Get Homework/Assignment Done

Homeworkping.com

Homework Help

https://www.homeworkping.com/

Research Paper help

https://www.homeworkping.com/

Online Tutoring

https://www.homeworkping.com/

click here for freelancing tutoring sites

G.R. No. L-54334 January 22, 1986 CUEVAS, J.:

KIOK LOY, doing business under the name and style SWEDEN ICE CREAM PLANT, petitioner, vs. NLRC and PAMBANSANG KILUSAN NG PAGGAWA (KILUSAN), respondents.

Petition for certiorari to annul the decision 1 of the National Labor Relations Commission (NLRC) dated July 20, 1979 which found petitioner Sweden Ice Cream guilty of unfair labor practice for unjustified refusal to bargain, in violation of par. (g) of Article 249 2 of the New Labor Code, 3 and declared the draft proposal of the Union for a collective bargaining agreement as the governing collective bargaining agreement between the employees and the management.

The pertinent background facts are as follows:

In a certification election held on October 3, 1978, the Pambansang Kilusang Paggawa (Union for short), a legitimate late labor federation, won and was subsequently certified in a resolution dated November 29, 1978 by the Bureau of Labor Relations as the sole and exclusive bargaining agent of the rank-and-file employees of Sweden Ice Cream Plant (Company for short). The Company's motion for reconsideration of the said resolution was denied on January 25, 1978.

Thereafter, and more specifically on December 7, 1978, the Union furnished 4 the Company with two copies of its proposed collective bargaining agreement. At the same time, it requested the Company for its counter proposals. Eliciting no response to the aforesaid request, the Union again wrote the Company reiterating its request for collective bargaining negotiations and for the Company to furnish them with its counter proposals. Both requests were ignored and remained unacted upon by the Company.

Left with no other alternative in its attempt to bring the Company to the bargaining table, the Union, on February 14, 1979, filed a "Notice of Strike", with the Bureau of Labor Relations (BLR) on ground of unresolved economic issues in collective bargaining. 5

Conciliation proceedings then followed during the thirty-day statutory cooling-off period. But all attempts towards an amicable settlement failed, prompting the Bureau of Labor Relations to certify the case to the National Labor Relations Commission (NLRC) for compulsory arbitration pursuant to Presidential Decree No. 823, as amended. The labor arbiter, Andres Fidelino, to whom the case was assigned, set the initial hearing for April 29, 1979. For failure however, of the parties to submit their respective position papers as required, the said hearing was cancelled and reset to another date. Meanwhile, the Union submitted its position paper. The Company did not, and instead requested for a resetting which was granted. The Company was directed anew to submit its financial statements for the years 1976, 1977, and 1978.

The case was further reset to May 11, 1979 due to the withdrawal of the Company's counsel of record, Atty. Rodolfo dela Cruz. On May 24, 1978, Atty. Fortunato Panganiban formally entered his appearance as counsel for the Company only to request for another postponement allegedly for the purpose of acquainting himself with the case. Meanwhile, the Company submitted its position paper on May 28, 1979.

When the case was called for hearing on June 4, 1979 as scheduled, the Company's representative, Mr. Ching, who was supposed to be examined, failed to appear. Atty. Panganiban then requested for another postponement which the labor arbiter denied. He also ruled that the Company has waived its right to present further evidence and, therefore, considered the case submitted for resolution.

On July 18, 1979, labor arbiter Andres Fidelino submitted its report to the National Labor Relations Commission. On July 20, 1979, the National Labor Relations Commission rendered its decision, the dispositive portion of which reads as follows:

WHEREFORE, the respondent Sweden Ice Cream is hereby declared guilty of unjustified refusal to bargain, in violation of Section (g) Article 248 (now Article 249), of P.D. 442, as amended. Further, the draft proposal for a collective bargaining agreement (Exh. "E ") hereto attached and made an integral part of this decision, sent by the Union (Private respondent) to the respondent (petitioner herein) and which is hereby found to be reasonable under the premises, is hereby declared to be the collective agreement which should govern the relationship between the parties herein. SO ORDERED. (Emphasis supplied)

Petitioner now comes before Us assailing the aforesaid decision contending that the National Labor Relations Commission acted without or in excess of its jurisdiction or with grave abuse of discretion amounting to lack of jurisdiction in rendering the challenged decision. On August 4, 1980, this Court dismissed the petition for lack of merit. Upon motion of the petitioner, however, the Resolution of dismissal was reconsidered and the petition was given due course in a Resolution dated April 1, 1981.

Petitioner Company now maintains that its right to procedural due process has been violated when it was precluded from presenting further evidence in support of its stand and when its request for further postponement was denied. Petitioner further contends that the National Labor Relations Commission's finding of unfair labor practice for refusal to bargain is not supported by law and the evidence considering that it was only on May 24, 1979 when the Union furnished them with a copy of the proposed Collective Bargaining Agreement and it was only then that they came to know of the Union's demands; and finally, that the Collective Bargaining Agreement approved and adopted by the National Labor Relations Commission is unreasonable and lacks legal basis.

The petition lacks merit. Consequently, its dismissal is in order.

Collective bargaining which is defined as negotiations towards a collective agreement, 6 is one of the democratic frameworks under the New Labor Code, designed to stabilize the relation between labor and management and to create a climate of sound and stable industrial peace. It is a mutual responsibility of the employer and the Union and is characterized as a legal obligation. So much so that Article 249, par. (g) of the Labor Code makes it an unfair labor practice for an employer to refuse "to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement with respect to wages, hours of work, and all other terms and conditions of employment including proposals for adjusting any grievance or question arising under such an agreement and executing a contract incorporating such agreement, if requested by either party.

While it is a mutual obligation of the parties to bargain, the employer, however, is not under any legal duty to initiate contract negotiation. 7 The mechanics of collective bargaining is set in motion only when the following jurisdictional preconditions are present, namely, (1) possession of the status of majority representation of the employees' representative in accordance with any of the means of selection or designation provided for by the Labor Code; (2) proof of majority representation; and (3) a demand to bargain under Article 251, par. (a) of the New Labor Code . ... all of which preconditions are undisputedly present in the instant case.

From the over-all conduct of petitioner company in relation to the task of negotiation, there can be no doubt that the Union has a valid cause to complain against its (Company's) attitude, the totality of which is indicative of the latter's disregard of, and failure to live up to, what is enjoined by the Labor Code — to bargain in good faith.

We are in total conformity with respondent NLRC's pronouncement that petitioner Company is GUILTY of unfair labor practice. It has been indubitably established that (1) respondent Union was a duly certified bargaining agent; (2) it made a definite request to bargain, accompanied with a copy of the proposed Collective Bargaining Agreement, to the Company not only once but twice which were left unanswered and unacted upon; and (3) the Company made no counter proposal whatsoever all of which conclusively indicate lack of a sincere desire to negotiate. 8 A Company's refusal to make counter proposal if considered in relation to the entire bargaining process, may indicate bad faith and this is specially true where the Union's request for a counter proposal is left unanswered. 9 Even during the

period of compulsory arbitration before the NLRC, petitioner Company's approach and attitude-stalling the negotiation by a series of postponements, non-appearance at the hearing conducted, and undue delay in submitting its financial statements, lead to no other conclusion except that it is unwilling to negotiate and reach an agreement with the Union. Petitioner has not at any instance, evinced good faith or willingness to discuss freely and fully the claims and demands set forth by the Union much less justify its opposition thereto.10

The case at bar is not a case of first impression, for in the Herald Delivery Carriers Union (PAFLU) vs. Herald Publications 11the rule had been laid down that "unfair labor practice is committed when it is shown that the respondent employer, after having been served with a written bargaining proposal by the petitioning Union, did not even bother to submit an answer or reply to the said proposal This doctrine was reiterated anew in Bradman vs. Court of Industrial Relations 12 wherein it was further ruled that "while the law does not compel the parties to reach an agreement, it does contemplate that both parties will approach the negotiation with an open mind and make a reasonable effort to reach a common ground of agreement

As a last-ditch attempt to effect a reversal of the decision sought to be reviewed, petitioner capitalizes on the issue of due process claiming, that it was denied the right to be heard and present its side when the Labor Arbiter denied the Company's motion for further postponement.

Petitioner's aforesaid submittal failed to impress Us. Considering the various postponements granted in its behalf, the claimed denial of due process appeared totally bereft of any legal and factual support. As herein earlier stated, petitioner had not even honored respondent Union with any reply to the latter's successive letters, all geared towards bringing the Company to the bargaining table. It did not even bother to furnish or serve the Union with its counter proposal despite persistent requests made therefor. Certainly, the moves and overall behavior of petitioner-company were in total derogation of the policy enshrined in the New Labor Code which is aimed towards expediting settlement of economic disputes. Hence, this Court is not prepared to affix its imprimatur to such an illegal scheme and dubious maneuvers.

Neither are WE persuaded by petitioner-company's stand that the Collective Bargaining Agreement which was approved and adopted by the NLRC is a total nullity for it lacks the company's consent, much less its argument that once the Collective Bargaining Agreement is implemented, the Company will face the prospect of closing down because it has to pay a staggering amount of economic benefits to the Union that will equal if not exceed its capital. Such a stand and the evidence in support thereof should have been presented before the Labor Arbiter which is the proper forum for the purpose.

We agree with the pronouncement that it is not obligatory upon either side of a labor controversy to precipitately accept or agree to the proposals of the other. But an erring party should not be tolerated and allowed with impunity to resort to schemes feigning negotiations by going through empty gestures. 13 More so, as in the instant case, where the intervention of the National Labor Relations Commission was properly sought for after conciliation efforts undertaken by the BLR failed. The instant case being a certified one, it must be resolved by the NLRC pursuant to the mandate of P.D. 873, as amended, which authorizes the said body to determine the reasonableness of the terms and conditions of employment embodied in any Collective Bargaining Agreement. To that extent, utmost deference to its findings of reasonableness of any Collective Bargaining Agreement as the governing agreement by the employees and management must be accorded due respect by this Court.

WHEREFORE, the instant petition is DISMISSED. The temporary restraining order issued on August 27, 1980, is LIFTED and SET ASIDE. No pronouncement as to costs. SO ORDERED.

G.R. No. 140518 December 16, 2004 AZCUNA, J.:

MANILA DIAMOND HOTEL EMPLOYEES’ UNION, petitioner, vs. CA, THE SECRETARY OF LABOR AND EMPLOYMENT, and THE MANILA DIAMOND HOTEL, respondents.

This petition for review of a decision of the Court of Appeals arose out of a dispute between the Philippine Diamond Hotel and Resort, Inc. ("Hotel"), owner of the Manila Diamond Hotel, and the Manila Diamond Hotel Employees’ Union ("Union"). The facts are as follows:

On November 11, 1996, the Union filed a petition for a certification election so that it may be declared the exclusive bargaining representative of the Hotel’s employees for the purpose of collective bargaining. The petition was dismissed by the Department of Labor and Employment (DOLE) on January 15, 1997. After a few months, however, on August 25, 1997, the Union sent a letter to the Hotel informing it of its desire to negotiate for a collective bargaining agreement.1 In a letter dated September 11, 1997, the Hotel’s Human Resources Department Manager, Mary Anne Mangalindan, wrote to the Union stating that the Hotel cannot recognize it as the employees’ bargaining agent since its petition for certification election had been earlier dismissed by the DOLE.2 On that same day, the Hotel received a letter from the Union stating that they were not giving the Hotel a notice to bargain, but that they were merely asking for the Hotel to engage in collective bargaining negotiations with the Union for its members only and not for all the rank and file employees of the Hotel.3

On September 18, 1997, the Union announced that it was taking a strike vote. A Notice of Strike was thereafter filed on September 29, 1997, with the National Conciliation and Mediation Board (NCMB) for the Hotel’s alleged "refusal x x x to bargain" and for alleged acts of unfair labor practice. The NCMB summoned both parties and held a series of dialogues, the first of which was on October 6, 1997.

On November 29, 1997, however, the Union staged a strike against the Hotel. Numerous confrontations between the two parties followed, creating an obvious strain between them. The Hotel claims that the strike was illegal and it had to dismiss some employees for their participation in the allegedly illegal concerted activity. The Union, on the other hand, accused the Hotel of illegally dismissing the workers. What is pertinent to this case, however, is the Order issued by the then Secretary of Labor and Employment Cresenciano B. Trajano assuming jurisdiction over the labor dispute. A Petition for Assumption of Jurisdiction was filed by the Union on April 2, 1998. Thereafter, the Secretary of Labor and Employment issued an Order dated April 15, 1998, the dispositive portion of which states:

WHEREFORE, premises considered[,] this Office CERTIFIES the labor dispute at the Manila Diamond Hotel to the National Labor Relations Commission, for compulsory arbitration, pursuant to Article 263 (g) of the Labor Code, as amended.

Accordingly, the striking officers and members of the Manila Diamond Hotel Employees Union --- NUWHRAIN are hereby directed to return to work within twenty-four (24) hours upon receipt of this Order and the Hotel to accept them back under the same terms and conditions prevailing prior to the strike. The parties are enjoined from committing any act that may exacerbate the situation.

The Union received the aforesaid Order on April 16, 1998 and its members reported for work the next day, April 17, 1998. The Hotel, however, refused to accept the returning workers and instead filed a Motion for Reconsideration of the Secretary’s Order.

On April 30, 1998, then Acting Secretary of Labor Jose M. Español, issued the disputed Order, which modified the earlier one issued by Secretary Trajano. Instead of an actual return to work, Acting Secretary Español directed that the strikers be reinstated only in the payroll.4 The Union moved for the reconsideration of this Order, but its motion was denied on June 25, 1998. Hence, it filed before this Court on August 26, 1998, a petition for certiorariunder Rule 65 of the Rules of Court alleging grave abuse of discretion on the part of the Secretary of Labor for modifying its earlier order and requiring instead the reinstatement of the employees in the payroll. However, in a resolution dated July 12, 1999, this Court referred the case to the Court of Appeals, pursuant to the principle embodied in National Federation of Labor v. Laguesma.5

On October 19, 1999, the Court of Appeals rendered a Decision dismissing the Union’s petition and affirming the Secretary of Labor’s Order for payroll reinstatement. The Court of Appeals held that the challenged order is merely an error of judgment and not a grave abuse of discretion and that payroll reinstatement is not prohibited by law, but may be "called for" under certain circumstances.6

Hence, the Union now stands before this Court maintaining that:

THE HONORABLE COURT OF APPEALS GRIEVIOUSLY ERRED IN RULING THAT THE SECRETARY OF LABOR’S UNAUTHORIZED ORDER OF MERE "PAYROLL REINSTATEMENT" IS NOT GRAVE ABUSE OF DISCRETION7

The petition has merit.

The Court of Appeals based its decision on this Court’s ruling in University of Santo Tomas (UST) v. NLRC.8There, the Secretary assumed jurisdiction over the labor dispute between striking teachers and the university. He ordered the striking teachers to return to work and the university to accept them under the same terms and conditions. However, in a subsequent order, the NLRC provided payroll reinstatement for the striking teachers as an alternative remedy to actual reinstatement. True, this Court held therein that the NLRC did not commit grave abuse of discretion in providing for the alternative remedy of payroll reinstatement. This Court found that it was merely an error of judgment, which is not correctible by a special civil action for certiorari. The NLRC was only trying its best to work out a satisfactory ad hoc solution to a festering and serious problem.

However, this Court notes that the UST ruling was made in the light of one very important fact: the teachers could not be given back their academic assignments since the order of the Secretary for them to return to work was given in the middle of the first semester of the academic year. The NLRC was, therefore, faced with a situation where the striking teachers were entitled to a return to work order, but the university could not immediately reinstate them since it would be impracticable and detrimental to the students to change teachers at that point in time.

In the present case, there is no showing that the facts called for payroll reinstatement as an alternative remedy. A strained relationship between the striking employees and management is no reason for payroll reinstatement in lieu of actual reinstatement. Petitioner correctly points out that labor disputes naturally involve strained relations between labor and management, and that in most strikes, the relations between the strikers and the non-strikers will similarly be tense.9 Bitter labor disputes always leave an aftermath of strong emotions and unpleasant situations. Nevertheless, the government must still perform its function and apply the law, especially if, as in this case, national interest is involved.

After making the distinction between UST and the present case, this Court now addresses the issue of whether the Court of Appeals erred in ruling that the Secretary did not commit any grave abuse of discretion in ordering payroll reinstatement in lieu of actual reinstatement. This question is answered by the nature of Article 263(g). As a general rule, the State encourages an environment wherein employers and employees themselves must deal with their problems in a manner that mutually suits them best. This is the basic policy embodied in Article XIII, Section 3 of the Constitution,10 which was further echoed in Article 211 of the Labor Code.11 Hence, a voluntary, instead of compulsory, mode of dispute settlement is the general rule.

However, Article 263, paragraph (g) of the Labor Code, which allows the Secretary of Labor to assume jurisdiction over a labor dispute involving an industry indispensable to the national interest, provides an exception:

(g) When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest, the Secretary of Labor and Employment may assume jurisdiction over the dispute and decide it or certify the same to the Commission for compulsory arbitration. Such assumption or certification shall have the effect of automatically enjoining the intended or impending strike or lockout as specified in the assumption or certification order. If one has already taken place at the time of assumption or certification, all striking or locked out employees shall immediately return to work and the employer shall immediately resume operations and readmit all workers under the same terms and conditions prevailing before the strike or lockout. x x x

This provision is viewed as an exercise of the police power of the State. A prolonged strike or lockout can be inimical to the national economy and, therefore, the situation is imbued with public necessity and involves the right of the State and the public to self-protection.12

Under Article 263(g), all workers must immediately return to work and all employers must readmit all of them under the same terms and conditions prevailing before the strike or lockout. This Court must point out that the law uses the precise phrase of "under the same terms and conditions," revealing that it contemplates only actual reinstatement. This is in keeping with the rationale that any work stoppage or slowdown in that particular industry can be inimical to the national economy. It is clear that Article 263(g) was not written to protect labor from the excesses of management, nor was it written to ease management from expenses, which it normally incurs during a work stoppage or slowdown. It was an error on the part of the Court of Appeals to view the assumption order of the Secretary as a measure to protect the striking workers from any retaliatory action from the Hotel. This Court reiterates that this law was written as a means to be used by the State to protect itself from an emergency or crisis. It is not for labor, nor is it for management.

It is, therefore, evident from the foregoing that the Secretary’s subsequent order for mere payroll reinstatement constitutes grave abuse of discretion amounting to lack or excess of jurisdiction. Indeed, this Court has always recognized the "great breadth of discretion" by the Secretary once he assumes jurisdiction over a labor dispute. However, payroll reinstatement in lieu of actual reinstatement is a departure from the rule in these cases and there must be showing of special circumstances rendering actual reinstatement impracticable, as in the UST case aforementioned, or otherwise not conducive to attaining the purpose of the law in providing for assumption of jurisdiction by the Secretary of Labor and Employment in a labor dispute that affects the national interest. None appears to have been established in this case. Even in the exercise of his discretion under Article 236(g), the Secretary must always keep in mind the purpose of the law. Time and again, this Court has held that when an official by-passes the law on the asserted ground of attaining a laudable objective, the same will not be maintained if the intendment or purpose of the law would be defeated.13

WHEREFORE, the petition is GRANTED and the assailed Decision of the Court of Appeals dated October 19, 1999 is REVERSED and SET ASIDE. The Order dated April 30, 1998 issued by the Secretary of Labor and Employment modifying the earlier Order dated April 15, 1998, is likewise SET ASIDE. No pronouncement as to costs. SO ORDERED.

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

ART. XIII, Section 3. The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and equality of employment opportunities for all.

It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and peaceful concerted activities, including the right to strike in accordance with law. They shall be entitled to security of tenure, humane conditions of work, and a living wage. They shall also participate in policy and decision-making processes affecting their rights and benefits as may be provided by law.

The State shall promote the principle of shared responsibility between workers and employers and the preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce their mutual compliance therewith to foster industrial peace.

The State shall regulate the relations between workers and employers, recognizing the right of labor to its just share in the fruits of production and the right of enterprises to reasonable returns to investments, and to expansion and growth.

G.R. No. L-49046 January 26, 1988 FERNAN, J.:

SATURNO A. VICTORIA, petitioner, vs. HON. AMADO G. INCIONG, DEPUTY MINISTER, and FAR EAST BROADCASTING CO., INC.,respondents.

Petition for review of the Order of the then Acting Secretary of Labor Amado G. Inciong dated June 6, 1978, in NLRC Case No. RB-1764-75, reversing the decision of the National Labor Relations Commission dated November 17, 1976 and holding that, under the law and facts of the case, there was no necessity for private respondent to obtain a clearance for the termination of petitioner's employment

under Article 257 [b] of the Labor Code, as amended, and that a mere report of such termination was sufficient, under Section 11 [f]. Rule XIV of the Rules and Regulations implementing said Code.

Petitioner Saturno Victoria was employed on March 17, 1956 by private respondent Far East Broadcasting Company, Incorporated as a radio transmitter operator. Sometime in July 1971, he and his co-workers organized the Far East Broadcasting Company Employees Association. After registering their association with the then Department of Labor, they demanded recognition of said association by the company but the latter refused on the ground that being a non-profit, non-stock, non-commercial and religious corporation, it is not covered by Republic Act 875, otherwise known as the Industrial Peace Act, the labor law enforced at that time.

Several conciliation meetings were held at the Department of Labor and in those meetings, the Director of Labor Relations Edmundo Cabal advised the union members that the company could not be forced to recognize them or to bargain collectively with them because it is a non-profit, non-commercial and religious organization. Notwithstanding such advice, the union members led by Saturno Victoria as its president, declared a strike and picketed the company's premises on September 6, 1972 for the purpose of seeking recognition of the labor union.

As a countermeasure, the company filed a case for damages with preliminary injunction against the strikers before the then Court of First Instance of Bulacan docketed as Civil Case No. 750-V. Said court issued an injunction enjoining the three-day-old strike staged against the company. The complaint was later amended seeking to declare the strike illegal.

Upon the declaration of martial law on September 21, 1972 and the promulgation of Presidential Decree No. 21 creating the National Labor Relations Commission, the ad hoc National Labor Relations Commission took cognizance of the strike through NLRC Case No. 0021 entitled "Far East Broadcasting Company Employees Association, complainant versus Far East Broadcasting Company, respondent" and NLRC Case No. 0285 entitled "Generoso Serino, complainant, versus Far East Broadcasting Company, respondent", both cases for reinstatement due to the company's return to accept the union's offer to return to work during the pendency of the case in the Court of First Instance.

On December 28, 1972, Arbitrator Flavio Aguas rendered a joint decision in the two cases mentioned above recognizing the jurisdiction of the Court of First Instance of Bulacan, the dispositive portion reading as follows:

IN VIEW WHEREOF, and in the interest of justice and equity, it is hereby directed that:

1. That striking members of the Far East Broadcasting Company Employees Association return to their respective positions in the corporation;

2. The respondent Far East Broadcasting Company Incorporated to accept back the returning strikers without loss in rank seniority or status;

3. The workers shall return to work within [10] days from receipt of this resolution otherwise they shall be deemed to have forfeited such right;

4. The respondent shall report compliance with this decision within fifteen [15] days from receipt hereof.

This Order shall, however, be without prejudice to whatever decision the Court of First Instance of Bulacan may promulgate in Civil Case No. 750-V and to the requirements the existing order may need of people working with the mass media of communications. IT IS SO ORDERED. 1

The decision of the arbitrator was successively appealed to the ad hoc National Labor Relations Commission, the Secretary of Labor and the Office of the President of the Philippines, and was affirmed in all instances.

On April 23, 1975, the Court of First Instance of Bulacan rendered judgment, to wit:

WHEREFORE, judgment is hereby rendered:

1. Making injunction against defendants permanent;

2. Declaring that this Court has jurisdiction to try and hear the instant case despite Section 2 of Presidential Decree No. 2;

3. Declaring that plaintiff Far East Broadcasting Company is a non-profit organization since it does not declare dividends;

4. Declaring that the strike admitted by the defendants to have been declared by them is illegal inasmuch as it was for the purpose of compelling the plaintiff-company to recognize their labor union which could not be legally done because the plaintiffs were not covered by Republic Act 875;

5. Declaring that the evidence presented is insufficient to show that defendants caused the damage to the plaintiff consequent on the destruction of its relays and its antennas as well as its transmission lines. SO ORDERED. 2

On April 24, 1975, by virtue of the above decision, the company notified Saturno Victoria that he is dismissed effective April 26, 1975. Thereupon, he filed Case No. RB-IV-1764 before the National Labor Relations Commission, Regional Branch IV against the company alleging violation of article 267 of the Labor Code which requires clearance from the Secretary of Labor for every shutdown of business establishments or dismissal of employees. On February 27, 1976, Labor Arbiter Manuel B. Lorenzo rendered a decision in petitioner's favor declaring the dismissal to be illegal, thereby ordering reinstatement with fun backwages. On appeal, the arbiter's decision was aimed by the National Labor Relations Commission. But when the commission's decision was in turn appealed to the Secretary of Labor, it was set aside and in lieu thereof the questioned Order dated June 6, 1978 was issued.

In view of its brevity and for a better understanding of the reasons behind it, We quote the disputed Order in full:

O R D E R

This is an appeal by respondent from the Decision of the National Labor Relations Commission, dated November 17, 1976.

The Commission upheld the Decision of the labor arbiter dated February 27, 1976 ordering respondent to reinstate with full backwages herein complainant Saturno A. Victoria based on the finding that respondent did not file any application for clearance to terminate the services of complainant before dismissing him from his employment.

Briefly the facts of this case are as follows:

Complainant Saturno Victoria is the president of the Far East Broadcasting Company Employees Union. On September 8, 1972, the said union declared a strike against respondent company. On September 11, 1972, respondent filed with the Court of First Instance of Bulacan, Civil Case No. 750-V, for the issuance of an injunction and a prayer that the strike be declared illegal.

On October 24, 1972, complainant together with the other strikers filed with the ad hoc National Labor Relations Commission Case Nos. 0021 and 0285 for reinstatement. The Arbitrator rendered a decision in said case on December 28, 1972, wherein he ordered respondent to reinstate complainants subject to the following condition:

"This Order shall, however, be without prejudice to whatever decision the Court of First Instance may promulgate on Civil Case No. 750-V and to the requirements the existing order may need of people working with the mass media of communications."

Since said decision was affirmed by the NLRC, the Secretary of Labor, and the Office of the President of the Philippines, complainants were reinstated pursuant thereto.

In a Decision dated April 23, 1975, in Civil Case No. 750-V, promulgated by the Court of First Instance of Bulacan, the strike staged by herein complainant and the other strikers was declared illegal. Based on said Decision, respondent dismissed complainant from his employment. Hence, complainant filed the instant complaint for illegal dismissal.

Under the aforecited facts, we do not agree with the ruling of the Commission now subject of this appeal that an application for clearance to terminate herein complainant is mandatory on the part of respondent before terminating complainant's services. We believe that what would have been necessary was a report as provided for under Section 11 [f] Rule XIV, Book V of the Rules and Regulations Implementing the Labor Code. Moreover, even if an application for clearance was flied, this Office would have treated the same as a report. Otherwise, it would render nugatory the Decision of the Arbitrator dated December 28, 1972 in Case Nos. 0021 and 0285 which was affirmed by the Commission, the Secretary of Labor and the Office of the President of the Philippines, ordering his temporary reinstatement, subject to whatever Decision the CFI of Bulacan may promulgate in Civil Case No. 750-V. It could be clearly inferred from said CFI Decision that if the strike is declared illegal, the strikers will be considered to have lost their employment status under the then existing laws and jurisprudence, otherwise strikers could stage illegal strike with impunity. Since the strike was declared illegal, respondent acted in good faith when it dispensed with the services of herein complainant.

For failure of respondent to file the necessary report and based on equitable considerations, complainant should be granted separation pay equivalent to one-half month salary for every year of service.

WHEREFORE, let the decision of the National Labor Relations Commission dated November 17, 1976 be, as it is hereby, set aside and a new judgment is entered, ordering respondent to give complainant separation pay equivalent to one-half month salary for every year of service. SO ORDERED. 3

Petitioner elevates to Us for review on certiorari the aforequoted Order seeking to persuade this Court that then Acting Secretary of Labor Amado G. Inciong committed reversible error in holding that, under the law and facts of this case, a mere report of the termination of the services of said petitioner was sufficient. Petitioner assigns the following errors:

IWHETHER OR NOT A CLEARANCE FROM THE SECRETARY OF LABOR IS STILL NECESSARY BEFORE THE PETITIONER HEREIN COULD BE DISMISSED CONSIDERING THE RESTRICTIVE CONDITION IN THE DECISION OF THE COMPULSORY

ARBITRATOR IN NLRC CASE NOS. 0021 AND 0285.II

WHETHER OR NOT THE DECISION OF THE COURT OF FIRST INSTANCE OF BULACAN IN CIVIL CASE NO. 750-V IPSO FACTO GAVE THE RESPONDENT COMPANY AUTHORITY TO DISMISS HEREIN PETITIONER WITHOUT ANY CLEARANCE FROM THE

SECRETARY OF LABOR. 4

The substantive law on the matter enforced during the time of petitioner's dismissal was Article 267 [b] of the Labor Code [in conjunction with the rules and regulations implementing said substantive law.] Article 267 reads:

No employer that has no collective bargaining agreement may shut down his establishment or dismiss or terminate the service of regular employees with at least one [1] year of service except managerial employees as defined in this book without previous written clearance from the Secretary of Labor.

Petitioner maintains that the abovecited provision is very clear. It does not make any distinction as to the ground for dismissal. Whether or not the dismissal sought by the employer company is for cause, it is imperative that the company must apply for a clearance from the Secretary of Labor.

In a recent case 5 penned by Justice Abraham F. Sarmiento promulgated on June 30, 1987, we had occasion to rule in agreement with the findings of then Presidential Assistant for Legal Affairs Ronaldo Zamora that the purpose in requiring a prior clearance from the Secretary of Labor in cases of shutdown or dismissal of employees, is to afford the Secretary ample opportunity to examine and determine the reasonableness of the request.

The Solicitor General, in relation to said pronouncement and in justification of the Acting Labor Secretary's decision makes the following observations:

It is true that article 267 [b] of the Labor Code requires that before any business establishment is shut down or any employee is dismissed, written clearance from the Secretary of Labor must first be obtained. It is likewise true that in the case of petitioner, there was no written clearance in the usual form. But while there may not have been strict compliance with Article 267 there was substantial compliance. The Secretary of Labor twice manifested his conformity to petitioner's dismissal.

The first manifestation of acquiescence by the Secretary of Labor to the dismissal of petitioner was his affirmance of the decision of the arbitrator in NLRC Case Nos. 0021 and 0285. The arbitrator ordered the reinstatement of the strikers but subject to the decision of the CFI of Bulacan in Civil Case No. 750-V. The Secretary of Labor affirmed the decision of the arbitrator. In effect, therefore, the Secretary of Labor issued a carte blanche to the CFI of Bulacan to either dismiss or retain petitioner.

The second manifestation was his decision in NLRC Case No. RB-IV-1764-65 wherein he said that clearance for the dismissal of petitioner was not required, but only a report; that even if an application for clearance was filed, he would have treated it as a mere report. While this is not prior clearance in the contemplation of Article 267, it is at least a ratification of the dismissal of petitioner. 6

We agree with the Solicitor General. Technically speaking, no clearance was obtained by private respondent from the then Secretary of Labor, the last step towards full compliance with the requirements of law on the matter of dismissal of employees. However, the rationale behind the clearance requirement was fully met. The Secretary of Labor was apprised of private respondent's intention to terminate the services of petitioner. This in effect is an application for clearance to dismiss petitioner from employment. The affirmance of the restrictive condition in the dispositive portion of the labor arbiter's decision in NLRC Case Nos. 0021 and 0285 by the Secretary of Labor and the Office of the President of the Philippines, signifies a grant of authority to dismiss petitioner in case the strike is declared illegal by the Court of First Instance of Bulacan. Consequently and as correctly stated by the Solicitor General, private respondent acted in good faith when it terminated the employment of petitioner upon a declaration of illegality of the strike by the Court of First Instance of Bulacan. Moreover, the then Secretary of Labor manifested his conformity to the dismissal, not once, but twice. In this regard, the mandatory rule on clearance need not be applied.

The strike staged by the union in 1972 was a futile move. The law then enforced, Republic Act 875 specifically excluded respondent company from its coverage. Even if the parties had gone to court to compel recognition, no positive relief could have been obtained since the same was not sanctioned by law. Because of this, there was no necessity on the part of private respondent to show specific acts of petitioner during the strike to justify his dismissal.

This is a matter of responsibility and of answerability. Petitioner as a union leader, must see to it that the policies and activities of the union in the conduct of labor relations are within the precepts of law and any deviation from the legal boundaries shall be imputable to the leader. He bears the responsibility of guiding the union along the path of law and to cause the union to demand what is not legally demandable, would foment anarchy which is a prelude to chaos.

Petitioner should have known and it was his duty to impart this imputed knowledge to the members of the union that employees and laborers in non- profit organizations are not covered by the provisions of the Industrial Peace Act and the Court of Industrial Relations [in the case at bar, the Court of First Instance] has no jurisdiction to entertain petitions of labor unions or organizations of said non-profit organizations for certification as the exclusive bargaining representatives of said employees and laborers. 7

As a strike is an economic weapon at war with the policy of the Constitution and the law at that time, a resort thereto by laborers shall be deemed to be a choice of remedy peculiarly their own and outside of the statute, and as such, the strikers must accept all the risks attendant upon their choice. If they succeed and the employer succumbs, the law will not stand in their way in the enjoyment of the lawful fruits of their victory. But if they fail, they cannot thereafter invoke the protection of the law for the consequences of their conduct unless the right they wished vindicated is one which the law will, by all means, protect and enforce. 8

We further agree with the Acting Secretary of Labor that what was required in the case of petitioner's dismissal was only a report as provided under Section 11 [f] of Rule XIV of the Rules and Regulations implementing the Labor Code which provides:

Every employer shall submit a report to the Regional Office in accordance with the form presented by the Department on the following instances of termination of employment, suspension, lay-off or shutdown which may be effected by the employer without prior clearance within five [5] days thereafter:

xxx xxx xxx

[f] All other terminations of employment, suspension, lay-offs or shutdowns, not otherwise specified in this and in the immediately preceding sections.

To hold otherwise would render nugatory the conditions set forth in the decision of Labor Arbiter Aguas on the basis of which petitioner was temporarily reinstated.

Inasmuch as there was a valid and reasonable ground to dismiss petitioner but no report as required by the implementing rules and regulations of the Labor Code was filed by respondent Company with the then Department of Labor, petitioner as held by the Acting Secretary of Labor, is entitled to separation pay equivalent to one-half month salary for every year of service.

WHEREFORE, the petition is dismissed. The decision of the acting Secretary of Labor is AFFIRMED in toto. SO ORDERED.

G.R. No. 85985 August 13, 1993 MELO, J.:

PHILIPPINE AIRLINES, INC. (PAL), petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER ISABEL P. ORTIGUERRA and PHILIPPINE AIRLINES EMPLOYEES ASSOCIATION (PALEA), respondents.

In the instant petition for certiorari, the Court is presented the issue of whether or not the formulation of a Code of Discipline among employees is a shared responsibility of the employer and the employees.

On March 15, 1985, the Philippine Airlines, Inc. (PAL) completely revised its 1966 Code of Discipline. The Code was circulated among the employees and was immediately implemented, and some employees were forthwith subjected to the disciplinary measures embodied therein.

Thus, on August 20, 1985, the Philippine Airlines Employees Association (PALEA) filed a complaint before the National Labor Relations Commission (NLRC) for unfair labor practice (Case No. NCR-7-2051-85) with the following remarks: "ULP with arbitrary implementation of PAL's Code of Discipline without notice and prior discussion with Union by Management" (Rollo, p. 41). In its position paper, PALEA contended that PAL, by its unilateral implementation of the Code, was guilty of unfair labor practice, specifically Paragraphs E and G of Article 249 and Article 253 of the Labor Code. PALEA alleged that copies of the Code had been circulated in limited numbers; that being penal in nature the Code must conform with the requirements of sufficient publication, and that the Code was arbitrary, oppressive, and prejudicial to the rights of the employees. It prayed that implementation of the Code be held in abeyance; that PAL should discuss the substance of the Code with PALEA; that employees dismissed under the Code be reinstated and their cases subjected to further hearing; and that PAL be declared guilty of unfair labor practice and be ordered to pay damages (pp. 7-14, Record.)

PAL filed a motion to dismiss the complaint, asserting its prerogative as an employer to prescibe rules and regulations regarding employess' conduct in carrying out their duties and functions, and alleging that by implementing the Code, it had not violated the collective bargaining agreement (CBA) or any provision of the Labor Code. Assailing the complaint as unsupported by evidence, PAL maintained that Article 253 of the Labor Code cited by PALEA reffered to the requirements for negotiating a CBA which was inapplicable as indeed the current CBA had been negotiated.

In its reply to PAL's position paper, PALEA maintained that Article 249 (E) of the Labor Code was violated when PAL unilaterally implemented the Code, and cited provisions of Articles IV and I of Chapter II of the Code as defective for, respectively, running counter to the construction of penal laws and making punishable any offense within PAL's contemplation. These provisions are the following:

Sec. 2. Non-exclusivity. — This Code does not contain the entirety of the rules and regulations of the company. Every employee is bound to comply with all applicable rules, regulations, policies, procedures and standards, including standards of quality, productivity and behaviour, as issued and promulgated by the company through its duly authorized officials. Any violations thereof shall be punishable with a penalty to be determined by the gravity and/or frequency of the offense.

Sec. 7. Cumulative Record. — An employee's record of offenses shall be cumulative. The penalty for an offense shall be determined on the basis of his past record of offenses of any nature or the absence thereof. The more habitual an offender has been, the greater shall be the penalty for the latest offense. Thus, an employee may be dismissed if the number of his past offenses warrants such penalty in the judgment of management even if each offense considered separately may not warrant dismissal. Habitual offenders or recidivists have no place in PAL. On the other hand, due regard shall be given to the length of time between commission of individual offenses to determine whether the employee's conduct may indicate occasional lapses (which may nevertheless require sterner disciplinary action) or a pattern of incorrigibility.

Labor Arbiter Isabel P. Ortiguerra handling the case called the parties to a conference but they failed to appear at the scheduled date. Interpreting such failure as a waiver of the parties' right to present evidence, the labor arbiter considered the case submitted for decision. On November 7, 1986, a decision was rendered finding no bad faith on the part of PAL in adopting the Code and ruling that no unfair labor practice had been committed. However, the arbiter held that PAL was "not totally fault free" considering that while the issuance of rules and regulations governing the conduct of employees is a "legitimate management prerogative" such rules and regulations must meet the test of "reasonableness, propriety and fairness." She found Section 1 of the Code aforequoted as "an all embracing and all encompassing provision that makes punishable any offense one can think of in the company"; while Section 7, likewise quoted above, is "objectionable for it violates the rule against double jeopardy thereby ushering in two or more punishment for the same misdemeanor." (pp. 38-39, Rollo.)

The labor arbiter also found that PAL "failed to prove that the new Code was amply circulated." Noting that PAL's assertion that it had furnished all its employees copies of the Code is unsupported by documentary evidence, she stated that such "failure" on the part of PAL resulted in the imposition of penalties on employees who thought all the while that the 1966 Code was still being followed. Thus, the arbiter concluded that "(t)he phrase ignorance of the law excuses no one from compliance . . . finds application only after it has been conclusively shown that the law was circulated to all the parties concerned and efforts to disseminate information regarding the new law have been exerted. (p. 39, Rollo.) She thereupon disposed:

WHEREFORE, premises considered, respondent PAL is hereby ordered as follows:

1. Furnish all employees with the new Code of Discipline;

2. Reconsider the cases of employees meted with penalties under the New Code of Discipline and remand the same for further hearing; and

3. Discuss with PALEA the objectionable provisions specifically tackled in the body of the decision.

All other claims of the complainant union (is) [are] hereby, dismissed for lack of merit. SO ORDERED. (p. 40, Rollo.)

PAL appealed to the NLRC. On August 19, 1988, the NLRC through Commissioner Encarnacion, with Presiding Commissioner Bonto-Perez and Commissioner Maglaya concurring, found no evidence of unfair labor practice committed by PAL and affirmed the dismissal of PALEA's charge. Nonetheless, the NLRC made the following observations:

Indeed, failure of management to discuss the provisions of a contemplated code of discipline which shall govern the conduct of its employees would result in the erosion and deterioration of an otherwise harmonious and smooth relationship between them as did happen in the instant case. There is no dispute that adoption of rules of conduct or discipline is a prerogative of management and is imperative and essential if an industry, has to survive in a competitive world. But labor climate has progressed, too. In the Philippine scene, at no time in our contemporary history is the need for a cooperative, supportive and smooth relationship between labor and management more keenly felt if we are to survive economically. Management can no longer exclude labor in the deliberation and adoption of rules and regulations that will affect them.

The complainant union in this case has the right to feel isolated in the adoption of the New Code of Discipline. The Code of Discipline involves security of tenure and loss of employment — a property right! It is time that management realizes that to attain effectiveness in its conduct rules, there should be candidness and openness by Management and participation by the union, representing its members. In fact, our Constitution has recognized the principle of "shared responsibility" between employers and workers and has likewise recognized the right of workers to participate in "policy and decision-making process affecting their rights . . ." The latter provision was interpreted by the Constitutional Commissioners to mean participation in "management"' (Record of the Constitutional Commission, Vol. II).

In a sense, participation by the union in the adoption of the code if conduct could have accelerated and enhanced their feelings of belonging and would have resulted in cooperation rather than resistance to the Code. In fact, labor-management cooperation is now "the thing." (pp. 3-4, NLRC Decision ff. p. 149, Original Record.)

Respondent Commission thereupon disposed:

WHEREFORE, premises considered, we modify the appealed decision in the sense that the New Code of Discipline should be reviewed and discussed with complainant union, particularly the disputed provisions [.] (T)hereafter, respondent is directed to furnish each employee with a copy of the appealed Code of Discipline. The pending cases adverted to in the appealed decision if still in the arbitral level, should be reconsidered by the respondent Philippine Air Lines. Other dispositions of the Labor Arbiter are sustained. SO ORDERED. (p. 5, NLRC Decision.)

PAL then filed the instant petition for certiorari charging public respondents with grave abuse of discretion in: (a) directing PAL "to share its management prerogative of formulating a Code of Discipline"; (b) engaging in quasi-judicial legislation in ordering PAL to share said prerogative with the union; (c) deciding beyond the issue of unfair labor practice, and (d) requiring PAL to reconsider pending cases still in the arbitral level (p. 7, Petition; p. 8,Rollo.)

As stated above, the Principal issue submitted for resolution in the instant petition is whether management may be compelled to share with the union or its employees its prerogative of formulating a code of discipline.

PAL asserts that when it revised its Code on March 15, 1985, there was no law which mandated the sharing of responsibility therefor between employer and employee.

Indeed, it was only on March 2, 1989, with the approval of Republic Act No. 6715, amending Article 211 of the Labor Code, that the law explicitly considered it a State policy "(t)o ensure the participation of workers in decision and policy-making processes affecting the rights, duties and welfare." However, even in the absence of said clear provision of law, the exercise of management prerogatives was never considered boundless. Thus, in Cruz vs. Medina (177 SCRA 565 [1989]) it was held that management's prerogatives must be without abuse of discretion.

In San Miguel Brewery Sales Force Union (PTGWO) vs. Ople (170 SCRA 25 [1989]), we upheld the company's right to implement a new system of distributing its products, but gave the following caveat:

So long as a company's management prerogatives are exercised in good faith for the advancement of the employer's interest and not for the purpose of defeating or circumventing the rights of the employees under special laws or under valid agreements, this Court will uphold them. (at p. 28.)

All this points to the conclusion that the exercise of managerial prerogatives is not unlimited. It is circumscribed by limitations found in law, a collective bargaining agreement, or the general principles of fair play and justice (University of Sto. Tomas vs. NLRC, 190 SCRA 758 [1990]). Moreover, as enunciated in Abbott Laboratories (Phil.), vs. NLRC (154 713 [1987]), it must be duly established that the prerogative being invoked is clearly a managerial one.

A close scrutiny of the objectionable provisions of the Code reveals that they are not purely business-oriented nor do they concern the management aspect of the business of the company as in the San Miguel case. The provisions of the Code clearly have repercusions on the employee's right to security of tenure. The implementation of the provisions may result in the deprivation of an employee's means of livelihood which, as correctly pointed out by the NLRC, is a property right (Callanta, vs Carnation Philippines, Inc., 145 SCRA 268 [1986]). In view of these aspects of the case which border on infringement of constitutional rights, we must uphold the constitutional requirements for the protection of labor and the promotion of social justice, for these factors, according to Justice Isagani Cruz, tilt "the scales of justice when there is doubt, in favor of the worker" (Employees Association of the Philippine American Life Insurance Company vs. NLRC, 199 SCRA 628 [1991] 635).

Verily, a line must be drawn between management prerogatives regarding business operations per se and those which affect the rights of the employees. In treating the latter, management should see to it that its employees are at least properly informed of its decisions or modes action. PAL asserts that all its employees have been furnished copies of the Code. Public respondents found to the contrary, which finding, to say the least is entitled to great respect.

PAL posits the view that by signing the 1989-1991 collective bargaining agreement, on June 27, 1990, PALEA in effect, recognized PAL's "exclusive right to make and enforce company rules and regulations to carry out the functions of management without having to discuss the same with PALEA and much less, obtain the latter'sconformity thereto" (pp. 11-12, Petitioner's Memorandum; pp 180-181, Rollo.) Petitioner's view is based on the following provision of the agreement:

The Association recognizes the right of the Company to determine matters of management it policy and Company operations and to direct its manpower. Management of the Company includes the right to organize, plan, direct and control operations, to hire, assign employees to work, transfer employees from one department, to another, to promote, demote, discipline, suspend or discharge employees for just cause; to lay-off employees for valid and legal causes, to introduce new or improved methods or facilities or to change existing methods or facilities and the right to make and enforce Company rules and regulations to carry out the functions of management.

The exercise by management of its prerogative shall be done in a just reasonable, humane and/or lawful manner.

Such provision in the collective bargaining agreement may not be interpreted as cession of employees' rights to participate in the deliberation of matters which may affect their rights and the formulation of policies relative thereto. And one such mater is the formulation of a code of discipline.

Indeed, industrial peace cannot be achieved if the employees are denied their just participation in the discussion of matters affecting their rights. Thus, even before Article 211 of the labor Code (P.D. 442) was amended by Republic Act No. 6715, it was already declared a policy of the State, "(d) To promote the enlightenment of workers concerning their rights and obligations . . . as employees." This was, of course, amplified by Republic Act No 6715 when it decreed the "participation of workers in decision and policy making processes affecting their rights, duties and welfare." PAL's position that it cannot be saddled with the "obligation" of sharing management prerogatives as during the formulation of the Code, Republic Act No. 6715 had not yet been enacted (Petitioner's Memorandum, p. 44; Rollo, p. 212), cannot thus be sustained. While such "obligation" was not yet founded in law when the Code was formulated, the attainment of a harmonious labor-management relationship and the then already existing state policy of enlightening workers concerning their rights as employees demand no less than the observance of transparency in managerial moves affecting employees' rights.

Petitioner's assertion that it needed the implementation of a new Code of Discipline considering the nature of its business cannot be overemphasized. In fact, its being a local monopoly in the business demands the most stringent of measures to attain safe travel for its patrons. Nonetheless, whatever disciplinary measures are adopted cannot be properly implemented in the absence of full cooperation of the employees. Such cooperation cannot be attained if the employees are restive on account, of their being left out in the determination of cardinal and fundamental matters affecting their employment.

WHEREFORE, the petition is DISMISSED and the questioned decision AFFIRMED. No special pronouncement is made as to costs. SO ORDERED.

G.R. No. 127598 February 22, 2000 YNARES-SANTIAGO, J.:

MANILA ELECTRIC COMPANY, petitioner, vs. Hon. SECRETARY OF LABOR LEONARDO QUISUMBING and MERALCO EMPLOYEES and WORKERS ASSOCIATION (MEWA), respondent.

In the Decision promulgated on January 27, 1999, the Court disposed of the case as follows:

WHEREFORE, the petition is granted and the orders of public respondent Secretary of Labor dated August 19, 1996 and December 28, 1996 are set aside to the extent set forth above. The parties are directed to execute a Collective Bargaining Agreement incorporating the terms and conditions contained in the unaffected portions of the Secretary of Labor's orders of August 19, 1996 and December 28, 1996, and the modifications set forth above. The retirement fund issue is remanded to the Secretary of Labor for reception of evidence and determination of the legal personality of the MERALCO retirement fund.1

The modifications of the public respondent's resolutions include the following:

January 27, 1999 decision Secretary's resolution

Wages - P1,900.00 for 1995-96 P2,200.00

X'mas bonus - modified to one month 2 months

Retirees - remanded to the Secretary granted

Loan to coops - denied granted

GHSIP, HMP and Housing loans - granted up to P60,000.00 granted

Signing bonus - denied granted

Union leave - 40 days (typo error) 30 days

High voltage/pole - not apply to those who are not exposed to the risk

members of a team

Collectors - no need for cash bond, no need to reduce quota and MAPL

CBU - exclude confidential employees include

Union security - maintenance of membership closed shop

Contracting out - no need to consult union consult first

All benefits - existing terms and conditions all terms

Retroactivity - Dec. 28, 1996-Dec. 27, 199(9) from Dec. 1, 1995

Dissatisfied with the Decision, some alleged members of private respondent union (Union for brevity) filed a motion for intervention and a motion for reconsideration of the said Decision. A separate intervention was likewise made by the supervisor's union (FLAMES2) of petitioner corporation alleging that it has bona fide legal interest in the outcome of the case.3 The Court required the "proper parties" to file a comment to the three motions for reconsideration but the Solicitor-General asked that he be excused from filing the comment because the "petition filed in the instant case was granted" by the Court.4 Consequently, petitioner filed its own consolidated comment. An "Appeal Seeking Immediate Reconsideration" was also filed by the alleged newly elected president of the Union.5 Other subsequent pleadings were filed by the parties and intervenors.

The issues raised in the motions for reconsideration had already been passed upon by the Court in the January 27, 1999 decision. No new arguments were presented for consideration of the Court. Nonetheless, certain matters will be considered herein, particularly those involving the amount of wages and the retroactivity of the Collective Bargaining Agreement (CBA) arbitral awards.

Petitioner warns that if the wage increase of P2,200.00 per month as ordered by the Secretary is allowed, it would simply pass the cost covering such increase to the consumers through an increase in the rate of electricity. This is a non sequitur. The Court cannot be threatened with such a misleading argument. An increase in the prices of electric current needs the approval of the appropriate regulatory government agency and does not automatically result from a mere increase in the wages of petitioner's employees. Besides, this argument presupposes that petitioner is capable of meeting a wage increase. The All Asia Capital report upon which the Union relies to support its position regarding the wage issue cannot be an accurate basis and conclusive determinant of the rate of wage increase. Section 45 of Rule 130 Rules of Evidence provides:

Commercial lists and the like. — Evidence of statements of matters of interest to persons engaged in an occupation contained in a list, register, periodical, or other published compilation is admissible as tending to prove the truth of any relevant matter so stated if that compilation is published for use by persons engaged in that occupation and is generally used and relied upon by them therein.

Under the afore-quoted rule, statement of matters contained in a periodical, may be admitted only "if that compilation is published for use by persons engaged in that occupation and is generally used and relied upon by them therein." As correctly held in our Decision dated January 27, 1999, the cited report is a mere newspaper account and not even a commercial list. At most, it is but an analysis or opinion which carries no persuasive weight for purposes of this case as no sufficient figures to support it were presented. Neither did anybody testify to its accuracy. It cannot be said that businessmen generally rely on news items such as this in their occupation. Besides, no evidence was presented that the publication was regularly prepared by a person in touch with the market and that it is generally regarded as trustworthy and reliable. Absent extrinsic proof of their accuracy, these reports are not admissible.6 In the same manner, newspapers containing stock quotations are not admissible in evidence when the source of the reports is available.7 With more reason, mere analyses or projections of such reports cannot be admitted. In particular, the source of the report in this case can be easily made available considering that the same is necessary for compliance with certain governmental requirements.

Nonetheless, by petitioner's own allegations, its actual total net income for 1996 was P5.1 billion.8 An estimate by the All Asia financial analyst stated that petitioner's net operating income for the same year was about P5.7 billion, a figure which the Union relies on to support its claim. Assuming without admitting the truth thereof, the figure is higher than the P4.171 billion allegedly suggested by petitioner as its projected net operating income. The P5.7 billion which was the Secretary's basis for granting the P2,200.00 is higher than the actual net income of P5.1 billion admitted by petitioner. It would be proper then to increase this Court's award of P1,900.00 to P2,000.00 for the two years of the CBA award. For 1992, the agreed CBA wage increase for rank-and-file was P1,400.00 and was reduced to P1,350.00; for 1993; further reduced to P1,150.00 for 1994. For supervisory employees, the agreed wage increase for the years 1992-1994 are P1,742.50, P1,682.50 and P1,442.50, respectively. Based on the foregoing figures, the P2,000.00 increase for the two-year period awarded to the rank-and-file is much higher than the highest increase granted to supervisory employees.9 As mentioned in the January 27, 1999 Decision, the Court does "not seek to enumerate in this decision the factors that should affect wage determination" because collective bargaining disputes particularly those affecting the national interest and public service "requires due consideration and proper balancing of the interests of the parties to the dispute and of those who might be affected by the

dispute."10 The Court takes judicial notice that the new amounts granted herein are significantly higher than the weighted average salary currently enjoyed by other rank-and-file employees within the community. It should be noted that the relations between labor and capital is impressed with public interest which must yield to the common good.11 Neither party should act oppressively against the other or impair the interest or convenience of the public.12 Besides, matters of salary increases are part of management prerogative.13

On the retroactivity of the CBA arbitral award, it is well to recall that this petition had its origin in the renegotiation of the parties' 1992-1997 CBA insofar as the last two-year period thereof is concerned. When the Secretary of Labor assumed jurisdiction and granted the arbitral awards, there was no question that these arbitral awards were to be given retroactive effect. However, the parties dispute the reckoning period when retroaction shall commence. Petitioner claims that the award should retroact only from such time that the Secretary of Labor rendered the award, invoking the 1995 decision in Pier 8 case14 where the Court, citing Union of Filipino Employees v. NLRC,15said:

The assailed resolution which incorporated the CBA to be signed by the parties was promulgated on June 5, 1989, the expiry date of the past CBA. Based on the provision of Section 253-A, its retroactivity should be agreed upon by the parties. But since no agreement to that effect was made, public respondent did not abuse its discretion in giving the said CBA a prospective effect. The action of the public respondent is within the ambit of its authority vested by existing law.

On the other hand, the Union argues that the award should retroact to such time granted by the Secretary, citing the 1993 decision of St. Luke's.16

Finally, the effectivity of the Order of January 28, 1991, must retroact to the date of the expiration of the previous CBA, contrary to the position of petitioner. Under the circumstances of the case, Article 253-A cannot be properly applied to herein case. As correctly stated by public respondent in his assailed Order of April 12, 1991 dismissing petitioner's Motion for Reconsideration —

Anent the alleged lack of basis for the retroactivity provisions awarded; we would stress that the provision of law invoked by the Hospital, Article 253-A of the Labor Code, speaks of agreements by and between the parties, and not arbitral awards . . .

Therefore, in the absence of a specific provision of law prohibiting retroactivity of the effectivity of arbitral awards issued by the Secretary of Labor pursuant to Article 263(g) of the Labor Code, such as herein involved, public respondent is deemed vested with plenary and discretionary powers to determine the effectivity thereof.

In the 1997 case of Mindanao Terminal,17 the Court applied the St. Luke's doctrine and ruled that:

In St. Luke's Medical Center v. Torres, a deadlock also developed during the CBA negotiations between management and the union. The Secretary of Labor assumed jurisdiction and ordered the retroaction of the CBA to the date of expiration of the previous CBA. As in this case, it was alleged that the Secretary of Labor gravely abused its discretion in making his award retroactive. In dismissing this contention this Court held:

Therefore, in the absence of a specific provision of law prohibiting retroactive of the effectivity of arbitral awards issued by the Secretary of Labor pursuant to Article 263(g) of the Labor Code, such as herein involved, public respondent is deemed vested with plenary and discretionary powers to determine the effectivity thereof.

The Court in the January 27, 1999 Decision, stated that the CBA shall be "effective for a period of 2 years counted from December 28, 1996 up to December 27, 1999." Parenthetically, this actually covers a three-year period. Labor laws are silent as to when an arbitral award in a labor dispute where the Secretary had assumed jurisdiction by virtue of Article 263 (g) of the Labor Code shall retroact. In general, a CBA negotiated within six months after the expiration of the existing CBA retroacts to the day immediately following such date and if agreed thereafter, the effectivity depends on the agreement of the parties.18 On the other hand, the law is silent as to the retroactivity of a CBA arbitral award or that granted not by virtue of the mutual agreement of the parties but by intervention of the government. Despite the silence of the law, the Court rules herein that CBA arbitral awards granted after six months from the expiration of the last CBA shall retroact to such time agreed upon by both employer and the employees or their union. Absent such an agreement as to retroactivity, the award shall retroact to the first day after the six-month period following the expiration of the last day of the CBA should there be one. In the absence of a CBA, the Secretary's determination of the date of retroactivity as part of his discretionary powers over arbitral awards shall control.

It is true that an arbitral award cannot per se be categorized as an agreement voluntarily entered into by the parties because it requires the interference and imposing power of the State thru the Secretary of Labor when he assumes jurisdiction. However, the arbitral award can be considered as an approximation of a collective bargaining agreement which would otherwise have been entered into by the parties.19 The terms or periods set forth in Article 253-A pertains explicitly to a CBA. But there is nothing that would prevent its application by analogy to an arbitral award by the Secretary considering the absence of an applicable law. Under Article 253-A: "(I)f any such agreement is entered into beyond six months, the parties shall agree on the duration of retroactivity thereof." In other words, the law contemplates retroactivity whether the agreement be entered into before or after the said six-month period. The agreement of the parties need not be categorically stated for their acts may be considered in determining the duration of retroactivity. In this connection, the Court considers the letter of petitioner's Chairman of the Board and its President addressed to their stockholders, which states that the CBA "for the rank-and-file employees covering the period December 1, 1995 to November 30, 1997 is still with the Supreme Court,"20 as indicative of petitioner's recognition that the CBA award covers the said period. Earlier, petitioner's negotiating panel

transmitted to the Union a copy of its proposed CBA covering the same period inclusive.21 In addition, petitioner does not dispute the allegation that in the past CBA arbitral awards, the Secretary granted retroactivity commencing from the period immediately following the last day of the expired CBA. Thus, by petitioner's own actions, the Court sees no reason to retroact the subject CBA awards to a different date. The period is herein set at two (2) years from December 1, 1995 to November 30, 1997.

On the allegation concerning the grant of loan to a cooperative, there is no merit in the union's claim that it is no different from housing loans granted by the employer. The award of loans for housing is justified because it pertains to a basic necessity of life. It is part of a privilege recognized by the employer and allowed by law. In contrast, providing seed money for the establishment of the employee's cooperative is a matter in which the employer has no business interest or legal obligation. Courts should not be utilized as a tool to compel any person to grant loans to another nor to force parties to undertake an obligation without justification. On the contrary, it is the government that has the obligation to render financial assistance to cooperatives and the Cooperative Code does not make it an obligation of the employer or any private individual.22

Anent the 40-day union leave, the Court finds that the same is a typographical error. In order to avoid any confusion, it is herein declared that the union leave is only thirty (30) days as granted by the Secretary of Labor and affirmed in the Decision of this Court.

The added requirement of consultation imposed by the Secretary in cases of contracting out for six (6) months or more has been rejected by the Court. Suffice it to say that the employer is allowed to contract out services for six months or more. However, a line must be drawn between management prerogatives regarding business operations per se and those which affect the rights of employees, and in treating the latter, the employer should see to it that its employees are at least properly informed of its decision or modes of action in order to attain a harmonious labor-management relationship and enlighten the workers concerning their rights.23 Hiring of workers is within the employer's inherent freedom to regulate and is a valid exercise of its management prerogative subject only to special laws and agreements on the matter and the fair standards of justice.24 The management cannot be denied the faculty of promoting efficiency and attaining economy by a study of what units are essential for its operation. It has the ultimate determination of whether services should be performed by its personnel or contracted to outside agencies. While there should be mutual consultation, eventually deference is to be paid to what management decides.25 Contracting out of services is an exercise of business judgment or management prerogative.26 Absent proof that management acted in a malicious or arbitrary manner, the Court will not interfere with the exercise of judgment by an employer.27 As mentioned in the January 27, 1999 Decision, the law already sufficiently regulates this matter.28 Jurisprudence also provides adequate limitations, such that the employer must be motivated by good faith and the contracting out should not be resorted to circumvent the law or must not have been the result of malicious or arbitrary actions.29 These are matters that may be categorically determined only when an actual suit on the matter arises.

WHEREFORE, the motion for reconsideration is PARTIALLY GRANTED and the assailed Decision is MODIFIED as follows: (1) the arbitral award shall retroact from December 1, 1995 to November 30, 1997; and (2) the award of wage is increased from the original amount of One Thousand Nine Hundred Pesos (P1,900.00) to Two Thousand Pesos (P2,000.00) for the years 1995 and 1996. This Resolution is subject to the monetary advances granted by petitioner to its rank-and-file employees during the pendency of this case assuming such advances had actually been distributed to them. The assailed Decision is AFFIRMED in all other respects. SO ORDERED.

The General Banking Law of 2000 or RA 8791

Section 22. Strikes and Lockouts. - The banking industry is hereby declared as indispensable to the national interest and, notwithstanding the provisions of any law to the contrary, any strike or lockout involving banks, if unsettled after seven (7) calendar days shall be reported by the Bangko Sentral to the secretary of Labor who may assume jurisdiction over the dispute or decide it or certify the sane to the National Labor Relations Commission for compulsory arbitration. However, the President of the Philippines may at any time intervene and assume jurisdiction over such labor dispute in order to settle or terminate the same. (6-E)

G.R. No. L-21278 December 27, 1966 ZALDIVAR, J.:

FEATI UNIVERSITY, petitioner, vs. HON. JOSE S. BAUTISTA, Presiding Judge of the Court of Industrial Relations and FEATI UNIVERSITY FACULTY CLUB-PAFLU, respondents.

----------------------------------------

G.R. No. L-21462 December 27, 1966

FEATI UNIVERSITY, petitioner-appellant, vs. FEATI UNIVERSITY FACULTY CLUB-PAFLU, respondent-appellee.

----------------------------------------

G.R. No. L-21500 December 27, 1966

FEATI UNIVERSITY, petitioner-appellant, vs. FEATI UNIVERSITY FACULTY CLUB-PAFLU, respondent-appellee.

This Court, by resolution, ordered that these three cases be considered together, and the parties were allowed to file only one brief for the three cases.

On January 14, 1963, the President of the respondent Feati University Faculty Club-PAFLU — hereinafter referred to as Faculty Club — wrote a letter to Mrs. Victoria L. Araneta, President of petitioner Feati University — hereinafter referred to as University — informing her of the organization of the Faculty Club into a registered labor union. The Faculty Club is composed of members who are professors and/or instructors of the University. On January 22, 1963, the President of the Faculty Club sent another letter containing twenty-six demands that have connection with the employment of the members of the Faculty Club by the University, and requesting an answer within ten days from receipt thereof. The President of the University answered the two letters, requesting that she be given at least thirty days to study thoroughly the different phases of the demands. Meanwhile counsel for the University, to whom the demands were referred, wrote a letter to the President of the Faculty Club demanding proof of its majority status and designation as a bargaining representative. On February 1, 1963, the President of the Faculty Club again wrote the President of the University rejecting the latter's request for extension of time, and on the same day he filed a notice of strike with the Bureau of Labor alleging as reason therefor the refusal of the University to bargain collectively. The parties were called to conferences at the Conciliation Division of the Bureau of Labor but efforts to conciliate them failed. On February 18, 1963, the members of the Faculty Club declared a strike and established picket lines in the premises of the University, resulting in the disruption of classes in the University. Despite further efforts of the officials from the Department of Labor to effect a settlement of the differences between the management of the University and the striking faculty members no satisfactory agreement was arrived at. On March 21, 1963, the President of the Philippines certified to the Court of Industrial Relations the dispute between the management of the University and the Faculty Club pursuant to the provisions of Section 10 of Republic Act No. 875.

In connection with the dispute between the University and the Faculty Club and certain incidents related to said dispute, various cases were filed with the Court of Industrial Relations — hereinafter referred to as CIR. The three cases now before this Court stemmed from those cases that were filed with the CIR.

CASE NO. G.R. NO. L-21278

On May 10, 1963, the University filed before this Court a "petition for certiorari and prohibition with writ of preliminary injunction", docketed as G.R. No. L-21278, praying: (1) for the issuance of the writ of preliminary injunction enjoining respondent Judge Jose S. Bautista of the CIR to desist from proceeding in CIR Cases Nos. 41-IPA, 1183-MC, and V-30; (2) that the proceedings in Cases Nos. 41-IPA and 1183-MC be annulled; (3) that the orders dated March 30, 1963 and April 6, 1963 in Case No. 41-IPA, the order dated April 6, 1963 in Case No. 1183-MC, and the order dated April 29, 1963 in Case No. V-30, all be annulled; and (4) that the respondent Judge be ordered to dismiss said cases Nos. 41-IPA, 1183-MC and V-30 of the CIR.

On May 10, 1963, this Court issued a writ of preliminary injunction, upon the University's filing a bond of P1,000.00, ordering respondent Judge Jose S. Bautista as Presiding Judge of the CIR, until further order from this Court, "to desist and refrain from further proceeding in the premises (Cases Nos. 41-IPA, 1183-MC and V-30 of the Court of Industrial Relations)."1 On December 4, 1963, this Court ordered the injunction bond increased to P100,000.00; but on January 23, 1964, upon a motion for reconsideration by the University, this Court reduced the bond to P50,000.00.

A brief statement of the three cases — CIR Cases 41-IPA, 1183-MC and V-30 — involved in the Case G.R. No. L-21278, is here necessary.

CIR Case No. 41-IPA, relates to the case in connection with the strike staged by the members of the Faculty Club. As we have stated, the dispute between the University and the Faculty Club was certified on March 21, 1963 by the President of the Philippines to the CIR. On the strength of the presidential certification, respondent Judge Bautista set the case for hearing on March 23, 1963. During the hearing, the Judge endeavored to reconcile the part and it was agreed upon that the striking faculty members would return to work and the University would readmit them under a status quo arrangement. On that very same day, however, the University, thru counsel filed a motion to dismiss the case upon the ground that the CIR has no jurisdiction over the case, because (1) the Industrial Peace Act is not applicable to the University, it being an educational institution, nor to the members of the Faculty Club, they being independent contractors; and (2) the presidential certification is violative of Section 10 of the Industrial Peace Act, as the University is not an industrial establishment and there was no industrial dispute which could be certified to the CIR. On March 30, 1963 the respondent Judge issued an order denying the motion to dismiss and declaring that the Industrial Peace Act is applicable to both parties in the case and that the CIR had acquired jurisdiction over the case by virtue of the presidential certification. In the same order, the respondent Judge, believing that the dispute could not be decided promptly, ordered the strikers to return immediately to work and the University to take them back under the last terms and conditions existing before the dispute arose, as per agreement had during the hearing on March 23, 1963; and likewise enjoined the University, pending adjudication of the case, from dismissing any employee or laborer without previous authorization from the CIR. The University filed on April 1, 1963 a motion for reconsideration of the order of March 30, 1963 by the CIRen banc, and at the same time asking that the motion for reconsideration be first heard by the CIR en banc. Without the motion for reconsideration having been acted upon by the CIR en banc, respondent Judge set the case for hearing on the merits for May 8, 1963. The University moved for the cancellation of said hearing upon the ground that the court en banc should first hear the motion for reconsideration and resolve the issues raised therein before the case is heard on the merits. This motion for cancellation of the hearing was denied. The respondent Judge, however, cancelled the scheduled hearing when counsel for the University manifested that he would take up before the Supreme Court, by a petition for certiorari, the matter regarding the actuations of the respondent

Judge and the issues raised in the motion for reconsideration, specially the issue relating to the jurisdiction of the CIR. The order of March 30, 1963 in Case 41-IPA is one of the orders sought to be annulled in the case, G.R. No. L-21278.

Before the above-mentioned order of March 30, 1963 was issued by respondent Judge, the University had employed professors and/or instructors to take the places of those professors and/or instructors who had struck. On April 1, 1963, the Faculty Club filed with the CIR in Case 41-IPA a petition to declare in contempt of court certain parties, alleging that the University refused to accept back to work the returning strikers, in violation of the return-to-work order of March 30, 1963. The University filed, on April 5,1963, its opposition to the petition for contempt, denying the allegations of the Faculty Club and alleging by way of special defense that there was still the motion for reconsideration of the order of March 30, 1963 which had not yet been acted upon by the CIR en banc. On April 6, 1963, the respondent Judge issued an order stating that "said replacements are hereby warned and cautioned, for the time being, not to disturb nor in any manner commit any act tending to disrupt the effectivity of the order of March 30,1963, pending the final resolution of the same."2 On April 8, 1963, there placing professors and/or instructors concerned filed, thru counsel, a motion for reconsideration by the CIR en banc of the order of respondent Judge of April 6, 1963. This order of April 6, 1963 is one of the orders that are sought to be annulled in case G.R. No. L-21278.

CIR Case No. 1183-MC relates to a petition for certification election filed by the Faculty Club on March 8, 1963 before the CIR, praying that it be certified as the sole and exclusive bargaining representative of all the employees of the University. The University filed an opposition to the petition for certification election and at the same time a motion to dismiss said petition, raising the very same issues raised in Case No. 41-IPA, claiming that the petition did not comply with the rules promulgated by the CIR; that the Faculty Club is not a legitimate labor union; that the members of the Faculty Club cannot unionize for collective bargaining purposes; that the terms of the individual contracts of the professors, instructors, and teachers, who are members of the Faculty Club, would expire on March 25 or 31, 1963; and that the CIR has no jurisdiction to take cognizance of the petition because the Industrial Peace Act is not applicable to the members of the Faculty Club nor to the University. This case was assigned to Judge Baltazar Villanueva of the CIR. Before Judge Villanueva could act on the motion to dismiss, however, the Faculty Club filed on April 3, 1963 a motion to withdraw the petition on the ground that the labor dispute (Case No. 41-IPA) had already been certified by the President to the CIR and the issues raised in Case No. 1183-MC were absorbed by Case No. 41-IPA. The University opposed the withdrawal, alleging that the issues raised in Case No. 1183-MC were separate and distinct from the issues raised in Case No. 41-IPA; that the questions of recognition and majority status in Case No. 1183-MC were not absorbed by Case No. 41-IPA; and that the CIR could not exercise its power of compulsory arbitration unless the legal issue regarding the existence of employer-employee relationship was first resolved. The University prayed that the motion of the Faculty Club to withdraw the petition for certification election be denied, and that its motion to dismiss the petition be heard. Judge Baltazar Villanueva, finding that the reasons stated by the Faculty Club in the motion to withdraw were well taken, on April 6, 1963, issued an order granting the withdrawal. The University filed, on April 24, 1963, a motion for reconsideration of that order of April 6, 1963 by the CIR en banc. This order of April 6, 1963 in Case No. 1183-MC is one of the orders sought to be annulled in the case, G.R. No. L-21278, now before Us.

CIR Case No. V-30 relates to a complaint for indirect contempt of court filed against the administrative officials of the University. The Faculty Club, through the Acting Chief Prosecutor of the CIR, filed with the CIR a complaint docketed as Case No. V-30, charging President Victoria L. Araneta, Dean Daniel Salcedo, Executive Vice-President Rodolfo Maslog, and Assistant to the President Jose Segovia, as officials of the University, with indirect contempt of court, reiterating the same charges filed in Case No. 41-IPA for alleged violation of the order dated March 30, 1963. Based on the complaint thus filed by the Acting Chief Prosecutor of the CIR, respondent Judge Bautista issued on April 29, 1963 an order commanding any officer of the law to arrest the above named officials of the University so that they may be dealt with in accordance with law, and the same time fixed the bond for their release at P500.00 each. This order of April 29, 1963 is also one of the orders sought to be annulled in the case, G.R. No. L-2l278.

The principal allegation of the University in its petition for certiorari and prohibition with preliminary injunction in Case G.R. No. L-21278, now before Us, is that respondent Judge Jose S. Bautista acted without, or in excess of, jurisdiction, or with grave abuse of discretion, in taking cognizance of, and in issuing the questioned orders in, CIR Cases Nos. 41-IPA 1183-MC and V-30. Let it be noted that when the petition for certiorari and prohibition with preliminary injunction was filed on May 10, 1963 in this case, the questioned order in CIR Cases Nos. 41-IPA, 1183-MC and V-30 were still pending action by the CIR en banc upon motions for reconsideration filed by the University.

On June 10, 1963, the Faculty Club filed its answer to the petition for certiorari and prohibition with preliminary injunction, admitting some allegations contained in the petition and denying others, and alleging special defenses which boil down to the contentions that (1) the CIR had acquired jurisdiction to take cognizance of Case No. 41-IPA by virtue of the presidential certification, so that it had jurisdiction to issue the questioned orders in said Case No. 41-IPA; (2) that the Industrial Peace Act (Republic Act 875) is applicable to the University as an employer and to the members of the Faculty Club as employees who are affiliated with a duly registered labor union, so that the Court of Industrial Relations had jurisdiction to take cognizance of Cases Nos. 1183-MC and V-30 and to issue the questioned orders in those two cases; and (3) that the petition for certiorari and prohibition with preliminary injunction was prematurely filed because the orders of the CIR sought to be annulled were still the subjects of pending motions for reconsideration before the CIR en banc when said petition for certiorari and prohibition with preliminary injunction was filed before this Court.

CASE G.R. NO. L-21462

This case, G.R. No. L-21462, involves also CIR Case No. 1183-MC. As already stated Case No. 1183-MC relates to a petition for certification election filed by the Faculty Club as a labor union, praying that it be certified as the sole and exclusive bargaining representative of all employees of the University. This petition was opposed by the University, and at the same time it filed a motion to dismiss said petition. But before Judge Baltazar Villanueva could act on the petition for certification election and the motion to dismiss

the same, Faculty Club filed a motion to withdraw said petition upon the ground that the issue raised in Case No. 1183-MC were absorbed by Case No. 41-IPA which was certified by the President of the Philippines. Judge Baltazar Villanueva, by order April 6, 1963, granted the motion to withdraw. The University filed a motion for reconsideration of that order of April 6, 1963 by the CIR en banc. That motion for reconsideration was pending action by the CIR en banc when the petition forcertiorari and prohibition with preliminary injunction in Case G.R. no. L-21278 was filed on May 10, 1963. As earlier stated this Court, in Case G.R. No. L-21278, issued a writ of preliminary injunction on May 10, 1963, ordering respondent Judge Bautista, until further order from this Court, to desist and refrain from further proceeding in the premises (Cases Nos. 41-IPA, 1183-MC and V-30 of the Court of Industrial Relations).

On June 5, 1963, that is, after this Court has issued the writ of preliminary injunction in Case G.R. No. L-21278, the CIR en banc issued a resolution denying the motion for reconsideration of the order of April 6, 1963 in Case No. 1183-MC.

On July 8, 1963, the University filed before this Court a petition for certiorari, by way of an appeal from the resolution of the CIR en banc, dated June 5, 1963, denying the motion for reconsideration of the order of April 6, 1963 in Case No. 1183-MC. This petition was docketed as G.R. No. L-21462. In its petition for certiorari, the University alleges (1) that the resolution of the Court of Industrial Relations of June 5, 1963 was null and void because it was issued in violation of the writ of preliminary injunction issued in Case G.R. No. L-21278; (2) that the issues of employer-employee relationship, the alleged status as a labor union, majority representation and designation as bargaining representative in an appropriate unit of the Faculty Club should have been resolved first in Case No. 1183-MC prior to the determination of the issues in Case No. 41-IPA and therefore the motion to withdraw the petition for certification election should not have been granted upon the ground that the issues in the first case have been absorbed in the second case; and (3) the lower court acted without or in excess of jurisdiction in taking cognizance of the petition for certification election and that the same should have been dismissed instead of having been ordered withdrawn. The University prayed that the proceedings in Case No. 1183-MC and the order of April 6, 1963 and the resolution of June 5, 1963 issued therein be annulled, and that the CIR be ordered to dismiss Case No. 1183-MC on the ground of lack of jurisdiction.

The Faculty Club filed its answer, admitting some, and denying other, allegations in the petition for certiorari; and specially alleging that the lower court's order granting the withdrawal of the petition for certification election was in accordance with law, and that the resolution of the court en banc on June 5, 1963 was not a violation of the writ of preliminary injunction issued in Case G.R. No. L-21278 because said writ of injunction was issued against Judge Jose S. Bautista and not against the Court of Industrial Relations, much less against Judge Baltazar Villanueva who was the trial judge of Case No. 1183-MC.

CASE G.R. NO. L-21500

This case, G.R. No. L-21500, involves also CIR Case No. 41-IPA. As earlier stated, Case No. 41-IPA relates to the strike staged by the members of the Faculty Club and the dispute was certified by the President of the Philippines to the CIR. The University filed a motion to dismiss that case upon the ground that the CIR has no jurisdiction over the case, and on March 30, 1963 Judge Jose S. Bautista issued an order denying the motion to dismiss and declaring that the Industrial Peace Act is applicable to both parties in the case and that the CIR had acquired jurisdiction over the case by virtue of the presidential certification; and in that same order Judge Bautista ordered the strikers to return to work and the University to take them back under the last terms and conditions existing before the dispute arose; and enjoined the University from dismissing any employee or laborer without previous authority from the court. On April 1, 1963, the University filed a motion for reconsideration of the order of March 30, 1963 by the CIR en banc. That motion for reconsideration was pending action by the CIR en banc when the petition for certiorari and prohibition with preliminary injunction in Case G.R. No. L-21278 was filed on May 10, 1963. As we have already stated, this Court in said case G.R. No. L-21278, issued a writ of preliminary injunction on May 10, 1963 ordering respondent Judge Jose S. Bautista, until further order from this Court, to desist and refrain from further proceeding in the premises (Cases Nos. 41-IPA, 1183-MC and V-30 of the Court of Industrial Relations).

On July 2, 1963, the University received a copy of the resolution of the CIR en banc, dated May 7, 1963 but actually received and stamped at the Office of the Clerk of the CIR on June 28, 1963, denying the motion for reconsideration of the order dated March 30, 1963 in Case No. 41-IPA.

On July 23, 1963, the University filed before this Court a petition for certiorari, by way of an appeal from the resolution of the Court of Industrial Relations en banc dated May 7, 1963 (but actually received by said petitioner on July 2, 1963) denying the motion for reconsideration of the order of March 30, 1963 in Case No. 41-IPA. This petition was docketed as G.R. No. L-21500. In its petition for certiorari the University alleges (1) that the resolution of the CIR en banc, dated May 7, 1963 but filed with the Clerk of the CIR on June 28, 1963, in Case No. 41-IPA, is null and void because it was issued in violation of the writ of preliminary injunction issued by this Court in G.R. No. L-21278; (2) that the CIR, through its Presiding Judge, had no jurisdiction to take cognizance of Case No. 41-IPA and the order of March 30, 1963 and the resolution dated May 7, 1963 issued therein are null and void; (3) that the certification made by the President of the Philippines is not authorized by Section 10 of Republic Act 875, but is violative thereof; (4) that the Faculty Club has no right to unionize or organize as a labor union for collective bargaining purposes and to be certified as a collective bargaining agent within the purview of the Industrial Peace Act, and consequently it has no right to strike and picket on the ground of petitioner's alleged refusal to bargain collectively where such duty does not exist in law and is not enforceable against an educational institution; and (5) that the return-to-work order of March 30, 1963 is improper and illegal. The petition prayed that the proceedings in Case No. 41-IPA be annulled, that the order dated March 30, 1963 and the resolution dated May 7, 1963 be revoked, and that the lower court be ordered to dismiss Case 41-IPA on the ground of lack of jurisdiction.

On September 10, 1963, the Faculty Club, through counsel, filed a motion to dismiss the petition for certiorari on the ground that the petition being filed by way of an appeal from the orders of the Court of Industrial Relations denying the motion to dismiss in Case No. 41-IPA, the petition for certiorari is not proper because the orders appealed from are interlocutory in nature.

This Court, by resolution of September 26, 1963, ordered that these three cases (G.R. Nos. L-21278, L-21462 and L-21500) be considered together and the motion to dismiss in Case G.R. No. L-21500 be taken up when the cases are decided on the merits after the hearing.

Brushing aside certain technical questions raised by the parties in their pleadings, We proceed to decide these three cases on the merits of the issues raised.

The University has raised several issues in the present cases, the pivotal one being its claim that the Court of Industrial Relations has no jurisdiction over the parties and the subject matter in CIR Cases 41-IPA, 1183-MC and V-30, brought before it, upon the ground that Republic Act No. 875 is not applicable to the University because it is an educational institution and not an industrial establishment and hence not an "employer" in contemplation of said Act; and neither is Republic Act No. 875 applicable to the members of the Faculty Club because the latter are independent contractors and, therefore, not employees within the purview of the said Act.

In support of the contention that being an educational institution it is beyond the scope of Republic Act No. 875, the University cites cases decided by this Court: Boy Scouts of the Philippines vs. Juliana Araos, L-10091, Jan. 29, 1958; University of San Agustin vs. CIR, et al., L-12222, May 28, 1958; Cebu Chinese High School vs. Philippine Land-Air-Sea Labor Union, PLASLU, L-12015, April 22, 1959; La Consolacion College, et al. vs. CIR, et al., L-13282, April 22, 1960; University of the Philippines, et al. vs. CIR, et al., L-15416, April 8, 1960; Far Eastern University vs. CIR, L-17620, August 31, 1962. We have reviewed these cases, and also related cases subsequent thereto, and We find that they do not sustain the contention of the University. It is true that this Court has ruled that certain educational institutions, like the University of Santo Tomas, University of San Agustin, La Consolacion College, and other juridical entities, like the Boy Scouts of the Philippines and Manila Sanitarium, are beyond the purview of Republic Act No. 875 in the sense that the Court of Industrial Relations has no jurisdiction to take cognizance of charges of unfair labor practice filed against them, but it is nonetheless true that the principal reason of this Court in ruling in those cases that those institutions are excluded from the operation of Republic Act 875 is that those entities are not organized, maintained and operated for profit and do not declare dividends to stockholders. The decision in the case of University of San Agustin vs. Court of Industrial Relations, G.R. No. L-12222, May 28, 1958, is very pertinent. We quote a portion of the decision:

It appears that the University of San Agustin, petitioner herein, is an educational institution conducted and managed by a "religious non-stock corporation duly organized and existing under the laws of the Philippines." It was organized not for profit or gain or division of the dividends among its stockholders, but solely for religious and educational purposes. It likewise appears that the Philippine Association of College and University Professors, respondent herein, is a non-stock association composed of professors and teachers in different colleges and universities and that since its organization two years ago, the university has adopted a hostile attitude to its formation and has tried to discriminate, harass and intimidate its members for which reason the association and the members affected filed the unfair labor practice complaint which initiated this proceeding. To the complaint of unfair labor practice, petitioner filed an answer wherein it disputed the jurisdiction of the Court of Industrial Relations over the controversy on the following grounds:

"(a) That complainants therein being college and/or university professors were not "industrial" laborers or employees, and the Philippine Association of College and University Professors being composed of persons engaged in the teaching profession, is not and cannot be a legitimate labor organization within the meaning of the laws creating the Court of Industrial Relations and defining its powers and functions;

"(b) That the University of San Agustin, respondent therein, is not an institution established for the purpose of gain or division of profits, and consequently, it is not an "industrial" enterprise and the members of its teaching staff are not engaged in "industrial" employment (U.S.T. Hospital Employees Association vs. Sto. Tomas University Hospital, G.R. No. L-6988, 24 May 1954; and San Beda College vs. Court of Industrial Relations and National Labor Union, G.R. No. L-7649, 29 October 1955; 51 O.G. (Nov. 1955) 5636-5640);

"(c) That, as a necessary consequence, alleged controversy between therein complainants and respondent is not an "industrial" dispute, and the Court of Industrial Relations has no jurisdiction, notonly on the parties but also over the subject matter of the complaint."

The issue now before us is: Since the University of San Agustin is not an institution established for profit or gain, nor an industrial enterprise, but one established exclusively for educational purposes, can it be said that its relation with its professors is one of employer and employee that comes under the jurisdiction of the Court of Industrial Relations? In other words, do the provisions of the Magna Carta on unfair labor practice apply to the relation between petitioner and members of respondent association?

The issue is not new. Thus, in the case of Boy Scouts of the Philippines v. Juliana V. Araos, G.R. No. L-10091, promulgated on January 29, 1958, this Court, speaking thru Mr. Justice Montemayor, answered the query in the negative in the following wise:

"The main issue involved in the present case is whether or not a charitable institution or one organized not for profit but for more elevated purposes, charitable, humanitarian, etc., like the Boy Scouts of the Philippines, is included in the definition of "employer" contained in Republic Act 875, and whether the employees of said institution fall under the definition of "employee" also contained in the same Republic Act. If they are included, then any act which may be considered unfair labor practice, within the meaning of said Republic Act, would come under the jurisdiction of the Court of Industrial Relations; but if they do not fall within the scope of said Republic Act, particularly, its definitions of employer and employee, then the Industrial Court would have no jurisdiction at all.

xxx xxx xxx

"On the basis of the foregoing considerations, there is every reason to believe that our labor legislation from Commonwealth Act No. 103, creating the Court of Industrial Relations, down through the Eight-Hour Labor Law, to the Industrial Peace Act, was intended by the Legislature to apply only to industrial employment and to govern the relations between employers engaged in industry and occupations for purposes of profit and gain, and their industrial employees, but not to organizations and entities which are organized, operated and maintained not for profit or gain, but for elevated and lofty purposes, such as, charity, social service, education and instruction, hospital and medical service, the encouragement and promotion of character, patriotism and kindred virtues in youth of the nation, etc.

"In conclusion, we find and hold that Republic Act No. 875, particularly, that portion thereof regarding labor disputes and unfair labor practice, does not apply to the Boy Scouts of the Philippines, and consequently, the Court of Industrial Relations had no jurisdiction to entertain and decide the action or petition filed by respondent Araos. Wherefore, the appealed decision and resolution of the CIR are hereby set aside, with costs against respondent."

There being a close analogy between the relation and facts involved in the two cases, we cannot but conclude that the Court of Industrial Relations has no jurisdiction to entertain the complaint for unfair labor practice lodged by respondent association against petitioner and, therefore, we hereby set aside the order and resolution subject to the present petition, with costs against respondent association.

The same doctrine was confirmed in the case of University of Santo Tomas v. Hon. Baltazar Villanueva, et al., G.R. No. L-13748, October 30, 1959, where this Court ruled that:

In the present case, the record reveals that the petitioner University of Santo Tomas is not an industry organized for profit but an institution of learning devoted exclusively to the education of the youth. The Court of First Instance of Manila in its decision in Civil Case No. 28870, which has long become final and consequently the settled law in the case, found as established by the evidence adduced by the parties therein (herein petitioner and respondent labor union) that while the University collects fees from its students, all its income is used for the improvement and enlargement of the institution. The University declares no dividend, and the members of the corporation who founded it, as ordained in its articles of incorporation, receive no material compensation for the time and sacrifice they render to the University and its students. The respondent union itself in a case before the Industrial Court (Case No. 314-MC) has averred that "the University of Santo Tomas, like the San Beda College, is an educational institution operated not for profit but for the sole purpose of educating young men." (See Annex "B" to petitioner's motion to dismiss.). It is apparent, therefore, that on the face of the record the University of Santo Tomas is not a corporation created for profit but an educational institution and therefore not an industrial or business organization.

In the case of La Consolacion College, et al. vs. CIR, et al., G.R. No. L-13282, April 22, 1960, this Court repeated the same ruling when it said:

The main issue in this appeal by petitioner is that the industry trial court committed an error in holding that it has jurisdiction to act in this case even if it involves unfair labor practice considering that the La Consolacion College is not a business enterprise but an educational institution not organized for profit.

If the claim that petitioner is an educational institution not operated for profit is true, which apparently is the case, because the very court a quo found that it has no stockholder, nor capital . . . then we are of the opinion that the same does not come under the jurisdiction of the Court of Industrial Relations in view of the ruling in the case of Boy Scouts of the Philippines v. Juliana V. Araos, G.R. No. L-10091, decided on January 29, 1958.

It is noteworthy that the cases of the University of San Agustin, the University of Santo Tomas, and La Consolacion College, cited above, all involve charges of unfair labor practice under Republic Act No. 875, and the uniform rulings of this Court are that the Court of Industrial Relations has no jurisdiction over the charges because said Act does not apply to educational institutions that are not operated or maintained for profit and do not declare dividends. On the other hand, in the cases of Far Eastern University v. CIR, et al., G.R. No. L-17620, August 31, 1962, this Court upheld the decision of the Court of Industrial Relations finding the Far Eastern University, also an educational institution, guilty of unfair labor practice. Among the findings of fact in said case was that the Far Eastern University made profits from the school year 1952-1953 to 1958-1959. In affirming the decision of the lower court, this Court had thereby ratified the ruling of the Court of Industrial Relations which applied the Industrial Peace Act to educational institutions that are organized, operated and maintained for profit.

It is also noteworthy that in the decisions in the cases of the Boy Scouts of the Philippines, the University of San Agustin, the University of Sto. Tomas, and La Consolacion College, this Court was not unanimous in the view that the Industrial Peace Act (Republic Act No. 875) is not applicable to charitable, eleemosynary or non-profit organizations — which include educational institutions not operated for profit. There are members of this Court who hold the view that the Industrial Peace Act would apply also to non-profit organizations or entities — the only exception being the Government, including any political subdivision or instrumentality thereof, in so far as governmental functions are concerned. However, in the Far Eastern University case this Court is unanimous in supporting the view that an educational institution that is operated for profit comes within the scope of the Industrial Peace Act. We consider it a settled doctrine of this Court, therefore, that the Industrial Peace Act is applicable to any organization or entity — whatever may be its purpose when it was created — that is operated for profit or gain.

Does the University operate as an educational institution for profit? Does it declare dividends for its stockholders? If it does not, it must be declared beyond the purview of Republic Act No. 875; but if it does, Republic Act No. 875 must apply to it. The University itself admits that it has declared dividends.3 The CIR in its order dated March 30, 1963 in CIR Case No. 41-IPA — which order was issued after evidence was heard — also found that the University is not for strictly educational purposes and that "It realizes profits and parts of such earning is distributed as dividends to private stockholders or individuals (Exh. A and also 1 to 1-F, 2-x 3-x and 4-x)"4 Under this circumstance, and in consonance with the rulings in the decisions of this Court, above cited, it is obvious that Republic Act No. 875 is applicable to herein petitioner Feati University.

But the University claims that it is not an employer within the contemplation of Republic Act No. 875, because it is not an industrial establishment. At most, it says, it is only a lessee of the services of its professors and/or instructors pursuant to a contract of services entered into between them. We find no merit in this claim. Let us clarify who is an "employer" under the Act. Section 2(c) of said Act provides:

Sec. 2. Definitions.—As used in this Act —

(c) The term employer include any person acting in the interest of an employer, directly or indirectly, but shall not include any labor organization (otherwise than when acting as an employer) or any one acting in the capacity or agent of such labor organization.

It will be noted that in defining the term "employer" the Act uses the word "includes", which it also used in defining "employee". [Sec. 2 (d)], and "representative" [Sec. 2(h)]; and not the word "means" which the Act uses in defining the terms "court" [Sec. 2(a)], "labor organization" [Sec. 2(e)], "legitimate labor organization [Sec. 2(f)], "company union" [Sec. 2(g)], "unfair labor practice" [Sec. 2(i)], "supervisor" [Sec. 2(k)], "strike" [Sec. 2(l)] and "lock-out" [Sec. 2(m)]. A methodical variation in terminology is manifest. This variation and distinction in terminology and phraseology cannot be presumed to have been the inconsequential product of an oversight; rather, it must have been the result of a deliberate and purposeful act, more so when we consider that as legislative records show, Republic Act No. 875 had been meticulously and painstakingly drafted and deliberated upon. In using the word "includes" and not "means", Congress did not intend to give a complete definition of "employer", but rather that such definition should be complementary to what is commonly understood as employer. Congress intended the term to be understood in a broad meaning because, firstly, the statutory definition includes not only "a principal employer but also a person acting in the interest of the employer"; and, secondly, the Act itself specifically enumerated those who are not included in the term "employer", namely: (1) a labor organization (otherwise than when acting as an employer), (2) anyone acting in the capacity of officer or agent of such labor organization [Sec. 2(c)], and (3) the Government and any political subdivision or instrumentality thereof insofar as the right to strike for the purpose of securing changes or modifications in the terms and conditions of employment is concerned (Section 11). Among these statutory exemptions, educational institutions are not included; hence, they can be included in the term "employer". This Court, however, has ruled that those educational institutions that are not operated for profit are not within the purview of Republic Act No. 875.5

As stated above, Republic Act No. 875 does not give a comprehensive but only a complementary definition of the term "employer". The term encompasses those that are in ordinary parlance "employers." What is commonly meant by "employer"? The term "employer" has been given several acceptations. The lexical definition is "one who employs; one who uses; one who engages or keeps in service;" and "to employ" is "to provide work and pay for; to engage one's service; to hire." (Webster's New Twentieth Century Dictionary, 2nd ed., 1960, p. 595). The Workmen's Compensation Act defines employer as including "every person or association of persons, incorporated or not, public or private, and the legal representative of the deceased employer" and "includes the owner or lessee of a factory or establishment or place of work or any other person who is virtually the owner or manager of the business carried on in the establishment or place of work but who, for reason that there is an independent contractor in the same, or for any other reason, is not the direct employer of laborers employed there." [Sec. 39(a) of Act No. 3428.] The Minimum Wage Law states that "employer includes any person acting directly or indirectly in the interest of the employer in relation to an employee and shall include the Government and the government corporations". [Rep. Act No. 602, Sec. 2(b)]. The Social Security Act defines employer as "any person, natural or juridical, domestic or foreign, who carries in the Philippines any trade, business, industry, undertaking, or activity of any kind and uses the services of another person who is under his orders as regards the employment, except the Government and any of its political subdivisions, branches or instrumentalities, including corporations owned or controlled by the Government." (Rep. Act No. 1161, Sec. 8[c]).

This Court, in the cases of the The Angat River Irrigation System, et al. vs. Angat River Workers' Union (PLUM), et al., G.R. Nos. L-10934 and L-10944, December 28, 1957, which cases involve unfair labor practices and hence within the purview of Republic Act No. 875, defined the term employer as follows:

An employer is one who employs the services of others; one for whom employees work and who pays their wages or salaries (Black Law Dictionary, 4th ed., p. 618).

An employer includes any person acting in the interest of an employer, directly or indirectly (Sec. 2-c, Rep. Act 875).

Under none of the above definitions may the University be excluded, especially so if it is considered that every professor, instructor or teacher in the teaching staff of the University, as per allegation of the University itself, has a contract with the latter for teaching services, albeit for one semester only. The University engaged the services of the professors, provided them work, and paid them compensation or salary for their services. Even if the University may be considered as a lessee of services under a contract between it and the members of its Faculty, still it is included in the term "employer". "Running through the word `employ' is the thought that there has been an agreement on the part of one person to perform a certain service in return for compensation to be paid by an employer. When you ask how a man is employed, or what is his employment, the thought that he is under agreement to perform some service or services for another is predominant and paramount." (Ballentine Law Dictionary, Philippine ed., p. 430, citing Pinkerton National Detective Agency v. Walker, 157 Ga. 548, 35 A. L. R. 557, 560, 122 S.E. Rep. 202).

To bolster its claim of exception from the application of Republic Act No. 875, the University contends that it is not state that the employers included in the definition of 2 (c) of the Act. This contention can not be sustained. In the first place, Sec. 2 (c) of Republic Act No. 875 does not state that the employers included in the definition of the term "employer" are only and exclusively "industrial establishments"; on the contrary, as stated above, the term "employer" encompasses all employers except those specifically excluded by the Act. In the second place, even the Act itself does not refer exclusively to industrial establishments and does not confine its application thereto. This is patent inasmuch as several provisions of the Act are applicable to non-industrial workers, such as Sec. 3, which deals with "employees' right to self-organization"; Sections 4 and 5 which enumerate unfair labor practices; Section 8 which nullifies private contracts contravening employee's rights; Section 9 which relates to injunctions in any case involving a labor dispute; Section 11 which prohibits strikes in the government; Section 12 which provides for the exclusive collective bargaining representation for labor organizations; Section 14 which deals with the procedure for collective bargaining; Section 17 which treats of the rights and conditions of membership in labor organizations; Sections 18, 19, 20 and 21 which provide respectively for the establishment of conciliation service, compilation of collective bargaining contracts, advisory labor-management relations; Section 22 which empowers the Secretary of Labor to make a study of labor relations; and Section 24 which enumerates the rights of labor organizations. (See Dissenting Opinion of Justice Concepcion in Boy Scouts of the Philippines v. Juliana Araos, G.R. No. L-10091, January 29, 1958.)

This Court, in the case of Boy Scouts of the Philippines v. Araos, supra, had occasion to state that the Industrial Peace Act "refers only to organizations and entities created and operated for profits, engaged in a profitable trade, occupation or industry". It cannot be denied that running a university engages time and attention; that it is an occupation or a business from which the one engaged in it may derive profit or gain. The University is not an industrial establishment in the sense that an industrial establishment is one that is engaged in manufacture or trade where raw materials are changed or fashioned into finished products for use. But for the purposes of the Industrial Peace Act the University is an industrial establishment because it is operated for profit and it employs persons who work to earn a living. The term "industry", for the purposes of the application of our labor laws should be given a broad meaning so as to cover all enterprises which are operated for profit and which engage the services of persons who work to earn a living.

The word "industry" within State Labor Relations Act controlling labor relations in industry, cover labor conditions in any field of employment where the objective is earning a livelihood on the one side and gaining of a profit on the other. Labor Law Sec. 700 et seq. State Labor Relations Board vs. McChesney, 27 N.Y.S. 2d 866, 868." (Words and Phrases, Permanent Edition, Vol. 21, 1960 edition p. 510).

The University urges that even if it were an employer, still there would be no employer-employee relationship between it and the striking members of the Faculty Club because the latter are not employees within the purview of Sec. 2(d) of Republic Act No. 875 but are independent contractors. This claim is untenable.

Section 2 (d) of Republic Act No. 875 provides:

(d) The term "employee" shall include any employee and shall not be limited to the employee of a particular employer unless the act explicitly states otherwise and shall include any individual whose work has ceased as a consequence of, or in connection with, any current labor dispute or because of any unfair labor practice and who has not obtained any other substantially equivalent and regular employment.

This definition is again, like the definition of the term "employer" [Sec. 2(c)], by the use of the term "include", complementary. It embraces not only those who are usually and ordinarily considered employees, but also those who have ceased as employees as a consequence of a labor dispute. The term "employee", furthermore, is not limited to those of a particular employer. As already stated, this Court in the cases of The Angat River Irrigation System, et al. v. Angat River Workers' Union (PLUM), et al., supra, has defined the term "employer" as "one who employs the services of others; one for whom employees work and who pays their wages or salaries. "Correlatively, an employee must be one who is engaged in the service of another; who performs services for another; who works for salary or wages. It is admitted by the University that the striking professors and/or instructors are under contract to teach particular courses and that they are paid for their services. They are, therefore, employees of the University.

In support of its claim that the members of the Faculty Club are not employees of the University, the latter cites as authority Francisco's Labor Laws, 2nd ed., p. 3, which states:

While the term "workers" as used in a particular statute, has been regarded as limited to those performing physical labor, it has been held to embrace stenographers and bookkeepers. Teachers are not included, however.

It is evident from the above-quoted authority that "teachers" are not to be included among those who perform "physical labor", but it does not mean that they are not employees. We have checked the source of the authority, which is 31 Am. Jur., Sec. 3, p. 835, and the latter cites Huntworth v. Tanner, 87 Wash 670, 152 P. 523, Ann Cas 1917 D 676. A reading of the last case confirms Our view.

That teachers are "employees' has been held in a number of cases (Aebli v. Board of Education of City and County of San Francisco, 145 P. 2d 601, 62 Col. App 2.d 706; Lowe & Campbell Sporting Goods Co. v. Tangipahoa Parish School Board, La. App., 15 So. 2d 98, 100; Sister Odelia v. Church of St. Andrew, 263 N. W. 111, 112, 195 Minn. 357, cited in Words and Phrases, Permanent ed., Vol. 14, pp. 806-807). This Court in the Far Eastern University case, supra, considered university instructors as employees and declared Republic Act No. 875 applicable to them in their employment relations with their school. The professors and/or instructors of the University neither ceased to be employees when they struck, for Section 2 of Rep. Act 875 includes among employees any individual whose work has ceased as consequence of, or in connection with a current labor dispute. Striking employees maintain their status as employees of the employer. (Western Cartridge Co. v. NLRB, C.C.A. 7, 139 F2d 855, 858).

The contention of the University that the professors and/or instructors are independent contractors, because the University does not exercise control over their work, is likewise untenable. This Court takes judicial notice that a university controls the work of the members of its faculty; that a university prescribes the courses or subjects that professors teach, and when and where to teach; that the professors' work is characterized by regularity and continuity for a fixed duration; that professors are compensated for their services by wages and salaries, rather than by profits; that the professors and/or instructors cannot substitute others to do their work without the consent of the university; and that the professors can be laid off if their work is found not satisfactory. All these indicate that the university has control over their work; and professors are, therefore, employees and not independent contractors. There are authorities in support of this view.

The principal consideration in determining whether a workman is an employee or an independent contractor is the right to control the manner of doing the work, and it is not the actual exercise of the right by interfering with the work, but the right to control, which constitutes the test. (Amalgamated Roofing Co. v. Travelers' Ins. Co., 133 N.E. 259, 261, 300 Ill. 487, quoted in Words and Phrases, Permanent ed., Vol. 14, p. 576).

Where, under Employers' Liability Act, A was instructed when and where to work . . . he is an employee, and not a contractor, though paid specified sum per square. (Heine v. Hill, Harris & Co., 2 La. App. 384, 390, in Words and Phrases, loc, cit.) .

Employees are those who are compensated for their labor or services by wages rather than by profits. (People vs. Distributors Division, Smoked Fish Workers Union Local No. 20377, Sup. 7 N. Y. S. 2d 185, 187 in Words and Phrases, loc, cit.)

Services of employee or servant, as distinguished from those of a contractor, are usually characterized by regularity and continuity of work for a fixed period or one of indefinite duration, as contrasted with employment to do a single act or a series of isolated acts; by compensation on a fixed salary rather than one regulated by value or amount of work; . . . (Underwood v. Commissioner of Internal Revenue, C.C.A., 56 F. 2d 67, 71 in Words and Phrases, op. cit., p. 579.)

Independent contractors can employ others to work and accomplish contemplated result without consent of contractee, while "employee" cannot substitute another in his place without consent of his employer. (Luker Sand & Gravel Co. v. Industrial Commission, 23 P. 2d 225, 82 Utah, 188, in Words and Phrases, Vol. 14, p. 576).

Moreover, even if university professors are considered independent contractors, still they would be covered by Rep. Act No. 875. In the case of the Boy Scouts of the Philippines v. Juliana Araos, supra, this Court observed that Republic Act No. 875 was modelled after the Wagner Act, or the National Labor Relations Act, of the United States, and this Act did not exclude "independent contractors" from the orbit of "employees". It was in the subsequent legislation — the Labor Management Relation Act (Taft-Harley Act) — that "independent contractors" together with agricultural laborers, individuals in domestic service of the home, supervisors, and others were excluded. (See Rothenberg on Labor Relations, 1949, pp. 330-331).

It having been shown that the members of the Faculty Club are employees, it follows that they have a right to unionize in accordance with the provisions of Section 3 of the Magna Carta of Labor (Republic Act No. 875) which provides as follows:

Sec. 3. Employees' right to self-organization.—Employees shall have the right to self-organization and to form, join or assist labor organizations of their own choosing for the purpose of collective bargaining through representatives of their own choosing and to engage in concerted activities for the purpose of collective bargaining and other mutual aid or protection. . . .

We agree with the statement of the lower court, in its order of March 30, 1963 which is sought to be set aside in the instant case, that the right of employees to self-organization is guaranteed by the Constitution, that said right would exist even if Republic Act No. 875 is repealed, and that regardless of whether their employers are engaged in commerce or not. Indeed, it is Our considered view that the members of the faculty or teaching staff of private universities, colleges, and schools in the Philippines, regardless of whether the university, college or school is run for profit or not, are included in the term "employees" as contemplated in Republic Act No. 875 and as such they may organize themselves pursuant to the above-quoted provision of Section 3 of said Act. Certainly, professors,

instructors or teachers of private educational institutions who teach to earn a living are entitled to the protection of our labor laws — and one such law is Republic Act No. 875.

The contention of the University in the instant case that the members of the Faculty Club can not unionize and the Faculty Club can not exist as a valid labor organization is, therefore, without merit. The record shows that the Faculty Club is a duly registered labor organization and this fact is admitted by counsel for the University.5a

The other issue raised by the University is the validity of the Presidential certification. The University contends that under Section 10 of Republic Act No. 875 the power of the President of the Philippines to certify is subject to the following conditions, namely: (1) that here is a labor dispute, and (2) that said labor dispute exists in an industry that is vital to the national interest. The University maintains that those conditions do not obtain in the instant case. This contention has also no merit.

We have previously stated that the University is an establishment or enterprise that is included in the term "industry" and is covered by the provisions of Republic Act No. 875. Now, was there a labor dispute between the University and the Faculty Club?

Republic Act No. 875 defines a labor dispute as follows:

The term "labor dispute" includes any controversy concerning terms, tenure or conditions of employment, or concerning the association or representation of persons in negotiating, fixing, maintaining, changing, or seeking to arrange terms or conditions of employment regardless of whether the disputants stand in proximate relation of employer and employees.

The test of whether a controversy comes within the definition of "labor dispute" depends on whether the controversy involves or concerns "terms, tenure or condition of employment" or "representation." It is admitted by the University, in the instant case, that on January 14, 1963 the President of the Faculty Club wrote to the President of the University a letter informing the latter of the organization of the Faculty Club as a labor union, duly registered with the Bureau of Labor Relations; that again on January 22, 1963 another letter was sent, to which was attached a list of demands consisting of 26 items, and asking the President of the University to answer within ten days from date of receipt thereof; that the University questioned the right of the Faculty Club to be the exclusive representative of the majority of the employees and asked proof that the Faculty Club had been designated or selected as exclusive representative by the vote of the majority of said employees; that on February 1, 1963 the Faculty Club filed with the Bureau of Labor Relations a notice of strike alleging as reason therefor the refusal of the University to bargain collectively with the representative of the faculty members; that on February 18, 1963 the members of the Faculty Club went on strike and established picket lines in the premises of the University, thereby disrupting the schedule of classes; that on March 1, 1963 the Faculty Club filed Case No. 3666-ULP for unfair labor practice against the University, but which was later dismissed (on April 2, 1963 after Case 41-IPA was certified to the CIR); and that on March 7, 1963 a petition for certification election, Case No. 1183-MC, was filed by the Faculty Club in the CIR.6 All these admitted facts show that the controversy between the University and the Faculty Club involved terms and conditions of employment, and the question of representation. Hence, there was a labor dispute between the University and the Faculty Club, as contemplated by Republic Act No. 875. It having been shown that the University is an institution operated for profit, that is an employer, and that there is an employer-employee relationship, between the University and the members of the Faculty Club, and it having been shown that a labor dispute existed between the University and the Faculty Club, the contention of the University, that the certification made by the President is not only not authorized by Section 10 of Republic Act 875 but is violative thereof, is groundless.

Section 10 of Republic Act No. 875 provides:

When in the opinion of the President of the Philippines there exists a labor dispute in an industry indispensable to the national interest and when such labor dispute is certified by the President to the Court of Industrial Relations, said Court may cause to be issued a restraining order forbidding the employees to strike or the employer to lockout the employees, and if no other solution to the dispute is found, the Court may issue an order fixing the terms and conditions of employment.

This Court had occasion to rule on the application of the above-quoted provision of Section 10 of Republic Act No. 875. In the case of Pampanga Sugar Development Co. v. CIR, et al., G.R. No. L-13178, March 24, 1961, it was held:

It thus appears that when in the opinion of the President a labor dispute exists in an industry indispensable to national interest and he certifies it to the Court of Industrial Relations the latter acquires jurisdiction to act thereon in the manner provided by law. Thus the court may take either of the following courses: it may issue an order forbidding the employees to strike or the employer to lockout its employees, or, failing in this, it may issue an order fixing the terms and conditions of employment. It has no other alternative. It can not throw the case out in the assumption that the certification was erroneous.

xxx xxx xxx

. . . The fact, however, is that because of the strike declared by the members of the minority union which threatens a major industry the President deemed it wise to certify the controversy to the Court of Industrial Relations for adjudication. This is the power that the law gives to the President the propriety of its exercise being a matter that only devolves upon him. The same is not the concern of the industrial court. What matters is that by virtue of the certification made by the President the case was placed under the jurisdiction of said court. (Emphasis supplied)

To certify a labor dispute to the CIR is the prerogative of the President under the law, and this Court will not interfere in, much less curtail, the exercise of that prerogative. The jurisdiction of the CIR in a certified case is exclusive (Rizal Cement Co., Inc. v. Rizal Cement Workers Union (FFW), et al., G.R. No. L-12747, July 30, 1960). Once the jurisdiction is acquired pursuant to the presidential certification, the CIR may exercise its broad powers as provided in Commonwealth Act 103. All phases of the labor dispute and the employer-employee relationship may be threshed out before the CIR, and the CIR may issue such order or orders as may be necessary to make effective the exercise of its jurisdiction. The parties involved in the case may appeal to the Supreme Court from the order or orders thus issued by the CIR.

And so, in the instant case, when the President took into consideration that the University "has some 18,000 students and employed approximately 500 faculty members", that `the continued disruption in the operation of the University will necessarily prejudice the thousand of students", and that "the dispute affects the national interest",7and certified the dispute to the CIR, it is not for the CIR nor this Court to pass upon the correctness of the reasons of the President in certifying the labor dispute to the CIR.

The third issue raised by the University refers to the question of the legality of the return-to-work order (of March 30, 1963 in Case 41-IPA) and the order implementing the same (of April 6, 1963). It alleges that the orders are illegal upon the grounds: (1) that Republic Act No. 875, supplementing Commonwealth Act No. 103, has withdrawn from the CIR the power to issue a return-to-work order; (2) that the only power granted by Section 10 of Republic Act No. 875 to the CIR is to issue an order forbidding the employees to strike or forbidding the employer to lockout the employees, as the case may be, before either contingency had become a fait accompli; (3) that the taking in by the University of replacement professors was valid, and the return-to-work order of March 30, 1963 constituted impairment of the obligation of contracts; and (4) the CIR could not issue said order without having previously determined the legality or illegality of the strike.

The contention of the University that Republic Act No. 875 has withdrawn the power of the Court of Industrial Relations to issue a return-to-work order exercised by it under Commonwealth Act No. 103 can not be sustained. When a case is certified by the President to the Court of Industrial Relations, the case thereby comes under the operation of Commonwealth Act No. 103, and the Court may exercise the broad powers and jurisdiction granted to it by said Act. Section 10 of Republic Act No. 875 empowers the Court of Industrial Relations to issue an order "fixing the terms of employment." This clause is broad enough to authorize the Court to order the strikers to return to work and the employer to readmit them. This Court, in the cases of the Philippine Marine Officers Association vs. The Court of Industrial Relations, Compania Maritima, et al.; and Compañia Martima, et al. vs. Philippine Marine Radio Officers Association and CIR, et al., G.R. Nos. L-10095 and L-10115, October 31, 1957, declared:

We cannot subscribe to the above contention. We agree with counsel for the Philippine Radio Officers' Association that upon certification by the President under Section 10 of Republic Act 875, the case comes under the operation of Commonwealth Act 103, which enforces compulsory arbitration in cases of labor disputes in industries indispensable to the national interest when the President certifies the case to the Court of Industrial Relations. The evident intention of the law is to empower the Court of Industrial Relations to act in such cases, not only in the manner prescribed under Commonwealth Act 103, but with the same broad powers and jurisdiction granted by that act. If the Court of Industrial Relations is granted authority to find a solution to an industrial dispute and such solution consists in the ordering of employees to return back to work, it cannot be contended that the Court of Industrial Relations does not have the power or jurisdiction to carry that solution into effect. And of what use is its power of conciliation and arbitration if it does not have the power and jurisdiction to carry into effect the solution it has adopted? Lastly, if the said court has the power to fix the terms and conditions of employment, it certainly can order the return of the workers with or without backpay as a term or condition of employment.

The foregoing ruling was reiterated by this Court in the case of Hind Sugar Co. v. CIR, et al., G.R. No. L-13364, July 26, 1960.

When a case is certified to the CIR by the President of the Philippines pursuant to Section 10 of Republic Act No. 875, the CIR is granted authority to find a solution to the industrial dispute; and the solution which the CIR has found under the authority of the presidential certification and conformable thereto cannot be questioned (Radio Operators Association of the Philippines vs. Philippine Marine Radio Officers Association, et al., L-10112, Nov. 29, 1957, 54 O.G. 3218).

Untenable also is the claim of the University that the CIR cannot issue a return-to-work order after strike has been declared, it being contended that under Section 10 of Republic Act No. 875 the CIR can only prevent a strike or a lockout — when either of this situation had not yet occurred. But in the case of Bisaya Land Transportation Co., Inc. vs. Court of Industrial Relations, et al., No. L-10114, Nov. 26, 1957, 50 O.G. 2518, this Court declared:

There is no reason or ground for the contention that Presidential certification of labor dispute to the CIR is limited to the prevention of strikes and lockouts. Even after a strike has been declared where the President believes that public interest demands arbitration and conciliation, the President may certify the ease for that purpose. The practice has been for the Court of Industrial Relations to order the strikers to work, pending the determination of the union demands that impelled the strike. There is nothing in the law to indicate that this practice is abolished." (Emphasis supplied)

Likewise untenable is the contention of the University that the taking in by it of replacements was valid and the return-to-work order would be an impairment of its contract with the replacements. As stated by the CIR in its order of March 30, 1963, it was agreed before the hearing of Case 41-IPA on March 23, 1963 that the strikers would return to work under the status quo arrangement and the University would readmit them, and the return-to-work order was a confirmation of that agreement. This is a declaration of fact by the CIR which we cannot disregard. The faculty members, by striking, have not abandoned their employment but, rather, they have only

ceased from their labor (Keith Theatre v. Vachon et al., 187 A. 692). The striking faculty members have not lost their right to go back to their positions, because the declaration of a strike is not a renunciation of their employment and their employee relationship with the University (Rex Taxicab Co. vs. CIR, et al., 40 O.G., No. 13, 138). The employment of replacements was not authorized by the CIR. At most, that was a temporary expedient resorted to by the University, which was subject to the power of the CIR to allow to continue or not. The employment of replacements by the University prior to the issuance of the order of March 30, 1963 did not vest in the replacements a permanent right to the positions they held. Neither could such temporary employment bind the University to retain permanently the replacements.

Striking employees maintained their status as employees of the employer (Western Castridge Co. v. National Labor Relations Board, C.C.A. 139 F. 2d 855, 858) ; that employees who took the place of strikers do not displace them as `employees." ' (National Labor Relations Board v. A. Sartorius & Co., C.C.A. 2, 140 F. 2d 203, 206, 207.)

It is clear from what has been said that the return-to-work order cannot be considered as an impairment of the contract entered into by petitioner with the replacements. Besides, labor contracts must yield to the common good and such contracts are subject to the special laws on labor unions, collective bargaining, strikes and similar subjects (Article 1700, Civil Code).

Likewise unsustainable is the contention of the University that the Court of Industrial Relations could not issue the return-to-work order without having resolved previously the issue of the legality or illegality of the strike, citing as authority therefor the case of Philippine Can Company v. Court of Industrial Relations, G.R. No. L-3021, July 13, 1950. The ruling in said case is not applicable to the case at bar, the facts and circumstances being very different. The Philippine Can Company case, unlike the instant case, did not involve the national interest and it was not certified by the President. In that case the company no longer needed the services of the strikers, nor did it need substitutes for the strikers, because the company was losing, and it was imperative that it lay off such laborers as were not necessary for its operation in order to save the company from bankruptcy. This was the reason of this Court in ruling, in that case, that the legality or illegality of the strike should have been decided first before the issuance of the return-to-work order. The University, in the case before Us, does not claim that it no longer needs the services of professors and/or instructors; neither does it claim that it was imperative for it to lay off the striking professors and instructors because of impending bankruptcy. On the contrary, it was imperative for the University to hire replacements for the strikers. Therefore, the ruling in the Philippine Can case that the legality of the strike should be decided first before the issuance of the return-to-work order does not apply to the case at bar. Besides, as We have adverted to, the return-to-work order of March 30, 1963, now in question, was a confirmation of an agreement between the University and the Faculty Club during a prehearing conference on March 23, 1963.

The University also maintains that there was no more basis for the claim of the members of the Faculty Club to return to their work, as their individual contracts for teaching had expired on March 25 or 31, 1963, as the case may be, and consequently, there was also no basis for the return-to-work order of the CIR because the contractual relationships having ceased there were no positions to which the members of the Faculty Club could return to. This contention is not well taken. This argument loses sight of the fact that when the professors and instructors struck on February 18, 1963, they continued to be employees of the University for the purposes of the labor controversy notwithstanding the subsequent termination of their teaching contracts, for Section 2(d) of the Industrial Peace Act includes among employees "any individual whose work has ceased a consequence of, or in connection with, any current labor dispute or of any unfair labor practice and who has not obtained any other substantially equivalent and regular employment."

The question raised by the University was resolved in a similar case in the United States. In the case of Rapid Roller Co. v. NLRB 126 F. 2d 452, we read:

On May 9, 1939 the striking employees, eighty-four in number, offered to the company to return to their employment. The company believing it had not committed any unfair labor practice, refused the employees' offer and claimed the right to employ others to take the place of the strikers, as it might see fit. This constituted discrimination in the hiring and tenure of the striking employees. When the employees went out on a strike because of the unfair labor practice of the company, their status as employees for the purpose of any controversy growing out of that unfair labor practice was fixed. Sec. 2 (3) of the Act. Phelps Dodge Corp. v. National Labor Relations Board, 313 U.S. 177, 61 S. Ct. 845, 85. L. ed. 1271, 133 A.L.R. 1217.

For the purpose of such controversy they remained employees of the company. The company contended that they could not be their employees in any event since the "contract of their employment expired by its own terms on April 23, 1939."

In this we think the company is mistaken for the reason we have just pointed out, that the status of the employees on strike became fixed under Sec. 2 (3) of the Act because of the unfair labor practice of the company which caused the strike.

The University, furthermore, claims that the information for indirect contempt filed against the officers of the University (Case No. V-30) as well as the order of April 29, 1963 for their arrest were improper, irregular and illegal because (1) the officers of the University had complied in good faith with the return-to-work order and in those cases that they did not, it was due to circumstance beyond their control; (2) the return-to-work order and the order implementing the same were illegal; and (3) even assuming that the order was legal, the same was not Yet final because there was a motion to reconsider it.

Again We find no merit in this claim of Petitioner. We have already ruled that the CIR had jurisdiction to issue the order of March 30, 1963 in CIR Case 41-IPA, and the return-to-work provision of that order is valid and legal. Necessarily the order of April 6, 1963 implementing that order of March 30, 1963 was also valid and legal.

Section 6 of Commonwealth Act No. 103 empowers the Court of Industrial Relations of any Judge thereof to punish direct and indirect contempts as provided in Rule 64 (now Rule 71) of the Rules of Court, under the same procedure and penalties provided therein. Section 3 of Rule 71 enumerates the acts which would constitute indirect contempt, among which is "disobedience or resistance to lawful writ, process, order, judgment, or command of a court," and the person guilty thereof can be punished after a written charge has been filed and the accused has been given an opportunity to be heard. The last paragraph of said section provides:

But nothing in this section shall be so construed as to prevent the court from issuing process to bring the accused party into court, or from holding him in custody pending such proceedings.

The provision authorizes the judge to order the arrest of an alleged contemner (Francisco, et al. v. Enriquez, L-7058, March 20, 1954, 94 Phil., 603) and this, apparently, is the provision upon which respondent Judge Bautista relied when he issued the questioned order of arrest.

The contention of petitioner that the order of arrest is illegal is unwarranted. The return-to-work order allegedly violated was within the court's jurisdiction to issue.

Section 14 of Commonwealth Act No. 103 provides that in cases brought before the Court of Industrial Relations under Section 4 of the Act (referring to strikes and lockouts) the appeal to the Supreme Court from any award, order or decision shall not stay the execution of said award, order or decision sought to be reviewed unless for special reason the court shall order that execution be stayed. Any award, order or decision that is appealed is necessarily not final. Yet under Section 14 of Commonwealth Act No. 103 that award, order or decision, even if not yet final, is executory, and the stay of execution is discretionary with the Court of Industrial Relations. In other words, the Court of Industrial Relations, in cases involving strikes and lockouts, may compel compliance or obedience of its award, order or decision even if the award, order or decision is not yet final because it is appealed, and it follows that any disobedience or non-compliance of the award, order or decision would constitute contempt against the Court of Industrial Relations which the court may punish as provided in the Rules of Court. This power of the Court of Industrial Relations to punish for contempt an act of non-compliance or disobedience of an award, order or decision, even if not yet final, is a special one and is exercised only in cases involving strikes and lockouts. And there is reason for this special power of the industrial court because in the exercise of its jurisdiction over cases involving strikes and lockouts the court has to issue orders or make decisions that are necessary to effect a prompt solution of the labor dispute that caused the strike or the lockout, or to effect the prompt creation of a situation that would be most beneficial to the management and the employees, and also to the public — even if the solution may be temporary, pending the final determination of the case. Otherwise, if the effectiveness of any order, award, or decision of the industrial court in cases involving strikes and lockouts would be suspended pending appeal then it can happen that the coercive powers of the industrial court in the settlement of the labor disputes in those cases would be rendered useless and nugatory.

The University points to Section 6 of Commonwealth Act No. 103 which provides that "Any violation of any order, award, or decision of the Court of Industrial Relations shall after such order, award or decision has become final, conclusive and executory constitute contempt of court," and contends that only the disobedience of orders that are final (meaning one that is not appealed) may be the subject of contempt proceedings. We believe that there is no inconsistency between the above-quoted provision of Section 6 and the provision of Section 14 of Commonwealth Act No. 103. It will be noted that Section 6 speaks of order, award or decision that is executory. By the provision of Section 14 an order, award or decision of the Court of Industrial Relations in cases involving strikes and lockouts are immediately executory, so that a violation of that order would constitute an indirect contempt of court.

We believe that the action of the CIR in issuing the order of arrest of April 29, 1963 is also authorized under Section 19 of Commonwealth Act No. 103 which provides as follows:

SEC. 19. Implied condition in every contract of employment.—In every contract of employment whether verbal or written, it is an implied condition that when any dispute between the employer and the employee or laborer has been submitted to the Court of Industrial Relations for settlement or arbitration pursuant to the provisions of this Act . . . and pending award, or decision by the Court of such dispute . . . the employee or laborer shall not strike or walk out of his employment when so enjoined by the Court after hearing and when public interest so requires, and if he has already done so, that he shall forthwith return to it, upon order of the Court, which shall be issued only after hearing when public interest so requires or when the dispute cannot, in its opinion, be promptly decided or settled; and if the employees or laborers fail to return to work, the Court may authorize the employer to accept other employees or laborers. A condition shall further be implied that while such dispute . . . is pending, the employer shall refrain from accepting other employees or laborers, unless with the express authority of the Court, and shall permit the continuation in the service of his employees or laborers under the last terms and conditions existing before the dispute arose. . . . A violation by the employer or by the employee or laborer of such an order or the implied contractual condition set forth in this section shall constitute contempt of the Court of Industrial Relations and shall be punished by the Court itself in the same manner with the same penalties as in the case of contempt of a Court of First Instance. . . .

We hold that the CIR acted within its jurisdiction when it ordered the arrest of the officers of the University upon a complaint for indirect contempt filed by the Acting Special Prosecutor of the CIR in CIR Case V-30, and that order was valid. Besides those ordered arrested were not yet being punished for contempt; but, having been charged, they were simply ordered arrested to be brought before the Judge to be dealt with according to law. Whether they are guilty of the charge or not is yet to be determined in a proper hearing.

Let it be noted that the order of arrest dated April 29, 1963 in CIR Case V-30 is being questioned in Case G.R. No. L-21278 before this Court in a special civil action for certiorari. The University did not appeal from that order. In other words, the only question to be resolved in connection with that order in CIR Case V-30 is whether the CIR had jurisdiction, or had abused its discretion, in issuing that order. We hold that the CIR had jurisdiction to issue that order, and neither did it abuse its discretion when it issued that order.

In Case G.R. No. L-21462 the University appealed from the order of Judge Villanueva of the CIR in Case No. 1183-MC, dated April 6, 1963, granting the motion of the Faculty Club to withdraw its petition for certification election, and from the resolution of the CIR en banc, dated June 5, 1963, denying the motion to reconsider said order of April 6, 1963. The ground of the Faculty Club in asking for the withdrawal of that petition for certification election was because the issues involved in that petition were absorbed by the issues in Case 41-IPA. The University opposed the petition for withdrawal, but at the same time it moved for the dismissal of the petition for certification election.

It is contended by the University before this Court, in G.R. L-21462, that the issues of employer-employee relationship between the University and the Faculty Club, the alleged status of the Faculty Club as a labor union, its majority representation and designation as bargaining representative in an appropriate unit of the Faculty Club should have been resolved first in Case No. 1183-MC prior to the determination of the issues in Case No. 41-IPA, and, therefore, the motion to withdraw the petition for certification election should not have been granted upon the ground that the issues in the first case were absorbed in the second case.

We believe that these contentions of the University in Case G.R. No. L-21462 have been sufficiently covered by the discussion in this decision of the main issues raised in the principal case, which is Case G.R. No. L-21278. After all, the University wanted CIR Case 1183-MC dismissed, and the withdrawal of the petition for certification election had in a way produced the situation desired by the University. After considering the arguments adduced by the University in support of its petition for certiorari by way of appeal in Case G.R. No. L-21278, We hold that the CIR did not commit any error when it granted the withdrawal of the petition for certification election in Case No. 1183-MC. The principal case before the CIR is Case No. 41-IPA and all the questions relating to the labor disputes between the University and the Faculty Club may be threshed out, and decided, in that case.

In Case G.R. No. L-21500 the University appealed from the order of the CIR of March 30, 1963, issued by Judge Bautista, and from the resolution of the CIR en banc promulgated on June 28, 1963, denying the motion for the reconsideration of that order of March 30, 1963, in CIR Case No. 41-IPA. We have already ruled that the CIR has jurisdiction to issue that order of March 30, 1963, and that order is valid, and We, therefore, hold that the CIR did not err in issuing that order of March 30, 1963 and in issuing the resolution promulgated on June 28, 1963 (although dated May 7, 1963) denying the motion to reconsider that order of March 30, 1963.

IN VIEW OF THE FOREGOING, the petition for certiorari and prohibition with preliminary injunction in Case G.R. No. L-21278 is dismissed and the writs prayed for therein are denied. The writ of preliminary injunction issued in Case G.R. No. L-21278 is dissolved. The orders and resolutions appealed from, in Cases Nos. L-21462 and L-21500, are affirmed, with costs in these three cases against the petitioner-appellant Feati University. It is so ordered.

G.R. No. 146267 February 17, 2003 QUISUMBING, J.:

NYK INTERNATIONAL KNITWEAR CORPORATION PHILIPPINES and/or CATHY NG, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and VIRGINIA M. PUBLICO, respondents.

In this petition for review, petitioners NYK International Knitwear Corporation Philippines (henceforth NYK, for brevity) and its manager, Cathy Ng, assail the resolution1 dated September 15, 2000 of the Court of Appeals in CA-G.R. SP No. 60542, which dismissed their petition for certiorari for non-compliance with Section 1, Rule 65 of the 1997 Rules of Civil Procedure. Also assailed is the appellate court’s resolution2 of December 5, 2000, which denied the motion for reconsideration.

The facts, as gleaned from the findings of the Labor Arbiter as affirmed by the National Labor Relations Commission (NLRC), show that:

On February 8, 1995, herein petitioner NYK hired respondent Virginia Publico as a sewer. Under the terms and conditions of her employment, Publico was paid on a piece-rate basis, but required to work from 8:00 A.M. to 12:00 midnight. On the average, she earned P185.00 daily.

At about 10:00 P.M. of May 7, 1997, Publico requested that she be allowed to leave the work place early, as she was not feeling well due to a bout of influenza. Permission was refused but nonetheless, Publico went home.

The following day, Publico called up her employer and notified management that she was still recovering from her ailment.

On May 9, 1997, Publico reported for work. To her mortification and surprise, however, the security guard prevented her from entering the NYK premises, allegedly on management’s order. She begged to be allowed inside, but the guard remained adamant. It was only when Publico declared that she would just complete the unfinished work she had left on May 7 that the guard let her in.

Once inside the factory, Publico requested to see the owner, one Stephen Ng. Her request was declined. She was instead asked to come back the following day.

On May 10, 1997, Publico returned to NYK as instructed. After waiting for three and half (3½) hours, she was finally able to see Stephen Ng. When she inquired why she was barred from reporting for work, Mr. Ng told her she was dismissed due to her refusal to render overtime service.

Aggrieved, private respondent filed a complaint for illegal dismissal against petitioner corporation and its manager, petitioner Cathy Ng, docketed as NLRC NCR Case No. 00-06-03925-97.

Before the Labor Arbiter, petitioners predictably had a different version of the story. Allegedly, they took the pains to verify why Publico did not report for work on May 7, 1997 and found out that her husband did not allow her to work at night. As night work is a must in their line of business, particularly when there are rush orders, petitioners claimed that given Publico’s failure to render overtime work, they were left with no other recourse but to fire her.

On March 19, 1998, the Labor Arbiter held Publico’s dismissal to be illegal, disposing as follows:

WHEREFORE, the respondents are hereby ordered to reinstate the complainant to her former position with full backwages from the date her salary was withheld until she is actually reinstated, which amounted to P50,168.30 x x x. The respondents are, likewise, assessed the sum of P5,016.83 representing 10% of the amount awarded as attorney’s fees. The rest of the claims are dismissed for lack of merit.

SO ORDERED.3

On appeal, the NLRC, in a resolution4 dated May 17, 2000, affirmed the decision of the Labor Arbiter in toto.

In due time, petitioners impugned the NLRC decision by way of a special civil action of certiorari filed before the Court of Appeals, docketed as CA-G.R. SP No. 60542. Petitioners ascribed grave abuse of discretion amounting to lack or excess of jurisdiction to public respondent NLRC for affirming the ruling of the Labor Arbiter.

In its resolution of September 15, 2000, the appellate court dismissed the petition outright. The Court of Appeals pointed out that there was non-compliance with Section 1 of Rule 65 of the 1997 Rules of Civil Procedure as the petition was merely accompanied by a certified xerox copy of the assailed NLRC decision, instead of a certified true copy thereof as required by the Rules of Court.5 Furthermore, petitioners failed to attach the other pleadings and documents pertinent and material to their petition, such as the parties’ position papers, their evidence and the motion for reconsideration in contravention of the said rule.6

Petitioners duly moved for reconsideration, explaining that they had requested for a certified true copy of the NLRC’s decision but since the original NLRC decision was printed on onionskin was not legible, the NLRC itself photocopied the resolution and certified it afterwards. As proof of payment of petitioners’ request for a certified true copy of the NLRC decision, petitioners attached a copy of the official receipts issued by the NLRC, which described the nature of the entry as "CERT. TRUE COPY."7 Petitioners, likewise, appended in their motion copies of pertinent pleadings and documents not previously attached in their petition.

On December 5, 2000, the appellate court denied petitioners’ motion for reconsideration.8

Hence this petition for review.

Before us, petitioners submit the following issues for our resolution:

I

whether or not the court of appeals should have given due course to the petition for certiorari.

II

whether or not there exists evidence on record to warrant the ruling that complainant was illegally dismissed, and corollary thereto, whether or not there is legal justification to award backwages and order reinstatement.

III

whether or not there was grave abuse of discretion on the part of the public respondent nlrc so as to justify a reversal of its resolutionS dated may 17, 2000 and june 30, 2000.9

Only two issues need resolution, one having to do with adjective law and the other with substantial law, namely:

(1) Did the Court of Appeals commit a reversible error in dismissing CA-G.R. SP No. 60542 on purely technical grounds, i.e., that the attached copy of the NLRC decision is a mere photocopy of the original decision; and

(2) Did the Court of Appeals err in refusing to rule on the correctness of the NLRC’s findings that private respondent was illegally dismissed?

On the first issue, petitioners contend that they have substantially complied with the requirements of Section 1, Rule 65, hence, in the interests of justice and equity, the Court of Appeals should have given due course to their special civil action for certiorari.

Private respondent, on the other hand, maintains that petitioners’ wanton disregard of the Rule warrant the outright dismissal of their petition. She adds that the present petition raises factual issues that the Court cannot pass upon at the first instance.

Section 1 of Rule 65,10 1997 Rules of Civil Procedure, requires that the petition shall be accompanied by a certified true copy of the judgment or order subject thereof, together with copies of all pleadings and documents relevant and pertinent thereto. The precursor of the Revised Rules of Civil Procedure, Administrative Circular No. 3-96, which took effect on June 1, 1996, instructs us what a "certified true copy" is:

1. … The "certified true copy" thereof shall be such other copy furnished to a party at his instance or in his behalf, duly authenticated by the authorized officers or representatives of the issuing entity as hereinbefore specified.

x x x

3. The certified true copy must further comply with all the regulations therefor of the issuing entity and it is the authenticated original of such certified true copy, and not a mere xerox copy thereof, which shall be utilized as an annex to the petition or other initiatory pleading.(Emphasis supplied.)

x x x

Applying the preceding guidepost in the present case, the disputed document although stamped as "certified true copy" is not an authenticated original of such certified true copy, but only a xerox copy thereof, in contravention of paragraph 3 of the above-quoted guidelines. Hence, no error may be ascribed to the Court of Appeals in dismissing the petition for certiorari outright pursuant to paragraph 5 of Administrative Circular No. 3-96, which provides:

5. It shall be the duty and responsibility of the party using the documents required by Paragraph (3) of Circular No. 1-88 to verify and ensure compliance with all the requirements therefor as detailed in the preceding paragraphs.Failure to do so shall result in the rejection of such annexes and the dismissal of the case. Subsequent compliance shall not warrant any reconsideration unless the court is fully satisfied that the non-compliance was not in any way attributable to the party, despite due diligence on his part, and that there are highly justifiable and compelling reasons for the court to make such other disposition as it may deem just and equitable. (Emphasis supplied.)

The members of this Court are not unmindful that in exceptional cases and for compelling reasons, we have disregarded similar procedural defects in order to correct a patent injustice made. However, petitioners here have not shown any compelling reason for us to relax the rule. Petitioners are hereby reminded that the right to file a special civil action of certiorari is neither a natural right nor a part of due process. A writ of certiorari is a prerogative writ, never demandable as a matter of right, never issued except in the exercise of judicial discretion.11 Hence, he who seeks a writ of certiorari must apply for it only in the manner and strictly in accordance with the provisions of the law and the Rules.

To avoid further delay in resolving the present controversy, we now come to the second issue. Petitioners contend that private respondent’s refusal to render night work is tantamount to abandonment of duties which constitutes a just ground for termination of service. They aver that the Labor Arbiter gravely erred in awarding backwages to private respondent, as there was no illegal dismissal. Petitioners allege that management did not terminate her services, but in fact asked her to return to work during the preliminary conferences. Hence, it would be the height of injustice to award backwages for work, which was never rendered through private respondent’s own choice. Petitioners add that they cannot be held solidarily liable in this case as there was neither malice nor bad faith.

Petitioners’ arguments fail to persuade us. Petitioners raise factual questions which are improper in a petition for review on certiorari. Findings of facts of the NLRC, particularly in a case where the NLRC and the Labor Arbiter are in agreement, are deemed binding and conclusive upon this Court.12

Hence, petitioners’ bare allegations of abandonment cannot stand the unswerving conclusion by both quasi-judicial agencies below that private respondent was unlawfully dismissed. We find no reason to deviate from the consistent findings of the Labor Arbiter and the NLRC that there was no basis to find that Virginia abandoned her work. Indeed, factual findings of the NLRC affirming those of the Labor Arbiter, both bodies being deemed to have acquired expertise in matters within their jurisdictions, when sufficiently supported by evidence on record, are accorded respect if not finality, and are considered binding on this Court.13 As long as their decisions are devoid of any unfairness or arbitrariness in the process of their deduction from the evidence proffered by the parties, all that is left is for the Court to stamp its affirmation and declare its finality. No reversible error may thus be laid at the door of the Court of Appeals when it refused to rule that the NLRC committed a grave abuse of discretion amounting to want or excess of jurisdiction in holding that private respondent was illegally dismissed.

Anent petitioners’ assertion that they cannot be solidarily liable in this case as there was no malice or bad faith on their part has no leg to stand on. What the Court finds apropos is our disquisition in A.C. Ransom Labor Union-CCLU v. NLRC,14 which held that since a corporation is an artificial person, it must have an officer who can be presumed to be the employer, being the "person acting in the interest of the employer." In other words the corporation, in the technical sense only, is the employer. In a subsequent case, we ordered the corporate officers of the employer corporation to pay jointly and solidarily the private respondents’ monetary award.15 More recently, a corporation and its president were directed by this Court to jointly and severally reinstate the illegally dismissed employees to their former positions and to pay the monetary awards.16

In this case Cathy Ng, admittedly, is the manager of NYK. Conformably with our ruling in A. C. Ransom, she falls within the meaning of an "employer" as contemplated by the Labor Code,17 who may be held jointly and severally liable for the obligations of the corporation to its dismissed employees. Pursuant to prevailing jurisprudence, Cathy Ng, in her capacity as manager and responsible officer of NYK, cannot be exonerated from her joint and several liability in the payment of monetary award to private respondent.

WHEREFORE, the instant petition is DENIED. The assailed resolutions of the Court of Appeals dated September 15, 2000 and December 5, 2000, are hereby AFFIRMED. Costs against petitioners. SO ORDERED.

G.R. Nos. L-22951 and L-22952 January 31, 1967 BENGZON, J.P., J.:

ALLIED FREE WORKERS' UNION (PLUM), petitioner, vs.COMPAÑIA MARITIMA, Manager JOSE C. TEVES, and COURT OF INDUSTRIAL RELATIONS, respondents.

-----------------------------

G.R. No. L-22971 January 31, 1967

COMPAÑIA MARITIMA and Manager JOSE C. TEVES, petitioners, vs. ALLIED FREEWORKERS' (PLUM) and COURT OF INDUSTRIAL RELATIONS, respondents.

L-22951 and 22952:Vicente A. Rafael and Associates for petitioner.Rafael Dinglasan for respondents.Mariano B. Tuason for respondent Court of Industrial Relations.

L-22971:Rafael Dinglasan for petitioner.Vicente A. Rafael and Associates for respondents.Mariano B. Tuason for respondent Court of Industrial Relations.

The three cases before this Court are the respective appeals separately taken by the parties hereto from an order1 of the Court of Industrial Relations en banc affirming its trial judge's decision, rendered on November 4, 1963, in CIR Case 175-MC and CIR Case 426-ULP. Thus L-22971 is the appeal of MARITIMA2 in CIR Case 175-MC; L-22952 is AFWU's appeal in the same case; and L-22951 refers to AFWU's3 appeal in CIR Case 426-ULP. Since these cases were jointly tried and decided in the court a quo and they involve the same fundamental issue — the presence or absence of employer-employee relationship — they are jointly considered herein.

MARITIMA is a local corporation engaged in the shipping business. Teves is its branch manager in the port of Iligan City. And AFWU is duly registered legitimate labor organization with 225 members.

On August 11, 1952, MARITIMA, through Teves, entered into a CONTRACT 4 with AFWU the terms of which We reproduce:

— ARRASTRE AND STEVEDORING CONTRACT —

KNOW ALL MEN BY THESE PRESENTS:

This CONTRACT made and executed this 11th day of August, 1952, in the City of Iligan, Philippines, by and between the COMPAÑIA MARITIMA Iligan Branch, represented by its Branch Manager in Iligan City, and the ALLIED FREE WORKERS' UNION, a duly authorized labor union, represented by its President:

WITNESSETH.

1. That the Compañia MARITIMA hereby engage the services of the Allied Free Workers' Union to do and perform all the work of stevedoring and arrastre services of all its vessels or boats calling in the port of Iligan City, beginning August 12, 1952.

2. That the Compañia MARITIMA shall not be liable for the payment of the services rendered by the Allied Free Workers' Union, for the loading, unloading and deliveries of cargoes as same is payable by the owners and consignees of cargoes, as it has been the practice in the port of Iligan City.

3. That the Allied Free Workers' Union shall be responsible for the damages that may be caused to the cargoes in the course of their handling.

4. That this CONTRACT is good and valid for a period of one (1) month from August 12, 1952, but same may be renewed by agreement of the parties; however Compañia MARITIMAreserves the right to revoke this CONTRACT even before the expiration of the term, if and when the Allied Free Workers' Unionfails to render good service.

IN WITNESS WHEREOF, we hereunto sign this presents in the City of Iligan, Philippines, this 11th day of August, 1952.

(SGD) SALVADOR T. LLUCH President

Allied Free Workers' Union Iligan City

(SGD) JOSE C. TEVES Branch Manager

Compañia Maritima Iligan City

SIGNED IN THE PRESENCE OF:

1. (SGD) JOSE CUETO

2. (SGD) SERGIO OBACH.

During the first month of the existence of the CONTRACT , AFWU rendered satisfactory service. So, MARITIMA, through Teves, verbally renewed the same. This harmonious relations between MARITIMA and AFWU lasted up to the latter part of 1953 when the former complained to the latter of unsatisfactory and inefficient service by the laborers doing the arrastre and stevedoring work. This deteriorating situation was admitted as a fact by AFWU'spresident. To remedy the situation since MARITIMA's business was being adversely affected — Teves was forced to hire extra laborers from among "stand-by" workers not affiliated to any union to help in the stevedoring and arrastre work. The wages of these extra laborers were paid by MARITIMA through separate vouchers and not byAFWU. Moreover, said wages were not charged to the consignees or owners of the cargoes.

On July 23, 1954, AFWU presented to MARITIMA a written proposal5 for a collective bargaining agreement.

This demand embodied certain terms and conditions of employment different from the provisions of theCONTRACT . No reply was made by MARITIMA.

On August 6, 1954, AFWU instituted proceedings in the Industrial Court6 praying that it be certified as the sole and exclusive bargaining agent in the bargaining unit composed of all the laborers doing the arrastre and stevedoring work in connection with MARITIMA's vessels in Iligan City. MARITIMA answered, alleging lack of employer-employee relationship between the parties.

On August 24, 1954, MARITIMA informed AFWU of the termination of the CONTRACT because of the inefficient service rendered by the latter which had adversely affected its business. The termination was to take effect as of September 1, 1954. MARITIMA then contracted with the Iligan Stevedoring Union for the arrastre and stevedoring work. The latter agreed to perform the work subject to the same terms and conditions of the CONTRACT . The new agreement was to be carried out on September 1, 1954.

On August 26, 1954, upon the instance of AFWU, MARITIMA found itself charged before the Industrial Court7 of unfair labor practices under Sec. 4(a), (1), (3), (4) and (6) of Rep. Act No. 875. MARITIMA answered, again denying the employer-employee relationship between the parties.

On September 1, 1954, members of AFWU, together with those of the Mindanao Workers Alliance — a sister union — formed a picket line at the wharf of Iligan City, thus preventing the Iligan Stevedoring Union from carrying out the arrastre and stevedoring work it contracted for.8 This picket lasted for nine days.

On September 9, 1954, MARITIMA filed an action9 to rescind the CONTRACT , enjoin AFWU members from doing arrastre and stevedoring work in connection with its, vessels, and for recovery of damages against AFWUand its officers. Incidentally, this civil case has been the subject of three proceedings already which have reached this Court. The first 10 involved a preliminary injunction issued therein on September 9, 1954, by the trial court prohibiting AFWU from interfering in any manner with the loading and unloading of cargoes from MARITIMA'svessels. This injunction was lifted that very evening upon the filing of a counter bond by AFWU. Subsequently, a motion to dissolve said counterbond was filed by MARITIMA but the hearing on this incident was enjoined by Us on March 15, 1955, upon the institution of the petition for prohibition and injunction in said L-8876. 11 Meanwhile,AFWU members-laborers were able to continue the arrastre and stevedoring work in connection with MARITIMA'svessels.

On December 5, 1960, the CFI decision in the civil case was promulgated. It ordered the rescission of theCONTRACT and permanently enjoined AFWU members from performing work in connection with MARITIMA'svessels. AFWU then filed its notice of appeal, appeal bond and record on appeal. 12 The subsequent incidents thereto gave rise to the two other proceedings which have previously reached Us here.

On January 6, 1961, upon motion of MARITIMA ,an order of execution pending appeal and a writ of injunction against AFWU was issued by the trial court in the civil case. This enabled MARITIMA to engage the services of the Mindanao Arrastre Service to do the arrastre and stevedoring work on January 8, 1961. However, AFWU filed a petition for certiorari, injunction and prohibition 13 here and on January 18, 1961, was able to secure a writ of preliminary injunction ordering the maintenance of the status quo prior to January 6, 1961. Thus, after January 18, 1961, AFWU laborers were again back doing the same work as before.

The third incident that reached US 14 involved an order of the same trial court in the same civil case, dated January 11, 1961, which amended some clerical errors in the original decision of December 5, 1960. Upon motion of MARITIMA, the trial court, on March 24, 1962, issued an order for the execution of the decision of January 11, 1961, since AFWU did not appeal therefrom, and on March 31, 1962, a writ of execution ousting the 225 AFWUmembers-laborers from their work in connection with the loading and unloading of cargoes was issued and a levy on execution upon the properties of AFWU was effected. Accordingly, on April 1, 1962, MARITIMA was again able to engage the services of the Mindanao Arrastre Service.

On April 16, 1962, upon the institution of the petition for certiorari, injunction, prohibition and mandamus, a preliminary injunction was issued by Us against the orders of March 24 and 31, 1962. But then, on May 16, 1962, upon motion of MARITIMA this preliminary injunction was lifted by Us insofar as it related to the execution of the order ousting the AFWU laborers from the stevedoring and arrastre work in connection with the MARITIMAvessels. 15 Such then was the status of things.

On November 4, 1963, after almost 10 years of hearing the two cases jointly, the Industrial Court finally rendered its decision. The dispositive part provided:

IN VIEW OF ALL THE FOREGOING CIRCUMSTANCES, the complaint of the union for unfair labor practices against the Compañia MARITIMA and/or its agent Jose C. Teves and the Iligan Stevedoring Union and/or Sergio Obach is hereby dismissed for lack of substantial evidence and merit.

In pursuance of the provisions of Section 12 of Republic Act 875 and the Rules of this court on certification election, the Honorable, the Secretary of Labor or any of his authorized representative is hereby requested to conduct certification election among all the workers and/or stevedores working in the wharf of Iligan City who are performing stevedoring and arrastre service aboard Compañia MARITIMA vessels docking at Iligan City port in order to determine their representative for collective bargaining with the employer, whether their desire to be represented by the petitioner Allied Free Workers Union or neither [sic]; and upon termination of the said election, the result thereof shall forthwith be submitted to this court for further consideration. The union present payroll may be utilized in determining the qualified voters, with the exclusion of all supervisors.

SO ORDERED.

As already indicated, the fundamental issue involved in these cases before Us consists in whether there is an employer-employee relationship between MARITIMA, on the one hand, and AFWU and/or its members-laborers who do the actual stevedoring and arrastre work on the other hand.

THE UNFAIR LABOR PRACTICE CASE (L-22951 * [CIR Case 426-ULP])

Petitioner AFWU's proposition is that the court a quo erred (1) in concluding that MARITIMA had not refused to bargain collectively with it, as the majority union; (2) in not finding that MARITIMA had committed acts of discrimination, interferences and coercions upon its members-laborers, and (3) in concluding that the CONTRACTmay not be interferred with even if contrary to law or public policy.

It is true that MARITIMA admits that it did not answer AFWU's proposal for a collective bargaining agreement. From this it does not necessarily follow that it is guilty of unfair labor practice. Under the law 16 the duty to bargain collectively arises only between the "employer" and its "employees". Where neither party is an "employer" nor an "employee" of the other, no such duty would exist. Needless to add, where there is no duty to bargain collectively the refusal to bargain violates no right. So, the question is: Under the CONTRACT , was MARITIMA the "employer" and AFWU and/or its members the "employees" with respect to one another?

The court a quo held that under the CONTRACT , AFWU was an independent contractor of MARITIMA. This conclusion was based on the following findings of fact, which We can no longer disturb, stated in the CIR decision:

7. ... The petitioner union operated as a labor contractor under the so-called "cabo" system; and as such it has a complete set of officers and office personnel (Exhs. "F" and "F-1") and its organizational structure includes the following: General President, with the following under him — one vice-president, legal counsel, general treasurer, general manager and the board of directors. Under the general manager is the secretary, the auditor, and the office staff composing of the general foreman, general checker, general timekeeper, and the respective subordinates like assistant foreman, capataz, assistant general checker, field checker, office timekeeper, and field timekeeper all appointed by the general manager of the union and are paid in accordance with the union payroll exclusively prepared by the union in the office. (See t.s.n. pp. 32-36, June 9, 1960; pp. 78-80, February 16, 1961; pp. 26-28, August 9, 1960). The payrolls where laborers are listed and paid were prepared by the union itself without the intervention or control of the respondent company and/or its agent at Iligan City. The respondent never had any knowledge of the individual names of laborers and/or workers listed in the union payroll or in their roster of membership.

8. The union engaged the services of their members in undertaking the work of arrastre and stevedoringeither to haul shippers' goods from their warehouses in Iligan City to the MARITIMA boat or from the boat to the different consignees. The charges for such service were known by the union and collected by them through their bill collector. This is shown by the preparation of the union forms known as "conduci" or delivery receipts. These "conduci" or receipts contain informations as to the number and/or volume of cargoes handled by the union, the invoice number, the name of the vessel and the number of bills of lading covering the cargoes to be delivered. Those delivery receipts are different and separate from the bills of lading and delivery receipts issued by the company to the consignees or shippers. Cargoes carried from the warehouses to the boat or from the boat to the consignees were always accompanied by the union checker who hand-carry the "conduci". Once goods are delivered to their destination the union through its bill collectors prepare the bills of collection and the charges thereon are collected by the union bill collectors who are employees of the union and not of the respondent. The respondent had no intervention whatsoever in the collection of those charges as the same are clearly indicated and described in the labor CONTRACT , Exhibit "A". There were, however, instances when the respondents were requested to help the union in the collection of charges for services rendered by members of the union when fertilizers and gasoline drums were loaded aboard the Compañia MARITIMA boats. This was necessary in order to facilitate the collection of freight and handling charges from the government for auditing purposes. When cargoes are to be loaded, the shipper usually notifies the petitioner union when to load their cargoes aboard CompañiaMARITIMA boats calling in the port of Iligan City; and when a boat docks in said port, the union undertakes to haul the said shipper's goods to the boat. In doing this work, the union employs their own trucks or other vehicles or conveyance from shipper's warehouse to the boat or vice-versa. The respondent has no truck of any kind for the service of hauling cargoes because such service is included in the CONTRACT executed between the parties. (See Exh. "A").

9. The union members who were hired by the union to perform arrastre and stevedoring work on respondents' vessels at Iligan port were being supervised and controlled by the general foreman of the petitioner union or by any union assistant or capataz responsible for the execution of the labor CONTRACTwhen performing arrastre and/or stevedoring work aboard vessels of the Compañia MARITIMA docking at Iligan City. The foreman assigned their laborers to perform the required work aboard vessels of the respondent. For instance, when a boat arrives, the general foreman requests the cargo report from the chief mate of the vessel in order to determine where the cargoes are located in the hold of the boat and to know the destination of these cargoes. All the laborers and/or workers hired for said work are union members and are only responsible to their immediate chief who are officers and/or employees of the union. The respondent firm have their own separate representatives like checkers who extend aid to the union officers and members in checking the different cargoes unloaded or loaded aboard vessels of the Compañia MARITIMA. There were no instances where offices and employees of the respondent Compañia MARITIMA and/or its agent had interferred in the giving of instructions to the laborers performing the arrastre and/or stevedoring work either aboard vessels or at the wharf of Iligan City. As contractor, the union does not receive instructions as to what to do, how to do, and works without specific instructions. They have no fixed hours of work required by the MARITIMA.

10. While cargoes were in transit either from the warehouse to the boat or from the boat to the different consignees, any losses or damages caused with the said cargoes were charged to the account of the union; and the union likewise imposed the penalty or fine to any employee who caused or committed the damages to cargoes in transit. Other disciplinary measures imposed on laborers performing the said work were exercised by the general foreman of the union who has blanket authority from the union general manager to exercise disciplinary control over their members who were assigned to perform the work in a group of laborers assigned by the union to perform loading or unloading cargoes when a Compañia MARITIMA boat docked at Iligan City. The respondents have not at any time interferred in the imposition of disciplinary action upon the laborers who are members of the union. In one instance, under this situation, the president of the union himself dismissed one inefficient laborer found to have been performing inefficient service at the time (t.s.n. pp. 17-18, February 15, 1961).

x x x x x x x x x

13. Erring laborers and/or workers who are affiliates of the union were directly responsible to the union and never to the respondent. Respondent cannot, therefore, discipline and/or dismiss these erring workers of the union. (Emphasis supplied)

And in absolving MARITIMA of the unfair labor charge on this point, the court a quo concluded:

From the foregoing circumstances and findings, the Court is of the opinion that no substantial evidence has been presented to sustain the charge of unfair labor practice acts as alleged to have been committed by herein respondent. The Court finds no interference in the union activities, if any, of the members of the Allied Free Workers Union as these persons engaged in the stevedoring and arrastre service were employed by the Allied Free Workers Union as independent contractor subject to the terms and conditions of their then existing labor CONTRACT Exhibit "A". To construe the CONTRACT otherwise would tend to disregard the rights and privileges of the parties intended by them in their CONTRACT . (Exhibit "A"). This Court believes that it may not interfere in the implementation of the said labor CONTRACT in the absence of abuse by one party to the prejudice of the other. ...

Further, the Court finds that the petitioner, aside from its labor CONTRACT (See Exhibit "A") with the respondent Compañia MARITIMA also has other labor contracts with other shipping firms on the stevedoring and arrastre work; and that this CONTRACT obligated the petitioner as an independent labor contractor to undertake the arrastre and stevedoring service on Compañia MARITIMA boats docking at Iligan City Port. The petitioner is an independent contractor as defined in the CONTRACT Exhibit "A" and in the evidence submitted by the parties. "An independent contractor is one who, in rendering services, exercises an independent employment or occupation and represents the will of his employer only as to the results of his work and not as to the means whereby it is accomplished; one who exercising an independent employment, contracts to do a piece of work according to his own methods, without being subject to the control of his employer except as to the result of his work; and who engaged to perform a certain service for another, according to his own manner and methods, free from the control and direction of his employer in all matters connected with the performance of the service except as to the result of the work." (see 56 C.J.S. pp. 41-43; Cruz, et al. vs. Manila Hotel et al., G.R. No. L-9110, April 30, 1957). These factors were present in the relation of the parties as described in their CONTRACT Exhibit "A".

x x x x x x x x x

In Viaña vs. Al Lagadan et al., G.R. No. L-8967, May 31, 1956, the Supreme Court states the rule as follows.

'In determining the existence of employer-employee relationship, the following elements are generally considered, namely: (1) the selection and engagement of the employees; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the employee's conduct — although the latter is the most important element (35 Am. Jur. 445). Assuming that the share received by the deceased could partake of the nature of wages — on which we need not and do not express our view — and that the second element, therefore, exists in the case at bar, the record does not contain any specific data regarding the third and fourth elements.'

The clear implication of the decision of the Supreme Court is that if the defendant has no power of control — which, according to the Supreme Court, is the "most important element" — there is no employer-employee relationship. (Emphasis supplied)

The conclusion thus reached by the court a quo is in full accord with the facts and the applicable jurisprudence. We totally agree with the court a quo that AFWU was an independent contractor. And an independent contractor is not an "employee".17

Neither is there any direct employment relationship between MARITIMA and the laborers. The latter have no separate individual contracts with MARITIMA. In fact, the court a quo found that it was AFWU that hired them. Their only possible connection with MARITIMA is through AFWU which contracted with the latter. Hence, they could not possibly be in a better class than AFWU which dealt with MARITIMA.18

In this connection, it is interesting to note that the facts as found by the court a quo strongly indicate that it isAFWU itself who is the "employer" of those laborers. The facts very succinctly show that it was AFWU, through its officers, which (1) selected and hired the laborers, (2) paid their wages, (3) exercised control and supervision over them, and (4) had the power to discipline and dismiss them. These are the very elements constituting an employer-employee relationship.19

Of course there is no legal impediment for a union to be an "employer". 20 Under the particular facts of this case, however, AFWU appears to be more of a distinct and completely autonomous business group or association. Its organizational structure and operational system is no different from other commercial entities on the same line. It even has its own bill collectors and trucking facilities. And that it really is engaged in business is shown by the fact that it had arrastre and stevedoring contracts with other shipping firms in Iligan City.

Now, in its all-out endeavor to make an "employer" out of MARITIMA, AFWU citing an impressive array of jurisprudence, even goes to the extent of insisting that it be considered a mere "agent" of MARITIMA. Suffice it to say on this point that an agent can not represent

two conflicting interests that are diametrically opposed. And that the cases sought to be relied upon did not involve representatives of opposing interests.

Anent the second point raised: AFWU claims that the court a quo found that acts of interferences and discriminations were committed by MARITIMA against the former's members simply for their union affiliation. 21However, nowhere in the 32-page decision of the court a quo can any such finding be found. On the contrary, said court made the following finding:

18. There is no showing that this new union, the Iligan Stevedoring Union, was organized with the help of the branch manager Jose C. Teves. The organizer of the union like Messrs. Sergio Obach, Labayos and Atty. Obach and their colleagues have never sought the intervention, help or aid of the respondent Compañia MARITIMA or its branch manager Teves in the formation and/or organization of the said Iligan Stevedoring Union. It appears that these people have had previous knowledge and experience in handling stevedoring and in the arrastre service prior to the employment of the Allied Free Workers Union in the Iligan port. The charge of union interference and domination finds no support from the evidence. (Emphasis supplied)

More worthy of consideration is the suggestion that the termination of the CONTRACT was in bad faith. First of all, contrary to AFWU's sweeping statement, the court a quo did not find that the termination of the CONTRACT was "in retaliation to AFWU's demand for collective bargaining. On the contrary, the court a quo held that MARITIMA'sauthority to terminate the CONTRACT was rightfully exercised:

21. The evidence does not show substantially any act of interference in the union membership or activities of the petitioner union. The rescission of their CONTRACT is not a union interference contemplated in the law.

x x x x x x x x x

x x x Further, the Court is satisfied that there is no act or acts of discrimination as claimed by herein petitioner to have been committed by the respondent firm or its branch manager Teves. Evidence is clear that Teves, in representation of the principal, the respondent Compañia MARITIMA, has also acted, in good faith in implementing the provisions of their existent CONTRACT (Exhibit "A"), and when he advised the union of the rescission of the said CONTRACT effective August 31, 1954, he did so in the concept that the employer firm may so terminate their contract pursuant to paragraph 4 of Exhibit "A" which at the time was the law controlling between them. ... (Emphasis supplied)

We are equally satisfied that the real reason for the termination of the CONTRACT was AFWU's inefficient service. The court a quo drew its conclusion from the following findings:

11. During the first month of the existence of the labor CONTRACT Exhibit 'A', the petitioner union rendered satisfactory service. Under this situation, the Compañia MARITIMA's representative at Iligan City was authorized to renew verbally with the extension of the CONTRACT Exhibit "A" from month to month basis after the first month of its expiration. This situation of harmony lasted up to the latter part of 1953 when the Compañia MARITIMA and its branch manager agent complained to the union of the unsatisfactory service of the union laborers hired to load and unload cargoes aboard Compañia MARITIMA boats. This deteriorating situation was admitted as a fact by the union president (See Exhs. "3", "3-A" and "3-B"; See also t.s.n. pp. 65-66, August 9, 1960).

12. There was a showing that the laborers employed by the union were inefficient in performing their jobs, and the business of the respondent company in Iligan City suffered adversely during the year 1954; and this was due to the fact that respondents' vessels were forced to leave cargoes behind in order not to disrupt the schedule of departures. The Union laborers were slow in loading and/or unloading freight from which the respondent Compañia MARITIMA secured its income and/or profits. At times, cargoes were left behind because of the union's failure to load them before vessel's departure. In order to solve this inefficiency of the complaining union, the branch manager of the Compañia MARITIMA was forced to hire extra laborers from among 'stand-by' workers not affiliated to any union for the purpose of helping in the stevedoring and arrastre work on their vessels because, at that time, the union was not performing and/or rendering efficient service in the loading and unloading of cargoes. ...

x x x x x x x x x

14. Because of the deterioration of the Service rendered to the respondent, the branch manager of the respondent Compañia MARITIMA informed the union of its intention to rescind the CONTRACT Exhibit "A" because the company had been suffering losses for such inefficient service. (See Exhibit "N").

Respondent Teves reported to the MARITIMA's head office on the financial losses of the company in its operations. (See Exhibits 'Y', 'Y-1' to 'X-5').

15. On August 24, 1954, branch manager Jose C. Teves of the Iligan City MARITIMA Branch, wrote the petitioner union informing them of the termination of their CONTRACT , Exhibit "A". (See Exhibit "N"). This step was taken after the company

found the union lagging behind their work under the CONTRACT , so much so that MARITIMA boats have to leave on schedule without loading cargoes already contacted to be transported. (Emphasis supplied)

Perhaps, AFWU might say that this right to terminate appearing in paragraph 4 of the CONTRACT is contrary to law, morals, good customs, public order, or public policy. 22 However, it has not adduced any argument to demonstrate such point. Moreover, there is authority to the effect that the insertion in a CONTRACT for personal services of a resolutory condition permitting the cancellation of the CONTRACT by one of the contracting parties is valid. 23 Neither would the termination constitute "union-busting". Oceanic Air Products vs. CIR, 24 cited byAFWU is not in point. That case presupposes an employer-employee relationship between the parties disputants — a basis absolutely wanting in this case.

AFWU's third point is again that MARITIMA's act of terminating the CONTRACT constituted union interference. As stated, the court a quo found as a fact that there is no sufficient evidence of union interference. And no reason or argument has been advanced to show that the fact of said termination alone constituted union interference.

THE CERTIFICATION ELECTION CASE (L-22952 ** & L-22971 [CIR Case No. 175-MC]).

In the certification ejection case, the court a quo directed the holding of a certification election among the laborers then doing arrastre and stevedoring work. Both MARITIMA and AFWU have appealed from that ruling. The latter maintains that the lower court should have directly certified it as the majority union, entitled to represent all the workers in the arrastre and stevedoring work unit, whereas MARITIMA contends that said court could not even have correctly ordered a certification election considering that there was an absence of employer-employee relationship between it and said laborers.

There is no question that certification election could not have been proper during the existence of the CONTRACTin view of the court a quo's finding that there was no employment relationship thereunder between the parties. But after the termination of the CONTRACT on August 31, 1954, what was the nature of the relationship betweenMARITIMA and the laborers-members of AFWU?

From the finding that after the rescission of the CONTRACT , MARITIMA continued to avail of the services ofAFWU the court a quo concluded that there came about an implied employer-employee relationship between the parties. This conclusion cannot be sustained.

First of all, it is contradicted by the established facts. In its findings of fact, the court a quo observed that after the rescission, the AFWU laborers continued working in accordance with the "cabo" system, which was the prevailing custom in the place. Said the court:

20. After the rescission of the CONTRACT Exhibit "A" on August 31, 1954, the Allied Free Workers Union and its members were working or performing the work of arrastre and stevedoring service aboard 'vessels of the Compañia MARITIMA docking at Iligan City port under the 'cabo system' then prevailing in that teritory; and the customs and conditions then prevailing were observed by the parties without resorting to the conditions of the former labor contract Exhibit "A". (Emphasis supplied)

Under the "Cabo" system, the union was an independent contractor. This is shown by the court a quo's own finding that prior to the CONTRACT between MARITIMA and AFWU, the former had an oral arrastre and stevedoring agreement with another union. This agreement was also based on the "cabo" system. As found by the court a quo:

4. That prior to the execution of Exhibit "A", the arrastre and stevedoring work was performed by the Iligan Wharf Laborers Union headed by one Raymundo Labayos under a verbal agreement similar to the nature and contents of Exhibit "A"; and this work continued from 1949 to 1952.

5. Under the oral CONTRACT , the Iligan Laborers Union acting as an independent labor contractor engaged [in] the services of its members as laborers to perform the contract work of arrastre and stevedoring service aboard vessels of the Compañia MARITIMA calling and docking at Iligan City; and for the services therein rendered the union charged shippers and/or consignees in accordance with the consignment or place, and the proceeds thereof shall be shared by the union members in accordance with the union's internal rules and regulations. This system of work is locally known as the 'cabo system'. The laborers who are members of the union and hired for the arrastre and stevedoring work were paid on union payrolls and the Compañia MARITIMA has had nothing to do with the preparation of the same.

6. Because of unsatisfactory service rendered by the Iligan Wharf Labor Union headed by Labayos, the Compañia MARITIMA through its agent in Iligan City cancelled their oral contractor and entered into a new contractor, Exhibit "A" with the Allied Free Workers Union (PLUM) now petitioner in this case. The terms and conditions of the same continued and was similar to the oral contractor entered into with the union headed by Labayos. ...

7. The cancellation of the oral contract with the Iligan Wharf Labor Union headed by Labayos was due to the inefficient service rendered by the said union. The labor contract entered into by the petitioner herein (Exh. "A") was negotiated through the intervention of Messrs. Salvador Lluch, Mariano Ll Badelles, Laurentino Ll. Badelles, Nicanor T. Halivas and Raymundo

Labayos. The contract was prepared by their legal panel and after several negotiations, respondent Teves reluctantly signed the said written contract with the union with the assurance however that the same arrange previously had with the former union regarding the performance and execution of the arrastre and stevedoring contract be followed in accordance with the custom of such kind of work at Iligan City. The petitioner union, operated as a labor contractor under the so-called "cabor" system; ... (Emphasis supplied)

From the above findings, it is evident that, insofar as the working arrangement was concerned, there was no real difference between the CONTRACT and the prior oral agreement. Both were based on the "cabo" system. Under both, (1) the union was an independent contractor which engaged the services of its members as laborers; (2) the charges against the consignees and owners of cargoes were made directly by the union; and (3) the laborers were paid on union payrolls and MARITIMA had nothing to do with the preparation of the same. These are the principal characteristics of the "cabo" system on which the parties based their relationship after the termination of the CONTRACT.

Hence, since the parties observed the "cabo" system after the rescission of the CONTRACT, and since the characteristics of said system show that the contracting union was an independent contractor, it is reasonable to assume that AFWU continued being an independent contractor of MARITIMA. And, being an independent contractor, it could not qualify as an "employee". With more reason would be true with respect to the laborers.

Moreover, there is no evidence at all regarding the characteristics of the working arrangement between AFWUand MARITIMA after the termination of the CONTRACT. All we have to go on is the court a quo's finding that the "cabo" system was observed — a system that negatives employment relationship. The four elements generally regarded as indicating the employer-employee relationship — or at the very least, the element of "control" — must be shown to sustain the conclusion that there came about such relationship. The lack of such a showing in the case at bar is fatal to AFWU's contention.

Lastly, to uphold the court a quo's conclusion would be tantamount to the imposition of an employer-employee relationship against the will of MARITIMA. This cannot be done, since it would violate MARITIMA's exclusive prerogative to determine whether it should enter into an employment CONTRACT or not, i.e, whether it should hire others or not. 25 In Pampanga Bus Co. vs. Pambusco Employees' Union, 26 We said:

x x x The general right to make a contract in relation to one's business is an essential part of the liberty of the citizens protected by the due process clause of the constitution. The right of a laborer to sell his labor to such person as he may choose is, in its essence, the same as the right of an employer to purchase labor from any person whom it chooses. The employer and the employee have thus an equality of right guaranteed by the constitution. 'If the employer can compel the employee to work against the latter's will, this is servitude. If the employee can compel the employer to give him work against the employer's will, this is oppression (Emphasis supplied) .

Therefore, even if the AFWU laborers continued to perform arrastre and stevedoring work after August 31, 1954, it cannot be correctly concluded — as did the court a quo — that an employer-employee relationship — even impliedly at that — arose when before there never had been any. Indeed, it would appeal unreasonable and unjust to force such a relationship upon MARITIMA when it had clearly and continuously manifested its intention not to have any more business relationship whatsoever with AFWU because of its inefficient service. It was only to comply with injunctions and other judicial mandates that MARITIMA continued to abide by the status quo, extending in fact and in effect the operation of the MARITIMA contract.

The only remaining question now is whether, in the particular context of what We have said, the lower court's ruling ordering a certification election can be sustained. As already stated, the duty to bargain collectively exists only between the "employer" and its "employees". However, the actual negotiations — which may possibly culminate in a concrete collective bargaining contract — are carried on between the "employer" itself and the officialrepresentative of the "employees" 27 — in most cases, the majority labor union. Since the only function of a certification election is to determine, with judicial sanction, who this official representative or spokesman of the "employees" will be, 28 the order for certification election in question cannot be sustained. There being no employer-employee relationship between the parties disputants, there is neither a "duty to bargain collectively" to speak of. And there being no such duty, to hold certification elections would be pointless. There is no reason to select a representative to negotiate when there can be no negotiations in the first place. We therefore hold that where — as in this case — there is no duty to bargain collectively, it is not proper to hold certification elections in connection therewith.

The court a quo's objective in imposing the employer-employee relationship may have been to do away with the "cabo" system which, although not illegal, is in its operation regarded as disadvantageous to the laborers and stevedores. The rule however remains that the end cannot justify the means. For an action to be sanctioned by the courts, the purpose must not only be good but the means undertaken must also be lawful.

A true and sincere concern for the welfare of AFWU members-laborers would call for reforms within AFWU itself, if the evil of the so-called "cabo" system is to be eliminated. As We suggested in Bermiso vs. Hijos de Escaño, 29 the remedy against the "cabo" system need not be sought in the courts but in the laborers themselves who should organize into a closely-knit union "which would secure the privileges that the members desire thru the election of officers among themselves who would not exploit them."

Wherefore, the appealed decision of the Court of Industrial Relations is hereby affirmed insofar as it dismissed the charge of unfair labor practice in CIR Case 426-ULP, but reversed and set aside insofar as it ordered the holding of a certification election in CIR Case No. 175-MC, and the petition for certification in said case should be, as it is hereby, dismissed. No costs. So ordered.

G.R. No. 118069 November 16, 1998 ROMERO, J.:

PRODUCERS BANK OF THE PHILIPPINES, (now First Philippine International Bank), petitioner, vs.NLRC and PRODUCERS BANK EMPLOYEES ASSOCIATION,respondents.

Initially, this action was resolved in petitioner's favor with the dismissal of private respondent's complaint for unfair labor practice and violation of the CBA against the former by Labor Arbiter Jovencio Mayon. 1 Upon appeal to the National Labor Relations Commission (NLRC), the decision of the Labor Arbiter was reversed and instead a judgment was rendered in favor of the private respondent. Dismayed, petitioner is now before us seeking the reversal of the NLRC's decision.

The facts are quite simple.

Prefatorily, at the time the instant controversy started, petitioner was placed by the then Central Bank of the Philippines (now Bangko Sentral ng Pilipinas) under a conservator for the purpose of protecting its assets. 2 It appears that when the private respondents sought the implementation of Section I, Article XI of the CBA regarding the retirement plan and Section 4, Article X thereof, pertaining to uniform allowance, the acting conservator of the petitioner expressed her objection to such plan, resulting in an impasse between the petitioner bank and the private respondent union. The deadlock continued for at least six months when the private respondent, to resolve the issue, decided to file a case against the petitioner for unfair labor practice and for flagrant violation of the CBA provisions.

As stated earlier, the Labor Arbiter dismissed private respondent's complaint, on this premise:

Considering that the Bank is under conservatorship program under which the bank is under the rule of a conservator, the latter is under no compulsion to implement the resolutions issued by the LMRC. If he finds that the enforcement of the resolutions would not redound for the best interest of the Bank in accordance with the conservatorship program, he may not be faulted by such inaction or action.

Undaunted by the initial setback, private respondent union interposed an appeal before the NLRC. The NLRC, after reviewing the arguments of both parties, reversed the findings of the Labor Arbiter, thus:

Not only is the worker protected by the Labor Code, he is likewise protected by other laws (Civil Code) and social legislations the source of which is the no less than the Constitution itself. To adhere first to the interest of the company to the prejudice of the workers can never be allowed or tolerated as the interest of the working masses is the paramount concern of the government.

Consequently, the NLRC ordered the petitioner to implement the provisions of the CBA which were disallowed by the conservator. 3

The issue need not detain us at length. The NLRC's finding deserves our concurrence.

In a similar case involving the petitioner and the acts of its conservator, 4 we already ruled that:

In the third place, while admittedly, the Central Bank law gives vast and far-reaching powers to the conservator of a bank, it must be pointed out that such powers must be related to the "(preservation of) the assets of the bank, (the reorganization of) the management thereof and (the restoration of) its viability." Such powers, enormous and extensive as they are, cannot extend to the post-facto repudiation of perfected transactions, otherwise they would infringe against the non-impairment clause of the Constitution. If the legislature itself cannot revoke an existing valid contract, how can it delegate such non-existent powers to the conservator under Section 28-A of said law?

Obviously, therefore, Section 28-A merely gives the conservator power to revoke contracts that are, under existing law, deemed to be defective — i.e., void, voidable, unenforceable or rescissible. Hence, the conservator merely takes the place of a bank's board of directors. What the said board cannot do — such as repudiating a contract validly entered into under the doctrine of implied authority — the conservator cannot do either. Ineluctably, his power is not unilateral and he cannot simply repudiate valid obligations of the Bank. His authority would be only to bring court actions to assail such contracts — as he has already done so in the instant case. A contrary understanding of the law would simply not be permitted by the Constitution. Neither by common sense. To rule otherwise would be to enable a failing bank to become solvent, at the expense of third parties, by simply getting the conservator to unilaterally revoke all previous dealings which had one way or another come to be considered unfavorable to the Bank, yielding nothing to perfected contractual rights nor vested interests of the third parties who had dealt with the Bank.

Prescinding from the rationalization that a conservator cannot rescind a valid and existing contract and that the CBA is the law between the contracting parties, 5 it is obvious that the conservator had no authority whatsoever to disallow the implementation of Article XI,

Section 1 and Article X, Section 4 of the CBA, especially considering that the ideals of social justice and protection of labor are guaranteed not only by the Labor Code, but more importantly by the fundamental law of the land.

It bears repeating that apart from the non-impairment clause, what is also well-settled, to the point of being trite, is the principle that when the conflicting interests of labor and capital are weighed on the scales of social justice, the dominant influence of the latter must be counter-balanced by the sympathy and compassion the law must accord the under-privileged worker. 6

Next, petitioner insists that both the Labor Arbiter and the NLRC have no jurisdiction to entertain the complaint of the private respondent, 7 asserting that the issue was cognizable by the voluntary arbitrator pursuant to Article 261 of the Labor Code.

Granting that both the Labor Arbiter and the NLRC indeed had no jurisdiction over the issue, petitioner cannot anymore plead such procedural flaw under the principle of estoppel. 8 It appears that in the proceedings before the Labor Arbiter, it vigorously argued its defense and prayed for alternative relief. In fact, in its position paper 9and reply, 10 the issue concerning the Labor Arbiter's lack of jurisdiction was not raised by the petitioner. Moreover, in its answer 11 to the memorandum of appeal filed by the private respondents before the NLRC, petitioner was again silent regarding the issue of jurisdiction on the part of the NLRC to decide the appeal. It was only when the decision of the NLRC was unfavorable that it raised the issue of jurisdiction.

Petitioner should bear the consequence of its act. It cannot be allowed to profit from its own omission to the damage and prejudice of the private respondent. As we declared in Ilocos Sur Electric Cooperative, Inc. v. NLRC:12

. . . . Petitioners did not question the jurisdiction of the Labor Arbiter either in a motion to dismiss or in their answer. In fact, petitioners participated in the proceedings before the Labor Arbiter, as well as in the NLRC to which they appealed the Labor Arbiter's decision. It has been consistently held by this Court that while jurisdiction may be assailed at any stage, a party's active participation in the proceedings before a court without jurisdiction will estop such party from assailing such lack of it. It is an undesirable practice of a party participating in the proceedings and submitting his case for decision and then accepting the judgment, only if favorable, and attacking it for lack of jurisdiction, when adverse.

Finally, petitioner asserts since the employees have retired, as a consequence of which no employee-employer relationship exists anymore between it and the employees, private respondent no longer had the personality to file the complaint for them. 13

Petitioner's contention in untenable. Retirement results from a voluntary agreement between the employer and the employee whereby the latter after reaching a certain age agrees to sever his employment with the former. 14 The very essence of retirement is the termination of the employer-employee relationship.

Hence, the retirement of an employee does not, in itself, affect his employment status especially when it involves all rights and benefits due to him, since these must be protected as though there had been no interruption of service. It must be borne in mind that the retirement scheme was part of the employment package and the benefits to be derived therefrom constituted, as it were, a continuing consideration for services rendered, as well as an effective inducement for remaining with the corporation. It is intended to help the employee enjoy the remaining years of his life, releasing him from the burden of worrying for his financial support, and are a form of reward for his loyalty. 15

When the retired employees were requesting that their retirement benefits be granted, they were not pleading for generosity but were merely demanding that their rights, as embodied in the CBA, be recognized. Thus, when an employee has retired but his benefits under the law or the CBA have not yet been given, he still retains, for the purpose of prosecuting his claims, the status of an employee entitled to the protection of the Labor Code, one of which is the protection of the labor union. In Esso Philippines, Inc. v. Malayang Manggagawa sa Esso (MME), 16we recognized that while the individual complainants are the real party m interest in issues involving monetary claims and benefits, the union, however, is not denied its right to sue on behalf of its members, thus:

We see no legal impediments to considering this particular matter of retirement benefits to be within the ambit of Our consistent holding that when it comes to individual benefits accruing to members of a union from a favorable final judgment of any court, the members themselves become the real parties in interest and it is for them, rather than for the union, to accept or reject individually the fruits of the litigation. In the case at bar, the representations of the MME which may result in prejudice to the interests of any of its individual members in the final judgment being sought to be executed should yield to the individual decisions of the said members themselves, who are free to choose whichever position suits their conscience.

WHEREFORE, in view of the foregoing, the instant petition is DISMISSED and the decision of the National Labor Relations Commission dated August 31, 1994 is AFFIRMED. Costs against petitioner. SO ORDERED.

G.R. No. L-21120 February 28, 1967 CONCEPCION, C.J.:

PHILIPPINE AIR LINES, INC., petitioner, vs. PHILIPPINE AIR LINES EMPLOYEES ASSOCIATION and COURT OF INDUSTRIAL RELATIONS, respondents.

Paredes, Poblador, Cruz & Nazareno for petitioner.Tañada, Lerum & Cinco and Beltran & Lacson for respondents.Mariano B. Tuason for respondent Court of Industrial Relations.

Appeal by certiorari , taken by the Philippine Air Lines, Inc. — hereinafter referred to as the PAL from an order of the Court of Industrial Relations — hereinafter referred to as the CIR — the dispositive part of reads:

WHEREFORE , THE Philippine Air Lines is hereby ordered to pay the four claimants, Messrs. Fortuno Biangco, Hernando Guevarra, Bernardino Abarrientos and 140 days each, sick leave which the two may use or enjoy according to existing company rules, and regulations regarding this privilege, and to allow the four claimants the enjoyment of their earned and accumulated free trip passes both here and aboard subject to the above-mentioned plan the company may adopt. In order to effect early payment of the Christmas bonus, the Chief Examiner of the Court or his duly authorized representatives is hereby directed to examine; pertinent records of the company, to compute and determine the Christmas bonus due each of the four claimant and to submit a report therefore immediately upon completion of the same.

It appears that on May 4, 1950, PAL dismissed its above named four (4) employees, who are member of the Philippine Air Lines Employees Association — hereinafter referred to as PALEA — and that on July 13, 1954, the CIR en banc passed resolution, in Case No. 465-V thereof, directing the reinstatement of said employess "to their former or equivalent position in the company, with back wages from the date of their reinstatement, and without prejudice to their seniority or other rights and privileges. This resolution was affirmed by the Supreme Court, in G.R. No. L-8197, on October 31, 1958.

On January 14, 1959, said employees were reinstated and subsequently their backwages, computed at the rate of their compensation at the time of the aforementioned dismissal, less the wages and salaries earned by them elsewhere during the lay-off period, were paid to them. The employees objected to this deduction and the CIR sustained them, in a Resolution dated May 22, 1960, which was reversed by the Supreme Court, on July 26, 1960, in G.R. No. L-15544. Soon later, or on November 10, 1960, the PALEA moved for the execution of the CIR resolution of July 13, 1954, as regards the "other rights and privileges" therein mentioned, referring, more specifically to: (1) Christmas bonus from 1950 to 1958; (2) accumulated sick leave; (3) transportation allowance during lay-off period; and (4) accumulated free trip passes, both domestic and international. By an order dated October 8, 1962, the CIR granted this motion, except as regards the sick leave of Onofre Griño and Bernardino Abarrientos, and the transportation allowance, which were denied. Hence this appeal.

PAL maintains that the CIR has erred in acting as it did, because : (1) the aforementioned privileges were not specifically mentioned in the CIR resolution of July 13, 1954; (2) the order of the CIR dated October 8, 1962, had, allegedly, the effect of amending said resolution; and (3) the clause therein "without prejudice to their seniority or other rights and privileges" should be construed prospectively, not retroactively.

Insofar as the Christmas bonus, the accumulated sick leave privileges and the transportation allowance during the lay-off period, the PAL's contention is clearly devoid of merit. The aforementioned clause must be considered in the light of the entire context of the resolution of July 13, 1954 and of its dispositive part. In ordering therein the "reinstatement" of said employees with "back wages from the date of their dismissal to the date of their reinstatement, and without prejudice to their seniority or other rights and privileges," it is obvious that the resolution intended to restore the employees to their status immediately prior to their dismissal.

Hence, it directed , not only their reinstatement, but, also, the payment of their back wages during the period of their lay-off — thus referring necessarily to a period of time preceding their reinstatement — and the retention of "their seniority or other rights and privileges". Rights reinstatement, but at the time? Certainly, not after their reinstatement, but at the time of their aforementioned dismissal. In other words, the reinstatement was with back wages for the lay-off period, coupled with "seniority or other rights and privileges", attached to the status of the employees when they were dismissed. To put it differently, the CIR treated said employees as if they had not been absent form work and had been uninterruptedly working during the lay-off period.1äwphï1.ñët

Thus, in Republic Steel Corporation vs. NLRB (114 F. 2d. 820), it was held that, under a decree of the Circuit Court of Appeals and Order of the National Labor Relations Board directing the employer to reinstate the striking employees without prejudice to their seniority or other rights or privileges, it was the intention of the Board and Court to provide that, upon reinstatement the employees were to be treated in matters involving seniority and continuity of employment as though they had not been absent from work, and hence the reinstated employees were entitled to the benefits of the employer's vacation plan for the year in which they were reinstated and subsequent years upon the basis of continuity of service computed as though they had been actually at during the entire period from the date of strike to the date of reinstatement.

As a consequence, the employees involved in the case at bar are entitled to the Christmas bonus that PAL had given to all of its employees during said period, for said bonus, having been paid regularly, has become part of the compensation of the employees.1 Said employees are, likewise, entitled to transportation allowance and the corresponding sick leave privileges. These sick leave privileges are subject, however, to the following qualifications, namely: (1) that the accumulated sick leave cannot exceed 140 days, pursuant to the collective bargaining agreement between the PAL and the PALEA, effective in 1959; and (2) that, pursuant to the same agreement, which denies sick leave privileges to retired employees, Onofre Griño and Bernardino Abarrientos, who have retired, are not entitled to said privileges.

The PAL's appeal as regards the free trip passes is, however, well taken, for the employees had no absolute right thereto, even if they had actually rendered services during the lay-off period. The free trip passes were given, neither automatically, nor indiscriminately. The employees had to apply therefore and their applications were subject PAL's approval.

Wherefore, except as to the free trip passes for the lay-off period, which should not be deemed included in the "rights and privileges" awarded in the resolution of July 13, 1954, and subject to the qualification that the accumulated sick leave privileges cannot exceed 140 days, the appealed resolution of October 8, 1962, is hereby affirmed in all other respects, without pronouncement as to costs. It is so ordered.

G.R. No. 83190 August 4, 1992 MEDIALDEA, J.:

CEBU SEAMEN'S ASSOCIATION, INC., petitioner, vs. HON. PURA FERRER-CALLEJA, SEAMEN'S ASSOCIATION OF THE PHILS./DOMINICA C. NACUA, respondent.

This petition seeks the reversal of the resolution of the Bureau of Labor Relations 1 which affirmed the decision of the Med-Arbiter holding that the set of officers of Seamen's Association of the Philippines headed by Dominica C. Nacua, as president, was the lawful set of officers entitled to the release and custody of the union dues as well as agency fees of said association. The dispositive portion of the resolution reads:

WHEREFORE, premises considered, the Order of the Med-Arbiter dated 13 July 1987 is hereby affirmed and the appeal therefrom DISMISSED for lack of merit. (p. 39, Rollo)

The facts surrounding the controversy in this case, as stated in the questioned resolution, is as follows:

The records show that sometime on 23 October 1950, a group of deck officers and marine engineers on board vessels plying Cebu and other ports of the Philippines organized themselves into an association and registered the same as a non-stock corporation known as Cebu Seamen's Association, Inc. (CSAI), with the Securities and Exchange Commission (SEC). Later, on 23 June 1969, the same group registered its association with this Bureau as a labor union known as the Seamen's Association of the Philippines, Incorporated (SAPI).

SAPI has an existing collective bargaining agreement (CBA) with the Aboitiz Shipping Corporation which will expire on 31 December 1988. In consonance with the CBA said company has been remitting checked-off union dues to said union until February, 1987 when a group composed of members of said union, introducing itself to be its new set of officers, went to the company and claimed that they are entitled to the remittance and custody of such union dues. This group, headed by Manuel Gabayoyo claims that they were elected as such on January 20, 1987 under the supervision of the SEC.

On 26 May 1987, another group headed by Dominica C. Nacua, claiming as the duly elected set of officers of the union in an election held on 20 December 1986, filed a complaint, for and in behalf of the union, against the Cebu Seamen's Association, Inc. (CSAI) as represented by Manuel Gabayoyo for the security of the aforementioned CBA, seeking such relief, among others, as an order restraining the respondent from acting on behalf of the union and directing the Aboitiz Shipping Corp. to remit the checked-off union dues for the months of March and April 1987.

On 10 June 1987, respondent CSAI filed its Answer/Position Paper alleging that the complainant union and CSAI are one and the same union; that Dominica C. Nacua and Atty. Prospero Paradilla who represented the union had been expelled as members/officers as of November 1984 for lawful causes; and, that its set of officers headed by Manuel Gabayoyo has the lawful right to the remittance and custody of the corporate funds (otherwise known as union does) in question pursuant to the resolution of the SEC dated 22 April 1987.

To bolster further its posture, on the following day, 11 June 1987, the respondent also filed a Motion to Dismiss the Complaint on the grounds, among others, that the SEC, not the Med-Arbiter, has jurisdiction over the dispute as provided under P.D. No. 902-A; that there can neither be a complainant no respondent in the instant case as the parties involved are one and the same labor union, and that Mrs. Dominica C. Nacua and Atty. Prospero Paradilla have no personality to represent the union as they had already been expelled as members/officers thereof in two resolutions of the Board of Directors dated November 1984 and January 17, 1987.

On 19 June 1987, the Med-Arbiter issued an Order denying said motion but directing the Aboitiz Shipping Corporation to remit the already checked-off union dues to the complainant union through its officers end to continue remitting any checked-off union dues until further notice. The Med-Arbiter also set further hearing of the complaint on July 1, 1987.

On 19 June 1987, the respondent filed a motion for reconsideration of said order of 19 June 1987, reiterating its previous position. Thereafter, the Med-Arbiter issued the assailed Order. . . . (pp. 34 -35, Rollo)

From the decision of the Med-Arbiter, Cebu Seamen's Association headed by Capt. Gabayoyo filed an appeal with the Bureau of Labor Relations (BLR).

The BLR, as already stated, affirmed the decision of the Med-Arbiter in a resolution dated February 19, 1988. The Gabayoyo group appealed to the Office of the Secretary, Department of Labor, which appeal was considered as a motion for reconsideration of the BLR's decision. The said appeal/motion for consideration was denied for lack of merit on April 11, 1988 (p. 42, Rollo) by the BLR.

Hence, this petition.

There are three issues presented for resolution in this petition, to wit:

1 WHETHER OR NOT THE MED-ARBITER OF REGION VII HAS JURISDICTION OVER THE CASE AT BAR.

2. WHETHER OR NOT THE COMPLAINANT-APPELLEE THE SEAMEN'S ASSOCIATION OF THE PHILIPPINES WAS REGISTERED AS A LABOR FEDERATION WITH THE BUREAU OF LABOR RELATIONS.

3 WHETHER OR NOT DOMINICA C. NACUA AND PROSPERO PARADIL(L)A HAVE (THE) PERSONALITY TO REPRESENT THE HEREIN COMPLAINANT-APPELLEE, CONSIDERING THAT BOTH OF THEM HAVE BEEN EXPELLED FROM THE ASSOCIATION "SEAMEN'S ASSOCIATION OF THE PHILIPPINES, INC." (FORMERLY THE CEBU SEAMEN'S ASSOCIATION, INC.).

There is no doubt that the controversy between the aforesaid two sets of officers is an intra-union dispute. Both sets of officers claim to be entitled to the release of the union dues collected by the company with whom it had an existing CBA. The controversy involves claims of different members/officers to certain rights granted under the labor code.

Article 226 of the Labor Code vests upon the Bureau of Labor Relations and Labor Relations Division the original and exclusive authority and jurisdiction to act on all inter-union and intra-union disputes. Therefore, the Med-Arbiter originally, and the Director on appeal, correctly assumed jurisdiction over the controversy.

The determinative issue in this case is who is entitled to the collection and custody of the union dues? Cebu Seamen's Association headed by Gabayoyo or Seamen's Association of the Philippines headed by Nacua.

As stated in the findings of fact in the questioned resolution of Director Pura Ferrer-Calleja, on October 23, 1950, a group of deck officers organized the Cebu Seamen's Association, Inc., (CSAI), a non-stock corporation and registered it with the Securities and Exchange Commission (SEC). The same group registered the organization with the Bureau of Labor Relations (BLR) as Seamen's Association of the Philippines (SAPI). It is the registration of the organization with the BLR are not with the SEC which made it a legitimate labor organization with rights and privileges granted under the Labor Code.

We gathered from the records that CSAI, the corporation was already inoperational before the controversy in this case arose. In fact, on August 24, 1984 the SEC ordered the CSAI to show cause why its certificate of registration should not be revoked for continuous inoperation (p. 343, Rollo). There is nothing in the records which would show that CSAI answered said show-cause order.

Also, before the controversy, private respondent Dominica Nacua was elected president of the labor union, SAPI. It had an existing CBA with Aboitiz Shipping Corporation. Before the end of the term of private respondent Nacua, some members of the union which included Domingo Machacon and petitioner Manuel Gabayoyo showed signs of discontentment with the leadership of Nacua. This break-away group revived the moribund corporation and issued an undated resolution expelling Nacua from association (pp. 58-59, Rollo). Sometime in February, 1987, it held its own election of officers supervised by the Securities and Exchange Commission. It also filed a case of estafa against Nacua sometime in May, 1986 (p. 52, Rollo).

The expulsion of Nacua from the corporation, of which she denied being a member, has however, not affected her membership with the labor union. In fact, in the elections of officers for 1987-1989, she was re-elected as the president of the labor union. In this connections, We cannot agree with the contention of Gabayoyo that Nacua was already expelled from the union. Whatever acts their group had done in the corporation do not bind the labor union. Moreover, Gabayoyo cannot claim leadership of the labor group by virtue of his having been elected as a president of the dormant corporation CSAI.

Under the principles of administrative law in force in this jurisdiction, decisions of administrative officers shall not be disturbed by courts, except when the former acted without or in excess of their jurisdiction or with grave abuse of discretion.

Public respondent Bureau of Labor Relations correctly ruled on the basis of the evidence presented by the parties that SAPI, the legitimate labor union, registered with its office, is not the same association as CSAI, the corporation, insofar as their rights under the Labor Code are concerned. Hence, the former and not the latter association is entitled to the release and custody of union fees with Aboitiz Shipping and other shipping companies with whom it had an existing CBA. As correctly held by public respondent:

It is undisputed from the records that the election of the so-called set of officers headed by Manuel Gabayoyo was conducted under the supervision of the SEC, presumably in accordance with its constitution and by-laws as well as the articles of incorporation of respondent CSAI, and the Corporation Code. That had been so precisely on the honest belief of the participants therein that they were acting in their capacity as members of the said corporation. That being the case, the aforementioned set of officers is of the respondent corporation and not of the complainant union. It follows, then, that any proceedings, and actions taken by said set of officers can not, in any manner, affect the union and its members.

On the other hand, we rule and so hold that the other set of officers headed by Dominica C. Nacua is the lawful set of officers of SAPI and therefore, is entitled to the release and custody of the union dues as well as the agency fees, if any, there be. A record check with the Labor Organizations (LOD), this Bureau, shows that SAPI has submitted to it for file the list of this new set of officers, in compliance with the second paragraph of Article 242 (c) of the Labor Code. This list sufficiently sustains the view that said officers were lawfully elected, in the absence of clear and convincing proof to the contrary. (pp. 9-10, Rollo)

ACCORDINGLY, the petition is DISMISSED. The questioned resolution of the Bureau of Labor Relations is AFFIRMED. SO ORDERED.

G.R. No. 85197 March 18, 1991 GRIÑO-AQUINO, J.:p

NESTLÉ PHILIPPINES, INC., petitioner, vs. NLRC, EUGENIA C. NUNEZ, LIZA T. VILLANUEVA, EMMANUEL S. VILLENA, RUDOLPH C. ARMAS, RODOLFO M. KUA and RODOLFO A. SOLIDUM, respondents.

This petition for certiorari seeks a review of the resolutions dated May 28, 1988 and September 1, 1988 of the National Labor Relations Commission (NLRC) in Injunction Case No. 1582 granting the injunction prayed for by the private respondents, to hold in abeyance the cancellation of their car loans and payments of the monthly amortizations thereon pending the resolution of their complaints for illegal dismissal.

The private respondents were employed by the petitioner either as sales representatives or medical representatives. By reason of the nature of their work they were each allowed to avail of the company's car loan policy. Under that policy, the company advances the purchase price of a car to be paid back by the employee through monthly deductions from his salary, the company retaining the ownership of the motor vehicle until it shall have been fully paid for. All of the private respondents availed of the petitioner's car loan policy.

On September 14, 1987, private respondents Nuñez, Villanueva, Villena and Armas were dismissed from the service for having participated in an illegal strike. On December 26, 1987, respondents Kua and Solidum were also dismissed for certain irregularities. All the private respondents filed complaints for illegal dismissal in the Arbitration Branch of the NLRC. The Labor Arbiter dismissed their complaints and upheld the legality of their dismissal. They appealed to the NLRC where their appeals are still pending.

In the Notices of Dismissal which they received from Nestlé, the private respondents had been directed to either settle the remaining balance of the cost of their respective cars, or return them to the company for proper disposition.

As they failed and refused to avail of either option, the company filed in the Regional Trial Court of Makati a civil suit to recover possession of the cars. The Court issued an Order dated March 7, 1988 directing the Deputy Sheriff to take the motor vehicles into his custody.

The private respondents sought a temporary restraining order in the NLRC to stop the company from cancelling their car loans and collecting their monthly amortizations pending the final resolution of their appeals in the illegal dismissal case.

On May 27, 1988, the NLRC en banc, issued a resolution granting their petition for injunction. Its order reads:

Acting on the Urgent Petition for the Issuance of a Temporary Restraining Order, the Commission sitting en banc after deliberation, Resolved to hold in abeyance the cancellation of the petitioners' car loans and the payment of the monthly amortizations thereof pending resolution of their illegal dismissal cases. (p. 5, Rollo.)

The company filed a motion for reconsideration, but it was denied for tardiness. Hence, this petition for certiorarialleging that the NLRC acted with grave abuse of discretion amounting to lack of jurisdiction when it issued a labor injunction without legal basis and in the absence of any labor dispute related to the same.

The private respondents, in their comment on the petition, alleged that there is a labor dispute between the petitioner and the private respondents and that their default in paying the amortizations for their cars was brought about by their illegal dismissal from work by the petitioner as punishment for their participation in the illegal strike of the Union of Filipro Employees of which they are members. If they had not participated in the strike, they would not have been dismissed from work and they would not have defaulted in the payment of their amortizations. Private respondents admitted their civil obligation to the petitioner.

The Office of the Solicitor General filed a manifestation on June 13, 1989, stating that "after judicious scrutiny of the records, . . . and in consonance with the applicable law and jurisprudence on the matter, the Office of the Solicitor General is convinced that it cannot, without violating the law, sustain the findings of the National Labor Relations Commission in the case at bar. So as not to prejudice NLRC's case, the OSG deems it best to refrain from filing its Comment, even as it begs leave of the Honorable Court to be excused from further appearing in behalf of the NLRC in this particular case" (p. 173, Rollo).

Filing its own comment, the NLRC argued that as the illegal dismissal case is a labor dispute which is still pending resolution before it, "it is clothed with authority to issue the contested resolutions because under the law, PD 442, otherwise known as the Labor Code of the Philippines as amended, it is vested with the authority to resolve labor disputes" (p. 252, Rollo).

The power of the NLRC to issue writs of injunction is found in Article 218 of the Labor Code, which provides:

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: . . . (Emphasis ours.)

That power, as the statute provides, can only be exercised in a labor dispute. Paragraph (1) of Article 212 of the Labor Code defines a labor dispute as follows:

(1) "Labor dispute" includes any controversy or matters 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.

Nestlé's demand for payment of the private respondents' amortizations on their car loans, or, in the alternative, the return of the cars to the company, is not a labor, but a civil, dispute. It involves debtor-creditor relations, rather than employee-employer relations.

Petitioner Nestlé Philippines, Inc., correctly pointed out that:

The twin directives contained in petitioner's letters to the private respondents to either (1) settle the remaining balance on the value of their assigned cars under the company car plan or return the cars to the company for proper disposition; or (2) to pay all outstanding accountabilities to the company — are matters related to the enforcement of a civil obligation founded on contract. It is not dependent on or related to any labor aspect under which a labor injunction can be issued. Whether or not the private respondents remain as employees of the petitioner, there is no escape from their obligation to pay their outstanding accountabilities to the petitioner; and if they cannot afford it, to return the cars assigned to them.

As noted, the options given to the private respondents are civil in nature arising from contractual obligations. There is no labor aspect involved in the enforcement of those obligations. (p. 7, Rollo.)

The NLRC gravely abused its discretion and exceeded its jurisdiction by issuing the writ of injunction to stop the company from enforcing the civil obligation of the private respondents under the car loan agreements and from protecting its interest in the cars which, by the terms of those agreements, belong to it (the company) until their purchase price shall have been fully paid by the employee. The terms of the car loan agreements are not in issue in the labor case. The rights and obligations of the parties under those contracts may be enforced by a separate civil action in the regular courts, not in the NLRC.

WHEREFORE, the petition for certiorari is granted. The questioned resolution dated May 27, 1988 of the NLRC in Injunction Case No. 1582 (Annex A) is hereby annulled and set aside. Costs against the private respondents. SO ORDERED.

G.R. No. 87700 June 13, 1990 MELENCIO-HERRERA, J.:

SAN MIGUEL CORPORATION EMPLOYEES UNION-PTGWO, DANIEL S.L. BORBON II, HERMINIA REYES, MARCELA PURIFICACION, ET AL., petitioners, vs. HON. JESUS G. BERSAMIRA, IN HIS CAPACITY AS PRESIDING JUDGE OF BRANCH 166, RTC, PASIG, and SAN MIGUEL CORPORATION, respondents.

Romeo C. Lagman for petitioners.

Jardeleza, Sobrevinas, Diaz, Mayudini & Bodegon for respondents.

Respondent Judge of the Regional Trial Court of Pasig, Branch 166, is taken to task by petitioners in this special civil action for certiorari and Prohibition for having issued the challenged Writ of Preliminary Injunction on 29 March 1989 in Civil Case No. 57055 of his Court entitled "San Miguel Corporation vs. SMCEU-PTGWO, et als."

Petitioners' plea is that said Writ was issued without or in excess of jurisdiction and with grave abuse of discretion, a labor dispute being involved. Private respondent San Miguel Corporation (SanMig. for short), for its part, defends the Writ on the ground of absence of any employer-employee relationship between it and the contractual workers employed by the companies Lipercon Services, Inc. (Lipercon) and D'Rite Service Enterprises (D'Rite), besides the fact that the Union is bereft of personality to represent said workers for purposes of collective bargaining. The Solicitor General agrees with the position of SanMig.

The antecedents of the controversy reveal that:

Sometime in 1983 and 1984, SanMig entered into contracts for merchandising services with Lipercon and D'Rite (Annexes K and I, SanMig's Comment, respectively). These companies are independent contractors duly licensed by the Department of Labor and Employment (DOLE). SanMig entered into those contracts to maintain its competitive position and in keeping with the imperatives of efficiency, business expansion and diversity of its operation. In said contracts, it was expressly understood and agreed that the workers employed by the contractors were to be paid by the latter and that none of them were to be deemed employees or agents of SanMig. There was to be no employer-employee relation between the contractors and/or its workers, on the one hand, and SanMig on the other.

Petitioner San Miguel Corporation Employees Union-PTWGO (the Union, for brevity) is the duly authorized representative of the monthly paid rank-and-file employees of SanMig with whom the latter executed a Collective Bargaining Agreement (CBA) effective 1 July 1986 to 30 June 1989 (Annex A, SanMig's Comment). Section 1 of their CBA specifically provides that "temporary, probationary, or contract employees and workers are excluded from the bargaining unit and, therefore, outside the scope of this Agreement."

In a letter, dated 20 November 1988 (Annex C, Petition), the Union advised SanMig that some Lipercon and D'Rite workers had signed up for union membership and sought the regularization of their employment with SMC. The Union alleged that this group of employees, while appearing to be contractual workers supposedly independent contractors, have been continuously working for SanMig for a period ranging from six (6) months to fifteen (15) years and that their work is neither casual nor seasonal as they are performing work or activities necessary or desirable in the usual business or trade of SanMig. Thus, it was contended that there exists a "labor-only" contracting situation. It was then demanded that the employment status of these workers be regularized.

On 12 January 1989 on the ground that it had failed to receive any favorable response from SanMig, the Union filed a notice of strike for unfair labor practice, CBA violations, and union busting (Annex D, Petition).

On 30 January 1989, the Union again filed a second notice of strike for unfair labor practice (Annex F, Petition).

As in the first notice of strike. Conciliatory meetings were held on the second notice. Subsequently, the two (2) notices of strike were consolidated and several conciliation conferences were held to settle the dispute before the National Conciliation and Mediation Board (NCMB) of DOLE (Annex G, Petition).

Beginning 14 February 1989 until 2 March 1989, series of pickets were staged by Lipercon and D'Rite workers in various SMC plants and offices.

On 6 March 1989, SMC filed a verified Complaint for Injunction and Damages before respondent Court to enjoin the Union from:

a. representing and/or acting for and in behalf of the employees of LIPERCON and/or D'RITE for the purposes of collective bargaining;

b. calling for and holding a strike vote, to compel plaintiff to hire the employees or workers of LIPERCON and D'RITE;

c. inciting, instigating and/or inducing the employees or workers of LIPERCON and D'RITE to demonstrate and/or picket at the plants and offices of plaintiff within the bargaining unit referred to in the CBA,...;

d. staging a strike to compel plaintiff to hire the employees or workers of LIPERCON and D'RITE;

e. using the employees or workers of LIPERCON AND D'RITE to man the strike area and/or picket lines and/or barricades which the defendants may set up at the plants and offices of plaintiff within the bargaining unit referred to in the CBA ...;

f. intimidating, threatening with bodily harm and/or molesting the other employees and/or contract workers of plaintiff, as well as those persons lawfully transacting business with plaintiff at the work places within the bargaining unit referred to in the CBA, ..., to compel plaintiff to hire the employees or workers of LIPERCON and D'RITE;

g. blocking, preventing, prohibiting, obstructing and/or impeding the free ingress to, and egress from, the work places within the bargaining unit referred to in the CBA .., to compel plaintiff to hire the employees or workers of LIPERCON and D'RITE;

h. preventing and/or disrupting the peaceful and normal operation of plaintiff at the work places within the bargaining unit referred to in the CBA, Annex 'C' hereof, to compel plaintiff to hire the employees or workers of LIPERCON and D'RITE. (Annex H, Petition)

Respondent Court found the Complaint sufficient in form and substance and issued a Temporary Restraining Order for the purpose of maintaining the status quo, and set the application for Injunction for hearing.

In the meantime, on 13 March 1989, the Union filed a Motion to Dismiss SanMig's Complaint on the ground of lack of jurisdiction over the case/nature of the action, which motion was opposed by SanMig. That Motion was denied by respondent Judge in an Order dated 11 April 1989.

After several hearings on SanMig's application for injunctive relief, where the parties presented both testimonial and documentary evidence on 25 March 1989, respondent Court issued the questioned Order (Annex A, Petition) granting the application and enjoining the Union from Committing the acts complained of, supra. Accordingly, on 29 March 1989, respondent Court issued the corresponding Writ of Preliminary Injunction after SanMig had posted the required bond of P100,000.00 to answer for whatever damages petitioners may sustain by reason thereof.

In issuing the Injunction, respondent Court rationalized:

The absence of employer-employee relationship negates the existence of labor dispute. Verily, this court has jurisdiction to take cognizance of plaintiff's grievance.

The evidence so far presented indicates that plaintiff has contracts for services with Lipercon and D'Rite. The application and contract for employment of the defendants' witnesses are either with Lipercon or D'Rite. What could be discerned is that there is no employer-employee relationship between plaintiff and the contractual workers employed by Lipercon and D'Rite. This, however, does not mean that a final determination regarding the question of the existence of employer-employee relationship has already been made. To finally resolve this dispute, the court must extensively consider and delve into the manner of selection and engagement of the putative employee; the mode of payment of wages; the presence or absence of a power of dismissal; and the Presence or absence of a power to control the putative employee's conduct. This necessitates a full-blown trial. If the acts complained of are not restrained, plaintiff would, undoubtedly, suffer irreparable damages. Upon the other hand, a writ of injunction does not necessarily expose defendants to irreparable damages.

Evidently, plaintiff has established its right to the relief demanded. (p. 21, Rollo)

Anchored on grave abuse of discretion, petitioners are now before us seeking nullification of the challenged Writ. On 24 April 1989, we issued a Temporary Restraining Order enjoining the implementation of the Injunction issued by respondent Court. The Union construed this to mean that "we can now strike," which it superimposed on the Order and widely circulated to entice the Union membership to go on strike. Upon being apprised thereof, in a Resolution of 24 May 1989, we required the parties to "RESTORE the status quo ante declaration of strike" (p. 2,62 Rollo).

In the meantime, however, or on 2 May 1989, the Union went on strike. Apparently, some of the contractual workers of Lipercon and D'Rite had been laid off. The strike adversely affected thirteen (13) of the latter's plants and offices.

On 3 May 1989, the National Conciliation and Mediation Board (NCMB) called the parties to conciliation. The Union stated that it would lift the strike if the thirty (30) Lipercon and D'Rite employees were recalled, and discussion on their other demands, such as wage distortion and appointment of coordinators, were made. Effected eventually was a Memorandum of Agreement between SanMig and the Union that "without prejudice to the outcome of G.R. No. 87700 (this case) and Civil Case No. 57055 (the case below), the laid-off individuals ... shall be recalled effective 8 May 1989 to their former jobs or equivalent positions under the same terms and conditions prior to "lay-off" (Annex 15, SanMig Comment). In turn, the Union would immediately lift the pickets and return to work.

After an exchange of pleadings, this Court, on 12 October 1989, gave due course to the Petition and required the parties to submit their memoranda simultaneously, the last of which was filed on 9 January 1990.

The focal issue for determination is whether or not respondent Court correctly assumed jurisdiction over the present controversy and properly issued the Writ of Preliminary Injunction to the resolution of that question, is the matter of whether, or not the case at bar involves, or is in connection with, or relates to a labor dispute. An affirmative answer would bring the case within the original and exclusive jurisdiction of labor tribunals to the exclusion of the regular Courts.

Petitioners take the position that 'it is beyond dispute that the controversy in the court a quo involves or arose out of a labor dispute and is directly connected or interwoven with the cases pending with the NCMB-DOLE, and is thus beyond the ambit of the public respondent's jurisdiction. That the acts complained of (i.e., the mass concerted action of picketing and the reliefs prayed for by the private respondent) are within the competence of labor tribunals, is beyond question" (pp. 6-7, Petitioners' Memo).

On the other hand, SanMig denies the existence of any employer-employee relationship and consequently of any labor dispute between itself and the Union. SanMig submits, in particular, that "respondent Court is vested with jurisdiction and judicial competence to enjoin the specific type of strike staged by petitioner union and its officers herein complained of," for the reasons that:

A. The exclusive bargaining representative of an employer unit cannot strike to compel the employer to hire and thereby create an employment relationship with contractual workers, especially were the contractual workers were recognized by the union, under the governing collective bargaining agreement, as excluded from, and therefore strangers to, the bargaining unit.

B. A strike is a coercive economic weapon granted the bargaining representative only in the event of a deadlock in a labor dispute over 'wages, hours of work and all other and of the employment' of the employees in the unit. The union leaders cannot instigate a strike to compel the employer, especially on the eve of certification elections, to hire strangers or workers outside the unit, in the hope the latter will help re-elect them.

C. Civil courts have the jurisdiction to enjoin the above because this specie of strike does not arise out of a labor dispute, is an abuse of right, and violates the employer's constitutional liberty to hire or not to hire. (SanMig's Memorandum, pp. 475-476, Rollo).

We find the Petition of a meritorious character.

A "labor dispute" as defined in Article 212 (1) of the Labor Code includes "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."

While it is SanMig's submission that no employer-employee relationship exists between itself, on the one hand, and the contractual workers of Lipercon and D'Rite on the other, a labor dispute can nevertheless exist "regardless of whether the disputants stand in the proximate relationship of employer and employee" (Article 212 [1], Labor Code, supra) provided the controversy concerns, among others, the terms and conditions of employment or a "change" or "arrangement" thereof (ibid). Put differently, and as defined by law, the existence of a labor dispute is not negative by the fact that the plaintiffs and defendants do not stand in the proximate relation of employer and employee.

That a labor dispute, as defined by the law, does exist herein is evident. At bottom, what the Union seeks is to regularize the status of the employees contracted by Lipercon and D'Rite in effect, that they be absorbed into the working unit of SanMig. This matter definitely dwells on the working relationship between said employees vis-a-vis SanMig. Terms, tenure and conditions of their employment and the arrangement of those terms are thus involved bringing the matter within the purview of a labor dispute. Further, the Union also seeks to represent those workers, who have signed up for Union membership, for the purpose of collective bargaining. SanMig, for its part, resists that Union demand on the ground that there is no employer-employee relationship between it and those workers and because the demand violates the terms of their CBA. Obvious then is that representation and association, for the purpose of negotiating the conditions of employment are also involved. In fact, the injunction sought by SanMig was precisely also to prevent such representation. Again, the matter of representation falls within the scope of a labor dispute. Neither can it be denied that the controversy below is directly connected with the labor dispute already taken cognizance of by the NCMB-DOLE (NCMB-NCR- NS-01- 021-89; NCMB NCR NS-01-093-83).

Whether or not the Union demands are valid; whether or not SanMig's contracts with Lipercon and D'Rite constitute "labor-only" contracting and, therefore, a regular employer-employee relationship may, in fact, be said to exist; whether or not the Union can lawfully represent the workers of Lipercon and D'Rite in their demands against SanMig in the light of the existing CBA; whether or not the notice of strike was valid and the strike itself legal when it was allegedly instigated to compel the employer to hire strangers outside the working unit; — those are issues the resolution of which call for the application of labor laws, and SanMig's cause's of action in the Court below are inextricably linked with those issues.

The precedent in Layno vs. de la Cruz (G.R. No. L-29636, 30 April 1965, 13 SCRA 738) relied upon by SanMig is not controlling as in that case there was no controversy over terms, tenure or conditions, of employment or the representation of employees that called for the application of labor laws. In that case, what the petitioning union demanded was not a change in working terms and conditions, or the representation of the employees, but that its members be hired as stevedores in the place of the members of a rival union, which petitioners wanted discharged notwithstanding the existing contract of the arrastre company with the latter union. Hence, the ruling therein, on the basis of those facts unique to that case, that such a demand could hardly be considered a labor dispute.

As the case is indisputably linked with a labor dispute, jurisdiction belongs to the labor tribunals. As explicitly provided for in Article 217 of the Labor Code, prior to its amendment by R.A. No. 6715 on 21 March 1989, since the suit below was instituted on 6 March 1989, Labor Arbiters have original and exclusive jurisdiction to hear and decide the following cases involving all workers including "1. unfair

labor practice cases; 2. those that workers may file involving wages, hours of work and other terms and conditions of employment; ... and 5. cases arising from any violation of Article 265 of this Code, including questions involving the legality of striker and lockouts. ..." Article 217 lays down the plain command of the law.

The claim of SanMig that the action below is for damages under Articles 19, 20 and 21 of the Civil Code would not suffice to keep the case within the jurisdictional boundaries of regular Courts. That claim for damages is interwoven with a labor dispute existing between the parties and would have to be ventilated before the administrative machinery established for the expeditious settlement of those disputes. To allow the action filed below to prosper would bring about "split jurisdiction" which is obnoxious to the orderly administration of justice (Philippine Communications, Electronics and Electricity Workers Federation vs. Hon. Nolasco, L-24984, 29 July 1968, 24 SCRA 321).

We recognize the proprietary right of SanMig to exercise an inherent management prerogative and its best business judgment to determine whether it should contract out the performance of some of its work to independent contractors. However, the rights of all workers to self-organization, collective bargaining and negotiations, and peaceful concerted activities, including the right to strike in accordance with law (Section 3, Article XIII, 1987 Constitution) equally call for recognition and protection. Those contending interests must be placed in proper perspective and equilibrium.

WHEREFORE, the Writ of certiorari is GRANTED and the Orders of respondent Judge of 25 March 1989 and 29 March 1989 are SET ASIDE. The Writ of Prohibition is GRANTED and respondent Judge is enjoined from taking any further action in Civil Case No. 57055 except for the purpose of dismissing it. The status quo ante declaration of strike ordered by the Court on 24 May 1989 shall be observed pending the proceedings in the National Conciliation Mediation Board-Department of Labor and Employment, docketed as NCMB-NCR-NS-01-02189 and NCMB-NCR-NS-01-093-83. No costs. SO ORDERED.