Paulino Ungos III

Lawyer | Law Professor | Author

Tag: 2022-03

  • But the President’s Approval of the Grant of CBA Benefits Was Presumed Under Article 4

    On March 20, 2012, the Clark Development Corporation, the operating arm of the Bases Conversion Development Authority, tasked to manage the Clark Special Economic Zone, executed a renegotiated collective bargaining agreement with its supervisory employees’ union.

    The collective bargaining agreement contained economic terms in favor of the supervisory employees, specifically the grant of additional annual union leave, bereavement leave, salary increases, uniform allowance, monthly Personal Economic Relief Allowance and a signing bonus. Said agreement also granted free use of guesthouses, use of a service vehicle, as well as the reproduction and distribution of the agreement to all members of the supervisory employees’ union.

    However, the Governance Commission for Government-Owned and -Controlled Corporations (Governance Commission) opined that the collective bargaining agreement violated Section 9 of Executive Order No. 7, which was signed by the Philippine President on September 8, 2010. Section 9 imposed a moratorium on increases in the salaries, allowances, incentives and other benefits in Government-Owned and -Controlled Corporations unless specifically authorized by the Philippine President.

    The Governance Commission stated that the Philippine President has not given Clark Development Corporation the authority to renegotiate the collective bargaining agreement with the supervisory employees’ union and to grant the union members increases or additional benefits.

    Furthermore, the Bases Conversion Development Authority recommended that Clark Development Corporation defer or renegotiate its collective bargaining agreement with the supervisory employees’ union should it fail to prove the financial sustainability of the economic terms of such agreement.

    On August 1, 2012, the supervisory employees’ union filed before the National Conciliation and Mediation Board a complaint against Clark Development Corporation for its failure to implement the collective bargaining agreement.

    On November 5, 2012, the Accredited Voluntary Arbitrator ruled in favor of the supervisory employees’ union and upheld the economic terms or grant of benefits in the collective bargaining agreement. According to the Accredited Voluntary Arbitrator, Section 10 of Executive Order No. 7, Series of 2010, suspended the grant of allowances, bonuses, incentives, and other perks to members of the boards of directors/trustees of Government-Owned and -Controlled Corporations, but only until December 31, 2010. The Accredited Voluntary Arbitrator also held that the approval of the Philippine President in the grant of additional benefits was presumed under the rule on liberal construction in favor of labor under Article 4 of the Labor Code of the Philippines.

    Aggrieved, Clark Development Corporation elevated the case to the Court of Appeals through a petition for review.

    On April 8, 2013, the Court of Appeals affirmed the Accredited Voluntary Arbitrator’s findings. The Court of Appeals explained that Executive Order No. 7, Series of 2010, does not apply to Clark Development Corporation, as well as to the supervisory employees’ union. The Court of Appeals added that the Philippine President’s approval of the grant of additional benefits was presumed in line with the principle that all doubts should be resolved in favor of labor.

    Clark Development Corporation filed its petition for review on certiorari before the Supreme Court and asserted that the Court of Appeals and the Accredited Voluntary Arbitrator erred in allowing the grant of additional benefits to the supervisory employees’ union.

    Clark Development Corporation asserted the following:

    • The economic terms of the collective bargaining agreement were invalid and cannot be enforced because these were renegotiated without the approval of the Philippine President.
    • The GOCC Governance Act of 2011 gave the Philippine President the authority to fix the Government-Owned and -Controlled Corporations’ compensation framework.
    • Corollarily, approval of additional benefits by the Philippine President cannot be presumed.

    By contrast, the supervisory employees’ union contended that:

    • The collective bargaining agreement was the law between the parties and must be respected.
    • The collective bargaining agreement was renegotiated consistent with the employees’ rights to organization and collective bargaining.
    • Executive Order No. 7, Series of 2010, was not applicable to Government-Owned and -Controlled Corporations without original charter.
    • The GOCC Governance Act of 2011 recognized the vested rights of government employees to their salaries.

    In the meantime, the Governance Commission moved to intervene in the proceedings and argued that:

    • The collective bargaining agreement contravened Executive Order No. 7, Series of 2010, and the GOCC Governance Act of 2011.
    • The moratorium on the grant of additional benefits remained effective pending the promulgation and approval of the compensation and position classification system for Government-Owned and -Controlled Corporations.
    • In any event, there were no factual and legal bases to presume the consent of the Philippine President on the collective bargaining agreement’s economic provisions.

    Were the additional benefits granted to the supervisory employees under the collective bargaining agreement valid?

    The Supreme Court ruled in the negative.

    The Supreme Court began with the settled rule that the right of government employees to self-organization is not as extensive as in the right of private employees. It then mentioned that the right of government employees to collective bargaining and negotiation is subject to limitations, in that only the terms and conditions of government employment not fixed by law can be negotiated.

    The Supreme Court pointed out that in order to control the grant of excessive salaries, allowances, incentives, and other benefits, Executive Order No. 7, Series of 2010, particularly Section 9, has imposed a moratorium on the grant of additional salaries and allowances to employees and officers of Government-Owned and -Controlled Corporations until specifically authorized by the Philippine President.

    The Supreme Court stressed that the clause “until specifically authorized by the Philippine President” is not in the nature of an exception. Rather, the clause provides for the situation where the Philippine President, deems it proper to lift the moratorium. According to the Supreme Court, the use of the preposition “until” before the phrase “specifically authorized by the Philippine President” denotes that the moratorium continues up to a particular time, i.e., when the President authorizes anew the grant of the prohibited increases.

    On this score, the Supreme Court took judicial notice that the Philippine President has not lifted the moratorium. The Court thus ruled that the economic terms of the collective bargaining agreement executed by the Clark Development Corporation with its supervisory employees’ union on March 20, 2012 were void for violating the law.

    The Supreme Court noted the reliance of the Accredited Voluntary Arbitrator and the Court of Appeals upon Section 10 of Executive Order No. 7, Series of 2010. The Supreme Court, however, pointed out that Section 10 is inapplicable to the supervisory employees’ union of Clark Development Corporation, as the said section pertains to members of the Board of Directors/Trustees of Government-Owned and -Controlled Corporations.

    The Supreme Court then declared as erroneous the exclusion by the Court of Appeals of Clark Development Corporation from the coverage of Executive Order No. 7, Series of 2010. This was because nothing in the law makes any express distinction between Government-Owned and -Controlled Corporations with original charter, and those incorporated under the Corporation Code. For the Supreme Court, Executive Order No. 7, Series of 2010, applies to all Government-Owned and -Controlled Corporations regardless of the manner of creation.

    The Supreme Court added that although the GOCC Governance Act of 2011 authorizes the Governance Commission to develop a compensation and position classification system applicable to all officers and employees of Government-Owned and -Controlled Corporations, such system is subject to approval of the Philippine President.

    In the present case, the Supreme Court found that the Governance Commission did not give its favorable recommendation on the renegotiation of additional benefits by Clark Development Corporation and the supervisory employees’ union. The Supreme Court noted that the Governance Commission even opined that the collective bargaining agreement violated Section 9 of Executive Order No. 7, Series of 2010.

    The Supreme Court then highlighted that on March 22, 2016, the Philippine President issued Executive Order No. 203, Series of 2016, which disallowed the Governing Boards of all covered Government-Owned and -Controlled Corporations, whether Chartered or Non-chartered, to negotiate with their officers and employees the economic terms of their collective bargaining agreements.

    For the Supreme Court, such provision supports the finding that the moratorium under Executive Order No. 7, Series of 2010, has remained effective pending the promulgation and approval of the compensation framework for all the Government-Owned and -Controlled Corporations. The Court found no factual and legal bases for the Court of Appeals and the Accredited Voluntary Arbitrator to presume that the Philippine President approved the renegotiated economic provisions of the collective bargaining agreement between Clark Development Corporation and its supervisory employees’ union.

    The Supreme Court emphasized that the construction in favor of labor only applies when there are doubts in the interpretation and implementation of the provisions of the Labor Code of the Philippines and its implementing rules and regulations. The Supreme Court stated that the language of Section 9 of Executive Order No. 7, Series of 2010, on the moratorium on increases in rates of salaries and other benefits is unambiguous. Consequently, the Supreme Court emphasized that the law must be interpreted following its plain and obvious meaning and applied according to its express terms. For the Supreme Court, the law requires the Philippine President’s consent as to additional benefits effectively lifting the moratorium, and any presumption of such approval is unwarranted.

    The Supreme Court concluded that Clark Development Corporation had valid reason not to implement the increases in salaries and benefits as provided in the renegotiated collective bargaining agreement. This is because the law has fixed the terms and conditions of government employment, and any contract that violates the law is void and cannot be a source of rights and obligations.

    Further reading:

    • Clark Development Corp. v. Association of CDC Supervisory Personnel Union, G.R. No. 207853, March 30, 2022.

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  • A Liberal Interpretation of the Rules Is Primarily Granted for the Employee’s Favor

    Sometime in 2012, several stockholders of the employer bank complained about the discrepancies in the amounts of the purchase price of stock subscriptions appearing in the original receipts as against the duplicate copies issued by the said bank. The anomaly involved several millions of pesos collected from stockholders of the employer bank which, if not corrected, will certainly tarnish the image and integrity of the latter.

    Acting on this anomaly, the employer bank conducted an investigation and confirmed the irregularities. It discovered that in the original receipts given to the stockholders, the stated price of shares ranged from Php250.00 to Php275.00, but in the duplicate copies retained by the employer bank, only Php100.00 was indicated. It also found that the original receipts were signed by the then president of the employer bank, while the duplicate copies were signed either by its then treasury head or branch manager.

    Thus, to comply with regulations mandating the prompt report of anomalies to the Bangko Sentral ng Pilipinas (BSP), the Board of Directors of the employer bank approved a Report on Crimes and Losses and directed Ariel — its Compliance Officer — to certify the same. However, Ariel refused to certify the report, reasoning that no independent investigation was conducted, and that he cannot completely validate the same for lack of material data and evidence. Ariel further remarked that he was being pressured to certify the report.

    Thereafter, Ariel claimed that instead of furnishing him the hard copies of the reports and relevant attachments to enable him to verify and certify the same, the employer bank issued him two show cause orders and put him on preventive suspension for neglect of duty. Meanwhile, the employer bank contended that several administrative hearings were scheduled to hear the side of Ariel, which he ignored.

    On March 25, 2013, Ariel filed a complaint against the employer bank for illegal suspension and money claims. This complaint was subsequently amended to include illegal dismissal, in view of the eventual termination of his employment.

    The employer bank did not file a position paper during the proceedings before the Office of the Labor Arbiter.

    The Office of the Labor Arbiter then ruled that the dismissal of Ariel was without a valid cause and that he was denied due process for having been summarily dismissed.

    The National Labor Relations Commission reversed the ruling of the Office of the Labor Arbiter. It adopted a liberal interpretation of procedural rules, relaxed the same and held that substantial justice must prevail over technicalities. Thus, it allowed the employer bank to submit countervailing evidence even on appeal. On the substantial issue, the National Labor Relations Commission found that Ariel was not illegally dismissed, since the employer bank was able to discharge the burden of proving that it had a just cause to terminate Ariel’s employment.

    The Court of Appeals affirmed the Decision of the National Labor Relations Commission. The said Court found no grave abuse of discretion on the part of the National Labor Relations Commission in relaxing its procedural rules. For the Court of Appeals, the failure of the employer bank to file a Position Paper and submit evidence was justified and satisfactorily explained, since it was neither given summons, nor notified of the scheduled preliminary conference and further hearings after Ariel filed his amended complaint. On the substantive issue, the Court of Appeals ruled that Ariel was validly dismissed for a just and valid cause.

    Ariel elevated his case to the Supreme Court to assail the decision of the Court of Appeals.

    Ariel asserted that the Court of Appeals abused its discretion amounting to lack or excess of jurisdiction:

    • in upholding the National Labor Relation Commission’s liberal application of the procedural rules in favor of the employer bank; and
    • in ruling that he was validly dismissed from employment.

    Was the liberal application of the procedural rules in favor of the employer bank warranted?

    Apart from its finding that Ariel was illegally dismissed from employment, the Supreme Court ruled that the the National Labor Relations Commission and the Court of Appeals erred in allowing the employer bank to present evidence on appeal.

    The Supreme Court reiterated established principles from jurisprudence and experts by stating that due process is a malleable concept anchored on fairness and equity. At its core is simply the reasonable opportunity for every party to be heard. What is required is not actual hearing but a real opportunity to be heard. Thus, one who refuses to appear at a hearing is not thereby denied due process if a decision is reached without waiting for him. Likewise, the requirement of due process can be satisfied by subsequent due hearing.

    In the present case, the Supreme Court ruled that the employer bank had been accorded ample opportunity to present its side during the proceedings before the Office of the Labor Arbiter based on the following findings:

    • The employer bank unjustifiably missed at least two hearing dates: that on June 4, 2013, and that on June 19, 2013. With regard to the hearing on June 19, 2013, the Supreme Court stated that the employer bank missed the hearing despite having been directed to attend by the Office of the Labor Arbiter;
    • The employer bank, at this point, had already obtained a copy of the amended complaint which would have enabled it to intelligently respond. According to the Court, the issuance of the summons would have been a mere superfluity;
    • The employer bank’s absences were unexplained; and
    • If the employer bank truly held sacred its right to due process, it should have wasted no time nor missed no opportunity to assert such right as early as during the initial stages of the proceedings. It should have at least pleaded for the Office of the Labor Arbiter to reopen the proceedings and admit its position paper, if there ever was one. At the very least, the employer bank was well-aware that a complaint was filed against it and failed to be proactive in the proceedings. The Court sensed employer bank’s cavalier attitude and remarked that it reeked of negligence and disrespect to duly instituted authorities and rules of procedures, which it could never tolerate.

    While commending the National Labor Relations Commission and the Court of Appeals in upholding substantial justice, the Supreme Court reminded them such principle must always be balanced with respect and honest efforts to comply with procedural rules.

    The Court stated that it cannot always be about substantial justice, especially to the point of disrespect and utter disregard to procedural rules. Imperative justice requires correct observance of indispensable technicalities precisely designed to ensure its proper dispensation. It cannot be overemphasized that procedural rules have their own wholesome rationale in the orderly administration of justice. Justice has to be administered according to the Rules in order to obviate arbitrariness, caprice, or whimsicality. It must never be forgotten that, generally, the application of the rules must be upheld, and the suspension or even mere relaxation of its application, is the exception.

    In this regard, the Court emphasized the policy that although in labor cases, strict adherence to the technical rules of procedure is not required, this liberal policy should still be subject to rules of reason and fairplay. The liberality of procedural rules is qualified by two requirements:

    • a party should adequately explain any delay in the submission of evidence; and
    • a party should sufficiently prove the allegations sought to be proven.

    The reason for these requirements, said the Court, is that the liberal application of the rules before quasi-judicial agencies cannot be used to perpetuate injustice and hamper the just resolution of the case. Neither is the rule on liberal construction a license to disregard the rules of procedure.

    In the present case, the Court highlighted the fact the employer bank failed to adequately explain and justify their non-participation in the proceedings before the Office of the Labor Arbiter.

    For the Court, the application of a more liberal policy was unwarranted, contrary to the rulings of the National Labor Relations Commission and the Court of Appeals.

    At any rate, the Court maintained that the employer bank in the present case is not entitled to be accorded a liberal interpretation of the rules; the same being primarily granted for the employee’s favor, and not the employer.

    The Court explained that the principles embodied by all prevailing labor rules, legislations, and regulations are derived from the Constitution, which intensely protects the working individual and deeply promotes social justice.1Article II, Section 18 of the 1987 Constitution provides: “SECTION 18. The State affirms labor as a primary social economic force. It shall protect the rights of workers and promote their welfare.” Meanwhile, Article XIII, Section 3 states: “SECTION 3. The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and equality of employment opportunities for all.” Lastly, Article 4 of PD 442 or the Labor Code, provides: Article 4. Construction in favor of labor. — All doubts in the implementation and interpretation of the provisions of this Code, including its implementing rules and regulations, shall be resolved in favor of labor.” The measures embedded in our legal system which accord specific protection to labor stems from the reality that normally, the laborer stands on unequal footing as opposed to an employer. Indeed, the labor force is a special class that is constitutionally protected because of the inequality between capital and labor. In fact, labor proceedings are so informally and, as much as possible, amicably conducted and without a real need for counsel, perhaps in recognition of the sad fact that a common employee does not or have extremely limited means to secure legal services nor the mettle to endure the extremely antagonizing and adversarial atmosphere of a formal legal battle. Thus, in the common scenario of an unaided worker, who does not possess the necessary knowledge to protect his rights, pitted against his employer in a labor proceeding, the former cannot be expected to be perfectly compliant at all times with every single twist and turn of legal technicality. The same, however, cannot be said for the latter, who more often than not, has the capacity to hire the services of a counsel. As an additional aid therefore, a liberal interpretation of the technical rules of procedure may be allowed if only to further bridge the gap between an employee and an employer.

    The Court clarified that it is not saying that the rules may never be relaxed in favor of the employer, and that every labor dispute will be automatically decided in favor of labor. In certain cases, of course, a liberal approach to the rules may be had even if it favors the employer. Such allowance, however, must be measured against standards stricter than that imposed against the worker, and only in compelling and justified cases where the employer will definitely suffer injustice should such liberal interpretation be disallowed. The Supreme Court stated that such was not the situation of the employer bank in the present case.

    Further reading:

    • Reyes v. Rural Bank of San Rafael (Bulacan), Inc., G.R. No. 230597, March 23, 2022.

  • He Is Not Our Employee

    Gerome alleged that he was hired by JTA Packing Corporation (JTA) on December 26, 2014 as an all-around driver.

    He narrated that on September 5, 2016, an officer of JTA maltreated him, prevented him from leaving the company premises, and threatened his life. Gerome no longer reported to work.

    Believing that his continued employment became impossible, unbearable, and unlikely, Gerome filed a complaint for illegal dismissal against his employer on January 30, 2017.

    JTA contended that Gerome was not its employee, as established by the following documents which never included Gerome’s name:

    • copies of its alpha list of employees as filed with the Bureau of Internal Revenue (BIR) for the years 2014-2016;
    • payroll monthly reports and 13th month pay it paid for the years 2015-2016;
    • reports on Social Security System (SSS) contributions of its employees remitted for the years 2015-2016;
    • PhilHealth remittance reports on contributions of its employees in 2016; and
    • Pag-IBIG fund membership and registration/remittance forms indicating the names of its employees and their contributions for the period of 2015-2016.

    On June 28, 2017, the Office of the Labor Arbiter rendered a Decision which declared the existence of an employer-employee relationship between Gerome and JTA. It then ruled that Gerome was constructively dismissed because his continued employment with JTA was rendered impossible due to fear after the September 5, 2016 incident of maltreatment and detention.

    On appeal, the National Labor Relations Commission reversed and set aside the Decision of the Office of the Labor Arbiter. It dismissed the complaint for lack of employer-employee relationship between Gerome and JTA.

    One reason was that the pay slips submitted by Gerome failed to reveal who issued the same. The Commission also discovered discrepancies on the dates of their issue in that the pay slips dated back as early as March 2014 contrary to Gerome’s claim that he was hired in December of the same year.

    The other reason was that JTA’s documentary evidence showed that Gerome was not among its employees.

    The Court of Appeals affirmed the ruling of the National Labor Relations Commission, in view of Gerome’s failure to substantiate his claim that he is an employee of JTA.

    Gerome elevated his case to the Supreme Court.

    Was Gerome an employee of JTA?

    The Supreme Court ruled in the negative.

    The Court reiterated the settled rule that allegations in the complaint must be duly proven by competent evidence and that the burden of proof is on the party making the allegation. In an illegal dismissal case, the onus probandi rests on the employer to prove that its dismissal of an employee was for a valid cause. However, before a case for illegal dismissal can prosper, an employer-employee relationship must first be established. In this regard, the “four-fold test” determines the existence of an employer-employee relationship, to wit: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the power to control the employee’s conduct.

    In the present case, the Court stressed that since it was Gerome who was claiming to be an employee of JTA, he had the burden of proving the existence of an employer-employee relationship. The Court found that Gerome failed to discharge this burden.

    Gerome did not present any employment contract or company identification card to prove Gerome’s employment with JTA. According to the Court, in a business establishment, an identification card is usually provided not only as a security measure but mainly to identify the holder thereof as a bona fide employee of the firm that issues it.

    The pay slips presented by Gerome bore no indication that the amount he allegedly received came from JTA. The Court pointed out that the pay slips submitted by Gerome even showed that he had been receiving compensation as early as February 2014, when he had claimed that he was hired by JTA months later, or on December 26, 2014. The Court said that this wide gap between February 2014 and December 2014 was not a trivial inconsistency.

    Furthermore, there were no deductions from Gerome’s supposed salary such as withholding tax, SSS, PhilHealth or Pag-IBIG Fund contributions which were usual deductions from employees’ salaries.

    On the other hand, the following voluminous documentary evidence submitted by JTA, which were duly signed by its authorized representative and stamp received by the concerned government agencies, indubitably showed that Gerome was not among its employees:

    • the alpha list of employees submitted to the Bureau of Internal Revenue for the years during which Gerome claims to have been employed by JTA;
    • the payroll monthly reports; and
    • the remittances made by JTA of its employees’ monthly contributions to the SSS, PhilHealth and Pag-IBIG Fund.

    As to the power of control, the Court acknowledged that the purported driver’s itineraries presented by Gerome prescribed the manner by which his work as a driver is to be carried out. However, the Court found that the said driver’s itineraries were not signed by JTA’s authorized personnel and contained discrepancies on JTA’s name and address. For the Court, the driver’s itineraries were insufficient to establish the element of control.

    The Court accordingly denied Gerome’s petition for lack of merit.

    Further reading:

    • Ginta-Ason v. J.T.A. Packaging Corp., G.R. No. 244206, March 16, 2022.

  • Jurisdiction of the Labor Arbiter and the POEA

    Mike and Ryan alleged that on May 11, 2011, they were hired by The W Construction through its agent, U R Employed International Corporation, as construction workers in Malaysia. They entered into a two-year employment contract with a monthly salary of 800 Malaysian Ringgit.

    Mike and Ryan narrated that upon their arrival in Malaysia, the broker who fetched them from the airport took their passports. They were made to live in a place with unsafe living conditions. Also, they worked beyond regular hours without pay. Later, they discovered that they only had tourist visas, and that the employer was hiding them from the authorities because they did not have work permits.

    Mike and Ryan claimed that they reported their living and working conditions to their broker, but their grievances were unheeded.

    Mike and Ryan stated that they were left without any other recourse, which was why on August 14, 2011, Ryan sent an e-mail to the editorial of a Philippine newspaper company, narrating their experience and seeking assistance.

    Mike and Ryan continued that in the last week of August 2011, the employer’s human relations officer questioned them about the e-mail sent to the Philippine newspaper company. On September 13, 2011, a supervisor informed them about the termination of their employment. The employer told them that they were processed for repatriation and would be sent home on September 15, 2011. However, they were only repatriated sometime in November 2011. In the meantime, the employer cut off their food supply.

    On December 5, 2011, Mike and Ryan filed a complaint for illegal dismissal and money claims against their employer.

    Initially, the complaint was dismissed without prejudice because both parties failed to submit their respective position papers. On March 26, 2012, the complaint was reinstated upon a Motion to Revive filed by Mike and Ryan.

    The employer denied the allegations of Mike and Ryan. The employer countered that Mike voluntarily resigned from his job, while Ryan was dismissed from employment on the ground of grave misconduct when he sent a derogatory email to a Philippine newspaper company. The employer further submitted a summary of pay slips to prove that Mike and Ryan were properly paid their salary and benefits.

    The Office of the Labor Arbiter found that Mike and Ryan were constructively dismissed due to the unbearable and unfavorable working conditions set by the employer. They were awarded reimbursement of placement fees, backwages until the end of their employment contracts, damages, and attorney’s fees. Ryan’s claims for overtime pay and illegal deductions were denied for being unsubstantiated. Mike’s claim of illegal deduction was given credence by the Office of the Labor Arbiter.

    The National Labor Relations Commission denied the employer’s appeal and affirmed the ruling of the Office of the Labor Arbiter.

    The employer sought recourse before the Court of Appeals, ascribing grave abuse of discretion on the part of the National Labor Relations Commission.

    Record revealed that before Mike and Ryan filed their complaint with the Office of the Labor Arbiter, they also filed a complaint with the Philippine Overseas Employment Administration against the employer and its agent for violation of the 2002 POEA Rules and Regulations Governing the Recruitment and Employment of Land-Based Overseas Workers. The complaint alleged the same set of facts in the complaint before the Office of the Labor Arbiter and were supported by the same affidavits. The complaint filed before the Philippine Overseas Employment Administration was dismissed for failure of Mike and Ryan to substantiate their allegations and attend the scheduled hearings. Mike and Ryan appealed the dismissal to the Department of Labor and Employment, which issued an order dismissing their appeal.

    Regarding the petition assailing the ruling of the National Labor Relations Commission, the Court of Appeals dismissed the same since it found substantial evidence to prove that respondents were illegally dismissed.

    The employer then elevated its case to the Supreme Court. It pointed out that the other complaint filed by Mike and Ryan before the Philippine Overseas Employment Administration had been dismissed. The employer thus posited that it was erroneous for the Court of Appeals to not consider the orders issued by the Philippine Overseas Employment Administration and the Department of Labor and Employment, when Mike and Ryan alleged the same facts in their complaint filed before the Office of the Labor Arbiter.

    Was the Court of Appeals correct in dismissing the employer’s petition?

    The Supreme Court ruled in the affirmative because no basis supported the argument that the Office of the Labor Arbiter should have considered the orders issued by the Philippine Overseas Employment Administration and the Department of Labor and Employment in the adjudication of the complaint filed by Mike and Ryan before the Office of the Labor Arbiter.

    The first reason discussed by the Supreme Court was that the Philippine Overseas Employment Administration could not have prevented the Office of the Labor Arbiter from ruling on the complaint of Mike and Ryan. Stated otherwise, the Doctrine of Primary Jurisdiction did not apply.

    The Supreme Court discussed that the Doctrine of Primary Jurisdiction, also known as the Doctrine of Prior Resort, is the power and authority vested by the Constitution or by statute upon an administrative body to act upon a matter by virtue of its specific competence. The Doctrine of Primary Jurisdiction prevents the court from arrogating unto itself the authority to resolve a controversy which falls under the jurisdiction of a tribunal possessed with special competence.

    The Supreme Court further discussed that Primary Jurisdiction does not necessarily denote Exclusive Jurisdiction. Primary Jurisdiction applies where a claim is originally cognizable in the courts and comes into play whenever enforcement of the claim requires the resolution of issues which, under a regulatory scheme, has been placed within the special competence of an administrative body; in such case, the judicial process is suspended pending referral of the issues to the administrative body for its review.

    In the present case, the Supreme Court found that while Mike and Ryan alleged the same set of facts and submitted the same affidavits before the Office of the Labor Arbiter and the Philippine Overseas Employment Administration, the complaints raised different causes of action. Specifically, the complaint filed before the Office of the Labor Arbiter involved the issue of illegal dismissal and various money claims, while the Philippine Overseas Employment Administration complaint involved administrative disciplinary liability for violation of the 2002 POEA Rules and Regulations Governing the Recruitment and Employment of Land-Based Overseas Workers. For the Supreme Court, the Doctrine of Primary Jurisdiction could not have applied.

    The second reason discussed by the Supreme Court was that in some instances, an administrative body is granted primary jurisdiction, concurrent with another government agency or the regular court.

    However, the Supreme Court found that a review of the respective jurisdictions of the Philippine Overseas Employment Administration and the Office of the Labor Arbiter reveals that these administrative bodies do not have concurrent jurisdiction.

    The Supreme Court mentioned that Section 10 of the Migrant Workers and Overseas Filipinos Act of 1995, as amended by Republic Act No. 10022, provides that the Office of the Labor Arbiter shall have original and exclusive jurisdiction to hear and decide the claims arising out of an employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment including claims for actual, moral, exemplary, and other forms of damage. On the other hand, Section 6, Part A, Rule X of the Implementing Rules and Regulations of Republic Act No. 10022 provides that the Philippine Overseas Employment Administration exercises administrative jurisdiction arising out of violations of rules and regulations and administrative disciplinary jurisdiction over employers, principals, contracting partners, and overseas Filipino workers.

    For the Supreme Court, the jurisdiction of these administrative bodies does not in any way intersect as to warrant the application of the doctrine of primary jurisdiction. Accordingly, said the Supreme Court, the appreciation by the Philippine Overseas Employment Administration and Office of the Labor Arbiter of the complaints should be limited to matters falling within their respective jurisdictions, and only insofar as relevant to the resolution of the controversies presented before them.

    The third reason discussed by the Supreme Court was that the finality of the Order issued by the Department of Labor and Employment had no effect on the resolution of the present petition. For the Supreme Court, the Doctrine of Immutability of Judgments does not apply to this case.

    Under the Doctrine of Immutability of Judgments, all the issues between the parties are deemed resolved and laid to rest once a judgment becomes final. No other action can be taken on the decision except to order its execution. The decision becomes immutable and unalterable and may no longer be modified in any respect even if the modification is meant to correct erroneous conclusions of fact or law and whether it will be made by the court that rendered it or by the highest court of the land.

    In the present case, the Supreme Court found that the Order of the Department of Labor and Employment, which had become final, settled the issue of whether the employer and its agent violated the 2002 POEA Rules and Regulations Governing the Recruitment and Employment of Land-Based Overseas Workers. It did not involve the issue of the illegal dismissal and money claims lodged by Mike and Ryan with the Office of the Labor Arbiter. To reiterate, the Supreme Court found that the finality of the Order issued by the Department of Labor and Employment had no effect on the resolution of the present petition.

    Further reading:

    • U R Employed International Corp. v. Pinmiliw, G.R. No. 225263, March 16, 2022.