC.,(1964)
legal strike requirements, to wit: (1) as to the fifteen-
day notice; (2) as to the 2/3 required vote to strike done
FACTS:
by secret ballot; (3) as to submission of the strike vote
 The Union Marsman & Company Employees and
to the Department of Labor at least seven days prior to
Laborers Association (MARCELA), entered into a CBA
the strike.
with MARSMAN and COMPANY.
Good faith is a valid defense against claims of illegality of
a strike. We do find, however, not a semblance of good

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 Despite several meetings, the parties failed to

reach an agreement which is eventually lead to a
strike
 It appears that the strike was attended by act of
violence on the part of certain strikers.
 In the Sec. of Labor, the strikers agreed to return
to work on the promise that the Company would
discuss their demands with them.
 While the Company admitted some of the
strikers, it REFUSED readmission to others unless
they ceased to be active as union members. As a
result, the strike and picketing were resumed.
 The Union contends that the strikers were - KINDS OF EMPLOYMENT -
discriminately dismissed which is an ULP; hence they
are entitled to back wages. SINGER SEWING MACHINE CO. vs. DRILON (1991)

Issue: Whether the strikers are entitled to backpay. FACTS:

 Respondent union filed a petition for “direct
HELD: NO certification” as the sole and exclusive bargaining
The SC ruled that “in an economic strike, the strikers agent of Petitioner Company in Baguio.
ARE NOT ENTITLED to backpay, since the employer  The Company opposed on the ground that the
SHOULD GET THE EQUIVALENT DAY’S WORK FOR WHAT union members are actually not employees but are
HE PAYS HIS EMPLOYEES. During the time that the strike independent contractors as evidenced by the
was an economic one, complainant had no right to collection agency agreement which they signed.
backpay.
 Med-Arbiter: finding that there exists an ER-EE
relationship between the union members and the
COURT’S DISCRETION ON BACKWAGES
Company, granted the petition for certification election
Even after finding of ULP by the ER, award of backwages
rests on the Court’s discretion  The Union contended that they "perform the most
desirable and necessary activities for the continuous
and effective operations of the business of the
NAT’L FEDERATION OF LABOR vs. NLRC (1997) petitioner Company" (citing Art. 280 of the LC)

Issue: Whether Art. 280 may be use as a yardstick in

FACTS:
determining the existence of employment relationship.
 Respondent PERMEX Producer and Exporter
Corporation is a Zamboanga City-based corporation
HELD: NO
engaged in the business of fish and tuna export.
ARTICLE 280  applies where the existence of ER-EE
 The ER dismissed some of its EEs who
relationship is NOT THE ISSUE in the dispute. It merely
happended to be members of the National Federation
distinguishes between 2 kinds of EEs, i.e., regular
of Labor
employees and casual employees, for purpose of
 PERMEX contended that the dismissed EEs were
determining the right of an EE to certain benefits, to join
using their union activities to go on undertime or to
or form a union, or to security of tenure.
justify their constant and frequent absences which
evidently was a violation of company policy
 As a result, over 200 workers picketed outside
company premises. The gates were barricaded, thus BAGUIO COUNTRY CLUB CORP vs. NLRC (1992)
blocking ingress and egress of company vehicles,
trapping 50 workers inside and paralyzing company FACTS:
operations. Additionally, 700 non-striking workers  Private respondent Jimmy Calamba was employed
were prevented from working by petitioner company on a day to day basis as laborer
 PERMEX filed a complaint to declare the strike as and dishwasher for a period of 10 months . He was
illegal. Likewise, NFL filed a case against PERMEX for also hired as a gardener for more than 1 year when he
ULP and damages was dismissed by the petitioner.
 Calamba filed complaint for illegal dismissal
 LA: declared the strike illegal and awarded
PERMEX 500K for moral and exemplary damages.  LA: declared Calamba as a regular EE and ordered
his reinstatement.
 NLRC: affirmed LA but deleted the moral and
exemplary damages and instead award P300T as  NLRC: affirmed LA
compensatory damages to PERMEX.  Petitioner maintains that private respondent
Calamba was a contractual employee whose
Issue: Whether the NLRC committed GAD employment was for a fixed and specific period as set
forth and evidenced by the private respondent's
HELD: NO contracts of employment
In order that damages may be recovered, the best
evidence obtainable by the injured party must be Issue: Whether Calamba has acquired the status of
represented. Actual or compensatory damages cannot be regular EE
presumed, but must be duly proved, and so proved with
a reasonable degree of certainty. HELD: YES. NLRC affirmed
The nature of private respondent Colombo's employment
If the proof is flimsy and insubstantial, no damages will as laborer, gardener, and dishwasher pertains to a regular
be awarded." We consider the amount of P3000,000.00 employee because they are necessary or desirable in the
just and reasonable under the circumstances usual business of petitioner as a recreational
establishment.

1 “Day-to-Day Contractual” EE becoming

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Regular FACTS:
The repeated re-hiring and continuing need of service of  Petitioner Eugenio De Jesus, was a carpenter for
the EE are sufficient evidence of the necessity and the respondent Philippine National Construction
indispensability of his service to the ER’s business or Corporation. While on duty, he vomited blood and was
trade. treated at the Company clinic. After 3months, he
reported back, but he was no longer accepted.
 De Jesus filed a complaint for reinstatement with
BETA ELECTRIC CORP. vs. NLRC (1990) backwages and payment legal benefits.
 The Company contended that De Jesus was hired
FACTS: as a PROJECT EMPLOYEE and his separation was due
 Petitioner Company hired the private respondent to the completion of the project.
Luzviminda Petilla as clerk typist effective December  Salazar contended that he was given appointments
15, 1986 until January 16, 1987. The Co. gave her for specific project since 1974 up to 1984. Hence, he
an extension up to June 30, 1987. has become a REGULAR EE and not a PROJECT EE who
may be terminated only for a lawful cause.
 On June 22, 1987 her services were terminated
without notice or investigation. Hence, she filed a
Issue: Whether Salazar is considered a regular EE
complaint for illegal dismissal.
 Petitioner Co. argues mainly that the private
HELD: YES
respondent's appointment was TEMPORARY and
A non-project EE is entitled to regular employment if he
hence she may be terminated at will.
has rendered service for more than 10 years. As such he
can not be terminated unless for just cause.
Issue: Whether the dismissal is valid?
There are 3 types of non-project employees;
HELD: NO
1. Probationary; 2. Regular; and 3. Casual
An employment may only be said to be TEMPORARY
where it has been fixed for a specific undertaking the
Based on the action form filed by the petitioner he is
completion and the nature of services to be performed is
considered as probationary who after 6 months have
SESONAL and the employment is for the duration of the
achieve a regular status.
season.

MERCADO, SR., vs. NLRC (1991)

1 Temporary EE becoming Regular --
A typist-clerk cannot be said as a temporary EE because
FACTS:
it is far from being specific or seasonal; she is a regular
 Petitioners were agricultural workers utilized by
EE because he has been engaged to perform activities
private respondents in all the agricultural phases of
necessary and desirable in the usual business.
work on the 7 1/2 hectares of rice land and 10
hectares of sugar land owned by the latter;

SALAZAR vs. NLRC (1996)

 They contended that they started to work in the
farm of private respondents between 1949 and 1979.
In any case, their individual employment exceeds 1
FACTS:
year.
 Petitioner Salazar, was employed as
 Petitioners were dismissed from work. Hence, they
construction/project engineer by HL Carlos
filed a complaint for illegal dismissal
Construction for the construction of the Monte de
Piedad building in Cubao, Quezon City.  Private respondent Cruz denied that the said
 Salazar received a memorandum issued by the petitioners were her regular employees and contended
company’s project manager, informing him of the that she engaged their services through spouses
termination of his services. Mercado who supply workers needed by owners of
 Salazar filed a complaint for illegal dismissal, and various farms, but only to do a particular phase of
for non-payment of benefits agricultural work necessary in rice and sugar
production and after which they would be free to
 LA: declared that Salazar is not entitled to render their services to other farm owners who need
separation pay. He was hired as a PROJECT their services.
EMPLOYEE and his services were terminated due to
the completion of the project. Issue: Whether petitioners are considered regular EEs
 NLRC affirmed and, therefore, entitled to benefits.
Issue: Whether Salazar is a project EE and, therefore, HELD: NO
not entitled to separation pay Project EEs do not become Regular EEs although service
exceeds 1 year.
HELD: YES
Although the workers rendered service for almost 30
GR: Project EEs are entitled to separation pay years, they cannot be considered as regular or permanent
EXPN: Project EEs are not entitled to separation pay if employee, because of the fact that:
they are terminated as a result of the completion of the 1. They were FREE to work for other farm
project, regardless of the projects in which they have owners;
been employed. 2. They FREE to CONTRACT their service
with other farm owner;
Salazar’s dismissal was due to the completion of the 3. They were MERE project employees, who
construction of the building. could be hired by other farm owners.

Petitioners being project EEs, or, to use the correct term,

DE JESUS vs. PHILIPPINE NATIONAL seasonal EEs, their employment legally ends upon the
CONSTRUCTION CORP. (1991) completion of each project the season

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The practice of hiring workers on uniformly fixed contract

BRENT SCHOOL, INC vs. ZAMORA (1990) basis of 5 months, only to replace them upon the
expiration of their contracts with other workers on the
FACTS: same employment duration, was to circumvent the
 Respondent Doroteo R. Alegre was engaged as constitutional guarantee on security of tenure and,
athletic director by Brent School, Inc. for a fixed and therefore, contrary to public policy. To uphold the
specific term of five (5) years, contractual arrangement between the employer and the
 Subsequent subsidiary agreements reiterated the workers would in effect permit the former to avoid hiring
same terms and conditions, including the expiry permanent or regular employees by simply hiring them on
date, as those contained in the original contract. a “temporary or casual basis”, thereby violating the
 3 months before the expiration of the stipulated employees’ security of tenure in their jobs.
period, Alegre was terminated on the ground of
completion of contract and expiration of definite
period of employment
 Alegre protested that since his services were
necessary and desirable in the usual business of his
ER, and his employment had lasted for 5 years, he
had acquired the status of a regular employee and
could not be removed except for valid cause.

Issue: Whether Alegre was lawfully teminiated?

MANILA ELECTRIC CO. vs. NLRC (1989)
HELD: YES
Article 280  does not proscribe or prohibit FACTS:
employment contract with a fixed period, PROVIDED the  Complainant Ramon L. Meris was hired by
same is entered into by the parties without any force, respondent MERALCO as a PROBATIONARY EMPLOYEE
duress or improper pressure upon the EE and in the for 5 months as messenger. His work among others,
absence of vitiating consent was to file pleadings in court, serve summons for
execution, verify or follow-up cases in court and other
Reason: Contracts of employment govern the related matters under the legal department.
relationship of the parties. Any stipulation in the  His supervisors were dissatisfied with his
contract, not contrary to law, morals, good customs, performance for being neglectful of his duties and he
public order and public policy, is valid, binding and must was also uncooperative toward co-employees and
be respected. disrespectful to his superiors.
***This practice is however legally questionable if done  Ramon received a Memorandum, advising him of
in a more or less continuous basis with the objective of the termination of his probationary employment.
avoiding regularization as it in effect circumvents the law  LA: ordered the reinstatement of Ramon.
on security of tenure of the workers.  NLRC: sustained the LA and held that the
dismissal was illegal
In the CAB, the employment contract is valid, binding,
and must be respected.
Issue: Whether the dismissal of the ER before the 6
months probationary was just and valid?

PUREFOODS CORP. vs. NLRC (1997) HELD: YES. NLRC reversed.

The ER has the right to terminate probationary
FACTS: employment on justifiable causes
 Private respondents (numbering 906) were hired
by petitioner Pure Foods Corporation to work for a A probationary employee may be dismissed for cause at
fixed period of FIVE MONTHS at its tuna cannery any time before the expiration of six (6) months after
plant in General Santos City. hiring. If after working for less than six (6) months, he is
 After the expiration of their respective contracts found to be unfit for the job, he can be dismissed. But if
of employment, their services were terminated. he continues to be employed longer than six (6) months,
Hence, they filed a complaint for illegal dismissal he ceases to be a probationary employee and becomes a
regular or permanent employee.
 LA: dismissed the complaint on the ground that
the private respondents were mere CONTRACTUAL
WORKERS, and not regular employees; hence, they
A.M. ORETA & CO., INC. vs. NLRC (1989)
could not avail of the law on security of tenure.
 NLRC: reversed LA holding that the private
FACTS:
respondents were regular employees. It declared
 Private respondent Sixto Grulla was engaged by
that the contract of employment for five months was
Engineering Construction and Industrial Development
a scheme to prevent [private respondents'] right to
Company (ENDECO) through A.M. Oreta and Co., Inc.,
security of tenure" and should therefore be struck
as a carpenter in its projects in Jeddah, Saudi Arabia.
down and disregarded for being contrary to law,
 The contract of employment, which was entered
public policy, and morals.
into was for a period of 12 months. Grulla left the
Philippines for Jeddah, Saudi Arabia
Issue: Whether private respondents are considered
regular EEs?  Grulla met an accident which fractured his lumbar
vertebra while working at the jobsite. He was rushed
HELD: YES. NLRC affirmed. to the New Jeddah Clinic and was confined there for
SC struck down as invalid a 5-month contract involving 12 days. Grulla was discharged from the hospital and
workers who were performing activities usually was told that he could resume his normal duties after
necessary or desirable to the business ‘of the company. undergoing physical therapy for two weeks.
 Grulla reported back to his Project Manager and
presented a med certificate declaring him already fit

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for work. Since then, he started working again until

he received a notice of termination of his
employment. Hence, he filed a complaint for illegal
dismissal

Issue: Whether the EE was lawfully terminated

HELD: NO
A probationary EE cannot be removed except for cause
during the period of probation. Although a probationary
or temporary EE has limited tenure, he still enjoys
“security of tenure.” During his tenure, or before the
contract expires, he cannot be removed except as
provided for by the law.

TERMINATION OF EMPLOYMENT:
Consequences of Termination

MANGGAGAWA NG KOMUNIKASYON SA PILIPINAS

and ANTONIO L. CRUZ vs. NLRC and PLDT (1992)

FACTS:
 Petitioner Cruz had been an ER of PLDT for 16
years as an installer/repairman when he was
terminated.
 It appears that sometime in August 1985, Cruz
and co-repairman Moldera was instructed to repair
installations located at 325 Acacia Lane, Mandaluyong.
According to PLDT, the telephone numbers installed on
the said address were actually reinstalled and
functioning at 323 Acacia Lane, Mandaluyong. This
“out-move” of the telephone was considered illegal by
the company there being no service order. Hence, Cruz
was dismissed on the ground of fraud and serious
misconduct.
 Both LA and NLRC arrived at the conclusion that
said EE should be dismissed although with financial
assistance (10K). This was questioned by the PLDT

Issue: Whether Cruz is entitled to financial assistance

HELD: YES
The dismissal of Cruz was valid. PLDT complied with
procedural due process prior to termination of Cruz for
violation of company rules involving what can be
considered fraud and dishonesty.

When there is doubt that dishonesty was committed,

financial assistance may still be awarded to an EE who has
rendered long years of service. Despite the nature of
offense, financial assistance on ground of compassionate
justice may still be given.

PINES CITY EDUCATIONAL CENTER and EUGENIO

BALTAO vs. NLRC (1993)

Mercury Drug Rule Abandoned. Reiterated the doctrine laid

down in Ferrer

FACTS:
 Private respondents were all employed as teachers
on “probationary basis” by petitioner Pines City
Educational Center.
 Said teachers signed contracts of employment with
petitioner for a fixed duration. Due to the expiration of
the contracts and their poor performance as teachers,

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they were notified of not to renew their contracts  Private respondent Roberto Mallare was hired by
anymore. Wephil Corp. as a crew member at its Cubao Branch.
 The teachers filed a complaint for illegal  Mallare had an altercation with a co-employee, Job
dismissal Barrameda, as a result of which he and Barrameda
 LA: ruled in favor of the teachers and ordered were suspended and later on served with notice of
their reinstatement and to pay their full backwages dismissal.
and other benefits and privileges without  Mallare filed a complaint for llegal dismissal.
qualification and deduction from the time they were  LA: dismissed the complaint for lack of merit.
dismissed up to their actual reinstatement.  NLRC: reversed LA and ordered the reinstatement
of Mallare
 NLRC: affirmed the LA
 Wenphil prayed for restraining order alleging that
NLRC committed a grave abuse of discretion. The
Issue: Whether the LA and NLRC are correct in ordering
court issued a restraining order.
the reinstatement and payment of full backwages
 Mallare contended that he was denied due process
because there was no investigation prior his dismissal.
HELD: NO. NLRC reversed.
 According to Wenphil, under the Personnel Manual
Interim earning should not be deducted from the
of the corp., an investigation shall only be conducted if
awarded backwages. The law provides no qualification
the offense committed by the employee is punishable
nor does it state that earned income by the EE during
with the penalty higher than suspension of fifteen (15)
the period of his unjust dismissal to actual reinstatement
days and the erring employee requests for an
should be deducted from such backwages. When the law
investigation of the incident. Wenphil alleges that
does not provide, the court shall not improvise.
Mallare did not ask for investigation, hence waived his
right to the investigation.
The order for their reinstatement and payment of full
backwages and other benefits and privileges from the
Issue: Whether Mallare was denied due process, hence
time they were dismissed up to their actual
entitled to indemnity
reinstatement is proper, conformably with Article 279 of
the Labor Code, as amended by RA 6715 which took
HELD: YES
effect on March 21, 1989.
The contention of Wenphil is untenable.
HOWEVER, in ascertaining the total amount of
In the CAB, Mallare received an official notice of his
backwages payable to them, we go back to the rule prior
termination 4 days later after he was dismissed. His
to the Mercury Drug rule that the total amount derived
refusal to explain his side cannot be considered as a
from employment elsewhere by the employee from the
waiver of his right to an investigation. Although in the
date of dismissal up to the date of reinstatement, if any,
Personnel Manual, it states that an erring employee must
should be deducted therefrom. We restate the
request for an investigation it does not thereby mean that
underlying reason that employees should not be
the ER is thereby relieved of the duty to conduct an
permitted to enrich themselves at the expense of their
investigation before dismissing its EE.
employer. To this extend, our ruling in Alex Ferrer, et al.
vs. NLRC is hereby modified.
The failure of petitioner to give private respondent the
benefit of a hearing before he was dismissed constitutes
BUSTAMANTE vs. NLRC (1996) an infringement of his constitutional right to due process
of law and equal protection of the laws.
Pines City Ruling Abandoned
A dismissal for a valid reason is legal and valid, but
FACTS: the ER who does not observe due process must pay
Evergreen Farms claimed that petitioners are not entitled some INDEMNITY for its breach of legal procedure; the
to recover backwages because they were not actually measure of damages will depend on the facts of the case,
dismissed but their probationary employment was not and on the gravity of the omission by the employer
converted to permanent employment; and assuming that
petitioners are entitled to backwages, computation
thereof should not start from cessation of work up to HELLENIC PHIL. SHIPPING INC. vs. EPIFANIO C.
actual reinstatement, and that salary earned elsewhere SIETE and NLRC (1991)
(during the period of illegal dismissal) should be
deducted from the award of such backwages.
Wenphil Doctrine does not apply.
ILLEGAL DISMISSAL: Dismissal is NOT justified; Due
HELD:
Process not observed.
The “full backwages” amendment by RA 6715 has NO
RETROACTIVE EFFECT; it applies only prospectively.
FACTS:
Hence, the rule is: where the illegal dismissal happened
 Capt. Epifanio Siete was employed as Master of
before the effectivity of RA 6715 (3/21/89), the award of
M/V Houda G by Sultan Shipping Co., Ltd.,
backwages is limited to 3 years without deduction or
 Sometime later, Capt. Wilfredo Lim boarded the
qualification. BUT if the illegal dismissal happened on or
vessel and advised Siete that he had instructions from
after the effectivity of RA 6715, the award of backwages
the owners to take over its command for unexplained
should be computed from the time of illegal dismissal up
reason
to actual reinstatement without any deductions.
 Siete filed a complaint for illegal dismissal.
 Petitioner alleged in its answer that Siete had been
dismissed because of his failure to comply with the
WENPHIL CORP. vs. NLRC (1989) instruction of Sultan Shipping to erase the timber load
line on the vessel and for his negligence in the
DISMISSAL IS LEGAL: Dismissal is justified, but because discharge of the cargo at Tripoli that endangered the
there was no due process, EE is entitled to vessel and stevedores.
indemnification  POEA: dismissed the complaint, holding that there
was valid cause for Siete’s removal.
FACTS:  Siete appealed to the NLRC contending that he
was dismissed without even being informed of the

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charges against him or given an opportunity to We do not agree with the ruling of the NLRC that
refute them. indemnity is incompatible with the award of backwages.
 NLRC: reversed the POEA holding that the These two awards are based on different considerations.
dismissal violated due process and that the Backwages are granted on grounds of equity to workers
documents submitted by the petitioner were for earnings lost due to their illegal dismissal from work.
hearsay, self-serving, and not verified. On the other hand, the award of indemnity is meant to
 Hellenic argues that whatever defects might have vindicate or recognize the right of an employee to due
tainted the EE’s dismissal were subsequently cured process which has been violated by the employer.
when the charges against him were specified and
sufficiently discussed in the position papers In the CAB, the ER failed to comply with the provisions of
submitted by the parties to the POEA. Article 283 of the Labor Code which requires an employer
to serve a notice of dismissal upon the employees sought
Issue: Whether due process was observed by the ER to be terminated and to the Department of Labor, at least
one month before the intended date of termination.
HELD: NO Hence, it is liable to pay indemnity to petitioners. Thus,
The law requires that the investigation be conducted we find that the NLRC committed grave abuse of discretion
before the dismissal, not after. That omission cannot be in deleting the award of indemnity.
corrected by the investigation later conducted by the
POEA. As the Solicitor General correctly maintained, the
due process requirement in the dismissal process is PHIL. TOBACCO FLUE-CURING REDRYING CORP vs.
different from the due process requirement in the POEA NLRC (1998)
proceeding. Both requirements must be separately
observed. FACTS:
 Petitioner company transferred its tobacco
While it is true that in Wenphil Corp. vs. NLRC and processing plant in Balintawak, Quezon City to
Rubberworld (Phils.) vs. NLRC, the lack of due process Candon, Ilocos Sur. The company therein did not
before the dismissal of the employee was deemed actually close its entire business but merely relocated
corrected by the subsequent administrative proceedings its tobacco processing and redrying operations to
where the dismissed employee was given a chance to be another place.
heard, those cases involved dismissals that were later  Two groups of seasonal workers claimed
proved to be for a valid cause. The doctrine in those “separation benefits” after the closure of the plant in
cases is not applicable to the case at bar because our Balintawak. Petitioner refuses to grant separation pay
findings here is that the dismissal was not justified. to the workers belonging to the first batch (referred to
as the Lubat group), because they had not been given
work during the preceding year and, hence, were no
VIERNES vs. NLRC (2003) longer in its employ at the time it closed its
Balintanwak plant. Likewise, it claims exemption from
EE entitled to full backwages because he was illegally awarding separation pay to the second batch (the
dismissed; He is also entitled to indemnification because Luris group), because the closure of its plant was due
due process was not observed to “serious business losses,” as defined in Article 283
of the Labor Code.
FACTS:  LA: ordered petitioner to pay the complainants
 Complainants worked as “meter readers” with their respective separation pay, equivalent to one-half
Benguet Electric Cooperative when they were served month pay for every year of service.
a notice of termination because of retrenchment.
 NLRC: affirmed LA
According to the company, they need to retrench its
 When the separation benefits were given to the
personnel because they are already over staffed.
complainants, the latter alleged that there is wrong
 The complainants filed for illegal dismissal
computation when management did not consider 3/4
contending that they were not apprentices but
of their length of service as claimed
regular employees whose services were illegally and
 According to petitioner co., the separation pay of a
unjustly terminated in a manner that was whimsical
seasonal worker, who works only for a fraction of a
and capricious.
year, should not be equated with that of a regular
 On the other hand, the respondent invokes worker. Petitioner submits that the formula for the
Article 283 of the LC in defense of the questioned computation of a seasonal worker’s separation pay is
dismissal. “Total No. Of Days actually worked / Total No. Of
 LA: dismissed the complaints for lack of merit Working Days in One Yeas x Daily Rate x 15 days”
but ordered the ER to pay the EEs the amount  The complainants claimed that their separation
representing underpayment of their wages, and to pay should be based on the actual number of years
pay indemnity and attorney’s fees. they have been in petitioner’s company.
 NLRC: modified LA and ordered the
reinstatement of the complainants with payment of Issue: Whether the computation adopted by petitioner
backwages limited to one year and deleting the company in granting complainants’ separation pay is
award of indemnity and attorney’s fees. erroneous

Issue: Whether NLRC committed grave abuse of HELD: YES

discretion in deleting the award of indemnity The amount of separation pay is based on two factors: the
amount of monthly salary and the number of years of
HELD: YES service. Although the Labor Code provides different
An ER becomes liable to pay indemnity to a dismissed EE definitions as to what constitutes “one year of service,”
if the ER fails to comply with the requirements of due Book Six does not specifically define “one year of service”
process. The indemnity is in the form of nominal for purposes of computing separation pay. However,
damages intended not to penalize the employer but to Articles 283 and 284 both state in connection with
vindicate or recognize the employee’s right to procedural separation pay that a fraction of at least six months shall
due process which was violated by the employer. be considered one whole year.

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Applying this to the case at bar, we hold that the amount Issue1: Whether private respondents are entitled to
of separation pay which respondent members of the separation pay despite having participated in an illegal
Lubat and Luris groups should receive is one-half (½) strike?
their respective average HELD: YES
monthly pay during the last season they worked The termination of employment of private respondents
multiplied by the number of years they actually rendered was due to the retrenchment policy adopted by API and
service, provided that they worked for at least six not because of the former's union activities.
months during a given year.
Issue2: Whether a stockholder/director/officer of a
The formula that petitioner company proposes, wherein corporation can be held liable for the obligation of the
a year of work is equivalent to actual rendered for 303 corporation absent of finding of bad faith
days, is both unfair and inapplicable, considering that HELD: NO
Articles 283 and 284 provide that in connection with A corporation is a juridical entity with legal personality
separation pay, a fraction of at least six months shall be separate and distinct from those acting for and in its
considered one whole year. Under these provisions, an behalf and, in general, from the people comprising it. The
employee who worked for only six months in a given rule is that obligations incurred by the corporation, acting
year — which is certainly less than 303 days — is through its directors, officers and employees, are its sole
considered to have worked for one whole year. liabilities. Nevertheless, being a mere fiction of law,
peculiar situations or valid grounds can exist to warrant,
albeit done sparingly, the disregard of its independent
ASIONICS PHIL. INC. and FRANK YIH vs. NLRC being and the lifting of the corporate veil. As a rule, this
(1998) situation might arise when a corporation is used to evade
a just and due obligation or to justify a wrong, to shield or
FACTS: perpetrate fraud, to carry out similar unjustifiable aims or
 Asionics Philippines, Inc. ("API"') is a domestic intentions, or as a subterfuge to commit injustice and so
corporation engaged in the business of assembling circumvent the law.
semi-conductor chips and other electronic products
mainly for export. Nothing on record is shown to indicate that Frank Yih has
 Yolanda Boaquina and Juana Gayola started acted in bad faith or with malice in carrying out the
working for API as material control clerk and as retrenchment program of the company. His having been
production operator when they were dismissed by held by the NLRC to be solidarily and personally liable with
API API is thus legally unjustified.
 API entered into a CBA with the Federation Free
Workers ("FFW"). However, a deadlock ensued and WHEREFORE, the questioned decision of the NLRC is
the union decided to file a notice of strike. API was MODIFIED insofar as it holds herein petitioner Frank Yih
forced to suspend operations and Boaquina and personally liable with API.
Gayola were among the employee asked to take a
leave from work.
 Upon the resolution of the deadlock, Boaquina
and Gayola was directed to report back to work.
 Inasmuch as its business activity remained
critical, API was constrained to implement a CUSTODIO vs. MINISTRY OF LABOR AND
company-wide retrenchment . Boaquina was one of EMPLOYMENT (1990)
those affected by the retrenchment. And was
informed that her services were to be dispensed with FACTS:
 Dissatisfied with their union (FFW), Boaquina and  Petitioner Victor Custodio worked for private resp.
Gayola, together with some of other co-employees, “First Farmers Milling and Marketing Assoc.” as Asst.
joined the Lakas ng Manggagawa sa Pilipinas Labor General Manager for almost 17 years.
Union ("Lakas Union"') where they eventually  The ER, through its board of directors, decided to
became members of its Board of Directors. purchase a boiler, the cost of which would amount to
 Lakas Union filed a notice of strike against API on several million pesos. An evaluation committee was
the ground of ULP. API filed a complaint for illegal constituted with petitioner as chairman. A dispute
strike arose between Custodio and the general manager
 LA: declared the strike staged by Lakas Union to regarding the committee's recommendations,
be illegal and ruled that all the officers of the Unions particularly, the brand of boiler recommended, leading
at the time of the strike are to have lost their to charges and countercharges of kickbacks or
employment status. commissions given to officers and directors by the
suppliers. Because of this, Cutodio submitted a letter
 Boaquina and Gayola filed a complaint for illegal of resignation
dismissal against API and its manager Frank Yih  In the board's meeting, Custodio’s letter of
 LA: held that API is guilty of illegal dismissal and resignation was discussed. The minutes stated:that
ordered it to pay private respondent Yolanda the letter of resignation submitted by Mr. Victor
Boaquina separation pay of one-half (1/2) month Custodio is irrevocable and he is considered resigned
pay for every year of service, plus overtime pay, and as soon as the board takes cognizance of his
to reinstate private respondent Juana Gayola with irrevocable letter of resignation.
full backwages from the time her salaries were  Custodio expressed his intention to withdraw his
withheld from her until her actual reinstatement. letter of resignation. The president reported that no
 NLRC: reversed LA in holding that API is guilty of letter of withdrawal has been received. In as much as
illegal dismissal but ruled that the strike was illegal. the Board believed that it had no choice on the matter
 Petitioner API argued that that respondents it did not take any action on the resignation except to
should not be entitled to separation pay because of take cognizance of it.
their involvement in the strike which was declared  When petitioner went back to work, he was
illegal. informed that he was no longer connected with the
company and transaction made by him shall be void.
 Custodio filed a complaint for illegal dismissal

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 The Co. contends that since his resignation letter Northeastern Mindanao Mission of the Seventh Day
used the word. "irrevocable," his resignation need Adventist Church in Butuan City.
not be accepted by private respondent and could no  Respondent SDA claims that due to corruption
longer be withdrawn by petitioner. charges, Brion was transferred to the Davao Mission.
Thereafter, allegedly due to an act of indiscretion with
Issue: Whether the resignation of Custodio may be a masseuse, petitioner was demoted to the position of
withdrawn? Sabbath School Director at the Northern Mindanao
Mission of the SDA located at Cagayan de Oro City.
HELD: YES Here, petitioner worked until he retired in 1983. As
The undisputed facts and circumstances support the was the practice of the SDA, petitioner was provided a
conclusion that petitioner's resignation never became monthly amount as a retirement benefit.
effective. Despite its being termed "irrevocable," neither  Sometime thereafter, Brion got into an argument
the petitioner nor the private respondent treated it as with Samuel Sanes, another pastor of the SDA. This
such. disagreement degenerated into a rift between Brion
and the SDA, culminating in the establishment by
Resignation is withdrawable even if the EE has Brion of a rival religious group which he called the
called it irrevocable. But after it is accepted or “Home Church.” He succeeded in enticing a number of
approve by the ER, its withdrawal needs the ER’s SDA members to become part of his congregation
consent.  Because of his actions, Brion was excommunicated
by the SDA and his name was dropped from the
WHEREFORE, the petition is GRANTED. Private Church Record Book. As a consequence of his
respondent is ORDERED to reinstate petitioner. But, “disfellowship,” petitioner’s monthly retirement benefit
considering the time that has elapsed, should petitioner's was discontinued by the SDA.
reinstatement to his former or a substantially equivalent  Brion filed an action for mandamus with the RTC of
position be no longer feasible, he shall be entitled to Cagayan de Oro City asking that the SDA restore his
separation pay equivalent to one (1) month's salary for monthly retirement benefit.
every year of service, in addition to the backwages.  RTC: finds in favor of Brion and ordered SDA to
pay the retirement benefits
 CA: reversed RTC and ordered the dismissal of
HYATT TAXI SERVICES vs. CATINOY (2001) Brion’s complaint.

FACTS: Issue: Whether Brion is entitled to retirement benefits

 2 union officers, Catinoy and Saturnino, had a HELD: YES. We find for petitioner.
fight inside the union office, an act that violates
company rules and union by-laws. The union Retirement has been defined as a withdrawal from office,
executive board decided to place them on indefinite public station, business, occupation, or public duty. It is
suspension and requested the company, Hyatt Taxi the result of a bilateral act of the parties, a voluntary
Services Inc., to implement it. The company place agreement between the employer and the employee
the 2 on preventive suspension for 30 days whereby the latter, after reaching a certain age, agrees
 Catinoy, aggrieved by the preventive suspension and/or consents to sever his employment with the former.
since he was not the aggressor, filed a complaint for In this connection, the modern socio-economic climate has
illegal suspension. After the lapse of 30 days, he fostered the practice of setting up pension and retirement
reported to work but was not allowed to resume his plans for private employees, initially through their
duties. He amended his complaint to include voluntary adoption by employers, and lately, established
constructive dismissal by legislation. Pension schemes, while initially
 LA: found the Hyatt taxi to be guilty of illegal humanitarian in nature, now concomitantly serve to secure
preventive suspension and illegal constructive loyalty and efficiency on the part of employees, and to
dismissal increase continuity of service and decrease the labor
turnover by giving to the employees some assurance of
 Hyatt and the union appealed to the NLRC
security as they approach and reach the age at which
 NLRC: affirmed LA.. HOWEVER, upon MFR, the earning ability and earnings are materially impaired or at
NLRC deleted the award of backwages because there an end.
was no concrete showing that the complainant was
constructively dismissed Art. 287. Retirement. – Any employee may be retired
 CA: reinstated the LA’s decision upon reaching the retirement age established in the
collective bargaining agreement or other applicable
Issue: Whether the private respondent was employment contract.
constructively dismissed In case of retirement, the employee shall be entitled to
receive such retirement benefits as he may have earned
HELD: YES. CA affirmed. under existing laws and any collective bargaining
Preventive suspension beyond 30 days amounts to agreement and other agreements…
constructive dismissal. It shows that respondent was not
taken back by petitioner Hyatt after the 30-day From the above, it can be gleaned that employer and
suspension period. Clearly, constructive dismissal had employee are free to stipulate on retirement benefits, as
already set in when the suspension went beyond the long as these do not fall below the floor limits provided by
maximum period allowed by law. law.

BRION vs. SOUTH PHIL UNION MISSION OF THE In the present case, petitioner was adjudged by the SDA
7TH DAY ADVENTIST CHURCH (1999) in 1983, to be qualified for retirement, such that when it
began paying petitioner retirement benefits in said year, it
FACTS: must have been convinced that petitioner had “devoted his
 Petitioner Delfin A. Brion became a member of life to the work of the Seventh-day Adventist Church.”
respondent South Philippine Union Mission of the Having arrived at such a conclusion, it may not now
Seventh Day Adventist Church (hereafter SDA). He reverse this finding to the detriment of petitioner.
became an ordained minister and president of the

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 When the criminal case was dismissed, he

UE vs. MINISTRY OF LABOR AND UE FACULTY repeated his request for reinstatement but it was
ASSOCIATION (1987) ignored
 Romeo’s lawyer made a formal demand in writing
FACTS: but it was denied by the ER. Hence, Romeo filed a
 Labor and Employment directing the University of formal complaint
the East to pay the faculty members concerned  Regional Director: dismissed the complaint on
retirement benefits in accordance with their the ground that it was filed beyond the prescriptive
collective bargaining agreement, in addition to the period prescribe in Art. 291 counted from the date of
payment of separation pay according to the collision.
Termination Pay Law.
 The then president of the University of the East Issue: Whether the complaint was filed beyond the
(UE) announced the phase-out of the College of prescriptive period
Secretarial Education and the High School
Department respectively on the grounds of lack of HELD: NO
economic viability and financial losses. Since a 'cause of action' requires, as essential elements,
 The respondent UE Faculty Association opposed not only a legal right of the plaintiff and a correlative
the phaseout, contending that such action obligation of the defendant but also 'an act or omission of
contravened the law because it constitutes union the defendant in violation of said legal right,' the cause of
busting. The private respondent filed a notice of action does not accrue until the party obligated refuses,
strike with the Bureau of Labor Relations (BLR). expressly or impliedly, to comply with its duty.
 BLR conducted several conciliation proceedings
but when no amicable settlement was reached, the Romeo’s cause of action accrued on May 10, 1980, when
respondent Minister issued an order assuming the ER denied his demand for reinstatement. The earlier
jurisdiction over the case and directing the BLR to requests made by Romeo having been warded off with
receive evidence in connection with the dispute. indefinite promises, and Romeo not yet having decided to
 Respondent Minister of Labor ruled that the assert his right, his cause of action could not be said to
phaseout of the two departments was arbitrary and have then already accrued. As Romeo’s complaint was
ordered UE to pay all affected faculty members of filed not later than 3 months only after such rejection,
the College Secretarial Education and the High there is no question that his action has prescribed,
School Department a separation pay. In addition to whatever prescriptive period is applied.
the termination pay, the University is likewise
directed to pay retirement benefits to all affected FULL BACKWAGES
faculty members who, in accordance with the - wages from the time of illegal termination up to the
collective bargaining agreement, are retireable prior actual reinstatement
to or at the time of the phase-out." 1. Mercury Drug vs. NLRC
 Petitioner arguesns that the award of separation - 3 years pay without qualification and
pay pursuant to the Termination Pay Law necessarily deduction
excludes retirement benefits. 2. Ferrer vs. NLRC
- wages from time of illegal dismissal to
Issue: Whether the Minister of Labor and Employment actual reinstatement MINUS earnings
committed grave abuse of discretion in awarding both elsewhere (earnings from the new job
retirement benefits and separation pay to the faculty
while case is pending)
members affected by the phase-out.
3. Osmalik Bustamante vs. NLRC
HELD: NO. We rule for the respondents.
- wages from the time of illegal dismissal up
Separation pay arising from a forced termination of to actual reinstatement without any deductions.
employment and benefits given as a contractual right
due to many years of faithful service are not necessarily
exclude each other.

Clearly, the only situation contemplated in the CBA

wherein an employee shall be precluded from receiving
retirement benefits is when said employee is not
separated from service but transferred instead from one
college or department to another. There is no provision
to the effect that teachers who are forcibly dismissed are
not entitled to retirement benefits if the MOLE awards
them separation pay. Furthermore, since the above
provision has become in effect part of the petitioner's
policy, the same should be enforced separately from the
provisions of the Termination Pay Law.

BALIWAG TRANSIT INC. vs. BLAS OPLE (1989)

FACTS:
 Romeo Hughes, a bus driver, met an accident
when the bus he was driving was hit by a train. His
ER sued the railroad company. Romeo was absolved
of contributory negligence but suspended by his ER
 Soon after the judgment was rendered against
the railroad company, he renewed his driver’s license
and asked for reinstatement. But he was asked to
wait until the criminal case was decided.

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