G.R. No. 81958 June 30, 1988 (2) in order to foster the common good.

(2) in order to foster the common good. It is not capable of an exact definition but has been,
purposely, veiled in general terms to underscore its all-comprehensive embrace.
PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS, INC., petitioner,
vs. "Its scope, ever-expanding to meet the exigencies of the times, even to anticipate the future where it
HON. FRANKLIN M. DRILON as Secretary of Labor and Employment, and TOMAS D. ACHACOSO, as could be done, provides enough room for an efficient and flexible response to conditions and
Administrator of the Philippine Overseas Employment Administration, respondents. circumstances thus assuring the greatest benefits." 6

Gutierrez & Alo Law Offices for petitioner. It finds no specific Constitutional grant for the plain reason that it does not owe its origin to the
Charter. Along with the taxing power and eminent domain, it is inborn in the very fact of statehood
and sovereignty. It is a fundamental attribute of government that has enabled it to perform the most
SARMIENTO, J.: vital functions of governance. Marshall, to whom the expression has been credited, 7 refers to it
succinctly as the plenary power of the State "to govern its citizens." 8
The petitioner, Philippine Association of Service Exporters, Inc. (PASEI, for short), a firm "engaged
principally in the recruitment of Filipino workers, male and female, for overseas "The police power of the State ... is a power coextensive with self- protection, and it is not inaptly
placement," 1 challenges the Constitutional validity of Department Order No. 1, Series of 1988, of the termed the "law of overwhelming necessity." It may be said to be that inherent and plenary power in
Department of Labor and Employment, in the character of "GUIDELINES GOVERNING THE the State which enables it to prohibit all things hurtful to the comfort, safety, and welfare of society." 9
TEMPORARY SUSPENSION OF DEPLOYMENT OF FILIPINO DOMESTIC AND HOUSEHOLD WORKERS," in
this petition for certiorari and prohibition. Specifically, the measure is assailed for "discrimination It constitutes an implied limitation on the Bill of Rights. According to Fernando, it is "rooted in the
against males or females;" 2 that it "does not apply to all Filipino workers but only to domestic helpers conception that men in organizing the state and imposing upon its government limitations to
and females with similar skills;" 3 and that it is violative of the right to travel. It is held likewise to be safeguard constitutional rights did not intend thereby to enable an individual citizen or a group of
an invalid exercise of the lawmaking power, police power being legislative, and not executive, in citizens to obstruct unreasonably the enactment of such salutary measures calculated to ensure
character. communal peace, safety, good order, and welfare." 10 Significantly, the Bill of Rights itself does not
purport to be an absolute guaranty of individual rights and liberties "Even liberty itself, the greatest of
In its supplement to the petition, PASEI invokes Section 3, of Article XIII, of the Constitution, providing all rights, is not unrestricted license to act according to one's will." 11 It is subject to the far more
for worker participation "in policy and decision-making processes affecting their rights and benefits as overriding demands and requirements of the greater number.
may be provided by law." 4 Department Order No. 1, it is contended, was passed in the absence of
prior consultations. It is claimed, finally, to be in violation of the Charter's non-impairment clause, in Notwithstanding its extensive sweep, police power is not without its own limitations. For all its
addition to the "great and irreparable injury" that PASEI members face should the Order be further awesome consequences, it may not be exercised arbitrarily or unreasonably. Otherwise, and in that
enforced. event, it defeats the purpose for which it is exercised, that is, to advance the public good. Thus, when
the power is used to further private interests at the expense of the citizenry, there is a clear misuse of
On May 25, 1988, the Solicitor General, on behalf of the respondents Secretary of Labor and the power. 12
Administrator of the Philippine Overseas Employment Administration, filed a Comment informing the
Court that on March 8, 1988, the respondent Labor Secretary lifted the deployment ban in the states In the light of the foregoing, the petition must be dismissed.
of Iraq, Jordan, Qatar, Canada, Hongkong, United States, Italy, Norway, Austria, and Switzerland. * In
submitting the validity of the challenged "guidelines," the Solicitor General invokes the police power As a general rule, official acts enjoy a presumed vahdity. 13 In the absence of clear and convincing
of the Philippine State. evidence to the contrary, the presumption logically stands.

It is admitted that Department Order No. 1 is in the nature of a police power measure. The only The petitioner has shown no satisfactory reason why the contested measure should be nullified.
question is whether or not it is valid under the Constitution. There is no question that Department Order No. 1 applies only to "female contract workers," 14 but it
does not thereby make an undue discrimination between the sexes. It is well-settled that "equality
The concept of police power is well-established in this jurisdiction. It has been defined as the "state before the law" under the Constitution 15does not import a perfect Identity of rights among all men
authority to enact legislation that may interfere with personal liberty or property in order to promote and women. It admits of classifications, provided that (1) such classifications rest on substantial
the general welfare." 5 As defined, it consists of (1) an imposition of restraint upon liberty or property,
distinctions; (2) they are germane to the purposes of the law; (3) they are not confined to existing The Order does not narrowly apply to existing conditions. Rather, it is intended to apply indefinitely so
conditions; and (4) they apply equally to all members of the same class. 16 long as those conditions exist. This is clear from the Order itself ("Pending review of the
administrative and legal measures, in the Philippines and in the host countries . . ." 18), meaning to say
The Court is satisfied that the classification made-the preference for female workers — rests on that should the authorities arrive at a means impressed with a greater degree of permanency, the ban
substantial distinctions. shall be lifted. As a stop-gap measure, it is possessed of a necessary malleability, depending on the
circumstances of each case. Accordingly, it provides:
As a matter of judicial notice, the Court is well aware of the unhappy plight that has befallen our
female labor force abroad, especially domestic servants, amid exploitative working conditions marked 9. LIFTING OF SUSPENSION. — The Secretary of Labor and Employment (DOLE) may,
by, in not a few cases, physical and personal abuse. The sordid tales of maltreatment suffered by upon recommendation of the Philippine Overseas Employment Administration
migrant Filipina workers, even rape and various forms of torture, confirmed by testimonies of (POEA), lift the suspension in countries where there are:
returning workers, are compelling motives for urgent Government action. As precisely the caretaker
of Constitutional rights, the Court is called upon to protect victims of exploitation. In fulfilling that 1. Bilateral agreements or understanding with the Philippines, and/or,
duty, the Court sustains the Government's efforts.
2. Existing mechanisms providing for sufficient safeguards to ensure the welfare and
The same, however, cannot be said of our male workers. In the first place, there is no evidence that, protection of Filipino workers. 19
except perhaps for isolated instances, our men abroad have been afflicted with an Identical
predicament. The petitioner has proffered no argument that the Government should act similarly with The Court finds, finally, the impugned guidelines to be applicable to all female domestic overseas
respect to male workers. The Court, of course, is not impressing some male chauvinistic notion that workers. That it does not apply to "all Filipina workers" 20 is not an argument for unconstitutionality.
men are superior to women. What the Court is saying is that it was largely a matter of evidence (that Had the ban been given universal applicability, then it would have been unreasonable and arbitrary.
women domestic workers are being ill-treated abroad in massive instances) and not upon some For obvious reasons, not all of them are similarly circumstanced. What the Constitution prohibits is
fanciful or arbitrary yardstick that the Government acted in this case. It is evidence capable indeed of the singling out of a select person or group of persons within an existing class, to the prejudice of such
unquestionable demonstration and evidence this Court accepts. The Court cannot, however, say the a person or group or resulting in an unfair advantage to another person or group of persons. To apply
same thing as far as men are concerned. There is simply no evidence to justify such an inference. the ban, say exclusively to workers deployed by A, but not to those recruited by B, would obviously
Suffice it to state, then, that insofar as classifications are concerned, this Court is content that clash with the equal protection clause of the Charter. It would be a classic case of what Chase refers to
distinctions are borne by the evidence. Discrimination in this case is justified. as a law that "takes property from A and gives it to B." 21 It would be an unlawful invasion of property
rights and freedom of contract and needless to state, an invalid act. 22 (Fernando says: "Where the
As we have furthermore indicated, executive determinations are generally final on the Court. Under a classification is based on such distinctions that make a real difference as infancy, sex, and stage of
republican regime, it is the executive branch that enforces policy. For their part, the courts decide, in civilization of minority groups, the better rule, it would seem, is to recognize its validity only if the
the proper cases, whether that policy, or the manner by which it is implemented, agrees with the young, the women, and the cultural minorities are singled out for favorable treatment. There would
Constitution or the laws, but it is not for them to question its wisdom. As a co-equal body, the be an element of unreasonableness if on the contrary their status that calls for the law ministering to
judiciary has great respect for determinations of the Chief Executive or his subalterns, especially when their needs is made the basis of discriminatory legislation against them. If such be the case, it would
the legislature itself has specifically given them enough room on how the law should be effectively be difficult to refute the assertion of denial of equal protection." 23 In the case at bar, the assailed
enforced. In the case at bar, there is no gainsaying the fact, and the Court will deal with this at greater Order clearly accords protection to certain women workers, and not the contrary.)
length shortly, that Department Order No. 1 implements the rule-making powers granted by the
Labor Code. But what should be noted is the fact that in spite of such a fiction of finality, the Court is It is incorrect to say that Department Order No. 1 prescribes a total ban on overseas deployment.
on its own persuaded that prevailing conditions indeed call for a deployment ban. From scattered provisions of the Order, it is evident that such a total ban has hot been contemplated.
We quote:
There is likewise no doubt that such a classification is germane to the purpose behind the measure.
Unquestionably, it is the avowed objective of Department Order No. 1 to "enhance the protection for 5. AUTHORIZED DEPLOYMENT-The deployment of domestic helpers and workers of
Filipino female overseas workers" 17 this Court has no quarrel that in the midst of the terrible similar skills defined herein to the following [sic] are authorized under these
mistreatment Filipina workers have suffered abroad, a ban on deployment will be for their own good guidelines and are exempted from the suspension.
and welfare.
 5.1 Hirings by immediate members of the family of Heads of State Neither is there merit in the contention that Department Order No. 1 constitutes an invalid exercise of
and Government; legislative power. It is true that police power is the domain of the legislature, but it does not mean
that such an authority may not be lawfully delegated. As we have mentioned, the Labor Code itself
5.2 Hirings by Minister, Deputy Minister and the other senior vests the Department of Labor and Employment with rulemaking powers in the enforcement
government officials; and whereof. 28

5.3 Hirings by senior officials of the diplomatic corps and duly The petitioners's reliance on the Constitutional guaranty of worker participation "in policy and
accredited international organizations. decision-making processes affecting their rights and benefits" 29 is not well-taken. The right granted by
this provision, again, must submit to the demands and necessities of the State's power of regulation.
5.4 Hirings by employers in countries with whom the Philippines
have [sic] bilateral labor agreements or understanding. The Constitution declares that:

xxx xxx xxx Sec. 3. The State shall afford full protection to labor, local and overseas, organized
and unorganized, and promote full employment and equality of employment
7. VACATIONING DOMESTIC HELPERS AND WORKERS OF SIMILAR SKILLS-- opportunities for all. 30
Vacationing domestic helpers and/or workers of similar skills shall be allowed to
process with the POEA and leave for worksite only if they are returning to the same "Protection to labor" does not signify the promotion of employment alone. What concerns the
employer to finish an existing or partially served employment contract. Those Constitution more paramountly is that such an employment be above all, decent, just, and humane. It
workers returning to worksite to serve a new employer shall be covered by the is bad enough that the country has to send its sons and daughters to strange lands because it cannot
suspension and the provision of these guidelines. satisfy their employment needs at home. Under these circumstances, the Government is duty-bound
to insure that our toiling expatriates have adequate protection, personally and economically, while
xxx xxx xxx away from home. In this case, the Government has evidence, an evidence the petitioner cannot
seriously dispute, of the lack or inadequacy of such protection, and as part of its duty, it has precisely
ordered an indefinite ban on deployment.
9. LIFTING OF SUSPENSION-The Secretary of Labor and Employment (DOLE) may,
upon recommendation of the Philippine Overseas Employment Administration
(POEA), lift the suspension in countries where there are: The Court finds furthermore that the Government has not indiscriminately made use of its authority.
It is not contested that it has in fact removed the prohibition with respect to certain countries as
manifested by the Solicitor General.
1. Bilateral agreements or understanding with the Philippines,
and/or,
The non-impairment clause of the Constitution, invoked by the petitioner, must yield to the loftier
purposes targetted by the Government. 31 Freedom of contract and enterprise, like all other freedoms,
2. Existing mechanisms providing for sufficient safeguards to
is not free from restrictions, more so in this jurisdiction, where laissez faire has never been fully
ensure the welfare and protection of Filipino workers. 24
accepted as a controlling economic way of life.
xxx xxx xxx
This Court understands the grave implications the questioned Order has on the business of
recruitment. The concern of the Government, however, is not necessarily to maintain profits of
The consequence the deployment ban has on the right to travel does not impair the right. The right to business firms. In the ordinary sequence of events, it is profits that suffer as a result of Government
travel is subject, among other things, to the requirements of "public safety," "as may be provided by regulation. The interest of the State is to provide a decent living to its citizens. The Government has
law." 25 Department Order No. 1 is a valid implementation of the Labor Code, in particular, its basic convinced the Court in this case that this is its intent. We do not find the impugned Order to be
policy to "afford protection to labor," 26 pursuant to the respondent Department of Labor's rule- tainted with a grave abuse of discretion to warrant the extraordinary relief prayed for.
making authority vested in it by the Labor Code. 27 The petitioner assumes that it is unreasonable
simply because of its impact on the right to travel, but as we have stated, the right itself is not
WHEREFORE, the petition is DISMISSED. No costs. SO ORDERED.
absolute. The disputed Order is a valid qualification thereto.
G.R. No. 77875 February 4, 1993 August 21, 1984, individual respondents, represented by the union, made a formal
notice regarding the deductions to petitioner thru Mr. Reynaldo Abad, Manager for
PHILIPPINE AIRLINES, INC., petitioner, Catering. . . .
vs.
ALBERTO SANTOS, JR., HOUDIEL MAGADIA, GILBERT ANTONIO, REGINO DURAN, PHILIPPINE 3. As there was no action taken on said representation, private respondents filed a
AIRLINES EMPLOYEES ASSOCIATION, and THE NATIONAL LABOR RELATIONS formal grievance on November 4, 1984 pursuant to the grievance machinery Step 1
COMMISSION, respondents. of the Collective Bargaining Agreement between petitioner and the union. . . . The
topics which the union wanted to be discussed in the said grievance were the
Fortunato Gupit, Jr., Solon R. Garcia, Rene B. Gorospe, Bienvinodo T. Jamoralin, jr. and Paulino D. illegal/questionable salary deductions and inventory of bonded goods and
Ungos, Jr. for petitioner. merchandise being done by catering service personnel which they believed should
not be their duty.
Adolpho M. Guerzon for private respondents.
4. The said grievance was submitted on November 21, 1984 to the office of Mr.
Reynaldo Abad, Manager for Catering, who at the time was on vacation leave. . . .

REGALADO, J.: 5. Subsequently, the grievants (individual respondents) thru the shop steward wrote
a letter on December 5, 1984 addressed to the office of Mr. Abad, who was still on
leave at the time, that inasmuch as no reply was made to their grievance which
The instant petition for certiorari seeks to set aside the decision of The National Labor Relations
"was duly received by your secretary" and considering that petitioner had only five
Commission (NLRC) in NLRC Case No. 4-1206-85, promulgated on December 11, 1986, 1 containing the
days to resolve the grievance as provided for in the CBA, said grievance as believed
following disposition:
by them (private respondents) was deemed resolved in their favor. . . .
WHEREFORE, in view of the foregoing consideration, the Decision appealed from is
6. Upon Mr. Abad's return on December 7, 1984, he immediately informed the
set aside and another one entered, declaring the suspension of complainants to be
grievants and scheduled a meeting on December 12, 1984. . . .
illegal and consequently, respondent PAL is directed to pay complainants their
salaries corresponding to the respective period(s) of their suspension, and to delete
the disciplinary action from complainants' service records. 2 7. Thereafter, the individual respondents refused to conduct inventory works.
Alberto Santos, Jr. did not conduct ramp inventory on December 7, 10 and 12.
Gilbert Antonio did not conduct ramp inventory on December 10. In like manner,
These material facts recited in the basic petition are virtually undisputed and we reproduce the same
Regino Duran and Houdiel Magadia did not conduct the same on December 10 and
hereunder:
12.
1. Individual respondents are all Port Stewards of Catering Sub-Department,
8. At the grievance meeting which was attended by some union representatives, Mr.
Passenger Services Department of petitioner. Their duties and responsibilities,
Abad resolved the grievance by denying the petition of individual respondents and
among others, are:
adopted the position that inventory of bonded goods is part of their duty as catering
service personnel, and as for the salary deductions for losses, he rationalized:
Prepares meal orders and checklists, setting up standard
equipment in accordance with the requirements of the type of
1. It was only proper that employees are charged for the amount
service for each flight; skiing, binning, and inventorying of
due to mishandling of company property which resulted to losses.
Commissary supplies and equipment.
However, loss may be cost price 1/10 selling price.
2. On various occasions, several deductions were made from their salary. The
9. As there was no ramp inventory conducted on the mentioned dates, Mr. Abad, on
deductions represented losses of inventoried items charged to them for
January 3, 1985 wrote by an inter-office memorandum addressed to the grievants,
mishandling of company properties . . . which respondents resented. Such that on
 individual respondents herein, for them to explain on (sic) why no disciplinary The instant case hinges on the interpretation of Section 2, Article IV of the PAL-PALEA Collective
action should be taken against them for not conducting ramp inventory. . . . Bargaining Agreement, (hereinafter, CBA), to wit:

10. The directive was complied with . . . . The reason for not conducting ramp Sec. 2 — Processing of Grievances
inventory was put forth as:
xxx xxx xxx
4. Since the grievance step 1 was not decided and no action was
done by your office within 5 days from November 21, 1984, per STEP 1 — Any employee who believes that he has a justifiable grievance shall take
provision of the PAL-PALEA CBA, Art. IV, Sec. 2, the grievance is the matter up with his shop steward. If the shop steward feels there is justification
deemed resolved in PALEA's favor. for taking the matter up with the Company, he shall record the grievance on the
grievance form heretofore agreed upon by the parties. Two (2) copies of the
11. Going over the explanation, Mr. Abad found the same unsatisfactory. Thus, a grievance form properly filled, accepted, and signed shall then be presented to and
penalty of suspension ranging from 7 days to 30 days were (sic) imposed depending discussed by the shop steward with the division head. The division head shall
on the number of infractions committed. * answer the grievance within five (5) days from the date of presentation by inserting
his decision on the grievance form, signing and dating same, and returning one copy
12. After the penalty of suspension was meted down, PALEA filed another grievance to the shop steward. If the division head fails to act within the five (5)-day
asking for lifting of, or at least, holding in abeyance the execution of said penalty. regl(e)mentary period, the grievance must be resolved in favor of the aggrieved
The said grievance was forthwith denied but the penalty of suspension with respect party. If the division head's decision is not appealed to Step II, the grievance shall be
to respondent Ramos was modified, such that his suspension which was originally considered settled on the basis of the decision made, and shall not be eligible for
from January 15, 1985 to April 5, 1985 was shortened by one month and was lifted further appeal.5(Emphasis ours.)
on March 5, 1985. The union, however, made a demand for the reimbursement of
the salaries of individual respondents during the period of their suspension. Petitioner submits that since the grievance machinery was established for both labor and
management as a vehicle to thresh out whatever problems may arise in the course of their
13. Petitioner stood pat (o)n the validity of the suspensions. Hence, a complaint for relationship, every employee is duty bound to present the matter before management and give the
illegal suspension was filed before the latter an opportunity to impose whatever corrective measure is possible. Under normal
Arbitration Branch of the Commission, . . . Labor Arbiter Ceferina J. Diosana, on circumstances, an employee should not preempt the resolution of his grievance; rather, he has the
March 17, 1986, ruled in favor of petitioner by dismissing the complaint. . . . 3 duty to observe the status quo.6

Private respondents appealed the decision of the labor arbiter to respondent commission which Citing Section 1, Article IV of the CBA, petitioner further argues that respondent employees have the
rendered the aforequoted decision setting aside the labor arbiter's order of dismissal. Petitioner's obligation, just as management has, to settle all labor disputes through friendly negotiations. Thus,
motion for reconsideration having been denied, it interposed the present petition. Section 2 of the CBA should not be narrowly interpreted. 7 Before the prescriptive period of five days
begins to run, two concurrent requirements must be met, i.e., presentment of the grievance and
The Court is accordingly called upon to resolve the issue of whether or not public respondent NLRC its discussion between the shop steward and the division head who in this case is Mr. Abad. Section 2
acted with grave abuse of discretion amounting to lack of jurisdiction in rendering the is not self-executing; the mere filing of the grievance does not trigger the tolling of the prescriptive
aforementioned decision. period.8

Evidently basic and firmly settled is the rule that judicial review by this Court in labor cases does not Petitioner has sorely missed the point.
go so far as to evaluate the sufficiency of the evidence upon which the labor officer or office based his
or its determination, but is limited to issues of jurisdiction and grave abuse of discretion. 4 It has not It is a fact that the sympathy of the Court is on the side of the laboring classes, not only because the
been shown that respondent NLRC has unlawfully neglected the performance of an act which the law Constitution imposes such sympathy, but because of the one-sided relation between labor and
specifically enjoins it to perform as a duty or has otherwise unlawfully excluded petitioner from the capital.9 The constitutional mandate for the promotion of labor is as explicit as it is demanding. The
exercise of a right to which it is entitled. purpose is to place the workingman on an equal plane with management — with all its power and
influence — in negotiating for the advancement of his interests and the defense of his rights. 10 Under
the policy of social justice, the law bends over backward to accommodate the interests of the working If the Court were to follow petitioner's line of reasoning, it would be easy for management to delay
class on the humane justification that those with less privileges in life should have more privileges in the resolution of labor problems, the complaints of the workers in particular, and hide under the cloak
law. 11 of its officers being "on leave" to avoid being caught by the 5-day deadline under the CBA. If this
should be allowed, the workingmen will suffer great injustice for they will necessarily be at the mercy
It is clear that the grievance was filed with Mr. Abad's secretary during his absence. 12 Under Section 2 of their employer. That could not have been the intendment of the pertinent provision of the CBA,
of the CBA aforequoted, the division head shall act on the grievance within five (5) days from the date much less the benevolent policy underlying our labor laws.
of presentation thereof, otherwise "the grievance must be resolved in favor of the aggrieved party." It
is not disputed that the grievants knew that division head Reynaldo Abad was then "on leave" when ACCORDINGLY, on the foregoing premises, the instant petition is hereby DENIED and the assailed
they filed their grievance which was received by Abad's secretary. 13 This knowledge, however, should decision of respondent National Labor Relations Commission is AFFIRMED. This judgment is
not prevent the application of the CBA. immediately executory.

On this score, respondent NLRC aptly ruled: SO ORDERED.

. . . Based on the facts heretofore narrated, division head Reynaldo Abad had to act
on the grievance of complainants within five days from 21 November 1984.
Therefore, when Reynaldo Abad, failed to act within the reglementary period,
complainants, believing in good faith that the effect of the CBA had already set in,
cannot be blamed if they did not conduct ramp inventory for the days thereafter. In
this regard, respondent PAL argued that Reynaldo Abad was on leave at the time the
grievance was presented. This, however, is of no moment, for it is hard to believe
that everything under Abad's authority would have to stand still during his absence
from office. To be sure, it is to be expected that someone has to be left to attend to
Abad's duties. Of course, this may be a product of inadvertence on the part of PAL
management, but certainly, complainants should not be made to suffer the
consequences. 14

Contrary to petitioner's submission,15 the grievance of employees is not a matter which requires the
personal act of Mr. Abad and thus could not be delegated. Petitioner could at least have assigned an
officer-in-charge to look into the grievance and possibly make his recommendation to Mr. Abad. It is
of no moment that Mr. Abad immediately looked into the grievance upon returning to work, for it
must be remembered that the grievants are workingmen who suffered salary deductions and who
rely so much on their meager income for their daily subsistence and survival. Besides, it is noteworthy
that when these employees first presented their complaint on August 21, 1984, petitioner failed to
act on it. It was only after a formal grievance was filed and after Mr. Abad returned to work on
December 7, 1984 that petitioner decided to turn an ear to their plaints.

As respondent NLRC has pointed out, Abad's failure to act on the matter may have been due to
petitioner's inadvertence,16 but it is clearly too much of an injustice if the employees be made to bear
the dire effects thereof. Much as the latter were willing to discuss their grievance with their employer,
the latter closed the door to this possibility by not assigning someone else to look into the matter
during Abad's absence. Thus, private respondents should not be faulted for believing that the effects
of the CBA in their favor had already stepped into the controversy.
 . . . the acquittal of a employee in a criminal case is no bar to the Court of Industrial
Relations, after proper hearing, finding the same employee guilty of facts inimical to the
G.R. No. L-13778 April 29, 1960 interests of his employer and justifying loss of confidence in him by said employer, thereby
warranting his dismissal or the refusal of the Company to reinstate him. The reason for this is
PHILIPPINE EDUCATION CO., INC., petitioner, not difficult to see. The evidence required by law to establish guilt and to warrant conviction
vs. in a criminal case substantially differs from the evidence necessary to establish responsibility
UNION OF PHILIPPINE EDUCATION EMPLOYEES (NLU) and THE COURT OF INDUSTRIAL or liability in a civil or non-criminal case. The difference is in the amount and weight of
RELATIONS,respondents. evidence and also in degree. In a criminal case, the evidence or proof must be beyond
reasonable doubt while in a civil or non criminal case it is merely preponderance of evidence.
Marcial Esposo for petitioner. In further support of this principle we may refer to Art. 29 of the New Civil Code (Rep. Act
Eulogio R. Lerum for respondent Union. Jose B. Bolisay for respondent CIR. 386) which provides that when the accused in a criminal case is acquitted on the ground of
reasonable doubt a civil action for damages for the same act or omission may be instituted
MONTEMAYOR, J.: where only a preponderance of evidence is necessary to establish liability. From all this it is
clear that the Court of Industrial Relations was justified in denying the petition of Rivas and
The Philippine Education Company, Inc. is appealing the order of the Court of Industrial Relations, Tolentino for reinstatement in the cement company, because of their illegal possession of
dated February 7, 1958, directing it to reinstate its former employee, Ernesto Carpio, to his former or hand grenades intended by them for purposes of sabotage in connection with the strike on
equivalent position, without backpay, and from the resolution of the same court in banc, dated March March 16, 1952.
22, 1958, denying the company's motion for reconsideration.
Then in the case of National Labor Union vs. Standard Vacuum Oil Company, 73 Phil., 279, the City
Ernesto Carpio and other employees of the company, members of the Union of Philippine Education Fiscal refused to prosecute two employees charged with theft for lack of evidence and yet this
Employees (NLU) joined a strike staged on January 16, 1953. After the labor dispute was settled, the Tribunal upheld their dismissal from the employer company on the ground that their employer had
Industrial Court ordered the reinstatement of the strikers, including Carpio. The company, however, ample reason to distrust them.
opposed the reinstatement of Carpio for the reason that a criminal complaint had been filed against
him in the Municipal Court of Manila for theft of magazines allegedly belonging to the company. He The relation of employer and employee, specially where the employee has access to the employer's
was convicted and sentenced to two months and one day of arresto mayor. On appeal to the Court of property in the form of articles and merchandise for sale, necessarily involves trust and confidence. If
First Instance, Carpio was acquitted on the ground of reasonable doubt. said merchandise are lost and said loss is reasonably attributed to said employee, and he is charged
with theft, even if he is acquitted of the form of articles and merchandise for sale, necessarily involves
The question of Carpio's reinstatement was heard by the Industrial Court where the parties submitted trust and confidence. If said merchandise are lost and said loss is reasonably attributed to said
as evidence the transcript of the stenographic notes taken during the hearing in the criminal case employee, and he is charged with theft, even if he is acquitted of the charge on reasonable doubt,
before the Court of First Instance of Manila, the exhibits presented in said case, as well as the when the employer has lost its confidence in him, it would be highly unfair to require said employer
decisions of the Municipal Court convicting him, and that of the Court of First Instance acquitting him, to continue employing him or to reinstate him, for in that case the former might find it necessary for
or rather dismissing the case against him on reasonable doubt. After said hearing, the Industrial Court its protection to employ another person to watch and keep an eye on him. In the present case, Carpio
agreed with the finding of the Court of First Instance that the offense had not been proven beyond was refused reinstatement not because of any union affiliation or activity or because the company has
reasonable doubt and held that Carpio's acquittal entitled him to reinstatement, though without been guilty of any unfair labor practice. As already stated, Carpio was convicted in the Municipal
backpay. Court and although he was acquitted on reasonable doubt in the Court of First Instance, the company
had ample reason to distrust him. Under the circumstances, we cannot in conscience require the
We have examined the aforementioned evidence, and we are inclined to agree with the Municipal
company to reemploy or reinstate him.
Court that Carpio's guilt had been duly established. At least, the preponderance of evidence was
against his innocence. The question for determination is whether the whether the acquittal of an In view of the foregoing, the appealed orders of the Industrial Court of February 7, 1958 and March
employee, specially on the ground of reasonable doubt, in a criminal case for theft involving articles 22, 1958 are hereby reversed. No costs.
and merchandise belonging to his employer, entitles said employee to reinstatement.
G.R. No. 78090 July 26, 1991
In the case of National Labor Organization of Employees and Laborers vs. Court of Industrial Relations,
95 Phil., 727; Off. Gaz. (9) 4219, we said:
PACIFIC MILLS, INC., petitioner, the previous infractions of complainant," these being "a matter of record and not denied by
vs. complainant (Zenaida)."
ZENAIDA ALONZO, respondent.
The Arbiter was of the view, however, that Alonzo was entitled to relief, because (a) the penalty
Napoleon L. Apostol for petitioner. imposed was "harsh and severe and not commensurate with the offense, . . . suspension of three (3)
months . . (being) the proper, just and reasonable penalty . . .;" and because (b) the company had
failed "to investigate complainant before she was dismissed." The Arbiter thus ordered Pacific Mills,
Inc., Zenaida's employer:
NARVASA, J.:
. . . to reinstate complainant without loss of seniority rights and to pay her backwages from
From July 30, 1973, Zenaida Alonzo was employed as a ring frame operator in the Pacific Mills, Inc. January 1, 1983 until fully reinstated, the period from October 1, 1982 to December 31, 1982
until September 30, 1982 when she was discharged by Management. complainant being under suspension without pay . . . (as well as) to pay complainant's 13th
month pay in the amount of THREE HUNDRED FIFTY-ONE PESOS ONLY (P351.00).
The record shows that in the early afternoon of September 22, 1982, Zenaida challenged Company
Inspector Ernesto Tamondong to a fight, saying: "Putang Ina mo, lumabas ka, tarantado, kalalaki mong Acting on the employer's appeal, the National Labor Relations Commission rendered judgment on
tao, duwag ka . . Ipagugulpi kita sa labas at kaya kitang ipakaladkad dito sa loob ng compound palabas March 23, 1987, sustaining the Labor Arbiter's findings. It however limited the award of back wages to
ng gate sa mga kamag-anak ko." And suiting action to the word, she thereupon boxed Tamondong in Zenaida only to three (3) years, in accordance with this Court's judgment in Feati University Faculty
the stomach. The motive for the assault was Zenaida's resentment at having been reprimanded, Club (PAFLU) vs. Feati University, 58 SCRA 396.6
together with other employees, two days earlier by Tamondong for wasting time by engaging in Idle
chatter.1 Tamondong forthwith reported the incident to the firm's Administrative Manager 2 as well as Pacific Mills Inc. has instituted in this Court the special civil action of certiorari at bar praying for
the Chairman of Barangay Balombato, Quezon City. 3 nullification of the judgment of the NLRC for having been rendered with grave abuse of discretion.

On September 30, 1982, Zenaida Alonzo was given a Memorandum by the company's Executive Vice In the comment thereon,7 required of him by the Court, the Solicitor General opined that:
President & General Manager terminating her employment as of October 1, 1982 on various grounds:
poor work, habitual absences and tardiness, wasting time, insubordination and gross disrespect. The . . . both the Labor Arbiter and the NLRC apparently failed to take into consideration the fact
service of that memorandum of dismissal on her was not preceded by any complaint, hearing or other that Zenaida Alonzo was dismissed not because of this isolated act (of assault against her
formality. These were apparently considered unnecessary by Management 4 in view of the provision in superior) but rather because of numerous and repeated violations of company rules and
the Company Rules and Regulations (embodied in the Collective Bargaining Agreement between the regulations. It was only this last incident which compelled Pacific Mills, Inc. to finally
company and the union representing the employees) that: terminate her services. It is the totality of the infractions committed by the employee which
should have been considered in determining whether or not there is just cause for her
Fighting or attempting to inflict harm to another employee, will render (sic) the aggressor to dismissal.
outright dismissal.
Zenaida Alonzo was caught several times leaving her place of work to chat with her co-
It was only at the hearing of the complaint for illegal dismissal (and non-payment of proportionate employees.1âwphi1 This is reprehensible conduct since, as ring frame operator, she must be
13th month pay) instituted by Zenaida on October 4, 1982 in the NCR Arbitration Branch, that at her post during work hours to prevent the occurrence of incidents which could damage
evidence was presented by the company not only of the assault by Zenaida on her superior but also the machine. The company inspector precisely warned her against doing this. She had also
of many other violations by her of company rules and regulations, in an attempt to substantiate the been repeatedly reprimanded for insubordination, habitual tardiness, wasting time and not
validity of her dismissal from work. wearing the required company uniform, In spite of these infractions the company bore with
her services and did not see fit to dismiss her. Her assault on the company inspector was
The Labor Arbiter found that Alonzo had indeed verbally abused and struck her superior, Tamondong, apparently the last straw which compelled Pacific Mills, Inc. to terminate her services.
and rejected her contention that the assault was not punishable since it was "not work-connected
and was provoked/instigated by Ernesto Tamondong." 5 The Arbiter also declared as "fully established Accordingly, the Solicitor General recommended "payment of separation pay equivalent to three (3)
years backwages but without reinstatement" and of "proportionate 13th month pay."
For their part, the Chief Legal Officer of the NLRC, 8 and the private respondent,9 insist that since the General has pointed out, the continuance in the service of the latter is patently inimical to her
dismissal of Zenaida Alonzo was not preceded by any notice of the charges and a hearing thereon, the employer's interests and that, citing San Miguel Corporation v. NLRC,11 the law, in protecting the rights
judgment of the NLRC must be sustained. of the laborer authorizes neither oppression nor self-destruction of the employer. And it was
oppressive and unjust in the premises to require reinstatement of the employee.
Decisive of this controversy is the judgment of the Court en banc in Wenphil Corporation v. NLRC,
promulgated on February 8, 1989,10 in which the following policy pronouncements were made: WHEREFORE, the petition is granted and the challenged decision of the respondent Commission
dated March 23, 1987 and that of the Labor Arbiter thereby affirmed, are NULLIFIED AND SET ASIDE.
The Court holds that the policy of ordering the reinstatement to the service of an employee However, the petitioner is ordered to pay private respondent a proportionate part of the 13th month
without loss of seniority and the payment of his wages during the period of his separation pay due her, amounting to P351.00 as well as to indemnify her in the sum of P1,000.00. No costs.
until his actual reinstatement but not exceeding three (3) years without qualification or
deduction, when it appears he was not afforded due process, although his dismissal was SO ORDERED.
found to be for just and authorized cause in an appropriate proceeding in the Ministry of
Labor and Employment, should be re-examined. It will be highly prejudicial to the interests of
the employer to impose on him the services of an employee who has been shown to be
guilty of the charges that warranted his dismissal from employment. Indeed, it will
demoralize the rank and file if the undeserving, if not undesirable, remains in the service.

Thus in the present case, where the private respondent, who appears to be of violent
temper, caused trouble during office hours and even defied his superiors as they tried to
pacify him, should not be rewarded with reemployment and back wages. It may encourage
him to do even worse and will render a mockery of the rules of discipline that employees are
required to observe. Under the circumstances, the dismissal of the private respondent for
just cause should be maintained. He has no right to return to his former employer.

However, the petitioner (employer) must nevertheless be held to account for failure to
extend to private respondent his right to an investigation before causing his dismissal. The
rule is explicit as above discussed. The dismissal of an employee must be for just or
authorized cause and after due process (Section 1, Rule XIV, Implementing Regulations of the
Labor Code). Petitioner committed an infraction of the second requirement. Thus, it must be
imposed a sanction for its failure to give a formal notice and conduct an investigation as
required by law before dismissing . . . (respondent) from employment. Considering the
circumstances of this case petitioner must indemnify the private respondent the amount of
P1,000.00. The measure of tills award depends on the facts of each case and the gravity of
the omission committed by the employer.

The Court perceives no sufficient cause, it has indeed been cited to none by the respondents, to
decline to apply the Wenphil doctrine to the case at bar.

While it is true that Pacific Mills, Inc. had not complied with the requirements of due process prior to
removing Zenaida Alonzo from employment, it is also true that subsequently, in the proceedings
before the Labor Arbiter in which Zenaida Alonzo had of course taken active part, it had succeeded in G.R. No. 78409 September 14, 1989
satisfactorily proving the commission by Zenaida of many violations of company rules and regulations
justifying termination of her employment. Under the circumstances, it is clear that, as the Solicitor
NORBERTO SORIANO, petitioner, 3. Salary differentials which is equivalent to US$240.00 a month for four (4) months
vs. and one (1) week in the total sum of US$1,020,00;
OFFSHORE SHIPPING AND MANNING CORPORATION, KNUT KNUTSEN O.A.S., and NATIONAL LABOR
RELATIONS COMMISSION (Second Division), respondents. 4. Fixed overtime pay equivalent to US$240.00 a month for four (4) months and one
(1) week in the sum of US$1,020.00;
R. C. Carrera Law Firm for petitioner.
5. Overtime pay for 14 Sundays equivalent to US$484.99;
Elmer V. Pormento for private respondents.
6. Repatriation cost of US$945.46;

FERNAN, C.J.: 7. Petitioner's cash bond of P20,000.00. 1

This is a petition for certiorari seeking to annul and set aside the decision of public respondent In resolving aforesaid case, the Officer-in-Charge of the Philippine Overseas Employment
National Labor Relations Commission affirming the decision of the Philippine Overseas Employment Administration or POEA found that petitioner-complainant's total monthly emolument is US$800.00
Administration in POEA Case No. (M)85-12-0953 entitled "Norberto Soriano v. Offshore Shipping and inclusive of fixed overtime as shown and proved in the Wage Scale submitted to the Accreditation
Manning Corporation and Knut Knutsen O.A.S.", which denied petitioner's claim for salary differential Department of its Office which would therefore not entitle petitioner to any salary differential; that
and overtime pay and limited the reimbursement of his cash bond to P15,000.00 instead of the version of complainant that there was in effect contract substitution has no grain of truth because
P20,000.00. although the Employment Contract seems to have corrections on it, said corrections or alterations are
in conformity with the Wage Scale duly approved by the POEA; that the withholding of a certain
In search for better opportunities and higher income, petitioner Norberto Soriano, a licensed Second amount due petitioner was justified to answer for his repatriation expenses which repatriation was
Marine Engineer, sought employment and was hired by private respondent Knut Knutsen O.A.S. found to have been requested by petitioner himself as shown in the entry in his Seaman's Book; and
through its authorized shipping agent in the Philippines, Offshore Shipping and Manning Corporation. that petitioner deposited a total amount of P15,000.00 only instead of P20,000.00 cash bond. 2
As evidenced by the Crew Agreement, petitioner was hired to work as Third Marine Engineer on
board Knut Provider" with a salary of US$800.00 a month on a conduction basis for a period of fifteen Accordingly, respondent POEA ruled as follows:
(15) days. He admitted that the term of the contract was extended to six (6) months by mutual
agreement on the promise of the employer to the petitioner that he will be promoted to Second VIEWED IN THE LIGHT OF THE FOREGOING, respondents are hereby ordered to pay
Engineer. Thus, while it appears that petitioner joined the aforesaid vessel on July 23, 1985 he signed complainant, jointly and severally within ten (10) days from receipt hereof the
off on November 27, 1985 due to the alleged failure of private respondent-employer to fulfill its amount of P15,000.00 representing the reimbursement of the cash bond deposited
promise to promote petitioner to the position of Second Engineer and for the unilateral decision to by complainant less US$285.83 (to be converted to its peso equivalent at the time
reduce petitioner's basic salary from US$800.00 to US$560.00. Petitioner was made to shoulder his of actual payment).
return airfare to Manila.
Further, attorney's fees equivalent to 10 % of the aforesaid award is assessed
In the Philippines, petitioner filed with the Philippine Overseas Employment Administration (POEA for against respondents.
short), a complaint against private respondent for payment of salary differential, overtime pay, unpaid
salary for November, 1985 and refund of his return airfare and cash bond allegedly in the amount of
All other claims are hereby dismissed for lack of merit.
P20,000.00 contending therein that private respondent unilaterally altered the employment contract
by reducing his salary of US$800.00 per month to US$560.00, causing him to request for his
SO ORDERED. 3
repatriation to the Philippines. Although repatriated, he claims that he failed to receive payment for
the following:
Dissatisfied, both parties appealed the aforementioned decision of the POEA to the National Labor
Relations Commission. Complainant-petitioner's appeal was dismissed for lack of merit while
1. Salary for November which is equivalent to US$800.00;
respondents' appeal was dismissed for having been filed out of time.
2. Leave pay equivalent to his salary for 16.5 days in the sum of US$440.00;
Petitioner's motion for reconsideration was likewise denied. Hence this recourse. that he continue working until the renewed contract has expired, he adamantly insisted on his
termination.
Petitioner submits that public respondent committed grave abuse of discretion and/or acted without
or in excess of jurisdiction by disregarding the alteration of the employment contract made by private Verily, it is quite apparent that the whole conflict centers on the failure of respondent company to
respondent. Petitioner claims that the alteration by private respondent of his salary and overtime rate give the petitioner the desired promotion which appears to be improbable at the moment because
which is evidenced by the Crew Agreement and the exit pass constitutes a violation of Article 34 of the M/V Knut Provider continues to be laid off at Limassol for lack of charterers. 17
the Labor Code of the Philippines. 6
It is axiomatic that laws should be given a reasonable interpretation, not one which defeats the very
On the other hand, public respondent through the Solicitor General, contends that, as explained by purpose for which they were passed. This Court has in many cases involving the construction of
the POEA: "Although the employment contract seems to have corrections, it is in conformity with the statutes always cautioned against narrowly interpreting a statute as to defeat the purpose of the
Wage Scale submitted to said office. 7 legislator and stressed that it is of the essence of judicial duty to construe statutes so as to avoid such
a deplorable result (of injustice or absurdity) and that therefore "a literal interpretation is to be
Apparently, petitioner emphasizes the materiality of the alleged unilateral alteration of the rejected if it would be unjust or lead to absurd results." 18
employment contract as this is proscribed by the Labor Code while public respondent finds the same
to be merely innocuous. We take a closer look at the effects of these alterations upon petitioner's There is no dispute that an alteration of the employment contract without the approval of the
right to demand for his differential, overtime pay and refund of his return airfare to Manila. Department of Labor is a serious violation of law.

A careful examination of the records shows that there is in fact no alteration made in the Crew Specifically, the law provides:
Agreement 8 or in the Exit Pass. 9 As the original data appear, the figures US$800.00 fall under the
column salary, while the word "inclusive" is indicated under the column overtime rate. With the Article 34 paragraph (i) of the Labor Code reads:
supposed alterations, the figures US$560.00 were handwritten above the figures US$800.00 while the
figures US$240.00 were also written above the word "inclusive". Prohibited Practices. — It shall be unlawful for any individual, entity, licensee, or
holder of authority:
As clearly explained by respondent NLRC, the correction was made only to specify the salary and the
overtime pay to which petitioner is entitled under the contract. It was a mere breakdown of the total xxxx
amount into US$560.00 as basic wage and US$240.00 as overtime pay. Otherwise stated, with or
without the amendments the total emolument that petitioner would receive under the agreement as
(i) To substitute or alter employment contracts approved and verified by the
approved by the POEA is US$800.00 monthly with wage differentials or overtime pay included. 10
Department of Labor from the time of actual signing thereof by the parties up to
and including the period of expiration of the same without the approval of the
Moreover, the presence of petitioner's signature after said items renders improbable the possibility Department of Labor.
that petitioner could have misunderstood the amount of compensation he will be receiving under the
contract. Nor has petitioner advanced any explanation for statements contrary or inconsistent with
In the case at bar, both the Labor Arbiter and the National Labor Relations Commission correctly
what appears in the records. Thus, he claimed: [a] that private respondent extended the duration of
analyzed the questioned annotations as not constituting an alteration of the original employment
the employment contract indefinitely, 11 but admitted in his Reply that his employment contract was
contract but only a clarification thereof which by no stretch of the imagination can be considered a
extended for another six (6) months by agreement between private respondent and himself: 12 [b]
violation of the above-quoted law. Under similar circumstances, this Court ruled that as a general
that when petitioner demanded for his overtime pay, respondents repatriated him 13which again was
proposition, exceptions from the coverage of a statute are strictly construed. But such construction
discarded in his reply stating that he himself requested for his voluntary repatriation because of the
nevertheless must be at all times reasonable, sensible and fair. Hence, to rule out from the exemption
bad faith and insincerity of private respondent; 14 [c] that he was required to post a cash bond in the
amendments set forth, although they did not materially change the terms and conditions of the
amount of P20,000.00 but it was found that he deposited only the total amount of P15,000.00; [d]
original letter of credit, was held to be unreasonable and unjust, and not in accord with the declared
that his salary for November 1985 was not paid when in truth and in fact it was petitioner who owes
purpose of the Margin Law. 19
private respondent US$285.83 for cash advances 15 and on November 27, 1985 the final pay slip was
executed and signed; 16 and [e] that he finished his contract when on the contrary, despite proddings
The purpose of Article 34, paragraph 1 of the Labor Code is clearly the protection of both parties. In
the instant case, the alleged amendment served to clarify what was agreed upon by the parties and
approved by the Department of Labor. To rule otherwise would go beyond the bounds of reason and
justice.

As recently laid down by this Court, the rule that there should be concern, sympathy and solicitude
for the rights and welfare of the working class, is meet and proper. That in controversies between a
laborer and his master, doubts reasonably arising from the evidence or in the interpretation of
agreements and writings should be resolved in the former's favor, is not an unreasonable or unfair
rule. 20 But to disregard the employer's own rights and interests solely on the basis of that concern
and solicitude for labor is unjust and unacceptable.

Finally, it is well-settled that factual findings of quasi-judicial agencies like the National Labor Relations
Commission which have acquired expertise because their jurisdiction is confined to specific matters
are generally accorded not only respect but at times even finality if such findings are supported by
substantial evidence.21

In fact since Madrigal v. Rafferty 22 great weight has been accorded to the interpretation or
construction of a statute by the government agency called upon to implement the same. 23

WHEREFORE, the instant petition is DENIED. The assailed decision of the National Labor Relations
Commission is AFFIRMED in toto.

SO ORDERED.

G.R. No. 46727 September 27, 1939

PAMBUSCO EMPLOYEES' UNION, INC., petitioner, After the enactment of Act No. 4242 several transportation companies operating motor
vs. buses filed with Commissioner of Labor petitions for a readjustment of the hours of labor
THE COURT OF INDUSTRIAL RELATIONS, composed to Honorables Francisco Zulueta, Leopoldo specified in section 1 of the Act on the basis of maintaining the status quo as to the hours the
Rovira, and Jose Generoso, and PAMPANGA BUS COMPANY, INC., respondents. drivers were required to be actually on duty in order to enable them to make the prescribed
hours daily that the exigencies of the service required. The petitions were based on the
Jose Alejandrino for petitioner. impracticability of applying the provisions of the law to drivers of public service vehicles
Manuel Escudero for respondent court. without disrupting the public service and causing pecuniary loss to both employers and
L.D. Lockwood for respondent Pampanga Bus Co., Inc. employees alike, and the resulting difficulties on the part of the drivers. The testimony of
Atty. Carlos Alvear on this point in uncontradicted. He testified that in 1935, he was president
LAUREL, J.: of the Philippine Motor Association composed of bus operators operating in the Philippines,
of which the respondent is a member. Major Olson, who was at the time the executive
This is a petition for a writ of certiorari to review the decision of the Court of Industrial Relations
secretary of the association, and himself took up the matter with the Secretary of the
promulgated on January 14, 1939, denying the demands of the Pambusco Employees' Union, Inc.
Interior and the Secretary of Labor after the passage of the Act extending the operation of
The following are the pertinent facts which have given occasion to this industrial dispute: On March the Eight Labor Law to drivers. In their conference with the Commissioner of Labor, they
26, 1938, the Pambusco Employees' Union, Inc., addressed a thirteen- point petition to the were told to take advantage of the provisions of the law in which they may apply for the
management of the Pampanga Bus Co. Upon the failure of the company officials to act upon the readjustment of the working hours, and in conformity with that suggestion, the executive
petition, a strike was declared by the workers on April 14, 1938. However, through the timely secretary of the association filed a formal petition, Exhibit 10, on September 5, 1935. When
mediation of the Department of Labor, a provisional agreement was reached, by virtue of which the this was filed the Department of Labor further suggested that the drivers of each company
strike was called off, eight demands were granted, and the remaining five were submitted to the Court file and address a petition of similar nature designating their representatives who will
of Industrial Relations for settlement. One of these demands, in the language of the petitioner, is that represent them in a conference that the Commissioner of Labor may call for the purpose.
the respondent Pampanga Bus Co. "pay to all Company drivers affiliated with the Pambusco With the filing of the petition, the conferees were assured by the Under-Secretary of Labor
Employees' Union, Inc., all the back overtime pay due them under the law." After trial on the disputed that the enforcement of the Eight Hour Labor Law in so far as the drivers were concerned,
demands, the Court of Industrial Relations decided inter alia that the claim for back overtime pay will be held in abeyance until such time as the meeting or investigations are held. It is not
could not be allowed. clear as to whether investigations and hearings were finally made but the evidence indicates
that the petition was never decided and the companies continued its schedule of hours.
The pertinent portion of the decision of the respondent Court of Industrial Relations is as follows:
Sections 3 and 4 of Act No. 4123 read as follows:
The evidence is clear that even before the final approval of Act No. 4242 amending Act No.
4123, the Eight Hour Labor Law, by extending the provisions of the latter to other class of "SEC. 3. The Commissioner of Labor, with the advice of two representatives of the employers
laborers including drivers of public service vehicles, a petition was addressed by 44 drivers of concerned, designated by the latter, and of two representatives of the laborers concerned,
the company to the Governor-General asking him to veto the bill amending the law designated by these, shall, at the request of an interested party, decide in each case whether
extending it to drivers for the reason stated in their petition (Exhibit 5 and 5-a). About the or not it is proper to increase or decrease the number of hours of labor fixed in section one
6th day of September, 1935, a petition was again addressed by 97 drivers of the company to of this Act, either because the organization or nature of the work require it, or because of
the Commissioner of Labor requesting adjustment of working hours to permit them to retain lack or insufficiency of competent laborers for certain work in a locality, or because the
their present status with the company as nearly as possible under the law (Exhibits 4, 4-a, 4- relieving of the laborers must be done under certain conditions, or by reason of any other
b, 4-c, 4-d and 4-e). This petition was prepared after a meeting of the employees was held exceptional circumstances or conditions of the work or industry concerned; but the number
and was drawn with the help of the manager of the respondent about the last days of of hours of labor shall in no case exceed twelve daily or seventy-two weekly.
August, 1935. In September, 1937, about 347 employees of the different departments of the
"SEC. 4. Employees or laborers desiring an increase or decrease of the number of hours of
company again addresses a petition to the Director of Labor expressing their satisfaction with
labor shall address an application to this effect to the Commissioner of Labor, stating their
the hours they work and the pay they receive for their labor including the special bonuses
reasons. Upon receipt of an application of this kind, the Commissioner of Labor shall call a
and overtime pay they receive for extra work, and asking, in view thereof, that the law be not
meeting of the employers and laborers of the establishment or industry concerned, for the
applied to them (Exhibits 6, 6-a to 6-g).
designation of advisers as provided in the preceding section hereof. The Commissioner of
Labor or his authorized representative, together with the advisers, shall make an
 investigation of the facts, giving special attention, in the first place, to the human aspect, and employees who were assigned to routes where the daily working hours exceeded the
in the second place, to the economic aspect of the matter, and he may for this purpose maximum fixed by law. The evidence that the company paid additional salaries not only to
administer oaths, take affidavits examine witnesses and documents and drivers but also to its conductors who were assigned to such routes stands uncontradicted
issue subpoenas and subpoenas duces tecum. The decision of the Commissioner of Labor and no attempt even was made by the petitioner to deny it. Without need of passing on the
may be reconsidered by him at any time." question as to whether the provisions of the law are mandatory or not, in the light of the
above facts and applying the rules of equity invoked by the union, we are constrained to hold
It seems clear that the petitions of both employers and employees for the non-enforcement that the petitioners are not rightly entitled to the payment sought.
of the Eight Hour Labor Law were made in accordance with these provisions of the law.
Exhibit 9 of the respondent which is a communication addressed by the Under-Secretary of In Kapisanan ng mga Manggagawa sa Pantranco vs. Pangasinan Transportation Co. (39 Off. Gaz.,
Labor on September 6, 1935, to the A.L. Ammen Transportation Company, Inc., defines the 1217), we have held that, to be entitled to the benefits of section 5 of Act No. 4123, fulfillment of the
attitude taken by the Department of Labor in connection with those petitions. It advises the mandate of the law is necessary, this being a matter of public interest. Where both parties, as in this
company to submit an application under sections 3 and 4 of Act No. 4123 above-quoted for case, we have violated the law, this court must decline to extend the strong arm of equity, as neither
an increase of working hours of such laborers as may fall under the amendment and that party is entitled to its aid. This is especially true in view of the findings of fact made by the Court of
pending final solution of said application, the Department of Labor will not make any Industrial Relations which we should not disturb.
attempt to enforce said amendment. As has already been stated it is not clear whether final
action or decision has been made on the applications with respect to the drivers of the We are not, to be sure insensible to the argument that industrial disputes should be decided with an
respondent; that it is undeniable fact that up to the outbreak of the dispute, the law was not eye on the welfare of the working class, who, in the inter-play of economic forces, is said to find itself
observed nor enforced in the company; and that upon mutual agreement arrived at by the in the "end of the stick." In the case at bar, however, we find no reason for disturbing the action taken
parties on April 14, 1938, the company worked out a schedule beginning May 1, 1938, by the respondent Court of Industrial Relations, which is a special court enjoined to "act according to
placing all its employees under an eight-hour schedule. justice and equity and substantial merits of the case, without regard to technicalities or legal forms
and shall not be bound by any technical rules of legal evidence but may inform its mind in such
In view of the foregoing fact, the court is the opinion that the drivers are not entitled to the manner as it may deem just and equitable" (sec. 20, Commonwealth Act No. 103).
overtime pay demanded for the whole period the law was not observed or enforced in the
company. They are entitled to payment of wages for hours worked in excess of the legal The petition is dismissed, without pronouncement regarding costs. So ordered.
hours only beginning May 1, 1938.

On January 30, 1939, the petitioner filed a motion for reconsideration which was denied by the Court
of Industrial Relations, sitting in banc, with the following observations:

We have reviewed carefully the evidence on record with regard to the claim for back
overtime pay we find that it amply supports the findings and conclusions set forth in support
of the motion for reconsideration are virtually a repetition of the reasons advanced in the
memorandum of the petitioner filed before the case was decided and were already
discussed and considered in the decision. The evidence permits no other conclusion than
that the employees were not coerced not intimidated by the respondent on the repeated
occasions they signed and presented to the Department of Labor their petitions for non-
enforcement of the Eight Hour Labor Law. The employees were indubitably aware of certain
G.R. No. 79255 January 20, 1992
hardships the enforcement of the law at that time would bring to them and these prompted
their attitude of preferring the continuation of the schedule of hours observed prior to the
enactment of the legislation extending the benefits of the Eight Hour Labor Law to drivers of UNION OF FILIPRO EMPLOYEES (UFE), petitioner,
motor vehicles in public utility enterprises. Whatever pecuniary advantage they would have vs.
gained by the strict observance of the law by the company should they be made to work BENIGNO VIVAR, JR., NATIONAL LABOR RELATIONS COMMISSION and NESTLÉ PHILIPPINES, INC.
more than eight hours a day was apparently waived or given up by them in exchange of their (formerly FILIPRO, INC.), respondents.
personal convenience and of the additional monthly pay the respondent gave to those
Jose C. Espinas for petitioner.
Siguion Reyna, Montecillo & Ongsiako for private respondent. Both Nestle and UFE filed their respective motions for partial reconsideration. Respondent Arbitrator
treated the two motions as appeals and forwarded the case to the NLRC which issued a resolution
dated May 25, 1987 remanding the case to the respondent arbitrator on the ground that it has no
jurisdiction to review decisions in voluntary arbitration cases pursuant to Article 263 of the Labor
GUTIERREZ, JR., J.: Code as amended by Section 10, Batas Pambansa Blg. 130 and as implemented by Section 5 of the
rules implementing B.P. Blg. 130.
This labor dispute stems from the exclusion of sales personnel from the holiday pay award and the
change of the divisor in the computation of benefits from 251 to 261 days. However, in a letter dated July 6, 1987, the respondent arbitrator refused to take cognizance of the
case reasoning that he had no more jurisdiction to continue as arbitrator because he had resigned
from service effective May 1, 1986.
On November 8, 1985, respondent Filipro, Inc. (now Nestle Philippines, Inc.) filed with the National
Labor Relations Commission (NLRC) a petition for declaratory relief seeking a ruling on its rights and
obligations respecting claims of its monthly paid employees for holiday pay in the light of the Court's Hence, this petition.
decision in Chartered Bank Employees Association v. Ople (138 SCRA 273 [1985]).
The petitioner union raises the following issues:
Both Filipro and the Union of Filipino Employees (UFE) agreed to submit the case for voluntary
arbitration and appointed respondent Benigno Vivar, Jr. as voluntary arbitrator. 1) Whether or not Nestle's sales personnel are entitled to holiday pay; and

On January 2, 1980, Arbitrator Vivar rendered a decision directing Filipro to: 2) Whether or not, concomitant with the award of holiday pay, the divisor should be changed from
251 to 261 days and whether or not the previous use of 251 as divisor resulted in overpayment for
pay its monthly paid employees holiday pay pursuant to Article 94 of the Code, overtime, night differential, vacation and sick leave pay.
subject only to the exclusions and limitations specified in Article 82 and such other
legal restrictions as are provided for in the Code. (Rollo, The petitioner insists that respondent's sales personnel are not field personnel under Article 82 of the
p. 31) Labor Code. The respondent company controverts this assertion.

Filipro filed a motion for clarification seeking (1) the limitation of the award to three years, (2) Under Article 82, field personnel are not entitled to holiday pay. Said article defines field personnel as
the exclusion of salesmen, sales representatives, truck drivers, merchandisers and medical "non-agritultural employees who regularly perform their duties away from the principal place of
representatives (hereinafter referred to as sales personnel) from the award of the holiday pay, and (3) business or branch office of the employer and whose actual hours of work in the field cannot be
deduction from the holiday pay award of overpayment for overtime, night differential, vacation and determined with reasonable certainty."
sick leave benefits due to the use of 251 divisor. (Rollo, pp. 138-145)
The controversy centers on the interpretation of the clause "whose actual hours of work in the field
Petitioner UFE answered that the award should be made effective from the date of effectivity of the cannot be determined with reasonable certainty."
Labor Code, that their sales personnel are not field personnel and are therefore entitled to holiday
pay, and that the use of 251 as divisor is an established employee benefit which cannot be It is undisputed that these sales personnel start their field work at 8:00 a.m. after having reported to
diminished. the office and come back to the office at 4:00 p.m. or 4:30 p.m. if they are Makati-based.

On January 14, 1986, the respondent arbitrator issued an order declaring that the effectivity of the The petitioner maintains that the period between 8:00 a.m. to 4:00 or 4:30 p.m. comprises the sales
holiday pay award shall retroact to November 1, 1974, the date of effectivity of the Labor Code. He personnel's working hours which can be determined with reasonable certainty.
adjudged, however, that the company's sales personnel are field personnel and, as such, are not
entitled to holiday pay. He likewise ruled that with the grant of 10 days' holiday pay, the divisor should The Court does not agree. The law requires that the actual hours of work in the field be reasonably
be changed from 251 to 261 and ordered the reimbursement of overpayment for overtime, night ascertained. The company has no way of determining whether or not these sales personnel, even if
differential, vacation and sick leave pay due to the use of 251 days as divisor. they report to the office before 8:00 a.m. prior to field work and come back at 4:30 p.m, really spend
the hours in between in actual field work.
We concur with the following disquisition by the respondent arbitrator: expounded the clause "whose actual hours of work in the field cannot be determined with reasonable
certainty." The former clause is still within the scope and purview of Article 82 which defines field
The requirement for the salesmen and other similarly situated employees to report personnel. Hence, in deciding whether or not an employee's actual working hours in the field can be
for work at the office at 8:00 a.m. and return at 4:00 or 4:30 p.m. is not within the determined with reasonable certainty, query must be made as to whether or not such employee's
realm of work in the field as defined in the Code but an exercise of purely time and performance is constantly supervised by the employer.
management prerogative of providing administrative control over such personnel.
This does not in any manner provide a reasonable level of determination on the The SOD schedule adverted to by the petitioner does not in the least signify that these sales
actual field work of the employees which can be reasonably ascertained. The personnel's time and performance are supervised. The purpose of this schedule is merely to ensure
theoretical analysis that salesmen and other similarly-situated workers regularly that the sales personnel are out of the office not later than 8:00 a.m. and are back in the office not
report for work at 8:00 a.m. and return to their home station at 4:00 or 4:30 p.m., earlier than 4:00 p.m.
creating the assumption that their field work is supervised, is surface projection.
Actual field work begins after 8:00 a.m., when the sales personnel follow their field Likewise, the Court fails to see how the company can monitor the number of actual hours spent in
itinerary, and ends immediately before 4:00 or 4:30 p.m. when they report back to field work by an employee through the imposition of sanctions on absenteeism contained in the
their office. The period between 8:00 a.m. and 4:00 or 4:30 p.m. comprises their company circular of March 15, 1984.
hours of work in the field, the extent or scope and result of which are subject to
their individual capacity and industry and which "cannot be determined with The petitioner claims that the fact that these sales personnel are given incentive bonus every quarter
reasonable certainty." This is the reason why effective supervision over field work of based on their performance is proof that their actual hours of work in the field can be determined
salesmen and medical representatives, truck drivers and merchandisers is practically with reasonable certainty.
a physical impossibility. Consequently, they are excluded from the ten holidays with
pay award. (Rollo, pp. 36-37)
The Court thinks otherwise.

Moreover, the requirement that "actual hours of work in the field cannot be determined with
The criteria for granting incentive bonus are: (1) attaining or exceeding sales volume based on sales
reasonable certainty" must be read in conjunction with Rule IV, Book III of the Implementing Rules
target; (2) good collection performance; (3) proper compliance with good market hygiene; (4) good
which provides:
merchandising work; (5) minimal market returns; and (6) proper truck maintenance. (Rollo, p. 190).

Rule IV Holidays with Pay

The above criteria indicate that these sales personnel are given incentive bonuses precisely because
of the difficulty in measuring their actual hours of field work. These employees are evaluated by the
Sec. 1. Coverage — This rule shall apply to all employees except: result of their work and not by the actual hours of field work which are hardly susceptible to
determination.
xxx xxx xxx
In San Miguel Brewery, Inc. v. Democratic Labor Organization (8 SCRA 613 [1963]), the Court had
(e) Field personnel and other employees whose time and performance is occasion to discuss the nature of the job of a salesman. Citing the case of Jewel Tea
unsupervised by the employer . . . (Emphasis supplied) Co. v. Williams, C.C.A. Okla., 118 F. 2d 202, the Court stated:

While contending that such rule added another element not found in the law (Rollo, p. 13), the The reasons for excluding an outside salesman are fairly apparent. Such a salesman,
petitioner nevertheless attempted to show that its affected members are not covered by the to a greater extent, works individually. There are no restrictions respecting the time
abovementioned rule. The petitioner asserts that the company's sales personnel are strictly he shall work and he can earn as much or as little, within the range of his ability, as
supervised as shown by the SOD (Supervisor of the Day) schedule and the company circular dated his ambition dictates. In lieu of overtime he ordinarily receives commissions as extra
March 15, 1984 (Annexes 2 and 3, Rollo, pp. 53-55). compensation. He works away from his employer's place of business, is not subject
to the personal supervision of his employer, and his employer has no way of
Contrary to the contention of the petitioner, the Court finds that the aforementioned rule did not add knowing the number of hours he works per day.
another element to the Labor Code definition of field personnel. The clause "whose time and
performance is unsupervised by the employer" did not amplify but merely interpreted and
While in that case the issue was whether or not salesmen were entitled to overtime pay, the same monthly rate x 12 months
rationale for their exclusion as field personnel from holiday pay benefits also applies.
———————————
The petitioner union also assails the respondent arbitrator's ruling that, concomitant with the award
of holiday pay, the divisor should be changed from 251 to 261 days to include the additional 10 251 days
holidays and the employees should reimburse the amounts overpaid by Filipro due to the use of 251
days' divisor. Following the criterion laid down in the Chartered Bank case, the use of 251 days' divisor by
respondent Filipro indicates that holiday pay is not yet included in the employee's salary, otherwise
Arbitrator Vivar's rationale for his decision is as follows: the divisor should have been 261.

. . . The new doctrinal policy established which ordered payment of ten holidays It must be stressed that the daily rate, assuming there are no intervening salary increases, is a
certainly adds to or accelerates the basis of conversion and computation by ten constant figure for the purpose of computing overtime and night differential pay and commutation of
days. With the inclusion of ten holidays as paid days, the divisor is no longer 251 but sick and vacation leave credits. Necessarily, the daily rate should also be the same basis for computing
261 or 262 if election day is counted. This is indeed an extremely difficult legal the 10 unpaid holidays.
question of interpretation which accounts for what is claimed as falling within the
concept of "solutio indebti." The respondent arbitrator's order to change the divisor from 251 to 261 days would result in a lower
daily rate which is violative of the prohibition on non-diminution of benefits found in Article 100 of
When the claim of the Union for payment of ten holidays was granted, there was a the Labor Code. To maintain the same daily rate if the divisor is adjusted to 261 days, then the
consequent need to abandon that 251 divisor. To maintain it would create an dividend, which represents the employee's annual salary, should correspondingly be increased to
impossible situation where the employees would benefit with additional ten days incorporate the holiday pay. To illustrate, if prior to the grant of holiday pay, the employee's annual
with pay but would simultaneously enjoy higher benefits by discarding the same ten salary is P25,100, then dividing such figure by 251 days, his daily rate is P100.00 After the payment of
days for purposes of computing overtime and night time services and considering 10 days' holiday pay, his annual salary already includes holiday pay and totals P26,100 (P25,100 +
sick and vacation leave credits. Therefore, reimbursement of such overpayment 1,000). Dividing this by 261 days, the daily rate is still P100.00. There is thus no merit in respondent
with the use of 251 as divisor arises concomitant with the award of ten holidays Nestle's claim of overpayment of overtime and night differential pay and sick and vacation leave
with pay. (Rollo, p. 34) benefits, the computation of which are all based on the daily rate, since the daily rate is still the same
before and after the grant of holiday pay.
The divisor assumes an important role in determining whether or not holiday pay is already included
in the monthly paid employee's salary and in the computation of his daily rate. This is the thrust of Respondent Nestle's invocation of solutio indebiti, or payment by mistake, due to its use of 251 days
our pronouncement in Chartered Bank Employees Association v. Ople (supra). In that case, We held: as divisor must fail in light of the Labor Code mandate that "all doubts in the implementation and
interpretation of this Code, including its implementing rules and regulations, shall be resolved in favor
It is argued that even without the presumption found in the rules and in the policy of labor." (Article 4). Moreover, prior to September 1, 1980, when the company was on a 6-day
instruction, the company practice indicates that the monthly salaries of the working schedule, the divisor used by the company was 303, indicating that the 10 holidays were
employees are so computed as to include the holiday pay provided by law. The likewise not paid. When Filipro shifted to a 5-day working schebule on September 1, 1980, it had the
petitioner contends otherwise. chance to rectify its error, if ever there was one but did not do so. It is now too late to allege payment
by mistake.
One strong argument in favor of the petitioner's stand is the fact that the Chartered
Bank, in computing overtime compensation for its employees, employs a "divisor" Nestle also questions the voluntary arbitrator's ruling that holiday pay should be computed from
of 251 days. The 251 working days divisor is the result of subtracting all Saturdays, November 1, 1974. This ruling was not questioned by the petitioner union as obviously said decision
Sundays and the ten (10) legal holidays from the total number of calendar days in a was favorable to it. Technically, therefore, respondent Nestle should have filed a separate petition
year. If the employees are already paid for all non-working days, the divisor should raising the issue of effectivity of the holiday pay award. This Court has ruled that an appellee who is
be 365 and not 251. not an appellant may assign errors in his brief where his purpose is to maintain the judgment on other
grounds, but he cannot seek modification or reversal of the judgment or affirmative relief unless he
In the petitioner's case, its computation of daily ratio since September 1, 1980, is as follows: has also appealed. (Franco v. Intermediate Appellate Court, 178 SCRA 331 [1989], citing La Campana
Food Products, Inc. v. Philippine Commercial and Industrial Bank, 142 SCRA 394 [1986]). Nevertheless, In the language of an American Supreme Court decision: "The actual existence of a
in order to fully settle the issues so that the execution of the Court's decision in this case may not be statute, prior to such a determination of [unconstitutionality], is an operative fact
needlessly delayed by another petition, the Court resolved to take up the matter of effectivity of the and may have consequences which cannot justly be ignored. The past cannot always
holiday pay award raised by Nestle. be erased by a new judicial declaration. The effect of the subsequent ruling as to
invalidity may have to be considered in various aspects, — with respect to particular
Nestle insists that the reckoning period for the application of the holiday pay award is 1985 when relations, individual and corporate, and particular conduct, private and official."
the Chartered Bank decision, promulgated on August 28, 1985, became final and executory, and not (Chicot County Drainage Dist. v. Baxter States Bank, 308 US 371, 374 [1940]). This
from the date of effectivity of the Labor Code. Although the Court does not entirely agree with Nestle, language has been quoted with approval in a resolution in Araneta v. Hill (93 Phil.
we find its claim meritorious. 1002 [1952]) and the decision in Manila Motor Co., Inc. v. Flores (99 Phil. 738
[1956]). An even more recent instance is the opinion of Justice Zaldivar speaking for
In Insular Bank of Asia and America Employees' Union (IBAAEU) v. Inciong, 132 SCRA 663 [1984], the Court in Fernandez v. Cuerva and Co. (21 SCRA 1095 [1967]. (At pp. 434-435)
hereinafter referred to as the IBAA case, the Court declared that Section 2, Rule IV, Book III of the
implementing rules and Policy Instruction No. 9, issued by the then Secretary of Labor on February 16, The "operative fact" doctrine realizes that in declaring a law or rule null and void, undue harshness
1976 and April 23, 1976, respectively, and which excluded monthly paid employees from holiday pay and resulting unfairness must be avoided. It is now almost the end of 1991. To require various
benefits, are null and void. The Court therein reasoned that, in the guise of clarifying the Labor Code's companies to reach back to 1975 now and nullify acts done in good faith is unduly harsh. 1984 is a
provisions on holiday pay, the aforementioned implementing rule and policy instruction amended fairer reckoning period under the facts of this case.
them by enlarging the scope of their exclusion. The Chartered Bank case reiterated the above ruling
and added the "divisor" test. Applying the aforementioned doctrine to the case at bar, it is not far-fetched that Nestle, relying on
the implicit validity of the implementing rule and policy instruction before this Court nullified them,
However, prior to their being declared null and void, the implementing rule and policy instruction and thinking that it was not obliged to give holiday pay benefits to its monthly paid employees, may
enjoyed the presumption of validity and hence, Nestle's non-payment of the holiday benefit up to the have been moved to grant other concessions to its employees, especially in the collective bargaining
promulgation of the IBAA case on October 23, 1984 was in compliance with these presumably valid agreement. This possibility is bolstered by the fact that respondent Nestle's employees are among the
rule and policy instruction. highest paid in the industry. With this consideration, it would be unfair to impose additional burdens
on Nestle when the non-payment of the holiday benefits up to 1984 was not in any way attributed to
In the case of De Agbayani v. Philippine National Bank, 38 SCRA 429 [1971], the Court discussed the Nestle's fault.
effect to be given to a legislative or executive act subsequently declared invalid:
The Court thereby resolves that the grant of holiday pay be effective, not from the date of
xxx xxx xxx promulgation of the Chartered Bank case nor from the date of effectivity of the Labor Code, but from
October 23, 1984, the date of promulgation of the IBAA case.
. . . It does not admit of doubt that prior to the declaration of nullity such challenged
legislative or executive act must have been in force and had to be complied with. WHEREFORE, the order of the voluntary arbitrator in hereby MODIFIED. The divisor to be used in
This is so as until after the judiciary, in an appropriate case, declares its invalidity, it computing holiday pay shall be 251 days. The holiday pay as above directed shall be computed from
is entitled to obedience and respect. Parties may have acted under it and may have October 23, 1984. In all other respects, the order of the respondent arbitrator is hereby AFFIRMED.
changed their positions. What could be more fitting than that in a subsequent
litigation regard be had to what has been done while such legislative or executive SO ORDERED.
act was in operation and presumed to be valid in all respects. It is now accepted as a
doctrine that prior to its being nullified, its existence as a fact must be reckoned
with. This is merely to reflect awareness that precisely because the judiciary is the
government organ which has the final say on whether or not a legislative or
executive measure is valid, a period of time may have elapsed before it can exercise
the power of judicial review that may lead to a declaration of nullity. It would be to
deprive the law of its quality of fairness and justice then, if there be no recognition
of what had transpired prior to such adjudication.
G.R. Nos. 117442-43 January 11, 1995

FEM'S ELEGANCE LODGING HOUSE, FENITHA SAAVEDRA and IRIES ANTHONY

SAAVEDRA, petitioners,
vs.
The Honorable LEON P. MURILLO, Labor Arbiter, Regional Arbitration Branch, Region X, National
Labor Relations Commission, Cagayan de Oro City, ALFONSO GALLETO, GEORGE VEDAD, ROLAND
PANTONIAL, REYNALDO DELAORAO, FELICISIMO BAQUILID, CECILIO SAJOL, ANNABEL CASTRO,
BENJAMIN CABRERA, RHONDEL PADERANGA, ZENAIDA GUTIB, AIDA IMBAT and MARIA GRACE
ATUEL, respondents.

RESOLUTION

QUIASON, J.:

This is a petition for certiorari under Rule 65 of the Revised Rules of court with temporary restraining
order to reverse and set aside the Order dated September 21, 1994 of the Labor Arbiter in the NLRC
RAB X Cases Nos. 10-04-00232 (-00233)-94.

Petitioner FEM's elegance Lodging House is a business enterprise engaged in providing lodging
accommodations. It is owned by petitioner Fenitha Saavedra and managed by petitioner Iries Anthony
Saavedra. Private respondents are former employees of petitioners whose services were terminated
between March and April, 1994.

Sometime after their dismissal from the employment of petitioners, private respondents separately
filed two cases against petitioners before the National Labor Relations Commission (NLRC), Regional
Arbitration Branch No. X, Cagayan de Oro City, docketed as NLRC RAB X Cases Nos. 10-04-00232- Petitioners claimed that they were denied due process and that the Labor Arbiter should have cited
(0023)-94. Private respondents sought for unpaid benefits such as minimum wage, overtime pay, rest private respondents in contempt for their failure to comply with their agreement in the pre-
day pay, holiday pay, full thirteenth-month pay and separation pay (Rollo, pp. 40-42). arbitration conference.

On May 31, 1994, a pre-arbitration conference of the cases took place before the Labor Arbiter. It was We dismiss the petition for failure of petitioners to exhaust their remedies, particularly in seeking
agreed therein: (1) that both labor cases should be consolidated; and (2) that the parties would file redress from the NLRC prior to the filing of the instant petition. Article 223 of the Labor code of the
their respective position papers within thirty days from said date or until June 30, 1994, after which Philippines provides that decisions, awards or orders of the Labor Arbiter are appealable to the NLRC.
the cases would be deemed submitted for resolution (Rollo, p. 14). Thus, petitioners should have first appealed the questioned order of the Labor Arbiter to the NLRC,
and not to this court. their omission is fatal to their cause.
On June 29, petitioners filed their position paper. On July 7, they inquired from the NLRC whether
private respondents had filed their position paper. The receiving clerk of the NLRC confirmed that as However, even if the petition was given due course, we see no merit in petitioners' arguments. The
of said date private respondents had not yet filed their position paper. delay of private respondents in the submission of their position paper is a procedural flaw, and the
admission thereof is within the discretion of the Labor Arbiter.
The following events then transpired: on July 8, petitioners filed a Motion to dismiss for failure of
private respondents to file their position paper within the agreed period (Rollo, p. 38); on July 15, Well-settled is the rule that technical rules of procedure are not binding in labor cases, for procedural
private respondents belatedly filed their position paper; on July 18, petitioners filed a Motion to lapses may be disregarded in the interest of substantial justice, particularly where labor matters are
Expunge [private respondents'] Position Paper from the records of the case (Rollo, p. 45); and on concerned (Ranara v. National Labor Relations commission, 212 SCRA 631 [1992]).
August 23, the Labor Arbiter issued a notice of clarificatory hearing, which was set for September 7
(Rollo, p. 47). Prior to the hearing, petitioners filed a Motion to Resolve [petitioners'] Motion to The failure to submit a position paper on time is not on of the grounds for the dismissal of a
dismiss and Motion to Expunge [private respondent'] Position Paper from the Records of the Case complaint in labor cases (The New Rules of procedure of the NLRC, Rule V, Section 15). It cannot
(Rollo, p. 48). therefore be invoked by petitioners to declare private respondents as non-suited. This stance is in
accord with Article 4 of the Labor Code of the Philippines, which resolves that all doubts in the
On September 21, the Labor Arbiter issued the order denying the motions filed by petitioners. He interpretation of the law and its implementing rules and regulations shall be construed in favor of
held that a fifteen-day delay in filing the position paper was not unreasonable considering that the labor. Needless to state, our jurisprudence is rich with decisions adhering to the State's basic policy of
substantive rights of litigants should not be sacrificed by technicality. He cited Article 4 of the Labor extending protection to Labor where conflicting interests between labor and management exist
Code of the Philippines, which provides that all doubts in the interpretation thereof shall be resolved (Aquino v. National Labor Relations Commission, 206 SCRA 118 [1992]).
in favor of labor. He said that even under Section 15, Rule 5 of the Revised Rules of Court, a delay in
the filing of a position paper is not a ground for a motion to dismiss under the principle of exclusio Petitioners cannot claim that they were denied due process inasmuch as they were able to file their
unius est excludio alterius (Rollo, pp. 51-52). position paper. The proper party to invoke due process would have been private respondents, had
their position paper been expunged from the records for mere technicality. Since petitioners assert
Hence, the present petition where petitioners charged the Labor Arbiter with grave abuse of that their defense is meritorious, it is to their best interest that the cases be resolved on the merits. In
discretion for issuing the order in contravention of Section 3, Rule V of The New Rules of Procedure of this manner, the righteousness of their cause can be vindicated.
the NLRC, Said section provides:
IN VIEW OF THE FOREGOING, the Court Resolved to DISMISS the petition for lack of merit.
Submission of Position Papers/Memorandum. — . . . Unless otherwise requested in
writing by both parties, the Labor Arbiter shall direct both parties to SO ORDERED.
submit simultaneously their position papers/memorandum with the supporting
documents and affidavits within fifteen (15) calendar days from the date of the last
conference, with proof of having furnished each other with copies thereof
(Emphasis supplied).