Cases Assigned: 276-286 (TAKI, Sofia)

276. Oriental Shipmanagement Co. v. CA, 2006

277. Azcor Manufacturing, Inc. v. NLRC, 1999
278. Metro Transit Organization, Inc. v. NLRC, 1998
279. Shie Jie Corp./Seastar Ex-im Corp. v. National Federation of
Labor, 2005
280. Reyes v. CA, 2003
281. Intertrod Maritime, Inc. v. NLRC, 1991
282. Valdez v. NLRC, 1998
283. Willi Hahno Enterprises v. Maghuyop, 2004
284. Enriquez v. Security Services, Inc. v. Cabotaje, 2006
285. Universal Robina Sugar Milling Corp. v. Cabadella, 2008
286. Oxales v. Unilab, 2008
 Oriental Ship Management Co. v. CA
GR NO. 153750, January 25, 2006
Quisumbing, J.

Facts:

Petitioner Oriental Ship management Co., Inc. (Oriental, for brevity)

is a recruitment agency duly licensed by the Philippine Overseas
Employment Administration (POEA) to recruit seafarers for employment on
board vessels accredited to it. Kara Seal Shipping Co., Ltd. (Kara Seal, for
brevity) is petitioner’s foreign-based principal, which owns and manages
M/V Agios Andreas, a vessel accredited to petitioner.

Respondents Felicisimo Cuesta and Wilfredo Gonzaga were hired in

the latter part of 1998 as Third Engineers on board M/V Agios Andreas for a
one-year contract with a monthly salary of nine hundred US dollars
(US$900). It was through Oriental that Kara Seal hired them.

Issue:

Whether CA erred in setting aside the Labor Arbiter's and National

Labor Relations Commissions' findings that private respondents voluntarily
resigned from employment as shown by the Letters of Indemnity.

Ruling:

No, CA did not err in setting aside the decisions of the LA and NLRC.
It would have been illogical for respondents to resign and then claim that
they were illegally terminated. Well-entrenched is the rule that resignation is
inconsistent with the filing of a complaint for illegal dismissal.

Private agreements between parties cannot derogate from public right.

The law is solicitous of the welfare of employees because they stand on
unequal footing with their employers and are usually left at the mercy of the
latter. Hence, quitclaims signed by our migrant workers, such as the Letters
of Indemnity in the instant case, are viewed with strong disfavor. Public
policy dictates that they be presumed to have been executed at the behest of
the employer. It is the employer's duty to prove that such quitclaims were
voluntary. The employee's acknowledgment of his termination with nary a
protest or objection is not enough to satisfy the requirement of voluntariness
on his part.

Settled is the rule that quitclaims are ineffective in barring full

recovery of the benefits due the employee. The acceptance of any monetary
benefit, such as repatriation expenses and accrued wages in this case, would
not divest respondents of the right to fully claim the remainder of what is
rightfully due them.
 Azcor Manufacturing Inc. v. NLRC
G.R. No. 117963 February 11, 1999
Bellosillo, J.

Facts:

Candido Capulso filed with the Labor Arbiter a complaint for

constructive illegal dismissal and illegal deduction of P50.00 per day for the
period April to September 1989. Petitioners Azcor Manufacturing, Inc.
(AZCOR) and Arturo Zuluaga who were respondents before the Labor
Arbiter (Filipinas Paso was not yet a party then in that case) moved to
dismiss the complaint on the ground that there was no employer-employee
relationship between AZCOR and herein respondent Capulso; that the latter
became an employee of Filipinas Paso effective 1 March 1990 but
voluntarily resigned therefrom a year after. Capulso later amended his
complaint by impleading Filipinas Paso as additional respondent before the
Labor Arbiter.

On 14 January 1992, Labor Arbiter Felipe T. Garduque II denied the

motion to dismiss holding that the allegation of lack of employer-employee
relationship between Capulso and AZCOR was not clearly established.
Thereafter, the Labor Arbiter ordered that both parties conduct hearings for
the presentation of evidence.

Issue:

Whether or not the NLRC committed grave abuse of discretion in

declaring that private respondent.

Ruling:

As a rule, the original and exclusive jurisdiction to review a decision

or resolution of respondent NLRC in a petition for certiorari under Rule 65
of the Rules of Court does not include a correction of its evaluation of the
evidence but is confined to issues of jurisdiction or grave abuse of
discretion.

However, considering that private respondent died during the

pendency of the case before this Court, reinstatement is no longer feasible.
In lieu thereof, separation pay shall be awarded. With respect to the amount
of back wages, it shall be computed from the time of private respondent’s
illegal dismissal up to the time of his death.
 Metro Transit Organization Inc. v. NLRC
G.R. No. 122046 January 16, 1998
Bellosillo, J.

Facts:

Private respondent Ramon M. Garcia started working with petitioner

Metro Transit Organization (METRO) as a station teller in November 1984.
On 22 April 1992 he called up the office of METRO and asked his
immediate supervisor Carlos Limuaco if he could go on leave of absence as
he was proceeding to Cebu to look for his wife and children who suddenly
left home without his knowledge. After a few weeks of fruitless search he
returned to Manila.

When he reported to the office on 15 May 1992 Garcia was not

allowed to resume work but was directed by his section head, Felix Leyson,
to proceed to the legal department of METRO where he would undergo
investigation. There he was asked by one Noel Pili about his absence from
work. Still in a state of extreme agitation and weighed down by a serious
family problem, Garcia at once prepared a resignation letter. Then he left
again for the province to look for his family. But like his first attempt his
effort came to naught. Soon after, or on 4 June 1992, the Personnel
Committee of METRO approved his resignation.

Issue:

Whether or not the respondent tenders his resignation or is terminated

for his absence?

Ruling:

The Court has always held that the factual findings arrived at by a
trier of facts who is uniquely positioned to observe the demeanor of the
witnesses appearing before him and is most competent in judging the
credibility of the contending parties are accorded great weight and certitude.
In the instant case, we find nothing irrational or wayward in the affirmation
by the NLRC that Garcia was forced to resign thus was illegally dismissed.

There is therefore nothing to correct in the questioned act of the

NLRC. This circumstance obtaining, certiorari does not lie. Petitioner
could have fairly settled the problem of its employee and avoided litigation
had it listened judiciously to the former's explanation for his absences. An
employer may have to bend a little backwards if only to accommodate an
employee who is heavily burdened with a grave family crisis. For it is worth
remembering that the objectives of social justice can be realized only if
employers in appropriate situations extend their hand to their employees in
dire need of help.

Shie Jie Corp./Seastar Ex-im Corp. v. National Federation of Labor

G.R. NO. 153148 July 15, 2005
Sandoval-Gutierrez, J.

Facts:

Respondents, in their complaint, alleged that they were employed as

fish processors by petitioners. On July 20, 1998, Sammy Yang and Michael
Yang, petitioners, confronted them about their union activities.
Immediately, they were ordered to go home. The next day, petitioners
suspended them for one week effective July 22 to 28, 1998. Upon their
return, they were served with a notice of petitioners’ memorandum
terminating their services for abandonment of work.

Petitioners, in their answer, denied respondents’ allegations. They

claimed that on July 20, 1998, about 2:45 o’clock in the afternoon, 13 rank-
and-file employees staged a walkout and abandoned their work. Among
them were respondents Wilfredo Toribio, Nida Toribio, Yolanda Lorenzo,
Sorraya Amping, Vivian Mendoza, Merylene Delos Reyes, Arnold
Francisco, and Manuel Francisco. As a consequence, petitioners’ business
operations were interrupted and paralyzed, prompting them to issue
memorandum-suspending respondents for one week or from July 22 to 28,
1998. Instead, respondents Ernesto Etrata, Sorraya Amping, Yasher
Taning, Yolanda Lorenzo, Merylene Delos Reyes, and Wilfredo Toribio
submitted their resignation letters and quitclaims.

Issue:

Whether or not the Court of Appeals erred in holding that petitioners

failed to prove by substantial evidence that respondents voluntarily resigned
and/or abandoned their work.

Ruling:

Voluntary resignation is defined as the act of an employee, who finds

himself in a situation in which he believes that personal reasons cannot be
sacrificed in favor of the exigency of the service; thus, he has no other
choice but to disassociate himself from his employment. Acceptance of a
resignation tendered by an employee is necessary to make the resignation
effective. No such acceptance, however, was shown in the instant case.
 Dr. Pedruto Reyes v. CA
G.R. No. 154448, August 15, 2003
Ynares-Santiago, J.
Facts:

On 1989, Leong Hup of Malaysia thru its managing director Francis

Lau, appointed petitioner Reyes as Technical/Sales Manager. In 1992,
Leong Hup formed Phil. Malay Poultry Breaders, Inc (Philmalay) and
petitioner was appointed General Manager. From 1996-1997, respondent
suffered losses, which caused them to reduce production and retrench
employees. In 1998, petitioner tendered his redignation and requested the
same benefits granted as those retrench and resigned employees of the
company. Philmalay retrench petitioner and promised him separation pay
according to the Labor Code. Howevee, petitioner was offered a separation
pay equivalent only to four months. Petitioner rejected this. Petitioner file
before the Labor Arbiter for underpayment of wages and non-payment of
separation pay, sick leave, vacation leave and other benefits. The Labor
Arbiter ruled in favor of petitioner.

Issue:

1) Did CA err in dismissing the petition for technicalities?

2) Should the Labor Arbiter’s decision be reinstated?

Ruling:

1) Yes, rules of procedure should not be applied in a very technical sense,

for they are adopted to help secure, not override substantial justice. In
Ramos v. CA, a dismissal should be reconsidered once petitioner
complies with the required attachments. In Jaro v. CA, substantial
compliance of an appellant may call for relaxation of the rules of
procedure. The same leniency should be applied in the case at bar since
petitioner demonstrated willingness to comply with the requirements set
by the rules, otherwise, application of the rules of procedure in a very
rigid and technical sense would defeat the end of justice.

2) No, modifications were needed such as reducing, as the NLRC

correctly determined, of the length of employment to 8 years from 9, that
petitioner is not entitled to compensation from January 1 to 19, 1998,
since he did not proved that he rendered services during said period, that
car and insurance benefits are only granted during the course of
employment and should not be part of the separation package, and
demand for rental payment of his house as office of Philmalay from
Dec.1, 1989 to July 1996 is not within the jurisdiction of the NLRC, but
 the regular courts. And being that respondents did not appeal the
decision of the NLRC, then said decision is deemed satisfactory to
respondents including the order of the NLRC to provide petitioner with
legal services in the illegal recruitment filed against the former in his
stint as head of the Philmalay.
Intertrod Maritime Inc. and Troodos Shipping Co. v. NLRC
G.R. No. 81087, June 19, 1991
Padilla, J.

Facts:

On 10 May 1982, private respondent Ernesto de la Cruz signed a

shipboard employment contract with petitioner Troodos Shipping Company
as principal and petitioner Intertrod Maritime, Inc., as agent to serve as Third
Engineer on board the M/T "BREEDEN" for a period of twelve (12) months
with a basic monthly salary of US$950.00.
Private respondent eventually boarded a sister vessel, M/T "AFAMIS"
and proceeded to work as the vessel's Third Engineer under the same terms
and conditions of his employment contract previously referred to.
On 26 August 1982, while the ship (M/T "Afamis") was at Port Pylos,
Greece, private respondent requested for relief, due to "personal reason."
The Master of the ship approved his request but informed private respondent
that repatriation expenses were for his account and that he had to give thirty
(30) days notice in view of the Clause 5 of the employment contract so that a
replacement for him (private respondent) could be arranged.

Issue:
Whether or not complainant's termination is illegal?

Ruling:

No, termination is not illegal as the employee voluntarily resigned.

Resignations, once accepted and being the sole act of the employee,

may not be withdrawn without the consent of the employer.  In the instant
case, the Master had already accepted the resignation and although,
the private respondent was being required to serve the thirty (30) days notice
provided in the contract, his resignation was already approved.  Private
respondent cannot claim that his resignation ceased to be effective because
he was not immediately discharged in Port Pylos, Greece, for he could no
longer unilaterally withdraw such resignation.  When he later signified his
intention of continuing his work, it was already up to the petitioners to
accept his withdrawal of his resignation.  
Once an employee resigns and his resignation is accepted, he no
longer has any right to the job.  If the employee later changes his mind, he
must ask for approval of the withdrawal of his resignation from his
employer, as if he were re-applying for the job.  It will then be up to the
employer to determine whether or not his service would be continued.  If the
employer accepts said withdrawal, the employee retains his job.  If the
employer does not, as in this case, the employee cannot claim illegal
dismissal for the employer has the right to determine who his employees will
be.  To say that an employee who has resigned is illegally dismissed, is to
encroach upon the right of employers to hire persons who will be of service
to them.
REYNALDO VALDEZ v. NLRC
GR No. 125028, Feb 09, 1998
Regalado, J.

Facts:

Petitioner was a bus driver on commission basis, with an average

earning of P6,000.00 a month. In 1993, the air-conditioning unit of the bus
which petitioner was driving suffered a mechanical breakdown. Respondent
company told him to wait until the air- conditioning unit was repaired.
Meanwhile, no other bus was assigned to petitioner to keep him gainfully
employed.
Thereafter, petitioner continued reporting for work, only to find out
each time that the air- conditioning unit had not been repaired. Several
months elapsed but he was never called by respondent company to report for
work. Later, petitioner found out that the bus formerly driven by him was
plying an assigned route as an ordinary bus, with a newly-hired driver.
Petitioner filed a complaint against private respondent for illegal dismissal.
Private respondent, on the other hand, admitted that it told petitioner
to wait until the air- conditioning unit of the bus was repaired. However,
private respondent alleged that after the bus driven by the petitioner broke
down due to his fault and negligence, the latter did not report for work. The
Labor Arbiter rendered a decision declaring complainant illegally dismissed
and ordered NELBUSCO the payment of backwages, separation pay and
refund of the cash bond. On appeal, the NLRC set aside the decision
directing respondent to reinstate complainant back to work but without
backwages.

Issue:
Whether or not petitioner was illegally dismissed.

Ruling:
Petitioner was illegally dismissed.
Article 286 of the Labor Code, the bona fide suspension of the
operation of a business or undertaking for a period not exceeding six months
shall not terminate employment. Consequently, when the bona fide
suspension of the operation of a business or undertaking exceeds six months,
then the employment of the employee shall be deemed terminated. By the
same token and applying said rule by analogy, if the employee was forced to
remain without work or assignment for a period exceeding six months, then
he is in effect constructively dismissed the reason for the stoppage of
operation of the bus assigned to petitioner was the breakdown of the
airconditioning unit, which is a valid reason for the suspension of its
operation. However, such suspension regarding that particular bus should
likewise last only for a reasonable period of time.
The period of six months was more than enough for it to cause the
repair thereof. Beyond that period, the stoppage of its operation was already
legally unreasonable and economically prejudicial to herein petitioner who
was not given a substitute vehicle to drive.
Willi Hahn Enterprises v. Lilia Maghuyo
G.R. No. 160348 December 17, 2004
Ynares-Santiago, J.

Facts:

Sometime in 1982, respondent Lilia Maghuyop was hired by

petitioner Willi Hahn as nanny of one of his sons. In 1986, she was
employed as salesclerk of Willi Hahn Enterprises (Ali Mall, Cubao branch),
an authorized dealer of sporting goods, guns and ammunitions. In 1996, she
was promoted as store manager of its branch in Shoe Mart (SM) Cebu, with
a monthly salary of P8,240.00.

On February 25, 1998, petitioner conducted an Inventory Report and

discovered that its SM Cebu branch incurred stock shortages and non-
remittances in the total amount of P27,727.39. In the latter part of July 1998,
petitioner decided to terminate the services of respondent, however, before
he could do so, the latter tendered her resignation. Believing the good faith
of respondent in resigning, petitioner decided not to file charges against her
anymore.

On the other hand, respondent claimed that on July 22, 1998, while
she was in SM Cebu branch, she was approached by Tony Abu and Cesar
Araneta who ordered her to close shop and to write a letter to Mr. and Mrs.
Hahn thanking them for the years she had been in their employ and for all
the benefits she received from them.

Issue:

Whether or not the respondent filing of illegal dismissal is a mere

afterthought?

Ruling:

The rule that the filing of a complaint for illegal dismissal is

inconsistent with resignation is not applicable to the instant case. The filing
of an illegal dismissal case by respondent was evidently a mere afterthought.
It was filed not because she wanted to return to work but to claim separation
pay and back wages.
 Hence, we find no reason to deviate from the conclusion of both the
NLRC and the Labor Arbiter that respondent, having tendered a voluntary
resignation was not illegally dismissed.

Enriquez Security Services Inc. v. Cabotaje

G.R. NO. 147993, July 21, 2006
Corona, J.

Facts:

Sometime in January 1979, respondent Victor A. Cabotaje was

employed as a security guard by Enriquez Security and Investigation
Agency (ESIA). On November 13, 1985, petitioner Enriquez Security
Services, Inc. (ESSI) was incorporated. Respondent continued to work as
security guard in petitioner’s agency. On reaching the age of 60 in July
1997, respondent applied for retirement.

Petitioner acknowledged that respondent was entitled to retirement benefits

but opposed his claim that the computation of such benefits must be
reckoned from January 1979 when he started working for ESIA. It claimed
that the benefits must be computed only from November 13, 1985 when
ESSI was incorporated.

Issue:

Whether or not the benefits must be computed only from November

13, 1985 when ESSI was incorporated.

Ruling:

The attempt to make the security agencies appear as two separate

entities, when in reality they were but one, was a devise to defeat the law
and should not be permitted. Although respect for corporate personality is
the general rule, there are exceptions. In appropriate cases, the veil of
corporate fiction may be pierced as when it is used as a means to perpetrate a
social injustice or as a vehicle to evade obligations. Petitioner was thus
correctly ordered to pay respondent’s retirement under RA 7641, computed
from January 1979 up to the time he applied for retirement in July 1997.
 Universal Robina Sugar Miling Corp. v. Cabadella
G.R. NO. 156644, July 28, 2008
Nachura, J.
Facts:

Petitioner Universal Robina Sugar Milling Corporation (URSUMCO)

is a domestic corporation engaged in the sugar milling business and
petitioner Renato Cabati is URSUMCO’s manager. Respondent Agripino
Caballeda (Agripino) worked as welder for URSUMCO from March 1989
until June 23, 1997, while respondent Alejandro Cadalin (Alejandro) worked
for URSUMCO as crane operator from 1976 up to June 15, 1997.
On April 24, 1991, John Gokongwei, Jr., President of URSUMCO,
issued a Memorandum establishing the company policy on “Compulsory
Retirement” (Memorandum) of its employees. The memorandum provides
that all employees corporate-wide who attain 60 years of age on or before
April 30, 1991 shall be considered retired on May 31, 1991.
Subsequently, on December 9, 1992, Republic Act (RA) No. 76416
was enacted into law amending Article 287 of the Labor Code. On April 29,
1993, URSUMCO and the National Federation of Labor (NFL), entered into
a Collective Bargaining Agreement (CBA).
Agripino and Alejandro (respondents), having reached the age of 60,
were allegedly forced to retire by URSUMCO.

ISSUE:
Whether respondents were illegally terminated on account of
compulsory retirement or the same voluntarily retired.

RULING:

Yes, the court sustained the ruling of the CA that respondents did not
voluntarily retire but were rather forced to retire, tantamount to illegal
dismissal.
It is evident from the records that when respondents were
compulsorily retired from the service, R.A. 7641 was already in full force
and effect. Also, it may be stressed that the CBA does not per se
specifically provide for the compulsory retirement age nor does it provide
for an optional retirement plan. It merely provides that the retirement
benefits accorded to an employee shall be in accordance with law.
Thus, we must apply Art. 287 of the Labor Code which provides for
two types of retirement: (a) compulsory and (b) optional. The first takes
place at age 65, while the second is primarily determined by the collective
bargaining agreement or other employment contract or employer’s
retirement plan. In the absence of any provision on optional retirement in a
collective bargaining agreement, other employment contract, or employer’s
retirement plan, an employee may optionally retire upon reaching the age of
60 years or more, but not beyond 65 years, provided he has served at least
five years in the establishment concerned. That prerogative is exclusively
lodged in the employee.
Alberto P. Oxales v. United Laboratories, Inc.
G.R. NO. 152991, July 21, 2008
Reyes, R.T., J.

Facts:

Sometime in 1959, UNILAB established the United Retirement Plan

(URP). The plan is a comprehensive retirement program aimed at providing
for retirement, resignation, disability, and death benefits of its members. An
employee of UNILAB becomes a member of the URP upon his
regularization in the company. The URP mandates the compulsory
retirement of any member-employee who reaches the age of 60. Both
UNILAB and the employee contribute to the URP. On one hand, UNILAB
provides for the account of the employee an actuarially-determined amount
to Trust Fund A. On the other hand, the employee chips in 2½% of his
monthly salary to Trust Fund B. Upon retirement, the employee gets both
amounts standing in his name in Trust Fund A and Trust Fund B. Oxales
joined UNILAB on September 1, 1968. He was compulsorily retired by
UNILAB when he reached his 60th birthday on September 7, 1994, after
having rendered service of twenty-five (25) years, eleven (11) months, and
six (6) days. He was then Director of Manufacturing Services Group.

Issue:

Whether in the computation of Oxales’ retirement and sick leave

benefits, UNILAB should have factored such benefits like bonuses, cash and
meal allowances, rice rations, service incentive leaves, and 1/12 of the 13th
month pay.

Ruling:

No, Oxales is not entitled to the additional retirement benefits he is

asking because URP is very clear. URP is not contrary to law, morals, public
policy, public order thus it must be sustained. Inclusion of one is the
exclusion of others.

A retirement plan in a company partakes the nature of a contract, with

the employer and the employee as the contracting parties. It creates a
contractual obligation in which the promise to pay retirement benefits is
made in consideration of the continued faithful service of the employee for
the requisite period. The employer and the employee may establish such
stipulations, clauses, terms, and conditions as they may deem convenient.

The clear language of the URP should be respected. The law respects
the freedom to contract but, at the same time, it is very zealous in protecting
the contracting parties and the public in general. So much so that the
contracting parties need not incorporate existing laws in their contract. When
the provision of the party is lacking, provision of the law supplies it.
Hailah Dilangalen Cases 85, 89-99

85. Nissan Motors Phils., Inc. v. Sec. of Labor and Employment, 2006
89. Samahang Manggagawa sa Top Forms v. NLRC, 1998
90. Davao Integrated Port Stevedoring Services v. Abarquez, 1993
91.New Pacific Timber and Supply v. NLRC, 2000
92.Mactan Workers Union v. Aboitiz, 1972
93.Babcock-Hitachi (Phils) v. Babcock-Hitachi, 2005
94.Kimberly Clark Phils v. Lorredo, 1993
95.Davao Integrated v. Abarques, 1993
96.Imperial Textile Miles v. Calica, 1992
97.The Consolidated Bank & Trust Corporation (SOLIDBANK) v.
Bureau of Labor Relations
98.Luzon Development Bank v. Association of Luzon Dev’t Employees,
1995
99.Panay Electric Co. v. NLRC, 1995
 Nissan Motors Philipppines, Inc. vs. Sec. of Labor
G.R. NOS. 158190-91, June 21, 2006
Garcia, J.

Facts:

The case turns on the labor disputes triggered by a collective

bargaining deadlock between Nissan Motor and the union resulting in the
filing of four notices of strike with the national conciliation and mediation
board. The first notice of strike on the ground of alleged unfair labor
practice, stemmed from the suspension of about 140 company employees
following the disruptive protest action arising from the employees’ demand
for payment of the second of their 13th month pay. The union filed the
second strike notice on the ground of deadlock in collective bargaining
involving a mix of economic and non-economic issues.

The DOLE, upon Nissan motor’s petition, issued an order assuming

jurisdiction over the dispute at Nissan motor. The dole expressly enjoined
any strike or lockout and directed the parties to cease and desist from
committing any act that might exacerbate the situation, and for the union to
refrain from any slowdown and other similar activities that may disrupt
company operations or bring its production to below its normal and usual
levels.

Issue:

WON the slowdown violates the CBA.

Ruling:

The conclusion of the public respondents, secretary of labor and

employment, as confirmed by the CA, is that the union and its members
indeed “engaged in work slowdown which under the circumstances in which
they were undertaken constitute illegal strike.” The defiance came in the
form of the continuation of the slowdown enjoined in the underlying
assumption order, by the strike actually staged by the union, its officers and
members, the closure of the company’s offices and plant premises and the
barricading of the main gates. In fact, the Dole Secretary had to ask the
intervention of the Laguna Philippine National Police to assist the company
in opening what appeared to be padlocked and welded gates leading to
company’s hands were not entirely clean, having contributes to the ensuing
deteriorating impasse between labor and management.

Samahang Manggagawa Sa Top Forms Manufacturing United

Workers vs. NLRC
G.R. No. 113856, September 7, 1998
ROMERO, J
Facts:

Petitioner Samahang Manggagawa sa Top Form Manufacturing —

United Workers of the Philippines (SMTFM) was the certified collective
bargaining representative of all regular rank and file employees of private
respondent Top Form Manufacturing Philippines, Inc. At the collective
bargaining negotiation, the parties agreed to discuss unresolved economic
issues. According to the minutes of the meeting, Article VII of the collective
bargaining agreement was discussed.
On October 15, 1990, the RTWPB-NCR issued Wage Order No. 01
granting an increase of P17.00 per day in the salary of workers. This was
followed by Wage Order No. 02 dated December 20, 1990 providing for a
P12.00 daily increase in salary.
As expected, the union requested the implementation of said wage
orders. However, they demanded that the increase be on an across-the-board
basis. Private respondent refused to accede to that demand. Instead, it
implemented a scheme of increases purportedly to avoid wage distortion.
Consequently, the union filed a complaint with the NCR NLRC
alleging that private respondent’s act of “reneging on its
undertaking/promise clearly constitutes act of unfair labor practice through
bargaining in bad faith.”

Issue:
Whether or not an employer committed an unfair labor practice by
bargaining in bad faith and discriminating against its employees.

Ruling:
To start with, if there was indeed a promise or undertaking on the part
of private respondent to obligate itself to grant an automatic across-the-
board wage increase, petitioner union should have requested or demanded
that such “promise or undertaking” be incorporated in the CBA. After all,
petitioner union has the means under the law to compel private respondent to
incorporate this specific economic proposal in the CBA. It could have
invoked Article 252 of the Labor Code defining “duty to bargain,” thus, the
duty includes “executing a contract incorporating such agreements if
requested by either party.” Petitioner union’s assertion that it had insisted on
the incorporation of the same proposal may have a factual basis considering
the allegations in the aforementioned joint affidavit of its members.
However, Article 252 also states that the duty to bargain “does not compel
any party to agree to a proposal or make any concession.”
Thus, petitioner union may not validly claim that the proposal
embodied in the Minutes of the negotiation forms part of the CBA that it
finally entered into with private respondent.

Davao Integrated Port Stevedoring Services vs. Abarquez

GR No. 102132, March 19, 1993
ROMERO, J

Facts:

Petitioner and private respondent, THE ASSOCIATION OF TRADE

UNIONS (ATU-TUCP), entered into a CBA providing for 2 sections on sick
leave with pay benefits which apply to both the regular non-intermittent
workers or those workers who render a daily eight-hour service to the
company as governed by Section 1, Article VIII of the 1989 CBA, and the
intermittent field workers who are members of the regular labor pool and the
present regular extra labor pool, as governed by Sec. 3 thereof.

Sec. 1, however, of said CBA had a proviso that only those regular
workers of the company whose work are not intermittent, are entitled to the
commutation of sick leave privilege. A proviso not found in Sec. 3. This
caused the new assistant manager to discontinue the commutation of the
unenjoyed portion of the sick leave with pay benefits of the intermittent
workers or its conversion to cash.

The Union objected and brought the matter for voluntary arbitration
before the National Conciliation and Mediation Board with respondent
Abarquez acting as voluntary arbitrator who later issued an award in favor of
the Union. Hence, the instant petition.

Issue:

Whether or not intermittent (irregular) workers are entitled to

commutation of their unenjoyed sick leave with pay benefits.

Ruling:

The CBA has two (2) sections on sick leave with pay benefits which
apply to two (2) distinct classes of workers in petitioner’s company, namely:
(1) the regular non-intermittent workers or those workers who render a daily
eight-hour service to the company and (2) intermittent field workers who are
members of the regular labor pool and the present regular extra labor pool.
 Sick leave benefits, like other economic benefits stipulated in the
CBA such as maternity leave and vacation leave benefits, among others, are
by their nature, intended to be replacements for regular income which
otherwise would not be earned because an employee is not working during
the period of said leaves. They are non-contributory in nature, in the sense
that the employees contribute nothing to the operation of the benefits. By
their nature, upon agreement of the parties, they are intended to alleviate the
economic condition of the workers.

NEW PACIFIC TIMBER SUPPLY CO. V. NLRC

G.R. No. 124224. March 17, 2000
Kapunan, J.

Facts:

The National Federation of Labor (NFL), was certified as the sole and
exclusive bargaining representative of all the regular employees of new
pacific timber. As such, NFL started to negotiate for better terms and
conditions of employment for the employees in the bargaining unit to which
it represented, however, the same was allegedly met with stiff resistance by
petitioner NFL, so the former was prompted to file a complaint for unfair
labor practice (ULP) against the latter on the ground of refusal to bargain
collectively.
The then Executive Labor Arbiter Hakim Abdulwahid, issued an order
declaring (a) petitioner co. guilty of ULP; and (b) the CBA proposals
submitted by the NFL as the CBA between the regular rank and file
employees in the bargaining unit and petitioner co.
Petitioner appealed the above order to the NLRC. The NLRC
rendered the decision dismissing the appeal for lack of merit.

Issue:
Whether the private respondents is entitled to benefits under CBA
inspite of the fact that they were not employed by the petitioner.

Ruling:
It is clear from the provision of article 253 of the labor code that until
a new collective bargaining agreement has been executed by and between
the parties, they are duty-bound to keep the status quo and to continue in full
force and effect the terms and conditions of the existing agreement. The law
does not provide for any exception nor qualification as to which of the
economic provisions of the existing agreement are to retain force and effect;
therefore, it must be understood as encompassing all the terms and
conditions in the said agreement.
In the case at bar, no new agreement was entered into by and between
petitioner company and NFL pending appeal of the decision from the
NLRC; nor were any of the economic provisions and/or terms and
conditions pertaining to monetary benefits in the existing agreement
modified or altered. Therefore, the existing CBA in its entirety continues to
have legal effect.

Mactan Workers Union vs. Don Ramon Aboitiz

G.R. No. L-30241, June 30, 1972
Fernando, J.

Facts:
Defendant Cebu Shipyard & Engineering Works, Inc. in Lapu-Lapu
City is employing laborers and employees belonging to two rival labor
unions. 72 of these laborers whose names appear in the complaint are
affiliated with the Mactan Workers Union while the rest are members of the
intervenor Associated Labor Union. Defendant Cebu Shipyard &
Engineering Works, Inc. and the Associated Labor Union entered into a
CBA. The Company agrees to give a profit-sharing bonus to its employees
and laborers to be taken from ten per cent (10%) of its net profits or net
income derived from the direct operation of its shipyard and shop in Lapu-
Lapu to be payable in two (2) installments, the first installment being
payable in March and the second installment in June, each year out of the
profits in agreement. If unaacepted, the profit-sharing bonus which the said
employee or laborer is entitled under this Agreement, will be returned to the
Company.

The members of the Mactan Workers Union failed to receive their

shares in the second installment of bonus because they did not like to go to
the office of the ALU to collect their shares. In accordance with the terms of
the CBA, the uncollected shares of the plaintiff union members was returned
by the ALU to the defendant corporation. At the same time the defendant
corporation was advised by the ALU not to deliver the said amount to the
members of the Mactan Workers Union unless ordered by the Court. For the
recovery of claim, this case was filed with the lower court and rendered
decision in favor of the plaintiffs.

Issue:
Whether or not the lower court erred in requiring literal compliance
with the terms of a collective bargaining contract?

Ruling:
 The terms and conditions of a collective bargaining contract constitute
the law between the parties. Those who are entitled to its benefits can invoke
its provisions. Nor does it suffice as a defense that the claim is made on
behalf of non-members of intervenor Associated Labor Union, for it is a
well-settled doctrine that the benefits of a collective bargaining agreement
extend to the laborers and employees in the collective bargaining unit,
including those who do not belong to the chosen bargaining labor
organization. Any other view would be a discrimination on which the law
frowns. The labor union that gets the majority vote as the exclusive
bargaining representative does not act for its members alone. It represents all
the employees in such a bargaining unit. The assignment of error that the
City Court of Lapu-Lapu was bereft of jurisdiction is singularly
unpersuasive.

Babcock-Hitachi (Phils.), Inc. v. Babcock-Hitachi (Phils.), Inc. Makati

Employees Union
G.R. NO. 156260, March 10, 2005
SANDOVAL-GUTIERREZ, J.

Facts:
Babcock-Hitachi (Phils.), Inc., is a manufacturing corporation, with
branches at Makati City and Bauan, Batangas. Sometime in December 1997,
petitioner, to improve the operating efficiency and coordination among its
various departments, formulated a plan to transfer the Design Department
from its Makati office to Bauan, Batangas. With this development,
petitioner, on February 24, 1999, sent separate notices to Justiniano G.
Iniego, Xavier Aguila and Bonifacio B. Vergara, who occupied Engineer 1
positions at the Design Department, of their re-assignment and transfer to
Bauan, Batangas effective April 1, 1999. This prompted them to claim for
their relocation allowance provided by Sections 1 and 2, Article XXI of the
collective bargaining agreement (CBA).
However, petitioner refused to implement the CBA, claiming that the
affected employees are not entitled to relocation allowance under Policy
Statement No. BHPI-G-044A dated October 1, 1996 considering that they
are residents of Bauan or its adjacent towns. Thus, the affected union
members (Justiniano Iniego, et al.), represented by Babcock-Hitachi (Phils.),
Inc., Makati Employees Union,  filed with the National Conciliation and
Mediation Board (NCMB) a complaint for payment of relocation allowance
against petitioner. In a Submission Agreement dated March 18, 1999, the
parties stipulated to submit the case for voluntary arbitration.

Issue:
Whether or not union members are entitled to relocation allowance in
light of the CBA between the parties.

Ruling:
Yes, any doubt or ambiguity in the contract between management and
the union members should be resolved in favor of the latter. This is pursuant
to Article 1702 of the Civil Code which provide that in case of doubt, all
labor legislation and all labor contracts shall be construed in favor of the
safety and decent living for the laborer.
Pertinent are Sections 1 and 2, Article XXI of the CBA which
provides that employees transferred from Makati City to Bauan, Batangas
are entitled to a monthly relocation allowance of P1,500.00, provided their
transfer is permanent or for a period exceeding one month. Such provisions
need no interpretation for they are clear. Contracts which are not ambiguous
are to be interpreted according to their literal meaning and not beyond their
obvious intendment. In Mactan Workers Union v. Aboitiz, we held that "the
terms and conditions of a collective bargaining contract constitute the
law between the parties. Those who are entitled to its benefits can
invoke its provisions. In the event that an obligation therein imposed is not
fulfilled, the aggrieved party has the right to go to court for redress."
Kimberly-Clark Philippines vs. Voluntary Arbitrator Danilo Loredo
and United Kimberly-Clark Employees-PTGWO
G.R. No. 103090, September 21, 1993
VITUG, J.

Facts:
Kimberly-Clark Philippines, Inc. (KCPI), seeks to set aside the
Resolutions of 15 October 1991 and 21 November 1991 of public
respondent Voluntary Arbitrator Danilo Lorredo, holding that the nephew of
a retired employee should be employed by KCPI as his replacement pursuant
to Section 1, Article XX, of their Collective Bargaining Agreement
("CBA"). Danilo L. Guerrero, an employee assigned as Operator B in
KCPI's Finishing Section, voluntarily resigned on 02 January 1991, after
thirteen (13) years and three (3) months of employment with the petitioner
corporation. Pursuant to Section I, Article XX, of the aforementioned CBA,
Guerrero, through the Union, recommended for hiring his nephew who is a
collateral relative within the third civil degree. KCPI informed the Union,
through its President, that it could not act favorably on Guerrero's
recommendee. The private respondent argued that, since Guerrero's
legitimate children are still minors, he could validly recommend for hiring
his nephew.

Issue:
Whether or not Guerrero can recommend his nephew for hiring and
the petitioner corporation is obligated to hire him under 1, Article XX, of the
Collective Bargaining Agreement.

Ruling:
No. A collective bargaining agreement, just like any other contract, is
respected as the law between the contracting parties and compliance
therewith in good faith is mandated. The intention of the parties is
primodial; if the terms of the contract are clear, the literal meaning of the
stipulations shall control, but if the words appear to be contrary to the
evident intention of the parties, the latter shall prevail over the former.
 The company has agreed in its CBA with the employees "to employ
(an) immediate member of the family provided qualified upon the
employee's resignation, retirement, disability or death." Covered by the term
"(an) immediate member of the family" are the employee's legitimate
children and, in default thereof, a collateral relative within the third civil
degree. As we see it, the phrase "in default thereof" has not been intended or
contemplated by the parties as having a preclusive effect within the group. It
simply sets a priority on who can possibly be recommendees for
employment.
KCPI is not obligated to unconditionally accept the recommendee
since the latter must still meet the required employment standards
theretofore set by it. And even when the recommendee is qualified, he,
nonetheless, shall be hired only, pursuant to the agreement, on a
"probationary status," an added measure, to further prove his worth for
eventual regular employment. The company is not, therefore, left without its
own safeguards under the agreement.
Davao Integrated Port Stevedoring Services vs. Abarquez
GR No. 102132, March 19, 1993
Romero, J.

Facts:

Petitioner and private respondent, The Association of Trade Unions

(ATU-TUCP), entered into a CBA providing for 2 sections on sick leave
with pay benefits which apply to both the regular non-intermittent workers
or those workers who render a daily eight-hour service to the company as
governed by Section 1, Article VIII of the 1989 CBA, and the intermittent
field workers who are members of the regular labor pool and the present
regular extra labor pool, as governed by Sec. 3 thereof.

Sec. 1, however, of said CBA had a proviso that only those regular
workers of the company whose work are not intermittent, are entitled to the
commutation of sick leave privilege.A proviso not found in Sec. 3. This
caused the new assistant manager to discontinue the commutation of the
unenjoyed portion of the sick leave with pay benefits of the intermittent
workers or its conversion to cash.

The Union objected and brought the matter for voluntary arbitration
before the National Conciliation and Mediation Board with respondent
Abarquez acting as voluntary arbitrator who later issued an award in favor of
the Union. Hence, the instant petition.

Issue:
Whether or not intermittent (irregular) workers are entitled to
commutation of their unenjoyed sick leave with pay benefits.

Ruling:
 The CBA has two (2) sections on sick leave with pay benefits which
apply to two (2) distinct classes of workers in petitioner’s company, namely:
(1) the regular non-intermittent workers or those workers who render a daily
eight-hour service to the company and (2) intermittent field workers who are
members of the regular labor pool and the present regular extra labor pool.

Sick leave benefits, like other economic benefits stipulated in the

CBA such as maternity leave and vacation leave benefits, among others, are
by their nature, intended to be replacements for regular income which
otherwise would not be earned because an employee is not working during
the period of said leaves. They are non-contributory in nature, in the sense
that the employees contribute nothing to the operation of the benefits. By
their nature, upon agreement of the parties, they are intended to alleviate the
economic condition of the workers.

INDOPHIL TEXTILE WORKERS UNION- PTGWO VS. CALICA

G.R. No. 96490, February 3, 1992,
J. Medialdea

Facts:
In April, 1987, petitioner Indophil Textile Mill Workers Union-
PTGWO and private respondent Indophil Textile Mills, Inc. executed a
collective bargaining agreement effective from April 1, 1987 to March 31,
1990. Subsequently, Acrylic applied for registration with the Board of
Investments for incentives under the 1987 Omnibus Investments Code. The
application was approved on a preferred non-pioneer status. In 1988, Acrylic
became operational and hired workers according to its own criteria and
standards. Sometime in July, 1989, the workers of Acrylic unionized and a
duly certified collective bargaining agreement was executed. In 1990 or a
year after the workers of Acrylic have been unionized and a CBA executed,
the petitioner union claimed that the plant facilities built and set up by
Acrylic should be considered as an extension or expansion of the facilities of
private respondent Company pursuant to Section 1(c), Article I of the CBA,
to wit, c) This Agreement shall apply to the Company's plant facilities and
installations and to any extension and expansion thereat. In other words, it is
the petitioner's contention that Acrylic is part of the Indophil bargaining unit.
Voluntary Arbitrator ruled in favor of Indophil.

Issue:
Whether Indophil Acrylic is a separate and distinct entity from
respondent company for purposes of union representation.

Ruling:
Yes. Under the doctrine of piercing the veil of corporate entity, when
valid grounds therefore exist, the legal fiction that a corporation is an entity
with a juridical personality separate and distinct from its members or
stockholders may be disregarded. In such cases, the corporation will be
considered as a mere association of persons. The members or stockholders
of the corporation will be considered as the corporation that is liability will
attach directly to the officers and stockholders.
In the case at bar, petitioner seeks to pierce the veil of corporate entity
of Acrylic, alleging that the creation of the corporation is a devise to evade
the application of the CBA between petitioner Union and private respondent
Company. The fact that the businesses of private respondent and Acrylic are
related, that some of the employees of the private respondent are the same
persons manning and providing for auxiliary services to the units of Acrylic,
and that the physical plants, offices and facilities are situated in the same
compound, it is our considered opinion that these facts are not sufficient to
justify the piercing of the corporate veil of Acrylic. Hence, the Acrylic not
being an extension or expansion of private respondent, the rank-and-file
employees working at Acrylic should not be recognized as part of, and/or
within the scope of the petitioner, as the bargaining representative of private
respondent.

The Consolidated Bank & Trust Corporation (Solidbank) v. BLR

G.R. No. 138569. September 11, 2003
Carpio, J.

Facts:
Solidbank and Solidbank Employees’ Union (Union) were set to
renegotiate the economic provisions of their 1997-2001 CBA to cover the
remaining 2 years (2000-2001). Negotiations commenced but seeing that an
agreement was unlikely, the Union declared a deadlock and filed a Notice of
Strike on December 29, 1999. In view of the impending actual strike, then
DOLE Sec. Bienvenido E. Laguesma assumed jurisdiction over the labor
dispute and in an Assumption Order dated January 18, 2000 directed the
parties “to cease and desist from committing any and all acts that might
exacerbate the situation”. In another Order dated March 24, 2000, Sec.
Laguesma resolved all economic and non-economic issues submitted by the
parties.
Dissatisfied with the ruling, the Union held a rally in front of the
DOLE Office in Intramuros, Manila, simultaneous with the filing of their
MR.
The employees’ work abandonment/boycott lasted for 3 days. On the
3rd day, President of Solidbank, Deogracias N. Vistan, issued a
memorandum declaring that the bank is prepared to take back employees
who will report for work starting April 6, 2000. The remaining 199
employees filed separate complaints for illegal dismissal, ULP and damages,
which were then consolidated.

Issues:
Whether or not the protest rally and concerted work
abandonment/boycott is equivalent to a strike.

Ruling:
 Art. 212 of the Labor Code defines strike as any temporary stoppage
of work by the concerted action of employees as a result of an industrial or
labor dispute. The term “strike” shall comprise not only concerted work
stoppages, but also slowdowns, mass leaves, sitdowns, attempts to damage,
destroy or sabotage plant equipment and facilities and similar activities.
In Toyota Motor Phils. Corp. Workers Association (TMPCWA) v.
NLRC, Union contends that the protests conducted are not within the ambit
of strikes, since they were legitimate exercises of their right to peaceably
assemble on the doctrine laid down in the case of Philippine Blooming Mills
Employees Organization. In the present case, there was an on-going labor
dispute arising from Toyota’s refusal to recognize and negotiate with the
Union. Thus, the Union’s reliance on Philippine Blooming Mills is
misplaced.
In the case at bar, considering that the mass actions stemmed from a
bargaining deadlock and an order of assumption of jurisdiction had already
been issued by the Secretary of Labor to avert an impending strike, there is
no doubt that the concerted work abandonment/boycott was the result of a
labor dispute.
Luzon Development Bank vs. Association of LDB Employees and
Garcia
G.R. No. 120319, October 6, 1995
Romero, J.

Facts:

From a submission agreement of the LDB and the Association of

Luzon Development Bank Employees (ALDBE) arose an arbitration case to
resolve the following issue: Whether or not the company has violated the
CBA provision and the MOA on promotion. At a conference, the parties
agreed on the submission of their respective Position Papers. Atty. Garcia, in
her capacity as Voluntary Arbitrator, received ALDBE’s Position Paper;
LDB, on the other hand, failed to submit its Position Paper despite a letter
from the Voluntary Arbitrator reminding them to do so. As of May 23, 1995
no Position Paper had been filed by LDB.

Issue: 
Whether or not a voluntary arbiter’s decision is appealable to the CA
and not the Supreme Court.

Ruling: 

The jurisdiction conferred by law on a voluntary arbitrator or a panel

of such arbitrators is quite limited compared to the original jurisdiction of
the labor arbiter and the appellate jurisdiction of the NLRC for that matter.
The “(d)ecision, awards, or orders of the Labor Arbiter are final and
executory unless appealed to the Commission …” Hence, while there is an
express mode of appeal from the decision of a labor arbiter, Republic Act
No. 6715 is silent with respect to an appeal from the decision of a voluntary
arbitrator. Yet, past practice shows that a decision or award of a voluntary
arbitrator is, more often than not, elevated to the SC itself on a petition
for certiorari, in effect equating the voluntary arbitrator with the NLRC or
the CA. In the view of the Court, this is illogical and imposes an
unnecessary burden upon it.

The voluntary arbitrator no less performs a state function pursuant to a

governmental power delegated to him under the provisions therefor in the
Labor Code and he falls, therefore, within the contemplation of the term
“instrumentality” in the aforequoted Sec. 9 of B.P. 129. The fact that his
functions and powers are provided for in the Labor Code does not place him
within the exceptions to said Sec. 9 since he is a quasi-judicial
instrumentality as contemplated therein. In effect, this equates the award or
decision of the voluntary arbitrator with that of the RTC. Consequently, in a
petition for certiorari from that award or decision, the CA must be deemed
to have concurrent jurisdiction with the SC. As a matter of policy, this Court
shall henceforth remand to the Court of Appeals petitions of this nature for
proper disposition.
Panay Electric Inc. vs. NLRC and Panay Electric Company Employees
and Workers Association
GR No. 102672, Oct 04, 1995
Vitug, J.

Facts:

The EDP/Personnel Manager Panay Electric Company, Inc

recommended Enrique Huyan to assume the responsibility of gathering
accounting and computer data at its power plant who was at the time an
Administrative Personnel Assistant at the head office.

After an administrative investigation Huyan was ordered dismissed

ont the ground of insubordination for his failure to conform with the
recommendation.

Petitioner assails NLRC's decision insofar as it has adjudged monetary

awards to private respondents Huyan and Napiar and in not sanctioning the
dismissal of other union officers and members.

Issue:

Whether or not the NLRC erred in granting separation benefits to

Huyan and Napiar, in awarding moral and exemplary damages to the former,
and in merely sanctioning the suspension, instead of terminating the
employment status, of other officers and members of respondent labor
union.

Ruling:
 No, NLRC did not err in granting benefits to the two above stated
employees.

In the case of the other union officers, the NLRC, having found no
sufficient proof to hold them guilty of "bad faith" in taking part in the strike
or of perpetrating "serious disorders" during the concerted activity, merely
decreed suspension. We see no grave abuse of discretion by the NLRC in
this regard and in not thus ordering the dismissal of said officers.

In the case of Huyan, we sustain the NLRC in holding that he, during
the period of his illegal suspension should be entitled to back salaries and
benefits plus moral damages, but in the reduced amount of P10,000.00, in
view of the findings of the NLRC. Exemplary damages, upon the other hand,
are awarded only when a person acts in a wanton, fraudulent, reckless,
oppressive or malevolent manner NLRC's findings fall short of the
underhandedness required so as to justify this award.