Chapter Eight
PROCEDURE AND JURISDICTION
TOPICS PER SYLLABUS
PRELIMINARY CONSIDERATIONS
ON PROCEDURE AND JURISDICTION
1. EXISTENCE OF EMPLOYER-EMPLOYEE RELATIONSHIP.
The existence of employer-employee relationship between the parties-litigants, or a reasonable
causal connection to such relationship1 is ajurisdictional pre-requisite for the exercise of jurisdiction
over a labor dispute by the Labor Arbiters2 or any other labor tribunals.
2. THE CAUSE OF ACTION MUST ARISE FROM THE EMPLOYER-EMPLOYEE
RELATIONSHIP.
Even if there is employer-employee relationship, if the cause of action did not arise out of or
was not incurred in connection with the employer-employee relationship, Labor Arbiters have no
jurisdiction thereover.3 This is so because not every dispute between an employer and employee involves
matters that only labor tribunals like the Labor Arbiters and the NLRC can resolve in the exercise of their
adjudicatory or quasi-judicial power. Actions between employers and employees where the employeremployee relationship is merely incidental is within the exclusive original jurisdiction of the regular
courts. 4
3. REASONABLE CAUSAL CONNECTION RULE – THE RULE IN CASE OF CONFLICT
OF JURISDICTION BETWEEN LABOR COURT AND REGULAR COURT.
Under this rule, if there is a reasonable causal connection between the claim asserted and the
employer-employee relations, then the case is within the jurisdiction of labor courts. 5
In the absence of such nexus, it is the regular courts that have jurisdiction. 6
4. THE POWER TO DETERMINE EXISTENCE OF EMPLOYMENT RELATIONSHIP.
Under labor laws, it is not only the Labor Arbiters and the NLRC who are vested with the power
to determine the existence of employer-employee relationship.
The DOLE Secretary and the DOLE Regional Directors are possessed of similar power as
held in the 2012 en banc Resolution inPeople’s Broadcasting Service (Bombo Radyo Phils. , Inc. ) v.
The Secretary of the Department of Labor and Employment. 7 In fact, it was held here that
the determination by the DOLE Regional Director and the DOLE Secretary of the existence of employeremployee relationship in the exercise of their visitorial and enforcement power under Article 128(b) of
the Labor Code is to the exclusion of the Labor Arbiter and the NLRC.
The Med-Arbiter has also the same power. M. Y. San Biscuits, Inc. v.
Laguesma,8 pronounced that the Med-Arbiter has the authority to determine the employer-employee
relationship because it is necessary and indispensable in the exercise of his jurisdiction. It is absurd to
suggest that the Med-Arbiter and Secretary of Labor cannot make their own independent finding as to
the existence of such relationship and must have to rely and wait for such a determination by the Labor
Arbiter or NLRC in a separate proceeding. For then, given a situation where there is no separate
complaint filed with the Labor Arbiter, the Med-Arbiter and/or the Secretary of Labor can never decide
a certification election case or any labor-management dispute properly brought before them as they have
no authority to determine the existence of an employer-employee relationship. Such a proposition is, to
say the least, anomalous.
The Social Security Commission (SSC) has also this power. In Republic of the Philippines
v. Asiapro Cooperative,9 involving the issue of coverage of owners-members of respondent
Cooperative under the Social Security System (SSS) , it was held that it is not only the Labor Arbiter or
the NLRC who/which has the exclusive jurisdiction to determine the existence of the employer-employee
relationship. The Social Security Commission (SSC) has also that power.
5. IN CASES FILED BY OFWs, LABOR ARBITERS MAY EXERCISE JURISDICTION
EVEN ABSENT THE EMPLOYMENT RELATIONSHIP.
In Santiago v. CF Sharp Crew Management, Inc., 10 it was held that a seafarer who has
already signed a POEA-approved employment contract but was not deployed overseas and, therefore,
there is no employer-employee relationship, may file his monetary claims case with the Labor Arbiter.
This is because the jurisdiction of Labor Arbiters is not limited to claims arising from employeremployee relationships. Under Section 10 of R. A. No. 8042 (Migrant Workers and Overseas Filipinos
Act of 1995) , as amended,11 the Labor Arbiter may exercise jurisdiction over the claims of OFWs arising
out of an employer-employee relationship or by virtue of any law or contract involving Filipino
workers for overseas deployment,including claims for actual, moral, exemplary and other forms of
damage.
Santiago was cited in the 2012 case of Bright Maritime Corporation v. Fantonial,12 where it
was ruled that while respondent seafarer cannot be deemed as having been illegally dismissed
considering that the employer-employee relationship has not yet commenced, nevertheless, petitioners’
act of preventing respondent from leaving and complying with his contract of employment 13 constitutes
breach of contract for which petitioner company is liable for actual damages to respondent for the loss
of one-year salary as provided in the contract.14 Additionally, respondent was awarded moral damages
in the amount of P30,000.00,15 exemplary damages of P50,000.0016 and 10% of all recoverable amounts
as attorney’s fees.17
6. LABOR ARBITERS HAVE JURISDICTION EVEN IF THE CASE IS FILED BY THE HEIRS
OF THE OFW.
This was the ruling in Medline Management, Inc. v. Roslinda.18 As heirs, the wife and son of
Juliano Roslinda, the deceased OFW, have the personality to file the claim for death compensation,
reimbursement of medical expenses, damages and attorney's fees before the Labor Arbiter of the NLRC.
7. LABOR DISPUTES, NOT SUBJECT TO BARANGAY CONCILIATION.
Labor cases are not subject to the conciliation proceedings prescribed under P.D. No. 1508
requiring the submission of disputes before theBarangay Lupong Tagapayapa prior to their filing with
the court or other government offices. Requiring conciliation of labor disputes before the barangay courts
would defeat the very salutary purposes of the law. Instead of simplifying labor proceedings designed at
expeditious settlement or referral to the proper courts or offices to decide them finally, the conciliation
of the issues before the Barangay Lupong Tagapayapa would only duplicate the conciliation proceedings
and unduly delay the disposition of labor cases.19
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Chapter Eight
PROCEDURE AND JURISDICTION
TOPICS PER SYLLABUS
A. Labor Arbiter
1. Jurisdiction
a) versus Regional Director
2. Reinstatement pending appeal
3. Requirements to perfect appeal to NLRC
A.
LABOR ARBITER
1. THE LABOR ARBITER.
The Labor Arbiter is an official in the Arbitration Branch of the National Labor Relations
Commission (NLRC) who hears and decides cases falling under his original and exclusive jurisdiction
as provided by law.
2. VARIOUS POWERS OF THE LABOR ARBITERS.
Besides their adjudicatory power to hear and decide cases over which they have jurisdiction,
the Labor Arbiters have (1) contempt power;1and (2) power to conduct ocular inspection.2
Previously, they are also possessed of injunctive power. 3 This grant of injunctive power,
however, was deleted in recent NLRC Rules.4 The Labor Arbiter thus has no more injunctive
power.5 Only the Commission (NLRC) has that power.6
1.
JURISDICTION
1. NATURE OF JURISDICTION OF LABOR ARBITERS, ORIGINAL AND EXCLUSIVE.
The jurisdiction conferred by Article 217 upon the Labor Arbiters is
both original and exclusive, meaning, no other officers or tribunals can take cognizance of, or hear and
decide, any of the cases therein enumerated.
2. EXCEPTIONS TO THE ORIGINAL AND EXCLUSIVE JURISDICTION OF LABOR
ARBITERS.
The following are the exceptions:
1. When the DOLE Secretary or the President exercises his power under Article 263(g) of the
Labor Code to assume jurisdiction over national interest cases and decide them himself.
2. When the NLRC exercises its power of compulsory arbitration over similar national interest
cases that are certified to it by the DOLE Secretary pursuant to the exercise by the latter of
his certification power under the same Article 263(g) .
3. When cases arise from the interpretation or implementation of collective bargaining
agreements and from the interpretation or enforcement of company personnel policies which
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. 7
4. When the parties agree to submit the case to voluntary arbitration before a Voluntary
Arbitrator or panel of Voluntary Arbitrators who, under Articles 261 and 262 of the Labor
Code, are also possessed of original and exclusive jurisdiction to hear and decide cases
mutually submitted to them by the parties for arbitration and adjudication.
The Labor Arbiters do not have jurisdiction over the cases mentioned above which are taken
cognizance of by said other labor officials or tribunals under specific provisions of the Labor Code.
3. LAWS CONFERRING JURISDICTION ON LABOR ARBITERS.
The following provisions of laws grant original and exclusive jurisdiction to the Labor Arbiters:
1. Article 217 of the Labor Code;8
2. Article 124 of the Labor Code;9
3. Article 128(b) of the Labor Code;10
4. Article 227 of the Labor Code;
5. Article 262-A of the Labor Code;11 and
6. Section 10 of R.A. No. 8042,12 as amended by R.A. No. 10022.13
4. RUNDOWN OF ALL CASES FALLING UNDER THE JURISDICTION OF THE LABOR
ARBITERS.
More particularly, Labor Arbiters shall have original and exclusive jurisdiction to hear and
decide the following cases involving all workers, whether agricultural or non-agricultural:
1. Under Article 217 of the Labor Code:
(a) Unfair labor practice cases;
(b) Termination disputes;
(c) 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;
(d) Claims for actual, moral, exemplary and other forms of damages arising from employeremployee relations;
(e) Cases arising from any violation of Article 279 [264] of the Labor Code, as amended,
including questions involving the legality of strikes and lockouts;
(f) Except claims for employees compensation, social security, Philhealth (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 (P5,000.00) , whether or not accompanied with a claim for reinstatement.
2. Under Article 124 of the Labor Code, as amended by R.A. No. 6727:
Disputes
involving
legislated
wage
increases
and wage
distortion in unorganized establishments not voluntarily settled by the parties pursuant to
R.A. No. 6727.14
3. Under Article 128(b) of the Labor Code, as amended by R.A. No. 7730:
 Contested cases under the exception clause in Article 128(b) of the Labor Code.
4. Under Article 227 of the Labor Code:
 Enforcement of compromise agreements when there is non-compliance by any of the
parties thereto, pursuant to Article 227 of the Labor Code.
5. Under Article 262-A of the Labor Code:
 Issuance of writ of execution to enforce decisions of Voluntary Arbitrators or panel of
Voluntary Arbitrators, in case of their absence or incapacity, for any reason. 15
6. Under Section 10 of R.A. No. 8042, as amended by R.A. No. 10022:
 Money claims arising out of employer-employee relationship or by virtue of any law or
contract, involving Filipino workers for overseas deployment, including claims death and
disability benefits and for actual, moral, exemplary and other forms of damages as provided
by R.A. No. 8042, as amended.16
7. Other cases as may be provided by law. 17
All the foregoing shall be discussed hereunder seriatim.
I.
JURISDICTION OVER UNFAIR LABOR PRACTICE CASES
1. VARIOUS ARTICLES OF THE LABOR CODE ON ULP.
Under the Labor Code, there are only five (5) provisions related to unfair labor practices, viz:
(1) Article 247 which describes the concept of unfair labor practice acts and prescribes the
procedure for their prosecution;
(2) Article 248 which enumerates the unfair labor practices that may be committed by
employers;
(3) Article 249 which enumerates the unfair labor practices that may be committed by labor
organizations;
(4) Article 261 which considers violations of the CBA as no longer unfair labor practices unless
the same are gross in character which meansflagrant and/or malicious refusal to comply
with the economic provisions thereof.
(5) Article 263(c) which refers to union-busting involving the dismissal from employment of
union officers duly elected in accordance with the union constitution and by-laws, where the
existence of the union is threatened thereby.
2. SOME PRINCIPLES ON JURISDICTION OVER ULPs.
 The Labor Arbiter has jurisdiction over all ULPs whether committed by the employers18 or the labor
organizations.19
 The law gives utmost priority in the resolution of unfair labor practice cases. 20
 The Labor Arbiter has jurisdiction only over the civil aspect of ULP, the criminal aspect being
lodged with the regular courts. 21
II.
JURISDICTION OVER ILLEGAL DISMISSAL CASES
1. LABOR OFFICIALS WHO MAY TAKE COGNIZANCE OF TERMINATION DISPUTES.
An examination of the Labor Code shows that the following officials have the power to take
cognizance of termination disputes in the exercise of their respective original and exclusive jurisdictions:
1. Labor Arbiters;22
2. Voluntary Arbitrators or panel of Voluntary Arbitrators;23
3. The DOLE Secretary, in the exercise of his assumption power in national interest cases; 24 or
4. The NLRC, in national interest cases certified to it for compulsory arbitration by the DOLE
Secretary.25
2. SOME PRINCIPLES ON JURISDICTION OVER TERMINATION CASES.
 The validity of the exercise of jurisdiction by Labor Arbiters over illegal dismissal cases is
not dependent on the kind or nature of the ground cited in support of the dismissal; hence,
whether the dismissal is for just cause or authorized cause, it is of no consequence. 26
 In case of conflict of jurisdiction between Labor Arbiter and the Voluntary
Arbitrator over termination cases, the former’s jurisdiction shall prevail for the following
reasons:
(1) Termination of employment is not a grievable issue that must be submitted to the
grievance machinery or voluntary arbitration for adjudication. 27 The jurisdiction
thereover remains within the original and exclusive ambit of the Labor Arbiter and not
of the Voluntary Arbitrator.28
(2) Even if the CBA provides that termination disputes are grievable, the same is merely
discretionary on the part of the parties thereto.29
(3) Once there is actual termination, jurisdiction is conferred upon Labor Arbiters by
operation of law.30
(4) Interpretation of CBA and enforcement of company personnel policies are merely
corollary to an illegal dismissal case.31
(5) Article 217 is deemed written into the CBA being an intrinsic part thereof. 32
(6) Article 277(b) grants the right to the dismissed employee to contest his termination
with the Labor Arbiter.
(7) Estoppel confers jurisdiction on Labor Arbiters.33
(8) The phrase “all other labor disputes” in Article 262 does not automatically confer
jurisdiction on Voluntary Arbitrators.34
(9) The State policy of promoting voluntary arbitration does not foreclose filing of
termination case with Labor Arbiter.35
(10) Failure of the employer to activate grievance machinery confers jurisdiction on Labor
Arbiters.36
 In other words, the Voluntary Arbitrator will only have jurisdiction over illegal dismissal
cases when there is express agreement of the parties to the CBA, i.e. , the employer and the
bargaining agent, to submit the termination case to voluntary arbitration. Absent the mutual
express agreement of the parties, Voluntary Arbitrator cannot acquire jurisdiction over
termination cases.37 This was the holding of the Supreme Court in the cases of Negros Metal
Corp. v. Lamayo,38 Landtex Industries v. CA,39 Atlas Farms, Inc. v. NLRC,40 and San
Miguel Corporation v. NLRC.41 In all these cases, the Supreme Court has categorically
declared that termination cases fall under the original and exclusive jurisdiction of Labor
Arbiters and not of Voluntary Arbitrators. 42
 The express agreement must be stated in the CBA or there must be enough evidence on
record unmistakably showing that the parties have agreed to resort to voluntary arbitration. 43
III.
JURISDICTION OVER MONEY CLAIMS CASES
1. CLASSIFICATION OF MONEY CLAIMS.
Money claims falling within the original and exclusive jurisdiction of the Labor Arbiters may
be classified as follows:
1. Any money claim, regardless of amount, accompanied with a claim for reinstatement; or
2. Any money claim, regardless of whether accompanied with a claim for reinstatement,
exceeding the amount of five thousand pesos (P5,000.00) per claimant.
The money claim in No. 1 above presupposes that it proceeds from a termination case, it being
accompanied with a claim for reinstatement. Hence, it falls within the jurisdiction of the Labor Arbiter
since it is principally a termination dispute.
The money claim in No. 2 above does not necessarily arise from or involve a termination case
but because the amount exceeds P5,000.00, it falls within the jurisdiction of the Labor Arbiter. If the
amount does not exceed P5,000.00, it is, under Article 129, the Regional Director of the Department of
Labor and Employment or his duly authorized hearing officers who have jurisdiction to take cognizance
thereof.44
2. DISTINCTION BETWEEN THE JURISDICTION OF VOLUNTARY ARBITRATORS AND
LABOR ARBITERS OVER CASES FOR MONEY CLAIMS.
The original and exclusive jurisdiction of the Labor Arbiters under Article 217(c) , over cases
for money claims is limited only to those arising from statutes or contracts other than a CBA. The
Voluntary Arbitrators or panel of Voluntary Arbitrators will thus have original and exclusive
jurisdiction over money claims “arising from the interpretation or implementation of the CBA and,
those arising from the interpretation or enforcement of company personnel policies,” under Article
261.
San Jose v. NLRC,45 ruled that it was correct for the NLRC to hold that the Labor Arbiter has
no jurisdiction to hear and decide the employee’s money claims (underpayment of retirement benefits) ,
as the controversy between the parties involved an issue “arising from the interpretation or
implementation” of a provision of the CBA. The Voluntary Arbitrator or panel of Voluntary Arbitrators
has original and exclusive jurisdiction over this controversy under Article 261 of the Labor Code, and
not the Labor Arbiter.
Citing San Jose on the distinction between the jurisdiction of the Labor Arbiters and the
Voluntary Arbitrators, the Supreme Court, in Del Monte Philippines, Inc. v. Saldivar,46 ruled that the
Labor Arbiter in the instant case could not properly pass judgment on the money claim cited as crossclaim by petitioner against the union (Association Labor Union [ALU]) since it is a money claim arising
from the CBA, hence, the Voluntary Arbitrator has jurisdiction to resolve the same.
3. SOME PRINCIPLES ON JURISDICTION OVER MONEY CLAIMS.
 Money claims must arise out of employer-employee relationship.47 If not, jurisdiction is with the
regular courts.48
 Award of statutory benefits even if not prayed for is valid.49
 The money claims lodged by an employee are not to be properly offset by his unpaid subscription
of stocks.50
 Claim for notarial fees by a lawyer employed by a company is within the jurisdiction of the Labor
Arbiter.51
(a)
VERSUS REGIONAL DIRECTOR
1. LABOR ARBITERS HAVE NO JURISDICTION OVER SMALL MONEY CLAIMS
LODGED UNDER ARTICLE 129.
Under Article 129 of the Labor Code, DOLE Regional Directors or the duly authorized hearing
officers, are empowered, in a summary proceeding, to hear and decide claims for recovery of wages
and other monetary claims and benefits, including legal interest, provided the following requisites
concur:
1. The claim must arise from employer-employee relationship;
2. The claimant does not seek reinstatement; and
3. The aggregate money claim of each employee does not exceed P5,000.00.52
The first requisite is indispensable as labor authorities may only take cognizance of cases
arising from employer-employee relationship or when the cause of action has a reasonable causal
connection to such relationship under the “reasonable causal connection rule.”
The second requisite means that the remedy of reinstatement should not accompany the
monetary claim because if this is the case, the principal cause of action would be for illegal dismissal
and not for monetary claim. Necessarily, an action for illegal dismissal falls within the jurisdiction of the
Labor Arbiter as provided under Article 217 of the Labor Code. Needlessly, in an illegal dismissal case,
the amount of any monetary claim asserted therein - whether below or in excess the threshold amount
of P5,000.00 - is immaterial.
The third requisite simply refers to the determination of whether the total amount being
claimed is at least P5,000.00 or below, in which case, the jurisdiction is lodged with the DOLE Regional
Director. If it exceeds P5,000.00, there is no doubt that the Labor Arbiter has jurisdiction thereover.
To recapitulate, absent any of the requisites mentioned above will divest the DOLE Regional
Directors of their authority to hear and decide said money claims. Consequently, the jurisdiction over
the same is vested upon the Labor Arbiters.53
In Oreshoot Mining Company v. Arellano,54 the DOLE Regional Director Office No. IV
issued an order in three (3) separate but consolidated cases, directing the reinstatement of private
respondents and the payment to them of backwages and certain other benefits. The Supreme Court ruled
that the petitioner is correct as regards its claim of lack of competence on the part of the Regional Director
over the cases. The Regional Director has no jurisdiction to try and decide claims of workers arising
from their illegal dismissal from employment and for their reinstatement and recovery of monetary and
other benefits. It is the Labor Arbiter who has jurisdiction over said issues. Consequently, the questioned
order was nullified and the case was referred to the Labor Arbiter for proper adjudication.
2. JURISDICTION OVER CONTESTED CASES UNDER THE EXCEPTION CLAUSE IN
ARTICLE 128(b) OF THE LABOR CODE INVOLVING THE DOLE
SECRETARY’S VISITORIAL AND ENFORCEMENT POWERS (INSPECTION OF
ESTABLISHMENTS) .
a. Requisites.
For the valid exercise by the DOLE Secretary or any of his duly authorized
representatives (DOLE Regional Directors) of the visitorial and enforcement powers provided under
Article 128(b) , the following requisites should concur:
(1) The employer-employee relationship should still exist;
(2) The findings in question were made in the course of inspection by labor inspectors;55 and
(3) The employees have not yet initiated any claim or complaint with the DOLE Regional
Director under Article 129, or the Labor Arbiter under Article 224 [217].
b. Relation of paragraph (b) of article 128 to the jurisdiction of labor arbiters.
Paragraph (b) of Article 128 is a very controversial provision which must be discussed in
connection with the jurisdiction of the Labor Arbiters. The provision itself expressly acknowledges the
conflict of jurisdiction. Thus, the opening sentence of the first paragraph of Article 128(b) , after its
amendment by R.A. No. 7730 [June 2, 1994], pertinently states:
“(b) Notwithstanding the provisions of Articles 129 and 217 of this Code to the
contrary, and in cases where the relationship of employer-employee still exists, the
Secretary of Labor and Employment or his duly authorized representatives shall have
the power to issue compliance orders to give effect to the labor standards provisions of
this Code and other labor legislation based on the findings of labor employment and
enforcement officers or industrial safety engineers made in the course of inspection.
The Secretary or his duly authorized representatives shall issue writs of execution to
the appropriate authority for the enforcement of their orders, exceptin cases where the
employer contests the findings of the labor employment and enforcement officer and
raises issues supported by documentary proofs which were not considered in the
course of inspection. ”56
c. Jurisdictional conflict.
A survey of the cases involving Article 128(b) shows that the following jurisdictional issues
have been raised:
(1) Whether the DOLE Secretary or the Regional Directors have jurisdiction when the total
amount of monetary claims exceeds P5,000.00 per claimant;
(2) Whether the Labor Arbiters have jurisdiction over the contested cases mentioned in the
exception clause in Article 128(b) ; and
(3) Whether the factual findings of the DOLE Secretary or the Regional Directors are binding
on Labor Arbiters and the NLRC under the doctrine of res judicata.
On No. 1 above:
The DOLE Secretary or the Regional Directors have jurisdiction regardless of whether the
amount exceeds P5,000.00 or not.
In Ex-Bataan Veterans Security Agency, Inc. v. The Secretary of Labor Laguesma, 57 it was
held that the Regional Director validly assumed jurisdiction over the money claims of private
respondents even if the claims exceeded P5,000 because such jurisdiction was exercised in accordance
with Article 128(b) of the Labor Code and the case does not fall under the exception clause.
The en banc Resolution in the 2012 case of People’s Broadcasting Service (Bombo Radyo
Phils. , Inc. ) v. The Secretary of the Department of Labor and Employment, 58 clarified that the
expanded jurisdiction of the DOLE Secretary or Regional Directors is not affected whether the
case is the result of regular inspection under Article 128(b) or it originates from a complaint under
either Article 129 or Article 217.
On No. 2 above:
The Labor Arbiters have jurisdiction over contested cases under the exception clause in Article
128(b) . which states: “xxx. The Secretary or his duly authorized representatives shall issue writs of
execution to the appropriate authority for the enforcement of their orders, except in cases where the
employer contests the findings of the labor employment and enforcement officer and raises issues
supported by documentary proofs which were not considered in the course of inspection.”59
In interpreting the afore-quoted provision of the exception clause, three (3) elements must
concur to divest the Regional Directors or their representatives of jurisdiction thereunder, to wit:
(a) That the employer contests the findings of the labor regulations officer and raises issues
thereon;
(b) That in order to resolve such issues, there is a need to examine evidentiary matters; and
(c) That such matters are not verifiable in the normal course of inspection. 60
Resultantly, if the said elements are present and therefore the labor standards case is covered by
said exception clause, then the Regional Director will have to endorse the case to the appropriate Labor
Arbiters of the Arbitration Branch of the NLRC as held in said case of Ex-Bataan Veterans. 61
The 2009 case of Meteoro v. Creative Creatures, Inc.,62 best illustrates the application of the
exception clause. Here, it was held that the Court of Appeals aptly applied the “exception clause” because
at the earliest opportunity, respondent company registered its objection to the findings of the labor
inspector on the ground that there was no employer-employee relationship between petitioners and
respondent company. The labor inspector, in fact, noted in his report that “respondent alleged that
petitioners were contractual workers and/or independent and talent workers without control or
supervision and also supplied with tools and apparatus pertaining to their job. ” In its position paper,
respondent again insisted that petitioners were not its employees. It then questioned the Regional
Director’s jurisdiction to entertain the matter before it, primarily because of the absence of an employeremployee relationship. Finally, it raised the same arguments before the Secretary of Labor and the
appellate court. It is, therefore, clear that respondent contested and continues to contest the findings and
conclusions of the labor inspector. To resolve the issue raised by respondent, that is, the existence of an
employer-employee relationship, there is a need to examine evidentiary matters.
On No. 3 above:
The factual findings of the DOLE Secretary or the Regional Directors made in the exercise of
their visitorial and enforcement powers under Article 128 are binding on Labor Arbiters and the NLRC
under the doctrine of res judicata as held in the 2012 case of Norkis Trading Corporation v.
Buenavista. 63
IV.
JURISDICTION OVER CLAIMS FOR DAMAGES
1. LABOR ARBITERS HAVE JURISDICTION OVER CLAIMS FOR DAMAGES.
It is now a well-settled rule, according to Primero v. Intermediate Appellate Court,64 that
claims for damages as well as attorney’s fees in labor cases are cognizable by the Labor Arbiters, to the
exclusion of all other courts. Rulings to the contrary are deemed abandoned or modified accordingly. No
matter how designated, for as long as the action primarily involves an employer-employee relationship,
the labor court has jurisdiction over any damage claims. 65
2. CLAIMS FOR DAMAGES OF OVERSEAS FILIPINO WORKERS (OFWs) .
Claims for actual, moral, exemplary and other forms of damages that may be lodged by overseas
Filipino workers are cognizable by the Labor Arbiters. 66
V.
JURISDICTION OVER LEGALITY OF STRIKES AND LOCKOUTS
1. JURISDICTION OVER LEGALITY OF STRIKES AND LOCKOUTS NOT AFFECTING
NATIONAL INTEREST.
In general, the Labor Arbiter has the power to determine questions involving the legality or
illegality of a strike or lockout upon the filing of a proper complaint and after due proceedings. 67
The employer, in case of a strike, or the union, in case of a lockout, may file the proper petition
with the Labor Arbiter to seek a declaration of the illegality thereof. It shall be the duty of the Labor
Arbiter concerned to act on the case immediately and dispose of the same, subject only to the
requirements of due process.68
2. JURISDICTION OVER STRIKES AND LOCKOUTS AFFECTING INDUSTRIES
INDISPENSABLE TO THE NATIONAL INTEREST.
The jurisdiction over labor disputes affecting industries indispensable to the national interest is
lodged with either the DOLE Secretary, in case he assumes jurisdiction thereover, or with the NLRC, in
case the DOLE Secretary certifies it thereto.
Under either situation, all cases between the same parties shall be considered subsumed to, or
absorbed by, the assumed or certified case, as the case may be, and shall be decided accordingly by the
DOLE Secretary69 or by the appropriate Division of the Commission. 70 The exception to this rule is
when the assumption or certification order specifies otherwise.
Consequent to this, the 2011 NLRC Rules of Procedure71 prescribe that:
“When the Secretary of Labor and Employment has assumed jurisdiction over
a strike or lockout or certified the same to the Commission, the parties to such dispute
shall immediately inform the Secretary or the Commission, as the case may be, of all
cases directly related to the dispute between them pending before any Regional
Arbitration Branch, and the Labor Arbiters handling the same of such assumption or
certification. The Labor Arbiter concerned shall forward within two (2) days from notice
the entire records of the case to the Commission or to the Secretary of Labor, as the
case may be, for proper disposition.”
Thus, the parties to an assumed or certified case, under pain of contempt, shall inform their
counsels and the DOLE Secretary or the NLRC Division concerned, of all cases pending with the
Regional Arbitration Branches and the Voluntary Arbitrators relative or incident to the assumed or
certified case.72
Further, in cases certified to the NLRC which involve business entities with several workplaces
located in different regions, the NLRC Division having territorial jurisdiction over the principal office
of the company shall acquire jurisdiction to decide such labor dispute; unless the certification order
provides otherwise.73
3. JURISDICTION OVER CRIMINAL CASES ARISING FROM STRIKES OR LOCKOUTS.
The Labor Arbiter cannot adjudicate issues involving any crimes committed, whether related
to a strike or lockout or not. Prosecution of crimes or felonies falls within the jurisdiction of the regular
courts of justice.
V-A.
JURISDICTIONAL INTERPLAY IN STRIKE OR LOCKOUT CASES
1. NECESSITY TO DESCRIBE INTERPLAY OF JURISDICTION.
At the outset, there is a need to discuss and explain the jurisdictional issues involved in strike
or lockout situations because of their seeming complexity. As distinguished from other labor cases, a
labor dispute involving a strike or lockout is unique as it involves an interplay of jurisdiction of several
labor officials or tribunals. Confusion usually arises as to when the said labor officials or tribunals can
properly take cognizance of strike-related or lockout-related issues.
2. A STRIKE OR LOCKOUT IS CROSS-JURISDICTIONAL IN NATURE.
Based on the pertinent provisions of the Labor Code, there is really no overlap or conflict in the
exercise of jurisdiction of each one of them. Below is an outline of the interplay in jurisdiction among
said officials and tribunals.
1. Filing of a notice of strike or lockout with NCMB. - A union which intends to stage a strike
or an employer which desires to mount a lockout should file a notice of strike or notice of lockout, as the
case may be, with the NCMB and not with any other office. It must be noted, however, that the NCMB,
per Tabigue v. International Copra Export Corporation, 74 is not a quasi-judicial body; hence, the
Conciliators-Mediators of the NCMB do not have any decision-making power. They cannot issue
decisions to resolve the issues raised in the notice of strike or lockout. Their role is confined solely to the
conciliation and mediation of the said issues, although they can suggest to the parties that they submit
their dispute to voluntary arbitration through the Voluntary Arbitrators accredited by the NCMB.
2. Filing of a complaint to declare the illegality of the strike or lockout with the Labor
Arbiter or Voluntary Arbitrator or panel of Voluntary Arbitrator. - In case a party wants to have
the strike or lockout declared illegal, a complaint should be filed either with the Labor Arbiter under
Article 217(a) (5) of the Labor Code or, upon mutual agreement of the parties, with the Voluntary
Arbitrator or panel of Voluntary Arbitrators under Article 262 of the same Code. The issue of illegality
of the strike or lockout cannot be resolved by the Conciliators-Mediators of the NCMB as earlier pointed
out and discussed.
3. Filing of an injunction petition with the Commission (NLRC). - In case illegal acts
violative of Article 264 are committed in the course of the strike or lockout, a party may file a petition
for injunction directly with the Commission (NLRC) under Article 218(e) of the Labor Code for purposes
of securing a temporary restraining order (TRO) and injunction. The Labor Arbiters or Voluntary
Arbitrators are not possessed of any injunctive power under the Labor Code. In other words, the
aggrieved party, despite the pendency of the case for the declaration of the illegality of the strike or
lockout with the Labor Arbiter or Voluntary Arbitrator, as the case may be, may directly go to the
Commission to secure the injunctive relief.
4. Assumption of jurisdiction by the DOLE Secretary. – Under Article 263(g) of the Labor
Code, the DOLE Secretary has the power to assume jurisdiction over labor disputes which, in his opinion,
may cause or likely to cause a strike or lockout in industries indispensable to the national interest (socalled “national interest” cases) . Once he makes the assumption, he shall decide all the issues related to
the labor dispute himself, to the exclusion of all other labor authorities.
5. Certification of the labor dispute to the NLRC. - Under the same provision of Article
263(g) of the Labor Code, the DOLE Secretary has the option of not assuming jurisdiction over the labor
dispute in national interest cases. Instead, he may certify it to the NLRC for compulsory arbitration, in
which case, it will be the NLRC which shall hear and decide all the issues subject of the certification
order.
In case at the time of the said assumption or certification, there is a pending case before the
Labor Arbiter or Voluntary Arbitrator on the issue of illegality of the strike or lockout, the same shall be
deemed subsumed in the assumed or certified case. Resultantly, it is no longer the Labor Arbiter or the
Voluntary Arbitrator who should decide the said case but the DOLE Secretary, in the case of assumed
cases, or the NLRC, in the case of certified cases.
6. Assumption of jurisdiction over a national interest case by the President. - The President
of the Philippines is not precluded from intervening in a national interest case by exercising himself the
powers of his alter ego, the DOLE Secretary, granted under Article 263(g) by assuming jurisdiction over
the same for purposes of settling or terminating it.
7. Submission of a national interest case to voluntary arbitration. - Despite the pendency of
the assumed or certified national interest case, the parties are allowed to submit any issues raised therein
to voluntary arbitration at any stage of the proceeding, by virtue of Article 263(h) which provides
that “(b)efore or at any stage of the compulsory arbitration process, the parties may opt to submit their
dispute to voluntary arbitration.”
The foregoing interplay explains why Article 263(i) makes specific reference to the President
of the Philippines, the Secretary of Labor and Employment, the Commission (NLRC) or the Voluntary
Arbitrator in connection with the law on strike, lockout and picketing embodied in Article 263. The only
labor official not so mentioned therein but who has a significant role to play in the interaction of labor
officials and tribunals in strike or lockout cases, is the Labor Arbiter. This is understandable in the light
of the separate express grant of jurisdiction to the Labor Arbiters under Article 217(a) (5) as above
discussed.
VI.
JURISDICTION OVER CASES INVOLVING
LEGISLATED WAGE INCREASES AND WAGE DISTORTION
1. CASES IN ORGANIZED ESTABLISHMENTS.
In establishments where there are existing collective bargaining agreements or recognized
bargaining unions, R.A. No. 6727,75 vests upon the Voluntary Arbitrator or panel of Voluntary
Arbitrators, the jurisdiction to hear and decide wage distortion cases, after the grievance procedure in the
CBA failed to settle the same.76
2. CASES IN UNORGANIZED ESTABLISHMENTS.
In establishments where there are no certified collective bargaining unions or existing
collective bargaining agreements, the Labor Arbiters have jurisdiction to hear and decide wage
distortion cases after the parties and the National Conciliation and Mediation Board (NCMB) failed to
correct the distortion.77
3. DISPUTES OVER LEGISLATED WAGE INCREASES AND WAGE DISTORTION MADE
SUBJECT OF NOTICE OF STRIKE OR LOCKOUT.
Wage distortion is not a proper ground to be invoked in support of a strike or lockout. Disputes
arising from wage distortion resulting from wage orders issued by the Regional Tripartite Wages and
Productivity Board (RTWPB) which are alleged in the notice of strike or notice of lockout, should be
referred to the Labor Arbiter if not settled within ten (10) calendar days of conciliation by the NCMB. 78
VII.
JURISDICTION OVER ENFORCEMENT OR ANNULMENT
OF COMPROMISE AGREEMENTS
1. LEGAL BASIS.
Article 227 clearly embodies the following provisions on compromise agreements:
“Article 227. Compromise Agreements. - Any compromise settlement,
including those involving labor standard laws, voluntarily agreed upon by the parties
with the assistance of the Bureau or the regional office of the Department of Labor, shall
be final and binding upon the parties. The National Labor Relations Commission or
any court shall not assume jurisdiction over issues involved therein except in
case of non-compliance thereof or if there is prima facie evidence that the
settlement was obtained through fraud, misrepresentation, or coercion. ”79
Clear from the foregoing provision that, although the compromise agreement may have been
entered into by the parties before the Bureau of Labor Relations (BLR) or the DOLE Regional Office, it
is the Labor Arbiter who has jurisdiction to take cognizance of the following issues related thereto, to
the exclusion of the BLR and the DOLE Regional Directors:
(1) To enforce the compromise agreement in case of non-compliance therewith by any of the
parties thereto; or
(2) To nullify it if there is prima facie evidence that the settlement was obtained through fraud,
misrepresentation, or coercion.
2. PROVISION IN THE NLRC RULES.
A similar provision is found in the 2011 NLRC Rules of Procedure,80 where the jurisdiction of
the Labor Arbiters is recognized over the enforcement of compromise agreements when there is noncompliance by any of the parties thereto pursuant to Article 227 of the Labor Code.
3. LABOR ARBITER’S JURISDICTION OVER COMPROMISE AGREEMENTS EXECUTED
BEFORE THE NCMB.
Although Article 227 refers only to compromise agreements entered into before the BLR and
DOLE Regional Directors, the same rule vesting jurisdiction to Labor Arbiters also applies to any
compromise settlement, including those involving labor standard laws, voluntarily agreed upon by the
parties with the assistance of the National Conciliation and Mediation Board (NCMB) and its regional
branches. Thus, as provided in the Rules to Implement the Labor Code,81 the NLRC or any court shall
not assume jurisdiction over issues involved therein except in case of non-compliance thereof or if there
is prima facie evidence that the settlement was obtained through fraud, misrepresentation, or coercion.
Upon motion of any interested party, the Labor Arbiter in the region where the agreement was
reached may issue a writ of execution requiring a Sheriff of the Commission or the courts to enforce the
terms of the agreement.82
VIII.
JURISDICTION OVER EXECUTION AND ENFORCEMENT
OF DECISIONS OF VOLUNTARY ARBITRATORS
1. DECISIONS OF VOLUNTARY ARBITRATORS.
Article 262-A of the Labor Code prescribes the procedures that Voluntary Arbitrators or panel
of Voluntary Arbitrators should follow in adjudicating cases filed before them. Once a decision has been
rendered in a case and subsequently becomes final and executory, it may be enforced through the writ of
execution issued by the same Voluntary Arbitrator or panel of Voluntary Arbitrators who rendered it,
addressed to and requiring certain public officers 83 to execute the final decision, order or award.
2. LABOR ARBITERS MAY ISSUE THE WRIT OF EXECUTION.
In situations, however, where the Voluntary Arbitrator or the panel of Voluntary Arbitrators
who rendered the decision is absent or incapacitated for any reason, Article 262-A84 grants jurisdiction
to any Labor Arbiter in the region where the winning party resides, to take cognizance of a motion for
the issuance of the writ of execution filed by such party and accordingly issue such writ addressed to and
requiring the public officers mentioned above to execute the final decision, order or award of the
Voluntary Arbitrator or panel of Voluntary Arbitrators.
IX.
JURISDICTION OVER CASES OF OVERSEAS FILIPINO WORKERS (OFWs)
1. LABOR ARBITERS HAVE JURISDICTION OVER ALL MONEY CLAIMS OF OFWs.
R.A. No. 8042,85 conferred original and exclusive jurisdiction upon Labor Arbiters, to hear and
decide all claims arising from employer-employee relationship or by virtue of any law or contract
involving Filipino workers for overseas deployment, including claims for actual, moral, exemplary and
other forms of damages.
R.A. No. 8042, specifically Section 10 thereof, was undisturbed by the latest amendatory law,
R.A. No. 10022.86
2. VOLUNTARY ARBITRATORS HAVE JURISDICTION OVER MONEY CLAIMS IF
THERE EXISTS A CBA.
 If there is a CBA between the foreign employer and the bargaining union of the OFWs,
the jurisdiction over monetary claims of OFWs belongs to the Voluntary Arbitrator and
not to the Labor Arbiter.
In at least two (2) recent 2012 decisions of the Supreme Court, the jurisdiction of Labor Arbiters
over monetary claims of OFWs was distinguished from that of the Voluntary Arbitrators or panel of
Voluntary Arbitrators, to wit:
(1) Ace Navigation Co. , Inc. v. Fernandez,87 involving the disability claim of respondent; and
(2) Estate of Dulay v. Aboitiz Jebsen Maritime, Inc. and General Charterers Inc.
,88 involving claim for death benefits of petitioner.
In summary, it was ruled in these cases that in case there is a CBA between the employer and
the bargaining union to which the complaining OFW belongs, the original and exclusive jurisdiction over
his monetary claims belongs to the Voluntary Arbitrator or panel of Voluntary Arbitrators and not to the
Labor Arbiters.
3. OFW-RELATED CASES OVER WHICH THE POEA, AND NOT THE LABOR ARBITERS,
HAS JURISDICTION.
The
Philippine
Overseas
Employment
Administration
(POEA)
has original and exclusive jurisdiction to hear and decide:
(a) All cases which are administrative in character, involving or arising out of violation of rules
and regulations relating to licensing and registration of recruitment and employment
agencies or entities, including refund of fees collected from workers and violation of the
conditions for the issuance of license to recruit workers. 89
(b) Disciplinary action cases and other special cases which are administrative in character,
involving employers, principals, contracting partners and Filipino migrant workers. 90
No. 1 above covers recruitment violations or violations of conditions of license; while No.
2 above involves (a) disciplinary action cases against foreign principals or employers, and (a)
disciplinary action cases against land-based OFWs and seafarers.
X.
OTHER ISSUES OVER WHICH LABOR ARBITERS HAVE JURISDICTION
1. JURISDICTION OVER CERTAIN ISSUES AS PROVIDED IN JURISPRUDENCE.
In accordance with well-entrenched jurisprudence, the issues, claims or cases of the following
fall under the jurisdiction of the Labor Arbiters:
(a) Employees in government-owned and/or controlled corporations;
(b) Alien parties;
(c) Priests and ministers;
(d) Domestic workers or kasambahay;
(e) Employees of cooperatives;
(f) Counter-claims of employers against employees.
All the foregoing are discussed below seriatim.
X-A.
JURISDICTION OVER CASES INVOLVING EMPLOYEES
OF GOVERNMENT-OWNED AND/OR CONTROLLED CORPORATIONS
1. PREVAILING RULE.
The hiring and firing of employees of government owned and/or controlled
corporations without original charters are covered by the Labor Code while those with original
charters are basically governed by the Civil Service Law, rules and regulations. 91
X-B.
JURISDICTION OVER DISPUTES INVOLVING ALIEN PARTIES
1. CHOICE OF LAW BY PARTIES.
A basic policy of contract is to protect the expectations of the parties.92 Such party expectations
are protected by giving effect to the parties’ own choice of the applicable law.93 The choice of law must,
however, bear some relationship to the parties or their transaction. 94 A manning agency, for instance,
cannot be faulted for complying with the applicable foreign law. By so complying, it has discharged its
monetary obligation to the employee.95
2. WHEN PHILIPPINE LAW PREVAILS.
Pakistan International Airlines Corporation v. Ople,96 is in point. In this case, two contracts
of employment were executed in Manila between Pakistan International Airlines Corporation and two
Filipino flight attendants. Paragraph 10 of the contracts embodies the stipulation, among others, that the
terms thereof shall be construed and governed by the laws of Pakistan and only the courts of Karachi,
Pakistan shall have jurisdiction to consider any matter arising out of or under the agreement. Prior to the
expiration of the contracts, the services of the two Filipino flight attendants were terminated. They jointly
filed a complaint for illegal dismissal. One of the issues raised is which law should apply and which court
has jurisdiction over the dispute.
The Supreme Court, in holding that the Philippine law should apply and that the Philippine
court has jurisdiction, declared that petitioner PIA cannot take refuge in paragraph 10 of its employment
agreement which, firstly, specifies the law of Pakistan as the applicable law of the agreement and,
secondly, lays the venue for settlement of any dispute arising out of or in connection with the agreement
“only [in] courts of Karachi, Pakistan. ” The first clause of paragraph 10 cannot be invoked to prevent
the application of Philippine labor laws and regulations to the subject matter of this case, i.e. , the
employer-employee relationship between petitioner PIA and private respondents. The relationship is
much affected with public interest and that the otherwise applicable Philippine laws and regulations
cannot be rendered illusory by the parties agreeing upon some other law to govern their relationship.
Neither may petitioner invoke the second clause of paragraph 10, specifying the Karachi courts as the
sole venue for the settlement of disputes between the contracting parties. Even a cursory scrutiny of the
relevant circumstances of this case will show the multiple and substantive contacts between law and
Philippine courts, on the one hand, and the relationship between the parties, upon the other. The contract
was not only executed in the Philippines, it was also performed here, at least partially. Private
respondents are Philippine citizens and residents, while petitioner, although a foreign corporation, is
licensed to do business (and is actually doing business in the Philippines) and hence, is a resident in the
Philippines. Lastly, private respondents were based in the Philippines in between their assigned flights
to the Middle East and Europe. All the above contracts point to the Philippine courts and administrative
agencies as the proper forum for the resolution of the contractual disputes between the parties. Under
these circumstances, paragraph 10 of the employment agreement cannot be given effect so as to oust
Philippine agencies and courts of the jurisdiction vested upon them by Philippine law. Finally, and in
any event, the petitioner PIA did not undertake to plead and prove the contents of Pakistan law on the
matter. It must therefore be presumed that the applicable provisions of the law of Pakistan are the same
as the applicable provisions of Philippine law.
X-C.
JURISDICTION OVER LABOR CASES INVOLVING PRIESTS AND MINISTERS
1. WHEN LABOR ARBITERS HAVE JURISDICTION.
The fact that a case involves as parties thereto the church and its religious minister does not ipso
facto give the case a religious significance. If what is involved is a labor case, say illegal dismissal, the
relationship of the church, as employer, and the priest or minister, as employee is a purely secular matter
not related to the practice of faith, worship or doctrines of the church. Hence, Labor Arbiters may validly
exercise jurisdiction over said labor case.
Austria v. Hon. NLRC and Cebu City Central Philippines Union Mission Corporation of
the Seventh Day Adventist. 97 - The minister here was not excommunicated or expelled from the
membership of the church but was terminated from employment based on the just causes provided in
Article 282 of the Labor Code. Indeed, the matter of terminating an employee which is purely secular in
nature is different from the ecclesiastical act98 of expelling a member from the religious congregation.
As such, the State, through the Labor Arbiter and the NLRC, has the right to take cognizance of the case
to determine whether the church, as employer, rightfully exercised its management prerogative to dismiss
the religious minister as its employee.
2. ECCLESIASTICAL AFFAIR, MEANING.
An “ecclesiastical affair” is one that concerns doctrine, creed, or form of worship of the church,
or the adoption and enforcement within a religious association of needful laws and regulations for the
government of its membership, and the power of excluding from such association those deemed
unworthy of membership.99 Based on this definition, an ecclesiastical affair involves the relationship
between the church and its members and relates to matters of faith, religious doctrines, worship and
governance of the congregation. To be concrete, examples of these so-called ecclesiastical affairs to
which the State cannot meddle, are proceedings for excommunication, ordination of religious ministers,
administration of sacraments and other activities with attached religious significance. 100
X-D.
JURISDICTION OVER CASES OF
DOMESTIC WORKERS OR KASAMBAHAY
1. WHEN LABOR ARBITERS HAVE JURISDICTION.
The Labor Arbiter has jurisdiction if the amount of the claim exceeds P5,000.00; otherwise, the
jurisdiction is vested with the DOLE Regional Director under Article 129 of the Labor Code.
Incidentally, it is no longer legally correct to use the term “domestic
servant” or “househelper” in reference to a person who performs domestic work. Under R.A. No.
10361,101 “domestic servant” or “househelper” should now be referred to as “domestic
worker” or “kasambahay.” 102
X-E.
JURISDICTION OVER CASES OF
EMPLOYEES OF COOPERATIVES
1. WHEN LABOR ARBITERS HAVE JURISDICTION.
The Labor Arbiter has jurisdiction only over monetary claims and illegal dismissal cases
involving employees of cooperatives but not the claims or termination of membership of members
thereof. Cooperatives organized under R.A. No. 6938, 103 are composed of members; hence, issues on
the termination of their membership with the cooperative do not fall within the jurisdiction of the Labor
Arbiters.
Perpetual Help Credit Cooperative, Inc. v. Faburada.104 - Petitioner in this case contends
that the Labor Arbiter has no jurisdiction to take cognizance of the complaint of private respondents who
are not members but employees of the cooperative. The Supreme Court ruled that there is no evidence
that private respondents are members of petitioner cooperative and even if they are, the dispute is about
payment of wages, overtime pay, rest day and termination of employment. Under Article 217 of the
Labor Code, these disputes are within the original and exclusive jurisdiction of the Labor Arbiters. 105
In the 2010 case of San Miguel Corp. v. Semillano,106 petitioner asserts that the present case
is outside the jurisdiction of the labor tribunals because respondent Vicente Semillano is a member of
the Alilgilan Multi-Purpose Coop (AMPCO) , not an employee of petitioner SMC. Petitioner is of the
position that the instant dispute is intra-cooperative in nature falling within the jurisdiction of the
Arbitration Committee of the Cooperative Development Authority. AMPCO was contracted by
petitioner to supply it with workers to perform the task of segregating bottles, removing dirt therefrom,
filing them in designated places, loading and unloading the bottles to and from the delivery trucks, and
to perform other tasks as may be ordered by SMC’s officers. Semillano, together with the other
respondents, filed the complaint for regularization with petitioner SMC, contending that AMPCO was a
mere labor-only contractor. The High Court declared in this case that AMPCO was a labor-only
contractor and consequently pronounced that all the respondents, including Semillano, were regular
employees of petitioner. On this issue of jurisdiction, the High Court held that the Labor Arbiter has
jurisdiction because precisely, Semillano has joined the others in filing this complaint because it is his
position that petitioner SMC is his true employer and liable for all his claims under the Labor Code.
X-F.
JURISDICTION OVER COUNTER-CLAIMS OF EMPLOYERS
1. EMPLOYERS MAY ASSERT COUNTER-CLAIMS AGAINST EMPLOYEES FILED BY
THE LATTER BEFORE THE LABOR ARBITERS.
Almost all labor cases decided by labor courts involve claims asserted by the workers. The
question that may be propounded is whether the employers can assert counter-claims against their
employees before the Labor Arbiters. The Supreme Court answered this poser in the affirmative.
Bañez v. Hon. Valdevilla. 107 - The jurisdiction of Labor Arbiters and the NLRC is
comprehensive enough to include claims for all forms of damages “arising from the employer-employee
relations. ” By this clause, Article 217 should apply with equal force to the claim of an employer for
actual damages against its dismissed employee, where the basis for the claim arises from or is necessarily
connected with the fact of termination, and should be entered as a counter-claim in the illegal dismissal
case. This is in accord with paragraph 6 of Article 217(a) , which covers “all other claims, arising
from employer-employee relations.” 108
But such counter-claim, being a factual issue, must be asserted before the Labor Arbiter;
otherwise, it can no longer be passed upon by a reviewing court. 109
XI.
ISSUES AND CASES OVER WHICH
LABOR ARBITERS HAVE NO JURISDICTION
1. LABOR ARBITERS HAVE NO JURISDICTION OVER CERTAIN ISSUES AND CASES.
The following issues or cases do not fall under the jurisdiction of Labor Arbiters:
(a) Claims for damages arising from breach of a non-compete clause and other post-employment
prohibitions;
(b) Claims for payment of cash advances, car, appliance and other loans of employees;
(c) Dismissal of corporate officers and their monetary claims;
(d) Issues involving suspension of payment of debts (rehabilitation receivership) ;
(e) Cases involving entities immune from suit;
(f) Cases falling under the doctrine of forum non conveniens;
(g) Quasi-delict or tort cases;
(h) Criminal and civil liabilities arising from violations of certain provisions of the Labor Code;
(i) Constitutionality of CBA provisions.
All the foregoing issues or cases are discussed below seriatim.
XI-A.
CLAIMS FOR DAMAGES ARISING FROM BREACH OF NON-COMPETE CLAUSE AND
OTHER POST-EMPLOYMENT PROHIBITIONS
1. JURISDICTION IS LODGED WITH THE REGULAR COURTS.
In case of violation of the non-compete clause and similar post-employment bans or
prohibitions, the employer can assert his claim for damages against the erring employee with the
regular courts and not with the labor courts.110
XI-B.
EMPLOYER’S CLAIMS FOR CASH ADVANCES, CAR, APPLIANCE
AND OTHER PERSONAL LOANS OF EMPLOYEES
1. LABOR ARBITERS HAVE NO JURISDICTION.
With respect to resolving issues involving loans availed of by employees from their employers,
it has been the consistent ruling of the Supreme Court that the Labor Arbiters have no jurisdiction
thereover but the regular courts.
Where the claim to the principal relief sought is to be resolved not by reference to the Labor
Code or other labor relations statute or a collective bargaining agreement but by the general civil law,
the jurisdiction over the dispute belongs to the regular courts of justice and not to the Labor Arbiter and
the NLRC. In such situations, resolutions of the dispute requires expertise, not in labor management
relations nor in wage structures and other terms and conditions of employment, but rather in the
application of the general civil law. Clearly, such claims fall outside the area of competence or expertise
ordinarily ascribed to Labor Arbiters and the NLRC and the rationale for granting jurisdiction over such
claims to these agencies disappears.” 111
The following loans may be cited:
a. Cash loans/advances are in the nature of simple collection of a sum of money brought by
the employer, as creditor, against the employee, as debtor. The fact that they were employer
and employee at the time of the transaction does not negate the civil jurisdiction of the trial
court. The case does not involve adjudication of a labor dispute but recovery of a sum of
money based on our civil laws on obligation and contract. 112
b.
Car loans such as those granted to sales or medical representatives by reason of the nature
of their work. The employer’s demand for payment of the employees’ amortizations on their
car loans, or, in the alternative, the return of the cars to the company, is not a labor, but a
civil, dispute. It involves debtor-creditor relations, rather than employee-employer
relations.113
c. Appliance loans concern the enforcement of a loan agreement involving debtor-creditor
relations founded on contract and do not in any way concern employee relations. As such
it should be enforced through a separate civil action in the regular courts and not before the
Labor Arbiter.114
d.
Loans from retirement fund also involve the same principle as above; hence, collection
therefor may only be made through the regular courts and not through the Labor Arbiter or
any labor tribunal.115
XI-C.
DISMISSAL OF DIRECTORS AND CORPORATE OFFICERS
1. LABOR ARBITERS HAVE NO JURISDICTION.
The dismissal of a director or corporate officer is an intra-corporate dispute cognizable by the
Regional Trial Court116 and not by the Labor Arbiter.
2. MATLING DOCTRINE.
Under this doctrine,117 the following rules should be observed:
(1)
The dismissal of regular employees falls under the jurisdiction of Labor Arbiters; while
that of corporate officers falls within the jurisdiction of the regular courts.
(2)
The term “corporate officers” refers only to those expressly mentioned in the
Corporation Code and By-Laws; all other officers not so mentioned therein are
deemed employees.
(3)
Corporate officers are elected or appointed by the directors or stockholders, and those
who are given that character either by the Corporation Code or by the corporation’s bylaws. 118
(4)
The Corporation Code119 specifically mentions only the following corporate officers, to
wit: president, secretary and treasurer andsuch other officers as may be provided for in
the by-laws.
(5)
The Board of Directors can no longer create corporate offices because the power of
the Board of Directors to create a corporate office cannot be delegated. Therefore, the
term “corporate officers” should only refer to the above and to no other. A different
interpretation can easily leave the way open for the Board of Directors to circumvent the
constitutionally guaranteed security of tenure of the employee by the expedient inclusion
in the By-Laws of an enabling clause on the creation of just any corporate officer position.
(6)
Distinction between a corporate officer and an employee. - An “office” is created by
the charter of the corporation and the“corporate officer” is elected by the directors or
stockholders. On the other hand, an “employee” occupies no office and generally is
employed not by the action of the directors or stockholders but by the managing officer of
the corporation who also determines the compensation to be paid to such employee.
(7)
Because of the Matling doctrine, the rulings in Tabang120 and Nacpil,121 are no longer
controlling because they are “too sweeping and do not accord with reason, justice, and fair
play.”
(8)
The status of an employee as director and stockholder does not automatically convert
his dismissal into an intra-corporate dispute.
(9)
Two (2) elements to determine whether a dispute is intra-corporate or not.
(a) The status or relationship of the parties; and
(b) The nature of the question that is the subject of their controversy. (Nature of
controversy test) .
In the absence of any one of these factors, the RTC will not have jurisdiction.
(10) The criteria do not depend on the services performed but on the manner of creation
of the office.
In Matling, respondent Corros 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. It must also be considered 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.
Obviously enough, the respondent was not appointed as Vice President for Finance and
Administration because of his being a stockholder or Director of Matling. He had started
working for Matling on September 8, 1966, and had been employed continuously for 33
years until his termination on April 17, 2000. His first work as a bookkeeper and his climb
in 1987 to his last position as Vice President for Finance and Administration had been
gradual but steady.122 Even though he might have become a stockholder of Matling in 1992,
his promotion to the position of Vice President for Finance and Administration in 1987 was
by virtue of the length of quality service he had rendered as an employee of Matling. His
subsequent acquisition of the status of Director/stockholder had no relation to his
promotion. Besides, his status of Director/stockholder was unaffected by his dismissal from
employment as Vice President for Finance and Administration. 123
3. SIGNIFICANT CASES DECIDED BASED ON THE MATLING DOCTRINE.
a. Cosare v. Broadcom Asia, Inc. ,124
In this 2014 case, the Supreme Court ruled that the Labor Arbiter, not the regular courts, has
original jurisdiction over the illegal dismissal case filed by petitioner Cosare who was an
incorporator125 of respondent Broadcom and was holding the position of Assistant Vice President for
Sales (AVP for Sales) and Head of the Technical Coordination at the time of his termination. The
following justifications were cited in support of this ruling:
(1) The mere fact that a person was a stockholder and an officer of the company at the time the
subject controversy developed does not necessarily make the case an intra-corporate dispute.
(2) A person, although an officer of the company, is not necessarily a corporate officer thereof.
(3) General Information Sheet (GIS) submitted to SEC neither governs nor establishes the
nature of office.
(4) The Nature of the Controversy Test: The mere fact that a person was a stockholder at the
time of the filing of the illegal dismissal case does not make the action an intra-corporate
dispute.
b. Other cases:
(1) Barba v. Liceo de Cagayan University (2012) ;126
(2) Marc II Marketing, Inc. and Lucila V. Joson v. Alfredo M. Joson (2011) ;127
(3) Real v. Sangu Philippines, Inc. (2011) . 128
XI-D.
SUSPENSION OF PAYMENT OF DEBTS
(REHABILITATION RECEIVERSHIP)
1. JURISDICTION LODGED WITH RTC.
It is no longer the SEC which has jurisdiction over this case. It is now the Regional Trial Court
which has jurisdiction.129
2. EFFECTS OF SUSPENSION OF PAYMENT OF DEBTS (REHABILITATION
RECEIVERSHIP) OR LIQUIDATION ON JURISDICTION OF LABOR ARBITERS.
 The jurisdiction conferred by law upon Labor Arbiters and the NLRC would not be lost simply
because the assets of a former employer have been placed under receivership or liquidation. This
jurisdiction carries with it the concomitant power to execute their decisions.130
 The pendency of the rehabilitation proceedings does not affect the Court’s jurisdiction to resolve
the case, but merely suspends the execution of its decision.131
 The suspension of all actions covers all claims against the corporation which is undergoing
rehabilitation receivership, whether for damages founded on a breach of contract of carriage, labor
cases, collection suits or any other claims of a pecuniary nature. No exception in favor of labor
claims is mentioned in the law.132
 Likewise, the suspension of all actions for claims against a corporation embraces all phases of the
suit, be it before the trial court or any tribunal or before the Supreme Court. No other action may be
taken, including the rendition of judgment during the state of suspension. Once the process of
rehabilitation, however, is completed, the Court should proceed to complete the proceedings on the
suspended actions.133
 Even execution of decisions that are already final and executory may be stayed if the corporation
has been placed under rehabilitation receivership.134
 Execution of final decisions during the period of rehabilitation and suspension is null and
void.135
 Duration of automatic stay has no limit. The suspension shall last up to the termination of the
rehabilitation proceedings.136
 Remedy is to lodge the labor claims with the Rehabilitation Receiver. 137
XI-E.
LABOR CASES INVOLVING ENTITIES IMMUNE FROM SUIT
1. IMMUNE ENTITIES CANNOT BE SUED FOR LABOR LAW VIOLATIONS.
In this jurisdiction, the generally accepted principles of international law are recognized and
adopted as part of the law of the land.138 Immunity of a State and international organizations from suit is
one of these universally recognized principles. It is on this basis that Labor Arbiters or other labor
tribunals have no jurisdiction over immune entities.139
2. ILLUSTRATIVE CASES.
There are quite a number of cases that may be cited but the following would be the most ideal
examples:
In Department of Foreign Affairs v. NLRC,140 involving an illegal dismissal case filed against
the Asian Development Bank (ADB) , it was ruled that said entity enjoys immunity from legal process
of every form and therefore the suit against it cannot prosper. And this immunity extends to its officers
who also enjoy immunity in respect of all acts performed by them in their official capacity. The Charter
and the Headquarters Agreement granting these immunities and privileges to the ADB are treaty
covenants and commitments voluntarily assumed by the Philippine government which must be respected.
In Lasco v. United Nations Revolving Fund for Natural Resources Exploration
[UNRFNRE],141 involving an illegal dismissal case filed against the respondent which is a specialized
agency of the United Nations, the said immunity rule was asserted and reiterated by the Supreme Court.
In dismissing the case, the High Court said that being a member of the United Nations and a party to the
Convention on the Privileges and Immunities of the Specialized Agencies of the United Nations, the
Philippine government adheres to the doctrine of immunity granted to the United Nations and its
specialized agencies. Both treaties have the force and effect of law. 142
The same doctrine was earlier applied in Jusmag Philippines v. NLRC,143 a case involving
illegal dismissal of a Filipino employee of the Joint United States Military Assistance Group to the
Republic of the Philippines (JUSMAG-Philippines) . In upholding the Labor Arbiter’s dismissal of the
case, the High Court enunciated that since the employment contract was entered into by JUSMAG in the
discharge of its governmental functions, JUSMAG being an entity performing a governmental function
on behalf of the United States Government pursuant to the Military Assistance Agreement dated March
21, 1947, the illegal dismissal suit is one against the latter, albeit it was not impleaded in the complaint.
Considering that the United States has not waived or consented to the suit, the complaint against
JUSMAG cannot prosper. JUSMAG is beyond the jurisdiction of Philippine courts.
In Larkins v. NLRC,144 involving the dismissal of workers who worked in the maintenance of
dormitories at the former US Clark Air Base in Pampanga, the Supreme Court, in dismissing the case,
invoked, among other reasons, lack of jurisdiction in the light of the fact that their suit was against the
United States Government which, by right of sovereign power, operated and maintained the dormitories
at Clark Air Base for members of the U.S. Air Force.
3. EXCEPTION TO THE RULE.
There is an exception to the immunity rule as exemplified by the case of United States v. Hon.
Rodrigo,145 where it was held that when the function of the foreign entity otherwise immune from suit
partakes of the nature of a proprietary activity, such as the restaurant services offered at John Hay Air
Station undertaken by the United States Government as a commercial activity for profit and not in
its governmental capacity, the case for illegal dismissal filed by a Filipino cook working therein is well
within the jurisdiction of Philippine courts. The reason is that by entering into the employment contract
with the cook in the discharge of its proprietary functions, it impliedly divested itself of its sovereign
immunity from suit.
4. ESTOPPEL DOES NOT CONFER JURISDICTION OVER AN IMMUNE ENTITY.
An entity immune from suit cannot be estopped from claiming such diplomatic immunity since
estoppel does not operate to confer jurisdiction to a tribunal that has none over a cause of action. 146
XI-F.
DOCTRINE OF FORUM NON CONVENIENS
1. REQUISITES.
This doctrine is an international law principle which has been applied to labor cases. The
following are the requisites for its applicability:
(1) That the Philippine court is one to which the parties may conveniently resort;
(2) That the Philippine court is in a position to make an intelligent decision as to the law and
the facts; and
(3) That the Philippine court has or is likely to have power to enforce its decision. 147
2. APPLICATION TO LABOR CASES.
a. Case where doctrine was rejected.
Petitioners’ invocation of this principle was rejected in Pacific Consultants International
Asia, Inc. v. Schonfeld. 148 Petitioners’ insistence was based on the fact that respondent is a Canadian
citizen and was a repatriate. In so rejecting petitioners’ contention, the Supreme Court cited the following
reasons that do not warrant the application of the said principle: (1) the Labor Code does not
include forum non conveniens as a ground for the dismissal of the complaint;149 and(2) the propriety of
dismissing a case based on this principle requires a factual determination; hence, it is properly considered
as a defense.
b. Case where doctrine was applied.
This doctrine was applied in the case of The Manila Hotel Corp. and Manila Hotel
International Limited v. NLRC,150 where private respondent Marcelo Santos was an overseas worker
employed as a printer in a printing press in the Sultanate of Oman when he was directly hired by the
Palace Hotel, Beijing, People’s Republic of China to work in its print shop. This hotel was being managed
by the Manila Hotel International Ltd. , a foreign entity registered under the laws of Hong Kong. Later,
he was terminated due to retrenchment occasioned by business reverses brought about by the political
upheaval in China (referring to the Tiananmen Square incident) which severely affected the hotel’s
operations.
In holding that the NLRC was a seriously inconvenient forum, the Supreme Court noted that
the main aspects of the case transpired in two foreign jurisdictions and the case involves purely foreign
elements. The only link that the Philippines has with the case is that the private respondent employee
(Marcelo Santos) is a Filipino citizen. The Palace Hotel and MHICL are foreign corporations.
Consequently, not all cases involving Filipino citizens can be tried here. Respondent employee was hired
directly by the Beijing Palace Hotel, a foreign employer, through correspondence sent to him while he
was working at the Sultanate of Oman. He was hired without the intervention of the POEA or any
authorized recruitment agency of the government. Hence, the NLRC is an inconvenient forum given that
all the incidents of the case - from the time of recruitment, to employment to dismissal - occurred outside
the Philippines. The inconvenience is compounded by the fact that the proper defendants, the Palace
Hotel and MHICL, are not nationals of the Philippines. Neither are they “doing business in the
Philippines. ” Likewise, the main witnesses, Mr. Shmidt (General Manager of the Palace Hotel) and Mr.
Henk (Palace Hotel’s Manager) are non-residents of the Philippines.
Neither can an intelligent decision be made as to the law governing the employment contract as
such was perfected in foreign soil. This calls to fore the application of the principle of lex loci
contractus (the law of the place where the contract was made) . It must be noted that the employment
contract was not perfected in the Philippines. Private respondent employee signified his acceptance
thereof by writing a letter while he was in the Sultanate of Oman. This letter was sent to the Palace Hotel
in the People’s Republic of China. Neither can the NLRC determine the facts surrounding the alleged
illegal dismissal as all acts complained of took place in Beijing, People’s Republic of China. The NLRC
was not in a position to determine whether the Tiananmen Square incident truly adversely affected the
operations of the Palace Hotel as to justify respondent employee’s retrenchment.
Even assuming that a proper decision could be reached by the NLRC, such would not have any
binding effect against the employer, the Palace Hotel, which is a corporation incorporated under the laws
of China and was not even served with summons. Jurisdiction over its person was not acquired. This is
not to say that Philippine courts and agencies have no power to solve controversies involving foreign
employers. Neither could it be said that the Supreme Court does not have power over an employment
contract executed in a foreign country. If the respondent employee were an “overseas contract worker”,
a Philippine forum, specifically the POEA, not the NLRC, would protect him. He is not an “overseas
contract worker”, a fact which he admits with conviction. 151
XI-G.
QUASI-DELICT OR TORT CASES
1. LABOR ARBITERS HAVE NO JURISDICTION OVER QUASI-DELICT OR TORT CASES.
Damages arising from quasi-delict or tort are often confused with damages that may be
claimed under labor laws and labor agreements. Consequently, quasi-delict or tort damages are
asserted, though erroneously, in labor cases filed with the Labor Arbiters. As earlier emphasized,
however, Labor Arbiters and the NLRC have no power or authority to grant reliefs in claims that do not
arise from employer-employee relationship such as those emanating from quasi-delict or tort cases per
Article 2176 of the Civil Code that have no reasonable causal connection to any of the claims provided
in the Labor Code, other labor statutes, or collective bargaining agreements.
2. THE TOLOSA CASE.
The best example to cite on this point is the case of Evelyn Tolosa v. NLRC.152 Because of the
death of her husband, Captain Virgilio Tolosa, a complaint for damages was lodged with the Labor
Arbiter by the surviving wife but the Supreme Court ruled that the Labor Arbiter has no jurisdiction over
the case because it was established that the same was in the nature of an action based on quasi-delict or
tort, it being evident that the issue presented therein involved the alleged gross negligence of Captain
Tolosa’s shipmates, Pedro Garate and Mario Asis, with whom Captain Tolosa had no employeremployee relationship. Hence, this case does not involve the adjudication of a labor dispute, but the
recovery of damages based on quasi-delict. Notably, the jurisdiction of labor tribunals is limited to
disputes arising from employer-employee relations.
XI-H.
CRIMINAL AND CIVIL ACTIONS ARISING FROM VIOLATIONS
OF THE PENAL PROVISIONS OF THE LABOR CODE
1. REGULAR COURTS HAVE JURISDICTION.
The Labor Code has expressly conferred jurisdiction over criminal and civil cases arising from
violations of the Labor Code with the regular courts. The relevant provisions are as follows:
1. Article 241 – which provides that criminal and civil liabilities arising from violations of
rights and conditions of union membership provided for thereunder shall continue to be
under the jurisdiction of ordinary courts.
2. Article 247 - while the jurisdiction to hear and decide the administrative and civil aspects of
unfair labor practices is lodged with the Labor Arbiters, the jurisdiction over the criminal
aspect thereof is vested in the regular courts.
3. Article 272 - Although Article 272153 does not mention expressly that the jurisdiction over
the criminal violation of its provision is vested in the regular court, it, however, mentions
the word “court” in paragraph [a] thereof, obviously referring to the regular court. Further,
in theRules to Implement the Labor Code, as amended,154 it is provided that the regular courts
shall have jurisdiction over any criminal action under Article 272 of the Labor Code, as
amended, but subject to the required clearance from the DOLE on cases arising out of or
related to a labor dispute pursuant to the Ministry of Justice 155 Circular No. 15, Series of
1982, and Circular No. 9, Series of 1986.156
4. Article 288 - It is provided therein that any provision of law to the contrary notwithstanding,
any criminal offense punished in the Labor Code shall be under the concurrent jurisdiction
of the Municipal or City Courts and the Courts of First Instance (now RTC).157
XI-I.
CONSTITUTIONALITY OF LABOR CONTRACT STIPULATIONS
1. THE HALAGUEÑA DOCTRINE.
In Halagueńa v. Philippine Airlines, Inc.,158 it was pronounced that it is not the Labor Arbiter
but the regular court which has jurisdiction to rule on the constitutionality of labor contracts such as a
CBA. Petitioners were female flight attendants of respondent Philippine Airlines (PAL) and are members
of the Flight Attendants and Stewards Association of the Philippines (FASAP) , the sole and exclusive
bargaining representative of the flight attendants, flight stewards and pursers of respondent. The July 11,
2001 CBA between PAL and FASAP provides that the compulsory retirement for female flight
attendants is fifty-five (55) and sixty (60) for their male counterpart.
Claiming that said CBA provision is discriminatory against them, petitioners filed against
respondent a Special Civil Action for Declaratory Relief with Prayer for the Issuance of Temporary
Restraining Order and Writ of Preliminary Injunction with the Regional Trial Court (RTC) of Makati
City.
In ruling that the RTC has jurisdiction, the Supreme Court cited the following reasons:
(1) The case is an ordinary civil action, hence, beyond the jurisdiction of labor tribunals.
(2) The said issue cannot be resolved solely by applying the Labor Code. Rather, it requires
the application of the Constitution, labor statutes, law on contracts and the Convention on
the Elimination of All Forms of Discrimination Against Women (CEDAW) . The power
to apply and interpret the constitution and CEDAW is within the jurisdiction of trial courts,
a court of general jurisdiction.
(3) Not every controversy or money claim by an employee against the employer or viceversa is within the exclusive jurisdiction of the Labor Arbiter. Actions between employees
and employer where the employer-employee relationship is merely incidental and the cause
of action proceeds from a different source of obligation are within the exclusive jurisdiction
of the regular courts. Here, the employer-employee relationship between the parties is
merely incidental and the cause of action ultimately arose from different sources of
obligation, i.e. , the Constitution and CEDAW.
2.
REINSTATEMENT PENDING APPEAL
1. PIONEER TEXTURIZING DOCTRINE: REINSTATEMENT ASPECT OF LABOR
ARBITER’S DECISION, IMMEDIATELY EXECUTORY EVEN PENDING APPEAL; NO
WRIT OF EXECUTION REQUIRED.
According to the Pioneer Texturizing doctrine,159 an order of reinstatement issued by the Labor
Arbiter under Article 223160 of the Labor Code is self-executory or immediately executory even pending
appeal.161 This means that the perfection of an appeal shall stay the execution of the decision of the Labor
Arbiter except execution of the reinstatement pending appeal.162
As a consequence of Pioneer Texturizing, the rulings in earlier cases163 that the reinstatement
aspect of the Labor Arbiter’s decision needs a writ of execution as it is not self-executory, are deemed
abandoned.164
2. REINSTATEMENT PENDING APPEAL, APPLICABLE ONLY TO THE ORDER ISSUED
BY THE LABOR ARBITER; WRIT OF EXECUTION REQUIRED WHEN
REINSTATEMENT IS ORDERED BY NLRC ON APPEAL, OR SUBSEQUENTLY BY THE
COURT OF APPEALS OR SUPREME COURT, AS THE CASE MAY BE.
By way of distinction, the rule on reinstatement pending appeal applies only to the order of
reinstatement issued by the Labor Arbiter and to no other. This means that if the reinstatement order
is issued by the NLRC on appeal, or by the Court of Appeals 165 or by the Supreme Court,166 there is a
need to secure a writ of execution from the Labor Arbiter of origin to enforce the reinstatement of the
employee whose dismissal is declared illegal.167
3. TWO (2) OPTIONS OF EMPLOYER.
To implement the reinstatement aspect of a Labor Arbiter’s decision, there are only two (2)
options available to the employer, to wit:
1. Actual reinstatement. - The employee should be reinstated to his position which he occupies
prior to his illegal dismissal under the same terms and conditions prevailing prior to his
dismissal or separation or, if no longer available, to a substantially-equivalent position; or
2. Payroll reinstatement. – The employee should be reinstated in the payroll of the company
without requiring him to report back to his work. 168
4. DUTY OF EMPLOYER TO NOTIFY EMPLOYEE ORDERED REINSTATED.
It is required169 that in case the decision of the Labor Arbiter includes an order of
reinstatement, it should contain:
(a) A statement that the reinstatement aspect is immediately executory; and
(b) A directive for the employer to submit a report of compliance within ten (10) calendar days
from receipt of the said decision.170
Disobedience of this directive clearly denotes a refusal to reinstate. The employee need not
file a motion for the issuance of the writ of execution since the Labor Arbiter is mandated
thereafterto motu proprio issue the writ. With the new rules in place, there is hardly any difficulty in
determining the employer’s intransigence in immediately complying with the order. 171
5. LIABILITY OF EMPLOYER FOR DISOBEYING LABOR ARBITER’S REINSTATEMENT
ORDER.
Under any of the two (2) circumstances described above, the Labor Arbiter shall immediately
issue a writ of execution, even pending appeal, directing the employer to immediately reinstate the
dismissed employee either physically or in the payroll. 172
As a consequence of such disobedience, the employer has the following liabilities,173 to wit:
1. He shall be liable to pay the accrued salaries of the reinstated employee as a consequence of
such non-reinstatement in the amount specified in the decision; and
2. He may be cited for contempt, in accordance with the 2011 NLRC Rules of Procedure,174 for
his refusal to comply with the writ of execution ordering the reinstatement. 175 This remedy,
however, is available only after the Sheriff shall have served the writ of execution upon the
employer or any other person required by law to obey the same. 176
On No. 1 above, the employer should pay the accrued salaries in case of disobedience because
the employee should not be left without any remedy in case the employer unreasonably delays or refuses
reinstatement. The unjustified refusal of the employer to reinstate an illegally dismissed employee
entitles the employee to the payment of his salaries.177 The entitlement of the dismissed employee to his
salaries occasioned by the unjustified refusal of the employer to reinstate him becomes effective from
the time the employer failed to reinstate him despite the issuance of a writ of execution. 178
On No. 2 above, the remedy available to the employee whose reinstatement ordered by the
Labor Arbiter was not implemented by the employer is to file for contempt against the latter and
certainly not the institution of a separate action in the regular court or with the Labor Arbiter. Such
recourse will violate the well-settled principle of res judicata. It would give rise to multiplicity of actions
which the law abhors and exerts every effort to eschew. 179
6. INSTANCES WHEN WRIT OF EXECUTION OF LABOR ARBITER’S REINSTATEMENT ORDER STILL
REQUIRED.
Under the 2011 NLRC Rules of Procedure,180 there are two (2) instances when a writ of
execution should still be issued immediately by the Labor Arbiter to implement his order of
reinstatement, even pending appeal, viz:
(1) When the employer disobeys the prescribed directive181 to submit a report of compliance
within ten (10) calendar days from receipt of the decision; or
(2) When the employer refuses to reinstate the dismissed employee.
The Labor Arbiter shall motu proprio issue a corresponding writ to satisfy the reinstatement
wages as they accrue until actual reinstatement or reversal of the order of reinstatement.182
7. SOME PRINCIPLES ON REINSTATEMENT PENDING APPEAL.
 Employer has no way of staying execution of immediate reinstatement. He cannot post bond
to prevent its execution.183
 Reinstatement pending appeal applies to all kinds of illegal dismissal cases, regardless of the
grounds thereof.184
 Reinstatement pending appeal does not apply when the dismissal is legal but reinstatement is
ordered for some reasons like equity and compassionate justice. 185
 The failure of employee ordered reinstated pending appeal to report back to work as directed by
the employer does not give the employer the right to remove him, especially when there is a
reasonable explanation for his failure.186
 When former position is already filled up, the employee ordered reinstated pending appeal should
be reinstated to a substantially equivalent position. 187
 Reinstatement to a position lower in rank is not proper. 188
 In case of two successive dismissals, the order of reinstatement pending appeal under Article 223
issued in the first case shall apply only to the first case and should not affect the second dismissal.
According to Sevilla v. NLRC,189 the Labor Arbiter was correct in denying the third motion for
reinstatement filed by the petitioner because what she should have filed was a new complaint based
on the second dismissal. The second dismissal gave rise to a new cause of action. Inasmuch as no
new complaint was filed, the Labor Arbiter could not have ruled on the legality of the second
dismissal.
 Reinstatement pending appeal is not affected by the reinstated employee’s employment
elsewhere.190
 Effect of grant of achievement award during reinstatement pending appeal.
In the 2014 case of Garza v. Coca-Cola Bottlers Philippines, Inc. ,191 it was pronounced that the
act of respondent CCBPI in giving an award of a Certificate of Achievement to petitioner for his
exemplary sales performance during his reinstatement ordered by the Labor Arbiter, 192 while
respondent’s appeal with the NLRC was still pending, constitutes recognition of petitioner’s
abilities and accomplishments. It indicates that he is a responsible, trustworthy and hardworking
employee of CCBPI. It constitutes adequate proof weighing in his favor.
 The issuance of temporary restraining order (TRO) by the Court of Appeals or by the Supreme
Court, as the case may be, merely suspends the implementation and enforcement of the
reinstatement order but it does not have the effect of nullifying the right of the employee to his
reinstatement and to be paid his reinstatement wages.193
3.
REQUIREMENTS TO PERFECT APPEAL TO NLRC
I.
APPEAL IN GENERAL
1. APPEAL, MEANING AND NATURE.
The term “appeal”refers to the elevation by an aggrieved party to an agency vested with
appellate authority of any decision, resolution or order disposing the principal issues of a case rendered
by an agency vested with original jurisdiction, undertaken by filing a memorandum of appeal.194
2. SOME PRINCIPLES ON APPEAL.
 Appeals under Article 223 apply only to appeals from the Labor Arbiter’s decisions, awards or
orders to the Commission (NLRC) .
 There is no appeal from the decisions, orders or awards of the NLRC. Clearly, therefore, Article
223 of the Labor Code is not the proper basis for elevating the case to the Court of Appeals or to the
Supreme Court.195 The proper remedy from the decisions, awards or orders of the NLRC to the Court
of Appeals is a Rule 65 petition for certiorari and from the Court of Appeals to the Supreme Court,
a Rule 45 petition for review on certiorari.
 Appeal from the NLRC to the DOLE Secretary and to the President had long been abolished. 196
 Appeal is not a constitutional right but a mere statutory privilege. Hence, parties who seek to avail
of it must comply with the statutes or rules allowing it.197
 A motion for reconsideration is unavailing as a remedy against a decision of the Labor Arbiter. The
Labor Arbiter should treat the said motion as an appeal to the NLRC.198
 A “Petition for Relief” should be treated as appeal.199
 Affirmative relief is not available to a party who failed to appeal. A party who does not appeal
from a decision of a court cannot obtain affirmative relief other than the ones granted in the appealed
decision.200
3. GROUNDS FOR APPEAL TO THE COMMISSION (NLRC) .
The appeal to the NLRC may be entertained only on any of the following grounds:
a. If there is a prima facie evidence of abuse of discretion on the part of the Labor Arbiter;
b. If the decision, order or award was secured through fraud or coercion, including graft and
corruption;
c. If made purely on questions of law; and/or
d. If serious errors in the findings of fact are raised which, if not corrected, would cause grave
or irreparable damage or injury to the appellant.201
 NLRC has certiorari power.
The first ground above regarding prima facie evidence of abuse of discretion on the part of the
Labor Arbiter is actually an exercise of certiorari power by the NLRC. The case of Triad Security &
Allied Services, Inc. v. Ortega, 202 expressly recognized this certiorari power of the NLRC. 203 Clearly,
according to the 2012 case of Auza, Jr. v. MOL Philippines, Inc.,204 the NLRC is possessed of the
power to rectify any abuse of discretion committed by the Labor Arbiter.
II.
PERFECTION OF APPEAL
1. EFFECT OF PERFECTION OF APPEAL ON EXECUTION.
To reiterate, the perfection of an appeal shall stay the execution of the decision of the Labor
Arbiter except execution for reinstatement pending appeal.205
2. PERFECTION OF APPEAL, MANDATORY AND JURISDICTIONAL.
The perfection of appeal within the period and in the manner prescribed by law is jurisdictional
and non-compliance with the legal requirements is fatal and has the effect of rendering the judgment
final and executory, hence, unappealable.206
3. REQUISITES.
The requisites for perfection of appeal to the NLRC are as follows:
(1) Observance of the reglementary period;
(2) Payment of appeal and legal research fee;
(3) Filing of a Memorandum of Appeal;
(4) Proof of service to the other party; and
(5) Posting of cash, property or surety bond, in case of monetary awards.
The foregoing are discussed below.
III.
REGLEMENTARY PERIOD
1. TWO (2) KINDS OF REGLEMENTARY PERIOD.
The reglementary period depends on where the appeal comes from, viz:
1. Ten (10) calendar days – in the case of appeals from decisions of the Labor Arbiters under
Article 223 of the Labor Code; and
2. Five (5) calendar days –
in the case of appeals from decisions of the DOLE Regional
Director under Article 129 of the Labor Code. 207
Calendar days and not working days.
The shortened period of ten (10) days fixed by Article 223 contemplates calendar days
and not working days.208 The same holds true in the case of the 5-day reglementary period under Article
129 of the Labor Code. Consequently, Saturdays, Sundays and legal holidays are included in reckoning
and computing the reglementary period. 209
2. EXCEPTIONS TO THE 10-CALENDAR DAY OR 5-CALENDAR DAY REGLEMENTARY
PERIOD RULE.
Certain procedural lapses may be disregarded where there is an acceptable reason to excuse
tardiness in the taking of the appeal.210 It is always within the power of the court to suspend its own rules
or to except a particular case from its operation, whenever the purposes of justice require it. 211 Thus,
procedural rules may be waived, dispensed with or relaxed in the interest of substantial justice. The Court
may deign to veer away from the general rule if, on its face, the appeal appears to be absolutely
meritorious.212
The following are the specific instances where the rules on the reckoning of the reglementary
period have not been strictly observed:
1) 10 day (or 5 day) falling on a Saturday,213 Sunday or holiday,214 in which case, the appeal
may be filed in the next working day.
2) Reliance on erroneous notice of decision215 as when the notice expressly states “working
days” and not “calendar days.”
3) Appeal from decisions of Labor Arbiters in direct contempt cases – five (5) calendar days.216
4) Filing of petition for extraordinary remedies from orders or resolutions of Labor Arbiters
or on third party claims – ten (10)calendar days.217
5) When NLRC exercises its power to“correct, amend, or waive any error, defect or
irregularity whether in substance or form”in the exercise of its appellate jurisdiction, as
provided under Article 218(c) of the Labor Code, 218 in which case, the late filing of the
appeal is excused.
6) When technical rules are disregarded under Article 221.219
7) When there are some compelling reasons that justify the allowance of the appeal despite its
late filing such as when it is granted in the interest of substantial justice. 220
th
th
3. SOME PRINCIPLES ON REGLEMENTARY PERIOD.
 The reglementary period is mandatory and not a “mere technicality.”221
 The failure to appeal within the reglementary period renders the judgment appealed from final
and executory by operation of law.222Consequently, the prevailing party is entitled, as a matter of
right, to a writ of execution and the issuance thereof becomes a ministerial duty which may be
compelled through the remedy of mandamus.223
 The date of receipt of decisions, resolutions or orders by the parties is of no moment. For purposes
of appeal, the reglementary period shall be counted from receipt of such decisions, resolutions, or
orders by the counsel or representative of record. 224
 Miscomputation of the reglementary period will not forestall the finality of the judgment. It is in
the interest of everyone that the date when judgments become final and executory should remain
fixed and ascertainable.225
 Date of mailing by registered mail of the appeal memorandum is the date of its filing. 226
 Motion for extension of time to perfect an appeal is not allowed.227 This kind of motion is a
prohibited pleading.228
 Motion for extension of time to file the memorandum of appeal is not allowed.229
 Motion for extension of time to file appeal bond is not allowed.230
IV.
APPEAL FEE AND LEGAL RESEARCH FEE
1. PAYMENT OF APPEAL FEE AND LEGAL RESEARCH FEE, MANDATORY AND
JURISDICTIONAL.
The payment by the appellant of the prevailing appeal fee and legal research fee is both
mandatory and jurisdictional.231 An appeal is perfected only when there is proof of payment of the appeal
fee.232 It is by no means a mere technicality. 233 If not paid, the running of the reglementary period for
perfecting an appeal will not be tolled.234
2. EXCEPTIONS TO THE RULE ON PAYMENT OF APPELLATE COURT DOCKET FEES.
The following are the recognized exceptions to the strict observance of the rule on appeal fee:
(1) most persuasive and weighty reasons; (2) to relieve a litigant from an injustice not commensurate
with his failure to comply with the prescribed procedure; (3) good faith of the defaulting party by
immediately paying within a reasonable time from the time of the default; (4) the existence of special or
compelling circumstances; (5) the merits of the case; (6) a cause not entirely attributable to the fault or
negligence of the party favored by the suspension of the rules; (7) a lack of any showing that the review
sought is merely frivolous and dilatory; (8) the other party will not be unjustly prejudiced thereby; (9)
fraud, accident, mistake or excusable negligence without the appellant's fault; (10) peculiar, legal and
equitable circumstances attendant to each case; (11) in the name of substantial justice and fair play; (12)
importance of the issues involved; and (13) exercise of sound discretion by the judge, guided by all the
attendant circumstances.
Thus, there should be an effort, on the part of the party invoking liberality, to advance a
reasonable or meritorious explanation for his failure to comply with the rules. 235 Consequently, in
instances where the appeal fee was paid belatedly, it was held that the broader interest of justice and the
desired objective of deciding the case on the merits demand that the appeal be given due course. 236
V.
MEMORANDUM OF APPEAL
1. REQUISITES.
The requisites for a valid Memorandum of Appeal are as follows:
1. The Memorandum of Appeal should be verified by the appellant himself in accordance with
the Rules of Court, as amended;237
2. It should be presented in three (3) legibly typewritten or printed copies;
3. It shall state the grounds relied upon and the arguments in support thereof, including the relief
prayed for;
4. It shall contain a statement of the date the appellant received the appealed decision, award or
order; and
5. It shall be accompanied by:
(i) proof of payment of the required appeal fee and legal research fee;
(ii) posting of a cash or surety bond (in case of monetary awards) ; and
(iii) proof of service upon the other party.238
2. REQUIREMENTS NOT JURISDICTIONAL.
The aforesaid requirements that should be complied with in a Memorandum of Appeal are
merely a rundown of the contents of the required appeal memorandum to be submitted by the appellant.
They are not jurisdictional requirements.239 But it must be emphasized that per Navarro v. NLRC,240 the
perfection of an appeal includes the filing, within the prescribed period, of the Memorandum of Appeal
containing, among others, the assignment of error/s, arguments in support thereof, the relief sought and,
in appropriate cases, posting of the appeal bond.
3. SOME PRINCIPLES ON MEMORANDUM OF APPEAL.
 Mere notice of appeal without complying with the other requisites aforestated shall not stop the
running of the period for perfecting an appeal. 241
 Memorandum of appeal is not similar to motion for reconsideration. 242
 Lack of verification in a memorandum of appeal is not a fatal defect. It may easily be corrected by
requiring an oath.243
 Supplemental appeal need not be verified.244 Neither the laws nor the rules require the verification
of the supplemental appeal.245 Furthermore, verification is a formal, not a jurisdictional,
requirement. It is mainly intended as an assurance that the matters alleged in the pleading are true
and correct and not of mere speculation. 246
 An appeal will be dismissed if signed only by an unauthorized representative. 247
 Only complainants who signed the memorandum of appeal are deemed to have appealed the Labor
Arbiter’s decision. The prevailing doctrine in labor cases is that a party who has not appealed cannot
obtain from the appellate court any affirmative relief other than those granted, if any, in the decision
of the lower tribunal.248
 Certificate of non-forum shopping is no longer provided in the 2011 NLRC Rules of
Procedure. It is only required in the initiatory complaint or petition filed with the Labor Arbiter. 249
VI.
PROOF OF SERVICE TO ADVERSE PARTY
1. FAILURE TO SERVE COPY TO ADVERSE PARTY, NOT FATAL.
While it is required that in all cases, the appellant shall furnish a copy of the Memorandum of
Appeal to the other party (appellee) ,250 non-compliance therewith, however, will not be an obstacle to
the perfection of the appeal; nor will it amount to a jurisdictional defect on the NLRC’s taking cognizance
thereof.251
It has long been settled that mere failure to serve a copy of a Memorandum of Appeal upon the
opposing party does not bar the NLRC from entertaining an appeal.252 It may even be dispensed
with since in appeals in labor cases, non-service of a copy of appeal memorandum to the adverse party
is not a jurisdictional defect which calls for the dismissal of the appeal. 253
VII.
POSTING OF BOND
1. WHEN POSTING OF BOND REQUIRED.
Only in case the decision of the Labor Arbiter or the DOLE Regional Director (under Article 129
of the Labor Code) involves a monetary award , that an appeal by the employer may be perfected only
upon the posting of a bond, which shall either be in the form of (1) cash deposit, (2) surety bond or
(3) property
bond,254equivalent
in
amount
to
the
monetary
award, exclusive of damages and attorney’s fees.255 In other words, only monetary awards (such as
unpaid wages, backwages, separation pay, 13 month pay, etc. ) are required to be covered by the bond.
th
Moral and exemplary damages and attorney’s fees are excluded.
2. POSTING OF BOND, MANDATORY AND JURISDICTIONAL.
The provision of Article 223 requiring the posting of a bond is self-executory and does not need
any rule to implement it. The reason for this rule is that the filing of a supersedeas bond for the perfection
of an appeal is both mandatory and jurisdictional. 256
3. SOME PRINCIPLES ON POSTING OF BOND.
 The cash or surety bond required for the perfection of appeal should be posted within the
reglementary period.257 If a party failed to perfect his appeal by the non-payment of the appeal bond
within the 10-calendar day period provided by law, the decision of the Labor Arbiter becomes final
and executory upon the expiration of the said period. 258
 In case the employer failed to post a bond to perfect its appeal, the remedy of the employee is to
file a motion to dismiss the appeal and not a petition for mandamus for the issuance of a writ of
execution.259
 Surety bond must be issued by a reputable bonding company duly accredited by the Commission
(NLRC) or the Supreme Court.260
 The bond shall be valid and effective from the date of deposit or posting, until the case is finally
decided, resolved or terminated, or the award satisfied. 261
 Posting of a bank guarantee or bank certification is not sufficient compliance with the bond
requirement. It is not equivalent to nor can be considered compliance with the cash, surety or
property bond.262
 Cooperatives are not exempted from posting bond. 263
 Government is exempt from posting of bond; government-owned and/or controlled
corporations, however, are not exempt therefrom.264
 Bond is not required for the NLRC to entertain a motion for reconsideration. 265 An appeal
bond is required only for the perfection of an appeal of a Labor Arbiter’s decision involving a
monetary award.266
 Bond is not required to file a Rule 65 petition for certiorari.267
4. JUSTIFICATIONS FOR NON-POSTING OF BOND.
 No monetary award, no bond required. The rule is clear that when the judgment of the Labor
Arbiter does not involve any monetary award, no appeal bond is necessary. 268
 There is no duty to post a bond if the monetary award is not specified in the decisions. The
Labor Arbiter’s decision or order should state the amount awarded. If the amount of the monetary
award is not contained or fixed in the judgment, the appeal bond is not required to be posted. 269
 In case of conflict between the body and the fallo of the decision, the latter should prevail. 270
5. JUSTIFICATIONS FOR ALLOWANCE OF APPEAL DESPITE DELAY IN POSTING OF
BOND.
 The rules on posting of bond have been liberally construed and relaxed considering the substantial
merits of the case and the existence of exceptional circumstances justifying the same, such as:271
(1) Fundamental consideration of substantial justice;
(2) Prevention of miscarriage of justice or of unjust enrichment; and
(3) Existence of special circumstances in the case combined with its legal merits as well as the
amount and the issue involved.272
Relevant cases.
The 2011 case of Semblante and Pilar v. CA, Gallera de Mandaue,273 where the respondents’
failure to post the required appeal bond within the 10-calendar day reglementary period was excused
because the High Court found it compelling to rule on the issue of whether the petitioners, who worked
as masiador and sentenciador in the cockpit of respondents, were employees of the latter. It thus
declared that they were not employees but independent contractors since their relationship with
respondents failed to pass muster the four-fold test of employment.
The 2010 case of Intertranz Container Lines, Inc. v. Bautista,274 where relaxation of the rule
was made because it is clear from the records that the petitioners never intended to evade the posting
of an appeal bond. They exerted earnest efforts to abide by the law and the rules on appeal with a
notice of appeal, appeal memorandum, and an appeal bond for P531,000.00. They also moved to
reduce the appeal bond. The petitioners might or might not have been aware that the accreditation of
the bonding company expired on July 31, 2005 but when the bond was posted on July 11, 2005, the
bonding company’s accreditation and the bond it issued were still valid. Although the petitioners failed
to file a replacement bond within ten (10) days from receipt of the NLRC order requiring them to do so,
again, it cannot be said that they intended to ignore the order.
In Your Bus Line v. NLRC,275 where the Labor Arbiter’s decision failed to state the exact total
amount due which would be the basis of the computation of the bond, the failure of the petitioner to post
the bond was excused because it was misled by the notice of the decision which did not mention that a
bond must be filed. The lawyer for petitioner relied on such notice and considering this circumstance as
an excusable mistake, the Supreme Court allowed petitioner to file the bond and appeal from the decision
of the Labor Arbiter.
In Erectors, Inc. v. NLRC,276 where the Labor Arbiter erroneously included moral and
exemplary damages in the computation of the appeal bond.
VII-A.
RULE ON REDUCTION OF APPEAL BOND
1. THE AMOUNT OF APPEAL BOND MAY BE REDUCED.
The general rule is that the appeal bond that should be posted should be equivalent to the
monetary award of the Labor Arbiter.277 Its reduction is neither provided for in the Labor Code nor in
its implementing rules. In practice, however, the NLRC has allowed the reduction of the bond upon
showing of meritorious grounds. And the validity of this practice has been given judicial imprimatur in
the case of Star Angel Handicraft v. NLRC. 278
2. REQUISITES.
Under the latest 2011 NLRC Rules of Procedure, a motion to reduce bond may be allowed
provided the following conditions are complied with:
(1) The motion should be filed within the reglementary period;
(2) The motion to reduce bond should be based on meritorious grounds; and
(3) The motion should be accompanied by a partial bond, the amount of which should be
reasonable in relation to the monetary awards.279
a. Guidelines to determine when case is meritorious.
The 2013 case of Maynilad Water Supervisors Association v. Maynilad Water Services, Inc.
,
280
enunciates the following guidelines to determine existence of meritorious cases which include
instances in which:
(1) There was substantial compliance with the Rules;281
(2) Surrounding facts and circumstances constitute meritorious grounds to reduce the bond;
(3) A liberal interpretation of the requirement of an appeal bond would serve the desired
objective of resolving controversies on the merits; or
(4) The appellants, at the very least, exhibited their willingness and/or good faith by posting
a partial bond during the reglementary period.282
3. SOME PRINCIPLES ON REDUCTION OF BOND.
 Bond may be reduced when decision failed to specify the exact amount of monetary award from
which the amount of the appeal bond is to be based.283
 Conversely, the reduction of the bond will not be warranted not only when no meritorious ground
is shown to justify the same but when the appellant absolutely failed to comply with the requirement
of posting a bond, even if partial; or when circumstances show the employer’s unwillingness to
ensure the satisfaction of its workers’ valid claims.284
 Monetary award running into millions is not justification to reduce bond. 285
 Financial difficulties or financial incapacity is not sufficient grounds to reduce bond. What
appellant has to pay is a moderate and reasonable sum for the premium for such bond. 286
 The full amount of the monetary award should still be posted within the reglementary period even
if the appellant has filed a motion to reduce bond. 287
 Alternative remedy is to pay partial appeal bond while motion to reduce bond is pending with the
NLRC. Examples:
(1)
Rosewood Processing, Inc. v. NLRC. 288 - The petitioner was declared to have substantially
complied with the rules by posting a partialsurety bond of P50,000.00 while its motion to
reduce the appeal bond in the amount of P789,154.39 was pending before the NLRC.
(2)
Following Rosewood, the filing by petitioners of a motion to reduce appeal bond to P100,000,
enclosing a bond in that amount, from the total monetary award of P3,132,335.57 was
given imprimatur in the 2010 case of Pasig Cylinder Mfg. , Corp. v. Rollo. 289
 The partial bond must be posted during the reglementary period. The late filing of the bond divests
the NLRC of its jurisdiction to entertain the appeal since the decision of the Labor Arbiter has
already become final and executory with the lapse of the reglementary period. 290
 Partial bond posted must not be inadequate. In Sapitan v. JB Line Bicol Express, Inc. ,291 the
partial bond of P200,000 was found to be inadequate for the liability in the sum of P9,097,624.00.
------------oOo------------
Chapter Eight
PROCEDURE AND JURISDICTION
TOPICS PER SYLLABUS
B. National Labor Relations Commission (NLRC)
1. Jurisdiction
2. Effect of NLRC reversal of Labor Arbiter’s order of reinstatement
3. Remedies
4. Certified cases
B.
NATIONAL LABOR RELATIONS COMMISSION (NLRC)
1. NATURE.
The NLRC is an administrative quasi-judicial body. It is an agency attached to the DOLE solely
for program and policy coordination only. 1 It is in charge of deciding labor cases through compulsory
arbitration.2
2. COMPOSITION OF THE NLRC.
The NLRC is
called “Commissioners.” 3
composed
of
a
Chairman
and
twenty-three
(23)
members
The NLRC has tripartite composition. Eight (8) members thereof should be chosen only from
among the nominees of the workers sectorand another eight (8) from the employers sector. The
Chairman and the seven (7) remaining members shall come from the public sector, with the latter to be
chosen preferably from among the incumbent Labor Arbiters.4 The validity of the tripartite composition
of the NLRC was recognized by the Supreme Court in the case of Mayor v. Hon. C. Macaraig. 5
3. COMMISSION EN BANC.
The Commission sits en banc only for the following purposes:
(1) To promulgate rules and regulations governing the hearing and disposition of cases before
any of its divisions and regional branches; and
(2) To formulate policies affecting its administration and operations. 6
The NLRC does not sit en banc to hear and decide cases. The banc has no adjudicatory power.
This function is reposed in the eight (8) divisions thereof.
4. NLRC’S EIGHT (8) DIVISIONS.
The NLRC is divided into eight (8) divisions, each one is comprised of three (3) members. 7 Each
Division shall consist of one (1) member from the public sector who shall act as its Presiding
Commissioner and one (1) member each from the workers and employers sectors, respectively. 8
Of the eight (8) Divisions, the First, Second, Third, Fourth, Fifth and Sixth Divisions shall have
exclusive territorial jurisdiction over appealed cases coming from Luzon; the Seventh Division, appealed
cases from the Visayas Region; and the Eighth Division, appealed cases from Mindanao including those
from the Autonomous Region for Muslim Mindanao (ARMM) .9
The various Divisions of the Commission have exclusive appellate jurisdiction over cases
within their respective territorial jurisdictions.10
However, the Commission sitting en banc may, on temporary or emergency basis, allow cases
within the jurisdiction of any division to be heard and decided by any other division whose docket allows
the additional workload provided that such transfer will not expose litigants to unnecessary additional
expenses.11
As earlier pointed out, under its present legal set up, the Commission exercises its
adjudicatory and all other powers, functions, and duties through its eight (8) Divisions.12
1.
JURISDICTION
1. TWO (2) KINDS OF JURISDICTION.
The NLRC exercises two (2) kinds of jurisdiction:
1. Exclusive original jurisdiction; and
2. Exclusive appellate jurisdiction.13
2. EXCLUSIVE ORIGINAL JURISDICTION.
The NLRC exercises exclusive and original jurisdiction over the following cases:
a. Petition for injunction in ordinary labor disputes to enjoin or restrain any actual or
threatened commission of any or all prohibited or unlawful acts or to require the performance
of a particular act in any labor dispute which, if not restrained or performed forthwith, may
cause grave or irreparable damage to any party. 14
b. Petition for injunction in strikes or lockouts under Article 264 of the Labor Code.15
c. Certified cases which refer to labor disputes causing or likely to cause a strike or lockout in
an industry indispensable to the national interest, certified to it by the Secretary of Labor
and Employment for compulsory arbitration by virtue of Article 263(g) of the Labor Code. 16
d. Petition to annul or modify the order or resolution (including those issued during execution
proceedings) of the Labor Arbiter.17
3. EXCLUSIVE APPELLATE JURISDICTION.
The NLRC exercises exclusive appellate jurisdiction over the following:
a. All cases decided by the Labor Arbiters.18
b. Cases decided by the DOLE Regional Directors or hearing officers involving small money
claims under Article 129 of the Labor Code.
c. Contempt cases decided by the Labor Arbiters.19
4. SIGNIFICANT DISTINCTIONS BETWEEN JURISDICTION OF LABOR ARBITERS AND
NLRC.
 The Commission (NLRC) does not have original jurisdiction over the cases enumerated in Article
217 over which Labor Arbiters have original andexclusive jurisdiction. Thus, if a claim does not fall
within the original and exclusive jurisdiction of the Labor Arbiter, the NLRC cannot have appellate
jurisdiction thereover.20
 Under the Labor Code, the authority to conduct compulsory arbitration is principally vested upon
Labor Arbiters.21 It is only in the exercise by the NLRC of its original jurisdiction that it discharges
compulsory arbitration; hence, the exercise by the NLRC of its appellate jurisdiction is not in
the nature of compulsory arbitration. This is so because it is the Labor Arbiter who is clothed
with the authority to conduct compulsory arbitration in cases involving labor disputes falling under
Article 217 of the Labor Code. On appeal, the NLRC merely reviews the Labor Arbiter’s decision;
for as an appellate body, it is not, generally, a trier of facts. 22 Hence, the exercise by the NLRC of
its appellate jurisdiction cannot be considered as part of the compulsory arbitration process. 23
2.
EFFECT OF NLRC REVERSAL OF
LABOR ARBITER’S ORDER OF REINSTATEMENT
1. ENTITLEMENT TO REINSTATEMENT WAGES.
From the moment an employee is ordered reinstated by the Labor Arbiter on the basis of the
finding that his dismissal is illegal, up to the time that an appellate tribunal like the NLRC, Court of
Appeals and Supreme Court, as the case may be, reverses the said finding, the employee is generally
entitled to his so-called “reinstatement wages.” The issue of entitlement to this benefit has been the
subject of several doctrinal rulings now known as follows:
(1) Roquero doctrine;
(2) Genuino doctrine; and
(3) Garcia doctrine.
1.1. ROQUERO DOCTRINE.
The Roquero doctrine,24 enunciates the rule that in cases where an employee is ordered
reinstated by the Labor Arbiter and the employer fails or refuses to obey the reinstatement order but
initiates an appeal, the employer’s success in having the decision of the Labor Arbiter’s decision reversed
on appeal will not exculpate him from the liability to pay the reinstatement wages of the employee
reckoned and computed from the time the employee was ordered reinstated by the Labor Arbiter until
the date of its reversal on appeal.
In this case of Roquero, the dismissal of petitioners Roquero and Pabayo 25 was held valid by
the Labor Arbiter.26 On appeal to the NLRC, the Labor Arbiter’s decision was reversed and consequently,
petitioners were ordered reinstated.27 They did not appeal from that decision of the NLRC but filed a
motion for the issuance of a writ of execution of the order of reinstatement. The Labor Arbiter granted
the motion but respondent PAL refused to comply with the said order on the ground that it has filed a
Petition for Review before the Supreme Court.28 Subsequently, the CA reversed the decision of the
NLRC and ruled that the dismissal of petitioners was valid.29 The Supreme Court later affirmed the CA’s
decision but it held that the unjustified refusal by PAL to reinstate Roquero who, unlike Pabayo, has not
amicably settled his case, entitles him to the payment of his reinstatement wages effective from the time
PAL failed to reinstate him despite the issuance of the writ of execution. Thus, it was mandatory for PAL
to actually reinstate Roquero or reinstate him in the payroll. Having failed to do so, the former must pay
the latter the salaries he is entitled to, as if he was reinstated, from the time of the decision of the NLRC
until the finality of the decision of the Supreme Court.
Following Roquero, it is now the norm that even if the order of reinstatement of the Labor
Arbiter is reversed on appeal, it is obligatory on the part of the employer to reinstate and pay the wages
of the dismissed employee during the period of appeal until its reversal by the NLRC, or the Court of
Appeals or the Supreme Court, as the case may be. If the employee has been reinstated during the appeal
period and such reinstatement order is subsequently reversed on appeal with finality, the employee is not
required to reimburse whatever salaries he has received for he is entitled to such, more so if he actually
rendered services during the said period.30
1.2. GENUINO DOCTRINE.
The essence of the Genuino doctrine31 is that the employee who is reinstated in the payroll, as
distinguished from actual reinstatement, should refund the salaries he received if his dismissal is finally
found legal on appeal. This doctrine, however, does not apply if the employee was actually reinstated to
his former position or not reinstated at all pending appeal.
In effect, the Genuino ruling qualified the earlier Roquero doctrine on the issue of whether the
dismissed employee who is reinstated in the payroll and not actually to his former position has the
obligation to refund what he has received as and by way of salaries during his payroll reinstatement if
and when his dismissal is held valid and legal on appeal. In this case, the Supreme Court had taken the
view that “(i)f the decision of the Labor Arbiter is later reversed on appeal upon the finding that the
ground for dismissal is valid, then the employer has the right to require the dismissed employee on payroll
reinstatement to refund the salaries he/she received while the case was pending appeal, or it can be
deducted from the accrued benefits that the dismissed employee was entitled to receive from his/her
employer under existing laws, collective bargaining agreement provisions, and company
practices. However, if the employee was reinstated to work during the pendency of the appeal, then the
employee
is
entitled
to
the
compensation received for actual services rendered without need of refund.” 32
1.3. GARCIA DOCTRINE.
a. Modification of the Roquero and Genuino doctrines.
The Roquero and Genuino doctrines have been modified by the Garcia doctrine.33 In this case,
while respondent Philippine Airlines (PAL) was undergoing rehabilitation receivership, an illegal
dismissal case was filed by petitioners34 against respondent PAL which was decided by the Labor Arbiter
in their favor thus ordering PAL to, inter alia, immediately comply with the reinstatement aspect of the
decision. On appeal, the NLRC reversed the ruling of the Labor Arbiter and held that their dismissal was
valid. The issue of whether petitioners may collect their reinstatement wages during the period between
the Labor Arbiter’s order of reinstatement pending appeal and the NLRC decision overturning that of
the Labor Arbiter, now that respondent PAL has terminated and exited from rehabilitation proceedings,
was resolved in the negative by the Supreme Court. The following ratiocinations were cited:
(1) Re: modification of the Genuino doctrine. - The “refund doctrine” in Genuino should
no longer be observed because it easily demonstrates how a favorable decision by the Labor Arbiter
could harm, more than help, a dismissed employee. The employee, to make both ends meet, would
necessarily have to use up the salaries received during the pendency of the appeal, only to end up having
to refund the sum in case of a final unfavorable decision. It is mirage of a stop-gap leading the employee
to a risky cliff of insolvency. Further, the Genuino ruling not only disregards the social justice principles
behind the rule, but also institutes a scheme unduly favorable to management. Under such scheme, the
salaries dispensedpendente lite merely serve as a bond posted in installment by the employer. For in the
event of a reversal of the Labor Arbiter’s decision ordering reinstatement, the employer gets back the
same amount without having to spend ordinarily for bond premiums. This circumvents, if not directly
contradicts, the proscription that the “posting of a bond [even a cash bond] by the employer shall not stay
the execution for reinstatement.”
(2) Re: modification of the Roquero doctrine. – The Roquero doctrine was reaffirmed but
with the modification that “[a]fter the Labor Arbiter’s decision is reversed by a higher tribunal, the
employee may be barred from collecting the accrued wages, if it is shown that the delay in enforcing
the reinstatement pending appeal was without fault on the part of the employer.”
b. Two-fold test under the Garcia doctrine.
Under Garcia, the test to determine the liability of the employer (who did not reinstate the
employee pending appeal) to pay the wages of the dismissed employee covering the period from the
time he was ordered reinstated by the Labor Arbiter to the reversal of the Labor Arbiter’s decision
either by the NLRC, the Court of Appeals or the High Court, is two-fold, to wit:
(1) There must be actual delay or the fact that the order of reinstatement pending appeal was
not executed prior to its reversal; and
(2) The delay must not be due to the employer’s unjustified act or omission. If the delay is
due to the employer’s unjustified refusal, the employer may still be required to pay the
salaries notwithstanding the reversal of the Labor Arbiter’s decision.
In Garcia, there was actual delay in reinstating petitioners but respondent PAL was justified in
not complying with the reinstatement order of the Labor Arbiter because during the pendency of the
illegal dismissal case, the SEC placed respondent PAL under an Interim Rehabilitation Receiver who,
after the Labor Arbiter rendered his decision, was replaced with a Permanent Rehabilitation
Receiver. It is settled that upon appointment by the SEC of a rehabilitation receiver, all actions for
claims
before
any
court,
tribunal
or
board
against
the
corporation
shall ipso
jure be suspended. Resultantly, respondent PAL’s “failure to exercise the alternative options of actual
reinstatement and payroll reinstatement was thus justified.
Such being the case, respondent’s
obligation to pay the salaries pending appeal, as the normal effect of the non-exercise of the options,
did not attach.”
c. Cases decided after the promulgation of the Garcia doctrine.
Subsequent to Garcia, some of the cases decided in accordance with this doctrine are as follows:
(1) College of the Immaculate Conception v. NLRC;35
(2) Islriz Trading v. Capada;36
(3) Pfizer, Inc. v. Velasco;37 and
(4) C. Alcantara & Sons, Inc. v. CA.38
In the 2010 case of College of Immaculate Conception , it was held, following Garcia, that
the subsequent reversal of the Labor Arbiter's findings by the NLRC does not mean that respondent
employee should reimburse petitioner all the salaries and benefits he received pursuant to the immediate
execution of the Labor Arbiter's erroneous decision ordering his reinstatement as Department Dean when
he should have been reinstated only as a full-time faculty member - the position he held when he filed
the complaint for illegal dismissal.
In the 2011 case of Islriz Trading, the two-fold test in Garcia was used in holding that
respondent-employees are entitled to collect their wages during the period between the Labor Arbiter’s
order of reinstatement pending appeal and the NLRC Resolution overturning that of the Labor Arbiter.
Unlike in Garcia where PAL, as the employer, was then under corporate rehabilitation, Islriz Trading
here did not undergo rehabilitation or was under any analogous situation which would justify petitioner’s
non-exercise of the options provided under Article 223 of the Labor Code. Notably, what petitioner gave
as reason in not immediately effecting reinstatement after he was served with the Writ of Execution dated
April 22, 2002 was that he would first refer the matter to his counsel as he could not effectively act on
the order of execution without the latter’s advice. He gave his word that upon conferment with his lawyer,
he will inform the Office of the Labor Arbiter of his action on the writ. Petitioner, however, without any
satisfactory reason, failed to fulfill this promise and respondents remained to be not reinstated until the
NLRC resolved petitioner’s appeal.
In the 2011 case of Pfizer, Inc. v. Velasco, the sole issue presented is whether or not the Court
of Appeals committed a serious but reversible error when it ordered petitioner Pfizer to pay respondent
Velasco wages from the date of the Labor Arbiter’s decision ordering her reinstatement until November
23, 2005, when the Court of Appeals rendered its decision declaring Velasco’s dismissal valid. In
upholding the CA’s ruling, the High Court applied the ruling in Roquero as far as the payment of
reinstatement wages is concerned and re-asserted the Garcia doctrine, in regard to the illogical and unjust
effects of the "refund doctrine" erroneously espoused in Genuino.
In the 2012 case of C. Alcantara & Sons, Inc. , the Labor Arbiter found the strike illegal and
sustained the dismissal of the union officers, but ordered the reinstatement of the striking union members
for lack of evidence showing that they committed illegal acts during the illegal strike. This decision,
however, was later reversed by the NLRC.39 Since pursuant to Article 223 of the Labor Code and wellestablished jurisprudence, the decision of the Labor Arbiter reinstating a dismissed or separated
employee, insofar as the reinstatement aspect is concerned, is immediately executory even pending
appeal, petitioner CASI is liable to pay the striking union members their accrued wages for four (4)
months and nine (9) days, which is the period from the notice of the Labor Arbiter’s order of
reinstatement until the reversal thereof by the NLRC.40
2. RECKONING OF THE PERIOD COVERED BY ACCRUED REINSTATEMENT WAGES.
To clarify, employees ordered reinstated by the Labor Arbiter are entitled to accrued
reinstatement wages only from the time the employer received a copy of the Labor Arbiter’s
decision declaring the employees’ termination illegal and ordering their reinstatement up to the date of
the decision of the appellate tribunal41 overturning that of the Labor Arbiter. It is not accurate
therefore to state that such entitlement commences “from the moment the reinstatement order
was issued up to the date when the same was reversed by a higher court without fear of refunding what
he had received.” 42
3. THE MANNER OF EFFECTING REINSTATEMENT AND PROMPTNESS OF
COMPLIANCE THEREWITH BY EMPLOYER, IMMATERIAL.
According to the case of College of the Immaculate Conception v. NLRC, 43 the manner by
which the employer complies with the order of immediate reinstatement pending appeal or the
promptness of his compliance therewith is immaterial, as illustrated in the following two (2) scenarios:
Situation No. 1. - The Labor Arbiter ruled in favor of the dismissed employee and ordered his
reinstatement. However, the employer did not immediately comply with the Labor Arbiter 's directive.
On appeal, the NLRC reversed the Labor Arbiter and found that there was no illegal dismissal. In this
scenario, it is ruled that the employee is entitled to payment of his salaries and allowances pending
appeal.44
Situation No. 2. - The Labor Arbiter ruled in favor of the dismissed employee and ordered the
latter's reinstatement. This time, the employer complied by reinstating the employee in the payroll. On
appeal, the Labor Arbiter 's ruling was reversed, finding that there was no case of illegal dismissal but
merely a temporary sanction, akin to a suspension. Here, It must also be ruled that the employee cannot
be required to reimburse the salaries he received because if he was not reinstated in the payroll in the
first place, the ruling in Situation No. 1 will apply, i.e. , the employee is entitled to payment of his salaries
and allowances pending appeal.45
Thus, either way one looks at it, at the end of the day, the employee gets his salaries and
allowances pending appeal. The only difference lies as to the time when the employee gets it.
4. SOME PRINCIPLES ON REINSTATEMENT WAGES.
 Employer is not liable to pay any reinstatement backwages if reinstatement is ordered not by the
Labor Arbiter but by the NLRC on appeal and it was not executed by writ and its finding of illegal
dismissal is later reversed by the Court of Appeals and/or Supreme Court. 46
 Payroll-reinstated employee is entitled not only to reinstatement wages but also to other benefits
during the period of payroll reinstatement until the illegal dismissal case is reversed by a higher
tribunal.47
 Award of additional backwages and other benefits from the time the Labor Arbiter ordered
reinstatement until actual or payroll reinstatement is proper and valid.48
 Backwages include the period when employee should have been reinstated by order of Labor
Arbiter.49
3.
REMEDIES
1. REMEDIES UNDER ARTICLE 218.
Besides the remedy of appeal granted under Article 223 of the Labor Code, the following
remedies are available under other provisions of the Labor Code and/or the 2011 NLRC Rules of
Procedure:
a. Under Article 218 of the Labor Code.
1. Administering of oaths;
2. Summoning of parties to a controversy;
3. Issuing subpoenas duces tecum and ad testificandum;
4. Investigating a question, matter or controversy within its jurisdiction;
5. Conduct its own proceedings and for this purpose to:
a. Conduct investigation for the determination of the merits of a question, matter or
controversy within its jurisdiction;
b. Proceed to hear and determine the disputes presented before it even in the absence of any
party thereto who has been summoned or served with notice to appear;
c. Conduct its proceedings or any part thereof in public or in private;
d. Adjourn its hearings to any time and place;
e. Refer technical matters or accounts to an expert and to accept his report as evidence after
hearing of the parties upon due notice;
f. Direct parties to be joined in or excluded from the proceedings;
g. Correct, amend, or waive any error, defect or irregularity whether in substance or in form;
h. Give all such directions as it may deem necessary or expedient in the determination of the
dispute before it; and
i. Dismiss any matter or refrain from further hearing or from determining the dispute or part
thereof, where it is trivial or where further proceedings by the Commission are not
necessary or desirable.50
6. Holding any person in direct or indirect contempt and impose appropriate penalties therefor
in accordance with law; and
7. Issuing temporary restraining order (TRO) and prohibitory or mandatory injunction.
b. Additional remedies.
(1) Conciliation and mediation per Article 221 of the Labor Code, 51 2011 NLRC Rules of
Procedure52 and R.A. No. 1039653 [March 14, 2013].
(2) Conduct of ocular inspection per Article 219 of the Labor Code.
(3) Grant of extraordinary remedies per 2011 NLRC Rules of Procedure.54
2. EXTRAORDINARY REMEDIES.
a. Nature.
The power of the Commission (NLRC) to grant extraordinary remedies mentioned in No.
3 above is not provided in the Labor Code or in any other laws. It is a newly created remedy which saw
light for the first time under Rule XII of the 2011 NLRC Rules of Procedure. Past NLRC Rules did not
provide therefor.
Since this is a recent newly minted remedy, there has yet been no decision by the Supreme Court
dwelling on its validity.
What is clear though is that this remedy is not equivalent to nor a substitute for appeal. It is
directed against “orders” or “resolutions” issued by the Labor Arbiter in the course of the proceedings
before him where the remedy of appeal is not available. Notably, the remedy of appeal is available only
against the main decision of a case. But orders or resolutions issued prior to the rendition of the decision
in the main as well as orders or resolutions issued thereafter, specifically during the execution stage, are
subject of this rule on extraordinary remedies.
b. Grounds.
The petition filed under this Rule may be entertained only on any of the following grounds:
(a) If there is prima facie evidence of abuse of discretion on the part of the Labor Arbiter;
(b) If serious errors in the findings of facts are raised which, if not corrected, would cause grave
or irreparable damage or injury to the petitioner;
(c) If a party by fraud, accident, mistake or excusable negligence has been prevented from
taking an appeal;
(d) If made purely on questions of law; or
(e) If the order or resolution will cause injustice if not rectified. 55
c. Initiation through verified petition.
To secure these extraordinary remedies, a party aggrieved by any order or resolution of the
Labor Arbiter including those issued during execution proceedings may file a verified petition to annul
or modify such order or resolution. The petition may be accompanied by an application for the issuance
of a temporary restraining order and/or writ of preliminary or permanent injunction to enjoin the Labor
Arbiter, or any person acting under his/her authority, to desist from enforcing said resolution or order. 56
d. When and where filed.
Not later than ten (10) calendar days from receipt of the order or resolution of the Labor Arbiter,
the aggrieved party may file a petition with the Commission furnishing a copy thereof to the adverse
party.57
e. Requisites for validity of petition.
The petition for extraordinary remedy shall:
(1) be accompanied by a clear original or certified true copy of the order or resolution assailed,
together with clear copies of documents relevant or related to the said order or resolution
for the proper understanding of the issue/s involved;
(2) contain the arbitral docket number and appeal docket number, if any;
(3) state the material date showing the timeliness of the petition;
(4) be verified by the petitioner himself/herself in accordance with Section 4, Rule 7 of the
Rules of Court, as amended;58
(5) be in the form of a memorandum which shall state the ground/s relied upon, the argument/s
in support thereof and the reliefs prayed for;
(6) be in three (3) legibly written or printed copies; and
(7) be accompanied by:
(i) certificate of non-forum shopping;
(ii) proof of service upon the other party/ies and the Labor Arbiter who issued the order or
resolution being assailed or questioned; and
(iii) proof of payment of the required fees.59
f. Petition constitutes exception to the rule that no appeal may be instituted from Labor
Arbiter’s order arising from execution proceedings or incidents thereof.
The uniqueness of this remedy is underscored by the fact that the initiation and filing of the
petition for extraordinary remedies constitutes the exception to the rule that no appeal from the order or
resolution issued by the Labor Arbiter during the execution proceedings or in relation to incidents other
than a decision or disposition of the case on the merits, shall be allowed or acted upon by the
Commission.60
g. Effect of filing of petition.
1. On the proceedings before the Labor Arbiter.
Upon filing of the petition, the proceedings before the Labor Arbiter shall continue unless
restrained.61
2. On execution.
In case of execution, the proceedings in accordance with Rule XI62 of the 2011 NLRC Rules of
Procedure shall not be suspended, but no money collected or credit garnished may be released or
personal properties levied upon be sold by public auction within fifteen (15) calendar days from the filing
of the petition. If no temporary restraining order or writ of preliminary injunction is issued within the
said period, the money collected or credit garnished shall be released and/or the properties levied upon
sold by public auction and the proceeds of the sale applied, to satisfy the judgment.
In case of execution proceedings, the Labor Arbiter shall immediately inform in writing the
Commission or the Division where the petition is pending of the satisfaction of the judgment, and, if
circumstances warrant, the Commission shall dismiss the petition for being moot. The records of the case
shall not be elevated to the Commission unless otherwise ordered. In the event of filing of a subsequent
petition under the Rules63 involving the same issues, the suspension of the release of money collected or
credit garnished or the suspension of auction sale over properties levied upon under the first paragraph
shall not apply.64
h. Issuance of ex-parte temporary restraining order (TRO) .
If it shall appear from facts shown by the verified application and affidavits that great and
irreparable damage and/or injury would result to the petitioner before the petition can be resolved, the
Commission may issue a temporary restraining order ex-parte effective for a non-extendible period of
twenty (20) calendar days from service on the private respondent. 65
i. Issuance of writ of preliminary injunction.
Upon the filing of a verified application for injunctive relief, together with supporting affidavits
and documents, the Commission may issue a writ of preliminary injunction based on any of the
applicable grounds provided for in Section 3, Rule 58 of the Rules of Court66 for the preservation of the
rights of the parties pending resolution of the petition. The writ of preliminary injunction shall be
effective for a non-extendible period of sixty (60) calendar days from service on the private respondent. 67
j. Effect of issuance of TRO or writ of preliminary injunction.
The issuance of a temporary restraining order or a writ of preliminary injunction, unless
otherwise declared by the Commission, shall not suspend the proceedings before the Labor Arbiter or
stay the implementation of the writ of execution but shall only restrain or enjoin such particular act/s as
therein decreed to be restrained or enjoined.68
k. Posting of cash bond.
In the issuance of a temporary restraining order or writ of preliminary injunction, the
Commission shall require the posting of a cash bond in the amount of Fifty Thousand Pesos (P50,000.00)
, or such higher amount as may be determined by the Commission, to recompense those enjoined for any
loss, expense or damage caused by the improvident or erroneous issuance of such order or injunction,
including all reasonable costs.69 An additional cash bond may be required by the Commission in the
issuance of a writ of preliminary injunction.70
The temporary restraining order or writ of preliminary injunction shall become effective only
upon posting of the required cash bond.71
In the event that the application for a writ of preliminary injunction is denied or not resolved
within the said period, the temporary restraining order is deemed automatically vacated.72
l. Resolution of petition.
If the Commission finds that the allegations of the petition are true, it shall:
(a) render judgment for the relief prayed for or to which the petitioner is entitled; and/or
(b) grant a final injunction perpetually enjoining the Labor Arbiter or any person acting under
his/her authority from the commission of the act/s or confirming the preliminary
injunction.73
However, the Commission may dismiss the petition if it finds:
(1) That the same is patently without merit;
(2) That it was prosecuted manifestly for delay; or
(3) That the questions raised therein are too unsubstantial to require consideration. 74
m. Recovery from injunction bond.
The amount of damages that may be recovered by the private respondent from the injunction
bond of the petitioner shall be ascertained and awarded in the decision/order/resolution finally disposing
of the issue on the application for injunction.75
4.
CERTIFIED CASES
1. CERTIFIED LABOR DISPUTES.
“Certified labor disputes” are national interest cases certified by the DOLE Secretary to the
Commission (NLRC) 76 for compulsory arbitration under Article 263(g) of the Labor Code.77
2. EFFECTS OF CERTIFICATION OF LABOR DISPUTES.
The certification of a labor dispute to the NLRC has the following effects:
(1) On intended or impending strike or lockout. - Upon certification, the intended or
impending strike or lockout is automatically enjoined, notwithstanding the filing of any motion for
reconsideration of the certification order or the non-resolution of any such motion which may have been
duly submitted to the DOLE Secretary.78
(2) On actual strike or lockout. - If a work stoppage has already taken place at the time of the
certification, all striking or locked out employees shall immediately return to work and the employer
shall immediately resume operations and readmit all workers under the same terms and conditions
prevailing before the strike or lockout.79
(3) On cases already filed or may be filed. - All cases between the same parties, except where
the certification order specifies otherwise the issues submitted for arbitration which are already filed or
may be filed, and are relevant to or are proper incidents of the certified case, shall be considered
subsumed or absorbed by the certified case, and shall be decided by the appropriate Division of the
Commission.80
(4) On other pending cases. - The parties to a certified case, under pain of contempt, shall
inform their counsels and the Division concerned of all cases pending with the Regional Arbitration
Branches and the Voluntary Arbitrators relative or incident to the certified case before it. 81
(5) On which Division should take cognizance of the certified case in case entity has several
workplaces in different regions.- Whenever a certified labor dispute involves a business entity with
several workplaces located in different regions, the Division having territorial jurisdiction over the
principal office of the company shall acquire jurisdiction to decide such labor dispute; unless the
certification order provides otherwise.82
 Same effect of certification to the NLRC as in cases assumed directly by DOLE Secretary.
The effects described above are also applicable when the DOLE Secretary directly assumes
jurisdiction over a labor dispute affecting industries imbued with national interest and decides it himself.
3. ILLUSTRATIVE CASES.
In Samahang Manggagawa sa Sulpicio Lines, Inc. – NAFLU v. Sulpicio Lines, Inc. , 83 the
labor dispute was certified to the NLRC by the DOLE Secretary for compulsory arbitration. The
petitioner contends that the Labor Arbiter, not the NLRC, should have taken cognizance of the complaint
for “illegal strike/clearance for termination” filed by the respondent. The Supreme Court, in disagreeing
with this proposition, citedInternational Pharmaceuticals, Inc. v. Secretary of Labor and
Employment,84 andPASVIL/Pascual Liner, Inc. Workers Union-NAFLU v. NLRC,85 where it was
held that in the same manner that the DOLE Secretary is granted under Article 263(g) the authority to
assume jurisdiction over a labor dispute, necessarily this authority must include and extend to all
questions and controversies arising therefrom, including cases over which the Labor Arbiter has
exclusive jurisdiction. When the DOLE Secretary certifies a labor dispute to the NLRC for compulsory
arbitration, the latter is concomitantly empowered to resolve all questions and controversies arising
therefrom including cases otherwise belonging originally and exclusively to the Labor Arbiter.
In Interphil Laboratories Employees Union-FFW v. Interphil Laboratories, Inc. ,86 prior
to the assumption, a petition to declare the strike illegal was filed and has been pending before a Labor
Arbiter of the NLRC. The DOLE Secretary, after finding that the issues raised in the illegal strike case
would require a formal hearing and the presentation of evidentiary matters, directed the Labor Arbiters
before whom cases were pending, to proceed with the hearings of the cases before them and to thereafter
submit their report and recommendation to his office. Later, the report and recommendation was
submitted to the Secretary which declared the strike illegal and consequently ordered the dismissal of
the union officers. The Supreme Court pronounced that the issuance of the assailed orders of the DOLE
Secretary is within his province as authorized by Article 263(g) and Article 217(a) (5) of the Labor Code
which should be taken conjointly and rationally construed to subserve the objective of the jurisdiction
vested in him. Article 217 of the Labor Code is not without, but contemplates, exceptions thereto. This
is evident from the opening proviso therein reading “(e)xcept as otherwise provided under this Code xxx.
” Plainly, Article 263(g) of the Labor Code was meant to make both the Secretary (or the various regional
directors) and the Labor Arbiters share jurisdiction, subject to certain conditions. Otherwise, the
Secretary would not be able to effectively and efficiently dispose of the primary dispute. To hold the
contrary may even lead to the absurd and undesirable result wherein the Secretary and the Labor Arbiter
concerned may have diametrically opposed rulings. It is fundamental that a statute is to be read in a
manner that would breathe life into it, rather than defeat it.
4. EXECUTION OF JUDGMENT IN CERTIFIED CASES.
In all certified cases, it is the NLRC, and not the DOLE Secretary, which has the authority to
cause the execution of the judgment rendered therein. Consequently, upon issuance of the entry of
judgment, the Commission, motu proprio or upon motion by the proper party, may cause the execution
of the judgment in the certified case.87 To ensure compliance with and enforcement of its orders issued
in the certified cases, Article 263(g) empowers the NLRC to seek the assistance of law enforcement
agencies like the Philippine National Police.88
------------oOo------------
Chapter Eight
PROCEDURE AND JURISDICTION
TOPICS PER SYLLABUS
C. Bureau of Labor Relations – Med-Arbiters
1. Jurisdiction (original and appellate)
C.
BUREAU OF LABOR RELATIONS1
– MED-ARBITERS
1. BUREAU OF LABOR RELATIONS (“BUREAU” OR “BLR”).
The Bureau of Labor Relations2 was established on January 16, 1957 pursuant to Executive
Order No. 213 and the Organization Plan 20-A. It took over the Conciliation Service and the Registrar
of Labor Organizations created under R.A. No. 875. It served as a planning, policy making, consultative
and advisory body in the promotion and maintenance of industrial peace.
It has the mandate to:
1) act as national registry of unions and CBAs;
2) formulate regulatory and developmental policies, standards, guidelines and programs
promoting the right to organize, including collective bargaining and improvement of the
income of workers and their organizations;
3) act as lead agency in workers and employers education;
4) adjudicate inter- and intra-union disputes;
5) promote bipartism and tripartism; and
6) formulate and implement programs that strengthen trade unionism to achieve industrial
peace.3
2. MED-ARBITER OR MEDIATOR-ARBITER.
“Med-Arbiter” or “Mediator-Arbiter” 4 refers to an officer in the Regional Office or in the
BLR authorized to hear and deciderepresentation cases, inter-union or intra-union disputes and other
related labor relations disputes, exceptcancellation of union registration cases.5
Some principles on Med-Arbiter.
 Med-Arbiters have power to make a determination on the existence of employer-employee
relationship and other issues. It is an absurdity to suggest otherwise. 6 He is also empowered
to decide other issues related to the eligibility of employees to vote. 7 However, the MedArbiter cannot order the re-negotiation of a CBA, his authority being confined to the
determination of the exclusive bargaining agent in the bargaining unit.8
 Injunctive power. The Med-Arbiter is possessed of the power to issue temporary restraining
order and the writ of injunction in appropriate cases. 9
 Contempt power. The Med-Arbiter has contempt power.10
 Factual findings of Med-Arbiters are accorded great respect. They are binding if they are
supported by substantial evidence and there exists no capricious exercise of judgment
warranting reversal by certiorari.11
 Execution of decisions, orders or awards of Med-Arbiters. The Med-Arbiter may, upon his
own initiative or on motion of any interested party, issue a writ of execution on a judgment
within five (5) years from the date it becomes final and executory, requiring the Sheriff or a
duly deputized officer to execute or enforce the same. 12
1.
JURISDICTION
(ORIGINAL AND APPELLATE)
I.
CASES FALLING UNDER THE JURISDICTION OF THE MED-ARBITERS,
DOLE DIRECTORS AND BLR DIRECTOR, IN GENERAL
1. INTRODUCTION.
For purposes of clarity in the otherwise labyrinthine issue of jurisdiction and procedure in the
BLR, there is a need to cite first the cases over which the following officials have their respective
jurisdictions:
(1)
Mediator-Arbiter (Med-Arbiter) ;
(2)
DOLE Regional Director; and
(3)
BLR Director.
The Mediator-Arbiter and
the DOLE
Regional
Director exercise original and exclusive jurisdiction over specified cases mentioned below. For his part,
the BLR Director exercises not only appellate but original jurisdiction over some particular cases.
2. CASES COVERED.
There are three (3) general classifications of the cases covered by the jurisdiction of said
officials, to wit:
(a)
Inter-union disputes;
(b)
Intra-union disputes; and
(c)
Other related labor relations disputes.
I-A.
INTER-UNION OR INTRA-UNION DISPUTES
1. INTER-UNION OR REPRESENTATION DISPUTES.
An “inter-union dispute” or “representation dispute” is one occurring or carried on between or
among unions.13 It refers to a case involving a petition for certification election filed by a duly registered
labor organization which is seeking to be recognized as the sole and exclusive bargaining agent of the
rank-and-file employees or supervisory employees, as the case may be, in the appropriate bargaining unit
of a company, firm or establishment.14
Broadly, an “inter-union dispute” refers to any conflict between and among legitimate labor
unions involving representation questions for purposes of collective bargaining or to any other conflict
or dispute between legitimate labor unions. 15
2. INTRA-UNION OR INTERNAL UNION DISPUTES.
An “intra-union dispute” or “internal union dispute” refers to a conflict within or inside a labor
union.16 It is any conflict between and among union members, including grievances arising from any
violation of the rights and conditions of membership, violation of or disagreement over any provision of
the union’s constitution and by-laws or disputes arising from chartering or affiliation of a union.17 It
refers to a case involving the control, supervision and management of the internal affairs of a duly
registered labor union such as those relating to specific violations of the union’s constitution and bylaws.18
A complaint for any violation of the constitution and by-laws and the rights and conditions of
union membership under Article 241 of the Labor Code, may be filed in the Regional Office where the
union is domiciled.19
3. RUNDOWN OF INTER-UNION/INTRA-UNION CASES.
The following is a rundown of all possible inter-union/intra-union disputes:20
1) Inter-union disputes:
(a) Validity/invalidity of voluntary recognition, certification election, consent election, runoff election or re-run election;
(b) Such other disputes or conflicts involving the rights to self-organization, union
membership and collective bargaining between and among legitimate labor
organizations.21
2) Intra-union disputes:
(a) Conduct or nullification of election of officers of unions and workers' association;
(b) Audit or accounts examination of union or workers' association funds;
(c) Deregistration of collective bargaining agreements;
(d) Validity/invalidity of union affiliation or disaffiliation;
(e) Validity/invalidity of acceptance/non-acceptance for union membership;
(f) Opposition to application for union or CBA registration;
(g) Violations of or disagreements over any provision of the Constitution and By-Laws of a
union or workers' association;
(h) Disagreements over chartering or registration of labor organizations or the registration of
collective bargaining agreements;
(i) Violations of the rights and conditions of membership in a union or workers' association;
(j) Violations of the rights of legitimate labor organizations, except interpretation of CBAs;
(k) Validity/Invalidity of impeachment/expulsion/suspension or any disciplinary action
meted against any officer and member, including those arising from non-compliance with
the reportorial requirement;
(l) Such other disputes or conflicts involving the rights to self-organization, union
membership and collective bargaining between and among members of a union or
workers’ association.22
1-B.
OTHER RELATED LABOR RELATIONS DISPUTES
1. MEANING OF “RELATED LABOR RELATIONS DISPUTES.”
“Related labor relations dispute” refers to any conflict between a labor union and the employer
or any individual, entity or group that is not a labor union or workers’ association. 23
2. COVERAGE OF RELATED LABOR RELATIONS DISPUTES NOT OTHERWISE
COVERED BY ARTICLE 217.
(a) Any conflict between:
(1) a labor union and the employer, or
(2) a labor union and a group that is not a labor organization; or
(3) a labor union and an individual who is not a member of such union;
(b) Cancellation of registration of unions and workers associations filed by individuals other
than its members, or group that is not a labor organization; and
(c) A petition for interpleader involving labor relations.24
“Interpleader” refers to a proceeding brought by a party against two or more parties with
conflicting claims, compelling the claimants to litigate between and among themselves their respective
rights to the claim, thereby relieving the party so filing from suits they may otherwise bring against it. 25
II.
ORIGINAL AND EXCLUSIVE JURISDICTION OF MED-ARBITERS,
DOLE DIRECTORS AND BLR DIRECTOR
Having known the various cases afore-described, a discussion of the respective jurisdictions of
the Med-Arbiters, DOLE Directors and BLR Director over these cases may now be made with greater
clarity.
1. ORIGINAL AND EXCLUSIVE JURISDICTION OF THE MED-ARBITERS.
The cases falling under the original and exclusive jurisdiction of the Med-Arbiters are as
follows:
(a) Inter-union disputes, also known as representation/certification election conflicts;
(b) Intra-union disputes;
(c) Other related labor relations disputes;26 and
(d) Contempt cases.27
Excepted from their jurisdiction is cancellation of union registration cases28 which are
cognizable by the DOLE Regional Directors.
2. ORIGINAL AND EXCLUSIVE JURISDICTION OF THE DOLE REGIONAL DIRECTORS.
The cases falling under the original and exclusive jurisdiction of the DOLE Regional Directors
are as follows:
(1) Petitions for cancellation of registration of independent unions, local
chapters and workers’ associations;29
(2) Petitions for deregistration of CBAs;30
(3) Request for examination of books of accounts of said labor organizations under Article
27431 of the Labor Code.
On No. 3 [Examination of Books of Accounts] above, there is a need to point out that although
by nature, this is an intra-union dispute, the rules treat this separately from those applicable to intra-union
disputes and vest jurisdiction thereover in the DOLE Regional Directors and not in the Med-Arbiters.
The case in point is La Tondena Workers Union vs. Secretary of Labor. 32 Intra-union
conflicts such as examinations of accounts are under the jurisdiction of the BLR. However, the Rules of
Procedure on Mediation-Arbitration purposely and expressly separated or distinguished examinations of
union accounts from the genus of intra-union conflicts and provided a different procedure for the
resolution of the same. Original jurisdiction over complaints for examinations of union accounts is vested
in the Regional Director and appellate jurisdiction over decisions of the former is lodged with the BLR.
This is apparent from Sections 333 and 4,34 Rule II of the Med-Arbitration Rules. Contrast these two
sections from Section 2 and Section 5 of the same Rules. Section 2 expressly vests upon Med-Arbiters
original and exclusive jurisdiction to hear and decide, inter alia, all other inter-union or internal union
disputes. Section 5 states that the decisions of the Med-Arbiter shall be appealable to the DOLE
Secretary. These are the provisions consistent with Section 5 of Rule VIII of the Implementing Rules of
the Labor Code.
3. ORIGINAL AND EXCLUSIVE JURISDICTION OF THE BLR DIRECTOR.
At the outset, it must be stressed that reference in the law and pertinent rules to “BLR”, as far
as the issue of jurisdiction is concerned, should rightfully mean “BLR Director.”
The BLR Director, therefore, as head of the agency, has the original and exclusive jurisdiction
over the following:
(1) Complaints and petitions involving the registration or cancellation of registration
of federations, national unions, industry unions, trade union centers and their local
chapters, affiliates and member organizations;
(2) Request for examination of books of accounts of said labor organizations (federations,
national unions, industry unions and trade union centers) under Article 27435 of the
Labor Code;
(3) Intra-union disputes involving said labor organizations (federations, national unions,
industry unions and trade union centers) ; and
(4) Contempt cases.
As far as No. 3 [Intra-Union Disputes] above is concerned, the 2010 case of Atty. Montaño v.
Atty. Verceles,36 is relevant. Petitioner here claimed that under the Implementing Rules,37 it is the
Regional Director of the DOLE and not the BLR who has jurisdiction over intra-union disputes involving
federations which, in this case, pertains to the election protests in connection with the election of officers
of the federation (Federation of Free Workers [FFW]) . In finding no merit in petitioner’s contention, the
High Court pointed out that Article 226 of the Labor Code clearly provides that the BLR and the Regional
Directors of DOLE have concurrent jurisdiction over inter-union and intra-union disputes. Such disputes
include the conduct or nullification of election of union and workers’ association officers. There is, thus,
no doubt as to the BLR’s jurisdiction over the instant dispute involving member-unions of a federation
arising from disagreement over the provisions of the federation’s constitution and by-laws. It agreed with
the following observation of the BLR:
“Rule XVI lays down the decentralized intra-union dispute settlement mechanism.
Section 1 states that any complaint in this regard ‘shall be filed in the Regional Office where
the union is domiciled. ’ The concept of domicile in labor relations regulation is equivalent
to the place where the union seeks to operate or has established a geographical presence
for purposes of collective bargaining or for dealing with employers concerning terms and
conditions of employment.
“The matter of venue becomes problematic when the intra-union dispute involves a
federation, because the geographical presence of a federation may encompass more than
one administrative region. Pursuant to its authority under Article 226, this Bureau exercises
original jurisdiction over intra-union disputes involving federations. It is well-settled that
FFW, having local unions all over the country, operates in more than one administrative
region. Therefore, this Bureau maintains original and exclusive jurisdiction over disputes
arising from any violation of or disagreement over any provision of its constitution and bylaws. ”38
II.
APPELLATE JURISDICTION OF THE BLR DIRECTOR
1. CASES FALLING UNDER THE APPELLATE JURISDICTION OF THE BLR DIRECTOR.
The BLR Director exercises exclusive appellate jurisdiction over the following cases:
(a)
All decisions of the Med-Arbiters in (1) intra-union disputes, and (2) other related labor
relations disputes.39
NOTE: Decisions in inter-union disputes or representation/certification
election conflicts, are NOT appealable to the BLR Director but directly to
the DOLE Secretary.40 [See discussion below].
(b)
All decisions originating from the DOLE Regional Directors in the cases falling under
their original jurisdiction as enumerated above.
2. APPELLATE JURISDICTION OVER MED-ARBITER’S DECISIONS IN INTER-UNION
DISPUTES OR CERTIFICATION ELECTION CASES IS LODGED WITH THE DOLE
SECRETARY AND NOT WITH THE BLR DIRECTOR.
To reiterate, decisions of Med-Arbiters in certification election cases or inter-union disputes
are appealable not to the BLR Director but directly to the DOLE Secretary by virtue of Article 25941 of
the Labor Code.
It must be noted that the rule on appeal in certification election cases
in unorganized establishments is different from that of organizedestablishments.
(a) Rule on appeal in unorganized establishments. - The order granting the conduct of a
certification election in an unorganizedestablishment is not subject to appeal. Any issue
arising from its conduct or from its results is proper subject of a protest. Appeal may only
be made to the DOLE Secretary in case of denial of the petition within ten (10) days from
receipt of the decision of denial.42
(b) Rule on appeal in organized establishments. - The order granting the conduct of a
certification
election
in
an organizedestablishment
and
the
decision dismissing or denying the petition may be appealed to the DOLE Secretary within
ten (10) days from receipt thereof.43
3. APPEALS AND REMEDIES FROM DECISIONS OF THE BLR DIRECTOR.
a. Jurisdictional distinctions.
The distinctions pointed out above between the respective jurisdictions of the DOLE Regional
Directors, Med-Arbiters and the BLR Director find significance in determining which of the cases may
be appealed to the BLR Director and those that may be appealed to the DOLE Secretary. Thus, the rule
may be stated as follows:
(1)
Decisions in cases cognizable by the BLR Director in the exercise of
his original and exclusive jurisdiction are appealable to the DOLE Secretary;
(2)
Decisions
in
cases
cognizable
by
the Med-Arbiters in
their original and exclusive jurisdiction are appealable to the BLR Director with the
single exception of decisions in certification election or inter-union disputes which, as
earlier emphasized, are directly appealable to the DOLE Secretary as mandated under
Article 25944 of the Labor Code; and
(3)
Decisions
in
cases
cognizable
by
the DOLE Regional
Directors in
their original and exclusive jurisdiction are appealable to the BLR Director.
b. Remedies.
(1) On No. 1 above. – The decision rendered by the DOLE Secretary in
his appellate jurisdiction may be elevated to the Court of Appeals by way of Rule 65
petition for certiorari.
(2) On Nos. 2 and 3 above. - The decisions rendered by the BLR Director in
his appellate jurisdiction may be elevated directly to the Court of Appeals by way of Rule
65 petition for certiorari. It cannot be appealed to the DOLE Secretary because they were
rendered by the BLR Director in the exercise of his appellate jurisdiction. Simply stated,
another appeal to the DOLE Secretary is not allowed under the situations contemplated
in Nos. 2 and 3 above, the decisions being final and executory.45
4. EXAMPLES OF SPECIFIC CASES.
a. APPEALS
FROM DENIAL
OF
APPLICATION
FOR
REGISTRATION AND CANCELLATION OF REGISTRATION OF LABOR
ORGANIZATIONS.
For purposes of appeal, the issue of union registration involves two (2) situations, to wit:
(1) Denial of application for union registration;46 and
(2) Revocation or cancellation of union registration.47
 On denial of application for union registration.
(1) If the denial is made by the Regional Office in cases involving application for registration
of independent unions, local chapters and workers’ associations, the same may be
appealed to the BLR Director; or
(2) If the denial is made by the BLR Director in cases involving federations, national unions,
industry unions and trade union centers, the same is appealable to the DOLE
Secretary.48
 On revocation or cancellation of union registration.
(1) If decision is rendered by the Regional Director. - The decision of the Regional
Director in the cases over which he has originaljurisdiction,49 may be appealed to the
BLR Director by any of the parties within ten (10) days from receipt thereof, copy
furnished the opposing party.50
(2) If decision is rendered by the BLR Director. - The decision of the BLR Director, in
the exercise of his original jurisdiction,51 may be appealed to the DOLE Secretary by any
party within the same period of ten (10) days, copy furnished the opposing party.52
b. APPEALS INVOLVING CBA REGISTRATION.
There are two (2) situations involved in the denial of CBA registration, viz:
(1) Single-enterprise CBAs. - The denial by the Regional Director of the registration
of single-enterprise CBAs may be appealed to theBLR Director within ten (10) days
from receipt of the notice of denial.
(2) Multi-employer CBAs. - The denial by the BLR Director of the registration of multiemployer CBAs may be appealed to the DOLE Secretary within the same period.53
c. APPEALS IN CONTEMPT CASES.
The person adjudged in direct contempt by the BLR Director may appeal to the DOLE
Secretary.54
5. EXCEPTION WHEN DOLE SECRETARY MAY ENTERTAIN APPEAL DIRECTLY FROM
THE DOLE REGIONAL DIRECTOR’S DECISION WITHOUT PASSING THROUGH THE
BLR DIRECTOR.
The Heritage Hotel Manila v. National Union of Workers in the Hotel, Restaurant and
Allied Industries-Heritage Hotel Manila Supervisors Chapter (NUWHRAIN-HHMSC) . 55 In this
2011 case, the Supreme Court allowed a deviation from the standing rule on the appellate jurisdiction of
the BLR Director over a decision of the DOLE Regional Director when the BLR
Director inhibited himself from taking cognizance of the appeal from the decision of the DOLE
Regional Director because he was a former counsel of respondent. The DOLE Secretary may thus legally
assume jurisdiction over an appeal from the decision of the DOLE Regional Director in the event that
the BLR Director inhibits himself from the case. In the absence of the BLR Director, there is no
person more competent to resolve the appeal than the DOLE Secretary.Thus, jurisdiction remained
with the BLR despite the BLR Director’s inhibition. When the DOLE Secretary resolved the appeal, she
merely stepped into the shoes of the BLR Director and performed a function that the latter could not
himself perform. She did so pursuant to her power of supervision and control over the BLR.
III.
ADMINISTRATIVE FUNCTIONS OF THE BLR AND LRDs
In addition to the afore-mentioned controversies over which they have concurrent original
and exclusive jurisdiction, the BLR and the Labor Relations Divisions (LRDs) in the DOLE Regional Offices
likewise have concurrent jurisdiction over the following administrative functions:
1. Registration of labor unions;
2. Keeping of registry of labor unions;
3. Maintenance and custody of the files of Collective Bargaining Agreements (CBAs) and other
related agreements.
4. Records of settlement of labor disputes; and
5. Copies of orders and decisions of Voluntary Arbitrators.56
It must be noted thatit is the registration of the labor organization with the BLR and not with
the Securities and Exchange Commissin (SEC) which makes it a legitimate labor organization with rights
and privileges granted under the Labor Code.57
------------oOo------------
Chapter Eight
PROCEDURE AND JURISDICTION
TOPICS PER SYLLABUS
D. National Conciliation and Mediation Board
1. Nature of proceedings
2. Conciliation vs. Mediation
3. Preventive mediation
D.
NATIONAL CONCILIATION AND MEDIATION BOARD
(NCMB) 1
1. MANDATE.
The NCMB is an agency attached to the Department of Labor and Employment principally incharge of the settlement of labor disputes through conciliation, mediation and of the promotion of
voluntary approaches to labor dispute prevention and settlement. 2
2. CONCILIATOR-MEDIATOR.
A “Conciliator-Mediator” refers to an officer of the NCMB whose principal function is to
assist in the settlement and disposition of labor-management disputes through conciliation and preventive
mediation, including the promotion and encouragement of voluntary approaches to labor disputes
prevention and settlement.3
1.
NATURE OF PROCEEDINGS
1. NCMB IS NOT A QUASI-JUDICIAL AGENCY.
According to the 2009 case of Tabigue v. International Copra Export Corporation,4 based
on the following functions of the NCMB,5 it cannot be considered a quasi-judicial agency:
(a) Formulate policies, programs, standards, procedures, manuals of operation and guidelines
pertaining to effective mediation and conciliation of labor disputes;
(b) Perform preventive mediation and conciliation functions;
(c) Coordinate and maintain linkages with other sectors or institutions, and other government
authorities concerned with matters relative to the prevention and settlement of labor
disputes;
(d) Formulate policies, plans, programs, standards, procedures, manuals of operation and
guidelines pertaining to the promotion of cooperative and non-adversarial schemes,
grievance handling, voluntary arbitration and other voluntary modes of dispute settlement;
(e) Administer the voluntary arbitration program; maintain/update a list of voluntary
arbitrations; compile arbitration awards and decisions;
(f) Provide counseling and preventive mediation assistance particularly in the administration of
collective agreements;
(g) Monitor and exercise technical supervision over the Board programs being implemented in
the regional offices; and
(h) Perform such other functions as may be provided by law or assigned by the Minister.
“Quasi-judicial function” is a term which applies to the action, discretion, etc. of public
administrative officers or bodies, who are required to investigate facts or ascertain the existence of facts,
hold hearings, and draw conclusions from them as a basis for their official action and to exercise discretion
of a judicial nature.6
2. NOT BEING A QUASI-JUDICIAL AGENCY, NCMB’S RULINGS CANNOT BE ELEVATED
TO, AND COGNIZABLE BY, THE COURT OF APPEALS.
In Tabigue, the NCMB Director did not grant petitioners’ request to submit the case for
voluntary arbitration because the bargaining union of which they are members, refused to join them in the
preventive mediation case they filed with the NCMB. The bargaining union, being the party to the CBA,
is required to give its consent to the voluntary arbitration case. Petitioners questioned the NCMB
Director’s action through a Rule 43 petition with the Court of Appeals. Rule 43 of the Rules of Court,
however, applies only to awards, judgments, final orders or resolutions of or authorized by anyquasijudicial agency in the exercise of its quasi-judicial functions. Hence, NCMB’s decision, not having been
rendered by a quasi-judicial body, cannot be elevated to the Court of Appeals under said rule.
2.
CONCILIATION VS. MEDIATION
1. JURISDICTION OVER CONCILIATION, MEDIATION AND VOLUNTARY
ARBITRATION CASES.
Originally, conciliation, mediation and voluntary arbitration functions are vested with the
Bureau of Labor Relations (BLR) . These functions, however, were all absorbed by the NCMB under
the law which created it.7
2. CONCILIATION AND MEDIATION, MEANING.
Both the terms “conciliation” and “mediation” refer to a process whereby a third person
usually called Conciliator (in case of conciliation) or Mediator (in case of mediation) , intervenes in a
dispute involving two or more conflicting parties for the purpose of reconciling their differences or
persuading them into adjusting or settling their dispute. The Conciliator or Mediator normally does not
make or render any decision, his role being confined to the functions afore-described.
3. DISTINCTION BETWEEN CONCILIATION AND MEDIATION.
Generally, there are no marked distinctions between conciliation and mediation. The reason is
that In both cases, a neutral third party(called Conciliator or Mediator) is tasked to assist two or more
opposing parties in finding appropriate resolution to a dispute.
Philippine law and jurisprudence do not embody any specific distinctions between these two as
in fact, there appears to be no universal definition of these widely accepted alternative modes of dispute
resolution.
In the NCMB, the hearing officer is called Conciliator-Mediator. There is no separate
classification between conciliators and mediators. When the Conciliator-Mediator performs his task, he
does not make any distinction when he is acting as Conciliator or as Mediator.
In other jurisdictions, the principal distinction between conciliation and mediation lies on the
extent of the power and authority granted to the neutral third party.
In mediation, the Mediator normally facilitates a deliberation or discussion of the issues
between the parties. He may or may not offer any opinions on the strength and weaknesses of each party's
positions and arguments. Thus, mediation may be classified into two, namely:
1.
2.
Facilitative Mediation where the Mediator does not make or offer any opinion; or
Evaluative Mediation where the Mediator offers an opinion which is not binding on the
parties.
It bears stressing, however, that regardless of which of the 2 methods above is chosen, the
Mediator is not empowered to impose his will on the parties.
In conciliation, the Conciliator is given more power and authority in that he may not only offer
an opinion on the issues at hand but may actually make a binding opinion thereon provided the parties
stipulate in advance to this effect. His opinion is based on the facts and the law involved in the
controversy before him.
It may thus be observed that conciliation is more formal than mediation in the sense that the
Conciliator’s opinion, unlike the Mediator’s, may be binding on the parties, although it may be merely
temporary in character.
4. PRIVILEGED NATURE OF THE INFORMATION IN CONCILIATION AND MEDIATION
PROCEEDINGS.
Any information and statements made at conciliation proceedings should be treated as a
privileged communication and thus may not be used as an evidence in any proceedings. They are
inadmissible in evidence. Conciliators and similar officials are not allowed to testify in any court or body
regarding any matters taken up at conciliation proceedings conducted by them. 8
The privileged nature of the communication applies not only in cases of conciliation and
mediation proceedings before the BLR, its Med-Arbiters or any of its hearing officers but also in similar
proceedings conducted by other labor officials, such as the Conciliators-Mediators of the NCMB as well
as the Labor Arbiters and the Commissioners of the NLRC.
For instance, in modifying the award of annual salary increases given by the DOLE Secretary
to the employees under the CBA in the case ofNissan Motors Philippines, Inc. v. Secretary of Labor
and Employment, 9 the Supreme Court pointed out that it cannot sanction the award made by the public
respondent DOLE Secretary based ostensibly on the revelation of the NCMB Administrator that was
sourced from the confidential position given to him by petitioner company. The reason for this is simple.
Article 233 of the Labor Code prohibits the use in evidence of any confidential information given during
conciliation proceedings. The NCMB Administrator clearly breached this provision of law.
3.
PREVENTIVE MEDIATION
1. PREVENTIVE MEDIATION AS A REMEDY.
“Preventive mediation,” as a remedy, is not found in the Labor Code. But under the law which
created the NCMB, it is expressly stated that one of its functions is to provide preventive mediation to
disputing parties.10 It covers potential labor disputes that are the subject of a formal or informal request
for conciliation and mediation assistance sought by either or both parties or upon the initiative of the
NCMB to avoid the occurrence of actual labor disputes and in order to remedy, contain or prevent its
degeneration into a full blown dispute through amicable settlement. 11
The term “preventive mediation case” refers to the potential or brewing labor dispute which is
the subject of a formal or informal request for conciliation and mediation assistance sought by either or
both parties in order to remedy, contain or prevent its degeneration into a full blown dispute through
amicable settlement.
2. HOW TO INITIATE PREVENTIVE MEDIATION.
Preventive mediation proceeding may be initiated in two (2) ways:
(1)
(2)
By filing a notice or request of preventive mediation, as distinguished from a notice of
strike/lockout; or
By conversion of the notice of strike/lockout into a preventive mediation case.
Procedurally, the filing of the notice of preventive suspension is the first step to submit a case
for mediation. It is only after this step that a submission agreement may be entered into by the parties
concerned.12 Moreover, just like in notices of strike or lockout, only certified or duly recognized
bargaining representatives may file a notice or request for preventive mediation in cases of bargaining
deadlocks and unfair labor practices, the only two (2) grounds that may be invoked in support of a strike
or lockout.13
 Notice or request for preventive mediation.
As distinguished from a notice of strike/lockout, “notice of preventive mediation” refers to the
notification filed by either an employer or a duly registered labor union with the NCMB-DOLE
informing the latter of its desire to submit the issues between them for preventive mediation and
conciliation. The issues that may be submitted for preventive mediation may either be strikeable or nonstrikeable.
In cases of strikeable issues, the parties may mutually agree that the same be treated or
converted into a preventive mediation case, in which event, no strike or lockout may be legally and
validly mounted based on the same issues since their conversion into a preventive mediation case has the
effect of dismissing the notice of strike or notice of lockout and removing it from the docket of notices
of strike/lockout.
In cases of non-strikeable issues raised in a notice of strike or notice of lockout, the NCMB
may, motu proprio, convert the same into a preventive mediation case or, alternatively, refer said issues
to voluntary arbitration, if they are in the nature of unresolved grievances or to the Med-Arbiter, if they
involve representation or inter-union disputes.
3. AUTHORITY TO CONVERT A NOTICE OF STRIKE/LOCKOUT INTO A PREVENTIVE
MEDIATION CASE.
The NCMB has the authority to convert a notice of strike/lockout filed by the union/employer
into a preventive mediation case under any of the following circumstances:
1. When the issues raised in the notice of strike/lockout are not strikeable in character.
2. When the party which filed the notice of strike/lockout voluntarily asks for the
conversion.
3.
When both parties to a labor dispute mutually agree to have it subjected to preventive
mediation proceeding.
Such authority is in pursuance of the NCMB’s duty to exert all efforts at mediation and
conciliation to enable the parties to settle their dispute amicably and in line with the State policy of
favoring voluntary modes of settling labor disputes.14
The NCMB introduced this concept of preventive mediation service since 1988. Its distinctive
feature lies in the fact that under this mode, disputes are settled without the pressure of any threat of a
strike or lockout. Both parties therefore could deliberate and adjust their differences in a more conducive
atmosphere than when there is a pending strike or lockout notice.
4. GUIDELINES IN THE CONVERSION OF THE NOTICE OF STRIKE/LOCKOUT TO A
PREVENTIVE MEDIATION CASE.
In case of conversion of a notice of strike or lockout into a preventive mediation case, the
following guidelines must be followed after such conversion:
(1) Clearly determine whether the issue/s raised in the notice of strike/lockout is/are strikeable
or not.
(2) If conversion is warranted, a written recommendation from the Conciliator-Mediator
handling the case is required, after close consultation with the Regional Branch Director.
(3) The written recommendation must be formally endorsed to the Regional Branch Director II
for approval.
(4) The conversion must be done before the cooling-off period expires or before the union
conducts its strike balloting.
(5) Parties concerned must be formally notified of the action taken by the Regional Branch
Director through a letter signed by the Conciliator-Mediator handling the case and approved
by the Director II.
(6) The notice should be dropped from the docket of notices of strike/lockout and to be
renumbered as a preventive mediation case and a conference thereon should be set on
specific date/s.15
5. CONVERSION OF A NOTICE OF STRIKE OR NOTICE OF LOCKOUT INTO A
PREVENTIVE MEDIATION CASE RESULTS IN ITS DISMISSAL.
Once the notice of strike is converted into a preventive mediation case, the notice is deemed
dropped from the dockets as if no notice of strike has been filed. Since there is no more notice of strike
to speak about, any strike subsequently staged by the union after the conversion is deemed not to have
complied with the requirements of a valid strike and therefore illegal. 16
The same rule applies in the case of lockout by an employer. 17
6. RELEVANT CASES.
A case in point is Philippine Airlines, Inc. v. Secretary of Labor and Employment, 18 where
the strike was declared illegal for lack of a valid notice of strike in view of the NCMB’s conversion of
said notice into a preventive mediation case. The Supreme Court reasoned, thus:
“The NCMB had declared the notice of strike as ‘appropriate for preventive mediation.
’ The effect of that declaration (which PALEA did not ask to be reconsidered or set
aside) was to drop the case from the docket of notice of strikes, as provided in Rule 41 of
the NCMB Rules, as if there was no notice of strike. During the pendency of preventive
mediation proceedings no strike could be legally declared. . . The strike which the union
mounted, while preventive mediation proceedings were ongoing, was aptly described by the
petitioner as ‘an ambush. ’”19
It is clear, according to San Miguel Corporation v. NLRC,20 that the moment the NCMB
orders the preventive mediation in a strike case, the union thereupon loses the notice of strike it had filed.
Consequently, if it still defiantly proceeds with the strike while mediation is on-going, the strike is illegal.
In the case of NUWHRAIN v. NLRC,21 where the petitioner-union therein similarly defied a
prohibition by the NCMB, the Supreme Court said:
“Petitioners should have complied with the prohibition to strike ordered by the NCMB
when the latter dismissed the notices of strike after finding that the alleged acts of
discrimination of the hotel were not ULP hence not ‘strikeable. ’ The refusal of the petitioners
to heed said proscription of the NCMB is reflective of bad faith.”
------------oOo------------
Chapter Eight
PROCEDURE AND JURISDICTION
TOPICS PER SYLLABUS
E. DOLE Regional Directors
1. Jurisdiction
E.
DOLE REGIONAL DIRECTORS
1. ROLE OF THE DOLE REGIONAL DIRECTORS.
The DOLE has a total of 16 Regional Offices nationwide each one of them is headed by a
Regional Director.
The DOLE Regional Directors are the duly “authorized representatives” of the DOLE
Secretary referred to in Article 128 of the Labor Code which grants to them both visitorial and
enforcement powers. They are in charge of the administration and enforcement of labor standards within
their respective territorial jurisdictions.1
1.
JURISDICTION
1. JURISDICTION OF THE DOLE REGIONAL DIRECTORS.
The DOLE Regional Directors have original and exclusive jurisdiction over the following
cases:
(a)
(b)
(c)
Labor standards enforcement cases under Article 128;
Small money claims cases arising from labor standards violations in the amount not
exceeding P 5,000.00 and not accompanied with a claim for reinstatement under Article
129;
Occupational safety and health violations;2
(d)
Registration of unions and cancellation thereof, cases filed against unions and other labor
relations related cases;
(e)
Complaints
against private
for local employment;3 and
(f)
Cases submitted to them for voluntary arbitration in their capacity as Ex-Officio Voluntary
Arbitrators (EVAs) under Department Order No. 83-07, Series of 2007. 4
recruitment
and
placement
agencies (PRPAs)
These cases are discussed herein below seriatim.
I.
LABOR STANDARDS ENFORCEMENT CASES
1. LABOR STANDARDS.
“Labor standards” refer to the minimum requirements prescribed by existing laws, rules and
regulations and other issuances relating to wages, hours of work, cost of living allowances and other
monetary and welfare benefits, including those set by occupational safety and health standards.5
2. SUBJECT OF THE VISITORIAL AND ENFORCEMENT POWERS: THE
ESTABLISHMENT AND NOT THE EMPLOYEES THEREIN.
At the outset, it bears to stress that the subject of the visitorial and enforcement powers granted
to the DOLE Secretary or his duly authorized representatives under Article 128 is the
establishment which is under inspection and not the employees thereof.
Consequently, according to Maternity Children’s Hospital v. Secretary of Labor,6 any
awards granted are not confined to employees who signed the complaint inspection but are equally
applicable to all those who were employed by the establishment concerned at the time the complaint was
filed, even if they were not signatories thereto. The reason is that the visitorial and enforcement
powers are relevant to, and may be exercised over, establishments, not over individual employees
thereof, to determine compliance by such establishments with labor standards laws. Necessarily,
in case of an award from such violation by the establishment, all its existing employees should be
benefited thereby. It must be stressed, however, that such award should not apply to those who resigned,
retired or ceased to be employees at the time the complaint was filed.
3. ORIGINAL JURISDICTION.
The DOLE Regional Directors exercise original jurisdiction over the following:
(a)
Cases involving inspection of establishments to determine compliance with labor standards
(Visitorial Power) ; and
(b)
Cases involving issuance of compliance orders and writs of execution (Enforcement Power)
.
4. VISITORIAL POWER OF REGIONAL DIRECTORS UNDER ARTICLE 128(a) .
Pursuant to their visitorial power under Article 128(a) , the DOLE Regional Directors shall
have:
(a) access to employer’s records and premises at any time of the day or night, whenever work
is being undertaken therein; and
(b) the right:
(1) to copy from said records;
(2) to question any employee and investigate any fact, condition or matter which may be
necessary to determine violations or which may aid in the enforcement of the Labor
Code and of any labor law, wage order, or rules and regulations issued pursuant
thereto.7
5. ENFORCEMENT POWER OF REGIONAL DIRECTORS UNDER ARTICLE 128(b) .
The statutory basis of the authority of the DOLE Regional Directors to administer and enforce
labor standards is found in Article 128(b) of the Labor Code, as amended.8
Pursuant thereto, the DOLE Regional Director, in cases where the employer-employee
relationship still exists, shall have the power:
a. to issue compliance orders to give effect to the labor standards provisions of the Labor Code
and other labor legislations based on the findings of labor employment and enforcement
officers or industrial safety engineers made in the course of inspection.
b. to issue writs of execution to the appropriate authority for the enforcement of their
orders, except in cases where the employer contests the findings of the labor employment
and enforcement officer and raises issues supported by documentary proofs which were not
considered in the course of inspection,9 in which case, the contested case shall fall under
the jurisdiction of the Labor Arbiter to whom it should be endorsed by the Regional
Director. 10
c. to order stoppage of work or suspension of operations of any unit or department of an
establishment when non-compliance with the law or implementing rules and regulations
poses grave and imminent danger to the health and safety of workers in the workplace.
Within24 hours, a hearing shall be conducted to determine whether an order for the
stoppage of work or suspension of operations shall be lifted or not. In case the violation is
attributable to the fault of the employer, he shall pay the employees concerned their salaries
or wages during the period of such stoppage of work or suspension of operation.11
d. to require employers, by appropriate regulations, to keep and maintain such employment
records as may be necessary in aid of his visitorial and enforcement powers under the
Labor Code.12
6. REQUISITES FOR THE VALID EXERCISE OF THE VISITORIAL AND ENFORCEMENT POWERS BY THE
REGIONAL DIRECTORS UNDER ARTICLE 128.
For the valid exercise of the visitorial and enforcement powers provided under Article 128, the
following three (3) requisites should concur:
1) The employer-employee relationship still exists at the time of the initiation of the action;13
2) The findings in question were made in the course of inspection, regardless of whether it was
initiated by complaint or routine inspection ;14and
3) The employees have not yet initiated any claim or complaint with the DOLE Regional
Director under Article 129 (Small money claims not exceeding P 5,000.00) , or the Labor
Arbiter, under Article 217 (Money claims exceeding P 5,000.00) .
On No. 1 above:
 If at the time of the initiation of the action, the employer-employee relationship had
already ceased to exist, it is not the DOLE Regional Director but the Labor Arbiter who
has jurisdiction over the same.15
 The DOLE Regional Director, in the exercise of his visitorial and enforcement power, has
the power to make a determination on whether employer-employee relationship
exists. 16 Such determination should be respected in order not to render nugatory the
exercise of its visitorial and enforcement power. Such finding of existence of employeremployee relationship is to the exclusion of the NLRC. It is subject to judicial review
but not review by the NLRC. 17
On No. 2 above:
 The jurisdiction of the DOLE, as expanded by the amendatory R.A. No. 7730, is not
affected whether the case is the result of regular inspection under Article 128(b) or it
originates from a complaint under either Article 129 or Article 217. The DOLE has
jurisdiction, despite the amount of the money claims involved. The initiation of a case
through a complaint does not divest the DOLE Regional Director of his jurisdiction under
Art. 128(b) .”
On No. 3 above:
 This is as it should be because once the complaint has already been taken cognizance of
by the DOLE Regional Director under Article 129, or by the Labor Arbiter under Article
217, jurisdiction attaches thereto and will not be lost as a result of the findings made in
the course of inspection by the DOLE Regional Director.
 The restrictive effect of Articles 129 and 217 no longer applies after the amendment
of Article 128(b) by R.A. No. 7730.This means that the visitorial and enforcement
powers of the DOLE Regional Director to order and enforce compliance with labor
standard laws can be exercised even where the individual claim exceeds P5,000. 18
 The rule therefore that the DOLE Regional Director should stop his proceeding once the
individual claim exceeds P5,000 no longer holds. 19
(NOTE: To avoid duplicity in discussion and to provide for more orderly presentation,
this topic is further extensively discussed under the next topic of “F. DOLE Secretary,
1. Visitorial and Enforcement Power,” infra) .
II.
SMALL MONEY CLAIMS CASES
1. JURISDICTION OVER CLAIMS NOT EXCEEDING P5,000.
The DOLE Regional Director has original jurisdiction over small money claims cases arising
from labor standards violations in the amount not exceeding P 5,000.00 and not accompanied with a
claim for reinstatement under Article 129 of the Labor Code.
Article 129 contemplates the recovery of wages and other monetary claims and benefits,
including legal interest, owing to an employee or domestic worker or kasambahay, 20 arising from
employer-employee relations provided the claim does not exceed P 5,000.00.
2. REQUISITES FOR THE VALID EXERCISE OF JURISDICTION BY DOLE REGIONAL
DIRECTORS UNDER ARTICLE 129.
The following requisites must all concur, to wit:
(1) The claim is presented by an employeeordomestic worker or kasambahay;21
(2) The claimant, no longer being employed, does not seek reinstatement; and
(3) The aggregate money claim of the employee or domestic worker or kasambahay does not
exceed P 5,000.00.22
In the absence of any of the aforesaid three (3) requisites, the Labor Arbiters have original
and exclusive jurisdiction over all claims arising from employer-employee relations, other than claims
for employees’ compensation, social security, PhilHealth and maternity benefits. 23
On No. 1 above:
 Article 129 does not limit the persons who may initiate the action to domestic workers or
kasambahay. It also includes “employees” as may be clearly deduced from the phrase
“owing to an employee xxx arising from employer-employee relations xxx.”
On No. 2 above:
 Employment relationship should no longer exist at the time of the initiation of the
complaint for monetary claim under Article 129.
 If the employment relationship still exists at the time of the filing of the complaint, the
case necessarily falls under the coverage of Article 128 where it is a pre-requisite that
such relationship should still exist at the time of the initiation of the complaint.
 If the employment relationship no longer exists, the complaint falls under Article 129 for
as long as the terminated employee does not raise the issue of legality of his dismissal or
asserts any claim for reinstatement and merely confines his complaint only on his
monetary claims which should not exceed P5,000.00.
 Once the employer-employee relationship has already ceased and the legality of the
dismissal is raised and reinstatement is sought, jurisdiction thereover necessarily falls
under the Labor Arbiter by virtue of Article 217 of the Labor Code. And such jurisdiction
covers the recovery of monetary and other benefits consequent to such dismissal. 24
On No. 3 above:
 Jurisdiction when total monetary claims exceeds P5,000.00 is lodged with the Labor
Arbiter.25 This is regardless of whether accompanied with a claim for reinstatement.26
 The monetary claims may include unpaid wages, salary differentials, 13 month pay, and
other benefits.27
th
 When claim does not exceed P5,000.00 but employee prays for reinstatement, the
case falls within the original and exclusive jurisdiction of the Labor Arbiter.28
 An action which carries with it a claim for reinstatement is principally an illegal
dismissal case and not one for monetary claims. Consequently, since it is an illegal
dismissal case, the amount of any accompanying monetary claims is inconsequential.
3. ARTICLE 128 VS. ARTICLE 129.
There is a whale of difference between Articles 128 and 129 of the Labor Code.
While Article 128 speaks of the visitorial and enforcement powers of the DOLE Secretary or his
duly authorized representatives (referring to the DOLE Regional Directors) , Article 129 refers to the
adjudication power of the Regional Directors or any duly authorized hearing officers of DOLE.
The nature and subject of the proceedings under Article 128 speak of inspection of
establishments and the issuance of orders to compel compliance with labor standards, wage orders
and other labor laws and regulations; thus, the presence of employer-employee relationship is a
condition sine qua non. On the other hand, Article 129 confers upon the DOLE Regional Directors
adjudicative power, that is, the power to hear and decide any claim for recovery of wages, simple
(small) money claims, and other benefits. The said provision deals with small money claims of
employees or persons employed in domestic or household service arising from severed employeremployee relations. 29
4. DOLE REGIONAL DIRECTORS WEAR TWO (2) HATS: ONE, FOR ARTICLE 128 AND
ANOTHER, FOR ARTICLE 129.
It is obvious from a reading of Articles 128 and 129 that the DOLE Regional Directors wear
two (2) hats thereby giving rise to the confusion as to when they exercise their adjudicatory power under
Article 129 and when they exercise their twin visitorial and enforcement powers under Article 128 as the
duly authorized representatives of the DOLE Secretary.
This confusion is underscored in the matter of where to elevate a case on appeal from the
decision of the DOLE Regional Director. If the decision of the DOLE Regional Director is issued
pursuant to Article 128 which basically involves an inspection case, the appeal should be made to the
DOLE Secretary. But if the decision of the DOLE Regional Director is made in accordance with Article
129 which does not involve an inspection case, the appeal should be made to the NLRC.
Illustrative of this point is a case decided by the Court of Appeals entitled Storck Product
Manufacturing Corporation v. Hon. Secretary of Labor and Employment. 30 Petitioner in this case
contends that although the issues raised stemmed from an inspection case, the appeal should be made
to the NLRC and not to the DOLE Secretary because the appeal itself specifically stated that it is being
elevated to the NLRC. Finding this contention untenable, the Court of Appeals declared that the order
of the Regional Director, being an offshoot of an inspection complaint, is appealable to the office of
public respondent DOLE Secretary. The provisions of Article 129 of the Labor Code find no application
in the present case considering that the instant case stemmed from an inspection complaint duly filed
with the DOLE Regional Office for alleged violations of labor standards. Article 129, as amended, refers
to the adjudicatory power of the DOLE Regional Directors or any duly authorized hearing officers of
DOLE so much so that any decision/order of said representatives, in the exercise of their adjudicatory
power, should be appealed to the NLRC. But the instant case does not pertain to the exercise of
adjudicatory power by said labor officers but to the exercise of their visitorial and enforcement powers
under Article 128.
III.
OCCUPATIONAL SAFETY AND HEALTH VIOLATIONS
1. JURISDICTION OF DOLE REGIONAL DIRECTORS.
The DOLE Regional Director has original jurisdiction to issue (1) order of stoppage of
work or (2) suspension of operation of any unit or department or the establishment if there exists in the
workplace a condition that poses grave and imminent danger to the health and safety of the
workers which cannot be voluntarily corrected by the employer within a reasonable period. 31
2. IMMINENT DANGER CASES.
a. Definition.
An “imminent danger” is a condition or practice that could reasonably be expected to cause
death or serious physical harm before abatement under the enforcement procedures can be
accomplished.32
b. Correction in imminent danger cases.
Where the employer is willing to make the necessary rectification, the same may be effected at
the plant-level within twenty-four (24) hours in cases where the conditions obtaining in the workplace
pose grave and imminent danger to the lives and health of the workers and/or property of the
employer, e.g. , boiler tube leakage; defective safety valves; pressure gauges and water column; weak
machinery foundations; and other analogous circumstances.33
3. NON-IMMINENT DANGER CASES.
Where the conditions are not of the types falling under “imminent danger” as described above,
e.g. , poor ventilation, housekeeping, inadequate personnel protective equipment and other analogous
circumstances, a reasonable period shall be given to the employer to comply, which period shall be
dependent on the gravity of the hazards needing corrections or the period needed to come into compliance
safety and health standards.34
V.
COMPLAINTS AGAINST PRIVATE RECRUITMENT
AND PLACEMENT AGENCIES (PRPAs) FOR LOCAL EMPLOYMENT
1. JURISDICTION OF DOLE REGIONAL DIRECTORS.
The DOLE Regional Directors have original jurisdiction over complaints against a licensee
and/or its authorized representative/s which are filed in writing and under oath with the
Regional/District/Provincial Office having jurisdiction over the place (1) where the Private Recruitment
and Placement Agencies (PRPAs) /Branch Office is located, or (2) where the prohibited act was
committed, or (3) at complainant’s place of residence, at the option of the complainant; provided, that
the Regional Office which first acquires jurisdiction over the case shall do so to the exclusion of the
others.35
It must be emphasized that this jurisdiction of the DOLE Regional Directors covers only
complaints against PRPAs engaged in localrecruitment. Complaints against PRPAs engaged
in overseas employment fall under the jurisdiction of the POEA.
2. GROUNDS FOR SUSPENSION OF A LICENSE.
Any of the following shall constitute a ground for suspension of a license:
a) Violation of any of the provisions of Sections 7,36 13,37 or 1438 of the Rules;
b) Violation of Department Order No. 21, Series of 1994, 39 regarding publication of job
vacancies;
c) Non-issuance of official receipt for every fee collected;
d) Non-submission of monthly report as provided in Section 61 40 of the Rules;
e) Charging or accepting directly or indirectly, any amount in excess of what is prescribed by
the Rules;
f) Disregard of lawful orders and notices issued by the DOLE Secretary or his duly authorized
representative; or
g) Non-observance of the procedures on recruitment.41
3. GROUNDS FOR CANCELLATION/REVOCATION OF A LICENSE.
Any of the following shall constitute a ground for the cancellation or revocation of license:
a. Violation/s of the conditions of license;
b. Engaging in act or acts of misrepresentation for the purpose of securing a license or renewal
thereof;
c. Continuous operation despite due notice that the license has expired;
d. Incurring two (2) suspensions by a PRPA based on final and executory orders;
e. Engaging in labor-only contracting as defined in Article 10642 of the Labor Code, as amended;
f. Recruitment and placement of workers in violation of R.A. No. 7610, 43 as amended by R.A.
No. 7658;44
g. Transferring, conveying or assigning of license/authority to any person or entity other than
the one in whose favor it was issued;
h. Violation of any of the provisions, particularly, Article 34 45 of the Labor Code, as amended,
and its Implementing Rules and Regulations.46
VI.
CASES SUBMITTED TO REGIONAL DIRECTORS AND ASSISTANT REGIONAL
DIRECTORS FOR VOLUNTARY ARBITRATION IN THEIR CAPACITY AS EXOFFICIO VOLUNTARY ARBITRATORS (EVAs)
1. LACK OF APPLICABLE PROVISION IN THE LABOR CODE.
DOLE Regional Directors and Assistant Regional Directors are neither expressly authorized to
act as Voluntary Arbitrators under the Labor Code nor explicitly prohibited from acting as such. This is
a void in the law which was appropriately addressed by Department Order No. 83-07, Series of
2007,47 designating all DOLE Regional Directors and Assistant Regional Directors as ExOfficio Voluntary Arbitrators (EVAs) . Its issuance was made in line with the Constitutional principle on
the preferential use of voluntary modes in settling disputes and the mandate of the DOLE to promote
voluntary arbitration as an expeditious and non-litigious mode of settling labor disputes, and in order to
give workplace parties real and practical alternatives in the voluntary arbitration of disputes.
2. JURISDICTION.
As EVAs, the DOLE Regional Directors and their Assistants have jurisdiction over the
following cases:
(a) All grievances arising from the interpretation or implementation of the CBA;
(b) All grievances arising from the interpretation or enforcement of company personnel
policies which remain unresolved after exhaustion of the grievance procedure;
(c)
Cases referred to them by the DOLE Secretary under the DOLE’s Administrative
Intervention for Dispute Avoidance (AIDA) initiative (provided underDOLE Circular No. 1,
Series of 2006) ;48 and
(d)
Upon agreement of the parties, any other labor dispute may be submitted to the EVAs
for voluntary arbitration.
3. HOW INITIATED.
Where a grievance remains unresolved despite bipartite efforts, either or both parties may
voluntarily bring the grievance to an EVA who has jurisdiction over the region where the parties operate
or work, through a written request indicating the following:
(a) Issue or issues to be arbitrated;
(b) The names and addresses of the parties involved; and
(c) Such other information that the parties deem vital in the immediate resolution of the
dispute.
4. POWER TO HOLD HEARINGS, RECEIVE EVIDENCE AND ISSUE WRIT OF
EXECUTION.
The EVA shall have the power to hold hearings, receive evidence and take the necessary actions
to resolve the dispute. The EVA may conciliate or mediate to obtain a voluntary settlement of the dispute.
The decision or award of the EVA shall be final and executory after ten (10) calendar days from
the parties’ receipt of the copy of the decision or award. A motion for reconsideration may be filed before
the decision/award lapses to finality and shall stop the running of the 10-day period for finality. No
second motion for reconsideration shall be allowed. A motion for reconsideration shall be resolved within
fifteen (15) days after the adverse party files its comment or opposition thereto.
The EVA shall issue a writ of execution requiring the Sheriff of the Regional Office or any
duly-authorized regional personnel to execute the final decision, order or award.
------------oOo------------
Chapter Eight
PROCEDURE AND JURISDICTION
TOPICS PER SYLLABUS
F. DOLE Secretary
1. Visitorial and enforcement powers
2. Power to suspend/effects of termination
3. Assumption of jurisdiction
4. Appellate jurisdiction
5. Voluntary arbitration powers
F.
DOLE SECRETARY
1. POWERS OF THE DOLE SECRETARY.
The DOLE Secretary, being the head of the Department of Labor and Employment, is possessed
of a number of powers, some of which are mentioned in the syllabus, to wit:
1. Visitorial and enforcement powers;
2. Power to suspend/effects of termination;
3. Assumption of jurisdiction;
4. Appellate jurisdiction; and
5. Voluntary arbitration powers.
The foregoing topics will be discussed hereunder seriatim.
1.
VISITORIAL AND ENFORCEMENT POWERS
1. THREE (3) KINDS OF POWER UNDER ARTICLE 128.
Article 1281 of the Labor Code, as amended, basically enunciates the three (3) kinds of power
which the DOLE Secretary and/or the Regional Directors, his duly authorized representatives,2 may
exercise in connection with the administration and enforcement of the labor standards provisions of the
Labor Code and of any labor law, wage order or rules and regulations issued pursuant thereto. 3
The three (3) kinds of power are as follows:
1) Visitorial power:4
2) Enforcement power:5 and
3) Appellate power or power of review.6
2. WHO EXERCISE THE POWERS.
Nos. 1 and 2 above are exercised under the original jurisdiction of the DOLE Regional
Directors. This has been earlier discussed under the separate topic of “VII. PROCEDURE AND
JURISDICTION, E. DOLE Regional Directors, 1. Jurisdiction”, supra. Hence, the same will no longer
be touched under the instant topical discussion.
The appellate power in No. 3 above may only be exercised by the DOLE Secretary in respect
to any decision, order or award issued by the DOLE Regional Directors.
3. NATURE OF THE VISITORIAL AND ENFORCEMENT POWERS.
The visitorial and enforcement powers granted to the DOLE Secretary and the DOLE Regional
Directors who are his duly authorized representatives, are quasi-judicial in nature.7
4. SUBJECT OF THE VISITORIAL AND ENFORCEMENT POWERS.
What is being inspected in the exercise of the visitorial and enforcement powers granted to the
DOLE Secretary or the DOLE Regional Directors under Article 128 is the employerestablishment and not the employees thereof. Consequently, in case of a finding of violation of the
labor standards, the awards granted in the inspection case are not confined to employees who signed the
complaint inspection but are equally applicable to all those who were employed by the establishment
concerned at the time the complaint was filed, even if they were not signatories thereto. 8
5. GRANT OF ANOTHER VISITORIAL POWER UNDER ARTICLES 37 AND 274.
a. Separateness of the grant of visitorial power.
Besides the visitorial power granted under Article 128, another visitorial power is granted to the
DOLE Secretary and the DOLE Regional Directors under Articles 37 and 274 of the Labor Code, to wit:
“Article 37. Visitorial Power. - The Secretary of Labor or his duly authorized
representatives may, at any time, inspect the premises, books of accounts and records of
any person or entity covered by this Title,9 require it to submit reports regularly on prescribed
forms, and act on violation of any provisions of this Title.” 10
“Article 274. Visitorial power. - The Secretary of Labor and Employment or his duly
authorized representative is hereby empowered to inquire into thefinancial
activities of legitimate labor organizations upon the filing of a complaint under oath and duly
supported by the written consent of at least twenty percent (20%) of the total membership of
the labor organization concerned and to examine their books of accounts and other records
to determine compliance or non-compliance with the law and to prosecute any violations of
the law and the union constitution and by-laws: Provided,That such inquiry or examination
shall not be conducted during the sixty (60) -day freedom period nor within the thirty (30)
days immediately preceding the date of election of union officials.” 11
b. Distinctions.
Article 128 should not be confused with Articles 37 and 274 of the Labor Code because the
purpose and object of the DOLE Secretary’s exercise of his visitorial power provided thereunder are
completely distinct from each other.
While Article 128 dwells on the visitorial and enforcement power of the DOLE Secretary to
inquire into the employer’s compliance with labor standards prescribed under labor laws and social
legislations, the purposes of the other articles are different, thus:
(a) Article 37 treats of the visitorial power of the DOLE Secretary and the DOLE Regional
Directors in relation to recruitment and placement of workers for both local and overseas
employment.
(b) Article 274 treats of the visitorial power of the DOLE Secretary and the DOLE Regional
Directors to inquire into the financial activities of legitimate labor organizations.
6. ENFORCEMENT POWER UNDER ARTICLE 128(b) .
As earlier stressed, the enforcement power is exercised pursuant to the original jurisdiction of
the DOLE Regional Directors. More particularly, this involves the power:
a) to issue compliance orders to give effect to the labor standards provisions of the Labor Code
and other labor legislations;
b) to issue writs of execution to the appropriate authority for the enforcement of their
orders, except in contested cases;12
c) to order stoppage of work or suspension of operations of any unit or department of an
establishment when non-compliance with the law or implementing rules and regulations
poses grave and imminent danger to the health and safety of workers in the workplace.13
d) to require employers to keep and maintain such employment records as may be necessary in
aid of his visitorial and enforcement powers under the Labor Code. 14
(NOTE: For more discussion on this topic, please refer to the comments under
the topic of “VIII. PROCEDURE AND JURISDICTION, E. DOLE Regional Directors,
1. Jurisdiction”, supra) .
7. IT IS THE REGIONAL DIRECTORS WHO HAVE ORIGINAL JURISDICTION TO
EXERCISE THE VISITORIAL AND ENFORCEMENT POWERS UNDER ARTICLES 37,
128 AND 274.
In the instances contemplated under Articles 37, 128 and 274, it is the DOLE Regional
Directors, the DOLE Secretary’s duly authorized representatives commonly referred to in these three (3)
articles, who have the original jurisdiction to exercise the visitorial power granted therein.
8. THE ROLE OF THE DOLE SECRETARY IN THE EXERCISE OF VISITORIAL AND
ENFORCEMENT POWERS IS APPELLATE IN NATURE.
It is clear from the above disquisition that the original jurisdiction over the exercise of the
visitorial and enforcement powers belongs to the DOLE Regional Directors, as the duly authorized
representatives of the DOLE Secretary.
The role of the DOLE Secretary is confined to the exercise of his appellate jurisdiction over the
decisions, orders and awards of the DOLE Regional Directors in cases brought before them for
adjudication under Articles 128 and 274. (See the discussion on the appellate jurisdiction of the
DOLE Secretary, infra, which includes this topic) .
(NOTE: The discussion on the DOLE Regional Directors’ original jurisdiction is
made and presented under the topic of “E. DOLE Regional Directors, 1.
Jurisdiction,” supra) .
2.
POWER TO SUSPEND EFFECTS OF TERMINATION
1. LEGAL BASIS.
One of the extraordinary powers granted to the DOLE Secretary is his power under Article
277(b) of the Labor Code to suspend the effects of termination of employment which he may exercise
even pending resolution of the legality or validity thereof in an appropriate proceeding.
2. GROUNDS.
The DOLE Secretary may suspend the effects of termination pending resolution of the dispute
in the event of a prima facie finding by the appropriate official of the DOLE before whom the dispute is
pending that:
1. the termination may cause a serious labor dispute; and/or
2. the termination is in implementation of a mass lay-off.15
3. RATIONALE FOR SUSPENDING THE EFFECTS OF TERMINATION.
The obvious purpose behind this rule is to bring the parties back to the status quo ante litem,
that is, their state of relationship prior to the termination. In this way, the workers will be litigating the
issue of the validity or legality of their termination on more or less equal footing with the employer since
they will be immediately reinstated and accordingly not be deprived of their wages while the litigation
is on-going.
4. REINSTATEMENT PENDING RESOLUTION OF THE TERMINATION DISPUTE.
Suspension of the effects of termination will necessarily result in the immediate reinstatement
of the terminated employees. An order of reinstatement pending resolution of the case may thus be issued
by the DOLE Secretary pursuant to this power.16
5. THE TERMINATION NEED NOT BE RELATED TO UNIONISM.
The termination contemplated under Article 277(b) need not be related to the exercise of the
right to self-organization by the employees so terminated. Hence, the employees need not be officers or
members of a union in order to invoke or apply this power to suspend the effects of termination of the
DOLE Secretary. It is not a pre-requisite to the valid exercise of this power that the employees so
terminated should be officers or members of a union or that the cause of their termination be related to
the exercise of their right to self-organization. For as long as there is a prima facie finding by the
appropriate official of the DOLE before whom the termination dispute is pending that it may cause a
serious labor dispute or is in implementation of a mass lay-off, the DOLE Secretary may validly suspend
the effects of such termination by ordering the immediate reinstatement of the terminated employees
pending resolution of the legality or illegality thereof.
6. “APPROPRIATE OFFICIALS” REFERRED TO IN ARTICLE277(b) .
The Labor Arbiters and the Voluntary Arbitrators or panel of Voluntary Arbitrators, as the case
may be, are the “appropriate officials” referred to in Article 277(b) who may make the preliminary
determination of the existence of a prima facie evidence that the termination will cause a serious labor
dispute or is being made in implementation of a mass lay-off. Such prima facie finding will then become
the basis for the issuance by the DOLE Secretary of his order suspending the effects of termination
which, as earlier emphasized, would mean the immediate reinstatement of the terminated employees
pending the final resolution of their termination case.
7. DISTINGUISHED FROM DOLE SECRETARY’S POWER OF ASSUMPTION OR
CERTIFICATION IN NATIONAL INTEREST CASES.
a. Different power of the DOLE Secretary.
This power of the DOLE Secretary granted under Article 277(b) should be distinguished from
his power to assume or certify labor disputes involving industries indispensable to the national interest
under Article 263(g) . The following distinctions may be cited:
First, the exercise of the power to suspend the effects of termination involves only the issue of
termination of employment which may cause a serious labor dispute or is in implementation of a mass
lay-off; while the power to assume or certify labor disputes is applicable to all labor disputes, irrespective
of the grounds therefor, provided such labor disputes will cause or likely to cause strikes or lockouts in
industries indispensable to the national interest.
Second, the former requires the conduct of preliminary determination of the existence of prima
facie evidence that the termination may cause a serious labor dispute or is in implementation of a mass
lay-off to be conducted by the appropriate official of the DOLE before whom the termination dispute is
pending; while the latter does not require such preliminary prima facie determination. In fact, prior notice
and hearing are not required before the DOLE Secretary may issue an assumption or certification order
as held in Capitol Medical Center, Inc. v. Trajano.17
Third, the “serious labor dispute” contemplated under the former may or may not involve a
strike or lockout; while the labor dispute referred to in the latter will cause or likely to cause a strike or
lockout.
Fourth, the former may be exercised in cases of termination of employment for as long as any
of the two (2) grounds mentioned in Article 277(b) exists, irrespective of the nature of the business of
the employer; while the latter may only be exercised in industries indispensable to the national interest.
Fifth, the remedy under the former is immediate reinstatement pending resolution of the
termination case; while in the latter, the remedy is the automatic return to work of the strikers or lockedout employees, if the strike or lock-out is on-going at the time of the issuance of the
assumption/certification order or the enjoining of the strike or lockout, if one has not taken place, pending
the resolution of the issues raised in the notice of strike or lockout.
b. Case where DOLE Secretary ordered both the suspension of the effects of termination
and the return to work of employees pursuant to a certification order issued under
Article 263(g) .
In the case of University of Sto. Tomas v. NLRC and UST Faculty Union, 18 all the sixteen
(16) officers and directors of the faculty union were terminated on the grounds of grave misconduct,
serious disrespect to a superior and conduct unbecoming a faculty member. As a result of said dismissal,
some faculty members staged mass leaves of absence for several days, disrupting classes in all levels at
the university. The faculty union filed a complaint for illegal dismissal and unfair labor practice with the
Labor Arbiter who, on a prima facie showing that the termination was causing a serious labor dispute,
certified the matter to the DOLE Secretary for a possible suspension of the effects of termination. On
this basis, DOLE Secretary Franklin Drilon issued an order suspending the effects of the termination of
the union officers and directors and directing the university “to accept them back to work under the same
terms and conditions prevailing prior to their dismissal. ” Later, on the basis of a petition for assumption
or certification filed by the university, Secretary Drilon modified said order by certifying the labor
dispute to the NLRC for compulsory arbitration pursuant to Article 263(g) of the Labor Code. He
accordingly ordered the university to readmit all its faculty members, including the 16 union officers and
directors, under the same terms and conditions prevailing prior to the dispute.
Based on the foregoing, it may be said that suspension of the effects of termination has the same
effect as assumption or certification as far as the reinstatement of the affected employees is concerned.
8. PRELIMINARY DETERMINATION OF PRIMA-FACIE EVIDENCE.
The determination of whether a prima facie evidence exists that the termination may cause a
serious labor dispute or is in implementation of a mass lay-off as would justify the suspension of the
effects of termination should be made at the inception of the labor proceedings. Thus, evidence on this
particular point may be presented prior to the presentation of evidence in the main case. The only purpose
of such presentation is to ascertain and establish whether the termination may cause a serious labor
dispute or is in implementation of a mass lay-off. Once evidence is presented upon which the appropriate
official before whom the termination dispute is pending may reasonably and sufficiently make out
a prima facie finding of such fact, a recommendation to the DOLE Secretary for the suspension of the
effects of termination may then be properly made.
3.
ASSUMPTION OF JURISDICTION
The DOLE Secretary is granted under Article 263(g) of the Labor Code, the extraordinary police
power of assuming jurisdiction over a labor dispute which, in his opinion, will cause or likely to cause a
strike or lockout in an industry indispensable to the national interest, or the so-called“national
interest” cases. Alternatively, he may certify the labor dispute to the NLRC for compulsory arbitration.
(NOTE: This sub-topic has been extensively discussed in relation to the topic of “VII. Labor
Relations Law,” supra, more particularly:
“6. Assumption of Jurisdiction by the DOLE Secretary pr Certification of the
Labor Dispute to the NLRC for Compulsory Arbitration;
“7. Nature of Assumption Order or Certification Order;
“8. Effect of Defiance of Assumption or Certification Orders.”
The discussion therein sufficiently explains the power to assume jurisdiction over labor
disputes by the DOLE Secretary and to certify the same to the NLRC for compulsory arbitration.
Please refer to said discussion for more details on this topic) .
4.
APPELLATE JURISDICTION
I.
APPEALS TO THE OFFICE OF THE DOLE SECRETARY
1. APPEAL PROCEDURE PER THE ORIGINAL PROVISION OF THE LABOR CODE.
a. Appeal from NLRC to DOLE Secretary; from DOLE Secretary to President.
The original rendering of the Labor Code19 provided that the decisions of the NLRC are
appealable to the DOLE Secretary on specified grounds.20 The decisions of the DOLE Secretary may be
appealed to the President of the Philippines subject to such conditions or limitations as the president may
direct.21
b. Appeals to the President from DOLE Secretary, eliminated.
P.D. No. 136722 amending certain provisions of the Labor Code, eliminated appeals to the
President, but gave the President the power to assume jurisdiction over any cases which he considered
national interest cases. The subsequent P.D. No. 1391, 23 enacted “to ensure speedy labor justice and
further stabilize industrial peace,” further eliminated appeals from the NLRC to the Secretary of Labor
but the President still continued to exercise his power to assume jurisdiction over any cases which he
considered national interest cases.24
Despite this long-standing, well-settled rule embodied in the afore-cited laws, an appeal to the
Office of the President (OP) from the decision of the DOLE Secretary was still instituted in the 2011
case of Barairo v. Office of the President and MST Marine Services (Phils. ), Inc.,25 a case involving
the imposition of disciplinary penalty upon petitioner, an OFW (seafarer). 26 The Supreme Court thus
pronounced that “[f]ollowing settled jurisprudence, the proper remedy to question the decisions or orders
of the Secretary of Labor is via Petition for Certiorari under Rule 65, not via an appeal to the OP. For
appeals to the OP in labor cases have indeed been eliminated, except those involving national interest
over which the President may assume jurisdiction. Since the petitioner’s case does not involve
national interest, his appeal of the DOLE Secretary’s decision to the Office of the President did not toll
the running of the period, hence, the assailed decision of the Secretary of Labor is deemed to have
attained finality. ”
2. PRESENT-DAY RULES ON APPEALS TO THE DOLE SECRETARY.
Though appeals from the NLRC to the DOLE Secretary were eliminated, presently there are
several instances in the Labor Code and its implementing and related rules where appeals to, and exercise
of appellate jurisdiction by, the Office of the DOLE Secretary are allowed. 27
Unfortunately, there is no single provision in the Labor Code or piece of jurisprudence28 which
consolidates or comprehensively embodies the rules on appeals to the DOLE Secretary. These appellate
rules are scattered in various provisions of the Labor Code, its implementing rules and a number of rules
of procedure as well.
Following is a detailed discussion of the various appeals that may be instituted to and filed with
the Office of the DOLE Secretary in the exercise of its appellate jurisdiction.
II.
VARIOUS APPEALS TO THE DOLE SECRETARY
UNDER THE LABOR CODE AND APPLICABLE RULES
1. OFFICES FROM WHICH APPEALS MAY ORIGINATE.
Appeals to the DOLE Secretary may originate from any of the following offices:
(1) DOLE Regional Directors;
(2) Med-Arbiters;
(3) Director of the Bureau of Labor Relations (BLR) ; and
(4) Philippine Overseas Employment Administration (POEA) .
2. CASES NOT APPEALABLE TO THE DOLE SECRETARY.
The following decisions, awards or orders are not appealable to the Office of the DOLE
Secretary:
(1) Those rendered by Labor Arbiters that are appealable to the Commission (NLRC) which has
exclusive appellate jurisdiction thereover;29
(2) Those rendered by the Commission (NLRC) since they can be elevated directly to the CA
by way of a Rule 65 certiorari petition;
(3) Those rendered by the BLR Director in the exercise of his appellate jurisdiction since they
can be brought directly to the CA under Rule 65certiorari petition;
(4) Those rendered by DOLE Regional Directors under Article 129 30 of the Labor Code since
they are appealable to the NLRC;
(5) Those issued by DOLE Regional Directors in their capacity as Ex-Officio Voluntary
Arbitrators (EVAs) since they can be brought directly to the CA under Rule 43 of the Rules
of Court; and
(6) Those rendered by Voluntary Arbitrators which are appealable directly to the CA under Rule
43 of the Rules of Court.31
III.
APPEALS FROM DOLE REGIONAL DIRECTORS
1. CASES APPEALABLE TO DOLE SECRETARY.
Not all decisions, awards or orders rendered by the DOLE Regional Directors are appealable
to the DOLE Secretary. Only those issued in the following cases are so appealable:
(a)
Labor standards enforcement cases under Article 128;32
(b)
Occupational safety and health violations;33 and
(c)
Complaints
against private
for local employment.34
recruitment
and
placement
agencies (PRPAs)
2. CASES NOT APPEALABLE TO THE DOLE SECRETARY.
As earlier pointed out, the following cases decided by the DOLE Regional Directors are not
appealable to the DOLE Secretary but to some other agencies/tribunals indicated below:
(a)
Decisions in small money claims cases arising from labor standards violations in the
amount not exceeding P 5,000.00 and not accompanied with a claim for reinstatement
under Article 129 are appealable to the NLRC;35
(b)
Decisions in cases submitted to DOLE Regional Directors for voluntary arbitration in their
capacity as Ex-Officio Voluntary Arbitrators (EVAs) under Department Order No. 83-07,
Series of 200736 may be elevated directly to the Court of Appeals by way of a Rule 43
petition.37 This is so because the DOLE Regional Directors, in so deciding, are acting as
Voluntary Arbitrators; hence, what should apply are the rules on appeal applicable to
voluntary arbitration.
IV.
APPEALS FROM DECISIONS OF
MEDIATORS-ARBITERS (MED-ARBITERS) AND BLR DIRECTOR
(NOTE: The discussion of this sub-topic is presented alongside the comments
on the topic of “VIII. PROCEDURE AND JURISDICTION, C. Bureau of Labor
Relations – Med-Arbiters, 1. Jurisdiction (Original and Appellate) ”, supra)
V.
APPEALS FROM DECISIONS OF POEA
1. CASES APPEALABLE TO THE DOLE SECRETARY.
The decisions in the following cases rendered by the Philippine Overseas Employment
Administration (POEA) in its original jurisdiction are appealable to the DOLE Secretary:
(a) Recruitment violations and other related cases. - All cases which are administrative in
character, involving or arising out of violation of rules and regulations relating to licensing
and registration of recruitment and employment agencies or entities, including refund of
fees collected from workers and violation of the conditions for the issuance of license to
recruit workers.38
(b) Disciplinary action cases and other special cases which are administrative in character,
involving employers, principals, contracting partners and Filipino migrant workers.39
It must be noted that the POEA ceased to have any jurisdiction over money claims of OFWs,
or those arising out of an employer-employee relationship or by virtue of any law or contract involving
Filipino workers for overseas deployment including claims for actual, moral, exemplary and other forms
of damages. The jurisdiction over these claims was transferred to the Labor Arbiters of the NLRC by
virtue of Section 10 of R.A. No. 8042, as amended. 40 Hence, appeals therefrom may be instituted to the
Commission (NLRC) .
2. APPEAL OR PETITION FOR REVIEW FROM THE DECISIONS OF THE POEA IN
RECRUITMENT VIOLATION AND OTHER RELATED CASES.
The DOLE Secretary shall have exclusive appellate jurisdiction to act on appeals or petitions
for review of recruitment violation cases and other related cases decided by the Administration (POEA)
.41
The party aggrieved by a decision of the POEA may appeal the same to the DOLE Secretary
within fifteen (15) calendar days from receipt of a copy of the decision. Failure of the aggrieved party to
perfect his appeal within the reglementary period shall render the decision of the Administration final
and executory.42
The appealing party shall file a Notice of Appeal and an Appeal Memorandum with the
Adjudication Office or the Regional Office of the POEA, as the case may be. In case a fine and/or a
monetary award is imposed against the appealing party, he shall also file a supersedeas bond in
the amount of such fine and/or monetary award, in cash or in surety bond posted by a surety
company acceptable to the Administration. The Appeal Memorandum shall clearly point out the errors
of law and/or facts in the decision appealed from and shall be verified. Any appeal that does not comply
with these requirements shall not be acted upon and the Administration shall issue forthwith an order for
the execution of the decision for which the appeal is sought. 43
The DOLE Secretary shall resolve the appeal within sixty (60) calendar days from receipt of
the transmittal of the entire records of the case.44
3. APPEAL OR PETITION FOR REVIEW IN DISCIPLINARY ACTION CASES.
The DOLE Secretary shall have the exclusive jurisdiction to act on appeals or petitions for
review of disciplinary action cases decided by the POEA. 45
The rule on the filing of appeal or petition for review appears to be different between land-based
overseas workers and seafarers. Under the2002 POEA Rules for Land-Based Overseas Workers, it is
provided that appeals or petitions for review shall be filed with the POEA within fifteen (15) calendar
days from receipt of the decision by the appealing or petitioning party. 46 But under the 2003 POEA Rules
for Seafarers, it is provided that appeals shall be filed with the Office of the DOLE Secretary with proof
of service to the POEA and the adverse party within fifteen (15) calendar days from receipt by the parties
of their respective copies of the Order.47
Either way, the appeal or petition for review is properly cognizable by the DOLE Secretary;
hence, whether filed with the POEA or with the Office of the DOLE Secretary, it is the latter that has the
appellate jurisdiction over the appeal or petition for review.
(NOTE: The original and exclusive jurisdiction of the POEA is discussed under the topic
of “II. Recruitment and Placement, B. Regulation and enforcement, 1. Suspension or
Cancellation of License or Authority [Art. 35, Labor Code],” supra)
5.
VOLUNTARY ARBITRATION POWERS
1. AIDA.
a. New rule on voluntary arbitration by the DOLE Secretary.
A new form of dispute settlement by the DOLE Secretary was introduced by DOLE Circular
No. 1, Series of 2006.48 Called Administrative Intervention for Dispute Avoidance (AIDA) , this is a
new administrative procedure for the voluntary settlement of labor disputes in line with the objectives of
R.A. No. 9285,49 Executive Order No. 52350 and the mandate of the DOLE to promote industrial peace.
b. Nature of administrative intervention by DOLE Secretary.
This recourse is separate from the established dispute resolution modes of mediation,
conciliation and arbitration under the Labor Code, and is an alternative to other voluntary modes of
dispute resolution such as the voluntary submission of a dispute to the Regional Director for mediation,
to the NCMB for preventive mediation, or to the intervention of a regional or local tripartite peace council
for the same purpose.51
c. Parties who may request for DOLE Secretary’s intervention.
Either or both the employer and the certified collective bargaining agent (or the representative
of the employees where there is no certified bargaining agent) may voluntarily bring to the Office of the
DOLE Secretary, through a Request for Intervention, any potential or ongoing disputedefined below.52
d. Potential or on-going dispute.
A potential or on-going dispute refers to:
(a) a live and active dispute;
(b) that may lead to a strike or lockout or to massive labor unrest; and
(c) is not the subject of any complaint or notice of strike or lockout at the time a Request for
Intervention is made.53
e. Procedure.
All Requests for Intervention should be in writing and filed with the Office of the DOLE
Secretary. A Request for Intervention shall state:
(a) The name and address of the employer;
(b) The name of the certified bargaining agent, or the employee representative duly designated
in writing by a majority of the employees where there is no collective bargaining agent;
(c) The number of employees affected by the potential or ongoing dispute; and
(d) A brief description of the potential or ongoing dispute. 54
Upon receipt of the Request, the Office of the DOLE Secretary should forthwith notify the
parties and invite them for conference. The conference for Requests coming from the National Capital
Region, Regions III, IV-A or IV-B shall be held at the Office of the DOLE Secretary unless the Secretary
otherwise directs. The conference for Requests coming from the other regions shall be conducted by the
appropriate Regional Directors for and on behalf of the DOLE Secretary.55
f. Pre-requisite to intervention by DOLE Secretary.
The Office of the Secretary or the Regional Director, in the proper case, shall proceed to
intervene after the parties shall have manifested that:
(1) They voluntarily submit their potential or ongoing dispute to intervention by the Office of
the DOLE Secretary;
(2) There is no pending notice of strike or lockout or any related complaint in relation to their
potential or ongoing dispute;
(3) They shall refrain from any strike or lockout or any form of work stoppage or from filing
any related complaint while the Secretary's intervention is in effect; and
(4) They shall abide by the agreement reached, whose terms may be enforced through the
appropriate writs issued by the DOLE Secretary.
All agreements settling the dispute should be in writing and signed by the parties as well as the
official who mediated the dispute.56
g. Prohibition on disclosure of information.
The parties and the officials or employees of the Department of Labor and Employment who
took part in the intervention proceedings are not allowed to testify in any court or body regarding the
disclosures, submissions or positions made by the parties therein.57
2. VOLUNTARY ARBITRATION BY DOLE SECRETARY.
If the intervention through AIDA fails, either or both parties may avail themselves of the
remedies provided under the Labor Code. Alternatively, the parties may submit their dispute to the Office
of the DOLE Secretary for voluntary arbitration. Such voluntary arbitration should be limited to the
issues defined in the parties' submission to voluntary arbitration agreement and should be decided on the
basis of the parties' position papers and submitted evidence. The Office of the DOLE Secretary is
mandated to resolve the dispute within sixty (60) days from the parties' submission of the dispute for
resolution.58
3. DOES THE DOLE SECRETARY ASSUME THE ROLE OF VOLUNTARY ARBITRATOR
ONCE HE ASSUMES JURISDICTION OVER A LABOR DISPUTE?
In the 2014 case of Philtranco Service Enterprises, Inc. v. Philtranco Workers UnionAssociation of Genuine Labor Organizations (PWU-AGLO),59 this poser was answered in the
negative. A notice of strike was filed by respondent union which, after failure of conciliation and
mediation by the NCMB, was referred by the Conciliator-Mediator to the Office of the DOLE Secretary
who thereby assumed jurisdiction over the labor dispute. The case60 was resolved by the Acting DOLE
Secretary61 in favor of respondent union.62 A motion for reconsideration was filed by petitioner company.
The DOLE Secretary, however, declined to rule on the motion citing a DOLE regulation,63 applicable to
voluntary arbitration, which provided that the Voluntary Arbitrators’ decisions, orders, resolutions or
awards shall not be the subject of motions for reconsideration. The DOLE Secretary took the position
that when he assumed jurisdiction over the labor dispute, he was acting as a Voluntary Arbitrator.
Petitioner subsequently filed a Rule 65 certiorari petition with the CA. The CA, however, dismissed
petitioner company’s Rule 65 certiorari petition on the ground, among others, that the decision of the
DOLE Secretary, having been rendered by him in his capacity as Voluntary Arbitrator, is not subject to
a Rule 65certiorari petition but to a Rule 43 petition for review which properly covers decisions of
Voluntary Arbitrators.64
Before the Supreme Court, petitioner asserted that, contrary to the CA’s ruling, the case 65 is not
a simple voluntary arbitration case. The character of the case, which involves an impending strike by
petitioner’s employees; the nature of petitioner’s business as a public transportation company, which is
imbued with public interest; the merits of its case; and the assumption of jurisdiction by the DOLE
Secretary – all these circumstances removed the case from the coverage of Article 262, 66 and instead
placed it under Article 263,67 of the Labor Code. For its part, respondent union argued that the DOLE
Secretary decided the assumed case in his capacity as Voluntary Arbitrator; thus, his decision, being that
of a Voluntary Arbitrator, is only assailable via a petition for review under Rule 43.
The Supreme Court, however, pronounced that:
“It cannot be said that in taking cognizance of NCMB-NCR CASE No. NS-02-028-07,
the Secretary of Labor did so in a limited capacity, i.e. , as a voluntary arbitrator. The fact is
undeniable that by referring the case to the Secretary of Labor, Conciliator-Mediator Aglibut
conceded that the case fell within the coverage of Article 263 of the Labor Code; the
impending strike in Philtranco, a public transportation company whose business is imbued
with public interest, required that the Secretary of Labor assume jurisdiction over the case,
which he in fact did. By assuming jurisdiction over the case, the provisions of Article 263
became applicable, any representation to the contrary or that he is deciding the case in his
capacity as a voluntary arbitrator notwithstanding.”
Consequently, the Supreme Court reversed and set aside the CA ruling and reinstated the case
and directed the CA “to resolve the same with deliberate dispatch.”
------------oOo------------
Chapter Eight
PROCEDURE AND JURISDICTION
TOPICS PER SYLLABUS
G. Grievance Machinery and Voluntary Arbitration
1. Subject matter of grievance
2. Voluntary Arbitrator
a) Jurisdiction
b) Procedure
c) Remedies
G.
GRIEVANCE MACHINERY
AND VOLUNTARY ARBITRATION
1. CONSTITUTIONAL BASIS.
The provisions in the Labor Code on grievance machinery, voluntary arbitration and other
modes of dispute settlement have a strong constitutional basis. The State is mandated under the
Constitution to “promote the principle of shared responsibility between workers and employers and
the preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce
their mutual compliance therewith to foster industrial peace.” 1 This guarantee in the Constitution is
in addition to the mandate that “the State shall afford full protection to labor, local and overseas,
organized and unorganized, and promote full employment and equality of employment opportunities
for all.” 2
2. LEGAL BASES.
The Labor Code is clear that it is the policy of the State to promote and emphasize the primacy
of free collective bargaining and negotiations, including voluntary arbitration, mediation and
conciliation, as modes of settling labor or industrial disputes. 3 Moreover, it is likewise the policy of the
State to provide adequate administrative machinery for the expeditious settlement of labor or industrial
disputes.4
1.
SUBJECT MATTER OF GRIEVANCE
1. GRIEVANCE OR GRIEVABLE ISSUE.
A “grievance” or “grievable issue” is any question raised by either the employer or the union
regarding any of the following issues or controversies:
1. The interpretation or application of the CBA;
2. The interpretation or enforcement of company personnel policies; or
3. Violation of any provisions of the CBA or company personnel policies. 5
In its technical or restricted sense, a grievance is a dispute or controversy between the employer
and the collective bargaining agent arising from the interpretation or implementation of their CBA and/or
those arising from the interpretation or enforcement of company personnel policies, for the adjustment
and resolution of which the parties have agreed to establish a machinery or a series of steps commencing
from the lowest level of decision-making in the management hierarchy (usually between the shop
steward of the employee or employees aggrieved and the supervisor/foreman/manager who exercises
control and supervision over the grievants or who is responsible for executing the management action
that have given rise to the grievance) and usually terminating at the highest official of the company. If
such dispute remains unresolved after exhausting the grievance machinery or procedure, it shall
automatically be referred to voluntary arbitration prescribed in the CBA. 6
It must be stressed, however, that in order to be grievable, the violations of the CBA should
be simple or ordinary and not gross in character; otherwise, they shall be considered as unfair labor
practice, the jurisdiction over which rightly belongs to the Labor Arbiter under Article 217 of the Labor
Code or concurrently with the Voluntary Arbitrator or panel of Voluntary Arbitrators who may be
mutually chosen and agreed upon by the parties pursuant to Article 262 of the Labor Code.
“Gross violation” of the CBA is defined under Article 261 of the Labor Code
as flagrant and/or malicious refusal by a party thereto to comply with the economic provisions thereof.
If what is violated therefore is a non-economic or a political provision of the CBA, the same shall not be
considered as unfair labor practice and may thus be processed as a grievable issue in accordance with
and following the grievance machinery laid down in the CBA.
2. GRIEVANCE MACHINERY.
“Grievance machinery” refers to the mechanism for the adjustment and resolution of grievances
arising from the interpretation or implementation of a CBA and those arising from the interpretation or
enforcement of company personnel policies. 7 Additionally, it is also mandated to process, adjust and
resolve violations of the CBA which are not gross in character as discussed above. It is part of the
continuing process of collective bargaining.8
3. GRIEVANCE PROCEDURE.
“Grievance procedure” is the series of formal steps that parties to a CBA agreed to take for the
adjustment of grievances or questions arising out of the interpretation or implementation of the CBA or
company personnel policies including voluntary arbitration as the terminal step. The grievance procedure
provides the parties a first crack in addressing problems in the CBA administration and its use is an
essential requisite before a Voluntary Arbitrator can take cognizance of the unresolved grievance. It
usually consists of a multi-step procedure starting from the discussion of the grievance between the
employee and/or the union steward, on the one hand, and the foreman and supervisor, on the other hand,
and ending with the highest decision-making officials of the company, reflecting the hierarchy of
command or responsibility. 9
Legally speaking, the grievance procedure is an appeal procedure and is a “must” provision in
every CBA. It is that part of the agreement which provides for a peaceful way of settling differences and
misunderstanding between the parties.10
The terms “grievance procedure” and “grievance machinery” may be used interchangeably.
4. CBA PROVISIONS SUBJECT OF GRIEVANCE MACHINERY.
A CBA contains two (2) kinds of stipulations, to wit:
1. Economic or non-political provisions which have direct and measurable monetary cost
consequences such as wage rates, paid vacations, pensions, health and welfare plans,
and other fringe benefits; and
2. Non-economic or political provisions whose monetary cost cannot be directly computed
such as the no-strike-no-lockout, union security, management security, check-off
clauses, grievance procedures, etc.11
Any violation of the economic and non-economic provisions of the CBA or any law, rules and
regulations as well as customary practices, may constitute a grievance and is often referred to as “rights
dispute.”12 However, it must be pointed out that when the violation of the CBA consists in the flagrant
and/or malicious refusal to comply with the economic provisions thereof, the same shall be treated as an
unfair labor practice act and therefore shall not be treated as a grievable issue properly cognizable under
the grievance machinery of the CBA.
5. “COMPANY PERSONNEL POLICIES” SUBJECT OF GRIEVANCE MACHINERY.
What are the personnel policies and what are the matters usually covered by such policies,
whose wrong from enforcement and interpretation may constitute grievance/s or other sources of rights
disputes?
Personnel policies are guiding principles stated in broad, long-range terms that express the
philosophy or beliefs of an organization’s top authority regarding personnel matter. They deal with
matters affecting efficiency and well-being of employees and include, among others, the procedures in
the administration of wages, benefits, promotions, transfers and other personnel movements which are
usually not spelled out in the collective agreement. The usual source of grievances, however, is the rules
and regulations governing disciplinary actions.13
The law considers the interpretation and implementation of company personnel policies as one
of the frequent causes of irritation between labor and management and thus must be treated as a grievable
issue properly cognizable by the grievance machinery. The law contemplates the situation where workers
are not satisfied with the manner by which management interprets and implements its personnel policies
or where management has actually taken disciplinary action against an employee pursuant to its
personnel policies. In these cases, the law recognizes the right of the workers affected by the same to file
a grievance with the grievance machinery before the issue becomes an arbitrable grievance that may be
brought for voluntary arbitration before the designated Voluntary Arbitrator or panel of Voluntary
Arbitrators.14
6. VIOLATIONS OF USUAL NORMS OF PERSONNEL CONDUCT OR BEHAVIOR THAT
CONSTITUTE GRIEVANCES OFTEN REFERRED TO AS DISCIPLINE CASES.
What violations of the usual norms of personnel conduct or behavior of employees may
constitute grievances often referred to as discipline cases?
Rules and regulations governing personnel discipline may contain the following infractions
covering the following subjects:
1. Against person. - Physical injury, assault, homicide and murder.
2. Against property. – Mis-use of property, damage to property, theft and robbery and
negligence in the use of property.
3. Orderliness/Good conduct. – Fighting/Quarrelling, violation of rules, discourtesy/
disrespect, intoxication while at work, possession of drugs/narcotics/alcoholic drinks, Illegal
strike, strike violations/sabotage, failure to cooperate in investigations, hygiene, safety,
union activity, moonlighting, deportment, financial interest, unauthorized outside work,
personal affairs, entertainment of visitors, disorderliness, horseplay and use of foul
language.
4. Attendance and punctuality. – Time-keeping violations, absenteeism, tardiness, undertime
and AWOL.
5. Morality. – Immorality and sexual harassment.
6. Conflict of interest. – Conflict of interest.
7. Non-performance. – Insubordination, negligence of duty, inefficiency, malingering,
carelessness and poor quality.
8. Honesty/Integrity. – Falsity/Falsification, fraud, dishonesty, breach of trust, unfaithfulness,
loss of confidence, usurious transaction, disclosure of information, disloyalty, non-payment
of debt.15
7. VALIDITY AND BINDING EFFECT OF DECISIONS OF GRIEVANCE COMMITTEE.
A member of the bargaining union who brought his grievable issue for resolution by the
Grievance Committee is bound by whatever disposition the latter may render thereon.
In the 2013 case of Octavio v. Philippine Long Distance Telephone Company, 16 the
grievable issue raised by petitioner Octaviobefore the Grievance Committee was resolved in favor of
respondent PLDT. Petitioner then contends that the Grievance Committee’s resolution has the effect of
amending the CBA without the consent and approval of the employees. In debunking this claim of
petitioner and in ruling that the Grievance Committee’s resolution is valid, binding and conclusive on
him, the Supreme Court reasoned, thus:
“At any rate, Octavio cannot claim that the Committee Resolution is not valid, binding
and conclusive as to him for being a modification of the CBA in violation of Article 264 [253]
of the Labor Code. It bears to stress that the said resolution is a product of the grievance
procedure outlined in the CBA itself. It was arrived at after the management and the union
through their respective representatives conducted negotiations in accordance with the
CBA. On the other hand, Octavio never assailed the competence of the grievance
committee to take cognizance of his case. Neither did he question the authority or credibility
of the union representatives; hence, the latter are deemed to have properly bargained on
his behalf since “unions are the agent of its members for the purpose of securing just and
fair wages and good working conditions. ” In fine, it cannot be gainsaid that the Committee
Resolution is a modification of the CBA. Rather, it only provides for the proper
implementation of the CBA provision respecting salary increases.”
ELEVATION OF GRIEVANCE TO VOLUNTARY ARBITRATION
1. UNRESOLVED GRIEVANCES.
All grievances submitted to the grievance machinery which are not settled within seven (7)
calendar days from the date of their submission for resolution should automatically be referred to
voluntary arbitration prescribed in the CBA.17
The various internal procedural steps or stages of resolving grievances under the grievance
machinery in a CBA should be fully exhausted before resort to voluntary arbitration may be made. The
7-calendar day period is usually reckoned from the date of their submission for resolution to the last step
of the internal grievance machinery. Simply stated, only after exhausting all the internal procedures and
only after the lapse of this period that unsettled or unadjusted grievances should automatically be referred
to voluntary arbitration enunciated in the CBA.18
2. NUMBER OF VOLUNTARY ARBITRATORS NOT SPECIFIED IN THE LAW.
Article 260 does not specify the number of Voluntary Arbitrators. However, under the NCMB
Revised Procedural Guidelines in the Conduct of Voluntary Arbitration Proceedings, 19 it is provided that
if the CBA does not specify the number of Voluntary Arbitrators, the case should be heard and resolved
by a sole Voluntary Arbitrator, unless the parties agree otherwise.
The alternatives under the law - whether to have one or more Voluntary Arbitrators - have their
respective advantages and disadvantages. In this matter, cost is not the only consideration; full
deliberation on the issues is another, and it is best accomplished in a hearing conducted by three (3)
Voluntary Arbitrators. In effect, the parties are afforded the latitude to decide for themselves the
composition of the grievance machinery as they find appropriate to a particular situation.20
3. PROCEDURE IN SUBMITTING UNRESOLVED GRIEVANCES TO VOLUNTARY
ARBITRATION.
When a grievance remains unresolved, either party may serve notice upon the other of its
decision to submit the issue to voluntary arbitration. The notice should state the issue or issues to be
arbitrated and a copy thereof should be furnished to the NCMB or the Voluntary Arbitrator or panel of
Voluntary Arbitrators named or designated in the CBA.
If the party upon whom the notice is served fails or refuses to respond favorably within seven
(7) days from receipt thereof, the Voluntary Arbitrator or panel of Voluntary Arbitrators designated in
the CBA should commence voluntary arbitration proceedings. Where the CBA does not so designate the
particular Voluntary Arbitrator, the NCMB is mandated to call the parties and appoint a Voluntary
Arbitrator or panel of Voluntary Arbitrators who shall thereafter commence arbitration proceedings.
In instances where the parties failed to select a Voluntary Arbitrator or panel of Voluntary
Arbitrators, the regional branch of the NCMB shall designate the Voluntary Arbitrator or panel of
Voluntary Arbitrators as may be necessary, which designation shall have the same force and effect as if
the parties have selected the Voluntary Arbitrator themselves. 21
4. ONCE BROUGHT TO VOLUNTARY ARBITRATION, ADDITIONAL ISSUES OTHER
THAN THE GRIEVANCE ITSELF MAY BE RAISED OR RESOLVED THEREIN.
Since labor policy encourages the settlement or resolution of all issues or irritants in the
labor-management relationship as a means of promoting industrial stability, parties to a voluntary
arbitration case should be allowed to add issues other than the grievance which is the subject
thereof, provided it does not give undue advantage to one and cause prejudice to the other. The
party wishing to add other issues must inform the other party and seek his conformity.
The other situation which would allow an issue to be added is when after the grievance has
been presented, it is discovered that it is linked or interrelated to another issue not previously
resolved and the resolution of the latter is necessary to the final determination of the grievance. 22
5. ELEVATION OF GRIEVANCE DIRECTLY TO VOLUNTARY ARBITRATION WITHOUT
PASSING THROUGH GRIEVANCE MACHINERY.
The elevation of a grievable issue directly to voluntary arbitration without coursing it through
the grievance machinery appears to be proscribed by the Labor Code which directs the parties to a
CBA to establish a grievance machinery for the adjustment and resolution of grievances prior to their
elevation to voluntary arbitration which is considered the last step in the grievance procedure. In
view, however, of the State policy to encourage voluntary arbitration of labor-management disputes,
it is submitted that a grievance may be brought directly to voluntary arbitration without passing
through the grievance machinery, especially when the latter has been proved to be ineffective in the
past, or when the parties inadvertently failed to include a grievance machinery provision in their
CBA.23
In Philimare Shipping & Equipment Supply, Inc. v. NLRC, 24 the petitioner raises the issue
of the failure of the private respondent to observe the grievance procedure provided in the Revised
Standard Employment Contract for Seafarers requiring the prior filing of the complaint with the head of
the section of the vessel. The Supreme Court, in declaring this argument as deserving of scant
consideration, ruled: “The circumstances surrounding his dismissal and his immediate forced repatriation
to the Philippines presented no opportunity for respondent Zulueta to faithfully follow the procedure.
After all, technical rules of procedure should not be strictly applied to labor cases where the result would
be detrimental to the working man. Moreover, petitioner (employer) did not question the jurisdiction of
the Labor Arbiter. By actively participating in the proceedings by the submission of its position paper,
petitioner has recognized the authority of the Labor Arbiter to take cognizance of the complaint and to
resolve the issue of illegal dismissal.”
In Central Pangasinan Electric Cooperative, Inc. v. Macaraeg, 25 the parties voluntarily
agree to submit the issue of illegal dismissal for voluntary arbitration without passing through the
grievance machinery. However, before the Supreme Court, this was raised as an issue. The Supreme
Court ruled: “At the outset, we hold that the first issue raised in the petition pertaining to the alleged
violation of the CBA grievance procedure is moot and academic. The parties’ active participation in the
voluntary arbitration proceedings, and their failure to insist that the case be remanded to the grievance
machinery, shows a clear intention on their part to have the issue of respondents’ illegal dismissal directly
resolved by the Voluntary Arbitrator. We therefore find it unnecessary to rule on the matter in light of
their preference to bring the illegal dismissal dispute to voluntary arbitration without passing through the
grievance machinery.”
6. INTERRELATIONSHIP BETWEEN GRIEVANCE PROCEDURE AND VOLUNTARY
ARBITRATION.
It is of vital importance that the interrelationship of the two procedures
- grievance and arbitration - be borne in mind by those who study and practice arbitration. A grievance
procedure in which few disputes are settled inevitably overloads arbitral machinery. Arbitration
procedures and awards that undermine the grievance machinery by permitting serious disregard of its
prescribed procedures can invite more arbitration and fewer settlements by negotiation. Arbitration that
encourages overemphasis on technical procedural requirements will thwart settlement on the merits so
that pressure builds for resort to self-help. Obviously the balance to be struck requires judgment,
preeminently on the part of the representatives of unions and management, who have initial and primary
responsibility. How they discharge their functions may be affected by what arbitrators do. Arbitration is
a powerful tool that can, on occasion, send reverberations through the larger organism, the grievance
procedure and shop office relations.26
7. PARTY NOT ALLOWED TO GO DIRECTLY TO COURT IN DISREGARD OF
VOLUNTARY ARBITRATION AFTER DECISION IS RENDERED BY GRIEVANCE
COMMITTEE.
It is settled that when parties have validly agreed on a procedure for resolving grievances and
to submit a dispute to voluntary arbitration then that procedure should be strictly observed. 27
Before a party is allowed to seek the intervention of the court, it is a precondition that he
should have availed of all the means of administrative processes afforded him. Hence, if a remedy
within the administrative machinery can still be resorted to by giving the administrative officer
concerned every opportunity to decide on a matter that comes within his jurisdiction, then such
remedy should be exhausted first before the court’s judicial power can be sought. The premature
invocation of the court’s judicial intervention is fatal to one’s cause of action.” 28 Indeed, the
underlying principle of the rule on exhaustion of administrative remedies rests on the presumption
that when the administrative body, or grievance machinery, is afforded a chance to pass upon the
matter, it will decide the same correctly.29
The said case of Octavio30 presents the classic example of an employee who brought a
grievable issue for adjudication by the Grievance Committee but who, instead of submitting the issue
for voluntary arbitration after the Grievance Committee resolved it against him, filed a case raising
the same issue with the Labor Arbiter. Petitioner here raised before respondent’s Union-Management
Grievance Committee the determination of his salary increases as provided in the CBAs. Thus, his case
involves the proper interpretation and implementation of the pertinent provisions of the CBAs. And in
accordance with the procedure prescribed therein, the said committee made up of representatives of
both the union and the management convened. Unfortunately, it failed to reach an agreement.
Petitioner’s recourse pursuant to the CBA was to elevate his grievance to the Board of Arbitrators for
final decision. Instead, nine (9) months later, he filed a complaint before the Labor Arbiter. Holding
that petitioner Octavio’s recourse to the labor tribunals (Labor Arbiter and NLRC) below as well as to
the CA, and, finally, to the Supreme Court, must fail, the High Court pronounced as follows:
“By failing to question the Committee Resolution through the proper procedure
prescribed in the CBA, that is, by raising the same before a Board of Arbitrators, Octavio is
deemed to have waived his right to question the same. Clearly, he departed from the
grievance procedure mandated in the CBA and denied the Board of Arbitrators the
opportunity to pass upon a matter over which it has jurisdiction. Hence, and as correctly held
by the CA, Octavio’s failure to assail the validity and enforceability of the Committee
Resolution makes the same binding upon him. On this score alone, Octavio’s recourse to the
labor tribunals below, as well as to the CA, and, finally, to this Court, must therefore fail.”
2.
VOLUNTARY ARBITRATOR
1. VOLUNTARY ARBITRATION.
“Voluntary arbitration” refers to the mode of settling labor-management disputes in which the
parties select a competent, trained and impartial third person who is tasked to decide on the merits of the
case and whose decision is final and executory.31 It is a third-party settlement of a labor dispute involving
the mutual consent by the representatives of the employer and the labor union involved in a labor dispute
to submit their case for arbitration.32
2. VOLUNTARY ARBITRATOR.
a. Who is a Voluntary Arbitrator?
A “Voluntary Arbitrator” refers to:
(1)
any person who has been accredited by the National Conciliation and Mediation Board
(“NCMB” or “Board”) as such; or
(2)
any person named or designated in the CBA by the parties as their Voluntary Arbitrator;
or
(3)
one chosen by the parties with or without the assistance of the NCMB, pursuant to a
selection procedure agreed upon in the CBA; or
(4)
one appointed by the NCMB in case either of the parties to the CBA refuses to submit to
voluntary arbitration.
This term includes a panel of Voluntary Arbitrators.33
b. Two (2) kinds of Voluntary Arbitrators.
Based on the above definition, Voluntary Arbitrators may be classified into two (2) kinds,
namely:
(1) “Permanent Arbitrator” referring to the Voluntary Arbitrator specifically named or
designated in the CBA by the parties as their Voluntary Arbitrator; and
(2) “Ad-Hoc Arbitrator” referring to the Voluntary Arbitrator chosen by the parties in
accordance with the established procedure in the CBA or the one appointed by the NCMB
in case there is failure in the selection or in case either of the parties to the CBA refuses to
submit to voluntary arbitration.34
c. Is Voluntary Arbitrator an employee of government?
A Voluntary Arbitrator is not an employee, functionary or part of the government or of the
Department of Labor and Employment; he may be a private individual but authorized to render
arbitration services provided under labor laws.35
d. Is it required that a Voluntary Arbitrator be a lawyer?
No, a Voluntary Arbitrator is not required to be a lawyer. Any individual may be designated as
such by virtue of the mutual agreement of the parties to a controversy.
3. VOLUNTARY ARBITRATOR ACTS IN QUASI-JUDICIAL CAPACITY.
Although not a part of a government unit or a personnel of the Department of Labor and
Employment, a Voluntary Arbitrator, by the nature of his functions, acts in a quasi-judicial capacity. He
is a means by which government acts, or by which a certain government act or function is performed. He
performs a state function pursuant to a governmental power delegated to him under the Labor
Code.36 The landmark case of Luzon Development Bank v. Association of Luzon Development Bank
Employees,37 clearly declared that a Voluntary Arbitrator, whether acting solely or in a panel, enjoys in
law the status of a quasi-judicial agency.
4. POWERS OF A VOLUNTARY ARBITRATOR OR PANEL OF VOLUNTARY
ARBITRATORS.
The Voluntary Arbitrator or panel of Voluntary Arbitrators shall have the following powers:
(1) To require any person to attend hearing/s;
(2) To subpoena witnesses and receive documents when the relevancy of the testimony and the
materiality thereof have been demonstrated to the arbitrator;
(3) To take whatever action is necessary to resolve the issue/s subject of the dispute;
(4) To issue a writ of execution to enforce final decisions and in connection therewith, it shall
be his duty to:
4.1 see to it that his decision is fully satisfied;
4.2 inquire into the correctness of the execution of his final decision;
4.3 consider whatever supervening event that may transpire during such execution;
4.4 determine every question of fact and law which may be involved in the execution. 38
(a)
JURISDICTION
1. ORIGINAL AND EXCLUSIVE JURISDICTION.
a. In general.
The
Voluntary
Arbitrator
or
panel
of
Voluntary
Arbitrators
shall
have exclusive and original jurisdiction over the following cases:
(1) Unresolved grievances arising from the interpretation or implementation of the collective
bargaining agreement (CBA) .39
(2) Unresolved grievances arising from the interpretation or enforcement of company
personnel policies.40
(3) Violations of the CBA which are not gross in character. 41
(4) Other labor disputes, including unfair labor practices and bargaining deadlocks, upon
agreement of the parties.42
(5) National interest cases.43
(6) Wage distortion issues arising from the application of any wage orders
in organized establishments.44
(7) Unresolved grievances arising from the interpretation and implementation of the
Productivity Incentive Programs under R.A. No. 6971.45
b. Rights disputes.
Nos. 1, 2 and 3 above, which are provided for under Article 261 of the Labor Code, are
commonly known as “rights disputes.”46 This kind of disputes contemplates the existence of a CBA
already concluded or, at any rate, a situation in which no effort is made to bring about a formal change
in its terms or to create a new one. The dispute relates either to the meaning or proper application of a
particular provision therein with reference to a specific situation or to an omitted case. In the latter event,
the claim is founded upon some incident of the employment relation or asserted one, independent of
those covered by the collective agreement. In either case, the claim is to rights accrued and not merely
to new ones created for the future.47
c. Interest disputes.
Bargaining deadlocks are often referred to as “interest disputes.”48 This kind of disputes
relates to disputes over the formation of collective agreements or efforts to secure them. They arise where
there is no such agreement or where it is sought to change the terms of one and therefore the issue is not
whether an existing agreement controls the controversy. They look to the acquisition of rights for the
future, not to assertion of rights claimed to have vested in the past. 49
I.
JURISDICTION OVER UNRESOLVED GRIEVANCES
As to what is meant by the term “unresolved” grievance, both Articles 260 and 261 are silent
on this point. They do not require that a “decision”or “resolution” be made or rendered or an action be
taken on the grievance before it may be considered as “unresolved.” The grievance that would
necessitate its elevation to a Voluntary Arbitrator or panel of Voluntary Arbitrators for adjudication and
resolution may be treated as “unresolved” in either of two (2) senses, namely:
(1) A decision or resolution was rendered thereon through the various steps of the grievance
machinery and either or both parties is/are not satisfied therewith; or
(2) No action at all was taken thereon within the period of seven (7) days from its submission
for resolution to the last step of the grievance machinery;
Within said seven (7) days, the law50 requires that the grievance be “automatically referred to
voluntary arbitration. ” It is thus clear that the said period should be reckoned not from the date of the
issuance of any decision or resolution on the grievance, or more accurately, from the receipt of a copy of
the decision or resolution by the parties to the grievance but from the date the grievance is submitted for
resolution to the last step of the grievance machinery. No other conclusion can be drawn from the clear
provision of Article 260 except that whether or not a decision or resolution is issued therein, the said
period starts to run from the date of submission for resolution of the grievance to the last step of the
grievance machinery prescribed in the CBA and not from the date a decision or resolution is rendered by
and through the grievance machinery.
Supposing no action or decision is made by the grievance machinery within said period, what
is there to elevate to voluntary arbitration? Under this circumstance, what is brought before the
Voluntary Arbitrator or panel of Voluntary Arbitrators is not a decision or resolution rendered through
the grievance machinery but the very raw issues presented as grievance before the grievance machinery
– unacted upon and sans any ruling thereon by the grievance machinery. This explains the use of the
generic term “unresolved” in Article 261.
II.
JURISDICTION OVER VIOLATION OF CBA
Article 248(i) of the Labor Code mentions violation of a CBA by the employer as a form of
ULP. Similarly, Article 249(f) thereof, considers violation of a CBA by the labor organization as ULP.
These provisions have been qualified by Article 26151 in that “violations of a Collective Bargaining
Agreement, exceptthose which are gross in character, shall no longer be treated as unfair labor practice
and shall be resolved as grievances under the CBA. For purposes of this article, “gross violation” of
CBA shall mean flagrant and/or malicious refusal to comply with the economic provisions of such
agreement. ”
In other words, (1) ordinary violation of a CBA which involves non-economic provisions
thereof; and (2) violation of its economic provisions which is not gross in character, are no longer
treated as ULP. Consequently, they should be resolved as ordinary grievances or grievable issues
properly cognizable under the grievance machinery and voluntary arbitration provisions of a CBA.
Only gross violation of a CBA as defined in Article 261 is considered ULP, in which case, the
jurisdiction thereover belongs to the Labor Arbiter under Article 217(a) of the Labor Code. If not gross
in nature, the same shall be treated as a grievable issue properly to be adjudicated under the Grievance
Machinery52 and, if unresolved, through the process of voluntary arbitration. 53
III.
JURISDICTION OVER OTHER LABOR DISPUTES
Under Article 262 of the Labor Code, upon agreement of the parties, the Voluntary Arbitrator
or panel of Voluntary Arbitrators may also hear and decide all other labor disputes, including unfair
labor practices and bargaining deadlocks. For this purpose, before or at any stage of the compulsory
arbitration process, parties to a labor dispute may agree to submit their case to voluntary arbitration. 54
IV.
JURISDICTION OVER NATIONAL INTEREST CASES
Article 263(g) of the Labor Code which involves the DOLE Secretary’s power of assumption
of jurisdiction or certification to the NLRC of labor disputes affecting industries indispensable to the
national interest, also provides that “[b]efore or at any stage of the compulsory arbitration process,
the parties may opt to submit their dispute to voluntary arbitration.”
This means that even if the case has already been assumed by the DOLE Secretary or certified
to the NLRC for compulsory arbitration, or even during its pendency therewith, the parties thereto may
still withdraw the case from the DOLE Secretary or NLRC, as the case may be, and submit it to a
Voluntary Arbitrator for voluntary arbitration purposes.
Consequently, once submitted for voluntary arbitration, it is the Voluntary Arbitrator who is
mandated to resolve the dispute. His decision rendered therein shall be final and executory ten (10)
calendar days after receipt thereof by the parties.55
V.
JURISDICTION OVER WAGE DISTORTION CASES
 Jurisdiction over wage distortion cases depends on whether the establishment
is organized or unorganized.
In organized establishments, the employer and the union are required to negotiate to correct
the wage distortion. Any dispute arising from such wage distortion should be resolved through the
grievance procedure under the CBA and if it remains unresolved, through voluntary arbitration.56
In unorganized establishments, where there are no CBAs or recognized or certified collective
bargaining unions, the employer and the workers should endeavor to correct such distortion among
themselves. It is required that any dispute arising therefrom should be settled through the NCMB and
if it remains unresolved after ten (10) calendar days of conciliation, it should be referred to a Labor
Arbiter in the appropriate branch of the NLRC. It is mandatory for the Labor Arbiter to conduct
continuous hearings and decide the dispute within twenty (20) calendar days from the time said dispute
is submitted to him for compulsory arbitration.57
VI.
JURISDICTION OVER DISPUTES INVOLVING
THE PRODUCTIVITY INCENTIVES PROGRAM
Disputes and grievances arising from the interpretation or implementation of the productivity
incentives program under R.A. No. 6971 58 should first be submitted to the Labor-Management
Committee for resolution. If they remain unresolved within twenty (20) calendar days from the time of
their submission to said Committee, the same should be submitted for voluntary arbitration in line with
the pertinent provisions of the Labor Code. Under this law, the productivity incentives program is
required to designate and include the names of the Voluntary Arbitrators or panel of Voluntary
Arbitrators who were previously chosen and agreed upon by the Labor-Management Committee.59
VII.
EXERCISE OF JURISDICTION
1. HOW VOLUNTARY ARBITRATOR ACQUIRES JURISDICTION.
The Voluntary Arbitrator or panel of Voluntary Arbitrators shall exercise jurisdiction over a
specific case only under the following:
(1) Upon receipt of a Submission Agreement duly signed by both parties;
(2) Upon receipt of a Notice to Arbitrate when there is refusal to arbitrate by one party;
(3) Upon receipt of an appointment or designation as Voluntary Arbitrator by the NCMB
(Board) in either of the following circumstances:
(3.1. ) In the event that the parties failed to select a Voluntary Arbitrator; or
(3.2. ) In the absence of a named Voluntary Arbitrator in the CBA and the party upon whom
the Notice to Arbitrate is served does not favorably reply within seven (7) days from
receipt of such notice.60
2. HOW INITIATED.
Based on the foregoing discussion, an arbitration may be initiated either by way of:
(1) A Submission Agreement; or
(2) A Demand or Notice to Arbitrate invoking the arbitration clause in the CBA; or
(3) An Appointment from the NCMB.61
3. SUBMISSION AGREEMENT.
A “Submission Agreement” refers to a written agreement by the parties submitting their case for
arbitration, containing a statement of the issues, the name of their chosen Voluntary Arbitrator and a
stipulation and an undertaking to abide by and comply with the resolution that may be rendered therein,
including the cost of arbitration.62
The Submission Agreement should contain, among others, the following stipulations:
(1) An agreement to submit the case to arbitration;
(2) The specific issue/s to be arbitrated;
(3) The name/s of the Voluntary Arbitrator or panel of Voluntary Arbitrators;
(4) The names, addresses and contact numbers of the parties;
(5) The agreement to perform or abide by the decision that may be rendered therein by the
Voluntary Arbitrator or panel of Voluntary Arbitrators. 63
4. NOTICE TO ARBITRATE.
A “Notice to Arbitrate” refers to a formal demand made by one party to the other for the
arbitration of a particular dispute in the event of refusal by one party in a CBA to submit the same to
arbitration.64
If after exhausting the grievance procedure, the grievance remains unresolved and one
party refuses to submit the same to voluntary arbitration, the following procedure should be observed:
(1) A Notice to Arbitrate should be served upon the refusing or unwilling party, copy furnished
the permanent Voluntary Arbitrator, if one is named in the CBA, and the NCMB Regional
Branch having jurisdiction over the workplace;
(2) After the lapse of the 7-day period within which to respond to the Notice to Arbitrate, the
permanent Voluntary Arbitrator shall immediately commence the arbitration proceedings;
(3) In the absence of a permanent Voluntary Arbitrator named in the CBA, the NCMB shall
appoint a Voluntary Arbitrator who shall immediately commence the arbitration proceedings
upon receipt of such appointment.65
The Notice to Arbitrate should contain, among others, the following:
(1) The names, addresses and contact numbers of the party upon whom the notice is made;
(2) The arbitration clause of the CBA;
(3) The specific issue/s or dispute/s to be arbitrated;
(4) The relief sought; and
(5) The name, address and contact numbers of the party initiating or requesting the arbitration. 66
5. SUBMISSION AGREEMENT VS. NOTICE TO ARBITRATE.
“Submission Agreement” is sometimes called a “stipulation” or an “agreement to
arbitrate.” It is used where there is no previous agreement to arbitrate. The submission agreement
which must be signed by both parties, describes an existing dispute. It often names the arbitrator,
prescribes the procedure in the hearing and sometimes contains considerable details of the
arbitrator’s authority and other matters which the parties wish to control. A submission agreement is
more appropriate in interest disputes since collective bargaining agreements generally do not provide
for the arbitration of such disputes that may arise in the future. Submission agreement is often
entered into after the dispute has materialized and the issues can already be defined.
However, a “Demand” or a “Notice of Intent to Arbitrate” or simply a “Notice to Arbitrate,” is
more applicable to rights disputes67 because collective bargaining agreements are required under R.A.
No. 6715, to provide for a grievance procedure and a voluntary arbitration clause with respect to disputes
arising from the application or interpretation of the CBA or the interpretation or enforcement of company
personnel policies. Thus, it is perfectly valid to stipulate in the CBA on an “agreement to arbitrate”future
disputes that may arise under and during the term thereof. If a dispute is covered by such an arbitration
clause, arbitration may be initiated unilaterally by one party by serving upon the other a written demand
or notice of intent to arbitrate.68
Sometimes, both the Submission Agreement and the Notice to Arbitrate are used
interchangeably.69
Parties to a case may still choose to execute a submission agreement even if there is already an
arbitration clause in the CBA.70
6. AUTHORITY OF VOLUNTARY ARBITRATOR.
a. Extent of authority in general.
As a general rule, the authority of an arbitrator embraces or covers the following:
(1) General authority to investigate and hear the case upon notice to the parties and to render an
award based on the contract and record of the case;
(2) Incidental authority to perform all acts necessary for an adequate discharge of his duties and
responsibilities like setting and conduct of hearing, attendance of witnesses and proof
documents and other evidence, fact-finding and other modes of discovery, reopening of
hearing, etc. ;
(3) Special power in aid of his general contractual authority like the authority to determine
arbitrability of any particular dispute and to modify any provision of existing agreement
upon which a proposed change is submitted for arbitration. 71
b. Voluntary Arbitrator has wide discretion to decide relevant issues raised in the
submission agreement.
Generally, said the Supreme Court in Ludo & Luym Corporation v. Saornido,72 the arbitrator
is expected to decide the questions expressly stated and limited in the submission agreement.
However, since arbitration is the final resort for the adjudication of disputes, the arbitrator can
assume that he has the power to make a final settlement. Thus, assuming that the submission
agreement empowers the arbitrator to decide whether an employee was discharged for a just cause,
the arbitrator in this instance, can reasonably assume that his powers extend beyond giving a yes-orno answer and include the power to reinstate him with or without back pay.
Raised by petitioner as the principal issue in the 2013 case of Goya, Inc. v. Goya, Inc.
Employees Union-FFW,73 is whether the Voluntary Arbitrator (VA) is empowered to rule on a
matter not covered by the issue submitted for arbitration. Petitioner argues that the Court of Appeals
erred when it held that the VA has not acted arbitrarily when he ruled on a matter that is not covered by
the sole issue submitted for voluntary arbitration, i.e. , “Whether or not [the Company] is guilty of unfair
labor practice in engaging the services of PESO, a third party service provider[,] under existing CBA,
laws[,] and jurisprudence. ” The Supreme Court, however, has this to say:
“We confirm that the VA ruled on a matter that is covered by the sole issue submitted
for voluntary arbitration. Resultantly, the CA did not commit serious error when it sustained
the ruling that the hiring of contractual employees from PESO was not in keeping with the
intent and spirit of the CBA. Indeed, the opinion of the VA is germane to, or, in the words of
the CA, ‘interrelated and intertwined with,’ the sole issue submitted for resolution by the
parties. This being said, the Company’s invocation of Sections 4 and 5, Rule IV and Section
5, Rule VI of the Revised Procedural Guidelines in the Conduct of Voluntary Arbitration
Proceedings dated October 15, 2004 issued by the NCMB is plainly out of order.”
But the exercise of wide discretion by the arbitrator was qualified in the case of United
Kimberly Clark Employees Union-Philippine Transport General Workers’ Organization
[UKCEU-PTGWO] v. Kimberly Clark Philippines, Inc. 74 It was held in this case that as a matter of
general proposition, an arbitrator is confined to the interpretation and application of the CBA. He does
not sit to dispense his own brand of industrial justice. His award is legitimate only insofar as it draws its
essence from the CBA, i.e. , when there is a rational nexus between the award and the CBA under
consideration. It is said that an arbitral award does not draw its essence from the CBA; hence, there is
an unauthorized amendment or alteration thereof, if:
(1) it is so unfounded in reason and fact;
(2) it is so unconnected with the working and purpose of the agreement (CBA) ;
(3) it is without any factual support in view of its language, its content, and other
indications of the parties’ intention;
(4) it ignores or abandons the plain language of the contract;
(5) it is mistakenly based on a crucial assumption which concededly is not a fact;
(6) it is unlawful, arbitrary or capricious; and
(7) it is contrary to public policy.
If the terms of a CBA are clear and have no doubt upon the intention of the contracting parties,
the literal meaning thereof should prevail. When a CBA is expected to speak on a matter but does not,
its sentence imports ambiguity on that subject. The arbitrator should not merely rely on the cold and
cryptic words on the face of the CBA but is mandated to discover the intention of the parties.
c. Adding issues to the grievance brought to arbitration.
If a grievance is brought to arbitration, could any party add issues other than the grievance
itself? Since the labor policy encourages the settlement or resolution of all issues or irritants in the labormanagement relationship as a means of promoting industrial stability, it is submitted that a party to a
voluntary arbitration case can add issues other than the grievance, provided it does not give undue
advantage to one and cause prejudice to the other. The party wishing to add other issues must inform the
other party and seek his conformity. 75
7. SOME PRINCIPLES ON JURISDICTION OF VOLUNTARY ARBITRATORS.
1)
Resort to voluntary arbitration from grievance machinery is in the nature of appeal.
- Article 261 describes the nature of the jurisdiction of Voluntary Arbitrators or panel of
Voluntary Arbitrators as “original and exclusive” when they exercise their power to hear and
decide “unresolved” grievances which are elevated to them after the process of the grievance
machinery proved unsuccessful. In reality, the exercise of such power vested upon them
is appellate in nature as may be clearly gleaned from the provisions of Article 260, in relation
to Article 261, that all grievances which are not settled or resolved within seven (7) calendar
days from the date of their submission for resolution to the last step of the grievance machinery
shall automatically be referred to voluntary arbitration prescribed in the CBA.76
2)
Note must be made that only grievances that are “unresolved” by the grievance machinery fall
under the “original and exclusive” jurisdiction of the Voluntary Arbitrators or panel of
Voluntary Arbitrators. If a grievance therefore has not been submitted at the first instance to the
grievance machinery, the Voluntary Arbitrators or panel of Voluntary Arbitrators do not have
jurisdiction to hear and decide it. Being mandated by law77to hear and decide grievances at the
first instance, it is the grievance machinery which is in actuality, exercising “original and
exclusive”jurisdiction over the same and not the Voluntary Arbitrators or panel of Voluntary
Arbitrators who may only validly acquire jurisdiction over them if they are “not settled or
resolved within seven (7) calendar days from the date of the submission for resolution to the
last step of the grievance machinery. ” Prior to the completion of the grievance procedure or
grievance machinery, the grievance cannot “automatically be referred to voluntary arbitration
prescribed in the CBA.”
3)
Cases cognizable by Voluntary Arbitrators in their original jurisdiction but filed with
Labor Arbiters,78 DOLE Regional Offices79 or NCMB80 should be disposed of by referring
them to the Voluntary Arbitrators or panel of Voluntary Arbitrators mutually chosen by the
parties.81
4)
Cases cognizable by Voluntary Arbitrators but filed with regular courts should be
dismissed. - The case of Union of Nestle Workers Cagayan de Oro Factory v. Nestle
Philippines, Inc.,82 presents a unique situation where the union filed an injunction case (with
prayer for the issuance of a temporary restraining order) with the Regional Trial Court (RTC)
against the employer to prohibit the implementation of the “Drug Abuse Policy” which requires
the conduct of simultaneous drug tests on all employees from different factories and plants in
keeping with the government’s thrust to eradicate the proliferation of drug abuse. The company
asserts that it has the right: (a) to ensure that its employees are of sound physical and mental
health, and (b) to terminate the services of an employee who refuses to undergo the drug test.
The union challenged the validity of the implementation of the said policy and branded it as a
mere subterfuge to defeat the employees’ constitutional rights. In affirming the ruling of the
RTC and Court of Appeals dismissing the complaint, the Supreme Court ruled that said policy
is in the nature of a “company personnel policy” and therefore any issue pertaining thereto falls
under the jurisdiction of the Voluntary Arbitrators or panel of Voluntary Arbitrators, not the
RTC, under Article 261 of the Labor Code.
5) THE WELL-ENTRENCHED RULE IS THAT WHEN A CASE DOES NOT INVOLVE
THE PARTIES TO A CBA – THE EMPLOYER AND THE BARGAINING UNION - IT
IS NOT SUBJECT TO VOLUNTARY ARBITRATION. While individual or group of
employees, without the participation of the union, are granted the right to bring grievance
directly to the employer, they cannot submit the same grievance, if unresolved by the
employer, for voluntary arbitration without the union’s approval and participation. The
reason is that it is the union which is the party to the CBA, and not the individual or group
of employees. - This rule was lately affirmed in the 2009 case of Tabigue v. International
Copra Export Corporation.83 Pursuant to Article 260 of the Labor Code, the parties to a CBA
shall name or designate their respective representatives to the grievance machinery and if the
grievance is unsettled in that level, it shall automatically be referred to the voluntary arbitrators
designated in advance by parties to a CBA. Consequently only disputes involving the union
and the company shall be referred to the grievance machinery or voluntary arbitrators. ”
The prominence of this rule is highlighted in termination disputes where the bargaining union
is not named a party to the illegal dismissal suit either because it failed to object to the dismissal
of the employee or the suit was initiated by the employee alone, without the assistance of his
union. Thus, in a number of cases, 84 the Voluntary Arbitrator was held not to have any
jurisdiction thereover because the union did not come into the picture, not having objected or
voiced any dissent to the dismissal of the employees. It is obvious that arbitration, without the
union’s active participation on behalf of the dismissed employees, would be pointless or even
prejudicial to their cause.
(b)
PROCEDURE
1. PROCEDURES AS PRESCRIBED IN THE LAW.
Article 262-A of the Labor Code prescribes the following procedures:
“Article 262-A. Procedures. – The Voluntary Arbitrator or panel of Voluntary Arbitrators
shall have the power to hold hearings, receive evidences and take whatever action is
necessary to resolve the issue or issues subject of the dispute, including efforts to effect a
voluntary settlement between parties.
“All parties to the dispute shall be entitled to attend the arbitration proceedings. The
attendance of any third party or the exclusion of any witness from the proceedings shall be
determined by the Voluntary Arbitrator or panel of Voluntary Arbitrators. Hearing may be
adjourned for cause or upon agreement by the parties.
“Unless the parties agree otherwise, it shall be mandatory for the Voluntary Arbitrator
or panel of Voluntary Arbitrators to render an award or decision within twenty (20) calendar
days from the date of submission of the dispute to voluntary arbitration.
“The award or decision of the Voluntary Arbitrator or panel of Voluntary Arbitrators shall
contain the facts and the law on which it is based. It shall be final and executory after ten
(10) calendar days from receipt of the copy of the award or decision by the parties.
“Upon motion of any interested party, the Voluntary Arbitrator or panel of Voluntary
Arbitrators or the Labor Arbiter in the region where the movant resides, in case of the
absence or incapacity of the Voluntary Arbitrator or panel of Voluntary Arbitrators, for any
reason, may issue a writ of execution requiring either the sheriff of the Commission or
regular courts or any public official whom the parties may designate in the submission
agreement to execute the final decision, order or award.” 85
I.
PROCEDURAL RULES GOVERNING
VOLUNTARY ARBITRATION PROCEEDINGS
1. NATURE OF PROCEEDINGS.
The proceedings before a Voluntary Arbitrator are non-litigious in nature. They are not
governed by technical rules applicable to court or judicial proceedings but they must, at all times, comply
with the requirements of due process.86
2. ARBITRATION PROCEDURES.
As a general rule, the rules governing the proceedings before a Voluntary Arbitrator or panel of
Voluntary Arbitrators are subject to legal requirements, 87 agreement among the parties88 to a labor
dispute and their chosen Arbitrator. In the absence of any agreement on any of the various aspects of the
voluntary arbitration proceedings, the pertinent provisions of the 2004 NCMB Revised Procedural
Guidelines in the Conduct of Voluntary Arbitration Proceedings89 and the Revised Rules of Court shall
apply by analogy or in a directory or suppletory character and effect. 90
3. LIBERAL CONSTRUCTION OF PROCEDURAL RULES.
The said Guidelines should be liberally construed to carry out the objectives of the Labor Code,
to promote voluntary arbitration as a preferred mode of labor or industrial dispute settlement and as an
integral component of the collective bargaining process.91
4. REVISED EXPEDITED PROCEDURES FOR VOLUNTARY ARBITRATION OF LABORMANAGEMENT DISPUTES.
In accordance with the State policy of promoting the expeditious settlement of labor disputes
and as a response to concerns over delays in case disposition, the Tripartite Voluntary Arbitration
Advisory Council (TVAAC) passed Resolution No. 1, Series of 1995,92 promulgating the Expedited
Procedures for Voluntary Arbitration of Labor Disputes. This was later superseded by Resolution No. 1,
Series of 199793 and subsequently, byResolution No. 2, Series of 199994 which provides as follows:
(1) The procedures shall apply to all voluntary arbitration cases handled by a single voluntary
arbitrator involving simple issue/s where hearings, reception of evidence, submission of post hearing
briefs/position papers, if necessary, and promulgation of decision can be completed within twenty (20)
calendar days from submission of the case to the arbitrator. However, this procedure shall not apply to
cases falling under the Free Legal Aid and Voluntary Arbitration Services (FLAVAS) program.
(2) The arbitrator shall meet the parties within two (2) days from referral of the case for
arbitration. For subsequent hearings, the arbitrator, with the agreement or in consultation with the parties,
shall fix the date, time, and place of the hearing.
(3) The hearing shall be conducted by the arbitrator in a manner that will expedite full
presentation of the evidence and arguments of the parties. The arbitrator shall prepare minutes of the
proceedings duly signed by the parties and attested to by the arbitrator, and which shall form part of the
records of the case.
(4) The award shall be in writing, signed by the arbitrator and rendered within twenty (20)
calendar days from the date the case is submitted for arbitration.
(5) In case of compliance with this Resolution, any party who has no capacity to pay the
arbitrator’s fee and upon approval of the application for subsidy, shall be entitled to a maximum subsidy
of fifteen thousand pesos (P15,000.00) . Such subsidy shall be paid directly to the voluntary arbitrator
upon submission of the documentary requirements by the parties.
5. CONTROL OF ARBITRATION PROCEEDINGS.
It is generally accepted that the conduct of arbitration proceedings is under the jurisdiction and
control of the arbitrator subject to such rules of procedures that the parties may jointly prescribe or those
which appropriate agencies like the NCMB may legally require. 95
II.
APPEARANCES IN VOLUNTARY ARBITRATION PROCEEDINGS
1. APPEARANCES.
The parties may personally appear in their own behalf or by their respective representatives
of their own choosing. He can be the spokesman in the pre-arbitral stages of the grievance
procedures like the shop stewards and foremen, top union and company officials, or company or
union attorney or a practicing attorney-at-law. What is important is that the party’s representative
must be duly authorized to appear in writing. The complete name and office address or any change in
the address of counsel/representative should be made of record and the other party should be
properly informed thereof.96
2. LIMITATION ON AUTHORITY TO BIND PARTIES.
Attorneys and other representatives of the parties are presumed to have the full authority to bind
their respective clients or principals in all matters of procedure but they cannot, without a special power
of attorney or express consent, enter into a compromise agreement with the opposing party in full or
partial discharge of a client’s or principal’s claim. 97
3. NON-APPEARANCE OF PARTIES.
In case of non-appearance of either of the parties for two (2) consecutive conferences despite
due notice, the Voluntary Arbitrator shall terminate the conference and issue an order requiring the
parties to submit their respective position papers within ten (10) calendar days from receipt of the said
order; otherwise, the case should be deemed submitted for decision based on the available records on
file.98
III.
CONCILIATION AND MEDIATION OF CASES
1. SETTING THE DATE, TIME AND PLACE OF INITIAL CONFERENCE.
Within two (2) days from receipt of the parties’ Submission Agreement, Notice to Arbitrate
or Appointment from the NCMB, the Voluntary Arbitrator is required to set the date, time and place
of the initial conference, with due notice to the parties.99
2. INITIAL CONFERENCE.
During the initial conference, the parties are encouraged to explore all possible means of
effecting a voluntary settlement of the dispute between them. Should the parties arrive at any agreement
as to the whole or any part of the dispute, the same shall be reduced in writing and signed by the parties
before the Voluntary Arbitrator and it shall form part of the decision. 100
3. DUTY TO CONCILIATE AND MEDIATE.
The Voluntary Arbitrator should exert best efforts to conciliate or mediate to aid the parties in
reaching a voluntary settlement of the dispute before proceeding with arbitration. 101 Conciliation or
mediation should be made even after arbitration has been initiated and an arbitration hearing has already
been commenced.102
4. ADOPTION OF AMICABLE SETTLEMENT IN THE AWARD.
Generally, when parties settle their dispute during the course of arbitration, they often request
that the arbitrator should set forth the terms of the settlement in the award. If the arbitrator believes that
the agreement is proper, fair, sound and lawful, it becomes his responsibility to adopt the same. 103
5. DUTY TO ENCOURAGE PARTIES TO ENTER INTO STIPULATION OF FACTS.
To facilitate speedy disposition of cases, in case the parties failed to reach a voluntary settlement
of the dispute, the Voluntary Arbitrator should encourage the parties to enter into a stipulation of facts
which should be reduced in writing and signed by the parties. The same shall form part of the records of
the case.104 The parties should stipulate only on facts which are no longer disputed, leaving the
presentation and examination of evidence only to such facts that are still in dispute. 105
An agreed statement of facts expedites the arbitration proceedings by reducing the number of
necessary witnesses and focusing attention only on the disputed issues or facts of the case. The parties,
at their own initiative or upon the suggestion of the arbitrator, may enter into a stipulation of facts before
or during the hearing.106
6. SIMPLIFICATION OF ARBITRABLE ISSUES.
The Voluntary Arbitrator must see to it that he understands clearly the issue/s submitted to
arbitration. If, after conferring with the parties, he finds the necessity to clarify or simplify the issue/s,
he should assist the parties in the reformulation thereof.107
7. FORMULATION OF GROUND RULES.
The parties and the Voluntary Arbitrator should jointly formulate and adopt the ground rules on
the following:
(1) Schedule and frequency of conferences or hearings;
(2) Rules on postponements;
(3) Period and manner of submission of position papers and other pleadings;
(4) Determination of the necessity of conducting a clarificatory conference or hearing;
(5) Period to decide the case; and
(6) Cost of arbitration.108
IV.
PLEADINGS IN VOLUNTARY ARBITRATION PROCEEDINGS
1. CAPTION AND TITLE OF PLEADINGS.
In all cases submitted by the parties to a Voluntary Arbitrator or panel of Voluntary Arbitrators,
the aggrieved party shall be called “Complainant” and the opposing party, the “Respondent. ” The full
names of the parties as far as they are known shall be stated in the original caption of the original
pleading, award or decision and in all summons, notices and processes to be served upon them. 109
2. WHERE TO FILE PLEADINGS.
All pleadings relative to the voluntary arbitration case should be filed directly with the chosen
Voluntary Arbitrator at his designated business or professional office, copy furnished the Regional
Branch of the NCMB having jurisdiction over the workplace of the complainant. 110
3. SERVICE OF COPIES OF PLEADINGS, NOTICES AND AWARDS.
The party filing the pleadings should serve the opposing party or parties with a copy or
copies thereof (and the same may be said of notices or copies of award) in the following manner:
(1) Personal service; or
(2) Registered mail.
If a party is represented by counsel or authorized representative, service should be made on the
latter. Service by registered mail is complete upon receipt by the addressee or his agents. 111 In the case
of Philex Gold Philippines, Inc. v. Philex Bulawan Supervisors Union, 112the Supreme Court,
citing Section 4, Rule III of the NCMB Procedural Guidelines in the Conduct of Voluntary Arbitration
Proceedings, ruled that a notice sent through petitioner company’s Liaison Office is not notice to its
counsel. Petitioners argue that the service of the Voluntary Arbitrator’s decision on Philex Gold’s Liaison
Office at Libertad St. , Bacolod City on January 14, 2000, was improper since their counsel’s address of
record was at Vista Alegre, Nabulao, Sipalay, Negros Occidental 6113. Petitioners state that Philex
Gold’s Liaison Office forwarded said decision to their counsel only the next day or on January 15,
2000, which should be the date of notice to the counsel and the basis for the computation of the period
to file a motion for reconsideration of said decision. In holding that this contention is meritorious, the
High Court ruled that “(u)nder the circumstances, reliance may be placed on the assertion of petitioners
that a copy of the Decision of the Voluntary Arbitrator dated January 14, 2000 was delivered to
their counsel the next day or on January 15, 2000, which must be deemed as the date of notice to counsel
of said Decision. Hence, when petitioners’ motion for reconsideration was filed on January 25, 2000, it
was filed within the 10-day reglementary period under Article 262-A of the Labor Code. The Court of
Appeals therefore erred in holding that said motion for reconsideration was filed out of time.”
4. SUBMISSION OF POSITION PAPERS AND OTHER PLEADINGS.
The Voluntary Arbitrator should direct the parties to submit their respective verified position
papers and other pleadings on the dates agreed upon during the initial conference. The position papers
should cover only the issues and causes of action raised in the Submission Agreement, Notice to Arbitrate
or Appointment of the Voluntary Arbitrator, as the case may be, and the stipulation of facts as simplified
and clarified during the initial conference. The position papers should be accompanied by the supporting
evidence, if any, including the affidavits of witnesses which shall take the form of their direct
testimonies.113
V.
CONDUCT OF HEARING
IN VOLUNTARY ARBITRATION PROCEEDINGS
1.
DETERMINATION OF NECESSITY OF CONDUCTING CLARIFICATORY
CONFERENCE OR HEARING, INCLUDING CONDUCT OF OCULAR INSPECTION.
Immediately after the submission of the position papers and other pleadings, the Voluntary
Arbitrator should determine the need for holding a clarificatory conference or ocular inspection. In such
a case, the parties should be duly notified thereof. 114
A plant visit may be indispensable if the conduct thereof would help the arbitrator secure a
better understanding of the case and, in some cases, would avoid voluminous testimonies. Plant visit may
be done at the initiative of the arbitrator or at the request of any of the parties to the dispute. 115
2. SETTING TIME AND PLACE OF HEARING AND SENDING OF NOTICE OF HEARING.
The arbitrator is responsible in setting the time and place of hearing and the sending of the
notice of hearing. Ordinarily, the arbitrator will meet at any time and place agreed to by the parties, if
he is available. Otherwise, he fixes the time and place in consultation with the parties and gives timely
and written notice of such date, time and place of the hearing.116
3. ARBITRATION CONFERENCE OR HEARING.
In the conduct of conference or hearing, the arbitrator should provide the parties adequate
opportunities to be heard. He should control the proceedings and see to it that proper decorum is
observed. He must render a ruling on the issue/s raised in the course of the proceedings. He must treat
all significant aspects of the proceedings as confidential in nature unless confidentiality is waived by the
parties.117
4. PRESENCE OF VOLUNTARY ARBITRATOR IN ALL HEARINGS, MANDATORY.
The presence of the Voluntary Arbitrator in all conferences or hearings is deemed imperative
in virtually all cases. In giving each party full and fair opportunity to be heard, the arbitration hearings
serve to fully inform the Voluntary Arbitrator regarding all material aspects of the disputes. Even
when the parties agree to submit their case on the basis of stipulated facts, written briefs and
affidavits, the Voluntary Arbitrator may not always agree that the case be resolved without a hearing.
Generally, the Voluntary Arbitrator must inform the parties that relevant and material evidence must
be presented regardless of its form and with minimal use of technicalities. 118
5. OBSERVANCE OF DUE PROCESS.
a. Procedural steps.
Arbitration hearing normally involves many, if not all, of the following steps:
(1) The taking of the oath by the arbitrator and his opening statement;
(2) Brief statement of the issues in controversy by the parties;
(3) Stipulation of facts;
(4) Presentation of evidence by the grievant. The Voluntary Arbitrator shall have a wide latitude
of discretion in determining the order of presentation. In disciplinary cases, it is the party
who disturbed the status quo in the relationship who will present the case. In cases of
contract interpretation, the statement shall be presented first by the initiating party.
(5) Presentation of evidence by the other party;
(6) Supplementary fact-finding procedures, such as ocular inspections;
(7) Hearings and judgment of default;
(8) Formal offer of evidence;
(9) Filing of briefs and reply briefs; and
(10) Closing of hearing.
b. Observance of rudiments of due process.
The Voluntary Arbitrator should always observe the rudiments of due process in the
proceedings before him. In Unicraft Industries International Corporation v. CA, 119 petitioners decry
the Voluntary Arbitrator’s rendition of a judgment against them after they failed to appear at the hearing
scheduled on March 3, 1997 at 3:00 o’clock in the afternoon. Subsequently, however, in a motion for the
calling of another hearing which was denied, petitioners manifested to the Voluntary Arbitrator that the
reason why they failed to appear on March 3, 1997 was because they received the notice of the said
hearing only at 4:00 o’clock in the afternoon of that day. Indeed, according to the Supreme Court, this
omission to afford petitioners a chance to present their evidence is a clear violation of their constitutional
right and has the effect of rendering the arbitrator’s judgment null and void. It is a cardinal rule in law
that a decision or judgment is fatally defective if rendered in violation of a party-litigant’s right to due
process.120Section 6, Rule VI of the Procedural Guidelines in the Conduct of Voluntary Arbitration
Proceedings, explicitly ordains that the Voluntary Arbitrators should observe the requirements of
procedural due process by providing the parties to a case adequate opportunities to be heard.
6. EMPLOYERS ENTITLED TO DUE PROCESS IN VOLUNTARY ARBITRATION
PROCEEDINGS.
In the same case of Unicraft, the Supreme Court pronounced that employers are also entitled to
due process. It re-stated its previous reminder to labor tribunals in the weighing of the rights and interest
of employers and employees tha while the intendment of the law is to favor the employee, it in no way
implies that the employer is not entitled to due process. For a labor tribunal to wantonly disregard the
employer’s constitutional right to be heard is a matter that causes great concern. Such an action can only
result in public mistrust of the entire legal system.121
7. ATTENDANCE OF OTHER PERSONS IN ARBITRATION HEARINGS.
As a general rule, an arbitration hearing is not open to the public. Only
persons having a direct interest in the subject of the arbitration have the right to attend any
conference or hearing. The attendance of any other person is at the discretion of the arbitrator and only
with the permission of the arbitrator or the parties.122 It is generally agreed that each party has the right
to be represented in arbitration proceedings by a representative of its/his own choosing. He can be the
spokesman in the pre-arbitral stages of the grievance procedure like the shop steward and foreman, top
union and company official, or company or union attorney. 123
8. CONTINUANCE OR ADJOURNMENT OF HEARING.
An arbitrator may grant continuance of hearing or he may adjourn the hearing from time to
time upon the joint request of the parties or at the initiative of only one party for good cause shown.
Continuance is often requested due to the absence of witnesses or evidence and the request, even if
opposed by the other party, may be granted if such absence is not due to the fault of the requesting
party.124
9. EX-PARTE PROCEEDINGS AND DEFAULT AWARDS.
Only an unexplained failure to appear after due notice, not a delay in appearance, can justify
an ex-parte proceeding. The Voluntary Arbitrator must proceed to hear the testimony and receive all
the evidence submitted by the other party including those that he may require for the making of an
award.125
10. WHEN HEARING DEEMED CLOSED FOR PURPOSES OF RENDERING AN AWARD.
Hearings are deemed closed when all evidence and arguments of the parties have been received
and final adjournment is declared. However, if briefs and other documents are to be filed after such
adjournment, the hearing is deemed closed only after receipt of the said briefs and documents. 126
11. RE-OPENING OF HEARING.
Under accepted practice, the Voluntary Arbitrator, on his own initiative or upon request of a
party for good cause shown, may re-open the hearing at any time before the award is rendered. If reopening would prevent the issuance of the award within the mandatory time limit, the hearing may
not be re-opened unless the parties agree to extend the time limit. Good cause shown includes the
introduction of new evidence not available during the hearing, the admission of which will probably
affect the outcome of the case, and it is shown that reasonable grounds exist for its non-production
at the time of the hearing.127
VI.
RECORDING OF ARBITRATION PROCEEDINGS
1. RECORDING NOT NECESSARY.
The proceedings before a Voluntary Arbitrator need not be recorded. However, the Voluntary
Arbitrator, in consultation with the parties, should make a written summary of the proceedings, including
the substance of the evidence presented. Should any of the parties request for the taking of the record of
the proceedings and the testimonies of witnesses, such request should be arranged by the Voluntary
Arbitrator and payment of the cost thereof should be assumed by the requesting party or parties. 128
A formal written record of the hearings is not always necessary. In simple cases, the
Voluntary Arbitrator can take adequate notes by himself. On contract interpretation cases, there
being no disputed facts, the Voluntary Arbitrator’s notes and the parties’ exhibits and briefs ordinarily
make the transcript of the proceedings unnecessary.129
2. WHEN RECORDING BECOMES NECESSARY.
In complicated cases, however, stenographic records will prove to be very helpful, if not
indispensable. The transcript will aid the Voluntary Arbitrator in studying the case, the parties in
preparing their respective briefs, and the court in reviewing the case on appeal. The cost of the
transcript of stenographic notes is usually shared equally by the parties with each party paying for any
extra copies it orders.130
VII.
WITHDRAWAL OF CASE FROM ARBITRATION
Parties may withdraw a case through their mutual agreement. It is acceptable, however, for a
complainant to withdraw the case at any point prior to the arbitration hearing. But after the
commencement of the hearing, he may not be allowed to withdraw the case over the objection of the
other party, unless permitted by the Voluntary Arbitrator. The withdrawal of a case after the arbitration
hearing may only be done by mutual consent of the parties. 131
VIII.
ARBITRATION DECISIONS AND AWARDS
1. DECISIONS IN ARBITRATION CASES.
The final arbitral disposition of issue/s submitted to voluntary arbitration is the “decision” which
may take the form of a dismissal of a claim or grant of a specific remedy, either by way of prohibition
of the commission of particular acts or the specific performance of particular acts. 132 The decision or
award of Voluntary Arbitrators has the same legal effect as a judgment of a court. Such decision on
matters of fact and law is conclusive and all matters in the award are res judicata.133
2. VOLUNTARY ARBITRATOR MUST SIGN THE DECISION.
The award must be signed by the Voluntary Arbitrator. If rendered by an Arbitration Board, it
must be signed by all its members where a unanimous decision is required; otherwise, it must be signed
by at least a majority of its members unless the judgment permits the issuance of the award only by
the neutral one.134
3. FINALITY OF DECISION.
The decision, order, resolution or award of the Voluntary Arbitrator or panel of Voluntary
Arbitrators shall be final and executory after ten (10) calendar days from receipt of copies thereof by
the parties.135
4. BINDING EFFECT OF DECISION ON SIMILAR CASES INVOLVING THE SAME
PARTIES.
A Voluntary Arbitrator is neither legally nor morally bound by what another arbitrator has
ruled in a previous case. There is nothing in the Labor Code that says so. But where there is a
similarity of the parties, the contract and the issues, the present arbitrator would be well-advised to
take a long and careful look at the earlier decision. If the latter is sound, it would not hurt to follow it
as a precedent as otherwise, chaos and confusion would result from the conflicting rulings on the
same issue between the same parties and arising out of the same contract. 136
5. BINDING EFFECT OF DECISION ON PARTIES NOT IMPLEADED IN THE CASE.
In Temic Automotive Philippines, Inc. v. Temic Automotive Philippines, Inc. Employees
Union – FFW,137 petitioner, by practice established since 1998, contracts out some of the work in its
warehouse department, specifically those in the receiving and finished goods sections, to three
independent service providers or forwarders (forwarders) , namely: Diversified Cargo Services, Inc.
(Diversified) , Airfreight 2100 (Airfreight) and Kuehne & Nagel, Inc. (KNI) . The first issue submitted
by the parties in the voluntary arbitration proceedings before the Voluntary Arbitrator is “whether or not
the company validly contracted out or outsourced the services involving forwarding, packing, loading
and clerical activities related thereto.”However, the forwarders, with which the petitioner had written
contracts for these services, were never made parties (and could not have been parties to the voluntary
arbitration except with their consent) so that the various forwarders’ agreements could not have been
validly impugned through voluntary arbitration and declared invalid as against the forwarders. The
second submitted issue is “whether or not the functions of the forwarders’ employees are functions being
performed by regular rank-and-file employees covered by the bargaining unit.” While this submission
is couched in general terms, the issue as discussed by the parties is limited to the forwarders’ employees
undertaking services as clerks, material handlers, system encoders and general clerks, which functions
are allegedly the same functions undertaken by regular rank-and-file company employees covered by the
bargaining unit. Either way, however, the issue poses jurisdictional problems as the forwarders’
employees are not parties to the case and the union has no authority to speak for them. From this
perspective, the voluntary arbitration submission covers matters affecting third parties who are not
parties to the voluntary arbitration and over whom the Voluntary Arbitrator has no jurisdiction; thus, the
voluntary arbitration ruling cannot bind them. While they may voluntarily join the voluntary arbitration
process as parties, no such voluntary submission appears in the record and therefore one cannot be
presumed to exist. Thus, the voluntary arbitration process and ruling can only be recognized as valid
between its immediate parties as a case arising from their CBA. This limited scope, of course, poses no
problem as the forwarders and their employees are not indispensable parties and the case is not mooted
by their absence. The Supreme Court’s ruling will fully bind the immediate parties and shall fully apply
to, and clarify the terms of, their relationship, particularly the interpretation and enforcement of the CBA
provisions pertinent to the arbitrated issues.
6. DISSENTING OPINION, NOT BINDING ON PARTIES.
In the case of Coca-Cola Bottlers Philippines, Inc. Sales Force Union-PTGWO-BALAIS v.
Coca-Cola Bottlers Philippines, Inc.,138a decision was rendered by a 3-member panel of Voluntary
Arbitrators but one of its members dissented. A copy of his dissenting opinion, however, was not attached
to the main decision. According to petitioner, the said decision is incomplete and has been prematurely
issued. It thus asserted that the prescriptive period available to any of the parties to seek any legal remedy
or relief should be deemed suspended in the meantime. Petitioner then waited for the service to it of a
copy of the dissenting opinion and it was only after receiving it almost a month after it has received the
main decision that it filed its motion for reconsideration of the main decision. The Supreme Court held
that the motion for reconsideration was filed out of time and consequently, the main decision has already
become final and executory. It ratiocinated that since the decision of the panel of Voluntary Arbitrators
was in the form of a dismissal of petitioner’s complaint, it is but natural that said dismissal be contained
in the main decision and not in the dissenting opinion. A dissenting opinion is not binding on the parties
as it is a mere expression of the individual view of the dissenting member from the conclusion held by
the majority of the panel of Voluntary Arbitrators, following the ruling in Garcia v. Perez,139 as
reiterated in National Union of Workers in Hotels, Restaurants and Allied Industries v. NLRC. 140
7. MOTION FOR RECONSIDERATION, ALLOWED.
In the 2010 case of Teng v. Pahagac,141 the Supreme Court clarified that Article 262-A does
not prohibit the filing of a Motion for Reconsideration of a Voluntary Arbitrator’s decision. It noted the
amendment introduced by R.A. No. 6715142 in the provision of Article 262-A,143consisting in the deletion
of the word “unappealable” from Article 263 which originally provides that “xxx Voluntary arbitration
awards or decisionsshall be final, unappealable, and executory. ” Article 262-A, as now worded,
simply provides that the decision “xxx shall be final and executoryafter ten (10) calendar days from
receipt of the copy of the award or decision by the parties. ” The deliberate selection of the language in
the amendatory act differing from that of the original act indicates that the legislature intended a change
in the law, and the court should endeavor to give effect to such intent.
8. MODIFICATION OF DECISION OF VOLUNTARY ARBITRATOR.
The Voluntary Arbitrator cannot modify his award by motion or motu proprio as held in the
case of Consolidated Bank and Trust Company [Solidbank], Inc. v. Bureau of Labor
Relations.144 The arbitration law or jurisprudence on the matter is explicit in its stand against revocation
and amendment of the arbitration award once such has been made. The rationale behind this is that an
award should be regarded as the judgment of a court of last resort so that all reasonable presumption
should be ascertained in its favor.
But in the interest of justice and industrial peace, Voluntary Arbitrators may modify their
original awards or decisions but only to correct typographical or harmless errors that are patently obvious
on their face. They cannot introduce, however, a substantial amendment thereto in the guise of correcting
a harmless error or typographical error.145
In Abalos v. Philex Mining Corporation,146 the Voluntary Arbitrator was allowed to modify
his final and executory decision ordering the reinstatement of the petitioners in the light of certain
supervening events which justify the payment of separation pay in lieu thereof.
IX.
EXECUTION PROCEEDINGS
IN VOLUNTARY ARBITRATION CASES
1. DUTY OF VOLUNTARY ARBITRATOR TO FURNISH PARTIES AND COUNSELS WITH
COPIES OF DECISIONS, ORDERS OR AWARDS.
Upon the issuance by the Voluntary Arbitrator of a decision order or award, it shall be his duty
to separately furnish immediately the counsels of record and the parties with copies thereof. Failure to
comply with the duty prescribed herein shall subject such responsible officer to appropriate
administrative sanctions.147
2. VOLUNTARY COMPLIANCE WITH ARBITRAL DECISIONS.
Both parties to a voluntary arbitration proceeding are required to comply voluntarily and
faithfully with the decision rendered therein.148 Such compliance must be made without delay. After all,
the parties are presumed to have freely chosen arbitration as the mode of settlement for that particular
dispute. Pursuant thereto, they have chosen a mutually acceptable arbitrator who shall hear and decide
their case and they have mutually agreed to be bound by said arbitrator’s decision. 149
3. LEGAL BASES FOR ISSUANCE OF WRIT OF EXECUTION IN CASE OF NONCOMPLIANCE WITH DECISION BY EITHER OR BOTH PARTIES.
In instances of non-compliance by either or both parties with the decision of Voluntary
Arbitrator or panel of Voluntary Arbitrators, execution should be issued, as a matter of course, upon a
decision that finally disposes of the action or proceeding.150 The following provisions of the Labor Code
may be cited as basis for the issuance of the writ of execution to enforce it:
(1) Article 224;151 and
(2) Article 262-A.152
4. PROCEDURAL RULES IN THE ENFORCEMENT OF WRIT OF EXECUTION.
In the enforcement of a writ of execution, the Sheriff or other authorized officer should be
guided by the Procedural Guidelines in the Execution of Voluntary Arbitration
Awards/Decisions. 153 These Guidelines should be followed in the execution of the awards or decision of
Voluntary Arbitrators or panel of Voluntary Arbitrators. Other rules that may be pertinently observed
and followed are the following:
(1) 2012 NLRC Sheriffs’ Manual on Execution of Judgment;154
(2) Memorandum of Agreement between the NLRC and the NCMB dated July 26, 1996;155 and
(3) Revised Rules of Court, as amended, in the absence of applicable rules.156
5. EXECUTION MOTU PROPRIO OR UPON MERE MOTION WITHIN FIVE (5) YEARS
FROM FINALITY OF DECISION.
The Voluntary Arbitrator or panel of Voluntary Arbitrators may, motu proprio or on motion of
any interested party, issue a writ of execution on a judgment within five (5) years from the date it
becomes final and executory.157
6. WHEN LABOR ARBITER MAY ISSUE THE WRIT OF EXECUTION.
In case the Voluntary Arbitrator or panel of Voluntary Arbitrators who rendered and issued the
decision, order or award is, for any reason, absent or incapacitated, the Labor Arbiter in the region where
the movant resides, may issue the writ of execution.158 But unlike the Voluntary Arbitrator or panel of
Voluntary Arbitrators who issued the decision, order or award, the Labor Arbiter cannot issue such
writ motu proprio but only upon motion of any interested party. 159
Moreover, while Article 262-A specifically mentions the Labor Arbiter “in the region where
the movant resides,” a variance, however, is noted in the NCMB Revised Procedural Guidelines in the
Conduct of Voluntary Arbitration Proceedings,160 where it is provided that the motion for the issuance
of the writ of execution “should be filed with the Labor Arbiter in the region having jurisdiction over
the workplace. ” This discrepancy may present a serious jurisdictional question since the “region where
the movant resides” may not necessarily be the same region where the workplace is located. Based on
legal hermeneutics, the provision of the law should prevail over that of the implementing procedural
rules; hence, the movant may file such motion in the region where he resides.
7. PERSONS WHO MAY ENFORCE THE WRIT OF EXECUTION.
Any of the following persons may be required to enforce the writ of execution:
(1) The Sheriff of the Commission (NLRC) ;161
(2) A duly deputized officer;162
(3) A Special Sheriff;163
(4) The Sheriff of the regular courts;164 or
(5) Any public official whom the parties may designate in the submission agreement to execute
the final decision, order or award.165
8. ENFORCEMENT OF WRIT OF EXECUTION THROUGH THE SHERIFFS OF THE NLRC.
The Memorandum of Agreement between the NLRC and the NCMB dated July 26, 1996166 sets
forth the procedure to be followed in the event the enforcement of the writ of execution issued by the
Voluntary Arbitrator or panel of Voluntary Arbitrators who rendered the decision, order or award will
be enforced through the Sheriffs of the Commission (NLRC) .
9. MOTION FOR CONTEMPT AND IMPOSITION OF FINES AND PENALTIES.
The filing of a motion for the issuance of a writ of execution is without prejudice to any other
action which the aggrieved party may take against the non-complying party such as a motion for
contempt or imposition of fines and penalties.167 Under Article 224(b) of the Labor Code, the amount of
such administrative fines has been fixed, that is, not less than P500.00 nor more than P10,000.00.168
10. EFFECT OF FILING OF PETITION FOR CERTIORARI ON EXECUTION PROCESS.
The filing of a petition for certiorari with the Court of Appeals or the Supreme Court does not
stay the execution of the assailed decision of a Voluntary Arbitrator or panel of Voluntary Arbitrators,
unless a temporary restraining order or injunction is issued by the Court of Appeals or the Supreme Court
pending resolution of such petition.169
(c)
REMEDIES
1. RELIEFS AND REMEDIES THAT MAY BE GRANTED BY VOLUNTARY ARBITRATORS.
Besides the procedural remedies discussed above, the Voluntary Arbitrator or panel of
Voluntary Arbitrators may grant the same reliefs and remedies granted by Labor Arbiters under
Article 279 of the Labor Code, such as:
(1)
In illegal dismissal cases:
(a) Actual reinstatement;
(b) Separation pay in lieu of reinstatement, in case reinstatement becomes impossible,
non-feasible or impractical;
(c)
Full backwages;
(d) Moral and exemplary damages; and
(e)
Attorney’s fees.
(2) Monetary awards in monetary claims cases in which case, the decision should specify
the amount granted and the formula used in the computation thereof. 170
Monetary awards may be granted under the following cases falling under their original
and exclusive jurisdiction:
(a) Unresolved grievances arising from the interpretation or implementation of the CBA.171
(b) Unresolved grievances arising from the interpretation or enforcement of company
personnel policies.172
(c) Unresolved grievances arising from the interpretation and implementation of the
Productivity Incentive Programs under R.A. No. 6971.173
(d) Violations of the CBA which are not gross in character. 174
(e) Wage distortion issues arising from the application of any wage orders in organized
establishments.175
(f) Collective bargaining deadlocks.176
(3) In ULP cases: 177
(a) If illegal dismissal is involved, the remedies available to an illegally dismissed
employee as described above may be awarded.
(b)
If a strike or lockout is involved, the Voluntary Arbitrator may declare the
strike/lockout illegal, in which case, he may award the reliefs and remedies provided
under the law and jurisprudence.
(4) In national interest cases submitted for voluntary arbitration: 178
(a) Since a strike or lockout is involved in these kinds of cases, the same reliefs and
remedies provided by law and jurisprudence thereon may be awarded.
2. SETTLEMENT OF ISSUES DURING PENDENCY OF ARBITRATION PROCEEDINGS.
In the event that the parties finally settle their dispute during the pendency of the arbitration
proceedings, the terms of the settlement should be reduced in writing and should be adopted as the
decision of the arbitrator.179
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Chapter Eight
PROCEDURE AND JURISDICTION
TOPICS PER SYLLABUS
H. Court of Appeals
1. Rule 65, Rules of Court
H.
COURT OF APPEALS
1.
RULE 65, RULES OF COURT
1. RULE 65 PETITION FOR CERTIORARI, THE ONLY MODE OF ELEVATING A LABOR
CASE TO THE COURT OF APPEALS.
The only mode by which a labor case decided by any of the following labor authorities/tribunals
may reach the Court of Appeals is through aRule 65 petition for certiorari.
(a)
the DOLE Secretary;
(b)
the Commission (NLRC) ; and
(c)
the Director of the Bureau of Labor Relations (BLR) in cases decided by him in
his appellate jurisdiction
(as
distinguished
from
those
he
decides
in
his original jurisdiction which are appealable to the DOLE Secretary) .
The remedy of ordinary appeal to the Court of Appeals is not available from their decisions,
orders or awards. The reason for this rule is that their decisions, orders or awards are final and executory
and therefore inappealable.
2. THE ONLY EXCEPTION.
The only exception to the foregoing rule is in the case of decisions, orders or awards issued by
the Voluntary Arbitrator or panel of Voluntary Arbitrators which may be elevated to the Court of Appeals
by way of an ordinary appeal under a Rule 43 petition for review.1
It must be noted that unlike in the syllabus for the 2011 and 2012 bar exams, Rule 43 is no
longer included in the syllabus for the 2013 and 2014 bar exams.
3. DIRECT RESORT TO THE SUPREME COURT NO LONGER ALLOWED.
Previous to the ruling in St. Martin Funeral Home v. NLRC,2 a labor case is allowed to be
elevated directly to the Supreme Court, without passing through the Court of Appeals, by way of Rule
65 petition for certiorari. With the advent of the St. Martin Funeral doctrine, all labor cases should first
pass through the Court of Appeals by way of a Rule 65 petition for certiorari before they can reach the
Supreme Court through a Rule 45 petition for review on certiorari.
4. RULE 65 CERTIORARI PETITION, AN INDEPENDENT SPECIAL CIVIL ACTION.
The only grounds that would justify the elevation of labor cases to the Court of Appeals are
when the same were rendered (1) without or in excess of jurisdiction, or (2) with grave abuse of
discretion amounting to lack or excess of jurisdiction.
Section 1 of Rule 65 states as follows:
“Section 1. Petition for certiorari. – When any tribunal, board, or officer exercising
judicial functions, has acted without or in excess of its or his jurisdiction, or with grave
abuse of discretion amounting to lack or excess of jurisdiction, and there is no
appeal, or any plain, speedy, and adequate remedy in the ordinary course of law, a
person aggrieved thereby may file a verified petition in the proper court, alleging the facts
with certainty and praying that judgment be rendered annulling or modifying the proceedings
of such tribunal, board or officer, and granting such incidental reliefs as law and justice may
require.
“The petition shall be accompanied by a certified true copy of the judgment, order or
resolution subject thereof, copies of all pleadings and documents relevant and pertinent
thereto, and a sworn certification of non-forum shopping as provided in the third paragraph of
Section 3, Rule 46. ”
The phrase “grave abuse of discretion amounting to lack or excess of jurisdiction” has been
defined as the capricious and whimsical exercise of judgment amounting to or equivalent to lack of
jurisdiction.3 There is grave abuse of discretion when the power is exercised in an arbitrary or despotic
manner by reason of “passion or personal hostility, and must be so patent and so gross as to amount
to an evasion of a positive duty or to a virtual refusal to perform the duty enjoined or to act at all in
contemplation of law.” 4
The jurisdiction of the Court of Appeals to review a decision of the labor tribunal in a petition
for certiorari does not include the correctness of its evaluation of the evidence or of its factual
findings which are generally accorded not only respect but also finality, but is confined to issues of
jurisdiction or grave abuse of discretion.5
5. RULE ON PERIOD.
a. Period within which to file certiorari petition is sixty (60) days from notice of judgment,
order or resolution.6
b. In case a Motion for Reconsideration or Motion for New Trial is filed, regardless
of whether such motion is required or not, the 60-day period is reckoned and computed from notice
of the denial of said motion.7
c. The 60-day period is reckoned from receipt of the decision by counsel or
representative of record, not by litigant-party.8
d. Rule on extension of the 60-day period. - In Labao v. Flores,9 some of the exceptions to
the strict application of the 60-day period rule were laid down, thus: (1) most persuasive and weighty
reasons; (2) to relieve a litigant from an injustice not commensurate with his failure to comply with the
prescribed procedure; (3) good faith of the defaulting party by immediately paying within a reasonable
time from the time of the default; (4) the existence of special or compelling circumstances; (5) the merits
of the case; (6) a cause not entirely attributable to the fault or negligence of the party favored by the
suspension of the rules; (7) a lack of any showing that the review sought is merely frivolous and dilatory;
(8) the other party will not be unjustly prejudiced thereby; (9) fraud, accident, mistake or excusable
negligence without appellant's fault; (10) peculiar legal and equitable circumstances attendant to each
case; (11) in the name of substantial justice and fair play; (12) importance of the issues involved; and
(13) exercise of sound discretion by the judge guided by all the attendant circumstances. 10 Thus, there
should be an effort on the part of the party invoking liberality to advance a reasonable or meritorious
explanation for his/her failure to comply with the rules.11
But the 2014 case of Thenamaris Philippines, Inc. v. CA,12 clarified this leniency in the
application of the rules. Presented as the principal issue here is whether the CA has committed grave
abuse of discretion amounting to lack or excess of jurisdiction when it allowed the extension of the 60day period when the motion to extend was filed outside of said period and the petition was ultimately
filed 15 days late. It declared that a petition for certiorari must be filed strictly within 60 days from notice
of judgment or from the order denying a motion for reconsideration. 13
In this case of Thenamaris, counting 60 days from her counsel’s receipt of the June 29, 2009
NLRC Resolution on July 8, 2009, private respondent had until September 7, 2009 to file her petition or
a motion for extension, as September 6, 2009, the last day for filing such pleading, fell on a Sunday.
However, the motion was filed only on September 8, 2009. It is a fundamental rule of remedial law that
a motion for extension of time must be filed before the expiration of the period sought to be extended;
otherwise, the same is of no effect since there would no longer be any period to extend, and the assailed
judgment or order will have become final and executory. 14 Additionally, as cited earlier in Labao, there
should be an effort on the part of the litigant invoking liberality to satisfactorily explain why he or she
was unable to abide by the rules. Here, the reason offered for availing of the motion for extension is the
heavy workload of private respondent’s counsel, which is hardly a compelling or meritorious reason as
enunciated in Labao.Time and again, it has been held that the excuse of “[h]eavy workload is relative
and often self-serving. Standing alone, it is not a sufficient reason to deviate from the 60-day
rule.” 15 Thus, private respondent’s motion for extension should have been denied outright.
But in the 2013 case of Castells v. Saudi Arabian Airlines,16 the Supreme Court, based
on Labao, affirmed the exercise of discretion by the Court of Appeals when it granted the 15-day
extension requested by petitioners.
6. RULE ON MATERIAL PORTIONS OF THE RECORD.
According to The Heritage Hotel Manila v. Pinag-isang Galing at Lakas ng mga
Manggagawa sa Heritage Manila (PIGLAS-HERITAGE),17 the Court of Appeals is correct to
dismiss a Rule 65 petition for certiorari for failure to attach material portions of the record. However, the
CA should bend back a little when the petitioner subsequently attaches the missing materials to its motion
for reconsideration. As a general rule, petitions for certiorari that lack copies of essential pleadings and
portions of the record may be dismissed but this rule has not been regarded as absolute. The omission
may be cured.18
The CA has three (3) courses of action when the annexes to the petition are insufficient. It may
(1) dismiss the petition,19 (2) require the submission of the relevant documents, or (3) order the filing of
an amended petition with the required pleadings or documents. A petition lacking in essential pleadings
or portions of the record may still be given due course, or reinstated if earlier dismissed, upon subsequent
submission of the necessary documents or to serve the higher interest of justice. 20
7. RULE ON VERIFICATION AND CERTIFICATE OF NON-FORUM SHOPPING.
a. Rule if co-parties are being sued in their individual capacities. - In Petron Corporation
and Peter C. Maligro v. NLRC,21 it was pointed out that the reliance of the Court of Appeals on the
ruling in Loquias v. Office of the Ombudsman, 22 when it dismissed the petition is misplaced because,
unlike the instant case, the co-parties therein are being sued in their individual capacities. 23 Thus, the
certification on non-forum shopping signed by only one of two or more petitioners is defective, unless
he was duly authorized by his co-petitioners.
b. In case petition is filed by a corporate entity, a corporate officer who is a co-petitioner
therein need not co-sign the Verification and Certification on Non-Forum Shopping. - In the same
case of Petron, the Court of Appeals dismissed the petition for certiorari thereat filed by the herein
petitioners on the ground that the Verification and Certification on Non-Forum Shopping was defective
because co-petitioner Peter C. Maligro was not a signatory thereto. Maligro was being impleaded in the
case as the former Visayas Operations Assistant Manager of Petron's Visayas-Mindanao District Office
at Lahug, Cebu City. The Supreme Court, however, ruled that considering that Maligro derives his
standing or personality in the case from Petron, the certification on non-forum shopping executed and
signed only by the corporation benefited Maligro such that the attachment of said certification to the
certiorari petition should be deemed substantial compliance with the rule on certification on non-forum
shopping.
The said ruling in Petron is in accord with the earlier judgment in the case of Micro Sales
Operation Network. 24 In the instant case, the petitioners are the company and its operations manager,
Willy Bendol. The latter was impleaded simply because he was a co-respondent in the illegal dismissal
complaint. He has no interest in this case separate and distinct from the company, which was the direct
employer of private respondents. Any award of reinstatement, backwages, and attorney's fees in favor of
private respondents will be enforced against the company as the real party in interest in an illegal
dismissal case. Petitioner Bendol is clearly a mere nominal party in the case. His failure to sign the
verification and certification on non-forum shopping is not a ground for the dismissal of the petition. The
appellate court erred in dismissing outright petitioners' special civil action for certiorari solely on that
ground.
c. In a certiorari petition involving a corporation, the Secretary’s Certificate authorizing a
representative or agent to sign the verification and certification of non-forum shopping is necessary.
- As held in University of the East v. Pepanio and Bueno,25 as a general rule, the Board of Directors or
Board of Trustees of a corporation must authorize the person who signs the verification and
certification against non-forum shopping of its petition. But the Court has held in Cagayan Valley Drug
Corporation v. Commissioner of Internal Revenue, 26 that such authorization is not necessary when it
is self-evident that the signatory is in a position to verify the truthfulness and correctness of the
allegations in the petition. Here the verification and certification were signed by petitioner Dean
Eleanor Javier who, based on the given facts of the case, was “in a position to verify the truthfulness
and correctness of the allegations in the petition.”
8. NO BOND REQUIRED IN RULE 65 CERTIORARI PETITION.
The 2013 case of Sang-an v. Equator Knights Detective and Security Agency,
Inc.,27 instructs that the requirement of a cash or surety bond as provided under Article 223 of the Labor
Code only applies to appeals from the orders of the Labor Arbiter to the NLRC. It does not apply to
special civil actions such as a petition for certiorari under Rule 65 of the Rules of Court. In fact, nowhere
under Rule65 does it state that a bond is required for the filing of the petition.
9. FILING OF MOTION FOR RECONSIDERATION OF THE DECISION OF THE DOLE
SECRETARY, THE COMMISSION (NLRC) OR THE BLR DIRECTOR, A PRE-REQUISITE
TO FILING OF RULE 65 PETITION FOR CERTIORARI.
The rule on the filing of a Motion for Reconsideration of the decision of the DOLE
Secretary,28 the NLRC29 and the BLR Director30 ismandatory and jurisdictional. Failure to comply
therewith would result in the dismissal of the Rule 65 certiorari petition. Jurisprudence abounds
enunciating the rule that a motion for reconsideration is a pre-requisite for the filing of a special civil
action for certiorari.31
The reason for this rule is that in labor cases, a motion for reconsideration is the plain and
adequate remedy from an adverse decision of the DOLE Secretary, the NLRC and the BLR
Director. It has been long settled that the filing of a motion for reconsideration is a condition sine qua
non to the institution of a special civil action for certiorari under Rule 65 of the Rules of Court, subject
to well-recognized exceptions (See below for the enumeration of these exceptions) . The law intends to afford the
tribunal, board or office, an opportunity to rectify the errors and mistakes it may have lapsed into before
resort to the courts of justice can be had. Certiorari cannot be resorted to as a shield from the adverse
consequences of a party’s own omission to file the required motion for reconsideration. 32
It is a basic tenet in law that when an administrative remedy is provided by law, relief must be
sought by first exhausting such remedy before resort to judicial intervention may be had. Failure to
exhaust administrative remedies is fatal.33
 THE PHILTRANCO DOCTRINE: a motion for reconsideration should be filed even
though it is not required or even prohibited by the concerned government office. This was
the rule enunciated in the 2014 case of Philtranco Service Enterprises, Inc. v. Philtranco
Workers Union-Association of Genuine Labor Organizations (PWU-AGLO) . 34 Thus,
while a government office35 may prohibit altogether the filing of a motion for reconsideration
with respect to its decisions or orders, the fact remains thatcertiorari inherently requires the
filing of a motion for reconsideration which is the tangible representation of the opportunity
given to the office to correct itself. Unless it is filed, there could be no occasion to rectify.
Worse, the remedy of certiorari would be unavailing. Simply put, regardless of the proscription
against the filing of a motion for reconsideration, the same may be filed on the assumption that
rectification of the decision or order must be obtained and before a petition for certiorari may
be instituted.
• EXCEPTIONS TO THE RULE ON EXHAUSTION OF ADMINISTRATIVE
REMEDIES (FILING OF MOTION FOR RECONSIDERATION) :
It bears to stress that the principle of exhaustion of administrative remedies when a motion for
reconsideration is required, is not an iron-clad rule. This principle may be disregarded under the
following circumstances:
(1) When there is a violation of due process;
(2) When the issue involved is purely a legal question;
(3) When the administrative action is patently illegal amounting to lack or excess of jurisdiction;
(4) When there is estoppel on the part of the administrative agency concerned;
(5) When there is irreparable injury;
(6) When the respondent is a department secretary whose acts as an alter ego of the President
bear the implied and assumed approval of the latter;
(7) When to require exhaustion of administrative remedies would be unreasonable;
(8) When it would amount to a nullification of a claim;
(9) When the subject matter is a private land in land case proceedings;
(10) When the rule does not provide a plain, speedy and adequate remedy;
(11) When there are circumstances indicating the urgency of judicial intervention;
(12) When no administrative review is provided by law;
(13) Where the rule of qualified political agency applies; and
(14) When the issue of non-exhaustion of administrative remedies has been rendered moot.
10. CERTIORARI PETITION MAY BE FILED EVEN IF THE DECISION OF THE DOLE
SECRETARY, THE COMMISSION (NLRC) , OR THE BLR DIRECTOR HAS ALREADY
BECOME FINAL AND EXECUTORY.
This rule applies to the decisions rendered by the DOLE Secretary, 36 the NLRC37 or the BLR
Director38 (in cases which he decided in his appellate jurisdiction) .
If the CA grants the petition and nullifies their decisions on the ground of grave abuse of
discretion amounting to excess or lack of jurisdiction, such decisions are, in contemplation of law, null
and void ab initio; hence, they never became final and executory.39
JUDICIAL REVIEW OF DECISIONS
OF VOLUNTARY ARBITRATORS40
1. DECISIONS, FINAL AND EXECUTORY.
As a general rule, decisions or awards of Voluntary Arbitrators are final, inappealable and
executory after ten (10) calendar days from receipt of a copy thereof by the parties. 41
2. JUDICIAL REVIEW.
It is well-settled a rule, however, that the findings of fact and law made by the Voluntary
Arbitrator may be reviewed by the court.42 Judicial review is, however, justified in certain cases.43 The
Voluntary Arbitrator’s decisions or awards may thus be contested on the following grounds:
(1) Lack or want of jurisdiction;
(2) Grave abuse of discretion;
(3) Violation of due process;
(4) Denial of substantive justice; or
(5) Erroneous interpretation of the law.44
The Supreme Court, in many cases, has taken cognizance of petitions
questioning “final” decisions of certain administrative agencies based on any of the foregoing grounds.45
3. ORDINARY APPEAL UNDER RULE 43 OF THE 1997 RULES OF CIVIL PROCEDURE –
VOLUNTARY ARBITRATORS ARE OF THE SAME LEVEL AS RTC JUDGES.
Being a quasi-judicial agency, the decisions and awards of a Voluntary Arbitrator
are appealable by way of a petition for review to the Court of Appeals under Revised Administrative
Circular No. 1-9546 which provides for a uniform procedure for appellate review of all adjudications of
quasi-judicial entities and which is now embodied in Section 1, Rule 43 of the 1997 Rules of Civil
Procedure.
The ruling in Luzon Development Bank v. v. Association of Luzon Development Bank
Employees,47 in effect, equates the decisions or awards of the Voluntary Arbitrator to those of the
Regional Trial Court (RTC) . Hence, in a petition for certiorari from the awards or decisions of the
Voluntary Arbitrator, the Court of Appeals has concurrent jurisdiction with the Supreme Court. 48
In Alcantara, Jr. v. CA,49 it was held that Luzon Development Bank is still a good law. The
introduction of the provisions of Section 2, Rule 42of the Revised Rules of Civil Procedure did not alter
the ruling in said case. The reason is that Section 2, Rule 42 is nothing more than a reiteration of the
exception to the exclusive appellate jurisdiction of the Court of Appeals, as provided in Section 9,
Batas Pambansa Blg. 129, as amended.50
4. PERIOD OF APPEAL – 15 DAYS.
Rule 43 of the Rules of Court51 requires that the petition for review to be taken to the Court of
Appeals should be filed within fifteen (15) days from notice of the award, judgment or final order or
resolution of the Voluntary Arbitrator. Thus, when petitioner in Mora v. Avesco Marketing
Corporation,52 filed before the appellate court a petition for certiorari forty-nine (49) days after receipt
of the decision of the Voluntary Arbitrator, the same was already out of time since the 15-day period to
file an appeal had already expired.
5. PAYMENT OF APPEAL DOCKET FEE WITHIN PRESCRIBED PERIOD, BOTH
MANDATORY AND JURISDICTIONAL.
Upon the filing of the petition within the 15-day reglementary period earlier mentioned, it is
required under Section 5 of Rule 43 of the Rules of Court that the petitioner should pay to the CA clerk
of court the docketing and other lawful fees. Non-compliance with this procedural requirement is
considered a sufficient ground for the petition’s dismissal. Thus, payment in full of docket fees within
the prescribed period is not only mandatory, but also jurisdictional. It is an essential requirement, without
which, the decision appealed from would become final and executory as if no appeal has been filed. 53
------------oOo------------
Chapter Eight
PROCEDURE AND JURISDICTION
TOPICS PER SYLLABUS
I. Supreme Court
1. Rule 45, Rules of Court
I.
SUPREME COURT
1.
RULE 45, RULES OF COURT
1. RULE 45 PETITION FOR REVIEW ON CERTIORARI, THE ONLY MODE BY WHICH A LABOR CASE MAY
REACH THE SUPREME COURT.
Since the Court of Appeals has jurisdiction over the petition for certiorari under Rule 65 that
may be filed before it from the decisions of the NLRC or the DOLE Secretary or the BLR Director (in
cases decided by him in his appellate jurisdiction) , any alleged errors committed by it in the exercise of
its jurisdiction would be errors of judgment which are reviewable by means of a timely appeal to the
Supreme Court and not by a special civil action of certiorari.
Such appeal from a final disposition of the Court of Appeals is a petition for review
on certiorari under Rule 45, and not a special civil action ofcertiorari under Rule 65 of the Rules of
Court. Rule 45 is clear that the decisions, final orders or resolutions of the Court of Appeals in any
case, i.e. , regardless of the nature of the action or proceeding involved, may be appealed to the Supreme
Court by filing a petition for review, which would be but a continuation of the appellate process over the
original case. Under Rule 45, the reglementary period to appeal is fifteen (15) days from notice of
judgment or denial of the motion for reconsideration. 1
If the aggrieved party fails to do so within the reglementary period and the decision accordingly
becomes final and executory, he cannot avail himself of the writ of certiorari, his predicament being the
effect of his deliberate inaction. A petition for certiorari under Rule 65 cannot be a substitute for a
lost appeal under Rule 45; hence, it should be dismissed.2
2. MAY RULE 65 CERTIORARI PETITION BE AVAILED OF FROM CA DECISION TO
THE SUPREME COURT?
This poser has been answered both in the affirmative and in the negative.
In answering this poser in the affirmative, it was held in Tomas Claudio Memorial College,
Inc. v. CA,3 that a Rule 65 certiorari petition may be filed if in issuing the assailed decision and
resolution, the CA acted with grave abuse of discretion, amounting to excess or lack of jurisdiction and
there is no plain, speedy and adequate remedy in the ordinary course of law. A remedy is considered
plain, speedy and adequate if it will promptly relieve the petitioner from the injurious effect of the
judgment and the acts of the lower court.4
The aggrieved party is proscribed from filing a petition for certiorari if appeal is available, for
the remedies of appeal and certiorari are mutually exclusive and not alternative or successive. The
aggrieved party is likewise barred from filing a petition for certiorari if the remedy of appeal is lost
through his negligence.5 A petition for certiorari is an original action and does not interrupt the course
of the principal case unless a temporary restraining order or a writ of preliminary injunction has been
issued against the public respondent from further proceeding. 6
In the 2011 case of in Cirtek Employees Labor Union-Federation of Free Workers v. Cirtek
Electronics, Inc.,7 it was conceded thatrespondent indeed availed of the wrong remedy of certiorari
under Rule 65. Due, however, to the nature of the case, involving workers' wages and benefits, and the
fact that whether the petition was filed under Rule 65 or appeal by certiorari under Rule 45, it was filed
within 15 days (the reglementary period under Rule 45) from petitioner's receipt of the resolution of the
Court of Appeals' Resolution denying its motion for reconsideration, the Court resolved to give it due
course. As Almelor v. RTC of Las Piñas,8 restates: “Generally, on appeal taken either to the
Supreme Court or the CA by the wrong or inappropriate mode shall be dismissed. This is to prevent
the party from benefiting from one's neglect and mistakes. However, like most rules, it carries certain
exceptions. After all, the ultimate purpose of all rules of procedures is to achieve substantial justice
as expeditiously as possible.”9
But in New Ever Marketing, Inc. v. CA,10 and in the earlier case of San Miguel Corporation
v. The Hon. CA,11 the Supreme Court answered the same poser in the negative because the Rule 65
petition was not proper since an appeal was not only available but also a speedy and adequate remedy.
Hence, for failure of petitioner to file a timely appeal, the questioned decision of the Court of Appeals
had already become final and executory. 12
It is thus clear, according to Tirazona v. CA,13 that in case what is filed is a petition under Rule
65 instead of Rule 45, before the Supreme Court may treat the petition erroneously filed under Rule 65
as having been filed under Rule 45, the same must comply with the reglementary period for filing an
appeal. This requirement is not only mandatory but also jurisdictional such that failure to do so renders
the assailed decision final andexecutory and deprives the Supreme Court of jurisdiction to alter the final
judgment, much less to entertain the appeal.
In the 2013 case of Malayang Manggagawa ng Stayfast Phils, Inc. v. NLRC,14 petitioner,
instead of filing a Rule 45 petition for review oncertiorari from the decision of the CA, it filed a Rule 65
petition for certiorari to the Supreme Court after 52 days from its receipt of the CA decision. Contrary
to petitioner’s claim that there was no appeal or any other plain, speedy and adequate remedy in the
ordinary course of law other than this petition for certiorari, the right recourse was to appeal to the Court
in the form of a Rule 45 petition for review on certiorari. For purposes of appeal, the decision of the CA
was a final judgment as it denied due course to, and dismissed, the petition. Thus, the decision disposed
of the petition of petitioner in a manner that left nothing more to be done by the CA in respect to the said
case. Thus, petitioner should have filed an appeal by petition for review on certiorari under Rule 45, not
a petition for certiorari under Rule 65, in this Court. Where the rules prescribe a particular remedy for
the vindication of rights, such remedy should be availed of.
3. A PARTY CANNOT FILE A PETITION BOTH UNDER RULE 65 AND RULE 45.
As a general rule, a party cannot file a petition both under Rules 45 and 65 of the Rules of
Court because said procedural rules pertain to different remedies and have distinct
applications.15 In Panganiban v. Tara Trading Shipmanagement, Inc.,16 petitioner denominated his
petition as one under Rule 45, but considering the grounds raised, he filed it as both a petition for
review under Rule 45 and a petition for certiorari under Rule 65 of the Rules of Court. The applicable
rule is Rule 45, which clearly provides that decisions, final orders or resolutions of the CA in any case,
regardless of the nature of the action or proceeding involved, may be appealed to the Supreme Court
through a petition for review. This remedy is a continuation of the appellate process over the original
case. Recourse under Rule 65 cannot be allowed either as an add-on or as a substitute for appeal. The
procedural infirmity notwithstanding, the Supreme Court treated this petition as one filed under Rule
45 only and considered the alleged grave abuse of discretion on the part of the CA as an allegation of
reversible error.17
4. RULE ON VERIFICATION AND CERTIFICATION OF NON-FORUM SHOPPING IN RULE 45 PETITION.
Under Rule 45 of the Rules of Court, verification and sworn certification against non-forum are
required. Relaxation of these rules is justified if there is subsequent and substantial compliance
therewith. In the 2012 case of Auza, Jr. v. MOL Philippines, Inc.,18 petitioners’ subsequent and
substantial compliance with the rules on verification and certification of non-forum shopping was
declared sufficient for the relaxation of technical rules. Respondents here assail the Supreme Court’s
authority to entertain the instant petition despite the defective verification and certification of non-forum
shopping attached to it. True, the verification and certification of non-forum shopping was executed and
signed solely by Auza without proof of any authority from his co-petitioners. Thence, in a Minute
Resolution dated February 26, 2007, the Court required petitioners to submit such proof of authority. In
compliance therewith, petitioners thereafter submitted a Verification and Certification of Non-Forum
Shopping this time executed and signed by Auza, Otarra and Jeanjaquet. Ample jurisprudence provides
that subsequent and substantial compliance may call for the relaxation of the rules. Indeed,
“imperfections of form and technicalities of procedure are to be disregarded, except where substantial
rights would otherwise be prejudiced. ” Due to petitioners’ subsequent and substantial compliance, the
rules should thus be liberally applied in order not to frustrate the ends of justice.
5. THE NEYPES DOCTRINE (FRESH PERIOD RULE) - FRESH PERIOD FROM DENIAL
OF MOTION FOR RECONSIDERATION.
In the 2013 case of Elizabeth Gagui v. Dejero,19 petitioner successively filed two Motions for
Reconsideration of the CA’s decision but both were denied. Petitioner elevated the case to the Supreme
Court under Rule 45. In their comment, respondents alleged that the instant petition had been filed 15
days after the prescriptive period of appeal under Section 2, Rule 45 of the Rules of Court. In her reply,
petitioner countered that she has a fresh period of 15 days from the date she received the Resolution of
the CA to file the instant Rule 45 petition. In affirming the contention of petitioner, the Supreme Court
cited the en banc ruling in the case of Neypes v. CA20 which standardized the appeal periods, thus:
“To standardize the appeal periods provided in the Rules and to afford litigants fair
opportunity to appeal their cases, the Court deems it practical to allow a fresh period of 15
days within which to file the notice of appeal in the Regional Trial Court, counted from receipt
of the order dismissing a motion for a new trial or motion for reconsideration.
“Henceforth, this ‘fresh period rule’ shall also apply to Rule 40 governing appeals from
the Municipal Trial Courts to the Regional Trial Courts; Rule 42 on petitions for review from
the Regional Trial Courts to the Court of Appeals; Rule 43 on appeals from quasi-judicial
agencies to the Court of Appeals and Rule 45 governing appeals by certiorari to the
Supreme Court. The new rule aims to regiment or make the appeal period uniform, to be
counted from receipt of the order denying the motion for new trial, motion for reconsideration
(whether full or partial) or any final order or resolution.”21
Consequently, since petitioner in Gagui received the CA Resolution denying her two Motions
for Reconsideration only on 16 March 2011, she had another 15 days within which to file her Petition,
or until 31 March 2011. This Petition, filed on 30 March 2011, fell within the prescribed 15-day period.
------------oOo------------
Chapter Eight
PROCEDURE AND JURISDICTION
TOPICS PER SYLLABUS
J. Prescription of actions
J.
PRESCRIPTION OF ACTIONS1
1. MONEY CLAIMS CASES.
a. Prescriptive period is three (3) years under Article 291 of the Labor Code. - The
prescriptive period of all money claims and benefits arising from employer-employee
relations is 3 years from the time the cause of action accrued; otherwise, they shall be forever
barred.2
b. All other money claims of workers prescribe in 3 years. - Article 291 contemplates all
money claims arising from employer-employee relationship, including:
1. Money claims arising from the CBA.3
2. Incremental proceeds from tuition increases.4
3. Money claims of Overseas Filipino Workers (OFWs). 5
Note must be made that in the 2010 case of Southeastern Shipping v. Navarra, Jr.,6 the 1-year
prescriptive period in Section 28 of POEA-SEC was declared null and void. The reason is that
Article 291 of the Labor Code is the law governing the prescription of money claims of seafarers, a class
of overseas contract workers. This law prevails over said Section 28.
2. ILLEGAL DISMISSAL CASES.
a. Legal basis is not Article 291 of the Labor Code but Article 1146 of the Civil Code. - The
3-year prescriptive period in Article 291 solely applies to money claims but not to illegal
dismissal cases which are not in the nature of money claims. The prescriptive period of illegal
dismissal cases is 4 years under Article 1146 of the Civil Code. 7
3. UNFAIR LABOR PRACTICE (ULP) CASES.
a. Prescriptive period of ULP cases is 1 year (Article 290, Labor Code) . - The prescriptive
period for all complaints involving unfair labor practices is one (1) year from the time the
acts complained of were committed; otherwise, they shall be forever barred.8
b. Pre-requisite for prosecution of criminal cases. - Before a criminal action for ULP may be
filed, it is a condition sine qua non that afinaljudgment finding that an unfair labor practice
act was committed by the respondent should first be secured or obtained in the labor case
initiated before the Labor Arbiter or the Voluntary Arbitrator, as the case may
be.9 Final judgment is one that finally disposes of the action or proceeding. For instance, if
the remedy of appeal is available but no appeal is made, then, the judgment is deemed final
and executory. If an appeal is made, then the final judgment rendered by the last tribunal,
say the Supreme Court, to which the case was elevated should be the reckoning factor.
c. Interruption of prescriptive period of offenses. - As far as ULP cases are concerned, the
running of the one (1) year prescriptive period is interrupted during the pendency of the
labor proceeding.10
d. Evidentiary value of the final judgment in the labor case. - In ULP cases, the final
judgment in the labor case cannot be presented as evidence of the facts proven therein or as
evidence of the guilt of the respondent therein. Its evidentiary or probative value is confined
merely in proving the fact of compliance with the condition sine qua non prescribed by
law, i.e., that a final judgment has been secured in the labor proceeding finding that an unfair
labor practice act was in fact committed by the respondent.11
4. OFFENSES PENALIZED UNDER THE LABOR CODE AND ITS IMPLEMENTING RULES
AND REGULATIONS (IRR) .
a. Prescriptive period is 3 years (Article 290, Labor Code). - The prescriptive period of all
criminal offenses penalized under the Labor Code and the Rules to Implement the Labor
Code is three (3) years from the time of commission thereof.
b. Consequence of non-compliance with prescriptive period under Article 290. - Failure to
initiate or file the criminal action or complaint within the prescriptive period shall forever bar
such action.
c. Illegal dismissal is not an “offense” under Article 290. - The act of the employer in
dismissing an employee without cause, although a violation of the Labor Code and its
implementing rules, does not amount to an “offense” as this term is understood and
contemplated under Article 290.12
5. ILLEGAL RECRUITMENT CASES.
a. Simple illegal recruitment cases. – The prescriptive period is five (5) years. 13
b. Illegal recruitment cases involving economic sabotage. – The prescriptive period
is twenty (20) years.14
6. ACTIONS INVOLVING UNION FUNDS.
A complaint or petition for audit or examination of funds and books of accounts prescribes
within three (3) years:
(a) from the date of submission of the annual financial report to the DOLE; or
(b) from the date the same should have been submitted as required by law, whichever comes
earlier.15
It should be noted, however, that this provision on the prescriptive period applies only to a
legitimate labor organization which has submitted the financial report required under the Labor Code. 16
7. CLAIMS FOR SSS BENEFITS.
a. Action against employer.
The right to institute the necessary action against the employer for non-remittance of
contributions may be commenced within twenty (20) years:
(1) from the time the delinquency is known; or
(2) from the time the assessment is made by the SSS; or
(3) from the time the benefit accrues, as the case may be. 17
b. Action for disability claims.
The prescriptive period in the filing of disability benefit claim is ten (10) years from the date
of occurrence of disability.
8. CLAIMS FOR GSIS BENEFITS.
Claims for benefits, except for life and retirement, prescribe after four (4) years from the date
of contingency.18
SOME PRINCIPLES ON PRESCRIPTION OF ACTION
1. ACCRUAL OF CAUSE OF ACTION.
a. Cause of action, elements.
The prescriptive period provided under the law commences to run only upon the accrual of
the cause of action. The three (3) elements of a cause of action are as follows:
1. A right in favor of the plaintiff by whatever means and under whatever law it arises or is
created;
2. An obligation on the part of the named defendant to respect or not to violate such right; and
3. An act or omission on the part of such defendant violative of the right of the plaintiff or
constituting a breach of the obligation of the defendant to the plaintiff.19
b. When a cause of action accrues.
An action does not accrue until the party obligated to do or perform an act, refuses, expressly
or impliedly, to comply with the duty. Generally, without a demand for compliance and the consequent
refusal by the party obligated to comply therewith, the cause of action cannot be deemed to have accrued.
2. ACCRUAL OF CAUSE OF ACTION IN MONEY CLAIMS CASES.
a. Meaning of “accrued” cause of action in money claims cases under Article 291;
General rule.
The general rule is that all money claims arising from an employer-employee relationship shall
be filed within three (3) years from the time the cause of action accrued; otherwise, they shall be forever
barred. This means that if it is established that the benefits being claimed have been withheld from the
employee for a period longer than three (3) years, the amount pertaining to the period beyond the threeyear prescriptive period is barred by prescription. The amount that can only be demanded by the
aggrieved employee shall be limited to the amount of the benefits withheld within three (3) years before
the filing of the complaint.20
b. Exception.
A cause of action for money claims accrues upon the categorical denial of a claim. In other
words, to properly construe Article 291, it is essential to ascertain the time when the third (3 ) element
of a cause of action transpired. Stated differently, in the computation of the 3-year prescriptive period, a
determination must be made as to the period when the act constituting a violation of the workers’ right
to the benefits being claimed was committed. For if the cause of action accrued more than three (3)
years before the filing of the money claim, such cause of action has already prescribed in accordance
with Article 291.21
rd
Serrano v. CA.22 - It was declared here that the cause of action of petitioner has not yet
prescribed. The antecedent facts indicate that from 1974 to 1991, respondent Maersk-Filipinas Crewing,
Inc. , the local agent of respondent foreign corporation, A.P. Moller, deployed petitioner Serrano as a
seaman to Liberian, British and Danish ships. As petitioner was on board a ship most of the time,
respondent Maersk offered to send portions of petitioner’s salary to his family in the Philippines. The
amounts would be sent by money order. Petitioner agreed to such arrangement and from 1977 to 1978,
he instructed respondent Maersk to send money orders to his family. Respondent Maersk deducted the
amounts of these money orders totaling HK$4,600.00 and £1,050.00 Sterling Pounds from petitioner’s
salary. Respondent Maersk also deducted various amounts from his salary for Danish Social Security
System (SSS) , welfare contributions, ship club, SSS and Medicare.
It appears that petitioner’s family failed to receive the money orders petitioner sent through
respondent Maersk. Upon learning this in 1978, petitioner demanded that respondent Maersk pay him
the amounts the latter deducted from his salary. Respondent Maersk assured him that they would look
into the matter, then assigned him again to board one of its vessels. Whenever he returned to the
Philippines, petitioner would go to the office of respondent Maersk to follow up his money claims but
he would be told to return after several weeks as respondent Maersk needed time to verify its records
and to bring up the matter with its principal employer, respondent A.P. Moller. Meantime, respondent
Maersk would hire him again to board another one of its vessels for about a year. Finally, in October
1993, petitioner wrote to respondent Maersk demanding immediate payment to him of the total amount
of the money orders deducted from his salary from 1977 to 1978. On November 11, 1993, respondent
A.P. Moller replied to petitioner that it keeps accounting documents only for a certain number of years,
thus data on his money claims from 1977 to 1978 were no longer available. Likewise, it claimed that it
had no outstanding money orders. A.P. Moller declined petitioner’s demand for payment. In ruling that
the cause of action has not yet prescribed, the Supreme Court declared:
“The facts in the case at bar are similar to the leading case of Baliwag
Transit.23 Petitioner repeatedly demanded payment from respondent Maersk but similar to the
actuations of Baliwag Transit in the above cited case, respondent Maersk warded off these
demands by saying that it would look into the matter until years passed by. In October 1993,
Serrano finally demanded in writing payment of the unsent money orders. Then and only then
was the claim categorically denied by respondent A.P. Moller in its letter dated November 22,
1993. Following the Baliwag Transit ruling, petitioner’s cause of action accrued only upon
respondent A.P. Moller’s definite denial of his claim in November 1993. Having filed his action
five (5) months thereafter or in April 1994, it was held that it was filed within the three-year (3)
prescriptive period provided in Article 291 of the Labor Code.”
Philippine National Construction Corporation [PNCC] v. NLRC.24 - The complainant was
not dismissed but merely asked to go on vacation in May, 1985. It was only on August 16, 1989 that he
was informed of the termination of his services. Hence, it was held that when he brought his complaint
in 1989, his cause of action was not yet barred by prescription. It was within the three-year prescriptive
period under Article 291 of the Labor Code.
Degamo v. Avantgarde Shipping Corp.25 - Petitioner OFW was repatriated to the Philippines
on March 4, 1995 due to an accident requiring surgery and hospitalization. Immediately upon his arrival,
petitioner reported to respondent Avantgarde’s office, but since it was a Saturday and there was no one
to assist him, he went to his relatives in Cebu and was operated at Metro Cebu Community
Hospital. Later, on December 24, 1997, petitioner asked Avantgarde to pay his sickness benefits. On
January 6, 1998, Avantgarde replied that it could no longer act on petitioner’s claim as he had deviated
from the legal procedure and, should he wish, he could personally follow-up with its foreign principal,
Johnson Management, Pte. , Ltd. On March 4, 1998 and May 5, 1998, petitioner wrote a letter to
Sembawang regarding his claim. Sembawang did not reply.
On March 2, 2001, petitioner lodged a complaint for payment of disability benefits and other
money claims against the respondents with the Labor Arbiter who dismissed the case on the ground of
prescription. On appeal, the NLRC likewise ruled that petitioner’s cause of action had prescribed as a
mere letter of demand would not toll the prescriptive period for filing the complaint. Petitioner’s motion
for reconsideration was denied.
In affirming the said ruling, the Supreme Court ruled that a cause of action accrues upon the
categorical denial of the claim. Consequently, petitioner’s cause of action accrued only on January 6,
1998, when Avantgarde denied his claim and so breached its obligation to petitioner. Petitioner could
not have a cause of action prior to this date because his earlier requests were warded off by indefinite
promises. Unfortunately, the complaint filed in this case on March 2, 2001 was already beyond the threeyear prescriptive period mandated by the Labor Code.
c. Different prescriptive rule for service incentive leave.
The Supreme Court clarified in Auto Bus Transport System, Inc. v. Bautista,26 the correct
reckoning of the prescriptive period for service incentive leave, considering that “the service incentive
leave is a curious animal in relation to other benefits granted by the law to every employee” because “in
the case of service incentive leave, the employee may choose to either use his leave credits or commute
them to their monetary equivalent if not exhausted at the end of the year. Furthermore, if the employee
entitled to service incentive leave does not use or commute the same, he is entitled upon his resignation
or separation from work to the commutation of his accrued service incentive leave.”
Applying Article 291 of the Labor Code as well as the three (3) elements of a cause of action
[supra], the Supreme Court ruled:
“Correspondingly, it can be conscientiously deduced that the cause of action of an
entitled employee to claim his service incentive leave pay accrues from the moment the
employer refuses to remunerate its monetary equivalent if the employee did not make use
of said leave credits but instead chose to avail of its commutation. Accordingly, if the
employee wishes to accumulate his leave credits and opts for its commutation upon his
resignation or separation from employment, his cause of action to claim the whole amount
of his accumulated service incentive leave shall arise when the employer fails to pay such
amount at the time of his resignation or separation from employment.
“Applying Article 291 of the Labor Code in light of this peculiarity of the service incentive
leave, we can conclude that the three (3) -year prescriptive period commences, not at the
end of the year when the employee becomes entitled to the commutation of his service
incentive leave, but from the time when the employer refuses to pay its monetary equivalent
after demand of commutation or upon termination of the employee’s services, as the case
may be.
XXX
“In the case at bar, respondent had not made use of his service incentive leave nor
demanded for its commutation until his employment was terminated by petitioner. Neither
did petitioner compensate his accumulated service incentive leave pay at the time of his
dismissal. It was only upon his filing of a complaint for illegal dismissal, one month from the
time of his dismissal, that respondent demanded from his former employer commutation of
his accumulated leave credits. His cause of action to claim the payment of his accumulated
service incentive leave thus accrued from the time when his employer dismissed him and
failed to pay his accumulated leave credits.
“Therefore, the prescriptive period with respect to his claim for service incentive leave
pay only commenced from the time the employer failed to compensate his accumulated
service incentive leave pay at the time of his dismissal. Since respondent had filed his
money claim after only one month from the time of his dismissal, necessarily, his money
claim was filed within the prescriptive period provided for by Article 291 of the Labor Code.” 27
Following the ruling in Auto Bus, it was held in Far East Agricultural Supply, Inc. v.
Lebatique,28 that Lebatique timely filed his claim for service incentive leave pay, considering that in this
situation, the prescriptive period commences at the time he was terminated. On the other hand, his claim
regarding non-payment of overtime pay since he was hired in March 1996 is a different matter. In the
case of overtime pay, he can only demand the overtime pay withheld for the period within three (3) years
preceding the filing of the complaint on March 20, 2000.
d. Filing of a case with grievance machinery tolls the running of the prescriptive period.
A monetary claim cannot be considered to have prescribed if within the 3-year period, it was
submitted to the grievance committee as provided under the CBA. 29
e. The 3-year prescriptive period in Article 291 is not applicable to execution of final
judgments which should be done within 5 years. This was declared in J. K. Mercado & Sons
Agricultural Enterprises, Inc. v. Hon. Sto. Tomas.30 While Article 291 of the Labor Code applies to
money claims in general and provides for a 3-year prescriptive period to file them, private respondentemployees’ money claims in this case had been reduced to a judgment, in the form of a Wage Order,
which has become final and executory. Therefore, the prescription applicable is not the general one that
applies to money claims, but the specific one applying to judgments. Thus, the right to enforce the
judgment, having been exercised within five (5) years, has not yet prescribed. Stated otherwise, a
claimant has three (3) years to press a money claim. Once judgment is rendered in her favor, she has five
(5) years to ask for execution of the judgment counted from its finality. This is consistent with the rule
on statutory construction that a general provision should yield to a specific one and with the mandate of
social justice that doubts should be resolved in favor of labor.
3. ACCRUAL OF CAUSE OF ACTION IN ILLEGAL DISMISSAL CASES.
It is settled that in illegal dismissal cases, the cause of action accrues from the time the
employment of the worker was unjustly terminated. Thus, as a general rule, the 4-year prescriptive period
shall be counted and computed from the date of the employee’s dismissal up to the date of the filing of
complaint for unlawful termination of employment. 31
Baliwag Transit, Inc. v. Ople.32 - A bus of petitioner Baliwag Transit driven by the respondent
driver figured in an accident with a train of the Philippine National Railways (PNR) on August 10, 1974.
This resulted to the death of eighteen (18) passengers and caused serious injuries to fifty-six (56) other
passengers. The bus itself also sustained extensive damage. The bus company instituted a complaint
against the PNR. The latter was held liable for its negligence in the decision rendered on April 6, 1977.
The respondent driver was absolved of any contributory negligence. However, the driver was also
prosecuted for multiple homicide and multiple serious physical injuries, but the case was provisionally
dismissed in March 1980 for failure of the prosecution witness to appear at the scheduled hearing. Soon
after the PNR decision was rendered, the driver renewed his license and sought reinstatement with
Baliwag Transit. He was advised to wait until his criminal case was terminated. He repeatedly requested
for reinstatement thereafter, but to no avail, even after termination of the criminal case against him.
Finally, on May 2, 1980, he demanded reinstatement in a letter signed by his counsel. On May 10, 1980,
petitioner Baliwag Transit replied that he could not be reinstated as his driver’s license had already been
revoked and his driving was “extremely dangerous to the riding public.” This prompted respondent
driver to file on July 29, 1980, a formal complaint with the Ministry of Labor and Employment for illegal
dismissal against Baliwag Transit praying for reinstatement with backwages and emergency cost-ofliving allowance. The complaint was dismissed by the Regional Director 33 on the ground of prescription
under Article 291 of the Labor Code. This was reversed by then Labor and Employment Minister Blas
F. Ople. On appeal to the Supreme Court, it was ruled that the action has not yet prescribed at the time
of the filing of the complaint, viz. :
“We hold that the private respondent’s right of action could not have accrued from the mere
fact of the occurrence of the mishap on August 10, 1974, as he was not considered automatically
dismissed on that date. At best, he was deemed suspended from his work, and not even by
positive act of the petitioner but as a result of the suspension of his driver’s license because of
the accident. There was no apparent disagreement then between (respondent driver) Hughes
and his employer. As the private respondent was the petitioner’s principal witness in its complaint
for damages against the Philippine National Railways, we may assume that Baliwag Transit and
Hughes were on the best of terms when the case was being tried. Hence, there existed no
justification at that time for the private respondent to demand reinstatement and no opportunity
warrant (sic) either for the petitioner to reject that demand.
“We agree with private respondent that May 10, 1980 is the date when his cause of action
accrued, for it was then that the petitioner denied his demand for reinstatement and so committed
that act or omission ‘constituting a breach of the obligation of the defendant to the plaintiff. ’ The
earlier requests by him having been warded off with indefinite promises, and the private
respondent not yet having decided to assert his right, his cause of action could not be said to
have then already accrued. The issues had not yet been joined, so to speak. This happened only
when the private respondent finally demanded reinstatement on May 2, 1980, and his demand
was categorically rejected by the petitioner on May 10, 1980.”
Victory Liner, Inc. v. Race.34 - The rule was reiterated here that the 4-year prescriptive period
shall commence to run only upon the accrual of the cause of action of the worker. In this case, the
respondent-employee was a bus driver who figured in an accident on the night of August 24, 1994. As a
consequence thereof, respondent suffered a fractured left leg and was rushed to a hospital where he was
operated on and confined from August 24, 1994 up to October 10, 1994. One (1) month after his release
from the said hospital, the respondent was confined again for further treatment of his fractured left leg at
another hospital. His confinement therein lasted a month. In January 1998, the respondent, still limping
heavily, went to the petitioner’s office to report for work. He was, however, informed by the petitioner
that he was considered resigned from his job. In holding that the cause of action of respondent has not
yet prescribed, the Supreme Court stated that the respondent must be considered as unjustly terminated
from work in January 1998 since this was the first time he was informed by the petitioner that he was
deemed resigned from his work. Thus, it was only at this time that the respondent’s cause of action
accrued. Consequently, the respondent’s filing of complaint for illegal dismissal on 1 September 1999
was well within the four-year prescriptive period.
4. INTERRUPTION OF RUNNING OF PRESCRIPTIVE PERIOD.
Like other causes of action, the prescriptive period for money claims is subject to interruption,
and in the absence of an equivalent Labor Code provision for determining whether the said period may
be interrupted, Article 1155 of the Civil Code may be applied.35 It provides:
“Article 1155. The prescription of actions is interrupted when they are filed before the
Court, when there is a written extrajudicial demand by the creditors, and when there is any
written acknowledgment of the debt by the debtor.”
Thus, the prescription of an action is interrupted by:
(a) the filing of an action;
(b) a written extrajudicial demand by the creditor; and
(c) a written acknowledgment of the debt by the debtor.
Intercontinental Broadcasting Corp. v. Panganiban.36 - In this case, while the filing earlier
by respondent of a civil case for non-payment of his unpaid commissions could have interrupted the
running of the 3-year prescriptive period, its consequent dismissal by the Court of Appeals due to lack
of jurisdiction effectively canceled the tolling of the prescriptive period within which to file his money
claim, leaving respondent in exactly the same position as though no civil case had been filed at all. The
running of the 3-year prescriptive period not having been interrupted by the filing of the civil case,
respondent’s cause of action had already prescribed on September 2, 1991, three (3) years after his
cessation of employment on September 2, 1988. Consequently, when respondent filed his complaint
for illegal dismissal, separation pay, retirement benefits and damages in July 24, 1996, his claim clearly
had already been barred by prescription.
PLDT v. Pingol.37 - Respondent was dismissed by petitioner on January 1, 2000. Respondent
Pingol cited the same date of dismissal in his complaint before the Labor Arbiter. The Labor Arbiter
dismissed his complaint on the ground of prescription because at the time he filed it on March 29, 2004,
four (4) years and three (3) months had already elapsed. Respondent, however, claimed that between
2001 and 2003, he made follow-ups with PLDT management regarding his benefits. This, to his mind,
tolled the running of the prescriptive period. Citing the same Article 1155 and following the ruling
in Intercontinental Broadcasting [supra], the Supreme Court held that respondent’s cause of action had
already prescribedbecause he never made any writtenextrajudicial demand. Neither did petitioner make
any written acknowledgment of its alleged obligation. Thus, respondent’s claimed “follow-ups” could
not have validly tolled the running of the prescriptive period. More so when respondent never presented
any proof to substantiate his allegation of follow-ups.
5. PRINCIPLE OF PROMISSORY ESTOPPEL AS APPLIED TO LABOR CASES.
a. Principle of promissory estoppel, an exception to Article 291.
The principle of promissory estoppel is a recognized exception to the 3-year prescriptive period
enunciated in Article 291 of the Labor Code.38
Promissory estoppel may arise from the making of a promise, even though without
consideration, if it was intended that the promise should be relied upon, as in fact it was relied upon, and
if a refusal to enforce it would virtually sanction the perpetration of fraud or would result in other
injustice.39
b. Elements of promissory estoppel.
In order to make out a claim of promissory estoppel, a party bears the burden of establishing
the following elements:
(1) a promise was reasonably expected to induce action or forbearance;
(2) such promise did, in fact, induce such action or forbearance; and
(3) the party suffered detriment as a result.40
Accessories Specialist, Inc. v. Alabanza.41 - All the foregoing requisites of promissory
estoppel are present in this case. Respondent is the wife of Jones Alabanza, former Vice-President,
Manager and Director of petitioner (ASI) , who died without receiving his money claims consisting in
unpaid salaries, separation pay and 13 month pay. Jones rendered outstanding services for the petitioners
from 1975 to October 1997. On October 17, 1997, Jones was compelled by the owner of ASI, herein
petitioner Tadahiko Hashimoto, to file his involuntary resignation on the ground that ASI allegedly
suffered losses due to lack of market and incurred several debts caused by a slam in the market. At the
time of his resignation, Jones had unpaid salaries for eighteen (18) months from May 1995 to October
1997 equivalent to P396,000.00 and US$38,880.00. He was likewise not paid his separation pay
commensurate to his 21 years of service in the amount of P462,000.00 and US$45,360.00 and 13 month
pay amounting to P33,000.00. Jones demanded payment of his money claims upon resignation but ASI
informed him that it would just settle first the money claims of the rank-and-file employees, and his
claims will be paid thereafter. Knowing the predicament of the company, Jones patiently waited for his
turn to be paid. Several demands were made by Jones but ASI just kept on assuring him that he will be
paid his monetary claims. Jones died on August 5, 2002 and failed to receive the same.
In holding that the principle of promissory estoppel applies to this case, the Supreme Court
noted that Jones relied on the promise of ASI that he would be paid as soon as the claims of all the rankand-file employees had been paid. If not for this promise that he had held on to until the time of his
death, there is no reason why he would delay filing the complaint before the Labor Arbiter. Thus, there
is ample justification not to follow the prescriptive period imposed under Article 291 of the Labor Code.
Great injustice will be committed if the employee’s claims would be brushed aside on a mere technicality,
especially when it was petitioner’s own action that prevented respondent from interposing the claims
within the required period.
6. DOCTRINE OF LACHES AS APPLIED TO LABOR CASES.
Laches is the failure for an unreasonable and unexplained length of time to do that which, in
exercising due diligence, could or should have been done earlier. It is negligence or omission to assert a
right within a reasonable time, warranting the presumption that the party entitled to assert it either has
abandoned or has declined to assert it.42
The doctrine of laches or “stale demands”is based upon the ground of public policy which
requires, for the peace of society, discouragement of stale claims. And unlike the statute of limitations,
it is not a mere question of time but is principally a question of inequity or unfairness of permitting a
right or claim to be enforced or asserted.43 Thus, the doctrine of laches presumes that the party guilty of
negligence had the opportunity to do what should have been done but failed to do so. Conversely, if the
said party did not have the occasion to assert the right, then he cannot be adjudged guilty of
laches. Lachesis not concerned with the mere lapse of time; rather the party must have been afforded
an opportunity to pursue his claim in order that the delay may sufficiently constitute laches.44
In labor cases, laches may be applied only upon the most convincing evidence of deliberate
inaction, for the rights of laborers are protected under the social justice provisions of the Constitution
and under the Civil Code.45
7. LACHES AND PRESCRIPTION, DISTINGUISHED.
th
th
Laches is a doctrine in equity while prescription is based on law. Our courts are basically courts
of law, not courts of equity. Thus, laches cannot be invoked to resist the enforcement of an existing
legal right. It is a long standing principle that equity follows the law. Courts exercising equity jurisdiction
are bound by rules of law and have no arbitrary discretion to disregard them. Laches cannot be invoked
to bar a cause of action which was filed within the prescriptive period allowed by law.46Thus, where the
claim was filed within the three-year47 or four-year48 statutory period, recovery therefor cannot be
barred by laches. Courts should never apply the doctrine of laches earlier than the expiration of time
limited for the commencement of actions at law.49
The Supreme Court has been more emphatic in upholding the rules of procedure. As for equity
which has been aptly described as a “justice outside legality,” this is applied only in the absence of, and
never against, statutory law or, as in this case, judicial rules of procedure. Aequetas nunguam
contravenit legis. The pertinent positive rules being present here, they should preempt and prevail over
all abstract arguments based only on equity.50
Thus, as far as monetary claims are concerned, it was held in Chua v. CA,51 that there is no
laches where there is no proof that private respondent-employees had failed or neglected to assert their
right, considering that they filed their claim for SSS coverage within the period prescribed by law.
Similarly, in Placewell International Services Corp. v. Camote, 52 the doctrine of laches was not
applied since respondent filed his claim within the three-year prescriptive period for the filing of money
claims set forth in Article 291 of the Labor Code.
As far as claim for reinstatement in an illegal dismissal case is concerned, Philippine Carpet
Manufacturing Corporation v. Tagyamon,53 is instructive in that an action for reinstatement by reason
of illegal dismissal is one based on an injury to the complainants’ rights which should be brought within
four (4) years from the time of their dismissal pursuant to Article 1146 54 of the Civil Code. Respondents’
complaint filed almost three (3) years after their alleged illegal dismissal was still well within the
prescriptive period. Laches cannot, therefore, be invoked yet. 55 To be sure, laches may be applied only
upon the most convincing evidence of deliberate inaction, for the rights of laborers are protected under
the social justice provisions of the Constitution and under the Civil Code. 56
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