FIRST DIVISION

G.R. No. 76633 October 18, 1988

EASTERN SHIPPING LINES, INC., petitioner, vs.PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION (POEA), MINISTER OF LABOR AND EMPLOYMENT, HEARING OFFICER ABDUL BASAR and KATHLEEN D. SACO, respondents.

Jimenea, Dala & Zaragoza Law Office for petitioner.

The Solicitor General for public respondent.

Dizon Law Office for respondent Kathleen D. Saco.

CRUZ, J.:

The private respondent in this case was awarded the sum of P192,000.00 by the Philippine Overseas Employment Administration (POEA) for the death of her husband. The decision is challenged by the petitioner on the principal ground that the POEA had no jurisdiction over the case as the husband was not an overseas worker.

Vitaliano Saco was Chief Officer of the M/V Eastern Polaris when he was killed in an accident in Tokyo, Japan, March 15, 1985. His widow sued for damages under Executive Order No. 797 and Memorandum Circular No. 2 of the POEA. The petitioner, as owner of the vessel, argued that the complaint was cognizable not by the POEA but by the Social Security System and should have been filed against the State Insurance Fund. The POEA nevertheless assumed jurisdiction and after considering the position papers of the parties ruled in favor of the complainant. The award consisted of P180,000.00 as death benefits and P12,000.00 for burial expenses.

The petitioner immediately came to this Court, prompting the Solicitor General to move for dismissal on the ground of non-exhaustion of administrative remedies.

Ordinarily, the decisions of the POEA should first be appealed to the National Labor Relations Commission, on the theory inter alia that the agency should be given an opportunity to correct the errors, if any, of its subordinates. This case comes under one of the exceptions, however, as the questions the petitioner is raising are essentially questions of law. 1 Moreover, the private respondent himself has not objected to the petitioner's direct resort to this Court, observing that the usual procedure would delay the disposition of the case to her prejudice.

The Philippine Overseas Employment Administration was created under Executive Order No. 797, promulgated on May 1, 1982, to promote and monitor the overseas employment of Filipinos and to protect their rights. It replaced the National Seamen Board created earlier under Article 20 of the Labor Code in 1974. Under Section 4(a) of the said executive order, the POEA is vested with "original and exclusive jurisdiction over all cases, including money claims, involving employee-employer relations arising out of or by virtue of any law or contract involving Filipino contract workers, including seamen." These cases, according to the 1985 Rules and Regulations on Overseas Employment issued by the POEA, include "claims for death, disability and other benefits" arising out of such employment. 2

The petitioner does not contend that Saco was not its employee or that the claim of his widow is not compensable. What it does urge is that he was not an overseas worker but a 'domestic employee and consequently his widow's claim should have been filed with Social Security System, subject to appeal to the Employees Compensation Commission.

We see no reason to disturb the factual finding of the POEA that Vitaliano Saco was an overseas employee of the petitioner at the time he met with the fatal accident in Japan in 1985.

Under the 1985 Rules and Regulations on Overseas Employment, overseas employment is defined as "employment of a worker outside the Philippines, including employment on board vessels plying international waters, covered by a valid contract. 3 A contract worker is described as "any person working or who has worked overseas under a valid employment contract and shall include seamen" 4 or "any person working overseas or who has been employed by another which may be a local employer, foreign employer, principal or partner under a valid employment contract and shall include seamen." 5 These definitions clearly apply to Vitaliano Saco for it is not disputed that he died while under a contract of employment with the petitioner and alongside the petitioner's vessel, the M/V Eastern Polaris, while berthed in a foreign country. 6

It is worth observing that the petitioner performed at least two acts which constitute implied or tacit recognition of the nature of Saco's employment at the time of his death in 1985. The first is its submission of its shipping articles to the POEA for processing, formalization and approval in the exercise of its regulatory power over overseas employment under Executive Order NO. 797. 7 The second is its payment 8 of the contributions mandated by law and regulations to the Welfare Fund for Overseas Workers, which was created by P.D. No. 1694 "for the purpose of providing social and welfare services to Filipino overseas workers."

Significantly, the office administering this fund, in the receipt it prepared for the private respondent's signature, described the subject of the burial benefits as "overseas contract worker Vitaliano Saco." 9 While this receipt is certainly not controlling, it does indicate, in the light of the petitioner's own previous acts, that the petitioner and the Fund to which it had made contributions considered Saco to be an overseas employee.

The petitioner argues that the deceased employee should be likened to the employees of the Philippine Air Lines who, although working abroad in its international flights, are not considered overseas workers. If this be so, the petitioner should not have found it necessary to submit its shipping articles to the POEA for processing, formalization and approval or to contribute to the Welfare Fund which is available only to overseas workers. Moreover, the analogy is hardly appropriate as the employees of the PAL cannot under the definitions given be considered seamen nor are their appointments coursed through the POEA.

The award of P180,000.00 for death benefits and P12,000.00 for burial expenses was made by the POEA pursuant to its Memorandum Circular No. 2, which became effective on February 1, 1984. This circular prescribed a standard contract to be adopted by both foreign and domestic shipping companies in the hiring of Filipino seamen for overseas employment. A similar contract had earlier been required by the National Seamen Board and had been sustained in a number of cases by this Court. 10 The petitioner claims that it had never entered into such a contract with the deceased Saco, but that is hardly a serious argument. In the first place, it should have done so as required by the circular, which specifically declared that "all parties to the employment of any Filipino seamen on board any ocean-going vessel are advised to adopt and use this employment contract effective 01 February 1984 and to desist from using any other format of employment contract effective that date." In the second place, even if it had not done so, the provisions of the said circular are nevertheless deemed written into the contract with Saco as a postulate of the police power of the State. 11

But the petitioner questions the validity of Memorandum Circular No. 2 itself as violative of the principle of non-delegation of legislative power. It contends that no authority had been given the POEA to promulgate the said regulation; and even with such authorization, the regulation represents an exercise of legislative discretion which, under the principle, is not subject to delegation.

The authority to issue the said regulation is clearly provided in Section 4(a) of Executive Order No. 797, reading as follows:

... The governing Board of the Administration (POEA), as hereunder provided shall promulgate the necessary rules and regulations to govern the exercise of the adjudicatory functions of the Administration (POEA).

Similar authorization had been granted the National Seamen Board, which, as earlier observed, had itself prescribed a standard shipping contract substantially the same as the format adopted by the POEA.

The second challenge is more serious as it is true that legislative discretion as to the substantive contents of the law cannot be delegated. What can be delegated is the discretion to determine how the law may be enforced, not what the law shall be. The ascertainment of the latter subject is a prerogative of the legislature. This prerogative cannot be abdicated or surrendered by the legislature to the delegate. Thus, in Ynot v. Intermediate Apellate Court 12 which annulled Executive Order No. 626, this Court held:

We also mark, on top of all this, the questionable manner of the disposition of the confiscated property as prescribed in the questioned executive order. It is there authorized that the seized property shall be distributed to charitable institutions and other similar institutions as the Chairman of the National Meat Inspection Commission may see fit, in the case of carabaos.' (Italics supplied.) The phrase "may see fit" is an extremely generous and dangerous condition, if condition it is. It is laden with perilous opportunities for partiality and abuse, and even corruption. One searches in vain for the usual standard and the reasonable guidelines, or better still, the limitations that the officers must observe when they make their distribution. There is none. Their options are apparently boundless. Who shall be the fortunate beneficiaries of their generosity and by what criteria shall they be chosen? Only the officers named can supply the answer, they and they alone may choose the grantee as they see fit, and in their own exclusive discretion. Definitely, there is here a 'roving commission a wide and sweeping authority that is not canalized within banks that keep it from overflowing,' in short a clearly profligate and therefore invalid delegation of legislative powers.

There are two accepted tests to determine whether or not there is a valid delegation of legislative power, viz, the completeness test and the sufficient standard test. Under the first test, the law must be complete in all its terms and conditions when it leaves the legislature such that when it reaches the delegate the only thing he will have to do is enforce it. 13 Under the sufficient standard test, there must be adequate guidelines or stations in the law to map out the boundaries of the delegate's authority and prevent the delegation from running riot. 14

Both tests are intended to prevent a total transference of legislative authority to the delegate, who is not allowed to step into the shoes of the legislature and exercise a power essentially legislative.

The principle of non-delegation of powers is applicable to all the three major powers of the Government but is especially important in the case of the legislative power because of the many instances when its delegation is permitted. The occasions are rare when executive or judicial powers have to be delegated by the authorities to which they legally certain. In the case of the legislative power, however, such occasions have become more and more frequent, if not necessary. This had led to the observation that the delegation of legislative power has become the rule and its non-delegation the exception.

The reason is the increasing complexity of the task of government and the growing inability of the legislature to cope directly with the myriad problems demanding its attention. The growth of society has ramified its activities and created peculiar and sophisticated problems that the legislature cannot be expected reasonably to comprehend. Specialization even in legislation has become necessary. To many of the problems attendant upon present-day undertakings, the legislature may not have the competence to provide the required direct and efficacious, not to say, specific solutions. These solutions may, however, be expected from its delegates, who are supposed to be experts in the particular fields assigned to them.

The reasons given above for the delegation of legislative powers in general are particularly applicable to administrative bodies. With the proliferation of specialized activities and their attendant peculiar problems, the national legislature has found it more and more necessary to entrust to administrative agencies the authority to issue rules to carry out the general provisions of the statute. This is called the "power of subordinate legislation."

With this power, administrative bodies may implement the broad policies laid down in a statute by "filling in' the details which the Congress may not have the opportunity or competence to provide. This is effected by their promulgation of what are known as supplementary regulations, such as the implementing rules issued by the Department of Labor on the new Labor Code. These regulations have the force and effect of law.

Memorandum Circular No. 2 is one such administrative regulation. The model contract prescribed thereby has been applied in a significant number of the cases without challenge by the employer. The power of the POEA (and before it the National Seamen Board) in requiring the model contract is not unlimited as there is a sufficient standard guiding the delegate in the exercise of the said authority. That standard is discoverable in the executive order itself which, in creating the Philippine Overseas Employment Administration, mandated it to protect the rights of overseas Filipino workers to "fair and equitable employment practices."

Parenthetically, it is recalled that this Court has accepted as sufficient standards "Public interest" in People v. Rosenthal 15 "justice and equity" in Antamok Gold Fields v. CIR 16 "public convenience and welfare" in Calalang v. Williams 17 and "simplicity, economy and efficiency" in Cervantes v. Auditor General, 18 to mention only a few cases. In the United States, the "sense and experience of men" was accepted in Mutual Film Corp. v. Industrial Commission, 19 and "national security" in Hirabayashi v. United States. 20

It is not denied that the private respondent has been receiving a monthly death benefit pension of P514.42 since March 1985 and that she was also paid a P1,000.00 funeral benefit by the Social Security System. In addition, as already observed, she also received a P5,000.00 burial gratuity from the Welfare Fund for Overseas Workers. These payments will not preclude allowance of the private respondent's claim against the petitioner because it is specifically reserved in the standard contract of employment for Filipino seamen under Memorandum Circular No. 2, Series of 1984, that

Section C. Compensation and Benefits.

1. In case of death of the seamen during the term of his Contract, the employer shall pay his beneficiaries the amount of:

a. P220,000.00 for master and chief engineers

b. P180,000.00 for other officers, including radio operators and master electrician

c. P 130,000.00 for ratings.

2. It is understood and agreed that the benefits mentioned above shall be separate and distinct from, and will be in addition to whatever benefits which the seaman is entitled to under Philippine laws. ...

3. ...

c. If the remains of the seaman is buried in the Philippines, the owners shall pay the beneficiaries of the seaman an amount not exceeding P18,000.00 for burial expenses.

The underscored portion is merely a reiteration of Memorandum Circular No. 22, issued by the National Seamen Board on July 12,1976, providing an follows:

Income Benefits under this Rule Shall be Considered Additional Benefits.

All compensation benefits under Title II, Book Four of the Labor Code of the Philippines (Employees Compensation and State Insurance Fund) shall be granted, in addition to whatever benefits, gratuities or allowances that the seaman or his beneficiaries may be entitled to under the employment contract approved by the NSB. If applicable, all benefits under the Social Security Law and the Philippine Medicare Law shall be enjoyed by the seaman or his beneficiaries in accordance with such laws.

The above provisions are manifestations of the concern of the State for the working class, consistently with the social justice policy and the specific provisions in the Constitution for the protection of the working class and the promotion of its interest.

One last challenge of the petitioner must be dealt with to close t case. Its argument that it has been denied due process because the same POEA that issued Memorandum Circular No. 2 has also sustained and applied it is an uninformed criticism of administrative law itself. Administrative agencies are vested with two basic powers, the quasi-legislative and the quasi-judicial. The first enables them to promulgate implementing rules and regulations, and the second enables them to interpret and apply such regulations. Examples abound: the Bureau of Internal Revenue adjudicates on its own revenue regulations, the Central Bank on its own circulars, the Securities and Exchange Commission on its own rules, as so too do the Philippine Patent Office and the Videogram Regulatory Board and the Civil Aeronautics Administration and the Department of Natural Resources and so on ad infinitum on their respective administrative regulations. Such an arrangement has been accepted as a fact of life of modern governments and cannot be considered violative of due process as long as the cardinal rights laid down by Justice Laurel in the landmark case of Ang Tibay v. Court of Industrial Relations 21 are observed.

Whatever doubts may still remain regarding the rights of the parties in this case are resolved in favor of the private respondent, in line with the express mandate of the Labor Code and the principle that those with less in life should have more in law.

When the conflicting interests of labor and capital are weighed on the scales of social justice, the heavier influence of the latter must be counter-balanced by the sympathy and compassion the law must accord the underprivileged worker. This is only fair if he is to be given the opportunity and the right to assert and defend his cause not as a subordinate but as a peer of management, with which he can negotiate on even plane. Labor is not a mere employee of capital but its active and equal partner.

WHEREFORE, the petition is DISMISSED, with costs against the petitioner. The temporary restraining order dated December 10, 1986 is hereby LIFTED. It is so ordered.

Narvasa, Gancayco, Grio-Aquino and Medialdea, JJ., concur.

SECOND DIVISION

G.R. No. 73681 June 30, 1988

COLGATE PALMOLIVE PHILIPPINES, Inc., petitioners, vs.HON. BLAS F. OPLE, COLGATE PALMOLIVE SALES UNION, respondents.

PARAS, J.:

Before Us is a Petition for certiorari seeking to set aside and annul the Order of respondent Minister of Labor and Employment (MOLE) directly certifying private respondent as the recognized and duly-authorized collective bargaining agent for petitioner's sales force and ordering the reinstatement of three employees of petitioner.

Acting on the petition for certiorari with prayer for temporary restraining order, this Court issued a Temporary Restraining Order enjoining respondents from enforcing and/or carrying out the assailed order.

The antecedent facts are as follows:

On March 1, 1985, the respondent Union filed a Notice of Strike with the Bureau of Labor Relations (BLR) on ground of unfair labor practice consisting of alleged refusal to bargain, dismissal of union officers/members; and coercing employees to retract their membership with the union and restraining non-union members from joining the union.

After efforts at amicable settlement proved unavailing, the Office of the MOLE, upon petition of petitioner assumed jurisdiction over the dispute pursuant to Article 264 (g) of the Labor Code, Thereafter the case was captioned AJML-3-142-85, BLR-3-86-85 "In Re: Assumption of Jurisdiction over the Labor Dispute at Colgate Palmolive Philippines, Inc." In its position paper, petitioner pointed out that

(a) There is no legal basis for the charge that the company refused to bargain collectively with the union considering that the alleged union is not the certified agent of the company salesmen;

(b) The union's status as a legitimate labor organization is still under question because on 6 March 1985, a certain Monchito Rosales informed the BLR that an overwhelming majority of the salesmen are not in favor of the Notice of Strike allegedly filed by the Union (Annex "C");

(c) Upon verification of the records of the Ministry of Labor and Employment, it appeared that a petition for cancellation of the registration of the alleged union was filed by Monchito Rosales on behalf of certain salesmen of the company who are obviously against the formation of the Colgate Palmolive Sales Labor Union which is supposed to represent them;

(d) The preventive suspensions of salesmen Peregrino Sayson, Salvador Reynante and Cornelio Mejia, and their eventual dismissal from the employ of the company were carried out pursuant to the inherent right and prerogative of management to discipline erring employees; that based on the preliminary investigation conducted by the company, there appeared substantial grounds to believe that Sayson, Reynante and Mejia violated company rules and regulations necessitating their suspension pending further investigation of their respective cases;

(e) It was also ascertained that the company sustained damages resulting from the infractions committed by the three salesmen, and that the final results of the investigation fully convinced the company of the existence of just causes for the dismissal of the three salesmen;

(f) The formation of the union and the membership therein of Sayson, Reynante and Mejia were not in any manner connected with the company's decision to dismiss the three; that the fact that their dismissal came at a time when the alleged union was being formed was purely coincidental;

(g) The union's charge therefore, that the membership in the union and refusal to retract precipitated their dismissal was totally false and amounted to a malicious imputation of union busting;

(h) The company never coerced or attempted to coerce employees, much less interferred in the exercise of their right to self-organization; the company never thwarted nor tried to defeat or frustrate the employees' right to form their union in pursuit of their collective interest, as long as that right is exercised within the limits prescribed by law; in fact, there are at present two unions representing the rank and file employees of the company-the factory workers who are covered by a CBA which expired on 31 October 1985 (which was renewed on May 31, 1985) and are represented by Colgate Palmolive Employees Union (PAFLU); whereas, the salaried employees are covered by a CBA which will expire on 31 May 1986 represented by Philippine Association of Free Labor Union (PAFLU)-CPPI Office Chapter. (pp. 4-6, Rollo)

The respondent Union, on the other hand, in its position paper, reiterated the issue in its Notice to Strike, alleging that it was duly registered with the Bureau of Labor Relations under Registry No. 10312-LC with a total membership of 87 regular salesmen (nationwide) out of 117 regular salesmen presently employed by the company as of November 30, 1985 and that since the registration of the Union up to the present, more than 2/3 of the total salesmen employed are already members of the Union, leaving no doubt that the true sentiment of the salesmen was to form and organize the Colgate-Palmolive Salesmen Union. The Union further alleged that the company is unreasonably delaying the recognition of the union because when it was informed of the organization of the union, and when presented with a set of proposals for a collective bargaining agreement, the company took an adversarial stance by secretly distributing a "survey sheet on union membership" to newly hired salesmen from the Visayas, Mindanao and Metro Manila areas, purposely avoiding regular salesmen who are now members of the union; that in the accomplishment of the form, District Sales Managers, and Sales Supervisors coerced salesmen from the Visayas and Mindanao by requiring them to fill up and/or accomplish said form by checking answers which were adverse to the union; that with a handful of the survey sheets secured by management through coercion, it now would like to claim that all salesmen are not in favor of the organization of the union, which acts are clear manifestations of unfair labor practices.

On August 9,1985, respondent Minister rendered a decision which:

(a) found no merit in the Union's Complaint for unfair labor practice allegedly committed by petitioner as regards the alleged refusal of petitioner to negotiate with the Union, and the secret distribution of survey sheets allegedly intended to discourage unionism,

(b) found the three salesmen, Peregrino Sayson, Salvador Reynante & Cornelio Mejia "not without fault" and that "the company 1 has grounds to dismiss above named salesmen"

and at the same time respondent Minister directly certified the respondent Union as the collective bargaining agent for the sales force in petitioner company and ordered the reinstatement of the three salesmen to the company on the ground that the employees were first offenders.

Petitioner filed a Motion for Reconsideration which was denied by respondent Minister in his assailed Order, dated December 27, 1985. Petitioner now comes to Us with the following:

Assignment of Errors

I

Respondent Minister committed a grave abuse of discretion when he directly certified the Union solely on the basis of the latter's self-serving assertion that it enjoys the support of the majority of the sales force in petitioner's company.

II

Respondent Minister committed a grave abuse of discretion when, notwithstanding his very own finding that there was just cause for the dismissal of the three (3) salesmen, he nevertheless ordered their reinstatement. (pp. 7-8, Rollo)

Petitioner concedes that respondent Minister has the power to decide a labor dispute in a case assumed by him under Art. 264 (g) of the Labor Code but this power was exceeded when he certified respondent Union as the exclusive bargaining agent of the company's salesmen since this is not a representation proceeding as described under the Labor Code. Moreover the Union did not pray for certification but merely for a finding of unfair labor practice imputed to petitioner-company.

The petition merits our consideration. The procedure for a representation case is outlined in Arts. 257-260 of the Labor Code, in relation to the provisions on cancellation of a Union registration under Arts. 239-240 thereof, the main purpose of which is to aid in ascertaining majority representation. The requirements under the law, specifically Secs. 2, 5, and 6 of Rule V, Book V, of the Rules Implementing the Labor Code are all calculated to ensure that the certified bargaining representative is the true choice of the employees against all contenders. The Constitutional mandate that the State shall "assure the rights of the workers to self-organization, collective bargaining, security of tenure and just and humane conditions of work," should be achieved under a system of law such as the aforementioned provisions of the pertinent statutes. When an overzealous official by-passes the law on the pretext of retaining a laudable objective, the intendment or purpose of the law will lose its meaning as the law itself is disregarded. When respondent Minister directly certified the Union, he in fact disregarded this procedure and its legal requirements. There was therefore failure to determine with legal certainty whether the Union indeed enjoyed majority representation. Contrary to the respondent Minister's observation, the holding of a certification election at the proper time is not necessarily a mere formality as there was a compelling legal reason not to directly and unilaterally certify a union whose legitimacy is precisely the object of litigation in a pending cancellation case filed by certain "concerned salesmen," who also claim majority status. Even in a case where a union has filed a petition for certification elections, the mere fact that no opposition is made does not warrant a direct certification. More so as in the case at bar, when the records of the suit show that the required proof was not presented in an appropriate proceeding and that the basis of the direct certification was the Union's mere allegation in its position paper that it has 87 out of 117 regular salesmen. In other words, respondent Minister merely relied on the self-serving assertion of the respondent Union that it enjoyed the support of the majority of the salesmen, without subjecting such assertion to the test of competing claims. As pointed out by petitioner in its petition, what the respondent Minister achieved in rendering the assailed orders was to make a mockery of the procedure provided under the law for representation cases because:

(a) He has created havoc by impliedly establishing a procedural short-cut to obtaining a direct certification-by merely filing a notice of strike.

(b) By creating such a short-cut, he has officially encouraged disrespect for the law.

(c) By directly certifying a Union without sufficient proof of majority representation, he has in effect arrogated unto himself the right, vested naturally in the employees, to choose their collective bargaining representative.

(d) He has in effect imposed upon the petitioner the obligation to negotiate with a union whose majority representation is under serious question. This is highly irregular because while the Union enjoys the blessing of the Minister, it does not enjoy the blessing of the employees. Petitioner is therefore under threat of being held liable for refusing to negotiate with a union whose right to bargaining status has not been legally established. (pp. 9-10, Rollo)

The order of the respondent Minister to reinstate the employees despite a clear finding of guilt on their part is not in conformity with law. Reinstatement is simply incompatible with a finding of guilt. Where the totality of the evidence was sufficient to warrant the dismissal of the employees the law warrants their dismissal without making any distinction between a first offender and a habitual delinquent. Under the law, respondent Minister is duly mandated to equally protect and respect not only the labor or workers' side but also the management and/or employers' side. The law, in protecting the rights of the laborer, authorizes neither oppression nor self-destruction of the employer. To order the reinstatement of the erring employees namely, Mejia, Sayson and Reynante would in effect encourage unequal protection of the laws as a managerial employee of petitioner company involved in the same incident was already dismissed and was not ordered to be reinstated. As stated by Us in the case of San Miguel Brewery vs. National Labor Union, 2 "an employer cannot legally be compelled to continue with the employment of a person who admittedly was guilty of misfeasance or malfeasance towards his employer, and whose continuance in the service of the latter is patently inimical to his interest."

In the subject order, respondent Minister cited a cases 3 implying that "the proximity of the dismissal of the employees to the assumption order created a doubt as to whether their dismissal was really for just cause or due to their activities." 4

This is of no moment for the following reasons:

(a) Respondent Minister has still maintained in his assailed order that a just cause existed to justify the dismissal of the employees.

(b) Respondent Minister has not made any finding substantiated by evidence that the employees were dismissed because of their union activities.

WHEREFORE, judgment is hereby rendered REVERSING and SETTING ASIDE the Order of the respondent Minister, dated December 27, 1985 for grave abuse of discretion. However, in view of the fact that the dismissed employees are first offenders, petitioner is hereby ordered to give them separation pay. The temporary restraining order is hereby made permanent.

SO ORDERED.

Yap, C.J., Melencio-Herrera, Padilla and Sarmiento, JJ., concur.

SECOND DIVISION

G.R. No. L-54334 January 22, 1986

KIOK LOY, doing business under the name and style SWEDEN ICE CREAM PLANT, petitioner, vs.NATIONAL LABOR RELATIONS COMMISSION (NLRC) and PAMBANSANG KILUSAN NG PAGGAWA (KILUSAN), respondents.

Ablan and Associates for petitioner.

Abdulcadir T. Ibrahim for private respondent.

CUEVAS, J.:

Petition for certiorari to annul the decision 1 of the National Labor Relations Commission (NLRC) dated July 20, 1979 which found petitioner Sweden Ice Cream guilty of unfair labor practice for unjustified refusal to bargain, in violation of par. (g) of Article 249 2 of the New Labor Code, 3 and declared the draft proposal of the Union for a collective bargaining agreement as the governing collective bargaining agreement between the employees and the management.

The pertinent background facts are as follows:

In a certification election held on October 3, 1978, the Pambansang Kilusang Paggawa (Union for short), a legitimate late labor federation, won and was subsequently certified in a resolution dated November 29, 1978 by the Bureau of Labor Relations as the sole and exclusive bargaining agent of the rank-and-file employees of Sweden Ice Cream Plant (Company for short). The Company's motion for reconsideration of the said resolution was denied on January 25, 1978.

Thereafter, and more specifically on December 7, 1978, the Union furnished 4 the Company with two copies of its proposed collective bargaining agreement. At the same time, it requested the Company for its counter proposals. Eliciting no response to the aforesaid request, the Union again wrote the Company reiterating its request for collective bargaining negotiations and for the Company to furnish them with its counter proposals. Both requests were ignored and remained unacted upon by the Company.

Left with no other alternative in its attempt to bring the Company to the bargaining table, the Union, on February 14, 1979, filed a "Notice of Strike", with the Bureau of Labor Relations (BLR) on ground of unresolved economic issues in collective bargaining. 5

Conciliation proceedings then followed during the thirty-day statutory cooling-off period. But all attempts towards an amicable settlement failed, prompting the Bureau of Labor Relations to certify the case to the National Labor Relations Commission (NLRC) for compulsory arbitration pursuant to Presidential Decree No. 823, as amended. The labor arbiter, Andres Fidelino, to whom the case was assigned, set the initial hearing for April 29, 1979. For failure however, of the parties to submit their respective position papers as required, the said hearing was cancelled and reset to another date. Meanwhile, the Union submitted its position paper. The Company did not, and instead requested for a resetting which was granted. The Company was directed anew to submit its financial statements for the years 1976, 1977, and 1978.

The case was further reset to May 11, 1979 due to the withdrawal of the Company's counsel of record, Atty. Rodolfo dela Cruz. On May 24, 1978, Atty. Fortunato Panganiban formally entered his appearance as counsel for the Company only to request for another postponement allegedly for the purpose of acquainting himself with the case. Meanwhile, the Company submitted its position paper on May 28, 1979.

When the case was called for hearing on June 4, 1979 as scheduled, the Company's representative, Mr. Ching, who was supposed to be examined, failed to appear. Atty. Panganiban then requested for another postponement which the labor arbiter denied. He also ruled that the Company has waived its right to present further evidence and, therefore, considered the case submitted for resolution.

On July 18, 1979, labor arbiter Andres Fidelino submitted its report to the National Labor Relations Commission. On July 20, 1979, the National Labor Relations Commission rendered its decision, the dispositive portion of which reads as follows:

WHEREFORE, the respondent Sweden Ice Cream is hereby declared guilty of unjustified refusal to bargain, in violation of Section (g) Article 248 (now Article 249), of P.D. 442, as amended. Further, the draft proposal for a collective bargaining agreement (Exh. "E ") hereto attached and made an integral part of this decision, sent by the Union (Private respondent) to the respondent (petitioner herein) and which is hereby found to be reasonable under the premises, is hereby declared to be the collective agreement which should govern the relationship between the parties herein.

SO ORDERED. (Emphasis supplied)

Petitioner now comes before Us assailing the aforesaid decision contending that the National Labor Relations Commission acted without or in excess of its jurisdiction or with grave abuse of discretion amounting to lack of jurisdiction in rendering the challenged decision. On August 4, 1980, this Court dismissed the petition for lack of merit. Upon motion of the petitioner, however, the Resolution of dismissal was reconsidered and the petition was given due course in a Resolution dated April 1, 1981.

Petitioner Company now maintains that its right to procedural due process has been violated when it was precluded from presenting further evidence in support of its stand and when its request for further postponement was denied. Petitioner further contends that the National Labor Relations Commission's finding of unfair labor practice for refusal to bargain is not supported by law and the evidence considering that it was only on May 24, 1979 when the Union furnished them with a copy of the proposed Collective Bargaining Agreement and it was only then that they came to know of the Union's demands; and finally, that the Collective Bargaining Agreement approved and adopted by the National Labor Relations Commission is unreasonable and lacks legal basis.

The petition lacks merit. Consequently, its dismissal is in order.

Collective bargaining which is defined as negotiations towards a collective agreement, 6 is one of the democratic frameworks under the New Labor Code, designed to stabilize the relation between labor and management and to create a climate of sound and stable industrial peace. It is a mutual responsibility of the employer and the Union and is characterized as a legal obligation. So much so that Article 249, par. (g) of the Labor Code makes it an unfair labor practice for an employer to refuse "to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement with respect to wages, hours of work, and all other terms and conditions of employment including proposals for adjusting any grievance or question arising under such an agreement and executing a contract incorporating such agreement, if requested by either party.

While it is a mutual obligation of the parties to bargain, the employer, however, is not under any legal duty to initiate contract negotiation. 7 The mechanics of collective bargaining is set in motion only when the following jurisdictional preconditions are present, namely, (1) possession of the status of majority representation of the employees' representative in accordance with any of the means of selection or designation provided for by the Labor Code; (2) proof of majority representation; and (3) a demand to bargain under Article 251, par. (a) of the New Labor Code . ... all of which preconditions are undisputedly present in the instant case.

From the over-all conduct of petitioner company in relation to the task of negotiation, there can be no doubt that the Union has a valid cause to complain against its (Company's) attitude, the totality of which is indicative of the latter's disregard of, and failure to live up to, what is enjoined by the Labor Code to bargain in good faith.

We are in total conformity with respondent NLRC's pronouncement that petitioner Company is GUILTY of unfair labor practice. It has been indubitably established that (1) respondent Union was a duly certified bargaining agent; (2) it made a definite request to bargain, accompanied with a copy of the proposed Collective Bargaining Agreement, to the Company not only once but twice which were left unanswered and unacted upon; and (3) the Company made no counter proposal whatsoever all of which conclusively indicate lack of a sincere desire to negotiate. 8 A Company's refusal to make counter proposal if considered in relation to the entire bargaining process, may indicate bad faith and this is specially true where the Union's request for a counter proposal is left unanswered. 9 Even during the period of compulsory arbitration before the NLRC, petitioner Company's approach and attitude-stalling the negotiation by a series of postponements, non-appearance at the hearing conducted, and undue delay in submitting its financial statements, lead to no other conclusion except that it is unwilling to negotiate and reach an agreement with the Union. Petitioner has not at any instance, evinced good faith or willingness to discuss freely and fully the claims and demands set forth by the Union much less justify its opposition thereto. 10

The case at bar is not a case of first impression, for in the Herald Delivery Carriers Union (PAFLU) vs. Herald Publications 11 the rule had been laid down that "unfair labor practice is committed when it is shown that the respondent employer, after having been served with a written bargaining proposal by the petitioning Union, did not even bother to submit an answer or reply to the said proposal This doctrine was reiterated anew in Bradman vs. Court of Industrial Relations 12 wherein it was further ruled that "while the law does not compel the parties to reach an agreement, it does contemplate that both parties will approach the negotiation with an open mind and make a reasonable effort to reach a common ground of agreement

As a last-ditch attempt to effect a reversal of the decision sought to be reviewed, petitioner capitalizes on the issue of due process claiming, that it was denied the right to be heard and present its side when the Labor Arbiter denied the Company's motion for further postponement.

Petitioner's aforesaid submittal failed to impress Us. Considering the various postponements granted in its behalf, the claimed denial of due process appeared totally bereft of any legal and factual support. As herein earlier stated, petitioner had not even honored respondent Union with any reply to the latter's successive letters, all geared towards bringing the Company to the bargaining table. It did not even bother to furnish or serve the Union with its counter proposal despite persistent requests made therefor. Certainly, the moves and overall behavior of petitioner-company were in total derogation of the policy enshrined in the New Labor Code which is aimed towards expediting settlement of economic disputes. Hence, this Court is not prepared to affix its imprimatur to such an illegal scheme and dubious maneuvers.

Neither are WE persuaded by petitioner-company's stand that the Collective Bargaining Agreement which was approved and adopted by the NLRC is a total nullity for it lacks the company's consent, much less its argument that once the Collective Bargaining Agreement is implemented, the Company will face the prospect of closing down because it has to pay a staggering amount of economic benefits to the Union that will equal if not exceed its capital. Such a stand and the evidence in support thereof should have been presented before the Labor Arbiter which is the proper forum for the purpose.

We agree with the pronouncement that it is not obligatory upon either side of a labor controversy to precipitately accept or agree to the proposals of the other. But an erring party should not be tolerated and allowed with impunity to resort to schemes feigning negotiations by going through empty gestures. 13 More so, as in the instant case, where the intervention of the National Labor Relations Commission was properly sought for after conciliation efforts undertaken by the BLR failed. The instant case being a certified one, it must be resolved by the NLRC pursuant to the mandate of P.D. 873, as amended, which authorizes the said body to determine the reasonableness of the terms and conditions of employment embodied in any Collective Bargaining Agreement. To that extent, utmost deference to its findings of reasonableness of any Collective Bargaining Agreement as the governing agreement by the employees and management must be accorded due respect by this Court.

WHEREFORE, the instant petition is DISMISSED. The temporary restraining order issued on August 27, 1980, is LIFTED and SET ASIDE.

No pronouncement as to costs.

SO ORDERED.

Concepcion, Jr., (Chairman), Abad Santos, Escolin and Alampay, JJ., concur.

THIRD DIVISION

G.R. No. L-49046 January 26, 1988

SATURNO A. VICTORIA, petitioner, vs.HON. AMADO G. INCIONG, DEPUTY MINISTER, and FAR EAST BROADCASTING COMPANY, INC., respondents.

FERNAN, J.:

Petition for review of the Order of the then Acting Secretary of Labor Amado G. Inciong dated June 6, 1978, in NLRC Case No. RB-1764-75, reversing the decision of the National Labor Relations Commission dated November 17, 1976 and holding that, under the law and facts of the case, there was no necessity for private respondent to obtain a clearance for the termination of petitioner's employment under Article 257 [b] of the Labor Code, as amended, and that a mere report of such termination was sufficient, under Section 11 [f]. Rule XIV of the Rules and Regulations implementing said Code.

Petitioner Saturno Victoria was employed on March 17, 1956 by private respondent Far East Broadcasting Company, Incorporated as a radio transmitter operator. Sometime in July 1971, he and his co-workers organized the Far East Broadcasting Company Employees Association. After registering their association with the then Department of Labor, they demanded recognition of said association by the company but the latter refused on the ground that being a non-profit, non-stock, non-commercial and religious corporation, it is not covered by Republic Act 875, otherwise known as the Industrial Peace Act, the labor law enforced at that time.

Several conciliation meetings were held at the Department of Labor and in those meetings, the Director of Labor Relations Edmundo Cabal advised the union members that the company could not be forced to recognize them or to bargain collectively with them because it is a non-profit, non-commercial and religious organization. Notwithstanding such advice, the union members led by Saturno Victoria as its president, declared a strike and picketed the company's premises on September 6, 1972 for the purpose of seeking recognition of the labor union.

As a countermeasure, the company filed a case for damages with preliminary injunction against the strikers before the then Court of First Instance of Bulacan docketed as Civil Case No. 750-V. Said court issued an injunction enjoining the three-day-old strike staged against the company. The complaint was later amended seeking to declare the strike illegal.

Upon the declaration of martial law on September 21, 1972 and the promulgation of Presidential Decree No. 21 creating the National Labor Relations Commission, the ad hoc National Labor Relations Commission took cognizance of the strike through NLRC Case No. 0021 entitled "Far East Broadcasting Company Employees Association, complainant versus Far East Broadcasting Company, respondent" and NLRC Case No. 0285 entitled "Generoso Serino, complainant, versus Far East Broadcasting Company, respondent", both cases for reinstatement due to the company's return to accept the union's offer to return to work during the pendency of the case in the Court of First Instance.

On December 28, 1972, Arbitrator Flavio Aguas rendered a joint decision in the two cases mentioned above recognizing the jurisdiction of the Court of First Instance of Bulacan, the dispositive portion reading as follows:

IN VIEW WHEREOF, and in the interest of justice and equity, it is hereby directed that:

1. That striking members of the Far East Broadcasting Company Employees Association return to their respective positions in the corporation;

2. The respondent Far East Broadcasting Company Incorporated to accept back the returning strikers without loss in rank seniority or status;

3. The workers shall return to work within [10] days from receipt of this resolution otherwise they shall be deemed to have forfeited such right;

4. The respondent shall report compliance with this decision within fifteen [15] days from receipt hereof.

This Order shall, however, be without prejudice to whatever decision the Court of First Instance of Bulacan may promulgate in Civil Case No. 750-V and to the requirements the existing order may need of people working with the mass media of communications.

IT IS SO ORDERED. 1

The decision of the arbitrator was successively appealed to the ad hoc National Labor Relations Commission, the Secretary of Labor and the Office of the President of the Philippines, and was affirmed in all instances.

On April 23, 1975, the Court of First Instance of Bulacan rendered judgment, to wit:

WHEREFORE, judgment is hereby rendered:

1. Making injunction against defendants permanent;

2. Declaring that this Court has jurisdiction to try and hear the instant case despite Section 2 of Presidential Decree No. 2;

3. Declaring that plaintiff Far East Broadcasting Company is a non-profit organization since it does not declare dividends;

4. Declaring that the strike admitted by the defendants to have been declared by them is illegal inasmuch as it was for the purpose of compelling the plaintiff-company to recognize their labor union which could not be legally done because the plaintiffs were not covered by Republic Act 875;

5. Declaring that the evidence presented is insufficient to show that defendants caused the damage to the plaintiff consequent on the destruction of its relays and its antennas as well as its transmission lines.

SO ORDERED. 2

On April 24, 1975, by virtue of the above decision, the company notified Saturno Victoria that he is dismissed effective April 26, 1975. Thereupon, he filed Case No. RB-IV-1764 before the National Labor Relations Commission, Regional Branch IV against the company alleging violation of article 267 of the Labor Code which requires clearance from the Secretary of Labor for every shutdown of business establishments or dismissal of employees. On February 27, 1976, Labor Arbiter Manuel B. Lorenzo rendered a decision in petitioner's favor declaring the dismissal to be illegal, thereby ordering reinstatement with fun backwages. On appeal, the arbiter's decision was aimed by the National Labor Relations Commission. But when the commission's decision was in turn appealed to the Secretary of Labor, it was set aside and in lieu thereof the questioned Order dated June 6, 1978 was issued.

In view of its brevity and for a better understanding of the reasons behind it, We quote the disputed Order in full:

O R D E R

This is an appeal by respondent from the Decision of the National Labor Relations Commission, dated November 17, 1976.

The Commission upheld the Decision of the labor arbiter dated February 27, 1976 ordering respondent to reinstate with full backwages herein complainant Saturno A. Victoria based on the finding that respondent did not file any application for clearance to terminate the services of complainant before dismissing him from his employment.

Briefly the facts of this case are as follows:

Complainant Saturno Victoria is the president of the Far East Broadcasting Company Employees Union. On September 8, 1972, the said union declared a strike against respondent company. On September 11, 1972, respondent filed with the Court of First Instance of Bulacan, Civil Case No. 750-V, for the issuance of an injunction and a prayer that the strike be declared illegal.

On October 24, 1972, complainant together with the other strikers filed with the ad hoc National Labor Relations Commission Case Nos. 0021 and 0285 for reinstatement. The Arbitrator rendered a decision in said case on December 28, 1972, wherein he ordered respondent to reinstate complainants subject to the following condition:

"This Order shall, however, be without prejudice to whatever decision the Court of First Instance may promulgate on Civil Case No. 750-V and to the requirements the existing order may need of people working with the mass media of communications."

Since said decision was affirmed by the NLRC, the Secretary of Labor, and the Office of the President of the Philippines, complainants were reinstated pursuant thereto.

In a Decision dated April 23, 1975, in Civil Case No. 750-V, promulgated by the Court of First Instance of Bulacan, the strike staged by herein complainant and the other strikers was declared illegal. Based on said Decision, respondent dismissed complainant from his employment. Hence, complainant filed the instant complaint for illegal dismissal.

Under the aforecited facts, we do not agree with the ruling of the Commission now subject of this appeal that an application for clearance to terminate herein complainant is mandatory on the part of respondent before terminating complainant's services. We believe that what would have been necessary was a report as provided for under Section 11 [f] Rule XIV, Book V of the Rules and Regulations Implementing the Labor Code. Moreover, even if an application for clearance was flied, this Office would have treated the same as a report. Otherwise, it would render nugatory the Decision of the Arbitrator dated December 28, 1972 in Case Nos. 0021 and 0285 which was affirmed by the Commission, the Secretary of Labor and the Office of the President of the Philippines, ordering his temporary reinstatement, subject to whatever Decision the CFI of Bulacan may promulgate in Civil Case No. 750-V. It could be clearly inferred from said CFI Decision that if the strike is declared illegal, the strikers will be considered to have lost their employment status under the then existing laws and jurisprudence, otherwise strikers could stage illegal strike with impunity. Since the strike was declared illegal, respondent acted in good faith when it dispensed with the services of herein complainant.

For failure of respondent to file the necessary report and based on equitable considerations, complainant should be granted separation pay equivalent to one-half month salary for every year of service.

WHEREFORE, let the decision of the National Labor Relations Commission dated November 17, 1976 be, as it is hereby, set aside and a new judgment is entered, ordering respondent to give complainant separation pay equivalent to one-half month salary for every year of service.

SO ORDERED. 3

Petitioner elevates to Us for review on certiorari the aforequoted Order seeking to persuade this Court that then Acting Secretary of Labor Amado G. Inciong committed reversible error in holding that, under the law and facts of this case, a mere report of the termination of the services of said petitioner was sufficient. Petitioner assigns the following errors:

I

WHETHER OR NOT A CLEARANCE FROM THE SECRETARY OF LABOR IS STILL NECESSARY BEFORE THE PETITIONER HEREIN COULD BE DISMISSED CONSIDERING THE RESTRICTIVE CONDITION IN THE DECISION OF THE COMPULSORY ARBITRATOR IN NLRC CASE NOS. 0021 AND 0285.

II

WHETHER OR NOT THE DECISION OF THE COURT OF FIRST INSTANCE OF BULACAN IN CIVIL CASE NO. 750-V IPSO FACTO GAVE THE RESPONDENT COMPANY AUTHORITY TO DISMISS HEREIN PETITIONER WITHOUT ANY CLEARANCE FROM THE SECRETARY OF LABOR. 4

The substantive law on the matter enforced during the time of petitioner's dismissal was Article 267 [b] of the Labor Code [in conjunction with the rules and regulations implementing said substantive law.] Article 267 reads:

No employer that has no collective bargaining agreement may shut down his establishment or dismiss or terminate the service of regular employees with at least one [1] year of service except managerial employees as defined in this book without previous written clearance from the Secretary of Labor.

Petitioner maintains that the abovecited provision is very clear. It does not make any distinction as to the ground for dismissal. Whether or not the dismissal sought by the employer company is for cause, it is imperative that the company must apply for a clearance from the Secretary of Labor.

In a recent case 5 penned by Justice Abraham F. Sarmiento promulgated on June 30, 1987, we had occasion to rule in agreement with the findings of then Presidential Assistant for Legal Affairs Ronaldo Zamora that the purpose in requiring a prior clearance from the Secretary of Labor in cases of shutdown or dismissal of employees, is to afford the Secretary ample opportunity to examine and determine the reasonableness of the request.

The Solicitor General, in relation to said pronouncement and in justification of the Acting Labor Secretary's decision makes the following observations:

It is true that article 267 [b] of the Labor Code requires that before any business establishment is shut down or any employee is dismissed, written clearance from the Secretary of Labor must first be obtained. It is likewise true that in the case of petitioner, there was no written clearance in the usual form. But while there may not have been strict compliance with Article 267 there was substantial compliance. The Secretary of Labor twice manifested his conformity to petitioner's dismissal.

The first manifestation of acquiescence by the Secretary of Labor to the dismissal of petitioner was his affirmance of the decision of the arbitrator in NLRC Case Nos. 0021 and 0285. The arbitrator ordered the reinstatement of the strikers but subject to the decision of the CFI of Bulacan in Civil Case No. 750-V. The Secretary of Labor affirmed the decision of the arbitrator. In effect, therefore, the Secretary of Labor issued a carte blanche to the CFI of Bulacan to either dismiss or retain petitioner.

The second manifestation was his decision in NLRC Case No. RB-IV-1764-65 wherein he said that clearance for the dismissal of petitioner was not required, but only a report; that even if an application for clearance was filed, he would have treated it as a mere report. While this is not prior clearance in the contemplation of Article 267, it is at least a ratification of the dismissal of petitioner. 6

We agree with the Solicitor General. Technically speaking, no clearance was obtained by private respondent from the then Secretary of Labor, the last step towards full compliance with the requirements of law on the matter of dismissal of employees. However, the rationale behind the clearance requirement was fully met. The Secretary of Labor was apprised of private respondent's intention to terminate the services of petitioner. This in effect is an application for clearance to dismiss petitioner from employment. The affirmance of the restrictive condition in the dispositive portion of the labor arbiter's decision in NLRC Case Nos. 0021 and 0285 by the Secretary of Labor and the Office of the President of the Philippines, signifies a grant of authority to dismiss petitioner in case the strike is declared illegal by the Court of First Instance of Bulacan. Consequently and as correctly stated by the Solicitor General, private respondent acted in good faith when it terminated the employment of petitioner upon a declaration of illegality of the strike by the Court of First Instance of Bulacan. Moreover, the then Secretary of Labor manifested his conformity to the dismissal, not once, but twice. In this regard, the mandatory rule on clearance need not be applied.

The strike staged by the union in 1972 was a futile move. The law then enforced, Republic Act 875 specifically excluded respondent company from its coverage. Even if the parties had gone to court to compel recognition, no positive relief could have been obtained since the same was not sanctioned by law. Because of this, there was no necessity on the part of private respondent to show specific acts of petitioner during the strike to justify his dismissal.

This is a matter of responsibility and of answerability. Petitioner as a union leader, must see to it that the policies and activities of the union in the conduct of labor relations are within the precepts of law and any deviation from the legal boundaries shall be imputable to the leader. He bears the responsibility of guiding the union along the path of law and to cause the union to demand what is not legally demandable, would foment anarchy which is a prelude to chaos.

Petitioner should have known and it was his duty to impart this imputed knowledge to the members of the union that employees and laborers in non- profit organizations are not covered by the provisions of the Industrial Peace Act and the Court of Industrial Relations [in the case at bar, the Court of First Instance] has no jurisdiction to entertain petitions of labor unions or organizations of said non-profit organizations for certification as the exclusive bargaining representatives of said employees and laborers. 7

As a strike is an economic weapon at war with the policy of the Constitution and the law at that time, a resort thereto by laborers shall be deemed to be a choice of remedy peculiarly their own and outside of the statute, and as such, the strikers must accept all the risks attendant upon their choice. If they succeed and the employer succumbs, the law will not stand in their way in the enjoyment of the lawful fruits of their victory. But if they fail, they cannot thereafter invoke the protection of the law for the consequences of their conduct unless the right they wished vindicated is one which the law will, by all means, protect and enforce. 8

We further agree with the Acting Secretary of Labor that what was required in the case of petitioner's dismissal was only a report as provided under Section 11 [f] of Rule XIV of the Rules and Regulations implementing the Labor Code which provides:

Every employer shall submit a report to the Regional Office in accordance with the form presented by the Department on the following instances of termination of employment, suspension, lay-off or shutdown which may be effected by the employer without prior clearance within five [5] days thereafter:

xxx xxx xxx

[f] All other terminations of employment, suspension, lay-offs or shutdowns, not otherwise specified in this and in the immediately preceding sections.

To hold otherwise would render nugatory the conditions set forth in the decision of Labor Arbiter Aguas on the basis of which petitioner was temporarily reinstated.

Inasmuch as there was a valid and reasonable ground to dismiss petitioner but no report as required by the implementing rules and regulations of the Labor Code was filed by respondent Company with the then Department of Labor, petitioner as held by the Acting Secretary of Labor, is entitled to separation pay equivalent to one-half month salary for every year of service.

WHEREFORE, the petition is dismissed. The decision of the acting Secretary of Labor is AFFIRMED in toto.

SO ORDERED.

Gutierrez, Jr., Feliciano, Bidin and Cortes, JJ., concur.

EN BANC

G.R. No. 130866 September 16, 1998

ST. MARTIN FUNERAL HOME, petitioner, vs.NATIONAL LABOR RELATIONS COMMISSION and BIENVENIDO ARICAYOS, respondents.

REGALADO, J.:

The present petition for certiorari stemmed from a complaint for illegal dismissal filed by herein private respondent before the National Labor Relations Commission (NLRC), Regional Arbitration Branch No. III, in San Fernando, Pampanga. Private respondent alleges that he started working as Operations Manager of petitioner St. Martin Funeral Home on February 6, 1995. However, there was no contract of employment executed between him and petitioner nor was his name included in the semi-monthly payroll. On January 22, 1996, he was dismissed from his employment for allegedly misappropriating P38,000.00 which was intended for payment by petitioner of its value added tax (VAT) to the Bureau of Internal Revenue (BIR). 1

Petitioner on the other hand claims that private respondent was not its employee but only the uncle of Amelita Malabed, the owner of petitioner St. Martin's Funeral Home. Sometime in 1995, private respondent, who was formerly working as an overseas contract worker, asked for financial assistance from the mother of Amelita. Since then, as an indication of gratitude, private respondent voluntarily helped the mother of Amelita in overseeing the business.

In January 1996, the mother of Amelita passed away, so the latter then took over the management of the business. She then discovered that there were arrears in the payment of taxes and other government fees, although the records purported to show that the same were already paid. Amelita then made some changes in the business operation and private respondent and his wife were no longer allowed to participate in the management thereof. As a consequence, the latter filed a complaint charging that petitioner had illegally terminated his employment. 2

Based on the position papers of the parties, the labor arbiter rendered a decision in favor of petitioner on October 25, 1996 declaring that no employer-employee relationship existed between the parties and, therefore, his office had no jurisdiction over the case. 3

Not satisfied with the said decision, private respondent appealed to the NLRC contending that the labor arbiter erred (1) in not giving credence to the evidence submitted by him; (2) in holding that he worked as a "volunteer" and not as an employee of St. Martin Funeral Home from February 6, 1995 to January 23, 1996, or a period of about one year; and (3) in ruling that there was no employer-employee relationship between him and petitioner. 4

On June 13, 1997, the NLRC rendered a resolution setting aside the questioned decision and remanding the case to the labor arbiter for immediate appropriate proceedings. 5 Petitioner then filed a motion for reconsideration which was denied by the NLRC in its resolution dated August 18, 1997 for lack of merit, 6 hence the present petition alleging that the NLRC committed grave abuse of discretion. 7

Before proceeding further into the merits of the case at bar, the Court feels that it is now exigent and opportune to reexamine the functional validity and systemic practicability of the mode of judicial review it has long adopted and still follows with respect to decisions of the NLRC. The increasing number of labor disputes that find their way to this Court and the legislative changes introduced over the years into the provisions of Presidential Decree (P.D.) No. 442 (The Labor Code of the Philippines and Batas Pambansa Blg. (B.P. No.) 129 (The Judiciary Reorganization Act of 1980) now stridently call for and warrant a reassessment of that procedural aspect.

We prefatorily delve into the legal history of the NLRC. It was first established in the Department of Labor by P.D. No. 21 on October 14, 1972, and its decisions were expressly declared to be appealable to the Secretary of Labor and, ultimately, to the President of the Philippines.

On May 1, 1974, P.D. No. 442 enacted the Labor Code of the Philippines, the same to take effect six months after its promulgation. 8 Created and regulated therein is the present NLRC which was attached to the Department of Labor and Employment for program and policy coordination only. 9 Initially, Article 302 (now, Article 223) thereof also granted an aggrieved party the remedy of appeal from the decision of the NLRC to the Secretary of Labor, but P.D. No. 1391 subsequently amended said provision and abolished such appeals. No appellate review has since then been provided for.

Thus, to repeat, under the present state of the law, there is no provision for appeals from the decision of the NLRC. 10 The present Section 223, as last amended by Section 12 of R.A. No. 6715, instead merely provides that the Commission shall decide all cases within twenty days from receipt of the answer of the appellee, and that such decision shall be final and executory after ten calendar days from receipt thereof by the parties.

When the issue was raised in an early case on the argument that this Court has no jurisdiction to review the decisions of the NLRC, and formerly of the Secretary of Labor, since there is no legal provision for appellate review thereof, the Court nevertheless rejected that thesis. It held that there is an underlying power of the courts to scrutinize the acts of such agencies on questions of law and jurisdiction even though no right of review is given by statute; that the purpose of judicial review is to keep the administrative agency within its jurisdiction and protect the substantial rights of the parties; and that it is that part of the checks and balances which restricts the separation of powers and forestalls arbitrary and unjust adjudications. 11

Pursuant to such ruling, and as sanctioned by subsequent decisions of this Court, the remedy of the aggrieved party is to timely file a motion for reconsideration as a precondition for any further or subsequent remedy, 12 and then seasonably avail of the special civil action of certiorari under Rule 65, 13 for which said Rule has now fixed the reglementary period of sixty days from notice of the decision. Curiously, although the 10-day period for finality of the decision of the NLRC may already have lapsed as contemplated in Section 223 of the Labor Code, it has been held that this Court may still take cognizance of the petition for certiorari on jurisdictional and due process considerations if filed within the reglementary period under Rule 65. 14

Turning now to the matter of judicial review of NLRC decisions, B.P. No. 129 originally provided as follows:

Sec. 9. Jurisdiction. The Intermediate Appellate Court shall exercise:

(1) Original jurisdiction to issue writs of mandamus, prohibition, certiorari, habeas corpus, and quo warranto, and auxiliary writs or processes, whether or not in aid of its appellate jurisdiction;

(2) Exclusive original jurisdiction over actions for annulment of judgments of Regional Trial Courts; and

(3) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders, or awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards, or commissions, except those falling within the appellate jurisdiction of the Supreme Court in accordance with the Constitution, the provisions of this Act, and of subparagraph (1) of the third paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act of 1948.

The Intermediate Appellate Court shall have the power to try cases and conduct hearings, receive evidence and perform any and all acts necessary to resolve factual issues raised in cases falling within its original and appellate jurisdiction, including the power to grant and conduct new trials or further proceedings.

These provisions shall not apply to decisions and interlocutory orders issued under the Labor Code of the Philippines and by the Central Board of Assessment Appeals. 15

Subsequently, and as it presently reads, this provision was amended by R.A. No. 7902 effective March 18, 1995, to wit:

Sec. 9. Jurisdiction. The Court of Appeals shall exercise:

(1) Original jurisdiction to issue writs of mandamus, prohibition, certiorari, habeas corpus, and quo warranto, and auxiliary writs or processes, whether or not in aid of its appellate jurisdiction;

(2) Exclusive original jurisdiction over actions for annulment of judgments of Regional Trial Courts; and

(3) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders or awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or commissions, including the Securities and Exchange Commission, the Social Security Commission, the Employees Compensation Commission and the Civil Service Commission, except those falling within the appellate jurisdiction of the Supreme Court in accordance with the Constitution, the Labor Code of the Philippines under Presidential Decree No. 442, as amended, the provisions of this Act, and of subparagraph (1) of the third paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act of 1948.

The Court of Appeals shall have the power to try cases and conduct hearings, receive evidence and perform any and all acts necessary to resolve factual issues raised in cases falling within its original and appellate jurisdiction, including the power to grant and conduct new trials or further proceedings. Trials or hearings in the Court of Appeals must be continuous and must be completed within, three (3) months, unless extended by the Chief Justice.

It will readily be observed that, aside from the change in the name of the lower appellate court, 16 the following amendments of the original provisions of Section 9 of B.P. No. 129 were effected by R.A. No. 7902, viz.:

1. The last paragraph which excluded its application to the Labor Code of the Philippines and the Central Board of Assessment Appeals was deleted and replaced by a new paragraph granting the Court of Appeals limited powers to conduct trials and hearings in cases within its jurisdiction.

2. The reference to the Labor Code in that last paragraph was transposed to paragraph (3) of the section, such that the original exclusionary clause therein now provides "except those falling within the appellate jurisdiction of the Supreme Court in accordance with the Constitution, the Labor Code of the Philippines under Presidential Decree No. 442, as amended, the provisions of this Act, and of subparagraph (1) of the third paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act of 1948." (Emphasis supplied).

3. Contrarily, however, specifically added to and included among the quasi-judicial agencies over which the Court of Appeals shall have exclusive appellate jurisdiction are the Securities and Exchange Commission, the Social Security Commission, the Employees Compensation Commission and the Civil Service Commission.

This, then, brings us to a somewhat perplexing impass, both in point of purpose and terminology. As earlier explained, our mode of judicial review over decisions of the NLRC has for some time now been understood to be by a petition for certiorari under Rule 65 of the Rules of Court. This is, of course, a special original action limited to the resolution of jurisdictional issues, that is, lack or excess of jurisdiction and, in almost all cases that have been brought to us, grave abuse of discretion amounting to lack of jurisdiction.

It will, however, be noted that paragraph (3), Section 9 of B.P. No. 129 now grants exclusive appellate jurisdiction to the Court of Appeals over all final adjudications of the Regional Trial Courts and the quasi-judicial agencies generally or specifically referred to therein except, among others, "those falling within the appellate jurisdiction of the Supreme Court in accordance with . . . the Labor Code of the Philippines under Presidential Decree No. 442, as amended, . . . ." This would necessarily contradict what has been ruled and said all along that appeal does not lie from decisions of the NLRC. 17 Yet, under such excepting clause literally construed, the appeal from the NLRC cannot be brought to the Court of Appeals, but to this Court by necessary implication.

The same exceptive clause further confuses the situation by declaring that the Court of Appeals has no appellate jurisdiction over decisions falling within the appellate jurisdiction of the Supreme Court in accordance with the Constitution, the provisions of B.P. No. 129, and those specified cases in Section 17 of the Judiciary Act of 1948. These cases can, of course, be properly excluded from the exclusive appellate jurisdiction of the Court of Appeals. However, because of the aforementioned amendment by transposition, also supposedly excluded are cases falling within the appellate jurisdiction of the Supreme Court in accordance with the Labor Code. This is illogical and impracticable, and Congress could not have intended that procedural gaffe, since there are no cases in the Labor Code the decisions, resolutions, orders or awards wherein are within the appellate jurisdiction of the Supreme Court or of any other court for that matter.

A review of the legislative records on the antecedents of R.A. No. 7902 persuades us that there may have been an oversight in the course of the deliberations on the said Act or an imprecision in the terminology used therein. In fine, Congress did intend to provide for judicial review of the adjudications of the NLRC in labor cases by the Supreme Court, but there was an inaccuracy in the term used for the intended mode of review. This conclusion which we have reluctantly but prudently arrived at has been drawn from the considerations extant in the records of Congress, more particularly on Senate Bill No. 1495 and the Reference Committee Report on S. No. 1495/H. No. 10452. 18

In sponsoring Senate Bill No. 1495, Senator Raul S. Roco delivered his sponsorship speech 19 from which we reproduce the following excerpts:

The Judiciary Reorganization Act, Mr. President, Batas Pambansa Blg. 129, reorganized the Court of Appeals and at the same time expanded its jurisdiction and powers. Among others, its appellate jurisdiction was expanded to cover not only final judgment of Regional Trial Courts, but also all final judgment(s), decisions, resolutions, orders or awards of quasi-judicial agencies, instrumentalities, boards and commissions, except those falling within the appellate jurisdiction of the Supreme Court in accordance with the Constitution, the provisions of BP Blg. 129 and of subparagraph 1 of the third paragraph and subparagraph 4 of Section 17 of the Judiciary Act of 1948.

Mr. President, the purpose of the law is to ease the workload of the Supreme Court by the transfer of some of its burden of review of factual issues to the Court of Appeals. However, whatever benefits that can be derived from the expansion of the appellate jurisdiction of the Court of Appeals was cut short by the last paragraph of Section 9 of Batas Pambansa Blg. 129 which excludes from its coverage the "decisions and interlocutory orders issued under the Labor Code of the Philippines and by the Central Board of Assessment Appeals.

Among the highest number of cases that are brought up to the Supreme Court are labor cases. Hence, Senate Bill No. 1495 seeks to eliminate the exceptions enumerated in Section 9 and, additionally, extends the coverage of appellate review of the Court of Appeals in the decision(s) of the Securities and Exchange Commission, the Social Security Commission, and the Employees Compensation Commission to reduce the number of cases elevated to the Supreme Court. (Emphases and corrections ours)

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Senate Bill No. 1495 authored by our distinguished Colleague from Laguna provides the ideal situation of drastically reducing the workload of the Supreme Court without depriving the litigants of the privilege of review by an appellate tribunal.

In closing, allow me to quote the observations of former Chief Justice Teehankee in 1986 in the Annual Report of the Supreme Court:

. . . Amendatory legislation is suggested so as to relieve the Supreme Court of the burden of reviewing these cases which present no important issues involved beyond the particular fact and the parties involved, so that the Supreme Court may wholly devote its time to cases of public interest in the discharge of its mandated task as the guardian of the Constitution and the guarantor of the people's basic rights and additional task expressly vested on it now "to determine whether or not there has been a grave abuse of discretion amounting to lack of jurisdiction on the part of any branch or instrumentality of the Government.

We used to have 500,000 cases pending all over the land, Mr. President. It has been cut down to 300,000 cases some five years ago. I understand we are now back to 400,000 cases. Unless we distribute the work of the appellate courts, we shall continue to mount and add to the number of cases pending.

In view of the foregoing, Mr. President, and by virtue of all the reasons we have submitted, the Committee on Justice and Human Rights requests the support and collegial approval of our Chamber.

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Surprisingly, however, in a subsequent session, the following Committee Amendment was introduced by the said sponsor and the following proceedings transpired: 20

Senator Roco. On page 2, line 5, after the line "Supreme Court in accordance with the Constitution," add the phrase "THE LABOR CODE OF THE PHILIPPINES UNDER P.D. 442, AS AMENDED." So that it becomes clear, Mr. President, that issues arising from the Labor Code will still be appealable to the Supreme Court.

The President. Is there any objection? (Silence) Hearing none, the amendment is approved.

Senator Roco. On the same page, we move that lines 25 to 30 be deleted. This was also discussed with our Colleagues in the House of Representatives and as we understand it, as approved in the House, this was also deleted, Mr. President.

The President. Is there any objection? (Silence) Hearing none, the amendment is approved.

Senator Roco. There are no further Committee amendments, Mr. President.

Senator Romulo. Mr. President, I move that we close the period of Committee amendments.

The President. Is there any objection? (Silence) Hearing none, the amendment is approved. (Emphasis supplied).

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Thereafter, since there were no individual amendments, Senate Bill No. 1495 was passed on second reading and being a certified bill, its unanimous approval on third reading followed. 21 The Conference Committee Report on Senate Bill No. 1495 and House Bill No. 10452, having theretofore been approved by the House of Representatives, the same was likewise approved by the Senate on February 20, 1995, 22 inclusive of the dubious formulation on appeals to the Supreme Court earlier discussed.

The Court is, therefore, of the considered opinion that ever since appeals from the NLRC to the Supreme Court were eliminated, the legislative intendment was that the special civil action of certiorari was and still is the proper vehicle for judicial review of decisions of the NLRC. The use of the word "appeal" in relation thereto and in the instances we have noted could have been a lapsus plumae because appeals by certiorari and the original action for certiorari are both modes of judicial review addressed to the appellate courts. The important distinction between them, however, and with which the Court is particularly concerned here is that the special civil action of certiorari is within the concurrent original jurisdiction of this Court and the Court of Appeals; 23 whereas to indulge in the assumption that appeals by certiorari to the Supreme Court are allowed would not subserve, but would subvert, the intention of Congress as expressed in the sponsorship speech on Senate Bill No. 1495.

Incidentally, it was noted by the sponsor therein that some quarters were of the opinion that recourse from the NLRC to the Court of Appeals as an initial step in the process of judicial review would be circuitous and would prolong the proceedings. On the contrary, as he commendably and realistically emphasized, that procedure would be advantageous to the aggrieved party on this reasoning:

On the other hand, Mr. President, to allow these cases to be appealed to the Court of Appeals would give litigants the advantage to have all the evidence on record be reexamined and reweighed after which the findings of facts and conclusions of said bodies are correspondingly affirmed, modified or reversed.

Under such guarantee, the Supreme Court can then apply strictly the axiom that factual findings of the Court of Appeals are final and may not be reversed on appeal to the Supreme Court. A perusal of the records will reveal appeals which are factual in nature and may, therefore, be dismissed outright by minute resolutions. 24

While we do not wish to intrude into the Congressional sphere on the matter of the wisdom of a law, on this score we add the further observations that there is a growing number of labor cases being elevated to this Court which, not being a trier of fact, has at times been constrained to remand the case to the NLRC for resolution of unclear or ambiguous factual findings; that the Court of Appeals is procedurally equipped for that purpose, aside from the increased number of its component divisions; and that there is undeniably an imperative need for expeditious action on labor cases as a major aspect of constitutional protection to labor.

Therefore, all references in the amended Section 9 of B.P. No. 129 to supposed appeals from the NLRC to the Supreme Court are interpreted and hereby declared to mean and refer to petitions for certiorari under Rule 65. Consequently, all such petitions should hence forth be initially filed in the Court of Appeals in strict observance of the doctrine on the hierarchy of courts as the appropriate forum for the relief desired.

Apropos to this directive that resort to the higher courts should be made in accordance with their hierarchical order, this pronouncement in Santiago vs. Vasquez, et al. 25 should be taken into account:

One final observation. We discern in the proceedings in this case a propensity on the part of petitioner, and, for that matter, the same may be said of a number of litigants who initiate recourses before us, to disregard the hierarchy of courts in our judicial system by seeking relief directly from this Court despite the fact that the same is available in the lower courts in the exercise of their original or concurrent jurisdiction, or is even mandated by law to be sought therein. This practice must be stopped, not only because of the imposition upon the precious time of this Court but also because of the inevitable and resultant delay, intended or otherwise, in the adjudication of the case which often has to be remanded or referred to the lower court as the proper forum under the rules of procedure, or as better equipped to resolve the issues since this Court is not a trier of facts. We, therefore, reiterate the judicial policy that this Court will not entertain direct resort to it unless the redress desired cannot be obtained in the appropriate courts or where exceptional and compelling circumstances justify availment of a remedy within and calling for the exercise of our primary jurisdiction.

WHEREFORE, under the foregoing premises, the instant petition for certiorari is hereby REMANDED, and all pertinent records thereof ordered to be FORWARDED, to the Court of Appeals for appropriate action and disposition consistent with the views and ruling herein set forth, without pronouncement as to costs.

SO ORDERED.

Narvasa, C.J., Davide, Jr., Romero, Bellosillo, Melo, Puno, Vitug, Kapunan, Mendoza, Panganiban Martinez, Quisumbing and Purisima, JJ., concur.

SECOND DIVISION

G.R. No. 118216 March 9, 2000

DELTAVENTURES RESOURCES, INC., petitioner, vs.HON. FERNANDO P. CABATO, Presiding Judge Regional Trial Court, La Trinidad, Benguet, Branch 62; HON. GELACIO L. RIVERA, JR., Executive Labor Arbiter, NLRC-CAR, Baguio City, ADAM P. VENTURA, Deputy-Sheriff, NLRC-CAR, Baguio City; ALEJANDRO BERNARDINO, AUGUSTO GRANADOS, PILANDO TANGAY, NESTOR RABANG, RAY DAYAP, MYRA BAYAONA, VIOLY LIBAO, AIDA LIBAO, JESUS GATCHO and GREGORIO DULAY, respondents.

QUISUMBING, J.:

This special civil action for certiorari seeks to annual the Order dated November 7, 1994, 1 of respondent Judge Fernando P. Cabato of the Regional Trial Court of La Trinidad, Benguet, Branch 62, in Civil Cas