Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 73140 May 29, 1987
RIZAL EMPIRE INSURANCE GROUP AND/OR SERGIO CORPUS,
petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, TEODORICO L. RUIZ, as
Labor Arbiter and ROGELIO R. CORIA, respondents.
Ambrosio Padilla, Mempin & Reyes Law Offices for petitioners.
Guillermo H. Pulia for private respondent.

PARAS, J.:
This is a petition for review on certiorari of the March 14, 1985 Decision of
Labor Arbiter Teodorico L. Ruiz which held that herein private respondent
Rogelio R. Coria was illegally dismissed; and of the Resolution of the National
Labor Relations Commission which dismissed petitioner's appeal on the
ground that the same was filed out of time.
In August, 1977, herein private respondent Rogelio R. Coria was hired by
herein petitioner Rizal Empire Insurance Group as a casual employee with a
salary of P10.00 a day. On January 1, 1978, he was made a regular employee,
having been appointed as clerk-typist, with a monthly salary of P300.00. Being
a permanent employee, he was furnished a copy of petitioner company's
"General Information, Office Behavior and Other Rules and Regulations." In
the same year, without change in his position-designation, he was transferred
to the Claims Department and his salary was increased to P450,00 a month.
In 1980, he was transferred to the Underwriting Department and his salary was
increased to P580.00 a month plus cost of living allowance, until he was
transferred to the Fire Department as filing clerk. In July, 1983, he was made
an inspector of the Fire Division with a monthly salary of P685.00 plus
allowances and other benefits.
On October 15, 1983, private respondent Rogelio R. Coria was dismissed from
work, allegedly, on the grounds of tardiness and unexcused absences.
Accordingly, he filed a complaint with the Ministry of Labor and Employment
(MOLE), and in a Decision dated March 14, 1985 (Record, pp. 80-87), Labor
Arbiter Teodorico L. Ruiz reinstated him to his position with back wages.
Petitioner filed an appeal with the National labor Relations Commission (NLRC)
but, in a Resolution dated November 15, 1985 (Ibid, pp. 31-32), the appeal was
dismissed on the ground that the same had been filed out of time. Hence, the
instant petition (Ibid, pp. 2-22).
In compliance with the resolution of the Second Division of this Court dated
April 30, 1986 (Ibid., p. 94), private respondent filed his Comment on May 23,
1986 (Ibid., pp. 97-101) and public respondent on July 2, 1986 (Ibid., pp. 120-
124).
On June 6, 1986, petitioners filed their Reply to private respondent's Comment
(Ibid, pp. 102-105) and on July 25, 1986, their Reply to public respondent's
Comment (Ibid., pp. 126-131).
In a Resolution dated August 18, 1986, the Second Division of this Court
resolved to give due course to the petition and to require the parties to submit
their respective memoranda (Ibid., P. 132).
In compliance with the above mentioned Resolution, petitioners filed the,.r
memorandum on November 10, 1986; while private respondent filed his
Memorandum on October 17, 1986 (Ibid, pp. 139-144), and public respondent
on November 16, 1986 (Ibid., pp. 160-166).
Before going however, into the merits of the case, an important point to
consider is whether or not it is still within the jurisdiction of this Court to review.
Rule VIII of the Revised Rules of the National Labor Relations Commission on
appeal, provides:
SECTION 1. (a) Appeal. — Decision or orders of a labor Arbiter shall be final
and executory unless appealed to the Commission by any or both of the parties
within ten (10) calendar days from receipt of notice thereof.
xxx xxx xxx
SECTION 6. No extension of period. — No motion or request for extension of
the period within which to perfect an appeal shall be entertained.
The record shows that the employer (petitioner herein) received a copy of the
decision of the Labor Arbiter on April 1, 1985. It filed a Motion for Extension of
Time to File Memorandum of Appeal on April 11, 1985 and filed the
Memorandum of Appeal on April 22, 1985. Pursuant to the "no extension
policy" of the National Labor Relations Commission, aforesaid motion for
extension of time was denied in its resolution dated November 15, 1985 and
the appeal was dismissed for having been filed out of time (Rollo, pp. 31-32).
Petitioners claim, among other things, that respondent Commission committed
a grave abuse of discretion amounting to lack of jurisdiction in arbitrarily
dismissing petitioners' appeal on a technicality (Rollo, p. 9). It invokes the Rules
of Court provision on liberal construction of the Rules in the interest of
substantial justice.
It will be noted however, that the foregoing provision refers to the Rules of
Court. On the other hand, the Revised Rules of the National Labor Relations
Commission are clear and explicit and leave no room for interpretation.
Moreover, it is an elementary rule in administrative law that administrative
regulations and policies enacted by administrative bodies to interpret the law
which they are entrusted to enforce, have the force of law, and are entitled to
great respect (Espanol v. Philippine Veterans Administration, 137 SCRA 314
[1985]).
Under the above-quoted provisions of the Revised NLRC Rules, the decision
appealed from in this case has become final and executory and can no longer
be subject to appeal.
Even on the merits, the ruling of the Labor Arbiter appears to be correct; the
consistent promotions in rank and salary of the private respondent indicate he
must have been a highly efficient worker, who should be retained despite
occasional lapses in punctuality and attendance. Perfection cannot after all be
demanded.
WHEREFORE, this petition is DISMISSED.
SO ORDERED.

THIRD DIVISION
G.R. No. 113592. January 15, 1998
INDUSTRIAL AND TRANSPORT EQUIPMENT, INC.
and/or ANTONIO JARINA, Petitioners, v. NATIONAL
LABOR RELATIONS COMMISSION and LEOPOLDO
MEDRANO, Respondents.
DECISION
ROMERO, J.:
Petitioner Industrial and Transport Equipment Inc.
(INTECO) seeks to set aside the decision of the National
Labor Relations Commission dated February 23, 1993,
affirming the order of the labor arbiter declaring petitioner
guilty of indirect contempt and ordering it to reinstate
private respondent to his former position with backwages
from July 11, 1991 up to his actual reinstatement, and its
resolution denying petitioners motion for reconsideration.
Respondent Leopoldo Medrano was employed as a
mechanic by INTECO from November 1974 up to his
dismissal in July 1990. On May 31, 1990, he was granted
an indefinite leave of absence, during which period he was
able to secure a temporary job at Porac, Pampanga as a
mechanic. When he reported for work on June 18, 1990, a
supervisor confronted him for having worked in another
firm. Consequently, he was asked to resign. On July 2,
1990, respondent was not allowed to enter the companys
premises allegedly because his services had already been
terminated.
In a complaint for illegal dismissal against INTECO, Labor
Arbiter Felipe T. Garduque II rendered a decision dated
March 27, 1991, the dispositive portion of which reads
thus:
 WHEREFORE, premises considered, respondents
INDUSTRIAL AND TRANSPORT EQUIPMENT
INCORPORATED and/or ANTONIO JARINA are hereby
ordered to reinstate within ten (10) days from receipt
hereof herein complainant Leopoldo C. Medrano to his
former position without backwages, and to pay him his
proportionate 13th month pay for 1990 in the amount of
P1,300.00.
Complainants claim for damages including attorneys fee is
hereby denied for lack of merit. (Underscoring supplied)
The decision became final and executory upon failure of
petitioner to file an appeal within the reglementary period.
Consequently, respondent filed on May 3, 1991, a motion
for the issuance of a writ of execution, which was
accordingly granted.
On August 1, 1991, the proportionate 13th month pay was
fully settled. The aspect of reinstatement, however,
remained unsatisfied in view of the alleged refusal of
petitioner to comply with the said order. Accordingly,
respondent filed on November 11, 1991, a motion to cite
petitioner for indirect contempt and for payment of
backwages.
On April 20, 1992, Labor Arbiter Garduque issued an order
finding petitioner guilty of indirect contempt with a fine of
P100.00, and likewise directed the reinstatement of
respondent with backwages from July 11, 1991, up to his
actual reinstatement. On appeal, said order was affirmed in
toto by the NLRC on February 23, 1993. Hence, this
petition.
The petition must be dismissed.
Section 2, Rule X of the New Rules of Procedure of the
NLRC provides that the Commission or any labor arbiter
may cite any person for indirect contempt upon grounds
and in the manner prescribed under Section 3(b), Rule 71
of the 1997 Rules of Civil Procedure.
Section 3(b), Rule 71 provides:
 Section 3 - Indirect contempt to be punished after charge
and hearing - x x x
a) xxx xxx xxx
b) Disobedience of or resistance to a lawful writ, process,
order, or judgment of a court x x x.
Contempt is defined as a disobedience to the Court by
setting up an opposition to its authority, justice and
dignity. It signifies not only a willful disregard or
disobedience of the courts orders but such conduct as
tends to bring the authority of the court and the
administration of law into disrepute or in some manner to
impede the due administration of justice. There is no
question that disobedience or resistance to a lawful writ,
process, order, judgment or command of a court or
injunction granted by a court or judge constitutes indirect
contempt punishable under Rule 71 of the Rules of
Court.1
cräläwvirtualibräry

Petitioner argues that it could not be held guilty of indirect

contempt as it had faithfully complied with the order when
it reinstated Medrano to his former position on April 15,
1991. Respondent allegedly abandoned his work after
initially reporting on April 15 and 16, 1991.
It must be noted that petitioner received a copy of the
labor arbiters decision only on April 18, 1991. It is,
therefore, clear that Medrano could not have been
reinstated prior to said date as claimed by petitioner. The
Solicitor General, in his comment, explained clearly the
implausibleness of petitioners assertion. Thus:
If Medrano was actually reinstated on April 15 and 16,
1991, it would be absurd for him to simply walk away from
his job unmindful of the consequences of his act and
considering the sacrifices he had made to retrieve his post.
It should be pointed out that as early as May 3, 1991,
private respondent filed a Motion for Execution in respect
of the Labor Arbiters Decision which became final and
executory on April 28, 1991. His act of seeking the
execution of the decision ordering his reinstatement is
 absolutely incompatible with an intention to abandon his
job.2cräläwvirtualibräry

Notably, the March 27, 1991 decision of the labor arbiter,

while ordering the reinstatement of respondent, excluded
the award of backwages. On this point, we rule that the
labor arbiter erred in omitting such award. The law
provides that an illegally dismissed employee is entitled to
reinstatement without loss of seniority rights and other
privileges and to his full backwages, inclusive of
allowances, and to his other benefits or their monetary
equivalent computed from the time his compensation was
withheld from him up to the time of his actual
reinstatement.3 Having become final and executory,
however, we are constrained to uphold this decision, albeit
deficient, for failure of the respondent himself to question
the inadequacy of the remedy due him.
In Asuncion v. NLRC,4 the Court ruled that perfection of an
appeal within the statutory or reglementary period is not
only mandatory but also jurisdictional and failure to do so
renders the questioned decision final and executory as to
deprive the appellate court of jurisdiction to alter the final
judgment, much less to entertain the appeal. In the
recently decided case of Aboitiz Shipping Employees
Association v. Trajano,5 it was pointed out therein that,
except for correction of clerical errors or the making of
nunc pro tunc entries which cause no prejudice to any
party or where the judgment is void, after the judgment
has become final and executory, the same can neither be
amended nor altered even if the purpose is to correct a
perceived conclusion of fact or of law. This is true
regardless of whether the modification is to be made by
the magistrate that rendered the judgment, or by the
appellate magistrate that reviewed the same. Indeed, all
litigation must come to an end however unjust the result of
error may appear. Otherwise, litigation would even be
more intolerable than the wrong or injustice it is designed
to correct. (Underscoring supplied)
WHEREFORE, in view of the foregoing, the instant petition
is DISMISSED and the February 23, 1993 decision of
respondent National Labor Relations Commission is
AFFIRMED with the modification that the award of
backwages be DELETED. Costs against petitioner.
SO ORDERED.
Narvasa, C.J., (Chairman), Melo, and Francisco, JJ.,
concur.
Panganiban, J., no part. Former counsel of a party.

SECOND DIVISION
G.R. No. 176085 February 8, 2012
FEDERICO S. ROBOSA, ROLANDO E. PANDY, NOEL D. ROXAS,
ALEXANDER ANGELES, VERONICA GUTIERREZ, FERNANDO EMBAT,
and NANETTE H. PINTO, Petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION (First Division), CHEMO-
TECHNISCHE MANUFACTURING, INC. and its responsible officials led
by FRANKLIN R. DE LUZURIAGA, and PROCTER & GAMBLE
PHILIPPINES, INC., Respondents.
DECISION
BRION, J.:
We resolve the petition for review on certiorari1 seeking the reversal of the
resolutions of the Court of Appeals (CA) rendered on February 24, 20062 and
December 14, 20063 in CA-G.R. SP No. 80436.
Factual Background
Federico S. Robosa, Rolando E. Pandy, Noel D. Roxas, Alexander Angeles,
Veronica Gutierrez, Fernando Embat and Nanette H. Pinto (petitioners) were
rank-and-file employees of respondent Chemo-Technische Manufacturing,
Inc. (CTMI), the manufacturer and distributor of "Wella" products. They were
officers and members of the CTMI Employees Union-DFA (union).
Respondent Procter and Gamble Philippines, Inc. (P & GPI) acquired all the
interests, franchises and goodwill of CTMI during the pendency of the
dispute.
Sometime in the first semester of 1991, the union filed a petition for
certification election at CTMI. On June 10, 1991, Med-Arbiter Rasidali
Abdullah of the Office of the Department of Labor and Employment in the
National Capital Region (DOLE-NCR) granted the petition. The DOLE-NCR
conducted a consent election on July 5, 1991, but the union failed to garner
the votes required to be certified as the exclusive bargaining agent of the
company.
On July 15, 1991, CTMI, through its President and General Manager Franklin
R. de Luzuriaga, issued a memorandum4 announcing that effective that day:
 (1) all sales territories were demobilized; (2) all vehicles assigned to sales
representatives should be returned to the company and would be sold; (3)
sales representatives would continue to service their customers through
public transportation and would be given transportation allowance; (4)
deliveries of customers’ orders would be undertaken by the warehouses; and
(5) revolving funds for ex-truck selling held by sales representatives should
be surrendered to the cashier (for Metro Manila) or to the supervisor (for
Visayas and Mindanao), and truck stocks should immediately be surrendered
to the warehouse.
On the same day, CTMI issued another memorandum5 informing the
company’s sales representatives and sales drivers of the new system in the
Salon Business Group’s selling operations.
The union asked for the withdrawal and deferment of CTMI’s directives,
branding them as union busting acts constituting unfair labor practice. CTMI
ignored the request. Instead, it issued on July 23, 1991 a notice of termination
of employment to the sales drivers, due to the abolition of the sales driver
positions.6
On August 1, 1991, the union and its affected members filed a complaint for
illegal dismissal and unfair labor practice, with a claim for damages, against
CTMI, De Luzuriaga and other CTMI officers. The union also moved for the
issuance of a writ of preliminary injunction and/or temporary restraining order
(TRO).
The Compulsory Arbitration Proceedings
The labor arbiter handling the case denied the union’s motion for a stay order
on the ground that the issues raised by the petitioners can best be ventilated
during the trial on the merits of the case. This prompted the union to file on
August 16, 1991 with the National Labor Relations Commission (NLRC), a
petition for the issuance of a preliminary mandatory injunction and/or TRO.7
On August 23, 1991, the NLRC issued a TRO.8 It directed CTMI, De
Luzuriaga and other company executives to (1) cease and desist from
dismissing any member of the union and from implementing the July 23, 1991
memorandum terminating the services of the sales drivers, and to
immediately reinstate them if the dismissals have been effected; (2) cease
and desist from implementing the July 15, 1991 memorandum grounding the
sales personnel; and (3) restore the status quo ante prior to the formation of
the union and the conduct of the consent election.
Allegedly, the respondents did not comply with the NLRC’s August 23, 1991
resolution. They instead moved to dissolve the TRO and opposed the union’s
petition for preliminary injunction.
On September 12, 1991, the NLRC upgraded the TRO to a writ of preliminary
injunction.9 The respondents moved for reconsideration. The union opposed
the motion and urgently moved to cite the responsible CTMI officers in
contempt of court.
On August 25, 1993, the NLRC denied the respondents’ motion for
reconsideration and directed Labor Arbiter Cristeta Tamayo to hear the
 motion for contempt. In reaction, the respondents questioned the NLRC
orders before this Court through a petition for certiorari and prohibition with
preliminary injunction. The Court dismissed the petition for being premature. It
also denied the respondents’ motion for reconsideration, as well as a second
motion for reconsideration, with finality. This notwithstanding, the respondents
allegedly refused to obey the NLRC directives. The respondents’ defiance,
according to the petitioners, resulted in the loss of their employment.
Meanwhile, the NLRC heard the contempt charge. On October 31, 2000, it
issued a resolution10 dismissing the charge. It ordered the labor arbiter to
proceed hearing the main case on the merits.
The petitioners moved for, but failed to secure, a reconsideration from the
NLRC on the dismissal of the contempt charge. They then sought relief from
the CA by way of a petition for certiorari under Rule 65.
The CA Decision
The CA saw no need to dwell on the issues raised by the petitioners as the
question it deemed appropriate for resolution is whether the NLRC’s
dismissal of the contempt charge against the respondents may be the proper
subject of an appeal. It opined that the dismissal is not subject to review by
an appellate court. Accordingly, the CA Special Sixth Division dismissed the
petition in its resolution of February 24, 2006.11
The CA considered the prayer of P & GPI to be dropped as party-respondent
moot and academic.
The petitioners sought a reconsideration, but the CA denied the motion in its
resolution of December 14, 2006.12 Hence, the present Rule 45 petition.
The Petition
The petitioners charge the CA with grave abuse of discretion in upholding the
NLRC resolutions, despite the reversible errors the labor tribunal committed
in dismissing the contempt charge against the respondents. They contend
that the respondents were guilty of contempt for their failure (1) to observe
strictly the NLRC status quo order; and (2) to reinstate the dismissed
petitioners and to pay them their lost wages, sales commissions, per diems,
allowances and other employee benefits. They also claim that the NLRC, in
effect, overturned this Court’s affirmation of the TRO and of the preliminary
injunction.
The petitioners assail the CA’s reliance on the Court’s ruling that a contempt
charge partakes of a criminal proceeding where an acquittal is not subject to
appeal. They argue that the facts obtaining in the present case are different
from the facts of the cases where the Court’s ruling was made. They further
argue that by the nature of this case, the Labor Code and its implementing
rules and regulations should apply, but in any event, the appellate court is not
prevented from reviewing the factual basis of the acquittal of the respondents
from the contempt charges.
The petitioners lament that the NLRC, in issuing the challenged resolutions,
had unconstitutionally applied the law. They maintain that not only did the
NLRC unconscionably delay the disposition of the case for more than twelve
 (12) years; it also rendered an unjust, unkind and dubious judgment. They
bewail that "[f]or some strange reason, the respondent NLRC made a queer
[somersault] from its earlier rulings which favor the petitioners."13
The Case for the Respondents
Franklin K. De Luzuriaga
De Luzuriaga filed a Comment14 on May 17, 2007 and a Memorandum on
December 4, 2008,15 praying for a dismissal of the petition.
De Luzuriaga argues that the CA committed no error when it dismissed the
petition for certiorari since the dismissal of the contempt charge against the
respondents amounted to an acquittal where review by an appellate court will
not lie. In any event, he submits, the respondents were charged with indirect
contempt which may be initiated only in the appropriate regional trial court,
pursuant to Section 12, Rule 71 of the Rules of Court. He posits that the
NLRC has no jurisdiction over an indirect contempt charge. He thus argues
that the petitioners improperly brought the contempt charge before the NLRC.
Additionally, De Luzuriaga points out that the petition raises only questions of
facts which, procedurally, is not allowed in a petition for review on certiorari.
Be this as it may, he submits that pursuant to Philippine Long Distance
Telephone Company, Inc. v. Tiamson,16 factual findings of labor officials, who
are deemed to have acquired expertise in matters within their respective
jurisdictions, are generally accorded not only respect but even finality. He
stresses that the CA committed no reversible error in not reviewing the
NLRC’s factual findings.
Further, De Luzuriaga contends that the petitioners’ verification and
certification against forum shopping is defective because it was only Robosa
and Pandy who executed the document. There was no indication that they
were authorized by Roxas, Angeles, Gutierrez, Embat and Pinto to execute
the required verification and certification.
Lastly, De Luzuriaga maintains that the petitioners are guilty of forum
shopping as the reliefs prayed for in the petition before the CA, as well as in
the present petition, are the same reliefs that the petitioners may be entitled
to in the complaint before the labor arbiter.17
P & GPI
As it did with the CA when it was asked to comment on the petitioners’ motion
for reconsideration,18 P & GPI prays in its Comment19 and Memorandum20 that it
be dropped as a party-respondent, and that it be excused from further
participating in the proceedings. It argues that inasmuch as the NLRC
resolved the contempt charge on the merits, an appeal from its dismissal
through a petition for certiorari is barred. Especially in its case, the dismissal
of the petition for certiorari is correct because it was never made a party to
the contempt proceedings and, thus, it was never afforded the opportunity to
be heard. It adds that it is an entity separate from CTMI. It submits that it
cannot be made to assume any or all of CTMI’s liabilities, absent an
agreement to that effect but even if it may be liable, the present proceedings
are not the proper venue to determine its liability, if any.
 On December 16, 2008, the petitioners filed a Memorandum21 raising
essentially the same issues and arguments laid down in the petition.
The Court’s Ruling
Issues
The parties’ submissions raise the following issues:
(1) whether the NLRC has contempt powers;
(2) whether the dismissal of a contempt charge is appealable; and
(3) whether the NLRC committed grave abuse of discretion in dismissing the
contempt charge against the respondents.
On the first issue, we stress that under Article 21822 of the Labor Code, the
NLRC (and the labor arbiters) may hold any offending party in contempt,
directly or indirectly, and impose appropriate penalties in accordance with
law. The penalty for direct contempt consists of either imprisonment or fine,
the degree or amount depends on whether the contempt is against the
Commission or the labor arbiter. The Labor Code, however, requires the labor
arbiter or the Commission to deal with indirect contempt in the manner
prescribed under Rule 71 of the Rules of Court.23
Rule 71 of the Rules of Court does not require the labor arbiter or the NLRC
to initiate indirect contempt proceedings before the trial court. This mode is to
be observed only when there is no law granting them contempt powers.24 As is
clear under Article 218(d) of the Labor Code, the labor arbiter or the
Commission is empowered or has jurisdiction to hold the offending party or
parties in direct or indirect contempt. The petitioners, therefore, have not
improperly brought the indirect contempt charges against the respondents
before the NLRC.
The second issue pertains to the nature of contempt proceedings, especially
with respect to the remedy available to the party adjudged to have committed
indirect contempt or has been absolved of indirect contempt charges. In this
regard, Section 11, Rule 71 of the Rules of Court states that the judgment or
final order of a court in a case of indirect contempt may be appealed to the
proper court as in a criminal case. This is not the point at issue, however, in
this petition. It is rather the question of whether the dismissal of a contempt
charge, as in the present case, is appealable. The CA held that the NLRC’s
dismissal of the contempt charges against the respondents amounts to an
acquittal in a criminal case and is not subject to appeal.
The CA ruling is grounded on prevailing jurisprudence.
In Yasay, Jr. v. Recto,25 the Court declared:
A distinction is made between a civil and [a] criminal contempt. Civil contempt
is the failure to do something ordered by a court to be done for the benefit of
a party. A criminal contempt is any conduct directed against the authority or
dignity of the court.26
The Court further explained in Remman Enterprises, Inc. v. Court of Appeals27
and People v. Godoy28 the character of contempt proceedings, thus –
The real character of the proceedings in contempt cases is to be determined
by the relief sought or by the dominant purpose. The proceedings are to be
regarded as criminal when the purpose is primarily punishment and civil when
the purpose is primarily compensatory or remedial.
Still further, the Court held in Santiago v. Anunciacion, Jr.29 that:
But whether the first or the second, contempt is still a criminal proceeding in
which acquittal, for instance, is a bar to a second prosecution. The distinction
is for the purpose only of determining the character of punishment to be
administered.
In the earlier case of The Insurance Commissioner v. Globe Assurance Co.,
Inc.,30 the Court dismissed the appeal from the ruling of the lower court
denying a petition to punish the respondent therein from contempt for lack of
evidence. The Court said in that case:
It is not the sole reason for dismissing this appeal. In the leading case of In re
Mison, Jr. v. Subido, it was stressed by Justice J.B.L. Reyes as ponente, that
the contempt proceeding far from being a civil action is "of a criminal nature
and of summary character in which the court exercises but limited
jurisdiction." It was then explicitly held: "Hence, as in criminal proceedings, an
appeal would not lie from the order of dismissal of, or an exoneration from, a
charge of contempt of court." [footnote omitted]
Is the NLRC’s dismissal of the contempt charges against the respondents
beyond review by this Court? On this important question, we note that the
petitioners, in assailing the CA main decision, claim that the appellate court
committed grave abuse of discretion in not ruling on the dismissal by the
NLRC of the contempt charges.31 They also charge the NLRC of having
gravely abused its discretion and having committed reversible errors in:
(1) setting aside its earlier resolutions and orders, including the writ of
preliminary injunction it issued, with its dismissal of the petition to cite the
respondents in contempt of court;
(2) overturning this Court’s resolutions upholding the TRO and the writ of
preliminary injunction;
(3) failing to impose administrative fines upon the respondents for violation of
the TRO and the writ of preliminary injunction; and
(4) failing to order the reinstatement of the dismissed petitioners and the
payment of their accrued wages and other benefits.
In view of the grave abuse of discretion allegation in this case, we deem it
necessary to look into the NLRC’s dismissal of the contempt charges against
the respondents. As the charges were rooted into the respondents’ alleged
non-compliance with the NLRC directives contained in the TRO32 and the writ
of preliminary injunction,33 we first inquire into what really happened to these
directives.
The assailed NLRC resolution of October 31, 200034 gave us the following
account on the matter -
On the first directive, x x x We find that there was no violation of the said
order. A perusal of the records would show that in compliance with the
temporary restraining order (TRO), respondents reinstated back to work the
 sales drivers who complained of illegal dismissal (Memorandum of
Respondents, page 4).
Petitioners’ allegation that there was only payroll reinstatement does not
make the respondents guilty of contempt of court. Even if the drivers were
just in the garage doing nothing, the same does not make respondents guilty
of contempt nor does it make them violators of the injunction order. What is
important is that they were reinstated and receiving their salaries.
As for petitioners Danilo Real, Roberto Sedano and Rolando Manalo, they
have resigned from their jobs and were paid their separation pay xxx (Exhibits
"6," "6-A," "7," "7-A," "8," "8-A," Respondents’ Memorandum dated August 12,
1996). The issue of whether they were illegally dismissed should be threshed
out before the Labor Arbiter in whose sala the case of unfair labor practice
and illegal dismissal were (sic) filed. Records also show that petitioner
Antonio Desquitado during the pendency of the case executed an affidavit of
desistance asking that he be dropped as party complainant in as much as he
has already accepted separation benefits totaling to ₱63,087.33.
With respect to the second directive ordering respondents to cease and
desist from implementing the memoranda dated July 15, 1991 designed to
ground sales personnel who are members of the union, respondents alleged
that they can no longer be restrained or enjoined and that the status quo can
no longer be restored, for implementation of the memorandum was already
consummated or was a fait accompli. x x x
All sales vehicles were ordered to be turned over to management and the
same were already sold[.] xxx [I]t would be hard to undo the sales
transactions, the same being valid and binding. The memorandum of July 15,
1991 authorized still all sales representatives to continue servicing their
customers using public transportation and a transportation allowance would
be issued.
xxxx
The third directive of the Commission is to preserve the "status quo ante"
between the parties.
Records reveal that WELLA AG of Germany terminated its Licensing
Agreement with respondent company effective December 31, 1991 (Exhibit
"11," Respondents’ Memorandum).
On January 31, 1992, individual petitioners together with the other employees
were terminated xxx. In fact, this event resulted to the closure of the
respondent company. The manufacturing and marketing operations ceased.
This is evidenced by the testimony of Rosalito del Rosario and her affidavit
(Exh. "9," memorandum of Respondents) as well as Employer’s Monthly
Report on Employees Termination/dismissals/suspension xxx (Exhibits "12-A"
to "12-F," ibid) as well as the report that there is a permanent shutdown/total
closure of all units of operations in the establishment (Ibid). A letter was
likewise sent to the Department of Labor and Employment (Exh. "12," Ibid) in
compliance with Article 283 of the Labor Code, serving notice that it will
cease business operations effective January 31, 1992.
 The petitioners strongly dispute the above account. They maintain that the
NLRC failed to consider the following:
1. CTMI violated the status quo ante order when it did not restore to their
former work assignments the dismissed sales drivers. They lament that their
being "garaged" deprived them of benefits, and they were subjected to
ridicule and psychological abuse. They assail the NLRC for considering the
payroll reinstatement of the drivers as compliance with its stay order.
They also bewail the NLRC’s recognition of the resignation of Danilo Real,
Roberto Sedano, Rolando Manalo and Antonio Desquitado as they were just
compelled by economic necessity to resign from their employment. The
quitclaims they executed were contrary to public policy and should not bar
them from claiming the full measure of their rights, including their counsel
who was unduly deprived of his right to collect attorney’s fees.
2. It was error for the NLRC to rule that the memorandum, grounding the
sales drivers, could no longer be restrained or enjoined because all sales
vehicles were already sold. No substantial evidence was presented by the
respondents to prove their allegation, but even if there was a valid sale of the
vehicles, it did not relieve the respondents of responsibility under the stay
order.
3. The alleged termination of the licensing agreement between CTMI and
WELLA AG of Germany, which allegedly resulted in the closure of CTMI’s
manufacturing and marketing operations, occurred after the NLRC’s issuance
of the injunctive reliefs. CTMI failed to present substantial evidence to support
its contention that it folded up its operations when the licensing agreement
was terminated. Even assuming that there was a valid closure of CTMI’s
business operations, they should have been paid their lost wages,
allowances, incentives, sales commissions, per diems and other employee
benefits from August 23, 1991 up to the date of the alleged termination of
CTMI’s marketing operations.
Did the NLRC commit grave abuse of discretion in dismissing the contempt
charges against the respondents? An act of a court or tribunal may only be
considered as committed in grave abuse of discretion when it was performed
in a capricious or whimsical exercise of judgment which is equivalent to lack
of jurisdiction. The abuse of discretion must be so patent and gross as to
amount to an evasion of a positive duty enjoined by law, or to act at all in
contemplation of law, as where the power is exercised in an arbitrary and
despotic manner by reason of passion or personal hostility.35
The petitioners insist that the respondents violated the NLRC directives,
especially the status quo ante order, for their failure to reinstate the dismissed
petitioners and to pay them their benefits. In light of the facts of the case as
drawn above, we cannot see how the status quo ante or the employer-
employee situation before the formation of the union and the conduct of the
consent election can be maintained. As the NLRC explained, CTMI closed its
manufacturing and marketing operations after the termination of its licensing
agreement with WELLA AG of Germany. In fact, the closure resulted in the
 termination of CTMI’s remaining employees on January 31, 1992, aside from
the sales drivers who were earlier dismissed but reinstated in the payroll, in
compliance with the NLRC injunction. The petitioners’ termination of
employment, as well as all of their money claims, was the subject of the
illegal dismissal and unfair labor practice complaint before the labor arbiter.
The latter was ordered by the NLRC on October 31, 2000 to proceed hearing
the case.36 The NLRC thus subsumed all other issues into the main illegal
dismissal and unfair labor practice case pending with the labor arbiter. On this
point, the NLRC declared:
Note that when the injunction order was issued, WELLA AG of Germany was
still under licensing agreement with respondent company. However, the
situation has changed when WELLA AG of Germany terminated its licensing
agreement with the respondent, causing the latter to close its business.
Respondents could no longer be ordered to restore the status quo as far as
the individual petitioners are concerned as these matters regarding the
termination of the employees are now pending litigation with the Arbitration
Branch of the Commission. To resolve the incident now regarding the closure
of the respondent company and the matters alleged by petitioners such as
the creations of three (3) new corporations xxx as successor-corporations are
matters best left to the Labor Arbiter hearing the merits of the unfair labor
practice and illegal dismissal cases.37
We find no grave abuse of discretion in the assailed NLRC ruling. It rightly
avoided delving into issues which would clearly be in excess of its jurisdiction
for they are issues involving the merits of the case which are by law within the
original and exclusive jurisdiction of the labor arbiter.38 To be sure, whether
payroll reinstatement of some of the petitioners is proper; whether the
resignation of some of them was compelled by dire economic necessity;
whether the petitioners are entitled to their money claims; and whether
quitclaims are contrary to law or public policy are issues that should be heard
by the labor arbiter in the first instance. The NLRC can inquire into them only
on appeal after the merits of the case shall have been adjudicated by the
labor arbiter.
The NLRC correctly dismissed the contempt charges against the
respondents. The CA likewise committed no grave abuse of discretion in not
1âwphi 1

disturbing the NLRC resolution.

In light of the above discussion, we find no need to dwell into the other issues
the parties raised.
WHEREFORE, premises considered, we hereby DENY the petition for lack of
merit and AFFIRM the assailed resolutions of the Court of Appeals.
SO ORDERED.
ARTURO D. BRION
Associate Justice

[G.R. No. 116347. October 3, 1996.]

 NATIVIDAD PONDOC, Petitioner, v. NATIONAL LABOR
RELATIONS COMMISSION (Fifth Division, Cagayan de Oro
City) and EMILIO PONDOC, Respondents.

DECISION

DAVIDE, JR., J.:

The novel issue that confronts us in this case is whether the Fifth
Division of the National Labor Relations Commission (NLRC) can
validly defeat a final judgment of the Labor Arbiter in favor of the
complainant in a labor case by: (a) entertaining a petition for
injunction and damages, and an appeal from the Labor Arbiter’s
denial of a claim for set-off based on an alleged indebtedness of the
laborer and order of execution of the final judgment; and, (b)
thereafter, by receiving evidence and adjudging recovery on such
indebtedness and authorizing it to offset the Labor Arbiter’s final
award.

The petitioner takes the negative view. In its Manifestation and

Motion in Lieu of Comment, 1 the Office of the Solicitor General
joins her in her plea, hence we required the NLRC to file its own
comment.

We resolved to give due course to the petition after the filing by the
NLRC and the private respondent of their separate comments.

Petitioner Natividad Pondoc was the legitimate wife of Andres

Pondoc. After her death on 5 December 1994, she was substituted
by Hipolito Pondoc, her only legitimate son. 2

The Office of the Solicitor General summarized the factual

antecedents of this case in its Manifestation and Motion in Lieu of
Comment: chanrob1es virtual 1aw library

Private respondent Eulalio Pondoc is the owner-proprietor of

Melleonor General Merchandise and Hardware Supply located at
Poblacion, Sindangan, Zamboanga del Norte. Respondent is
engaged, among others, in the business of buying and selling
copra, rice, corn, "binangkol," junk iron and empty bottles. He has
in his employ more than twenty (20) regular workers (Records, pp.
9-11).

Records disclose that Andres Pondoc was employed by Eulalio

Pondoc as a laborer from October 1990 up to December 1991,
receiving a wage rate of P20.00 per day. He was required to work
twelve (12) hours a day from 7:00 AM to 8:00 PM, Monday to
Sunday. Despite working on his rest days and holidays, he was not
paid his premium pay as required by law (Ibid).

Consequently, on May 14, 1992, Natividad Pondoc, on behalf of her

husband, filed a complaint for salary differential, overtime pay,
13th month pay, holiday pay and other money claims before the
Sub-Regional Arbitration Branch No. 9 of the NLRC, docketed as
Sub-RAB Case No. 09-05-10102-92 (Records, p. 1).

In his position paper, private respondent questioned, among

others, the existence of [an] employer-employee relationship
between them. He further averred that Melleonor General
Merchandise and Hardware Supply is a fictitious establishment
(Records, pp. 64-68).

On June 17, 1993, Labor Arbiter Esteban Abecia rendered a

Decision finding the existence of [an] employer-employee
relationship between the parties. The dispositive portion of the
Decision reads: chanrob1es virtual 1aw library

WHEREFORE, judgment is hereby rendered: (a) ordering

respondent Eulalio Pondoc to pay complainant the following claims:

(1) Salary differential for

reason of underpayment P35,776.00;

(2) Regular holiday and

premium pay for holiday

services 902.00;

(3) Premium pay for rest day

services P3,840.00;

(4) 13th month pay 3,600.00

or the total amount of FOURTY-FOUR [sic] THOUSAND AND ONE
HUNDRED EIGHTEEN PESOS (P44,118.00).

Other claims are denied for lack of merit.

SO ORDERED (Records, pp. 323-324).

On his last day to perfect an appeal, private respondent filed a

Manifestation before the Labor Arbiter praying that his liabilities be
set-off against petitioner’s alleged indebtedness to him (Records,
pp. 325-327). The Labor Arbiter denied, however, the
compensation, and instead, issued a writ of execution as prayed for
by petitioner (Records, p. 328).

Before the execution order could be implemented, however, private

respondent was able to obtain a restraining order from the NLRC,
where he filed a Petition for "Injunction and Damages," docketed as
NLRC Case No. ICM-000065.

On February 28, 1994, public respondent NLRC allowed

compensation between petitioner’s monetary award and her alleged
indebtedness to private Respondent. It disposed: chanrob1es virtual 1aw library

WHEREFORE, the appealed order is hereby vacated and set Aside. A

new one is entered declaring the setting-off of complainant’s
indebtedness which allegedly amounted to P41,051.35 against the
complainant’s monetary award in the amount of P44,118.00. The
additional amount of P5,000.00 which complainant allegedly got
from respondent on 10 July 1993 could not be credited in view of
appellant’s failure to submit evidence to prove that complainant
was really paid P5,000.00.

Accordingly, respondent Eulalio Pondoc is hereby directed to pay

complainant Natividad Pondoc the amount of P3,066.65.

The Temporary restraining order issued herein is hereby made

permanent.
SO ORDERED (Annex "D" of Petition). 3

Her motion for reconsideration of the judgment having been denied

by the NLRC, the petitioner instituted this special civil action for
certiorari under Rule 65 of the Rules of Court wherein she prays
this Court annul the challenged decision of the NLRC, Fifth Division
(Cagayan de Oro City), in NLRC Case No. IC No. M-000065, and
direct the enforcement of the writ of execution in NLRC Case No.
SRAB 09-05-10102-92, on the ground that the NLRC, Fifth Division,
acted without or in excess of jurisdiction or with grave abuse of
discretion when it proceeded to determine the alleged indebtedness
of the petitioner and set-off the same against the liabilities of the
private Respondent. The petitioner asserts that the decision of the
Labor Arbiter in NLRC Case No. SRAB-09-05-10102-92 was already
final and executory when the private respondent tried to defeat the
judgment by asserting an alleged indebtedness of Andres Pondoc as
a set-off, a claim not pleaded before the Labor Arbiter at any time
before judgment, hence deemed waived. Moreover, the
indebtedness "did not evolve out [sic] employer-employee
relationship, hence, purely civil in aspect."
cralaw virtua1aw library

The Office of the Solicitor General agreed with the petitioner and
stressed further that the asserted indebtedness was never proven
to have arisen out of or in connection with the employer-employee
relationship between the private respondent and the late Andres
Pondoc, or to have any causal connection thereto. Accordingly, both
the Labor Arbiter and the NLRC did not have jurisdiction over the
private respondent’s claim.

As expected, the private respondent and the NLRC prayed for the
dismissal of this case.

We rule for the petitioner.

The proceedings before the NLRC were fatally flawed.

In the first place, the NLRC should not have entertained the private
respondent’s separate or independent petition for "Injunction and
Damages" (NLRC IC No. M-000065). It was obvious that the
petition was a scheme to defeat or obstruct the enforcement of the
judgment in NLRC Case No. SRAB-09-05-10102-92 where, in fact,
a writ of execution had been issued. Article 218(e) of the Labor
Code does not provide blanket authority to the NLRC or any of its
divisions to issue writs of injunction, while Rule XI of the New Rules
of Procedure of the NLRC makes injunction only an ancillary remedy
in ordinary labor disputes such as the one brought by the petitioner
in NLRC Case No. SRAB-09-05-10102-92. This is clear from Section
1 of the said Rule which pertinently provides as follows:chanrob1es virtual 1aw library

Section 1. Injunction in Ordinary Labor Disputed. — A preliminary

injunction or a restraining order may be granted by the Commission
through its divisions pursuant to the provisions of paragraph (e) of
Article 218 of the Labor Code, as amended, when it is established
on the bases of the sworn allegations in the petition that the acts
complained of, involving or arising from any labor dispute before
the Commission, which, if not restrained or performed forthwith,
may cause grave or irreparable damage to any party or render
ineffectual any decision in favor of such party.

x x x

The foregoing ancillary power may be exercised by the Labor

Arbiters only as an incident to the cases pending before them in
order to preserve the rights of the parties during the pendency of
the case, but excluding labor disputes involving strike or lockout.
(Emphasis supplied)

Hence, a petition or motion for preliminary injunction should have

been filed in the appeal interposed by the private respondent, i.e.,
in NLRC Case No. SRAB-09-05-10102-92. This matter, however,
became academic when the NLRC consolidated the two cases as
shown by the captions in its challenged decision of 28 February
1994 and resolution of 6 May 1994.

Secondly, the appeal of the private respondent in NLRC Case No.

SRAB-09-05-10102-92 was not from the decision therein, but from
the order of the Labor Arbiter denying the set-off insisted upon by
the private respondent and directing the execution of the judgment.
Therefore, the private respondent admitted the final and executory
character of the judgment.

The Labor Arbiter, in denying the set-off, reasoned" [i]t could have
been considered if it was presented before the decision of this
case." 4 While this is correct, there are stronger reasons why the
set-off should, indeed, be denied. As correctly contended by the
Office of the Solicitor General, there is a complete want of evidence
that the indebtedness asserted by the private respondent against
Andres Pondoc arose out of or was incurred in connection with the
employer-employee relationship between them. The Labor Arbiter
did not then have jurisdiction over the claim as under paragraph (a)
of Article 217 of the Labor Code, Labor Arbiters have exclusive and
original jurisdiction only in the following cases:
chanrob1es virtual 1aw library

1. Unfair labor practice cases;

2. Termination disputes;

3. If accompanied with a claim for reinstatement, those cases that

workers may file involving wages, rates of pay, hours of work and
other terms and conditions of employment;

4. Claim for actual, moral, exemplary and other forms of damages

arising from employer-employee relations;

5. Cases arising from any violation of Article 264 of this Code,

including questions involving the legality of strikes and lockouts;
and

6. Except claims for Employees Compensation, Social Security,

Medicare and maternity benefits, all other claims, arising from
employer-employee relations, including those of persons in
domestic or household service, involving an amount exceeding five
thousand pesos (P5,000.00) regardless of whether accompanies
with a claim for reinstatement.

On the other hand, under paragraph (b) thereof, the NLRC has
exclusive appellate jurisdiction over all cases decided by the Labor
Arbiters. This simply means that the NLRC does not have original
jurisdiction over the cases enumerated in paragraph (a) and that if
a claim does not fall within the exclusive original jurisdiction of the
Labor Arbiter, the NLRC cannot have appellate jurisdiction thereon.

The conclusion then is inevitable that the NLRC was without

jurisdiction, either original or appellate, to receive evidence on the
alleged indebtedness, render judgment thereon, and direct that its
award be set-off against the final judgment of the Labor Arbiter.

Finally, even assuming arguendo that the claim for the alleged
indebtedness fell within the exclusive original jurisdiction of the
Labor Arbiter, it was deemed waived for not having been pleaded
as an affirmative defense or barred for not having been set up as a
counterclaim before the Labor Arbiter at any appropriate time prior
to the rendition of the decision in NLRC Case No. SRAB-09-05-
10102-92. Under the Rules of Court, which is applicable in a
suppletory character in labor cases before the Labor Arbiters or the
NLRC pursuant to Section 3, Rule I of the New Rules of Procedure
of the NLRC, defenses which are not raised either in a motion to
dismiss or in the answer are deemed waived 5 and counterclaims
not set up in the answer are barred. 6 Set-off or compensation is
one of the modes of extinguishing obligations 7 and extinguishment
is an affirmative defense and a ground for a motion to dismiss. 8

We do not then hesitate to rule that the NLRC acted without

jurisdiction or with grave abuse of discretion in entertaining an
independent action for injunction and damages (NLRC IC No. M-
000065), in receiving evidence and rendering judgment on the
alleged indebtedness of Andres Pondoc, and in ordering such
judgment to offset the final award of the labor Arbiter in NLRC Case
No. SRAB-09-05-10102-92.

WHEREFORE, the instant petition is GRANTED and the challenged

decision of 28 February 1994 and resolution of 6 May 1994 of the
National Labor Relations Commission in NLRC Case No. IC No. M-
000065 and NLRC Case No. SRAB-09-05-10102-92 are ANNULLED
and SET ASIDE. The judgment of the Labor Arbiter in NLRC Case
No. SRAB-09-05-10102-92 should forthwith be enforced without
any further delay, the award therein bearing interest at the rate of
twelve percentum (12%) per annum from the finality of such
judgment until it shall have been fully paid.

Costs against the private Respondent.

SO ORDERED.

G.R. No. 113541 November 22, 2001

THE HONGKONG AND SHANGHAI BANKING CORPORATION
EMPLOYEES UNION, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION AND THE HONGKONG
AND SHANGHAI BANKING CORPORATION LIMITED, respondents.
SANDOVAL-GUTIERREZ, J.:
The instant petition for certiorari1 with prayer for a temporary restraining order
assails the Resolution2 dated January 31, 1994 of the National Labor Relations
Commission in NLRC IC CASE No. 000422-93, entitled "THE HONGKONG
AND SHANGHAI BANKING CORPORATION, LIMITED, versus THE
HONGKONG AND SHANGHAI BANKING CORPORATION EMPLOYEES
UNION, et al."
The challenged Resolution issued by the NLRC granted the preliminary
injunction prayed for by The Hongkong and Shanghai Banking Corporation,
Limited ("respondent bank") enjoining The Hongkong and Shanghai Banking
Corporation Employees Union ("petitioner union"), its agents, sympathizers or
anyone acting in its behalf from unlawfully barricading and/or obstructing the
free ingress to and egress from the respondent bank's offices in Makati City
and Ortigas Center, Pasig City.
On December 22, 1993, the officers and members of petitioner union staged a
strike against respondent bank for its (1) arbitrary and unilateral reduction of
the "CBA-established entry level of clerical pay rates" and (2) whimsical refusal
to bargain collectively on wage rates, among others.
The next day, December 23, 1993, respondent bank filed a petition for
injunction3 with the National Labor Relations Commission ("respondent NLRC")
praying that petitioner union's acts of obstructing the ingress to and egress from
the bank's premises be enjoined and, in the interim, a temporary restraining
order be issued. Respondent bank claimed that the unlawful obstruction has
caused grave and irreparable damage to its banking activities, and that unless
these acts are restrained, it will continue to suffer greater injury.
At the initial hearing of the petition for injunction on December 28, 1993 before
Labor Arbiter Jesus B. Afable (whom respondent NLRC delegated to receive
evidence thereon), petitioner union orally prayed for the dismissal of the
petition on the ground that respondent bank failed to specifically allege therein
the provisions of Article 218 (e, 3 and 4) of the Labor Code, as amended, to
wit:
"ART. 218. POWERS OF THE COMMISSION. — The Commission shall have
the power and authority:
xxx xxx xxx
(e). To enjoin or restrain any actual or threatened commission of any or all
prohibited or unlawful acts or to require the performance of a particular act in
any labor dispute which, if not restrained or performed forthwith, may cause
grave or irreparable damage to any party or render ineffectual any decision in
favor of such party: Provided, That no temporary or permanent injunction in
any case involving or growing out of a labor dispute as defined in this Code
shall be issued except after hearing x x x, and only after a finding of fact by the
Commission, to the effect:
xxx xxx xxx
(3) That as to each item of relief to be granted, greater injury will be inflicted
upon complainant by the denial of relief than will be inflicted upon defendants
by the granting of relief;
(4) That complainant has no adequate remedy at law; and
x x x " (Emphasis ours)
On January 4, 1994, respondent bank filed a supplemental petition alleging
that petitioner union's officers and members continue to commit acts of
intimidation, coercion, and obstruction in violation of Article 264 (e)4 of the
Labor Code.
Finding the petition and the supplemental petition to be in accordance with
Article 218 of the Labor Code, respondent NLRC issued a Resolution5 on
January 6, 1994 granting a temporary restraining order and setting the hearing
of respondent bank's application for preliminary injunction, thus impliedly
denying petitioner union's oral motion to dismiss the petition.
Petitioner union then filed a motion for reconsideration of the said Resolution
but was denied by respondent NLRC in its Resolution of January 20, 1994.
This Resolution also directed Labor Arbiter Afable to conduct trial on January
24, 25 and 26, 1994. During these dates, respondent bank presented
testimonial, documentary and real evidence. Upon motion by petitioner union,
the Labor Arbiter ordered the exclusion for being immaterial, of all evidence
pertaining to the events prior to the said dates. Respondent bank then objected
to this order of exclusion by filing an "Exception with Tender of Excluded
Evidence (Ex Abundante Cautelam)". After respondent bank rested its case,
petitioner union did not present evidence. Its counsel argued in open session
for the dismissal of the petition, citing the insufficiency of evidence in support
of the issuance of a temporary restraining order or preliminary injunction.
On January 31, 1994, respondent NLRC issued the questioned Resolution (1)
denying petitioner union's oral motion to dismiss the petition; (2) issuing a writ
of preliminary injunction in favor of respondent bank, and (3) directing the Labor
Arbiter to conduct further hearing for the reception of additional evidence to
sustain the issuance of a writ of permanent injunction.
Without first filing a motion for reconsideration of the said Resolution, petitioner
union comes to this Court via the present petition raising the sole issue of
whether or not respondent NLRC acted with grave abuse of discretion in
denying its motion to dismiss and granting respondent bank's prayer for the
issuance of a writ of preliminary injunction.
Petitioner union vigorously maintains that the petition for injunction filed by the
respondent bank with the NLRC suffers from a fatal flaw for it failed to
specifically allege therein the matters set forth under Nos. 3 and 4 of Article
218 (e) of the Labor Code. Petitioner union further alleges that it was deprived
of its right to due process because it was not given the opportunity "to cross-
examine the bank's witnesses concerning the excluded evidence relied upon
by respondent Commission for its findings, and to present testimony in
opposition thereto."6
The petition is devoid of merit.
In a special civil action for certiorari, the petitioner has to show not merely a
reversible error committed by the public respondent, but that it acted with grave
abuse of discretion amounting to lack or excess of jurisdiction.7 "Grave abuse
of discretion" implies such capricious and whimsical exercise of judgment as is
equivalent to lack of jurisdiction, or where the power is exercised in an arbitrary
or despotic manner by reason of passion or personal hostility which must be
so patent and gross as to amount to an invasion of positive duty or to a virtual
refusal to perform the duty enjoined or to act at all in contemplation of law.8
Mere abuse of discretion is not enough.9
Here, we see no grave abuse of discretion on the part of respondent NLRC in
giving due course to the petition for injunction filed by respondent bank. As
aptly observed by the Solicitor General, it is not necessary for the respondent
bank to allege in verbatim the requisites for the issuance of the temporary
restraining order and/or writ of preliminary injunction under Article 218 (e) of
the Labor Code.10 In its original and supplemental petition for injunction,
respondent bank made sufficient allegations that members of petitioner union
were unlawfully preventing or obstructing the free ingress to and egress from
the respondent bank premises; and disrupting operations, causing great and
continuing damage to the bank in terms of lost revenues. These allegations, as
found by respondent NLRC, were proven by respondent bank during the
proceedings for the issuance of a writ of preliminary injunction. Incidentally, it
is not our function in this certiorari proceedings to review the findings of facts
of respondent NLRC since we are confined only to issues of jurisdiction or
grave abuse of discretion.11 Indeed, this Court is not a trier of facts; factual
issues are beyond the ambit of our authority to review on certiorari.12
Anent the contention of petitioner union that it was deprived of the opportunity
to cross-examine the bank's witnesses, the same is totally unavailing. In the
proceedings before respondent NLRC, petitioner union's counsel, instead of
cross-examining those witnesses, merely resorted to oral argument and moved
to dismiss the petition for insufficiency of evidence. The oral motion to dismiss
was opposed, also in open session, by respondent bank, after which, the entire
incident was considered submitted for resolution. Respondent NLRC had no
recourse but to decide the motion based solely on the evidence presented. In
any event, respondent NLRC gave petitioner union the opportunity to
controvert respondent bank's evidence when it directed the Labor Arbiter to
receive evidence. Clearly, respondent NLRC, in issuing the assailed
Resolution, did not commit any grave abuse of discretion.
WHEREFORE, the petition is DISMISSED.
SO ORDERED.

SECOND DIVISION
 [A.C. No. 7430 : February 15, 2012]

MARTIN LAHM III AND JAMES P. CONCEPCION,

COMPLAINANTS, VS. LABOR ARBITER JOVENCIO LL. MAYOR,
JR., RESPONDENT.

RESOLUTION

REYES, J.:

Before us is a verified complaint[1] filed by Martin Lahm III and

James P. Concepcion (complainants) praying for the disbarment of
Labor Arbiter Jovencio Ll. Mayor, Jr. (respondent) for alleged gross
misconduct and violation of lawyer’s oath.cralaw

On June 27, 2007, the respondent filed his Comment[2] to the

complaint.

In a Resolution[3] dated July 18, 2007, the Court referred the case
to the Integrated Bar of the Philippines (IBP) for investigation,
report and recommendation.

The antecedent facts, as summarized in the Report and

Recommendation[4] dated September 19, 2008 of Commissioner
Romualdo A. Din, Jr. of the IBP Commission on Bar Discipline, are
as follows:

On September 5, 2006 a certain David Edward Toze filed a complaint

for illegal dismissal before the Labor Arbitration Branch of the
National Labor Relations Commission against the members of the
Board of Trustees of the International School, Manila. The same was
docketed as NLRC-NCR Case No. 00-07381-06 and raffled to the sala
of the respondent. Impleaded as among the party-respondents are
the complainants in the instant case.

On September 7, 2006, David Edward Toze filed a Verified Motion for

the Issuance of a Temporary Restraining Order and/or Preliminary
Injunction Against the Respondents. The said Motion was set for
hearing on September 12, 2006 at 10:00 in the morning. A day after,
on September 8, 2006, the counsel for the complainants herein
entered its appearance and asked for additional time to oppose and
make a comment to the Verified Motion for the Issuance of a
Temporary Restraining Order and/or Preliminary Injunction Against
the Respondents of David Edward Toze.

Thereafter, the respondent issued an Order dated September 14,

2006 that directs the parties in the said case to maintain the status
quo ante. The complainants herein sought the reconsideration of the
Order dated September 14, 200[6] x x x.

xxxx

On account of the Order dated September 14, 2006, David Edward

Toze was immediately reinstated and assumed his former position as
superintendent of the International School Manila.

The pending incidents with the above-mentioned illegal dismissal

case were not resolved, however, the scheduled hearing for the
issuance of a preliminary injunction on September 20, 2006 and
September 27, 2006 was postponed.

On January 19, 2007, the co-respondents of the complainants herein

in the said illegal dismissal case filed a motion for an early resolution
of their motion to dismiss the said case, but the respondent instead
issued an Order dated February 6, 2007 requiring the parties to
appear in his Office on February 27, 2007 at 10:00 in the morning in
order to thresh out David Edward Toze’ claim of moral and exemplary
damages.

xxxx

The respondent on the other maintains that the Order dated

September 14, 2006 was issued by him on account of [the] Verified
Motion for the Issuance of a Temporary Restraining Order and/or
Preliminary Injunction Against the Respondents that was filed by
David Edward Toze, and of the Entry of Appearance with Motion for
Additional Time to File Comment that was thereafter filed by the
counsel for the herein complainants in the illegal dismissal case
pending before the respondent.

The respondent maintains that in order to prevent irreparable

damage on the person of David Edward Toze, and on account of the
urgency of [the] Verified Motion for the Issuance of a Temporary
Restraining Order and/or Preliminary Injunction Against the
Respondents of David Edward Toze, and that the counsel for
respondents in the illegal dismissal case have asked for a relatively
long period of fifteen days for a resetting, he (respondent) found
merit in issuing the Order dated September 14, 2006 that requires
the parties to maintain the status quo ante.

xxx

The respondent argues that [the] instant case should be dismissed

for being premature since the aforementioned illegal dismissal case
is still pending before the Labor Arbitration Branch of the National
Labor Relations Commission, that the instant case is a subterfuge in
order to compel the respondent to inhibit himself in resolving the said
illegal dismissal case because the complainants did not assail the
Order dated September 14, 2006 before the Court of Appeals under
Rule 65 of the Rules of Court.[5]

Based on the foregoing, the Investigating Commissioner concluded

that: (1) the grounds cited by the respondent to justify his issuance
of the status quo ante order lacks factual basis and is speculative;
(2) the respondent does not have the authority to issue a
temporary restraining order and/or a preliminary injunction; and
(3) the inordinate delay in the resolution of the motion for
reconsideration directed against the September 14, 2006 Order
showed an orchestrated effort to keep the status quo ante until the
expiration of David Edward Toze’s employment contract.

Accordingly, the Investigating Commissioner recommended that:

WHEREFORE, it is respectfully recommended that the respondent be

SUSPENDED for a period of six (6) months with a warning that a
repetition of the same or similar incident will be dealt with more
severe penalty.[6]

On December 11, 2008, the IBP Board of Governors issued

Resolution No. XVIII-2008-644[7] which adopted and approved the
recommendation of the Investigating Commissioner. The said
resolution further pointed out that the Board of Governors had
previously recommended the respondent’s suspension from the
practice of law for three years in Administrative Case (A.C.) No.
7314 entitled “Mary Ann T. Flores v. Atty. Jovencio Ll. Mayor, Jr.”.
The respondent sought to reconsider the foregoing disposition,[8]
but it was denied by the IBP Board of Governors in its Resolution
No. XIX-2011-476 dated June 26, 2011.

The case is now before us for confirmation. We agree with the IBP
Board of Governors that the respondent should be sanctioned.

Section 27, Rule 138 of the Rules of Court provides that a lawyer
may be removed or suspended from the practice of law, inter alia,
for gross misconduct and violation of the lawyer’s oath. Thus:

Section 27. Attorneys removed or suspended by Supreme Court on

what grounds. – A member of the bar may be removed or
suspended from his office as attorney by the Supreme Court
for any deceit, malpractice, or other gross misconduct in such
office, grossly immoral conduct, or by reason of his conviction of a
crime involving moral turpitude, or for any violation of the oath which
he is required to take before the admission to practice, or for a wilful
disobedience of any lawful order of a superior court, or for corruptly
or wilful appearing as an attorney for a party to a case without
authority so to do. The practice of soliciting cases at law for the
purpose of gain, either personally or through paid agents or brokers,
constitutes malpractice. (emphasis supplied)

A lawyer may be suspended or disbarred for any misconduct

showing any fault or deficiency in his moral character, honesty,
probity or good demeanor.[9] Gross misconduct is any inexcusable,
shameful or flagrant unlawful conduct on the part of a person
concerned with the administration of justice; i.e., conduct
prejudicial to the rights of the parties or to the right determination
of the cause. The motive behind this conduct is generally a
premeditated, obstinate or intentional purpose.[10]

Intrinsically, the instant petition wants this Court to impose

disciplinary sanction against the respondent as a member of the
bar. However, the grounds asserted by the complainants in support
of the administrative charges against the respondent are
intrinsically connected with the discharge of the respondent’s quasi-
judicial functions.

Nonetheless, it cannot be discounted that the respondent, as a

labor arbiter, is a public officer entrusted to resolve labor
controversies. It is well settled that the Court may suspend or
disbar a lawyer for any conduct on his part showing his unfitness
for the confidence and trust which characterize the attorney and
client relations, and the practice of law before the courts, or
showing such a lack of personal honesty or of good moral character
as to render him unworthy of public confidence.[11]

Thus, the fact that the charges against the respondent were based
on his acts committed in the discharge of his functions as a labor
arbiter would not hinder this Court from imposing disciplinary
sanctions against him.

The Code of Professional Responsibility does not cease to apply to a

lawyer simply because he has joined the government service. In
fact, by the express provision of Canon 6 thereof, the rules
governing the conduct of lawyers “shall apply to lawyers in
government service in the discharge of their official tasks.” Thus,
where a lawyer’s misconduct as a government official is of such
nature as to affect his qualification as a lawyer or to show moral
delinquency, then he may be disciplined as a member of the bar on
such grounds.[12]

In Atty. Vitriolo v. Atty. Dasig,[13] we stressed that:

Generally speaking, a lawyer who holds a government office may not

be disciplined as a member of the Bar for misconduct in the discharge
of his duties as a government official. However, if said misconduct
as a government official also constitutes a violation of his
oath as a lawyer, then he may be disciplined by this Court as
a member of the Bar.

In this case, the record shows that the respondent, on various

occasions, during her tenure as OIC, Legal Services, CHED,
attempted to extort from Betty C. Mangohon, Rosalie B. Dela Torre,
Rocella G. Eje, and Jacqueline N. Ng sums of money as consideration
for her favorable action on their pending applications or requests
before her office. The evidence remains unrefuted, given the
respondent’s failure, despite the opportunities afforded her by this
Court and the IBP Commission on Bar Discipline to comment on the
charges. We find that respondent’s misconduct as a lawyer of the
CHED is of such a character as to affect her qualification as a member
of the Bar, for as a lawyer, she ought to have known that it was
patently unethical and illegal for her to demand sums of money as
consideration for the approval of applications and requests awaiting
action by her office.

xxx

A member of the Bar who assumes public office does not shed
his professional obligations. Hence, the Code of Professional
Responsibility, promulgated on June 21, 1988, was not meant
to govern the conduct of private practitioners alone, but of all
lawyers including those in government service. This is clear
from Canon 6 of said Code. Lawyers in government are public
servants who owe the utmost fidelity to the public service. Thus, they
should be more sensitive in the performance of their professional
obligations, as their conduct is subject to the ever-constant scrutiny
of the public.

For a lawyer in public office is expected not only to refrain from any
act or omission which might tend to lessen the trust and confidence
of the citizenry in government, she must also uphold the dignity of
the legal profession at all times and observe a high standard of
honesty and fair dealing. Otherwise said, a lawyer in
government service is a keeper of the public faith and is
burdened with high degree of social responsibility, perhaps
higher than her brethren in private practice.[14] (emphasis
supplied and citations omitted)

In Tadlip v. Atty. Borres, Jr.,[15] we ruled that an administrative case

against a lawyer for acts committed in his capacity as provincial
adjudicator of the Department of Agrarian Reform – Regional
Arbitration Board may be likened to administrative cases against
judges considering that he is part of the quasi-judicial system of
our government.

This Court made a similar pronouncement in Buehs v. Bacatan[16]

where the respondent-lawyer was suspended from the practice of
law for acts he committed in his capacity as an accredited Voluntary
Arbitrator of the National Conciliation and Mediation Board.

Here, the respondent, being part of the quasi-judicial system of our

government, performs official functions that are akin to those of
judges. Accordingly, the present controversy may be approximated
to administrative cases of judges whose decisions, including the
manner of rendering the same, were made subject of
administrative cases.

As a matter of public policy, not every error or mistake of a judge

in the performance of his official duties renders him liable. In the
absence of fraud, dishonesty or corruption, the acts of a judge in
his official capacity do not always constitute misconduct although
the same acts may be erroneous. True, a judge may not be
disciplined for error of judgment absent proof that such error was
made with a conscious and deliberate intent to cause an
injustice.[17]

While a judge may not always be held liable for ignorance of the
law for every erroneous order that he renders, it is also axiomatic
that when the legal principle involved is sufficiently basic, lack of
conversance with it constitutes gross ignorance of the law. Indeed,
even though a judge may not always be subjected to disciplinary
action for every erroneous order or decision he renders, that
relative immunity is not a license to be negligent or abusive and
arbitrary in performing his adjudicatory prerogatives.[18]

When the law is sufficiently basic, a judge owes it to his office to

know and to simply apply it. Anything less would be constitutive of
gross ignorance of the law.[19]

In the case at bench, we find the respondent guilty of gross

ignorance of the law.

Acting on the motion for the issuance of a temporary restraining

order and/or writ of preliminary injunction, the respondent issued
the September 14, 2006 Order requiring the parties to maintain the
status quo ante until the said motion had been resolved. It should
be stressed, however, that at the time the said motion was filed,
the 2005 Rules of Procedure of the National Labor Relations
Commission (NLRC) is already in effect.

Admittedly, under the 1990 Rules of Procedure of the NLRC, the

labor arbiter has, in proper cases, the authority to issue writs of
preliminary injunction and/or restraining orders. Section 1, Rule XI
of the 1990 Rules of Procedure of the NLRC provides that:
Section 1. Injunction in Ordinary Labor Disputes. – A preliminary
injunction or restraining order may be granted by the Commission
through its Divisions pursuant to the provisions of paragraph (e) of
Article 218 of the Labor Code, as amended, when it is established on
the basis of the sworn allegations in the petition that the acts
complained of involving or arising from any labor dispute before the
Commission, which, if not restrained or performed forthwith, may
cause grave or irreparable damage to any party or render ineffectual
any decision in favor of such party.

If necessary, the Commission may require the petitioner to post a

bond and writ of preliminary injunction or restraining order shall
become effective only upon the approval of the bond which shall
answer for any damage that may be suffered by the party enjoined,
if it is finally determined that the petitioner is not entitled thereto.

The foregoing ancillary power may be exercised by the Labor

Arbiters only as an incident to the cases pending before them
in order to preserve the rights of the parties during the
pendency of the case, but excluding labor disputes involving
strike or lockout. (emphasis supplied)

Nevertheless, under the 2005 Rules of Procedure of the NLRC, the

labor arbiters no longer has the authority to issue writs of
preliminary injunction and/or temporary restraining orders. Under
Section 1, Rule X of the 2005 Rules of Procedure of the NLRC, only
the NLRC, through its Divisions, may issue writs of preliminary
injunction and temporary restraining orders. Thus:

Section 1. Injunction in Ordinary Labor Disputes. - A preliminary

injunction or restraining order may be granted by the
Commission through its Divisions pursuant to the provisions of
paragraph (e) of Article 218 of the Labor Code, as amended, when it
is established on the basis of the sworn allegations in the petition
that the acts complained of involving or arising from any labor
dispute before the Commission, which, if not restrained or performed
forthwith, may cause grave or irreparable damage to any party or
render ineffectual any decision in favor of such party. (emphasis
supplied)
The role of the labor arbiters, with regard to the issuance of writs of
preliminary injunctions and/or writ of preliminary injunction, at
present, is limited to reception of evidence as may be delegated by
the NLRC. Thus, Section 4, Rule X of the 2005 Rules of Procedure of
the NLRC provides that:

Section 4. Reception of Evidence; Delegation. - The reception of

evidence for the application of a writ of injunction may be
delegated by the Commission to any of its Labor Arbiters who
shall conduct such hearings in such places as he may determine to
be accessible to the parties and their witnesses, and shall thereafter
submit his report and recommendation to the Commission within
fifteen (15) days from such delegation. (emphasis supplied)

The foregoing rule is clear and leaves no room for interpretation.

However, the respondent, in violation of the said rule, vehemently
insist that he has the authority to issue writs of preliminary
injunction and/or temporary restraining order. On this point, the
Investigating Commissioner aptly ruled that:

The respondent should, in the first place, not entertained Edward

Toze’s Verified Motion for the Issuance of a Temporary Restraining
Order and/or Preliminary Injunction Against the Respondents. He
should have denied it outright on the basis of Section 1, Rule X of
the 2005 Revised Rules of Procedure of the National Labor Relations
Commission.

xxxx

The respondent, being a Labor Arbiter of the Arbitration Branch of

the National Labor Relations Commission, should have been familiar
with Sections 1 and 4 of the 2005 Revised Rules of procedure of the
National Labor Relations Commission. The first, states that it is the
Commission of the [NLRC] that may grant a preliminary injunction
or restraining order. While the second, states [that] Labor Arbiters
[may] conduct hearings on the application of preliminary injunction
or restraining order only in a delegated capacity.[20]

What made matters worse is the unnecessary delay on the part of

the respondent in resolving the motion for reconsideration of the
September 14, 2006 Order. The unfounded insistence of the
respondent on his supposed authority to issue writs of preliminary
injunction and/or temporary restraining order, taken together with
the delay in the resolution of the said motion for reconsideration,
would clearly show that the respondent deliberately intended to
cause prejudice to the complainants.

On this score, the Investigating Commissioner keenly observed

that:

The Commission is very much disturbed with the effect of the Order
dated September 14, 2006 and the delay in the resolution of the
pending incidents in the illegal dismissal case before the respondent.

Conspicuously, Section 3 (Term of Contract) of the Employment

Contract between David Edward Toze and International School
Manila provides that David Edward Toze will render work as a
superintendent for the school years August 2005-July 2006 and
August 2006-July 2007.

The Order dated September 14, 2006 in effect reinstates David

Edward Toze as superintendent of International School of Manila until
the resolution of the former’s Verified Motion for the Issuance of a
Temporary Restraining Order and/or Preliminary Injunction Against
the Respondents.

Since the Employment Contract between David Edward Toze and

International School Manila is about to expire or end on August 2007,
prudence dictates that the respondent expediently resolved [sic] the
merits of David Edward Toze’s Verified Motion for the Issuance of a
Temporary Restraining Order and/or Preliminary Injunction Against
the Respondents because any delay in the resolution thereof would
result to undue benefit in favor of David Edward Toze and
unwarranted prejudice to International School Manila.

xxxx

At the time the respondent inhibited himself from resolving the illegal
dismissal case before him, there are barely four (4) months left with
the Employment Contract between David Edward Toze and
International School Manila.
From the foregoing, there is an inordinate delay in the resolution of
the reconsideration of the Order dated September 14, 2006 that does
not escape the attention of this Commission. There appears an
orchestrated effort to delay the resolution of the reconsideration of
the Order dated September 14, 2006 and keep status quo ante until
expiration of David Edward Toze’s Employment Contract with
International School Manila come August 2007, thereby rendering
the illegal dismissal case moot and academic.

xxxx

Furthermore, the procrastination exhibited by the respondent in the

resolution of [the] assailed Order x x x should not be countenanced,
specially, under the circumstance that is attendant with the term of
the Employment Contract between David Edward Toze and
International School Manila. The respondent’s lackadaisical attitude
in sitting over the pending incident before him for more than five (5)
months only to thereafter inhibit himself therefrom, shows the
respondent’s disregard to settled rules and jurisprudence. Failure to
decide a case or resolve a motion within the reglementary period
constitutes gross inefficiency and warrants the imposition of
administrative sanction against the erring magistrate x x x. The
respondent, being a Labor Arbiter, is akin to judges, and enjoined to
decide a case with dispatch. Any delay, no matter how short, in the
disposition of cases undermine the people’s faith and confidence in
the judiciary x x x. [21]

Indubitably, the respondent failed to live up to his duties as a

lawyer in consonance with the strictures of the lawyer’s oath and
the Code of Professional Responsibility, thereby occasioning
sanction from this Court.

In stubbornly insisting that he has the authority to issue writs of

preliminary injunction and/or temporary restraining order contrary
to the clear import of the 2005 Rules of Procedure of the NLRC, the
respondent violated Canon 1 of the Code of Professional
Responsibility which mandates lawyers to “obey the laws of the
land and promote respect for law and legal processes”.

All told, we find the respondent to have committed gross ignorance

of the law, his acts as a labor arbiter in the case below being
inexcusable thus unquestionably resulting into prejudice to the
rights of the parties therein.

Having established the foregoing, we now proceed to determine the

appropriate penalty to be imposed.

Under Rule 140[22] of the Rules of Court, as amended by A.M. No.

01-8-10-SC, gross ignorance of the law is a serious charge,[23]
punishable by a fine of more than P20,000.00, but not exceeding
P40,000.00, suspension from office without salary and other
benefits for more than three but not exceeding six months, or
dismissal from the service.[24]

In Tadlip v. Atty. Borres, Jr., the respondent-lawyer and provincial

adjudicator, found guilty of gross ignorance of the law, was
suspended from the practice of law for six months. Additionally, in
parallel cases,[25] a judge found guilty of gross ignorance of the law
was meted the penalty of suspension for six months.

Here, the IBP Board of Governors recommended that the

respondent be suspended from the practice of law for six months
with a warning that a repetition of the same or similar incident
would be dealt with more severe penalty. We adopt the foregoing
recommendation.

This Court notes that the IBP Board of Governors had previously
recommended the respondent’s suspension from the practice of law
for three years in A.C. No. 7314, entitled “Mary Ann T. Flores v.
Atty. Jovencio Ll. Mayor, Jr.”. This case, however, is still pending.

It cannot be gainsaid that since public office is a public trust, the

ethical conduct demanded upon lawyers in the government service
is more exacting than the standards for those in private practice.
Lawyers in the government service are subject to constant public
scrutiny under norms of public accountability. They also bear the
heavy burden of having to put aside their private interest in favor
of the interest of the public; their private activities should not
interfere with the discharge of their official functions.[26]

At this point, the respondent should be reminded of our exhortation

in Republic of the Philippines v. Judge Caguioa,[27] thus:
Ignorance of the law is the mainspring of injustice. Judges are called
upon to exhibit more than just a cursory acquaintance with statutes
and procedural rules. Basic rules should be at the palm of their
hands. Their inexcusable failure to observe basic laws and rules will
render them administratively liable. Where the law involved is simple
and elementary, lack of conversance with it constitutes gross
ignorance of the law. “Verily, for transgressing the elementary
jurisdictional limits of his court, respondent should be
administratively liable for gross ignorance of the law.”

“When the inefficiency springs from a failure to consider so basic and

elemental a rule, a law or a principle in the discharge of his functions,
a judge is either too incompetent and undeserving of the position
and title he holds or he is too vicious that the oversight or omission
was deliberately done in bad faith and in grave abuse of judicial
authority.”[28] (citations omitted) cralaw

WHEREFORE, finding respondent Atty. Jovencio Ll. Mayor, Jr. guilty

of gross ignorance of the law in violation of his lawyer’s oath and of
the Code of Professional Responsibility, the Court resolved to
SUSPEND respondent from the practice of law for a period of six (6)
months, with a WARNING that commission of the same or similar
offense in the future will result in the imposition of a more severe
penalty.

Let copies of this Resolution be furnished the IBP, as well as the

Office of the Bar Confidant and the Court Administrator who shall
circulate it to all courts for their information and guidance and
likewise be entered in the record of the respondent as attorney.

SO ORDERED.

G.R. No. 91980 June 27, 1991

ILAW AT BUKLOD NG MANGGAGAWA (IBM), petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION (First Division), HON.
CARMEN TALUSAN and SAN MIGUEL CORPORATION, respondents.
Banzuela, Flores, Miralles, Raneses, Sy, Taquio & Associates for petitioner.
Jardeleza Law Offices for private respondents.

NARVASA, J.:
The controversy at bar had its origin in the "wage distortions" affecting the
employees of respondent San Miguel Corporation allegedly caused by
Republic Act No. 6727, otherwise known as the Wage Rationalization Act.
Upon the effectivity of the Act on June 5, 1989, the union known as "Ilaw at
Buklod Ng Manggagawa (IBM)" — said to represent 4,500 employees of San
Miguel Corporation, more or less, "working at the various plants, offices, and
warehouses located at the National Capital Region" — presented to the
company a "demand" for correction of the "significant distortion in . . . (the
workers') wages." In that "demand," the Union explicitly invoked Section 4 (d)
of RA 6727 which reads as follows:
xxx xxx xxx
(d) . . .
Where the application of the increases in the wage rates under this Section
results in distortions as defined under existing laws in the wage structure
within an establishment and gives rise to a dispute therein, such dispute shall
first be settled voluntarily between the parties and in the event of a deadlock,
the same shall be finally resolved through compulsory arbitration by the
regional branches of the National Labor Relations Commission (NLRC)
having jurisdiction over the workplace.
It shall be mandatory for the NLRC to conduct continuous hearings and
decide any dispute arising under this Section within twenty (20) calendar days
from the time said dispute is formally submitted to it for arbitration. The
pendency of a dispute arising from a wage distortion shall not in any way
delay the applicability of the increase in the wage rates prescribed under this
Section.
But the Union claims that "demand was ignored:1
The . . . COMPANY ignored said demand by offering a measly across-the-
board wage increase of P7.00 per day, per employee, as against the proposal
of the UNION of P25.00 per day, per employee. Later, the UNION reduced its
proposal to P15.00 per day, per employee by way of amicable settlement.
When the . . . COMPANY rejected the reduced proposal of the UNION the
members thereof, on their own accord, refused to render overtime services,
most especially at the Beer Bottling Plants at Polo, starting October 16, 1989.
In this connection, the workers involved issues a joint notice reading as
follows:2
SAMA-SAMANG PAHAYAG: KAMING ARAWANG MANGGAGAWA NG
POLO BREWERY PAWANG KASAPI NG ILAW AT BUKLOD NG
MANGGAGAWA (IBM) AY NAGKAISANG NAGPASYA NA IPATUPAD
MUNA ANG EIGHT HOURS WORK SHIFT PANSAMANTALA HABANG
HINDI IPINATUTUPAD NG SMC MANAGEMENT ANG TAMANG WAGE
DISTORTION.
The Union's position (set out in the petition subsequently filed in this Court,
infra) was that the workers' refuse "to work beyond eight (8) hours everyday
starting October 16, 1989" as a legitimate means of compelling SMC to
correct "the distortion in their wages brought about by the implementation of
the said laws (R.A. 6640 and R.A. 6727) to newly-hired employees.3 That
decision to observe the "eight hours work shift" was implemented on October
16, 1989 by "some 800 daily-paid workers at the Polo Plant's production line
(of San Miguel Corporation [hereafter, simply SMC]) joined by others at
statistical quality control and warehouse, all members of . . . IBM . . . "4 There
ensued thereby a change in the work schedule which had been observed by
daily-paid workers at the Polo Plant for the past five (5) years, i.e., "ten (10)
hours for the first shift and ten (10) to fourteen (14) hours for the second shift,
from Mondays to Fridays . . ; (and on) Saturdays, . . eight (8) hours for both
shifts" — a work schedule which, SMC says, the workers had "welcomed,
and encouraged" because the automatic overtime built into the schedule
"gave them a steady source of extra-income," and pursuant to which it (SMC)
"planned its production targets and budgets.5
This abandonment of the long-standing schedule of work and the reversion to
the eight-hour shift apparently caused substantial losses to SMC. Its claim is
that there ensued "from 16 October 1989 to 30 November 1989 alone . . work
disruption and lower efficiency . . (resulting in turn, in) lost production of
2,004,105 cases of beer . . ; that (i)n "money terms, SMC lost P174,657,598
in sales and P48,904,311 in revenues . . (and the) Government lost excise
tax revenue of P42 million, computed at the rate of P21 per case collectible at
the plant.6 These losses occurred despite such measures taken by SMC as
organizing "a third shift composed of regular employees and some
contractuals," and appeals "to the Union members, through letters and
memoranda and dialogues with their plant delegates and shop stewards," to
adhere to the existing work schedule.
Thereafter, on October 18, 1989, SMC filed with the Arbitration Branch of the
National Labor Relations Commission a complaint against the Union and its
members "to declare the strike or slowdown illegal" and to terminate the
employment of the union officers and shop stewards. The complaint was
docketed as NLRC-NCR Case No. 00-10-04917.7
Then on December 8, 1989, on the claim that its action in the Arbitration
Branch had as yet "yielded no relief," SMC filed another complaint against the
Union and members thereof, this time directly with the National labor
Relations Commission, "to enjoin and restrain illegal slowdown and for
damages, with prayer for the issuance of a cease-and-desist and temporary
restraining order.8 Before acting on the application for restraining order, the
NLRC's First Division first directed SMC to present evidence in support of the
application before a commissioner, Labor Arbiter Carmen Talusan. On
December 19, 1989, said First Division promulgated a Resolution on the
basis of "the allegations of the petitioner (SMC) and the evidence adduced ex
parte in support of their petition." The Resolution —
1) authorized the issuance of "a Temporary Restraining Order for a period of
twenty (20) days . . upon . . a cash or surety bond in the amount of
P50,000.00 . . . DIRECTING the respondents to CEASE and DESIST from
further committing the acts complained about particularly their not complying
with the work schedule established and implemented by the company through
the years or at the least since 1984, which schedule appears to have been
adhered to by the respondents until October 16, 1989 . . .;
2) set the incident on injunction for hearing before Labor Arbiter Carmen
Talusan on 27 December 1989 . . .
The Labor Arbiter accordingly scheduled the incident for hearing on various
dates: December 27 and 29,1989, January 8, 11, 16, and 19, 1990. The first
two settings were cancelled on account of the unavailability of the Union's
counsel. The hearing on January 8, 1990 was postponed also at the instance
of said counsel who declared that the Union refused to recognize the NLRC's
jurisdiction. The hearings set on January 11, 16 and 19, 1990 were taken up
with the cross-examination of SMC's witness on the basis of his affidavit and
supplemental affidavits. The Union thereafter asked the Hearing Officer to
schedule other hearings. SMC objected. The Hearing Officer announced she
would submit a report to the Commission relative to the extension of the
temporary restraining order of December 9, 1989, supra, prayed for by SMC.
Here the matter rested until February 14, 1990, when the Union filed the
petition which commenced the special civil action of certiorari and prohibition
at bar.9
In its petition, the Union asserted that:
1) the "central issue . . is the application of the Eight-Hour Labor Law . . . (i.e.)
(m)ay an employer force an employee to work everyday beyond eight hours a
day?
2) although the work schedule adopted by SMC with built-in automatic
overtime,10 "tremendously increased its production of beer at lesser cost,"
SMC had been paying its workers "wages far below the productivity per
employee," and turning a deaf ear to the Union's demands for wage
increases;
3) the NLRC had issued the temporary restraining order of December 19,
1989 "with indecent haste, based on ex parte evidence of SMC and such an
order had the effect of "forcing the workers to work beyond eight (8) hours a
day, everyday!!
4) the members of the NLRC had no authority to act as Commissioners
because their appointments had not been confirmed by the Commission on
Appointment; and
5) even assuming the contrary, the NLRC, as an essentially appellate body,
had no jurisdiction to act on the plea for injunction in the first instance.
The petition thus prayed:
1) for judgment (a) annulling the Resolution of December 19, 1990; (b)
declaring mandatory the confirmation by the Commission on Appointments of
the appointments of National Labor Relations Commissioners; and (c)
ordering the removal "from the 201 files of employees any and all
memoranda or disciplinary action issued/imposed to the latter by reason of
their refusal to render overtime work;" and
2) pending such judgment restraining(a) the NLR Commissioners "from
discharging their power and authority under R.A. 6715 prior to their re-
appointment and/or confirmation;" as well as (b) Arbiter Talusan and the
Commission from acting on the matter or rendering a decision or issuing a
permanent injunction therein, or otherwise implementing said Resolution of
December 19, 1989.
In traverse of the petition, SMC filed a pleading entitled "Comment with
Motion to Admit Comment as Counter-Petition," in which it contended that:
1) the workers' abandonment of the regular work schedule and their
deliberate and wilful reduction of the Polo plant's production efficiency is a
slowdown, which is an illegal and unprotected concerted activity;
2) against such a slowdown, the NLRC has jurisdiction to issue injunctive
relief in the first instance;
3) indeed, the NLRC has "the positive legal duty and statutory obligation to
enjoin the slowdown complained of and to compel the parties to arbitrate . .,
(and) to effectuate the important national policy of peaceful settlement of
labor disputes through arbitration;" accordingly, said NLRC "had no legal
choice but to issue injunction to enforce the reciprocal no lockout-no
slowdown and mandatory arbitration agreement of the parties;" and
4) the NLRC "gravely abused its discretion when it refused to decide the
application for injunction within the twenty day period of its temporary
restraining order, in violation of its own rules and the repeated decisions of
this . . . Court.
It is SMC's submittal that the coordinated reduction by the Union's members
of the work time theretofore willingly and consistently observed by them,
thereby causing financial losses to the employer in order to compel it to yield
to the demand for correction of "wage distortions," is an illegal and
"unprotected" activity. It is, SMC argues, contrary to the law and to the
collective bargaining agreement between it and the Union. The argument is
correct and will be sustained.
Among the rights guaranteed to employees by the Labor Code is that of
engaging in concerted activities in order to attain their legitimate objectives.
Article 263 of the Labor Code, as amended, declares that in line with "the
policy of the State to encourage free trade unionism and free collective
bargaining, . . (w)orkers shall have the right to engage in concerted activities
for purposes of collective bargaining or for their mutual benefit and
protection." A similar right to engage in concerted activities for mutual benefit
and protection is tacitly and traditionally recognized in respect of employers.
The more common of these concerted activities as far as employees are
concerned are: strikes — the temporary stoppage of work as a result of an
industrial or labor dispute; picketing — the marching to and fro at the
employer's premises, usually accompanied by the display of placards and
other signs making known the facts involved in a labor dispute; and boycotts
— the concerted refusal to patronize an employer's goods or services and to
persuade others to a like refusal. On the other hand, the counterpart activity
that management may licitly undertake is the lockout — the temporary refusal
to furnish work on account of a labor dispute, In this connection, the same
Article 263 provides that the "right of legitimate labor organizations to strike
and picket and of employer to lockout, consistent with the national interest,
shall continue to be recognized and respected." The legality of these activities
is usually dependent on the legality of the purposes sought to be attained and
the means employed therefor.
It goes without saying that these joint or coordinated activities may be
forbidden or restricted by law or contract. In the particular instance of
"distortions of the wage structure within an establishment" resulting from "the
application of any prescribed wage increase by virtue of a law or wage order,"
Section 3 of Republic Act No. 6727 prescribes a specific, detailed and
comprehensive procedure for the correction thereof, thereby implicitly
excluding strikes or lockouts or other concerted activities as modes of
settlement of the issue. The provision11 states that —
. . . the employer and the union shall negotiate to correct the distort-ions. Any
dispute arising from wage distortions shall be resolved through the grievance
procedure under their collective bargaining agreement and, if it remains
unresolved, through voluntary arbitration. Unless otherwise agreed by the
parties in writing, such dispute shall be decided by the voluntary arbitrator or
panel of voluntary arbitrators within ten (10) calendar days from the time said
dispute was referred to voluntary arbitration.
In cases where there are no collective agreements or recognized labor
unions, the employers and workers shall endeavor to correct such distortions.
Any dispute arising therefrom shall be settled through the National
Conciliation and Mediation Board and, if it remains unresolved after ten (10)
calendar days of conciliation, shall be referred to the appropriate branch of
the National Labor Relations Commission (NLRC). It shall be mandatory for
the NLRC to conduct continuous hearings and decide the dispute within
twenty (20) calendar days from the time said dispute is submitted for
compulsory arbitration.
The pendency of a dispute arising from a wage distortion shall not in any way
delay the applicability of any increase in prescribed wage rates pursuant to
the provisions of law or Wage Order.
xxx xxx xxx
The legislative intent that solution of the problem of wage distortions shall be
sought by voluntary negotiation or abitration, and not by strikes, lockouts, or
other concerted activities of the employees or management, is made clear in
the rules implementing RA 6727 issued by the Secretary of Labor and
Employment12 pursuant to the authority granted by Section 13 of the Act.13
Section 16, Chapter I of these implementing rules, after reiterating the policy
that wage distortions be first settled voluntarily by the parties and eventually
by compulsory arbitration, declares that, "Any issue involving wage distortion
shall not be a ground for a strike/lockout."
Moreover, the collective bargaining agreement between the SMC and the
Union, relevant provisions of which are quoted by the former without the
latter's demurring to the accuracy of the quotation,14 also prescribes a similar
eschewal of strikes or other similar or related concerted activities as a mode
of resolving disputes or controversies, generally, said agreement clearly
stating that settlement of "all disputes, disagreements or controversies of any
kind" should be achieved by the stipulated grievance procedure and
ultimately by arbitration. The provisions are as follows:
Section 1. Any and all disputes, disagreements and controversies of any kind
between the COMPANY and the UNION and/or the workers involving or
relating to wages, hours of work, conditions of employment and/or employer-
employee relations arising during the effectivity of this Agreement or any
renewal thereof, shall be settled by arbitration in accordance with the
procedure set out in this Article. No dispute, disagreement or controversy
which may be submitted to the grievance procedure in Article IX shall be
presented for arbitration unless all the steps of the grievance procedure are
exhausted (Article V — Arbitration).
Section 1. The UNION agrees that there shall be no strikes, walkouts,
stoppage or slowdown of work, boycotts, secondary boycotts, refusal to
handle any merchandise, picketing, sit-down strikes of any kind, sympathetic
or general strikes, or any other interference with any of the operations of the
COMPANY during the terms of this agreement (Article VI).
The Union was thus prohibited to declare and hold a strike or otherwise
engage in non-peaceful concerted activities for the settlement of its
controversy with SMC in respect of wage distortions, or for that matter; any
other issue "involving or relating to wages, hours of work, conditions of
employment and/or employer-employee relations." The partial strike or
concerted refusal by the Union members to follow the five-year-old work
schedule which they had therefore been observing, resorted to as a means of
coercing correction of "wage distortions," was therefore forbidden by law and
contract and, on this account, illegal.
Awareness by the Union of the proscribed character of its members'
collective activities, is clearly connoted by its attempt to justify those activities
as a means of protesting and obtaining redress against said members
working overtime every day from Monday to Friday (on an average of 12
hours), and every Saturday (on 8 hour shifts),15 rather than as a measure to
bring about rectification of the wage distortions caused by RA 6727 — which
was the real cause of its differences with SMC. By concealing the real cause
of their dispute with management (alleged failure of correction of wage
distortion), and trying to make it appear that the controversy involved
application of the eight-hour labor law, they obviously hoped to remove their
case from the operation of the rules implementing RA 6727 that "Any issue
involving wage distortion shall not be a ground for a strike/lockout." The
stratagem cannot succeed.
In the first place, that it was indeed the wage distortion issue that principally
motivated the Union's partial or limited strike is clear from the facts, The work
schedule (with "built-in overtime") had not been forced upon the workers; it
had been agreed upon between SMC and its workers at the Polo Plant and
indeed, had been religiously followed with mutually beneficial results for the
past five (5) years. Hence, it could not be considered a matter of such great
prejudice to the workers as to give rise to a controversy between them and
management. Furthermore, the workers never asked, nor were there ever
any negotiations at their instance, for a change in that work schedule prior to
the strike. What really bothered them, and was in fact the subject of talks
between their representatives and management, was the "wage distortion"
question, a fact made even more apparent by the joint notice circulated by
them prior to the strike, i.e., that they would adopt the eight-hour work shift in
the meantime pending correction by management of the wage distortion
(IPATUPAD MUNA ANG EIGHT HOURS WORK SHIFT PANSAMANTALA
HABANG HINDI IPINATUTUPAD NG SMC MANAGEMENT ANG TAMANG
WAGE DISTORTION).
In the second place, even if there were no such legal prohibition, and even
assuming the controversy really did not involve the wage distortions caused
by RA 6727, the concerted activity in question would still be illicit because
contrary to the workers' explicit contractual commitment "that there shall be
no strikes, walkouts, stoppage or slowdown of work, boycotts, secondary
boycotts, refusal to handle any merchandise, picketing, sit-down strikes of
any kind, sympathetic or general strikes, or any other interference with any of
the operations of the COMPANY during the term of . . . (their collective
bargaining) agreement.16
What has just been said makes unnecessary resolution of SMC's argument
that the workers' concerted refusal to adhere to the work schedule in force for
the last several years, is a slowdown, an inherently illegal activity essentially
illegal even in the absence of a no-strike clause in a collective bargaining
contract, or statute or rule. The Court is in substantial agreement with the
petitioner's concept of a slowdown as a "strike on the installment plan;" as a
wilfull reduction in the rate of work by concerted action of workers for the
purpose of restricting the output of the employer, in relation to a labor dispute;
as an activity by which workers, without a complete stoppage of work, retard
production or their performance of duties and functions to compel
management to grant their demands.17 The Court also agrees that such a
slowdown is generally condemned as inherently illicit and unjustifiable,
because while the employees "continue to work and remain at their positions
and accept the wages paid to them," they at the same time "select what part
of their allotted tasks they care to perform of their own volition or refuse
openly or secretly, to the employer's damage, to do other work;" in other
words, they "work on their own terms.18 But whether or not the workers'
activity in question — their concerted adoption of a different work schedule
than that prescribed by management and adhered to for several years —
constitutes a slowdown need not, as already stated, be gone into. Suffice it to
say that activity is contrary to the law, RA 6727, and the parties' collective
bargaining agreement.
The Union's claim that the restraining order is void because issued by
Commissioners whose appointments had not been duly confirmed by the
Commission on Appointments should be as it is hereby given short shift, for,
as the Solicitor General points out, it is an admitted fact that the members of
the respondent Commission were actually appointed by the President of the
Philippines on November 18, 1989; there is no evidence whatever in support
of the Union's bare allegation that the appointments of said members had not
been confirmed; and the familiar presumption of regularity in appointment and
in performance of official duty exists in their favor.19
Also untenable is the Union's other argument that the respondent NLRC
Division had no jurisdiction to issue the temporary restraining order or
otherwise grant the preliminary injunction prayed for by SMC and that, even
assuming the contrary, the restraining order had been improperly issued. The
Court finds that the respondent Commission had acted entirely in accord with
applicable provisions of the Labor Code.
Article 254 of the Code provides that "No temporary or permanent injunction
or restraining order in any case involving or growing out of labor disputes
shall be issued by any court or other entity, except as otherwise provided in
Articles 218 and 264 . . ." Article 264 lists down specific "prohibited activities"
which may be forbidden or stopped by a restraining order or injunction. Article
218 inter alia enumerates the powers of the National Labor Relations
Commission and lays down the conditions under which a restraining order or
preliminary injunction may issue, and the procedure to be followed in issuing
the same.
Among the powers expressly conferred on the Commission by Article 218 is
the power to "enjoin or restrain any actual or threatened commission of any or
all prohibited or unlawful acts or to require the performance of a particular act
in any labor dispute which, if not restrained or performed forthwith, may cause
grave or irreparable damage to any party or render ineffectual any decision in
favor of such party . . ."
As a rule such restraining orders or injunctions do not issue ex parte, but only
after compliance with the following requisites, to wit:
a) a hearing held "after due and personal notice thereof has been served, in
such manner as the Commission shall direct, to all known persons against
whom relief is sought, and also to the Chief Executive and other public
officials of the province or city within which the unlawful acts have been
threatened or committed charged with the duty to protect complainant's
property;"
b) reception at the hearing of "testimony of witnesses, with opportunity for
cross-examination, in support of the allegations of a complaint made under
oath," as well as "testimony in opposition thereto, if offered . . .;
c) a finding of fact by the Commission, to the effect:
(1) That prohibited or unlawful acts have been threatened and will be
committed and will be continued unless restrained, but no injunction or
temporary restraining order shall be issued on account of any threat,
prohibited or unlawful act, except against the person or persons, association
or organization making the threat or committing the prohibited or unlawful act
or actually authorizing or ratifying the same after actual knowledge thereof;
(2) That substantial and irreparable injury to complainant's property will
follow;
(3) That as to each item of relief to be granted, greater injury will be inflicted
upon complainant by the denial of relief than will be inflicted upon defendants
by the granting of relief;
(4) That complainant has no adequate remedy at law; and
(5) That the public officers charged with the duty to protect complainant's
property are unable or unwilling to furnish adequate protection.
However, a temporary restraining order may be issued ex parte under the
following conditions:
a) the complainant "shall also allege that, unless a temporary restraining
order shall be issued without notice, a substantial and irreparable injury to
complainant's property will be unavoidable;
b) there is "testimony under oath, sufficient, if sustained, to justify the
Commission in issuing a temporary injunction upon hearing after notice;"
c) the "complainant shall first file an undertaking with adequate security in an
amount to be fixed by the Commission sufficient to recompense those
enjoined for any loss, expense or damage caused by the improvident or
erroneous issuance of such order or injunction, including all reasonable costs,
together with a reasonable attorney's fee, and expense of defense against
the order or against the granting of any injunctive relief sought in the same
proceeding and subsequently denied by the Commission;" and
d) the "temporary restraining order shall be effective for no longer than twenty
(20) days and shall become void at the expiration of said twenty (20) days.
The reception of evidence "for the application of a writ of injunction may be
delegated by the Commission to any of its Labor Arbiters who shall conduct
such hearings in such places as he may determine to be accessible to the
parties and their witnesses and shall submit thereafter his recommendation to
the Commission."
The record reveals that the Commission exercised the power directly and
plainly granted to it by sub-paragraph (e) Article 217 in relation to Article 254
of the Code, and that it faithfully observed the procedure and complied with
the conditions for the exercise of that power prescribed in said sub-paragraph
(e) It acted on SMC's application for immediate issuance of a temporary
restraining order ex parte on the ground that substantial and irreparable injury
to its property would transpire before the matter could be heard on notice; it,
however, first direct SMC Labor Arbiter Carmen Talusan to receive SMC's
testimonial evidence in support of the application and thereafter submit her
recommendation thereon; it found SMC's evidence adequate and issued the
temporary restraining order upon bond. No irregularity may thus be imputed
1âwphi1

to the respondent Commission in the issuance of that order.

In any event, the temporary restraining order had a lifetime of only twenty (20)
days and became void ipso facto at the expired ration of that period.
In view of the foregoing factual and legal considerations, all irresistibly leading
to the basic conclusion that the concerted acts of the members of petitioner
Union in question are violative of the law and their formal agreement with the
employer, the latter's submittal, in its counter-petition that there was, in the
premises, a "legal duty and obligation" on the part of the respondent
Commission "to enjoin the unlawful and prohibited acts and omissions of
petitioner IBM and the workers complained of,20 — a proposition with which, it
must be said, the Office of the Solicitor General concurs, asserting that the
"failure of the respondent commission to resolve the application for a writ of
injunction is an abuse of discretion especially in the light of the fact that the
restraining order it earlier issued had already expired"21 — must perforce be
conceded.
WHEREFORE, the petition is DENIED, the counter-petition is GRANTED,
and the case is REMANDED to the respondent Commission (First Division)
with instructions to immediately take such action thereon as is indicated by
and is otherwise in accord with, the findings and conclusions herein set forth.
Costs against petitioner.
IT IS SO ORDERED.

SECOND DIVISION

[G.R. No. 105090. September 16, 1993.]

BISIG NG MANGGAGAWA SA CONCRETE AGGREGATES, INC.,

(BIMCAI) FSM, AND ITS UNION OFFICERS & MEMBERS, ETC.,
Petitioners, v. NATIONAL LABOR RELATIONS COMMISSION,
LABOR ARBITER ERNILO V. PEÑALOSA AND CONCRETE
AGGREGATES CORP., Respondents.

Jose P. Espinas for Petitioner.

Rayala, Estrada & Associate Law Offices for Private

Respondent.

DECISION

PUNO, J.:
 The restoration of the right to strike is the most valuable gain of
labor after the EDSA revolution. It is the employees’ sole weapon
which can effectively protect their basic rights especially in a
society where the levers of powers are nearly monopolized by the
propertied few or their franchisees. In recognition of its importance,
our Constitution has accorded the right to strike a distinct status
while our laws have assured that its rightful exercise will not be
negated by the issuance of unnecessary injunctions. The impugned
Order of the public respondents in the case at bar infringes
petitioners’ right to strike and hence must be struck down.

The labor conflict between the parties broke out in the open when
the petitioner union 1 struck on April 6, 1992 protesting issues
ranging from unfair labor practices and union busting allegedly
committed by the private Respondent. 2 The union picketed the
premises of the private respondent at Bagumbayan and Longos in
Quezon City; Angono and Antipolo in Rizal; San Fernando,
Pampanga and San Pedro, Laguna.

The strike hurt the private Respondent. On April 8, 1992, it filed

with the NLRC a petition for injunction 3 to stop the strike which it
denounced as illegal. It alleged:chanrob1es virtual 1aw library

x x x

"13. On April 6, 1992, at around 7:00 P.M., respondents led by its

officers and some members staged a wild-cat strike, without a valid
notice of strike, nor observing cooling-off period, and made even
during the pendency of a preventive mediation proceedings which
was still scheduled for April 10, 1992;

"14. And during the said wild-cat strike, respondents have set-up
makeshifts, tents, banners and streamers and other man-made
obstructions at the main plant and offices of petitioner which
effectively impeding, as in fact still effectively impeding the ingress
and egress of persons who have lawful business with the petitioner;

"15. Furthermore, respondents have resorted, as in fact still

resorting to, unlawful and illegal acts including among others
threats, intimidations and coercions against persons who have
lawful business with the petitioner and the non-striking employees
who wish to return to work;

"16. Without complying with the legal requirements for a valid

strike, respondents’ staging of the said ‘wild-cat strike’, is by law
considered as illegal or unlawful act which must be enjoined;

"17. As a direct result of the aforesaid unlawful and illegal acts of

the respondents, petitioner which has on-going projects for the
government and other private entities which require completion on
and agreed schedule, is at great and imminent danger to suffer
substantial damages and injury, which if not urgently redressed,
will inevitably become irreparable;

"18. Said prohibited and unlawful acts have been threatened and
will continuously be committed unless the injunction or temporary
restraining order be issued against the respondents; (pp. 2-5,
Records).

x x x

"23. The injury and damages to the government of Republic of the

Philippines, the petitioner and other persons are unavoidable, so
much so that the issuance of a Temporary Restraining Order
without notice becomes imperative, as the police officers or agents
of authority called upon to enforce the right to ingress and egress
are unable to do so; (p. 6, ibid)" .

The petition was set for hearing on April 13, 1992 at 3 p.m. The
union, however, claimed that it was not furnished a copy of the
petition. Allegedly, the company misrepresented its address to be
at Rm. 205-6 Herald Bldg., Muralla St., Intramuros, Manila.

On April 13, 1992, the NLRC heard the evidence of the company
alone. The ex parte hearing started at 2:30 p.m., where testimonial
and documentary evidence were presented. 4 Some thirty (30)
minutes later, an Ocular Inspection Report was submitted by an
unnamed NLRC representative 5 which reads: jgc:chanrobles.com.ph

"OCULAR INSPECTION REPORT

Authorization dated April 13, 1992 was issued to the effect of
directing the undersigned to conduct an ocular inspection of the
premises of the petitioner located at Bagumbayan, Quezon City.

The inspection was conducted immediately upon receipt hereof.

OBSERVATION

The passage was obstructed with pieces of rock, an old ladder,

pieces of wood and other hard objects that gave rise to a strong
indication that the passage to and from the premises was not free.
The barricades and obstruction were put up fifty (50) meters or less
away from the main gate.

The business operation was completely paralized (sic) as no person

was noticed inside the company compound. No persons and/or
vehicles were seen entering and leaving the premises. Ingress to
and engress from the company is presumed to be not free." cralaw virtua1aw library

Before the day was over, the respondent NLRC (First Division)
issued a temporary restraining order against the union, viz:jgc:chanrobles.com.ph

". . . RESOLVED, to issue a Temporary Restraining Order valid for

twenty (20) days, subject to petitioner’s posting of a cash or surety
bond of Twenty Thousand (P20,000.00) Pesos conditioned to
recompense respondents for any loss, expense or damage they
may suffer in the event it is eventually found out that petitioner is
not entitled to the relief sought and herein granted, DIRECTING: a)
the respondents, their agents and symphatizers to remove (subject
to their right to conduct a lawful picket) the man-made
barricades/obstructions complained of and to direct from further
preventing and/or impeding the free ingress to and egress from
petitioner’s main plant and office premises of its employees,
officials, vehicles, customers or any party who may want to
transact business thereat through the use of any obstructive means
prohibited by law; b) any officer from the Legal Division of this
Commission to ensure compliance of the foregoing restraining order
and where necessary, to enlist in the implementation of this Order,
as deputized enforcement officers, the assistance of peace officers
of this government that has jurisdiction over the strike areas; c)
Labor Arbiter Ernilo V. Penalosa to immediately set this case for
further hearing with the aim of affording respondents enough
opportunity to contest/oppose the issuance of
temporary/permanent injunction prayed for in the petition and to
submit a report to this Commission within ten (10) days from
termination of said hearing" .

No copy of this Order was furnished the union. The union learned of
the Order only when it was posted on April 15, 1992 at the
premises of the company. On April 21, 1992, it filed its
Opposition/Answer to the petition for Injunction. Among others, it
alleged:chanrob1es virtual 1aw library

x x x

"9. The allegation in paragraph 13 of an alleged illegal strike for the

reasons stated therein is denied. It is also added that the question
of strike legality is outside the original jurisdiction of the NLRC
except if the labor dispute has been certified to it for compulsory
arbitration. Hence, not only is paragraph 13 denied, denial is made
likewise of paragraph 16 which asks that the strike must be
enjoined. Paragraph 16 is irrelevant to the cause of action in
injunction because only the illegal or unlawful acts maybe enjoined.
The strike itself cannot be enjoined unless certified by the
honorable Secretary of Labor to the NLRC for compulsory
arbitration.

"9. Paragraphs 14, 15, 17, 18, and 19 of the allegations supporting
the cause of action are also denied for being self-serving and
premature.

"10. Respondents also deny the allegation in paragraph 20 as the

public officers charged with the duty to protect the petitioner’s
property are able and willing to furnish adequate protection as
shown by the fact that when the temporary restraining order was
served, the police and other law enforcement agency personnel
came immediately to respond and enforced the order peacefully" .

On April 24, 1992, the union also filed its own Petition for
Injunction to enjoin the company "from asking the aid of the police
and the military officer in escorting scabs to enter the struck
establishment." cralaw virtua1aw library
The records show that the case was heard on April 24 and 30, May
4 and 5, 1992 by respondent Labor Arbiter Enrilo Peñalosa. 6 On
April 30, 1992, the company filed a Motion for the Immediate
Issuance of Preliminary Injunction wherein it alleged: jgc:chanrobles.com.ph

"x x x

"7. In the meantime, the respondents are still committing illegal

acts, by resorting to grave threats, intimidation against the non-
striking employees and persons with lawful transactions with the
company since April 20, 1992, continuously up to this time, either
by actual threats and intimidation whenever these persons attempt
to report to work or transact business with the company, or by
calling at their houses or places of residence, and then and there
coerce not to report for work on pain of bodily harm; As proof
thereof, petitioner attaches the affidavit of Atty. Elmer Jolo,
Augusto Bautista, Ronnie Mercado, among others, as Annexes "A",
"B" & "C" and made integral parts thereof.

"8. For these reasons, said workers and persons are constrained to
refrain from reporting for work or from transacting business with
the company;

"9. Finally, no less than the president of the Union, supported by

the leaders of the strikers, threatened that upon the expiration of
the validity of the temporary restraining order, they will
‘sisimentuhin namin ang gates ng Concrete Aggregates na kahit ipis
ay hindi makakapasok at makakalabas’ (’We will cement the gates
of the Concrete Aggregates that even cockroaches could not pass
through’);"

The union got wind of the motion only on May 4, 1992. The next
day, May 5, 1992, it opposed the motion, alleging:jgc:chanrobles.com.ph

"x x x

"They were never furnished by the petitioner with a copy of the

original petition for injunction filed on April 8, 1992 because as
seen from the petition, petitioner addressed the respondents at Rm.
205-206 Herald Bldg., Muralla St., Manila as stated in paragraph 2
of the said petition and they came to know only of the same when
Commission issued a temporary restraining order dated April 15,
1992 which was served to them at the picket line on April 15, 1992
and thus they opposed the same on April 20, 1992 (pp. 99-100,
Records).

". . . The suspicion is that same is deliberate in order for the union
not to be able to immediately oppose the petition praying for a
temporary restraining order and so petitioner was scot-free when it
presented ex-parte evidence. The motion for the immediate
issuance of a preliminary injunction foisted upon the Honorable
Commission with affidavits of employees debunked by cross-
examination and officers of the company making fantastic claims is
an attempt to have lightning strike twice at the same place. We
hope this Honorable Commission is not fooled and therefore we
beseech it to examine carefully the pleadings and the transcript on
this question of threat or prohibited acts.

x x x

"The allegation of damages if no injunction is secured is therefore

premature and irrelevant in this proceedings because there is no
proof that the strike is illegal. For if the strike is legal then both
sides must bear their own losses in an economic contest: the
company - loss of income; the workers — loss of wages. These are
the stakes in an economic dispute. The desperate company posture
to enjoin even the strike itself is shown by its letter to the
Secretary of Labor dated April 6, 1992, a copy of which is hereto
attached as Annex "A." The Secretary of Labor has not yet acted on
this request. The company believes probably that an injunction
petition would substitute the provision of Art. 263 of the Labor
Code."cralaw virtua1aw library

The same day, however, the respondent NLRC issued its disputed
Order 7 granting the company’s motion for preliminary injunction.
It reads: jgc:chanrobles.com.ph

"It appears that despite the issuance of a temporary restraining

order on April 14, 1991, the respondents have not ceased in
committing the illegal acts being enjoined. As shown by petitioner
during the hearings of its main petition for preliminary and/or
permanent injunction, held on the first day of the implementation
of the temporary restraining order on April 20, 1992 and the day
thereafter, Respondents, thru the formation of human blockade,
have prevented the company vehicles and Employees’ Shuttle
Buses from entering the company premises, and through force and
intimidation made the non-striking employees on board the vehicles
and buses to get down: that even the company’s Assistant Manager
for Operations, Mr. Ronnie Mercado, who tried to help the non-
striking employees to enter the company premises was blocked by
the strikers and was even told "wala kaming pakialam sa
restraining order ninyo, basta hindi namin papapasukin para
magtrabaho ang sino mang empleyado ng Concrete Aggregates.
Bubugbugin namin kayo pag kayo nagpilit." He was further told
that "Ikaw Mercado huwag kang mapapel dito baka may mangyari
sa iyo." As a result of the said blockade, threats and intimidation,
more or less 100 non-striking employees now, have not been able
to report for work; moreover, the inability of the company’s Longos
Plant to operate fully had caused it to lose the contracted RMC
Sales of around 10,000 cubic meters worth around P10 million, not
to mention the expected loss in sales for the next three (3) months
at P14 million per month since no customers, regular or
prospective, could transact business with the company. But
foremost of all, it has been shown that no less than the President of
the Union, Ramos Banas, with the support of the leaders of the
strikers, has threatened that upon the expiration of the validity of
the temporary restraining order on May 5, 1992, they will not only
barricade the gates of the company but even seal them all so that
"even cockcroaches could not pass through.

"While respondents witnesses, who were mentioned in the

testimonies/affidavits of petitioner’s witnesses, tried to deny the
illegal acts imputed against them, the fact remains undisputed that
when the convoy of the company cars and Employees Shuttle Buses
with reporting non-striking employees on board were about to enter
the compound of the company’s Longos Plant in Quezon City, they
were stopped by the respondents on the lame excuse that they
were only to inquire as to who were those on board and that they
asked those who are allegedly non employees of the petitioner to
get down. It has been substantially established that out of the work
force of the Longos Plant, about 100 more or less employees have
not been able to enter the plant premises from April 20, 1991 up to
the present, for fear of bodily harm from the strikers. Likewise, if it
were true, as claimed, that no threats and intimidation were
committed against the company officials who were to report for
work, then there is no reason why the Manager for Operations,
Ronnie Mercado, should be complaining to the police nearby and for
the latter to advise respondents Ramon Banas and Ernest Lascona
behave well. Moreover, there is merit to the claim of petitioner that
even contract workers hired by it who, even before the strike and
up to the present, were assigned to work inside the premises of the
Longos were denied entrance by the strikers for their being alleged
scabs. With this admission regarding the contract worker, there is
reason to believe the truth and veracity of the statement as of
petitioner’s witnesses, especially the reasonable fear that after the
lapse of the twenty (20) days duration of the temporary restraining
order, the respondents-strikers will again resort to barricading the
entrances of petitioner’s plants to prevent anyone from entering the
said plants’ premises.

"On the bases of all the foregoing facts and circumstances, the First
Division of this Commission, after due deliberation hereby
RESOLVED: (pending conclusion of the hearing on petitioner’s main
petition of April 24, 1991), to issue preliminary injunction: a)
enjoining the respondents, their representative and symphatizers, if
any, without prejudice to their right to conduct a peaceful and
lawful picket, from preventing the non-striking employees, officials
of the company and their vehicles, customers and visitors free
ingress to and egress from petitioner’s plant and premises;
directing them to make the ingress to and egress from said
premises free from any and all obstruction at all times; and
requiring them to desist from further threatening and intimidating
at their houses or elsewhere the non-striking employees who up to
now could not report for work and to allow them to report for work
unmolested: b) directing them, despite the union president’s
statement that none of the feared illegal acts will be committed
after the lapse of the temporary restraining order, to refrain from
doing any illegal act which will exacerbate the situation upon the
expiration of the temporary restraining order: c) applying the cash
or surety bond of P20,000.00 posted by petitioner for the
temporary restraining order that will expire on May 5, 1992 as the
case or surety bond for this preliminary injunction: d) deputizing
any officer from the Legal Division of this Commission to effectively
enforce and implement this injunctive order and, if necessary, to
enlist the assistance of the PNP or other peace officers having
jurisdiction over the strike areas in the enforcement and
implementation of this Order.
Let two (2) copies of this injunctive order be posted in two (2)
conspicuous places of each of the strike areas by the Bailiff of this
Commission for the information and proper guidance of all
concerned.

SO ORDERED." cralaw virtua1aw library

The union then filed the instant petition for certiorari and
mandamus raising the following issues: jgc:chanrobles.com.ph

"x x x

"3. Whether or not the respondent NLRC can issue a preliminary

injunction, as it did issue, after the lapse of a twenty day temporary
restraining order without regard to the specific provision of Article
218 (e) of the Labor Code, . . ., considering that in the Order dated
May 5, 1992 (attached as Annex "E" of this petition) there is no
finding of fact by the respondent NLRC in any of the five pages of
the aforesaid Order, to the effect that, as required by law," (4) That
complainant has no adequate remedy at law; and (5) That the
public officers charged with the duty to protect complainants
property are unable or unwilling to furnish adequate protection.

"4. Whether or not public respondent NLRC and Labor Arbiter have
unlawfully neglected the performance of an act which the law
enjoins as a duty resulting from office considering that after
petitioner also filed on April 24, 1992 a petition asking a temporary
restraining order and injunction against the escorting by police
authorities of individuals ‘who seek to replace the strikers in
entering or leaving the premises of a strike area or work in the
place of the strikers and that the police force will keep out of the
picket lines unless actual violence or other criminal acts occur
therein’ as provided by Article 264 (d) of the Labor Code,
considering that the Labor Arbiter reluctantly allowed petitioners to
present their evidence in support of their petition to enjoin the
scabs being escorted by the police; WHILE in contrast, it
continuously set the motion for immediate issuance of preliminary
injunction of private respondents on April 30, 1992, May 4 and 5,
1992 and issued a temporary restraining order in favor of the
respondent corporation in an hour." cralaw virtua1aw library
We ordered the public and private respondents to comment on the
petition. 8 In its 29-page Comment, Solicitor General Raul I. Goco 9
took the position that the petition is impressed with merit. In
contrast, the private respondent company, defended the validity of
the Order dated May 5, 1992 of the NLRC. 10 Similarly, the NLRC
contended that it did not abuse its direction in issuing the disputed
Order. 11

We find for the petitioners.

Strike has been considered the most effective weapon of labor in

protecting the rights of employees to improve the terms and
conditions of their employment. It may be that in highly developed
countries, the significance of strike as a coercive weapon has
shrunk in view of the preference for more peaceful modes of
settling labor disputes. In underdeveloped countries, however,
where the economic crunch continues to enfeeble the already
marginalized working class, the importance of the right to strike
remains undiminished as indeed it has proved many a time as the
only coercive weapon that can correct abuses against labor. It
remains as the great equalizer.

In the Philippine milieu where social justice remains more as a

rhetoric than a reality, labor has vigilantly fought to safeguard the
sanctity of the right to strike. Its struggle to gain the right to strike
has not been easy and effortless. Labor’s early exercise of the right
to strike collided with the laws on rebellion and sedition and sent its
leaders languishing in prisons. The spectre of incarceration did not
spur its leaders to sloth; on the contrary it spiked labor to work for
its legitimization. This effort was enhanced by the flowering of
liberal ideas in the United States which inevitably crossed our
shores. It was enormously boosted by the American occupation of
our country. Hence, on June 17, 1953, Congress gave statutory
recognition to the right to strike when it enacted RA 875, otherwise
known as the Industrial Peace Act. For nearly two (2) decades,
labor enjoyed the right to strike until it was prohibited on
September 12, 1972 upon the declaration of martial law in the
country. The 14-year battle to end martial rule produced many
martyrs and foremost among them were the radicals of the labor
movement. It was not a mere happenstance, therefore, that after
the final battle against martial rule was fought at EDSA in 1986, the
new government treated labor with a favored eye. Among those
chosen by then President Corazon C. Aquino to draft the 1987
Constitution were recognized labor leaders like Eulogio Lerum, Jose
D. Calderon, Blas D. Ople and Jaime S.L. Tadeo. These delegates
helped craft into the 1987 Constitution its Article XIII entitled Social
Justice and Human Rights. For the first time in our constitutional
history, the fundamental law of our land mandated the State to" ..
guarantee the rights of all workers to self-organization, collective
bargaining and negotiations, and peaceful concerted activities,
including the right to strike in accordance with law." 12 This
constitutional imprimatur given to the right to strike constitutes
signal victory for labor. Our Constitutions of 1935 and 1973 did not
accord constitutional status to the right to strike. Even the liberal
US Federal Constitution did not elevate the right to strike to a
constitutional level. With a constitutional matrix, enactment of a
law implementing the right to strike was an inevitability. RA 6715
came into being on March 21, 1989, an intentional replication of RA
875. 13 In light of the genesis of the right to strike, it ought to be
obvious that the right should be read with a libertarian latitude in
favor of labor. In the wise words of Father Joaquin G. Bernas, S.J.,
a distinguished commissioner of the 1987 Constitutional
Commission." . . the constitutional recognition of the right to strike
does serve as a reminder that injunctions, should be reduced to the
barest minimum." 14

In the case at bar, the records will show that the respondent NLRC
failed to comply with the letter and spirit of Article 218 (e), (4) and
(5) of the Labor Code in issuing its Order of May 5, 1992. Article
218 (e) of the Labor Code provides both the procedural and
substantive requirements which must strictly be complied with
before a temporary or permanent injunction can issue in a labor
dispute, viz:jgc:chanrobles.com.ph

"ART. 218. Powers of the Commission. — The Commission shall

have the power and authority: chanrob1es virtual 1aw library

x x x

(e) To enjoin or restrain any actual or threatened commission of

any or all prohibited or unlawful acts or to require the performance
of a particular act in any labor dispute which, if not restrained or
performed forthwith, may cause grave or irreparable damage to
any party or render ineffectual any decision in favor of such party:
Provided, That no temporary or permanent injunction in any case
involving or growing out of a labor dispute as defined in this Code
shall be issued except after hearing the testimony of witnesses,
with opportunity for cross-examination, in support of the
allegations of a complaint made under oath, and testimony in
opposition thereto, if offered, and only after a finding of fact by the
commission, to the effect: jgc:chanrobles.com.ph

"(1) That prohibited or unlawful acts have been threatened and will
be committed and will be continued unless restrained but no
injunction or temporary restraining order shall be issued on account
of any threat, prohibited or unlawful act, except against the person
or persons, association or organization making the threat or
committing the prohibited or unlawful act or actually authorizing or
ratifying the same after actual knowledge thereof;

"(2) That substantial and irreparable injury to complainants

property will follow;

"(3) That as to each item of relief to be granted, greater injury will

be inflicted upon complainant by the denial of relief than will be
inflicted upon defendants by the granting of relief;

"(4) That complainant has no adequate remedy at law; and

"(5) That the public officers charged with the duty to protect
complainants property are unable or unwilling to furnish adequate
protection.

"Such hearing shall be held after due and personal notice thereof
has been served, in such manner as the Commission shall direct, to
all known persons against whom relief is sought, and also to the
Chief Executive and other public officials of the province or city
within which the unlawful have been threatened or committed
charged with the duty to protect complainant’s property: . . ."
(Emphasis ours).

In his Comment, the Solicitor General cited various evidence on

record showing the failure of public respondents to fulfill the
requirements, especially of paragraphs four (4) and five (5) of the
above cited law. We quote with approval the pertinent portions of
the Comment: chanrob1es virtual 1aw library

x x x

"It must be noted that to support the claim of threats, intimidation,

unlawful and prohibited acts, etc. allegedly committed by the union
against the non-striking employees, the company even submitted a
joint affidavit signed by Joselito Concepcion, Renato Trambulo and
Armando Arcos. Said affidavit reads —

‘JOINT AFFIDAVIT

‘We, ARMANDO ARCOS, CESAR NAVARRO and RENATO TRAMBULO

residents of Dasmariñas, Cavite and JOSELITO CONCEPCION of
Binangonan, Rizal all of legal age, Filipino after having been sworn
hereby depose and say: chanrob1es virtual 1aw library

‘That we are contract worker (sic) of CAC under Engr. Mercado;

‘That last April 20, 1992 at around 8:00 A.M. we were denied entry
at the Longos Plant by striking workers particularly Ramon Banas,
Ricardo Manalang, Rodrigo Manalang, Rodrigo Lauihon and Ernesto
Lascona;

‘That the abovenamed persons stopped us at the gate of Longos

Plant, told us to get off the bus, and in threatening manner told us
to leave and vacate the premises otherwise something bad will
happen to us;

‘That because of this unlawful, illegal and felonious acts of the said
persons we were compelled to do something against our will that is
to leave without being able to report for work;

‘That the abovenamed person and the herein complainants are

residents of barangays in different cities and municipalities hence
the matter is not covered by PD 1508;

‘That we are executing this affidavit to charge Ramon Banas,

Ricardo Manalang, Rodrigo Lauihon and Ernesto Lascana with Grave
Coercion.’ (Exh. "I", p. 896, Records) (Italics Supplied).
"However, when presented before the Labor Arbiter, the affiants
themselves controverted the allegations in said joint-affidavit. They
innocently divulged having signed the prepared affidavit without
first reading the same. Likewise, they admitted that they did not
see or hear Banas, Manalang, Lacuna and Lacejon threatened the
group of "non-strikers" including themselves of bodily harm (pp.
13-14, 20-21, 35-37, 46-47, 49-50, 54-61, TSN, April 24, 1992).
They testified, thus —

‘CROSS-EXAMINATION OF JOSELITO CONCEPCION

‘ARBITER PEÑALOSA: chanrob1es virtual 1aw library

The question is . . . who prepared the affidavit? Alam mo raw ba

kung sino ang gumawa ng affidavit na ito?

ATTY. ESPINAS: chanrob1es virtual 1aw library

Sinong gumawa?

ATTY. MACARUBBO: chanrob1es virtual 1aw library

Para sa iyo?

MR. CONCEPCION: chanrob1es virtual 1aw library

Si Attorney po.

(pp. 20, 21, ibid).

‘DIRECT TESTIMONY OF RENATO TRAMBULO

ATTY. MACARUBBO: chanrob1es virtual 1aw library

Mr. Witness, did you sign an affidavit dated April 24, 1992?

MR. TRAMBULO: chanrob1es virtual 1aw library

Yes, Sir.

ATTY. MACARUBBO: chanrob1es virtual 1aw library

Have you read this affidavit?

MR. TRAMBULO: chanrob1es virtual 1aw library

Hindi pa ho.

x x x

ATTY. MACARUBBO: chanrob1es virtual 1aw library

Perhaps, what you meant is . . .

ATTY. ESPINAS: chanrob1es virtual 1aw library

No, no, no, . . . You can ask another question. His answer is —
Before I, signed it but I have not read it yet.

ATTY. MACARUBBO: chanrob1es virtual 1aw library

What do you mean that you have not read this?

MR. TRAMBULO: chanrob1es virtual 1aw library

Sa akin lang po, iyong sinabi sa akin na . . . iyong hinarang kami,

pinababa kami . . . iyon lang po ang alam ko. Wala na po akong
ibang alam.

ATTY. MACARUBBO: chanrob1es virtual 1aw library

Hinarang ka?

MR. TRAMBULO: chanrob1es virtual 1aw library

Hinarang kami, pinababa kami dahil hindi daw kami empleyado sa

kompanya.

ATTY. MACARUBBO: chanrob1es virtual 1aw library

At iyon ang ibig sabihin nito?

MR. TRAMBULO: chanrob1es virtual 1aw library

‘CROSS-EXAMINATION OF RENATO TRAMBULO

ATTY. ESPINAS: chanrob1es virtual 1aw library

What did Lacejon said (sic).

MR. TRAMBULO: chanrob1es virtual 1aw library

Pinababa na lang po kami sa service. Sabi niya, bumaba na kayo

dahil hindi naman kayo empleyado ng Concrete, kaya bumaba na
lang po kami.

(pp. 46-47, 49-50, id).

‘TESTIMONY OF ARMANDO ARCOS: chanrob1es virtual 1aw library

ATTY. ESPINAS: chanrob1es virtual 1aw library

Cross-examination. Sinabi ba ng mga taong ito na kung hindi kayo

bababa, masama ang mangyayari sa inyo? Meron bang sinabing
ganoon?

ATTY. ARCOS: chanrob1es virtual 1aw library

Wala ho.

ATTY. ESPINAS: chanrob1es virtual 1aw library

Dito sa second paragraph which says . . . told you to leave and

vacate the premises otherwise something bad will happen to us.
Kung hindi kayo umalis . . . walang sinabing ganoon?

MR. ARCOS: chanrob1es virtual 1aw library

Wala naman ho.

x x x

ATTY. ESPINAS: chanrob1es virtual 1aw library

Sino ang nagsabi sa inyo na "Hindi naman kayo empleyado,
bumaba na kayo?"

MR. ARCOS: chanrob1es virtual 1aw library

Si Lacejon. Iyong may salamin.

ATTY. ESPINAS: chanrob1es virtual 1aw library

Pero walang sinabi si Lacejon na kung hindi kayo bababa may

masamang mangyayari sa inyo?

MR. ARCOS: chanrob1es virtual 1aw library

Wala naman ho.

(pp. 59-61, id).

Moreover, no less than Mr. Ronnie Mercado, the Assistant Manager

for Operations of the Company, testified that after the issuance of
the ex parte temporary restraining order, the barricade blocking the
gates were removed and people were allowed free ingress and
egress (please see also pp. 70-71, 96, TSN, April 30, 1992). He
stated, thus

‘CROSS-EXAMINATION OF MR. MERCADO

ATTY. ESPINAS: chanrob1es virtual 1aw library

So after the temporary restraining order, were the barricade

removed?

MR. WITNESS: chanrob1es virtual 1aw library

Those blocking the gates, yes.

x x x

ATTY. ESPINAS: chanrob1es virtual 1aw library

But the barricades blocking the gates were already removed.

MR. WITNESS: chanrob1es virtual 1aw library

The barricades blocking the gates were already removed.

(pp. 66-67, TSN, April 30, 1992).

x x x

ATTY. ESPINAS: chanrob1es virtual 1aw library

Let us go to Antipolo. After the restraining order the people were

able to enter?

MR. WITNESS: chanrob1es virtual 1aw library

After the restraining order the people can already enter.

ATTY. ESPINAS: chanrob1es virtual 1aw library

They were escorted by the police?

MR. WITNESS: chanrob1es virtual 1aw library

No, sir.

(P. 75, ibid) (Italics ours).

x x x

ATTY. ESPINAS: chanrob1es virtual 1aw library

O, lahat ng gustong pumasok, makakapasok na ngayon?

MR. WITNESS: chanrob1es virtual 1aw library

Yes, sir.’

(p. 85, ibid).

"Furthermore, Atty. Elmer Jolo, the Personnel Manager joined by
Mr. Mercado, disclosed that the public authorities charged to
protect the company’s properties were neither unwilling or unable
to furnish adequate protection. As a matter of fact, the police
regularly patrolling the area, was never requested assistance. Thus
—

‘CROSS-EXAMINATION OF ATTY. ELMER JOLO

ATTY. ESPINAS: chanrob1es virtual 1aw library

Did you not ask the assistance of the San Pedro policemen on this
matter of obstruction and other similar activities in obstructing the
gates of the plant?

MR. WITNESS: chanrob1es virtual 1aw library

I did not.

ATTY. ESPINAS: chanrob1es virtual 1aw library

Did you not ask the policemen of Angono, Rizal to help you on this
matter again of extracting the trucks which were supposed to
deliver pre-stress material of that day?

MR. WITNESS: chanrob1es virtual 1aw library

Personally I did not because I leave this police matter to my chief

security officer.

ATTY. ESPINAS: chanrob1es virtual 1aw library

Did your chief security officer ask the assistance of the policemen of
Quezon City with respect to the Longos Plant?

MR. WITNESS: chanrob1es virtual 1aw library

That I do not know.

ATTY. Espinas: chanrob1es virtual 1aw library

Did you ask the aid of the policemen at Bagumbayan, Quezon City
to help you regarding the incident of April 6, 1992 at 7:00 p.m.?

MR. WITNESS: chanrob1es virtual 1aw library

I did not personally because I instructed this police matter to my

chief security officer.

ATTY. ESPINAS: chanrob1es virtual 1aw library

Did your chief security officer seek the aid of the policemen?

MR. WITNESS: chanrob1es virtual 1aw library

That I do not know.

(pp. 41-43, TSN, April 30, 1992).

‘CROSS-EXAMINATION OF MR. MERCADO

ATTY. ESPINAS: chanrob1es virtual 1aw library

The policemen are from Quezon city.

MR. WITNESS: chanrob1es virtual 1aw library

I think so, kasi nagpa-patrol sila.

ATTY. ESPINAS: chanrob1es virtual 1aw library

Nagpatrol? They were called by the company?

MR. WITNESS: chanrob1es virtual 1aw library

No, sir, kaya lang parati silang umiikot diyan.

ATTY. ESPINAS: chanrob1es virtual 1aw library

So the policemen were present patrolling?

MR. WITNESS: chanrob1es virtual 1aw library

Paminsan-minsan sumulpot lang.’

(pp. 85-86, id).

The foregoing testimonies of the senior officers of the company are

further buttressed by the admission of one of the laborers, also
presented as witness by the company, who testified that —

‘CROSS-EXAMINATION OF AUGUSTUS BAUTISTA

ATTY. ESPINAS: chanrob1es virtual 1aw library

But they were not bodily stopped from entering after the 21. Were
they?

MR. WITNESS: chanrob1es virtual 1aw library

No.

(p. 124, TSN, April 30, 1992).

x x x

ATTY. ESPINAS: chanrob1es virtual 1aw library

In other words, aside from the police there is a security office

detained?

MR. WITNESS: chanrob1es virtual 1aw library

Yes, we have our own.

ATTY. ESPINAS: chanrob1es virtual 1aw library

And the security officer can request the aid of the policemen?

MR. WITNESS: chanrob1es virtual 1aw library

Yes.’

(pp. 128-129, id).

"Verily, the factual circumstances proven by the evidence show that
there was no concurrence of the five (5) prerequisites mandated by
Art. 218(e) of the Labor Code. Thus there is no justification for the
issuance of the questioned Order of preliminary injunction."cralaw virtua1aw library

The Comments of the private and public respondents did not

dispute the correctness of these documentary and testimonial
evidence.

Moreover, the records reveal the continuing misuse of unfair

strategies to secure ex parte temporary restraining orders against
striking employees. Petitioner union did not receive any copy of
private respondent’s petition for injunction in Case No. 000249-92
filed on April 8, 1992. Its address as alleged by the private
respondent turned out to be "erroneous." 15 Consequently, the
petitioner was denied the right to attend the hearing held on April
13, 1992 while the private respondent enjoyed a field day
presenting its evidence ex parte. On the basis of uncontested
evidence, the public respondent, on the same day April 13, 1992,
temporarily enjoined the petitioner from committing certain alleged
illegal acts. Again, a copy of the Order was sent to the wrong
address of the petitioner. Knowledge of the Order came to the
petitioner only when its striking members read it after it was posted
at the struck areas of the private Respondent.

To be sure, the issuance of an ex parte temporary restraining order

in a labor dispute is not per se prohibited. Its issuance, however,
should be characterized by care and caution for the law requires
that it be clearly justified by considerations of extreme necessity,
i.e., when the commission of unlawful acts is causing substantial
and irreparable injury to company properties and the company is,
for the moment, bereft of an adequate remedy at law. This is as it
ought to be, for imprudently issued temporary restraining orders
can break the back of employees engaged in a legal strike. Often
times, they unduly tilt the balance of a labor warfare in favor of
capital. When that happens, the deleterious effects of a wrongfully
issued, ex parte temporary restraining order on the rights of
striking employees can no longer be repaired for they defy simple
monetization. Moreover, experience shows that ex parte
applications for restraining orders are often based on fabricated
facts and concealed truths. A more becoming sense of fairness,
therefore, demands that such ex parte applications should be more
minutely examined by hearing officers, lest, our constitutional
policy of protecting labor becomes nothing but a synthetic
shibboleth. The immediate need to hear and resolve these ex parte
applications does not provide any excuse to lower our vigilance in
protecting labor against the issuance of indiscriminate injunctions.
Stated otherwise, it behooves hearing officers receiving evidence in
support of ex parte injunctions against employees in strike to take
a more active stance in seeing to it that their right to social justice
is in no way violated despite their absence. This equalizing stance
was not taken in the case at bar by the public respondents.

Nor do we find baseless the allegation by petitioner that the public

respondents have neglected to resolve with reasonable dispatch its
own Petition for Injunction with prayer for a temporary restraining
order dated April 25, 1992. The petition invoked Article 264 (d) of
the Labor Code 16 to enjoin the private respondent from using the
military and police authorities to escort scabs at the struck
establishment. Sadly contrasting is the haste with which public
respondents heard and acted on a similar petition for injunction
filed by the private Respondent. In the case of the private
respondent, its prayer for an ex parte temporary restraining order
was heard on April 13, 1992 and it was granted on the same day.
Its petition for preliminary injunction was filed on April 30, 1992,
and was granted on May 5, 1992. In the case of petitioner, its
petition for injunction was filed on April 24, 1992, and to date, the
records do not reveal whether the public respondent has granted or
denied the same. The disparate treatment is inexplicable
considering that the subject matters of their petition are of similar
importance to the parties and to the public.

IN VIEW WHEREOF, the petition for certiorari and mandamus is

granted. The Order dated May 5, 1992 of the public respondent in
NLRC NCR IC No. 000249-92 is annulled and set aside. The public
respondents are likewise ordered to hear and resolve, with
deliberate speed petitioner’s petition for injunction filed on April 30,
1992.

SO ORDERED.
FIRST DIVISION
G.R. No. 85197 March 18, 1991
NESTLÉ PHILIPPINES, INC., petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, EUGENIA C. NUNEZ,
LIZA T. VILLANUEVA, EMMANUEL S. VILLENA, RUDOLPH C. ARMAS,
RODOLFO M. KUA and RODOLFO A. SOLIDUM, respondents.
Siguion Reyna, Montecillo & Ongsiako for petitioner.
Banzuela, Flores, Miralles, Raneses, Sy, Taquio & Associates for private
respondents.
GRIÑO-AQUINO, J.:
This petition for certiorari seeks a review of the resolutions dated May 28,
1988 and September 1, 1988 of the National Labor Relations Commission
(NLRC) in Injunction Case No. 1582 granting the injunction prayed for by the
private respondents, to hold in abeyance the cancellation of their car loans
and payments of the monthly amortizations thereon pending the resolution of
their complaints for illegal dismissal.
The private respondents were employed by the petitioner either as sales
representatives or medical representatives. By reason of the nature of their
work they were each allowed to avail of the company's car loan policy. Under
that policy, the company advances the purchase price of a car to be paid
back by the employee through monthly deductions from his salary, the
company retaining the ownership of the motor vehicle until it shall have been
fully paid for. All of the private respondents availed of the petitioner's car loan
policy.
On September 14, 1987, private respondents Nuñez, Villanueva, Villena and
Armas were dismissed from the service for having participated in an illegal
strike. On December 26, 1987, respondents Kua and Solidum were also
dismissed for certain irregularities. All the private respondents filed
complaints for illegal dismissal in the Arbitration Branch of the NLRC. The
Labor Arbiter dismissed their complaints and upheld the legality of their
dismissal. They appealed to the NLRC where their appeals are still pending.
In the Notices of Dismissal which they received from Nestlé, the private
respondents had been directed to either settle the remaining balance of the
cost of their respective cars, or return them to the company for proper
disposition.
As they failed and refused to avail of either option, the company filed in the
Regional Trial Court of Makati a civil suit to recover possession of the cars.
The Court issued an Order dated March 7, 1988 directing the Deputy Sheriff
to take the motor vehicles into his custody.
The private respondents sought a temporary restraining order in the NLRC to
stop the company from cancelling their car loans and collecting their monthly
amortizations pending the final resolution of their appeals in the illegal
dismissal case.
On May 27, 1988, the NLRC en banc, issued a resolution granting their
petition for injunction. Its order reads:
Acting on the Urgent Petition for the Issuance of a Temporary Restraining
Order, the Commission sitting en banc after deliberation, Resolved to hold in
abeyance the cancellation of the petitioners' car loans and the payment of the
monthly amortizations thereof pending resolution of their illegal dismissal
cases. (p. 5, Rollo.)
The company filed a motion for reconsideration, but it was denied for
tardiness. Hence, this petition for certiorari alleging that the NLRC acted with
grave abuse of discretion amounting to lack of jurisdiction when it issued a
labor injunction without legal basis and in the absence of any labor dispute
related to the same.
The private respondents, in their comment on the petition, alleged that there
is a labor dispute between the petitioner and the private respondents and that
their default in paying the amortizations for their cars was brought about by
their illegal dismissal from work by the petitioner as punishment for their
participation in the illegal strike of the Union of Filipro Employees of which
they are members. If they had not participated in the strike, they would not
have been dismissed from work and they would not have defaulted in the
payment of their amortizations. Private respondents admitted their civil
obligation to the petitioner.
The Office of the Solicitor General filed a manifestation on June 13, 1989,
stating that "after judicious scrutiny of the records, . . . and in consonance
with the applicable law and jurisprudence on the matter, the Office of the
Solicitor General is convinced that it cannot, without violating the law, sustain
the findings of the National Labor Relations Commission in the case at bar.
So as not to prejudice NLRC's case, the OSG deems it best to refrain from
filing its Comment, even as it begs leave of the Honorable Court to be
excused from further appearing in behalf of the NLRC in this particular case"
(p. 173, Rollo).
Filing its own comment, the NLRC argued that as the illegal dismissal case is
a labor dispute which is still pending resolution before it, "it is clothed with
authority to issue the contested resolutions because under the law, PD 442,
otherwise known as the Labor Code of the Philippines as amended, it is
vested with the authority to resolve labor disputes" (p. 252, Rollo).
The power of the NLRC to issue writs of injunction is found in Article 218 of
the Labor Code, which provides:
Art. 218 Powers of the Commission. — The Commission shall have the
power and authority:
xxx xxx xxx
(e) To enjoin or restrain any actual or threatened commission of any or all
prohibited or unlawful acts or to require the performance of a particular act in
any labor dispute which, if not restrained or performed forthwith, may cause
grave or irreparable damage to any party or render ineffectual any decision in
favor of such party: . . . (Emphasis ours.)
That power, as the statute provides, can only be exercised in a labor dispute.
Paragraph (1) of Article 212 of the Labor Code defines a labor dispute as
follows:
(1) "Labor dispute" includes any controversy or matters concerning terms or
conditions of employment or the association or representation of persons in
negotiating, fixing, maintaining, changing or arranging the terms and
conditions of employment, regardless of whether the disputants stand in the
proximate relation of employer and employee.
Nestlé's demand for payment of the private respondents' amortizations on
their car loans, or, in the alternative, the return of the cars to the company, is
not a labor, but a civil, dispute. It involves debtor-creditor relations, rather
than employee-employer relations.
Petitioner Nestlé Philippines, Inc., correctly pointed out that:
The twin directives contained in petitioner's letters to the private respondents
to either (1) settle the remaining balance on the value of their assigned cars
under the company car plan or return the cars to the company for proper
disposition; or (2) to pay all outstanding accountabilities to the company —
are matters related to the enforcement of a civil obligation founded on
contract. It is not dependent on or related to any labor aspect under which a
labor injunction can be issued. Whether or not the private respondents remain
as employees of the petitioner, there is no escape from their obligation to pay
their outstanding accountabilities to the petitioner; and if they cannot afford it,
to return the cars assigned to them.
As noted, the options given to the private respondents are civil in nature
arising from contractual obligations. There is no labor aspect involved in the
enforcement of those obligations. (p. 7, Rollo.)
The NLRC gravely abused its discretion and exceeded its jurisdiction by
issuing the writ of injunction to stop the company from enforcing the civil
obligation of the private respondents under the car loan agreements and from
protecting its interest in the cars which, by the terms of those agreements,
belong to it (the company) until their purchase price shall have been fully paid
by the employee. The terms of the car loan agreements are not in issue in the
labor case. The rights and obligations of the parties under those contracts
may be enforced by a separate civil action in the regular courts, not in the
NLRC.
WHEREFORE, the petition for certiorari is granted. The questioned resolution
dated May 27, 1988 of the NLRC in Injunction Case No. 1582 (Annex A) is
hereby annulled and set aside. Costs against the private respondents.
SO ORDERED.

A.M. No. RTJ-98-1405 April 12, 2000

MARIA IMELDA MARCOS-MANOTOC and MARIA IRENE VICTORIA
MARCOS-ARANETA, complainants,
vs.
JUDGE EMERITO M. AGCAOILI, respondent.

MENDOZA, J.:
This is a complaint against Judge Emerito M. Agcaoili, assisting judge of the
Regional Trial Court, Branch 15, Naic, Cavite, in connection with the issuance
by him of a temporary restraining order in Civil Case No. NC-96-738, entitled
"Puerto Azul Land, Inc. (PALI) v. Atty. Art Caña, in his capacity as the
Register of Deeds for the province of Cavite; Ma. Imelda Marcos-Manotoc,
Ferdinand R. Marcos, Jr., and Ma. Victoria Irene Marcos-Araneta." The
complaint alleges that, in issuing the temporary restraining order, respondent
judge acted with gross ignorance of the law and with manifest bias and
partiality.
The facts are as follows:
Complainants herein, as heirs of the late President Ferdinand E. Marcos, are
substitute defendants in Civil Case No. 0014, entitled "Republic v. Modesto
Enriquez, Trinidad Diaz Enriquez, Rebecco Panlilio, Erlinda Enriquez-Panlilio,
Leandro Enriquez, Ferdinand E. Marcos, Imelda R. Marcos, Don M. Ferry,
Roman A. Cruz, and Gregorio R. Castillo, et al." for damages, reconveyance,
reversion, or accounting of funds, assets, and other properties allegedly
acquired through abuse of power by the defendants.1
On April 30, 1996, they filed a third-party complaint against Puerto Azul Land,
Inc. (PALI), seeking the cancellation of the latter's titles to several pieces of
real property involved in that case. Complainants alleged that the transfer of
titles of said parcels of land in favor of PALI was void and that the
cancellation of PALI's titles was necessary to protect their rights should the
properties be adjudged lawfully owned by them.2
Based on their third-party complaint, the Marcoses sought to compel the
Register of Deeds of Cavite to annotate notices of lis pendens on TCT Nos.
404201-404204, 404432-404435, 496600, 496573, 496596, 496598, 496590,
496578, 496579, 496586, 496593, 496594, 496582, 496583, 515075,
515076, and 546239, all issued in the name of PALI.3
On June 18, 1996, PALI filed a civil case for injunction and for the issuance of
a writ of preliminary injunction and temporary restraining order against
complainants and the Register of Deeds of Cavite, Atty. Art Caña. The case
was filed with Branch 15 of the Regional Trial Court, Naic, Cavite, a single-
sala court of which respondent is the assisting judge. PALI sought to enjoin
the annotation of the notices of lis pendens on its titles.4
On the same date, respondent judge issued a temporary restraining order
and scheduled the hearing on the application for a preliminary injunction on
June 24, 1996. The order stated that the TRO "is good until such time that the
writ of preliminary injunction shall have been resolved." 5
However, on June 24, 1996, respondent judge did not conduct any hearing
on the application for a writ of preliminary injunction. Instead, he issued an
order extending the effectivity of the TRO for five more days, stating that —
In the meanwhile, the Court has to extend the temporary restraining order
considering that under the circumstances, no summary hearing could be held
earlier than today and considering further the allegations of great damages
and irreparable injury by the petitioner unless the same is issued, the same is
hereby extended for 5 days.6
On June 28, 1996, respondent judge again extended the period for 12 more
days. His order reads:
Considering the pleadings on file, the Temporary Restraining Order earlier
issued and extended, is further extended by another twelve (12) days at
which time by then, the matter of the prayer for the Writ of Preliminary
Injunction shall have been resolved.7
This order, however, was amended by respondent judge, which in effect
further extended the effectivity of the TRO, viz.:
Considering the pleadings on file, the Temporary Restraining Order earlier
issued and extended, is further extended by another twelve (12) days
effective upon actual receipt of the parties. It is understood that the hearing
set by the defendants Marcoses on 05 July 1996 in their Omnibus Motion is
cancelled.
Hearing on the prayer for the Writ of Preliminary Injunction is hereby set on
16 July 1996, at 9:00 a.m.8
Complainants allege that the issuance of the TRO and its subsequent
extensions constitute a blatant violation of Administrative Circular 20-95 of
this Court; that they were not immediately notified of the issuance of the TRO;
that respondent judge did not schedule a summary hearing within 24 hours
after the records were transmitted to him as required by the aforesaid circular;
that the TRO was extended twice without any prior hearing; and that the
extensions of the effectivity of the TRO were tantamount to the issuance of a
writ of preliminary injunction without notice to complainants and without
payment of the requisite bond.9
In his answer, respondent judge claims that the TRO was in effect for a total
of 19 days only and, thus, did not exceed the 20-day limit provided by law. He
explains:
In the case subject of the instant complaint, it should be noted that the first
order was issued on 18 June 1996. This was served the following day, 19
June 1996. Effectively, it had only a lifetime of three (3) working days, that is
on 20, 21 and 24 when it was extended for five (5) days, June 22 and 23
being Saturday and Sunday, when no hearing could be held. So that, on June
28 when it was further extended, it had actually been in effect for only seven
(7) days. The Order of 28 June 1996 was received only on 01 July 1996. This
was further extended by 12 days. During that period from 01 July to 12 July,
your respondent could not hear the petition for preliminary injunction because
he was then at Aparri, Cagayan serving as the regular Presiding Judge of the
Regional Trial Court, Branch 09 sitting at Aparri. His assignment at Naic,
Cavite as Assisting Judge of Branch 15 of the Regional Trial Court of Cavite
covers the last fifteen days of each month only, that was from October 1993
to October 1996.
Even counting the actual effectivity of the temporary restraining orders from
20, 21, 24, 25, 26, 27 and 28 June, and 1, 2, 3, 4, 5, 8, 9, 10, 11 and 12 July
1996, we have only 19 days, certainly not in excess of the maximum 20 day-
period provided by law.10
The Office of the Court Administrator, to which this case had been referred for
investigation, found respondent judge guilty of violating the rules on the
issuance of TROs and recommends that he be fined P10,000.00 with a
warning that repetition of similar acts shall be dealt with more severely.11
We find the recommendation of the OCA to be well taken.
As the TRO in this case was issued in 1996, the applicable rule was Supreme
Court Administrative Circular No. 20-95 which states:
1. Where an application for temporary restraining order (TRO) or writ of
preliminary injunction is included in a complaint or any initiatory pleading filed
with the trial court, such complaint or initiatory pleading shall be raffled only
after notice to the adverse party and in the presence of such party or counsel.
2. The application for a TRO shall be acted upon only after all parties are
heard in a summary hearing conducted within twenty-four (24) hours after the
records are transmitted to the branch selected by raffle. The records shall be
transmitted immediately after raffle.
3. If the matter is of extreme urgency, such that unless a TRO is issued,
grave injustice and irreparable injury will arise, the Executive Judge shall
issue the TRO effective only for seventy-two (72) hours from issuance but
shall immediately summon the parties for conference and immediately raffle
the case in their presence. Thereafter, before the expiry of the seventy-two
hours, the Presiding Judge to whom the case is assigned shall conduct a
summary hearing to determine whether the TRO can be extended for another
period until a hearing in the pending application for preliminary injunction can
be conducted. In no case shall the total period of the TRO exceed twenty (20)
days, including the original seventy-two (72) hours, for the TRO issued by the
Executive Judge.
4. With the exception of the provisions which necessarily involve multiple-sala
stations, these rules shall apply to single-sala stations especially with regard
to immediate notice to all parties of all applications for TRO.
Respondent judge disregarded these rules. First, he did not notify herein
complainants that an application for the issuance of a TRO has been filed.
Complainants only received a copy of PALI's complaint together with
respondent judge's order granting the TRO. Second, respondent judge did
not conduct a summary hearing before granting the TRO. It is noteworthy that
the TRO was issued on the same day that the complaint was filed.
Respondent judge cannot plausibly claim that he issued a 72-hour TRO
under par. 3 of Administrative Circular No. 20-95. His order did not state that
the TRO was effective for 72 hours only. To the contrary, it stated that it "is
good until such time that the writ of preliminary injunction shall have been
resolved." 12 Nor was it stated that the order was being issued because of
extreme urgency to justify the issuance of a 72-hour TRO. Respondent judge
only stated in his order that "the petition appears to be sufficient in form and
substance." 13
Respondent judge committed a flagrant violation of the rules when he
extended the said TRO twice without conducting a summary hearing therefor.
He himself stated in his June 24, 1996 order that "the Court has to extend the
[TRO] considering that under the circumstances, no summary hearing could
be held earlier than today." 14
Finally, respondent judge erroneously computed the number of days the TRO
issued by him was effective. It is settled that the TRO takes effect upon its
issuance and not upon receipt of the parties.15 Hence, in amending his June
28, 1996 order, respondent judge erred in stating that the effectivity of the
TRO was being extended by another 12 days effective upon actual receipt of
the parties.
Moreover, in computing the effectivity of a TRO, Saturdays, Sundays, and
holidays are not excluded. The maximum period of 20 days includes
Saturdays, Sundays, and holidays. Respondent judge, therefore, erroneously
excluded weekends in his computation. He claimed that the TRO issued by
him on June 18, 1996 and received by the parties on June 19, 1996 took
effect on June 20, 1996 until July 12, 1996, excluding Saturdays and
Sundays. In truth, the TRO was made effective for a total of 23 days, in clear
violation of the 20-day rule.
Respondent judge tries to justify his failure to observe the rules on the ground
that his assignment at the RTC, Branch 15, of Naic, Cavite only covers the
last 15 days of each month, because his regular station is at Branch 9 of the
RTC of Aparri, Cagayan. Hence, he claims that he could not have conducted
the summary hearing within July 1-12, 1996.
This contention is without merit. As correctly observed by the OCA:
Respondent's argument that he presides over two stations does not
exculpate him from his responsibilities as magistrate. The civil case was filed
before his Cavite court on 18 June 1996. Since he is supposed to devote his
time at the RTC, Branch 15 of Naic, Cavite for the last fifteen days of each
month, he had ample time to manage his schedule in this station, and to
attend to the cases before him, this one included.16
We have already ruled that failure to abide by Administrative Circular No. 20-
95 constitutes an offense of grave abuse of authority, misconduct, and
conduct prejudicial to the proper administration of justice.17 Indeed, a judge is
presumed to know this Circular. His failure to comply with its clear provisions
constitutes gross ignorance and gross inefficiency.
The OCA also correctly found that respondent judge failed to observe the
Code of Judicial Conduct, particularly Rule 3.01 and Rule 3.05 thereof,
enjoining judges to be faithful to the law and to maintain professional
competence and to dispose of the business of their courts promptly and
within the applicable period. Respondent judge's act of further extending the
effectivity of the TRO twice, knowing fully well that he had not conducted a
summary hearing therefor and that he would not be able to conduct one in the
succeeding days because of his other commitments, suggests partiality to a
party in the case. He thus disregarded the time honored injunction on judges
to be impartial both in fact and in appearance.18
Indeed, this is not the first time Judge Agcaoili was found guilty of gross
ignorance of the law and violation of the Code of Judicial Conduct. In Cortes
v. Agcaoili, 19 he was found guilty of violation of the provisions of the Revised
Forestry Code and the rules on the grant of bail, and acts of impropriety. He
was fined P40,000.00 and suspended for ten days and given a reprimand and
a warning. Earlier, he had been reprimanded and warned in another case20
after being found guilty of negligence in reducing the amount of accused's
bail bond and failing to promptly issue a warrant of arrest.
Respondent judge has proven himself to be unfazed by the previous
penalties and warnings he has received. Several times he has been charged
and twice he has been found guilty, yet he seems undeterred in disregarding
the law which he has pledged to uphold and the Code which he promised to
live by. Because of this, we deem it proper to impose on him the penalty of a
fine in the amount of P20,000.00.
WHEREFORE, the Court finds respondent Judge Emerito M. Agcaoili
GUILTY of gross ignorance of the law, gross inefficiency and manifest bias
and partiality and imposes on him a FINE of Twenty Thousand Pesos
(P20,000.00) with WARNING that repetition of similar acts will be dealt with
more severely. 1âw phi1.nêt

SO ORDERED.
Davide, Jr., C.J., Bellosillo, Melo, Puno, Kapunan, Panganiban, Quisumbing,
Purisima, Pardo, Buena, Gonzaga-Reyes, Ynares-Santiago and De Leon, Jr.,
JJ., concur.
Vitug, J., on official business.

G.R. No. 120567. March 20, 1998

PHILIPPINE AIRLINES, INC., Petitioner, v. , NATIONAL
LABOR RELATIONS COMMISSION, FERDINAND
PINEDA and GODOFREDO CABLING, Respondents.
DECISION
MARTINEZ, J.:
Can the National Labor Relations Commission (NLRC),
even without a complaint for illegal dismissal filed
before the labor arbiter, entertain an action for
injunction and issue such writ enjoining petitioner
Philippine Airlines, Inc. from enforcing its Orders of
dismissal against private respondents, and ordering
petitioner to reinstate the private respondents to their
previous positions?
This is the pivotal issue presented before us in this
petition for certiorari under Rule 65 of the Revised
Rules of Court which seeks the nullification of the
injunctive writ dated April 3,1995 issued by the NLRC
and the Order denying petitioner's motion for
reconsideration on the ground that the said Orders
were issued in excess of jurisdiction.
Private respondents are flight stewards of the
petitioner. Both were dismissed from the service for
their alleged involvement in the April 3, 1993 currency
smuggling in Hong Kong.
Aggrieved by said dismissal, private respondents filed
with the NLRC a petition1 for injunction praying that:
"I. Upon filing of this Petition, a temporary restraining
order be issued, prohibiting respondents (petitioner
herein) from effecting or enforcing the Decision dated
Feb. 22, 1995, or to reinstate petitioners temporarily
while a hearing on the propriety of the issuance of a
writ of preliminary injunction is being undertaken;
"II. After hearing, a writ of preliminary mandatory
injunction be issued ordering respondent to reinstate
petitioners to their former positions pending the
hearing of this case, or, prohibiting respondent from
enforcing its Decision dated February 22,1995 while
this case is pending adjudication;
"III. After hearing, that the writ of preliminary
injunction as to the reliefs sought for be made
permanent, that petitioners be awarded full
backwages, moral damages of PHP 500,000.00 each
and exemplary damages of PHP 500,000.00 each,
attorneys fees equivalent to ten percent of whatever
amount is awarded, and the costs of suit."
On April 3, 1995, the NLRC issued a temporary
mandatory injunction2 enjoining petitioner to cease
and desist from enforcing its February 22, 1995
Memorandum of dismissal. In granting the writ, the
NLRC considered the following facts, to wit:
x x x that almost two (2) years ago, i.e. on April 15,
1993, the petitioners were instructed to attend an
investigation by respondents Security and Fraud
Prevention Sub-Department regarding an April 3,
1993 incident in Hongkong at which Joseph Abaca,
respondents Avionics Mechanic in Hongkong was
intercepted by the Hongkong Airport Police at Gate 05
xxx the ramp area of the Kai Tak International Airport
while xxx about to exit said gate carrying a xxx bag
said to contain some 2.5 million pesos in Philippine
Currencies. That at the Police Station, Mr. Abaca
claimed that he just found said plastic bag at the
Skybed Section of the arrival flight PR300/03 April 93,
where petitioners served as flight stewards of said
flight PR300; x x the petitioners sought a more
detailed account of what this HKG incident is all
about; but instead, the petitioners were
administratively charged, a hearing on which did not
push through until almost two (2) years after, i.e. on
January 20, 1995 xxx where a confrontation between
Mr. Abaca and petitioners herein was compulsorily
arranged by the respondents disciplinary board at
which hearing, Abaca was made to identify petitioners
as co-conspirators; that despite the fact that the
procedure of identification adopted by respondents
Disciplinary Board was anomalous as there was no
one else in the line-up (which could not be called one)
but petitioners xxx Joseph Abaca still had difficulty in
identifying petitioner Pineda as his co-conspirator,
and as to petitioner Cabling, he was implicated and
pointed by Abaca only after respondents Atty.
Cabatuando pressed the former to identify petitioner
Cabling as co-conspirator; that with the hearing reset
to January 25, 1995, Mr. Joseph Abaca finally gave
exculpating statements to the board in that he cleared
petitioners from any participation or from being the
owners of the currencies, and at which hearing Mr.
Joseph Abaca volunteered the information that the
real owner of said money wasone who frequented his
headquarters in Hongkong to which information, the
Disciplinary Board Chairman, Mr. Ismael Khan, opined
forthe need foranother hearing to go to the bottom of
the incident; that from said statement, it appeared
that Mr. Joseph Abaca was the courier, and had
another mechanic in Manila who hid the currency at
the planes skybed for Abaca to retrieve in Hongkong,
which findings of how the money was found was
previously confirmed by Mr. Joseph Abaca himself
when he was first investigated by the Hongkong
authorities; that just as petitioners thought that they
were already fully cleared of the charges, as they no
longer received any summons/notices on the
intended additional hearings mandated by the
Disciplinary Board, they were surprised to receive on
February 23, 1995 xxx a Memorandum dated February
22, 1995 terminating their services for alleged
violation of respondents Code of Discipline effective
immediately; that sometime xxx first week of March,
1995, petitioner Pineda received another
Memorandum from respondent Mr. Juan Paraiso,
advising him of his termination effective February 3,
1995, likewise for violation of respondents Code of
Discipline; x x x"
In support of the issuance of the writ of temporary
injunction, the NLRC adopted the view that: (1)
private respondents cannot be validly dismissed on
the strength of petitioner's Code of Discipline which
was declared illegal by this Court in the case of PAL,
Inc. vs. NLRC, (G.R. No. 85985), promulgated August
13, 1993, for the reason that it was formulated by the
petitioner without the participation of its employees
as required in R.A. 6715, amending Article 211 of the
Labor Code; (2) the whimsical, baseless and
premature dismissals of private respondents which
"caused them grave and irreparable injury" is
enjoinable as private respondents are left "with no
speedy and adequate remedy at law'"except the
issuance of a temporary mandatory injunction; (3) the
NLRC is empowered under Article 218 (e) of the Labor
Code not only to restrain any actual or threatened
commission of any or all prohibited or unlawful acts
but also to require the performance of a particular act
in any labor dispute, which, if not restrained or
performed forthwith, may cause grave or irreparable
damage to any party; and (4) the temporary
mandatory power of the NLRC was recognized by this
Court in the case of Chemo-Technicshe Mfg., Inc.
Employees Union,DFA, et.al. vs. Chemo-Technische
Mfg., Inc. [G.R. No. 107031, January 25,1993].
On May 4,1995, petitioner moved for reconsideration3
arguing that the NLRC erred:
1. in granting a temporary injunction order when it
has no jurisdiction to issue an injunction or
restraining order since this may be issued only under
Article 218 of the Labor Code if the case involves or
arises from labor disputes;
2. in granting a temporary injunction order when the
termination of private respondents have long been
carried out;
3. ..in ordering the reinstatement of private
respondents on the basis of their mere allegations, in
violation of PAL's right to due process;
4. ..in arrogating unto itself management prerogative
to discipline its employees and divesting the labor
arbiter of its original and exclusive jurisdiction over
illegal dismissal cases;
5. ..in suspending the effects of termination when
such action is exclusively within the jurisdiction of the
Secretary of Labor;
6. ..in issuing the temporary injunction in the absence
of any irreparable or substantial injury to both private
respondents.
On May 31,1995, the NLRC denied petitioner's motion
for reconsideration, ruling:
The respondent (now petitioner), for one, cannot
validly claim that we cannot exercise our injunctive
power under Article 218 (e) of the Labor Code on the
pretext that what we have here is not a labor dispute
as long as it concedes that as defined by law, a(l)
Labor Dispute includes any controversy or matter
concerning terms or conditions of employment. . If
security of tenure, which has been breached by
respondent and which, precisely, is sought to be
protected by our temporary mandatory injunction
(the core of controversy in this case) is not a term or
condition of employment, what then is?
xxx
Anent respondents second argument x x x, Article
218 (e) of the Labor Code x x x empowered the
Commission not only to issue a prohibitory
injunction, but a mandatory (to require the
performance) one as well. Besides, as earlier
discussed, we already exercised (on August
23,1991) this temporary mandatory injunctive power
in the case of Chemo-Technische Mfg., Inc.
Employees Union-DFA et.al. vs. Chemo-Technishe
Mfg., Inc., et. al. (supra) and effectively enjoined one
(1) month old dismissals by Chemo-Technische and
that our aforesaid mandatory exercise of injunctive
power, when questioned through a petition for
certiorari, was sustained by the Third Division of the
Supreme court per its Resolution dated January
25,1993.
xxx
Respondents fourth argument that petitioner's
remedy for their dismissals is 'to file an illegal
dismissal case against PAL which cases are within
the original and exclusive jurisdiction of the Labor
Arbiter' is ignorant . In requiring as a condition for
the issuance of a 'temporary or permanent
injunction'- '(4) That complainant has no adequate
remedy at law;' Article 218 (e) of the Labor Code
clearly envisioned adequacy , and not plain
availability of a remedy at law as an alternative bar
to the issuance of an injunction. An illegal dismissal
suit (which takes, on its expeditious side, three (3)
years before it can be disposed of) while available as
a remedy under Article 217 (a) of the Labor Code, is
certainly not an 'adequate; remedy at law. Ergo, it
cannot, as an alternative remedy, bar our exercise of
that injunctive power given us by Article 218 (e) of
the Code.
xxx xxx xxx
Thus, Article 218 (e), as earlier discussed [which
empowers this Commission 'to require the
performance of a particular act' (such as our requiring
respondent 'to cease and desist from enforcing' its
whimsical memoranda of dismissals and 'instead to
reinstate petitioners to their respective position held
prior to their subject dismissals') in 'any labor dispute
which, if not xxx performed forthwith, may cause
grave and irreparable damage to any party'] stands as
the sole 'adequate remedy at law' for petitioners here.
Finally, the respondent, in its sixth argument claims
that even if its acts of dismissing petitioners 'may be
great, still the same is capable of compensation', and
that consequently, 'injunction need not be issued
where adequate compensation at law could be
obtained'. Actually, what respondent PAL argues here
is that we need not interfere in its whimsical
dismissals of petitioners as, after all, it can pay the
latter its backwages. x x x
But just the same, we have to stress that Article 279
does not speak alone of backwages as an obtainable
relief for illegal dismissal; that reinstatement as well
is the concern of said law, enforceable when
necessary, through Article 218 (e) of the Labor Code
(without need of an illegal dismissal suit under Article
217 (a) of the Code) if such whimsical and capricious
act of illegal dismissal will 'cause grave or irreparable
injury to a party'. x x x " 4 cräläwvirtualibräry

Hence, the present recourse.

Generally, injunction is a preservative remedy for the
protection of one's substantive rights or interest. It is
not a cause of action in itself but merely a provisional
remedy, an adjunct to a main suit. It is resorted to
only when there is a pressing necessity to avoid
injurious consequences which cannot be remedied
under any standard of compensation. The application
of the injunctive writ rests upon the existence of an
emergency or of a special reason before the main case
be regularly heard. The essential conditions for
granting such temporary injunctive relief are that the
complaint alleges facts which appear to be sufficient
to constitute a proper basis for injunction and that on
the entire showing from the contending parties, the
injunction is reasonably necessary to protect the legal
rights of the plaintiff pending the litigation.5
Injunction is also a special equitable relief granted
only in cases where there is no plain, adequate and
complete remedy at law.6 cräläwvirtualibräry

In labor cases, Article 218 of the Labor Code

empowers the NLRC-
"(e) To enjoin or restrain any actual or threatened
commission of any or all prohibited or unlawful acts
or to require the performance of a particular act in any
labor dispute which, if not restrained or performed
forthwith, may cause grave or irreparable damage to
any party or render ineffectual any decision in favor
of such party; x x x." (Emphasis Ours)
Complementing the above-quoted provision, Sec. 1,
Rule XI of the New Rules of Procedure of the NLRC,
pertinently provides as follows:
"Section 1. Injunction in Ordinary Labor Dispute.-A
preliminary injunction or a restraining order may be
granted by the Commission through its divisions
pursuant to the provisions of paragraph (e) of Article
218 of the Labor Code, as amended, when it is
established on the bases of the sworn allegations in
the petition that the acts complained of, involving or
arising from any labor dispute before the Commission,
which, if not restrained or performed forthwith, may
cause grave or irreparable damage to any party or
render ineffectual any decision in favor of such party.
xxx xxx xxx
The foregoing ancillary power may be exercised by
the Labor Arbiters only as an incident to the cases
pending before them in order to preserve the rights of
the parties during the pendency of the case, but
excluding labor disputes involving strikes or lockout.
7
(Emphasis Ours)
From the foregoing provisions of law, the power of the
NLRC to issue an injunctive writ originates from "any
labor dispute" upon application by a party thereof,
which application if not granted "may cause grave or
irreparable damage to any party or render
ineffectualany decision in favor of such party."
The term "labor dispute" is defined as "any
controversy or matter concerning terms and
conditions of employment or the association or
representation of persons in negotiating, fixing,
maintaining, changing, or arranging the terms and
conditions of employment regardless of whether or
not the disputants stand in the proximate relation of
employers and employees."8 cräläwvirtualibräry

The term "controversy" is likewise defined as "a

litigated question; adversary proceeding in a court of
law; a civil action or suit, either at law or in equity; a
justiciable dispute."9cräläwvirtualibräry

A "justiciable controversy" is "one involving an active

antagonistic assertion of a legal right on one side and
a denial thereof on the other concerning a real, and
not a mere theoretical question or issue."10 cräläwvirtualibräry

Taking into account the foregoing definitions, it is an

essential requirement that there must first be a labor
dispute between the contending parties before the
labor arbiter. In the present case, there is no labor
dispute between the petitioner and private
respondents as there has yet been no complaint for
illegal dismissal filed with the labor arbiter by the
private respondents against the petitioner.
The petition for injunction directly filed before the
NLRC is in reality an action for illegal dismissal. This
is clear from the allegations in the petition which
prays for: reinstatement of private respondents;
award of full backwages, moral and exemplary
damages; and attorney's fees. As such, the petition
should have been filed with the labor arbiter who has
the original and exclusive jurisdiction to hear and
decide the following cases involving all workers,
whether agricultural or non-agricultural:
(1) Unfair labor practice;
(2) Termination disputes;
(3) If accompanied with a claim for reinstatement,
those cases that workers may file involving wages,
rates of pay, hours of work and other terms and
conditions of employment;
(4) Claims for actual, moral, exemplary and other
forms of damages arising from the employer-
employee relations;
(5) Cases arising from any violation of Article 264 of
this Code, including questions involving the legality of
strikes and lockouts; and
(6) Except claims for employees compensation, social
security, medicare and maternity benefits, all other
claims arising from employer-employee relations,
including those of persons in domestic or household
service, involving an amount exceeding five thousand
pesos (P 5,000.00), whether or not accompanied with
a claim for reinstatement.11 cräläwvirtualibräry

The jurisdiction conferred by the foregoing legal

provision to the labor arbiter is both original and
exclusive, meaning, no other officer or tribunal can
take cognizance of, hear and decide any of the cases
therein enumerated. The only exceptions are where
the Secretary of Labor and Employment or the NLRC
exercises the power of compulsory arbitration, or the
parties agree to submit the matter to voluntary
arbitration pursuant to Article 263 (g) of the Labor
Code, the pertinent portions of which reads:
"(g) When, in his opinion, there exists a labor dispute
causing or likely to cause a strike or lockout in an
industry indispensable to the national interest, the
Secretary of Labor and Employment may assume
jurisdiction over the dispute and decide it or certify
the same to the Commission for compulsory
arbitration. Such assumption or certification shall
have the effect of automatically enjoining the
intended or impending strike or lockout as specified
in the assumption or certification order. If one has
already taken place at the time of assumption or
certification, all striking or locked out employees shall
immediately resume operations and readmit all
workers under the same terms and conditions
prevailing before the strike or lockout. The Secretary
of Labor and Employment or the Commission may
seek the assistance of law enforcement agencies to
ensure compliance with this provision as well as with
such orders as he may issue to enforce the same.
xxx"
On the other hand, the NLRC shall have exclusive
appellate jurisdiction over all cases decided by labor
arbiters as provided in Article 217(b) of the Labor
Code. In short, the jurisdiction of the NLRC in illegal
dismissal cases is appellate in nature and, therefore,
it cannot entertain the private respondents' petition
for injunction which challenges the dismissal orders
of petitioner. Article 218(e) of the Labor Code does
not provide blanket authority to the NLRC or any of its
divisions to issue writs of injunction, considering that
Section 1 of Rule XI of the New Rules of Procedure of
the NLRC makes injunction only an ancillary remedy
in ordinary labor disputes"12 cräläwvirtualibräry

Thus, the NLRC exceeded its jurisdiction when it

issued the assailed Order granting private
respondents' petition for injunction and ordering the
petitioner to reinstate private Respondents.
The argument of the NLRC in its assailed Order that to
file an illegal dismissal suit with the labor arbiter is
not an "adequate" remedy since it takes three (3)
years before it can be disposed of, is patently
erroneous. An "adequate" remedy at law has been
defined as one "that affords relief with reference to
the matter in controversy, and which is appropriate to
the particular circumstances of the case."13 It is a
remedy which is equally beneficial, speedy and
sufficient which will promptly relieve the petitioner
from the injurious effects of the acts complained
of.14
cräläwvirtualibräry

Under the Labor Code, the ordinary and proper

recourse of an illegally dismissed employee is to file a
complaint for illegal dismissal with the labor arbiter.15
In the case at bar, private respondents disregarded
this rule and directly went to the NLRC through a
petition for injunction praying that petitioner be
enjoined from enforcing its dismissal orders. In Lamb
vs. Phipps,16 we ruled that if the remedy is specifically
provided by law, it is presumed to be adequate.
Moreover, the preliminary mandatory injunction
prayed for by the private respondents in their petition
before the NLRC can also be entertained by the labor
arbiter who, as shown earlier, has the ancillary power
to issue preliminary injunctions or restraining orders
as an incident in the cases pending before him in order
to preserve the rights of the parties during the
pendency of the case.17 cräläwvirtualibräry

Furthermore, an examination of private respondents'

petition for injunction reveals that it has no basis
since there is no showing of any urgency or
irreparable injury which the private respondents
might suffer. An injury is considered irreparable if it
is of such constant and frequent recurrence that no
fair and reasonable redress can be had therefor in a
court of law,18 or where there is no standard by which
their amount can be measured with reasonable
accuracy, that is, it is not susceptible of mathematical
computation. It is considered irreparable injury when
it cannot be adequately compensated in damages due
to the nature of the injury itself or the nature of the
right or property injured or when there exists no
certain pecuniary standard for the measurement of
damages.19 cräläwvirtualibräry

In the case at bar, the alleged injury which private

respondents stand to suffer by reason of their alleged
illegal dismissal can be adequately compensated and
therefore, there exists no "irreparable injury," as
defined above which would necessitate the issuance
of the injunction sought for. Article 279 of the Labor
Code provides that an employee who is unjustly
dismissed from employment shall be entitled to
reinstatement, without loss of seniority rights and
other privileges, and to the payment of full
backwages, inclusive of allowances, and to other
benefits or their monetary equivalent computed from
the time his compensation was withheld from him up
to the time of his actual reinstatement.
The ruling of the NLRC that the Supreme Court upheld
its power to issue temporary mandatory injunction
orders in the case of Chemo-Technische Mfg., Inc.
Employees Union-DFA, et.al. vs. Chemo-Technische
Mfg., Inc. et.al., docketed as G.R. No. 107031, is
misleading. As correctly argued by the petitioner, no
such pronouncement was made by this Court in said
case. On January 25,1993, we issued a Minute
Resolution in the subject case stating as follows:
"Considering the allegations contained, the issues
raised and the arguments adduced in the petition for
certiorari , as well as the comments of both public and
private respondents thereon, and the reply of the
petitioners to private respondent's motion to dismiss
the petition, the Court Resolved to DENY the same for
being premature."
It is clear from the above resolution that we did not in
anyway sustain the action of the NLRC in issuing such
temporary mandatory injunction but rather we
dismissed the petition as the NLRC had yet to rule
upon the motion for reconsideration filed by peitioner.
Thus, the minute resolution denying the petition for
being prematurely filed.
Finally, an injunction, as an extraordinary remedy, is
not favored in labor law considering that it generally
has not proved to be an effective means of settling
labor disputes.20 It has been the policy of the State to
encourage the parties to use the non-judicial process
of negotiation and compromise, mediation and
arbitration.21 Thus, injunctions may be issued only in
cases of extreme necessity based on legal grounds
clearly established, after due consultations or hearing
and when all efforts at conciliation are exhausted
which factors, however, are clearly absent in the
present case.
WHEREFORE, the petition is hereby GRANTED. The
assailed Orders dated April 3,1995 and May 31,1995,
issued by the National Labor Relations Commission
(First Division), in NLRC NCR IC No. 000563-95, are
hereby REVERSED and SET ASIDE.
SO ORDERED.

G.R. Nos. 191288 & 191304 March 7, 2012

MANILA ELECTRIC COMPANY, Petitioner,
vs.
JAN CARLO GALA, Respondent.
DECISION
BRION, J.:
We resolve the petition for review on certiorari,1 seeking to annul the decision2
dated August 25, 2009 and the resolution3 dated February 10, 2010 of the
Court of Appeals (CA) rendered in CA-G.R. SP. Nos. 105943 and 106021.
The Antecedents
The facts are summarized below.
On March 2, 2006, respondent Jan Carlo Gala commenced employment with
the petitioner Meralco Electric Company (Meralco) as a probationary lineman.
He was assigned at Meralco’s Valenzuela Sector. He initially served as
member of the crew of Meralco’s Truck No. 1823 supervised by Foreman
Narciso Matis. After one month, he joined the crew of Truck No. 1837 under
the supervision of Foreman Raymundo Zuñiga, Sr.
On July 27, 2006, barely four months on the job, Gala was dismissed for
alleged complicity in pilferages of Meralco’s electrical supplies, particularly,
for the incident which took place on May 25, 2006. On that day, Gala and
other Meralco workers were instructed to replace a worn-out electrical pole at
the Pacheco Subdivision in Valenzuela City. Gala and the other linemen were
directed to join Truck No. 1891, under the supervision of Foreman Nemecio
Hipolito.
When they arrived at the worksite, Gala and the other workers saw that Truck
No. 1837, supervised by Zuñiga, was already there. The linemen of Truck No.
1837 were already at work. Gala and the other members of the crew of Truck
No. 1891 were instructed to help in the digging of a hole for the pole to be
installed.
While the Meralco crew was at work, one Noberto "Bing" Llanes, a non-
Meralco employee, arrived. He appeared to be known to the Meralco foremen
as they were seen conversing with him. Llanes boarded the trucks, without
being stopped, and took out what were later found as electrical supplies.
Aside from Gala, the foremen and the other linemen who were at the worksite
when the pilferage happened were later charged with misconduct and
dishonesty for their involvement in the incident.
Unknown to Gala and the rest of the crew, a Meralco surveillance task force
was monitoring their activities and recording everything with a Sony video
camera. The task force was composed of Joseph Aguilar, Ariel Dola and
Frederick Riano.
Meralco called for an investigation of the incident and asked Gala to explain.
Gala denied involvement in the pilferage, contending that even if his superiors
might have committed a wrongdoing, he had no participation in what they did.
He claimed that: (1) he was at some distance away from the trucks when the
pilferage happened; (2) he did not have an inkling that an illegal activity was
taking place since his supervisors were conversing with Llanes, giving him
the impression that they knew him; (3) he did not call the attention of his
superiors because he was not in a position to do so as he was a mere
lineman; and (4) he was just following instructions in connection with his work
and had no control in the disposition of company supplies and materials. He
maintained that his mere presence at the scene of the incident was not
sufficient to hold him liable as a conspirator.
Despite Gala’s explanation, Meralco proceeded with the investigation and
eventually terminated his employment on July 27, 2006.4 Gala responded by
filing an illegal dismissal complaint against Meralco.5
The Compulsory Arbitration Rulings
In a decision dated September 7, 2007,6 Labor Arbiter Teresita D. Castillon-
Lora dismissed the complaint for lack of merit. She held that Gala’s
participation in the pilferage of Meralco’s property rendered him unqualified to
become a regular employee.
Gala appealed to the National Labor Relations Commission (NLRC). In its
decision of May 2, 2008,7 the NLRC reversed the labor arbiter’s ruling. It found
that Gala had been illegally dismissed, since there was "no concrete showing
of complicity with the alleged misconduct/dishonesty[.]"8 The NLRC, however,
ruled out Gala’s reinstatement, stating that his tenure lasted only up to the
end of his probationary period. It awarded him backwages and attorney’s
fees.
Both parties moved for partial reconsideration; Gala, on the ground that he
should have been reinstated with full backwages, damages and interests; and
Meralco, on the ground that the NLRC erred in finding that Gala had been
illegally dismissed. The NLRC denied the motions. Relying on the same
grounds, Gala and Meralco elevated the case to the CA through a petition for
certiorari under Rule 65 of the Rules of Court.
The CA Decision
In its decision of August 25, 2009,9 the CA denied Meralco’s petition for lack of
merit and partially granted Gala’s petition. It concurred with the NLRC that
Gala had been illegally dismissed, a ruling that was supported by the
evidence. It opined that nothing in the records show Gala’s knowledge of or
complicity in the pilferage. It found insufficient the joint affidavit10 of the
members of Meralco’s task force testifying that Gala and two other linemen
knew Llanes.
The CA modified the NLRC decision of May 2, 200811 and ordered Gala’s
reinstatement with full backwages and other benefits. The CA also denied
Meralco’s motion for reconsideration. Hence, the present petition for review
on certiorari.12
The Petition
 The petition is anchored on the ground that the CA seriously erred and
gravely abused its discretion in -
1. ruling that Gala was illegally dismissed; and
2. directing Gala’s reinstatement despite his probationary status.
Meralco faults the CA for not giving credit to its witnesses Aguilar, Dola and
Riano, and instead treated their joint affidavit (Samasamang Sinumpaang
Salaysay) as inconclusive to establish Gala’s participation in the pilferage of
company property on May 25, 2006. It submits that the affidavit of the three
Meralco employees disproves the CA’s findings, considering that their
statements were based on their first-hand account of the incident during their
day-long surveillance on May 25, 2006. It points out that the three Meralco
employees categorically stated that all of the company’s foremen and linemen
present at that time, including Gala, had knowledge of the pilferage that was
happening at the time. According to Aguilar, Dola and Riano, the trucks’ crew,
including Gala, was familiar with Llanes who acted as if his presence —
particularly, that of freely collecting materials and supplies — was a regular
occurrence during their operations.
Meralco maintains that Gala himself admitted in his own testimony13 that he
had been familiar with Llanes even before the May 25, 2006 incident where
he saw Zuñiga, the foreman of Truck No. 1837, conversing with Llanes.
Meralco submits that Gala’s admission, instead of demonstrating "his feigned
innocence,"14 even highlights his guilt, especially considering that by design,
his misfeasance assisted Llanes in pilfering company property; Gala neither
intervened to stop Llanes, nor did he report the incident to the Meralco
management.
Meralco posits that because of his undeniable knowledge of, if not
participation in, the pilferage activities done by their group, the company was
well within its right in terminating his employment as a probationary employee
for his failure to meet the basic standards for his regularization. The
standards, it points out, were duly explained to him and outlined in his
probationary employment contract. For this reason and due to the expiration
of Gala’s probationary employment, the CA should not have ordered his
reinstatement with full backwages.
Finally, Meralco argues that even if Gala was illegally dismissed, he was
entitled to just his backwages for the unexpired portion of his employment
contract with the company.
Gala’s Case
By way of his Comment (to the Petition) dated September 2, 2010,15 Gala
asks for a denial of the petition because of (1) serious and fatal infirmities in
the petition; (2) unreliable statements of Meralco’s witnesses; and (3) clear
lack of basis to support the termination of his employment.
Gala contends, in regard to the alleged procedural defects of the petition, that
the "Verification and Certification," "Secretary’s Certificate" and "Affidavit of
Service" do not contain the details of the Community or Residence Tax
Certificates of the affiants, in violation of Section 6 of Commonwealth Act No.
 465 (an Act to Impose a Residence Tax). Additionally, the lawyers who
signed the petition failed to indicate their updated Mandatory Continuing
Legal Education (MCLE) certificate numbers, in violation of the rules.
With respect to the merits of the case, Gala bewails Meralco’s reliance on the
joint affidavit16 of Aguilar, Dola and Riano not only because it was presented
for the first time on appeal to the CA, but also because it was a mere
afterthought. He explains that Aguilar and Dola were the very same persons
who executed a much earlier sworn statement or transcription dated July 7,
2006. This earlier statement did not even mention Gala, but the later joint
affidavit "splashes GALA’s name in a desperate attempt to link him to an
imagined wrongdoing."17
Zeroing in on what he believes as lack of credibility of Meralco’s evidence,
Gala posits that there is clear lack of basis for the termination of his
employment. Thus, he wonders why Meralco did not present as evidence the
video footage of the entire incident which it claims exists. He suspects that
the footage was adverse to Meralco’s position in the case.
Gala adds that the allegations of a "reported pilferage" or "rampant theft or
pilferage" committed prior to May 25, 2006 by his superiors were not
established, for even the labor arbiter did not make a finding on the foremen’s
involvement in the incident. He stresses that the same is true in his case as
there is no proof of his participation in the pilferage.
Gala further submits that even if he saw Llanes on May 25, 2006 at about the
time of the occurrence of the pilferage near or around the Meralco trucks, he
was not aware that a wrongdoing was being committed or was about to be
committed. He points out at that precise time, his superiors were much nearer
to the trucks than he as he was among the crew digging a hole. He presumed
at the time that his own superiors, being the more senior employees, could be
trusted to protect company property.
Finally, Gala posits that his reinstatement with full backwages is but a
consequence of the illegality of his dismissal. He argues that even if he was
on probation, he is entitled to security of tenure. Citing Philippine Manpower
Services, Inc. v. NLRC,18 he claims that in the absence of any justification for
the termination of his probationary employment, he is entitled to continued
employment even beyond the probationary period.
The Court’s Ruling
The procedural issue
Gala would want the petition to be dismissed outright on procedural grounds,
claiming that the "Verification and Certification," "Secretary’s Certificate" and
"Affidavit of Service" accompanying the petition do not contain the details of
the Community Tax Certificates of the affiants, and that the lawyers who
signed the petition failed to indicate their updated MCLE certificate numbers,
in violation of existing rules.
We stress at this point that it is the spirit and intention of labor legislation that
the NLRC and the labor arbiters shall use every reasonable means to
ascertain the facts in each case speedily and objectively, without regard to
 technicalities of law or procedure, provided due process is duly observed.19 In
keeping with this policy and in the interest of substantial justice, we deem it
proper to give due course to the petition, especially in view of the conflict
between the findings of the labor arbiter, on the one hand, and the NLRC and
the CA, on the other. As we said in S.S. Ventures International, Inc. v. S.S.
Ventures Labor Union,20 "the application of technical rules of procedure in
labor cases may be relaxed to serve the demands of substantial justice."
The substantive aspect of the case
We find merit in the petition.
Contrary to the conclusions of the CA and the NLRC, there is substantial
evidence supporting Meralco’s position that Gala had become unfit to
continue his employment with the company. Gala was found, after an
administrative investigation, to have failed to meet the standards expected of
him to become a regular employee and this failure was mainly due to his
"undeniable knowledge, if not participation, in the pilferage activities done by
their group, all to the prejudice of the Company’s interests."21
Gala insists that he cannot be sanctioned for the theft of company property on
May 25, 2006. He maintains that he had no direct participation in the incident
and that he was not aware that an illegal activity was going on as he was at
some distance from the trucks when the alleged theft was being committed.
He adds that he did not call the attention of the foremen because he was a
mere lineman and he was focused on what he was doing at the time. He
argues that in any event, his mere presence in the area was not enough to
make him a conspirator in the commission of the pilferage.
Gala misses the point. He forgets that as a probationary employee, his overall
job performance and his behavior were being monitored and measured in
accordance with the standards (i.e., the terms and conditions) laid down in his
probationary employment agreement.22 Under paragraph 8 of the agreement,
he was subject to strict compliance with, and non-violation of the Company
Code on Employee Discipline, Safety Code, rules and regulations and
existing policies. Par. 10 required him to observe at all times the highest
degree of transparency, selflessness and integrity in the performance of his
duties and responsibilities, free from any form of conflict or contradicting with
his own personal interest.
The evidence on record established Gala’s presence in the worksite where
the pilferage of company property happened. It also established that it was
1âwphi 1

not only on May 25, 2006 that Llanes, the pilferer, had been seen during a
Meralco operation. He had been previously noticed by Meralco employees,
including Gala (based on his admission),23 in past operations. If Gala had seen
Llanes in earlier projects or operations of the company, it is incredulous for
him to say that he did not know why Llanes was there or what Zuñiga and
Llanes were talking about. To our mind, the Meralco crew (the foremen and
the linemen) allowed or could have even asked Llanes to be there during their
operations for one and only purpose — to serve as their conduit for pilfered
company supplies to be sold to ready buyers outside Meralco worksites.
The familiarity of the Meralco crew with Llanes, a non-Meralco employee who
had been present in Meralco field operations, does not contradict at all but
rather support the Meralco submission that there had been "reported
pilferage" or "rampant theft," by the crew, of company property even before
May 25, 2006. Gala downplays this particular point with the argument that the
labor arbiter made no such finding as she merely assumed it to be a fact,24 her
only "basis" being the statement that "may natanggap na balita na ang mga
crew na ito ay palagiang hindi nagsasauli ng mga electric facilities na
kanilang ginagamit o pinapalitan bagkus ito ay ibinenta palabas."25 Gala
impugns the statement as hearsay. He also wonders why Meralco’s
supposed "video footage" of the incident on May 25, 2006 was never
presented in evidence.
The established fact that Llanes, a non-Meralco employee, was often seen
during company operations, conversing with the foremen, for reason or
reasons connected with the ongoing company operations, gives rise to the
question: what was he doing there? Apparently, he had been visiting Meralco
worksites, at least in the Valenzuela Sector, not simply to socialize, but to do
something else. As testified to by witnesses, he was picking up unused
supplies and materials that were not returned to the company. From these
factual premises, it is not hard to conclude that this activity was for the mutual
pecuniary benefit of himself and the crew who tolerated the practice. For one
working at the scene who had seen or who had shown familiarity with Llanes
(a non-Meralco employee), not to have known the reason for his presence is
to disregard the obvious, or at least the very suspicious.
We consider, too, and we find credible the company submission that the
Meralco crew who worked at the Pacheco Subdivision in Valenzuela City on
May 25, 2006 had not been returning unused supplies and materials, to the
prejudice of the company. From all these, the allegedly hearsay evidence that
is not competent in judicial proceedings (as noted above), takes on special
meaning and relevance.
With respect to the video footage of the May 25, 2006 incident, Gala himself
admitted that he viewed the tape during the administrative investigation,
particularly in connection with the accusation against him that he allowed
Llanes (binatilyong may kapansanan sa bibig) to board the Meralco trucks.26
The choice of evidence belongs to a party and the mere fact that the video
was shown to Gala indicates that the video was not an evidence that Meralco
was trying to suppress. Gala could have, if he had wanted to, served a
subpoena for the production of the video footage as evidence. The fact that
he did not does not strengthen his case nor weaken the case of Meralco.
On the whole, the totality of the circumstances obtaining in the case
convinces us that Gala could not but have knowledge of the pilferage of
company electrical supplies on May 25, 2006; he was complicit in its
commission, if not by direct participation, certainly, by his inaction while it was
being perpetrated and by not reporting the incident to company authorities.
Thus, we find substantial evidence to support the conclusion that Gala does
 not deserve to remain in Meralco’s employ as a regular employee. He
violated his probationary employment agreement, especially the requirement
for him "to observe at all times the highest degree of transparency,
selflessness and integrity in the performance of their duties and
responsibilities[.]"27 He failed to qualify as a regular employee.28
For ignoring the evidence in this case, the NLRC committed grave abuse of
discretion and, in sustaining the NLRC, the CA committed a reversible error.
WHEREFORE, premises considered, the petition is GRANTED. The assailed
decision and resolution of the Court of Appeals are SET ASIDE. The
complaint is DISMISSED for lack of merit.
SO ORDERED.
ARTURO D. BRION
Associate Justice
WE CONCUR:

NATIONWIDE SECURITY and ALLIED SERVICES, INC.,

Petitioner, v. THE COURT OF APPEALS, NATIONAL
LABOR RELATIONS COMMISSION and JOSEPH
DIMPAZ, HIPOLITO LOPEZ, EDWARD ODATO,
FELICISIMO PABON and JOHNNY AGBAY,
Respondents.
RESOLUTION
QUISUMBING, J.:
This petition for certiorari seeks the reversal and setting
aside of the Decision1 dated January 31, 2002 and the
Resolution2 dated September 12, 2002 of the Court of
Appeals in CA-G.R. SP No. 65465. The appellate court had
affirmed the January 30, 20013 and April 20, 2001
Resolutions of the National Labor Relations Commission
(NLRC).
The factual antecedents of this case are as follows.
Labor Arbiter Manuel M. Manansala found petitioner
Nationwide Security and Allied Services, Inc., a security
agency, not liable for illegal dismissal in NLRC NCR 00-01-
00833-96 and 00-02-01129-96 involving eight security
guards who were employees of the petitioner. However,
the Labor Arbiter directed the petitioner to pay the
aforementioned security guards P81,750.00 in separation
pay, P8,700.00 in unpaid salaries, P93,795.68 for
 underpayment and 10% attorney's fees based on the total
monetary award.4
Dissatisfied with the decision, petitioner appealed to the
NLRC which dismissed its appeal for two reasons - first, for
having been filed beyond the reglementary period within
which to perfect the appeal and second, for filing an
insufficient appeal bond. It disposed as follows:
WHEREFORE, in the light of the foregoing, it is hereby
ordered that:
1. the instant appeal be considered DISMISSED; and,
2. the Decision appealed from be deemed FINAL and
EXECUTORY.
SO ORDERED.5
Its motion for reconsideration having been denied,
petitioner then appealed to the Court of Appeals to have
the appeal resolved on the merits rather than on pure
technicalities in the interest of due process.
The Court of Appeals dismissed the case, holding that in a
special action for certiorari, the burden is on petitioner to
prove not merely reversible error, but grave abuse of
discretion amounting to lack of or excess of jurisdiction on
the part of public respondent NLRC. The dispositive portion
of its decision states:
WHEREFORE, in view of the foregoing, the petition is
hereby DISMISSED. The questioned Resolutions dated 30
January 2001 and 20 April 2001 of the National Labor
Relations Commission are accordingly AFFIRMED.
SO ORDERED.6
The Court of Appeals likewise denied the petitioner's
motion for reconsideration.7 Hence, this petition which
raises the following issues:
I.
WHETHER OR NOT TECHNICALITIES IN LABOR CASES
MUST PREVAIL OVER THE SPIRIT AND INTENTION OF THE
LABOR CODE UNDER ARTICLE 221 THEREOF WHICH
STATES:
 "In any proceeding before the Commission or any of the
Labor Arbiters, the rules of evidence prevailing in courts of
Law or equity shall not be controlling and it is the spirit
and [i]ntention of this Code that the Commission and
its members and Labor Arbiters shall use every and
all reasonable means to ascertain the facts in each
case speedily and objectively and without [regard]
to technicalities of law or procedure, all [i]n the
interest of due process." Emphasis added.
II.
WHETHER OR NOT THE DOCTRINE IN THE CASE OF STAR
ANGEL HANDICRAFT v. NLRC, et al., 236 SCRA 580 AND
ROSEWOOD PROCESSING, INC. v. NLRC, G.R. [No.]
116476, May 21, 1998 FINDS APPLICATION IN THE
INSTANT CASE [;]
III.
WHETHER OR NOT SEPARATION PAY IS JUSTIFIED AS
AWARD IN CASES WHERE THE EMPLOYEE IS TERMINATED
DUE TO CONTRACT EXPIRATION AS IN THE INSTANT
CASE; AND
IV.
WHETHER OR NOT THE REQUIREMENT ON CERTIFICATION
AGAINST FORUM SHOPPING WHICH WAS RAISED BEFORE
THE NLRC IS ENFORCEABLE IN THE INSTANT CASE.8
Petitioner contends that the Court of Appeals erred when it
dismissed its case based on technicalities while the private
respondents contend that the appeal to the NLRC had not
been perfected, since the appeal was filed outside the
reglementary period, and the bond was insufficient.9
After considering all the circumstances in this case and the
submission by the parties, we are in agreement that the
petition lacks merit.
At the outset it must be pointed out here that the petition
for certiorari filed with the Court by petitioner under Rule
65 of the Rules of Court is inappropriate. The proper
remedy is a Petition for Review under Rule 45 purely on
questions of law. There being a remedy of appeal via
 Petition for Review under Rule 45 of the Rules of Court
available to the petitioner, the filing of a petition for
certiorari under Rule 65 is improper.
chanrobles virtual law library

But even if we bend our Rules to allow the present petition

for certiorari, still it will not prosper because we do not find
any grave abuse of discretion amounting to lack of or
excess of jurisdiction on the part of the Court of Appeals
when it dismissed the petition of the security agency. We
must stress that under Rule 65, the abuse of discretion
must be so patent and gross as to amount to an evasion of
positive duty or to a virtual refusal to perform a duty
enjoined by law, or to act at all in contemplation of law, as
where the power is exercised in an arbitrary and despotic
manner by reason of passion or personal hostility.10 No
such abuse of discretion happened here. The assailed
decision by the Court of Appeals was certainly not
capricious nor arbitrary, nor was it a whimsical exercise of
judgment amounting to a lack of jurisdiction.11
The Labor Code provides as follows:
ART. 223. Appeal. - Decisions, awards, or orders of the
Labor Arbiter are final and executory unless appealed to the
Commission by any or both parties within ten (10) calendar
days from receipt of such decisions, awards, or orders. Such
appeal may be entertained only on any of the following
grounds:
(a) If there is prima facie evidence of abuse of discretion on
the part of the Labor Arbiter;
(b) If the decision, order or award was secured through
fraud or coercion, including graft and corruption;
(c) If made purely on questions of law, and
(d) If serious errors in the findings of facts are raised which
would cause grave or irreparable damage or injury to the
appellant.
In case of a judgment involving a monetary award, an
appeal by the employer may be perfected only upon the
posting of a cash or surety bond issued by a reputable
bonding company duly accredited by the Commission in the
amount equivalent to the monetary award in the judgment
appealed from.
xxx
The New Rules of Procedure of the NLRC states:
Section 1. Periods of appeal. - Decisions, resolutions or
orders of the Labor Arbiter shall be final and executory
unless appealed to the Commission by any or both parties
within ten (10) calendar days from receipt thereof; and in
case of decisions, resolutions or orders of the Regional
Director of the Department of Labor and Employment
pursuant to Article 129 of the Labor Code, within five (5)
calendar days from receipt thereof. If the 10th or 5th day,
as the case may be, falls on a Saturday, Sunday or holiday,
the last day to perfect the appeal shall be the first working
day following such Saturday, Sunday or holiday.
No motion or request for extension of the period within
which to perfect an appeal shall be allowed.
In the instant case, both the NLRC and the Court of Appeals
found that petitioner received the decision of the Labor
Arbiter on July 16, 1999. This factual finding is supported by
sufficient evidence,12 and we take it as binding on us.
Petitioner then simultaneously filed its "Appeal
Memorandum", "Notice of Appeal" and "Motion to Reduce
Bond", by registered mail on July 29, 1999, under Registry
Receipt No. 003098.13 These were received by the NLRC on
July 30, 1999.14 The appeal to the NLRC should have been
perfected, as provided by its Rules, within a period of 10
days from receipt by petitioner of the decision on July 16,
1999. Clearly, the filing of the appeal - -three days after July
26, 1999 - -was already beyond the reglementary period
and in violation of the NLRC Rules and the pertinent Article
on Appeal in the Labor Code.
Failure to perfect an appeal renders the decision final and
executory.15 The right to appeal is a statutory right and one
who seeks to avail of the right must comply with the statute
or the rules. The rules, particularly the requirements for
perfecting an appeal within the reglementary period
specified in the law, must be strictly followed as they are
considered indispensable interdictions against needless
delays and for the orderly discharge of judicial business.16 It
is only in highly meritorious cases that this Court will opt not
to strictly apply the rules and thus prevent a grave injustice
from being done.17 The exception does not obtain here.
Thus, we are in agreement that the decision of the Labor
Arbiter already became final and executory because
petitioner failed to file the appeal within 10 calendar days
from receipt of the decision.
Clearly, the NLRC committed no grave abuse of discretion in
dismissing the appeal before it. It follows that the Court of
Appeals, too, did not err, nor gravely abuse its discretion, in
sustaining the NLRC Order, by dismissing the petition for
certiorari before it. Hence, with the primordial issue
resolved, we find no need to tarry on the other issues raised
by petitioner.
WHEREFORE, the Decision dated January 31, 2002 and the
Resolution dated September 12, 2002 of the Court of
Appeals in CA - G.R. SP No. 65465 are AFFIRMED. Costs
against petitioner.
SO ORDERED.

G.R. No. L-46496 February 27, 1940

ANG TIBAY, represented by TORIBIO TEODORO, manager and
propietor, and
NATIONAL WORKERS BROTHERHOOD, petitioners,
vs.
THE COURT OF INDUSTRIAL RELATIONS and NATIONAL LABOR
UNION, INC., respondents.
Office of the Solicitor-General Ozaeta and Assistant Attorney Barcelona for
the Court of Industrial Relations.
Antonio D. Paguia for National Labor Unon.
Claro M. Recto for petitioner "Ang Tibay".
Jose M. Casal for National Workers' Brotherhood.
LAUREL, J.:
The Solicitor-General in behalf of the respondent Court of Industrial Relations
in the above-entitled case has filed a motion for reconsideration and moves
that, for the reasons stated in his motion, we reconsider the following legal
conclusions of the majority opinion of this Court:
1. Que un contrato de trabajo, asi individual como colectivo, sin termino fijo
de duracion o que no sea para una determinada, termina o bien por voluntad
de cualquiera de las partes o cada vez que ilega el plazo fijado para el pago
de los salarios segun costumbre en la localidad o cunado se termine la obra;
2. Que los obreros de una empresa fabril, que han celebrado contrato, ya
individual ya colectivamente, con ell, sin tiempo fijo, y que se han visto
obligados a cesar en sus tarbajos por haberse declarando paro forzoso en la
fabrica en la cual tarbajan, dejan de ser empleados u obreros de la misma;
3. Que un patrono o sociedad que ha celebrado un contrato colectivo de
trabajo con sus osbreros sin tiempo fijo de duracion y sin ser para una obra
determiminada y que se niega a readmitir a dichos obreros que cesaron
como consecuencia de un paro forzoso, no es culpable de practica injusta in
incurre en la sancion penal del articulo 5 de la Ley No. 213 del
Commonwealth, aunque su negativa a readmitir se deba a que dichos
obreros pertenecen a un determinado organismo obrero, puesto que tales ya
han dejado deser empleados suyos por terminacion del contrato en virtud del
paro.
The respondent National Labor Union, Inc., on the other hand, prays for the
vacation of the judgement rendered by the majority of this Court and the
remanding of the case to the Court of Industrial Relations for a new trial, and
avers:
1. That Toribio Teodoro's claim that on September 26, 1938, there was
shortage of leather soles in ANG TIBAY making it necessary for him to
temporarily lay off the members of the National Labor Union Inc., is entirely
false and unsupported by the records of the Bureau of Customs and the
Books of Accounts of native dealers in leather.
2. That the supposed lack of leather materials claimed by Toribio Teodoro
was but a scheme to systematically prevent the forfeiture of this bond despite
the breach of his CONTRACT with the Philippine Army.
3. That Toribio Teodoro's letter to the Philippine Army dated September 29,
1938, (re supposed delay of leather soles from the States) was but a scheme
to systematically prevent the forfeiture of this bond despite the breach of his
CONTRACT with the Philippine Army.
4. That the National Worker's Brotherhood of ANG TIBAY is a company or
employer union dominated by Toribio Teodoro, the existence and functions of
which are illegal. (281 U.S., 548, petitioner's printed memorandum, p. 25.)
5. That in the exercise by the laborers of their rights to collective bargaining,
majority rule and elective representation are highly essential and
indispensable. (Sections 2 and 5, Commonwealth Act No. 213.)
6. That the century provisions of the Civil Code which had been (the) principal
source of dissensions and continuous civil war in Spain cannot and should
not be made applicable in interpreting and applying the salutary provisions of
a modern labor legislation of American origin where the industrial peace has
always been the rule.
7. That the employer Toribio Teodoro was guilty of unfair labor practice for
discriminating against the National Labor Union, Inc., and unjustly favoring
the National Workers' Brotherhood.
8. That the exhibits hereto attached are so inaccessible to the respondents
that even with the exercise of due diligence they could not be expected to
have obtained them and offered as evidence in the Court of Industrial
Relations.
9. That the attached documents and exhibits are of such far-reaching
importance and effect that their admission would necessarily mean the
modification and reversal of the judgment rendered herein.
The petitioner, Ang Tibay, has filed an opposition both to the motion for
reconsideration of the respondent National Labor Union, Inc.
In view of the conclusion reached by us and to be herein after stead with
reference to the motion for a new trial of the respondent National Labor
Union, Inc., we are of the opinion that it is not necessary to pass upon the
motion for reconsideration of the Solicitor-General. We shall proceed to
dispose of the motion for new trial of the respondent labor union. Before
doing this, however, we deem it necessary, in the interest of orderly
procedure in cases of this nature, in interest of orderly procedure in cases of
this nature, to make several observations regarding the nature of the powers
of the Court of Industrial Relations and emphasize certain guiding principles
which should be observed in the trial of cases brought before it. We have re-
examined the entire record of the proceedings had before the Court of
Industrial Relations in this case, and we have found no substantial evidence
that the exclusion of the 89 laborers here was due to their union affiliation or
activity. The whole transcript taken contains what transpired during the
hearing and is more of a record of contradictory and conflicting statements of
opposing counsel, with sporadic conclusion drawn to suit their own views. It is
evident that these statements and expressions of views of counsel have no
evidentiary value.
The Court of Industrial Relations is a special court whose functions are
specifically stated in the law of its creation (Commonwealth Act No. 103). It is
more an administrative than a part of the integrated judicial system of the
nation. It is not intended to be a mere receptive organ of the Government.
Unlike a court of justice which is essentially passive, acting only when its
jurisdiction is invoked and deciding only cases that are presented to it by the
parties litigant, the function of the Court of Industrial Relations, as will appear
from perusal of its organic law, is more active, affirmative and dynamic. It not
only exercises judicial or quasi-judicial functions in the determination of
disputes between employers and employees but its functions in the
determination of disputes between employers and employees but its functions
are far more comprehensive and expensive. It has jurisdiction over the entire
Philippines, to consider, investigate, decide, and settle any question, matter
controversy or dispute arising between, and/or affecting employers and
employees or laborers, and regulate the relations between them, subject to,
and in accordance with, the provisions of Commonwealth Act No. 103
(section 1). It shall take cognizance or purposes of prevention, arbitration,
decision and settlement, of any industrial or agricultural dispute causing or
likely to cause a strike or lockout, arising from differences as regards wages,
shares or compensation, hours of labor or conditions of tenancy or
employment, between landlords and tenants or farm-laborers, provided that
the number of employees, laborers or tenants of farm-laborers involved
exceeds thirty, and such industrial or agricultural dispute is submitted to the
Court by the Secretary of Labor or by any or both of the parties to the
controversy and certified by the Secretary of labor as existing and proper to
be by the Secretary of Labor as existing and proper to be dealth with by the
Court for the sake of public interest. (Section 4, ibid.) It shall, before hearing
the dispute and in the course of such hearing, endeavor to reconcile the
parties and induce them to settle the dispute by amicable agreement.
(Paragraph 2, section 4, ibid.) When directed by the President of the
Philippines, it shall investigate and study all industries established in a
designated locality, with a view to determinating the necessity and fairness of
fixing and adopting for such industry or locality a minimum wage or share of
laborers or tenants, or a maximum "canon" or rental to be paid by the
"inquilinos" or tenants or less to landowners. (Section 5, ibid.) In fine, it may
appeal to voluntary arbitration in the settlement of industrial disputes; may
employ mediation or conciliation for that purpose, or recur to the more
effective system of official investigation and compulsory arbitration in order to
determine specific controversies between labor and capital industry and in
agriculture. There is in reality here a mingling of executive and judicial
functions, which is a departure from the rigid doctrine of the separation of
governmental powers.
In the case of Goseco vs. Court of Industrial Relations et al., G.R. No. 46673,
promulgated September 13, 1939, we had occasion to joint out that the Court
of Industrial Relations et al., G. R. No. 46673, promulgated September 13,
1939, we had occasion to point out that the Court of Industrial Relations is not
narrowly constrained by technical rules of procedure, and the Act requires it
to "act according to justice and equity and substantial merits of the case,
without regard to technicalities or legal forms and shall not be bound by any
technicalities or legal forms and shall not be bound by any technical rules of
legal evidence but may inform its mind in such manner as it may deem just
and equitable." (Section 20, Commonwealth Act No. 103.) It shall not be
restricted to the specific relief claimed or demands made by the parties to the
industrial or agricultural dispute, but may include in the award, order or
decision any matter or determination which may be deemed necessary or
expedient for the purpose of settling the dispute or of preventing further
industrial or agricultural disputes. (section 13, ibid.) And in the light of this
legislative policy, appeals to this Court have been especially regulated by the
rules recently promulgated by the rules recently promulgated by this Court to
carry into the effect the avowed legislative purpose. The fact, however, that
the Court of Industrial Relations may be said to be free from the rigidity of
certain procedural requirements does not mean that it can, in justifiable cases
before it, entirely ignore or disregard the fundamental and essential
requirements of due process in trials and investigations of an administrative
character. There are primary rights which must be respected even in
proceedings of this character:
(1) The first of these rights is the right to a hearing, which includes the right of
the party interested or affected to present his own case and submit evidence
in support thereof. In the language of Chief Hughes, in Morgan v. U.S., 304
U.S. 1, 58 S. Ct. 773, 999, 82 Law. ed. 1129, "the liberty and property of the
citizen shall be protected by the rudimentary requirements of fair play.
(2) Not only must the party be given an opportunity to present his case and to
adduce evidence tending to establish the rights which he asserts but the
tribunal must consider the evidence presented. (Chief Justice Hughes in
Morgan v. U.S. 298 U.S. 468, 56 S. Ct. 906, 80 law. ed. 1288.) In the
language of this court in Edwards vs. McCoy, 22 Phil., 598, "the right to
adduce evidence, without the corresponding duty on the part of the board to
consider it, is vain. Such right is conspicuously futile if the person or persons
to whom the evidence is presented can thrust it aside without notice or
consideration."
(3) "While the duty to deliberate does not impose the obligation to decide
right, it does imply a necessity which cannot be disregarded, namely, that of
having something to support it is a nullity, a place when directly attached."
(Edwards vs. McCoy, supra.) This principle emanates from the more
fundamental is contrary to the vesting of unlimited power anywhere. Law is
both a grant and a limitation upon power.
(4) Not only must there be some evidence to support a finding or conclusion
(City of Manila vs. Agustin, G.R. No. 45844, promulgated November 29,
1937, XXXVI O. G. 1335), but the evidence must be "substantial."
(Washington, Virginia and Maryland Coach Co. v. national labor Relations
Board, 301 U.S. 142, 147, 57 S. Ct. 648, 650, 81 Law. ed. 965.) It means
such relevant evidence as a reasonable mind accept as adequate to support
a conclusion." (Appalachian Electric Power v. National Labor Relations
Board, 4 Cir., 93 F. 2d 985, 989; National Labor Relations Board v.
Thompson Products, 6 Cir., 97 F. 2d 13, 15; Ballston-Stillwater Knitting Co. v.
National Labor Relations Board, 2 Cir., 98 F. 2d 758, 760.) . . . The statute
provides that "the rules of evidence prevailing in courts of law and equity shall
not be controlling.' The obvious purpose of this and similar provisions is to
free administrative boards from the compulsion of technical rules so that the
mere admission of matter which would be deemed incompetent inn judicial
proceedings would not invalidate the administrative order. (Interstate
Commerce Commission v. Baird, 194 U.S. 25, 44, 24 S. Ct. 563, 568, 48
Law. ed. 860; Interstate Commerce Commission v. Louisville and Nashville R.
Co., 227 U.S. 88, 93 33 S. Ct. 185, 187, 57 Law. ed. 431; United States v.
Abilene and Southern Ry. Co. S. Ct. 220, 225, 74 Law. ed. 624.) But this
assurance of a desirable flexibility in administrative procedure does not go far
as to justify orders without a basis in evidence having rational probative force.
Mere uncorroborated hearsay or rumor does not constitute substantial
evidence. (Consolidated Edison Co. v. National Labor Relations Board, 59 S.
Ct. 206, 83 Law. ed. No. 4, Adv. Op., p. 131.)"
(5) The decision must be rendered on the evidence presented at the hearing,
or at least contained in the record and disclosed to the parties affected.
(Interstate Commence Commission vs. L. & N. R. Co., 227 U.S. 88, 33 S. Ct.
185, 57 Law. ed. 431.) Only by confining the administrative tribunal to the
evidence disclosed to the parties, can the latter be protected in their right to
know and meet the case against them. It should not, however, detract from
their duty actively to see that the law is enforced, and for that purpose, to use
the authorized legal methods of securing evidence and informing itself of
facts material and relevant to the controversy. Boards of inquiry may be
appointed for the purpose of investigating and determining the facts in any
given case, but their report and decision are only advisory. (Section 9,
Commonwealth Act No. 103.) The Court of Industrial Relations may refer any
industrial or agricultural dispute or any matter under its consideration or
advisement to a local board of inquiry, a provincial fiscal. a justice of the
peace or any public official in any part of the Philippines for investigation,
report and recommendation, and may delegate to such board or public official
such powers and functions as the said Court of Industrial Relations may
deem necessary, but such delegation shall not affect the exercise of the
Court itself of any of its powers. (Section 10, ibid.)
(6) The Court of Industrial Relations or any of its judges, therefore, must act
on its or his own independent consideration of the law and facts of the
controversy, and not simply accept the views of a subordinate in arriving at a
decision. It may be that the volume of work is such that it is literally Relations
personally to decide all controversies coming before them. In the United
States the difficulty is solved with the enactment of statutory authority
authorizing examiners or other subordinates to render final decision, with the
right to appeal to board or commission, but in our case there is no such
statutory authority.
(7) The Court of Industrial Relations should, in all controversial questions,
render its decision in such a manner that the parties to the proceeding can
know the various issues involved, and the reasons for the decision rendered.
The performance of this duty is inseparable from the authority conferred upon
it.
In the right of the foregoing fundamental principles, it is sufficient to observe
here that, except as to the alleged agreement between the Ang Tibay and the
National Worker's Brotherhood (appendix A), the record is barren and does
not satisfy the thirst for a factual basis upon which to predicate, in a national
way, a conclusion of law.
This result, however, does not now preclude the concession of a new trial
prayed for the by respondent National Labor Union, Inc., it is alleged that "the
supposed lack of material claimed by Toribio Teodoro was but a scheme
adopted to systematically discharged all the members of the National Labor
Union Inc., from work" and this avernment is desired to be proved by the
petitioner with the "records of the Bureau of Customs and the Books of
Accounts of native dealers in leather"; that "the National Workers
Brotherhood Union of Ang Tibay is a company or employer union dominated
by Toribio Teodoro, the existence and functions of which are illegal."
Petitioner further alleges under oath that the exhibits attached to the petition
to prove his substantial avernments" are so inaccessible to the respondents
that even within the exercise of due diligence they could not be expected to
have obtained them and offered as evidence in the Court of Industrial
Relations", and that the documents attached to the petition "are of such far
reaching importance and effect that their admission would necessarily mean
the modification and reversal of the judgment rendered herein." We have
considered the reply of Ang Tibay and its arguments against the petition. By
and large, after considerable discussions, we have come to the conclusion
that the interest of justice would be better served if the movant is given
opportunity to present at the hearing the documents referred to in his motion
and such other evidence as may be relevant to the main issue involved. The
legislation which created the Court of Industrial Relations and under which it
acts is new. The failure to grasp the fundamental issue involved is not entirely
attributable to the parties adversely affected by the result. Accordingly, the
motion for a new trial should be and the same is hereby granted, and the
entire record of this case shall be remanded to the Court of Industrial
Relations, with instruction that it reopen the case, receive all such evidence
as may be relevant and otherwise proceed in accordance with the
requirements set forth hereinabove. So ordered.

G.R. No. 76988 January 31, 1989

GENERAL RUBBER AND FOOTWEAR CORPORATION, petitioner,
vs.
THE HON. FRANKLIN DRILON IN HIS CAPACITY AS THE MINISTER OF
LABOR & EMPLOYMENT and THE GENERAL RUBBER WORKERS'
UNION-NATU, respondents.
Paez & Pascual Law Office for petitioners.
The Solicitor General for public respondent.
Marcelino Lontok, Jr. for private respondent.
RESOLUTION

FELICIANO, J.:
The present petition involves the question of whether or not union members
who did not ratify a waiver of accrued wage differentials are bound by the
ratification made by a majority of the union members.
On 26 December 1984, Wage Order No. 6 was issued, increasing the statutory
minimum wage rate (by P2.00) and the mandatory cost of living allowance (by
P3.00 for non-agricultural workers) in the private sector, to take effect on 1
November 1984, Petitioner General Rubber and Footwear Corporation applied
to the National Wages Council ("Council") for exemption from the provisions of
Wage Order No. 6. The Council, in an Order dated 4 March 1985, denied
petitioner's application, stating in part that:
[Y]ou are hereby ordered to pay your covered employees the daily increase in
statutory minimum wage rate of P 2.00 and living allowance of P3.00 effective
November 1, 1984. ...
This decision is final. 1 (Emphasis supplied)
Petitioner filed a Motion for Reconsideration of this Order on 27 May 1985.
On 25 May 1985, some members of respondent General Rubber Workers'
Union-NATU, led by one Leopoldo Sto. Domingo, declared a strike against
petitioner. 2 Three (3) days later, on 28 May 1985, petitioner and Sto. Domingo,
the latter purporting to represent the striking workers, entered into a Return-to-
Work Agreement ("Agreement"), Article 4 of which provided:
4. The COMPANY agrees to implement in full Wage Order No. 6 effective May
30, 1985, and agrees to withdraw the Motion for Reconsideration which it filed
with the National Wages Council in connection with the Application for
Exemption. In consideration, the UNION, its officers and members, agrees not
to demand or ask from the COMPANY the corresponding differential pay from
November 1, 1984 to May 29 1985 arising out of the non-compliance of said
wage order during the said period. 3 (Emphasis supplied)
This agreement was subsequently ratified on 30 July 1985 in a document
entitled "Sama-samang Kapasyahan sa Pagpapatibay ng Return-to-Work
Agreement" 4 by some two hundred and sixty-eight (268) members of
respondent union, each member signing individually the instrument of
ratification.
Before the ratification of the Agreement, petitioner filed, on 5 June 1985, a
Motion with the Council withdrawing its pending Motion for Reconsideration of
the Council's Order of 4 March 1985. By a letter dated 13 June 1985, the
Council allowed the withdrawal of petitioner's Motion for Reconsideration,
which letter in part stated:
In view of your compliance with Wage Order No. 6 effective May 30, 1985
pursuant to the Return to Work Agreement ... , this Council interposes no
objection to your Motion to Withdraw ... 5 (Emphasis supplied)
Meanwhile, there were some one hundred (100) members of the union who
were unhappy over the Agreement, who took the view that the Council's Order
of 4 March 1985 bad become final and executory upon the withdrawal of
petitioner's Motion for Reconsideration and who would not sign the instrument
ratifying the Agreement. On 10 July 1985, these minority union members with
respondent union acting on their behalf, applied for a writ of execution of the
Council's Order. 6
Petitioner opposed the Motion for a writ of execution, contending that the
Council's approval of its deferred compliance with the implementation of the
Wage Order,7 together with the majority ratification of the Agreement by the
individual workers, 8 bound the non-ratifying union members represented by
respondent union.
Respondent union countered that the Agreement — despite the majority
ratification — was not binding on the union members who had not consented
thereto, upon the ground that ratification or non-ratification of the Agreement,
involving as it did money claims, was a personal right under the doctrine of
"Kaisahan ng Manggagawa sa La Campana v. Honorable Judge Ulpiano
Sarmiento and La Campana." 9
Finding for the Union members represented by respondent union, the then
Ministry (now Department) of Labor and Employment, in an order dated 20
September 1985 issued by National Capital Region Director Severo M. Pucan,
directed the issuance of a writ of execution and required petitioner to pay the
minority members of respondent union their claims for differential pay under
Wage Order No. 6, which totalled P90,090.00. 10
Petitioner then moved to quash the writ of execution upon the ground that the
Council's order could not be the subject of a writ of execution, having been
superseded by the Agreement. 11 In another Order dated 15 January 1986.
Director Pucan, reversed his previous order and sustained petitioner's
contention that the minority union members represented by respondent union
were bound by the majority ratification, holding that the Council's 20 September
1985 Order sought to be enforced by writ of execution should not have been
issued. 12
Respondent union filed a Motion for Reconsideration, which was treated as an
appeal to the Minister of Labor. In a decision dated 19 December 1986, the
Minister of Labor set aside the appealed Order of Director Pucan. The
Minister's decision held that:
It is undisputed that the 100 numbers did not sign and ratify the Return-to-Work
Agreement and therefore they cannot be bound by the waiver of benefits
therein. This, in essence, is the ruling of the High Tribunal in the La Campana
case. Accordingly, the benefits under Wage Order No. 6 due them by virtue of
the final and executory Order of the National Wages Council dated March 4,
1985 subsists in their favor and can be subject for execution.
xxx xxx xxx
The writ of execution dated September 20, 1985 ... was clearly based on the
final Order of the National Wages Council sought to be enforced in a Motion
for Execution filed by the union. While the Return-to-Work Agreement was
mentioned in the writ, the respondent allegedly failing 'to comply with the
above-stated Agreement which had become final and executory,' we find the
Agreement indeed not the basis for the issuance of the writ.
WHEREFORE, the Order of the Director dated January 15, 1986 is hereby set
aside. Let a writ of execution be issued immediately to enforce the payment of
the differential pay under Wage Order No. 6 from November 1, 1984 to May
29, 1985 of the 100 workers who did not sign any waiver, in compliance with
the final Order of the National Wages Council. The entire record is hereby
remanded to the Regional Director, National Capital Region for this purpose.
SO ORDERED . 13 (Emphasis supplied)
Not pleased with the adverse decision of the Minister, petitioner filed the instant
Petition for Certiorari.
Petitioner argues once again that the National Wages Council's Order of 4
March 1985 did not become final and executory because it had been
superseded by the Return-to-Work Agreement signed by petitioner corporation
and the union. At the same time, petitioner also argues that the Return-to-Work
Agreement could not be enforced by a writ of execution, because it was a
contractual document and not the final and executory award of a public official
or agency. Petitioner's contention is more clever than substantial. The core
issue is whether or not Article 4 of the Return-to-Work Agreement quoted
above, could be deemed as binding upon all members of the union, without
regard to whether such members had or had not in fact individually signed and
ratified such Agreement. Article 4 of that Agreement provided for, apparently,
a quid pro quo arrangement: petitioner agreed to implement in full Wage Order
No. 6 starting 30 May 1985 (and not 1 November 1984, as provided by the
terms of Wage Order No. 6) and to withdraw its previously filed Motion for
Reconsideration with the National Wages Council; in turn, the union and its
members would refrain from requiring the company to pay the differential pay
(increase in pay) due under Wage Order No. 6 corresponding to the preceding
seven-month period from 1 November 1984 to 29 May 1985.
Thus, Kaisahan ng Mangagawa sa La Campana v. Sarmiento, (supra) is
practically on all fours with the instant case. In La Campana, what was at stake
was the validity of a compromise agreement entered into between the union
and the company. In that compromise agreement, the union undertook to
dismiss and withdraw the case it had filed with the then Court of Industrial
Relations, and waived its right to execute any final judgment rendered in that
case. The CIR had in that case, rendered a judgment directing reinstatement
of dismissed workers and payment of ten (10) years backwages. The Secretary
of Labor held that that compromise agreement was void for lack of ratification
by the individual members of the union. The Supreme Court upheld the
decision of the Secretary of Labor, stating among other things that:
Generally, a judgment on a compromise agreement puts an end to a litigation
and is immediately executory. However, the Rules [of Court] require a special
authority before an attorney can compromise the litigation of [his] clients. The
authority to compromise cannot lightly be presumed and should be duly
established by evidence. (Esso Philippine, Inc. v. MME, 75 SCRA 91).
As aptly held by the Secretary of Labor, the records are bereft of showing that
the individual members consented to the said agreement. Now were the
members informed of the filing of the civil case before the Court of First
Instance. If the parties to said agreement acted in good faith, why did they not
furnish the Office of the president with a copy of the agreement when they knew
all the while that the labor case was then pending appeal therein? Undoubtedly,
the compromise agreement was executed to the prejudice of the complainants
who never consented thereto, hence, it is null and void. The judgment based
on such agreement does not bind the individual members or complainants who
are not parties thereto nor signatories therein.
Money claims due to laborers cannot be the object of settlement or compromise
effected by a union or counsel without the specific individual consent of each
laborer concerned. The beneficiaries are the individual complainants
themselves. The union to which they belong can only assist them but cannot
decide for them. Awards in favor of laborers after long years of litigation must
be attended to with mutual openness and in the best of faith. (Danao
Development Corp. v. NLRC, 81 SCRA 487-505). Only thus can we really give
meaning to the constitutional mandate of giving laborers maximum protection
and security. It is about time that the judgment in Case No. 584-V(7) be fully
implemented considering the unreasonable delay in the satisfaction thereof.
This unfortunate incident may only weaken the workingmen's faith in the
judiciary's capacity to give them justice when due. 14
xxx xxx xxx
(Emphasis supplied)
In the instant case, there is no dispute that private respondents had not ratified
the Return-to-Work Agreement. It follows, and we so hold, that private
respondents cannot be held bound by the Return-to-Work Agreement. The
waiver of money claims, which in this case were accrued money claims, by
workers and employees must be regarded as a personal right, that is, a right
that must be personally exercised. For a waiver thereof to be legally effective,
the individual consent or ratification of the workers or employees involved must
be shown. Neither the officers nor the majority of the union had any authority
to waive the accrued rights pertaining to the dissenting minority members, even
under a collective bargaining agreement which provided for a "union shop."
The same considerations of public policy which impelled the Court to reach the
conclusion it did in La Campana, are equally compelling in the present case.
The members of the union need the protective shield of this doctrine not only
vis-a-vis their employer but also, at times, vis-a-vis the management of their
own union, and at other times even against their own imprudence or
impecuniousness.
It should perhaps be made clear that the Court is not here saying that accrued
money claims can never be effectively waived by workers and employees.
What the Court is saying is that, in the present case, the private respondents
never purported to waive their claims to accrued differential pay. Assuming that
private respondents had actually and individually purported to waive such
claims, a second question would then have arisen: whether such waiver could
be given legal effect or whether, on the contrary, it was violative of public policy.
15 Fortunately, we do not have to address this second question here.

Since Article 4 of the Return-to-Work Agreement was not enforceable against

the non-consenting union members, the Order of the National Wages Council
dated 4 March 1985 requiring petitioner to comply with Wage Order No. 6 from
1 November 1984 onward must be regarded as having become final and
executory insofar as the non-consenting union members were concerned.
Enforcement by writ of execution of that Order was, therefore, proper. It follows
further that the decision of 19 December 1986 of the respondent Minister of
Labor, far from constituting a grave abuse of discretion or an act without or in
excess of jurisdiction, was fully in accordance with law as laid down in La
Campana and here reiterated.
WHEREFORE, the Court Resolved to DISMISS the Petition for certiorari for
lack of merit. Costs against petitioner.
Fernan, C.J., Gutierrez, Jr., Bidin and Cortes, JJ., concur.

G.R. No. 81390 August 29, 1989

NATHANIEL OLACAO, ALBERTO AGUILON, AMADO AGUILON,
LIBERATO AGUILON, VENANCIO AGUILON, CENON AGUILON, CESAR
ALCANTARA, FRANCISCO ALERIA, FRUCTUOUSO ALERIA, PEDRO
ALERIA, IGNACIO ALMAQUIO, FRANCISCO AMONGAN, MARCELINO
AREGLON, HONORIO ARANDIA, TEODORO ASOQUE, SERGIO
BAGUIO, TIRSO BAGUIO, SENANDO BAJA, VELLAJUADO BALENIA,
SIMPLICIO BANOC, FELIPE BAROLA, PEDRO BAROLA, EDILBERTO
BARON, PATROCINIO BARON, CONRADO BASTIDA, MACASAWANG
BAUTE, CRESENCIO BONGCAHIG, LEONORA BUSTAMANTE, PABLO
BUSTAMANTE, CELEDONIO BUTULAN, LEOPOLDO CAGUTOM,
IGMIDIO CAINGLET, GAUDENCIO CAMELLOTES, LEONARDO
CAMELLOTES, FORTUNATO CAPILITAN, FRANCISCO CAPILITAN,
RAFAEL CARAMAT, FRANCISCO CARTEGENA, NAPOLEON CASTRO,
FERMIN CASTILLO, ROBERTO CATIPAY, BERNARDO CEBUCO,
ANTONIO CELOSIA, CIRILO CERO, MACARIO CERO, FERNANDO
COBALES, GABRIEL COBALES, SERGIO CONCHA, ROGELIO
CONGRESO, FLORENTINO CONSIGNA, EXU-PERIO CUBERO, ROGELIO
CUBERO, TIMOTEO DAPLIN, ANTONIO DOMINGO, EBODIO DONGIS,
DELFIN ECO, RICARDO ENDRIGA, BIENVENIDO ESPINOSA, PAULINO
ESTALANE, BENITO ESTREMOS, JUAN ESTREMERA, SAMUEL FALAR,
HILARIO FEJI, JR., HENRY FONTILLAS, DOMINGO GIDA, RODOLFO
GUERRA, CESAR IBANEZ, JULIAN IBANEZ, JOVENCIO INOCEDA,
HONORATO IROY, DOROTEO JOVITA, ESTELITO JUANILLO, ALMA
LABANDIA, CIPRIANO LABRADOR, FELIX LAGANG, RODRIGO
LARODA, LEOPOLDO LAURENTE, SEGUNDINO LIMBAGA, CRISPIN
LIPARANON, NONITO LIPARANON, ROGELIO LOPEZ, WILLIAM
LUZARAN, CIPRIANO MACLAY, GUILLERMO MADJOS, CRISPIN
MADULARA, CIPRIANO MAGLANA, LEOPOLDO MAGLANA, MARCOS
MAGLANA, FLO-RENCIO MAGNO, HONESTO MAGNO, HERMINIO
MAGNO, SEVERINO MAGONCIA, TRANQUILINO MAKILING,
TRANQUILINO MALAZA, ROGELIO MALINAO, AGUSTIN MANDAWE,
ARNULFO MANLIMOS, FLAVIANO MAPANO, EUNILO MANTE, PEDRO
MAPANO JR., VICTORIANO MARSADA, PEDRO MARAGANAS,
GERONIMO MARILLA, LEONARDO MARQUEDA, NICOMEDES
MARQUEDA, JOSE MICABALO, TEODORICO MORATA, FLORENTINO
MORENO, PABLO MULAY, FEDERICO MULLET, DIOSDADO MURILLO,
MEQUIAS MUSA, FELICIDARIO MUYALDE, SERGIO NAYRE, EDUARDO
OBANE, NAPOLEON OLACAO, CONSTANCIO PALCONE, PATERNO
PALCONE, ALEJANDRO PAYOR, ROGELIO PELICANE, CASIMIRO
PEREGRINO, FLORO POL, EUTIQUIO POMALOY, WILLIAM POMALOY,
ZOSIMO PORLAS, CONSTANTINO RAMISES, CARLITO
REAMBONANCA, ARCADIO REDUCTO, LORENZO REYES,
HERMOGENES RULI, NESTOR RULIDA, BENITO SALOVERES,
FLORENTINO SANICO, GREGORIO DELOS SANTOS, CATALINO SELIM,
TEOGENIES SARVIDA, FRANCISCO SENDO, CATALINO SERNA,
CELSO SOLANTE, ROBERTO SOLOMON, MARIA SUEMITH, MEMORITO
TAER, SIMEON TAGBILARAN, GREGORIO TELEN, PASCUAL TELEN,
JAIME TIBALLA, CARLITO TIO, DOMINADOR TIO, JAMBO TIO, SAMSON
TIO, MARTIN TIO, CANDIDO TORREJOS, JOSE TORREON, CORCOPIO
TORRES, EMERITO TUMALA, PETRONILO TUMALA, VECIO AGUILON,
LEOPOLDO CEBUCO, CRISANTO LABRADOR, DIONISIO GULFAN,
TEODORO LORETO, VICENTE TIO, BERNARDO MALUBAY, REMO
CUIZON, PETRONILO LOR, EDGARDO DOMINGO, TOMAS LINGO,
ARMANDO ALTRES AND DANILA SABINO, petitioners
vs.
HON. NATIONAL LABOR RELATIONS COMMISSION, EASTCOAST
DEVELOPMENT ENTERPRISES, SPOUSES CONSTANCIO and
LEODEGARIA MAGLANA, ANTONIO FLORENDO, MIRIAM MAGLANA
SANTAMARIA, MAGLANA AND SONS MANAGEMENT CORPORATION,
EASTCOAST DEVELOPMENT ENTERPRISES, INCORPORATED, AND
GEORGE Q. CHOY, respondents.
Grace Lina A. Fuentes for petitioners.
Pedro S. Castillo for Eastcoast Dev't. Enterprises, Inc.
Ernesto M. Nombrado for respondents.

MELENCIO-HERRERA, J.:
Alleging grave abuse of discretion, amounting to lack of jurisdiction, petitioners
numbering 170 in all, assail the Decision of the National Labor Relations
Commission (NLRC) in NLRC Case No. 402-LR- XI-81 LRD Case No. STF-
314-78) entitled "Nathaniel Olacao, et als., vs. Eastcoast Development
Enterprises, et al.," promulgated on 18 September 1987, setting aside the
Decision of Labor Arbiter Jose O. Libron awarding separation pay to
petitioners, and sustaining, instead, private respondents' appeal on the ground
of res judicata or, bar by prior judgment (Annex "A", Petition).
The following background facts, arranged chronologically, will put the
controversy in proper perspective:
1. Petitioners were the former workers of private respondent Eastcoast
Development Enterprises, then a single proprietorship, owned, operated and
managed by respondents Spouses Constancio and Leodegaria Maglana,
Antonio Florendo and Miriam Maglana Santamaria ("Eastcoast," for brevity). It
operated a logging concession at Kinablangan Baganga, Davao Oriental (p.
233, Rollo).lâwphî1.ñèt

a) On 28 November 1977, petitioners filed with the then Ministry of Labor,

Region XI, a complaint for non-payment of wages and emergency living
allowance (LRD Case No. ROXIMC 857-77) entitled Olacao and 189 others vs.
Eastcoast Development Enterprises, Inc." The Complaint was later certified to
the Labor Arbitration Branch of the NLRC and docketed as NLRC Case No.
897-MC-XI-78 (hereinafter, the "Unpaid Wages Case").
b) In December, 1977, "Eastcoast" decided to totally and permanently close its
business. Thus, on 5 December 1977, Antonio Florendo, the Executive Vice-
president and General Manager, filed an application with the Regional Director
of the then Ministry of Labor to formally close its business on account of
business reverses (Annex "C-2," Petition, p. 167, Rollo). This application was
favorably acted upon on 15 December 1977 by the Regional Director of the
Ministry of Labor, Regional Office No. XI, Davao City, on condition that
"Eastcoast" should pay all unpaid wages and separation pay of all its
employees (Annex "C-3," ibid. p. 168, Rollo).
c) On 5 January 1978 the owners of "Eastcoast" sold all their shareholdings to
private respondent, George Q. Choy, and the company was thereafter known
as Eastcoast Development Enterprises, Inc. ("Eastcoast, Inc.," for short).
d) On 21 January 1978, "Eastcoast, Inc.," under a new management, paid its
381 employees including petitioners herein, all their unpaid wages living
allowances, overtime pay and all other benefits due them and termination pay,
computed up to 30 November 1977. Upon receiving said payments, petitioners
signed sworn individual documents entitled "Receipt and Release" whereby
they:
absolutely and forever release and discharge the Eastcoast Development
Enterprises, its successors and assigns, of any and all claims and liabilities
whatsoever insofar as my past salaries/wages, termination pay, overtime pay
and other privileges accorded me by law and/or any other claims are
concerned. (Annex "C-4", Petition, p. 169, Rollo).
e) On 30 May 1980, Labor Arbiter Porfirio T. Reyes dismissed the "Unpaid
Wages Case" (NLRC Case No. 897-MC- XI-78) for lack of merit and for being
moot and academic in view of the "Receipt and Release" documents executed
by the complainant- workers.
f) On 30 September 1982, the appeal interposed by petitioners to the NLRC
was dismissed by its First Division, stating in part:
After a careful review of the entire record, we find no justification for disturbing
the Labor Arbiter's findings and conclusions. In our own view, the payment of
the amounts stated in the deeds above referred to has rendered to (sic) this
case academic because the receipt by the complainants of the said amounts
is an established fact and there is no showing that their execution of the said
documents was tainted by anything that vitiates free consent. Indeed, it is
difficult to believe that more than 300 people could at the same time be forced
to execute the same against their will. (p. 2, Decision, p. 240, Rollo)
2. In the meantime, on 27 November 1978, petitioners filed another Complaint
against "Eastcoast, Inc." this time for Illegal Dismissal LRD Case No. STF-314-
78) with the Regional Office No. XI, Davao City, of the then Ministry of Labor.
They prayed for "reinstatement . . . with full backwages from the date of the
illegal dismissal." The Complaint was later on certified to the Arbitration Branch
and docketed as NLRC Case No. 402-LR-XI-81 (the "Illegal Dismissal" Case).
a) In its Answer (Annex "C", Petition), "Eastcoast, Inc.," denied that it had
dismissed petitioners illegally inasmuch as the total closure of its establishment
was with prior clearance of the Regional Director of Labor, Region XI, Davao
City, and that pursuant to the latter's Order of 15 December 1977, its
employees including complainants, were fully compensated "all unpaid wages
earned and separation pay equivalent to 15 days for every year of service." As
proof thereof, attached to the Answer was the "Receipt and Release" sworn to
by petitioner Nathaniel Olacao (Annex "C- 4").
b) On 21 April 1980 "Eastcoast, Inc." filed a Manifestation in the "Illegal
Dismissal Case" to the effect that the "Unpaid Wages Case" was still pending,
and that "Eastcoast Development Enterprises" and Eastcoast Development
Enterprises, Inc., are two different entities (p. 3, Manifestation, p. 196 Rollo).
c) At that point in time, it appears that the "Unpaid Wages Case" was still on
appeal with the NLRC.
d) On 30 July 1981, petitioners filed an Amended Complaint in the "Illegal
Dismissal Case," impleading as additional respondents spouses Constancio
and Leodegaria Maglana, Antonio Florendo, Miriam Maglana Santamaria,
Maglana and Sons Management Corporation, Eastcoast Development
Enterprises, Inc., and George Q. Choy (Annex "L", p. 203, Rollo). The
Amended Complaint alleged that the impleaded respondents connived with
one another in entering into a fictitious contract of transferring the ownership of
"Eastcoast" to George Q. Choy to effect the illegal dismissal of petitioners.
Thus, all of them should be considered jointly and severally liable for the acts
complained of.
e) The newly impleaded private respondents all denied liability. In its own
Answer, filed on 19 August 1981, "Eastcoast, Inc." denied any connivance with
them in the dismissal of complainants (Annex "O", p. 215, Rollo). lâwphî1.ñèt

f) In the interim, the timber license of Eastcoast, Inc., was cancelled and since
then up to the present it has completely ceased operations (Memorandum for
Private Respondent, pp. 4 and 8).
g) On 20 May 1986, the NLRC Regional Arbitration Branch, Branch XI, through
Labor Arbiter Jose Q. Libron, rendered a Decision in the "Illegal Dismissal
Case," dismissing the charge of illegal dismissal for lack of merit and awarding
separation pay. Thus:
CONFORMABLY WITH THE FOREGOING, judgment is hereby rendered:
(1) Dismissing the charge of illegal dismissal for lack of merit, thus denying the
prayer for reinstatement and backwages;
(2) Ordering respondents Eastcoast Development Enterprises, spouses
Constancio Maglana and Leodegaria Maglana Antonio Florendo, Miriam
Maglana Santamaria, Maglana and Sons Management Corporation, Eastcoast
Development Enterprises, Inc., and George Q. Choy to pay jointly and severally
the 170 complainants their separation pay equivalent to one month pay per
year of service.
SO ORDERED. (Annex "Q", pp. 228-229, Rollo) (emphasis supplied)
h) On 2 July 1986, private respondents received copy of Labor Arbiter Libron's
Decision.
i) On 14 July 1986, private respondents filed their Notice of Appeal and Appeal
Memorandum in the "Illegal Dismissal Case" attaching thereto, admittedly for
the first time: (1) Labor Arbiter Reyes' Decision in the "Unpaid Wages Case"
LRD Case No. MC 857-77), dated 30 May 1980, dismissing the case because
payments of wages had already been made; and (2) the NLRC Decision on
appeal (NLRC Case No. 897-MC-XI-78), promulgated on 30 September 1982,
affirming Labor Arbiter Reyes' Decision.
j) On 18 September 1987, respondent NLRC reversed Labor Arbiter Libron's
Decision in the "Illegal Dismissal Case," with the following findings:
. . . that sometime in November 1977, the present complainants filed a money
claim against respondents before the Labor Arbitration Branch of Regional
Office No. XI, Davao City, which was docketed as NLRC Case No. 897-MC-XI-
78 LRD Case No. MC 85777); that one of the issues involved in said case was
whether the documents signed by complainants and denominated as Receipts
and Release were legally valid and binding; that the said documents show that
herein complainants received the specified amounts from respondents
representing full and final payment of their salaries, wages, allowances,
overtime pay and other compensation legally due them; together with
termination pay and they forever release and discharge the respondents, its
sucessors and assigns of any claims and liabilities whatsoever; that on May
30, 1980, the Labor Arbiter rendered a decision dismissing the case for lack of
merit and being moot and academic; . . . that complanants in the above-entitled
case appealed the said decision of the Labor Arbiter to the National
LaborRElations Commsission which affirmed the decision of the Labor Arbiter,
....
Ordinarily, this Commission (NLRC) does not consider evidence and other
pertinent documents not submitted during the proceedings before the
Arbitration level and submitted for the first time on appeal.
However, we are constrained to consider the evidence, ANNEXES 'A' and 'B'
of the appeal which are the decision of the Labor Arbiter dated May 30, 1980
and the decision of the First Division of this Commission promulgated on
September 30, 1982 affirming the appealed decision of the Srbiter below.
It appears from the aforesaid decision of Labor Arbiter Porfirio Reyes dated
May 30, 1980 which was affirmed by the First Division of the Commisssion that
complainants in the case at bar were already paid their several maoney claims
including termination pay.
We find therefore that this issue of termination pay in the cases under
consideration was already resolved and passed upon in the said Decisions.
This is clear case of res judicata or barred (sic) by prior judgement. (Annex "A",
Petition, pp. 151-152, Rollo) (Emphasis supplied).
k) Petitioners' Motion for Reonsideration having been denied, they availed of
the present Petition for Cetiorari, filed on 23 January 1988.
On 23 January 1989, we resolved to give due course and required the submittal
of memoranda, the last of which was filed on 5 June 1989.
The pivotal issue for resolution is whether or not the NLRC gravely abused its
discretion amounting to lack of jurisdiction in reversing Labor Arbiter Libron's
Decision on the principal ground of res judicata.
Petitioners, joined by the SOlicitor General, fault the NLRC with grave abuse
of discretion. The NLRC and private respondents, on the otherhand, negate
the charge.
We uphold the NLRC.
In actual fact, the pendency of the "Unpaid Wages Case" (NLRC Case No.
897-MC-XI-78) was not raised for the first time when the "Illegal Dismissal
Case" was appealed to the NLRC. For, on 21 April 1980, before the Decision
was rendered in the "Unpaid Wages Case", "Eastcoast" had filed a
Manifestation in the "Illegal Dismissal Case," calling attention to the pendency
of the "Unpaid Wages Case" "filled sometime in the last quarter of 1977" and
verified by one of the petitioners herein Nathaniel Olaca (Annex "J", Petition).
Counsel for the complainants therein was the same counsel in the present case
(ibid). Too, in "Eastcoast's" Answer (Annex "D", ibid) in the "Illegal Dismissal
Case," it maaade specific reference to the "Receipt and Release" individually
executed by petitioners. It should have been no surprise to complainants,
therefore, when that matter was invoked on appeal before the NLRC. Besides,
the NLRC is empowered to take judicial notice of its own pronouncements.
Moreover, at the time said Manifestation was made on 21 April 1980, the
Decision in the "Unpaid Wages Case" had not yet been rendered having been
promulgated only on 30 May 1980, which Decision was affrimed by the NLRC,
First Divisionn, only on 30 September 1982. When "Eastcoast, Inc." appealed
the "Illegal Dismissal Case" on 14 July 1986 therefore, it was only then that it
could rightfully invoke the Decision in the "Unpaid Wages Case" and the
affirmance thereof by the First Division of the NLRC in 1982. It was in no
position to raise the same in its Answer, dated 19 August 1981, to the Amended
Complaint. But even then, it had allownaces and other benefits granted by the
New Labor Code of the Philippines and other applicable Presidential Decrees."
Thus no grave abuse of discretion can be attributed to the NLRC for concluding
that from the said Decisions, the issue of termination pay had already been
passed upon and resolved ; in other words, a clear case of 'res judicata' or bar
by former judgement. The NLRC found that complainants had already been
paid (p. 4, NLRC Resolution, September 19, 1987). Parties ought not to be
lâwphî1.ñèt

permitted to ligitate an issue more than once (Eternal Gardens Memorial Parks
Corp. vs. Court of Appelas, G.R. No. 73794, 19 September 1988). The
Decisions in the separatiion pay of peitioners.
But petitioners claim that the causes of action in the two cases were different
— in the "Unpaid Wages Case," money claims were involved; in the "Illegal
Dismissal Case," petitioners challenged their termination from employment.
The difference, however, appears only oon the surface. In essence, because
petitioners claimed that they had been illegally dismissed, they prayed for "full
backwages from the date of illegal dismissal." In fact, it was separation pay that
was awarded to them in Labor Arbiter Libron's Decision in the "Illegal Dismissal
Case," who found that "complainants' termination was effected on a valid
ground authorized by law, but considering that termination and closure was
effected without prior clearance . . . complainants should be granted separation
pay" (p. 7 Decision). The charge of illegal dismissal was dismissed for lack of
merit and complainant's prayer for reinstatement and bacckwages was denied
(p. 12, ibid).
Peitioners further contend that their acceptance of separation pay does not
operate as a waiver of their claims in the "Illegal Dismissal Case." Indeed,
jurisprudence exists to the effect that a deed of release or quitclaim cannot bar
an employee from demanding benefits to which he is legally entitled (Fuentes
vs. NLRC, G.R. No. 76835, November 24, 1988); that quitclaims and/or
complete releases executed by the employees do not stop them from pursuing
theri claim arising from the unfair labor practice of the employer (Garcia vs.
NLRC, G.R. No. 67825, September 4, 1987, 153 SCRA 639); and that
employees who received their received their dismissal and that the acceptance
of those benefits would not amount to estoppel (Mercury Drug Co, Inc. vs.
Court of Industrial Relations, G.R. No. 23357, April 30, 1974, 56 SCRA 694);
De Leon vs. NLRC, G.R. No. 52056, October 30, 1980, 100 SCRA 691).
A telling difference from the cited cases, however, is the fact that the issue of
the validity of the releases, executed by petitioners under oath, was squarely
raised and resolved in Labor Arbiter Reyes' Decision in the "Unpaid Wages
Case," which found categorically that:
The document relieved absolutely and forever released and discharged the
Eastcoast Development Enterprises, Inc., its sucessors and assigns, of any
and all calims and liabilities whatsoever insofar as their pastt salaries,
termination pay, overtime pay and other privileges accorded them by law"
(Emphasis supplied)
That the Decision was renderd on 30 May 1980 and was affirmed by the NLRC,
First Division, on 30 September 1982, which found no justification for disturbing
those findings, with this additional observation:
More than the above, the record shows that the complainants received, by
virtue of the release documents, amounts which exceeded by leaps and
bounds their original claims for unpaid wages and allowances.
The aforesaid Decisions in the "Unpaid Wages Case" had become final and
executory.
It may be that private respondents' appeal was filed oin the 12th day contrary
too Article 223 of the Labor Code prescribing ten (10) calendar days as the
reglemntary period of appeal. Private respondents claim that the tenth day fell
on a Saturday when offices of the NLRC were allegedly clsed sa that their last
day to appeal was Monday, July 14th. That is nort correct. Saturday is still
considered a business day and if the last day to appeal falls on a Saturday, the
act is still due on that day (SM Agri and Gen. Machineries vs. NLRC, etal., G.R.
No. 74806, January 9, 1989). lâwphî1.ñèt

Nonetheless, as the NLRC had pointed out in its Comment:

True, the appeal to it was filed on the 12th day but public respondent wanted
to avoid ruling on the same issue of separation pay for that matter had been
judicially settled in the other case. It merely exercised its prerogative in relaxing
its rule regarding the ten (10) calendar day period for filing appeals (Sec. 1,
Rule VIII of the Revised Rules of the NLRC) from decisions of its Labor
Arbiterss, as it haaad done so in similar cases . . . (p. 6, Comment, p. 333,
Rollo)
Indeed, the perfection of an appeal wihtin the reglementary period is
considered juridictional. Hoever, ther was legal jusitifcation for the NLRC to
have given due course to the appeal, namely, to obviate a miscarriage of
justice. In this proceeding, the issue of separation pay had been judicially
settled, with finality, in another case, also by the NLRC. The NLRC, therefore,
had no alternative except to forestall the grant of separation pay twice. The
principle agasint unjust enrichment must be held applicable to labor cases as
well.
WHEREFORE, the challenged Decision of the National Labor Relations
Commission in NLRC Case No. 402-LR-XI-81 is hereby AFFIRMED in toto.
SO OREDERED.
Paras, Padilla, Sarmiento and Regalado, JJ., concur.

G.R. No. 102845 February 4, 1994

LOADSTAR SHIPPING CO., INC., petitioner,
vs.
GERARDO H. GALLO, ARNALDO GRIJALDO, RUBEN L. ANGELES,
ARNOLD F. BARAQUIN, PASTOR CALCITA, ROGELIO PADOL and THE
NATIONAL LABOR RELATIONS COMMISSION, respondents.
King, Capuchino, Tan & Associates for petitioner.
The Solictor General for public respondent.
PADILLA, J.:
Before the Court is a petition for certiorari with application for preliminary
injunction and/or temporary restraining order to declare the nullity of the Order
dated 24 September 1991 of the National Labor Relations Commission (NLRC)
which set aside its earlier resolution dated 17 November 1989 affirming the
decision of the Labor Arbiter in "Gerardo Gallo, et al., versus Loadstar Shipping
Co.," NLRC-NCR 7-2327-87.
Private respondents Gerardo H. Gallo, Arnaldo Grijaldo, Ruben L. Angeles,
Arnold F. Baraquin, Pastor Calcita and Rogelio Padol were employees of
petitioner company formerly assigned to one of its vessels which was
permanently moored at Isla Puting Bato, North Harbor, Manila due to its
unseaworthy condition.
Assessing that its vessels were no longer serviceable and had been docked
for more than two (2) years, petitioner decided to settle whatever monetary
obligations were due to private respondents.
Sometime in May 1987, private respondents were called to the principal office
of petitioner by the Assistant Administrative Officer for Personnel,
Mr. Ricardo Aquino to facilitate the payment of all monetary benefits due
them under the law. Upon receiving their respective payments, private
respondents executed individual Release and Quitclaim papers together with
disembarkation orders and inventories.1
In July 1987, private respondents filed a complaint for illegal dismissal,
underpayment of wages, non-payment of overtime pay, thirteenth month pay
and allowance against petitioner with the Arbitration Branch of the National
Labor Relations Commission. They claimed that the reason why they were
called in May 1987 by Mr. Ricardo Aquino to the principal office was for the
purpose of paying their unpaid sick leave and vacation leave pay of several
months when their ship was on standby status. They alleged that after
receiving their unpaid sick leave an vacation leave pay, they were required by
Mr. Aquino to sign folded documents under threat that if they would not sign
said documents, the money given to them for unpaid sick and vacation leave
would be taken back. They averred that they signed the folded documents
because they were in dire need of money.
When private respondents attempted to report for work, they were allegedly
informed that they were already dismissed in view of the Quitclaim and
Release papers they had signed.
Petitioner (then respondent) countered that its act cannot be construed as
constituting an illegal dismissal of private respondents. Since the vessel
where private respondents (as complainants) were assigned was regarded as
unseaworthy and permanently moored at the North Harbor, Manila for more
than two (2) years coupled with the fact that the vessel was no longer
serviceable, private respondents could thus be lawfully separated from work
provided they are paid all monetary benefits due them under the law. In this
case, the fact of payment of their respective separation pay is evidenced,
according to petitioner, by their verified Release and Quitclaim. With respect
to the other issues raised by private respondents, petitioner maintains that
they were all paid and settled.
After hearing the case, the Labor Arbiter rendered a decision on
22 September 1988, the dispositive part of which reads:
WHEREFORE, premises considered, Decision is hereby rendered ordering
the respondents to pay complainants their separation pay equivalent to half
month pay for every year of service and their service incentive leave pay
equivalent to fifteen (15) days salary, minus the amount already received by
the complainants appearing in the Quitclaim and Release submitted by the
respondents. Other claims are hereby DISMISSED for lack of merit.
SO ORDERED.2
Private respondents appealed to the public respondent National Labor
Relations Commission. On 17 November 1989, public respondent
promulgated a resolution affirming the disputed decision, to wit:
Accordingly, the decision appealed from is hereby AFFIRMED and the instant
appeal dismissed for lack of merit and for being pro forma.
SO ORDERED.3
From the said resolution, private respondents filed a motion for
reconsideration. Petitioner was, however, not furnished a copy of private
respondent's motion for reconsideration, as attested by a certification 4 issued
by public respondent dated 1 December 1991 that no registry receipt was
attached to the motion for reconsideration.
Notwithstanding this omission, respondent Commission gave due course to
the said motion and issued an order on 24 September 1991, the dispositive
part of which reads:
Accordingly, the resolution promulgated on November 17, 1989 is hereby set
aside, and the appealed decision is modified to the extent as concerns that
portions deducting whatever amounts the complainants earlier received from
the awarded separation pay and service incentive leave pay.
SO ORDERED.5
On 7 October 1991, petitioner was surprised to receive another copy of the
NLRC Resolution of 17 November 1989. When it sought clarification from the
NLRC, petitioner discovered the existence of the motion for reconsideration
filed by private respondents and the Order of 24 September 1991 modifying
that of 17 November 1989. The records of public respondent also showed
that the order of 24 September 1991 was duly served petitioner, what it
actually received on that date was the resolution of 17 November 1989.
Since the resolution or order of 24 September 1991 had with time become
final executory, petitioner deemed that it was already barred from filing a
motion for reconsideration. Instead, it filed the present petition for certiorari
with application for preliminary injunction and/or temporary restraining order.
On 16 December 1991, the Court issued a temporary restraining order
directing public respondent to refrain from enforcing the questioned order
dated
24 September 1991.
On 17 August 1992, the Court resolved to give due course to the petition and
required the submission of memoranda, the last of which was filed on
23 August 1993.
This petition for certiorari cites as grounds therefor —
(a) GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF
JURISDICTION WHEN IT (NLRC) MODIFIED THE DECISION OF THE
LABOR ARBITER DATED 22 SEPTEMBER 1988
TO THE EXTENT THAT IT DISALLOWED DEDUCTIONS OF
THE AMOUNTS ALREADY RECEIVED BY PRIVATE RESPONDENTS
CONTAINED IN THEIR INDIVIDUAL AND SEPARATE RELEASE AND
QUITCLAIMS;
(b) THE RESOLUTION OF RESPONDENT COMMISSION DATED 24
SEPTEMBER 1991 WAS RENDERED IN FRAUD OF PETITIONER, ASIDE
FROM BEING ILLEGAL PER SE, HENCE NULL VOID AB INITIO.
The disposition of the real issue raised by petitioner hinges on a
determination of whether or not the document executed by private
respondents absolutely and forever released and discharged petitioner from
any and all claims and liabilities whatsoever insofar as concern past salaries,
and other privileges accorded private respondents, if any, by law, including
their separation pay.
As a rule, the original and exclusive jurisdiction to review a decision or
resolution of respondent NLRC, in a petition for certiorari under Rule 65 of the
Rules of Court, does not include a correction of its evaluation of the evidence
but is confined to issues of jurisdiction or grave abuse of discretion.6
The NLRC's factual findings, if supported by substantial evidence, are entitled
to great respect and even finality, unless petitioner is able to show that it
simply and arbitrarily disregarded evidence before it or had misapprehended
evidence to such an extent as to compel a contrary conclusion if such
evidence had been properly appreciated.
In the case at bench, in ruling out a case of illegal dismissal, the Labor Arbiter
who heard the case observed that:
To our mind, these (the) contentions of the complainants are hard to believe,
considering that amount given to them is too big to consider as payment for
sick and vacation leave. Complainants Arnaldo
Grijaldo received the amount of P9,035.55; Gerardo h. Gallo received
P9,389.60; Pastor Calcita received P8,100.00; Rogelio Padol received
P4,410.00; Ruben Angeles P6,058.88; Arnold Baraquin received P4,080.00.
Complainants themselves admitted in their affidavit and
on cross-examination that the ships where they were boarding was on "stand-
by-nature" for so many months or up to the present.
xxx xxx xxx
On the issue of service incentive leave pay, we examined the records of the
case and from the evidence submitted by the respondents no payment
appear to have (sic) made. . . .
In view of our (the) findings that the complainants were not dismissed but
separated from their job because the ships were (sic) they were boarding
were in stand-by-nature since 1987 up to the present, complainants should
be given their separation pay. However, considering that as admitted by the
complainants they already received certain amounts from the respondents it
is just proper to deduct the said amount from their separation pay.7
In its decision promulgated on 17 November 1989 affirming that of the Labor
Arbiter and dismissing the appeal for lack of merit, public respondent NLRC
noted that —
The contention of complainants that what they received pertains only to their
sick leave and vacation leave with pay strains the imagination considering the
substantial amounts paid by respondents to complainants and the fact that no
specific year or number of days of sick leave and vacation leave with pay
were established by the complainants. Bare and unconvincing statements
could not prevail over the evidence of payments. Lastly, we, too, are in
agreement that what transpired was separation from serviceable ships.
However, they were not paid full amount of separation pay due them under
the law. We thus hereby affirm the Labor Arbiter's Order for respondents to
pay complainants separation pay equivalent to one-half (½) month pay for
every year of service less the amount already received by each of them.8
(emphasis supplied)
Acting on the private respondents' motion for reconsideration, public
respondent abandoned its earlier position and ruled that the separation pay
and service incentive leave pay awarded by the Labor Arbiter could not have
been covered by the release and quitclaim documents accomplished by
private respondents, absent a definitive finding that the said complainants
were earlier paid separation pay and service incentive leave pay. In other
words, the necessary implication is that while negating fraud, force and
intimidation in the execution of the said release documents, the same should
cover only private respondents' claims for accumulated vacation and sick
leave pay and not their separation pay, because the labor arbiter's decision
does not expressly say so. Curiously, however, the assailed resolution does
not state how and why it arrived at such conclusions.
The Solicitor General, in behalf of public respondent, similarly argues in his
comment that:
. . . Definitely, this is a general statement which could cover practically any
and all claims arising out of employment. Resultantly, private respondents
would not be sufficiently informed that what they received was specifically for
separation pay and service incentive leave pay.9
In Periquet vs. NLRC, 10 this Court ruled that:
Not all waivers and quitclaims are invalid as against public policy. If the
agreement was voluntarily entered into and represents a reasonable
settlement, it is binding on the parties and may not later be disowned simply
because of a change of mind. It is only where there is clear proof that the
waiver was wangled from an unsuspecting or gullible person or the terms of
settlement are unconscionable on its face, that the law will step in to annul
the questionable transaction. . . .
Under prevailing jurisprudence, a deed or release or quitclaim cannot bar an
employee from demanding benefits to which he is legally entitled. 11 Similarly,
employees who received their separation pay are not barred from contesting
the legality of their dismissal and that the acceptance of such benefits would
not amount to estoppel. 12
In the case at hand, the issue of the validity of the releases executed by
private respondents under oath was squarely raised and resolved in the
Labor Arbiter's finding that their termination from the service was authorized
under the law, brought about by the continued unserviceability of their ships.
The award to private respondents of separation pay was a lawful
consequence of their separation from the service.
It is not at all incongruous to grant or sustain an award of separation pay and
at the same time uphold the validity of the Quitclaim and Release executed
by the recipients thereof, provided there is substantial evidence on record to
show that the latter covered, among other things, the proper amount of
separation pay.
In Olacao vs. NLRC, 13 the petitioners signed sworn individual documents
entitled "Receipt and Release" covering their past salaries/wages, overtime
pay, termination pay, and other privileges accorded them by law. This was
after they filed a complaint for unpaid wages before the then Ministry of
Labor. Later, they filed a case for illegal dismissal, contending that their
acceptance of separation pay did not operate as a waiver of their claims in
the illegal dismissal case. In dismissing the petition, the Court affirmed the
ruling of the NLRC which observed that:
. . . More than the above, the record shows that the complainants received,
by virtue of the release documents, amounts which exceed by leaps and
bounds their original claims for unpaid wages and allowances.
xxx xxx xxx
In this proceeding, the issue of separation pay had been judicially settled,
with finality, also by the NLRC. The NLRC, therefore, had no alternative
except to forestall the grant of separation pay twice. The principle against
unjust enrichment must be held applicable to labor cases as well.
xxx xxx xxx
Parenthetically, the issue of separation pay has likewise been settled in the
case at bench both in the decision of the Labor Arbiter of 21 September 1991
and in that of public respondent dated 17 November 1987 affirming said
decision. The NLRC resolution categorically stated that:
Perusal of the records shows that respondents adduced documents in
support of their position, Payrolls and vouchers were submitted to show
payment to complainants of 13th month pay, 5 days service incentive leave
and other benefits being claimed by complainants (See Annexes 1 to 26
Supplemental Position Paper of Respondents). . . . We find no legal and
factual basis to reverse the findings of the Labor Arbiter. . .
xxx xxx xxx
Lastly, we, too are in agreement that what transpired was separation from
service brought about by the absence of serviceable ships. However, they
were not paid the full amount of separation pay due them under the law. . . .
(emphasis supplied) 14
It appears clear that although there was no express statement in the decision
of the Labor Arbiter that the disputed Quitclaim and Releases covered in fact
private respondents' separation pay and other benefits — unlike in the
Olacao case — private respondents in this case have not sufficiently
established by competent and relevant evidence that the amounts they each
received from petitioner were for accumulated unpaid sick and vacation leave
pay only.
Under these circumstances, the labor arbiter committed no reversible error
when he upheld the validity of the quitclaims while at the same time awarding
separation pay. It is difficult to comprehend when public respondent maintains
that there was no "definitive finding" that complainants were earlier paid
separation pay although not in full, inspite of the evidence adduced in the
position papers of the parties and at the hearing of the case before the Labor
Arbiter.
We agree with petitioner's observation that "the resolution of
17 November 1989 affirming the decision of the labor Arbiter was based on
an important piece of evidence — the Supplemental Position Paper of herein
petitioner with its 26 Annexes which showed that herein private respondents
were regularly receiving their monetary benefits, including their sick and
vacation leave pay and service incentive leave pay. 15 This evidence was
never controverted by private respondents both in the arbitral level and on
their
appeal — "where the primary and antecedent burden of proving said claims
rested on them." 16 To rule otherwise would be a palpable and prejudicial error
as can be implied from the assailed resolution of 24 September 1991. For
"the principle against unjust enrichment must be held applicable to labor
cases as well." 17
The Court also notes the fact that public respondent NLRC gave due course
to private respondents' motion for reconsideration despite absence of proof of
service thereof on petitioner. Under Rule VII, section 14 of the Rules of
Procedure of the NLRC —
Motion for reconsideration of any order, resolution or decision of the
Commission shall not be entertained except when based on palpable or
patent errors, provided that the motion is under oath and filed within ten (10)
calendar days from receipt of the order, resolution or decision, with proof of
service that a copy of the same has been furnished, within the reglementary
period, the adverse party and provided further, that only one such motion
from the same party shall be entertained. (emphasis supplied)
Ordinarily, a procedural lapse may be justified (or disregarded) so as to
render substantial justice to the parties concerned and all in the interest of
due process.
However, in this particular instance, respondent NLRC not only set at naught
its own rules but disregarded as well relevant evidence material to the
resolution of the case. Its findings of facts unsupported by substantial
evidence, in the order dated 24 September 1991, cannot bind the Court.
Hence, its conclusions in said order must be struck down for being whimsical
and capricious, arrived at with grave abuse of discretion.
WHEREFORE, the petition for certiorari is GRANTED. The order of
respondent National Labor Relations Commission, dated 24 September 1991,
is SET ASIDE and the decision of the Executive Labor Arbiter dated
27 September 1988 as affirmed by respondent National Labor Relations
Commission in its resolution dated 17 November 1989 is hereby
REINSTATED. The Temporary Restraining Order heretofore issued by the
Court is hereby made PERMANENT.
SO ORDERED.

G.R. No. 87297 August 5, 1991

ALFREDO VELOSO and EDITO LIGUATON petitioners,
vs.
DEPARTMENT OF LABOR AND EMPLOYMENT, NOAH'S ARK SUGAR
CARRIERS AND WILSON T. GO, respondents.
CRUZ, J.:
The law looks with disfavor upon quitclaims and releases by employees who
are inveigled or pressured into signing them by unscrupulous employers
seeking to evade their legal responsibilities. On the other hand, there are
legitimate waivers that represent a voluntary settlement of laborer's claims
that should be respected by the courts as the law between the parties.
In the case at bar, the petitioners claim that they were forced to sign their
respective releases in favor of their employer, the herein private respondent,
by reason of their dire necessity. The latter, for its part, insists that the
petitioner entered into the compromise agreement freely and with open eyes
and should not now be permitted to reject their solemn commitments.
The controversy began when the petitioners, along with several co-
employees, filed a complaint against the private respondent for unfair labor
practices, underpayment, and non-payment of overtime, holiday, and other
benefits. This was decided in favor of the complainants on October 6,1987.
The motion for reconsideration, which was treated as an appeal, was
dismissed in a resolution dated February 17, 1988, the dispositive portion of
which read as follows:
WHEREFORE, the instant appeal is hereby DISMISSED and the questioned
Order affirmed with the modification that the monetary awards to Jeric
Dequito, Custodio Ganuhay Conrado Mori and Rogelio Veloso are hereby
deleted for being settled. Let execution push through with respect to the
awards to Alfredo Veloso and Edito Liguaton.
On February 23, 1988, the private respondent filed a motion for
reconsideration and recomputation of the amount awarded to the petitioners.
On April 15, 1988, while the motion was pending, petitioner Alfredo Veloso,
through his wife Connie, signed a Quitclaim and Release for and in
consideration of P25,000.00,1 and on the same day his counsel, Atty. Gaga
Mauna, manifested "Satisfaction of Judgment" by receipt of the said sum by
Veloso.2 For his part, petitioner Liguaton filed a motion to dismiss dated July
16, 1988, based on a Release and Quitclaim dated July 19,1988 ,3 for and in
consideration of the sum of P20,000.00 he acknowledged to have received
from the private respondent.4
These releases were later impugned by the petitioners on September 20,
1988, on the ground that they were constrained to sign the documents
because of their "extreme necessity." In an Order dated December 16, 1988,
the Undersecretary of Labor rejected their contention and ruled:
IN VIEW THEREOF, complainants Motion to Declare Quitclaim Null and Void
is hereby denied for lack of merit and the compromise
agreements/settlements dated April 15, 1988 and July 19, 1988 are hereby
approved. Respondents' motion for reconsideration is hereby denied for
being moot and academic.
Reconsideration of the order having been denied on March 7, 1989, the
petitioners have come to this Court on certiorari. They ask that the quitclaims
they have signed be annulled and that writs of execution be issued for the
sum of P21,267.92 in favor of Veloso and the sum of P26,267.92 in favor of
Liguaton in settlement of their claims.
Their petition is based primarily on Pampanga Sugar Development Co., Inc.
v. Court of Industrial Relations,5 where it was held:
... while rights may be waived, the same must not be contrary to law, public
order, public policy, morals or good customs or prejudicial to a third person
with a right recognized by law. (Art. 6, New Civil Code) ...
... The above-quoted provision renders the quitclaim agreements void ab
initio in their entirety since they obligated the workers concerned to forego
their benefits, while at the same time, exempted the petitioner from any
liability that it may choose to reject. This runs counter to Art. 22 of the new
Civil Code which provides that no one shall be unjustly enriched at the
expense of another.
The Court had deliberated on the issues and the arguments of the parties and
finds that the petition must fail. The exception and not the rule shall be
applied in this case.
The case cited is not apropos because the quitclaims therein invoked were
secured by the employer after it had already lost in the lower court and were
subsequently rejected by this Court when the employer invoked it in a petition
for certiorari. By contrast, the quitclaims in the case before us were signed by
the petitioners while the motion for reconsideration was still pending in the
DOLE, which finally deemed it on March 7, 1989. Furthermore, the quitclaims
in the cited case were entered into without leave of the lower court whereas in
the case at bar the quitclaims were made with the knowledge and approval of
the DOLE, which declared in its order of December 16, 1988, that "the
compromise agreement/settlements dated April 15, 1988 and July 19, 1988
are hereby approved."
It is also noteworthy that the quitclaims were voluntarily and knowingly made
by both petitioners even if they may now deny this. In the case of Veloso, the
quitclaim he had signed carried the notation that the sum stated therein had
been paid to him in the presence of Atty. Gaga Mauna, his counsel, and the
document was attested by Atty. Ferdinand Magabilin, Chief of the Industrial
Relations Division of the National Capitol Region of the DOLE. In the case of
Liguaton, his quitclaim was made with the assistance of his counsel, Atty.
Leopoldo Balguma, who also notarized it and later confirmed it with the filing
of the motion to dismiss Liguaton's complaint.
The same Atty. Balguma is the petitioners' counsel in this proceeding.
Curiously, he is now challenging the very same quitclaim of Liguaton that he
himself notarized and invoked as the basis of Liguaton's motion to dismiss,
but this time for a different reason. whereas he had earlier argued for
Liguaton that the latter's signature was a forgery, he has abandoned that
contention and now claims that the quitclaim had been executed because of
the petitioners' dire necessity.
"Dire necessity" is not an acceptable ground for annulling the releases,
especially since it has not been shown that the employees had been forced to
execute them. It has not even been proven that the considerations for the
quitclaims were unconscionably low and that the petitioners had been tricked
into accepting them. While it is true that the writ of execution dated November
24, 1987, called for the collection of the amount of P46,267.92 each for the
petitioners, that amount was still subject to recomputation and modification as
the private respondent's motion for reconsideration was still pending before
the DOLE. The fact that the petitioners accepted the lower amounts would
suggest that the original award was exorbitant and they were apprehensive
that it would be adjusted and reduced. In any event, no deception has been
established on the part of the Private respondent that would justify the
annulment of the Petitioners' quitclaims.
The applicable law is Article 227 of the Labor Code providing clearly as
follows:
Art. 227. Compromise agreements. — Any compromise settlement, including
those involving labor standard laws, voluntarily agreed upon by the parties
with the assistance of the Bureau or the regional office of the Department of
Labor, shall be final and binding upon the parties. The National Labor
Relations Commission or any court shall not assume jurisdiction over issues
involved therein except in case of non-compliance thereof or if there is prima
facie evidence that the settlement was obtained through fraud,
misrepresentation or coercion.
The petitioners cannot renege on their agreement simply because they may
now feel they made a mistake in not awaiting the resolution of the private
respondent's motion for reconsideration and recomputation. The possibility
that the original award might have been affirmed does not justify the
invalidation of the perfectly valid compromise agreements they had entered
into in good faith and with full voluntariness. In General Rubber and Footwear
Corp. vs. Drilon,6 we "made clear that the Court is not saying that accrued
money claims can never be effectively waived by workers and employees."
As we later declared in Periquet v. NLRC:7
Not all waivers and quitclaims are invalid as against public policy. If the
1âw phi 1

agreement was voluntarily entered into and represents a reasonable

settlement, it is binding on the parties and may not later be disowned simply
because of a change of mind. It is only where there is clear proof that the
waiver was wangled from an unsuspecting or gullible person, or the terms of
settlement are unconscionable on its face, that the law will step in to annul
the questionable transaction. But where it is shown that the person making
the waiver did so voluntarily, with full understanding of what he was doing,
and the consideration for the quitclaim is credible and reasonable, the
transaction must be recognized as a valid and binding undertaking. As in this
case.
We find that the questioned quitclaims were voluntarily and knowingly
executed and that the petitioners should not be relieved of their waivers on
the ground that they now feel they were improvident in agreeing to the
compromise. What they call their "dire necessity" then is no warrant to nullify
their solemn undertaking, which cannot be any less binding on them simply
because they are laborers and deserve the protection of the Constitution. The
Constitution protects the just, and it is not the petitioners in this case.
WHEREFORE, the petition is DISMISSED, with costs against the petitioners.
It is so ordered.

[G.R. NO. 161003 : May 6, 2005]

FELIPE O. MAGBANUA, CARLOS DE LA CRUZ, REMY
ARNAIZ, BILLY ARNAIZ, ROLLY ARNAIZ, DOMINGO
SALARDA, JULIO CAHILIG and NICANOR LABUEN,
Petitioners, v. RIZALINO UY, Respondent.
DECISION
PANGANIBAN, J.:
Rights may be waived through a compromise agreement,
notwithstanding a final judgment that has already settled
the rights of the contracting parties. To be binding, the
compromise must be shown to have been voluntarily,
freely and intelligently executed by the parties, who had
full knowledge of the judgment. Furthermore, it must not
be contrary to law, morals, good customs and public policy.
The Case
Before us is a Petition for Review1 under Rule 45 of the
Rules of Court, assailing the May 31, 2000 Decision2 and
the October 30, 2003 Resolution3 of the Court of Appeals
(CA) in CA-GR SP No. 53581. The challenged Decision
disposed as follows:
"WHEREFORE, having found that public respondent NLRC
committed grave abuse of discretion, the Court hereby SETS
ASIDE the two assailed Resolutions and REINSTATES
the order of the Labor Arbiter dated February 27, 1998."4
The assailed Resolution denied reconsideration.
The Facts
The CA relates the facts in this wise:
"As a final consequence of the final and executory decision
of the Supreme Court in Rizalino P. Uy v. National Labor
Relations Commission, et. al. (GR No. 117983, September
6, 1996) which affirmed with modification the decision of
the NLRC in NLRC Case No. V-0427-93, hearings were
conducted [in the National Labor Relations Commission
Sub-Regional Arbitration Branch in Iloilo City] to determine
the amount of wage differentials due the eight (8)
complainants therein, now [petitioners]. As computed, the
award amounted to P1,487,312.69 x x x.
"On February 3, 1997, [petitioners] filed a Motion for
Issuance of Writ of Execution.
"On May 19, 1997, [respondent] Rizalino Uy filed a
Manifestation requesting that the cases be terminated and
closed, stating that the judgment award as computed had
been complied with to the satisfaction of [petitioners]. Said
Manifestation was also signed by the eight (8)
[petitioners]. Together with the Manifestation is a Joint
Affidavit dated May 5, 1997 of [petitioners], attesting to
the receipt of payment from [respondent] and waiving all
other benefits due them in connection with their complaint.
xxx
"On June 3, 1997, [petitioners] filed an Urgent Motion for
Issuance of Writ of Execution wherein they confirmed that
each of them received P40,000 from [respondent] on May
2, 1997.
"On June 9, 1997, [respondent] opposed the motion on the
ground that the judgment award had been fully satisfied.
In their Reply, [petitioners] claimed that they received only
partial payments of the judgment award.
xxx
"On October 20, 1997, six (6) of the eight (8) [petitioners]
filed a Manifestation requesting that the cases be
considered closed and terminated as they are already
satisfied of what they have received (a total of P320,000)
from [respondent]. Together with said Manifestation is a
Joint Affidavit in the local dialect, dated October 20, 1997,
of the six (6) [petitioners] attesting that they have no
more collectible amount from [respondent] and if there is
any, they are abandoning and waiving the same.
"On February 27, 1998, the Labor Arbiter issued an order
denying the motion for issuance of writ of execution and
[considered] the cases closed and terminated x x x.
"On appeal, the [National Labor Relations Commission
(hereinafter 'NLRC')] reversed the Labor Arbiter and
directed the immediate issuance of a writ of execution,
holding that a final and executory judgment can no longer
be altered and that quitclaims and releases are normally
frowned upon as contrary to public policy."5
Ruling of the Court of Appeals
The CA held that compromise agreements may be entered
into even after a final judgment.6 Thus, petitioners validly
released respondent from any claims, upon the voluntary
execution of a waiver pursuant to the compromise
agreement.7
The appellate court denied petitioners' motion for
reconsideration for having been filed out of time.8
Hence, this Petition.9
The Issues
Petitioners raise the following issues for our consideration:
"1. Whether or not the final and executory judgment of the
Supreme Court could be subject to compromise
settlement;
"2. Whether or not the petitioners' affidavit waiving their
awards in [the] labor case executed without the assistance
of their counsel and labor arbiter is valid;
"3. Whether or not the ignorance of the jurisprudence by
the Court of Appeals and its erroneous counting of the
period to file [a] motion for reconsideration constitute a
denial of the petitioners' right to due process."10
The Court's Ruling
The Petition has no merit.
First Issue:
Validity of the Compromise Agreement
A compromise agreement is a contract whereby the parties
make reciprocal concessions in order to resolve their
differences and thus avoid or put an end to a lawsuit.11
They adjust their difficulties in the manner they have
agreed upon, disregarding the possible gain in litigation
and keeping in mind that such gain is balanced by the
danger of losing.12 Verily, the compromise may be either
extrajudicial (to prevent litigation) or judicial (to end a
litigation).13
A compromise must not be contrary to law, morals, good
customs and public policy; and must have been freely and
intelligently executed by and between the parties.14 To
have the force of law between the parties,15 it must comply
with the requisites and principles of contracts.16 Upon the
parties, it has the effect and the authority of res judicata,
once entered into.17
When a compromise agreement is given judicial approval,
it becomes more than a contract binding upon the parties.
Having been sanctioned by the court, it is entered as a
determination of a controversy and has the force and effect
of a judgment.18 It is immediately executory and not
appealable, except for vices of consent or forgery.19 The
nonfulfillment of its terms and conditions justifies the
issuance of a writ of execution; in such an instance,
execution becomes a ministerial duty of the court.20
Following these basic principles, apparently unnecessary is
a compromise agreement after final judgment has been
entered. Indeed, once the case is terminated by final
 judgment, the rights of the parties are settled. There are
no more disputes that can be compromised.
Compromise Agreements
after Final Judgment
The Court is tasked, however, to determine the legality of a
compromise agreement after final judgment, not the
prudence of entering into one. Petitioners vehemently argue
that a compromise of a final judgment is invalid under Article
2040 of the Civil Code, which we quote:21
"Art. 2040. If after a litigation has been decided by a final
judgment, a compromise should be agreed upon, either or
both parties being unaware of the existence of the final
judgment, the compromise may be rescinded.
"Ignorance of a judgment which may be revoked or set aside
is not a valid ground for attacking a compromise." (Bold
types supplied)
The first paragraph of Article 2040 refers to a scenario in
which either or both of the parties are unaware of a court's
final judgment at the time they agree on a compromise. In
this case, the law allows either of them to rescind the
compromise agreement. It is evident from the quoted
paragraph that such an agreement is not prohibited or void
or voidable. Instead, a remedy to impugn the contract,
which is an action for rescission, is declared available.22 The
law allows a party to rescind a compromise agreement,
because it could have been entered into in ignorance of the
fact that there was already a final judgment. Knowledge of
a decision's finality may affect the resolve to enter into a
compromise agreement.
The second paragraph, though irrelevant to the present
case, refers to the instance when the court's decision is still
appealable or otherwise subject to modification. Under this
paragraph, ignorance of the decision is not a ground to
rescind a compromise agreement, because the parties are
still unsure of the final outcome of the case at this time.
Petitioners' argument, therefore, fails to convince. Article
2040 of the Civil Code does not refer to the validity of a
compromise agreement entered into after final judgment.
Moreover, an important requisite, which is lack of knowledge
of the final judgment, is wanting in the present case.
Supported by Case Law
The issue involving the validity of a compromise agreement
notwithstanding a final judgment is not novel. Jesalva v.
Bautista23 upheld a compromise agreement that covered
cases pending trial, on appeal, and with final judgment.24
The Court noted that Article 2040 impliedly allowed such
agreements; there was no limitation as to when these
should be entered into.25 Palanca v. Court of Industrial
Relations26 sustained a compromise agreement,
notwithstanding a final judgment in which only the amount
of back wages was left to be determined. The Court found
no evidence of fraud or of any showing that the agreement
was contrary to law, morals, good customs, public order, or
public policy.27
Gatchalian v. Arlegui28 upheld the right to compromise prior
to the execution of a final judgment. The Court ruled that
the final judgment had been novated and superseded by a
compromise agreement.29 Also, Northern Lines, Inc. v. Court
of Tax Appeals30 recognized the right to compromise final
and executory judgments, as long as such right was
exercised by the proper party litigants.31
Rovero v. Amparo,32 which petitioners cited, did not set any
precedent that all compromise agreements after final
judgment were invalid. In that case, the customs
commissioner imposed a fine on an importer, based on the
appraised value of the goods illegally brought to the country.
The latter's appeal, which eventually reached this Court, was
denied. Despite a final judgment, the customs commissioner
still reappraised the value of the goods and effectively
reduced the amount of fine. Holding that he had no authority
to compromise a final judgment, the Court explained:
"It is argued that the parties to a case may enter into a
compromise about even a final judgment rendered by a
court, and it is contended x x x that the reappraisal ordered
by the Commissioner of Customs and sanctioned by the
Department of Finance was authorized by Section 1369 of
the [Revised Administrative Code]. The contention may
be correct as regards private parties who are the
owners of the property subject-matter of the
litigation, and who are therefore free to do with what
they own or what is awarded to them, as they please,
even to the extent of renouncing the award, or
condoning the obligation imposed by the judgment on
the adverse party. Not so, however, in the present case.
Here, the Commissioner of Customs is not a private party
and is not the owner of the money involved in the fine based
on the original appraisal. He is a mere agent of the
Government and acts as a trustee of the money or property
in his hands or coming thereto by virtue of a favorable
judgment. Unless expressly authorized by his principal or by
law, he is not authorized to accept anything different from
or anything less than what is adjudicated in favor of the
Government."33 (Bold types supplied)
Compliance with the
Rule on Contracts
There is no justification to disallow a compromise
agreement, solely because it was entered into after final
judgment. The validity of the agreement is determined by
compliance with the requisites and principles of contracts,
not by when it was entered into. As provided by the law on
contracts, a valid compromise must have the following
elements: (1) the consent of the parties to the compromise,
(2) an object certain that is the subject matter of the
compromise, and (3) the cause of the obligation that is
established.34
In the present factual milieu, compliance with the elements
of a valid contract is not in issue. Petitioners do not challenge
the factual finding that they entered into a compromise
agreement with respondent. There are no allegations of
vitiated consent. Neither was there any proof that the
agreement was defective or could be characterized as
rescissible,35 voidable,36 unenforceable,37 or void.38 Instead,
petitioners base their argument on the sole fact that the
agreement was executed despite a final judgment, which the
Court had previously ruled to be allowed by law.
Petitioners voluntarily entered into the compromise
agreement, as shown by the following facts: (1) they signed
respondent's Manifestation (filed with the labor arbiter) that
the judgment award had been satisfied;39 (2) they executed
a Joint Affidavit dated May 5, 1997, attesting to the receipt
of payment and the waiver of all other benefits due them;40
and (3) 6 of the 8 petitioners filed a Manifestation with the
labor arbiter on October 20, 1997, requesting that the cases
be terminated because of their receipt of payment in full
satisfaction of their claims.41 These circumstances also
reveal that respondent has already complied with its
obligation pursuant to the compromise agreement. Having
already benefited from the agreement, estoppel bars
petitioners from challenging it.
Advantages of Compromise
A reciprocal concession inherent in a compromise agreement
assures benefits for the contracting parties. For the defeated
litigant, obvious is the advantage of a compromise after final
judgment. Liability arising from the judgment may be
reduced. As to the prevailing party, a compromise
agreement assures receipt of payment. Litigants are
sometimes deprived of their winnings because of
unscrupulous mechanisms meant to delay or evade the
execution of a final judgment.
The advantages of a compromise agreement appear to be
recognized by the NLRC in its Rules of Procedure. As part of
the proceedings in executing a final judgment, litigants are
required to attend a pre-execution conference to thresh out
matters relevant to the execution.42 In the conference, any
agreement that would settle the final judgment in a
particular manner is necessarily a compromise.
Novation of an Obligation
The principle of novation supports the validity of a
compromise after final judgment. Novation, a mode of
extinguishing an obligation,43 is done by changing the object
or principal condition of an obligation, substituting the
person of the debtor, or surrogating a third person in the
exercise of the rights of the creditor.44
For an obligation to be extinguished by another, the law
requires either of these two conditions: (1) the substitution
is unequivocally declared, or (2) the old and the new
obligations are incompatible on every point.45 A compromise
of a final judgment operates as a novation of the judgment
obligation, upon compliance with either requisite.46 In the
present case, the incompatibility of the final judgment with
the compromise agreement is evident, because the latter
was precisely entered into to supersede the former.
Second Issue:
Validity of the Waiver
Having ruled on the validity of the compromise agreement
in the present suit, the Court now turns its attention to the
waiver of claims or quitclaim executed by petitioners. The
subject waiver was their concession when they entered into
the agreement. They allege, however, that the absence of
their counsel and the labor arbiter when they executed the
waiver invalidates the document.
Not Determinative
of the Waiver's Validity
The presence or the absence of counsel when a waiver is
executed does not determine its validity. There is no law
requiring the presence of a counsel to validate a waiver. The
test is whether it was executed voluntarily, freely and
intelligently; and whether the consideration for it was
credible and reasonable.47 Where there is clear proof that a
waiver was wangled from an unsuspecting or a gullible
person, the law must step in to annul such transaction.48 In
the present case, petitioners failed to present any evidence
to show that their consent had been vitiated.
The law is silent with regard to the procedure for approving
a waiver after a case has been terminated.49 Relevant,
however, is this reference to the NLRC's New Rules of
Procedure:
"Should the parties arrive at any agreement as to the whole
or any part of the dispute, the same shall be reduced to
writing and signed by the parties and their respective
counsel, or authorized representative, if any,50 before the
Labor Arbiter.
"The settlement shall be approved by the Labor Arbiter after
being satisfied that it was voluntarily entered into by the
parties and after having explained to them the terms and
consequences thereof.
"A compromise agreement entered into by the parties not in
the presence of the Labor Arbiter before whom the case is
pending shall be approved by him, if after confronting the
parties, particularly the complainants, he is satisfied that
they understand the terms and conditions of the settlement
and that it was entered into freely and voluntarily by them
and the agreement is not contrary to law, morals, and public
policy."51
This provision refers to proceedings in a
mandatory/conciliation conference during the initial stage of
the litigation. Such provision should be made applicable to
the proceedings in the pre-execution conference, for which
the procedure for approving a waiver after final judgment is
not stated. There is no reason to make a distinction between
the proceedings in mandatory/conciliation and those in pre-
execution conferences.
The labor arbiter's absence when the waivers were executed
was remedied upon compliance with the above procedure.
The Court observes that the arbiter made searching
questions during the pre-execution conference to ascertain
whether petitioners had voluntarily and freely executed the
waivers.52 Likewise, there was evidence that they made an
intelligent choice, considering that the contents of the
written waivers had been explained to them.53 The labor
arbiter's absence when those waivers were executed does
not, therefore, invalidate them.
The Court declines to rule on the allegation that
respondent's counsels encroached upon the professional
employment of petitioners' lawyer when they facilitated the
waivers.54 The present action is not the proper forum in
which to raise any charge of professional misconduct. More
important, petitioners failed to present any supporting
evidence.
The third issue, which refers to the timely filing of
petitioners' Motion for Reconsideration filed with the CA, will
no longer be discussed because this Court's decision has
resolved the case on the merits.
WHEREFORE, the Petition is DENIEDand the assailed
Decision AFFIRMED. Costs against petitioners.
SO ORDERED.
Sandoval-Gutierrez, Corona, Carpio-Morales, and
Garcia, JJ., concur.

[G.R. Nos. 63208-09. May 5, 1989.]

CAMARA SHOES, represented by LUCIA VDA. DE CAMARA,

Petitioner, v. KAPISANAN NG MGA MANGGAGAWA SA
CAMARA SHOES, HON. FRANCISCO ESTRELLA, HON. VICENTE
LEOGARDO, JR., and NATIONAL LABOR RELATIONS
COMMISSION, Respondents.

Toribio E. Ilao, Jr. for Petitioner.

Carlos E. Santiago for Private Respondent.

SYLLABUS

1. LABOR LAW; APPEAL; MUST BE FILED WITHIN TEN (10)

WORKING DAYS; CASE AT BAR. — On the issue whether or not the
appeal to the NLRC was filed on time, we rule in favor of the
petitioner. The applicable rule in 1980 was Sec. 7, Rule XIII of Book
V which provides: "Sec. 7. When to appeal. — The aggrieved party
may appeal the decision of the Labor Arbiter or compulsory
arbitrator to the National Labor Relations Commission within ten
(10) working days from receipt of the decision on any of the
following grounds: ". . . The records show that the decision of the
Director of Labor denying the application for clearance was received
by the petitioner on April 2, 1980. The appeal with the NLRC was
filed on April 18, 1980. Considering the holidays and the Saturdays
and Sundays that supervened during that period (Murillo v. Sun
Valley Realty, Inc., G.R. No. 67272, June 30, 1988); it was,
therefore, error for the NLRC to have dismissed the appeal which
was seasonably filed within the 10 working days period for appeal.

2. ID.; APPLICATION FOR CLEARANCE; THERE MUST BE

SUBSTANTIAL PROOF TO SHOW THAT THE BUSINESS WAS IN A
STATE OF BANKRUPTCY; CASE AT BAR. — In the case at bar, the
petitioner must be faulted for having failed to substantiate its
allegations that the business was indeed in a state of bankruptcy.
The failure to appear during the scheduled hearings casts doubt on
the validity of the petitioner’s application for clearance. If indeed it
had a genuine intention to terminate its employees to prevent
further losses in their business it should have been more aggressive
in presenting its case. The statement of assets and liabilities
annexed to the petition filed with the Ministry of Labor is not
sufficient to justify the application for clearance. No other financial
statements or evidences were presented. Absent any showing of
substantial proof, we find no grave abuse of discretion on the part
of the Regional Director in denying the application for clearance.

3. ID.; JURISDICTION; LABOR CASES ARE NOT EXTINGUISHED BY

THE DEATH OF THE PROPRIETOR; MINISTRY OF LABOR HAS
JURISDICTION OVER CASE. — The present case was not
extinguished because of the death of the proprietor, Santos Camara
who died long before the application for clearance to terminate was
filed. This case falls under the jurisdiction of the Ministry of Labor
and not the civil courts as contended by the petitioner.

4. ID.; AGREEMENT TO SETTLE CLAIMS OF 16 OUT OF 20

CLAIMANTS RENDERS CASE ACADEMIC. — Considering, however,
that sixteen (16) out of the original twenty (20) claimants had
agreed to the settlement of their claims, the petition is dismissed as
academic insofar as they are concerned.
 DECISION

GUTIERREZ, JR., J.:

The members of the respondent union numbering twenty (20), who

are themselves private respondents, were regular employees of the
petitioner, Camara Shoes, a single proprietorship engaged in the
manufacture and sale of shoes. chanrobles.com.ph : virtual law library

On December 22, 1979, the petitioner served notice to lay off the
respondents effective January 31, 1980, subject to the approval of
the clearance application by the Ministry of Labor and Employment.

On December 28, 1979, the petitioner filed its application for

clearance to terminate the services of the employees on grounds of
financial losses, business reversals and lack of work due to
shortage of raw materials. This case was docketed as NCR-STF-1-
281-80.

On January 11, 1980, the respondent union, Kapisanan ng mga

Manggagawa sa Camara Shoes filed its opposition to said
application. At the same time, the respondent union together with
the individual respondents filed a complaint for illegal layoff, unpaid
wages and service incentive leave pay. This complaint was
docketed as NCR-STF-1-234-80.

On February 1, 1980, the petitioner refused to allow the individual

respondents to continue working.

On March 28, 1980, the respondent Director of Labor denied the

petitioner’s application for clearance due to lack of substantial
proofs. The dispositive portion of its decision in favor of the
individual respondents reads as follows: jgc:chanrobles.com.ph

"WHEREFORE, responsive to the foregoing, respondent is hereby

directed to reinstate Edna P. Villegas, Carlos Lapid, Eustaquio
Mariano, Remedios Jacinto, Constancia Magbanua, Noel Pasco,
Adelina Villanueva, Bienvenido Antonio, Erving Rios, Saturnina
Capistrano, Benjamin Villafuerte, Mario Ongcal, Eliseo Martizo,
Guivar Paloyo Armando dela Cruz, Vicente Lacsam, Reynaldo
Escamis, Zaldy Arpon, Myrna Manalo and Andres Ramilo to their
former or equivalent positions with full backwages from February 1,
1980 up to actual reinstatement. Respondent is further directed to
pay individual complainants their respective five (5) days service
incentive leave for the year 1979.

Accordingly, respondent’s application for clearance is hereby

denied." (Rollo, p. 22).

On April 18, 1980, the petitioner appealed the above order to the
National Labor Relations Commission (NLRC).

On June 11, 1980, pending said appeal, the petitioner moved to

dismiss the aforecited cases (NCR-STF-1-281-80 and NCR-STF-
234-80) because sixteen (16) individual respondents except for
Carlos Lapid, Eustaquio Mariano, Adelina Villanueva and Erving Rios
had agreed to the settlement of their claims as shown in an
affidavit of release and quit-claim (Annex E, petition).

On July 3, 1980, the respondent union moved to dismiss the appeal

for having been filed out of time.

On December 29, 1982, Deputy Minister Vicente Leogardo issued

an Order dismissing the appeal, to wit:jgc:chanrobles.com.ph

"We find that the appeal was indeed filed out of time. Respondent
should have filed it within ten working days from its receipt (on 2
April) of the Order or not later than 16 April 1982. But as pointed
out by complainants, the appeal was `dated April 18, 1980 (and)
was filed on the same date’. Clearly, then, the case has gone
beyond our power to review.

"WHEREFORE, the appeal is hereby dismissed, and the Order of 28

March 1980 declared final and executory." (Rollo, p. 43).

On the issue whether or not the appeal to the NLRC was filed on
time, we rule in favor of the petitioner.
chanrobles virtual lawlibrary

The applicable rule in 1980 was Sec. 7, Rule XIII of Book V which
provides:jgc:chanrobles.com.ph
"Sec. 7. When to appeal. — The aggrieved party may appeal the
decision of the Labor Arbiter or compulsory arbitrator to the
National Labor Relations Commission within ten (10) working days
from receipt of the decision on any of the following grounds:"

x x x

The records show that the decision of the Director of Labor denying
the application for clearance was received by the petitioner on April
2, 1980. The appeal with the NLRC was filed on April 18, 1980.

The NLRC ruled that the appeal should have been filed within ten
working days from its receipt of the Order on April 2 or not later
than April 16, 1980. However, the NLRC failed to consider the
holidays which supervened during this period as pointed out by the
petitioner.

The petitioner computes the period to appeal as follows: jgc:chanrobles.com.ph

"a) April 2, 1980 — is not counted for the reason that on said date
Respondent received the said order;

"b) April 3, which is a Maundy Thursday is not counted for it is a

Holiday;

"c) April 4, it is a Good Friday and it is also a Holiday not to be

counted;

"d) April 5, is a Saturday not counted for it is not a working day;

"e) April 6, is a Sunday, not counted for it is not a working day;

"f) April 7, Monday, it is a working day;

"g) April 8, Tuesday, it is a working day;

"h) April 9, Wednesday, not counted, it is Bataan day and is a

Holiday;

"i) April 10, Thursday, is a working day;

"j) April 11, Friday, a working day;

"k) April 12, Saturday, not counted, it is not a working day;

"l) April 13, Sunday, not counted, it is not a working day;

"m) April 14, to April 18, 1980 from Monday to Friday, they are all
working days, or an equivalent of five (5) days;" (Rollo, p. 30-31).

As held in the case of Bonifacio Murillo v. Sun Valley Realty, Inc.

(G.R. No. 67272, June 30, 1988): jgc:chanrobles.com.ph

"From Dec. 18, 1980 to Jan. 6, 1981 is exactly ten (10) working
days considering the holidays and the Saturdays and Sundays that
supervened during that period. In other words, private respondent’s
appeal to the NLRC having been filed during the time that the
prevailing period of appeal was ten (10) working days and prior to
the promulgation of the VIR-JEN Case on July 20, 1982, it must be
held to have been timely filed." cralaw virtua1aw library

It was, therefore, error for the NLRC to have dismissed the appeal
which was seasonably filed within the 10 working days period for
appeal.

The petitioner alleges that "its business is in a state of bankruptcy.

All its properties are heavily mortgaged and are endangered of
being foreclosed. For this reason, the petitioner’s act in terminating
the services of individual respondents is to avoid or minimize
business losses in order that the mortgages of their properties as
well as the debts incurred in favor of the suppliers of raw materials
be paid." (Rollo, p. 13)
chanrobles law library : red

We held in the case of Garcia v. National Labor Relations

Commission [153 SCRA 639 (1987)] that: jgc:chanrobles.com.ph

"Business reverses or losses are recognized by law as a just cause

for terminating employment. (Columbia Development Corporation
v. Minister of Labor and Employment, 146 SCRA 421 [1986]; LVN
Pictures and Workers Association v. LVN Pictures, Inc., 35 SCRA
147) Under Article 284 of the Labor Code, as amended,
retrenchment of personnel to prevent losses can only be availed of
by management if the company is losing or meeting financial
reverses. But it is essentially required that the alleged losses in
business operations must be proved. (National Federation of Labor
Unions (NAFLU) v. Ople, 143 SCRA 124 [1986]). Otherwise, said
ground for termination would be susceptible to abuse by scheming
employers who might be merely feigning business losses or
reverses in their business ventures in order to ease out
employees." cralaw virtua1aw library

In the case at bar, the petitioner must be faulted for having failed
to substantiate its allegations that the business was indeed in a
state of bankruptcy. The Director of Labor dismissed the petitioner’s
application for clearance precisely on the ground that adequate
proof was not presented in support of its application. Moreover, we
find that the petitioner failed to appear during the scheduled
hearing for the reception of the petitioner’s evidence on its
application on January 28, 1980 despite due notice. The hearing
was reset to February 6, 1980 but the petitioner appeared through
Atty. Sergio R. Manzo only to ask for another resetting to February
15, 1980. On February 20, 1980, the petitioner agreed to submit
the application for its resolution by merely filing a position paper. In
its position paper, the petitioner alleged: chanrob1es virtual 1aw library

x x x

"3. That respondent, much as it would like to keep the said twenty
(20) employees in its employ, was left with no recourse but to
terminate their services to prevent further losses in their business."
(Rollo, p. 61)

The above statement was not backed by proof. The failure to

appear during the scheduled hearings casts doubt on the validity of
the petitioner’s application for clearance. If indeed it had a genuine
intention to terminate its employees to prevent further losses in
their business it should have been more aggressive in presenting its
case. The statement of assets and liabilities annexed to the petition
filed with the Ministry of Labor is not sufficient to justify the
application for clearance. No other financial statements or
evidences were presented.
Absent any showing of substantial proof, we find no grave abuse of
discretion on the part of the Regional Director in denying the
application for clearance.

The petitioner finally alleges that the present labor cases do not
survive considering that on January 13, 1979 the proprietor of the
petitioner company, Santos Camara, died intestate. As a result of
the death of Mr. Camara, it is alleged that the labor case was
automatically extinguished. There is no merit to this contention.

We agree with the Solicitor General that: jgc:chanrobles.com.ph

"NCR-STF-1-234-80 sought reinstatement of individual respondents

to their work. It was not a money claim, not to say it involved
purely employer-employee relationship, which fell under the
exclusive authority of respondent officials to hear and resolve.
While it combined a claim for backwages and the like, the
entitlement of individual respondents thereto solely depended on
their right to be reinstated. Besides, Santos Camara died on
January 13, 1979. Individual respondents were dismissed without
the required clearance on February 1, 1980. Also, the backwages,
that individual respondents claimed in NCR-STF-1-234-80 covered
the period from February, 1980 until actual reinstatement.
Moreover, they were claims against petitioner, as business concern
that continued to operate after his death." (Rollo, p. 106).

Clearly then, the present case was not extinguished because of the
death of the proprietor, Santos Camara who died long before the
application for clearance to terminate was filed. This case falls
under the jurisdiction of the Ministry of Labor and not the civil
courts as contended by the petitioner. Considering, however, that
sixteen (16) out of the original twenty (20) claimants had agreed to
the settlement of their claims, the petition is dismissed as academic
insofar as they are concerned.cralawnad

WHEREFORE, the petition is hereby DISMISSED for lack of merit.

The decision of the Director of Labor, dated March 28, 1980 is
AFFIRMED with MODIFICATION. The petitioner Camara Shoes is
ordered to reinstate the remaining individual respondents Carlos
Lapid, Eustaquio Mariano, Adelina Villanueva and Erving Rios to
their former or equivalent positions with full backwages equivalent
to three (3) years without deductions or qualifications and to pay
them their respective five (5) days service incentive leaves for the
year 1979.

SO ORDERED.

Fernan (C.J., Chairman), Feliciano, Bidin and Cortes, JJ., concur.

G.R. No. 125340 September 17, 1998

EMELITA NICARIO, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, MANCAO
SUPERMARKET, INC. AND/OR MANAGER, ANTONIO MANCAO,
respondents.

ROMERO, J.:
For resolution before this Court is a special civil action for certiorari under
Rule 65 of the Rules of Court which seeks to set aside the resolution of the
National Labor Relations Commission (Fifth Division, Cagayan de Oro City)
dated December 21, 1995 in NLRC CA No. M-002047-94 entitled "Emelita
Nicario v. Mancao Supermarket Inc. and/or Manager" which ruled that
petitioner, Emelita Nicario, is not entitled to overtime pay. Nor is private
respondent, Antonio Mancao jointly and severally liable with the respondent
company for thirteenth month pay, service incentive leave pay, and rest day
pay. 1
Petitioner, Emelita Nicario, was employed with respondent company, Mancao
Supermarket, on June 6, 1986 as a salesgirl and was later on promoted as
sales supervisor. However, private respondent terminated her services on
February 7, 1989.
A complaint for illegal dismissal with prayer for backwages, wage differential,
service incentive leave gay, overtime pay, 13th month pay and unpaid wages
was filed by petitioner before the National Labor Relations Commission, Sub-
Regional Arbitration Branch X in Butuan City.
On July 25, 1989, Labor Arbiter Amado M. Solamo dismissed the complaint
for lack of merit. Petitioner appealed to the National Labor Relations
Commission (NLRC), Fifth Division, Cagayan de Oro City. In a resolution
dated July 25, 1989, the NLRC set aside the labor arbiter's decision for lack
of due process. It ruled that since petitioner assailed her supposed signatures
appearing on the payrolls presented by the company as a forgery, the labor
arbiter should not have merely depended on the xerox copies of the payrolls,
as submitted in evidence by the private respondent but ordered a formal
hearing on the issue. Thus, the Commission ordered the case remanded to
the arbitration branch for appropriate proceedings. The case was assigned to
Labor Arbiter Marissa Macaraig-Guillen. 2
In a decision dated May 23, 1994, Labor Arbiter Macaraig-Guillen awarded
petitioner's claims for unpaid service incentive leave pay, 13th month pay,
overtime pay and rest day pay for the entire period of her-employment, but
dismissed her claims for holiday premium pay and unpaid salaries from
February 3 to 5, 1989. The dispositive portion of the decision read as follows:
WHEREFORE, in view of the foregoing, judgment is rendered directing
respondent Mancao Supermarket Inc., and/or Mr. Antonio Mancao to pay
complainant Emelita Nicario the sum of forty thousand three hundred ninety
three pesos and fifteen centavos (P40,393.15) representing unpaid service
incentive leave pay, thirteenth month pay, overtime pay, and rest day for the
entire period of employment.
All other claims are dismissed for lack of merit.
SO ORDERED. 3
Not satisfied with the decision, private respondent appealed to the NLRC, and
in a resolution dated August 16, 1995, 4 the Commission affirmed in toto
Labor Arbiter Macaraig-Guillen's decision. Private respondent then filed a
motion for reconsideration. In a resolution dated December 21, 1995, public
respondent NLRC modified its earlier resolution by deleting the award for
overtime pay and ruling that private respondent Antonio Mancao is not jointly
and severally liable with Mancao Supermarket to pay petitioner the monetary
award adjudged.
Petitioner now comes before this Court alleging grave abuse of discretion on
the part of the public respondent NLRC in ruling that (a) she is not entitled to
overtime pay and (b) private respondent, Antonio Mancao cannot be held
jointly and severally liable with respondent supermarket as to the monetary
award.
The Solicitor General, in a manifestation and motion in lieu of comment 5
stated that public respondent NLRC acted with grave abuse of discretion in
modifying its earlier resolution (dated August 16, 1995) and thus recommends
that the December 21, 1995 resolution be set aside, and its August 16, 1995
resolution be reinstated.
Public respondent NLRC, on the other hand, filed its own comment6 praying
for the dismissal of the petition and for the December 21, 1995 resolution to
be affirmed with finality.
The petition is partly impressed with merit.
In her claim for payment of overtime pay, petitioner alleged that during her
period of employment, she worked twelve (12) hours a day from 7:30 a.m. to
7:30 p.m., thus rendering overtime work for four hours each day. Labor
Arbiter Macaraig-Guillen, in her decision dated May 23, 1994, awarded
overtime pay to petitioner by taking judicial notice of the fact that all Mancao
establishments open at 8:00 a.m. and close at 8:00 p.m. Upon appeal, this
particular finding was affirmed by the Commission. However, when private
respondent filed a motion for reconsideration from the resolution dated
August 16, 1995, the NLRC modified its earlier ruling and deleted the award
for overtime pay. Public respondent NLRC instead gave credence to the daily
time records (DTRs) presented by respondent corporation showing that
petitioner, throughout her employment from June 6, 1986 to February 1989,
worked for only eight hours a day from 9:00 a.m. to 12:00 p.m. and 2:00 p.m.
to 7:00 p.m., and did not render work on her rest days.
Public respondent's reliance on the daily time records submitted by private
respondent is misplaced. As aptly stated by the Solicitor General in his
manifestation in lieu of comment, the DTR's presented by respondent
company are unreliable based on the following observations:
a) the originals thereof were not presented in evidence; petitioner's allegation
of forgery should have prompted respondent to submit the same for
inspection; evidence wilfully suppressed would be adverse if produced (Sec.
3(e), Rule 131, Rules of Court)
xxx xxx xxx
e) they would make it appear that petitioner has a two-hour rest period from
12:00 to 2:00 p.m., this is highly unusual for a store establishment because
employees should attend to customers almost every minute as well as
contrary to the judicial notice that no noon break is observed.
f) petitioner never reported earlier or later than 9:00 a.m., likewise, she never
went home earlier or later than 8:00 p.m.; all entries are suspiciously
consistent. 7
Labor Arbiter Macaraig-Guillen, in taking judicial cognizance of the fact that
private respondent company opens twelve (12) hours a day, the same
number of hours worked by petitioner everyday, applied Rule 129, Section 2
of the Rules of Court which provides that "a court may take judicial notice of
matters which are of public knowledge, or are capable of unquestionable
demonstration, or ought to be known because of their judicial functions." In
awarding overtime pay to petitioner, the labor arbiter ruled:
However, it is of judicial notice that all Mancao establishments open at eight
a.m. and close at eight p.m. with no noon break, so it is believable that
employees rendered 4-1/2 hours of overtime everyday, 7 days a week.8
Generally, findings of facts of quasi-judicial agencies like the NLRC are
accorded great respect and at times even finality if supported by substantial
evidence. 9 "Substantial evidence" is such amount of relevant evidence which
a reasonable mind might accept as adequate to justify a conclusion. However
in cases where there is a conflict between the factual findings of the NLRC
and the labor arbiter, a review of such factual findings is necessitated. 10
While private respondent company submitted the daily time records of the
petitioner to show that she rendered work for only eight (8) hours a day, it did
not refute nor seek to disprove the judicial notice taken by Labor Arbiter
Macaraig-Guillen that Mancao establishments, including the establishment
where petitioner worked, opens twelve hours a day, opening at 8:00 a.m. and
closing at 8:00 p.m.
This Court, in previously evaluating the evidentiary value of daily time
records, especially those which show uniform entries with regard to the hours
of work rendered by an employee, has ruled that "such unvarying recording of
a daily time record is improbable and contrary to human experience. It is
impossible for an employee to arrive at the workplace and leave at exactly the
same time, day in day out. The uniformity and regularity of the entries are
'badges of untruthfulness and as such indices of dubiety.' 11 The observations
made by the Solicitor General regarding the unreliability of the daily time
records would therefore seem more convincing. On the other hand,
respondent company failed to present substantial evidence, other than the
disputed DTRs, to prove that petitioner indeed worked for only eight hours a
day.
It is a well-settled doctrine, that if doubts exist between the evidence
presented by the employer and the employee, the scales of justice must be
tilted in favor of the latter. It is a time-honored rule that in controversies
between a laborer and his master, doubts reasonably arising from the
evidence, or in the interpretation of agreements and writing should be
resolved in the former's
favor. 12 The policy is to extend the doctrine to a greater number of employees
who can avail of the benefits under the law, which is in consonance with the
avowed policy of the State to give maximum aid and protection of labor. 13
This rule should be applied in the case at bar, especially since the evidence
presented by private respondent company is not convincing. Accordingly, we
uphold the finding that petitioner rendered overtime work, entitling her to
overtime pay.
As to the liability of private respondent Antonio Mancao, petitioner contends
that as manager of Mancao establishment, he should be jointly and severally
liable with respondent corporation as to the monetary award adjudged.
The general rule is that officers of a corporation are not personally liable for
their official acts unless it is shown that they have exceeded their authority.
However, the legal fiction that a corporation has a personality separate and
distinct from stockholders and members may be disregarded if it is used as a
means to perpetuate fraud or an illegal act or as a vehicle for the evasion of
an existing obligation, the circumvention of statutes, or to confuse legitimate
issues. 14
In this case, there is no showing that Antonio Mancao, as manager of
respondent company, deliberately and maliciously evaded the respondent's
company financial obligation to the petitioner. Hence, there appearing to be
no evidence on record that Antonio Mancao acted maliciously or deliberately
in the non-payment of benefits to petitioner he cannot he held jointly and
severally liable with Mancao supermarket.
WHEREFORE, in view of the foregoing, the instant petition is hereby
PARTIALLY GRANTED. Accordingly, the resolution of the NLRC dated
December 21, 1995 in NLRC NCR CA No. M-002047-94 is hereby
MODIFIED by awarding petitioner, Emelita Nicario her overtime pay and
relieving private respondent, Antonio Mancao, of any liability as manager of
Mancao Supermarket and further holding Mancao Supermarket solely liable.
No costs.
SO ORDERED.

[G.R. No. 126773. April 14, 1999]

RUBBERWORLD (PHILS.), INC., or JULIE YAP ONG,
Petitioner, v. NATIONAL LABOR RELATIONS
COMMISSION, MARILYN F. ARELLANO, EMILY S.
LEGASPI, MYRNA S. GALGANA, MERCEDITA R.
SONGCO, WILFREDO V. SANTOS, JOSEPHINE S.
RAMOS, REDENTOR G. HONA, LUZ B. HONA,
ROLANDO B. CRUZ, GUILLERMA R. MUZONES,
CARMELITA V. HALILI, SUSAN A. REYES, EMILY A.
ROBILLOS, PLACIDO REYES, MANOLITO DELA CRUZ,
VICTORINO C. FRANCISCO, ROGER B. MARIAS,
VIOLETA ALEJO, RICARDO T. TORRES, EMMA DELA
TORRE, PERLA N. MANZANERO, FRANCISCO D.
SERDONCILLO, LUISITO P. HERNANDEZ, RAYMOND
PEREA, EDITHA A. SERDONCILLO, FRANCISCO
GENER, MARIO B. REYES, VALERIANO A. HERRERA,
JORGE S. SEERES, ELENA S. IGNACIO, EMERITA S.
CACHERO, NERIZA G. ENRIQUEZ, LOLITA M.
FABULAR, NORMITA M. HERNANDEZ, DOMINADOR P.
ENRIQUEZ, Respondents.
DECISION
PANGANIBAN, J.:
Presidential Decree 902-A, as amended, provides that
"upon the appointment of a management committee,
rehabilitation receiver board or body pursuant to this
Decree, all actions for claims against corporations,
partnerships, or associations under management or
receivership pending, before any court, tribunal,
board or body shall be suspended accordingly."1 Such
suspension is intended to give enough breathing
space for the management committee or
rehabilitation receiver to make the business viable
again, without having to divert attention and
resources to litigations in various fora. Among, the
actions suspended are those for money claims before
labor tribunals, like the National Labor Relation
Commission (NLRC) and the Labor arbiters.
Statement of the Case

The foregoing Summarizes this Court's grant of the

Petition for Certiorari under Rule 65 of the Rules of
Court, assailing the April 26, 1996 Resolution2
promulgate by the NLRC3 which upheld the labor
arbiter's refusal to suspend proceedings involving,
monetary claims of the petitioner's employees.
Petitioner likewise assails the June 20, 1996 NLRC
Resolution4 which denied its Motion for
Reconsideration.
On November 20, 1996, this Court issued a temporary
restraining order signed by then Chief Justice Andres
R. Narvasa, "restraining the public respondents from
further conducting proceedings in the aforesaid cases
effective immediately xxx."
The Facts

The facts are undisputed. They are narrated by the

Office of the Solicitor General as follows:
"Petitioner xxx is a domestic corporation which used
to be in the business of manufacturing footwear, bags
and garments. It filed with the Securities and
Exchange Commission on November 24, 1994 a
petition for suspension of payments praying that it be
declared in a state of suspension of payments and that
the SEC accordingly issue an order restraining its
creditors from enforcing their claims against
petitioner corporation. It further prayed for the
creation of a management committee as well as for
the approval of the proposed rehabilitation plan and
memorandum of agreement between petitioner
corporation and its creditors.
"In an order dated December 28, 1994, the SEC
favorably ruled on the petition for suspension of
payments thusly:
'Accordingly, with the creation of the Management
Committee, all actions for claims against Rubberworld
Philippines, Inc. pending before any court, tribunal,
office, board, body Commission of Sheriff are hereby
deemed SUSPENDED.
'Consequently, all pending incidents for preliminary
injunctions, writ of attachments (sic), foreclosures'
and the like are hereby rendered moot and academic.'
"Private respondents, who claim to be employees of
petitioner corporation, filed against petitioners
[from] April to July 1995 their respective complaints
for illegal dismissal, unfair labor practice, damages
and payment of separation pay, retirement benefits,
13th month pay and service incentive pay.
"Petitioners moved to suspend the proceedings in the
above labor cases on the strength of the SEC Order
dated December 28, 1994. Likewise, petitioners cited
the rulings of BF Homes vs. Court of Appeals (190
SCRA 262), Alemar's Sibal & Sons, Inc. vs. Elbinias
(186 SCRA 94) and Bank of Philippine Islands vs.
Court of Appeals (229 SCRA 223) to support their
motion to suspend the proceedings in the labor cases.
"In an Order dated September 25, 1995, the Labor
Arbiter denied the aforesaid motion holding that the
injunction contained in the SEC Order applied only to
the enforcement of established rights and did not
include the suspension of proceedings involving
claims against petitioner which have yet to be
ascertained. The Labor Arbiter further held that the
order of the SEC suspending all actions for claims
against petitioners does not cover the claims of
private respondents in the labor cases because said
claims and the concomitant liability of petitioners still
had to be determined, thus carrying no dissipation of
the assets of petitioners.
"Petitioners appealed the adverse order of the Labor
Arbiter to public respondent which, in a Resolution
dated April 26, 1996, dismissed the appeal for lack of
merit and, instead, sustained the rulings of the Labor
Arbiter.
"The motion for reconsideration of petitioners fared
no better and was denied by public respondent in a
Resolution dated June 20, 1996."5 cräläwvirtualibräry

Hence, this petition.6

The Issue

Petitioner raises only one issue:

"Whether or not the Respondent NLRC acted without or in
excess of Jurisdiction or with grave abuse of discretion
amounting to lack of jurisdiction in affirming the order of
Labor Arbiter Voltaire A. Balitaan denying petitioners'
motion to suspend proceedings despite the Order of the
Securities and Exchange Commission under Sec. 6 (c) of
P.D. 902-A directing the suspension of all actions against a
company under the first stages of insolvency
proceedings."7
This Court's Ruling

The petition is meritorious.

Sole Issue:
Suspension Proceedings

Jurisprudence teaches us:

"xxx where the petition filed is one for declaration of
a state of suspension of payments due to a recognition
of the inability to pay one's debts and liabilities, and
where the petitioning corporation either: (a) has
sufficient property to cover all its debts but foresees
the impossibility of meeting them when they fall due
(solvent but illiquid) or (b) has no sufficient property
(insolvent) but is under the management of a
rehabilitation receiver or a management committee,
the applicable law is P.D. 902-A pursuant to Sec. 5
par. (d) thereof. However, if the petitioning
corporation has no sufficient assets to cover its
liabilities and is not under a rehabilitation receiver or
a management committee created under P.D. 902-A
and does not seek merely to have the payments of its
debts suspended, but seeks a declaration of
insolvency xxx the applicable law is Act 1956 [The
Insolvency Law] on voluntary insolvency, xxx."8 cräläwvirtualibräry

In the case at bar, Petitioner Rubberworld filed before

the SEC a Petition for Declaration of Suspension of
Payments, as well as a propose rehabilitation plan. On
December 28, 1994, the SEC ordered the creation of a
management committee and the suspension of all
actions for claim against Rubberworld. Clearly, the
applicable law is PD 902-A, as amended, the relevant
provision of which read:
"SECTION 5. In addition to the regulatory adjudicative
functions of the Securities and Exchange Commission
over corporations, partnerships and other forms of
associations registered with it as expressly granted
under existing laws and decrees, it shall have original
and exclusive jurisdiction to hear and decide cases
involving:
xxx
d) Petitions of corporations, partnerships or
associations to be declared in the state of
suspension of payments in cases where the
corporation, partnership or association possesses
sufficient property to cover all its debts but foresees
the impossibility of meeting them when they
respectively fall due or in cases where the
corporation, partnership or association has no
sufficient assets to cover its liabilities, but is under
the management of a rehabilitation receiver or
management committee created pursuant to this
Decree.
SECTION 6. In order to effectively exercise such
jurisdiction, the Commission shall possess the
following powers:
xxx
c) To appoint one or more receivers of the property,
real or personal, which is the subject of the action
pending before the Commission in accordance with
the pertinent provisions of the Rules of Court in such
other cases whenever necessary in order to preserve
the rights of the parties-litigants and/or protect the
interest of the investing public and creditors: x x x
Provided finally, That upon appointment of a
management committee, the rehabilitation receiver,
board or body, pursuant to this Decree, all actions
for claims against corporations, partnerships, or
associations under management or receivership
pending before any court, tribunal, board or body
shall be suspended accordingly."
It is plain from the foregoing provisions of law that
"upon the appointment [by, the SEC] of a
management committee or a rehabilitation receiver,"
all actions for claims against the corporation pending
before any court, tribunal or board shall ipso jure be
suspended.9 The justification for the automatic stay
of all pending actions for claims "is to enable the
management committee or the rehabilitation
receiver to effectively exercise its/his powers free
from any judicial or extra-judicial interference that
might unduly hinder or prevent the 'rescue' of the
debtor company. To allow such other actions to
continue would only add to the burden of the
management committee or rehabilitation receiver,
whose time, effort and resources would be wasted in
defending claims against the corporation instead of
being directed toward its restructuring and
rehabilitation."10
Parenthetically, the rehabilitation of a financially
distressed corporation benefits its employees,
creditors, stockholders and, in a larger sense, the
general public. And in considering whether to
rehabilitate or not, the SEC gives preference to the
interest of creditors, including employees. The
reason that shareholders can recover their
investments only upon liquidation of' the
corporation, and only if there are assets remaining
after all corporate creditors ire paid.11
Labor Claims Included in Suspension Order

The solicitor general, representing Public

Respondent NLRC, argues that the rationale for an
automatic stay will not be frustrated even if the
NLRC proceeds with the disposition of these labor
cases, because any favorable judgment obtained by
the private respondents would only establish their
rights as creditors. The solicitor general also
contends that the assailed Resolutions of the NLRC
will not result in an undue preference for the assets
of Rubberworld, as the private respondents will still
present their claims before the management
committee.12
We disagree. The law is clear: upon the creation of a
management committee or the appointment of
rehabilitation receiver, all claims for actions "shall be
suspended accordingly." No exception in favor of
labor claims is mentioned in the law. Since the law
makes no distinction or exemptions, neither should
this Court. Ubi lex non distinguit nec nos distinguere
debemos.13 Allowing labor cases to proceed clearly
defeats the purpose of the automatic stay and
severely encumbers the management committee's
time and resources. The said committee would need
to defend against these suits, to the detriment of its
primary and urgent duty to work towards
rehabilitating the corporation and making it viable
again. To rule otherwise would open the floodgates
to other similarly situated claimants and forestall if
not defeat the rescue efforts. Besides, even if the
NLRC awards the claims of private respondents, as it
did, its ruling could not be enforced as long as the
petitioner is under the management committee.14
In Chua v. National Labor Relation Commission,15 we
ruled that labor claims cannot proceed independently
of a bankruptcy liquidation proceeding, since these
claims "would spawn needless controversy, delays,
and confusion."16 With more reason, allowing labor
claims to continue in spite of a SEC suspension order
in rehabilitation case would merely lead to such
results.
The solicitor general insists that since Article 217 of
the Labor Code17 vested public respondent with
jurisdiction to hear and decide these labor cases, the
NLRC did not exceed its jurisdiction when it refused
to suspend the proceedings therein.18 The Court is
not persuaded.
Article 217 of the Labor Code should be construed
not in isolation but in harmony with PD 902-A,
according to the basic rule in statutory construction
that implied repeals are not favored.19 Indeed, it is
axiomatic that each and every statute must be
construed in a way that would avoid conflict with
existing laws.20 True, the NLRC has the power to hear
and decide labor disputes, but such authority is
deemed suspended when PD 902-A is put into effect
by the Securities and Exchange Commission.
Preference in Favor of Workers in Case of Bankruptcy or Liquidation

The private respondents contend that automatic stay

under PD 902-A is not applicable to the instant case;
otherwise, the preference granted to workers by
Article 110 of the Labor Code would be rendered
ineffective.21 This contention is misleading.
The preferential right of workers and employees
under Article 110 of the Labor Code may be invoked
only upon the institution of insolvency or judicial
liquidation proceeding.22 Indeed, it is well-settled
that "a declaration of bankruptcy or a judicial
liquidation must be present before preferences over
various money claims may be enforced."23 But
debtors resort to preference of credit -- giving
preferred creditors the right to have their claims paid
ahead of those of other claimants -- only when their
assets are insufficient to pay their debts fully.24 The
purpose of rehabilitation proceedings is precisely to
enable the company to gain a new lease on life and
thereby allow creditors to be paid their claims from
its earnings. In insolvency proceedings, on the other
hand, the company stops operating, and the claims
of creditors are satisfied from the assets of the
insolvent corporation. The present case involves the
rehabilitation, not the liquidation, of petitioner-
corporation. Hence, the preference of credit granted
to workers or employees under Article 110 of the
Labor Code is not applicable.
Duration of Automatic Stay Under PD 902-A

Finally, private respondents posit that under Section

6 of the Insolvency Law, the December 28, 1994
Order of the SEC suspending all actions for claims
against Rubberworld should have expired after three
months, in the absence of an agreement between the
company and the corporate creditors.25 Private
respondents also accuse the SEC of abusing its
power by "allowing said suspension order to remain
pending for many years without resolving and
approving any rehabilitation plan."26 They contend
that "[t]his is fatal to the instant petition for it had
been a party to the abuse by the SEC of its
suspension order."27
This Court notes that PD 902-A itself does not
provide for the duration of the automatic stay.
Neither does the Order28 of the SEC. Hence, the
suspensive effect has no time limit and remains in
force as long as reasonably necessary to accomplish
the purpose of the Order.29 On the other hand, the
attack against the SEC's alleged "abuse of power" is
misplaced. Under review in this Petition for Certiorari
are Resolutions of the NLRC, not of the SEC. The
scope of this review is thus limited to whether the
NLRC gravely abused or exceeded its jurisdiction in
refusing to heed the SEC Order of Suspension and in
issuing its challenged Resolutions. In any event, the
bare allegation of inaction is insufficient to condemn
the Securities and Exchange Commission and the
management committee where, it should be noted,
all affected parties, including, the labor union in the
company, are represented.
WHEREFORE, the petition is hereby GRANTED. The
assailed Resolutions of the NLRC dated April 26, 1996,
and June 20, 1996, are REVERSED and SET ASIDE. No
costs.
SO ORDERED.
Romero, (Chairman), Vitug, Purisima, and Gonzaga-
Reyes, JJ., concur.

[G.R. No. 122389. June 19, 1997]

MIGUEL SINGSON, Petitioner, v. NATIONAL LABOR
RELATIONS COMMISSION and PHILIPPINE
AIRLINES, INC. (PAL), Respondents.
DECISION
PUNO, J.:
Assailed in the petition for certiorari before us is the
Resolution of the public respondent National Labor
Relations Commission1 (hereinafter NLRC) reversing the
Decision of the Labor Arbiter2 in NLRC-NCR Case No. 00-
10-05750-91 finding the dismissal of petitioner Miguel
Singson illegal and ordering his reinstatement. Petitioner
filed a motion for reconsideration which was denied by the
public respondent in an Order dated June 27, 1995.
The antecedent facts reveal that petitioner Singson was
employed by private respondent Philippine Airlines, Inc.
(hereinafter PAL) as Traffic Representative Passenger,
Handling Division. His duty consisted of checking in
passengers and baggage for a particular flight. On June 7,
 1991, petitioner was assigned to serve the check-in
counter of Japan Air Lines (hereinafter JAL) for Flight 742.
Among the passengers checked in by him was Ms. Lolita
Kondo who was bound for Narita, Japan. After checking in,
Ms. Kondo lodged a complaint alleging that petitioner
required her to pay US $200.00 for alleged excess baggage
without issuing any receipt. A confrontation took place
where petitioner was asked by the security officer to empty
his pockets. The dollars paid by Ms. Kondo were not found
in his possession. However, when the lower panel of the
check-in counter he was manning was searched, the sum
of two hundred sixty five dollars (US $265) was found
therein consisting of two (2) one hundred dollar bills, one
(1) fifty dollar bill, one (1) ten dollar bill and one (1) five
dollar bill. Petitioner was administratively charged and
investigated by a committee formed by private respondent
PAL.3 chanroblesvirtuallawlibrary

In an affidavit presented to the investigators, Ms. Kondo

declared that she was with three (3) Japanese friends
when she checked in on June 7, 1991, for their flight to
Narita, Japan. While in line, a man approached her and told
her that she had excess baggage. She denied the
allegation since the pieces of baggage did not only belong
to her but also to her Japanese companions. The man did
not believe that the Japanese were her companions and he
charged that she just approached them at the airport. To
settle the matter, he told her to give him two hundred
dollars (US $200) and he apologized for their argument.
She gave him one (1) one hundred dollar bill and two (2)
fifty dollar bills or a total of two hundred dollars (US $200)
as excess baggage fee. She placed the money at the side
of his counter desk and he covered it with a piece of paper.
He did not issue a receipt. She then reported the matter to
JAL's representative. Ms. Kondo identified the employee
who checked her in as the petitioner.4 chanroblesvirtuallawlibrary

In his affidavit, petitioner admitted that he was the one

who checked in Ms. Kondo and her Japanese companions.
They checked in five (5) pieces of luggage which weighed
80 kilos and within the allowed limit for check-in baggage.
He attached the claim checks to the jacket of their tickets,
returned the tickets and passport to Ms. Kondo. He then
heard an altercation involving a woman passenger with
excess hand-carried baggage who was being charged for
it; she was insisting she had paid for it in the counter but
could not produce a receipt. The passenger turned out to
be Ms. Kondo and she was accusing Cocoy Gabriel as the
one who charged her for excess baggage. Mr. Gabriel at
that time was assigned at the THAI Airways counter,
hence, it was impossible that a passenger for a JAL flight
would pay him US $200. Petitioner was talking to the JAL's
representative when two PAL employees and Ms. Kondo
approached them. He was told of Ms. Kondo's claim that
she paid the excess baggage fee to him. Petitioner was
surprised at the accusation since Ms. Kondo had no excess
baggage when she checked in.5 chanroblesvirtuallawlibrary

The investigation committee found petitioner guilty of the

offense charged and recommended his dismissal. Private
respondent PAL adopted the committee's recommendation
and dismissed him from the service effective June 7,
1991.6chanroblesvirtuallawlibrary

On September 12, 1991, petitioner lodged a complaint

against respondent PAL before the NLRC-NCR for illegal
dismissal, attorney's fees and damages. The case was
docketed as NLRC-NCR Case No. 00-10-05750-91 and
raffled off to then Labor Arbiter Raul T. Aquino. Aquino
found the evidence adduced by private respondent PAL in
terminating petitioner's employment insufficient. Aquino
declared petitioner's dismissal illegal and ordered his
reinstatement with backwages. Respondent PAL appealed
the decision of the Labor Arbiter. On May 19, 1995, the
Second Division of public respondent NLRC, composed of
Commissioners Victoriano R. Calaycay, Rogelio I. Rayala
and Raul T. Aquino as presiding commissioner,
promulgated its Resolution reversing the decision of then
Labor Arbiter Aquino and dismissing the complaint against
respondent PAL. Petitioner filed on June 5, 1995, a motion
for the reconsideration of the aforementioned Resolution
and an Amended Motion for Reconsideration on June 15,
1995. Public respondent NLRC, thru the Second Division
with only two commissioners taking part, namely,
Commissioners Calaycay and Rayala, denied the motion.
Hence, this petition for certiorari under Rule 65 of the
Rules of Court where petitioner submits the following
assignment of errors:
"I. Public respondent NLRC acted with grave abuse of
discretion and/or in excess of jurisdiction when the Hon.
Raul T. Aquino, in his capacity as Presiding Commissioner
of the Second Division of the NLRC and as a member
thereof, participated actively in the promulgation of the
aforesaid decision and in the consultation of the members
thereof in reaching the conclusion before it was assigned to
the ponente, Hon. Calaycay.
"II. Public respondent NLRC gravely abused its discretion
as in fact it exceeded its jurisdiction when it declared the
affidavit of Lolita Kondo sufficient to declare his dismissal
from employment legal even without any cross-
examination during the investigation conducted by
Philippine Air Lines.
"III. Public respondent NLRC seriously and gravely erred
amounting to abuse of discretion and/or in excess of its
jurisdiction when it declared in the assailed decision that
the quantum of evidence necessary to justify the supreme
penalty of dismissal of the petitioner have been complied
with, and in not imposing the burden of proving the legality
of the dismissal of the petitioner."
We find merit in this petition.
Petitioner assails the Resolution of the public respondent
NLRC on account of Commissioner Raul T. Aquino's
participation in reviewing and reversing on appeal his own
decision as labor arbiter in NLRC-NCR Case No. 00-10-
05750-91. Respondents contend that Commissioner
Aquino's failure to inhibit himself is a harmless error that
will not infirm the subject resolution. We do not agree. In
the case of Ang Tibay v. Court of Industrial Relations,7
we laid down the requisites of procedural due process in
administrative proceedings, to wit: (1) the right to a
hearing, which includes the right to present one's case and
submit evidence in support thereof; (2) the tribunal must
consider the evidence presented; (3) the decision must
have something to support itself; (4) the evidence must be
substantial; (5) the decision must be based on the
evidence presented at the hearing, or at least contained in
the record and disclosed to the parties affected; (6) the
tribunal or body or any of its judges must act on its own
independent consideration of the law and facts of the
controversy, and not simply accept the views of a
subordinate; (7) the Board or body should, in all
controversial questions, render its decision in such manner
that the parties to the proceeding can know the various
issues involved, and the reason for the decision rendered.
In addition, administrative due process includes (a) the
right to notice, be it actual or constructive, of the
institution of the proceedings that may affect a person's
legal right; (b) reasonable opportunity to appear and
defend his rights and to introduce witnesses and relevant
evidence in his favor; (c) a tribunal so constituted as to
give him reasonable assurance of honesty and
impartiality, and one of competent jurisdiction; and (d) a
finding or decision by that tribunal supported by
substantial evidence presented at the hearing or at least
ascertained in the records or disclosed to the parties.8 It is
self-evident from the ruling case law that the officer who
reviews a case on appeal should not be the same person
whose decision is the subject of review. Thus, we have
ruled that "the reviewing officer must perforce be other
than the officer whose decision is under review."9 chanroblesvirtuallawlibrary

In the case at bar, we hold that petitioner was denied due

process when Commissioner Aquino participated, as
presiding commissioner of the Second Division of the
NLRC, in reviewing private respondent PAL's appeal. He
was reviewing his own decision as a former labor arbiter.
Under Rule VII, Section 2 (b) of the New Rules of
Procedure of the NLRC,10 each Division shall consist of one
member from the public sector who shall act as the
Presiding Commissioner and one member each from the
workers and employers sectors, respectively. The
composition of the Division guarantees equal
representation and impartiality among its members. Thus,
litigants are entitled to a review of three (3) commissioners
who are impartial right from the start of the process of
review. Commissioner Aquino can hardly be considered
impartial since he was the arbiter who decided the case
under review. He should have inhibited himself from any
participation in this case.
Prescinding from this premise, the May 19, 1995 resolution
of the respondent NLRC is void for the Division that
handed it down was not composed of three impartial
commissioners. The infirmity of the resolution was not
cured by the fact that the motion for reconsideration of the
petitioner was denied by two commissioners and without
the participation of Commissioner Aquino. The right of
petitioner to an impartial review of his appeal starts from
the time he filed his appeal. He is not only entitled to an
impartial tribunal in the resolution of his motion for
reconsideration. Moreover, his right is to an impartial
review of three commissioners. The denial of
petitioner's right to an impartial review of his appeal is not
an innocuous error. It negated his right to due process.
IN VIEW WHEREOF, the Resolution of the Second Division
of the NLRC dated May 19, 1995 and its Order dated June
27, 1995 in NLRC-NCR Case No. 00-10-05750-91 is SET
ASIDE. The case is remanded to the NLRC for further
proceedings. No Costs.
SO ORDERED.
Regalado, (Chairman), Romero, and Torres, Jr., JJ.,
concur.
Mendoza, J., No part, Daughter is in PAL
Management.
Endnotes:

G.R. No. L-69746-47 March 31, 1989

BANK OF THE PHILIPPINE ISLANDS EMPLOYEES UNION-ALU,
petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION (NLRC) and BANK OF
THE PHILIPPINE ISLANDS, respondents.
G.R. No. L-76842-44 March 31, 1989
BANK OF THE PHILIPPINE ISLANDS EMPLOYEES UNION, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, ASSOCIATED LABOR
UNIONS, BPIEU-ALU and BANK OF THE PHILIPPINE ISLANDS,
respondents.
G.R. No. L-76916-17 March 31, 1989
ASSOCIATED LABOR UNIONS (ALU) and BANK OF THE PHILIPPINE
ISLANDS EMPLOYEES UNION-ALU (BPIEU-ALU) petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, BANK OF THE
PHILIPPINE ISLANDS and ATTY. IGNACIO P. LACSINA, respondents.
Romeo S. Occena for petitioner in G.R. Nos. 69746-47 & 76916-17.
Ignacio P. Lacsina for petitioner in G.R. Nos. 76842-44 & private respondent
in G.R. No. 76916-17.
The Solicitor General for public respondent.
Sycip, Salazar, Hernandez & Gatmaitan for respondent BPI.

CRUZ, J.:
We have to go back seven years to trace the train of events that began and
chugged its way through the circuitous and sluggish route that has finally
brought it to the decision we are now making. There are three cases here
intertwined which we have consolidated because they all involve the same
employee-employer relations of the Bank of the Philippine Islands and its
personnel.
G.R. Nos. 69746-47
First Issue
In the course of their negotiations with the Bank of the Philippine Islands for a
new collective bargaining agreement to replace the one expiring on March 31,
1982, serious differences arose between the Bank of the Philippine Islands
Employees Union-Metro Manila and its mother federation, the Associated
Labor Unions. This prompted the former to manifest that it would henceforth
negotiate alone with BPI independently of ALU, which in turn, suspended all
the elective officers of BPIEU-Metro Manila led by its president, Carlito
Reyes, who was replaced by Rolando Valdez as acting president. In
retaliation, Reyes and his followers, claiming to be the legal and sole
representatives of BPIEU-Metro Manila, formally disaffiliated from ALU on
November 16, 1982.1
As no agreement could be reached on a wide variety of economic issues, the dispute between BPI and its
employees was certified by the Minister of Labor for compulsory arbitration and docketed in the National Labor
Relations Commission as Certified Cases Nos. 0279 and 0281. 2 These cases were later consolidated with
the Manifestation and Motion for Interpleader and to Consign Union Dues, which was filed by BPI in view of
the conflicting claims of the Reyes and Valdez groups for the said dues. 3
On March 22, 1983, the NLRC resolved the bargaining deadlock by fixing the
wage increases and other economic benefits and ordering them to be
embodied in a new collective bargaining agreement to be concluded by BPIEU-
Metro Manila and ALU with BPI. It did not decide the intra-union dispute,
however, holding that this was under the original jurisdiction of the med-arbiter
and the exclusive appellate jurisdiction of the Bureau of Labor Relations. 4
Claiming to be the labor union referred to in the decision, the Reyes group filed
a petition with the Bureau of Labor Relations for direct certification on the
ground of its disaffiliation from ALU. This petition was denied in a decision
dated June 13, 1983, where BLR Director Cresenciano Trajano held that the
disaffiliation was invalid because it was done beyond the freedom period. The
decision ended with the following disposition:
ACCORDINGLY, this Office hereby resolves not to give due course to the Bank
of the Philippine Islands Employees Unions' disaffiliation from the Associated
Labor Unions, as well as its petition for direct certification.
The Bank of the Philippine Islands, however, is hereby directed to sign jointly
with the Bank of the Philippine Islands Employees Union, petitioner herein, and
the Associated Labor Unions, the collective agreement decreed by the
Commission on 22 March 1983 for the bank's Metropolitan Manila offices with
the qualification that the administration thereof shall be at the account of the
Bank of the Philippine Islands Employees Union. The dues sharing scheme
being observed by BPIEU and ALU shall be maintained. **
The Reyes group then came to this Court in a petition for certiorari, with a
prayer for a temporary restraining order, which we issued on July 11, 1983, to
prevent the BLR and the BPI from enforcing the above-cited decision. 5 We
eventually dismissed the petition for lack of merit and lifted the temporary restraining order on February 16,
1985, later denying the motion for reconsideration on March 27, 1985. 6
Earlier, on April 28, 1983, the Valdez group (with ALU) had filed with the NLRC a motion for a writ of execution
commanding the BPI to negotiate the new collective bargaining agreement with it. 7 In deference to our
temporary restraining order in the Reyes case, the NLRC held in abeyance its action on the motion. 8 The
reaction of the Valdez group was to seek relief from the Court on February 1, 1985, in a petition for certiorari
and injunction, now docketed as G.R. No. 69746. In this petition, it is contended that, for not enforcing the said
decision of March 22, 1983, which has long become final and executory, the NLRC has acted with grave abuse
of discretion and so should be reversed.
The Court has studied the arguments of the parties and is unable to accept the
petitioner's contention. Our finding is that although the temporary restraining
order was strictly speaking addressed only to BPI and ALU, it was entirely
proper for the NLRC itself to abide by it, and not only out of respect for this
Court. The decision sought to be enforced called for the conclusion of a
collective bargaining agreement between BPI and the members of BPIEU-
ALU. The question precisely before the Court then was which as between the
Reyes and Valdez groups should be recognized as the legitimate
representative of the employees in general to negotiate with BPI NLRC had no
jurisdiction to resolve that question. Obviously, its own decision of March 23,
1983, could not be enforced until that question was first cleared.
More importantly, the issue has become moot and academic. In its decision
dated June 13, 1985, the Bureau of Labor Relations did hold that the
disaffiliation of the Reyes group from ALU was invalid because it was done
beyond the freedom period, that is within sixty days before the expiration of the
collective bargaining agreement on March 31, 1982. But that is all past and
done now. That CBA was replaced by another collective bargaining agreement
concluded with BPI by the BPIEU-Metro Manila after its disaffiliation valid this
time because it was done within the freedom period. 9 That agreement expired on March
31, 1985. In fact, even the agreement concluded afterwards was itself to have expired on March 31, 1988, or
almost a year ago. 10
Second Issue
As a result of its merger with the Commercial Bank and Trust Company in
1981, the BPI found it necessary to close the COMTRUST branch in Davao
City and transfer it to General Santos City. Pursuant to an earlier
understanding, seven of the employees of the said branch who were
absorbed by BPI were transferred to the General Santos City branch.
However, three of them, namely Glenna, Ongkiko, Arturo Napales, and
Gregorio Gito, refused to move. After efforts to persuade them failed, BPI
dismissed them. This triggered a strike by the Davao Chapter of the BPIEU-
ALU which was followed by sympathy strikes by other local chapters.11
On October 19, 1983, the Minister of Labor sustained the transfer of the three employees by the BPI and
issued a return-to-work order. 12 This was ignored by the striking workers, who continued to question the
transfer. Another return-to-work order was issued, this time by the NLRC, which was obeyed by the strikers
upon admission by the BPI of the three recalcitrant employees to their original stations in Davao City. This was
done pending the opening of the General Santos City branch.13
Upon the inauguration of the said branch, BPI filed a motion to transfer the said
employees thereto as sanctioned earlier by the Minister of Labor. The situation
was complicated when another employee, Lennie Aninon who had earlier
agreed to transfer, now insisted on remaining in the Davao City branch. She
too was included in the motion, which was granted by the NLRC in its decision
dated December 5, 1984. 14
Napales and Gito agreed to move to General Santos City, but the two lady employees, to wit Ongkiko and
Aninon remained adamant.
The petitioners contend that the decision of the NLRC of December 5, 1984,
directing the transfer of the four employees is also tainted with grave abuse of
discretion and should be set aside.
This matter need not detain us too long for the issue is hardly debatable.
Indeed, the right of the employer to transfer the employees in the interest of
the efficient and economic operation of its business cannot be seriously
challenged. That is its prerogative. The only limitation on the discretion of
management in this regard is its mala fides. The only time the employer cannot
exercise this right is where it is vitiated by improper motive and is merely a
disguised attempt to remove or punish the employee sought to be transferred.
Such improper motive has not been shown in the case at bar. On the contrary,
it has been established that the transfer was necessitated by the fact that the
COMBANK branch in Davao City had to be closed because it was just across
the street from the BPI branch. There was certainly no justification to maintain
the two branches as they both belonged now to the BPI. Moreover, it is not
disputed that the lateral transfer of the employees involved no demotion in their
rank or salary or other benefits.
More to the point, it was expressly provided in the collective bargaining
agreement 15 then existing that:
Section 1. The UNION and all its members hereby recognize that the
Management and operation of the business of the BANK which include, among
others, the hiring of employees, promotion, transfer and dismissals for just
cause as well as the maintenance of order, discipline and efficiency in its
operations, are the sole and exclusive right and prerogative of the BANK
Management. . . .
Section 2. The BANK and the UNION agree that permanent transfer of a
member of the UNION shall be limited only to the offices of the BANK in the
following areas, unless the transfer to an office of the BANK in another area is
requested or agreed to by the member, to wit:
xxx
Member of the UNION's Davao City Chapter, Tagum Chapter, Digos Chapter
to any office of the BANK within the Southern Mindanao area.
It is not disputed that General Santos City is in the Southern Mindanao area.
G.R. Nos. 76842-44
Following the dismissal of its petition against the BLR the Reyes group, on April
26, 1985, filed a motion with the NLRC for the release to it of the union dues
consigned by BPI. 16 This motion was opposed by the Valdez group, which subsequently filed its own
petition for the payment to it of the said dues, on the ground that it was the legitimate BPIEU recognized by
the BLR. 17 In its decision dated September 26, 1986, the NLRC declared as follows:
The disaffiliation of Reyes' group having been disapproved, the local union
referred to in Director Trajano's decision is none other than BPIEU-ALU
(Valdez). It is the union that is entitled to the disputed union dues deposited
with this Commission.
WHEREFORE, judgment is hereby entered, ordering the release to BPIEU-
ALU, thru its Acting President or whoever is acting in that capacity, the portion
of the union dues deposited with this Commission pertaining to the local union,
and to the Associated Labor Unions the portion pertaining to the federation. ***
The Reyes group faults this decision and insists it is its union, as separately
constituted after its disaffiliation from ALU, that is entitled to receive the
disputed dues.
The petitioner is obviously in error. As the disaffiliation of the Reyes group was
disallowed by the BLR because it was done beyond the freedom period, the
Reyes group could not have claimed an Identity distinct from that of the original
BPIEU-Metro Manila. For the same reason, the Valdez group could not exclude
the Reyes group from the same BPIEU-Metro Manila because both of them
were still part of that original local union. In other words, BPIEU-Metro Manila
then consisted of the members of the two contending groups whose affiliation
with ALU, as the mother federation, remained intact.
In holding that the disputed dues were payable to "none other than BPIEU-
ALU (Valdez)," the NLRC could not have intended to exclude the Reyes group
which continued to be part of the BPIEU-Metro Manila because of the
disapproval of its disaffiliation from ALU. In referring to it as "BRIEF ALU
(Valdez)," the NLRC simply recognized Valdez as the lawful head of the entire
BPIEU-Metro Manila, including Reyes and his followers, and was holding that
Valdez, not Reyes, was the person authorized to receive the union's share of
the dues.
In any event, this issue of dues-sharing has also become moot and academic
now because the Reyes group has finally succeeded in disaffiliating from ALU
and is now a separate and independent union. As such, it does not have to
share with ALU whatever union dues it may now collect from its members. But
at the time this petition was filed, the issue was very much alive and had to be
resolved to determine who were entitled to the union dues and in what
proportion. The NLRC therefore did not commit any grave abuse of discretion
in rendering the challenged decision as we have here interpreted it.
G.R. Nos. 76916-17
Following the promulgation by the NLRC of its decision of March 23, 1983, in
Certified Cases Nos. 0279 and 0281, private respondent Ignacio Lacsina filed
a motion for the entry of attorney's lien for legal services to be rendered by him
as counsel of BPIEU in the negotiation of the new collective bargaining
agreement with BPI.
The basis of this motion was a resolution dated August 26, 1982, providing as
follows:
RESOLUTION
WE, the undersigned members of the Bank of P.I. Employees Union, do hereby
resolve as follows:
1. To ratify and confirm the decision of our Union Board to engage the services
of Atty. Ignacio Lacsina as legal counsel in connection with the negotiation for
a new collective bargaining agreement with the Bank of the Philippine Islands
to replace the current one which has expired on March 31, 1982;
2. To undertake payment of attorney's fees to Atty. Lacsina in an amount
equivalent to five (5 %) per centum of the total economic benefits that may be
secured through such negotiation corresponding to the first year of the new
collective bargaining agreement;
3. To authorize the Bank of the Philippine Islands to check off said attomey's
fees from the first lump sum payment of benefits to the employees under the
new collected bargaining agreement and turn over the amount so collective to
Atty. Lacsina or his duly authorized representative. ****
On April 7, 1983, the Labor Arbiter issued an order directing the respondent bank to check off the amount of 5
% of the total economic benefits due its employees under the new collective bargaining agreement between
the bank and the union corresponding to the first year of effectivity thereof and to deliver the amount collected
to Atty. Lacsina or to his duly authorized representative. 18
Accordingly, BPI deducted the amount of P 200.00 from each of the employees
who had signed the authorization.
Upon learning about this, the petitioners challenged the said order, on the
ground that it was not authorized under the Labor Code. On April 15, 1983, the
NLRC issued a resolution setting aside the order and requiring BPI to safekeep
the amounts sought to be deducted "until the rights thereto of the interested
parties shall have been determined in appropriate proceedings. 19 Subsequently,
the NLRC issued an en banc resolution dated September 27, 1983, ordering the release to Lacsina of the
amounts deducted "except with respect to any portion thereof as to which no individual signed authorization
has been given by the members concerned or where such authorization has been withdrawn. 20
The petitioners now impugn this order as contrary to the provisions and spirit
of the Labor Code. While conceding that Lacsina is entitled to payment for his
legal services, they argue that this must be made not by the individual workers
directly, as this is prohibited by law, but by the union itself from its own funds.
In support of this contention, they invoke Article 222(b) of the Labor Code,
providing as follows:
Art. 222. Appearances and Fees.- . . .
(b) No attorney's fees, negotiation fees or similar charges of any kind arising
from any collective bargaining negotiations or conclusions of the collective
agreement shall be imposed on any individual member of the contracting
union: Provided, however, that attorney's fees may be charged against union
funds in an amount to be agreed upon by the parties. Any contract, agreement
or arrangement of any sort to the contrary shall be null and void.
They also cite the case of Pacific Banking Corporation v. Clave 21 where the lawyer's
fee was taken not from the total economic benefits received by the workers but from the funds of their labor
union.
The Court reads the afore-cited provision as prohibiting the payment of
attorney's fees only when it is effected through forced contributions from the
workers from their own funds as distinguished from the union funds. The
purpose of the provision is to prevent imposition on the workers of the duty to
individually contribute their respective shares in the fee to be paid the attorney
for his services on behalf of the union in its negotiations with the management.
The obligation to pay the attorney's fees belongs to the union and cannot be
shunted to the workers as their direct responsibility. Neither the lawyer nor the
union itself may require the individual workers to assume the obligation to pay
the attorney's fees from their own pockets. So categorical is this intent that the
law also makes it clear that any agreement to the contrary shall be null and
void ab initio.
We see no such imposition in the case at bar. A reading of the above-cited
resolution will clearly show that the signatories thereof have not been in any
manner compelled to undertake the obligation they have there assumed. On
the contrary it is plain that they were voluntarily authorizing the check-off of the
attorney's fees from their payment of benefits and the turnover to Lacsina of
the amounts deducted, conformably to their agreement with him. There is no
compulsion here. And significantly, the authorized deductions affected only the
workers who adopted and signed the resolution and who were the only ones
from whose benefits the deductions were made by BPI. No similar deductions
were taken from the other workers who did not sign the resolution and so were
not bound by it.
That only those who signed the resolution could be subjected to the authorized
deductions was recognized and made clear by the order itself of the NLRC. It
was there categorically declared that the check-off could not be made where
"no individual signed authorization has been given by the members concerned
or where such authorization has been withdrawn."
The Pacific Banking Corporation case is not applicable to the present case
because there was there no similar agreement as that entered into between
Lacsina and the signatories of the resolution in question. Absent such an
agreement, there was no question that the basic proscription in Article 222
would have to operate. It is noteworthy, though, that the Court there impliedly
recognized arrangements such as the one at bar with the following significant
observation:
Moreover, the case is covered squarely by the mandatory and explicit
prescription of Art. 222 which is another guarantee intended to protect the
employee against unwarranted practices that would diminish his compensation
without his knowledge and consent. (Emphasis supplied.)
A similar recognition was made in Galvadores v. Trajano, 22 where the payment of the
attorney's fees from the wages of the employees was not allowed because: "No check-offs from any amount
due to employees may be effected without individual written authorities duly signed by the employees
specifically stating the amount, purpose and beneficiary of the deduction. The required individual
authorizations in this case are wanting."
Finally, we hold that the agreement in question is in every respect a valid
contract as it satisfies all the elements thereof and does not contravene law,
morals, good customs, public order, or public policy. On the contrary, it enables
the workers to avail themselves of the services of the lawyer of their choice and
confidence under terms mutually acceptable to the parties and, hopefully, also
for their mutual benefit.
WHEREFORE, all the petitions in G.R. Nos. 69746-47, 76842-44, and 76916-
17 are DISMISSED, with costs against the respective petitioners. It is so
ordered.
Narvasa, Gancayco, Griño-Aquino and Medialdea, JJ., concur.

G.R. No. 109311 June 17, 1997

ZENAIDA ASUNCION, petitioner,
vs.
HON. NATIONAL LABOR RELATIONS COMMISSION, SECOND
DIVISION, PRUDENCION AGBUYA, respondents.
RESOLUTION
ROMERO, J.:
This petition for certiorari seeks the reversal of the January 21, 1993 decision
of the National Labor Relations Commission (NLRC) in NLRC Case No.
003035-92, which affirmed in toto the order of Labor Arbiter Jose G. de Vera
dated February 25, 1992 and the resolution dated March 2, 1993 denying
petitioner's motion for reconsideration thereof.
Private respondent Prudencio Agbuya was employed as designer by ABC
Mirror Tower and Aluminum Supply (ABC) allegedly run by petitioner
Asuncion as general manager. ABC was compelled to retrench some of its
employees, including respondent, due to serious business reversal,
prompting the latter to file against petitioner and ABC a complaint for illegal
dismissal, violation of P.D. No. 525, non-payment of wages and violation of
R.A. No. 6640. On March 11, 1991, Labor Arbiter de Vera rendered a
decision which reads:
WHEREFORE, all the foregoing premises being considered, judgment is
hereby rendered ordering the respondents to reinstate the complainant to his
former position as designer with all the rights, benefits and privileges
appertaining thereto, plus backwages in the total sum of P73,892.00 without
deduction or qualification. Further, the respondents are ordered to pay
complainant the latter's salary differential amounting to P400.00.
All other claims of the complainant are dismissed for lack of
merit.1
After this decision became final and executory due to the failure of petitioner
to file an appeal within the reglementary period, respondent filed a motion for
the issuance of a writ of execution, which was accordingly granted.
After levy but before the scheduled auction sale, petitioner filed a motion to
quash the writ, alleging that the items levied upon were her own properties,
and that she was "not the owner or even part-owner" of ABC, and therefore,
cannot be held personally liable for the judgment award.2
In his Order dated February 25, 1992, Labor Arbiter de Vera dismissed the
motion to quash and the third-party claim and accordingly declared petitioner
liable to the extent of one-half of the judgment award or P36,946.00. It
directed Sheriff Rene Masilungan to continue with the execution process. On
appeal, the NLRC affirmed said order in toto. Hence, this petition.
The petition must be dismissed.
Well-settled is the principle that perfection of an appeal within the statutory or
reglementary period is not only mandatory but also jurisdictional and failure to
do so renders the questioned decision final and executory that deprives the
appellate court of jurisdiction to alter the final judgment much less to entertain
the appeal.3
In the case at bar, it is admitted that the decision of the Labor Arbiter was
received by private respondent' s counsel on April 26, 1991,4 making the last
day for perfecting the appeal May 6, 1991. The decision became final and
executory upon failure of petitioner to appeal within the ten-day period.
Private respondent, therefore, as the prevailing party, is entitled as a matter
of right to the execution of the final and executory judgment in his favor.
This Court has held that once a decision attains finality, it becomes the law of
the case whether or not said decision is erroneous.5 Having been rendered by
a court of competent jurisdiction acting within its authority, the judgment may
no longer be altered even at the risk of legal infirmities and errors it may
contain, which cannot be corrected by certiorari.6
Petitioner alleges that the judgment was rendered without due process of law
and is, therefore, null and void because she was not properly summoned by
the NLRC. The records sufficiently contradict this assertion. The Labor Arbiter
and the NLRC correctly found that, not only was petitioner served with
summons but she also filed an answer to the complaint in the form of a
position paper wherein her inclusion as a respondent was never disputed. "As
a matter of fact, some notices were even addressed to her with the company
as the forwarding addressee.7
She adds that "even assuming, gratia argumenti, that summons was served
upon the person of herein petitioner, still the decision is without factual and
legal foundation." If petitioner, however, regarded the decision as void for lack
of legal basis, then the proper remedy would have been to appeal said
judgment to the NLRC. Having failed in this respect, the assailed decision
stands.
IN VIEW OF THE FOREGOING, the petition is hereby DISMISSED. The
questioned order dated February 25, 1992, and the decision of the National
Labor Relations Commission dated January 21, 1993, are accordingly
AFFIRMED.
SO ORDERED.

G.R. No. L-58011 & L-58012 November 18, 1983

VIR-JEN SHIPPING AND MARINE SERVICES, INC., petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, ROGELIO BISULA
RUBEN ARROZA JUAN GACUTNO LEONILO ATOK, NILO CRUZ,
ALVARO ANDRADA, NEMESIO ADUG SIMPLICIO BAUTISTA, ROMEO
ACOSTA, and JOSE ENCABO respondents.
Antonio R. Atienza for petitioner.
The Solicitor General for respondent NLRC,
Quasha, Asperilia, Ancheta &- Valmonte Pena Marcos Law Offices for private
respondents.
RESOLUTION

GUTIERREZ, JR., J.: ñé+.£ªwph! 1

Before the Court en banc is a motion to reconsider the decision promulgated

on July 20, 1982 which set aside the decision of respondent National Labor
Relations Commission and reinstated the decision of the National Seamen
Board.
To better understand the issues raised in the motion for reconsideration, we
reiterate the background facts of the case, Taken from the decision of the
National Labor Relations Commission: têñ.£îhqwâ£

It appears that on different dates in December, 1978 and January, 1979, the
Seamen entered into separate contracts of employment with the Company,
engaging them to work on board M/T' Jannu for a period of twelve (12) months.
After verification and approval of their contracts by the NSB, the Seamen
boarded their vessel in Japan.
On 10 January 1919, the master of the vessel complainant Rogelio H. Bisula,
received a cable from the Company advising him of the possibility that the
vessel might be directed to call at ITF-controlled ports said at the same time
informing him of the procedure to be followed in the computation of the special
or additional compensation of crew members while in said ports. ITF is the
acronym for the International Transport Workers Federation, a militant
international labor organization with affiliates in different ports of the world,
which reputedly can tie down a vessel in a port by preventing its loading or
unloading, This is a sanction resorted to by ITF to enforce the payment of its
wages rates for seafarers the so-called ITF rates, if the wages of the crew
members of a vessel who have affiliated with it are below its prescribed rates.)
In the same cable of the Company, the expressed its regrets for hot clarifying
earlier the procedure in computing the special compensation as it thought that
the vessel would 'trade in Caribbean ports only.
On 22 March 1979, the Company sent another cable to complainant Bisula,
this time informing him of the respective amounts each of the officers and crew
members would receive as special compensation when the vessel called at the
port of Kwinana Australia, an ITF-controlled port. This was followed by another
cable on 23 March 1979, informing him that the officers and crew members
had been enrolled as members of the ITF in Sidney, Australia, and that the
membership fee for the 28 personnel complement of the vessel had already
been paid.
In answer to the Company's cable last mentioned, complainant Bisula, in
representation of the other officers and crew members, sent on 24 March 1979
a cable informing the Company that the officers and crew members were not
agreeable to its 'suggestion'; that they were not contented with their present
salaries 'based on the volume of works, type of ship with hazardous cargo and
registered in a world wide trade': that the 'officers and crew (were) not
interested in ITF membership if not actually paid with ITF rate that their
'demand is only 50% increase based on present basic salary and that the
proposed wage increase is the 'best and only solution to solve ITF problem'
since the Company's salary rates 'especially in tankers (are) very far in
comparison with other shipping agencies in Manila ...
In reply, the Company proposed a 25% increase in the basic pay of the
complainant crew members, although it claimed, that it would "suffer and
absorb considerable amount of losses." The proposal was accepted by the
Seamen with certain conditions which were accepted by the Company.
Conformably with the agreement of the parties which was effected through the
cables abovementioned, the Seamen were paid their new salary rates.
Subsequently, the Company sought authority from the NSB to cancel the
contracts of employment of the Seamen, claiming that its principals had
terminated their manning agreement because of the actuations of the Seamen.
The request was granted by the NSB Executive Director in a letter dated 10
April 1979. Soon thereafter, the Company cabled the Seamen informing them
that their contracts would be terminated upon the vessel's arrival in Japan. On
19 April 1979 they Arere asked to disembark from the vessel, their contracts
were terminated, and they were repatriated to Manila. There is no showing that
the Seamen were given the opportunity to at least comment on the Company's
request for the cancellation of their contracts, although they had served only
three (3) out of the twelve (12) months' duration of their contracts.
The private respondents filed a complaint for illegal dismissal and non-payment
of earned wages with the National Seamen Board. The Vir-jen Shipping and
Marine Services Inc. in turn filed a complaint for breach of contract and
recovery of excess salaries and overtime pay against the private respondents.
On July 2, 1980, the NSB rendered a decision declaring that the seamen
breached their employment contracts when they demanded and received from
Vir-jen Shipping wages over and above their contracted rates. The dismissal
of the seamen was declared legal and the seamen were ordered suspended.
The seamen appealed the decision to the NLRC which reversed the decision
of the NSB and required the petitioner to pay the wages and other monetary
benefits corresponding to the unexpired portion of the manning contract on the
ground that the termination of the contract by the petitioner was without valid
cause. Vir-jen Shipping filed the present petition.
The private respondents submit the following issues in their motion for
reconsideration:têñ.£îhqwâ£

A. THIS HONORABLE COURT DID VIOLENCE TO LAW AND

JURISPRUDENCE WHEN IT HELD THAT THE FINDING OF FACT OF THE
NATIONAL SEAMEN BOARD THAT THE SEAMEN VIOLATED THEIR
CONTRACTS IS MORE CREDIBLE THAN THE FINDING OF FACT OF THE
NATIONAL LABOR RELATIONS COMMISSION THAT THE SEAMEN DID
NOT VIOLATE THEIR CONTRACT.
B. THIS HONORABLE COURT ERRED IN FINDING THAT VIR-JEN'S
HAVING AGREED TO A 25% INCREASE OF THE SEAMEN'S BASIC WAGE
WAS NOT VOLUNTARY BUT WAS DUE TO THREATS.
C. THIS HONORABLE COURT ERRED WHEN IT TOOK COGNIZANCE OF
THE ADDENDUM AGREEMENT; ASSUMING THAT THE ADDENDUM
AGREEMENT COULD BE TAKEN COGNIZANCE OF, THIS HONORABLE
COURT ERRED WHEN' IT FOUND THAT PRIVATE RESPONDENTS HAD
VIOLATED THE SAME.
D, THIS HONORABLE COURT ERRED WHEN IT DID NOT FIND
PETITIONER VIRJEN LIABLE FOR HAVING TERMINATED BEFORE
EXPIRY DATE THE EMPLOYMENT CONTRACTS OF PRIVATE
RESPONDENTS, THERE BEING NO LEGAL AND JUSTIFIABLE GROUND
FOR SUCH TERMINATION.
E. THIS HONORABLE COURT ERRED IN FINDING THAT THE
PREPARATION BY PETITIONER OF THE TWO PAYROLLS AND THE
EXECUTION OF THE SIDE CONTRACT WERE NOT MADE IN BAD FAITH.
F. THIS HONORABLE COURT INADVERTENTLY DISCRIMINATED
AGAINST PRIVATE RESPONDENTS.
At the outset, we are faced with the question whether or not the Court en banc
should give due course to the motion for reconsideration inspite of its having
been denied twice by the Court's Second Division. The case was referred to
and accepted by the Court en banc because of the movants' contention that
the decision in this case by the Second Division deviated from Wallem Phil.
Shipping Inc. v. Minister of Labor (L-50734-37, February 20, 1981), a First
Division case with the same facts and issues. We are constrained to answer
the initial question in the affirmative.
A fundamental postulate of Philippine Constitutional Law is the fact, that there
is only one Supreme Court from whose decisions all other courts are required
to take their bearings. (Albert v. Court of First Instance, 23 SCRA 948; Barrera
v. Barrera, 34 SCRA 98; Tugade v. Court of Appeals, 85 SCRA 226). The
majority of the Court's work is now performed by its two Divisions, but the Court
remains one court, single, unitary, complete, and supreme. Flowing from this
nature of the Supreme Court is the fact that, while ' individual Justices may
dissent or partially concur with one another, when the Court states what the
law is, it speaks with only one voice. And that voice being authoritative should
be a clear as possible.
Any doctrine or principle of law laid down by the Court, whether en banc or in
Division, may be modified or reversed only by the Court en banc. (Section 2(3),
Article X, Constitution.) In the rare instances when one Division disagrees in its
views with the other Division, or the necessary votes on an issue cannot be
had in a Division, the case is brought to the Court en banc to reconcile any
seeming conflict, to reverse or modify an earlier decision, and to declare the
Court's doctrine. This is what has happened in this case.
The decision sought to be reconsidered appears to be a deviation from the
Court's decision, speaking through the First Division, in Wallem Shipping, Inc.
v. Hon. Minister of Labor (102 SCRA 835). Faced with two seemingly conflicting
resolutions of basically the same issue by its two Divisions, the Court.
therefore, resolved to transfer the case to the Court en banc. Parenthetically,
the petitioner's comment on the third motion for reconsideration states that the
resolution of the motion might be the needed vehicle to make the ruling in the
Wallem case clearer and more in time with the underlying principles of the
Labor Code. We agree with the petitioner.
After an exhaustive, painstaking, and perspicacious consideration of the
motions for reconsideration and the comments, replies, and other pleadings
related thereto, the Court en banc is constrained to grant the motions. To grant
the motion is to keep faith with the constitutional mandate to afford protection
to labor and to assure the rights of workers to self-organization and to just and
humane conditions of work. We sustain the decision of the respondent National
labor Relations Commission.
There are various arguments raised by the petitioners but the common thread
running through all of them is the contention, if not the dismal prophecy, that if
the respondent seamen are sustained by this Court, we would in effect "kill the
en that lays the golden egg." In other words, Filipino seamen, admittedly
among the best in the world, should remain satisfied with relatively lower if not
the lowest, international rates of compensation, should not agitate for higher
wages while their contracts of employment are subsisting, should accept as
sacred, iron clad, and immutable the side contracts which require them to
falsely pretend to be members of international labor federations, pretend to
receive higher salaries at certain foreign ports only to return the increased pay
once the ship leaves that port, should stifle not only their right to ask for
improved terms of employment but their freedom of speech and expression,
and should suffer instant termination of employment at the slightest sign of
dissatisfaction with no protection from their Government and their courts.
Otherwise, the petitioners contend that Filipinos would no longer be accepted
as seamen, those employed would lose their jobs, and the still unemployed
would be left hopeless.
This is not the first time and it will not be the last where the threat of
unemployment and loss of jobs would be used to argue against the interests of
labor; where efforts by workingmen to better their terms of employment would
be characterized as prejudicing the interests of labor as a whole.
In 1867 or one hundred sixteen years ago. Chief Justice Beasley of the
Supreme Court of New Jersey was ponente of the court's opinion declaring as
a conspiracy the threat of workingmen to strike in connection with their efforts
to promote unionism, têñ.£îhqw â£

It is difficult to believe that a right exists in law which we can scarcely conceive
can produce, in any posture of affairs, other than injuriois results. It is simply
the right of workmen, by concert of action, and by taking advantage of their
position, to control the business of another, I am unwilling to hold that a right
which cannot, in any, event, be advantageous to the employee, and which must
always be hurtful to the employer, exists in law. In my opinion this indictment
sufficiently shows that the force of the confederates was brought to bear upon
their employer for the purpose of oppression and mischief and that this
amounts to a conspiracy, (State v. Donaldson, 32 NJL 151, 1867. Cited in
Chamberlain, Sourcebook on Labor, p. 13. Emphasis supplied)
The same arguments have greeted every major advance in the rights of the
workingman. And they have invariably been proved unfounded and false.
Unionism, employers' liability acts, minimum wages, workmen's compensation,
social security and collective bargaining to name a few were all initially opposed
by employers and even well meaning leaders of government and society as
"killing the hen or goose which lays the golden eggs." The claims of
workingmen were described as outrageously injurious not only to the employer
but more so to the employees themselves before these claims or demands
were established by law and jurisprudence as "rights" and before these were
proved beneficial to management, labor, and the nation as a whole beyond
reasonable doubt.
The case before us does not represent any major advance in the rights of labor
and the workingmen. The private respondents merely sought rights already
established. No matter how much the petitioner-employer tries to present itself
as speaking for the entire industry, there is no evidence that it is typical of
employers hiring Filipino seamen or that it can speak for them.
The contention that manning industries in the Philippines would not survive if
the instant case is not decided in favor of the petitioner is not supported by
evidence. The Wallem case was decided on February 20, 1981. There have
been no severe repercussions, no drying up of employment opportunities for
seamen, and none of the dire consequences repeatedly emphasized by the
petitioner. Why should Vir-jen be all exception?
The wages of seamen engaged in international shipping are shouldered by the
foreign principal. The local manning office is an agent whose primary function
is recruitment and who .usually gets a lump sum from the shipowner to defray
the salaries of the crew. The hiring of seamen and the determination of their
compensation is subject to the interplay of various market factors and one key
factor is how much in terms of profits the local manning office and the foreign
shipowner may realize after the costs of the voyage are met. And costs include
salaries of officers and crew members.
Filipino seamen are admittedly as competent and reliable as seamen from any
other country in the world. Otherwise, there would not be so many of them in
the vessels sailing in every ocean and sea on this globe. It is competence and
reliability, not cheap labor that makes our seamen so greatly in demand.
Filipino seamen have never demanded the same high salaries as seamen from
the United States, the United Kingdom, Japan and other developed nations.
But certainly they are entitled to government protection when they ask for fair
and decent treatment by their employer.-, and when they exercise the right to
petition for improved terms of employment, especially when they feel that these
are sub-standard or are capable of improvement according to internationally
accepted rules. In the domestic scene, there are marginal employers who
prepare two sets of payrolls for their employees — one in keeping with
minimum wages and the other recording the sub-standard wages that the
employees really receive, The reliable employers, however, not only meet the
minimums required by fair labor standards legislation but even go way above
the minimums while earning reasonable profits and prospering. The same is
true of international employment. There is no reason why this Court and the
Ministry of Labor and. Employment or its agencies and commissions should
come out with pronouncements based on the standards and practices of
unscrupulous or inefficient shipowners, who claim they cannot survive without
resorting to tricky and deceptive schemes, instead of Government maintaining
labor law and jurisprudence according to the practices of honorable,
competent, and law-abiding employers, domestic or foreign.
If any minor advantages given to Filipino seamen may somehow cut into the
profits of local manning agencies and foreign shipowners, that is not sufficient
reason why the NSB or the ILRC should not stand by the former instead of
listening to unsubstantiated fears that they would be killing the hen which lays
the golden eggs.
Prescinding from the above, we now hold that neither the National Seamen
Board nor the National Labor Relations Commission should, as a matter of
official policy, legitimize and enforce cubious arrangements where shipowners
and seamen enter into fictitious contracts similar to the addendum agreements
or side contracts in this case whose purpose is to deceive. The Republic of the
Philippines and its ministries and agencies should present a more honorable
and proper posture in official acts to the whole world, notwithstanding our
desire to have as many job openings both here and abroad for our workers. At
the very least, such as sensitive matter involving no less than our dignity as a
people and the welfare of our workingmen must proceed from the Batasang
Pambansa in the form of policy legislation, not from administrative rule making
or adjudication
Another issue raised by the movants is whether or not the seamen violated
their contracts of employment.
The form contracts approved by the National Seamen Board are designed to
protect Filipino seamen not foreign shipowners who can take care of
themselves. The standard forms embody' the basic minimums which must be
incorporated as parts of the employment contract. (Section 15, Rule V, Rules
and Regulations Implementing the Labor Code.) They are not collective
bargaining agreements or immutable contracts which the parties cannot
improve upon or modify in the course of the agreed period of time. To state,
therefore, that the affected seamen cannot petition their employer for higher
salaries during the 12 months duration of the contract runs counter to
established principles of labor legislation. The National Labor Relations
Commission, as the appellate tribunal from decisions of the National Seamen
Board, correctly ruled that the seamen did not violate their contracts to warrant
their dismissal.
The respondent Commission ruled: têñ.£îhqwâ£

In the light of all the foregoing facts, we find that the cable of the seamen
proposing an increase in their wage rates was not and could not have been
intended as a threat to comp el the Company to accede to their proposals. But
even assuming, if only for the sake of argument, that the demand or — proposal
for a wage increase was accompanied by a threat that they would report to ITF
if the Company did not accede to the contract revision - although there really
was no such threat as pointed out earlier — the Seamen should not be held at
fault for asking such a demand. In the same case cited above, the Supreme
Court held: têñ.£îhqw â£
Petitioner claims that the dismissal of private respondents was justified
because the latter threatened the ship authorities in acceding to their demands,
and this constitutes serious misconduct as contemplated by the Labor Code.
This contention is not well-taken. But even if there had been such a threat,
respondents' behavior should not be censured because it is but natural for
them to employ some means of pressing their demands for petitioner, the
refusal to abide with the terms of the Special Agreement, to honor and respect
the same, They were only acting in the exercise of their rights, and to deprive
them of their freedom of expression is contrary to law and public policy. There
is no serious misconduct to speak of in the case at bar which would justify
respondents' dismissal just because of their firmness in their demand for the
fulfillment by petitioner of its obligation it entered into without any coercion,
specially on the part of private respondents. (Emphasis supplied).
The above citation is from Wallem.
The facts show that when the respondents boarded the M/T Jannu there was
no intention to send their ship to Australia. On January 10, 1979, the petitioner
sent a cable to respondent shipmaster Bisula informing him of the procedure
to be followed in the computation of special compensation of crewmembers
while in ITF controlled ports and expressed regrets for not having earlier
clarified the procedure as it thought that the vessel would trade in Carribean
ports only.
On March 22, 1979, the petitioner sent another cable informing Bisula of the
special compensation when the ship would call at Kwinana Australia.
The following day, shipmaster Bisula cabled Vir-jen stating that the officers and
crews were not interested in ITF membership if not paid ITF rates and that their
only demand was a 50 percent increase based on their then salaries. Bisula
also pointed out that Vir-jen rates were "very far in comparison with other
shipping agencies in Manila."
In reply, Vir-jen counter proposed a 25 percent increase. Only after Kyoei
Tanker Co., Ltd., declined to increase the lumps sum amount given monthly to
Vir-jen was the decision to terminate the respondents' employment formulated.
The facts show that Virjen Initiated the discussions which led to the demand
for increased . The seamen made a proposal and the petitioner organized with
a counter-proposal. The ship had not vet gone to Australia or any ITF controlled
port. There was absolutely no mention of any strike. much less a threat to
strike. The seamen had done in act which under Philippine law or any other
civilized law would be termed illegal, oppressive, or malicious. Whatever
pressure existed, it was mild compared to accepted valid modes of labor
activity.
We reiterate our ruling in Wallem. têñ.£îhqw â£

Petitioner claims that the dismissal of private respondents was justified

because the latter threatened the ship authorities in acceding to their demands,
and this constitutes serious misconduct as contemplated by the Labor Code.
This contention is not well-taken. The records fail to establish clearly the
commission of any threat, But even if there had been such a threat,
respondents' behavior should not be censured because it is but natural for
them to employ some means of pressing their demands for petitioner, who
refused to abide with the terms of the Special Agreement, to honor and respect
the same, They were only acting in the exercise of their rights, and to deprive
them of their form of expression is contrary to law and public policy. ...
Our dismissing the petition is premised on the assumption that the Ministry of
Labor and Employment and all its agencies exist primarily for the workinginan's
interests and, of course, the nation as a whole. The points raised by the
Solicitor-General in his comments refer to the issue of allowing what the
petitioner importunes under the argument of "killing the hen which lays the
golden eggs." This is one of policy which should perhaps be directed to the
Batasang Pambansa and to our country's other policy makers for more specific
legislation on the matter, subject to the constitutional provisions protecting
labor, promoting social justice, and guaranteeing non-abridgement of the
freedom of speech, press, peaceable assembly and petition. We agree with
the movants that there is no showing of any cause, which under the Labor Code
or any current applicable law, would warrant the termination of the respondents'
services before the expiration of their contracts. The Constitution guarantees
State assurance of the rights of workers to security of tenure. (Sec. 9, Article
II, Constitution). Presumptions and provisions of law, the evidence on record,
and fundamental State policy all dictate that the motions for reconsideration
should be granted.
WHEREFORE, the motions for reconsideration are hereby GRANTED. The
petition is DISMISSED for lack of merit. The decision of the National Labor
Relations Commission is AFFIRMED. No costs.
SO ORDERED. 1äwphï1.ñët

SECOND DIVISION

[G.R. No. 153859. December 11, 2003.]

FILIPINAS (Pre-fabricated Bldg.) SYSTEMS "FILSYSTEMS,"

INC. and FELIPE A. CRUZ, JR., Petitioners, v. NATIONAL
LABOR RELATIONS COMMISSION and CRESENCIANO
BEBANCO, JUANITO R. BENZON, REY NUALLA, BONIFACIO
TORRES, ERNESTO SINCONEQUE and EMILIO ANEANO,
Respondents.

DECISION

PUNO, J.:
The facts reveal that a complaint for illegal dismissal and monetary
claims for service incentive leave, 13th month pay and night shift
differential was filed by respondents against petitioners before the
National Labor Relations Commission. 1 The complaint was
assigned to Labor Arbiter Donato G. Quinto, Jr. who ordered the
parties to file their position paper. Respondents complied, but not
the petitioners despite several warnings and time extensions. The
inaction was construed as a waiver by petitioners of their right to
present evidence. 2

The Labor Arbiter decided the complaint on the merit and ruled in
favor of respondents. He sustained their claim of illegal dismissal as
petitioners failed to adduce contrary evidence. Petitioners were
ordered to reinstate respondents. The monetary claims of the
respondents were likewise granted. 3

Petitioners appealed to the National Labor Relations Commission.

For the first time, they submitted evidence that respondents were
project employees and that their dismissal was due to the
discontinuation of the Jaka Tower I project where they were
assigned. Respondents, however, assailed the jurisdiction of the
NLRC over the appeal for failure of the petitioners to file the appeal
bond within the ten (10)-day reglementary period. They further
contended that it was too late for petitioners to present evidence in
the NLRC.

The NLRC nevertheless assumed jurisdiction over the appeal. Due

to the evidence presented by petitioners on the issue of illegal
dismissal, it remanded the case to the Labor Arbiter for further
proceedings. 4 Respondents’ motion for reconsideration was denied.
5

Respondents then repaired to the Court of Appeals on a Petition for

Certiorari. The appellate court ruled that the NLRC did not have
jurisdiction over the appeal since the appeal bond of the petitioners
was filed out of time. It reinstated the decision of the Labor Arbiter.
6 Petitioners’ motion for reconsideration proved futile.cralaw : red

Hence this petition where petitioners raise the following issues: chanrob1es virtual 1aw library

1. Whether or not the Court of Appeals erred and committed grave

abuse of discretion in finding and ruling that the NLRC has not
acquired jurisdiction on the appeal of the petitioners for submitting
an appeal bond seven (7) days beyond the ten (10)-day
reglamentary (sic) period in perfecting an appeal;

2. Whether or not the Court of Appeals erred and committed grave

abuse of discretion in finding and ruling that: jgc:chanrobles.com.ph

"The remand of the case to the Labor Arbiter due to the conflicting
claims of the parties, comes as a surprise to us. As a quasi-judicial
agency vested with jurisdiction to resolve labor disputes, it is but
natural for the NLRC to encounter conflicting claims while
discharging its mandate. To insist on a policy of remanding a case
to the Labor Arbiter each time conflicting claims arise in a case
would be an abdication of duty by the NLRC as conflicts are
inherent and integral in all disputes, whether labor or otherwise.

x x x"

3. Whether or not the Court a quo erred and committed grave

abuse of discretion in giving due course to the private respondent’s
petition for certiorari under Rule 65 of the 1997 Rules on Civil
Procedure; and in annulling and setting aside the Resolutions (of)
the NLRC, and reinstating the Decision of the Labor Arbiter ordering
the reinstatement of the private respondents, with full backwages,
and monetary awards for 13th month pay and Service Incentive
Leave pay. 7

We affirm. The Labor Code provides a ten (10)-day period from

receipt of the decision of the Arbiter for the filing of an appeal
together with an appeal bond if the decision involves a monetary
award in favor of the employees, viz: chanrob1es virtual 1aw library

ART. 223. Appeal. — Decisions, awards, or orders of the Labor

Arbiter are final and executory unless appealed to the Commission
by any or both parties within ten (10) calendar days from receipt of
such decisions, awards, or orders. . . .

In case of a judgment involving a monetary award, an appeal by

the employer may be perfected only upon the posting of a cash or
surety bond issued by a reputable bonding company duly
accredited by the Commission in the amount equivalent to the
monetary award in the judgment appealed from.
x x x. (Emphasis supplied)

The NLRC Rules of Procedure 8 likewise require the appeal and the
appeal bond to be filed within the ten (10)-day reglementary
period:chanrob1es virtual 1aw library

Section 1. Periods of Appeal. — Decisions, awards, or orders of the

Labor Arbiter and the POEA Administrator shall be final and
executory unless appealed to the Commission by any or both
parties within ten (10) calendar days from receipt of such decisions,
awards, or orders of the Labor Arbiter or of the Administrator, and
in case of a decision or of the Regional Director or his duly
authorized Hearing Officer within five (5) calendar days from
receipt of such decisions, awards or orders. If the 10th or 5th day,
as the case may be, falls on a Saturday, Sunday or a holiday, the
last day to perfect the appeal shall be the next working day.

x x x

Section 3. Requisites for Perfection of Appeal. — (a) The appeal

shall be filed within the reglementary period as provided in Section
1 of this Rule; shall be under oath with proof of payment of the
required appeal fee and the posting of a cash surety bond as
provided in Section 5 of this Rule (which provides how much and
where the appeal fee is to be paid); shall be accompanied by a
memorandum of appeal which shall state the grounds relied upon
and the arguments in support thereof; the relief prayed for; and a
statement of the date when the appellant received the appealed
decision, order or award and proof of service on the other party of
such appeal.

A mere notice of appeal without complying with the other requisite

aforestated shall not stop the running of the period for perfecting
an appeal.

x x x
Section 7. No Extension of Period. — No motion or request for
extension of the period within which to perfect an appeal shall be
allowed.

x x x

We have consistently ruled that payment of the appeal bond is a

jurisdictional requisite for the perfection of an appeal to the NLRC.
9 It is only in rare instances that the court relaxes the rule upon a
showing of substantial compliance with it and to prevent patent
injustice.

In the case at bar, petitioners alleged that they received a copy of

the Arbiter’s decision on October 31, 1998. 10 Their memorandum
of appeal was dated November 9, 1998, but their appeal bond to
stay execution of the decision was executed only on November 17,
1998. 11 The records show no partial payment of the bond was
made during the reglementary period nor was there any
explanation for its late filing. Given these facts, the late filing of the
bond divested the NLRC of its jurisdiction to entertain petitioners’
appeal.

Likewise, we cannot countenance the late submission of petitioners’

evidence with the NLRC. Petitioners should have adduced their
evidence on the issue of illegal dismissal before the Labor Arbiter.
They failed to do so despite the opportunities given to them by the
Arbiter. It was only when an adverse decision was rendered against
them by the Arbiter that they offered to submit their evidence
before the NLRC refuting respondents’ complaint of illegal dismissal.
Such a practice cannot be tolerated for it will defeat the speedy
administration of justice involving our poor workers. Moreover, it
smacks of unfairness. cralaw : red

Yet, this is not all. Petitioners likewise ran roughshod of the

procedural rules of the appellate court. Respondents’ comment
alleges that the appellate court already declared its judgment final
and executory. An entry of judgment was made after petitioners’
motion for reconsideration of the appellate court’s decision was
denied on October 31, 2001 and no petition was filed before this
Court. Atty. Rodolfo P. Orticio, however, moved for cancellation of
the entry of judgment on the ground that he is the new counsel of
the petitioners and that he received a copy of the denial of their
motion for reconsideration only on June 19, 2002. He contended
that his request for cancellation was filed within the allowable
period. In a resolution dated August 20, 2002 denying the request,
the Court of Appeals ruled that: chanrob1es virtual 1aw library

From the records, it appears that when the decision and resolution
denying the Motion for Reconsideration dated 31 October 2001
were received, Atty. Orticio was not yet the counsel for Private
Respondent. In fact, he filed his notice of appearance on 23
November 2001 after receipt on 9 November 2001 by private
respondent’s former counsel, Atty. Louis Acosta, of the resolution
denying the motion for reconsideration. A judgment becomes final
provided there was proper service of notice thereof. In this case,
the records clearly show there was such proper service upon
private respondent’s former counsel, Atty. Louis Acosta. Therefore,
the decision of 2 April 2001 did become final and executory, leaving
Us no more discretion to recall the entry of judgment. 12

It is thus contended by respondents that the petition at bar should

not be allowed as the decision of the appellate court has already
become final.

Again, we agree. Petitioners should have filed the present petition

within fifteen days under Rule 45 of the Rules of Court, viz: chanrob1es virtual 1aw library

SECTION 1. Filing of petition with Supreme Court. — A party

desiring to appeal by certiorari from a judgment or final order or
resolution of the Court of Appeals, the Sandiganbayan, the Regional
Trial Court or other courts whenever authorized by law, may file
with the Supreme Court a verified petition for review on certiorari.
The petition shall raise only questions of law which must be
distinctly set forth.

SECTION 2. Time for filing. — The petition shall be filed within

fifteen (15) days from notice of the judgment or final order or
resolution appealed from, or of the denial of the petitioner’s motion
for new trial or reconsideration filed in due time after notice of the
judgment. . . ..

Petitioners received a copy of the denial of their motion for

reconsideration of the Court of Appeals’ decision on November 9,
2001. They filed an extension of time to file the petition at bar on
June 16, 2002, alleging that they have a new counsel. We note,
however, that petitioners obtained the services of present counsel
on November 23, 2001. Thus, there was ample time for their
counsel to appeal to this Court the adverse ruling of the appellate
court. The appeal was not seasonably made by said counsel and
such procedural lapse is binding on petitioners.

IN VIEW WHEREOF, the petition is dismissed. The decision of the

Labor Arbiter is reinstated with the modification that if
reinstatement of respondents is not feasible, they should be paid
separation pay in accordance with law.

SO ORDERED. cralaw : red

G.R. Nos. 116476-84 May 21, 1998

ROSEWOOD PROCESSING, INC., Petitioner, vs. NATIONAL LABOR
RELATIONS COMMISSION, NAPOLEON C. MAMON, ARSENIO
GAZZINGAN, ROMEO C. VELASCO, ARMANDO L. BALLON, VICTOR E.
ALDEZA, JOSE L. CABRERA, VETERANS PHILIPPINE SCOUT SECURITY
AGENCY, and/or ENGR. SERGIO JAMILA IV, Respondents.

PANGANIBAN, J.:
Under the Labor Code, an employer is solidarily liable for legal ages due
security guards for the period of time they were assigned to it by its contracted
security agency. However, in the absence of proof that the employer itself
committed the acts constitutive of illegal dismissal or conspired with the
security agency in the performance of such acts, the employer shall not be
liable for back wages and/or separation pay arising as a consequence of such
unlawful termination.
The Case
These are the legal principles on which this Court bases its resolution of this
special civil action for certiorari, seeking the nullification of the April 28, 1994
Resolution and the July 12, 1994 Order of the National Labor Relations
Commission, which dismissed petitioner's appeal from the labor arbiter's
Decision and denied its Motion for Reconsideration, respectively, in NLRC NCR
Case Nos. 00-05-02834-91, 00-08-04630-91, 00-07-03966-91, 00-09-05617-
91, 00-07-03967-91, 00-07-04455-91, 00-08-05030-91, 00-11-06389-91, and
00-03-01642-92.
On May 13, 1991, a complaint for illegal dismissal; underpayment of wages;
and for nonpayment of overtime pay, legal holiday pay, premium pay for
holiday and rest day, thirteenth month pay, cash bond deposit, unpaid wages
and damages was filed against Veterans Philippine Scout Security Agency
and/or Sergio Jamila IV (collectively referred to as the "security agency," for
brevity). Thereafter, petitioner was impleaded as a third-party respondent by
the security agency. In due course, Labor Arbiter Ricardo C. Nora rendered a
consolidated Decision dated March 26, 1993, which disposed as follows: 1
IN VIEW OF ALL THE FOREGOING, respondents Veterans Philippine Scout
Security Agency, Sergio Jamila IV, and third-party respondent Rosewood
Processing, Inc. are hereby ordered to pay jointly and severally complainants
the following amounts, to wit:
1. Napoleon Mamon P126,411.10
2. Arsenio Gazzingan 128,639.71
3. Rodolfo Velasco 147,114.43
4. Armando Ballon 116,894.70
5. Jose L. Cabrera 133,047.81
6. Victor Aldeza 137,046.64
__________
TOTAL P789,154.39
=========
representing their monetary benefits in the amount of SEVEN HUNDRED
EIGHTY NINE THOUSAND ONE HUNDRED FIFTY FOUR PESOS AND 39/100
CENTAVOS (P789,154.39).
Respondents are likewise ordered to pay attorney's fees in the amount of
P78,915.43 within ten (10) days from receipt of this Decision.
All other issues are hereby [d]ismissed for failure of the complainants to fully
substantiate their claims.
The appeal filed by petitioner was dismissed by the National Labor Relations
Commission 2 in its Resolution promulgated April 28, 1994, for failure of the
petitioner to file the required appeal bond within the reglementary period. 3
Pertinent portions of the challenged Resolution are herewith quoted:
It appears on record that [petitioner] received their copy of the [labor
arbiter's] decision on April 2, 1993 and subsequently filed a "Notice of Appeal
with Memorandum of Appeal" on April 26, 1993, in violation of Rule VI, Section
1, 3, and 6 of the 1990 New Rules of Procedure of the NLRC . . . .
xxx xxx xxx
Clearly, the appeal filed by the [petitioners] on April 12, 1993 was not
perfected within the reglementary period, and the decision dated March 26,
1993 became final and executory as of April 23, 1993.
WHEREFORE, the appeal is hereby DISMISSED.
In its motion for reconsideration, petitioner contended that it received a copy
of the labor arbiter's Decision only on April 6, 1993, and that it filed on April
16, 1993 within the prescribed time a Notice of Appeal with a Memorandum on
Appeal, a Motion to Reduce Appeal Bond and a surety bond issued by
Prudential Guarantee and Assurance, Inc. in the amount of P50,000. 4 Though
not opposed by the complainants and the security agency, the arguments
stated in the motion were not taken up by Respondent Commission.
Reconsideration was nonetheless denied by Respondent Commission in its
Order of July 12, 1994, quoted below: 5
Section 14, Rule VII of the NLRC New Rules of Procedure allows [u]s to
entertain a motion for reconsideration only on "palpable or patent" errors [w]e
may have committed in [o]ur disputed April 28, 1994 resolution.
There being no such assignment here, [petitioner's] motion for reconsideration
dated May 19, 1994 is hereby DENIED for lack of merit.
Hence, this recourse. 6
In a Resolution dated March 20, 1995, this Court issued a temporary
restraining order enjoining the respondents and their agents from
implementing and enforcing the assailed Resolution and Order until further
notice. 7
The Facts
Undisputed are the facts of this case, narrated by the labor arbiter as follows:
All the complainants were employed by the [security agency] as security
guards: Napoleon Mamon on October 7, 1989; Arsenio Gazzingan on
September 25, 1988; Rodolfo C. Velasco on January 5, 1987; Armando Ballon
on June 28, 1990; Victor Aldeza on March 21, 1990; and Jose L. Cabrera [in]
January 1988.
Napoleon Mamon started working for the [security agency] on October 7, 1989
and was assigned as office guard for three (3) days without any pay nor
allowance as it was allegedly an on[-the-]job training so there [was] no pay[.]
On October 10, 1989, he was transferred to the residence of Mr. Benito Ong
with 12 hours duty a day receiving a salary very much less than the minimum
wage for eight (8) hours work until February 3, 1990 when he received an
order transferring him to Rosewood Processing, Inc. effective that date . . . ;
[a]t Rosewood Processing, Inc., he was required to render also 12 hours duty
every day with a salary of P2,600.00/month. He was not given his pay for
February 1 and 2 by the paymaster of [the security agency] allegedly because
the payroll could not be located so after 3 to 4 times of going back and forth to
[the security agency's] office to get his salary[;] [after] . . . two (2) days he
gave up because he was already spending more than what he could get thru
transportation alone. On May 16, 1991, Rosewood Processing, Inc. asked for
the relief of Mamon and other guards at Rosewood because they came to know
that complainants filed a complaint for underpayment on May 13, 1991 with
the National Labor Relations Commission[.] On May 18 to 19, 1991, [the
security agency] assigned him to their [m]ain [o]ffice. After that, complainant
was floated until May 29, 1991 when he was assigned to Mead Johnson
Philippines Corporation. [A]t about a week later, [the security agency] received
summons on complainant's complaint for underpayment and he was called to
[the security agency's] office. When he reported, he was told to sign a
"Quitclaim and Waiver['] by Lt. R. Rodriguez because according to the latter,
he [could] only get a measly sum from his complaint with the NLRC and if he
(complainant) [signed] the quitclaim and waiver he [would] be retained at his
present assignment which [was] giving quite a good salary and other benefits
but if he [did] not sign the quitclaim and waiver, he [would] be relieved from
his post and [would] no longer be given any assignment. . . . He was given up
to the end of July 1991 to think it over. At the end of July 1991, h[e] was
approached by the Security in Charge A. Azuela and asked him to sign the
quitclaim and waiver and when he refused to sign, he was told that the
following day August 1, 1991, he [would have] no more assignment and
should report to their office. Thinking that it was only a joke, he reported the
following day to the detachment commander Mr. A. Yadao and he was told that
the main office . . . relieved him because he did not sign the quitclaim and
waiver. He reported to their office asking for an assignment but he was told by
R. Rodriguez that "I no longer can be given an assignment so I had better
resign". He went back several times to the office of the [security agency] but
every time the answer was the same[:] that he better tender his resignation
because he cannot be given any assignment although respondent was
recruiting new guards and posting them.
Arsenio Gazzingan started to work for the [security agency] on September 29,
1988. [Note: the introductory paragraph stated September 25, 1988.] He was
assigned to Purefoods Breeding Farm at Calauan, Laguna and given a salary of
P54.00 a day working eight (8) hours. After three (3) months, he was given an
examination and passed the same. On December 26, 1988, he was given an
increase and was paid P64.00/day working eight (8) hours; [h]e remained at
the same post for 8 months and transferred to Purefoods Feed Mill at Sta.
Rosa, Laguna, with the same salary and the same tour of duty, 8 hours[.] After
four (4) months, he was transferred to Purefoods Grand Perry at Sta. Rosa,
Laguna, and after eleven (11) days on June 1989, he was transferred to
Rosewood Processing, Inc. at Meycauayan, Bulacan and required to work for
12 hours at a salary of P94.00/day for one year. [In] June 1990, he was
assigned at Purefoods DELPAN [to] guard . . . a barge loaded with corn and
rendered 12 hours work/day with a salary of only P148.00/day and after 24
days, he was floated for one month. He reported to [the security agency's]
office and was assigned to Purefoods Breeder Farm in Canlubang rendering 8
hours work per day receiving only P178.00/day. After 11 days, he asked to be
transferred to Manila[.] [B]ecause of the distance from his home . . . the
transfer was approved but instead of being transferred to Manila, he was
assigned to Purefoods B-F-4 in Batangas rendering 12 hours duty/day and
receiving only P148.00 per day until January 28, 1991[;] and again he
requested for transfer which was also approved by the [security agency's]
office[,] but since then he was told to come back again and again. [U]p to the
present he has not been given any assignment. Because of the fact that his
family [was] in danger of going hungry, he sought relief from the NLRC-NCR-
Arbitration Branch.
Rodolfo Velasco started working for the [security agency] on January 5, 1987.
He was assigned to PCI Bank Elcano, Tondo Branch, as probationary, and [for]
working 8 hours a day for 9 days he received only P400.00. On January 16,
1987, he was assigned to [the security agency's] headquarters up to January
31, 1987, working 12 hours a day[; he] received only P650.00 for the 16 days.
On September 1, 1988, he was assigned to Imperial Synthetic Rubber Products
rendering 12 hours duty per day until December 31, 1988 and was given a
salary of P1,600.00/month. He was later transferred to various posts like
Polypaper Products working 12 hours a day given a salary of P1,800.00 a
month; Paramount Electrical, Inc. working 12 hours a day given P1,100.00 for
15 days; Rosewood Processing, Inc., rendering 12 hours duty per day receiving
P2,200.00/month until May 16, 1991[;] Alen Engineering rendering 12 hours
duty/day receiving P1,100/month; Purefoods Corporation on Delta II rendering
12 hours duty per day received P4,200.00 a month. He was relieved on August
24 and his salary for the period August 20 to 23 has not been paid by [the
security agency.] He was suspended for no cause at all.
Armando Ballon started as security guard with [the security agency] July 1990
[Note: the introductory paragraph stated June 28, 1990] and was assigned to
Purefoods Corporation in Marikina for five (5) months and received a salary of
P50.00 per day for 8 hours. He was transferred to Rosewood Processing, Inc.
on November 6, 1990 rendering 12 hours duty as [d]etachment [c]ommander
and a salary of P2,700.00/month including P200.00 officer's allowance until
May 15, 1991. On May 16, 1991, he applied for sick leave on orders of his
doctor for 15 days but the HRM, Miss M. Andres[,] got angry and crumpled his
application for sick leave, that [was] why he was not able to forward it to the
SSS. After 15 days, he came back to the office of [the security agency] asking
for an assignment and he was told that he [was] already terminated.
Complainant found out that the reason why Miss Andres crumpled his
application for sick leave was because of the complaint he previously filed and
was dismissed for failure to appear. He then refiled this case to seek redress
from this Office.
Jose L. Cabrera started working for the [security agency] as security guard
January, 1988 and was assigned to Alencor Residence rendering 12 hours duty
per day and received a salary of P2,400.00 a month for 3 months[.] [I]n May,
1988, he was transferred to E & L Restaurant rendering 12 hours duty per day
and receiv[ing] a salary of P1,500.00 per month for 6 months[.] [I]n January,
1989, he was transferred to Paramount rendering 12 hours duty per day
receiving only P1,800.00 per month for 6 months[.] [I]n July 1989, he was
transferred to Benito Ong['s] residence rendering 12 hours duty per day and
receiving a salary of P1,400.00 per month for 4 months[.] [I]n December,
1989, he was transferred to Sea Trade International rendering . . . 12 hours
duty per day and receiving a salary of P1,900 per month for 6 months[.] [I]n
July, 1990, he was transferred to Holland Pacific & Paper Mills rendering 8
hours duty per day and receiving a salary of P2,400.00 per month until
September 1990[.] [In] October 1990, he was transferred to RMG residence
rendering 12 hours duty per day receiving a salary of P2,200.00 per month for
3 months[.] [In] February 1991, he was transferred to Purefoods Corporation
at Mabini, Batangas rendering 12 hours duty per day with a salary of
P3,600.00 per month for only one month because he was hospitalized due to a
stab wound inflicted by his [d]etachment [c]ommander. When he was
discharged from the hospital and after he was examined and declared "fit to
work" by the doctor, he reported back to [the security agency's] office but was
given the run-around [and was told to] "come back tomorrow[.]" [H]e [could]
see that [the agency was] posting new recruits. He then complained to this
Honorable Office to seek redress, hiring the services of a counsel.
Victor Aldeza started working for the [security agency] on March 21, 1990 and
was assigned to Meridian Condominium, rendering 12 hours work per day and
receiving a salary of P1,500.00 per month. Although he knew that the salary
was below minimum yet he persevered because he had spent much to get this
job and stayed on until October 15, 1990[.] On October 16, 1990, he was
transferred to Rosewood Processing, Inc., rendering 12 hours duty per day and
receiving a salary of P2,600.00 per month up to May 15, 1991[.] On the later
part of May 1991, he was assigned to UPSSA (Sandoval Shipyard) rendering
12 hours duty per day receiving a salary of P3,200.00 per month. [Aldeza]
complained to [the security agency] about the salary but [the agency] did not
heed him; thus, he filed his complaint for underpayment[.] [The agency] upon
complainant's complaint for underpayment . . . , instead of adjusting his salary
to meet the minimum prescribed by law[,] relieved him and left him floating[.]
. . . When he complained of the treatment, he was told to resign because he
could no longer be given any assignment. Because of this, complainant was
forced to file another complaint for illegal dismissal.
Labor Arbiter's Ruling
The labor arbiter noted the failure of the security agency to present evidence
to refute the complainants' allegation. Instead, it impleaded the petitioner as
third-party respondent, contending that its actions were primarily caused by
petitioner's noncompliance with its obligations under the contract for security
services, and the subsequent cancellation of the said contract.
The labor arbiter held petitioner jointly and severally liable with the security
agency as the complainants' indirect employer under Articles 106, 107 and 109
of the Labor Code, citing the case of Spartan Security & Detective Agency, Inc.
v. National Labor Relations Commission. 8
Although the security agency could lawfully place the complainants on floating
status for a period not exceeding six months, the act was "illegal" because the
former had issued a newspaper advertisement for new security guards. Since
the relation between the complainants and the agency was already strained,
the labor arbiter ordered the payment of separation pay in lieu of
reinstatement.
The award for wage differential, limited back wages and separation pay
contained the following details:
1. Napoleon Mamon
Wage Differentials P45,959.02
Backwages 72,764.38
Separation Pay 7,687.70 P126,411.10
_________
2. Arsenio Gazzingan
Wage Differentials P24,855.76
Backwages 96,096.25
Separation Pay 7,687.70 P128,639.71
__________
3. Rodolfo Velasco
Wage Differentials P66,393.58
Backwages 69,189.30
Separation Pay 11,531.55 P147,114.43
__________
4. Armando Ballon
Wage Differentials P31,176.85
Backwages 81,874.00
Separation Pay 3,843.85 P116,894.70
__________
5. Jose Cabrera
Wage Differentials P30,032.63
Backwages 91,483.63
Separation Pay 11,531.55 P133,047.81
__________
6. Victor Aldeza
Wage Differentials P49,406.86
Backwages 83,795.93
Separation Pay 3,843.85 P137,046.64
__________
P789, 154.39
==========
Ruling of Respondent Commission
As earlier stated, Respondent Commission dismissed petitioner's appeal,
because it was allegedly not perfected within the reglementary ten-day period.
Petitioner received a copy of the labor arbiter's Decision on April 2, 1993, and
it filed its Memorandum of Appeal on April 12, 1993. However, it submitted the
appeal bond on April 26, 1993, or twelve days after the expiration of the
period for appeal per Rule VI, Section 1, 3 and 6 of the 1990 Rules of
Procedure of the National Labor Relations Commission. Thus, it ruled that the
labor arbiter's Decision became final and executory on April 13, 1993.
In the assailed Order, Respondent Commission denied reconsideration,
because petitioner allegedly failed to raise any palpable or patent error
committed by said commission.
Assignment of Errors
Petitioner imputes the following errors to Respondent Commission:
Respondent NLRC committed grave abuse of discretion amounting to lack of
jurisdiction when it dismissed petitioner's appeal despite the fact that the same
was perfected within the reglementary period provided by law.
Respondent NLRC committed grave abuse of discretion amounting to lack of
jurisdiction when it dismissed petitioner's appeal despite the clearly meritorious
grounds relied upon therein.
Otherwise stated, the petition raises these two issues: first, whether the
appeal from the labor arbiter to the NLRC was perfected on time; and second,
whether petitioner is solidarily liable with the security agency for the payment
of back wages, wage differential and separation pay.
The Court's Ruling
The petition is impressed with some merit and deserves partial grant.
First Issue: Substantial Compliance with the
Appeal Bond Requirement
The perfection of an appeal within the reglementary period and in the manner
prescribed by law is jurisdictional, and noncompliance with such legal
requirement is fatal and effectively renders the judgment final and executory. 9
The Labor Code provides:
Art. 223. Appeal. - Decisions, awards or orders of the Labor Arbiter are final
and executory unless appealed to the Commission by any or both parties
within ten (10) calendar days from receipt of such decisions, awards, or
orders. . . .
xxx xxx xxx
In case of a judgment involving a monetary award, an appeal by the employer
may be perfected only upon the posting of a cash or surety bond issued by a
reputable bonding company duly accredited by the Commission in the amount
equivalent to the monetary award in the judgment appealed from.
xxx xxx xxx
Indisputable is the legal doctrine that the appeal of a decision involving a
monetary award in labor cases may be perfected "only upon the posting of a
 cash or surety bond." 10 The lawmakers intended the posting of the bond to be
an indispensable requirement to perfect an employer's appeal. 11
However, in a number of cases, this Court has relaxed this requirement in
order to bring about the immediate and appropriate resolution of controversies
on the merits. 12 Some of these cases include: "(a) counsel's reliance on the
footnote of the notice of the decision of the labor arbiter that the aggrieved
party may appeal . . . within ten (10) working days; (b) fundamental
consideration of substantial justice; (c) prevention of miscarriage of justice or
of unjust enrichment, as where the tardy appeal is from a decision granting
separation pay which was already granted in an earlier final decision; and (d)
special circumstances of the case combined with its legal merits or the amount
and the issue involved." 13
In Quiambao vs. National Labor Relations Commission, 14 this Court ruled that
a relaxation of the appeal bond requirement could be justified by substantial
compliance with the rule.
In Globe General Services and Security Agency vs. National Labor Relations
Commission, 15 the Court observed that the NLRC, in actual practice, allows the
reduction of the appeal bond upon motion of the appellant and on meritorious
grounds; hence, petitioners in that case should have filed a motion to reduce
the bond within the reglementary period for appeal.
That is the exact situation in the case at bar. Here, petitioner claims to have
received the labor arbiter's Decision on April 6, 1993. 16 On April 16, 1993, it
filed, together with its memorandum on appeal 17 and notice of appeal, a
motion to reduce the appeal bond 18 accompanied by a surety bond for fifty
thousand pesos issued by prudential Guarantee and Assurance, Inc. 19 Ignoring
petitioner's motion (to reduce bond), Respondent Commission rendered its
assailed Resolution dismissing the appeal due to the late filing of the appeal
bond.
The solicitor general argues for the affirmation of the assailed Resolution for
the sole reason that the appeal bond, even if it was filed on time, was
defective, as it was not in an amount "equivalent to the monetary award in the
judgment appealed from." The Court disagrees.
We hold that petitioner's motion to reduce the bond is a substantial compliance
with the Labor Code. This holding is consistent with the norm that letter-
perfect rules must yield to the broader interest of substantial justice. 20
Where a decision may be made to rest on informed judgment rather than rigid
rules, the equities of the case must be accorded their due weight because labor
determinations should not only be "secundum rationem but also secundum
caritatem." 21 A judicious reading of the memorandum of appeal would have
made it evident to Respondent Commission that the recourse was meritorious.
Respondent Commission acted with grave abuse of discretion in peremptorily
dismissing the appeal without passing upon - in fact, ignoring - the motion to
reduce the appeal bond.
We repeat: Considering the clear merits which appear, res ipsa loquitur, in the
appeal from the labor arbiter's Decision, and the petitioner's substantial
compliance with rules governing appeals, we hold that the NLRC gravely
abused its discretion in dismissing said appeal and in failing to pass upon the
grounds alleged in the Motion for Reconsideration.
Second Issue: Liability of an Indirect Employer
 The overriding premise in the labor arbiter's Decision holding the security
agency and the petitioner liable was that said parties offered no evidence
refuting or rebutting the complainants' computation of their monetary claims.
The arbiter ruled that petitioner was liable in solidum with the agency for
salary differentials based on Articles 106, 107 and 109 of the Labor Code which
hold an employer jointly and severally liable with its contractor or
subcontractor, as if it is the direct employer. We quote said provisions below:
Art. 106. Contractor or subcontractor. - Whenever an employer enters into a
contract with another person for the performance of the former's work, the
employees of the contractor and of the latter's subcontractor, if any, shall be
paid in accordance with the provisions of this Code.
In the event that the contractor or subcontractor fails to pay the wages of his
employees in accordance with this Code, the employer shall be jointly and
severally liable with his contractor or subcontractor to such employees to the
extent of the work performed under the contract, in the same manner and
extent that he is liable to employees directly employed by him.
xxx xxx xxx
Art. 107. Indirect employer. - The provisions of the immediately preceding
Article shall likewise apply to any person, partnership, association or
corporation which, not being an employer, contracts with an independent
contractor for the performance of any work, task, job or project.
Art. 109. Solidary liability. - The provisions of existing laws to the contrary
notwithstanding, every employer or indirect employer shall be held responsible
with his contractor or subcontractor for any violation of any provision of this
Code. For purposes of determining the extent of their civil liability under this
Chapter, they shall be considered as direct employers.
Upon the other hand, back wages and separation pay were awarded because
the complainants were constructively and illegally dismissed by the security
agency, which placed them on floating status and at the same time gave
assignments to newly hired security guards. Noting that the relationship
between the security agency and the complainants was already strained, the
labor arbiter granted separation pay in lieu of reinstatement.
In its memorandum of appeal, petitioner controverts its liability for the
mentioned monetary awards on the following grounds: 22
A. Complainant Jose Cabrera never rendered security services to [petitioner] or
was [n]ever assigned as security guard [for] the latter's business
establishment;
B. Complainants Napoleon Mamon, Arsenio Gazzingan, Rodolfo Velasco,
Armando Ballon and Victor Aldeza rendered security services to [petitioner] for
a fixed period and were thereafter assigned to other entities or establishments
or were floated or recalled to the headquarters of Veterans; and,
C. The relationship between [petitioner] and Veterans was governed by a
Contract for Guard Services under which [petitioner] dutifully paid a contract
price of P3,500.00 a month for 12 hour duty per guard and later increased to
P4,250.00 a month for 12 hour duty per guard which are within the prevailing
rates in the industry and in accordance with labor standard laws.
The first two grounds are meritorious. Legally untenable, however, is the
contention that petitioner is not liable for any wage differential for the reason
that it paid the employees in accordance with the contract for security services
which it had entered into with the security agency. Notwithstanding the service
contract between the petitioner and the security agency, the former is still
solidarily liable to the employees, who were not privy to said contract,
pursuant to the aforecited provisions of the Code. Labor standard legislations
are enacted to alleviate the plight of workers whose wages barely meet the
spiraling costs of their basic needs. They are considered written in every
contract, and stipulations in violation thereof are considered not written.
Similarly, legislated wage increases are deemed amendments to the contract.
Thus, employers cannot hide behind their contracts in order to evade their or
their contractors' or subcontractors' liability for noncompliance with the
statutory minimum wage.
The joint and several liability of the employer or principal was enacted to
ensure compliance with the provisions of the Code, principally those on
statutory minimum wage. The contractor or subcontractor is made liable by
virtue of his or her status as a direct employer, and the principal as the indirect
employer of the contractor's employees. This liability facilitates, if not
guarantees, payment of the workers' compensation, thus, giving the workers
ample protection as mandated by the 1987 Constitution. 23 This is not unduly
burdensome to the employer. Should the indirect employer be constrained to
pay the workers, it can recover whatever amount it had paid in accordance
with the terms of the service contract between itself and the contractor. 24
Withal, fairness likewise dictates that the petitioner should not, however, be
held liable for wage differentials incurred while the complainants were assigned
to other companies. Under these cited provisions of the Labor Code, should the
contractor fail to pay the wages of its employees in accordance with law, the
indirect employer (the petitioner in this case), is jointly and severally liable
with the contractor, but such responsibility should be understood to be limited
to the extent of the work performed under the contract, in the same manner
and extent that he is liable to the employees directly employed by him. This
liability of petitioner covers the payment of the workers' performance of any
work, task, job or project. So long as the work, task, job or project has been
performed for petitioner's benefit or on its behalf, the liability accrues for such
period even if, later on, the employees are eventually transferred or
reassigned elsewhere.
We repeat: The indirect employer's liability to the contractor's employees
extends only to the period during which they were working for the petitioner,
and the fact that they were reassigned to another principal necessarily ends
such responsibility. The principal is made liable to his indirect employees,
because it can protect itself from irresponsible contractors by withholding such
sums and paying them directly to the employees or by requiring a bond from
the contractor or subcontractor for this purpose.
Similarly, the solidary liability for payment of back wages and separation pay is
limited, under Article 106, "to the extent of the work performed under the
contract"; under Article 107, to "the performance of any work, task, job or
project"; and under Article 109, to "the extent of their civil liability under this
Chapter [on payment of wages]."
These provisions cannot apply to petitioner, considering that the complainants
were no longer working for or assigned to it when they were illegally
dismissed. Furthermore, an order to pay back wages and separation pay is
 invested with a punitive character, such that an indirect employer should not
be made liable without a finding that it had committed or conspired in the
illegal dismissal.
The liability arising from an illegal dismissal is unlike an order to pay the
statutory minimum wage, because the workers' right to such wage is derived
from law. The proposition that payment of back wages and separation pay
should be covered by Article 109, which holds an indirect employer solidarily
responsible with his contractor or subcontractor for "any violation of any
provision of this Code," would have been tenable if there were proof - there
was none in this case - that the principal/employer had conspired with the
contractor in the acts giving rise to the illegal dismissal.
With the foregoing discussion in mind, we now take up in detail the petitioner's
liability to each of the complainants.
Case No. NCR-00-08-04630-91
Mamon worked for petitioner for a period of a little more than one year beginning
February 3, 1990 until May 16, 1991. Inasmuch as petitioner was his indirect
employer during such rime, it should thus be severally liable for wage differential
from the time of his employment until his relief from duty. He was relieved upon
the request of petitioner, after it had learned of the complaint for underpayment
of wages filed by Mamon and several other security guards.
However, this was not a dismissal from work because Mamon was still working
for the security agency and was immediately assigned, on May 29, 1991, to its
other client, Mead Johnson Philippines. His dismissal came about later, when he
refused to sign a quitclaim and waiver in favor of the security agency. Thus, he
was illegally dismissed by the agency when he was no longer employed by
petitioner, which cannot thus be held liable for back wages and separation pay
in his case.
Napoleon Mamon . . . received an order transferring him to Rosewood
Processing, Inc. effective . . . February 3, 1990; . . . . On May 16, 1991,
Rosewood Processing, Inc. asked for the relief of Mamon and other guards at
Rosewood because they came to know that complainants filed a complaint for
underpayment on May 13, 1991 with the National Labor Relations Commission[,]
. . . After that, complainant was floated until May 29, 1991 when he was assigned
to Mead Johnson Philippines Corporation. . . . [A] week later, [the security
agency] received summons on complainant's complaint for underpayment and
he was called to [the security agency] office. When he reported, he was told to
sign a "Quitclaim and Waiver['] by Lt. R. Rodriguez . . . and . . . if he [did] not
sign the quitclaim and waiver, he [would] be relieved from his post and [would]
no longer be given any assignment. . . . At the end of July 1991, he was
approached by the Security in Charge, A. Azuela, . . . [for him] to sign the
quitclaim and waiver[,] and when he refused to sign, he was told that . . . he
ha[d] no more assignment and should report to their office. . . . [H]e reported
the following day to the detachment commander, Mr. A. Yadao and he was told
that the main office ha[d] relieved him . . . . He reported to their office asking
for an assignment but he was told by R. Rodriguez that "I no longer can be given
an assignment so I had better resign." He went back several times to the office
of the [security agency] but every time the answer was the same . . . although
respondent was recruiting new guards and posting them. 25
Case No. NCR-00-07-03966-91
Gazzingan was assigned to petitioner as a security guard for a period of one
year. For said period, petitioner is solidarily liable with the agency for
underpayment of wages based on Articles 106, 107 and 109 of the Code.
Arsenio Gazzingan . . . after eleven (11) days on June 1989, . . . was transferred
to Rosewood Processing, Inc. . . . . [I]n June 1990, he was assigned at Purefoods
DELPAN . . . . After 11 days, he asked to be transferred to Manila because of the
distance from his home and the transfer was approved but instead of being
transferred to Manila, he was assigned to Purefoods B-F-4 in Batangas . . . again
he requested for transfer which was also approved by the [security agency]
office but since then he was told to come back again and again and up to the
present he has not been given any assignment. . . . . 26
His dismissal cannot be blamed on the petitioner. Like Mamon, Gazzingan had
already been assigned to another client of the agency when he was illegally
dismissed. Thus, Rosewood cannot be held liable, jointly and severally with the
agency, for back wages and separation pay.
Case No. NCR-00-07-03967-91
Rodolfo Velasco was assigned to petitioner from December 31, 1988 until May
16, 1991. Thus, petitioner is solidarily liable for wage differentials during such
period. Petitioner is not, however, liable for back wages and separation pay,
because Velasco was no longer working for petitioner at the time of his illegal
dismissal.
Rodolfo Velasco started working for the [security agency] on January 5, 1987. .
. . [On] December 31, 1988 . . . he was . . . transferred to various posts like . .
. Rosewood Processing, Inc., . . . until May 16, 1991 . . . . He was relieved on
August 24 and his salary for the period August 20 to 23 has not been paid by
[the security agency]; [h]e was suspended for no cause at all. 27
Case No. NCR-00-07-0445-91
Petitioner was the indirect employer of Ballon during the period beginning
November 6, 1990 until May 15, 1991; thus, it is liable for wage differentials for
said period. However, it is not liable for back wages and separation pay, as there
was no evidence presented to show that it participated in Ballon's illegal
dismissal.
. . . [H]e [Armando Ballon] was transferred to Rosewood Processing, Inc. on
November 6, 1990 rendering 12 hours duty as [d]etachment [c]ommander and
received a salary of P2,700.00/month including P200.00 officer's allowance until
May 15, 1991. On May 16, 1991, he applied for sick leave on orders of his doctor
for 15 days but the HRM, Miss M. Andres[,] got angry and crumpled his
application for sick leave that is why he was not able to forward it to the SSS.
After 15 days, he came back to the office of [the security agency] asking for an
assignment and he was told that he [was] already terminated. Complainant
found out that the reason why Miss Andres crumpled his application for sick
leave was because of the complaint he previously filed and was dismissed for
failure to appear. He then refiled this case to seek redress from this Office. 28
Case No. NCR-00-08-05030-91
Petitioner is liable for wage differentials in favor of Aldeza during the period he
worked with petitioner, that is, October 16, 1990 until May 15, 1991.
. . . On October 16, 1990, he [Aldeza] was transferred to Rosewood Processing,
Inc., . . . up to May 15, 1991[.] On the later part of May 1991, he was assigned
to UPSSA (Sandoval Shipyard) . . . . Complainant [sic] complained to [the
security agency] about the salary but [the security agency] did not heed him;
thus, he filed his complaint for underpayment[.] [The security agency] upon
complainant's complaint for underpayment reacted . . . , instead of adjusting his
salary to meet the minimum prescribed by law[,] relieved him and left him
floating[;] and when he complained of the treatment, he was told to resign
because he could no longer be given any assignment. Because of this,
complainant was forced to file another complaint for illegal dismissal. 29
The cause of Aldeza's illegal dismissal is imputable, not to petitioner, but solely
to the security agency. In Aldeza's case, the solidary liability for back wages and
separation pay arising from Articles 106, 107 and 109 of the Code has no
application.
Case No. NCR-00-09-05617-91
Cabrera was an employee of the security agency, but he never rendered security
services to petitioner. This fact is evident in the labor arbiter's findings:
Jose L. Cabrera started working for the [security agency] as [a] security guard
on January, 1988 and was assigned to Alencor Residence . . . . [I]n May, 1988,
he was transferred to E & L, Restaurant . . . [.] [I]n January, 1989, he was
transferred to Paramount . . . [.] [I]n July 1989, he was transferred to Benito
Ong['s] residence . . . [.] [I]n December, 1989, he was transferred to Sea Trade
International . . . [.] [I]n July, 1990, he was transferred to Holland Pacific &
Paper Mills . . . [.] [I]n October 1990, he was transferred to RMG [R]esidence .
. . [.] [I]n February 1991, he was transferred to Purefoods Corporation at Mabini,
Batangas . . . . When he was discharged from the hospital and after he was
examined and declared "fit to work" by the doctor, he reported back to [the
security agency] office but was given the run-around [and was told to] "come
back tomorrow[,]" although he [could] see that [it was] posting new recruits.
He then complained to this Honorable Office to seek redress, hiring the services
of a counsel. 30
Hence, petitioner is not liable to Cabrera for anything.
In all these cases, however, the liability of the security agency is without
question, as it did not appeal from the Decisions of the labor arbiter and
Respondent Commission.
WHEREFORE, the petition is partially GRANTED. The assailed Decision is hereby
MODIFIED, such that petitioner, with the Security agency, is solidarily liable to
PAY the complainants only wage differentials during the period that the
complainants were actually under its employ, as above detailed. Petitioner is
EXONERATED from the payment of back wages and separation pay.
The temporary restraining order issued earlier is LIFTED, but the petitioner is
deemed liable only for the aforementioned wage differentials, which Respondent
Commission is required to RECOMPUTE within fifteen days from the finality of
this Decision. No costs.
SO ORDERED.
Davide, Jr., Bellosillo, Vitug and Quisumbing, JJ., concur.

[G.R. NO. 152494 : September 22, 2004]

MARIANO ONG, doing business under the name and
style MILESTONE METAL MANUFACTURING, Petitioner,
v. THE COURT OF APPEALS, CONRADO DABAC,
 BERNABE TAYACTAC, MANUEL ABEJUELLA, LOLITO
ABELONG, RONNIE HERRERO, APOLLO PAMIAS,
JAIME ONGUTAN, NOEL ATENDIDO, CARLOS TABBAL,
JOEL ATENDIDO, BIENVENIDO EBBER, RENATO
ABEJUELLA, LEONILO ATENDIDO, JR., LODULADO
FAA and JAIME LOZADA, Respondents.
DECISION
YNARES-SANTIAGO, J.:
This is a Petition for Review on Certiorari assailing the
decision1 of the Court of Appeals in CA-G.R. SP No. 62129,
dated October 10, 2001, which dismissed the petition for
certiorari for lack of merit, as well as the resolution,2 dated
March 7, 2002, denying the motion for reconsideration.
Petitioner is the sole proprietor of Milestone Metal
Manufacturing (Milestone), which manufactures, among
others, wearing apparels, belts, and umbrellas.3 Sometime
in May 1998, the business suffered very low sales and
productivity because of the economic crisis in the country.
Hence, it adopted a rotation scheme by reducing the
workdays of its employees to three days a week or less for
an indefinite period.4
On separate dates, the 15 respondents filed before the
National Labor Relations Commission (NLRC) complaints
for illegal dismissal, underpayment of wages, non-payment
of overtime pay, holiday pay, service incentive leave pay,
13th month pay, damages, and attorney's fees against
petitioner. These were consolidated and assigned to Labor
Arbiter Manuel Manasala.
Petitioner claimed that 9 of the 15 respondents were not
employees of Milestone but of Protone Industrial
Corporation which, however, stopped its operation due to
business losses. Further, he claims that respondents
Manuel Abuela, Lolita Abelong, Ronnie Herrero, Carlos
Tabbal, Conrado Dabac, and Lodualdo Faa were not
dismissed from employment; rather, they refused to work
after the rotation scheme was adopted. Anent their
monetary claims, petitioner presented documents showing
that he paid respondents' minimum wage, 13th month pay,
holiday pay, and contributions to the SSS, Medicare, and
Pag-Ibig Funds.5
On November 25, 1999, the Labor Arbiter rendered a
decision awarding to the respondents the aggregate
amount of P1,111,200.40 representing their wage
differential, holiday pay, service incentive leave pay and
13th month pay, plus 10% thereof as attorney's fees.
Further, petitioner was ordered to pay the respondents
separation pay equivalent to - month salary for every year
of service due to the indefiniteness of the rotation scheme
and strained relations caused by the filing of the
complaints.6
Petitioner filed with the NLRC a notice of appeal with a
memorandum of appeal and paid the docket fees therefor.
However, instead of posting the required cash or surety
bond, he filed a motion to reduce the appeal bond. The
NLRC, in a resolution dated April 28, 2000, denied the
motion to reduce bond and dismissed the appeal for failure
to post cash or surety bond within the reglementary
period.7 Petitioner's motion for reconsideration was likewise
denied.8
Petitioner filed a petition for certiorari with the Court of
Appeals alleging that the NLRC acted with grave abuse of
discretion in dismissing the appeal for non-perfection of
appeal although a motion to reduce appeal bond was
seasonably filed. However, the petition was dismissed and
thereafter the motion for reconsideration was likewise
dismissed for lack of merit.9
Hence, this Petition for Review on the following assignment
of errors:
I.
PUBLIC RESPONDENT COURT OF APPEALS COMMITTED
SERIOUS ERROR AND GRAVE ABUSE OF DISCRETION IN
AFFIRMING THE DECISION OF THE NLRC DISMISSING THE
APPEAL OF PETITIONERS (sic) FOR NON-PERFECTION
WHEN A MOTION TO REDUCE APPEAL BOND WAS
 SEASONABLY FILED WHICH IS ALLOWED BY THE RULES
OF PROCEDURE OF THE NLRC.
II.
PUBLIC RESPONDENT COURT OF APPEALS COMMITTED
SERIOUS ERROR AND GRAVE ABUSE OF DISCRETION IN
AFFIRMING THE DISMISSAL BY NLRC OF PETITIONER'S
APPEAL AND IN EFFECT UPHOLDING THE ERRONEOUS
DECISION OF THE LABOR ARBITER AWARDING
SEPARATION PAY TO PRIVATE RESPONDENTS DESPITE
THE FINDING THAT THERE WAS NO ILLEGAL DISMISSAL
MADE BY MILESTONE.
III.
PUBLIC RESPONDENT COURT OF APPEALS COMMITTED
SERIOUS ERROR IN AFFIRMING THE NLRC'S DISMISSAL
OF PETITIONER'S APPEAL AND IN EFFECT UPHOLDING THE
ERRONEOUS DECISION OF THE LABOR ARBITER THAT
PETITIONER MILESTONE HAS VIOLATED THE MINIMUM
WAGE LAW AND THAT PRIVATE RESPONDENTS WERE
UNDERPAID.
IV.
PUBLIC RESPONDENT COURT OF APPEALS COMMITTED
SERIOUS ERROR IN AFFIRMING THE NLRC'S DISMISSAL
OF PETITIONER'S APPEAL AND IN EFFECT UPHOLDING THE
ERRONEOUS DECISION OF THE LABOR ARBITER THAT
PETITIONER MILESTONE HAS NOT PAID PRIVATE
RESPONDENTS THEIR SERVICE INCENTIVE LEAVE PAY,
13th MONTH PAY, AND HOLIDAY PAY.
V.
PUBLIC RESPONDENT COURT OF APPEALS COMMITTED
SERIOUS ERROR IN AFFIRMING THE NLRC'S DISMISSAL
OF PETITIONER'S APPEAL AND IN EFFECT UPHOLDING THE
ERRONEOUS DECISION OF THE LABOR ARBITER THAT THE
EVIDENCE SUBMITTED BY PRIVATE RESPONDENTS IN
SUPPORT OF THEIR CLAIMS ARE NOT SELF-SERVING,
IRRELEVANT AND IMMATERIAL TO THE FACTS AND LAW IN
ISSUE IN THIS CASE.10
The petition lacks merit.
 Time and again it has been held that the right to appeal is
not a natural right or a part of due process, it is merely a
statutory privilege, and may be exercised only in the
manner and in accordance with the provisions of law. The
party who seeks to avail of the same must comply with the
requirements of the rules. Failing to do so, the right to
appeal is lost.11
Article 223 of the Labor Code, as amended, sets forth the
rules on appeal from the Labor Arbiter's monetary award:
ART. 223. Appeal. - Decisions, awards, or orders of the
Labor Arbiter are final and executory unless appealed to
the Commission by any or both parties within ten (10)
calendar days from receipt of such decisions, awards, or
orders. x x x.
x x x
In case of a judgment involving a monetary award, an
appeal by the employer may be perfected only upon the
posting of a cash or surety bond issued by a reputable
bonding company duly accredited by the Commission in
the amount equivalent to the monetary award in the
judgment appealed from. (Emphasis ours)
The pertinent provisions of Rule VI of the New Rules of
Procedure of the NLRC,12 which were in effect when
petitioner filed his appeal, provide:
Section 1. Periods of Appeal. - Decisions, awards or orders
of the Labor Arbiter and the POEA Administrator shall be
final and executory unless appealed to the Commission by
any or both parties within ten (10) calendar days from
receipt of such decisions, awards or orders of the Labor
Arbiter x x x.
x x x
Section 3. Requisites for Perfection of Appeal. - (a) The
appeal shall be filed within the reglementary period as
provided in Section 1 of this Rule; shall be under oath with
proof of payment of the required appeal fee and the
posting of a cash or surety bond as provided in Section 5 of
this Rule; shall be accompanied by a memorandum of
 appeal which shall state the grounds relied upon and the
arguments in support thereof; the relief prayed for; and a
statement of the date when the appellant received the
appealed decision, order or award and proof of service on
the other party of such appeal.
A mere notice of appeal without complying with the other
requisite aforestated shall not stop the running of the
period for perfecting an appeal.
x x x
Section 6. Bond. - In case the decision of the Labor Arbiter,
the Regional Director or his duly authorized Hearing Officer
involves a monetary award, an appeal by the employer
shall be perfected only upon the posting of a cash or
surety bond, which shall be in effect until final disposition
of the case, issued by a reputable bonding company duly
accredited by the Commission or the Supreme Court in an
amount equivalent to the monetary award, exclusive of
damages and attorney's fees.
The employer, his counsel, as well as the bonding
company, shall submit a joint declaration under oath
attesting that the surety bond posted is genuine.
The Commission may, in justifiable cases and upon Motion
of the Appellant, reduce the amount of the bond. The filing
of the motion to reduce bond shall not stop the running of
the period to perfect appeal. (Emphasis ours)
In the case at bar, petitioner received the decision of the
Labor Arbiter on January 6, 2000. He filed his notice of
appeal with memorandum of appeal and paid the
corresponding appeal fees on January 17, 2000, the last
day of filing the appeal. However, in lieu of the required
cash or surety bond, he filed a motion to reduce bond
alleging that the amount of P1,427,802,04 as bond is
"unjustified and prohibitive" and prayed that the same be
reduced to a "reasonable level." The NLRC denied the
motion and consequently dismissed the appeal for non-
perfection. Petitioner now contends that he was deprived of
 the chance to post bond because the NLRC took 102 days
to decide his motion.
Petitioner's argument is unavailing.
While, Section 6, Rule VI of the NLRC's New Rules of
Procedure allows the Commission to reduce the amount of
the bond, the exercise of the authority is not a matter of
right on the part of the movant but lies within the sound
discretion of the NLRC upon showing of meritorious
grounds.13 Petitioner's motion reads:
1. The appeal bond which respondents-appellants will post
in this case is P1,427,802.04. They are precisely
questioning this amount as being unjustified and
prohibitive under the premises.
2. The amount of this appeal bond must be reduced to a
reasonable level by this Honorable Office.
WHEREFORE, in view thereof, it is respectfully prayed of
this Honorable Office that the appeal bond of
P1,427,802.04 be reduced.14
After careful scrutiny of the motion to reduce appeal bond,
we agree with the Court of Appeals that the NLRC did not
act with grave abuse of discretion when it denied
petitioner's motion for the same failed to either elucidate
why the amount of the bond was "unjustified and
prohibitive" or to indicate what would be a "reasonable
level."15
In Calabash Garments, Inc. v. NLRC,16 it was held that "a
substantial monetary award, even if it runs into millions,
does not necessarily give the employer-appellant a
"meritorious case" and does not automatically warrant a
reduction of the appeal bond."
Even granting arguendo that petitioner has meritorious
grounds to reduce the appeal bond, the result would have
been the same since he failed to post cash or surety bond
within the prescribed period.
The above-cited provisions explicitly provide that an appeal
from the Labor Arbiter to the NLRC must be perfected
within ten calendar days from receipt of such decisions,
 awards or orders of the Labor Arbiter. In a judgment
involving a monetary award, the appeal shall be perfected
only upon (1) proof of payment of the required appeal fee;
(2) posting of a cash or surety bond issued by a reputable
bonding company; and (3) filing of a memorandum of
appeal. A mere notice of appeal without complying with the
other requisites mentioned shall not stop the running of
the period for perfection of appeal.17 The posting of cash or
surety bond is not only mandatory but jurisdictional as
well, and non-compliance therewith is fatal and has the
effect of rendering the judgment final and executory.18 This
requirement is intended to discourage employers from
using the appeal to delay, or even evade, their obligation
to satisfy their employee's just and lawful claims.19
The intention of the lawmakers to make the bond an
indispensable requisite for the perfection of an appeal by
the employer is underscored by the provision that an
appeal by the employer may be perfected only upon the
posting of a cash or surety bond. The word "only" makes it
perfectly clear that the lawmakers intended the posting of
a cash or surety bond by the employer to be the exclusive
means by which an employer's appeal may be perfected.20
The fact that the NLRC took 102 days to resolve the motion
will not help petitioner's case. The NLRC Rules clearly
provide that "the filing of the motion to reduce bond shall
not stop the running of the period to perfect appeal."
Petitioner should have seasonably filed the appeal bond
within the ten-day reglementary period following the
receipt of the order, resolution or decision of the NLRC to
forestall the finality of such order, resolution or decision. In
the alternative, he should have paid only a moderate and
reasonable sum for the premium, as was held in
Biogenerics Marketing and Research Corporation v. NLRC,21
to wit:
x x x The mandatory filing of a bond for the perfection of
an appeal is evident from the aforequoted provision that
the appeal may be perfected only upon the posting of cash
 or surety bond. It is not an excuse that the over P2 million
award is too much for a small business enterprise, like the
petitioner company, to shoulder. The law does not
require its outright payment, but only the posting of
a bond to ensure that the award will be eventually
paid should the appeal fail. What petitioners have to
pay is a moderate and reasonable sum for the
premium for such bond. (Emphasis ours)
While the bond requirement on appeals involving monetary
awards has been relaxed in certain cases, this can only be
done where there was substantial compliance of the Rules
or where the appellants, at the very least, exhibited
willingness to pay by posting a partial bond.22 Petitioner's
reliance on the case of Rosewood Processing, Inc. v.
NLRC23 is misplaced. Petitioner in the said case
substantially complied with the rules by posting a partial
surety bond of fifty thousand pesos issued by Prudential
Guarantee and Assurance, Inc. while his motion to reduce
appeal bond was pending before the NLRC.
In the case at bar, petitioner did not post a full or partial
appeal bond within the prescribed period, thus, no appeal
was perfected from the decision of the Labor Arbiter. For
this reason, the decision sought to be appealed to the
NLRC had become final and executory and therefore
immutable. Clearly, then, the NLRC has no authority to
entertain the appeal, much less to reverse the decision of
the Labor Arbiter. Any amendment or alteration made
which substantially affects the final and executory
judgment is null and void for lack of jurisdiction, including
the entire proceeding held for that purpose.24
WHEREFORE, in view of the foregoing, the petition is
DENIED. The assailed decision of the Court of Appeals in
CA-G.R. SP No. 62129, dated October 10, 2001, dismissing
the petition for certiorari for lack of merit, is AFFIRMED.
No pronouncement as to costs.
SO ORDERED.
EN BANC
G.R. Nos. 178034 & 178117 G R. Nos. 186984-85 October 17,
2013
ANDREW JAMES MCBURNIE, Petitioner,
vs.
EULALIO GANZON, EGI-MANAGERS, INC. and E. GANZON, INC.,
Respondents.
RESOLUTION
REYES, J.:
For resolution are the –
(1) third motion for reconsideration1 filed by Eulalio Ganzon (Ganzon), EGI-
Managers, Inc. (EGI) and E. Ganzon, Inc. (respondents) on March 27, 2012,
seeking a reconsideration of the Court’s Decision2 dated September 18, 2009
that ordered the dismissal of their appeal to the National Labor Relations
Commission (NLRC) for failure to post additional appeal bond in the amount
of ₱54,083,910.00; and
(2) motion for reconsideration3 filed by petitioner Andrew James McBurnie
(McBurnie) on September 26, 2012, assailing the Court en banc’s Resolution4
dated September 4, 2012 that (1) accepted the case from the Court’s Third
Division and (2) enjoined the implementation of the Labor Arbiter’s (LA)
decision finding him to be illegally dismissed by the respondents.
Antecedent Facts
The Decision dated September 18, 2009 provides the following antecedent
facts and proceedings –
On October 4, 2002, McBurnie, an Australian national, instituted a complaint
for illegal dismissal and other monetary claims against the respondents.
McBurnie claimed that on May 11, 1999, he signed a five-year employment
agreement5 with the company EGI as an Executive Vice-President who shall
oversee the management of the company’s hotels and resorts within the
Philippines. He performed work for the company until sometime in November
1999, when he figured in an accident that compelled him to go back to
Australia while recuperating from his injuries. While in Australia, he was
informed by respondent Ganzon that his services were no longer needed
because their intended project would no longer push through.
The respondents opposed the complaint, contending that their agreement
with McBurnie was to jointly invest in and establish a company for the
management of hotels. They did not intend to create an employer-employee
relationship, and the execution of the employment contract that was being
invoked by McBurnie was solely for the purpose of allowing McBurnie to
obtain an alien work permit in the Philippines. At the time McBurnie left for
Australia for his medical treatment, he had not yet obtained a work permit.
In a Decision6 dated September 30, 2004, the LA declared McBurnie as
having been illegally dismissed from employment, and thus entitled to receive
from the respondents the following amounts: (a) US$985,162.00 as salary
and benefits for the unexpired term of their employment contract, (b)
₱2,000,000.00 as moral and exemplary damages, and (c) attorney’s fees
equivalent to 10% of the total monetary award.
Feeling aggrieved, the respondents appealed the LA’s Decision to the
NLRC.7 On November 5, 2004, they filed their Memorandum of Appeal8 and
Motion to Reduce Bond9, and posted an appeal bond in the amount of
₱100,000.00. The respondents contended in their Motion to Reduce Bond,
inter alia, that the monetary awards of the LA were null and excessive,
allegedly with the intention of rendering them incapable of posting the
necessary appeal bond. They claimed that an award of "more than ₱60
Million Pesos to a single foreigner who had no work permit and who left the
country for good one month after the purported commencement of his
employment" was a patent nullity.10 Furthermore, they claimed that because
of their business losses that may be attributed to an economic crisis, they
lacked the capacity to pay the bond of almost ₱60 Million, or even the millions
of pesos in premium required for such bond.
On March 31, 2005, the NLRC denied11 the motion to reduce bond, explaining
that "in cases involving monetary award, an employer seeking to appeal the
[LA’s] decision to the Commission is unconditionally required by Art. 223,
Labor Code to post bond in the amount equivalent to the monetary award x x
x."12 Thus, the NLRC required from the respondents the posting of an
additional bond in the amount of ₱54,083,910.00.
When their motion for reconsideration was denied,13 the respondents decided
to elevate the matter to the Court of Appeals (CA) via the Petition for
Certiorari and Prohibition (With Extremely Urgent Prayer for the Issuance of a
Preliminary Injunction and/or Temporary Restraining Order)14 docketed as
CA-G.R. SP No. 90845.
In the meantime, in view of the respondents’ failure to post the required
additional bond, the NLRC dismissed their appeal in a Resolution15 dated
March 8, 2006. The respondents’ motion for reconsideration was denied on
June 30, 2006.16 This prompted the respondents to file with the CA the
Petition for Certiorari (With Urgent Prayers for the Immediate Issuance of a
Temporary Restraining Order and a Writ of Preliminary Injunction)17 docketed
as CA-G.R. SP No. 95916, which was later consolidated with CA-G.R. SP
No. 90845.
CA-G.R. SP Nos. 90845 and 95916
On February 16, 2007, the CA issued a Resolution18 granting the
respondents’ application for a writ of preliminary injunction. It directed the
NLRC, McBurnie, and all persons acting for and under their authority to
refrain from causing the execution and enforcement of the LA’s decision in
favor of McBurnie, conditioned upon the respondents’ posting of a bond in the
amount of ₱10,000,000.00. McBurnie sought reconsideration of the issuance
of the writ of preliminary injunction, but this was denied by the CA in its
Resolution19 dated May 29, 2007.
McBurnie then filed with the Court a Petition for Review on Certiorari20
docketed as G.R. Nos. 178034 and 178117, assailing the CA Resolutions
that granted the respondents’ application for the injunctive writ. On July 4,
2007, the Court denied the petition on the ground of McBurnie’s failure to
comply with the 2004 Rules on Notarial Practice and to sufficiently show that
the CA committed any reversible error.21 A motion for reconsideration was
denied with finality in a Resolution22 dated October 8, 2007.
Unyielding, McBurnie filed a Motion for Leave (1) To File Supplemental
Motion for Reconsideration and (2) To Admit the Attached Supplemental
Motion for Reconsideration,23 which was treated by the Court as a second
motion for reconsideration, a prohibited pleading under Section 2, Rule 56 of
the Rules of Court. Thus, the motion for leave was denied by the Court in a
Resolution24 dated November 26, 2007. The Court’s Resolution dated July 4,
2007 then became final and executory on November 13, 2007; accordingly,
entry of judgment was made in G.R. Nos. 178034 and 178117.25
In the meantime, the CA ruled on the merits of CA-G.R. SP No. 90845 and
CA-G.R. SP No. 95916 and rendered its Decision26 dated October 27, 2008,
allowing the respondents’ motion to reduce appeal bond and directing the
NLRC to give due course to their appeal. The dispositive portion of the CA
Decision reads:
WHEREFORE, in view of the foregoing, the petition for certiorari and
prohibition docketed as CA GR SP No. 90845 and the petition for certiorari
docketed as CA GR SP No. 95916 are GRANTED. Petitioners’ Motion to
Reduce Appeal Bond is GRANTED. Petitioners are hereby DIRECTED to
post appeal bond in the amount of ₱10,000,000.00. The NLRC is hereby
DIRECTED to give due course to petitioners’ appeal in CA GR SP No. 95916
which is ordered remanded to the NLRC for further proceedings.
SO ORDERED.27
On the issue28 of the NLRC’s denial of the respondents’ motion to reduce
appeal bond, the CA ruled that the NLRC committed grave abuse of
discretion in immediately denying the motion without fixing an appeal bond in
an amount that was reasonable, as it denied the respondents of their right to
appeal from the decision of the LA.29 The CA explained that "(w)hile Art. 223
of the Labor Code requiring bond equivalent to the monetary award is explicit,
Section 6, Rule VI of the NLRC Rules of Procedure, as amended, recognized
as exception a motion to reduce bond upon meritorious grounds and upon
posting of a bond in a reasonable amount in relation to the monetary
award."30
On the issue31 of the NLRC’s dismissal of the appeal on the ground of the
respondents’ failure to post the additional appeal bond, the CA also found
grave abuse of discretion on the part of the NLRC, explaining that an appeal
bond in the amount of ₱54,083,910.00 was prohibitive and excessive.
Moreover, the appellate court cited the pendency of the petition for certiorari
over the denial of the motion to reduce bond, which should have prevented
the NLRC from immediately dismissing the respondents’ appeal.32
Undeterred, McBurnie filed a motion for reconsideration. At the same time,
the respondents moved that the appeal be resolved on the merits by the CA.
On March 3, 2009, the CA issued a Resolution33 denying both motions.
McBurnie then filed with the Court the Petition for Review on Certiorari34
docketed as G.R. Nos. 186984-85.
In the meantime, the NLRC, acting on the CA’s order of remand, accepted
the appeal from the LA’s decision, and in its Decision35 dated November 17,
2009, reversed and set aside the Decision of the LA, and entered a new one
dismissing McBurnie’s complaint. It explained that based on records,
McBurnie was never an employee of any of the respondents, but a potential
investor in a project that included said respondents, barring a claim of
dismissal, much less, an illegal dismissal. Granting that there was a contract
of employment executed by the parties, McBurnie failed to obtain a work
permit which would have allowed him to work for any of the respondents.36 In
the absence of such permit, the employment agreement was void and thus,
could not be the source of any right or obligation.
Court Decision dated September 18, 2009
On September 18, 2009, the Third Division of this Court rendered its
Decision37 which reversed the CA Decision dated October 27, 2008 and
Resolution dated March 3, 2009. The dispositive portion reads:
WHEREFORE, the petition is GRANTED. The Decision of the Court of
Appeals in CA-G.R. SP Nos. 90845 and 95916 dated October 27, 2008
granting respondents’ Motion to Reduce Appeal Bond and ordering the
National Labor Relations Commission to give due course to respondents’
appeal, and its March 3, 2009 Resolution denying petitioner’s motion for
reconsideration, are REVERSED and SET ASIDE. The March 8, 2006 and
June 30, 2006 Resolutions of the National Labor Relations Commission in
NLRC NCR CA NO. 042913-05 dismissing respondents’ appeal for failure to
perfect an appeal and denying their motion for reconsideration, respectively,
are REINSTATED and AFFIRMED.
SO ORDERED.38
The Court explained that the respondents’ failure to post a bond equivalent in
amount to the LA’s monetary award was fatal to the appeal.39 Although an
appeal bond may be reduced upon motion by an employer, the following
conditions must first be satisfied: (1) the motion to reduce bond shall be
based on meritorious grounds; and (2) a reasonable amount in relation to the
monetary award is posted by the appellant. Unless the NLRC grants the
motion to reduce the cash bond within the 10-day reglementary period to
perfect an appeal from a judgment of the LA, the employer is mandated to
post the cash or surety bond securing the full amount within the said 10-day
period.40 The respondents’ initial appeal bond of ₱100,000.00 was grossly
inadequate compared to the LA’s monetary award.
The respondents’ first motion for reconsideration41 was denied by the Court
for lack of merit via a Resolution42 dated December 14, 2009.
Meanwhile, on the basis of the Court’s Decision, McBurnie filed with the
NLRC a motion for reconsideration with motion to recall and expunge from
the records the NLRC Decision dated November 17, 2009.43 The motion was
granted by the NLRC in its Decision44 dated January 14, 2010.45
Undaunted by the denial of their first motion for reconsideration of the
Decision dated September 18, 2009, the respondents filed with the Court a
Motion for Leave to Submit Attached Second Motion for Reconsideration46
and Second Motion for Reconsideration,47 which motion for leave was
granted in a Resolution48 dated March 15, 2010. McBurnie was allowed to
submit his comment on the second motion, and the respondents, their reply
to the comment. On January 25, 2012, however, the Court issued a
Resolution49 denying the second motion "for lack of merit," "considering that a
second motion for reconsideration is a prohibited pleading x x x."50
The Court’s Decision dated September 18, 2009 became final and executory
on March 14, 2012. Thus, entry of judgment51 was made in due course, as
follows:
ENTRY OF JUDGMENT
This is to certify that on September 18, 2009 a decision rendered in the
above-entitled cases was filed in this Office, the dispositive part of which
reads as follows:
xxxx
and that the same has, on March 14, 2012 become final and executory and is
hereby recorded in the Book of Entries of Judgments.52
The Entry of Judgment indicated that the same was made for the Court’s
Decision rendered in G.R. Nos. 186984-85.
On March 27, 2012, the respondents filed a Motion for Leave to File Attached
Third Motion for Reconsideration, with an attached Motion for
Reconsideration (on the Honorable Court’s 25 January 2012 Resolution) with
Motion to Refer These Cases to the Honorable Court En Banc.53 The third
motion for reconsideration is founded on the following grounds:
I.
THE PREVIOUS 15 MARCH 2010 RESOLUTION OF THE HONORABLE
COURT ACTUALLY GRANTED RESPONDENTS’ "MOTION FOR LEAVE
TO SUBMIT A SECOND MOTION FOR RECONSIDERATION."
HENCE, RESPONDENTS RESPECTFULLY CONTEND THAT THE
SUBSEQUENT 25 JANUARY 2012 RESOLUTION CANNOT DENY THE "
SECOND MOTION FOR RECONSIDERATION " ON THE GROUND THAT IT
IS A PROHIBITED PLEADING. MOREOVER, IT IS RESPECTFULLY
CONTENDED THAT THERE ARE VERY PECULIAR CIRCUMSTANCES
AND NUMEROUS IMPORTANT ISSUES IN THESE CASES THAT
CLEARLY JUSTIFY GIVING DUE COURSE TO RESPONDENTS’ "SECOND
MOTION FOR RECONSIDERATION," WHICH ARE:
II.
THE 10 MILLION PESOS BOND WHICH WAS POSTED IN COMPLIANCE
WITH THE OCTOBER 27, 2008 DECISION OF THE COURT OF APPEALS
IS A SUBSTANTIAL AND SPECIAL MERITORIOUS CIRCUMSTANCE TO
MERIT RECONSIDERATION OF THIS APPEAL.
III.
THE HONORABLE COURT HAS HELD IN NUMEROUS LABOR CASES
THAT WITH RESPECT TO ARTICLE 223 OF THE LABOR CODE, THE
REQUIREMENTS OF THE LAW SHOULD BE GIVEN A LIBERAL
INTERPRETATION, ESPECIALLY IF THERE ARE SPECIAL MERITORIOUS
CIRCUMSTANCES AND ISSUES.
IV. THE LA’S JUDGMENT WAS PATENTLY VOID SINCE IT AWARDS
MORE THAN ₱60 MILLION PESOS TO A SINGLE FOREIGNER WHO HAD
NO WORK PERMIT, AND NO WORKING VISA.
V.
PETITIONER MCBURNIE DID NOT IMPLEAD THE NATIONAL LABOR
RELATIONS COMMISSION (NLRC) IN HIS APPEAL HEREIN, MAKING THE
APPEAL INEFFECTIVE AGAINST THE NLRC.
VI.
NLRC HAS DISMISSED THE COMPLAINT OF PETITIONER MCBURNIE IN
ITS NOVEMBER 17, 2009 DECISION.
VII.
THE HONORABLE COURT’S 18 SEPTEMBER 2009 DECISION WAS
TAINTED WITH VERY SERIOUS IRREGULARITIES.
VIII.
GR NOS. 178034 AND 178117 HAVE BEEN INADVERTENTLY INCLUDED
IN THIS CASE.
IX.
THE HONORABLE COURT DID NOT DULY RULE UPON THE OTHER
VERY MERITORIOUS ARGUMENTS OF THE RESPONDENTS WHICH
ARE AS FOLLOWS:
(A) PETITIONER NEVER ATTENDED ANY OF ALL 14 HEARINGS BEFORE
THE [LA] (WHEN 2 MISSED HEARINGS MEAN DISMISSAL).
(B) PETITIONER REFERRED TO HIMSELF AS A "VICTIM" OF LEISURE
EXPERTS, INC., BUT NOT OF ANY OF THE RESPONDENTS.
(C) PETITIONER’S POSITIVE LETTER TO RESPONDENT MR. EULALIO
GANZON CLEARLY SHOWS THAT HE WAS NOT ILLEGALLY DISMISSED
NOR EVEN DISMISSED BY ANY OF THE RESPONDENTS AND
PETITIONER EVEN PROMISED TO PAY HIS DEBTS FOR ADVANCES
MADE BY RESPONDENTS.
(D) PETITIONER WAS NEVER EMPLOYED BY ANY OF THE
RESPONDENTS. PETITIONER PRESENTED WORK FOR CORONADO
BEACH RESORT WHICH IS [NEITHER] OWNED NOR CONNECTED WITH
ANY OF THE RESPONDENTS.
(E) THE [LA] CONCLUDED THAT PETITIONER WAS DISMISSED EVEN IF
THERE WAS ABSOLUTELY NO EVIDENCE AT ALL PRESENTED THAT
PETITIONER WAS DISMISSED BY THE RESPONDENTS.
(F) PETITIONER LEFT THE PHILIPPINES FOR AUSTRALIA JUST 2
MONTHS AFTER THE START OF THE ALLEGED EMPLOYMENT
AGREEMENT, AND HAS STILL NOT RETURNED TO THE PHILIPPINES
AS CONFIRMED BY THE BUREAU OF IMMIGRATION.
(G) PETITIONER COULD NOT HAVE SIGNED AND PERSONALLY
APPEARED BEFORE THE NLRC ADMINISTERING OFFICER AS
INDICATED IN THE COMPLAINT SHEET SINCE HE LEFT THE COUNTRY
3 YEARS BEFORE THE COMPLAINT WAS FILED AND HE NEVER CAME
BACK.54
On September 4, 2012, the Court en banc55 issued a Resolution56 accepting
the case from the Third Division. It also issued a temporary restraining order
(TRO) enjoining the implementation of the LA’s Decision dated September
30, 2004. This prompted McBurnie’s filing of a Motion for Reconsideration,57
where he invoked the fact that the Court’s Decision dated September 18,
2009 had become final and executory, with an entry of judgment already
made by the Court.
Our Ruling
In light of pertinent law and jurisprudence, and upon taking a second hard
look of the parties’ arguments and the records of the case, the Court has
ascertained that a reconsideration of this Court’s Decision dated September
18, 2009 and Resolutions dated December 14, 2009 and January 25, 2012,
along with the lifting of the entry of judgment in G.R. No. 186984-85, is in
order.
The Court’s acceptance of the
third motion for reconsideration
At the outset, the Court emphasizes that second and subsequent motions for
reconsideration are, as a general rule, prohibited. Section 2, Rule 52 of the
Rules of Court provides that "no second motion for reconsideration of a
judgment or final resolution by the same party shall be entertained." The rule
rests on the basic tenet of immutability of judgments. "At some point, a
decision becomes final and executory and, consequently, all litigations must
come to an end."58
The general rule, however, against second and subsequent motions for
reconsideration admits of settled exceptions. For one, the present Internal
Rules of the Supreme Court, particularly Section 3, Rule 15 thereof, provides:
Sec. 3. Second motion for reconsideration. ― The Court shall not entertain a
second motion for reconsideration, and any exception to this rule can only be
granted in the higher interest of justice by the Court en banc upon a vote of at
least two-thirds of its actual membership. There is reconsideration "in the
higher interest of justice" when the assailed decision is not only legally
erroneous, but is likewise patently unjust and potentially capable of causing
unwarranted and irremediable injury or damage to the parties. A second
motion for reconsideration can only be entertained before the ruling sought to
be reconsidered becomes final by operation of law or by the Court’s
declaration.
x x x x (Emphasis ours)
In a line of cases, the Court has then entertained and granted second
motions for reconsideration "in the higher interest of substantial justice," as
allowed under the Internal Rules when the assailed decision is "legally
erroneous," "patently unjust" and "potentially capable of causing unwarranted
and irremediable injury or damage to the parties." In Tirazona v. Philippine
EDS Techno-Service, Inc. (PET, Inc.),59 we also explained that a second
motion for reconsideration may be allowed in instances of "extraordinarily
persuasive reasons and only after an express leave shall have been
obtained."60 In Apo Fruits Corporation v. Land Bank of the Philippines,61 we
allowed a second motion for reconsideration as the issue involved therein
was a matter of public interest, as it pertained to the proper application of a
basic constitutionally-guaranteed right in the government’s implementation of
its agrarian reform program. In San Miguel Corporation v. NLRC,62 the Court
set aside the decisions of the LA and the NLRC that favored claimants-
security guards upon the Court’s review of San Miguel Corporation’s second
motion for reconsideration. In Vir-Jen Shipping and Marine Services, Inc. v.
NLRC, et al.,63 the Court en banc reversed on a third motion for
reconsideration the ruling of the Court’s Division on therein private
respondents’ claim for wages and monetary benefits.
It is also recognized that in some instances, the prudent action towards a just
resolution of a case is for the Court to suspend rules of procedure, for "the
power of this Court to suspend its own rules or to except a particular case
from its operations whenever the purposes of justice require it, cannot be
questioned."64 In De Guzman v. Sandiganbayan,65 the Court, thus, explained:
The rules of procedure should be viewed as mere tools designed to facilitate
the attainment of justice. Their strict and rigid application, which would result
in technicalities that tend to frustrate rather than promote substantial justice,
must always be avoided. Even the Rules of Court envision this liberality. This
power to suspend or even disregard the rules can be so pervasive and
encompassing so as to alter even that which this Court itself has already
declared to be final, as we are now compelled to do in this case. x x x.
xxxx
The Rules of Court was conceived and promulgated to set forth guidelines in
the dispensation of justice but not to bind and chain the hand that dispenses
it, for otherwise, courts will be mere slaves to or robots of technical rules,
shorn of judicial discretion. That is precisely why courts in rendering real
justice have always been, as they in fact ought to be, conscientiously guided
by the norm that when on the balance, technicalities take a backseat against
substantive rights, and not the other way around. Truly then, technicalities, in
the appropriate language of Justice Makalintal, "should give way to the
realities of the situation." x x x.66 (Citations omitted)
Consistent with the foregoing precepts, the Court has then reconsidered even
decisions that have attained finality, finding it more appropriate to lift entries
of judgments already made in these cases. In Navarro v. Executive
Secretary,67 we reiterated the pronouncement in De Guzman that the power
to suspend or even disregard rules of procedure can be so pervasive and
compelling as to alter even that which this Court itself has already declared
final. The Court then recalled in Navarro an entry of judgment after it had
determined the validity and constitutionality of Republic Act No. 9355,
explaining that:
Verily, the Court had, on several occasions, sanctioned the recall of entries of
judgment in light of attendant extraordinary circumstances. The power to
suspend or even disregard rules of procedure can be so pervasive and
compelling as to alter even that which this Court itself had already declared
final. In this case, the compelling concern is not only to afford the movants-
intervenors the right to be heard since they would be adversely affected by
the judgment in this case despite not being original parties thereto, but also to
arrive at the correct interpretation of the provisions of the [Local Government
Code (LGC)] with respect to the creation of local government units. x x x.68
(Citations omitted)
In Munoz v. CA,69 the Court resolved to recall an entry of judgment to prevent
a miscarriage of justice. This justification was likewise applied in Tan Tiac
Chiong v. Hon. Cosico,70 wherein the Court held that:
The recall of entries of judgments, albeit rare, is not a novelty. In Muñoz v. CA
, where the case was elevated to this Court and a first and second motion for
reconsideration had been denied with finality , the Court, in the interest of
substantial justice, recalled the Entry of Judgment as well as the letter of
transmittal of the records to the Court of Appeals.71 (Citation omitted)
In Barnes v. Judge Padilla,72 we ruled:
A final and executory judgment can no longer be attacked by any of the
parties or be modified, directly or indirectly, even by the highest court of the
land.
However, this Court has relaxed this rule in order to serve substantial justice
considering (a) matters of life, liberty, honor or property, (b) the existence of
special or compelling circumstances, (c) the merits of the case, (d) a cause
not entirely attributable to the fault or negligence of the party favored by the
suspension of the rules, (e) a lack of any showing that the review sought is
merely frivolous and dilatory, and (f) the other party will not be unjustly
prejudiced thereby.73 (Citations omitted)
As we shall explain, the instant case also qualifies as an exception to, first,
the proscription against second and subsequent motions for reconsideration,
and second, the rule on immutability of judgments; a reconsideration of the
Decision dated September 18, 2009, along with the Resolutions dated
December 14, 2009 and January 25, 2012, is justified by the higher interest of
substantial justice.
To begin with, the Court agrees with the respondents that the Court’s prior
resolve to grant , and not just merely note, in a Resolution dated March 15,
2010 the respondents’ motion for leave to submit their second motion for
reconsideration already warranted a resolution and discussion of the motion
for reconsideration on its merits. Instead of doing this, however, the Court
issued on January 25, 2012 a Resolution74 denying the motion to reconsider
for lack of merit, merely citing that it was a "prohibited pleading under Section
2, Rule 52 in relation to Section 4, Rule 56 of the 1997 Rules of Civil
Procedure, as amended."75 In League of Cities of the Philippines (LCP) v.
Commission on Elections,76 we reiterated a ruling that when a motion for
leave to file and admit a second motion for reconsideration is granted by the
Court, the Court therefore allows the filing of the second motion for
reconsideration. In such a case, the second motion for reconsideration is no
longer a prohibited pleading. Similarly in this case, there was then no reason
for the Court to still consider the respondents’ second motion for
reconsideration as a prohibited pleading, and deny it plainly on such ground.
The Court intends to remedy such error through this resolution.
More importantly, the Court finds it appropriate to accept the pending motion
for reconsideration and resolve it on the merits in order to rectify its prior
disposition of the main issues in the petition. Upon review, the Court is
constrained to rule differently on the petitions. We have determined the grave
error in affirming the NLRC’s rulings, promoting results that are patently
unjust for the respondents, as we consider the facts of the case, pertinent
law, jurisprudence, and the degree of the injury and damage to the
respondents that will inevitably result from the implementation of the Court’s
Decision dated September 18, 2009.
The rule on appeal bonds
We emphasize that the crucial issue in this case concerns the sufficiency of
the appeal bond that was posted by the respondents. The present rule on the
matter is Section 6, Rule VI of the 2011 NLRC Rules of Procedure, which was
substantially the same provision in effect at the time of the respondents’
appeal to the NLRC, and which reads:
RULE VI
APPEALS
Sec. 6. BOND. – In case the decision of the Labor Arbiter or the Regional
Director involves a monetary award, an appeal by the employer may be
perfected only upon the posting of a cash or surety bond. The appeal bond
shall either be in cash or surety in an amount equivalent to the monetary
award, exclusive of damages and attorney’s fees.
xxxx
No motion to reduce bond shall be entertained except on meritorious grounds
and upon the posting of a bond in a reasonable amount in relation to the
monetary award.
The filing of the motion to reduce bond without compliance with the requisites
in the preceding paragraph shall not stop the running of the period to perfect
an appeal. (Emphasis supplied)
While the CA, in this case, allowed an appeal bond in the reduced amount of
₱10,000,000.00 and then ordered the case’s remand to the NLRC, this
Court’s Decision dated September 18, 2009 provides otherwise, as it reads in
part:
The posting of a bond is indispensable to the perfection of an appeal in cases
involving monetary awards from the decision of the Labor Arbiter. The
lawmakers clearly intended to make the bond a mandatory requisite for the
perfection of an appeal by the employer as inferred from the provision that an
appeal by the employer may be perfected "only upon the posting of a cash or
surety bond." The word "only" makes it clear that the posting of a cash or
surety bond by the employer is the essential and exclusive means by which
an employer’s appeal may be perfected. x x x.
Moreover, the filing of the bond is not only mandatory but a jurisdictional
requirement as well, that must be complied with in order to confer jurisdiction
upon the NLRC. Non-compliance therewith renders the decision of the Labor
Arbiter final and executory. This requirement is intended to assure the
workers that if they prevail in the case, they will receive the money judgment
in their favor upon the dismissal of the employer’s appeal. It is intended to
discourage employers from using an appeal to delay or evade their obligation
to satisfy their employees’ just and lawful claims.
xxxx
Thus, it behooves the Court to give utmost regard to the legislative and
administrative intent to strictly require the employer to post a cash or surety
bond securing the full amount of the monetary award within the 10[-]day
reglementary period. Nothing in the Labor Code or the NLRC Rules of
Procedure authorizes the posting of a bond that is less than the monetary
award in the judgment, or would deem such insufficient posting as sufficient
to perfect the appeal.
While the bond may be reduced upon motion by the employer, this is subject
to the conditions that (1) the motion to reduce the bond shall be based on
meritorious grounds; and (2) a reasonable amount in relation to the monetary
award is posted by the appellant, otherwise the filing of the motion to reduce
bond shall not stop the running of the period to perfect an appeal. The
qualification effectively requires that unless the NLRC grants the reduction of
the cash bond within the 10-day reglementary period, the employer is still
expected to post the cash or surety bond securing the full amount within the
said 10-day period. If the NLRC does eventually grant the motion for
reduction after the reglementary period has elapsed, the correct relief would
be to reduce the cash or surety bond already posted by the employer within
the 10-day period.77 (Emphasis supplied; underscoring ours)
To begin with, the Court rectifies its prior pronouncement – the unqualified
statement that even an appellant who seeks a reduction of an appeal bond
before the NLRC is expected to post a cash or surety bond securing the full
amount of the judgment award within the 10-day reglementary period to
perfect the appeal.
The suspension of the period to
perfect the appeal upon the filing of
a motion to reduce bond
To clarify, the prevailing jurisprudence on the matter provides that the filing of
a motion to reduce bond, coupled with compliance with the two conditions
emphasized in Garcia v. KJ Commercial78 for the grant of such motion,
namely, (1) a meritorious ground, and (2) posting of a bond in a reasonable
amount, shall suffice to suspend the running of the period to perfect an
appeal from the labor arbiter’s decision to the NLRC.79 To require the full
amount of the bond within the 10-day reglementary period would only render
nugatory the legal provisions which allow an appellant to seek a reduction of
the bond. Thus, we explained in Garcia:
The filing of a motion to reduce bond and compliance with the two conditions
stop the running of the period to perfect an appeal. x x x
xxxx
The NLRC has full discretion to grant or deny the motion to reduce bond, and
it may rule on the motion beyond the 10-day period within which to perfect an
appeal. Obviously, at the time of the filing of the motion to reduce bond and
posting of a bond in a reasonable amount, there is no assurance whether the
appellant’s motion is indeed based on "meritorious ground" and whether the
bond he or she posted is of a "reasonable amount." Thus, the appellant
always runs the risk of failing to perfect an appeal.
x x x In order to give full effect to the provisions on motion to reduce bond, the
appellant must be allowed to wait for the ruling of the NLRC on the motion
even beyond the 10-day period to perfect an appeal. If the NLRC grants the
motion and rules that there is indeed meritorious ground and that the amount
of the bond posted is reasonable, then the appeal is perfected. If the NLRC
denies the motion, the appellant may still file a motion for reconsideration as
provided under Section 15, Rule VII of the Rules. If the NLRC grants the
motion for reconsideration and rules that there is indeed meritorious ground
and that the amount of the bond posted is reasonable, then the appeal is
perfected. If the NLRC denies the motion, then the decision of the labor
arbiter becomes final and executory.
xxxx
In any case, the rule that the filing of a motion to reduce bond shall not stop
the running of the period to perfect an appeal is not absolute. The Court may
relax the rule. In Intertranz Container Lines, Inc. v. Bautista, the Court held:
"Jurisprudence tells us that in labor cases, an appeal from a decision
involving a monetary award may be perfected only upon the posting of cash
or surety bond. The Court, however, has relaxed this requirement under
certain exceptional circumstances in order to resolve controversies on their
merits. These circumstances include: (1) fundamental consideration of
substantial justice; (2) prevention of miscarriage of justice or of unjust
enrichment; and (3) special circumstances of the case combined with its legal
merits, and the amount and the issue involved."80 (Citations omitted and
emphasis ours)
A serious error of the NLRC was its outright denial of the motion to reduce the
bond, without even considering the respondents’ arguments and totally
unmindful of the rules and jurisprudence that allow the bond’s reduction.
Instead of resolving the motion to reduce the bond on its merits, the NLRC
insisted on an amount that was equivalent to the monetary award, merely
explaining:
We are constrained to deny respondents’ motion for reduction. As held by the
Supreme Court in a recent case, in cases involving monetary award, an
employer seeking to appeal the Labor Arbiter’s decision to the Commission is
unconditionally required by Art. 223, Labor Code to post bond in the amount
equivalent to the monetary award (Calabash Garments vs. NLRC, G.R. No.
110827, August 8, 1996). x x x81 (Emphasis ours)
When the respondents sought to reconsider, the NLRC still refused to fully
decide on the motion. It refused to at least make a preliminary determination
of the merits of the appeal, as it held:
We are constrained to dismiss respondents’ Motion for Reconsideration.
Respondents’ contention that the appeal bond is excessive and based on a
decision which is a patent nullity involves the merits of the case. x x x82
Prevailing rules and jurisprudence
allow the reduction of appeal bonds.
By such haste of the NLRC in peremptorily denying the respondents’ motion
without considering the respondents’ arguments, it effectively denied the
respondents of their opportunity to seek a reduction of the bond even when
the same is allowed under the rules and settled jurisprudence. It was
equivalent to the NLRC’s refusal to exercise its discretion, as it refused to
determine and rule on a showing of meritorious grounds and the
reasonableness of the bond tendered under the circumstances.83 Time and
again, the Court has cautioned the NLRC to give Article 223 of the Labor
Code, particularly the provisions requiring bonds in appeals involving
monetary awards, a liberal interpretation in line with the desired objective of
resolving controversies on the merits.84 The NLRC’s failure to take action on
the motion to reduce the bond in the manner prescribed by law and
jurisprudence then cannot be countenanced. Although an appeal by parties
from decisions that are adverse to their interests is neither a natural right nor
a part of due process, it is an essential part of our judicial system. Courts
should proceed with caution so as not to deprive a party of the right to appeal,
but rather, ensure that every party has the amplest opportunity for the proper
and just disposition of their cause, free from the constraints of technicalities.85
Considering the mandate of labor tribunals, the principle equally applies to
them.
Given the circumstances of the case, the Court’s affirmance in the Decision
dated September 18, 2009 of the NLRC’s strict application of the rule on
appeal bonds then demands a re-examination. Again, the emerging trend in
our jurisprudence is to afford every party-litigant the amplest opportunity for
the proper and just determination of his cause, free from the constraints of
technicalities.86 Section 2, Rule I of the NLRC Rules of Procedure also
provides the policy that "the Rules shall be liberally construed to carry out the
objectives of the Constitution, the Labor Code of the Philippines and other
relevant legislations, and to assist the parties in obtaining just, expeditious
and inexpensive resolution and settlement of labor disputes."87
In accordance with the foregoing, although the general rule provides that an
appeal in labor cases from a decision involving a monetary award may be
perfected only upon the posting of a cash or surety bond, the Court has
relaxed this requirement under certain exceptional circumstances in order to
resolve controversies on their merits. These circumstances include: (1) the
fundamental consideration of substantial justice; (2) the prevention of
miscarriage of justice or of unjust enrichment; and (3) special circumstances
of the case combined with its legal merits, and the amount and the issue
involved.88 Guidelines that are applicable in the reduction of appeal bonds
were also explained in Nicol v. Footjoy Industrial Corporation.89 The bond
requirement in appeals involving monetary awards has been and may be
relaxed in meritorious cases, including instances in which (1) there was
substantial compliance with the Rules, (2) surrounding facts and
circumstances constitute meritorious grounds to reduce the bond, (3) a liberal
interpretation of the requirement of an appeal bond would serve the desired
objective of resolving controversies on the merits, or (4) the appellants, at the
very least, exhibited their willingness and/or good faith by posting a partial
bond during the reglementary period.90
In Blancaflor v. NLRC,91 the Court also emphasized that while Article 22392 of
the Labor Code, as amended by Republic Act No. 6715, which requires a
cash or surety bond in an amount equivalent to the monetary award in the
judgment appealed from may be considered a jurisdictional requirement for
the perfection of an appeal, nevertheless, adhering to the principle that
substantial justice is better served by allowing the appeal on the merits to be
threshed out by the NLRC, the foregoing requirement of the law should be
given a liberal interpretation.
As the Court, nonetheless, remains firm on the importance of appeal bonds in
appeals from monetary awards of LAs, we stress that the NLRC, pursuant to
Section 6, Rule VI of the NLRC Rules of Procedure, shall only accept motions
to reduce bond that are coupled with the posting of a bond in a reasonable
amount. Time and again, we have explained that the bond requirement
imposed upon appellants in labor cases is intended to ensure the satisfaction
of awards that are made in favor of appellees, in the event that their claims
are eventually sustained by the courts.93 On the part of the appellants, its
posting may also signify their good faith and willingness to recognize the final
outcome of their appeal.
At the time of a motion to reduce appeal bond’s filing, the question of what
constitutes "a reasonable amount of bond" that must accompany the motion
may be subject to differing interpretations of litigants. The judgment of the
NLRC which has the discretion under the law to determine such amount
cannot as yet be invoked by litigants until after their motions to reduce appeal
bond are accepted.
Given these limitations, it is not uncommon for a party to unduly forfeit his
opportunity to seek a reduction of the required bond and thus, to appeal,
when the NLRC eventually disagrees with the party’s assessment. These
have also resulted in the filing of numerous petitions against the NLRC, citing
an alleged grave abuse of discretion on the part of the labor tribunal for its
finding on the sufficiency or insufficiency of posted appeal bonds.
It is in this light that the Court finds it necessary to set a parameter for the
litigants’ and the NLRC’s guidance on the amount of bond that shall hereafter
be filed with a motion for a bond’s reduction. To ensure that the provisions of
Section 6, Rule VI of the NLRC Rules of Procedure that give parties the
chance to seek a reduction of the appeal bond are effectively carried out,
without however defeating the benefits of the bond requirement in favor of a
winning litigant, all motions to reduce bond that are to be filed with the NLRC
shall be accompanied by the posting of a cash or surety bond equivalent to
10% of the monetary award that is subject of the appeal, which shall
provisionally be deemed the reasonable amount of the bond in the meantime
that an appellant’s motion is pending resolution by the Commission. In
conformity with the NLRC Rules, the monetary award, for the purpose of
computing the necessary appeal bond, shall exclude damages and attorney’s
fees.94 Only after the posting of a bond in the required percentage shall an
appellant’s period to perfect an appeal under the NLRC Rules be deemed
suspended.
The foregoing shall not be misconstrued to unduly hinder the NLRC’s
exercise of its discretion, given that the percentage of bond that is set by this
guideline shall be merely provisional. The NLRC retains its authority and duty
to resolve the motion and determine the final amount of bond that shall be
posted by the appellant, still in accordance with the standards of "meritorious
grounds" and "reasonable amount". Should the NLRC, after considering the
motion’s merit, determine that a greater amount or the full amount of the bond
needs to be posted by the appellant, then the party shall comply accordingly.
The appellant shall be given a period of 10 days from notice of the NLRC
order within which to perfect the appeal by posting the required appeal bond.
Meritorious ground as a condition
for the reduction of the appeal bond
In all cases, the reduction of the appeal bond shall be justified by meritorious
grounds and accompanied by the posting of the required appeal bond in a
reasonable amount.
The requirement on the existence of a "meritorious ground" delves on the
worth of the parties’ arguments, taking into account their respective rights and
the circumstances that attend the case. The condition was emphasized in
University Plans Incorporated v. Solano,95 wherein the Court held that while
the NLRC’s Revised Rules of Procedure "allows the [NLRC] to reduce the
amount of the bond, the exercise of the authority is not a matter of right on
the part of the movant, but lies within the sound discretion of the NLRC upon
a showing of meritorious grounds."96 By jurisprudence, the merit referred to
may pertain to an appellant’s lack of financial capability to pay the full amount
of the bond,97 the merits of the main appeal such as when there is a valid
claim that there was no illegal dismissal to justify the award,98 the absence of
an employer-employee relationship,99 prescription of claims,100 and other
similarly valid issues that are raised in the appeal.101 For the purpose of
determining a "meritorious ground", the NLRC is not precluded from receiving
evidence, or from making a preliminary determination of the merits of the
appellant’s contentions.102
In this case, the NLRC then should have considered the respondents’
arguments in the memorandum on appeal that was filed with the motion to
reduce the requisite appeal bond. Although a consideration of said arguments
at that point would have been merely preliminary and should not in any way
bind the eventual outcome of the appeal, it was apparent that the
respondents’ defenses came with an indication of merit that deserved a full
review of the decision of the LA. The CA, by its Resolution dated February
16, 2007, even found justified the issuance of a preliminary injunction to
enjoin the immediate execution of the LA’s decision, and this Court, a
temporary restraining order on September 4, 2012.
Significantly, following the CA’s remand of the case to the NLRC, the latter
even rendered a Decision that contained findings that are inconsistent with
McBurnie’s claims. The NLRC reversed and set aside the decision of the LA,
and entered a new one dismissing McBurnie’s complaint. It explained that
McBurnie was not an employee of the respondents; thus, they could not have
dismissed him from employment. The purported employment contract of the
respondents with the petitioner was qualified by the conditions set forth in a
letter dated May 11, 1999, which reads:
May 11, 1999
MR. ANDREW MCBURNIE
Re: Employment Contract
Dear Andrew,
It is understood that this Contract is made subject to the understanding that it
is effective only when the project financing for our Baguio Hotel project
pushed through.
The agreement with EGI Managers, Inc. is made now to support your need to
facilitate your work permit with the Department of Labor in view of the
expiration of your contract with Pan Pacific.
Regards,
Sgd. Eulalio Ganzon (p. 203, Records)103
For the NLRC, the employment agreement could not have given rise to an
employer-employee relationship by reason of legal impossibility. The two
conditions that form part of their agreement, namely, the successful
completion of the project financing for the hotel project in Baguio City and
McBurnie’s acquisition of an Alien Employment Permit, remained
unsatisfied.104 The NLRC concluded that McBurnie was instead a potential
investor in a project that included Ganzon, but the said project failed to
pursue due to lack of funds. Any work performed by McBurnie in relation to
the project was merely preliminary to the business venture and part of his
"due diligence" study before pursuing the project, "done at his own instance,
not in furtherance of the employment contract but for his own investment
purposes."105 Lastly, the alleged employment of the petitioner would have
been void for being contrary to law, since it is undisputed that McBurnie did
not have any work permit. The NLRC declared:
Absent an employment permit, any employment relationship that McBurnie
contemplated with the respondents was void for being contrary to law. A void
or inexistent contract, in turn, has no force and effect from the beginning as if
it had never been entered into. Thus, without an Alien Employment Permit,
the "Employment Agreement" is void and could not be the source of a right or
obligation. In support thereof, the DOLE issued a certification that McBurnie
has neither applied nor been issued an Alien Employment Permit (p. 204,
Records).106
McBurnie moved to reconsider, citing the Court’s Decision of September 18,
2009 that reversed and set aside the CA’s Decision authorizing the remand.
Although the NLRC granted the motion on the said ground via a Decision107
that set aside the NLRC’s Decision dated November 17, 2009, the findings of
the NLRC in the November 17, 2009 decision merit consideration, especially
since the findings made therein are supported by the case records.
In addition to the apparent merit of the respondents’ appeal, the Court finds
the reduction of the appeal bond justified by the substantial amount of the
LA’s monetary award. Given its considerable amount, we find reason in the
respondents’ claim that to require an appeal bond in such amount could only
deprive them of the right to appeal, even force them out of business and
affect the livelihood of their employees.108 In Rosewood Processing, Inc. v.
NLRC,109 we emphasized: "Where a decision may be made to rest on
informed judgment rather than rigid rules, the equities of the case must be
accorded their due weight because labor determinations should not be
‘secundum rationem but also secundum caritatem.’"110
What constitutes a reasonable
amount in the determination of the
final amount of appeal bond
As regards the requirement on the posting of a bond in a "reasonable
amount," the Court holds that the final determination thereof by the NLRC
shall be based primarily on the merits of the motion and the main appeal.
Although the NLRC Rules of Procedure, particularly Section 6 of Rule VI
thereof, provides that the bond to be posted shall be "in a reasonable amount
in relation to the monetary award ," the merit of the motion shall always take
precedence in the determination. Settled is the rule that procedural rules were
conceived, and should thus be applied in a manner that would only aid the
attainment of justice. If a stringent application of the rules would hinder rather
than serve the demands of substantial justice, the former must yield to the
latter.111
Thus, in Nicol where the appellant posted a bond of ₱10,000,000.00 upon an
appeal from the LA’s award of ₱51,956,314.00, the Court, instead of ruling
right away on the reasonableness of the bond’s amount solely on the basis of
the judgment award, found it appropriate to remand the case to the NLRC,
which should first determine the merits of the motion. In University Plans,112
the Court also reversed the outright dismissal of an appeal where the bond
posted in a judgment award of more than ₱30,000,000.00 was ₱30,000.00.
The Court then directed the NLRC to first determine the merit, or lack of
merit, of the motion to reduce the bond, after the appellant therein claimed
that it was under receivership and thus, could not dispose of its assets within
a short notice. Clearly, the rule on the posting of an appeal bond should not
be allowed to defeat the substantive rights of the parties.113
Notably, in the present case, following the CA’s rendition of its Decision which
allowed a reduced appeal bond, the respondents have posted a bond in the
amount of ₱10,000,000.00. In Rosewood, the Court deemed the posting of a
surety bond of ₱50,000.00, coupled with a motion to reduce the appeal bond,
as substantial compliance with the legal requirements for an appeal from a
₱789,154.39 monetary award "considering the clear merits which appear, res
ipsa loquitor, in the appeal from the LA’s Decision, and the petitioner’s
substantial compliance with rules governing appeals."114 The foregoing
jurisprudence strongly indicate that in determining the reasonable amount of
appeal bonds, the Court primarily considers the merits of the motions and
appeals.
Given the circumstances in this case and the merits of the respondents’
arguments before the NLRC, the Court holds that the respondents had
posted a bond in a "reasonable amount", and had thus complied with the
requirements for the perfection of an appeal from the LA’s decision. The CA
was correct in ruling that:
In the case of Nueva Ecija I Electric Cooperative, Inc. (NEECO I) Employees
Association, President Rodolfo Jimenez, and members, Reynaldo Fajardo, et
al. vs. NLRC, Nueva Ecija I Electric Cooperative, Inc. (NEECO I) and Patricio
de la Peña (GR No. 116066, January 24, 2000), the Supreme Court
recognized that: "the NLRC, in its Resolution No. 11-01-91 dated November
7, 1991 deleted the phrase "exclusive of moral and exemplary damages as
well as attorney’s fees in the determination of the amount of bond, and
provided a safeguard against the imposition of excessive bonds by providing
that "(T)he Commission may in meritorious cases and upon motion of the
appellant, reduce the amount of the bond."
In the case of Cosico, Jr. vs. NLRC, 272 SCRA 583, it was held:
"The unreasonable and excessive amount of bond would be oppressive and
unjust and would have the effect of depriving a party of his right to appeal."
xxxx
In dismissing outright the motion to reduce bond filed by petitioners, NLRC
abused its discretion. It should have fixed an appeal bond in a reasonable
amount. Said dismissal deprived petitioners of their right to appeal the Labor
Arbiter’s decision.
xxxx
NLRC Rules allow reduction of appeal bond on meritorious grounds (Sec. 6,
Rule VI, NLRC Rules of Procedure). This Court finds the appeal bond in the
amount of ₱54,083,910.00 prohibitive and excessive, which constitutes a
meritorious ground to allow a motion for reduction thereof.115
The foregoing declaration of the Court requiring a bond in a reasonable
amount, taking into account the merits of the motion and the appeal, is
consistent with the oft-repeated principle that letter-perfect rules must yield to
the broader interest of substantial justice.116
The effect of a denial of the appeal
to the NLRC
In finding merit in the respondents’ motion for reconsideration, we also take
into account the unwarranted results that will arise from an implementation of
the Court’s Decision dated September 18, 2009. We emphasize, moreover,
that although a remand and an order upon the NLRC to give due course to
the appeal would have been the usual course after a finding that the
conditions for the reduction of an appeal bond were duly satisfied by the
respondents, given such results, the Court finds it necessary to modify the
CA’s order of remand, and instead rule on the dismissal of the complaint
against the respondents.
Without the reversal of the Court’s Decision and the dismissal of the
complaint against the respondents, McBurnie would be allowed to claim
benefits under our labor laws despite his failure to comply with a settled
requirement for foreign nationals.
Considering that McBurnie, an Australian, alleged illegal dismissal and sought
to claim under our labor laws, it was necessary for him to establish, first and
foremost, that he was qualified and duly authorized to obtain employment
within our jurisdiction. A requirement for foreigners who intend to work within
the country is an employment permit, as provided under Article 40, Title II of
the Labor Code which reads:
Art. 40. Employment permit for non-resident aliens. Any alien seeking
admission to the Philippines for employment purposes and any domestic or
foreign employer who desires to engage an alien for employment in the
Philippines shall obtain an employment permit from the Department of Labor.
In WPP Marketing Communications, Inc. v. Galera,117 we held that a foreign
national’s failure to seek an employment permit prior to employment poses a
serious problem in seeking relief from the Court.118 Thus, although the
respondent therein appeared to have been illegally dismissed from
employment, we explained:
This is Galera’s dilemma: Galera worked in the Philippines without proper
work permit but now wants to claim employee’s benefits under Philippine
labor laws.
xxxx
The law and the rules are consistent in stating that the employment permit
must be acquired prior to employment. The Labor Code states: "Any alien
seeking admission to the Philippines for employment purposes and any
domestic or foreign employer who desires to engage an alien for employment
in the Philippines shall obtain an employment permit from the Department of
Labor." Section 4, Rule XIV, Book I of the Implementing Rules and
Regulations provides:
"Employment permit required for entry. – No alien seeking employment,
whether as a resident or non-resident, may enter the Philippines without first
securing an employment permit from the Ministry. If an alien enters the
country under a non-working visa and wishes to be employed thereafter, he
may be allowed to be employed upon presentation of a duly approved
employment permit."
Galera cannot come to this Court with unclean hands. To grant Galera’s
prayer is to sanction the violation of the Philippine labor laws requiring aliens
to secure work permits before their employment. We hold that the status quo
must prevail in the present case and we leave the parties where they are.
This ruling, however, does not bar Galera from seeking relief from other
jurisdictions.119 (Citations omitted and underscoring ours)
Clearly, this circumstance on the failure of McBurnie to obtain an employment
permit, by itself, necessitates the dismissal of his labor complaint.
Furthermore, as has been previously discussed, the NLRC has ruled in its
Decision dated November 17, 2009 on the issue of illegal dismissal. It
declared that McBurnie was never an employee of any of the respondents.120
It explained:
All these facts and circumstances prove that McBurnie was never an
employee of Eulalio Ganzon or the respondent companies, but a potential
investor in a project with a group including Eulalio Ganzon and Martinez but
said project did not take off because of lack of funds.
McBurnie further claims that in conformity with the provision of the
employment contract pertaining to the obligation of the respondents to
provide housing, respondents assigned him Condo Unit # 812 of the Makati
Cinema Square Condominium owned by the respondents. He was also
allowed to use a Hyundai car. If it were true that the contract of employment
was for working visa purposes only, why did the respondents perform their
obligations to him?
There is no question that respondents assigned him Condo Unit # 812 of the
MCS, but this was not free of charge. If it were true that it is part of the
compensation package as employee, then McBurnie would not be obligated
to pay anything, but clearly, he admitted in his letter that he had to pay all the
expenses incurred in the apartment.
Assuming for the sake of argument that the employment contract is valid
between them, record shows that McBurnie worked from September 1, 1999
until he met an accident on the last week of October. During the period of
employment, the respondents must have paid his salaries in the sum of
US$26,000.00, more or less.
However, McBurnie failed to present a single evidence that [the respondents]
paid his salaries like payslip, check or cash vouchers duly signed by him or
any document showing proof of receipt of his compensation from the
respondents or activity in furtherance of the employment contract. Granting
again that there was a valid contract of employment, it is undisputed that on
November 1, 1999, McBurnie left for Australia and never came back. x x x.121
(Emphasis supplied)
Although the NLRC’s Decision dated November 17, 2009 was set aside in a
Decision dated January 14, 2010, the Court’s resolve to now reconsider its
Decision dated September 18, 2009 and to affirm the CA’s Decision and
Resolution in the respondents’ favor effectively restores the NLRC’s basis for
rendering the Decision dated November 17, 2009.
More importantly, the NLRC’s findings on the contractual relations between
McBurnie and the respondents are supported by the records.
First, before a case for illegal dismissal can prosper, an employer-employee
relationship must first be established.122 Although an employment agreement
forms part of the case records, respondent Ganzon signed it with the notation
"per my note."123 The respondents have sufficiently explained that the note
refers to the letter124 dated May 11, 1999 which embodied certain conditions
for the employment’s effectivity. As we have previously explained, however,
the said conditions, particularly on the successful completion of the project
financing for the hotel project in Baguio City and McBurnie’s acquisition of an
Alien Employment Permit, failed to materialize. Such defense of the
respondents, which was duly considered by the NLRC in its Decision dated
November 17, 2009, was not sufficiently rebutted by McBurnie.
Second, McBurnie failed to present any employment permit which would have
authorized him to obtain employment in the Philippines. This circumstance
negates McBurnie’s claim that he had been performing work for the
respondents by virtue of an employer-employee relationship. The absence of
the employment permit instead bolsters the claim that the supposed
employment of McBurnie was merely simulated, or did not ensue due to the
non-fulfillment of the conditions that were set forth in the letter of May 11,
1999.
Third, besides the employment agreement, McBurnie failed to present other
competent evidence to prove his claim of an employer-employee relationship.
Given the parties’ conflicting claims on their true intention in executing the
agreement, it was necessary to resort to the established criteria for the
determination of an employer-employee relationship, namely: (1) the
selection and engagement of the employee; (2) the payment of wages; (3) the
power of dismissal; and (4) the power to control the employee’s conduct.125
The rule of thumb remains: the onus probandi falls on the claimant to
establish or substantiate the claim by the requisite quantum of evidence.
Whoever claims entitlement to the benefits provided by law should establish
his or her right thereto.126 McBurnie failed in this regard. As previously
1âwphi1

observed by the NLRC, McBurnie even failed to show through any document
such as payslips or vouchers that his salaries during the time that he
allegedly worked for the respondents were paid by the company. In the
absence of an employer-employee relationship between McBurnie and the
respondents, McBurnie could not successfully claim that he was dismissed,
much less illegally dismissed, by the latter. Even granting that there was such
an employer-employee relationship, the records are barren of any document
showing that its termination was by the respondents’ dismissal of McBurnie.
Given these circumstances, it would be a circuitous exercise for the Court to
remand the case to the NLRC, more so in the absence of any showing that
the NLRC should now rule differently on the case’s merits. In Medline
Management, Inc. v. Roslinda,127 the Court ruled that when there is enough
basis on which the Court may render a proper evaluation of the merits of the
case, the Court may dispense with the time-consuming procedure of
remanding a case to a labor tribunal in order "to prevent delays in the
disposition of the case," "to serve the ends of justice" and when a remand
"would serve no purpose save to further delay its disposition contrary to the
spirit of fair play."128 In Real v. Sangu Philippines, Inc.,129 we again ruled:
With the foregoing, it is clear that the CA erred in affirming the decision of the
NLRC which dismissed petitioner’s complaint for lack of jurisdiction. In cases
such as this, the Court normally remands the case to the NLRC and directs it
to properly dispose of the case on the merits. "However, when there is
enough basis on which a proper evaluation of the merits of petitioner’s case
may be had, the Court may dispense with the time-consuming procedure of
remand in order to prevent further delays in the disposition of the case." "It is
already an accepted rule of procedure for us to strive to settle the entire
controversy in a single proceeding, leaving no root or branch to bear the
seeds of litigation. If, based on the records, the pleadings, and other
evidence, the dispute can be resolved by us, we will do so to serve the ends
of justice instead of remanding the case to the lower court for further
proceedings." x x x.130 (Citations omitted)
It bears mentioning that although the Court resolves to grant the respondents’
motion for reconsideration, the other grounds raised in the motion, especially
as they pertain to insinuations on irregularities in the Court, deserve no merit
for being founded on baseless conclusions. Furthermore, the Court finds it
unnecessary to discuss the other grounds that are raised in the motion,
considering the grounds that already justify the dismissal of McBurnie’s
complaint.
All these considered, the Court also affirms its Resolution dated September 4,
2012; accordingly, McBurnie’s motion for reconsideration thereof is denied.
WHEREFORE, in light of the foregoing, the Court rules as follows:
(a) The motion for reconsideration filed on September 26, 2012 by petitioner
Andrew James McBurnie is DENIED;
(b) The motion for reconsideration filed on March 27, 2012 by respondents
Eulalio Ganzon, EGI-Managers, Inc. and E. Ganzon, Inc. is GRANTED.
(c) The Entry of Judgment issued in G.R. Nos. 186984-85 is LIFTED. This
Court’s Decision dated September 18, 2009 and Resolutions dated
December 14, 2009 and January 25, 2012 are SET ASIDE. The Court of
Appeals Decision dated October 27, 2008 and Resolution dated March 3,
2009 in CA-G.R. SP No. 90845 and CA-G.R. SP No. 95916 are AFFIRMED
WITH MODIFICATION. In lieu of a remand of the case to the National Labor
Relations Commission, the complaint for illegal dismissal filed by petitioner
Andrew James McBurnie against respondents Eulalio Ganzon, EGI-
Managers, Inc. and E. Ganzon, Inc. is DISMISSED.
Furthermore, on the matter of the filing and acceptance of motions to reduce
appeal bond, as provided in Section 6, Rule VI of the 2011 NLRC Rules of
Procedure, the Court hereby RESOLVES that henceforth, the following
guidelines shall be observed:
(a) The filing o a motion to reduce appeal bond shall be entertained by the
NLRC subject to the following conditions: (1) there is meritorious ground; and
(2) a bond in a reasonable amount is posted;
(b) For purposes o compliance with condition no. (2), a motion shall be
accompanied by the posting o a provisional cash or surety bond equivalent to
ten percent (10,) of the monetary award subject o the appeal, exclusive o
damages and attorney's fees;
(c) Compliance with the foregoing conditions shall suffice to suspend the
running o the 1 0-day reglementary period to perfect an appeal from the labor
arbiter's decision to the NLRC;
(d) The NLRC retains its authority and duty to resolve the motion to reduce
bond and determine the final amount o bond that shall be posted by the
appellant, still in accordance with the standards o meritorious grounds and
reasonable amount; and
(e) In the event that the NLRC denies the motion to reduce bond, or requires
a bond that exceeds the amount o the provisional bond, the appellant shall be
given a fresh period o ten 1 0) days from notice o the NLRC order within
which to perfect the appeal by posting the required appeal bond.
SO ORDERED.
BIENVENIDO L. REYES
Associate Justice

[G.R. NO. 153942 : June 29, 2005]

SAMEER OVERSEAS PLACEMENT AGENCY, INC., Petitioner, v. NOE
LEVANTINO, IDG HUMAN RESOURCES, INC.,
(Formerly IDG TRADING AND GENERAL SERVICES, INC.), Respondents.
DECISION
 TINGA, J.:
Petitioner Sameer Overseas Placement Agency, Inc. (Sameer) is engaged in
the recruitment and placement of Philippine Overseas Contract Workers, and
duly licensed for that purpose by the Department of Labor and Employment
and the Philippine Overseas Employment Administration (POEA).1
A complaint for illegal dismissal, underpayment of wages, and illegal
deductions was filed by respondent Noe Levantino (Levantino). Hired and
deployed by Sameer for and in behalf of its foreign principal, Arabian Fal Co.,
on 20 July 1994,2 Levantino's contract provided that his office employment
was for twelve (12) months and fixed his basic monthly salary at Two Hundred
Seventy-Seven US Dollars (US$277.00). However, upon his arrival at the job
site on 21 July 1994, Levantino was made to sign another contract of
employment, this time with the basic monthly salary of Six Hundred Seventy-
Nine Saudi Rial (SR679.00), plus One Hundred Eighty Saudi Rial (SR180.00) as
food allowance.
On 4 January 1995, barely six (6) months after the start of his employment,
Levantino was terminated by the foreign employer and subsequently
repatriated to the Philippines. He filed on 7 February 1995 the aforementioned
complaint with the POEA.
Sameer filed a third-party complaint against IDG Human Resources, Inc.
(IDG), alleging that IDG should be held liable for the claims of Levantino since
Sameer's accreditation for foreign principal, Arabian Fal Co., had already been
transferred to IDG pursuant to an affidavit of assumption of responsibility and
quitclaims.3
The Labor Arbiter Jovencio Ll. Mayor, Jr., in a Decision dated 22 September
1997, ruled that Levantino was terminated for just or authorized cause, the
employee having been unable to rebut the allegations raised against him of
poor habits, disobedience of superiors, and low productivity.4 He concluded,
however, that Levantino was not paid his basic salary in accordance with his
POEA approved contract of employment of Two Hundred Seventy-Seven US
Dollars (US$277.00), and illegal deductions were made by the foreign
employer from the basic monthly salary for the food allowance. Thus, the
Labor Arbiter held that Levantino was entitled to a wage differential of Five
Hundred Seventy-Five US Dollars and Sixty Cents (US$575.60), and attorney's
fees of Fifty-Seven US Dollars and Fifty-Six Cents (US$57.56). The Labor
Arbiter likewise held that Sameer and IDG were jointly and severally liable to
pay Levantino, citing the case of Mars International Manpower, Inc. v. NLRC.5
The dispositive portion reads:
PREMISES CONSIDERED, respondents Sameer Overseas Placement Agency,
Inc. and IDG Trading & General Services are hereby ordered to pay jointly and
severally complainant herein the amount of SIX HUNDRED THIRTY-THREE US
DOLLARS and 16/100 (US$633.16) or its peso equivalent as discussed above.
SO ORDERED.6
Having received a copy of the decision on 17 October 1997, Sameer had until
28 October 1997 to perfect the appeal, 27 October falling on a Sunday. It filed
its notice of appeal and a memorandum of appeal on 27 October 1997, along
with a motion for extension of time to file a surety-appeal bond, alleging that it
was still arranging for the issuance of such with the bonding company. It was
only on 3 November 1997 that it filed the appeal bond.7 Thus, the National
Labor Relations Commission (NLRC) First Division, in an Order dated 16 June
1998, dismissed the appeal for failure to perfect it within the ten (10)-day
reglementary period. The Court of Appeals Sixteenth Division affirmed the
dismissal by the NLRC; hence, the present petition.
Before this Court, Sameer argues that since it subsequently submitted the
appeal bond, the filing of the bond should retroact to the date of the filing of
the motion for reduction, which had been filed within the reglementary period
to perfect the appeal. It characterizes the appeal bond requirement as
procedural, and urges that the case be decided on the merits. It also claims
that its late filing of the appeal bond does not damage or prejudice Levantino
or the government, as its late filing complies with the purpose of the law to
guarantee the monetary award in favor of the plaintiff once it becomes final
and executory.8
These arguments aside, it is indisputable that the Labor Code is explicit in
providing that the appeal from a decision of the Labor Arbiter must be
perfected within ten (10) days, and that such appeal is perfected only upon the
posting of a cash or surety bond.
ART 223. Appeal. - Decisions, awards or orders of the Labor Arbiter are final
and executory unless appealed to the Commission by any or both parties
within ten (10) calendar days from receipt of such decisions, awards, or
orders. . .
In case of a judgment involving a monetary award, an appeal by the
employer may be perfected only upon the posting of a cash or surety
bond issued by a reputable bonding company duly accredited by the
Commission in the amount equivalent to the monetary award in the judgment
appealed from. (Emphasis supplied.)
Contrary to Sameer's suggestion, the appeal bond requirement is not merely
procedural but jurisdictional, for without it, the NLRC does not acquire
jurisdiction over the appeal.9 Applying the express provisions of the law, the
NLRC did not acquire jurisdiction over Sameer's appeal within the ten (10)-day
reglementary period to perfect the appeal, for the appeal bond was filed was
filed six (6) days after the lapse of the reglementary period.
True enough, the Court has recognized leeway in the relaxation of this
requirement, and even the NLRC Rules of Procedure authorizes, upon
justifiable causes, the reduction of the appeal bond. Yet the overpowering
legislative intent of Article 223 remains a strict application of the appeal bond
requirement as a requisite for the perfection of an appeal and as a burden
imposed on the employer. As the Court held recently, thus:
The intention of the lawmakers to make the bond an indispensable requisite for
the perfection of an appeal by the employer is underscored by the provision
that an appeal by the employer may be perfected only upon the posting of a
cash or surety bond. The word "only" makes it perfectly clear that the
lawmakers intended the posting of a cash or surety bond by the employer to
be the exclusive means by which an employer's appeal may be perfected.10
Even the NLRC Rules of Procedure plainly expects that the employer submit
the entire cash or surety bond within the reglementary period, even if there
may be cause for its subsequent reduction, to wit:
RULE VI. APPEALS
....
Section 3. Requisites for Perfection of Appeal. '(a) The appeal shall be filed
within the reglementary period as provided in Section 1 of this Rule; shall be
under oath with proof of payment of the required appeal fee and the posting
of a cash or surety bond as provided in Section 5 of this Rule; shall be
accompanied by a memorandum of appeal which shall state the grounds relied
upon and the arguments in support thereof; the relief prayed for; and a
statement of the date when the appellant received the appealed decision, order
or award and proof of service on the other party of such appeal.
A mere notice of appeal without complying with the other requisite
aforestated shall not stop the running of the period for perfecting an
appeal.
....
Section 6. Bond. 'In case the decision of the Labor Arbiter, the Regional
Director or his duly authorized Hearing Officer involves a monetary award, an
appeal by the employer shall be perfected only upon the posting of a cash or
surety bond, which shall be in effect until final disposition of the case, issued
by a reputable bonding company duly accredited by the Commission or the
Supreme Court in an amount equivalent to the monetary award, exclusive of
damages and attorney's fees.
The employer, his counsel, as well as the bonding company, shall submit a
joint declaration under oath attesting that the surety bond posted is genuine.
The Commission may, in justifiable cases and upon Motion of the
Appellant, reduce the amount of the bond. The filing of the motion to
reduce bond shall not stop the running of the period to perfect appeal.11
(Emphasis supplied.)
The provisions being as they are, we cannot fault the NLRC with grave abuse
of discretion, or the Court of Appeals with reversible error of law in refusing to
take cognizance of Sameer's belatedly perfected appeal.
There is nothing peculiar or extraordinary in the factual milieu that obtains
reversal of the assailed decisions. Had Sameer been inclined to diligently
comply with the requisites of appeal, as plainly stated in the Labor Code, it
could have, as early as 17 October 1998, undertaken steps to procure the
appeal bond. There is nothing in the period between 17 October 1998 and 28
October 1998 that suggests innate difficulty in obtaining the said bond. In fact,
Sameer, who submitted the bond only on 3 November 1998, probably incurred
further delay in submitting the appeal bond due to the early November
holidays, though such fact is of no moment considering that these holidays
came only after the lapse of the reglementary period.
Nor should have there been eminent difficulty in obtaining the said bond,
considering that the amount of the monetary judgment, Six Hundred Thirty-
Three U.S. Dollars and Sixteen Cents (US$633.16), is relatively miniscule. It is
not even expected that Sameer itself expends from its own funds the entire
amount of the monetary judgment for the appeal bond. As the Court noted in
Biogenerics Marketing and Research Corporation v. NLRC:12
. . . The mandatory filing of a bond for the perfection of an appeal is evident
from the aforequoted provision that the appeal may be perfected only upon the
posting of cash or surety bond. It is not an excuse that the over P2 million
award is too much for a small business enterprise, like the petitioner company,
to shoulder. The law does not require its outright payment, but only the
posting of a bond to ensure that the award will be eventually paid
should the appeal fail. What petitioners have to pay is a moderate and
reasonable sum for the premium for such bond.13 (Emphasis
supplied.)ςηαñrοblεš νιr†υαl lαω lιbrαrÿ

Sameer stressed that it already had a total of Three Hundred Thousand Pesos
(P300,000.00) posted as bonds with the POEA, in conformity with POEA Rules
and Regulations. Yet to the Court's mind, the appellate court's comments on
this point are sufficiently responsive:
Petitioner lays emphasis on its compliance with the POEA Rules and
Regulations with regard to the posting of the cash and surety bonds and
escrow deposit which amounted to P350,000.00. However, while it is true that
the cash and surety bonds and the money placed in escrow are supposed to
guarantee the payment of all valid and legal claims against the employer, the
POEA can also go against these bonds for violations by the recruiter of the
conditions of its license, the provisions of the Labor Code and its implementing
rules, E.O. 247 (reorganizing the POEA) and the POEA Rules, as well as the
settlement of other liabilities the recruiter may incur. Thus, the bonds posted
with the POEA are not limited to answer for monetary awards to employees
whose contracts of employment have been violated.14
The remaining arguments posed by Sameer pertain to the merits of the case,
i.e., on whether it could be held jointly and severally liable with IDG
considering that it was no longer the agent of the foreign employer. We do not
wish to belabor any discussion on this point, considering that it has passed
evaluation on three prior levels of review; but as with the Court of Appeals, we
agree that such ruling is supported by jurisprudence. In support of the holding
on Sameer's liability, the Labor Arbiter cited the Court's ruling in ABD Overseas
Manpower Corp. v. NLRC.15 We have reviewed the citation, and find its
application to the present case seemly. The Court therein accorded premium to
the fact that it had been the previous local recruitment agency of the foreign
employer who had contracted with the complainant therein, and that the POEA
Rules on the assumption by the transferee agency of the contractual
obligations of the principal cannot be used as a shield against liability. Similarly
in this case, it was Sameer, not IDG, which had contracted with Levantino, and
guaranteed the wages which were not eventually paid to the employer, and it
does not run contrary to justice that Sameer be absolved from liability to
Levantino.
However, whatever merit Sameer's case may have had, it cannot escape the
fact that it inexcusably failed to perfect its appeal within the mandated
reglementary period, and thus should suffer the consequences for such failure.
We cannot respond with alacrity to every clamor of injustice and bend the rules
to placate a vociferous protestor crying and claiming to be a victim of a wrong.
It is only in highly meritorious cases that this Court opts not to strictly apply
the rules and thus prevent a grave injustice from being done.16 This is not one
of those cases.
WHEREFORE, the Petition is DENIED. Costs against petitioner.

[G.R. NO. 152550 : June 8, 2005]

 BORJA ESTATE AND/OR THE HEIRS OF MANUEL AND
PAULA BORJA and ATTY. MILA LAUIGAN IN HER
CAPACITY AS THE ESTATE ADMINISTRATOR,
Petitioners, v. SPOUSES ROTILLO BALLAD and ROSITA
BALLAD, Respondents.
DECISION
TINGA, J.:
In this Petition for Review 1 under Rule 45 of the Rules of
Court, petitioners Borja Estate and/or the Heirs of Manuel
and Paula Borja and Atty. Mila Lauigan, in her capacity as
the estate administrator (the Borjas) assail the Resolution2
of the Court of Appeals Thirteenth Division denying their
motion for reconsideration and the DECISION 3 of the same
division in CA-G.R. SP No. 60700, the dispositive portion of
which states:
WHEREFORE, foregoing considered, the assailed
Resolutions dated April 14, 2000 and May 31, 2000 are
hereby AFFIRMED in toto. The present petition is hereby
DISMISSED for lack of merit.
SO ORDERED.4
The above ruling of the Court of Appeals affirmed the
Resolution5 of the National Labor Relations Commission
(NLRC), the decretal portion of which reads:
WHEREFORE, premises considered, respondents' Motion
for Reduction of Bond is hereby DISMISSED for lack of
merit.
The instant Appeal is hereby DISMISSED for failure to post
a cash or surety bond within the reglementary period.
SO ORDERED.6
The Borjas's motion for reconsideration of the above-quoted
NLRC Resolution was likewise dismissed in another
Resolution.7
As the Borjas's appeal was not given due course, the Labor
Arbiter's DECISION 8 was in effect affirmed, the dispositive
portion of which states:
WHEREFORE, with all the foregoing considerations,
judgment is hereby rendered declaring the Spouses Rotillo
and Rosita Ballad as illegally and unjustly dismissed in a
whimsical and capricious manner which is oppressive to
labor and respondents are jointly and severally ordered to
reinstate complainants to their position as overseers without
loss of seniority rights with full backwages, allowances and
other benefits, computed as of the promulgation of this
decision, as follows:
1.
P25,245.00
- Backwages, June to October 30, 1999

x2
(P166 x 365 over 12 x 5 months)

P50,490.00
Backwages for both complainants
2.
P 5,0490.00
' 13th month pay x 3 years

P15,147.00

x2

P30,294.00
- 13th month pay for both complainants
3.
P100,000.00
- Moral damages, for both complainants
4.
P50,000.00
' Exemplary damages, for both complainants

P230,784.00
5.
P272,646.00
- Separation pay, in case reinstatement is no longer
feasible(P5049 x 27 years x 2 for both complainants)
6.
Money equivalent of 12 cavans of shelled corn per harvest,
transportations expenses, allowances and other benefits
being enjoyed as overseers from the time these were
withheld from them until actual payment, to be computed
in the pre-execution hearing.
7.
Plus one percent interest per month and ten percent
attorney's fees. All other claims are hereby dismissed.
SO ORDERED.9
The case arose out of the complaint filed by private
respondents Spouses Rotillo and Rosita Ballad (Ballad
spouses) against the Borjas for illegal dismissal, non
payment of 13th month pay, separation pay, incentive pay,
holiday and premiums pay plus differential pay, and moral
and exemplary damages with the Regional Arbitration
Branch No. II of the NLRC in Tuguegarao, Cagayan, on 8
June 1999.10
The Ballad spouses had been employed as overseers of the
Borja Estate by its owners, the spouses Manuel Borja and
Paula Borja, since 1972. Their appointment as such was
later made in writing per the certification of appointment
issued by Paula Borja.11
The Borja Estate comprises around two hundred (200)
hectares of agricultural lands located in the towns of Iguig,
Amulung, Enrile, Solana and Baggao, Cagayan Province. It
includes two apartment buildings consisting of eleven doors
for rent, both located at Caritan, Tuguegarao, Cagayan.12
As overseers, the Ballad spouses' duties included the
collection of owner's share of the harvest from the tenants
and the delivery of such share to the estate administrator,
as well as to account for it. They also collected monthly
rentals from the lessees of the apartment and tendered the
same to the administrator. They were tasked to oversee
the lands and buildings entrusted to them and were
instructed to report any untoward incident or incidents
affecting said properties to the administrator. They were
allegedly required to work all day and night each week
including Saturdays, Sundays and holidays.13
For their compensation, the Ballad spouses received a
monthly salary of P1,000.00 for both of them, or P500.00
each. They were provided residential quarters plus food
and traveling allowances equivalent to twelve (12) cavans
of shelled corn every crop harvest.14 In the year 1980, said
salary was increased to P2,500.00 for each of them by
Paula Borja when she came from abroad. Until the time
before their dismissal, the Ballad spouses received the
same amount.15
The Ballad spouses further alleged that they were
appointed as the attorney-in-fact of the owners to
represent the latter in courts and/or government offices in
cases affecting the titling of the Borjas' unregistered lands,
and to institute and prosecute recovery of possession
thereof, as well as in ejectment cases.16
They narrated that when the spouses Manuel and Paula
Borja went to the United States of America, their children
Lumen, Leonora and Amelia succeeded to the ownership
and management of the Borja Estate. On 16 October 1986,
the Ballad spouses claimed that Amelia or Mely, then
residing in Rochester, New York, wrote then administrator
Mrs. Lim informing her that the heirs had extended the
services of the Ballad spouses and ordered Mrs. Lim to pay
the hospitalization expenses of Rotillo Ballad which accrued
to Ten Thousand Pesos (P10,000.00). It is also alleged that
Mely had instructed Mrs. Lim to cause the registration of
the Ballad spouses as Social Security System (SSS)
members so that in case any of the latter gets sick, SSS
will shoulder their medical expenses and not the Borjas.17
On 10 November 1996, according to the Ballad spouses,
when Francisco Borja, brother of the late Manuel Borja,
was appointed the new administrator, he issued
immediately a memorandum to all the tenants and lessees
of the Borja Estate to transact directly with him and to pay
their monthly rentals to him or to his overseers, the Ballad
spouses.18
Upon his appointment, Francisco Borja allegedly promised
to give the Ballad spouses their food and traveling
allowances aforestated but not the twelve (12) cavans per
harvest which he reduced to two (2) cavans per harvest.
Francisco Borja also stopped giving the Ballad spouses
their allowances. For twenty-seven (27) years that the
Ballad spouses were in the employ of the Borjas they were
purportedly not paid holiday pay, overtime pay, incentive
leave pay, premiums and restday pay, 13th month pay,
aside from the underpayment of their basic salary.19
In June 1999, the Ballad spouses alleged that Francisco
Borja unceremoniously dismissed them and caused this
dismissal to be broadcast over the radio, which caused the
former to suffer shock and physical and mental injuries
such as social humiliation, besmirched reputation,
wounded feelings, moral anxiety, health deterioration and
sleepless nights.20
Thus, the filing of a case against petitioners before the
Labor Arbiter. The Borjas interposed the defense that
respondents had no cause of action against them because
the latter were not their employees. The Borjas insisted
that the Ballad spouses were allowed to reside within the
premises of the Borja Estate only as a gesture of gratitude
for Rosita Ballad's assistance in the registration of a parcel
of land; and that they were merely utilized to do some
errands from time to time. As to the money claims, the
Borjas claimed the defense of prescription.21
As aforestated, the Labor Arbiter ruled that the Ballad
spouses had been illegally dismissed, after concluding that
they had been employees of the Borjas.22
Aggrieved by the decision, the Borjas filed their appeal on
26 November 1999 before the NLRC together with a Motion
for Reduction of Bond.23
In a Resolution dated 14 April 2000, the NLRC dismissed
the petitioners' Motion for Reduction of Bond. Petitioners'
appeal was likewise dismissed in the same Resolution for
failure to post a cash or surety bond within the
reglementary period.24 Petitioners' Motion for
Reconsideration was also denied for lack of merit in
another Resolution.25
Petitioners elevated the case to the Court of Appeals by
way of a special civil action of certiorari. On 31 October
2001, the Court of Appeals affirmed the Resolutions of the
NLRC holding that the filing of a cash or surety bond is sine
qua non to the perfection of appeal from the labor
monetary's award.
The Court of Appeals noted that the Borjas received a copy
of the Labor Arbiter's DECISION 26 on 18 November 1999.
They thereafter filed their Notice of Appeal and Appeal on
26 November 1999. On even date, they also filed a Motion
for Reduction of Bond. However, no proof was shown that
the Borjas were able to post the required bond during the
same period of time to appeal.27
The Court of Appeals observed that petitioners were able
to post a bond only on 17 December 1999 in the amount of
Forty Thousand Pesos (P40,000.00) when the same should
have been done during the same period of appeal. As this
was not done and as no justifiable reason was given for the
late filing, the Court of Appeals ruled that the decision of
the Labor Arbiter had become final and executory.28
The Court of Appeals likewise relied on the Labor Arbiter's
finding that the Ballad spouses were employees of the
petitioners.29
Hence, the instant petition.
In this petition, petitioners in essence assert that the Court
of Appeals erred in agreeing with the NLRC that the posting
of a cash or surety bond during the period of time to file an
appeal is mandatory and the failure to do so would have
the effect of rendering the appealed decision final and
executory. Petitioners further insist that they never hired
the Ballad spouses as employees.30
In a Resolution31 dated 24 April 2002, the Court initially
resolved to deny the petition for failure of the petitioners to
show any reversible error in the decisions and resolution of
the Labor Arbiter, the NLRC and the Court of Appeals.
However, the Court in a Resolution32 dated 11 November
2002 decided to reinstate the petition after considering
petitioners' arguments contained in their Motion for
Reconsideration,33 in which the Borjas stressed that the
only issue sought to be resolved by their Petition is the
correct interpretation of the rule requiring the posting of a
bond for the perfection of an appeal. They implored the
Court to contrive a definitive ruling on the matter which in
their estimation has sowed confusion among practitioners
as well as to those exercising quasi-judicial and judicial
functions.34
There is no merit in the petition.
The appeal bond is required under Article 223 of the Labor
Code which provides:
ART. 223. Appeal. - Decisions, awards or orders of the
Labor Arbiter are final and executory unless appealed to
the Commission by any or both parties within ten (10)
calendar days from receipt of such decisions, awards, or
orders. . . .
In case of a judgment involving a monetary award, an
appeal by the employer may be perfected only upon the
posting of a cash or surety bond issued by a reputable
bonding company duly accredited by the Commission, in
the amount equivalent to the monetary award in the
judgment appealed from.
....
Rule VI of the New Rules of Procedure of the NLRC
implements this Article with its Sections 1, 3, 5, 6 and 7
providing pertinently as follows:
Section. 1. Periods of Appeal. - Decisions, awards, or
orders of the Labor Arbiter and the POEA Administrator
shall be final and executory unless appealed to the
Commission by any or both parties within ten (10) calendar
days from receipt of such decisions, awards or orders of
the Labor Arbiter or of the Administrator, and in case of a
decision of the Regional Director or his duly authorized
Hearing Officer within five (5) calendar days from receipt
of such decisions, awards or orders . . .
Section 3. Requisites for Perfection of Appeal. '(a) The
appeal shall be filed within the reglementary period as
provided in Sec. 1 of this Rule; shall be under oath with
proof of payment of the required appeal fee and the
posting of a cash or surety bond as provided in Sec. 5 of
this Rule; shall be accompanied by memorandum of appeal
which shall state the grounds relied upon and the
arguments in support thereof; the relief prayed for; and a
statement of the date when the appellant received the
appealed decision, order or award and proof of service on
the other party of such appeal.
A mere notice of appeal without complying with the other
requisite aforestated shall not stop the running of the
period for perfecting an appeal.
Section 5. Appeal Fee. 'The appellant shall pay an appeal
fee of One hundred (P100.00) pesos to the Regional
Arbitration Branch, Regional Office, or to the Philippine
Overseas Employment Administration and the official
receipt of such payment shall be attached to the records of
the case.
Section 6. Bond. 'In case the decision of the Labor Arbiter,
the Regional Director or his duly authorized Hearing Officer
involves a monetary award, an appeal by the employer
shall be perfected only upon the posting of a cash or surety
bond, which shall be in effect until final disposition of the
case, issued by a reputable bonding company duly
accredited by the Commission or the Supreme Court in an
amount equivalent to the monetary award, exclusive of
damages and attorney's fees.
....
The Commission may, in justifiable cases and upon Motion
of the Appellant, reduce the amount of the bond. The filing
of the motion to reduce bond shall not stop the running of
the period to perfect appeal.
Section 7. No extension of Period. - No motion or request
for extension of the period within which to perfect an
appeal shall be allowed.
Thus, it is clear from the foregoing that the appeal from
any decision, award or order of the Labor Arbiter to the
NLRC shall be made within ten (10) calendar days from
receipt of such decision, award or order, and must be
under oath, with proof of payment of the required appeal
fee accompanied by a memorandum of appeal. In case the
decision of the Labor Arbiter involves a monetary award,
the appeal is deemed perfected only upon the posting of a
cash or surety bond also within ten (10) calendar days
from receipt of such decision in an amount equivalent to
the monetary award.35 chanrobles virtual law library

The intention of the lawmakers to make the bond an

indispensable requisite for the perfection of an appeal by
the employer is underscored by the provision that an
appeal may be perfected "only upon the posting of a cash
or surety bond." The word "only" makes it perfectly clear
that the lawmakers intended the posting of a cash or
surety bond by the employer to be the exclusive means by
which an employer's appeal may be considered
completed.36 The law however does not require its outright
payment, but only the posting of a bond to ensure that the
award will be eventually paid should the appeal fail. What
petitioners have to pay is a moderate and reasonable sum
for the premium of such bond.37
The word "may", on the other hand refers to the perfection
of an appeal as optional on the part of the defeated party,
but not to the posting of an appeal bond, if he desires to
appeal.38
Evidently, the posting of a cash or surety bond is
mandatory. And the perfection of an appeal in the manner
and within the period prescribed by law is not only
mandatory but jurisdictional.39 To extend the period of the
appeal is to delay the case, a circumstance which would
give the employer the chance to wear out the efforts and
meager resources of the worker to the point that the latter
is constrained to give up for less than what is due him.40 As
ratiocinated in the case of Viron Garments Mftg. v. NLRC:41
The requirement that the employer post a cash or surety
bond to perfect its/his appeal is apparently intended to
assure the workers that if they prevail in the case, they will
receive the money judgment in their favor upon the
dismissal of the employer's appeal. It was intended to
discourage employers from using an appeal to delay, or
even evade, their obligation to satisfy their employees' just
and lawful claims.42
In the case at bar, while the petitioners' Appeal
Memorandum and Motion for Reduction of Bond, which was
annexed thereto, were both filed on time,43 the appeal was
not perfected by reason of the late filing and deficiency of
the amount of the bond for the monetary award with no
explanation offered for such delay and inadequacy.
As there was no appeal bond filed together with the Appeal
Memorandum within the ten (10)-day period provided by
law for the perfection of appeal, it follows that no appeal
from the decision of the Labor Arbiter had been
perfected.44 Accordingly, the Decision of the Labor Arbiter
became final and executory upon the expiration of the
reglementary period.
While it is true that this Court has relaxed the application
of the rules on appeal in labor cases, it has only done so
where the failure to comply with the requirements for
perfection of appeal was justified or where there was
substantial compliance with the rules. Hence, the Supreme
Court has allowed tardy appeals in judicious cases, e.g.,
where the presence of any justifying circumstance
recognized by law, such as fraud, accident, mistake or
excusable negligence, properly vested the judge with
discretion to approve or admit an appeal filed out of time;
where on equitable grounds, a belated appeal was allowed
as the questioned decision was served directly upon
petitioner instead of her counsel of record who at the time
was already dead;45 where the counsel relied on the
footnote of the notice of the decision of the labor arbiter
that the aggrieved party may appeal . . . within ten (10)
working days; in order to prevent a miscarriage of justice
or unjust enrichment such as where the tardy appeal is
from a decision granting separation pay which was already
granted in an earlier final decision; or where there are
special circumstances in the case combined with its legal
merits or the amount and the issue involved.46
Here, no justifiable reason was put forth by the petitioners
for the non-filing of the required bond, or the late filing of
the defective bond for that matter as in fact the bond they
filed late on 17 December 1999 in the amount of Forty
Thousand Pesos (P40,000.00) was not even equivalent to
the reduced amount of bond they prayed for in their Motion
for Reduction of Bond.47 The Court then is not prepared to
hold that the petitioners' Motion for Reduction of Bond was
substantial compliance with the Labor Code for failure to
demonstrate willingness to abide by their prayer in said
Motion.
In addition, no exceptional circumstances obtain in the
case at bar which would warrant the relaxation of the bond
requirement as a condition for perfecting the appeal.
It bears stressing that the bond is sine qua non to the
perfection of appeal from the labor arbiter's monetary
award. The requirements for perfecting an appeal must be
strictly followed as they are considered indispensable
interdictions against needless delays and for orderly
discharge of judicial business. The failure of the petitioners
to comply with the requirements for perfection of appeal
had the effect of rendering the decision of the labor arbiter
final and executory and placing it beyond the power of the
NLRC to review or reverse it. As a losing party has the
chanrobles virtual law library

right to file an appeal within the prescribed period, so also

the winning party has the correlative right to enjoy the
finality of the resolution of his/her case.48
WHEREFORE, in view of the foregoing considerations, the
petition is DENIED for lack of merit. Costs against
petitioners.
SO ORDERED.
Austria-Martinez, (Acting Chairman), Callejo, Sr., and
Chico-Nazario, JJ., concur.
Puno, (Chairman), on official leave.

[G.R. NO. 152410 : June 29, 2005]

COMPUTER INNOVATIONS CENTER/NELSON YU
QUILOS, Petitioners, v. NATIONAL LABOR RELATIONS
COMMISSION and REYNALDO C. CARIÑO,
Respondents.
DECISION
TINGA, J.:
The facts underlying the present Petition for Review, as
culled from the assailed DECISION 1 of the Court of
Appeals, are uncomplicated. Private respondent Reynaldo
Cariño (Cariño) was hired in September of 1995 by
petitioner Computer Innovations Center (CIC) as Instructor
of Computer Technical Course.2 He was promoted to Head
of the Education Department of CIC in May of 1997.
On 26 March 1998, Cariño received a call from petitioner
Nelson Yu Quilos (Quilos) of CIC, who advised Cariño to
resign from his position. Two days later, on 28 March
1998, Quilos met Cariño at the company's technician's
laboratory and informed the latter that his services with
the company should cease by 31 March 1998. Aggrieved,
Cariño lodged a complaint for illegal dismissal against CIC
 and Quilos with the National Labor Relations Commission
(NLRC) Regional Arbitration Branch in Davao City.3
According to CIC, it received reports from its employees
regarding Cariño's purported unprofessional conduct,
adverting to a general lack of interpersonal skills and
moonlighting activities which conflicted with the interest of
CIC. It was alleged that Cariño had admitted to his
moonlighting activities during the meeting of 28 March
1998, and had refused a promotion offered by CIC
conditioned on his termination of involvement with other
computer schools. Instead, as claimed by CIC, Cariño
announced during the said meeting that he would resign
from CIC, reporting for work only until 31 March 1998.4
On 29 August 1999, Labor Arbiter Newton R. Sancho
rendered a DECISION concluding that Cariño had been
illegally dismissed, and ordering petitioners to pay the
amount of Two Hundred Twenty Thousand Six Hundred
Sixty Six Pesos and Sixty Six Centavos (P220,666.66)
representing backwages, separation pay, and thirteenth
(13th) month pay.5
A copy of the Decision was received by petitioners on 5
November 1999. On 15 November 1999, they filed a Notice
of Appeal dated 12 November 1999 before the NLRC
Regional Arbitration Branch, Davao City, attaching thereto
a Memorandum on Appeal.6 The Memorandum on Appeal
was also filed before the NLRC Fifth Division, Cagayan de
Oro City. They also posted a bond of Ten Thousand Pesos
(P10,000.00), a sum that is evidently nowhere near the
sum of the award made by the Labor Arbiter. However, in
their Memorandum of Appeal, petitioners had requested a
reduction of the cash or surety bond to Ten Thousand
Pesos (P10,000.00). The cited ground for the reduction of
the appeal bond was the purportedly great possibility of
the reversal of the Labor Arbiter's DECISION in light of the
serious errors in the findings of fact and application of law
as well as the harshness and unfounded nature of the
award.7
 In a Resolution dated 29 June 2000, the NLRC Fifth
Division denied the motion for reduction of appeal bond
and dismissed the appeal on the ground of "non-
perfection." The NLRC ruled that "the mere perception
[that] the appealed decision would be reversed on appeal
[did] not justify the reduction of the required appeal
bond."8 The NLRC mistakenly noted that petitioners had
not even posted the desired reduced bond. Petitioners
moved for reconsideration, citing among others, that they
had posted the reduced bond of Ten Thousand Pesos
(P10,000.00). The NLRC, while acknowledging the filing of
the reduced bond, still denied the motion for
reconsideration, noting that the appeal could only be
perfected once petitioners had posted the appeal bond
equivalent to the monetary award. The NLRC pithily noted
that "the posting by the [petitioners] of the cash bond of
P10,000.00 means nothing, as it is lesser [than] that what
was required by them."9
The dismissal of the appeal was elevated to the Court of
Appeals by way of petition for certiorari. The Court of
Appeals Seventh Division promptly rendered a DECISION
dated 19 September 2001 affirming the NLRC. The
appellate court found no fault on the part of the NLRC in
denying the appeal, as the statutory requirement
pertaining to the appeal bond had not been met. The
appellate court further noted that petitioners could have
exhibited good faith in attempting to comply with the
dictates of the law by filing a motion for leave to admit
belated additional bond after the initial resolution denying
their appeal, yet this was not done by petitioners.
Before this Court, petitioners insist that they had complied
with all the requirements for perfecting an appeal,
including the posting of a cash bond, albeit at a reduced
amount. Citing Star Angel Handicraft v. NLRC,10 they allege
a distinction between the filing of an appeal within the
reglementary period and its perfection, in that while the
filing of the appeal must be done within the ten (10)-day
 reglementary period, its perfection may be accomplished
after the said period. They argue that their appeal should
have been deemed perfected upon the posting of the
insufficient bond. Petitioners likewise claim that they had
not been afforded the opportunity to ventilate their side of
the controversy before the Labor Arbiter, as they were not
properly notified regarding the submission of the required
Position Paper.
On the other hand, respondent Cariño takes the high road
and suggests that he is amenable to having petitioners
instead post the bond corresponding to the full amount
awarded to him by the Labor Arbiter.11 The suggestion is
cavalier, but unnecessary, owing to the patent untenability
of the position of petitioners.
Exceptions aside, the provisions of the Labor Code are
quite clear-cut on the matter. The relevant portion of
Article 223 states:
ART 223. Appeal. - Decisions, awards or orders of the
Labor Arbiter are final and executory unless appealed to
the Commission by any or both parties within ten
(10) calendar days from receipt of such decisions,
awards, or orders. . . .
In case of a judgment involving a monetary award, an
appeal by the employer may be perfected only upon
the posting of a cash or surety bond issued by a
reputable bonding company duly accredited by the
Commission in the amount equivalent to the monetary
award in the judgment appealed from. (Emphasis
Supplied)
By explicit provision of law, an appeal is perfected only
upon the posting of a cash or surety bond. The
requirement for posting the surety bond is jurisdictional
and cannot be trifled with.12 The word "only" makes it
perfectly clear that the lawmakers intended the posting of
a cash or surety bond by the employer to be the exclusive
means by which an employer's appeal may be perfected.13
As evinced by the language of Article 223, the posting of
 such bond is required before the NLRC can acquire
jurisdiction over the employer's appeal. Petitioners concede
this point,14 yet in the next breath invoke the doctrine that
"the dismissal of an appeal on purely technical ground is
frowned upon."15 Invocation of this rule as a means of
argument against the strict imposition of the cash bond
requirement is off-base, considering Article 223.
The NLRC Rules of Procedure reaffirms the explicit
jurisdictional principle in Article 223, even as it allows in
justifiable cases, the reduction of the appeal bond. The
relevant provisions state:
RULE VI.
APPEALS
....
Section 3. Requisites for Perfection of Appeal. '(a) The
appeal shall be filed within the reglementary period as
provided in Section 1 of this Rule; shall be under oath with
proof of payment of the required appeal fee and the
posting of a cash or surety bond as provided in Section
5 of this Rule; shall be accompanied by a memorandum of
appeal which shall state the grounds relied upon and the
arguments in support thereof; the relief prayed for; and a
statement of the date when the appellant received the
appealed decision, order or award and proof of service on
the other party of such appeal.
A mere notice of appeal without complying with the
other requisite aforestated shall not stop the running
of the period for perfecting an appeal.
....
Section 6. Bond. 'In case the decision of the Labor Arbiter,
the Regional Director or his duly authorized Hearing Officer
involves a monetary award, an appeal by the employer shall
be perfected only upon the posting of a cash or surety bond,
which shall be in effect until final disposition of the case,
issued by a reputable bonding company duly accredited by
the Commission or the Supreme Court in an amount
equivalent to the monetary award, exclusive of damages
and attorney's fees.
The employer, his counsel, as well as the bonding company,
shall submit a joint declaration under oath attesting that the
surety bond posted is genuine.
The Commission may, in justifiable cases and upon
Motion of the Appellant, reduce the amount of the
bond. The filing of the motion to reduce bond shall not
stop the running of the period to perfect appeal.16
(Emphasis Supplied)
It is clear from both the Labor Code and the NLRC Rules of
Procedure that there is legislative and administrative intent
to strictly apply the appeal bond requirement, and the Court
should give utmost regard to this intention. There is a
concession to the employer, in excluding damages and
attorney's fees from the computation of the appeal bond.17
Not even the filing of a motion to reduce bond is deemed to
stay the period for requiring an appeal. Nothing in the Labor
Code or the NLRC Rules of Procedure authorizes the posting
of a bond that is less than the monetary award in the
judgment, or would deem such insufficient postage as
sufficient to perfect the appeal.
On the other hand, Article 223 indubitably requires that the
appeal be perfected only upon the posting of the cash or
surety bond which is equivalent to the monetary award in
the judgment appealed from. The clear intent of both
statutory and procedural law is to require the employer to
post a cash or surety bond securing the full amount of the
monetary award within the ten (10)-day reglementary
period. While the bond may be reduced upon motion by the
employer, there is that proviso in Rule VI, Section 3 that the
filing of such motion does not stay the reglementary period.
The qualification effectively requires that unless the NLRC
grants the reduction of the cash bond within the ten (10)-
day reglementary period, the employer is still expected to
post the cash or surety bond securing the full amount within
the said ten (10)-day period. If the NLRC does eventually
grant the motion for reduction after the reglementary period
has elapsed, the correct relief would be to reduce the cash
or surety bond already posted by the employer within
the ten (10) - day period.
Admittedly, these rules as embodied in the Labor Code and
the NLRC Rules of Procedure impose a burden on the
employer intending to appeal the decision of the labor
arbiter. Within the ten (10)-day reglementary period, the
employer has to prepare a memorandum of appeal and to
secure a cash or surety bond equivalent to the monetary
award in the judgment appealed from. The facility in
obtaining the bond is highly dependent on circumstances
particular to the employer. Yet it is highly probable that
should the employer take the effort to secure the cash or
surety bond immediately upon receipt of the decision of the
Labor Arbiter, such bond would be available within the ten
(10)-day reglementary period.
It also does not escape judicial notice that the cash/surety
bond requirement does not necessitate the employer to
physically surrender the entire amount of the monetary
judgment. The usual procedure is for the employer to obtain
the services of a bonding company, which will then require
the employer to pay a percentage of the award in exchange
for a bond securing the full amount. This observation
undercuts the notion of financial hardship as a justification
for the inability to timely post the required bond.
At the same time, the Court understands that especially in
cases wherein the monetary award is significant in relation
to the employer's assets, it might be difficult to immediately
obtain the required bond pending ascertainment by the
bonding company that the employer holds sufficient security
in case the bond is subsequently executed. It is under these
premises that petitioners' arguments should bear scrutiny.
Petitioners invoke the aforementioned holding in Star Angel
that there is a distinction between the filing of an appeal
within the reglementary period and its perfection, and that
the appeal may be perfected after the said reglementary
period. Indeed, Star Angel held that the filing of a motion
for reduction of an appeal bond necessarily stays the
reglementary period for appeal. However, in this case, the
motion for reduction of appeal bond, which was incorporated
in the appeal memorandum, was filed only on the tenth or
final day of the reglementary period. Under such
circumstance, the motion for reduction of appeal bond can
no longer be deemed to have stayed the appeal, and the
petitioner faces the risk, as had happened in this case, of
summary dismissal of the appeal for non-perfection.
Moreover, the reference in Star Angel to the distinction
between the period to file the appeal and to perfect the
appeal has been pointedly made only once by this Court in
Gensoli v. NLRC18 thus, it has not acquired the sheen of
venerability reserved for repeatedly-cited cases. The
distinction, if any, is not particularly evident or material in
the Labor Code; hence, the reluctance of the Court to adopt
such doctrine. Moreover, the present provision in the NLRC
Rules of Procedure, that "the filing of a motion to reduce
bond shall not stop the running of the period to perfect
appeal"19 flatly contradicts the notion expressed in Star
Angel that there is a distinction between filing an appeal and
perfecting an appeal.
Ultimately, the disposition of Star Angel was premised on
the ruling that a motion for reduction of the appeal bond
necessarily stays the period for perfecting the appeal, and
that the employer cannot be expected to perfect the appeal
by posting the proper bond until such time the said motion
for reduction is resolved. The unduly stretched-out
distinction between the period to file an appeal and to
perfect an appeal was not material to the resolution of Star
Angel, and thus could properly be considered as obiter
dictum.
Petitioners also characterize the appeal bond requirement as
a technical rule, and that the dismissal of an appeal on
purely technical grounds is frowned upon.20 However, Article
223, which prescribes the appeal bond requirement, is a rule
of jurisdiction and not of procedure. There is little leeway for
condoning a liberal interpretation thereof, and certainly
none premised on the ground that its requirements are mere
technicalities. It must be emphasized that there is no
inherent right to an appeal in a labor case, as it arises solely
from grant of statute, namely the Labor Code.
We have indeed held that the requirement for posting the
surety bond is not merely procedural but jurisdictional21 and
cannot be trifled with.22 Non-compliance with such legal
requirements is fatal and has the effect of rendering the
judgment final and executory.23 The petitioners cannot be
allowed to seek refuge in a liberal application of rules for
their act of negligence.24
Petitioners note that since the NLRC Rules of Procedure
authorize the reduction of the appeal bond, the rule is not
"ironclad." Nonetheless, great respect is given to the
discretion of the NLRC to reduce the appeal bond. In this
case, there is palpably no merit in reducing the said appeal
bond. The petitioners sought to have the appeal bond
reduced from Two Hundred Twenty Thousand Six Hundred
Sixty Six Pesos and Sixty Six Centavos (P220,666.66) to the
woefully disproportional sum of Ten Thousand Pesos
(P10,000.00). The employee, for whose benefit the appeal
bond requirement is prescribed, would hardly be secured by
the relatively miniscule cash guaranty in this case in the
event of renewed victory on appeal, much more so should
the employer subsequently employ artifices to evade
execution of judgment.
The grounds cited for reduction of the appeal bond were "the
great possibility of the reversal of the [Labor Arbiter's]
decision in the light of the serious errors in the findings of
fact and in the application of the law," and that the monetary
award was too harsh and unfounded.25 Just about any
aggrieved employer can invoke such grounds. Indeed, the
mere allegation of the decision as purportedly erroneous in
fact or in law cannot serve to mitigate the appeal bond
requirement. Neither could the allegation that the monetary
award was too harsh or unfounded unsettle the appeal bond
requirement absent concrete proof, especially if, as in this
case, the alleged "harshness" of the award is not self-
evident.
Petitioners point to the earlier error on the part of the NLRC
in declaring that they had not even posted the desired
reduced bond within the ten - (10) day reglementary period,
when in fact they had. However, the NLRC correctly noted
that even the posting of such reduced amount did not
operate to perfect the petitioners' appeal. Strangely,
petitioners impute unnecessary authority to the official
receipt issued to them by the NLRC Regional Arbitration
Branch No. XI, Davao City, in the amount of Ten Thousand
Pesos (P10,000.00). The receipt establishes nothing more
than that the petitioners posted a bond in an amount way
below that required by the law.
The remainder of petitioners' arguments seek to persuade
the Court to take a second look at the facts of the case. The
Court is not a trier of facts. Neither is it wont to engage in
factual review, especially in this case wherein the cause of
the petitioners has been deemed bereft of merit on three
levels of review the Labor Arbiter, the NLRC, and the Court
of Appeals. There is no reason to deviate from this
jurisprudential yardstick.
One final note. As earlier stated, the underlying purpose of
the appeal bond is to ensure that the employee has
properties on which he or she can execute upon in the event
of a final, providential award. The non payment or woefully
insufficient payment of the appeal bond by the employer
frustrates these ends. Respondent Cariño alleges in his
Comment before this Court that petitioner Quilos and his
wife have since gone abroad, and wonders aloud whether he
still would be able to collect his monetary award considering
the circumstances.26 Petitioners, in their Reply and
Memorandum, do not aver otherwise. Indeed, such
eventuality appears plausible considering that Quilos himself
did not personally verify the petition,27 and had in fact
executed a Special Power of Attorney in favor of his counsel,
Atty. Bernabe B. Alabastro, authorizing the filing of cases in
his name.28 It does not necessarily follow that the absence
of Quilos from this country precludes the execution of the
award due Cariño.29 However, if the absence of Quilos from
this country proves to render impossible the execution of
judgment in favor of Cariño, then the latter's victory may
sadly be rendered pyrrhic. The appeal bond requirement
precisely aims to prevent empty or inconsequential victories
by the laborer, and it is hoped that herein petitioners' refusal
to post the appropriate legal appeal bond does not frustrate
the ends of justice in this case.

G.R. No. 80600 March 21, 1990

PHILIPPINE TELEGRAPH AND TELEPHONE CORPORATION, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and BOBBY TORIBIANO,
respondents.
DP Mercado & Associates for petitioner.
Oscar E. Dinopol for private respondent.

REGALADO, J.:
Assailed in this petition for certiorari is the resolution 1 of respondent
commission, dated August 21, 1987, which affirmed with modification the
decision of Labor Arbiter Nicolas S. Sayon, the decretal portion of which
resolution reads:
WHEREFORE, premises considered, judgment is hereby rendered, modifying
the Labor Arbiter's decision dated November 14, 1986, ordering respondent:
1. To reinstate complainant to his former position without payment of
backwages;
2. To pay complainant his unpaid wages for the month of July, 1985; and
3. To pay complainant his entitlement on holiday pay, rest day pay and
incentive leave pay for three years starting from August 23, 1982 to August 23,
1983. 2
We quote the generative facts of the case as synthesized by Labor Arbiter
Sayon and implicitly adopted by respondent commission:
Complainant was employed with the respondent since February 1, 1979 at its
branch station at General Santos City, first as a collector and later on as a
counter-clerk and long distance operator. On August 24, 1985 complainant was
terminated by the respondent for tampering (with) the vodex receipt by writing
the amount of P41.15 as appearing in the duplicate while the original copy
issued to the customer was P113.25.
Complainant alleged that he explained to the respondent's Branch Supervisor
that the discrepancy of the amounts reflected in the duplicate and the original
of said receipt was done by inadvertence and without malicious interest to
defraud the respondent. Complainant contended that at the particular incident
on July 26, 1985, he was alone in the office attending to customers who filed
their respective telegrams wherein he has to count the number of words,
determine the amount payable, collect the payment and file with the telex
operator; that in addition, there were several customers placing long distance
calls and (he) had to wait (for) them (to) furnish their calls to determine the
minutes consumed. Complainant argued that it is in this process that he forgot
to take the number of minutes used up and he estimated that one customer
who was issued a receipt used eleven minutes and in haste (he) wrote the
particulars but he failed to use a carbon paper for the duplicate and when he
summarized the duplicate receipts issued for that day, the latter found out that
duplicate receipt bearing 324698 has no particulars. Considering that he could
not anymore recall how much he had actually wrote (sic) in the original, the
complainant wrote through a carbon paper the amount of P41.15. Complainant
now alleged that without proper investigation and warning, he was terminated
by the respondent effective August 24, 1985. He is also claiming for his salary
for the month of July, 1985 which was withheld by the respondent, his holiday
pay, rest day pay and incentive leave pay.
Respondent, on the other hand, alleged that a regular audit was conducted at
their PT & T General Santos City branch on August 14 to 19, 1985, by its
Internal Auditor; that, it was discovered during the audit that complainant on
July 26, 1985 had accepted and receipted a long distance call in the amount of
P113.25 under TOR No. 324698 (Annex "A" of respondent) but what was
reflected in the duplicate copy was only P41.15, with a difference of P72.10
which was used for his own personal comfort. Respondent argued that while
this fact has been admitted by the complainant, his explanation was flimsy and
shallow; that the fact that there was no carbon placed for the duplicate is
enough evidence for (sic) his illegal interest and that his intention to tamper
(with) and malverse company funds is very glaring to be ignored. It was further
argued that the acts of the complainant reflect that he is morally deprived and,
therefore, could not be trusted considering that he violated the trust and
confidence reposed upon him which constitutes a valid reason for his
termination.3 (Corrections in parentheses supplied).
After a careful review of the records, Labor Arbiter Sayon rendered his
decision, with the following dispositive part:
WHEREFORE, responsive to the foregoing, judgment is hereby rendered
against the respondent, Philippine Telegraph and Telephone Corporation PT
& T General Santos branch:
1. To reinstate complainant, Bobby Toribiano, to his former position without
loss of seniority rights plus backwages and emergency living allowance
equivalent to six (6) months;
2. To pay complainant his unpaid wages for the month of July, 1985; and
3. To pay complainant his entitlement on holiday pay, rest day pay and
incentive leave pay for three years starting from August 23, 1982 to August 23,
1985.4
As earlier stated, respondent commission affirmed said decision with
modification, deleting therefrom the award of backwages. Not satisfied
therewith, the employer corporation resorted to the instant petition.
Petitioner submits for consideration substantially the same arguments it
adduced in the labor arbiter's office and on appeal to respondent commission
on the matter of private respondent's dismissal.
The petition is without merit.
The labor arbiter made a finding that private respondent was indeed alone in
the office on July 26, 1985 busily performing his duties as counter-clerk and
long distance operator at the same time, the functions of which dual positions
precisely caused him to commit a mistake in the entry receipt through
negligence. Further, it was found that private respondent had repeatedly
brought to the attention of petitioner his predicament of having to singly perform
manifold duties but the same were ignored by the latter. 5
We find no cogent reason to disturb such findings. Well entrenched is the rule
that when the conclusions of the labor arbiter are sufficiently corroborated by
the evidence on record, the same should be respected by appellate tribunals
since he is in a better position to assess and evaluate the credibility of the
contending parties. 6 Not even the failure of petitioner to present witnesses or
counter-affidavits will constitute a fatal error as long as the parties were given
a chance to submit position papers on the basis of which the labor arbiter
rendered a decision. 7
Considering all the attendant circumstances, even assuming that there may
have been a valid ground for dismissal, the imposition of such supreme penalty
would certainly be very harsh and disproportionate to the infraction committed
by private respondent, especially considering that it was private respondent's
first offense after having faithfully rendered seven (7) long years of satisfactory
service. These, and the fact that the imputed defalcation involved the sum of
only P72.10, bolster the credibility of private respondent's explanation in his
defense.
While an employer has its own interests to protect and, pursuant thereto, it may
terminate an employee for a just cause, such prerogative to dismiss or lay off
an employee must not be abusively exercised. Such power should be
tempered with compassion and understanding. The employer should bear in
mind that, in the execution of said prerogative, what is at stake is not only the
employee's position but his livelihood as well. 8
This ruling is only in keeping with the constitutional mandate for the State to
afford full protection to labor such that, when conflicting interests of labor and
capital are to be weighed on the scales of social justice, the heavier influence
of the latter should be counterbalanced by the sympathy and compassion the
law must accord the underprivileged worker. 9
Parenthetically, petitioner's claim that the offense in actuality partakes of the
nature of falsification, which would justify outright dismissal, is of no moment.
Whether or not the infraction committed constitutes a criminal act is not for this
Court to rule upon in the present petition.
It is not to be misconstrued, however, that private respondent's act is being
condoned, much less tolerated. As ratiocinated by respondent Commission:
However, considering that complainant is not entirely faultless as to entirely
absolve him from liability, we believe that a modification of the Labor Arbiter's
decision is in order in that reinstatement to his former position without
backwages would be the proper relief. Of course, his reinstatement is subject
to the condition that commission of similar offense will justify his outright
dismissal. 10
Apropos of the award of unpaid wages, the finding of the labor arbiter that
private respondent was indeed not paid his salary corresponding to the month
of July, 1985 11 was not contradicted by petitioner, for which reason it must be
upheld.
A contrario sensu, regarding respondent commissions pronouncement on the
award of holiday pay, rest day pay and incentive leave pay for three (3) years
from August 23, 1982 to August 23, 1983 (sic), 12 we are inclined to subscribe
to the position taken by the Solicitor General. On appeal to respondent
commission, petitioner submitted uncontracted evidence 13 showing payment
to private respondent of his holiday pay and rest day pay, and private
respondent's non-entitlement to incentive leave pay due to his enjoyment of
vacation leave privileges, consistent with Article 95, Chapter III, Title I, Book III
of the Labor Code. Such evidence was, however, rejected by respondent
commission on the erroneous justification that it was not presented at the first
opportunity, presumably when the case was pending with the labor arbiter. 14
The belated presentation of the evidence notwithstanding, respondent
commission should have considered them just the same. As correctly pointed
out by the Solicitor General, who has impartially taken a contrary view vis-a-vis
that portion of said decision of respondent commission which he is supposed
to defend, technical rules of evidence are not binding in labor cases. Labor
officials should use every and reasonable means to ascertain the facts in each
case speedily and objectively, without regard to technicalities of law or
procedure, all in the interest of due process. 15
Thus, even if the evidence was not submitted to the labor arbiter, the fact that
it was duly introduced on appeal to respondent commission is enough basis for
the latter to have been more judicious in admitting the same, instead of falling
back on the mere technicality that said evidence can no longer be considered
on appeal. Certainly, the first course of action would be more consistent with
equity and the basic notions of fairness.
ON THE FOREGOING PREMISES, the resolution of respondent commission,
dated August 21, 1987 is hereby MODIFIED in the sense that the award of
holiday pay, rest day pay and incentive leave pay is DELETED. In all other
respects, the same is hereby AFFIRMED.
SO ORDERED.

G.R. No. 160871 February 6, 2006

TRIAD SECURITY & ALLIED SERVICES, INC. and ANTHONY U. QUE,
Petitioners,
vs.
SILVESTRE ORTEGA, JR., ARIEL ALVARO, RICHARD SEVILLANO,
MARTIN CALLUENG, and ISAGANI CAPILA, Respondents.
DECISION
CHICO-NAZARIO, J.:
This petition seeks to set aside the Decision1 dated 31 July 2003 of the Court
of Appeals in CA-G.R. SP No. 77065 entitled, "Triad Security & Allied
Services, Inc. and Anthony U. Que v. Labor Arbiter Edgar Bisana, et al." The
dispositive portion of the decision reads:
WHEREFORE, the petition is DENIED DUE COURSE and is DISMISSED.
The temporary restraining order earlier issued on June 12, 2003 is LIFTED.2
The following are the pertinent facts:
Petitioner Triad Security and Allied Services, Inc., (Triad Security) is a duly
licensed security agency owned by co-petitioner Anthony U. Que. It holds
office at 672 Carlos Palanca St., Quiapo, Manila.
On the other hand, respondents Silvestre Ortega, Jr., Ariel Alvaro, Richard
Sevillano, Martin Callueng, and Isagani Capila were formerly employed by
petitioner Triad Security as security guards.
On 25 March 1999, respondents filed a complaint against petitioners and a
certain Ret. B/Gen. Javier D. Carbonell for underpayment/nonpayment of
salaries, overtime pay, premium pay for holiday and rest day, service
incentive leave pay, holiday pay, and attorney’s fees.3 The complaint was
amended on 20 April 1999 to include the charges of illegal dismissal, illegal
deductions, underpayment/nonpayment of allowance, separation pay, and
claims for 13th month pay, moral and exemplary damages as well as night
shift differential.4
According to respondents, during the time that they were in the employ of
petitioners, they were receiving compensation which was below the minimum
wage fixed by law. They were also made to render services everyday for 12
hours but were not paid the requisite overtime pay, nightshift differential, and
holiday pay. Respondents likewise lamented the fact that petitioners failed to
provide them with weekly rest period, service incentive leave pay, and 13th
month pay. As a result of these perceived unfairness, respondents filed a
complaint before the Labor Standards Enforcement Division of the
Department of Labor on 6 January 1999.5 Upon learning of the complaint,
respondents’ services were terminated without the benefit of notice and
hearing.
For their part, petitioners denied respondents’ claim of illegal dismissal.
Petitioners explained that management policies dictate that the security
guards be rotated to different assignments to avoid fraternization and that
they be required to take refresher courses at their headquarters.
Respondents allegedly refused to comply with these policies and instead
went on leave or simply refused to report at their headquarters. As for
respondents’ money claims, petitioners insisted that respondents worked for
only eight hours a day, six days a week and that they received their premium
pays for services rendered during holidays and rest day. The service
incentive leave of respondents was allegedly made payable as soon as
respondents applied for said benefit.6
In his decision dated 28 February 2000, Labor Arbiter Jose G. de Vera found
in favor of Respondents. The dispositive portion of his decision states:
WHEREFORE, all the foregoing premises considered judgment is hereby
rendered ordering the respondents to reinstate the complainants
(respondents herein) to their former jobs as security guards, and to pay jointly
and solidarily complainants’ backwages which as of February 24, 2000
already amount to ₱473,233.15, and to such further backwages as they
accrue until reinstatement order is complied with by the respondents
(petitioners herein).
Further, respondents are ordered to pay jointly and solidarily separation pay
computed at the aggregate sum of ₱232,976.25 in the event reinstatement is
no longer feasible.
Furthermore, respondents are ordered to pay jointly and solidarily
complainants’ money claims in the aggregate sum of P956, 115.30.
And finally, respondents are ordered to pay attorney’s fees equivalent to ten
percent (10%) of the judgment award.7
As petitioners failed to seasonably file an appeal with the National Labor
Relations Commission, the decision of the labor arbiter became final and
executory prompting respondents to file a motion for the issuance of writ of
execution on 23 June 2000.8 The writ of execution was thereafter issued on
25 August 2000.9
On 18 September 2000, petitioners filed a motion to recompute money claims
as decreed10 arguing therein that respondents’ money claims as contained in
the 28 February 2000 decision were baseless and that their former counsel
was not furnished a copy of the computation nor was he allowed to submit
comments thereon.
Pursuant to the writ of execution, petitioner Triad Security’s funds with its
clients Remal Enterprises and Don Pedro Azucarera amounting to one million
two hundred twenty-four thousand seven hundred sixty-two pesos and forty
centavos (₱1,224,762.40) were garnished.11
On 3 October 2000, petitioners filed a motion to lift notices of garnishment12
In the order dated 14 November 2000,13 the labor arbiter denied, for lack of
merit, petitioners’ motion to recompute respondents’ money claims as well as
their motion to lift notices of garnishment. In the same order, the garnished
receivables were ordered released to the NLRC cashier for proper disposition
to Respondents.
On 23 November 2000, respondents filed a motion seeking the release of the
funds then in the custody of the NLRC cashier.14
On 13 December 2000, petitioners filed an appeal before the NLRC assailing
the denial of their motion to recompute money claims and the labor arbiter’s
order releasing the garnished funds to Respondents.15 This appeal was
dismissed by the NLRC’s first division in its order promulgated on 29 May
2001.16
Similarly ill-fated were petitioners’ petition for injunction which was dismissed
by the NLRC in its resolution of 22 May 200117 and their motion for
reconsideration of said resolution which was denied for utter lack of merit on
4 September 2001.18
Following petitioners’ set-backs before the NLRC, the labor arbiter issued the
order dated 31 August 2001 decreeing the release of the funds in the
possession of the NLRC cashier to Respondents.19
On 1 October 2002, the labor arbiter issued an alias writ of execution20
commanding the sheriff to collect from petitioners the amount of six hundred
three thousand seven hundred ninety-four and seventy-seven centavos
(₱603,794.77) representing the unsatisfied balance of the judgment award
contained in the 28 February 2000 decision.
Acting on respondents’ motion dated 15 October 2002, the labor arbiter
issued the order dated 9 December 2002 directing the cashier of Don Pedro
Azucarera to release to the NLRC cashier the garnished funds totaling
₱603,794.77.21 The funds were eventually ordered released to respondents
pursuant to the labor arbiter’s order of 17 December 2002.22
On 30 September 2002, the Computation and Examination Unit of the NLRC
came up with a computation of monetary award where it appears that
petitioners were liable to respondents for the amount of ₱2,097,152.26
representing the latter’s backwages and separation pay.23
On 30 January 2003, petitioners filed their comment on the computation
prepared by the Computation and Examination Unit. Petitioners essentially
opposed the computation based on the following grounds:
(a) the balance of the unsatisfied award is only Php 603,794.77 and not Php
2,097,152.26 appearing on the computation;
(b) the basis for computing the wage differential is erroneous.24
On the basis of the new computation, respondents filed a motion for the
issuance of 2nd alias writ of execution.25 This motion was predictably
opposed by petitioners.26
Despite petitioners’ protest, the labor arbiter issued the 23 April 2003 order
stating as follows:
The records of the case reveal that the decision ordered the respondents to
reinstate the complainants to their former job as security guards and decreed
that respondents shall pay to the complainants further backwages as they
accrue until the order of reinstatement is complied with.
The order of reinstatement is self-executing and should be complied with by
the respondents upon receipt of the decision either by payroll or physical
reinstatement. (Pioneer Texturizing Corporation vs. NLRC, 280 SCRA 806, in
relation to Article 223 of the Labor Code, as amended).
The respondents failed to comply with the order of reinstatement, hence,
complainants’ backwages accrued.
As a matter of procedure, this Office ordered the Computation and
Examination Unit to compute complainants’ accrued backwages.
On September 30, 2002, the Computation and Examination Unit came up
with the total amount of TWO MILLION NINETY SEVEN THOUSAND ONE
HUNDRED FIFTY TWO and 26/100 (P2,097,152.26) PESOS.
The respondents filed their comment on the computation and their opposition
to complainants’ motion for execution.
We considered and studied respondents’ arguments in their comment and
opposition and We found them inadequate to overcome the presumption of
correctness and regularity of the computation; hence, the same is hereby
approved.
Further, the argument regarding the supposed prescribed period covering the
month 2 February – 20 April 1996 appears inconsequential in view of a
manifestation during conference that (complainants are) willing to admit the
same and deduct them from whatever amount is still due them.
WHEREFORE, in view of the foregoing, complainants’ motion for the
execution of their accrued backwages amounting to TWO MILLION NINETY
SEVEN THOUSAND ONE HUNDRED FIFTY TWO and 26/100 (₱2,
097,152.26) PESOS as computed by the Computation and Examination Unit
of the NLRC is hereby granted less the amount of more or less ₱72,805.00
covering the wage differential for the period 2 February – 20 April 1996.
Let an Alias Writ of Execution for the enforcement of the ₱2,097,152.26 less
the above-mentioned amount, as complainants’ accrued backwages, be
accordingly issued.27
Forthwith, a 2nd alias writ of execution dated 14 May 2003 was issued by the
labor arbiter for the satisfaction of the amount of ₱2,024,347.26 "representing
(respondents’) unpaid accrued backwages as computed by the Computation
and Examination Unit xxx, including attorney’s fees, plus execution fee."28
On 20 May 2003, petitioners filed before the Court of Appeals a petition for
certiorari with prayer for the issuance of a temporary restraining order and/or
writ of preliminary injunction.29
In a resolution promulgated on 12 June 2003, the Court of Appeals issued a
temporary restraining order enjoining the execution or enforcement of the 23
April 2003 order of the labor arbiter.30
Petitioners’ victory with the Court of Appeals was, however, short-lived. In the
decision now assailed before us, the Court of Appeals ruled that backwages
payable to respondents should be computed from the date of their termination
from their jobs until actual reinstatement as provided in Article 223 of the
Labor Code. As petitioners failed to observe said pertinent provision of the
law, the labor arbiter could not be charged with having committed a grave
abuse of discretion when he issued the assailed 23 April 2003 order.
Moreover, the Court of Appeals took note of the "procedural but fatal flaw"31
committed by petitioners when they immediately elevated their case via
petition for certiorari before the Court of Appeals without first seeking
recourse from the NLRC in violation not only of the Rules of Procedure of
said body but also of the doctrine of exhaustion of administrative remedies.
Petitioners’ motion for reconsideration was denied by the Court of Appeals in
a resolution dated 20 November 2003.
Hence this petition raising the following issues:
I
WHETHER OR NOT THE COURT OF APPEALS ERRED WHEN IT
DECLARED THAT THE REMEDY ADOPTED BY THE PETITIONERS IS
ERRONEOUS
II
WHETHER OR NOT PETITIONERS SHOULD BE HELD LIABLE TO THE
ADDITIONAL AMOUNT AS CONTAINED IN THE 23 APRIL 2003 ORDER
CONSIDERING THAT THE 28 FEBRUARY 2000 DECISION HAS ALREADY
BEEN FULLY SATISFIED
III
WHETHER OR NOT THE 30 SEPTEMBER 2002 COMPUTATION ISSUE BY
THE COMPUTATION AND EXAMINATION UNIT OF THE NLRC IS
CORRECT AND PROPER
The petition is partially meritorious.
First, we shall resolve the procedural issue posed in this petition.
Petitioners contend that based on the rules of procedure of the NLRC, the
order granting the issuance of the 2nd alias writ of execution could not have
been the proper subject of an appeal before the NLRC neither could
petitioners have sought the remedy of certiorari from the NLRC. Petitioners
argue that the rules of procedure of the NLRC do not provide for any remedy
or procedure for challenging the order granting a writ of execution; hence, the
pertinent provision of the Revised Rules of Court should apply which in this
case is Section 1 of Rule 41. It states:
Section 1. Subject of appeal – An appeal may be taken from a judgment or
final order that completely disposes of the case, or of a particular matter
therein when declared by these Rules to be appealable.
No appeal may be taken from:
xxxx
(f) An order of execution;
xxxx
In all the above instances where the judgment or final order is not appealable,
the aggrieved party may file an appropriate special civil action under Rule 65.
Moreover, Rule III, Section 4 of the Rules of Procedure of the NLRC
expressly proscribes the filing of a petition for certiorari –
SECTION 4. PROHIBITED PLEADINGS & MOTIONS. The following
pleadings, motions or petitions shall not be allowed in the cases covered by
these Rules:
xxxx
c) Petition for Certiorari, Mandamus or Prohibition.
Therefore, inasmuch as the NLRC had no authority to issue the writ of
certiorari, recourse to the Court of Appeals was only proper.
In addition, petitioners maintain that the doctrine of exhaustion of
administrative remedies is not absolute as it accepts of certain exceptions
such as when an appeal would not be an adequate remedy there being an
order or execution already issued and the implementation of said writ loomed
as a great probability.32
We do not agree.
It is a basic tenet of procedural rules that for a special civil action for a petition
for certiorari to prosper, the following requisites must concur: (1) the writ is
directed against a tribunal, a board or an officer exercising judicial or quasi-
judicial functions; (2) such tribunal, board or officer has acted without or in
excess of jurisdiction, or with grave abuse of discretion amounting to lack or
excess of jurisdiction; and (3) there is no appeal or any plain, speedy and
adequate remedy in the ordinary course of law.33
In this case, petitioners insist that the NLRC is bereft of authority to rule on a
matter involving grave abuse of discretion that may be committed by a labor
arbiter. Such conclusion, however, proceeds from a limited understanding of
the appellate jurisdiction of the NLRC under Article 223 of the Labor Code
which states:
ART. 223. APPEAL
Decisions, awards, or orders of the Labor Arbiter are final and executory
unless appealed to the Commission by any or both parties within ten (10)
calendar days from receipt of such decisions, awards, or orders. Such appeal
may be entertained only on any of the following grounds:
(a) If there is prima facie evidence of abuse of discretion on the part of the
Labor Arbiter.
In the case of Air Services Cooperative v. Court of Appeals,34 we had the
occasion to explain the scope of said article of the Labor Code to mean –
x x x Also, while the title of Article 223 seems to provide only for the remedy
of appeal as that term is understood in procedural law and as distinguished
from the office of certiorari, nonetheless, a closer reading thereof reveals that
it is not as limited as understood by the petitioners x x x.
xxxx
Abuse of discretion is admittedly within the ambit of certiorari and its grant
thereof to the NLRC indicates the lawmakers’ intention to broaden the
meaning of appeal as that term is used in the Code x x x.35
Likewise, in the same case, this Court quoted with approval the following
observation of the Court of Appeals:
We do not see how appeal would have been inadequate or ineffectual under
the premises. On the other hand, being the administrative agency especially
tasked with the review of labor cases, [the NLRC] is in a far better position to
determine whether petitioners’ grounds for certiorari are meritorious. Neither
is there any cause for worry that appeal to the Commission would not be
speedy as the Labor Code provides that the Commission shall decide cases
before it, within twenty (20) calendar days from receipt of the Answer of
Appellee x x x.36
Given the foregoing, we hold that the Court of Appeals correctly dismissed
the petition for certiorari brought before it. Notwithstanding this procedural
defect committed by petitioners, in the interest of substantial justice, we shall
proceed to resolve the other issues presented by petitioners.
Petitioners insist that their monetary obligation, as contained in the 28
February 2000 decision of the labor arbiter, had already been fully satisfied.
They posit the argument that with respondents’ receipt of their separation
pay, they had opted not to seek reinstatement to their former jobs and elected
instead to sever their employment with petitioner Triad Security. In fact,
according to petitioners, respondents had already found new employments
and to award them further backwages would be tantamount to unjust
enrichment. Thus, petitioners maintain that there is no more basis to hold
them liable for the accrued backwages stated in the 30 September 2002
computation.
Again, petitioners’ argument is untenable.
Article 279 of the Labor Code, as amended, states:
ART. 279. SECURITY OF TENURE
In cases of regular employment the employer shall not terminate the services
of an employee except for a just cause or when authorized by this Title. An
employee who is unjustly dismissed from work shall be entitled to
reinstatement without loss of seniority rights and other privileges and to his
full backwages, inclusive of allowances, and to his other benefits or their
monetary equivalent computed from the time his compensation was withheld
from him up to the time of his actual reinstatement.
As the law now stands, an illegally dismissed employee is entitled to two
reliefs, namely: backwages and reinstatement. These are separate and
distinct from each other.37 However, separation pay is granted where
reinstatement is no longer feasible because of strained relations between the
employee and the employer.38 In effect, an illegally dismissed employee is
entitled to either reinstatement, if viable, or separation pay if reinstatement is
no longer viable and backwages.39
Backwages and separation pay are, therefore, distinct reliefs granted to one
who was illegally dismissed from employment. The award of one does not
preclude that of the other as this court had, in proper cases, ordered the
payment of both.40
In this case, the labor arbiter ordered the reinstatement of respondents and
the payment of their backwages until their actual reinstatement and in case
reinstatement is no longer viable, the payment of separation pay. Under
Article 223 of the Labor Code, "the decision of the Labor Arbiter reinstating a
dismissed or separated employee, insofar as the reinstatement aspect is
concerned, shall be immediately executory, even pending appeal." The same
provision of the law gives the employer the option of either admitting the
employee back to work under the same terms and conditions prevailing
before his dismissal or separation from employment or the employer may
choose to merely reinstate the employee to the payroll. It bears emphasizing
that the law mandates the prompt reinstatement of the dismissed or
separated employee. This, the petitioners failed to heed. They are now before
this Court insisting that they have fully disposed of their legal obligation to
respondents when they paid the latter’s separation pay. We do not agree.
It should be pointed out that an order of reinstatement by the labor arbiter is
not the same as actual reinstatement of a dismissed or separated employee.
Thus, until the employer continuously fails to actually implement the
reinstatement aspect of the decision of the labor arbiter, their obligation to
respondents, insofar as accrued backwages and other benefits are
concerned, continues to accumulate. It is only when the illegally dismissed
employee receives the separation pay that it could be claimed with certainty
that the employer-employee relationship has formally ceased thereby
precluding the possibility of reinstatement. In the meantime, the illegally
dismissed employee’s entitlement to backwages, 13th month pay, and other
benefits subsists. Until the payment of separation pay is carried out, the
employer should not be allowed to remain unpunished for the delay, if not
outright refusal, to immediately execute the reinstatement aspect of the labor
arbiter’s decision.
The records of this case are bereft of any indication that respondents were
actually reinstated to their previous jobs or to the company payroll. Instead,
they were given, albeit with much resistance from petitioners, the full amount
of the money judgment stated in the 28 February 2000 decision of the labor
arbiter, inclusive of separation pay, more than two years after the labor arbiter
had issued his decision on the illegal dismissal case filed by Respondents. As
the law clearly requires petitioners to pay respondents’ backwages until
actual reinstatement, we resolve that petitioners are still liable to respondents
for accrued backwages and other benefits from 25 February 2000 until 16
December 2002, the day before the labor arbiter ordered the release to
respondents of ₱603,794.77 representing the full satisfaction of 28 February
2000 judgment, including separation pay.
Nor can we give credence to petitioners claim that they could not reinstate
respondents as the latter had already found jobs elsewhere. It is worthy to
note here that respondents were minimum wage earners who were left with
no choice after they were illegally dismissed from their employment but to
seek new employment in order to earn a decent living. Surely, we could not
fault them for their perseverance in looking for and eventually securing new
employment opportunities instead of remaining idle and awaiting the outcome
of this case.
We agree, however, with petitioners that the amount of basic salary used by
the Computation and Examination Unit of the NLRC was erroneous. In said
computation, the amount of respondents’ basic salary from 25 February 1999
until 30 September 2002 (the date of the computation) was pegged at
₱250.00. However, the prevailing daily minimum wage on 25 February 2000
was only ₱223.5041 and it was only on 1 November 2000 when the rate was
increased to ₱250.00.42 Clearly, the Computation and Examination Unit of the
NLRC was mistaken in its calculation. We, therefore, hold that from 25
February up to 31 October 2000, petitioners are liable for accrued backwages
at the rate of ₱223.50 per day and from 1 November 2000 until 16 December
2002, they should be held accountable for accrued backwages of ₱250.00
per day. In addition, they should pay respondents any additional cost of living
allowance which may have been prescribed within the period 25 February
2000 until 16 December 2002 and other benefits to which respondents are
entitled to during said span of time.
WHEREFORE, premises considered, this Court AFFIRMS the Decision of the
Court of Appeals dated 31 July 2003 and the Order dated 23 April 2003 of the
Labor Arbiter declaring petitioners liable for additional accrued backwages.
The amount of money claims due the respondents is, however, MODIFIED.
Let the records of this case be remanded to the Computation and
Examination Unit of the NLRC for proper computation of subject money
claims as above-discussed. Costs against petitioners.
SO ORDERED.
MINITA V. CHICO-NAZARIO
Associate Justice

G.R. No. 130866 September 16, 1998

ST. MARTIN FUNERAL HOME, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and BIENVENIDO
ARICAYOS, respondents.

REGALADO, J.:
The present petition for certiorari stemmed from a complaint for illegal
dismissal filed by herein private respondent before the National Labor
Relations Commission (NLRC), Regional Arbitration Branch No. III, in San
Fernando, Pampanga. Private respondent alleges that he started working as
Operations Manager of petitioner St. Martin Funeral Home on February 6,
1995. However, there was no contract of employment executed between him
and petitioner nor was his name included in the semi-monthly payroll. On
January 22, 1996, he was dismissed from his employment for allegedly
misappropriating P38,000.00 which was intended for payment by petitioner of
its value added tax (VAT) to the Bureau of Internal Revenue (BIR). 1
Petitioner on the other hand claims that private respondent was not its
employee but only the uncle of Amelita Malabed, the owner of petitioner St.
Martin's Funeral Home. Sometime in 1995, private respondent, who was
formerly working as an overseas contract worker, asked for financial
assistance from the mother of Amelita. Since then, as an indication of
gratitude, private respondent voluntarily helped the mother of Amelita in
overseeing the business.
In January 1996, the mother of Amelita passed away, so the latter then took
over the management of the business. She then discovered that there were
arrears in the payment of taxes and other government fees, although the
records purported to show that the same were already paid. Amelita then
made some changes in the business operation and private respondent and
his wife were no longer allowed to participate in the management thereof. As
a consequence, the latter filed a complaint charging that petitioner had
illegally terminated his employment.2
Based on the position papers of the parties, the labor arbiter rendered a
decision in favor of petitioner on October 25, 1996 declaring that no
employer-employee relationship existed between the parties and, therefore,
his office had no jurisdiction over the case. 3
Not satisfied with the said decision, private respondent appealed to the NLRC
contending that the labor arbiter erred (1) in not giving credence to the
evidence submitted by him; (2) in holding that he worked as a "volunteer" and
not as an employee of St. Martin Funeral Home from February 6, 1995 to
January 23, 1996, or a period of about one year; and (3) in ruling that there
was no employer-employee relationship between him and petitioner.4
On June 13, 1997, the NLRC rendered a resolution setting aside the
questioned decision and remanding the case to the labor arbiter for
immediate appropriate proceedings.5 Petitioner then filed a motion for
reconsideration which was denied by the NLRC in its resolution dated August
18, 1997 for lack of merit,6 hence the present petition alleging that the NLRC
committed grave abuse of discretion.7
Before proceeding further into the merits of the case at bar, the Court feels
that it is now exigent and opportune to reexamine the functional validity and
systemic practicability of the mode of judicial review it has long adopted and
still follows with respect to decisions of the NLRC. The increasing number of
labor disputes that find their way to this Court and the legislative changes
introduced over the years into the provisions of Presidential Decree (P.D.)
No. 442 (The Labor Code of the Philippines and Batas Pambansa Blg. (B.P.
No.) 129 (The Judiciary Reorganization Act of 1980) now stridently call for
and warrant a reassessment of that procedural aspect.
We prefatorily delve into the legal history of the NLRC. It was first established
in the Department of Labor by P.D. No. 21 on October 14, 1972, and its
decisions were expressly declared to be appealable to the Secretary of Labor
and, ultimately, to the President of the Philippines.
On May 1, 1974, P.D. No. 442 enacted the Labor Code of the Philippines, the
same to take effect six months after its promulgation. 8 Created and regulated
therein is the present NLRC which was attached to the Department of Labor
and Employment for program and policy coordination only.9 Initially, Article
302 (now, Article 223) thereof also granted an aggrieved party the remedy of
appeal from the decision of the NLRC to the Secretary of Labor, but P.D. No.
1391 subsequently amended said provision and abolished such appeals. No
appellate review has since then been provided for.
Thus, to repeat, under the present state of the law, there is no provision for
appeals from the decision of the NLRC. 10 The present Section 223, as last
amended by Section 12 of R.A. No. 6715, instead merely provides that the
Commission shall decide all cases within twenty days from receipt of the
answer of the appellee, and that such decision shall be final and executory
after ten calendar days from receipt thereof by the parties.
When the issue was raised in an early case on the argument that this Court
has no jurisdiction to review the decisions of the NLRC, and formerly of the
Secretary of Labor, since there is no legal provision for appellate review
thereof, the Court nevertheless rejected that thesis. It held that there is an
underlying power of 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; that the purpose of judicial review is to keep the administrative
agency within its jurisdiction and protect the substantial rights of the parties;
and that it is that part of the checks and balances which restricts the
separation of powers and forestalls arbitrary and unjust adjudications. 11
Pursuant to such ruling, and as sanctioned by subsequent decisions of this
Court, the remedy of the aggrieved party is to timely file a motion for
reconsideration as a precondition for any further or subsequent remedy, 12
and then seasonably avail of the special civil action of certiorari under Rule
65, 13 for which said Rule has now fixed the reglementary period of sixty days
from notice of the decision. Curiously, although the 10-day period for finality
of the decision of the NLRC may already have lapsed as contemplated in
Section 223 of the Labor Code, it has been held that this Court may still take
cognizance of the petition for certiorari on jurisdictional and due process
considerations if filed within the reglementary period under Rule 65. 14
Turning now to the matter of judicial review of NLRC decisions, B.P. No. 129
originally provided as follows:
Sec. 9. Jurisdiction. — The Intermediate Appellate Court shall exercise:
(1) Original jurisdiction to issue writs of mandamus, prohibition, certiorari,
habeas corpus, and quo warranto, and auxiliary writs or processes, whether
or not in aid of its appellate jurisdiction;
(2) Exclusive original jurisdiction over actions for annulment of judgments of
Regional Trial Courts; and
(3) Exclusive appellate jurisdiction over all final judgments, decisions,
resolutions, orders, or awards of Regional Trial Courts and quasi-judicial
agencies, instrumentalities, boards, or commissions, except those falling
within the appellate jurisdiction of the Supreme Court in accordance with the
Constitution, the provisions of this Act, and of subparagraph (1) of the third
paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the
Judiciary Act of 1948.
The Intermediate Appellate Court shall have the power to try cases and
conduct hearings, receive evidence and perform any and all acts necessary
to resolve factual issues raised in cases falling within its original and appellate
jurisdiction, including the power to grant and conduct new trials or further
proceedings.
These provisions shall not apply to decisions and interlocutory orders issued
under the Labor Code of the Philippines and by the Central Board of
Assessment Appeals. 15
Subsequently, and as it presently reads, this provision was amended by R.A.
No. 7902 effective March 18, 1995, to wit:
Sec. 9. Jurisdiction. — The Court of Appeals shall exercise:
(1) Original jurisdiction to issue writs of mandamus, prohibition, certiorari,
habeas corpus, and quo warranto, and auxiliary writs or processes, whether
or not in aid of its appellate jurisdiction;
(2) Exclusive original jurisdiction over actions for annulment of judgments of
Regional Trial Courts; and
(3) Exclusive appellate jurisdiction over all final judgments, decisions,
resolutions, orders or awards of Regional Trial Courts and quasi-judicial
agencies, instrumentalities, boards or commissions, including the Securities
and Exchange Commission, the Social Security Commission, the Employees
Compensation Commission and the Civil Service Commission, except those
falling within the appellate jurisdiction of the Supreme Court in accordance
with the Constitution, the Labor Code of the Philippines under Presidential
Decree No. 442, as amended, the provisions of this Act, and of subparagraph
(1) of the third paragraph and subparagraph (4) of the fourth paragraph of
Section 17 of the Judiciary Act of 1948.
The Court of Appeals shall have the power to try cases and conduct hearings,
receive evidence and perform any and all acts necessary to resolve factual
issues raised in cases falling within its original and appellate jurisdiction,
including the power to grant and conduct new trials or further proceedings.
Trials or hearings in the Court of Appeals must be continuous and must be
completed within, three (3) months, unless extended by the Chief Justice.
It will readily be observed that, aside from the change in the name of the
lower appellate court, 16 the following amendments of the original provisions of
Section 9 of B.P. No. 129 were effected by R.A. No. 7902, viz.:
1. The last paragraph which excluded its application to the Labor Code of the
Philippines and the Central Board of Assessment Appeals was deleted and
replaced by a new paragraph granting the Court of Appeals limited powers to
conduct trials and hearings in cases within its jurisdiction.
2. The reference to the Labor Code in that last paragraph was transposed to
paragraph (3) of the section, such that the original exclusionary clause therein
now provides "except those falling within the appellate jurisdiction of the
Supreme Court in accordance with the Constitution, the Labor Code of the
Philippines under Presidential Decree No. 442, as amended, the provisions of
this Act, and of subparagraph (1) of the third paragraph and subparagraph (4)
of the fourth paragraph of Section 17 of the Judiciary Act of 1948." (Emphasis
supplied).
3. Contrarily, however, specifically added to and included among the quasi-
judicial agencies over which the Court of Appeals shall have exclusive
appellate jurisdiction are the Securities and Exchange Commission, the
Social Security Commission, the Employees Compensation Commission and
the Civil Service Commission.
This, then, brings us to a somewhat perplexing impassè, both in point of
purpose and terminology. As earlier explained, our mode of judicial review
over decisions of the NLRC has for some time now been understood to be by
a petition for certiorari under Rule 65 of the Rules of Court. This is, of course,
a special original action limited to the resolution of jurisdictional issues, that
is, lack or excess of jurisdiction and, in almost all cases that have been
brought to us, grave abuse of discretion amounting to lack of jurisdiction.
It will, however, be noted that paragraph (3), Section 9 of B.P. No. 129 now
grants exclusive appellate jurisdiction to the Court of Appeals over all final
adjudications of the Regional Trial Courts and the quasi-judicial agencies
generally or specifically referred to therein except, among others, "those
falling within the appellate jurisdiction of the Supreme Court in accordance
with . . . the Labor Code of the Philippines under Presidential Decree No. 442,
as amended, . . . ." This would necessarily contradict what has been ruled
and said all along that appeal does not lie from decisions of the NLRC. 17 Yet,
under such excepting clause literally construed, the appeal from the NLRC
cannot be brought to the Court of Appeals, but to this Court by necessary
implication.
The same exceptive clause further confuses the situation by declaring that
the Court of Appeals has no appellate jurisdiction over decisions falling within
the appellate jurisdiction of the Supreme Court in accordance with the
Constitution, the provisions of B.P. No. 129, and those specified cases in
Section 17 of the Judiciary Act of 1948. These cases can, of course, be
properly excluded from the exclusive appellate jurisdiction of the Court of
Appeals. However, because of the aforementioned amendment by
transposition, also supposedly excluded are cases falling within the appellate
jurisdiction of the Supreme Court in accordance with the Labor Code. This is
illogical and impracticable, and Congress could not have intended that
procedural gaffe, since there are no cases in the Labor Code the decisions,
resolutions, orders or awards wherein are within the appellate jurisdiction of
the Supreme Court or of any other court for that matter.
A review of the legislative records on the antecedents of R.A. No. 7902
persuades us that there may have been an oversight in the course of the
deliberations on the said Act or an imprecision in the terminology used
therein. In fine, Congress did intend to provide for judicial review of the
adjudications of the NLRC in labor cases by the Supreme Court, but there
was an inaccuracy in the term used for the intended mode of review. This
conclusion which we have reluctantly but prudently arrived at has been drawn
from the considerations extant in the records of Congress, more particularly
on Senate Bill No. 1495 and the Reference Committee Report on S. No.
1495/H. No. 10452. 18
In sponsoring Senate Bill No. 1495, Senator Raul S. Roco delivered his
sponsorship speech 19 from which we reproduce the following excerpts:
The Judiciary Reorganization Act, Mr. President, Batas Pambansa Blg. 129,
reorganized the Court of Appeals and at the same time expanded its
jurisdiction and powers. Among others, its appellate jurisdiction was
expanded to cover not only final judgment of Regional Trial Courts, but also
all final judgment(s), decisions, resolutions, orders or awards of quasi-judicial
agencies, instrumentalities, boards and commissions, except those falling
within the appellate jurisdiction of the Supreme Court in accordance with the
Constitution, the provisions of BP Blg. 129 and of subparagraph 1 of the third
paragraph and subparagraph 4 of Section 17 of the Judiciary Act of 1948.
Mr. President, the purpose of the law is to ease the workload of the Supreme
Court by the transfer of some of its burden of review of factual issues to the
Court of Appeals. However, whatever benefits that can be derived from the
expansion of the appellate jurisdiction of the Court of Appeals was cut short
by the last paragraph of Section 9 of Batas Pambansa Blg. 129 which
excludes from its coverage the "decisions and interlocutory orders issued
under the Labor Code of the Philippines and by the Central Board of
Assessment Appeals.
Among the highest number of cases that are brought up to the Supreme
Court are labor cases. Hence, Senate Bill No. 1495 seeks to eliminate the
exceptions enumerated in Section 9 and, additionally, extends the coverage
of appellate review of the Court of Appeals in the decision(s) of the Securities
and Exchange Commission, the Social Security Commission, and the
Employees Compensation Commission to reduce the number of cases
elevated to the Supreme Court. (Emphases and corrections ours)
xxx xxx xxx
Senate Bill No. 1495 authored by our distinguished Colleague from Laguna
provides the ideal situation of drastically reducing the workload of the
Supreme Court without depriving the litigants of the privilege of review by an
appellate tribunal.
In closing, allow me to quote the observations of former Chief Justice
Teehankee in 1986 in the Annual Report of the Supreme Court:
. . . Amendatory legislation is suggested so as to relieve the Supreme Court
of the burden of reviewing these cases which present no important issues
involved beyond the particular fact and the parties involved, so that the
Supreme Court may wholly devote its time to cases of public interest in the
discharge of its mandated task as the guardian of the Constitution and the
guarantor of the people's basic rights and additional task expressly vested on
it now "to determine whether or not there has been a grave abuse of
discretion amounting to lack of jurisdiction on the part of any branch or
instrumentality of the Government.
We used to have 500,000 cases pending all over the land, Mr. President. It
has been cut down to 300,000 cases some five years ago. I understand we
are now back to 400,000 cases. Unless we distribute the work of the
appellate courts, we shall continue to mount and add to the number of cases
pending.
In view of the foregoing, Mr. President, and by virtue of all the reasons we
have submitted, the Committee on Justice and Human Rights requests the
support and collegial approval of our Chamber.
xxx xxx xxx
Surprisingly, however, in a subsequent session, the following Committee
Amendment was introduced by the said sponsor and the following
proceedings transpired: 20
Senator Roco. On page 2, line 5, after the line "Supreme Court in accordance
with the Constitution," add the phrase "THE LABOR CODE OF THE
PHILIPPINES UNDER P.D. 442, AS AMENDED." So that it becomes clear,
Mr. President, that issues arising from the Labor Code will still be appealable
to the Supreme Court.
The President. Is there any objection? (Silence) Hearing none, the
amendment is approved.
Senator Roco. On the same page, we move that lines 25 to 30 be deleted.
This was also discussed with our Colleagues in the House of Representatives
and as we understand it, as approved in the House, this was also deleted, Mr.
President.
The President. Is there any objection? (Silence) Hearing none, the
amendment is approved.
Senator Roco. There are no further Committee amendments, Mr. President.
Senator Romulo. Mr. President, I move that we close the period of Committee
amendments.
The President. Is there any objection? (Silence) Hearing none, the
amendment is approved. (Emphasis supplied).
xxx xxx xxx
Thereafter, since there were no individual amendments, Senate Bill No. 1495
was passed on second reading and being a certified bill, its unanimous
approval on third reading followed. 21 The Conference Committee Report on
Senate Bill No. 1495 and House Bill No. 10452, having theretofore been
approved by the House of Representatives, the same was likewise approved
by the Senate on February 20, 1995, 22 inclusive of the dubious formulation on
appeals to the Supreme Court earlier discussed.
The Court is, therefore, of the considered opinion that ever since appeals
from the NLRC to the Supreme Court were eliminated, the legislative
intendment was that the special civil action of certiorari was and still is the
proper vehicle for judicial review of decisions of the NLRC. The use of the
word "appeal" in relation thereto and in the instances we have noted could
have been a lapsus plumae because appeals by certiorari and the original
action for certiorari are both modes of judicial review addressed to the
appellate courts. The important distinction between them, however, and with
which the Court is particularly concerned here is that the special civil action of
certiorari is within the concurrent original jurisdiction of this Court and the
Court of Appeals; 23 whereas to indulge in the assumption that appeals by
certiorari to the Supreme Court are allowed would not subserve, but would
subvert, the intention of Congress as expressed in the sponsorship speech
on Senate Bill No. 1495.
Incidentally, it was noted by the sponsor therein that some quarters were of
the opinion that recourse from the NLRC to the Court of Appeals as an initial
step in the process of judicial review would be circuitous and would prolong
the proceedings. On the contrary, as he commendably and realistically
emphasized, that procedure would be advantageous to the aggrieved party
on this reasoning:
On the other hand, Mr. President, to allow these cases to be appealed to the
Court of Appeals would give litigants the advantage to have all the evidence
on record be reexamined and reweighed after which the findings of facts and
conclusions of said bodies are correspondingly affirmed, modified or
reversed.
Under such guarantee, the Supreme Court can then apply strictly the axiom
that factual findings of the Court of Appeals are final and may not be reversed
on appeal to the Supreme Court. A perusal of the records will reveal appeals
which are factual in nature and may, therefore, be dismissed outright by
minute resolutions. 24
While we do not wish to intrude into the Congressional sphere on the matter
of the wisdom of a law, on this score we add the further observations that
there is a growing number of labor cases being elevated to this Court which,
not being a trier of fact, has at times been constrained to remand the case to
the NLRC for resolution of unclear or ambiguous factual findings; that the
Court of Appeals is procedurally equipped for that purpose, aside from the
increased number of its component divisions; and that there is undeniably an
imperative need for expeditious action on labor cases as a major aspect of
constitutional protection to labor.
Therefore, all references in the amended Section 9 of B.P. No. 129 to
supposed appeals from the NLRC to the Supreme Court are interpreted and
hereby declared to mean and refer to petitions for certiorari under Rule 65.
Consequently, all such petitions should hence forth be initially filed in the
Court of Appeals in strict observance of the doctrine on the hierarchy of
courts as the appropriate forum for the relief desired.
Apropos to this directive that resort to the higher courts should be made in
accordance with their hierarchical order, this pronouncement in Santiago vs.
Vasquez, et al. 25 should be taken into account:
One final observation. We discern in the proceedings in this case a
propensity on the part of petitioner, and, for that matter, the same may be
said of a number of litigants who initiate recourses before us, to disregard the
hierarchy of courts in our judicial system by seeking relief directly from this
Court despite the fact that the same is available in the lower courts in the
exercise of their original or concurrent jurisdiction, or is even mandated by
law to be sought therein. This practice must be stopped, not only because of
the imposition upon the precious time of this Court but also because of the
inevitable and resultant delay, intended or otherwise, in the adjudication of
the case which often has to be remanded or referred to the lower court as the
proper forum under the rules of procedure, or as better equipped to resolve
the issues since this Court is not a trier of facts. We, therefore, reiterate the
judicial policy that this Court will not entertain direct resort to it unless the
redress desired cannot be obtained in the appropriate courts or where
exceptional and compelling circumstances justify availment of a remedy
within and calling for the exercise of our primary jurisdiction.
WHEREFORE, under the foregoing premises, the instant petition for certiorari
is hereby REMANDED, and all pertinent records thereof ordered to be
FORWARDED, to the Court of Appeals for appropriate action and disposition
consistent with the views and ruling herein set forth, without pronouncement
as to costs.
SO ORDERED.

G.R. No. 197556, March 25, 2015

WATERFRONT CEBU CITY CASINO HOTEL, INC. AND MARCO
PROTACIO, Petitioners, v. ILDEBRANDO LEDESMA, Respondent.
DECISION
VILLARAMA, JR., J.:
This is a petition for review on certiorari under Rule 45 of the 1997
Rules of Civil Procedure, as amended, seeking to set aside the
Decision1 dated March 17, 2011 and Resolution2 dated June 21, 2011
of the Court of Appeals (CA) in CA-G.R. CEB SP No. 05071. The CA
reversed the Decision3 dated November 27, 2009 and Resolution4
dated February 22, 2010 of the National Labor Relations Commission
(NLRC) and reinstated the Decision5 dated April 29, 2009 of the Labor
Arbiter (LA). The LA declared that respondent Ildebrando Ledesma
was illegally dismissed from his employment by petitioner Waterfront
Cebu City Casino Hotel, Inc. (Waterfront).

The factual antecedents follow:

Respondent was employed as a House Detective at Waterfront

located at Salinas Drive, Cebu City.

On the basis of the complaints filed before Waterfront by Christe6

Mandal, a supplier of a concessionaire of Waterfront, and Rosanna
Lofranco, who was seeking a job at the same hotel, Ledesma was
dismissed from employment.7 From the affidavits8 and testimonies9
of Christe Mandal and Rosanna Lofranco during the administrative
hearings conducted by Waterfront, the latter found, among others,
that Ledesma kissed and mashed the breasts of Christe Mandal inside
the hotel’s elevator, and exhibited his penis and asked Rosanna
Lofranco to masturbate him at the conference room of the hotel.

On August 12, 2008, Ledesma filed a complaint10 for illegal dismissal

which was docketed as NLRC RAB-VII Case No. 08-1887-08. The LA
found that the allegations leveled against Ledesma are mere
concoctions, and concluded that Ledesma was illegally
dismissed. The dispositive portion of the April 29, 2009 Decision of
the LA, reads:

WHEREFORE, in view of the foregoing, a decision is hereby rendered

declaring the suspension as well as the dismissal of herein
complainant illegal. Consequently, respondent Waterfront Cebu City
Hotel is ordered to reinstate complainant Ildebrando Ledesma to his
former position without loss of seniority right and with full backwages
reckoned from the date of the suspension up to actual reinstatement.

Herein respondent is likewise ordered to pay complainant Ledesma

service incentive leave pay in the amount of THREE THOUSAND NINE
HUNDRED TEN PESOS AND FIFTY CENTAVOS (P3,910.50) plus ten
percent (10%) of the total monetary award as attorney’s fees.

All other claims are DISMISSED for lack of merit.

SO ORDERED.11

On appeal to the NLRC, the latter reversed the ruling of the LA and
held that Ledesma’s acts of sexual overtures to Christe Mandal and
Rosanna Lofranco constituted grave misconduct justifying his
dismissal from employment. The fallo of the November 27, 2009
Decision of the NLRC reads:

WHEREFORE, premises considered, the appealed Decision is hereby

REVERSED and SET ASIDE. Another one is entered declaring the
dismissal of complainant as valid.

SO ORDERED.12
The NLRC denied Ledesma’s motion for reconsideration in a
Resolution dated February 22, 2010. A copy of the said Resolution
was received by Atty. Gines Abellana (Atty. Abellana), Ledesma’s
counsel of record, on March 15, 2010.13

On May 17, 2010,14 or sixty-three (63) days after Atty. Abellana

received a copy of the NLRC’s Resolution denying the motion for
reconsideration, said counsel filed before the CA a petition for
certiorari under Rule 65 of the Rules of Court.

In its Comment,15 Waterfront prayed for the outright dismissal of

the petition on the ground that it was belatedly filed.

On August 5, 2010, Ledesma, now assisted by a new counsel, filed

a motion for leave to file amended petition,16 and sought the
admission of his Amended Petition for Certiorari.17 In the amended
petition, Ledesma contended that his receipt on March 24, 2010
(and not the receipt on March 15, 2010 by Atty. Abellana), is the
reckoning date of the 60-day reglementary period within which to
file the petition. Hence, Ledesma claims that the petition was
timely filed on May 17, 2010.18

By its Resolution19 dated August 27, 2010, the CA granted leave of

court to Ledesma and admitted his amended petition for
certiorari. The CA, thereafter, rendered a Decision dated March 17,
2011, reversing the Decision of the NLRC and reinstating the ruling
of the LA. The fallo of the assailed CA Decision reads:

IN LIGHT OF ALL THE FOREGOING, this petition is

GRANTED. The 27 November 2009 NLRC Decision and 22 February
2010 Resolution in NLRC Case No. VAC-09-000912-2009 is
REVERSED and SET ASIDE and the 29 April 2009 Decision of the
Labor Arbiter is hereby REINSTATED.

No pronouncement as to costs.

SO ORDERED.20

The CA denied the motion for reconsideration filed by Waterfront in

a Resolution dated June 21, 2011. Thus, the present petition for
review on certiorari where Waterfront raised the main issue of
whether the petition for certiorari was timely filed with the CA.21

In his Comment,22 Ledesma sought the dismissal of the instant

petition of Waterfront on the basis of the following formal
infirmities: (1) the presentation of Gaye Maureen Cenabre, the
representative of Waterfront, of a Community Tax Certificate before
the Notary Public to prove her identity, violated A.M. No. 02-8-13-
SC, and rendered the jurat in the verification and certification on
non-forum shopping of the petition as defective; and (2) no
certified true copy of the August 10, 2011 Board Resolution quoted
in the Secretary’s Certificate was attached to the petition.

The Court finds Waterfront’s petition to be meritorious.

The procedural infirmities23 pointed out by Ledesma are not

adequate to cause the dismissal of the present petition. Gaye
Maureen Cenabre presented to the Notary Public a Community Tax
Certificate numbered 27401128 to prove her identity instead of a
current identification document issued by an official agency bearing
her photograph and signature as required by A.M. No. 02-8-13-SC.
This rendered the jurat in the verification/certification of non-forum
shopping of Waterfront as defective. Nonetheless, any flaw in the
verification, being only a formal, not a jurisdictional requirement, is
not a fatal defect.24 In like manner, there is no need to attach the
certified true copy of the Board Resolution quoted in the Secretary’s
Certificate attached to the petition. Only the judgment, order or
resolution assailed in the petition are the attachments required
under Section 4,25 Rule 45 of the Rules of Court to be duplicate
originals or certified true copies.

On the main issue, the unjustified failure of Ledesma to file his

petition for certiorari before the CA within the 60-day period is a
ground for the outright dismissal of said petition.

Section 4, Rule 65 of the Rules of Court, as amended by A.M. No.

07-7-12-SC, reads:
SEC. 4. When and where to file the petition. – The petition shall be
filed not later than sixty (60) days from notice of the judgment, order
or resolution. In case a motion for reconsideration or new trial is
timely filed, whether such motion is required or not, the petition shall
be filed not later than sixty (60) days counted from the notice of the
denial of the motion.

If the petition relates to an act or an omission of a municipal trial

court or of a corporation, a board, an officer or a person, it shall be
filed with the Regional Trial Court exercising jurisdiction over the
territorial area as defined by the Supreme Court. It may also be filed
with the Court of Appeals or with the Sandiganbayan, whether or not
the same is in aid of the court’s appellate jurisdiction. If the petition
involves an act or an omission of a quasi-judicial agency, unless
otherwise provided by law or these rules, the petition shall be filed
with and be cognizable only by the Court of Appeals.

In election cases involving an act or an omission of a municipal or a

regional trial court, the petition shall be filed exclusively with the
Commission on Elections, in aid of its appellate jurisdiction.

In Laguna Metts Corporation v. Court of Appeals,26 we categorically

ruled that the present rule now mandatorily requires compliance
with the reglementary period. The period can no longer be
extended as previously allowed before the amendment, thus:

As a rule, an amendment by the deletion of certain words or phrases

indicates an intention to change its meaning. It is presumed that the
deletion would not have been made if there had been no intention to
effect a change in the meaning of the law or rule. The amended law
or rule should accordingly be given a construction different from that
previous to its amendment.

If the Court intended to retain the authority of the proper courts to

grant extensions under Section 4 of Rule 65, the paragraph providing
for such authority would have been preserved. The removal of the
said paragraph under the amendment by A.M. No. 07-7-12-SC of
Section 4, Rule 65 simply meant that there can no longer be any
extension of the 60-day period within which to file a petition for
certiorari.
The rationale for the amendments under A.M. No. 07-7-12-SC is
essentially to prevent the use (or abuse) of the petition for certiorari
under Rule 65 to delay a case or even defeat the ends of justice.
Deleting the paragraph allowing extensions to file petition on
compelling grounds did away with the filing of such motions. As the
Rule now stands, petitions for certiorari must be filed strictly
within 60 days from notice of judgment or from the order
denying a motion for reconsideration.27 (Additional emphasis and
underscoring supplied)

In the subsequent case of Domdom v. Third & Fifth Divisions of the

Sandiganbayan,28 the absence of a specific prohibition in Section 4
of Rule 65, as amended, for the extension of the 60-day period to
file a petition for certiorari was construed as a discretionary
authority of the courts to grant an extension.

Republic v. St. Vincent De Paul Colleges, Inc.29 clarified the “conflict”

between the rulings in Laguna Metts Corporation30 and Domdom,31 in
that the former is the general rule while the latter is the exception,
thus:

What seems to be a “conflict” is actually more apparent than real. A

reading of the foregoing rulings leads to the simple conclusion that
Laguna Metts Corporation involves a strict application of the general
rule that petitions for certiorari must be filed strictly within
sixty (60) days from notice of judgment or from the order
denying a motion for reconsideration. Domdom, on the other
hand, relaxed the rule and allowed an extension of the sixty
(60)-day period subject to the Court’s sound
discretion. (Emphasis in the original)
32

In relaxing the rules and allowing an extension, Thenamaris

Philippines, Inc. v. Court of Appeals33 reiterated the necessity for
the party invoking liberality to advance a reasonable or meritorious
explanation34 for the failure to file the petition for certiorari within
the 60-day period.

The petition for certiorari was filed with

the CA beyond the 60-day period
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Atty. Abellana, Ledesma’s counsel, admittedly received a copy of

the NLRC Resolution denying the Motion for Reconsideration on
March 15, 2010 while Ledesma received his copy on March 24,
2010.

Ledesma erroneously asserted in his petition for certiorari filed

before the CA, that the 60th day is May 15, 2010, counted from
March 15, 2010.35 In computing a period, the first day shall be
excluded, and the last included;36 hence, the last day to file his
petition for certiorari is on May 14, 2010, a Friday. Ledesma
therefore belatedly filed his petition on May 17, 2010.

Realizing his procedural faux pas, Ledesma filed an amended

petition where he contended that he timely filed his petition for
certiorari on May 17, 2010 counted from his receipt of the NLRC
Resolution denying his motion for reconsideration on March 24,
2010.37 This stance is bereft of any legal basis. When a party to a
suit appears by counsel, service of every judgment and all orders of
the court must be sent to the counsel. This is so because notice to
counsel is an effective notice to the client, while notice to the client
and not his counsel is not notice in law.38 Receipt of notice by the
counsel of record is the reckoning point of the reglementary
period.39
The negligence of Atty. Abellana in the computation of the 60-day
period, and reckoning such period from the party’s receipt of the
assailed NLRC resolution were similar arguments rejected in Labao
v. Flores.40 In the Labao case,41 the respondents maintained that
they should not suffer the negligence of their counsel in the late
filing of their petition for certiorari, and the 60-day period be
reckoned from their own notice of the NLRC’s denial of their motion
for reconsideration. In rejecting said arguments we ruled as
follows:

The general rule is that a client is bound by the acts, even mistakes,
of his counsel in the realm of procedural technique. The exception to
this rule is when the negligence of counsel is so gross, reckless and
inexcusable that the client is deprived of his day in court. The failure
of a party’s counsel to notify him on time of the adverse judgment,
to enable him to appeal therefrom, is negligence that is not
excusable. We have repeatedly held that notice sent to counsel of
record is binding upon the client, and the neglect or failure of counsel
to inform him of an adverse judgment resulting in the loss of his right
to appeal is not a ground for setting aside a judgment valid and
regular on its face.42 (Emphasis omitted)

With the expiration of the 60-day period to file a petition for

certiorari, a review of the Resolution of the NLRC will be beyond the
jurisdiction of any court.43 No longer assailable, the NLRC
Resolution could not be altered or modified, as previously held in
Labao v. Flores:44

The NLRC’s resolution became final ten (10) days after counsel’s
receipt, and the respondents’ failure to file the petition within the
required (60)-day period rendered it impervious to any attack
through a Rule 65 petition for certiorari. Thus, no court can exercise
jurisdiction to review the resolution.

Needless to stress, a decision that has acquired finality 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. All the issues
between the parties are deemed resolved and laid to rest once a
judgment becomes final and executory; execution of the decision
proceeds as a matter of right as vested rights are acquired by the
winning party. Just as a losing party has the right to appeal within
the prescribed period, the winning party has the correlative right to
enjoy the finality of the decision on the case. After all, a denial of a
petition for being time-barred is tantamount to a decision on the
merits. Otherwise, there will be no end to litigation, and this will set
to naught the main role of courts of justice to assist in the
enforcement of the rule of law and the maintenance of peace and
order by settling justiciable controversies with finality.

Ledesma did not attempt to justify

the belated filing of his petition for
certiorari

The relaxation of procedural rules may be allowed only when there

are exceptional circumstances to justify the same.45 There should
be an effort on the part of the party invoking liberality to advance a
reasonable or meritorious explanation for his/her failure to comply
with the rules.46 Moreover, those who seek exemption from the
application of a procedural rule have the burden of proving the
existence of exceptionally meritorious reason warranting such
departure.47 In Philippine National Bank v. Commissioner of
Internal Revenue,48 we said:

It is an accepted tenet that rules of procedure must be faithfully

followed except only when, for persuasive and weighting reasons,
they may be relaxed to relieve a litigant of an injustice
commensurate with his failure to comply with the prescribed
procedure. Concomitant to a liberal interpretation of the rules
of procedure, however, should be an effort on the part of the
party invoking liberality to adequately explain his failure to
abide by the rules. (Emphasis supplied)

Both in his petition and amended petition, Ledesma never invoked

the liberality of the CA nor endeavored to justify the belated filing
of his petition. On the contrary, Ledesma remained firm that his
petition was filed with the CA within the reglementary
period.49 Absent valid and compelling reasons for the procedural
lapse, the desired leniency cannot be accorded to Ledesma.50

In sum, the late filing by Ledesma of his petition for certiorari, and
his failure to justify his procedural lapse to merit a lenient
application of the rules divested the CA of jurisdiction to entertain
the petition.51

Assuming for a moment that the petition for certiorari was timely
filed with the CA, said recourse should suffer the same fate of
dismissal for lack of merit. Otherwise stated, there is no substantial
justice that may be served here in disregarding the procedural flaw
committed by Ledesma because the NLRC correctly found him
guilty of misconduct or improper behavior in committing lascivious
conduct and demanding sexual favors from Christe Mandal and
Rosanna Lofranco.

The CA ruled in favor of Ledesma since it believed his version that

the complainants merely invented the accusations against him
because Waterfront failed to present as evidence the CCTV footages
of the alleged lascivious conduct of Ledesma inside the elevator and
the conference room. But this argument was not even raised by
Ledesma himself and it was only the CA which utilized this as a
justification to bolster its findings that Ledesma did not commit any
infraction. This being a labor case, the evidence required is only
substantial evidence which was adequately established here by the
positive and credible testimonies of the complainants.
Notably, Ledesma never refuted, at the administrative
investigation level at Waterfront, and even at the proceedings
before the LA, NLRC, and the CA, the allegations leveled against
him by Rosanna Lofranco that, after deluding her to perform a
massage on him, Ledesma exhibited to her his penis and requested
that he be masturbated while inside the conference room of the
hotel. If not for the position of Ledesma as a House Detective, he
will not have access to the conference room nor will he know that
the premises is not monitored through a closed-circuit television,52
thus giving him the untrammeled opportunity to accomplish his
lewd design on the unsuspecting victim. Such acts of Ledesma
constituted misconduct or improper behavior53 which is a just cause
for his dismissal.

WHEREFORE, the petition for review on certiorari is GRANTED. The

March 17, 2011 Decision and June 21, 2011 Resolution of the Court
of Appeals in CA-G.R. CEB SP No. 05071 are REVERSED and SET
ASIDE. The November 27, 2009 Decision and February 22, 2010
Resolution of the National Labor Relations Commission which found
as valid the dismissal from employment of Ildebrando Ledesma are
REINSTATED.

No pronouncement as to costs.

SO ORDERED.

G.R. No. 143557 June 25, 2004

UNIVERSITY OF IMMACULATE CONCEPCION AND SISTER MARIA
JACINTA DE BELEN, RVM, petitioners,
vs.
SECRETARY OF LABOR AND EMPLOYMENT, ENGINEER YOLIBELLE S.
AVINANTE AND ESTELITA B. PULIDO, respondents.
DECISION
SANDOVAL-GUTIERREZ, J.:
This is a petition for review on certiorari under Rule 45 of the 1997 Rules of
Civil Procedure, as amended, assailing the Resolutions dated August 31,
19991 and June 5, 20002 of the Court of Appeals in CA-G.R. SP No. 54296,
entitled "University of Immaculate Concepcion and Sister Maria Jacinta De
Belen, RVM vs. Hon. Secretary of Labor and Employment, Engineer Yolibelle
S. Avinante and Estelita B. Pulido."
The facts as borne by the records are:
On September 21, 1995, Engineer Yolibelle S. Avinante, Labor and
Employment Officer III of the Regional Office No. XI, Department of Labor
and Employment (DOLE) at Davao City, one of herein respondents, sent to
the University of Immaculate Concepcion, petitioner, a notice requesting the
inspection of the following documents: (1) business permit; (2) list of its
regular employees; (3) payrolls and daily time records for the period from
August 1994 to August 1995; and (4) proof of payment to its employees of
their 13th month pay. Respondent Avinante’s notice was pursuant to Article
128 of the Labor Code, as amended.3
Subsequently or on September 26, 1995, respondent Avinante proceeded to
the premises of petitioner to inspect the above documents.
Later, respondent Avinante sent to petitioner a second notice requesting the
inspection of other documents, such as (1) the list of its regular employees;
(2) payrolls covering the period from June 1991 to September 1995; (3) proof
of payment to its employees of their 13th month pay during the period from
1992 to 1995; and (4) a record of its capital and total assets.
Upon receipt of the second notice, petitioner’s directress, Sister Maria Jacinta
De Belen, RVM (also impleaded as petitioner), filed with the same Regional
Office No. XI, a motion seeking to enjoin respondent Avinante from inspecting
its records.
Despite petitioners’ motion, respondent Avinante, on October 17, 1995,
proceeded with her inspection. But she was refused access to petitioners’
records, so she issued a "Notice of Inspection Results," specifying the
violations against labor law as well as occupational safety and health
standard laws committed by petitioners. They then filed an opposition to this
Notice.
On July 22, 1996, the Regional Director of Regional Office No. XI issued an
Order finding petitioners liable for violation of the above laws and directing
them to pay ₱2,339,752.74 by way of restitution to their 193 employees, thus:
"WHEREFORE, premises considered, the UNIVERSITY OF IMMACULATE
CONCEPCION is hereby ordered to pay through this Office, the one hundred
ninety three (193) affected workers the total amount of Two Million Three
Hundred Thirty Nine Thousand Seven Hundred Fifty Two and 74/100 Pesos
(₱2,339,752.74) within ten (10) days from receipt of this Order. Management
is further ordered to comply with the aforementioned occupational safety and
health standards requirements immediately and to submit to this Office proof
of compliance thereof within the same period. Finally, management is hereby
ordered to comply with all labor standard laws, henceforth.
"SO ORDERED."
Petitioners filed a motion for reconsideration but was denied by the Regional
Director in his Order dated November 11, 1996.
On appeal, the Office of the DOLE Secretary (also impleaded as respondent),
through former Secretary Leonardo A. Quisumbing, now Associate Justice of
this Court, issued an Order dated May 2, 1997 affirming with modification the
assailed Orders of the Regional Director in the sense that petitioners were
directed to pay only ₱38,967.50 to 15 out of the 193 affected employees. The
amount corresponds to the underpayment of their cost of living allowances
under RTWPB Wage Order No. 3.
Petitioners filed a motion for reconsideration but was denied in an Order
dated April 23, 1998.
On May 20, 1998, petitioners filed a second motion for reconsideration, but it
was merely noted without action, the same being prohibited.4 This prompted
petitioners to file with this Court, on May 13, 1999, a petition for certiorari
which we referred to the Court of Appeals pursuant to our ruling in St.
Martin’s Funeral Home vs. NLRC.5
In a Resolution dated August 31, 1999, the Court of Appeals dismissed the
petition for being late, holding that:
"It appears that petitioners received a copy of the Order dated May 2, 1997
on May 15, 1997; that they filed a motion for partial reconsideration of said
Order on May 19, 1997, which was denied in an Order dated April 23, 1998, a
copy of which was received by them on May 5, 1998; that they filed a second
motion for reconsideration on May 20, 1998, which was noted without action
for being a mere scrap of paper, in a Resolution dated March 30, 1999, a
copy of which was received by them on April 20, 1999.
Section 4, Rule 65 of the 1997 Rules of Civil Procedure, as amended,
provides that the petition for certiorari may be filed not later than sixty (60)
days from notice of the judgment, order or resolution sought to be assailed;
that a motion for reconsideration of said judgment, order or resolution filed in
due time shall interrupt the running of the sixty (60) day period; and in case of
denial of said motion, the petition may be filed within the remaining period,
but which shall not be less than five (5) days in any event, reckoned from
notice of such denial.
It is clear from the foregoing provision that only one motion for
reconsideration of the judgment, order or resolution assailed is allowed
for purposes of interrupting the sixty (60) day period for filing a petition
for certiorari.
Moreover, granting that the filing of a second motion for reconsideration of an
Order issued by the Secretary of Labor in Labor Standard cases is not a
prohibited pleading under the rules of said office, however, the second motion
for reconsideration filed by petitioners was a mere reiteration of the
arguments raised in their first motion for reconsideration and passed upon in
the Order dated April 23, 1998. The second motion for reconsideration was,
therefore, pro forma. A pro forma motion does not toll the running of the
prescriptive period.
Inasmuch that petitioners allowed four (4) days to lapse from receipt of the
Order dated May 2, 1997 before filing a motion for reconsideration thereof,
they had only fifty-six (56) days left from May 5, 1998, when they received
a copy of the order dated April 23, 1998 denying said motion for
reconsideration, or until June 30, 1998, within which to file the petition for
certiorari. However, it was only on May 13, 1999 that the instant petition
was filed.
WHEREFORE, the instant petition is hereby DISMISSED for having been
filed out of time.
SO ORDERED."
Petitioners filed a motion for reconsideration, however, the same was denied
by the Appellate Court in its Resolution dated June 5, 2000.
Petitioners, in the instant petition for review on certiorari, contend that the
Court of Appeals erred (1) in holding that a second motion for reconsideration
is prohibited; and (2) in dismissing the petition for certiorari for being late.
Section 1, Rule IV in relation to Section 5, Rule V of the Rules on the
Disposition of Labor Standards Cases in the DOLE Regional Offices provide:
"RULE IV
APPEALS
Section 1. Appeal. – The Order of the Regional Director shall be final and
executory unless appealed to the Secretary of Labor and Employment
within ten (10) calendar days from receipt thereof.
xxx
RULE V
EXECUTION
xxx
Section 5. Finality of decisions of the Secretary of Labor and Employment. –
The decisions, orders or resolutions of the Secretary of Labor and
Employment shall become final and executory after ten (10) calendar
days from receipt of the records of the case. The Regional Director shall
issue a writ of execution to enforce the order or decision of the Secretary.
The filing of a petition for certiorari before the Supreme Court (now
before the Court of Appeals pursuant to the ruling in St. Martin’s
Funeral Home vs. NLRC) shall not stay the execution of the order or
decision unless the aggrieved party secures a temporary restraining order
from the Court within fifteen (15) calendar days from the date of finality of the
order or decision or posts a supersedeas bond in an amount which is
adequate to protect the interests of the prevailing party subject to the
approval of the Secretary."
In National Federation of Labor vs. Laguesma,6 we ruled that "the remedy of
an aggrieved party in a Decision or Resolution of the Secretary of the
DOLE is to timely file a motion for reconsideration as a precondition for
any further or subsequent remedy, and then seasonably file a special
civil action for certiorari under Rule 65 of the 1997 Rules of Civil
Procedure." Under this Rule, petitioners should have filed their petition for
certiorari within 60 days7 from receipt of the DOLE Secretary’s Order denying
their first motion for reconsideration.
In the instant petition, it may be recalled that upon receipt on May 5, 1998 of
the April 23, 1998 Order of the Office of the DOLE Secretary denying their
motion for reconsideration, petitioners, on May 20, 1998, filed a second
motion for reconsideration, a prohibited motion. It was only on May 13,
1999 that petitioners filed a petition for certiorari. Clearly, petitioners
incurred a delay of almost one year.
In Manila Midtown Hotels & Land Corp. vs. NLRC,8 we held that "certiorari,
being an extraordinary remedy, the party who seeks to avail of the same must
strictly observe the rules laid down by law." Considering that the assailed
Orders of the DOLE Secretary have become final and executory,9 hence, the
merits of the case can no longer be reviewed to determine if he could be
faulted for grave abuse of discretion.10
Petitioners, in a desperate attempt to bolster their position that a second
motion for reconsideration is allowed, rely on our rulings in Barbizon
Philippines, Inc. vs. Nagkakaisang Supervisor ng Barbizon Philippines, Inc.,11
A’ Prime Security Services, Inc. vs. Drilon,12 United Aluminum Fabricators
Workers Union vs. Secretary of Labor and Employment,13 and Icasiano vs.
Office of the President,14 where petitioners therein filed not only a second
motion for reconsideration, but also a third motion for reconsideration from
the assailed Orders of the Office of the DOLE Secretary.
Suffice it to say that even if petitioners’ second motion is in order, however, it
is a pro forma motion. As aptly stated by the Court of Appeals, "the second
motion for reconsideration filed by petitioners was a mere reiteration of the
arguments raised in their first motion for reconsideration and passed upon in
the Order dated April 23, 1998."
In Vda de Espina vs. Abaya,15 we held that a second motion for
reconsideration, being pro-forma, does not suspend the period to file a
petition for certiorari, thus:
"The grounds stated in said motion being in reiteration of the same
grounds alleged in his first motion, the same is pro-forma.
xxx
Furthermore, the second motion for reconsideration has not stated new
grounds considering that the alleged failure of the Clerk of Court to set
plaintiffs' motion for reconsideration, although seemingly a different ground
than those alleged in their first motion for reconsideration, is only incidental to
the issues raised in their first motion for reconsideration, as it only refers to
the right of plaintiffs' counsel to argue his motion in court just to amplify the
same grounds already denied by the court.
Therefore, it is very evident that the second motion for reconsideration
being pro-forma did not suspend the running of the period of filing a
petition for certiorari or appeal, as the case may be."
WHEREFORE, the petition is DENIED. The assailed Resolutions dated
August 31, 1999 and June 5, 2000 of the Court of Appeals in CA-G.R. SP No.
54296 are AFFIRMED IN TOTO.
Costs against petitioners.
SO ORDERED.
Vitug*, Sandoval-Gutierrez**, Corona, and Carpio Morales, JJ., concur.
 [G.R. No. 114132. November 14, 1996.]

FE M. ALINDAO, Petitioner, v. HON. FELICISIMO O. JOSON,

in his capacity as the Administrator, Philippine Overseas
Employment Administration; PHILIPPINE OVERSEAS
EMPLOYMENT ADMINISTRATION, and HISHAM GENERAL
SERVICES CONTRACTOR, Respondents.

SYLLABUS

1. REMEDIAL LAW; SPECIAL CIVIL ACTIONS; CERTIORARI; THE

FILING OF A MOTION FOR RECONSIDERATION AS A REQUIREMENT
MAY BE DISPENSED WITH WHEN THE ISSUES RAISED ARE ON
PURE QUESTIONS OF LAW AND WANT OF JURISDICTION. — The
petitioner has explained why she forthwith availed of this remedy
without first filing a motion to reconsider the assailed order of 10
February 1994. Evidently, she anticipated the invocation of the
doctrines requiring the filing of such motion for reconsideration and
the exhaustion of administrative remedies. We rule in her favor.
The petition involves a pure question of law and the challenged
order is void for want of jurisdiction on the part of respondent
Joson. It has been held that the requirement of a motion for
reconsideration may be dispensed with in the following instances:
(1) when the issue raised is one purely of law; (2) where public
interest is involved; (3) in cases of urgency; and (4) where special
circumstances warrant immediate or more direct action. On the
other hand, among the accepted exceptions to the rule on
exhaustion of administrative remedies are: (1) where the question
in dispute is purely a legal one; and (2) where the controverted act
is patently illegal or was performed without jurisdiction or in excess
of jurisdiction.

2. ID.; THE 1991 POEA RULES AND REGULATIONS SHOULD BE

GIVEN RETROACTIVE APPLICATION. — We likewise agree with the
petitioner that the 1991 POEA Rules and Regulations should be
given retroactive application. The position taken by respondent
Joson on this issue is tenuous. The said Rules and Regulations, not
affecting substantive rights, are clearly procedural in nature. It is
settled that procedural laws may be given retroactive effect, there
being no vested rights in rules of procedure.
3. ID.; PRINCIPLE OF ADHERENCE OF JURISDICTION; CURATIVE
OR REMEDIAL STATUTE; RECOGNIZED EXCEPTION TO THE RULE;
CASE AT BAR. — We have recognized an exception to the rule that
where a court has already obtained and is exercising jurisdiction
over a controversy, its jurisdiction to proceed to the final
determination of the case is not affected by new legislation
transferring jurisdiction over such proceedings to another tribunal.
This exception is when the change in jurisdiction is curative in
character. Thus, this Court gave retroactive effect to P.D. No. 1691
which substantially re-enacted Article 217 of the Labor Code after
the latter was amended by P.D. No. 1367 by, inter alia, removing
from the enumeration of cases falling under the exclusive
jurisdiction of Labor Arbiters "money claims arising from employer-
employee relations." If this were so, then it is with more reason
that the provision of the 1991 POEA Rules and Regulations vesting
upon the Secretary of Labor jurisdiction over motions for
reconsideration (to be treated as petitions for review) should be
given retroactive effect, not only because it is a rule of procedure,
but also because it is remedial or curative since the 1985 POEA
Rules and Regulations is unclear as to the agency which shall
resolve such motions. Section 18, Rule VI of Book II of the latter
merely states that "a motion for reconsideration of an order of
suspension or an appeal to the Minister (Secretary) from an order
canceling a license or authority may be entertained only when filed
with the LRO within ten (10) working days from service of the order
or decision." Office Order No. 3, Series of 1991, dated 14
November 1991 and issued by POEA Adjudication Office Director
Jaime P. Jimenez, ordering all Hearing Officers of the Adjudication
Office to resolve on or before the end of November 1991 all
pending motions for reconsideration filed prior to the effectivity of
the 1991 POEA Rules and Regulations provided no authority for
respondent Joson to resolve on 10 February 1994 Hisham’s motion
to reconsider the Order of 20 November 1990.

4. LABOR AND SOCIAL LEGISLATIONS; 1991 POEA RULES AND

REGULATIONS; BOOK VI, RULE IV SECTIONS 2 AND 3 THEREOF;
CONSTRUED. — Book VI is entitled "Recruitment Violation and
Related Cases," while RULE IV (Review) thereof provides the
procedure and mechanisms of an appeal from an order of the POEA
in recruitment violation cases. Section 1 of Rule IV vests exclusive
jurisdiction to review the said cases upon the Secretary of Labor
and Employment, while Sections 2 and 3 of Rule IV declare: Section
2. Where to file. -- petitions for review shall be filed within ten (10)
calendar days from receipt of the Order by the parties. All Motions
for Reconsideration shall be treated as a petition for review. Section
3. Effects of Filing a Petition for Review. -- The filing of a petition
for review shall not automatically stay the execution of the order of
suspension unless restrained by the secretary. It is thus clear that
under the 1991 POEA Rules and Regulations, Hisham’s Motion for
the Reconsideration of the Order of 28 November 1990 on the
administrative aspect of the case (recruitment, etc.) was to be
treated as a petition for review which should have been resolved by
the Secretary of Labor and Em[ployment. We agree, however, with
the POEA that the questioned Order of 10 February 1994, taken in
its entirety, only pertains to the 28 November 1990 Order on the
Administrative aspect (recruitment) of the case. Any vague
reference to the subject or merits of the Decision of 28 November
1990 cannot modify nor amend the Decision which had long
become final and already the subject of a writ of execution. Such
reference is, at worst, merely imprecise statements which cannot
alter the final character of the Decision.

DECISION

DAVIDE, JR., J.:

In this petition for certiorari, prohibition and mandamus under Rule

65 of the Rules of Court, petitioner Fe M. Alindao seeks to set aside
the 10 February 1994 Order of respondent Philippine Overseas
Employment Administration (POEA) Administrator Felicisimo O.
Joson in POEA Case No. (L) 89-08-703, which reversed the 28
November 1990 Order, for having been issued with grave abuse of
discretion.

The material facts leading to the instant petition are not disputed.

Petitioner applied, was interviewed and qualified for employment in

Saudi Arabia as a laboratory aide, for a term of one year and with a
monthly salary of US$370.00, through private-respondent Hisham
General Services Contractor (hereinafter Hisham). 1 She paid his
Hisham P15,000.00 as a placement fee, but no receipt was issued.
She did not insist on a receipt as she saw her name written in a
logbook to record the transaction and Hisham assured her of
employment by presenting her passport already stamped with a
visa and her plane ticket.

Petitioner left for Saudi Arabia on 9 March 1988. Upon arrival, she
was met by a representative of her employer, the Dahem Clinic.
She was told she would stay at Alcobar until needed.

Two weeks later, the petitioner’s employer brought her to his

residence and was made to work as a domestic helper. Her
employer did not treat her well and paid her only 660 Saudi riyals.
The unfair working conditions prompted the petitioner to ask that
she be sent home, but she was merely returned to Alcobar. She
worked for only a month and six days. From there, he worked at
several residences until she saved enough money to return home.

She arrived in the Philippines on 7 July 1989, and filed with the
POEA a complaint against Hisham for breach of contract, violation
of the terms and conditions of its authority as a service contractor,
and violation of the following provisions of the Labor Code: Article
32 (requiring issuances of receipts for fees paid), Article 34 (a)
(prohibiting one from charging an amount greater than that
specified in the schedule of allowable fees), and Article 34(b)
(prohibiting one from furnishing false information in relation to
recruitment or employment [misrepresentation]). 2 The case was
docketed as POEA Case No. (L) 89-08-703.

A request for verification revealed that Hisham’s license as a

service contractor was to expire on 7 March 1991. 3

After appropriate proceedings, POEA Administrator Jose N.

Sarmiento handed down on 28 November 1990 in POEA Case No.
(L) 89-08-703: (a) a Decision on the petitioner’s money claims;
and (b) an Order pertaining to the administrative aspect
(recruitment) of the case.

The dispositive portion of the Decision reads as follows:chanrob1es virtual 1aw library

In view of the foregoing, respondent Hisham General Services

Contractor is hereby ordered to pay complainant the following: chanrob1es virtual 1aw library
1. US$3,120 or its peso equivalent based on the current rate of
representing the total salary differentials for 12 months at
US$260.00 a month.

2. P20,603.00 refund of the plane ticket.

SO ORDERED." 4

The dispositive portion of the Order reads: chanrob1es virtual 1aw library

WHEREFORE, premises considered respondent Hisham General

Services is hereby ordered to refund complainant the amount of
P13,500.00 representing the excess amount of her placement fee.
(as Hisham was licensed merely as a service contractor, it was
authorized only to recruit workers for its own employment abroad
and to charge a maximum of P1,500.00 as documentation
expenses.

Further, respondent is hereby ordered suspended for two (2)

months or pay a penalty fine of P20,000.00 for illegal exaction, and
an additional penalty of suspension for two (2) months or fine of
P20,000.00 for misrepresentation.

It is understood that the penalty of suspension shall be

cumulatively served.

SO ORDERED." 5

On 27 December 1990, Hisham appealed the Decision to the

National Labor Relations Commission (NLRC), 6 which docketed the
appeal as NLRC NCR CA 001 50291, and filed a motion for
reconsideration of the Order with the POEA. 7

In its resolution of 30 July 1992, 8 the NLRC affirmed in toto the

challenged Decision. Hisham’s motion to reconsider 9 the NLRC
resolution was denied by the NLRC in its resolution of 17 February
1993. 10 The NLRC resolution became final and executory on 4
April 1993 and the corresponding entry of judgment was made on
18 May 1993. 11
On 22 April 1993, the petitioner filed with the POEA a motion for
execution of the Decision on the money claims, 12 which Hisham
opposed on 29 April 1993 on the ground that Dahem Clinic was
already accredited with another agency. 13 On 10 September 1993,
the POEA granted the petitioner’s motion 14 and on 7 October
1993, it issued a writ of execution 15 which was, however, for
execution of both the Decision on the money claims and the Order
in the administrative aspect of the case.

On 14 October 1993, Hisham then filed a motion for clarification

and/or modification of the writ of execution, asserting that the
Order in the administrative case could not be enforced as the
motion for reconsideration of the Order was still pending with the
POEA and remained unresolved. 16

On 10 February 1994, respondent POEA Administrator Felicisimo O.

Joson issued the Order subject of this petition, the pertinent
portions of which read as follows:
chanrob1es virtual 1aw library

Complainant failed to establish or even show the details of how,

when, and where and to whom she paid the amount of P15,000.00.
[W]e subscribe to the Jurisprudence on this matter that mere
general allegations of payment of excessive placement fees cannot
be given merit as the charge of illegal exaction is considered a
grave offense which could cause the suspension or cancellation of
the agency’s license and should be proven and substantiated by
clear, credible and competent evidence which is not obtaining in the
case at bar.

We likewise find unmeritorious the charge of misrepresentation

under Article 34 (b) of the Labor Code, as amended. We
understand that complainant worked beyond the term of her
employment contract which was sixteen (16) months while she was
hired for twelve (I 2) months. We find it improbable that if there
was really a violation of the contract, complainant could not have
waited for the expiration of said contract much more extended her
stay with her employer. Complainant’s allegations are contrary to
the normal reaction of a person who was aggrieved. Taking into
consideration her applied position as a laboratory aide which calls
for a higher educational qualification than a domestic helper, she
could have well asserted her right and availed of the remedy if not
immediately but within a reasonable length of time.
We noted that the alleged change of complainant’s position was
without the knowledge and consent of respondent agency. It was
shown that respondent never knew or learned that complainant had
a complaint not until after the filing of the instant case. Based from
the foregoing circumstances respondent’s liability is limited if there
is substantial evidence that it has committed representation in the
processing of complainant which is not obtaining in this case.

WHEREFORE, in the light of the foregoing premises, we find the

Motion for Reconsideration meritorious and this case is hereby
ordered dismissed. 17

Respondent Joson took cognizance of Hisham’s Motion for

Reconsideration of the 28 November 1990 Order because it was
filed prior to the effectivity of the 1991 POEA Rules and
Regulations; hence, it was governed by the "198[5] POEA rules and
Regulations."cralaw virtua1aw library

On 16 March 1994, the petitioner filed this petition for Certiorari,

Prohibition and Mandamus, with prayer for Temporary Restraining
Order and/or Writ of Preliminary Injunction, Damages, and
Disbarment with this Court. In the main, the petitioner asserts
most strongly that the 28 November 1990 Decision had become
final and executory, thus respondent Joson’s 10 February 1994
Order which had the effect of modifying the said decision, was
issued with grave abuse of discretion. She maintains that
respondent Joson should have applied the 1991 POEA Rules and
Regulations, for, being rules of procedure, they may be applied
retroactively. She further contends that Hisham’s appeal of the
money claims case carried one with it the appeal of the recruitment
case, as the POEA could not have disposed of one without disposing
of the other; moreover, citing Nuñal v. Court of Appeals, 18 a final
and executory judgment may not be modified even if the
modification was meant to correct what was perceived to be
erroneous conclusions of fact. As to the propriety of this petition,
despite the absence of a motion for reconsideration, the petitioner
alleges inadequacy of an appeal or a motion for reconsideration,
and the patent nullity of the 10 February 1994 Order. She
concludes with a prayer or the reversal of the questioned order,
immediate execution of the 28 November 1990 Decision, an award
of P100,000.00 as exemplary damages, and the disbarment of
respondent Joson for professional misconduct. 19

On 28 July 1994, the Office of the Solicitor General filed its

Comment contending that the 28 November 1990 Order imposing
administrative disciplinary sanctions for violations not arising from
an employer-employee relationship was immediately executory and
inappealable pursuant to Section 6 (Inappealable Disciplinary
Cases), Rule V (Appeal), Book VI (Adjudication Rules) and Section
3 (Imposition of Administrative Sanctions Immediately Executory),
Rule VI, Book VI (Adjudication Rules) of the 1985 POEA Rules and
Regulations. Moreover, while a motion for reconsideration was not
expressly prohibited, no provision in the said Rules and Regulations
allowed such a motion. Further, even disregarding jurisdictional
infirmities, what stands unrebutted is that Hisham committed
misrepresentation, breach of contract and illegal exaction. The
Office of the Solicitor General continues that under the
circumstances, it would have been impossible to require the
petitioner to produce a receipt and unreasonable to expect her to
have lodged a complaint against Hisham at an earlier time. It then
recommends that the petitioner’s complaint for disbarment be
referred to the Integrated Bar of the Philippines for investigation
and appropriate action and that the POEA be granted a new period
within which to file its Comment. 20

On 3 January 1995, Hisham filed its Comment and admitted the

final and executory nature of the Decision on the money claims.
However, it points to Section 1, Rule IV, Book VI and Rule V, Book
VII of the 1991 POEA Rules and Regulations as support for its
thesis that the administrative aspect of the case could not have
been deemed final and executory. Hisham then questions the
propriety of the petition in light of the non-observance of the rule
on exhaustion of administrative remedies, which mandates that the
questioned Order should have been first appealed to the Office of
the Secretary of the Department of Labor and Employment and the
Office of the President, with resort to this Court on pure questions
of law. 21

On 9 March 1995, the POEA filed its Comment wherein it rejects the
applicability of the provisions of the 1985 POEA Rules and
Regulations cited by the Solicitor General, as such pertain to
disciplinary cases against overseas contract workers, not to
agencies. It contends that the applicable provision is Section 18,
Rule VI, Book II of the 1985 POEA Rules and Regulations 22
Moreover, in accordance with POEA Office Order No. 3, Adjudication
Office Series of 1991, 23 it was the POEA Adjudication Office which
was empowered to resolve all Motions for Reconsideration filed
prior to the effectivity of the 1991 POEA Rules and Regulations.
Finally, the POEA claimed that the dispositive portion of the
questioned Order dismissing the case merely referred to the
recruitment violation and did not include the complaint for money
claims. 24

We gave due course to the petition and required the parties to

submit their respective memoranda. Hisham and the POEA adopted
their respective Comments as their Memoranda, while the petitioner
filed her Memorandum on 23 August 1996.

The petition must be granted.

We first assess the propriety of this special civil action under Rule
65 of the Rules of Court. The petitioner has explained why she
forthwith availed of this remedy without first filing a motion to
reconsider the assailed order of 10 February 1994. Evidently, she
anticipated the invocation of the doctrines requiring the filing of
such motion for reconsideration 25 and the exhaustion of
administrative remedies. 26 We rule in her favor. The petition
involves a pure question of law and the challenged order is void for
want of jurisdiction on the part of respondent Joson. It has been
held that the requirement of a motion for reconsideration may be
dispensed with in the following instances: (1) when the issue raised
is one purely of law; (2) where public interest is involved; (3) in
cases of urgency; and (4) where special circumstances warrant
immediate or more direct action. 27 On the other hand, among the
accepted exceptions to the rule on exhaustion of administrative
remedies are: (1) where the question in dispute is purely a legal
one; and (2) where the controverted act is patently illegal or was
performed without jurisdiction or in excess of jurisdiction. 28

We likewise agree with the petitioner that the 1991 POEA Rules and
Regulations should be given retroactive application. The position
taken by respondent Joson on this issue is tenuous. The said Rules
and Regulations, not affecting substantive rights, are clearly
procedural in nature. It is settled that procedural laws may be
given retroactive effect, there being no vested rights in rules of
procedure. 29

We have recognized an exception to the rule that where a court has

already obtained and is exercising jurisdiction over a controversy,
its jurisdiction to proceed to the final determination of the case is
not affected by new legislation transferring jurisdiction over such
proceedings to another tribunal. This exception is when the change
in jurisdiction is curative in character. 30 Thus, this Court gave
retroactive effect to P.D. No. 1691 which substantially re-enacted
Article 217 of the Labor Code after the latter was amended by P.D.
No. 1367 by, inter alia, removing from the enumeration of cases
falling under the exclusive jurisdiction of Labor Arbiters "money
claims arising from employer-employee relations." 31 If this were
so, then it is with more reason that the provision of the 1991 POEA
Rules and Regulations vesting upon the Secretary of Labor
jurisdiction over motions for reconsideration (to be treated as
petitions for review) should be given retroactive effect, not only
because it is a rule of procedure, but also because it is remedial or
curative since the 1985 POEA Rules and Regulations is unclear as to
the agency which shall resolve such motions. Section 18, Rule VI of
Book II of the latter merely states that "a motion for
reconsideration of an order of suspension or an appeal to the
Minister (Secretary) from an order cancelling a license or authority
may be entertained only when filed with the LRO within ten (10)
working days from service of the order or decision." Office Order
No. 3, Series of 1991, dated 14 November 1991 and issued by
POEA Adjudication Office Director Jaime P. Jimenez, ordering all
Hearing Officers of the Adjudication Office to resolve on or before
the end of November 1991 all pending motions for reconsideration
filed prior to the effectivity of the 1991 POEA Rules and Regulations
provided no authority for respondent Joson to resolve on 10
February 1994 Hisham’s motion to reconsider the Order of 20
November 1990.

We now examine the pertinent provisions of the 1991 POEA Rules

and Regulations. Book VI is entitled "Recruitment Violation and
Related Cases," while Rule IV (Review) thereof provides the
procedure and mechanisms of an appeal from an order of the POEA
in recruitment violation cases. Section 1 of Rule IV vests exclusive
jurisdiction to review the said cases upon the Secretary of Labor
and Employment, while Sections 2 and 3 of Rule IV declare: chanrob1es virtual 1aw library
Section 2. When to File. — petitions for review shall be filed within
ten (10) calendar days from receipt of the Order by the parties.

All Motions for Reconsideration shall be treated as a petition for

review.

Section 3. Effects of Filing Petition for Review. — The filing of a

petition for review shall not automatically stay the execution of the
order of suspension unless restrained by the Secretary.

It is thus clear that under the 1991 POEA Rules and Regulations,
Hisham’s Motion for the Reconsideration of the Order of 28
November 1990 on the administrative aspect of the case
(recruitment, etc.) was to be treated as a petition for review which
should have been resolved by the Secretary of Labor and
Employment.

We agree, however, with the POEA that the questioned Order of 10

February 1994, taken in its entirety, only pertains to the 28
November 1990 Order on the Administrative aspect (recruitment)
of the case. Any vague reference to the subject or merits of the
Decision of 28 November 1990 cannot modify nor amend the
Decision which had long become final and already the subject of a
writ of execution. Such reference is, at worst, merely imprecise
statements which cannot alter the final character of the Decision.
Even Hisham, in its Comment to the petition, explicitly admits
that:chanrob1es virtual 1aw library

The case filed with the NLRC became final and executory and
subject of a writ of execution and petitioner at this point in time
was able to claim and receive the entire amount of said claim . . .
32

Aside from this statement, however, the record before this Court is
bereft of evidence tending to show that the writ of execution as
regards the money claims case has indeed been implemented to
any extent.

WHEREFORE, the instant petition is GRANTED. The challenged

Order of 10 February 1994 of respondent POEA Administrator
Felicisimo O. Joson in POEA Case No. (L) 89-08-703 is hereby SET
ASIDE. The public respondent Philippine Overseas Employment
Administration is hereby DIRECTED to transmit the record of the
said case to the Secretary of Labor and Employment for the prompt
disposition, under the 1991 POEA Rules and Regulations, of the
Motion for Reconsideration of the POEA Order of 28 November 1990
on the administrative aspect (recruitment) of the case, and
ORDERED to implement with reasonable dispatch the Writ of
Execution of 7 October 1993 for the execution of the Decision of 28
November 1990 on the money claims.

Costs against the private Respondent.

SO ORDERED.

Narvasa, C.J., Melo, Francisco and Panganiban, JJ., concur.

SECOND DIVISION
G.R. No. 180962, February 26, 2014
PHILTRANCO SERVICE ENTERPRISES, INC., REPRESENTED
BY ITS VICE–PRESIDENT FOR ADMINISTRATION, M/GEN.
NEMESIO M. SIGAYA, Petitioner, v. PHILTRANCO WORKERS
UNION–ASSOCIATION OF GENUINE LABOR ORGANIZATIONS
(PWU–AGLO), REPRESENTED BY JOSE JESSIE OLIVAR,
Respondent.
DECISION
DEL CASTILLO, J.:
While a government office may prohibit altogether the filing of a
1

motion for reconsideration with respect to its decisions or orders,

the fact remains that certiorari inherently requires the filing of a
motion for reconsideration, which is the tangible representation of
the opportunity given to the office to correct itself. Unless it is filed,
there could be no occasion to rectify. Worse, the remedy of
certiorari would be unavailing. Simply put, regardless of the
proscription against the filing of a motion for reconsideration, the
same may be filed on the assumption that rectification of the
decision or order must be obtained, and before a petition for
certiorari may be instituted.

This Petition for Review on Certiorari2 seeks a review and setting

aside of the September 20, 2007 Resolution3 of the Court of
Appeals (CA) in CA–G.R. SP No. 100324,4 as well as its December
14, 2007 Resolution5 denying petitioner’s Motion for
Reconsideration.

Factual Antecedents

On the ground that it was suffering business losses, petitioner

Philtranco Service Enterprises, Inc., a local land transportation
company engaged in the business of carrying passengers and
freight, retrenched 21 of its employees. Consequently, the company
union, herein private respondent Philtranco Workers Union–
Association of Genuine Labor Organizations (PWU–AGLU), filed a
Notice of Strike with the Department of Labor and Employment
(DOLE), claiming that petitioner engaged in unfair labor practices.
The case was docketed as NCMB–NCR CASE No. NS–02–028–07.

Unable to settle their differences at the scheduled February 21,

2007 preliminary conference held before Conciliator–Mediator
Amorsolo Aglibut (Aglibut) of the National Conciliation and
Mediation Board (NCMB), the case was thereafter referred to the
Office of the Secretary of the DOLE (Secretary of Labor), where the
case was docketed as Case No. OS–VA–2007–008.
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After considering the parties’ respective position papers and other

submissions, Acting DOLE Secretary Danilo P. Cruz issued a
Decision6 dated June 13, 2007, the dispositive portion of which
reads, as follows:
chanRoblesvirtualLawlibrary
WHEREFORE, premises considered, we hereby ORDER Philtranco to:

1. REINSTATE to their former positions, without loss of seniority

rights, the ILLEGALLY TERMINATED 17 “union officers”, x x x, and
PAY them BACKWAGES from the time of termination until their actual
or payroll reinstatement, provided in the computation of backwages
among the seventeen (17) who had received their separation pay
should deduct the payments made to them from the backwages due
them.

2. MAINTAIN the status quo and continue in full force and effect the
terms and conditions of the existing CBA – specifically, Article VI on
Salaries and Wages (commissions) and Article XI, on Medical and
Hospitalization – until a new agreement is reached by the parties;
and

3. REMIT the withheld union dues to PWU–AGLU without unnecessary

delay.

The PARTIES are enjoined to strictly and fully comply with the
provisions of the existing CBA and the other dispositions of this
Decision.

SO ORDERED.7 ChanRoblesVirtualawlibrary

Petitioner received a copy of the above Decision on June 14, 2007.

It filed a Motion for Reconsideration on June 25, 2007, a Monday.
Private respondent, on the other hand, submitted a “Partial
Appeal.”

In an August 15, 2007 Order8 which petitioner received on August

17, 2007, the Secretary of Labor declined to rule on petitioner’s
Motion for Reconsideration and private respondent’s “Partial
Appeal”, citing a DOLE regulation9 which provided that voluntary
arbitrators’ decisions, orders, resolutions or awards shall not be the
subject of motions for reconsideration. The Secretary of Labor
held:chanRoblesvirtualLawlibrary

WHEREFORE, the complainant’s and the respondent’s respective

pleadings are hereby NOTED as pleadings that need not be acted
upon for lack of legal basis.

SO ORDERED.10 ChanRoblesVirtualawlibrary

The Assailed Court of Appeals Resolutions

On August 29, 2007, petitioner filed before the CA an original
Petition for Certiorari and Prohibition, and sought injunctive relief,
which case was docketed as CA–G.R. SP No. 100324.

On September 20, 2007, the CA issued the assailed Resolution

which decreed as follows: chanRoblesvirtualLawlibrary

WHEREFORE, premises considered, the instant Petition for Certiorari

and Prohibition with Prayer for Temporary Restraining Order and
Preliminary Injunction is hereby DISMISSED. Philtranco’s pleading
entitled “Reiterating Motion for The Issuance of Writ of Preliminary
Injunction and/or Temporary Restraining Order” is NOTED.

SO ORDERED.11 ChanRoblesVirtualawlibrary

The CA held that, in assailing the Decision of the DOLE voluntary

arbitrator, petitioner erred in filing a petition for certiorari under
Rule 65 of the 1997 Rules, when it should have filed a petition for
review under Rule 43 thereof, which properly covers decisions of
voluntary labor arbitrators.12 For this reason, the petition is
dismissible pursuant to Supreme Court Circular No. 2–90.13 The CA
added that since the assailed Decision was not timely appealed
within the reglementary 15–day period under Rule 43, the same
became final and executory. Finally, the appellate court ruled that
even assuming for the sake of argument that certiorari was indeed
the correct remedy, still the petition should be dismissed for being
filed out of time. Petitioner’s unauthorized Motion for
Reconsideration filed with the Secretary of Labor did not toll the
running of the reglementary 60–day period within which to avail of
certiorari; thus, from the time of its receipt of Acting Labor
Secretary Cruz’s June 13, 2007 Decision on June 14 or the following
day, petitioner had until August 13 to file the petition – yet it filed
the same only on August 29.

Petitioner filed a Motion for Reconsideration, which was denied by

the CA through the second assailed December 14, 2007 Resolution.
In denying the motion, the CA held that the fact that the Acting
Secretary of Labor rendered the decision on the voluntary
arbitration case did not remove the same from the jurisdiction of
the NCMB, which thus places the case within the coverage of Rule
43.

Issues
In this Petition,14 the following errors are assigned:
chanRoblesvirtualLawlibrary

THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE

PETITIONER AVAILED OF THE ERRONEOUS REMEDY IN FILING A
PETITION FOR CERTIORARI UNDER RULE 65 INSTEAD OF UNDER
RULE 43 OF THE RULES OF COURT.

THE HONORABLE COURT OF APPEALS ERRED WHEN IT HELD THAT

THE PETITION FOR CERTIORARI WAS FILED OUT OF TIME.

THE HONORABLE COURT OF APPEALS ERRED WHEN IT DISMISSED

THE PETITION OUTRIGHT ON THE BASIS OF PURE
TECHNICALITY.15 ChanRoblesVirtualawlibrary

Petitioner’s Arguments

In its Petition and Reply,16 petitioner argues that a petition for

certiorari under Rule 65 – and not a petition for review under Rule
43 – is the proper remedy to assail the June 13, 2007 Decision of
the DOLE Acting Secretary, pointing to the Court’s pronouncement
in National Federation of Labor v. Hon. Laguesma17 that the remedy
of an aggrieved party against the decisions and discretionary acts
of the NLRC as well as the Secretary of Labor is to timely file a
motion for reconsideration, and then seasonably file a special civil
action for certiorari under Rule 65 of the 1997 Rules of Civil
Procedure.

Petitioner adds that, contrary to the CA’s ruling, NCMB–NCR CASE

No. NS–02–028–07 is not a simple voluntary arbitration case. The
character of the case, which involves an impending strike by
petitioner’s employees; the nature of petitioner’s business as a
public transportation company, which is imbued with public
interest; the merits of its case; and the assumption of jurisdiction
by the Secretary of Labor – all these circumstances removed the
case from the coverage of Article 262,18 and instead placed it under
Article 263,19 of the Labor Code. Besides, Rule 43 does not apply to
judgments or final orders issued under the Labor Code.20
On the procedural issue, petitioner insists that it timely filed the
Petition for Certiorari with the CA, arguing that Rule 65 fixes the
60–day period within which to file the petition from notice of the
denial of a timely filed motion for reconsideration, whether such
motion is required or not. It cites the Court’s pronouncement in
ABS–CBN Union Members v. ABS–CBN Corporation21 that “before a
petition for certiorari under Rule 65 of the Rules of Court may be
availed of, the filing of a motion for reconsideration is a condition
sine qua non to afford an opportunity for the correction of the error
or mistake complained of” and since “a decision of the Secretary of
Labor is subject to judicial review only through a special civil action
of certiorari x x x [it] cannot be resorted to without the aggrieved
party having exhausted administrative remedies through a motion
for reconsideration”.

Respondent’s Arguments

In its Comment,22 respondent argues that the Secretary of Labor

decided Case No. OS–VA–2007–008 in his capacity as voluntary
arbitrator; thus, his decision, being that of a voluntary arbitrator, is
only assailable via a petition for review under Rule 43. It further
echoes the CA’s ruling that even granting that certiorari was the
proper remedy, the same was filed out of time as the filing of a
motion for reconsideration, which was an unauthorized pleading,
did not toll the running of the 60–day period. Finally, it argues that
on the merits, petitioner’s case could not hold water as it failed to
abide by the requirements of law in effecting a retrenchment on the
ground of business losses.

Our Ruling

The Court grants the Petition.

It cannot be said that in taking cognizance of NCMB–NCR CASE No.

NS–02–028–07, the Secretary of Labor did so in a limited capacity,
i.e., as a voluntary arbitrator. The fact is undeniable that by
referring the case to the Secretary of Labor, Conciliator–Mediator
Aglibut conceded that the case fell within the coverage of Article
263 of the Labor Code; the impending strike in Philtranco, a public
transportation company whose business is imbued with public
interest, required that the Secretary of Labor assume jurisdiction
over the case, which he in fact did. By assuming jurisdiction over
the case, the provisions of Article 263 became applicable, any
representation to the contrary or that he is deciding the case in his
capacity as a voluntary arbitrator notwithstanding.

It has long been settled that the remedy of an aggrieved party in a

decision or resolution of the Secretary of Labor is to timely file a
motion for reconsideration as a precondition for any further or
subsequent remedy, and then seasonably file a special civil action
for certiorari under Rule 65 of the 1997 Rules on Civil Procedure.23
There is no distinction: when the Secretary of Labor assumes
jurisdiction over a labor case in an industry indispensable to
national interest, “he exercises great breadth of discretion” in
finding a solution to the parties’ dispute.24 “[T]he authority of the
Secretary of Labor to assume jurisdiction over a labor dispute
causing or likely to cause a strike or lockout in an industry
indispensable to national interest includes and extends to all
questions and controversies arising therefrom. The power is plenary
and discretionary in nature to enable him to effectively and
efficiently dispose of the primary dispute.”25 This wide latitude of
discretion given to the Secretary of Labor may not be the subject of
appeal.

Accordingly, the Secretary of Labor’s Decision in Case No. OS–VA–

2007–008 is a proper subject of certiorari, pursuant to the Court’s
pronouncement in National Federation of Labor v. Laguesma,26
thus:chanRoblesvirtualLawlibrary

Though appeals from the NLRC to the Secretary of Labor were

eliminated, presently there are several instances in the Labor Code
and its implementing and related rules where an appeal can be filed
with the Office of the Secretary of Labor or the Secretary of Labor
issues a ruling, to wit: chanRoblesvirtualLawlibrary

xxx

(6) Art. 263 provides that the Secretary of Labor shall decide or
resolve the labor dispute [over] which he assumed jurisdiction within
thirty (30) days from the date of the assumption of jurisdiction. His
decision shall be final and executory ten (10) calendar days after
receipt thereof by the parties.
From the foregoing we see that the Labor Code and its implementing
and related rules generally do not provide for any mode for reviewing
the decision of the Secretary of Labor. It is further generally provided
that the decision of the Secretary of Labor shall be final and
executory after ten (10) days from notice. Yet, like decisions of the
NLRC which under Art. 223 of the Labor Code become final after ten
(10) days, decisions of the Secretary of Labor come to this Court by
way of a petition for certiorari even beyond the ten–day period
provided in the Labor Code and the implementing rules but within
the reglementary period set for Rule 65 petitions under the 1997
Rules of Civil Procedure. x x x
xxx

In fine, we find that it is procedurally feasible as well as practicable

that petitions for certiorari under Rule 65 against the decisions of the
Secretary of Labor rendered under the Labor Code and its
implementing and related rules be filed initially in the Court of
Appeals. Paramount consideration is strict observance of the doctrine
on the hierarchy of the courts, emphasized in St. Martin Funeral
Homes v. NLRC, on “the judicial policy that this Court will not
entertain direct resort to it unless the redress desired cannot be
obtained in the appropriate courts or where exceptional and
compelling circumstances justify availment of a remedy within and
calling for the exercise of our primary jurisdiction."27 ChanRoblesVirtualawlibrary

On the question of whether the Petition for Certiorari was timely

filed, the Court agrees with petitioner’s submission. Rule 65 states
that where a motion for reconsideration or new trial is timely filed,
whether such motion is required or not, the petition shall be
filed not later than 60 days counted from the notice of the denial of
the motion.28 This can only mean that even though a motion for
reconsideration is not required or even prohibited by the concerned
government office, and the petitioner files the motion just the
same, the 60–day period shall nonetheless be counted from notice
of the denial of the motion. The very nature of certiorari – which
is an extraordinary remedy resorted to only in the absence of plain,
available, speedy and adequate remedies in the course of law –
requires that the office issuing the decision or order be given the
opportunity to correct itself. Quite evidently, this opportunity
for rectification does not arise if no motion for
reconsideration has been filed. This is precisely what the Court
said in the ABS–CBN Union Members case, whose essence
continues to this day. Thus: chanRoblesvirtualLawlibrary

Section 8, Rule VIII, Book V of the Omnibus Rules Implementing the

Labor Code, provides: chanRoblesvirtualLawlibrary
“The Secretary shall have fifteen (15) calendar days within which to
decide the appeal from receipt of the records of the case. The
decision of the Secretary shall be final and inappealable.” x x x
The aforecited provision cannot be construed to mean that the
Decision of the public respondent cannot be reconsidered since the
same is reviewable by writ of certiorari under Rule 65 of the Rules of
Court. As a rule, the law requires a motion for reconsideration to
enable the public respondent to correct his mistakes, if any. In Pearl
S. Buck Foundation, Inc., vs. NLRC, this Court held: chanRoblesvirtualLawlibrary

“Hence, the only way by which a labor case may reach the Supreme
Court is through a petition for certiorari under Rule 65 of the Rules
of Court alleging lack or excess of jurisdiction or grave abuse of
discretion. Such petition may be filed within a reasonable time from
receipt of the resolution denying the motion for reconsideration of
the NLRC decision.” x x x
Clearly, before a petition for certiorari under Rule 65 of the Rules of
Court may be availed of, the filing of a motion for reconsideration is
a condition sine qua non to afford an opportunity for the correction
of the error or mistake complained of.

So also, considering that a decision of the Secretary of Labor is

subject to judicial review only through a special civil action of
certiorari and, as a rule, cannot be resorted to without the aggrieved
party having exhausted administrative remedies through a motion
for reconsideration, the aggrieved party, must be allowed to move
for a reconsideration of the same so that he can bring a special civil
action for certiorari before the Supreme Court.29ChanRoblesVirtualawlibrary

Indeed, what needs to be realized is that while a government office

may prohibit altogether the filing of a motion for reconsideration
with respect to its decisions or orders, the fact remains that
certiorari inherently requires the filing of a motion for
reconsideration, which is the tangible representation of the
opportunity given to the office to correct itself. Unless it is filed,
there could be no occasion to rectify. Worse, the remedy of
certiorari would be unavailing. Simply put, regardless of the
proscription against the filing of a motion for reconsideration, the
same may be filed on the assumption that rectification of the
decision or order must be obtained, and before a petition for
certiorari may be instituted.

Petitioner received a copy of the Acting Secretary of Labor’s

Decision on June 14, 2007. It timely filed a Motion for
Reconsideration on June 25, which was a Monday, or the first
working day following the last day (Sunday, June 24) for filing the
motion. But for lack of procedural basis, the same was effectively
denied by the Secretary of Labor via his August 15, 2007 Order
which petitioner received on August 17. It then filed the Petition for
Certiorari on August 29, or well within the fresh 60–day period
allowed by the Rules from August 17. Given these facts, the Court
finds that the Petition was timely filed.

Going by the foregoing pronouncements, the CA doubly erred in

dismissing CA–G.R. SP No. 100324.

WHEREFORE , the Petition is GRANTED. The assailed September

20, 2007 and December 14, 2007 Resolutions of the Court of Appeals
are REVERSED and SET ASIDE. The Petition in CA–G.R. SP No.
100324 is ordered REINSTATED and the Court of Appeals is
DIRECTED to RESOLVE the same with DELIBERATE DISPATCH.
ChanRoblesVirtualawlibrary

SO ORDERED.

G.R. No. 126850 April 28, 2004

THE INSULAR LIFE ASSURANCE COMPANY, LTD., petitioner,
vs.
COURT OF APPEALS and SUN BROTHERS & COMPANY, respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
Before the Court is a petition for review on certiorari under Rule 45 of the
Rules of Court which seeks the reversal of the Decision,1 dated May 20,
1996, of the Court of Appeals (CA for brevity) in CA-G.R. CV No. 46987
affirming the Decision,2 dated April 25, 1994, rendered by the Regional Trial
Court (Branch 150), Makati City (RTC for brevity) in Civil Case No. 92-27754
extending the lease contract subject of the petition for declaratory relief and
ordering petitioner to pay attorney’s fees and costs.
The factual antecedents are as follows:
On September 24, 1992, Sun Brothers & Company (Sun Brothers for brevity)
filed a petition for declaratory relief with the RTC seeking judicial
interpretation of the "option to renew" clause under a Contract of Lease dated
September 20, 1988.3
Under the contract, Sun Brothers leased for a period of five years from
December 1, 1987 until November 30, 1992, a parcel of land, with an
approximate area of 4,215 square meters, and the building constructed
thereon, located in Makati (then a Municipality). The contract stipulated that
the lease was renewable at the option of the tenant, Sun Brothers, for an
additional five years, provided the exercise of the option to renew the lease
shall be made by the tenant in writing to The Insular Life Assurance
Company, Ltd. (Insular for brevity) at least ninety days before the expiration
of the period. The contract further provided for monthly rental of ₱50,000.00
for the first year and an increase of 10% per annum for the succeeding years,
exclusive of real estate taxes and insurance premiums which are for the
account of Sun Brothers.4
Sun Brothers alleged that since the lease contract does not contain any
provision as to the rental or any provision for any new or additional terms or
conditions in case of renewal, the terms and conditions of the renewal of
lease should be the same and the monthly rental should remain at
₱73,205.00. It prayed that judgment be rendered: (a) declaring that renewal
under the contract of lease be for an additional period of five years under the
same terms and conditions and the monthly rental should be ₱73,205.00;
and, (b) ordering Insular to pay Sun Brothers ₱20,000.00 as attorney’s fees
and to pay the costs of suit.5
On November 6, 1992, Insular filed its Answer6 claiming that while the lease
contract grants Sun Brothers the option to renew the lease by giving notice
thereof to Insular at least ninety days before the expiration of the period, it
has always been the agreement of the parties that Sun Brothers does not
have the right to impose, on its sole will, a renewal of the lease as to the
period or the rentals;7 that despite the presence of the renewal clause in the
previous contracts of lease, the parties still negotiated, as a matter of course,
for the renewal of the lease in 1977 and 1987; that negotiation was the usual
norm between the parties, clearing up as it did vague portions of the previous
contracts.
After trial on the merits, the RTC rendered its decision, dated April 25, 1994,
ruling as follows:
The wording of the xxx provisions of the contract is clear, unambiguous and
need no further interpretation. The tenant, herein petitioner, is vested solely
with the option to renew the said contract of lease on the only condition that
the same be made known to respondent in writing at least 90 days before its
expiration.
Petitioner, in its letter to respondent dated May 22, 1993 (Exh. "D"),
expressed its desire to exercise the option granted in the contract, since there
is no mention of any change or increase in the amount of monthly rental,
petitioner understood it to mean that the renewal will be under the same
terms and conditions.
Respondent’s claim that the lease contract (Exh. "C") does not contain the
true intent of the parties deserves scant consideration. It must be noted, as
correctly pointed out by the petitioner, that all the contracts of lease between
the parties and the repeated renewals thereof were entirely drafted, finalized
and notarized by respondent and is, thus, a contract of adhesion. Being a
contract of adhesion, petitioner’s only role was for its general manager,
Amancio L. Sun to sign the same. The respondent could have easily deleted
this questioned renewal clause in the contract if, indeed, such was not the
intention of the parties. It could have provided therein that any renewal of the
lease would be by mutual agreement of the parties or had specifically limited
the period of the lease.8
The dispositive portion of the assailed decision reads:
WHEREFORE, considering all the foregoing, judgment is hereby rendered as
follows:
a) declaring that the contract of lease dated 30 September 1988 be renewed
for another 5 years starting from 30 November 1992 and up to 1 December
1997;
b) declaring that the monthly rental on the leased premises be ₱100,000.00
exclusive of real estate taxes and insurance premiums, less any amounts that
petitioner may have paid respondent in the meantime;
c) ordering the respondent to pay herein petitioner the amount of ₱20,000.00
as attorney’s fees; and
d) to pay the cost.
SO ORDERED.9
On June 1, 1994, Insular filed a motion for reconsideration10 which the RTC
denied in its Order dated July 18, 1994.11
Dissatisfied, Insular appealed to the CA.12 In a Decision dated May 20, 1996,
the CA affirmed the decision of the trial court.13 It reasoned that since the
renewal clause in the latest contract of Insular and Sun Brothers is silent as to
the terms and conditions of the subsequent contract, such subsequent
contract should follow the terms and conditions of the original contract,
applying the doctrine laid down in the cases of Ledesma vs. Javellana,14
Millare vs. Hernando,15 and Fernandez vs. Court of Appeals.16
As regards the monthly rental, the CA held that there was no merit to Insular’s
allegation that the trial court acted arbitrarily in fixing the amount of the rent at
₱100,000.00 a month since it considered the testimony of Insular’s witness
that improvements introduced by Sun Brothers still have an appraised value,
which value is considered by the CA in favor of Sun Brothers in the
determination of the terms of the extended lease. The CA added that the trial
court arrived at the amount of ₱100,000.00 after considering that Sun
Brothers had shouldered the maintenance expenses on the building and paid
real estate taxes as well as insurance premiums thereon.17
Insular filed a motion for reconsideration18 which was denied by the CA in its
Resolution dated October 10, 1996.19
Hence, the present petition for review anchored on the following grounds:
A. THE EXERCISE OF JUDICIAL POWER ENTAILS THE DUTY TO
SETTLE ACTUAL CONTROVERSIES OF LEGALLY DEMANDABLE
RIGHTS AND TO DECIDE UPON ISSUES SUBMITTED BY THE PARTIES.
B. WHERE A PARTY PUTS IN ISSUE IN HIS PLEADING THAT THE
CONTRACT FAILS TO EXPRESS THE TRUE INTENT OF THE PARTIES,
THE LOWER COURT IS MANDATED TO CONSIDER THE EXTRINSIC
EVIDENCE PRESENTED AND THEN DECIDE WHAT THE TRUE INTENT
IS; BY THE VERY NATURE OF THIS CHALLENGE, IT IS A JUDICIAL
ABDICATION OF DUTY TO SIMPLY AND MERELY RULE THAT THE
CONTRACT IS CLEAR AND MUST BE INTERPRETED AS SUCH.
C. THE AMOUNT OF REASONABLE RENT IS DETERMINED ON THE
BASIS OF EVIDENCE PRESENTED.
D. PETITIONER IS ENTITLED TO AN AWARD OF MORAL AND
EXEMPLARY DAMAGES AND ATTORNEY’S FEES.20
Succinctly, the issue herein is the real nature of the option to renew the lease
under the contractual agreement of the parties. Insular insists that the option
to renew is a bilateral agreement subject to the terms and conditions the
parties may agree upon. Sun Brothers, on the other hand, posits that the
option to renew is its unilateral right effectively exercised by mere notice to
Insular of the intention to extend the lease, at least ninety days before the
expiration of the period, without qualification as to monthly rental or term of
the lease.
It is a settled rule that in the exercise of the Supreme Court’s power of review,
the Court is not a trier of facts and does not normally undertake the re-
examination of the evidence presented by the contending parties during the
trial of the case considering that the findings of facts of the CA are conclusive
and binding on the Court.21 However, the Court had recognized several
exceptions to this rule, to wit: (1) when the findings are grounded entirely on
speculation, surmises or conjectures; (2) when the inference made is
manifestly mistaken, absurd or impossible; (3) when there is grave abuse of
discretion; (4) when the judgment is based on a misapprehension of
facts; (5) when the findings of facts are conflicting; (6) when in making its
findings the Court of Appeals went beyond the issues of the case, or its
findings are contrary to the admissions of both the appellant and the appellee;
(7) when the findings are contrary to the trial court; (8) when the findings are
conclusions without citation of specific evidence on which they are based; (9)
when the facts set forth in the petition as well as in the petitioner’s main and
reply briefs are not disputed by the respondent; (10) when the findings of
fact are premised on the supposed absence of evidence and
contradicted by the evidence on record; and (11) when the Court of
Appeals manifestly overlooked certain relevant facts not disputed by
the parties, which, if properly considered, would justify a different
conclusion.22 Exceptions (4), (10) and (11) are present in this case.
It is a cardinal rule in contract interpretation that the ascertainment of the
intention of the contracting parties is to be discharged by looking to the words
they used to project that intention in their contract, that is, all the words, not
just a particular word or two, and words in context, not words standing
alone.23 Furthermore, Article 1374 of the Civil Code requires that the various
stipulations of a contract shall be interpreted together, attributing to the
doubtful ones that sense which may result from all of them taken jointly.
Conformably, to ascertain the true meaning or import of the disputed "option
to renew" clause in the contract of lease, the entirety of the contract must be
considered; not merely the clause relating to the "option to renew."
After a careful examination of the records of the case, the Court finds it
significant that the disputed contract of lease is not the first contract between
the parties but, in fact, the third contract or the second renewal contract. The
parties’ lessor-lessee relationship all started on January 29, 1958, with the
original contract of lease,24 portions of which provide:
I
INSULAR does hereby lease the abovementioned land and building unto the
TENANT and the TENANT does hereby accept in lease from INSULAR the
said land and building, for a period of TEN (10) YEARS from the date
provided for in Clause IX hereof, renewable at the option of the TENANT for
an additional period of TEN (10) YEARS; PROVIDED, HOWEVER, that the
exercise of the options to renew the lease as herein stated shall be made by
the TENANT in writing to INSULAR at least NINETY (90) DAYS before the
expiration of the periods herein mentioned. All renewals shall be under the
same terms and conditions hereinstated.
.........
III
INSULAR expressly covenants that if on or before the expiration of the
period of TWENTY (20) YEARS (covered by the original TEN (10) years
period of the lease and the renewal period of TEN (10) years hereinabove
stipulated) TENANT still desires to occupy the building, INSULAR shall
give the TENANT first priority to lease the building at the monthly rental and
under such other terms and conditions as may be agreed upon by the parties
at that time.25 (Emphasis supplied)
The first renewal of the lease contract was made on January 20, 1978 for a
period of another 10 years, from December 1, 1977 until November 30, 1987,
which by that time had added up to twenty years of lease. The parties agreed
that the lease was renewable at the option of the Sun Brothers for an additional
period of five years with the proviso that the exercise of the option to renew the
lease shall be made by the tenant in writing to Insular at least ninety days
before the expiration of the period provided.26 The contract further provided
that:
2) For the use and occupancy of the leased premises TENANT shall, during
the first (5) years of the above 10-year period, pay in advance at the office of
INSULAR, within the first five (5) days of every month a monthly rental of
₱24,325.00 exclusive of real estate taxes and insurance premiums. (All real
estate taxes, other assessments and insurance premiums of the leased
properties shall be for the account of the TENANT).
Thereafter, the rental shall be adjusted beginning on the sixth year of this lease
with an effective increase equivalent to 6.5% per annum of the imputed value
increment on the land compounded at 5% annually for a period of five (5) years
using the current value of the leased property as base, which current value is
hereby agreed upon by the parties as follows:
Land ----------------------------
₱ 3,793,500.00
Improvements ----------------
697,100.00
Total Current Value ----------

₱ 4,490,600.00
On the basis of the above current value, the monthly rental for the 2nd Five
(5) years of the said 10-year period is estimated to be ₱30,002.00 exclusive
of real estate taxes, other assessments and insurance premiums for the
leased properties.
3) Except for the foregoing modification/amendment, all the other terms and
conditions of the Contract of Lease dated 29 January 1958 remain in full force
and effect.27 (Emphasis supplied)
Thereafter, prior to the expiration of the foregoing contract in November 1987,
an exchange of letters ensued between the contracting parties, as follows:
1. SUN BROTHERS, in a letter dated July 15, 1987, expressed its intention to
renew the lease for a period of five years.28
2. On July 31, 1987, INSULAR informed SUN BROTHERS that it was
agreeable to the renewal of the lease subject to the following terms: (a) lease
period from 01 December 1987 to 30 November 1992; (b) basic monthly
rental of ₱60,000.00; (c) annual escalation rate of 10%; and, (d) insurance
premiums, realty taxes, other government assessments if any, shall be for the
account of SUN BROTHERS.29
3. SUN BROTHERS acceded to the terms of INSULAR30 but subsequently
found the said terms to be "quite heavy", hence in a letter dated October 5,
1987, it offered the following "compromise" term: (a) basic monthly rental
increase of 50% over the present monthly rental of P30,000.00, thereby
making the new monthly rental to ₱45,000.00; and, (b) annual escalation rate
of 5% which is a new condition not in the old contract, in addition to the
insurance premiums, realty taxes, other government assessments if any,
which shall be for the account of SUN BROTHERS.31
4. On November 20, 1987 INSULAR informed SUN BROTHERS that it was
not amenable to the foregoing "compromise" terms. It reasoned that the new
basic rental rate of ₱60,000.00 is fair and reasonable considering the present
market value rates of other properties in the immediate vicinity.32
5. On November 27, 1987, SUN BROTHERS requested reconsideration and
accept its new offer of ₱50,000.00 monthly rental and yearly increase of 5%.33
6. On December 10, 1987, INSULAR informed SUN BROTHERS that it was
agreeable to renewal of the lease subject to the following terms: (a) lease
period from 01 December 1987 to 30 November 1992; (b) basic monthly
rental of ₱50,000.00; (c) annual escalation rate of 10%; and, (d) insurance
premiums, realty taxes, other government assessments if any, shall be for the
account of SUN BROTHERS.34
The foregoing exchange of communications ultimately led to the Contract of
Lease dated September 20, 1988, which is the second renewed Contract of
Lease or third contract of lease between the parties. The contract again
stipulated that the lease was renewable at the option of the tenant for an
additional five years provided the exercise of the option to renew the lease
shall be made by the tenant in writing to Insular at least ninety days before
the expiration of the period. The lease was for a period of five years, from
December 1, 1987 until November 30, 1992, with a monthly rental of
₱50,000.00 for the first year, and an increase of 10% per annum for the
succeeding years, exclusive of real estate taxes and insurance premiums
which are for the account of Sun Brothers.35 Again, the contract provided that
"except for the foregoing modification/amendment, all the other terms
and conditions of the Contract of Lease dated 29 January 1958 remain
in full force and effect."36
Prior to the expiration of the second renewal Contract of Lease in 1992, an
exchange of letters once more transpired between the parties, thus:
1. On May 22, 1992, SUN BROTHERS communicated to INSULAR its
intention to renew the lease contract, quoting ₱100,000.00 as monthly
rental.37
2. In response thereto in a letter dated June 10, 1992, INSULAR offered a
lease period of one year at a monthly rental of ₱500,000.00.38
3. More than a month later, SUN BROTHERS, in a letter dated August 5,
1992, expressed that, under the provisions of the contract of lease, SUN
BROTHERS has the right to renew the lease for another period of five (5)
years without any condition for the exercise of the option, except the giving of
written notice at least ninety (90) days before November 30, 1992 and that
the rental due INSULAR is the current rental. Thus, SUN BROTHERS
insisted that INSULAR’s consent is not necessary to the renewal of the lease
and the monthly rental due is the current rental paid by it.39
4. On September 1, 1992, INSULAR replied to the foregoing letter, explaining
that the contract of lease granted SUN BROTHERS only the option to renew
the lease contract and not the right to dictate the terms and conditions of the
renewed contract, especially on the amount of rentals to be paid.40
5. On September 5, 1992, SUN BROTHERS reiterated its position that it has
the validly exercised the option to renew the lease contract under the same
terms and conditions by giving notice to INSULAR as provided in the lease
contract.41
which apparently brought about an impasse by reason of which Sun Brothers
filed the petition for declaratory relief with the RTC.
Clearly, in this case, the original contract of lease dictates the interpretation of
the renewal clause. Under the original contract of lease, the "option to renew"
clause means simply that after the 20-year period of lease, or after the
second contract of lease which was to expire November 30, 1987, the lessee,
Sun Brothers, is given "first priority to lease the building at the monthly
rental and under such other terms and conditions as may be agreed
upon by the parties at that time." The renewal contracts of 1978 and 1987
each contained the stipulation that except for the modification or amendment
relating to the monthly rental and term of the lease, "all the other terms and
conditions of the Contract of Lease dated 29 January 1958 remain in full
force and effect,"42 and, therefore, in pursuance thereof, the monthly rentals
and other terms and conditions of the proposed renewal contract were agreed
upon by the parties in said 1978 and 1987 renewed contracts of lease.
Consequently, Sun Brothers’ interpretation based solely on the renewal
clause under scrutiny completely ignoring the original contract of lease, is not
plausible. The contracting parties’ intent as can be gleaned from the original
contract of lease and confirmed by their subsequent acts in the 1977 and
1987 renewal contracts, was to constitute the renewal of the lease subject to
terms and conditions to be agreed upon by the parties at the time of each
renewal.
Furthermore, the subsequent acts of the parties, evidenced by the exchange
of letters between the two contenders, clearly show that their understanding
and interpretation of the "option to renew" clause is that which is explicitly
provided in the original contract of lease. Thus, after Sun Brothers signified its
intention to renew the lease in 1977 and in 1987, a series of offers and
counter-offers on the monthly rental and the term of lease followed until the
parties reached an agreement thereon. Sun Brothers complied with the terms
of the original contract of lease on the option to renew until 1992 when,
midway through the negotiations, in the face of a ₱500,000.00 monthly rental
pegged by Insular, Sun Brothers did a volte face and suddenly insisted that it
had a unilateral right to renew.
The cases of Ledesma vs. Javellana, Millare vs. Hernando and Fernandez
vs. Court of Appeals, relied upon by the lower courts, find no application in
the present case since the 1977 and 1987 renewal contracts explicitly
adopted all the other provisions of the original contract of lease dated January
29, 1958, including the provision on contract renewals, except those that
relate to the monthly rental and the term of the lease.
When the language of the contract is explicit leaving no doubt as to the
intention of the drafters thereof, the courts may not read into it any other
intention that would contradict its plain import.43 The Court would be rewriting
the contract of lease between Insular and Sun Brothers under the guise of
construction were we to interpret the "option to renew" clause as Sun
Brothers propounds it, despite the express provision in the original contract of
lease and the contracting parties’ subsequent acts. As the Court has held in
Riviera Filipina, Inc. vs. Court of Appeals,44 a court, even the Supreme
Court, has no right to make new contracts for the parties or ignore
those already made by them, simply to avoid seeming hardships.
Neither abstract justice nor the rule of liberal construction justifies the
creation of a contract for the parties which they did not make
themselves or the imposition upon one party to a contract of an
obligation not assumed."45
The Court will now discuss the merit of Insular’s claim for monthly rental and
damages.
Insular pleads that the Court should fix the monthly rental at ₱500,000.00.
Sun Brothers alleges that the said amount is unreasonable, if not,
unconscionable. However, no evidence, other than its self-serving assertion,
was offered by Sun Brothers to substantiate its contention. On the other
hand, Insular submitted in evidence the Appraisal Report which estimated the
fair rental value of the subject leased property at ₱700,000.00 as of October
30, 1991.46 The testimony of the appraiser, Executive Vice President, Engr.
Oliver Morales, of the Cuervo Appraisers, Inc.47 was not proven by Sun
Brothers to be biased and partial on their estimation of the fair rental value of
the subject leased property.
In addition, Insular presented the Contract of Lease it entered into with
Winsome Development Corporation dated March 30, 1993 involving an 8,200
square meter property which is almost twice the size of the subject leased
property and likewise located in Makati, where the monthly rental for the first
year, starting December 1992, was fixed at ₱600,000.00.48 Sun Brothers
failed to demonstrate that this contract has been assailed in court or that the
agreed monthly rental was found to be unconscionable. Suffice it to state that
courts may take judicial notice of the general increase in rentals of lease
contract renewals much more with business establishments,49 especially in
this case where the subject leased property covers a 4,215 square meter
prime property centrally located in a well-developed commercial district of the
City of Makati.50 Based thereon, the Court finds the amount of ₱500,000.00
as reasonable monthly rental.
However, the Court cannot validly impose said amount on Sun Brothers as
monthly rental since it was not agreed upon by the parties. It is not the
province of the Court to make a contract for the parties or bind parties to one
when no consensual agreement was entered into.51 But the amount of
₱500,000.00 a month since 1992 or ₱6 Million a year, can be considered
actual or compensatory damages representing reasonable rental value or
unrealized monthly income for Sun Brothers’ continued occupation and
enjoyment of the leased property. This is in consonance with Producers Bank
of the Philippines vs. Court of Appeals52 wherein the Court had enunciated
the kinds of actual damages, thus:
. . . There are two kinds of actual or compensatory damages: one is the loss
of what a person already possesses, and the other is the failure to receive as
a benefit that which would have pertained to him x x x. In the latter instance,
the familiar rule is that damages consisting of unrealized profits,
frequently referred as "ganacias frustradas" or "lucrum cessans,’ are
not to be granted on the basis of mere speculation, conjecture, or
surmise, but rather by reference to some reasonably definite standard
such as market value, established experience, or direct inference from
known circumstances.53
In addition, records disclose that in an Order dated April 30, 1993 the trial
court authorized Sun Brothers to make a consignation of its monthly rentals of
₱69,544.75 staring the month of December 1992 while the case pends in the
trial court.54 The amount of monthly rentals consigned55 should be deducted
from the total amount of actual or compensatory damages herein granted to
Insular. Furthermore, such actual or compensatory damages due shall earn
interest at the legal rate of 12% per annum computed from the date of finality
of this decision until full payment would have actually been made, in
accordance with the ruling of this Court in Eastern Shipping Lines, Inc. vs.
Court of Appeals,56 to wit:
I. When an obligation, regardless of its source, i.e., law, contracts, quasi-
contracts, delicts or quasi-delicts is breached, the contravenor can be held
liable for damages. The provisions under Title XVIII on "Damages" of the Civil
Code govern in determining the measure of recoverable damages.
II. With regard particularly to an award of interest in the concept of actual and
compensatory damages, the rate of interest, as well as the accrual thereof, is
imposed, as follows:
1. When the obligation is breached, and it consists in the payment of a sum of
money, i.e., a loan or forbearance of money, the interest due should be that
which may have been stipulated in writing. Furthermore, the interest due shall
itself earn legal interest from the time it is judicially demanded. In the absence
of stipulation, the rate of interest shall be 12% per annum to be computed
from default, i.e., from judicial or extrajudicial demand under and subject to
the provisions of Article 1169 of the Civil Code.
2. When an obligation, not constituting a loan or forbearance of money, is
breached, an interest on the amount of damages awarded may be imposed at
the discretion of the court at the rate of 6% per annum. No interest, however,
shall be adjudged on unliquidated claims or damages except when or until the
demand can be established with reasonable certainty. Accordingly, where the
demand is established with reasonable certainty, the interest shall begin to
run from the time the claim is made judicially or extrajudicially (Art. 1169, Civil
Code) but when such certainty cannot be so reasonably established at the
time the demand is made, the interest shall begin to run only from the date
the judgment of the court is made (at which time the quantification of
damages may be deemed to have been reasonably ascertained). The actual
base for the computation of legal interest shall, in any case, be on the amount
finally adjudged.
3. When the judgment of the court awarding a sum of money becomes
final and executory, the rate of legal interest, whether the case falls
under paragraph 1 or paragraph 2, above, shall be 12% per annum from
such finality until its satisfaction, this interim period being deemed to
be by then an equivalent to a forbearance of credit. (Emphasis supplied)57
Moreover, the Court takes exception from the CA’s opinion that the
improvements introduced by Sun Brothers should be considered in the latter’s
favor in considering the terms of the rent. The fact that Sun Brothers had
shouldered maintenance expenses on the building and paid real estate taxes
as well as insurance premiums is inconsequential and immaterial in fixing the
rent. The improvements introduced and the payment of expenses, taxes and
premiums have always been excluded in the determination of the monthly
rental in the contracts of lease between the parties. The Court cannot
disregard this fact simply because it later becomes disadvantageous to one
party, especially when Sun Brothers voluntarily assumed the obligation in the
original contract.
As to moral damages, Insular’s prayer that moral damages not less than ₱5
Million be awarded because its name and reputation has been defamed by
Sun Brothers, is not tenable. The rule is that moral damages can not be
granted in favor of a corporation. Being an artificial person and having
existence only in legal contemplation, a corporation has no feelings, no
emotions, no senses; it cannot, therefore, experience physical suffering,
mental anguish, fright, serious anxiety, wounded feelings or moral shock or
social humiliation, which can be suffered only by one having a nervous
system.58
As to Insular’s plea for exemplary damages, the Court finds the same
meritorious. In contracts and quasi-contracts, the court may award exemplary
damages if the defendant acted in a wanton, fraudulent, reckless, oppressive,
or malevolent manner.59 Sun Brothers was in evident bad faith when in the
course of negotiations for the third renewal of the lease contract in 1992, it
wantonly and oppressively insisted that it had a unilateral right to renew to
lease thereby resulting in an impasse between the parties and which Sun
Brothers took advantage of and used as a basis for instituting the
proceedings for declaratory relief, although its prior actions since January 29,
1958 when the original contract of lease was executed, spanning more than
three decades, indicated that it was well-aware of the contractual stipulation
that after a twenty-year period of lease, the right to renew the lease was
subject to such terms and conditions that the parties may mutually agree
upon at the time, as expressly provided for in the original contract of lease.
Consequently, an award of exemplary damages in the amount of
₱500,000.00 is in order by way of example and correction for the public good
and also to serve as a deterrent to the commission of similar misdeeds by
others.
Under Article 2208 of the Civil Code, attorney’s fees may be awarded not only
when exemplary damages is awarded but also when a party is compelled to
litigate or to incur expenses to protect its interest by reason of an unjustified
act of the other party.60 In the present case, Insular was constrained to
engage the services of counsel and to incur expenses of litigation in order to
protect its interest to the subject property against Sun Brothers’ utterly
unfounded insistence on an alleged unilateral right to renew the lease. The
award of ₱250,000.00 is reasonable in view of the time it has taken this case
to be resolved.61
WHEREFORE, the assailed Decision, dated May 20, 1996, of the Court of
Appeals in CA-G.R. CV No. 46987 is REVERSED and SET ASIDE. In lieu
thereof, judgment is rendered ordering respondent Sun Brothers and
Company to pay petitioner Insular Life Assurance Company, Ltd. actual
damages in the amount of Five Hundred Thousand Pesos (₱500,000.00)
monthly, representing the unrealized monthly income of petitioner or ₱6
Million a year from December 1, 1992 until respondent vacates the leased
premises. The amount of monthly rentals consigned with the trial court shall
be deducted from the total amount of actual or compensatory damages due.
Furthermore, such actual or compensatory damages due shall earn interest
at the legal rate of 12% per annum computed from the date of finality of this
decision until full payment thereof. In addition, private respondent Sun
Brothers and Company is ordered to pay petitioner exemplary damages in the
amount of Five Hundred Thousand Pesos (₱500,000.00); and attorney’s fees
in the sum of Two Hundred Fifty Thousand Pesos (₱250,000.00).
Double costs against private respondent.
SO ORDERED.
Puno, Quisumbing, Callejo, Sr., and Tinga, JJ., concur.

SUPREME COURT FIRST DIVISION

HENRY CLYDE ABBOTT and PACIFICO ALUNAN,
Petitioners,
-versus-
THE NATIONAL LABOR RELATIONS COMMISSION, THE PRESIDENT
AND VICE-PRESIDENT TRAVELLERS LIFE ASSURANCE, AND THE
REGIONAL ARBITRATION BRANCH NO, 10, NATIONAL LABOR
RELATIONS COMMISSION, CAGAYAN DE ORO CITY,
Respondents.
x----------------------------------------------------x DECISION
G.R. No. L-65173 October 27, 1986
CRUZ, J.: The factual backdrop of this Petition for Certiorari, Mandamus, and
Prohibition is as follows: chanroblespublishingcompany
Petitioners Henry Clyde Abbott and Pacifico Alunan were both regular agency
managers of respondent Travellers Life Assurance of

the Philippines, Inc. Without a written clearance, their services were

terminated effective August 16, 1977.[1] They then filed a complaint in the
Department of Labor for illegal dismissal, back salaries, commissions and
bonuses.[2] A decision was rendered by Labor Arbiter Ildefonso Agbuya in
their favor on August 27, 1978, granting a monetary award of P52,268.80 to
Abbott and P46,315.00 to Alunan, and ordering their reinstatement.[3]
chanroblespublishingcompany
Upon appeal to respondent Commission, the decision was affirmed on
November 9, 1981.[4] The motion for reconsideration filed by private
respondent on January 26, 1982 was denied by the NLRC on March 24,
1982.[5] chanroblespublishingcompany
On May 25, 1982, after the lapse of eighty-six (86) days, petitioners filed a
motion for execution and recomputation of their money claims. This was
opposed on June 26, 1982, private respondent intimating its intention to file a
petition for review on certiorari with the Supreme Court.[6]
chanroblespublishingcompany
Petitioners, in a second motion for execution and recomputation dated July
26, 1982, argued that the opposition was improper, the decision having
become final and executory.[7] In reply, respondent filed a supplemental
opposition, saying that: 1) since June 21, 1978, petitioners had abandoned
their work; and 2) petitioners were the ones actually indebted to respondent
because of the advances received by them.[8] chanroblespublishingcompany
Over petitioners’ objection, the labor arbiter nonetheless took cognizance of
respondents’ opposition and set the case anew for hearing.
On July 19, 1983, the labor arbiter dismissed respondents’ opposition,
sustaining petitioners’ argument that the decision with respect to the money
judgment was already final and executory.[9] Regarding petitioners’ alleged
abandonment of work, the labor arbiter found that the claim was belied by
respondents’ own admission that petitioners had indeed reported for work at
its regional office in Cagayan de Oro City on June 31, 1978.[10]
chanroblespublishingcompany

On August 4, 1983, private respondent appealed to the NLRC and moved to

stay execution.[11] Stressing the finality of the decision, petitioner reiterated
its motion for execution.[12] On August 16, 1983, respondent Commission
accepted the appeal and issued an order restraining the enforcement of the
original decision of the labor arbiter as earlier approved by it.[13]
chanroblespublishingcompany
Hence, this petition.
The principal issue raised in this petition is whether or not public respondent
gravely abused its discretion in entertaining the appeal and in issuing the
challenged restraining order. chanroblespublishingcompany
The Solicitor General observed:
“The decision dated March 24, 1982 rendered by respondent Commission
denying the motion for reconsideration and affirming the Labor Arbiter’s
findings in favor of petitioners became immediately final and executory upon
promulgation thereof. This is so because said decision is inappealable and
cannot be reviewed except upon petition for certiorari before this Honorable
Court. Being final and executory, execution of said judgment should issue as
a matter of right.”[14] chanroblespublishingcompany
In Sawit vs. Rodas and Daquis vs. Bustos, we held that a judgment becomes
final and executory by operation of law, not by judicial declaration.[15]
Accordingly, finality of judgment becomes a fact upon the lapse of the
reglementary period of appeal if no appeal is perfected.[16] In such a
situation, the prevailing party is entitled as a matter of right to a writ of
execution;[17] and issuance thereof is a ministerial duty, compellable by
mandamus.[18] chanroblespublishingcompany
In the instant case, however, what is sought to be reviewed is not the
decision itself but the manner of its execution. There is a big difference. While
it is true that the decision itself has become final and executory and so can no
longer be challenged, there is no question either that it must be enforced in
accordance with its terms and conditions. Any deviation therefrom can be the
subject of a proper appeal. chanroblespublishingcompany

The fact alone that the labor arbiter, in recomputing the award in the original
decision, raised it from the amount of P98,883.80 to the astonishing sum of
P372,451.65[19] is justification enough for the respondent NLRC to issue the
challenged temporary restraining order. In the meantime, anyway, the
petitioners are protected by the supersedeas bond put up by the respondent
in the amount of the recomputed award.[20] chanroblespublishingcompany
We hold therefore that the National Labor Relations Commission has the
authority to look into the correctness of the execution of the decision in this
case and to consider the supervening events that may affect such execution,
like the possible set-off of the petitioners’ advances or debts against their total
claim, their discontinuance from employment by abandonment or resignation,
and other relevant developments.
ACCORDINGLY, the instant petition is dismissed and this case is remanded
to the respondent National Labor Relations Commission for final
determination of the award due the petitioners in the execution of the decision
rendered by the labor arbiter on August 27, 1978, as affirmed by the said
Commission on November 9, 1981. chanroblespublishingcompany
SO ORDERED.
Yap, Narvasa, Melencio-Herrera and Feliciano, JJ., concur.
chanroblespublishingcompany

A.M. No. RTJ-00-1574 March 28, 2001

GORGONIO S. NOVA, complainant,
vs.
JUDGE SANCHO DAMES II, Regional Trial Court, Branch 38, Daet,
Camarines Norte, respondent.
PARDO, J.:
The case is a complaint1 against Judge Sancho Dames II, presiding judge,
Regional Trial Court, Camarines Norte, Branch 38, Daet, in connection with
his issuance of a temporary restraining order in Civil Case NO. 6859, entitled
"Sps. Cesar Barcelona and Vilma Jalgalado-Barcelona vs. Hon. Frustuoso T.
Aurellano, et al.", restraining NLRC Sheriff Norberto B. Meteoro from
conducting the scheduled public auction of real property of Vilma J.
Barcelona levied on execution pursuant to a final decision of the NLRC in
NLRC RAB V Case NO. 05-12-00141-95, entitled Gorgonio C. Nova,
complainant, vs. R. A. Broadcasting Corporation, Vilma Jalgalado-Barcelona
and Deo N. Trinidad, respondents.
The complaint alleged that, in issuing the temporary restraining order,
respondent judge acted with gross ignorance of the law because regular
courts had no jurisdiction to hear and decide questions which arose and were
incidental to decisions, orders or awards rendered in labor cases. 1âwphi1.nêt

The facts are as follows:

In 1995, complainant Gregorio S. Nova filed with the NLRC Regional
Arbitration, Branch V, Legaspi City, a complaint for illegal dismissal,
underpayment of wages, non-payment of holiday pay, rest day, overtime pay,
13th month pay and other allowances, backwages, separation pay and
damages against the R.A. Broadcasting Corporation/Station DZRM,
represented by its Vice President for Operations Vilma J. Barcelona and
Station Manager Deo Trinidad.2
On July 31, 1996, Labor Arbiter Fructuoso T. Aurellano rendered a judgment,
the dispositive portion of which reads:
"WHEREFORE, premises considered, judgment is hereby rendered ordering
R. A. BROADCASTING CORP./DZRM, VILMA J. BARCELONA and DEO
TRINIDAD to solidarily pay the complainant the total sum of ONE HUNDRED
ELEVEN THOUSAND SIX HUNDRED SIXTY-NINE PESOS and 60/100
(P111,669.60).
"SO ORDERED."
In time, respondent appealed the decision to the NLRC in Quezon City.
On October 7, 1996, the NLRC dismissed the appeal. Respondent moved for
reconsideration but the NLRC denied the motion as it was filed out of time.
Aggrieved by the resolution, on March 12, 1997, respondent filed with this
Court a petition for certiorari.3 On March 17, 1997, the Court dismissed the
petition and also denied the motion for reconsideration thereafter filed.
The decision having become final, on January 7, 1998, the NLRC issued an
alias writ of execution. Pursuant thereto, on February 3, 1998, Labor Sheriff
Norberto B. Meteoro levied on real property belonging to Sps. Cesar and
Vilma Barcelona and scheduled the auction sale on June 16, 1998, at 10:00
a.m.
On June 9, 1998, Vilma J. Barcelona and her husband Cesar Barcelona filed
with the Regional Trial Court, Camarines Norte, Daet a civil action for
damages with temporary restraining order due to the wrongful attachment of
their property.4 This was raffled to Branch 38, presided over by respondent
Judge.
On June 15, 1998, respondent Judge finding that there was extreme urgency
and that irreparable injury would result of the plaintiff before the matter can be
heard on notice, issued a temporary restraining order, restraining the NLRC
Sheriff from conducting the scheduled public auction on June 16, 1998.
Hence, on January 5, 1999, complainant filed this administrative charge
against Judge Sancho Dames II, alleging that the issuance of the temporary
restraining order constituted a violation of Article 254 of the Labor Code which
prohibited the issuance of temporary restraining order or preliminary
injunction in a case arising from a labor dispute. He further submitted that the
regular courts had no jurisdiction to hear and decide questions which arose
and were incidental to the decisions, orders or awards rendered in labor
case.5
On April 28, 1999, the Court Administrator referred the complaint to
respondent judge for comment.6
In his answer filed on June 2, 1999, respondent judge claimed that he issued
the temporary restraining order to maintain the subject of controversy in
status quo until the hearing of the application for permanent injunction; that
Vilma Jalgalado-Barcelona, Vice-President for Operations, and Deo Trinidad,
the Station Manager, were ordered to solidarily pay with the defendant
corporation despite the fact that the corporation had a distinct personality
from its officers; that Cesar Barcelona, not being a judgment debtor, would
lose his property via public auction for an alleged labor dispute he had
nothing to do with; that injunction will lie to prevent alienation of conjugal
property; that all properties acquired during the marriage are presumed to
belong to the conjugal partnership property, thus the subject property
belonged to the conjugal partnership of spouses Cesar Barcelona and Vilma
Jalgalado-Barcelona and could not be alienated via public auction; that
injunction to prevent a wrong would be favored than a course requiring
plaintiffs to wait and seek damages after the wrong had been done; and that
the instant case involved a judicial question and thus, should be dismissed.7
We referred the case to Court of Appeals Associate Justice Remedios A.
Salazar-Fernando, for investigation.8
In her report and recommendation, Justice Fernando found that respondent
Judge was guilty of gross ignorance of the law because the regular courts in
that level had no jurisdiction or authority to issue injunction or temporary
restraining order in labor cases. She recommended that respondent Judge be
fined P10,000.00, with a stern warning that repetition of the same or similar
acts in the future would be dealt with more severely.
We find the recommendation of Justice Salazar-Fernando to be supported by
the record and we accept the same.
Regular courts have no jurisdiction to hear and decide questions which arise
and are incidental to the enforcement of decisions, orders or awards rendered
in labor cases by appropriate officers and tribunals of the Department of
Labor and Employment.9 Corollarily, any controversy in the execution of the
judgment shall be referred to the tribunal which issued the writ of execution
since it has the inherent power to control its own processes in order to
enforce its judgments and orders.10
True, an action for damages lies within the jurisdiction11 of a regional trial
court.12 However, the regional trial court has no jurisdiction to issue a
temporary restraining order in labor cases. Indeed, the respondent Judge
restrained the execution of a final decision of the labor arbiter, which he can
not lawfully do.
Justice Malcolm aptly described ideal judges as "men who have a mastery of
the principles of law, who discharge their duties in accordance with law, who
are permitted to perform the duties of the office undeterred by outside
influence, and who are independent and self-respecting human units in a
judicial system equal and coordinate to the other two departments of
government."13 Those who wield the judicial gavel have the duty to study the
laws and their latest wrinkles. They owe it to the public to be legally
knowledgeable with basic laws and principles, for ignorance of the law is the
bane of injustice.
WHEREFORE, the Court finds respondent Judge Sancho Dames II GUILTY
of gross ignorance of the law and imposes on him a FINE of Ten Thousand
Pesos (P10,000.00), payable within thirty (30) days from notice, with
WARNING that a repetition of similar acts shall be dealt with more severely.
1âw phi 1.nêt

YUPANGCO COTTON MILLS, INC., Petitioner, v. COURT OF APPEALS,

v

HON. URBANO C. VICTORIO, SR., Presiding Judge, RTC Branch 50, Manila,
RODRIGO SY MENDOZA, SAMAHANG MANGGAGAWA NG ARTEX
(SAMAR-ANGLO) represented by its Local President RUSTICO CORTEZ, and
WESTERN GUARANTY CORPORATION, Respondents.
DECISION
PARDO, J.:
The Case
The case is a petition for review on certiorari of the
decision of the Court of Appeals1 dismissing the petition
ruling that petitioner was guilty of forum shopping and that
the proper remedy was appeal in due course, not certiorari
or mandamus.
In its decision, the Court of Appeals sustained the trial
courts ruling that the remedies granted under Section 17,
Rule 39 of the Rules of Court are not available to the
petitioner because the Manual of Instructions for Sheriffs of
the NLRC does not include the remedy of an independent
action by the owner to establish his right to his property.
The Facts
The facts, as found by the Court of Appeals, are as follows:
From the records before us and by petitioners own
allegations and admission, it has taken the following
actions in connection with its claim that a sheriff of the
National Labor Relations Commission erroneously and
unlawfully levied upon certain properties which it claims as
its own.
 1. It filed a notice of third-party claim with the Labor
Arbiter on May 4, 1995.
2. It filed an Affidavit of Adverse Claim with the National
Labor Relations Commission (NLRC) on July 4, 1995, which
was dismissed on August 30, 1995, by the Labor Arbiter.
3. It filed a petition for certiorari and prohibition with the
Regional Trial Court of Manila, Branch 49, docketed as Civil
Case No. 95-75628 on October 6, 1995. The Regional Trial
Court dismissed the case on October 11, 1995 for lack of
merit.
4. It appealed to the NLRC the order of the Labor Arbiter
dated August 13, 1995 which dismissed the appeal for lack
of merit on December 8, 1995.
5. It filed an original petition for mandatory injunction with
the NLRC on November 16, 1995. This was docketed as
Case No. NLRC-NCR-IC. 0000602-95. This case is still
pending with that Commission.
6. It filed a complaint in the Regional Trial Court in Manila
which was docketed as Civil Case No. 95-76395. The
dismissal of this case by public respondent triggered the
filing of the instant petition.
In all of the foregoing actions, petitioner raised a common
issue, which is that it is the owner of the properties located
in the compound and buildings of Artex Development
Corporation, which were erroneously levied upon by the
sheriff of the NLRC as a consequence of the decision
rendered by the said Commission in a labor case docketed
as NLRC-NCR Case No. 00-05-02960-90.2 cräläwvirtualibräry

On March 29, 1996, the Court of Appeals promulgated a

decision3 dismissing the petition on the ground of forum
shopping and that petitioners remedy was to seek relief
from this Court.
On April 18, 1996, petitioner filed with the Court of Appeals
a motion for reconsideration of the decision.4 Petitioner
argued that the filing of a complaint for accion
reinvindicatoria with the Regional Trial Court was proper
because it is a remedy specifically granted to an owner
 (whose properties were subjected to a writ of execution to
enforce a decision rendered in a labor dispute in which it
was not a party) by Section 17 (now 16), Rule 39, Revised
Rules of Court and by the doctrines laid down in Sy v.
Discaya,5 Santos v. Bayhon6 and Manliguez v. Court of
Appeals.7
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In addition, petitioner argued that the reliefs sought and

the issues involved in the complaint for recovery of
property and damages filed with the Regional Trial Court of
Manila, presided over by respondent judge, were entirely
distinct and separate from the reliefs sought and the issues
involved in the proceedings before the Labor Arbiter and
the NLRC. Besides, petitioner pointed out that neither the
NLRC nor the Labor Arbiter is empowered to adjudicate
matters involving ownership of properties.
On August 27, 1996, the Court of Appeals denied
petitioners motion for reconsideration.8 cräläwvirtualibräry

Hence, this appeal.9

The Issues
The issues raised are (1) whether the Court of Appeals
erred in ruling that petitioner was guilty of forum shopping,
and (2) whether the Court of Appeals erred in dismissing
the petitioners accion reinvindicatoria on the ground of lack
of jurisdiction of the trial court.
The Courts Ruling
On the first issue raised, we rule that there was no forum
shopping.
In Golangco v. Court of Appeals,10 we held:
What is truly important to consider in determining whether
forum shopping exists or not is the vexation caused the
courts and parties-litigant by a party who asks different
courts and/or administrative agencies to rule on the same
or related causes and/or grant the same or substantially
the same reliefs, in the process creating possibility of
conflicting decisions being rendered by the different for a
upon the same issues.
xxx xxx xxx
There is no forum-shopping where two different orders were
questioned, two distinct causes of action and issues were
raised, and two objectives were sought. (Underscoring ours)
In the case at bar, there was no identity of parties, rights
and causes of action and reliefs sought.
The case before the NLRC where Labor Arbiter Reyes issued
a writ of execution on the property of petitioner was a labor
dispute between Artex and Samar-Anglo. Petitioner was not
a party to the case. The only issue petitioner raised before
the NLRC was whether or not the writ of execution issued by
the labor arbiter could be satisfied against the property of
petitioner, not a party to the labor case.
On the other hand, the accion reinvindicatoria filed by
petitioner in the trial court was to recover the property
illegally levied upon and sold at auction. Hence, the causes
of action in these cases were different.
The rule is that for forum-shopping to exist both actions
must involve the same transactions, the same
circumstances. The actions must also raise identical causes
of action, subject matter and issues.11 cräläwvirtualibräry

In Chemphil Export & Import Corporation v. Court of

Appeals,12 we ruled that:
Forum-shopping or the act of a party against whom an
adverse judgment has been rendered in one forum, of
seeking another (and possible) opinion in another forum
(other than by appeal or the special civil action of certiorari),
or the institution of two (2) or more actions or proceedings
grounded on the same cause on the supposition that one or
the other would make a favorable disposition.
On the second issue, a third party whose property has been
levied upon by a sheriff to enforce a decision against a
judgment debtor is afforded with several alternative
remedies to protect its interests. The third party may avail
himself of alternative remedies cumulatively, and one will
not preclude the third party from availing himself of the
other alternative remedies in the event he failed in the
remedy first availed of.
Thus, a third party may avail himself of the following
alternative remedies:
a) File a third party claim with the sheriff of the Labor
Arbiter, and
b) If the third party claim is denied, the third party may
appeal the denial to the NLRC.13 cräläwvirtualibräry

Even if a third party claim was denied, a third party may still
file a proper action with a competent court to recover
ownership of the property illegally seized by the sheriff. This
finds support in Section 17 (now 16), Rule 39, Revised Rules
of Court, to wit:
SEC. 17 (now 16). Proceedings where property claimed by
third person. -If property claimed by any other person than
the judgment debtor or his agent, and such person makes
an affidavit of his title thereto or right to the possession
thereof, stating the grounds of such right or title, and serve
the same upon the officer making the levy, and a copy
thereof upon the judgment creditor, the officer shall not be
bound to keep the property, unless such judgment creditor
or his agent, on demand of the officer, indemnify the officer
against such claim by a bond in a sum not greater than the
value of the property levied on. In case of disagreement as
to such value, the same shall be determined by the court
issuing the writ of execution.
The officer is not liable for damages, for the taking or
keeping of the property, to any third-party claimant unless
a claim is made by the latter and unless an action for
damages is brought by him against the officer within one
hundred twenty (120) days from the date of the filing of the
bond. But nothing herein contained shall prevent such
claimant or any third person from vindicating his claim to
the property by any proper action.
When the party in whose favor the writ of execution runs, is
the Republic of the Philippines, or any officer duly
representing it, the filing of such bond shall not be required,
and in case the sheriff or levying officer is sued for damages
as a result of the levy, he shall be represented by the
Solicitor General and if held liable therefor, the actual
damages adjudged by the court shall be paid by the National
Treasurer out of such funds as may be appropriated for the
purpose. (Underscoring ours)
In Sy v. Discaya,14 we ruled that:
The right of a third-party claimant to file an independent
action to vindicate his claim of ownership over the properties
seized is reserved by Section 17 (now 16), Rule 39 of the
Rules of Court, x x x:
xxx
As held in the case of Ong v. Tating, et. al., construing the
aforecited rule, a third person whose property was seized by
a sheriff to answer for the obligation of a judgment debtor
may invoke the supervisory power of the court which
authorized such execution. Upon due application by the third
person and after summary hearing, the court may command
that the property be released from the mistaken levy and
restored to the rightful owner or possessor. What said court
do in these instances, however, is limited to a determination
of whether the sheriff has acted rightly or wrongly in the
performance of his duties in the execution of judgment,
more specifically, if he has indeed taken hold of property
not belonging to the judgment debtor. The court does
not and cannot pass upon the question of title to the
property, with any character of finality. It can treat of the
matter only insofar as may be necessary to decide if the
sheriff has acted correctly or not. It can require the sheriff
to restore the property to the claimants possession if
warranted by the evidence. However, if the claimants proof
do not persuade the court of the validity of his title or right
of possession thereto, the claim will be denied.
Independent of the above-stated recourse, a third-party
claimant may also avail of the remedy known as terceria,
provided in Section 17 (now 16), Rule 39, by serving on the
officer making the levy an affidavit of his title and a copy
thereof upon the judgment creditor. The officer shall not be
bound to keep the property, unless such judgment creditor
or his agent, on demand of the officer, indemnifies the
officer against such claim by a bond in a sum not greater
than the value of the property levied on. An action for
damages may be brought against the sheriff within one
hundred twenty (120) days from the filing of the bond.
The aforesaid remedies are nevertheless without prejudice
to any proper action that a third-party claimant may deem
suitable to vindicate his claim to the property. Such a proper
action is, obviously, entirely distinct from that explicitly
prescribed in Section 17 of Rule 39, which is an action for
damages brought by a third-party claimant against the
officer within one hundred twenty (120) days from the date
of the filing of the bond for the taking or keeping of the
property subject of the terceria.
Quite obviously, too, this proper action would have for its
object the recovery of ownership or possession of the
property seized by the sheriff, as well as damages resulting
from the allegedly wrongful seizure and detention thereof
despite the third-party claim; and it may be brought against
the sheriff and such other parties as may be alleged to have
colluded with him in the supposedly wrongful execution
proceedings, such as the judgment creditor himself. Such
proper action, as above pointed out, is and should be an
entirely separate and distinct action from that in which
execution has issued, if instituted by a stranger to the latter
suit.
The remedies above mentioned are cumulative and
may be resorted to by a third-party claimant
independent of or separately from and without need
of availing of the others. If a third-party claimant opted
to file a proper action to vindicate his claim of ownership, he
must institute an action, distinct and separate from that in
which the judgment is being enforced, with the court of
competent jurisdiction even before or without need of filing
a claim in the court which issued the writ, the latter not
being a condition sine qua non for the former. In such proper
action, the validity and sufficiency of the title of the third-
party claimant will be resolved and a writ of preliminary
injunction against the sheriff may be issued. (Emphasis and
underscoring ours)
In light of the above, the filing of a third party claim with the
Labor Arbiter and the NLRC did not preclude the petitioner
from filing a subsequent action for recovery of property and
damages with the Regional Trial Court. And, the institution
of such complaint will not make petitioner guilty of forum
shopping.15 cräläwvirtualibräry

In Santos v. Bayhon,16 wherein Labor Arbiter Ceferina

Diosana rendered a decision in NLRC NCR Case No. 1-313-
85 in favor of Kamapi, the NLRC affirmed the decision.
Thereafter, Kamapi obtained a writ of execution against the
properties of Poly-Plastic Products or Anthony Ching.
However, respondent Priscilla Carrera filed a third-party
claim alleging that Anthony Ching had sold the property to
her. Nevertheless, upon posting by the judgment creditor of
an indemnity bond, the NLRC Sheriff proceeded with the
public auction sale. Consequently, respondent Carrera filed
with Regional Trial Court, Manila an action to recover the
levied property and obtained a temporary restraining order
against Labor Arbiter Diosana and the NLRC Sheriff from
issuing a certificate of sale over the levied property.
Eventually, Labor Arbiter Santos issued an order allowing
the execution to proceed against the property of Poly-Plastic
Products. Also, Labor Arbiter Santos and the NLRC Sheriff
filed a motion to dismiss the civil case instituted by
respondent Carrera on the ground that the Regional Trial
Court did not have jurisdiction over the labor case. The trial
court issued an order enjoining the enforcement of the writ
of execution over the properties claimed by respondent
Carrera pending the determination of the validity of the sale
made in her favor by the judgment debtor Poly-Plastic
Products and Anthony Ching.
In dismissing the petition for certiorari filed by Labor Arbiter
Santos, we ruled that:
x x x. The power of the NLRC to execute its judgments
extends only to properties unquestionably belonging to the
judgment debtor (Special Servicing Corp. v. Centro La Paz,
121 SCRA 748).
The general rule that no court has the power to interfere by
injunction with the judgments or decrees of another court
with concurrent or coordinate jurisdiction possessing equal
power to grant injunctive relief, applies only when no third-
party claimant is involved (Traders Royal Bank v.
Intermediate Appellate Court, 133 SCRA 141 [1984]). When
a third-party, or a stranger to the action, asserts a claim
over the property levied upon, the claimant may vindicate
his claim by an independent action in the proper civil court
which may stop the execution of the judgment on property
not belonging to the judgment debtor. (Underscoring ours)
In Consolidated Bank and Trust Corp. v. Court of Appeals,
193 SCRA 158 [1991], we ruled that:
The well-settled doctrine is that a proper levy is
indispensable to a valid sale on execution. A sale unless
preceded by a valid levy is void. Therefore, since there was
no sufficient levy on the execution in question, the private
respondent did not take any title to the properties sold
thereunder x x x.
A person other than the judgment debtor who claims
ownership or right over the levied properties is not
precluded, however, from taking other legal remedies.
(Underscoring ours)
Jurisprudence is likewise replete with rulings that since the
third-party claimant is not one of the parties to the action,
he could not, strictly speaking, appeal from the order
denying his claim, but should file a separate reinvindicatory
action against the execution creditor or the purchaser of the
property after the sale at public auction, or a complaint for
damages against the bond filed by the judgment creditor in
favor of the sheriff.17
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And in Lorenzana v. Cayetano,18 we ruled that:

The rights of a third-party claimant should not be decided in
the action where the third-party claim has been presented,
but in a separate action to be instituted by the third person.
The appeal that should be interposed if the term appeal may
properly be employed, is a separate reinvindicatory action
against the execution creditor or the purchaser of the
property after the sale at public auction, or complaint for
damages to be charged against the bond filed by the
judgment creditor in favor of the sheriff. Such
reinvindicatory action is reserved to the third-party
claimant.
A separate civil action for recovery of ownership of the
property would not constitute interference with the powers
or processes of the Arbiter and the NLRC which rendered the
judgment to enforce and execute upon the levied properties.
The property levied upon being that of a stranger is not
subject to levy. Thus, a separate action for recovery, upon
a claim and prima-facie showing of ownership by the
petitioner, cannot be considered as interference.
The Fallo
WHEREFORE, the Court REVERSES the decision of the
Court of Appeals and the resolution denying
reconsideration.19 In lieu thereof, the Court renders
judgment ANNULLING the sale on execution of the subject
property conducted by NLRC Sheriff Anam Timbayan in favor
of respondent SAMAR-ANGLO and the subsequent sale of
the same to Rodrigo Sy Mendoza. The Court declares the
petitioner to be the rightful owner of the property involved
and remands the case to the trial court to determine the
liability of respondents SAMAR-ANGLO, Rodrigo Sy
Mendoza, and WESTERN GUARANTY CORPORATION to pay
actual damages that petitioner claimed.
Costs against respondents, except the Court of Appeals.