MATERNITY CHILDREN'S HOSPITAL v.

SECRETARY OF LABOR

FACTS: Petitioner is a semi-governmental hospital in Cagayan De Oro and Employing forty-one (41) employees. Aside from
salary and living allowances, the employees are given food, but the amount of which is deducted from their respective
salaries. On May 3, 1986, ten (10) employees filed a complaint with the Regional Director of Labor and Employment, Region
10, for underpayment of their salaries and ECOLAS. Consequently, the Regional Director directed two of his labor standard
and welfare officers to investigate and ascertain the truth of the allegations in the complaint. Based on the report and
recommendation, the Regional Director issued an order dated August 4, 1986, directing payment of ₱723, 888.58, to all the
petitioner’s employees. The Secretary of Labor likewise affirmed the Decision and dismissed the Motion for Reconsideration of
the petitioner. In a petition for certiorari, petitioner questioned the jurisdiction of the Regional Director and the all-embracing
applicability of the award involving salary differentials and ECOLAS, in that it covers not only the hospitals employees who
signed the complaints, but also those who are not signatories to the complaint, and those who were no longer in the service of
the hospital at the time the complaint was filed.

ISSUE: Does the Regional Director have jurisdiction over the case? Did it err in extending the award to all hospital
employees?

LEGAL BASIS: Article 128 (b) of the Labor Code , as amended by E.O. No. 111 “Labor standards refer to the minimum
requirements prescribed by existing laws, rules, and regulations relating to wages, hours of work, cost of living allowance and
other monetary and welfare benefits, including occupational, safety, and health standards
(Section 7, Rule I,Rules on the Disposition of Labor Standards Cases in the Regional Office, dated September 16, 1987)

CASE HISTORY: On May 23, 1986, ten (10) employees of the petitioner employed in different capacities/positions filed a
complaint with the Office of the Regional Director of Labor and Employment, for underpayment of their salaries and ECOLAs,
which was docketed as ROX Case No. CW-7I-86. On June 16, 1986, the Regional Director directed two of his Labor Standard
and Welfare Officers to inspect the records of the petitioner to ascertain the truth of the allegations in the complaints. Payrolls
covering the periods of May, 1974, January, 1985, November, 1985 and May, 1986, were duly submitted for inspection. On
July 17, 1986, the Labor Standard and Welfare Officers submitted their report confirming that there was underpayment of
wages and ECOLAs of all the employees by the petitioner. Based on this inspection report and recommendation, the Regional
Director issued an Order dated August 4, 1986, directing the payment of P723,888.58, representing underpayment of wages
and ECOLAs to all the petitioner's employees. Petitioner appealed from this Order to the Minister of Labor and Employment,
Hon. Augusto S. Sanchez, who rendered a Decision on September 24, 1986, modifying the said Order in that deficiency
wages and ECOLAs should be computed only from May 23, 1983 to May 23, 1986. On October 24, 1986, the petitioner filed a
motion for reconsideration which was denied by the Secretary of Labor in his Order dated May 13,1987, for lack of merit.

RULING: The answer is in the affirmative the Regional Directors has a jurisdiction in this labor standard case. This is Labor
Standard case, and is governed by Article 128 (b) of the Labor Code, as amended by E.O. No. 111. Under the present rules, a
Regional Director exercises both visitorial and enforcement power over labor standards cases, and is therefore empowered to
adjudicate money claims, provided there still exists an employer-employee relationship, and the findings of the regional office
is not contested by the employer concerned. Even in the absence of E. O. No. 111, Regional Directors already had
enforcement powers over money claims, effective under P.D. No. 850, issued on December 16, 1975, which transferred labor
standards cases from the arbitration system to the enforcement system. The Regional Director correctly applied the award
with respect to those employees who signed the complaint, as well as those who did not sign the complaint, but were still
connected with the hospital at the time the complaint was filed. The justification for the award to this group of employees who
were not signatories to the complaint is that the visitorial and enforcement powers given to the Secretary of Labor labor is
relevant to, and exercisable over establishments, not over individual members/employees, because what is sought to be
achieved by its exercise is the observance of, and/ or compliance by such firm/establishment with the labor standards
regulations. However, there is no legal justification for the award in favor of those employees who were no longer connected
with the hospital at the time the complaint was filed. Article 129 of the Labor Code in aid of the enforcement power of the
Regional Director is not applicable where the employee seeking to be paid is separated from service. His claim is purely
money claim that has to be subject of arbitration proceedings and therefore within the original and exclusive jurisdiction of the
Labor Arbiter.

OPINION: I agree with the ruling of the Supreme Court, if we are to strip off jurisdiction on labor standard case from Regional
Directors, who will be tasked to adjudicate issues arising from an employer – employee relationship. The granting of the award
was proper as well because they have the enforcement power over money claims. However, the Regional Director may have
exceeded his enforcement power when he granted awards even to those who were no longer in service.

Arias, PM. M
BOY SCOUTS OF PHILIPPINES v. JULIANA V. ARAOS

FACTS: The petitioner, Boy Scouts of the Philippines, a public corporation created under Commonwealth Act 111, is a civic
and benevolent institution engaged in the promotion and development of character, patriotism, courage, self-reliance, and
kindred virtues in the boys of the country. Section 4 of the Act of creation states its objectives as "solely of a benevolent
character and not for pecuniary profit". Respondent Juliana V. Araos worked with the petitioner as scout executive, holding
such position and rank from 1948 up to her dismissal from the service on June 1, 1954. Respondent, during her incumbency,
organized the BSP Employees Welfare Association, a sort of labor organization or union of employees working in the Boy
Scouts of the Philippines. She became president thereof. On January 29, 1954, respondent filed... charges with the National
Bureau of Investigation against Exequiel Villacorta, Chief Scout Executive, for alleged "anomalous actuations of the said
person in the performance of his duties in the said office”. On February 1, 1954, respondent addressed a letter... to the
President of the Boy Scouts of the Philippines, Jorge B. Vargas, bringing to his attention the charges she had filed against
Villacorta with the NBI. She also sent and distributed copies of her charges to each and every member of the Executive Board
of the Boy Scouts of... the Philippines, to the Presidential Complaint and Action Committee, Malacañang, and to the President
of the Philippines, to scouters all over the Philippines, and to all the delegates to the 15th Annual Meeting, National Council,
Boy Scouts of the Philippines. It is said that... the NBI found Villacorta guilty of the charges filed by Araos.

ISSUES: Does a charitable institution or one organized not for profit but for more elevated purposes, charitable, humanitarian,
etc., like the Boy Scouts of the Philippines, is included in the definition of "employer" contained in Republic Act 875, and do the
employees of said institution fall under the definition of "employee" also contained in the same Republic Act?

LEGAL BASIS: Republic Act No. 875, Sec 2 (c), Sec 2 (d)

CASE HISTORY: H. B. Reyes, Chairman of the Personnel Committee of the BSP, on May 18, 1954, addressed a letter to
respondent. Respondent answered the letter, practically admitting the activities and acts imputed to her said to be inimical to
the interests of the BSP, but trying to justify the same. On May 26, 1954, the Personnel Committee of the BSP, composed of
H. B. Reyes, Gabriel A. Daza, Enrique A. Lolarga, Sergio Bayan, F. E. V. Sison, Eugenio Padua, and Teodoro K. Molo, the
latter reserving his vote, filed a report with the National Executive Board of the BSP. After discussing the merits of the case,
the Committee came "to the unanimous conclusion that Mrs. Juliana V. Araos is guilty as charged find that her present
conduct, judged in the light of her past record, is such that her continuation in the service of the scouting movement... in the
Philippines is highly prejudicial to its interest and therefore, recommends that she be dismissed from the service effective
immediately." Presumably acting upon, said report and recommendation, BSP President Vargas, on June 1, 1954, sent a
letter to respondent dismissing her from the service of the BSP. On August 3, 1954, respondent filed charges against the BSP
in the Court of Industrial Relations for unfair labor practice, alleging that her dismissal was in violation of Section 4, Subsection
(a), paragraphs 4 and 5 of Republic Act No. 875, claiming that she had been... dismissed due to her union activities, in filing
charges against the Chief Scout Executive. On September 28 1954, acting prosecutor Ilagan of the CIR filed a formal
complaint in the case. On October 4, 1954, the BSP filed a motion to dismiss the case among other grounds that the CIR had
no jurisdiction over the case for the reason that the BSP was a civic, charitable, humanitarian and patriotic enterprise, not
created for profit and consequently, there could be no labor dispute over which the CIR may exercise jurisdiction. By order of
October 14, 1954, the CIR deferred action on the motion to dismiss, until trial, so that all questions of law and fact may be
determined in a single proceeding and decided in a single decision. After hearing, Judge Jose S. Bautista, Acting Presiding
Judge of the CIR, rendered decision on October 10, 1955.

RULING: During the discussion of this case, it was claimed that our Industrial Peace Act is partly modelled after the National
labor Relations Act, known as the Wagner Act; that said Wagner Act contains Similar definitions of "employer" and
"employee"; and that in a number of cases decided by the Federal courts, including the United States Supreme Court,
interpreting and applying said Wagner Act, it has been consistently and uniformly held that non-profit organizations and
charitable institutions fall within the scope of the term employer within the meaning of the Wagner Act, and on that
consequently, if we are to follow said judicial authorities, we must perforce hold that a non-profit organization like the Boy
Scouts of the Philippines comes within the scope of the definition of employer under our Industrial Peace Act, and so any
unfair labor practice committed by the management of said institution would come within the jurisdiction of the Court of
Industrial Relations. By comparison, it will be observed that the Wagner's Act's definition of "employer" exempts or excludes
the United States or any State or political subdivision thereof, or any person subject to the Railway Labor Act. As a matter of
fact, the Labor Management Relations Act of 1947, known as the Taft-Hartley Act, amending the Wagner Act, introduced
additional exemptions from the term "employer", such as Government corporations, Federal banks, and particularly
corporations operating hospitals, and from the term "employee" additional exemptions, such as individuals employed as
independent contractors and supervisors. On the other hand, our Industrial Peace Act's definition of "employer" contains no
such exemptions. On the basis of the foregoing considerations, there is every reason to believe that our labor legislation from
Commonwealth Act No. 103, creating the Court of Industrial Relations, down through the Eight Hour Labor Law, to the
Industrial Peace Act, was intended by the Legislature to apply only to industrial employment and to govern the relations
between employers engaged in industry and occupations for purposes of profit and gain, and their industrial employees, but
not to organizations and entities which are organized, operated, and maintained not for the profit or gain, but for elevated and
lofty purposes, such as, charity, social service, the encouragement and promotion of character, patriotism and kindred virtues
in the youth of the nation, etc. In conclusion, we find and hold that Republic Act No. 875, particularly, that portion thereof
regarding labor disputes and unfair labor practice, does not apply to the Boy Scouts of the Philippines, and consequently, the
Court of Industrial Relations had no jurisdiction to entertain and decide the action or petition filed by respondent Araos.

Arias, PM. M
NATIONAL FEDERATION OF SUGAR WORKERS (NFSW) vs. ETHELWOLDO R. OVEJERA

FACTS: NFSW struck against private respondent Central Azucarera de la Carlota (CAC) to compel the latter for the payment
of the 13th month pay under PD 851 (13th Month Pay Law) in addition to the Christmas, milling and amelioration bonuses
being enjoyed by CAC workers which amount to 1-½ months’ salary. Labor Arbiter Ovejera declared the strike as illegal and
no pronouncement was made as to the demand on the 13th month pay. This caused petitioner to file an instant petition with
SC.

ISSUES: Under PD 851, is an employer is obliged to give its workers a 13th month salary in addition to Christmas, milling and
amelioration bonuses, the aggregate of which exceeds the 13th month pay?

LEGAL BASIS: PD 851

CASE HISTORY: On November 28, 1981, NFSW struck allegedly to compel the payment of the 13th month pay under PD
851, in addition to the Christmas, milling and amelioration bonuses being enjoyed by CAC workers. To settle the strike, a
compromise agreement was concluded between CAC and NFSW on November 30, 1981. Under paragraph 4 thereof-"The
parties agree to abide by the final decision of the Supreme Court in any case involving the 13th Month Pay Law if it is clearly
held that the employer is liable to pay a 13th month pay separate and distinct from the bonuses already given." As of
November 30, 1981, G.R. No. 51254 (Marcopper Mining Corp. vs. Blas Ople and Amado Inciong, Minister and Deputy
Minister of Labor, respectively, and Marcopper Employees Labor Union, Petition for Certiorari and Prohibition) was still
pending in the Supreme Court. The Petition had been dismissed on June 11, 1981 on the vote of seven Justices.[1] A motion
for reconsideration thereafter filed was denied in a resolution dated December 15, 1981, with only five Justices voting for
denial. (3 dissented; 2 reserved their votes; 4 did not take part). As of November 30, 1981, G.R. No. 51254 (Marcopper Mining
Corp. vs. Blas Ople and Amado Inciong, Minister and Deputy Minister of Labor, respectively, and Marcopper Employees Labor
Union, Petition for Certiorari and Prohibition) was still pending in the Supreme Court. The Petition had been dismissed on
June 11, 1981 on the vote of seven Justices.[1] A motion for reconsideration thereafter filed was denied in a resolution dated
December 15, 1981, with only five Justices voting for denial. (3 dissented; 2 reserved their votes; 4 did not take part). On
December 18, 1981 - the decision of June 11, 1981 having become final and executory - entry of judgment was made.

RULING: The intention was to grant some relief — not to all workers — but only to the unfortunate ones not actually paid a
13th month salary or what amounts to it, by whatever name called; but it was not envisioned that a double burden would be
imposed on the employer already paying his employees a 13th month pay or its equivalent — whether out of pure generosity
or on the basis of a binding agreement and, in the latter ease, regardless of the conditional character of the grant, so long as
there is actual payment. Otherwise, what was conceived to be a 13th month salary would in effect become a 14th or possibly
15th month pay.

OPINION: In case of ambiguity in the provision of the labor code, the construction of the provisions shall be in favor of the
employee. However, the labor code also protects the rights of the employer. Under the 13th Month Pay Law, an additional
bonus shall be awarded to workers besides the usual Christmas bonus, but the intention was to grant some relief not to all the
workers but only to the unfortunate ones who are not actually paid a 13th month salary. It does not envision a double burden to
be imposed on the employer that is already paying its employees a 13th Month pay.

Arias, PM. M
MARCOPPER MINING CORPORATION v. NLRC

FACTS: On 23 August 1984, Marcopper Mining Corporation, a corporation duly organized and existing under the laws of the
Philippines, engaged in the business of mineral prospecting, exploration and extraction, and private respondent NAMAWU-
MIF, a labor federation duly organized and... registered with the Department of Labor and Employment (DOLE), to which the
Marcopper Employees Union (the exclusive bargaining agent of all rank-and-file workers of petitioner) is affiliated, entered into
a Collective Bargaining Agreement (CBA) effective from 1 May 1984 until 30 April 1987. Prior to the expiration of the
aforestated Agreement, on 25 July 1986, petitioner and private respondent executed a Memorandum of Agreement (MOA)
wherein the terms of the CBA, specifically on matters of wage increase and facilities allowance, were modified. In compliance
with the amended CBA, petitioner implemented the initial 5% wage increase due on 1 May 1986. On 1 June 1987, Executive
Order (E.O.) No. 178 was promulgated mandating the integration of the cost of living allowance under Wage Orders Nos. 1, 2,
3, 5 and 6 into the basic wage of workers, its effectivity retroactive to 1 May 1987.[5] Consequently,... effective on 1 May 1987,
the basic wage rate of petitioner's laborers categorized as non-agricultural workers was increased by P9.00 per day. Petitioner
implemented the second five percent (5%) wage increase due on 1 May 1987 and thereafter added the integrated COLA.
Private respondent, however, assailed the manner in which the second wage increase was effected. It argued that the COLA
should first be integrated into the basic wage before the 5% wage increase is computed. It is petitioner's contention that the
basic wage referred to in the CBA pertains to the "unintegrated" basic wage. Petitioner maintains that the rules on
interpretation of contracts, particularly Art. 1371 of the New Civil Code which states that: Art. 1371. In order to judge the
intention of the contracting parties, their contemporaneous and subsequent acts shall be principally considered should govern.
Siding with the petitioner, the Solicitor General opines that for the purpose of complying with the obligations imposed by the
CBA, the integrated COLA should not be considered due to the exclusivity of the benefits under the said CBA and E.O. No.
178. Private respondent counters by asserting that the purpose, nature and essence of CBA negotiation is to obtain wage
increases and benefits over and above what the law provides and that the principle of non-diminution of benefits should
prevail.

ISSUES: What should be the basis for the computation of the CBA increase, the basic wage without the COLA or the so-
called "integrated" basic wage which, by mandate of E.O. No. 178, includes the COLA?

LEGAL BASIS: Art. 1700 of the Civil Code

CASE HISTORY: On 15 December 1988, the union filed a complaint for underpayment of wages before the Regional
Arbitration Branch IV, Quezon City. On 24 July 1989, the Labor Arbiter promulgated a decision in favor of the union. Petitioner
appealed the Labor Arbiter's decision and on 18 November 1991 the NLRC rendered its decision sustaining the Labor
Arbiter's ruling.

RULING: We rule for the respondents. The principle that the CBA is the law between the contracting parties stands strong and
true. However, the present controversy involves not merely an interpretation of CBA provisions. More importantly, it requires a
determination of the effect of an executive order on the terms and the conditions of the CBA. It is unnecessary to delve too
much on the intention of the parties as to what they allegedly meant by the term "basic wage" at the time the CBA and MOA
were executed because there is no question that as of 1 May 1987, as mandated by E.O. No. 178, the basic wage of workers,
or the statutory minimum wage, was increased with the integration of the COLA. As of said date, then, the term "basic wage"
includes the COLA. This is what the law ordains and to which the collective bargaining agreement of the parties must
conform. Petitioner's arguments eventually lose steam in the light of the fact that compliance with the law is mandatory and
beyond contractual stipulation by and between the parties; consequently, whether or not petitioner intended the basic wage to
include the COLA becomes immaterial. There is evidently nothing to construe and interpret because the law is clear and
unambiguous. Unfortunately for petitioner, said law, by some uncanny coincidence, retroactively took effect on the same date
the CBA increase became effective. Therefore, there cannot be any doubt that the computation of the CBA increase on the
basis of the "integrated" wage does not constitute a violation of the CBA. What E.O. No. 178 did was exactly to integrate the
COLA under Wage Orders Nos. 1, 2, 3, 5 and 6 into the basic pay so as to increase the statutory daily minimum wage.
Integration of monetary benefits into the basic pay of workers is not a new method of increasing the minimum wage. The
purpose of E.O. No. 178 is to improve the lot of the workers covered by the said statute. We are bound to ensure its fruition.
WHEREFORE, premises considered, the petition is hereby DISMISSED.

OPINION: The executive order and the CBA does not contravene each other, it does not need to be construed against each
other because the intentions of the law are not of different nature but to supplement the intention of the provisions. There was
no ambiguity as to the CBA and the Executive order.

Arias, PM. M