G.R. No.

79182 September 11, 1991 The grounds for the dismissal of Mercado are allegedly serious
acts of dishonesty committed as follows:
PNOC-ENERGY DEVELOPMENT CORPORATION, petitioner,
vs. 1. On ApriI 12, 1985, Danilo Mercado was ordered to
NATIONAL LABOR RELATIONS COMMISSION (Third purchase 1,400 pieces of nipa shingles from Mrs.
Division) and DANILO MERCADO, respondents. Leonardo Nodado of Banilad, Dumaguete City, for the
total purchase price of Pl,680.00. Against company
Bacorro & Associates for petitioner. policy, regulations and specific orders, Danilo Mercado
withdrew the nipa shingles from the supplier but paid the
Alberto L. Dalmacion for private respondent. amount of P1,000.00 only. Danilo Mercado appropriated
the balance of P680.00 for his personal use;

2. In the same transaction stated above, the supplier

agreed to give the company a discount of P70.00 which
PARAS, J.: Danilo Mercado did not report to the company;

This is a petition for certiorari to set aside the Resolution * dated 3. On March 28, 1985, Danilo Mercado was instructed to
July 3, 1987 of respondent National Labor Relations contract the services of Fred R. Melon of Dumaguete
Commission (NLRC for brevity) which affirmed the decision City, for the fabrication of rubber stamps, for the total
dated April 30, 1986 of Labor Arbiter Vito J. Minoria of the amount of P28.66. Danilo Mercado paid the amount of
NLRC, Regional Arbitration Branch No. VII at Cebu City in Case P20.00 to Fred R. Melon and appropriated for his
No. RAB-VII-0556-85 entitled "Danilo Mercado, Complainant, personal use the balance of P8.66.
vs. Philippine National Oil Company-Energy Development
Corporation, Respondent", ordering the reinstatement of In addition, private respondent, Danilo Mercado violated
complainant Danilo Mercado and the award of various monetary company rules and regulations in the following instances:
claims.
1. On June 5, 1985, Danilo Mercado was absent from
The factual background of this case is as follows: work without leave, without proper turn-over of his work,
causing disruption and delay of company work activities;
Private respondent Danilo Mercado was first employed by
herein petitioner Philippine National Oil Company-Energy 2. On June 15, 1985, Danilo Mercado went on vacation
Development Corporation (PNOC-EDC for brevity) on August leave without prior leave, against company policy, rules
13, 1979. He held various positions ranging from clerk, general and regulations. (Petitioner's Memorandum, Rollo, p.
clerk to shipping clerk during his employment at its Cebu office 195).
until his transfer to its establishment at Palimpinon, Dumaguete,
Oriental Negros on September 5, 1984. On June 30, 1985, On September 23, 1985, private respondent Mercado filed a
private respondent Mercado was dismissed. His last salary was complaint for illegal dismissal, retirement benefits, separation
P1,585.00 a month basic pay plus P800.00 living allowance pay, unpaid wages, etc. against petitioner PNOC-EDC before
(Labor Arbiter's Decision, Annex "E" of Petition, Rollo, p. 52).
the NLRC Regional Arbitration Branch No. VII docketed as Case SO ORDERED.
No. RAB-VII-0556-85. (Labor Arbiter's Decision, Rollo, p. 56)

After private respondent Mercado filed his position paper on The appeal to the NLRC was dismissed for lack of merit on July
December 16, 1985 (Annex "B" of the Petition, Rollo, pp. 28-40), 3, 1987 and the assailed decision was affirmed.
petitioner PNOC-EDC filed its Position Paper/Motion to Dismiss
on January 15, 1986, praying for the dismissal of the case on Hence, this petition.
the ground that the Labor Arbiter and/or the NLRC had no
jurisdiction over the case (Annex "C" of the Petition, Rollo, pp. The issues raised by petitioner in this instant petition are:
41-45), which was assailed by private respondent Mercado in
his Opposition to the Position Paper/Motion to Dismiss dated 1. Whether or not matters of employment affecting
March 12, 1986 (Annex "D" of the Petition, Rollo, pp. 46-50). the PNOC-EDC, a government-owned and controlled
corporation, are within the jurisdiction of the Labor
The Labor Arbiter ruled in favor of private respondent Mercado. Arbiter and the NLRC.
The dispositive onion of said decision reads as follows:
2. Assuming the affirmative, whether or not the Labor
WHEREFORE, in view of the foregoing, respondents are Arbiter and the NLRC are justified in ordering the
hereby ordered: reinstatement of private respondent, payment of his
savings, and proportionate 13th month pay and payment
1) To reinstate complainant to his former position with full of damages as well as attorney's fee.
back wages from the date of his dismissal up to the time
of his actual reinstatement without loss of seniority rights Petitioner PNOC-EDC alleges that it is a corporation wholly
and other privileges; owned and controlled by the government; that the Energy
Development Corporation is a subsidiary of the Philippine
2) To pay complainant the amount of P10,000.00 National Oil Company which is a government entity created
representing his personal share of his savings account under Presidential Decree No. 334, as amended; that being a
with the respondents; government-owned and controlled corporation, it is governed by
the Civil Service Law as provided for in Section 1, Article XII-B
3) To pay complainants the amount of P30,000.00 moral of the 1973 Constitution, Section 56 of Presidential Decree No.
damages; P20,000.00 exemplary damages and 807 (Civil Service Decree) and Article 277 of Presidential
P5,000.00 attorney's fees; Decree No. 442, as amended (Labor Code).

4) To pay complainant the amount of P792.50 as his The 1973 Constitution provides:
proportionate 13th month pay for 1985.
The Civil Service embraces every branch, agency,
Respondents are hereby further ordered to deposit the subdivision and instrumentality of the government
aforementioned amounts with this Office within ten days including government-owned or controlled corporations.
from receipt of a copy of this decision for further
disposition.
Petitioner PNOC-EDC argued that since Labor Arbiter Minoria governs because it is the Constitution in place at the time of the
rendered the decision at the time when the 1973 Constitution decision (NASECO v. NLRC, G.R. No. 69870, 168 SCRA 122
was in force, said decision is null and void because under the [1988]).
1973 Constitution, government-owned and controlled
corporations were governed by the Civil Service Law. Even In the case at bar, the decision of the NLRC was promulgated
assuming that PNOC-EDC has no original or special charter and on July 3, 1987. Accordingly, this case falls squarely under the
Section 2(i), Article IX-B of the 1987 Constitution provides that: rulings of the aforementioned cases.

The Civil Service embraces all branches, subdivision, As regards the second issue, the record shows that PNOC-
instrumentalities and agencies of the Government, EDC's accusations of dishonesty and violations of company
including government-owned or controlled corporations rules are not supported by evidence. Nonetheless, while
with original charters. acknowledging the rule that administrative bodies are not
governed by the strict rules of evidence, petitioner PNOC-EDC
such circumstances cannot give validity to the decision of the alleges that the labor arbiter's propensity to decide the case
Labor Arbiter (Ibid., pp. 192-193). through the position papers submitted by the parties is violative
of due process thereby rendering the decision null and void
This issue has already been laid to rest in the case of PNOC- (Ibid., p. 196).
EDC vs. Leogardo, 175 SCRA 26 (July 5, 1989), involving the
same petitioner and the same issue, where this Court ruled that On the other hand, private respondent contends that as can be
the doctrine that employees of government-owned and/or con seen from petitioner's Motion for Reconsideration and/or Appeal
controlled corporations, whether created by special law or dated July 28, 1986 (Annex "F" of the Petition, Rollo, pp. 57-
formed as subsidiaries under the General Corporation law are 64), the latter never questioned the findings of facts of the Labor
governed by the Civil Service Law and not by the Labor Code, Arbiter but simply limited its objection to the lack of legal basis in
has been supplanted by the present Constitution. "Thus, under view of its stand that the NLRC had no jurisdiction over the case
the present state of the law, the test in determining whether a (Private Respondent's Memorandum, Rollo, p. 104).
government-owned or controlled corporation is subject to the
Civil Service Law are the manner of its creation, such that Petitioner PNOC-EDC filed its Position Paper/Motion to Dismiss
government corporations created by special charter are subject dated January 15, 1986 (Annex "C" of the Petition Rollo, pp. 41-
to its provisions while those incorporated under the General 45) before the Regional Arbitration Branch No. VII of Cebu City
Corporation Law are not within its coverage." and its Motion for Reconsideration and/or Appeal dated July 28,
1986 (Annex "F" of the Petition, Rollo, pp. 57-64) before the
Specifically, the PNOC-EDC having been incorporated under NLRC of Cebu City. Indisputably, the requirements of due
the General Corporation Law was held to be a government process are satisfied when the parties are given an opportunity
owned or controlled corporation whose employees are subject to submit position papers. What the fundamental law abhors is
to the provisions of the Labor Code (Ibid.). not the absence of previous notice but rather the absolute lack
of opportunity to ventilate a party's side. There is no denial of
The fact that the case arose at the time when the 1973 due process where the party submitted its position paper and
Constitution was still in effect, does not deprive the NLRC of flied its motion for reconsideration (Odin Security Agency vs. De
jurisdiction on the premise that it is the 1987 Constitution that la Serna, 182 SCRA 472 [February 21, 1990]). Petitioner's
subsequent Motion for Reconsideration and/or Appeal has the AFFIRMED with the modification that the moral damages are
effect of curing whatever irregularity might have been committed reduced to Ten Thousand (P10,000.00) Pesos, and the
in the proceedings below (T.H. Valderama and Sons, Inc. vs. exemplary damages reduced to Five Thousand (P5,000.00)
Drilon, 181 SCRA 308 [January 22, 1990]). Pesos.

Furthermore, it has been consistently held that findings of SO ORDERED.

administrative agencies which have acquired expertise because
their jurisdiction is confined to specific matters are accorded not Melencio-Herrera (Chairperson), Padilla and Regalado, JJ.,
only respect but even finality (Asian Construction and concur.
Development Corporation vs. NLRC, 187 SCRA 784 [July 27, Sarmiento, J., is on leave.
1990]; Lopez Sugar Corporation vs. Federation of Free
Workers, 189 SCRA 179 [August 30, 1990]). Judicial review by
this Court does not go so far as to evaluate the sufficiency of the
evidence but is limited to issues of jurisdiction or grave abuse of Footnotes
discretion (Filipinas Manufacturers Bank vs. NLRC, 182 SCRA
848 [February 28, 1990]). A careful study of the records shows * Penned by Commissioner Mirasol Viniega-Corleto.
no substantive reason to depart from these established
principles.

While it is true that loss of trust or breach of confidence is a valid

ground for dismissing an employee, such loss or breach of trust
must have some basis (Gubac v. NLRC, 187 SCRA 412 [July G.R. No. 85750 September 28, 1990
13, 1990]). As found by the Labor Arbiter, the accusations of
petitioner PNOC-EDC against private respondent Mercado have INTERNATIONAL CATHOLIC IMMIGRATION
no basis. Mrs. Leonardo Nodado, from whom the nipa shingles COMMISSION, petitioner
were purchased, sufficiently explained in her affidavit (Rollo, p. vs
36) that the total purchase price of P1,680.00 was paid by HON. PURA CALLEJA IN HER CAPACITY AS DIRECTOR OF
respondent Mercado as agreed upon. The alleged discount THE BUREAU OF LABOR RELATIONS AND TRADE UNIONS
given by Mrs. Nodado is not supported by evidence as well as OF THE PHILIPPINES AND ALLIED SERVICES (TUPAS)
the alleged appropriation of P8.66 from the cost of fabrication of WFTU respondents.
rubber stamps. The Labor Arbiter, likewise, found no evidence
to support the alleged violation of company rules. On the G.R. No. 89331 September 28, 1990
contrary, he found respondent Mercado's explanation in his
affidavit (Rollo, pp. 38-40) as to the alleged violations to be KAPISANAN NG MANGGAGAWA AT TAC SA IRRI-
satisfactory. Moreover, these findings were never contradicted ORGANIZED LABOR ASSOCIATION IN LINE INDUSTRIES
by petitioner petitioner PNOC-EDC. AND AGRICULTURE, petitioner,
vs
PREMISES CONSIDERED, the petition is DENIED and the SECRETARY OF LABOR AND EMPLOYMENT AND
resolution of respondent NLRC dated July 3, 1987 is
INTERNATIONAL RICE RESEARCH INSTITUTE, resettlement to other countries was to be established in Bataan
INC., respondents. (Annex "A", Rollo, pp. 22-32).

Araullo, Zambrano, Gruba, Chua Law Firm for petitioner in ICMC was one of those accredited by the Philippine
85750. Government to operate the refugee processing center in
Morong, Bataan. It was incorporated in New York, USA, at the
Dominguez, Armamento, Cabana & Associates for petitioner in request of the Holy See, as a non-profit agency involved in
G.R. No. 89331. international humanitarian and voluntary work. It is duly
registered with the United Nations Economic and Social Council
Jimenez & Associates for IRRI. (ECOSOC) and enjoys Consultative Status, Category II. As an
international organization rendering voluntary and humanitarian
Alfredo L. Bentulan for private respondent in 85750. services in the Philippines, its activities are parallel to those of
the International Committee for Migration (ICM) and the
International Committee of the Red Cross (ICRC) [DOLE
Records of BLR Case No. A-2-62-87, ICMC v. Calleja, Vol. 1].
MELENCIO-HERRERA, J.:
On 14 July 1986, Trade Unions of the Philippines and Allied
Consolidated on 11 December 1989, these two cases involve Services (TUPAS) filed with the then Ministry of Labor and
the validity of the claim of immunity by the International Catholic Employment a Petition for Certification Election among the rank
Migration Commission (ICMC) and the International Rice and file members employed by ICMC The latter opposed the
Research Institute, Inc. (IRRI) from the application of Philippine petition on the ground that it is an international organization
labor laws. registered with the United Nations and, hence, enjoys diplomatic
immunity.
I
On 5 February 1987, Med-Arbiter Anastacio L. Bactin sustained
Facts and Issues ICMC and dismissed the petition for lack of jurisdiction.

A. G.R. No. 85750 — the International Catholic Migration On appeal by TUPAS, Director Pura Calleja of the Bureau of
Commission (ICMC) Case. Labor Relations (BLR), reversed the Med-Arbiter's Decision and
ordered the immediate conduct of a certification election. At that
As an aftermath of the Vietnam War, the plight of Vietnamese time, ICMC's request for recognition as a specialized agency
refugees fleeing from South Vietnam's communist rule was still pending with the Department of Foreign Affairs
confronted the international community. (DEFORAF).

In response to this crisis, on 23 February 1981, an Agreement Subsequently, however, on 15 July 1988, the Philippine
was forged between the Philippine Government and the United Government, through the DEFORAF, granted ICMC the status
Nations High Commissioner for Refugees whereby an operating of a specialized agency with corresponding diplomatic privileges
center for processing Indo-Chinese refugees for eventual and immunities, as evidenced by a Memorandum of Agreement
between the Government and ICMC (Annex "E", Petition, Rollo, ICMC sustains the affirmative of the proposition citing (1) its
pp. 41-43), infra. Memorandum of Agreement with the Philippine Government
giving it the status of a specialized agency, (infra); (2) the
ICMC then sought the immediate dismissal of the TUPAS Convention on the Privileges and Immunities of Specialized
Petition for Certification Election invoking the immunity Agencies, adopted by the UN General Assembly on 21
expressly granted but the same was denied by respondent BLR November 1947 and concurred in by the Philippine Senate
Director who, again, ordered the immediate conduct of a pre- through Resolution No. 91 on 17 May 1949 (the Philippine
election conference. ICMC's two Motions for Reconsideration Instrument of Ratification was signed by the President on 30
were denied despite an opinion rendered by DEFORAF on 17 August 1949 and deposited with the UN on 20 March
October 1988 that said BLR Order violated ICMC's diplomatic 1950) infra; and (3) Article II, Section 2 of the 1987 Constitution,
immunity. which declares that the Philippines adopts the generally
accepted principles of international law as part of the law of the
Thus, on 24 November 1988, ICMC filed the present Petition for land.
Certiorari with Preliminary Injunction assailing the BLR Order.
Intervenor DEFORAF upholds ICMC'S claim of diplomatic
On 28 November 1988, the Court issued a Temporary immunity and seeks an affirmance of the DEFORAF
Restraining Order enjoining the holding of the certification determination that the BLR Order for a certification election
election. among the ICMC employees is violative of the diplomatic
immunity of said organization.
On 10 January 1989, the DEFORAF, through its Legal Adviser,
retired Justice Jorge C. Coquia of the Court of Appeals, filed a Respondent BLR Director, on the other hand, with whom the
Motion for Intervention alleging that, as the highest executive Solicitor General agrees, cites State policy and Philippine labor
department with the competence and authority to act on matters laws to justify its assailed Order, particularly, Article II, Section
involving diplomatic immunity and privileges, and tasked with 18 and Article III, Section 8 of the 1987 Constitution, infra; and
the conduct of Philippine diplomatic and consular relations with Articles 243 and 246 of the Labor Code, as amended, ibid. In
foreign governments and UN organizations, it has a legal addition, she contends that a certification election is not a
interest in the outcome of this case. litigation but a mere investigation of a non-adversary, fact-
finding character. It is not a suit against ICMC its property, funds
Over the opposition of the Solicitor General, the Court allowed or assets, but is the sole concern of the workers themselves.
DEFORAF intervention.
B. G.R. No. 89331 — (The International Rice Research Institute
On 12 July 1989, the Second Division gave due course to the [IRRI] Case).
ICMC Petition and required the submittal of memoranda by the
parties, which has been complied with. Before a Decision could be rendered in the ICMC Case, the
Third Division, on 11 December 1989, resolved to consolidate
As initially stated, the issue is whether or not the grant of G.R. No. 89331 pending before it with G.R. No. 85750, the
diplomatic privileges and immunites to ICMC extends to lower-numbered case pending with the Second Division, upon
immunity from the application of Philippine labor laws. manifestation by the Solicitor General that both cases involve
similar issues.
The facts disclose that on 9 December 1959, the Philippine On appeal, the BLR Director, who is the public respondent in the
Government and the Ford and Rockefeller Foundations signed a ICMC Case, set aside the Med-Arbiter's Order and authorized
Memorandum of Understanding establishing the International the calling of a certification election among the rank-and-file
Rice Research Institute (IRRI) at Los Baños, Laguna. It was employees of IRRI. Said Director relied on Article 243 of the
intended to be an autonomous, philanthropic, tax-free, non- Labor Code, as amended, infra and Article XIII, Section 3 of the
profit, non-stock organization designed to carry out the principal 1987 Constitution, 1 and held that "the immunities and privileges
objective of conducting "basic research on the rice plant, on all granted to IRRI do not include exemption from coverage of our
phases of rice production, management, distribution and Labor Laws." Reconsideration sought by IRRI was denied.
utilization with a view to attaining nutritive and economic
advantage or benefit for the people of Asia and other major rice- On appeal, the Secretary of Labor, in a Resolution of 5 July
growing areas through improvement in quality and quantity of 1989, set aside the BLR Director's Order, dismissed the Petition
rice." for Certification Election, and held that the grant of specialized
agency status by the Philippine Government to the IRRI bars
Initially, IRRI was organized and registered with the Securities DOLE from assuming and exercising jurisdiction over IRRI Said
and Exchange Commission as a private corporation subject to Resolution reads in part as follows:
all laws and regulations. However, by virtue of Pres. Decree No.
1620, promulgated on 19 April 1979, IRRI was granted the Presidential Decree No. 1620 which grants to the
status, prerogatives, privileges and immunities of an IRRI the status, prerogatives, privileges and
international organization. immunities of an international organization is clear
and explicit. It provides in categorical terms that:
The Organized Labor Association in Line Industries and
Agriculture (OLALIA), is a legitimate labor organization with an Art. 3 — The Institute shall enjoy immunity from
existing local union, the Kapisanan ng Manggagawa at TAC sa any penal, civil and administrative proceedings,
IRRI (Kapisanan, for short) in respondent IRRI. except insofar as immunity has been expressly
waived by the Director-General of the Institution or
On 20 April 1987, the Kapisanan filed a Petition for Direct his authorized representative.
Certification Election with Region IV, Regional Office of the
Department of Labor and Employment (DOLE). Verily, unless and until the Institute expressly
waives its immunity, no summons, subpoena,
IRRI opposed the petition invoking Pres. Decree No. 1620 orders, decisions or proceedings ordered by any
conferring upon it the status of an international organization and court or administrative or quasi-judicial agency are
granting it immunity from all civil, criminal and administrative enforceable as against the Institute. In the case at
proceedings under Philippine laws. bar there was no such waiver made by the
Director-General of the Institute. Indeed, the
On 7 July 1987, Med-Arbiter Leonardo M. Garcia, upheld the Institute, at the very first opportunity already
opposition on the basis of Pres. Decree No. 1620 and dismissed vehemently questioned the jurisdiction of this
the Petition for Direct Certification. Department by filing an ex-parte motion to dismiss
the case.
Hence, the present Petition for Certiorari filed by Kapisanan pursuant to Sections 7, 8, 9 and 10 of Rule V 2 of the Omnibus
alleging grave abuse of discretion by respondent Secretary of Rules Implementing the Labor Code, the Order of the BLR
Labor in upholding IRRI's diplomatic immunity. Director had become final and unappeable and that, therefore,
the Secretary of Labor had no more jurisdiction over the said
The Third Division, to which the case was originally assigned, appeal.
required the respondents to comment on the petition. In a
Manifestation filed on 4 August 1990, the Secretary of Labor On the other hand, in entertaining the appeal, the Secretary of
declared that it was "not adopting as his own" the decision of the Labor relied on Section 25 of Rep. Act. No. 6715, which took
BLR Director in the ICMC Case as well as the Comment of the effect on 21 March 1989, providing for the direct filing of appeal
Solicitor General sustaining said Director. The last pleading was from the Med-Arbiter to the Office of the Secretary of Labor and
filed by IRRI on 14 August 1990. Employment instead of to the Director of the Bureau of Labor
Relations in cases involving certification election orders.
Instead of a Comment, the Solicitor General filed a
Manifestation and Motion praying that he be excused from filing III
a comment "it appearing that in the earlier case of International
Catholic Migration Commission v. Hon. Pura Calleja, G.R. No. Findings in Both Cases.
85750. the Office of the Solicitor General had sustained the
stand of Director Calleja on the very same issue now before it, There can be no question that diplomatic immunity has, in fact,
which position has been superseded by respondent Secretary of been granted ICMC and IRRI.
Labor in G.R. No. 89331," the present case. The Court acceded
to the Solicitor General's prayer. Article II of the Memorandum of Agreement between the
Philippine Government and ICMC provides that ICMC shall have
The Court is now asked to rule upon whether or not the a status "similar to that of a specialized agency." Article III,
Secretary of Labor committed grave abuse of discretion in Sections 4 and 5 of the Convention on the Privileges and
dismissing the Petition for Certification Election filed by Immunities of Specialized Agencies, adopted by the UN General
Kapisanan. Assembly on 21 November 1947 and concurred in by the
Philippine Senate through Resolution No. 19 on 17 May 1949,
Kapisanan contends that Article 3 of Pres. Decree No. 1620 explicitly provides:
granting IRRI the status, privileges, prerogatives and immunities
of an international organization, invoked by the Secretary of Art. III, Section 4. The specialized agencies, their
Labor, is unconstitutional in so far as it deprives the Filipino property and assets, wherever located and by
workers of their fundamental and constitutional right to form whomsoever held, shall enjoy immunity from every
trade unions for the purpose of collective bargaining as form of legal process except insofar as in any
enshrined in the 1987 Constitution. particular case they have expressly waived their
immunity. It is, however, understood that no waiver
A procedural issue is also raised. Kapisanan faults respondent of immunity shall extend to any measure of
Secretary of Labor for entertaining IRRI'S appeal from the Order execution.
of the Director of the Bureau of Labor Relations directing the
holding of a certification election. Kapisanan contends that
 Sec. 5. — The premises of the specialized It is a recognized principle of international law and
agencies shall be inviolable. The property and under our system of separation of powers that
assets of the specialized agencies, wherever diplomatic immunity is essentially a political
located and by whomsoever held shall be immune question and courts should refuse to look beyond
from search, requisition, confiscation, a determination by the executive branch of the
expropriation and any other form of interference, government, and where the plea of diplomatic
whether by executive, administrative, judicial or immunity is recognized and affirmed by the
legislative action. (Emphasis supplied). executive branch of the government as in the case
at bar, it is then the duty of the courts to accept the
IRRI is similarly situated, Pres. Decree No. 1620, Article 3, is claim of immunity upon appropriate suggestion by
explicit in its grant of immunity, thus: the principal law officer of the government . . . or
other officer acting under his direction. Hence, in
Art. 3. Immunity from Legal Process. — The adherence to the settled principle that courts may
Institute shall enjoy immunity from any penal, civil not so exercise their jurisdiction . . . as to
and administrative proceedings, except insofar as embarrass the executive arm of the government in
that immunity has been expressly waived by the conducting foreign relations, it is accepted doctrine
Director-General of the Institute or his authorized that in such cases the judicial department of (this)
representatives. government follows the action of the political
branch and will not embarrass the latter by
Thus it is that the DEFORAF, through its Legal Adviser, assuming an antagonistic jurisdiction. 3
sustained ICMC'S invocation of immunity when in a
Memorandum, dated 17 October 1988, it expressed the view A brief look into the nature of international organizations and
that "the Order of the Director of the Bureau of Labor Relations specialized agencies is in order. The term "international
dated 21 September 1988 for the conduct of Certification organization" is generally used to describe an organization set
Election within ICMC violates the diplomatic immunity of the up by agreement between two or more states. 4Under
organization." Similarly, in respect of IRRI, the DEFORAF contemporary international law, such organizations are
speaking through The Acting Secretary of Foreign Affairs, Jose endowed with some degree of international legal
D. Ingles, in a letter, dated 17 June 1987, to the Secretary of personality 5 such that they are capable of exercising specific
Labor, maintained that "IRRI enjoys immunity from the rights, duties and powers. 6 They are organized mainly as a
jurisdiction of DOLE in this particular instance." means for conducting general international business in which
the member states have an interest. 7 The United Nations, for
The foregoing opinions constitute a categorical recognition by instance, is an international organization dedicated to the
the Executive Branch of the Government that ICMC and IRRI propagation of world peace.
enjoy immunities accorded to international organizations, which
determination has been held to be a political question "Specialized agencies" are international organizations having
conclusive upon the Courts in order not to embarrass a political functions in particular fields. The term appears in Articles
department of Government. 57 8 and 63 9 of the Charter of the United Nations:
 The Charter, while it invests the United Nations There are basically three propositions underlying the grant of
with the general task of promoting progress and international immunities to international organizations. These
international cooperation in economic, social, principles, contained in the ILO Memorandum are stated thus: 1)
health, cultural, educational and related matters, international institutions should have a status which protects
contemplates that these tasks will be mainly them against control or interference by any one government in
fulfilled not by organs of the United Nations itself the performance of functions for the effective discharge of which
but by autonomous international organizations they are responsible to democratically constituted international
established by inter-governmental agreements bodies in which all the nations concerned are represented; 2) no
outside the United Nations. There are now many country should derive any national financial advantage by
such international agencies having functions in levying fiscal charges on common international funds; and 3) the
many different fields, e.g. in posts, international organization should, as a collectivity of States
telecommunications, railways, canals, rivers, sea members, be accorded the facilities for the conduct of its official
transport, civil aviation, meteorology, atomic business customarily extended to each other by its individual
energy, finance, trade, education and culture, member States. 12 The theory behind all three propositions is
health and refugees. Some are virtually world-wide said to be essentially institutional in character. "It is not
in their membership, some are regional or concerned with the status, dignity or privileges of individuals, but
otherwise limited in their membership. The Charter with the elements of functional independence necessary to free
provides that those agencies which have "wide international institutions from national control and to enable
international responsibilities" are to be brought into them to discharge their responsibilities impartially on behalf of
relationship with the United Nations by all their members. 13 The raison d'etre for these immunities is
agreements entered into between them and the the assurance of unimpeded performance of their functions by
Economic and Social Council, are then to be the agencies concerned.
known as "specialized agencies." 10
The grant of immunity from local jurisdiction to ICMC and IRRI is
The rapid growth of international organizations under clearly necessitated by their international character and
contemporary international law has paved the way for the respective purposes. The objective is to avoid the danger of
development of the concept of international immunities. partiality and interference by the host country in their internal
workings. The exercise of jurisdiction by the Department of
It is now usual for the constitutions of international Labor in these instances would defeat the very purpose of
organizations to contain provisions conferring immunity, which is to shield the affairs of international
certain immunities on the organizations organizations, in accordance with international practice, from
themselves, representatives of their member political pressure or control by the host country to the prejudice
states and persons acting on behalf of the of member States of the organization, and to ensure the
organizations. A series of conventions, unhampered performance of their functions.
agreements and protocols defining the immunities
of various international organizations in relation to ICMC's and IRRI's immunity from local jurisdiction by no means
their members generally are now widely in force; . deprives labor of its basic rights, which are guaranteed by
. . 11 Article II, Section 18, 14 Article III, Section 8, 15 and Article XIII,
Section 3 (supra), of the 1987 Constitution; and implemented by
Articles 243 and 246 of the Labor Code, 16 relied on by the BLR and Management (CIEM) wherein "both management and
Director and by Kapisanan. employees were and still are represented for purposes of
maintaining mutual and beneficial cooperation between IRRI
For, ICMC employees are not without recourse whenever there and its employees." The existence of this Union factually and
are disputes to be settled. Section 31 of the Convention on the tellingly belies the argument that Pres. Decree No. 1620, which
Privileges and Immunities of the Specialized Agencies of the grants to IRRI the status, privileges and immunities of an
United Nations 17 provides that "each specialized agency shall international organization, deprives its employees of the right to
make provision for appropriate modes of settlement of: (a) self-organization.
disputes arising out of contracts or other disputes of private
character to which the specialized agency is a party." Moreover, The immunity granted being "from every form of legal process
pursuant to Article IV of the Memorandum of Agreement except in so far as in any particular case they have expressly
between ICMC the the Philippine Government, whenever there waived their immunity," it is inaccurate to state that a
is any abuse of privilege by ICMC, the Government is free to certification election is beyond the scope of that immunity for the
withdraw the privileges and immunities accorded. Thus: reason that it is not a suit against ICMC. A certification election
cannot be viewed as an independent or isolated process. It
Art. IV. Cooperation with Government Authorities. could tugger off a series of events in the collective bargaining
— 1. The Commission shall cooperate at all times process together with related incidents and/or concerted
with the appropriate authorities of the Government activities, which could inevitably involve ICMC in the "legal
to ensure the observance of Philippine laws, rules process," which includes "any penal, civil and administrative
and regulations, facilitate the proper administration proceedings." The eventuality of Court litigation is neither
of justice and prevent the occurrences of any remote and from which international organizations are precisely
abuse of the privileges and immunities granted its shielded to safeguard them from the disruption of their functions.
officials and alien employees in Article III of this Clauses on jurisdictional immunity are said to be standard
Agreement to the Commission. provisions in the constitutions of international Organizations.
"The immunity covers the organization concerned, its property
2. In the event that the Government determines and its assets. It is equally applicable to proceedings in
that there has been an abuse of the privileges and personam and proceedings in rem." 18
immunities granted under this Agreement,
consultations shall be held between the We take note of a Manifestation, dated 28 September 1989, in
Government and the Commission to determine the ICMC Case (p. 161, Rollo), wherein TUPAS calls attention
whether any such abuse has occurred and, if so, to the case entitled "International Catholic Migration
the Government shall withdraw the privileges and Commission v. NLRC, et als., (G.R. No. 72222, 30 January
immunities granted the Commission and its 1989, 169 SCRA 606), and claims that, having taken
officials. cognizance of that dispute (on the issue of payment of salary for
the unexpired portion of a six-month probationary employment),
Neither are the employees of IRRI without remedy in case of the Court is now estopped from passing upon the question of
dispute with management as, in fact, there had been organized DOLE jurisdiction petition over ICMC.
a forum for better management-employee relationship as
evidenced by the formation of the Council of IRRI Employees
We find no merit to said submission. Not only did the facts of certification election is SET ASIDE, and the Temporary
said controversy occur between 1983-1985, or before the grant Restraining Order earlier issued is made PERMANENT.
to ICMC on 15 July 1988 of the status of a specialized agency
with corresponding immunities, but also because ICMC in that In G.R. No. 89331 (the IRRI Case), the Petition is Dismissed, no
case did not invoke its immunity and, therefore, may be deemed grave abuse of discretion having been committed by the
to have waived it, assuming that during that period (1983-1985) Secretary of Labor and Employment in dismissing the Petition
it was tacitly recognized as enjoying such immunity. for Certification Election.

Anent the procedural issue raised in the IRRI Case, suffice it to No pronouncement as to costs.
state that the Decision of the BLR Director, dated 15 February
1989, had not become final because of a Motion for SO ORDERED.
Reconsideration filed by IRRI Said Motion was acted upon only
on 30 March 1989 when Rep. Act No. 6715, which provides for Padilla, Sarmiento and Regalado, JJ., concur.
direct appeals from the Orders of the Med-Arbiter to the
Secretary of Labor in certification election cases either from the Paras, J., is on leave.
order or the results of the election itself, was already in effect,
specifically since 21 March 1989. Hence, no grave abuse of
discretion may be imputed to respondent Secretary of Labor in
his assumption of appellate jurisdiction, contrary to Kapisanan's
allegations. The pertinent portion of that law provides:

Art. 259. — Any party to an election may appeal

the order or results of the election as determined
by the Med-Arbiter directly to the Secretary of
Labor and Employment on the ground that the
rules and regulations or parts thereof established
by the Secretary of Labor and Employment for the
conduct of the election have been violated. Such
appeal shall be decided within 15 calendar days
(Emphasis supplied).

En passant, the Court is gratified to note that the heretofore

antagonistic positions assumed by two departments of the
executive branch of government have been rectified and the
resultant embarrassment to the Philippine Government in the
eyes of the international community now, hopefully, effaced.

WHEREFORE, in G.R. No. 85750 (the ICMC Case), the Petition

is GRANTED, the Order of the Bureau of Labor Relations for