Labor Review 4S

2022-2023

I. Definition of Labor Dispute

Citibank v. CA, November 27, 1998
Doctrine: Article 219 formerly 212, paragraph 1 of the Labor Code provides the definition of a "labor dispute".
It "includes any controversy or matter concerning terms or conditions of employment or the association or
representation of persons in negotiating, fixing, maintaining, changing or arranging the terms and conditions
of employment, regardless of whether the disputants stand in the proximate relation of employer and
employee."
Facts: Citibank and El Toro Security Agency entered into a contract wherein the latter obligated itself to provide
the services of security guards to safeguard and protect the former’s premises. The contract expired in 1990. In
the same year, respondent Citibank Integrated Guards Labor Alliance-SEGA-TUPAS/FSM (CIGLA) filed with the
National Conciliation and Mediation Board (NCMB) a request for preventive mediation citing Citibank as
respondent therein, giving as issues for preventive mediation the following: a) Unfair labor practice; b)
Dismissal of union officers/members; and c) Union bust. Citibank informed El Toro that it would not renew the
service agreement with the latter and also hired another security agency, Golden Pyramid Security Agency.
CIGLA filed a manifestation with the NCMB that it was converting its request for preventive mediation into a
notice of strike for failure of the parties to reach a mutually acceptable settlement of the issues. The replaced
security guards considered the non-renewal of the service agreement as constituting a lockout and/or a mass
dismissal and threatened to go on strike against Citibank and picket its premises. CIGLA filed a notice of strike
directed at the premises of the Citibank main office. Citibank filed with the RTC Makati a complaint for
injunction and damages seeking to enjoin CIGLA and any person claiming membership therein from striking or
otherwise disrupting the operations of the bank. CIGLA moved to dismiss the same, alleging that the Court had
no jurisdiction, it being a labor dispute, but was denied, as well as its motion for reconsideration (MR). CIGLA
filed with the CA a petition for certiorari with preliminary injunction. CA ruled in CIGLA's favor. Citibank's MR
was denied. Hence, the present petition wherein Citibank contends that there is no employer-employee
relationship between Citibank and the security guards represented by respondent CIGLA and that there is no
"labor dispute" in the subject controversy. The security guards were employees of El Toro security agency, not
of Citibank. Its service contract with Citibank had expired and not renewed.
Issue: W/N there was a labor dispute in this case
Ruling: NO. Article 212, paragraph 1 of the Labor Code provides the definition of a "labor dispute". It "includes
any controversy or matter concerning terms or conditions of employment or the association or representation
of persons in negotiating, fixing, maintaining, changing or arranging the terms and conditions of employment,
regardless of whether the disputants stand in the proximate relation of employer and employee."
As held by the Court, the dispute between Citibank and El Toro security agency is one regarding the
termination or non-renewal of the contract of services. This is a civil dispute. El Toro was an independent
contractor. Thus, no employer-employee relationship existed between Citibank and the security guard
members of the union in the security agency who were assigned to secure the bank's premises and property.
Hence, there was no labor dispute and no right to strike against the bank.
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PAL v. NLRC, March 20, 1998
Doctrine: The power of the NLRC to issue an injunctive writ originates from "any labor dispute.” The term
"labor dispute" is defined as "any controversy or matter concerning terms and conditions of employment or
the association or representation of persons in negotiating, fixing, maintaining, changing, or arranging the
terms and conditions of employment regardless of whether or not the disputants stand in the proximate
relation of employers and employees. There is no labor dispute when there has yet been no complaint for
illegal dismissal filed with the labor arbiter.
Facts: Private respondents Ferdinand Pineda and Godofredo Cabling, flight stewards of PAL, were dismissed by
the latter from the service for their alleged involvement in currency smuggling in Hong Kong. Aggrieved by said
dismissal, they went directly to the NLRC and filed a petition for injunction with the object of making PAL
withhold its orders of dismissal and reinstate them to work. The NLRC granted their petition.

Displeased, PAL challenged the NLRC through a motion for reconsideration questioning its jurisdiction to issue
an injunction or restraining order since this may be issued only under Article 218 of the Labor Code if the case
involves or arises from labor disputes. The NLRC denied PAL’s motion for reconsideration and upheld its
jurisdiction to issue the mandatory injunctive writ ordering PAL to withhold the enforcement of the orders of
dismissal and reinstate Pineda and Cabling.

Issue: Whether the NLRC, even without a complaint for illegal dismissal filed before the labor arbiter, entertain
an action for injunction and issue such writ?
Ruling: NO. Generally, injunction is not a cause of action in itself but merely a provisional remedy, an adjunct
to a main suit. Relative to this, the power of the NLRC to issue an injunctive writ originates from "any labor
dispute.” It is an essential requirement that there must first be a labor dispute between the contending parties
before the labor arbiter.
In the present case, there is no labor dispute between the petitioner and private respondents as there has yet
been no complaint for illegal dismissal filed with the labor arbiter by the private respondents against the
petitioner. The petition for injunction directly filed before the NLRC is in reality an action for illegal dismissal.
This is clear from the allegations in the petition which prays for their reinstatement; award of full backwages,
moral and exemplary damages; and attorney's fees. As such, the petition should have been filed with the labor
arbiter who has the original and exclusive jurisdiction to hear and decide the following cases involving all
workers, whether agricultural or non-agricultural. Thus, the NLRC exceeded its jurisdiction when it issued the
assailed order granting private respondents' petition for injunction and ordering the petitioner to reinstate
private respondents. Under the Labor Code, the ordinary and proper recourse of an illegally dismissed
employee is to file a complaint for illegal dismissal with the labor arbiter.
In the case at bar, private respondents disregarded this rule and directly went to the NLRC through a petition
for injunction praying that petitioner be enjoined from enforcing its dismissal orders. Furthermore, an
examination of private respondents' petition for injunction reveals that it has no basis since there is no
showing of any urgency or irreparable injury which the private respondents might suffer.

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San Miguel Corporation Employees Union v. Bersamira, June 13, 1990
Doctrine: A labor dispute is “any controversy or matter concerning terms and conditions of employment or the
association or representation of persons in negotiating, fixing, maintaining, changing, or arranging the terms
and conditions of employment, regardless of whether the disputants stand in the proximate relation of
employer and employee,” which is cognizable by the labor tribunals. Such dispute is still within the jurisdiction
of labor tribunals regardless of whether it is accompanied or linked by a case for damages.
Facts: San Miguel Corporation (SMC) hired independent contractors for merchandising services. The contracts
stipulated that the employees of the independent contractors were not to be considered employees by SMC.
SMC executed a Collective Bargaining Agreement (CBA) with its employees, but it stated that temporary,
probationary, and contractual workers were to be excluded from the bargaining unit.

The Union that formed out of the CBA advised SMC that some of the workers of the independent contractors
wanted to join the Union and be regularized, as some of them had been working for SMC for a number of
years, and that their work was neither casual nor seasonal.

SMC refused, so the Union filed a notice to strike on the ground of unfair labor practice, CBA violations, and
union busting, and commenced said strike. They later filed another notice to strike for unfair labor practice and
commenced another strike. Conciliatory meetings were held, but then after SMC filed an injunction against the
strike with damages with the RTC. A motion to dismiss was filed by the Union stating that the RTC had no
jurisdiction over the dispute, but it was denied by the RTC stating that the lack of an employer-employee
relationship between the Union and SMC negates the existence of a labor dispute.

Issue: Whether the RTC correctly assumed jurisdiction over the dispute. NO.

Ruling: The Supreme Court first defined what a labor dispute is and stated that it is “any controversy or matter
concerning terms and conditions of employment or the association or representation of persons in
negotiating, fixing, maintaining, changing, or arranging the terms and conditions of employment, regardless of
whether the disputants stand in the proximate relation of employer and employee."

The SC then stated that what the Union sought was to regularize the status of the employees contracted by
independent contracts and, in effect, that they be absorbed into the working unit of SMC. The Union also
wanted to be able to represent the aggrieved employees. This matter, according to the SC, dwelled on the
working relationship between said employees with respect to SMC.

SC then clarified that labor disputes are within the cognizance of the labor tribunals, as provided by the Labor
Code. SMC’s claim that this involved damages based on Art. 19-21 of the Civil Code did not deprive the labor
tribunals of this jurisdiction, as to first allow the settlement of the case for damages, which is linked to the
labor dispute, was said to result in split jurisdiction, which was “obnoxious to the administration of justice.”

SC granted the petition.

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II. Managerial Employee

Penaranda v. Bagong Plywood Corp, May 3, 2006
Doctrine:
Managerial employees and members of the managerial staff are exempted from the provisions of the Labor
Code on labor standards.
Facts:
Petitioner Charlito Peñaranda (Petitioner) was hired as an employee of Baganga Plywood Corporation (BPC) to
take charge of the operations and maintenance of its steam plant boiler. Later on, he filed a complaint for
illegal dismissal with money claims against BPC. Petitioner alleges that his services were terminated without
the benefit of due process. Furthermore, he was not paid his overtime pay.
BPC, on the other hand, claims that the separation was done pursuant to Art. 283 of the Labor Code. BPC was
on temporary closure due to repair and general maintenance. When BPC partially reopened, Petitioner failed
to reapply. BPC also argued that being a managerial employee he is not entitled to overtime pay.
The labor arbiter ruled that there was no illegal dismissal and that petitioner's Complaint was premature
because he was still employed by BPC. However they ruled in favor of the petitioner in regards to his overtime
pay.
BPC filed an appeal with the NLRC, which removed the reward for overtime pay. The reasoning was that the
petitioner was a managerial employee, hence is not entitled to the award.
Issue:
Whether petitioner is entitled to the overtime pay
Ruling:
No. Petitioner is not a managerial employee, but he is part of the managerial staff which also takes him out of
the coverage of labor standards. The Implementing Rules of the Labor Code define members of a managerial
staff as those with the following duties and responsibilities:

"(1) The primary duty consists of the performance of work directly related to management policies of the
employer;

"(2) Customarily and regularly exercise discretion and independent judgment;

"(3) (i) Regularly and directly assist a proprietor or a managerial employee whose primary duty consists of the
management of the establishment in which he is employed or subdivision thereof; or (ii) execute under
general supervision work along specialized or technical lines requiring special training, experience, or
knowledge; or (iii) execute under general supervision special assignments and tasks; andcralawlibrary

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"(4) who do not devote more than 20 percent of their hours worked in a workweek to activities which are not
directly and closely related to the performance of the work described in paragraphs (1), (2), and (3) above."

As shift engineer, petitioner's duties and responsibilities which illustrates him as a member of the managerial
staff are as follows:

1. To supply the required and continuous steam to all consuming units at minimum cost.

2. To supervise, check and monitor manpower workmanship as well as operation of boiler and accessories.

3. To evaluate performance of machinery and manpower.

4. To train new employees for effective and safety while working.

5. To recommend personnel actions such as: promotion, or disciplinary action.

On the basis of the foregoing, the Court finds no justification to award overtime pay and premium pay for rest
days to petitioner.

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III. Jurisdiction of Labor Arbiter

Pondoc v. NLRC, October 3, 1996
Doctrine: Article 218(e) of the Labor Code does not provide blanket authority to the NLRC or any of its
divisions to issue writs of injunction, while Rule XI of the New Rules of Procedure of the NRC makes injunction
only an ancillary remedy in ordinary labor disputes such as the one brought by the petitioner.
Facts: Private respondent Eulalio Pondoc is the owner-proprietor of Melleonor General Merchandise and
Hardware Supply located at Poblacion, Sindangan, Zamboanga del Norte. Respondent is engaged, among
others, in the business of buying and selling copra, rice, corn, "binangkol," junk iron and empty bottles. He has
in his employ more than twenty (20) regular workers. Andres Pondoc, legitimate husband of Natividad Pondoc,
was employed by Eulalio Pondoc as a laborer from October 1990 up to December 1991, receiving a wage rate
of P20.00 per day. He was required to work twelve (12) hours a day from 7:00 AM to 8:00 PM, Monday to
Sunday. Despite working on his rest days and holidays, he was not paid his premium pay as required by law.
Consequently, on May 14, 1992, Natividad Pondoc, on behalf of her husband, filed a complaint for salary
differential, overtime pay, 13th month pay, holiday pay and other money claims before the Sub- Regional
Arbitration Branch No. 9 of the NLRC.
The LA ruled in favor of Natividad. On the last day to perfect an appeal, Eulalio filed a Manifestation before the
LA praying that his liabilities be set-off against petitioner's alleged indebtedness to him but the LA denied it.
During the period to perfect an appeal, Eulalio also obtained a restraining order from the NRC, where he filed a
Petition for “Injunction and Damages.
● LA: There is an EER between the parties.
● NIRC: On February 28, 1994, public respondent NRC allowed compensation between petitioner's
monetary award and her alleged indebtedness to private respondent. The NRC denied the MR filed by
Nativudad. Hence, the petition for certiorari under Rule 65 of the Rules of Court wherein she pray this
Court annul the challenged decision of the NLRC.
Issue/s:
1. WON the NRC can (a) entertain a petition for injunction and damages, (b) act on the appeal from the
Labor Arbiter's denial of a claim for setoff based on an alleged indebtedness of the laborer and order of
execution of the final judgment, and (c) receive evidence and adjudge recovery on such indebtedness
and offset the Labor Arbiter's final award.
2. WON the claim for the alleged employee's indebtedness should be set up as a counterclaim before the
Labor Arbiter.
Rulings:
1. NO. The NIRC should not have entertained the private respo)(dent's separate or independent petition
for "Injunction and Damages". It was obvious that the petition was a scheme to defeat or obstruct the
enforcement of the judgment of the LA, where, in fact, a writ of execution had been issued.

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Article 218(e) of the Labor Code does not provide blanket authority to the NLRC or any of its divisions to issue
writs of injunction, while Rule XI of the New Rules of Procedure of the NRC makes injunction only an ancillary
remedy in ordinary labor disputes such as the one brought by the petitioner.
The set-off should be denied because the LA did not then have jurisdiction over the claim and such claim is not
included in those provided under paragraph (a) of Article 217 of the Labor Code, which provides the matters
that Labor Arbiters have exclusive and original jurisdiction
On the other hand, under paragraph (b) thereof, the NLRC has exclusive appellate jurisdiction over all cases
decided by the Labor Arbiters. This simply means that the NLRC does not have original jurisdiction over the
cases enumerated in paragraph (a) and that if.a claim does not fall within the exclusive original jurisdiction of
the Labor Arbiter, the NRC cannot have appellate jurisdiction thereon.
In this case, the LA did not then have jurisdiction over the claim because there is a complete want of evidence
that the indebtedness asserted by the private respondent against Andres Pondoc arose out of or was incurred
in connection with the employer-employee relationship between them. Therefore, the NRC was without
jurisdiction, either original or appellate, to receive evidence on the alleged indebtedness, render judgment
thereon, and direct that its award be set-off against the final judgment of the Labor Arbiter.
2. YES. Even assuming arguendo that the claim for the alleged indebtedness fell within the exclusive original
jurisdiction of the Labor Arbiter, it was deemed waived for not having been pleaded as an affirmative defense
or barred for not having been set up as a counterclaim before the Labor Arbiter at any appropriate time prior
to the rendition of the decision. Under the Rules of Court, which is applicable in a suppletory character in labor
cases before the Labor Arbiters or the NRC pursuant to Section 3, Rule I of the New Rules of Procedure of the
NRC, defenses which are not raised either in a motion to dismiss or in the answer are deemed waived and
counterclaims not set up in the answer are barred. Set-off or compensation is one of the modes of
extinguishing obligations and extinguishment an affirmative defense and a ground for a motion to dismiss

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Villamaria v. CA, April 19, 2006
Doctrine: The jurisdiction of Labor Arbiters and the NLRC under Art. 217 of the Labor Code is limited to
disputes arising from an employer-employee relationship which can only be resolved by reference to the Labor
Code, other labor statutes or their collective bargaining agreement. Not every dispute between an employer
and employee involves matters that only the Labor Arbiter and the NLRC can resolve in the exercise of their
adjudicatory or quasi-judicial powers. Actions between employers and employees where the
employer-employee relationship is merely incidental is within the exclusive original jurisdiction of the regular
courts. When the principal relief is to be granted under labor legislation or a collective bargaining agreement,
the case falls within the exclusive jurisdiction of the Labor Arbiter and the NLRC even though a claim for
damages might be asserted as an incident to such claim.

Facts: Petitioner Oscar Willamaria, Jr. was the owner of Villamaria Motors, a sole proprietorship engaged in
assembling passenger jeepneys with a public utility franchise to operate along the Baclaran-Sucat route. By
1995, Villamaria stopped assembling jeepneys and retained only 9, 4 of which he operated by employing
drivers on a “boundary basis.” One of the drivers was respondent Jerry Bustamante.
Bustamante remitted P450 a day to Villamaria as boundary and kept the residue of his daily earnings as
compensation for driving the vehicle. In August 1997, Villamaria verbally agreed to sell the jeepney to
Bustamante under the “boundary-hulog scheme,” where Bustamante would remit to Villarama P550 a day for
4 years. After which, Bustamante would become the owner of the jeepney. They also agreed on the
downpayment in the amount of P10,000. Both parties later executed a contract entitled “Kasunduan ng Bilihan
ng Sasakyan sa Pamamagitan ng Boundary-Hulog.” The parties further agreed on the following, among others:
(1) if Bustamante failed to pay the boundary-hulog for 3 days, Villamaria Motors would hold on to the vehicle
until Bustamante paid his arrears, including a penalty of P50 a day; (2) in case Bustamante failed to remit the
boundary-hulog for a period of 1 week, the Kasunduan would cease to have legal effect and Bustamante
should return the vehicle; (3) Bustamante will the cost of replacing any damaged or lost part of the vehicle due
to his negligence, the annual registration fees, and the insurance premium of the vehicle. In case of serious
damage, Bustamante must notify Villamaria Motors before making any repairs.
In 1999, Bustamante and other drivers who also had the same arrangement with Villamaria Motors failed to
pay their respective boundary-hulog. Hence, Villamaria served a “Paalala” reminding them of the
consequences of the failure to pay. In 2000, Villamaria took back the jeepney driven by Bustamante and barred
him from driving the said vehicle.
On Aug. 15, 2000, Bustamante filed a Complaint for Illegal Dismissal against Villamaria and his wife, Teresita.
LA: rendered judgment in favor of spouses Villamaria
NLRC: dismissed the appeal for lack of merit. NLRC further ruled that under the Kasunduan, the juridical
relationship between Bustamante and Villamaria was that of vendor-vendee, hence, the LA had no jurisdiction
over the complaint
CA: reversed the NLRC ruling. It ruled that the LA had jurisdiction over Bustamante’s complaint. Under the
Kasunduan, the relationship between the parties was dual: vendor-vendee and employer-employee.

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Issue:
1. Whether the existence of a boundary-hulog agreement negates the employer-employee relationship
between the vendor and vendee? NO
2. Whether the LA has jurisdiction over a complaint for illegal dismissal in such case? YES
Ruling:
1. No, the juridical relationship of employer-employee was not negated by the stipulations in the
Kasunduan, considering that petitioner retained control over respondent’s conduct as driver of the
vehicle.

Neither is such juridical relationship negated by petitioner’s claim that the terms and conditions in the
Kasunduan relative to respondent’s behavior and deportment as driver was for his and respondent’s
benefit: to insure that respondent would be able to pay the requisite daily installment of P550, and that
the vehicle would still be in good condition despite the lapse of 4 years. What is primordial is that
petitioner retained control over the conduct of the respondent as driver of the jeepney.

Indeed, petitioner as the owner of the vehicle and the holder of the franchise, is entitled to exercise
supervision and control over the respondent, by seeing to it that the route provided in his franchise,
and the rules and regulations of the Land Transportation Regulatory Board are duly complied with.

2. Yes, Art. 217 of the Labor Code, as amended, vests on the Labor Arbiters exclusive jurisdiction over the
cases listed under said provision. In those cases, an employer-employee relationship is an indispensable
jurisdictional requisite. The jurisdiction of Labor Arbiters and the NLRC under Art. 217 of the Labor
Code is limited to disputes arising from an employer-employee relationship which can only be resolved
by reference to the Labor Code, other labor statutes or their collective bargaining agreement. Not every
dispute between an employer and employee involves matters that only the Labor Arbiter and the NLRC
can resolve in the exercise of their adjudicatory or quasi-judicial powers. Actions between employers
and employees where the employer-employee relationship is merely incidental is within the exclusive
original jurisdiction of the regular courts. When the principal relief is to be granted under labor
legislation or a collective bargaining agreement, the case falls within the exclusive jurisdiction of the
Labor Arbiter and the NLRC even though a claim for damages might be asserted as an incident to such
claim.

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Mendoza v. Officers of Manila Water Employee’s Union, January 25,
2016 (ULP)
Doctrine:
It is true that some of the petitioner's causes of action constitute intra-union cases cognizable by the BLR
under Article 226 of the Labor Code. However, petitioner's charge of unfair labor practices falls within the
original and exclusive jurisdiction of the Labor Arbiters, pursuant to Article 217 of the Labor Code. In addition,
Article 247 of the same Code provides that "the civil aspects of all cases involving unfair labor practices, which
may include claims for actual, moral, exemplary and other forms of damages, attorney's fees and other
affirmative relief, shall be under the jurisdiction of the Labor Arbiters."
Facts:

Mendoza was informed by the Union that they were not able to deduct the increased amount of union dues to
his salary and requested that he pay the same. Upon failure to pay, he was charged with non-payment of dues
and imposed upon him a penalty of suspension for 30 days. Petitioner wrote to the union with the intention of
filing an appeal to the imposed penalty with the General Membership Assembly but the same was denied on
the ground that the prescribed period for appeal had expired. Petitioner wrote another letter reiterating their
arguments and demanding that the General Membership Assembly be convened in order for their appeal to be
taken up but the same was not acted upon. He was then charged for a second time with non-payment of union
fees to which his appeal was likewise denied. Due to this suspension, Mendoza was then disqualified in
running for office within the union for not being a member in good standing. In addition to this, he was
charged for the third time with nonpayment of union fees. However, this time, he was meted with the penalty
of expulsion from the union. Mendoza joined a new union and was elected president of the same. The MWEU
leadership submitted a proposed CBA which contained provisions to the effect that in the event of
retrenchment, non-MWEU members shall be removed first, and that upon the signing of the CBA, only MWEU
members shall receive a signing bonus; and threatened members of the MWEU that they would not get
benefits from the CBA if they left the union.

Mendoza filed a complaint with the Labor Arbiter (LA) against the respondent union and its members for unfair
labor practice, illegal termination, unlawful interference, coercion, and violation of the rights of employees to
self-organization, as well as discrimination against non MWEU employees through the proposal in the CBA.
Respondents aver that the LA did not have jurisdiction over the dispute as it was intra-union in nature and
should thus fall upon the jurisdiction of the Bureau of Labor Relations. The LA ruled in favor of the respondents
referring the dispute back to Union level for the General Membership Assembly to act on the appeal of the
petitioner. Petitioner appealed before the NLRC which also sustained the decision of the LA. The CA likewise
affirmed the decision of the NLRC when it disposed of the petition for certiorari filed before it by the
petitioners. Hence the present petition for review on certiorari assailing the decision of the CA.

Petitioners mainly argue that the respondents are guilty of unfair labor practices and that the LA, NLRC, and CA
failed to rule on the same and instead dismissed the same on the ground that the cause of action of the
petitioner was intra union in nature and is thus within the jurisdiction of the BLR.
Issue: Whether the Labor Arbiter was correct in dismissing the complaint for lack of jurisdiction.
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Ruling:

No. The SC ruled in favor of the petitioner. While it agreed with the lower tribunals that the causes of action of
the petitioner were intra union in nature and is thus under the jurisdiction of the BLR, the petitioner's charge
of unfair labor practices falls within the original and exclusive jurisdiction of the Labor Arbiters, pursuant to
Article 217 of the Labor Code. In addition, Article 247 of the same Code provides that "the civil aspects of all
cases involving unfair labor practices, which may include claims for actual, moral, exemplary and other forms
of damages, attorney's fees and other affirmative relief, shall be under the jurisdiction of the Labor Arbiters."

The SC pointed out that the petitioner had laid down and substantiated its contention of unfair labor practice
committed by the respondent union but the same was ignored by the lower tribunals and was dismissed for
simply being intra union in nature. The SC noted that Mendoza filed a timely appeal upon notice of his
suspension but the same was not acted upon by the Executive Board. Because respondents did not act on his
two appeals, petitioner was unceremoniously suspended, disqualified and deprived of his right to run for the
position of MWEU Vice-President in the September 14, 2007 election of officers, expelled from MWEU, and
forced to join another union, WATER-AFWC. For these, respondents are guilty of unfair labor practices under
Article 249 (a) and (b) — that is, violation of petitioner's right to self-organization, unlawful discrimination, and
illegal termination of his union membership — which case falls within the original and exclusive jurisdiction of
the Labor Arbiters, in accordance with Article 217 of the Labor Code.

WHEREFORE, the Petition is PARTIALLY GRANTED. The assailed April 24, 2012 Decision of the Court of Appeals
in CA-G.R. SP No. 115639 is hereby MODIFIED, in that all of the respondents — except for Carlos Villa, Ric
Briones, and Chito Bernardo — are declared guilty of unfair labor practices and ORDERED TO INDEMNIFY
petitioner Allan M. Mendoza the amounts of P100,000.00 as and by way of moral damages, P50,000.00 as
exemplary damages, and attorney's fees equivalent to 10 per cent (10%) of the total award.

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Atlas Farms v. NLRC, November 18, 2002 (Termination Dispute)
Doctrine: Art 217 (224) of LCP provides that labor arbiters have original and exclusive jurisdiction over
termination disputes, except that provided in Article 261 (274), wherein cases involve unresolved grievances
arising from the interpretation or implementation of the CBA and those arising from the interpretation or
enforcement of Atlas personnel policies.
Facts: Two employees of Atlas Farms, Inc. (Atlas), Jaime O. Dela Peña and Marcial I. Abion, each filed a
complaint for illegal dismissal. Dela Peña, a former veterinary aide and feedmill operator of Atlas, was
dismissed for refusing to comply with the farm manager after Dela Peña was allegedly caught urinating and
defecating on Atlas property not intended for the purpose; while Abion, carpenter/mason and maintenance
man, was dismissed also for not complying with orders after having clogged fishpond drainage. [they failed to
explain their reasons]
The Labor Arbiter dismissed their complaints on the ground that the grievance machinery in the CBA had not
yet been exhausted. They then availed of the grievance process, but later on re-filed the case before the NLRC,
and alleged "lack of sympathy" on Atlas’s part to engage in conciliation proceedings. Atlas filed a motion to
dismiss, on the ground of lack of jurisdiction, alleging Dela Peña and Abion themselves admitted that they
were members of the employees’ union with which Atlas had an existing CBA with. According to Atlas,
jurisdiction over the case belonged to the grievance machinery and thereafter the voluntary arbitrator, as
provided in the CBA.
LA dismissed the complaint for lack of merit, finding that the case was one of illegal dismissal and did not
involve the interpretation or implementation of any CBA provision. He stated that Article 217(c) [224] of LCP
was inapplicable to the case.
Issue: Whether or not the Labor Arbiter and NLRC has jurisdiction over the cases.
Ruling: Yes, there was no error in upholding the jurisdiction of LA and NLRC. Art 217 (224) of LCP provides that
labor arbiters have original and exclusive jurisdiction over termination disputes. A possible exception is
provided in Article 261 (274), wherein cases involve unresolved grievances arising from the interpretation or
implementation of the CBA and those arising from the interpretation or enforcement of Atlas personnel
policies.

Pursuant to Art 260 (273) of LCP, the parties to a CBA shall name or designate their respective representatives
to the grievance machinery and if the grievance is unsettled in that level, it shall automatically be referred to
the voluntary arbitrators designated in advance by the parties to a CBA. Consequently only disputes involving
the union and Atlas shall be referred to the grievance machinery or voluntary arbitrators. In these termination
cases, the union had no participation, having failed to object to the dismissal of the employees concerned by
the petitioner. It is obvious that arbitration without the union’s active participation on behalf of the dismissed
employees would be pointless, or even prejudicial to their cause.

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Negros Metal v. Lamayo, August 25, 2010 (Termination Dispute)
Doctrine: Under Art. 217, it is clear that a labor arbiter has original and exclusive jurisdiction over termination
disputes. On the other hand, under Article 261, a voluntary arbitrator has original and exclusive jurisdiction
over grievances arising from the interpretation or enforcement of company policies. As a general rule then,
termination disputes should be brought before a labor arbiter, except when the parties, under Art. 262,
unmistakably express that they agree to submit the same to voluntary arbitration.
Facts: Armelo J. Lamayo (respondent) began working for Negros Metal Corporation (petitioner or the
company) in September 1999 as a machinist. Sometime in May 2002, while respondent was at the company's
foundry grinding some tools he was using, William Uy, Sr. (Uy), company manager, called his attention why he
was using the grinder there to which he replied that since the machine there was bigger, he would finish his
work faster. Respondent's explanation was found unsatisfactory, hence, he was, via memorandum, charged of
loitering and warned. 1 Taking the warning as a three-day suspension as penalized under company rules,
respondent reported for work after three days, only to be meted with another 10-day suspension 2 — from
May 30 to June 10, 2002, for allegedly failing to sign the memorandum suspending him earlier. After serving
the second suspension, respondent reported for work on June 11, 2002 but was informed by Uy that his
services had been terminated and that he should draft his resignation letter, drawing respondent to file on
June 17, 2002 a complaint 3 for illegal dismissal.
In lieu of a position paper, petitioner submitted a Manifestation 4 contending that the complaint should be
dismissed because the Labor Arbiter had no jurisdiction over it since, under their Collective Bargaining
Agreement 5 (CBA), such matters must first be brought before the company's grievance machinery.
The Labor Arbiter, brushing aside petitioner's position, held that respondent was illegally dismissed. The
National Labor Relations Commission (NLRC), by Resolution 7 of March 30, 2006, set aside the ruling of, and
remanded the case to, the Labor Arbiter for disposition based on the company's grievance procedure. By
Decision 9 of March 25, 2008, the appellate court set aside the NLRC Resolutions and reinstated the Labor
Arbiter's Decision. It held that the Labor Arbiter had jurisdiction to hear the complaint; that as respondent's
dismissal did not proceed from the parties' interpretation of or implementation of the CBA, it is not covered by
the grievance machinery procedure; that the laws and rules governing illegal dismissal are not to be found in
the parties' CBA but in the labor statutes, hence, the Labor Arbiter had jurisdiction;
Issue: Whether Lamayo was illegally terminated.
Ruling: No. ​Articles 217, 261, and 262 of the Labor Code outline the jurisdiction of labor arbiters and voluntary
arbitrators as follows:
Art. 217. Jurisdiction of the Labor Arbiters and the Commission. — (a) Except as otherwise provided under this
Code, the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty (30)
calendar days after the submission of the case by the parties for decision without extension, even in the
absence of stenographic notes, the following cases involving all workers, whether agricultural or
non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes; xxx xxx xxx

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Art. 261. Jurisdiction of Voluntary Arbitrators or panel of Voluntary Arbitrators. — The Voluntary Arbitrator or
panel of Voluntary Arbitrators shall have original and exclusive jurisdiction to hear and decide all unresolved
grievances arising from the interpretation or implementation of the Collective Bargaining Agreement and
those arising from the interpretation or enforcement of company personnel policies referred to in the
immediately preceding article. Accordingly, violations of a Collective Bargaining Agreement, except those
which are gross in character, shall no longer be treated as unfair labor practice and shall be resolved as
grievances under the Collective Bargaining Agreement. For purposes of this article, gross violations of
Collective Bargaining Agreement shall mean flagrant and/or malicious refusal to comply with the economic
provisions of such agreement. xxx xxx xxx
ART. 262. Jurisdiction over other labor disputes. — The Voluntary Arbitrator or panel of Voluntary Arbitrators,
upon agreement of the parties, shall also hear and decide all other labor disputes including unfair labor
practices and bargaining deadlocks. (emphasis and underscoring supplied)
Under Art. 217, it is clear that a labor arbiter has original and exclusive jurisdiction over termination disputes.
On the other hand, under Article 261, a voluntary arbitrator has original and exclusive jurisdiction over
grievances arising from the interpretation or enforcement of company policies. As a general rule then,
termination disputes should be brought before a labor arbiter, except when the parties, under Art. 262,
unmistakably express that they agree to submit the same to voluntary arbitration.
In the present case, the CBA provision on grievance machinery being invoked by petitioner does not expressly
state that termination disputes are included in the ambit of what may be brought before the company's
grievance machinery. Thus, the pertinent provision in the parties' CBA reads:
Article IV GRIEVANCE MACHINERY Section 1. The parties hereto agree on principle that all disputes between
labor and management may be settled through friendly negotiations that the parties have the same interest in
the continuity of work until all points in dispute shall have been discussed and settled. . . . For this purpose, a
grievance is defined as any disagreement between the UNION and the EMPLOYER or between a worker or
group of workers on one hand and the EMPLOYER on the one hand as to the application and interpretation
of any of the provisions of this contract. Other matters subject of collective bargaining or regulated by existing
labor laws shall not be considered as grievances.
Even assuming, however, that the suspension of an employee may be considered as a "disagreement" which
bears on the "application and interpretation of any of the provisions" of the CBA, respondent could not have
bound himself to bring the matter of his suspension to grievance procedure or voluntary arbitration in light of
the documented fact that he had resigned from the union more than a year before his suspension, not to
mention the fact that he denied having a hand in the preparation of the union president Ronquillo's letter
invoking the grievance procedure. In fine, the labor tribunal had original and exclusive jurisdiction over
respondent's complaint for illegal dismissal.
On the merits, as did the appellate court, the Court sustains the Labor Arbiter's ruling that respondent was
illegally dismissed absent a showing that he was accorded due process when he was summarily terminated.

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Vivero v. CA, October 24, 2000 (Termination Dispute)
Doctrine: A termination dispute is under the original and exclusive jurisdiction of the Labor Arbiter, and does
not specifically involve the application, implementation or enforcement of company personnel policies as in this
case.
Facts:
Petitioner Vivero, a licensed seaman, is a member of the Associated Marine Officers and Seamen's Union of
the Philippines (AMOSUP). On grounds of very poor performance and conduct, refusal to perform his job,
refusal to report to the Captain or the vessel's Engineers or cooperate with other ship officers about the
problem in cleaning the cargo holds or of the shipping pump and his dismal relations with the Captain of the
vessel, complainant was repatriated on 15 July 1994.
On 01 August 1994, complainant filed a complaint for illegal dismissal at AMOSUP of which complainant was a
member. Pursuant to Article Xl of the Collective Bargaining Agreement, grievance proceedings were
conducted; however, parties failed to reach and settle the dispute amicably, thus, on 28 November 1994,
complainant filed the complaint with the POEA. While the case was pending before the POEA, private
respondents filed a Motion to Dismiss on the ground that the POEA had no jurisdiction over the case
considering petitioner Vivero's failure to refer it to a Voluntary Arbitration Committee in accordance with the
CA between the parties. Upon the enactment of RA 8042, the Migrant Workers and Overseas Filipinos Act of
1995, the case was transferred to the Adjudication Branch of the National Labor Relations Commission. Labor
Arbiter, on the basis of the pleadings and documents available on record, rendered a decision dismissing the
complaint for want of jurisdiction. NLRC set aside the decision of the Labor Arbiter on the ground that the
record was clear that petitioner had exhausted his remedy by submitting his case to the Grievance Committee
of AMOSUP. NRC then remanded the case to the Labor Arbiter for further proceedings. On 3 July 1998 the MR
of the private respondent was denied, thus it raised the case to the CA. Court of Appeals ruled in favor of
private respondents holding that the CA is the law between the parties and compliance therewith is mandated
by the express policy of the law.
Hence petition for review was filed by the herein petitioner.
Issue:
Whether the NRC is deprived of jurisdiction over illegal dismissal cases whenever a CBA provides for grievance
machinery and voluntary arbitration proceedings.
Ruling: No, because termination disputes/illegal dismissal cases are not a grievable issue.
The instant case is a termination dispute falling under the original and exclusive jurisdiction of the Labor
Arbiter, and does not specifically involve the application, implementation or enforcement of company
personnel policies contemplated in Policy Instruction No. 56. Consequently, Policy Instruction No. 56 does not
apply in the case at bar.
It is clear from the claim/assistance request form submitted by petitioner to AMOSUP that he was challenging
the legality of his dismissal for lack of cause and lack of due process. The issue of whether there was proper
interpretation and implementation of the CA provisions comes into play only because the grievance procedure
provided for in the CBA was not observed after he sought his Union's assistance in contesting his termination.
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Thus, the question to be resolved necessarily springs from the primary issue of whether there was a valid
termination; without this, then there would be no reason to invoke the need to interpret and implement the
BA provisions properly.
Under their CBA, both Union and respondent companies are responsible for selecting an impartial arbitrator or
for convening an arbitration committee; yet, it is apparent that neither made a move towards this end.
Consequently, petitioner should not be deprived of his legitimate recourse because of the refusal of both
Union and respondent companies to follow the grievance procedure.
Under Article 262, the Voluntary Arbitrator may assume jurisdiction only when agreed upon by the parties.
Policy Instructions No. 56 issued by DOLE Secretary Confesor clarifying the jurisdiction of Labor Arbiters and
Voluntary Arbitrations does not apply. It reiterated that dismissal is not a grievable issue.

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University of Immaculate Concepcion v. NLRC, January 26, 2011
(Termination Dispute)
Doctrine:

Confidential employees should be excluded from the bargaining unit and disqualified from joining any union:
employees should not be placed in a position involving a potential conflict of interests.

Facts:
UIC is a non-stock, non-profit educational institution. Private respondent [the Union] is the certified sole
bargaining agent of UIC’s rank and file employees. On 20 June 1994, the Union filed a notice of strike on the
grounds of bargaining deadlock and unfair labor practice. On 20 July 1994, the National Conciliation and
Mediation Board (NCMB) called the parties to a conference where they agreed that an increase be granted to
the workers in the amount equivalent to: seventy-five percent (75%) of increment on the tuition fee for the
first year, eighty percent (80%) for the second year, and eighty percent (80%) for the third year.
On the same occasion, the UIC demanded the exclusion of secretaries, registrars, accounting personnel and
guidance counselors from the bargaining unit, on account of their being confidential employees. When the
parties agreed to submit this particular issue to voluntary arbitration, the arbitration panel sustained the UIC
on 08 November 1994. The Union’s motion for reconsideration thereto was denied by the arbitration panel on
08 February 1995.
Accordingly, the UIC gave the affected employees the option to choose between keeping their positions or
resigning from the Union. When they elected to keep both their positions and their union membership, UIC
sent them notices of termination on 21 February 1995, which led into a notice of strike filed by the Union on
10 March 1995. UIC cites willful disobedience and "loss of confidence" as the grounds for dismissing the
Respondent Employees.

Issue:
Whether or not a confidential employee’s refusal to vacate his or her union membership is a valid ground for
dismissal

Ruling:
As a preliminary matter, we clarify that the issue of whether or not the Respondent Employees are confidential
employees has long been settled and its reexamination is already barred by res judicata. In VA Case No. XI-354-
02-94 (the "Arbitration Case"), the panel of voluntary arbitrators had already determined that the Respondent
Employees are confidential employees who must be excluded from the bargaining unit. The just causes for
terminating an employee, confidential or not, are enumerated in Article 282 of the Labor Code.
Generally, employers are given wide latitude in terminating the services of employees who perform functions
which by their nature require the employer's full trust and confidence. To constitute a valid ground for

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dismissal, it is sufficient that there be some reasonable basis, supported by substantial evidence, for such loss
of confidence. Nonetheless, employers do not have unbridled authority to dismiss employees by simply
invoking Article 282(c). The loss of confidence must be genuine and cannot be used as a subterfuge for causes
which are illegal, improper and unjust.
The Court held that the willful act of refusing to leave the Union is sufficient basis for UIC to lose its trust and
confidence on Respondent Employees. There was just cause for dismissing the Respondent Employees. This
conclusion follows the same reasoning why the Court finally adopted the doctrine that confidential employees
should be excluded from the bargaining unit and disqualified from joining any union: employees should not be
placed in a position involving a potential conflict of interests.
If Respondent Employees were allowed to retain their union membership, UIC would not be assured of their
loyalty because of the apparent conflict between the employees’ personal interests and their duty as
confidential employees. Such a result is likely to create an atmosphere of distrust between UIC and the
confidential employees, and it would be nigh unreasonable to compel UIC to continue in employment persons
whom it no longer trusts to handle delicate matters.

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Austria v. NLRC, August 16, 1999 (Termination Dispute) (priest)
Doctrine:

An ecclesiastical affair is "one that concerns doctrine, creed, or form of worship of the church, or the adoption
and enforcement within a religious association of needful laws and regulations for the government of the
membership, and the power of excluding from such associations those deemed unworthy of membership."
Based on this definition, an ecclesiastical affair involves the relationship between the church and its members
and relate to matters of faith, religious doctrines, worship and governance of the congregation. To be concrete,
examples of this so-called ecclesiastical affairs to which the State cannot meddle are proceedings for
excommunication, ordinations of religious ministers, administration of sacraments and other activities with
attached religious significance.
The case at bar does not concern an ecclesiastical or purely religious affair as to bar the State from taking
cognizance of the same. While the matter at hand relates to the church and its religious minister it does not
ipso facto give the case a religious significance. Simply stated, what is involved here is the relationship of the
church as an employer and the minister as an employee. It is purely secular and has no relation whatsoever
with the practice of faith, worship or doctrines of the church. In this case, petitioner was not excommunicated
or expelled from the membership of the SDA but was terminated from employment. Indeed, the matter of
terminating an employee, which is purely secular in nature, is different from the ecclesiastical act of expelling a
member from the religious congregation.

Facts:
Private Respondent Central Philippine Union Mission Corporation of the Seventh-Day Adventists (SDA) is a
religious corporation represented in this case by the other private respondents, officers of the SDA. Petitioner
Dionisio V. Austria was a district pastor of the SDA until his services were terminated.
Petitioner was asked to admit accountability and responsibility for the church tithes and offerings collected by
his wife, Mrs. Thelma Austria. Petitioner refused since it was private respondents Pastor Gideon Buhat and Mr.
Eufronio Ibesate who authorized his wife to collect.
Thereafter, petitioner went to the office of Pastor Buhat, the president of the Negros Mission to persuade him
to convene the Executive Committee to settle his dispute with private respondent Pastor David Rodrigo. Pastor
Buhat denied the request since some committee members were out of town and there was no quorum.
Thereafter, the two exchanged heated arguments.
A fact-finding committee was created to investigate petitioner. Petitioner later received a letter of dismissal
citing misappropriation of denominational funds, willful breach of trust, serious misconduct, gross and
habitual neglect of duties, and commission of an offense against the person of employers duly authorized
representative, as grounds for the termination of his services.
Petitioner then filed a complaint before the Labor Arbiter for illegal dismissal against the SDA and its officers
and prayed for reinstatement with backwages and benefits, moral and exemplary damages and other labor law
benefits.

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LA/RTC/NLRC RULING:
Labor Arbiter Cesar D. Sideo rendered a decision in favor of petitioner ordering respondents to immediately
reinstate complainant Pastor Dionisio Austria to his former position
The NLRC initially vacated the findings of the Labor Arbiter and dismissed the case for want of merit. However,
upon a motion for reconsideration, the NLRC reinstated the decision of the Labor Arbiter. The NLRC, without
ruling on the merits of the case, reversed itself once again, sustained the argument posed by private
respondents that the Labor Arbiter has no jurisdiction over the complaint filed by petitioner due to the
constitutional provision on the separation of church and state since the case allegedly involved and
ecclesiastical affair to which the State cannot interfere. and, accordingly, dismissed the complaint of petitioner.
APPEAL TO THE SC:
Petition for certiorari under Rule 65 assailing the dismissal of the case for illegal dismissal filed by petitioner
against private respondents for lack of jurisdiction.
Respondent's Contention:
Private respondents contend that by virtue of the doctrine of separation of church and state, the Labor Arbiter
and the NLRC have no jurisdiction to entertain the complaint filed by petitioner. Since the matter at bar
allegedly involves the discipline of a religious minister, it is to be considered a purely ecclesiastical affair to
which the State has no right to interfere.

Issue:
1. Whether or not the termination of the services of petitioner is an ecclesiastical affair, and, as such, involves
the separation of church and state.
2. Whether or not such termination is valid.
Ruling:

1. No. The case at bar does not concern an ecclesiastical or purely religious affair as to bar the State from
taking cognizance of the same.
An ecclesiastical affair is one that concerns doctrine, creed, or form or worship of the church, or the adoption
and enforcement within a religious association of needful laws and regulations for the government of the
membership, and the power of excluding from such associations those deemed unworthy of membership.
Based on this definition, an ecclesiastical affair involves the relationship between the church and its members
and relate to matters of faith, religious doctrines, worship and governance of the congregation. To be concrete,
examples of this so-called ecclesiastical affairs to which the State cannot meddle are proceedings for
excommunication, ordinations of religious ministers, administration of sacraments and other activities with
which attached religious significance. The case at bar does not even remotely concern any of the abovecited
examples. While the matter at hand relates to the church and its religious minister it does not ipso facto give
the case a religious significance. Simply stated, what is involved here is the relationship of the church as an

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employer and the minister as an employee. It is purely secular and has no relation whatsoever with the
practice of faith, worship or doctrines of the church.
It is clear that when the SDA terminated the services of petitioner, it was merely exercising its management
prerogative to fire an employee which it believes to be unfit for the job. As such, the State, through the Labor
Arbiter and the NLRC, has the right to take cognizance of the case and to determine whether the SDA, as
employer, rightfully exercised its management prerogative to dismiss an employee. This is in consonance with
the mandate of the Constitution to afford full protection to labor.

Under the Labor Code, the provision which governs the dismissal of employees, is comprehensive enough to
include religious corporations, such as the SDA, in its coverage. Article 278 of the Labor Code on
post-employment states that "the provisions of this Title shall apply to all establishments or undertakings,
whether for profit or not." Obviously, the cited article does not make any exception in favor of a religious
corporation.

2. NO. Petitioner was terminated from service without just or lawful cause.
The requisites for a valid dismissal are: (a) the employee must be afforded due process, i.e., he must be given
an opportunity to be heard and to defend himself, and; (b) the dismissal must be for a valid cause as provided
in Article 282 of the Labor Code. Without the concurrence of this twin requirements, the termination would, in
the eyes of the law, be illegal.
Before the services of an employee can be validly terminated, Article 277 (b) of the Labor Code and Section 2,
Rule XXIII, Book V of the Rules Implementing the Labor Code further require the employer to furnish the
employee with two (2) written notices, to wit: (a) a written notice served on the employee specifying the
ground or grounds for termination, and giving to said employee reasonable opportunity within which to
explain his side; and, (b) a written notice of termination served on the employee indicating that upon due
consideration of all the circumstances, grounds have been established to justify his termination.
Private respondent failed to substantially comply with the above requirements. With regard to the first notice,
the letter which notified petitioner and his wife to attend the meeting cannot be construed as the written
charge required by law. The said letter never categorically stated the particular acts or omissions on which
petitioner's impending termination was grounded. In fact, the letter never even mentioned that petitioner
would be subject to investigation.
While admittedly, private respondents complied with the second requirement, the notice of termination, this
does not cure the initial defect of lack of the proper written charge required by law.
In the letter of termination, private respondents enumerated the following as grounds for the dismissal of
petitioner, namely: misappropriation of denominational funds, willful breach of trust, serious misconduct,
gross and habitual neglect of duties, and commission of an offense against the person of employer's duly
authorized representative.

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a. The validity of the dismissal based on the ground of willful breach of trust cannot be sustained.
Settled is the rule that under Article 282 (c) of the Labor Code, the breach of trust must be willful. A breach is
willful if it is done intentionally, knowingly and purposely, without justifiable excuse, as distinguished from an
act done carelessly, thoughtlessly, heedlessly or inadvertently. It must rest on substantial grounds and not on
the employer's arbitrariness, whims, caprices or suspicion; otherwise, the employee would eternally remain at
the mercy of the employer.
The records show that there were only six (6) instances when petitioner personally collected and received from
the church treasurers the tithes, collections, and donations for the church. The stenographic notes of the
Auditor and a witness for private respondents, show that Pastor Austria was able to remit all his collections to
the treasurer.
b. The grounds of serious misconduct and commission of an offense against the person of the employer’s duly
authorized representative are unmeritorious and do not warrant petitioner’s dismissal from the service.
Misconduct has been defined as improper or wrong conduct. It is the transgression of some established and
definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent
and not mere error in judgment. For misconduct to be considered serious it must be of such grave and
aggravated character and not merely trivial or unimportant. Based on this standard, the act of petitioner in
banging the attaché case on the table, throwing the telephone and scattering the books in the office of Pastor
Buhat, although improper, cannot be considered as grave enough to be considered as serious misconduct.
After all, though petitioner committed damage to property, he did not physically assault Pastor Buhat or any
other pastor.
c. Petitioner did not commit gross and habitual neglect of duties.
Private respondents failed to prove culpability on the part of petitioner. Petitioner's rise from the ranks
disclose that he was actually a hard-worker. Private respondents' evidence, which consisted of petitioner's
Worker's Reports, revealed how petitioner travelled to different churches to attend to the faithful under his
care. Indeed, he labored hard for the SDA, but, in return, he was rewarded with a dismissal from the service for
a non-existent cause.

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Reyes v. RTC Makati Branch 42, August 11, 2008 (Termination Dispute)
Doctrine:

To determine whether a case involves an intra-corporate controversy, and is to be heard and decided by the
branches of the RTC specifically designated by the Court to try and decide such cases, two elements must
concur: (a) the status or relationship of the parties (relationship test); and (2) the nature of the question that is
the subject of their controversy (nature of the controversy test.)

Facts:

Oscar and private respondent Rodrigo C. Reyes (Rodrigo) are the children of the spouses Pedro and Anastacia
Reyes. Pedro, Anastacia, Oscar, and Rodrigo each owned shares of stock of Zenith Insurance Corporation
(Zenith). Spouses Pedro and Anastacia died. Although Pedro’s estate was judicially partitioned among his heirs,
no similar settlement and partition appear to have been made with Anastacia’s estate, which included her
shareholdings in Zenith.

Zenith and Rodrigo filed a derivative suit with SEC (now RTC) against Oscar in order to obtain an accounting of
the funds and assets of Zenith which are now in the possession of Oscar and to determine the shares of stock
of deceased spouses that were arbitrarily and fraudulently appropriated by Oscar for himself and which were
not collated and taken into account in the partition, distribution, and/or settlement of the estate.

When Republic Act (R.A.) No. 8799P.D.) No. 902-A was transferred to the RTC designated as a special
commercial court. The records of Rodrigo's SEC case were thus turned over to the RTC, Branch 142, Makati,
and docketed as Civil Case No. 00-1553.)

Oscar filed a Motion to Declare Complaint as Nuisance or Harassment Suit. He claimed that the complaint is a
mere nuisance or harassment suit and should, according to the Interim Rules of Procedure for Intra-Corporate
Controversies, be dismissed; and that it is not a bona fide derivative suit as it partakes of the nature of a
petition for the settlement of estate of the deceased Anastacia that is outside the jurisdiction of a special
commercial court.

RTC denied the motion as to the action for determination of the shares of stock of deceased allegedly taken by
Oscar, its accounting and the corresponding delivery of these shares since it is not a derivative suit and should
properly be threshed out in a petition for settlement of estate. However, the action with respect to the
derivative suit for accounting of the funds and assets of the corporation which are in the control, custody,
and/or possession of the Oscar was not dismissed and was taken cognizance of by RTC.

The CA affirmed the RTC.

Issue:
Whether the trial court, sitting as a special commercial court, has jurisdiction over the subject matter of
Rodrigo's complaint.
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Ruling:

NO. To determine whether a case involves an intra-corporate controversy, and is to be heard and decided by
the branches of the RTC specifically designated by the Court to try and decide such cases, two elements must
concur: (a) the status or relationship of the parties (relationship test); and (2) the nature of the question that is
the subject of their controversy (nature of the controversy test.)

The first element requires that the controversy must arise out of intra-corporate or partnership relations
between any or all of the parties and the corporation, partnership, or association of which they are
stockholders, members or associates; between any or all of them and the corporation, partnership, or
association of which they are stockholders, members, or associates, respectively; and between such
corporation, partnership, or association and the State insofar as it concerns their individual franchises. The
second element requires that the dispute among the parties be intrinsically connected with the regulation of
the corporation. If the nature of the controversy involves matters that are purely civil in character, necessarily,
the case does not involve an intra-corporate controversy.

The transfer of title by means of succession, though effective and valid between the parties involved (i.e.,
between the decedent's estate and her heirs), does not bind the corporation and third parties. The transfer
must be registered in the books of the corporation to make the transferee-heir a stockholder entitled to
recognition as such both by the corporation and by third parties.

Rodrigo must, therefore, hurdle two obstacles before he can be considered a stockholder of Zenith with
respect to the shareholdings originally belonging to Anastacia. First, he must prove that there are
shareholdings that will be left to him and his co-heirs, and this can be determined only in a settlement of the
decedent's estate. No such proceeding has been commenced to date. Second, he must register the transfer of
the shares allotted to him to make it binding against the corporation. He cannot demand that this be done
unless and until he has established his specific allotment (and prima facie ownership) of the shares. Without
the settlement of Anastacia's estate, there can be no definite partition and distribution of the estate to the
heirs. Without the partition and distribution, there can be no registration of the transfer. And without the
registration, we cannot consider the transferee-heir a stockholder who may invoke the existence of an
intra-corporate relationship as premise for an intra-corporate controversy within the jurisdiction of a special
commercial court.

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Locsin v. Nissan Lease Philippines October 20, 2010 (Intracorporate
dispute)

Doctrine:
A corporate officer’s dismissal is always a corporate act, or an intra-corporate controversy which arises
between a stockholder and a corporation so that RTC should exercise jurisdiction based on Section 5(c) of PD
902-A.
Facts:

Locsin was elected Executive Vice President and Treasurer (EVP/Treasurer) of NCLPI. Locsin held thisposition
for 13 years, having been re-elected every year since 1992, until January 21, 2005, when he was nominated
and elected Chairman of NCLPI’s Board of Directors. A little over seven (7) months after his election as
Chairman of the Board, the NCLPI Board held a special meeting at the Manila Polo Club. One of the items of
the agenda was the election of a new set of officers. Locsin was neither re-elected Chairman nor reinstated to
his previous position as EVP/Treasurer.

Locsin filed a complaint for illegal dismissal with prayer for reinstatement, payment of backwages, damages
andattorney’s fees before the Labor Arbiter against NCLPI and Banson, who was then President of NCLPI.
Instead of filing their position paper, NCLPI and Banson filed a Motion to Dismiss, on the ground that the Labor
Arbiter did not have jurisdiction over the case since the issue of Locsin’s removal as EVP/Treasurer involves an
intra-corporate dispute.

Petitioner’s contention: Locsin submits that he is a regular employee of NCLPI since - as he argued before the
Labor Arbiter and the CA - his relationship with the company meets the "four-fold test." He concludes that
theLabor Arbiter and the NLRC – not the RTC (as NCLPI posits) – has jurisdiction to decide the controversy.

Respondent’s contention: Nissan submits that the CA correctly ruled that the Labor Arbiter does not have
jurisdiction over Locsin’s complaint for illegal dismissal. In support, Nissan maintains that Locsin is a corporate
officer and not an employee.

Issue:

Whether or not Locsin is a corporate officer thereby excluding him from the coverage of the Labor Code.

Ruling:

YES. Locsin is a corporate officer.

He was undeniably Chairman and President, and was elected to these positions by the Nissan board pursuant
to its By-laws. Given Locsin’s status as a corporate officer, the RTC, not the Labor Arbiter or the NLRC, has
jurisdiction to hear the legality of the termination of his relationship with Nissan. As previously held, a
corporate officer’s dismissal from service is an intra-corporate dispute. A corporate officer’s dismissal is always

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a corporate act, or an intra-corporate controversy which arises between a stockholder and a corporation so
that the RTC should exercise jurisdiction over it. Furthermore, it is provided in , Section 5(c) of Presidential
Decree No. 902-A, Subsection 5.2 that the Security and Exchange Commission’s jurisdiction over all cases
enumerated under Section 5 of Presidential Decree No. 902-A is hereby transferred to the Courts of general
jurisdiction or the appropriate Regional Trial Court.

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Weslayan University v. Maglaya, January 23, 2017 (Termination Dispute)
Doctrine: One who is included in the by-laws of a corporation in its roster of corporate officers is an officer of
said corporation and not a mere employee. Hence, there could be no illegal dismissal case within the
jurisdiction of the NLRC.
Facts: WUP is a non-stock, non-profit, non-sectarian educational corporation duly organized and existing under
the Philippine laws on April 28, 1948. Respondent Atty. Guillermo T. Maglaya, Sr. (Maglaya) was appointed as a
corporate member on January 1, 2004, and was elected as a member of the Board of Trustees (Board) on
January 9, 2004 — both for a period of five (5) years. On May 25, 2005, he was elected as President of the
University for a five-year term. He was re-elected as a trustee on May 25, 2007. On March 25, 2009, Maglaya
learned that the Bishops created an Ad Hoc Committee to plan the efficient and orderly turnover of the
administration of the WUP in view of the alleged "gentleman's agreement" reached in December 2008, and
that the Bishops have appointed the incoming corporate members and trustees.

Manuel Palomo (Palomo), the new Chairman of the Board, informed Maglaya of the termination of his services
and authority as the President of the University on April 27, 2009.

Thereafter, Maglaya and other former members of the Board (Plaintiffs) filed a Complaint for Injunction and
Damages before the Regional Trial Court (RTC) of Cabanatuan. The case was dismissed. The Court of Appeals
also dismissed the petition for being the improper remedy. The CA held that their status as corporate members
of WUP was undisputed.

Hence, Maglaya filed the present illegal dismissal case.

Issue:
Whether or not NLRC has jurisdiction
Ruling:

No. It is apparent from the By-laws of WUP that the president was one of the officers of the corporation, and
was an honorary member of the Board. He was appointed by the Board and not by a managing officer of the
corporation. We held that one who is included in the by-laws of a corporation in its roster of corporate officers
is an officer of said corporation and not a mere employee.

The alleged "appointment" of Maglaya instead of "election" as provided by the by-laws neither convert the
president of university as a mere employee, nor amend its nature as a corporate officer. With the office
specifically mentioned in the by-laws, the NLRC erred in taking cognizance of the case, and in concluding that
Maglaya was a mere employee and subordinate official because of the manner of his appointment, his duties
and responsibilities, salaries and allowances, and considering the Identification Card, the Administration and
Personnel Policy Manual which specified the retirement of the university president, and the check
disbursement as pieces of evidence supporting such finding.

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Cacho v. Balagtas, February 7, 2018 (Termination Dispute)
Doctrine: A two-tier test must be employed to determine whether an intra-corporate controversy exists in the
present case, viz.: (a) the relationship test, and (b) the nature of the controversy test. A dispute is considered
an intra-corporate controversy under the relationship test when the relationship between or among the
disagreeing parties is any one of the following: (a) between the corporation, partnership, or association and
the public; (b) between the corporation, partnership, or association and its stockholders, partners, members,
or officers; ( c) between the corporation, partnership, or association and the State as far as its franchise,
permit or license to operate is concerned; and ( d) among the stockholders, partners, or associates themselves.
We must now determine whether or not the Executive Vice President position is a corporate office so as to
establish the intra-corporate relationship between the parties. One shall be considered a corporate officer only
if two conditions are met, viz.: (1) the position occupied was created by charter/by-laws, and (2) the officer
was elected (or appointed) by the corporation's board of directors to occupy said position.
Facts: Respondent Virginia D. Balagtas filed a complaint of constructive dismissal against petitioners North Star
International Travel, Inc. (North Star) and its President Norma D. Cacho (Cacho) before the Labor Arbiter.
Balagtas, after 14 years of service in the said corporation, was placed under 30 days preventive suspension
pursuant to a Board Resolution passed by the Board of Directors of the respondent corporation due to her
alleged questionable transactions. While under preventive suspension, she wrote a letter to Norma Cacho
informing the latter that she was assuming her position as Executive Vice President/Chief Executive Officer
effective on that date; however, she was prevented from re-assuming her position. Consequently, she filed a
complaint claiming that she was constructively and illegally dismissed effective on April 12, 2004. In their
defense, Cacho and North Star averred that preventive suspension was meant to prevent Balagtas from
influencing potential witnesses and to protect the respondent corporation's property. Subsequently, the Board
of Directors constituted an investigation committee tasked with the duty to impartially assess the charges
against petitioner. Cacho, et al. alleged that Balagtas violated her suspension when, on several occasions, she
went to the corporation's office and insisted on working despite respondent Norma Cacho's protestation. They
asserted that petitioner was not illegally dismissed but was merely placed under preventive suspension.

The Labor Arbiter found that Balagtas was illegally dismissed from North Star but the latter appealed to the
NLRC for lack of jurisdiction. They contend that Balagtas was never dismissed and alleged that she was a
corporate officer, incorporator, and member of the North Star's Board of Directors. Thus, the NLRC cannot take
cognizance of her illegal dismissal case, the same being an intra-corporate controversy, which properly falls
within the original and exclusive jurisdiction of the ordinary courts. The NLRC ruled in favor of the petitioners.

The Decision of the Labor Arbiter is REVERSED and SET ASIDE and the complaint is DISMISSED for lack of
jurisdiction. However, the CA affirmed the Labor Arbiter’s Decision and set aside the Decision of the NLRC.

Issue: Whether or not the present case is an intra-corporate controversy within the jurisdiction of the regular
courts or an ordinary labor dispute that the Labor Arbiter may properly take cognizance of.
Ruling: Respondent Balagtas's dismissal is an intra-corporate controversy. A two-tier test must be employed to
determine whether an intra-corporate controversy exists in the present case, viz.: (a) the relationship test, and
(b) the nature of the controversy test. A dispute is considered an intra-corporate controversy under the
relationship test when the relationship between or among the disagreeing parties is any one of the following:
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(a) between the corporation, partnership, or association and the public; (b) between the corporation,
partnership, or association and its stockholders, partners, members, or officers; ( c) between the corporation,
partnership, or association and the State as far as its franchise, permit or license to operate is concerned; and (
d) among the stockholders, partners, or associates themselves. We must now determine whether or not the
Executive Vice President position is a corporate office so as to establish the intra-corporate relationship
between the parties. One shall be considered a corporate officer only if two conditions are met, viz.: (1) the
position occupied was created by charter/by-laws, and (2) the officer was elected (or appointed) by the
corporation's board of directors to occupy said position.

The Executive Vice President position is one of the corporate offices provided in petitioner North Star's
By-laws. Section 25 of the Corporation Code explicitly provides for the election of the corporation's president,
treasurer, secretary, and such other officers as may be provided for in the by-laws. In interpreting this
provision, the Court has ruled that if the position is other than the corporate president, treasurer, or secretary,
it must be expressly mentioned in the bylaws in order to be considered as a corporate office. North Star’s
by-laws provide that there may be one or more vice president positions in petitioner North Star and, by virtue
of its by-laws, all such positions shall be corporate offices. The next question is whether or not the phrase "one
or more vice president" in the above-cited provision of the bylaws includes the Executive Vice President
position held by respondent Balagtas. The use of the phrase "one or more" in relation to the establishment of
vice president positions without particular exception indicates an intention to give petitioner North Star's
Board ample freedom to make several vice president positions available as it may deem fit and in consonance
with sound business practice. To require that particular designation/variation of each vice president (i.e.,
executive vice president) be specified and enumerated is to invalidate the by-laws' true intention and to
encroach upon petitioner North Star's inherent right and authority to adopt its own set of rules and
regulations to govern its internal affairs. By name, the Executive Vice President position is embraced by the
phrase "one or more vice president" in North Star's by-laws.

Respondent Balagtas was appointed by the Board as petitioner North Star's Executive Vice President while a
corporate office is created by an express provision either in the Corporation Code or the By-laws, what makes
one a corporate officer is his election or appointment thereto by the board of directors. Thus, there must be
documentary evidence to prove that the person alleged to be a corporate officer was appointed by action or
with approval of the board. Petitioners Cacho and North Star assert that respondent Balagtas was elected as
Executive Vice President by the Board as evidenced by the Secretary's Certificate dated April 22, 2003.

The above-cited Secretary's Certificate overcomes respondent Balagtas's contention that she was merely the
Executive Vice President by name and was never empowered to exercise the functions of a corporate officer.
Notably, she did not offer any proof to show that her duties, functions, and compensation were all determined
by petitioner Cacho as petitioner North Star's President. Respondent Balagtas also denies her status as one of
petitioner North Star's corporate officers because she was not listed as such in petitioner North Star's 2003
General Information Sheet (GIS). But the GIS neither governs nor establishes whether or not a position is an
ordinary or corporate office. At best, if one is listed in the GIS as an officer of a corporation, his/her position as
indicated therein could only be deemed a regular office, and not a corporate office as it is defined under the
Corporation Code. To be considered an intra-corporate controversy, the dismissal of a corporate officer must
have something to do with the duties and responsibilities attached to his/her corporate office or performed in
his/her official capacity. The termination complained of is intimately and inevitably linked to respondent
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Balagtas's role as petitioner North Star's Executive Vice President: first, the alleged misappropriations were
committed by respondent Balagtas in her capacity as vice president, one of the officers responsible for
approving the disbursements and signing the checks. And, second, these alleged misappropriations breached
petitioners Cacho's and North Star's trust and confidence specifically reposed m respondent Balagtas as vice
president. That all these incidents are adjuncts of her corporate office led the Court to conclude that
respondent Balagtas's dismissal is an intra – corporate controversy, not a mere labor dispute. All told, the issue
in the present case is an intra-corporate controversy, a matter outside the Labor Arbiter's jurisdiction.

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Paredes v. Feed the Children Philippines, September 9, 2015 (damages)
ROSALINDA G. PAREDES, petitioner, vs. FEED THE CHILDREN PHILIPPINES, INC. and/or DR. VIRGINIA
LAO, HERCULES PARADIANG and BENJAMIN ESCOBIA, respondents.
[G.R. No. 184397. September 9, 2015.]

Doctrine:
The "money claims of workers" referred to in Article 217 of the Labor Code embraces money claims which
arise out of or in connection with the employer-employee relationship, or some aspect or incident of such
relationship. This claim is distinguished from cases of actions for damages where the employer-employee
relationship is merely incidental and the cause of action proceeds from a different source of obligation. Thus,
the regular courts have jurisdiction where the damages claimed for were based on: tort, malicious prosecution,
or breach of contract, as when the claimant seeks to recover a debt from a former employee or seeks
liquidated damages in the enforcement of a prior employment contract.

Facts:
Respondent Feed the Children Philippines, Inc. (FTCP) is a non­stock, non-profit, and non-government
organization duly incorporated under the Philippine laws in 1989. Its objective is to provide food, clothing,
educational supplies and other necessities of indigent children worldwide.

Petitioner Rosalinda Paredes was FTCP's National Director. Her functions and duties include project
management, fund accessing, income generation, financial management, and administration of the
organization.

However, 42 FTCP employees signed a petition letter addressed to the Board expressing their complaints
against alleged detestable practices of petitioner, to wit: seeking exemption from policies which she herself had
approved; withholding organization funds despite approval of its release; procuring health insurance for herself
without paying her share of the premium; and receiving additional fees contrary to the terms of her contract.

This prompted the Board to hold a meeting without Rosalinda and perform an audit to which she tried to desist.

Ultimately, she filed her resignation letter to be effective on December 31 but the Board accepted her
resignation with the condition that its effectiveness be moved to November 30.

She then filed a complaint of illegal dismissal claiming that she was forced to resign, thus, was constructively
dismissed.

The LA ruled in favor of the FTCP. The decision was reversed by the NLRC. Nevertheless, the CA ruled in
favor of FTCP deciding that Paredes was not constructively dismissed and ordering her to pay damages and
her debt to FTCP and the reimbursement of the FTCP provident Fund allegedly withdrawn by Paredes

Issue:
Whether Paredes must pay damages and her debt to FTCP and to reimburse the funds she allegedly
withdrew?

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Ruling:
No. The CA erred when it ruled that she should pay respondents' claims for damages because they were not
duly proven and that they clearly did not arise from an employer-employee relationship.

This Court held that the "money claims of workers" referred to in Article 217 of the Labor Code embraces
money claims which arise out of or in connection with the employer-employee relationship, or some aspect or
incident of such relationship. This claim is distinguished from cases of actions for damages where the
employer-employee relationship is merely incidental and the cause of action proceeds from a different source
of obligation. Thus, the regular courts have jurisdiction where the damages claimed for were based on: tort,
malicious prosecution, or breach of contract, as when the claimant seeks to recover a debt from a former
employee or seeks liquidated damages in the enforcement of a prior employment contract.

The CA erred in awarding P34,438.37 for petitioner's unpaid debt to FTCP. The claim for recovery of a debt
has no reasonable causal connection with any of the claims provided for in Article 217. The fact that the
transaction happened at the time they were employer and employee did not negate the civil jurisdiction of trial
court. Hence, it is erroneous for the LA and the CA to rule on such claim arising from a different source of
obligation and where the employer-employee relationship was merely incidental.

Likewise, the CA erred in awarding P109,208.36 for the reimbursement of the FTCP provident Fund allegedly
withdrawn by petitioner. Although it was entered by the respondents in its counterclaim, this claim does not
arise from or is necessarily connected with the fact of termination. It also had no reasonable causal connection
with employer-employee relationship.

Dispositive Portion:
WHEREFORE, the petition for review on certiorari, dated October 23, 2008, of petitioner Rosalinda G. Paredes
is hereby PARTLY GRANTED. Accordingly, the ruling of the Court of Appeals in its Decision dated March 25,
2008, that petitioner was not constructively dismissed, is hereby AFFIRMED. However, the awards of
P34,438.37 and P109,208.36 for the unpaid debt of petitioner and reimbursement of the FTCP provident Fund,
respectively, are hereby SET ASIDE.

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Lunzaga v. Albar Shipping, April 18, 2012 (damages)
Doctrine: LA has jurisdiction over a case involving a claim arising from employer-employee relationship. While
LA has no jurisdiction to determine who among the heirs are entitled to receive the death benefits it has
jurisdiction to decide whether Albar is liable for the claim.

Facts: Romeo Lunzaga (Lunzaga) was a seaman working for Albar Shipping (Albar). Romeo was assigned as
Chief Engineer on board MV Lake Aru by virtue of a POEA-approved employment contract. Subsequently,
Lunzaga suffered a heart attack and was repatriated to the Philippines but eventually died months after.
Eventually, Gilda G. Lunzaga (Gilda), claiming to be the surviving spouse of Lunzaga, filed with the NLRC a
complaint against Albar for payment of death benefits, damages and attorney’s fees. The claim was opposed
by the children of Lunzaga from the first marriage, which was subsequently declared void, arguing that Gilda is
not entitled to the death benefits because their marriage was bigamous.

On August 28, 2009, the Labor Arbiter issued an Order temporarily dismissing the complaint because the issue
as to who is the proper beneficiary is outside the jurisdiction of the Labor Arbiter and directing the parties to
file their case with the regular courts. Gilda filed an appeal before the NLRC one day past the 10-day period for
filing an appeal which was dismissed on such basis. On appeal, the CA affirmed both ruling.

Issues:
a) Whether the Labor Arbiter has jurisdiction over the complaint?
b) Whether the dismissal of the appeal by the NLRC is correct?

Ruling:
a) Yes. The Court held that the issue of who is the proper beneficiary of Romeo is properly within the
jurisdiction of the regular courts. However, a review of the records of the case reveals that the main issue in
the complaint before the Labor Arbiter was whether the heirs are entitled to receive his death benefits from
Albar which is clearly within the jurisdiction of the Labor Arbiter as it involves a claim arising from an
employer-employee relationship. While the Labor Arbiter has no jurisdiction to determine who among the
alleged heirs is entitled to receive the death benefits, it should have made a ruling on whether or not Albar is
liable for the claim.

b) No. It has been said this time and again that the perfection of an appeal within the period fixed by the rules
is mandatory and jurisdictional. But, it is always in the power of this Court to suspend its own rules, or to
except a particular case from its operation, whenever the purposes of justice require it. Strong compelling
reasons such as serving the ends of justice and preventing a grave miscarriage thereof warrant the suspension
of the rules. In this case, the ends of justice would be best served with the admission of the appeal for the
complete ventilation of the issues in the case. Considering that Albar admitted its liability to the heirs of
Romeo for his death benefits, the NLRC should have given due course to the meritorious appeal.

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18.1 Santos v. Servier Philippines Inc. November 28, 2008 (Tax
deduction) (damages)
Doctrine:
1. Any money claim (i.e deductions for tax purposes) arising from the employer-employee relationship
clearly falls within the jurisdiction of the Labor Arbiter and the NLRC.

2. For the retirement benefits to be exempt from the withholding tax, the taxpayer is burdened to prove
the concurrence of the following elements: (1) a reasonable private benefit plan is maintained by the
employer; (2) the retiring official or employee has been in the service of the same employer for at least
ten (10) years; (3) the retiring official or employee is not less than fifty (50) years of age at the time of
his retirement; and (4) the benefit had been availed of only once.
Facts:
Petitioner Ma. Isabel T. Santos was the Human Resource Manager of respondent Servier Philippines, Inc. since
1991 until her termination from service in 1999.
Petitioner suffered an alimentary allergy when they were touring France which led to her coma of 21 days and
hospitalization of 52 days. When she went back to the Philippines in June 1998, she was still hospitalized for
rehabilitation at St. Luke’s. The respondent continuously paid the former’s salaries; and assisted her in paying
her hospital bills. The petitioner was dismissed from employment effective August 31, 1999 when the
respondent was advised by the former’s physician that petitioner had not fully recovered.
As a consequence, a retirement package was offered to the petitioner which includes: Retirement Plan
Benefits, Insurance Pension, Educational Assistance and Medical & Healthcare. Out of all the promised
benefits, only P701,454.89 was released to the petition because the respondent deducted P362,386.87 for tax
purposes.
A case was instituted in NLRC-NCR for unpaid salaries and benefits. The labor arbiter dismissed the complaint
because the respondent has been generous in giving financial assistance to the petitioner all throughout her
hospitalization and that the other benefits such as separation pay are integrated in her retirement plan. They
refused to rule on the tax deductions as this is not within their jurisdiction. The NLRC set aside the ruling of the
Labor Arbiter. Unsatisfied, the petitioners appealed in the CA which affirmed the NLRC’s decision.
Hence, the Petition for Review on Certiorari under Rule 45 of the Rules of Court, seeking to set aside the CA
Decision.
Issue:
1. Whether or not the case of illegal deductions (Tax Deductions from Retirement Benefits) fall within the
Jurisdiction of the Labor Arbiter and/or the NLRC.
2. Whether or not retirement benefits are taxable.

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Ruling:
1. Yes. The issues on the Tax Deductions from the Retirement Benefits fall within the Jurisdiction of the
Labor Arbiter and NLRC.
It is noteworthy that petitioner demanded the completion of her retirement benefits, including the
amount withheld by respondent for taxation purposes. The issue of deduction for tax purposes is
intertwined with the main issue of whether or not petitioner’s benefits have been fully given her. It is,
therefore, a money claim arising from the employer-employee relationship, which clearly falls within
the jurisdiction of the Labor Arbiter and the NLRC.
2. Yes. Retirement Benefits are taxable.
Section 32 (B) (6) (a) of the New National Internal Revenue Code (NIRC) provides for the exclusion of
retirement benefits from gross income, thus:
(6) Retirement Benefits, Pensions, Gratuities, etc. –
a) Retirement benefits received under Republic Act 7641 and those received by officials
and employees of private firms, whether individual or corporate, in accordance with a
reasonable private benefit plan maintained by the employer: Provided, That the retiring
official or employee has been in the service of the same employer for at least ten (10)
years and is not less than fifty (50) years of age at the time of his retirement: Provided
further, That the benefits granted under this subparagraph shall be availed of by an
official or employee only once. x x x.
Thus, for the retirement benefits to be exempt from the withholding tax, the taxpayer is
burdened to prove the concurrence of the following elements: (1) a reasonable private
benefit plan is maintained by the employer; (2) the retiring official or employee has been
in the service of the same employer for at least ten (10) years; (3) the retiring official or
employee is not less than fifty (50) years of age at the time of his retirement; and (4) the
benefit had been availed of only once.
As discussed above, the petitioner was qualified for disability retirement. At the time of such
retirement, petitioner was only 41 years of age; and had been in the service for more or less eight (8)
years. As such, the above provision is not applicable for failure to comply with the age and length of
service requirements. Therefore, the respondent cannot be faulted for deducting from the petitioner's
total retirement benefits the amount of P362,386.87, for taxation purposes.

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18.2 World’s Best Gas v. Vital, September 9, 2015 (damages)

Doctrine:
Art. 217. Jurisdiction of the Labor Arbiters and the Commission - (6) Except claims for Employees'
Compensation, Social Security, Medicare and maternity benefits, all other claims arising from
employer-employee relations, including those of persons in domestic or household service, involving an
amount exceeding five thousand pesos (P5,000.00) regardless of whether accompanied with a claim for
reinstatement.
Facts:
Vital was one of the incorporators of WBGI, holding P500,000.00 worth of shares of stocks therein. He was also
appointed as Internal Auditor and Personnel Manager by WBGI's President/CEO and continued to serve as
such until his mandatory retirement on September 25, 2003. Upon his retirement, WBGI's Board of Directors
computed Vital's retirement benefits at P82,500.00 for the number of years he served as Internal Auditor and
Personnel Manager. WBGI also agreed to acquire Vital's P500,000.00 shares of stocks at par value.
After offsetting the P500,000.00 due from WBGI's acquisition of his shares of stocks against ERJ Enterprises'
P923,843.59 outstanding balance to WBGI, Vital claimed that the unpaid salaries and separation pay due him
amounted to P845,000.00 and P250,000.00, respectively, leaving a net amount of P671,156.41 payable to him.
WBGI rejected Vital's claim and contended that after offsetting, Vital actually owed them P369,156.19.
In January 2006, Vital filed a complaint before NLRC for the for non-payment of separation and retirement
benefits, underpayment of salaries/wages and 13th month pay, illegal reduction of salary and benefits, and
damages. The LA dismissed the complaint upon finding that the issue was intra-corporate in nature.
Vital filed a complaint to the RTC. RTC found that Respondent was an employee of WBGI and therefore entitled
to his claim for unpaid salary and benefits. This prompted WBGI to appeal to the CA.
The CA dismissed the appeal and the MR of WBGI. Hence, this petition for review on certiorari.
Issue:
Whether or not the RTC has jurisdiction over the Respondent’s Claims of unpaid salaries and separation pay.
Ruling:
No. The RTC has no jurisdiction over the unpaid salaries and separation pay.
The RTC's adjudication of the first cause of action was improper since the same is one which arose from Vital
and WBGI's employer-employee relations, involving an amount exceeding P5,000.00, hence, belonging to the
jurisdiction of the labor arbiters pursuant to Article 217 of the Labor Code:
6. Except claims for Employees' Compensation, Social Security, Medicare and maternity
benefits, all other claims arising from employer-employee relations, including those of
persons in domestic or household service, involving an amount exceeding five thousand
pesos (P5,000.00) regardless of whether accompanied with a claim for reinstatement.

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Having no subject matter jurisdiction to resolve claims arising from employer-employee relations, the RTC's
ruling on Vital's claim of P845,000.00 and P250,000.00 in unpaid salaries and separation pay is, thus, null and
void, and therefore, cannot perpetuate even if affirmed on appeal, rendering the CA's ratiocination that it "has
the eventual authority to review the labor courts' decision on the matter" direly infirm. As a result, WBGI's
petition is meritorious on this score. However, since the dismissal is grounded on lack of jurisdiction, then the
same should be considered as a dismissal without prejudice.28As such, Vital may re-file the same claim,
including those related thereto (e.g., moral and exemplary damages, and attorney's fees) before the proper
labor tribunal.

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19. Halaguena v. PAL October 2, 2009 (damages)

Doctrine:
Jurisdiction of the court is determined based on the material allegations of the complaint and the character of
the relief prayed for irrespective of whether plaintiff is entitled to such relief.
Not every controversy or money claim by an employee against the employer or vice-versa is within the
exclusive jurisdiction of the labor arbiter. Actions between employees and employer where the
employer-employee relationship is merely incidental and the cause of action precedes from a different source
of obligation is within the exclusive jurisdiction of the regular court.
Facts:
Petitioners were employed as female flight attendants of respondent Philippine Airlines (PAL). They are
members of the Flight Attendants and Stewards Association of the Philippines (FASAP), the sole and exclusive
certified as the sole and exclusive bargaining representative of the flight attendants.
A CBA was entered into providing that “compulsory retirement shall be fifty-five (55) for females and sixty (60)
for males.” Petitioners and several female cabin crews manifested that the aforementioned CBA provision on
compulsory retirement is discriminatory and demanded for an equal treatment with their male counterparts.
They then filed a Special Civil Action for Declaratory Relief with the RTC Makati, wherein the court upheld its
jurisdiction on the matter as the allegations in the Petition do not make out a labor dispute arising from
employer-employee relationship as none is shown to exist. This case is not directed specifically against the
respondent arising from any act of the latter, nor does it involve a claim against the respondent. Afterwards,
they granted the Petition and issued the TRO.
Respondents appealed on the ground of lack of jurisdiction, alleging that the labor tribunals have jurisdiction
over the present case, as the controversy partakes of a labor dispute. The dispute concerns the terms and
conditions of petitioners' employment in PAL, specifically their retirement age. The CA agreed with appellants
by setting aside the RTC decision.
Issue:
Whether or not the subject matter is a labor dispute that should be filed with the labor arbiter.
Ruling:
No.
Here, the petitioners' primary is the annulment of the CBA, which allegedly discriminates against them for
being female flight attendants. The subject of litigation is incapable of pecuniary estimation, exclusively
cognizable by the RTC. Being an ordinary civil action, the same is beyond the jurisdiction of labor tribunals.

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The issue at hand is not one that is merely solved by the concepts of the Labor Code, as it requires the
application of other laws regarding the discrimination against women, most importantly the Constitution.

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Pepsi Cola v. Gal-lang, September 24, 1991 (damages)
Doctrine:
Labor Arbiter; Scope of Power; Rule- It must be stressed that not every controversy involving workers and their
employers can be resolved only by the labor arbiters. This will be so only if there is a "reasonable causal
connection" between the claim asserted and employee-employer relations to put the case under the
provisions of Article 217. Absent such a link, the complaint will be cognizable by the regular courts of justice in
the exercise of their civil and criminal jurisdiction.

Facts:

On July 16, 1987, the petitioners filed a criminal complaint for theft against the private respondents who were
employees of the petitioner who were suspected of complicity in the irregular disposition of empty Pepsi Cola
bottles, but this was later withdrawn and substituted with a criminal complaint for falsification of private
documents. On November 26, 1987, after a preliminary investigation conducted by the Municipal Trial Court of
Tanauan, Leyte, the complaint was dismissed. The dismissal was affirmed on April 8, 1988, by the Office of the
Provincial Prosecutor. In the meantime, allegedly after an administrative investigation, the private respondents
were dismissed by the petitioner company on November 23, 1987.

As a result, they lodged a complaint for illegal dismissal with the Regional Arbitration Branch of the NLRC and
demanded reinstatement with damages. In addition, they instituted in the Regional Trial Court of Leyte, a
separate civil complaint against the petitioners for damages arising from what they claimed to be their
malicious prosecution. The petitioners moved to dismiss the civil complaint on the ground that the trial court
had no jurisdiction over the case because it involved employee-employer relations that were exclusively
cognizable by the labor arbiter. The motion was granted on February 6, 1989.

On July 6, 1989, however, the respondent judge, acting on the motion for reconsideration, reinstated the
complaint, saying it was "distinct from the labor case for damages now pending before the labor courts." The
petitioners then came to this Court for relief. The petitioners invoke Article 217 of the Labor Code and a
number of decisions of this Court to support their position that the private respondents' civil complaint for
damages falls under the jurisdiction of the labor arbiter. They particularly cite the case of Getz Corporation v.
Court of Appeals, where it was held that a court of first instance had no jurisdiction over the complaint filed by
a dismissed employee "for unpaid salary and other employment benefits, termination pay and moral and
exemplary damages.

Issue: Whether the Regional Trial Court has jurisdiction over the case

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Ruling: Yes, it must be stressed that not every controversy involving workers and their employers can be
resolved only by the labor arbiters. This will be so only if there is a "reasonable causal connection" between
the claim asserted and employee-employer relations to put the case under the provisions of Article 217.
Absent such a link, the complaint will be cognizable by the regular courts of justice in the exercise of their civil
and criminal jurisdiction. It is the character of the principal relief sought that appears essential, in this
connection. Where such principal relief is to be granted under labor legislation or a collective bargaining
agreement, the case should fall within the jurisdiction of the Labor Arbiter and the NLRC, even though a claim
for damages might be asserted as an incident to such claim.

In the case of San Miguel Corporation vs NLRC the changes in Article 217 are recounted. In this case it was
stated that where the claim to the principal relief sought is to be resolved not by reference to the Labor Code
or other labor relations statute or a collective bargaining agreement but by the general civil law, the
jurisdiction over the dispute belongs to the regular courts of justice and not to the Labor Arbiter and the NLRC.
In such situations, resolution of the dispute requires expertise, not in labor management relations nor in wage
structures and other terms and conditions of employment, but rather in the application of the general civil law.
Clearly, such claims fall outside the area of competence or expertise ordinarily ascribed to Labor Arbiters and
the NLRC and the rationale for granting jurisdiction over such claims to these agencies disappears.

For it cannot be presumed that money claims of workers which do not arise out of or in connection with their
employer-employee relationship, and which would therefore fall within the general jurisdiction of the regular
courts of justice, were intended by the legislative authority to be taken away from the jurisdiction of the courts
and lodged with Labor Arbiters on an exclusive basis. The Court, therefore, believes and so holds that the
"money claims of workers" referred to in paragraph 3 of Article 217 embraces money claims which arise out of
or in connection with the employer-employee relationship, or some aspect or incident of such relationship. Put
a little differently, that money claims of workers which now fall within the original and exclusive jurisdiction of
Labor Arbiters are those money claims which have some reasonable causal connection with the
employer-employee relationship.

The case now before the Court involves a complaint for damages for malicious prosecution which was filed
with the Regional Trial Court of Leyte by the employees of the defendant company. It does not appear that
there is a "reasonable causal connection" between the complaint and the relations of the parties as employer
and employees. The complaint did not arise from such relations and in fact could have arisen independently of
an employment relationship between the parties. No such relationship or any unfair labor practice is asserted.
What the employees are alleging is that the petitioners acted with bad faith when they filed the criminal
complaint which the Municipal Trial Court said was intended "to harass the poor employees" and the dismissal
of which was affirmed by the Provincial Prosecutor "for lack of evidence to establish even a slightest
probability that all the respondents herein have committed the crime imputed against them." This is a matter
which the labor arbiter has no competence to resolve as the applicable law is not the Labor Code but the
Revised Penal Code.

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Banez v. Valdevilla, May 9, 2000 (damages)
Doctrine: Article 217(a) of the Labor Code, as amended, clearly bestows upon the Labor Arbiter original and
exclusive jurisdiction over claims for damages arising from employer-employee relations — in other words, the
Labor Arbiter has jurisdiction to award not only the reliefs provided by labor laws, but also damages governed
by the Civil Code.

Facts: Petitioner Bañez was the sales operations manager of private respondent Oro Marketing, Inc. in its
branch in Iligan City. In 1993, private respondent "indefinitely suspended" petitioner and the latter filed a
complaint for illegal dismissal with the National Labor Relations Commission ("NLRC") in Iligan City. The Labor
Arbiter found petitioner to have been illegally dismissed and ordered the payment of separation pay in lieu of
reinstatement, and of backwages and attorney’s fees. The decision was appealed to both the NLRC and the SC
and dismissed the appeal.

On November 13, 1995, private respondent filed a complaint for damages before the RTC of Misamis Oriental.
Petitioner filed a motion to dismiss the above complaint. He interposed in the court below that the action for
damages, having arisen from an employer-employee relationship, was squarely under the exclusive original
jurisdiction of the NLRC under Article 217(a), paragraph 4 of the Labor Code and is barred by reason of the
final judgment in the labor case. He accused the private respondent of splitting causes of action, stating that
the latter could very well have included the instant claim for damages in its counterclaim before the Labor
Arbiter. He also pointed out that the civil action of private respondent is an act of forum-shopping and was
merely resorted to after a failure to obtain a favorable decision with the NLRC.

Respondent, however, ruled that it had jurisdiction over the subject matter, since the complaint did not ask for
any relief under the Labor Code, but rather to recover damages as redress for Bañez’s nefarious activities,
causing damage and prejudice to Oro Marketing. Since this there was a breach of contractual obligation, which
is within the realm of civil law, the jurisdiction belongs to the regular courts.
Issue: Whether the RTC has jurisdiction over the claim for damages filed by Oro Marketing against Bañez

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

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Second, and more importantly, to allow respondent court to proceed with the instant action for damages
would be to open anew the factual issue of whether petitioner's installment sale scheme resulted in business
losses and the dissipation of private respondent's property. This issue has been duly raised and ruled upon in
the illegal dismissal case, where private respondent brought up as a defense the same allegations now
embodied in his complaint, and presented evidence in support thereof. The Labor Arbiter, however, found to
the contrary — that no business losses may be attributed to petitioner.

Article 217(a) of the Labor Code, as amended, clearly bestows upon the Labor Arbiter original and exclusive
jurisdiction over claims for damages arising from employer-employee relations — in other words, the Labor
Arbiter has jurisdiction to award not only the reliefs provided by labor laws, but also damages governed by the
Civil Code.

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

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Milan v. NLRC, February 4, 2015 (damages)
Doctrine:
Article 217 provides that the Labor Arbiter, in his or her original jurisdiction, and the National Labor Relations
Commission, in its appellate jurisdiction, may determine issues involving claims arising from
employer-employee relations.
Facts:
Petitioners are respondent Solid Mills, Inc.’s employees. They are represented by the National Federation of
Labor Unions (NAFLU), their collective bargaining agent. As Solid Mills’ employees, petitioners and their
families were allowed to occupy SMI Village, a property owned by Solid Mills. According to Solid Mills, this was
out of liberality and for the convenience of its employees and on the condition that the employees would
vacate the premises anytime the Company deems it.
Petitioners were informed that Solid Mills would cease its operations due to serious business losses. NAFLU
recognized Solid Mills’ closure due to serious business losses in the memorandum of agreement which
provided for Solid Mills’ grant of separation pay less accountabilities, accrued sick leave benefits, vacation
leave benefits, and 13th month pay to the employees.
Petitioners were required to sign a memorandum of agreement with release and quitclaim before their
vacation and sick leave benefits, 13th month pay, and separation pay would be released. Employees who
signed the memorandum of agreement were considered to have agreed to vacate SMI Village, and to the
demolition of the constructed houses inside as condition for the release of their termination benefits and
separation pay. Petitioners refused to sign the documents and demanded to be paid their benefits and
separation pay.
Petitioners filed complaints before the Labor Arbiter for alleged non-payment of benefits. Solid Mills argue that
petitioners’ complaint was premature because they had not vacated its property.
Petitioner's Contention: Petitioners point out that the NLRC had no jurisdiction to declare that petitioners act
of withholding possession of respondent Solid Mills property is illegal. The regular courts have jurisdiction over
this issue. It is independent from the issue of payment of petitioners’ monetary benefits.
Respondent's Contention: Respondents Solid Mills argue that petitioners’ failure to turn over respondent Solid
Mills’ property constituted an unsatisfied accountability for which reason petitioners’ benefits could rightfully
be withheld.
Issue:
Whether or not the NLRC has jurisdiction over the case.
Ruling:
YES. Petitioners’ claim that they have the right to the immediate release of their benefits as employees
separated from respondent Solid Mills is a question arising from the employer-employee relationship between
the parties.

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Claims arising from an employer-employee relationship are not limited to claims by an employee. Employers
may also have claims against the employee, which arise from the same relationship.
​In Bañez v. Valdevilla, this court ruled that Article 217 of the Labor Code also applies to employers’ claim for
damages, which arises from or is connected with the labor issue. Thus:

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

As a general rule, therefore, a claim only needs to be sufficiently connected to the labor issue raised and
must arise from an employer-employee relationship for the labor tribunals to have jurisdiction.

In this case, respondent Solid Mills claims that its properties are in petitioners’ possession by virtue of their
status as its employees. Respondent Solid Mills allowed petitioners to use its property as an act of liberality.
Put in other words, it would not have allowed petitioners to use its property had they not been its employees.
The return of its properties in petitioners’ possession by virtue of their status as employees is an issue that
must be resolved to determine whether benefits can be released immediately. The issue raised by the
employer is, therefore, connected to petitioners’ claim for benefits and is sufficiently intertwined with the
parties’ employer-employee relationship. Thus, it is properly within the labor tribunals’ jurisdiction.

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Amecos Innovations v. Lopez, July 2, 2014 (damages)
GR. 178055
Doctrine:
This Court holds that as between the parties, Article 217(a)(4) of the Labor Code is applicable. Said provision
bestows upon the Labor Arbiter original and exclusive jurisdiction over claims for damages arising from
employer-employee relations.
Facts: Petitioner Amecos Innovations, Inc. (Amecos) is a corporation duly incorporated under Philippine laws
engaged in the business of selling assorted products. Amecos received a Subpoena from the Office of the City
Prosecutor of Quezon City in connection with a complaint filed by the Social Security System (SSS) for alleged
delinquency in the remittance of SSS contributions and penalty liabilities in violation of Section 22(a) and 22(d)
in relation to Section 28(e) of the SSS law, as amended.
Amecos attributed its failure to remit the SSS contributions to herein respondent Eliza R. Lopez (respondent).
Amecos claimed that it hired respondent on January 15, 2001 as Marketing Assistant to promote its products;
that upon hiring, respondent refused to provide Amecos with her SSS Number and to be deducted her
contributions. Amecos eventually settled its obligations with the SSS; consequently, SSS filed a Motion to
Withdraw Complaint which was approved by the Office of the City Prosecutor.

Thereafter, petitioners sent a demand letter10 to respondent for ₱27,791.65 representing her share in the SSS
contributions and expenses for processing, but to no avail. Thus, petitioners filed the instant Complaint for
sum of money and damages against respondent docketed as Civil Case No. 04-27802 and raffled to Branch 51
of the Metropolitan Trial Court (MeTC) of Caloocan City. Petitioners claimed that because of respondent’s
misrepresentation, they suffered actual damages.

Ruling of the MTC:

Dismissed the complaint for lack of jurisdiction.

Ruling of the RTC:

The RTC affirmed the view taken by the MeTC underArticle 217 (a)(4) of the Labor Code. Claims for actual,
moral, exemplary, and other forms of damages arising from employer- employee relationships are under the
jurisdiction of the Labor Arbiters or the National Labor Relations COMMISSION.

Ruling of the CA:

The CA ruled to deny the petition for review before the CA and found no error on the decision of the RTC.

Also, the matter of whether the SSS employer’s contributive shares required of the petitioners to be paid
due to the complaint of the respondent necessarily flowed from the employer-employee relationship
between the parties. As such, the lower courts were correct in ruling that jurisdiction over the claim
pertained to the Labor Arbiter and the National Labor Relations Commission, not to the regular courts, even
if the claim was initiated by the employer against the employee.23

Issue: Whether or not the Labor Arbiter has jurisdiction in the case at bar.
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Ruling: Yes. The SC holds that as between the parties, Article 217(a)(4) of the Labor Code is applicable. Said
provision bestows upon the Labor Arbiter original and exclusive jurisdiction over claims for damages arising
from employer-employee relations. The observation that the matter of SSS contributions necessarily flowed
from the employer-employee relationship between the parties – shared by the lower courts and the CA – is
correct; thus, petitioners’ claims should have been referred to the labor tribunals. In this connection, it is
noteworthy to state that "the Labor Arbiter has jurisdiction to award not only the reliefs provided by labor
laws, but also damages governed by the Civil Code."
At the same time, it cannot be assumed that since the dispute concerns the payment of SSS premiums,
petitioners’ claim should be referred to the Social Security Commission (SSC) pursuant to Republic Act No.
1161, as amended by Republic Act No. 8282.35 As far as SSS is concerned, there is no longer a dispute with
respect to petitioners’ accountability to the System; petitioners already settled their pecuniary obligations to
it. Since there is no longer any dispute regarding coverage, benefits, contributions and penalties to speak of,
the SSC need not be unnecessarily dragged into the picture.36 Besides, it cannot be made to act as a collecting
agency for petitioners’ claims against the respondent; the Social Security Law should not be so interpreted, lest
the SSC be swamped with cases of this sort.

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PAL v. ALPAP, February 26, 2018 (damages)
Doctrine: Jurisprudence dictates that where the plaintiffs cause of action for damages arose out of or was
necessarily intertwined with an alleged unfair labor practice, the jurisdiction is exclusively with the labor
tribunal. Likewise, where the damages separately claimed by the employer were allegedly incurred as a
consequence of strike or picketing of the union, such a complaint for damages is deeply rooted in the labor
dispute between the parties and within the exclusive jurisdiction of the labor arbiter. Consequently, the same
should be dismissed by ordinary courts for lack of jurisdiction.
Facts: On 9 December 1997, Airline Pilots Associations of the Philippines (ALPAP) filed with the DOLE a notice
of strike alleging that PAL committed unfair labor practice. Despite the Secretary of DOLE (SOLE)’s prohibition
against ALPAP from staging a strike and committing any act that could exacerbate the dispute, the latter did
the same. A return-to-work order was issued by the SOLE, but ALPAP defied it and went on with their strike.
Consequently, the SOLE issued a resolution which declared the illegality of the strike staged by ALPAP and the
loss of employment status of the officers who participated in the strike. The SOLE's resolution was upheld by
the CA. The matter was eventually elevated to this Court; however the Court dismissed ALPAP's petition for
failure to show that the CA committed grave abuse of discretion or a reversible error. The resolution attained
finality.
Almost 8 months from the finality of the Court's Resolution, PAL filed before the LA a complaint for damages
against ALPAP. PAL alleged that on the second day of the illegal strike conducted by ALPAP, its striking pilots
abandoned 3 PAL aircrafts and as a consequence, its passengers were stranded and PAL was rendered liable for
violation of its contract of carriage. Thus, PAL was compelled to incur expenses. PAL further alleged that its
operation was crippled by the illegal strike resulting in several losses from ticket refunds, extraordinary
expenses to cope with the shutdown situation, and lost income from the cancelled domestic and international
flights.

The LA Ruling: the LA dismissed PAL's complaint because it had no jurisdiction to resolve the issue of damages.

The NLRC Ruling: It ruled that labor tribunals have no jurisdiction over the claims interposed by PAL. It opined
that the reliefs prayed for by PAL should have been ventilated before the regular courts considering that they
are based on the tortuous acts allegedly committed by the respondents. It explained that the airline pilots'
refusal to fly their assigned aircrafts constitutes breach of contractual obligation which is intrinsically a civil
dispute.

The CA Ruling: The appellate court concurred with the NLRC's opinion that exclusive jurisdiction over PAL's
claim for damages lies with the regular courts and not with the SOLE. It ratiocinated that while Article 263(g) of
the Labor Code vests in the SOLE the authority to resolve all questions and controversies arising from a labor
dispute over which it assumed jurisdiction, said authority must be interpreted to cover only those causes of
action which are based on labor laws, causes of action based on an obligation or duty not provided under the
labor laws are beyond the SOLE's jurisdiction. It continued that only those issues that arise from the assumed
labor dispute, which has a direct causal connection to the employer-employee relationship between the
parties, will fall under the jurisdiction of the SOLE. It pointed out that the damages caused by the wilful acts of
the striking pilots in abandoning their aircraft are recoverable under civil law and are thus within the
jurisdiction of the regular courts.

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Issue: W/N the NLRC and the Labor Arbiter have jurisdiction over PAL’s claims against the respondents for
damages incurred as a consequence of the latter’s actions during the illegal strike
Ruling: YES. Under Article 217 of the Labor Code, the LA and the NLRC have jurisdiction to resolve cases
involving claims for damages arising from employer-employee relationship.
It is settled, however, that not every controversy or money claim by an employee against the employer or
vice-versa falls within the jurisdiction of the labor arbiter.Intrinsically, civil disputes, although involving the
claim of an employer against its employees, are cognizable by regular courts.

To determine whether a claim for damages under paragraph 4 of Article 217 is properly cognizable by the labor
arbiter, jurisprudence has evolved the "reasonable connection rule" which essentially states that the claim for
damages must have reasonable causal connection with any of the claims provided for in that article. A money
claim by a worker against the employer or vice-versa is within the exclusive jurisdiction of the labor arbiter
only if there is a "reasonable causal connection" between the claim asserted and employee-employer
relations. Only if there is such a connection with the other claims can the claim for damages be considered as
arising from employer-employee relations.18 Absent such a link, the complaint will be cognizable by the regular
courts.

The Court agrees with PAL that its claim for damages has reasonable connection with its employer-employee
relationship with the respondents. The cause of action is not grounded on mere acts of quasi-delict. The
claimed damages arose from the illegal strike and acts committed during the same which were closely related
and intertwined with the respondents' allegations of unfair labor practices against PAL.

Jurisprudence dictates that where the plaintiffs cause of action for damages arose out of or was necessarily
intertwined with an alleged unfair labor practice, the jurisdiction is exclusively with the labor tribunal.
Likewise, where the damages separately claimed by the employer were allegedly incurred as a consequence of
strike or picketing of the union, such a complaint for damages is deeply rooted in the labor dispute between
the parties and within the exclusive jurisdiction of the labor arbiter. Consequently, the same should be
dismissed by ordinary courts for lack of jurisdiction.

From the foregoing, it is clear that the regular courts do not have jurisdiction over PAL's claim of damages, the
same being intertwined with its labor dispute with the respondents over which the SOLE had assumed
jurisdiction. It is erroneous, therefore, for the CA to even suggest that PAL's complaint should have been
ventilated before the trial court.

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Dai-chi Electronics v. Villarama, November 21, 1994 (damages)
Doctrine: Jurisprudence has evolved the rule that claims for damages under paragraph 4 of Article 217, to be
cognizable by the Labor Arbiter, must have a reasonable causal connection with any of the claims provided for
in that article. Only if there is such a connection with the other claims can the claim for damages be considered
as arising from employer-employee relations.

Facts: Petitioner Dai-Chi Electronics filed a complaint for damages with the RTC against private respondent
Adonis Limjuco, a former employee. Petitioner alleged that private respondent violated paragraph five of their
Contract of Employment which prohibits their former employees to be connected or employed, directly or
indirectly, with any undertaking engaged in a business similar or in competition with them for a period of two
years after termination from service. Petitioner claimed that private respondent became an employee of Angel
Sound Philippines Corporation, a corporation engaged in the same line of business as that of petitioner, within
two years from the date of private respondent's resignation from petitioner's employ. Petitioner further
alleged that private respondent is holding the position of Head of the Material Management Control
Department, the same position he held while in the employ of petitioner.

The RTC ruled that it had no jurisdiction over the subject matter of the controversy because the complaint was
for damages arising from employer-employee relations. Citing Article 217(4) of the Labor Code of the
Philippines, as amended by R.A. No. 6715, respondent court stated that it is the Labor Arbiter which had
original and exclusive jurisdiction over the subject matter of the case.

Issue: Whether or not petitioner’s claim for damages is one arising from ER-EE relations

Ruling: NO. Article 217, as amended by Section 9 of R.A. No. 6715, provides as follows: Jurisdiction of Labor
Arbiters and the Commission. — (a) Except as otherwise provided under this Code, the Labor Arbiters shall have
original and exclusive jurisdiction to hear and decide, xxxx : 4. Claims for actual, moral, exemplary and other
forms of damages arising from the employer-employee relations.
Petitioner does not ask for any relief under the Labor Code of the Philippines. It seeks to recover damages
agreed upon in the contract as redress for private respondent’s breach of his contractual obligation to its
“damage and prejudice”. Such cause of action is within the realm of Civil Law, and jurisdiction over the
controversy belongs to the regular courts. More so when we consider that the stipulation refers to the
post-employment relations of the parties.

Jurisprudence has evolved the rule that claims for damages under paragraph 4 of Article 217, to be cognizable
by the Labor Arbiter, must have a reasonable causal connection with any of the claims provided for in that
article. Only if there is such a connection with the other claims can the claim for damages be considered as
arising from employer-employee relations.

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People’s Broadcasting Service v. Sec of Labor, March 6, 2012 (DOLE can
determine existence of EE Rel and summary on Articles 128, 129 and
224)
Doctrine: If a complaint is brought before the DOLE to give effect to the labor standards provisions of the
Labor Code or other labor legislation, and there is a finding by the DOLE that there is an existing
employer-employee relationship, the DOLE exercises jurisdiction to the exclusion of the NLRC. If the DOLE finds
that there is no employer-employee relationship, the jurisdiction is properly with the NLRC. If a complaint is
filed with the DOLE, and it is accompanied by a claim for reinstatement, the jurisdiction is properly with the
Labor Arbiter, under Art. 217(3) of the Labor Code, which provides that the Labor Arbiter has original and
exclusive jurisdiction over those cases involving wages, rates of pay, hours of work, and other terms and
conditions of employment, if accompanied by a claim for reinstatement.
FACTS: Juezan (respondent) filed a case for illegal deduction, non-payment of service incentive leave, 13th
month pay, premium pay for holiday and rest day and illegal diminution of benefits, delayed payment of wages
and non-coverage of SSS, PAG-IBIG and Philhealth (non-diminution of benefits in the amount allegedly 6K)
before the DOLE Regional Office. In its inspection, it noted that “no employer-employee relationship exists.”

Petitioner argued that no employer-employee relationship exists because talents were hired on “participation
basis” and presented evidence such as cash vouchers, billing statements, summary of billing of drama
production. Management also stated that they did not have control of the talent as they had the option to
venture into another contract with other broadcasting industries.

Regional Director ruled that respondent was an employee, which the DOLE Sec and then the CA affirmed.

ISSUE: Whether DOLE Secretary had the right to determine the existence of the employer-employee
relationship. YES

RULING: The SC cited the visitorial and enforcement power of the DOLE in Art 128(b) of the Labor Code, which
states that the powers come into play when there exists an employer-employee relationship.The SC then
rationalized that from this, it can be inferred that the DOLE has the power to determine the existence of this
relationship on a preliminary, incidental, and collateral level, necessary for the exercise of its visitorial and
enforcement power.

The Court then said that the mere assertion that there exists no employer-employee relationship does not
deprive the DOLE jurisdiction over the claims under Art. 128 of the Labor Code. What is needed is a prima facie
case showing such absence.

Here, there was that as the petitioner had been maintaining since the start of the case that there was no
employer-employee relationship, and that the Labor Inspector’s inspection which noted this on hits report,
establishes the prima facie case.

SC granted the petition.

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Ex-Bataan Veterans Security Agency v. Sec.Laguesma, November 20,
2007 (in relation to Articles 128 and 129)
Doctrine
The visitorial and enforcement powers of the DOLE Regional Director to order and enforce compliance with
labor standard laws can be exercised even where the individual claim exceeds P5,000. The only instance when
the Regional Director needs to endorse the case to the NLRC si when the ff elements exist: (a) that the
employer contests the findings of the labor regulations officer and raises issues thereon; (b) that in order to
resolve such issues, there is a need to examine evidentiary matters; and (c) that such matters are not
verifiable in the normal course of inspection.

Facts
Ex-Bataan Veterans Security Agency, Inc. (EBVSAI) is in the business of providing security services while private
respondents are EBVSAI's employees. One day, The latter filed a complaint against the former for
underpayment of wages before the Regional Office of the Department of Labor and Employment (DOLE). The
Regional Director then issued a ruling which provides that EBVSAI must pay Php603k to the aggrieved
employees.
EBVSAI filed a motion for reconsideration and alleged that the Regional Director does not have jurisdiction
over the subject matter of the case because the money claim of each private respondent exceeded P5,000.
The Regional Director denied appeal, stating that the limitations under Articles 129 12 and 217 (6) of the Labor
Code no longer apply to the Secretary of Labor's visitorial and enforcement powers under Article 128 (b). The
Secretary of Labor or his duly authorized representatives are now empowered to hear and decide, in a
summary proceeding, any matter involving the recovery of any amount of wages and other monetary claims
arising out of employer-employee relations at the time of the inspection. The case was brought up to the Sec.
of Labor and then the CA, both affirming the orders of the Regional Director.

Issue
Whether the Secretary of Labor or his duly authorized representatives have jurisdiction over the money claims
of private respondents which exceed P5,000.

Ruling
Yes. While it is true that under Articles 129 and 217 of the Labor Code, the Labor Arbiter has jurisdiction to
hear and decide cases where the aggregate money claims of each employee exceeds P5,000.00, said provisions
of law do not contemplate nor cover the visitorial and enforcement powers of the Secretary of Labor or his
duly authorized representatives. This is expressly provided for by Art. 128, to wit: “Notwithstanding the
provisions of Article[s] 129 and 217 of this Code to the contrary, and in cases where the relationship of
employer-employee still exists, the Secretary of Labor and Employment or his duly authorized representatives

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shall have the power to issue compliance orders to give effect… “ This means that the visitorial and
enforcement powers of the DOLE Regional Director can be exercised even where the individual claim exceeds
P5,000.
However, Art. 128(b) also provides an exception to the rule above, in which case the Regional Director will
have to endorse the case to the appropriate Arbitration Branch of the NLRC. The elements of the exception are
the ff: (a) that the employer contests the findings of the labor regulations officer and raises issues thereon; (b)
that in order to resolve such issues, there is a need to examine evidentiary matters; and (c) that such matters
are not verifiable in the normal course of inspection.
In this case, the Regional Director validly assumed jurisdiction over the money claims of private respondents
even if the claims exceeded P5,000 because such jurisdiction was exercised in accordance with Article 128 (b)
of the Labor Code and the case does not fall under the exception clause.

Meteoro v. Creative Creatures, July 13, 2009 (in relations to Articles 128
and 129)

DOCTRINE: Art. 128 (b)… except in cases where the employer contests the findings of the labor employment
and enforcement officer and raises issues supported by documentary proofs which were not considered in the
course of inspection.”
FACTS: CREATIVE primarily caters to the production design requirements of ABS-CBN. CREATIVE hired the
petitioners as artists, carpenters and welders to design, create, assemble, set-up and dismantle props of
production sets. Petitioner filed complaints for non-payment of benefits and illegal deductions with DOLE.
During investigation, the labor inspector noted that the records were not made available, and that creative
claimed that DOLE had no jurisdiction because of the absence of EER since petitioners were free-lance
individuals. Petitioners filed a complaint for illegal dismissal with payment with the NLRC. RD ordered Creative
to pay money claims. DOLE SECRETARY AFFIRMED. However, CA declared the decision null and void.
ISSUE: WON the DOLE Secretary and her authorized representatives have jurisdiction over petitioners’ money
claims- NO
RULING: The SC held in the negative. GR: the DOLE Secretary and her authorized representatives, such as the
DOLE-NCR Regional Director, have jurisdiction to enforce compliance with labor standards laws under the
broad visitorial and enforcement powers conferred by Article 128 of the Labor Code.
However, the same article also admits an exception, to wit:
“(b)… except in cases where the employer contests the findings of the labor employment and
enforcement officer and raises issues supported by documentary proofs which were not considered in
the course of inspection.”
“Exception clause” has the following elements, all of which must concur: (a) that the employer contests the
findings of the labor regulations officer and raises issues thereon; (b) that in order to resolve such issues, there

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is a need to examine evidentiary matters; (c) that such matters are not verifiable in the normal course of
inspection.
In this case It is clear that respondent contested and continues to contest the findings and
conclusions of the labor inspector. The Regional Director was divested of jurisdiction and should have
endorsed the case to the appropriate Arbitration Branch of the NLRC. Considering, however, that an illegal
dismissal case had been filed by petitioners wherein the existence or absence of an employer-employee
relationship was also raised, the CA correctly ruled that such endorsement was no longer necessary.

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Okol v. Slimmers World December 11, 2009

Doctrine: A corporate officer's dismissal is always a corporate act, or an intra-corporate controversy which
arises between a stockholder and a corporation. The question of remuneration involving a stockholder and
officer, not a mere employee, is not a simple labor problem but a matter that comes within the area of
corporate affairs and management and is a corporate controversy in contemplation of the Corporation Code.
Facts: Respondent Slimmers World International employed petitioner Leslie Okol as a management trainee on
15 June 1992. She rose up the ranks to become Head Office Manager and then Director and Vice President
from 1996 until her dismissal on 22 September 1999.
On 28 July 1999, Slimmers World preventively suspended Okol. The suspension arose from the seizure by the
Bureau of Customs of 7 Precor elliptical machines and 7 Precor treadmills belonging to or consigned to
Slimmers World. The equipment, placed under the names of Okol and 2 customs brokers, were seized for being
undervalued as the shipments were placed for a value less than $500.
On 2 September 1999, Okol received a memorandum that her suspension was extended from 2 September
until 1 October 1999 pending the outcome of the investigation on the imported machines. Days later, Okol
received another memorandum requiring her to explain why no disciplinary action should be taken against her.
She then filed her written explanation but was found by Slimmers World to be unsatisfactory. Therefore, Okol’s
employment was terminated through a letter signed by its president, Ronald Joseph Moy, dated 2 September
1999.
Okol filed a complaint with the Arbitration branch of the NLRC against respondents for illegal suspension,
illegal dismissal, unpaid commissions, damages, and attorney’s fees, with prayer for reinstatement and
payment of backwages.
Respondents filed a Motion to dismiss the case asserting that the NLRC had no jurisdiction over the subject
matter of the complaint. Said motion to dismiss was granted by the labor arbiter in an Order dated 20 March
2000. It was ruled that since Okol was a VP at the time of her dismissal, and was a corporate officer, the
dispute was an intra-corporate controversy which was outside the jurisdiction of the Arbitration branch.
On appeal to the NLRC, the NLRC reversed and set aside the labor arbiter’s order. On appeal to the CA, the
appellate court set aside NLRC’s ruling and affirmed the labor arbiter’s order ruling that it is an intra-corporate
dispute falling within the jurisdiction of regular courts. Hence, this petition.
Issue: Whether NLRC has jurisdiction over the illegal dismissal case filed by petitioner?
Ruling:
NO, It is a settled rule that jurisdiction over the subject matter is conferred by law. The determination of the
rights of a director and corporate officer dismissed from his employment as well as the corresponding liability
of a corporation, if any, is an intra-corporate dispute subject to the jurisdiction of the regular courts. Thus, the
appellate court correctly ruled that it is not the NLRC but the regular courts which have jurisdiction over the
present case.

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In the present case, respondents, in their motion to dismiss filed before the labor arbiter, questioned the
jurisdiction of the NLRC in taking cognizance of petitioner’s complaint. In the motion, respondents attached
the General Information Sheet (GIS), Minutes of the meeting of the Board of Directors dated 14 April 1997 and
Secretary’s Certificate, and the Amended By-Laws to show that petitioner was a corporate officer whose rights
do not fall within the NLRC’s jurisdiction. The GIS and minutes of the meeting of the board of directors
indicated that petitioner was a member of the board of directors, holding one subscribed share of the capital
stock, and an elected corporate officer.

Clearly from the documents submitted by respondents, petitioner was a director and officer of Slimmers
World. The charges of illegal suspension, illegal dismissal, unpaid commissions, reinstatement and back wages
imputed by petitioner against respondents fall squarely within the ambit of intra-corporate disputes. In a
number of cases, we have held that a corporate officer's dismissal is always a corporate act, or an
intra-corporate controversy which arises between a stockholder and a corporation. The question of
remuneration involving a stockholder and officer, not a mere employee, is not a simple labor problem but a
matter that comes within the area of corporate affairs and management and is a corporate controversy in
contemplation of the Corporation Code.

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Santiago v. CF Sharp Crew Management , July 10, 2007 (OFW)
Doctrine:

In cases of seafarers, despite the absence of the commencement of the employer-employee relationship, the
NLRC and the Labor Arbiter still has jurisdiction over complaints involving money claims by virtue of Sec. 10 of
the Migrant Worker’s Act (RA 8042) which provides that:

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

Facts:

Petitioner signed an employment contract with respondent with a duration of 9 months approved by POEA on
February 4, 1998. Petitioner was set to leave for Canada on Feb 13 1998. However, one week before his
departure, he was informed that he would not be leaving. Petitioner filed a complaint with the Labor Arbiter
for illegal dismissal against herein respondent. The LA ruled in favor of the petitioner, holding the respondent
liable for violation of the rules and regulations governing overseas employment when it did not deploy the
petitioner, making him suffer actual damages represented by the lost salary income for 9 months.

On appeal, the NLRC reversed the decision of the LA and ruled that there was no employer-employee
relationship between the petitioner and respondent as the employment contract shall only commence upon
actual departure of the seafarer from the airport or seaport at the point of hire and with a POEA-approved
contract. It also ruled that the decision of the respondent to not deploy the petitioner is considered as a valid
exercise of its management prerogative. Petitioner moved for reconsideration but was denied for lack of merit.
Hence the case was elevated to the CA through a petition for certiorari. The CA agreed with the NLRC that the
petitioner was not entitled to damages as he was not deployed by the agency and such non deployment was a
valid exercise of management prerogative. The subsequent MR was denied. Hence the present petition
assailing the decision of the CA.

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

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Respondent argues that the LA had no jurisdiction over the award of money claims as employment of the
petitioner did not commence due to his deployment being validly withheld. Also, they contend that the
controversy involves a breach of contract cognizable by the civil courts and not the LA.
Issue:
Whether or not the LA has jurisdiction over the case.
Ruling:

Yes. The SC ruled that the case is cognizable by the NLRC and the Labor Arbiters. While agreeing with the
appellate court that the employment contract did not commence due to the petitioner not being able to
depart from the point of hire, thus not establishing an employer-employee relationship between the
respondent and the petitioner; the SC held that certain rights of the petitioner were still violated due to the
breach of contract caused by the respondent when they prevented the deployment pf the petitioner without a
valid reason. It further held that despite the absence of such relationship between the petitioner and the
respondent, the NLRC still has jurisdiction over the petitioner’s complaint by virtue of Sec. 10 of the Migrant
Worker’s Act (RA 8042) which provides that:

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

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

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Industrial Personnel and Management Services v. De Vera, March 7,
2016 (OFW)
Doctrine: Based on the foregoing, the general rule is that Philippine laws apply even to overseas employment contracts.
The parties may agree that a foreign law shall govern the employment contract. But this exception is subject to the
following requisites: 1. That it is expressly stipulated in the overseas employment contract that a specific foreign law shall
govern; 2.That the foreign law invoked must be proven before the courts pursuant to the Philippine rules on evidence;
3.That the foreign law stipulated in the overseas employment contract must not be contrary to law, morals, good
customs, public order, or public policy of the Philippines; and 4.That the overseas employment contract must be
processed through the POEA.

Facts: Arriola was offered by SNCLavalin, through a letter of the position of Safety Officer in its Ambatovy
Project site in Madagascar. Arriola was then hired by SNC-Lavalin, through its local manning agency, IPAMS,
and his overseas employment contract was processed with the POEA. After three months, Arriola received a
notice of pre-termination of employment, dated September 9, 2009, from SNC-Lavalin. It stated that his
employment would be pre-terminated effective September 11, 2009 due to diminishing workload in the area
of his expertise and the unavailability of alternative assignments. Consequently, on September 15, 2009,
Arriola was repatriated.
Arriola also insisted that the petitioners must prove the applicability of Canadian law before the same could be
applied to his employment contract. The petitioners denied the charge of illegal dismissal against them. They
claimed that SNC-Lavalin was greatly affected by the global financial crises during the latter part of 2008. The
economy of Madagascar, where SNC-Lavalin had business sites, also slowed down.
The LA dismissed Arriola’s complaint for lack of merit. Aggrieved, Arriola elevated the LA decision before the
NLRC. The NLRC reversed the LA decision and ruled that Arriola was illegally dismissed by the petitioners
Issue: Whether or not the Philippine laws apply.
Ruling: Yes. In order to afford the full protection of labor to our OFWs, the State has vigorously enacted laws,
adopted regulations and policies, and established agencies to ensure that their needs are satisfied and that
they continue to work in a humane living environment outside of the country. Despite these efforts, there are
still issues left unsolved in the realm of overseas employment. One existing question is posed before the Court
— when should an overseas labor contract be governed by a foreign law? To answer this burning query, a
review of the relevant laws and jurisprudence is warranted. R.A. No. 8042, or the Migrant Workers Act, was
enacted to institute the policies on overseas employment and to establish a higher standard of protection and
promotion of the welfare of migrant workers.

Although it acknowledged claims arising out of law or contract involving Filipino workers, it does not
categorically provide that foreign laws are absolutely and automatically applicable in overseas employment
contracts. It was also held that the provision in the employment contract, where the employer could terminate
the employee at any time for any ground and it could even disregard the notice of termination, violates the
employee’s right to security of tenure under Articles 280 and 281 of the Labor Code.

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Ace Navigation v. Fernandez, October 10, 2012 (OFW)
Doctrine: It is settled that when the parties have validly agreed on a procedure for resolving grievances and to
submit a dispute to voluntary arbitration then that procedure should be strictly observed.
Facts: On October 9, 2008, seaman Respondent filed with the NLRC a complaint for disability benefits, with
prayer for moral and exemplary damages, plus attorney’s fees, against petitioners. The petitioners moved to
dismiss the complaint, contending that the labor arbiter had no jurisdiction over the dispute. They argued that
exclusive original jurisdiction is with the voluntary arbitrator or panel of voluntary arbitrators, pursuant to
Section 29 of the POEA Standard Employment Contract (POEA-SEC), since the parties are covered by the CBA.
Under Section 14 of the CBA, a dispute between a seafarer and the company shall be settled through the
grievance machinery and mandatory voluntary arbitration. Fernandez opposed the motion. He argued that
inasmuch as his complaint involves a money claim, original and exclusive jurisdiction over the case is vested
with the labor arbiter.
Labor Arbiter denied the motion to dismiss, holding that under Section 10 of Republic Act (R.A.) No. 8042, the
Migrant Workers and Overseas Filipinos Act of 1995, the labor arbiter has original and exclusive jurisdiction
over money claims arising out of an employer-employee relationship or by virtue of any law or contract,
notwithstanding any provision of law to the contrary. The petitioners appealed to the NLRC, but the labor
agency denied the appeal. The petitioners moved for reconsideration, but the NLRC denied the motion,
prompting the petitioners to elevate the case to the CA which was also denied, Hence the petition.
Issue: Whether or not the Mandatory Arbitration can be waived.
Ruling: No, Contrary to the CA’s reading of the CBA’s Article 14, there is unequivocal or unmistakable language
in the agreement which mandatorily requires the parties to submit to the grievance procedure any dispute or
cause of action they may have against each other. Any Dispute, grievance, or misunderstanding concerning any
ruling, practice, wages or working conditions in the COMPANY or any breach of the Contract of Employment,
or any dispute arising from the meaning or application of the provisions of this Agreement or a claim of
violation thereof or any complaint or cause of action that any such Seaman may have against the COMPANY, as
well as complaints which the COMPANY may have against such Seaman shall be brought to the attention of the
GRIEVANCE RESOLUTION COMMITTEE before either party takes any action, legal or otherwise.
Bringing such a dispute to the Grievance Resolution Committee shall be an unwaivable prerequisite or
condition precedent for bringing any action, legal or otherwise, in any forum and the failure to so refer the
dispute shall bar any and all legal or other actions. If by reason of the nature of the Dispute, the parties are
unable to amicably settle the dispute, either party may refer the case to a MANDATORY ARBITRATION
COMMITTEE. The MANDATORY ARBITRATION COMMITTEE shall consist of one representative to be designated
by the UNION, and one representative to be designated by the COMPANY and a third member who shall act as
Chairman and shall be nominated by mutual choice of the parties.

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Estate of Nelson Dulay v. Aboitiz Jebsen Maritime (OFW)
Doctrine: It is clear from the above that the interpretation of the DOLE, in consultation with their counterparts
in the respective committees of the Senate and the House of Representatives, as well as the DFA and the POEA
is that with respect to disputes involving claims of Filipino seafarers wherein the parties are covered by a
collective bargaining agreement, the dispute or claim should be submitted to the jurisdiction of a voluntary
arbitrator or panel of arbitrators. It is only in the absence of a collective bargaining agreement that parties may
opt to submit the dispute to either the NLRC or to voluntary arbitration. It is elementary that rules and
regulations issued by administrative bodies to interpret the law which they are entrusted to enforce, have the
force of law, and are entitled to great respect.
Facts:Nelson R. Dulay (Nelson, for brevity) was employed by [herein respondent] General Charterers, Inc. (GCI),
a subsidiary of co-petitioner [herein co-respondent] Aboitiz Jebsen Maritime, Inc. since 1986. He initially
worked as an ordinary seaman and later as bosun on a contractual basis. From September 3, 1999 up to July
19, 2000, Nelson was detailed in petitioners' vessel, the MV Kickapoo Belle. On August 13, 2000, or 25 days
after the completion of his employment contract, Nelson died due to acute renal failure secondary to
septicemia. At the time of his death, Nelson was a bona fide member of the Associated Marine Officers and
Seaman's Union of the Philippines (AMOSUP), GCI's collective bargaining agent. Nelson's widow, Merridy Jane,
thereafter claimed for death benefits through the grievance procedure of the Collective Bargaining Agreement
(CBA) between AMOSUP and GCI. However, on January 29, 2001, the grievance procedure was "declared
deadlocked" as petitioners refused to grant the benefits sought by the widow. On March 5, 2001, Merridy Jane
filed a complaint with the NLRC Sub-Regional Arbitration Board in General Santos City against GCI for death
and medical benefits and damages. On March 8, 2001, Joven Mar, Nelson's brother, received P20,000.00 from
[respondents] pursuant to article 20(A)2 of the CBA and signed a "Certification" acknowledging receipt of the
amount and releasing AMOSUP from further liability. Merridy Jane contended that she is entitled to the
aggregate sum of Ninety Thousand Dollars ($90,000.00) pursuant to [A]rticle 20 (A)1 of the CBA . . .xxx xxx
xxxMerridy Jane averred that the P20,000.00 already received by Joven Mar should be considered advance
payment of the total claim of US$90,000.[00].
[Herein respondents], on the other hand, asserted that the NLRC had no jurisdiction over the action
on account of the absence of employer-employee relationship between GCI and Nelson at the time of the
latter's death. Nelson also had no claims against petitioners for sick leave allowance/medical benefit by reason
of the completion of his contract with GCI. They further alleged that private respondent is not entitled to death
benefits because petitioners are only liable for such "in case of death of the seafarer during the term of his
contract pursuant to the POEA contract" and the cause of his death is not work-related. Petitioners admitted
liability only with respect to article 20(A)2 [of the CBA]. However, as petitioners stressed, the same was already
discharged.
The Labor Arbiter ruled in favor of private respondent. The Labor Arbiter also ruled that the
proximate cause of Nelson's death was not work-related. On appeal, [the NLRC] affirmed the Labor Arbiter's
decision as to the grant of death benefits under the CBA but reversed the latter's ruling as to the proximate
cause of Nelson's death. The CA ruled that while the suit filed by Merridy Jane is a money claim, the same
basically involves the interpretation and application of the provisions in the subject CBA. As such, jurisdiction
belongs to the voluntary arbitrator and not the labor arbiter.

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Issue: Whether or not the CA committed error in ruling that the Labor Arbiter has no jurisdiction over the case.
Held: No. SEC. 10. Money Claims. — Notwithstanding any provision of law to the contrary, the Labor Arbiters
of the National Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to hear
and decide, within ninety (90) calendar days after filing of the complaint, the claims arising out of an
employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas
deployment including claims for actual, moral, exemplary and other forms of damages.
Article 217 (c) of the Labor Code, on the other hand, states that:xxx xxx xxx
(c) Cases arising from the interpretation or implementation of collective bargaining agreements and those
arising from the interpretation or enforcement of company personnel policies shall be disposed by the Labor
Arbiter by referring the same to the grievance machinery and voluntary arbitration as may be provided in said
agreements.
Article 261 of the Labor Code: Jurisdiction of Voluntary Arbitrators or panel of Voluntary Arbitrators. — The
Voluntary Arbitrator or panel of Voluntary Arbitrators shall have original and exclusive jurisdiction to hear and
decide all unresolved grievances arising from the interpretation or implementation of the Collective Bargaining
Agreement and those arising from the interpretation or enforcement of company personnel policies referred
to in the immediately preceding article.
It is true that R.A. 8042 is a special law governing overseas Filipino workers. However, a careful reading of this
special law would readily show that there is no specific provision thereunder which provides for jurisdiction
over disputes or unresolved grievances regarding the interpretation or implementation of a CBA. Section 10 of
R.A. 8042, which is cited by petitioner, simply speaks, in general, of "claims arising out of an
employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas
deployment including claims for actual, moral, exemplary and other forms of damages." On the other hand,
Articles 217 (c) and 261 of the Labor Code are very specific in stating that voluntary arbitrators have
jurisdiction over cases arising from the interpretation or implementation of collective bargaining agreements.
Stated differently, the instant case involves a situation where the special statute (R.A. 8042) refers to a subject
in general, which the general statute (Labor Code) treats in particular. In the present case, the basic issue
raised by Merridy Jane in her complaint filed with the NLRC is: which provision of the subject CBA applies
insofar as death benefits due to the heirs of Nelson are concerned. The Court agrees with the CA in holding
that this issue clearly involves the interpretation or implementation of the said CBA. Thus, the specific or
special provisions of the Labor Code govern.
In any case, the Court agrees with petitioner's contention that the CBA is the law or contract between the
parties. Article 13.1 of the CBA entered into by and between respondent GCI and AMOSUP, the union to which
petitioner belongs, provides as follows: The Company and the Union agree that in case of dispute or conflict in
the interpretation or application of any of the provisions of this Agreement, or enforcement of Company
policies, the same shall be settled through negotiation, conciliation or voluntary arbitration. From the
foregoing, it is clear that the parties, in the first place, really intended to bring to conciliation or voluntary
arbitration any dispute or conflict in the interpretation or application of the provisions of their CBA. It is settled
that when the parties have validly agreed on a procedure for resolving grievances and to submit a dispute to
voluntary arbitration then that procedure should be strictly observed.

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LRTA v. Alvarez, November 18, 2016 (related to GOCC)
Doctrine: (main doctrine under the article)

For having conducted business through a private corporation, GOCC must submit itself to the provisions
governing private corporations, including the Labor Code. Thus, the money claim brought against it falls under
the original and exclusive jurisdiction of the LA.

FACTS:

LRTA is a government-owned and controlled corporation created by virtue of Executive Order No. 603, for the purpose of
the construction, operation, maintenance, and/or lease of LRT system in the Philippines. Private respondents are former
employees of Meralco Transit Organization, Inc. (METRO). On June 8, 1984, METRO and LRTA entered into an agreement
called "Agreement for the Management and Operation of the Light Rail Transit System" (AMO-LRTS) for the operation
and management of the light rail transit system. LRTA shouldered and provided for all the operating expenses of METRO.
Also, METRO signed a Collective Bargaining Agreement (CBA) with its employees wherein provisions on wage increases
and benefits were approved by LRTA's Board of Directors.

However, on April 7, 1989, the Commission on Audit (COA) nullified and voided the AMO-LRTS. To resolve the issue, LRTA
decided to acquire METRO by purchasing all of its shares of stocks on June 8, 1989. METRO, thus, became a
wholly-owned subsidiary of LRTA. Since then, METRO has been renamed to Metro Transit Organization, Inc. Also, by
virtue of the acquisition, LRTA appointed the new set of officers, from chairman to members of the board, and top
management of METRO. LRTA and METRO declared and continued the implementation of the AMO-LRTS and the
non-interruption of employment relations of the employees of METRO. They likewise continued the establishment and
funding of the Metro, Inc. Employees Retirement Plan which covers the past services of all METRO regular employees
from the date of their employment. They confirmed that all CBAs remained in force and effect. LRTA then sanctioned the
CBA's of the union of rank and file employees and the union of supervisory employees.

On November 17, 1997, the METRO general manager (who was appointed by LRTA) announced in a memorandum that
its board of directors approved the severance/resignation benefit of METRO employees at 1 ½ months salaries for every
year of service.

On July 25, 2000, the union of rank and file employees of METRO declared a strike over a retirement fund dispute. By
virtue of its ownership of METRO, LRTA assumed the obligation to update the Metro, Inc. Employees Retirement Fund
with the Bureau of Treasury.

A few months later, on September 30, 2000, LRTA stopped the operation of METRO. On April 5, 2001, METRO's Board of
Directors approved the release and payment of the first fifty percent (50%) of the severance pay to the displaced METRO
employees, including private respondents, who were issued certifications of eligibility for severance pay along with the
memoranda to receive the same.

LRTA earmarked an amount of P271,000,000.00 for the severance pay of METRO employees in its approved corporate
budget for the year 2002. However, METRO only paid the first fifty percent (50%) of the severance pay of private
respondents. Private respondents repeatedly and formally asked LRTA, being the principal owner of METRO, to pay the
balance of their severance pay, but to no avail. Thus, they filed a complaint before the Arbitration Branch of the NLRC,
docketed as NLRC NCR Case No. 00-08-09472-04, praying for the payment of 13tmonth pay, separation pay, and refund
of salary deductions, against LRTA and METRO.

ISSUE/S:

Whether LRTA can be made liable by the labor tribunals for private respondents' money claim despite the absence of an
employer-employee relationship, and though LRTA is a government-owned and controlled corporation
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RULING:

YES.

In Mendoza, this Court upheld the jurisdiction of the labor tribunals over LRTA, citing Philippine National Bank v. Pabalan:

xxX By engaging in a particular business thru the instrumentality of a corporation, the government divests itself pro hac
vice of its sovereign character, so as to render the corporation subject to the rules of law governing private corporations.

This Court further ruled that LRTA must submit itself to the provisions governing private corporations, including the
Labor Code, for having conducted business through a private corporation, in this case, METRO.

In this case, the NRC accordingly declared, "ILRTA's] contractual commitments with [METRO] and its employees arose out
of its business relations with (METRO] which is private in nature. Such private relation was not changed notwithstanding
the subsequent acquisition by [LRTA] of full ownership of METRO] and take over of its business operations at LRT"

In view of the foregoing, we rule that the CA did not err when it upheld the jurisdiction of the labor tribunals over private
respondents' money claims against LRTA.

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GSIS v. NLRC, November 17, 2010 (related to GOCC)
Doctrine:
In the event that the contractor or subcontractor fails to pay the wages of his employees in accordance with
the LC, the employer shall be jointly and severally liable with his contractor or subcontractor to such
employees to the extent of the work performed under the contract, in the same manner and extent that he is
liable to employees directly employed by him.

Facts:
Respondents Dionisio Banlasan, et. al. were security guards under DNL Security Agency (DNL Security) assigned
to petitioner GSIS Tacloban City office.
In February 1993, DNL Security informed respondents that its service contract with petitioner was terminated.
Despite this they were instructed by DNL to continue reporting for work. Respondents worked until April 20,
1993, but without receiving their wages; after which, they were terminated from employment.
Respondent filed a complaint with the NLRC against DNL Security and petitioner for illegal dismissal,
separation pay, salary differential, 13th month pay, and payment of unpaid salary.

LA/NLRC Ruling:
LA found that there was no illegal dismissal because the employment of security guards is dependent on the
service contract between security agency and its client. However, by reason of social juctice, LA ordered DNL
and GSIS to pay respondent separation pay, salary differential, and 13th month pay.
NLRC, dismissed DNL Securitys motion for reconsideration as it was not legally perfected, and petitioner’s
appeal, having been filed beyond the reglementary period.
CA Ruling:
CA affirmed NLRC ruling.

Issue:
Whether or not GSIS, not having an actual and direct ER-EE relationship with private respondents is absolved
from liability to the latter.

Ruling:
NO. The fact that there is no actual and direct employer-employee relationship between petitioner and
respondents does not absolve the former from liability for the latters monetary claims. When petitioner
contracted DNL Security’s services, petitioner became an indirect employer of respondents, pursuant to Article
107 of the Labor Code.
After DNL Security failed to pay respondents the correct wages and other monetary benefits, petitioner, as
principal, became jointly and severally liable, as provided in Articles 106 and 109 of the Labor Code.

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The contractor or subcontractor is made liable by virtue of his or her status as a direct employer, and the
principal as the indirect employer of the contractors employees. This liability facilitates, if not guarantees,
payment of the workers compensation, thus, giving the workers ample protection as mandated by the 1987
Constitution. This is not unduly burdensome to the employer. Should the indirect employer be constrained to
pay the workers, it can recover whatever amount it had paid in accordance with the terms of the service
contract between itself and the contractor.
Petitioners liability covers the payment of respondents salary differential and 13th month pay during the time
they worked for petitioner. In addition, petitioner is solidarily liable with DNL Security for respondent’s unpaid
wages from February 1993 until April 20, 1993. While it is true that respondents continued working for
petitioner after the expiration of their contract, based on the instruction of DNL Security, petitioner did not
object to such assignment and allowed respondents to render service. Thus, petitioner impliedly approved the
extension of respondents services. Petitioner cannot be allowed to deny its obligation to respondents after it
had benefited from their services. Petitioners liability, however, cannot extend to the payment of separation
pay.
Lastly, petitioner’s argument that the enforcement of the decision is impossible because its charter
unequivocally exempts it from execution is untenable.
The processual exemption of the GSIS funds and properties under Section 39 of the GSIS Charter should be
read consistently with its avowed principal purpose: to maintain actuarial solvency of the GSIS in the
protection of assets which are to be used to finance the retirement, disability and life insurance benefits of its
members.
Furthermore, GSIS is granted the ancillary power to invest in business and other ventures for the benefit of the
employees, by using its excess funds for investment purposes. In the exercise of such function and power, the
GSIS is allowed to assume a character similar to a private corporation. Thus, it may sue and be sued, as also,
explicitly granted by its charter x x x.
*(The Court notes, however, while it agrees with the NLRC’s dismissal petitioners appeal for being filed out of
time, it nonetheless delved into the merits of the case)

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Duty Free Phils. V. Mojica, September 30, 2005 (related to GOCC)

Doctrine:
The established rule is that the hiring and firing of employees of government-owned and controlled
corporations are governed by provisions of the Civil Service Law and Civil Service Rules and Regulations.
Facts:

The Discipline Committee of Duty Free Philippines (DFP)|||found Stock Clerk Rossano A. Mojica guilty of
Neglect of Duty by causing considerable damage to or loss of materials, assets and property of DFP. Thus,
Mojica was considered forcibly resigned from the service with forfeiture of all benefits except his salary and
the monetary value of the accrued leave credits.

Mojica was formally informed of his forced resignation. Thereupon, he filed a complaint for illegal dismissal
with prayer for reinstatement, payment of full back wages, damages, and attorney's fees, against DFP before
the National Labor Relations Commission (NLRC).

The Labor Arbiter rendered decision finding Mojica to be illegally dismissed. The NLRC reversed the ruling of
the arbiter. It found that the dismissal was valid and with just cause. Mojica's motion for reconsideration was
denied, hence he filed a Petition for Certiorari under Rule 65 of the Rules of Court before the Court of Appeals.

The appellate court agreed with the arbiter that Mojica was not guilty of gross or habitual negligence that
would warrant his dismissal. It found that there was no convincing evidence to prove that Mojica connived
with other personnel in pilfering the stocks of DFP.
Issue:
Whether Mojica’s resort to the labor arbiter was proper.
Ruling:

No. Respondent Mojica is a civil service employee; therefore, jurisdiction is lodged not with the NLRC,
but with the Civil Service Commission.

DFP was created under Executive Order (EO) No. 46 on September 4, 1986 primarily to augment the
service facilities for tourists and to generate foreign exchange and revenue for the government. In order for
the government to exercise direct and effective control and regulation over the tax and duty free shops, their
establishment and operation was vested in the Ministry, now Department of Tourism (DOT), through its
implementing arm, the Philippine Tourism Authority (PTA). All the net profits from the merchandising
operations of the shops accrued to the DOT.

As provided under Presidential Decree (PD) No. 564, PTA is a corporate body attached to the DOT. As an
attached agency, the recruitment, transfer, promotion and dismissal of all its personnel was governed by a
merit system established in accordance with the civil service rules. In fact, all PTA officials and employees are
subject to the Civil Service rules and regulations.
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Accordingly, since DFP is under the exclusive authority of the PTA, it follows that its officials and employees are
likewise subject to the Civil Service rules and regulations. Clearly then, Mojica's recourse to the Labor Arbiter
was not proper. He should have followed the procedure laid down in DFP's merit system and the Civil Service
rules and regulations.

Subsequently, EO No. 180 defined "government employees" as all employees of all branches, subdivisions,
instrumentalities, and agencies, of the Government, including government-owned or controlled corporations
with original charters.

EO No. 292 or The Administrative Code of 1987 empowered the Civil Service Commission to hear and decide
administrative cases instituted by or brought before it directly or on appeal, including contested appointments,
and review decisions and actions of its offices and of the agencies attached to it.

Thus, we held in Zamboanga City Water District v. Buat that:

There is no dispute that petitioner, a water district with an original charter, is a
government-owned and controlled corporation. The established rule is that the hiring and
firing of employees of government-owned and controlled corporations are governed by
provisions of the Civil Service Law and Civil Service Rules and Regulations. Jurisdiction over
the strike and the dismissal of private respondents is therefore lodged not with the NLRC but
with the Civil Service Commission.

In sum, the labor arbiter and the NLRC erred in taking cognizance of the complaint as jurisdiction over the
complaint for illegal dismissal is lodged with the Civil Service Commission. The Court of Appeals likewise erred
in sustaining the labor arbiter.

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WPP Marketing Comunications v. Galera, March 25, 2010 (with foreign
element)
Doctrine:
Galera was an employee and not a corporate officer by subjecting WPP and Galera’s relationship to
the four-fold test: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power
of dismissal; and (d) the employer’s power to control the employee with respect to the means and methods by
which the work is to be accomplished.
Facts:
Jocelyn Galera (GALERA), an American citizen who was recruited from USA by John Steedman to work in the
Philippines for private respondent WPP Marketing Communications, Inc. (WPP), a corporation registered and
operating under the laws of Philippines. GALERA accepted the offer and she signed an Employment Contract
entitled "Confirmation of Appointment and Statement of Terms and Conditions". Employment of GALERA with
private respondent WPP became effective on September 1, 1999 solely on the instruction of the CEO and upon
signing of the contract, without any further action from the Board of Directors of WPP.

Four months had passed when WPP filed before the Bureau of Immigration an application for Galera to receive
a working visa, wherein she was designated as Vice President of WPP. Galera alleged that she was constrained
to sign the application in order that she could remain in the Philippines and retain her employment.

Then, on December 14, 2000, Galera alleged she was verbally notified by private respondent STEEDMAN that
her services had been terminated from private respondent WPP. A termination letter followed the next day.

On 3 January 2001, Galera filed a complaint for illegal dismissal, holiday pay, service incentive leave pay, 13th
month pay, incentive plan, actual and moral damages, and attorney’s fees against WPP and/or John Steedman
(Steedman), Mark Webster (Webster) and Nominada Lansang (Lansang).

LA RULING: Labor Arbiter Edgardo M. Madriaga (Arbiter Madriaga) held WPP, Steedman, Webster, and Lansang
liable for illegal dismissal and damages. Arbiter Madriaga stated that Galera was not only illegally dismissed
but was also not accorded due process. The law mandates that the dismissal must be properly done otherwise,
the ermination is gravely defective and may be declared unlawful as we hereby hold [Galera’s] dismissal to be
illegal and unlawful. Where there is no showing of a clear, valid and legal cause for the termination of
employment, the law considers the matter a case of illegal dismissal and the burden is on the employer to
prove that the termination was for a valid or authorized cause.

NLRC RULING: NLRC reversed the ruling of Arbiter Madriaga. The NLRC stressed that Galera was WPP’s
Vice-President, and therefore, a corporate officer at the time she was removed by the Board of Directors on 14
December 2000. It matters not that her having been elected by the Board to an added position of being a
member of the Board of Directors did not take effect as her May 31, 2000 election to such added position was
conditioned to be effective upon approval by SEC of the Amended By-Laws, an approval which took place only
in February 21, 2001, i.e., after her removal on December 14, 2000. What counts is, at the time of her removal,
she continued to be WPP’s Vice-President, a corporate officer, on hold over capacity.

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CA RULING: Reversed and set aside the decision of the NLRC. The NLRC’s dismissal of Galera’s appeal is not in
accord with jurisprudence. A person could be considered a "corporate officer" only if appointed as such by a
corporation’s Board of Directors, or if pursuant to the power given them by either the Articles of Incorporation
or the By-Laws. A corporation, through its board of directors, could only act in the manner and within the
formalities, if any, prescribed by its charter or by the general law. If the action of the Board is ultra vires such is
motu proprio void ab initio and without legal effect whatsoever.

Issue:

WON NLRC has jurisdiction over [Galera’s] complaint because she was not an employee. She was a corporate
officer of WPP from the beginning of her term until her removal from office. – YES

Ruling:

YES.

Galera is a regular employee of WPP, thus, the NLRC to have jurisdiction over the present case. Corporate
officers are given such character either by the Corporation Code or by the corporation’s by-laws. Under Section
25 of the Corporation Code, the corporate officers are the president, secretary, treasurer and such other
officers as may be provided in the by-laws.

An examination of WPP’s by-laws resulted in a finding that Galera’s appointment as a corporate officer
(Vice-President with the operational title of Managing Director of Mindshare) during a special meeting of
WPP’s Board of Directors is an appointment to a non-existent corporate office. WPP’s by-laws provided for only
one Vice-President. At the time of Galera’s appointment on 31 December 1999, WPP already had one Vice-
President in the person of Webster. Galera cannot be said to be a director of WPP also because all five
directorship positions provided in the by-laws are already occupied. Finally, WPP cannot rely on its Amended
By-Laws to support its argument that Galera is a corporate officer. The Amended By-Laws provided for more
than one Vice-President and for two additional directors. Even though WPP’s stockholders voted for the
amendment on 31 May 2000, the SEC approved the amendments only on 16 February 2001. Galera was
dismissed on 14 December 2000. WPP, Steedman, Webster, and Lansang did not present any evidence that
Galera’s dismissal took effect with the action of WPP’s Board of Directors.

Another indicator that she was a regular employee and not a corporate officer is Section 14 of the contract,
which clearly states that she is a permanent employee — not a Vice- President or a member of the Board of
Directors.

Thus, Galera being an employee, the Labor Arbiter and the NLRC have jurisdiction over the present case.

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Pakistan International Airlines v. Ople, September 28, 1990 (with foreign
element)
Doctrine: The Regional Director is authorized to order reinstatement and has jurisdiction over termination
cases; Venue of settlement would still be in the Philippines despite the presence of a stipulation that says
otherwise.

Facts:

On 2 December 1978, petitioner Pakistan International Airlines Corporation ("PIA"), a foreign corporation
licensed to do business in the Philippines, executed in Manila two (2) separate contracts of employment, one
with private respondent Ethelynne B. Farrales and the other with private respondent Ma. M.C. Mamasig.

On 2 August 1980, roughly one (1) year and four (4) months prior to the expiration of the contracts of
employment, PIA through Mr. Oscar Benares, counsel for and official of the local branch of PIA, sent separate
letters both dated 1 August 1980 to private respondents Farrales and Mamasig advising both that their
services as flight stewardesses would be terminated "effective 1 September 1980, conformably to clause (b) of
the employment agreement [they had] executed with [PIA].”

On 9 September 1980, private respondents Farrales and Mamasig jointly instituted a complaint for illegal
dismissal and non-payment of company benefits and bonuses, against PIA with the then Ministry of Labor and
Employment ("MOLE"). The PIA submitted its position paper and there claimed that both private respondents
were habitual absentees; that both were in the habit of bringing in from abroad sizeable quantities of
"personal effects";and that PIA personnel at the Manila International Airport had been discreetly warned by
customs officials to advise private respondents to discontinue that practice. PIA further claimed that the
services of both private respondents were terminated pursuant to the provisions of the employment contract.

In his Order dated 22 January 1981, Regional Director Francisco L. Estrella ordered the reinstatement of private
respondents with full backwages or, in the alternative, the payment to them of the amounts equivalent to their
salaries for the remainder of the fixed three-year period of their employment contracts; the payment to
private respondent Mamasig of an amount equivalent to the value of a round trip ticket Manila-USA-Manila;
and payment of a bonus to each of the private respondents equivalent to their one-month salary.

In the instant Petition for Certiorari, petitioner PIA assails the award of the Regional Director and the Order of
the Deputy Minister as having been rendered without jurisdiction; for having been rendered without support
in the evidence of record since, allegedly, no hearing was conducted by the hearing officer, Atty. Jose M.
Pascual; and for having been issued in disregard and in violation of petitioner's rights under the employment
contracts with private respondents.

Issue:

WON the Regional Director had no jurisdiction

Held:

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Rule XIV, Book No. 5 of the Rules and Regulations Implementing the Labor Code, made clear that in case of a
termination without the necessary clearance, the Regional Director was authorized to order the reinstatement
of the employee concerned and the payment of backwages; necessarily, therefore, the Regional Director must
have been given jurisdiction over such termination cases.

Policy Instruction No. 14 issued by the Secretary of Labor, dated 23 April 1976, was similarly very explicit about
the jurisdiction of the Regional Director over termination of employment cases:

Under PD 850, termination cases — with or without CBA — are now placed under the original jurisdiction of
the Regional Director. Preventive suspension cases, now made cognizable for the first time, are also placed
under the Regional Director. Before PD 850, termination cases where there was a CBA were under the
jurisdiction of the grievance machinery and voluntary arbitration, while termination cases where there was no
CBA were under the jurisdiction of the Conciliation Section.

Foreign element:

Petitioner PIA cannot take refuge in paragraph 10 of its employment agreement which specifies, firstly, the law
of Pakistan as the applicable law of the agreement and, secondly, lays the venue for settlement of any dispute
arising out of or in connection with the agreement "only [in] courts of Karachi Pakistan".

Even a cursory scrutiny of the relevant circumstances of this case will show the multiple and substantive contacts
between Philippine law and Philippine courts, on the one hand, and the relationship between the parties, upon the
other: the contract was not only executed in the Philippines, it was also performed here, at least partially; private
respondents are Philippine citizens and respondents, while petitioner, although a foreign corporation, is licensed to do
business (and actually doing business) and hence resident in the Philippines; lastly, private respondents were based in
the Philippines in between their assigned flights to the Middle East and Europe. All the above contacts point to the
Philippine courts and administrative agencies as a proper forum for the resolution of contractual disputes between the
parties.

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PNB v. Cabansag, June 21, 2005 (with foreign element)
DOCTRINE: Labor arbiters have original and exclusive jurisdiction over claims arising from employer-employee
relations including termination disputes involving all workers, including OFWs.
FACTS: Florence Cabansag went to Singapore as a tourist. While she was there, she looked for a job and
eventually applied with the Singapore Branch of the Philippine National Bank. PNB is a private banking
corporation organized and existing under Philippine laws. She was eventually employed and was issued an
employment pass. In her job offer, it was stated, among others, that she was to be put on probation for 3
months and termination of her employment may be made by either party after 1 day notice while on
probation, and 1 month notice or 1 month pay in lieu of notice upon confirmation. She accepted the terms and
was issued an OEC by the POEA. She was commended for her good work. However, she was informed by
Ruben Tobias, the bank president, that she would have to resign in line with some cost cutting and realignment
measures of the company. She refused but was informed by Tobias that if she does not resign, he will
terminate her instead.
ISSUE/S:

1. Whether or not the arbitration branch of the NLRC has jurisdiction

2. Whether or not the arbitration of the NLRC in the NCR is the proper venue
3. Whether or not Cabansag was illegally dismissed

RULING:

1. Labor arbiters have original and exclusive jurisdiction over claims arising from employer-employee
relations including termination disputes involving all workers, including OFWs. Here, Cabansag applied
for and secured an OEC from the POEA through the Philippine Embassy. The OEC authorized her
working status in a foreign country and entitled her to all benefits and processes under our statutes.
Although she may have been a direct hire at the commencement of her employment, she became an
OFW who was covered by Philippine labor laws and policies upon certification by the POEA. When she
was illegally terminated, she already possessed the POEA employment certificate.
2. A migrant worker “refers to a person who is to be engaged, is engaged or has been engaged in a
remunerated activity in a state of which he or she is not a legal resident; to be used interchangeably
with overseas Filipino worker.” Here, Cabansag was a Filipino, not a legal resident of Singapore, and
employed by petitioner in its branch office in Singapore. She is clearly an OFW/migrant worker. Thus,
she has the option where to file her Complaint for illegal dismissal. She can either file at the Regional
Arbitration Branch where she resides or the RAB where the employer is situated. Thus, in filing her
Complaint before the RAB office in Quezon City, she has made a valid choice of proper venue.
3. The appellate court was correct in holding that respondent was already a regular employee at the time
of her dismissal, because her three-month probationary period of employment had already ended.
This ruling is in accordance with Article 281 of the Labor Code: “An employee who is allowed to work
after a probationary period shall be considered a regular employee.” Indeed, petitioner recognized
respondent as such at the time it dismissed her, by giving her one month’s salary in lieu of a one-month
notice, consistent with provision No. 6 of her employment Contract.

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Manila Hotel v. NLRC, October 13, 2000 (with foreign element)
THE MANILA HOTEL CORP. and MANILA HOTEL INTL. LTD., petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION,
ARBITER CEFERINA J. DIOSANA and MARCELO G. SANTOS, respondents.

[G.R. No. 120077. October 13, 2000.]

Doctrine:

Under the rule of forum non conveniens, a Philippine court or agency may assume jurisdiction over the case if it chooses
to do so provided: (1) that the Philippine court is one to which the parties may conveniently resort to; (2) that the
Philippine court is in a position to make an intelligent decision as to the law and the facts; and (3) that the Philippine
court has or is likely to have power to enforce its decision.

Facts:

Petitioners are the Manila Hotel Corporation ("MHC") and the Manila Hotel International Company, Limited ("MHICL").
MHICL is a corporation duly organized and existing under the laws of Hong Kong. MHC is an "incorporator" of MHICL,
owning 50% of its capital stock. Palace Hotel is a member of the Manila Hotel Group.

Private respondent Marcelo Santos was an overseas worker employed as printer at the Mazoon Printing Press, Sultanate
of Oman. While in Oman, he received a letter from Mr. Gerhard R. Shmidt, General Manager of Palace Hotel, Beijing,
China, offering him the same position as printer with a higher monthly salary and increased benefits. Santos signified his
acceptance. Subsequently, an employment contract for a period of two years was perfected.

After a few months, Palace Hotel informed respondent Santos by letter signed by Mr. Shmidt that his employment at the
Palace Hotel print shop will be terminated due to business reverses brought about by the political upheaval in China. On
February 20, 1990, respondent Santos filed a complaint for illegal dismissal against MHC, MHICL, the Palace Hotel and
Mr. Shmidt before the Arbitration Branch, National Capital Region, National Labor Relations Commission.

The Labor Arbiter decided against MHC and MHICL. MHC and MHICL appealed to the NLRC which decided in favor of
Santos. Hence, this appeal. Petitioner contended that the issue being with foreign element, Philippine Court has no
jurisdiction over it.

Issue:

Whether NLRC, or any Philippine court or agency may assume jurisdiction automatically over cases involving Filipino
citizens.

Ruling:

No. We note that the main aspects of the case transpired in two foreign jurisdictions and the case involves purely foreign
elements. The only link that the Philippines has with the case is that respondent Santos is a Filipino citizen. The Palace
Hotel and MHICL are foreign corporations. Not all cases involving our citizens can be tried here.

Respondent Santos was hired directly by the Palace Hotel, a foreign employer, through correspondence sent to the
Sultanate of Oman, where respondent Santos was then employed. He was hired without the intervention of the POEA or
any authorized recruitment agency of the government.

Under the rule of forum non conveniens, a Philippine court or agency may assume jurisdiction over the case if it chooses
to do so provided: (1) that the Philippine court is one to which the parties may conveniently resort to; (2) that the
Philippine court is in a position to make an intelligent decision as to the law and the facts; and (3) that the Philippine
court has or is likely to have power to enforce its decision. The conditions are unavailing in the case at bar.

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We fail to see how the NLRC is a convenient forum given that all the incidents of the case — from the time of
recruitment, to employment to dismissal occurred outside the Philippines. The inconvenience is compounded by the fact
that the proper defendants, the Palace Hotel and MHICL are not nationals of the Philippines. Neither are they "doing
business in the Philippines." Likewise, the main witnesses, Mr. Shmidt and Mr. Henk are non-residents of the Philippines.

Neither can an intelligent decision be made as to the law governing the employment contract as such was perfected in
foreign soil. This calls to for the application of the principle of lex loci contractus (the law of the place where the contract
was made). The employment contract was not perfected in the Philippines. Respondent Santos signified his acceptance
by writing a letter while he was in the Republic of Oman. This letter was sent to the Palace Hotel in the People's Republic
of China.

Neither can the NLRC determine the facts surrounding the alleged illegal dismissal as all acts complained of took place in
Beijing, People's Republic of China. The NLRC was not in a position to determine whether the Tiannamen Square incident
truly adversely affected operations of the Palace Hotel as to justify respondent Santos' retrenchment.

Dispositive Portion: WHEREFORE, the Court hereby GRANTS the petition for certiorari and ANNULS the orders and
resolutions of the National Labor Relations Commission.

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Saudi Arabian Airlines v. Rebesencio, January 14, 2015 (with foreign
element)
Doctrine: While a Philippine tribunal (acting as the forum court) is called upon to respect the parties’ choice of governing
law, such respect must not be so permissive as to lose sight of considerations of law, morals, good customs, public order,
or public policy that underlie the contract central to the controversy. We emphasize the glaringly discriminatory nature of
Saudia’s policy. As argued by respondents, Saudia’s policy entails the termination of employment of flight attendants
who become pregnant. At the risk of stating the obvious, pregnancy is an occurrence that pertains specifically to women.
Saudia’s policy excludes from and restricts employment on the basis of no other consideration but sex.

Facts: Ma. Jopette M. Rebesencio (Rebesencio) and the other respondents were recruited and hired by Saudi
Airlines as Temporary Flight Attendants. After undergoing seminars required by the POEA for deployment
overseas and trainings offered by Saudi Airlines, they eventually became Permanent Flight Attendants and
entered into cabin attendant contracts with Saudi Airlines and continued their employment until they were
separated from service on various dates. They contended that the termination of their employment was illegal
because it was made solely because they were pregnant.

Respondents filed a Complaint with the LA against Saudi Airlines and its officers for illegal dismissal and for
underpayment of salary, overtime pay, premium pay for holiday, rest day, premium, service incentive leave pay,
13th month pay, separation pay, night shift differentials, medical expense reimbursements, retirement
benefits, illegal deduction, lay-over expense and allowances, moral and exemplary damages, and attorney’s
fees. Saudi Airlines, on the other hand, assailed the jurisdiction of the Labor Arbiter and anchored their
defense on its “Unified Employment Contract for Female Cabin Attendants” (Unified Contract) which provides
that the employment of a Flight Attendant who becomes pregnant is rendered void. It claimed that all the
determining points of contract referred to foreign law and insisted that the complaint ought to be dismissed on
the ground of forum non conveniens. It added that respondents had no cause of action as they resigned
voluntarily.

Executive Labor Arbiter dismissed the complaint for lack of merit/jurisdiction. NLRC reversed the ruling of the
LA and ruled that considering that complainants-appellants are OFWs, the LA and the NLRC has jurisdiction to
hear and decide their complaint for illegal termination while it noted on the matter of forum non conveniens
that there were no special circumstances that warranted its abstention from exercising jurisdiction and that
there was nothing on record to support Saudi Airlines’ claim that respondents resigned voluntarily.

Issue:

Whether or not the Labor Arbiter and the National Labor Relations Commission may exercise jurisdiction over
Saudi Arabian Airlines and apply Philippine law in adjudicating the present dispute?

Ruling:

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Yes. The court held that a choice of law governing the validity of contracts or the interpretation of its
provisions does not necessarily imply forum non conveniens. Choice of law and forum non conveniens are
entirely different matters. Choice of law provisions are an offshoot of the fundamental principle of autonomy
of contracts. In contrast, forum non conveniens is a device akin to the rule against forum shopping. It is
designed to frustrate illicit means for securing advantages and vexing litigants that would otherwise be
possible if the venue of litigation (or dispute resolution) were left entirely to the whim of either party.

Court emphasized the glaringly discriminatory nature of Saudi Airlines’ policy which excludes from and restricts
employment on the basis of no other consideration but sex. While the Court does not lose sight of the reality
that pregnancy does present physical limitations that may render difficult the performance of functions
associated with being a flight attendant nevertheless, it would be the height of iniquity to view pregnancy as a
disability so permanent and immutable that it must entail the termination of one’s employment.

The case does not entail a preponderance of linkages that favor a foreign jurisdiction. The circumstances of the
parties and their relation do not approximate the circumstances enumerated in Puyat, which this court
recognized as possibly justifying the desistance of Philippine tribunals from exercising jurisdiction.

First, there is no basis for concluding that the case can be more conveniently tried elsewhere. Saudi Airlines is
doing business in the Philippines. For their part, all four (4) respondents are Filipino citizens maintaining
residence in the Philippines and, apart from their previous employment with Saudi Airlines, have no other
connection to the Kingdom of Saudi Arabia. It would even be to respondents' inconvenience if this case were
to be tried elsewhere. Second, the records are bereft of any indication that respondents filed their Complaint
in an effort to engage in forum shopping or to vex and inconvenience Saudi Airlines. Third, there is no
indication of "unwillingness to extend local judicial facilities to non-residents or aliens." That Saudi Airlines has
managed to bring the present controversy all the way to the Supreme Court proves this. Fourth, it cannot be
said that the local judicial machinery is inadequate for effectuating the right sought to be maintained.
Summons was properly served on Saudi Airlines and jurisdiction over its person was validly acquired. There is
no basis for concluding that "Saudia Jeddah" is distinct from "Saudia Manila." Lastly, there is not even room for
considering foreign law. Philippine law properly governs the present dispute.

Even if we were to assume, for the sake of discussion, that it is the laws of Saudi Arabia which should apply, it
does not follow that Philippine tribunals should refrain from exercising jurisdiction. To. recall our
pronouncements in Puyat, as well as in Bank of America, NT&SA, it is not so much the mere applicability of
foreign law which calls into operation forum non conveniens. Rather, what justifies a court's desistance from
exercising jurisdiction is “the difficulty of ascertaining foreign law" or the inability of a "Philippine Court to
make an intelligent decision as to the law."

Case is remanded to the LA to make a detailed computation of the amounts due to respondents.

NOTE:

Accordingly, under the doctrine of forum non conveniens, "a court, in conflicts of law cases, may refuse
impositions on its jurisdiction where it is not the most 'convenient' or available forum and the parties are not
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precluded from seeking remedies elsewhere." In Puyat v. Zabarte, this court recognized the following
situations as among those that may warrant a court's desistance from exercising jurisdiction:

1) The belief that the matter can be better tried and decided elsewhere, either because the main
aspects of the case transpired in a foreign jurisdiction or the material witnesses have their
residence there;

2) The belief that the non-resident plaintiff sought the forum, a practice known as forum shopping,
merely to secure procedural advantages or to convey or harass the defendant;

3) The unwillingness to extend local judicial facilities to non-residents or aliens when the docket may
already be overcrowded;

4) The inadequacy of the local judicial machinery for effectuating the right sought to be maintained;
and

5) The difficulty of ascertaining foreign law.

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Continental Micronesia v. Basco, September 23, 2015 (with foreign
element)

Doctrine: Essential element of conflict rules is the indication of a "test" or "connecting factor" or "point of
contact". Choice-of-law rules invariably consist of a factual relationship (such as property right, contract claim)
and a connecting fact or point of contact, such as the situs of the res, the place of celebration, the place of
performance, or the place of wrongdoing.

Facts: Continental Micronesia, Inc. (CMI) is a foreign corporation organized and existing under the laws of and
domiciled in the United States of America (US). It is licensed to do business in the Philippines. Basso, a US
citizen, resided in the Philippines prior to his death.

The Managing Director-Asia of Continental Airlines (Continental), offered Basso the position of General
Manager of the Philippine Branch of Continental which Basso accepted but it was not until much later that
Basso received and signed the employment contract.

CMI took over the Philippine operations of Continental with Basso retaining his position as General Manager.
Basso then received a letter from Mr. Schulz, CMI's Vice President of Marketing and Sales, informing Basso that
he has agreed to work in CMI as a consultant on an "as needed basis” Basso subsequently wrote another letter
addressed to Ms. Woodward of CMI's Human Resources Department inquiring about the status of his
employment to which Ms. Woodward responded that pursuant to the employment contract, Basso could be
terminated at will upon a thirty-day notice. Ms. Woodward also reminded Basso of the telephone conversation
between him, Mr. Schulz and Ms. Woodward where they informed him of the company's decision to relieve
him as General Manager. CMI offered Basso a severance pay, in consideration of the Php1,140,000.00 housing
advance that CMI promised him.

Basso filed a Complaint with the LA for illegal dismissal with moral and exemplary damages against CMI. CMI
filed a motion to dismiss on the ground of lack of jurisdiction over the person of CMI and the subject matter of
the controversy which the LA granted. Applying the doctrine of lex loci contractus, the LA held that the terms
and provisions of the employment contract show that the parties did not intend to apply our Labor Code. The
Labor Arbiter also held that no employer-employee relationship existed between Basso and the branch office
of CMI in the Philippines, but between Basso and the foreign corporation itself. LA agreed with CMI that the
employment contract was executed in the US "since the letter-offer was under the Texas letterhead and the
acceptance of Complainant was returned there." Thus, applying the doctrine of lex loci celebrationis, US laws
apply. Also, applying lex loci contractus, the Labor Arbiter ruled that the parties did not intend to apply
Philippine laws.

NLRC then reversed and set aside LA ruling. It ruled that the Labor Arbiter acquired jurisdiction over the case
when CMI voluntarily submitted to his office's jurisdiction. On the merits, the NLRC agreed with the LA that
Basso was dismissed for just and valid causes on the ground of breach of trust and loss of confidence.

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CA granted Basso’s petition and declared the dismissal illegal.

Issues:

1. Whether the CA erred in ruling that the LA and the NLRC had jurisdiction to hear and try the illegal dismissal
case.

2. Whether the CA erred in finding that Basso was not validly dismissed on the ground of loss of trust or
confidence

Ruling:

1. No. Court held that in Hasegawa v. Kitamura, in the judicial resolution of conflict-of-laws problems, three
consecutive phases are involved: jurisdiction, choice of law, and recognition and enforcement of judgments. In
resolving the conflicts problem, courts should ask the following questions:

A. "Under the law, do I have jurisdiction over the subject matter and the parties to this case?

B. "If the answer is yes, is this a convenient forum to the parties, in light of the facts?

C. "If the answer is yes, what is the conflicts rule for this particular problem?

D. "If the conflicts rule points to a foreign law, has said law been properly pleaded and proved by the one
invoking it?

E. "If so, is the application or enforcement of the foreign law in the forum one of the basic exceptions to the
application of foreign law? In short, is there any strong policy or vital interest of the forum that is at stake in
this case and which should preclude the application of foreign law?

A. This case stemmed from an illegal dismissal complaint. The Labor Code, under Article 217, clearly
vests original and exclusive jurisdiction to hear and decide cases involving termination disputes to
the Labor Arbiter. Hence, the Labor Arbiter and the NLRC have jurisdiction over the subject matter
of the case. As regards jurisdiction over the parties, we agree with the Court of Appeals that the
Labor Arbiter acquired jurisdiction over the person of Basso, notwithstanding his citizenship, when
he filed his complaint against CMI. On the other hand, jurisdiction over the person of CMI was
acquired through the coercive process of service of summons. We note that CMI never denied that
it was served with summons.

B. Under the doctrine of forum non conveniens, a Philippine court in a conflict-of-laws case may
assume jurisdiction if it chooses to do so, provided, that the following requisites are met:

(1) that the Philippine Court is one to which the parties may conveniently resort to;

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(2) that the Philippine Court is in a position to make an intelligent decision as to the law and the facts;
and
(3) that the Philippine Court has or is likely to have power to enforce its decision.

All these requisites are present here. Basso may conveniently resort to our labor tribunals as he and
CMI lad physical presence in the Philippines during the duration of the trial. CMI has a Philippine
branch, while Basso, before his death, was residing here. The labor tribunals can make an intelligent
decision as to the law and facts. The incident subject of this case (i.e. dismissal of Basso) happened in
the Philippines, the surrounding circumstances of which can be ascertained without having to leave the
Philippines

C. In Saudi Arabian Airlines v. Court of Appeals, we emphasized that an essential element of conflict
rules is the indication of a "test" or "connecting factor" or "point of contact". Choice-of-law rules
invariably consist of a factual relationship (such as property right, contract claim) and a connecting
fact or point of contact, such as the situs of the res, the place of celebration, the place of
performance, or the place of wrongdoing. Pursuant to Saudi Arabian Airlines, we hold that the "test
factors," "points of contact" or "connecting factors" in this case are the following:

(1) The nationality, domicile or residence of Basso;

(2) The seat of CMI;
(3) The place where the employment contract has been made, the locus actus;
(4) The place where the act is intended to come into effect, e.g., the place of performance of
contractual duties;
(5) The intention of the contracting parties as to the law that should govern their agreement, the lex
loci intentionis; and
(6) The place where judicial or administrative proceedings are instituted or done.

Applying the foregoing in this case, we conclude that Philippine law is the applicable law. Basso, though
a US citizen, was a resident here from the time he was hired by CMI until his death during the pendency
of the case. CMI, while a foreign corporation, has a license to do business in the Philippines and
maintains a branch here, where Basso was hired to work. The contract of employment was negotiated
in the Philippines. A purely consensual contract, it was also perfected in the Philippines when Basso
accepted the terms and conditions of his employment as offered by CMI. The place of performance
relative to Biasso's contractual duties was in the Philippines. The alleged prohibited acts of Basso that
warranted his dismissal were committed in the Philippines. Clearly, the Philippines is the state with the
most significant relationship to the problem. Thus, we hold that CMI and Basso intended Philippine law
to govern, notwithstanding some references made to US laws and the fact that this intention was not
expressly stated in the contract. If the foreign law is not properly pleaded or proved, the presumption
of identity or similarity of the foreign law to our own laws, otherwise known as processual
presumption, applies. Here, US law may have been properly pleaded but it was not proved in the labor
tribunals.

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2. No. Basso was illegally dismissed. The dismissal of Basso was not founded on clearly established facts and
evidence sufficient to warrant dismissal from employment. While proof beyond reasonable doubt is not
required to establish loss of trust and confidence, substantial evidence is required and on the employer rests
the burden to establish it. There must be some basis for the loss of trust, or that the employer has reasonable
ground to believe that the employee is responsible for misconduct, which renders him unworthy of the trust
and confidence demanded by his position. We find that CMI failed to discharge its burden to prove the above
acts. CMI merely submitted affidavits of its officers, without any other corroborating evidence.

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41. Kawachi v. Del Quero, March 27, 2007 (reasonable causal connection
rule)
Doctrine:
Reasonable causal connection rule - if there is a reasonable causal connection between the claim asserted and
the employer-employee relations, then the case is within the jurisdiction of labor courts.
Facts:
In an Affidavit-Complaint dated 14 August 2002 to the NLRC, private respondent Dominie Del Quero charged
A/J Raymundo Pawnshop, Inc., Virgilio Kawachi and petitioner Julius Kawachi with illegal dismissal,
non-execution of a contract of employment, violation of the minimum wage law, and non-payment of
overtime pay.
In another complaint to the MeTC, private respondent Dominie Del Quero filed an action for damages against
petitioners. The complaint for damages specifically sought the recovery of moral damages, exemplary damages
and attorney’s fees.
Petitioners moved for the dismissal of the complaint on the grounds of lack of jurisdiction and forum-shopping
or splitting causes of action. It was initially dismissed for lack of jurisdiction but upon motion of the petitioners,
the MeTC reconsidered and set aside the order of dismissal. It ruled that no causal connection appeared
between the private respondent’s cause of action and the employer-employee relations between the parties.
In the RTC, the RTC issued the assailed Resolution, upholding the jurisdiction of the MeTC over private
respondent’s complaint for damages. It held that the private respondent’s action for damages was based on
the alleged tortious acts committed by her employers and did not seek any relief under the Labor Code.
On 29 March 2004, the RTC denied petitioners’ motion for reconsideration. Hence, the petition for review on
certiorari under Rule 45 of the Rules of Civil Procedure.
Issue:
Whether or not the NLRC has jurisdiction over claims for damages that are work-related.
Ruling:
Yes. The NLRC has jurisdiction over claims for damages that are work-related.
Article 217(a) of the Labor Code, as amended, clearly bestows upon the Labor Arbiter original and exclusive
jurisdiction over claims for damages arising from employer-employee relations —in other words, the Labor
Arbiter has jurisdiction to award not only the reliefs provided by labor laws, but also damages governed by the
Civil Code.
The "reasonable causal connection rule" emerged in the 1987 case of Primero v. Intermediate Appellate Court,
where the Court recognized the jurisdiction of the labor arbiters over claims for damages in connection with
termination of employment, thus:

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It is clear that the question of the legality of the act of dismissal is intimately related to the issue of the legality
of the manner by which that act of dismissal was performed. But while the Labor Code treats of the nature of,
and the remedy available as regards the first – the employee’s separation from employment – it does not at all
deal with the second – the manner of that separation – which is governed exclusively by the Civil Code. In
addressing the first issue, the Labor Arbiter applies the Labor Code; in addressing the second, the Civil Code.
And this appears to be the plain and patent intendment of the law. For apart from the reliefs expressly set out
in the Labor Code flowing from illegal dismissal from employment, no other damages may be awarded to an
illegally dismissed employee other than those specified by the Civil Code. Hence, the fact that the issue—of
whether or not moral or other damages were suffered by an employee and in the affirmative, the amount that
should properly be awarded to him in the circumstances—is determined under the provisions of the Civil Code
and not the Labor Code, obviously was not meant to create a cause of action independent of that for illegal
dismissal and thus place the matter beyond the Labor Arbiter’s jurisdiction.
Where the employer-employee relationship is merely incidental and the cause of action proceeds from a
different source of obligation, the Court has not hesitated to uphold the jurisdiction of the regular courts.
Where the damages claimed for were based on tort, malicious prosecution, or breach of contract, as when the
claimant seeks to recover a debt from a former employee or seeks liquidated damages in the enforcement of a
prior employment contract, the jurisdiction of regular courts was upheld. The scenario that obtains in this case
is obviously different. The allegations in the private respondent’s complaint unmistakably relate to the manner
of her alleged illegal dismissal.
For a single cause of action, the dismissed employee cannot be allowed to sue in two forums: one, before the
labor arbiter for reinstatement and recovery of back wages or for separation pay, upon the theory that the
dismissal was illegal; and two, before a court of justice for recovery of moral and other damages, upon the
theory that the manner of dismissal was unduly injurious or tortious. Suing in the manner described is known
as "splitting a cause of action," a practice engendering multiplicity of actions. It is considered procedurally
unsound and obnoxious to the orderly administration of justice.
In the instant case, the NLRC has jurisdiction over private respondent’s complaint for illegal dismissal and
damages arising therefrom. She cannot be allowed to file a separate or independent civil action for damages
where the alleged injury has a reasonable connection to her termination from employment. Consequently, the
action for damages filed before the MeTC must be dismissed.

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42. Perpetual Help Credit Cooperative Inc. v. Faburada, October 8,

2001(in relation to cooperatives)
Doctrine:
Under Art. 217 of the Labor Code, disputes regarding payment of wages, overtime pay, rest day and
termination of employment are within the original and exclusive jurisdiction of the Labor Arbiter.
Facts:
Respondents filed a complaint for illegal dismissal, premium pay on holidays and rest days, separation pay,
wage differential, moral damages, and attorney's fees against their Employer, Petitioner, with the DOLE.
Petitioner filed a motion to dismiss the complaint on the ground that there is no employer-employee
relationship between them as private respondents are all members and co-owners of the cooperative.
Furthermore, private respondents have not exhausted the remedies provided in the cooperative by-laws.
The Labor Arbiter denied the motion to dismiss, claiming that there was indeed an Ee-Er relationship and that
the law on cooperatives was subservient to the Labor Code. They then rendered a decision partially granting
Respondent’s petition.
On appeal, the NLRC affirmed the decision.
Issue:
Whether or not the Labor Arbiter has jurisdiction over the case despite the Respondents failing to submit their
dispute to the grievance machinery first before seeking judicial help.
Ruling:
Yes.
Petitioners bank on the rules under PD 175 requiring the submission of a dispute first to the grievance
machinery and RA 6939 wherein the Cooperative Development Authority must first issue a Certificate of
Non-Resolution before one may seek help with the courts.
P.D. 175 does not provide for a grievance machinery where a dispute or claim may first be submitted. LOI 23
refers to instructions to the Secretary of Public Works and Communications to implement immediately the
recommendation of the Postmaster General for the dismissal of some employees of the Bureau of Post.
Obviously, this LOI has no relevance to the instant case.
The provisions of RA 6939 apply to members, officers and directors of the cooperative involved in disputes
within a cooperative or between cooperatives.
There is no evidence that private respondents are members of petitioner PHCCI and even if they are, the
dispute is about payment of wages, overtime pay, rest day and termination of employment. Under Art. 217 of
the Labor Code, these disputes are within the original and exclusive jurisdiction of the Labor Arbiter.

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7K Corp. V. Albanco, June 26, 2013
Doctrine: Art. 217. Jurisdiction of the Labor Arbiters and the Commission. —

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

Although the general rule under the Labor Code gives the labor arbiter exclusive and original jurisdiction over
termination disputes, it also recognizes exceptions. One of the exceptions is provided in Article 262 of the
Labor Code.

The labor disputes referred to in the same Article 262 [of the Labor Code] can include all those disputes
mentioned in Article 217 over which the Labor Arbiter has original and exclusive jurisdiction.

Facts: On 5 April 1993, respondent Eddie Albarico (Albarico) was a regular employee of petitioner 7K
Corporation, a company selling water purifiers. He started working for the company in 1990 as a salesman.
Because of his good performance, his employment was regularized. He was also promoted several times: from
salesman, he was promoted to senior sales representative and then to acting team field supervisor. In 1992, he
was awarded the President's Trophy for being one of the company's top water purifier specialist distributors.

In April of 1993, the chief operating officer of petitioner 7K Corporation terminated Albarico's employment
allegedly for his poor sales performance. 5 Respondent had to stop reporting for work, and he subsequently
submitted his money claims against the petitioner for arbitration before the National Conciliation and
Mediation Board (NCMB).

While the NCMB arbitration case was pending, respondent Albarico filed a Complaint against petitioner
corporation with the Arbitration Branch of the National Labor Relations Commission (NLRC) for illegal dismissal
with money claims for overtime pay, holiday compensation, commission, and food and travelling allowances.
The Complaint was decided by the labor arbiter in favor of respondent Albarico, who was awarded separation
pay in lieu of reinstatement, backwages and attorney's fees. On appeal by petitioner, the labor arbiter's
Decision was vacated by the NLRC for forum shopping on the part of respondent Albarico, because the NCMB
arbitration case was still pending. The NLRC Decision, which explicitly stated that the dismissal was without
prejudice to the pending NCMB arbitration case, became final after no appeal was taken.

On 17 September 1997, petitioner corporation filed its Position Paper in the NCMB arbitration case. It denied
that the respondent was terminated from work, much less illegally dismissed. The corporation claimed that he
had voluntarily stopped reporting for work after receiving a verbal reprimand for his sales performance; hence,
it was he who was guilty of abandonment of employment. Respondent made an oral manifestation that he
was adopting the position paper he submitted to the labor arbiter, a position paper in which the former
claimed that he had been illegally dismissed.

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On 12 January 2005, almost 12 years after the filing of the NCMB case, both parties appeared in a hearing
before the NCMB. Respondent manifested that he was willing to settle the case amicably with petitioner
based on the decision of the labor arbiter ordering the payment of separation pay in lieu of reinstatement,
backwages and attorney's fees. On its part, petitioner made a counter-manifestation that it was likewise
amenable to settling the dispute. However, it was willing to pay only the separation pay and the sales
commission according to the Submission Agreement dated 19 April 1993.

The factual findings of the voluntary arbitrator, as well as of the CA, are not clear on what happened
afterwards. Even the records are bereft of sufficient information.

On 18 November 2005, the NCMB voluntary arbitrator rendered a Decision finding petitioner corporation
liable for illegal dismissal. The termination of respondent Albarico, by reason of alleged poor performance,
was found invalid. The arbitrator explained that the promotions, increases in salary, and awards received by
respondent belied the claim that the latter was performing poorly. It was also found that Albarico could not
have abandoned his job, as the abandonment should have been clearly shown. Mere absence was not
sufficient, according to the arbitrator, but must have been accompanied by overt acts pointing to the fact that
the employee did not want to work anymore. It was noted that, in the present case, the immediate filing of a
complaint for illegal dismissal against the employer, with a prayer for reinstatement, showed that the
employee was not abandoning his work. The voluntary arbitrator also found that Albarico was dismissed from
his work without due process.

Issue: Whether the voluntary arbitrator in a labor dispute exceeded his jurisdiction in deciding issues not
specified in the submission agreement of the parties
Ruling: No, in this case the voluntary arbitrator properly assumed jurisdiction over the issue of the legality of
his dismissal. It is clear that voluntary arbitrators may, by agreement of the parties, assume jurisdiction over a
termination dispute such as the present case, contrary to the assertion of petitioner that they may not. Under
the Labor Code, separation pay may be given not only when there is illegal dismissal. In fact, it is also given to
employees who are terminated for authorized causes, such as redundancy, retrenchment or installation of
labor-saving devices under Article 283 of the Labor Code. Additionally, jurisprudence holds that separation pay
may also be awarded for considerations of social justice, even if an employee has been terminated for a just
cause other than serious misconduct or an act reflecting on moral character. The Court has also ruled that
separation pay may be awarded if it has become an established practice of the company to pay the said benefit
to voluntarily resigning employees 31 or to those validly dismissed for non-membership in a union as required
in a closed-shop agreement. The circumstances however, do not obtain in the present case. There is no claim
that the issue of entitlement to separation pay is being resolved in the context of any authorized cause of
termination undertaken by the petitioner corporation. Neither is there any allegation that a consideration of
social justice is being resolved here. In fact, even in instances in which separation pay is awarded in
consideration of social justice, the issue of the validity of the dismissal still needs to be resolved first. Only
when there is already a finding of a valid dismissal for a just cause does the court then award separation pay
for reason of social justice. The other circumstances when separation pay may be awarded are not present in
this case. Hence, the voluntary arbitrator correctly assumed that the core issue behind the issue of separation
pay is the legality of the dismissal of respondent.

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Kawachi et. al. v. Del Quero, March 27, 2007 (reasonable causal
connection)
Doctrine: It is clear that the question of the legality of the act of dismissal is intimately related to the issue of
the legality of the manner by which that act of dismissal was performed. But while the Labor Code treats of
the nature of, and the remedy available as regards the first – the employee’s separation from employment – it
does not at all deal with the second – the manner of that separation – which is governed exclusively by the
Civil Code.
Facts: Private respondent Dominie Del Quero charged A/J Raymundo Pawnshop, Inc., Virgilio Kawachi and
petitioner Julius Kawachi with illegal dismissal, non-execution of a contract of employment, violation of the
minimum wage law, and non-payment of overtime pay. The complaint was filed before the National Labor
Relations Commission (NLRC) which alleged that Virgilio Kawachi hired private respondent as a clerk of the
pawnshop and that on certain occasions, she worked beyond the regular working hours but was not paid the
corresponding overtime pay. On one occasion, petitioner Julius Kawachi scolded private respondent in front of
many people about the way she treated the customers of the pawnshop and afterwards terminated private
respondent’s employment without affording her due process.

On 7 November 2002, private respondent Dominie Del Quero filed an action for damages against petitioners
Julius Kawachi and Gayle Kawachi before the MeTC

Petitioners moved for the dismissal of the complaint on the grounds of lack of jurisdiction and forum-shopping
or splitting causes of action. At first, the MeTC granted petitioners’ motion and ordered the dismissal of the
complaint for lack of jurisdiction.

Upon private respondent’s motion, the MeTC reconsidered and set aside the order of dismissal. It ruled that
no causal connection appeared between private respondent’s cause of action and the employer-employee
relations between the parties.

The RTC held that private respondent’s action for damages was based on the alleged tortuous acts committed
by her employers and did not seek any relief under the Labor Code.

Issue: Whether there is no causal connection between her cause of action and the employer-employee
relations of the parties.

Ruling: Yes. Article 217(a) of the Labor Code, as amended, clearly bestows upon the Labor Arbiter original and
exclusive jurisdiction over claims for damages arising from employer-employee relations —in other words, the

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Labor Arbiter has jurisdiction to award not only the reliefs provided by labor laws, but also damages governed
by the Civil Code.

It is clear that the question of the legality of the act of dismissal is intimately related to the issue of the legality
of the manner by which that act of dismissal was performed. But while the Labor Code treats of the nature of,
and the remedy available as regards the first – the employee’s separation from employment – it does not at all
deal with the second – the manner of that separation – which is governed exclusively by the Civil Code. In
addressing the first issue, the Labor Arbiter applies the Labor Code; in addressing the second, the Civil Code.
And this appears to be the plain and patent intendment of the law. For apart from the reliefs expressly set out
in the Labor Code flowing from illegal dismissal from employment, no other damages may be awarded to an
illegally dismissed employee other than those specified by the Civil Code. Hence, the fact that the issue—of
whether or not moral or other damages were suffered by an employee and in the affirmative, the amount that
should properly be awarded to him in the circumstances—is determined under the provisions of the Civil Code
and not the Labor Code, obviously was not meant to create a cause of action independent of that for illegal
dismissal and thus place the matter beyond the Labor Arbiter’s jurisdiction.

In the instant case, the allegations in private respondent’s complaint for damages show that her injury was the
offshoot of petitioners’ immediate harsh reaction as her administrative superiors to the supposedly sloppy
manner by which she had discharged her duties.

Petitioners’ reaction culminated in private respondent’s dismissal from work in the very same incident. The
incident on 10 August 2002 alleged in the complaint for damages was similarly narrated in private
respondent’s Affidavit-Complaint supporting her action for illegal dismissal before the NLRC. Clearly, the
alleged injury is directly related to the employer-employee relations of the parties.

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San Miguel v. Semillano, July 5, 2010 (in relation to cooperatives)
Doctrine: The test to determine the existence of independent contractorship is whether or not the one
claiming to be an independent contractor has contracted to do the work according to his own methods and
without being subject to the control of the employer, except only as to the results of the work.

Facts: AMPCO hired the services of Vicente et al. All of them were assigned to work in SMC's Bottling Plant.
They rendered service with SMC for more than 6 months. Subsequently, SMC entered into a Contract of
Services with AMPCO designating the latter as the employer of Vicente, et al. As a result, Vicente et al. failed
to claim the rights and benefits ordinarily accorded a regular employee of SMC. In fact, they were not paid their
13thmonth pay. On June 6, 1995, they were not allowed to enter the premises of SMC. The project manager of
AMPCO, Merlyn Polidario, told them to wait for further instructions from the SMC's supervisor. Vicente et al.
waited for one month, unfortunately, they never heard a word from SMC.

Consequently, Vicente et al., as complainants, filed a complaint for illegal dismissal before the Labor Arbiter.
On the other hand, respondent SMC raised the defense that it is not the employer of the complainants.
According to SMC, AMPCO is their employer because the latter is an independent contractor. Also SMC
alleged that it was AMPCO that directly paid their salaries and remitted their contributions to the SSS. Finally,
SMC assails the jurisdiction of the Labor Arbiter contending that the instant dispute is intra-cooperative in
nature falling within the jurisdiction of the Arbitration Committee of the Cooperative Development Authority.

The LA rendered his decision declaring herein complainants as regular employees of San Miguel Corporation.
Petitioner appealed the LA Decision to the NLRC. Initially, the NLRC Fourth Division affirmed with
modifications the findings of the LA. Petitioner SMC moved for a reconsideration of the foregoing decision.
NLRC acted on the motion and reversed its earlier ruling. It absolved petitioner from liability and instead held
AMPCO, as employer of respondents, liable to pay for respondents backwages, accrued salaries, allowances,
and attorneys fees.

Feeling aggrieved over the turnaround by the NLRC, the respondents filed a petition for review on certiorari
under Rule 65 with the Court of Appeals (CA), which favorably acted on it.

This petition for review on certiorari is now filed by petitioner, which among others, raises the ground that the
case involves an intra-cooperative dispute, which is within the original and exclusive jurisdiction of the
Arbitration Committee of the Cooperative and, thereafter, the Cooperative Development Authority.

Issue/s:

Whether AMPCO is a legitimate job contractor

Whether the case involves an intra-cooperative dispute, which is within the original and exclusive jurisdiction
of the Arbitration Committee of the Cooperative and, thereafter, the Cooperative Development Authority

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Ruling: The test to determine the existence of independent contractorship is whether or not the one claiming
to be an independent contractor has contracted to do the work according to his own methods and without
being subject to the control of the employer, except only as to the results of the work.

The existence of an independent and permissible contractor relationship is generally established by the
following criteria: whether or not the contractor is carrying on an independent business; the nature and extent
of the work; the skill required; the term and duration of the relationship; the right to assign the performance
of a specified piece of work; the control and supervision of the work to another; the employer's power with
respect to the hiring, firing and payment of the contractor's workers; the control of the premises; the duty to
supply the premises, tools, appliances, materials, and labor; and the mode, manner and terms of payment.

Despite the fact that the service contracts contain stipulations which are earmarks of independent
contractorship, they do not make it legally so. The language of a contract is neither determinative nor
conclusive of the relationship between the parties. Petitioner SMC and AMPCO cannot dictate, by a
declaration in a contract, the character of AMPCOs business, that is, whether as labor-only contractor, or job
contractor. AMPCOs character should be measured in terms of, and determined by, the criteria set by statute.
At a closer look, AMPCOs actual status and participation regarding respondents employment clearly belie the
contents of the written service contract.

Petitioner claims that the present case is outside the jurisdiction of the labor tribunals because respondent
Vicente Semillano is a member of AMPCO, not SMC. Precisely, he has joined the others in filing this complaint
because it is his position that petitioner SMC is his true employer and liable for all his claims under the Labor
Code.

Thus, petitioner SMC, as principal employer, is solidarily liable with AMPCO, the labor-only contractor, for all
the rightful claims of respondents. Under this set-up, AMPCO, as the "labor-only" contractor, is deemed an
agent of the principal (SMC). The law makes the principal responsible over the employees of the "labor-only"
contractor as if the principal itself directly hired the employees.

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Ellao v. BATELEC, July 9, 2018 (in relation to cooperatives)

Doctrine:
Complaints for illegal dismissal filed by a cooperative officer constitute an intra-cooperative controversy,
jurisdiction over which belongs to the regional trial courts.

Facts:
Ellao was employed by BATELEC I initially as Office Supplies and Equipment Control Officer on January 4, 1982
until he was appointed as General Manager on June 1, 2006. On February 12, 2009, a complaint was filed by
Nestor de Sagun and Conrado Cornejo against Ellao, charging him of committing irregularities in the discharge
of his functions as General Manager. A fact-finding body was created to investigate these charges and, in the
meantime, Ellao was placed under preventive suspension. The fact-finding body issued a report recommending
Ellao's termination. Thus, the Boards of Directors terminated Ellao on the grounds of gross and habitual
neglect of duties and responsibilities and willful disobedience or insubordination resulting to loss of trust and
confidence. Ellao was formally informed of such termination.
Ellao filed a Complaint for illegal dismissal and money claims before the Labor Arbiter against BATELEC I and/or
its President Rowena A. Rodriguez. Ellao complained that the charges against him were unsubstantiated and
that there was no compliance with procedural due process as he was not afforded the opportunity to explain
and there was no written notice of termination specifying the grounds of his termination.

BATELEC I, on the other hand, moved to dismiss Ellao's complaint on the ground that it is the NEA and not the
NLRC which has jurisdiction over the complaint. Assuming the NLRC enjoys jurisdiction, BATELEC I nevertheless
assert that Ellao was validly dismissed.
LA: Affirmed the jurisdiction over the complaint. While Presidential Decree No. 279 (P.D. 279), the law creating
the NEA, as amended by Presidential Decree No. 1645 (P.D. 1645), granted NEA the power to suspend or
dismiss any employee of electric cooperatives, the same does not authorize NEA to hear and decide a labor
termination case which power is exclusively vested by Presidential Decree No. 442 or the Labor Code, to Labor
Arbiters. Thus, assuming jurisdiction over the Complaint, the Labor Arbiter held that Ellao was illegally
dismissed as the grounds for his dismissal were unsubstantiated
NLRC: Held that BATELEC I is not a corporation registered with the SEC, but that it was formed and organized
pursuant to P.D. 269 and that Ellao is not an officer but a mere employee. Accordingly, the NLRC, denied
BATELEC I's appeal and partly granted that of Ellao's.

CA: Found merit in BATELEC I's petition and found that Ellao, as BATELEC I's General Manager, is a corporate
officer. The CA found that under BATELEC I's By-laws, its Board of Directors is authorized to appoint such
officers as it may deem necessary. It noted that Ellao was appointed as General Manager by virtue of a board
resolution and that Ellao's appointment was duly approved by the NEA Administrator. The CA also found that
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the position of General Manager is specifically provided for under BATELEC I's By- laws. As such, the CA
concluded that Ellao's dismissal is considered an intra-corporate controversy which falls under the jurisdiction
of the SEC, now the RTC's, and not with the NLRC.
Issue:
Whether or not the RTC has jurisdiction.
Ruling:
YES. Complaints for illegal dismissal filed by a cooperative officer constitute an intra- cooperative controversy,
jurisdiction over which belongs to the regional trial courts.
Ellao's main resistance to the regional trial court's exercise of jurisdiction over his complaint for illegal dismissal
rests on his theory that BATELEC I, as a cooperative, is not a corporation registered with the SEC. Registration
with the SEC, however, is not the operative factor in determining whether or not the latter enjoys jurisdiction
over a certain dispute or controversy.
Organization under P.D. 269 sufficiently vests upon electric cooperatives' juridical personality enjoying
corporate powers. Registration with the SEC becomes relevant only when a non-stock, non-profit electric
cooperative decides to convert into and register as a stock corporation. As such, and even without choosing to
convert and register as a stock corporation, electric cooperatives already enjoy powers and corporate existence
akin to a corporation.
By jurisprudence, termination disputes involving corporate officers are treated differently from illegal dismissal
cases lodged by ordinary employees.
As a rule, the illegal dismissal of an officer or other employee of a private employer is properly cognizable by
the labor arbiter pursuant to Article 217 (a)2 of the Labor Code, as amended.
By way of exception, where the complaint for illegal dismissal involves a corporate officer, the controversy falls
under the jurisdiction of the SEC, because the controversy arises out of intra-corporate or partnership relations
between and among stockholders, members, or associates, or between any or all of them and the corporation,
partnership, or association of which they are stockholders, members, or associates, respectively; and between
such corporation, partnership, or association and the State insofar as the controversy concerns their individual
franchise or right to exist as such entity; or because the controversy involves the election or appointment of a
director, trustee, officer, or manager of such corporation, partnership, or association. With the advent of
Republic Act No. 8799 (R.A. 8799) or The Securities Regulation Code, the SEC's jurisdiction over all
intra-corporate disputes was transferred to the regional trial courts. Since Ellao filed his Complaint for illegal
dismissal on February 23, 2011, after the passage and approval of R.A. 8799, his complaint may either fall
under the jurisdiction of the labor arbiter or the regional trial courts, depending on his position. If Ellao is
determined to be a corporate officer then jurisdiction over his complaint for illegal dismissal is to be treated as
an intra-corporate dispute, hence jurisdiction belongs to the regional trial courts.

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Comscentre v. Ricio, January 22, 2020 (refund of employment bond)

Doctrine:
In Bañez v. Valdevilla,23 the Court elucidated that the jurisdiction of labor tribunals is comprehensive
enough to include claims for all forms of damages "arising from the employer-employee relations." Thus,
the Court decreed therein that labor tribunals have jurisdiction to award not only the reliefs provided by
labor laws, but also damages governed by the Civil Code.

Facts:
On April 4, 2011, petitioners Comscentre Phils., Inc. and its Country Manager Patrick Boe hired respondent
Camille B. Rocio as a Network Engineer. On August 5, 2011, respondent informed petitioners of her intention
to resign effective September 9, 2011. Prior to the effectivity of her resignation, Comscentre's Human
Resource Manager Jennifer Hachero and Support Manager Allan Calanog informed respondent she had to pay
an "employment bond" of Eighty Thousand Pesos (P80,000.00) for resigning within twenty-four (24) months
from the time she got employed as provided in her employment contract.

The following day on August 25, 2011, Hachero issued a show-cause letter to respondent seeking her
explanation why she should not be subjected to disciplinary action for raising her concerns directly to Manager
Glass and allegedly going around her colleagues' workstations during working hours to discuss her resignation .
The show-cause letter, however, indicated that respondent was already placed on preventive suspension.
On August 29, 2011, respondent submitted her explanation. An administrative hearing was thereafter
conducted on September 2, 2011. On September 9, 2011, petitioners issued a Letter of Suspension (Without
Prejudice)7 to respondent stating she was preventively suspended without pay from August 25, 2011 to
September 9, 2011.
On September 16, 2011, respondent sued petitioners for unfair labor practice, illegal suspension, illegal
deduction, underpayment of salaries, non-payment of wages, service incentive leave pay and 13th month pay,
damages (moral and exemplary), and attorney's fees.

Ruling of the Labor Arbiter:

Under Decision dated July 30, 2012, Labor Arbiter Adolfo C. Babiano found respondent's preventive
suspension unjustified. Petitioners were, thus, ordered to pay respondent the following amounts, viz:

WHEREFORE, judgment is hereby rendered ordering [petitioner] to pay [respondent] as follows:

1. P67,961.30 (P2,192.30 x 31 days) representing her wages during her illegal suspension;
2. P19,000.00 (P57,000.00 x 4/12) representing her proportionate 13th month pay ;
3. P10,000.00 as moral damages; and
4. P10,000.00 as exemplary damages
TOTAL AWARD: P106,961.30
Attorney's fees at 10% of the total award : P10,696.13
All other claims are dismissed for lack of merit.

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Ruling of the NLRC

The NLRC affirmed with modification, thus:

WHEREFORE, respondent's appeal is PARTLY GRANTED and the Decision promulgated on 30 July 2012 is
AFFIRMED WITH THE FOLLOWING MODIFICATIONS:

1. Respondent Comscentre Phils. Inc. is DIRECTED to pay complainant P85,424.44 broken down as follows ,
viz:
(a) P30,692.31 as salaries during her 14 days suspension;(b) P24,880.69 as tax refund; (c) P10,851.44 as
monetary equivalent of her vacation leaves; and (d) P19,000.00 as proportionate 13th month pay.
From these amounts shall be deducted the P80,000.00 bond due the respondent.
2. Award of moral and exemplary damages and attorney's fees are
DELETED;
All other claims are DISMISSED for lack of merit.

Ruling of the CA:

the Court of Appeals nullified the NLRC's directive to deduct the Eighty Thousand Pesos (P80,000.00)
"employment bond" from the total monetary award due to respondent. It ruled that petitioners' claim for
payment of " employment bond" is within the exclusive jurisdiction of regular courts.

Issue: Whether or not the claim for payment of the employment bond fell within the jurisdiction of the
regular courts.

Held: No. The court reversed and set aside the decision of the CA and reinstated the decision of the NLRC.

Article 224 of the Labor Code clothes the labor tribunals with original and exclusive jurisdiction over claims for
damages arising from employer­employee relationship, viz:
Art. 224. Jurisdiction of Labor Arbiters and the Commission. - (a) Except as otherwise provided under this
Code, the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty (30)
calendar days after the submission of the case by the parties for decision without extension, even in the
absence of stenographic notes, the following cases involving all workers, whether agricultural or
non-agricultural:
1. Unfair labor practices;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that workers may file involving wages, rates of
pay, hours of work and other terms and conditions of employment;
4. Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee
relations;

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It is clear that petitioners' claim for payment is inseparably intertwined with the parties' employer-employee
relationship. For it was the respondent's act of prematurely severing her employment with the company which
gave rise to the latter's cause of action for payment of "employment bond." As aptly found by the NLRC,
petitioners' claim was "an offshoot of the resignation of [respondent] and the complications arising therefrom
and which eventually led to the filing of the case before the Labor Arbiter." Verily , petitioners' claim falls
within the original and exclusive jurisdiction of the labor tribunals.
On this score, we further sustain the NLRC ' s finding that respondent is liable for payment of "employment
bond" pursuant to her undertaking in the employment contract. She herself has not disputed this liability
arising as it did from her breach of the minimum employment period clause.29 Notably, she committed to
abide thereby in exchange for the expenses incurred by the company for her training as Network Engineer. As
correctly ruled by the NLRC:

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Gemudiano v. Naess Shipping, January 20, 2020
Doctrine: While there are cases which hold that the existence of an employer-employee relationship does not
negate the civil jurisdiction of the trial courts, in this particular case, we find that jurisdiction properly lies with
the Labor Arbiter.

If the Court were to make a distinction between the perfection of a contract of employment and the
commencement of an employment relationship on its face, and so rule that a mere perfected contract would
make the jurisdiction of the case fall under regular courts, the Court will arrive at a dangerous conclusion
where domestic seafarers' only recourse in law in case of breach of contract is to file a complaint for damages
before the RTC. In doing so, domestic seafarers would have to pay filing fees which his overseas counterpart
need not comply with in filing a complaint before the labor arbiters. As a necessary consequence, the domestic
seafarers would need to prove their claim by preponderance of evidence or "evidence which is of greater
weight, or more convincing than that which is offered in opposition to it," which is greater than what overseas
seafarers need to discharge in cases before labor arbiters, where they only have to prove their claims by
substantial evidence or "that amount of evidence which a reasonable mind might accept as adequate to
support a conclusion."
Facts: Gemudiano applied with Naess Shipping for possible employment as seaman. He had an interview with
Naess Shipping and completed the training, underwent the mandatory pre-employment medical examination
(PEME) where he was declared fit for sea service, signed an Embarkation Order stipulating the terms and
conditions of his employment, and was directed to request for all the necessary documents and company
properties from the person he was going to replace in his vessel of assignment. Naess Shipping executed a
contract of employment engaging the services of petitioner as Second Officer aboard the vessel "M/V Meiling
11," for a period of 6 months with a gross monthly salary of P30,000.00. Subsequently, petitioner and
respondents executed an Addendum stating that the employment relationship between them shall commence
once the Master of the Vessel issues a boarding confirmation to the petitioner.

Petitioner received a call that his embarkation has been cancelled. Thus, he filed a complaint for breach of
contract against respondents before the Arbitration Branch of the NLRC and alleged that respondent’s
unilateral and unreasonable failure to deploy him despite the perfected contract of employment constitutes
breach and gives rise to a liability to pay actual damages. He also asserts that he is entitled to the award of
moral and exemplary damages and attorney's fees on account of respondents' dishonesty and bad faith, as
well as their wanton, fraudulent and malevolent violation of the contract of employment.

Respondents argued that petitioner's employment did not commence because his deployment was withheld
by reason of misrepresentation. They stressed that the petitioner did not disclose the fact that he is suffering
from diabetes mellitus and asthma which render him unfit for sea service. They claimed that the Labor Arbiter
has no jurisdiction over the petitioner's complaint for breach of contract, invoking the absence of
employer-employee relationship.

The LA found respondents to have breached their contractual obligation to the petitioner and ordered them to
pay him P180,000.00 representing his salary for the duration of the contract. The NLRC affirmed the Labor
Arbiter Decision but with modification as to damages. It awarded petitioner moral damages in the amount of
P30,000.00, exemplary damages of P50,000.00, attorney's fees equivalent to ten percent (10%) of the
recoverable amount, and refund of the cost of the PEME in the amount of P18,000.00.

On appeal, the CA annulled and set aside the of the NLRC.

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Issue: W/N the LA had jurisdiction over the petitioner’s claim for damages arising from breach of contract
Ruling: YES. Article 224 (now Art. 217) of the Labor Code provides:
ART. 217. Jurisdiction of Labor Arbiters and the Commission. - (a) Except as otherwise provided under this
Code, the Labor Arbiter shall have original and exclusive jurisdiction to hear and decide, within thirty (30)
calendar days after the submission of the case by the parties for decision without extension, even in the
absence of stenographic notes, the following cases involving all workers, whether agricultural or
nonagricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with acclaim for reinstatement, those cases that workers may file involving wages,
rate[s] of pay, hours of work and other terms and conditions of employment;
4. Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee
relations;
5. Cases arising from any violation of Article 264 of this Code , including questions involving the legality of
strikes and lockouts; and
6. Except claims for employees compensation, social security, medicare and maternity benefits, all other
claims arising from employer-employee relations, including those of persons in domestic or household
service ,involving an amount exceeding five thousand pesos (P5,000.00), whether accompanied with a
claim for reinstatement.

Based on this provision, it is clear that claims for actual, moral, exemplary and other forms of damages arising
from employer-employee relations are under the original and exclusive jurisdiction of labor arbiters.

While there are cases which hold that the existence of an employer-employee relationship does not negate the
civil jurisdiction of the trial courts, in this particular case, we find that jurisdiction properly lies with the Labor
Arbiter.

If the Court were to make a distinction between the perfection of a contract of employment and the
commencement of an employment relationship on its face, and so rule that a mere perfected contract would
make the jurisdiction of the case fall under regular courts, the Court will arrive at a dangerous conclusion
where domestic seafarers' only recourse in law in case of breach of contract is to file a complaint for damages
before the RTC. In so doing, domestic seafarers would have to pay filing fees which his overseas counterpart
need not comply with in filing a complaint before the labor arbiters. As a necessary consequence, the domestic
seafarers would need to prove their claim by preponderance of evidence or "evidence which is of greater
weight, or more convincing than that which is offered in opposition to it," which is greater than what overseas
seafarers need to discharge in cases before labor arbiters, where they only have to prove their claims by
substantial evidence or " hat amount of evidence which a reasonable mind might accept as adequate to
support a conclusion."

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Pasay City Alliance Church v. Benito, November 28, 2019
Doctrine: If a church or religious association has the sole prerogative to exclude members perceived to be
unworthy in light of its doctrinal standards, all the more does it have the sole prerogative in determining who
is best fit to minister to its members in activities attached with religious significance.
Facts: Petitioner Pasay City Alliance Church (PCAP) is one of the local churches of its co- petitioner, Christian
and Missionary Alliance Churches of the Philippines (CAMACOP), a religious society registered with the SEC.
Respondent Benito, on the other hand, is a licensed Christian Minister of CAMACOP. Benito served as the head
of the Pastoral Care and Membership division. without a written contract. The Pastoral Care and Membership
division is under the supervision of the Church Ministry Team (CMT) and co-petitioner Reverend Cargo.

The present controversy stemmed from CAMACOP and PCAC’s policy requiring pastors or ministers without
written contracts to tender a courtesy resignation every year. Such policy is expressed in Art. VII, Sec. 3(2) of
CAMACOP’s Amended Local Church Administrative and Ministry Guidelines. In compliance, Benito tendered
her resignation. The CMT reappointed Benito to the same position for another year. When the CMT convened
the following year, it decided not to reappoint Benito and recommended that she reapply to a more suitable
position. Such decision, however, was not immediately pursued by the CMT, and Benito held the post for
another year. Later on, Benito complied anew and submitted a courtesy resignation, without prejudice to the
CMT decision. She was instructed to endorse her workload to another pastor. Finally, Benito was informed of
the CMT’s decision regarding the non-extension of her engagement. Hence, she filed a complaint for illegal
dismissal before the Labor Arbiter.

In response, PCAC questioned the LA’s jurisdiction and asserted that Benito’s vocation and ministry are not
governed by the Labor Code. Benito, however, claimed that PCAC “hired” her, provided her with a monthly
wage, decided which ministry she would be assigned, issued directives on her behavior and, in this instance,
dismissed her from her duties. Hence, she insists that all of the elements of an employer-employee
relationship are present.

LA: An employer-employee relationship exists between the parties, in view of the various letters and
memoranda from PCAC concerning Benito’s time-in and time-out, work assignments, performance evaluations,
as well as deductions for SSS, Philhealth, and Pag-ibig contributions.

NLRC RULING: Reversed the LA’s decision on the ground that non-renewal of Benito’s appointment to her
previous position, due to a church policy requiring ministers to tender a courtesy resignation yearly for their
possible reassignment, should be treated as an ecclesiastical matter outside of the labor tribunal’s jurisdiction.

CA RULING: The CA challenged the NLRC’s decision, taking the view that the decision not to renew Benito’s
appointment was secular in nature and not an ecclesiastical affair. It held that a minister or pastor's fitness to
continue in a particular ministry or congregation is an ecclesiastical affair over which our labor tribunals have
no jurisdiction.

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Issue: Whether the termination issue of its pastor an ecclesiastical matter that is well-within the church to
determine and adjudicate?
Ruling: YES.

In the case of Pastor Austria vs. NLRC, an ecclesiastical affair is defined as one that concerns doctrine, creed, or
form of worship of the church, or the adoption and enforcement within a religious association of needful laws
and regulations for the government of the membership, and the power of excluding from such associations
those deemed unworthy of membership. Based on this definition, an ecclesiastical affair involves the
relationship between the church and its members and relate to matters of faith, religious doctrines, worship
and governance of the congregation. In our jurisdiction, we hold the Church and the State to be separate and
distinct from each other. The State cannot meddle with the affairs of the Church.

In the case at bar, the Supreme Court held that the petitioner’s claim is infused with religious color because it
bears down on the relationship of a church and its members in faith-based matters. If a church or religious
association has the sole prerogative to exclude members perceived to be unworthy in light of its doctrinal
standards, all the more does it have sole prerogative in determining who are best fit to minister to its members
in activities attached with religious significance. As a licensed minister of CAMACOP, Benito was aware of its
policy requiring annual courtesy resignations that give its local churches a free hand in assigning, reassigning or
transferring pastors and ministers, subject to reasonable guidelines and supervision.

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Tumaodos v. San Miguel, February 15, 2020
Doctrine: If there is a reasonable causal connection between the claim asserted and the employer-employee
relations, then the case is within the jurisdiction of the labor courts, and in the absence thereof, it is the
regular courts that have jurisdiction.

Facts: Petitioner Tumaodos was an employee of respondent San Miguel Yamamura Packaging Corp., but whose
service was dismissed via the Involuntary Separation Program enacted by respondent due to plant
reorganization. He availed of this, but the respondent withheld Php1.4M on behalf of the cooperative due to
outstanding indebtedness.

Eventually, Tumaodos and the Cooperative had conflicting claims over the money and respondent filed a case
for interpleader between the two parties. Meanwhile, however, the petitioner filed a complaint for
non-payment of separation pay and damages against respondent in the Labor Arbiter.

Tumaodos argued that respondent has been deducting his salary on two occasions: first, for a debt he owed
the collective, resulting in excess payment, and second, for a PAGIBIG Housing loan, which concerns the
disputed Php1.4M. Respondent argued that it was only doing so because of its agreement with the
cooperative, and that the dispute involved the validity of the right to deduct payment and as such, an
interpleader was the proper case, which meant that the NLRC had no jurisdiction to hear and decide the case.

The Labor Arbiter decided in favor of Tumaodos, which respondent appealed to the NLRC and the latter
affirmed the judgment. The CA however, dwelling solely on the issue of jurisdiction, reversed the NLRC
judgment.

Issue: Whether the LA correctly assumed jurisdiction over the case. NO.

Ruling: The SC stated that not all money claims by an employee fall within the exclusive jurisdiction of the LA,
as they are only confined to those which are accompanied by a claim for reinstatement or arising out of an
employer-employee relationship.

The SC clarified also that the reasonable causal connection rule, which states that “if there is a reasonable
causal connection between the claim asserted and the employer-employee relations, then the case is within
the jurisdiction of the labor courts, and in the absence thereof, it is the regular courts that have jurisdiction,”
was to be applied in this case.”

Here, there was no reasonable causal connection between the claims of the petitioner and the employment
relationship he has with the respondent, as the main issue is the alleged withholding of the Php1.4M, which
stems from the debtor-creditor relationship of the Cooperative and the petitioner. Hence, the principal relief
sought by petitioner cannot be found in the Labor Code but rather in general civil law.

Petition DENIED.

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IV. Article 225 (formerly Article 218)

PAL v. NLRC, March 20, 1998
Doctrine
The power of the NLRC to issue an injunctive writ originates from "any labor dispute" upon application by a
party thereof, which application if not granted "may cause grave or irreparable damage to any party or render
ineffectual any decision in favor of such party." A labor dispute must first exist.
Facts
Private respondents are flight stewards of PAL. Both were dismissed from the service for their alleged
involvement in currency smuggling in Hong Kong. Aggrieved by said dismissal, private respondents filed with
the NLRC a petition for injunction. The NLRC issued a temporary mandatory injunction enjoining petitioner to
cease and desist from enforcing its Memorandum of Dismissal.
PAL moved for reconsideration in granting a temporary injunction order when it has no jurisdiction to issue an
injunction or restraining order since this may be issued only under Article 218 of the Labor Code if the case
involves or arises from labor disputes.
Issue
Whether the NLRC has the power to issue the injunction
Ruling
Yes. The power of the NLRC to issue an injunctive writ originates from "any labor dispute" upon application by
a party thereof, which application if not granted "may cause grave or irreparable damage to any party or
render ineffectual any decision in favor of such party."
The term "labor dispute" is defined as "any controversy or matter concerning terms and conditions of
employment or the association or representation of persons in negotiating, fixing, maintaining, changing, or
arranging the terms and conditions of employment regardless of whether or not the disputants stand in the
proximate relation of employers and employees." Taking into account the foregoing definition, it is an essential
requirement that there must first be a labor dispute.
In the present case, there is no labor dispute between the petitioner and private respondents as there has yet
been no complaint for illegal dismissal filed with the labor arbiter by the private respondents against the
petitioner. The petition for injunction directly filed before the NLRC is in reality an action for illegal dismissal.
As such, the petition should have been filed with the labor arbiter who has the original and exclusive
jurisdiction to hear and decide cases involving all workers. Thus, the NLRC exceeded its jurisdiction when it
issued the assailed Order granting private respondents' petition for injunction and ordering the petitioner to
reinstate private respondents.

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Landbank of the Phils. v. Listana, August 5, 2008

DOCTRINE: Quasi-judicial bodies like PARAD are only empowered to cite persons in contempt by initiating
them in the proper RTC. They do not have the jurisdiction to decide indirect contempt cases.
FACTS: Listana owns a land in Sorsogon. He voluntarily sold the land to the government under the CARL law.
When just compensation was determined by DAR Adjudication Board, then PARAD (Provincial Agrarian) issued
a writ of execution ordering Landbank to pay Listana. Writ was not acted upon. Respondent filed a Motion
forContempt with the PARAD when the petitioner failed to comply with the writ of execution. PARAD granted
the motion for contempt, and later on directed the issuance of an arrest order against petitioner's manager.
Petitioner filed a petition for injunction of the arrest order, which was approved by the trial court. After the
respondent's motion for reconsideration was denied by the court, it filed a special civil action for certiorari
with the Court of Appeals (CA). The appellate court nullified the order of the trial court. Hence, this petition.
ISSUE: Can PARAD, an administrative office, charge Landbank in indirect contempt?
HELD: NO. There are only 2 ways to charge a person with indirect contempt – through verified petition and
motu proprio by the court. In this case, neither of the 2 took place.
Quasi-judicial agencies that have the power to cite persons for indirect contempt pursuant to Rule
71 of the Rules of Court can only do so by initiating them in the proper Regional Trial Court. It is not within
their jurisdiction and competence to decide the indirect contempt cases. These matters are still within the
province of the Regional Trial Courts.
In the present case, the indirect contempt charge was filed, not with the Regional Trial Court, but
with the PARAD, and it was the PARAD that cited Mr. Lorayes with indirect contempt. Hence, the contempt
proceedings initiated through an unverified "Motion for Contempt" filed by the respondent with the PARAD
were invalid for the following reasons: First, the Rules of Court clearly require the filing of a verified petition
with the Regional Trial Court, which was not complied with in this case. The charge was not initiated by the
PARAD motu proprio; rather, it was by a motion filed by respondent. Second, neither the PARAD nor the
DARAB have jurisdiction to decide the contempt charge filed by the respondent. The issuance of a warrant of
arrest was beyond the power of the PARAD and the DARAB. Consequently, all the proceedings that stemmed
from respondent's "Motion for Contempt," specifically the Orders of the PARAD dated August 20, 2000 and
January 3, 2001 for the arrest of Alex A. Lorayes, are null and void.
Quasi-judicial bodies like PARAD are only empowered to cite persons in contempt by initiating them
in the proper RTC. They do not have the jurisdiction to decide indirect contempt cases.

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Robosa v. NLRC, February 8, 2012.

Doctrine: Under Art. 218 of the Labor Code, the NLRC (and the labor arbiters) may hold any offending party in
contempt, directly or indirectly, and impose appropriate penalties in accordance with law. The penalty for
direct contempt consists of either imprisonment or fine, the degree or amount depends on whether the
contempt is against the Commission or the labor arbiter. The Labor Code, however, requires the labor arbiter
or the Commission to deal with indirect contempt in the manner prescribed under Rule 71 of the Rules of
Court.

Facts: Federico S. Robosa, et. Al (petitioners) were rank-and-file employees of respondent Chemo-Technische
Manufacturing (CTMI). Petitioners were officers and members of the CTMI Employees Union-DFA (union).
On July 15, 1991, CTMI through its President and General Manager Franklin de Luzuriaga issued a
memorandum announcing, among others, that effective on the same day, all sales territories were
demobilized. Later that day, CTMI issued another memorandum informing the company’s sales representatives
and sales drivers of the new system in the business operations.
The union asked for the withdrawal and deferment of the directives alleging such as union busting acts
constituting unfair labor practice, but the request was ignored. Instead, it issued on July 23, 1991 a notice of
termination of employment against the sales drivers, due to the abolition of the sales drivers position.
On August 1, 1991, the union and its affected members filed a complaint for illegal dismissal and unfair labor
practice with damages against CTMI, De Luzuriaga and other CTMI officers. The union also moved for the
issuance of a writ of preliminary injunction and/or TRO.
LA Ruling: denied the union’s motion for a stay order on the ground that the issues raised by the petitioners
can best be ventilated during the trial on the merits.
The union then filed a petition for the issuance of a preliminary mandatory injunction and/or TRO with the
NLRC.
NLRC Ruling: issued TRO and directed CTMI, De Luzuriaga and other company executives to cease and desist
from dismissing any member of the union and from the implementation of its memoranda and to return to
status quo.
Allegedly the respondents did not comply with the NLRC resolution, and instead moved to dissolve the TRO
and opposed the union’s petition for preliminary injunction. Thereafter, the NLRC upgraded the TRO to a writ
of preliminary injunction. The respondents moved for reconsideration. The union opposed the motion and
urgently moved to cite the responsible CTMI officers in contempt of court.
The NLRC heard the contempt charge and issued a resolution dismissing the charge.
CA Ruling: dismissal is not subject to review by an appellate court

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Issue: Whether NLRC has contempt powers?

Ruling: YES, under Art. 218 of the Labor Code, the NLRC (and the labor arbiters) may hold any offending party
in contempt, directly or indirectly, and impose appropriate penalties in accordance with law. The penalty for
direct contempt consists of either imprisonment or fine, the degree or amount depends on whether the
contempt is against the Commission or the labor arbiter. The Labor Code, however, requires the labor arbiter
or the Commission to deal with indirect contempt in the manner prescribed under Rule 71 of the Rules of
Court.

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

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Jolo’s Kiddie v. Caballa, November 29, 2017
Doctrine: Generally, moving for reconsideration is an indispensable requirement before filing for certiorari.
However, if the ruling sought to be assailed is one of patent nullity, and there is already enough basis on which
a proper evaluation of the merits may be had, as in this case, the Court may dispense with the time-consuming
procedure of remand in order to prevent further delays in the disposition of the case and to better serve the
ends of justice.

Article 244 (formerly Art 217) of the Labor Code provides that the LAs shall have exclusive and original
jurisdiction to hear and decide, inter alia, termination disputes and money claims arising from
employer-employee relations

Facts: Herein respondents filed a complaint before the NLRC against the petitioner for illegal dismissal and
underpayment of salaries/wages. They allege that petitioners hired them as staff members in the latter's
business; that they were paid a daily salary that reached P330.00 for a six (6)-day work week from 9:45 in the
morning until 9:00 o'clock in the evening; and claim that they were never paid the monetary value of their
unused service incentive leaves, 13th month pay, overtime pay, and premium pay for work during holidays;
and that when petitioners found out that they inquired from the Department of Labor and Employment about
the prevailing minimum wage rates, they were prohibited from reporting to their work assignment without any
justification. Herein petitioner argued that the respondents abandoned their work.

The Labor Arbiter ruled in favor of the respondents, finding adequate substantiation of their claims of not
being allowed to come near work premises; and the lack of proof of abandonment on the side of the
petitioners. The NLRC, during appeal, affirmed the decision of the LA, further ordering the petitioner to
reinstate the respondents. It ruled that there was neither dismissal on the part of petitioners nor
abandonment on the part of respondents, the NLRC ordered the latter's reinstatement but without backwages
and increased the monetary awards to herein respondents. The CA dismissed the subsequent petition for
certiorari filed before it due to the petitioner’s failure to move for reconsideration before filing the same.

Petitioners insist that since respondents worked in Cavite, they should have filed their complaint before the
Regional Arbitration Branch IV of the NLRC and not in Manila, pursuant to Section 1, Rule IV of the 2011 NLRC
Rules of Procedure. As such, the LA in Manila where the complaint was filed had no jurisdiction to rule on the
same.

Issue:

1.) Whether or not the CA erred in dismissing the petition for certiorari

2.) Whether or not the Manila Labor Arbiter has jurisdiction to rule on the complaint

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Ruling:
1.) Yes. The court ruled that the CA erred in dismissing the petition for certiorari solely based on the ground of
failure to move reconsideration prior to filing of the same. While generally, moving for reconsideration is a
condition sine qua non to the filing of a petition for certiorari, the court held that the situation presented in
this case serves as an exception to such general rule as the ruling sought to be assailed is one of patent nullity

In labor cases, grave abuse of discretion may be ascribed to the NLRC when its findings and conclusions are not
supported by substantial evidence, which refers to that amount of relevant evidence that a reasonable mind
might accept as adequate to justify a conclusion. In this case, the court ruled that the NLRC gravely abused its
discretion amounting to lack or excess of jurisdiction when it modified the LA ruling and awarded the
respondents with increased monetary benefits without factual bases. Since such ruling is one of patent nullity,
the CA erred in dismissing the petition for certiorari filed before it based on the aforesaid technical ground, as
petitioners were justified in pursuing a direct recourse to the CA even without first moving for reconsideration
before the NLRC. In such instances, court procedure dictates that the case be remanded to the CA for a
resolution on the merits. However, when there is already enough basis on which a proper evaluation of the
merits may be had, as in this case, the Court may dispense with the time-consuming procedure of remand in
order to prevent further delays in the disposition of the case and to better serve the ends of justice.

2.) Yes. The SC ruled that the LA in Manila has jurisdiction to resolve the complaint. The High Court clarified
that the NLRC 2011 Rules of Procedure speaks of venue and not jurisdiction and that objections on the venue
should be raised at the earliest instance, which the petitioners failed to do and thus is considered to have
waived the same. Furthermore, Article 244 (formerly Art 217) of the Labor Code provides that the LAs shall
have exclusive and original jurisdiction to hear and decide, inter alia, termination disputes and money claims
arising from employer-employee relations, as in this case. As such, the LA clearly had jurisdiction to resolve
respondents' complaint.

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Frondozo v. Meralco, August 22, 2017
Doctrine: There are instances when writs of execution may be assailed. They are: 1)the writ of execution varies
the judgment; 2)there has been a change in the situation of the parties making execution inequitable or
unjust; 3)execution is sought to be enforced against property exempt from execution; 4) it appears that the
controversy has been submitted to the judgment of the court; 5) the terms of the judgment are not clear
enough and there remains room for interpretation thereof; or 6) it appears that the writ of execution has been
improvidently issued, or that it is defective insubstance, or issued against the wrong party,or that the judgment
debt has been paid or otherwise satisfied,or the writ was issued without authority.
Facts: MERALCO terminated the services of Petitioners for having committed unlawful acts and violence during
the strike. MEWA filed a second Notice of Strike (second strike) on the ground of discrimination and union
busting that resulted to the dismissal from employment of 25 union officers and workers. Then DOLE Secretary
Ruben D. Torres issued an Order that certified the issues raised in the second strike to the NLRC for
consolidation with the first strike and strictly enjoined any strike or lockout pending resolution of the labor
dispute. The Order also directed MERALCO to suspend the effects of termination of the employees and
re-admit the employees under the same terms and conditions without loss of seniority rights.
The NLRC ordered respondent MANILA ELECTRIC COMPANY to reinstate to their former or equivalent positions
DANILO DIZON and LUISITO DILOY, without loss of seniority rights and payment of backwages computed from
the time of their dismissal. The Court of Appeals found that the strike of 6-8 June 1991 was illegal because it
occurred despite an assumption order by the DOLE Secretary and because of the commission of illegal acts
marred with violence and coercion.
Labor Arbiter Guerrero approved the computation of backwages and ordered the issuance of a Writ of
Execution for the satisfaction of the judgment award. MERALCO filed a Manifestation calling the attention of
Labor Arbiter Guerrero to the 30 May 2003 Decision of the Court of Appeals' Special Second Division in CA-G.R.
SP No. 72480.
Petitioners alleged that the Court of Appeals committed grave abuse of discretion in upholding the 28
February 2006 and 26 May 2006 Resolutions of the NLRC, in not passing upon the issues of reinstatement and
release of the garnished amount against MERALCO, and in ruling that the Decision in CA-G.R. SP No. 72480 is
considered a bar in the implementation of the Decision in CA-G.R. SP No. 72509.
Issue: Whether the Court of Appeals committed a reversible error in upholding the NLRC in issuing the writ of
preliminary injunction prayed for by MERALCO.
Ruling: No. In this case, the applicable rule is Article 263 of the Labor Code. Article 263(i) of the Labor Code
provides:(i) The Secretary of Labor and Employment, the Commission or the voluntary arbitrator shall decide
or resolve the dispute within thirty (30) calendar days from the date of the assumption of jurisdiction or the
certification or submission of the dispute, as the case may be. The decision of the President, the Secretary of
Labor and Employment, the Commission or the voluntary arbitrator shall be final and executory ten (10)
calendar days after receipt thereof by the parties.
A judicial review of the decisions of the NLRC may be filed before the Court of Appeals via a petition for
certiorari under Rule 65 of the Rules of Court but the petition shall not stay the execution of the assailed
decision unless a restraining order is issued by the Court of Appeals.
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Bisig Mangagawa sa Concrete Aggregates v. NLRC, September 16, 1993

Doctrine: ART. 218. Powers of the Commission. — The Commission shall have the power and authority:xxx xxx
xxx
(e) To enjoin or restrain any actual or threatened commission of any or all prohibited or unlawful acts or to
require the performance of a particular act in any labor dispute which, if not restrained or performed
forthwith, may cause grave or irreparable damage to any party or render ineffectual any decision in favor of
such party: Provided, That no temporary or permanent injunction in any case involving or growing out of a
labor dispute as defined in this Code shall be issued except after hearing the testimony of witnesses, with
opportunity for cross-examination, in support of the allegations of a complaint made under oath, and
testimony in opposition thereto, if offered, and only after a finding of fact by the commission, to the effect:
Facts: The labor conflict between the parties broke out in the open when the petitioner union 1 struck on April
6, 1992 protesting issues ranging from unfair labor practices and union busting allegedly committed by the
private respondent (PEÑALOSA AND CONCRETE AGGREGATES CORP.). 2 The union picketed the premises of the
private respondent at Bagumbayan and Longos in Quezon City; Angono and Antipolo in Rizal; San Fernando,
Pampanga and San Pedro, Laguna.
The strike hurt the private respondent. On April 8, 1992, it filed with the NLRC a petition for injunction 3 to
stop the strike which it denounced as illegal. It alleged:xxx xxx xxx
"13. On April 6, 1992, at around 7:00 P.M., respondents led by its officers and some members staged a wild-cat
strike, without a valid notice of strike, nor observing cooling-off period, and made even during the pendency of
a preventive mediation proceedings which was still scheduled for April 10, 1992;
"14. And during the said wild-cat strike, respondents have set-up makeshifts, tents, banners and streamers and
other man-made obstructions at the main plant and offices of petitioner which effectively impeded, as in fact
still effectively impeding the ingress and egress of persons who have lawful business with the petitioner;
The petition was set for hearing on April 13, 1992 at 3 p.m. The union, however, claimed that it was not
furnished a copy of the petition. Allegedly, the company misrepresented its address to be at Rm. 205-6 Herald
Bldg., Muralla St., Intramuros, Manila.On April 13, 1992, the NLRC heard the evidence of the company alone.
The ex parte hearing started at 2:30 p.m., where testimonial and documentary evidence were presented. 4
Some thirty (30) minutes later, an Ocular Inspection Report was submitted by an unnamed NLRC
representative. Before the day was over, the respondent NLRC (First Division) issued a temporary restraining
order against the union. No copy of this Order was furnished the union. The union learned of the Order only
when it was posted on April 15, 1992 at the premises of the company. On April 21, 1992, it filed its
Opposition/Answer to the petition for Injunction. The records show that the case was heard on April 24 and
30, May 4 and 5, 1992 by respondent Labor Arbiter Enrilo Peñalosa. The same day, however, the respondent
NLRC issued its disputed Order granting the company's motion for preliminary injunction.
Issue: Whether or not the respondent NLRC can issue a preliminary injunction, as it did issue, after the lapse of
a twenty day temporary restraining order without regard to the specific provision of Article 218 (e) of the
Labor Code,. . ., considering that in the Order dated May 5, 1992 (attached as Annex "E" of this petition) there

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is no finding of fact by the respondent NLRC in any of the five pages of the aforesaid Order, to the effect that,
as required by law, "(4) That complainant has no adequate remedy at law; and (5) That the public officers
charged with the duty to protect complainants property are unable or unwilling to furnish adequate
protection.
Held: No. In the case at bar, the records will show that the respondent NLRC failed to comply with the letter
and spirit of Article 218 (e), (4) and (5) of the Labor Code in issuing its Order of May 5, 1992. Article 218 (e) of
the Labor Code provides both the procedural and substantive requirements which must strictly be complied
with before a temporary or permanent injunction can issue in a labor dispute, viz:
"ART. 218. Powers of the Commission. — The Commission shall have the power and authority:xxx xxx xxx
(e) To enjoin or restrain any actual or threatened commission of any or all prohibited or unlawful acts or to
require the performance of a particular act in any labor dispute which, if not restrained or performed
forthwith, may cause grave or irreparable damage to any party or render ineffectual any decision in favor of
such party: Provided, That no temporary or permanent injunction in any case involving or growing out of a
labor dispute as defined in this Code shall be issued except after hearing the testimony of witnesses, with
opportunity for cross-examination, in support of the allegations of a complaint made under oath, and
testimony in opposition thereto, if offered, and only after a finding of fact by the commission, to the effect:
"(1) That prohibited or unlawful acts have been threatened and will be committed and will be continued unless
restrained but no injunction or temporary restraining order shall be issued on account of any threat, prohibited
or unlawful act, except against the person or persons, association or organization making the threat or
committing the prohibited or unlawful act or actually authorizing or ratifying the same after actual knowledge
thereof;
"(2) That substantial and irreparable injury to complainants property will follow;
"(3) That as to each item of relief to be granted, greater injury will be inflicted upon complainant by the denial
of relief than will be inflicted upon defendants by the granting of relief;
"(4) That complainant has no adequate remedy at law; and
"(5) That the public officers charged with the duty to protect complainants property are unable or unwilling to
furnish adequate protection.
"Such hearing shall be held after due and personal notice thereof has been served, in such manner as the
Commission shall direct, to all known persons against whom relief is sought, and also to the Chief Executive
and other public officials of the province or city within which the unlawful have been threatened or committed
charged with the duty to protect complainant's property: . . ." (Emphasis ours).

No less than Mr. Ronnie Mercado, the Assistant Manager for Operations of the Company, testified that after
the issuance of the ex parte temporary restraining order, the barricade blocking the gates were removed and
people were allowed free ingress and egress. "Verily, the factual circumstances proven by the evidence show
that there was no concurrence of the five (5) prerequisites mandated by Art. 218(e) of the Labor Code.Thus
there is no justification for the issuance of the questioned Order of preliminary injunction."

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V. Article 227 (formerly Article 221)

Meralco v. Gala, March 7, 2012
DOCTRINE: It is the spirit and intention of labor legislation that the NLRC and the labor arbiters shall use every
reasonable means to ascertain the facts in each case speedily and objectively, without regard to technicalities of
law or procedure, provided due process is duly observed.

FACTS:

On March 2, 2006, respondent Jan Carlo Gala commenced employment with the petitioner Meralco Electric
Company (Meralco) as a probationary lineman. On July 27, 2006, barely four months on the job, Gala was
dismissed for alleged complicity in pilferages of Meralco's electrical supplies, particularly, for the incident which
took place on May 25, 2006. On that day, Gala and other Meralco workers were instructed to replace a
worn-out electrical pole at the Pacheco Subdivision in Valenzuela City. While the Meralco crew was at work, one
Noberto Bing Llanes, a non-Meralco employee, arrived. He appeared to be known to the Meralco foremen as
they were seen conversing with him. Llanes boarded the trucks, without being stopped, and took out what were
later found as electrical supplies. Aside from Gala, the foremen and the other linemen who were at the
worksite when the pilferage happened were later charged with misconduct and dishonesty for their involvement
in the incident. Unknown to Gala and the rest of the crew, a Meralco surveillance task force was monitoring
their activities and recording everything with a Sony video camera. Meralco called for an investigation of the
incident and asked Gala to explain. Gala denied involvement in the pilferage, contending that even if his
superiors might have committed a wrongdoing, he had no participation in what they did. Despite Gala’s
explanation, Meralco proceeded with the investigation and eventually terminated his employment on July 27,
2006. Gala responded by filing an illegal dismissal complaint against Meralco.

ISSUES:

1. Whether the Court should dismiss the petition outright based on procedural grounds.

2. Whether Gala is illegally dismissed by petitioner Meralco?

RULING:

1. NO. Gala would want the petition to be dismissed outright on procedural grounds, claiming that the
Verification and Certification, Secretary’s Certificate and Affidavit of Service accompanying the petition do not
contain the details of the Community Tax Certificates of the affiants, and that the lawyers who signed the
petition failed to indicate their updated MCLE certificate numbers, in violation of existing rules. We stress at this
point that it is the spirit and intention of labor legislation that the NLRC and the labor arbiters shall use every
reasonable means to ascertain the facts in each case speedily and objectively, without regard to technicalities of
law or procedure, provided due process is duly observed. In keeping with this policy and in the interest of
substantial justice, we deem it proper to give due course to the petition, especially in view of the conflict
between the findings of the labor arbiter, on the one hand, and the NLRC and the CA, on the other. As we
said in S.S. Ventures International, Inc. v. S.S. Ventures Labor Union, the application of technical rules of
procedure in labor cases may be relaxed to serve the demands of substantial justice.

2. NO. Contrary to the conclusions of the CA and the NLRC, there is substantial evidence supporting Meralco’s
position that Gala had become unfit to continue his employment with the company. Gala was found, after an
administrative investigation, to have failed to meet the standards expected of him to become a regular

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employee and this failure was mainly due to his undeniable knowledge, if not participation, in the pilferage
activities done by their group, all to the prejudice of the Company’s interests.

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Nationwide Security and Allied Services v. CA, July 14, 2008
Doctrine:
The right to appeal is a statutory right and one who seeks to avail of the right must comply with the statute or
the rules. The rules, particularly the requirements for perfecting an appeal within the reglementary period
specified in the law, must be strictly followed as they are considered indispensable interdictions against
needless delays and for the orderly discharge of judicial business.

Facts:
Labor Arbiter Manuel M. Manansala found petitioner Nationwide Security and Allied Services, Inc., a security
agency, not liable for illegal dismissal in two cases involving eight security guards who were employees of the
petitioner. The Labor Arbiter directed the petitioner to pay the aforementioned security guards ₱81,750.00 in
separation pay, ₱8,700.00 in unpaid salaries, ₱93,795.68 for underpayment and 10% attorney’s fees based on
the total monetary award.
Dissatisfied with the decision, petitioner appealed to the NLRC which dismissed its appeal for two reasons —
first, for having been filed beyond the reglementary period within which to perfect the appeal and second, for
filing an insufficient appeal bond.
NLRC Ruling: Petitioner filed a Motion for Reconsideration which was denied. They elevated the case to the CA
.
CA Ruling: The Court of Appeals dismissed the case, holding that in a special action for certiorari, the burden is
on petitioner to prove not merely reversible error, but grave abuse of discretion amounting to lack of or excess
of jurisdiction on the part of public respondent NLRC.
Petitioner’s contention: Petitioner contends that the Court of Appeals erred when it dismissed its case based
on technicalities.
Respondent’s contention: Private respondents contend that the appeal to the NLRC had not been perfected,
since the appeal was filed outside the reglementary period, and the bond was insufficient.

Issue:
Whether or not technicalities in Labor cases must prevail over the spirit and intention of the Labor Code as
provided in Art. 221.

Ruling:
The petition lacks merit.
Both the NLRC and the Court of Appeals found that petitioner received the decision of the Labor Arbiter on
July 16, 1999. This factual finding is supported by sufficient evidence, and we take it as binding on us.
Petitioner then simultaneously filed its "Appeal Memorandum", "Notice of Appeal" and "Motion to Reduce
Bond", by registered mail on July 29, 1999, under Registry Receipt No. 003098. These were received by the
NLRC on July 30, 1999. The appeal to the NLRC should have been perfected, as provided by its Rules, within a
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period of 10 days from receipt by petitioner of the decision on July 16, 1999. Clearly, the filing of the
appeal--three days after July 26, 1999--was already beyond the reglementary period and in violation of the
NLRC Rules and the pertinent Article on Appeal in the Labor Code.
Failure to perfect an appeal renders the decision final and executory. The right to appeal is a statutory right
and one who seeks to avail of the right must comply with the statute or the rules. The rules, particularly the
requirements for perfecting an appeal within the reglementary period specified in the law, must be strictly
followed as they are considered indispensable interdictions against needless delays and for the orderly
discharge of judicial business. It is only in highly meritorious cases that this Court will opt not to strictly apply
the rules and thus prevent a grave injustice from being done.

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Diamond Taxi v. Llamas, March 12, 2014
Doctrine:
In any proceeding before the Commission or any of the Labor Arbiters, the rules of evidence prevailing in
courts of law or equity shall not be controlling and it is the spirit and intention of this Code that the
Commission and its members and the Labor Arbiters shall use every and all reasonable means to ascertain the
facts in each case speedily and objectively, without regard to technicalities of law or procedure, all in the
interest of due process.
Facts:

Felipe Llamas worked as a taxi driver for petitioner Diamond Taxi, owned and operated by petitioner Bryan
Ong. Llamas filed before the Labor Arbiter (LA) a complaint for illegal dismissal against the petitioners. In their
position paper, the petitioners denied dismissing Llamas. They claimed that Llamas had been absent without
official leave for several days, and submitted a copy of the attendance logbook as proof. They also pointed out
that Llamas committed several traffic violations amounting and several acts of insubordination and refusal to
heed management instructions. They argued that these acts – traffic violations, insubordination and refusal to
heed management instructions – constitute grounds for the termination of Llamas’ employment.

Llamas failed to seasonably file his position paper. On November 29, 2005, the LA rendered a decision
dismissing Llamas’ complaint for lack of merit. Llamas received a copy of this LA decision on January 5, 2006.
Meanwhile, he filed his position paper on December 20, 2005. Llamas claimed that his failure to file his
position paper was due to the refusal of his previous counsel to comply.

He also alleged that he had a misunderstanding with Aljuver Ong, Bryan’s brother and operations manager of
Diamond Taxi, and the incident led to his forced resignation. Llamas filed a motion for reconsideration before
the LA. The LA treated Llamas’ motion as an appeal per Section 15, Rule V of the 2005 Revised Rules of
Procedure of the NLRC (2005 NLRC Rules) (the governing NLRC Rules of Procedure at the time Llamas filed his
complaint before the LA).

The NLRC dismissed for non-perfection Llamas’ motion for reconsideration treated as an appeal. The NLRC
pointed out that Llamas failed to attach the required certification of non-forum shopping per Section 4, Rule VI
of the 2005 NLRC Rules.

The CA reversed and set aside the assailed NLRC resolution. Citing jurisprudence, the CA pointed out that
non-compliance with the requirement on the filing of a certificate of non-forum shopping, while mandatory,
may nonetheless be excused upon showing of manifest equitable grounds proving substantial compliance.

Issue:
Whether the NLRC committed grave abuse of discretion in dismissing Llama’s appeal on mere technicality.
Ruling:
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Yes. The NLRC committed grave abuse of discretion in dismissing Llama’s appeal on mere technicality.
The requirement for a sworn certification of non-forum shopping was prescribed by the Court under Revised
Circular 28-91, as amended by Administrative Circular No. 04-94, to prohibit and penalize the evils of forum
shopping. Revised Circular 28-91, as amended by Administrative Circular No. 04-94, requires a sworn
certificate of non-forum shopping to be filed with every petition, complaint, application or other initiatory
pleading filed before the Court, the CA, or the different divisions thereof, or any other court, tribunal or
agency.
Ordinarily, the infirmity in Llamas' appeal would have been fatal and would have justified an end to the case.
A careful consideration of the circumstances of the case, however, convinces us that the NLRC should,
indeed, have given due course to Llamas' appeal despite the initial absence of the required certificate. We
note that in his motion for reconsideration of the NLRC's May 30, 2006 resolution, Llamas attached the
required certificate of non-forum shopping.
Moreover, Llamas adequately explained, in his motion for reconsideration, the inadvertence and presented a
clear justifiable ground to warrant the relaxation of the rules. To recall, Llamas was able to file his position
paper, through his new counsel, only on December 20, 2005. He hired the new counsel on December 19,
2005 after several repeated, albeit failed, pleas to his former counsel to submit, on or before October 25,
2005 per the LA's order, the required position paper. On November 29, 2005, however, the LA rendered a
decision that Llamas and his new counsel learned and received a copy of only on January 5, 2006. Evidently,
the LA's findings and conclusions were premised solely on the petitioners' pleadings and evidence. And,
while not the fault of the LA, Llamas, nevertheless, did not have a meaningful opportunity to present his
case, refute the contents and allegations in the petitioners' position paper and submit controverting
evidence.
Under Article 221 (now Article 227) of the Labor Code, "the Commission and its members and the Labor
Arbiters shall use every and all reasonable means to ascertain the facts in each case speedily and objectively
and without regard to technicalities of law or procedure, all in the interest of due process." Consistently, we
have emphasized that "rules of procedure are mere tools designed to facilitate the attainment of justice. A
strict and rigid application which would result in technicalities that tend to frustrate rather than promote
substantial justice should not be allowed . . . . No procedural rule is sacrosanct if such shall result in subverting
justice." Ultimately, what should guide judicial action is that a party is given the fullest opportunity to establish
the merits of his action or defense rather than for him to lose life, honor, or property on mere technicalities.

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Sara Lee v. Macatlang, January 14, 2015

Doctrine:

A compromise must not be contrary to law, morals, good customs and public policy; and must have been freely
and intelligently executed by and between the parties.

The 10% requirement set in McBurniz v. Ganzon pertains to the reasonable amount which the NLRC would
accept as the minimum of the bond that should accompany the motion to reduce bond in order to suspend
the period to perfect an appeal under the NLRC rules. The 10% is based on the judgment award and should in
no case be construed as the minimum amount of bond to be posted in order to perfect appeal.

Facts:

This case arises from a motion for reconsideration filed by Sara Lee from a judgment rendered by the
Supreme

Court.

Aris Philippines permanently ceased operations on 9 October 1995 displacing 5,984 rank- and-file employees.
On 26 October 1995, Fashion Accessories Phils. Inc. (FAPI) was incorporated prompting former Aris employees
to file a case for illegal dismissal on the allegations that FAPI was a continuing business of Aris. Sara Lee
Corporations, Sara Lee Philippines and Cesar Cruz were impleaded as defendants being major stockholders of
FAPI and officers of Aris, respectively.

LA RULING: Found the dismissals to be illegal and awarded monetary benefits amounting to P3.4 BILLION
pesos. The Petitioner Corporations filed a Notice of Appeal together with a Motion to Reduce Appeal Bond.
The amount of 4.5 million was accepted with an order to post an additional 4.5 million bond.

CA RULING: The Aris employees filed a Petition for Review before the Court of Appeals raising that the amount
should have been an equivalent of the monetary award. The CA changed the amount to 1 BILLION- later
reduced 725 Million by the Supreme Court.

APPEAL TO THE SC

Petitioner’s Argument: Seek to enforce the 10% minimum bond amount in the McBurnie v. Ganzon case;
enforce a compromise agreement denominated as a “Motion to Admit Confession of Judgment”

Respondent’s Argument: Sustains rulings of the Court.

Issue:

Whether there the compromise is valid.

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Ruling:

NO.

A compromise must not be contrary to law, morals, good customs and public policy; and must have been freely
and intelligently executed by and between the parties. A compromise agreement is valid as long as the
consideration is reasonable and the employee signed the waiver voluntarily, with a full understanding of what
he was entering into.

A review of the compromise agreement shows a gross disparity between the amount offered by the
Corporations compared to the judgment award. The judgment award is P3,453,664,710.86 or each employee
is slated to receive P577,149.85. On the other hand, the P342,284,800.00 compromise is to be distributed
among 5,984 employees which would translate to only P57,200.00 per employee. From this amount,
P8,580.00 as attorney's fees will be deducted, leaving each employee with a measly P48,620.00. In fact, the
compromised amount roughly comprises only 10% of the judgment award.

We note that the compromise is a mere 6% of the contingent sum that may be received by petitioners and the
minuscule amount is certainly questionable because it does not represent a true and fair amount which a
reasonable agent may bargain for his principal.

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Dela Rosa Liner v. Borela, July 29, 2015
Doctrine: Compromise agreement’s application cannot apply to all claims and damages or losses either party
may have against each other whether known or unknown.

Facts:

On September 23, 2011, respondents Calixto Borela, bus driver, and Estelo Amarille, conductor, filed separate
complaints (later consolidated) against petitioners Dela Rosa Liner, Inc., a public transport company, Rosauro
Dela Rosa, Sr., and Nora Dela Rosa, for underpayment/non-payment of salaries, holiday pay, overtime pay,
service incentive leave pay, 13th month pay, sick leave and vacation leave, night shift differential, illegal
deductions, and violation of Wage Order Nos. 13, 14, 15 and 16.

In a motion dated October 26, 2011, the petitioners asked the labor arbiter to dismiss the case for forum
shopping. They alleged that on September 28, 2011, the CA 13th Division disposed of a similar case between
the parties (CA-G.R. SP No. 118038) after they entered into a compromise agreement which covered all claims
and causes of action they had against each other in relation to the respondents' employment.

The respondents opposed the motion, contending that the causes of action in the present case are different
from the causes of action settled in the case the petitioners cited.

Labor Arbiter (LA) Danna A. Castillon, in an order dated November 24, 2011, upheld the petitioners' position
and dismissed the complaint on grounds of forum shopping. Respondents appealed the LA's ruling. On July 31,
2012, the National Labor Relations Commission (NLRC) 1st Division granted the appeal, reversed LA Castillon's
dismissal order, and reinstated the complaint.

Issue:

WON the compromise agreement covered all claims and causes of action in the second complaint

Held:

No. The compromise agreement had been concluded to terminate the illegal dismissal and unfair labor case
then pending before the CA. While the parties agreed that no further action shall be brought by the parties
against each other, they pointedly stated that they referred to actions on the same grounds. The phrase same
grounds can only refer to the grounds raised in the first complaint and not to any other grounds.

“We likewise cannot accept the compromise agreement's application "to all claims and damages or losses
either party may have against each other whether those damages or losses are known or unknown, foreseen
or unforeseen."

This coverage is too sweeping and effectively excludes any claims by the respondents against the petitioners,
including those that by law and jurisprudence cannot be waived without appropriate consideration such as
nonpayment or underpayment of overtime pay and wages.”

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Magsaysay Maritime v. De Jesus, August 30, 2017.
Doctrine: General rule in compensability of death is that a seafarer’s death must have occurred during the
term of the employment contract, an exception to his rule is when a seafarer contracted an illness while under
the contract and this illness caused his death.

Facts: Bernardine, hired by Magsaysay Maritime Corporation as an Accommodation Supervisor for the cruise
ship Regal Princess, was soon diagnosed with Aortic Aneurysm and died two months after the termination of
his contract of employment. Cynthia De Jesus, Bernardine’s widow, filed a complaint against Magsaysay for
“payment of death benefits, medical expenses, sickness allowance, damages and attorney’s fees.” Labor
Arbiter granted Cynthia’s complaint. National Labor Relations Commission denied Magsaysay’s appeal. Court of
Appeals rules in favor of Cynthia. Magsaysay Corporation argue that the award was issued with grave abuse of
discretion considering that Bernardine’s death was not compensable under the POEA – SEC.

Issue: Whether or not the award of death benefits was issued with grave abuse of discretion.

Ruling: No. Section 20 (A) of the POEA – SEC requires that for a seafarer to be entitled to death benefits, he
must have suffered a work – related death during the term of his contract. However, Section 32 – A of the
POEA – SEC acknowledges the possibility of “compensation for the death of the seafarer occurring after the
employment contract on account of a work – related illness” as long as the following conditions are met: (1)
The seafarer’s work must involve the risks describes herein; (2) The disease was contracted as a result of the
seafarer’s exposure to the described risks; (3) The disease was contracted within a period of exposure and
under such other factors necessary to contract it; (4) There was no notorious negligence on the part of the
seafarer. The court found that the conditions, such as the climate the worker was exposed to, helped trigger
the onset of illness of the deceased. Being said, there is therefore a reasonable connection between the
conditions of employment and work actually performed by the deceased seafarer and his illness. Hence, the
award of death benefits was proper.

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VI. Article 229 (formerly Article 223)

GBMLT Manpower v. Malinao, July 6, 2015
GBMLT MANPOWER SERVICES, INC., petitioner, vs. MA. VICTORIA H. MALINAO, respondent.

[G.R. No. 189262. July 6, 2015.]

Doctrine:

The word “only” in the phrase “an appeal by the employer may be perfected only upon the posting of a cash or
surety bond.” It has regarded the phrase as the legislative’s unequivocal declaration that the posting of a cash
or surety bond is the exclusive means by which an employer’s appeal from a labor arbiter’s decision may be
perfected. The intention of the requirement is fulfilled when the employer is able to deposit with the NLRC an
amount that is equivalent to the monetary award adjudged by the labor arbiter in the employee’s favor, and
that shall subsist until the final resolution of the appeal.

Facts:
Malinao applied as a teacher for deployment abroad. She went through the application and was interviewed
by the President of an Ethiopian University. She was then endorsed as an accounting lecturer. She paid for the
fees equivalent to her one month salary and signed a Contract of Employment covering 2 Academic years,
approved by the POEA. Upon her arrival in Ethiopia, she was told that her credentials would have to be
reevaluated. She was presented a new contract for signing. She was doubtful at first, but still signed anyway
seeing it as a copy of the original contract. Respondent was assigned to Alemaya University but decided to
discontinue because she said that auditing, not accounting, was her specialization. As a result, another lecturer
took over and she had no teaching load.
Thereafter, Alemaya University VP Alamirew circulated a memo on the Ministry of Education requirement to
evaluate the credentials of the Filipino teaching staff and suggest an academic rank for them pursuant to the
national norm. Another memo was issued lowering the ranks of most of the Filipino teaching staff and asking
them to sign a new contract reflecting a change in rank and salary. Respondent's designation was lowered from
lecturer to assistant lecturer with a USD 600 monthly salary. Respondent refused to sign a new contract and
together with affected Filipino colleagues, she went to the Ministry of Education to protest the re-ranking. She
later requested in a letter to the VP to issue a notice of termination to her "in order not to prolong [her]
agony" after a misunderstanding with the VP during a meeting following the protest.
Respondent was again replaced by another instructor in Auditing II and left idle due to a students' petition.
Dean Kassa of the University questioned her qualification alluding to her bachelor's degree. Respondent was
offended insisted she was a CPA and law graduate. Her response stated that in the Philippines, a person with a
law degree and who passed the bar examinations has a degree more than a master's, but less than a
doctorate. She recognized the university’s right to terminate her at any time, but insisted there was no need to
discredit her.

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On 6 April 2006, VP Alamirew issued the notice of termination to respondent. The notice alluded to the two
instances when the Department of Accounting had to replace respondent in her course assignments. She was
said to be incompetent and have insulted students, the staff and the management in particular and Ethiopians
in general in the class. She was given three months advance notice as regards the contract termination.
Respondent replied with a letter stating that the last sentence on the notice of termination is provocative,
malicious and defamatory. While waiting for the three-month period to expire, respondent was offered a post
at the Internal Audit Department by the University President which she accepted the job through a letter.
However, she changed her mind and through a letter addressed to the President, respondent rejected the offer
stating that she was treated rudely and assigned to work under the acting head, a mere diploma holder
making her feel insulted.
Respondent was repatriated on 27 June 2006. She later signed a Quitclaim and Release dated 5 July 2006 in
favor of petitioner.
On 18 July 2006, respondent filed a complaint before the LA against petitioner as local agency and Alemaya
University as foreign principal seeking full payment of the unexpired portion of the two-year contract, moral
and exemplary damages, and attorney's fees.
LA: found that respondent had been constructively dismissed.
NLRC: Dismissed Malinao’s complaint because her claims has been a subject of a valid release, waiver, and
quitclaim. The NLRC also ruled that she could no longer question the termination of her contract of
employment after her acceptance of the new offer.
CA: Reinstated the ruling of the LA. It ruled that while respondent accepted the offer of President Kassa to
work at the Internal Audit Department, such arrangement was in the purview of a new contract of
employment. A new contract was invalid without the approval of the POEA.
For the appeal bond before the NLRC. It ruled that since Malinao’ check payment was encashed only after the
reglementary period within which to appeal, the appeal was considered to have been filed out of time. The
rules provide that only a cash or surety bond may be considered as appeal bond, and noncompliance with the
rule was fatal to the petitioner's cause.
Issue:
Whether or not GBMLT’s appeal was perfected on time.
Ruling:
Yes. The posting of a bond for the perfection of an appeal from a decision of the labor arbiter is required under
Article 228 of the Labor Code. The requirement of an appeal bond is further emphasized in Section 6, Rule VI
of the 2011 NLRC Rules of Procedure. This provision clarifies that damages and attorney’s fees awarded by the
labor arbiter shall not be included in the computation of the bond to be posted.
In several pronouncements, this Court has adopted a particular understanding of the word “only” in the phrase
“an appeal by the employer may be perfected only upon the posting of a cash or surety bond.” It has regarded
the phrase as the legislative’s unequivocal declaration that the posting of a cash or surety bond is the exclusive
means by which an employer’s appeal from a labor arbiter’s decision may be perfected. The intention of the
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requirement is fulfilled when the employer is able to deposit with the NLRC an amount that is equivalent to
the monetary award adjudged by the labor arbiter in the employee’s favor, and that shall subsist until the final
resolution of the appeal.
In this case, there is no question that the NLRC accepted the appeal bond posted by petitioner through a
current- dated check. That check was deposited to the bank account of the NLRC without incident.
Furthermore, respondent has never disputed the sufficiency of the bond posted or petitioner’s manifestation
before us that “up to the present, the cash bond posted x x x is still in effect and remains in the coffers of the x
x x NLRC and is susceptible to execution in the unfortunate event that this Petition fails.”
Hence, the appeal of petitioner has been perfected on time by virtue of its compliance with the appeal bond
requirement. We note that its payment of the appeal bond through the issuance of a check was not even an
issue before the NLRC. The latter had given due course to petitioner’s appeal without any indication of having
found any defect in the appeal bond posted.
Dispositive Portion: WHEREFORE, the Court of Appeals’ Decisions are REVERSED and SET ASIDE. The Decision
issued by the National Labor Relations Commission in NLRC, dismissing respondent’s complaint, is REINSTATED.

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Orozco v. CA, April 29, 2005

Doctrine: In cases of a judgments involving a monetary award, an appeal by the employer may be perfected
only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the
Commission in the amount equivalent to the monetary award in the judgment appealed from. However, this
strict rule may be relaxed in line with the principle that substantial justice is better served by allowing the
appeal to be resolved on the merits rather than dismissing it based on a technicality.

Facts:

Orozco penned the column Feminist Reflections which appeared in the Lifestyle Section of the PDI. She
submitted weekly columns with a per article wage of Two Hundred Fifty Pesos (P250.00) which was later
increased to Three hundred Pesos (P300.00). Magsanoc wanted to improve the Lifestyle section and decided
to cut down a number of columnists and one of them was Orozco.

Aggrieved, Orozco filed the instant case against PDI before the NLRC. The PDI raised as primary defense the
claim that Orozco was not an employee of the newspaper. The LA ruled in favor of Orozco. PDI timely filed a
Notice and Memorandum, but it did not lodge a cash or surety bond in the amount equivalent to the monetary
award in the judgment appealed from. PDI adverted to such failure on its part before the NLRC but justified the
same on the ground that the Decision of the LA did not fix any amount but merely stated that Orozco was
entitled to back wages.

The CA reversed the decision of the NLRC and ruled that Orozco was not an employee of PDI. Orozco contends
that a grievous error tantamount to grave abuse of discretion was committed by the Court of Appeals when it
failed to appreciate the observation of the NLRC that private respondents did not perfect their appeal as they
did not deposit on time any cash or surety bond in compliance with the provision of Art. 223 of the Labor Code
when they filed an appeal of the Labor Arbiters decision at the NLRC. Failing to do so, the employer loses the
right to appeal, and the Labor Arbiters decision becomes final and executory.

Issue:

Whether or not an appeal had indeed been perfected.

Ruling:

Yes. The relevant portion of Article 223 states:

ART. 223. Appeal. - Decisions, awards or orders of the Labor Arbiter are final and executory unless appealed to
the Commission by any or both parties within ten (10) calendar days from receipt of such decisions, awards, or
orders. . . In case of a judgment involving a monetary award, an appeal by the employer may be perfected
only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the
Commission in the amount equivalent to the monetary award in the judgment appealed from.
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However, a series of Court decisions provided for exceptions wherein the Court relaxed this strict rule in line
with the principle that substantial justice is better served by allowing the appeal to be resolved on the merits
rather than dismissing it based on a technicality.

The judgment of the LA in this case merely stated that petitioner was entitled to back wages, 13th month pay
and service incentive leave pay without however including a computation of the alleged amounts.
Respondents cannot be expected to post such appeal bond equivalent to the amount of the monetary award
when the amount thereof was not included in the decision of the labor arbiter. The computation of the
amount awarded to petitioner not having been clearly stated in the decision of the labor arbiter, private
respondents had no basis for determining the amount of the bond to be posted. Thus, the appeal was proper.

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64. Lepanto Consolidated Mining v. Icao, January 15, 2014
Doctrine:
In appeals from any decision or order of the labor arbiter, the posting of an appeal bond is required under
Article 223 of the Labor Code. However, when the law does not clearly provide a rule or norm for the tribunal
to follow in deciding a question submitted, but leaves to the tribunal the discretion to determine the case in
one way or another, the judge must decide the question in conformity with justice, reason and equity, in view
of the circumstances of the case.
Facts:
The private respondent (Icao) was dismissed from the Lepanto Consolidated Mining Corporation after he was
charged by the said company with “highgrading" or the act of concealing, possessing or unauthorized
extraction of highgrade material/ore without proper authority.
Private respondent claimed that his dismissal from work was without just or authorized cause since petitioners
failed to prove by ample and sufficient evidence that he stole gold bearing highgrade ores from the company
premises.
The labor arbiter rendered a decision holding the petitioner and its CEO liable for illegal dismissal and ordering
them to pay respondent Icao P345,879.45, representing his full backwages and separation pay. The alleged
“highgrading” was found to have been fabricated; consequently, there was no just cause for the dismissal of
the respondent.
Petitioner and its CEO filed an Appearance with Memorandum of Appeal before the NLRC. Instead of posting
the required appeal bond in the form of a cash bond or a surety bond in an amount equivalent to the
monetary award of P345,879.45 adjudged in favor of Icao, they filed a Consolidated Motion For Release Of
Cash Bond and to Apply Bond Subject For Release As Payment For Appeal Bond (Consolidated Motion). They
requested therein that the NLRC release the cash bond of P401,610.84, which they had posted in the separate
case Dangiw Siggaao v. LCMC, and apply that same cash bond to their present appeal bond liability. They
reasoned that since this Court had already decided Dangiw Siggaao in their favor, and that the ruling therein
had become final and executory, the cash bond posted therein could now be released.
The NLRC explained that their Consolidated Motion for the release of the cash bond in another case (Dangiw
Siggaao), for the purpose of applying the same bond to the appealed case before it, could not be considered as
compliance with the requirement to post the required appeal bond. Consequently, it declared the labor
arbiter’s Decision to be final and executory.
The CA affirmed the decision of the NLRC.
Issue:
Whether or not petitioner complied with the appeal bond requirement under the Labor Code and the NLRC
Rules by filing a Consolidated Motion to release the cash bond it posted in another case, which had been
decided with finality in its favor, with a view to applying the same cash bond to the present case.
Ruling:

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Yes. The Court finds that petitioner substantially complied with the appeal bond requirement.
In appeals from any decision or order of the labor arbiter, the posting of an appeal bond is required under
Article 223 of the Labor Code, which reads:
Article 223. APPEAL.–Decisions, awards, or orders of the Labor Arbiter are final and executory unless appealed
to the Commission by any or both parties within ten (10) calendar days from receipt of such decisions, awards,
or orders. Such appeal may be entertained only on any of the following grounds:
xxx
In case of a judgment involving a monetary award, an appeal by the employer may be
perfected only upon the posting of a cash or surety bond issued by a reputable
bonding company duly accredited by the Commission in the amount equivalent to the
monetary award in the judgment appealed from.
The 2011 NLRC Rules of Procedure (NLRC Rules) incorporates this requirement in Rule VI, Section 6, which
provides:
SECTION 6. Bond.–In case the decision of the Labor Arbiter or the Regional Director
involves a monetary award, an appeal by the employer may be perfected only upon
the posting of a bond, which shall either be in the form of cash deposit or surety bond
equivalent in amount to the monetary award, exclusive of damages and attorney’s
fees.
While it is true that the procedure undertaken by the petitioner is not provided under the Labor Code or in the
NLRC Rules, SC answered the question in the affirmative. They reiterate their pronouncement in Araneta v.
Rodas, where the Court said that when the law does not clearly provide a rule or norm for the tribunal to
follow in deciding a question submitted, but leaves to the tribunal the discretion to determine the case in one
way or another, the judge must decide the question in conformity with justice, reason and equity, in view of
the circumstances of the case.
The Court found exceptional circumstances that warranted an extraordinary exercise of its power to exempt a
party from the rules on appeal bond, there is all the more reason in the present case to find that petitioner
substantially complied with the requirement. We emphasize that in this case we are not even exempting
petitioners from the rule, as in fact we are enforcing compliance with the posting of an appeal bond. We are
simply liberally applying the rules on what constitutes compliance with the requirement, given the special
circumstances surrounding the case as explained above.
Having complied with the appeal bond requirement, petitioner’s appeal before the NLRC must therefore be
reinstated.

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65. Forever Security v. Flores, September 7, 2007
Doctrine:
The requirement of a cash or surety bond for the perfection of an appeal from the Labor Arbiter’s monetary
award is not only mandatory but jurisdictional as well, and non-compliance therewith is fatal and has the
effect of rendering the award final and executory.
Facts:
Respondents were security guards employed under Petitioner Forever Security Agency. As security officers,
they worked for twelve (12) hours every day including Sundays and holidays. Forever Security dismissed
Respondents on the ground that they abandoned their posts, duties, and responsibilities as security guards.
Respondents filed complaints for illegal dismissal with the NLRC against Petitioner. The Labor Arbiter ruled in
favor of them, ordering Petitioner to reinstate them along with the payment of back wages.
Petitioner appealed to the NLRC. Instead of posting a cash or surety bond, Petitioner filed a Motion for
Extension of Time to File/Submit Appeal/Surety Bond, alleging among others, that appellants are finalizing
appropriate arrangements with an insurance bonding company; that due to lack of material time, they are not
able to file surety/appeal bond. They further prayed that they be given a thirty-day extension (From April 27 to
May 27, 1995) within which to file a surety/appeal bond.
The appeal was dismissed on July 31 for failure to perfect the same as they had not yet posted the required
cash or surety bond.
Petitioner then appealed to the CA, which was also dismissed on the ground that petitioner failed to observe
the procedural rules provided for by the Labor Code regarding the payment of a cash or security bond. As such
the CA held that the decision had already become final and executory.
Issue:
Whether or not the case had long become final and executory for failure of petitioner to comply with
procedural rules on perfection of appeals to the NLRC.
Ruling:
Yes.
The SC cited Article 223 of the Labor Code (now Article 229), which states that “In case of a judgment involving
a monetary award, an appeal by the employer may be perfected only upon the posting of a cash or surety bond
… in the amount equivalent to the monetary award in the judgment appealed from.”
Additionally, the New Rules of Procedure of the NLRC provides in Section 6 that “In case the decision of a Labor
Arbiter… involves a monetary award, an appeal by the employer shall be perfected only upon the posting of a
cash or surety bond”
The requirement of a cash or surety bond for the perfection of an appeal from the Labor Arbiter’s monetary
award is not only mandatory but jurisdictional as well, and non-compliance therewith is fatal and has the
effect of rendering the award final and executory.
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UERM- Memorial Medical Center v. NLRC, March 3, 1997
Doctrine: Posting of property bond will perfect an appeal. — The applicable law is Article 223 of the Labor
Code, as amended by Republic Act No. 6715, which provides: "In case of a judgment involving a monetary
award, an appeal by the employer may be perfected only upon the posting of a cash or surety bond issued
by a reputable bonding company duly accredited by the Commission in the amount equivalent to the
monetary award in the judgment appealed from." We have given a liberal interpretation to this provision. In
YBL v. NLRC it was ruled that while Article 223 of the Labor Code, requiring a cash or surety bond in the
amount equivalent to the monetary award in the judgment appealed from for the appeal to be perfected,
may be considered a jurisdictional requirement, nevertheless, adhering to the principle that substantial
justice is better served by allowing the appeal on the merits threshed out by the NLRC, the Court finds and
so holds that the foregoing requirement of the law should be given a liberal interpretation." Then too, in
Oriental Mindoro Electric Cooperative, Inc. v. National Labor Relations Commission, it was held that The
intention of the lawmakers to make the bond an indispensable requisite for the perfection of an appeal by
the employer is underscored by the provision that an appeal by the employer may be perfected "only upon
the posting of a cash or surety bond. The word "only" makes it perfectly clear that the lawmakers intended
the posting of a cash or surety bond by the employer to be the exclusive means by which an employer's
appeal may be perfected. The requirement is intended to discourage employers from using an appeal to
delay, or even evade, their obligation to satisfy their employees' just and lawful claims. Considering,
however, that the current policy is not to strictly follow technical rules but rather to take into account the
spirit and intention of the Labor Code,it would be prudent for us to look into the merits of the case,
especially since petitioner disputes the allegation that the private respondent was illegally dismissed.

Facts: In December 14 1987 private respondents who are faculty members and rank and file employees of
petition hospital were granted separate salary increase in the minimum wage by R.A No 6640 and R.A No
6727 which mandated a ten (P10.00) peso increase on the prevailing daily minimum wage of P54.00. There
was a difference of P95.00 in the salaries of the two classes of employees. Private respondents who are rank
and file employees demanded payment of the difference. Before the parties could settle their dispute,
Republic Act No. 6727 took effect on 1 July 1989 which again increased the daily minimum wage in the
private sector (whether agricultural or non-agricultural) by P25.00. Again, there was a difference of P237.42
per month between the salaries of union members and non-union members.

In September 1987, petitioners increased the hiring rate of the new employees to P188.00 per month.
Private respondents once more demanded from the petitioners payment of the salary differential mandated
by RA No. 6727 and correction of the wage distortion brought about by the increase in the hiring rate of new
employees

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On 12 April 1988, Policy Instruction No. 54 was issued the personnel in subject hospitals and clinics are
entitled to a full weekly wage of seven days if they have completed the 40-hour/5-day workweek in any
given workweek. All enforcement and adjudicatory agencies of this Department shall be guided by this
issuance in the disposition of cases involving the personnel of covered hospitals and clinics.Petitioners
challenged the validity of said Policy Instruction and refused to pay the salaries of the private respondents
for Saturdays and Sundays.

Within the reglementary period for appeal, the petitioners filed their Notice and Memorandum of Appeal
with a Real Estate Bond consisting of land and various improvements therein. The private respondents
moved to dismiss the appeal on the ground that Article 223 of the Labor Code, as amended, requires the
posting of a cash or surety bond. The NLRC directed petitioners to post a cash or surety bond with a warning
that failure to do so would cause the dismissal of the appeal. The petitioners filed a Motion for
Reconsideration alleging it is not in a viable financial condition to post a cash bond nor to pay the annual
premium for a surety bond, the NLRC then dismissed the petitioners appeal.

Issue: Whether in perfecting an appeal to the NLRC a property bond is excluded by the two forms of appeal
bond cash or surety as enumerated in Article 223 of the Labor Code

Ruling: No, in case of a judgment involving a monetary award, an appeal by the employer may be perfected
only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by
the Commission in the amount equivalent to the monetary award in the judgment appealed from. The
requirements under Article 223 of the Labor Code should be given a liberal interpretation. While requiring a
cash or surety bond in the amount equivalent to the monetary award in the judgment appealed from for the
appeal to be perfected, may be considered a jurisdictional requirement, nevertheless, adhering to the
principle that substantial justice is better served by allowing the appeal on the merits threshed out by the
NLRC, the Court finds and so holds that the foregoing requirement of the law should be given a liberal
interpretation.

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Manila Mining v. Amor , April 20, 2015

Doctrine: The test to determine the existence of independent contractorship is whether or not the one
claiming to be an independent contractor has contracted to do the work according to his own methods and
without being subject to the control of the employer, except only as to the results of the work.

Facts: Respondents Lowito Amor, Rollybie Ceredon, Julius Cesar, Ronito Martinez and Fermin Tabili, Jr. were
regular employees of petitioner Manila Mining Corporation. petitioner temporarily shut down its mining
operations pending approval of its application to increase said facilty’s capacity by the Department of
Environment and Natural Resources-Environment Management Bureau (DENR-EMB), Butuan City.

Although the DENR-EMB issued a temporary authority for it to be able to continue operating for another six (6)
months and to increase its capacity, petitioner failed to secure an extension permit when said temporary
authority eventually lapsed.

Petitioner served a notice, informing its employees and the Department of Labor and Employment Regional
Office No. XII (DOLE) of the temporary suspension of its operations for six months and the temporary lay-off of
two-thirds of its employees.5 After the lapse of said period, petitioner notified the DOLE on 11 December 2001
that it was extending the temporary shutdown of its operations for another six months. Adversely affected by
petitioner’s continued failure to resume its operations, respondents filed the complaint for constructive
dismissal and monetary claims.

The LA ruled in favor of the respondent. Aggrieved, petitioner filed its memorandum of appeal before the
NLRC and moved for the reduction of the appeal bond to P100,000.00, on the ground that its financial losses in
the preceding years had rendered it unable to put up one in cash and/or surety equivalent to the monetary
award.

Respondents, on the other hand, moved for the dismissal of the appeal in view of the fact that, despite receipt
of the appealed decision on 24 November 2004, petitioner mailed their copy of the memorandum of appeal
only on 7 February 2005. Respondents also argued that the appeal bond tendered by petitioner was so grossly
disproportionate to monetary award for the same to be considered substantial compliance with the
requirements for the perfection of an appeal from a Labor Arbiter’s decision. Further, respondent claimed that
petitioner’s memorandum of appeal was filed 65 days after the lapse of reglementary period for appeal.
However, the NLRC ruled in favor of petitioner.

On appeal, the CA ruled that petitioner failed to perfect its appeal therefrom considering that the copy of its 3
December 2004 Memorandum of Appeal intended for respondents was served the latter by registered mail
only on 7 February 2005. Aside from posting an unusually smaller sum as appeal bond, petitioner was likewise
faulted for replenishing the check it issued only on 1 April 2005 or 24 days before the rendition of the assailed
NLRC Decision. Applying the principle that the right to appeal is merely a statutory remedy and that the party
who seeks to avail of the same must strictly follow the requirements therefor, the CA decreed that the Labor

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Arbiter’s Decision had already attained finality and, for said reason, had been placed beyond the NLRC’s power
of review.

Issue: Whether petitioner’s appeal filed with the NLRC was fatally defective

Ruling: Time and again, it has been held that the right to appeal is not a natural right or a part of due process;
it is merely a statutory privilege, and may be exercised only in the manner and in accordance with the
provisions of law.23 A party who seeks to avail of the right must, therefore, comply with the requirements of
the rules, failing which the right to appeal is invariably lost.24 Insofar as appeals from decisions of the Labor
Arbiter are concerned, Article 223 of the Labor Code of the Philippines25 provides that, "(d)ecisions, awards, or
orders of the Labor Arbiter are final and executory unless appealed to the [NLRC] by any or both parties within
ten (10) calendar days from the receipt of such decisions, awards or orders." In case of a judgment involving a
monetary award, the same provision mandates that, "an appeal by the employer may be perfected only upon
the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the [NLRC] in
the amount equivalent to the monetary award in the judgment appealed from." Alongside the requirement
that "the appellant shall furnish a copy of the memorandum of appeal to the other party," the foregoing
requisites for the perfection of an appeal are reiterated under Sections 1, 4 and 6, Rule VI of the NLRC Rules of
Procedure in force at the time petitioner appealed the Labor Arbiter’s 25 October 2004 Decision

Having received the Labor Arbiter’s Decision on 24 November 2004, petitioner had ten (10) calendar days or
until 4 December 2004 within which to perfect an appeal. Considering that the latter date fell on a Saturday,
petitioner had until the next working day, 6 December 2004, within which to comply with the requirements for
the perfection of its appeal. Our perusal of the record shows that, despite bearing the date 3 December 2004,
petitioner’s memorandum of appeal was subscribed before Notary Public Ronald Rex Recidoro only on 6
December 2004.

In this case, we see that with no proof to substantiate its claim, petitioner moved for a reduction of the appeal
bond on the proferred basis of serious losses and reverses it supposedly sustained in the years prior to the
rendition of the Labor Arbiter's decision.

The first condition may be left for the nonce. As to the second condition, we may consider that the amount of
₱100,000.00 supposedly posted was provisional bond sufficient to suspend the running of the 10-day
reglementary period to perfect an appeal from the Labor Arbiter's decision. That would however not improve
petitioner's position one bit.

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Respondent correctly called attention to the fact that the check submitted by petitioner was dishonored upon
presentment for payment, thereby rendering the tender thereof ineffectual.

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Banahaw Broadcasting v. Pacana, May 30, 2011

Doctrine:
As a general rule, the government and all the attached agencies with no legal personality distinct from the
former are exempt from posting appeal bonds, whereas government-owned and controlled corporations
(GOCCs) are not similarly exempted.
Facts: Respondents DXWG personnel are supervisory and rank and file employees of the DXWG-Iligan City
radio station which is owned by petitioner Banahaw Broadcasting Corporation (BBC), a corporation managed
by Intercontinental Broadcasting Corporation (IBC).

On August 29, 1995, the DXWG personnel filed with the Sub-regional Arbitration Branch No. XI, Iligan City a
complaint for illegal dismissal, unfair labor practice, reimbursement of unpaid Collective Bargaining Agreement
(CBA) benefits, and attorney’s fees against IBC and BBC.

On June 21, 1996, LA rendered his Decision awarding the DXWG personnel a total of ₱12,002,157.28 as unpaid
CBA benefits consisting of unpaid wages and increases, 13th month pay, longevity pay, sick leave cash
conversion, rice and sugar subsidy, retirement pay, loyalty reward and separation pay. The LA denied the other
claims of the DXWG personnel for Christmas bonus, educational assistance, medical check-up and optical
expenses. Both sets of parties appealed to the NLRC.

On May 15, 1997, a Motion to Dismiss, Release, Waiver and Quitclaim, was jointly filed by IBC and the DXWG
personnel based on the latter’s admission that IBC is not their employer as it does not own DXWG-Iligan City.
On April 21, 1997, the NLRC granted the Motion and dismissed the case with respect to IBC.

BBC filed a Motion for Reconsideration alleging that (1) neither BBC nor its duly authorized representatives or
officers were served with summons and/or a copy of the complaint when the case was pending before the
Labor Arbiter or a copy of the Decision therein; (2) since the liability of IBC and BBC is solidary, the release and
quitclaim issued by the DXWG personnel in favor of IBC totally extinguished BBC’s liability; (3) it was IBC that
effected the termination of the DXWG personnel’s employment; (4) the DXWG personnel are members of the
IBC union and are not employees of BBC; and (5) the sequestered properties of BBC cannot be levied upon.

On December 12, 1997, the NLRC issued a Resolution vacating the Decision of LA and remanding the case to
the arbitration branch of origin on the ground that while the complaint was filed against both IBC and BBC,
only IBC was served with summons, ordered to submit a position paper, and furnished a copy of the assailed
decision.

LA: LA Palangan rendered a Decision adjudging BBC to be liable for the same amount (P12,002,157.28)
discussed in the vacated Decision of LA. Both BBC and respondents appealed to the NLRC anew. In their
appeal, the DXWG personnel reasserted their claim for the remaining CBA benefits not awarded to them, and
alleged error in the reckoning date of the computation of the monetary award. BBC, in its own Memorandum
of Appeal, challenged the monetary award itself, claiming that such benefits were only due to IBC, not BBC,

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employees. In the same Memorandum of Appeal, BBC incorporated a Motion for the Recomputation of the
Monetary Award in order that the appeal bond may be reduced.

NLRC: The NLRC issued an Order denying the Motion for the Recomputation of the Monetary Award.
According to the NLRC, such recomputation would result in the premature resolution of the issue raised on
appeal. The NLRC ordered BBC to post the required bond within 10 days from receipt of said Order, with a
warning that noncompliance will cause the dismissal of the appeal for non-perfection. Instead of complying
with the Order to post the required bond, BBC filed a Motion for Reconsideration, alleging this time that since
it is wholly owned by the Republic of the Philippines, it need not post an appeal bond. NLRC denied the
Motion for Reconsideration of BBC on its September 16, 1999 Order and accordingly dismissed the appeal of
BBC for non-perfection. The NLRC likewise dismissed the appeal of the DXWG personnel for lack of merit in the
same Decision.

BBC filed with the Court of Appeals a Petition for Certiorari under Rule 65 of the Rules of Court.

CA: The CA denied BBC’s Petition for Certiorari. It held that BBC, though owned by the government, is a
corporation with a personality distinct from the Republic or any of its agencies or instrumentalities, and
therefore do not partake in the latter’s exemption from the posting of appeal bonds.
Issue: Whether or not BBC is exempt from posting an appeal bond.
Ruling: NO. On November 3, 1990, Benedicto and the Republic executed a Compromise Agreement whereby Benedicto,
in exchange for immunity from civil and criminal actions, "ceded to the government certain pieces of property listed in
Annex A of the agreement and assigned or transferred whatever rights he may have, if any, to the government over all
corporate assets listed in Annex B of the agreement.” BBC is one of the properties listed in Annex B.

The Sandiganbayan subsequently approved the Compromise Agreement on October 31, 1992, and the
approval was affirmed by the SC on September 10, 1993 in Republic v. Sandiganbayan. Thus, both BBC and IBC
were government-owned and controlled during the time the DXWG personnel filed their original complaint on
August 29, 1995.
Thus, as a general rule, the government and all the attached agencies with no legal personality distinct from
the former are exempt from posting appeal bonds, whereas government-owned and controlled corporations
(GOCCs) are not similarly exempted. This distinction is brought about by the very reason of the appeal bond
itself: to protect the presumptive judgment creditor against the insolvency of the presumptive judgment
debtor. When the State litigates, it is not required to put up an appeal bond because it is presumed to be
always solvent. This exemption, however, does not, as a general rule, apply to GOCCs for the reason that the
latter has a personality distinct from its shareholders. While a GOCC’s majority stockholder, the State, will
always be presumed solvent, the presumption does not necessarily extend to the GOCC itself. However, when
a GOCC becomes a "government machinery to carry out a declared government policy," it becomes similarly
situated as its majority stockholder as there is the assurance that the government will necessarily fund its
primary functions. Thus, a GOCC that is sued in relation to its governmental functions may be, under
appropriate circumstances, exempted from the payment of appeal fees.
In the case at bar, BBC was organized as a private corporation, sequestered in the 1980’s and the ownership of
which was subsequently transferred to the government in a compromise agreement. Further, it is stated in its
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Amended Articles of Incorporation that BBC has the following primary function: To engage in commercial radio
and television broadcasting, and for this purpose, to establish, operate and maintain such stations, both
terrestrial and satellite or interplanetary, as may be necessary for broadcasting on a network wide or
international basis.

It is therefore crystal clear that BBC’s function is purely commercial or proprietary and not governmental. As
such, BBC cannot be deemed entitled to an exemption from the posting of an appeal bond.

Consequently, the NLRC did not commit an error, and much less grave abuse of discretion, in dismissing the
appeal of BBC on account of non-perfection of the same. In doing so, the NLRC was merely applying Article 223
of the Labor Code.

The posting of the appeal bond within the period provided by law is not merely mandatory but jurisdictional.
The failure on the part of BBC to perfect the appeal thus had the effect of rendering the judgment final and
executory. Neither was there an interruption of the period to perfect the appeal when BBC filed (1) its Motion
for the Recomputation of the Monetary Award in order to reduce the appeal bond, and (2) its Motion for
Reconsideration of the denial of the same.

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Mc Burnie v. Ganzon, October 17, 2013
Doctrine: The posting of a bond is indispensable to the perfection of an appeal in cases involving monetary
awards from the decision of the Labor Arbiter. The lawmakers clearly intended to make the bond a mandatory
requisite for the perfection of an appeal by the employer as inferred from the provision that an appeal by the
employer may be perfected "only upon the posting of a cash or surety bond." The word "only" makes it clear
that the posting of a cash or surety bond by the employer is the essential and exclusive means by which an
employer’s appeal may be perfected.
Facts: On October 4, 2002, McBurnie, an Australian national, instituted a complaint for illegal dismissal and
other monetary claims against the respondents. McBurnie claimed that on May 11, 1999, he signed a five-year
employment agreement with the company EGI as an Executive Vice-President who shall oversee the
management of the company’s hotels and resorts within the Philippines. He performed work for the company
until sometime in November 1999, when he figured in an accident that compelled him to go back to Australia
while recuperating from his injuries. While in Australia, he was informed by respondent Ganzon that his
services were no longer needed because their intended project would no longer push through.

Ruling of the LA:

the LA declared McBurnie as having been illegally dismissed from employment, and thus entitled to receive
from the respondents the following amounts: (a) US$985,162.00 as salary and benefits for the unexpired
term of their employment contract, (b) ₱2,000,000.00 as moral and exemplary damages, and (c) attorney’s
fees equivalent to 10% of the total monetary award.

Ruling of the NLRC:

The NLRC denied the motion to reduce bond, explaining that "in cases involving monetary award, an
employer seeking to appeal the [LA’s] decision to the Commission is unconditionally required by Art. 223,
Labor Code to post bond in the amount equivalent to the monetary award x x x." Thus, the NLRC required
from the respondents the posting of an additional bond in the amount of ₱54,083,910.00.

Ruling of the CA:

The CA issued a Resolution granting the respondents’ application for a writ of preliminary injunction. It
directed the NLRC, McBurnie, and all persons acting for and under their authority to refrain from causing the
execution and enforcement of the LA’s decision in favor of McBurnie, conditioned upon the respondents’
posting of a bond in the amount of ₱10,000,000.00. McBurnie sought reconsideration of the issuance of the
writ of preliminary injunction, but this was denied by the CA in its Resolution dated May 29, 2007.
In the meantime, the CA ruled on the merits of CA-G.R. SP No. 90845 and CA-G.R. SP No. 95916 and rendered
its Decision26 dated October 27, 2008, allowing the respondents’ motion to reduce appeal bond and directing
the NLRC to give due course to their appeal. The dispositive portion of the CA Decision reads:
WHEREFORE, in view of the foregoing, the petition for certiorari and prohibition docketed as CA GR SP No.
90845 and the petition for certiorari docketed as CA GR SP No. 95916 are GRANTED. Petitioners’ Motion to
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Reduce Appeal Bond is GRANTED. Petitioners are hereby DIRECTED to post appeal bond in the amount of
₱10,000,000.00. The NLRC is hereby DIRECTED to give due course to petitioners’ appeal in CA GR SP No. 95916
which is ordered remanded to the NLRC for further proceedings.

The Court explained that the respondents’ failure to post a bond equivalent in amount to the LA’s monetary
award was fatal to the appeal. Although an appeal bond may be reduced upon motion by an employer, the
following conditions must first be satisfied: (1) the motion to reduce bond shall be based on meritorious
grounds; and (2) a reasonable amount in relation to the monetary award is posted by the appellant.

Unless the NLRC grants the motion to reduce the cash bond within the 10-day reglementary period to perfect
an appeal from a judgment of the LA, the employer is mandated to post the cash or surety bond securing the
full amount within the said 10-day period. The respondents’ initial appeal bond of ₱100,000.00 was grossly
inadequate compared to the LA’s monetary award.

Issue: Whether or not the provision of Article 223 (Appeal) is properly implemented in the case at bar.

Held: The crucial issue in this case concerns the sufficiency of the appeal bond that was posted by the
respondents. The present rule on the matter is Section 6, Rule VI of the 2011 NLRC Rules of Procedure, which
was substantially the same provision in effect at the time of the respondents appeal to the NLRC, and which
reads: No motion to reduce bond shall be entertained except on meritorious grounds and upon the posting of
a bond in a reasonable amount in relation to the monetary award. The filing of the motion to reduce bond
without compliance with the requisites in the preceding paragraph shall not stop the running of the period to
perfect an appeal.
While the CA, in this case, allowed an appeal bond in the reduced amount of P10,000,000.00 and then ordered
the case remand to the NLRC, this Court Decision dated September 18, 2009 provides otherwise, as it reads in
part:

While the bond may be reduced upon motion by the employer, this is subject to the conditions that (1) the
motion to reduce the bond shall be based on meritorious grounds; and (2) a reasonable amount in relation to
the monetary award is posted by the appellant, otherwise the filing of the motion to reduce bond shall not stop
the running of the period to perfect an appeal.The qualification effectively requires that unless the NLRC grants
the reduction of the cash bond within the 10-day reglementary period, the employer is still expected to post
the cash or surety bond securing the full amount within the said 10-day period.If the NLRC does eventually
grant the motion for reduction after the reglementary period has elapsed, the correct relief would be to
reduce the cash or surety bond already posted by the employer within the 10-day period.
Time and again, the Court has cautioned the NLRC to give Article 223 of the Labor Code, particularly the
provisions requiring bonds in appeals involving monetary awards, a liberal interpretation in line with the
desired objective of resolving controversies on the merits.

Although the general rule provides that an appeal in labor cases from a decision involving a monetary award
may be perfected only upon the posting of a cash or surety bond, the Court has relaxed this requirement
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under certain exceptional circumstances in order to resolve controversies on their merits.These circumstances
include: (1) the fundamental consideration of substantial justice; (2) the prevention of miscarriage of justice or
of unjust enrichment; and (3) special circumstances of the case combined with its legal merits, and the amount
and the issue involved. Guidelines that are applicable in the reduction of appeal bonds were also explained in
Nicol v. Footjoy Industrial Corporation. The bond requirement in appeals involving monetary awards has been
and may be relaxed in meritorious cases, including instances in which (1) there was substantial compliance
with the Rules, (2) surrounding facts and circumstances constitute meritorious grounds to reduce the bond, (3)
a liberal interpretation of the requirement of an appeal bond would serve the desired objective of resolving
controversies on the merits, or (4) the appellants, at the very least, exhibited their willingness and/or good
faith by posting a partial bond during the reglementary period.

It is in this light that the Court finds it necessary to set a parameter for the litigantsand the NLRC guidance on
the amount of bond that shall hereafter be filed with a motion for a bond reduction.To ensure that the
provisions of Section 6, Rule VI of the NLRC Rules of Procedure that give parties the chance to seek a reduction
of the appeal bond are effectively carried out, without however defeating the benefits of the bond
requirement in favor of a winning litigant, all motions to reduce bond that are to be filed with the NLRC shall
be accompanied by the posting of a cash or surety bond equivalent to 10% of the monetary award that is
subject of the appeal, which shall provisionally be deemed the reasonable amount of the bond in the
meantime that an appellant motion is pending resolution by the Commission.In conformity with the NLRC
Rules, the monetary award, for the purpose of computing the necessary appeal bond, shall exclude damages
and attorney fees. Only after the posting of a bond in the required percentage shall an appellant period to
perfect an appeal under the NLRC Rules be deemed suspended.

The foregoing shall not be misconstrued to unduly hinder the NLRC exercise of its discretion, given that the
percentage of bond that is set by this guideline shall be merely provisional. The NLRC retains its authority and
duty to resolve the motion and determine the final amount of bond that shall be posted by the appellant, still
in accordance with the standards of meritorious grounds and reasonable amount Should the NLRC, after
considering the motion merit, determine that a greater amount or the full amount of the bond needs to be
posted by the appellant, then the party shall comply accordingly.The appellant shall be given a period of 10
days from notice of the NLRC order within which to perfect the appeal by posting the required appeal bond.

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Sara Lee Phils. V. Macatlang, January 14, 2015
Doctrine: In case of a judgment involving a monetary award, an appeal by the employer may be perfected only
upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the
Commission in the amount equivalent to the monetary award in the judgment appealed from.
Facts: Aris permanently ceased its operations on Oct. 9, 1995 and thereafter undertook to pay its employees
the benefits which accrued by virtue of the company’s closure and an additional Benevolent Fund to the
Union. When FAPI was incorporated on Oct. 26, 1995, former Aris employees filed 63 separate complaints for
illegal dismissal, alleging that FAPI was organized by the management of Aris to continue the same business of
Aris, thereby intending to defeat their right to security of tenure. Sarah Lee Corporation (SLC), Sarah Lee
Philippines (SLP) and Cesar Cruz were impleaded as defendants being major stockholders of FAPI and officers
of Aris, respectively, and Emilinda D. Macatlang, et al. is captioned as the complainant.
The LA rendered judgment finding the dismissal of 5,984 complainants as illegal and awarding them separation
pay and other monetary benefits amounting to ₱3,453,664,710.86. The Corporations filed their Notice of
Appeal with Motion to Reduce Appeal Bond and To Admit Reduced Amount with the NLRC, seeking to reduce
the appeal bond to ₱1 Million each on the grounds that it is impossible for any insurance company to cover
such huge amount and that, in requiring them to post in full the appeal bond would be tantamount to denying
them their right to appeal. Emilinda D. Macatlang, et al., opposed the motion by asserting that failure to
comply with the bond requirement is a jurisdictional defect since an appeal may only be perfected upon
posting of a cash bond equivalent to the monetary award provided by Article 223 of the Labor Code.
The NLRC granted the reduction of the appeal bond and issued an Order directing the Corporations to post an
additional ₱4.5 Million bond, bringing the total posted bond to ₱9 Million. Emilinda D. Macatlang, et al., filed a
petition for review before the CA insisting that the appeal was not perfected due to failure of the Corporations
to post the correct amount of the bond which is equivalent to the judgment award. While the case was
pending before the appellate court, the NLRC prematurely issued an order setting aside the decision of the
Labor Arbiter for being procedurally infirmed. The CA reversed and set aside the decision of the NLRC and
deemed it reasonable under the circumstances of the case to order the posting of an additional appeal bond of
₱1 Billion.
Issue: W/N the appeal bond of ₱4.5M is enough to perfect an appeal
Ruling: NO. Well-settled is the doctrine that appeal is not a constitutional right, but a mere statutory privilege.
Hence, parties who seek to avail themselves of it must comply with the statutes or rules allowing it. The
primary rule governing appeal from the ruling of the labor arbiter is Article 223 of the Labor Code which
provides:
Art. 223. Appeal. — Decisions, awards, or orders of the Labor Arbiter are final and executory unless appealed
to the Commission by any or both parties within 10 calendar days from receipt of such decisions, awards, or
orders. Such appeal may be entertained only on any of the following grounds:
a. If there is prima facie evidence of abuse of discretion on the part of the Labor Arbiter;
b. If the decision, order or award was secured through fraud or coercion, including graft and corruption;
c. If made purely on questions of law; and d. If serious errors in the findings of facts are raised which
would cause grave or irreparable damage or injury to the appellant.

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In case of a judgment involving a monetary award, an appeal by the employer may be perfected only upon the
posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Commission in
the amount equivalent to the monetary award in the judgment appealed from.
Article 223, under Presidential Decree No. 442, was amended by Republic Act No. 6715 to include the
provision on the posting of a cash or surety bond as a precondition to the perfection of appeal.
The requisites for perfection of appeal as embodied in Article 223, as amended, are: 1) payment of appeal
fees; 2) filing of the memorandum of appeal; and 3) payment of the required cash or surety bond. These
requisites must be satisfied within 10 days from receipt of the decision or order appealed from.

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AFP General Insurance v. Molina, June 30, 2008
Doctrine: In labor cases where the judgment appealed from involves a monetary award, the appeal may be
perfected only upon the posting of a cash or surety bond issued by a reputable bonding company accredited
by the NLRC. The surety bond shall remain valid and in force until finality and execution of judgment, with the
resultant discharge of the surety company only thereafter.
Facts: Respondents filed a complaint for illegal dismissal against Radon Security & Allied Services Agency
and/or Raquel Aquias and Ever Emporium, Inc. The Labor Arbiter ruled in their favor and ordered Radon
Security to pay them separation pay, backwages, and other monetary claims. Radon Security appealed the
Labor Arbiter's decision to public respondent NLRC and posted a supersedeas bond, issued by petitioner
AFPGIC as surety.

The NLRC affirmed the decision. The NLRC Research and Information Unit submitted a Computation of the
Monetary Awards in accordance with the NLRC decision. Radon Security opposed said computation.

Labor Arbiter issued a Writ of Execution incorporating the computation of the NLRC Research and Information
Unit and dismissed the Motion for Recomputation filed by Radon Security. The NLRC Sheriff issued a Notice of
Garnishment against the supersedeas bond.

Ever Emporium, Inc. and Radon Security moved to quash the writ of execution but was denied. Radon Security
appealed to the NLRC.

AFPGIC filed an Omnibus Motion to Quash Notice/Writ of Garnishment and to Discharge AFPGIC's Appeal
Bond before the LA on the ground that said bond has been cancelled and thus non-existent in view of the
failure of Radon Security to pay the yearly premiums.

LA: The LA denied pointing out that the question of non-payment of premiums is a dispute between the party
who posted the bond and the insurer; to allow the bond to be cancelled because of the non-payment of
premiums would result in a factual and legal absurdity wherein a surety will be rendered nugatory by the
simple expedient of non-payment of premiums.

NLRC: Dismissed AFPGIC’s appeal. FPGIC's theory that the bond cannot anymore be proceeded against for
failure of Radon Security to pay the premium is untenable, considering that the bond is effective until the
finality of the decision. A contrary ruling would allow respondents to simply stop paying the premium to
frustrate satisfaction of the money judgment

AFPGIC’s motion for reconsideration was also denied.

CA: Denied the special civil action for certiorari and the motion for reconsideration.

Issue: WON AFPGIC can cancel the surety bond on the ground that Radon Security failed to pay premiums

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Ruling: NO.

The Labor Code states that the cash or surety bond posted in appeals involving monetary awards in labor
disputes "shall be in effect until final disposition of the case." This could only be construed to mean that the
surety bond shall remain valid and in force until finality and execution of judgment, with the resultant
discharge of the surety company only thereafter, if we are to give teeth to the labor protection clause of the
Constitution. To construe the provision any other way would open the floodgates to unscrupulous and
heartless employers who would simply forego paying premiums on their surety bond in order to evade
payment of the monetary judgment.

AFPGIC contends that under Section 64 of the Insurance Code an insurer may cancel a policy upon
non-payment of the premium. Said cancellation is binding upon the beneficiary as the right of a beneficiary is
subordinate to that of the insured. Further, in South Sea Surety & Insurance Co., Inc. v. CA, the SC held that
payment of premium is a condition precedent to and essential for the efficaciousness of a contract of
insurance.

Respondents, on the other hand, adopted that ruling of the CA that as a supersedeas bond was posted for the
benefit of a third person to guarantee that the money judgment will be satisfied in case it is affirmed on
appeal, the third person who stands to benefit from said bond is entitled to notice of its cancellation for any
reason. The NLRC should have been notified to enable it to take the proper action under the circumstances.
Respondents argue that from its very nature, a supersedeas bond remains effective and the surety liable
thereon until formally discharged from said liability. To hold otherwise would enable a losing party to frustrate
a money judgment by the simple expedient of ceasing to pay premiums.

The Supreme Court agrees. Moreover, the Insurance Code supports the respondents' arguments. AFGIC's
reliance on Sections 64 and 77 of the Insurance Code is misplaced as said provisions refer to insurance
contracts in general. The instant case pertains to a surety bond thus the applicable provision is Section 177
which specifically governs suretyship.

In the present case, when AFPGIC cancelled the surety bond because Radon Security failed to pay the
premiums, it gave due notice to the latter but not to the NLRC. By its failure to give notice to the NLRC, AFPGIC
failed to acknowledge that the NLRC had jurisdiction not only over the appealed case, but also over the appeal
bond. This oversight amounts to disrespect and contempt for a quasi-judicial agency tasked by law with
resolving labor disputes. Until the surety is formally discharged, it remains subject to the jurisdiction of the
NLRC.

When the LA directed the NLRC Sheriff to garnish the surety bond issued by AFPGIC, the latter, as surety, is
mandated to comply with the writ of garnishment, for the bond remains enforceable and under the
jurisdiction of the NLRC until it is discharged. In turn, AFPGIC may proceed to collect the amount it paid on the
bond, plus the premiums due and demandable, plus any interest owing from Radon Security. This is pursuant
to the principle of subrogation enunciated in Article 2067 of the Civil Code which we apply to the suretyship
agreement between AFPGIC and Radon Security, in accordance with Section 178 of the Insurance Code.

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Islriz Trading v. Capade et. al. January 31, 2011 (payment of accrued
salaries pending appeal before the NLRC)
Doctrine: The two-fold test, which asks whether there was delay or non-observance of a writ of execution
ordering reinstatement pending appeal, and whether such delay or non-observance was justifiable, is
necessary in order to determine whether an employee is entitled to backwages despite an order for
reinstatement.

Facts: Respondents Capada et al were drivers and helpers of Islriz Trading, which was a gravel and sand
business owned by Petitioner Victor Hugo Lu. Respondents filed a case for illegal dismissal and non-payment of
overtime pay, holiday pay, rest day pay, allowances, and separation pay. Petitioner responded by stating that
resopndents abandoned there work.

Labor Arbiter ruled against petitioner and ordered their reinstatement. NLRC affirmed but modified it to
remove backwages as the failure to continue work was not due to termination nor abandonment of work.

Petitioners however refused to reinstate the respondents, so respondents prayed for the computation of the
backwages and that an alias writ of execution be issued, which resulted in the personal properties to be levied.

CA affirmed.

Issue: Whether respondents may collect their wages during the period between the Labor Arbiter's order of
reinstatement pending appeal and the NLRC Resolution overturning that of the Labor Arbiter. YES

Ruling: The SC stated that the two-fold test was to be applied, citing Garcia v. PAL, as to resolve the issue
would require a determination of 1) the actual delay or the non-observance of reinstatement pending appeal,
and 2) whether such delay, if it existed, was justified.

The Court noted the fact that the petitioners did not in fact reinstate the respondents, so it then discussed
whether such delay was justified. The Court found that Islriz Trading did not undergo a similar situation of
rehabilitation or an analogous situation that would have been like the cited Garcia case. The petitioner stated
that the reason for the delay was that they wanted to refer the matter to their counsel first, which the SC
stated was not a justifiable reason to not observe the writ of execution ordering reinstatement pending the
appeal. As such, the respondents have a right to collect backwages.

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FSFI v. NLRC, December 11, 2003

DOCTRINE: The Labor Code provides a ten (10)-day period from receipt of the decision of the Arbiter for the
filing of an appeal together with an appeal bond if the decision involves a monetary award in favor of the
employees.
FACTS: A complaint for illegal dismissal and monetary claims was filed by respondents against petitioners
before the National Labor Relations Commission. While the Respondents filed their position papers, the
Petitioners did not, thus, the Labor Arbiter construed this as waiver of their right to present evidence. The
Labor Arbiter sustained the claims of the respondents and the petitioners were ordered to reinstate
respondents. Petitioners appealed to the National Labor Relations Commission. For the first time, they
submitted evidence that respondents were project employees. Respondents, however, assailed the jurisdiction
of the NLRC over the appeal for failure of the petitioners to file the appeal bond within the ten (10)-day
reglementary period. They further contended that it was too late for petitioners to present evidence in the
NLRC. The NLRC nevertheless assumed jurisdiction over the appeal. Due to the evidence presented by
petitioners on the issue of illegal dismissal, the NLRC remanded the case to the Labor Arbiter for further
proceedings. In a petition for certiorari filed by respondents before the Court of Appeals, the latter reinstated
the decision of the Labor Arbiter, ruling that the NLRC did not have jurisdiction over the appeal since the
appeal bond of the petitioners was filed out of time. Petitioners' motion for reconsideration was denied.
Hence, this petition revolving around the issue on the timeliness of the filing of the appeal bond of the
petitioners.
ISSUE: WoN the NLRC acquires jurisdiction despite the filing of the bond beyond the 10 day reglementary
period.- None.
RULING: The appeal was dismissed. The Labor Code provides a ten (10)-day period from receipt of the decision
of the Arbiter for the filing of an appeal together with an appeal bond if the decision involves a monetary
award in favor of the employees. The NLRC Rules of Procedure likewise require the appeal and the appeal
bond to be filed within the ten (10)-day reglementary period. Payment of the appeal bond is a jurisdictional
requisite for the perfection of an appeal to the NLRC. It is only in rare instances that the court relaxes the rule
upon a showing of substantial compliance with it and to prevent patent injustice.

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Buenaobra v. Lim King Guan, January 20, 2004
Doctrine: The provision of Art. 223 (now 229) requiring the posting of bond on appeals involving monetary
awards must be given liberal interpretation in line with the desired objective of resolving controversies on the
merits. If only to achieve substantial justice, strict observance of the reglementary periods may be relaxed if
warranted.
Facts: Petitioners (Buenaobra, et. Al.) were employees of private respondent Unix International Export
Corporation (UNIX).
Sometime in 1991 and 1992, petitioners filed several cases against UNIX and its incorporators and officers for
unfair labor practice, illegal lockout/dismissal, underpayment of wages, holiday pay, proportionate 13thmonth
pay, unpaid wages, interest, and damages. Labor Arbiter de Vera ordered UNIX to pay complainants their
backwages, separation pay, wage differentials, regular holiday pay differentials, and proportionate 13thmonth
pay for 1990.
There being no appeal by respondents or petitioners, the decision of labor arbiter eventually became final and
executory. However, petitioners complained that the decision could not be executed because UNIX allegedly
diverted, invested and transferred all its money, assets and properties to respondent Fuji Zipper Manufacturing
Corporation (FUJI) whose stockholders and officers were also those of UNIX.
Petitioners filed another complaint against respondents UNIX, its corporate officers and stockholders of record,
and FUJI. Petitioners mainly prayed that respondents UNIX and FUJI be held jointly and severally held liable for
the payment of the monetary awards ordered by labor arbiter de vera.
LA Ruling: Ordered a judgment of piercing the veil of corporate fiction of the two respondent sister
corporations by virtue of this Decision are now considered as mere associations of persons jointly and severally
pay petitioners.
Respondents Argument: Private respondents FUJI filed a memorandum on appeal and a motion to dispense
with the posting of a cash or surety appeal bond on the ground that they were not the employers of
petitioners. They alleged that they could not be held responsible for petitioners claims and to require them to
post the bond would be unjust and unfair, and not sanctioned by law.
NLRC Ruling: denied respondents motion to be exempted from posting appeal bond.
Petitioners filed a petition in the CA imputing grave abuse of discretion to the NLRC, Third Division when it
allowed private respondents to post the mandated cash or surety bond beyond 4 months after their filing of
memorandum on appeal.
CA Ruling: dismissed the petition for lack of merit

Issue: Whether posting of the bond beyond the reglementary period to perfect appeal may be allowed?
Ruling: YES, the provision of Art. 223 (now 229) requiring the posting of bond on appeals involving monetary
awards must be given liberal interpretation in line with the desired objective of resolving controversies on the
merits. If only to achieve substantial justice, strict observance of the reglementary periods may be relaxed if

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warranted. The NLRC, Third Division could not be said to have abused its discretion in requiring the posting of
bond after it denied private respondents’ motion to be exempted therefrom.

It is true that the perfection of an appeal in the manner and within the period prescribed by law is not only
mandatory but jurisdictional, and failure to perfect an appeal has the effect of making the judgment final and
executory. However, technicality should not be allowed to stand in the way of equitably and completely
resolving the rights and obligations of the parties. We have allowed appeals from the decisions of the labor
arbiter to the NLRC, even if filed beyond the reglementary period, in the interest of justice. The facts and
circumstances of the instant case warrant liberality considering the amount involved and the fact that
petitioners already obtained a favorable judgment on February 23, 1993 against their employer UNIX.

It is only fair and just that respondent FUJI be afforded the opportunity to be heard on appeal before the NLRC,
specially in the light of labor arbiter Pati’s later decision holding FUJI jointly and severally liable with UNIX in
the payment of the monetary awards adjudged by labor arbiter de Vera against UNIX.

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Bergonio v. SEAIR, April 21, 2014 (accrued wages).
Doctrine: Decisions of the Labor Arbiter reinstating a dismissed or separated employee, insofar as the
reinstatement aspect is concerned, shall immediately be executory, pending appeal. The employee shall either
be admitted back to work under the same terms and conditions prevailing prior to his dismissal or separation
or, at the option of the employer, merely reinstated in the payroll. The posting of a bond by the employer shall
not stay the execution for reinstatement provided herein.

Facts: Petitioners filed before the LA a complaint for illegal dismissal and illegal suspension with prayer for
reinstatement against respondents to which the LA ruled in favor of the former. During the pre-execution
conference, the respondents manifested their option to reinstate the petitioners in the payroll. The payroll
reinstatement, however, did not materialize. Thus, the petitioners filed before the LA a manifestation for their
immediate reinstatement. The respondents filed an opposition to the petitioners' motion for execution
claimed that the relationship between them and the petitioners had already been strained because of the
petitioners' threatening text messages, thus precluding the latter's reinstatement. The LA granted the motion
for execution and issued the writ for the same. Respondents moved to quash the writ of execution while
simultaneously filing an appeal assailing the decision of the LA with the NLRC. The appeal was dismissed as
well as the subsequent MR, prompting the respondents to file a petition for certiorari with the CA.

With the writ of execution ordering the reinstatement of the petitioners unsatisfied, petitioners filed a motion
for re-computation of accrued wages and a motion for execution of the re-computed amount. The LA granted
the same with a notice of garnishment subsequently issued to the respondent’s depositary bank. Upon appeal,
The CA then partially granted the respondent’s petition, declaring the dismissal of the petitioners as valid. The
SC denied the appeal filed by the petitioners as well as the subsequent MR. The judgement soon after became
final and executory.

The petitioners then filed with the LA an urgent motion for the release of the garnished amount. The LA
granted the motion with the NLRC affirming in toto the same and denying the MR filed by the respondents.
The respondents assail the NLRC decision via a petition for certiorari with the CA.

The CA granted the respondent’s petition, reversing the NLRC resolution and remanded the case for
recomputation of accrued wages. the CA declared that, given this peculiar circumstance (of the petitioners'
failure to report for work), the petitioners' accrued wages should only be computed until February 24, 2006
when they were supposed to report for work per the return-to-work Memorandum. Accordingly, the CA
reversed the NLRC decision that affirmed the LA's order to release the garnished amount.

The petitioners argue that the CA gravely erred when it ruled, contrary to Article 223, paragraph 3 of the Labor
Code, that the computation of their accrued wages stopped when they failed to report for work. They maintain
that the report-to-work order was merely an afterthought on the respondents' part to make it appear that
they complied with the writ of execution issued by the LA. They argue that this directive violates Article 223,
paragraph 3 of the Labor Code that requires the employee's reinstatement to be under the same terms and
conditions prevailing prior to the dismissal. Thus, the petitioners claim that the delay in their reinstatement
was in fact due to the respondents' unjustified acts and that the respondents never really complied with the

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LA's reinstatement order. Respondents argue that the petitioners were validly dismissed and that they
complied with the LA's reinstatement order when it directed the petitioners to report back to work, which
directive the petitioners did not heed.

Issue: Whether or not the CA erred in reversing the NLRC decision which affirmed the LA order for the release
of the garnished amount to satisfy the petitioner’s accrued wages.

Ruling: Yes. The Supreme Court ruled that the CA committed an error when it reversed the subject NLRC
decision.

Under Article 223, paragraph 3 of the Labor Code, the employer is mandated to immediately reinstate the
dismissed employee, either by actually reinstating him/her under the conditions prevailing prior to the
dismissal or, at the option of the employer, in the payroll. In the present case, the respondent’s failure to
exercise either option rendered them liable for the petitioners' accrued salary until the LA decision was
reversed by the CA on December 17, 2008. The SC likewise found that the NLRC was correct in affirming the
release of the garnished amount as it merely implemented the mandate of Article 223 as being immediate and
self-executory.

The SC made mention that a dismissed employee whose case was favorably decided by the LA is entitled to
receive wages pending appeal upon reinstatement, which reinstatement is immediately executory.
Furthermore, the employer is duty-bound to reinstate the employee, failing which, the employer is liable
instead to pay the dismissed employee's salary. Moreover, is that an order of reinstatement issued by the LA is
self-executory, i.e., the dismissed employee need not even apply for and the LA need not even issue a writ of
execution to trigger the employer's duty to reinstate the dismissed employee.

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Loon v. Power Master , December 11, 2013.
Doctrine: The rationale for this rule is that the pertinent personnel files, payrolls, records, remittances and
other similar documents — which will show that differentials, service incentive leave and other claims of
workers have been paid — are not in the possession of the worker but are in the custody and control of the
employer.
Facts: Respondents Power Master, Inc. and Tri-C General Services employed and assigned the petitioners as
janitors and leadsmen in various PLDT offices in Metro Manila. The petitioners alleged that they were not paid
minimum wages, overtime, holiday, premium, service incentive leave, and 13th month pays. They further
averred that respondents made them sign blank payroll sheets. On June 11, 2001, they amended their
complaint and included illegal dismissal therein. They claimed that respondents relieved them from service in
retaliation.
On March 15, 2002, the LA partially ruled in favor of the petitioners. The LA awarded the petitioners salary
differential, service incentive leave, and 13th month pays. In awarding these claims, the LA stated that the
burden of proving payment of these money claims rests with the employer. On appeal in the NLRC, the
respondents claimed that they paid the petitioners minimum wages, service incentive leave and 13th month
pays. As proofs, they attached photocopied and computerized copies of payroll sheets to their memorandum
on appeal. The NLRC affirmed the LA’s awards of holiday pay and attorney’s fees. However, it overturned the
LA’s awards of salary differential, 13th month and service incentive leave pays. In so ruling, it gave weight to
the pieces of evidence attached to the memorandum on appeal and the supplemental appeal. It maintained
that the absence of the petitioners’ signatures in the payrolls was not an indispensable factor for their
authenticity. It pointed out that the payment of money claims was further evidenced by the list of employees
with ATM cards. The NLRC further ruled that the petitioners were lawfully dismissed on grounds of serious
misconduct. The CA affirmed the NLRC’s ruling and upheld the NLRC’s findings on the petitioners’ monetary
claims.
Issue: Whether or not the petitioners are entitled to salary differential, overtime, holiday, premium, service
incentive leave, and 13th month pay.
Ruling: The Court reversed the NLRC’s finding that the petitioners are not entitled to salary differential, service
incentive, holiday, and 13th month pays. The general rule is that the burden rests on the employer to prove
payment rather on the plaintiff to prove nonpayment of these money claims. The rationale for this rule is that
the pertinent personnel files, payrolls, records, remittances and other similar documents — which will show
that differentials, service incentive leave and other claims of workers have been paid — are not in the
possession of the worker but are in the custody and control of the employer.
However, the Court ruled that petitioners are not entitled to overtime and premium pays. The CA was correct
in its finding that the petitioners failed to provide sufficient factual basis for the award of overtime, and
premium pays for holidays and rest days. The burden of proving entitlement to overtime pay and premium pay
for holidays and rest days rests on the employee because these are not incurred in the normal course of
business. In the present case, the petitioners failed to adduce any evidence that would show that they actually
rendered service in excess of the regular eight working hours a day, and that they in fact worked on holidays
and rest days.

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Waterfront Cebu City Casino v. Ledesma, March 25, 2015. (Rule 65)
Doctrine: The present rule now mandatorily requires compliance with the reglementary period.
Facts: Respondent was employed as a House Detective at Waterfront located at Salinas Drive, Cebu City. On
the basis of the complaints filed before Waterfront by Christe 6 Mandal, a supplier of a concessionaire of
Waterfront, and Rosanna Lofranco, who was seeking a job at the same hotel, Ledesma was dismissed from
employment. 7 From the affidavits 8 and testimonies 9 of Christe Mandal and Rosanna Lofranco during the
administrative hearings conducted by Waterfront, the latter found, among others, that Ledesma kissed and
mashed the breasts of Christe Mandal inside the hotel's elevator, and exhibited his penis and asked Rosanna
Lofranco to masturbate him at the conference room of the hotel. On August 12, 2008, Ledesma filed a
complaint 10 for illegal dismissal which was docketed as NLRC RAB-VII Case No. 08-1887-08.
The LA found that the allegations leveled against Ledesma are mere concoctions, and concluded that Ledesma
was illegally dismissed. On appeal to the NLRC, the latter reversed the ruling of the LA and held that Ledesma's
acts of sexual overtures to Christe Mandal and Rosanna Lofranco constituted grave misconduct justifying his
dismissal from employment. The NLRC denied Ledesma's motion for reconsideration in a Resolution dated
February 22, 2010. A copy of the said Resolution was received by Atty. Gines Abellana (Atty. Abellana),
Ledesma's counsel of record, on March 15, 2010. On May 17, 2010, 14 or sixty-three (63) days after Atty.
Abellana received a copy of the NLRC's Resolution denying the motion for reconsideration, said counsel filed
before the CA a petition for certiorari under Rule 65 of the Rules of Court. In the amended petition, Ledesma
contended that his receipt on March 24, 2010 (and not the receipt on March 15, 2010 by Atty. Abellana), is the
reckoning date of the 60-day reglementary period within which to file the petition. Hence, Ledesma claims that
the petition was timely filed on May 17, 2010. By its Resolution 19 dated August 27, 2010, the CA granted
leave of court to Ledesma and admitted his amended petition for certiorari. The CA, thereafter, rendered a
Decision dated March 17, 2011, reversing the Decision of the NLRC and reinstating the ruling of the LA. The CA
denied the motion for reconsideration filed by Waterfront in a Resolution dated June 21, 2011. Thus, the
present petition for review on certiorari where Waterfront raised the main issue of whether the petition for
certiorari was timely filed with the CA.
Issue: Whether Ledesma filed the petition on time.
Held: No. The unjustified failure of Ledesma to file his petition for certiorari before the CA within the 60-day
period is a ground for the outright dismissal of said petition.Section 4, Rule 65 of the Rules of Court, as
amended by A.M. No. 07-7-12-SC, reads:
SEC. 4. When and where to file the petition. — The petition shall be filed not later than sixty (60) days from
notice of the judgment, order or resolution. In case a motion for reconsideration or new trial is timely filed,
whether such motion is required or not, the petition shall be filed not later than sixty (60) days counted from
the notice of the denial of the motion.
If the petition relates to an act or an omission of a municipal trial court or of a corporation, a board, an officer
or a person, it shall be filed with the Regional Trial Court exercising jurisdiction over the territorial area as
defined by the Supreme Court. It may also be filed with the Court of Appeals or with the Sandiganbayan,
whether or not the same is in aid of the court's appellate jurisdiction. If the petition involves an act or an

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omission of a quasi-judicial agency, unless otherwise provided by law or these rules, the petition shall be filed
with and be cognizable only by the Court of Appeals.
In election cases involving an act or an omission of a municipal or a regional trial court, the petition shall be
filed exclusively with the Commission on Elections, in aid of its appellate jurisdiction.
In Laguna Metts Corporation v. Court of Appeals, 26 we categorically ruled that the present rule now
mandatorily requires compliance with the reglementary period.
Atty. Abellana, Ledesma's counsel, admittedly received a copy of the NLRC Resolution denying the Motion for
Reconsideration on March 15, 2010 while Ledesma received his copy on March 24, 2010.
Ledesma erroneously asserted in his petition for certiorari filed before the CA, that the 60th day is May 15,
2010, counted from March 15, 2010. 35 In computing a period, the first day shall be excluded, and the last
included; 36 hence, the last day to file his petition for certiorari is on May 14, 2010, a Friday. Ledesma
therefore belatedly filed his petition on May 17, 2010. HCTaAS
Realizing his procedural faux pas, Ledesma filed an amended petition where he contended that he timely filed
his petition for certiorari on May 17, 2010 counted from his receipt of the NLRC Resolution denying his motion
for reconsideration on March 24, 2010. 37 This stance is bereft of any legal basis. When a party to a suit
appears by counsel, service of every judgment and all orders of the court must be sent to the counsel. This is
so because notice to counsel is an effective notice to the client, while notice to the client and not his counsel is
not notice in law. 38 Receipt of notice by the counsel of record is the reckoning point of the reglementary
period. 39
Ledesma did not attempt to justify the belated filing of his petition for certiorari.
The relaxation of procedural rules may be allowed only when there are exceptional circumstances to justify the
same. 45 There should be an effort on the part of the party invoking liberality to advance a reasonable or
meritorious explanation for his/her failure to comply with the rules. 46 Moreover, those who seek exemption
from the application of a procedural rule have the burden of proving the existence of exceptionally meritorious
reason warranting such departure. In sum, the late filing by Ledesma of his petition for certiorari, and his
failure to justify his procedural lapse to merit a lenient application of the rules divested the CA of jurisdiction
to entertain the petition.

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Balite v. SSS Ventures, February 4, 2015
Doctrine: The Court pronounced that the posting of a cash or surety bond in an amount EQUIVALENT TO 10% of
the monetary award pending resolution of the motion to reduce appeal bond shall be deemed sufficient to
perfect an appeal.

Facts: Respondent SS Ventures International, Inc. is a domestic corporation duly engaged in the business of
manufacturing footwear products for local sales and export abroad. Petitioners Andy Balite (Balite), Monaliza Bihasa
(Bihasa) and Delfin Anzaldo (Anzaldo) were regular employees of the respondent company until their employments were
severed for violation of various company policies.
Balite was issued a Show Cause Memorandum by the respondent company on 4 August 2005 charging him with the
following infractions:
1. making false reports, malicious and fraudulent statements and rumor-mongering against the company;
2. threatening and intimidating co-workers;
3. refusing to cooperate in the conduct of investigation; and
4. gross negligence in the care and use of the company property resulting in the damage of the finished products.
After respondent found Balite’s explanation insufficient, he was dismissed from employment, through a Notice of
Termination. Bihasa, on the other hand, was charged with absence without leave on two occasions and with improper
behavior, stubbornness, arrogance and uncooperative attitude towards superiors and employees. Bihasa was likewise
terminated from the service Anzaldo was also dismissed from employment after purportedly giving him due process.
The records of the infractions he committed as well as the date of his termination, however, are not borne by the
records. The three employees charged respondents with illegal dismissal and recovery of backwages, 13th month pay
and attorney’s fees before the Labor Arbiter.
In refuting the allegations of the petitioners, respondents averred that petitioners were separated from employment for
just causes and after affording them procedural due process of law. The Labor Arbiter rendered a Decision in favor of
petitioners and held that respondents are liable for illegal dismissal for failing to comply with the procedural and
substantive requirements in terminating employment.
CRUX OF THE CASE: respondents interposed an appeal by filing a Notice of Appeal and paying the corresponding appeal
fee. However, instead of filing the required appeal bond equivalent to the total amount of the monetary award which is
₱490,308.00, respondents filed a Motion to Reduce the Appeal Bond to ₱100,000.00 and appended therein a manager’s
check bearing the said amount. Respondents cited financial difficulty as justification for their inability to post the appeal
bond in full owing to the partial shutdown of respondent company’s operations. - NLRC dismissed the appeal filed by the
respondents for non-perfection. The NLRC ruled that posting of an appeal bond equivalent to the monetary award is
indispensable for the perfection of the appeal and the reduction of the appeal bond - Court of Appeals reversed the
NLRC Decision and allowed the relaxation of the rule on posting of the appeal bond. According to the appellate court,
there was substantial compliance with the rules for the perfection of an appeal because respondents seasonably filed
their Memorandum of Appeal and posted an appeal bond in the amount of ₱100,000.00.
ISSUE:
Whether posting of an appeal bond in full is a mandatory and jurisdictional requirement that must be complied with in
order to confer jurisdiction upon the NLRC.
RULING:
NO. The pertinent rule on the matter is Article 223 of the Labor Code , as amended, which sets forth the rules
on appeal from the Labor Arbiter’s monetary award:

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ART. 223. Appeal.– Decisions, awards, or orders of the Labor Arbiter are final and executory unless appealed to
the Commission by any or both parties within ten (10) calendar days from receipt of such decisions, awards, or
orders. x x x. x x x x
In case of a judgment involving a monetary award, an appeal by the employer may be perfected only upon the
posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Commission in
the amount equivalent to the monetary award in the judgment appealed from.
Implementing the aforestated provisions of the Labor Code are the provisions of Rule VI of the 2011 Rules of
Procedure of the NLRC on perfection of appeals which read:
Section. 1. Periods of Appeal. - Decisions, awards or orders of the Labor Arbiter shall be final and executory
unless appealed to the Commission by any or both parties within ten (10)calendar days from receipt thereof. x
x x If the 10th day or the 5th day, as the case may be, falls on a Saturday, Sunday or holiday, the last day to
perfect the appeal shall be the first working day following such Saturday, Sunday or holiday. x x x x
Section 4. Requisites for Perfection of Appeal. –
(a) The appeal shall be:
(1) filed within the reglementary period as provided in Section 1 of this Rule;
(2) verified by the appellant himself/herself in accordance with Section 4, Rule 7 of the Rules of Court ,as
amended;
(3) in the form a of a memorandum of appeal which shall state the grounds relied upon and the arguments in
support thereof; the relief prayed for; and with a statement of the date when the appellant received the
appealed decision, award or order; (4) in three (3) legibly typewritten or printed copies; and
(5) accompanied by: i) proof of payment of the required appeal fee and legal research fee; ii) posting of cash or
surety bond as provided in Section 6 of this Rule; and iii) proof of service upon the other parties. x x x x (b) A mere
notice of appeal without complying with the other requisites aforestated shall not stop the running of the period
for perfecting an appeal. x x x x
Section 5. Appeal Fee. - The appellant shall pay the prevailing appeal fee and legal research fee to the
Regional Arbitration Branch or Regional Office of origin, and the official receipt of such payment shall form part
of the records of the case.
Section 6. Bond. - In case the decision of the Labor Arbiter, or the Regional Director involves a monetary
award, an appeal by the employer shall be perfected only upon the posting of a bond, which shall either be in
the form of cash deposit or surety bond equivalent in amount to the monetary award, exclusive of damages
and attorney’s fees.
THEREFORE, these statutory and regulatory provisions explicitly provide that an appeal from the Labor Arbiter to
the NLRC must be perfected within ten calendar days from receipt of such decisions , awards or orders of the
Labor Arbiter. In a judgment involving a monetary award, the appeal shall be perfected only upon payment of
the required appeal fee ; (2) posting of a cash or surety bond issued by a reputable bonding company ; and (3)
filing of a memorandum of appeal.
In McBurnie v. Ganzon, we harmonized the provision on appeal that its procedures are fairly applied to both the
petitioner and the respondent, assuring by such application that neither one or the other party is unfairly
favored. We pronounced that the posting of a cash or surety bond in an amount EQUIVALENT TO 10% of the
monetary award pending resolution of the motion to reduce appeal bond shall be deemed sufficient to perfect
an appeal. The Court holds that the appeal bond posted by the respondent in the amount of ₱100,000.00 which
is equivalent to around 20% of the total amount of monetary bond is sufficient to perfect an appeal. With the
employer's demonstrated good faith in filing the motion to reduce the bond on demonstrable grounds coupled
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with the posting of the appeal bond in the requested amount, as well as the filing of the memorandum of
appeal, the right of the employer to appeal must be upheld . This is in recognition of the importance of the
remedy of appeal, which is an essential part of our judicial system and the need to ensure that every party
litigant is given the amplest opportunity for the proper and just disposition of his cause freed from the
constraints of technicalities.

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Turks Shawarma v. Pajaron, January 16, 2017
Doctrine:
The reduction of the appeal bond is allowed, subject to the following conditions: (1) the motion to reduce the
bond shall be based on meritorious grounds; and (2) a reasonable amount in relation to the monetary award is
posted by the appellant. Compliance with these two conditions will stop the running of the period to perfect
an appeal.

Facts:
Petitioners hired Feliciano Pajaron and Larry Carbonilla in 2007 as service crew and head crew, respectively. In
April 2015, both would file complaints their respective complaints against their employers for constructive and
actual illegal dismissal, non-payment of overtime pay, holiday pay, holiday premium, rest day premium, service
incentive leave pay and 13th month pay against petitioners. Both Complaints were consolidated.
Pajaron alleged that Zeñarosa asked him to sign a piece of paper stating that he was receiving the correct
amount of wages and that he had no claim against petitioners. He refused to sign the same and that that
caused his dismissal. As for Carbonilla he had an altercation with his supervisor, causing his immediate
termination. He was also asked to sign a piece of paper acknowledging a debt of 7000php.
Both Pajaron and Carbonilla claim that there was no just or authorized cause for their dismissal. Petitioners on
the other hand claim that both abandoned their work, with Pajaron being a habitual absentee for extended
periods and that he was simply rehired on the spot; while Carbonilla habitually misbehaved and left
employment without settling an unpaid obligation of 78,900php, prompting the filing of the charge of estafa
against him.
LA RULING: Ruled in favor of both Pajaron and Carbonilla, awarding respectively the amounts of about 148k
and 49k.
NLRC PROCEEDINGS+RULING: Due to alleged unavailability of counsel, Zeñarosa filed on his own a Notice of
Appeal with Memorandum, with a Motion to Reduce Bond. He posted a 15,000php bond maintaining that he
cannot pay the full amount as he was a mere backyard entrepreneur. The NLRC denied the motion and ruled
that financial difficulty was not a ground for reduction, and that the same was unsubstantiated. Petitioners
thru new counsel questioned the harsh outright dismissal of their Motion and filed a new Motion for
Reconsideration. The NLRC denied the Motion for Reconsideration and that the posting of the remaining
balance would amount to extending the period allowed by the rules into 3 months.
CA RULING: Dismissed a Petition for Certiorari and ruled that there was no grave abuse of discretion on the
part of the NLRC.

Issue:
Whether the refusal to grant the motion amounted to grave abuse.

Ruling:

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NO. The Supreme Court cited Secs. 4 and 6 of the NLRC Rules of Procedure, with the latter providing:
No motion to reduce bond shall be entertained except on meritorious grounds, and upon the posting of a
bond in a reasonable amount. The mere fiing of a motion to reduce bond without complying with the
requisites in the preceding paragraphs shall not stop the running of the period to perfect an appeal.
"It is clear from both the Labor Code and the NLRC Rules of Procedure that there is legislative and
administrative intent to strictly apply the appeal bond requirement, and the Court should give utmost regard
to this intention." The posting of cash or surety bond is therefore mandatory and jurisdictional; failure to
comply with this requirement renders the decision of the Labor Arbiter final and executory.
the reduction of the appeal bond is allowed, subject to the following conditions: (1) the motion to reduce the
bond shall be based on meritorious grounds; and (2) a reasonable amount in relation to the monetary award is
posted by the appellant. Compliance with these two conditions will stop the running of the period to perfect
an appeal.
The NLRC correctly held that the supposed ground cited in the motion is not well-taken for there was no
evidence to prove Zen arosa's claim that the payment of the full amount of the award would greatly affect his
business due to financial setbacks. Besides, "the law does not require outright payment of the total monetary
award; [the appellant has the option to post either a cash or surety bond.

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Reinstatement Aspect of LA’s Decision

Pioneer Texturizing Corporation v. NLRC, 1997 case
Doctrine:
The decision of the Labor Arbiter reinstating a dismissed or separated employee insofar as the reinstatement
aspect is concerned, shall be immediately executory, even pending appeal. The employer shall reinstate the
employee concerned either by: (a) actually admitting him back to work under the same terms and conditions
prevailing prior to his dismissal or separation; or (b) at the option of the employer, merely reinstating him in
the payroll. Immediate reinstatement is mandated and is not stayed by the fact that the employer has
appealed, or has posted a cash or surety bond pending appeal.
Facts:

Private respondent Lourdes A. de Jesus is petitioners’ reviser/trimmer since 1980. As reviser/trimmer, de Jesus
based her assigned work on a paper note posted by petitioners. The petitioners terminated her employment
for dishonesty and tampering of official records and documents with the intention of cheating. De Jesus
maintained that she merely committed a mistake.

The Labor Arbiter who heard the case noted that de Jesus was amply accorded procedural due process in her
termination from service. Nevertheless, after finding that her dismissal was not justified, the Labor Arbiter
held petitioners guilty of illegal dismissal. Petitioners were accordingly ordered to reinstate de Jesus to her
previous position without loss of seniority rights and with full backwages from the time of her suspension.

Petitioners appealed to the NLRC. The NLRC affirmed the Labor Arbiter's order of reinstatement, but without
backwages. Petitioners filed their motion for reconsideration, but it was denied. Hence, this petition.

Petitioners' theory is that an order for reinstatement is not self-executory. They stress that there must be a
writ of execution which may be issued by the NLRC or by the Labor Arbiter motu proprio or on motion of an
interested party. They further maintain that even if a writ of execution was issued, a timely appeal coupled by
the posting of appropriate supersedeas bond, which they did in this case, effectively forestalled and stayed
execution of the reinstatement order of the Labor Arbiter.

Issue:

Whether an order for reinstatement by the Labor Arbiter needs a writ of execution.

Ruling:

No. An order for reinstatement by the Labor Arbiter does not need a writ of execution.

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ART. 223. Appeal. --Decisions, awards, or orders of the Labor Arbiter are final and executory
unless appealed to the Commission by any or both parties within ten (10) calendar days from
receipt of such decisions, awards, or orders.

xxx xxx xxx

In an event, the decision of the Labor Arbiter reinstating a dismissed or separated employee,
insofar as the reinstatement aspect is concerned, shall immediately be executory, even pending
appeal. The employee shall either be admitted back to work under the same terms and
conditions prevailing prior to his dismissal or separation or, at the option of the employer,
merely reinstated in the payroll. The posting of a bond by the employer shall not stay the
execution for reinstatement provided herein.

xxx xxx xxx

Under the said provision of law, the decision of the Labor Arbiter reinstating a dismissed or separated
employee insofar as the reinstatement aspect is concerned, shall be immediately executory, even pending
appeal. The employer shall reinstate the employee concerned either by: (a) actually admitting him back to
work under the same terms and conditions prevailing prior to his dismissal or separation; or (b) at the option
of the employer, merely reinstating him in the payroll. Immediate reinstatement is mandated and is not stayed
by the fact that the employer has appealed, or has posted a cash or surety bond pending appeal.

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Roquero v. PAL, 2 April 2004

Doctrine:

An employee instigated to take drugs has no right to be reinstated to his position. He took the drugs fully
knowing that he was on duty and more so that it is prohibited by company rules. Instigation is only a defense
against criminal liability. It cannot be used as a shield against dismissal from employment especially when the
position involves the safety of human lives.

The order of reinstatement is immediately executory. The unjustified refusal of the employer to reinstate a
dismissed employee entitles him to payment of his salaries effective from the time the employer failed to
reinstate him despite the issuance of a writ of execution. Unless there is a restraining order issued, it is
ministerial upon the Labor Arbiter to implement the order of reinstatement.

FACTS:

Alejandro Roquero, along with Rene Pabayo, were ground equipment mechanics of respondent Philippine
Airlines, Inc. (PAL). From the evidence on record, it appears that Roquero and Pabayo were caught red-handed
possessing and using Methampethamine Hydrochloride or shabu in a raid conducted by PAL security officers
and NARCOM personnel.

Roquero and Pabayo received a notice of administrative charge for violating the PAL Code of Discipline. They
assailed their arrest and asserted that they were instigated by PAL to take the drugs. Roquero and Pabayo were
dismissed by PAL. Thus, they filed a case for illegal dismissal.

LA/RTC/NLRC RULING:

The Labor Arbiter upheld the dismissal of Roquero and Pabayo. It found both parties at fault, PAL for applying
means to entice the complainants into committing the infraction and the complainants for giving in to the
temptation and eventually indulging in the prohibited activity. Nonetheless, the Labor Arbiter awarded
separation pay and attorney’s fees to the complainants.

While the case was on appeal with the NLRC, the complainants were acquitted by the RTC in the criminal case
which charged them with conspiracy for possession and use of a regulated drug in violation of Section 16,
Article III of Republic Act 6425, on the ground of instigation.

The NLRC ruled in favor of complainants as it likewise found PAL guilty of instigation. It ordered reinstatement
to their former positions but without backwages. Complainants did not appeal from the decision but filed a
motion for a writ of execution of the order of reinstatement. The Labor Arbiter granted the motion but PAL
refused to execute the said order on the ground that they have filed a Petition for Review before the Supreme
Court. In accordance with the case of St. Martin Funeral Home vs. NLRC and Bienvenido Aricayos, PAL’s petition
was referred to the Court of Appeals.

CA RULING:
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PAL and Pabayo filed a Motion to Withdraw/Dismiss the case with respect to Pabayo, after they voluntarily
entered into a compromise agreement.

The Court of Appeals later reversed the decision of the NLRC and reinstated the decision of the Labor Arbiter
insofar as it upheld the dismissal of Roquero. However, it denied the award of separation pay and attorney’s
fees to Roquero on the ground that one who has been validly dismissed is not entitled to those benefits.

APPEAL TO THE SC:

Petition for Review on Certiorari under Rule 45

ISSUE/S:

1. Whether or not the instigated employee shall be solely responsible for an action arising from the
instigation
perpetrated by the employer and shall not be reinstated.
2. Can the executory nature of the decision, more so the reinstatement aspect of a labor tribunals order
be halted by
a petition having been filed in higher courts without any restraining order or preliminary injunction
having been
ordered in the meantime?
3. Would the employer who refused to reinstate an employee despite a writ duly issued be held liable to
pay the
salary of the subject employee from the time that he was ordered reinstated up to the time that the
reversed decision was handed down?

RULING:

1. Yes. Even if Petitioner was instigated to take drugs he has no right to be reinstated to his position. He took
the drugs fully knowing that he was on duty and more so that it is prohibited by company rules. Instigation is
only a defense against criminal liability. It cannot be used as a shield against dismissal from employment
especially when the position involves the safety of human lives.

There is also no question that petitioner Roquero is guilty of serious misconduct for possessing and using
shabu. He violated Chapter 2, Article VII, section 4 of the PAL Code of Discipline.

2. No. Article 223 (3rd paragraph) of the Labor Code, as amended by Section 12 of Republic Act No. 6715, and
Section 2 of the NLRC Interim Rules on Appeals under RA No. 6715, Amending the Labor Code, provide that an
order of reinstatement by the Labor Arbiter is immediately executory even pending appeal.

3. Yes. The order of reinstatement is immediately executory. The unjustified refusal of the employer to
reinstate a dismissed employee entitles him to payment of his salaries effective from the time the employer
failed to reinstate him despite the issuance of a writ of execution. Unless there is a restraining order issued, it
is ministerial upon the Labor Arbiter to implement the order of reinstatement. In the case at bar, no restraining
order was granted. Thus, it was mandatory on PAL to actually reinstate Roquero or reinstate him in the payroll.

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Having failed to do so, PAL must pay Roquero the salary he is entitled to, as if he was reinstated, from the time
of the decision of the NLRC until the finality of the decision of this Court.

Even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory on the part of the
employer to reinstate and pay the wages of the dismissed employee during the period of appeal until reversal
by the higher court. On the other hand, if the employee has been reinstated during the appeal period and such
reinstatement order is reversed with finality, the employee is not required to reimburse whatever salary he
received for he is entitled to such, more so if he actually rendered services during the period.

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Air Phil Corp. v. Zamora, August 7, 2004
Doctrine: Reinstatement is obligatory on the part of the employer during the period of appeal until reversal by
the higher court.

Facts:

Enrico Zamora (Zamora) was employed with Air Philippines Corporation (APC) as a B-737 Flight Deck Crew. He
applied for promotion to the position of airplane captain and underwent the requisite training program. After
completing training, he inquired about his promotion but APC did not act on it; instead, it continued to give
him assignments as flight deck crew. Thus, Zamora filed a Complaint with the Labor Arbiter. He argued that the
act of APC of withholding his promotion rendered his continued employment with it oppressive and unjust. He
therefore asked that APC be held liable for constructive dismissal.

APC denied that it dismissed the complainant. It pointed out that, when the complaint was filed on May 14,
1997, complainant was still employed with it. It was only on May 22, 1997 that complainant stopped reporting
for work, not because he was forced to resign, but because he had joined a rival airline, Grand Air.

The Labor Arbiter ruled in favor of Zamora and ordered his reinstatement as captain without loss of seniority
right. Meanwhile, APC filed with the NLRC an appeal assailing the finding of the Labor Arbiter that it was liable
for constructive dismissal and held that there was no dismissal, constructive or otherwise.

However, respondent Air Philippines Corporation is ordered to pay complainant his unpaid salaries and
allowances which arose from the order of his reinstatement.

Issue:

WON the NLRC committed grave abuse of discretion in holding the petitioner liable to respondent

Held:

No. The premise of the award of unpaid salary to respondent is that prior to the reversal by the NLRC of the
decision of the Labor Arbiter, the order of reinstatement embodied therein was already the subject of an alias
writ of execution even pending appeal. Although petitioner did not comply with this writ of execution, its
intransigence made it liable nonetheless to the salaries of respondent pending appeal.

Even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory on the part of the employer
to reinstate and pay the wages of the dismissed employee during the period of appeal until reversal by the higher court.
On the other hand, if the employee has been reinstated during the appeal period and such reinstatement order is
reversed with finality, the employee is not required to reimburse whatever salary he received for he is entitled to such,
more so if he actually rendered services during the period.

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Lansangan v. Amkor Technology Philippines, January 30, 2009 Genuino
v. NLRC, December 4, 2007
Doctrine: Payment of backwages and other benefits is justified only if the employee was unjustly dismissed.

Facts: An e mail was sent to Amkor Technology Philippines (Amkor) through their General Manager alleging
that the Lunesa Lansangan (Lansangan) and Rocita Cendana (Cendana) stole company time. Lansangan and
Cendana admitted to the wrongdoing and were terminated for ―extremely serious offenses‖. The two then
filed a case of illegal dismissal against Amkor. The Labor Arbiter (LA) ordered for their reinstatement to their
former positions without backwages, but dismissed the complaint on basis of Lansangan and Cendana’s guilt.
The two did not appeal the finding that they were guilty, and moved for the writ of execution. Amkor appealed
the decision to the National Labor Relations Commissions (NLRC) and was subsequently granted. The NLRC
deleted the grant for reinstatement of the LA.

The Court of Appeals affirmed the decision of the NLRC that Lansangan and Cendana are guilty and should not
be reinstated but modified in so far as backwages are concerned that it must be paid in full.

Issue: Whether or not Lansangan and Cendana are entitled to backwages and reinstatement

Ruling: The Arbiter found Lansangan and Cendana’s dismissal to be valid. Such finding had, as stated earlier,
become final, they not having appealed it. Lansangan and Cendana’s are not entitled to full backwages as their
dismissal was not found to be illegal. Agabon v. NLRC so states –– payment of backwages and other benefits is
justified only if the employee was unjustly dismissed.

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Garcia et al. v. PAL, January 20, 2009
JUANITO A. GARCIA and ALBERTO J. DUMAGO , petitioners, vs. PHILIPPINE AIRLINES, INC., respondent.
[G.R. No. 164856. January 20, 2009.]
Doctrine:
An award for reinstatement shall be immediately executory even pending appeal and the posting of a bond by
the employer shall not stay the execution for reinstatement.
Facts:
The case stemmed from the administrative charge filed by PAL against its employees-herein petitioners after
they were allegedly caught in the act of sniffing shabu when a team of company security personnel and law
enforcers raided the PAL Technical Center’s Toolroom Section.
After due notice, PAL dismissed petitioners for transgressing the PAL Code of Discipline, prompting them to file
a complaint for illegal dismissal and damages. On Jan. 11, 1999, the Labor Arbiter ruled in favor of petitioners,
thus ordering PAL to, inter alia, immediately comply with the reinstatement aspect of the decision. Prior to the
promulgation of the Labor Arbiter's decision, the SEC placed PAL which was suffering from severe financial
losses, under an Interim Rehabilitation Receiver, who was subsequently replaced by a Permanent
Rehabilitation Receiver.
Subsequently or on October 5, 2000, the Labor Arbiter issued a Writ of Execution respecting the reinstatement
aspect of his January 11, 1999 Decision. PAL filed a Petition for Injunction before the NLRC.
The NLRC affirmed the validity of the Writ issued by the Labor Arbiter but suspended and referred the action
to the Rehabilitation Receiver for appropriate action. The CA then nullified the NLRC Resolution on two
grounds, essentially espousing that: (1) a subsequent finding of a valid dismissal removes the basis for
implementing the reinstatement aspect of a labor arbiter’s decision, and (2) the impossibility to comply with
the reinstatement order due to corporate rehabilitation provides a reasonable justification for the failure to
exercise the options under Art. 223 of the Labor Code.
Issues:
(1) Whether or not it is obligatory to reinstate employees during the period of appeal under Art. 223 even is
such order is reversed on appeal
(2) Whether or not there are exemptions to such rule
Ruling:
1. YES. The Court reaffirms the prevailing principle that even if the order of reinstatement of the Labor Arbiter
is reversed on appeal, it is obligatory on the part of the employer to reinstate and pay the wages of the
dismissed employee during the period of appeal until reversal by the higher court. It settles the view that the
Labor Arbiter's order of reinstatement is immediately executory and the employer has to either re-admit them
to work under the same terms and conditions prevailing prior to their dismissal, or to reinstate them in the
payroll, and that failing to exercise the options in the alternative, employer must pay the employee's salaries.

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The provision of Article 223 is clear that an award by the Labor Arbiter for reinstatement shall be immediately
executory even pending appeal and the posting of a bond by the employer shall not stay the execution for
reinstatement. The legislative intent is quite obvious, i.e., to make an award of reinstatement immediately
enforceable, even pending appeal. To require the application for and issuance of a writ of execution as
prerequisites for the execution of a reinstatement award would certainly betray and run counter to the very
object and intent of Article 223, i.e., the immediate execution of a reinstatement order.
2. YES. After the Labor Arbiter's decision is reversed by a higher tribunal, the employee may be barred from
collecting the accrued wages, if it is shown that the delay in enforcing the reinstatement pending appeal was
without fault on the part of the employer.
The test is two-fold:
(1) there must be actual delay or the fact that the order of reinstatement pending appeal was not executed
prior to its reversal; and
(2) the delay must not be due to the employer's unjustified act or omission. If the delay is due to the
employer's unjustified refusal, the employer may still be required to pay the salaries notwithstanding the
reversal of the Labor Arbiter's decision.
While reinstatement pending appeal aims to avert the continuing threat or danger to the survival or even the
life of the dismissed employee and his family, it does not contemplate the period when the
employer-corporation itself is similarly in a judicially monitored state of being resuscitated in order to survive.
More importantly, there are legal effects arising from a judicial order placing a corporation under
rehabilitation. Respondent was, during the period material to the case, effectively deprived of the alternative
choices under Article 223 of the Labor Code, not only by virtue of the statutory injunction but also in view of
the interim relinquishment of management control to give way to the full exercise of the powers of the
rehabilitation receiver. Had there been no need to rehabilitate, respondent may have opted for actual physical
reinstatement pending appeal to optimize the utilization of resources. Then again, though the management
may think this wise, the rehabilitation receiver may decide otherwise, not to mention the subsistence of the
injunction on claims.
In sum, the obligation to pay the employee's salaries upon the employer's failure to exercise the alternative
options under Article 223 of the Labor Code is not a hard and fast rule, considering the inherent constraints of
corporate rehabilitation.
Dispositive Portion: WHEREFORE, the petition is PARTIALLY DENIED. Insofar as the Court of Appeals Decision
and Resolution annulling the NLRC Resolutions affirming the validity of the Writ of Execution and the Notice of
Garnishment are concerned, the Court finds no reversible error.

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Mt. Carmel College v. Resuena October 10, 2007
Doctrine: When the order for reinstatement was first decided upon appeal to the NLRC, Art 224 provides that a writ of
execution on a judgment within five (5) years from the date it becomes final and executory. Consequently,if the
execution be for the reinstatement of any person to a position, an office or an employment, such writ shall be served by
the sheriff upon the losing party or upon any other person required by law to obey the same, and such party or person
may be punished for contempt if he disobeys such decision or order for reinstatement.

Facts: On 21 November 1997, respondents, together with several faculty members, non-academic personnel, and other
students, participated in a protest action against petitioner Mt. Carmel College. Thereafter, petitioner's Director, Rev. Fr.
Malandac, issued a Memorandum to each of the respondents, directing them to explain in writing why they should not
be dismissed for loss of trust and confidence for joining the protest action against the school administration.

Each of the four respondents filed separate complaints for illegal dismissal against Mt. Carmel College before the NLRC.
All four cases were consolidated, and Labor Arbiter Drilon issued a Decision affirming the validity of termination by
petitioner on the ground of loss of trust and confidence and awarded separation pay computed at one month pay for
every year of service, their proportionate 13th month pay, and attorney's fees. Their claims for moral and exemplary
damages were denied.

In ruling on the consolidated complaints filed by the four respondents, Labor Arbiter Drilon found that they were not
illegally dismissed but ordered that they be awarded 13th month pay, separation pay and attorney's fees in the amount
of P334,875.47. Upon appeal to the NLRC, the NLRC reversed the findings of the Labor Arbiter ruling that the termination
of respondents was illegal and ordering the payment of backwages of respondents from 15 May 1998 up to 25 May
1999. It further directed the reinstatement of respondents or payment of separation pay, with backwages. This was
affirmed by the Court of Appeals.

Petitioner avers that the CA erred in upholding that the award of backwages goes beyond the period 15 May 1998 to 25
May 1999 on the supposition that reinstatement is self-executory and does not need a writ of execution for its
enforcement. Petitioner insists that, applying Article 224 of the Labor Code in the instant case, any reinstatement aspect
of the NLRC Decision, as affirmed by the Court of Appeals, should have been done through the issuance of a Writ of
Execution as it is no longer self-executory. It furthermore contends that it was impossible to reinstate respondents,
whether by way of an immediate execution or by way of a self-executory nature, since there was nothing to execute
pending appeal because there was no order for reinstatement.

Issue: Whether reinstatement in the instant case is self-executory and does not need a writ of execution for its
enforcement —NO.

Ruling: Petitioner vehemently raises the argument that the award of backwages subject to execution is limited to the
period prior to the appeal and does not include the period during the pendency of the appeal, on the contention that
reinstatement during appeal is warranted only when the Labor Arbiter rules that the dismissed employee should be
reinstated. In support of its foregoing argument, petitioner invokes Filflex v. NLRC where this Court ruled:

In other words, reinstatement during appeal is warranted only when the labor arbiter (LA) himself rules that the
dismissed employee should be reinstated. In the present case, neither the dispositive portion nor the text of the labor
arbiter's decision ordered the reinstatement of private respondent. Further, the back wages granted to private
respondent were specifically limited to the period prior to the filing of the appeal with Respondent NLRC. In fact, the LA's
decision ordered her separation from service for the parties' "mutual advantage and most importantly to physical and
health welfare of the complainant."

An order for reinstatement must be specifically declared and cannot be presumed; like back wages, it is a separate and
distinct relief given to an illegally dismissed employee. There being no specific order for reinstatement and the order
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being for complainant's separation, there can be no basis for the award of salaries/back wages during the pendency of
appeal.

Petitioner's reliance on Filflex is misplaced and inapplicable to the case at bar. Indeed in Filflex, this Court ruled that the
award of backwages is limited to the period prior to the filing of the appeal with the NLRC. This Court had declared in the
aforesaid case that reinstatement during appeal is warranted only when the Labor Arbiter himself rules that the
dismissed employee should be reinstated. But this was precisely because on appeal to the NLRC, it found that there was
no illegal dismissal; thus, neither reinstatement nor backwages may be awarded. In fact, Filfex deleted the award of
backwages granted during appeal, reiterating that an award of backwages by the NLRC during the period of appeal is
totally inconsistent with its finding of a valid dismissal. In the instant petition, the NLRC Decision finding the termination
of respondents illegal, had the effect of reversing Labor Arbiter Drilon's Decision dated 25 May 1999.

This Court sees no cogent reason as to the relevance of a discussion on whether or not reinstatement is self-executory.
However, since petitioner raised this issue, this Court has opted to discuss it. Verily, Article 223 of the Labor Code is not
applicable in the instant case. The said provision stipulates that the decision of the Labor Arbiter reinstating a dismissed
or separated employee, insofar as the reinstatement aspect is concerned, shall immediately be executory, even pending
appeal.

Petitioner contends that the statutory provision applicable is Article 224 of the Labor Code, as well as Rule III, Section
2(b) of the NLRC Manual on Execution of Judgment, because the case was decided on appeal. Furthermore, it is a
decision which is of a final and executory nature.

If the execution be for the reinstatement of any person to any position, office or employment, such writ shall be served
by the sheriff upon the losing party or upon any other person required by law to obey the same, and such party or
person may be punished for contempt if he disobeys such decisions, order for reinstatement.

The records of the case indicate that when Labor Arbiter Drilon issued its 25 May 1999 Decision, there was no order of
reinstatement yet although the dispositive portion of the Order issued by Labor Arbiter Pura already provided for
reinstatement or payment of separation pay

Art. 223 of the Labor Code provides that reinstatement is immediately executory even pending appeal only when the
Labor Arbiter himself ordered the reinstatement. In this case, the original Decision of Labor Arbiter Drilon did not order
reinstatement. Reinstatement in this case was actually ordered by the NLRC, affirmed by the Court of Appeals. The order
of Labor Arbiter Pura directing reinstatement was issued after the Court of Appeals Decision which affirmed the NLRC's
order of reinstatement. Thus, Art. 223 finds no application in the instant case. Considering that the order for
reinstatement was first decided upon appeal to the NLRC and affirmed with finality by the CA, petitioner rightly invoked
Art. 224 of the Labor Code. As contemplated by Article 224 of the Labor Code, the Secretary of Labor and Employment or
any Regional Director, the Commission or any Labor Arbiter, or med-arbiter or voluntary arbitrator may, motu proprio or
on motion of any interested party, issue a writ of execution on a judgment within five (5) years from the date it becomes
final and executory. Consequently, under Rule III of the NLRC Manual on the Execution of Judgment, it is provided that if
the execution be for the reinstatement of any person to a position, an office or an employment, such writ shall be served
by the sheriff upon the losing party or upon any other person required by law to obey the same, and such party or
person may be punished for contempt if he disobeys such decision or order for reinstatement.

However, as we can glean from the succeeding discussion, the above findings will not affect the award of backwages for
the period beyond 25 May 1999.

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Buenviaje v. CA, November 12, 2002

Doctrine: Employees who are illegally dismissed are entitled to full backwages, inclusive of allowances and other
benefits or their monetary equivalent, computed from the time their actual compensation was withheld from them up
to the time of their actual reinstatement. If reinstatement is no longer possible, the backwages shall be computed
from the time of their illegal termination up to the finality of the decision.

Facts: Petitioners were former promo girls of Cottonway Marketing for their garment products. Allegedly due
to business losses, their services were terminated. In October, 1994, petitioners filed a complaint illegal
dismissal, underpayment of salary, and non-payment of premium pay for rest day, service incentive leave pay
and thirteenth month pay against Cottonway and Network Fashion Inc./JCT International with the NLRC.
The LA found the retrenchment valid and ordering Cottonway to pay petitioners' separation pay and their
proportionate thirteenth month pay.
On appeal, the NLRC, reversed the Decision of the LA and ordered the reinstatement of petitioners without
loss of seniority rights and other privileges, along with payment of their proportionate thirteenth month pay
and their full backwages inclusive of allowances and other benefits, or their monetary equivalent computed
from the time their salaries were withheld from them up to the date of their actual reinstatement.
Cottonway filed a motion for reconsideration which was denied. Thereafter, Cottonway filed with the NLRC a
manifestation stating that they have complied with the order of reinstatement by sending notices requiring the
petitioners to return to work, but to no avail; and consequently, they sent letters to petitioners informing them
that they have lost their employment for failure to comply with the return to work order. Cottonway also filed
a petition for certiorari with the Supreme Court which was dismissed.
Thereafter, petitioners filed with the NLRC a motion for execution of its Decision on the ground that it had
become final and executory. The Commission ruled that its decision having become become final and
executory, it is the ministerial duty of the Labor Arbiter to issue the corresponding writ of execution to effect
full and unqualified implementation of said decision. The Commission thus ordered that the records of the
case be remanded to the Labor Arbiter for execution. Cottonway moved for reconsideration of said resolution,
to no avail.
Hence, Cottonway filed a petition for certiorari with the CA.The appellate court granted the petition ruling that
reinstatement was no longer possible as they deliberately refused to return to work despite the notice given by
Cottonway. The CA thus held that the amount of backwages due them should be computed only up to the time
they received their notice of termination.
Issue:
Whether or not Cottonway duly reinstated the petitioners thus the computation of the backwages should be limited
from the time they were illegally dismissed until they received the notice of termination sent by Cottonway —NO.

Ruling:
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Reinstatement restores the employee to the position from which he was removed, i.e., to his status quo ante
dismissal, while the grant of backwages allows the same employee to recover from the employer that which he
lost by way of wages because of his dismissal.
Under R.A. 6715, employees who are illegally dismissed are entitled to full backwages, inclusive of allowances
and other benefits or their monetary equivalent, computed from the time their actual compensation was
withheld from them up to the time of their actual reinstatement. If reinstatement is no longer possible, the
backwages shall be computed from the time of their illegal termination up to the finality of the decision.
The decision of the NLRC has become final and executory upon the dismissal by this Court of Cottonway’s
petition for certiorari assailing said decision and the denial of its motion for reconsideration.
Petitioners' alleged failure to return to work cannot be made the basis for their termination. Such failure does
not amount to abandonment which would justify the severance of their employment. To warrant a valid
dismissal on the ground of abandonment, the employer must prove the concurrence of two elements: (1) the
failure to report for work or absence without valid or justifiable reason, and (2) a clear intention to sever the
employer-employee relationship.
The facts of this case do not support the claim of Cottonway that petitioners have abandoned their desire to
return to their previous work at said company. It appears that three months after the NLRC had rendered its
decision ordering petitioners’ reinstatement to their former positions, Cottonway sent individual notices to
petitioners mandating them to immediately report to work.
The petitioners, however, were not able to promptly comply with the order. Instead, their counsel, sent a reply
letter stating that his clients were not in a position to comply with said order since the NLRC has not yet finally
disposed of the case. Consequently, Cottonway sent the petitioners individual notices of termination.
We note that Cottonway, before finally deciding to dispense with their services, did not give the petitioners the
opportunity to explain why they were not able to report to work. The records also do not bear any proof that
all the petitioners received a copy of the letters. Cottonway merely claimed that some of them have left the
country and some have found other employment. This, however, does not necessarily mean that petitioners
were no longer interested in resuming their employment at Cottonway as it has not been shown that their
employment in the other companies was permanent. It should be expected that petitioners would seek other
means of income to tide them over during the time that the legality of their termination is under litigation.
Furthermore, petitioners never abandoned their suit against Cottonway. While the case was pending appeal
before the NLRC, the Court of Appeals and this Court, petitioners continued to file pleadings to ensure that the
company would comply with the directive of the NLRC to reinstate them and to pay them full backwages in
case said decision is upheld. Moreover, in his reply to the company’s first letter, petitioners’ counsel expressed
willingness to meet with the company’s representative regarding the satisfaction of the NLRC decision.
It appears that the supposed notice sent by Cottonway to the petitioners demanding that they report back to
work immediately was only a scheme to remove the petitioners for good. Petitioners’ failure to
instantaneously abide by the directive gave them a convenient reason to dispense with their services. This the
Court cannot allow.
The law mandates the employer to either admit the dismissed employee back to work under the same terms
and conditions prevailing prior to his dismissal or to reinstate him in the payroll to abate further loss of income
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on the part of the employee during the pendency of the appeal. But we cannot stretch the language of the law
as to give the employer the right to remove an employee who fails to immediately comply with the
reinstatement order, especially when there is reasonable explanation for the failure. If Cottonway were really
sincere in its offer to immediately reinstate petitioners to their former positions, it should have given them
reasonable time to wind up their current preoccupation or at least to explain why they could not return to
work at Cottonway at once. Cottonway did not do either. Instead, it gave them only five days to report to their
posts and when the petitioners failed to do so, it lost no time in serving them their individual notices of
termination

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87. Pfizer Inc. v. Velasco, March 9, 2011
Doctrine:
The principle that reinstatement pending appeal necessitates that it must be immediately self-executory
without need for a writ of execution during the pendency of the appeal, if the law is to serve its noble purpose,
and any attempt on the part of the employer to evade or delay its execution should not be allowed.
An order for reinstatement entitles an employee to receive his accrued backwages from the moment the
reinstatement order was issued up to the date when the same was reversed by a higher court without fear of
refunding what he had received.
Facts:
Private respondent Geraldine L. Velasco was terminated from employment with petitioner PFIZER, INC. The
Labor Arbiter rendered its decision declaring the dismissal of Velasco illegal, ordering her reinstatement.
PFIZER appealed to the National Labor Relations Commission (NLRC) but its appeal was denied. The CA upheld
the validity of respondents dismissal from employment but ordered Pfizer to pay Velasco wages from the date
of the Labor Arbiters decision ordering her reinstatement until November 23, 2005, when the Court of Appeals
rendered its decision declaring Velasco's dismissal valid.
Issue:
Whether or not the Court of Appeals committed a serious but reversible error when it ordered Pfizer to pay
Velasco wages from the date of the Labor Arbiter’s decision ordering her reinstatement until November 23,
2005, when the Court of Appeals rendered its decision declaring Velasco’s dismissal valid.
Ruling:
No. The CA was correct when it ordered Pfizer to pay Velasco wages from the LA’s Decision of Reinstatement
until the CA’s Decision of valid Dismissal.
The provision of Article 223 is clear that an award [by the Labor Arbiter] for reinstatement shall be
immediately executory even pending appeal and the posting of a bond by the employer shall not stay the
execution for reinstatement. The legislative intent is quite obvious, i.e., to make an award of reinstatement
immediately enforceable, even pending appeal. To require the application for and issuance of a writ of
execution as prerequisites for the execution of a reinstatement award would certainly betray and run counter
to the very object and intent of Article 223, i.e., the immediate execution of a reinstatement order. The reason
is simple. An application for a writ of execution and its issuance could be delayed for numerous reasons. A
mere continuance or postponement of a scheduled hearing, for instance, or an inaction on the part of the
Labor Arbiter or the NLRC could easily delay the issuance of the writ thereby setting at naught the strict
mandate and noble purpose envisioned by Article 223. In other words, if the requirements of Article 224
[including the issuance of a writ of execution] were to govern, as we so declared in Maranaw, then the
executory nature of a reinstatement order or award contemplated by Article 223 will be unduly circumscribed
and rendered ineffectual. In enacting the law, the legislature is presumed to have ordained a valid and sensible
law, one which operates no further than may be necessary to achieve its specific purpose. Statutes, as a rule,
are to be construed in the light of the purpose to be achieved and the evil sought to be prevented. x x x In

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introducing a new rule on the reinstatement aspect of a labor decision under Republic Act No. 6715, Congress
should not be considered to be indulging in mere semantic exercise.
In the case at bar, PFIZER did not immediately admit respondent back to work which, according to the law,
should have been done as soon as an order or award of reinstatement is handed down by the Labor Arbiter
without need for the issuance of a writ of execution. Thus, respondent was entitled to the wages paid to her
under the aforementioned writ of execution. At most, PFIZER’s payment of the same can only be deemed
partial compliance/execution of the Court of Appeals Resolution dated October 23, 2006 and would not bar
respondent from being paid her wages from May 6, 2005 to November 23, 2005.

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88. Wenphil Corp. v. Abing, April 7, 2014

Doctrine:

Facts:
LA Ruled that Petitioner illegally dismissed Respondents and ordered that they be reinstated immediately even
while pending appeal.
Wenphil and the respondents entered into a compromise agreement before LA Bartolabac. They agreed to the
respondents’ payroll reinstatement while Wenphil’s appeal with the NLRC was ongoing. Wenphil also agreed to
pay the accumulated salaries of the respondents for the payroll period from April 5, 2001 until October 15,
2001. As for the remaining payroll period starting October 16, 2001, Wenphil committed itself to credit the
respective salaries of the respondents to their ATM payroll accounts until such time that the questioned
decision of LA Bartolabac is either modified, amended or reversed.
On appeal, the NLRC affirmed the LA Decision. Instead of reinstatement, they ordered Petitioner to pay
respondents their respective separation pay at the rate of one (1) month salary for every year of service.
CA reversed the decision and held that there was a valid dismissal, but ruled that even if the order of
reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory on the part of the employer to
reinstate and pay the dismissed employee’s wages during the period of appeal until reversal by the higher
court.
Wenphil claimed that the reliefs of reinstatement and backwages are only available to illegally dismissed
employees. A ruling that the respondents were still entitled to reinstatement pay notwithstanding the validity
of their dismissal, would amount to the court’s tolerance of an unjust and equitable situation.
Issue:
W/N Respondents are still entitled to reinstatement pay even if they were validly dismissed
Ruling:
An order of reinstatement is immediately executory even pending appeal. The employer has the obligation to
reinstate and pay the wages of the dismissed employee during the period of appeal until reversal by the higher
court.
Under Article 223 of the Labor Code, "the decision of the Labor Arbiter reinstating a dismissed or separated
employee, insofar as the reinstatement aspect is concerned, shall immediately be executory, even pending
appeal. The employee shall either be admitted back to work under the same terms and conditions prevailing
prior to his dismissal or separation, or at the option of the employer, merely reinstated in the payroll. The
posting of a bond by the employer shall not stay the execution for reinstatement."
In the case of payroll reinstatement, even if the employer’s appeal turns the tide in its favor, the reinstated
employee has no duty to return or reimburse the salary he received during the period that the lower court or
tribunal’s governing decision was for the employee’s illegal dismissal.
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Smart Communications v. Solidum, April 15, 2015
Doctrine:
Even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory on the part of the
employer to reinstate and pay the wages of the dismissed employee during the period of appeal until reversal
by the higher court

Facts:
On April 26,2004, Smart hired respondent Jose Leni Z. Solidum as Department Head for Smart Buddy
Activation. Smart Buddy Activation is under the Product Marketing Group which is headed by Isla. On
September 21, 2005, Isla gave Solidum a memorandum informing him of alleged acts of dishonesty, directing
him to explain why his employment should not be terminated, and placing him under preventive suspension
without pay for 30 days. On September 28, 2005, Solidum submitted his written explanation.
On October 22, 2005, Isla gave Solidum a memorandum informing him of a modified set of alleged acts of
dishonesty, directing him to explain why his employment should not be terminated, extending his preventive
suspension by 10 days, and inviting him to the administrative investigation. On November 11 2005, Isla gave
Solidum a memorandum terminating his employment "for fraud or willful breach of trust, falsification,
misrepresentation, conflict of interest, serious misconduct and dishonesty-related offenses. Solidum filed
against Smart a complaint for illegal dismissal, illegal suspension, non-payment of salaries, actual, moral and
exemplary damages, and attorney's fees. The Labor Arbiter found that Solidum's preventive suspension and
dismissal were illegal. The NLRC reversed the LA decision. While the CA upheld the NLRC decision.

Issue:
Whether Smart is obligated to pay Sodium Salaries and benefits computed from the date when respondents
received a copy of the Labor Arbiters Decision which ordered the reinstatement of complaint up to the date of
finality of the Commission's resolution reversing the Labor Arbiters Decision

Ruling:
Yes, in Bago vs NLRC the court held that employees are entitled to their accrued salaries, allowances, benefits,
incentives and bonuses, until the NLRC's reversal of the labor arbiter's order of reinstatement becomes final
and executor as shown on the entry of judgment.

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Manila Doctors College v. Oloroes, October 3, 2016

Doctrine: Under Article 223 (now Article 229) of the Labor Code, "the decision of the [LA] reinstating a
dismissed or separated employee, insofar as the reinstatement aspect is concerned, shall immediately be
executory, even pending appeal. The employee shall either be admitted back to work under the same terms
and conditions prevailing prior to his dismissal or separation or, at the option of the employer, merely
reinstated in the payroll. The posting of a bond by the employer shall not stay the execution for reinstatement .
. . ." Verily, the employer is duty-bound to reinstate the employee, failing which, the employer is liable instead
to pay the dismissed employee's salary.
Facts: Respondent was a faculty member of petitioner Manila Doctors College (MDC) assigned at the
Humanities Department of the College of Arts and Sciences. On June 7, 2010, he was dismissed for Grave
Misconduct, Gross Inefficiency, and Incompetence, after due investigation finding him guilty of employing a
grading system that was not in accordance with the guidelines set by MDC. Respondent lost no time in filing a
case for illegal dismissal, money claims, regularization, damages, and attorney's fees against petitioners.

Accordingly, LA ordered petitioners to reinstate respondent as faculty member under the same terms and
conditions of his employment, without loss of seniority rights, but denied payment of backwages on the
grounds that (1) no malice or bad faith attended respondent's dismissal, (2) respondent had showed disrespect
to his superior by writing a letter containing disrespectful remarks, and (3) respondent failed to inform or
discuss with said superior his decision to depart from the guidelines in giving grades. The LA specifically stated
that, "[MDC] is hereby ordered to reinstate [respondent] as faculty member under the same terms and
conditions of his employment, without loss of seniority rights but without backwages. However, instead of
being reinstated, [respondent] is hereby given the option to receive a separation pay equivalent to his full
month's pay for every year of service, a fraction of at least six months to be considered a full year or the
amount of P100,000.00 (his monthly salary of P20,000.00 multiplied by the equivalent of five years' service)."

Issue: Whether the LA's order of reinstatement is immediately executor, thus, the employer has to either
re-admit the employee to work under the same terms and conditions prevailing prior to his dismissal, or to
reinstate him in the payroll; and that even if such order of reinstatement is reversed on appeal, the employer is
still obliged to reinstate and pay the wages of the employee during the period of appeal until reversal by a
higher court or tribunal
Ruling: Under Article 223 (now Article 229) of the Labor Code, "the decision of the [LA] reinstating a dismissed
or separated employee, insofar as the reinstatement aspect is concerned, shall immediately be executory, even
pending appeal. The employee shall either be admitted back to work under the same terms and conditions
prevailing prior to his dismissal or separation or, at the option of the employer, merely reinstated in the payroll.
The posting of a bond by the employer shall not stay the execution for reinstatement . . . ." Verily, the
employer is duty-bound to reinstate the employee, failing which, the employer is liable instead to pay the
dismissed employee's salary.

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However, in the event that the LA's decision is reversed by a higher tribunal, the employer's duty to reinstate
the dismissed employee is effectively terminated. This means that an employer is no longer obliged to keep
the employee in the actual service or in the payroll. The employee, in turn, is not required to return the
wages that he had received prior to the reversal of the LA's decision. Notwithstanding the reversal of the
finding of illegal dismissal, an employer, who, despite the LA's order of reinstatement, did not reinstate the
employee during the pendency of the appeal up to the reversal by a higher tribunal may still be held liable
for the accrued wages of the employee, i.e., the unpaid salary accruing up to the time of the reversal. By way
of exception, an employee may be barred from collecting the accrued wages if shown that the delay in
enforcing the reinstatement pending appeal was without fault on the part of the employer.
In this case, petitioners contend that that they should not be faulted for failing to enforce the December 8,
2010 Decision of LA Amansec — which had given respondent the option to receive separation pay in lieu of
reinstatement — for the reason that it was respondent who failed to choose either relief. However, as
above-discussed, the reinstatement aspect of the LA's Decision is immediately executory and, hence, the
active duty to reinstate the employee — either actually or in payroll — devolves upon no other than the
employer, even pending appeal.

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VII. Article 230 (formerly Article 224)

Sy et. al., v. Fairland Knitcraft Co., December 12, 2011
Doctrine:

In labor cases, both the party and his counsel must be duly served their separate copies of the order, decision
or resolution unlike in ordinary proceedings where notice to counsel is deemed notice to the party. However,
for the purpose of computing the period for filing an appeal from the NLRC to the CA, same shall be counted
from receipt of the decision, order or award by the counsel of record pursuant to the established rule that
notice to counsel is notice to party. And since the period for filing of an appeal is reckoned from the counsel's
receipt of the decision, order or award, it necessarily follows that the reckoning period for their finality is
likewise the counsel's date of receipt thereof, if a party is represented by counsel.
Facts: Fairland is a domestic corporation engaged in garments business, while Susan de Leon is the
proprietress of Weesan Garments. On the other hand, the complaining workers are sewers, trimmers, helpers,
a guard and a secretary who were hired by Weesan. The workers filed with the Arbitration Branch of NLRC a
complaint for underpayment and/or- nonpayment of wages and claims for other monetary benefits against
Susan/Weesan, which they later amended to include illegal dismissal, after Weesan filed for temporary closure
with DOLE-NCR.
A Notice of Hearing was sent to Weesan requesting it to appear before LA Valentin Reyes. Weesan’s counsel,
Atty. Antonio Geronimo, requested on two occasions an extension of time to file the party’s position paper.
Later, he filed 2 separate position papers, one for Fairland and one for Susan/Weesan.
LA: Dismissed the consolidated complaints for lack of merit.
NLRC: On appeal, NLRC set aside the LA’s decision and held the workers were illegally dismissed. Atty.
Geronimo, counsel of Weesan, filed a Motion for Reconsideration. Fairland also filed a MR through Atty. Tecson
assailing the jurisdiction of the LA and NLRC, claiming it was never summoned to appear, attend, or participate
in all proceedings conducted therein. It also denied that it engaged the services of Atty. Geronimo. NLRC
denied both motions for lack of merit.
CA: Fairland filed a Petition for Certiorari and a Motion for Voluntary Inhibition against AJs Librea-Leagogo and
Maambong, which both granted, declaring the labor tribunals did not acquire jurisdiction over the person of
Fairland and that even if it did, Fairland is not liable to the workers since Weesan is not a mere labor-only
contract but an independent contractor. CA, on the other hand, dismissed Susan/Weesan’s petition.
Fairland Argument: It was never served with summons to appear in the proceedings before the LA nor
furnished copies of the LA’s Decision and Resolution on the workers’ complaints for illegal dismissal; that it
never voluntarily appeared before the labor tribunals through Atty. Geronimo; that it is a separate and distinct
business entity from Weesan; that Weesan is a legitimate job contractor, hence, the workers were actually its
employees; and that they have no cause of action.

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Worker’s Argument: The workers contend that the LA and the NLRC property acquired jurisdiction over the
person of Fairland because the latter voluntarily appeared and actively participated in the proceedings when
Atty. Geronimo submitted on its behalf a Position Paper verified by its manager, Debbie.
Issue: Whether or not the NLRC has jurisdiction over Fairland.
Ruling: YES. "It is basic that the Labor Arbiter cannot acquire jurisdiction over the person of the respondent
without the latter being served with summons." However, "if there is no valid service of summons, the court
can still acquire jurisdiction over the person of the defendant by virtue of the latter's voluntary appearance."
From the records, it appears that Atty. Geronimo first entered his appearance on behalf of Susan/Weesan in
the hearing held on April 3, 2003. Being then newly hired, he requested for an extension of time within which
to file a position paper for said respondents. On the next scheduled hearing on April 28, 2003, Atty. Geronimo
again asked for another extension to file a position paper for all the respondents considering that he likewise
entered his appearance for Fairland. Thereafter, said counsel filed pleadings such as Respondents' Position
Paper and Respondents' Consolidated Reply on behalf of all the respondents namely, Susan/Weesan, Fairland
and Debbie. The fact that Atty. Geronimo entered his appearance for Fairland and Debbie and that he actively
defended them before the Labor Arbiter raised the presumption that he is authorized to appear for them. As
held in Santos, it is unlikely that Atty. Geronimo would have been so irresponsible as to represent Fairland and
Debbie if he were not in fact authorized. As an officer of the Court, Atty. Geronimo is presumed to have acted
with due propriety.
In labor cases, both the party and his counsel must be duly served their separate copies of the order, decision or
resolution unlike in ordinary proceedings where notice to counsel is deemed notice to the party. Article 224
contemplates the furnishing of copies of final decisions, orders or awards both to the parties and their counsel
in connection with the execution of such final decisions, orders or awards. However, for the purpose of
computing the period for filing an appeal from the NLRC to the CA, same shall be counted from receipt of the
decision, order or award by the counsel of record pursuant to the established rule that notice to counsel is
notice to party. And since the period for filing of an appeal is reckoned from the counsel's receipt of the
decision, order or award, it necessarily follows that the reckoning period for their finality is likewise the
counsel's date of receipt thereof, if a party is represented by counsel. Hence, the date of receipt referred to in
Sec. 14, Rule VII of the then in force New Rules of Procedure of the NLRC which provides that decisions,
resolutions or orders of the NLRC shall become executory after 10 calendar days from receipt of the same,
refers to the date of receipt by counsel. Thus, contrary to the CA's conclusion, the said NLRC Decision became
final, as to Fairland, 10 calendar days after Atty. Tecson's receipt 107 thereof. In sum, the Labor Arbiter had
validly acquired jurisdiction over Fairland and its manager, Debbie, through the appearance of Atty. Geronimo
as their counsel and likewise, through the latter's filing of pleadings on their behalf.

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Yupangco Cotton Mills, Inc. v. CA, January 16, 2002
Doctrine:
The filing of a third party claim with the Labor Arbiter and the NLRC does not preclude a claimant from filing a
subsequent action for recovery of property and damages with the Regional Trial Court.

Facts:

Yupangco Cotton Mills Inc (Petitioner) alleged that a sheriff of the National Labor Relations Commission (NLRC)
erroneously levied upon certain properties which it claims ownership. As a consequence, it filed an adverse claim with
the NLRC, which was dismissed by the labor arbiter. The dismissal was appealed by the petitioner to the NLRC, but the
same was also dismissed for lack of merit. In the meantime, petitioner filed an original mandatory injunction with the
NLRC. While the injunction case was pending before the NLRC, petitioner filed a complaint for accion reivindicatoria with
the Regional Trial Court of Manila. The trial court dismissed the complaint, hence, petitioner brought the case to the
Court of Appeals. The Court of Appeals dismissed the petition on the ground of forum shopping and lack of jurisdiction.
Upon denial of the motion for reconsideration, the petitioner filed this appeal before the Supreme Court.

Issue:

Whether petitioner committed forum-shopping

Ruling:

No. There is forum-shopping when there is a party who asks different courts and/or administrative agencies to rule on
the same or related causes and/or grant the same or substantially the same reliefs, in the process creating the possibility
of conflicting decisions being rendered by the different for a upon the same issues. There is no forum-shopping where
two different orders were questioned, two distinct causes of action and issues were raised, and two objectives were
sought.

In the case at bar, there is no forum shopping because 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. 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. This finds
support in Section 17 (now 16), Rule 39, Revised Rules of Court.

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IBM Nestle v. Nestle Phils, September 23, 2015
Doctrine:
Compromise Agreements having been sanctioned by the court, it is entered as a determination of a
controversy and has the force and effect of a judgment. It is immediately executory and not appealable, except
for vices of consent or forgery.

Facts: Petitioner union staged a strike against herein respondent company's Ice Cream and Chilled Products
Division, citing, as grounds, respondent's alleged violation of the collective bargaining agreement (CBA),
dismissal of union officers and members, discrimination and other unfair labor practice (ULP) acts.

As a consequence, respondent filed with the National Labor Relations Commission (NLRC) a Petition for
Injunction with Prayer for Issuance of Temporary Restraining Order, Free Ingress and Egress Order, and
Deputization Order which was granted. Respondent filed a Petition to Declare Strike Illegal.

Department of Labor and Employment (DOLE) Acting Secretary, issued an Order assuming jurisdiction over the
strike and certifying the same to the NLRC.

Petitioner union filed a petition for certiorari with this Court, questioning the above order of the Acting DOLE
Secretary.

However, after a series of conciliation meetings and discussions between the parties, they agreed to resolve
their differences and came up with a compromise which was embodied in a Memorandum of Agreement
(MOA) dated August 4, 1998.

On August 6, 1998, the parties filed a Joint Motion to Dismiss stating that they are no longer interested in
pursuing the petition for injunction filed by respondent as a consequence of the settlement of their dispute.

On October 12, 1998, the NLRC issued its Decision approving the parties' compromise agreement and granting
their Joint Motion to Dismiss.

On January 25, 2010, or after a lapse of more than eleven (11) years from the time of execution of the subject
MO A, petitioners filed with the NLRC a Motion for Writ of Execution contending that they have not been paid
the amounts they are entitled to in accordance with the MOA.

Respondent filed its Opposition to the Motion for Writ of Execution contending that petitioners' remedy is
already barred by prescription because, under the 2005 Revised Rules of the NLRC, a decision or order may be
executed on motion within five (5) years from the date it becomes final and executory and that the same
decision or order may only be enforced by independent action within a period often (10) years from the date
of its finality.

NLRC RULING: NLRC promulgated its Resolution denying petitioners' application for the issuance of a writ of
execution on the ground of prescription.

CA RULING:CA issued the first of its questioned Resolutions dismissing petitioners' certiorari petition on the
ground that it is a wrong mode of appeal. The CA held that petitioners' appeal involves a pure question of law
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which should have been taken directly to this Court via a petition for review on certiorari under Rule 45 of the
Rules of Court.

PETITION TO THE SC: Petitioners' basic contention is that respondent cannot invoke the defense of prescription
because it is guilty of deliberately causing delay in paying petitioners' claims and that petitioners, on the other
hand, are entitled to protection under the law because they had been vigilant in exercising their right as
provided for under the subject MOA.

Issue: Whether or not petitioners' claim for payment is barred by prescription.

Ruling: YES. There is no dispute that the compromise agreement between herein petitioner union,
representing its officers and members, and respondent company was executed on August 4, 1998 and was
subsequently approved via the NLRC Decision dated October 12, 1998. However, considering petitioners'
allegation that the terms and conditions of the agreement have not been complied with by respondent,
petitioners should have moved for the issuance of a writ of execution.
It is wrong for petitioners' counsel to argue that since the NLRC Decision approving the parties' compromise
agreement was immediately executory, there was no need to file a motion for execution. It is settled that when
a compromise agreement is given judicial approval, it becomes more than a contract binding upon the parties.
Having been sanctioned by the court, it is entered as a determination of a controversy and has the force and
effect of a judgment. It is immediately executory and not appealable, except for vices of consent or forgery.
The non-fulfillment of its terms and conditions justifies the issuance of a writ of execution; in such an
instance, execution becomes a ministerial duty of the court. Stated differently, a decision on a compromise
agreement is final and executory. Such agreement has the force of law and is conclusive between the parties.
It transcends its identity as a mere contract binding only upon the parties thereto, as it becomes a judgment
that is subject to execution in accordance with the Rules.
It is clear from the law and rules that a judgment may be executed on motion within five years from the date
of its entry or from the date it becomes final and executory. After the lapse of such time, and before it is
barred by the statute of limitations, a judgment may be enforced by action. If the prevailing party fails to have
the decision enforced by a mere motion after the lapse of five years from the date of its entry (or from the
date it becomes final and executory), the said judgment is reduced to a mere right of action in favor of the
person whom it favors and must be enforced, as are all ordinary actions, by the institution of a complaint in a
regular form.
In the present case, the five-and ten-year periods provided by law and the rules are more than sufficient to
enable petitioners to enforce their right under the subject MOA. In this case, it is clear that the judgment of
the NLRC, having been based on a compromise embodied in a written contract, was immediately executory
upon its issuance on October 12, 1998. Thus, it could have been executed by motion within five (5) years. It
was not. Nonetheless, it could have been enforced by an independent action within the next five (5) years, or
within ten (10) years from the time the NLRC Decision was promulgated. It was not. Therefore, petitioners'
right to have the NLRC judgment executed by mere motion as well as their right of action to enforce the
same judgment had prescribed by the time they filed their Motion for Writ of Execution on January 25,
2010.

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It is true that there are instances in which this Court allowed execution by motion even after the lapse of five
years upon meritorious grounds. However, in instances when this Court allowed execution by motion even
after the lapse of five years, there is, invariably, only one recognized exception, i.e., when the delay is caused
or occasioned by actions of the judgment debtor and/or is incurred for his benefit or advantage. In the present
case, there is no indication that the delay in the execution of the MOA, as claimed by petitioners, was caused
by respondent nor was it incurred at its instance or for its benefit or advantage.

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Ando v. Campo, February 16, 2011

Doctrine: The power of the NLRC, or the courts, to execute its judgment extends only to properties
unquestionably belonging to the judgment debtor alone. A sheriff, therefore, has no authority to attach the
property of any person except that of the judgment debtor.

Facts: Before this Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court. Petitioner
Paquito V. Ando (petitioner) is assailing the Decision dated February 21, 2008 and the Resolution3 dated July
25, 2008 of the Court of Appeals (CA).
Petitioner was the president of Premier Allied and Contracting Services, Inc. (PACSI), an independent labor
contractor. Respondents were hired by PACSI as pilers or haulers tasked to manually carry bags of sugar from
the warehouse of Victorias Milling Company and load them on trucks. In June 1998, respondents were
dismissed from employment. They filed a case for illegal dismissal and some money claims with the National
Labor Relations Commission (NLRC), Regional Arbitration Branch No. VI, Bacolod City.

Ruling of the Labor Arbiter:

On June 14, 2001, Labor Arbiter Phibun D. Pura (Labor Arbiter) promulgated a decision, ruling in
respondents’ favor. PACSI and petitioner were directed to pay a total of ₱422,702.28, representing
respondents’ separation pay and the award of attorney’s fees.

Ruling of the NLRC:

dated October 20, 2004, the NLRC ruled that petitioner failed to perfect his appeal because he did not pay
the supersedeas bond. It also affirmed the Labor Arbiter’s decision with modification of the award for
separation pay to four other employees who were similarly situated. Upon finality of the decision,
respondents moved for its execution.

Ruling of the RTC:

On December 27, 2006, the RTC issued an Order12 denying the prayer for a TRO, holding that the trial court
had no jurisdiction to try and decide the case. The RTC ruled that, pursuant to the NLRC Manual on the
Execution of Judgment, petitioner’s remedy was to file a third-party claim with the NLRC Sheriff. Despite lack
of jurisdiction, however, the RTC went on to decide the merits of the case

Ruling of the CA:

CA affirmed the RTC Order in so far as it dismissed the complaint on the ground that it had no jurisdiction
over the case, and nullified all other pronouncements in the same Order. Petitioner moved for
reconsideration, but the motion was denied.

Issue: Whether or not the Judgment of execution against the personal property was proper.

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Held: No. The SC held that the decision of the CA is reversed and set aside and declared NULL and VOID the
order of the RTC as well as the notice of sale on the personal property. The power of the NLRC, or the courts,
to execute its judgment extends only to properties unquestionably belonging to the judgment debtor alone. A
sheriff, therefore, has no authority to attach the property of any person except that of the judgment debtor.
Likewise, there is no showing that the sheriff ever tried to execute on the properties of the corporation.

The NLRC Manual on the Execution of Judgment deals specifically with third-party claims in cases brought
before that body. It defines a third-party claim as one where a person, not a party to the case, asserts title to
or right to the possession of the property levied upon. It also sets out the procedure for the filing of a
third-party claim, to wit:
SECTION 2. Proceedings. — If property levied upon be claimed by any person other than the losing party or his
agent, such person shall make an affidavit of his title thereto or right to the possession thereof, stating the
grounds of such right or title and shall file the same with the sheriff and copies thereof served upon the Labor
Arbiter or proper officer issuing the writ and upon the prevailing party. Upon receipt of the third party claim,
all proceedings with respect to the execution of the property subject of the third party claim shall
automatically be suspended and the Labor Arbiter or proper officer issuing the writ shall conduct a hearing
with due notice to all parties concerned and resolve the validity of the claim within ten (10) working days from
receipt thereof and his decision is appealable to the Commission within ten (10) working days from notice, and
the Commission shall resolve the appeal within same period.
There is no doubt in our mind that petitioner’s complaint is a third- party claim within the cognizance of the
NLRC. Petitioner may indeed be considered a "third party" in relation to the property subject of the execution
vis-à-vis the Labor Arbiter’s decision. There is no question that the property belongs to petitioner and his
wife, and not to the corporation. It can be said that the property belongs to the conjugal partnership, not to
petitioner alone. Thus, the property belongs to a third party, i.e., the conjugal partnership. At the very least,
the Court can consider that petitioner’s wife is a third party within contemplation of the law.

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PAL v. Bichara, September 2, 2015
Doctrine: Jurisprudence holds that courts may modify or alter the judgment to harmonize the same with
justice and the facts when after judgment has been rendered and the latter has become final, facts and
circumstances transpire which render its execution impossible or unjust, as in this case.
Facts: Bichara, PAL’s flight attendant, was included in PAL’s Purser Upgrading Program in which he graduated on
December 13, 1993. As flight purser, he was required to take 5 check rides for his performance evaluation and
earn at least an 85% rating for each ride. However, Bichara failed in the 2 check rides, so he was demoted to
the position of flight steward. Bichara appealed but no action was taken, so he filed a complaint for illegal
demotion against PAL before the NLRC. LA Nora declared Bichara’s demotion as illegal and ordered PAL to
reinstate him to his position as flight purser. PAL appealed before the NLRC and later before the CA, both of
which, however, upheld LA Nora's finding. PAL no longer appealed to the Court, thus, it rendered the June 16,
1997 Decision final and executory on February 5, 2004.
During the pendency of the illegal demotion case before the CA, PAL implemented another retrenchment
program that resulted in the termination of Bichara's employment, prompting him to file an illegal
retrenchment case (FASAP case) which remains pending as of this time. On January 31, 2008, Bichara filed a
motion for execution of LA Nora's June 16, 1997 Decision, which PAL opposed by arguing that the complaint
for illegal demotion was overtaken by supervening events, i.e., the retrenchment of Bichara in 1998 and his
having reached the compulsory retirement age in 2005.
LA Macam granted Bichara's motion, declaring that notwithstanding the pendency before this Court of the
FASAP case, Bichara's termination was invalid. However, since Bichara may no longer be reinstated in view of
his compulsory retirement in accordance with the CBA, LA Macam, instead, ordered PAL to pay Bichara
separation pay with the salary base of a flight purser. NLRC reversed and set aside LA Macam’s Order and
denied the motion for being moot and academic, considering Bichara's compulsory retirement in 2005,
without prejudice to the latter's entitlement to backwages and retirement benefits. NLRC concluded that the
matter of payment of monetary benefits is not for it to order since it is a relief pertaining to the pending FASAP
case; as such, Bichara should pursue payment of backwages when the decision in the FASAP case is due for
execution. In this relation, the NLRC remarked that LA Macam exceeded his authority in awarding separation
pay in lieu of reinstatement, since such relief is not contemplated in the decision sought to be executed. CA
reversed and set aside the NLRC's ruling. The CA, however, observed that since Bichara was one of the
retrenched employees involved in the FASAP case, instead of separation pay, Bichara is entitled to backwages
from the time of his retrenchment up to the time he reached the compulsory retirement age of 60. In addition,
since the decision rendered in the illegal demotion case had already become final and executory, he is entitled
to salary differentials of a flight purser from a flight attendant from the date of his demotion up to the time of
his retrenchment. He is also entitled to retirement benefits in accordance with the existing CBA at the time of
his retirement.
Issue: W/N the CA erred in reversing the NLRC's Decision and thereby awarding Bichara the aforementioned
monetary awards
Ruling: In view of the supervening events, this Court deems the award of salary differential to be the just and
equitable award under the circumstances herein prevailing. A judgment should be implemented according to
the terms of its dispositive portion is a long and well-established rule. As such, where the writ of execution is
not in harmony with and exceeds the judgment which gives it life, the writ has pro tanto no validity. A
companion to this rule is the principle of immutability of final judgments, which states that a final judgment
may no longer be altered, amended or modified, even if the alteration, amendment or modification is meant
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to correct what is perceived to be an erroneous conclusion of fact or law and regardless of what court renders
it. But like any other rule, this principle has exceptions, namely: (1) the correction of clerical errors; (2) the
so-called nunc pro tunc entries which cause no prejudice to any party; (3) void judgments; and (4) whenever
circumstances transpire after the finality of the decision rendering its execution unjust and inequitable.
PAL's supervening retrenchment of its employees, which included Bichara, and his compulsory retirement,
prevent the enforcement of the reinstatement of Bichara to the position of flight purser. Nonetheless, since
this Decision had already settled the illegality of Bichara's demotion with finality, this Court finds that Bichara
should, instead, be awarded the salary differential of a flight purser from a flight steward from the time of his
illegal demotion up until the time he was retrenched.
Further, it should be pointed out that the principle of immutability of judgments, from which the above-stated
rule on writ of executions proceed, allow courts, as an exception, to recognize circumstances that transpire
after the finality of the decision which would render its execution unjust and inequitable and act accordingly.
Jurisprudence holds that courts may modify or alter the judgment to harmonize the same with justice and the
facts when after judgment has been rendered and the latter has become final, facts and circumstances
transpire which render its execution impossible or unjust, as in this case.

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Guillermo v. Uson, March 7, 2016
Doctrine: The veil of corporate fiction can be pierced, and responsible corporate directors and officers or even
a separate but related corporation, may be impleaded and held answerable solidarily in a labor case, even
after final judgment and on execution, so long as it is established that such persons have deliberately used the
corporate vehicle to unjustly evade the judgment obligation, or have resorted to fraud, bad faith or malice in
doing so.
Facts: Respondent filed a complaint of illegal dismissal against Royal Class Venture. However, despite its receipt
of summons, it did not make an appearance., prompting the LA to decide in favor of respondent. Royal Class
did not filed an appeal of the decision, making the decision final, but, even after two writs of execution were
issued the decision remained unsatisfied. The Sheriff’s return stated that the place of serving the summons is
not in the name of Royal Venture but in the name of Joel and Sons Corp., owned by the Guillermos, of which,
petitioner is the General Manager, that it was petitioner who received the writ’s using his nickname “Joey”,
concealing his true identity, and that Royal Venture has been dissolved. Respondent then filed a Motion for
Alias Writ of Execution and to Hold Directors and Officers of Respondent Liable for Satisfaction of the Decision.

LA Ruling: The LA granted the motion of respondent and pierced the veil of corporate fiction of Royal Class
holding petitioner, in his personal capacity, jointly and severally liable with the corporation for the
enforcement of the claims. A subsequent Writ of Execution was thereafter issued.

NLRC Ruling: The NLRC dismissed the appeal of petitioner and affirmed the LA.

CA: The CA dismissed the appeal of petitioner and upheld all the findings of the NLRC.

Issue: 1. Whether an officer of a corporation may be included as judgment obligor in a labor case for the first
time only after the decision of the LA had become final and executory. - YES
2. Whether the doctrine of “piercing the veil of corporate fiction” and “personal liability of officers in labor
cases” is applicable in this case. - YES
Ruling: 1. YES. Liability attaches, especially to the responsible officers, even after final judgment and during
execution, when there was a failure to collect from the employer corporation the judgment debt awarded to
its workers. The veil of corporate fiction was pierced at the stage of execution, against a corporation not
previously impleaded, when it was established that such corporation had dominant control of the original
party corporation.

2. YES. The doctrine of piercing the corporate veil is held to apply only in three (3) basic areas, namely: (1)
defeat of public convenience as when the corporate fiction is used as a vehicle for the evasion of an existing
obligation; (2) fraud cases or when the corporate entity is used to justify a wrong, protect fraud, or defend a
crime; or (3) alter ego cases, where a corporation is merely a farce since it is a mere alter ego or business
conduit of a person, or where the corporation is so organized and controlled and its affairs are so conducted as
to make it merely an instrumentality, agency, conduit or adjunct of another corporation. In the absence of
malice, bad faith, or a specific provision of law making a corporate officer liable, such corporate officer cannot
be made personally liable for corporate liabilities. Personal liability attaches only when, as enumerated by the
said Section 31 of the Corporation Code, there is a willful and knowing assent to patently unlawful acts of the
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corporation, there is gross negligence or bad faith in directing the affairs of the corporation, or there is a
conflict of interest resulting in damages to the corporation. It also bears emphasis that in cases where personal
liability attaches, not even all officers are made accountable. Rather, only the "responsible officer," i.e., the
person directly responsible for and who "acted in bad faith" in committing the illegal dismissal or any act
violative of the Labor Code, is held solidarily liable, in cases where in the corporate veil is pierced. The key
element is the presence of fraud, malice or bad faith. The records of the present case bear allegations and
evidence that Guillermo, the officer being held liable, is the person responsible in the actual running of the
company and for the malicious and illegal dismissal of the complainant; he, likewise, was shown to have a role
in dissolving the original obligor company in an obvious "scheme to avoid liability" which jurisprudence has
always looked upon with a suspicious eye in order to protect the rights of labor. Part of the evidence on record
where it was clearly alleged that Uson was "illegally dismissed by Guillermo when Uson exposed the practice
of dictating and undervaluing the shares of stock of the corporation." The foregoing clearly indicate a pattern
or scheme to avoid the obligations to Uson and frustrate the execution of the judgment award, which this
Court, in the interest of justice, will not countenance.

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Dutch Movers Inc. v. Lequin et al, April 25, 2017 (Piercing the veil of
corporate fiction)
Doctrine: A corporation has a separate and distinct personality from its stockholders, and from other
corporations it may be connected with. However, such personality may be disregarded, or the veil of corporate
fiction may be pierced attaching personal liability against responsible person if the corporation's personality "is
used to defeat public convenience, justify wrong, protect fraud or defend crime, or is used as a device to
defeat the labor laws. ” Also, piercing the veil of corporate fiction is allowed where a corporation is a mere
alter ego or a conduit of a person, or another corporation.

Facts: Petitioner Dutch Movers Inc., was a domestic corporation, with Petitioners Cesar Lee and Yolanda Lee as
President and Manager respectively, hired respondents Lequin as a driver, and Salvador, Singsing, and
Mascardo as helpers. Petitioner allegedly notified the respondents that DMI were ceasing their hauling
operations without any reason, and respondents requested for a formal notice regarding the matter, but they
were left unheeded. As such, respondents filed an illegal dismissal case.

LA dismissed the complaint, but the NLRC reversed, stating that petitioners placed the respondents in stand by
without giving them work. Respondents filed a motion for the issuance of a writ of execution, but they found
out that petitioner Dutch Movers were no longer in operation. They nonetheless impleaded Cesar and Yolanda
as they were owners of the corporation. They also noted the fact that no notice of business closure was ever
filed with the SEC, and the directors listed in the Articles of Incorporation of the business were unknown to the
respondents, therefore supposedly evincing fraud by petitioners.

Issue: Whether Cesar Lee and Yolanda Lee were personally held liable. YES.

Ruling: The Court clarified that while a corporation is a separate and distinct entity from its stockholders, such
personality may be disregarded and liability may attach to persons if, among other things, the corporation’s
personality was used to protect fraud, or were used to defeat labor laws. This is known as the doctrine of
piercing the corporate veil.

Here, the SC noted that Cesar and Yolanda were the owners and manager of the business, such that they were
the ones who seemed to have personal knowledge of the dismissal of respondents, and that they were
categorically identified to be said owners and they never denied such claim in any pleading submitted for trial.

Hence, the corporate veil was pierced and personal liability was attached to Cesar and Yolanda.

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Genuino Agro v. Romano, September 18, 2019 (Piercing the veil of
corporate fiction)
Doctrine

Facts

Romano, Cabrera, and Sarmiento (Private Respondents) claimed that they work as brine men at Genuino Ice Company.
One day, they were told their employment was terminated. They then filed a complaint for illegal dismissal.

Genuino Ice then argue that due to the continuous and tremendous decline in the demand for ice products being
produced by the petitioner, it shut down its block ice production plant facilities. Among those affected were the
respondents who were relieved from their posts.

The Labor Arbiter made a decision in favor of the respondents. This decision was affirmed by the NLRC and the CA. This
prompted the petitioner to file a case with the SC.

Respondents filed their Comment with Motion thereto, praying that Genuino Ice be declared solidarily liable with the
petitioner to pay respondents the monetary awards granted to them.

Regarding the motion, the petitioner avers that the same has no factual and legal basis because Genuino Ice is not a
party in this case. Respondents counter that the petitioner is raising the very same grounds it raised before the CA, and
this Court in Genuino Ice Company, Inc. v. Lava has resolved exactly the same issues and exactly the same facts involving
co-employees of the respondents against Genuino Ice, where the latter was found guilty of illegal dismissal.

Issue

Can Genuino Ice Company be held solidarily liable with Genuino Argo Dev. Corp. for the payment of awards.

Ruling

Yes. It is a fundamental principle of corporation law that a corporation is an artificial being invested by law with a
personality separate and distinct from its stockholders and from other corporations to which it may be connected.

However, the corporate mask may be lifted and the corporate veil may be pierced when a corporation is just the alter
ego of a person or of another corporation. The doctrine of piercing the corporate veil applies in three (3) basic areas,
namely: (1) defeat of public convenience as when the corporate fiction is used as a vehicle for the evasion of an existing
obligation; (2) fraud cases or when the corporate entity is used to justify a wrong, protect fraud, or defend a crime; or (3)
alter ego cases, where a corporation is merely a farce since it is a mere alter ego or business conduit of a person, or
where the corporation is so organized and controlled and its affairs are so conducted as to make it merely an
instrumentality, agency, conduit or adjunct of another corporation.

Furthermore, once the veil of corporate fiction is pierced, the separate but related corporation becomes solidarily liable
in labor cases.

Thus, for purposes of determining whether to pierce Genuino Ice's separate corporate personality and hold it
solidarily liable with the petitioner to pay the monetary claims due to the respondents, the following factual
circumstances have to be considered:
(1) Petitioner and its supposed affiliate Genuino Ice have the same address, sets of officers, and representative
to this suit.
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(2) The Calamba City ice plant where respondents used to work appears to be owned and operated by both
the petitioner and Genuino Ice.
(3) Genuino Ice, after being sued for illegal dismissal before the Labor Arbiter, claimed that the respondents
were actually employees of its affiliate company, which is the petitioner.
The circumstances indubitably establish that both Genuino Ice and the petitioner are using their respective
distinct corporate personalities in bad faith and to confuse legitimate issues in the hope of evading its
obligation to the respondents.

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Carag v. NLRC, April 2, 2007
DOCTRINE: It is true that Labor Arbiters are not bound by strict rules of evidence and of procedure. The
manner by which Arbiters dispose of cases before them is concededly a matter of discretion. However, that
discretion must be exercised regularly, legally and within the confines of due process. They are mandated to
use every reasonable means to ascertain the facts of each case, speedily, objectively and without regard to
technicalities of law or procedure, all in the interest of justice and for the purpose of accuracy and correctness
in adjudicating the monetary awards.
FACTS: Respondents National Federation of Labor Unions (NAFLU) and Mariveles Apparel Corporation Labor
Union (MACLU) filed a complaint against Mariveles Apparel Corporation (MAC) for illegal dismissal brought
about by its illegal closure of business. Respondent Labor Arbiter Ortiguerra summoned the complainants and
MAC to a conference for possible settlement. However, employer MAC did not appear. In her Decision, Arbiter
Ortiguerra granted complainants' motion to implead Carag (MAC’s Chairman of the Board) and at the same
time, in the same Decision, found Carag personally liable for the debts of MAC consisting of ₱49,101,621 in
separation pay to complainants.
Arbiter Ortiguerra never issued summons to Carag, never called him to a conference for possible settlement,
never required him to submit a position paper, never set the case for hearing, never notified him to present his
evidence, and never informed him that the case was submitted for decision - all in violation of Sections 2, 3, 4,
5(b), and 11(c) of Rule V of The New Rules of Procedure of the NLRC.
ISSUE: W/N Carag was denied due process at the arbitration level.
RULING: The Supreme Court held in the affirmative. There was an absence of opportunity to be heard at the
arbitration level, as the procedure adopted by the Labor Arbiter prevented private respondents from
explaining matters fully and presenting their side of the controversy. They had no chance whatsoever to at
least acquaint the Labor Arbiter with whatever defenses they might have to the charge that they illegally
dismissed petitioner.
In fact, private respondents presented their position paper and documentary evidence only for the first time
on appeal to the NLRC. The essence of due process is that a party be afforded a reasonable opportunity to be
heard and to submit any evidence he may have in support of his defense. Where, as in this case, sufficient
opportunity to be heard either through oral arguments or position paper and other pleadings is not accorded a
party to a case, there is undoubtedly a denial of due process. It is true that Labor Arbiters are not bound by
strict rules of evidence and of procedure. The manner by which Arbiters dispose of cases before them is
concededly a matter of discretion. However, that discretion must be exercised regularly, legally and within the
confines of due process. They are mandated to use every reasonable means to ascertain the facts of each case,
speedily, objectively and without regard to technicalities of law or procedure, all in the interest of justice and
for the purpose of accuracy and correctness in adjudicating the monetary awards.
Here, Carag was not issued summons, not accorded a conciliatory conference, not ordered to submit a position
paper, not accorded a hearing, not given an opportunity to present his evidence, and not notified that the case
was submitted for resolution. Thus, we hold that Arbiter Ortiguerra's Decision is void as against Carag for utter
absence of due process. It was error for the NLRC and the Court of Appeals to uphold Arbiter Ortiguerra's
decision as against Carag.

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Roca v. Dabuyan, March 5, 2018
Doctrine: Contracts take effect only between the parties, their assigns and heirs, except in case where the
rights and obligations arising from the contract are not transmissible by their nature, or by stipulation or by
provision of law." The contract of employment between respondents, on the one hand, and Oceanic and
Ewayan on the other, is effective only between them; it does not extend to petitioner, who is not a party
thereto. His only role is as lessor of the premises which Oceanic leased to operate as a hotel; he cannot be
deemed as respondent's employer -not even under the pretext that he took over as the "new management" of
the hotel operated by Oceanic.

Facts: In 2012 respondents Eduardo Dabuyan, Jennifer Branzuela, Jennylyn A. Ricarte, and Herminigildo
Sabanate filed a complaint for illegal dismissal against “RAF Mansion Hotel Old Management and New
Management and Victoriano Ewayan." Respondents later amended the complaint and included petitioner
Rolando De Roca, owner of the RAF Mansion Hotel (building itself) as co-respondent.
Summons was sent via registered mail to petitioner but it was returned. A preliminary conference was set but
only respondents attended. Thus, another summons was issued and personally served to petitioner by the
bailiff of the NLRC as evidenced by the latter's return dated 14 March 2012. Despite service of summons,
petitioner did not attend the subsequent hearings prompting the labor arbiter to direct private respondents to
submit their position paper. On 18 April 2012, private respondents submitted their position paper.
On the same day, petitioner filed his motion to dismiss on the ground of lack of jurisdiction. He alleged that
while he was the owner of RAF Mansion Hotel building, the same was being leased by Victoriano Ewayan, the
owner of Oceanics Travel and Tour Agency. Petitioner claims that Ewayan was the employer of private
respondents, Consequently, he asserted that there was no employer-employee relationship between him and
private respondents and the labor arbiter had no jurisdiction.
LA RULING: Rendered a decision in favor of respondents. Ordered petitioner to pay backwages. In the same
decision, it also denied the motion to dismiss for being filed beyond the reglementary period.
Instead, however, of filing an appeal with the NLRC, petitioner filed a petition for annulment of judgment on
the ground of lack of jurisdiction given that he isn’t the employer of the respondents, and that no
employer-employee relationship exists between them.
NLRC RULING: Petition dismissed for being filed beyond the 10-day reglementary period.
Petitioner then filed a petition for certiorari with the CA where he argued, among others, that he was never an
employer of the respondents, as he was merely the owner of the premises which were leased out to and
occupied by respondents' true employer, Victoriano Ewayan (Ewayan), who owned Oceanic Travel and Tours
Agency which operated the RAF Mansion Hotel where respondents were employed as cook, waitress, and
housekeeper; and that his inclusion in the labor case was borne of malice which is shown by the fact that when
the labor complaint was filed, he was not originally impleaded as a respondent, and was made so only after
respondents discovered that their employer had already absconded -in which case he was impleaded under
the pretext that he constituted the "new management of RAF Mansion Hotel".

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CA RULING: Dismissed the petition, ruled only on the procedural aspect (timeliness of the motion to dismiss,
and petition of annulment of judgment). It held that petitioner’s allegations in the petition for certiorari cannot
be entertained considering that he already lost his chance to submit his position paper early on and to
entertain such allegations now would be unfair.
Petitioner then filed the instant petition assailing the CA decision.
In their Comment to the petition, respondents argue that the petition should be denied for lack of merit; that
the CA's dispositions are just and correct; that the issue in this case does not involve the merits of the labor
arbiter's decision, but merely the propriety of the NLRC's dismissal of petitioner's petition for annulment of
judgment; that nonetheless, they have satisfactorily proved below that petitioner is their employer, by the
evidence they submitted -consisting of identification cards (IDs) issued to them and signed by Ewayan, and pay
envelopes and advise slips showing their salaries as the basis for their claims; that since petitioner owned the
building which was a hotel, it follows that he is their employer; that since he is their employer, the labor arbiter
acquired jurisdiction over him; and that since the decision of the labor arbiter on the merits became final and
executory for petitioner's failure to appeal the same, the same may no longer be impugned.

Issue: Whether petitioner should be held liable for respondents’ claims?

Ruling: NO. In support of his claim, petitioner submitted the following evidence: 1.) lease agreement between
Oceanic Tours and Travel Agency (Oceanic) represented by Ewayan through his attorney-in-fact Marilou
Buenafe, 2.) A January 23, 2012 letter of demand to pay and vacate sent to Ewayan, directing the latter's
attention to previous demand letters sent to him and making a final demand to pay rentals in arrears; and 3.) a
written waiver and acknowledgment executed by respondents -except respondent Herrninigildo Sabanate -and
other Oceanic employees to the effect that petitioner should not be held liable as owner of the premises for
the "problems" caused by Ewayan.
Thus, it would appear from the on record and the evidence that petitioner's building was an existing hotel
called the "'RAF Mansion Hotel", which Oceanic agreed to continue to operate under the same name. There is
no connection between petitioner and Oceanic other than through the lease agreement executed by them;
they are not partners in the operation of RAF Mansion Hotel. It just so happens that Oceanic decided to
continue operating the hotel using the original name -"RAF Mansion Hotel".
The only claim respondents have in resorting to implead petitioner as a co-respondent in the labor case is the
fact that he is the owner of the entire building called "RAF Mansion Hotel" which happens to be the very same
name of the hotel which Ewayan and Oceanic continued to adopt, for reasons not evident in the pleadings. It
must be noted as well that when they originally filed the labor case, respondents did not include petitioner as
respondent therein. It was only later on that they moved to amend their complaint, impleading petitioner and
thus amending the title of the case to "x xx, Complainants, versus RAF Mansion Hotel Old Management and
New Management/Victoriano Ewayan and Rolando De Roca, Respondents."
As correctly observed by petitioner, such belated attempt to implead him in the labor case must be seen as an
afterthought. Moreover, the fact that respondents recognize petitioner as embodying the "new management"
of RAF Mansion Hotel betrays an admission on their part that he had no hand in the "old management" of the
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hotel under Ewayan, during which they were hired and maintained as hotel employees -meaning that
petitioner was never considered as Ewayan's partner and co-employer; respondents merely viewing petitioner
as the subsequent manager taking over from Ewayan, which bolsters petitioner’s allegation that Ewayan had
absconded and left respondents without recourse other than to implead him as the "new management" upon
whom the obligation to settle the claims abandoned by Ewayan now fell.
Contracts take effect only between the parties, their assigns and heirs, except in case where the rights and
obligations arising from the contract are not transmissible by their nature, or by stipulation or by provision of
law." The contract of employment between respondents, on the one hand, and Oceanic and Ewayan on the
other, is effective only between them; it does not extend to petitioner, who is not a party thereto. His only role
is as lessor of the premises which Oceanic leased to operate as a hotel; he cannot be deemed as respondent's
employer -not even under the pretext that he took over as the "new management" of the hotel operated by
Oceanic. Petitioner therefore cannot be held liable over respondents’ claim.

Other Notes/ SC Pronouncements:

Decision did not directly tackled the issue of liability of new management, with the SC resolving it through an
examination of the facts and evidence presented.

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Fernandez et. al. v. NewfieldStaff Solution, July 10, 2013
Doctrine: Abandonment is a form of neglect of duty, one of the just causes for an employer to terminate an
employee. For abandonment to exist, two factors must be present:

(1) the failure to report for work or absence without valid or justifiable reason; and

(2) a clear intention to sever the employer-employee relationship, with the second element as the more
determinative factor being manifested by some overt acts.
Facts: Respondent hired herein petitioner Hernandez as Recruitment Manager starting Sept. 30, 2008 with a
salary of P50,000, and an allowance of P6,000. While, petitioner Beltran was hired as recruitment specialist.
Both petitioners guaranteed to perform their tasks for 6 months and breach would make them liable for
P45,000.

On October 17, 2008, herein respondent Lopez who was Newfield’s general manager terminated the
employment of the petitioners on the ground of failure to perform satisfactorily, and was ordered to turn over
their records to their successors. A week later, both petitioners received return to work letters stating that they
did not report since October 20, without resigning. Both respondents countered with a demand letter claiming
unpaid salary and other expenses in furtherance of Newfield’s business. When the respondents did not
respond favorably, herein petitioners filed a complaint for illegal dismissal, non-payment of salary and
overtime pay, reimbursement of cell-phone billing and moral and exemplary damages and attorney’s fees.

The Labor Arbiter ruled that petitioner’s dismissal was illegal as petitioners cannot be said to have abandoned
their work since they took steps to protest their layoff, and such complaint is proof of their desire to return to
work. The NLRC likewise affirmed the Labor Arbiter’s decision, but ruled that since petitioners signed
fixed-term employment agreements, the NLRC limited the award of back wages to 6 months.

Upon respondents’ appeal, the CA reversed the decision of the NLRC and dismissed the complaint for illegal
dismissal ruling that petitioners abandoned their jobs as they walked out after their meeting with respondent
Lopez when they were advised of their unsatisfactory performance, and instead of reporting for work, they
demanded payment of wages and other expenses.

Petitioners argue that for dismissal to be valid there must be a just or authorized cause and due process must
be observed. But respondents terminated their employment on October 17, 2008 when Lopez, Jr. asked them
to come to his office, fired them and ordered them to turn over the records to their successors. They were
dismissed without any written notice informing them of the cause for their termination.
Issue: Whether the Court of Appeals erred in reversing the NLRC ruling
Ruling: The Supreme Court held that the CA erred in reversing the NLRC decision and in ruling that the
petitioners abandoned their jobs.

The Supreme Court noted that the petitioner’s employment agreements are not fixed term contracts due to
the payment of bonuses, benefits such as life insurance upon reaching 6 months of employment, and a salary
increase upon reaching 12 months of employment with Newfield. Therefore, herein petitioners are not

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fixed-term employees but are probationary employees. Under the law, a probationary employee may be
terminated for a just or authorized cause, such as abandonment. For abandonment to exist, two factors must
be present, namely (1) failure to report for work or absence without valid or justifiable reason, and (2) clear
intention to server the employer-employee relationship manifested by overt acts.

In this case, petitioners are not guilty of abandonment since both factors are not present. For the first factor,
petitioners were absent because Lopez Jr. fired them. In the second, petitioner’s protest their dismissal by
sending demand letters and filling a complaint for illegal dismissal with a prayer for reinstatement evidencing
petitioners have no intention to sever the employer-employee relationship. Therefore, the Supreme Court
reversed and set aside the decision of the CA and upheld the ruling of the NLRC.

In connection to this, the SC likewise ruled that there was no just cause for their dismissal, they are considered
as illegally dismissed.

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VIII. Reliefs against judgments/ decisions rendered by

the Commission Petition for Certiorari under Rule 65
St. Martin Funeral Homes v. NLRC, September 16, 1998
Doctrine: All supposed appeals from the NLRC to the Supreme Court are interpreted and hereby declared to
mean and refer to petitions for certiorari under Rule 65. Consequently, all such petitions should be initially
filed in the Court of Appeals in strict observance of the doctrine on the hierarchy of courts as the appropriate
forum for the relief desired.
Facts: Private respondent, Bienvenido Aricayos, alleged in a complaint for illegal dismissal, that he started
working as Operations Manager of St. Martin Funeral Home on February 6, 1995. However, there was no
contract of employment executed between him and petitioner nor was his name included in the semi-monthly
payroll. On January 22, 1996, he was dismissed from his employment for allegedly misappropriating P38,000
which was intended for payment by petitioner of its VAT to the BIR.
The Labor Arbiter rendered decision in favor of petitioner. However, the NLRC rendered a resolution setting
aside the questioned decision and remanding the case to the Labor Arbiter for immediate appropriate
proceedings. Petitioner filed a motion for reconsideration but was denied by the NLRC. Thereafter, petitioner
filed a petition for certiorari before the Supreme Court alleging that the NLRC committed grave abuse of
discretion
Issue: Whether or not a special civil action of certiorari is the proper vehicle for judicial review by the Supreme
Court of decisions of the NLRC.
Ruling: Yes. The Court is of the considered opinion that ever since appeals from the NLRC to the Supreme
Court were eliminated, the legislative intendment was that the special civil action of certiorari was and still is
the proper vehicle for judicial review of decisions of the NLRC. Appeals by certiorari and the original action for
certiorari are both modes of judicial review addressed to the appellate courts. The important distinction
between them, however, and with which the Court is particularly concerned is that special civil action of
certiorari is within the concurrent original jurisdiction of the Supreme Court and the Court of Appeals; whereas
to indulge in the assumption that appeals by certiorari to the Supreme Court are allowed would not subserve,
but would subvert, the intention of Congress as expressed in the sponsorship speech on Senate Bill No. 1495.
There is a growing number of labor cases being elevated to the Supreme Court which, not being a trier of fact,
has at times been constrained to remand the case to the NLRC for resolution of unclear or ambiguous factual
findings; that the Court of Appeals is procedurally equipped for that purpose, aside from the increased number
of its component divisions; and that there is undeniably an imperative need for expeditious action on labor
cases as a major aspect of constitutional protection to labor.
Therefore, all supposed appeals from the NLRC to the Supreme Court are interpreted and hereby declared to
mean and refer to petitions for certiorari under Rule 65. Consequently, all such petitions should be initially
filed in the Court of Appeals in strict observance of the doctrine on the hierarchy of courts as the appropriate
forum for the relief desired.

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Veloso v. China Airlines, July 14, 1999 Appeal of the CA decision to the
SC
Doctrine: Filing a motion for reconsideration before resorting to rule 65 is jurisdictional.
Facts: ​Petitioner was employed as supervisor of the ticketing section at the Manila branch office of respondent
China Airlines Ltd. (CAL). At the ticketing section, petitioner was assisted by a senior ticketing agent, Eleanor
Go; and two ticketing agents, Julie Chua and Josephine Lobendino. On October 29, 1986, private respondent K.
Y. Chang, then district manager of the Manila branch office of CAL, informed petitioner that management had
decided to temporarily close its ticketing section in order to prevent further losses. Petitioner's three assistants
were likewise notified that they too will be temporarily laid off from employment effective October 30, 1986.
Thereafter, CAL decided to permanently close said ticketing section. Thus, on November 5, 1986, petitioner
and her staff members were informed that their recent lay-off from employment will be considered
permanent, effective one month from receipt of such notice. A notice of said retrenchment was filed with the
labor department on November 11, 1986. Later, petitioner was advised to claim her retirement pay and other
benefits. Feeling aggrieved, petitioner sent a letter to private respondent Chang assailing the validity of her
termination from the service. On July 1, 1987, petitioner filed with the Arbitration Branch of NLRC a complaint
for unfair labor practice and illegal dismissal with prayer for reinstatement, payment of backwages, damages
and attorney's fees.
The labor arbiter ruled in favor of the petitioner. The NLRC which in its resolution dated January 2, 1992, set
aside the decision of the labor arbiter. According to public respondent, the charge of unfair labor practice had
no factual and legal basis. It noted that petitioner was not an elective officer of the union; and she was just an
adviser with no formal designation. The labor tribunal also observed that only those in the ticketing section
were affected by the retrenchment program and not one of the elective union officers were laid off. Hence,
public respondent declared that dismissing a union adviser while retaining all union officers is far from any
intent to bust the union. Petitioner received copy of the aforesaid resolution of public respondent on January
7, 1992. 4 However, instead of filing the required motion for reconsideration, petitioner filed the instant
petition for certiorari. In doing so, petitioner boldly avers that a recourse to the NLRC via a motion for
reconsideration is futile and will only injure further her rights to a speedy and unbiased judgment of the case.
Issue: Whether the petition will prosper.
Held: No. This precipitate filing of petition for certiorari under Rule 65 without first moving for reconsideration
of the assailed resolution warrants the outright dismissal of this case. As we have consistently held in
numerous cases, 5 a motion for reconsideration is indispensable, for it affords the NLRC an opportunity to
rectify errors or mistakes it might have committed before resort to the courts can be had. cdphil
It is settled that certiorari will lie only if there is no appeal or any other plain, speedy and adequate remedy in
the ordinary course of law against acts of public respondent. 6 In this case, the plain and adequate remedy
expressly provided by law is a motion for reconsideration of the impugned resolution, to be made under oath
and filed within ten (10) days from receipt of the questioned resolution of the NLRC, a procedure which is
jurisdictional. 7 Hence, the filing of the petition for certiorari in this case is patently violative of prevailing
jurisprudence and will not prosper without undue damage to the fundamental doctrine that undergirds the
grant of this prerogative writ.

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Stanfilco v. Tequillo, July 17, 2019
DOCTRINE: Appellate courts are still vested with the power to review such decision even if the law is silent to an explicit
right to appeal. A certiorari is different from an appeal, in that the former concerns not errors of judgment but errors of
jurisdiction. After the CA had rendered its decision, the losing party may then seek final review before the Supreme
Court via Rule 45, to which by their very nature concerns only questions of law.

FACTS:

Stanfilco (petitioner) is a duly organized domestic corporation that operates a banana plantation in Lantapan, Bukidnon.4
On the other hand, Tequillo was a Farm Associate who worked on petitioner’s plantation from January 5, 2004 until he
was terminated on May 24, 2010 for mauling his co-worker, Resel Gayon (Gayon), and consuming intoxicating beverages
within company premises and during work hours.

Every week, petitioner hosts a company-initiated employee gathering known as the “Kaibigan Fellowship.” While the
assembly touches on matters that are not work-related, petitioner also uses it as a venue for company announcements
and production updates.

On September 12, 2009, petitioner held one such “Kaibigan Fellowship,” and required all its employees to be present
thereat. However, Tequillo, instead of attending the gathering, opted to go on a drinking spree at the farm shed area of
petitioner’s premises with several of his fellow workers. Gayon, who was sent to assist Tequillo at an assigned area of the
farm, chanced upon the group, and was eventually prevailed upon to join them. At the time, Tequillo was expressing
resentment towards petitioner’s refusal to provide him with a performance incentive, He mauled Gayon.

On September 15, 2009, petitioner served Tequillo with a memorandum, requiring him to explain why no disciplinary
action should be taken against him for the drinking and mauling incident.8 In response to the charge, Tequillo admitted
to mauling Gayon, but averred that the act was done in self-defense. However, anent the accusation of drinking, the
former remained silent. He was terminated due to the ground of serious misconduct. He filed a complaint for illegal
dismissal with the Labor Arbiter, which the latter ruled that Tequillo’s dismissal is valid. However, the NLRC and the CA
ruled that the petitioner was illegally dismissed.

ISSUE: Whether or not the CA erred that Tequillo is illegally dismissed.

RULING:

Yes, The Supreme Court contended that the CA was wrong to uphold the illegal dismissal decision in favour of Tequillo.

According to the long line of cases, The Court defined Serious misconduct as In labor cases, misconduct, as a ground for
dismissal, must be serious—that is, it must be of such grave and aggravated character and not merely trivial or
unimportant. Serious misconduct possesses three elements, to wit;

1. The misconduct must be serious

2. it must be related to the performance of duty, showing that the employee is unfit to continue working for the
employer.
3. It must have been performed with wrongful intent.

As founded by the facts, the mauling of the respondent was because the latter failed to give the incentive to Tequillo,
which according to the Court was sufficient proximate cause of the incident which was work related. Also it was so
perverse that it is no longer feasible and retaining Tequillo will endanger, not only the business, but as well as his
co-workers.

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As to the issue of Petition for certiorari, Appellate courts are still vested with the power to review such decision even if
the law is silent to an explicit right to appeal. A certiorari is different from an appeal, in that the former concerns not
errors of judgment but errors of jurisdiction. After the CA had rendered its decision, the losing party may then seek final
review before the Supreme Court via Rule 45 petition. Such petitions, by their very nature, concern only questions of law.
It follows then that, in labor cases, the Court enquires into the legal correctness of the CA's determination of the
presence or absence of grave abuse of discretion in the NLRC decision. It boils down to the ultimate question, DID the CA
correctly determine whether or not the NLRC committed grave abuse of discretion in ruling of the case. To which the
court ruled in the negative. The answer is in the negative.

Hence, the Court reinstated the judgment rendered by the LA and affirmed that Tequillo is hereby validly dismissed on
the ground of serious misconduct.

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Hanjin Engineering v. CA, April 10, 2006
Facts:
On October 18, 1991 and August 21, 1992, Hanjin and the Philippine Government, through the National Irrigation
Administration (NIA), executed contracts for the construction of the Malinao Dam at Pilar, Bohol, with a projected
completion period of 1,050 calendar days, including main canal and lateral projects for 750 days. From August 1995 to
August 1996, Hanjin contracted the services of 712 carpenters, masons, truck drivers, helpers, laborers, heavy equipment
operators, leadmen, engineers, steelmen, mechanics, electricians and others.

In April 1998, 712 employees filed complaints for illegal dismissal and for payment of benefits against Hanjin and Nam
Hyun Kim, the officer-in-charge of the project (herein petitioners), before the National Labor Relations Commission
(NLRC). The complainants averred that they were regular employees of Hanjin and that they were separated from
employment without any lawful or just cause. Only 521 of the complainants affixed their signatures in the complaints.

Petitioners alleged that the complainants were mere project employees in its Bohol Irrigation Project.

On May 12, 1998, the Labor Arbiter rendered judgment in favor of the 428 complainants, granting separation pay and
attorney’s fees to each of them. According to the Labor Arbiter, the complainants were regular employees of petitioner
Hanjin, and their claims for underpayment, holiday pay, premium pay for holiday and rest day, 13th month pay, and
service incentive leave would be computed after sufficient data were made available.

Petitioners appealed the decision to the NLRC, which affirmed with modification the Labor Arbiter’s ruling on January 28,
2000.

Petitioners filed a Motion for the Reconsideration of the decision (with a motion to conduct clarificatory hearings).

On July 20, 2001, the NLRC issued a Resolution partially granting petitioners’ motion.

Unsatisfied, petitioners filed a Petition for Certiorari under Rule 65 of the Revised Rules of Court in the CA.

On March 18, 2004, the CA dismissed the petition and affirmed the NLRC’s ruling that the dismissed employees
(respondents) were regular employees. The CA stressed that petitioners failed to refute the claim of the respondents
that they were regular employees. Petitioners moved to reconsider the decision, which the CA denied.

Issue:

WON respondents regular employees entitled to their moneys.

Ruling:
The CA, for its part, affirmed the findings of the Labor Arbiter and the NLRC, and held that respondents were regular
employees of petitioner Hanjin:

In the instant case, petitioners belatedly submitted copies of “Appointment(s) as Contract Worker(s)” allegedly signed by
private respondents at the time they commenced work, and which provided for an employment of six (6) months only, a
period applicable for probationary employment. While it may be allowed that in the instant case the workers were
initially hired for specific projects or undertakings for a period of six (6) months or less, the repeated re-hiring and the
continuing need for their services over a long span of time (from 1991 to 1995) have undeniably made them regular

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employees. Thus, we held that where the employment of project employees is extended long after the supposed
“appointments” has been finished, the employees are removed from the scope of project employees and considered
regular employees. How can one properly explain private respondents’ continuous employment from 1991 to 1996 when
their appointment was for a measly period of six months? It is clear, therefore, that as aptly established by the NLRC,
these piecemeal “appointments” have been imposed to preclude the acquisition of tenurial security. While length of
time may not be a controlling test for project employment, it can be a strong factor in determining whether the
employee was hired for a specific undertaking or in fact tasked to perform functions which are vital, necessary and
indispensable to the usual business or trade of the employer.

Furthermore, it is noteworthy to emphasize that these “appointments” were submitted only as attachments to
petitioners’ motion for reconsideration. As borne out by the records and even mentioned in the decision of the Labor
Arbiter, petitioners were already required during the initial hearings before the Labor Arbiter to “submit additional
documents in their possession necessary to support their case.” Instead of complying, petitioners still had to wait for the
adverse decision of the NLRC before they submitted the same. Likewise, in the NLRC’s assailed decision, petitioners’
failure to present these “appointments” were adverted to, thus, the NLRC ruled that “nowhere in the records can the
said contracts be found.” Despite sufficient time, from the time they were required by the Labor Arbiter to present
additional evidence up to the time the appeal was resolved by the NLRC, petitioners were not able to present said
employment contracts. Petitioners’ hesitation to submit the same is well-founded. It is a well-settled rule that when the
evidence tends to prove a material fact which imposes a liability on a party, and he has it in his power to produce
evidence which from its very nature must overthrow the case made against him if it is not founded on fact, and he
refuses to produce such evidence, the presumption arises that the evidence, if produced, would operate to his prejudice,
and support the case of his adversary.

Moreover, it is required under Policy Instruction No. 20, Series of 1993, that in case of project employees, the
termination of their employment in the particular project or undertaking must be reported to the Department of Labor
and Employment (DOLE) Regional Office having jurisdiction over the workplace within thirty (30) days following the date
of his separation from work. In Ochoco v. National Labor Relations Commission, the failure of the employer to report to
the nearest employment office the termination of employment of workers everytime it completed a project was
considered by this Court as proof that the dismissed employees were not project employees but regular employees. On
this requirement, petitioners were silent, until the Decision of the NLRC reminded them. To prove that petitioners
allegedly complied with said requirement, they again belatedly submitted machine copies of reports allegedly made to
the DOLE of Bohol. To explain away their failure to produce certified true copies of the same, petitioners allege that the
NLRC should have given evidentiary weight to the machine copies which are for all legal intents and purposes already
public records in the custody of the DOLE duly recorded in a public office. The same argument can be taken against
herein petitioners in that, for all the time it took them to produce said machine copies, it would have been more prudent
for them to have it certified by the DOLE in Bohol. Under the Rules of Evidence, and as stated by petitioners, the original
document need not be produced when the same is a public record in the custody of a public office or is recorded in a
public office. Thus, proof of such documents may be made by a duly authenticated copy of the original document or
record. It is essential, furthermore, that the copies be made in the manner provided by the rules and that all
requirements in connection therewith be complied with before such copy be properly admissible in evidence.
Considering that the documents submitted by petitioners are mere machine copies, the NLRC cannot be compelled to
give them evidentiary weight.

The appellate court, the NLRC and the Labor Arbiter are thus one in finding that respondents were not project
employees, and in sustaining respondents’ claim of illegal dismissal due to petitioners’ failure to adduce contrary

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evidence. Well-settled is the rule that findings of fact of quasi-judicial agencies, like the NLRC, are accorded not only
respect but at times even finality if such findings are supported by substantial evidence. Such findings of facts can only
be set aside upon showing of grave abuse of discretion, fraud or error of law,none of which have been shown in this case.

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X. Article 232 (formerly Article 226)

Employees Union of Bayer Phils. v. Bayer Phils, Dec. 6, 2010
Doctrine:
Article 226 of the Labor Code, as amended, which provides pertinently in part, thus:
"Bureau of Labor Relations — The Bureau of Labor Relations and the Labor Relations Divisions in the
regional offices of the Department of Labor and Employment shall have original and exclusive authority
to act, at their own initiative or upon request of either or both parties, on all inter-union and
intra-union conflicts, and all disputes, grievances or problems arising from or affecting
labor-management relations in all workplaces whether agricultural or non-agricultural, except those
arising from the implementation or interpretation of collective bargaining agreements which shall be
the subject of grievance procedure and/or voluntary arbitration."
Facts:

Employees Union of Bayer Philippines (EUBP) is the exclusive bargaining agent of all rank-and-file employees of
Bayer Philippines (Bayer), and is an affiliate of the Federation of Free Workers (FFW). EUBP, headed by its
president Juanito S. Facundo (Facundo), negotiated with Bayer for the signing of a collective bargaining
agreement (CBA). During the negotiations, EUBP rejected Bayer’s 9.9% wage-increase proposal resulting in a
bargaining deadlock. Subsequently, EUBP staged a strike, prompting the Secretary of the DOLE to assume
jurisdiction over the dispute.

Respondent Avelina Remigio (Remigio) and 27 other union members, without any authority from their union
leaders, accepted Bayer’s wage-increase proposal. EUBP’s grievance committee questioned Remigio’s action
and reprimanded Remigio and her allies. The DOLE Secretary issued an arbitral award ordering EUBP and Bayer
to execute a CBA.

Six months from the signing of the new CBA, during a company-sponsored seminar, Remigio solicited
signatures from union members in support of a resolution containing the decision of the signatories to: (1)
disaffiliate from FFW, (2) rename the union as Reformed Employees Union of Bayer Philippines (REUBP), (3)
adopt a new constitution and by-laws for the union, (4) abolish all existing officer positions in the union and
elect a new set of interim officers, and (5) authorize REUBP to administer the CBA between EUBP and Bayer.
The said resolution was signed by 147 of the 257 local union members.

With both seeking recognition from Bayer and demanding remittance of the union dues collected from its
rank-and-file members. Remigio’s splinter group wrote Facundo, FFW and Bayer informing them of the
decision of the majority of the union members to disaffiliate from FFW. Bayer responded by deciding not to
deal with either of the two groups, and by placing the union dues collected in a trust account until the conflict
between the two groups is resolved.

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EUBP filed a complaint for unfair labor practice (first ULP complaint) against Bayer for non-remittance of union
dues. EUBP later sent a letter to Bayer asking for a grievance conference. Apparently, the two groups failed to
settle their issues. Bayer decided to turn over the collected union dues to respondent Anastacia Villareal,
Treasurer of REUBP. EUBP lodged a complaint against Remigio’s group before the Industrial Relations Division
of the DOLE praying for their expulsion from EUBP for commission of "acts that threaten the life of the union."
Labor Arbiter Jovencio Ll. Mayor, Jr. dismissed the first ULP complaint for lack of jurisdiction. Petitioners then
filed a second ULP complaint against herein respondents.

The Labor Arbiter dismissed EUBP’s second ULP complaint for lack of jurisdiction. The NLRC affirmed the
decision. The CA sustained both the Labor Arbiter and the NLRC’s rulings.

Issue:

Whether the Labor Arbiter and the NLRC has jurisdiction over the case.

Ruling:

Yes. The Labor Arbiter and the NLRC has jurisdiction over the second ULP complaint.

An intra-union dispute refers to any conflict between and among union members, including grievances arising
from any violation of the rights and conditions of membership, violation of or disagreement over any provision
of the union's constitution and by-laws, or disputes arising from chartering or disaffiliation of the union.

It is clear that the issue raised by petitioners does not constitute an intra-union dispute. More importantly, the
petitioners do not seek a determination of whether it is the Facundo group (EUBP) or the Remigio group
(REUBP) which is the true set of union officers. Instead, the issue raised pertained only to the validity of the
acts of management in light of the fact that it still has an existing CBA with EUBP. Thus as to Bayer, Lonishen
and Amistoso the question was whether they were liable for unfair labor practice, which issue was within
the jurisdiction of the NLRC. The dismissal of the second ULP complaint was therefore erroneous.

However, as to respondents Remigio and Villareal, we find that petitioners' complaint was validly
dismissed.

Petitioners' ULP complaint cannot prosper as against respondents Remigio and Villareal because the issue, as
against them, essentially involves an intra-union dispute based on Section 1 (n) of DOLE Department Order No.
40-03. To rule on the validity or illegality of their acts, the Labor Arbiter and the NLRC will necessarily touch on
the issues respecting the propriety of their disaffiliation and the legality of the establishment of REUBP —
issues that are outside the scope of their jurisdiction. Accordingly, the dismissal of the complaint was validly
made, but only with respect to these two respondents.

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Montaño v. Verceles, July 26, 2010
Doctrine:

Section 226 of the Labor Code28 clearly provides that the BLR and the Regional Directors of DOLE have
concurrent jurisdiction over inter‐union and intra‐union disputes. Such disputes include the conduct or
nullification of election of union and workers' association officers. There is, thus, no doubt as to the BLR's
jurisdiction over the instant dispute involving member‐unions of a federation arising from disagreement over
the provisions of the federation's constitution and by‐laws.

Facts:

Atty. Montaño worked as legal assistant of FFW Legal Center on October 1, 1994. Subsequently, he joined the
union of rank‐and‐file employees, the FFW Staff Association, and eventually became the employees' union
president in July 1997. In November 1998, he was likewise designated officer‐in‐charge of FFW Legal Center.

During the 21st National Convention and Election of National Officers of FFW, Atty. Montaño was nominated
and elected for the position of National Vice‐President despite the finding of FFW COMELEC that Atty.
Montaño is not qualified to run for the position because Section 76 of Article XIX of the FFW Constitution and
By‐Laws prohibits federation employees from sitting in its Governing Board and strong opposition and protest
of respondent Atty. Ernesto C. Verceles (Atty. Verceles), a delegate to the convention and president of
University of the East Employees' Association (UEEA‐FFW) which is an affiliate union of FFW.

On May 28, 2001, through a letter to the Chairman of FFW COMELEC, Atty. Verceles reiterated his protest over
Atty. Montaño's candidacy which he manifested during the plenary session before the holding of the election
in the Convention. On June 18, 2001, Atty. Verceles sent a follow‐up letter to the President of FFW requesting
for immediate action on his protest.

On July 13, 2001, Atty. Verceles, as President of UEEA‐FFW and officer of the Governing Board of FFW, filed
before the BLR a petition13 for the nullification of the election of Atty. Montaño as FFW National Vice‐
President.

On May 8, 2002, the BLR rendered a Decision dismissing the petition for lack of merit. BLR opined that there
was sufficient compliance with the requirements laid down by this applicable provision and, besides, the
convention delegates unanimously decided that Atty. Monta was qualified to run for the position of National
Vice-President. Atty. Verceles filed a Motion for Reconsideration but it was denied by the BLR.

Atty. Verceles thus elevated the matter to the CA via a petition for certiorari, arguing that the Convention had
no authority under the FFW Constitution and By-Laws to overrule and set aside the FFW COMELEC's Decision
rendered pursuant to the latter's power to screen candidates. On May 28, 2004, the CA set aside the BLRs
Decision. The CA, thus, granted the petition and nullified the election of Atty. Monta as FFW National Vice-
President. Believing that it will be prejudiced by the CA Decision since its legal existence was put at stake, the
FFW Staff Association, through its president, Danilo A. Laserna, sought intervention. On June 28, 2005, the CA
issued a Resolution denying both Atty. Montano motion for reconsideration and FFW Staff Associations motion
for intervention/clarification. Hence, this petition.

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Issue/s:

Whether the CA gravely erred in upholding the jurisdiction of the BLR; in not declaring as premature the
petition in view of the pending protest before FFW COMELEC;

Ruling:

No.

Section 226 of the Labor Code clearly provides that the BLR and the Regional Directors of DOLE have
concurrent jurisdiction over inter-union and intra-union disputes. Such disputes include the conduct or
nullification of election of union and workers association officers. There is, thus, no doubt as to the BLRs
jurisdiction over the instant dispute involving member-unions of a federation arising from disagreement over
the provisions of the federation's constitution and by-laws.

We agree with BLRs observation that:

Rule XVI lays down the decentralized intra-union dispute settlement mechanism. Section 1 states that any
complaint in this regard shall be filed in the Regional Office where the union is domiciled. The concept of
domicile in labor relations regulation is equivalent to the place where the union seeks to operate or has
established a geographical presence for purposes of collective bargaining or for dealing with employers
concerning terms and conditions of employment.

The matter of venue becomes problematic when the intra-union dispute involves a federation, because the
geographical presence of a federation may encompass more than one administrative region. Pursuant to its
authority under Article 226, this Bureau exercises original jurisdiction over intra-union disputes involving
federations. It is well- settled that FFW, having local unions all over the country, operates in more than one
administrative region. Therefore, this Bureau maintains original and exclusive jurisdiction over disputes arising
from any violation of or disagreement over any provision of its constitution and by-laws.

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Diokno et al., v. Cacdac, July 4, 2007
Doctrine: The BLR has original and exclusive authority to act on all inter-union and intra-union conflicts,
disputes, and grievances.

Facts:

The First Line Association of Meralco Supervisory Employees (FLAMES) is a legitimate labor organization which is the
supervisory union of Meralco. Petitioners and private respondents are members of FLAMES.

On 1 April 2003, the FLAMES Executive Board created the Committee on Election (COMELEC) for the conduct of its union
elections scheduled on 7 May 2003. The COMELEC was composed of petitioner Dante M. Tong as its chairman, and
petitioners Jaime C. Mendoza and Romeo M. Macapulay as members. Subsequently, private respondents Jimmy S. Ong,
Nardito C. Alvarez, Alfredo J. Escall, and Jaime T. Valeriano filed their respective certificates of candidacy. On 12 April
2003, the COMELEC rejected Jimmy S. Ong's candidacy on the ground that he was not a member of FLAMES. Meanwhile,
the certificates of candidacy of Nardito C. Alvarez, Alfredo J. Escall, and Jaime T. Valeriano were similarly rejected on the
basis of the exclusion of their department from the scope of the existing collective bargaining agreement (CBA). The
employees assigned to the aforesaid department are allegedly deemed disqualified from membership in the union for
being confidential employees.

On 8 May 2003, private respondents Daya, et al., along with Ong, et al., filed with the Med-Arbitration Unit of the
DOLE-NCR, a Petition to: a) Nullify Order of Disqualification; b) Nullify Election Proceedings and Counting of Votes; c)
Declare Failure of Election; and d) Declare Holding of New Election to be Controlled and Supervised by the DOLE.

On 7 July 2003, Med-Arbiter Tranquilino B. Reyes, Jr. issued a Decision in favor of private respondents. Lastly, the
Med-Arbiter defended his jurisdiction over the case. He concluded that even as the election of union officers is an
internal affair of the union, his office has the right to inquire into the merits and conduct of the election when its
jurisdiction is sought.

Issue:

WON BLR has jurisdiction to take cognizance of the case

Held:

Yes. The BLR has the original and exclusive jurisdiction on all inter-union and intra-union conflicts. Since Article 226 of the
Labor Code has declared that the BLR shall have original and exclusive authority to act on all inter-union and intra-union
conflicts, there should be no more doubt as to its jurisdiction. As defined, an intra-union conflict would refer to a conflict
within or inside a labor union, while an inter-union controversy or dispute is one occurring or carried on between or
among unions.

The controversy in the case at bar is an intra-union dispute. There is no question that this is one which involves a dispute
within or inside FLAMES, a labor union. At issue is the propriety of the disqualification of private respondents Daya, et al.,
by the FLAMES COMELEC in the 7 May 2003 elections. It must also be stressed that even as the dispute involves
allegations that private respondents Daya, et al., sought the help of non-members of the union in their election
campaign to the detriment of FLAMES, the same does not detract from the real character of the controversy. It remains
as one which involves the grievance over the constitution and by-laws of a union, and it is a controversy involving
members of the union.
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La Tondeña Workers Union v. Secretary of Labor, December 9, 1994
Doctrine: The Labor Code, as amended by RA 6715, likewise authorizes the BLR to decide intra-union disputes.
This includes the examinations of accounts.

Facts: Petitioner LTWU is a duly registered labor organization and was bargaining agent of the rank-and-file
workers of La Tondeña Inc. at its Tondo Plant for more than thirty years. Members of petitioner, petitioned
DOLE-NCR for an audit or examination of the funds and financial records of the union. Accordingly, an audit
was ordered and found Ramon de la Cruz and Norma Marin accountable for P367,553.00 for union dues
remitted by La Tondeña Inc. to LTWU. They appealed to then DOLE Secretary Franklin Drilon, complaining that
they had not been heard before the report was made but was indorsed to the respondent Director of the BLR
who directed the DOLE-NCR to forward to the BLR the records of the case. BLR Director found that indeed De
la Cruz and Marin had not been heard before they were held liable for union funds. So, she set aside the
findings and recommendations of the DOLE-NCR and ordered another audit/examination to be conducted.

The union, through its new president, Danilo Manrique, raised a jurisdictional question: That under Art. 274 of
the Labor Code, as amended by Republic Act No. 6715, the power to order an examination of the books of
accounts and financial activities of a union is vested in the Secretary of Labor and Employment or his
representative and the BLR cannot be considered the Secretary’s representative. The union filed a petition for
review of the orders of December 1, 1989 and January 22, 1990 to the DOLE Secretary but referred it to BLR.

Issue: Whether or not BLR has the power to order an examination of the books of accounts and financial
activities of a union.

Ruling: Yes. Rule 1, sec. 1(ff) of the implementing rules states ”Union Accounts Examiners” are officials of the
Bureau or the Industrial Relations Division in the Regional Office empowered to audit books of accounts of the
union. The “union accounts examiners of the Bureau” mentioned as having the power to audit the books of
accounts of unions are actually officials of the BLR because the word “Bureau” is defined in Rule 1, sec. 1(b) of
the same rules as the Bureau of Labor Relations. Anyway, the delegation of authority to union accounts
examiners in Rule 1, sec. 1(ff) is not exclusive. By indorsing the case to the BLR, the Secretary of Labor and
Employment must be presumed to have authorized the BLR to act on his behalf. The Secretary made two
indorsements: first, when he referred to the BLR the letter of Ramon de la Cruz and Norma Marin seeking the
annulment of the audit report of the DOLE NCR, and second, when, instead of acting on the petition for review
of the union, he indorsed it to the BLR.

Independently of any delegation, the BLR had power of its own to conduct the examination of accounts in this
case. Book IV, Title VII, Chapter 4, sec. 16 of the Administrative Code of 1987 provides “The Bureau of Labor
Relations xxx shall also set policies, standards, and procedure relating to collective bargaining agreements, and
the examination of financial records of accounts of labor organizations to determine compliance with relevant
laws.” The Labor Code, as amended by RA 6715, likewise authorizes the BLR to decide intra-union disputes.
This includes the examinations of accounts. Thus, Art. 226 of the Code provides “The Bureau of Labor Relations
and the Labor Relations Divisions in the regional offices of the Department of Labor shall have original and
exclusive authority to act xxx on all inter-union and intra-union conflicts, and all disputes, grievances or
problems arising from or affecting labor-management relations in all workplaces.
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Abbot Laboratories v. Abbot Laboratories Employee Union, January 26,
2000
ABBOTT LABORATORIES PHILIPPINES, INC., petitioner, vs. ABBOTT LABORATORIES EMPLOYEES UNION, MR.
CRESENCIANO TRAJANO, in his capacity as Acting Secretary of The Department of Labor and Employment and
MR. BENEDICTO ERNESTO BITONIO, JR., in his capacity as Director IV of the Bureau of Labor Relations,
respondents.

[G.R. No. 131374. January 26, 2000.]

Doctrine:
The appellate jurisdiction of the Secretary of Labor and Employment is limited only to a review of cancellation
proceedings decided by the Bureau of Labor Relations in the exercise of its exclusive and original jurisdiction.
The Secretary of Labor and Employment has no jurisdiction over decisions of the Bureau of Labor Relations
rendered in the exercise of its appellate power to review the decision of the Regional Director in a petition to
cancel the union’s certificate of registration, said decisions being final and unappealable
Facts:
ABBOTT is a corporation engaged in the manufacture and distribution of pharmaceutical drugs. On 22
February 1996, the Abbott Laboratories Employees Union (hereafter ALEU) represented by its president, Alvin
B. Buerano, filed an application for union registration in the Department of Labor and Employment. ALEU
alleged in the application that it is a labor organization with members consisting of 30 rank-and-file employees
in the manufacturing unit of ABBOTT and that there was no certified bargaining agent in the unit it sought to
represent, namely, the manufacturing unit.
On 28 February 1996, ALEU’s application was approved by the Bureau of Labor Relations, which in due course
issued Certificate of Registration. Consequently, ALEU became a legitimate labor organization.
ABBOTT assailed the certificate of registration since ALEU’s application was not signed by at least 20% of the
total 286 rank-and-file employees of the entire employer unit; and that it omitted to submit copies of its books
of account. The Regional Director found that for ALEU’s failure to satisfy the requirements of union registration
under Article 234 of the Labor Code; the cancellation of its certificate of registration was in order. Forthwith,
on 19 August 1996, ALEU appealed said cancellation to the Office of the Secretary of Labor and Employment,
which referred the same to the Director of the Bureau of Labor Relations.
On 31 March 1997, the Bureau of Labor Relations rendered judgment reversing the 21 June 1996 decision of
the Regional Director, “WHEREFORE, Abbott Laboratories Employees Union shall remain in the roster of
legitimate labor organizations, with all the rights, privileges and obligations appurtenant thereto.”
The Secretary of Labor and Employment refused to act on ABBOTT’s appeal on the ground that it has no
jurisdiction to review the decision of the Bureau of Labor Relations on appeals in cancellation cases emanating
from the Regional Offices. The decision of the Bureau of Labor Relations therein is final and executory under
Section 4, Rule III, Book V of the Rules and Regulations Implementing the Labor Code

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Issue:
Whether the Secretary of Labor and Employment can review the decisions of the Bureau of Labor Relations
rendered in the exercise of its appellate jurisdiction over decisions of the Regional Director in cases involving
cancellations of certificates of registration of labor unions.
Ruling:
Contrary to ABBOTT’s contention, there has been no grave abuse of discretion on the part of the Secretary of
Labor and Employment. Its refusal to take cognizance of ALEU’s appeal from the decision of the Bureau of
Labor Relations is in accordance with the provisions of Rule VIII, Book V of the Omnibus Rules Implementing
the Labor Code as amended by Department Order No. 09. The rule governing petitions for cancellation of
registration of any legitimate labor organization or worker association, as it now stands, provides:
SECTION 1. Venue of Action—If the respondent to the petition is a local/chapter, affiliate, or a workers’
association with operations limited to one region, the petition shall be filed with the Regional Office having
jurisdiction over the place where the respondent principally operates. Petitions filed against federations,
national or industry unions, trade union centers, or workers’ associations operating in more than one regional
jurisdiction, shall be filed with the Bureau.
SECTION 3. Cancellation of registration; nature and grounds.Subject to the requirements of notice and due
process, the registration of any legitimate labor organization or worker’s association may be cancelled by the
Bureau or the Regional Office upon the filing of an independent petition for cancellation based on any of the
following grounds
Clearly, the Secretary of Labor and Employment has no jurisdiction to entertain the appeal of ABBOTT. The
appellate jurisdiction of the Secretary of Labor and Employment is limited only to a review of cancellation
proceedings decided by the Bureau of Labor Relations in the exercise of its exclusive and original jurisdiction.
The Secretary of Labor and Employment has no jurisdiction over decisions of the Bureau of Labor Relations
rendered in the exercise of its appellate power to review the decision of the Regional Director in a petition to
cancel the union’s certificate of registration, said decisions being final and unappealable
Dispositive Portion:WHEREFORE, the Petition is DENIED. The challenged order in BLR-A-10-25-96 of the
Secretary of Labor and Employment embodied in its 19 September letter is hereby AFFIRMED.

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Takata Corporation v. BLR, June 4, 2014

Doctrine: If a complaint is filed for and on behalf of the plaintiff who is not authorized to do so, the complaint
is not deemed filed. An unauthorized complaint does not produce any legal effect.
Facts: Takata Phils Corporation filed a petition for the cancellation for the certificate of union registration of
Samahang Lakas Manggagawa ng Takata (SALAMAT) on the ground of misrepresentation, false statement and
fraud with respect to the number of those who participated in the organizational meeting, the adoption and
ratification of its Constitution and By-Laws, and in the election of its officers. Petitioner avers that in its May 1,
2009 organizational meeting, they failed to comply with the 20% minimum membership requirement for union
registration.
Respondent denied the charge and argued that the union members were informed of the contents of the
documents they signed and that the 68 attendees to the organizational meeting constituted more than 50% of
the total union membership, hence, a quorum existed for the conduct of the said meeting.
The DOLE Regional Director, granted the petition for cancellation of respondent's certificate of registration.
Dissatisfied, respondent, through Bukluran ng Manggagawang Pilipino (BMP) Paralegal Officer, Domingo P.
Mole, filed a Notice and Memorandum of Appeal with the Bureau of Labor Relations (BLR).
Napoleon C. Banzuela, Jr. and Jehn Louie W. Velandrez, filed an Appeal Memorandum with Formal Entry of
Appearance to the Office of the DOLE Secretary, which the latter eventually referred to the BLR. Petitioner filed
an Opposition to the Appeals praying for their dismissal on the ground of forum shopping as respondent filed
two separate appeals in two separate venues; and for failing to avail of the correct remedy within the period;
and that the certificate of registration was tainted with fraud, misrepresentation and falsification.
In its Answer, respondent claimed that there was no forum shopping as BMP's Paralegal Officer was no longer
authorized to file an appeal on behalf of respondent as the latter's link with BMP was already terminated and
only the Union President was authorized to file the appeal.
After considering respondent's Appeal Memorandum with Formal Entry of Appearance and petitioner's
Answer, the BLR rendered its Decision reversed the Order of the Regional Director. The BLR found that
petitioner failed to prove that respondent deliberately and maliciously misrepresented the number of
rank-and-file employees.
Petitioner filed a motion for reconsideration, which was denied by the BLR. A petition for certiorari was filed
before the CA. The CA affirmed the findings of the BLR, hence this petition.
Issue: Whether or not the CA erred in affirming the decision of the BLR and not finding any violation by
SALAMAT of the rule on forum shopping in the filing of two verified appeals for and its behalf—NO.
Ruling:
The BMP Paralegal Officer Domingo P. Mole was no longer authorized to file an appeal on behalf of union
SALAMAT and that BMP was duly informed that its services was already terminated. So, considering that he
was no longer authorized to file an appeal when it filed the Notice and Memorandum of Appeal the same can
no longer be treated as an appeal filed by union SALAMAT. Hence, there is no forum shopping to speak of in
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this case as only the Appeal Memorandum with Formal Entry of Appearance filed by Atty. Napoleon C.
Banzuela, Jr. and Atty. Jehn Louie W. Velandrez is sanctioned by SALAMAT.
Since Mole's appeal filed with the BLR was not specifically authorized by respondent, such appeal is considered
to have not been filed at all. It has been held that "if a complaint is filed for and in behalf of the plaintiff who is
not authorized to do so, the complaint is not deemed filed.
An unauthorized complaint does not produce any legal effect."
Respondent through its authorized representative filed its Appeal Memorandum with Formal Entry of
Appearance before the Labor Secretary, and not with the BLR. As the appeal emanated from the petition for
cancellation of certificate of registration filed with the Regional Office, the decision canceling the registration is
appealable to the BLR, and not with the Labor Secretary. However, since the Labor Secretary motu propio
referred the appeal with the BLR, the latter can now act on it. Considering that Mole's appeal with the BLR was
not deemed filed, respondent’s appeal, through Banzuela and Associates, which the Labor Secretary referred
to the BLR was the only existing appeal with the BLR for resolution. There is, therefore, no merit to petitioner's
claim that BLR chose the appeal of Banzuela and Associates over Mole's appeal.
The case of Abbott Laboratories Philippines, Inc. v. Abbott Laboratories Employees Union cited by petitioner is
not at all applicable in this case as the issue therein is the authority of the Labor Secretary to review the
decision of the Bureau of Labor Relations rendered in the exercise of its appellate jurisdiction over decision of
the Regional Director in cases involving cancellations of certificate of registration of labor unions. We found no
grave abuse of discretion committed by the Secretary of Labor in not acting on therein petitioner's appeal. The
decision of the Bureau of Labor Relations on cases brought before it on appeal from the Regional Director are
final and executory. Hence, the remedy of the aggrieved party is to seasonably avail of the special civil action
of certiorari under Rule 65 and the Rules of Court. In this case, after the Labor Secretary motu propio referred
respondent's appeal filed with it to the BLR which rendered its decision reversing the Regional Director,
petitioner went directly to the CA via a petition for certiorari under Rule 65.

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XI. Article 233 (formerly Article 227)

110. Magbuana v. Uy, May 6, 2005 - Sevilla
Doctrine:
A compromise agreement is unnecessary after final judgment has been entered. Indeed, once the case is
terminated by final judgment, the rights of the parties are settled. There are no more disputes that can be
compromised.
Facts:
As a final consequence of the final and executory decision of the Supreme Court in Rizalino P. Uy v. National
Labor Relations Commission, et. al. (GR No. 117983, September 6, 1996), the wage differentials determined
that are due to the 8 complainants amounted to P1,487,312.69. After some time, filed a Motion for Issuance
of Writ of Execution. Then, Rizalino Uy filed a Manifestation signed by the 8 petitioners requesting that the
cases be terminated and closed, stating that the judgment award as computed had been complied with to the
satisfaction of petitioners together with a Joint Affidavit attesting to the receipt of payment from respondent
and waiving all other benefits due them in connection with their complaint. Months later, petitioners filed an
Urgent Motion for Issuance of Writ of Execution wherein they confirmed that each of them received P40,000
from respondent. Respondent opposed the motion on the ground that the judgment award had been fully
satisfied. Petitioners replied that they received only partial payments of the judgment award. 6 of the 8
petitioners filed a Manifestation requesting that the cases be considered closed and terminated as they are
already satisfied of what they have received (a total of P320,000) from respondent and attesting that they have
no more collectible amount from respondent and if there is any, they are abandoning and waiving the same.
The Labor Arbiter denied the motion for issuance of writ of execution and considered the cases closed and
terminated. On appeal, the NLRC reversed the Labor Arbiter and directed the immediate issuance of a writ of
execution, holding that a final and executory judgment can no longer be altered and that quitclaims and
releases are normally frowned upon as contrary to public policy.
Issue:
Whether or not the final and executory judgment of the Supreme Court could be subject to compromise
settlement
Ruling:
No. A Final and Executory Judgment of the SC is not subject to a compromise agreement.
A compromise agreement is a contract whereby the parties make reciprocal concessions in order to resolve
their differences and thus avoid or put an end to a lawsuit. They adjust their difficulties in the manner they
have agreed upon, disregarding the possible gain in litigation and keeping in mind that such gain is balanced by
the danger of losing. Verily, the compromise may be either extrajudicial (to prevent litigation) or judicial (to
end a litigation).
A compromise must not be contrary to law, morals, good customs and public policy; and must have been freely
and intelligently executed by and between the parties. To have the force of law between the parties, it must
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comply with the requisites and principles of contracts. Upon the parties, it has the effect and the authority of
res judicata, once entered into.
When a compromise agreement is given judicial approval, it becomes more than a contract binding upon the
parties. Having been sanctioned by the court, it is entered as a determination of a controversy and has the
force and effect of a judgment. It is immediately executory and not appealable, except for vices of consent or
forgery. The nonfulfillment of its terms and conditions justifies the issuance of a writ of execution; in such an
instance, execution becomes a ministerial duty of the court.
Following these basic principles, apparently unnecessary is a compromise agreement after final judgment has
been entered. Indeed, once the case is terminated by final judgment, the rights of the parties are settled.
There are no more disputes that can be compromised.
The issue involving the validity of a compromise agreement notwithstanding a final judgment is not novel.
Jesalva v. Bautista upheld a compromise agreement that covered cases pending trial, on appeal, and with final
judgment. The Court noted that Article 2040 impliedly allowed such agreements; there was no limitation as to
when these should be entered into. Palanca v. Court of Industrial Relations sustained a compromise
agreement, notwithstanding a final judgment in which only the amount of back wages was left to be
determined. The Court found no evidence of fraud or of any showing that the agreement was contrary to law,
morals, good customs, public order, or public policy.

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111. Philippine Transmarine Carrier v. Pelagio, August 12, 2015
Doctrine:
A valid compromise agreement may render a pending case moot and academic. However, the parties may opt
to put therein clauses, conditions, and the like that would prevent a pending case from becoming moot and
academic - such as when the execution of such agreement is without prejudice to the final disposition of the
said case.
Facts:
Respondent Pelagio was hired as a motorman by Petitioner, stationed on board the vessel M/V Drive Mahone
beginning Nov 3 2009. On Feb 2010, Respondent experienced difficulty in breathing and some pains on his
nape, lower back, and joints while at work. Pelagio was referred to a port doctor in Said, Egypt where
he was diagnosed with "Myositis" and declared unfit to work. He was repatriated back to the PH shortly.

The company-designated Physician concluded that Respondent had Carpal Tunnel Syndrome and a Spinal
Injury resulting in a Grade 11 Disability, a slight loss of lifting power of the trunk
Respondent sought the opinion of a private physician who assessed him only with a Grade 8 Disability, a
moderate rigidity or ⅔ loss of motion of lifting power of the trunk, declaring him unfit to return to his work.
With such assessment, Respondent made a claim for Permanent Total Disability Benefits from Petitioner but
was ignored, thus the present complaint for such as he was unable to work for more than 120 days from
repatriation.
Petitioners countered that Respondent was not entitled to the benefits sought as the company physician only
assessed him with a Grade 11 Disability, and insisted that the opinion of a 3rd Physician be taken first as stated
in the POEA Standard Employment Contract.
LA Ruling: In favor of Petitioners, Grade 11 was appreciated more.
NLRC: Reversed. Ruled that Pelagio's disability went beyond 240 days without a declaration that he is fit to
resume work or an assessment of disability rating, and as such, he is already entitled to permanent total
disability benefits as stated under the CBA. Parties entered inot a Satisfaction of Judgement, Pelagio was paid
in accordance with NLRC
Satisfaction of Judgment: Pelagio obligated to return the amount paid in case of a reversal of judgment by the
higher courts
CA: Dismissed, Satisfaction of Judgment executed by the parties is in the nature of a compromise agreement,
which was properly approved by the NLRC.
Issue:
W/N Dismissal was correct
Ruling:
No. As stated in the Satisfaction of Judgement, Pelagio is obliged to reimburse petitioners accordingly. More
importantly, the foregoing documents do not have any clause prohibiting either of the parties from seeking
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further redress against each other. Thus, both petitioners and Pelagio may pursue any of the available legal
remedies should any eventuality arise in their dispute.
While the Satisfaction of Judgment may be properly deemed as a compromise agreement, it is conditional in
nature, considering that it is without prejudice to the certiorari proceedings pending before the CA, i.e., it
obliges Pelagio to return the aforesaid proceeds to petitioners should the CA ultimately rule in the latter's
favor.

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Magsaysay Maritime v. De Jesus, August 30, 2017

Doctrine: General rule in compensability death is that a seafarer's death must have occurred during the term
of the employment contract, an exception to this rule is when a seafarer contracted an illness under the
contract and this illness caused the death.
Facts: Bernardine hired by Magsaysay Maritime Corporation as an Accommodation Supervisor for the cruise
ship Regal Princess was diagnosed with Aortic Aneurysm and died two months after the termination of his
contract of employment. Bernadine's widow, Cynthia De Jesus filed a complaint against Magsaysay for
payment of death benefits, medical expenses, sickness allowance, damages and attorney's fees.

In this case the Labor Arbiter granted the complaint, hence Magsaysay filed an appeal in which the NLRC
denied Magsaysay's appeal. The Court of Appeals upheld the NLRC's decision hence the case.

Issue: Whether the award of death benefits were issued with grave abuse of discretion

Ruling: No Section 20(A) of the POEA-SEC requires that a seafarer to be entitled to death benefits he must
have suffered a work-related death during the term of his contract. However Section 32-A of the POEA-SEC
acknowledges the possibility of compensation for the death of the seafarer occuring after the employment
contract on account of a work-related illness as long as the following conditions are met:

(1)The seafarers work must involve the risks described herein

(2) The disease was contracted as a result of the seafarer's exposure to the described risked
(3) The disease was contracted within a period of exposure and under such other factors necessary to
contract it
(4) There was no notorious negligence on the part of the seafarer.

The court found that the conditions such as the climate the worker was exposed to helped trigger the
connection between the conditions of employment and work actually performed by the deceased seafarer
and his illness. Hence the award of death benefits was proper.

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Solomon et . al. v. Powertech Corp., January 22, 2008
Doctrine:
Collusion is a species of fraud. Article 227, LC empowers the NLRC to void a compromise agreement for fraud

Facts: A complaint for illegal dismissal was filed by Nagkakaisang Manggagawa Ng Powertech Corporation on
behalf of its 52 individual members and non-union members against their employer, Powertech. The Labor
Arbiter rendered a decision in favor of the employees awarding monetary claims. Powertech appealed to the
NLRC. During its pendency, Carlos Gestiada, for himself and on behalf of other petitioners, executed a
quitclaim, release and waiver in favor of Powertech in consideration of the amount of P150,000.00. Earlier,
Gestiada was appointed by his co-petitioners as their attorney-in-fact through a SPA.
Relying on the quitclaim and release, Powertech filed a motion for the withdrawal of the appeal and cash
bond. The NLRC granted the motion, dismissed the appeal and ordered the release of the cash bond. The
P150,000.00 check, however, bounced due to a stop payment order of Powertech. Aggrieved, petitioners
moved to nullify the release and quitclaim for lack of consideration. In a Resolution the NLRC declared the
quitclaim void for lack of consideration and reinstated the appeal. Gestiada then terminated the services of
their counsel, Atty. Evangelista and, instead, retained Atty. Manuel Luis Felipe of the Public Attorney’s Office. A
day later, Powertech paid P150,000.00 to Gestiada purportedly as compromise amount for all of petitioners.
That same day, Gestiada, through Atty. Felipe, and Powertech filed a joint motion to dismiss with the NLRC
based on the compromise agreement. Atty. Evangelista oppose the motion, alleging that the compromise
agreement is unconscionable and that the P150,000.00 was received by Gestiada as payment solely for his
backwages and other monetary claims.
Issue:
Whether the compromise agreement entered into by Gestiada on behalf petitioners valid?
Ruling:
No,it is not valid. If reliance is placed solely on the quitclaim release and waiver executed by Gestiada and the
special power of attorney, it would be an inevitable conclusion that the P150,000.00 compromise covered the
claims of petitioners, not merely that of Gestiada. That is apparent from the waiver and the special power of
attorney. There is much to be said, however, of the circumstances in the execution and the payment of the
amount which lead Us to conclude that the P150,000.00 was given to Gestiada solely as payment for his
backwages and other monetary claims.

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Philippine Journalists Inc., v. NLRC, September 5, 2006

Doctrine: Under Article 223 (now Article 229) of the Labor Code, "the decision of the [LA] reinstating a
dismissed or separated employee, insofar as the reinstatement aspect is concerned, shall immediately be
executory, even pending appeal. The employee shall either be admitted back to work under the same terms
and conditions prevailing prior to his dismissal or separation or, at the option of the employer, merely
reinstated in the payroll. The posting of a bond by the employer shall not stay the execution for reinstatement .
. . ." Verily, the employer is duty-bound to reinstate the employee, failing which, the employer is liable instead
to pay the dismissed employee's salary.
Facts: The Philippine Journalists, Inc. (PJI) is a domestic corporation engaged in the publication and sale of
newspapers and magazines. The exclusive bargaining agent of all the rank-and-file employees in the company
is the Journal Employees Union (Union for brevity).

Sometime in April 2005, the Union filed a notice of strike before the National Conciliation and Mediation Board
(NCMB), claiming that PJI was guilty of unfair labor practice. PJI was then going to implement a retrenchment
program due to "over-staffing or bloated work force and continuing actual losses sustained by the company for
the past three years resulting in negative stockholders equity of P127.0 million."

The NLRC declared that the 31 complainants were illegally dismissed and that there was no basis for the
implementation of petitioner's retrenchment program. The NLRC noted that the following circumstances
belied PJI's claim that it had incurred losses: (1) office renovations were made as evidenced by numerous
purchase orders; (2) certain employees were granted merit increases; and (3) a Christmas party for employees
was held at a plush hotel. It also observed that PJI's executives refused to forego their quarterly bonuses if the
Union members refused to forego theirs.

Thereafter, the parties executed a Compromise Agreement where PJI undertook to reinstate the illegally
dismissed employees. NLRC then issued a resolution deeming the labor dispute already closed and terminated.

In the meantime however, the Union filed another notice of strike claiming that 29 employees were illegally
dismissed and that the salaries and benefits of 50 others had been illegally reduced. The NLRC ruled that the
complainants were not illegally dismissed because the resolution declaring the retrenchment program illegal
did not attain finality as it had been mooted by the compromise agreement entered into by the parties. The
appellate court however, held that the compromise agreement referred only to the award given by the NLRC to
the complainants in the case.
Issue: Whether an NLRC Resolution, which includes a pronouncement that the members of a union had been
illegally dismissed, is abandoned or rendered "moot and academic" by a compromise agreement subsequently
entered into between the dismissed employees and the employer
Ruling: The nature of a compromise is spelled out in Article 2028 of the New Civil Code: it is "a contract
whereby the parties, by making reciprocal concessions, avoid litigation or put an end to one already
commenced." Parties to a compromise are motivated by "the hope of gaining, balanced by the dangers of
losing." It contemplates mutual concessions and mutual gains to avoid the expenses of litigation, or, when
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litigation has already begun, to end it because of the uncertainty of the result. Article 227 of the Labor Code of
the Philippines authorizes compromise agreements voluntarily agreed upon by the parties, in conformity with
the basic policy of the State "to promote and emphasize the primacy of free collective bargaining and
negotiations, including voluntary arbitration, mediation and conciliation, as modes of settling labor or
industrial disputes.

Thus, a judgment rendered in accordance with a compromise agreement is not appealable, and is immediately
executory unless a motion is filed to set aside the agreement on the ground of fraud, mistake, or duress, in
which case an appeal may be taken against the order denying the motion.Under Article 2037 of the Civil Code,
"a compromise has upon the parties the effect and authority of res judicata," even when effected without
judicial approval; and under the principle of res judicata, an issue which had already been laid to rest by the
parties themselves can no longer be relitigated.

The case was considered closed and terminated and the Resolution dated May 31, 2001 fully implemented
insofar as the employees "mentioned in paragraphs 2c and 2d of the compromise agreement" were
concerned. Hence, the CA was correct in holding that the compromise agreement pertained only to the
"monetary obligation" of the employer to the dismissed employees, and in no way affected the Resolution in
NCMB-NCR-NS-03-087-00 dated May 31, 2001 where the NLRC made the pronouncement that there was no
basis for the implementation of petitioners' retrenchment program.

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Periquet v. NLRC, June 22, 1990
Doctrine:

If the agreement was voluntarily entered into and a reasonable settlement, it is binding on the parties and may not later
be disowned simply because of a of mind.

Facts: The petitioner was dismissed as toll collector by the Construction Development Corporation of the Philippines,
private respondent herein, for willful breach of trust and unauthorized possession of accountable toll tickets allegedly
found in her purse during a surprise inspection.

LA: Claiming she had been "framed," she filed a complaint for illegal dismissal and was sustained by the labor arbiter,
who ordered her reinstatement within ten days "without loss of seniority rights and other privileges and with back wages
to be computed from the date of her actual dismissal up to date of her actual reinstatement.

NLRC: The case was appealed to the NLRC to which the order was affirmed in toto.

Almost about nine years later, the petitioner filed a motion for the issuance of a writ of execution of the decision which
was granted by the executive labor arbiter to which the respondent was required to pay the petitioner of the sum of
P205,207.42. Pursuant thereto, the said amount was garnished by the NLRC sheriff soon thereafter. Pursuant to the said
garnishment, an appeal was made by CDCP, which was sustained by the NLRC and set aside the order awarding aforesaid
amount and the corresponding writ of execution issued thereafter, and the notice of garnishment. In its decision, the
public respondent held that the motion for execution was time-barred, having been filed beyond the five- year period
prescribed by both the Rules of Court and the Labor Code. It also rejected the petitioner's claim that she had not been
reinstated on time and ruled as valid the two quitclaims she had signed waiving her right to reinstatement and
acknowledging settlement in full of her back wages and other benefits. The petitioner contends that this decision is
tainted with grave abuse of discretion and asks for its reversal. The Supreme Court affirmed instead referring to Section
6, Rule 39 of the Revised Rules of Court and a similar provision found under Article 224 of the Labor Code.

Petitioner contends that these aforementioned rules are not absolute citing the case of Lancita v. Magbanua which
provides that where judgments are for money only and wholly unpaid, and execution has been previously withheld in
the interest of the judgment debtor, which is in financial difficulties, the court has no discretion to deny motions for leave
to issue execution more than five years after the judgments are entered.

However, there has been no indication that respondents herein had ever slept on their rights to have the judgment
executed by mere motions, within the reglementary period. The statute of limitation has not been devised against those
who wish to act but cannot do so, for causes beyond their central.

Periquet insists it was the private respondent that delayed and prevented the execution of the judgment in her favor. The
Court sees it the other way around, as the record shows it was Periquet who dilly-dallied. In the order of her
reinstatement, which was affirmed by the NLRC, there was no evidence that she demanded her reinstatement or that
she complained when her demand was rejected. What appears is that she entered into a compromise agreement with
CDCP where she waived her right to reinstatement and received from the CDCP the sum of P14,000.00 representing her
back wages from the date of her dismissal to the date of the agreement. Petitioner, soon thereafter claimed that she was
actually reinstated only on a later date and that she should be granted back pay from the date of her dismissal until
reinstatement, omitting in the process to mention significant developments that transpired during and after the said
period.

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After accepting the sum of P14, 000 and having waived her right to reinstatement, petitioner secured employment as
kitchen dispatcher at the Tito Rey Restaurant, where she worked for almost five years. Soon thereafter, she applied for
re-employment with the CDCP and was given the position of xerox machine operator with a basic salary plus allowances
bigger from that she is receiving from Tito Rey’s.

On June 27, 1988; she wrote the new management of the CDCP and asked that the rights granted her by the decision
dated August 29, 1980, be recognized because the waiver she signed was invalid.

On September 19, 1988, the Corporate Legal Counsel of the private respondent (now Philippine National Construction
Corporation) recommended the payment to the petitioner of the sum of P9,544.00, representing the balance of her back
pay for three years at P654. 00 per month (minus the P14,000.00 earlier paid).

On November 10, 1988, the petitioner accepted this additional amount and signed another Quitclaim and Release
admitting her fault in relation to the initial reinstatement order and holding PNCC free from any liability thereto. The
petitioner expressed satisfaction with the settlement and even sent a memorandum expressing gratitude to PNCC in
relation to the same.

Then again, a change of mind, with which, on March 11, 1989, she filed the motion for execution that is now the subject
of this petition.

Issue: Whether or not there was a valid waiver and quitclaim.

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

The question may be asked: Why did the petitioner sign the compromise agreement of September 16, 1980, and waive
all her rights under the judgment in consideration of the cash settlement she received? It must be remembered that on
that date the decision could still have been elevated on certiorari before this Court and there was still the possibility of its
reversal. The petitioner obviously decided that a bird in hand was worth two on the wing and so opted for the
compromise agreement. The amount she was then waiving, it is worth noting, had not yet come up to the exorbitant
sum of P205,207.42 that she was later to demand after the lapse of eight years.

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Aujero v. Philcomsat, January 18, 2012
Doctrine: Not all waivers and quitclaims are invalid as against public policy. If the agreement was voluntarily
entered into and represents a reasonable settlement, it is binding on the parties and may not later be
disowned simply because of a change of mind. It is only where there is clear proof that the waiver was
wangled from an unsuspecting or gullible person, or the terms of settlement are unconscionable on its face,
that the law will step in to annul the questionable transaction.
Facts: It was in 1967 that the petitioner started working for respondent Philippine Communications Satellite
Corporation (Philcomsat) as an accountant in the latter's Finance Department. On August 15, 2001 or after
thirty-four (34) years of service, the petitioner applied for early retirement. His application for retirement was
approved, effective September 15, 2001, entitling him to receive retirement benefits at a rate equivalent to
one and a half of his monthly salary for every year of service. At that time, the petitioner was Philcomsat's
Senior Vice-President with a monthly salary of Two Hundred Seventy-Four Thousand Eight Hundred Five Pesos
(₱274,805.00).
On September 12, 2001, the petitioner executed a Deed of Release and Quitclaim5 in Philcomsat’s favor,
following his receipt from the latter of a check in the amount of Nine Million Four Hundred Thirty-Nine
Thousand Three Hundred Twenty-Seven and 91/100 Pesos (₱9,439,327.91).
Almost three (3) years thereafter, the petitioner filed a complaint for unpaid retirement benefits, claiming that
the actual amount of his retirement pay is Fourteen Million Fifteen Thousand and Fifty-Five Pesos
(₱14,015,055.00) and the ₱9,439,327.91 he received from Philcomsat as supposed settlement for all his claims
is unconscionable, which is more than enough reason to declare his quitclaim as null and void. According to
the petitioner, he had no choice but to accept a lesser amount as he was in dire need thereof and was all set to
return to his hometown and he signed the quitclaim despite the considerable deficiency as no single centavo
would be released to him if he did not execute a release and waiver in Philcomsat's favor.

Ruling of the LA:

Labor Arbiter Joel S. Lustria (LA Lustria) issued a Decision13 in the petitioner’s favor, directing Philcomsat to
pay him the amount of ₱4,575,727.09 and ₱274,805.00, representing the balance of his retirement benefits
and salary for the period from August 15 to September 15, 2001, respectively. LA Lustria found it hard to
believe that the petitioner would voluntary waive a significant portion of his retirement pay.

Ruling of the NLRC:

The NLRC granted Philcomsat’s appeal and reversed and set aside LA Lustria’s May 31, 2006 Decision. The
NLRC dismissed the petitioner’s complaint for unpaid retirement benefits and salary in consideration of the
Deed of Release and Quitclaim he executed in September 12, 2001 following his receipt from Philcomsat of
the amount of ₱9,439,327.91, which constitutes the full settlement of all his claims against Philcomsat.
According to the NLRC, the petitioner failed to allege, much less, adduce evidence that Philcomsat employed
means to vitiate his consent to the quitclaim.

The petitioner is well-educated, a licensed accountant and was Philcomsat’s Senior Vice-President prior to
his retirement; he cannot therefore claim that he signed the quitclaim without understanding the

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consequences and implications thereof.

Ruling of the CA:

The CA further ruled that the NLRC was correct in upholding the validity of the petitioner’s quitclaim. Thus:

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

Issue: Whether or not the executed quitclaim between petitioner and respondent is valid.
Ruling: Yes. The assailed November 12, 2009 Decision and July 28, 2010 Resolution of the Court of Appeals in
CA-G.R. SP No. 107233 are hereby AFFIRMED.

Absent any evidence that any of the vices of consent is present and considering the petitioner’s position and
education, the quitclaim executed by the petitioner constitutes a valid and binding agreement.
The petitioner is not an ordinary laborer. He is mature, intelligent and educated with a college degree, who
cannot be easily duped or tricked into performing an act against his will. As no proof was presented that the
said quitclaim was entered into through fraud, deception, misrepresentation, the same is valid and binding.
The petitioner is estopped from questioning the said quitclaim and cannot renege after accepting the benefits
thereunder. This Court will never satisfy itself with surmises, conjectures or speculations for the purpose of
giving imprimatur to the petitioner's attempt to abdicate from his obligations under a valid and binding release
and waiver.
The petitioner's educational background and employment stature render it improbable that he was pressured,
intimidated or inveigled into signing the subject quitclaim. This Court cannot permit the petitioner to relieve
himself from the consequences of his act, when his knowledge and understanding thereof is expected. Also,
the period of time that the petitioner allowed to lapse before filing a complaint to recover the supposed
deficiency in his retirement pay clouds his motives, leading to the reasonable conclusion that his claim of being
aggrieved is a mere afterthought, if not a mere pretention.

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Carolina’s Lace Shoppe v. Maquilan, April 10, 2019
Doctrine: In illegal dismissal cases, the fundamental rule is that when an employer interposes the defense of
resignation, the burden to prove that the employee indeed voluntarily resigned necessarily rests upon the
employer.
Facts: Upon inspection by the DOLE of CLS, Espultero, one of the latter’s employees, was terminated and was
allegedly made to sign a quitclaim in order to claim his separation pay despite his 17 years in service after
informing the former that his daily wage was ₱250. A month later, Gloria, CLS’s sales clerk, was dismissed from
the service for no reason given and was also allegedly made to sign a quitclaim in order to claim her separation
pay despite her 3 years in service. The same fate happened to Joy, header of CLS and daughter of Gloria, who
was dismissed from the service and was forced to sign a quitclaim. They were all constrained to file a case for
illegal dismissal with money claims and damages against CLS, Mangasing, and Ragas. Respondents claimed that
Gloria, Joy and Espultero were not illegally dismissed as they voluntarily resigned, evidenced by their
resignation letters.
The LA found Gloria and Joy to have been illegally dismissed as they were forced to resign from their respective
employments. NLRC gave credence to the resignation letters and found that the same were voluntarily
executed. Gloria and Joy raised the matter before the CA and the latter granted the petition and reinstated the
ruling of the LA, holding that the tenor of the resignation letters, the quitclaims executed by Gloria and Joy,
and their subsequent acts belied their clear intents to sever from their respective employments.
Issue: W/N Gloria and Joy were illegally dismissed from employment
Ruling: YES. In illegal dismissal cases, the fundamental rule is that when an employer interposes the defense of
resignation, the burden to prove that the employee indeed voluntarily resigned necessarily rests upon the
employer.
Citing Fortuny Garments/Johnny Co v. Castro, the case of Torreda v. Investment and Capital Corporation of the
Philippines discusses how an employee's act of severing from employment may be measured, to wit:
xxx. The act of the employee before and after the alleged resignation must be considered to determine whether
in fact, he or she intended to relinquish such employment. If the employer introduces evidence purportedly
executed by an employee as proof of voluntary resignation and the employee specifically denies the
authenticity and due execution of said document, the employer is burdened to prove the due execution and
genuineness of such document.
Verily, the acts preceding and subsequent to the employee's resignation must be taken into consideration.
As to Gloria, there was no indication that she intended to relinquish her employment and she filed a complaint
12 days after her alleged resignation. The Court reiterates that such act of filing said complaint is difficult to
reconcile with voluntary resignation.
In the case of Mobile Protective & Detective Agency, this Court ruled that resignation letters which are in the
nature of a quitclaim, lopsidedly worded to free the employer from liabilities reveal the absence of
voluntariness. Moreover, the quitclaim contained in the resignation letter does not contain stipulations
required for its efficacy. In the case of Flight Attendants and Stewards Association of the Philippines (FASAP) v.

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Philippine Airlines, Inc., this Court reiterated the ruling in EDI-Staffbuilders International, Inc. v. National Labor
Relations Commission which laid down the basic contents of a valid and effective quitclaim, to wit:
In order to prevent disputes on the validity and enforceability of quitclaims and waivers of employees under
Philippine laws, said agreements should contain the following:
1. A fixed amount as full and final compromise settlement;
2. The benefits of the employees, if possible, with the corresponding amounts, which the employees
are giving up in consideration of the fixed compromise amount;
3. A statement that the employer has clearly explained to the employee in English, Filipino, or in the
dialect known to the employees - that by signing the waiver or quitclaim, they are forfeiting or relinquishing
their right to receive the benefits which are due them under the law; and
4. A statement that the employees signed and executed the document voluntarily, and had fully
understood the contents of the document and that their consent was freely given without any threat, violence,
duress, intimidation, or undue influence exerted on their person.
As to Joy, there was no indication that she intended to voluntarily resign. There was no execution of a
resignation letter, but merely a quitclaim, which likewise does not contain the above-mentioned stipulations as
the same was a standard clearance and quitclaim form which Joy merely filled out. It is apparent that the
entries in the whole document were written by the same person and Joy was merely asked to sign the same. In
addition, the day after she signed the alleged quitclaim, she immediately filed a complaint for illegal dismissal.

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XII. Article 238 (formerly Article 232)

Colegio De San Juan De Letran v. Association of Employees and Faculty
of Letran et. al, September 18, 2000
Doctrine: If a collective bargaining agreement has been duly registered in accordance with Article 231 of the
Code, a petition for certification election or a motion for intervention can only be entertained within sixty (60)
days prior to the expiry date of such agreement. No petition for certification election for any representation
issue may be filed after the lapse of the sixty-day freedom period. The old CBA is extended until a new one is
signed. The rule is that despite the lapse of the formal effectivity of the CBA the law still considers the same as
continuing in force and effect until a new CBA shall have been validly executed. Hence, the contract bar rule
still applies.
Facts: The President of respondent union, Association of Employees and Faculty of Letran, initiated the
renegotiation of its Collective Bargaining Agreement with petitioner Colegio de San Juan de Letran for the last
two (2) years of the CBA's five (5) year lifetime from 1989-1994. The newly elected President wanted to
continue the renegotiation of the CBA but petitioner, through Fr. Edwin Lao, claimed that the CBA was already
prepared for signing by the parties. The parties submitted the disputed CBA to a referendum by the union
members, who eventually rejected the said CBA. Petitioner accused the union officers of bargaining in bad
faith before the NLRC. The union notified the (NCMB) of its intention to strike due to petitioner's:
non-compliance with the NLRC (1) order to delete the name of Atty. Federico Leynes as the union's legal
counsel; and (2) refusal to bargain. The union finally struck. On July 2, 1996, public respondent the Secretary of
Labor and Employment assumed jurisdiction and ordered all striking employees including the union president
to return to work and for petitioner to accept them back under the same terms and conditions before the
actual strike. Petitioner readmitted the striking members except Ambas, the new president.

Public respondent issued an order declaring petitioner guilty of unfair labor practice on two counts and
directing the reinstatement of private respondent Ambas with backwages

Issue:

1. Whether or not petitioner is guilty of unfair labor practice by refusing to bargain with the union when it
unilaterally suspended the ongoing negotiations for a new Collective Bargaining Agreement (CBA) upon
mere information that a petition for certification has been filed by another legitimate labor
organization? - YES.
2. Whether the termination of the union president amounts to an interference of the employees' right to
self-organization? - YES

Ruling:

1. YES. Petitioner's utter lack of interest in bargaining with the union is obvious in its failure to make a
timely reply to the proposals presented by the latter. More than a month after the proposals were
submitted by the union, petitioner still had not made any counter-proposals. This inaction on the part

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of petitioner prompted the union to file its second notice of strike on March 13, 1996. Petitioner could
only offer a feeble explanation that the Board of Trustees had not yet convened to discuss the matter
as its excuse for failing to file its reply. In order to allow the employer to validly suspend the bargaining
process there must be a valid petition for certification election raising a legitimate representation issue.
Hence, the mere filing of a petition for certification election does not ipso facto justify the suspension
of negotiation by the employer. The petition must first comply with the provisions of the Labor Code
and its Implementing Rules. Foremost is that a petition for certification election must be filed during
the sixty-day freedom period. The "Contract Bar Rule" under Section 3, Rule XI, Book V, of the Omnibus
Rules Implementing the Labor Code, provides that: " . If a collective bargaining agreement has been
duly registered in accordance with Article 231 of the Code, a petition for certification election or a
motion for intervention can only be entertained within sixty (60) days prior to the expiry date of such
agreement." The rule is based on Article 232 in relation to Articles 253, 253-A and 256 of the Labor
Code. No petition for certification election for any representation issue may be filed after the lapse of
the sixty-day freedom period. The old CBA is extended until a new one is signed. The rule is that despite
the lapse of the formal effectivity of the CBA the law still considers the same as continuing in force and
effect until a new CBA shall have been validly executed. Hence, the contract bar rule still applies. The
purpose is to ensure stability in the relationship of the workers and the company by preventing
frequent modifications of any CBA earlier entered into by them in good faith and for the stipulated
original period.
2. YES. Admittedly, management has the prerogative to discipline its employees for insubordination. But
when the exercise of such management right tends to interfere with the employees' right to
self-organization, it amounts to union-busting and is therefore a prohibited act. The dismissal of Ms.
Ambas was clearly designed to frustrate the Union in its desire to forge a new CBA with the College that
is reflective of the true wishes and aspirations of the Union members. Her dismissal was merely a
subterfuge to get rid of her, which smacks of a preconceived plan to oust her from the premises of the
College. It has the effect of busting the Union, stripping it of its strong-willed leadership. When
management refused to treat the charge of insubordination as a grievance within the scope of the
Grievance Machinery, the action of the College in finally dismissing her from the service became
arbitrary, capricious and whimsical, and therefore violated Ms. Ambas' right to due process."

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