G.R. No. L-43890. July 16, 1984
OCEANIC BIC DIVISION (FFW), PABLITO ORDANOSO, PETITIONERS, VS. FLERIDA RUTH P. ROMERO AS VOLUNTARY ARBITRATOR, OCEANIC BIC MANUFACTURING, AND GLICERIO LEDESMA, RESPONDENTS.
GUTIERREZ, JR., J.:
interpret Section 11 of Presidential Decree No. 21, (“Creating A
National Labor Relations Commission And For Other Purposes”) in relation
to Sections 1, 3, and 10 of the Implementing Instructions No. 1 dated
November 9, 1972 issued by the then ad hoc National Labor Relations
Commission. The provisions refer to the clearance requirements for the
dismissal, lay-off, or termination from employment of an employee by his
employer.
The facts of the case are not in dispute. Petitioner Pablito Ordanoso
entered into a contract of temporary employment for the period of six
(6) months beginning from October 3, 1973 to April 3, 1974 with the
respondent corporation. Incorporated in the contract is a stipulation
that “it is understood that the company has the right to separate you
from its employ at anytime within the above period should your services
not be satisfactory.” When the contract expired on April 3, 1974,
Ordanoso entered into another 6-month contract of employment, this time
as probationary worker with the respondent company, from April 4, 1974
to October 4, 1974. A note to the effect that “this extension of your
employment contract is being given with formal advice that you improve
on your performance” was added to the stipulation which formed part of
the first contract.
The respondent company through “group leaders” conducts periodic
performance ratings on the workers. The results are considered for the
workers’ conversion from probationary to regular permanent employment.
The criteria for performance ratings were cooperation, attendance,
quality of work, skill, initiative and interest in work, leadership,
obedience and intelligence.
In the case of Ordanoso, Mr. Glicerio Ledesma, production manager,
explained that the aforestated note attached to his contract of
employment shows that Ordanoso’s performance rating during his first six
months employment in the company was “just passing.” Subsequent
performance ratings of Ordanoso by his group leaders submitted to Mr.
Ledesma showed that his work performance was not satisfactory. Hence, in
the memorandum prepared by Ledesma on workers’ performance ratings
which he sent to K. Bachmann, Jr., general manager, Ordanoso’s name was
included among those with below average performance. On the following
day, Ledesma sent a memorandum to Ordanoso, telling him to improve his
performance as he only attained a 2.75 rating.
On September 10, 1974, a memorandum was issued by Ledesma to some
workers, among them Ordanoso, warning them of their low average
performance with the advice to perform on the average performance level.
On October 3, 1974, Ledesma terminated Ordanoso’s services in the company because of his below average performance rating.
Thereafter, the following events transpired:
“On October 4, 1974, complainant union (FFW Oceanic BIC
Manufacturing Chapter) through its union president, Alfonso Leonido sent
a letter dated October 3, 1974, to the Management of the respondent
company wherein the union asked the company for a grievance conference
in order to discuss the dismissal of complainant Pablito Ordanoso
effective October 4, 1974. Apparently, the parties failed to reach an
amicable settlement in the grievance conference. On October 25, 1974,
the complainants (the local union and Pablito Ordanoso) filed a
complaint with the NLRC, Dept. of Labor, docketed as NLRC Case No.
Lr-6538. In the said complaint, the complainants charged the respondents
company and Ledesma for:“1. Unfair Labor Practice;
“2. Unjust and illegal dismissal of complainant Pablito Ordanoso;
“3. Violation of the CBA
“4. Violation of P.D. No. 21 and its Implementing Rules.
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IV
“The aforementioned complaint (bearing another case no. Lr-431-74)
was finally disposed of by the conciliator of the Dept. of Labor,
Regional Office No. IV, on January 16, 1975, by referring back the case
to the parties for exhaustion of the grievance procedure in accordance
with the CBA. x x x.
V
On January 20, 1975, the Federation of Free Workers, the mother
federation of complainant union, sent a letter to the management of
respondent company wherein the Federation suggested three (3) names to
select from, as voluntary arbitrator. The parties failed to mutually
select any of the three named in said letter but later selected Atty.
Flerida Ruth P. Romero of the U.P. Law Center, Diliman, Quezon City. x x
x” (Petition, Rollo, pp. 5-6).
After due hearing, the voluntary arbitrator issued her decision dated
April 30, 1976 upholding the company’s actions. The dispositive portion
of the decision reads:
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“Ipinapasya ng Tagahatol na ang pagtitiwalag kay Ordanoso ay hindi unfair labor practice, hindi labag sa collective bargaining contract at sa P.D. No. 21 o sa alituntunin nito, sapagka’t hindi nauukol sa kanya ang pangangailangan ng written clearance bago magtanggal ng isang manggagawa.
“Isinagawa sa siyudad ng Quezon nitong ika-30 ng Abril, 1976.”
The respondents raise a jurisdictional issue. They contend that this
Court does not have the power to review the voluntary arbitrator’s award
on the ground that: 1) Presidential Decree No. 442, (Labor Code)
precludes this Court from reviewing voluntary arbitration awards save on
special circumstances which are not present in the instant case; and 2)
the nature of voluntary arbitration awards should be considered final.
Petitioner Ordanoso was dismissed on October 4, 1974. He filed the
complaint for illegal dismissal with the Department of Labor on October
25, 1974. Article 294 of the Labor Code, as amended provides: “All
actions or claims accruing prior to the effectivity of this Code shall
be determined in accordance with the laws in force at the time of their
accrual.” The law applicable in the instant case is Presidential Decree No. 21.
In fact, the voluntary arbitrator herself admits this fact in her
decision when she said: “Noong itiniwalag si Ordanoso noong ika-4 ng
Oktubre, 1974, ang batas na umiiral ukol sa pagtatanggal ng mga tauhan
ng mga bahay-kalakal ay ang Presidential Decree No. 21 at mga
alituntunin nito x x x.”
Anent the proposition that voluntary arbitration awards should be considered final, the respondents cite American precedents:
The nature of an arbitrator’s award is that it is equivalent to the
first law of the parties. It is so because the disputants have willingly
and contractually consented that the will of the arbitrator shall be
substituted in place of theirs. For, after all, the parties have
mutually reposed their trust and confidence in the honesty, integrity,
competence and capability of the arbitrator.Such being the case, the role of the reviewer of a voluntary
arbitration award is very limited. It merely acts a guardian to see to
it that no serious miscarriage of justice may be perpetuated or that
public order or public policy might be subverted.The refusal of courts to review the merits of an arbitration award
is the proper approach to an arbitration under collective bargaining
agreements. The federal policy of settling labor disputes by arbitration
would be undermined if courts had the final say on the merits of the
awards. (Margetta v. Pam Pam Corporation, 354 F. Supp. 158, 1973), p.
160; cited in Fernandez, Labor Arbitration [1975], p. 355.
xxx xxx xxx
The refusal of courts to review the merits of an arbitration award
is the proper approach to an arbitration under collective bargaining
agreements. The federal policy of settling labor disputes by arbitration
would be undermined if courts had the final say on the merits of the
awards. (Union Emp. Div., Etc. v. Columbia Typographical Union No. 101,
353 F. Supp. 1348); (1973), p. 1349; cited in Fernandez, Ibid., pp.
355-356;We hold that the District Court misconstrued its mandate. The duty
of the courts is not to determine whether a prima facie case on the
merits has been put forth by the party seeking arbitration. It is not
the province of the court to look into the facts of the case. (Chambers
v. Beaunit Corp., 404 F. 2d 128, Sanitary Corp. v. Local 7,
International Brotherhood of Operative Potters, 358 F. 2d 455, 458 (6th
Cir. 1966). The arbitrator is not to be viewed as a special master who
will be called in after a prima facie case on the merits has been made
out. (Local No. 6, M. & P. Int. U. of Am. v. Boyd G. Heminger, Inc.,
483 F. 2d 129); (1973), p. 131.
xxx xxx xxx
It is particularly understood that the arbitral process in
collective bargaining presupposes that the parties wanted the informed
judgment of an arbitrator, precisely for the reason that judges cannot
provide it. Therefore, a court asked to enforce a promise to arbitrate
should ordinarily refrain from involving itself in the interpretation of
the substantive provisions of the contract. (Morris v.
Wenner-Continental, Inc., 466 F. 2d (1185); (1972), pp. 1190-1191,
Ibid.).We agree with the petitioner that the decisions of voluntary
arbitrators must be given the highest respect and as a general rule must
be accorded a certain measure of finality. This is especially true
where the arbitrator chosen by the parties enjoys the first rate
credentials of Professor Flerida Ruth Pineda Romero, Director of the U.
P. Law Center and an academician of unquestioned expertise in the field
of Labor Law. It is not correct, however, that this respect precludes
the exercise of judicial review over their decisions. Article 262 of the
Labor Code making voluntary arbitration awards final, inappealable, and
executory except where the money claims exceed P100,000.00 or 40% of
paid-up capital of the employer or where there is abuse of discretion or
gross incompetence refers to appeals to the National Labor Relations
Commission and not to judicial review.
Inspite of statutory provisions making “final” the decisions of certain
administrative agencies, we have taken cognizance of petitions
questioning these decisions where want of jurisdiction, grave abuse of
discretion, violation of due process, denial of substantial justice, or
erroneous interpretation of the law were brought to our attention. There
is no provision for appeal in the statute creating the Sandiganbayan
but this has not precluded us from examining decisions of this special
court brought to us in proper petitions. Thus, we have ruled:
“Yanglay raised a jurisdictional question which was not brought up
by respondent public officials. He contends that this Court has no
jurisdiction to review the decisions of the NLRC and the Secretary of
Labor ‘under the principle of separation of powers’ and that judicial
review is not provided for in Presidential Decree No. 21.“That contention is a flagrant error. ‘it is generally understood
that as to administrative agencies exercising quasi-judicial or
legislative power there is an underlying power in the courts to
scrutinize the acts of such agencies on questions of law and
jurisdiction even though no right of review is given by statute’ (73
C.J.S. 506, note 56).“The purpose of judicial review is to keep the administrative
agency within its jurisdiction and protect substantial rights of parties
affected by its decisions’ (73 C. J. S. 507, Sec. 165). It is part of
the system of checks and balances which restricts the separation of
powers and forestalls arbitrary and unjust adjudications.“Judicial review is proper in case of lack of jurisdiction, grave
abuse of discretion, error of law, fraud or collusion (Timbancaya vs.
Vicente, 62 O.G. 9424; Macatangay vs. Secretary of Public Works and
Communications, 63 O.G. 11236; Ortua vs. Singson Encarnacion, 59 Phil.
440).“‘The courts may declare an action or resolution of an
administrative authority to be illegal (1) because it violates or fails
to comply with same mandatory provision of the law or (2) because it is
corrupt, arbitrary or capricious’ (Borromeo vs. City of Manila and
Rodriguez Lanuza, 62 Phil. 512, 516; Villegas vs. Auditor General,
L-21352, November 29, 1966, 18 SCRA 877, 891). [San Miguel Corporation
v. Secretary of Labor, 64 SCRA 60].
xxx xxx xxx
“It is now settled rule that under the present Labor Code,
(Presidential Decree No. 442, as amended [1974] if lack of power or
arbitrary or improvident exercise of authority be shown, thus giving
rise to a jurisdictional question, this Court may, in appropriate certiorari
proceedings, pass upon the validity of the decisions reached by
officials or administrative agencies in labor controversies. So it was
assumed in Maglasang v. Ople. (L-38813, April 29, 1975, 63 SCRA 508). It
was explicitly announced in San Miguel Corporation v. Secretary of
Labor, (L-39195, May 16, 1975, 64 SCRA 56) the opinion being penned by
Justice Aquino. Accordingly, cases of that character continue to find a
place in our docket. (Cf. United Employees Union of Gelmart Industries
v. Noriel, L-40810, Oct. 3, 1975, 67 SCRA 267) The present suit is of
that category. [Kapisanan ng mga Manggagawa sa La Suerte-Foitaf vs.
Noriel, 77 SCRA 415-416]
A voluntary arbitrator by the nature of her functions acts in a
quasi-judicial capacity. There is no reason why her decisions involving
interpretation of law should be beyond this Court’s review.
Administrative officials are presumed to act in accordance with law and
yet we do not hesitate to pass upon their work where a question of law
is involved or where a showing of abuse of authority or discretion in
their official acts is properly raised in petitions for certiorari.
On the merits of the petition, the petitioner questions the voluntary
arbitrator’s decision that under Presidential Decree No. 21, petitioner
Ordanoso was properly dismissed by the respondent company without a
written clearance from the Secretary of Labor, to wit:
xxx xxx xxx
“Nang itiniwalag si Ordanoso noong ika-4 ng Oktubre, 1974, ang
batas a umiiral ukol sa pagtatanggal ng mga tauhan sa mga bahay-kalakal
ay ang Presidential Decree No. 21 at mga alituntunin nito. Ayon
sa ikalabing-isang talata ng nasabing batas, walang pangasiwaan na
maaring magtanggal ng kanilang mga regular na empleado na
nakapanungkulan na nang isang taon nang walang written clearance ng Kalihim ng Paggawa.“Ano naman ang pakahulugan ng batas sa taguring regular na
empleado? Ayon sa Implementing Instructions No. 1 na nagpapaliwanag sa
nasabing ikalabing-isang talata ng P.D. No. 21, ang regular na
empleado ay yaong manggagawa na nakapaglingkod na nang hindi kukulangin
sa labingdalawang buwan sa loob ng nakaraang magkasunod na dalawang taon
bago natanggal ang nasabing manggagawa, kahi’t anupaman ang taguri ng
pangasiwaan sa kaniyang pagkakahirang. Alalaong baga, upang mataguriang
regular na empleado, kailangan ay, una, ang manggagawa ay kawani na ng
bahay-kalakal nang hindi kukulangin sa dalawang taon nang nakararaan, at
ikalawa, siya ay nakapaglingkod na nang hindi kukulangin sa kabuuang
labindalawang buwan na hindi kailangang magkakasunod sa loob noong
nasabing dalawang taon bago naganap ang pagtititwalag. Kapag mapatunayan
ng isang nanggagawa na ang dalawang pangangailangang iyan ay nasa
kanya, siya ay masasabing regular na empleado at hindi siya kagyat na
matatanggal nang walang written clearance ng Kagawarang ng
Paggawa. Kung ang manggagawang itniwalag ay kulang sa isang
pangangailangang iyan, siya’y hindi regular na empleado at hindi na
kailangan ang written clearance upang siya ay matanggal. Mapapansin na ang manggagawang higit na matagal ang panunungkulan ang siyang tinatangkilik ng batas.“Matapos ang paliwanag na iyan, mamamalas na si Ordanoso ay hindi
regular na empleado, sapagkat isang taon pa lamang siyang naglilingkod
sa bahay-kalakal ng Oceanic Commercial, Inc. Kung gayon, hindi
kailangan ang written clearance upang siya ay matanggal ng pangasiwaan.
Hindi nalalabag sa batas ang gayong pagtitiwalag sa kanya nang walang written clearance.”
The petitioner takes exception to the voluntary arbitrator’s
conclusion’s on the interpretation to be given Section 3 of Implementing
Instruction No. 1 –
xxx xxx xxx
“Pagukulan naman nating ng pansin ang isa pang matwid ng
manananggol ng nag-uusig. Ayon raw sa Seksiyon 1(d) ng Alituntunin,
kailangan rin ng ‘clearance’ lahat ng nga pagtanggal ng manggagawa na
hindi nasasaklaw ng Seksiyon 3 nito. Ang Seksiyon 3 naman ay nililista
ang mga pangyayari na kailangan lamang magharap ng ulat ang kompanya at
hindi ‘clearance’. Isa na rito ay ang pagtiwalag ng empleado na kulang
ng isang taon ang panunungkulan. Kung gayon raw, mapaghuhulo na kapag
isang taon o higit nanang isang taon ang paninilbihan, hindi nga ulat
lamang ang kailangan kung hindi ‘clearance’ na.“Ipinalalabas na si Ordanoso ay nasasakop sa kalagayang iyan – na
ang paglilingkod niya ay hindi kulang ng isang taon kaya’t hindi ulat
lamang ang kailangan kung hindi ‘clearance’ na sapagka’t isang taon o
mahigit na siyang nagIilingkod.“Hindi naman tumpak ang pakahulugan ng kabilang panig sa batas na
pinag-uukulan ng pansin. Malinaw at tiyak ang pangungusap ng Seksyon 1
ng Alituntunin na ‘clearance’ ang kailangan kapag ang ititiwalag ay regular na empleyado na nanilbihan na ng isa man lamang taon. Kung
paghambingin ang hulo lamang (implication) ng manananggol ng nag-uusig
at ang tiyak na salita ng batas na ‘regular na empleado,’ ang lalong
matimbang ay ang tiyak at tahas na pananalita. Hindi kailangan ng
‘clearance’ sa pagtanggal ng kahi’t sino na lamang na empleado na
nakapaglingkod nang higit sa isang taon. Kailangang siya ay ‘regular na
empleado’, lalu’t lalo na kapag ang empleado ay pangsamantala lamang o
dili kaya’y ‘probationary.’ Siya ay dagling sinusubok pa lamang kaya’t
kung sa panahon ng pagsusubok ay mapatunayang hindi sila mahusay, maaari
silang tanggalin kaagad nang walang ‘clearance’ kapag humantong na sa
katapusan ng napagkasunduang panahon. Ganyan na nga mismo ang ginawa ng
bahay-kalakal na Oceanic Bic Manufaturing nang humantong na ang
katapusan ng pangalawang anim na buwan at hindi sila nasiyahan sa
pagiilingkod ni Ordanoso.” (Italics supplied)
In ascertaining the mandatory nature and the ambit of the clearance
requirements before termination of employees may be effected, we start
with the statutory provision found in Section 11 of Presidential Decree
No. 21 which provides:
“No employers may shut down his establishment or dismiss or
terminate the services of regular employees with at least one year of
service without the written clearance of the Secretary of Labor.”
The pertinent provisions of the Implementing Instructions No. 1 are as follows:
“Section 1. When Clearance Required. – Every employer
shall secure a written prior clearance from the Secretary of Labor for
any of the following cases irrespective of whether the employer complies
with the requirements of existing laws on the service of notice
terminating the services of an employee and the payment of severance
pay:“(a) All dismissals, with or without just cause, of regular employees with at least one (1) year of service;
xxx xxx xxx
xxx xxx xxx
“(d) Any termination of employment, suspension or lay-off not otherwise covered by Section 3 of these instructions.
xxx xxx xxx
“Section 3. When Reports Required. – Every employer shall
submit a report in the form and manner prescribed by this issuance on
the following termination of employment, suspension, lay-off or
shutdown which may be effected by the employer without the prior clearance of the Secretary of Labor:
xxx xxx xxx
“(b) All dismissals, suspensions, or lay-offs of employees with less than one (1) year of service;” (Italics supplied).
Under the definition in Section 1 of the Implementing Instructions, a
regular employee is one with an aggregate service of at least twelve
months for the last two consecutive years prior to the proposed
termination. Ordanoso was not a regular employee but a probationary
employee when his services were terminated. It appears clear from the
law that he was not covered by the requirement of a written prior
clearance from the Secretary of Labor. Neither was he covered by Section
3 of the implementing rules which requires a report, not a prior
clearance, whenever an employee with less than one year of service is
dismissed, suspended, or laid-off. Ordanoso had slightly more than one
year of service.
There is a hiatus or gap in the clearance and reporting requirements
provided by the administrative regulations. As a general rule, such a
gap should be resolved in favor of the dismissed worker. For an employee
who has served one year and one day not to have the minimal protection
of at least a report on the cause of his dismissal while those who have
served less than a year are entitled to such a report also appears
incongruous. In this particular case, however, the poor job performance
of Ordanoso is documented. The hearings before the respondent arbitrator
establish that the respondent employer did not act arbitrarily or even
wrongly in declaring Ordanoso’s work performance as below the required
ratings. During his first six months as a temporary employee when he
should have exerted extra efforts to prove his capability for permanent
employment, he was at the bottom or barely passing ratings of the
required performance. He had to be placed on another six months’ trial
period as a probationary worker. During this second period, he clearly
failed to make the grade. Ordanoso was given sufficient warnings each
time that his job performance was unsatisfactory. There is no issue of
due process violations.
The petitioners concentrated on the failure of the employer to get a
prior clearance from the Secretary of Labor and did not discuss the
significance of the reporting requirements at all. Under the facts of
this case and the applicable law, such a prior clearance was not
necessary. It would also be most unfair to the employer to compel it to
keep a below average worker simply because ambiguity in administrative
requirements for clearances or reports depending on the length of
service and employment status of a worker results in its not being
instructed clearly to either report a dismissal already effected or seek
prior clearance before the dismissal.
Considering the foregoing, we affirm the findings of the respondent voluntary arbitrator.
WHEREFORE, the instant petition is DISMISSED for lack of merit. The Kapasiyahan of the voluntary arbitrator is AFFIRMED.
SO ORDERED.
Relova and De la Fuente, JJ., concur.
Teehankee, J., (Chairman), files a separate concurrence.
Plana, J., in the result.
Melencio-Herrera, J., on official leave.
CONCURRING OPINION
TEEHANKEE, J.:
I concur on the ground that petitioner Pablito Ordanoso was not a
regular employee but a probationary employee and there was manifestly
valid cause for his dismissal or separation as such. He had been given
sufficient warnings about his unsatisfactory job performance and
therefore his dismissal at the end of the second six months trial period
was for just cause in accordance with the terms of his probationary
employment.
On the question, however, of whether his dismissal falls under section 3
of the Implementing Instructions quoted in the main opinion, whereby
the employer is required to submit a report of his dismissal which may
be effected without prior clearance, it is my view that the gap or
hiatus in the clearance and reporting requirements should be resolved in
his favor and those similarly circumstanced. In other words, the fact
that he and other such probationary workers may have slightly more than
one year of service would not mean that the employer would not have to
file the corresponding report of their dismissal. As is aptly stated in
the main opinion, “for an employee who has served one year and one day
not to have the minimal protection of at least a report on the cause of
his dismissal while those who have served less than a year are entitled
to such a report (also) appears incongruous.” The employer’s failure to
file such report would not, however, make his dismissal for just cause
illegal in view of the vagueness or ambiguity of the Administrative
Instructions. But the employer who fails to file such report may be
subjected to such administrative penalties or sanctions as may be duly
provided.