[G.R. No. L-19937. February 19, 1979.]

ASOCIACION DE AGRICULTORES DE TALISAY-SILAY, INC., TRINO MONTINOLA, FERNANDO CUENCA, EDUARDO LEDESMA, EMILIO JISON, NILO LIZARES, NICOLAS JALANDONI and SECRETARY OF LABOR, plaintiffs-appellees, vs. TALISAY-SILAY MILLING CO., INC., and LUZON SURETY CO., INC.,defendants-appellants, PHILIPPINE NATIONAL BANK and THE SUGAR QUOTA ADMINISTRATOR, defendants-appellees.

FACTS:

In a class suit, plaintiffs PLANTERS and their laborer sought the benefits of the increased sharing participation prescribed by Republic Act No. 809 (Sugar Act of 1952) for crop year 1952-1953 and for every year thereafter, predicated on the claim that a majority of the PLANTERS had no milling contracts with the CENTRAL; or, in the alternative, in the event that the court should rule that the sharing proportions prescribed by Republic Act 809 was not applicable to the district, the increased sharing participation granted by defendant CENTRAL in contracts entered into with eight planters in 1954 should be declared applicable to them starting from crop year 1954-1955 and every year thereafter pursuant to the provisions of milling contracts between PLANTERS and the CENTRAL since the year 1920-1921 wherein the CENTRAL bound itself to give all planters having contracts with it the highest rate of participation it would ever give to any planter (a sort of a most-favored planter clause). After finding the Sugar Act constitutional and applicable to the plaintiffs and without passing upon plaintiff's alternative cause of action, the trial court granted the main reliefs prayed for in the complaint and denied all counterclaims of the defendant CENTRAL. The CENTRAL appealed. It questioned the trial judge's having engaged the services of the PLANTERS' counsel as his own lawyer; assailed the constitutionality of Republic Act 809; and assigned as errors the findings that a majority of the PLANTERS had milling contracts with it and that Republic Act 809 was applicable even to PLANTERS who had milling contracts.

The Supreme Court held that it will not invalidate and set aside the trial judge's judgment despite his having engaged PLANTERS' counsel as his own lawyer, because the records show that PLANTERS' opponent for not been deprived of a fair and impartial trial. The High Tribunal upheld the constitutionality of Republic Act 809 on the ground that it was a social justice and police power measure for the promotion of labor conditions in sugar plantations, hence, whatever rational degree of constraint it exerts on freedom of contract and existing contractual obligations is constitutionally permissible. It further found that majority of the PLANTERS had milling contracts with the CENTRAL, hence the sharing proportions prescribed in Section 1 of Republic Act 809 was not applicable to them, but ruled that the higher sharing participation granted by the CENTRAL to eight planters in 1954 was applicable to plaintiffs PLANTERS pursuant to the most-favored planter clause contained in milling contracts between Planters and the Central since crop year 1920-1921, and the reference point in determining the ratio of sharing among the CENTRAL, the PLANTERS and the latter's laborers is the provision of Section 9 of Republic Act 809 (which allots 60% of the proceeds of any increase in the participation granted the planters above their present share), in conjunction with the effect of the most-favored planter clause.

Decision modified.

SYLLABUS

Of the Ruling of the Court

1. JUDICIAL ETHICS; DISQUALIFICATIONS OF JUDGES; WHERE KNOWN RELATIONS OF JUDGE WITH COUNSEL NOT AMONG THOSE EXPRESSLY INCLUDED IN LAW AS GROUND FOR DISQUALIFICATION. — Where the judge continues to act in a case despite his known relations with the parties or counsel before him, which although not included expressly in law or rule among the disqualifications for him to take cognizance thereof, leaves room for doubt as to his absolute impartiality, the remedy does not lie in the outright invalidation and setting aside of his actuations. The ultimate test this Court has established in such a millieu is for the appellate tribunal to determine from the record whether or not actually the party complaining has been deprived of a fair and impartial trial, and in the affirmative, to correspondingly grant a new trial.

2. CONSTITUTIONAL LAW; REPUBLIC ACT 809 (SUGAR ACT OF 1952) IS A SOCIAL JUSTICE AND POLICE POWER MEASURE. — Republic Act 809 is a social justice and police power measure for the promotion of labor conditions in sugar plantations hence whatever rational degree of constraint it exerts on freedom of contract and existing contractual obligations is constitutional permissible.

3. ID.; TEST OF CONSTITUTIONALITY. — Gone are the days when courts could be adhering to the doctrine that interference with contracts can only be justified by exceptional circumstances, for the test of validity today under the due process clause, even in the case of legislation interfering with existing contracts, in reasonableness. In other words, freedom from arbitrariness, capriciousness and whimsicality is the test of constitutionality.

4. ID.; SOCIAL JUSTICE GOAL SUSTAINS VALIDITY OF A STATUTE. — In the Philippines, whenever any government measure designed for the advancement of the working class is impugned on constitutional grounds and shadows of doubt are cast over the scope of the State's prerogative in respect thereto, the imperious mandate of the social justice ideal consecrated in our fundamental laws, both the old and the new, asserts its majesty, calling upon the courts to accord utmost consideration to the spirit animating the act assailed, not just for the sake of enforcing the explicit social justice provisions of the article on "Declaration of Principles and State Policies", but more fundamentally, to serve the sacred cause of human dignity, which is actually what lies at the core of those constitutional precepts as it is also the decisive element always in the determination of any controversy between capital and labor.

5. ID.; ID.; TEST FOR DETERMINING WHETHER OR NOT SOCIAL JUSTICE HAS BEEN OVEREXTENDED. — The criterion for determining whether or not social justice has been overextended in any given case is nothing more than the economic viability or feasibility of the proposed law in favor of labor, and certainly not the existence of exceptional circumstances. In other words, as long as capital in industry or agriculture will not be fatally prejudiced to the extent of incurring losses as a result of its enforcement, any legislation to improve labor conditions would be valid, provided the assailed legislation is more or less demanded as a measure to improve the situation in which the workers and laborers are actually found.

6. ID.; EQUAL PROTECTION OF THE LAW; STANDARD FIXED BY REPUBLIC ACT 809 REGARDING ITS APPLICABILITY IS NOT ARBITRARY. — Republic Act 809 which provides for bigger shares to the planters in the big milling districts than those in the small milling districts does not violate the equal protection clause considering that the more a central produces, the bigger would be its margin of profit which

can be correspondingly cut for the purpose of enlarging the share of the planters. Neither does it contravene the said constitutional mandate by not including the workers in the centrals as among component of labor in the apportionment of the fruits of their joint efforts with the planters, because the laborers in the centrals perform work the nature of which is entirely different from that of those working in the farms, thereby requiring the application to them of other laws advantageous to labor. Besides, the laborers in the centrals are being more or less sufficiently taken care of under other existing laws and the prevailing terms and conditions of their employment. Also, Section 3 of the Act shows its concern for the laborers by enjoining the centrals from adopting any measure that would in any manner place the former in a worse position than where they were before the effectivity of the Act.

11. LABOR LAW; CONTACTS PROVIDING FOR SHARING PROPORTIONS BETWEEN PLANTERS AND MILLERS EXECUTED AFTER EFFECTIVITY OF REPUBLIC ACT 809 ARE ENFORCEABLE; PURPOSE OF THE ACT. — Contracts providing for sharing proportions between planters and the central, purposely entered into to avoid the ratio of sharing prescribed in Section 1 of Republic Act 809 are valid and enforceable, because it is not the purpose of said Act to prevent the execution of new contracts, even of this would create a majority of contract planters in any district. The obvious objective of the Act is more to induce the centrals to enter written agreements with the planters in their respective districts providing for better sharing ratios than the old 60-40 scheme, rather than to fix for them such ratio in the manner prescribed in its Section 1.

12. ID.; "PLANTERS", DEFINED. — A "planter" is one who is entitled to produce sugar on a plantation and to deliver his produce to a sugar mill for milling. The "planter" referred to in Republic Act 809 may be either the owner of the plantation who produces or is entitled to produce sugarcane on his plantation or any lessee, usufructory or person (other than the owner) who has a right to cultivate and to produce sugar thereon, provided that in either case, the planter has the right to deliver the sugar to the Central for milling. (Opinion No. 85, Series of 1954, Secretary of Justice).

[G.R. No. L-24626. June 28, 1974.]

PHILIPPINE AIR LINES, INC., petitioner, vs. PHILIPPINE AIR LINES EMPLOYEES ASSOCIATION (PALEA), PHILIPPINE AIR LINES SUPERVISORS ASSOCIATION (PALSA) and COURT OF INDUSTRIAL RELATIONS, respondents.

D E C I S I O N

FERNANDO, J p:

This appeal by certiorari from a resolution of Court of Industrial Relations, if typical, yields the impression that in the realm of management there is not too-marked an appreciation for the quality of mercy. What is sought is a reversal of an order of respondent Court reinstating one Fidel Gotangco dismissed by his employer, petitioner Philippine Air Lines, for having been found guilty of the breach of trust and violation of the rules and regulations of the company. So it was decreed, considering what was felt to be the severity of dismissal. Petitioner, however, is firm and unyielding in its insistence that this was an appropriate case for terminating employment. It would support its stand by an invocation of Manila Trading and Supply Company v. Zulueta. 1 As will hereinafter be shown, such a reliance is misplaced not only in terms of the opinion therein rendered but likewise in the light of the trend of later rulings of this Tribunal. What poses an even more insurmountable obstacle is that such an attitude of firm and unyielding insistence on the traditional concept of management rights is at war with the new provision on security of tenure in the presentConstitution. 2 There is no occasion for reversal then.

There is no dispute as to the facts. The order now sought to be reviewed started with the nature of the case as one seeking authority for the dismissal of Fidel Gotangco, with the employer, petitioner Philippine Air Lines, presenting in evidence an exhibit referring to the confiscation of a piece of lead material from his parson at one of the gates of the PAL Airfield compound and a signed statement by him, taken at an investigation, wherein he admitted his apprehension by a company security guard with a lead material he intended to take home for his personal use. Then the order continues: "On the whole, the evidence of respondent is uncontroverted. And no question, Fidel Gotango is guilty of breach of trust and violation of the rules and regulations of his employer. But respondent seeks authority to dismiss him on the basis of such guilt. It is believed, however, that in this particular case dismissal is too severe a penalty to impose on Fidel Gotangco for trying to slip out a lead material belonging to respondent. Because (1) it is his first time to commit the charge in question for the duration of his 17 years of service with respondent; (2) the cost of said material, considering its size, is negligible (8" x 10" x 1/2"); (3) respondent did not lose anything after all as the lead material was retrieved in time; (4) the ignominy and mental torture undergone by Gotangco is practically punishment in itself; and (6) he has been under preventive suspension to date. For which reason, it would seem more equitable to retain than dismiss him." 3

Petitioner was therefore ordered "to reinstate Fidel Gotangco immediately, without backwages." 4 So it decided the matter. There appears to be nothing unreasonable. An offense was committed. It was not condoned. A penalty was imposed, but one proportionate to the gravity of the misdeed. Petitioner, as indicated by his appeal, appears to be unsatisfied. It insists on dismissal. We do not see it that way.

So rigid an approach must find its justification in a statute, of which there is none, or in a pronouncement of this Court that speaks unequivocally. Petitioner is hopeful that Manila Trading and

Supply Company v. Zulueta did so. It is laboring under a misapprehension. A more careful analysis ought to have made that clear. There is nothing in it that requires us to hold that on the matter of termination of employment, management must have its way and respondent Court ignored. Our later decisions, especially so those penned by the same illustrious Justice Laurel, indicate the contrary. The pith of the matter is then simply this, that when respondent Court after a conscientious appraisal of the facts did reach a conclusion that was far from arbitrary and was impressed with an element of generosity to which the law should not be a stranger, there is no valid ground for Us to hold otherwise. Even on the assumption that it were not thus before, it is so now. There is, as noted, in theConstitution the guarantee of security of tenure. The appeal must fail then.

1. The sole error assigned by petitioner is that respondent Court should not order the reinstatement of Fidel Gotangco in the light of its undisputed finding that he "is guilty of breach of trust and violation of the rules and regulations of his employer." 5 It sought to lend plausibility to such a contention by asserting in its brief: "The principle that the Court of Industrial Relations cannot arrogate upon itself the authority to order an employer to reinstate a dismissed employee who admittedly has breached the trust of his employer is now so well woven in our jurisprudence that only a grave abuse of judicial discretion can unsettle the rule. This principle was 90 clearly articulated in one case (Manila Trading & Supply Co. v. Zulueta, 69 Phil. 486) where this Honorable Court, through the late J. Laurel, declared - `The whole controversy is centered around the right of the Court of Industrial Relations to order the readmission of a laborer who, it is admitted, had been found derelict in the performance of his duties towards his employer. We concede that the right of an employer to freely select or discharge his employees, is subject to regulation by the State basically in the exercise of its paramount police power. (Com. Act Nos. 103 and 213). But much as we should expand beyond economic orthodoxy, we hold that an employer cannot legally be compelled to continue with the employment of a person who admittedly was guilty of misfeasance or malfeasance towards his employer, and whose continuance in the service of the latter is patently inimical to his interests.'" 6 Its tone of certitude is unwarranted. The very excerpt cited speaks of the paramount police power as a limitation on the right of an employer to freely select or discharge his employees. Moreover, while there was an admission that misfeasance or malfeasance could be a ground for dismissal, the last sentence thereof reads: "The law, in protecting the rights of the laborer, authorizes neither oppression nor self-destruction of the employer." 7 Where, therefore, it could be shown that the result would be neither oppressive nor self-destructive, it cannot he asserted dogmatically that an outright termination of employment is justified.

The Manila Trading decision was promulgated on January 30, 1940. Before the end of the year, in another Manila Trading Company case, Manila Trading Supply Co. v. Philippine Labor Union, 8 the same Justice Laurel made clear that the earlier doctrine did not call for automatic application. Thus: "It is admitted, however, that an employer cannot legally be compelled to continue an employee or laborer in the service when a justifiable cause for his discharge exists, but since under section 19 of Commonwealth Act No. 103 the authority of the Court of Industrial Relations to require his continuance in the service is incidental to the pendency of an industrial dispute before it, it necessarily follows that the said court has the power to determine whether such cause exists. In the instant case, the Court of Industrial Relations having reached the conclusion that the dismissal of Andres Dimapiles is groundless and unjustified, the doctrine in Manila Trading & Supply Co. v. Zulueta, et al., G.R. No. 46853, promulgated January 30, 1940, is not applicable. Upon the other hand, and as was observed in the case of Ang Tibay v. The Court of Industrial Relations, G.R. No. 46496, promulgated May 29, 1939, `the policy of laissez faire has to some extent given way to the assumption by the Government of the right of intervention even in contractual relations affected with public interest.'" 9 What is more, three other cases before the end of the year, 10 the opinions in which were penned by the same distinguished jurist,

left no doubt as to the flexibility of the approach to be followed whenever the first Manila Trading Supply decision was invoked. For each and every one of them, he sustained respondent Court of Industrial Relations in its conclusion that dismissal was not warranted. After liberation, in a 1948 decision, Manila Hotel Co. v. Court of Industrial Relations, 11 one of his equally discerning colleagues, likewise a former delegate to the 1934 Constitutional Convention, Justice Briones, did announce in unmistakable language, that the first Manila Trading Company decision should not lend itself as a justification for outright dismissal independently of the circumstances of each case. For him, speaking as ponente, "es, gin embargo, tambin cierto que hay casos en que la destitucion o suspension de un empleado resulta caprichosa, o injustificada, o de otro modo ilegal, en cuyo caso el obrero debe ser protegido por el Estado mediante la agencia o instrumento que tenga para ello que en nuestro caso es la Corte de Relaciones Industriales." 12 A host of later decisions attests to the acceptance by this Court of the conclusion reached by the Court of Industrial Relations in the discharge of the task assigned to it to protect the rights of labor. 13 Nor is this all. As pointed out in Phil. Educational Institution v. MLQSEA Faculty Association: 14 "It was Justice Laurel who, in the first decision, promulgated in 1939, concerning the scope of the power of this Court to alter factual conclusions reached by the Court of Industrial Relations, expressed the view that we should not disturb 'the findings of facts made by the Court of Industrial Relations . . .' A year and two months later on November, 1940, he was much more definite. Such findings 'are conclusive and will not be disturbed in the absence of a showing [of abuse of] discretion.'" 15 Such a formulation was followed in twenty-nine later decisions, the latest of which, prior to Philippine Educational Institution, was Laguna College v. Court of Industrial Relations, 16 the ponente being the present Chief Justice.

Greater familiarity therefore with the approach consistently followed by Justice Laurel in labor controversies ought to have cautioned petitioner against the misplaced reliance on the excerpt from the first Manila Trading case, which as made clear in the foregoing, was not even subjected to an accurate appraisal. The sole assigned error is therefore without merit.

2. The futility of this appeal becomes even more apparent considering the express provision in the Constitution already noted, requiring the State to assure workers "security of tenure." 17 It was not that specific in the 1935 Charter. The mandate was limited to the State affording "protection to labor, especially to working women and minors, . . .," 18 If by virtue of the above, it would not be legally justifiable to reverse the order of reinstatement, it becomes even more readily apparent that such a conclusion is even more unwarranted now. To reach it would be to show lack of fealty to a constitutional command. This is not to say that dismissal for cause is now outlawed. No such thing is intimated in this opinion. It is merely no stress that where respondent Court of Industrial Relations, in the light of all the circumstances disclosed, particularly that it was a first offense after seventeen years of service, reached the conclusion, neither arbitrary nor oppressive, that dismissal was too severe a penalty, this Court should not view the matter differently. That is to conform to the ideal of the New Society, the establishment of which was so felicitously referred to by the First Lady as the Compassionate Society. 19

3. Much less should the result reached by this Court lend itself to the interpretation that there has been a condonation of theft. From the facts as found by respondent Court accepted by petitioner, the offense was "breach of trust and violation of the rules and regulations of the company." A lead material of negligible size, in the opinion of respondent Court, its measurement being eight inches by ten inches,

with thickness of one-half inch, not shown to be of any use to the company, hardly of any pecuniary worth, was picked up by the employee in question, but thereafter taken from him by a security guard.

That was all that transpired. It would be too harsh an appraisal to view it as constituting theft. So the parties have considered the matter. It stress is laid on this aspect of the case, it is only to ward off any unwarranted inference that this Court was not properly mindful of the more serious consequences that should ordinarily follow a dishonest act amounting to a crime.

WHEREFORE, the appealed order of respondent Court of April 12, 1965, reinstating Fidel Gotangco without backwages, as sustained in a resolution of May 19, 1965, is affirmed. Costs against Philippine Air Lines.

Zaldivar (Chairman), Barredo, Antonio, Fernandez and Aquino, JJ., concur.

G.R. No. L-69870 November 29, 1988

NATIONAL SERVICE CORPORATION (NASECO) AND ARTURO L. PEREZ, petitioners, vs.THE HONORABLE THIRD DIVISION, NATIONAL LABOR RELATIONS COMMISSION, MINISTRY OF LABOR AND EMPLOYMENT, MANILA AND EUGENIA C. CREDO, respondents.

G.R. No. 70295 November 29,1988

EUGENIA C. CREDO, petitioner, vs.NATIONAL LABOR RELATIONS COMMISSION, NATIONAL SERVICES CORPORATION AND ARTURO L. PEREZ, respondents.

The Chief Legal Counsel for respondents NASECO and Arturo L. Perez.

Melchor R. Flores for petitioner Eugenia C. Credo.

PADILLA, J.:

Consolidated special civil actions for certiorari seeking to review the decision * of the Third Division, National Labor Relations Commission in Case No. 11-4944-83 dated 28 November 1984 and its resolution dated 16 January 1985 denying motions for reconsideration of said decision.

Eugenia C. Credo was an employee of the National Service Corporation (NASECO), a domestic corporation which provides security guards as well as messengerial, janitorial and other similar manpower services to the Philippine National Bank (PNB) and its agencies. She was first employed with NASECO as a lady guard on 18 July 1975. Through the years, she was promoted to Clerk Typist, then Personnel Clerk until she became Chief of Property and Records, on 10 March 1980. 1

Sometime before 7 November 1983, Credo was administratively charged by Sisinio S. Lloren, Manager of Finance and Special Project and Evaluation Department of NASECO, stemming from her non-compliance with Lloren's memorandum, dated 11 October 1983, regarding certain entry procedures in the company's Statement of Billings Adjustment. Said charges alleged that Credo "did not comply with Lloren's instructions to place some corrections/additional remarks in the Statement of Billings Adjustment; and when [Credo] was called by Lloren to his office to explain further the said instructions, [Credo] showed resentment and behaved in a scandalous manner by shouting and uttering remarks of disrespect in the presence of her co-employees." 2

On 7 November 1983, Credo was called to meet Arturo L. Perez, then Acting General Manager of NASECO, to explain her side before Perez and NASECO's Committee on Personnel Affairs in connection with the administrative charges filed against her. After said meeting, on the same date, Credo was placed on "Forced Leave" status for 1 5 days, effective 8 November 1983. 3

Before the expiration of said 15-day leave, or on 18 November 1983, Credo filed a complaint, docketed as Case No. 114944-83, with the Arbitration Branch, National Capital Region, Ministry of Labor and Employment, Manila, against NASECO for placing her on forced leave, without due process. 4

Likewise, while Credo was on forced leave, or on 22 November 1983, NASECO's Committee on Personnel Affairs deliberated and evaluated a number of past acts of misconduct or infractions attributed to her. 5 As a result of this deliberation, said committee resolved:

1. That, respondent [Credo] committed the following offenses in the Code of Discipline, viz:

OFFENSE vs. Company Interest & Policies

No. 3 — Any discourteous act to customer, officer and employee of client company or officer of the Corporation.

OFFENSE vs. Public Moral

No. 7 — Exhibit marked discourtesy in the course of official duties or use of profane or insulting language to any superior officer.

OFFENSE vs. Authority

No. 3 — Failure to comply with any lawful order or any instructions of a superior officer.

2. That, Management has already given due consideration to respondent's [Credo] scandalous actuations for several times in the past. Records also show that she was reprimanded for some offense and did not question it. Management at this juncture, has already met its maximum tolerance point so it has decided to put an end to respondent's [Credo] being an undesirable employee. 6

The committee recommended Credo's termination, with forfeiture of benefits. 7

On 1 December 1983, Credo was called age to the office of Perez to be informed that she was being charged with certain offenses. Notably, these offenses were those which NASECO's Committee on Personnel Affairs already resolved, on 22 November 1983 to have been committed by Credo.

In Perez's office, and in the presence of NASECO's Committee on Personnel Affairs, Credo was made to explain her side in connection with the charges filed against her; however, due to her failure to do so, 8 she was handed a Notice of Termination, dated 24 November 1983, and made effective 1 December 1983. 9 Hence, on 6 December 1983, Credo filed a supplemental complaint for illegal dismissal in Case No. 11-4944-83, alleging absence of just or authorized cause for her dismissal and lack of opportunity to be heard. 10

After both parties had submitted their respective position papers, affidavits and other documentary evidence in support of their claims and defenses, on 9 May 1984, the labor arbiter rendered a decision:

1) dismissing Credo's complaint, and 2) directing NASECO to pay Credo separation pay equivalent to one half month's pay for every year of service. 11

Both parties appealed to respondent National Labor Relations Commission (NLRC) which, on 28 November 1984, rendered a decision: 1) directing NASECO to reinstate Credo to her former position, or substantially equivalent position, with six (6) months' backwages and without loss of seniority rights and other privileges appertaining thereto, and 2) dismissing Credo's claim for attorney's fees, moral and exemplary damages. As a consequence, both parties filed their respective motions for reconsideration, 12 which the NLRC denied in a resolution of 16 January 1985. 13

Hence, the present recourse by both parties. In G.R. No. 68970, petitioners challenge as grave abuse of discretion the dispositive portion of the 28 November 1984 decision which ordered Credo's reinstatement with backwages. 14Petitioners contend that in arriving at said questioned order, the NLRC acted with grave abuse of discretion in finding that: 1) petitioners violated the requirements mandated by law on termination, 2) petitioners failed in the burden of proving that the termination of Credo was for a valid or authorized cause, 3) the alleged infractions committed by Credo were not proven or, even if proved, could be considered to have been condoned by petitioners, and 4) the termination of Credo was not for a valid or authorized cause. 15

On the other hand, in G.R. No. 70295, petitioner Credo challenges as grave abuse of discretion the dispositive portion of the 28 November 1984 decision which dismissed her claim for attorney's fees, moral and exemplary damages and limited her right to backwages to only six (6) months. 16

As guidelines for employers in the exercise of their power to dismiss employees for just causes, the law provides that:

Section 2. Notice of dismissal. — Any employer who seeks to dismiss a worker shall furnish him a written notice stating the particular acts or omission constituting the grounds for his dismissal.

xxx xxx xxx

Section 5. Answer and Hearing. — The worker may answer the allegations stated against him in the notice of dismissal within a reasonable period from receipt of such notice. The employer shall afford the worker ample opportunity to be heard and to defend himself with the assistance of his representative, if he so desires.

Section 6. Decision to dismiss. — The employer shall immediately notify a worker in writing of a decision to dismiss him stating clearly the reasons therefor. 17

These guidelines mandate that the employer furnish an employee sought to be dismissed two (2) written notices of dismissal before a termination of employment can be legally effected. These are the notice which apprises the employee of the particular acts or omissions for which his dismissal is sought and the subsequent notice which informs the employee of the employer's decision to dismiss him.

Likewise, a reading of the guidelines in consonance with the express provisions of law on protection to labor 18(which encompasses the right to security of tenure) and the broader dictates of procedural due

process necessarily mandate that notice of the employer's decision to dismiss an employee, with reasons therefor, can only be issued after the employer has afforded the employee concerned ample opportunity to be heard and to defend himself.

In the case at bar, NASECO did not comply with these guidelines in effecting Credo's dismissal. Although she was apprised and "given the chance to explain her side" of the charges filed against her, this chance was given so perfunctorily, thus rendering illusory Credo's right to security of tenure. That Credo was not given ample opportunity to be heard and to defend herself is evident from the fact that the compliance with the injunction to apprise her of the charges filed against her and to afford her a chance to prepare for her defense was dispensed in only a day. This is not effective compliance with the legal requirements aforementioned.

The fact also that the Notice of Termination of Credo's employment (or the decision to dismiss her) was dated 24 November 1983 and made effective 1 December 1983 shows that NASECO was already bent on terminating her services when she was informed on 1 December 1983 of the charges against her, and that any hearing which NASECO thought of affording her after 24 November 1983 would merely be pro forma or an exercise in futility.

Besides, Credo's mere non-compliance with Lorens memorandum regarding the entry procedures in the company's Statement of Billings Adjustment did not warrant the severe penalty of dismissal of the NLRC correctly held that:

... on the charge of gross discourtesy, the CPA found in its Report, dated 22 November 1983 that, "In the process of her testimony/explanations she again exhibited a conduct unbecoming in front of NASECO Officers and argued to Mr. S. S. Lloren in a sarcastic and discourteous manner, notwithstanding, the fact that she was inside the office of the Acctg. General Manager." Let it be noted, however, that the Report did not even describe how the so called "conduct unbecoming" or "discourteous manner" was done by complainant. Anent the "sarcastic" argument of complainant, the purported transcript 19 of the meeting held on 7 November 1983 does not indicate any sarcasm on the part of complainant. At the most, complainant may have sounded insistent or emphatic about her work being more complete than the work of Ms. de Castro, yet, the complaining officer signed the work of Ms. de Castro and did not sign hers.

As to the charge of insubordination, it may be conceded, albeit unclear, that complainant failed to place same corrections/additional remarks in the Statement of Billings Adjustments as instructed. However, under the circumstances obtaining, where complainant strongly felt that she was being discriminated against by her superior in relation to other employees, we are of the considered view and so hold, that a reprimand would have sufficed for the infraction, but certainly not termination from services. 20

As this Court has ruled:

... where a penalty less punitive would suffice, whatever missteps may be committed by labor ought not to be visited with a consequence so severe. It is not only because of the law's concern for the working man. There is, in addition, his family to consider.

Unemployment brings untold hardships and sorrows on those dependent on the wage-earner. 21

Of course, in justifying Credo's termination of employment, NASECO claims as additional lawful causes for dismissal Credo's previous and repeated acts of insubordination, discourtesy and sarcasm towards her superior officers, alleged to have been committed from 1980 to July 1983. 22

If such acts of misconduct were indeed committed by Credo, they are deemed to have been condoned by NASECO. For instance, sometime in 1980, when Credo allegedly "reacted in a scandalous manner and raised her voice" in a discussion with NASECO's Acting head of the Personnel Administration 23 no disciplinary measure was taken or meted against her. Nor was she even reprimanded when she allegedly talked 'in a shouting or yelling manner" with the Acting Manager of NASECO's Building Maintenance and Services Department in 1980 24 or when she allegedly "shouted" at NASECO's Corporate Auditor "in front of his subordinates displaying arrogance and unruly behavior" in 1980, or when she allegedly shouted at NASECO's Internal Control Consultant in 1981. 25 But then, in sharp contrast to NASECO's penchant for ignoring the aforesaid acts of misconduct, when Credo committed frequent tardiness in August and September 1983, she was reprimanded. 26

Even if the allegations of improper conduct (discourtesy to superiors) were satisfactorily proven, NASECO's condonation thereof is gleaned from the fact that on 4 October 1983, Credo was given a salary adjustment for having performed in the job "at least [satisfactorily]" 27 and she was then rated "Very Satisfactory" 28as regards job performance, particularly in terms of quality of work, quantity of work, dependability, cooperation, resourcefulness and attendance.

Considering that the acts or omissions for which Credo's employment was sought to be legally terminated were insufficiently proved, as to justify dismissal, reinstatement is proper. For "absent the reason which gave rise to [the employee's] separation from employment, there is no intention on the part of the employer to dismiss the employee concerned." 29 And, as a result of having been wrongfully dismissed, Credo is entitled to three (3) years of backwages without deduction and qualification. 30

However, while Credo's dismissal was effected without procedural fairness, an award of exemplary damages in her favor can only be justified if her dismissal was effected in a wanton, fraudulent, oppressive or malevolent manner. 31A judicious examination of the record manifests no such conduct on the part of management. However, in view of the attendant circumstances in the case, i.e., lack of due process in effecting her dismissal, it is reasonable to award her moral damages. And, for having been compelled to litigate because of the unlawful actuations of NASECO, a reasonable award for attorney's fees in her favor is in order.

In NASECO's comment 32 in G.R. No. 70295, it is belatedly argued that the NLRC has no jurisdiction to order Credo's reinstatement. NASECO claims that, as a government corporation (by virtue of its being a subsidiary of the National Investment and Development Corporation (NIDC), a subsidiary wholly owned by the Philippine National Bank (PNB), which in turn is a government owned corporation), the terms and conditions of employment of its employees are governed by the Civil Service Law, rules and regulations. In support of this argument, NASECO cites National Housing Corporation vs. JUCO, 33where this Court held that "There should no longer be any question at this time that employees of government-owned or controlled corporations are governed by the civil service law and civil service rifles and regulations."

It would appear that, in the interest of justice, the holding in said case should not be given retroactive effect, that is, to cases that arose before its promulgation on 17 January 1985. To do otherwise would be oppressive to Credo and other employees similarly situated, because under the same 1973 Constitution ,but prior to the ruling in National Housing Corporation vs. Juco, this Court had recognized the applicability of the Labor Code to, and the authority of the NLRC to exercise jurisdiction over, disputes involving terms and conditions of employment in government owned or controlled corporations, among them, the National Service Corporation (NASECO).<äre||anº•1àw> 34

Furthermore, in the matter of coverage by the civil service of government-owned or controlled corporations, the 1987 Constitution starkly varies from the 1973 Constitution, upon which National Housing Corporation vs. Juco is based. Under the 1973 Constitution, it was provided that:

The civil service embraces every branch, agency, subdivision, and instrumentality of the Government, including every government-owned or controlled corporation. ... 35

On the other hand, the 1987 Constitution provides that:

The civil service embraces all branches, subdivisions, instrumentalities, and agencies of the Government, including government-owned or controlled corporations with original charter. 36 (Emphasis supplied)

Thus, the situations sought to be avoided by the 1973 Constitution and expressed by the Court in the National Housing . Corporation case in the following manner —

The infirmity of the respondents' position lies in its permitting a circumvention or emasculation of Section 1, Article XII-B of the constitution. It would be possible for a regular ministry of government to create a host of subsidiary corporations under the Corporation Code funded by a willing legislature. A government-owned corporation could create several subsidiary corporations. These subsidiary corporations would enjoy the best of two worlds. Their officials and employees would be privileged individuals, free from the strict accountability required by the Civil Service Decree and the regulations of the Commission on Audit. Their incomes would not be subject to the competitive restrains of the open market nor to the terms and conditions of civil service employment. Conceivably, all government-owned or controlled corporations could be created, no longer by special charters, but through incorporations under the general law. The Constitutional amendment including such corporations in the embrace of the civil service would cease to have application. Certainly, such a situation cannot be allowed to exist. 37

appear relegated to relative insignificance by the 1987 Constitutional provision that the Civil Service embraces government-owned or controlled corporations with original charter; and, therefore, by clear implication, the Civil Service does not include government-owned or controlled corporations which are organized as subsidiaries of government-owned or controlled corporations under the general corporation law.

On the premise that it is the 1987 Constitution that governs the instant case because it is the Constitution in place at the time of decision thereof, the NLRC has jurisdiction to accord relief to the

parties. As an admitted subsidiary of the NIDC, in turn a subsidiary of the PNB, the NASECO is a government-owned or controlled corporation without original charter.

Dr. Jorge Bocobo, in his Cult of Legalism, cited by Mr. Justice Perfecto in his concurring opinion in Gomez vs. Government Insurance Board (L-602, March 31, 1947, 44 O.G. No. 8, pp. 2687, 2694; also published in 78 Phil. 221) on the effectivity of the principle of social justice embodied in the 1935 Constitution, said:

Certainly, this principle of social justice in our Constitution as generously conceived and so tersely phrased, was not included in the fundamental law as a mere popular gesture. It was meant to (be) a vital, articulate, compelling principle of public policy. It should be observed in the interpretation not only of future legislation, but also of all laws already existing on November 15, 1935. It was intended to change the spirit of our laws, present and future. Thus, all the laws which on the great historic event when the Commonwealth of the Philippines was born, were susceptible of two interpretations strict or liberal, against or in favor of social justice, now have to be construed broadly in order to promote and achieve social justice. This may seem novel to our friends, the advocates of legalism but it is the only way to give life and significance to the above-quoted principle of the Constitution. If it was not designed to apply to these existing laws, then it would be necessary to wait for generations until all our codes and all our statutes shall have been completely charred by removing every provision inimical to social justice, before the policy of social justice can become really effective. That would be an absurd conclusion. It is more reasonable to hold that this constitutional principle applies to all legislation in force on November 15, 1935, and all laws thereafter passed.

WHEREFORE, in view of the foregoing, the challenged decision of the NLRC is AFFIRMED with modifications. Petitioners in G.R. No. 69870, who are the private respondents in G.R. No. 70295, are ordered to: 1) reinstate Eugenia C. Credo to her former position at the time of her termination, or if such reinstatement is not possible, to place her in a substantially equivalent position, with three (3) years backwages, from 1 December 1983, without qualification or deduction, and without loss of seniority rights and other privileges appertaining thereto, and 2) pay Eugenia C. Credo P5,000.00 for moral damages and P5,000.00 for attorney's fees.

If reinstatement in any event is no longer possible because of supervening events, petitioners in G.R. No. 69870, who are the private respondents in G.R. No. 70295 are ordered to pay Eugenia C. Credo, in addition to her backwages and damages as above described, separation pay equivalent to one-half month's salary for every year of service, to be computed on her monthly salary at the time of her termination on 1 December 1983.

SO ORDERED.

G.R. No. 80609 August 23, 1988

PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, petitioner, vs.THE NATIONAL LABOR RELATIONS COMMISSION and MARILYN ABUCAY, respondents.

CRUZ, J.:

The only issue presented in the case at bar is the legality of the award of financial assistance to an employee who had been dismissed for cause as found by the public respondent.

Marilyn Abucay, a traffic operator of the Philippine Long Distance Telephone Company, was accused by two complainants of having demanded and received from them the total amount of P3,800.00 in consideration of her promise to facilitate approval of their applications for telephone installation. 1 Investigated and heard, she was found guilty as charged and accordingly separated from the service. 2 She went to the Ministry of Labor and Employment claiming she had been illegally removed. After consideration of the evidence and arguments of the parties, the company was sustained and the complaint was dismissed for lack of merit. Nevertheless, the dispositive portion of labor arbiter's decision declared:

WHEREFORE, the instant complaint is dismissed for lack of merit.

Considering that Dr. Helen Bangayan and Mrs. Consolacion Martinez are not totally blameless in the light of the fact that the deal happened outhide the premises of respondent company and that their act of giving P3,800.00 without any receipt is tantamount to corruption of public officers, complainant must be given one month pay for every year of service as financial assistance. 3

Both the petitioner and the private respondent appealed to the National Labor Relations Board, which upheld the said decision in toto and dismissed the appeals. 4 The private respondent took no further action, thereby impliedly accepting the validity of her dismissal. The petitioner, however, is now before us to question the affirmance of the above- quoted award as having been made with grave abuse of discretion.

In its challenged resolution of September 22, 1987, the NLRC said:

... Anent the award of separation pay as financial assistance in complainant's favor, We find the same to be equitable, taking into consideration her long years of service to the company whereby she had undoubtedly contributed to the success of respondent. While we do not in any way approve of complainants (private respondent) mal feasance, for which she is to suffer the penalty of dismissal, it is for reasons of equity and compassion that we resolve to uphold the award of financial assistance in her favor. 5

The position of the petitioner is simply stated: It is conceded that an employee illegally dismissed is entitled to reinstatement and backwages as required by the labor laws. However, an employee dismissed for cause is entitled to neither reinstatement nor backwages and is not allowed any relief at

all because his dismissal is in accordance with law. In the case of the private respondent, she has been awarded financial assistance equivalent to ten months pay corresponding to her 10 year service in the company despite her removal for cause. She is, therefore, in effect rewarded rather than punished for her dishonesty, and without any legal authorization or justification. The award is made on the ground of equity and compassion, which cannot be a substitute for law. Moreover, such award puts a premium on dishonesty and encourages instead of deterring corruption.

For its part, the public respondent claims that the employee is sufficiently punished with her dismissal. The grant of financial assistance is not intended as a reward for her offense but merely to help her for the loss of her employment after working faithfully with the company for ten years. In support of this position, the Solicitor General cites the cases of Firestone Tire and Rubber Company of the Philippines v. Lariosa 6 and Soco v. Mercantile Corporation of Davao, 7 where the employees were dismissed for cause but were nevertheless allowed separation pay on grounds of social and compassionate justice. As the Court put it in the Firestone case:

In view of the foregoing, We rule that Firestone had valid grounds to dispense with the services of Lariosa and that the NLRC acted with grave abuse of discretion in ordering his reinstatement. However, considering that Lariosa had worked with the company for eleven years with no known previous bad record, the ends of social and compassionate justice would be served if he is paid full separation pay but not reinstatement without backwages by the NLRC.

In the said case, the employee was validly dismissed for theft but the NLRC nevertheless awarded him full separation pay for his 11 years of service with the company. In Soco, the employee was also legally separated for unauthorized use of a company vehicle and refusal to attend the grievance proceedings but he was just the same granted one-half month separation pay for every year of his 18-year service.

Similar action was taken in Filipro, Inc. v. NLRC, 8 where the employee was validly dismissed for preferring certain dealers in violation of company policy but was allowed separation pay for his 2 years of service. In Metro Drug Corporation v. NLRC, 9 the employee was validly removed for loss of confidence because of her failure to account for certain funds but she was awarded separation pay equivalent to one-half month's salary for every year of her service of 15 years. In Engineering Equipment, Inc. v. NLRC, 10 the dismissal of the employee was justified because he had instigated labor unrest among the workers and had serious differences with them, among other grounds, but he was still granted three months separation pay corresponding to his 3-year service. In New Frontier Mines, Inc. v. NLRC, 11 the employee's 3- year service was held validly terminated for lack of confidence and abandonment of work but he was nonetheless granted three months separation pay. And in San Miguel Corporation v. Deputy Minister of Labor and Employment, et al ., 12 full separation pay for 6, 10, and 16 years service, respectively, was also allowed three employees who had been dismissed after they were found guilty of misappropriating company funds.

The rule embodied in the Labor Code is that a person dismissed for cause as defined therein is not entitled to separation pay. 13 The cases above cited constitute the exception, based upon considerations of equity. Equity has been defined as justice outside law, 14 being ethical rather than jural and belonging to the sphere of morals than of law. 15 It is grounded on the precepts of conscience and not on any sanction of positive law. 16 Hence, it cannot prevail against the expressed provision of the labor laws allowing dismissal of employees for cause and without any provision for separation pay.

Strictly speaking, however, it is not correct to say that there is no express justification for the grant of separation pay to lawfully dismissed employees other than the abstract consideration of equity. The reason is that our Constitution is replete with positive commands for the promotion of social justice, and particularly the protection of the rights of the workers. The enhancement of their welfare is one of the primary concerns of the present charter. In fact, instead of confining itself to the general commitment to the cause of labor in Article II on the Declaration of Principles of State Policies, the new Constitution contains a separate article devoted to the promotion of social justice and human rights with a separate sub- topic for labor. Article XIII expressly recognizes the vital role of labor, hand in hand with management, in the advancement of the national economy and the welfare of the people in general. The categorical mandates in the Constitution for the improvement of the lot of the workers are more than sufficient basis to justify the award of separation pay in proper cases even if the dismissal be for cause.

The Court notes, however, that where the exception has been applied, the decisions have not been consistent as to the justification for the grant of separation pay and the amount or rate of such award. Thus, the employees dismissed for theft in the Firestone case and for animosities with fellow workers in the Engineering Equipment case were both awarded separation pay notnvithstanding that the first cause was certainly more serious than the second. No less curiously, the employee in the Soco case was allowed only one-half month pay for every year of his 18 years of service, but in Filipro the award was two months separation pay for 2 years service. In Firestone, the emplovee was allowed full separation pay corresponding to his 11 years of service, but in Metro, the employee was granted only one-half month separation pay for every year of her 15year service. It would seem then that length of service is not necessarily a criterion for the grant of separation pay and neither apparently is the reason for the dismissal.

The Court feels that distinctions are in order. We note that heretofore the separation pay, when it was considered warranted, was required regardless of the nature or degree of the ground proved, be it mere inefficiency or something graver like immorality or dishonesty. The benediction of compassion was made to cover a multitude of sins, as it were, and to justify the helping hand to the validly dismissed employee whatever the reason for his dismissal. This policy should be re-examined. It is time we rationalized the exception, to make it fair to both labor and management, especially to labor.

There should be no question that where it comes to such valid but not iniquitous causes as failure to comply with work standards, the grant of separation pay to the dismissed employee may be both just and compassionate, particularly if he has worked for some time with the company. For example, a subordinate who has irreconcilable policy or personal differences with his employer may be validly dismissed for demonstrated loss of confidence, which is an allowable ground. A working mother who has to be frequently absent because she has also to take care of her child may also be removed because of her poor attendance, this being another authorized ground. It is not the employee's fault if he does not have the necessary aptitude for his work but on the other hand the company cannot be required to maintain him just the same at the expense of the efficiency of its operations. He too may be validly replaced. Under these and similar circumstances, however, the award to the employee of separation pay would be sustainable under the social justice policy even if the separation is for cause.

But where the cause of the separation is more serious than mere inefficiency, the generosity of the law must be more discerning. There is no doubt it is compassionate to give separation pay to a salesman if he is dismissed for his inability to fill his quota but surely he does not deserve such generosity if his offense is misappropriation of the receipts of his sales. This is no longer mere incompetence but clear

dishonesty. A security guard found sleeping on the job is doubtless subject to dismissal but may be allowed separation pay since his conduct, while inept, is not depraved. But if he was in fact not really sleeping but sleeping with a prostitute during his tour of duty and in the company premises, the situation is changed completely. This is not only inefficiency but immorality and the grant of separation pay would be entirely unjustified.

We hold that henceforth separation pay shall be allowed as a measure of social justice only in those instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. Where the reason for the valid dismissal is, for example, habitual intoxication or an offense involving moral turpitude, like theft or illicit sexual relations with a fellow worker, the employer may not be required to give the dismissed employee separation pay, or financial assistance, or whatever other name it is called, on the ground of social justice.

A contrary rule would, as the petitioner correctly argues, have the effect, of rewarding rather than punishing the erring employee for his offense. And we do not agree that the punishment is his dismissal only and that the separation pay has nothing to do with the wrong he has committed. Of course it has. Indeed, if the employee who steals from the company is granted separation pay even as he is validly dismissed, it is not unlikely that he will commit a similar offense in his next employment because he thinks he can expect a like leniency if he is again found out. This kind of misplaced compassion is not going to do labor in general any good as it will encourage the infiltration of its ranks by those who do not deserve the protection and concern of the Constitution.

The policy of social justice is not intended to countenance wrongdoing simply because it is committed by the underprivileged. At best it may mitigate the penalty but it certainly will not condone the offense. Compassion for the poor is an imperative of every humane society but only when the recipient is not a rascal claiming an undeserved privilege. Social justice cannot be permitted to be refuge of scoundrels any more than can equity be an impediment to the punishment of the guilty. Those who invoke social justice may do so only if their hands are clean and their motives blameless and not simply because they happen to be poor. This great policy of our Constitution is not meant for the protection of those who have proved they are not worthy of it, like the workers who have tainted the cause of labor with the blemishes of their own character.

Applying the above considerations, we hold that the grant of separation pay in the case at bar is unjustified. The private respondent has been dismissed for dishonesty, as found by the labor arbiter and affirmed by the NLRC and as she herself has impliedly admitted. The fact that she has worked with the PLDT for more than a decade, if it is to be considered at all, should be taken against her as it reflects a regrettable lack of loyalty that she should have strengthened instead of betraying during all of her 10 years of service with the company. If regarded as a justification for moderating the penalty of dismissal, it will actually become a prize for disloyalty, perverting the meaning of social justice and undermining the efforts of labor to cleanse its ranks of all undesirables.

The Court also rules that the separation pay, if found due under the circumstances of each case, should be computed at the rate of one month salary for every year of service, assuming the length of such service is deemed material. This is without prejudice to the application of special agreements between the employer and the employee stipulating a higher rate of computation and providing for more benefits to the discharged employee. 17

WHEREFORE, the petition is GRANTED. The challenged resolution of September 22,1987, is AFFIRMED in totoexcept for the grant of separation pay in the form of financial assistance, which is hereby DISALLOWED. The temporary restraining order dated March 23, 1988, is LIFTED. It is so ordered.

Narvasa, Melencio-Herrera, Gutierrez, Jr., Paras, Feliciano, Gancayco, Bidin, Sarmiento, Cortes and Medialdea, JJ., concur.

G.R. Nos. L-34069-70 February 28, 1973

B.F. GOODRICH PHILIPPINES, INC., petitioner, vs.B.F. GOODRICH (MARIKINA FACTORY) CONFIDENTIAL & SALARIED EMPLOYEES UNION-NATU, B.F. GOODRICH (MAKATI OFFICE) CONFIDENTIAL & SALARIED EMPLOYEES UNION-NATU, and COURT OF INDUSTRIAL RELATIONS, respondents.

Manuel O. Chan for petitioner.

Domingo E. de Lara and Associates for respondents.

FERNANDO, J.:

The specific question raised impressed with an aspect of novelty, sustained with vigor and plausibility, persuaded this Court that the petition was worth looning into. It is whether the determination of an unfair labor practice case, brought against respondent-unions, must precede the holding of a certification election. A negative response came from respondent Court of Industrial Relations, through Judge Ansberto Paredes. His order, affirmed by respondent Court en banc, is sought to be nullified in this certiorari proceeding. The answer filed on behalf of respondent-unions would sustain its validity. What is more, it called attention to what is characterized as a consistent pattern of anti-union practices on the part of petitioner intended to defeat the rights of labor to collective bargaining. A careful study of the specific legal issue posed, namely, whether the existence of an unfair labor practice case against a labor organization, consisting of an illegal strike, would suffice to call for the postponement of a proposed certification election, incidentally started at the instance of petitioner itself, yields the same conclusion reached by respondent Court. The objectives of the Industrial Peace Act 1 would be sooner attained if, at the earliest opportunity, the employees, all of them of an appropriate collective bargaining unit, be polled to determine which labor organization should be its exclusive representative. Moreover, the discretion on the matter vested in respondent Court is rarely interfered with. We dismiss the petition.

It was shown in the petition that on February 27, 1971, one Rodolfo Pajaro, as President of B.F. Goodrich (Makati Office) Confidential and Salaried Employees Union-NATU, sent a letter to the petitioner, seeking recognition as the bargaining agent of such employees so that thereafter there could be negotiations for a collective contract. 2Similarly, on the same date, one Pablo C. Fulgar, as President of B.F. Goodrich (Marikina Factory) Confidential and Salaried Employees Union-NATU and one Marcelino Lontok, Jr., representing himself as Vice-President, NATU, sent a letter to the petitioner, of a similar tenor. 3 Petitioner, as employer, countered by filing on March 6, 1971, two petitions for certification election with respondent Court of Industrial Relations. 4 Then came on March 10, 1971, two strike notices from respondents, filed with the Bureau of Labor Relations, demanding union recognition. 5 It was not until April 13, 1971, that respondent Court commenced the hearings of the petitions for certification election. 6 It was then alleged that on two days in April 19 and 20, 1971, there was a strike staged by those affiliated with private respondents, to force recognition of their unions. 7Subsequently, after preliminary investigation first had, on a finding of a prima facie case of illegal strike and unfair labor practice committed by the members of the two unions, Case No. 5612-ULP of the Court of

Industrial Relations for unfair labor practice was filed against them. 8 There was on May 27, 1971, an answer with affirmative defenses filed in such case. 9Earlier, on May 20, 1971, the petitioner filed identical motions in MC Cases Nos. 2995 and 2996 to hold in abeyance the hearings of the petitions for certification election. 10 Then, on August 5, 1971, respondent Court, through Judge Ansberto Paredes, denied the petitioner's motions to hold in abeyance the hearing of MC Cases Nos. 2995 and 2996. 11

The challenged order of Judge Paredes stated the nature of the issue before him as well as the respective positions of the parties: "Submitted for resolution without further arguments are petitioner's motions filed in each of the above-entitled cases, praying that the proceedings therein be held in abeyance pending final judgment in Case No. 5612-ULP and the oppositions thereto filed by the respondent unions. It is petitioner's stand that if Case No. 5612-ULP will prosper and the strike staged by respondent unions during the pendency of the instant cases will be declared illegal and the individual members cited therein as respondents found guilty of the unfair labor practice acts complained of, the latter will consequently lose their status as employees and will be disqualified to vote in a certification election that may be ordered by the Court. On the other hand, respondents-oppositors maintain that the pendency of said unfair labor practice case is not a bar to the hearing of the instant cases, following the ruling of this Court in Case No. 2536-MC entitled "In re: Petition for Certification Election at the Central Textile Mills, Inc., Vicente Flores, et al." " 12 This was his ruling: "The motions can not be granted. Individual respondents in the ULP case are still employees and possessed of the right to self-organization. Included therein is their choice of a bargaining representative (Secs. 2 [d], 3 & 12, R. A. 875). To hold the certification proceedings in abeyance until final judgment of the ULP case will be a denial of the aforesaid statutory right, the employees being left without a collective bargaining representative." 13 The dispositive portion was to deny the motions for lack of merit. There was a motion for reconsideration, but such motion did not prosper. It was denied on August 31, 1971. 14

These certiorari proceedings were then filed with this Court, with petitioners maintaining through copious references to National Labor Relations Board cases that, with the declaration of what it considered to be an illegal strike resulting in an unfair labor practice case, the status as employees of members of the two respondent Labor Unions would be placed in doubt and thus should be determined before the certification election. This Court, in a resolution of November 10, 1971, required private respondents to file an answer. There is, on the whole, an admission of the allegations of the petition. In addition, the following special and affirmative defenses were interposed: "That up to the present, the strike of the respondent unions is still on, thus the striking employees cannot be considered to have abandoned, quit, or otherwise terminated their employment relationship with the petitioner company, on the basis of the doctrine that a strike does not serve to sever the employer-employee relationship; ... That the respondent unions were virtually coerced by the petitioner company's blatant resort to all kinds of union-busting tactics, topped by the technical refusal to recognize and bargain with the respondent unions through the neat trick of filing a baseless petition for certification election and questioning therein the right of over 90% of the unions' membership to join the unions; ... That the members of the respondent unions are still employees of the petitioner company and as such are qualified to vote in any certification election that the Court of Industrial Relations may direct to be held on the petitioner company's own petition, pursuant to Section 2(d) of Republic Act 875, ... ." 15 They sought the dismissal of these certiorari proceedings for lack of merit. Subsequently, memoranda were filed by the parties, and the case was deemed submitted on February 14, 1972.

As made clear at the outset, petitioner has not made out a case for the reversal of the challenged order of Judge Ansberto Paredes.

1. There is novelty in the specific question raised, as to whether or not a certification election may be stayed at the instance of the employer, pending the determination of an unfair labor practice case filed by it against certain employees affiliated with respondent-unions. That is a matter of which this Court has not had an opportunity to speak on previously. What is settled law, dating from the case of Standard Cigarette Workers' Union v. Court of Industrial Relations, 16 decided in 1957, is that if it were a labor organization objecting to the participation in a certification election of a company-dominated union, as a result of which a complaint for an unfair labor practice case against the employer was filed, the status of the latter union must be first cleared in such a proceeding before such voting could take place. In the language of Justice J.B.L. Reyes as ponente: "As correctly pointed out by Judge Lanting in his dissenting opinion on the denial of petitioner's motion for reconsideration, a complaint for unfair labor practice may be considered a prejudicial question in a proceeding for certification election when it is charged therein that one or more labor unions participating in the election are being aided, or are controlled, by the company or employer. The reason is that the certification election may lead to the selection of an employer-dominated or company union as the employees' bargaining representative, and when the court finds that said union is employer-dominated in the unfair labor practice case, the union selected would be decertified and the whole election proceedings would be rendered useless and nugatory." 17 The next year, the same jurist had occasion to reiterate such a doctrine in Manila Paper Mills Employees and Workers Association v. Court of Industrial Relations, 18 thus: "We agree with the CIR on the reasons given in its order that only a formal charge of company domination may serve as a bar to and stop a certification election, the reason being that if there is a union dominated by the Company, to which some of the workers belong, an election among the workers and employees of the company would not reflect the true sentiment and wishes of the said workers and employees from the standpoint of their welfare and interest, because as to the members of the company dominated union, the vote of the said members in the election would not be free. It is equally true, however, that the opposition to the holding of a certification election due to a charge of company domination can only be filed and maintained by the labor organization which made the charge of company domination, because it is the entity that stands to lose and suffer prejudice by the certification election, the reason being that its members might be overwhelmed in the voting by the other members controlled and dominated by the Company," 19 It is easily understandable why it should be thus. There would be an impairment of the integrity of the collective bargaining process if a company-dominated union were allowed to participate in a certification election. The timid, the timorous and the faint-hearted in the ranks of labor could easily be tempted to cast their votes in favor of the choice of management. Should it emerge victorious, and it becomes the exclusive representative of labor at the conference table, there is a frustration of the statutory scheme. It takes two to bargain. There would be instead a unilateral imposition by the employer. There is need therefore to inquire as to whether a labor organization that aspires to be the exclusive bargaining representative is company-dominated before the certification election.

2. The unique situation before us, however, it exactly the reverse. It is management that would have an unfair labor practice case filed by it for illegal strike engaged in by some of its employees concluded, before it would agree to the holding of a certification election. That is the stand of petitioner. It does not carry conviction. The reason that justifies the postponement of a certification election pending an inquiry, as to the bona fides of a labor union, precisely calls for a different conclusion. If under the circumstances disclosed, management is allowed to have its way, the result might be to dilute or fritter away the strength of an organization bent on a more zealous defense of labor's prerogatives. The difficulties and obstacles that must be then hurdled would not be lost on the rest of the personnel, who had not as yet made up their minds one way or the other. This is not to say that management is to be precluded from filing an unfair labor practice case. It is merely to stress that such a suit should not be allowed to lend itself as a means, whether intended or not, to prevent a truly free expression of the will

of the labor group as to the organization that will represent it. It is not only the loss of time involved, in itself not likely to enhance the prospect of respondent-unions, but also the fear engendered in the mind of an ordinary employee that management has many weapons in its arsenal to bring the full force of its undeniable power against those of its employees dissatisfied with things as they are. There is no valid reason then for the postponement sought. This is one instance that calls for the application of the maxim, lex dilationes semper exhorret. Moreover, is there not in the posture taken by petitioner a contravention of what is expressly set forth in the Industrial Peace Act, which speaks of the labor organizations "designated or selected for the purpose of collective bargaining by the majority of the employees in an appropriate collective bargaining unit [be the exclusive] representative of all the employees in such unit for the purpose of collective bargaining." 20 The law clearly contemplates all the employees, not only some of them. As much as possible then, there is to be no unwarranted reduction in the number of those taking part in a certification election, even under the guise that in the meanwhile, which may take some time, some of those who are employees could possibly lose such status, by virtue of a pending unfair labor practice case.

3. Nor would any useful purpose be served by such a postponement of the holding of a certification election until after the determination of the unfair labor practice case filed. The time that might elapse is hard to predict, as the matter may eventually reach this Tribunal. In the meanwhile, there is no opportunity for free choice on the part of the employees as to which labor organization shall be their exclusive bargaining representative. The force of such an objection could be blunted if after a final decision to the effect that the employees complained of were engaged in illegal strike, they would automatically lose their jobs. Such is not the law, however. 21 It does not necessarily follow that whoever might have participated in a strike thus proscribed has thereby forfeited the right to employment. What will be gained then by holding in abeyance the certification election? There is no certitude that the final decision arrived at in the pending unfair labor practice case would sustain the claim of petitioner. Even if success would attend such endeavor, it cannot be plausibly asserted that its employees adjudged as having been engaged in such illegal strike are ipso factodeprived of such status. There is thus an aspect of futility about the whole thing. Why should not respondent Court then decide as it did?

4. This Court, moreover, is led to sustain the challenged order by another consideration. In General Maritime Stevedores' Union v. South Sea Shipping Line, 22 a 1960 decision, Justice Labrador, speaking for this Court, stated that the question of whether or not a certification election shall be held "may well be left to the sound discretion of the Court of Industrial Relations, considering the conditions involved in the case, ... ." 23 This Court has since then been committed to such a doctrine. 24 As a matter of fact, the only American Supreme Court decision cited in the petition, National Labor Relations Board v. A.J. Tower Co., 25 likewise, sustains the same principle. It was there held that the discretion of the labor tribunal, in this case, the National Labor Relations Board of the United States, is not lightly to be interfered with. The issue in that case, as noted in the opinion of Justice Murphy, equally noted for his labor law decisions, as well as his civil libertarian views, "concerns the procedure used in elections under the National Labor Relations Act in which employees choose a statutory representative for purposes of collective bargaining. Specifically, we must determine the propriety of the National Labor Relations Board's refusal to accept an employers post-election challenge to the eligibility of a voter who participated in a consent election." 26 His opinion then went on to state that the First Circuit Court of Appeals set aside the Board's order. The matter was then taken to the United States Supreme Court on certiorari. In reversing the Circuit Court of Appeals, Justice Murphy made clear the acceptance of such a doctrine in the light of the National Labor Relations Act thus: "As we have noted before, Congress has entrusted the Board with a wide degree of discretion in establishing the procedure and safeguards necessary to insure the fair and free choice of bargaining representatives by employees." 27 Hence, this

ruling of American Supreme Court: "It follows that the court below erred in refusing to enforce the Board's order in full." 28 In the United States as in the Philippines, the decision in such matters by the administrative agency is accorded the utmost respect. Relevant is this affirmation by the then Justice, now Chief Justice, Concepcion that in such proceedings, the determination of what is an appropriate bargaining unit is "entitled to almost complete finality." 29 The prevailing principle then on questions as to certification, as well as in other labor cases, is that only where there is a showing of clear abuse of discretion would this Tribunal be warranted in reversing the actuation of respondent Court. 30 There is no showing of such a failing in this case.

WHEREFORE, the petition for certiorari is dismissed. With costs against petitioner.

G.R. Nos. L-30632-33 April 11, 1972

CALTEX FILIPINO MANAGERS AND SUPERVISORS ASSOCIATION petitioner, vs.COURT OF INDUSTRIAL RELATIONS, CALTEX (PHILIPPINES), INC., W.E. MENEFEE and B.F. EDWARDS,respondents.

Domingo E. de Lara and Associates for petitioner.

Siguion Reyna, Montecillo, Belo and Ongsiako for private respondent.

VILLAMOR, J.:p

This is an appeal by the Caltex Filipino Managers and Supervisors' Association from the resolution en banc dated May 16, 1969 of the Court of Industrial Relations affirming the decision dated February 26, 1969 of Associate Judge Emiliano C. Tabigne, Associate Judge Ansberto P. Paredes dissented from the resolution of the majority on the ground that the Industrial Court in a representation case cannot take cognizance of the issue of illegality of a strike and proceed to declare the loss of the employee status of employees inasmuch as that matter ought to be processed as an unfair labor practice case. Judge Tabigne's decision covers two cases, namely, Case No. 1484-MC (1) in which he declared the strike staged on April 22, 1965 by the Association as illegal with the consequent forfeiture of the employee status of three employees (Jose J. Mapa, President of the Association; Dominador Mangalino, Vice-President and Herminigildo Mandanas) and Case No. 4344-ULP against Caltex (Philippines), Inc., Ben F. Edwards W.E. Menefee which Judge Tabigne dismissed for lack of merit and substantial evidence.

The following proceedings gave rise to the present appeal:

The Caltex Filipino Managers and Supervisors' Association is a labor organization of Filipino managers supervisors in Caltex (Philippines), Inc., respondent Company in this proceeding. After the Association was registered as a labor organization it sent a letter to the Company on January 21, 1965 informing the latter of the former's registration; the Company replied inquiring on the position titles of the employees which the Association sought to represent. On February 8, 1965 the Association sent a set of proposals to the Company wherein one of the demands was the recognition of the Association as the duly authorized bargaining agency for managers and supervisors in the Company. To this the Company countered stating that a distinction exists between representatives of management and individuals employed as supervisors and that it is Company's belief that managerial employees are not qualified for membership in a labor organization; hence, it is digested that the Association institute a certification proceeding so as to remove any question with regard to position titles that should be included in the bargaining unit. The Association felt disinclined to follow the suggestion of the Company 1 and so on February 22, 1965 the Company initiated a certification proceeding docketed as Case 1484-MC.

On March 8, 1965 the Association filed notice to strike giving the following reasons:

Refusal to bargain in good faith and to act on demands, a copy of which is enclosed; resort to union-busting tactics in order to discourage the activities of the undersigned

association and its members, including discrimination and intimidation of officers and members of the association and circulation of promises of immediate benefits to be given by the company to its employees, officers and members of this association or those intending to join the same, if the employees concerned in due course will vote against the selection of this association as the exclusive collective bargaining unit for managers and supervisors of the Company in the petition for certification the latter filed. (Annex "A" of Annex "A", Petition).

On March 29, 1965, during the hearing of the certification proceedings, Judge Tabigne cautioned the parties to maintain the status quo; he specifically advised the employees not to go on strike, making it clear, however, that in the presence of unfair labor practices they could go on strike even without any notice. 2

On the basis of the strike notice filed on March 8, 1965 and in view of acts committed by the Company which the Association considered as constituting unfair labor practice, the Association struck on April 22, 1965, after the efforts exerted by the Bureau of Labor Relations to settle the differences between the parties failed. Then, through an "Urgent Petition" dated April 26, 1965 filed as Case No. 1484-MC(1), or as an incident of the certification election proceedings (Case No. 1484-MC), the Company prayed as follows:

WHEREFORE, petitioner respectfully prays this Honorable Court that:

1. The strike of respondent Caltex Filipino Managers and Supervisors Association be declared illegal;

2. The officers and members of respondent association who have instigated, declared, encouraged and/or participated in the illegal strike be held and punished for contempt of this Honorable Court and be declared to have lost their employee status;

3. Pending hearing on the merits and upon the filing of a bond in an amount to be fixed by this Honorable Court, a temporary injunction be issued restraining respondent association, its officers, members and representatives acting for and on their behalf from committing, causing or directing the commission of the unlawful acts complained of, particularly obstructing and preventing petitioner, its customers, officers and non-striking employees from entering and going out of its various offices, in its refinery, installations, depots and terminals and the use or threat of violence and intimidation;

4. After trial, said injunction be made permanent;

5. The damages that petitioner has suffered and will suffer up to the trial of this action be ascertained and judgment be rendered against respondent association, its officers, members and representatives jointly and severally for the amount thereof.

Petitioner prays for such other and further relief as this Honorable Court may deem just and equitable in the premises. (Annex "D", Petition)

Such urgent petition was frontally met by the Association with a motion to dismiss questioning the jurisdiction of the industrial court. The motion to dismiss was opposed by the Company and on May 17, 1965 the trial court denied the same. Not satisfied with the order of May 17, 1965, the Association moved for its reconsideration before respondent court en banc.

Because of the settlement between the parties on May 30, 1965 of some of their disputes, the Association filed with respondent court under date of June 3, 1965 a manifestation (to which was attached a copy of the return-to-work agreement signed by the parties on May 30, 1965), to the effect that the issues in Case No. 1484-MC (1) had become moot and academic. Under date of June 15, 1965 the Company filed a counter-manifestation disputing the representations of the Association on the effect of the return-to-work agreement. On the basis of the manifestation and counter-manifestation, respondent court en banc issued a resolution on August 24, 1965 allowing the withdrawal of the Association's motion for reconsideration against the order of May 17, 1965, on the theory that there was justification for such withdrawal.

Relative to the resolution of August 24, 1965 the Company filed a motion for clarification which the Association opposed on September 22, 1965, for it contended that such motion was in reality a motion for reconsideration and as such filed out of time. But respondent court brushed aside the Association's opposition and proceeded to clarify the resolution of August 24, 1965 to mean that the Company was not barred from continuing with Case No. 1484-MC(1).

At the hearing on September 1, 1965 of Case No. 1484-MC(1) the Association insisted that the incident had become moot and academic and must be considered dismissed and, at the same time, it offered to present evidence, if still necessary, in order to support its contention. Respondent court thereupon decided to secure evidence from the parties to enlighten it on the interpretation of the provisions of the return-to-work agreement relied upon by the Association as rendering the issues raised in Case No. 1484-MC(1) already moot and academic. Evidence having been received, the trial court ruled in its order of February 15, 1966 that under the return-to-work agreement the Company had reserved its rights to prosecute Case No. 1484-MC(1) and, accordingly, directed that the case be set for hearing covering the alleged illegality of the strike. Within the prescribed period the Association filed a motion for reconsideration of the February 15, 1966 order to which motion the Company filed its opposition and, in due course, respondent court en banc issued its resolution dated March 28, 1966 affirming the order. Appeal from the interlocutory order was elevated by the Association to this Court in G.R. No. L-25955, but the corresponding petition for review was summarily "DISMISSED for being premature" under this court's resolution of May 13, 1966.

After a protracted preliminary investigation, the Association's charge for unfair labor practices against the Company and its officials docketed in a separate proceeding was given due course through the filing by the prosecution division of respondent court of the corresponding complaint dated September 10, 1965, in Case No. 4344-ULP against Caltex (Philippines), Inc., W. E. Menefee and B.F. Edwards. As noted by respondent court in its decision under review, Case No. 4344-ULP was filed by the Association because, according to the latter, the Company and some of its officials, including B.F. Edwards, inquired into the organization of the Association and he manifested his antagonism to it and its President; that another Company official, W.E. Menefee issued a statement of policy designed to discourage employees and supervisors from joining labor organizations; that the Company refused to bargain although the Association commands majority representation; that due to the steps taken by the Company to destroy the Association or discourage its members from continuing their union membership, the Association was forced to file a strike notice; that on April 22, 1965 it declared a strike; and that during the strike the

Company and its officers continued their efforts to weaken the Association as well as its picket lines. The Company in its answer filed with respondent court denied the charges of unfair labor practice.

Considering the interrelation of the issues involved in the two cases and by agreement of the parties, the two cases were heard jointly. This explains why only one decision was rendered by respondent court covering both Case No. 1484-MC(1), relating to the illegality of the strike as contended by the Company, and Case No. 4344-ULP, referring to the unfair labor practice case filed by the Association against the Company, W.E. Menefee and B.F. Edwards.

The Association assigned the following errors allegedly committed by respondent court:

I RESPONDENT COURT ERRED IN ASSUMING JURISDICTION OVER CASE NO. 1484-MC(1).

II ASSUMING THAT RESPONDENT COURT HAS JURISDICTION OVER CASE NO. 1484-MC(1), IT ERRED IN NOT HOLDING THAT THE SAME ALREADY BECAME MOOT WITH THE SIGNING OF THE RETURN TO WORK AGREEMENT ON MAY 30, 1965.

III ASSUMING LIKEWISE THAT RESPONDENT COURT HAS JURISDICTION OVER CASE NO. 1484-MC(1), IT ERRED IN HOLDING THAT CAFIMSA'S STRIKE WAS STAGED FOR NO OTHER REASON THAN TO COERCE THE COMPANY INTO RECOGNIZING THE CAFIMSA AND THAT SUCH STRIKE WAS UNJUSTIFIED, UNLAWFUL AND UNWARRANTED.

IV RESPONDENT COURT ERRED IN AFFIRMING THE TRIAL COURT'S CONCLUSION THAT CAFIMSA'S STRIKE WAS DECLARED IN OPEN DEFIANCE OF THE MARCH 29, 1965 ORDER IN CERTIFICATION CASE NO. 1484-MC.

V RESPONDENT COURT ERRED IN AFFIRMING THE TRIAL COURT'S FINDING, DESPITE THE SUBSTANTIAL CONTRARY EVIDENCE ON RECORD, THAT THE STRIKERS RESORTED TO MEANS BEYOND THE PALE OF THE LAW IN THE PROSECUTION OF THE STRIKE AND IN DISREGARDING THE CONSIDERATION THAT THE STRIKERS MERELY EMPLOYED LAWFUL ACTS OF SELF-PRESERVATION AND SELF-DEFENSE.

VI RESPONDENT COURT ERRED IN AFFIRMING THE DISMISSAL BY THE TRIAL COURT OF J.J. MAPA, CAFIMSA'S PRESIDENT, AND OTHERS, OR IN OTHERWISE PENALIZING THE STRIKERS.

VII ASSUMING ARGUENDO THAT THE FACTS FOUND BY THE TRIAL COURT SHOULD BE ACCEPTED, IN DISREGARD OF THE EVIDENCE PRESENTED BY THE COMPANY DAMAGING TO ITS CAUSE, OR ALTHOUGH THE TRIAL COURT DISREGARDED THE SUBSTANTIAL INCRIMINATORY EVIDENCE AGAINST THE COMPANY, RESPONDENT COURT ERRED IN NOT APPLYING THE PRINCIPLE OF IN PARI DELICTO.

VIII RESPONDENT COURT ERRED IN FAILING TO HOLD THAT THE COMPANY IS BARRED UNDER SECTION 9(e) OF THE REPUBLIC ACT NO. 875 FROM SEEKING THE RELIEF PRAYED FOR IN CASE NO. 1484-MC(1).

IX RESPONDENT COURT ERRED IN ENTIRELY ABSOLVING THE COMPANY FROM THE UNFAIR LABOR PRACTICE CHARGE AND IN DISREGARDING THE SUBSTANTIAL INCRIMINATORY EVIDENCE RELATIVE THERETO AGAINST THE COMPANY.

X RESPONDENT COURT ERRED IN RENDERING JUDGEMENT FOR THE CAFIMSA IN CASE NO. 4344-ULP AND IN NOT ORDERING THE COMPANY TO PAY BACK WAGE AND ATTORNEY'S FEES.

XI. RESPONDENT COURT ERRED IN PREMATURELY IMPLEMENTING THE TRIAL COURT'S DISMISSAL OF J.J. MAPA AND DOMINADOR MANGALINO (Brief for the Petitioner, pp. 1-4).

To our mind the issues raised in this appeal may be narrowed down to the following:

1. whether or not the Court of Industrial Relations has jurisdiction over Case No. 1484-MC(1);

2. Whether or not the strike staged by the Association on April 22, 1965 is illegal and, incident thereto, whether respondent court correctly terminated the employee status of Jose Mapa, Dominador Mangalino and Herminigildo Mandanas and reprimanded and admonished the other officers of the Association; and

3. Whether or not respondent court correctly absolved the respondents in Case No. 4344-ULP from the unfair labor practice charge.

Respondent's court's jurisdiction over Case No. 1484-MC(1) has to be tested by the allegations of the "Urgent Petition" dated April 26, 1965 filed by the Company in relation to the applicable provisions of law. A reading of said pleading shows that the same is for injunctive relief under Section 9(d) of Republic Act No. 875 (Magna Carta of Labor); for contempt, obviously pursuant to See, 6 of Commonwealth Act No. 103 in conjunction with Sec. 3 (b) of Rule 71 of the Rules of Court; and for forfeiture of the employee status of the strikers by virtue of their participation in what the Company considered as an "illegal strike."

It is well known that the scheme in Republic Act No. 875 for achieving industrial peace rests essentially on a free and private agreement between the employer and his employees as to the terms and conditions under which the employer is to give work and the employees are to furnish labor, unhampered as far as possible by judicial or administrative intervention. On this premise the lawmaking body has virtually prohibited the issuance of injunctive relief involving or growing out of labor disputes.

The prohibition to issue labor injunctions is designed to give labor a comparable bargaining power with capital and must be liberally construed to that end (U.S. vs. Brotherhood of Locomotive Engineers, 79 F. Supp. 485, Certioraridenied, 69 S. Ct. 137, 335 U.S. 867, cause remanded on other grounds, 174 F. 2nd 160, 85 U.S. App. D.C.,certiorari denied 70 S. Ct. 140, 338 U.S. 872, 94 L. Ed. 535). It is said that the prohibition creates substantive and not purely procedural law. (Oregon Shipbuilding Corporation vs. National Labor Relations Board, 49 F. Supp. 886). Within the purview of our ruling, speaking through Justice Labrador, in Social Security Employees Association (PAFLU), et al. vs. The Hon. Edilberto Soriano, et al. (G.R. No. L-20100, July 16, 1964, 11 SCRA 518, 520), there can be no injunction issued against any strike except in only one instance, that is, when a labor dispute arises in an industry indispensable to the national interest and such dispute is certified by the President of the Philippines to the Court of Industrial Relations in compliance with Sec. 10 of Republic Act No. 875. As a corollary to this, an injunction in an uncertified case must be based on the strict requirement See. 9 (d) of Republic Act No. 875; the purpose of such injunction is not to enjoin the strike itself, but only unlawful activities. To the extent, then, that the Company sought injunctive relief under Sec. 9(d) of Republic Act No.875, respondent court had jurisdiction over the Company's "Urgent Petition" dated April 26, 1965.

As to the "contempt aspect" of Case No. 1484-MC(1), the jurisdiction of respondent court over it cannot be seriously questioned it appearing that Judge Tabigne in good faith thought that his "advice" to the Association during the hearing on March 29, 1965 not to strike amounted a valid order. This is not to say, however, that respond court did not err in finding that the advice given by Judgre Tabigne during the hearing on March 29, 1965 really constituted an order which can be the basis of a contempt proceeding. For, in our opinion, what Judge Tabigne statement during said hearing should be construed what actually was — an advice. To say that it was an order would be to concede that respondent court could validly enjoin strike, especially one which is not certified in accord with Sec. 10 of Republic Act No. 875. To adopt the view of respondent court would not only set at naught the policy of the law as embodied in the said statute against issuance of injunctions, but also remove from the hands of labor unions and aggrieved employees an effective lawful weapon to either secure favorable action on their economic demand or to stop unfair labor practices on the part of their employer.

With respect to the alleged "illegality of the strike," as claimed by the Company, and the consequent forfeiture of the employee status of the strikers, we believe these matters which are neither pertinent to nor connected with a certification case as opined by Judge Paredes, to which we agree. Respondent court, therefore, initially erred in entertaining this issue in Case No. 1484-MC(1). No prejudice, however, has resulted since, as correctly pointed out by respondent court, the illegality for the strike was squarely raised by the Company as a defense in Case No. 4344-ULP and, in any event, we observe that the Association was given all the opportunity to put forward its evidence.

We now come to the important issue as to whether the strike staged by the Association on April 22, 1965 is illegal. From an examination of the records, we believe that the lower court erred in its findings in this regard.

To begin with, we view the return-to-work agreement of May 30, 1965 as in the nature of a partial compromise between the parties and, more important, a labor contract; consequently, in the latter aspect the same "must yield to the common good" (Art. 1700, Civil Code of the Philippines) and "(I)n case of doubt ... shall be construed in favor of the safety and decent living for the laborer" (Art. 1702, ibid). To our mind when the Company unqualifiedly bound itself in the return-to-work agreement that all employees will be taken back "with the same employee status prior to April 22, 1965," the Company thereby made manifest its intention and conformity not to proceed with Case No. 1484-MC, (c) relating the illegality of the strike incident. For while it is true that there is a reservation in the return-to-work agreement as follows:

6. The parties agree that all Court cases now pending shall continue, including CIR Case No. 1484-MC.

we think the same is to be construed bearing in mind the conduct and intention of the parties. The failure to mention Case No. 1484-MC(1) while specifically mentioning Case No. 1484-MC, in our opinion, bars the Company from proceeding with the former especially in the light of the additional specific stipulation that the strikers would be taken back with the same employee status prior to the strike on April 22, 1965. The records disclose further that, according to Atty. Domingo E. de Lara when he testified on October 9, 1965, and this is not seriously disputed by private respondents, the purpose of Paragraph 10 of the return-to-work agreement was, to quote in part from this witness, "to secure the tenure of employees after the return-to-work agreement considering that as I understand there were demotions and suspensions of one or two employees during the strike and, moreover, there was this incident Case

No. 1484-MC(1)" (see Brief for the Petition pp. 41-42). To borrow the language of Justice J.B.L. Reyes in Citizens Labor Union Pandacan Chapter vs. Standard Vacuum Oil Company (G.R. No. L-7478, May 6, 1955), in so far as the illegality of the strike is concerned in this proceeding and in the light of the records.

... the matter had become moot. The parties had both abandoned their original positions and come to a virtual compromise and agreed to resume unconditionally their former relations. To proceed with the declaration of illegality would not only breach this understanding, freely arrived at, but to unnecessarily revive animosities to the prejudice of industrial peace. (Emphasis supplied)

Conceding arguendo that the illegality incident had not become moot and academic, we find ourselves unable to agree with respondent court to the effect that the strike staged by the Association on April 22, 1965 was unjustified, unreasonable and unwarranted that it was declared in open defiance of an order in Case No. 1484-MC not to strike; and that the Association resorted to means beyond the pale of the law in the prosecution of the strike. As adverted to above, the Association filed its notice to strike on March 8, 1965, giving reasons therefor any one of which is a valid ground for a strike.

In addition, from the voluminous evidence presented by the Association, it is clear that the strike of the Association was declared not just for the purpose of gaining recognition as concluded by respondent court, but also for bargaining in bad faith on the part of the Company and by reason of unfair labor practices committed by its officials. But even if the strike were really declared for the purpose of recognition, the concerted activities of the officers and members of the Association in this regard cannot be said to be unlawful nor the purpose thereof be regarded as trivial. Significantly, in the voluntary return-to-work agreement entered into between the Company and the Association, thereby ending the strike, the Company agreed to recognize for membership in the Association the position titles mentioned in Annex "B" of said agreement. 3 This goes to show that striking for recognition is productive of good result in so far as a union is concerned.

Besides, one of the important rights recognized by the Magna Carta of Labor is the right to self-organization and we do not hesitate to say that is the cornerstone of this monumental piece of labor legislation. Indeed, because of occasional delays incident to a certification proceeding usually attributable to dilatory tactics employed by the employer, to a certain extent a union may be justified in resorting to a strike. We should not be understood here as advocating a strike in order to secure recognition of a union by the employer. On the whole we are satisfied from the records that it is incorrect to say that the strike of the Association was mainly for the purpose of securing recognition as bargaining agent.

As will be discussed hereinbelow, the charge of unfair labor practice against the Company is well-taken. It is, therefore, clear error on the part of the Association is unjust, unreasonable and unwarranted.

We said earlier that the advice of Judge Tabigne to maintain the status quo cannot be considered as a lawful order within the contemplation of the Magna Carta of Labor, particularly Section 10 thereof; to so regard it as an order would be to grant respondent court authority to forbid a strike in an uncertified case which it is not empowered to do. The fact that the strike was not staged until April 22, 1965 is eloquent proof enough of the desire of the Association and its officers and members to respect the advice of Judge Tabigne. However, as shown in this case during the pendency of the certification

proceedings unfair labor practices were committed by the Company; hence, the Association was justified in staging a strike and certainly this is not in violation of the advice of Judge Tabigne on March 29, 1965.

Respondent court picked out a number of incidents, taking place during the strike, to support its conclusion that the strikers resorted to means beyond the pale of the law in the prosecution of a strike. Thus, it made mention of the blocking by a banca manned by two striking supervisors by the name of Dominador Mangalino and one Bonecillo of the Caltex M/V Estrella when it was about to depart; the blocking at the refinery of the Company in Bauan, Batangas of the LSCO WARA, the Hills Bros Pinatubo, and the Mobil Visayas so that they could not dock; the blocking by the strikers of incoming vehicles, non-striking supervisors, and rank-and-file workers to prevent them from entering the refinery gate in Bauan, Batangas, at the Poro Terminal, at the Company's Padre Faura office in Manila, and at the Pandacan Terminal; that at the Legaspi and Mambulao Bulk Depots the striking supervisors refused to surrender to their superiors the keys to the depots and storage tanks; and that also at the Legaspi Depot the truck ignition keys were mixed up or thrown at the seats of the trucks in violation of the Company regulations in order to create confusion and thus prevent the trucks from being used. 4 To refute these and similar findings of respondent court the Association, drawing chiefly and abundantly from the Company's own evidence, 5 called attention to the exculpatory declarations of the Company's own witnesses 6 either establishing or tending to establish that the picketing the strikers was generally peaceful and orderly. We find that such, indeed, was the real situation during the strike and it would be the height of injustice to rule otherwise in the face of the records before us.

In ignoring strong evidence coming from the witnesses of the Company damaging to its case as well as that adduced by the Association also damaging to the Company's case, we believe that respondent court clearly and gravely abused its discretion thereby justifying us to review or alter its factual findings (see Philippine Educational Institution vs. MLQSEA Faculty Association, 26 SCRA 272, 278). 7 There is thus here, to employ the language of Justice J.B.L. Reyes in Lakas ng Pagkakaisa sa Peter Paul vs. Court of Industrial Relations, 96 Phil., 63, "an infringement of cardinal primary rights of petitioner, and justified the interposition of the corrective powers of this Court (Ang Tibay vs. Court of Industrial Relations and National Labor Union, 69 Phil., 635):

(2) Not only must the party be given an opportunity to present his case and to adduce evidence tending to establish the rights which he asserts but the tribunal must consider the evidence presented. (Chief Justice Hughes in Morgan vs. U.S., 298 U.S. 468, 56 S. Ct. 906, 80 Law Ed. 1288.) In the language of this Court in Edwards vs. McCoy, 22 Phil., 598, "the right to adduce evidence, without the corresponding duty on the part of the board to consider it, is vain. Such right is conspicuously futile if the person or persons to whom the evidence is presented can thrust it aside without notice or consideration." (Ibid., p. 67) 8

We are convinced from the records that on the whole the means employed by the strikers during the strike, taking into account the activities of the Company and the non-striking employees on the same occasion, cannot be labeled as unlawful; in other words, the Company itself through the provocative, if not unlawful, acts of the non-striking employees 9 is not entirely blameless for the isolated incidents relied upon by respondent court as tainting the picketing of the strikers with illegality. As we said through Justice Fernando in Shell Oil Workers' Union vs. Shell Company of the Philippines, Ltd., L-28607, May 31, 1971, 39 SCRA 276:

6. Respondent court was likewise impelled to consider the strike illegal because of the violence that attended it. What is clearly within the law is the concerted activity of cessation of work in order that a union's economic demands may be granted or that an employer cease and desist from the unfair labor practice. That the law recognizes as a right. There is though a disapproval of the utilization of force to attain such an objective. For implicit in the very concept of a legal order is the maintenance of peaceful ways. A strike otherwise valid, if violent, in character, be placed beyond the pale. Care is to be taken, however, especially where an unfair labor practice is involved, to avoid stamping it with illegality just because it is tainted by such acts. To avoid rendering illusory the recognition of the right to strike, responsibility in such a case should be individual not collective. A different conclusion would be called for, of course, if the existence of force while the strike lasts is pervasive and widespread, consistently and deliberately resorted to as a matter of policy. It could be reasonably concluded then that even if justified as to end, it becomes illegal because of means employed. (Ibid., p. 292; emphasis supplied).

In the same case we further observed:

... Barely four months ago, in Insular Life Assurance Co., Ltd. Employees' Association vs. Insular Life Assurance Co., Ltd., there is the recognition by this Court, speaking through Justice Castro, of picketing as such being "inherently explosive". It is thus clear that not every form of violence suffices to affix the seal of illegality on a strike or to cause the loss of employment of the guilty party. (Ibid., pp. 293-294; emphasis supplied)

In the cited case of Insular Life Assurance Co., Employees' Association-NATO, FGU Insurance Group Workers & Employees Association-NATU and Insular Life Building Employees Association-NATU vs. The Insular Life insurance Co., Ltd., FGU Insurance Group, et al., L-25291, January 30, 1971, 37 SCRA 244, we held through Justice Castro, and this is here applicable to the contention of theAssociation, as follows:

... Besides, under the circumstances the picketers not legally bound to yield their grounds and withdraw from the picket lines. Being where the law expects them to be in the legitimate exercise of their rights, they had every reason to defend themselves and their rights from any assault or unlawful transgression. ... (Ibid., p. 271)

In this cited case, by the way, we reversed and set aside the decision of the Court of Industrial Relations and ordered the Company to reinstate the dismissed workers backwages.

Let us now examine the charge of unfair labor practice which respondent court dismissed for lack of merit and substantial evidence.

Under Sec. 14(c) of Republic Act No. 875, the parties themselves are required "to participate fully and promptly in such meetings and conferences as the (Conciliation) Service may undertake." In this case, the parties agreed to meet on April 21, 1965 and yet, notwithstanding this definite agreement, the Company sent no representatives. The Company's claim to bargaining in good faith cannot be given credence in the face of the fact that W.E. Menefee the Company's Managing Director, conveniently left Manila for Davao on April 17 or 18, 1965, as admitted by W.E. Wilmarth. 10

Nowhere is there serious claim on the part of the Company that it entertains real doubt as to the majority representation of the Association. Consider further that admittedly the certification election proceeding for the Cebu Supervisors Union in the Company had been pending for six (6) years already. From all appearances, therefore, and bearing in mind the deliberate failure of the Company to attend the conciliation meetings on April 19 and 21, 1965, it is clear that the Company employed dilatory tactics doubtless to discredit CAFIMSA before the eyes of its own members and prospective members as an effective bargaining agent, postpone eventual recognition of the Association, and frustrate its efforts towards securing favorable action on its economic demands.

It is likewise not disputed that on March 4, 1965, the Company issued its statement of policy (Exh. B). At that time the Association was seeking recognition as bargaining agent and has presented economic demands for the improvement of the terms and conditions of employment of supervisors. The statement of policy conveyed in unequivocal terms to all employees the following message:

We sincerely believe that good employee relations can be maintained and essential employee needs fulfilled through sound management administration without the necessity of employee organization and representations. We respect an employee's right to present his grievances, regardless of whether or not he is represented by a labor organization. (Emphasis supplied)

An employee reading the foregoing would at once gain impression that there was no need to join the Association. For he is free to present his grievances regardless of whether or not he is represented by a labor organization.

The guilty conduct of the Company before, during after the strike of April 22, 1965 cannot escape the Court's attention. It will suffice to mention typical instances by way of illustration. Long prior to the strike, the Company had interferred with the Cebu Supervisors' Union by enticing Mapa into leaving the Union under the guise of promotion in Manila; shortly before the strike, B.R. Edwards, Manager-Operations, had inquired into the formation and organization of the petitioner Association in this case. During the strike, in addition to the culpable acts of the Company already narrated above, due significance must be given to the inclusion initially of J.J. Mapa and A. Buenaventura, the Association's President and Vice-President respectively, in 1965, in two coercion cases filed at that time and their subsequent elimination from the charges the initiative of the Company after the settlement of strike; 11 the cutting off of telephone facilities extended Association members in the refinery; and the use of a member of the Association to spy for the company. 12 The discriminatory acts practiced by the Company against active unionists after the strike furnish further evidence that Company committed unfair labor practices as charged. 13 Victims of discrimination are J.J. Mapa, A.E. Buenaventura, E.F. Grey, Eulogio Manaay, 14 Pete Beltran, Jose Dizon, Cipriano Cruz, F.S. Miranda and many others. The discrimination consisted in the Company's preferring non-members of the Association in promotions to higher positions and humiliating active unionists by either promoting junior supervisors over them or by reduction of their authority compared to that assigned to them before the strike, or otherwise downgrading their positions. 15

Then, effective July 1, 1969, the Company terminated the employment of J.J. Mapa and Dominador Mangalino, President and Vice-President, respectively, of the Association at that time. And this the Company did not hesitate to do notwithstanding the Association's seasonable appeal from respondent court's decision. We perceive in this particular action of the Company its anti-union posture and

attitude. In this connection, we find merit in the claim of petitioner that the dismissal of Mapa and Mangalino was premature considering that respondent court did not expressly provide that such dismissal might be effected immediately despite the pendency of the appeal timely taken by the Association. The situation would have been different had respondent court ordered the dismissal of Mapa and Mangalino immediately. As the decision is silent on this matter the dismissal of said officers of the Association ought to have been done only upon the finality of the judgment. Because appeal was timely taken, the Company's action is patently premature and is furthermore evidence of its desire to punish said active unionists.

Verily, substantial, credible and convincing evidence appear on record establishing beyond doubt the charge of unfair labor practices in violation of Sec. 4 (a), Nos. (1), (3), (4), (5) and (6), of Republic Act No. 875. And pursuant to the mandate of Art. 24 of the Civil Code of the Philippines that courts must be vigilant for the protection of one at a disadvantage — and here the Association appears to be at a disadvantage in its relations with the Company as the records show — adequate affirmative relief, including backwages, must be awarded to the strikers. It is high-time and imperative that in order to attain the laudable objectives of Republic Act 875 calculated to safeguard the rights of employees, the provisions thereof should be liberally construed in favor of employees and strictly against employer, unless otherwise intended by or patent from language of the statute itself.

The Court takes judicial notice of the considerable efforts exerted by both parties in the prosecution of respective cases and the incidents thereof both before lower court and this Court since 1965 to date. Under the circumstances and in conformity with Art. 2208, No. 11, the Civil Code of the Philippines, it is but just, fair and equitable that the Association be permitted to recover attorney's fees as claimed in its tenth assignment of error.

WHEREFORE, respondent court's resolution en banc dated May 16, 1969, together with the decision dated February 26, 1969, is reversed and judgment is hereby rendered as follows:

1. In Case No. 1484-MC(1), the Court declares the strike of the Caltex Filipino Managers and Supervisors' Association as legal in all respects and, consequently, the forfeit of the employee status of J.J. Mapa, Dominador Mangalino and Herminigildo Mandanas is set aside. The Company is hereby ordered to reinstate J.J. Mapa and Dominador Mangalino to their former positions without loss of seniority and privileges, with backwages from the time of dismissal on July 1, 1969. Since Herminigildo Mandanas appears to have voluntarily left the Company, no reinstatement is ordered as to him.

2. In Case No. 4344-ULP, the Court finds the Company B.F. Edwards and W.E. Menefee guilty of unfair labor practices and they are therefore ordered to cease and desist from the same. In this connection, the Company is furthermore directed to pay backwages to the striking employees from April 22, 1965 to May 30, 1965 and to pay attorney's fees which are hereby fixed at P20,000.00.

Costs against private respondents.