Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 126322

January 16, 2002

YUPANGCO COTTON MILLS, INC., petitioner,

vs.
COURT OF APPEALS, HON. URBANO C. VICTORIO, SR., Presiding Judge, RTC
Branch 50, Manila, RODRIGO SY MENDOZA, SAMAHANG MANGGAGAWA NG ARTEX
(SAMAR-ANGLO) represented by its Local President RUSTICO CORTEZ, and
WESTERN GUARANTY CORPORATION, respondents.
PARDO, J.:
The Case
The case is a petition for review on certiorari of the decision of the Court of
Appeals1 dismissing the petition ruling that petitioner was guilty of forum shopping and that
the proper remedy was appeal in due course, not certiorari or mandamus.
In its decision, the Court of Appeals sustained the trial court's ruling that the remedies
granted under Section 17, Rule 39 of the Rules of Court are not available to the petitioner
because the Manual of Instructions for Sheriffs of the NLRC does not include the remedy of
an independent action by the owner to establish his right to his property.
The Facts
The facts, as found by the Court of Appeals, are as follows:
"From the records before us and by petitioner's own allegations and admission, it has
taken the following actions in connection with its claim that a sheriff of the National
Labor Relations Commission "erroneously and unlawfully levied" upon certain
properties which it claims as its own.
"1. It filed a notice of third-party claim with the Labor Arbiter on May 4, 1995.
"2. It filed an Affidavit of Adverse Claim with the National Labor Relations
Commission (NLRC) on July 4, 1995, which was dismissed on August 30, 1995, by
the labor Arbiter.
"3. It filed a petition for certiorari and prohibition with the Regional Trial Court of
Manila, Branch 49, docketed as Civil Case No. 95-75628 on October 6, 1995. The
Regional Trial Court dismissed the case on October 11, 1995 for lack of merit.
"4. It appealed to the NLRC the order of the Labor Arbiter dated August 13, 1995
which dismissed the appeal for lack of merit on December 8, 1995.

"5. It filed an original petition for mandatory injunction with the NLRC on November
16, 1995. This was docketed as Case No. NLRC-NCR-IC. 0000602-95. This case is
still pending with that Commission.
"6. It filed a complaint in the Regional Trial Court in Manila which was docketed as
Civil Case No. 95-76395. The dismissal of this case by public respondent triggered
the filing of the instant petition.
"In all of the foregoing actions, petitioner raised a common issue, which is that it is
the owner of the properties located in the compound and buildings of Artex
Development Corporation, which were erroneously levied upon by the sheriff of the
NLRC as a consequence of the decision rendered by the said Commission in a labor
case docketed as NLRC-NCR Case No. 00-05-02960-90."2
On March 29, 1996, the Court of Appeals promulgated a decision3 dismissing the petition on
the ground of forum shopping and that petitioner's remedy was to seek relief from this Court.
On April 18, 1996, petitioner filed with the Court of Appeals a motion for reconsideration of
the decision.4 Petitioner argued that the filing of a complaint for accion reinvindicatoria with
the Regional Trial Court was proper because it is a remedy specifically granted to an owner
(whose properties were subjected to a writ of execution to enforce a decision rendered in a
labor dispute in which it was not a party) by Section 17 (now 16), Rule 39, Revised Rules of
Court and by the doctrines laid down in Sy v. Discaya,5 Santos v. Bayhon6 and Manliguez v.
Court of Appeals.7
In addition, petitioner argued that the reliefs sought and the issues involved in the complaint
for recovery of property and damages filed with the Regional Trial Court of Manila, presided
over by respondent judge, were entirely distinct and separate from the reliefs sought and the
issues involved in the proceedings before the Labor Arbiter and the NLRC. Besides,
petitioner pointed out that neither the NLRC nor the Labor Arbiter is empowered to
adjudicate matters involving ownership of properties.
On August 27, 1996, the Court of Appeals denied petitioner's motion for reconsideration. 8
Hence, this appeal.9
The Issues
The issues raised are (1) whether the Court of Appeals erred in ruling that petitioner was
guilty of forum shopping, and (2) whether the Court of Appeals erred in dismissing the
petitioner's accion reinvindicatoria on the ground of lack of jurisdiction of the trial court.
The Court's Ruling
On the first issue raised, we rule that there was no forum shopping:
In Golangco v. Court of Appeals,10 we held:
"What is truly important to consider in determining whether forum shopping exists or
not is the vexation caused the courts and parties-litigant by a party who asks different
courts and/or administrative agencies to rule on the same on related caused and/or

grant the same or substantially the same reliefs, in the process creating possibility of
conflicting decisions being rendered by the different for a upon the same issues.
"xxx

xxx

xxx

"There is no forum-shopping where two different orders were questioned, two distinct
causes of action and issues were raised, and two objectives were sought."
(Underscoring ours)
In the case at bar, there was no identity of parties, rights and causes of action and reliefs
sought.
The case before the NLRC where Labor Arbiter Reyes issued a labor dispute between Artex
and Samar-Anglo. Petitioner was not a party to the case. The only issue petitioner raised
before the NLRC was whether or not the writ of execution issued by the labor arbiter could
be satisfied against the property of petitioner, not a party to the labor case.
On the other hand, the accion reinvindicatoria filed by petitioner in the trial court was to
recover the property illegally levied upon and sold at auction. Hence, the causes of action in
these cases were different.
The rule is that "for forum-shopping to exist both actions must involve the same transactions,
the same circumstances. The actions must also raise identical causes of action, subject
matter and issues.11
In Chemphil Export & Import Corporation v. Court of Appeals,12 we ruled that:
"Forum-shopping or the act of a party against whom an adverse judgment has been
rendered in one forum, of seeking another (and possible) opinion in another forum
(other than by appeal or the special civil action of certiorari), or the institution of two
(2) or more actions or proceedings grounded on the same cause on the supposition
that one or the other would make a favorable disposition."
On the second issue, a third party whose property has been levied upon by a sheriff to
enforce a decision against a judgment debtor is afforded with several alternative remedies to
protect its interests. The third party may avail himself of alternative remedies cumulatively,
and one will not preclude the third party from availing himself of the other alternative
remedies in the event he failed in the remedy first availed of.
Thus, a third party may avail himself of the following alternative remedies:
a) File a third party claim with the sheriff of the Labor Arbiter, and
b) If the third party claim is denied, the third party may appeal the denial to the
NLRC.13
Even if a third party claim was denied, a third party may still file a proper action with a
competent court to recover ownership of the property illegally seized by the sheriff. This finds
support in Section 17 (now 16), Rule 39, Revised Rules of Court, to wit:

"SEC. 17 (now 16). Proceedings where property claimed by third person. - If property
claimed by any other person than the judgment debtor or his agent, and such person
makes an affidavit of his title thereto or right to the possession thereof, stating the
grounds of such right or title, and serve the same upon the officer making the levy,
and a copy thereof upon the judgment creditor, the officer shall not be bound to keep
the property, unless such judgment creditor or his agent, on demand of the officer,
indemnify the officer against such claim by a bond in a sum not greater than the
value of the property levied on. In case of disagreement as to such value, the same
shall be determined by the court issuing the writ of execution.
1wphi1.nt

"The officer is not liable for damages, for the taking or keeping of the property, to any
third-party claimant unless a claim is made by the latter and unless an action for
damages is brought by him against the officer within one hundred twenty (120) days
from the date of the filing of the bond. But nothing herein contained shall prevent
such claimant or any third person from vindicating his claim to the property by any
proper action.
"When the party in whose favor the writ of execution runs, is the Republic of the
Philippines, or any officer duly representing it, the filing of such bond shall not be
required, and in case the sheriff or levying officer is sued for damages as a result of
the levy, he shall be represented by the Solicitor General and if held liable therefor,
the actual damages adjudged by the court shall be paid by the National Treasurer
out of such funds as may be appropriated for the purpose." (Underscoring ours)
In Sy v. Discaya,14 we ruled that:
"The right of a third-party claimant to file an independent action to vindicate his claim
of ownership over the properties seized is reserved by Section 17 (now 16), Rule 39
of the Rules of Court, x x x :
"xxx

xxx

xxx

"As held in the case of Ong v. Tating, et. al., construing the aforecited rule, a third
person whose property was seized by a sheriff to answer for the obligation of a
judgment debtor may invoke the supervisory power of the court which authorized
such execution. Upon due application by the third person and after summary hearing,
the court may command that the property be released from the mistaken levy and
restored to the rightful owner or possession. What said court do in these instances,
however, is limited to a determination of whether the sheriff has acted rightful or
wrongly in the performance of his duties in the execution of judgment, more
specifically, if he has indeed take hold of property not belonging to the judgment
debtor. The court does not and cannot pass upon the question of title to the
property, with any character of finality. It can treat of the matter only insofar as may
be necessary to decide if the sheriff has acted correctly or not. It can require the
sheriff to restore the property to the claimant's possession if warranted by the
evidence. However, if the claimant's proof do not persuade the court of the validity of
his title or right of possession thereto, the claim will be denied.
"Independent of the above-stated recourse, a third-party claimant may also avail of
the remedy known as "terceria', provided in Section 17 (now 16), Rule 39, by serving
on the officer making the levy an affidavit of his title and a copy thereof upon the
judgment creditor. The officer shall not be bound to keep the property, unless such

judgment creditor or his agent, on demand of the officer, indemnifies the officer
against such claim by a bond in a sum not greater than the value of the property
levied on. An action for damages may be brought against the sheriff within one
hundred twenty (120) days from the filing of the bond.
"The aforesaid remedies are nevertheless without prejudice to 'any proper action'
that a third-party claimant may deem suitable to vindicate 'his claim to the property.'
Such a 'proper action' is, obviously, entirely distinct from that explicitly prescribed in
Section 17 of Rule 39, which is an action for damages brought by a third-party
claimant against the officer within one hundred twenty (120) days from the date of
the filing of the bond for the taking or keeping of the property subject of the 'terceria'.
"Quite obviously, too, this 'proper action' would have for its object the recovery of
ownership or possession of the property seized by the sheriff, as well as damages
resulting from the allegedly wrongful seizure and detention thereof despite the thirdparty claim; and it may be brought against the sheriff and such other parties as may
be alleged to have colluded with him in the supposedly wrongful execution
proceedings, such as the judgment creditor himself. Such 'proper action', as above
pointed out, is and should be an entirely separate and distinct action from that in
which execution has issued, if instituted by a stranger to the latter suit.
"The remedies above mentioned are cumulative and may be resorted to by a
third-party claimant independent of or separately from and without need of
availing of the others. If a third-party claimant opted to file a proper action to
vindicate his claim of ownership, he must institute an action, distinct and separate
from that in which the judgment is being enforced, with the court of competent
jurisdiction even before or without need of filing a claim in the court which issued the
writ, the latter not being a condition sine qua non for the former. In such proper
action, the validity and sufficiency of the title of the third-party claimant will be
resolved and a writ of preliminary injunction against the sheriff may be issued."
(Emphasis and underscoring ours)
In light of the above, the filing of a third party claim with the Labor Arbiter and the NLRC did
not preclude the petitioner from filing a subsequent action for recovery of property and
damages with the Regional Trial Court. And, the institution of such complaint will not make
petitioner guilty of forum shopping.15
In Santos v. Bayhon,16 wherein Labor Arbiter Ceferina Diosana rendered a decision in NLRC
NCR Case No. 1-313-85 in favor of Kamapi, the NLRC affirmed the decision. Thereafter,
Kamapi obtained a writ of execution against the properties of Poly-Plastic Products or
Anthony Ching. However, respondent Priscilla Carrera filed a third-party claim alleging that
Anthony Ching had sold the property to her. Nevertheless, upon posting by the judgment
creditor of an indemnity bond, the NLRC Sheriff proceeded with the public auction sale.
Consequently, respondent Carrera filed with Regional Trial Court, Manila an action to
recover the levied property and obtained a temporary restraining order against Labor Arbiter
Diosana and the NLRC Sheriff from issuing a certificate of sale over the levied property.
Eventually, Labor Arbiter Santos issued an order allowing the execution to proceed against
the property of Poly-Plastic Products. Also, Labor Arbiter Santos and the NLRC Sheriff filed a
motion to dismiss the civil case instituted by respondent Carrera on the ground that the
Regional Trial Court did not have jurisdiction over the labor case. The trial court issued an
order enjoining the enforcement of the writ of execution over the properties claimed by

respondent Carrera pending the determination of the validity of the sale made in her favor by
the judgment debtor Poly-Plastic Products and Anthony Ching.
In dismissing the petition for certiorari filed by Labor Arbiter Santos, we ruled that:
"x x x. The power of the NLRC to execute its judgments extends only to properties
unquestionably belonging to the judgment debtor (Special Servicing Corp. v. Centro
La Paz, 121 SCRA 748).
"The general rule that no court has the power to interfere by injunction with the
judgments or decrees of another court with concurrent or coordinate jurisdiction
possessing equal power to grant injunctive relief, applies only when no third-party
claimant is involved (Traders Royal Bank v. Intermediate Appellate Court, 133 SCRA
141 [1984]). When a third-party, or a stranger to the action, asserts a claim over the
property levied upon, the claimant may vindicate his claim by an independent action
in the proper civil court which may stop the execution of the judgment on property not
belonging to the judgment debtor." (Underscoring ours)
in Consolidated Bank and Trust Corp. v. Court of Appeals, 193 SCRA 158 [1991], we ruled
that:
"The well-settled doctrine is that a 'proper levy' is indispensable to a valid sale on
execution. A sale unless preceded by a valid levy is void. Therefore, since there was
no sufficient levy on the execution in question, the private respondent did not take
any title to the properties sold thereunder x x x.
"A person other than the judgment debtor who claims ownership or right over the
levied properties is not precluded, however, from taking other legal remedies."
(Underscoring ours)
Jurisprudence is likewise replete with rulings that since the third-party claimant is not one of
the parties to the action, he could not, strictly speaking, appeal from the order denying his
claim, but should file a separate reinvindicatory action against the execution creditor or the
purchaser of the property after the sale at public auction, or a complaint for damages against
the bond filed by the judgment creditor in favor of the sheriff.17
And in Lorenzana v. Cayetano,18 we ruled that:
"The rights of a third-party claimant should not be decided in the action where the
third-party claim has been presented, but in a separate action to be instituted by the
third person. The appeal that should be interposed if the term 'appeal' may properly
be employed, is a separate reinvidincatory action against the execution creditor or
the purchaser of the property after the sale at public auction, or complaint for
damages to be charged against the bond filed by the judgment creditor in favor of the
sheriff. Such reinvindicatory action is reserved to the third-party claimant."
A separate civil action for recovery of ownership of the property would not constitute
interference with the powers or processes of the Arbiter and the NLRC which rendered the
judgment to enforce and execute upon the levied properties. The property levied upon being
that of a stranger is not subject to levy. Thus, a separate action for recovery, upon a claim
and prima-facie showing of ownership by the petitioner, cannot be considered as
interference.

The Fallo
WHEREFORE, the Court REVERSES the decision of the Court of Appeals and the
resolution denying reconsideration.19 In lieu thereof, the Court renders
judgment ANNULLING the sale on execution of the subject property conducted by NLRC
Sheriff Anam Timbayan in favor of respondent SAMAR-ANGLO and the subsequent sale of
the same to Rodrigo Sy Mendoza. The Court declares the petitioner to be the rightful owner
of the property involved and remands the case to the trial court to determine the liability of
respondents SAMAR-ANGLO, Rodrigo Sy Mendoza, and WESTERN GUARANTY
CORPORATION to pay actual damages that petitioner claimed.
Costs against respondents, except the Court of Appeals.

1wphi1.nt

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 168475

July 4, 2007

EMILIO E. DIOKNO, VICENTE R. ALCANTARA, ANTONIO Z. VERGARA, JR., DANTE M.

TONG, JAIME C. MENDOZA, ROMEO M. MACAPULAY, ROBERTO M. MASIGLAT,
LEANDRO C. ATIENZA, ROMULO AQUINO, JESUS SAMIA, GAUDENCIO CAMIT,
DANTE PARAO, ALBERTO MABUGAT, EDGARDO VILLANUEVA, JR., FRANCISCO
ESCOTO, EDGARDO SEVILLA, FELICITO MACASAET, and JOSE Z.
TULLO, Petitioners,
vs.
HON. HANS LEO J. CACDAC, in his capacity as Director of the Bureau of Labor
Relations, DOLE, MANILA, MED-ARBITER TRANQUILINO C. REYES, EDGARDO DAYA,
PABLO LUCAS, LEANDRO M. TABILOG, REYNALDO ESPIRITU, JOSE VITO, ANTONIO
DE LUNA, ARMANDO YALUNG, EDWIN LAYUG, NARDS PABILONA, REYNALDO
REYES, EVANGELINE ESCALL, ALBERTO ALCANTARA, ROGELIO CERVITILLO,
MARCELINO MORELOS, FAUSTINO ERMINO, JIMMY S. ONG, ALFREDO ESCALL,
NARDITO C. ALVAREZ, JAIME T. VALERIANO, JOHNSON S. REYES, GAUDENCIO
JIMENEZ, JR., GAVINO R. VIDANES, ARNALDO G. TAYAO, BONIFACIO F. CIRUJANO,
EDGARDO G. CADVONA, MAXIMO A. CAOC, JOSE O. MACLIT, JR., LUZMINDO D.
ACORDA, JR., LEMUEL R. RAGASA, and GIL G. DE VERA, Respondents.
DECISION
CHICO-NAZARIO, J.:
This is a Petition for Review on Certiorari under Rule 45 of the 1997 Revised Rules of Civil
Procedure, seeking the nullification of the Decision1 and Resolution2 of the Court of Appeals

in CA-G.R. SP No. 83061, dated 17 June 2004 and 10 June 2005, respectively, which
dismissed petitioners Petition for Certiorari and denied their Motion for Reconsideration
thereon.
The Facts
The First Line Association of Meralco Supervisory Employees (FLAMES) is a legitimate labor
organization which is the supervisory union of Meralco. Petitioners and private respondents
are members of FLAMES.
On 1 April 2003, the FLAMES Executive Board created the Committee on Election
(COMELEC) for the conduct of its union elections scheduled on 7 May 2003.3 The
COMELEC was composed of petitioner Dante M. Tong as its chairman, and petitioners
Jaime C. Mendoza and Romeo M. Macapulay as members. Subsequently, private
respondents Jimmy S. Ong, Nardito C. Alvarez, Alfredo J. Escall, and Jaime T. Valeriano
filed their respective certificates of candidacy. On 12 April 2003, the COMELEC rejected
Jimmy S. Ongs candidacy on the ground that he was not a member of FLAMES. Meanwhile,
the certificates of candidacy of Nardito C. Alvarez, Alfredo J. Escall, and Jaime T. Valeriano
were similarly rejected on the basis of the exclusion of their department from the scope of the
existing collective bargaining agreement (CBA). The employees assigned to the aforesaid
department are allegedly deemed disqualified from membership in the union for being
confidential employees.
On 24 April 2003, private respondents Jimmy S. Ong, Nardito C. Alvarez, Alfredo J. Escall,
Jaime T. Valeriano (Ong, et al.), and a certain Leandro M. Tabilog filed a Petition4 before the
Med-Arbitration Unit of the Department of Labor and Employment (DOLE). They prayed,
inter alia, for the nullification of the order of the COMELEC which disallowed their
candidacy.5 They further prayed that petitioners be directed to render an accounting of funds
with full and detailed disclosure of expenditures and financial transactions; and that a
representative from the Bureau of Labor Relations (BLR) be designated to act as chairman
of the COMELEC in lieu of petitioner Dante M. Tong.6
On 30 April 2003, DOLE-NCR Regional Director Alex E. Maraan issued an Order7 directing
DOLE personnel to observe the conduct of the FLAMES election on 7 May 2003.8
On 2 May 2003, petitioners filed a Petition9 with the COMELEC seeking the disqualification
of private respondents Edgardo Daya, Pablo Lucas, Leandro Tabilog, Reynaldo Espiritu,
Jose Vito, Antonio de Luna, Armando Yalung, Edwin Layug, Nards Pabilona, Reynaldo
Reyes, Evangeline Escall, Alberto Alcantara, Rogelio Cervitillo, Marcelino Morelos, and
Faustino Ermino (Daya, et al.). Petitioners alleged that Daya, et al., allowed themselves to be
assisted by non-union members, and committed acts of disloyalty which are inimical to the
interest of FLAMES. In their campaign, they allegedly colluded with the officers of the
Meralco Savings and Loan Association (MESALA) and the Meralco Mutual Aid and Benefits
Association (MEMABA) and exerted undue influence on the members of FLAMES.
On 6 May 2003, the COMELEC issued a Decision,10 declaring Daya, et al., officially
disqualified to run and/or to participate in the 7 May 2003 FLAMES elections. The
COMELEC also resolved to exclude their names from the list of candidates in the polls or
precincts, and further declared that any vote cast in their favor shall not be counted.
According to the COMELEC, Daya, et al., violated Article IV, Section 4(a)(6)11 of the
FLAMES Constitution and By-Laws (CBL) by allowing non-members to aid them in their

campaign. Their acts of solicitation for support from non-union members were deemed
inimical to the interest of FLAMES.
On 7 May 2003, the COMELEC proclaimed the following candidates, including some of
herein petitioners as winners of the elections, to wit12 :
1avvphi1

NAME

POSITION

Emilio E. Diokno

President

Vicente P. Alcantara

Executive Vice President External

Antonio Z. Vergara, Jr.

Executive Vice President Internal

Alberto L. Mabugat

Vice-President Organizing

Roberto D. Masiglat, Jr.

Vice-President Education

Leandro C. Atienza

Vice-President Chief Steward

Felito C. Macasaet

Secretary

Edgardo R. Villanueva

Asst. Secretary

Romulo C. Aquino

Treasurer

Jesus D. Samia Asst.

Treasurer

Gaudencio C. Camit

Auditor

Rodante B. [Parao]

Asst. Auditor

Jose Z. Tullo

Central Coordinator

Bernardo C. Sevilla

North Coordinator

Francis B. Escoto

South Coordinator

On 8 May 2003, private respondents Daya, et al., along with Ong, et al., filed with the MedArbitration Unit of the DOLE-NCR, a Petition13 to: a) Nullify Order of Disqualification; b)
Nullify Election Proceedings and Counting of Votes; c) Declare Failure of Election; and d)
Declare Holding of New Election to be Controlled and Supervised by the DOLE. The Petition
was docketed as Case No. NCR-OD-0304-002-LRD.
On 14 May 2003, another group led by private respondent Gaudencio Jimenez, Jr., along
with private respondents Johnson S. Reyes, Gavino R. Vidanes, Arnaldo G. Tayao,
Bonifacio F. Cirujano, Edgardo G. Cadavona, Maximo A. Caoc, Jose O. Maclit, Jr., Luzmindo
D. Acorda, Jr., Lemuel R. Ragasa and Gil G. de Vera (Jimenez, et al.) filed a Petition with
the Med-Arbitration Unit of the DOLE-NCR against petitioners to nullify the 7 May 2003
election on the ground that the same was not free, orderly, and peaceful. It was docketed as
Case No. NCR-OD-0305-004-LRD, which was subsequently consolidated with the Petition of
Daya, et al. and the earlier Petition of Ong, et al.

Meanwhile, the records show that a subsequent election was held on 30 June 2004, which
was participated in and won by herein private respondents Daya, et al. The validity of the 30
June 2004 elections was assailed by herein petitioners before the DOLE14 and taken to the
Court of Appeals in CA-G.R. SP No. 88264 on certiorari, which case does not concern us in
the instant Petition. The Court of Appeals, in the aforesaid case, rendered a Decision15dated
12 January 2007, upholding the validity of the 30 June 2004 elections, and the declaration of
herein private respondents Daya, et al., as the duly elected winners therein.
The Decision of the Med-Arbiter
On 7 July 2003, Med-Arbiter Tranquilino B. Reyes, Jr. issued a Decision16 in favor of private
respondents, Daya, et al. However, the petition of Jimenez, et al., was dismissed because it
was premature, it appearing that the COMELEC had not yet resolved their protest prior to
their resort to the Med-Arbiter. Finally, the Petition of Ong, et al., seeking to declare
themselves as bona fide members of FLAMES was ordered dismissed.
The Med-Arbiter noted in his decision that during a conference which was held on 15 May
2003, the parties agreed that the issue anent the qualifications of private respondents Ong,
et al. had been rendered moot and academic.17
The Med-Arbiter reversed the disqualification imposed by the COMELEC against private
respondents Daya, et al. He said that the COMELEC accepted all the allegations of
petitioners against private respondents Daya, et al., sans evidence to substantiate the same.
Moreover, he found that the COMELEC erred in relying on Article IV, Section 4(a) (6) of the
CBL as basis for their disqualification. The Med-Arbiter read the aforesaid provision to refer
to the dismissal and/or expulsion of a member from FLAMES, but not to the disqualification
of a member as a candidate in a union election. He rationalized that the COMELEC cannot
disqualify a candidate on the same grounds for expulsion of members, which power is vested
by the CBL on the Executive Board. The Med-Arbiter also held that there was a denial of due
process because the COMELEC failed to receive private respondents Daya, et al.s motion
for reconsideration of the order of their disqualification. The COMELEC was also found to
have refused to receive their written protest in violation of the unions CBL.18
Lastly, the Med-Arbiter defended his jurisdiction over the case. He concluded that even as
the election of union officers is an internal affair of the union, his office has the right to inquire
into the merits and conduct of the election when its jurisdiction is sought.19
The decretal portion of the Med-Arbiters Decision states, viz:
WHEREFORE, premises considered, the [P]etition to Nullify the Order of Disqualification;
Nullify Election proceedings and counting of Votes; and Declare a Failure of Elections is
hereby granted. The disqualification of [private respondent] Ed[gardo] Daya, et al., is hereby
considered as null and void. Perforce, the election of union officers of FLAMES on May 7,
2003 is declared a failure and a new election is ordered conducted under the supervision of
the Department of Labor and Employment.
The [P]etition to conduct an accounting of union funds and to stop the release of funds to
[petitioner] Diokno, et al., is ordered dismissed for lack of merit.
And the Petition to Declare [private respondents] Jimmy Ong, Alfredo [E]scall, Nardito
Alvarez, and Jaime Valeriano as members of FLAMES is hereby ordered dismissed for lack
of merit.

The [P]etition to Nullify the election filed by [private respondents] Gaudencio Jimenez, et al.,
is likewise ordered dismissed.20
Aggrieved, petitioners filed an appeal before the Director of the BLR.
The Ruling of the BLR Director
On 3 December 2003, the Director of the BLR issued a Resolution,21 affirming in toto the
assailed Decision of the Med-Arbiter.
Public respondent Director Hans Leo J. Cacdac ruled, inter alia, that the COMELECs
reliance on Article IV, Section 4(a) (6) of the CBL, as a ground for disqualifying private
respondents Daya, et al., was premature. He echoed the interpretation of the Med-Arbiter
that the COMELEC erroneously resorted to the aforecited provision which refers to the
expulsion of a member from the union on valid grounds and with due process, along with the
requisite 2/3 vote of the Executive Board. Hence, the COMELEC cut short the expulsion
proceedings in disqualifying private respondents Daya, et al.22 The BLR Director further held
that the case involves a question of disqualification on account of the alleged commission by
private respondents Daya, et al., of illegal campaign acts, which acts were not specifically
mentioned in the guidelines for the conduct of election as issued by the COMELEC.
Likewise, on the alleged refusal of private respondents Daya, et al., to submit to the
jurisdiction of the COMELEC by failing to file a petition to nullify its order of disqualification,
the BLR Director deemed the same as an exception to the rule on exhaustion of
administrative remedies. Thus:
By themselves, such acts could not be taken as repugnant of COMELECs authority.
Sensing that they were prejudiced by the disqualification order, it was only incumbent upon
[private respondents Daya, et al.] to seek remedy before a body, which they thought has a
more objective perspective over the situation. In short, they opted to bypass the
administrative remedies within the union. Such a move could not be taken against [private
respondents Daya, et al.] considering that non-exhaustion of administrative remedies is
justified in instances where it would practically amount to a denial of justice, or would be
illusory or vain, as in the present controversy.23
The BLR Director disposed in this wise:
WHEREFORE, the appeal is DISMISSED for lack of merit. The Decision of Med-Arbiter
Tranquilino B. Reyes, DOLE-NCR, dated 7 July 2003 is AFFIRMED in its entirety.
Let the records of this case be returned to the DOLE-NCR for the immediate conduct of
election of officers of the First Line Association of Meralco Supervisory Employees
(FLAMES) under the supervision of DOLE-NCR personnel.24
Subsequently, petitioners sought a reversal of the 3 December 2003 Resolution, but the BLR
Director issued a Resolution dated 10 February 2003,25 refusing to reverse his earlier
Resolution for lack of merit.
Petitioners elevated the case to the Court of Appeals via a Petition for Certiorari.
The Ruling of the Court of Appeals

The Court of Appeals found petitioners appeal to be bereft of merit.

The appellate court held that the provision relied upon by the COMELEC concerns the
dismissal and/or expulsion of union members, which power is vested in the FLAMES
Executive Board, and not the COMELEC. It affirmed the finding of the BLR Director that the
COMELEC, in disqualifying private respondents Daya, et al., committed a procedural
shortcut. It held:
Without the requisite two-thirds (2/3) vote of the Executive Board dismissing and/or expelling
private respondents for acts contemplated thereunder, the COMELEC was clearly violating
the unions constitution and bylaws (sic) by utilizing the aforequoted provision in its said May
6, 2003 decision and, in the process, arrogating unto itself a power it did not possess. As the
document embodying the covenant between a union and its members and the fundamental
law governing the members rights and obligations, it goes without saying that the
constitution and bylaws (sic) should be upheld for as long as they are not contrary to law,
good morals or public policy.26
On the matter of the failure of private respondents Daya, et al. to come up with 30 percent
(30%) members support in filing the Petition to Nullify the COMELECs Decision before the
Med-Arbiter, the Court of Appeals said that the petition did not involve the entire membership
of FLAMES, so there was no need to comply with the aforesaid requirement. Furthermore,
the appellate court applied the exception to the rule on exhaustion of administrative remedies
on the ground, inter alia, that resort to such a remedy would have been futile, illusory or
vain.27 Indeed, the Court of Appeals emphasized that private respondents Daya, et al., were
directed by the COMELEC to file their Answer to the petition for their disqualification only on
5 May 2003. Private respondents Daya, et al., filed their Answer on 6 May 2003. On the
same day, the COMELEC issued its Decision disqualifying them. A day after, the 7 May
2003 election was held. The Court of Appeals further stressed that private respondents
Daya, et al.s efforts to have their disqualification reconsidered were rebuffed by the
COMELEC; hence, they were left with no choice but to seek the intervention of the
BLR,28 which was declared to have jurisdiction over intra-union disputes even at its own
initiative under Article 22629 of the Labor Code.
Petitioners sought a reconsideration of the 17 June 2004 Decision of the Court of Appeals,
but the same was denied in a Resolution30 dated 10 June 2005.
Hence, the instant Petition.
At the outset, petitioners contend that the instant Petition falls under the exceptions to the
rule that the Supreme Court is not a trier of facts. They implore this Court to make factual
determination anent the conduct of the 7 May 2003 elections. They also question the
jurisdiction of the BLR on the case at bar because of the failure of private respondents Daya,
et al., to exhaust administrative remedies within the union. It is the stance of petitioner that
Article 22631 of the Labor Code which grants power to the BLR to resolve inter-union and
intra-union disputes is dead law, and has been amended by Section 14 of Republic Act No.
6715, whereby the conciliation, mediation and voluntary arbitration functions of the BLR had
been transferred to the National Conciliation and Mediation Board.
Petitioners similarly assert that the 7 May 2003 election was conducted in a clean, honest,
and orderly manner, and that private respondents, some of whom are not bona fide
members of FLAMES, were validly disqualified by the COMELEC from running in the
election. They also rehashed their argument that non-members of the union were allowed by

private respondents Daya, et al., to participate in the affair. They challenge the finding of the
BLR Director that the reliance by the COMELEC on Article IV, Section 4(a)(6) of the CBL,
was premature. Petitioners insist that the COMELEC had the sole and exclusive power to
pass upon the qualification of any candidate, and therefore, it has the correlative power to
disqualify any candidate in accordance with its guidelines.
For their part, private respondents Daya, et al., maintain that the Petition they filed before the
DOLE-NCR Med-Arbiter questioning the disqualification order of the COMELEC and seeking
the nullification of the 7 May 2003 election involves an intra-union dispute which is within the
jurisdiction of the BLR. They further claim that the COMELEC, in disqualifying them,
mistakenly relied on a provision in the FLAMES CBL that addresses the expulsion of
members from the union, and no expulsion proceedings were held against them. Finally,
they underscore the finding of the appellate court that there was disenfranchisement among
the general membership of FLAMES due to their wrongful disqualification which restricted
the members choices of candidates. They reiterate the conclusion of the Court of Appeals
that had the COMELEC tabulated the votes cast in their favor, there would have been, at
least, a basis for the declaration that they lost in the elections.
Issues
Petitioners attribute to the Court of Appeals several errors to substantiate their
Petition.32 They all boil down, though, to the question of whether the Court of Appeals
committed grave abuse of discretion when it affirmed the jurisdiction of the BLR to take
cognizance of the case and then upheld the ruling of the BLR Director and Med-Arbiter,
nullifying the COMELECs order of disqualification of private respondents Daya et al., and
annulling the 7 May 2003 FLAMES elections.
The Courts Ruling
The Petition is devoid of merit.
We affirm the finding of the Court of Appeals upholding the jurisdiction of the BLR. Article
226 of the Labor Code is hereunder reproduced, to wit:
ART. 226. BUREAU OF LABOR RELATIONS. The Bureau of Labor Relations and the
Labor Relations Divisions in the regional offices of the Department of Labor shall have
original and exclusive authority to act, at their own initiative or upon request of either or both
parties, on all inter-union and intra-union conflicts, and all disputes, grievances or problems
arising from or affecting labor-management relations in all workplaces whether agricultural or
nonagricultural, except those arising from the implementation or interpretation of collective
bargaining agreements which shall be the subject of grievance procedure and/or voluntary
arbitration.
The Bureau shall have fifteen (15) working days to act on labor cases before it, subject to
extension by agreement of the parties.
The amendment to Article 226, as couched in Republic Act No. 6715,33 which is relied upon
by petitioners in arguing that the BLR had been divested of its jurisdiction, simply reads,
thus:
Sec. 14. The second paragraph of Article 226 of the same Code is likewise hereby amended
to read as follows:

"The Bureau shall have fifteen (15) calendar days to act on labor cases before it, subject to
extension by agreement of the parties."
This Court in Bautista v. Court of Appeals,34 interpreting Article 226 of the Labor Code, was
explicit in declaring that the BLR has the original and exclusive jurisdiction on all inter-union
and intra-union conflicts. We said that since Article 226 of the Labor Code has declared that
the BLR shall have original and exclusive authority to act on all inter-union and intra-union
conflicts, there should be no more doubt as to its jurisdiction. As defined, an intra-union
conflict would refer to a conflict within or inside a labor union, while an inter-union
controversy or dispute is one occurring or carried on between or among unions.35 More
specifically, an intra-union dispute is defined under Section (z), Rule I of the Rules
Implementing Book V of the Labor Code, viz:
(z) "Intra-Union Dispute" refers to any conflict between and among union members, and
includes all disputes or grievances arising from any violation of or disagreement over any
provision of the constitution and by-laws of a union, including cases arising from chartering
or affiliation of labor organizations or from any violation of the rights and conditions of union
membership provided for in the Code.
The controversy in the case at bar is an intra-union dispute. There is no question that this is
one which involves a dispute within or inside FLAMES, a labor union. At issue is the
propriety of the disqualification of private respondents Daya, et al., by the FLAMES
COMELEC in the 7 May 2003 elections. It must also be stressed that even as the dispute
involves allegations that private respondents Daya, et al., sought the help of non-members of
the union in their election campaign to the detriment of FLAMES, the same does not detract
from the real character of the controversy. It remains as one which involves the grievance
over the constitution and bylaws of a union, and it is a controversy involving members of the
union. Moreover, the non-members of the union who were alleged to have aided private
respondents Daya, et al., are not parties in the case. We are, therefore, unable to
understand petitioners persistence in placing the controversy outside of the jurisdiction of
the BLR. The law is very clear. It requires no further interpretation. The Petition which was
initiated by private respondents Daya, et al., before the BLR was properly within its
cognizance, it being an intra-union dispute. Indubitably, when private respondents Daya, et
al., brought the case to the BLR, it was an invocation of the power and authority of the BLR
to act on an intra-union conflict.
After having settled the jurisdiction of the BLR, we proceed to determine if petitioners
correctly raised the argument that private respondents Daya, et al., prematurely sought the
BLRs jurisdiction on the ground that they failed to exhaust administrative remedies within the
union. On this matter, we affirm the findings of the Court of Appeals which upheld the
application by the BLR Director of the exception to the rule of exhaustion of administrative
remedies.
In this regard, this Court is emphatic that "before a party is allowed to seek the intervention
of the court, it is a pre-condition that he should have availed of all the means of
administrative processes afforded him. Hence, if a remedy within the administrative
machinery can still be resorted to by giving the administrative officer concerned every
opportunity to decide on a matter that comes within his jurisdiction when such remedy should
be exhausted first before the courts judicial power can be sought. The premature invocation
of courts judicial intervention is fatal to ones cause of action."36

Verily, there are exceptions to the applicability of the doctrine.37 Among the established
exceptions are: 1) when the question raised is purely legal; 2) when the administrative body
is in estoppel; 3) when the act complained of is patently illegal; 4) when there is urgent need
for judicial intervention; 5) when the claim involved is small; 6) when irreparable damage will
be suffered; 7) when there is no other plain, speedy, and adequate remedy; 8) when strong
public interest is involved; 9) when the subject of the proceeding is private land; 10) in quo
warranto proceedings;38and 11) where the facts show that there was a violation of due
process.39 As aptly determined by the BLR Director, private respondents Daya, et al., were
prejudiced by the disqualification order of the COMELEC. They endeavored to seek
reconsideration, but the COMELEC failed to act thereon.40 The COMELEC was also found to
have refused to receive their written protest.41 The foregoing facts sustain the finding that
private respondents Daya, et al., were deprived of due process. Hence, it becomes
incumbent upon private respondents Daya, et al., to seek the aid of the BLR. To insist on the
contrary is to render their exhaustion of remedies within the union as illusory and
vain.42These antecedent circumstances convince this Court that there was proper application
by the Med-Arbiter of the exception to the rule of exhaustion of administrative remedies, as
affirmed by the BLR Director, and upheld by the Court of Appeals.
We cannot accept, and the Court of Appeals rightfully rejected, the contention of petitioners
that the private respondents Daya, et al.s complaint filed before the Med-Arbiter failed to
comply with the jurisdictional requirement because it was not supported by at least thirty
percent (30%) of the members of the union. Section 1 of Rule XIV of the Implementing Rules
of Book V mandates the thirty percent (30%) requirement only in cases where the issue
involves the entire membership of the union, which is clearly not the case before us. The
issue is obviously limited to the disqualification from participation in the elections by
particular union members.
Having resolved the jurisdictional cobwebs in the instant case, it is now apt for this Court to
address the issue anent the disqualification of private respondents and the conduct of the 7
May 2003 elections.
On this matter, petitioners want this Court to consider the instant case as an exception to the
rule that the Supreme Court is not a trier of facts; hence, importuning that we make findings
of fact anew. It bears stressing that in a petition for review on certiorari, the scope of this
Courts judicial review of decisions of the Court of Appeals is generally confined only to
errors of law,43 and questions of fact are not entertained. We elucidated on our fidelity to this
rule, and we said:
Thus, only questions of law may be brought by the parties and passed upon by this Court in
the exercise of its power to review. Also, judicial review by this Court does not extend to a
reevaluation of the sufficiency of the evidence upon which the proper labor tribunal has
based its determination.44
It is aphoristic that a re-examination of factual findings cannot be done through a petition for
review on certiorari under Rule 45 of the Rules of Court because as earlier stated, this Court
is not a trier of facts; it reviews only questions of law.45 The Supreme Court is not duty-bound
to analyze and weigh again the evidence considered in the proceedings below.46 This is
already outside the province of the instant Petition for Certiorari. While there may be
exceptions to this rule, petitioners miserably failed to show why the exceptions should be
applied here. With greater force must this rule be applied in the instant case where the
factual findings of the Med-Arbiter were affirmed by the BLR Director, and then, finally, by the
Court of Appeals. The findings below had sufficient bases both in fact and in law. The

uniform conclusion was that private respondents Daya, et al., were wrongfully disqualified by
the COMELEC; consequently, the FLAMES election should be annulled.
On the issue of disqualification, there was a blatant misapplication by the COMELEC of the
FLAMES CBL. As has been established ad nauseam, the provision47 relied upon by the
COMELEC in disqualifying private respondents Daya, et al., applies to a case of expulsion of
members from the union.
In full, Article IV, Section 4 (a) (6) of the FLAMES CBL, provides, to wit:
Section 4(a). Any member may be DISMISSED and/or EXPELLED from the UNION, after
due process and investigation, by a two-thirds (2/3) vote of the Executive Board, for any of
the following causes:
xxxx
(6) Acting in a manner harmful to the interest and welfare of the UNION and/or its
MEMBERS.48
We highlight five points, thus:
First, Article IV, Section 4(a)(6) of the FLAMES CBL, embraces exclusively the case of
dismissal and/or expulsion of members from the union. Even a cursory reading of the
provision does not tell us that the same is to be automatically or directly applied in the
disqualification of a candidate from union elections, which is the matter at bar. It cannot be
denied that the COMELEC erroneously relied on Article IV, Section 4(a)(6) because the
same does not contemplate the situation of private respondents Daya, et al. The latter are
not sought to be expelled or dismissed by the Executive Board. They were brought before
the COMELEC to be disqualified as candidates in the 7 May 2003 elections.
Second, the aforecited provision evidently enunciates with clarity the procedural course that
should be taken to dismiss and expel a member from FLAMES. The CBL is succinct in
stating that the dismissal and expulsion of a member from the union should be after due
process and investigation, the same to be exercised by two-thirds (2/3) vote of the Executive
Board for any of the causes49 mentioned therein. The unmistakable directive is that in cases
of expulsion and dismissal, due process must be observed as laid down in the CBL.
Third, nevertheless, even if we maintain a lenient stance and consider the applicability of
Article IV, Section 4(a)(6) in the disqualification of private respondents Daya, et al., from the
elections of 7 May 2003, still, the disqualification made by the COMELEC pursuant to the
subject provision was a rank disregard of the clear due process requirement embodied
therein. Nowhere do we find that private respondents Daya, et al. were investigated by the
Executive Board. Neither do we see the observance of the voting requirement as regards
private respondents Daya, et al. In all respects, they were denied due process.
1avvphi1

Fourth, the Court of Appeals, the BLR Director, and the Med-Arbiter uniformly found that due
process was wanting in the disqualification order of the COMELEC. We are in accord with
their conclusion. If, indeed, there was a violation by private respondents Daya, et al., of the
FLAMES CBL that could be a ground for their expulsion and/or dismissal from the union,
which in turn could possibly be made a ground for their disqualification from the elections,
the procedural requirements for their expulsion should have been observed. In any event,
therefore, whether the case involves dismissal and/or expulsion from the union or

disqualification from the elections, the proper procedure must be observed. The
disqualification ruled by the COMELEC against private respondents Daya, et al., must not be
allowed to abridge a clear procedural policy established in the FLAMES CBL. If we uphold
the COMELEC, we are countenancing a clear case of denial of due process which is
anathema to the Constitution of the Philippines which safeguards the right to due process.
Fifth, from another angle, the erroneous disqualification of private respondents Daya, et al.,
constituted a case of disenfranchisement on the part of the member-voters of FLAMES. By
wrongfully excluding them from the 7 May 2003 elections, the options afforded to the union
members were clipped. Hence, the mandate of the union cannot be said to have been
rightfully determined. The factual irregularities in the FLAMES elections clearly provide
proper bases for the annulment of the union elections of 7 May 2003.
On a final note, as it appears that the question of the qualifications of private respondents
Ong, et al. had been rendered moot and academic,50 we do not find any reason for this Court
to rule on the matter. As borne out by the records, the question had been laid to rest even
when the case was still before the Med-Arbiter.51
WHEREFORE, the Petition is DENIED. The Decision of the Court of Appeals dated 17 June
2004, and its Resolution dated 10 June 2005 in CA-G.R. SP No. 83061
are AFFIRMED. Costs against petitioners.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 168583

July 26, 2010

ATTY. ALLAN S. MONTAO, Petitioner,

vs.
ATTY. ERNESTO C. VERCELES, Respondent.
DECISION
DEL CASTILLO, J.:
The Federation/Unions Constitution and By-Laws govern the relationship between and
among its members. They are akin to ordinary contracts in that their provisions have
obligatory force upon the federation/ union and its member. What has been expressly
stipulated therein shall be strictly binding on both.
By this Petition for Review on Certiorari,1 petitioner Atty. Allan S. Montao (Atty. Montao)
assails the Decision2dated May 28, 2004 and Resolution3 dated June 28, 2005 of the Court

of Appeals (CA) in CA-G.R. SP No. 71731, which declared as null and void his election as
the National Vice-President of Federation of Free Workers (FFW), thereby reversing the May
8, 2002 Decision4 of the Bureau of Labor Relations (BLR) in BLR-O-TR-66-7-13-01.
Factual Antecedents
Atty. Montao worked as legal assistant of FFW Legal Center on October 1,
1994.5 Subsequently, he joined the union of rank-and-file employees, the FFW Staff
Association, and eventually became the employees union president in July 1997. In
November 1998, he was likewise designated officer-in-charge of FFW Legal Center.6
During the 21st National Convention and Election of National Officers of FFW, Atty. Montao
was nominated for the position of National Vice-President. In a letter dated May 25,
2001,7 however, the Commission on Election (FFW COMELEC), informed him that he is not
qualified for the position as his candidacy violates the 1998 FFW Constitution and By-Laws,
particularly Section 76 of Article XIX8 and Section 25 (a) of Article VIII,9 both in Chapter II
thereof. Atty. Montao thus filed an Urgent Motion for Reconsideration10 praying that his
name be included in the official list of candidates.
Election ensued on May 26-27, 2001 in the National Convention held at Subic International
Hotel, Olongapo City. Despite the pending motion for reconsideration with the FFW
COMELEC, and strong opposition and protest of respondent Atty. Ernesto C. Verceles (Atty.
Verceles), a delegate to the convention and president of University of the East Employees
Association (UEEA-FFW) which is an affiliate union of FFW, the convention delegates
allowed Atty. Montaos candidacy. He emerged victorious and was proclaimed as the
National Vice-President.
On May 28, 2001, through a letter11 to the Chairman of FFW COMELEC, Atty. Verceles
reiterated his protest over Atty. Montaos candidacy which he manifested during the plenary
session before the holding of the election in the Convention. On June 18, 2001, Atty.
Verceles sent a follow-up letter12 to the President of FFW requesting for immediate action on
his protest.
Proceedings before the Bureau of Labor Relations
On July 13, 2001, Atty. Verceles, as President of UEEA-FFW and officer of the Governing
Board of FFW, filed before the BLR a petition13 for the nullification of the election of Atty.
Montao as FFW National Vice-President. He alleged that, as already ruled by the FFW
COMELEC, Atty. Montao is not qualified to run for the position because Section 76 of
Article XIX of the FFW Constitution and By-Laws prohibits federation employees from sitting
in its Governing Board. Claiming that Atty. Montaos premature assumption of duties and
formal induction as vice-president will cause serious damage, Atty. Verceles likewise prayed
for injunctive relief.14
Atty. Montao filed his Comment with Motion to Dismiss15 on the grounds that the Regional
Director of the Department of Labor and Employment (DOLE) and not the BLR has
jurisdiction over the case; that the filing of the petition was premature due to the pending and
unresolved protest before the FFW COMELEC; and that, Atty. Verceles has no legal
standing to initiate the petition not being the real party in interest.
Meanwhile, on July 16, 2001, the FFW COMELEC sent a letter to FFW National President,
Bro. Ramon J. Jabar, in reference to the election protest filed before it by Atty. Verceles. In

this correspondence, which was used by Atty. Verceles as an additional annex to his petition
before the BLR, the FFW COMELEC intimated its firm stand that Atty. Montaos candidacy
contravenes the FFWs Constitution, by stating:
At the time Atty. Verceles lodged his opposition in the floor before the holding of the election,
we, the Comelec unanimously made the decision that Atty. Montao and others are
disqualified and barred from running for any position in the election of the Federation, in view
of pertinent provisions of the FFW Constitution.
Our decision which we repeated several times as final was however further deliberated upon
by the body, which then gave the go signal for Atty. Montaos candidacy notwithstanding
our decision barring him from running and despite the fact that several delegates took the
floor [stating] that the convention body is not a constitutional convention body and as such
could not qualify to amend the FFWs present constitution to allow Atty. Montao to run.
We would like to reiterate what we stated during the plenary session that our decision was
final in view of the cited pertinent provisions of the FFW Constitution and we submit that the
decision of the convention body in allowing Atty. Montaos candidacy is not valid in view of
the fact that it runs counter to the FFW Constitution and the body at that time was not acting
as a Constitutional Convention body empowered to amend the FFW Constitution on the spot.
Our having conducted the election does not depart from the fact that we did not change our
decision disqualifying candidates such as Atty. Allan S. Montao, and others from running.
The National Convention as a co-equal constitutional body of the Comelec was not given the
license nor the authority to violate the Constitution. It therefore, cannot reverse the final
decision of the Comelec with regard to the candidacy of Atty. Allan Montao and other
disqualified candidates.16
The BLR, in its Order dated August 20, 2001,17 did not give due course to Atty. Montaos
Motion to Dismiss but ordered the latter to submit his answer to the petition pursuant to the
rules. The parties thereafter submitted their respective pleadings and position papers.
On May 8, 2002, the BLR rendered a Decision18 dismissing the petition for lack of merit.
While it upheld its jurisdiction over the intra-union dispute case and affirmed, as well, Atty.
Verceles legal personality to institute the action as president of an affiliate union of FFW, the
BLR ruled that there were no grounds to hold Atty. Montao unqualified to run for National
Vice-President of FFW. It held that the applicable provision in the FFW Constitution and ByLaws to determine whether one is qualified to run for office is not Section 76 of Article
XIX19 but Section 26 of Article VIII20 thereof. The BLR opined that there was sufficient
compliance with the requirements laid down by this applicable provision and, besides, the
convention delegates unanimously decided that Atty. Montao was qualified to run for the
position of National Vice-President.
Atty. Verceles filed a Motion for Reconsideration but it was denied by the BLR.
Proceedings before the Court of Appeals
Atty. Verceles thus elevated the matter to the CA via a petition for certiorari,21 arguing that
the Convention had no authority under the FFW Constitution and By-Laws to overrule and
set aside the FFW COMELECs Decision rendered pursuant to the latters power to screen
candidates.

On May 28, 2004, the CA set aside the BLRs Decision. While it agreed that jurisdiction was
properly lodged with the BLR, that Atty. Verceles has legal standing to institute the petition,
and that the applicable provision of FFW Constitution and By-Laws is Section 26 of Article
VIII and not Section 76 of Article XIX, the CA however ruled that Atty. Montao did not
possess the qualification requirement under paragraph (d) of Section 26 that candidates
must be an officer or member of a legitimate labor organization. According to the CA, since
Atty. Montao, as legal assistant employed by FFW, is considered as confidential employee,
consequently, he is ineligible to join FFW Staff Association, the rank-and-file union of FFW.
The CA, thus, granted the petition and nullified the election of Atty. Montao as FFW
National Vice-President.
Atty. Montao moved for reconsideration claiming that the CA seriously erred in granting
Atty. Verceles petition on the ground that FFW Staff Association, of which he is an officer
and member, is not a legitimate labor organization. He asserted that the legitimacy of the
union was never raised as an issue. Besides, the declaration of the CA that FFW Staff
Association is not a legitimate labor organization amounts to a collateral attack upon its legal
personality, which is proscribed by law. Atty. Montao also reiterated his allegations of lack
of jurisdiction and lack of cause of action due to a pending protest. In addition, he claimed
violation of the mandatory requirement on certification against forum shopping and mootness
of the case due to the appointment of Atty. Verceles as Commissioner of the National Labor
Relations Commission (NLRC), thereby divesting himself of interest in any matters relating to
his affiliation with FFW.
Believing that it will be prejudiced by the CA Decision since its legal existence was put at
stake, the FFW Staff Association, through its president, Danilo A. Laserna, sought
intervention.
On June 28, 2005, the CA issued a Resolution22 denying both Atty. Montaos motion for
reconsideration23 and FFW Staff Associations motion for intervention/clarification.24
Issues
Hence, this petition anchored on the following grounds:
I.
THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION, AMOUNTING
TO LACK AND/OR EXCESS OF JURISDICTION, IN RENDERING THE ASSAILED
DECISION, IN THAT:
A.) THE SOLE GROUND USED AND/OR INVOKED IN GRANTING THE
PETITION A QUOWAS NOT EVEN RAISED AND/OR INVOKED BY PETITIONER;
B.) THE DECLARATION THAT "FFW STAFF ASSOCIATION IS NOT A
LEGITIMATE LABOR ORGANIZATION", WITHOUT GIVING SAID ORGANIZATION
A DAY IN COURT AMOUNTS TO A COLLATERAL ATTACK PROSCRIBED
UNDER THE LAW; AND
C.) THE COURT OF APPEALS FAILED AND/OR REFUSED TO PASS UPON
OTHER LEGAL ISSUES WHICH HAD BEEN TIMELY RAISED, SPECIFICALLY ON
THE PREMATURITY OF THE COMPLAINT AND THE LACK OF CERTIFICATION
AGAINST FORUM SHOPPING OF THE PETITION A QUO.

II.
THE COURT OF APPEALS ERRED IN UPHOLDING THE EXERCISE OF JURISDICTION
BY HEREIN RESPONDENT BUREAU AND IN NOT ORDERING THE DISMISSAL OF THE
CASE, DESPITE EXPRESS PROVISION OF LAW GRANTING SAID JURISDICTION OVER
CASES INVOLVING PROTESTS AND PETITIONS FOR ANNULMENT OF RESULTS OF
ELECTIONS TO THE REGIONAL DIRECTORS OF THE DEPARTMENT OF LABOR AND
EMPLOYMENT.
III.
IN THE ALTERNATIVE, THE COURT OF APPEALS LIKEWISE ERRED IN NOT
ORDERING THE DISMISSAL OF THE PETITION A QUO, IN THAT:
A.) THE FILING OF THE PETITION FOR NULLIFICATION OF THE RESULT OF
ELECTION IS PREMATURE, IN VIEW OF PENDENCY OF HEREIN RESPONDENT
ATTY. VERCELES PROTEST BEFORE THE COMMISSION ON ELECTION OF
THE FEDERATION OF FREE WORKERS (FFW COMELEC) AT THE TIME OF THE
FILING OF THE SAID PETITION, HENCE, HE HAS NO CAUSE OF ACTION; AND
B.) HEREIN RESPONDENT ATTY. VERCELES HAS VIOLATED SECTION 5, RULE
7 OF THE 1997 RULES ON CIVIL PROCEDURE, AS HIS PETITION A QUO HAS
NO CERTIFICATION AGAINST FORUM SHOPPING, WHICH IS A MANDATORY
REQUIREMENT. IT IS ALSO IN UTTER DISREGARD AND IN GROSS VIOLATION
OF SUPREME COURT CIRCULAR NO. 04-94.
IV.
FINALLY, ASSUMING ARGUENDO THAT HEREIN RESPONDENT BUREAU ACTED WITH
JURISDICTION OVER THE CASE; AND ASSUMING FURTHER THAT HEREIN
RESPONDENT ATTY. VERCELES HAS A CAUSE OF ACTION, DESPITE THE
PENDENCY OF HIS PROTEST BEFORE FFWS COMELEC AT THE TIME HE FILED HIS
PETITION A QUO; AND ASSUMING FINALLY, THAT HEREIN RESPONDENT ATTY.
VERCELES BE EXCUSED IN DISREGARDING THE MANDATORY REQUIREMENT ON
CERTIFICATION AGAINST FORUM SHOPPING WHICH WAS TIMELY OBJECTED
TO, THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION,
AMOUNTING TO LACK AND/OR EXCESS OF JURISDICTION, IN NOT ORDERING THE
DISMISSAL OF THE CASE FOR HAVING BEEN RENDERED MOOT AND ACADEMIC BY
A SUPERVENING EVENT THAT WAS, WHEN HEREIN RESPONDENT ATTY.
VERCELES SOUGHT APPOINTMENT AND WAS APPOINTED AS COMMISSIONER OF
THE NATIONAL LABOR RELATIONS COMMISSION (NLRC), THUS, DIVESTING
HIMSELF WITH ANY INTEREST WITH MATTERS RELATING TO HIS FORMER
MEMBERSHIP AND AFFILIATION WITH THE FEDERATION OF FREE WORKERS (FFW),
HENCE, HE IS NO LONGER A REAL PARTY IN INTEREST, AS HE DOES NOT STAND
TO BE INJURED OR BENEFITED BY THE JUDGMENT IN THE INSTANT CASE.25
Atty. Montao contends that the CA gravely erred in upholding the jurisdiction of the BLR; in
not declaring as premature the petition in view of the pending protest before FFW
COMELEC; in not finding that the petition violated the rule on non-forum shopping; in not
dismissing the case for being moot in view of the appointment of Atty. Verceles as NLRC
Commissioner; and in granting the petition to annul his election as FFW National VicePresident on the ground that FFW Staff Association is not a legitimate labor organization.

Our Ruling
The petition is devoid of merit.
The BLR has jurisdiction over intra-union disputes involving a federation.
We find no merit in petitioners claim that under Section 6 of Rule
XV26 in relation to Section 1 of Rule XIV27 of Book V of the Omnibus Rules Implementing the
Labor Code, it is the Regional Director of the DOLE and not the BLR who has jurisdiction
over election protests.
Section 226 of the Labor Code28 clearly provides that the BLR and the Regional Directors of
DOLE have concurrent jurisdiction over inter-union and intra-union disputes. Such disputes
include the conduct or nullification of election of union and workers association
officers.29 There is, thus, no doubt as to the BLRs jurisdiction over the instant dispute
involving member-unions of a federation arising from disagreement over the provisions of the
federations constitution and by-laws.
We agree with BLRs observation that:
Rule XVI lays down the decentralized intra-union dispute settlement mechanism. Section 1
states that any complaint in this regard shall be filed in the Regional Office where the union
is domiciled. The concept of domicile in labor relations regulation is equivalent to the place
where the union seeks to operate or has established a geographical presence for purposes
of collective bargaining or for dealing with employers concerning terms and conditions of
employment.
The matter of venue becomes problematic when the intra-union dispute involves a
federation, because the geographical presence of a federation may encompass more than
one administrative region. Pursuant to its authority under Article 226, this Bureau exercises
original jurisdiction over intra-union disputes involving federations. It is well-settled that FFW,
having local unions all over the country, operates in more than one administrative region.
Therefore, this Bureau maintains original and exclusive jurisdiction over disputes arising from
any violation of or disagreement over any provision of its constitution and by-laws.30
The petition to annul Atty. Montaos election as VP was not prematurely filed.
There is likewise no merit to petitioners argument that the petition should have been
immediately dismissed due to a pending and unresolved protest before the FFW COMELEC
pursuant to Section 6, Rule XV, Book V of the Omnibus Rules Implementing the Labor
Code.31
It is true that under the Implementing Rules, redress must first be sought within the
organization itself in accordance with its constitution and by-laws. However, this requirement
is not absolute but yields to exception under varying circumstances.32 In the case at bench,
Atty. Verceles made his protest over Atty. Montaos candidacy during the plenary session
before the holding of the election proceedings. The FFW COMELEC, notwithstanding its
reservation and despite objections from certain convention delegates, allowed Atty.
Montaos candidacy and proclaimed him winner for the position. Under the rules, the
committee on election shall endeavor to settle or resolve all protests during or immediately

after the close of election proceedings and any protest left unresolved shall be resolved by
the committee within five days after the close of the election proceedings.33 A day or two
after the election, Atty. Verceles made his written/formal protest over Atty. Montaos
candidacy/proclamation with the FFW COMELEC. He exhausted the remedies under the
constitution and by-laws to have his protest acted upon by the proper forum and even asked
for a formal hearing on the matter. Still, the FFW COMELEC failed to timely act thereon.
Thus, Atty. Verceles had no other recourse but to take the next available remedy to protect
the interest of the union he represents as well as the whole federation, especially so that
Atty. Montao, immediately after being proclaimed, already assumed and started to perform
the duties of the position. Consequently, Atty. Verceles properly sought redress from the
BLR so that the right to due process will not be violated. To insist on the contrary is to render
the exhaustion of remedies within the union as illusory and vain.34
The allegation regarding certification against forum shopping was belatedly raised.
Atty. Montao accuses Atty. Verceles of violating the rules on forum shopping. We note
however that this issue was only raised for the first time in Atty. Montaos motion for
reconsideration of the Decision of the CA, hence, the same deserves no merit. It is settled
that new issues cannot be raised for the first time on appeal or on motion for
reconsideration.35 While this allegation is related to the ground of forum shopping alleged by
Atty. Montao at the early stage of the proceedings, the latter, as a ground for the dismissal
of actions, is separate and distinct from the failure to submit a proper certificate against
forum shopping.36
There is necessity to resolve the case despite the issues having become moot.
During the pendency of this case, the challenged term of office held and served by Atty.
Montao expired in 2006, thereby rendering the issues of the case moot. In addition, Atty.
Verceles appointment in 2003 as NLRC Commissioner rendered the case moot as such
supervening event divested him of any interest in and affiliation with the federation in
accordance with Article 213 of the Labor Code. However, in a number of cases,37 we still
delved into the merits notwithstanding supervening events that would ordinarily render the
case moot, if the issues arecapable of repetition, yet evading review, as in this case.
As manifested by Atty. Verceles, Atty. Montao ran and won as FFW National President after
his challenged term as FFW National Vice-President had expired. It must be stated at this
juncture that the legitimacy of Atty. Montaos leadership as National President is beyond our
jurisdiction and is not in issue in the instant case. The only issue for our resolution is
petitioners qualification to run as FFW National Vice-President during the May 26-27, 2001
elections. We find it necessary and imperative to resolve this issue not only to prevent further
repetition but also to clear any doubtful interpretation and application of the provisions of
FFW Constitution & By-laws in order to ensure credible future elections in the interest and
welfare of affiliate unions of FFW.
Atty. Montao is not qualified to run as FFW National Vice-President in view of the
prohibition established in Section 76, Article XIX of the 1998 FFW Constitution and ByLaws.
1awph!1

Section 76, Article XIX of the FFW Constitution and By-laws provides that no member of the
Governing Board shall at the same time be an employee in the staff of the federation. There
is no dispute that Atty. Montao, at the time of his nomination and election for the position in
the Governing Board, is the head of FFW Legal Center and the President of FFW Staff

Association. Even after he was elected, albeit challenged, he continued to perform his
functions as staff member of FFW and no evidence was presented to show that he tendered
his resignation.38 On this basis, the FFW COMELEC disqualified Atty. Montao. The BLR,
however, overturned FFW COMELECs ruling and held that the applicable provision is
Section 26 of Article VIII. The CA subsequently affirmed this ruling of the BLR but held Atty.
Montao unqualified for the position for failing to meet the requirements set forth therein.
We find that both the BLR and CA erred in their findings.
To begin with, FFW COMELEC is vested with authority and power, under the FFW
Constitution and By-Laws, to screen candidates and determine their qualifications and
eligibility to run in the election and to adopt and promulgate rules concerning the conduct of
elections.39 Under the Rules Implementing the Labor Code, the Committee shall have the
power to prescribe rules on the qualification and eligibility of candidates and such other rules
as may facilitate the orderly conduct of elections.40 The Committee is also regarded as the
final arbiter of all election protests.41 From the foregoing, FFW COMELEC, undeniably, has
sufficient authority to adopt its own interpretation of the explicit provisions of the federations
constitution and by-laws and unless it is shown to have committed grave abuse of discretion,
its decision and ruling will not be interfered with. The FFW Constitution and By-laws are clear
that no member of the Governing Board shall at the same time perform functions of the rankand-file staff. The BLR erred in disregarding this clear provision. The FFW COMELECs
ruling which considered Atty. Montaos candidacy in violation of the FFW Constitution is
therefore correct.
We, thus, concur with the CA that Atty. Montao is not qualified to run for the position but not
for failure to meet the requirement specified under Section 26 (d) of Article VIII of FFW
Constitution and By-Laws. We note that the CAs declaration of the illegitimate status of FFW
Staff Association is proscribed by law, owing to the preclusion of collateral attack.42 We
nonetheless resolve to affirm the CAs finding that Atty. Montao is disqualified to run for the
position of National Vice-President in view of the proscription in the FFW Constitution and
By-Laws on federation employees from sitting in its Governing Board. Accordingly, the
election of Atty. Montao as FFW Vice-President is null and void.
WHEREFORE, the petition is DENIED. The assailed May 28, 2004 Decision of the Court of
Appeals in CA-G.R. SP No. 71731 nullifying the election of Atty. Allan S. Montao as FFW
National Vice-President and the June 28, 2005 Resolution denying the Motion for
Reconsideration are AFFIRMED.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC

G.R. No. 78909 June 30, 1989

MATERNITY CHILDREN'S HOSPITAL, represented by ANTERA L. DORADO,
President, petitioner,
vs.
THE HONORABLE SECRETARY OF LABOR AND THE REGIONAL DlRECTOR OF
LABOR, REGION X,respondents.

MEDIALDEA, J.:
This is a petition for certiorari seeking the annulment of the Decision of the respondent
Secretary of Labor dated September 24, 1986, affirming with modification the Order of
respondent Regional Director of Labor, Region X, dated August 4, 1986, awarding salary
differentials and emergency cost of living allowances (ECOLAS) to employees of petitioner,
and the Order denying petitioner's motion for reconsideration dated May 13, 1987, on the
ground of grave abuse of discretion.
Petitioner is a semi-government hospital, managed by the Board of Directors of the Cagayan
de Oro Women's Club and Puericulture Center, headed by Mrs. Antera Dorado, as holdover
President. The hospital derives its finances from the club itself as well as from paying
patients, averaging 130 per month. It is also partly subsidized by the Philippine Charity
Sweepstakes Office and the Cagayan De Oro City government.
Petitioner has forty-one (41) employees. Aside from salary and living allowances, the
employees are given food, but the amount spent therefor is deducted from their respective
salaries (pp. 77-78, Rollo).
On May 23, 1986, ten (10) employees of the petitioner employed in different
capacities/positions filed a complaint with the Office of the Regional Director of Labor and
Employment, Region X, for underpayment of their salaries and ECOLAS, which was
docketed as ROX Case No. CW-71-86.
On June 16, 1986, the Regional Director directed two of his Labor Standard and Welfare
Officers to inspect the records of the petitioner to ascertain the truth of the allegations in the
complaints (p. 98, Rollo). Payrolls covering the periods of May, 1974, January, 1985,
November, 1985 and May, 1986, were duly submitted for inspection.
On July 17, 1986, the Labor Standard and Welfare Officers submitted their report confirming
that there was underpayment of wages and ECOLAs of all the employees by the petitioner,
the dispositive portion of which reads:
IN VIEW OF THE FOREGOING, deficiency on wage and ecola as verified
and confirmed per review of the respondent payrolls and interviews with the
complainant workers and all other information gathered by the team, it is
respectfully recommended to the Honorable Regional Director, this office,
that Antera Dorado, President be ORDERED to pay the amount of SIX
HUNDRED FIFTY FOUR THOUSAND SEVEN HUNDRED FIFTY SIX &
01/100 (P654,756.01), representing underpayment of wages and ecola to the
THIRTY SIX (36) employees of the said hospital as appearing in the attached

Annex "F" worksheets and/or whatever action equitable under the premises.
(p. 99, Rollo)
Based on this inspection report and recommendation, the Regional Director issued an Order
dated August 4, 1986, directing the payment of P723,888.58, representing underpayment of
wages and ECOLAs to all the petitioner's employees, the dispositive portion of which reads:
WHEREFORE, premises considered, respondent Maternity and Children
Hospital is hereby ordered to pay the above-listed complainants the total
amount indicated opposite each name, thru this Office within ten (10) days
from receipt thereof. Thenceforth, the respondent hospital is also ordered to
pay its employees/workers the prevailing statutory minimum wage and
allowance.
SO ORDERED. (p. 34, Rollo)
Petitioner appealed from this Order to the Minister of Labor and Employment, Hon. Augusto
S. Sanchez, who rendered a Decision on September 24, 1986, modifying the said Order in
that deficiency wages and ECOLAs should be computed only from May 23, 1983 to May 23,
1986, the dispositive portion of which reads:
WHEREFORE, the August 29, 1986 order is hereby MODIFIED in that the
deficiency wages and ECOLAs should only be computed from May 23, 1983
to May 23, 1986. The case is remanded to the Regional Director, Region X,
for recomputation specifying the amounts due each the complainants under
each of the applicable Presidential Decrees. (p. 40, Rollo)
On October 24, 1986, the petitioner filed a motion for reconsideration which was denied by
the Secretary of Labor in his Order dated May 13, 1987, for lack of merit (p. 43 Rollo).
The instant petition questions the all-embracing applicability of the award involving salary
differentials and ECOLAS, in that it covers not only the hospital employees who signed the
complaints, but also those (a) who are not signatories to the complaint, and (b) those who
were no longer in the service of the hospital at the time the complaints were filed.
Petitioner likewise maintains that the Order of the respondent Regional Director of Labor, as
affirmed with modifications by respondent Secretary of Labor, does not clearly and distinctly
state the facts and the law on which the award was based. In its "Rejoinder to Comment",
petitioner further questions the authority of the Regional Director to award salary differentials
and ECOLAs to private respondents, (relying on the case of Encarnacion vs. Baltazar, G.R.
No. L-16883, March 27, 1961, 1 SCRA 860, as authority for raising the additional issue of
lack of jurisdiction at any stage of the proceedings, p. 52, Rollo), alleging that the original and
exclusive jurisdiction over money claims is properly lodged in the Labor Arbiter, based on
Article 217, paragraph 3 of the Labor Code.
The primary issue here is whether or not the Regional Director had jurisdiction over the case
and if so, the extent of coverage of any award that should be forthcoming, arising from his
visitorial and enforcement powers under Article 128 of the Labor Code. The matter of
whether or not the decision states clearly and distinctly statement of facts as well as the law
upon which it is based, becomes relevant after the issue on jurisdiction has been resolved.

This is a labor standards case, and is governed by Art. 128-b of the Labor Code, as
amended by E.O. No. 111. Labor standards refer to the minimum requirements prescribed
by existing laws, rules, and regulations relating to wages, hours of work, cost of living
allowance and other monetary and welfare benefits, including occupational, safety, and
health standards (Section 7, Rule I, Rules on the Disposition of Labor Standards Cases in
the Regional Office, dated September 16, 1987). 1 Under the present rules, a Regional Director
exercises both visitorial and enforcement power over labor standards cases, and is therefore
empowered to adjudicate money claims, provided there stillexists an employer-employee
relationship, and the findings of the regional office is not contested by the employer concerned.
Prior to the promulgation of E.O. No. 111 on December 24, 1986, the Regional Director's
authority over money claims was unclear. The complaint in the present case was filed on
May 23, 1986 when E.O. No. 111 was not yet in effect, and the prevailing view was that
stated in the case of Antonio Ong, Sr. vs. Henry M. Parel, et al., G.R. No. 76710, dated
December 21, 1987, thus:
. . . the Regional Director, in the exercise of his visitorial and enforcement
powers under Article 128 of the Labor Code, has no authority to award
money claims, properly falling within the jurisdiction of the labor arbiter. . . .
. . . If the inspection results in a finding that the employer has violated certain
labor standard laws, then the regional director must order the necessary
rectifications. However, this does not include adjudication of money claims,
clearly within the ambit of the labor arbiter's authority under Article 217 of the
Code.
The Ong case relied on the ruling laid down in Zambales Base Metals Inc. vs. The Minister of
Labor, et al., (G.R. Nos. 73184-88, November 26, 1986, 146 SCRA 50) that the "Regional
Director was not empowered to share in the original and exclusive jurisdiction conferred on
Labor Arbiters by Article 217."
We believe, however, that even in the absence of E. O. No. 111, Regional Directors already
had enforcement powers over money claims, effective under P.D. No. 850, issued on
December 16, 1975, which transferred labor standards cases from the arbitration system to
the enforcement system.
To clarify matters, it is necessary to enumerate a series of rules and provisions of law on the
disposition of labor standards cases.
Prior to the promulgation of PD 850, labor standards cases were an exclusive function of
labor arbiters, under Article 216 of the then Labor Code (PD No. 442, as amended by PD
570-a), which read in part:
Art. 216. Jurisdiction of the Commission. The Commission shall have
exclusive appellate jurisdiction over all cases decided by the Labor Arbiters
and compulsory arbitrators.
The Labor Arbiters shall have exclusive jurisdiction to hear and decide the
following cases involving all workers whether agricultural or non-agricultural.
xxx xxx xxx

(c) All money claims of workers, involving non-payment or

underpayment of wages, overtime compensation, separation
pay, maternity leave and other money claims arising from
employee-employer relations, except claims for workmen's
compensation, social security and medicare benefits;
(d) Violations of labor standard laws;
xxx xxx xxx
(Emphasis supplied)
The Regional Director exercised visitorial rights only under then Article 127 of the Code as
follows:
ART. 127. Visitorial Powers. The Secretary of Labor or his duly authorized
representatives, including, but not restricted, to the labor inspectorate, shall
have access to employers' records and premises at any time of the day or
night whenever work is being undertaken therein, and the right to copy
therefrom, to question any employee and investigate any fact, condition or
matter which may be necessary to determine violations or in aid in the
enforcement of this Title and of any Wage Order or regulation issued
pursuant to this Code.
With the promulgation of PD 850, Regional Directors were given enforcement powers, in
addition to visitorial powers. Article 127, as amended, provided in part:
SEC. 10. Article 127 of the Code is hereby amended to read as follows:
Art. 127. Visitorial and enforcement powers.
xxx xxx xxx
(b) The Secretary of Labor or his duly
authorized representatives shall have the
power to order and administer, after due
notice and hearing, compliance with the labor
standards provisions of this Code based on
the findings of labor regulation officers or
industrial safety engineers made in the course
of inspection, and to issue writs of execution
to the appropriate authority for the
enforcement of their order.
xxx xxx xxx
Labor Arbiters, on the other hand, lost jurisdiction over labor standards cases. Article 216, as
then amended by PD 850, provided in part:
SEC. 22. Article 216 of the Code is hereby amended to read as follows:

Art. 216. Jurisdiction of Labor Arbiters and the Commission.

(a) The Labor Arbiters shall have exclusive jurisdiction to
hear and decide the following cases involving all workers,
whether agricultural or non-agricultural:
xxx xxx xxx
(3) All money claims of workers involving nonpayment or underpayment of wages, overtime
or premium compensation, maternity or
service incentive leave, separation pay and
other money claims arising from employeremployee relations, except claims for
employee's compensation, social security and
medicare benefits and as otherwise provided
in Article 127 of this Code.
xxx xxx xxx
(Emphasis supplied)
Under the then Labor Code therefore (PD 442 as amended by PD 570-a, as further
amended by PD 850), there were three adjudicatory units: The Regional Director, the Bureau
of Labor Relations and the Labor Arbiter. It became necessary to clarify and consolidate all
governing provisions on jurisdiction into one document. 2 On April 23, 1976, MOLE Policy
Instructions No. 6 was issued, and provides in part (on labor standards cases) as follows:
POLICY INSTRUCTIONS NO. 6
TO: All Concerned
SUBJECT: DISTRIBUTION OF JURISDICTION OVER LABOR CASES
xxx xxx xxx
1. The following cases are under the exclusive original
jurisdiction of the Regional Director.
a) Labor standards cases arising from
violations of labor standard lawsdiscovered in
the course of inspection or complaints where
employer-employee relations still exist;
xxx xxx xxx
2. The following cases are under the exclusive original
jurisdiction of the Conciliation Section of the Regional Office:
a) Labor standards cases where employeremployee relations no longer exist;

xxx xxx xxx

6. The following cases are certifiable to the Labor Arbiters:
a) Cases not settled by the Conciliation
Section of the Regional Office, namely:
1) labor standard cases where employeremployee relations no longer exist;
xxx xxx xxx
(Emphasis supplied)
MOLE Policy Instructions No. 7 (undated) was likewise subsequently issued, enunciating the
rationale for, and the scope of, the enforcement power of the Regional Director, the first and
second paragraphs of which provide as follows:
POLICY INSTRUCTIONS NO. 7
TO: All Regional Directors
SUBJECT: LABOR STANDARDS CASES
Under PD 850, labor standards cases have been taken from the arbitration
system and placed under the enforcement system, except where a)
questions of law are involved as determined by the Regional Director, b) the
amount involved exceeds P100,000.00 or over 40% of the equity of the
employer, whichever is lower, c) the case requires evidentiary matters not
disclosed or verified in the normal course of inspection, or d) there is no more
employer-employee relationship.
The purpose is clear: to assure the worker the rights and benefits due to him
under labor standards laws without having to go through arbitration. The
worker need not litigate to get what legally belongs to him. The whole
enforcement machinery of the Department of Labor exists to insure its
expeditious delivery to him free of charge. (Emphasis supplied)
Under the foregoing, a complaining employee who was denied his rights and benefits due
him under labor standards law need not litigate. The Regional Director, by virtue of his
enforcement power, assured "expeditious delivery to him of his rights and benefits free of
charge", provided of course, he was still in the employ of the firm.
After PD 850, Article 216 underwent a series of amendments (aside from being re-numbered
as Article 217) and with it a corresponding change in the jurisdiction of, and supervision over,
the Labor Arbiters:
1. PD 1367 (5-1-78) gave Labor Arbiters exclusive
jurisdiction over unresolved issues in collective bargaining,
etc., and those cases arising from employer-employee
relationsduly indorsed by the Regional Directors. (It also

removed his jurisdiction over moral or other damages) In

other words, the Labor Arbiter entertained cases certified to
him. (Article 228, 1978 Labor Code.)
2. PD 1391 (5-29-78) all regional units of the National
Labor Relations Commission (NLRC) were integrated into the
Regional Offices Proper of the Ministry of Labor; effectively
transferring direct administrative control and supervision over
the Arbitration Branch to the Director of the Regional Office of
the Ministry of Labor. "Conciliable cases" which were thus
previously under the jurisdiction of the defunct Conciliation
Section of the Regional Office for purposes of conciliation or
amicable settlement, became immediately assignable to the
Arbitration Branch for joint conciliation and compulsory
arbitration. In addition, the Labor Arbiter had jurisdiction even
over termination and labor-standards cases that may be
assigned to them for compulsory arbitration by the Director of
the Regional Office. PD 1391 merged conciliation and
compulsory arbitration functions in the person of the Labor
Arbiter. The procedure governing the disposition of cases at
the Arbitration Branch paralleled those in the Special Task
Force and Field Services Division, with one major exception:
the Labor Arbiter exercised full and untrammelled authority in
the disposition of the case, particularly in the substantive
aspect, his decisions and orders subject to review only on
appeal to the NLRC. 3
3. MOLE Policy Instructions No. 37 Because of the
seemingly overlapping functions as a result of PD 1391,
MOLE Policy Instructions No. 37 was issued on October 7,
1978, and provided in part:
POLICY INSTRUCTIONS NO. 37
TO: All Concerned
SUBJECT: ASSIGNMENT OF CASES TO LABOR ARBITERS
Pursuant to the provisions of Presidential Decree No. 1391
and to insure speedy disposition of labor cases, the following
guidelines are hereby established for the information and
guidance of all concerned.
1. Conciliable Cases.
Cases which are conciliable per se i.e., (a) labor standards
cases where employer-employee relationship no longer
exists; (b) cases involving deadlock in collective bargaining,
except those falling under P.D. 823, as amended; (c) unfair
labor practice cases; and (d) overseas employment cases,
except those involving overseas seamen, shall be assigned
by the Regional Director to the Labor Arbiter for conciliation

and arbitration without coursing them through the conciliation

section of the Regional Office.
2. Labor Standards Cases.
Cases involving violation of labor standards laws where
employer- employee relationshipstill exists shall be assigned
to the Labor Arbiters where:
a) intricate questions of law are involved; or
b) evidentiary matters not disclosed or verified
in the normal course of inspection by labor
regulations officers are required for their
proper disposition.
3. Disposition of Cases.
When a case is assigned to a Labor Arbiter, all issues raised
therein shall be resolved by him including those which are
originally cognizable by the Regional Director to avoid
multiplicity of proceedings. In other words, the whole case,
and not merely issues involved therein, shall be assigned to
and resolved by him.
xxx xxx xxx
(Emphasis supplied)
4. PD 1691(5-1-80) original and exclusive jurisdiction
over unresolved issues in collective bargaining and money
claims, which includes moral or other damages.
Despite the original and exclusive jurisdiction of labor arbiters over money
claims, however, the Regional Director nonetheless retained his enforcement
power, and remained empowered to adjudicate uncontested money claims.
5. BP 130 (8-21-8l) strengthened voluntary arbitration. The
decree also returned the Labor Arbiters as part of the NLRC,
operating as Arbitration Branch thereof.
6. BP 227(6-1- 82) original and exclusive jurisdiction over
questions involving legality of strikes and lock-outs.
The present petition questions the authority of the Regional Director to issue the Order,
dated August 4, 1986, on the basis of his visitorial and enforcement powers under Article 128
(formerly Article 127) of the present Labor Code. It is contended that based on the rulings in
the Ong vs. Parel (supra) and the Zambales Base Metals, Inc. vs. TheMinister of Labor
(supra) cases, a Regional Director is precluded from adjudicating money claims on the
ground that this is an exclusive function of the Labor Arbiter under Article 217 of the present
Code.

On August 4, 1986, when the order was issued, Article 128(b) 4 read as follows:
(b) The Minister of Labor or his duly authorized
representatives shall have the power to order and administer,
after due notice and hearing, compliance with the labor
standards provisions of this Code based on the findings of
labor regulation officers or industrial safety engineers made in
the course of inspection, and to issue writs of execution to the
appropriate authority for the enforcement of their order,
except in cases where the employer contests the findings of
the labor regulations officer and raises issues which cannot
be resolved without considering evidentiary matters that are
not verifiable in the normal course of inspection. (Emphasis
supplied)
On the other hand, Article 217 of the Labor Code as amended by P.D. 1691, effective May 1,
1980; Batas Pambansa Blg. 130, effective August 21, 1981; and Batas Pambansa Blg. 227,
effective June 1, 1982, inter alia, provides:
ART. 217. Jurisdiction of Labor Arbiters and the Commission. (a) The
Labor Arbiters shall have theoriginal and exclusive jurisdiction to hear and
decide within thirty (30) working days after submission of the case by the
parties for decision, the following cases involving all workers, whether
agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Those that workers may file involving wages, hours of work
and other terms and conditions of employment;
3. All money claims of workers, including those based on nonpayment or underpayment of wages, overtime compensation,
separation pay and other benefits provided by law or
appropriate agreement, except claims for employees'
compensation, social security, medicare and maternity
benefits;
4. Cases involving household services; and
5. Cases arising from any violation of Article 265 of this Code,
including questions involving the legality of strikes and lockouts. (Emphasis supplied)
The Ong and Zambales cases involved workers who were still connected with the company.
However, in the Ong case, the employer disputed the adequacy of the evidentiary foundation
(employees' affidavits) of the findings of the labor standards inspectors while in the
Zambales case, the money claims which arose from alleged violations of labor standards
provisions were not discovered in the course of normal inspection. Thus, the provisions of
MOLE Policy Instructions Nos. 6, (Distribution of Jurisdiction Over Labor Cases) and 37
(Assignment of Cases to Labor Arbiters) giving Regional Directors adjudicatory powers over
uncontested money claims discovered in the course of normal inspection, provided an
employer-employee relationship still exists, are inapplicable.

In the present case, petitioner admitted the charge of underpayment of wages to workers still
in its employ; in fact, it pleaded for time to raise funds to satisfy its obligation. There was thus
no contest against the findings of the labor inspectors.
Barely less than a month after the promulgation on November 26, 1986 of the Zambales
Base Metals case, Executive Order No. 111 was issued on December 24, 1986, 5 amending
Article 128(b) of the Labor Code, to read as follows:
(b) THE PROVISIONS OF ARTICLE 217 OF THIS CODE TO
THE CONTRARY NOTWITHSTANDING AND IN CASES
WHERE THE RELATIONSHIP OF EMPLOYER-EMPLOYEE
STILL EXISTS, the Minister of Labor and Employment or his
duly authorized representatives shall have the power to order
and administer, after due notice and hearing, compliance with
the labor standards provisions of this Code AND OTHER
LABOR LEGISLATION based on the findings of labor
regulation officers or industrial safety engineers made in the
course of inspection, and to issue writs of execution to the
appropriate authority for the enforcement of their orders,
except in cases where the employer contests the findings of
the labor regulation officer and raises issues which cannot be
resolved without considering evidentiary matters that are not
verifiable in the normal course of inspection. (Emphasis
supplied)
As seen from the foregoing, EO 111 authorizes a Regional Director to order compliance by
an employer with labor standards provisions of the Labor Code and other legislation. It is Our
considered opinion however, that the inclusion of the phrase, " The provisions of Article 217
of this Code to the contrary notwithstanding and in cases where the relationship of employeremployee still exists" ... in Article 128(b), as amended, above-cited,
merelyconfirms/reiterates the enforcement adjudication authority of the Regional Director
over uncontested money claimsin cases where an employer-employee relationship still
exists. 6
Viewed in the light of PD 850 and read in coordination with MOLE Policy Instructions Nos. 6,
7 and 37, it is clear that it has always been the intention of our labor authorities to provide
our workers immediate access (when still feasible, as where an employer-employee
relationship still exists) to their rights and benefits, without being inconvenienced by
arbitration/litigation processes that prove to be not only nerve-wracking, but financially
burdensome in the long run.
Note further the second paragraph of Policy Instructions No. 7 indicating that the transfer of
labor standards cases from the arbitration system to the enforcement system is
. . to assure the workers the rights and benefits due to him under labor
standard laws, without having to go through arbitration. . .
so that
. . the workers would not litigate to get what legally belongs to him. ..
ensuring delivery . . free of charge.

Social justice legislation, to be truly meaningful and rewarding to our workers, must not be
hampered in its application by long-winded arbitration and litigation. Rights must be asserted
and benefits received with the least inconvenience. Labor laws are meant to promote, not
defeat, social justice.
This view is in consonance with the present "Rules on the Disposition of Labor Standard
Cases in the Regional Offices " 7 issued by the Secretary of Labor, Franklin M. Drilon on
September 16, 1987.
Thus, Sections 2 and 3 of Rule II on "Money Claims Arising from Complaint Routine
Inspection", provide as follows:
Section 2. Complaint inspection. All such complaints shall immediately be
forwarded to the Regional Director who shall refer the case to the appropriate
unit in the Regional Office for assignment to a Labor Standards and Welfare
Officer (LSWO) for field inspection. When the field inspection does not
produce the desired results, the Regional Director shall summon the parties
for summary investigation to expedite the disposition of the case. . . .
Section 3. Complaints where no employer-employee relationship actually
exists. Where employer-employee relationship no longer exists by reason
of the fact that it has already been severed, claims for payment of monetary
benefits fall within the exclusive and original jurisdiction of the labor arbiters. .
. . (Emphasis supplied)
Likewise, it is also clear that the limitation embodied in MOLE Policy Instructions No. 7 to
amounts not exceeding P100,000.00 has been dispensed with, in view of the following
provisions of pars. (b) and (c), Section 7 on "Restitution", the same Rules, thus:
xxx xxx xxx
(b) Plant-level restitutions may be effected for money claims
not exceeding Fifty Thousand (P50,000.00). . . .
(c) Restitutions in excess of the aforementioned amount shall
be effected at the Regional Office or at the worksite subject to
the prior approval of the Regional Director.
which indicate the intention to empower the Regional Director to award money claims in
excess of P100,000.00;provided of course the employer does not contest the findings made,
based on the provisions of Section 8 thereof:
Section 8. Compromise agreement. Should the parties arrive at an
agreement as to the whole or part of the dispute, said agreement shall be
reduced in writing and signed by the parties in the presence of the Regional
Director or his duly authorized representative.
E.O. No. 111 was issued on December 24, 1986 or three (3) months after the promulgation
of the Secretary of Labor's decision upholding private respondents' salary differentials and
ECOLAs on September 24, 1986. The amendment of the visitorial and enforcement powers
of the Regional Director (Article 128-b) by said E.O. 111 reflects the intention enunciated in

Policy Instructions Nos. 6 and 37 to empower the Regional Directors to resolveuncontested

money claims in cases where an employer-employee relationship still exists. This intention
must be given weight and entitled to great respect. As held in Progressive Workers' Union,
et. al. vs. F.P. Aguas, et. al. G.R. No. 59711-12, May 29, 1985, 150 SCRA 429:
. . The interpretation by officers of laws which are entrusted to their
administration is entitled to great respect. We see no reason to detract from
this rudimentary rule in administrative law, particularly when later events
have proved said interpretation to be in accord with the legislative intent. ..
The proceedings before the Regional Director must, perforce, be upheld on the basis of
Article 128(b) as amended by E.O. No. 111, dated December 24, 1986, this executive order
"to be considered in the nature of a curative statute with retrospective application."
(Progressive Workers' Union, et al. vs. Hon. F.P. Aguas, et al. (Supra); M. Garcia vs. Judge
A. Martinez, et al., G.R. No. L- 47629, May 28, 1979, 90 SCRA 331).
We now come to the question of whether or not the Regional Director erred in extending the
award to all hospital employees. We answer in the affirmative.
The Regional Director correctly applied the award with respect to those employees
who signed the complaint, as well as those who did not sign the complaint, but were still
connected with the hospital at the time the complaint was filed (See Order, p. 33 dated
August 4, 1986 of the Regional Director, Pedrito de Susi, p. 33, Rollo).
The justification for the award to this group of employees who were not signatories to the
complaint is that the visitorial and enforcement powers given to the Secretary of Labor is
relevant to, and exercisable over establishments, not over the individual
members/employees, because what is sought to be achieved by its exercise is the
observance of, and/or compliance by, such firm/establishment with the labor standards
regulations. Necessarily, in case of an award resulting from a violation of labor legislation by
such establishment, the entire members/employees should benefit therefrom. As aptly stated
by then Minister of Labor Augusto S. Sanchez:
. . It would be highly derogatory to the rights of the workers, if after
categorically finding the respondent hospital guilty of underpayment of wages
and ECOLAs, we limit the award to only those who signed the complaint to
the exclusion of the majority of the workers who are similarly situated.
Indeed, this would be not only render the enforcement power of the Minister
of Labor and Employment nugatory, but would be the pinnacle of injustice
considering that it would not only discriminate but also deprive them of
legislated benefits.
. . . (pp. 38-39, Rollo).
This view is further bolstered by the provisions of Sec. 6, Rule II of the "Rules on the
Disposition of Labor Standards cases in the Regional Offices" (supra) presently enforced,
viz:
SECTION 6. Coverage of complaint inspection. A complaint inspection
shall not be limited to the specific allegations or violations raised by the
complainants/workers but shall be a thorough inquiry into and verification of

the compliance by employer with existing labor standards and shall cover all
workers similarly situated. (Emphasis supplied)
However, there is no legal justification for the award in favor of those employees who were
no longer connected with the hospital at the time the complaint was filed, having resigned
therefrom in 1984, viz:
1.
2.
3.
4.
5.
6.
7.
8.
9.

Jean (Joan) Venzon (See Order, p. 33, Rollo)

Rosario Paclijan
Adela Peralta
Mauricio Nagales
Consesa Bautista
Teresita Agcopra
Felix Monleon
Teresita Salvador
Edgar Cataluna; and
10. Raymond Manija ( p.7, Rollo)

The enforcement power of the Regional Director cannot legally be upheld in cases of
separated employees. Article 129 of the Labor Code, cited by petitioner (p. 54, Rollo) is not
applicable as said article is in aid of the enforcement power of the Regional Director; hence,
not applicable where the employee seeking to be paid underpayment of wages is already
separated from the service. His claim is purely a money claim that has to be the subject of
arbitration proceedings and therefore within the original and exclusive jurisdiction of the
Labor Arbiter.
Petitioner has likewise questioned the order dated August 4, 1986 of the Regional Director in
that it does not clearly and distinctly state the facts and the law on which the award is based.
We invite attention to the Minister of Labor's ruling thereon, as follows:
Finally, the respondent hospital assails the order under appeal as null and
void because it does not clearly and distinctly state the facts and the law on
which the awards were based. Contrary to the pretensions of the respondent
hospital, we have carefully reviewed the order on appeal and we found that
the same contains a brief statement of the (a) facts of the case; (b) issues
involved; (c) applicable laws; (d) conclusions and the reasons therefor; (e)
specific remedy granted (amount awarded). (p. 40,Rollo)
ACCORDINGLY, this petition should be dismissed, as it is hereby DISMISSED, as regards
all persons still employed in the Hospital at the time of the filing of the complaint, but
GRANTED as regards those employees no longer employed at that time.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC

G.R. No. 74621 February 7, 1990

BROKENSHIRE MEMORIAL HOSPITAL, INC., petitioner,
vs.
THE HONORABLE MINISTER OF LABOR & EMPLOYMENT AND BROKENSHIRE
MEMORIAL HOSPITAL EMPLOYEES AND WORKER'S UNION-FFW Represented by
EDUARDO A. AFUAN, respondents.
Renato B. Pagatpatan for petitioner.

PARAS, J.:
This petition for review by certiorari seeks the annulment or modification of the Order of
public respondent Minister of Labor dated December 9, 1985 in a case for non-compliance
with Wage Order Nos. 5 and 6 docketed as ROXI-LSED Case No. 14-85 which 1) denied
petitioner's Motion for Reconsideration dated February 3, 1986 and 2) affirmed the Order of
Regional Director Eugenio I. Sagmit, Jr., Regional Office No. XI Davao City, dated April 12,
1985, the dispositive portion of which reads as follows:
WHEREFORE, premises considered, respondent Brokenshire Memorial
Hospital, Incorporated is hereby ordered to pay the above-named workers,
through this Office, within fifteen (15) days from receipt hereof, the total sum
of TWO HUNDRED EIGHTY- FOUR THOUSAND SIX HUNDRED TWENTY
FIVE (P284,625.00) PESOS representing their living allowance under Wage
Order No. 5 covering the period from October 16, 1984 to February 28, 1985
and under Wage Order No. 6 effective November 1, 1984 to February 28,
1985. Respondent is further ordered to pay the employees who are likewise
entitled to the claims here presented, but whose names were inadvertently
omitted in the list and computation. (Rollo, p. 7)
Petitioner contends that the respondent Minister of Labor and Employment acted without, or
in excess of his jurisdiction or with grave abuse of discretion in failing to hold:
A) That the Regional Director committed grave abuse of discretion in
asserting exclusive jurisdiction and in not certifying this case to the Arbitration
Branch of the National Labor Relations Commission for a full-blown hearing
on the merits;
B) That the Regional Director erred in not ruling on the counterclaim raised
by the respondent (in the labor case, and now petitioner in this case);

C) That the Regional Director erred -in skirting the constitutional and legal
issues raised. (Rollo, p. 4)
This case originated from a complaint filed by private respondents against petitioner on
September 21, 1984 with the Regional Office of the MOLE, Region XI, Davao City for noncompliance with the provisions of Wage Order No. 5. After due healing the Regional Director
rendered a decision dated November 16, 1984 in favor of private respondents. Judgment
having become final and executory, the Regional Director issued a Writ of Execution
whereby some movable properties of the hospital (petitioner herein) were levied upon and its
operating expenses kept with the bank were garnished. The levy and garnishment were lifted
when petitioner hospital paid the claim of the private respondents (281 hospital employees)
directly, in the total amount of P163,047.50 covering the period from June 16 to October 15,
1984.
After making said payment, petitioner hospital failed to continue to comply with Wage Order
No. 5 and likewise, failed to comply with the new Wage Order No. 6 which took effect on
November 1, 1984, prompting private respondents to file against petitioner another complaint
docketed as ROXI-LSED-14-85, which is now the case at bar.
In its answer, petitioner raised the following affirmative defenses:
1) That the Regional Office of the Ministry of Labor did not acquire jurisdiction
over it for want of allegation that it has the capacity to be sued and
2) That Wage Order Nos. 5 and 6 are non-constitutional and therefore void.
Significantly petitioner never averred any counterclaim in its Answer.
After the complainants had filed their reply, petitioner filed a Motion for the Certification of the
case to the National Labor Relations Commission for a full-blown hearing on the matter,
including the counterclaim interposed that the complainants had unpaid obligations with the
Hospital which might be offset with the latter's alleged obligation to the former.
Issues having been joined, the Regional Director rendered a decision on April 12, 1985 in
favor of the complainants (private respondents herein) declaring that petitioner (respondent
therein) is estopped from questioning the acquisition of jurisdiction because its appearance
in the hearing is in itself submission to jurisdiction and that this case is merely a continuance
of a previous case where the hospital already willingly paid its obligations to the workers on
orders of the Regional Office. On the matter of the constitutionality of the Wage Order Nos. 5
and 6, the Regional Director declared that only the court can declare a law or order
unconstitutional and until so declared by the court, the Office of the Regional Director is duly
bound to enforce the law or order.
Aggrieved, petitioner appealed to the Office of the Minister of Labor, which dismissed the
appeal for lack of merit. A motion for reconsideration was likewise denied by said Office,
giving rise to the instant petition reiterating the issues earlier mentioned.
The crucial issue We are tasked to resolve is whether or not the Regional Director has
jurisdiction over money claims of workers concurrent with the Labor Arbiter.
It is worthy of note that the instant case was deliberated upon by this Court at the same time
that Briad Agro Development Corporation v. de la Cerna, G.R. No. 82805 and L.M. Camus
Engineering Corporation v. Hon. Secretary of Labor, et al. G.R. No. 83225, promulgated on

June 29,1989 and Maternity Children's Hospital vs. Hon. Secretary of Labor, et al., G.R. No.
78909, promulgated 30 June 1989, where deliberated upon; for all three (3) cases raised the
same issue of jurisdiction of the Regional Director of the Department of Labor to pass upon
money claims of employees. Hence, we will be referring to these cases, most especially the
case of Briad Agro which, as will be seen later, was reconsidered by the court.
Contrary to the claim of petitioners that the original and exclusive jurisdiction over said
money claims is properly lodged in the Labor Arbiter (relying on the case of Zambales Base
Metals Inc. v. Minister of Labor, 146 SCRA 50) and the Regional Director has no jurisdiction
over workers' money claims, the Court in the three (3) cases above-mentioned ruled that in
view of the promulgation of Executive Order No. 111, the ruling in the earlier case of
Zambales Base Metals is already abandoned. In accordance with the rulings in Briad Agro,
L.M. Camus, and Maternity Children's Hospital, the Regional Director exercises concurrent
jurisdiction with the Labor Arbiter over money claims. Thus,
. . . . Executive Order No. 111 is in the character of a curative law, that is to
say, it was intended to remedy a defect that, in the opinion of the legislative
(the incumbent Chief Executive in this case, in the exercise of her lawmaking
power under the Freedom Constitution) had attached to the provision subject
of the amendment. This is clear from the proviso: "The provisions of Article
217 to the contrary notwithstanding . . ." Plainly, the amendment was meant
to make both the Secretary of Labor (or the various Regional Directors) and
the Labor Arbiter share jurisdiction. (Briad Agro Dev. Corp. v. Sec. of
Labor, supra).
Under the present rules, a Regional Director exercises both visitorial and
enforcement power over labor standards cases, and is therefore empowered
to adj udicate money claims, provided there still existsan employer-employee
relationship, and the findings of the regional office is not contested by the
employer concerned. (Maternity Children's Hospital v. Sec. of Labor, supra).
However, it is very significant to note, at this point, that the decision in the consolidated
cases of Briad Agro Development Corp. and L.M. Camus Engineering Corp. was
reconsidered and set aside by this Court in a Resolution promulgated on November 9,1989.
In view of the enactment of Republic Act No. 6715, approved on March 2, 1989, the Court
found that reconsideration was proper.
RA 6715 amended Art. 129 and Art. 217 of the Labor Code, to read as follows:
ART. 129. Recovery of wages, simple money claims and other benefits.
Upon complaint of any interested party, the Regional Director of the
Department of Labor and Employment or any of the duly authorized hearing
officers of the Department is empowered, through summary proceeding and
after due notice, to hear and decide any matter involving the recovery of
wages and other monetary claims and benefits, including legal interest,
owing to an employee or person employed in domestic or household service
or househelper under this code, arising from employer-employee relations,
Provided, That such complaint does not include a claim for reinstatement;
Provided, further, That the aggregate money claims of each employee or
househelper do not exceed five thousand pesos (P5,000.00). The Regional
Director or hearing officer shall decide or resolve the complaint within thirty
(30) calendar days from the date of the filing of the same . . .

Any decision or resolution of the Regional Director or hearing officer pursuant

to this provision may be appealed on the same grounds provided in Article
223 of this Code, within five (5) calendar days from 11 receipt of a copy of
said decision or resolution, to the National Labor Relations Commission
which shall resolve the appeal within ten (10) calendar days from the
submission of the last pleading required or allowed under its rules.
ART. 217. Jurisdiction of Labor Arbiters and the Commission. 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 steno graphic notes, the following cases involving all
workers, whether agricultural or non-agricultural:
(1) Unfair labor practice cases;
(2) Termination disputes;
(3) If accompanied with a claim of reinstatement, those cases that workers
may file involving wages, rates of pay, hours of work and other terms and
conditions of employment;
(4) Claims for actual, moral, exemplary and other forms of damages arising
from the employer-employee relation;
(5) Cases arising from any violation of Article 264 of this Code, including
questions involving the legality of strikes and lockouts; and
(6) Except claims for employees compensation, social security, medicare and
maternity benefits, all other claims arising from employer-employee relations,
including those of persons in domestic or household service, involving an
amount not exceeding five thousand pesos (P5,000.00), whether or not
accompanied with a claim for reinstatement.
It will be observed that what in fact conferred upon Regional Directors and other hearing
officers of the Department of Labor (aside from the Labor Arbiters) adjudicative powers, i.e.,
the power to try and decide, or hear and determine any claim brought before them for
recovery of wages, simple money claims, and other benefits, is Republic Act 6715, provided
that the following requisites concur, to wit:
1) The claim is presented by an employee or person employed in domestic or
household service, or househelper under the code;
2) The claimant, no longer being employed, does not seek reinstatement;
and
3) The aggregate money claim of the employee or househelper does not
exceed five thousand pesos (P5,000.00).

In the absence of any of the three (3) requisites, the Labor Arbiters have exclusive original
jurisdiction over all claims arising from employer-employee relations, other than claims for
employee's compensation, social security, medicare and maternity benefits.
We hereby adopt the view taken by Mr. Justice Andres Narvasa in his Separate Opinion in
the case of Briad Agro Dev. Corp., as reconsidered, a portion of which reads:
In the resolution, therefore, of any question of jurisdiction over a money claim
arising from employer-employee relations, the first inquiry should be into
whether the employment relation does indeed still exist between the claimant
and the respondent.
If the relation no longer exists, and the claimant does not seek reinstatement,
the case is cognizable by the Labor Arbiter, not by the Regional Director. On
the other hand, if the employment relation still exists, or reinstatement is
sought, the next inquiry should be into the amount involved.
If the amount involved does not exceed P5,000.00, the Regional Director
undeniably has jurisdiction. But even if the amount of the claim exceeds
P5,000.00, the claim is not on that account necessary removed from the
Regional Director's competence. In respect thereof, he may still exercise the
visitorial and enforcement powers vested in him by Article 128 of the Labor
Code, as amended, supra; that is to say, he may still direct his labor
regulations officers or industrial safety engineers to inspect the employer's
premises and examine his records; and if the officers should find that there
have been violations of labor standards provisions, the Regional Director
may, after due notice and hearing, order compliance by the employer
therewith and issue a writ of execution to the appropriate authority for the
enforcement thereof. However, this power may not, to repeat, be exercised
by him where the employer contests the labor regulation officers' findings and
raises issues which cannot be resolved without considering evidentiary
matters not verifiable in the normal course of inspection. In such an event,
the case will have to be referred to the corresponding Labor Arbiter for
adjudication, since it falls within the latter's exclusive original jurisdiction.
Anent the other issue involved in the instant case, petitioner's contention that the
constitutionality of Wage Order Nos. 5 and 6 should be passed upon by the National Labor
Relations Commission, lacks merit. The Supreme Court is vested by the Constitution with the
power to ultimately declare a law unconstitutional. Without such declaration, the assailed
legislation remains operative and can be the source of rights and duties especially so in the
case at bar when petitioner complied with Wage Order No. 5 by paying the claimants the
total amount of P163,047.50, representing the latter's minimum wage increases up to
October 16, 1984, instead of questioning immediately at that stage before paying the amount
due, the validity of the order on grounds of constitutionality. The Regional Director is plainly
,without the authority to declare an order or law unconstitutional and his duty is merely to
enforce the law which stands valid, unless otherwise declared by this Tribunal to be
unconstitutional. On our part, We hereby declare the assailed Wage Orders as constitutional,
there being no provision of the 1973 Constitution (or even of both the Freedom Constitution
and the 1987 Constitution) violated by said Wage Orders, which Orders are without doubt for
the benefit of labor.

Based on the foregoing considerations, it is our shared view that the findings of the labor
regulations officers may not be deemed uncontested as to bring the case at bar within the
competence of the Regional Director, as duly authorized representative of the Secretary of
Labor, pursuant to Article 128 of the Labor Code, as amended. Considering further that the
aggregate claims involve an amount in excess of P5,000.00, We find it more appropriate that
the issue of petitioner hospital's liability therefor, including the proposal of petitioner that the
obligation of private respondents to the former in the aggregate amount of P507,237.57 be
used to offset its obligations to them, be ventilated and resolved, not in a summary
proceeding before the Regional Director under Article 128 of the Labor Code, as amended,
but in accordance With the more formal and extensive proceeding before the Labor Arbiter.
Nevertheless, it should be emphasized that the amount of the employer's liability is not quite
a factor in determining the jurisdiction of the Regional Director. However, the power to order
compliance with labor standards provisions may not be exercised where the employer
contends or questions the findings of the labor regulation officers and raises issues which
cannot be determined without taking into account evidentiary matters not verifiable in the
normal course of inspection, as in the case at bar.
Viewed in the light of RA 6715 and read in consonance with the case of Briad Agro
Development Corp., as reconsidered, We hold that the instant case falls under the exclusive
original jurisdiction of the Labor Arbiter RA 6715 is in the nature of a curative statute.
Curative statutes have long been considered valid in our jurisdiction, as long as they do not
affect vested rights. In this case, We do not see any vested right that will be impaired by the
application of RA 6715. Inasmuch as petitioner had already paid the claims of private
respondents in the amount of P163,047.50 pursuant to the decision rendered in the first
complaint, the only claim that should be deliberated upon by the Labor Arbiter should be
limited to the second amount given by the Regional Director in the second complaint
together with the proposal to offset the obligations.
WHEREFORE, the assailed decision of the Regional Director dated April 12, 1985, is SET
ASIDE. The case is REFERRED, if the respondents are so minded, to the Labor Arbiter for
proper proceedings.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 175492

February 27, 2013

CARLOS L. OCTAVIO, Petitioner,

vs.
PIDLIPPINE LONG DISTANCE TELEPHONE COMPANY, Respondent.

DECISION
DEL CASTILLO, J.:
Every Collective Bargaining Agreement (CBA) shall provide a grievance machinery to which
all disputes arising from its implementation or interpretation will be subjected to compulsory
negotiations. This essential feature of a CBA provides the parties with a simple, inexpensive
and expedient system of finding reasonable and acceptable solutions to disputes and helps
in the attainment of a sound and stable industrial peace.
Before us is a Petition for Review on Certiorari1 assailing the August 31, 2006 Decision2 of
the Court of Appeals (CA) in CA-G.R. SP No. 93578, which dismissed petitioner Carlos L.
Octavio's (Octavio) Petition for Certiorari3assailing the September 30, 2005 Resolution4 of
the National Labor Relations Commission (NLRC). Said NLRC Resolution affirmed the
August 30, 2004 Decision5 of the Labor Arbiter which dismissed Octavio's Complaint for
payment of salary increases against respondent Philippine Long Distance Company (PLDT).
Likewise assailed in this Petition is the November 15, 2006 Resolution6 which denied
Octavios Motion for Reconsideration.7
Factual Antecedents
On May 28, 1999, PLDT and Gabay ng Unyon sa Telekominaksyon ng mga
Superbisor (GUTS) entered into a CBA covering the period January 1, 1999 to December
31, 2001 (CBA of 1999-2001). Article VI, Section I thereof provides:
Section 1. The COMPANY agrees to grant the following across-theboard salary increase
during the three years covered by this Agreement to all employees covered by the
bargaining unit as of the given dates:
Effective January 1, 1999 10% of basic wage or P2,000.00 whichever is higher;
Effective January 1, 2000 11% of basic wage or P2,250.00 whichever is higher;
Effective January 1, 2001 12% of basic wage or P2,500.00 whichever is higher.8
On October 1, 2000, PLDT hired Octavio as Sales System Analyst I on a probationary
status. He became a member of GUTS. When Octavio was regularized on January 1, 2001,
he was receiving a monthly basic salary ofP10,000.00. On February 1, 2002, he was
promoted to the position of Sales System Analyst 2 and his salary was increased
to P13,730.00.
On May 31, 2002, PLDT and GUTS entered into another CBA covering the period January 1,
2002 to December 31, 2004 (CBA of 2002-2004) which provided for the following salary
increases: 8% of basic wage or P2,000.00 whichever is higher for the first year (2002); 10%
of basic wage or P2,700.00 whichever is higher for the second year (2003); and, 10% of
basic wage or P2,400.00 whichever is higher for the third year (2004).9
Claiming that he was not given the salary increases of P2,500.00 effective January 1, 2001
and P2,000.00 effective January 1, 2002, Octavio wrote the President of GUTS, Adolfo
Fajardo (Fajardo).10 Acting thereon and on similar grievances from other GUTS members,

Fajardo wrote the PLDT Human Resource Head to inform management of the GUTS
members claim for entitlement to the across-the-board salary increases.11
Accordingly, the Grievance Committee convened on October 7, 2002 consisting of
representatives from PLDT and GUTS. The Grievance Committee, however, failed to reach
an agreement. In effect, it denied Octavios demand for salary increases. The Resolution
(Committee Resolution), reads as follows:
October 7, 2002
UNION ISSUE :
1. Mr. Carlos L. Octavio, Sales System Analyst I, CCIM-Database, was
promoted to S2 from S1 last February 01, 2002. He claimed that the
whole P2,000 (1st yr. GUTS-CBA increase) was not given to him.
2. He was hired as a probationary employee on October 01, 2000 and was
regularized on January 01, 2001. He claimed that Management failed to
grant him the GUTS-CBA increase last January 2001.
MANAGEMENT POSITION :
Issue # 1:
A) Promotional Policy: adjustment of basic monthly salary to the minimum
salary of the new position.
B) Mr. Octavios salary at the time of his promotion and before the conclusion
of the GUTS CBA was P10,000.00.
C) Upon the effectivity of his promotion on February 1, 2002, his basic
monthly salary was adjusted to P13,730.00, the minimum salary of the new
position.
D) In June 2002, the GUTS-CBA was concluded and Mr. Octavios basic
salary was recomputed to include the P2,000.00 1st year increase retroactive
January 2002. The resulting basic salary was P12,000.00.
E) Applying the above-mentioned policy, Mr. Octavios basic salary was
adjusted to the minimum salary of the new position, which is P13,730.00.
Issue # 2:
All regularized supervisory employees as of January 1 are not entitled to the GUTS CBA
increase. However, as agreed with GUTS in the grievance case of 18 personnel of
International & Luzon Core Network Management Center, probationary employees who were
hired outside of PLDT and regularized as supervisors/management personnel on January 1,
2002 shall be entitled to GUTS CBA. This decision shall be applied prospectively and all
previous similar cases are not covered.
RESOLUTION :

After protracted deliberation of these issues, the committee failed to reach an agreement.
Hence, Management position deemed adopted.

MANAGEMENT

UNION

_______(signed)_______
WILFREDO A. GUADIA

_______(signed)_______
ADOLFO L.FAJARDO

_______(signed)_______
ROSALINDA S. RUIZ

_______(signed)_______
CONFESOR A. ESPIRITU

_______(signed)_______
ALEJANDRO C. FABIAN

_______(signed)_______
CHARLITO A. AREVALO12

Aggrieved, Octavio filed before the Arbitration Branch of the NLRC a Complaint for payment
of said salary increases.
Ruling of the Labor Arbiter
Octavio claimed entitlement to salary increases per the CBAs of 1999-2001 and 2002-2004.
He insisted that when he was regularized as a supervisory employee on January 1, 2001, he
became entitled to receive the across-the-board increase of P2,500.00 as provided for under
the CBA of 1999-2001 which took effect on January 1, 1999. Then pursuant to the CBA of
2002-2004, he should have received an additional increase of P2,000.00 apart from the merit
increase of P3,730.00 which was given him due to his promotion on February 1, 2002.
However, PLDT unilaterally decided to deem as included in the said P3,730.00
the P2,000.00 across-the-board increase for 2002 as stipulated in the CBA of 2002-2004.
This, according to Octavio, amounts to diminution of benefits. Moreover, Octavio averred that
the CBA cannot be the subject of further negotiation as it has the force of law between the
parties. Finally, Octavio claimed that PLDT committed an act of unfair labor practice
because, while it granted the claim for salary increase of 18 supervisory employees who
were regularized on January 1, 2002 and onwards, it discriminated against him by refusing to
grant him the same salary increase. He thus prayed for an additional award of damages and
attorneys fees.
PLDT countered that the issues advanced by Octavio had already been resolved by the
Union-Management Grievance Committee when it denied his claims through the Committee
Resolution. Moreover, the grant of across-the board salary increase for those who were
regularized starting January 1, 2002 and the exclusion thereto of those who were regularized
on January 1, 2001, do not constitute an act of unfair labor practice as would result in any
discrimination or encourage or discourage membership in a labor organization. In fact, when
the Union-Management Grievance Committee came up with the Committee Resolution, they
considered the same as the most practicable and reasonable solution for both management
and union. At any rate, the said Committee Resolution had already become final and
conclusive between the parties for failure of Octavio to elevate the same to the proper forum.
In addition, PLDT claimed that the NLRC has no jurisdiction to hear and decide Octavios
claims.

In a Decision dated August 30, 2004, the Labor Arbiter dismissed the Complaint of Octavio
and upheld the Committee Resolution.
Ruling of the National Labor Relations Commission
Upon Octavios appeal, the NLRC, in its September 30, 2005 Resolution, affirmed the Labor
Arbiters Decision. It upheld the Labor Arbiters finding that Octavios salary had already been
adjusted in accordance with the provisions of the CBA. The NLRC further ruled that it has no
jurisdiction to decide the issues presented by Octavio, as the same involved the
interpretation and implementation of the CBA. According to it, Octavio should have brought
his claim before the proper body as provided in the 2002-2004 CBAs provision on grievance
machinery and procedure.
Octavios Motion for Reconsideration was likewise dismissed by the NLRC in its November
21, 2005 Resolution.13
Ruling of the Court of Appeals
Octavio thus filed a Petition for Certiorari14 which the CA found to be without merit. In its
August 31, 2006 Decision,15 the CA declared the Committee Resolution to be binding on
Octavio, he being a member of GUTS, and because he failed to question its validity and
enforceability.
In his Motion for Reconsideration,16 Octavio disclaimed his alleged failure to question the
Committee Resolution by emphasizing that he filed a Complaint before the NLRC against
PLDT. However, the CA denied Octavios Motion for Reconsideration in its November 15,
2006 Resolution.17
Issues
Hence, Octavio filed this Petition raising the following issues for our consideration:
a. Whether x x x the employer and bargaining representative may amend the
provisions of the collective bargaining agreement without the consent and approval
of the employees;
b. If so, whether the said agreement is binding [on] the employees;
c. Whether x x x merit increases may be awarded simultaneously with increases
given in the Collective Bargaining Agreement;
d. Whether x x x damages may be awarded to the employee for violation by the
employer of its commitment under its existing collective bargaining agreement.18
Octavio submits that the CA erred in upholding the Committee Resolution which denied his
claim for salary increases but granted the same request of 18 other similarly situated
employees. He likewise asserts that both PLDT and GUTS had the duty to strictly implement
the CBA salary increases; hence, the Committee Resolution, which effectively resulted in the
modification of the CBAs provision on salary increases, is void.

Octavio also insists that PLDT is bound to grant him the salary increase of P2,000.00 for the
year 2002 on top of the merit increase given to him by reason of his promotion. It is his
stance that merit increases are distinct and separate from across-the-board salary increases
provided for under the CBA.
Our Ruling
The Petition has no merit.
Under Article 26019 of the Labor Code, grievances arising from the interpretation or
implementation of the parties CBA should be resolved in accordance with the grievance
procedure embodied therein. It also provides that all unsettled grievances shall be
automatically referred for voluntary arbitration as prescribed in the CBA.
In its Memorandum,20 PLDT set forth the grievance machinery and procedure provided under
Article X of the CBA of 2002-2004, viz:
Section 1. GRIEVANCE MACHINERY - there shall be a Union-Management Grievance
Committee composed of three (3) Union representatives designated by the UNION Board of
Directors and three (3) Management representatives designated by the company President.
The committee shall act upon any grievance properly processed in accordance with the
prescribed procedure. The Union representatives to the Committee shall not lose pay for
attending meetings where Management representatives are in attendance.
Section 2. GRIEVANCE PROCEDURE - The parties agree that all disputes between labor
and management may be settled through friendly negotiations; that the parties have the
same interest in the continuity of work until all points in dispute shall have been discussed
and settled; that an open conflict in any form involves losses to the parties; and that
therefore, every effort shall be exerted to avoid such an open conflict. In furtherance of these
principles, the parties agree to observe the following grievance procedures.
Step 1. Any employee (or group of employees) who believes that he has a justifiable
grievance shall present the matter initially to his division head, or if the division is involved in
the grievance, to the company official next higher to the division head (the local manager in
the provincial exchanges) not later that fifteen (15) days after the occurrence of the incident
giving rise to the grievance. The initial presentation shall be made to the division head either
by the aggrieved party himself or by the Union Steward or by any Executive Officer of the
Union who is not a member of the grievance panel. The initial presentation may be made
orally or in writing.
1wphi1

Step 2. Any party who is not satisfied with the resolution of the grievance at Step 1 may
appeal in writing to the Union-Management Grievance Committee within seven (7) days from
the date of receipt of the department heads decision.
Step 3. If the grievance is not settled either because of deadlock or the failure of the
committee to decide the matter, the grievance shall be transferred to a Board of
Arbitrators for the final decision. The Board shall be composed of three (3) arbitrators,
one to be nominated by the Union, another to be nominated by the Management, and the
third to be selected by the management and union nominees. The decision of the board shall
be final and binding both the company and the Union in accordance with law. Expenses of
arbitration shall be divided equally between the Company and the Union.21 (Emphasis
supplied)

Indisputably, the present controversy involves the determination of an employees salary

increases as provided in the CBAs. When Octavios claim for salary increases was referred
to the Union-Management Grievance Committee, the clear intention of the parties was to
resolve their differences on the proper interpretation and implementation of the pertinent
provisions of the CBAs. And in accordance with the procedure prescribed therein, the said
committee made up of representatives of both the union and the management convened.
Unfortunately, it failed to reach an agreement. Octavios recourse pursuant to the CBA was
to elevate his grievance to the Board of Arbitrators for final decision. Instead, nine months
later, Octavio filed a Complaint before the NLRC.
It is settled that "when parties have validly agreed on a procedure for resolving grievances
and to submit a dispute to voluntary arbitration then that procedure should be strictly
observed."22 Moreover, we have held time and again that "before a party is allowed to seek
the intervention of the court, it is a precondition that he should have availed of all the means
of administrative processes afforded him. Hence, if a remedy within the administrative
machinery can still be resorted to by giving the administrative officer concerned every
opportunity to decide on a matter that comes within his jurisdiction, then such remedy should
be exhausted first before the courts judicial power can be sought. The premature invocation
of the courts judicial intervention is fatal to ones cause of action."23 "The underlying principle
of the rule on exhaustion of administrative remedies rests on the presumption that when the
administrative body, or grievance machinery, is afforded a chance to pass upon the matter, it
will decide the same correctly."24
By failing to question the Committee Resolution through the proper procedure prescribed in
the CBA, that is, by raising the same before a Board of Arbitrators, Octavio is deemed to
have waived his right to question the same. Clearly, he departed from the grievance
procedure mandated in the CBA and denied the Board of Arbitrators the opportunity to pass
upon a matter over which it has jurisdiction. Hence, and as correctly held by the CA,
Octavios failure to assail the validity and enforceability of the Committee Resolution makes
the same binding upon him. On this score alone, Octavios recourse to the labor tribunals
below, as well as to the CA, and, finally, to this Court, must therefore fail.
At any rate, Octavio cannot claim that the Committee Resolution is not valid, binding and
conclusive as to him for being a modification of the CBA in violation of Article 25325 of the
Labor Code. It bears to stress that the said resolution is a product of the grievance procedure
outlined in the CBA itself. It was arrived at after the management and the union through their
respective representatives conducted negotiations in accordance with the CBA. On the other
hand, Octavio never assailed the competence of the grievance committee to take
cognizance of his case. Neither did he question the authority or credibility of the union
representatives; hence, the latter are deemed to have properly bargained on his behalf since
"unions are the agent of its members for the purpose of securing just and fair wages and
good working conditions."26 In fine, it cannot be gainsaid that the Committee Resolution is a
modification of the CBA. Rather, it only provides for the proper implementation of the CBA
provision respecting salary increases.
Finally, Octavios argument that the denial of his claim for salary increases constitutes a
violation of Article 10027 of the Labor Code is devoid of merit. Even assuming that there has
been a diminution of benefits on his part, Article 100 does not prohibit a union from offering
and agreeing to reduce wages and benefits of the employees as the right to free collective
bargaining includes the right to suspend it.28 PLDT averred that one of the reasons why
Octavios salary was recomputed as to include in his salary of P13,730.00 the P2,000.00
increase for 2002 is to avoid salary distortion. At this point, it is well to emphasize that
bargaining should not be equated to an "adversarial litigation where rights and obligations

are delineated and remedies applied."29 Instead, it covers a process of finding a reasonable
and acceptable solution to stabilize labor-management relations to promote stable industrial
peace.30Clearly, the Committee Resolution was arrived at after considering the intention of
both PLDT and GUTS to foster industrial peace.
All told, we find no error on the part of the Labor Arbiter, the NLRC and the CA in
unanimously upholding the validity and enforceability of the Grievance Committee Resolution
dated October 7, 2002.
WHEREFORE, the petition is DENIED. The August 31, 2006 Decision and November 15,
2006 Resolution of the Court of Appeals in CA-G.R. SP No. 93578 are AFFIRMED.
SO ORDERED.