Lingkod Manggagawa sa Rubberworld v. Rubberworld (Phils.) Inc.

GR No. 153882 January 29, 2007

(Concept of “claims”, Stay or Suspension Order)

Facts:
Respondent Rubberworld (Phils.) Inc. (“Rubberworld”), a domestic corporation
engaged in the manufacture of footwear, bags and garments, filed with the
DOLE a Notice of Temporary Partial Shutdown due to the severe financial
crisis. A copy of said notice was served to Bisig Pagkakaisa-NAFLU, the
recognized labor union with which Rubberworld had a collective bargaining
agreement. Before the date set for the start of the temporary partial shutdown,
Bisig Pagkakaisa-NAFLU staged a strike and set up a picket, causing
Rubberworld’s premises to be closed prematurely.

Petitioner Lingkod Manggagawa sa Rubberworld Adidas-Anglo (“Lingkod”), a

legitimate labor union whose members were employees of Rubberworld, filed
then a complaint against Rubberworld for unfair labor practice (ULP), illegal
shutdown and non-payment of salary and separation pay.

While the said complaint was pending before the Labor Arbiter, Rubberworld
filed with the SEC a Petition for Declaration of a State of Suspension of
Payments with Proposed Rehabilitation Plan. SEC granted said petition and
ordered all actions for claims against Rubberworld pending before any court,
tribunal, office, board, body, Commission or sheriff be deemed suspended.

Notwithstanding the SEC’s suspension order and Rubberworld’s submission of

Motion to Suspend Proceedings, the Labor Arbiter went ahead with the ULP
case and ordered Rubberworld to pay members of Lingkod their backwages
and separation pay, if reinstatement is no longer possible. Rubberworld failed
to perfect its appeal due to non-posting of the Php27M bond. Meanwhile, SEC
issued order declaring Rubberworld as dissolved, lifting its earlier suspension
order and appointed liquidator to effect the dissolution.

Rubberworld filed to the CA Petition for Certiorari questioning the legality of the
LA’s decision, alleging that pursuant to SEC’s order, the proceedings before
the LA should have been suspended. The CA rendered decision finding that
the LA committed grave abuse of discretion when it proceeded with the ULP
case despite the SEC’s suspension order, and declaring the proceedings and
subsequent orders as null and void. Hence, this petition.

Issue:
Whether the petitioner is entitled to the claims arising from the LA’s decision
against the respondent despite of the SEC’s suspension order.
Ruling:
No, petitioner is not entitled to the claims against the respondent.

Sec. 5 (d) and Sec. 6(c) of PD No. 902-A provides that upon the appointment
by 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. 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.

No exception in favor of labor claims is mentioned in the law. Allowing labor

cases to proceed clearly defeats the purpose of the automatic stay and
severely encumbers the management committee’s time and resources. To rule
otherwise would open the floodgates to other similarity situated claimants and
forestall if not defeat the rescue efforts.