Labor Relations

Case Digest Compilation

subdivision and instrumentality of the government, including
Arizala v. Court of Appeals government-owned or controlled corporations, .. administered by an
G.R. Nos. 43633-34 September 14, 1990 independent Civil Service Commission.
2. Article 292 of the Labor Code repealed such parts and
Facts: provisions of the Industrial Peace Act as were "not adopted as part"
Industrial Peace Act (IPA), became a law and it was stated that: of said Code "either directly or by reference." The Code did not
Government-owned or controlled corporations had the duty to adopt the provision of the Industrial Peace Act conferring on
bargain collectively and were otherwise subject to the obligations employees of government-owned or controlled corporations the right
and duties of employers in the private sector. The Act also of self-organization and collective bargaining; in fact it made known
prohibited supervisors to become, or continue to be, members of that the "terms and conditions of employment of all government
labor organizations composed of rank-and-file employees and employees, including employees of government-owned and
prescribed criminal sanctions for breach of the prohibition.   controlled corporations," would thenceforth no longer be fixed by
collective bargaining but "be governed by the Civil Service Law,
During the effectivity of IPA that the Government Service Insurance rules and regulations." 
System (GSIS) became bound by a collective bargaining agreement 3. The specific penalty for violation of the prohibition on supervisors
executed between it and the labor organization, GSIS Employees being members in a labor organization of employees under their
Association. supervision has disappeared.
4. The Code also modified the concept of unfair labor practice,
The agreement contained a "maintenance-of-membership" decreeing that thenceforth, "it shall be considered merely as an
clause, contains that all employees who, at the time of the execution administrative offense rather than a criminal offense (and that)
of said agreement, were members of the union or became members (u)nfair labor practice complaints shall x x be processed like any
thereafter, were obliged to maintain their union membership in good ordinary labor disputes."
standing for the duration of the agreement as a condition for their
continued employment in the GSIS. RESPONDENT’S ARGUMENTS BEFORE THE SC:

Pablo Arizala et. Al were officers/supervisors of the Central Visayas 1) The Labor Code also states that "all actions or claims accruing
Regional Office of the GSIS. prior to its effectivity ... shall be determined in accordance with the
 Pablo Arizala - Chief of the Accounting Division laws in force at the time of their accrual;" and
 Sergio Maribao - Chief of the Billing Section 2) The legislature cannot generally intervene and vacate the
 Leonardo Joven-Assistant Chief of the Accounting Division judgment of the courts, either directly or indirectly, by the repeal of
(sometimes Acting Chief in the absence of the Chief) the statute under which said judgment has been rendered.
 Felino Bulandus- Assistant Chief of the Field Service and
Non-Life Insurance Division (and Acting Division Chief in
the absence of the Chief RULING:

Demands were made on all four of them to resign from the GSIS SUMMARY OF LAWS COVERING THE GOVERNMENT
Employees Association, in view of their supervisory positions. They EMPLOYEES’ RIGHT TO SELF-ORGANIZATION
refused to do so. Hence, two (2) criminal cases for violation of the
Industrial Peace Act were lodged against them, and they were The legal principles governing the rights of self-organization and
convicted. collective bargaining of rank-and-file employees in the government-
particularly as regards supervisory, and high level or managerial
CA affirmed the RTC’s decision. employees have undergone alterations through the years.
Arizala et. Al moved for reconsideration.
Republic Act No. 875 (Industrial Peace Act)
Petitioners’ Arguments:
As already intimated, persons "employed in proprietary functions of
 that when the so called "1973 Constitution" took effect on
the Government, including but not limited to governmental
January 17, 1973 pursuant to Proclamation No. 1104, the
corporations," had the right of self-organization and collective
case of Arizala and Maribao was still pending in the Court
bargaining, including the right to engage in concerted activities to
of Appeals and that of Joven and Bulandus, pending
attain their objectives, e.g. strikes.
decision in the City Court of Cebu;
 that since the provisions of that constitution and of the
But those "employed in governmental functions" were forbidden to
Labor Code subsequently promulgated (eff., November 1,
"strike for the purpose of securing changes or modification in their
1974), repealing the Industrial Peace Act-placed
terms and conditions of employment" or join labor organizations
employees of all categories in government-owned or
which imposed on their members the duty to strike. The reason
controlled corporations without distinction within the Civil
obviously was that the terms and conditions of their employment
Service, and provided that the terms and conditions of
were "governed by law" and hence could not be fixed, altered or
their employment were to be "governed by the Civil
otherwise modified by collective bargaining.
Service Law, rules and regulations"
 hence, no longer subject of collective bargaining, the Supervisory employees were forbidden to join labor organizations
appellants ceased to fall within the coverage of the composed of employees under them, but could form their own
Industrial Peace Act and should thus no longer continue to unions. Considered "supervisors' were those 'having authority in the
be prosecuted and exposed to punishment for a violation interest of an employer to hire, transfer, suspend, lay-off, recall,
thereof. They pointed out further that the criminal sanction discharge, assign, recommend, or discipline other employees, or
in the Industrial Peace Act no longer appeared in the responsibly to direct them, and to adjust their grievance or effectively
Labor Code. to recommend such acts if, in connection with the foregoing, the
ISSUE: exercise of such authority is not merely routinary or clerical in nature
but requires the use of independent judgment." 
Whether or not the petitioners' criminal liability for a violation of the
Industrial Peace Act may be deemed to have been obliterated in Republic Act No. 2260
virtue of subsequent legislation and the provisions of the 1973 and
1987 Constitutions? Similar provisions were found in R.A. No. 2260, the Civil Service Act
of 1959. This Act declared that the "Philippine Civil Service ...
PETITIONERS’ CONTENTION BEFORE THE SC: embrace all branches, subdivisions and instrumentalities of the
government including government-owned and controlled
1. Section 1, Article XII-B of the 1973 Constitution does indeed corporations." 
provide that the "Civil Service embraces every branch, agency,
1
Based on the syllabus of Atty. Maria Christina S. Sagmit
Ateneo De Davao University S.Y. 2020-2021
Digested by: Ampatuan, Ampog,Banosan,Esmael,Frias,Mahusay,Malicay,Paclibar,Peῆamante,Picot,Sinsuat,Sosoban,
 Labor Relations
Case Digest Compilation
It prohibited such civil service employees who were "employed in corollarily engage in strikes and other concerted activities in an
governmental functions" to belong to any labor organization which attempt to bring about changes in the conditions of their work. They
imposed on their members "the obligation to strike or to join strikes." could not however do so under the Labor Code and its Implementing
And one of the first issuances of the President after the proclamation Rules and Regulations; these provided that "government employees,
of martial law in September, 1972, was General Order No. 5 including employees of government-owned and/or controlled
which inter alia banned strikes in vital industries," as well as 'all corporations," without distinction as to function, were "exempted"
rallies, demonstrations and other forms of group actions."  (excluded is the better term) from "the right to self-organization and
to form, join or assist labor organizations for purposes of collective
Not so prohibited, however, were those "employed in proprietary bargaining," and by implication, excluded as well from the right to
functions of the Government including, but not limited to, engage in concerted activities, such as strikes, as coercive
governmental corporations." The Act also penalized any person who measures against their employers.
"violates, refuses or neglects to comply with any ... provisions of the
Act or rules thereunder promulgated ... by a fine not exceeding one Members of supervisory unions who were not managerial
thousand pesos or by imprisonment not exceeding six months or employees, were declared by the Labor Code to be "eligible to join
both such fine and imprisonment in the discretion of the court."  or assist the rank and file labor organization, and if none exists, to
form or assist in the forming of such rank and file organization
The 1973 Constitution " Managerial employees, on the other hand, were pronounced as
'not eligible to join, assist or form any labor organization."  A
The 1973 Constitution laid down the broad principle that "The State "managerial employee" was defined as one vested with power or
shall assure the rights of workers to self-organization, collective prerogatives to lay down and execute management policies and/or
bargaining, security of tenure, and just and humane conditions of to hire, transfer, suspend, lay-off, recall, discharge, assign or
work,"  and directed that the "National Assembly shall provide for the discipline employees, or to effectively recommend such managerial
standardization of compensation of government officials and actions." 
employees, including those in government-owned or controlled
corporations, taking into account the nature of the responsibilities Presidential Decree No. 807
pertaining to, and the qualifications required for, the positions
concerned."  Civil Service Decree of the Philippines, Presidential Decree No. 807
(eff., Oct. 6,1975) which superseded the Civil Service Law of 1959
PD 442, The Labor Code (RA 2260)  and repealed or modified "all laws, rules and regulations
or parts thereof inconsistent with the provisions" thereof attempted to
The Labor Code of the Philippines, enacted within a year from clarify the matter.
effectivity of the 1973 Constitution, incorporated the proposition that
the "terms and conditions of employment of all government The Decree categorically described the scope and coverage of the
employees, including employees of government-owned and "Civil Service" as embracing 44 every branch, agency, subdivision,
controlled corporations are governed by the Civil Service Law, rules and instrumentality of the government, including every government
and regulations."  It incorporated, too, the constitutional mandate owned or controlled corporation whether performing governmental
that the salaries of said employees "shall be standardized by the or propriety function.  The effect was seemingly to prohibit
National Assembly." government employees (including those "employed in proprietary
functions of the Government") to "strike for the purpose of securing
The Labor Code, however "exempted" government employees from changes of their terms and conditions of employment,"  something
the right to self-organization for purposes of collective bargaining. which, as aforestated, they were allowed to do under the Civil
While the Code contained provisions acknowledging the right of "all Service Act of 1959.
persons employed in commercial, industrial and agricultural Be this as it may it seems clear that PD 807 (the Civil Service
enterprises, including religious, medical or educational institutions Decree) did not modify the declared ineligibility of "managerial
operating for profit" to "self-organization and to form, join or assist employees" from joining, assisting or forming any labor organization.
labor organizations for purposes of collective bargaining," they
"exempted from the foregoing provisions: Executive Order No. 111

a) security guards; Executive Order No. 111, issued by President Corazon C. Aquino on
b) government employees, including employees of government December 24, 1986 in the exercise of legislative powers under the
government-owned and/ or controlled corporations; Freedom Constitution, modified the general disqualification above
c) managerial employees; and mentioned of 'government employees, including employees of
d) employees of religious, charitable, medical and educational government-owned and/or controlled corporations" from "the right to
institutions not operating for profit, provided the latter do not have self-organization and to form, join or assist labor organizations for
existing collective agreements or recognized unions at the time of purposes of collective bargaining.' It granted to employees
the effectivity of the code or have voluntarily waived their "of government corporations established under the Corporation
exemption." Code x x the right to organize and to bargain collectively with their
respective employers."  To all 'other employees in the civil service, ...
(it granted merely) the right to form associations for purposes not
The reason for denying to government employees the right to "self- contrary to law,"  not for "purposes of collective bargaining."
organization and to form, join or assist labor organizations for
purposes of collective bargaining" is presumably the same as that The 1987 Constitution
under the Industrial Peace Act, i.e., that the terms and conditions of
government employment are fixed by law and not by collective The provisions of the present Constitution on the matter appear to
bargaining. be somewhat more extensive. They declare that the "right to self
organization shall not be denied to government
INCONSISTENCIES BETWEEN THE LABOR CODE ABD THE employees;" that the State "shall guarantee the rights of all workers
CIVIL SERVICE ACT: to self-organization, collective bargaining and negotiations, and
peaceful concerted activities, including the right to strike in
Some inconsistency appears to have arisen between the Labor accordance with law;" and that said workers "shall be entitled to
Code and the Civil Service Act of 1959. Under the Civil Service Act, security of tenure, humane conditions of work, and a living wage,
persons "employed in proprietary functions of the government and also participate in policy and decision-making processes
including, but not limited to, governmental corporations'-not being affecting their rights and benefits as may be provided by law. 
within "the policy of the Government that the employees therein shall
not strike for the purpose of securing changes in their terms and
conditions of employment"-could legitimately bargain with their CSC Memorandum Circular No. 6
respective employers through their labor organizations, and
2
Based on the syllabus of Atty. Maria Christina S. Sagmit
Ateneo De Davao University S.Y. 2020-2021
Digested by: Ampatuan, Ampog,Banosan,Esmael,Frias,Mahusay,Malicay,Paclibar,Peῆamante,Picot,Sinsuat,Sosoban,
 Labor Relations
Case Digest Compilation
Memorandum Circular No. 6 of the Civil Service Commission, issued level employees whose functions are normally considered as policy
on April 21, 1987 enjoined strikes by government officials and making or managerial, or whose duties are of a highly confidential
employees, to wit:  nature shall not be eligible to join the organization of rank-and-file
... Prior to the enactment by Congress of applicable laws concerning government employees. 
strike by government employees, and considering that there are
existing laws which prohibit government officials and employees A "high level employee" is one "whose functions are normally
from resorting to strike, the Commission enjoins, under pain of considered policy determining, managerial or one whose duties are
administrative sanctions, all government officers and employees highly confidential in nature. A managerial function refers to the
from staging strikes, demonstrations, mass leaves, walk-outs and exercise of powers such as: 1. To effectively recommend such
other forms of mass action which will result in temporary stoppage or managerial actions; 2. To formulate or execute management policies
disruption of public services. To allow otherwise is to undermine or and decisions; or 3. To hire, transfer, suspend, lay off, recall,
prejudice the government system. dismiss, assign or discipline employees. 

Executive Order No. 180

Republic Act No. 6715
The scope of the constitutional right to self-organization of The rule regarding membership in labor organizations of
"government employees" above mentioned, was defined and managerial and supervisory employees just adverted to, was
delineated in Executive Order No. 180 (eff. June 1, 1987). clarified and refined by Republic Act No. 6715, effective on
According to this Executive Order, the right of self-organization does March 21, 1989, further amending the Labor Code.
indeed pertain to all "employees of all branches, subdivisions, Under RA 6715 labor unions are regarded as organized either
instrumentalities and agencies of the Government, including (a) "for purposes of negotiation," or
government-owned or controlled corporations with original charters;"  (b) "for furtherance and protection"of the members' rights.
such employees "shall not be discriminated against in respect of Membership in unions organized "for purposes of negotiation" is
their employment by reason of their membership in employees' open only to rank-and-file employees. "Supervisory employees " are
organizations or participation in the normal activities of their ineligible "for membership in a labor organization of the rank-and-file
organization x x (and their) employment shall not be subject to the employees but may join, assist or form separate labor organizations
condition that they shall not join or shall relinquish their membership of their own," i.e., one organized "for furtherance and protection" of
in the employees' organizations.  their rights and interests. However, according to the Rules
implementing RA 6715, "supervisory employees who
However, the concept of the government employees' right of are included in an existing rank-and- file bargaining unit , upon
self-organization differs significantly from that of employees in the effectivity of Republic Act No. 6715 shall remain in that
the private sector. The latter's right of self-organization, i.e., "to unit ..." Supervisory employees are "those who, in the interest of the
form, join or assist labor organizations for purposes of collective employer, effectively recommend such managerial actions  if the
bargaining," admittedly includes the right to deal and negotiate with exercise of such authority is not merely routinary or clerical in nature
their respective employers in order to fix the terms and conditions of but requires the use of independent judgment. 
employment and also, to engage in concerted activities for the
attainment of their objectives, such as strikes, picketing, boycotts. CONCLUSION:
But the right of government employees to "form, join or assist Membership in employees' organizations formed for purposes
employees organizations of their own choosing" under of negotiation are open to rank-and-file employees only, as
Executive Order No. 180 is not regarded as existing or available above mentioned, and not to high level employees.  Indeed,
for "purposes of collective bargaining," but simply "for the "managerial employees" or "high level employees" are, to
furtherance and protection of their interests."  repeat, "not eligible to join, assist or form any labor
organization" at all.  A managerial employee is defined as "one
In other words, the right of Government employees to deal and who is vested with powers or prerogatives to lay down and
negotiate with their respective employers is not quite as extensive as execute, management policies and/or to hire, transfer, suspend,
that of private employees. Excluded from negotiation by government lay-off, recall, discharge, assign or discipline employees."
employees are the "terms and conditions of employment ... that are
fixed by law," it being only those terms and conditions not otherwise This is how the law now stands, particularly with respect to
fixed by law that "may be subject of negotiation between the duly supervisory employees vis a vis labor organizations of employees
recognized employees' organizations and appropriate government under them.
authorities," 
APPLICATION TO THE CASE:
And while EO No. 180 concedes to government employees, like their
counterparts in the private sector, the right to engage in concerted Now, the GSIS performs proprietary functions. It is a non-stock
activities, including the right to strike, the executive order is quick to corporation, managed by a Board of Trustees exercising the "usual
add that those activities must be exercised in accordance with law, corporate powers." In other words, it exercises all the powers of a
i.e. are subject both to "Civil Service Law and rules" and "any corporation under the Corporation Law in so far as they are not
legislation that may be enacted by Congress,"  that "the resolution of otherwise inconsistent with other applicable law. It is engaged
complaints, grievances and cases involving government employees" essentially in insurance, a business that "is not inherently or
is not ordinarily left to collective bargaining or other related exclusively a governmental function, ... (but) is on the contrary, in
concerted activities, but to "Civil Service Law and labor laws and essence and practice, of a private nature and interest." 
procedures whenever applicable;" and that in case "any dispute 1. The petitioners contend that the right of self-organization and
remains unresolved after exhausting all available remedies under collective bargaining had been withdrawn by the Labor Code from
existing laws and procedures, the parties may jointly refer the government employees including those in government-owned and
dispute to the (Public Sector Labor-Management) Council for controlled corporations- chiefly for the reason that the terms and
appropriate action." What is more, the Rules and Regulations conditions of government employment, all embraced in civil service,
implementing Executive Order No. 180 explicitly provide that may not be modified by collective bargaining because set by law. It
since the "terms and conditions of employment in the is therefore immaterial, they say, whether supervisors are members
government, including any political subdivision or of rank-and-file unions or not; after all, the possibility of the
instrumentality thereof and government-owned and controlled employer's control of the members of the union thru supervisors thus
corporations with original charters are governed by law, the rendering collective bargaining illusory, which is the main reason for
employees therein shall not strike  for the purpose of securing the prohibition, is no longer of any consequence.
changes thereof. 
This was true, for a time. As already discussed, both under the
LIMITATIONS OD HIGH LEVEL EMPLOYEES: Labor Code and PD 807, government employees, including those in
On the matter of limitations on membership in labor unions of government-owned or controlled corporations, were indeed
government employees, Executive Order No. 180 declares that "high precluded from bargaining as regards terms and conditions of
3
Based on the syllabus of Atty. Maria Christina S. Sagmit
Ateneo De Davao University S.Y. 2020-2021
Digested by: Ampatuan, Ampog,Banosan,Esmael,Frias,Mahusay,Malicay,Paclibar,Peῆamante,Picot,Sinsuat,Sosoban,
 Labor Relations
Case Digest Compilation
employment because these were set by law and hence could not In the case of People v. Almuete, where the defendants-appellees
possibly be altered by negotiation. were charged under section 39 of Republic Act No. 1199, as
amended (the Agricultural Land Tenancy Law of 1954) which
But EO 111 restored the right to organize and to negotiate and penalized pre-threshing by either agricultural tenant or his landlord.
bargain of employees of "government corporations established They sought and secured a dismissal on the ground, among others,
under the Corporation Code." And EO 180, and apparently RA 6715, that there was no law punishing the act charged-a reference to the
too, granted to all government employees the right of collective fact that Republic Act No. 1199 had already been superseded by the
bargaining or negotiation except as regards those terms of their Agricultural Land Reform Code of 1963 which instituted the
employment which were fixed by law; and as to said terms fixed by leasehold system and abolished share tenancy subject to certain
law, they were prohibited to strike to obtain changes thereof. conditions. On appeal by the Government, this Court upheld the
dismissal, saying:
2. The petitioners appear to be correct in their view of the
disappearance from the law of the prohibition on supervisors being The legislative intent not to punish anymore the tenant's act of pre-
members of labor organizations composed of employees under their reaping and pre-threshing without notice to the landlord is inferable
supervision. The Labor Code (PD 442) allowed supervisors (if not from the fact that, as already noted, the Code of Agrarian Reforms
managerial) to join rank-and-file unions. And under the Implementing did not reenact section 39 of the Agricultural Tenancy Law and that it
Rules of RA 6715, supervisors who were members of existing labor abolished share tenancy which is the basis for penalizing
organizations on the effectivity of said RA 6715 were explicitly clandestine pre-reaping and pre-threshing.
authorized to "remain therein."
As held in the Adillo case, the act of pre-reaping and pre-threshing
3. The correctness of the petitioners' theory that unfair labor without notice to the landlord, which is an offense under the
practices ceased to be crimes and were deemed merely Agricultural Tenancy Law, had ceased to be an offense under the
administrative offenses in virtue of the Labor Code, cannot be subsequent law, the Code of Agrarian Reforms. To prosecute it as
gainsaid. Article 250 of the Labor Code did provide as follows: an offense when the Code of Agrarian Reforms is already in force
would be repugnant or abhorrent to the policy and spirit of that Code
ART. 250. Concept of unfair labor practice.-The concept of unfair and would subvert the manifest legislative intent not to punish
labor practice is hereby modified. Henceforth, it shall be considered anymore pre-reaping and pre-threshing without notice to the
merely as an administrative offense rather than a criminal offense. landholder.
Unfair labor practice complaints shall, therefore, be processed like The repeal of a penal law deprives the courts of jurisdiction to punish
any ordinary labor disputes. persons charged with a violation of the old penal law prior to its
repeal (People vs. Tamayo, 61 Phil. 225; People vs. Sindiong and
But unfair labor practices were declared to be crimes again by later Pastor, 77 Phil. 1000; People vs. Binuya, 61 Phil. 208; U.S. vs.
amendments of the Labor Code effected by Batas Pambansa Blg. Reyes, 10 Phil. 423; U.S. vs. Academia, 10 Phil. 431. See dissent in
70, approved on May 1, 1980. Lagrimas vs. Director of Prisons, 57 Phil. 247, 252, 254).

The decisive consideration is that at present, supervisors who were The foregoing precedents dictate absolution of the appellants of the
already members of a rank-and-file labor organization at the time of offenses imputed to them.
the effectivity of R.A. No. 6715, are authorized to "remain therein." It
seems plain, in other words, that the maintenance by supervisors of WHEREFORE, the judgments of conviction subject of the appeal, as
membership in a rank-and-file labor organization even after the well as those in Crim. Case No. 5275-R and Crim. Case No. 4130-R
enactment of a statute imposing a prohibition on such membership, rendered by the Trial Court, are REVERSED and the accused-
is not only not a crime, but is explicitly allowed, under present law. appellants ACQUITTED of the charges against them.

Now, in a case decided as early as 1935, People v. Tamayo,  where

the appellants had appealed from a judgment convicting them of a
violation of a municipal -ordinance, and while their appeal was
pending, the ordinance was repealed such that the act complained
of ceased to be a criminal act but became legal, this Court dismissed
the criminal proceedings, pronouncing the effects of the repeal to be
as follows:

In the leading case of the United States vs. Cuna (12 Phil. 241),

and Wing vs. United States (218 U.S. 272), the doctrine was clearly
established that in the Philippines repeal of a criminal act by its
reenactment, even without a saving clause would not destroy
criminal liability. But not a single sentence in either derision indicates
that there was any desire to hold that a person could be prosecuted
convicted, and punished for acts no longer criminal.

There is no question that at common law and in America a much

more favorable attitude towards the accused exists relative to
statutes that have been repealed than has been adopted here. Our
rule is more in conformity with the Spanish doctrine, but even in
Spain, where the offense ceased to be criminal, petition cannot be
had (1 Pacheco, Commentaries, 296).

The repeal here was absolute and not a reenactment and repeal by
implication. Nor was there any saving clause. The legislative intent
as shown by the action of the municipal is that such conduct,
formerly denounced, is no longer deemed criminal, and it would be
illogical for this court to attempt to sentence appellant for the offense
that no longer exists.

We are therefore of the opinion that the proceedings against

appellant must be dismissed.

4
Based on the syllabus of Atty. Maria Christina S. Sagmit
Ateneo De Davao University S.Y. 2020-2021
Digested by: Ampatuan, Ampog,Banosan,Esmael,Frias,Mahusay,Malicay,Paclibar,Peῆamante,Picot,Sinsuat,Sosoban,