SECOND DIVISION
LEPANTO CERAMICS, INC., Petitioner,
- versus -
LEPANTO CERAMICS EMPLOYEES ASSOCIATION, Respondent.
G.R. No. 180866
Present:
CARPIO, J., Chairperson,BRION,DEL CASTILLO, ABAD, andPEREZ,
JJ.
Promulgated:
March 2, 2010
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D E C I S I O N
PEREZ, J.:
Before this Court is a Petition for Review on Certiorari under
Rule 45[footnoteRef:2] of the 1997 Rules of Civil Procedure filed
by petitioner Lepanto Ceramics, Inc. (petitioner), assailing the:
(1) Decision[footnoteRef:3] of the Court of Appeals, dated 5 April
2006, in CA-G.R. SP No. 78334 which affirmed in toto the decision
of the Voluntary Arbitrator[footnoteRef:4] granting the members of
the respondent association a Christmas Bonus in the amount of Three
Thousand Pesos (P3,000.00), or the balance of Two Thousand Four
Hundred Pesos (P2,400.00) for the year 2002, and the (2)
Resolution[footnoteRef:5] of the same court dated 13 December 2007
denying Petitioners Motion for Reconsideration. [2: Appeal by
Certiorari to the Supreme Court.] [3: Penned by Associate Justice
Josefina Guevara-Salonga, with Associate Justices Fernanda Lampas
Peralta and Sesinando E. Villon concurring. Rollo, pp. 10-19. ] [4:
Penned by Voluntary Arbitrator Lydia A. Navarro. Id. at 167-169. ]
[5: Id. at 30.]
The facts are:
Petitioner Lepanto Ceramics, Incorporated is a duly organized
corporation existing and operating by virtue of Philippine Laws.
Its business is primarily to manufacture, make, buy and sell, on
wholesale basis, among others, tiles, marbles, mosaics and other
similar products.[footnoteRef:6] [6: CA rollo, p. 36.]
Respondent Lepanto Ceramics Employees Association (respondent
Association) is a legitimate labor organization duly registered
with the Department of Labor and Employment. It is the sole and
exclusive bargaining agent in the establishment of
petitioner.[footnoteRef:7] [7: Id. at 39.]
In December 1998, petitioner gave a P3,000.00 bonus to its
employees, members of the respondent Association.[footnoteRef:8]
[8: Id. at 42.]
Subsequently, in September 1999, petitioner and respondent
Association entered into a Collective Bargaining Agreement (CBA)
which provides for, among others, the grant of a Christmas gift
package/bonus to the members of the respondent
Association.[footnoteRef:9] The Christmas bonus was one of the
enumerated existing benefit, practice of traditional rights which
shall remain in full force and effect. [9: Records, p. 7.]
The text reads:Section 8. All other existing benefits, practice
of traditional rights consisting of Christmas Gift package/bonus,
reimbursement of transportation expenses in case of breakdown of
service vehicle and medical services and safety devices by virtue
of company policies by the UNION and employees shall remain in full
force and effect.
Section 1. EFFECTIVITY
This agreement shall become effective on September 1, 1999 and
shall remain in full force and effect without change for a period
of four (4) years or up to August 31, 2004 except as to the
representation aspect which shall be effective for a period of five
(5) years. It shall bind each and every employee in the bargaining
unit including the present and future officers of the Union.
In the succeeding years, 1999, 2000 and 2001, the bonus was not
in cash. Instead, petitioner gave each of the members of respondent
Association Tile Redemption Certificates equivalent to
P3,000.00.[footnoteRef:10] The bonus for the year 2002 is the root
of the present dispute. Petitioner gave a year-end cash benefit of
Six Hundred Pesos (P600.00) and offered a cash advance to
interested employees equivalent to one (1) month salary payable in
one year.[footnoteRef:11] The respondent Association objected to
the P600.00 cash benefit and argued that this was in violation of
the CBA it executed with the petitioner. [10: Rollo, pp. 43-44. ]
[11: Id. at 45. ]
The parties failed to amicably settle the dispute. The
respondent Association filed a Notice of Strike with the National
Conciliation Mediation Board, Regional Branch No. IV, alleging the
violation of the CBA. The case was placed under preventive
mediation. The efforts to conciliate failed. The case was then
referred to the Voluntary Arbitrator for resolution where the
Complaint was docketed as Case No. LAG-PM-12-095-02.
In support of its claim, respondent Association insisted that it
has been the traditional practice of the company to grant its
members Christmas bonuses during the end of the calendar year, each
in the amount of P3,000.00 as an expression of gratitude to the
employees for their participation in the companys continued
existence in the market. The bonus was either in cash or in the
form of company tiles. In 2002, in a speech during the Christmas
celebration, one of the companys top executives assured the
employees of said bonus. However, the Human Resources Development
Manager informed them that the traditional bonus would not be given
as the companys earnings were intended for the payment of its bank
loans. Respondent Association argued that this was in violation of
their CBA.
The petitioner averred that the complaint for nonpayment of the
2002 Christmas bonus had no basis as the same was not a demandable
and enforceable obligation. It argued that the giving of extra
compensation was based on the companys available resources for a
given year and the workers are not entitled to a bonus if the
company does not make profits. Petitioner adverted to the fact that
it was debt-ridden having incurred net losses for the years 2001
and 2002 totaling to P1.5 billion; and since 1999, when the CBA was
signed, the companys accumulated losses amounted to over P2.7
billion. Petitioner further argued that the grant of a one (1)
month salary cash advance was not meant to take the place of a
bonus but was meant to show the companys sincere desire to help its
employees despite its precarious financial condition. Petitioner
also averred that the CBA provision on a Christmas gift/bonus
refers to alternative benefits. Finally, petitioner emphasized that
even if the CBA contained an unconditional obligation to grant the
bonus to the respondent Association, the present difficult economic
times had already legally released it therefrom pursuant to Article
1267 of the Civil Code.[footnoteRef:12] [12: Article 1267. When the
service has become so difficult as to be manifestly beyond the
contemplation of the parties, the obligor may also be released
therefrom, in whole or in part.]
The Voluntary Arbitrator rendered a Decision dated 2 June 2003,
declaring that petitioner is bound to grant each of its workers a
Christmas bonus of P3,000.00 for the reason that the bonus was
given prior to the effectivity of the CBA between the parties and
that the financial losses of the company is not a sufficient reason
to exempt it from granting the same. It stressed that the CBA is a
binding contract and constitutes the law between the parties. The
Voluntary Arbitrator further expounded that since the employees had
already been given P600.00 cash bonus, the same should be deducted
from the claimed amount of P3,000.00, thus leaving a balance of
P2,400.00. The dispositive portion of the decision states, viz:
Wherefore, in view of the foregoing respondent LCI is hereby
ordered to pay the members of the complainant union LCEA their
respective Christmas bonus in the amount of three thousand
(P3,000.00) pesos for the year 2002 less the P600.00 already given
or a balance of P2,400.00.[footnoteRef:13] [13: Rollo, p. 169.]
Petitioner sought reconsideration but the same was denied by the
Voluntary Arbitrator in an Order dated 27 June 2003, in this
wise:
The Motion for Reconsideration filed by the respondent in the
above-entitled case which was received by the Undersigned on June
26, 2003 is hereby denied pursuant to Section 7 Rule XIX on
Grievance Machinery and Voluntary Arbitration; Amending The
Implementing Rules of Book V of the Labor Code of the Philippines;
to wit:
Section 7. Finality of Award/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 the copy of the award or decision by
the parties and it shall not be subject of a motion for
reconsideration.[footnoteRef:14] [14: Id. at 170. ]
Petitioner elevated the case to the Court of Appeals via a
Petition for Certiorari under Rule 65 of the Rules of Court
docketed as CA-G.R. SP No. 78334.[footnoteRef:15] As adverted to
earlier, the Court of Appeals affirmed in toto the decision of the
Voluntary Arbitrator. The appellate court also denied petitioners
motion for reconsideration. [15: The Court of Appeals gave due
course to the Petition although the proper remedy should have been
a Petition for Review under Rule 43 of the 1997 Rules of Civil
Procedure.Rule 43. Appeals From the Court of Tax Appeals and
Quasi-Judicial Agencies to the Court of Appeals.Section 1. Scope.
This Rule shall apply to appeals from judgments or final orders of
the Court of Tax Appeals and from awards, judgments, final orders
or resolutions of or authorized by any quasi-judicial agency in the
exercise of its quasi-judicial functions. Among these agencies are
x x x, and voluntary arbitrators authorized by law. ]
In affirming respondent Associations right to the Christmas
bonus, the Court of Appeals held:
In the case at bar, it is indubitable that petitioner offered
private respondent a Christmas bonus/gift in 1998 or before the
execution of the 1999 CBA which incorporated the said benefit as a
traditional right of the employees. Hence, the grant of said bonus
to private respondent can be deemed a practice as the same has not
been given only in the 1999 CBA. Apparently, this is the reason why
petitioner specifically recognized the grant of a Christmas
bonus/gift as a practice or tradition as stated in the CBA. x x
x.
x x x x
Evidently, the argument of petitioner that the giving of a
Christmas bonus is a management prerogative holds no water. There
were no conditions specified in the CBA for the grant of said
benefit contrary to the claim of petitioner that the same is
justified only when there are profits earned by the company. As can
be gleaned from the CBA, the payment of Christmas bonus was not
contingent upon the realization of profits. It does not state that
if the company derives no profits, there are no bonuses to be given
to the employees. In fine, the payment thereof was not related to
the profitability of business operations.
Moreover, it is undisputed that petitioner, aside from giving
the mandated 13th month pay, has further been giving its employees
an additional Christmas bonus at the end of the year since 1998 or
before the effectivity of the CBA in September 1999. Clearly, the
grant of Christmas bonus from 1998 up to 2001, which brought about
the filing of the complaint for alleged non-payment of the 2002
Christmas bonus does not involve the exercise of management
prerogative as the same was given continuously on or about
Christmas time pursuant to the CBA. Consequently, the giving of
said bonus can no longer be withdrawn by the petitioner as this
would amount to a diminution of the employees existing
benefits.[footnoteRef:16] [16: Id. at 16-17. ]
Not to be dissuaded, petitioner is now before this Court. The
only issue before us is whether or not the Court of Appeals erred
in affirming the ruling of the voluntary arbitrator that the
petitioner is obliged to give the members of the respondent
Association a Christmas bonus in the amount of P3,000.00 in
2002.[footnoteRef:17] [17: Id. at 9.]
We uphold the rulings of the voluntary arbitrator and of the
Court of Appeals. Findings of labor officials, who are deemed to
have acquired expertise in matters within their respective
jurisdictions, are generally accorded not only respect but even
finality, and bind us when supported by substantial evidence. This
is the rule particularly where the findings of both the arbitrator
and the Court of Appeals coincide.[footnoteRef:18] [18: Philippine
Airlines, Inc. v. Philippine Airlines Employees Association
(PALEA), G.R. No. 142399, 12 March 2008, 548 SCRA 117, 129 citing
Stamford Marketing Corporation v. Julian, 468 Phil. 34, 55 (2004).
]
As a 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 in so far as it draws its essence from the
CBA.[footnoteRef:19] That was done in this case. [19: United
Kimberly-Clark Employees Union-Philippine Transport General Workers
Organization v. Kimberly-Clark Philippines, Inc., G.R. No. 162957,
6 March 2006, 484 SCRA 187, 200.]
By definition, a bonus is a gratuity or act of liberality of the
giver. It is something given in addition to what is ordinarily
received by or strictly due the recipient. A bonus is granted and
paid to an employee for his industry and loyalty which contributed
to the success of the employers business and made possible the
realization of profits.[footnoteRef:20] [20: Protacio v. Laya
Mananghaya and Co., G.R. No. 168654, 25 March 2009.]
A bonus is also granted by an enlightened employer to spur the
employee to greater efforts for the success of the business and
realization of bigger profits.[footnoteRef:21] [21: Philippine
Airlines, Inc. v. Philippine Airlines Employees Association
(PALEA), supra note 16 at 133 citing Philippine Education Co., Inc.
(PECO) v. Court of Industrial Relations, 92 Phil. 381, 385
(1952).]
Generally, a bonus is not a demandable and enforceable
obligation. For a bonus to be enforceable, it must have been
promised by the employer and expressly agreed upon by the
parties.[footnoteRef:22] Given that the bonus in this case is
integrated in the CBA, the same partakes the nature of a demandable
obligation. Verily, by virtue of its incorporation in the CBA, the
Christmas bonus due to respondent Association has become more than
just an act of generosity on the part of the petitioner but a
contractual obligation it has undertaken.[footnoteRef:23] [22:
American Wire and Cable Daily Rated Employees Union v. American
Wire and Cable, 497 Phil. 213, 224 (2005).] [23: Philippine
Airlines, Inc. v Philippine Airlines Employees Association (PALEA),
supra note 16 at 133.]
A CBA refers to a negotiated contract between a legitimate labor
organization and the employer, concerning wages, hours of work and
all other terms and conditions of employment in a bargaining unit.
As in all other contracts, the parties to a CBA may establish such
stipulations, clauses, terms and conditions as they may deem
convenient, provided these are not contrary to law, morals, good
customs, public order or public policy.[footnoteRef:24] [24: Honda
Philippines, Inc. v. Samahan ng Malayang Manggagawa sa Honda, G.R.
No. 145561, 15 June 2005, 460 SCRA 186,190.]
It is a familiar and fundamental doctrine in labor law that the
CBA is the law between the parties and they are obliged to comply
with its provisions.[footnoteRef:25] This principle stands strong
and true in the case at bar. [25: University of San Agustin v.
University of San Agustin Employees Union, G.R. No. 177594, 23 July
2009; HFJ Philippines, Inc. v. Pilar, G.R. No. 168716, 16 April
2009.]
A reading of the provision of the CBA reveals that the same
provides for the giving of a Christmas gift package/bonus without
qualification. Terse and clear, the said provision did not state
that the Christmas package shall be made to depend on the
petitioners financial standing. The records are also bereft of any
showing that the petitioner made it clear during CBA negotiations
that the bonus was dependent on any condition. Indeed, if the
petitioner and respondent Association intended that the P3,000.00
bonus would be dependent on the company earnings, such intention
should have been expressed in the CBA.
It is noteworthy that in petitioners 1998 and 1999 Financial
Statements, it took note that the 1997 financial crisis in the
Asian region adversely affected the Philippine
economy.[footnoteRef:26] [26: Said Financial Statements further
noted that The Asian Crisis led to a volatile foreign exchange and
interest rates. During the first half of 1999, the situation has
improved with the peso moving in a relatively narrow range of $38
to $40 against the US dollar between 31 December 1998 and 30
September 1999 x x x. Records, p. 215.]
From the foregoing, petitioner cannot insist on business losses
as a basis for disregarding its undertaking. It is manifestly clear
that petitioner was very much aware of the imminence and
possibility of business losses owing to the 1997 financial crisis.
In 1998, petitioner suffered a net loss of
P14,347,548.00.[footnoteRef:27] Yet it gave a P3,000.00 bonus to
the members of the respondent Association. In 1999, when
petitioners very own financial statement reflected that the
positive developments in the economy have yet to favorably affect
the operations of the company,[footnoteRef:28] and reported a loss
of P346,025,733.00,[footnoteRef:29] it entered into the CBA with
the respondent Association whereby it contracted to grant a
Christmas gift package/bonus to the latter. Petitioner supposedly
continued to incur losses in the years 2000[footnoteRef:30] and
2001. Still and all, this did not deter it from honoring the CBA
provision on Christmas bonus as it continued to give P3,000.00 each
to the members of the respondent Association in the years 1999,
2000 and 2001. [27: Id. at 218. ] [28: Id. at 215.] [29: Id. at
218.] [30: Petitioners financial statement states that in year 2000
it incurred a net loss of P865,137,705.00 and P958,602,659.00 in
the year 2001.]
All given, business losses are a feeble ground for petitioner to
repudiate its obligation under the CBA. The rule is settled that
any benefit and supplement being enjoyed by the employees cannot be
reduced, diminished, discontinued or eliminated by the employer.
The principle of non-diminution of benefits is founded on the
constitutional mandate to protect the rights of workers and to
promote their welfare and to afford labor full
protection.[footnoteRef:31] [31: Arco Metal Products, Co., Inc. v.
Samahan ng Mga Mangagagawa sa Arco Metal-NAFLU (SAMARM-NAFLU), G.R.
No. 170734, 14 May 2008, 554 SCRA 110, 118-119.]
Hence, absent any proof that petitioners consent was vitiated by
fraud, mistake or duress, it is presumed that it entered into the
CBA voluntarily and had full knowledge of the contents thereof and
was aware of its commitments under the contract.
The Court is fully aware that implementation to the letter of
the subject CBA provision may further deplete petitioners
resources. Petitioners remedy though lies not in the Courts
invalidation of the provision but in the parties clarification of
the same in subsequent CBA negotiations. Article 253 of the Labor
Code is relekvant:Art. 253. Duty to bargain collectively when there
exists a collective bargaining agreement. - When there is a
collective bargaining agreement, the duty to bargain collectively
shall also mean that neither party shall terminate nor modify such
agreement during its lifetime. However, either party can serve a
written notice to terminate or modify the agreement at least sixty
(60) days prior to its expiration date. It shall be the duty of
both parties to keep the status quo and to continue in full force
and effect the terms and conditions of the existing agreement
during the sixty (60)-day period and/or until a new agreement is
reached by the parties.
WHEREFORE, Premises considered, the petition is DENIED for lack
of merit. The Decision of the Court of Appeals dated 5 April 2006
and the Resolution of the same court dated 13 December 2007 in
CA-G.R. SP No. 78334 are AFFIRMED.
SO ORDERED.
Republic of the PhilippinesSupreme CourtManila
FIRST DIVISION
RENATO REAL,G.R. No. 168757
Petitioner,
Present:
CORONA, C. J., Chairperson,
- versus-VELASCO, JR.,
LEONARDO-DE CASTRO,
DEL CASTILLO, and
PEREZ, JJ.
SANGU PHILIPPINES, INC. and/ or KIICHI ABE,Promulgated:
Respondents.January 19, 2011
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D E C I S I O N
DEL CASTILLO, J.:
The perennial question of whether a complaint for illegal
dismissal is intra-corporate and thus beyond the jurisdiction of
the Labor Arbiter is the core issue up for consideration in this
case.
This Petition for Review on Certiorari assails the
Decision[footnoteRef:32] dated June 28, 2005 of the Court of
Appeals (CA) in CA-G.R. SP. No. 86017 which dismissed the petition
for certiorari filed before it. [32: CA rollo, pp. 370-394; penned
by Associate Justice Perlita J. Tria Tirona and concurred in by
Associate Justices Delilah Vidallon-Magtolis and Jose C. Reyes,
Jr.]
Factual Antecedents
Petitioner Renato Real was the Manager of respondent corporation
Sangu Philippines, Inc., a corporation engaged in the business of
providing manpower for general services, like janitors, janitresses
and other maintenance personnel, to various clients. In 2001,
petitioner, together with 29 others who were either janitors,
janitresses, leadmen and maintenance men, all employed by
respondent corporation, filed their respective
Complaints[footnoteRef:33] for illegal dismissal against the latter
and respondent Kiichi Abe, the corporations Vice-President and
General Manager. These complaints were later on consolidated. [33:
Id. at 51-71.]
With regard to petitioner, he was removed from his position as
Manager through Board Resolution 2001-03[footnoteRef:34] adopted by
respondent corporations Board of Directors. Petitioner complained
that he was neither notified of the Board Meeting during which said
board resolution was passed nor formally charged with any
infraction. He just received from respondents a
letter[footnoteRef:35] dated March 26, 2001 stating that he has
been terminated from service effective March 25, 2001 for the
following reasons: (1) continuous absences at his post at Ogino
Philippines Inc. for several months which was detrimental to the
corporations operation; (2) loss of trust and confidence; and, (3)
to cut down operational expenses to reduce further losses being
experienced by respondent corporation. [34: Id. at 115-116.] [35:
Id. at 117.]
Respondents, on the other hand, refuted petitioners claim of
illegal dismissal by alleging that after petitioner was appointed
Manager, he committed gross acts of misconduct detrimental to the
company since 2000. According to them, petitioner would almost
always absent himself from work without informing the corporation
of his whereabouts and that he would come to the office only to
collect his salaries. As he was almost always absent, petitioner
neglected to supervise the employees resulting in complaints from
various clients about employees performance. In one instance,
petitioner together with a few others, while apparently drunk, went
to the premises of one of respondents clients, Epson Precision
(Phils.) Inc., and engaged in a heated argument with the employees
therein. Because of this, respondent Abe allegedly received a
complaint from Epsons Personnel Manager concerning petitioners
conduct. Respondents likewise averred that petitioner established a
company engaged in the same business as respondent corporations and
even submitted proposals for janitorial services to two of the
latters clients. Because of all these, the Board of Directors of
respondent corporation met on March 24, 2001 and adopted Board
Resolution No. 2001-03 removing petition ner as Manager. Petitioner
was thereafter informed of his removal through a letter dated March
26, 2001 which he, however, refused to receive.
Further, in what respondents believed to be an act of
retaliation, petitioner allegedly encouraged the employees who had
been placed in the manpower pool to file a complaint for illegal
dismissal against respondents. Worse, he later incited those
assigned in Epson Precision (Phils.) Inc., Ogino Philippines
Corporation, Hitachi Cable Philippines Inc. and Philippine TRC Inc.
to stage a strike on April 10 to 16, 2001. Not satisfied,
petitioner together with other employees also barricaded the
premises of respondent corporation. Such acts respondents posited
constitute just cause for petitioners dismissal and that same was
validly effected.
Rulings of the Labor Arbiter and the National Labor Relations
Commission
The Labor Arbiter in a Decision[footnoteRef:36] dated June 5,
2003 declared petitioner and his co-complainants as having been
illegally dismissed and ordered respondents to reinstate
complainants to their former positions without loss of seniority
rights and other privileges and to pay their full backwages from
the time of their dismissal until actually reinstated and
furthermore, to pay them attorneys fees. The Labor Arbiter found no
convincing proof of the causes for which petitioner was terminated
and noted that there was complete absence of due process in the
manner of his termination. [36: Id. at 162-181.]
Respondents thus appealed to the National Labor Relations
Commission (NLRC) and raised therein as one of the issues the lack
of jurisdiction of the Labor Arbiter over petitioners complaint.
Respondents claimed that petitioner is both a stockholder and a
corporate officer of respondent corporation, hence, his action
against respondents is an intra-corporate controversy over which
the Labor Arbiter has no jurisdiction.
The NLRC found such contention of respondents to be meritorious.
Aside from petitioners own admission in the pleadings that he is a
stockholder and at the same time occupying a managerial position,
the NLRC also gave weight to the corporations General Information
Sheet[footnoteRef:37] (GIS) dated October 27, 1999 listing
petitioner as one of its stockholders, consequently his termination
had to be effected through a board resolution. These, the NLRC
opined, clearly established petitioners status as a stockholder and
as a corporate officer and hence, his action against respondent
corporation is an intra-corporate controversy over which the Labor
Arbiter has no jurisdiction. As to the other complainants, the NLRC
ruled that there was no dismissal. The NLRC however, modified the
appealed decision of the Labor Arbiter in a
Decision[footnoteRef:38] dated February 13, 2004, the dispositive
portion of which reads: [37: Id. at 237-240.] [38: Id. at 32-46.
]
WHEREFORE, all foregoing premises considered, the appealed
Decision dated June 5, 2003 is hereby MODIFIED. Accordingly,
judgment is hereby rendered DISMISSING the complaint of Renato Real
for lack of jurisdiction. As to the rest of the complainants, they
are hereby ordered to immediately report back to work but without
the payment of backwages.
All other claims against respondents including attorneys fees
are DISMISSED for lack of merit.
SO ORDERED.
Still joined by his co-complainants, petitioner brought the case
to the CA by way of petition for certiorari.Ruling of the Court of
Appeals
Before the CA, petitioner imputed upon the NLRC grave abuse of
discretion amounting to lack or excess of jurisdiction in declaring
him a corporate officer and in holding that his action against
respondents is an intra-corporate controversy and thus beyond the
jurisdiction of the Labor Arbiter.
While admitting that he is indeed a stockholder of respondent
corporation, petitioner nevertheless disputed the declaration of
the NLRC that he is a corporate officer thereof. He posited that
his being a stockholder and his being a managerial employee do not
ipso facto confer upon him the status of a corporate officer. To
support this contention, petitioner called the CAs attention to the
same GIS relied upon by the NLRC when it declared him to be a
corporate officer. He pointed out that although said information
sheet clearly indicates that he is a stockholder of respondent
corporation, he is not an officer thereof as shown by the entry N/A
or not applicable opposite his name in the officer column. Said
column requires that the particular position be indicated if the
person is an officer and if not, the entry N/A. Petitioner further
argued that the fact that his dismissal was effected through a
board resolution does not likewise mean that he is a corporate
officer. Otherwise, all that an employer has to do in order to
avoid compliance with the requisites of a valid dismissal under the
Labor Code is to dismiss a managerial employee through a board
resolution. Moreover, he insisted that his action for illegal
dismissal is not an intra-corporate controversy as same stemmed
from employee-employer relationship which is well within the
jurisdiction of the Labor Arbiter. This can be deduced and is
bolstered by the last paragraph of the termination letter sent to
him by respondents stating that he is entitled to benefits under
the Labor Code, to wit:
In this connection (his dismissal) you are entitled to
separation pay and other benefits provided for under the Labor Code
of the Philippines.[footnoteRef:39] (Emphasis supplied) [39: Id. at
117.]
In contrast, respondents stood firm that the action against them
is an intra-corporate controversy. It cited Tabang v. National
Labor Relations Commission[footnoteRef:40] wherein this Court
declared that an intra-corporate controversy is one which arises
between a stockholder and the corporation; that [t]here is no
distinction, qualification, nor any exemption whatsoever; and that
it is broad and covers all kinds of controversies between
stockholders and corporations. In view of this ruling and since
petitioner is undisputedly a stockholder of the corporation,
respondents contended that the action instituted by petitioner
against them is an intra-corporate controversy cognizable only by
the appropriate regional trial court. Hence, the NLRC correctly
dismissed petitioners complaint for lack of jurisdiction. [40: 334
Phil.424, 430 (1997).]
In the assailed Decision[footnoteRef:41] dated June 28, 2005,
the CA sided with respondents and affirmed the NLRCs finding that
aside from being a stockholder of respondent corporation,
petitioner is also a corporate officer thereof and consequently,
his complaint is an intra-corporate controversy over which the
labor arbiter has no jurisdiction. Said court opined that if it was
true that petitioner is a mere employee, the respondent corporation
would not have called a board meeting to pass a resolution for
petitioners dismissal considering that it was very tedious for the
Board of Directors to convene and to adopt a resolution every time
they decide to dismiss their managerial employees. To support its
finding, the CA likewise cited Tabang. As to petitioners
co-complainants, the CA likewise affirmed the NLRCS finding that
they were never dismissed from the service. The dispositive portion
of the CA Decision reads: [41: CA rollo, pp. 370-394.]
WHEREFORE, the instant petition is hereby DISMISSED.
Accordingly, the assailed decision and resolution of the public
respondent National Labor Relations Commission in NLRC NCR CA No.
036128-03 NLRC
SRAB-IV-05-6618-01-B/05-6619-02-B/05-6620-02-B/10-6637-01-B/10-6833-01-B,
STANDS.
SO ORDERED.Now alone but still undeterred, petitioner elevated
the case to us through this Petition for Review on Certiorari.
The Parties Arguments
Petitioner continues to insist that he is not a corporate
officer. He argues that a corporate officer is one who holds an
elective position as provided in the Articles of Incorporation or
one who is appointed to such other positions by the Board of
Directors as specifically authorized by its By-Laws. And, since he
was neither elected nor is there any showing that he was appointed
by the Board of Directors to his position as Manager, petitioner
maintains that he is not a corporate officer contrary to the
findings of the NLRC and the CA.
Petitioner likewise contends that his complaint for illegal
dismissal against respondents is not an intra-corporate
controversy. He avers that for an action or suit between a
stockholder and a corporation to be considered an intra-corporate
controversy, same must arise from intra-corporate relations, i.e.,
an action involving the status of a stockholder as such. He
believes that his action against the respondents does not arise
from intra-corporate relations but rather from employer-employee
relations. This, according to him, was even impliedly recognized by
respondents as shown by the earlier quoted portion of the
termination letter they sent to him.
For their part, respondents posit that what petitioner is
essentially assailing before this Court is the finding of the NLRC
and the CA that he is a corporate officer of respondent
corporation. To the respondents, the question of whether petitioner
is a corporate officer is a question of fact which, as held in a
long line of jurisprudence, cannot be the subject of review under
this Petition for Review on Certiorari. At any rate, respondents
insist that petitioner who is undisputedly a stockholder of
respondent corporation is likewise a corporate officer and that his
action against them is an intra-corporate dispute beyond the
jurisdiction of the labor tribunals. To support this, they cited
several jurisprudence such as Pearson & George (S.E. Asia),
Inc. v. National Labor Relations Commission,[footnoteRef:42]
Philippine School of Business Administration v.
Leano,[footnoteRef:43] Fortune Cement Corporation v. National Labor
Relations Commission[footnoteRef:44] and again, Tabang v. National
Labor Relations Commission.[footnoteRef:45] [42: 323 Phil. 166
(1996).] [43: 212 Phil. 716 (1984).] [44: G.R. No. 79762, January
24, 1991, 193 SCRA 258.] [45: Supra note 9.]
Moreover, in an attempt to demolish petitioners claim that the
present controversy concerns employer-employee relations,
respondents enumerated the following facts and circumstances: (1)
Petitioner was an incorporator, stockholder and manager of
respondent company; (2) As an incorporator, he was one of only
seven incorporators of respondent corporation and one of only four
Filipino members of the Board of Directors; (3) As stockholder, he
has One Thousand (1,000) of the Ten Thousand Eight Hundred (10,800)
common shares held by Filipino stockholders, with a par-value of
One Hundred Thousand Pesos (P100,000.00); (4) His appointment as
manager was by virtue of Section 1, Article IV of respondent
corporations By-Laws; (5) As manager, he had direct management and
authority over all of respondent corporations skilled employees;
(6) Petitioner has shown himself to be an incompetent manager,
unable to properly supervise the employees and even causing
friction with the corporations clients by engaging in unruly
behavior while in clients premises; (7) As if his incompetence was
not enough, in a blatant and palpable act of disloyalty, he
established another company engaged in the same line of business as
respondent corporation; (8) Because of these acts of incompetence
and disloyalty, respondent corporation through a Resolution adopted
by its Board of Directors was finally constrained to remove
petitioner as Manager and declare his office vacant; (9) After his
removal, petitioner urged the employees under him to stage an
unlawful strike by leading them to believe that they have been
illegally dismissed from employment.[footnoteRef:46] Apparently,
respondents intended to show from this enumeration that petitioners
removal pertains to his relationship with respondent corporation,
that is, his utter failure to advance its interest and the
prejudice caused by his acts of disloyalty. For this reason,
respondents see the action against them not as a case between an
employer and an employee as what petitioner alleges, but one by an
officer and at same time a major stockholder seeking to be
reinstated to his former office against the corporation that
declared his position vacant. [46: Respondents Comment/Opposition
(To the Petition for Review), rollo, pp. 89-100.]
Finally, respondents state that the fact that petitioner is
being given benefits under the Labor Code as stated in his
termination letter does not mean that they are recognizing the
employer-employee relations between them. They explain that the
benefits provided under the Labor Code were merely made by
respondent corporation as the basis in determining petitioners
compensation package and that same are merely part of the
perquisites of petitioners office as a director and manager. It
does not and it cannot change the intra-corporate nature of the
controversy. Hence, respondents pray that this petition be
dismissed for lack of merit.
Issues
From the foregoing and as earlier mentioned, the core issue to
be resolved in this case is whether petitioners complaint for
illegal dismissal constitutes an intra-corporate controversy and
thus, beyond the jurisdiction of the Labor Arbiter.
Our Ruling
Two-tier test in determining the existence of intra-corporate
controversy
Respondents strongly rely on this Courts pronouncement in the
1997 case of Tabang v. National Labor Relations Commission, to
wit:
[A]n intra-corporate controversy is one which arises between a
stockholder and the corporation. There is no distinction,
qualification nor any exemption whatsoever. The provision is broad
and covers all kinds of controversies between stockholders and
corporations.[footnoteRef:47] [47: Supra note 9 at 430.]
In view of this, respondents contend that even if petitioner
challenges his being a corporate officer, the present case still
constitutes an intra-corporate controversy as petitioner is
undisputedly a stockholder and a director of respondent
corporation.
It is worthy to note, however, that before the promulgation of
the Tabang case, the Court provided in Mainland Construction Co.,
Inc. v. Movilla[footnoteRef:48] a better policy in determining
which between the Securities and Exchange Commission (SEC) and the
Labor Arbiter has jurisdiction over termination
disputes,[footnoteRef:49] or similarly, whether they are
intra-corporate or not, viz: [48: 320 Phil. 353, 359-360 (1995).]
[49: See C.A. Azucena Jr.s The Labor Code With Comments and Cases,
Volume II, 6th Edition (2007) pp. 46-49.]
The fact that the parties involved in the controversy are all
stockholders or that the parties involved are the stockholders and
the corporation does not necessarily place the dispute within the
ambit of the jurisdiction of the SEC (now the Regional Trial
Court[footnoteRef:50]). The better policy to be followed in
determining jurisdiction over a case should be to consider
concurrent factors such as the status or relationship of the
parties or the nature of the question that is subject of their
controversy. In the absence of any one of these factors, the SEC
will not have jurisdiction. Furthermore, it does not necessarily
follow that every conflict between the corporation and its
stockholders would involve such corporate matters as only SEC (now
the Regional Trial Court[footnoteRef:51]) can resolve in the
exercise of its adjudicatory or quasi-judicial powers. (Emphasis
ours) [50: Pursuant to Section 5.2 of Republic Act No. 8799
otherwise known as The Securities Regulation Code.] [51: Id. ]
And, while Tabang was promulgated later than Mainland
Construction Co., Inc., the better policy enunciated in the latter
appears to have developed into a standard approach in classifying
what constitutes an intra-corporate controversy. This is explained
lengthily in Reyes v. Regional Trial Court of Makati, Br.
142,[footnoteRef:52] to wit: [52: G.R. No. 165744, August 11, 2008,
561 SCRA 593, 609-612.]
Intra-Corporate Controversy
A review of relevant jurisprudence shows a development in the
Courts approach in classifying what constitutes an intra-corporate
controversy. Initially, the main consideration in determining
whether a dispute constitutes an intra-corporate controversy was
limited to a consideration of the intra-corporate relationship
existing between or among the parties. The types of relationships
embraced under Section 5(b) x x x were as follows:
1. between the corporation, partnership or association and the
public;1. between the corporation, partnership or association and
its stockholders, partners, members or officers;1. between the
corporation, partnership or association and the State as far as its
franchise, permit or license to operate is concerned; and1. among
the stockholders, partners or associates themselves.
The existence of any of the above intra-corporate relations was
sufficient to confer jurisdiction to the SEC (now the RTC),
regardless of the subject matter of the dispute. This came to be
known as the relationship test.
However, in the 1984 case of DMRC Enterprises v. Esta del Sol
Mountain Reserve, Inc., the Court introduced the nature of the
controversy test. We declared in this case that it is not the mere
existence of an intra-corporate relationship that gives rise to an
intra-corporate controversy; to rely on the relationship test alone
will divest the regular courts of their jurisdiction for the sole
reason that the dispute involves a corporation, its directors,
officers, or stockholders. We saw that there is no legal sense in
disregarding or minimizing the value of the nature of the
transactions which gives rise to the dispute.
Under the nature of the controversy test, the incidents of that
relationship must also be considered for the purpose of
ascertaining whether the controversy itself is intra-corporate. The
controversy must not only be rooted in the existence of an
intra-corporate relationship, but must as well pertain to the
enforcement of the parties correlative rights and obligations under
the Corporation Code and the internal and intra-corporate
regulatory rules of the corporation. If the relationship and its
incidents are merely incidental to the controversy or if there will
still be conflict even if the relationship does not exist, then no
intra-corporate controversy exists.
The Court then combined the two tests and declared that
jurisdiction should be determined by considering not only the
status or relationship of the parties, but also the nature of the
question under controversy. This two-tier test was adopted in the
recent case of Speed Distribution Inc. v. Court of Appeals:
To determine whether a case involves an intra-corporate
controversy, and is to be heard and decided by the branches of the
RTC specifically designated by the Court to try and decide such
cases, two elements must concur: (a) the status or relationship of
the parties, and (2) the nature of the question that is the subject
of their controversy.
The first element requires that the controversy must arise out
of intra-corporate or partnership relations between any or all of
the parties and the corporation, partnership, or association of
which they are not stockholders, members or associates, between any
or all of them and the corporation, partnership or association of
which they are stockholders, members or associates, respectively;
and between such corporation, partnership, or association and the
State insofar as it concerns the individual franchises. The second
element requires that the dispute among the parties be
intrinsically connected with the regulation of the corporation. If
the nature of the controversy involves matters that are purely
civil in character, necessarily, the case does not involve an
intra-corporate controversy. [Citations omitted.]
Guided by this recent jurisprudence, we thus find no merit in
respondents contention that the fact alone that petitioner is a
stockholder and director of respondent corporation automatically
classifies this case as an intra-corporate controversy. To
reiterate, not all conflicts between the stockholders and the
corporation are classified as intra-corporate. There are other
factors to consider in determining whether the dispute involves
corporate matters as to consider them as intra-corporate
controversies.
What then is the nature of petitioners Complaint for Illegal
Dismissal? Is it intra-corporate and thus beyond the jurisdiction
of the Labor Arbiter? We shall answer this question by using the
standards set forth in the Reyes case.
No intra-corporate relationship between the parties
As earlier stated, petitioners status as a stockholder and
director of respondent corporation is not disputed. What the
parties disagree on is the finding of the NLRC and the CA that
petitioner is a corporate officer. An examination of the complaint
for illegal dismissal, however, reveals that the root of the
controversy is petitioners dismissal as Manager of respondent
corporation, a position which respondents claim to be a corporate
office. Hence, petitioner is involved in this case not in his
capacity as a stockholder or director, but as an alleged corporate
officer. In applying the relationship test, therefore, it is
necessary to determine if petitioner is a corporate officer of
respondent corporation so as to establish the intra-corporate
relationship between the parties. And albeit respondents claim that
the determination of whether petitioner is a corporate officer is a
question of fact which this Court cannot pass upon in this petition
for review on certiorari, we shall nonetheless proceed to consider
the same because such question is not the main issue to be resolved
in this case but is merely collateral to the core issue earlier
mentioned.
Petitioner negates his status as a corporate officer by pointing
out that although he was removed as Manager through a board
resolution, he was never elected to said position nor was he
appointed thereto by the Board of Directors. While the By-Laws of
respondent corporation provides that the Board may from time to
time appoint such officers as it may deem necessary or proper, he
avers that respondents failed to present any board resolution that
he was appointed pursuant to said By-Laws. He instead alleges that
he was hired as Manager of respondent corporation solely by
respondent Abe. For these reasons, petitioner claims to be a mere
employee of respondent corporation rather than as a corporate
officer.
We find merit in petitioners contention.
Corporate officers in the context of Presidential Decree No.
902-A are those officers of the corporation who are given that
character by the Corporation Code or by the corporations by-laws.
There are three specific officers whom a corporation must have
under Section 25 of the Corporation Code. These are the president,
secretary and the treasurer. The number of officers is not limited
to these three. A corporation may have such other officers as may
be provided for by its by-laws like, but not limited to, the
vice-president, cashier, auditor or general manager. The number of
corporate officers is thus limited by law and by the corporations
by-laws.[footnoteRef:53] [53: Garcia v. Eastern Telecommunications
Philippines, Inc., G.R. Nos. 173115 and 173163-164, April 16, 2009,
585 SCRA 450, 468.]
Respondents claim that petitioner was appointed Manager by
virtue of Section 1, Article IV of respondent corporations By-Laws
which provides:ARTICLE IVOFFICER
Section 1. Election/Appointment Immediately after their
election, the Board of Directors shall formally organize by
electing the President, Vice-President, the Secretary at said
meeting.
The Board, may from time to time, appoint such other officers as
it may determine to be necessary or proper. Any two (2) or more
positions may be held concurrently by the same person, except that
no one shall act as President and Treasurer or Secretary at the
same time.
x x x x[footnoteRef:54] (Emphasis ours) [54: CA rollo, pp.
266-273.]
We have however examined the records of this case and we find
nothing to prove that petitioners appointment was made pursuant to
the above-quoted provision of respondent corporations By-Laws. No
copy of board resolution appointing petitioner as Manager or any
other document showing that he was appointed to said position by
action of the board was submitted by respondents. What we found
instead were mere allegations of respondents in their various
pleadings[footnoteRef:55] that petitioner was appointed as Manager
of respondent corporation and nothing more. The Court has stressed
time and again that allegations must be proven by sufficient
evidence because mere allegation is definitely not
evidence.[footnoteRef:56] [55: Respondents Position Paper filed
with the Labor Arbiter, id. at 94-113; Memorandum on Appeal and
Rejoinder filed with the NLRC, id. at 182-220 and 285-294; Comment
filed with the CA, id. at 302-319; Comment/Opposition (To The
Petition for Review) and Memorandum filed before this Court, rollo,
pp. 89-100 and 169-187.] [56: General Milling Corporation v. Casio,
G.R. No. 149552, March 10, 2010 citing Rimbunan Hijau Group of
Companies v. Oriental Wood Processing Corporation, 507 Phil. 631,
648-649 (2005).]
It also does not escape our attention that respondents made the
following conflicting allegations in their Memorandum on
Appeal[footnoteRef:57] filed before the NLRC which cast doubt on
petitioners status as a corporate officer, to wit: [57: CA rollo,
pp. 122-220 at 191 and 212.]
x x x x
24. Complainant-appellee Renato Real was appointed as the
manager of respondent-appellant Sangu on November 6, 1998. Priorly
[sic], he was working at Atlas Ltd. Co. at Mito-shi, Ibaraki-ken
Japan. He was staying in Japan as an illegal alien for the past
eleven (11) years. He had a problem with his family here in the
Philippines which prompted him to surrender himself to Japans
Bureau of Immigration and was deported back to the Philippines. His
former employer, Mr. Tsutomo Nogami requested Mr. Masahiko Shibata,
one of respondent-appellant Sangus Board of Directors, if
complainant-appellee Renato Real could work as one of its employees
here in the Philippines because he had been blacklisted at Japans
Immigration Office and could no longer go back to Japan. And so it
was arranged that he would serve as respondent-appellant Sangus
manager, receiving a salary of P25,000.00. As such, he was tasked
to oversee the operations of the company. x x x (Emphasis ours)
x x x xAs earlier stated, complainant-appellee Renato Real was
hired as the manager of respondent-appellant Sangu. As such, his
position was reposed with full trust and confidence. x x x
While respondents repeatedly claim that petitioner was appointed
as Manager pursuant to the corporations By-Laws, the above-quoted
inconsistencies in their allegations as to how petitioner was
placed in said position, coupled by the fact that they failed to
produce any documentary evidence to prove that petitioner was
appointed thereto by action or with approval of the board, only
leads this Court to believe otherwise. It has been consistently
held that [a]n office is created by the charter of the corporation
and the officer is elected (or appointed) by the directors or
stockholders.[footnoteRef:58] Clearly here, respondents failed to
prove that petitioner was appointed by the board of directors.
Thus, we cannot subscribe to their claim that petitioner is a
corporate officer. Having said this, we find that there is no
intra-corporate relationship between the parties insofar as
petitioners complaint for illegal dismissal is concerned and that
same does not satisfy the relationship test. [58: Easycall
Communications Phils., Inc. v. King, G.R. No. 145901, December 15,
2005, 478 SCRA 102, 110.]
Present controversy does not relate to intra-corporate
dispute
We now go to the nature of controversy test. As earlier stated,
respondents terminated the services of petitioner for the following
reasons: (1) his continuous absences at his post at Ogino
Philippines, Inc; (2) respondents loss of trust and confidence on
petitioner; and, (3) to cut down operational expenses to reduce
further losses being experienced by the corporation. Hence,
petitioner filed a complaint for illegal dismissal and sought
reinstatement, backwages, moral damages and attorneys fees. From
these, it is not difficult to see that the reasons given by
respondents for dismissing petitioner have something to do with his
being a Manager of respondent corporation and nothing with his
being a director or stockholder. For one, petitioners continuous
absences in his post in Ogino relates to his performance as
Manager. Second, respondents loss of trust and confidence in
petitioner stemmed from his alleged acts of establishing a company
engaged in the same line of business as respondent corporations and
submitting proposals to the latters clients while he was still
serving as its Manager. While we note that respondents also claim
these acts as constituting acts of disloyalty of petitioner as
director and stockholder, we, however, think that same is a mere
afterthought on their part to make it appear that the present case
involves an element of intra-corporate controversy. This is because
before the Labor Arbiter, respondents did not see such acts to be
disloyal acts of a director and stockholder but rather, as
constituting willful breach of the trust reposed upon petitioner as
Manager.[footnoteRef:59] It was only after respondents invoked the
Labor Arbiters lack of jurisdiction over petitioners complaint in
the Supplemental Memorandum of Appeal[footnoteRef:60] filed before
the NLRC that respondents started considering said acts as such.
Third, in saying that they were dismissing petitioner to cut
operational expenses, respondents actually want to save on the
salaries and other remunerations being given to petitioner as its
Manager. Thus, when petitioner sought for reinstatement, he wanted
to recover his position as Manager, a position which we have,
however, earlier declared to be not a corporate position. He is not
trying to recover a seat in the board of directors or to any
appointive or elective corporate position which has been declared
vacant by the board. Certainly, what we have here is a case of
termination of employment which is a labor controversy and not an
intra-corporate dispute. In sum, we hold that petitioners complaint
likewise does not satisfy the nature of controversy test. [59:
Respondents Position Paper, CA rollo, pp. 94-113 at 109-110.] [60:
Id. at 221-236. ]
With the elements of intra-corporate controversy being absent in
this case, we thus hold that petitioners complaint for illegal
dismissal against respondents is not intra-corporate. Rather, it is
a termination dispute and, consequently, falls under the
jurisdiction of the Labor Arbiter pursuant to Section
217[footnoteRef:61] of the Labor Code. [61: ART. 217. Jurisdiction
of the Labor Arbiters and the Commission. (a) Except as otherwise
provided under this Code, the Labor Arbiters shall have original
and exclusive jurisdiction to hear and decide, within thirty (30)
calendar days after the submission of the case by the parties for
decision without extension, even in the absence of stenographic
notes, the following cases involving all workers, whether
agricultural or non-agricultural:Unfair labor practice
cases;Termination disputes;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;Claims for actual, moral, exemplary and other forms of
damages arising from the employer-employee relations;Cases arising
from any violation of Article 264 of this Code, including questions
involving the legality of strikes and lock-outs; andExcept claims
for Employees Compensation, Social Security, Medicare and Maternity
benefits, all other claims arising from employer-employee
relations, including those of persons in domestic or household
service, involving an amount exceeding five thousand pesos
(P5,000.00) regardless of whether accompanied with a claim for
reinstatementx x x x]
We take note of the cases cited by respondents and find them
inapplicable to the case at bar. Fortune Cement Corporation v.
National Labor Relations Commission[footnoteRef:62] involves a
member of the board of directors and at the same time a corporate
officer who claims he was illegally dismissed after he was stripped
of his corporate position of Executive Vice-President because of
loss of trust and confidence. On the other hand, Philippine School
of Business Administration v. Leano[footnoteRef:63] and Pearson
& George v. National Labor Relations Commission[footnoteRef:64]
both concern a complaint for illegal dismissal by corporate
officers who were not re-elected to their respective corporate
positions. The Court declared all these cases as involving
intra-corporate controversies and thus affirmed the jurisdiction of
the SEC (now the RTC)[footnoteRef:65] over them precisely because
they all relate to corporate officers and their removal or
non-reelection to their respective corporate positions. Said cases
are by no means similar to the present case because as discussed
earlier, petitioner here is not a corporate officer. [62: Supra
note 13.] [63: Supra note 12.] [64: Supra note 11 at 173-174.] [65:
Pursuant to Section 5.2 of Republic Act No. 8799 otherwise known as
The Securities Regulation Code.]
With the foregoing, it is clear that the CA erred in affirming
the decision of the NLRC which dismissed petitioners complaint for
lack of jurisdiction. In cases such as this, the Court normally
remands the case to the NLRC and directs it to properly dispose of
the case on the merits. However, when there is enough basis on
which a proper evaluation of the merits of petitioners case may be
had, the Court may dispense with the time-consuming procedure of
remand in order to prevent further delays in the disposition of the
case.[footnoteRef:66] It is already an accepted rule of procedure
for us to strive to settle the entire controversy in a single
proceeding, leaving no root or branch to bear the seeds of
litigation. If, based on the records, the pleadings, and other
evidence, the dispute can be resolved by us, we will do so to serve
the ends of justice instead of remanding the case to the lower
court for further proceedings.[footnoteRef:67] We have gone over
the records before us and we are convinced that we can now
altogether resolve the issue of the validity of petitioners
dismissal and hence, we shall proceed to do so. [66: Leandro M.
Alcantara v. The Philippine Commercial and International Bank, G.R.
No. 151349, October 20, 2010 citing Somoso v. Court of Appeals,
G.R. No. 78050, October 23, 1989, 178 SCRA 654, 663; Bach v.
Ongkiko Kalaw Manhit & Acorda Law Offices, G.R. No. 160334,
September 11, 2006, 501 SCRA 419, 426.] [67: Id. citing Apo Fruits
Corporation v. Court of Appeals, G.R. No. 164195, February 6, 2007,
514 SCRA 537, 555.]
Petitioners dismissal not in accordance with law
In an illegal dismissal case, the onus probandi rests on the
employer to prove that [the] dismissal of an employee is for a
valid cause.[footnoteRef:68] Here, as correctly observed by the
Labor Arbiter, respondents failed to produce any convincing proof
to support the grounds for which they terminated petitioner.
Respondents contend that petitioner has been absent for several
months, yet they failed to present any proof that petitioner was
indeed absent for such a long time. Also, the fact that petitioner
was still able to collect his salaries after his alleged absences
casts doubts on the truthfulness of such charge. Respondents
likewise allege that petitioner engaged in a heated argument with
the employees of Epson, one of respondents clients. But just like
in the charge of absenteeism, there is no showing that an
investigation on the matter was done and that disciplinary action
was imposed upon petitioner. At any rate, we have reviewed the
records of this case and we agree with the Labor Arbiter that under
the circumstances, said charges are not sufficient bases for
petitioners termination. As to the charge of breach of trust
allegedly committed by petitioner when he established a new company
engaged in the same line of business as respondent corporations and
submitted proposals to two of the latters clients while he was
still a Manager, we again observe that these are mere allegations
without sufficient proof. To reiterate, allegations must be proven
by sufficient evidence because mere allegation is definitely not
evidence.[footnoteRef:69] [68: Pepsi Cola Products Philippines,
Inc. v. Santos, G.R. No. 165968, April 14, 2008, 551 SCRA 245,
252.] [69: Supra note 25.]
Moreover, petitioners dismissal was effected without due process
of law. The twin requirements of notice and hearing constitute the
essential elements of due process. The law requires the employer to
furnish the employee sought to be dismissed with two written
notices before termination of employment can be legally effected:
(1) a written notice apprising the employee of the particular acts
or omissions for which his dismissal is sought in order to afford
him an opportunity to be heard and to defend himself with the
assistance of counsel, if he desires, and (2) a subsequent notice
informing the employee of the employers decision to dismiss him.
This procedure is mandatory and its absence taints the dismissal
with illegality.[footnoteRef:70] Since in this case, petitioners
dismissal was effected through a board resolution and all that
petitioner received was a letter informing him of the boards
decision to terminate him, the abovementioned procedure was clearly
not complied with. All told, we agree with the findings of the
Labor Arbiter that petitioner has been illegally dismissed. And, as
an illegally dismissed employee is entitled to the two reliefs of
backwages and reinstatement,[footnoteRef:71] we affirm the Labor
Arbiters judgment ordering petitioners reinstatement to his former
position without loss of seniority rights and other privileges and
awarding backwages from the time of his dismissal until actually
reinstated. Considering that petitioner has to secure the services
of counsel to protect his interest and necessarily has to incur
expenses, we likewise affirm the award of attorneys fees which is
equivalent to 10% of the total backwages that respondents must pay
petitioner in accordance with this Decision. [70: Supra note 27 at
113-114.] [71: Golden Ace Builders v. Jose Talde, G.R. No. 187200,
May 5, 2010.]
WHEREFORE, the petition is hereby GRANTED. The assailed June 28,
2005 Decision of the Court of Appeals insofar as it affirmed the
National Labor Relations Commissions dismissal of petitioners
complaint for lack of jurisdiction, is hereby REVERSED and SET
ASIDE. The June 5, 2003 Decision of the Labor Arbiter with respect
to petitioner Renato Real is AFFIRMED and this case is ordered
REMANDED to the National Labor Relations Commission for the
computation of petitioners backwages and attorneys fees in
accordance with this Decision.
SO ORDERED. SECOND DIVISION
THE UNIVERSITY OF THE G.R. No. 181146IMMACULATE CONCEPTIONand
MO. MARIA ASSUMPTA Present:DAVID, RVM,Petitioners, CARPIO, J.,
Chairperson, NACHURA,PERALTA,ABAD, and- versus - MENDOZA, JJ.
NATIONAL LABOR RELATIONS Promulgated:COMMISSION and TEODORA
AXALAN,Respondents. January 26, 2011x - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- -x
D E C I S I O N
CARPIO, J.:
The Case
This is a petition for review on certiorari1 of the 13 December
2007 Decision2 of the Court of Appeals in CA-G.R. SP No. 00812
affirming the 15 August 2005 and the 24 October 2005 Resolutions3
of the National Labor Relations Commission in NLRC CA No.
M-008333-2005, which sustained the 11 October 2004 Decision4 of the
Labor Arbiter in RAB-11-12-01187-03 ordering petitioner to
reinstate private respondent to her former position without loss of
seniority rights and to pay her backwages, salary differentials,
damages, and attorneys fees.
The Facts
Petitioner University of the Immaculate Conception is a private
educational institution located in Davao City. Private respondent
Teodora C. Axalan is a regular faculty member in the university
holding the position of Associate Professor II. Aside from being a
regular faculty member, Axalan is the elected president of the
employees union.5
From 18 November to 22 November 2002, Axalan attended a seminar
in Quezon City on website development. Axalan then received a
memorandum6 from Dean Maria Rosa Celestial asking her to explain in
writing why she should not be dismissed for having been absent
without official leave.
In her letter,7 Axalan claimed that she held online classes
while attending the seminar. She explained that she was under the
impression that faculty members would not be marked absent even if
they were not physically present in the classroom as long as they
conducted online classes.
In reply,8 Dean Celestial relayed to Axalan the message of the
university president that no administrative charge would be filed
if Axalan would admit having been absent without official leave and
write a letter of apology seeking forgiveness. `Convinced that she
could not be deemed absent since she held online classes, Axalan
opted not to write the letter of admission and contrition the
university president requested.9 The Dean wrote Axalan that the
university president had created an ad hoc grievance committee to
investigate the AWOL charge.10
From 28 January to 3 February 2003, Axalan attended a seminar in
Baguio City on advanced paralegal training. Dean Celestial wrote
Axalan informing her that her participation in the paralegal
seminar in Baguio City was the subject of a second AWOL charge.11
The dean asked Axalan to explain in writing why no disciplinary
action should be taken against her.12
In her letter,13 Axalan explained that before going to Baguio
City for the seminar, she sought the approval of Vice-President for
Academics Alicia Sayson. In a letter,14 VP Sayson denied having
approved Axalans application for official leave. The VP stated in
her letter that it was the university president, Maria Assumpta
David, who must approve the application.
After conducting hearings and receiving evidence, the ad hoc
grievance committee found Axalan to have incurred AWOL on both
instances and recommended that Axalan be suspended without pay for
six months on each AWOL charge.15 The university president approved
the committees recommendation.
The university president then wrote Axalan informing her that
she incurred absences without official leave when she attended the
seminars on website development in Quezon City and on advanced
paralegal training in Baguio City on 18-22 November 2002 and on 28
January-3 February 2003, respectively. In the same letter, the
university president informed Axalan that the total penalty of
one-year suspension without pay for both AWOL charges would be
effective immediately.16
On 1 December 2003, Axalan filed a complaint17 against the
university for illegal suspension, constructive dismissal,
reinstatement with backwages, and unfair labor practice with prayer
for damages and attorneys fees.
The university moved to dismiss the complaint on the ground that
the Labor Arbiter had no jurisdiction over the subject matter of
the complaint. The university maintained that jurisdiction lay in
the voluntary arbitrator.18
In denying the universitys motion to dismiss, the Labor Arbiter
held that there being no existing collective bargaining agreement
between the parties, no grievance machinery was constituted, which
barred resort to voluntary arbitration.19
Meanwhile, upon the expiration of the one-year suspension,
Axalan promptly resumed teaching at the university on 1 October
2004.
The Ruling of the Labor Arbiter
On 11 October 2004, the Labor Arbiter rendered a Decision
holding that the suspension of Axalan amounted to constructive
dismissal entitling her to reinstatement and payment of backwages,
salary differentials, damages, and attorneys fees, thus:
WHEREFORE, premises laid, judgment is hereby rendered declaring
that the suspension of complainant amounted to constructive
dismissal, and as such, she is entitled to reinstatement and
payment of her full backwages reckoned from the time it was
withheld from her up to the time of reinstatement. Accordingly,
Respondent University of the Immaculate Conception acting through
its President, Respondent Mo. Maria Assumpta David, RVM, is
directed to reinstate the complainant to her former position
without loss of seniority rights and to pay her the sum of Five
Hundred Forty Three Thousand Four Hundred Fifty Two Pesos
(P543,452.00) representing her backwages, salary differentials
(diminution) and damages plus ten percent (10%) thereof as
attorneys fees or the sum of P54,345.20.
The Respondent UIC and its President are hereby directed to
inform this Office of the mode of compliance it will avail itself
by reason of the Order of reinstatement.
SO ORDERED.20
The university appealed the Labor Arbiters Decision to the
National Labor Relations Commission (NLRC). It challenged the
jurisdiction of the Labor Arbiter insisting that the voluntary
arbitrator had jurisdiction over the labor dispute. The university
pointed out that when the Labor Arbiter rendered his Decision on 11
October 2004, Axalan had returned to work on 1 October 2004 upon
the expiration of the one-year suspension.
The Ruling of the NLRC
The NLRC held that the Labor Arbiter, not the voluntary
arbitrator, had jurisdiction as the controversy did not pertain to
a dispute involving the union and the university. In its 15 August
2005 Resolution, the NLRC ruled:
WHEREFORE, for want of merit, the instant appeal is hereby
DISMISSED.
SO ORDERED.21
NLRC Commissioner Jovito C. Cagaanan, in his dissenting
opinion,22 stressed that the parties previously agreed to submit
the dispute to voluntary arbitration, which cast doubt on the
jurisdiction of the Labor Arbiter.
The university moved for reconsideration of the NLRC Resolution.
But the NLRC, in its 24 October 2005 Resolution,23 denied the
motion for reconsideration for lack of merit. The university
challenged both Resolutions of the NLRC before the Court of Appeals
via a petition for certiorari.
The Ruling of the Court of Appeals
The Court of Appeals affirmed the findings of the Labor Arbiter
and the NLRC. In its 13 December 2007 Decision, the Court of
Appeals dismissed the universitys petition for certiorari,
thus:
We find no grave abuse of discretion amounting to lack or excess
of jurisdiction on the part of public respondent in affirming the
Labor Arbiter. Respondent Commissions ruling finds more than ample
support in statutory and case law. It cannot, therefore, be
characterized as whimsical, arbitrary, or oppressive.
WHEREFORE, the instant petition is hereby DISMISSED.
SO ORDERED.24
Dissatisfied, the university filed in this Court the instant
petition for review on certiorari.
The Issues
The issues for resolution are (1) whether the voluntary
arbitrator had jurisdiction over the labor dispute; (2) whether
Axalan was constructively dismissed; and (3) whether the Labor
Arbiters computation of backwages, damages, and attorneys fees was
correct.
The Courts Ruling
The petition is impressed with merit.
The university contends that based on the transcript of
stenographic notes from the ad hoc grievance committee hearing held
on 20 February 2003, the parties agreed that the voluntary
arbitrator would have jurisdiction over the labor dispute. The
university maintains that Axalans suspension does not constitute
constructive dismissal and that the Labor Arbiters decision
treating it as such is an attempt to make it appear that the
voluntary arbitrator has no jurisdiction. The university points out
that for constructive dismissal to exist, there must be severance
of employment by the employee because of unbearable act of
discrimination, insensibility, or disdain on the part of the
employer leaving the employee with no choice but to forego
continued employment. The university claims that on the contrary,
Axalan eagerly reported for work as soon as the one-year suspension
was over. The university further argues that assuming Axalan is
entitled to backwages, it should have been based on Axalans average
gross monthly income at the time she was suspended in SY2003-2004,
which was P14,145.00, not on her average gross monthly income in
SY2002-2003, which was P18,502.00.
Private respondent Axalan counters that the university raises
the same factual issues already decided unanimously by the Labor
Arbiter, the NLRC, and the Court of Appeals. On the issue of
jurisdiction, Axalan stresses that the present labor case, being a
complaint for constructive dismissal and unfair labor practice, is
within the jurisdiction of the Labor Arbiter. On the finding of
constructive dismissal, Axalan points out that the Labor Arbiters
factual finding of constructive dismissal, when affirmed by the
NLRC and the Court of Appeals, binds this Court. Axalan claims that
both AWOL charges against her were without basis and were only a
form of harassment amounting to unfair labor practice. As to the
computation of the award of backwages, Axalan points out that her
average gross monthly income in SY2002-2003 was reduced in
SY2003-2004 precisely because she was not given an overload of two
extra assignments resulting in the diminution of her income. Axalan
maintains that the award of damages was just proper considering
that her suspension was without basis and amounted to unfair labor
practice.
Well-settled is the rule that the jurisdiction of this Court in
a petition for review on certiorari is limited to reviewing only
errors of law, not of fact, unless the factual findings being
assailed are not supported by the evidence on record or the
impugned judgment is based on a misapprehension of facts. Patently
erroneous findings of the Labor Arbiter, even when affirmed by the
NLRC and the Court of Appeals, are not binding on this Court.25 As
to the first issue, Article 217 of the Labor Code states that
unfair labor practices and termination disputes fall within the
original and exclusive jurisdiction of the Labor Arbiter:
ART. 217. Jurisdiction of Labor Arbiters and the Commission. (a)
Except as otherwise provided under this Code, the Labor Arbiters
shall have original and exclusive jurisdiction to hear and decide x
x x the following cases involving all workers, whether agricultural
or non-agricultural:
1. Unfair labor practice cases;2. Termination disputes;x x x x
(Emphasis supplied)
Article 262 of the same Code provides the exception:ART. 262.
Jurisdiction over other labor disputes. The Voluntary Arbitrator or
panel of Voluntary Arbitrators, upon agreement of the parties,
shall also hear and decide all other labor disputes including
unfair labor practices and bargaining deadlocks. (Emphasis
supplied)
In San Miguel Corp. v. NLRC,26 the Court ruled that for the
exception to apply, there must be agreement between the parties
clearly conferring jurisdiction to the voluntary arbitrator. Such
agreement may be stipulated in a collective bargaining agreement.
However, in the absence of a collective bargaining agreement, it is
enough that there is evidence on record showing the parties have
agreed to resort to voluntary arbitration.27
As can be gleaned from the transcript of stenographic notes of
the administrative hearing held on 20 February 2003, the parties in
this case clearly agreed to resort to voluntary arbitration. To
quote the exact words of the parties counsels:
Atty. Dante Sandiego: x x x So, are we to understand that the
decision of the President shall be without prejudice to the right
of the employees to contest the validity or legality of his
dismissal or of the disciplinary action imposed upon him by asking
for voluntary arbitration under the Labor Code or when applicable
availing himself of the grievance machinery under the Labor Code
which ends in voluntary arbitration. That will be the steps that we
will have to follow.
Atty. Sabino Padilla, Jr.: Yes, agreed.28
Thus, the Labor Arbiter should have immediately disposed of the
complaint and referred the same to the voluntary arbitrator when
the university moved to dismiss the complaint for lack of
jurisdiction.
No less than Section 3, Article XIII of the Constitution
declares as state policy the preferential use of voluntary modes in
settling disputes, to wit:
Sec. 3. x x x x The State shall 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. (Emphasis supplied)
As to the second issue, constructive dismissal occurs when there
is cessation of work because continued employment is rendered
impossible, unreasonable, or unlikely as when there is a demotion
in rank or diminution in pay or when a clear discrimination,
insensibility, or disdain by an employer becomes unbearable to the
employee leaving the latter with no other option but to quit.29
In this case however, there was no cessation of employment
relations between the parties. It is unrefuted that Axalan promptly
resumed teaching at the university right after the expiration of
the suspension period. In other words, Axalan never quit. Hence,
Axalan cannot claim that she was left with no choice but to quit, a
crucial element in a finding of constructive dismissal. Thus,
Axalan cannot be deemed to have been constructively dismissed.
Significantly, at the time the Labor Arbiter rendered his
Decision on 11 October 2004, Axalan had already returned to her
teaching job at the university on 1 October 2004. The Labor
Arbiters Decision ordering the reinstatement of Axalan, who at the
time had already returned to work, is thus absurd.
There being no constructive dismissal, there is no legal basis
for the Labor Arbiters order of reinstatement as well as payment of
backwages, salary differentials, damages, and attorneys fees.30
Thus, the third issue raised in the petition is now moot.Note that
on the first AWOL incident, the university even offered to drop the
AWOL charge against Axalan if she would only write a letter of
contrition. But Axalan adamantly refused knowing fully well that
the administrative case would take its course leading to possible
sanctions. She cannot now be heard that the imposition of the
penalty of six-month suspension without pay for each AWOL charge is
unreasonable. We are convinced that Axalan was validly suspended
for cause and in accord with procedural due process.
The Court recognizes the right of employers to discipline its
employees for serious violations of company rules after affording
the latter due process and if the evidence warrants. The
university, after affording Axalan due process and finding her
guilty of incurring AWOL on two separate occasions, acted well
within the bounds of labor laws in imposing the penalty of
six-month suspension without pay for each incidence of AWOL.
As a learning institution, the university cannot be expected to
take lightly absences without official leave among its employees,
more so among its faculty members even if they happen to be union
officers. To do so would send the wrong signal to the studentry and
the rest of its teaching staff that irresponsibility is widely
tolerated in the academe.
The law protects both the welfare of employees and the
prerogatives of management.31 Courts will not interfere with
prerogatives of management on the discipline of employees, as long
as they do not violate labor laws, collective bargaining agreements
if any, and general principles of fairness and justice.32
WHEREFORE, we GRANT the petition. The 13 December 2007 Decision
of the Court of Appeals in CA-G.R. SP No. 00812 affirming the 15
August 2005 and the 24 October 2005 Resolutions of the National
Labor Relations Commission in NLRC CA No. M-008333-2005, which
sustained the 11 October 2004 Decision of the Labor Arbiter in
RAB-11-12-01187-03, is SET ASIDE.
No pronouncement as to costs.
SO ORDERED.
Republic of the PhilippinesSupreme CourtManila
SECOND DIVISION
THE HERITAGE HOTEL MANILA, acting through its owner, GRAND PLAZA
HOTEL CORPORATION,Petitioner,
- versus -
NATIONAL UNION OF WORKERS IN THE HOTEL, RESTAURANT AND ALLIED
INDUSTRIES-HERITAGE HOTEL MANILA SUPERVISORS CHAPTER
(NUWHRAIN-HHMSC),Respondent.G.R. No. 178296
Present:
CARPIO, J., Chairperson,NACHURA, LEONARDO-DE
CASTRO,[footnoteRef:72]* [72: * Additional member in lieu of
Associate Justice Diosdado M. Peralta per Raffle dated January 12,
2011.]
ABAD, andMENDOZA, JJ.
Promulgated:
January 12, 2011
x----------------------------------------------------------------------------------x
DECISION
NACHURA, J.:Before the Court is a petition for review on
certiorari of the Decision[footnoteRef:73] of the Court of Appeals
(CA) dated May 30, 2005 and Resolution dated June 4, 2007. The
assailed Decision affirmed the dismissal of a petition for
cancellation of union registration filed by petitioner, Grand Plaza
Hotel Corporation, owner of Heritage Hotel Manila, against
respondent, National Union of Workers in the Hotel, Restaurant and
Allied Industries-Heritage Hotel Manila Supervisors Chapter
(NUWHRAIN-HHMSC), a labor organization of the supervisory employees
of Heritage Hotel Manila. [73: Penned by Associate Justice Ruben T.
Reyes (now a retired member of this Court), with Associate Justices
Josefina Guevara-Salonga and Fernanda Lampas Peralta, concurring;
rollo, pp. 38-54.]
The case stemmed from the following antecedents:
On October 11, 1995, respondent filed with the Department of
Labor and Employment-National Capital Region (DOLE-NCR) a petition
for certification election.[footnoteRef:74] The Med-Arbiter granted
the petition on February 14, 1996 and ordered the holding of a
certification election.[footnoteRef:75] On appeal, the DOLE
Secretary, in a Resolution dated August 15, 1996, affirmed the
Med-Arbiters order and remanded the case to the Med-Arbiter for the
holding of a preelection conference on February 26, 1997.
Petitioner filed a motion for reconsideration, but it was denied on
September 23, 1996. [74: Id. at 62-64.] [75: Id. at 133. ]
The preelection conference was not held as initially scheduled;
it was held a year later, or on February 20, 1998. Petitioner moved
to archive or to dismiss the petition due to alleged repeated
non-appearance of respondent. The latter agreed to suspend
proceedings until further notice. The preelection conference
resumed on January 29, 2000.
Subsequently, petitioner discovered that respondent had failed
to submit to the Bureau of Labor Relations (BLR) its annual
financial report for several years and the list of its members
since it filed its registration papers in 1995. Consequently, on
May 19, 2000, petitioner filed a Petition for Cancellation of
Registration of respondent, on the ground of the non-submission of
the said documents. Petitioner prayed that respondents Certificate
of Creation of Local/Chapter be cancelled and its name be deleted
from the list of legitimate labor organizations. It further
requested the suspension of the certification election
proceedings.[footnoteRef:76] [76: Id. at 67-74.]
On June 1, 2000, petitioner reiterated its request by filing a
Motion to Dismiss or Suspend the [Certification Election]
Proceedings,[footnoteRef:77] arguing that the dismissal or
suspension of the proceedings is warranted, considering that the
legitimacy of respondent is seriously being challenged in the
petition for cancellation of registration. Petitioner maintained
that the resolution of the issue of whether respondent is a
legitimate labor organization is crucial to the issue of whether it
may exercise rights of a legitimate labor organization, which
include the right to be certified as the bargaining agent of the
covered employees. [77: Id. at 83-85.]
Nevertheless, the certification election pushed through on June
23, 2000. Respondent emerged as the winner.[footnoteRef:78] [78:
Id. at 100.]
On June 28, 2000, petitioner filed a Protest with Motion to
Defer Certification of Election Results and Winner,[footnoteRef:79]
stating that the certification election held on June 23, 2000 was
an exercise in futility because, once respondents registration is
cancelled, it would no longer be entitled to be certified as the
exclusive bargaining agent of the supervisory employees. Petitioner
also claimed that some of respondents members were not qualified to
join the union because they were either confidential employees or
managerial employees. It then prayed that the certification of the
election results and winner be deferred until the petition for
cancellation shall have been resolved, and that respondents members
who held confidential or managerial positions be excluded from the
supervisors bargaining unit. [79: Id. at 87-95.]
Meanwhile, respondent filed its Answer[footnoteRef:80] to the
petition for the cancellation of its registration. It averred that
the petition was filed primarily to delay the conduct of the
certification election, the respondents certification as the
exclusive bargaining representative of the supervisory employees,
and the commencement of bargaining negotiations. Respondent prayed
for the dismissal of the petition for the following reasons: (a)
petitioner is estopped from questioning respondents status as a
legitimate labor organization as it had already recognized
respondent as such during the preelection conferences; (b)
petitioner is not the party-in-interest, as the union members are
the ones who would be disadvantaged by the non-submission of
financial reports; (c) it has already complied with the reportorial
requirements, having submitted its financial statements for 1996,
1997, 1998, and 1999, its updated list of officers, and its list of
members for the years 1995, 1996, 1997, 1998, and 1999; (d) the
petition is already moot and academic, considering that the
certification election had already been held, and the members had
manifested their will to be represented by respondent. [80: Id. at
76-81.]
Citing National Union of Bank Employees v. Minister of Labor, et
al.[footnoteRef:81] and Samahan ng Manggagawa sa Pacific Plastic v.
Hon. Laguesma,[footnoteRef:82] the Med-Arbiter held that the
pendency of a petition for cancellation of registration is not a
bar to the holding of a certification election. Thus, in an
Order[footnoteRef:83] dated January 26, 2001, the Med-Arbiter
dismissed petitioners protest, and certified respondent as the sole
and exclusive bargaining agent of all supervisory employees. [81:
196 Phil. 441 (1981).] [82: 334 Phil. 955 (1997).] [83: Rollo, pp.
100-103.]
Petitioner subsequently appealed the said Order to the DOLE
Secretary.[footnoteRef:84] The appeal was later dismissed by DOLE
Secretary Patricia A. Sto. Tomas (DOLE Secretary Sto. Tomas) in the
Resolution of August 21, 2002.[footnoteRef:85] Petitioner moved for
reconsideration, but the motion was also denied.[footnoteRef:86]
[84: Id. at 104-110.] [85: Id. at 133-136.] [86: Id. at 158.]
In the meantime, Regional Director Alex E. Maraan (Regional
Director Maraan) of DOLE-NCR finally resolved the petition for
cancellation of registration. While finding that respondent had
indeed failed to file financial reports and the list of its members
for several years, he, nonetheless, denied the petition,
ratiocinating that freedom of association and the employees right
to self-organization are more substantive considerations. He took
into account the fact that respondent won the certification
election and that it had already been certified as the exclusive
bargaining agent of the supervisory employees. In view of the
foregoing, Regional Director Maraanwhile emphasizing that the
non-compliance with the law is not viewed with favorconsidered the
belated submission of the annual financial reports and the list of
members as sufficient compliance t