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THIRD DIVISION

CAPITOL MEDICAL CENTER, INC. and G.R. No. 155098


DR. THELMA
NAVARETTE-CLEMENTE, Present:
Petitioners,
PANGANIBAN, Chairman,
SANDOVAL- GUTIERREZ,
CORONA,
- versus - CARPIO MORALES, and
GARCIA, JJ.

Promulgated:
DR. CESAR E. MERIS,
Respondent. September 16, 2005

xx - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -xx

DECISION

CARPIO MORALES, J.:

Subject of the present appeal is the Court of Appeals Decision[1] dated February 15, 2002 reversing the NLRC
Resolution[2] dated January 19, 1999 and Labor Arbiter Decision[3] dated April 28, 1998 which both held that the closure of the
Industrial Service Unit of the

Capitol Medical Center, Inc., resulting to the termination of the services of herein respondent Dr. Cesar Meris as Chief thereof,
was valid.

On January 16, 1974, petitioner Capitol Medical Center, Inc. (Capitol) hired Dr. Cesar Meris (Dr. Meris),[4] one of its
stockholders,[5] as in charge of its Industrial Service Unit (ISU) at a monthly salary of P10,270.00.

Until the closure of the ISU on April 30, 1992,[6] Dr. Meris performed dual functions of providing medical services to Capitols
more than 500 employees and health workers as well as to employees and workers of companies having retainer contracts with
it.[7]

On March 31, 1992, Dr. Meris received from Capitols president and chairman of the board, Dr. Thelma Navarette-Clemente (Dr.
Clemente), a notice advising him of the managements decision to close or abolish the ISU and the consequent termination of his
services as Chief thereof, effective April 30, 1992.[8] The notice reads as follows:

March 31, 1992

Dr. Cesar E. Meris


Chief, Industrial Service Unit
Capitol Medical Center

Dear Dr. Meris:

Greetings!
Please be formally advised that the hospital management has decided to abolish CMCs Industrial Service Unit
as of April 30, 1992 in view of the almost extinct demand for direct medical services by the private and
semi-government corporations in providing health care for their employees. Such a decision was arrived
at, after considering the existing trend of industrial companies allocating their health care requirements
to Health Maintenance Organizations (HMOs) or thru a tripartite arrangement with medical insurance
carriers and designated hospitals.

As a consequence thereof, all positions in the unit will be decommissioned at the same time industrial services
[are] deactivated. In that event, you shall be entitled to return to your private practice as a consultant staff
of the institution and will become eligible to receive your retirement benefits as a former hospital
employee. Miss Jane Telan on the other hand will be transferred back to Nursing Service for reassignment at the
CSR.

We wish to thank you for your long and faithful service to the institution and hope that our partnership in health
care delivery to our people will continue throughout the future. Best regards.

Very truly yours,

(SGD.) DR. THELMA NAVARETTE-CLEMENTE[9] (Emphasis and underscoring supplied)

Dr. Meris, doubting the reason behind the managements decision to close the ISU and believing that the ISU was not in fact
abolished as it continued to operate and offer services to the client companies with Dr. Clemente as its head and the notice of
closure was a mere ploy for his ouster in view of his refusal to retire despite Dr. Clementes previous prodding for him to do
so,[10] sought his reinstatement but it was unheeded.

Dr. Meris thus filed on September 7, 1992 a complaint against Capitol and Dr. Clemente for illegal dismissal and reinstatement
with claims for backwages, moral and exemplary damages, plus attorneys fees.[11]

Finding for Capitol and Dr. Clemente, the Labor Arbiter held that the abolition of the ISU was a valid and lawful exercise of
management prerogatives and there was convincing evidence to show that ISU was being operated at a loss.[12] The decretal text
of the decision reads:

WHEREFORE, judgment is hereby rendered dismissing the complaint. Respondents are however ordered to pay
complainant all sums due him under the hospital retirement plan.

SO ORDERED.[13] (Emphasis supplied)

On appeal by Dr. Meris, the National Labor Relations Commission (NLRC) modified the Labor Arbiters decision. It held that in
the exercise of Capitols management prerogatives, it had the right to close the ISU even if it was not suffering business losses in
light of Article 283 of the Labor Code and jurisprudence.[14]

And the NLRC set aside the Labor Arbiters directive for the payment of retirement benefits to Dr. Meris because he did not retire.
Instead, it ordered the payment of separation pay as provided under Article 283 as he was discharged due to closure of ISU, to be
charged against the retirement fund.[15]

Undaunted, Dr. Meris elevated the case to the Court of Appeals via petition for review[16] which, in the interest of
substantial justice, was treated as one for certiorari.[17]

Discrediting Capitols assertion that the ISU was operating at a loss as the evidence showed a continuous trend of increase in its
revenue for three years immediately preceding Dr. Meriss dismissal on April 30, 1992,[18] and finding that the ISUs Analysis of
Income and Expenses which was prepared long after Dr. Meriss dismissal, hence, not yet available, on or before April 1992, was
tainted with irregular entries, the appellate court held that Capitols evidence failed to meet the standard of a sufficient and adequate
proof of loss necessary to justify the abolition of the ISU.[19]

The appellate court went on to hold that the ISU was not in fact abolished, its operation and management having merely changed
hands from Dr. Meris to Dr. Clemente; and that there was a procedural lapse in terminating the services of Dr. Meris, no written
notice to the Department of Labor and Employment (DOLE) of the ISU abolition having been made, thereby violating the
requirement embodied in Article 283.[20]

The appellate court, concluding that Capitol failed to strictly comply with both procedural and substantive due process, a
condition sine qua non for the validity of a case of termination,[21] held that Dr. Meris was illegally dismissed. It accordingly
reversed the NLRC Resolution and disposed as follows:

IN VIEW OF ALL THE FOREGOING, the assailed resolutions of the NLRC are hereby set aside, and another
one entered

1 declaring illegal the dismissal of petitioner as Chief of the Industrial Service Unit of respondent Medical
Center;

2 ordering respondents to pay petitioner

a) backwages from the date of his separation in April 1992 until this decision has attained finality;
b) separation pay in lieu of reinstatement computed at the rate of one (1) month salary for every year of service
with a fraction of at least six (6) months being considered as one year;

c) other benefits due him or their money equivalent;

d) moral damages in the sum of P50,000.00;

e) exemplary damages in the sum of P50,000.00; and

f) attorneys fees of 10% of the total monetary award payable to petitioner.

SO ORDERED.[22]

Hence, the present petition for review assigning to the appellate court the following errors:

. . . IN OVERTURNING THE FACTUAL FINDINGS AND CONCLUSIONS OF BOTH THE NATIONAL


LABOR RELATIONS COMMISSION (NLRC) AND THE LABOR ARBITER.

II

. . . IN HOLDING, CONTRARY TO THE FINDINGS OF BOTH THE LABOR ARBITER AND THE
NATIONAL LABOR RELATIONS COMMISSION, THAT THE INDUSTRIAL UNIT (ISU) WAS NOT
INCURRING LOSSES AND THAT IT WAS NOT IN FACT ABOLISHED.

III

. . . IN NOT UPHOLDING PETITIONERS MANAGEMENT PREROGATIVE TO ABOLISH THE


INDUSTRIAL SERVICE UNIT (ISU).

IV

. . . IN REQUIRING PETITIONERS TO PAY RESPONDENT BACKWAGES AS WELL AS DAMAGES


AND ATTORNEYS FEES.[23]

Capitol questions the appellate courts deciding of the petition of Dr. Meris on the merits, instead of merely determining whether
the administrative bodies acted with grave abuse of discretion amounting to lack or excess of jurisdiction.

The province of a special civil action for certiorari under Rule 65, no doubt the appropriate mode of review by the Court of
Appeals of the NLRC decision,[24] is limited only to correct errors of jurisdiction or grave abuse of discretion amounting to lack
or excess of jurisdiction.[25] In light of the merits of Dr. Meris claim, however, the relaxation by the appellate court of procedural
technicality to give way to a substantive determination of a case, as this Court has held in several cases,[26] to subserve the interest
of justice, is in order.

Capitol argues that the factual findings of the NLRC, particularly when they coincide with those of the Labor Arbiter, as in the
present case, should be accorded respect, even finality.[27]

For factual findings of the NLRC which affirm those of the Labor Arbiter to be accorded respect, if not finality, however, the
same must be sufficiently supported by evidence on record.[28] Where there is a showing that such findings are devoid of support,
or that the judgment is based on a misapprehension of facts,[29] the lower tribunals factual findings will not be upheld.

As will be reflected in the following discussions, this Court finds that the Labor Arbiter and the NLRC overlooked some material
facts decisive of the instant controversy.

Capitol further argues that the appellate courts conclusion that the ISU was not incurring losses is arbitrary as it was based solely
on the supposed increase in revenues of the unit from 1989-1991, without taking into account the Analysis of Income and
Expenses of ISU from July 1, 1990 to July 1, 1991 which shows that the unit operated at a loss;[30] and that the demand for the
services of ISU became almost extinct in view of the affiliation of industrial establishments with HMOs such as Fortunecare,
Maxicare, Health Maintenance, Inc. and Philamcare and of tripartite arrangements with medical insurance carriers and designated
hospitals,[31] and the trend resulted in losses in the operation of the ISU.

Besides, Capitol stresses, the health care needs of the hospital employees had been taken over by other units without added
expense to it;[32] the appellate courts decision is at best an undue interference with, and curtailment of, the exercise by an employer
of its management prerogatives;[33] at the time of the closure of the ISU, Dr. Meris was already eligible for retirement under the
Capitols retirement plan; and the appellate court adverted to the alleged lack of notice to the DOLE regarding Dr. Meriss dismissal
but the latter never raised such issue in his appeal to the NLRC or even in his petition for review before the Court of Appeals,
hence, the latter did not have authority to pass on the matter.[34]

Work is a necessity that has economic significance deserving legal protection. The social justice and protection to labor provisions
in the Constitution dictate so.

Employers are also accorded rights and privileges to assure their self-determination and independence and reasonable return of
capital. This mass of privileges comprises the so-called management prerogatives. Although they may be broad and unlimited in
scope, the State has the right to determine whether an employers privilege is exercised in a manner that complies with the legal
requirements and does not offend the protected rights of labor. One of the rights accorded an employer is the right to close an
establishment or undertaking.

The right to close the operation of an establishment or undertaking is explicitly recognized under the Labor Code as one of the
authorized causes in terminating employment of workers, the only limitation being that the closure must not be for the purpose
of circumventing the provisions on termination of employment embodied in the Labor Code.

ART. 283. Closure of establishment and reduction of personnel. The employer may also terminate the
employment of any employee due to the installation of labor saving devices, redundancy, retrenchment to
prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing
is for the purpose of circumventing the provisions of this Title, by serving a written notice on the workers
and the Ministry of Labor and Employment at least one (1) month before the intended date thereof. In case of
termination due to the installation of labor saving devices or redundancy, the worker affected shall be entitled to
a separation pay equivalent to at least his one (1) month pay or to at least one (1) month pay for every year of
service, whichever is higher. In case retrenchment to prevent losses and in cases of closures or cessation of
operations of establishment or undertaking not due to serious business losses or financial reverses, the separation
pay shall be equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service,
whichever is higher. A fraction of at least six (6) months shall be considered one (1) whole year. (Emphasis and
underscoring supplied)
The phrase closures or cessation of operations of establishment or undertaking includes a partial or total closure or cessation.[35]
x x x Ordinarily, the closing of a warehouse facility and the termination of the services of employees there
assigned is a matter that is left to the determination of the employer in the good faith exercise of its management
prerogatives. The applicable law in such a case is Article 283 of the Labor Code which permits closure or
cessation of operation of an establishment or undertaking not due to serious business losses or financial reverses,
which, in our reading includes both the complete cessation of operations and the cessation of only part of a
companys business. (Emphasis supplied)

And the phrase closures or cessation x x x not due to serious business losses or financial reverses recognizes the right of the
employer to close or cease his business operations or undertaking even if he is not suffering from serious business losses or
financial reverses, as long as he pays his employees their termination pay in the amount corresponding to their length of service.[36]

It would indeed be stretching the intent and spirit of the law if a court were to unjustly interfere in managements prerogative to
close or cease its business operations just because said business operation or undertaking is not suffering from any loss.[37] As
long as the companys exercise of the same is in good faith to advance its interest and not for the purpose of defeating or
circumventing the rights of employees under the law or a valid agreement, such exercise will be upheld.[38]

Clearly then, the right to close an establishment or undertaking may be justified on grounds other than business losses but it
cannot be an unbridled prerogative to suit the whims of the employer.

The ultimate test of the validity of closure or cessation of establishment or undertaking is that it must be bona fide in
character.[39] And the burden of proving such falls upon the employer.[40]

In the case at bar, Capitol failed to sufficiently prove its good faith in closing the ISU.

From the letter of Dr. Clemente to Dr. Meris, it is gathered that the abolition of the ISU was due to the almost extinct demand for
direct medical service by the private and semi-government corporations in providing health care for their employees; and that
such extinct demand was brought about by the existing trend of industrial companies allocating their health care requirements to
Health Maintenance Organizations (HMOs) or thru a tripartite arrangement with medical insurance carriers and designated
hospitals.

The records of the case, however, fail to impress that there was indeed extinct demand for the medical services rendered by the
ISU. The ISUs Annual Report for the fiscal years 1986 to 1991, submitted by Dr. Meris to Dr. Clemente, and uncontroverted by
Capitol, shows the following:

Fiscal Year No. of Industrial No of No. of Capitol


Patients Companies Employees
1986-1987 466 11 1445
1987-1988 580 17 1707
1988-1989 676 14 1888
1989-1990 571 16 2731
1990-1991 759 18 2320[41]

If there was extinct demand for the ISU medical services as what Capitol and Dr. Clemente purport to convey, why the number
of client companies of the ISU increased from 11 to 18 from 1986 to 1991, as well as the number of patients from both industrial
corporations and Capitol employees, they did not explain.

The Analysis of Income and Expenses adduced by Capitol showing that the ISU incurred losses from July 1990 to February 1992,
to wit:

July 1, 1990 to July 1, 1991 to


June 30, 1991 February 29, 1992
INCOME P16, 772.00 P35, 236.00
TOTAL EXPENSES P225, 583.70 P169,244.34

NET LOSS P(208,811.70) P(134,008.34),[42]

was prepared by its internal auditor Vicenta Fernandez,[43] a relative of Dr. Clemente, and not by an independent external auditor,
hence, not beyond doubt. It is the financial statements audited by independent external auditors which constitute the normal
method of proof of the profit and loss performance of a company.[44]

At all events, the claimed losses are contradicted by the accounting records of Capitol itself which show that ISU had increasing
revenue from 1989 to 1991.

Year In-Patient Out-Patient Total Income

1989 P230,316.38 P 79,477.50 P309,793.88


1990 P278,438.10 P124,256.65 P402,694.75
1991 P305,126.35 P152,920.15 P458,046.50[45]
The foregoing disquisition notwithstanding, as reflected above, the existence of business losses is not required to justify the
closure or cessation of establishment or undertaking as a ground to terminate employment of employees. Even if the ISU were
not incurring losses, its abolition or closure could be justified on other grounds like that proffered by Capitol extinct demand.
Capitol failed, however, to present sufficient and convincing evidence to support such claim of extinct demand. In fact, the
employees of Capitol submitted a petition[46] dated April 21, 1992 addressed to Dr. Clemente opposing the abolition of the ISU.

The closure of ISU then surfaces to be contrary to the provisions of the Labor Code on termination of employment.

The termination of the services of Dr. Meris not having been premised on a just or authorized cause, he is entitled to either
reinstatement or separation pay if reinstatement is no longer viable, and to backwages.

Reinstatement, however, is not feasible in case of a strained employer-employee relationship or when the work or position
formerly held by the dismissed employee no longer exists, as in the instant case.[47] Dr. Meris is thus entitled to payment of
separation pay at the rate of one (1) month salary for every year of his employment, with a fraction of at least six (6) months being
considered as one(1) year,[48] and full backwages from the time of his dismissal from April 30, 1992 until the expiration of his
term as Chief of ISU or his mandatory retirement, whichever comes first.

The award by the appellate court of moral damages,[49] however, cannot be sustained, solely upon the premise that the employer
fired his employee without just cause or due process. Additional facts must be pleaded and proven to warrant the grant of moral
damages under the Civil Code, such as that the act of dismissal was attended by bad faith or fraud, or was oppressive to labor, or
done in a manner contrary to morals, good customs, or public policy; and of course, that social humiliation, wounded feelings,
grave anxiety, etc., resulted therefrom.[50] Such circumstances, however, do not obtain in the instant case. More specifically on
bad faith, lack of it is mirrored in Dr. Clementes offer to Dr. Meris to be a consultant of Capitol, despite the abolition of the ISU.

There being no moral damages, the award of exemplary damages does not lie.[51]

The award for attorneys fees, however, remains.[52]

WHEREFORE, the decision of the Court of Appeals dated February 15, 2002 is hereby AFFIRMED with MODIFICATION.
As modified, judgment is hereby rendered ordering Capitol Medical Center, Inc. to pay Dr. Cesar Meris separation pay at the rate
of One (1) Month salary for every year of his employment, with a fraction of at least Six (6) Months being considered as One (1)
Year, full backwages from the time of his dismissal from April 30, 1992 until the expiration of his term as Chief of the ISU or his
mandatory retirement, whichever comes first; other benefits due him or their money equivalent; and attorneys fees.

Costs against petitioners.

SO ORDERED.

CONCHITA CARPIO MORALES


Associate Justice
WE CONCUR:

ARTEMIO V. PANGANIBAN
Associate Justice
Chairman

ANGELINA SANDOVAL-GUTIERREZ RENATO C. CORONA


Associate Justice Associate Justice

CANCIO C. GARCIA
Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the
opinion of the Courts Division.

ARTEMIO V. PANGANIBAN
Associate Justice
Chairman

CERTIFICATION

Pursuant to Article VIII, Section 13 of the Constitution, and the Division Chairmans Attestation, it is hereby certified that the
conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the
Court.

HILARIO G. DAVIDE, JR.


Chief Justice
Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-31195 June 5, 1973

PHILIPPINE BLOOMING MILLS EMPLOYMENT ORGANIZATION, NICANOR TOLENTINO, FLORENCIO,


PADRIGANO RUFINO, ROXAS MARIANO DE LEON, ASENCION PACIENTE, BONIFACIO VACUNA,
BENJAMIN PAGCU and RODULFO MUNSOD, petitioners,
vs.
PHILIPPINE BLOOMING MILLS CO., INC. and COURT OF INDUSTRIAL RELATIONS, respondents.

L.S. Osorio & P.B. Castillo and J.C. Espinas & Associates for petitioners.

Demetrio B. Salem & Associates for private respondent.

MAKASIAR, J.:

The petitioner Philippine Blooming Mills Employees Organization (hereinafter referred to as PBMEO) is a legitimate labor
union composed of the employees of the respondent Philippine Blooming Mills Co., Inc., and petitioners Nicanor Tolentino,
Florencio Padrigano, Rufino Roxas, Mariano de Leon, Asencion Paciente, Bonifacio Vacuna, Benjamin Pagcu and Rodulfo
Munsod are officers and members of the petitioner Union.

Petitioners claim that on March 1, 1969, they decided to stage a mass demonstration at Malacaang on March 4, 1969, in protest
against alleged abuses of the Pasig police, to be participated in by the workers in the first shift (from 6 A.M. to 2 P.M.) as well
as those in the regular second and third shifts (from 7 A.M. to 4 P.M. and from 8 A.M. to 5 P.M., respectively); and that they
informed the respondent Company of their proposed demonstration.

The questioned order dated September 15, 1969, of Associate Judge Joaquin M. Salvador of the respondent Court reproduced
the following stipulation of facts of the parties parties

3. That on March 2, 1969 complainant company learned of the projected mass demonstration at Malacaang in
protest against alleged abuses of the Pasig Police Department to be participated by the first shift (6:00 AM-
2:00 PM) workers as well as those working in the regular shifts (7:00 A.M. to 4:00 PM and 8:00 AM to 5:00
PM) in the morning of March 4, 1969;

4. That a meeting was called by the Company on March 3, 1969 at about 11:00 A.M. at the Company's
canteen, and those present were: for the Company: (1) Mr. Arthur L. Ang (2) Atty. S. de Leon, Jr., (3) and all
department and section heads. For the PBMEO (1) Florencio Padrigano, (2) Rufino Roxas, (3) Mariano de
Leon, (4) Asencion Paciente, (5) Bonifacio Vacuna and (6) Benjamin Pagcu.

5. That the Company asked the union panel to confirm or deny said projected mass demonstration at
Malacaang on March 4, 1969. PBMEO thru Benjamin Pagcu who acted as spokesman of the union panel,
confirmed the planned demonstration and stated that the demonstration or rally cannot be cancelled because it
has already been agreed upon in the meeting. Pagcu explained further that the demonstration has nothing to do
with the Company because the union has no quarrel or dispute with Management;
6. That Management, thru Atty. C.S. de Leon, Company personnel manager, informed PBMEO that the
demonstration is an inalienable right of the union guaranteed by the Constitution but emphasized, however,
that any demonstration for that matter should not unduly prejudice the normal operation of the Company. For
which reason, the Company, thru Atty. C.S. de Leon warned the PBMEO representatives that workers who
belong to the first and regular shifts, who without previous leave of absence approved by the Company,
particularly , the officers present who are the organizers of the demonstration, who shall fail to report for work
the following morning (March 4, 1969) shall be dismissed, because such failure is a violation of the existing
CBA and, therefore, would be amounting to an illegal strike;

7. That at about 5:00 P.M. on March 3, 1969, another meeting was convoked Company represented by Atty.
C.S. de Leon, Jr. The Union panel was composed of: Nicanor Tolentino, Rodolfo Munsod, Benjamin Pagcu
and Florencio Padrigano. In this afternoon meeting of March 3, 1969, Company reiterated and appealed to the
PBMEO representatives that while all workers may join the Malacaang demonstration, the workers for the
first and regular shift of March 4, 1969 should be excused from joining the demonstration and should report
for work; and thus utilize the workers in the 2nd and 3rd shifts in order not to violate the provisions of the
CBA, particularly Article XXIV: NO LOCKOUT NO STRIKE'. All those who will not follow this warning
of the Company shall be dismiss; De Leon reiterated the Company's warning that the officers shall be
primarily liable being the organizers of the mass demonstration. The union panel countered that it was rather
too late to change their plans inasmuch as the Malacaang demonstration will be held the following morning;
and

8. That a certain Mr. Wilfredo Ariston, adviser of PBMEO sent a cablegram to the Company which was
received 9:50 A.M., March 4, 1969, the contents of which are as follows: 'REITERATING REQUEST
EXCUSE DAY SHIFT EMPLOYEES JOINING DEMONSTRATION MARCH 4, 1969.' (Pars. 3-8, Annex
"F", pp. 42-43, rec.)

Because the petitioners and their members numbering about 400 proceeded with the demonstration despite the pleas of the
respondent Company that the first shift workers should not be required to participate in the demonstration and that the workers
in the second and third shifts should be utilized for the demonstration from 6 A.M. to 2 P.M. on March 4, 1969, respondent
Company prior notice of the mass demonstration on March 4, 1969, with the respondent Court, a charge against petitioners and
other employees who composed the first shift, charging them with a "violation of Section 4(a)-6 in relation to Sections 13 and
14, as well as Section 15, all of Republic Act No. 875, and of the CBA providing for 'No Strike and No Lockout.' " (Annex "A",
pp. 19-20, rec.). The charge was accompanied by the joint affidavit of Arthur L. Ang and Cesareo de Leon, Jr. (Annex "B", pp.
21-24, rec.). Thereafter, a corresponding complaint was filed, dated April 18, 1969, by Acting Chief Prosecutor Antonio T.
Tirona and Acting Prosecutor Linda P. Ilagan (Annex "C", pp. 25-30, rec.)

In their answer, dated May 9, 1969, herein petitioners claim that they did not violate the existing CBA because they gave the
respondent Company prior notice of the mass demonstration on March 4, 1969; that the said mass demonstration was a valid
exercise of their constitutional freedom of speech against the alleged abuses of some Pasig policemen; and that their mass
demonstration was not a declaration of strike because it was not directed against the respondent firm (Annex "D", pp. 31-34,
rec.)

After considering the aforementioned stipulation of facts submitted by the parties, Judge Joaquin M. Salvador, in an order dated
September 15, 1969, found herein petitioner PBMEO guilty of bargaining in bad faith and herein petitioners Florencio
Padrigano, Rufino Roxas, Mariano de Leon, Asencion Paciente, Bonifacio Vacuna, Benjamin Pagcu, Nicanor Tolentino and
Rodulfo Munsod as directly responsible for perpetrating the said unfair labor practice and were, as a consequence, considered to
have lost their status as employees of the respondent Company (Annex "F", pp. 42-56, rec.)

Herein petitioners claim that they received on September 23, 1969, the aforesaid order (p. 11, rec.); and that they filed on
September 29, 1969, because September 28, 1969 fell on Sunday (p. 59, rec.), a motion for reconsideration of said order dated
September 15, 1969, on the ground that it is contrary to law and the evidence, as well as asked for ten (10) days within which to
file their arguments pursuant to Sections 15, 16 and 17 of the Rules of the CIR, as amended (Annex "G", pp. 57-60, rec. )

In its opposition dated October 7, 1969, filed on October 11, 1969 (p. 63, rec.), respondent Company averred that herein
petitioners received on September 22, 1969, the order dated September 17 (should be September 15), 1969; that under Section
15 of the amended Rules of the Court of Industrial Relations, herein petitioners had five (5) days from September 22, 1969 or
until September 27, 1969, within which to file their motion for reconsideration; and that because their motion for
reconsideration was two (2) days late, it should be accordingly dismissed, invoking Bien vs. Castillo,1 which held among others,
that a motion for extension of the five-day period for the filing of a motion for reconsideration should be filed before the said
five-day period elapses (Annex "M", pp. 61-64, rec.).

Subsequently, herein petitioners filed on October 14, 1969 their written arguments dated October 11, 1969, in support of their
motion for reconsideration (Annex "I", pp. 65-73, rec.).

In a resolution dated October 9, 1969, the respondent en banc dismissed the motion for reconsideration of herein petitioners for
being pro forma as it was filed beyond the reglementary period prescribed by its Rules (Annex "J", pp. 74-75, rec.), which
herein petitioners received on October 28, 196 (pp. 12 & 76, rec.).

At the bottom of the notice of the order dated October 9, 1969, which was released on October 24, 1969 and addressed to the
counsels of the parties (pp. 75-76, rec.), appear the requirements of Sections 15, 16 and 17, as amended, of the Rules of the
Court of Industrial Relations, that a motion for reconsideration shall be filed within five (5) days from receipt of its decision or
order and that an appeal from the decision, resolution or order of the C.I.R., sitting en banc, shall be perfected within ten (10)
days from receipt thereof (p. 76, rec.).

On October 31, 1969, herein petitioners filed with the respondent court a petition for relief from the order dated October 9,
1969, on the ground that their failure to file their motion for reconsideration on time was due to excusable negligence and
honest mistake committed by the president of the petitioner Union and of the office clerk of their counsel, attaching thereto the
affidavits of the said president and clerk (Annexes "K", "K-1" and "K-2", rec.).

Without waiting for any resolution on their petition for relief from the order dated October 9, 1969, herein petitioners filed on
November 3, 1969, with the Supreme Court, a notice of appeal (Annex "L", pp. 88-89, rec.).

There is need of briefly restating basic concepts and principles which underlie the issues posed by the case at bar.

(1) In a democracy, the preservation and enhancement of the dignity and worth of the human personality is the central core as
well as the cardinal article of faith of our civilization. The inviolable character of man as an individual must be "protected to the
largest possible extent in his thoughts and in his beliefs as the citadel of his person."2

(2) The Bill of Rights is designed to preserve the ideals of liberty, equality and security "against the assaults of opportunism, the
expediency of the passing hour, the erosion of small encroachments, and the scorn and derision of those who have no patience
with general principles."3

In the pithy language of Mr. Justice Robert Jackson, the purpose of the Bill of Rights is to withdraw "certain subjects from the
vicissitudes of political controversy, to place them beyond the reach of majorities and officials, and to establish them as legal
principles to be applied by the courts. One's rights to life, liberty and property, to free speech, or free press, freedom of worship
and assembly, and other fundamental rights may not be submitted to a vote; they depend on the outcome of no elections."4 Laski
proclaimed that "the happiness of the individual, not the well-being of the State, was the criterion by which its behaviour was to
be judged. His interests, not its power, set the limits to the authority it was entitled to exercise."5

(3) The freedoms of expression and of assembly as well as the right to petition are included among the immunities reserved by
the sovereign people, in the rhetorical aphorism of Justice Holmes, to protect the ideas that we abhor or hate more than the ideas
we cherish; or as Socrates insinuated, not only to protect the minority who want to talk, but also to benefit the majority who
refuse to listen.6 And as Justice Douglas cogently stresses it, the liberties of one are the liberties of all; and the liberties of one
are not safe unless the liberties of all are protected.7

(4) The rights of free expression, free assembly and petition, are not only civil rights but also political rights essential to man's
enjoyment of his life, to his happiness and to his full and complete fulfillment. Thru these freedoms the citizens can participate
not merely in the periodic establishment of the government through their suffrage but also in the administration of public affairs
as well as in the discipline of abusive public officers. The citizen is accorded these rights so that he can appeal to the appropriate
governmental officers or agencies for redress and protection as well as for the imposition of the lawful sanctions on erring
public officers and employees.
(5) While the Bill of Rights also protects property rights, the primacy of human rights over property rights is
recognized.8 Because these freedoms are "delicate and vulnerable, as well as supremely precious in our society" and the "threat
of sanctions may deter their exercise almost as potently as the actual application of sanctions," they "need breathing space to
survive," permitting government regulation only "with narrow specificity."9

Property and property rights can be lost thru prescription; but human rights are imprescriptible. If human rights are extinguished
by the passage of time, then the Bill of Rights is a useless attempt to limit the power of government and ceases to be an
efficacious shield against the tyranny of officials, of majorities, of the influential and powerful, and of oligarchs political,
economic or otherwise.

In the hierarchy of civil liberties, the rights of free expression and of assembly occupy a preferred position as they are essential
to the preservation and vitality of our civil and political institutions; 10 and such priority "gives these liberties the sanctity and
the sanction not permitting dubious intrusions." 11

The superiority of these freedoms over property rights is underscored by the fact that a mere reasonable or rational relation
between the means employed by the law and its object or purpose that the law is neither arbitrary nor discriminatory nor
oppressive would suffice to validate a law which restricts or impairs property rights. 12 On the other hand, a constitutional or
valid infringement of human rights requires a more stringent criterion, namely existence of a grave and immediate danger of a
substantive evil which the State has the right to prevent. So it has been stressed in the main opinion of Mr. Justice Fernando
in Gonzales vs. Comelec and reiterated by the writer of the opinion in Imbong vs. Ferrer. 13 It should be added that Mr. Justice
Barredo in Gonzales vs. Comelec, supra, like Justices Douglas, Black and Goldberg in N.Y. Times Co. vs. Sullivan, 14 believes
that the freedoms of speech and of the press as well as of peaceful assembly and of petition for redress of grievances are
absolute when directed against public officials or "when exercised in relation to our right to choose the men and women by
whom we shall be governed," 15 even as Mr. Justice Castro relies on the balancing-of-interests test. 16 Chief Justice Vinson is
partial to the improbable danger rule formulated by Chief Judge Learned Hand, viz. whether the gravity of the evil,
discounted by its improbability, justifies such invasion of free expression as is necessary to avoid the danger. 17

II

The respondent Court of Industrial Relations, after opining that the mass demonstration was not a declaration of strike,
concluded that by their "concerted act and the occurrence temporary stoppage of work," herein petitioners are guilty bargaining
in bad faith and hence violated the collective bargaining agreement with private respondent Philippine Blooming Mills Co., inc..
Set against and tested by foregoing principles governing a democratic society, such conclusion cannot be sustained. The
demonstration held petitioners on March 4, 1969 before Malacaang was against alleged abuses of some Pasig policemen, not
against their employer, herein private respondent firm, said demonstrate was purely and completely an exercise of their freedom
expression in general and of their right of assembly and petition for redress of grievances in particular before appropriate
governmental agency, the Chief Executive, again the police officers of the municipality of Pasig. They exercise their civil and
political rights for their mutual aid protection from what they believe were police excesses. As matter of fact, it was the duty of
herein private respondent firm to protect herein petitioner Union and its members fro the harassment of local police officers. It
was to the interest herein private respondent firm to rally to the defense of, and take up the cudgels for, its employees, so that
they can report to work free from harassment, vexation or peril and as consequence perform more efficiently their respective
tasks enhance its productivity as well as profits. Herein respondent employer did not even offer to intercede for its employees
with the local police. Was it securing peace for itself at the expenses of its workers? Was it also intimidated by the local police
or did it encourage the local police to terrorize or vex its workers? Its failure to defend its own employees all the more
weakened the position of its laborers the alleged oppressive police who might have been all the more emboldened thereby
subject its lowly employees to further indignities.

In seeking sanctuary behind their freedom of expression well as their right of assembly and of petition against alleged
persecution of local officialdom, the employees and laborers of herein private respondent firm were fighting for their very
survival, utilizing only the weapons afforded them by the Constitution the untrammelled enjoyment of their basic human
rights. The pretension of their employer that it would suffer loss or damage by reason of the absence of its employees from 6
o'clock in the morning to 2 o'clock in the afternoon, is a plea for the preservation merely of their property rights. Such
apprehended loss or damage would not spell the difference between the life and death of the firm or its owners or its
management. The employees' pathetic situation was a stark reality abused, harassment and persecuted as they believed they
were by the peace officers of the municipality. As above intimated, the condition in which the employees found themselves vis-
a-vis the local police of Pasig, was a matter that vitally affected their right to individual existence as well as that of their
families. Material loss can be repaired or adequately compensated. The debasement of the human being broken in morale and
brutalized in spirit-can never be fully evaluated in monetary terms. The wounds fester and the scars remain to humiliate him to
his dying day, even as he cries in anguish for retribution, denial of which is like rubbing salt on bruised tissues.

As heretofore stated, the primacy of human rights freedom of expression, of peaceful assembly and of petition for redress of
grievances over property rights has been sustained. 18 Emphatic reiteration of this basic tenet as a coveted boon at once
the shield and armor of the dignity and worth of the human personality, the all-consuming ideal of our enlightened civilization
becomes Our duty, if freedom and social justice have any meaning at all for him who toils so that capital can produce
economic goods that can generate happiness for all. To regard the demonstration against police officers, not against the
employer, as evidence of bad faith in collective bargaining and hence a violation of the collective bargaining agreement and a
cause for the dismissal from employment of the demonstrating employees, stretches unduly the compass of the collective
bargaining agreement, is "a potent means of inhibiting speech" and therefore inflicts a moral as well as mortal wound on the
constitutional guarantees of free expression, of peaceful assembly and of petition. 19

The collective bargaining agreement which fixes the working shifts of the employees, according to the respondent Court
Industrial Relations, in effect imposes on the workers the "duty ... to observe regular working hours." The strain construction of
the Court of Industrial Relations that a stipulated working shifts deny the workers the right to stage mass demonstration against
police abuses during working hours, constitutes a virtual tyranny over the mind and life the workers and deserves severe
condemnation. Renunciation of the freedom should not be predicated on such a slender ground.

The mass demonstration staged by the employees on March 4, 1969 could not have been legally enjoined by any court, such an
injunction would be trenching upon the freedom expression of the workers, even if it legally appears to be illegal picketing or
strike. 20 The respondent Court of Industrial Relations in the case at bar concedes that the mass demonstration was not a
declaration of a strike "as the same not rooted in any industrial dispute although there is concerted act and the occurrence of a
temporary stoppage work." (Annex "F", p. 45, rec.).

The respondent firm claims that there was no need for all its employees to participate in the demonstration and that they
suggested to the Union that only the first and regular shift from 6 A.M. to 2 P.M. should report for work in order that loss or
damage to the firm will be averted. This stand failed appreciate the sine qua non of an effective demonstration especially by a
labor union, namely the complete unity of the Union members as well as their total presence at the demonstration site in order to
generate the maximum sympathy for the validity of their cause but also immediately action on the part of the corresponding
government agencies with jurisdiction over the issues they raised against the local police. Circulation is one of the aspects of
freedom of expression. 21 If demonstrators are reduced by one-third, then by that much the circulation of the issues raised by the
demonstration is diminished. The more the participants, the more persons can be apprised of the purpose of the rally. Moreover,
the absence of one-third of their members will be regarded as a substantial indication of disunity in their ranks which will
enervate their position and abet continued alleged police persecution. At any rate, the Union notified the company two days in
advance of their projected demonstration and the company could have made arrangements to counteract or prevent whatever
losses it might sustain by reason of the absence of its workers for one day, especially in this case when the Union requested it to
excuse only the day-shift employees who will join the demonstration on March 4, 1969 which request the Union reiterated in
their telegram received by the company at 9:50 in the morning of March 4, 1969, the day of the mass demonstration (pp. 42-43,
rec.). There was a lack of human understanding or compassion on the part of the firm in rejecting the request of the Union for
excuse from work for the day shifts in order to carry out its mass demonstration. And to regard as a ground for dismissal the
mass demonstration held against the Pasig police, not against the company, is gross vindictiveness on the part of the employer,
which is as unchristian as it is unconstitutional.

III

The respondent company is the one guilty of unfair labor practice. Because the refusal on the part of the respondent firm to
permit all its employees and workers to join the mass demonstration against alleged police abuses and the subsequent separation
of the eight (8) petitioners from the service constituted an unconstitutional restraint on the freedom of expression, freedom of
assembly and freedom petition for redress of grievances, the respondent firm committed an unfair labor practice defined in
Section 4(a-1) in relation to Section 3 of Republic Act No. 875, otherwise known as the Industrial Peace Act. Section 3 of
Republic Act No. 8 guarantees to the employees the right "to engage in concert activities for ... mutual aid or protection"; while
Section 4(a-1) regards as an unfair labor practice for an employer interfere with, restrain or coerce employees in the exercise
their rights guaranteed in Section Three."

We repeat that the obvious purpose of the mass demonstration staged by the workers of the respondent firm on March 4, 1969,
was for their mutual aid and protection against alleged police abuses, denial of which was interference with or restraint on the
right of the employees to engage in such common action to better shield themselves against such alleged police indignities. The
insistence on the part of the respondent firm that the workers for the morning and regular shift should not participate in the mass
demonstration, under pain of dismissal, was as heretofore stated, "a potent means of inhibiting speech." 22

Such a concerted action for their mutual help and protection deserves at least equal protection as the concerted action of
employees in giving publicity to a letter complaint charging bank president with immorality, nepotism, favoritism an
discrimination in the appointment and promotion of ban employees. 23 We further ruled in the Republic Savings Bank
case, supra, that for the employees to come within the protective mantle of Section 3 in relation to Section 4(a-1) on Republic
Act No. 875, "it is not necessary that union activity be involved or that collective bargaining be contemplated," as long as the
concerted activity is for the furtherance of their interests. 24

As stated clearly in the stipulation of facts embodied in the questioned order of respondent Court dated September 15, 1969, the
company, "while expressly acknowledging, that the demonstration is an inalienable right of the Union guaranteed by the
Constitution," nonetheless emphasized that "any demonstration for that matter should not unduly prejudice the normal operation
of the company" and "warned the PBMEO representatives that workers who belong to the first and regular shifts, who without
previous leave of absence approved by the Company, particularly the officers present who are the organizers of the
demonstration, who shall fail to report for work the following morning (March 4, 1969) shall be dismissed, because such failure
is a violation of the existing CBA and, therefore, would be amounting to an illegal strike (;)" (p. III, petitioner's brief). Such
threat of dismissal tended to coerce the employees from joining the mass demonstration. However, the issues that the employees
raised against the local police, were more important to them because they had the courage to proceed with the demonstration,
despite such threat of dismissal. The most that could happen to them was to lose a day's wage by reason of their absence from
work on the day of the demonstration. One day's pay means much to a laborer, more especially if he has a family to support.
Yet, they were willing to forego their one-day salary hoping that their demonstration would bring about the desired relief from
police abuses. But management was adamant in refusing to recognize the superior legitimacy of their right of free speech, free
assembly and the right to petition for redress.

Because the respondent company ostensibly did not find it necessary to demand from the workers proof of the truth of the
alleged abuses inflicted on them by the local police, it thereby concedes that the evidence of such abuses should properly be
submitted to the corresponding authorities having jurisdiction over their complaint and to whom such complaint may be referred
by the President of the Philippines for proper investigation and action with a view to disciplining the local police officers
involved.

On the other hand, while the respondent Court of Industrial Relations found that the demonstration "paralyzed to a large extent
the operations of the complainant company," the respondent Court of Industrial Relations did not make any finding as to the fact
of loss actually sustained by the firm. This significant circumstance can only mean that the firm did not sustain any loss or
damage. It did not present evidence as to whether it lost expected profits for failure to comply with purchase orders on that day;
or that penalties were exacted from it by customers whose orders could not be filled that day of the demonstration; or that
purchase orders were cancelled by the customers by reason of its failure to deliver the materials ordered; or that its own
equipment or materials or products were damaged due to absence of its workers on March 4, 1969. On the contrary, the
company saved a sizable amount in the form of wages for its hundreds of workers, cost of fuel, water and electric consumption
that day. Such savings could have amply compensated for unrealized profits or damages it might have sustained by reason of
the absence of its workers for only one day.

IV

Apart from violating the constitutional guarantees of free speech and assembly as well as the right to petition for redress of
grievances of the employees, the dismissal of the eight (8) leaders of the workers for proceeding with the demonstration and
consequently being absent from work, constitutes a denial of social justice likewise assured by the fundamental law to these
lowly employees. Section 5 of Article II of the Constitution imposes upon the State "the promotion of social justice to insure the
well-being and economic security of all of the people," which guarantee is emphasized by the other directive in Section 6 of
Article XIV of the Constitution that "the State shall afford protection to labor ...". Respondent Court of Industrial Relations as
an agency of the State is under obligation at all times to give meaning and substance to these constitutional guarantees in favor
of the working man; for otherwise these constitutional safeguards would be merely a lot of "meaningless constitutional patter."
Under the Industrial Peace Act, the Court of Industrial Relations is enjoined to effect the policy of the law "to eliminate the
causes of industrial unrest by encouraging and protecting the exercise by employees of their right to self-organization for the
purpose of collective bargaining and for the promotion of their moral, social and economic well-being." It is most unfortunate in
the case at bar that respondent Court of Industrial Relations, the very governmental agency designed therefor, failed to
implement this policy and failed to keep faith with its avowed mission its raison d'etre as ordained and directed by the
Constitution.
V

It has been likewise established that a violation of a constitutional right divests the court of jurisdiction; and as a consequence
its judgment is null and void and confers no rights. Relief from a criminal conviction secured at the sacrifice of constitutional
liberties, may be obtained through habeas corpus proceedings even long after the finality of the judgment. Thus, habeas corpus
is the remedy to obtain the release of an individual, who is convicted by final judgment through a forced confession, which
violated his constitutional right against self-incrimination; 25 or who is denied the right to present evidence in his defense as a
deprivation of his liberty without due process of law, 26 even after the accused has already served sentence for twenty-two
years. 27

Both the respondents Court of Industrial Relations and private firm trenched upon these constitutional immunities of petitioners.
Both failed to accord preference to such rights and aggravated the inhumanity to which the aggrieved workers claimed they had
been subjected by the municipal police. Having violated these basic human rights of the laborers, the Court of Industrial
Relations ousted itself of jurisdiction and the questioned orders it issued in the instant case are a nullity. Recognition and
protection of such freedoms are imperative on all public offices including the courts 28 as well as private citizens and
corporations, the exercise and enjoyment of which must not be nullified by mere procedural rule promulgated by the Court
Industrial Relations exercising a purely delegate legislative power, when even a law enacted by Congress must yield to the
untrammelled enjoyment of these human rights. There is no time limit to the exercise of the freedoms. The right to enjoy them
is not exhausted by the delivery of one speech, the printing of one article or the staging of one demonstration. It is a continuing
immunity to be invoked and exercised when exigent and expedient whenever there are errors to be rectified, abuses to be
denounced, inhumanities to be condemned. Otherwise these guarantees in the Bill of Rights would be vitiated by rule on
procedure prescribing the period for appeal. The battle then would be reduced to a race for time. And in such a contest between
an employer and its laborer, the latter eventually loses because he cannot employ the best an dedicated counsel who can defend
his interest with the required diligence and zeal, bereft as he is of the financial resources with which to pay for competent legal
services. 28-a

VI

The Court of Industrial Relations rule prescribes that motion for reconsideration of its order or writ should filed within five (5)
days from notice thereof and that the arguments in support of said motion shall be filed within ten (10) days from the date of
filing of such motion for reconsideration (Sec. 16). As above intimated, these rules of procedure were promulgated by the Court
of Industrial Relations pursuant to a legislative delegation. 29

The motion for reconsideration was filed on September 29, 1969, or seven (7) days from notice on September 22, 1969 of the
order dated September 15, 1969 or two (2) days late. Petitioners claim that they could have filed it on September 28, 1969, but it
was a Sunday.

Does the mere fact that the motion for reconsideration was filed two (2) days late defeat the rights of the petitioning employees?
Or more directly and concretely, does the inadvertent omission to comply with a mere Court of Industrial Relations procedural
rule governing the period for filing a motion for reconsideration or appeal in labor cases, promulgated pursuant to a legislative
delegation, prevail over constitutional rights? The answer should be obvious in the light of the aforecited cases. To accord
supremacy to the foregoing rules of the Court of Industrial Relations over basic human rights sheltered by the Constitution, is
not only incompatible with the basic tenet of constitutional government that the Constitution is superior to any statute or
subordinate rules and regulations, but also does violence to natural reason and logic. The dominance and superiority of the
constitutional right over the aforesaid Court of Industrial Relations procedural rule of necessity should be affirmed. Such a
Court of Industrial Relations rule as applied in this case does not implement or reinforce or strengthen the constitutional rights
affected,' but instead constrict the same to the point of nullifying the enjoyment thereof by the petitioning employees. Said
Court of Industrial Relations rule, promulgated as it was pursuant to a mere legislative delegation, is unreasonable and therefore
is beyond the authority granted by the Constitution and the law. A period of five (5) days within which to file a motion for
reconsideration is too short, especially for the aggrieved workers, who usually do not have the ready funds to meet the
necessary expenses therefor. In case of the Court of Appeals and the Supreme Court, a period of fifteen (15) days has been fixed
for the filing of the motion for re hearing or reconsideration (See. 10, Rule 51; Sec. 1, Rule 52; Sec. 1, Rule 56, Revised Rules
of Court). The delay in the filing of the motion for reconsideration could have been only one day if September 28, 1969 was not
a Sunday. This fact accentuates the unreasonableness of the Court of Industrial are concerned.

It should be stressed here that the motion for reconsideration dated September 27, 1969, is based on the ground that the order
sought to be reconsidered "is not in accordance with law, evidence and facts adduced during the hearing," and likewise prays for
an extension of ten (10) days within which to file arguments pursuant to Sections 15, 16 and 17 of the Rules of the Court of
Industrial Relations (Annex "G", pp. 57-60, rec.); although the arguments were actually filed by the herein petitioners on
October 14, 1969 (Annex "I", pp. 70-73, rec.), long after the 10-day period required for the filing of such supporting arguments
counted from the filing of the motion for reconsideration. Herein petitioners received only on October 28, 1969 the resolution
dated October 9, 1969 dismissing the motion for reconsideration for being pro forma since it was filed beyond the reglementary
period (Annex "J", pp. 74-75, rec.)

It is true that We ruled in several cases that where a motion to reconsider is filed out of time, or where the arguments in suppf
such motion are filed beyond the 10 day reglementary period provided for by the Court of Industrial Relations rules, the order
or decision subject of29-a reconsideration becomes final and unappealable. But in all these cases, the constitutional rights of free
expression, free assembly and petition were not involved.

It is a procedural rule that generally all causes of action and defenses presently available must be specifically raised in the
complaint or answer; so that any cause of action or defense not raised in such pleadings, is deemed waived. However, a
constitutional issue can be raised any time, even for the first time on appeal, if it appears that the determination of the
constitutional issue is necessary to a decision of the case, the very lis mota of the case without the resolution of which no final
and complete determination of the dispute can be made. 30 It is thus seen that a procedural rule of Congress or of the Supreme
Court gives way to a constitutional right. In the instant case, the procedural rule of the Court of Industrial Relations, a creature
of Congress, must likewise yield to the constitutional rights invoked by herein petitioners even before the institution of the
unfair labor practice charged against them and in their defense to the said charge.

In the case at bar, enforcement of the basic human freedoms sheltered no less by the organic law, is a most compelling reason to
deny application of a Court of Industrial Relations rule which impinges on such human rights. 30-a

It is an accepted principle that the Supreme Court has the inherent power to "suspend its own rules or to except a particular case
from its operation, whenever the purposes of justice require." 30-b Mr. Justice Barredo in his concurring opinion in Estrada vs.
Sto. Domingo. 30-c reiterated this principle and added that

Under this authority, this Court is enabled to cove with all situations without concerning itself about
procedural niceties that do not square with the need to do justice, in any case, without further loss of time,
provided that the right of the parties to a full day in court is not substantially impaired. Thus, this Court may
treat an appeal as a certiorari and vice-versa. In other words, when all the material facts are spread in the
records before Us, and all the parties have been duly heard, it matters little that the error of the court a quo is
of judgment or of jurisdiction. We can then and there render the appropriate judgment. Is within the
contemplation of this doctrine that as it is perfectly legal and within the power of this Court to strike down in
an appeal acts without or in excess of jurisdiction or committed with grave abuse of discretion, it cannot be
beyond the admit of its authority, in appropriate cases, to reverse in a certain proceed in any error of judgment
of a court a quo which cannot be exactly categorized as a flaw of jurisdiction. If there can be any doubt, which
I do not entertain, on whether or not the errors this Court has found in the decision of the Court of Appeals are
short of being jurisdiction nullities or excesses, this Court would still be on firm legal grounds should it choose
to reverse said decision here and now even if such errors can be considered as mere mistakes of judgment or
only as faults in the exercise of jurisdiction, so as to avoid the unnecessary return of this case to the lower court
for the sole purpose of pursuing the ordinary course of an appeal. (Emphasis supplied). 30-d

Insistence on the application of the questioned Court industrial Relations rule in this particular case at bar would an unreasoning
adherence to "Procedural niceties" which denies justice to the herein laborers, whose basic human freedoms, including the right
to survive, must be according supremacy over the property rights of their employer firm which has been given a full hearing on
this case, especially when, as in the case at bar, no actual material damage has be demonstrated as having been inflicted on its
property rights.

If We can disregard our own rules when justice requires it, obedience to the Constitution renders more imperative the
suspension of a Court of Industrial Relations rule that clash with the human rights sanctioned and shielded with resolution
concern by the specific guarantees outlined in the organic law. It should be stressed that the application in the instant case
Section 15 of the Court of Industrial Relations rules relied upon by herein respondent firm is unreasonable and therefore such
application becomes unconstitutional as it subverts the human rights of petitioning labor union and workers in the light of the
peculiar facts and circumstances revealed by the record.
The suspension of the application of Section 15 of the Court of Industrial Relations rules with reference to the case at is also
authorized by Section 20 of Commonwealth Act No. 103, the C.I.R. charter, which enjoins the Court of Industrial Relations to
"act according to justice and equity and substantial merits of the case, without regard to technicalities or legal forms ..."

On several occasions, We emphasized this doctrine which was re-stated by Mr. Justice Barredo, speaking for the Court, in the
1970 case of Kapisanan, etc. vs. Hamilton, etc., et. al., 30-e thus:

As to the point that the evidence being offered by the petitioners in the motion for new trial is not "newly
discovered," as such term is understood in the rules of procedure for the ordinary courts, We hold that such
criterion is not binding upon the Court of Industrial Relations. Under Section 20 of Commonwealth Act No.
103, 'The Court of Industrial Relations shall adopt its, rules or procedure and shall have such other powers as
generally pertain to a court of justice: Provided, however, That in the hearing, investigation and determination
of any question or controversy and in exercising any duties and power under this Act, the Court shall act
according to 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 manner as it
may deem just and equitable.' By this provision the industrial court is disengaged from the rigidity of the
technicalities applicable to ordinary courts. Said court is not even restricted to the specific relief demanded by
the parties but may issue such orders as may be deemed necessary or expedient for the purpose of settling the
dispute or dispelling any doubts that may give rise to future disputes. (Ang Tibay v. C.I.R., G.R. No. 46496,
Feb. 17, 1940; Manila Trading & Supply Co. v. Phil. Labor, 71 Phil. 124.) For these reasons, We believe that
this provision is ample enough to have enabled the respondent court to consider whether or not its previous
ruling that petitioners constitute a minority was founded on fact, without regard to the technical meaning of
newly discovered evidence. ... (Alonso v. Villamor, 16 Phil. 315; Chua Kiong v. Whitaker, 46 Phil. 578).
(emphasis supplied.)

To apply Section 15 of the Court of Industrial Relations rules with "pedantic rigor" in the instant case is to rule in effect that the
poor workers, who can ill-afford an alert competent lawyer, can no longer seek the sanctuary of human freedoms secured to
them by the fundamental law, simply because their counsel erroneously believing that he received a copy of the decision on
September 23, 1969, instead of September 22, 1969 - filed his motion for reconsideration September 29, 1969, which practically
is only one day late considering that September 28, 1969 was a Sunday.

Many a time, this Court deviated from procedure technicalities when they ceased to be instruments of justice, for the attainment
of which such rules have been devised. Summarizing the jurisprudence on this score, Mr. Justice Fernando, speaking for a
unanimous Court in Palma vs. Oreta, 30-f Stated:

As was so aptly expressed by Justice Moreland in Alonso v. Villamor (16 Phil. 315 [1910]. The Villamor
decision was cited with approval in Register of Deeds v. Phil. Nat. Bank, 84 Phil. 600 [1949]; Potenciano v.
Court of Appeals, 104 Phil. 156 [1958] and Uy v. Uy, 14243, June 30, 1961, 2 SCRA 675.), decided as far
back as 1910, "technicality. when it deserts its proper-office as an aid to justice and becomes its great
hindrance and chief enemy, deserves scant consideration from courts." (Ibid., p, 322.) To that norm, this Court
has remained committed. The late Justice Recto in Blanco v. Bernabe, (63 Phil. 124 [1936]) was of a similar
mind. For him the interpretation of procedural rule should never "sacrifice the ends justice." While "procedural
laws are no other than technicalities" view them in their entirety, 'they were adopted not as ends themselves for
the compliance with which courts have organized and function, but as means conducive to the realization the
administration of the law and of justice (Ibid., p.,128). We have remained steadfastly opposed, in the highly
rhetorical language Justice Felix, to "a sacrifice of substantial rights of a litigant in altar of sophisticated
technicalities with impairment of the sacred principles of justice." (Potenciano v. Court of Appeals, 104 Phil.
156, 161 [1958]). As succinctly put by Justice Makalintal, they "should give way to the realities of the
situation." (Urbayan v. Caltex, L-15379, Aug. 31, 1962, 5 SCRA 1016, 1019). In the latest decision in point
promulgated in 1968, (Udan v. Amon, (1968, 23 SCRA citing McEntee v. Manotok, L-14968, Oct. 27, 1961, 3
SCRA 272.) Justice Zaldivar was partial to an earlier formulation of Justice Labrador that rules of procedure
"are not to be applied in a very rigid, technical sense"; but are intended "to help secure substantial justice."
(Ibid., p. 843) ... 30-g

Even if the questioned Court of Industrial Relations orders and rule were to be given effect, the dismissal or termination of the
employment of the petitioning eight (8) leaders of the Union is harsh for a one-day absence from work. The respondent Court
itself recognized the severity of such a sanction when it did not include the dismissal of the other 393 employees who are
members of the same Union and who participated in the demonstration against the Pasig police. As a matter of fact, upon the
intercession of the Secretary of Labor, the Union members who are not officers, were not dismissed and only the Union itself
and its thirteen (13) officers were specifically named as respondents in the unfair labor practice charge filed against them by the
firm (pp. 16-20, respondent's Brief; Annexes "A", "B" and "C", pp. 20-30, rec.). Counsel for respondent firm insinuates that not
all the 400 or so employee participated in the demonstration, for which reason only the Union and its thirteen (13) officers were
specifically named in the unfair labor practice charge (p. 20, respondent's brief). If that were so, then many, if not all, of the
morning and regular shifts reported for work on March 4, 1969 and that, as a consequence, the firm continued in operation that
day and did not sustain any damage.

The appropriate penalty if it deserves any penalty at all should have been simply to charge said one-day absence against
their vacation or sick leave. But to dismiss the eight (8) leaders of the petitioner Union is a most cruel penalty, since as
aforestated the Union leaders depend on their wages for their daily sustenance as well as that of their respective families aside
from the fact that it is a lethal blow to unionism, while at the same time strengthening the oppressive hand of the petty tyrants in
the localities.

Mr. Justice Douglas articulated this pointed reminder:

The challenge to our liberties comes frequently not from those who consciously seek to destroy our system of
Government, but from men of goodwill good men who allow their proper concerns to blind them to the fact
that what they propose to accomplish involves an impairment of liberty.

... The Motives of these men are often commendable. What we must remember, however, is thatpreservation
of liberties does not depend on motives. A suppression of liberty has the same effect whether the suppress or be
a reformer or an outlaw. The only protection against misguided zeal is a constant alertness of the infractions
of the guarantees of liberty contained in our Constitution. Each surrender of liberty to the demands of the
moment makes easier another, larger surrender. The battle over the Bill of Rights is a never ending one.

... The liberties of any person are the liberties of all of us.

... In short, the Liberties of none are safe unless the liberties of all are protected.

... But even if we should sense no danger to our own liberties, even if we feel secure because we belong to a
group that is important and respected, we must recognize that our Bill of Rights is a code of fair play for the
less fortunate that we in all honor and good conscience must be observe. 31

The case at bar is worse.

Management has shown not only lack of good-will or good intention, but a complete lack of sympathetic understanding of the
plight of its laborers who claim that they are being subjected to indignities by the local police, It was more expedient for the
firm to conserve its income or profits than to assist its employees in their fight for their freedoms and security against alleged
petty tyrannies of local police officers. This is sheer opportunism. Such opportunism and expediency resorted to by the
respondent company assaulted the immunities and welfare of its employees. It was pure and implement selfishness, if not greed.

Of happy relevance is the 1967 case of Republic Savings Bank vs. C.I.R., 32 where the petitioner Bank dismissed eight (8)
employees for having written and published "a patently libelous letter ... to the Bank president demanding his resignation on the
grounds of immorality, nepotism in the appointment and favoritism as well as discrimination in the promotion of bank
employees." Therein, thru Mr. Justice Castro, We ruled:

It will avail the Bank none to gloat over this admission of the respondents. Assuming that the latter acted in
their individual capacities when they wrote the letter-charge they were nonetheless protected for they were
engaged in concerted activity, in the exercise of their right of self organization that includes concerted activity
for mutual aid and protection, (Section 3 of the Industrial Peace Act ...) This is the view of some members of
this Court. For, as has been aptly stated, the joining in protests or demands, even by a small group of
employees, if in furtherance of their interests as such, is a concerted activity protected by the Industrial Peace
Act. It is not necessary that union activity be involved or that collective bargaining be contemplated. (Annot.,
6 A.L.R. 2d 416 [1949]).

xxx xxx xxx


Instead of stifling criticism, the Bank should have allowed the respondents to air their grievances.

xxx xxx xxx

The Bank defends its action by invoking its right to discipline for what it calls the respondents' libel in giving
undue publicity to their letter-charge. To be sure, the right of self-organization of employees is not unlimited
(Republic Aviation Corp. vs. NLRB 324 U.S. 793 [1945]), as the right of the employer to discharge for cause
(Philippine Education Co. v. Union of Phil. Educ. Employees, L-13773, April 29, 1960) is undenied. The
Industrial Peace Act does not touch the normal exercise of the right of the employer to select his employees or
to discharge them. It is directed solely against the abuse of that right by interfering with the countervailing
right of self organization (Phelps Dodge Corp. v. NLRB 313 U.S. 177 [1941])...

xxx xxx xxx

In the final sum and substance, this Court is in unanimity that the Bank's conduct, identified as an interference
with the employees' right of self-organization or as a retaliatory action, and/or as a refusal to bargain
collectively, constituted an unfair labor practice within the meaning and intendment of section 4(a) of the
Industrial Peace Act. (Emphasis supplied.) 33

If free expression was accorded recognition and protection to fortify labor unionism in the Republic Savings case, supra, where
the complaint assailed the morality and integrity of the bank president no less, such recognition and protection for free speech,
free assembly and right to petition are rendered all the more justifiable and more imperative in the case at bar, where the mass
demonstration was not against the company nor any of its officers.

WHEREFORE, judgement is hereby rendered:

(1) setting aside as null and void the orders of the respondent Court of Industrial Relations dated September 15 and October 9,
1969; and

(2) directing the re instatement of the herein eight (8) petitioners, with full back pay from the date of their separation from the
service until re instated, minus one day's pay and whatever earnings they might have realized from other sources during their
separation from the service.

With costs against private respondent Philippine Blooming Company, Inc.

Zaldivar, Castro, Fernando and Esguerra, JJ., concur.

Makalintal, C.J, took no part.

Separate Opinions

BARREDO, J., dissenting:

I bow in respectful and sincere admiration, but my sense of duty compels me to dissent.

The background of this case may be found principally in the stipulation of facts upon which the decision under review is based.
It is as follows:
1. That complainant Philippine Blooming Mills, Company, Inc., is a corporation existing and operating under
and by virtue of the laws of the Philippines with corporate address at 666 Muelle de Binondo, Manila, which is
the employer of respondent;

2. That Philippine Blooming Mills Employees Organization PBMEO for short, is a legitimate labor
organization, and the respondents herein are either officers of respondent PBMEO or members thereof;

3. That on March 2, 1969 complainant company learned of the projected mass demonstration at Malacaang in
protest against alleged abuses of the Pasig Police Department to be participated by the first shift (6:00 AM
2:00 PM workers as well as those working in the regular shifts (7:00 A.M. to 4:00 PM and 8:00 AM to 5:00
PM in the morning of March 4, 1969;

4. That a meeting was called by the Company on March 3, 1969 at about 11:00 A.M. at the Company's
canteen, and those present were: for the Company: (1) Mr. Arthur L. Ang, (2) Atty. Cesareo S. de Leon, Jr. (3)
and all department and section heads. For the PBMEO (1) Florencio Padrigano, (2) Rufino Roxas, (3) Mariano
de Leon, (4) Asencion Paciente, (5) Bonifacio Vacuna and (6) Benjamin Pagcu.

5. That the Company asked the union panel to confirm or deny said projected mass demonstration at
Malacaang on March 4, 1969. PBMEO thru Benjamin Pagcu who acted as the spokesman of the union panel,
confirmed the planned demonstration and stated that the demonstration or rally cannot be cancelled because it
has already been agreed upon in the meeting. Pagcu explained further that the demonstration has nothing to do
with the Company because the union has no quarrel or dispute with Management;

6. That Management, thru Atty. C.S. de Leon, Company personnel manager, informed PBMEO that the
demonstration is an inalienable right of the union guaranteed by the Constitution but emphasized, however,
that any demonstration for that matter should not unduly prejudice the normal operation of the Company. For
which reason, the Company, thru Atty. C.S. de Leon, warned the PBMEO representatives that workers who
belong to the first and regular shifts, who without previous leave of absence approved by the Company,
particularly the officers present who are the organizers of the demonstration, who shall fail to report for work
the following morning (March 4, 1969) shall be dismissed, because such failure is a violation of the existing
CBA and, therefore, would be amounting to an illegal strike;

7. That at about 5:00 P.M. on March 3, 1969, another meeting was convoked. Company represented by Atty.
C.S. de Leon, Jr. The Union panel was composed of: Nicanor Tolentino, Rodulfo Munsod, Benjamin Pagcu
and Florencio Padrigano. In this afternoon meeting of March 3, 1969, Company reiterated and appealed to the
PBMEO representatives that while all workers may join the Malacaang demonstration, the workers for the
first and regular shift of March 4, 1969 should be excused from joining the demonstration and should report
for work; and thus utilize the workers in the 2nd and 3rd shifts in order not to violate the provisions of the
CBA, particularly Article XXIV "NO LOCKOUT NO STRIKE". All those who will not follow this
warning of the Company shall be dismissed; De Leon reiterated the Company's warning that the officers shall
be primarily liable being the organizers of the mass demonstration. The union panel countered that it was
rather too late to change their plans inasmuch as the Malacaang demonstration will be held the following
morning; and

8. That a certain Mr. Wilfredo Ariston, adviser of PBMEO sent a cablegram to the Company which was
received 9:50 A.M., March 4, 1969, the contents of which are as follows: 'REITERATING REQUEST
EXCUSE DAY SHIFT EMPLOYEES JOINING DEMONSTRATION MARCH 4, 1969.

Additionally, the trial court found that "the projected demonstration did in fact occur and in the process paralyzed to a large
extent the operations of the complainant company". (p. 5, Annex F).

Upon these facts the Prosecution Division of the Court of Industrial Relations filed with said court a complaint for Unfair Labor
Practice against petitioners charging that: .

3. That on March 4, 1969, respondents (petitioners herein) particularly those in the first shift, in violation of
the existing collective bargaining agreement and without filing the necessary notice as provided for by law,
failed to report for work, amounting to a declaration of strike;
4. That the above acts are in violation of Section 4(a) subparagraph 6, in relation to Sections 13, 14 and 15 of
Republic Act No. 875, and of the collective bargaining agreement. (Pars. 3 and 4, Annex C.)

After due hearing, the court rendered judgment, the dispositive part of which read's:

IN VIEW HEREOF, the respondent Philippine Blooming Mills Employees Organization is found guilty of
bargaining in bad faith and is hereby ordered to cease and desist from further committing the same and its
representatives namely: respondent Florencio Padrigano, Rufino Roxas, Mariano de Leon, Asencion Paciente,
Bonifacio Vacuna, Benjamin Pagcu, Nicanor Tolentino and Rodulfo Monsod who are directly responsible for
perpetrating this unfair labor practice act, are hereby considered to have lost their status as employees of the
Philippine Blooming Mills, Inc. (p. 8, Annex F.)

Although it is alleged in the petition herein that petitioners were notified of this decision on September 23, 1969, there seems to
be no serious question that they were actually served therewith on September 22, 1969. In fact, petitioners admitted this date of
notice in paragraph 2 of their Petition for Relief dated October 30, 1969 and filed with the industrial court on the following day.
(See Annex K.)

It is not controverted that it was only on September 29, 1969, or seven (7) days after they were notified of the court's decision,
that petitioners filed their motion for reconsideration with the industrial court; as it is also not disputed that they filed their
"Arguments in Support of the Respondents' Motion for Reconsideration" only on October 14, 1969. (See Annex I.) In other
words, petitioners' motion for reconsideration was filed two (2) days after the lapse of the five (5) day period provided for the
filing thereof in the rules of the Court of Industrial Relations, whereas the "Arguments" were filed five (5) days after the
expiration of the period therefor also specified in the same rules.

Accordingly, the first issue that confronts the Court is the one raised by respondent private firm, namely, that in view of the
failure of petitioners to file not only their motion for reconsideration but also their arguments in support thereof within the
periods respectively fixed in the rules therefor, the Court of Industrial Relations acted correctly and within the law in rendering
and issuing its impugned order of October 9, 1969 dismissing petitioners' motion for reconsideration.

Respondent's contention presents no problem. Squarely applicable to the facts hereof is the decision of this Court in Elizalde &
Co. Inc. vs. Court of Industrial Relations1 wherein it was ruled that:

August 6, 1963. Petitioner received a copy of the decision of the then Associate Judge Arsenio I. Martinez, the
dispositive part of which was set forth earlier in this opinion.

August 12, 1963. Petitioner filed a motion for reconsideration. No arguments were advanced in support
thereof.

August 21, 1963. Petitioner moved for additional time to file its arguments in support of its motion to
reconsider.

August 27, 1963. Petitioner filed its arguments in support of its aforesaid motion seeking reconsideration.

September 16, 1963. CIR en banc resolved to dismiss the motion for reconsideration. Ground therefor was that
the arguments were filed out of time.

October 3, 1963. Petitioner filed its notice of appeal and at the same time lodged the present petition with this
Court.

Upon respondent Perlado's return and petitioner's brief (respondents did not file their brief), the case is now
before us for resolution.

1. That the judgment appealed from is a final judgment not merely an interlocutory order there is no
doubt. The fact that there is need for computation of respondent Perlado's overtime pay would not render the
decision incomplete. This in effect is the holding of the Court in Pan American World Airways System
(Philippines) vs. Pan American Employees Association, which runs thus: 'It is next contended that in ordering
the Chief of the Examining Division or his representative to compute the compensation due, the Industrial
Court unduly delegated its judicial functions and thereby rendered an incomplete decision. We do not believe
so. Computation of the overtime pay involves a mechanical function, at most. And the report would still have
to be submitted to the Industrial Court for its approval, by the very terms of the order itself. That there was no
specification of the amount of overtime pay in the decision did not make it incomplete, since this matter should
necessarily be made clear enough in the implementation of the decision (see Malate Taxicab & Garage, Inc. vs.
CIR, et al.,
L-8718, May 11, 1956).

2. But has that judgment reached the stage of finality in the sense that it can no longer, be disturbed?

CIR Rules of Procedure, as amended, and the jurisprudence of this Court both answer the question in the
affirmative.

Section 15 of the CIR Rules requires that one who seeks to reconsider the judgment of the trial judge must do
so within five (5) days from the date on which he received notice of the decision, subject of the motion. Next
follows Section 16 which says that the motion must be submitted with arguments supporting the same. But if
said arguments could not be submitted simultaneously with the motion, the same section commands the 'the
movant shall file the same within ten (10) days from the date of the filing of his motion for reconsideration.'
Section 17 of the same rules admonishes a movant that "(f)ailure to observe the above-specified periods shall
be sufficient cause for dismissal of the motion for reconsideration or striking out of the answer and/or the
supporting arguments, as the case may be".

Not that the foregoing rules stand alone. Jurisprudence has since stabilized the enforceability thereof. Thus,
in Bien vs. Castillo, (97 Phil. 956) we ruled that where a pro forma motion for reconsideration was filed out of
time its denial is in order pursuant to CIR rules, regardless of whether the arguments in support of said motion
were or were not filed on time. Pangasinan Employees Laborers & Tenants Association (PELTA) vs.
Martinez, (L-13846, May 20, 1960) pronounced that where a motion to reconsider is filed out of time, the
order or decision subject of reconsideration comes final. And so also, where the arguments in support of the
motion for reconsideration are filed beyond the ten-day reglementary period, the pre forma motion for
reconsideration although seasonably filed must nevertheless be denied. This in essence is our ruling in Local
7, Press & Printing Free Workers (FFW) vs. Tabigne. The teaching in Luzon Stevedoring Co., Inc. vs. Court of
Industrial Relations, is that where the motion for reconsideration is denied upon the ground that the arguments
in support thereof were filed out of time, the order or decision subject of the motion becomes "final and
unappealable".

We find no difficulty in applying the foregoing rules and pronouncements of this Court in the case before us.
On August 6, petitioner received a copy of the judgment of Judge Arsenio I. Martinez aforesaid. Petitioner's
motion to reconsider without arguments in support thereof of August 12 was filed on time. For, August
11, the end of the five-day reglementary period to file a motion for reconsideration, was a Sunday. But,
actually, the written arguments in support of the said motion were submitted to the court on August 27. The
period from August 12 to August 27, is a space of fifteen (15) days. Surely enough, said arguments were filed
out of time five (5) days late. And the judgment had become final.

3. There is, of course, petitioner's motion of August 21, 1963 seeking extension of time within which to present
its arguments in support of its motion. Counsel in his petition before this Court pleads that the foregoing
motion was grounded on the 'extremely busy and difficult schedule of counsel which would not enable him to
do so within the stated ten-day reglementary period. The arguments were only filed on August 27 five (5)
days late, as aforesaid.

The foregoing circumstances will not avail petitioner any. It is to be noted that the motion for expansion of
time was filed only on August 21, that is, one day before the due date which is August 22. It was petitioner's
duty to see to it that the court act on this motion forthwith or at least inquire as to the fate thereof not later than
the 22nd of August. It did not. It merely filed its arguments on the 27th.

To be underscored at this point is that "obviously to speed up the disposition of cases", CIR "has a standing
rule against the extension of the ten-day period for filing supporting arguments". That no-extension policy
should have placed petitioner on guard. It should not have simply folded its arms, sit by supinely and relied on
the court's generosity. To compound petitioner's neglect, it filed the arguments only on August 27, 1953,
knowing full well that by that time the reglementary period had expired.

Petitioner cannot complain against CIR's ruling of September 16, 1963 dismissing the motion for
reconsideration on the ground that the supporting arguments were filed out of time. That ruling in effect denied
the motion for extension.

We rule that CIR's judgment has become final and unappealable. We may not review the same.

Notwithstanding this unequivocal and unmistakable precedent, which has not been in any way modified, much less revoked or
reversed by this Court, the main opinion has chosen not only to go into the merits of petitioners' pose that the respondent court
erred in holding them guilty of bargaining in bad faith but also to ultimately uphold petitioners' claim for reinstatement on
constitutional grounds.

Precisely because the conclusions of the main opinion are predicated on an exposition of the constitutional guarantees of
freedoms of speech and peaceful assembly for redress of grievances, so scholarly and masterful that it is bound to overwhelm
Us unless We note carefully the real issues in this case, I am constrained, over and above my sincere admiration for the
eloquence and zeal of Mr. Justice Makasiar's brilliant dissertation, to dutifully state that as presented by petitioners themselves
and in the light of its attendant circumstances, this case does not call for the resolution of any constitutional issue. Admittedly,
the invocation of any constitutional guarantee, particularly when it directly affects individual freedoms enshrined in the bill of
rights, deserves the closest attention of this Court. It is my understanding of constitutional law and judicial practices related
thereto, however, that even the most valuable of our constitutional rights may be protected by the courts only when their
jurisdiction over the subject matter is unquestionably established and the applicable rules of procedure consistent with
substantive and procedural due process are observed. No doubt no constitutional right can be sacrificed in the altar of procedural
technicalities, very often fittingly downgraded as niceties but as far as I know, this principle is applied to annul or set aside final
judgments only in cases wherein there is a possible denial of due process. I have not come across any instance, and none is
mentioned or cited in the well-documented main opinion, wherein a final and executory judgment has been invalidated and set
aside upon the ground that the same has the effect of sanctioning the violation of a constitutional right, unless such violation
amounts to a denial of due process.

Without support from any provision of the constitution or any law or from any judicial precedent or reason of principle, the
main opinion nudely and unqualifiedly asserts, as if it were universally established and accepted as an absolute rule, that the
violation of a constitutional right divests the court of jurisdiction; and as a consequence its judgment is null and void and
confers no rights". Chavez vs. Court of Appeals, 24 SCRA 663, which is mentioned almost in passing, does uphold the
proposition that "relief from a criminal conviction secured at the sacrifice of constitutional liberties, may be obtained through
habeas corpus proceedings even after the finality of the judgment". And, of course, Chavez is correct; as is also Abriol vs.
Homeres2 which, in principle, served as its precedent, for the very simple reason that in both of those cases, the accused were
denied due process. In Chavez, the accused was compelled to testify against himself as a witness for the prosecution; in Abriol,
the accused was denied his request to be allowed to present evidence to establish his defense after his demurrer to the People's
evidence was denied.

As may be seen, however, the constitutional issues involved in those cases are a far cry from the one now before Us. Here,
petitioners do not claim they were denied due process. Nor do they pretend that in denying their motion for reconsideration, "the
respondent Court of Industrial Relations and private firm trenched upon any of their constitutional immunities ...," contrary to
the statement to such effect in the main opinion. Indeed, neither in the petition herein nor in any of the other pleading of
petitioners can any direct or indirect assertion be found assailing the impugned decision of the respondent court as being null
and void because it sanctioned a denial of a valued constitutional liberty.

In their petition, petitioners state the issue for Our resolution as follows:

Petitioners herein humbly submit that the issue to be resolved is whether or not the respondent Court en
banc under the facts and circumstances, should consider the Motion for Reconsideration filed by your
petitioners.

Petitioners, therefore, in filing this petition for a writ of certiorari, humbly beg this Honorable Court to treat
this petition under Rule 43 and 65 of the Rules of Court.

xxx xxx xxx


The basic issue therefore is the application by the Court en banc of the strict and narrow technical rules of
procedure without taking into account justice, equity and substantial merits of the case.

On the other hand, the complete argument submitted by petitioners on this point in their brief runs thus:

III

ISSUES

1. Does the refusal to heed a warning in the exercise of a fundamental right to peaceably assemble and petition
the government for redress of grievances constitute bargaining in bad faith? and,

Do the facts found by the court below justify the declaration and conclusion that the union was guilty of
bargaining in bad faith meriting the dismissal of the persons allegedly responsible therefore?

2. Was there grave abuse of discretion when the respondent court refused to act one way or another on the
petition for relief from the resolution of October 9, 1969?

IV

ARGUMENT

The respondent Court erred in finding the petition union guilty of bargaining in bad faith and consequently
dismissing the persons allegedly responsible therefor, because such conclusion is country to the evidence on
record; that the dismissal of leaders was discriminatory.

As a result of exercising the constitutional rights of freedom to assemble and petition the duly constituted
authorities for redress of their grievances, the petitioners were charged and then condemned of bargaining in
bad faith.

The findings that petitioners were guilty of bargaining in bad faith were not borne out by the records. It was
not even alleged nor proven by evidence. What has been alleged and which the respondent company tried to
prove was that the demonstration amounted to a strike and hence, a violation of the provisions of the "no-
lockout no strike" clause of the collective bargaining agreement. However, this allegation and proof
submitted by the respondent company were practically resolved when the respondent court in the same
decision stated categorically:

'The company alleges that the walkout because of the demonstration is tantamount to a
declaration of a strike. We do not think so, as the same is not rooted in any industrial dispute
although there is a concerted act and the occurrence of a temporary stoppage of work.'
(Emphasis supplied, p. 4, 5th paragraph, Decision.)

The respondent court's findings that the petitioner union bargained in bad faith is not tenable
because:

First, it has not been alleged nor proven by the respondent company; .

Second, before the demonstration, the petitioner union and the respondent company convened twice in a
meeting to thresh out the matter of demonstration. Petitioners requested that the employees and workers be
excused but the respondent company instead of granting the request or even settling the matter so that the
hours of work will not be disrupted, immediately threatened the employees of mass dismissal;

Third, the refusal of the petitioner union to grant the request of the company that the first shift shall be
excluded in the demonstration is not tantamount to bargaining in bad faith because the company knew that the
officers of the union belonged to the first shift, and that the union cannot go and lead the demonstration
without their officers. It must be stated that the company intends to prohibit its officers to lead and join the
demonstration because most of them belonged to the first shift; and
Fourth, the findings of the respondent court that the demonstration if allowed will practically give the union
the right to change the working conditions agreed in the CBA is a conclusion of facts, opinionated and not
borne by any evidence on record. The demonstration did not practically change the terms or conditions of
employment because it was only for one (1) day and the company knew about it before it went through. We
can even say that it was the company who bargained in bad faith, when upon representation of the Bureau of
Labor not to dismiss the employees demonstrating, the company tacitly approved the same and yet while the
demonstration was in progress, the company filed a ULP Charge and consequently dismissed those who
participated.

Records of the case show that more or less 400 members of the union participated in the demonstration and
yet, the respondent court selected the eight officers to be dismissed from the union thus losing their status as
employees of the respondent company. The respondent court should have taken into account that the
company's action in allowing the return of more or less three hundred ninety two (392) employees/members of
the union is an act of condonation and the dismissal of the eight (8) officers is an act of discrimination (Phil.
Air Lines Inc., vs. Phil. Air Lines Employees Association, G.R. No. L-8197, Oct. 31, 1958). Seemingly, from
the opinion stated in the decision by the court, while there is a collective bargaining agreement, the union
cannot go on demonstration or go on strike because it will change the terms and conditions of employment
agreed in the CBA. It follows that the CBA is over and above the constitutional rights of a man to demonstrate
and the statutory rights of a union to strike as provided for in Republic Act 875. This creates a bad precedent
because it will appear that the rights of the union is solely dependent upon the CBA.

One of the cardinal primary rights which must be respected in proceedings before the Court of Industrial
Relations is that "the decision must be rendered on the evidence presented at the hearing, or at least contained
in the record and disclosed to the parties affected." (Interstate Commerce Commission vs. L & N R. Co., 227
U.S. 88, 33 S. Ct. 185, 57 Law ed. 431.) Only by confining the administrative tribunal to the evidence
disclosed to the parties, can the latter be protected in their rights to know and meet the case against them. (Ang
Tibay vs. CIR, G.R. No. L-45496, February 27, 1940.)

The petitioners respectfully and humbly submit that there is no scintilla of evidence to support the findings of
the respondent court that the petitioner union bargained in bad faith. Corollary therefore, the dismissal of the
individual petitioners is without basis either in fact or in law.

Additionally, in their reply they also argued that:

1) That respondent court's finding that petitioners have been guilty of bargaining in bad faith and consequently
lost their status as employees of the respondent company did not meet the meaning and comprehension of
"substantial merits of the case." Bargaining in bad faith has not been alleged in the complaint (Annex "C",
Petition) nor proven during the hearing of the can. The important and substantial merit of the case is whether
under the facts and circumstances alleged in respondent company's pleadings, the demonstration done by the
petitioners amounted to on "illegal strike" and therefore in violation of the "no strike no lock out" clause of
the Collective Bargaining Agreement. Petitioners respectfully reiterate and humbly submit, that the respondent
court had altogether opined and decided that such demonstration does not amount to a strike. Hence, with that
findings, petitioners should have been absolved of the charges against them. Nevertheless, the same respondent
court disregarding, its own findings, went out of bounds by declaring the petitioners as having "bargained in
faith." The stand of the respondent court is fallacious, as it follows the principle in logic as "non-siquitor";

2) That again respondents wanted to impress that the freedom to assemble peaceably to air grievances against
the duly constituted authorities as guaranteed in our Constitution is subject to the limitation of the agreement in
the Collective Bargaining Agreement. The fundamental rights of the petitioners to free speech and assembly is
paramount to the provision in the Collective Bargaining Agreement and such attempt to override the
constitutional provision would be null and void. These fundamental rights of the petitioners were not taken
into consideration in the deliberation of the case by the respondent court;

Thus, it is clear from the foregoing contentions that petitioners are not raising any issue of due process. They do not posit that
the decision of the industrial court is null and void on that constitutional ground. True it is that they fault the respondent court
for having priced the provisions of the collective bargaining agreement herein involved over and above their constitutional right
to peaceably assemble and petition for redress of their grievances against the abuses of the Pasig police, but in no sense at all do
they allege or contend that such action affects its jurisdiction in a manner that renders the proceedings a nullity. In other words,
petitioners themselves consider the alleged flaw in the court's action as a mere error of judgment rather than that of jurisdiction
which the main opinion projects. For this Court to roundly and indignantly condemn private respondent now for the grievous
violation of the fundamental law the main opinion sees in its refusal to allow all its workers to join the demonstration in
question, when that specific issue has not been duly presented to Us and properly argued, is to my mind unfair and unjust, for
the simple reason that the manner this case was brought to Us does not afford it the opportunity to be heard in regard to such
supposed constitutional transgression.

To be sure, petitioners do maintain, that respondent court committed an error of jurisdiction by finding petitioners guilty of
bargaining in bad faith when the charge against them alleged in the complaint was for having conducted a mass demonstration,
which "amounted to a strike", in violation of the Collective Bargaining Agreement, but definitely, this jurisdictional question
has no constitutional color. Indeed, We can even assume for the sake of argument, that the trial judge did err in not giving
preferential importance to the fundamental freedoms invoked by the petitioners over the management and proprietary attributes
claimed by the respondent private firm still, We cannot rightly hold that such disregard of petitioners' priceless liberties
divested His Honor of jurisdiction in the premises. The unbending doctrine of this Court is that "decisions, erroneous or not,
become final after the period fixed by law; litigations would be endless, no questions would be finally settled; and titles to
property would become precarious if the losing party were allowed to reopen them at any time in the future".3

I only have to add to this that the fact that the error is in the interpretation, construction or application of a constitutional precept
not constituting a denial of due process, should not make any difference. Juridically, a party cannot be less injured by an
overlooked or erroneously sanctioned violation of an ordinary statute than by a misconstrued or constitutional injunction
affecting his individual, freedoms. In both instances, there is injustice which should be intolerable were it not for the more
paramount considerations that inform the principle of immutability of final judgments. I dare say this must be the reason why,
as I have already noted, the main opinion does not cite any constitutional provision, law or rule or any judicial doctrine or
principle supporting its basic holding that infringement of constitutional guarantees, other than denial of due process, divests
courts of jurisdiction to render valid judgments.

In this connection, it must be recalled that the teaching of Philippine Association of Colleges and Universities vs. Secretary of
Education,4 following Santiago vs. Far Eastern Broadcasting,5 is that "it is one of our (the Supreme Court's) decisional
practices that unless a constitutional point is specifically raised, insisted upon and adequately argued, the court will not consider
it". In the case at bar, the petitioners have not raised, they are not insisting upon, much less have they adequately argued the
constitutional issues so extendedly and ably discussed in the main opinion.

Indeed, it does not seem wise and sound for the Supreme Court to hold that the erroneous resolution by a court of a
constitutional issue not amounting to a denial of due process renders its judgment or decision null and void, and, therefore,
subject to attack even after said judgment or decision has become final and executory. I have actually tried to bring myself into
agreement with the views of the distinguished and learned writer of the main opinion, if only to avoid dissenting from his well
prepared thesis, but its obvious incongruity with settled jurisprudence always comes to the fore to stifle my effort.

As a matter of fact, for a moment, it appeared to me as if I could go along with petitioners under the authority of our
constitutionally irreducible appellate jurisdiction under Section 2(5) of Article VII of the Philippines6 (reenacted
practically ipssisimis verbis in Section 5(2) of the 1973 Constitution), only to realize upon further reflection that the very power
granted to us to review decisions of lower courts involving questions of law(and these include constitutional issues not affecting
the validity of statutes, treaty, executive agreement, etc.) is not unqualified but has to be exercised only in the manner provided
in the law of the Rules of Court. In other words, before We can exercise appellate jurisdiction over constitutional issues, no
matter how important they may be, there must first be a showing of compliance with the applicable procedural law or rules,
among them, those governing appeals from the Court of Industrial Relations involved herein. Consequently, if by law or rule, a
judgment of the industrial court is already final and executory, this Court would be devoid of power and authority to review,
much less alter or modify the same, absent any denial of due process or fatal defect of jurisdiction. It must be borne in mind that
the situation confronting Us now is not merely whether or not We should pass upon a question or issue not specifically raised
by the party concerned, which, to be sure, could be enough reason to dissuade Us from taking pains in resolving the same;
rather, the real problem here is whether or not We have jurisdiction to entertain it. And, in this regard, as already stated earlier,
no less than Justice Conrado Sanchez, the writer of Chavez, supra., which is being relied upon by the main opinion, already laid
down the precedent in Elizalde vs. Court, supra, which for its four-square applicability to the facts of this case, We have no
choice but to follow, that is, that in view of reconsideration but even their argument supporting the same within the prescribed
period, "the judgment (against them)has become final, beyond recall".

Indeed, when I consider that courts would be useless if the finality and enforceability of their judgments are made contingent on
the correctness thereof from the constitutional standpoint, and that in truth, whether or not they are correct is something that is
always dependent upon combined opinion of the members of the Supreme Court, which in turn is naturally as changeable as the
members themselves are changed, I cannot conceive of anything more pernicious and destructive to a trustful administration of
justice than the idea that, even without any showing of denial of due process or want of jurisdiction of the court, a final and
executory judgment of such court may still be set aside or reopened in instances other than those expressly allowed by Rule 38
and that of extrinsic fraud under Article 1146(1) of the Civil Code.7 And just to emphasize the policy of the law of respecting
judgments once they have become final, even as this Court has ruled that final decisions are mute in the presence of fraud which
the law abhors,8 it is only when the fraud is extrinsic and not intrinsic that final and executory judgments may be set aside,9and
this only when the remedy is sought within the prescriptive period. 10

Apropos here is the following passage in Li Kim Those vs. Go Sin Kaw, 82 Phil. 776:

Litigation must end and terminate sometime and somewhere, and it is essential to an effective and efficient
administration of justice that once a judgment has become final, the winning party be not, through a mere
subterfuge, deprived of the fruits of the verdict. Courts must therefore guard against any scheme calculated to
bring about that result. Constituted as they are to put an end to controversies, courts should frown upon any
attempt to prolong them.

Likewise the stern admonition of Justice George Malcolm in Dy Cay v. Crossfield, 38 Phil. 521, thus:

... Public policy and sound practice demand that, at the risk of occasional errors, judgments of courts should
become final at some definite date fixed by law. The very object for which courts were instituted was to put an
end to controversies. To fulfill this purpose and to do so speedily, certain time limits, more or less arbitrary,
have to be set up to spur on the slothful. 'If a vacillating, irresolute judge were allowed to thus keep causes ever
within his power, to determine and redetermine them term after term, to bandy his judgments about from one
party to the other, and to change his conclusions as freely and as capriciously as a chamelon may change its
hues, then litigation might become more intolerable than the wrongs it is intended to redress.' (See Arnedo vs.
Llorente and Liongson (1911), 18 Phil., 257.).

My disagreement with the dissenters in Republic vs. Judge de los Angeles,


L-26112, October 4, 1971, 41 SCRA 422, was not as to the unalterability and invulnerability of final judgments but rather on
the correct interpretation of the contents of the judgment in question therein. Relevantly to this case at bar, I said then:

The point of res adjudicata discussed in the dissents has not escaped my attention. Neither am I overlooking
the point of the Chief Justice regarding the dangerous and inimical implications of a ruling that would
authorize the revision, amendment or alteration of a final and executory judgment. I want to emphasize that my
position in this opinion does not detract a whit from the soundness, authority and binding force of existing
doctrines enjoining any such modifications. The public policy of maintaining faith and respect in judicial
decisions, which inform said doctrines, is admittedly of the highest order. I am not advocating any departure
from them. Nor am I trying to put forth for execution a decision that I believe should have been rather than
what it is. All I am doing is to view not the judgment of Judge Tengco but the decision of this Court in G.R.
No. L-20950, as it is and not as I believe it should have been, and, by opinion, I would like to guide the court a
quo as to what, in my own view, is the true and correct meaning and implications of decision of this Court, not
that of Judge Tengco's.

The main opinion calls attention to many instant precisely involving cases in the industrial court, wherein the Court refused to
be constrained by technical rules of procedure in its determination to accord substantial justice to the parties I still believe in
those decisions, some of which were penned by me. I am certain, however, that in none of those precedents did this Court
disturb a judgment already final and executory. It too obvious to require extended elucidation or even reference any precedent
or authority that the principle of immutability of final judgments is not a mere technicality, and if it may considered to be in a
sense a procedural rule, it is one that is founded on public policy and cannot, therefore, yield to the ordinary plea that it must
give priority to substantial justice.

Apparently vent on looking for a constitutional point of due process to hold on, the main opinion goes far as to maintain that the
long existing and constantly applied rule governing the filing of motions for reconsideration in the Court of Industrial Relations,
"as applied in this case does not implement on reinforce or strengthen the constitutional rights affected, but instead constricts
the same to the point of nullifying the enjoyment thereof by the petitioning employees. Said Court on Industrial Relations Rule,
promulgated as it was pursuant to mere legislative delegation, is unreasonable and therefore is beyond the authority granted by
the Constitution and the law. A period of five (5) days within which to file a motion for reconsideration is too short, especially
for the aggrieve workers, who usually do not have the ready funds to meet the necessary expenses therefor. In case of the Court
of Appeal and the Supreme Court, a period of fifteen (15) days has been fixed for the filing of the motion for re-hearing or
reconsideration (Sec. 10, Rule 51; Sec. 1, Rule 52; Sec. 1, Rule 56, Revised Rules of Court). The delay in the filing of the
motion for reconsideration could have been only one day if September 28, 1969 was not a Sunday. This fact accentuates the
unreasonableness of the Court of Industrial Relations Rule insofar as circumstances of the instant case are concerned."

I am afraid the zeal and passion of these arguments do not justify the conclusion suggested. Viewed objectively, it can readily
be seen that there can hardly be any factual or logical basis for such a critical view of the rule in question. Said rule provides:

MOTIONS FOR RECONSIDERATION

Sec. 15. The movant shall file the motion, in six copies, within five (5) days from the date on which he
receives notice of the order or decision, object of the motion for reconsideration, the same to be verified under
oath with respect to the correctness of the allegations of fact, and serving a copy thereof, personally or by
registered mail, on the adverse party. The latter may file an answer, in six (6) copies, duly verified under oath.

Sec. 16. Both the motion and the answer shall be submitted with arguments supporting the same. If the
arguments can not be submitted simultaneously with said motions, upon notice Court, the movant shall file
same within ten (10) days from the date of the filing of his motion for reconsideration. The adverse party shall
also file his answer within ten (10) days from the receipt by him of a copy of the arguments submitted by the
movant.

Sec. 17. After an answer to the motion is registered, or after ten (10) days from the receipt of the arguments in
support of said motion having been filed, the motion shall be deemed submitted for resolution of the Court in
banc, unless it is considered necessary to bear oral arguments, in which case the Court shall issue the
corresponding order or notice to that effect.

Failure to observe the above-specified periods shall be sufficient cause for dismissal of the motion for
reconsideration or striking out of the answer and/or the supporting arguments, as the case may be. (As
amended April 20, 1951, Court of Industrial Relations.).

As implemented and enforced in actual practice, this rule, as everyone acquainted with proceedings in the industrial court well
knows, precisely permits the party aggrieved by a judgment to file no more than a pro-forma motion for reconsideration without
any argument or lengthy discussion and with barely a brief statement of the fundamental ground or grounds therefor, without
prejudice to supplementing the same by making the necessary exposition, with citations laws and authorities, in the written
arguments the be filed (10) days later. In truth, such a pro-forma motion has to effect of just advising the court and the other
party that the movant does not agree with the judgment due to fundamental defects stated in brief and general terms. Evidently,
the purpose of this requirement is to apprise everyone concerned within the shortest possible time that a reconsideration is to
sought, and thereby enable the parties concerned to make whatever adjustments may be warranted by the situation, in the
meanwhile that the litigation is prolonged. It must borne in mind that cases in the industrial court may involve affect the
operation of vital industries in which labor-management problems might require day-to-day solutions and it is to the best
interests of justice and concerned that the attitude of each party at every imports juncture of the case be known to the other so
that both avenues for earlier settlement may, if possible, be explored.

There can be no reason at all to complain that the time fixed by the rule is short or inadequate. In fact, the motion filed
petitioners was no more than the following:

MOTION FOR RECONSIDERATION

COME NOW movant respondents, through counsel, to this Honorable Court most respectfully moves for the
RECONSIDERATION of the Order of this Honorable Court dated September 17, 1969 on the ground that the
same is not in accordance with law, evidence and facts adduced during the hearing of the above entitled case.

Movant-respondents most respectfully move for leave to file their respective arguments within ten (10) days
pursuant to Section 15, 16 & 17 as amended of the Rules of Court.

WHEREFORE, it is respectfully prayed that this Motion for Reconsideration be admitted.


Manila, September 27, 1969.

To say that five (5) days is an unreasonable period for the filing of such a motion is to me simply
incomprehensible. What worse in this case is that petitioners have not even taken the trouble of giving an
explanation of their inability to comply with the rule. Not only that, petitioners were also late five (5) days in
filing their written arguments in support of their motion, and, the only excuse offered for such delay is that
both the President of the Union and the office clerk who took charge of the matter forgot to do what they were
instructed to do by counsel, which, according to this Court, as I shall explain anon "is the most hackneyed and
habitual subterfuge employed by litigants who fail to observe the procedural requirements prescribed by the
Rules of Court". (Philippine Airlines, Inc. vs. Arca, infra). And yet, very indignantly, the main opinion would
want the Court to overlook such nonchalance and indifference.

In this connection, I might add that in my considered opinion, the rules fixing periods for the finality of judgments are in a sense
more substantive than procedural in their real nature, for in their operation they have the effect of either creating or terminating
rights pursuant to the terms of the particular judgment concerned. And the fact that the court that rendered such final judgment
is deprived of jurisdiction or authority to alter or modify the same enhances such substantive character. Moreover, because they
have the effect of terminating rights and the enforcement thereof, it may be said that said rules partake of the nature also of rules
of prescription, which again are substantive. Now, the twin predicates of prescription are inaction or abandonment and the
passage of time or a prescribed period. On the other hand, procrastination or failure to act on time is unquestionably a form of
abandonment, particularly when it is not or cannot be sufficiently explained. The most valuable right of a party may be lost by
prescription, and be has no reason to complain because public policy demands that rights must be asserted in time, as otherwise
they can be deemed waived.

I see no justification whatsoever for not applying these self-evident principles to the case of petitioners. Hence, I feel disinclined
to adopt the suggestion that the Court suspend, for the purposes of this case the rules aforequoted of the Court of Industrial
Relations. Besides, I have grave doubts as to whether we can suspend rules of other courts, particularly that is not under our
supervisory jurisdiction, being administrative agency under the Executive Department Withal, if, in order to hasten the
administration of substance justice, this Court did exercise in some instances its re power to amend its rules, I am positively
certain, it has done it for the purpose of reviving a case in which the judo has already become final and executory.

Before closing, it may be mentioned here, that as averred their petition, in a belated effort to salvage their Petitioners filed in the
industrial court on October 31, 1969 a Petition for relief alleging that their failure to file "Arguments in Support of their Motion
for Reconsideration within the reglementary period or five (5), if not seven (7), days late "was due to excusable negligence and
honest mistake committed by the President of the respondent Union and on office clerk of the counsel for respondents as shown
attested in their respective affidavits", (See Annexes K, and K-2) which in brief, consisted allegedly of the President's having
forgotten his appointment with his lawyer "despite previous instructions and of the said office employee having also
coincidentally forgotten "to do the work instructed (sic) to (him) by Atty. Osorio" because he "was busy with clerical jobs". No
sympathy at all can be evoked these allegations, for, under probably more justification circumstances, this Court ruled out a
similar explanation previous case this wise:

We find merit in PAL's petition. The excuse offered respondent Santos as reason for his failure to perfect in
due time appeal from the judgment of the Municipal Court, that counsel's clerk forgot to hand him the court
notice, is the most hackneyed and habitual subterfuge employed by litigants who fail to observe procedural
requirements prescribed by the Rules of Court. The uncritical acceptance of this kind of common place
excuses, in the face of the Supreme Court's repeated rulings that they are neither credible nor constitutive of
excusable negligence (Gaerlan vs. Bernal, L-4039, 29 January 1952; Mercado vs. Judge Domingo, L-19457,
December 1966) is certainly such whimsical exercise of judgment to be a grave abuse of discretion. (Philippine
Air Lines, Inc. Arca, 19 SCRA 300.)

For the reason, therefore, that the judgment of the industrial court sought to be reviewed in the present case has already become
final and executory, nay, not without the fault of the petitioners, hence, no matter how erroneous from the constitutional
viewpoint it may be, it is already beyond recall, I vote to dismiss this case, without pronouncement as to costs.

TEEHANKEE, J., concurring:

For having carried out a mass demonstration at Malacaang on March 4, 1969 in protest against alleged abuses of the Pasig
police department, upon two days' prior notice to respondent employer company, as against the latter's insistence that the first
shift 1should not participate but instead report for work, under pain of dismissal, the industrial court ordered the dismissal from
employment of the eight individual petitioners as union officers and organizers of the mass demonstration.

Respondent court's order finding petitioner union guilty on respondent's complaint of bargaining in bad faith and unfair labor
practice for having so carried out the mass demonstration, notwithstanding that it concededly was not a declaration of strike nor
directed in any manner against respondent employer, and ordering the dismissal of the union office manifestly constituted grave
abuse of discretion in fact and in law.

There could not be, in fact, bargaining in bad faith nor unfair labor practice since respondent firm conceded that "the
demonstration is an inalienable right of the union guaranteed' by the Constitution" and the union up to the day of the
demonstration pleaded by cablegram to the company to excuse the first shift and allow it to join the demonstration in
accordance with their previous requests.

Neither could there be, in law, a willful violation of the collective bargaining agreement's "no-strike" clause as would warrant
the union leaders' dismissal, since as found by respondent court itself the mass demonstration was not a declaration of a strike,
there being no industrial dispute between the protagonists, but merely the occurrence of a temporary stoppage of work" to
enable the workers to exercise their constitutional rights of free expression, peaceable assembly and petition for redress of
grievance against alleged police excesses.

Respondent court's en banc resolution dismissing petitioners' motion for reconsideration for having been filed two days late,
after expiration of the reglementary five-day period fixed by its rules, due to the negligence of petitioners' counsel and/or the
union president should likewise be set aside as a manifest act of grave abuse of discretion. Petitioners' petition for relief from
the normal adverse consequences of the late filing of their motion for reconsideration due to such negligence which was not
acted upon by respondent court should have been granted, considering the monstrous injustice that would otherwise be
caused the petitioners through their summary dismissal from employment, simply because they sought in good faith to exercise
basic human rights guaranteed them by the Constitution. It should be noted further that no proof of actual loss from the one-day
stoppage of work was shown by respondent company, providing basis to the main opinion's premise that its insistence on
dismissal of the union leaders for having included the first shift workers in the mass demonstration against its wishes was but an
act of arbitrary vindictiveness.

Only thus could the basic constitutional rights of the individual petitioners and the constitutional injunction to afford protection
to labor be given true substance and meaning. No person may be deprived of such basic rights without due process which is
but "responsiveness to the supremacy of reason, obedience to the dictates of justice. Negatively put, arbitrariness is ruled out
and unfairness avoided ... Due process is thus hostile to any official action marred by lack of reasonableness. Correctly it has
been identified as freedom from arbitrariness."2

Accordingly, I vote for the setting aside of the appealed orders of the respondent court and concur in the judgment for
petitioners as set forth in the main opinion.

Separate Opinions

BARREDO, J., dissenting:

I bow in respectful and sincere admiration, but my sense of duty compels me to dissent.

The background of this case may be found principally in the stipulation of facts upon which the decision under review is based.
It is as follows:

1. That complainant Philippine Blooming Mills, Company, Inc., is a corporation existing and operating under
and by virtue of the laws of the Philippines with corporate address at 666 Muelle de Binondo, Manila, which is
the employer of respondent;
2. That Philippine Blooming Mills Employees Organization PBMEO for short, is a legitimate labor
organization, and the respondents herein are either officers of respondent PBMEO or members thereof;

3. That on March 2, 1969 complainant company learned of the projected mass demonstration at Malacaang in
protest against alleged abuses of the Pasig Police Department to be participated by the first shift (6:00 AM
2:00 PM workers as well as those working in the regular shifts (7:00 A.M. to 4:00 PM and 8:00 AM to 5:00
PM in the morning of March 4, 1969;

4. That a meeting was called by the Company on March 3, 1969 at about 11:00 A.M. at the Company's
canteen, and those present were: for the Company: (1) Mr. Arthur L. Ang, (2) Atty. Cesareo S. de Leon, Jr. (3)
and all department and section heads. For the PBMEO (1) Florencio Padrigano, (2) Rufino Roxas, (3) Mariano
de Leon, (4) Asencion Paciente, (5) Bonifacio Vacuna and (6) Benjamin Pagcu.

5. That the Company asked the union panel to confirm or deny said projected mass demonstration at
Malacaang on March 4, 1969. PBMEO thru Benjamin Pagcu who acted as the spokesman of the union panel,
confirmed the planned demonstration and stated that the demonstration or rally cannot be cancelled because it
has already been agreed upon in the meeting. Pagcu explained further that the demonstration has nothing to do
with the Company because the union has no quarrel or dispute with Management;

6. That Management, thru Atty. C.S. de Leon, Company personnel manager, informed PBMEO that the
demonstration is an inalienable right of the union guaranteed by the Constitution but emphasized, however,
that any demonstration for that matter should not unduly prejudice the normal operation of the Company. For
which reason, the Company, thru Atty. C.S. de Leon, warned the PBMEO representatives that workers who
belong to the first and regular shifts, who without previous leave of absence approved by the Company,
particularly the officers present who are the organizers of the demonstration, who shall fail to report for work
the following morning (March 4, 1969) shall be dismissed, because such failure is a violation of the existing
CBA and, therefore, would be amounting to an illegal strike;

7. That at about 5:00 P.M. on March 3, 1969, another meeting was convoked. Company represented by Atty.
C.S. de Leon, Jr. The Union panel was composed of: Nicanor Tolentino, Rodulfo Munsod, Benjamin Pagcu
and Florencio Padrigano. In this afternoon meeting of March 3, 1969, Company reiterated and appealed to the
PBMEO representatives that while all workers may join the Malacaang demonstration, the workers for the
first and regular shift of March 4, 1969 should be excused from joining the demonstration and should report
for work; and thus utilize the workers in the 2nd and 3rd shifts in order not to violate the provisions of the
CBA, particularly Article XXIV "NO LOCKOUT NO STRIKE". All those who will not follow this
warning of the Company shall be dismissed; De Leon reiterated the Company's warning that the officers shall
be primarily liable being the organizers of the mass demonstration. The union panel countered that it was
rather too late to change their plans inasmuch as the Malacaang demonstration will be held the following
morning; and

8. That a certain Mr. Wilfredo Ariston, adviser of PBMEO sent a cablegram to the Company which was
received 9:50 A.M., March 4, 1969, the contents of which are as follows: 'REITERATING REQUEST
EXCUSE DAY SHIFT EMPLOYEES JOINING DEMONSTRATION MARCH 4, 1969.

Additionally, the trial court found that "the projected demonstration did in fact occur and in the process paralyzed to a large
extent the operations of the complainant company". (p. 5, Annex F).

Upon these facts the Prosecution Division of the Court of Industrial Relations filed with said court a complaint for Unfair Labor
Practice against petitioners charging that: .

3. That on March 4, 1969, respondents (petitioners herein) particularly those in the first shift, in violation of
the existing collective bargaining agreement and without filing the necessary notice as provided for by law,
failed to report for work, amounting to a declaration of strike;

4. That the above acts are in violation of Section 4(a) subparagraph 6, in relation to Sections 13, 14 and 15 of
Republic Act No. 875, and of the collective bargaining agreement. (Pars. 3 and 4, Annex C.)
After due hearing, the court rendered judgment, the dispositive part of which read's:

IN VIEW HEREOF, the respondent Philippine Blooming Mills Employees Organization is found guilty of
bargaining in bad faith and is hereby ordered to cease and desist from further committing the same and its
representatives namely: respondent Florencio Padrigano, Rufino Roxas, Mariano de Leon, Asencion Paciente,
Bonifacio Vacuna, Benjamin Pagcu, Nicanor Tolentino and Rodulfo Monsod who are directly responsible for
perpetrating this unfair labor practice act, are hereby considered to have lost their status as employees of the
Philippine Blooming Mills, Inc. (p. 8, Annex F.)

Although it is alleged in the petition herein that petitioners were notified of this decision on September 23, 1969, there seems to
be no serious question that they were actually served therewith on September 22, 1969. In fact, petitioners admitted this date of
notice in paragraph 2 of their Petition for Relief dated October 30, 1969 and filed with the industrial court on the following day.
(See Annex K.)

It is not controverted that it was only on September 29, 1969, or seven (7) days after they were notified of the court's decision,
that petitioners filed their motion for reconsideration with the industrial court; as it is also not disputed that they filed their
"Arguments in Support of the Respondents' Motion for Reconsideration" only on October 14, 1969. (See Annex I.) In other
words, petitioners' motion for reconsideration was filed two (2) days after the lapse of the five (5) day period provided for the
filing thereof in the rules of the Court of Industrial Relations, whereas the "Arguments" were filed five (5) days after the
expiration of the period therefor also specified in the same rules.

Accordingly, the first issue that confronts the Court is the one raised by respondent private firm, namely, that in view of the
failure of petitioners to file not only their motion for reconsideration but also their arguments in support thereof within the
periods respectively fixed in the rules therefor, the Court of Industrial Relations acted correctly and within the law in rendering
and issuing its impugned order of October 9, 1969 dismissing petitioners' motion for reconsideration.

Respondent's contention presents no problem. Squarely applicable to the facts hereof is the decision of this Court in Elizalde &
Co. Inc. vs. Court of Industrial Relations1 wherein it was ruled that:

August 6, 1963. Petitioner received a copy of the decision of the then Associate Judge Arsenio I. Martinez, the
dispositive part of which was set forth earlier in this opinion.

August 12, 1963. Petitioner filed a motion for reconsideration. No arguments were advanced in support
thereof.

August 21, 1963. Petitioner moved for additional time to file its arguments in support of its motion to
reconsider.

August 27, 1963. Petitioner filed its arguments in support of its aforesaid motion seeking reconsideration.

September 16, 1963. CIR en banc resolved to dismiss the motion for reconsideration. Ground therefor was that
the arguments were filed out of time.

October 3, 1963. Petitioner filed its notice of appeal and at the same time lodged the present petition with this
Court.

Upon respondent Perlado's return and petitioner's brief (respondents did not file their brief), the case is now
before us for resolution.

1. That the judgment appealed from is a final judgment not merely an interlocutory order there is no
doubt. The fact that there is need for computation of respondent Perlado's overtime pay would not render the
decision incomplete. This in effect is the holding of the Court in Pan American World Airways System
(Philippines) vs. Pan American Employees Association, which runs thus: 'It is next contended that in ordering
the Chief of the Examining Division or his representative to compute the compensation due, the Industrial
Court unduly delegated its judicial functions and thereby rendered an incomplete decision. We do not believe
so. Computation of the overtime pay involves a mechanical function, at most. And the report would still have
to be submitted to the Industrial Court for its approval, by the very terms of the order itself. That there was no
specification of the amount of overtime pay in the decision did not make it incomplete, since this matter should
necessarily be made clear enough in the implementation of the decision (see Malate Taxicab & Garage, Inc. vs.
CIR, et al.,
L-8718, May 11, 1956).

2. But has that judgment reached the stage of finality in the sense that it can no longer, be disturbed?

CIR Rules of Procedure, as amended, and the jurisprudence of this Court both answer the question in the
affirmative.

Section 15 of the CIR Rules requires that one who seeks to reconsider the judgment of the trial judge must do
so within five (5) days from the date on which he received notice of the decision, subject of the motion. Next
follows Section 16 which says that the motion must be submitted with arguments supporting the same. But if
said arguments could not be submitted simultaneously with the motion, the same section commands the 'the
movant shall file the same within ten (10) days from the date of the filing of his motion for reconsideration.'
Section 17 of the same rules admonishes a movant that "(f)ailure to observe the above-specified periods shall
be sufficient cause for dismissal of the motion for reconsideration or striking out of the answer and/or the
supporting arguments, as the case may be".

Not that the foregoing rules stand alone. Jurisprudence has since stabilized the enforceability thereof. Thus,
in Bien vs. Castillo, (97 Phil. 956) we ruled that where a pro forma motion for reconsideration was filed out of
time its denial is in order pursuant to CIR rules, regardless of whether the arguments in support of said motion
were or were not filed on time. Pangasinan Employees Laborers & Tenants Association (PELTA) vs.
Martinez, (L-13846, May 20, 1960) pronounced that where a motion to reconsider is filed out of time, the
order or decision subject of reconsideration comes final. And so also, where the arguments in support of the
motion for reconsideration are filed beyond the ten-day reglementary period, the pre forma motion for
reconsideration although seasonably filed must nevertheless be denied. This in essence is our ruling in Local
7, Press & Printing Free Workers (FFW) vs. Tabigne. The teaching in Luzon Stevedoring Co., Inc. vs. Court of
Industrial Relations, is that where the motion for reconsideration is denied upon the ground that the arguments
in support thereof were filed out of time, the order or decision subject of the motion becomes "final and
unappealable".

We find no difficulty in applying the foregoing rules and pronouncements of this Court in the case before us.
On August 6, petitioner received a copy of the judgment of Judge Arsenio I. Martinez aforesaid. Petitioner's
motion to reconsider without arguments in support thereof of August 12 was filed on time. For, August
11, the end of the five-day reglementary period to file a motion for reconsideration, was a Sunday. But,
actually, the written arguments in support of the said motion were submitted to the court on August 27. The
period from August 12 to August 27, is a space of fifteen (15) days. Surely enough, said arguments were filed
out of time five (5) days late. And the judgment had become final.

3. There is, of course, petitioner's motion of August 21, 1963 seeking extension of time within which to present
its arguments in support of its motion. Counsel in his petition before this Court pleads that the foregoing
motion was grounded on the 'extremely busy and difficult schedule of counsel which would not enable him to
do so within the stated ten-day reglementary period. The arguments were only filed on August 27 five (5)
days late, as aforesaid.

The foregoing circumstances will not avail petitioner any. It is to be noted that the motion for expansion of
time was filed only on August 21, that is, one day before the due date which is August 22. It was petitioner's
duty to see to it that the court act on this motion forthwith or at least inquire as to the fate thereof not later than
the 22nd of August. It did not. It merely filed its arguments on the 27th.

To be underscored at this point is that "obviously to speed up the disposition of cases", CIR "has a standing
rule against the extension of the ten-day period for filing supporting arguments". That no-extension policy
should have placed petitioner on guard. It should not have simply folded its arms, sit by supinely and relied on
the court's generosity. To compound petitioner's neglect, it filed the arguments only on August 27, 1953,
knowing full well that by that time the reglementary period had expired.
Petitioner cannot complain against CIR's ruling of September 16, 1963 dismissing the motion for
reconsideration on the ground that the supporting arguments were filed out of time. That ruling in effect denied
the motion for extension.

We rule that CIR's judgment has become final and unappealable. We may not review the same.

Notwithstanding this unequivocal and unmistakable precedent, which has not been in any way modified, much less revoked or
reversed by this Court, the main opinion has chosen not only to go into the merits of petitioners' pose that the respondent court
erred in holding them guilty of bargaining in bad faith but also to ultimately uphold petitioners' claim for reinstatement on
constitutional grounds.

Precisely because the conclusions of the main opinion are predicated on an exposition of the constitutional guarantees of
freedoms of speech and peaceful assembly for redress of grievances, so scholarly and masterful that it is bound to overwhelm
Us unless We note carefully the real issues in this case, I am constrained, over and above my sincere admiration for the
eloquence and zeal of Mr. Justice Makasiar's brilliant dissertation, to dutifully state that as presented by petitioners themselves
and in the light of its attendant circumstances, this case does not call for the resolution of any constitutional issue. Admittedly,
the invocation of any constitutional guarantee, particularly when it directly affects individual freedoms enshrined in the bill of
rights, deserves the closest attention of this Court. It is my understanding of constitutional law and judicial practices related
thereto, however, that even the most valuable of our constitutional rights may be protected by the courts only when their
jurisdiction over the subject matter is unquestionably established and the applicable rules of procedure consistent with
substantive and procedural due process are observed. No doubt no constitutional right can be sacrificed in the altar of procedural
technicalities, very often fittingly downgraded as niceties but as far as I know, this principle is applied to annul or set aside final
judgments only in cases wherein there is a possible denial of due process. I have not come across any instance, and none is
mentioned or cited in the well-documented main opinion, wherein a final and executory judgment has been invalidated and set
aside upon the ground that the same has the effect of sanctioning the violation of a constitutional right, unless such violation
amounts to a denial of due process.

Without support from any provision of the constitution or any law or from any judicial precedent or reason of principle, the
main opinion nudely and unqualifiedly asserts, as if it were universally established and accepted as an absolute rule, that the
violation of a constitutional right divests the court of jurisdiction; and as a consequence its judgment is null and void and
confers no rights". Chavez vs. Court of Appeals, 24 SCRA 663, which is mentioned almost in passing, does uphold the
proposition that "relief from a criminal conviction secured at the sacrifice of constitutional liberties, may be obtained through
habeas corpus proceedings even after the finality of the judgment". And, of course, Chavez is correct; as is also Abriol vs.
Homeres2 which, in principle, served as its precedent, for the very simple reason that in both of those cases, the accused were
denied due process. In Chavez, the accused was compelled to testify against himself as a witness for the prosecution; in Abriol,
the accused was denied his request to be allowed to present evidence to establish his defense after his demurrer to the People's
evidence was denied.

As may be seen, however, the constitutional issues involved in those cases are a far cry from the one now before Us. Here,
petitioners do not claim they were denied due process. Nor do they pretend that in denying their motion for reconsideration, "the
respondent Court of Industrial Relations and private firm trenched upon any of their constitutional immunities ...," contrary to
the statement to such effect in the main opinion. Indeed, neither in the petition herein nor in any of the other pleading of
petitioners can any direct or indirect assertion be found assailing the impugned decision of the respondent court as being null
and void because it sanctioned a denial of a valued constitutional liberty.

In their petition, petitioners state the issue for Our resolution as follows:

Petitioners herein humbly submit that the issue to be resolved is whether or not the respondent Court en
banc under the facts and circumstances, should consider the Motion for Reconsideration filed by your
petitioners.

Petitioners, therefore, in filing this petition for a writ of certiorari, humbly beg this Honorable Court to treat
this petition under Rule 43 and 65 of the Rules of Court.

xxx xxx xxx

The basic issue therefore is the application by the Court en banc of the strict and narrow technical rules of
procedure without taking into account justice, equity and substantial merits of the case.
On the other hand, the complete argument submitted by petitioners on this point in their brief runs thus:

III

ISSUES

1. Does the refusal to heed a warning in the exercise of a fundamental right to peaceably assemble and petition
the government for redress of grievances constitute bargaining in bad faith? and,

Do the facts found by the court below justify the declaration and conclusion that the union was guilty of
bargaining in bad faith meriting the dismissal of the persons allegedly responsible therefore?

2. Was there grave abuse of discretion when the respondent court refused to act one way or another on the
petition for relief from the resolution of October 9, 1969?

IV

ARGUMENT

The respondent Court erred in finding the petition union guilty of bargaining in bad faith and consequently
dismissing the persons allegedly responsible therefor, because such conclusion is country to the evidence on
record; that the dismissal of leaders was discriminatory.

As a result of exercising the constitutional rights of freedom to assemble and petition the duly constituted
authorities for redress of their grievances, the petitioners were charged and then condemned of bargaining in
bad faith.

The findings that petitioners were guilty of bargaining in bad faith were not borne out by the records. It was
not even alleged nor proven by evidence. What has been alleged and which the respondent company tried to
prove was that the demonstration amounted to a strike and hence, a violation of the provisions of the "no-
lockout no strike" clause of the collective bargaining agreement. However, this allegation and proof
submitted by the respondent company were practically resolved when the respondent court in the same
decision stated categorically:

'The company alleges that the walkout because of the demonstration is tantamount to a
declaration of a strike. We do not think so, as the same is not rooted in any industrial dispute
although there is a concerted act and the occurrence of a temporary stoppage of work.'
(Emphasis supplied, p. 4, 5th paragraph, Decision.)

The respondent court's findings that the petitioner union bargained in bad faith is not tenable
because:

First, it has not been alleged nor proven by the respondent company; .

Second, before the demonstration, the petitioner union and the respondent company convened twice in a
meeting to thresh out the matter of demonstration. Petitioners requested that the employees and workers be
excused but the respondent company instead of granting the request or even settling the matter so that the
hours of work will not be disrupted, immediately threatened the employees of mass dismissal;

Third, the refusal of the petitioner union to grant the request of the company that the first shift shall be
excluded in the demonstration is not tantamount to bargaining in bad faith because the company knew that the
officers of the union belonged to the first shift, and that the union cannot go and lead the demonstration
without their officers. It must be stated that the company intends to prohibit its officers to lead and join the
demonstration because most of them belonged to the first shift; and

Fourth, the findings of the respondent court that the demonstration if allowed will practically give the union
the right to change the working conditions agreed in the CBA is a conclusion of facts, opinionated and not
borne by any evidence on record. The demonstration did not practically change the terms or conditions of
employment because it was only for one (1) day and the company knew about it before it went through. We
can even say that it was the company who bargained in bad faith, when upon representation of the Bureau of
Labor not to dismiss the employees demonstrating, the company tacitly approved the same and yet while the
demonstration was in progress, the company filed a ULP Charge and consequently dismissed those who
participated.

Records of the case show that more or less 400 members of the union participated in the demonstration and
yet, the respondent court selected the eight officers to be dismissed from the union thus losing their status as
employees of the respondent company. The respondent court should have taken into account that the
company's action in allowing the return of more or less three hundred ninety two (392) employees/members of
the union is an act of condonation and the dismissal of the eight (8) officers is an act of discrimination (Phil.
Air Lines Inc., vs. Phil. Air Lines Employees Association, G.R. No. L-8197, Oct. 31, 1958). Seemingly, from
the opinion stated in the decision by the court, while there is a collective bargaining agreement, the union
cannot go on demonstration or go on strike because it will change the terms and conditions of employment
agreed in the CBA. It follows that the CBA is over and above the constitutional rights of a man to demonstrate
and the statutory rights of a union to strike as provided for in Republic Act 875. This creates a bad precedent
because it will appear that the rights of the union is solely dependent upon the CBA.

One of the cardinal primary rights which must be respected in proceedings before the Court of Industrial
Relations is that "the decision must be rendered on the evidence presented at the hearing, or at least contained
in the record and disclosed to the parties affected." (Interstate Commerce Commission vs. L & N R. Co., 227
U.S. 88, 33 S. Ct. 185, 57 Law ed. 431.) Only by confining the administrative tribunal to the evidence
disclosed to the parties, can the latter be protected in their rights to know and meet the case against them. (Ang
Tibay vs. CIR, G.R. No. L-45496, February 27, 1940.)

The petitioners respectfully and humbly submit that there is no scintilla of evidence to support the findings of
the respondent court that the petitioner union bargained in bad faith. Corollary therefore, the dismissal of the
individual petitioners is without basis either in fact or in law.

Additionally, in their reply they also argued that:

1) That respondent court's finding that petitioners have been guilty of bargaining in bad faith and consequently
lost their status as employees of the respondent company did not meet the meaning and comprehension of
"substantial merits of the case." Bargaining in bad faith has not been alleged in the complaint (Annex "C",
Petition) nor proven during the hearing of the can. The important and substantial merit of the case is whether
under the facts and circumstances alleged in respondent company's pleadings, the demonstration done by the
petitioners amounted to on "illegal strike" and therefore in violation of the "no strike no lock out" clause of
the Collective Bargaining Agreement. Petitioners respectfully reiterate and humbly submit, that the respondent
court had altogether opined and decided that such demonstration does not amount to a strike. Hence, with that
findings, petitioners should have been absolved of the charges against them. Nevertheless, the same respondent
court disregarding, its own findings, went out of bounds by declaring the petitioners as having "bargained in
faith." The stand of the respondent court is fallacious, as it follows the principle in logic as "non-siquitor";

2) That again respondents wanted to impress that the freedom to assemble peaceably to air grievances against
the duly constituted authorities as guaranteed in our Constitution is subject to the limitation of the agreement in
the Collective Bargaining Agreement. The fundamental rights of the petitioners to free speech and assembly is
paramount to the provision in the Collective Bargaining Agreement and such attempt to override the
constitutional provision would be null and void. These fundamental rights of the petitioners were not taken
into consideration in the deliberation of the case by the respondent court;

Thus, it is clear from the foregoing contentions that petitioners are not raising any issue of due process. They do not posit that
the decision of the industrial court is null and void on that constitutional ground. True it is that they fault the respondent court
for having priced the provisions of the collective bargaining agreement herein involved over and above their constitutional right
to peaceably assemble and petition for redress of their grievances against the abuses of the Pasig police, but in no sense at all do
they allege or contend that such action affects its jurisdiction in a manner that renders the proceedings a nullity. In other words,
petitioners themselves consider the alleged flaw in the court's action as a mere error of judgment rather than that of jurisdiction
which the main opinion projects. For this Court to roundly and indignantly condemn private respondent now for the grievous
violation of the fundamental law the main opinion sees in its refusal to allow all its workers to join the demonstration in
question, when that specific issue has not been duly presented to Us and properly argued, is to my mind unfair and unjust, for
the simple reason that the manner this case was brought to Us does not afford it the opportunity to be heard in regard to such
supposed constitutional transgression.

To be sure, petitioners do maintain, that respondent court committed an error of jurisdiction by finding petitioners guilty of
bargaining in bad faith when the charge against them alleged in the complaint was for having conducted a mass demonstration,
which "amounted to a strike", in violation of the Collective Bargaining Agreement, but definitely, this jurisdictional question
has no constitutional color. Indeed, We can even assume for the sake of argument, that the trial judge did err in not giving
preferential importance to the fundamental freedoms invoked by the petitioners over the management and proprietary attributes
claimed by the respondent private firm still, We cannot rightly hold that such disregard of petitioners' priceless liberties
divested His Honor of jurisdiction in the premises. The unbending doctrine of this Court is that "decisions, erroneous or not,
become final after the period fixed by law; litigations would be endless, no questions would be finally settled; and titles to
property would become precarious if the losing party were allowed to reopen them at any time in the future".3

I only have to add to this that the fact that the error is in the interpretation, construction or application of a constitutional precept
not constituting a denial of due process, should not make any difference. Juridically, a party cannot be less injured by an
overlooked or erroneously sanctioned violation of an ordinary statute than by a misconstrued or constitutional injunction
affecting his individual, freedoms. In both instances, there is injustice which should be intolerable were it not for the more
paramount considerations that inform the principle of immutability of final judgments. I dare say this must be the reason why,
as I have already noted, the main opinion does not cite any constitutional provision, law or rule or any judicial doctrine or
principle supporting its basic holding that infringement of constitutional guarantees, other than denial of due process, divests
courts of jurisdiction to render valid judgments.

In this connection, it must be recalled that the teaching of Philippine Association of Colleges and Universities vs. Secretary of
Education,4 following Santiago vs. Far Eastern Broadcasting,5 is that "it is one of our (the Supreme Court's) decisional
practices that unless a constitutional point is specifically raised, insisted upon and adequately argued, the court will not consider
it". In the case at bar, the petitioners have not raised, they are not insisting upon, much less have they adequately argued the
constitutional issues so extendedly and ably discussed in the main opinion.

Indeed, it does not seem wise and sound for the Supreme Court to hold that the erroneous resolution by a court of a
constitutional issue not amounting to a denial of due process renders its judgment or decision null and void, and, therefore,
subject to attack even after said judgment or decision has become final and executory. I have actually tried to bring myself into
agreement with the views of the distinguished and learned writer of the main opinion, if only to avoid dissenting from his well
prepared thesis, but its obvious incongruity with settled jurisprudence always comes to the fore to stifle my effort.

As a matter of fact, for a moment, it appeared to me as if I could go along with petitioners under the authority of our
constitutionally irreducible appellate jurisdiction under Section 2(5) of Article VII of the Philippines6 (reenacted
practically ipssisimis verbis in Section 5(2) of the 1973 Constitution), only to realize upon further reflection that the very power
granted to us to review decisions of lower courts involving questions of law(and these include constitutional issues not affecting
the validity of statutes, treaty, executive agreement, etc.) is not unqualified but has to be exercised only in the manner provided
in the law of the Rules of Court. In other words, before We can exercise appellate jurisdiction over constitutional issues, no
matter how important they may be, there must first be a showing of compliance with the applicable procedural law or rules,
among them, those governing appeals from the Court of Industrial Relations involved herein. Consequently, if by law or rule, a
judgment of the industrial court is already final and executory, this Court would be devoid of power and authority to review,
much less alter or modify the same, absent any denial of due process or fatal defect of jurisdiction. It must be borne in mind that
the situation confronting Us now is not merely whether or not We should pass upon a question or issue not specifically raised
by the party concerned, which, to be sure, could be enough reason to dissuade Us from taking pains in resolving the same;
rather, the real problem here is whether or not We have jurisdiction to entertain it. And, in this regard, as already stated earlier,
no less than Justice Conrado Sanchez, the writer of Chavez, supra., which is being relied upon by the main opinion, already laid
down the precedent in Elizalde vs. Court, supra, which for its four-square applicability to the facts of this case, We have no
choice but to follow, that is, that in view of reconsideration but even their argument supporting the same within the prescribed
period, "the judgment (against them)has become final, beyond recall".

Indeed, when I consider that courts would be useless if the finality and enforceability of their judgments are made contingent on
the correctness thereof from the constitutional standpoint, and that in truth, whether or not they are correct is something that is
always dependent upon combined opinion of the members of the Supreme Court, which in turn is naturally as changeable as the
members themselves are changed, I cannot conceive of anything more pernicious and destructive to a trustful administration of
justice than the idea that, even without any showing of denial of due process or want of jurisdiction of the court, a final and
executory judgment of such court may still be set aside or reopened in instances other than those expressly allowed by Rule 38
and that of extrinsic fraud under Article 1146(1) of the Civil Code.7 And just to emphasize the policy of the law of respecting
judgments once they have become final, even as this Court has ruled that final decisions are mute in the presence of fraud which
the law abhors,8 it is only when the fraud is extrinsic and not intrinsic that final and executory judgments may be set aside,9and
this only when the remedy is sought within the prescriptive period. 10

Apropos here is the following passage in Li Kim Those vs. Go Sin Kaw, 82 Phil. 776:

Litigation must end and terminate sometime and somewhere, and it is essential to an effective and efficient
administration of justice that once a judgment has become final, the winning party be not, through a mere
subterfuge, deprived of the fruits of the verdict. Courts must therefore guard against any scheme calculated to
bring about that result. Constituted as they are to put an end to controversies, courts should frown upon any
attempt to prolong them.

Likewise the stern admonition of Justice George Malcolm in Dy Cay v. Crossfield, 38 Phil. 521, thus:

... Public policy and sound practice demand that, at the risk of occasional errors, judgments of courts should
become final at some definite date fixed by law. The very object for which courts were instituted was to put an
end to controversies. To fulfill this purpose and to do so speedily, certain time limits, more or less arbitrary,
have to be set up to spur on the slothful. 'If a vacillating, irresolute judge were allowed to thus keep causes ever
within his power, to determine and redetermine them term after term, to bandy his judgments about from one
party to the other, and to change his conclusions as freely and as capriciously as a chamelon may change its
hues, then litigation might become more intolerable than the wrongs it is intended to redress.' (See Arnedo vs.
Llorente and Liongson (1911), 18 Phil., 257.).

My disagreement with the dissenters in Republic vs. Judge de los Angeles,


L-26112, October 4, 1971, 41 SCRA 422, was not as to the unalterability and invulnerability of final judgments but rather on
the correct interpretation of the contents of the judgment in question therein. Relevantly to this case at bar, I said then:

The point of res adjudicata discussed in the dissents has not escaped my attention. Neither am I overlooking
the point of the Chief Justice regarding the dangerous and inimical implications of a ruling that would
authorize the revision, amendment or alteration of a final and executory judgment. I want to emphasize that my
position in this opinion does not detract a whit from the soundness, authority and binding force of existing
doctrines enjoining any such modifications. The public policy of maintaining faith and respect in judicial
decisions, which inform said doctrines, is admittedly of the highest order. I am not advocating any departure
from them. Nor am I trying to put forth for execution a decision that I believe should have been rather than
what it is. All I am doing is to view not the judgment of Judge Tengco but the decision of this Court in G.R.
No. L-20950, as it is and not as I believe it should have been, and, by opinion, I would like to guide the court a
quo as to what, in my own view, is the true and correct meaning and implications of decision of this Court, not
that of Judge Tengco's.

The main opinion calls attention to many instant precisely involving cases in the industrial court, wherein the Court refused to
be constrained by technical rules of procedure in its determination to accord substantial justice to the parties I still believe in
those decisions, some of which were penned by me. I am certain, however, that in none of those precedents did this Court
disturb a judgment already final and executory. It too obvious to require extended elucidation or even reference any precedent
or authority that the principle of immutability of final judgments is not a mere technicality, and if it may considered to be in a
sense a procedural rule, it is one that is founded on public policy and cannot, therefore, yield to the ordinary plea that it must
give priority to substantial justice.

Apparently vent on looking for a constitutional point of due process to hold on, the main opinion goes far as to maintain that the
long existing and constantly applied rule governing the filing of motions for reconsideration in the Court of Industrial Relations,
"as applied in this case does not implement on reinforce or strengthen the constitutional rights affected, but instead constricts
the same to the point of nullifying the enjoyment thereof by the petitioning employees. Said Court on Industrial Relations Rule,
promulgated as it was pursuant to mere legislative delegation, is unreasonable and therefore is beyond the authority granted by
the Constitution and the law. A period of five (5) days within which to file a motion for reconsideration is too short, especially
for the aggrieve workers, who usually do not have the ready funds to meet the necessary expenses therefor. In case of the Court
of Appeal and the Supreme Court, a period of fifteen (15) days has been fixed for the filing of the motion for re-hearing or
reconsideration (Sec. 10, Rule 51; Sec. 1, Rule 52; Sec. 1, Rule 56, Revised Rules of Court). The delay in the filing of the
motion for reconsideration could have been only one day if September 28, 1969 was not a Sunday. This fact accentuates the
unreasonableness of the Court of Industrial Relations Rule insofar as circumstances of the instant case are concerned."

I am afraid the zeal and passion of these arguments do not justify the conclusion suggested. Viewed objectively, it can readily
be seen that there can hardly be any factual or logical basis for such a critical view of the rule in question. Said rule provides:

MOTIONS FOR RECONSIDERATION

Sec. 15. The movant shall file the motion, in six copies, within five (5) days from the date on which he
receives notice of the order or decision, object of the motion for reconsideration, the same to be verified under
oath with respect to the correctness of the allegations of fact, and serving a copy thereof, personally or by
registered mail, on the adverse party. The latter may file an answer, in six (6) copies, duly verified under oath.

Sec. 16. Both the motion and the answer shall be submitted with arguments supporting the same. If the
arguments can not be submitted simultaneously with said motions, upon notice Court, the movant shall file
same within ten (10) days from the date of the filing of his motion for reconsideration. The adverse party shall
also file his answer within ten (10) days from the receipt by him of a copy of the arguments submitted by the
movant.

Sec. 17. After an answer to the motion is registered, or after ten (10) days from the receipt of the arguments in
support of said motion having been filed, the motion shall be deemed submitted for resolution of the Court in
banc, unless it is considered necessary to bear oral arguments, in which case the Court shall issue the
corresponding order or notice to that effect.

Failure to observe the above-specified periods shall be sufficient cause for dismissal of the motion for
reconsideration or striking out of the answer and/or the supporting arguments, as the case may be. (As
amended April 20, 1951, Court of Industrial Relations.).

As implemented and enforced in actual practice, this rule, as everyone acquainted with proceedings in the industrial court well
knows, precisely permits the party aggrieved by a judgment to file no more than a pro-forma motion for reconsideration without
any argument or lengthy discussion and with barely a brief statement of the fundamental ground or grounds therefor, without
prejudice to supplementing the same by making the necessary exposition, with citations laws and authorities, in the written
arguments the be filed (10) days later. In truth, such a pro-forma motion has to effect of just advising the court and the other
party that the movant does not agree with the judgment due to fundamental defects stated in brief and general terms. Evidently,
the purpose of this requirement is to apprise everyone concerned within the shortest possible time that a reconsideration is to
sought, and thereby enable the parties concerned to make whatever adjustments may be warranted by the situation, in the
meanwhile that the litigation is prolonged. It must borne in mind that cases in the industrial court may involve affect the
operation of vital industries in which labor-management problems might require day-to-day solutions and it is to the best
interests of justice and concerned that the attitude of each party at every imports juncture of the case be known to the other so
that both avenues for earlier settlement may, if possible, be explored.

There can be no reason at all to complain that the time fixed by the rule is short or inadequate. In fact, the motion filed
petitioners was no more than the following:

MOTION FOR RECONSIDERATION

COME NOW movant respondents, through counsel, to this Honorable Court most respectfully moves for the
RECONSIDERATION of the Order of this Honorable Court dated September 17, 1969 on the ground that the
same is not in accordance with law, evidence and facts adduced during the hearing of the above entitled case.

Movant-respondents most respectfully move for leave to file their respective arguments within ten (10) days
pursuant to Section 15, 16 & 17 as amended of the Rules of Court.

WHEREFORE, it is respectfully prayed that this Motion for Reconsideration be admitted.

Manila, September 27, 1969.


To say that five (5) days is an unreasonable period for the filing of such a motion is to me simply
incomprehensible. What worse in this case is that petitioners have not even taken the trouble of giving an
explanation of their inability to comply with the rule. Not only that, petitioners were also late five (5) days in
filing their written arguments in support of their motion, and, the only excuse offered for such delay is that
both the President of the Union and the office clerk who took charge of the matter forgot to do what they were
instructed to do by counsel, which, according to this Court, as I shall explain anon "is the most hackneyed and
habitual subterfuge employed by litigants who fail to observe the procedural requirements prescribed by the
Rules of Court". (Philippine Airlines, Inc. vs. Arca, infra). And yet, very indignantly, the main opinion would
want the Court to overlook such nonchalance and indifference.

In this connection, I might add that in my considered opinion, the rules fixing periods for the finality of judgments are in a sense
more substantive than procedural in their real nature, for in their operation they have the effect of either creating or terminating
rights pursuant to the terms of the particular judgment concerned. And the fact that the court that rendered such final judgment
is deprived of jurisdiction or authority to alter or modify the same enhances such substantive character. Moreover, because they
have the effect of terminating rights and the enforcement thereof, it may be said that said rules partake of the nature also of rules
of prescription, which again are substantive. Now, the twin predicates of prescription are inaction or abandonment and the
passage of time or a prescribed period. On the other hand, procrastination or failure to act on time is unquestionably a form of
abandonment, particularly when it is not or cannot be sufficiently explained. The most valuable right of a party may be lost by
prescription, and be has no reason to complain because public policy demands that rights must be asserted in time, as otherwise
they can be deemed waived.

I see no justification whatsoever for not applying these self-evident principles to the case of petitioners. Hence, I feel disinclined
to adopt the suggestion that the Court suspend, for the purposes of this case the rules aforequoted of the Court of Industrial
Relations. Besides, I have grave doubts as to whether we can suspend rules of other courts, particularly that is not under our
supervisory jurisdiction, being administrative agency under the Executive Department Withal, if, in order to hasten the
administration of substance justice, this Court did exercise in some instances its re power to amend its rules, I am positively
certain, it has done it for the purpose of reviving a case in which the judo has already become final and executory.

Before closing, it may be mentioned here, that as averred their petition, in a belated effort to salvage their Petitioners filed in the
industrial court on October 31, 1969 a Petition for relief alleging that their failure to file "Arguments in Support of their Motion
for Reconsideration within the reglementary period or five (5), if not seven (7), days late "was due to excusable negligence and
honest mistake committed by the President of the respondent Union and on office clerk of the counsel for respondents as shown
attested in their respective affidavits", (See Annexes K, and K-2) which in brief, consisted allegedly of the President's having
forgotten his appointment with his lawyer "despite previous instructions and of the said office employee having also
coincidentally forgotten "to do the work instructed (sic) to (him) by Atty. Osorio" because he "was busy with clerical jobs". No
sympathy at all can be evoked these allegations, for, under probably more justification circumstances, this Court ruled out a
similar explanation previous case this wise:

We find merit in PAL's petition. The excuse offered respondent Santos as reason for his failure to perfect in
due time appeal from the judgment of the Municipal Court, that counsel's clerk forgot to hand him the court
notice, is the most hackneyed and habitual subterfuge employed by litigants who fail to observe procedural
requirements prescribed by the Rules of Court. The uncritical acceptance of this kind of common place
excuses, in the face of the Supreme Court's repeated rulings that they are neither credible nor constitutive of
excusable negligence (Gaerlan vs. Bernal, L-4039, 29 January 1952; Mercado vs. Judge Domingo, L-19457,
December 1966) is certainly such whimsical exercise of judgment to be a grave abuse of discretion. (Philippine
Air Lines, Inc. Arca, 19 SCRA 300.)

For the reason, therefore, that the judgment of the industrial court sought to be reviewed in the present case has already become
final and executory, nay, not without the fault of the petitioners, hence, no matter how erroneous from the constitutional
viewpoint it may be, it is already beyond recall, I vote to dismiss this case, without pronouncement as to costs.

TEEHANKEE, J., concurring:

For having carried out a mass demonstration at Malacaang on March 4, 1969 in protest against alleged abuses of the Pasig
police department, upon two days' prior notice to respondent employer company, as against the latter's insistence that the first
shift 1should not participate but instead report for work, under pain of dismissal, the industrial court ordered the dismissal from
employment of the eight individual petitioners as union officers and organizers of the mass demonstration.
Respondent court's order finding petitioner union guilty on respondent's complaint of bargaining in bad faith and unfair labor
practice for having so carried out the mass demonstration, notwithstanding that it concededly was not a declaration of strike nor
directed in any manner against respondent employer, and ordering the dismissal of the union office manifestly constituted grave
abuse of discretion in fact and in law.

There could not be, in fact, bargaining in bad faith nor unfair labor practice since respondent firm conceded that "the
demonstration is an inalienable right of the union guaranteed' by the Constitution" and the union up to the day of the
demonstration pleaded by cablegram to the company to excuse the first shift and allow it to join the demonstration in
accordance with their previous requests.

Neither could there be, in law, a willful violation of the collective bargaining agreement's "no-strike" clause as would warrant
the union leaders' dismissal, since as found by respondent court itself the mass demonstration was not a declaration of a strike,
there being no industrial dispute between the protagonists, but merely the occurrence of a temporary stoppage of work" to
enable the workers to exercise their constitutional rights of free expression, peaceable assembly and petition for redress of
grievance against alleged police excesses.

Respondent court's en banc resolution dismissing petitioners' motion for reconsideration for having been filed two days late,
after expiration of the reglementary five-day period fixed by its rules, due to the negligence of petitioners' counsel and/or the
union president should likewise be set aside as a manifest act of grave abuse of discretion. Petitioners' petition for relief from
the normal adverse consequences of the late filing of their motion for reconsideration due to such negligence which was not
acted upon by respondent court should have been granted, considering the monstrous injustice that would otherwise be
caused the petitioners through their summary dismissal from employment, simply because they sought in good faith to exercise
basic human rights guaranteed them by the Constitution. It should be noted further that no proof of actual loss from the one-day
stoppage of work was shown by respondent company, providing basis to the main opinion's premise that its insistence on
dismissal of the union leaders for having included the first shift workers in the mass demonstration against its wishes was but an
act of arbitrary vindictiveness.

Only thus could the basic constitutional rights of the individual petitioners and the constitutional injunction to afford protection
to labor be given true substance and meaning. No person may be deprived of such basic rights without due process which is
but "responsiveness to the supremacy of reason, obedience to the dictates of justice. Negatively put, arbitrariness is ruled out
and unfairness avoided ... Due process is thus hostile to any official action marred by lack of reasonableness. Correctly it has
been identified as freedom from arbitrariness."2

Accordingly, I vote for the setting aside of the appealed orders of the respondent court and concur in the judgment for
petitioners as set forth in the main opinion.
Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 85985 August 13, 1993

PHILIPPINE AIRLINES, INC. (PAL), petitioner,


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

Solon Garcia for petitioner.

Adolpho M. Guerzon for respondent PALEA.

MELO, J.:

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

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

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

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

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

Sec. 2. Non-exclusivity. This Code does not contain the entirety of the rules and regulations of the company.
Every employee is bound to comply with all applicable rules, regulations, policies, procedures and standards,
including standards of quality, productivity and behaviour, as issued and promulgated by the company through
its duly authorized officials. Any violations thereof shall be punishable with a penalty to be determined by the
gravity and/or frequency of the offense.
Sec. 7. Cumulative Record. An employee's record of offenses shall be cumulative. The penalty for an
offense shall be determined on the basis of his past record of offenses of any nature or the absence thereof. The
more habitual an offender has been, the greater shall be the penalty for the latest offense. Thus, an employee
may be dismissed if the number of his past offenses warrants such penalty in the judgment of management
even if each offense considered separately may not warrant dismissal. Habitual offenders or recidivists have no
place in PAL. On the other hand, due regard shall be given to the length of time between commission of
individual offenses to determine whether the employee's conduct may indicate occasional lapses (which may
nevertheless require sterner disciplinary action) or a pattern of incorrigibility.

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

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

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

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

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

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

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

SO ORDERED. (p. 40, Rollo.)

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

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

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

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

Respondent Commission thereupon disposed:

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

SO ORDERED. (p. 5, NLRC Decision.)

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

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

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

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

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

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

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

A close scrutiny of the objectionable provisions of the Code reveals that they are not purely business-oriented nor do they
concern the management aspect of the business of the company as in the San Miguel case. The provisions of the Code clearly
have repercusions on the employee's right to security of tenure. The implementation of the provisions may result in the
deprivation of an employee's means of livelihood which, as correctly pointed out by the NLRC, is a property right (Callanta, vs
Carnation Philippines, Inc., 145 SCRA 268 [1986]). In view of these aspects of the case which border on infringement of
constitutional rights, we must uphold the constitutional requirements for the protection of labor and the promotion of social
justice, for these factors, according to Justice Isagani Cruz, tilt "the scales of justice when there is doubt, in favor of the worker"
(Employees Association of the Philippine American Life Insurance Company vs. NLRC, 199 SCRA 628 [1991] 635).
Verily, a line must be drawn between management prerogatives regarding business operations per se and those which affect the
rights of the employees. In treating the latter, management should see to it that its employees are at least properly informed of
its decisions or modes action. PAL asserts that all its employees have been furnished copies of the Code. Public respondents
found to the contrary, which finding, to say the least is entitled to great respect.

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

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

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

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

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

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

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

SO ORDERED.

Feliciano, Bidin, Romero and Vitug, JJ., concur.


FIRST DIVISION

[G.R. No. 119930. March 12, 1998]

INSULAR LIFE ASSURANCE CO., LTD., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION (Fourth
Division, Cebu City), LABOR ARBITER NICASIO P. ANINON and PANTALEON DE LOS
REYES, respondents.

DECISION
BELLOSILLO, J.:

On 17 June 1994 respondent Labor Arbiter dismissed for lack of jurisdiction NLRC RAB-VII Case No. 03-0309-94 filed by
private respondent Pantaleon de los Reyes against petitioner Insular Life Assurance Co., Ltd. (INSULAR LIFE), for illegal
dismissal and nonpayment of salaries and back wages after findings no employer-employee relationship between De los Reyes
and petitioner INSULAR LIFE.[1] On appeal by private respondent, the order of dismissal was reversed by the National Labor
Relations Commission (NLRC) which ruled that respondent De los Reyes was an employee of petitioner.[2] Petitioners motion
for reconsideration having been denied, the NLRC remanded the case to the Labor Arbiter for hearing on the merits.
Seeking relief through this special civil action for certiorari with prayer for a restraining order and/or preliminary injunction,
petitioner now comes to us praying for annulment of the decision of respondent NLRC dated 3 March 1995 and its Order dated 6
April 1995 denying the motion for reconsideration of the decision. It faults NLRC for acting without jurisdiction and/or with
grave abuse of discretion when, contrary to established facts and pertinent law and jurisprudence, it reversed the decision of the
Labor Arbiter and held instead that the complaint was properly filed as an employer-employee relationship existed between
petitioner and private respondent.
Petitioner reprises the stand it assumed below that it never had any employer-employee relationship with private respondent,
this being an express agreement between them in the agency contracts, particularly reinforced by the stipulation therein de los
Reyes was allowed discretion to devise ways and means to fulfill his obligations as agent and would be paid commission fees
based on his actual output. It further insists that the nature of this work status as described in the contracts had already been
squarely resolved by the Court in the earlier case of Insular Life Assurance Co., Ltd. v. NLRC and Basiao [3]where the complainant
therein, Melecio Basiao, was similarly situated as respondent De los Reyes in that he was appointed first as an agent and then
promoted as agency manager, and the contracts under which he was appointed contained terms and conditions Identical to those
of De los Reyes. Petitioner concludes that since Basiao was declared by the Court to be an independent contractor and not an
employee of petitioner, there should be no reason why the status of De los Reyes herein vis--vis petitioner should not be similarly
determined.
We reject the submissions of petitioner and hold that respondent NLRC acted appropriately within the bounds of the law.
The records of the case are replete with telltale indicators of an existing employer-employee relationship between the two parties
despite written contractual disavowals.
These facts are undisputed: on 21 August 1992 petitioner entered into an agency contract with respondent Pantaleon de los
Reyes[4] authorizing the latter to solicit within the Philippines applications for life insurance and annuities for which he would be
paid compensation in the form of commissions. The contract was prepared by petitioner in its entirety and De los Reyes merely
signed his conformity thereto. It contained the stipulation that no employer-employee relationship shall be created between the
parties and that the agent shall be free to exercise his own judgment as to time, place and means of soliciting insurance. De los
Reyes however was prohibited by petitioner from working for any other life insurance company, and violation of this stipulation
was sufficient ground for termination of the contract. Aside from soliciting insurance for the petitioner, private respondent was
required to submit to the former all completed applications for insurance within ninety (90) consecutive days, deliver policies,
receive and collect initial premiums and balances of first year premiums, renewal premiums, deposits on applications and
payments on policy loans. Private respondent was also bound to turn over to the company immediately any and all sums of money
collected by him. In a written communication by petitioner to respondent De los Reyes, the latter was urged to register with the
Social Security System as a self-employed individual as provided under PD No. 1636.[5]
On 1 March 1993 petitioner and private respondent entered into another contract[6]where the latter was appointed as Acting
Unit Manager under its office the Cebu DSO V (157). As such, the duties and responsibilities of De los Reyes included the
recruitment, training, organization and development within his designated territory of a sufficient number of qualified, competent
and trustworthy underwriters, and to supervise and coordinate the sales efforts of the underwriters in the active solicitation of new
business and in the furtherance of the agencys assigned goals. It was similarly provIded in the management contract that the
relation of the acting unit manager and/or the agents of his unit to the company shall be that of independent contractor. If the
appointment was terminated for any reason other than for cause, the acting unit manager would be reverted to agent status and
assigned to any unit. As in the previous agency contract, De los Reyes together with his unit force was granted freedom to exercise
judgment as to time, place and means of soliciting insurance. Aside from being granted override commissions, the acting unit
manager was given production bonus, development allowance and a unit development financing scheme euphemistically termed
financial assistance consisting of payment to him of a free portion of P300.00 per month and a valIdate portion of P1,200.00.
While the latter amount was deemed as an advance against expected commissions, the former was not and would be freely given
to the unit manager by the company only upon fulfillment by him of certain manpower and premium quota requirements. The
agents and underwriters recruited and trained by the acting unit manager would be attached to the unit but petitioner reserved the
right to determine if such assignment would be made or, for any reason, to reassign them elsewhere.
Aside from soliciting insurance, De los Reyes was also expressly obliged to participate in the companys conservation
program, i.e., preservation and maintenance of existing insurance policies, and to accept moneys duly receipted on agents receipts
provided the same were turned over to the company. As long as he was unit manager in an acting capacity, De los Reyes was
prohibited from working for other life insurance companies or with the government. He could not also accept a managerial or
supervisory position in any firm doing business in the Philippines without the written consent of petitioner.
Private respondent worked concurrently as agent and Acting Unit Manager until he was notified by petitioner on 18
November 1993 that his services were terminated effective 18 December 1993. On 7 March 1994 he filed a complaint before the
Labor Arbiter on the ground that he was illegally dismissed and that he was not paid his salaries and separation pay.
Petitioner filed a motion to dismiss the complaint of De los Reyes for lack of jurisdiction, citing the absence of employer-
employee relationship. it reasoned out that based on the criteria for determining the existence of such relationship or the so-called
four-fold test, i.e., (a) selection and engagement of employee, (b) payment of wages, (c) power of dismissal, and, (d) power of
control, De los Reyes was not an employee but an independent contractor.
On 17 June 1994 the motion of petitioner was granted by the Labor Arbiter and the case was dismissed on the ground that the
element of control was not sufficiently established since the rules and guidelines set by petitioner in its agency agreement with
respondent De los Reyes were formulated only to achieve the desired result without dictating the means or methods of attaining
it.
Respondent NLRC however appreciated the evidence from a different perspective. It determined that respondent De los
Reyes was under the effective control of petitioner in the critical and most important aspects of his work as Unit Manager. This
conclusion was derived from the provisions in the contract which appointed private respondent as Acting Unit Manager, to wit:
(a) De los Reyes was to serve exclusively the company, therefore, he was not an independent contractor; (b) he was required to
meet certain manpower and production quota; and, (c) petitioner controlled the assignment to and removal of soliciting agents
from his unit.
The NLRC also took into account other circumstances showing that petitioner exercised employers prerogatives over De los
Reyes, e.g., (a) limiting the work of respondent De los Reyes to selling a life insurance policy known as Salary Deduction
Insurance only to members of the Philippine National Police, public and private school teachers and other employees of private
companies; (b) assigning private respondent to a particular place and table where he worked whenever he has not in the field; (c)
paying private respondent during the period of twelve (12) months of his appointment as Acting Unit Manager the amount
of P1,500.00 as Unit Development Financing of which 20% formed his salary and the rest, i.e., 80%, as advance of his expected
commissions; and (d) promising that upon completion of certain requirements, he would be promoted to Unit Manager with the
right of petitioner to revert him to agent status when warranted.
Parenthetically, both petitioner and respondent NLRC treated the agency contract and the management contract entered into
between petitioner and De los Reyes as contracts of agency. We however hold otherwise. Unquestionably there exist major
distinctions between the two agreements. While the first has the earmarks of an agency contract, the second is far removed from
the concept of agency in that provided therein are conditionalities that indicate an employer-employee relationship. the NLRC
therefore was correct in finding that private respondent was an employee of petitioner, but this holds true only insofar as the
management contract is concerned. In view thereof, he Labor Arbiter has jurisdiction over the case.
It is axiomatic that the existence of an employer-employee relationship cannot be negated by expressly repudiating it in the
management contract and providing therein that the employee is an independent contractor when the terms of agreement clearly
show otherwise. For, the employment status of a person is defined and prescribed by law and not by what the parties say it should
be.[7] In determining the status of the management contract, the four-fold test on employment earlier mentioned has to be applied.
Petitioner contends that De los Reyes was never required to go through the pre-employment procedures and that the
probationary employment status was reserved only to employees of petitioner. On this score, it insists that the first requirement
of selection and engagement of the employee was not met.
A look at the provisions of the contract shows that private respondent was appointed as Acting Unit Manager only upon
recommendation of the District Manager.[8] This indicates that private respondent was hired by petitioner because of the favorable
endorsement of its duly authorized officer. But, this approbation could only have been based on the performance of De los Reyes
with petitioner was nothing more than a trial or probationary period for his eventual appointment as Acting Unit Manager of
petitioner. Then, again, the very designation of the appointment of private respondent as acting unit manager obviously implies a
temporary employment status which may be made permanent only upon compliance with company standards such as those
enumerated under Sec. 6 of the management contract.[9]
On the matter of payment of wages, petitioner points out that respondent was compensated strictly on commission basis, the
amount of which was totally dependent on his total output. But, the managers contract speaks differently. Thus
4. Performance Requirements.- To maintain your appointment as Acting Unit Manager you must meet the following
manpower and production requirements:

Quarter Active Calendar Year


Production Agents Cumulative FYP
Production

1ST 2 P125,000
2ND 3 250,000
3RD 4 375,000
4TH 5 500,000

5.4 Unit Development Financing (UDF). As an Acting Unit Manager you shall be given during the first 12 months
of your appointment a financial assistance which is composed of two parts:

5.4.1 Free Portion amounting to P300 per month, subject to your meeting prescribed minimum
performance requirement on manpower and premium production. The free portion is not payable by you.

5.4.2 Validate Portion amounting to P1,200 per month, also subject to meeting the same prescribed
minimum performance requirements on manpower and premium production. The valIdated portion is an advance
against expected compensation during the UDF period and thereafter as may be necessary.

The above provisions unquestionably demonstrate that the performance requirement imposed on De los Reyes was
applicable quarterly while his entitlement to the free portion (P300) and the validated portion (P1,200) was monthly starting on
the first month of the twelve (12) months of the appointment. Thus, it has to be admitted that even before the end of the first
quarter and prior to the so-called quarterly performance evaluation, private respondent was already entitled to be paid both the
free and validated portions of the UDF every month because his production performance could not be determined until after the
lapse of the quarter involved. This indicates quite clearly that the unit managers quarterly performance had no bearing at all on
his entitlement at least to the free portion of the UDF which for all intents and purposes comprised the salary regularly paid to
him by petitioner. Thus it cannot be validly claimed that the financial assistance consisting of the free portion of the UDF was
purely dependent on the premium production of the agent. Be that as it may, it is worth considering that the payment of
compensation by way of commission does not militate against the conclusion that private respondent was an employee of
petitioner. Under Art. 97 of the Labor Code, wage shall mean however designated, capable of being expressed in terms of money,
whether fixed or ascertained on a time, task, price or commission basis x x x x [10]
As to the matter involving the power of dismissal and control by the employer, the latter of which is the most important of
the test, petitioner asserts that its termination of De los Reyes was but an exercise of its inherent right as principal under the
contracts and that the rules and guIdelines it set forth in the contract cannot, by any stretch of imagination, be deemed as an
exercise of control over the private respondent as these were merely directives that fixed the desired result without dictating the
means or method to be employed in attaining it. The following factual findings of the NLRC[11] however contradict such claims:

A perusal of the appointment of complainant as Acting Unit Manager reveals that:


1. Complainant was to exclusively serve respondent company. Thus it is provIded: x x x 7..7 Other causes of
Termination: This Appointment may likewise be terminated for any of the following causes: x x x 7..7..2. Your entering
the service of the government or another life insurance company; 7..7..3. Your accepting a managerial or supervisory
position in any firm doing business in the Philippines without the written consent of the Company; x x x

2. Complainant was required to meet certain manpower and production quotas.

3. Respondent (herein petitioner) controlled the assignment and removal of soliciting agents to and from
complainants unit, thus: x x x 7..2. Assignment of Agents: Agents recruited and trained by you shall be attached to your
unit unless for reasons of Company policy, no such assignment should be made. The Company retains the exclusive right
to assign new soliciting agents appointed and assigned to the saId unit x x x x

It would not be amiss to state the respondents duty to collect the companys premiums using company receipts under Sec. 7.4
of the management contract is further evIdence of petitioners control over respondent, thus:
xxxx

7.4 Acceptance and Remittance of Premiums. x x x x the Company hereby authorizes you to accept and receive sums of money
in payment of premiums, loans, deposits on applications, with or without interest, due from policy holders and applicants for
insurance, and the like, specially from policyholders of business solicited and sold by the agents attached to your unit provIded
however, that all such payments shall be duly receipted by you on the corresponding Companys Agents Receipt to be provIded
you for this purpose and to be covered by such rules and accounting regulations the Company may issue from time to time on
the matter. Payments received by you shall be turned over to the Companys designated District or Service Office clerk or
directly to the Home Office not later than the next working day from receipt thereof x x x x

Petitioner would have us apply our ruling in Insular Life Assurance Co., Ltd. v. NLRC and Basiao [12] to the instant case
under the doctrine of stare decisis, postulating that both cases involve parties similarly situated and facts which are almost
Identical.
But we are not convinced that the cited case is on all fours with the case at bar. In Basiao, the agent was appointed Agency
Manager under an Agency Manager Contract. To implement his end of the agreement, Melecio Basiao organized an agency office
to which he gave the name M. Basiao and Associates. The Agency Manager Contract practically contained the same terms and
conditions as the Agency Contract earlier entered into, and the Court observed that drawn from the terms of the contract they had
entered into, (which) either expressly or by necessary implication, Basiao (was) made the master of his own time and selling
methods, left to his own judgment the time, place and means of soliciting insurance, set no accomplishment quotas and
compensated him on the bases of results obtained. He was not bound to observe any schedule of working hours or report to any
regular station; he could seek and work on his prospects anywhere and anytime he chose to and was free to adopt the selling
methods he deemed most effective. Upon these premises, Basiao was considered as agent an independent contractor of petitioner
INSULAR LIFE.
Unlike Basiao, herein respondent De los Reyes was appointed Acting Unit Manager, not agency manager. There is not
evidence that to implement his obligations under the management contract, De los Reyes had organized an office. Petitioner in
fact has admitted that it provIded De los Reyes a place and a table at its office where he reported for and worked whenever he
was not out in the field. Placed under petitioners Cebu District Service Office, the unit was given a name by petitioner De los
Reyes and Associates and assigned Code No. 11753 and Recruitment No. 109398. Under the managership contract, De los Reyes
was obliged to work exclusively for petitioner in life insurance solicitation and was imposed premium production quotas. Of
course, the acting unit manager could not underwrite other lines of insurance because his Permanent Certificate of Authority was
for life insurance only and for no other. He was proscribed from accepting a managerial or supervisory position in any other office
including the government without the written consent of petitioner. De los Reyes could only be promoted to permanent unit
manager if he met certain requirements and his promotion was recommended by the petitioners District Manager and Regional
Manager and approved by its Division Manager. As Acting Unit Manager, De los Reyes performed functions beyond mere
solicitation of insurance business for petitioner. As found by the NLRC, he exercised administrative functions which were
necessary and beneficial to the business of INSULAR LIFE.
In Great Pacific Life Insurance Company v. NLRC[13] which is closer in application that Basiao to this present controversy,
we found that the relationships of the Ruiz brothers and Grepalife were those of employer-employee. First, their work at the time
of their dismissal as zone supervisor and district manager was necessary and desirable to the usual business of the insurance
company. They were entrusted with supervisory, sales and other functions to guard Grepalifes business interests and to bring in
more clients to the company, and even with administrative functions to ensure that all collections, reports and data are faithfully
brought to the company x x x x A cursory reading of their respective functions as enumerated in their contracts reveals that the
company practically dictates the manner by which their jobs are to be carried out x x x x We need elaborate no further.
Exclusivity of service, control of assignments and removal of agents under private respondents unit, collection of premiums,
furnishing of company facilities and materials as well as capital described as Unit Development Fund are but hallmarks of the
management system in which herein private respondent worked. This obtaining, there is no escaping the conclusion that private
respondent Pantaleon de los Reyes was an employee of herein petitioner.
WHEREFORE, the petition of Insular Life Assurance Company, Ltd., is DENIED and the Decision of the National Labor
Relations Commission dated 3 March 1995 and its Order of 6 April 1996 sustaining it are AFFIRMED. Let this case be
REMANDED to the Labor Arbiter a quo who is directed to hear and dispose of this case with deliberate dispatch in light of the
views expressed herein.
SO ORDERED.
Davide, Jr. (Chairman), Vitug, Panganiban and Quisumbing, JJ., concur.
FIRST DIVISION

[G.R. No. 83402. October 6, 1997]

ALGON ENGINEERING CONSTRUCTION CORPORATION and/or ALEX GONZALES, petitioners, vs. THE
NATIONAL LABOR RELATIONS COMMISSION and JOSE ESPINOSA, respondents.

DECISION
HERMOSISIMA, JR., J.:

Petitioners Algon Engineering Construction Corporation (hereafter Algon) and Alex Gonzales come before us through a
petition for certiorari, assailing the twin Resolutions dated April 21, 1987[1] and March 24, 1988,[2] respectively, rendered by the
National Labor Relations Commissions (NLRC)[3] dismissing their appeal and denying their appeal and denying their Motion for
Consideration. In the herein assailed Resolutions, the NLRC affirmed the Decision of the Labor Arbiter finding private respondent
Jose Espinosa to be an employee of petitioner Algon and awarding to him the amount of P21,113.41 in the form of underpaid
wages and other moneys due him under the applicable labors standards law.
The pivotal issue raised herein is a factual one concerning the existence or non-existence of an employee-employer
relationship between petitioner Algon and private respondent.
Petitioner Algon, in the course of its road construction business, utilizes heavy equipment. Due to its need for a place to park
and store the said equipment, it was standard operating procedure for petitioner Algon to enter into a lease contract with the owner
of the house nearest to the construction site. The terms of the contract include storage and parking of petitioner Algons heavy
equipment within the boundaries of the leased house in exchange for a storage or parking fee. Through this procedure, petitioner
Algon minimizes the expense of bringing back and forth said heavy equipment from the project site to the city or municipality
concerned and vice-versa.
The cash vouchers[4] of petitioner Algon show that from March 1, 1983 to May 10, 1985, petitioner Algon was in the process
of completing the Lucena Talacogon Project in Del Monte. Talacogon, Agusan del Sur. Private respondents house is located near
that project site. Thus, throughout that same period of time, private respondent allowed petitioner Algon to use its house and the
grounds adjacent thereto as a parking and storage place for the latters heavy equipment. The storage or parking fee was pegged
at P300.00 on a bi-monthly basis.
Private respondent does not deny having been paid such storage or parking fee as evidenced by the statements of
account[5] issued by private respondent himself and the cash vouchers bearing private respondents signature as payee. What he
claims in addition thereto, however, is that aside from the lease contract covering the utilization of his house and its grounds as a
parking and storage place for a fee, there existed also an employment contract between himself and petitioner Algon which,
private respondent insists, hired him as a watchman with the duty of guarding the heavy equipment parked in other leased house
spaces in Libtong, Talacogon, Agusan del Sur from 6:00 oclock in the evening to 6:00 oclock in the morning.
For its part, the Labor Arbiter[6] made the factual finding that indeed private respondent was employed by petitioner Algon
as watchman and was paid P20.00 on a daily basis. The Labor Arbiter thus stated:

Complainant maintain [sic] that he was employed as watchman by Respondent since March 1, 1983 to May 10, 1985 and was
paid only a daily compensation of P20.00 for seven (7) days a week worked from 6 P.M. to 6 A.M. shift. Further he was
allegedly constrained to resign from the service on May 10, 1985 when he was shifted to day time schedule.

On the other hand, Respondent alleged that their [sic] is no employer-employee relationship with herein Complainant for he was
only engaged by Respondent for the purpose of storage or parking of its equipment near his house. To support the argument,
Respondent submitted xerox copies of cash vouchers and statement accounts showing that the amount paid to Complainant is
for storage fee and that he billed Respondent for such storage.

However in Complainants Rejoinder to Respondents Position Paper Evidences was [sic] submitted xxx a Memorandum dated
August 13, 1983 addressed to Complainant and signed by Emigdio L. Manlegro, General Construction Foreman, which we
quote in full hereunder for clarity:
August 13, 1983
Memorandum To:
Jose Espinosa
Watchman
It has been the companys policy in relation to our promulgated rules and regulations that any of its property lost should be
charged to anyone directly liable if it happen throughcarelessness or gross negligence.
During the time of your duty on August 12, 1983 in Libtong, Talacogon, Agusan del Sur, two (2) batteries of Sakai Road
Roller No. 8 with Serial No. 502 and 503 and two (2) pieces [of] batteries of Sakai Vibratory Compactor Roller No. 4 which are
YUASA brands were stolen. In your capacity as watchman on said equipment, you are held liable for that lost item through gross
negligence.
In this connection, we are charging you the amount of Three Thousand Four Hundred Ninety Eight Pesos and Sixty Centavos
(P3,498.60) for four (4) batteries because one (1) battery cost[s] Eight Hundred Seventy Four Pesos and Sixty Five Centavos
(P874.65) [which is] the current price of said item. This amount will be used to purchase new batteries as replacement for the lost
item.
For your information.
(sgd.) EMIGDIO L. MANLEGRO
General Construction Foreman

On the basis of the parties[] allegation above the prejudicial issue to be resolved is whether or not there exist[s] an employer-
employee relationship [between] herein Complainant and Respondent. If positive than [sic] the issue of moretary [sic] claim
consequently follow[s], but if negative all the other issues must necessarily fail. We find for Complainant that he is an
employee, because Respondent failed to prove that Complainant was engaged in the business of warehousing or storage for a
fee or for parking of vehicles/equipment for a fee. The above-quoted Memorandum clearly defines the position of Complainant
as watchman, and the element of control in the employer-employee relationship is obvious[ly] present by the very wordings of
the said memorandum. The statement of account and cash vouchers are not sufficient to overcome the presumption of
employer-employee relationship between the parties. Therefore based on the complaint, the money claims are hereby awarded
in favor of Complainant, enumerated hereunder:

1. Underpayment of wages P 4,691.00


2. Unpaid ECOLA 9,750.00
3. Holiday/premium pay 725.00
4. Overtime/rest day pay 4,205.00
5. Service incentive leave pay 315.00
6. 13th month pay 1,427.41
________

TOTAL P21,113.41[7]

From the foregoing decision of the Labor Arbiter, petitioner Algon appealed to the NLRC.
Petitioner Algon ascribed as error the finding made by the Labor Arbiter that an employer-employee relationship existed
between petitioner Algon and private respondent warranting, thus, the payment to the latter of the various moneys due him under
the applicable wage and labor standards laws. Petitioner Algon persisted to argue that it did not hire private respondent but merely
leased storage or parking space for its heavy equipment.
Faced with a factual issue, the NLRC analyzed the evidence. And like the Labor Arbiter, the NLRC, applying the control
test in determining the existence of an employer-employee relationship between the herein parties, affirmed the Labor Arbiters
conclusions. The NLRC ruled, thus:

The complainant, resident of Batucan del Monte, Talacogon, Agusan [del] Sur, who claimed to have been hired on March 1,
1983 as a watchman at P20.00 per day, sought for payment of standard benefits allegedly denied him. The respondent adduced
multiple evidence consisting of statements of accounts in printed forms signed by the complainant as he billed the respondent
for storage fees and cash vouchers in printed forms with respondent companys letterhead reflecting payment of storage fees.
The complainant produced a memorandum dated August 13, 983 signed by respondents General Construction Foreman
Emigdio L. Manlegro chiding the complainant for the loss of four (4) batteries as he watched company properties in [Li]btong ,
Talacogon, Agusan del Sur and declaring that the respondents held him accountable for them for gross negligence and that the
amount of P3,498.60 would be deducted from his salary.

The respondents contradicted that Emigdio L. Manlegro, one of the sponsors at complainants wedding , is not one of the
officers authorized to issue memorandum and other communication.

xxx

The Commission has weighed the evidence and relied upon the finding and conclusion of the Labor Arbiter who had the
opportunity to closely investigate the parties. For one thing, the appellants conveyed the impression that they were assigning to
the Labor Arbiter only a simple error and was reluctant to hold him responsible for grave abuse of discretion and their general
construction foreman for willful [sic] breach of trust. The latter, through his memorandum, vividly located the complainant in
respondents employ. The respondents themselves helped to make the complaints posture plausible by their failure to deny that
they posted the complainant at Libtong, Talacogon, Agusan del Sur, a distance from his house at Balatucan del Monte,
Talacogon Agusan del Sur; and that they deducted the amount of P3,498.60 from his wages. The bills for storage fees and the
vouchers for the same can only be a scheme to avoid the full measure of labor laws.[8]

Refusing to concede liability for underpaid wages and other monetary benefits, petitioner Algon sought reconsideration of
the above Resolution. Its Motion for Reconsideration was however denied in a Minute Resolution dated March 24, 1988. Hence
this petition grounded on the following issues:
I

WHETHER THE PUBLIC RESPONDENT NATIONAL LABOR RELATIONS COMMISSION ERRED IN AFFIRMING
THE DECISION OF THE LABOR ARBITER THAT THERE IS EMPLOYER-EMPLOYEE RELATIONSHIP BETWEEN
THE PETITIONER AND PRIVATE RESPONDENT JOSE ESPINOSA.

II

WHETHER THE PUBLIC RESPONDENT NATIONAL LABOR RELATIONS COMMISSION ERRED IN GIVING
CREDENCE TO THE AUGUST 13, 1983 MEMORANDUM CHIDING PRIVATE RESPONDENT FOR THE LOSS OF
FOUR (4) BATTERIES OWNED BY HEREIN PETITIONER.

III

WHETHER PUBLIC RESPONDENT NATIONAL LABOR RELATIONS COMMISSION ERRED IN AFFIRMING THE
LABOR ARBITERS DECISION THAT PRIVATE RESPONDENT JOSE ESPINOSA IS ENTITLED TO THE MONETARY
CLAIM OF P21,113.41.

IV

WHETHER THE HONORABLE SUPREME COURT CAN REVIEW THE FINDINGS OF FACT OF PUBLIC
RESPONDENT NATIONAL LABOR RELATIONS COMMISSION.[9]

We find no merit in petitioners contentions.


In the case of Tiu vs. National Labor Relations Commission[10] we stated that: [t]he question whether an employer-employee
relationship exists is a question of fact. As long as the findings of the labor agencies on this question are supported by evidence,
the findings will not be disturbed on review in this Court. Review in the Supreme Court concerning factual findings in labor cases
is confined to determining allegations of lack of jurisdiction or grave abuse of discretion.
We see no cogent reason to disturb the findings of the NLRC. We are in agreement with the public respondents conclusion
that there indeed existed an employer-employee relationship between Algon and Espinosa, since the said conclusion was based
on substantial evidence. A careful perusal of the cash vouchers signed by Espinosa would show that he was paid storage fees not
only for the equipment stored at Libtong, but also for equipment stored near the Linsayawon Bridge, as well as for equipment
stored within the compound owned by the petitioner Algon. A reproduction of the cash vouchers is herein shown to better illustrate
this fact:
ALGON ENGINEERING CONSTRUCTION CORPORATION
CASH VOUCHER
NAME OF PAYEE: JOSE ESPINOSA DATE: DEC. 15, 1983
ADDRESS: Talacogon, Agusan del Sur
Payment for:
Storage fee for the period from December 1-15, 1983
At Lucena-del-Monte-Talacogon Section, Agusan del Sur..P250.00
(Libtong)
Sgd.
Payees Signature
________________________________________________________________________
ALGON ENGINEERING CONSTRUCTION CORPORATION
CASH VOUCHER
NAME OF PAYEE: JOSE ESPINOSA DATE: DEC. 31, 1983
ADDRESS: Talacogon, Agusan del Sur
Payment for:
Storage fee for the period from December 16-31, 1983
At Lucena-del-Monte-Talacogon Section, Agusan del Sur..P250.00
(Linsayawon)
Sgd.
Payees Signature
________________________________________________________________________
ALGON ENGINEERING CONSTRUCTION CORPORATION
CASH VOUCHER
NAME OF PAYEE: JOSE ESPINOSA DATE: SEPTEMBER 30, 1984
ADDRESS: Talacogon, Agusan del Sur
Payment for:
Storage fee for the period from September 16-30, 1984
At Lucena-del-Monte-Talacogon Section, Agusan del Sur..P250.00
(Del Monte Algon CompoundAll equipments inside the Compound)
Sgd.
Payees Signature
It ill-behooves this Court why, if it is as claimed by petitioner Algon that Espinosa was being paid only for the use of the
latters property as parking and storage facilities and not as a watchman, that said petitioner saw it fit to pay Espinosa storage fees
for equipment stored within its own compound. The only conclusion that may be drawn is that which the public respondent NLRC
made in its assailed resolution, that is, [t]he bills for storage fees and vouchers for the same can only be a scheme to avoid the full
measure of labor laws.
In addition, the Memorandum issued by petitioner Algons foreman to Espinosa citing him for the loss of four (4) batteries is
sufficient evidence to prove the existence of an employer-employee relationship. As aptly observed by the Solicitor General:

Accordingly, the first paragraph of the said memo, which reads---

It is the companys policy in relation to our promulgated rules and regulations that any of its property lost should be charged to
anyone directly liable if it happen through carelessness or gross negligence. (underscoring supplied)
is a clear indication that the Petitioner corporation has the power to control. Private respondents conduct as an employee and to
make said employee account for his conduct to The Company as employer. Such control is the most significant and vital
element in determining the existence of an employer-employee relationship. Furthermore, the second paragraph of the said
memo establishes the existence of an employer-employee relationship. The paragraph reads as follows:

During the time of your duty (underscoring ours) on August 12, 1983 in Libtong, Talacogon , Agusan del Sur, two batteries of
Sakai Road Roller No.8 with serial number 502 and 503 and two (2) pieces of batteries of Sakai Vibratory Compactor Roller
No. 4 which are Yuasa brands were stolen. In your capacity as watchman on said equipment, you are held liable to the lost item
through gross negligence.(underscoring supplied)

Petitioners subsequent claim that Petitioners Foreman was not authorized to issue said memorandum is of no moment as this is
a matter between the Company and another employee, private respondent herein. In fact the petitioner in its Petition to this
Honorable Supreme Court admitted in so many words, Petitioners control over Private respondent and, hence, the employer-
employee relationship between the corporation and the corporations watchman.

No particular evidence is required to prove the existence of an employer-employee relationship.[11] All that is necessary is to show
that the employer is capable of exercising control over the employee. In labor disputes, it suffices that there be a casual connection
between the claim asserted and the employer-employee relations.[12]
The elements of an employer-employee relationship are: (1) selection and engagement of the employee; (2) payment of
wages; (3) power of dismissal; and (4) employers own power to control employees conduct.[13] Control of the employees conduct
is commonly regarded as the most crucial and determinative indicator of the presence or absence of an employer-employee
relationship.[14] In the case at bar, there is no doubt that petitioner exercises control over Espinosas conduct, as shown by the fact
that, rather than address the loss of batteries as a breach of the purported contract of lease, the memorandum instead emphasized
the company rules and regulations and the fact that Espinosa was on duty at the time of the said loss. Moreover, the petitioners
act of transferring Espinosa to the day shift clearly shows its treatment of Espinosa as an employee, and not as a landlord. Thus,
an employer-employee relationship exists where the person for whom the services are performed reserves a right to control not
only the end to be achieved but also the means to be used in reaching such an end.[15]
WHEREFORE, the petition is DISMISSED for lack of merit.
SO ORDERED.
Davide, Jr., (Chairman), Vitug, and Kapunan, JJ., concur.
Bellosillo, J., no part.did not participate in deliberation.
FIRST DIVISION

[G.R. No. 114733. January 2, 1997]

AURORA LAND PROJECTS CORP. Doing business under the name "AURORA PLAZA" and TERESITA T.
QUAZON, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and HONORIO
DAGUI, respondents.

DECISION
HERMOSISIMA, JR., J.:

The question as to whether an employer-employee relationship exists in a certain situation continues to bedevil the courts.
Some businessmen try to avoid the bringing about of an employer-employee relationship in their enterprises because that judicial
relation spawns obligations connected with workmen's compensation, social security, medicare, minimum wage, termination pay,
and unionism.[1] In light of this observation, it behooves this Court to be ever vigilant in checking the unscrupulous efforts of
some of our entrepreneurs, primarily aimed at maximizing their return on investments at the expense of the lowly workingman.
This petition for certiorari seeks the reversal of the Resolution [2] of public respondent National Labor Relations
Commission dated March 16, 1994 affirming with modification the decision of the Labor Arbiter, dated May 25, 1992, finding
petitioners liable to pay private respondent the total amount of P195,624.00 as separation pay and attorney's fees.
The relevant antecedents:

Private respondent Honorio Dagui was hired by Doa Aurora Suntay Tanjangco in 1953 to take charge of the maintenance and
repair of the Tanjangco apartments and residential buildings. He was to perform carpentry, plumbing, electrical and masonry
work. Upon the death of Doa Aurora Tanjangco in 1982, her daughter, petitioner Teresita Tanjangco Quazon, took over the
administration of all the Tanjangco properties. On June 8, 1991, private respondent Dagui received the shock of his life when
Mrs. Quazon suddenly told him: "Wala ka nang trabaho mula ngayon,"[3] on the alleged ground that his work was
unsatisfactory. On August 29, 1991, private respondent, who was then already sixty-two (62) years old, filed a complaint for
illegal dismissal with the Labor Arbiter.

On May 25, 1992, Labor Arbiter Ricardo C. Nora rendered judgment, the decretal portion of which reads:

"IN VIEW OF ALL THE FOREGOING, respondents Aurora Plaza and/or Teresita Tanjangco Quazon are hereby ordered to
pay the complainant the total amount of ONE HUNDRED NINETY FIVE THOUSAND SIX HUNDRED TWENTY FOUR
PESOS (P195,624.00) representing complainant's separation pay and the ten (10%) percent attorney's fees within ten (10) days
from receipt of this Decision.

All other issues are dismissed for lack of merit."[4]

Aggrieved, petitioners Aurora Land Projects Corporation and Teresita T. Quazon appealed to the National Labor Relations
Commission. The Commission affirmed, with modification, the Labor Arbiter's decision in a Resolution promulgated on March
16, 1994, in the following manner:

"WHEREFORE, in view of the above considerations, let the appealed decision be as it is hereby AFFIRMED with (the)
MODIFICATION that complainant must be paid separation pay in the amount of P88,920.00 instead of P177,840.00. The
award of attorney's fees is hereby deleted."[5]

As a last recourse, petitioners filed the instant petition based on grounds not otherwise succinctly and distinctly ascribed, viz:
I

"RESPONDENT NLRC COMMITTED A GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF


JURISDICTION IN AFFIRMING THE LABOR ARBITER'S DECISION SOLELY ON THE BASIS OF ITS STATEMENT
THAT WE FAIL TO FIND ANY REASON OR JUSTIFICATION TO DISAGREE WITH THE LABOR ARBITER IN HIS
FINDING THAT HONORIO DAGUI WAS DISMISSED BY THE RESPONDENT' (p. 7, RESOLUTION), DESPITE AND
WITHOUT EVEN BOTHERING TO CONSIDER THE GROUNDS STATED IN PETITIONERS' APPEAL
MEMORANDUM WHICH ARE PLAINLY MERITORIOUS.

II

RESPONDENT NLRC COMMITTED A GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF


JURISDICTION IN FINDING THAT COMPLAINANT WAS EMPLOYED BY THE RESPONDENTS MORE SO 'FROM
1953 TO 1991' (p. 3, RESOLUTION).

III

RESPONDENT NLRC COMMITTED A GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF


JURISDICTION IN AWARDING SEPARATION PAY IN FAVOR OF PRIVATE RESPONDENT MORE SO FOR THE
EQUIVALENT OF 38 YEARS OF ALLEGED SERVICE.

IV

RESPONDENT NLRC COMMITTED A GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF


JURISDICTION IN HOLDING BOTH PETITIONERS LIABLE FOR SEPARATION PAY." [6]

It is our impression that the crux of this petition rests on two elemental issues: (1) Whether or not private respondent Honorio
Dagui was an employee of petitioners; and (2) If he were, whether or not he was illegally dismissed.
Petitioners insist that private respondent had never been their employee. Since the establishment of Aurora Plaza, Dagui
served therein only as a job contractor. Dagui had control and supervision of whoever he would take to perform a contracted job.
On occasion, Dagui was hired only as a "tubero" or plumber as the need arises in order to unclog sewerage pipes. Every time his
services were needed, he was paid accordingly. It was understood that his job was limited to the specific undertaking of unclogging
the pipes. In effect, petitioners would like us to believe that private respondent Dagui was an independent contractor, particularly
a job contractor, and not an employee of Aurora Plaza.
We are not persuaded.
Section 8, Rule VIII, Book III of the Implementing Rules and Regulations of the Labor Code provides in part:

"There is job contracting permissible under the Code if the following conditions are met:

xxx xxx xxx

(2) The contractor has substantial capital or investment in the form of tools, equipment, machineries, work premises, and other
materials which are necessary in the conduct of his business."

Honorio Dagui earns a measly sum of P180.00 a day (latest salary).[7] Ostensibly, and by no stretch of the imagination can
Dagui qualify as a job contractor. No proof was adduced by the petitioners to show that Dagui was merely a job contractor, and
it is absurd to expect that private respondent, with such humble resources, would have substantial capital or investment in the
form of tools, equipment, and machineries, with which to conduct the business of supplying Aurora Plaza with manpower and
services for the exclusive purpose of maintaining the apartment houses owned by the petitioners herein.
The bare allegation of petitioners, without more, that private respondent Dagui is a job contractor has been disbelieved by
the Labor Arbiter and the public respondent NLRC. Dagui, by the findings of both tribunals, was an employee of the petitioners.
We are not inclined to set aside these findings. The issue whether or not an employer-employee relationship exists in a given case
is essentially a question of fact. [8] As a rule, repetitious though it has become to state, this Court does not review supposed errors
in the decision of the NLRC which raise factual issues, because factual findings of agencies exercising quasi-judicial functions
[like public respondent NLRC] are accorded not only respect but even finality, aside from the consideration that this Court is
essentially not a trier of facts.[9]
However, we deem it wise to discuss this issue full-length if only to bolster the conclusions reached by the labor tribunals,
to which we fully concur.
Jurisprudence is firmly settled that whenever the existence of an employment relationship is in dispute, four elements
constitute the reliable yardstick: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of
dismissal; and (d) the employer's power to control the employee's conduct.[10] It is the so-called "control test," and that is, whether
the employer controls or has reserved the right to control the employee not only as to the result of the work to be done but also as
to the means and methods by which the same is to be accomplished, [11] which constitute the most important index of the existence
of the employer-employee relationship. Stated otherwise, an employer-employee relationship exists where the person for whom
the services are performed reserves the right to control not only the end to be achieved but also the means to be used in reaching
such end. [12]
All these elements are present in the case at bar. Private respondent was hired in 1953 by Doa Aurora Suntay Tanjangco
(mother of Teresita Tanjangco-Quazon), who was then the one in charge of the administration of the Tanjangco's various
apartments and other properties. He was employed as a stay-in worker performing carpentry, plumbing, electrical and necessary
work (sic) needed in the repairs of Tanjangco's properties.[13] Upon the demise of Doa Aurora in 1982 petitioner Teresita
Tanjangco-Quazon took over the administration of these properties and continued to employ the private respondent, until his
unceremonious dismissal o0n June 8, 1991.[14]
Dagui was not compensated in terms of profits for his labor or services like an independent contractor. Rather, he was paid
on a daily wage basis at the rate of P180.00. [15] Employees are those who are compensated for their labor or services by wages
rather than by profits. [16] Clearly, Dagui fits under this classification.
Doa Aurora and later her daughter petitioner Teresita Quazon evidently had the power of dismissal for cause over the private
respondent.[17]
Finally, the records unmistakably show that the most important requisite of control is likewise extant in this case. It should
be borne in mind that the power of control refers merely to the existence of the power and not to the actual exercise thereof. It is
not essential for the employer to actually supervise the performance of duties of the employee; it is enough that the former has a
right to wield the power.[18] The establishment of petitioners is engaged in the leasing of residential and apartment buildings.
Naturally, private respondent's work therein as a maintenance man had to be performed within the premises of herein petitioners.
In fact, petitioners do not dispute the fact that Dagui reports for work from 7:00 o'clock in the morning until 4:00 o'clock in the
afternoon. It is not far-fetched to expect, therefore, that Dagui had to observe the instructions and specifications given by then
Doa Aurora and later by Mrs. Teresita Quazon as to how his work had to be performed. Parenthetically, since the job of a
maintenance crew is necessarily done within company premises, it can be inferred that both Doa Aurora and Mrs. Quazon could
easily exercise control on private respondent whenever they please.
The employment relationship established, the next question would have to be: What kind of an employee is the private
respondent regular, casual or probationary?
We find private respondent to be a regular employee, for Article 280 of the Labor Code provides:

"Regular and Casual employment. The provisions of written agreement to the contrary notwithstanding and regardless of the
oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform
activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment
has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of
the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for
the duration of the season..

An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That, any employee who
has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee
with respect to the activity in which he is employed and his employment shall continue while such actually exists."

As can be gleaned from this provision, there are two kinds of regular employees, namely: (1) those who are engaged to
perform activities which are usually necessary or desirable in the usual business or trade of the employer; and (2) those who have
rendered at least one year of service, whether continuous or broken, with respect to the activity in which they are employed.[19]
Whichever standard is applied, private respondent qualifies as a regular employee. As aptly ruled by the Labor Arbiter:

"xxx As owner of many residential and apartment buildings in Metro Manila, the necessity of maintaining and employing a
permanent stay-in worker to perform carpentry, plumbing, electrical and necessary work needed in the repairs of Tanjangco's
properties is readily apparent and is in fact needed. So much so that upon the demise of Doa Aurora Tanjangco, respondent's
daughter Teresita Tanjangco-Quazon apparently took over the administration of the properties and continued to employ
complainant until his outright dismissal on June 8, 1991 xxx xxx.[20]
The jobs assigned to private respondent as maintenance man, carpenter, plumber, electrician and mason were directly related
to the business of petitioners as lessors of residential and apartment buildings. Moreover, such a continuing need for his services
by herein petitioners is sufficient evidence of the necessity and indispensability of his services to petitioners' business or trade.
Private respondent Dagui should likewise be considered a regular employee by the mere fact that he rendered service for the
Tanjangcos for more than one year, that is, beginning 1953 until 1982, under Doa Aurora; and then from 1982 up to June 8, 1991
under the petitioners, for a total of twenty-nine (29) and nine (9) years respectively. Owing to private respondent's length of
service, he became a regular employee, by operation of law, one year after he was employed in 1953 and subsequently in 1982.
In Baguio Country Club Corp. v. NLRC,[21] we decided that it is more in consonance with the intent and spirit of the law to rule
that the status of regular employment attaches to the casual employee on the day immediately after the end of his first year of
service. To rule otherwise is to impose a burden on the employee which is not sanctioned by law. Thus, the law does not provide
the qualification that the employee must first be issued a regular appointment or must first be formally declared as such before he
can acquire a regular status.
Petitioners argue, however, that even assuming arguendo that private respondent can be considered an employee, he cannot
be classified as a regular employee. He was merely a project employee whose services were hired only with respect to a specific
job and only while the same exists,[22] thus falling under the exception of Article 280, paragraph 1 of the Labor Code. Hence, it is
claimed that he is not entitled to the benefits prayed for and subsequently awarded by the Labor Arbiter as modified by public
respondent NLRC.
The circumstances of this case in light of settled case law do not, at all, support this averment. Consonant with a string of
cases beginning with Ochoco v. NLRC,[23] followed by Philippine National Construction Corporation v. NLRC,[24] Magante v.
NLRC,[25] and Capitol Industrial Construction Corporation v. NLRC,[26] if truly, private respondent was employed as a "project
employee, " petitioners should have submitted a report of termination to the nearest public employment office everytime his
employment is terminated due to completion of each project, as required by Policy Instruction No. 20, which provides:

"Project employees are not entitled to termination pay if they are terminated as a result of the completion of the project or any
phase thereof in which they are employed, regardless of the number of project in which they have been employed by a particular
construction company. Moreover, the company is not required to obtain a clearance from the Secretary of Labor in connection
with such termination. What is required of the company is a report to the nearest Public Employment Office for statistical
purposes."

Throughout the duration of private respondent's employment as maintenance man, there should have been filed as many
reports of termination as there were projects actually finished, if it were true that private respondent was only a project worker.
Failure of the petitioners to comply with this simple, but nonetheless compulsory, requirement is proof that Dagui is not a project
employee.[27]
Coming now to the second issue as to whether or not private respondent Dagui was illegally dismissed, we rule in the
affirmative.
Jurisprudence abound as to the rule that the twin requirements of due process, substantive and procedural, must be complied
with, before a valid dismissal exists.[28] Without which the dismissal becomes void.[29]
The twin requirements of notice and hearing constitute the essential elements of due process. This simply means that the
employer shall afford the worker ample opportunity to be heard and to defend himself with the assistance of his representative, if
he so desires.[30] As held in the case of Pepsi Cola Bottling Co. v. NLRC:[31]

"The law requires that the employer must furnish the worker sought to be dismissed with two written notices before termination
of employee can be legally effected: (1) notice which apprises the employee of the particular acts or omissions for which his
dismissal is sought; and (2) the subsequent notice which informs the employee of the employer's decision to dismiss him
(Section 13, BP 130; Sections 2-6, Rule XIV, Book V Rules and Regulations Implementing the Labor Code as amended).
Failure to comply with the requirements taints the dismissal with illegality. This procedure is mandatory; in the absence of
which, any judgment reached by management is void and inexistent. (Tingson, Jr. v. NLRC, 185 SCRA 498 [1990]; National
Service Corporation v. NLRC, 168 SCRA 122 [1988]; Ruffy v. NLRC, 182 SCRA 365 [1990]."

These mandatory requirements were undeniably absent in the case at bar. Petitioner Quazon dismissed private respondent
on June 8, 1991, without giving him any written notice informing the worker herein of the cause for his termination. Neither was
there any hearing conducted in order to give Dagui the opportunity to be heard and defend himself. He was simply told: "Wala
ka nang trabaho mula ngayon," allegedly because of poor workmanship on a previous job.[32] The undignified manner by which
private respondent's services were terminated smacks of absolute denial of the employee's right to due process and betrays
petitioner Quazon's utter lack of respect for labor. Such an attitude indeed deserves condemnation.
The Court, however, is bewildered why only an award for separation pay in lieu of reinstatement was made by both the
Labor Arbiter and the NLRC. No backwages were awarded. It must be remembered that backwages and reinstatement are two
reliefs that should be given to an illegally dismissed employee. They are separate and distinct from each other. In the event that
reinstatement is no longer possible, as in this case,[33] separation pay is awarded to the employee. The award of separation pay is
in lieu of reinstatement and not of backwages. In other words, an illegally dismissed employee is entitled to (1) either
reinstatement, if viable, or separation pay if reinstatement is no longer viable, and (2) backwages.[34] Payment of backwages is
specifically designed to restore an employee's income that was lost because of his unjust dismissal.[35] On the other hand, payment
of separation pay is intended to provide the employee money during the period in which he will be looking for another
employment. [36]
Considering, however, that the termination of private respondent Dagui was made on June 8, 1991 or after the effectivity of
the amendatory provision of Republic Act No. 6715 on March 21, 1989, private respondent's backwages should be computed on
the basis of said law.
It is true that private respondent did not appeal the award of the Labor Arbiter awarding separation pay sans backwages.
While as a general rule a party who has not appealed is not entitled to affirmative relief other than the ones granted in the decision
of the court below,[37] law and jurisprudence authorize a tribunal to consider errors, although unassigned, if they involve (1) errors
affecting the lower court's jurisdiction over the subject matter, (2) plain errors not specified, and (3) clerical errors.[38] In this case,
the failure of the Labor Arbiter and the public respondent NLRC to award backwages to the private respondent, who is legally
entitled thereto having been illegally dismissed, amounts to a "plain error" which we may rectify in this petition, although private
respondent Dagui did not bring any appeal regarding the matter, in the interest of substantial justice. The Supreme Court is clothed
with ample authority to review matters, even if they are not assigned as errors on appeal, if it finds that their consideration is
necessary in arriving at a just decision of the case.[39] Rules of procedure are mere tools designed to facilitate the attainment of
justice. Their strict and rigid application, which would result in technicalities that tend to frustrate rather than promote substantial
justice, must always be avoided.[40] Thus, substantive rights like the award of backwages resulting from illegal dismissal must not
be prejudiced by a rigid and technical application of the rules.[41]
Petitioner Quazon argues that, granting the petitioner corporation should be held liable for the claims of private respondent,
she cannot be made jointly and severally liable with the corporation, notwithstanding the fact that she is the highest ranking officer
of the company, since Aurora Plaza has a separate juridical personality.
We disagree.
In the cases of Maglutac v. National Labor Relations Commission,[42] Chua v. National Labor Relations Commission,[43] and
A.C Ransom Labor Union-CCLU v. National Labor Relations Commission[44] we were consistent in holding that the highest and
most ranking officer of the corporation, which in this case is petitioner Teresita Quazon as manager of Aurora Land Projects
Corporation, can be held jointly and severally liable with the corporation for the payment of the unpaid money claims of its
employees who were illegally dismissed. In this case, not only was Teresita Quazon the most ranking officer of Aurora Plaza at
the time of the termination of the private respondent, but worse, she had a direct hand in the private respondent's illegal dismissal.
A corporate officer is not personally liable for the money claims of discharged corporate employees unless he acted with evident
malice and bad faith in terminating their employment.[45] Here, the failure of petitioner Quazon to observe the mandatory
requirements of due process in terminating the services of Dagui evinced malice and bad faith on her part, thus making her liable.
Finally, we must address one last point. Petitioners aver that, assuming that private respondent can be considered an
employee of Aurora Plaza, petitioners cannot be held liable for separation pay for the duration of his employment with Doa Aurora
Tanjangco from 1953 up to 1982. If petitioners should be held liable as employers, their liability for separation pay should only
be counted from the time Dagui was rehired by the petitioners in 1982 as a maintenance man.
We agree.
Petitioners' liability for separation pay ought to be reckoned from 1982 when petitioner Teresita Quazon, as manager of
Aurora Plaza, continued to employ private respondent. From 1953 up to the death of Doa Aurora sometime in 1982, private
respondent's claim for separation pay should have been filed in the testate or intestate proceedings of Doa Aurora. This is because
the demand for separation pay covered by the years 1953-1982 is actually a money claim against the estate of Doa Aurora, which
claim did not survive the death of the old woman. Thus, it must be filed against her estate in accordance with Section 5, Rule 86
of the Revised Rules of Court, to wit:

"Section 5. Claims which must be filed under the notice. If not ,filed barred; exceptions. All claims for money against the
decedent, arising from contract, express or implied, whether the same be due, not due, or contingent, all claims for funeral
expenses for the last sickness of the decedent, and judgment for money against the decedent, must be filed within the time
limited in the notice; otherwise they are barred forever, except that they may be set forth as counterclaims in any action that the
executor or administrator may bring against the claimants.xxx xxx."
WHEREFORE, the instant petition is partly GRANTED and the Resolution of the public respondent National Labor
Relations Commission dated March 16, 1994 is hereby MODIFIED in that the award of separation pay against the petitioners
shall be reckoned from the date private respondent was re-employed by the petitioners in 1982, until June 8, 1991. In addition to
separation pay, full backwages are likewise awarded to private respondent, inclusive of allowances, and other benefits or their
monetary equivalent pursuant to Article 279[46] of the Labor Code, as amended by Section 34 of Republic Act No. 6715, computed
from the time he was dismissed on June 8, 1991 up to the finality of this decision, without deducting therefrom the earnings
derived by private respondent elsewhere during the period of his illegal dismissal, pursuant to our ruling in Osmalik Bustamante,
et. al. v. National Labor Relations Commission.[47]
No costs.
SO ORDERED.
Padilla, Bellosillo, Vitug, and Kapunan, JJ., concur.
FIRST DIVISION

[G.R. No. 118892. March 11, 1998]

FILIPINAS BROADCASTING NETWORK, INC., petitioner vs. NATIONAL LABOR RELATIONS COMMISION and
SIMEON MAPA JR., respondents.

DECISION
PANGANIBAN, J.:

As a rule, factual findings of the NLRC are binding on his Court. However, when the findings of the NLRC and the
labor arbiter are contradictory, this Court may review questions of facts. Where the evidence clearly shows the absence of an
employer-employee relationship, a claim for unpaid wages, thirteenth month pay, holiday and rest pay and other employment
benefits must necessarily fail.

The Case

Before us is a petition for certiorari assailing the April 29, 1994 Decision of the National Labor Relations Commission,[1] in
Case No. 05-08-00348-92, entitled Simeon M. Mapa Jr., v. DZRC Radio Station. The dispositive portion of the challenged
Decision reads:

WHEREFORE, premises considered, the appealed decision is set aside, and a new judgment is entered, declaring that
complainant is an employee of the respondent and is entitled to his claims for the payment of his services from March 11, 1990
to January 16, 1992.[2]

Petitioner also impugns the November 9, 1994 Resolution[3] f the NLRC denying the motion for reconsideration.
The October 13, 1993 decision of the labor arbiter,[4] which the NLRC reversed and set aside, disposed as follows:

This Arbitration Branch, based on the facts and circumstances established by the parties in this case is inclined to believe that
complaint Simeon M. Mapa, Jr., had not been an employee of the respondent DZRC Radio Station before February 16,
1992.[5] He was but a volunteer reporter when accommodated to air his report on the respondent radio station as his application
for employment with the respondent radio station as his application for employment with the respondent as fieled reporter had
not been accepted yet or approved before February, 1992.There was no employer-employee relations that existed between the
complainant and the respondent since March 11, 1990 until February 16, 1992. The complainant is not entitled to his claim for
any salaries, premium pay for holiday and rest day, holiday pay and the 13th month pay against the respondent DZRC Radio
Station/Salvo Fortuno.

WHEREFORE, in the light of the foregoing premises, judgment is hereby rendered dismissing the complaint in his case for lack
of merit.[6]

The Facts
Version of Private Respondent

Petitioner and private respondent submitted different versions of the facts. The facts as viewed by private respondent are as
follows:[7]
The complainant (herein private respondent) began to work for the respondent as a radio reporter starting March 11, 1990. On
May 14, 1990, upon being informed by then respondents Station Manager, Mr. Plaridel Brocales, that complainants
employment with respondent is being blocked by Ms. Brenda Bayona of DZGB, complainants previous employer, the said
complainant took a leave of absence. In the first week of June, 1990, the respondent thru Mr. Antonio Llarena, then an
employee of the respondent, asked the complainant to return to work even as he was assured that his salaries will be paid to him
already. Thus, the complainant continued to work for the respondent since then. On September 5, 1991, again the complainant
took a leave of absence because of his desperation over the failure of respondent to make good its promise of payment of
salaries. He was reinstated on January 16, 1992 and resigned on February 27, 1992 when he decided to run for an elective office
in the town of Daraga, albay. Unfortunately, the respondent paid salary to the complainant only for the period from January 16,
1992 up to February 27, 1992. Respondent did not pay the complainant for all the services rendered by the latter from March
11, 1990 up to January 16, 1992.

As may be glened from its memorandum,[8] petitioners version of the facts is as follows:

1. On or before April 1990, Mapa was dismissed from his employment with PBN-DZGB Legaspi. At the time, Mapa filed a
case for illegal dismissal against PBN-DZGB Legaspi docketed as RAV V. Case No. 05-04-00120-90 entitled Simeon Mapa,
Jr. v. Peoples Broadcasting Network-DZGB Legaspi, Jorge Bayona and Arturo Osia.

2. On or about May 1990, Mapa sought employment from DZRC as a radio reporter. However, DZRC required of private
respondent the submission of a clearance from his former employer. Otherwise, his apllication would not be acted upon;

3.On May 14, 1990, Mapa was informed by DZRC's then station manager, Mr. Plaridel Larry Brocales, that his application for
employment was being blocked by Ms. Brenda Bayona of DZGB, Mapas former employer. This fact is supported by Mapas
position paper before the Honorable Labor Arbiter xxx;

4. Taking pity on Mapa and pending the issuance of the clearance from PBN-DZGB Legaspi, Mr. Larry Brocales granted the
request of Mapa to be accomodated only as a volunteer reporter of DZRC on a part-time basis. As a volunteer reporter, Mapa
was not to be paid wages as an employee of DZRC but he was permitted to find sponsors whose business establishments will be
advertised every time he goes on the air. Most importantly, Mapas only work consisted of occasional newsbits or on-the spot
reporting of consisted of occasional newsbits or on-the spot reporting of incidents or newsworthy occurances, which was very
seldom.

5. Mapas friends who were also in the same situation as he was, declared in an affidavit dated June 10, 1993 that:

WE, ALLAN ALMARIO and ELMER ANONUEVO, of legal age, single, with postal address at Washington Drive, Legaspi
City, under oath, depose and state:

1. We personally know Simeon Jun Mapa, a former volunteer reporter at DZRC just like us;

2. As volunteer reporters we know that we will not receive any salary or allowance from DZRC because our work was purely
voluntary;

3. As incentive for us, the management of DZRC allowed us to get our own sponsors whose business establishment we
mention[ed] every after field report was made by us;

4. The management did not require or oblige us to render a report. We were on our own. We ma[d]e or render[ed] a report as we
[saw]fit;

5. During our stint as volunteer reporters we had several sponsors each who paid us P300.00 per month (each).

xxx xxx xxx

6. Having no radio gadgets to begin with, DZRC loaned Mapa the necessary equipment such as handheld radios and reporting
gadgets. Mapa was to do occasional reporting only, i.e., a few minutes each day at an irregular time period at Mapas own
convinience. Mapa advertised his sponsors and pocketed the payment of these sponsors for his advertising services. In addition,
DZRC had no control over the manner by [sic] which he was to make his reports. Nor were the said reports subject to editing by
DZRC;
7. In an Affidavit dated June 10, 1993 executed by one of Mapas sponsors, the same reads as follows:

I, CARLITO V. BAYLON, of legal age, married, resident of Dona Maria Subdivision, Daraga, Albay, under oath, despose and
state:

1. I am a lawyer by profession. At the same time, I am owner of Kusina ni Manoy a restaurant situated in Daraga, Albay;

2. I personally know Simeon Jun Mapa. Sometime in May, 1990 he went to make and asked if I could be one of his sponsors
because he was accomodated by DZRC as volunteer reporter. He explained to me that, he will not be receiving any salary from
DZRC[;] hence, he was soliciting any support;

3. Taking pity on him, I agreed to be one of his sponsors. The condition was, I will have to pay him P300.00/month. In
exchange thereto, he will have to mention the name of the name of my restaurant every time he renders a report on the air;

4. My sponsorship lasted for about (5) months after which I discontinued it when I rarely heard Jun Mapa in DZRC program.

xxx xxx xxx

8. On November 7, 1990, in his testimony against his former employer, Mapa declared under oath. To wit:

ATTY. LOBRIGO:

On paragraph 14 of the same affidavit it states and I quote: 13. Having been left with an empty stomach, I was compelled to
apply for employment with another radio station. On March 11, 1990, I applied for employment with DZRC. Unfortunately, my
application would not yet be acted [upon] favorably because of the malicious and oppressive imputations to me by my former
employer.

My question is what is now the status of your employment with DZRC?

WITNESS:

I am at present on a volunteer status because my former employer at DZGB did not give me clearance and I am required to
submit that clearance to DZRC. (Underlining supplied).

See p. 2 of Position Paper of DZRC before the Labor Arbiter and pp. 4-5 of the Transcript of Stenographer Notes dated
November 7, 1990, attached and marked as Annex F and Annex F-1, Petition for Certiorari;

9. It cannot be overstressed that Mapas application for employment could not have been acted upon because of the lack of the
pre-requisite clearance.

10. Lacking in sponsors, Mapa soon failed to provide petitioner with newsbits, finding it unprofitable to continue since he had
no available sources of funding. Sometime in September 1991, Mapa quit his part-time endeavor with DZRC, as attested to by
the Office of Supervisor/Traffic Manager Ignacio Casi in an Affidavit dated June 10, 1992, to wit:

1. I am the Office Supervisor/Traffic Manager of DZRC-AM;


2. Sometime in May, 1990 Simeon Jun Mapa went to my office inside our radio station. He asked me if he could be
accomodated as Radio Reporter of DZRC, as he was dismissed from DZGB. I referred him to Larry Brocales, our
Station Manager then;
3. Larry Brocales told Jun Mapa that he cannot be accomodated because he has no clearance from DZGB. Jun Mapa,
almost teary eyed, pleaded to Larry Brocales that he be accomodated as volunteer reporter, that is, he will not receive
any salary but that he intimated that he be allowed to look for sponsors whose business establishment, for a fee, will
have to be mentioned after every report is made. Larry Brocales took pity on Jun Mapa and accomodated him;
4. Jun Mapa, just like the other volunteer reporters, was not obliged to render field reports, at a particular time and in a
particular program. They render report as they wish or see fit;
5. The management (DZRC) does not collect anything from the sponsors of Jun Mapa. They (sponsors) pay directly to
him;
6. Being the Office Supervisor, I know for a fact that Jun Mapa seldom renders report on the air. He has no assigned
program either. He was on and off the air, so to speak;
7. Finally, some time in September, 1991, Jun Mapa told me that he is quitting already because his sponsors were no
longer paying him of his monthly contract with them. (Underscoring supplied)(See Annex G, Petition
for Certiorari);

11. Subsequently, Mapa sent a letter dated October 7, 1991 to Ms. Diana C. Gozum, General Manager of petitioner FBN. In the
said letter, Mapa wrote and admitted that:

I am [sic] Mr. Simeon Mapa, Jr. respectfully request your good office to reconsider my previous application submitted last
March 1990 as a reporter of DZRC AM.

May I inform you that since the submission of such application I worked until September 6, 1991 for free services [sic]. Hoping
that Ill be given the chance to be recognized as a regular reporter.

With this, I respectfully wish to follow up my application for recognition.

May I also inform you that the case I have with my previous job with the other company has commenced.

Attached herewith is my resume.

I am once again submitting myself for an interview with your office at a time convenient to you.

Thank you.

(See Annex H, Petition for Certiorari);

12. Reacting to the letter mentioned in the immediately preceding paragraph, DZRC favorably acted upn the application of
Mapa and accepted him as a radio reporter on January 16, 1992;

13. On February 27, 1992, Mapa resigned as a radio reporter in order to run for an elective office in the May 1992 elections and
was paid all his salaries and benefits for the period of his employment commencing from January 16, 1992 until February 27,
1992;

14. Having no work to do and no employment in sight, Mapa filed a complaint against FBN-DZRC on August 1992, claiming
the payment of salaries, premium pay, holiday pay as well as 13th month pay for the period 28 February 1990 until January 16,
1992;

On October 13, 1993, Labor Arbiter Emeterio Ranola dismissed the complaint for lack of merit, finding that no employer-
employee relationship existed between Mapa and DZRC during the period March 11, 1990 to February 16, 1992.[9]

Findings of the NLRC

In holding that there was an employer-employee relationship, the NLRC set aside the labor arbiters findings:

In his appeal, complainant insists that there was an employer-employee relationship between him and the respondent. In support
of his contention, he cites the payroll for February 16 to 29, 1992, the ID card issued to him as employee and regular reporter by
the respondent: [sic] the program schedules of DZRC showing the regular program of the station indicating his name:[sic] the
affidavit of Antonio Llarena, program supervisor of DZRCM, stating that he [was] a regular reporter underhis supervision and
the list of reporting gadgets issued to regular reporter.
The existence of employer employee relationship is determined by the following elements, namely: 1) selection and
engagement of the employee; 2) the payment of wages; 3) the power of dismissal; and 4) the power to control employees
conduct although the latter is the most important element. (Rosario Brothers, Inc. vs. Ople, 131 SCRA 72)

Considering the totality of the evidence adduced by the parties, we are of the opinion that the complainant is a regular reporter
of the respondent. Firstly, the work of the complainant is being supervised by the program supervisor of the respondent;
secondly, the complainant uses the reporting gadgets of the respondent. Thirdly, he has no reporting gadgets of his own;
Fourthly, the program schedule is prepared by the respondent; and Lastly, he was paid salary for the period for the period from
February 16 to 29, 1992 and covered under the Social Security System. There is no showing in the record that his work from
February 16, 1992 was different from his work before the said period.[10]

The NLRC subsequently denied petitioners motion for reconsideration[11] on November 9, 1994.[12] Hence this petition.[13]

Issue

Petitioner alleges that Public Respondent NLRC committed grave abuse of discretion as follows:[14]
I

xxx in declaring Mapa as an employee of petitioner before January 16, 1992. The test of an employer-employee relationship
was erroneously applied to the facts of this case.

II

xxx in disregarding significant facts which clearly and convincingly show that the private respondent was not an employee of
the petitioner before 16 January 1992.

In the main, the issue in this case is whether private respondent was an employee of petitioner for the period March 11, 1990
to January 15, 1992.

The Courts Ruling

The petition is meritorious.

Main Issue:
Private Respondent Was Not an Employee During the Period in Controversy

As a rule, the NLRCs findings are accorded great respect, even finality, by this Court. This rule, however, is not without
qualification. This Court held in Jimenez v. NLRC:[15]

The review of labor cases elevated to us on certiorari is confined to questions of jurisdiction or grave abuse of discretion.[16] As
a rule, this Court does not review supposed errors in the decision of the NLRC which raise factual issues, because factual
finding of agencies exercising quasi-judicial functions are accorded not only respect but even finality, aside from the
consideration that the Court is essentially not a trier of facts. However, in the case at bar, a review of the records thereof with an
assessment of the facts is necessary since the factual findings of the NLRC and the labor arbiter are at odds with each other.[17]

In the present case, a review of the factual findings of the public respondent is in order, for said findings differ from those
of the labor arbiter.[18] Worse the facts alleged by the private respondent and relied upon by the public respondent do not prove
an employer-employee relationship.[19] In this light, we will review and overrule the findings of the NLRC.
The following are generally considered in the determination of the existence of an employer-employee relationship: (1) the
manner of selection and engagement, (2) the payment of wages, (3) the presence or absence of the power of dismissal, and (4) the
presence or absence of the power of control; of these four, the last one is the most important.[20]
Engagement and Payment of Wages
Let us consider the circumstances of the private respondents engagement in DZRC before January 16, 1992. Petitioner did
not act on his application for employment as a radio reporter because private respondent admittedly failed to present a clearance
from his former employer. Nevertheless, private respondent volunteered his services, knowing that he would not be paid wages,
and that he had to rely on financial sponsorships of business establishments that would be advertised in his reports. In other words,
private respondent willingly acted as a volunteer reporter, fully cognizant that he was not an employee and that he would not
receive any compensation directly from the petitioner, but only from his own advertising sponsors.
The nature of private respondents engagement is evident from the affidavit of Allan Almario and Elmer Anonuevo who
served under identical circumstances. The two affirmed the following:

1. We personally know Simeon Jun Mapa, a volunteer reporter at DZRC just like us;

2. As a volunteer reporters we know [sic] that we will not receive any salary or allowance from DZRC because our work was
purely voluntary;

3. As incentive for us, the management of DZRC allowed us to get our own sponsors whose business establishments we
mention every after [sic] field report was made by us;

xxx xxx xxx

4. During our stint as volunteer reporters we had several sponsors each who paid us P300.00 per month.[21]

The above statement is corroborated by Carlito Baylon, one of private respondents advertising sponsors. In his affidavit
dated June 10, 1993, he averred:

2. I personally know Simeon Jun Mapa.

Sometime in May, 1990, he went to me and asked if I could be one of his sponsors because he was accomodated by DZRC as
volunteer reporter. He explained to me that, he will not be receiving any salary from DZRC[,] hence, he was soliciting my
support;

3. Taking pity on him, I agreed to be one of his sponsors. The condition was, I will have to pay him P300.00/month. In
exchange thereto, he will have to mention the name of my restaurant everytime he renders a report on the air;

4. My sponsorship lasted for about five (5) months after which I discontinued it when I rarely heard Jun Mapa in DZRC
program.[22]

Indeed, private respondent himself admitted tat he worked under the said circumstances. The bio-data sheet signed by Mapa
himself, in which he acknowledged that he was not an employee, states in part:

Work experiences:

DWGW . Reporter/Newscaster 1970-1980

DZGB . Reporter 1983-1990

DZRC . Reporter 1990-1991

for free not recognized due to no appointment.[23]


(Underscoring supplied.)
In his letter dated October 7, 1991, which he sent to the general manager of Filipinas Broadcasting Network (owner of
DZRC), Mapa again acknowledged in the following words that he was not an employee:

I am [sic] Mr. Simeon Mapa, Jr. respectfully request your good office to reconsider my previous application submitted last
March 1990 as a reporter of DZRC AM.

May I inform you that since the submission of such application I worked until September 6, 1991 for free of services [sic].
Hoping that Ill be given the chance to be recognized as a regular reporter.

With this, I respectfully wish to follow up my application for recognition. (Italics supplied.)

There is no indication that these two circumstances were made under duress. Indeed, private respondent himself did not
dispute their voluntariness or veracity. It is clear that he rendered services knowing that he was not an employee. Aware that he
would not be paid wages, he described himself as a volunteer reporter who was, as evident from his letter, hoping for the chance
to be recognized as a regular reporter. In fact, petitioner acted favorably on this letter and accepted his application as an employee
effective on January 16, 1992.

Power of Dismissal

Likewise, the evidence on record shows that petitioner did not exercise the power to dismiss private respondent during the
period in question. in September 1991, Private Respondent Mapa ceased acting as a volunteer reporter, not because he was fired
, but because he stopped sending his reports. Ignacio Casi, Office Supervisor of DZRC, declared in his affidavit that Mapa told
him that he [was] quitting already because his sponsors were no longer paying him of [sic] his monthly contract with them. Mapa
did not controvert this statement. In fact, his aforesaid letter of October 17, 1991 expressed his hope of being given the chance to
be recognized as a regular reporter. Private respondents attitude in said letter is inconsistent with the notion that he had been
dismissed.

Mapa Was Not Subject to Control of Petitioner

The most crucial test the control test demonstrates all too clearly the absence of an employee-employee relationship. No one
at the DZRC had the power to regulate or control private respondents activities or inputs. Unlike the regular reporters, he was not
subject to any supervision by petitioner or its officials. Regular reporters are required by the petitioner to adhere to a program
schedule which delineates the time when they are to render their reports, as well as the topic to be reported upon. The substance
of their reports are [sic] oftentimes screened by the station prior to [their] actual airing. In contrast, volunteer reporters are never
given such a program schedule but are merely advised to inform the station of the reports they would make from time to time.[24]
Indeed, DZRC, the petitioners radio station , exercised no editorial rights over his reports. He had no fixed day or time for
making his reports; in fact, he was not required to report anything at all. Whether he would air anything depended entirely on him
and his convenience.
The absence of petitioners control over private respondent is manifest from the sworn statement of the traffic manager of
petitioner, Ignacio Casi, who deposed in part:
xxx xxx xxx

4. Jun Mapa, just like the other volunteer reporters, was not obliged to render field reports, at a particular time and in a
particular program. They render report as they wish or see fit;

5. The management (DZRC) does not collect anything from the sponsors of Jun Mapa. They (sponsors) pay directly to him;

6. Being the Office Supervisor, I know for a fact that Jun Mapa seldom renders report on the air. He has no assigned program
either. He was on and off the air, so to speak;

7. Finally, some time in September, 1991, Jun Mapa told me that he is quitting already because his sponsors were no longer
paying him of his monthly contract with them.
In Encyclopedia Britannica (Philippines) Inc., v. NLRC,[25] we reiterated that there could be no employer-employee
relationship where the element of control is absent; where a person who works for another does so more or less at his own pleasure
and is not subject to definite hours or conditions of work[;] and in turn is compensated according to the result of his efforts and
not the amount thereof, we should not find that the relationship of employer-employee exists. In the present case, private
respondent worked at his own pleasure and [was] not subject to definite hours or conditions of work.

Evidence Found by NLRC Not Applicable

In its two-page[26] holding that there was an employer-employee relationship, the NLRC relied on the following:

(1) the payroll for February 16 to 29, 1992,

(2) the ID card issued to him as employee and regular reporter by the respondent,

(3) the program schedules of DZRC showing the regular program of the station indicating his name:

(4) the affidavit of Antonio Llarena, program supervisor of DZRC, stating that he [was] under his supervision, and

(5) the list of reporting gadgets issued to a regular reporter.

Other than the items enumerated above, no other document was considered by the NLRC. In other words, its conclusion was
based solely on these alleged pieces of evidence. It clearly committed grave abuse of discretion in its factual findings, because all
the above documents relate to the period January 16, 1992 to February 28, 1992 and not to the period March 11, 1990 to January
15, 1992 which are inclusive dates in controversy.
The payroll[27] from February 16, 1992 to February 27, 1992 does not demonstrate that private respondent was an employee
prior to said period. Lest it be forgotten, the question in this case pertains to the status of private respondent from March 11, 1990
to January 15, 1992. The said payroll may prove that private respondent was an employee during said days in February 1992, but
not for the period which is the subject of the present controversy.
Furthermore, neither the identification cards nor the SSS number printed at the back thereof indicate the date of issuance.
Likewise, the SSS number does not show that he was a member during the period in controversy; much less, that he became so
by reason of his employment with petitioner.
Similarly inapplicable is the program schedule[28] which allegedly showed the regular program of the station and indicated
the name of private respondent as an employee. The document is a mere photocopy of a typewritten schedule. There is absolutely
no indicium of its authenticity. Moreover, it is undated; hence, it does not indicate whether such schedule pertained to the period
in disupte, that is, March 11, 1990 to January 15, 1992. Worse, the heading thereof was entitled Radio DZRC
Programming Proposal. [italics supplied] A proposal is put forth merely for consideration and acceptance.[29] It cannot, by itself,
prove that such program was implemented and that private respondent acted as an employee of petitioner.
Neither does the list of returned gadgets support the conclusion of the NLRC. It must be stressed that such gadgets were
essential to enable the private respondent to access the specific radio frequency and fcailities of the radio station. Being exclusive
properties of the radio station, such gadgets could not have been purchased, as they were not commercially available. In any event,
the list of returned gadgets was dated February 27, 1997 -- again, a date not in controversy. Such document, by itself, does not
prove that private respondent was an employee from March 20, 1990 to January 15, 1992.
The affidavit of Antonio Llarena[30], an employee of DZRC, stating that the private respondent was under his supervision, is
vague, even misleading; it declaring merely that Llarena was in charge of said respondent. Such language could not be construed
to mean that he exercised supervision and control over private respondent.
Indubitably, the NLRC based its findings of employer-employee relationship from the circumstances attendant when private
respondent was already a regular employee. Uncontroverted is the statement that the private respondent was a regular employee
from January 16, 1992 to February 28, 1992, for which period he received all employee benefits. But such period, it must be
stressed again, is not covered by private respondents complaint.
In sum, the evidence, which Public Respondent NLRC relies upon, does not justify the reversal of the labor arbiters ruling
which, in turn, we find amply supported by the records. Clearly, private respondent was not an employee during the period in
question.
WHEREFORE, the petition is hereby GRANTED and the assailed Decision and Resolution are hereby SET ASIDE. The
Order of the Labor Arbiter dated October 13, 1993 dismissing the case for lack of merit is hereby REINSTATED. No costs.
SO ORDERED.
Davide,Jr., (Chairman), Bellosillo, Vitug, and Quisumbing, JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. L-32245 May 25, 1979

DY KEH BENG, petitioner,


vs.
INTERNATIONAL LABOR and MARINE UNION OF THE PHILIPPINES, ET AL., respondents.

A. M Sikat for petitioner.

D. A. Hernandez for respondents.

DE CASTRO, J.:

Petitioner Dy Keh Beng seeks a review by certiorari of the decision of the Court of Industrial Relations dated March 23, 1970 in
Case No. 3019-ULP and the Court's Resolution en banc of June 10, 1970 affirming said decision. The Court of Industrial
Relations in that case found Dy Keh Beng guilty of the unfair labor practice acts alleged and order him to

reinstate Carlos Solano and Ricardo Tudla to their former jobs with backwages from their respective dates of
dismissal until fully reinstated without loss to their right of seniority and of such other rights already acquired
by them and/or allowed by law. 1

Now, Dy Keh Beng assigns the following errors 2 as having been committed by the Court of Industrial Relations:

RESPONDENT COURT ERRED IN FINDING THAT RESPONDENTS SOLANO AND TUDLA WERE
EMPLOYEES OF PETITIONERS.

II

RESPONDENT COURT ERRED IN FINDING THAT RESPONDENTS SOLANO AND TUDLA WERE
DISMISSED FROM THEIR EMPLOYMENT BY PETITIONER.

III

RESPONDENT COURT ERRED IN FINDING THAT THE TESTIMONIES ADDUCED BY


COMPLAINANT ARE CONVINCING AND DISCLOSES (SIC) A PATTERN OF DISCRIMINATION BY
THE PETITIONER HEREIN.

IV

RESPONDENT COURT ERRED IN DECLARING PETITIONER GUILTY OF UNFAIR LABOR


PRACTICE ACTS AS ALLEGED AND DESCRIBED IN THE COMPLAINT.

RESPONDENT COURT ERRED IN PETITIONER TO REINSTATE RESPONDENTS TO THEIR


FORMER JOBS WITH BACKWAGES FROM THEIR RESPECTIVE DATES OF DISMISSALS UNTIL
FINALLY REINSTATED WITHOUT LOSS TO THEIR RIGHT OF SENIORITY AND OF SUCH OTHER
RIGHTS ALREADY ACQUIRED BY THEM AND/OR ALLOWED BY LAW.

The facts as found by the Hearing Examiner are as follows:

A charge of unfair labor practice was filed against Dy Keh Beng, proprietor of a basket factory, for discriminatory acts within
the meaning of Section 4(a), sub-paragraph (1) and (4). Republic Act No. 875, 3 by dismissing on September 28 and 29, 1960,
respectively, Carlos N. Solano and Ricardo Tudla for their union activities. After preliminary investigation was conducted, a
case was filed in the Court of Industrial Relations for in behalf of the International Labor and Marine Union of the Philippines
and two of its members, Solano and Tudla In his answer, Dy Keh Beng contended that he did not know Tudla and that Solano
was not his employee because the latter came to the establishment only when there was work which he did on pakiaw basis,
each piece of work being done under a separate contract. Moreover, Dy Keh Beng countered with a special defense of simple
extortion committed by the head of the labor union, Bienvenido Onayan.

After trial, the Hearing Examiner prepared a report which was subsequently adopted in toto by the Court of Industrial Relations.
An employee-employer relationship was found to have existed between Dy Keh Beng and complainants Tudla and Solano,
although Solano was admitted to have worked on piece basis.4 The issue therefore centered on whether there existed an
employee employer relation between petitioner Dy Keh Beng and the respondents Solano and Tudla .

According to the Hearing Examiner, the evidence for the complainant Union tended to show that Solano and Tudla became
employees of Dy Keh Beng from May 2, 1953 and July 15, 1955, 5 respectively, and that except in the event of illness, their
work with the establishment was continuous although their services were compensated on piece basis. Evidence likewise
showed that at times the establishment had eight (8) workers and never less than five (5); including the complainants, and that
complainants used to receive ?5.00 a day. sometimes less. 6

According to Dy Keh Beng, however, Solano was not his employee for the following reasons:

(1) Solano never stayed long enought at Dy's establishment;

(2) Solano had to leave as soon as he was through with the

(3) order given him by Dy;

(4) When there were no orders needing his services there was nothing for him to do;

(5) When orders came to the shop that his regular workers could not fill it was then that Dy went to his address
in Caloocan and fetched him for these orders; and

(6) Solano's work with Dy's establishment was not continuous. , 7

According to petitioner, these facts show that respondents Solano and Tudla are only piece workers, not employees under
Republic Act 875, where an employee 8 is referred to as

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

while an employer 9

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

Petitioner really anchors his contention of the non-existence of employee-employer relationship on the control test. He points to
the case of Madrigal Shipping Co., Inc. v. Nieves Baens del Rosario, et al., L-13130, October 31, 1959, where the Court ruled
that:
The test ... of the existence of employee and employer relationship is whether there is an understanding
between the parties that one is to render personal services to or for the benefit of the other and recognition by
them of the right of one to order and control the other in the performance of the work and to direct the manner
and method of its performance.

Petitioner contends that the private respondents "did not meet the control test in the fight of the ... definition of the terms
employer and employee, because there was no evidence to show that petitioner had the right to direct the manner and method of
respondent's work. 10 Moreover, it is argued that petitioner's evidence showed that "Solano worked on a pakiaw basis" and that
he stayed in the establishment only when there was work.

While this Court upholds the control test 11 under which an employer-employee relationship exists "where the person for whom
the services are performed reserves a right to control not only the end to be achieved but also the means to be used in reaching
such end, " it finds no merit with petitioner's arguments as stated above. It should be borne in mind that the control test calls
merely for the existence of the right to control the manner of doing the work, not the actual exercise of the right. 12 Considering
the finding by the Hearing Examiner that the establishment of Dy Keh Beng is "engaged in the manufacture of baskets known
as kaing, 13 it is natural to expect that those working under Dy would have to observe, among others, Dy's requirements of size
and quality of the kaing. Some control would necessarily be exercised by Dy as the making of the kaing would be subject to
Dy's specifications. Parenthetically, since the work on the baskets is done at Dy's establishments, it can be inferred that the
proprietor Dy could easily exercise control on the men he employed.

As to the contention that Solano was not an employee because he worked on piece basis, this Court agrees with the Hearing
Examiner that

circumstances must be construed to determine indeed if payment by the piece is just a method of compensation
and does not define the essence of the relation. Units of time ... and units of work are in establishments like
respondent (sic) just yardsticks whereby to determine rate of compensation, to be applied whenever agreed
upon. We cannot construe payment by the piece where work is done in such an establishment so as to put the
worker completely at liberty to turn him out and take in another at pleasure.

At this juncture, it is worthy to note that Justice Perfecto, concurring with Chief Justice Ricardo Paras who penned the decision
in "Sunrise Coconut Products Co. v. Court of Industrial Relations" (83 Phil..518, 523), opined that

judicial notice of the fact that the so-called "pakyaw" system mentioned in this case as generally practiced in
our country, is, in fact, a labor contract -between employers and employees, between capitalists and laborers.

Insofar as the other assignments of errors are concerned, there is no showing that the Court of Industrial Relations abused its
discretion when it concluded that the findings of fact made by the Hearing Examiner were supported by evidence on the record.
Section 6, Republic Act 875 provides that in unfair labor practice cases, the factual findings of the Court of Industrial Relations
are conclusive on the Supreme Court, if supported by substantial evidence. This provision has been put into effect in a long line
of decisions where the Supreme Court did not reverse the findings of fact of the Court of Industrial Relations when they were
supported by substantial evidence. 14

Nevertheless, considering that about eighteen (18) years have already elapsed from the time the complainants were
dismissed, 15 and that the decision being appealed ordered the payment of backwages to the employees from their respective
dates of dismissal until finally reinstated, it is fitting to apply in this connection the formula for backwages worked out by
Justice Claudio Teehankee in "cases not terminated sooner." 16 The formula cans for fixing the award of backwages without
qualification and deduction to three years, "subject to deduction where there are mitigating circumstances in favor of the
employer but subject to increase by way of exemplary damages where there are aggravating circumstances. 17 Considering there
are no such circumstances in this case, there is no reason why the Court should not apply the abovementioned formula in this
instance.

WHEREFORE; the award of backwages granted by the Court of Industrial Relations is herein modified to an award of
backwages for three years without qualification and deduction at the respective rates of compensation the employees concerned
were receiving at the time of dismissal. The execution of this award is entrusted to the National Labor Relations Commission.
Costs against petitioner.

SO ORDERED.
THIRD DIVISION

[G.R. No. 102199. January 28, 1997]

AFP MUTUAL BENEFIT ASSOCIATION, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and
EUTIQUIO BUSTAMANTE, respondents.

DECISION
PANGANIBAN, J.:

The determination of the proper forum is crucial because the filing of the petition or complaint in the wrong court or tribunal
is fatal, even for a patently meritorious claim. More specifically, labor arbiters and the National Labor Relations Commission
have no jurisdiction to entertain and rule on money claims where no employer-employee relations is involved. Thus, any such
award rendered without jurisdiction is a nullity.
This petition for certiorari under Rule 65, Rules of Court seeks to annul the Resolution[1] of the National Labor Relations
Commission, promulgated September 27, 1991, in NLRC-NCR Case No. 00-02-01196-90, entitled "Eutiquio Bustamante vs. AFP
Mutual Benefit Association, Inc.," affirming the decision of the labor arbiter which ordered payment of the amount of P319,796.00
as insurance commissions to private respondent.

The Antecedent Facts

The facts are simple. Private respondent Eutiquio Bustamante had been an insurance underwriter of petitioner AFP Mutual
Benefit Association, Inc. since 1975. The Sales Agent's Agreement between them provided:[2]

"B. Duties and Obligations:

1. During the lifetime of this Agreement, the SALES AGENT (private respondent) shall solicit exclusively for AFPMBAI
(petitioner), and shall be bound by the latter's policies, memo circulars, rules and regulations which it may from time to time,
revise, modify or cancel to serve its business interests.

2. The SALES AGENT shall confine his business activities for AFPMBAI while inside any military camp, installation or
residence of military personnel. He is free to solicit in the area for which he/she is licensed and as authorized, provided
however, that AFPMBAI may from time to time, assign him a specific area of responsibility and a production quota on a case to
case basis.lex

xxxxxxxxx

C. Commission

1. The SALES AGENT shall be entitled to the commission due for all premiums actually due and received by AFPMBAI out of
life insurance policies solicited and obtained by the SALES AGENT at the rates set forth in the applicant's commission
schedules hereto attached.

xxxxxxxxx

D. General Provisions

1. There shall be no employer-employee relationship between the parties, the SALES AGENT being hereby deemed an
independent contractor."
As compensation, he received commissions based on the following percentages of the premiums paid:[3]

"30% of premium paid within the first year;

10% of premium paid with the second year;

5% of the premium paid during the third year;

3% of the premium paid during the fourth year; and

1% of the premium paid during the fifth year up-to the tenth year.

On July 5, 1989, petitioner dismissed private respondent for misrepresentation and for simultaneously selling insurance for
another life insurance company in violation of said agreement.
At the time of his dismissal, private respondent was entitled to accrued commissions equivalent to twenty four (24) months
per the Sales Agent Agreement and as stated in the account summary dated July 5, 1989, approved by Retired Brig. Gen. Rosalino
Alquiza, president of petitioner-company. Said summary showed that private respondent had a total commission receivable
of P438,835.00, of which only P78,039.89 had been paid to him.
Private respondent wrote petitioner seeking the release of his commissions for said 24 months. Petitioner, through Marketing
Manager Juan Concepcion, replied that he was entitled to only P75,000.00 to P100,000.00. Hence, believing Concepcion's
computations, private respondent signed a quitclaim in favor of petitioner.
Sometime in October 1989, private respondent was informed that his check was ready for release. In collecting his check,
he discovered from a document (account summary) attached to said check that his total commissions for the 24 months actually
amounted to P354,796.09. Said document stated:[4]

"6. The total receivable for Mr. Bustamante out of the renewals and old business generated since 1983 grosses P438,835.00 less
his outstanding obligation in the amount of P78,039.89 as of June 30, 1989, total expected commission would amount
to P354,796.09. From that figure at a 15% compromise settlement this would mean P53,219.41 due him to settle his claim."

Private respondent, however, was paid only the amount of P35,000.00.


On November 23, 1989, private respondent filed a complaint with the Office of the Insurance Commissioner praying for the
payment of the correct amount of his commission. Atty. German C. Alejandria, Chief of the Public Assistance and Information
Division, Office of the Insurance Commissioner, advised private respondent that it was the Department of Labor and Employment
that had jurisdiction over his complaint.
On February 26, 1990, private respondent filed his complaint with the Department of Labor claiming: (1) commission for 2
years from termination of employment equivalent to 30% of premiums remitted during employment; (2) P354,796.00 as
commission earned from renewals and old business generated since 1983; (3) P100,000.00 as moral damages; and
(4) P100,000.00 as exemplary damages.
After submission of position papers, Labor Arbiter Jose G. de Vera rendered his decision, dated August 24, 1990, the
dispositive portion of which reads:[5]

"WHEREFORE, all the foregoing premises being considered, judgment is hereby rendered declaring the dismissal of the
complainant as just and valid, and consequently, his claim for separation pay is denied. On his money claim, the respondent
company is hereby ordered to pay complainant the sum of P319,796.00 plus attorney's fees in the amount of P31,976.60.

All other claims of the complainant are dismissed for want of merit."

The labor arbiter relied on the Sales Agent's Agreement proviso that petitioner could assign private respondent a specific
area of responsibility and a production quota, and read it as signaling the existence of employer-employee relationship between
petitioner and private respondent.
On appeal, the Second Division[6] of the respondent Commission affirmed the decision of the Labor Arbiter. In the assailed
Resolution, respondent Commission found no reason to disturb said ruling of the labor arbiter and ruled:[7]
"WHEREFORE, in view of the foregoing considerations, the subject appeal should be as it is hereby, denied and the decision
appealed from affirmed.

SO ORDERED."

Hence, this petition.

The Issue

Petitioner contends that respondent Commission committed grave abuse of discretion in ruling that the labor arbiter had
jurisdiction over this case. At the heart of the controversy is the issue of whether there existed an employer-employee relationship
between petitioner and private respondent.
Petitioner argues that, despite provisions B(1) and (2) of the Sales Agent's Agreement, there is no employer-employee
relationship between private respondent and itself. Hence, respondent commission gravely abused its discretion when it held that
the labor arbiter had jurisdiction over the case.

The Court's Ruling

The petition is meritorious.

First Issue: Not All That Glitters Is Control

Well-settled is the doctrine that the existence of an employer-employee relationship is ultimately a question of fact and that
the findings thereon by the labor arbiter and the National Labor Relations Commission shall be accorded not only respect but
even finality when supported by substantial evidence.[8] The determinative factor in such finality is the presence of substantial
evidence to support said finding, otherwise, such factual findings cannot bind this Court.
Respondent Commission concurred with the labor arbiter's findings that:[9]

"x x x The complainant's job as sales insurance agent is usually necessary and desirable in the usual business of the respondent
company. Under the Sales Agents Agreement, the complainant was required to solicit exclusively for the respondent company,
'and he was bound by the company policies, memo circulars, rules and regulations which were issued from time to time. By
such requirement to follow strictly management policies, orders, circulars, rules and regulations, it only shows that the
respondent had control or reserved the right to control the complainant's work as solicitor. Complainant was not an independent
contractor as he did not carry on an independent business other than that of the company's x x x."

To this, respondent Commission added that the Sales Agent's Agreement specifically provided that petitioner may assign
private respondent a specific area of responsibility and a production quota. From there, it concluded that apparently there is that
exercise of control by the employer which is the most important element in determining employer-employee relationship.[10]
We hold, however, that respondent Commission misappreciated the facts of the case. Time and again, the Court has applied
the "four-fold" test in determining the existence of employer-employee relationship. This test considers the following
elements: (1) the power to hire; (2) the payment of wages; (3) the power to dismiss; and (4) the power to control, the last being
the most important element.[11]
The difficulty lies in correctly assessing if certain factors or elements properly indicate the presence of control. Anent the
issue of exclusivity in the case at bar, the fact that private respondent was required to solicit business exclusively for petitioner
could hardly be considered as control in labor jurisprudence. Under Memo Circulars No. 2-81[12] and 2-85, dated December 17,
1981 and August 7, 1985, respectively, issued by the Insurance Commissioner, insurance agents are barred from serving more
than one insurance company, in order to protect the public and to enable insurance companies to exercise exclusive supervision
over their agents in their solicitation work. Thus, the exclusivity restriction clearly springs from a regulation issued by the
Insurance Commission, and not from an intention by petitioner to establish control over the method and manner by which private
respondent shall accomplish his work. This feature is not meant to change the nature of the relationship between the parties, nor
does it necessarily imbue such relationship with the quality of control envisioned by the law.
So too, the fact that private respondent was bound by company policies, memo/circulars, rules and regulations issued from
time to time is also not indicative of control. In its Reply to Complainant's Position Paper,[13] petitioner alleges that the policies,
memo/circulars, and rules and regulations referred to in provision B(1) of the Sales Agent's Agreement are only those pertaining
to payment of agents' accountabilities, availment by sales agents of cash advances for sorties, circulars on incentives and awards
to be given based on production, and other matters concerning the selling of insurance, in accordance with the rules promulgated
by the Insurance Commission. According to the petitioner, insurance solicitors are never affected or covered by the rules and
regulations concerning employee conduct and penalties for violations thereof, work standards, performance appraisals, merit
increases, promotions, absenteeism/attendance, leaves of absence, management-union matters, employee benefits and the
like. Since private respondent failed to rebut these allegations, the same are deemed admitted, or at least proven, thereby leaving
nothing to support the respondent Commission's conclusion that the foregoing elements signified an employment relationship
between the parties.
In regard to the territorial assignments given to sales agents, this too cannot be held as indicative of the exercise of control
over an employee. First of all, the place of work in the business of soliciting insurance does not figure prominently in the
equation. And more significantly, private respondent failed to rebut petitioner's allegation that it had never issued him any
territorial assignment at all. Obviously, this Court cannot draw the same inference from this feature as did the respondent
Commission.
To restate, the significant factor in determining the relationship of the parties is the presence or absence of supervisory
authority to control the method and the details of performance of the service being rendered, and the degree to which the principal
may intervene to exercise such control. The presence of such power of control is indicative of an employment relationship, while
absence thereof is indicative of independent contractorship. In other words, the test to determine the existence of independent
contractorship is whether one claiming to be an independent contractor has contracted to do the work according to his own
methods and without being subject to the control of the employer except only as to the result of the work.[14] Such is exactly the
nature of the relationship between petitioner and private respondent.
Further, not every form of control that a party reserves to himself over the conduct of the other party in relation to the services
being rendered may be accorded the effect of establishing an employer-employee relationship. The facts of this case fall squarely
with the case of Insular Life Assurance Co., Ltd. vs. NLRC. In said case, we held that:

"Logically, the line should be drawn between rules that merely serve as guidelines towards the achievement of the mutually
desired result without dictating the means or methods to be employed in attaining it, and those that control or fix the
methodology and bind or restrict the party hired to the use of such means. The first, which aim only to promote the result, create
no employer-employee relationship unlike the second, which address both the result and the means used to achieve it. The
distinction acquires particular relevance in the case of an enterprise affected with public interest, as is the business of insurance,
and is on that account subject to regulation by the State with respect, not only to the relations between insurer and insured but
also to the internal affairs of the insurance company. Rules and regulations governing the conduct of the business are provided
for in the Insurance Code and enforced by the Insurance Commissioner. It is, therefore, usual and expected for an insurance
company to promulgate a set of rules to guide its commission agents in selling its policies that they may not run afoul of the law
and what it requires or prohibits. xxxx None of these really invades the agent's contractual prerogative to adopt his own selling
methods or to sell insurance at his own time and convenience, hence cannot justifiably be said to establish an employer-
employee relationship between him and the company."[15]

Private respondent's contention that he was petitioner's employee is belied by the fact that he was free to sell insurance at
any time as he was not subject to definite hours or conditions of work and in turn was compensated according to the result of his
efforts. By the nature of the business of soliciting insurance, agents are normally left free to devise ways and means of persuading
people to take out insurance. There is no prohibition, as contended by petitioner, for private respondent to work for as long as he
does not violate the Insurance Code. As petitioner explains:

"(Private respondent) was free to solicit life insurance anywhere he wanted and he had free and unfettered time to pursue his
business. He did not have to punch in and punch out the bundy clock as he was not required to report to the (petitioner's) office
regularly. He was not covered by any employee policies or regulations and not subject to the disciplinary action of management
on the basis of the Employee Code of Conduct. He could go out and sell insurance at his own chosen time. He was entirely left
to his own choices of areas or territories, with no definite, much less supervised, time schedule.

(Private respondent) had complete control over his occupation and (petitioner) did not exercise any right of Control and
Supervision over his performance except as to the payment of commission the amount of which entirely depends on the sole
efforts of (private respondent). He was free to engage in other occupation or practice other profession for as long as he did not
commit any violation of the ethical standards prescribed in the Sales Agent's Agreement."[16]

Although petitioner could have, theoretically, disapproved any of private respondent's transactions, what could be
disapproved was only the result of the work, and not the means by which it was accomplished.
The "control" which the above factors indicate did not sum up to the power to control private respondent's conduct in and
mode of soliciting insurance. On the contrary, they clearly indicate that the juridical element of control had been absent in this
situation. Thus, the Court is constrained to rule that no employment relationship had ever existed between the parties.
Second Issue: Jurisdiction of Respondent Commission & Labor Arbiter

Under the contract invoked, private respondent had never been petitioner's employee, but only its commission agent. As an
independent contractor, his claim for unpaid commission should have been litigated in an ordinary civil action.[17]
The jurisdiction of labor arbiters and respondent Commission is set forth in Article 217 of the Labor Code.[18] The unifying
element running through paragraphs (1) - (6) of said provision is the consistent reference to cases or disputes arising out of or in
connection with an employer-employee relationship. Prior to its amendment by Batas Pambansa Blg. 227 on June 1, 1982, this
point was clear as the article included "all other cases arising from employer-employee relation unless expressly excluded by this
Code."[19] Without this critical element of employment relationship, the labor arbiter and respondent Commission can never
acquire jurisdiction over a dispute. As in the case at bar. It was serious error on the part of the labor arbiter to have assumed
jurisdiction and adjudicated the claim. Likewise, the respondent Commission's affirmance thereof.
Such lack of jurisdiction of a court or tribunal may be raised at any stage of the proceedings, even on appeal. The doctrine
of estoppel cannot be properly invoked by respondent Commission to cure this fatal defect as it cannot confer jurisdiction upon a
tribunal that to begin with, was bereft of jurisdiction over a cause of action.[20] Moreover, in the proceedings below, petitioner
consistently challenged the jurisdiction of the labor arbiter [21] and respondent Commission.[22]
It remains a basic fact in law that the choice of the proper forum is crucial as the decision of a court or tribunal without
jurisdiction is a total nullity.[23] A void judgment for want of jurisdiction is no judgment at all. It cannot be the source of any right
nor the creator of any obligation. All acts performed pursuant to it and all claims emanating from it have no legal effect. Hence,
it can never become final. "x x x (I)t may be said to be a lawless thing which can be treated as an outlaw and slain at sight, or
ignored wherever and whenever it exhibits its head."[24]
The way things stand, it becomes unnecessary to consider the merits of private respondent's claim for unpaid commission. Be
that as it may, this ruling is without prejudice to private respondent's right to file a suit for collection of unpaid commissions
against petitioner with the proper forum and within the proper period.
WHEREFORE, the petition is hereby GRANTED, and the assailed Resolution is hereby SET ASIDE.
SO ORDERED.
Narvasa, C.J., (Chairman), Davide, Jr., Melo, and Francisco, JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No. L-72654-61 January 22, 1990

ALIPIO R. RUGA, JOSE PARMA, ELADIO CALDERON, LAURENTE BAUTU, JAIME BARBIN, NICANOR
FRANCISCO, PHILIP CERVANTES and ELEUTERIO BARBIN, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and DE GUZMAN FISHING ENTERPRISES and/or ARSENIO
DE GUZMAN, respondents.

J.C. Espinas & Associates for petitioners.


Tomas A. Reyes for private respondent.

FERNAN, C.J.:

The issue to be resolved in the instant case is whether or not the fishermen-crew members of the trawl fishing vessel 7/B
Sandyman II are employees of its owner-operator, De Guzman Fishing Enterprises, and if so, whether or not they were illegally
dismissed from their employment.

Records show that the petitioners were the fishermen-crew members of 7/B Sandyman II, one of several fishing vessels owned
and operated by private respondent De Guzman Fishing Enterprises which is primarily engaged in the fishing business with port
and office at Camaligan, Camarines Sur. Petitioners rendered service aboard said fishing vessel in various capacities, as
follows: Alipio Ruga and Jose Parma patron/pilot; Eladio Calderon, chief engineer; Laurente Bautu, second engineer; Jaime
Barbin, master fisherman; Nicanor Francisco, second fisherman; Philip Cervantes and Eleuterio Barbin, fishermen.

For services rendered in the conduct of private respondent's regular business of "trawl" fishing, petitioners were paid on
percentage commission basis in cash by one Mrs. Pilar de Guzman, cashier of private respondent. As agreed upon, they
received thirteen percent (13%) of the proceeds of the sale of the fish-catch if the total proceeds exceeded the cost of crude oil
consumed during the fishing trip, otherwise, they received ten percent (10%) of the total proceeds of the sale. The patron/pilot,
chief engineer and master fisherman received a minimum income of P350.00 per week while the assistant engineer, second
fisherman, and fisherman-winchman received a minimum income of P260.00 per week. 1

On September 11, 1983 upon arrival at the fishing port, petitioners were told by Jorge de Guzman, president of private
respondent, to proceed to the police station at Camaligan, Camarines Sur, for investigation on the report that they sold some of
their fish-catch at midsea to the prejudice of private respondent. Petitioners denied the charge claiming that the same was a
countermove to their having formed a labor union and becoming members of Defender of Industrial Agricultural Labor
Organizations and General Workers Union (DIALOGWU) on September 3, 1983.

During the investigation, no witnesses were presented to prove the charge against petitioners, and no criminal charges were
formally filed against them. Notwithstanding, private respondent refused to allow petitioners to return to the fishing vessel to
resume their work on the same day, September 11, 1983.

On September 22, 1983, petitioners individually filed their complaints for illegal dismissal and non-payment of 13th month pay,
emergency cost of living allowance and service incentive pay, with the then Ministry (now Department) of Labor and
Employment, Regional Arbitration Branch No. V, Legaspi City, Albay, docketed as Cases Nos. 1449-83 to 1456-83. 2 They
uniformly contended that they were arbitrarily dismissed without being given ample time to look for a new job.

On October 24, 1983, private respondent, thru its operations manager, Conrado S. de Guzman, submitted its position paper
denying the employer-employee relationship between private respondent and petitioners on the theory that private respondent
and petitioners were engaged in a joint venture. 3
After the parties failed to reach an amicable settlement, the Labor Arbiter scheduled the case for joint hearing furnishing the
parties with notice and summons. On December 27, 1983, after two (2) previously scheduled joint hearings were postponed due
to the absence of private respondent, one of the petitioners herein, Alipio Ruga, the pilot/captain of the 7/B Sandyman II,
testified, among others, on the manner the fishing operations were conducted, mode of payment of compensation for services
rendered by the fishermen-crew members, and the circumstances leading to their dismissal. 4

On March 31, 1984, after the case was submitted for resolution, Labor Arbiter Asisclo S. Coralde rendered a joint
decision 5 dismissing all the complaints of petitioners on a finding that a "joint fishing venture" and not one of employer-
employee relationship existed between private respondent and petitioners.

From the adverse decision against them, petitioners appealed to the National Labor Relations Commission.

On May 30, 1985, the National Labor Relations Commission promulgated its resolution 6 affirming the decision of the labor
arbiter that a "joint fishing venture" relationship existed between private respondent and petitioners.

Hence, the instant petition.

Petitioners assail the ruling of the public respondent NLRC that what exists between private respondent and petitioners is a joint
venture arrangement and not an employer-employee relationship. To stress that there is an employer-employee relationship
between them and private respondent, petitioners invite attention to the following: that they were directly hired by private
respondent through its general manager, Arsenio de Guzman, and its operations manager, Conrado de Guzman; that, except for
Laurente Bautu, they had been employed by private respondent from 8 to 15 years in various capacities; that private respondent,
through its operations manager, supervised and controlled the conduct of their fishing operations as to the fixing of the schedule
of the fishing trips, the direction of the fishing vessel, the volume or number of tubes of the fish-catch the time to return to the
fishing port, which were communicated to the patron/pilot by radio (single side band); that they were not allowed to join other
outfits even the other vessels owned by private respondent without the permission of the operations manager; that they were
compensated on percentage commission basis of the gross sales of the fish-catch which were delivered to them in cash by
private respondent's cashier, Mrs. Pilar de Guzman; and that they have to follow company policies, rules and regulations
imposed on them by private respondent.

Disputing the finding of public respondent that a "joint fishing venture" exists between private respondent and petitioners,
petitioners claim that public respondent exceeded its jurisdiction and/or abused its discretion when it added facts not contained
in the records when it stated that the pilot-crew members do not receive compensation from the boat-owners except their share
in the catch produced by their own efforts; that public respondent ignored the evidence of petitioners that private respondent
controlled the fishing operations; that public respondent did not take into account established jurisprudence that the relationship
between the fishing boat operators and their crew is one of direct employer and employee.

Aside from seeking the dismissal of the petition on the ground that the decision of the labor arbiter is now final and executory
for failure of petitioners to file their appeal with the NLRC within 10 calendar days from receipt of said decision pursuant to the
doctrine laid down in Vir-Jen Shipping and Marine Services, Inc. vs. NLRC, 115 SCRA 347 (1982), the Solicitor General
claims that the ruling of public respondent that a "joint fishing venture" exists between private respondent and petitioners rests
on the resolution of the Social Security System (SSS) in a 1968 case, Case No. 708 (De Guzman Fishing Enterprises vs. SSS),
exempting De Guzman Fishing Enterprises, private respondent herein, from compulsory coverage of the SSS on the ground that
there is no employer-employee relations between the boat-owner and the fishermen-crew members following the doctrine laid
down in Pajarillo vs. SSS, 17 SCRA 1014 (1966). In applying to the case at bar the doctrine in Pajarillo vs. SSS, supra, that
there is no employer-employee relationship between the boat-owner and the pilot and crew members when the boat-owner
supplies the boat and equipment while the pilot and crew members contribute the corresponding labor and the parties get
specific shares in the catch for their respective contribution to the venture, the Solicitor General pointed out that the boat-owners
in the Pajarillo case, as in the case at bar, did not control the conduct of the fishing operations and the pilot and crew members
shared in the catch.

We rule in favor of petitioners.

Fundamental considerations of substantial justice persuade Us to decide the instant case on the merits rather than to dismiss it
on a mere technicality. In so doing, we exercise the prerogative accorded to this Court enunciated in Firestone Filipinas
Employees Association, et al. vs. Firestone Tire and Rubber Co. of the Philippines, Inc., 61 SCRA 340 (1974), thus "the well-
settled doctrine is that in labor cases before this Tribunal, no undue sympathy is to be accorded to any claim of a procedural
misstep, the idea being that its power be exercised according to justice and equity and substantial merits of the controversy."
Circumstances peculiar to some extent to fishermen-crew members of a fishing vessel regularly engaged in trawl fishing, as in
the case of petitioners herein, who spend one (1) whole week or more 7 in the open sea performing their job to earn a living to
support their families, convince Us to adopt a more liberal attitude in applying to petitioners the 10-calendar day rule in the
filing of appeals with the NLRC from the decision of the labor arbiter.

Records reveal that petitioners were informed of the labor arbiter's decision of March 31, 1984 only on July 3,1984 by their
non-lawyer representative during the arbitration proceedings, Jose Dialogo who received the decision eight (8) days earlier, or
on June 25, 1984. As adverted to earlier, the circumstances peculiar to petitioners' occupation as fishermen-crew members, who
during the pendency of the case understandably have to earn a living by seeking employment elsewhere, impress upon Us that
in the ordinary course of events, the information as to the adverse decision against them would not reach them within such time
frame as would allow them to faithfully abide by the 10-calendar day appeal period. This peculiar circumstance and the fact that
their representative is a non-lawyer provide equitable justification to conclude that there is substantial compliance with the ten-
calendar day rule of filing of appeals with the NLRC when petitioners filed on July 10, 1984, or seven (7) days after receipt of
the decision, their appeal with the NLRC through registered mail.

We have consistently ruled that in determining the existence of an employer-employee relationship, the elements that are
generally considered are the following (a) the selection and engagement of the employee; (b) the payment of wages; (c) the
power of dismissal; and (d) the employer's power to control the employee with respect to the means and methods by which the
work is to be accomplished. 8 The employment relation arises from contract of hire, express or implied. 9 In the absence of
hiring, no actual employer-employee relation could exist.

From the four (4) elements mentioned, We have generally relied on the so-called right-of-control test 10 where the person for
whom the services are performed reserves a right to control not only the end to be achieved but also the means to be used in
reaching such end. The test calls merely for the existence of the right to control the manner of doing the work, not the actual
exercise of the right. 11

The case of Pajarillo vs. SSS, supra, invoked by the public respondent as authority for the ruling that a "joint fishing venture"
existed between private respondent and petitioners is not applicable in the instant case. There is neither light of control nor
actual exercise of such right on the part of the boat-owners in the Pajarillo case, where the Court found that the pilots therein
are not under the order of the boat-owners as regards their employment; that they go out to sea not upon directions of the boat-
owners, but upon their own volition as to when, how long and where to go fishing; that the boat-owners do not in any way
control the crew-members with whom the former have no relationship whatsoever; that they simply join every trip for which the
pilots allow them, without any reference to the owners of the vessel; and that they only share in their own catch produced by
their own efforts.

The aforementioned circumstances obtaining in Pajarillo case do not exist in the instant case. The conduct of the fishing
operations was undisputably shown by the testimony of Alipio Ruga, the patron/pilot of 7/B Sandyman II, to be under the
control and supervision of private respondent's operations manager. Matters dealing on the fixing of the schedule of the fishing
trip and the time to return to the fishing port were shown to be the prerogative of private respondent. 12 While performing the
fishing operations, petitioners received instructions via a single-side band radio from private respondent's operations manager
who called the patron/pilot in the morning. They are told to report their activities, their position, and the number of tubes of
fish-catch in one day. 13 Clearly thus, the conduct of the fishing operations was monitored by private respondent thru the
patron/pilot of 7/B Sandyman II who is responsible for disseminating the instructions to the crew members.

The conclusion of public respondent that there had been no change in the situation of the parties since 1968 when De Guzman
Fishing Enterprises, private respondent herein, obtained a favorable judgment in Case No. 708 exempting it from compulsory
coverage of the SSS law is not supported by evidence on record. It was erroneous for public respondent to apply the factual
situation of the parties in the 1968 case to the instant case in the light of the changes in the conditions of employment agreed
upon by the private respondent and petitioners as discussed earlier.

Records show that in the instant case, as distinguished from the Pajarillo case where the crew members are under no obligation
to remain in the outfit for any definite period as one can be the crew member of an outfit for one day and be the member of the
crew of another vessel the next day, the herein petitioners, on the other hand, were directly hired by private respondent, through
its general manager, Arsenio de Guzman, and its operations manager, Conrado de Guzman and have been under the employ of
private respondent for a period of 8-15 years in various capacities, except for Laurente Bautu who was hired on August 3, 1983
as assistant engineer. Petitioner Alipio Ruga was hired on September 29, 1974 as patron/captain of the fishing vessel; Eladio
Calderon started as a mechanic on April 16, 1968 until he was promoted as chief engineer of the fishing vessel; Jose Parma was
employed on September 29, 1974 as assistant engineer; Jaime Barbin started as a pilot of the motor boat until he was transferred
as a master fisherman to the fishing vessel 7/B Sandyman II; Philip Cervantes was hired as winchman on August 1, 1972 while
Eleuterio Barbin was hired as winchman on April 15, 1976.

While tenure or length of employment is not considered as the test of employment, nevertheless the hiring of petitioners to
perform work which is necessary or desirable in the usual business or trade of private respondent for a period of 8-15 years
since 1968 qualify them as regular employees within the meaning of Article 281 of the Labor Code as they were indeed
engaged to perform activities usually necessary or desirable in the usual fishing business or occupation of private respondent. 14

Aside from performing activities usually necessary and desirable in the business of private respondent, it must be noted that
petitioners received compensation on a percentage commission based on the gross sale of the fish-catch i.e. 13% of the proceeds
of the sale if the total proceeds exceeded the cost of the crude oil consumed during the fishing trip, otherwise only 10% of the
proceeds of the sale. Such compensation falls within the scope and meaning of the term "wage" as defined under Article 97(f) of
the Labor Code, thus:

(f) "Wage" paid to any employee shall mean the remuneration or earnings, however designated, capable of being
expressed in terms of money, whether fixed or ascertained on a time, task, piece or commission basis, or other method
of calculating the same, which is payable by an employer to an employee under a written or unwritten contract of
employment for work done or to be done, or for services rendered or to be rendered, and included the fair and
reasonable value, as determined by the Secretary of Labor, of board, lodging, or other facilities customarily furnished
by the employer to the employee. . . .

The claim of private respondent, which was given credence by public respondent, that petitioners get paid in the form of share
in the fish-catch which the patron/pilot as head of the team distributes to his crew members in accordance with their own
understanding 15 is not supported by recorded evidence. Except that such claim appears as an allegation in private respondent's
position paper, there is nothing in the records showing such a sharing scheme as preferred by private respondent.

Furthermore, the fact that on mere suspicion based on the reports that petitioners allegedly sold their fish-catch at midsea
without the knowledge and consent of private respondent, petitioners were unjustifiably not allowed to board the fishing vessel
on September 11, 1983 to resume their activities without giving them the opportunity to air their side on the accusation against
them unmistakably reveals the disciplinary power exercised by private respondent over them and the corresponding sanction
imposed in case of violation of any of its rules and regulations. The virtual dismissal of petitioners from their employment was
characterized by undue haste when less extreme measures consistent with the requirements of due process should have been
first exhausted. In that sense, the dismissal of petitioners was tainted with illegality.

Even on the assumption that petitioners indeed sold the fish-catch at midsea the act of private respondent virtually resulting in
their dismissal evidently contradicts private respondent's theory of "joint fishing venture" between the parties herein. A joint
venture, including partnership, presupposes generally a parity of standing between the joint co-venturers or partners, in which
each party has an equal proprietary interest in the capital or property contributed 16 and where each party exercises equal lights
in the conduct of the business. 17 It would be inconsistent with the principle of parity of standing between the joint co-venturers
as regards the conduct of business, if private respondent would outrightly exclude petitioners from the conduct of the business
without first resorting to other measures consistent with the nature of a joint venture undertaking, Instead of arbitrary unilateral
action, private respondent should have discussed with an open mind the advantages and disadvantages of petitioners' action with
its joint co-venturers if indeed there is a "joint fishing venture" between the parties. But this was not done in the instant case.
Petitioners were arbitrarily dismissed notwithstanding that no criminal complaints were filed against them. The lame excuse of
private respondent that the non-filing of the criminal complaints against petitioners was for humanitarian reasons will not help
its cause either.

We have examined the jurisprudence on the matter and find the same to be supportive of petitioners' stand. In Negre
vs. WCC 135 SCRA 653 (1985), we held that fishermen crew members who were recruited by one master fisherman locally
known as "maestro" in charge of recruiting others to complete the crew members are considered employees, not industrial
partners, of the boat-owners. In an earlier case of Abong vs. WCC, 54 SCRA 379 (1973) where petitioner therein, Dr. Agustin
Abong, owner of the fishing boat, claimed that he was not the employer of the fishermen crew members because of an alleged
partnership agreement between him, as financier, and Simplicio Panganiban, as his team leader in charge of recruiting said
fishermen to work for him, we affirmed the finding of the WCC that there existed an employer-employee relationship between
the boat-owner and the fishermen crew members not only because they worked for and in the interest of the business of the
boat-owner but also because they were subject to the control, supervision and dismissal of the boat-owner, thru its agent,
Simplicio Panganiban, the alleged "partner" of Dr. Abong; that while these fishermen crew members were paid in kind, or by
"pakiao basis" still that fact did not alter the character of their relationship with Dr. Abong as employees of the latter.
In Philippine Fishing Boat Officers and Engineers Union vs. Court of Industrial Relations, 112 SCRA 159 (1982), we held that
the employer-employee relationship between the crew members and the owners of the fishing vessels engaged in deep sea
fishing is merely suspended during the time the vessels are drydocked or undergoing repairs or being loaded with the necessary
provisions for the next fishing trip. The said ruling is premised on the principle that all these activities i.e., drydock, repairs,
loading of necessary provisions, form part of the regular operation of the company fishing business.

WHEREFORE, in view of the foregoing, the petition is GRANTED. The questioned resolution of the National Labor Relations
Commission dated May 30,1985 is hereby REVERSED and SET ASIDE. Private respondent is ordered to reinstate petitioners
to their former positions or any equivalent positions with 3-year backwages and other monetary benefits under the law. No
pronouncement as to costs.

SO ORDERED.