G.R. No.

87700 June 13, 1990 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
SAN MIGUEL CORPORATION EMPLOYEES UNION-PTGWO, DANIEL S.L.
SanMig. There was to be no employer-employee relation between the contractors
BORBON II, HERMINIA REYES, MARCELA PURIFICACION, ET
and/or its workers, on the one hand, and SanMig on the other.
AL., petitioners,
vs. Petitioner San Miguel Corporation Employees Union-PTWGO (the Union, for brevity)
HON. JESUS G. BERSAMIRA, IN HIS CAPACITY AS PRESIDING JUDGE OF is the duly authorized representative of the monthly paid rank-and-file employees of
BRANCH 166, RTC, PASIG, and SAN MIGUEL CORPORATION, respondents. 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
Romeo C. Lagman for petitioners.
their CBA specifically provides that "temporary, probationary, or contract employees
Jardeleza, Sobrevinas, Diaz, Mayudini & Bodegon for respondents. and workers are excluded from the bargaining unit and, therefore, outside the scope
of this Agreement."

MELENCIO-HERRERA, J.: 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
Respondent Judge of the Regional Trial Court of Pasig, Branch 166, is taken to task sought the regularization of their employment with SMC. The Union alleged that this
by petitioners in this special civil action for certiorari and Prohibition for having group of employees, while appearing to be contractual workers supposedly
issued the challenged Writ of Preliminary Injunction on 29 March 1989 in Civil Case independent contractors, have been continuously working for SanMig for a period
No. 57055 of his Court entitled "San Miguel Corporation vs. SMCEU-PTGWO, et als." ranging from six (6) months to fifteen (15) years and that their work is neither
Petitioners' plea is that said Writ was issued without or in excess of jurisdiction and casual nor seasonal as they are performing work or activities necessary or desirable
with grave abuse of discretion, a labor dispute being involved. Private respondent in the usual business or trade of SanMig. Thus, it was contended that there exists a
San Miguel Corporation (SanMig. for short), for its part, defends the Writ on the "labor-only" contracting situation. It was then demanded that the employment status
ground of absence of any employer-employee relationship between it and the of these workers be regularized.
contractual workers employed by the companies Lipercon Services, Inc. (Lipercon) On 12 January 1989 on the ground that it had failed to receive any favorable
and D'Rite Service Enterprises (D'Rite), besides the fact that the Union is bereft of response from SanMig, the Union filed a notice of strike for unfair labor practice,
personality to represent said workers for purposes of collective bargaining. The CBA violations, and union busting (Annex D, Petition).
Solicitor General agrees with the position of SanMig.
On 30 January 1989, the Union again filed a second notice of strike for unfair labor
The antecedents of the controversy reveal that: practice (Annex F, Petition).
Sometime in 1983 and 1984, SanMig entered into contracts for merchandising As in the first notice of strike. Conciliatory meetings were held on the second notice.
services with Lipercon and D'Rite (Annexes K and I, SanMig's Comment, Subsequently, the two (2) notices of strike were consolidated and several
respectively). These companies are independent contractors duly licensed by the conciliation conferences were held to settle the dispute before the National
Department of Labor and Employment (DOLE). SanMig entered into those contracts Conciliation and Mediation Board (NCMB) of DOLE (Annex G, Petition).
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
Beginning 14 February 1989 until 2 March 1989, series of pickets were staged by Respondent Court found the Complaint sufficient in form and substance and issued a
Lipercon and D'Rite workers in various SMC plants and offices. Temporary Restraining Order for the purpose of maintaining the status quo, and set
the application for Injunction for hearing.
On 6 March 1989, SMC filed a verified Complaint for Injunction and Damages before
respondent Court to enjoin the Union from: 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,
a. representing and/or acting for and in behalf of the employees of
which motion was opposed by SanMig. That Motion was denied by respondent Judge
LIPERCON and/or D'RITE for the purposes of collective bargaining;
in an Order dated 11 April 1989.
b. calling for and holding a strike vote, to compel plaintiff to hire the
After several hearings on SanMig's application for injunctive relief, where the parties
employees or workers of LIPERCON and D'RITE;
presented both testimonial and documentary evidence on 25 March 1989,
c. inciting, instigating and/or inducing the employees or workers of respondent Court issued the questioned Order (Annex A, Petition) granting the
LIPERCON and D'RITE to demonstrate and/or picket at the plants and application and enjoining the Union from Committing the acts complained of, supra.
offices of plaintiff within the bargaining unit referred to in the CBA,...; Accordingly, on 29 March 1989, respondent Court issued the corresponding Writ of
d. staging a strike to compel plaintiff to hire the employees or workers Preliminary Injunction after SanMig had posted the required bond of P100,000.00 to
of LIPERCON and D'RITE; answer for whatever damages petitioners may sustain by reason thereof.

e. using the employees or workers of LIPERCON AND D'RITE to man In issuing the Injunction, respondent Court rationalized:
the strike area and/or picket lines and/or barricades which the The absence of employer-employee relationship negates the existence
defendants may set up at the plants and offices of plaintiff within the of labor dispute. Verily, this court has jurisdiction to take cognizance
bargaining unit referred to in the CBA ...; of plaintiff's grievance.
f. intimidating, threatening with bodily harm and/or molesting the The evidence so far presented indicates that plaintiff has contracts for
other employees and/or contract workers of plaintiff, as well as those services with Lipercon and D'Rite. The application and contract for
persons lawfully transacting business with plaintiff at the work places employment of the defendants' witnesses are either with Lipercon or
within the bargaining unit referred to in the CBA, ..., to compel D'Rite. What could be discerned is that there is no employer-employee
plaintiff to hire the employees or workers of LIPERCON and D'RITE; relationship between plaintiff and the contractual workers employed
g. blocking, preventing, prohibiting, obstructing and/or impeding the by Lipercon and D'Rite. This, however, does not mean that a final
free ingress to, and egress from, the work places within the determination regarding the question of the existence of employer-
bargaining unit referred to in the CBA .., to compel plaintiff to hire the employee relationship has already been made. To finally resolve this
employees or workers of LIPERCON and D'RITE; dispute, the court must extensively consider and delve into the
manner of selection and engagement of the putative employee; the
h. preventing and/or disrupting the peaceful and normal operation of mode of payment of wages; the presence or absence of a power of
plaintiff at the work places within the bargaining unit referred to in dismissal; and the Presence or absence of a power to control the
the CBA, Annex 'C' hereof, to compel plaintiff to hire the employees or putative employee's conduct. This necessitates a full-blown trial. If the
workers of LIPERCON and D'RITE. (Annex H, Petition)
 acts complained of are not restrained, plaintiff would, undoubtedly, Preliminary Injunction to the resolution of that question, is the matter of whether, or
suffer irreparable damages. Upon the other hand, a writ of injunction not the case at bar involves, or is in connection with, or relates to a labor dispute.
does not necessarily expose defendants to irreparable damages. An affirmative answer would bring the case within the original and exclusive
jurisdiction of labor tribunals to the exclusion of the regular Courts.
Evidently, plaintiff has established its right to the relief demanded. (p.
21, Rollo) 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
Anchored on grave abuse of discretion, petitioners are now before us seeking
interwoven with the cases pending with the NCMB-DOLE, and is thus beyond the
nullification of the challenged Writ. On 24 April 1989, we issued a Temporary
ambit of the public respondent's jurisdiction. That the acts complained of (i.e., the
Restraining Order enjoining the implementation of the Injunction issued by
mass concerted action of picketing and the reliefs prayed for by the private
respondent Court. The Union construed this to mean that "we can now strike," which
respondent) are within the competence of labor tribunals, is beyond question" (pp.
it superimposed on the Order and widely circulated to entice the Union membership
6-7, Petitioners' Memo).
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 On the other hand, SanMig denies the existence of any employer-employee
Rollo). relationship and consequently of any labor dispute between itself and the Union.
SanMig submits, in particular, that "respondent Court is vested with jurisdiction and
In the meantime, however, or on 2 May 1989, the Union went on strike. Apparently,
judicial competence to enjoin the specific type of strike staged by petitioner union
some of the contractual workers of Lipercon and D'Rite had been laid off. The strike
and its officers herein complained of," for the reasons that:
adversely affected thirteen (13) of the latter's plants and offices.
A. The exclusive bargaining representative of an employer unit cannot
On 3 May 1989, the National Conciliation and Mediation Board (NCMB) called the
strike to compel the employer to hire and thereby create an
parties to conciliation. The Union stated that it would lift the strike if the thirty (30)
employment relationship with contractual workers, especially were the
Lipercon and D'Rite employees were recalled, and discussion on their other
contractual workers were recognized by the union, under the
demands, such as wage distortion and appointment of coordinators, were made.
governing collective bargaining agreement, as excluded from, and
Effected eventually was a Memorandum of Agreement between SanMig and the
therefore strangers to, the bargaining unit.
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 B. A strike is a coercive economic weapon granted the bargaining
effective 8 May 1989 to their former jobs or equivalent positions under the same representative only in the event of a deadlock in a labor dispute over
terms and conditions prior to "lay-off" (Annex 15, SanMig Comment). In turn, the 'wages, hours of work and all other and of the employment' of the
Union would immediately lift the pickets and return to work. employees in the unit. The union leaders cannot instigate a strike to
compel the employer, especially on the eve of certification elections,
After an exchange of pleadings, this Court, on 12 October 1989, gave due course to
to hire strangers or workers outside the unit, in the hope the latter
the Petition and required the parties to submit their memoranda simultaneously, the
will help re-elect them.
last of which was filed on 9 January 1990.
C. Civil courts have the jurisdiction to enjoin the above because this
The focal issue for determination is whether or not respondent Court correctly
specie of strike does not arise out of a labor dispute, is an abuse of
assumed jurisdiction over the present controversy and properly issued the Writ of
 right, and violates the employer's constitutional liberty to hire or not with the labor dispute already taken cognizance of by the NCMB-DOLE (NCMB-NCR-
to hire. (SanMig's Memorandum, pp. 475-476, Rollo). NS-01- 021-89; NCMB NCR NS-01-093-83).

We find the Petition of a meritorious character. 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
A "labor dispute" as defined in Article 212 (1) of the Labor Code includes "any
employer-employee relationship may, in fact, be said to exist; whether or not the
controversy or matter concerning terms and conditions of employment or the
Union can lawfully represent the workers of Lipercon and D'Rite in their demands
association or representation of persons in negotiating, fixing, maintaining,
against SanMig in the light of the existing CBA; whether or not the notice of strike
changing, or arranging the terms and conditions of employment, regardless of
was valid and the strike itself legal when it was allegedly instigated to compel the
whether the disputants stand in the proximate relation of employer and employee."
employer to hire strangers outside the working unit; those are issues the
While it is SanMig's submission that no employer-employee relationship exists resolution of which call for the application of labor laws, and SanMig's cause's of
between itself, on the one hand, and the contractual workers of Lipercon and D'Rite action in the Court below are inextricably linked with those issues.
on the other, a labor dispute can nevertheless exist "regardless of whether the
The precedent in Layno vs. de la Cruz (G.R. No. L-29636, 30 April 1965, 13 SCRA
disputants stand in the proximate relationship of employer and employee" (Article
738) relied upon by SanMig is not controlling as in that case there was no
212 [1], Labor Code, supra) provided the controversy concerns, among others, the
controversy over terms, tenure or conditions, of employment or the representation
terms and conditions of employment or a "change" or "arrangement" thereof ( ibid).
of employees that called for the application of labor laws. In that case, what the
Put differently, and as defined by law, the existence of a labor dispute is not
petitioning union demanded was not a change in working terms and conditions, or
negative by the fact that the plaintiffs and defendants do not stand in the proximate
the representation of the employees, but that its members be hired as stevedores in
relation of employer and employee.
the place of the members of a rival union, which petitioners wanted discharged
That a labor dispute, as defined by the law, does exist herein is evident. At bottom, notwithstanding the existing contract of the arrastre company with the latter union.
what the Union seeks is to regularize the status of the employees contracted by Hence, the ruling therein, on the basis of those facts unique to that case, that such a
Lipercon and D'Rite in effect, that they be absorbed into the working unit of SanMig. demand could hardly be considered a labor dispute.
This matter definitely dwells on the working relationship between said employees
As the case is indisputably linked with a labor dispute, jurisdiction belongs to the
vis-a-vis SanMig. Terms, tenure and conditions of their employment and the
labor tribunals. As explicitly provided for in Article 217 of the Labor Code, prior to its
arrangement of those terms are thus involved bringing the matter within the purview
amendment by R.A. No. 6715 on 21 March 1989, since the suit below was instituted
of a labor dispute. Further, the Union also seeks to represent those workers, who
on 6 March 1989, Labor Arbiters have original and exclusive jurisdiction to hear and
have signed up for Union membership, for the purpose of collective bargaining.
decide the following cases involving all workers including "1. unfair labor practice
SanMig, for its part, resists that Union demand on the ground that there is no
cases; 2. those that workers may file involving wages, hours of work and other
employer-employee relationship between it and those workers and because the
terms and conditions of employment; ... and 5. cases arising from any violation of
demand violates the terms of their CBA. Obvious then is that representation and
Article 265 of this Code, including questions involving the legality of striker and
association, for the purpose of negotiating the conditions of employment are also
lockouts. ..." Article 217 lays down the plain command of the law.
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 The claim of SanMig that the action below is for damages under Articles 19, 20 and
dispute. Neither can it be denied that the controversy below is directly connected 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.
G.R. No. 172013 October 2, 2009 In a letter dated July 22, 2003,4 petitioners and several female cabin crews
manifested that the aforementioned CBA provision on compulsory retirement is
PATRICIA HALAGUEA, MA. ANGELITA L. PULIDO, MA. TERESITA P.
discriminatory, and demanded for an equal treatment with their male counterparts.
SANTIAGO, MARIANNE V. KATINDIG, BERNADETTE A. CABALQUINTO,
This demand was reiterated in a letter5 by petitioners' counsel addressed to
LORNA B. TUGAS, MARY CHRISTINE A. VILLARETE, CYNTHIA A.
respondent demanding the removal of gender discrimination provisions in the
STEHMEIER, ROSE ANNA G. VICTA, NOEMI R. CRESENCIO, and other flight
coming re-negotiations of the PAL-FASAP CBA.
attendants of PHILIPPINE AIRLINES, Petitioners,
vs. On July 12, 2004, Robert D. Anduiza, President of FASAP submitted their 2004-2005
PHILIPPINE AIRLINES INCORPORATED, Respondent. CBA proposals6 and manifested their willingness to commence the collective
bargaining negotiations between the management and the association, at the
DECISION
soonest possible time.
PERALTA, J.:
On July 29, 2004, petitioners filed a Special Civil Action for Declaratory Relief with
Before this Court is a petition for review on certiorari under Rule 45 of the Rules of Prayer for the Issuance of Temporary Restraining Order and Writ of Preliminary
Court seeking to annul and set aside the Decision1 and the Resolution2 of the Court Injunction7 with the Regional Trial Court (RTC) of Makati City, Branch 147, docketed
of Appeals (CA) in CA-G.R. SP. No. 86813. as Civil Case No. 04-886, against respondent for the invalidity of Section 144, Part A
Petitioners were employed as female flight attendants of respondent Philippine of the PAL-FASAP CBA. The RTC set a hearing on petitioners' application for a TRO
Airlines (PAL) on different dates prior to November 22, 1996. They are members of and, thereafter, required the parties to submit their respective memoranda.
the Flight Attendants and Stewards Association of the Philippines (FASAP), a labor On August 9, 2004, the RTC issued an Order8 upholding its jurisdiction over the
organization certified as the sole and exclusive certified as the sole and exclusive present case. The RTC reasoned that:
bargaining representative of the flight attendants, flight stewards and pursers of
In the instant case, the thrust of the Petition is Sec. 144 of the subject CBA which is
respondent.
allegedly discriminatory as it discriminates against female flight attendants, in
On July 11, 2001, respondent and FASAP entered into a Collective Bargaining violation of the Constitution, the Labor Code, and the CEDAW. The allegations in the
Agreement3 incorporating the terms and conditions of their agreement for the years Petition do not make out a labor dispute arising from employer-employee
2000 to 2005, hereinafter referred to as PAL-FASAP CBA. relationship as none is shown to exist. This case is not directed specifically against
Section 144, Part A of the PAL-FASAP CBA, provides that: respondent arising from any act of the latter, nor does it involve a claim against the
respondent. Rather, this case seeks a declaration of the nullity of the questioned
A. For the Cabin Attendants hired before 22 November 1996: provision of the CBA, which is within the Court's competence, with the allegations in
xxxx the Petition constituting the bases for such relief sought.

3. Compulsory Retirement The RTC issued a TRO on August 10, 2004,9 enjoining the respondent for
implementing Section 144, Part A of the PAL-FASAP CBA.
Subject to the grooming standards provisions of this Agreement, compulsory
retirement shall be fifty-five (55) for females and sixty (60) for males. x x x. The respondent filed an omnibus motion10 seeking reconsideration of the order
overruling its objection to the jurisdiction of the RTC the lifting of the TRO. It further
prayed that the (1) petitioners' application for the issuance of a writ of preliminary Petitioners submit that the RTC has jurisdiction in all civil actions in which the
injunction be denied; and (2) the petition be dismissed or the proceedings in this subject of the litigation is incapable of pecuniary estimation and in all cases not
case be suspended. within the exclusive jurisdiction of any court, tribunal, person or body exercising
judicial or quasi-judicial functions. The RTC has the power to adjudicate all
On September 27, 2004, the RTC issued an Order11 directing the issuance of a writ
controversies except those expressly witheld from the plenary powers of the court.
of preliminary injunction enjoining the respondent or any of its agents and
Accordingly, it has the power to decide issues of constitutionality or legality of the
representatives from further implementing Sec. 144, Part A of the PAL-FASAP CBA
provisions of Section 144, Part A of the PAL-FASAP CBA. As the issue involved is
pending the resolution of the case.
constitutional in character, the labor arbiter or the National Labor Relations
Aggrieved, respondent, on October 8, 2004, filed a Petition for Certiorari and Commission (NLRC) has no jurisdiction over the case and, thus, the petitioners pray
Prohibition with Prayer for a Temporary Restraining Order and Writ of Preliminary that judgment be rendered on the merits declaring Section 144, Part A of the PAL-
Injunction12 with the Court of Appeals (CA) praying that the order of the RTC, which FASAP CBA null and void.
denied its objection to its jurisdiction, be annuled and set aside for having been
Respondent, on the other hand, alleges that the labor tribunals have jurisdiction
issued without and/or with grave abuse of discretion amounting to lack of
over the present case, as the controversy partakes of a labor dispute. The dispute
jurisdiction.
concerns the terms and conditions of petitioners' employment in PAL, specifically
The CA rendered a Decision, dated August 31, 2005, granting the respondent's their retirement age. The RTC has no jurisdiction over the subject matter of
petition, and ruled that: petitioners' petition for declaratory relief because the Voluntary Arbitrator or panel of
WHEREFORE, the respondent court is by us declared to have NO JURISDICTION Voluntary Arbitrators have original and exclusive jurisdiction to hear and decide all
OVER THE CASE BELOW and, consequently, all the proceedings, orders and unresolved grievances arising from the interpretation or implementation of the CBA.
processes it has so far issued therein are ANNULED and SET ASIDE. Respondent Regular courts have no power to set and fix the terms and conditions of
court is ordered to DISMISS its Civil Case No. 04-886. employment. Finally, respondent alleged that petitioners' prayer before this Court to
resolve their petition for declaratory relief on the merits is procedurally improper and
SO ORDERED. baseless.
Petitioner filed a motion for reconsideration,13 which was denied by the CA in its The petition is meritorious.
Resolution dated March 7, 2006.
Jurisdiction of the court is determined on the basis of the material allegations of the
Hence, the instant petition assigning the following error: complaint and the character of the relief prayed for irrespective of whether plaintiff
THE COURT OF APPEALS' CONCLUSION THAT THE SUBJECT MATTER IS A LABOR is entitled to such relief.14
DISPUTE OR GRIEVANCE IS CONTRARY TO LAW AND JURISPRUDENCE. In the case at bar, the allegations in the petition for declaratory relief plainly show
The main issue in this case is whether the RTC has jurisdiction over the petitioners' that petitioners' cause of action is the annulment of Section 144, Part A of the PAL-
action challenging the legality or constitutionality of the provisions on the FASAP CBA. The pertinent portion of the petition recites:
compulsory retirement age contained in the CBA between respondent PAL and CAUSE OF ACTION
FASAP.
24. Petitioners have the constitutional right to fundamental equality with men 37. For being patently unconstitutional and unlawful, Section 114, Part A of
under Section 14, Article II, 1987 of the Constitution and, within the specific the PAL-FASAP 2000-2005 CBA must be declared invalid and stricken down to
context of this case, with the male cabin attendants of Philippine Airlines. the extent that it discriminates against petitioner.

26. Petitioners have the statutory right to equal work and employment 38. Accordingly, consistent with the constitutional and statutory guarantee of
opportunities with men under Article 3, Presidential Decree No. 442, The equality between men and women, Petitioners should be adjudged and
Labor Code and, within the specific context of this case, with the male cabin declared entitled, like their male counterparts, to work until they are sixty
attendants of Philippine Airlines. (60) years old.

27. It is unlawful, even criminal, for an employer to discriminate against PRAYER

women employees with respect to terms and conditions of employment solely
WHEREFORE, it is most respectfully prayed that the Honorable Court:
on account of their sex under Article 135 of the Labor Code as amended by
Republic Act No. 6725 or the Act Strengthening Prohibition on Discrimination c. after trial on the merits:
Against Women. (I) declare Section 114, Part A of the PAL-FASAP 2000-2005 CBA INVALID, NULL and
28. This discrimination against Petitioners is likewise against the Convention VOID to the extent that it discriminates against Petitioners; x x x x
on the Elimination of All Forms of Discrimination Against Women (hereafter, From the petitioners' allegations and relief prayed for in its petition, it is clear that
"CEDAW"), a multilateral convention that the Philippines ratified in 1981. The the issue raised is whether Section 144, Part A of the PAL-FASAP CBA is unlawful
Government and its agents, including our courts, not only must condemn all and unconstitutional. Here, the petitioners' primary relief in Civil Case No. 04-886 is
forms of discrimination against women, but must also implement measures the annulment of Section 144, Part A of the PAL-FASAP CBA, which allegedly
towards its elimination. discriminates against them for being female flight attendants. The subject of
29. This case is a matter of public interest not only because of Philippine litigation is incapable of pecuniary estimation, exclusively cognizable by the RTC,
Airlines' violation of the Constitution and existing laws, but also because it pursuant to Section 19 (1) of Batas Pambansa Blg. 129, as amended.15 Being an
highlights the fact that twenty-three years after the Philippine Senate ratified ordinary civil action, the same is beyond the jurisdiction of labor tribunals.
the CEDAW, discrimination against women continues. The said issue cannot be resolved solely by applying the Labor Code. Rather, it
31. Section 114, Part A of the PAL-FASAP 2000-20005 CBA on compulsory requires the application of the Constitution, labor statutes, law on contracts and the
retirement from service is invidiously discriminatory against and manifestly Convention on the Elimination of All Forms of Discrimination Against Women, 16 and
prejudicial to Petitioners because, they are compelled to retire at a lower age the power to apply and interpret the constitution and CEDAW is within the
(fifty-five (55) relative to their male counterparts (sixty (60). jurisdiction of trial courts, a court of general jurisdiction. In Georg Grotjahn GMBH &
Co. v. Isnani,17 this Court held that not every dispute between an employer and
33. There is no reasonable, much less lawful, basis for Philippine Airlines to
employee involves matters that only labor arbiters and the NLRC can resolve in the
distinguish, differentiate or classify cabin attendants on the basis of sex and
exercise of their adjudicatory or quasi-judicial powers. The jurisdiction of labor
thereby arbitrarily set a lower compulsory retirement age of 55 for Petitioners
arbiters and the NLRC under Article 217 of the Labor Code is limited to disputes
for the sole reason that they are women.
arising from an employer-employee relationship which can only be resolved by
reference to the Labor Code, other labor statutes, or their collective bargaining determination of the circumstances of the execution of the contracts. But the
agreement. resolution of the validity or voidness of the contracts remains a legal or judicial
question as it requires the exercise of judicial function. It requires the ascertainment
Not every controversy or money claim by an employee against the employer or vice-
of what laws are applicable to the dispute, the interpretation and application of
versa is within the exclusive jurisdiction of the labor arbiter. Actions between
those laws, and the rendering of a judgment based thereon. Clearly, the dispute is
employees and employer where the employer-employee relationship is merely
not a mining conflict. It is essentially judicial. The complaint was not merely for the
incidental and the cause of action precedes from a different source of obligation is
determination of rights under the mining contracts since the very validity of those
within the exclusive jurisdiction of the regular court.18 Here, the employer-employee
contracts is put in issue.
relationship between the parties is merely incidental and the cause of action
ultimately arose from different sources of obligation, i.e., the Constitution and In Saura v. Saura, Jr.,21 this Court emphasized the primacy of the regular court's
CEDAW. judicial power enshrined in the Constitution that is true that the trend is towards
vesting administrative bodies like the SEC with the power to adjudicate matters
Thus, where the principal relief sought is to be resolved not by reference to the
coming under their particular specialization, to insure a more knowledgeable solution
Labor Code or other labor relations statute or a collective bargaining agreement but
of the problems submitted to them. This would also relieve the regular courts of a
by the general civil law, the jurisdiction over the dispute belongs to the regular
substantial number of cases that would otherwise swell their already clogged
courts of justice and not to the labor arbiter and the NLRC. In such situations,
dockets. But as expedient as this policy may be, it should not deprive the
resolution of the dispute requires expertise, not in labor management relations nor
courts of justice of their power to decide ordinary cases in accordance
in wage structures and other terms and conditions of employment, but rather in the
with the general laws that do not require any particular expertise or
application of the general civil law. Clearly, such claims fall outside the area of
training to interpret and apply. Otherwise, the creeping take-over by the
competence or expertise ordinarily ascribed to labor arbiters and the NLRC and the
administrative agencies of the judicial power vested in the courts would
rationale for granting jurisdiction over such claims to these agencies disappears.19
render the judiciary virtually impotent in the discharge of the duties
If We divest the regular courts of jurisdiction over the case, then which tribunal or assigned to it by the Constitution.
forum shall determine the constitutionality or legality of the assailed CBA provision?
To be sure, in Rivera v. Espiritu,22 after Philippine Airlines (PAL) and PAL Employees
This Court holds that the grievance machinery and voluntary arbitrators do not have Association (PALEA) entered into an agreement, which includes the provision to
the power to determine and settle the issues at hand. They have no jurisdiction and suspend the PAL-PALEA CBA for 10 years, several employees questioned its validity
competence to decide constitutional issues relative to the questioned compulsory via a petition for certiorari directly to the Supreme Court. They said that the
retirement age. Their exercise of jurisdiction is futile, as it is like vesting power to suspension was unconstitutional and contrary to public policy. Petitioners submit that
someone who cannot wield it. the suspension was inordinately long, way beyond the maximum statutory life of 5
In Gonzales v. Climax Mining Ltd.,20 this Court affirmed the jurisdiction of courts years for a CBA provided for in Article 253-A of the Labor Code. By agreeing to a 10-
over questions on constitutionality of contracts, as the same involves the exercise of year suspension, PALEA, in effect, abdicated the workers' constitutional right to
judicial power. The Court said: bargain for another CBA at the mandated time.

Whether the case involves void or voidable contracts is still a judicial question. It In that case, this Court denied the petition for certiorari, ruling that there is available
may, in some instances, involve questions of fact especially with regard to the to petitioners a plain, speedy, and adequate remedy in the ordinary course of law.
The Court said that while the petition was denominated as one for certiorari and Applying the same rationale to the case at bar, it cannot be said that the "dispute" is
prohibition, its object was actually the nullification of the PAL-PALEA agreement. As between the union and petitioner company because both have previously agreed
such, petitioners' proper remedy is an ordinary civil action for annulment of contract, upon the provision on "compulsory retirement" as embodied in the CBA. Also, it was
an action which properly falls under the jurisdiction of the regional trial courts. only private respondent on his own who questioned the compulsory retirement. x x
x.
The change in the terms and conditions of employment, should Section 144 of the
CBA be held invalid, is but a necessary and unavoidable consequence of the principal In the same vein, the dispute in the case at bar is not between FASAP and
relief sought, i.e., nullification of the alleged discriminatory provision in the CBA. respondent PAL, who have both previously agreed upon the provision on the
Thus, it does not necessarily follow that a resolution of controversy that would bring compulsory retirement of female flight attendants as embodied in the CBA. The
about a change in the terms and conditions of employment is a labor dispute, dispute is between respondent PAL and several female flight attendants who
cognizable by labor tribunals. It is unfair to preclude petitioners from invoking the questioned the provision on compulsory retirement of female flight attendants. Thus,
trial court's jurisdiction merely because it may eventually result into a change of the applying the principle in the aforementioned case cited, referral to the grievance
terms and conditions of employment. Along that line, the trial court is not asked to machinery and voluntary arbitration would not serve the interest of the petitioners.
set and fix the terms and conditions of employment, but is called upon to determine
Besides, a referral of the case to the grievance machinery and to the voluntary
whether CBA is consistent with the laws.
arbitrator under the CBA would be futile because respondent already implemented
Although the CBA provides for a procedure for the adjustment of grievances, such Section 114, Part A of PAL-FASAP CBA when several of its female flight attendants
referral to the grievance machinery and thereafter to voluntary arbitration would be reached the compulsory retirement age of 55.
inappropriate to the petitioners, because the union and the management have
Further, FASAP, in a letter dated July 12, 2004, addressed to PAL, submitted its
unanimously agreed to the terms of the CBA and their interest is unified.
association's bargaining proposal for the remaining period of 2004-2005 of the PAL-
In Pantranco North Express, Inc., v. NLRC,23 this Court held that: FASAP CBA, which includes the renegotiation of the subject Section 144. However,
FASAP's attempt to change the questioned provision was shallow and superficial, to
x x x Hence, only disputes involving the union and the company shall be referred to
say the least, because it exerted no further efforts to pursue its proposal. When
the grievance machinery or voluntary arbitrators.
petitioners in their individual capacities questioned the legality of the compulsory
In the instant case, both the union and the company are united or have come to an retirement in the CBA before the trial court, there was no showing that FASAP, as
agreement regarding the dismissal of private respondents. No grievance between their representative, endeavored to adjust, settle or negotiate with PAL for the
them exists which could be brought to a grievance machinery. The problem or removal of the difference in compulsory age retirement between its female and male
dispute in the present case is between the union and the company on the one hand flight attendants, particularly those employed before November 22, 1996. Without
and some union and non-union members who were dismissed, on the other hand. FASAP's active participation on behalf of its female flight attendants, the utilization of
The dispute has to be settled before an impartial body. The grievance machinery the grievance machinery or voluntary arbitration would be pointless.
with members designated by the union and the company cannot be expected to be
The trial court in this case is not asked to interpret Section 144, Part A of the PAL-
impartial against the dismissed employees. Due process demands that the dismissed
FASAP CBA. Interpretation, as defined in Black's Law Dictionary, is the art of or
workers grievances be ventilated before an impartial body. x x x .
process of discovering and ascertaining the meaning of a statute, will, contract, or
other written document.24 The provision regarding the compulsory retirement of
flight attendants is not ambiguous and does not require interpretation. Neither is taking cognizance of the case for declaratory relief. When the CA annuled and set
there any question regarding the implementation of the subject CBA provision, aside the RTC's order, petitioners sought relief before this Court through the instant
because the manner of implementing the same is clear in itself. The only controversy petition for review under Rule 45. A perusal of the petition before Us, petitioners
lies in its intrinsic validity. pray for the declaration of the alleged discriminatory provision in the CBA against its
female flight attendants.
Although it is a rule that a contract freely entered between the parties should be
respected, since a contract is the law between the parties, said rule is not absolute. This Court is not persuaded. The rule is settled that pure questions of fact may not
be the proper subject of an appeal by certiorari under Rule 45 of the Revised Rules
In Pakistan International Airlines Corporation v. Ople, 25 this Court held that:
of Court. This mode of appeal is generally limited only to questions of law which
The principle of party autonomy in contracts is not, however, an absolute principle. must be distinctly set forth in the petition. The Supreme Court is not a trier of
The rule in Article 1306, of our Civil Code is that the contracting parties may facts.29
establish such stipulations as they may deem convenient, "provided they are not
The question as to whether said Section 114, Part A of the PAL-FASAP CBA is
contrary to law, morals, good customs, public order or public policy." Thus, counter-
discriminatory or not is a question of fact. This would require the presentation and
balancing the principle of autonomy of contracting parties is the equally general rule
reception of evidence by the parties in order for the trial court to ascertain the facts
that provisions of applicable law, especially provisions relating to matters affected
of the case and whether said provision violates the Constitution, statutes and
with public policy, are deemed written into the contract. Put a little differently, the
treaties. A full-blown trial is necessary, which jurisdiction to hear the same is
governing principle is that parties may not contract away applicable provisions of law
properly lodged with the the RTC. Therefore, a remand of this case to the RTC for
especially peremptory provisions dealing with matters heavily impressed with public
the proper determination of the merits of the petition for declaratory relief is just
interest. The law relating to labor and employment is clearly such an area and
and proper.1avvphi1
parties are not at liberty to insulate themselves and their relationships from the
impact of labor laws and regulations by simply contracting with each other. WHEREFORE, the petition is PARTLY GRANTED. The Decision and Resolution of
the Court of Appeals, dated August 31, 2005 and March 7, 2006, respectively, in CA-
Moreover, the relations between capital and labor are not merely contractual. They
G.R. SP. No. 86813 are REVERSED and SET ASIDE. The Regional Trial Court of
are so impressed with public interest that labor contracts must yield to the common
Makati City, Branch 147 is DIRECTED to continue the proceedings in Civil Case No.
good.x x x 26 The supremacy of the law over contracts is explained by the fact that
04-886 with deliberate dispatch.
labor contracts are not ordinary contracts; these are imbued with public interest and
therefore are subject to the police power of the state.27 It should not be taken to
mean that retirement provisions agreed upon in the CBA are absolutely beyond the
ambit of judicial review and nullification. A CBA, as a labor contract, is not merely
contractual in nature but impressed with public interest. If the retirement provisions
in the CBA run contrary to law, public morals, or public policy, such provisions may
very well be voided.28

Finally, the issue in the petition for certiorari brought before the CA by the
respondent was the alleged exercise of grave abuse of discretion of the RTC in
G.R. No. 196539 October 10, 2012 monthly salary and sales quota. In this regard, Portillo signed another letter
agreement containing a "Goodwill Clause:"
MARIETTA N. PORTILLO, Petitioner,
vs. It remains understood and you agreed that, on the termination of your employment
RUDOLF LIETZ, INC., RUDOLF LIETZ and COURT OF APPEALS Respondents. by act of either you or [Lietz Inc.], and for a period of three (3) years thereafter,
you shall not engage directly or indirectly as employee, manager, proprietor, or
DECISION
solicitor for yourself or others in a similar or competitive business or the same
PEREZ, J.: character of work which you were employed by [Lietz Inc.] to do and perform.
Before us is a petition for certiorari assailing the Resolution 1 dated 14 October 2010 Should you breach this good will clause of this Contract, you shall pay [Lietz Inc.] as
of the Court of Appeals in CA-G.R. SP No. I 065g I which modified its liquidated damages the amount of 100% of your gross compensation over the last
Decision2 dated 31 March 2009, thus allowing the legal compensation or petitioner 12 months, it being agreed that this sum is reasonable and just.5
Marietta N. Portillo's (Portillo) monetary claims against respondent corporation Three (3) years thereafter, on 6 June 2005, Portillo resigned from Lietz Inc. During
Rudolf Lietz, Inc.'s (Lietz Inc.)3 claim for liquidated damages arising from Portillos her exit interview, Portillo declared that she intended to engage in businessa rice
alleged violation of the "Goodwill Clause" in the employment contract executed by dealership, selling rice in wholesale.
the parties.
On 15 June 2005, Lietz Inc. accepted Portillos resignation and reminded her of the
The facts are not in dispute. "Goodwill Clause" in the last letter agreement she had signed. Upon receipt thereof,
In a letter agreement dated 3 May 1991, signed by individual respondent Rudolf Portillo jotted a note thereon that the latest contract she had signed in February
Lietz (Rudolf) and conformed to by Portillo, the latter was hired by the former under 2004 did not contain any "Goodwill Clause" referred to by Lietz Inc. In response
the following terms and conditions: thereto, Lietz Inc. categorically wrote:

A copy of [Lietz Inc.s] work rules and policies on personnel is enclosed and an Please be informed that the standard prescription of prohibiting employees from
inherent part of the terms and conditions of employment. engaging in business or seeking employment with organizations that directly or
indirectly compete against [Lietz Inc.] for three (3) years after resignation remains in
We acknowledge your proposal in your application specifically to the effect that you effect.
will not engage in any other gainful employment by yourself or with any other
company either directly or indirectly without written consent of [Lietz Inc.], and we The documentation you pertain to is an internal memorandum of your salary
hereby accept and henceforth consider your proposal an undertaking on your part, a increase, not an employment contract. The absence of the three-year prohibition
breach of which will render you liable to [Lietz Inc.] for liquidated damages. clause in this document (or any document for that matter) does not cancel the
prohibition itself. We did not, have not, and will not issue any cancellation of such in
If you are in agreement with these terms and conditions of employment, please the foreseeable future[.] [T]hus[,] regretfully, it is erroneous of you to believe
signify your conformity below.4 otherwise.6
On her tenth (10th) year with Lietz Inc., specifically on 1 February 2002, Portillo was In a subsequent letter dated 21 June 2005, Lietz Inc. wrote Portillo and supposed
promoted to Sales Representative and received a corresponding increase in basic that the exchange of correspondence between them regarding the "Goodwill Clause"
in the employment contract was a moot exercise since Portillos articulated intention WHEREFORE, considering the foregoing premises, judgment is hereby rendered by
to go into business, selling rice, will not compete with Lietz Inc.s products. us DENYING the petition filed in this case. The Resolution of the National Labor
Relations Commission (NLRC), Second Division, in the labor case docketed as NLRC
Subsequently, Lietz Inc. learned that Portillo had been hired by Ed Keller Philippines,
NCR Case No. 00-09- 08113-2005 [NLRC LAC No. 07-001965-07(5)] is
Limited to head its Pharma Raw Material Department. Ed Keller Limited is
hereby AFFIRMED.9
purportedly a direct competitor of Lietz Inc.
The disposition was disturbed. The Court of Appeals, on motion for reconsideration,
Meanwhile, Portillos demands from Lietz Inc. for the payment of her remaining
modified its previous decision, thus:
salaries and commissions went unheeded. Lietz Inc. gave Portillo the run around, on
the pretext that her salaries and commissions were still being computed. WHEREFORE, in view of the foregoing premises, we hereby MODIFY the decision
promulgated on March 31, 2009 in that, while we uphold the monetary award in
On 14 September 2005, Portillo filed a complaint with the National Labor Relations
favor of the [petitioner] in the aggregate sum of 110,662.16 representing the
Commission (NLRC) for non-payment of 1 months salary, two (2) months
unpaid salary, commission and 13th month pay due to her, we hereby allow legal
commission, 13th month pay, plus moral, exemplary and actual damages and
compensation or set-off of such award of monetary claims by her liability to
attorneys fees.
[respondents] for liquidated damages arising from her violation of the "Goodwill
In its position paper, Lietz Inc. admitted liability for Portillos money claims in the Clause" in her employment contract with them.10
total amount of P110,662.16. However, Lietz Inc. raised the defense of legal
Portillos motion for reconsideration was denied.
compensation: Portillos money claims should be offset against her liability to Lietz
Inc. for liquidated damages in the amount of 869,633.097 for Portillos alleged Hence, this petition for certiorari listing the following acts as grave abuse of
breach of the "Goodwill Clause" in the employment contract when she became discretion of the Court of Appeals:
employed with Ed Keller Philippines, Limited.
THE COURT OF APPEALS ACTED WITH GRAVE ABUSE OF DISCRETION BY EVADING
On 25 May 2007, Labor Arbiter Daniel J. Cajilig granted Portillos complaint: TO RECOGNIZE (sic) THAT THE RESPONDENTS EARLIER PETITION IS FATALLY
DEFECTIVE;
WHEREFORE, judgment is hereby rendered ordering respondents Rudolf Lietz, Inc.
to pay complainant Marietta N. Portillo the amount of Php110,662.16, representing THE COURT OF APPEALS ACTED WITH GRAVE ABUSE OF DISCRETION BY
her salary and commissions, including 13th month pay.8 OVERSTEPPING THE BOUNDS OF APPELLATE JURISDICTION[;]

On appeal by respondents, the NLRC, through its Second Division, affirmed the THE COURT OF APPEALS ACTED WITH GRAVE ABUSE OF DISCRETION BY
ruling of Labor Arbiter Daniel J. Cajilig. On motion for reconsideration, the NLRC MODIFYING ITS PREVIOUS DECISION BASED ON AN ISSUE THAT WAS RAISED
stood pat on its ruling. ONLY ON THE FIRST INSTANCE AS AN APPEAL BUT WAS NEVER AT THE TRIAL
COURT AMOUNTING TO DENIAL OF DUE PROCESS[;]
Expectedly, respondents filed a petition for certiorari before the Court of Appeals,
alleging grave abuse of discretion in the labor tribunals rulings. THE COURT OF APPEALS ACTED WITH GRAVE ABUSE OF DISCRETION BY EVADING
THE POSITIVE DUTY TO UPHOLD THE RELEVANT LAWS[.]11
As earlier adverted to, the appellate court initially affirmed the labor tribunals:
Simply, the issue is whether Portillos money claims for unpaid salaries may be offset
against respondents claim for liquidated damages.
Before anything else, we address the procedural error committed by Portillo, i.e., [Portillos] monetary claims against [respondents] and the latters claim for
filing a petition for certiorari, a special civil action under Rule 65 of the Rules of liquidated damages against the former. Consequently, we should allow legal
Court, instead of a petition for review on certiorari, a mode of appeal, under Rule 45 compensation or set-off to take place. [Respondents and Portillo] are both bound
thereof. On this score alone, the petition should have been dismissed outright. principally and, at the same time, are creditors of each other. [Portillo] is a creditor
of [respondents] in the sum of 110,662.16 in connection with her monetary claims
Section 1, Rule 45 of the Rules of Court expressly provides that a party desiring to
against the latter. At the same time, [respondents] are creditors of [Portillo] insofar
appeal by certiorari from a judgment or final order or resolution of the Court of
as their claims for liquidated damages in the sum of 980,295.2516 against the
Appeals may file a verified petition for review on certiorari. Considering that, in this
latter is concerned.17
case, appeal by certiorari was available to Portillo, that available recourse foreclosed
her right to resort to a special civil action for certiorari, a limited form of review and We are not convinced.
a remedy of last recourse, which lies only where there is no appeal or plain, speedy
Paragraph 4 of Article 217 of the Labor Code appears to have caused the reliance by
and adequate remedy in the ordinary course of law.12
the Court of Appeals on the "causal connection between [Portillos] monetary claims
A petition for review on certiorari under Rule 45 and a petition for certiorari under against [respondents] and the latters claim from liquidated damages against the
Rule 65 are mutually exclusive remedies. Certiorari cannot co-exist with an appeal or former."
any other adequate remedy.13 If a petition for review is available, even prescribed,
Art. 217. Jurisdiction of Labor Arbiters and the Commission. (a) Except as
the nature of the questions of law intended to be raised on appeal is of no
otherwise provided under this code, the Arbiters shall have original and exclusive
consequence. It may well be that those questions of law will treat exclusively of
jurisdiction to hear and decide, within thirty (30) calendar days after the submission
whether or not the judgment or final order was rendered without or in excess of
of the case by the parties for decision without extension, even in the absence of
jurisdiction, or with grave abuse of discretion. This is immaterial. The remedy is
stenographic notes, the following case involving all workers, whether agricultural or
appeal, not certiorari as a special civil action.14
nonagricultural:
Be that as it may, on more than one occasion, to serve the ultimate purpose of all
xxxx
rules of proceduresattaining substantial justice as expeditiously as possible15 we
have accepted procedurally incorrect petitions and decided them on the merits. We 4. Claims for actual, moral, exemplary and other forms of damages arising from the
do the same here. employer-employee relations; (Underscoring supplied)

The Court of Appeals anchors its modified ruling on the ostensible causal connection Evidently, the Court of Appeals is convinced that the claim for liquidated damages
between Portillos money claims and Lietz Inc.s claim for liquidated damages, both emanates from the "Goodwill Clause of the employment contract and, therefore, is a
claims apparently arising from the same employment relations. Thus, did it say: claim for damages arising from the employeremployee relations."

x x x This Court will have to take cognizance of and consider the "Goodwill Clause" As early as Singapore Airlines Limited v. Pao ,18 we established that not all disputes
contained [in] the employment contract signed by and between [respondents and between an employer and his employee(s) fall within the jurisdiction of the labor
Portillo]. There is no gainsaying the fact that such "Goodwill Clause" is part and tribunals. We differentiated between abandonment per se and the manner and
parcel of the employment contract extended to [Portillo], and such clause is not consequent effects of such abandonment and ruled that the first, is a labor case,
contrary to law, morals and public policy. There is thus a causal connection between while the second, is a civil law case.
Upon the facts and issues involved, jurisdiction over the present controversy must be by either capital or labor against the other, and Article 21, which makes a person
held to belong to the civil Courts. While seemingly petitioner's claim for damages liable for damages if he wilfully causes loss or injury to another in a manner that is
arises from employer-employee relations, and the latest amendment to Article 217 of contrary to morals, good customs or public policy, the sanction for which, by way of
the Labor Code under PD No. 1691 and BP Blg. 130 provides that all other claims moral damages, is provided in article 2219, No. 10. [citation omitted]"
arising from employer-employee relationship are cognizable by Labor Arbiters
Stated differently, petitioner seeks protection under the civil laws and
[citation omitted], in essence, petitioner's claim for damages is grounded on the
claims no benefits under the Labor Code. The primary relief sought is for
"wanton failure and refusal" without just cause of private respondent Cruz to report
liquidated damages for breach of a contractual obligation. The other items
for duty despite repeated notices served upon him of the disapproval of his
demanded are not labor benefits demanded by workers generally taken
application for leave of absence without pay. This, coupled with the further
cognizance of in labor disputes, such as payment of wages, overtime
averment that Cruz "maliciously and with bad faith" violated the terms and
compensation or separation pay. The items claimed are the natural
conditions of the conversion training course agreement to the damage of petitioner
consequences flowing from breach of an obligation, intrinsically a civil
removes the present controversy from the coverage of the Labor Code and brings it
dispute.19 (Emphasis supplied)
within the purview of Civil Law.
Subsequent rulings amplified the teaching in Singapore Airlines. The reasonable
Clearly, the complaint was anchored not on the abandonment per se by private
causal connection rule was discussed. Thus, in San Miguel Corporation v. National
respondent Cruz of his jobas the latter was not required in the Complaint to report
Labor Relations Commission,20 we held:
back to workbut on the manner and consequent effects of such abandonment of
work translated in terms of the damages which petitioner had to suffer. While paragraph 3 above refers to "all money claims of workers," it is not necessary
to suppose that the entire universe of money claims that might be asserted by
Squarely in point is the ruling enunciated in the case of Quisaba vs. Sta. Ines Melale
workers against their employers has been absorbed into the original and exclusive
Veneer & Plywood, Inc. [citation omitted], the pertinent portion of which reads:
jurisdiction of Labor Arbiters. In the first place, paragraph 3 should be read not in
"Although the acts complained of seemingly appear to constitute 'matter involving isolation from but rather within the context formed by paragraph 1 (relating to unfair
employee-employer' relations as Quisaba's dismissal was the severance of a pre- labor practices), paragraph 2 (relating to claims concerning terms and conditions of
existing employee-employer relations, his complaint is grounded not on his employment), paragraph 4 (claims relating to household services, a particular
dismissal per se, as in fact he does not ask for reinstatement or backwages, but on species of employer-employee relations), and paragraph 5 (relating to certain
the manner of his dismissal and the consequent effects of such dismissal. activities prohibited to employees or to employers). It is evident that there is a
unifying element which runs through paragraph 1 to 5 and that is, that they all refer
"Civil law consists of that 'mass of precepts that determine or regulate the relations .
to cases or disputes arising out of or in connection with an employer-employee
. . that exist between members of a society for the protection of private interest (1
relationship. This is, in other words, a situation where the rule of noscitur a
Sanchez Roman 3).
sociis may be usefully invoked in clarifying the scope of paragraph 3, and any other
"The 'right' of the respondents to dismiss Quisaba should not be confused with the paragraph of Article 217 of the Labor Code, as amended. We reach the above
manner in which the right was exercised and the effects flowing therefrom. If the conclusion from an examination of the terms themselves of Article 217, as last
dismissal was done anti-socially or oppressively as the complaint alleges, then the amended by B.P. Blg. 227, and even though earlier versions of Article 217 of the
respondents violated Article 1701 of the Civil Code which prohibits acts of oppression Labor Code expressly brought within the jurisdiction of the Labor Arbiters and the
NLRC "cases arising from employer-employee relations, [citation omitted]" which jurisdiction over the controversy belongs to the regular courts. At bottom, we
clause was not expressly carried over, in printer's ink, in Article 217 as it exists considered that the stipulation referred to post-employment relations of the parties.
today. For it cannot be presumed that money claims of workers which do not arise
That the "Goodwill Clause" in this case is likewise a postemployment issue should
out of or in connection with their employer-employee relationship, and which would
brook no argument. There is no dispute as to the cessation of Portillos employment
therefore fall within the general jurisdiction of regular courts of justice, were
with Lietz Inc.23 She simply claims her unpaid salaries and commissions, which Lietz
intended by the legislative authority to be taken away from the jurisdiction of the
Inc. does not contest. At that juncture, Portillo was no longer an employee of Lietz
courts and lodged with Labor Arbiters on an exclusive basis. The Court, therefore,
Inc.24The "Goodwill Clause" or the "Non-Compete Clause" is a contractual
believes and so holds that the "money claims of workers" referred to in
undertaking effective after the cessation of the employment relationship between
paragraph 3 of Article 217 embraces money claims which arise out of or in
the parties. In accordance with jurisprudence, breach of the undertaking is a civil
connection with the employer-employee relationship, or some aspect or
law dispute, not a labor law case.
incident of such relationship. Put a little differently, that money claims of
workers which now fall within the original and exclusive jurisdiction of It is clear, therefore, that while Portillos claim for unpaid salaries is a money claim
Labor Arbiters are those money claims which have some reasonable that arises out of or in connection with an employer-employee relationship, Lietz
causal connection with the employer-employee relationship.21 (Emphasis Inc.s claim against Portillo for violation of the goodwill clause is a money claim
supplied) based on an act done after the cessation of the employment relationship. And, while
the jurisdiction over Portillos claim is vested in the labor arbiter, the jurisdiction over
We thereafter ruled that the "reasonable causal connection with the employer-
Lietz Inc.s claim rests on the regular courts. Thus:
employee relationship" is a requirement not only in employees money claims against
the employer but is, likewise, a condition when the claimant is the employer. As it is, petitioner does not ask for any relief under the Labor Code. It merely seeks
to recover damages based on the parties' contract of employment as redress for
In Dai-Chi Electronics Manufacturing Corporation v. Villarama, Jr. ,22 which reiterated
respondent's breach thereof. Such cause of action is within the realm of Civil Law,
the San Miguel ruling and allied jurisprudence, we pronounced that a non-compete
and jurisdiction over the controversy belongs to the regular courts. More so must
clause, as in the "Goodwill Clause" referred to in the present case, with a stipulation
this be in the present case, what with the reality that the stipulation refers to the
that a violation thereof makes the employee liable to his former employer for
postemployment relations of the parties.
liquidated damages, refers to post-employment relations of the parties.
For sure, a plain and cursory reading of the complaint will readily reveal that the
In Dai-Chi, the trial court dismissed the civil complaint filed by the employer to
subject matter is one of claim for damages arising from a breach of contract, which
recover damages from its employee for the latters breach of his contractual
is within the ambit of the regular court's jurisdiction. [citation omitted]
obligation. We reversed the ruling of the trial court as we found that the employer
did not ask for any relief under the Labor Code but sought to recover damages It is basic that jurisdiction over the subject matter is determined upon the
agreed upon in the contract as redress for its employees breach of contractual allegations made in the complaint, irrespective of whether or not the plaintiff is
obligation to its "damage and prejudice." We iterated that Article 217, paragraph 4 entitled to recover upon the claim asserted therein, which is a matter resolved only
does not automatically cover all disputes between an employer and its employee(s). after and as a result of a trial. Neither can jurisdiction of a court be made to depend
We noted that the cause of action was within the realm of Civil Law, thus, upon the defenses made by a defendant in his answer or motion to dismiss. If such
were the rule, the question of jurisdiction would depend almost entirely upon the employees claim for unpaid wages is without authority to allow the compensation of
defendant.25 [citation omitted] such claims against the post employment claim of the former employer for breach of
a post employment condition. The labor tribunal does not have jurisdiction over the
xxxx
civil case of breach of contract.
Whereas this Court in a number of occasions had applied the jurisdictional provisions
We are aware that in Baez v. Hon. Valdevilla, we mentioned that:
of Article 217 to claims for damages filed by employees [citation omitted], we hold
that by the designating clause "arising from the employer-employee relations" Article Whereas this Court in a number of occasions had applied the jurisdictional provisions
217 should apply with equal force to the claim of an employer for actual damages of Article 217 to claims for damages filed by employees [citation omitted], we hold
against its dismissed employee, where the basis for the claim arises from or is that by the designating clause "arising from the employer-employee relations" Article
necessarily connected with the fact of termination, and should be entered as a 217 should apply with equal force to the claim of an employer for actual damages
counterclaim in the illegal dismissal case.26 against its dismissed employee, where the basis for the claim arises from or is
necessarily connected with the fact of termination, and should be entered as a
xxxx
counterclaim in the illegal dismissal case.28
This is, of course, to distinguish from cases of actions for damages where
While on the surface, Baez supports the decision of the Court of Appeals, the facts
the employer-employee relationship is merely incidental and the cause of
beneath premise an opposite conclusion. There, the salesman-employee obtained
action proceeds from a different source of obligation. Thus, the
from the NLRC a final favorable judgment of illegal dismissal. Afterwards, the
jurisdiction of regular courts was upheld where the damages, claimed for
employer filed with the trial court a complaint for damages for alleged nefarious
were based on tort [citation omitted], malicious prosecution [citation omitted],
activities causing damage to the employer. Explaining further why the claims for
or breach of contract, as when the claimant seeks to recover a debt from a
damages should be entered as a counterclaim in the illegal dismissal case, we said:
former employee [citation omitted] or seeks liquidated damages in
enforcement of a prior employment contract. [citation omitted] Even under Republic Act No. 875 (the Industrial Peace Act, now completely
superseded by the Labor Code), jurisprudence was settled that where the plaintiffs
Neither can we uphold the reasoning of respondent court that because the
cause of action for damages arose out of, or was necessarily intertwined with, an
resolution of the issues presented by the complaint does not entail application of the
alleged unfair labor practice committed by the union, the jurisdiction is exclusively
Labor Code or other labor laws, the dispute is intrinsically civil. Article 217(a) of the
with the (now defunct) Court of Industrial Relations, and the assumption of
Labor Code, as amended, clearly bestows upon the Labor Arbiter original and
jurisdiction of regular courts over the same is a nullity. To allow otherwise would be
exclusive jurisdiction over claims for damages arising from employer-employee
"to sanction split jurisdiction, which is prejudicial to the orderly administration of
relationsin other words, the Labor Arbiter has jurisdiction to award not only the
justice." Thus, even after the enactment of the Labor Code, where the damages
reliefs provided by labor laws, but also damages governed by the Civil
separately claimed by the employer were allegedly incurred as a consequence of
Code.27 (Emphasis supplied)
strike or picketing of the union, such complaint for damages is deeply rooted from
In the case at bar, the difference in the nature of the credits that one has against the labor dispute between the parties, and should be dismissed by ordinary courts
the other, conversely, the nature of the debt one owes another, which difference in for lack of jurisdiction. As held by this Court in National Federation of Labor vs.
turn results in the difference of the forum where the different credits can be Eisma, 127 SCRA 419:
enforced, prevents the application of compensation. Simply, the labor tribunal in an
Certainly, the present Labor Code is even more committed to the view that on policy When, as here, the cause of action is based on a quasi-delict or tort, which has no
grounds, and equally so in the interest of greater promptness in the disposition of reasonable causal connection with any of the claims provided for in Article 217,
labor matters, a court is spared the often onerous task of determining what jurisdiction over the action is with the regular courts. [citation omitted]
essentially is a factual matter, namely, the damages that may be incurred by either As it is, petitioner does not ask for any relief under the Labor Code. It merely seeks to
labor or management as a result of disputes or controversies arising from employer- recover damages based on the parties contract of employment as redress for
employee relations.29 respondents breach thereof. Such cause of action is within the realm of Civil Law, and
Evidently, the ruling of the appellate court is modeled after the basis used jurisdiction over the controversy belongs to the regular courts. More so must this be in
in Baez which is the "intertwined" facts of the claims of the employer and the employee the present case, what with the reality that the stipulation refers to the postemployment
or that the "complaint for damages is deeply rooted from the labor dispute between the relations of the parties.
parties." Thus, did the appellate court say that: For sure, a plain and cursory reading of the complaint will readily reveal that the subject
There is no gainsaying the fact that such "Goodwill Clause" is part and parcel of the matter is one of claim for damages arising from a breach of contract, which is within the
employment contract extended to [Portillo], and such clause is not contrary to law, ambit of the regular courts jurisdiction. [citation omitted]
morals and public policy. There is thus a causal connection between [Portillos] monetary It is basic that jurisdiction over the subject matter is determined upon the allegations
claims against [respondents] and the latters claim for liquidated damages against the made in the complaint, irrespective of whether or not the plaintiff is entitled to recover
former. Consequently, we should allow legal compensation or set-off to take place.30 upon the claim asserted therein, which is a matter resolved only after and as a result of
The Court of Appeals was misguided. Its conclusion was incorrect. a trial. Neither can jurisdiction of a court be made to depend upon the defenses made by
a defendant in his answer or motion to dismiss. If such were the rule, the question of
There is no causal connection between the petitioner employees claim for unpaid wages
jurisdiction would depend almost entirely upon the defendant.32 (Underscoring
and the respondent employers claim for damages for the alleged "Goodwill Clause"
supplied).
violation. Portillos claim for unpaid salaries did not have anything to do with her alleged
violation of the employment contract as, in fact, her separation from employment is not The error of the appellate court in its Resolution of 14 October 2010 is basic. The original
"rooted" in the alleged contractual violation. She resigned from her employment. She decision, the right ruling, should not have been reconsidered.1wphi1
was not dismissed. Portillos entitlement to the unpaid salaries is not even contested. Indeed, the application of compensation in this case is effectively barred by Article 113 of the
Indeed, Lietz Inc.s argument about legal compensation necessarily admits that it owes Labor Code which prohibits wage deductions except in three circumstances:
the money claimed by Portillo.
ART. 113. Wage Deduction. No employer, in his own behalf or in behalf of any person,
The alleged contractual violation did not arise during the existence of the employer- shall make any deduction from wages of his employees, except:
employee relationship. It was a post-employment matter, a post-employment violation.
(a) In cases where the worker is insured with his consent by the employer, and the
Reminders are apt. That is provided by the fairly recent case of Yusen Air and Sea
deduction is to recompense the employer for the amount paid by him as premium on the
Services Phils., Inc. v. Villamor,31 which harked back to the previous rulings on the insurance;
necessity of "reasonable causal connection" between the tortious damage and the
damage arising from the employer-employee relationship. Yusen proceeded to (b) For union dues, in cases where the right of the worker or his union to check-off has been
pronounce that the absence of the connection results in the absence of jurisdiction of recognized by the employer or authorized in writing by the individual worker concerned; and
the labor arbiter. Importantly, such absence of jurisdiction cannot be remedied by raising (c) In cases where the employer is authorized by law or regulations issued by the Secretary
before the labor tribunal the tortious damage as a defense. Thus: of Labor.
WHEREFORE, the petition is GRANTED. The Resolution of the Court of Appeals in CA-G.R. to the aforesaid request, the Union again wrote the Company reiterating its request
SP No. I 06581 dated 14 October 20 I 0 is SET ASIDE. The Decision of the Court of Appeals for collective bargaining negotiations and for the Company to furnish them with its
in CA-G.R. SP No. I 06581 dated 3 I March :2009 is REINSTATED. No costs. counter proposals. Both requests were ignored and remained unacted upon by the
Company.
G.R. No. L-54334 January 22, 1986
Left with no other alternative in its attempt to bring the Company to the bargaining
KIOK LOY, doing business under the name and style SWEDEN ICE CREAM table, the Union, on February 14, 1979, filed a "Notice of Strike", with the Bureau of
PLANT, petitioner, Labor Relations (BLR) on ground of unresolved economic issues in collective
vs. bargaining. 5
NATIONAL LABOR RELATIONS COMMISSION (NLRC) and PAMBANSANG
Conciliation proceedings then followed during the thirty-day statutory cooling-off
KILUSAN NG PAGGAWA (KILUSAN), respondents.
period. But all attempts towards an amicable settlement failed, prompting the
Ablan and Associates for petitioner. Bureau of Labor Relations to certify the case to the National Labor Relations
Commission (NLRC) for compulsory arbitration pursuant to Presidential Decree No.
Abdulcadir T. Ibrahim for private respondent.
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
CUEVAS, J.: to submit their respective position papers as required, the said hearing was
cancelled and reset to another date. Meanwhile, the Union submitted its position
Petition for certiorari to annul the decision 1 of the National Labor Relations paper. The Company did not, and instead requested for a resetting which was
Commission (NLRC) dated July 20, 1979 which found petitioner Sweden Ice Cream granted. The Company was directed anew to submit its financial statements for the
guilty of unfair labor practice for unjustified refusal to bargain, in violation of par. (g) years 1976, 1977, and 1978.
of Article 2492 of the New Labor Code, 3 and declared the draft proposal of the
Union for a collective bargaining agreement as the governing collective bargaining The case was further reset to May 11, 1979 due to the withdrawal of the Company's
agreement between the employees and the management. 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
The pertinent background facts are as follows: request for another postponement allegedly for the purpose of acquainting himself
In a certification election held on October 3, 1978, the Pambansang Kilusang with the case. Meanwhile, the Company submitted its position paper on May 28,
Paggawa (Union for short), a legitimate late labor federation, won and was 1979.
subsequently certified in a resolution dated November 29, 1978 by the Bureau of When the case was called for hearing on June 4, 1979 as scheduled, the Company's
Labor Relations as the sole and exclusive bargaining agent of the rank-and-file representative, Mr. Ching, who was supposed to be examined, failed to appear. Atty.
employees of Sweden Ice Cream Plant (Company for short). The Company's motion Panganiban then requested for another postponement which the labor arbiter
for reconsideration of the said resolution was denied on January 25, 1978. denied. He also ruled that the Company has waived its right to present further
Thereafter, and more specifically on December 7, 1978, the Union furnished 4 the evidence and, therefore, considered the case submitted for resolution.
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
On July 18, 1979, labor arbiter Andres Fidelino submitted its report to the National Collective bargaining which is defined as negotiations towards a collective
Labor Relations Commission. On July 20, 1979, the National Labor Relations agreement,6 is one of the democratic frameworks under the New Labor Code,
Commission rendered its decision, the dispositive portion of which reads as follows: 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
WHEREFORE, the respondent Sweden Ice Cream is hereby declared
employer and the Union and is characterized as a legal obligation. So much so that
guilty of unjustified refusal to bargain, in violation of Section (g)
Article 249, par. (g) of the Labor Code makes it an unfair labor practice for an
Article 248 (now Article 249), of P.D. 442, as amended. Further, the
employer to refuse "to meet and convene promptly and expeditiously in good faith
draft proposal for a collective bargaining agreement (Exh. "E ") hereto
for the purpose of negotiating an agreement with respect to wages, hours of work,
attached and made an integral part of this decision, sent by the Union
and all other terms and conditions of employment including proposals for adjusting
(Private respondent) to the respondent (petitioner herein) and which
any grievance or question arising under such an agreement and executing a contract
is hereby found to be reasonable under the premises, is hereby
incorporating such agreement, if requested by either party.
declared to be the collective agreement which should govern the
relationship between the parties herein. 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
SO ORDERED. (Emphasis supplied)
collective bargaining is set in motion only when the following jurisdictional
Petitioner now comes before Us assailing the aforesaid decision contending that the preconditions are present, namely, (1) possession of the status of majority
National Labor Relations Commission acted without or in excess of its jurisdiction or representation of the employees' representative in accordance with any of the
with grave abuse of discretion amounting to lack of jurisdiction in rendering the means of selection or designation provided for by the Labor Code; (2) proof of
challenged decision. On August 4, 1980, this Court dismissed the petition for lack of majority representation; and (3) a demand to bargain under Article 251, par. (a) of
merit. Upon motion of the petitioner, however, the Resolution of dismissal was the New Labor Code . ... all of which preconditions are undisputedly present in the
reconsidered and the petition was given due course in a Resolution dated April 1, instant case.
1981.
From the over-all conduct of petitioner company in relation to the task of
Petitioner Company now maintains that its right to procedural due process has been negotiation, there can be no doubt that the Union has a valid cause to complain
violated when it was precluded from presenting further evidence in support of its against its (Company's) attitude, the totality of which is indicative of the latter's
stand and when its request for further postponement was denied. Petitioner further disregard of, and failure to live up to, what is enjoined by the Labor Code to
contends that the National Labor Relations Commission's finding of unfair labor bargain in good faith.
practice for refusal to bargain is not supported by law and the evidence considering
We are in total conformity with respondent NLRC's pronouncement that petitioner
that it was only on May 24, 1979 when the Union furnished them with a copy of the
Company is GUILTY of unfair labor practice. It has been indubitably established that
proposed Collective Bargaining Agreement and it was only then that they came to
(1) respondent Union was a duly certified bargaining agent; (2) it made a definite
know of the Union's demands; and finally, that the Collective Bargaining Agreement
request to bargain, accompanied with a copy of the proposed Collective Bargaining
approved and adopted by the National Labor Relations Commission is unreasonable
Agreement, to the Company not only once but twice which were left unanswered
and lacks legal basis.
and unacted upon; and (3) the Company made no counter proposal whatsoever all
The petition lacks merit. Consequently, its dismissal is in order. 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 Court is not prepared to affix its imprimatur to such an illegal scheme and dubious
process, may indicate bad faith and this is specially true where the Union's request maneuvers.
for a counter proposal is left unanswered. 9 Even during the period of compulsory
Neither are WE persuaded by petitioner-company's stand that the Collective
arbitration before the NLRC, petitioner Company's approach and attitude-stalling the
Bargaining Agreement which was approved and adopted by the NLRC is a total
negotiation by a series of postponements, non-appearance at the hearing
nullity for it lacks the company's consent, much less its argument that once the
conducted, and undue delay in submitting its financial statements, lead to no other
Collective Bargaining Agreement is implemented, the Company will face the prospect
conclusion except that it is unwilling to negotiate and reach an agreement with the
of closing down because it has to pay a staggering amount of economic benefits to
Union. Petitioner has not at any instance, evinced good faith or willingness to discuss
the Union that will equal if not exceed its capital. Such a stand and the evidence in
freely and fully the claims and demands set forth by the Union much less justify its
support thereof should have been presented before the Labor Arbiter which is the
opposition thereto. 10
proper forum for the purpose.
The case at bar is not a case of first impression, for in the Herald Delivery Carriers
We agree with the pronouncement that it is not obligatory upon either side of a
Union (PAFLU) vs. Herald Publications 11 the rule had been laid down that "unfair
labor controversy to precipitately accept or agree to the proposals of the other. But
labor practice is committed when it is shown that the respondent employer, after
an erring party should not be tolerated and allowed with impunity to resort to
having been served with a written bargaining proposal by the petitioning Union, did
schemes feigning negotiations by going through empty gestures.13 More so, as in
not even bother to submit an answer or reply to the said proposal This doctrine was
the instant case, where the intervention of the National Labor Relations Commission
reiterated anew in Bradman vs. Court of Industrial Relations 12 wherein it was
was properly sought for after conciliation efforts undertaken by the BLR failed. The
further ruled that "while the law does not compel the parties to reach an agreement,
instant case being a certified one, it must be resolved by the NLRC pursuant to the
it does contemplate that both parties will approach the negotiation with an open
mandate of P.D. 873, as amended, which authorizes the said body to determine the
mind and make a reasonable effort to reach a common ground of agreement
reasonableness of the terms and conditions of employment embodied in any
As a last-ditch attempt to effect a reversal of the decision sought to be reviewed, Collective Bargaining Agreement. To that extent, utmost deference to its findings of
petitioner capitalizes on the issue of due process claiming, that it was denied the reasonableness of any Collective Bargaining Agreement as the governing agreement
right to be heard and present its side when the Labor Arbiter denied the Company's by the employees and management must be accorded due respect by this Court.
motion for further postponement.
WHEREFORE, the instant petition is DISMISSED. The temporary restraining order
Petitioner's aforesaid submittal failed to impress Us. Considering the various issued on August 27, 1980, is LIFTED and SET ASIDE.
postponements granted in its behalf, the claimed denial of due process appeared
No pronouncement as to costs.
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
 there were 250 employees, the required thirty percent of the said work force being
75. With the figure of the actual number of employees in the school establishment
thus supplied, private respondent submitted on October 26, 1977 the additional
signatures of 22 employees in support of its plea for a certification election. There
was an opposition on the part of the present petitioner. It was filed on November 2,
G.R. No. L-48347 October 3, 1978 1977. Then came, fifteen days later, an order from the Med-Arbiter assigned to the
case dismissing the petition for certification on the ground that the compliance with
SCOUT RAMON V. ALBANO MEMORIAL COLLEGE, petitioner,
the 30% requirement must be shown as of the time of its filing. Private respondent
vs.
appealed to the Bureau of Labor Relations such order of the Med-Arbiter dismissing
HON. CARMELO C. NORIEL, and FEDERATION OF FREE WORKERS (Scout
its petition. Respondent Noriel on February 8, 1978 sustained the appeal, ordering a
Ramon V. Albano Memorial College Chapter), respondents.
certification election at the Scout Ramon V. Albano Memorial College within twenty
Martiniano A. Valdisimo for petitioner. (20) days from receipt thereof, with the following as contending unions: 1. FFW
Jaime D. Lauron for private respondent. (Scout Ramon V. Albano Memorial College Chapter): 2. No Union, Petitioner moved
for its reconsideration, but it did not succeed. An appeal to the Secretary of Labor
Solicitor General Estelito P. Mendoza Assistant Solicitor General Reynato S. Puno and was likewise of no avail Hence this petition.
Solicitor Jesus V. Diaz for the Public Respondent.
As set forth at the outset, there, is no merit to this petition.

1. The present Labor Code did not take effect until November 1,1974. 2 The day
FERNANDO, Acting C.J.: before, on October 31, 1974 this Court, speaking through Justice E. Fernandez now
The grave abuse of discretion imputed to respondent Director of Labor Relations retired, in Confederation of Citizens Labor union vs. National Labor Relations
Carmelo C. Noriel, when he ordered a certification election at the instance of private Commission, 3 held fast to the existing doctrine emphasizing the significance of a
respondent, Federation of Free Workers, was his alleged failure to abide by previous certification election in a regime of collective bargaining. Then in the first decision
rulings of the Department of Labor. Assurring such to be the case, the point raised is after its effectivity, United Employees Union of Gelmart Industries v. Noriel , 4 It was
not decisive of this controversy, As was made apparent in the Comment of Solicitor pointed out: The constitute ion of collective bargaining is. to recall Cox a prime
General Estelito P. Mendoza, 1 the challenged order conforms to the decisions of this manifestation of industrial democracy at, work. The two parties to the relationship,
Court. Where the law is concerned, it is this Tribunal that speaks authoritatively.- tabor and management, make their own rules b coming to terms. That is to govern
Petitioner has failed to make out a case. We dismiss. themselves in matters that really, count. As labor, however, is composed of a
number of individuals, it is indispensable that they be represented by a labor
The controversy began with the filing of a petition for certification election on
organization of their choice. Thus may be discerned how crucial is a certification
September 22, 1977 by the Scout Ramon V. Albano Memorial College Chapter of
election. So our decisions from the earliest case of PLDT Employees Union v. PLDT
private respondent labor union. It alleged that the written consent of 67 employees
Co. Free Telephone Workers Union to the latest, Philippine Communications,
out of an alleged total working force of 200, more or less, had been secured. There
Electronics & Electricity Workers' Federation PCWF v. Court of Industrial Relations ,
was, on October 21, 1977, a motion to dismiss the petition filed by the employer,
had made clear." 5 The same principle was again given expression in language
the present petitioner. It was based on the lack of the 30% consent requirement as
equally emphatic in the subsequent case of Philippine Association of Free Labor
Unions v. Bureau of Labor Relations: 6 "Petitioner thus appears to be woefully is designed to assure that the other party, labor, is free to choose its representative.
lacking in awareness of the significance of a certification election for the collective To resolve any doubt on the matter, a certification election, to repeat, is the most
bargaining process. It is the fairest and most effective way of determining which appropriate means of ascertaining its will. It is true that there may be circumstances
labor organization can truly represent the working force. It is a fundamental where the interest of the employer calls for its being heard on the matter. An
postulate that the will of the majority given expression in an honest election with obvious instance is where it invokes the obstacle interposed by the contract-bar rule.
freedom on the part of the voters to make their choice, is controlling. No better This case certainly does not fall within the exception. Sound policy dictates that as
device can assure the institution of industrial democracy with the two parties to a much as possible, management is to maintain a strictly hands-off policy. For if it
business enterprise, management and labor, establishing a regime of self- does not, it may lend itself to the legitimate suspicion that it is partial to one of the
rule. 7 That is to accord respect to the policy of the Labor Code, indisputably partial contending unions. That is repugnant to the concept of collective bargaining. That is
to the holding of a certification election so as to arrive in a manner definitive and against the letter and spirit of welfare legislation intended to protect labor and to
certain concerning the choice of the labor organization to represent the workers in a promote social justice. The judiciary then should be the last to look with tolerance at
collective bargaining unit. 8 such efforts of an employer to take part in the process leading to the free and
untrammeled choice of the exclusive bargaining representative of the workers." 11
2. Conformably to the above basic concept, this Court, in the aforesaid Philippine
Association of Free Labor Unions decision, recognized that the Bureau of Labor WHEREFORE, the petition for certiorari is dismissed, with Costs. This decision is
Relations, in the exercise of sound discretion, may order a certification election immediately executory. The restraining order is hereby lifted. A certification election
notwithstanding the failure to meet the 30% requirement. Once that requisite is must be conducted forthwith.
complied with, however, the Code makes, clear that "it shall be mandatory for the
Barredo, Antonio Aquino Concepcion Jr. and Santos, JJ., concur.
Bureau to conduct a Identification election for the purpose of determining the
representative of the employees in the appropriate bargaining unit and certify the
winner as the exclusive collective bargaining representative of all the employees in
the unit." 9 Necessarily then, the argument of petitioner as to the inability of private
respondent to come up with the required signatures when the petition was first filed
falls to the ground. At any rate, additional signatures were subsequently secured.
The allegation that there was thereafter a retraction on the part of a number of such
signatories lends added support to the decision arrived at by respondent Noriel that
the only way of determining with accuracy the true will of the personnel involved in
the bargaining unit is to conduct a certification petition At any rate. that s a factual
matter, the resolution of which by respondent Noriel is entitled to respect by this
Tribunal. 10

3. There is relevance likewise to this excerpt from Monark International, Inc. v.

Noriel, cited in the Comment of Solicitor General Mendoza: "There is another
infirmity from which the petition suffers. It was filed by the employer, the adversary
in the collective bargaining process. Precisely, the institution of collective bargaining