Batong Buhay Gold Mines vs. Dela Serna (1999) G.R.

86963

Facts: On February 5, 1987, private respondents who are employees of petitioner Batong
Buhay Gold Mines, Inc. (BBGMI), filed a complaint against BBGMI for non-payment of basic pay
and allowances pursuant to Wage Orders Nos. 2 and5, 13th month pay for 1985, 1986 and
1987, non-payment of salaries, vacation and sick leave and salaries of employees who were
placed on forced leave since November 1985.Upon motion of private respondents, an
inspection was conducted on BBGMI. The Regional Director adopted there commendation of
the Labor Standards and Welfare Officers and he issued an Order dated July 31, 1987 directing
BBGMI to pay to private respondent the sum of P4,818,746.40.A writ of execution was issued
and some of the properties of BBGMI were seized and sold at public auction. Finally, BBGMI
posted a supersede as bond which restrained further enforcement of the writ of execution.
BBGMI appealed the Order dated July 31, 1987 of the Regional Director to public respondent
Undersecretary Labor and Employment Dionisio dela Serna claiming that the Regional Director
had no jurisdiction over the case. Acting thereon, the public respondent issued an Order dated
September 16, 1988 upholding the jurisdiction of the Regional Director and annulling all the
auction sales for insufficiency of price. Consequently, motions for intervention were filed by
MFT Corp. as the highest bidder in the auction sale conducted on October 29, 1987, and Salter
Holdings Pty. Ltd. claiming that MFT Corp. had already assigned its rights over the subject
properties in its favor. The said motions were granted by the public respondent and in his order
dated December 14, 1988 it directed the exclusion from annulment of the properties sold at
the October 29, 1987 auction sale as claimed by the intervenors. Hence, this petition which
questioned the jurisdiction of the Regional Director over the complaint and whether or not the
auction sales conducted are valid. The Court ruled that the Regional Director has jurisdiction
over the BBGMI employees. The subject labor standards case of the petition arose from the
visitorial and enforcement powers by the Regional Director of the Department of Labor and
Employment (DOLE). Labor standards refers to the minimum requirements prescribed by
existing laws, rules and regulations relating to wages, hours of work, cost of living allowance
and other monetary and welfare benefits, including occupational, safety and health standards.
Labor standards cases are governed by Article 128 (b)of the Labor Code.

Issue: Whether or not the auction sales conducted by Special Sheriff Ramos valid to satisfy the
judgment award.

Held: The auction sales in the first order were invalid but on different grounds. The auction sale
in the second order. It bears stressing that the writ of execution issued by the Regional Director
led to the several auction sales conducted on September 24, 1987, October 2, 1987, October
23, 1987, October 29, 1987 and October 30, 1987.In the first Order of public respondent, the
five (5) auction sales were declared null and void. As the public respondent put it, "the
scandalously low price for which the personal properties of the respondent were sold leads us
to no other recourse but to invalidate the auction sales conducted by the special sheriff."In the
September 16, 1988 Order of public respondent, the personal properties and corresponding
prices for which they were sold were to satisfy the judgment award in the amount of
P4,818,746.00."As a general rule, findings of fact and conclusion of law arrived at by quasi-
judicial agencies are not to be disturbed absent any showing of grave abuse of discretion
tainting the same. But in the case under scrutiny, there was grave abuse of discretion when the
public respondent, without any evidentiary support, adjudged such prices as"scandalously low".
He merely relied on the self-serving assertion by the petitioner that the value of the auctioned
properties was more than the price bid. Obviously, this ratiocination did not suffice to set aside
the auction sales. The presumption of regularity in the performance of official function is
applicable here. Conformably, any party alleging irregularity vitiating auction sales must come
forward with clear and convincing proof. Furthermore, it is a well-settled principle that: "Mere
inadequacy of price is not, of itself sufficient ground to set aside an execution sale where the
sale is regular, proper and legal in other respects, the parties stand on an equal footing, there
are no confidential relation between them, there is no element of fraud, unfairness, or
oppression, and there is no misconduct, accident, mistake or surprise connected with, and
tending to cause, the inadequacy."Consequently, in declaring the nullity of the subject auction
sales on the ground of inadequacy of price, the public respondent acted with grave abuse of
discretion amounting to lack or excess of jurisdiction. But, this is not to declare the questioned
auction sales as valid. The same are null and void since on the properties of petitioner involved
was constituted a mortgage between petitioner and the Development Bank of the Philippines.
The aforementioned documents were executed between the petitioner and Development Bank
of the Philippines(DBP) even prior to the filing of the complaint of petitioner's employees. The
properties having been mortgaged to DBP, the applicable law is Section 14 of Executive Order
No. 81, dated 3 December 1986, otherwise known as the "The 1986 Revised Charter of the
Development Bank of the Philippines," which exempts the properties of petitioner mortgaged
to DBP from attachment or execution sales. Section 14 of E.O. 81, reads:"SECTION 14.
Exemption from Attachment.

The provisions of any law to the contrary notwithstanding, securities on loans and/or other
accommodations granted by the Bank or its predecessor-in-interest shall not be subject to
attachment, execution or any other court process, nor shall they be included in the property of
insolvent persons or institutions, unless all debts and obligations of the Bank or its predecessor-
in-interest, penalties, collection of expenses, and other charges, subject to the provisions of
paragraph (e) of Sec. 9 of this Charter."Private respondents contend that even if subject
properties were mortgaged to DBP (now under Asset Privatization Trust), Article 110 of the
Labor Code, as amended by RA 6715, applies just the same. According to them, the said
provision of law grants preference to money claims of workers over and above all credits of the
petitioner. This contention is untenable. In the case of DBP vs. NLRC, the Supreme Court held
that the workers preference regarding wages and other monetary claims under Article 110 of
the Labor Code, as amended, contemplates bankruptcy or liquidation proceedings of the
employer's business. What is more, it does not disregard the preferential lien of mortgagees
considered as preferred credits under the provisions of the New Civil Code on the classification,
concurrence and preference of credits. It is well to remember that the said properties were
transferred to the intervenors, when Fidel Bermudez, the highest bidder at the auction sale,
sold the properties to MFT Corporation which, in turn, sold the same properties to Salter
Holdings Pty., Ltd. Public respondent opined that the contract of sale between the intervenors
and the highest bidder should be respected as these sales took place during the interregnum
after the auction sale was conducted on October29, 1987 and before the issuance of the first
disputed Order declaring all the auction sales null and void. On this issue, the Court rules
otherwise. As regards personal properties, the general rule is that title, like a stream, cannot
rise higher than its source. Consequently, a seller without title cannot transfer a title better
than what he holds. MFT Corporation and Salter Holdings Pty., Ltd. trace their title from Fidel
Bermudez, who was the highest bidder of a void auction sale over properties exempt from
execution. Such being the case, the subsequent sale made by him (Fidel Bermudez) is incapable
of vesting title or ownership in the vendee. The Order dated December 14, 1988, declaring the
October 29, 1987 auction sale as valid, was issued with grave abuse of discretion amounting to
lack or excess of jurisdiction.

JMM Promotion and Management vs. Court of Appeals

Due to the death of one Maricris Sioson in 1991, Cory banned the deployment of performing
artists to Japan and other destinations. This was relaxed however with the introduction of the
Entertainment Industry Advisory Council which later proposed a plan to POEA to screen and
train performing artists seeking to go abroad. In pursuant to the proposal POEA and the
secretary of DOLE sought a 4 step plan to realize the plan which included an Artist’s Record
Book which a performing artist must acquire prior to being deployed abroad. The Federation of
Talent Managers of the Philippines assailed the validity of the said regulation as it violated the
right to travel, abridge existing contracts and rights and deprives artists of their individual
rights. JMM intervened to bolster the cause of FETMOP. The lower court ruled in favor of EIAC.

ISSUE: Whether or not the regulation by EIAC is valid.

HELD: The SC ruled in favor of the lower court. The regulation is a valid exercise of police
power. Police power concerns government enactments which precisely interfere with personal
liberty or property in order to promote the general welfare or the common good. As the
assailed Department Order enjoys a presumed validity, it follows that the burden rests upon
petitioners to demonstrate that the said order, particularly, its ARB requirement, does not
enhance the public welfare or was exercised arbitrarily or unreasonably. The welfare of Filipino
performing artists, particularly the women was paramount in the issuance of Department Order
No. 3. Short of a total and absolute ban against the deployment of performing artists to “high
risk” destinations, a measure which would only drive recruitment further underground, the new
scheme at the very least rationalizes the method of screening performing artists by requiring
reasonable educational and artistic skills from them and limits deployment to only those
individuals adequately prepared for the unpredictable demands of employment as artists
abroad. It cannot be gainsaid that this scheme at least lessens the room for exploitation by
unscrupulous individuals and agencies.

CALALANG v. WILLIAMS, 70 PHIL 726, GR No. 47800, December 2, 1940

FACTS: The National Traffic Commission resolved that animal-drawn vehicles be prohibited
from passing along some major streets such a Rizal Ave. in Manila for a period of one year from
the date of the opening of the Colgante Bridge to traffic. The Secretary of Public Works
approved the resolution on August 10,1940. The Mayor of Manila and the Acting Chief of Police
of Manila have enforced the rules and regulation. As a consequence, all animal-drawn vehicles
are not allowed to pass and pick up passengers in the places above mentioned to the detriment
not only of their owners but of the riding public as well.

ISSUE: Does the rule infringe upon the constitutional precept regarding the promotion of
social justice? What is Social Justice?

HELD: No. The regulation aims to promote safe transit and avoid obstructions on national
roads in the interest and convenience of the public. Persons and property may be subject to all
kinds of restraints and burdens in order to secure the general comfort, health, and prosperity of
the State. To this fundamental aims of the government, the rights of the individual are
subordinated.

Social justice is “neither communism, nor despotism, nor atomism, nor anarchy,” but the
humanization of laws and the equalization of social and economic forces by the State so that
justice in its rational and objectively secular conception may at least be approximated. Social
justice means the promotion of the welfare of all the people, the adoption by the Government
of measures calculated to insure economic

stability of all the competent elements of society, through the maintenance of a proper
economic and social equilibrium in the interrelations of the members of the community,
constitutionally, through the adoption of measures legally justifiable, or extra-constitutionally,
through the exercise of powers underlying the existence of all governments on the time-
honored principles of Salus Populi est Suprema Lex.(Justice Laurel)

Agabon vs. NLRC / Riviera Home - GR No. 158693

FACTS: Petitioners were employed by Riviera Home as gypsum board and cornice installers
from January 1992 to February 23, 1999 when they were dismissed for abandonment of work.
Petitioners filed a complaint for illegal dismissal and was decided in their favor by the Labor
Arbiter. Riviera appealed to the NLRC contending just cause for the dismissal because of
petitioner’s abandonment of work. NLRC ruled there was just cause and petitioners were not
entitled to backwages and separation pay. The CA in turn ruled that the dismissal was not illegal
because they have abandoned their work but ordered the payment of money claims.

ISSUE: Whether or not petitioners were illegally dismissed.

RULING: To dismiss an employee, the law required not only the existence of a just and valid
cause but also enjoins the employer to give the employee the right to be heard and to defend
himself. Abandonment is the deliberate and unjustified refusal of an employee to resume his
employment. For a valid finding or abandonment, two factors are considered: failure to report
for work without a valid reason; and, a clear intention to sever employer-employee relationship
with the second as the more determinative factor which is manifested by overt acts from which
it may be deduced that the employees has no more intention to work.

Where the employer had a valid reason to dismiss an employee but did not follow the due
process requirement, the dismissal may be upheld but the employer will be penalized to pay an
indemnity to the employee. This became known as the Wenphil Doctrine of the Belated Due
process Rule.

Art. 279 means that the termination is illegal if it is not for any of the justifiable or authorized
by law. Where the dismissal is for a just cause, the lack of statutory due process should not
nullify the dismissal but the employer should indemnify the employee for the violation of his
statutory rights. The indemnity should be stiffer to discourage the abhorrent practice of
“dismiss now, pay later” which we sought to deter in Serrano ruling. The violation of
employees’ rights warrants the payment of nominal damages.

Serrano vs. NLRC / ISETANN - GR No. 117040

FACTS: Serrano was a regular employee of Isetann Department Store as the head of Security
Checker. In 1991, as a cost-cutting measure, Isetann phased out its entire security section and
engaged the services of an independent security agency. Petitioner filed a complaint for illegal
dismissal among others. Labor arbiter ruled in his favor as Isetann failed to establish that it had
retrenched its security section to prevent or minimize losses to its business; that private
respondent failed to accord due process to petitioner; that private respondent failed to use
reasonable standards in selecting employees whose employment would be terminated. NLRC
reversed the decision and ordered petitioner to be given separation pay.

ISSUE: Whether or not the hiring of an independent security agency by the private respondent
to replace its current security section a valid ground for the dismissal of the employees classed
under the latter.

RULING: An employer’s good faith in implementing a redundancy program is not necessarily

put in doubt by the availment of the services of an independent contractor to replace the
services of the terminated employees to promote economy and efficiency. Absent proof that
management acted in a malicious or arbitrary manner, the Court will not interfere with the
exercise of judgment by an employer.

If termination of employment is not for any of the cause provided by law, it is illegal and the
employee should be reinstated and paid backwages. To contend that even if the termination is
for a just cause, the employee concerned should be reinstated and paid backwages would be to
amend Art 279 by adding another ground for considering dismissal illegal.

If it is shown that the employee was dismissed for any of the causes mentioned in Art 282, the
in accordance with that article, he should not be reinstated but must be paid backwages from
the time his employment was terminated until it is determined that the termination of
employment is for a just cause because the failure to hear him before he is dismissed renders
the termination without legal effect.

Duncan Assoc. of Detailman-PTGWO vs. Glaxo Wellcome Phils., Inc.

G.R. No. 162994, September 17, 2004

FACTS: Tecson was hired by Glaxo as a medical representative on Oct. 24, 1995. Contract of
employment signed by Tecson stipulates, among others, that he agrees to study and abide by
the existing company rules; to disclose to management any existing future relationship by
consanguinity or affinity with co-employees or employees with competing drug companies and
should management find that such relationship poses a prossible conflict of interest, to resign
from the company. Company's Code of Employee Conduct provides the same with stipulation
that management may transfer the employee to another department in a non-counterchecking
position or preparation for employment outside of the company after 6 months.

Tecson was initially assigned to market Glaxo's products in the Camarines Sur-Camarines Norte
area and entered into a romantic relationship with Betsy, an employee of Astra, Glaxo's
competition. Before getting married, Tecson's District Manager reminded him several times of
the conflict of interest but marriage took place in Sept. 1998. In Jan. 1999, Tecson's superiors
informed him of conflict of intrest. Tecson asked for time to comply with the condition (that
either he or Betsy resign from their respective positions). Unable to comply with condition,
Glaxo transferred Tecson to the Butuan-Surigao City-Agusan del Sur sales area. After his request
against transfer was denied, Tecson brought the matter to Glaxo's Grievance Committee and
while pending, he continued to act as medical representative in the Camarines Sur-Camarines
Norte sales area. On Nov. 15, 2000, the National Conciliation and Mediation Board ruled that
Glaxo's policy was valid...

ISSUE: Whether or not the policy of a pharmaceutical company prohibiting its employees from
marrying employees of any competitor company is valid.

RULING: On Equal Protection

Glaxo has a right to guard its trade secrets, manufacturing formulas, marketing strategies, and
other confidential programs and information from competitors. The prohibition against pesonal
or marital relationships with employees of competitor companies upon Glaxo's employees is
reasonable under the circumstances because relationships of that nature might compromise
the interests of the company. That Glaxo possesses the right to protect its economic interest
cannot be denied.

It is the settled principle that the commands of the equal protection clause are addressed only
to the state or those acting under color of its authority. Corollarily, it has been held in a long
array of US Supreme Court decisions that the equal protection clause erects to shield against
merely privately conduct, however, discriminatory or wrongful.
The company actually enforced the policy after repeated requests to the employee to comply
with the policy. Indeed the application of the policy was made in an impartial and even-handed
manner, with due regard for the lot of the employee.

On Constructive Dismissal

Constructive dismissal is defined as a quitting, an involuntary resignation resorted to when

continued employment becomes impossible, unreasonable or unlikely; when there is demotion
in rank, or diminution in pay; or when a clear discrimination, insensibility, or disdain by an
employer becomes unbearable to the employee. None of these conditions are present in the
instant case.

G.R. No. 168081, October 17, 2008 ARMANDO G. YRASUEGUI, petitioners, vs. PHILIPPINE
AIRLINES, INC., respondents.

FACTS: THIS case portrays the peculiar story of an international flight steward who was
dismissed because of his failure to adhere to the weight standards of the airline company.

The proper weight for a man of his height and body structure is from 147 to 166 pounds, the
ideal weight being 166 pounds, as mandated by the Cabin and Crew Administration Manual of
PAL.

In 1984, the weight problem started, which prompted PAL to send him to an extended vacation
until November 1985. He was allowed to return to work once he lost all the excess weight. But
the problem recurred. He again went on leave without pay from October 17, 1988 to February
1989.

Despite the lapse of a ninety-day period given him to reach his ideal weight, petitioner
remained overweight. On January 3, 1990, he was informed of the PAL decision for him to
remain grounded until such time that he satisfactorily complies with the weight standards.
Again, he was directed to report every two weeks for weight checks, which he failed to comply
with.

On April 17, 1990, petitioner was formally warned that a repeated refusal to report for weight
check would be dealt with accordingly. He was given another set of weight check dates, which
he did not report to.

On November 13, 1992, PAL finally served petitioner a Notice of Administrative Charge for
violation of company standards on weight requirements. Petitioner insists that he is being
discriminated as those similarly situated were not treated the same.

On June 15, 1993, petitioner was formally informed by PAL that due to his inability to attain his
ideal weight, “and considering the utmost leniency” extended to him “which spanned a period
covering a total of almost five (5) years,” his services were considered terminated “effective
immediately.”
LABOR ARBITER: held that the weight standards of PAL are reasonable in view of the nature of
the job of petitioner. However, the weight standards need not be complied with under pain of
dismissal since his weight did not hamper the performance of his duties.

NLRC affirmed.

CA: the weight standards of PAL are reasonable. Thus, petitioner was legally dismissed because
he repeatedly failed to meet the prescribed weight standards. It is obvious that the issue of
discrimination was only invoked by petitioner for purposes of escaping the result of his
dismissal for being overweight.

ISSUE: WON he was validly dismissed.

HELD: YES

A reading of the weight standards of PAL would lead to no other conclusion than that they
constitute a continuing qualification of an employee in order to keep the job. The dismissal of
the employee would thus fall under Article 282(e) of the Labor Code.

In the case at bar, the evidence on record militates against petitioner’s claims that obesity is a
disease. That he was able to reduce his weight from 1984 to 1992 clearly shows that it is
possible for him to lose weight given the proper attitude, determination, and self-discipline.
Indeed, during the clarificatory hearing on December 8, 1992, petitioner himself claimed that
“[t]he issue is could I bring my weight down to ideal weight which is 172, then the answer is
yes. I can do it now.”

Petitioner has only himself to blame. He could have easily availed the assistance of the
company physician, per the advice of PAL.

In fine, We hold that the obesity of petitioner, when placed in the context of his work as flight
attendant, becomes an analogous cause under Article 282(e) of the Labor Code that justifies his
dismissal from the service. His obesity may not be unintended, but is nonetheless voluntary. As
the CA correctly puts it, “[v]oluntariness basically means that the just cause is solely
attributable to the employee without any external force influencing or controlling his actions.
This element runs through all just causes under Article 282, whether they be in the nature of a
wrongful action or omission. Gross and habitual neglect, a recognized just cause, is considered
voluntary although it lacks the element of intent found in Article 282(a), (c), and (d).”

NOTES:

The dismissal of petitioner can be predicated on the bona fide occupational qualification
defense. Employment in particular jobs may not be limited to persons of a particular sex,
religion, or national origin unless the employer can show that sex, religion, or national origin is
an actual qualification for performing the job. The qualification is called a bona fide
occupational qualification (BFOQ). In short, the test of reasonableness of the company policy is
used because it is parallel to BFOQ. BFOQ is valid “provided it reflects an inherent quality
reasonably necessary for satisfactory job performance.”
The business of PAL is air transportation. As such, it has committed itself to safely transport its
passengers. In order to achieve this, it must necessarily rely on its employees, most particularly
the

cabin flight deck crew who are on board the aircraft. The weight standards of PAL should be
viewed as imposing strict norms of discipline upon its employees.

The primary objective of PAL in the imposition of the weight standards for cabin crew is flight
safety.

Separation pay, however, should be awarded in favor of the employee as an act of social justice
or based on equity. This is so because his dismissal is not for serious misconduct. Neither is it
reflective of his moral character.

Punzal vs. ETSI Technologies [G.R. No. 170384-85. March 9, 2007]

Facts: Lorna Punzal worked as a department secretary in ETSI. One day, she sent an e-mail to
her

officemates announcing the holding of a Halloween party that was to be held in the office the

following day. She invited her officemates to bring their kids to the office in their Halloween
costumes

and to go “trick or treating” in the office. Her immediate superior advised Punzal to seek the
approval

of management. Then she learned that Senior Vice President Geisert did not approve of the
plan to

hold a party in the office. So, she sent another email to her officemates expressing her

disappointment, particularly saying that: He was so unfair…para bang palagi siyang iniisahan sa
trabaho…bakit most of the parents

na mag-joined ang anak ay naka-VL naman. Anyway, solohin na lang niya bukas ang office. To

those parents who would like to bring their Kids in Megamall there will be Trick or Treating at

Mc Donalds Megamall Bldg. A at 10:00 AM tomorrow and let’s not spoil the fun for our kids.

The management said that she committed an offense under Article IV, No. 5 & 8 Improper
conduct or

acts of discourtesy or disrespect and Making malicious statements concerning Company Officer,
punishable by suspension to termination depending upon the gravity of the offense/s as
specified in

our ETSI’s Code of Conduct and Discipline.

Issue: Was Punzal validly terminated?

Held: A scrutiny of petitioner’s second e-mail message shows that her remarks were not merely
an

expression of her opinion about Geisert’s decision; they were directed against Geisert. Further,
her

closing statement even invited her co-workers to join a trick or treating activity at another
venue

during office hours, encouraging them to ignore Geisert’s authority.

That it has been a tradition in ETSI to celebrate occasions such as Christmas, birthdays,
Halloween,

and others does not remove Geisert’s prerogative to approve or disapprove plans to hold such

celebrations in office premises and during company time. In the case at bar, the disapproval of
the

plan to hold the Halloween party on October 31, 2001 may not be considered to have been
actuated

by bad faith. As the Labor Arbiter noted: the holding of a trick or treat party in the office
premises of

respondent ETSI would certainly affect the operations of the office, since children will be freely
roaming

around the office premises, things may get misplaced and the noise in the office will simply be
too hard to ignore.

Given the reasonableness of Geisert’s decision that provoked petitioner to send the second e-
mail

message, the Court of Appeals correctly ruled that "the message x x x resounds of subversion
and

undermines the authority and credibility of management” and that petitioner "displayed a
tendency to

act without management’s approval, and even against management’s will."

Moreover, in circulating the second e-mail message, petitioner violated Articles III (8) and IV (5)
of

ETSI’s Code of Conduct on "making false or malicious statements concerning the Company, its
officers

and employees or its products and services" and "improper conduct or acts of discourtesy or

disrespect to fellow employees, visitors, guests, clients, at any time."

Nevertheless, the violation of her statutory due process right entitles her to an award of
nominal

damage, which this Court fixes at P30,000, pursuant to the ruling in Agabon.

PASCUAL VS. BME [28 SCRA 345; G.R. NO. 25018; 26 MAY 1969]

Facts: Petitioner Arsenio Pascual, Jr. filed an action for prohibition against the Board of Medical
Examiners. It was alleged therein that at the initial hearing of an administrative case for alleged
immorality, counsel for complainants announced that he would present as his first witness the
petitioner. Thereupon, petitioner, through counsel, made of record his objection, relying on the
constitutional right to be exempt from being a witness against himself. Petitioner then alleged
that to compel him to take the witness stand, the Board of Examiners was guilty, at the very
least, of grave abuse of discretion for failure to respect the constitutional right against self-
incrimination.

The answer of respondent Board, while admitting the facts stressed that it could call petitioner
to the witness stand and interrogate him, the right against self-incrimination being available
only when a question calling for an incriminating answer is asked of a witness. They likewise
alleged that the right against self-incrimination cannot be availed of in an administrative
hearing.

Petitioner was sustained by the lower court in his plea that he could not be compelled to be the
first witness of the complainants, he being the party proceeded against in an administrative
charge for malpractice. Hence, this appeal by respondent Board.

Issue: Whether or Not compelling petitioner to be the first witness of the complainants violates
the Self-Incrimination Clause.

Held: The Supreme Court held that in an administrative hearing against a medical practitioner
for alleged malpractice, respondent Board of Medical Examiners cannot, consistently with the
self-incrimination clause, compel the person proceeded against to take the witness stand
without his consent. The Court found for the petitioner in accordance with the well-settled
principle that "the accused in a criminal case may refuse, not only to answer incriminatory
questions, but, also, to take the witness stand." If petitioner would be compelled to testify
against himself, he could suffer not the forfeiture of property but the revocation of his license
as a medical practitioner. The constitutional guarantee protects as well the right to silence:
"The accused has a perfect right to remain silent and his silence cannot be used as a
presumption of his guilt." It is the right of a defendant "to forego testimony, to remain silent,
unless he chooses to take the witness stand — with undiluted, unfettered exercise of his own
free genuine will."

The reason for this constitutional guarantee, along with other rights granted an accused, stands
for a belief that while crime should not go unpunished and that the truth must be revealed,
such desirable objectives should not be accomplished according to means or methods offensive
to the high sense of respect accorded the human personality. More and more in line with the
democratic creed, the deference accorded an individual even those suspected of the most
heinous crimes is given due weight. The constitutional foundation underlying the privilege is the
respect a government ... must accord to the dignity and integrity of its citizens.

Cabal v. Kapunan G.R. No. L-19052, December 29, 1962 MANUEL F. CABAL, petitioner, vs.
HON. RUPERTO KAPUNAN, JR., and THE CITY FISCAL OF MANILA, respondents.

CONCEPCION, J.:

Col. Jose C. Maristela filed with the Secretary of National Defense a letter-complaint charging
petitioner Manuel Cabal, then Chief of Staff of the AFP, with "graft, corrupt practices,
unexplained wealth, and other equally reprehensible acts". The President of the Philippines
created a committee to investigate the charge of unexplained wealth. The Committee ordered
petitioner herein to take the witness stand in the administrative proceeding and be sworn to as
witness for Maristela, in support of his aforementioned charge of unexplained wealth.
Petitioner objected to the order of the Committee, invoking his constitutional right against self-
incrimination. The Committee insisted that petitioner take the witness stand and be sworn to,
subject to his right to refuse to answer such questions as may be incriminatory. This
notwithstanding, petitioner respectfully refused to be sworn to as a witness to take the witness
stand.

The Committee referred the matter to the Fiscal of Manila, for such action as he may deem
proper. The City Fiscal filed with the Court of First Instance of Manila a "charge" of contempt
for failing to obey the order of the Committee to take the witness stand. The "charge" was
assigned to the sala of respondent judge Kapunan. Petitioner filed with respondent Judge a
motion to quash, which was denied. Hence this petition for certiorari and prohibition.

ISSUE: Whether or not the Committee's order requiring petitioner to take the witness stand
violates his constitutional right against self-incrimination.

HELD: Yes.

Although the said Committee was created to investigate the administrative charge of
unexplained wealth, it seems that the purpose of the charge against petitioner is to apply the
provisions of the Anti-Graft Law, which authorizes the forfeiture to the State of property of a
public officer or employee which is manifestly out of proportion to his salary as such public
officer or employee and his other lawful income and the income from legitimately acquired
property. However, such forfeiture has been held to partake of the nature of a penalty. As a
consequence, proceedings for forfeiture of property are deemed criminal or penal, and, hence,
the exemption of defendants in criminal case from the obligation to be witnesses against
themselves are applicable thereto.

No person shall be compelled in any criminal case to be a witness against himself. This
prohibition against compelling a person to take the stand as a witness against himself applies to
criminal, quasi-criminal, and penal proceedings, including a proceeding civil in form for
forfeiture of property by reason of the commission of an offense, but not a proceeding in which
the penalty recoverable is civil or remedial in nature.

The privilege of a witness not to incriminate himself is not infringed by merely asking the
witness a question which he refuses to answer. The privilege is simply an option of refusal, and
not a prohibition of inquiry. A question is not improper merely because the answer may tend to
incriminate but, where a witness exercises his constitutional right not to answer, a question by
counsel as to whether the reason for refusing to answer is because the answer may tend to
incriminate the witness is improper.

The possibility that the examination of the witness will be pursued to the extent of requiring
self-incrimination will not justify the refusal to answer questions. However, where the position
of the witness is virtually that of an accused on trial, it would appear that he may invoke the
privilege in support of a blanket refusal to answer any and all questions.

Note: It is not disputed that the accused in a criminal case may refuse, not only to answer
incriminatory questions, but, also, to take the witness stand.

Waterouse Drug Corporation v. NLRC G.R. No. 113271. October 16, 1997

Facts: Antonia Melodia Catolico was hired as a pharmacist by Waterous Drug Corp.

YSP Inc., a supplier of medicine, sold to Waterous, thru Catolico, 10 bottles of Voren Tablets at
P384 per unit. However, previews P.O.s issued to YSP, Inc. showed that the price per bottle is
P320.00. Verification was made to YSP, Inc. to determine the discrepancy and it was found that
the cost per bottle was indeed overpriced.

YSP, Inc. Accounting Department (Ms. Estelita Reyes) confirmed that the difference represents
refund of jack-up price of ten bottles of Voren tablets per sales invoice, which was paid to Ms.
Catolico. Said check was sent in an envelope addressed to Catolico.

Catolico denied receiving the same. However, Saldana, the clerk of Waterous Drug Corp.
confirmed that she saw an open envelope with a check amounting P640 payable to
Catolico.Waterous Drug Corp. ordered the termination of Catolico for acts of dishonesty.
NLRC: Dismissed the Petition. Evidence of respondents (check from YSP) being rendered
inadmissible, by virtue of the constitutional right invoked by complainants.

Petitioners: In the light of the decision in the People v. Marti, the constitutional protection
against unreasonable searches and seizures refers to the immunity of one’s person from
interference by government and cannot be extended to acts committed by private individuals
so as to bring it within the ambit of alleged unlawful intrusion by the government.

Issue: W/N the check is admissible as evidence

Held: Yes.

Ratio: (People vs. Marti) Marti ruling: The Bill of Rights does not protect citizens from
unreasonable searches and seizures perpetrated by private individuals.

It is not true, as counsel for Catolico claims, that the citizens have no recourse against such
assaults. On the contrary, and as said counsel admits, such an invasion gives rise to both
criminal and civil liabilities. Despite this, the SC ruled that there was insufficient evidence of
cause for the dismissal of Catolico from employment Suspicion is not among the valid causes
provided by the Labor Code for the termination of Employment.

PNB vs Cabansag June 21, 2005

Ponente: J. Panganiban

Facts: Florence Cabansag went to Singapore as a tourist. While she was there, she looked for a
job and eventually applied with the Singapore Branch of the Philippine National Bank. PNB is a
private banking corporation organized and existing under Philippine laws. She was eventually
employed and was issued an employment pass. In her job offer, it was stated, among others,
that she was to be put on probation for 3 months and termination of her employment may be
made by either party after 1 day notice while on probation, and 1 month notice or 1 month pay
in lieu of notice upon confirmation. She accepted the terms and was issued an OEC by the
POEA. She was commended for her good work. However, she was informed by Ruben Tobias,
the bank president, that she would have to resign in line with some cost cutting and
realignment measures of the company. She refused but was informed by Tobias that if she does
not resign, he will terminate her instead.

Issues:

W/N the arbitration branch of the NLRC has jurisdiction

W/N the arbitration of the NLRC in the NCR is the proper venue

W/N Cabansag was illegally dismissed

Ruling: Labor arbiters have original and exclusive jurisdiction over claims arising from employer-
employee relations including termination disputes involving all workers, including OFWs. Here,
Cabansag applied for and secured an OEC from the POEA through the Philippine Embassy. The
OEC authorized her working status in a foreign country and entitled her to all benefits and
processes under our statutes. Although she may been a direct hire at the commencement of
her employment, she

became an OFW who was covered by Philippine labor laws and policies upon certification by
the POEA. When she was illegally terminated, she already possessed the POEA employment
certificate.

A migrant worker “refers to a person who is to be engaged, is engaged or has been engaged in
a remunerated activity in a state of which he or she is not a legal resident; to be used
interchangeably with overseas Filipino worker.” Here, Cabansag was a Filipino, not a legal
resident of Singapore, and employed by petitioner in its branch office in Singapore. She is
clearly an OFW/migrant worker. Thus, she has the option where to file her Complaint for illegal
dismissal. She can either file at the Regional Arbitration Branch where she resides or the RAB
where the employer is situated. Thus, in filing her Complaint before the RAB office in Quezon
City, she has made a valid choice of proper venue.

The appellate court was correct in holding that respondent was already a regular employee at
the time of her dismissal, because her three-month probationary period of employment had
already ended. This ruling is in accordance with Article 281 of the Labor Code: “An employee
who is allowed to work after a probationary period shall be considered a regular employee.”
Indeed, petitioner recognized respondent as such at the time it dismissed her, by giving her one
month’s salary in lieu of a one-month notice, consistent with provision No. 6 of her
employment Contract.

[G.R. No. 101761. March 24, 1993] NATIONAL SUGAR REFINERIES CORPORATION vs.
NATIONAL LABOR RELATIONS COMMISSION

FACTS: Petitioner National Sugar Refineries Corporation (NASUREFCO), a corporation which is

fully owned and controlled by the Government, operates three (3) sugar refineries located at
Bukidnon, Iloilo and Batangas. Private respondent union represents the former supervisors of
the NASUREFCO Batangas Sugar Refinery.

On June 1, 1988, petitioner implemented a Job Evaluation (JE) Program affecting all employees,
from rank-and-file to department heads. As a result, all positions were re-evaluated, and all
employees including the members of respondent union were granted salary adjustments and
increases in benefits commensurate to their actual duties and functions.

For about ten years prior to the JE Program, the members of respondent union were treated in
the same manner as rank-and file employees. As such, they used to be paid overtime, rest day
and holiday pay. With the implementation of the JE Program, the following adjustments among
others were made: (1) the members of respondent union were re-classified under levels S-5 to
S-8 which are considered managerial staff for purposes of compensation and benefits; (2) there
was an increase in basic pay of the average of 50% of their basic pay prior to the JE Program,
with the union members now enjoying a wide gap (P1,269.00 per month) in basic pay
compared to the highest paid rank-and-file employee.

On May 11, 1990, petitioner NASUREFCO recognized herein respondent union as the bargaining
representative of all the supervisory employees at the NASUREFCO Batangas Sugar Refinery.

Two years after the implementation of the JE Program the members of herein respondent
union filed a complaint for non-payment of overtime, rest day and holiday pay allegedly in
violation of Article 100 of the Labor Code.

ISSUE: W/N supervisory employees should be considered as officers or members of the

managerial staff under Article 82, Book III of the same Code, and hence are not entitled to
overtime rest day and holiday pay.

HELD: YES. Article 212(m), Book V of the Labor Code on Labor Relations reads:

“(m) ‘Managerial employee’ is one who is vested with powers or prerogatives to lay down and
execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharged,
assign or discipline employees. Supervisory employees are those who, in the interest of the
employer effectively recommend such managerial actions if the exercise of such authority is not
merely routinary or clerical in nature but requires the use of independent judgment. All
employees not falling within any of those above definitions are considered rank-and-file
employees of this Book.”

Respondent NLRC, in holding that the union members are entitled to overtime, rest day and
holiday pay, and in ruling that the latter are not managerial employees, adopted the definition
stated in the aforequoted statutory provision.

A cursory perusal of the Job Value Contribution Statements of the union members will readily
show that these supervisory employees are under the direct supervision of their respective
department superintendents and that generally they assist the latter in planning, organizing,
staffing, directing, controlling communicating and in making decisions in attaining the
company’s set goals and objectives.

These supervisory employees are likewise responsible for the effective and efficient operation
of their respective departments. The members of respondent union discharge duties and
responsibilities which ineluctably qualify them as officers or members of the managerial staff,
as defined in Section 2, Rule I Book III of the aforestated Rules to Implement the Labor Code,
viz.: (1) their primary duty consists of the performance of work directly related to management
policies of their employer; (2) they customarily and regularly exercise discretion and
independent judgment; (3) they regularly and directly assist the managerial employee whose
primary duty consist of the management of a department of the establishment in which they
are employed (4) they execute, under general supervision, work along specialized or technical
lines requiring special training, experience, or knowledge; (5) they execute, under general
supervision, special assignments and tasks; and (6) they do not devote more than 20% of their
hours worked in a work-week to activities which are not directly and clearly related to the
performance of their work hereinbefore described.

Under the facts obtaining in this case, the union members should be considered as officers and
members of the managerial staff and are, therefore, exempt from the coverage of Article 82
hence they are not entitled to overtime, rest day and holiday.

Phil. Association of Service Exporters, Inc. vs. Torres, 212 SCRA 298; G.R. No. 101279, August
6, 1992

Facts: DOLE Dept. Order No. 16 temporarily suspends the recruitment by private employment
agencies of Filipino DH going to Hong Kong in view of the need to establish mechanisms that
will enhance the protection for the same.

The DOLE, through POEA took over the business of deploying such HK-bound workers. Pursuant
to the above order, POEA issued memorandum circular no. 30 providing guidelines on the
government processing and deployment of Filipino domestic helpers to HK and the
accreditation of HK recruitment agencies intending to hire Filipino domestic helpers, and the
memorandum circular No. 30, pertaining to the processing of employment contracts of
domestic workers for HK.

Petitioner contends that respondents acted with grave abuse of discretion and/or in excess of
their rule-making authority in issuing said circulars.

Issue: WON the take-over of the business deploying DH to HK by DOLE and POEA through an
administrative order and circular is valid.

Held: Yes. Article 36 of the Labor Code grants the Labor Secretary the power to restrict and
regulate recruitment and placement activities. The challenge administrative issuance discloses
that the same fall within the administrative and police powers expressly or by necessary
implication conferred upon the respondents.

SSS Employee Asso. v CA 175 SCRA 686 (July 28, 1989)

Facts: The petitioners went on strike after the SSS failed to act upon the union’s demands
concerning the implementation of their CBA. SSS filed before the court action for damages with
prayer for writ of preliminary injunction against petitioners for staging an illegal strike. The
court issued a temporary restraining order pending the resolution of the application for
preliminary injunction while petitioners filed a motion to dismiss alleging the court’s lack of
jurisdiction over the subject matter. Petitioners contend that the court made reversible error in
taking cognizance on the subject matter since the jurisdiction lies on the DOLE or the National
Labor Relations Commission as the case involves a labor dispute. The SSS contends on one hand
that the petitioners are covered by the Civil Service laws, rules and regulation thus have no
right to strike. They are not covered by the NLRC or DOLE therefore the court may enjoin the
petitioners from striking.

Issue:

Whether or not SSS employers have the right to strike

Whether or not the CA erred in taking jurisdiction over the subject matter.

Held: The Constitutional provisions enshrined on Human Rights and Social Justice provides
guarantee among workers with the right to organize and conduct peaceful concerted activities
such as strikes. On one hand, Section 14 of E.O No. 180 provides that “the Civil Service law and
rules governing concerted activities and strikes in the government service shall be observed,
subject to any legislation that may be enacted by Congress” referring to Memorandum Circular
No. 6, s. 1987 of the Civil Service Commission which states that “prior to the enactment by
Congress of applicable laws concerning strike by government employees enjoins under pain of
administrative sanctions, all government officers and employees from staging strikes,
demonstrations, mass leaves, walk-outs and other forms of mass action which will result in
temporary stoppage or disruption of public service.” Therefore in the absence of any legislation
allowing govt. employees to strike they are prohibited from doing so.

In Sec. 1 of E.O. No. 180 the employees in the civil service are denominated as “government
employees” and that the SSS is one such government-controlled corporation with an original
charter, having been created under R.A. No. 1161, its employees are part of the civil service and
are covered by the Civil Service Commission’s memorandum prohibiting strikes.

Neither the DOLE nor the NLRC has jurisdiction over the subject matter but instead it is the
Public Sector Labor-Management Council which is not granted by law authority to issue writ of
injunction in labor disputes within its jurisdiction thus the resort of SSS before the general court
for the issuance of a writ of injunction to enjoin the strike is appropriate.

RICARDO G. PALOMA, PETITIONER, VS. PHILIPPINE AIRLINES, INC. AND THE NATIONAL LABOR
RELATIONS COMMISSION, RESPONDENTS. G.R. No. 148415, July 14, 2008]

FACTS: Paloma worked with PAL from September 1957, rising from the ranks to retire, after 35
years of continuous service, as senior vice president for finance. In March 1992, or 9 months
before Paloma retired on November 30, 1992, PAL was privatized.

By way of post-employment benefits, PAL paid Paloma the total amount of PhP 5,163,325.64
which represented his separation/retirement gratuity and accrued vacation leave pay. The
leave benefits Paloma claimed being he is entitled to refer to his 450-day accrued sick leave
credits which PAL allegedly only paid the equivalent of 18 days. He anchored his entitlement on
EO 1077 dated January 9, 1986, and his having accumulated a certain number of days of sick
leave credits, as acknowledged in a letter of Alvia R. Leaño, then an administrative assistant in
PAL. Leaño’s letter substantially states that Paloma only acquired 230 days sick leave credit
because it is the maximum days laid down in PAL’s policy. Had there been no ceiling as
mandated by Company policy, Paloma’s sick leave credits would have totaled 450 days to date.

Paloma filed before the Arbitration Branch of NLRC a Complaint for Commutation of Accrued
Sick Leaves Totaling 392 days. Paloma alleged having accrued sick leave credits of 450 days
commutable upon his retirement pursuant to EO 1077 which allows retiring government
employees to commute, without limit, all his accrued vacation and sick leave credits. And of the
450-day credit, Paloma added, he had commuted only 58 days, leaving him a balance of 392
days of accrued sick leave credits for commutation.

Labor Arbiter (LA) ordered PAL to pay Paloma, the sum of P675,000.00 representing 162
accumulated sick leave credits, plus attorney’s fees . LA held that PAL is not covered by the civil
service system and, accordingly, its employees, like Paloma, cannot avail themselves of the
beneficent provision of EO 1077. This executive issuance applies only to government officers
and employees covered by the civil service, exclusive of the members of the judiciary whose
leave and retirement system is covered by a special law. However, the labor arbiter ruled that
Paloma is entitled to a commutation of his alternative claim for 202 accrued sick leave credits
less 40 days for 1990 and 1991. Thus, the grant of commutation for 162 accrued leave credits.

Both parties appealed to NLRC.NLRC dismissed the appeal and affirmed the decision of the LA.
Both parties filed MR. NLRC, found Paloma to have accumulated sick leave credits of 230 days,
modified its earlier decision. PAL went to the CA on a petition for certiorari under Rule 65. CA
favored PAL. Paloma filed for MR, CA vacated and set aside its former decision. And reinstated
NLRC decision with

modification that the sum granted to Paloma shall earn legal interest. But CA allowed a 230-day
sick leave commutation, up from the 162 days only.

Paloma and PAL appealed the CA’s Amended Decision to SC.

ISSUE: WON EO 1077, before PAL’s privatization, applies to its employees, and corollarily,
whether or not Paloma is entitled to a commutation of his accrued sick leave credits.

RULING: No. EO 1077 (Revising the Computation of Creditable Vacation and Sick Leaves of
Government Officers and Employees), provides:

“Section 1. Any officer [or] employee of the government who retires or voluntary resigns or is
separated from the service through no fault of his own and whose leave benefits are not
covered by special law, shall be entitled to the commutation of all the accumulated vacation
and/or sick leaves to his credit, exclusive of Saturdays, Sundays, and holidays, without
limitation as to the number of days of vacation and sick leaves that he may accumulate.”

Contention of Paloma is without merit. PAL never ceased to be operated as a private

corporation, and was not subjected to the Civil Service Law
Through the years, PAL functioned as a private corporation and managed as such for profit.
Their personnel were never considered government employees. Civil service law and rules and
regulations have not been made to apply to PAL and its employees. Of governing application to
them was the Labor Code.

Paloma cannot be accorded the benefits of EO 1077 which was issued to narrow the gap
between the leave privileges between the members of the judiciary, on one hand, and other
government officers and employees in the civil service, on the other. It is the 1987
Constitution, which delimits the coverage of the civil service, that should govern this case
because it is the Constitution in place at the time the case was decided, even if, incidentally, the
cause of action accrued during the effectivity of the 1973 Constitution.

Paloma, while with PAL, was never a government employee covered by the civil service law. As
such, he did not acquire any vested rights on the retirement benefits accorded by EO 1077.
What governs Paloma’s entitlement to sick leave benefits and the computation and
commutation of creditable benefits is not EO 1077 but PAL’s company policy on the matter.

To elaborate the decision of the lower tribunals, the labor arbiter granted 162 days
commutation, while the NLRC allowed the commutation of the maximum 230 days. The CA,
while seemingly affirming the NLRC’s grant of 230 days commutation, actually decreed a 162-
day commutation. These are all lacking legal basis, for PAL’s company policy upon which either
disposition was predicated did not provide for a commutation of the first 230 days accrued sick
leave credits employees may have upon their retirement. NLRC and the CA, by their act of
allowing commutation to cash, erred because they read in the policy something not written or
intended therein. Indeed, no law provides for commutation of unused or accrued sick leave
credits in the private sector. Commutation is allowed by way of voluntary endowment by an
employer through a company policy or by a CBA. None of such medium is present in the case at
bar and it would be inappropriate if the Court fills up the vacuum.

In the absence of any provision in the applicable company policy authorizing the commutation
of the 230 days accrued sick leave credits existing upon retirement, Paloma may not, as a
matter of enforceable right, insist on the commutation of his sick leave credits to cash.

WHEREFORE, the petition under G.R. No. 148415 is hereby DISMISSED for lack of merit, while
the petition under G.R. No. 156764 is hereby GIVEN DUE COURSE.

SOUTHEAST ASIAN FISHERIES DEVELOPMENT CENTER-AQUACULTURE DEPARTMENT

(SEAFDEC-AQD), DR. FLOR LACANILAO (CHIEF), RUFIL CUEVAS (HEAD, ADMINISTRATIVE DIV.),
BEN DELOS REYES (FINANCE OFFICER), petitioners, vs. NATIONAL LABOR RELATIONS
COMMISSION and JUVENAL LAZAGA, respondents.

FACTS: This is a petition for certiorari to annul and set aside the decision of the NLRC sustaining
the labor arbiter, in holding herein petitioners liable to pay private respondent the amount of
P126,458.89 plus interest thereon computed from May 16, 1986 until full payment thereof is
made, as separation pay and other post-employment benefits.

On April 20, 1975, private respondent Juvenal Lazaga was employed as a Research Associate an
a probationary basis by the SEAFDEC-AQD and was appointed Senior External Affairs Officer on
January 5, 1983 with a monthly basic salary of P8,000.00 and a monthly allowance of P4,000.00.
Thereafter, he was appointed to the position of Professional III and designated as Head of
External Affairs Office with the same pay and benefits.

SEAFDEC-AQD is a department of an international organization, the Southeast Asian Fisheries

Development Center, organized through an agreement entered into in Bangkok, Thailand on
December 28, 1967 by the governments of Malaysia, Singapore, Thailand, Vietnam, Indonesia
and the Philippines with Japan as the sponsoring country

On May 8, 1986, petitioner Lacanilao in his capacity as Chief of SEAFDEC-AQD sent a notice of
termination to private respondent informing him that due to the financial constraints being
experienced by the department, his services shall be terminated at the close of office hours on
May 15, 1986 and that he is entitled to separation benefits equivalent to one (1) month of his
basic salary for every year of service plus other benefits.

Upon petitioner SEAFDEC-AQD’s failure to pay private respondent his separation pay, the latter
filed on March 18, 1987 a complaint against petitioners for non-payment of separation benefits
plus moral damages and attorney’s fees with the Arbitration Branch of the NLRC

Petitioners in their answer with counterclaim alleged that the NLRC has no jurisdiction over the
case inasmuch as the SEAFDEC-AQD is an international organization and that private
respondent must first secure clearances from the proper departments for property or money
accountability before any claim for separation pay will be paid, and which clearances had not
yet been obtained by the private respondent.

LABOR ARBITER: ordered petitioner to pay the benefits claimed

NLRC: affirmed the LA.

PETITIONER CONTENDS that: SEAFDEC-AQD is immune from suit owing to its international
character and the complaint is in effect a suit against the State which cannot be maintained
without its consent.

ISSUE: WON the petitioner is within the scope of application of Philippine labor laws (WON
SEAFDEC is immuned from suit)

HELD: Petitioner Southeast Asian Fisheries Development Center-Aquaculture Department

(SEAFDEC-AQD) is an international agency beyond the jurisdiction of public respondent NLRC.

Being an intergovernmental organization, SEAFDEC including its Departments (AQD), enjoys

functional independence and freedom from control of the state in whose territory its office is
located.
In so far as they are autonomous and beyond the control of any one State, they have a distinct
juridical personality independent of the municipal law of the State where they are situated. As
such, according to one leading authority “they must be deemed to possess a species of
international personality of their own.” (Salonga and Yap, Public International Law, 83 [1956
ed.])

One of the basic immunities of an international organization is immunity from local jurisdiction,
i.e.,that it is immune from the legal writs and processes issued by the tribunals of the country
where it is found. The obvious reason for this is that the subjection of such an organization to
the authority of the local courts would afford a convenient medium thru which the host
government may interfere in there operations or even influence or control its policies and
decisions of the organization; besides, such subjection to local jurisdiction would impair the
capacity of such body to discharge its responsibilities impartially on behalf of its member-
states.

WHEREFORE, finding SEAFDEC-AQD to be an international agency beyond the jurisdiction of the

courts or local agency of the Philippine government, the questioned decision and resolution of
the NLRC dated July 26, 1988 and January 9, 1989, respectively, are hereby REVERSED and SET
ASIDE for having been rendered without jurisdiction.

MATLING INDUSTRIAL VS COROS (G.R. NO. 157802 OCTOBER 13, 2010)

Facts: After his dismissal by Matling as its Vice President for Finance and Administration, the
respondent filed on August 10, 2000 a complaint for illegal suspension and illegal dismissal
against Matling and some of its corporate officers (petitioners) in the NLRC, Sub-Regional
Arbitration Branch XII, Iligan City. The petitioners moved to dismiss the complaint, raising the
ground, among others, that the complaint pertained to the jurisdiction of the Securities and
Exchange Commission (SEC) due to the controversy being intracorporate inasmuch as the
respondent was a member of Matlings Board of Directors aside from being its Vice-President
for Finance and Administration prior to his termination. The respondent opposed the
petitioners motion to dismiss, insisting that his status as a member of Matlings Board of
Directors was doubtful, considering that he had not been formally elected as such; that he did
not own a single share of stock in Matling, considering that he had been made to sign in blank
an undated endorsement of the certificate of stock he had been given in 1992; that Matling had
taken back and retained the certificate of stock in its custody; and that even assuming that he
had been a Director of Matling, he had been removed as the Vice President for Finance and
Administration, not as a Director, a fact that the notice of his termination dated April 10, 2000
showed. On October 16, 2000, the LA granted the petitioners motion to dismiss, ruling that the
respondent was a corporate officer because he was occupying the position of Vice President for
Finance and Administration and at the same time was a Member of the Board of Directors of
Matling; and that, consequently, his removal was a corporate act of Matling and the
controversy resulting from such removal was under the jurisdiction of the SEC, pursuant to
Section 5, paragraph (c) of Presidential Decree No. 902.
Issue: Whether or not the respondent is a corporate officer within the jurisdiction of the regular
courts.

Held: No. As a rule, the illegal dismissal of an officer or other employee of a private employer is
properly cognizable by the LA. This is pursuant to Article 217 (a) 2 of the Labor Code, as
amended, which provides as follows:

Article 217. Jurisdiction of the Labor Arbiters and the Commission. – (a) Except as otherwise
provided under this Code, the Labor Arbiters shall have original and exclusive jurisdiction to
hear and decide, within thirty (30) calendar days after the submission of the case by the parties
for decision without extension, even in the absence of stenographic notes, the following cases
involving all workers, whether agricultural or non-agricultural:

1. Unfair labor practice cases;

2. Termination disputes;

3. If accompanied with a claim for reinstatement, those cases that workers may file involving
wages, rates of pay, hours of work and other terms and conditions of employment;

4. Claims for actual, moral, exemplary and other forms of damages arising from the employer-
employee relations;

5. Cases arising from any violation of Article 264 of this Code, including questions involving the
legality of strikes and lockouts; and

6. Except claims for Employees Compensation, Social Security, Medicare and maternity
benefits, all other claims arising from employer-employee relations, including those of persons
in domestic or household service, involving an amount exceeding five thousand pesos (P
5,000.00) regardless of whether accompanied with a claim for reinstatement.

(b) The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor
Arbiters. (c) Cases arising from the interpretation or implementation of collective bargaining
agreements and those arising from the interpretation or enforcement of company personnel
policies shall be disposed of by the Labor Arbiter by referring the same to the grievance
machinery and voluntary arbitration as may be provided in said agreements.

Where the complaint for illegal dismissal concerns a corporate officer, however, the
controversy falls under the jurisdiction of the Securities and Exchange Commission (SEC),
because the controversy arises out of intra-corporate or partnership relations between and
among stockholders, members, or associates, or between any or all of them and the
corporation, partnership, or association of which they are stockholders, members, or
associates, respectively; and between such corporation, partnership, or association and the
State insofar as the controversy concerns their individual franchise or right to exist as such
entity; or because the controversy involves the election or appointment of a director, trustee,
officer, or manager of such corporation, partnership, or association. Such controversy, among
others, is known as an intra-corporate dispute.
Effective on August 8, 2000, upon the passage of Republic Act No. 8799, otherwise known as
The Securities Regulation Code, the SECs jurisdiction over all intra-corporate disputes was
transferred to the RTC, pursuant to Section 5.2 of RA No. 8799.

Thus, pursuant to the above provision (Section 25 of the Corporation Code), whoever are the
corporate officers enumerated in the by-laws are the exclusive Officers of the corporation and
the Board has no power to create other Offices without amending first the corporate By-laws.
However, the Board may create appointive positions other than the positions of corporate
Officers, but the persons occupying such positions are not considered as corporate officers
within the meaning of Section 25 of the Corporation Code and are not empowered to exercise
the functions of the corporate Officers, except those functions lawfully delegated to them.
Their functions and duties are to be determined by the Board of Directors/Trustees.

Moreover, the Board of Directors of Matling could not validly delegate the power to create a
corporate office to the President, in light of Section 25 of the Corporation Code requiring the
Board of Directors itself to elect the corporate officers. Verily, the power to elect the corporate
officers was a discretionary power that the law exclusively vested in the Board of Directors, and
could not be delegated to subordinate officers or agents. The office of Vice President for
Finance and Administration created by Matlings President pursuant to By Law No. V was an
ordinary, not a corporate, office.

The criteria for distinguishing between corporate officers who may be ousted from office at
will, on one hand, and ordinary corporate employees who may only be terminated for just
cause, on the other hand, do not depend on the nature of the services performed, but on the
manner of creation of the office. In the respondents case, he was supposedly at once an
employee, a stockholder, and a Director of Matling. The circumstances surrounding his
appointment to office must be fully considered to determine whether the dismissal constituted
an intra-corporate controversy or a labor termination dispute. We must also consider whether
his status as Director and stockholder had any relation at all to his appointment and subsequent
dismissal as Vice President for Finance and Administration.

PHILIPPINE AIRLINES, INC., petitioner, vs. ALBERTO SANTOS, JR., HOUDIEL MAGADIA, GILBERT
ANTONIO, REGINO DURAN, PHILIPPINE AIRLINES EMPLOYEES ASSOCIATION, and THE
NATIONAL LABOR RELATIONS COMMISSION, respondents. G.R. No. 77875 February 4, 1993

Facts: This was an instant petition for certiorari to set aside the decision of NLRC setting aside
the suspension of the complaints and directing Philippine Airline to pay complainants their
salaries. Individual respondents were port stewards of catering sub-department on the
passenger services department of petitioner. Their salaries were deducted due to the
mishandling of company’s properties which the respondents resented. On August 27, 1984,
represented by the union, individual respondents made a formal notice regarding the
deductions thru Mr. Abad, Manager for care taking who was on vacation leave but no action
was taken. They then filed a formal grievance pursuant to the collective bargaining agreement.
On his return, Mr. Abad on December 7, 1984, he informed the grievants and scheduled
meeting. Thereafter, the individual respondents refused to do ramp inventory thinking that
since there was no action taken by Mr. Abad five days after they filed the petition, it shall be
resolved in their favor. But Mr. Abad denied the petition and suspended individual
respondents. He also pointed out that it was only proper that employees were charged for the
mishandling of company’s property. Private respondents filed a complaint for illegal suspension
to the labor arbiter. The decision was ruled in favor of the petitioner and the complaint was set
aside. The labor arbiter’s decision was appealed to the respondent commission who rendered
decision setting aside the labor arbiters order of dismissal. Petitioners motion for
reconsideration was denied.

Issue: Whether public respondent NLRC acted with grave abuse of discretion amounting to lack
of jurisdiction on resolving in favor of individual respondents who believed that inaction on the
petition they filed for grievance would be resolved in their favor in accordance to their
collective bargaining agreement ?

Held: The petition hinges on the interpretation of Sec. 2, Art. IV of the PAL-PALEA Collective
Bargaining Agreement about the processing of grievances. Petitioner submits that since the
grievance machinery was made for both labor and management, employees are duty-bound to
thresh out first all the remedies before the management and give them opportunity to act on it.
But due to the absence of Mr. Abad the grievance was not acted upon. The court held that the
employees should not bear the dire effects of Mr. Abad’s absence. The management should
had someone else to look after the grievance during his absence. Under the policy of social
justice, the law bends over backward to accommodate the interests of the working class on the
humane justification that those with less privileges in life should have more privileges in law.

Ruling: Petition was denied and the assailed decision of NLRC was affirmed.

Duty Free Philippines v. Rossano Mojica, GR No. 166365, 30 September 2005, First Division,
Ynares-Santiago

Principles of law: Complaints of civil service employees come under the jurisdiction of the CSC
and not NLRC; any decision of the Labor Arbiter involving a CS employee is void for want of
jurisdiction

Facts

• Mojica was an employee of Duty Free Philippines who was charged with neglect
resulting to considerable damage to or loss of materials, assets and properties of DFP;

• Hence, the discipline committee of Duty Free considered her resigned with forfeiture of
all benefits except salary and accrued leave credits;

• As a result a complaint for illegal dismissal with prayer of full back wages and
reinstatement was filed by Mojica before the NLRC;
• The Labor Arbiter awarded the back wages including an order for reinstatement; this
was, however, reversed by NLRC;

• A motion for reconsideration was likewise dismissed by NLRC;

• A petition for Certiorari under Rule 65 was filed by Mojica before the CA, which court
granted the reliefs prayed for; Duty Free petitioned before the SC;

Issue

1. Whether the filing by Mojica of the complaint before the NLRC was proper

2. What is the nature of DFP?

3. What is the tribunal clothed with jurisdiction to try civil service cases?

Held

1. No, DFP being a government agency attached with DOT, complaints against it are not
cognizable by NLRC.

DFP was created under Executive Order (EO) No. 46 on September 4, 1986 primarily to
augment the service facilities for tourists and to generate foreign exchange and revenue for the
government. In order for the government to exercise direct and effective control and
regulation over the tax and duty free shops, their establishment and operation was vested in
the Ministry, now Department of Tourism (DOT), through its implementing arm, the Philippine
Tourism Authority (PTA). All the net profits from the merchandising operations of the shops
accrued to the DOT.

2. EO No. 292 or The Administrative Code of 1987 empowered the Civil Service
Commission to hear and decide administrative cases instituted by or brought before it directly
or on appeal, including

contested appointments, and review decisions and actions of its offices and of the agencies
attached to it.

CARMEN SANTOS vs. ECC G.R. No. 89222; April 7, 1993.

FACTS: Francisco Santos was employed as welder at the Philippine Navy and its Naval Shipyard
in 1955. He spent the last 32 years of his life in the government service, the first year as a
welder helper and the last two years as shipyard assistant.

In 1986, Francisco was admitted at the Naval Station Hospital in Cavite City, on complaint that
he was having epigastric pain and been vomiting blood 2 days prior. His case was diagnosed as
bleeding Peptic Ulcer disease (PUD), cholelithiasis and diabetes mellitus. In 1987, he died, the
cause of which was liver cirrhosis.
Carmen A. Santos filed a claim for the death benefit of her husband, Francisco. . However the
Government Service Insurance System (GSIS) denied the claim on the ground that upon proofs
and evidence submitted, Francisco's ailment cannot be considered an occupational disease.

On appeal to the Employees' Compensation Commission (ECC), the Commission affirmed the
denial of the GSIS on petitioner's claim relying on the fact that the diagnosis on Francisco's
illness did not specify the type of cirrhosis which caused his death. Nevertheless, the
Commission took cognizant of the fact that the deceased employee did not have a previous
history of alcoholism, hepatitis or a previous history of biliary condition which could give a clue
to the nature of cirrhosis he had.

ISSUE: Whether or not liver cirrhosis is compensable

HELD: YES. For sickness and the resulting death of an employee to be compensable, the
claimant must show either: (1) that it is a result of an occupational disease listed under Annex A
of the Amended Rules on Employees' Compensation with the conditions set therein satisfied; or
(2) if not so listed, that the risk of contracting the disease is increased by the working
conditions. Cirrhosis of the liver is not listed as an occupational disease.

As a welder, Francisco was exposed to heat, gas fumes and chemical substances coming from
the burning electrodes caused by welding. Generally, the metal burned is iron. These vaporized
metals are inhaled by the welder in the process and significantly in this case, Francisco had to
do welding jobs within enclosed compartments.

Research shows that ingestion or inhalation of small amounts of iron over a number of years
may lead to siderosis. Acute poisoning brings about circulatory collapse which may occur
rapidly or be delayed to 48 hours with liver failure. These are industrial hazards to which
Francisco was exposed. And in the long course of time, 32 years at that, his continuous
exposure to burned electrodes and chemicals emitted therefrom would likely cause poisoning
and malfunction of the liver.