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the gross negligence of petitioner to provide him with a safe, healthy and workable
environment.
In his Complaint, respondent alleged that as part of his job description, he conducts
regular maintenance check on petitioner's facilities including its dye house area, which
is very hot and emits foul chemical odor with no adequate safety measures introduced
by petitioner. 10 According to respondent, the air washer dampers and all roof exhaust
vests are blown into open air, carrying dust thereto. 11 Concerned, respondent
recommended to management to place roof insulation to minimize, if not, eradicate
the health hazards attendant in the work place. 12 However, said recommendation
was turned down by management due to high cost. 13 IDCScA
Respondent further suggested to petitioner's management that the engineering office
be relocated because of its dent prone location, such that even if the door of the office
is sealed, accumulated dust creeps in outside the office. 14 This was further aggravated
by the installation of new filters fronting the office. 15 However, no action was taken
by management. 16
According to respondent, these health hazards have been the persistent complaints of
most, if not all, workers of petitioner. 17 Nevertheless, said complaints fell on deaf ears
as petitioner callously ignored the health problems of its workers and even tended to
be apathetic to their plight, including respondent. 18
Respondent averred that, being the only breadwinner in the family, he made several
attempts to apply for a new job, but to his dismay and frustration, employers who knew
of his present health condition discriminated against him and turned down his
application. 19 By reason thereof, respondent suffered intense moral suffering, mental
anguish, serious anxiety and wounded feelings, praying for the recovery of the
following: (1) Five Million Pesos (P5,000,000.00) as moral damages; (2) Two Million
Pesos (P2,000,000.00) as exemplary damages; and (3) Seven Million Three Thousand
and Eight Pesos (P7,003,008.00) as compensatory damages. 20 Claiming to be a pauper
litigant, respondent was not required to pay any filing fee. 21 cCTaSH
In reply, petitioner filed a Motion to Dismiss 22 on the ground that: (1) the RTC has no
jurisdiction over the subject matter of the complaint because the same falls under the
original and exclusive jurisdiction of the Labor Arbiter (LA) under Article 217 (a) (4) of
the Labor Code; and (2) there is another action pending with the Regional Arbitration
Branch III of the NLRC in San Fernando City, Pampanga, involving the same parties for
the same cause.
On December 29, 2003, the RTC issued a Resolution 23 denying the aforesaid Motion
and sustaining its jurisdiction over the instant case. It held that petitioner's alleged
failure to provide its employees with a safe, healthy and workable environment is an
act of negligence, a case of quasi-delict. As such, it is not within the jurisdiction of the
LA under Article 217 of the Labor Code.On the matter of dismissal based on lis
pendencia, the RTC ruled that the complaint before the NLRC has a different cause of
action which is for illegal dismissal and prayer for backwages, actual damages,
attorney's fees and separation pay due to illegal dismissal while in the present case,
the cause of action is for quasi-delict. 24 The fallo of the Resolution is quoted below:
WHEREFORE, finding the motion to dismiss to be without merit, the
Court denies the motion to dismiss.
SO ORDERED. 25
On February 9, 2004, petitioner filed a motion for reconsideration thereto, which was
likewise denied in an Order issued on even date.
Expectedly, petitioner then filed a Petition for Certiorari with the CA on the ground that
the RTC committed grave abuse of discretion amounting to lack or excess of jurisdiction
in upholding that it has jurisdiction over the subject matter of the complaint despite
the broad and clear terms of Article 217 of the Labor Code,as amended. 26
After the submission by the parties of their respective Memoranda, the CA rendered a
Decision 27 dated May 30, 2005 dismissing petitioner's Petition for lack of merit, the
dispositive portion of which states: HAaScT
WHEREFORE, premises considered, petition for certiorari is hereby
DISMISSED for lack of merit.
SO ORDERED. 28
From the aforesaid Decision, petitioner filed a Motion for Reconsideration which was
nevertheless denied for lack of merit in the CA's Resolution 29 dated January 10, 2006.
Hence, petitioner interposed the instant petition upon the solitary ground that "THE
HONORABLE COURT OF APPEALS HAS DECIDED A QUESTION OF SUBSTANCE IN A WAY
NOT IN ACCORD WITH LAW AND WITH APPLICABLE DECISIONS OF THE HONORABLE
SUPREME COURT". 30 Simply, the issue presented before us is whether or not the RTC
has jurisdiction over the subject matter of respondent's complaint praying for moral
damages, exemplary damages, compensatory damages, anchored on petitioner's
alleged gross negligence in failing to provide a safe and healthy working environment
for respondent.
The delineation between the jurisdiction of regular courts and labor courts over cases
involving workers and their employers has always been a matter of dispute. 31 It is up
to the Courts to lay the line after careful scrutiny of the factual milieu of each case.
Here, we find that jurisdiction rests on the regular courts.
In its attempt to overturn the assailed Decision and Resolution of the CA, petitioner
argues that respondent's claim for damages is anchored on the alleged gross
negligence of petitioner as an employer to provide its employees, including herein
respondent, with a safe, healthy and workable environment; hence, it arose from an
the law provides otherwise. 36 For this reason, we have formulated the "reasonable
causal connection rule", wherein if there is a reasonable causal connection between
the claim asserted and the employer-employee relations, then the case is within the
jurisdiction of the labor courts; and in the absence thereof, it is the regular courts that
have jurisdiction. 37 Such distinction is apt since it cannot be presumed that money
claims of workers which do not arise out of or in connection with their employeremployee relationship, and which would therefore fall within the general jurisdiction
of the regular courts of justice, were intended by the legislative authority to be taken
away from the jurisdiction of the courts and lodged with Labor Arbiters on an exclusive
basis. 38 DaTHAc
In fact, as early as Medina vs. Hon. Castro-Bartolome, 39 in negating the jurisdiction of
the LA, although the parties involved were an employer and two employees, the Court
succinctly held that:
The pivotal question to Our mind is whether or not the Labor Code has
any relevance to the reliefs sought by the plaintiffs. For if the Labor Code
has no relevance, any discussion concerning the statutes amending it
and whether or not they have retroactive effect is unnecessary.
It is obvious from the complaint that the plaintiffs have not alleged any
unfair labor practice. Theirs is a simple action for damages for tortious
acts allegedly committed by the defendants. Such being the case, the
governing statute is the Civil Code and not the Labor Code. It results that
the orders under review are based on a wrong premise. 40
Similarly, we ruled in the recent case of Portillo v. Rudolf Lietz, Inc. 41 that not all
disputes between an employer and his employees fall within the jurisdiction of the
labor tribunals such that when the claim for damages is grounded on the "wanton
failure and refusal" without just cause of an employee to report for duty despite
repeated notices served upon him of the disapproval of his application for leave of
absence, the same falls within the purview of Civil Law, to wit:
As early as Singapore Airlines Limited v. Pao, we established that not all
disputes between an employer and his employee(s) fall within the
jurisdiction of the labor tribunals. We differentiated between
abandonment per se and the manner and consequent effects of such
abandonment and ruled that the first, is a labor case, while the second,
is a civil law case. HSacEI
Upon the facts and issues involved, jurisdiction over the present
controversy must be held to belong to the civil Courts. While seemingly
petitioner's claim for damages arises from employer-employee relations,
and the latest amendment to Article 217 of the Labor Code under PD No.
1691 and BP Blg. 130 provides that all other claims arising from employer-
Code since the negligence is direct, substantive and independent. 53 Hence, we ruled
in Yusen Air and Sea Services Phils., Inc. v. Villamor 54 that: TSADaI
When, as here, the cause of action is based on a quasi-delict or tort,
which has no reasonable causal connection with any of the claims
provided for in Article 217, jurisdiction over the action is with the
regular courts. 55
It also bears stressing that respondent is not praying for any relief under the Labor
Code of the Philippines. He neither claims for reinstatement nor backwages or
separation pay resulting from an illegal termination. The cause of action herein
pertains to the consequence of petitioner's omission which led to a work-related
disease suffered by respondent, causing harm or damage to his person. Such cause of
action is within the realm of Civil Law, and jurisdiction over the controversy belongs to
the regular courts. 56
Our ruling in Portillo, is instructive, thus:
There is no causal connection between private respondent's claim for
damages and the respondent employers' claim for damages for the
alleged "Goodwill Clause" violation. Portillo's claim for unpaid salaries did
not have anything to do with her alleged violation of the employment
contract as, in fact, her separation from employment is not "rooted" in
the alleged contractual violation. She resigned from her employment. She
was not dismissed. Portillo's entitlement to the unpaid salaries is not even
contested. Indeed, Lietz Inc.'s argument about legal compensation
necessarily admits that it owes the money claimed by Portillo. 57 HEIcDT
Further, it cannot be gainsaid that the claim for damages occurred after the employeremployee relationship of petitioner and respondent has ceased. Given that respondent
no longer demands for any relief under the Labor Code as well as the rules and
regulations pertinent thereto, Article 217 (a) (4) of the Labor Code is inapplicable to
the instant case, as emphatically held in Portillo, to wit:
It is clear, therefore, that while Portillo's claim for unpaid salaries is a
money claim that arises out of or in connection with an employeremployee relationship, Lietz Inc.'s claim against Portillo for violation of
the goodwill clause is a money claim based on an act done after the
cessation of the employment relationship. And, while the jurisdiction
over Portillo's claim is vested in the labor arbiter, the jurisdiction over
Lietz Inc.'s claim rests on the regular courts. Thus: DaACIH
As it is, petitioner does not ask for any relief under the Labor Code.
It merely seeks to recover damages based on the parties' contract
of employment as redress for respondent's breach thereof. Such
cause of action is within the realm of Civil Law, and jurisdiction
Labor Arbiter has no jurisdiction over the case, there being no reasobale connection with the
claim and the employer-employee realationship. The cause of action arose from quasi-delict.
The gross negligence of the employer to provide safety in the place of work of the
employees
On August 12, 2005, forty-two (42) FTCP employees signed a petition letter
addressed to the Board expressing their complaints against alleged detestable
practices of petitioner, to wit: seeking exemption from policies which she herself
had approved; withholding organization funds despite approval of its release;
procuring health insurance for herself without paying her share of the premium;
and receiving additional fees contrary to the terms of her contract. 8
The next day, August 13, 2005, the staff of FTCP called Lao to a meeting to
submit their petition. They included Atty. Edgar Chatto, then Chairman of the Board,
in the meeting when they realized that it was only her and Escobia who were
present. The group was edgy and demanded for outright solution. However, the
three Board members told them that they should follow a process. 9
Petitioner learned from Atty. Chatto that Program Manager Primitivo
Fostanes and his co-employees prepared a petition questioning her leadership and
management of FTCP. She filed an administrative complaint against Fostanes on
August 24, 2005, but the same was not acted upon. 10
When the Board convened for a meeting on August 28, 2005, petitioner was
not allowed to participate. She was only allowed to join the meeting after three
hours. As ex officio member of the Board and as head of the secretariat, she was
always present in every meeting to discuss her reports, programs and proposals. 11
During the meeting, the Board discussed the animosity between the
petitioner and the staff of FTCP and how they would address the issue since they
have inadequate grievance mechanism for issues involving top management. 12
According to Lao, petitioner became combative in issuing memos and filing of
administrative charges. 13 Atty. Chatto recounted that when petitioner heard about
the protesting senior management and staff, her initial reaction was to resign but
then she asked that the complaints be put in writing. 14 After their discussion, they
called the representatives of the complaining staff and petitioner to air their side.
Consequently, the Board decided that: Acting Board Chair Lao will issue a
back-to-work memorandum and status quo to ensure that all the scheduled tasks
be accomplished; there will be a Supervisory Team, composing of Lao and Escobia,
that will draw a definite work plan and be compensated; the Supervisory Team will
not replace the functions of the National Director; and FTCP will hire an
independent professional management and financial auditor. 15 CAIHTE
Petitioner sent letters to the Board inquiring about the scope of audit. When
the Board did not respond, her lawyers demanded Lao to address petitioner's
concerns regarding the management and financial audit and that the manual of
operations be strictly followed. 16 In another letter, her lawyers informed individual
respondents that petitioner raised the legality and propriety of the conduct of the
audit, thus, they requested that they desist from conducting the audit. The letter
Upon failure of the parties to settle amicably, the mandatory conference was
terminated.
In her position paper, petitioner alleged that she was not included in the
Supervisory Team which performed her functions and issued memorandum directly
to her subordinates. She also alleged that she was excluded from Execom meetings.
27
Respondents, on the other hand, claimed that petitioner was signatory to all
the bank checks of respondent FTCP and approved all requisitions and
disbursements. She received an excess of US$1,000.00 for her salary and did not
return the same. They alleged that petitioner voluntarily resigned from her position
and removed all her belongings from the FTCP. 28
The LA ruled in favor of the respondents, the dispositive portion of the
Decision 29 reads:
LA ruled in favor of respondents
WHEREFORE, foregoing considered, the case is hereby DISMISSED
for lack of merit and judgment is hereby rendered ordering complainant
Rosalinda G. Paredes to pay the following:
1. One Hundred Forty-Three Thousand Six Hundred [F]ortySix and 73/100 (P143,646.73) representing her
accountabilities to respondent FTCP in Philippine Currency;
2. One Thousand Dollars ($1,000.00) to respondent FTCP
representing complainant's accountability in US Currency;
3. Five Hundred Thousand Pesos (P500,000.00) each to
respondents Dr. Virginia Lao, Benjamin Escobia and
Hercules Paradiang for moral damages;
4. One Million Pesos (P1,000,000.00) to respondent FTCP
for damages incurred;
5. One Hundred Thousand Pesos (P100,000.00)
respondents collectively for exemplary damages; and
to
Total
P1,685,900.00;
===========
and
2. Ordering respondent Feed the Children Philippines, Inc. to pay
complainant of moral damages in the amount of One Hundred
Thousand Pesos (P100,000.00); and exemplary damages in the amount
of One Hundred Thousand Pesos (P100,000.00).
Respondents Dr. Virginia Lao, Hercules Paradiang and Benjamin
Escobia are absolved from any liability for lack of legal basis.
SO ORDERED. 32 HEITAD
In a Resolution 33 dated June 14, 2007, the NLRC dismissed the motion for
reconsideration of the respondents. Thus, respondents filed before the CA a
petition for certiorari. The CA ruled for the respondents. The fallo of said decision
reads:
WHEREFORE, the Decision dated March 28, 2007 and the
Resolution dated June 14, 2007, of the National Labor Relations
Commission (NLRC), Fourth Division, Cebu City, in NLRC Case No. V000074-2007, are NULLIFIED and a new one rendered as follows:
1. Declaring private respondent to have voluntarily resigned
from her employment/consultancy with FTCP;
2. Directing private respondent to pay FTCP
a. Thirty-four thousand four hundred thirty-eight
pesos and 37/100 (P34,438.37) for her unpaid loans;
b. One hundred nine thousand two hundred eight
pesos and 36/100 (P109,208.36) respecting her
present case since the LA and the CA found facts supporting the conclusion that
petitioner was not constructively dismissed, while the NLRC's factual findings
contradicted the LA's findings. Under this situation, such conflicting factual findings
are not binding on us, and we retain the authority to pass on the evidence presented
and draw conclusions therefrom.
After judicious review on the records of the case, this Court deems it proper
to disregard the findings of fact of the NLRC. This Court finds that the NLRC
committed grave abuse of discretion when it ruled for the petitioner without
substantial evidence to support its findings of facts and conclusion.
Petitioner, relying in the principle of finality and conclusiveness of the
decisions of labor tribunals, faults the CA for reversing the findings of the NLRC and
affirming the factual findings of the LA that she voluntarily resigned. She averred
that the CA erred when it applied the ruling in the case of St. Martin Funeral Homes
v. NLRC 38 to justify its inquiring into the findings of the NLRC which was outside
the scope of extraordinary remedy of certiorari. She posited that NLRC's findings
cannot be delved into without first declaring the decision itself to have been issued
with grave abuse of discretion. 39
Courts generally accord great respect and finality to factual findings of
administrative agencies, like labor tribunals, in the exercise of their quasi-judicial
function. However, this doctrine espousing comity to administrative findings of facts
are not infallible and cannot preclude the courts from reviewing and, when proper,
disregarding these findings of facts when shown that the administrative body
committed grave abuse of discretion. 40
It is settled that in a special civil action for certiorari under Rule 65, the issues
are limited to errors of jurisdiction or grave abuse of discretion. However, in labor
cases elevated to it via petition for certiorari, the CA is empowered to evaluate the
materiality and significance of the evidence alleged to have been capriciously,
whimsically, or arbitrarily disregarded by the NLRC in relation to all other evidence
on record. 41 ATICcS
The CA can grant this prerogative writ when the factual findings complained
of are not supported by the evidence on record; when it is necessary to prevent a
substantial wrong or to do substantial justice; when the findings of the NLRC
contradict those of the LA; and when necessary to arrive at a just decision of the
case. 42 To make this finding, the CA necessarily has to view the evidence if only to
determine if the NLRC ruling had basis in evidence. 43
Contrary to petitioner's contention, the CA, by express legal mandate and
pursuant to its equity jurisdiction, may review factual findings and evidence of the
parties to determine whether the NLRC gravely abused its discretion in its findings.
44 Since this Court finds that the findings of the LA and NLRC contradicting and that
the findings of NLRC are not supported by the evidence on record, we rule that it is
within the CA's power to review the factual findings of the NLRC. Accordingly, this
Court does not find erroneous the course that the CA took in resolving that
petitioner was not constructively dismissed.
This Court, in turn, has the same authority to sift through the factual findings
of both the CA and the NLRC in the event of their conflict. 45 This Court, therefore,
is not precluded from reviewing the factual issues when there are conflicting
findings by the Labor Arbiter, the NLRC and the Court of Appeals. 46
Since petitioner admittedly resigned, it is incumbent upon her to prove that
her resignation was involuntary and that it was actually a case of constructive
dismissal with clear, positive and convincing evidence. 47
Petitioner alleged that she was forced to resign by Lao, Paradiang and Escobia.
For her, it was the overbearing and prejudiced attitude towards her by individual
respondents that rendered her continued employment impossible, unreasonable or
unlikely. She maintained that the prevailing working environment compelled her to
disassociate with FTCP. She recounted that the individual respondents deliberately
excluded her from important meetings despite being the chief executive officer and
a fixture to all Board meetings.
Petitioner cited the August 28, 2005 Board meeting and a subsequent Execom
meeting where she was apparently banished as proof of respondents'
discrimination. She emphasized in all her pleadings that, aside from it being
provided by the by-laws, she believed that her presence at all Board meetings
cannot be dispensed with since it was through her effort that the Board of Trustees
became functional. For her, she was isolated and singled out. She claimed that these
circumstances clearly denoted that the actions of the respondents were motivated
by discrimination and made in bad faith.
Case law holds that constructive dismissal occurs when there is cessation of
work because continued employment is rendered impossible, unreasonable or
unlikely; when there is a demotion in rank or diminution in pay or both; or when a
clear discrimination, insensibility, or disdain by an employer becomes unbearable
to the employee. 48 The test is whether a reasonable person in the employee's
position would have felt compelled to give up his position under the circumstances.
49
NO CONSTRUCTIVE DISMISSAL
In this case, petitioner cannot be deemed constructively dismissed. She failed
to present clear and positive evidence that respondent FTCP, through its Board of
Trustees, committed acts of discrimination, insensibility, or disdain towards her
which rendered her continued employment unbearable or forced her to terminate
her employment from the respondent. As settled, bare allegations of constructive
dismissal, when uncorroborated by the evidence on record, cannot be given
credence. 50
resignation is actually for the benefit of the employer who has the discretion to
waive such period. Its purpose is to afford the employer enough time to hire another
employee if needed and to see to it that there is proper turn-over of the tasks which
the resigning employee may be handling. 58
Such rule requiring an employee to stay or complete the 30-day period prior
to the effectivity of his resignation becomes discretionary on the part of
management as an employee who intends to resign may be allowed a shorter
period before his resignation becomes effective. 59
Thus, the act of respondents moving the effectivity date of petitioner's
resignation to a date earlier than what she had stated cannot be deemed malicious.
This cannot be viewed as an act of harassment but merely the exercise of
respondent's management prerogative. We cannot expect employers to maintain
in their employ employees who intend to resign, just so the latter can have
continuous work as they look for a new source of income.
Petitioner alleged that the CA erred when it ruled that she should pay
respondents' claims for damages. She maintained that they were not duly proven
and that they clearly did not arise from an employer-employee relationship.
This Court held that the "money claims of workers" referred to in Article 217
60 of the Labor Code embraces money claims which arise out of or in connection
with the employer-employee relationship, or some aspect or incident of such
relationship. 61
Applying the rule of noscitur a sociis in clarifying the scope of Article 217, it is
evident that paragraphs 1 to 5 refer to cases or disputes arising out of or in
connection with an employer-employee relationship. In other words, the money
claims within the original and exclusive jurisdiction of labor arbiters are those which
have some reasonable causal connection with the employer-employee relationship.
62
This claim is distinguished from cases of actions for damages where the
employer-employee relationship is merely incidental and the cause of action
proceeds from a different source of obligation. Thus, the regular courts have
jurisdiction where the damages claimed for were based on: tort, malicious
prosecution, or breach of contract, as when the claimant seeks to recover a debt
from a former employee or seeks liquidated damages in the enforcement of a prior
employment contract. 63
By the designating clause "arising from the employer-employee relations,"
Article 217 applies with equal force to the claim of an employer for actual damages
against its dismissed employee, where the basis for the claim arises from or is
necessarily connected with the fact of termination, and should be entered as a
counterclaim in the illegal dismissal case. 64
In this case, the CA erred in awarding P34,438.37 for petitioner's unpaid debt
to respondents. The claim for recovery of a debt has no reasonable causal
connection with any of the claims provided for in Article 217. The fact that the
transaction happened at the time they were employer and employee did not negate
the civil jurisdiction of trial court. Hence, it is erroneous for the LA and the CA to
rule on such claim arising from a different source of obligation and where the
employer-employee relationship was merely incidental.
Likewise, the CA erred in awarding P109,208.36 for the reimbursement of the
FTCP Provident Fund allegedly withdrawn by petitioner. Although it was entered by
the respondents in its counterclaim, this claim does not arise from or is necessarily
connected with the fact of termination. It also had no reasonable causal connection
with employer-employee relationship.
Lastly, petitioner maintained that the CA erred when it resolved the lingering
doubt in the present case against labor. She alleged that the CA violated the
Constitution, the law, and jurisprudence.
We held that the law and jurisprudence guarantee security of tenure to every
employee. However, in protecting the rights of the workers, the law does not
authorize the oppression or self-destruction of the employer. Social justice does not
mean that every labor dispute shall automatically be decided in favor of labor. Thus,
the Constitution and the law equally recognize the employer's right and prerogative
to manage its operation according to reasonable standards and norms of fair play.
65
It is settled that the law serves to equalize the unequal. The labor force is a
special class that is constitutionally protected because of the inequality between
capital and labor. This constitutional protection presupposes that the labor force is
weak. However, the level of protection to labor should vary from case to case;
otherwise, the state might appear to be too paternalistic in affording protection to
labor. 66 Petitioner could not expect to have the same level of ardent protection
that the laws bestow upon a lowly laborer be given to her, a high ranking officer of
respondent FTCP. As proven, she was considered on equal footing with her
employer and even had the occasion to demand the renewal of her contract by
sending an e-mail to the organization's founder. 67 SDAaTC
We cannot subscribe to petitioner's allegation that the CA ruled against labor
when it resolved the factual issues of the case. As discussed, it is well within the
powers and jurisdiction of the CA to evaluate the evidence alleged to have been
capriciously, whimsically, or arbitrarily disregarded by the NLRC, or as in the present
case, for considering petitioner's bare allegations without support of substantial
evidence. This Court finds that the CA did not violate the Constitution, the law and
jurisprudence. Hence, the resolution of the doubt as to whether petitioner
MONEY CLAIMS
For LA or NLRC to have jurisdiction on money claims, the claim should have
a reasonable connection with EE relationship and not merely an incident
thereof. In this case the money claim arose from debt, so the ordinary civil
courts have jurisdiction over the case
-there is no constructive dismissal. Based on the evidence, the petitioner
voluntary resigned. changing the effectivity period of the resignation does not
amount to constructive dismissal.
-there was no harassment. she was not purposely excluded from meetings.
payable to him. WBGI rejected Vital's claim and contended that after offsetting,
Vital actually owed it P369,156.19. 10
On January 4, 2006, Vital filed a complaint before the National Labor Relations
Commission (NLRC) Regional Arbitration Branch III (RAB), docketed as NLRC Case
No. RAB-III-01-9671-06, for non-payment of separation and retirement benefits,
underpayment of salaries/wages and 13th month pay, illegal reduction of salary
and benefits, and damages. 11
For its part, WBGI averred that the Labor Arbiter (LA) had no jurisdiction over
the complaint because Vital is not an employee, but a mere incorporator and
stockholder of WBGI, hence, no employer-employee relationship exists between
them. 12 AIDSTE
The LA Ruling
In a Decision 13 dated May 3, 2006, the LA found that the issues between Vital
and WBGI are intra-corporate in nature as they arose between the relations of a
stockholder and the corporation, and not from an employee and employer
relationship. 14 Thus, the LA dismissed the case for lack of jurisdiction, 15 prompting
Vital to file his complaint 16 for payment of unpaid salaries, separation and
retirement benefits, and damages on July 19, 2007 before the RTC, docketed as Civil
Case No. 8694. 17
The RTC Ruling
In a Decision 18 dated December 12, 2011, the RTC, acting as a special
commercial court, oppositely found that Vital was an employee of WBGI and
thereby, upheld his claim of P845,000.00 and P250,000.00 in unpaid salaries and
separation pay. However, the RTC offset these amounts, including the P500,000.00
due from WBGI's acquisition of Vital's shares of stocks, against the P923,843.59
payable to WBGI from ERJ Enterprises, thus, awarding Vital the net amount of
P671,156.41, with legal interest from date of demand until full payment, P50,000.00
as attorney's fees and costs of suit plus litigation expenses. 19
The RTC ratiocinated that since the positions of Internal Auditor and
Personnel Manager were not provided for in WBGI's By-Laws, Vital was not a
corporate officer but an employee entitled to employment benefits. It also
maintained that it had jurisdiction to rule on the main intra-corporate controversy,
together with the question of damages and employment benefits. 20
Aggrieved, WBGI elevated the case to the CA on appeal. 21
The CA Ruling
In a Decision 22 dated September 30, 2013, the CA dismissed the appeal,
agreeing with the RTC's finding that Vital was an employee of WGBI. While the CA
observed that the RTC's award of employment benefits to Vital was improper, as
the same was under the exclusive jurisdiction of the labor arbiters, it still ruled on
said claim, reasoning that it has the eventual authority to review the labor courts'
decision on the matter. 23
WBGI filed a motion for reconsideration 24 which was, however, denied in a
Resolution 25 dated March 4, 2014; hence, the present petition.
The Issue before the Court
The main issue to be resolved is whether or not the CA erred in ruling upon
Vital's claim of P845,000.00 and P250,000.00 in unpaid salaries and separation pay.
The Court's Ruling
The petition is partly meritorious.
At the outset, it should be pointed out that the instant case actually involves
three (3) distinct causes of action, namely, (1) Vital's claim for P845,000.00 and
P250,000.00 in unpaid salaries and separation pay; (2) the P923,843.59 in
arrearages payable to WBGI from ERJ Enterprises, which was admitted by Vital but
not claimed by WBGI; and (3) Vital's claim of P500,000.00 due from WBGI's
acquisition of Vital's shares of stocks. All of the foregoing were threshed out by the
RTC in its December 12, 2011 Decision, and effectively upheld by the CA on appeal.
AaCTcI
However, the RTC's adjudication of the first cause of action was improper
since the same is one which arose from Vital and WBGI's employer-employee
relations, involving an amount exceeding P5,000.00, hence, belonging to the
jurisdiction of the labor arbiters pursuant to Article 217 of the Labor Code:
Art. 217. Jurisdiction of the Labor Arbiters and the Commission.
(a) Except as otherwise provided under this Code, the Labor
Arbiters shall have original and exclusive jurisdiction to hear and decide,
within thirty (30) calendar days after the submission of the case by the
parties for decision without extension, even in the absence of
stenographic notes, the following cases involving all workers, whether
agricultural or non-agricultural:
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. Claims for actual, moral, exemplary and other forms of
damages arising from the employer-employee relations;
On December 20, 1995, Basso received a letter from Mr. Ralph Schulz (Mr.
Schulz), who was then CMI's Vice President of Marketing and Sales, informing Basso
that he has agreed to work in CMI as a consultant on an "as needed basis" effective
February 1, 1996 to July 31, 1996. The letter also informed Basso that: (1) he will
not receive any monetary compensation but will continue being covered by the
insurance provided by CMI; (2) he will enjoy travel privileges; and (3) CMI will
advance Php1,140,000.00 for the payment of housing lease for 12 months. 10
On January 11, 1996, Basso wrote a counter-proposal 11 to Mr. Schulz
regarding his employment status in CMI. On March 14, 1996, Basso wrote another
letter addressed to Ms. Marty Woodward (Ms. Woodward) of CMI's Human
Resources Department inquiring about the status of his employment. 12 On the
same day, Ms. Woodward responded that pursuant to the employment contract
dated February 1, 1991, Basso could be terminated at will upon a thirty-day notice.
This notice was allegedly the letter Basso received from Mr. Schulz on December
20, 1995. Ms. Woodward also reminded Basso of the telephone conversation
between him, Mr. Schulz and Ms. Woodward on December 19, 1995, where they
informed him of the company's decision to relieve him as General Manager. Basso,
instead, was offered the position of consultant to CMI. Ms. Woodward also
informed Basso that CMI rejected his counter-proposal and, thus, terminated his
employment effective January 31, 1996. CMI offered Basso a severance pay, in
consideration of the Php1,140,000.00 housing advance that CMI promised him. 13
Basso filed a Complaint for Illegal Dismissal with Moral and Exemplary
Damages against CMI on December 19, 1996. 14 Alleging the presence of foreign
elements, CMI filed a Motion to Dismiss 15 dated February 10, 1997 on the ground
of lack of jurisdiction over the person of CMI and the subject matter of the
controversy. In an Order 16 dated August 27, 1997, the Labor Arbiter granted the
Motion to Dismiss. Applying the doctrine of lex loci contractus, the Labor Arbiter
held that the terms and provisions of the employment contract show that the
parties did not intend to apply our Labor Code (Presidential Decree No. 442). The
Labor Arbiter also held that no employer-employee relationship existed between
Basso and the branch office of CMI in the Philippines, but between Basso and the
foreign corporation itself.
On appeal, the NLRC remanded the case to the Labor Arbiter for the
determination of certain facts to settle the issue on jurisdiction. NLRC ruled that the
issue on whether the principle of lex loci contractus or lex loci celebrationis should
apply has to be further threshed out. 17
Labor Arbiter's Ruling
Labor Arbiter Madjayran H. Ajan in his Decision 18 dated September 24, 1999
dismissed the case for lack of merit and jurisdiction.
The Labor Arbiter agreed with CMI that the employment contract was
executed in the US "since the letter-offer was under the Texas letterhead and the
acceptance of Complainant was returned there." 19 Thus, applying the doctrine of
lex loci celebrationis, US laws apply. Also, applying lex loci contractus, the Labor
Arbiter ruled that the parties did not intend to apply Philippine laws, thus:
Although the contract does not state what law shall apply, it is
obvious that Philippine laws were not written into it. More specifically,
the Philippine law on taxes and the Labor Code were not intended by
the parties to apply, otherwise Par. 7 on the payment by Complainant
U.S. Federal and Home State income taxes, and Pars. 22/23 on
termination by 30-day prior notice, will not be there. The contract was
prepared in contemplation of Texas or U.S. laws where Par. 7 is required
and Pars. 22/23 is allowed. 20
The Labor Arbiter also ruled that Basso was terminated for a valid cause based
on the allegations of CMI that Basso committed a series of acts that constitute
breach of trust and loss of confidence. 21
The Labor Arbiter, however, found CMI to have voluntarily submitted to his
office's jurisdiction. CMI participated in the proceedings, submitted evidence on the
merits of the case, and sought affirmative relief through a motion to dismiss. 22
NLRC's Ruling
Both CMI and Basso filed their respective Motions for Reconsideration dated
January 15, 2004 27 and January 8, 2004. 28 Both motions were dismissed in
separate Resolutions dated March 15, 2004 29 and February 27, 2004, 30
respectively.
Basso filed a Petition for Certiorari dated April 16, 2004 with the Court of
Appeals docketed as CA-G.R. SP No. 83938. 31 Basso imputed grave abuse of
discretion on the part of the NLRC in ruling that he was validly dismissed. CMI filed
its own Petition for Certiorari dated May 13, 2004 docketed as CA-G.R. SP No.
84281, 32 alleging that the NLRC gravely abused its discretion when it assumed
jurisdiction over the person of CMI and the subject matter of the case.
In its Resolution dated October 7, 2004, the Court of Appeals consolidated the
two cases 33 and ordered the parties to file their respective Memoranda.
The Court of Appeal's Decision
illegal dismissal
The Court of Appeals promulgated the now assailed Decision 34 dated May
23, 2006, the relevant dispositive portion of which reads:
WHEREFORE, the petition of Continental docketed as CA-G.R. SP
No. 84281 is DENIED DUE COURSE and DISMISSED.
On the other hand the petition of Basso docketed as CA-G.R. SP
No. 83938 is GIVEN DUE COURSE and GRANTED, and accordingly, the
assailed Decision dated November 28, 2003 and Resolution dated
February 27, 2004 of the NLRC are SET ASIDE and VACATED. Instead
judgment is rendered hereby declaring the dismissal of Basso illegal and
ordering Continental to pay him separation pay equivalent to one (1)
month pay for every year of service as an alternative to reinstatement.
Further, ordering Continental to pay Basso his full backwages from the
date of his said illegal dismissal until date of this decision. The claim for
moral and exemplary damages as well as attorney's fees are dismissed.
35
The Court of Appeals ruled that the Labor Arbiter and the NLRC had
jurisdiction over the subject matter of the case and over the parties. The Court of
Appeals explained that jurisdiction over the subject matter of the action is
determined by the allegations of the complaint and the law. Since the case filed by
Basso is a termination dispute that is "undoubtedly cognizable by the labor
tribunals", the Labor Arbiter and the NLRC had jurisdiction to rule on the merits of
the case. On the issue of jurisdiction over the person of the parties, who are
foreigners, the Court of Appeals ruled that jurisdiction over the person of Basso was
acquired when he filed the complaint for illegal dismissal, while jurisdiction over the
person of CMI was acquired through coercive process of service of summons to its
agent in the Philippines. The Court of Appeals also agreed that the active
participation of CMI in the case rendered moot the issue on jurisdiction. aScITE
On the merits of the case, the Court of Appeals declared that CMI illegally
dismissed Basso. The Court of Appeals found that CMI's allegations of loss of trust
and confidence were not established. CMI "failed to prove its claim of the incidents
which were its alleged bases for loss of trust or confidence." 36 While managerial
employees can be dismissed for loss of trust and confidence, there must be a basis
for such loss, beyond mere whim or caprice.
After the parties filed their Motions for Reconsideration, 37 the Court of
Appeals promulgated Resolution 38 dated June 19, 2007 denying CMI's motion,
while partially granting Basso's as to the computation of backwages.
Hence, this petition, which raises the following issues:
I.
WHETHER OR NOT THE COURT OF APPEALS ERRED IN REVIEWING THE
FACTUAL FINDINGS OF THE NLRC INSTEAD OF LIMITING ITS INQUIRY
INTO WHETHER OR NOT THE NLRC COMMITTED GRAVE ABUSE OF
DISCRETION.
II.
WHETHER OR NOT THE COURT OF APPEALS ERRED IN RULING THAT THE
LABOR ARBITER AND THE NLRC HAD JURISDICTION TO HEAR AND TRY
THE ILLEGAL DISMISSAL CASE.
III.
WHETHER OR NOT THE COURT OF APPEALS ERRED IN FINDING THAT
BASSO WAS NOT VALIDLY DISMISSED ON THE GROUND OF LOSS OF
TRUST OR CONFIDENCE.
We begin with the second issue on the jurisdiction of the Labor Arbiter and
the NLRC in the illegal dismissal case. The first and third issues will be discussed
jointly.
The labor tribunals had jurisdiction
over the parties and the subject
matter of the case.
CMI maintains that there is a conflict-of-laws issue that must be settled to
determine proper jurisdiction over the parties and the subject matter of the case. It
also alleges that the existence of foreign elements calls for the application of US
laws and the doctrines of lex loci celebrationis (the law of the place of the
ceremony), lex loci contractus (law of the place where a contract is executed), and
lex loci intentionis (the intention of the parties as to the law that should govern their
agreement). CMI also invokes the application of the rule of forum non conveniens
to determine the propriety of the assumption of jurisdiction by the labor tribunals.
We agree with CMI that there is a conflict-of-laws issue that needs to be
resolved first. Where the facts establish the existence of foreign elements, the case
presents a conflict-of-laws issue. 39 The foreign element in a case may appear in
different forms, such as in this case, where one of the parties is an alien and the
other is domiciled in another state. three consecutive phases in conflict-of-laws problems
In Hasegawa v. Kitamura, 40 we stated that in the judicial resolution of
conflict-of-laws problems, three consecutive phases are involved: jurisdiction,
choice of law, and recognition and enforcement of judgments. In resolving the
conflicts problem, courts should ask the following questions:
1. "Under the law, do I have jurisdiction over the subject matter and the
parties to this case?
2. "If the answer is yes, is this a convenient forum to the parties, in light
of the facts?
3. "If the answer is yes, what is the conflicts rule for this particular
problem?
4. "If the conflicts rule points to a foreign law, has said law been
properly pleaded and proved by the one invoking it?
5. "If so, is the application or enforcement of the foreign law in the
forum one of the basic exceptions to the application of foreign law? In
short, is there any strong policy or vital interest of the forum that is at
stake in this case and which should preclude the application of foreign
law? 41
Jurisdiction is defined as the power and authority of the courts to hear, try
and decide cases. Jurisdiction over the subject matter is conferred by the
Constitution or by law and by the material allegations in the complaint, regardless
of whether or not the plaintiff is entitled to recover all or some of the claims or
reliefs sought therein. 42 It cannot be acquired through a waiver or enlarged by the
omission of the parties or conferred by the acquiescence of the court. 43 That the
employment contract of Basso was replete with references to US laws, and that it
originated from and was returned to the US, do not automatically preclude our labor
tribunals from exercising jurisdiction to hear and try this case.
This case stemmed from an illegal dismissal complaint. The Labor Code, under
Article 217, clearly vests original and exclusive jurisdiction to hear and decide cases
involving termination disputes to the Labor Arbiter. Hence, the Labor Arbiter and
the NLRC have jurisdiction over the subject matter of the case.
As regards jurisdiction over the parties, we agree with the Court of Appeals
that the Labor Arbiter acquired jurisdiction over the person of Basso,
notwithstanding his citizenship, when he filed his complaint against CMI. On the
other hand, jurisdiction over the person of CMI was acquired through the coercive
process of service of summons. We note that CMI never denied that it was served
with summons. CMI has, in fact, voluntarily appeared and participated in the
proceedings before the courts. Though a foreign corporation, CMI is licensed to do
business in the Philippines and has a local business address here. The purpose of
the law in requiring that foreign corporations doing business in the country be
licensed to do so, is to subject the foreign corporations to the jurisdiction of our
courts. 44
Considering that the Labor Arbiter and the NLRC have jurisdiction over the
parties and the subject matter of this case, these tribunals may proceed to try the
case even if the rules of conflict-of-laws or the convenience of the parties point to
a foreign forum, this being an exercise of sovereign prerogative of the country
where the case is filed. 45
The next question is whether the local forum is the convenient forum in light
of the facts of the case. CMI contends that a Philippine court is an inconvenient
forum.
We disagree.
Under the doctrine of forum non conveniens, a Philippine court in a conflictof-laws case may assume jurisdiction if it chooses to do so, provided, that the
following requisites are met: (1) that the Philippine Court is one to which the parties
may conveniently resort to; (2) that the Philippine Court is in a position to make an
intelligent decision as to the law and the facts; and (3) that the Philippine Court has
or is likely to have power to enforce its decision. 46 All these requisites are present
here.
Basso may conveniently resort to our labor tribunals as he and CMI had
physical presence in the Philippines during the duration of the trial. CMI has a
Philippine branch, while Basso, before his death, was residing here. Thus, it could
be reasonably expected that no extraordinary measures were needed for the
parties to make arrangements in advocating their respective cases.
1.
The labor tribunals can make an intelligent decision as to the law and facts.
The incident subject of this case (i.e., dismissal of Basso) happened in the
Philippines, the surrounding circumstances of which can be ascertained without
having to leave the Philippines. The acts that allegedly led to loss of trust and
confidence and Basso's eventual dismissal were committed in the Philippines. As to
the law, we hold that Philippine law is the proper law of the forum, as we shall
discuss shortly. Also, the labor tribunals have the power to enforce their judgments
because they acquired jurisdiction over the persons of both parties. HEITAD
2.
3.
Our labor tribunals being the convenient fora, the next question is what law
should apply in resolving this case.
The choice-of-law issue in a conflict-of-laws case seeks to answer the
following important questions: (1) What legal system should control a given
situation where some of the significant facts occurred in two or more states; and (2)
to what extent should the chosen legal system regulate the situation. 47 These
questions are entirely different from the question of jurisdiction that only seeks to
answer whether the courts of a state where the case is initiated have jurisdiction to
enter a judgment. 48 As such, the power to exercise jurisdiction does not
automatically give a state constitutional authority to apply forum law. 49
CMI insists that US law is the applicable choice-of-law under the principles of
lex loci celebrationis and lex loci contractus. It argues that the contract of
employment originated from and was returned to the US after Basso signed it, and
hence, was perfected there. CMI further claims that the references to US law in the
employment contract show the parties' intention to apply US law and not ours.
These references are:
a. Foreign station allowance of forty percent (40%) using the "U.S. State
Department Index, the base being Washington, D.C."
b. Tax equalization that made Basso responsible for "federal and any home
state income taxes."
c. Hardship allowance of fifteen percent (15%) of base pay based upon the
"U.S. Department of State Indexes of living costs abroad."
d. The employment arrangement is "one at will, terminable by either party
without any further liability on thirty days prior written notice." 50
CMI asserts that the US law on labor relations particularly, the US Railway
Labor Act sanctions termination-at-will provisions in an employment contract. Thus,
CMI concludes that if such laws were applied, there would have been no illegal
dismissal to speak of because the termination-at-will provision in Basso's
employment contract would have been perfectly valid.
We disagree.
Point of contact prevails. no express intention to make the US law govern, only references.
dismissed except for just and authorized causes provided by law and after due
process having been complied with. 58 Hence, the US Railway Labor Act, which
sanctions termination-at-will, should not be applied in this case.
Additionally, the rule is that there is no judicial notice of any foreign law. As
any other fact, it must be alleged and proved. 59 If the foreign law is not properly
pleaded or proved, the presumption of identity or similarity of the foreign law to
our own laws, otherwise known as processual presumption, applies. Here, US law
may have been properly pleaded but it was not proved in the labor tribunals.
Having disposed of the issue on jurisdiction, we now rule on the first and third
issues.
The Court of Appeals may review the
factual findings of the NLRC in a
Rule 65 petition.
CMI submits that the Court of Appeals overstepped the boundaries of the
limited scope of its certiorari jurisdiction when instead of ruling on the existence of
grave abuse of discretion, it proceeded to pass upon the legality and propriety of
Basso's dismissal. Moreover, CMI asserts that it was error on the part of the Court
of Appeals to re-evaluate the evidence and circumstances surrounding the dismissal
of Basso.
We disagree.
The power of the Court of Appeals to review NLRC decisions via a Petition for
Certiorari under Rule 65 of the Revised Rules of Court was settled in our decision in
St. Martin Funeral Home v. NLRC. 60 The general rule is that certiorari does not lie
to review errors of judgment of the trial court, as well as that of a quasi-judicial
tribunal. In certiorari proceedings, judicial review does not go as far as to examine
and assess the evidence of the parties and to weigh their probative value. 61
However, this rule admits of exceptions. In Globe Telecom, Inc. v. Florendo-Flores,
62 we stated:
In the review of an NLRC decision through a special civil action for
certiorari, resolution is confined only to issues of jurisdiction and grave
abuse of discretion on the part of the labor tribunal. Hence, the Court
refrains from reviewing factual assessments of lower courts and
agencies exercising adjudicative functions, such as the NLRC.
Occasionally, however, the Court is constrained to delve into factual
matters where, as in the instant case, the findings of the NLRC
contradict those of the Labor Arbiter.
In this instance, the Court in the exercise of its equity jurisdiction
may look into the records of the case and re-examine the questioned
findings. As a corollary, this Court is clothed with ample authority to
review matters, even if they are not assigned as errors in their appeal,
if it finds that their consideration is necessary to arrive at a just decision
of the case. The same principles are now necessarily adhered to and are
applied by the Court of Appeals in its expanded jurisdiction over labor
cases elevated through a petition for certiorari; thus, we see no error
on its part when it made anew a factual determination of the matters
and on that basis reversed the ruling of the NLRC. 63 (Citations omitted.)
Thus, the Court of Appeals may grant the petition when the factual findings
complained of are not supported by the evidence on record; when it is necessary to
prevent a substantial wrong or to do substantial justice; when the findings of the
NLRC contradict those of the Labor Arbiter; and when necessary to arrive at a just
decision of the case. 64 To make these findings, the Court of Appeals necessarily has
to look at the evidence and make its own factual determination. 65
Since the findings of the Labor Arbiter differ with that of the NLRC, we find
that the Court of Appeals correctly exercised its power to review the evidence and
the records of the illegal dismissal case.
Basso was illegally dismissed.
It is of no moment that Basso was a managerial employee of CMI. Managerial
employees enjoy security of tenure and the right of the management to dismiss
must be balanced against the managerial employee's right to security of tenure,
which is not one of the guaranties he gives up. 66
In Apo Cement Corporation v. Baptisma, 67 we ruled that for an employer to
validly dismiss an employee on the ground of loss of trust and confidence under
Article 282 (c) of the Labor Code, the employer must observe the following
guidelines: 1) loss of confidence should not be simulated; 2) it should not be used
as subterfuge for causes which are improper, illegal or unjustified; 3) it may not be
arbitrarily asserted in the face of overwhelming evidence to the contrary; and 4) it
must be genuine, not a mere afterthought to justify earlier action taken in bad faith.
More importantly, it must be based on a willful breach of trust and founded on
clearly established facts.
We agree with the Court of Appeals that the dismissal of Basso was not
founded on clearly established facts and evidence sufficient to warrant dismissal
from employment. While proof beyond reasonable doubt is not required to
establish loss of trust and confidence, substantial evidence is required and on the
employer rests the burden to establish it. 68 There must be some basis for the loss
of trust, or that the employer has reasonable ground to believe that the employee
is responsible for misconduct, which renders him unworthy of the trust and
confidence demanded by his position. 69
CMI alleges that Basso committed the following:
(1) Basso delegated too much responsibility to the General Sales Agent and
relied heavily on its judgments. 70
(2) Basso excessively issued promotional tickets to his friends who had no
direct business with CMI. 71
(3) The advertising agency that CMI contracted had to deal directly with Guam
because Basso was hardly available. 72 Mr. Schulz discovered that Basso
exceeded the advertising budget by $76,000.00 in 1994 and by
$20,000.00 in 1995. 73
(4) Basso spent more time and attention to his personal businesses and was
reputed to own nightclubs in the Philippines. 74
(5) Basso used free tickets and advertising money to promote his personal
business, 75 such as a brochure that jointly advertised one of Basso's
nightclubs with CMI.
We find that CMI failed to discharge its burden to prove the above acts. CMI
merely submitted affidavits of its officers, without any other corroborating
evidence. Basso, on the other hand, had adequately explained his side. On the
advertising agency and budget issues raised by CMI, he explained that these were
blatant lies as the advertising needs of CMI were centralized in its Guam office and
the Philippine office was not authorized to deal with CMI's advertising agency,
except on minor issues. 76 Basso further stated that under CMI's existing policy,
ninety percent (90%) of the advertising decisions were delegated to the advertising
firm of McCann-Ericsson in Japan and only ten percent (10%) were left to the
Philippine office. 77 Basso also denied the allegations of owning nightclubs and
promoting his personal businesses and explained that it was illegal for foreigners in
the Philippines to engage in retail trade in the first place. TIADCc
Apart from these accusations, CMI likewise presented the findings of the audit
team headed by Mr. Stephen D. Goepfert, showing that "for the period of 1995 and
1996, personal passes for Continental and other airline employees were noted (sic)
to be issued for which no service charge was collected." 78 The audit cited the trip
pass log of a total of 10 months. The trip log does not show, however, that Basso
caused all the ticket issuances. More, half of the trips in the log occurred from March
to July of 1996, 79 a period beyond the tenure of Basso. Basso was terminated
effectively on January 31, 1996 as indicated in the letter of Ms. Woodward. 80
CMI also accused Basso of making "questionable overseas phone calls". Basso,
however, adequately explained in his Reply 81 that the phone calls to Italy and
Portland, USA were made for the purpose of looking for a technical maintenance
personnel with US Federal Aviation Authority qualifications, which CMI needed at
that time. The calls to the US were also made in connection with his functions as
General Manager, such as inquiries on his tax returns filed in Nevada. Basso also
explained that the phone lines 82 were open direct lines that all personnel were
free to use to make direct long distance calls. 83
Finally, CMI alleged that Basso approved the disbursement of Php80,000.00
to cover the transfer fee of the Manila Polo Club share from Mr. Kenneth Glover,
the previous General Manager, to him. CMI claimed that "nowhere in the said
contract was it likewise indicated that the Manila Polo Club share was part of the
compensation package given by CMI to Basso." 84 CMI's claims are not credible.
Basso explained that the Manila Polo Club share was offered to him as a bonus to
entice him to leave his then employer, United Airlines. A letter from Mr. Paul J.
Casey, former president of Continental, supports Basso. 85 In the letter, Mr. Casey
explained:
As a signing bonus, and a perk to attract Mr. Basso to join
Continental Airlines, he was given the Manila Polo Club share and
authorized to have the share re-issued in his name. In addition to giving
Mr. Basso the Manila Polo Club share, Continental agreed to pay the
dues for a period of three years and this was embodied in his contract
with Continental. This was all done with my knowledge and approval.
86
Clause 14 of the employment contract also states:
Club Memberships: The Company will locally pay annual dues for
membership in a club in Manila that your immediate supervisor and I
agree is of at least that value to Continental through you in your role as
our General Manager for the Philippines. 87
Taken together, the above pieces of evidence suggest that the Manila Polo
Club share was part of Basso's compensation package and thus he validly used
company funds to pay for the transfer fees. 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. 88
Finally, CMI violated procedural due process in terminating Basso. In King of
Kings Transport, Inc. v. Mamac 89 we detailed the procedural due process steps in
termination of employment:
To clarify, the following should be considered in terminating the
services of employees:
(1) The first written notice to be served on the employees should
contain the specific causes or grounds for termination against them, and
a directive that the employees are given the opportunity to submit their
written explanation within a reasonable period. "Reasonable
opportunity" under the Omnibus Rules means every kind of assistance
that management must accord to the employees to enable them to
30. Art 217, Arts. 261-262 (1), Jurisdiction; Art 290, Prescription of ULP
UST FACULTY UNION V UST
SECOND DIVISION
[G.R. No. 203957. July 30, 2014.]
UNIVERSITY OF SANTO TOMAS FACULTY UNION, petitioner, vs.
UNIVERSITY OF SANTO TOMAS, respondent.
DECISION
CARPIO, J p:
The Case
G.R. No. 203957 is a petition for review 1 assailing the Decision 2 promulgated on 13
July 2012 as well as the Resolution 3 promulgated on 19 October 2012 by the Court of
Appeals (CA) in CA-G.R. SP No. 120970. The CA set aside the 8 June 2011 Decision 4
and 29 July 2011 Resolution 5 of the Fourth Division of the National Labor Relations
Commission (NLRC) in NLRC LAC No. 10-003370-08, as well as the 24 September 2010
Decision 6 of the Labor Arbiter (LA) in NLRC-NCR Case No. 09-09745-07.
In its 24 September 2010 decision, the LA ordered the University of Santo Tomas (UST)
to remit P18,000,000.00 to the hospitalization and medical benefits fund (fund)
pursuant to the mandate of the 1996-2001 Collective Bargaining Agreement (CBA). The
LA also ordered UST to pay 10% of the total monetary award as attorney's fees. The
other claims were dismissed for lack of merit.
In its 8 June 2011 decision, the NLRC ordered UST to remit to the University of Santo
Tomas Faculty Union (USTFU) the amounts of P80,000,000.00 for the fund pursuant to
the CBA and P8,000,000.00 as attorney's fees equivalent to 10% of the monetary
award. The NLRC denied. UST's motion for reconsideration for lack of merit.
In its 13 July 2012 decision, the CA found grave abuse of discretion on the part of NLRC
and granted UST's petition. The CA set aside the decisions of the NLRC and the LA,
without prejudice to the refiling of USTFU's complaint in the proper forum. The CA
denied USTFU's motion for reconsideration for lack of merit.
The Facts
The CA recited the facts as follows: cAIDEa
remitted
2M
2M did
remitted not slide
1M
remitted
2M did
not slide
1M did
not slide
1M
remitted
2M did
not slide
1M did
not slide
1M did
not slide
4M
remitted
2M did
not slide
1M did
not slide
1M did
not slide
4M did
not slide
Total
2M
10M
1M
4M
1M
3M
4M
8M
8M
=====
25M
======
[USTFU] added that after the fifth year of the CBA, i.e. 2001 onwards,
[UST] ought to remit the amount of P8,000,000.00 ([2]M+1M+1M+4M)
annually to the Hospitalization and Medical Benefits Fund. Hence, for the
school year 2001-2002 up to the school year 2005-2006, an additional
amount of P24,000,000.00 (8M x 3) should have been remitted by [UST]
to the aforesaid fund. All in all, the total amount yet to be remitted had
ballooned to P81,000,000.00. prLL
Furthermore, [USTFU] averred that [UST] likewise failed and refused to
render a proper accounting of the monies it paid or released to the
covered faculty as well as the money it received as tuition fee increase
starting from school year 1997-1998 onwards thereby violating Section D
(1), Article XIII of the 1996-2001 CBA which provides that:
'At the end of this agreement, and within three (3) months
therefrom, the UNIVERSITY shall render an accounting of the
monies it paid or released to the covered faculty in consequence
hereof.' IEAacS
On the other hand, [UST] claimed that it religiously complied with the
economic provisions of the 1996-2001 CBA particularly its obligation to
remit to the Hospitalization and Medical Benefits Fund as the
renegotiated economic provisions under the MOA by remitting the total
amount of P8,000,000.00. [UST] claimed that it was never the intention
of the parties to the CBA that the amounts deposited to the
Hospitalization fund for each year shall be carried over to the succeeding
years. UST added that the MOA likewise made no mention that the
amount of P4,000,000.00 corresponding to the school year 1999-2000
should be carried over to the next school year. Thus, it was safe to
conclude that the clear intention of the parties was that the amounts
indicated on the CBA should only be remitted once on the scheduled
school year. Accordingly, [UST] averred that it was not guilty of unfair
labor practice.
[UST] further argued that the claim of [USTFU] had already been barred
by prescription since under Article 290 of the Labor Code all unfair labor
practice [cases] should be filed within one (1) year from the accrual
thereof otherwise they shall forever be barred. And assuming that the
instance [sic] case may be considered as a money claim, the same already
prescribed after three (3) years from the time the cause of action
accrued.
Finally, [UST] maintained that the present dispute should not be treated
as unfair labor practice but should be resolved as a grievance under the
CBA and referred to a Voluntary Arbitrator.
The parties thereafter submitted their respective Replies and Rejoinders
amplifying their arguments while refuting those made by the other. 7
The Labor Arbiter's Ruling
The LA ruled in favor of USTFU. The LA classified USTFU's complaint as one for "unfair
labor practice, claims for sliding in of funds to hospitalization and medical benefits
under the CBA, damages and attorney's fee with prayer for slide-in and restoration of
medical benefits under the CBA." 8 The LA ruled that UST was not able to comply with
Article XIII, Section 1A-(4) of the 1996-2001 CBA. However, despite UST's alleged noncompliance, the LA ruled that UST did not commit unfair labor practice.
The LA interpreted the pertinent CBA provisions to mean that UST bound itself to
contribute to the fund P2,000,000.00 every school year, regardless of the appropriated
augmentation amount. The LA computed UST's liability in this manner:
Considering that the pertinent provision of the [1996-2001] CBA Article
XIII, Section 1A(4) stated that "The University shall establish a perpetual
hospitalization and medical benefits fund in the sum of two million pesos
(P2,000,000.00) . . ." it follows that the amount of P2M every school year
must be slided in regardless of the augmentation amount as may be
appropriated. The word shall is mandatory and the word perpetual [is]
continuous thus, [UST] is obligated to remit the actual amount to wit:
SY 1996-1997 - P2M
SY 1997-1998 - P2M + P1M
SY 1998-1999 - P2M + P1M
SY 1999-2000 - P4M (Renegotiated)
SY 2000-2001 - P4M
=
=
=
=
=
P2M
P3M
P3M
P4M
P4M
TOTAL REMITTANCE
P16M
=======
P17 million for CBA years 1996 to 2001, P40 million for CBA years 2001 to 2006, and
P40 million for CBA years 2006 to 2011. USTFU also claimed that the amount should
be remitted by UST to USTFU for proper turnover to the fund. DAESTI
UST, on the other hand, filed an Appeal Memorandum. 13 UST claimed that the LA
committed grave abuse of discretion in taking cognizance over the case because the
issue is within the jurisdiction of the voluntary arbitrator. UST further claimed that the
LA committed grave abuse of discretion in finding that UST erred in its interpretation
of the CBA and in not finding that USTFU's claims are already barred by prescription.
The NLRC's Ruling
The NLRC granted USTFU's appeal and denied UST's appeal for lack of merit. The NLRC
ordered UST to pay USTFU P80,000,000.00 and attorney's fees equivalent to ten
percent of the monetary award.
The NLRC pointed out that UST's refusal to comply, despite repeated demands, with
the CBA's economic provisions is tantamount to a gross and flagrant violation. Thus,
the present case properly falls under the LA's original jurisdiction as well as the NLRC's
appellate jurisdiction. The issue of prescription also cannot be held against USTFU
because the cause of action accrued only when UST refused to comply with USTFU's 6
February 2007 demand letter. The demand letter was sent only after the conduct of
proceedings in the Permanent Union-University Committee (PUUC).
The NLRC noted that the subsequent CBAs between UST and USTFU show that the
parties intended that the amount appropriated each year to augment the fund shall be
carried over to the succeeding years and is chargeable to the tuition fee increment.
The NLRC ruled that the amounts appropriated for each year during the effectivity of
the 1996-2001 CBA should still be appropriated to the succeeding years. From school
year 1997-1998 and onwards, the basis for such carry over is that the amounts were
sourced from tuition increases corresponding to a given school year. Since any increase
in tuition is integrated into the subsequent tuition, the amount allocated to the fund
because of the tuition increase should be remitted to the fund. The 2001-2006 and
2006-2011 CBAs have express provisions on the carry over. The NLRC computed UST's
deficiency 14 as follows: HSTCcD
For the 1996-2001 CBA:
Year 1
Year 2
Year 3
Year 4
2M
1M
2M
1M
1M
2M
1M
1M
2M
1M
1M
4M
4M
2M +
3M +
4M +
8M +
8M =
25M
======= ======= ======== ======= ======= =========
Since it is undisputed that [UST] remitted the amount of
PhP8,000,000.00 only, there is still a deficiency of PhP17,000,000.00
corresponding to the 1996-2001 CBA. cICHTD
xxx xxx xxx
For the 2001-2006 CBA:
Year 1
Year 2
Year 3
2001-02
2002-03
2003-04
2M
2M
3M
Total
amount
2005-06 that should
be
submitted
Year 4
2M
2M
3M
3M
3M
3M
2M +
5M +
8M +
8M =
23M
======= ======= ======= ======= ========
For the 2006-2011 CBA:
Year 1 Year 2 Year 3 Year 4 Year 5 Total amount
2006-07 2007-08 2008-09 2009-10 2010-11 that should be
submitted
8M +
8M +
8M +
8M +
8M =
40M
The NLRC computed UST's total liability for school years 1996-1997 up to 2010-2011 at
P80,000,000.00. The records show that UST remitted P8,000,000.00 for 1996-2001
CBA, and there is absence of proof that the additional contributions to the fund were
made for the 2001-2006 and 2006-2011 CBAs. The NLRC also ordered UST to pay
USTFU attorney's fees at 10% of the monetary award. CacISA
UST filed a motion for reconsideration of the NLRC decision. UST again claimed that
the Voluntary Arbitrator, and not LA, had jurisdiction over the interpretation of the
CBA; the P80,000,000.00 award had no basis; and the fund should be remitted to the
Hospital and Medical Benefits Committee, not to USTFU, as stated in the CBA.
In a Resolution promulgated on 29 July 2011, the NLRC denied UST's motion for
reconsideration for lack of merit.
UST filed a petition for certiorari and prohibition under Rule 65 of the Rules of Court
before the CA. UST still questioned the jurisdiction of the LA, as well as the award of
P80,000,000.00. UST also claimed that USTFU's money claims are barred by
prescription, and that the proper recipient of the award should be the Hospital and
Medical Benefits Committee. Finally, UST also questioned the award for attorney's
fees. 15 DTcASE
On 8 November 2011, USTFU filed a comment before the CA. USTFU claimed that the
NLRC did not commit grave abuse of discretion in finding that USTFU is entitled to its
claims for payment of the unremitted benefits. USTFU also claimed that certiorari is
not a proper remedy for UST because the NLRC did not commit any grave abuse of
discretion. 16
The Court of Appeals' Ruling
The CA, in its decision promulgated on 13 July 2012, disposed of the present case by
agreeing with UST's argument that the LA and the NLRC did not have jurisdiction to
hear and decide the present case. The CA stated that since USTFU's ultimate objective
is to clarify the relevant items in the CBA, then USTFU's complaint should have been
filed with the voluntary arbitrator or panel of voluntary arbitrators.
The dispositive portion of the CA's decision reads:
WHEREFORE, finding grave abuse of discretion on the part of public
respondent NLRC, the petition is GRANTED. Without prejudice to the refiling of private respondent's complaint with the proper forum, the
assailed NLRC decision dated June 8, 2011 and resolution dated July 29,
2011 in NLRC LAC No. 10-003370-08, as well as the decision dated
September 24, 2010 of the Labor Arbiter in NLRC-NCR Case No. 09-0974507 are hereby SET ASIDE.
SO ORDERED. 17
USTFU filed its motion for reconsideration 18 before the CA. USTFU maintained that
the LA and the NLRC had jurisdiction over the subject matter of the complaint.
In a resolution 19 promulgated on 19 October 2012, the CA denied USTFU's motion for
reconsideration for lack of merit. HaIATC
USTFU filed the present petition for review 20 before this Court on 7 December 2012.
The Issues
Reading the pertinent portions of the 1996-2001 CBA along with those of the Labor
Code,we see that UST and USTFU's misunderstanding arose solely from their differing
interpretations of the CBA's provisions on economic benefits, specifically those
concerning the fund. Therefore, it was clearly error for the LA to assume jurisdiction
over the present case. The case should have been resolved through the voluntary
arbitrator or panel of voluntary arbitrators.
Article 217 (c) of the Labor Code provides that the Labor Arbiter shall refer to the
grievance machinery and voluntary arbitration as provided in the CBA those cases that
involve the interpretation of said agreements. Article 261 of the Labor Code further
provides that all unresolved grievances arising from the interpretation or
implementation of the CBA, including violations of said agreement, are under the
original and exclusive jurisdiction of the voluntary arbitrator or panel of voluntary
arbitrators. Excluded from this original and exclusive jurisdiction is gross violation of
the CBA, which is defined in Article 261 as "flagrant and/or malicious refusal to comply
with the economic provisions" of the CBA. San Jose v. NLRC 25 provides guidelines for
understanding Articles 217, 261, and 262: HAEDCT
1. The jurisdiction of the Labor Arbiter and Voluntary Arbitrator or Panel
of Voluntary Arbitrators over the cases enumerated in Articles 217, 261,
and 262 can possibly include money claims in one form or another.
2. The cases where the Labor Arbiters have original and exclusive
jurisdiction are enumerated in Article 217, and that of the Voluntary
Arbitrator or Panel of Voluntary Arbitrators in Article 261.
3. The original and exclusive jurisdiction of Labor Arbiters is qualified by
an exception as indicated in the introductory sentence of Article 217 (a),
to wit:
"Art. 217. Jurisdiction of Labor Arbiters . . . (a) Except as otherwise
provided under this Code the Labor Arbiter shall have original and
exclusive jurisdiction to hear and decide . . . the following cases involving
all workers. . ."
The phrase "Except as otherwise provided under this Code" refers to the
following exceptions:
A. Art. 217. Jurisdiction of Labor Arbiters . . .
xxx xxx xxx
(c) Cases arising from the interpretation or implementation of collective
bargaining agreement and those arising from the interpretation or
enforcement of company procedure/policies shall be disposed of by the
Labor Arbiter by referring the same to the grievance machinery and
voluntary arbitrator as may be provided in said agreement. aETASc
USTFU's adamant refusal to consider voluntary arbitration ignores Articles 261 to 262A of the Labor Code,as well as Steps III and IV of Section 3 of the 1996-2001 CBA.
Accrual of Cause of Action and
Prescription of Claims
USTFU's claims arose from UST's alleged failure to contribute the correct amounts to
the fund during the 1996-2001 CBA. However, USTFU did not complain of any violation
by UST during the lifetime of the 1996-2001 CBA. Neither did USTFU complain of any
violation by UST during the lifetime of the succeeding 2001-2006 CBA. It was only on 6
February 2007 that USTFU sent a demand letter to UST Rector Fr. Ernesto M. Arceo,
O.P., for the claimed hospitalization and medical benefits under the 1996-2001 CBA.
On 2 March 2007, UST, through its Rector, Fr. Ernesto M. Arceo, O.P., informed USTFU,
through its President, Dr. Gil Gamilla, that "the hospitalization and medical benefits
contained in [the 1996-2001 CBA] were a one-time give, and therefore not meant to
slide." USTFU notified UST on 24 June 2007 about its intent to file the necessary
complaint. On 6 September 2007, USTFU filed a complaint against UST before the LA.
The 1996-2001 CBA, as well as the applicable laws, is silent as to when UST's alleged
violation becomes actionable. Thus, we apply Article 1150 of the Civil Code of the
Philippines: "The time for prescription for all kinds of actions, when there is no special
provision which ordains otherwise, shall be counted from the day they may be
brought." 26 Prescription of an action is counted from the time the action may be
brought. 27
It is error to state that USTFU's cause of action accrued only upon UST's categorical
denial of its claims on 2 March 2007. USTFU's cause of action accrued when UST
allegedly failed to comply with the economic provisions of the 1996-2001 CBA. Upon
such failure by UST, USTFU could have brought an action against UST.
Article 290 of the Labor Code provides that unfair labor practices prescribe within one
year "from accrual of such unfair labor practice; otherwise, they shall be forever
barred." Article 291 of the same Code provides that money claims arising from
employer-employee relations prescribe "within three (3) years from the time the cause
of action accrued; otherwise they shall be forever barred." USTFU's claims under the
1996-2001 CBA, whether characterized as one for unfair labor practice or for money
claims from employer-employee relations, have already prescribed when USTFU filed
a complaint before the LA.
USTFU filed its complaint under the theory of unfair labor practice. Thus, USTFU had
one year from UST's alleged failure to contribute, or "slide in," the correct amount to
the fund to file its complaint. USTFU had one year for every alleged breach by UST:
school year (SY) 1997-1998, SY 1998-1999, SY 1999-2000, SY 2000-2001, SY 2001-2002,
and SY 2002-2003. USTFU did not file any complaint within the respective one-year
prescriptive periods. USTFU decided to file its complaint only in 2007, several years
after the accrual of its several possible causes of action. Even if USTFU filed its
complaint under the theory of money claims from employer-employee relations, its
cause of action still has prescribed. caITAC
Determination of the Benefits Due
We consolidate USTFU's claims, UST's remittances, and UST's alleged balances in the
table below:
USTFU's claims UST's remittances
28
29
UST's alleged
balances
P2,000,000.00
P3,000,000.00
P4,000,000.00
P2,000,000.00
P1,000,000.00
P1,000,000.00
0
P2,000,000.00
P3,000,000.00
P8,000,000.00
P8,000,000.00
P4,000,000.00
-
P4,000,000.00
P8,000,000.00
P8,000,000.00
P8,000,000.00
P8,000,000.00
P8,000,000.00
P8,000,000.00
P2,000,000.00
P5,000,000.00
P8,000,000.00
P8,000,000.00
P8,000,000.00
P6,000,000.00
P3,000,000.00
0
0
0
P8,000,000.00
P8,000,000.00
0
P8,000,000.00
P8,000,000.00
0
P8,000,000.00
P8,000,000.00
0
P8,000,000.00
P8,000,000.00
0
P8,000,000.00
P8,000,000.00
0
P105,000,000.00
P79,000,000.00
P26,000,000.00
=============
=============
=============
We restate the following provisions in the pertinent CBAs to establish what USTFU
claims as its bases for additional funds: SEDIaH
1996-2001 CBA
ARTICLE XIII
ECONOMIC BENEFITS
3. In the event that the tuition fee benefits of the faculty for
any of the three years covered by this part of this agreement
i.e., the University decides to raise tuition fees in the coming
two school years, exceed those provided herein, the same
may be allocated for salaries and other benefits as
determined by the FACULTY UNION and the matter duly
communicated to the UNIVERSITY; and, cDAISC
4. None of the benefits provided herein, both distributable
immediately after ratification and those to be given during
the term hereof, other than the amounts checked-off and the
Hospitalization and Medical Benefits are to be directly
distributed to the faculty members by the University. 30
1999 Memorandum of Agreement
1.0 The University hereby agrees to grant increase in salary and fringe
benefits as provided for by the tuition fee increase of school year
1999-2000 according to the following scheme:
xxx xxx xxx
6.0 If there is any tuition fee increase for school year 2000-2001, there
will be an additional increase in salary/fringe benefits to be agreed
upon by both parties.
7.0 An additional amount of four million pesos will be deposited in
the hospitalization fund of the faculty. 31
2001-2006 CBA
Article XX
over to the succeeding years . . . ." The 1996-2001 CBA does not have this carry-over
provision. During the lifetime of the 1996-2001 CBA, the 1999 Memorandum of
Agreement, and the 2001-2006 CBA, USTFU never questioned the non-compliance by
UST with an alleged carry-over agreement applicable to the 1996-2001 CBA. AcIaST
This Court is well aware of Article 1702 of the Civil Code,which provides that "[i]n case
of doubt, all labor legislation and all labor contracts shall be construed in favor of the
safety and decent living for the laborer." This Court is also well aware that when the
provisions of the CBA are clear and unambiguous, the literal meaning of the
stipulations shall govern. 34 In the present case, the CBA provisions pertaining to the
fund are clear and should be interpreted according to their literal meaning.
WHEREFORE, we DENY the petition. We DECLARE that the claims of the University of
Santo Tomas Faculty Union have prescribed and that there is no carry-over provision
for the Hospitalization and Medical Benefits Fund in the 1996-2001 Collective
Bargaining Agreement and in the 1999 Memorandum of Agreement. The carry-over
provision for the Hospitalization and Medical Benefits Fund is found only in the 20012006 and 2006-2011 Collective Bargaining Agreements.
No costs.
SO ORDERED.
Leonardo-de Castro, * Del Castillo, Perez and Perlas-Bernabe, JJ., concur.
||| (UST Faculty Union v. UST, G.R. No. 203957, [July 30, 2014])
Llamas received a copy of this LA decision on January 5, 2006. Meanwhile, he filed his
position paper 6 on December 20, 2005.
In his position paper, Llamas claimed that he failed to seasonably file his position paper
because his previous counsel, despite his repeated pleas, had continuously deferred
compliance with the LA's orders for its submission. Hence, he was forced to secure the
services of another counsel on December 19, 2005 in order to comply with the LA's
directive.
On the merits of his complaint, Llamas alleged that he had a misunderstanding with
Aljuver Ong, Bryan's brother and operations manager of Diamond Taxi, on July 13, 2005
(July 13, 2005 incident). When he reported for work on July 14, 2005, Bryan refused to
give him the key to his assigned taxi cab unless he would sign a prepared resignation
letter. He did not sign the resignation letter. He reported for work again on July 15 and
16, 2005, but Bryan insisted that he sign the resignation letter prior to the release of
the key to his assigned taxi cab. Thus, he filed the illegal dismissal complaint.
On January 16, 2006, Llamas filed before the LA a motion for reconsideration of its
November 29, 2005 decision. The LA treated Llamas' motion as an appeal per Section
15, Rule V of the 2005 Revised Rules of Procedure of the NLRC (2005 NLRC Rules) (the
governing NLRC Rules of Procedure at the time Llamas filed his complaint before the
LA).
In its May 30, 2006 resolution, 7 the NLRC dismissed for non-perfection Llamas' motion
for reconsideration treated as an appeal. The NLRC pointed out that Llamas failed to
attach the required certification of non-forum shopping per Section 4, Rule VI of the
2005 NLRC Rules.
Llamas moved to reconsider the May 30, 2006 NLRC resolution; he attached the
required certification of non-forum shopping.
When the NLRC denied his motion for reconsideration 8 in its August 31, 2006
resolution, 9 Llamas filed before the CA a petition for certiorari. 10
The CA's ruling
Constructive dismissal
In its August 13, 2008 decision, 11 the CA reversed and set aside the assailed NLRC
resolution. Citing jurisprudence, the CA pointed out that non-compliance with the
requirement on the filing of a certificate of non-forum shopping, while mandatory, may
nonetheless be excused upon showing of manifest equitable grounds proving
substantial compliance. Additionally, in order to determine if cogent reasons exist to
suspend the rules of procedure, the court must first examine the substantive aspect of
the case.
The CA pointed out that the petitioners failed to prove overt acts showing Llamas' clear
intention to abandon his job. On the contrary, the petitioners placed Llamas in a
situation where he was forced to quit as his continued employment has been rendered
We agree that remanding the case to the NLRC for factual determination and decision
of the case on the merits would have been, ordinarily, a prudent approach.
Nevertheless, the CA's action on this case was not procedurally wrong and was not
without legal and jurisprudential basis.
In this jurisdiction, courts generally accord great respect and finality to factual findings
of administrative agencies, i.e., labor tribunals, in the exercise of their quasi-judicial
function. 17 These findings, however, are not infallible. This doctrine espousing comity
to administrative findings of facts cannot preclude the courts from reviewing and,
when proper, disregarding these findings of facts when shown that the administrative
body committed grave abuse of discretion by capriciously, whimsically or arbitrarily
disregarding evidence or circumstances of considerable importance that are crucial or
decisive of the controversy. 18
Hence, in labor cases elevated to it via petition for certiorari, the CA can grant this
prerogative writ when it finds that the NLRC acted with grave abuse of discretion in
arriving at its factual conclusions. To make this finding, the CA necessarily has to view
the evidence if only to determine if the NLRC ruling had basis in evidence. It is in the
sense and manner that the CA, in a Rule 65 certiorari petition before it, had to
determine whether grave abuse of discretion on factual issues attended the NLRC's
dismissal of Llamas' appeal. Accordingly, we do not find erroneous the course that the
CA took in resolving Llamas' certiorari petition. The CA may resolve factual issues by
express legal mandate and pursuant to its equity jurisdiction.
The NLRC committed grave abuse of
discretion in dismissing Llamas' appeal on
mere technicality
Article 223 (now Article 229) 19 of the Labor Code states that decisions (or awards or
orders) of the LA shall become final and executory unless appealed to the NLRC within
ten (10) calendar days from receipt of the decision. Consistent with Article 223, Section
1, Rule VI of the 2005 NLRC Rules also provides for a ten (10)-day period for appealing
10 days
the LA's decision. Under Section 4 (a), Rule VI 20 of the 2005 NLRC Rules, the appeal
shall be in the form of a verified memorandum of appeal and accompanied by proof of
payment of the appeal fee, posting of cash or surety bond (when necessary), certificate
of non-forum shopping, and proof of service upon the other parties. Failure of the
appealing party to comply with any or all of these requisites within the reglementary
period will render the LA's decision final and executory.
Indisputably, Llamas did not file a memorandum of appeal from the LA's decision.
Instead, he filed, within the ten (10)-day appeal period, a motion for reconsideration.
Under Section 15, Rule V of the 2005 NLRC Rules, motions for reconsideration from the
LA's decision are not allowed; they may, however, be treated as an appeal provided
they comply with the requirements for perfecting an appeal. The NLRC dismissed
Llamas' motion for reconsideration treated as an appeal for failure to attach the
required certificate of non-forum shopping per Section 4 (a), Rule VI of the 2005 NLRC
Rules.
The requirement for a sworn certification of non-forum shopping was prescribed by
the Court under Revised Circular 28-91, 21 as amended by Administrative Circular No.
04-94, 22 to prohibit and penalize the evils of forum shopping. Revised Circular 28-91,
as amended by Administrative Circular No. 04-94, requires a sworn certificate of nonforum shopping to be filed with every petition, complaint, application or other
initiatory pleading filed before the Court, the CA, or the different divisions thereof, or
any other court, tribunal or agency. HIaTCc
Ordinarily, the infirmity in Llamas' appeal would have been fatal and would have
justified an end to the case. A careful consideration of the circumstances of the case,
however, convinces us that the NLRC should, indeed, have given due course to Llamas'
appeal despite the initial absence of the required certificate. We note that in his
motion for reconsideration of the NLRC's May 30, 2006 resolution, Llamas attached the
required certificate of non-forum shopping.
Moreover, Llamas adequately explained, in his motion for reconsideration, the
inadvertence and presented a clear justifiable ground to warrant the relaxation of the
rules. To recall, Llamas was able to file his position paper, through his new counsel,
only on December 20, 2005. He hired the new counsel on December 19, 2005 after
several repeated, albeit failed, pleas to his former counsel to submit, on or before
October 25, 2005 per the LA's order, the required position paper. On November 29,
2005, however, the LA rendered a decision that Llamas and his new counsel learned
and received a copy of only on January 5, 2006. Evidently, the LA's findings and
conclusions were premised solely on the petitioners' pleadings and evidence. And,
while not the fault of the LA, Llamas, nevertheless, did not have a meaningful
opportunity to present his case, refute the contents and allegations in the petitioners'
position paper and submit controverting evidence.
Faced with these circumstances, i.e., Llamas' subsequent compliance with the
certification-against-forum-shopping requirement; the utter negligence and
inattention of Llamas' former counsel to his pleas and cause, and his vigilance in
immediately securing the services of a new counsel; Llamas' filing of his position paper
before he learned and received a copy of the LA's decision; the absence of a meaningful
opportunity for Llamas to present his case before the LA; and the clear merits of his
case (that our subsequent discussion will show), the NLRC should have relaxed the
application of procedural rules in the broader interests of substantial justice. Indeed,
while the requirement as to the certificate of non-forum shopping is mandatory, this
requirement should not, however, be interpreted too literally and thus defeat the
objective of preventing the undesirable practice of forum-shopping. 23
Under Article 221 (now Article 227) 24 of the Labor Code,"the Commission and its
members and the 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 in the interest of due process." 25 Consistently, we have
emphasized that "rules of procedure are mere tools designed to facilitate the
attainment of justice. A strict and rigid application which would result in technicalities
that tend to frustrate rather than promote substantial justice should not be allowed . .
. . No procedural rule is sacrosanct if such shall result in subverting justice." 26
Ultimately, what should guide judicial action is that a party is given the fullest
opportunity to establish the merits of his action or defense rather than for him to lose
life, honor, or property on mere technicalities. 27
Then, too, we should remember that "the dismissal of an employee's appeal on purely
technical ground is inconsistent with the constitutional mandate on protection to
labor." 28 Under the Constitution 29 and the Labor Code, 30 the State is bound to
protect labor and assure the rights of workers to security of tenure tenurial security
being a preferred constitutional right that, under these fundamental guidelines,
technical infirmities in labor pleadings cannot defeat. 31
In this case, Llamas' action against the petitioners concerned his job, his security of
tenure. This is a property right of which he could not and should not be deprived of
without due process. 32 But, more importantly, it is a right that assumes a preferred
position in our legal hierarchy. 33
Under these considerations, we agree that the NLRC committed grave abuse of
discretion when, in dismissing Llamas' appeal, it allowed purely technical infirmities
to defeat Llamas' tenurial security without full opportunity to establish his case's
merits.
Llamas did not abandon his work; he was
constructively dismissed
NO ABANDONMENT
the burden of proving that its conduct and action were for valid and legitimate
grounds. 43 The petitioners' persistent refusal to give Llamas the key to his assigned
taxi cab, on the condition that he should first sign the resignation letter, rendered,
without doubt, his continued employment impossible, unreasonable and unlikely; it,
thus, constituted constructive dismissal.
In sum, the CA correctly found equitable grounds to warrant relaxation of the rule on
perfection of appeal (filing of the certificate of non-forum shopping) as there was
patently absent sufficient proof for the charge of abandonment. Accordingly, we find
the CA legally correct in reversing and setting aside the NLRC's resolution rendered in
grave abuse of discretion.
WHEREFORE, in light of these considerations, we hereby DENY the petition. We
AFFIRM the decision dated August 13, 2008 and the resolution dated November 27,
2009 of the Court of Appeals in CA-G.R. CEB-S.P. No. 02623.
SO ORDERED.
Carpio, Del Castillo, Perez and Perlas-Bernabe, JJ., concur.
||| (Diamond Taxi v. Llamas, Jr., G.R. No. 190724, [March 12, 2014])
NO ABANDOMENT; he was constructively dismissed when the pet persistently refused to give him the key.
His immediate filing of the case is a proof of his intention to return to work and negates the employer's
charge of abandonment.
lithiasis, right; and normal urinary bladder; slightly enlarged prostate gland was
noted." Dr. Alegre repeatedly recommended that he undergo extracorporeal
shockwave lithotripsy for the dissolution of his right kidney stone. 5
On February 23, 2011, Picar consulted Dr. Efren R. Vicaldo (Dr. Vicaldo) who also
diagnosed him to be suffering from Right Renal Calculus, Essential Hypertension. Dr.
Vicaldo considered his illness as work aggravated/related and declared him unfit to
resume work as a seafarer in any capacity. 6
Picar then filed a complaint for permanent disability compensation, balance of sick
wages, reimbursement of medical expenses, moral and exemplary damages, and
attorney's fees.
On June 22, 2011, the Labor Arbiter (LA) rendered judgment 7 in favor of Picar. The LA
found that his illness was work-related and that the nature of his work as a chief cook
contributed to the aggravation of his condition. The dispositive portion of the decision
reads:
WHEREFORE, premises considered, judgment is hereby rendered
ordering respondents to pay jointly and severally the complainant his
permanent disability compensation in the sum of US$60,000.00, balance
of sick wages in the sum of US$1,890.00, moral damages in the sum of
P200,000.00, exemplary damages in the sum of P200,000.00, and ten
percent (10%) of the judgment award as attorney's fees. ETDaIC
All other claims are dismissed for lack of merit.
SO ORDERED. 8
On appeal, the NLRC affirmed in toto the decision of the LA. 9 The NLRC ruled that
Picar's disability was permanent as he was totally unable to perform his job for more
than 120 days from his repatriation. In support of its ruling, it cited the case of Remigio
v. NLRC 10 where it was held that if an employee was unable to perform his customary
job for more than 120 days and did not come within the coverage of Rule X of the
Amended Rules on Employees Compensability (which, in more detailed manner,
describes what constitutes temporary total disability), then the said employee
undoubtedly suffered from permanent total disability regardless of whether or not he
lost the use of any part of his body.
Aggrieved, petitioners elevated the matter to the CA.
In the meantime, Picar moved for the execution of the LA decision. On July 3, 2012, the
LA issued a Writ of Execution for the enforcement and full satisfaction of its decision.
Consequently, petitioners paid the judgment award as evidenced by the Satisfaction of
Judgment pursuant to a Writ of Execution with Acknowledgment Receipt executed by
the NLRC-NCR Sheriff on August 13, 2012. 11
In its assailed Decision, dated May 2, 2013, the CA dismissed the petition. Citing the
case of Career Philippines Ship Management, Inc. v. Madjus, 12 the CA ruled that the
payment by petitioners of the judgment award constituted an amicable settlement
that had rendered the petition moot and academic. The dispositive portion of the
decision reads:
WHEREFORE, in light of the foregoing considerations, the instant petition
is DISMISSED for having become MOOT AND ACADEMIC. 13
Petitioners filed a motion for reconsideration of the said decision, but it was denied in
the CA Resolution, dated September 9, 2013.
Hence, this petition.
Issues and Arguments
For resolution is the sole issue of whether the CA committed reversible error in
dismissing the petition for having become moot and academic.
Petitioners contend that the settlement of the judgment award was by virtue of a writ
of execution duly issued and was effected specifically without prejudice to further
recourse before the CA. There was nothing voluntary about the satisfaction of the
judgment award made in strict and compulsory compliance with Rule XI, Section 8 of
the 2011 NLRC Rules of Procedure. The terms of the settlement were fair to both the
employer and the employee. Hence, the ruling in Career Philippines, relied upon by the
CA, was inapplicable.
On April 14, 2014, Picar filed his Comment 14 wherein he stresses that the CA
committed no error in dismissing the petition. He asserts that the voluntary
satisfaction by petitioners of the full judgment award rendered the said petition moot
and was a clear indication that petitioners believed on the merits and judiciousness of
the award for disability compensation.
Petitioners fault the CA for dismissing outright the petition for being moot and
academic instead of resolving the same on its merits.
The Court's Ruling
As correctly argued by petitioners, the petition for certiorari before the CA was not
rendered moot and academic by their satisfaction of the judgment award in
compliance with the writ of execution issued by the LA. The CA cited Career Philippines,
but it finds no application here. Career Philippines was resolved on equitable
considerations. In the said case, while petitioner employer had the luxury of having
other remedies available to it such as its petition for certiorari pending before the CA
and an eventual appeal to this Court, respondent seafarer could no longer pursue other
claims, including for interests that may accrue during the pendency of the case. Thus,
it was held that the LA and the CA could not be faulted for interpreting petitioner's
prejudice to the pending petition for certiorari filed by the employer before the CA. It
was further agreed that, in the event that the petition would be granted and the
judgment award would be eventually reversed, whether in full or partially, the seafarer
shall return all amounts in excess of what he would be entitled to and the employer
shall be allowed to file the necessary motion for the return or restitution of the amount
unjustly paid. The parties' covenants, as well as the acknowledgment by the seafarer
of receipt in full of the judgment award, were embodied in a receipt of the judgment
award with undertaking. The CA, upon being informed of the settlement, dismissed the
petition for certiorari for being moot and academic. In support of the dismissal, the CA
also relied on Career Philippines. In reversing and setting aside the order of dismissal
issued by the CA, the Court in Transmarine wrote:
In Career Philippines, believing that the execution of the LA Decision was
imminent after its petition for injunctive relief was denied, the employer
filed before the LA a pleading embodying a conditional satisfaction of
judgment before the CA and, accordingly, paid the employee the
monetary award in the LA decision. In the said pleading, the employer
stated that the conditional satisfaction of the judgment award was
without prejudice to its pending appeal before the CA and that it was
being made only to prevent the imminent execution.
The CA later dismissed the employer's petition for being moot and
academic, noting that the decision of the LA had attained finality with the
satisfaction of the judgment award. This Court affirmed the ruling of the
CA, interpreting the "conditional settlement" to be tantamount to an
amicable settlement of the case resulting in the mootness of the petition
for certiorari, considering (i) that the employee could no longer pursue
other claims, and (ii) that the employer could not have been compelled
to immediately pay because it had filed an appeal bond to ensure
payment to the employee.
Stated differently, the Court ruled against the employer because the
conditional satisfaction of judgment signed by the parties was highly
prejudicial to the employee. The agreement stated that the payment of
the monetary award was without prejudice to the right of the employer
to file a petition for certiorari and appeal, while the employee agreed that
she would no longer file any complaint or prosecute any suit of action
against the employer after receiving the payment.
xxx xxx xxx
In the present case, the Receipt of the Judgment Award with Undertaking
was fair to both the employer and the employee. As in Leonis Navigation,
the said agreement stipulated that respondent should return the amount
to petitioner if the petition for certiorari would be granted but without
I-II
II-III
III-IV
IV-V
V-VI
VI-VII
VII-VIII
VIII-IX
IX-X
50
60
70
80
100
120
170
220
260
60
70
80
110
140
170
230
290
350
65
78
95
120
150
195
255
340
455
On August 18, 1997 and with the previous collective bargaining agreements already
expired, PHILEC selected Lipio for promotion from Machinist under Pay Grade VIII 7 to
Foreman I under Pay Grade B. 8 PHILEC served Lipio a memorandum, 9 instructing him
to undergo training for the position of Foreman I beginning on August 25, 1997. PHILEC
undertook to pay Lipio training allowance as provided in the memorandum:
This will confirm your selection and that you will undergo training for the
position of Foreman I (PG B) of the Tank Finishing Section, Distribution
Transformer Manufacturing and Repair effective August 25, 1997.
TaDSHC
You will be trained as a Foreman I, and shall receive the following training
allowance until you have completed the training/observation period
which shall not exceed four (4) months.
First Month
Second Month
Third Month
Fourth Month
P350.00
P815.00
P815.00
P815.00
First Month
Second Month
Third Month
Fourth Month
P255.00
P605.00
P1,070.00
P1,070.00
Step Increase
I-II
II-III
III-IV
IV-V
V-VI
VI-VII
VII-VIII
VIII-IX
IX-X
P80.00
P105.00
P136.00
P175.00
P224.00
P285.00
P361.00
P456.00
P575.00
increase for pay grade bracket VIII-IX plus the step increase for pay grade bracket IX-X,
thus: 25
First month
Second month
Third month
Fourth month
P456.00
P1,031.00
P1,031.00
P1,031.00
With respect to Ignacio, Sr., he was holding the position of DT-Assembler under Pay
Grade VII when he was selected to train for the position of Foreman I under Pay Grade
X. Thus, for his first month of training, Ignacio, Sr. should be paid training allowance
equal to the step increase under pay grade bracket VII-VIII. For the second month, he
should be paid an allowance equal to the step increase under pay grade bracket VIIVIII plus the step increase under pay grade bracket VIII-IX. For the third and fourth
months, Ignacio, Sr. should receive an allowance equal to the amount he received for
the second month plus the amount equal to the step increase under pay grade bracket
IX-X, thus: 26
First month
Second month
Third month
Fourth month
P361.00
P817.00
P1,392.00
P1,392.00
For PHILEC's failure to apply the schedule of step increases under Article X of the June
1, 1997 collective bargaining agreement, PWU argued that PHILEC committed an unfair
labor practice under Article 248 27 of the Labor Code.28
In its position paper, 29 PHILEC emphasized that it promoted Lipio and Ignacio, Sr.
while it was still negotiating a new collective bargaining agreement with PWU. Since
PHILEC and PWU had not yet negotiated a new collective bargaining agreement when
PHILEC selected Lipio and Ignacio, Sr. for training, PHILEC applied the "Modified SGV"
pay grade scale in computing Lipio's and Ignacio, Sr.'s training allowance. 30
This "Modified SGV" pay grade scale, which PHILEC and PWU allegedly agreed to
implement beginning on May 9, 1997, covered both rank-and-file and supervisory
employees. 31 According to PHILEC, its past collective bargaining agreements with the
rank-and-file and supervisory unions resulted in an overlap of union membership in
Pay Grade IX of the rank-and-file employees and Pay Grade A of the supervisory
employees. 32 Worse, past collective bargaining agreements resulted in rank-and-file
employees under Pay Grades IX and X enjoying higher step increases than supervisory
employees under Pay Grades A and B: 33 CHDaAE
Pay Grade
Scale under the
Rank-and-File
CBA
Step Increase
Step Increase
VIII-IX
P340.00
A
P290.00
IX-X
P455.00
A-B
P350.00
To preserve the hierarchical wage structure within PHILEC's enterprise, PHILEC and
PWU allegedly agreed to implement the uniform pay grade scale under the "Modified
SGV" pay grade system, thus: 34
Pay Grade
Step Increase
Rank-and-File Supervisory
I-II
P65.00
II-III
P78.00
III-IV
P95.00
IV-V
P120.00
V-VI
P150.00
VI-VII
P195.00
VII-VIII
P255.00
VIII-IX
A
P350.00
IX-X
A-B
P465.00
X-XI
B-C
P570.00
XI-XII
C-D
P710.00
D-E
P870.00
E-F
P1,055.00
Pay grade bracket I-IX covered rank-and-file employees, while pay grade bracket A-F
covered supervisory employees. 35
Under the "Modified SGV" pay grade scale, the position of Foreman I fell under Pay
Grade B. PHILEC then computed Lipio's and Ignacio, Sr.'s training allowance
accordingly. 36
PHILEC disputed PWU's claim of unfair labor practice. According to PHILEC, it did not
violate its collective bargaining agreement with PWU when it implemented the
"Modified SGV" scale. Even assuming that it violated the collective bargaining
agreement, PHILEC argued that its violation was not "gross" or a "flagrant and/or
malicious refusal to comply with the economic provisions of [the collective bargaining
agreement]." 37 PHILEC, therefore, was not guilty of unfair labor practice. 38
Voluntary Arbitrator Jimenez held in the decision 39 dated August 13, 1999, that
PHILEC violated its collective bargaining agreement with PWU. 40 According to
Voluntary Arbitrator Jimenez, the June 1, 1997 collective bargaining agreement
governed when PHILEC selected Lipio and Ignacio, Sr. for promotion on August 18 and
21, 1997. 41 The provisions of the collective bargaining agreement being the law
between the parties, PHILEC should have computed Lipio's and Ignacio, Sr.'s training
allowance based on Article X, Section 4 of the June 1, 1997 collective bargaining
agreement. 42
As to PHILEC's claim that applying Article X, Section 4 would result in salary distortion
within PHILEC's enterprise, Voluntary Arbitrator Jimenez ruled that this was "a concern
that PHILEC could have anticipated and could have taken corrective action" 43 before
signing the collective bargaining agreement.
Voluntary Arbitrator Jimenez dismissed PWU's claim of unfair labor practice. 44
According to him, PHILEC's acts "cannot be considered a gross violation of the
[collective bargaining agreement] nor . . . [a] flagrant and/or malicious refusal to
comply with the economic provisions of the [agreement]." 45
Thus, Voluntary Arbitrator Jimenez ordered PHILEC to pay Lipio and Ignacio, Sr. training
allowance based on Article X, Section 4 and Article IX, Section 1 of the June 1, 1997
collective bargaining agreement. 46
PHILEC received a copy of Voluntary Arbitrator Jimenez's decision on August 16, 1999.
47 On August 26, 1999, PHILEC filed a motion for partial reconsideration 48 of
Voluntary Arbitrator Jimenez's decision.
In the resolution 49 dated July 7, 2000, Voluntary Arbitrator Jimenez denied PHILEC's
motion for partial reconsideration for lack of merit. PHILEC received a copy of the July
7, 2000 resolution on August 11, 2000. 50
On August 29, 2000, PHILEC filed a petition 51 for certiorari before the Court of
Appeals, alleging that Voluntary Arbitrator Jimenez gravely abused his discretion in
rendering his decision. 52 PHILEC maintained that it did not violate the June 1, 1997
collective bargaining agreement. 53 It applied the "Modified SGV" pay grade rates to
avoid salary distortion within its enterprise. 54 acTDCI
In addition, PHILEC argued that Article X, Section 4 of the collective bargaining
agreement did not apply to Lipio and Ignacio, Sr. Considering that Lipio and Ignacio, Sr.
were promoted to a supervisory position, their training allowance should be computed
based on the provisions of PHILEC's collective bargaining agreement with ASSET, the
exclusive bargaining representative of PHILEC's supervisory employees. 55
The Court of Appeals affirmed Voluntary Arbitrator Jimenez's decision. 56 It agreed
that PHILEC was bound to apply Article X, Section 4 of its June 1, 1997 collective
bargaining agreement with PWU in computing Lipio's and Ignacio, Sr.'s training
allowance. 57 In its decision, the Court of Appeals denied due course and dismissed
PHILEC's petition for certiorari for lack of merit. 58
PHILEC filed a motion for reconsideration, which the Court of Appeals denied in the
resolution 59 dated June 23, 2005.
On August 3, 2005, PHILEC filed its petition for review on certiorari before this court,
60 insisting that it did not violate its collective bargaining agreement with PWU. 61
PHILEC maintains that Lipio and Ignacio, Sr. were promoted to a position covered by
the pay grade scale for supervisory employees. 62 Consequently, the provisions of
PHILEC's collective bargaining agreement with its supervisory employees should apply,
not its collective bargaining agreement with PWU. 63 To insist on applying the pay
grade scale in Article X, Section 4, PHILEC argues, would result in a salary distortion
within PHILEC. 64
In the resolution 65 dated September 21, 2005, this court ordered PWU to comment
on PHILEC's petition for review on certiorari.
In its comment, 66 PWU argues that Voluntary Arbitrator Jimenez did not gravely abuse
his discretion in rendering his decision. He correctly applied the provisions of the PWU
collective bargaining agreement, the law between PHILEC and its rank-and-file
employees, in computing Lipio's and Ignacio, Sr.'s training allowance. 67
On September 27, 2006, PHILEC filed its reply, 68 reiterating its arguments in its
petition for review on certiorari.
The issue for our resolution is whether Voluntary Arbitrator Jimenez gravely abused his
discretion in directing PHILEC to pay Lipio's and Ignacio, Sr.'s training allowance based
on Article X, Section 4 of the June 1, 1997 rank-and-file collective bargaining
agreement.
This petition should be denied.
I
The Voluntary Arbitrator's decision
dated August 13, 1999 is already final and
executory
We note that PHILEC filed before the Court of Appeals a petition for certiorari under
Rule 65 of the Rules of Court against Voluntary Arbitrator Jimenez's decision. 69
This was not the proper remedy.
Instead, the proper remedy to reverse or modify a Voluntary Arbitrator's or a panel of
Voluntary Arbitrators' decision or award is to appeal the award or decision before the
Court of Appeals. Rule 43, Sections 1 and 3 of the Rules of Court provide:
Section 1. Scope.
This Rule shall apply to appeals from judgments or final orders of the
Court of Tax Appeals and from awards, judgments, final orders or
The Commission, its Regional Offices and the Regional Directors of the
Department of Labor and Employment shall not entertain disputes,
grievances, or matters under the exclusive and original jurisdiction of the
Voluntary Arbitrator or panel of Voluntary Arbitrators and shall
immediately dispose and refer the same to the Grievance Machinery or
Voluntary Arbitration provided in the Collective Bargaining Agreement.
ART. 262. JURISDICTION OVER OTHER LABOR DISPUTES.
The Voluntary Arbitrator or panel of Voluntary Arbitrators, upon
agreement of the parties, shall also hear and decide all other labor
disputes including unfair labor practices and bargaining deadlocks.
In Luzon Development Bank v. Association of Luzon Development Bank Employees, 70
this court ruled that the proper remedy against the award or decision of the Voluntary
Arbitrator is an appeal before the Court of Appeals. This court first characterized the
office of a Voluntary Arbitrator or a panel of Voluntary Arbitrators as a quasi-judicial
agency, citing Volkschel Labor Union, et al. v. NLRC 71 and Oceanic Bic Division (FFW)
v. Romero: 72
In Volkschel Labor Union, et al. v. NLRC, et al., on the settled premise that
the judgments of courts and awards of quasi-judicial agencies must
become final at some definite time, this Court ruled that the awards of
voluntary arbitrators determine the rights of parties; hence, their
decisions have the same legal effect as judgments of a court. In Oceanic
Bic Division (FFW), et al. v. Romero, et al., this Court ruled that "a
voluntary arbitrator by the nature of her functions acts in a quasi-judicial
capacity." Under these rulings, it follows that the voluntary arbitrator,
whether acting solely or in a panel, enjoys in law the status of a quasijudicial agency but independent of; and apart from, the NLRC since his
decisions are not appealable to the latter. 73 (Citations omitted)
This court then stated that the office of a Voluntary Arbitrator or a panel of Voluntary
Arbitrators, even assuming that the office is not strictly a quasi-judicial agency, may be
considered an instrumentality, thus:
Assuming arguendo that the voluntary arbitrator or the panel of
voluntary arbitrators may not strictly be considered as a quasi-judicial
agency, board or commission, still both he and the panel are
comprehended within the concept of a "quasi-judicial instrumentality." It
may even be stated that it was to meet the very situation presented by
the quasi-judicial functions of the voluntary arbitrators here, as well as
the subsequent arbitrator/arbitral tribunal operating under the
Construction Industry Arbitration Commission, that the broader term
Alcantara, Jr.'s argument that the Rules of Court,specifically Rule 43, Section 2,
superseded the Luzon Development Bank ruling:
Petitioner argues, however, that Luzon Development Bank is no longer
good law because of Section 2, Rule 43 of the Rules of Court, a new
provision introduced by the 1997 revision. The provision reads:
SEC. 2. Cases not covered. This Rule shall not apply to judgments
or final orders issued under the Labor Code of the Philippines.
The provisions may be new to the Rules of Court but it is far from being a
new law. Section 2, Rule 42 of the 1997 Rules of Civil Procedure, as
presently worded, is nothing more but a reiteration of the exception to
the exclusive appellate jurisdiction of the Court of Appeals, as provided
for in Section 9, Batas Pambansa Blg. 129, 7 as amended by Republic Act
No. 7902: 8
(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 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 took into account this exception in Luzon Development Bank
but, nevertheless, held that the decisions of voluntary arbitrators issued
pursuant to the Labor Code do not come within its ambit: HcaATE
. . . . The fact that [the voluntary arbitrator's] functions and powers
are provided for in the Labor Code does not place him within the
exceptions to said Sec. 9 since he is a quasi-judicial instrumentality
as contemplated therein. It will be noted that, although the
Employees' Compensation Commission is also provided for in the
Labor Code, Circular No. 1-91, which is the forerunner of the
present Revised Administrative Circular No. 1-95, laid down the
procedure for the appealability of its decisions to the Court of
Appeals under the foregoing rationalization, and this was later
adopted by Republic Act No. 7902 in amending Sec. 9 of B.P. 129.
A fortiori, the decision or award of the voluntary arbitrator or panel
of arbitrators should likewise be appealable to the Court of
It is true that Rule 43, Section 4 of the Rules of Court provides for a 15-day
reglementary period for filing an appeal:
Section 4. Period of appeal. The appeal shall be taken within fifteen
(15) days from notice or the award, judgment, final order or resolution, or
from the date of its last publication, if publication is required by law for
its effectivity, or of the denial of petitioner's motion for new trial or
reconsideration duly filed in accordance with the governing law of the
court or agency a quo. Only one (1) motion for reconsideration shall be
allowed. Upon proper motion and the payment of the full amount of the
docket fee before the expiration of the reglementary period, the Court of
Appeals may grant an additional period of fifteen (15) days only within
which to file the petition for review. No further extension shall be granted
except for the most compelling reason and in no case to exceed fifteen
(15) days. (Emphasis supplied) cISDHE
The 15-day reglementary period has been upheld by this court in a long line of cases.
80 In AMA Computer College-Santiago City, Inc. v. Nacino, 81 Nippon Paint Employees
Union-OLALIA v. Court of Appeals, 82 Manila Midtown Hotel v. Borromeo, 83 and Sevilla
Trading Company v. Semana, 84 this court denied petitioners' petitions for review on
certiorari since petitioners failed to appeal the Voluntary Arbitrator's decision within
the 15-day reglementary period under Rule 43. In these cases, the Court of Appeals
had no jurisdiction to entertain the appeal assailing the Voluntary Arbitrator's decision.
Despite Rule 43 providing for a 15-day period to appeal, we rule that the Voluntary
Arbitrator's decision must be appealed before the Court of Appeals within 10 calendar
days from receipt of the decision as provided in the Labor Code.
Appeal is a "statutory privilege," 85 which may be exercised "only in the manner and
in accordance with the provisions of the law." 86 "Perfection of an appeal within the
reglementary period is not only mandatory but also jurisdictional so that failure to do
so rendered the decision final and executory, and deprives the appellate court of
jurisdiction to alter the final judgment much less to entertain the appeal." 87
We ruled that Article 262-A of the Labor Code allows the appeal of decisions rendered
by Voluntary Arbitrators. 88 Statute provides that the Voluntary Arbitrator's decision
"shall be final and executory after ten (10) calendar days from receipt of the copy of
the award or decision by the parties." Being provided in the statute, this 10-day period
must be complied with; otherwise, no appellate court will have jurisdiction over the
appeal. This absurd situation occurs when the decision is appealed on the 11th to 15th
day from receipt as allowed under the Rules, but which decision, under the law, has
already become final and executory.
Furthermore, under Article VIII, Section 5 (5) of the Constitution, this court "shall not
diminish, increase, or modify substantive rights" in promulgating rules of procedure in
courts. 89 The 10-day period to appeal under the Labor Code being a substantive right,
this period cannot be diminished, increased, or modified through the Rules of Court.
90
In Shioji v. Harvey, 91 this court held that the "rules of court,promulgated by authority
of law, have the force and effect of law, if not in conflict with positive law." 92 Rules of
Court are "subordinate to the statute." 93 In case of conflict between the law and the
Rules of Court,"the statute will prevail." 94
The rule, therefore, is that a Voluntary Arbitrator's award or decision shall be appealed
before the Court of Appeals within 10 days from receipt of the award or decision.
Should the aggrieved party choose to file a motion for reconsideration with the
Voluntary Arbitrator, 95 the motion must be filed within the same 10-day period since
a motion for reconsideration is filed "within the period for taking an appeal." 96
A petition for certiorari is a special civil action "adopted to correct errors of jurisdiction
committed by the lower court or quasi-judicial agency, or when there is grave abuse of
discretion on the part of such court or agency amounting to lack or excess of
jurisdiction." 97 An extraordinary remedy, 98 a petition for certiorari may be filed only
if appeal is not available. 99 If appeal is available, an appeal must be taken even if the
ground relied upon is grave abuse of discretion. 100
As an exception to the rule, this court has allowed petitions for certiorari to be filed in
lieu of an appeal "(a) when the public welfare and the advancement of public policy
dictate; (b) when the broader interests of justice so require; (c) when the writs issued
are null; and (d) when the questioned order amounts to an oppressive exercise of
judicial authority." 101
In Unicraft Industries International Corporation, et al. v. The Hon. Court of Appeals, 102
petitioners filed a petition for certiorari against the Voluntary Arbitrator's decision.
Finding that the Voluntary Arbitrator rendered an award without giving petitioners an
opportunity to present evidence, this court allowed petitioners' petition for certiorari
despite being the wrong remedy. The Voluntary Arbitrator's award, this court said, was
null and void for violation of petitioners' right to due process. This court decided the
case on the merits.
In Leyte IV Electric Cooperative, Inc. v. LEYECO IV Employees Union-ALU, 103 petitioner
likewise filed a petition for certiorari against the Voluntary Arbitrator's decision,
alleging that the decision lacked basis in fact and in law. Ruling that the petition for
certiorari was filed within the reglementary period for filing an appeal, this court
allowed petitioner's petition for certiorari in "the broader interests of justice." 104
AEaSTC
In Mora v. Avesco Marketing Corporation, 105 this court held that petitioner Noel E.
Mora erred in filing a petition for certiorari against the Voluntary Arbitrator's decision.
Nevertheless, this court decided the case on the merits "in the interest of substantial
justice to arrive at the proper conclusion that is conformable to the evidentiary facts."
106
None of the circumstances similar to Unicraft, Leyte IV Electric Cooperative, and Mora
are present in this case. PHILEC received Voluntary Arbitrator Jimenez's resolution
denying its motion for partial reconsideration on August 11, 2000. 107 PHILEC filed its
petition for certiorari before the Court of Appeals on August 29, 2000, 108 which was
18 days after its receipt of Voluntary Arbitrator Jimenez's resolution. The petition for
certiorari was filed beyond the 10-day reglementary period for filing an appeal. We
cannot consider PHILEC's petition for certiorari as an appeal.
There being no appeal seasonably filed in this case, Voluntary Arbitrator Jimenez's
decision became final and executory after 10 calendar days from PHILEC's receipt of
the resolution denying its motion for partial reconsideration. 109 Voluntary Arbitrator
Jimenez's decision is already "beyond the purview of this Court to act upon." 110
II
PHILEC must pay training allowance
based on the step increases provided in
the June 1, 1997 collective bargaining
agreement
The insurmountable procedural issue notwithstanding, the case will also fail on its
merits. Voluntary Arbitrator Jimenez correctly awarded both Lipio and Ignacio, Sr.
training allowances based on the amounts and formula provided in the June 1, 1997
collective bargaining agreement.
A collective bargaining agreement is "a contract executed upon the request of either
the employer or the exclusive bargaining representative of the employees
incorporating the agreement reached after negotiations with respect to wages, hours
of work and all other terms and conditions of employment, including proposals for
adjusting any grievances or questions arising under such agreement." 111 A collective
bargaining agreement being a contract, its provisions "constitute the law between the
parties" 112 and must be complied with in good faith. 113
PHILEC, as employer, and PWU, as the exclusive bargaining representative of PHILEC's
rank-and-file employees, entered into a collective bargaining agreement, which the
parties agreed to make effective from June 1, 1997 to May 31, 1999. Being the law
between the parties, the June 1, 1997 collective bargaining agreement must govern
PHILEC and its rank-and-file employees within the agreed period.
Lipio and Ignacio, Sr. were rank-and-file employees when PHILEC selected them for
training for the position of Foreman I beginning August 25, 1997. Lipio and Ignacio, Sr.
were selected for training during the effectivity of the June 1, 1997 rank-and-file
collective bargaining agreement. Therefore, Lipio's and Ignacio, Sr.'s training allowance
must be computed based on Article X, Section 4 and Article IX, Section 1 (f) of the June
1, 1997 collective bargaining agreement.
Contrary to PHILEC's claim, Lipio and Ignacio, Sr. were not transferred out of the
bargaining unit when they were selected for training. Lipio and Ignacio, Sr. remained
rank-and-file employees while they trained for the position of Foreman I. Under Article
IX, Section 1 (e) of the June 1, 1997 collective bargaining agreement, 114 a trainee who
is "unable to demonstrate his ability to perform the work . . . shall be reverted to his
previous assignment. . . ." 115 According to the same provision, the trainee "shall hold
that job on a trial or observation basis and . . . subject to prior approval of the
authorized management official, be appointed to the position in a regular capacity."
116
Thus, training is a condition precedent for promotion. Selection for training does not
mean automatic transfer out of the bargaining unit of rank-and-file employees. DCHaTc
Moreover, the June 1, 1997 collective bargaining agreement states that the training
allowance of a rank-and-file employee "whose application for a posted job is accepted
shall [be computed] in accordance with Section (f) of [Article IX]." 117 Since Lipio and
Ignacio, Sr. were rank-and-file employees when they applied for training for the
position of Foreman I, Lipio's and Ignacio, Sr.'s training allowance must be computed
based on Article IX, Section 1 (f) of the June 1, 1997 rank-and-file collective bargaining
agreement.
PHILEC allegedly applied the "Modified SGV" pay grade scale to prevent any salary
distortion within PHILEC's enterprise. This, however, does not justify PHILEC's noncompliance with the June 1, 1997 collective bargaining agreement. This pay grade scale
is not provided in the collective bargaining agreement. In Samahang Manggagawa sa
Top Form Manufacturing United Workers of the Philippines (SMTFM-UWP) v. NLRC, 118
this court ruled that "only provisions embodied in the [collective bargaining
agreement] should be so interpreted and complied with. Where a proposal raised by a
contracting party does not find print in the [collective bargaining agreement], it is not
part thereof and the proponent has no claim whatsoever to its implementation." 119
Had PHILEC wanted the "Modified SGV" pay grade scale applied within its enterprise,
"it could have requested or demanded that [the 'Modified SGV' scale] be incorporated
in the [collective bargaining agreement]." 120 PHILEC had "the means under the law
to compel [PWU] to incorporate this specific economic proposal in the [collective
bargaining agreement]." 121 It "could have invoked Article 252 of the Labor Code" 122
to incorporate the "Modified SGV" pay grade scale in its collective bargaining
agreement with PWU. But it did not. Since this "Modified SGV" pay grade scale does
not appear in PHILEC's collective bargaining agreement with PWU, PHILEC cannot insist
on the "Modified SGV" pay grade scale's application. We reiterate Voluntary Arbitrator
Jimenez's decision dated August 13, 1999 where he said that:
. . . since the signing of the current CBA took place on September 27,
1997, PHILEC, by oversight, may have overlooked the possibility of a wage
distortion occurring among ASSET-occupied positions. It is surmised that
this matter could have been negotiated and settled with PWU before the
actual signing of the CBA on September 27. Instead, PHILEC, again,
allowed the provisions of Art. X, Sec. 4 of the CBA to remain the way it is
and is now suffering the consequences of its laches. 123 (Emphasis in the
original)
We note that PHILEC did not dispute PWU's contention that it selected several rankand-file employees for training and paid them training allowance based on the
schedule provided in the collective bargaining agreement effective at the time of the
trainees' selection. 124 PHILEC cannot choose when and to whom to apply the
provisions of its collective bargaining agreement. The provisions of a collective
bargaining agreement must be applied uniformly and complied with in good faith.
Given the foregoing, Lipio's and Ignacio, Sr.'s training allowance should be computed
based on Article X, Section 4 in relation to Article IX, Section 1 (f) of the June 1, 1997
rank-and-file collective bargaining agreement. Lipio, who held the position of
Machinist before selection for training as Foreman I, should receive training allowance
based on the following schedule:
First month
Second month
Third month
Fourth month
P456.00
P1,031.00
P1,031.00
P1,031.00
Ignacio, Sr., who held the position of DT-Assembler before selection for training as
Foreman I, should receive training allowance based on the following schedule:
First month
Second month
Third month
Fourth month
P361.00
P817.00
P1,392.00
P1,392.00
When the judgment of the court awarding a sum of money becomes final
and executory, the rate of legal interest . . . shall be 12% per annum from
such finality until its satisfaction, this interim period being deemed to be
by then as equivalent to a forbearance of credit. 126
The 6% legal interest under Circular No. 799, Series of 2013, of the Bangko Sentral ng
Pilipinas Monetary Board shall not apply, Voluntary Arbitrator Jimenez's decision
having become final and executory prior to the effectivity of the circular on July 1,
2013. In Nacar v. Gallery Frames, 127 we held that: TCIDSa
. . . with regard to those judgments that have become final and executory
prior to July 1, 2013, said judgments shall not be disturbed and shall
continue to be implemented applying the rate of interest fixed therein.
128
WHEREFORE, the petition for review on certiorari is DENIED. The Court of Appeals'
decision dated May 25, 2004 is AFFIRMED.
Petitioner Philippine Electric Corporation is ORDERED to PAY respondent Eleodoro V.
Lipio a total of P3,549.00 for a four (4)-month training for the position of Foreman I
with legal interest of 12% per annum from August 22, 2000 until the amount's full
satisfaction.
For respondent Emerlito C. Ignacio, Sr., Philippine Electric Corporation is ORDERED to
PAY a total of P3,962.00 for a four (4)-month training for the position of Foreman I with
legal interest of 12% per annum from August 22, 2000 until the amount's full
satisfaction.
SO ORDERED.
Carpio, Del Castillo, Villarama, Jr. * and Mendoza, JJ., concur.
||| (Phil. Electric Corp. v. Court of Appeals, G.R. No. 168612, [December 10, 2014])
Article 1144 of the Civil Code may, likewise be applied, as it provides that an
action upon a written contract must be brought within ten years from the time the
right of action accrues.
It is clear from the above law and rules that a judgment may be executed on
motion within five years from the date of its entry or from the date it becomes final
and executory. After the lapse of such time, and before it is barred by the statute of
limitations, a judgment may be enforced by action. If the prevailing party fails to
have the decision enforced by a mere motion after the lapse of five years from the
date of its entry (or from the date it becomes final and executory), the said
judgment is reduced to a mere right of action in favor of the person whom it favors
and must be enforced, as are all ordinary actions, by the institution of a complaint
in a regular form. 13
In the present case, the five-and ten-year periods provided by law and the
rules are more than sufficient to enable petitioners to enforce their right under the
subject MOA. In this case, it is clear that the judgment of the NLRC, having been
based on a compromise embodied in a written contract, was immediately executory
upon its issuance on October 12, 1998. Thus, it could have been executed by motion
within five (5) years. It was not. Nonetheless, it could have been enforced by an
independent action within the next five (5) years, or within ten (10) years from the
time the NLRC Decision was promulgated. It was not. Therefore, petitioners' right
to have the NLRC judgment executed by mere motion as well as their right of action
to enforce the same judgment had prescribed by the time they filed their Motion
for Writ of Execution on January 25, 2010.
It is true that there are instances in which this Court allowed execution by
motion even after the lapse of five years upon meritorious grounds. However, in
instances when this Court allowed execution by motion even after the lapse of five
years, there is, invariably, only one recognized exception, i.e., when the delay is
caused or occasioned by actions of the judgment debtor and/or is incurred for his
benefit or advantage. 14 In the present case, there is no indication that the delay in
the execution of the MOA, as claimed by petitioners, was caused by respondent nor
was it incurred at its instance or for its benefit or advantage.
It is settled that the purpose of the law (or rule) in prescribing time limitations
for enforcing judgments or actions is to prevent obligors from sleeping on their
rights. 15 In this regard, petitioners insist that they are vigilant in exercising their
right to pursue payment of the monetary awards in their favor. However, a careful
review of the records at hand would show that petitioners failed to prove their
allegation. The only evidence presented to show that petitioners ever demanded
payment was a letter dated May 22, 2008, signed by one Atty. Calderon,
representing herein individual petitioners, addressed to respondent company and
seeking proof that the company has indeed complied with the provisions of the
subject MOA. 16 Considering that the NLRC Decision approving the MOA was issued
as early as October 12, 1998, the letter from petitioners' counsel, which was dated
almost ten years after the issuance of the NLRC Decision, can hardly be considered
as evidence of vigilance on the part of petitioners. No proof was ever presented
showing that petitioners did not sleep on their rights. Despite their claims to the
contrary, the records at hand are bereft of any evidence to establish that petitioners
exerted any effort to enforce their rights under the subject MOA, either individually,
through their union or their counsel. It is a basic rule in evidence that each party
must prove his affirmative allegation, that mere allegation is not evidence. 17
Indeed, as allegation is not evidence, the rule has always been to the effect that a
party alleging a critical fact must support his allegation with substantial evidence
which has been construed to mean such relevant evidence as a reasonable mind
will accept as adequate to support a conclusion. 18 Unfortunately, petitioners failed
in this respect.
Even granting, for the sake of argument, that the records of the case were
lost, as alleged by petitioners, leading to the delay in the enforcement of petitioners'
rights, such loss of the records cannot be regarded as having interrupted the
prescriptive periods for filing a motion or an action to enforce the NLRC Decision
because such alleged loss could not have prevented petitioners from attempting to
reconstitute the records and, thereafter, filing the required motion or action on
time. 19
As a final note, it bears to reiterate that while the scales of justice usually tilt
in favor of labor, the present circumstances prevent this Court from applying the
same in the instant petition. Even if our laws endeavor to give life to the
constitutional policy on social justice and on the protection of labor, it does not
mean that every labor dispute will be decided in favor of the workers. 20 The law
also recognizes that management has rights which are also entitled to respect and
enforcement in the interest of fair play. 21 Stated otherwise, while the Court fully
recognizes the special protection which the Constitution, labor laws, and social
legislation accord the workingman, the Court cannot, however, alter or amend the
law on prescription to relieve petitioners of the consequences of their inaction.
Vigilantibus, non dormientibus, jura subveniunt Laws come to the assistance of
the vigilant, not of the sleeping. 22
WHEREFORE, the instant petition is DENIED. The Resolutions of the Court of
Appeals, dated June 30, 2011 and September 28, 2011, respectively, in CA-G.R. SP
No. 118459, are AFFIRMED.
SO ORDERED.
Velasco, Jr., Villamar, Jr., Perez * and Jardeleza, JJ., concur.
||| (Ilaw Buklod ng Manggagawa (IBM) Nestle Phils., Inc. Chapter v. Nestle Phils.,
Inc., G.R. No. 198675, [September 23, 2015])
PRESCRIBED!
35. Art 223, Appeal from the Labor Arbiter;s monetary award/allowable reduction of
appeal bond
BALITE, ET AL V SS VENTURES INTERNATIONAL
FIRST DIVISION
[G.R. No. 195109. February 4, 2015.]
ANDY D. BALITE, DELFIN M. ANZALDO AND MONALIZA DL. BIHASA,
petitioners, vs. SS VENTURES INTERNATIONAL, INC., SUNG SIK LEE AND
EVELYN RAYALA, respondents.
the Court holds that the appeal bond posted by the respondent in the amount of P100,000.00
which is equivalent to around 20% of the total amount of monetary bond is sufficient to perfect an
appeal. With the employer's demonstrated good faith in filing the motion to reduce the bond on
DECISION
demonstrable grounds coupled with the posting of the appeal bond in the requested amount, as
well as the filing of the memorandum of appeal, the right of the employer to appeal must be upheld.
PEREZ, J p:
This is a Petition for Review on Certiorari pursuant to Rule 45 of the Revised Rules of
Court, assailing the 18 June 2010 Decision 1 rendered by the Tenth Division of the Court
of Appeals in CA-G.R. SP No. 109589. In its assailed decision, the appellate court
reversed the Resolution of the National Labor Relations Commission (NLRC) which
denied the Motion to Reduce Appeal Bond filed by respondents SS Ventures
International, Inc., Sung Sik Lee and Evelyn Rayala.
In a Resolution 2 dated 30 December 2010, the appellate court refused to reconsider
its earlier decision.
The Facts
Respondent SS Ventures International, Inc. is a domestic corporation duly engaged in
the business of manufacturing footwear products for local sales and export abroad. It
is represented in this action by respondents Sung Sik Lee and Evelyn Rayala. Petitioners
Andy Balite (Balite), Monaliza Bihasa (Bihasa) and Delfin Anzaldo (Anzaldo) were
regular employees of the respondent company until their employments were severed
for violation of various company policies.
For his part, Balite was issued a Show Cause Memorandum by the respondent company
on 4 August 2005 charging him with the following infractions: (1) making false reports,
malicious and fraudulent statements and rumor-mongering against the company; (2)
threatening and intimidating co-workers; (3) refusing to cooperate in the conduct of
investigation; and (4) gross negligence in the care and use of the company property
resulting in the damage of the finished products. After respondent found Balite's
explanation insufficient, he was dismissed from employment, through a Notice of
Termination on 6 September 2005.
Bihasa, on the other hand, was charged with absence without leave on two occasions
and with improper behavior, stubbornness, arrogance and uncooperative attitude
towards superiors and employees. Bihasa was likewise terminated from the service on
5 May 2006 after her explanation in an administrative investigation was found
unsatisfactory by the respondent company.
Anzaldo was also dismissed from employment after purportedly giving him due
process. The records of the infractions he committed as well as the date of his
termination, however, are not borne by the records.
Consequently, the three employees charged respondents with illegal dismissal and
recovery of backwages, 13th month pay and attorney's fees before the Labor Arbiter.
In refuting the allegations of the petitioners, respondents averred that petitioners
were separated from employment for just causes and after affording them procedural
due process of law.
On 30 December 2007, the Labor Arbiter rendered a Decision 3 in favor of petitioners
and held that respondents are liable for illegal dismissal for failing to comply with the
procedural and substantive requirements in terminating employment. The decretal
portion of the Labor Arbiter Decision reads:
WHEREFORE, premises considered, [petitioners] are hereby found to
have been illegally dismissed even as respondents are held liable
therefore.
Consequently, respondent corporation is hereby ordered to reinstate
[petitioners] to their former positions without loss of seniority rights and
other privileges with backwages initially computed at this time and
reflected below.
The reinstatement aspect of this decision is immediately executory and
thus respondents are hereby required to submit a report of compliance
therewith within ten (10) days from receipt thereof.
Respondent corporation is likewise ordered to pay [petitioners] their
13th month pay and 10% attorney's fees.
Backwages
1.
2.
3.
Andy Balite
P162,969.04
Delfin Anzaldo
158,299.44
Monaliza Bihasa 116,506.62
P18,048.00
17,511.00
13,401.75
All other claims are dismissed for lack of factual or legal basis. 4 CIAcSa
Aggrieved, respondents interposed an appeal by filing a Notice of Appeal and paying
the corresponding appeal fee. However, instead of filing the required appeal bond
equivalent to the total amount of the monetary award which is P490,308.00,
respondents filed a Motion to Reduce the Appeal Bond to P100,000.00 and appended
therein a manager's check bearing the said amount. Respondents cited financial
difficulty as justification for their inability to post the appeal bond in full owing to the
partial shutdown of respondent company's operations.
In a Resolution 5 dated 27 November 2008, the NLRC dismissed the appeal filed by the
respondents for non-perfection. The NLRC ruled that posting of an appeal bond
equivalent to the monetary award is indispensable for the perfection of the appeal and
the reduction of the appeal bond, absent any showing of meritorious ground to justify
the same, is not warranted in the instant case.
Similarly ill-fated was respondents' Motion for Reconsideration which was denied by
the NLRC in a Resolution 6 dated 30 April 2009.
On certiorari, the Court of Appeals reversed the NLRC Decision and allowed the
relaxation of the rule on posting of the appeal bond. According to the appellate court,
there was substantial compliance with the rules for the perfection of an appeal
because respondents seasonably filed their Memorandum of Appeal and posted an
appeal bond in the amount of P100,000.00. While the amount of the appeal bond
posted was not equivalent to the monetary award, the Court of Appeals ruled that
respondents were able to sufficiently prove their incapability to post the required
amount of bond. 7 The Court of Appeals disposed in this wise:
WHEREFORE, premises considered, finding grave abuse of discretion on
the part of the [NLRC], the instant petition is GRANTED. The [NLRC's]
Resolutions dated November 27, 2008 and April 30, 2009, respectively,
are hereby SET ASIDE. [The NLRC] is hereby directed to decide
petitioners' appeal on the merits. 8 CA reverser NLRC. allowed relaxation of rules in posting bond
In a Resolution 9 dated 30 December 2010, the Court of Appeals refused to reconsider
its earlier decision.
Petitioners are now before this Court via this instant Petition for Review on Certiorari
10 praying that the Court of Appeals Decision and Resolution be reversed and set aside
on the ground that:
WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS COMMITTED
A GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR IN EXCESS OF
JURISDICTION WHEN IT REVERSED THE RESOLUTION OF THE NLRC
DISMISSING RESPONDENTS' APPEAL FOR NON-PERFECTION THEREOF. 11
The Court's Ruling
Petitioners, in assailing the appellate court's decision, argue that posting of an appeal
bond in full is not only mandatory but a jurisdictional requirement that must be
complied with in order to confer jurisdiction upon the NLRC. They posit that the posting
Implementing the aforestated provisions of the Labor Code are the provisions of Rule
VI of the 2011 Rules of Procedure of the NLRC on perfection of appeals which read:
Section 1. Periods of Appeal. Decisions, awards 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.
. . . If the 10th day or the 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.
xxx xxx xxx
Section 4. Requisites for Perfection of Appeal. (a) The appeal shall be:
(1) filed within the reglementary period as provided in Section 1 of
this Rule;
(2) verified by the appellant himself/herself in accordance with
Section 4, Rule 7 of the Rules of Court, as amended;
(3) in the form a of a memorandum of appeal which shall state the
grounds relied upon and the arguments in support thereof;
the relief prayed for; and with a statement of the date when
the appellant received the appealed decision, award or order;
(4) in three (3) legibly typewritten or printed copies; and
(5) accompanied by:
i) proof of payment of the required appeal fee and legal
research fee;
ii) posting of cash or surety bond as provided in Section 6 of
this Rule; and
iii) proof of service upon the other parties.
xxx xxx xxx
(b) A mere notice of appeal without complying with the other requisites
aforestated shall not stop the running of the period for perfecting an
appeal.
xxx xxx xxx
Section 5. Appeal Fee. The appellant shall pay the prevailing appeal fee
and legal research fee to the Regional Arbitration Branch or Regional
Office of origin, and the official receipt of such payment shall form part
of the records of the case.
determined what is the reasonable amount of appeal bond. We underscored the fact
that the amount of 10% of the award is not a permissible bond but is only such amount
that shall be deemed reasonable in the meantime that the appellant's motion is
pending resolution by the Commission. The actual reasonable amount yet to be
determined is necessarily a bigger amount. In an effort to strike a balance between the
constitutional obligation of the state to afford protection to labor on the one hand, and
the opportunity afforded to the employer to appeal on the other, We considered the
appeal bond in the amount of P725M which is equivalent to 25% of the monetary
award sufficient to perfect the appeal, viz.:
We sustain the Court of Appeals in so far as it increases the amount of
the required appeal bond. But we deem it reasonable to reduce the
amount of the appeal bond to P725 Million. This directive already
considers that the award if not illegal, is extraordinarily huge and that no
insurance company would be willing to issue a bond for such big money.
The amount of P725 Million is approximately 25% of the basis above
calculated. It is a balancing of the constitutional obligation of the state to
afford protection to labor which, specific to this case, is assurance that in
case of affirmance of the award, recovery is not negated; and on the
other end of the spectrum, the opportunity of the employer to appeal.
By reducing the amount of the appeal bond in this case, the employees
would still be assured of at least substantial compensation, in case a
judgment award is affirmed. On the other hand, management will not be
effectively denied of its statutory privilege of appeal.
In line with Sara Lee and the objective that the appeal on the merits to be threshed out
soonest by the NLRC, the Court holds that the appeal bond posted by the respondent
in the amount of P100,000.00 which is equivalent to around 20% of the total amount
of monetary bond is sufficient to perfect an appeal. With the employer's demonstrated
good faith in filing the motion to reduce the bond on demonstrable grounds coupled
with the posting of the appeal bond in the requested amount, as well as the filing of
the memorandum of appeal, the right of the employer to appeal must be upheld. This
is in recognition of the importance of the remedy of appeal, which is an essential part
of our judicial system and the need to ensure that every party litigant is given the
amplest opportunity for the proper and just disposition of his cause freed from the
constraints of technicalities. 17
WHEREFORE, premises considered, the petition is DENIED. The assailed Decision and
Resolution of the Court of Appeals are hereby AFFIRMED.
SO ORDERED.
Sereno, C.J., Leonardo-de Castro, Bersamin and Perlas-Bernabe, JJ., concur.
||| (Balite v. SS Ventures International, Inc., G.R. No. 195109, [February 4, 2015])
payroll reinstatement, however, did not materialize. Thus, on September 22, 2005, the
petitioners filed before the LA a manifestation for their immediate reinstatement.
On October 3, 2005, the respondents filed an opposition to the petitioners' motion for
execution. 7 They claimed that the relationship between them and the petitioners had
already been strained because of the petitioners' threatening text messages, thus
precluding the latter's reinstatement. IAEcCT
On October 7, 2005, the LA granted the petitioners' motion and issued a writ of
execution. 8
The respondents moved to quash the writ of execution with a prayer to hold in
abeyance the implementation of the reinstatement order. 9 They maintained that the
relationship between them and the petitioners had been so strained that
reinstatement was no longer possible.
The October 7, 2005 writ of execution was returned unsatisfied. In response, the
petitioners filed a motion for re-computation of accrued wages, and, on January 25,
2006, a motion for execution of the re-computed amount. On February 16, 2006, the
LA granted this motion and issued an alias writ of execution. 10
On February 21, 2006, the respondents issued a Memorandum 11 directing the
petitioners to report for work on February 24, 2006. The petitioners failed to report
for work on the appointed date. On February 28, 2006, the respondents moved before
the LA to suspend the order for the petitioners' reinstatement. 12
Meanwhile, the respondents appealed with the NLRC the May 31, 2005 illegal dismissal
ruling of the LA.
In an order dated August 15, 2006, 13 the NLRC dismissed the respondents' appeal for
non-perfection. The NLRC likewise denied the respondents' motion for reconsideration
in its November 29, 2006 resolution, prompting the respondents to file before the CA
a petition for certiorari.
The NLRC issued an Entry of Judgment on February 6, 2007 declaring its November 29,
2006 resolution final and executory. The petitioners forthwith filed with the LA another
motion for the issuance of a writ of execution, which the LA granted on April 24, 2007.
The LA also issued another writ of execution. 14 A Notice of Garnishment was
thereafter issued to the respondents' depositary bank Metrobank-San Lorenzo
Village Branch, Makati City in the amount of P1,900,000.00 on June 6, 2007.
On December 18, 2007, the CA rendered its decision (on the illegal dismissal ruling of
the LA) partly granting the respondents' petition. The CA declared the petitioners'
dismissal valid and awarded them P30,000.00 as nominal damages for the
respondents' failure to observe due process.
The records show that the petitioners appealed the December 18, 2007 CA decision
with this Court. In a resolution dated August 4, 2008, the Court denied the petition.
The Court likewise denied the petitioners' subsequent motion for reconsideration, and
thereafter issued an Entry of Judgment certifying that its August 4, 2008 resolution had
become final and executory on March 9, 2009.
On January 31, 2008, the petitioners filed with the LA an Urgent Ex-Parte Motion for
the Immediate Release of the Garnished Amount.
In its March 13, 2008 order, 15 the LA granted the petitioners' motion; it directed
Metrobank-San Lorenzo to release the P1,900,000.00 garnished amount. The LA found
valid and meritorious the respondents' claim for accrued wages in view of the
respondents' refusal to reinstate the petitioners despite the final and executory nature
of the reinstatement aspect of its (LA's) May 31, 2005 decision. The LA noted that as of
the December 18, 2007 CA decision (that reversed the illegal dismissal findings of the
LA), the petitioners' accrued wages amounted to P3,078,366.33.
In its July 16, 2008 resolution, 16 the NLRC affirmed in toto the LA's March 13, 2008
order. The NLRC afterwards denied the respondents' motion for reconsideration for
lack of merit. 17
The respondents assailed the July 16, 2008 decision and September 29, 2009 resolution
of the NLRC via a petition for certiorari filed with the CA. DIETcH
The CA's ruling
The CA granted the respondents' petition. 18 It reversed and set aside the July 16, 2008
decision and the September 29, 2009 resolution of the NLRC and remanded the case
to the Computation and Examination Unit of the NLRC for the proper computation of
the petitioners' accrued wages, computed up to February 24, 2006.
The CA agreed that the reinstatement aspect of the LA's decision is immediately
executory even pending appeal, such that the employer is obliged to reinstate and pay
the wages of the dismissed employee during the period of appeal until the decision
(finding the employee illegally dismissed including the reinstatement order) is reversed
by a higher court. Applying this principle, the CA noted that the petitioners' accrued
wages could have been properly computed until December 18, 2007, the date of the
CA's decision finding the petitioners validly dismissed.
The CA, however, pointed out that when the LA's decision is "reversed by a higher
tribunal, an employee may be barred from collecting the accrued wages if shown that
the delay in enforcing the reinstatement pending appeal was without fault" on the
employer's part. In this case, the CA declared that the delay in the execution of the
reinstatement order was not due to the respondents' unjustified act or omission.
Rather, the petitioners' refusal to comply with the February 21, 2006 return-to-work
Memorandum that the respondents issued and personally delivered to them (the
petitioners) prevented the enforcement of the reinstatement order.
Thus, the CA declared that, given this peculiar circumstance (of the petitioners' failure
to report for work), the petitioners' accrued wages should only be computed until
February 24, 2006 when they were supposed to report for work per the return-to-work
Memorandum. Accordingly, the CA reversed, for grave abuse of discretion, the NLRC's
July 16, 2008 decision that affirmed the LA's order to release the garnished amount.
The Petition
The petitioners argue that the CA gravely erred when it ruled, contrary to Article 223,
paragraph 3 of the Labor Code,that the computation of their accrued wages stopped
when they failed to report for work on February 24, 2006. They maintain that the
February 21, 2006 Memorandum was merely an afterthought on the respondents' part
to make it appear that they complied with the LA's October 7, 2005 writ of execution.
They likewise argue that had the respondents really intended to have them report for
work to comply with the writ of execution, the respondents could and should have
issued the Memorandum immediately after the LA issued the first writ of execution.
As matters stand, the respondents issued the Memorandum more than four months
after the issuance of this writ and only after the LA issued the alias writ of execution
on February 16, 2006.
Additionally, the petitioners direct the Court's attention to the several pleadings that
the respondents filed to prevent the execution of the reinstatement aspect of the LA's
May 31, 2005 decision, i.e., the Opposition to the Issuance of the Writ of Execution,
the Motion to Quash the Writ of Execution and the Motion to Suspend the Order of
Reinstatement. They also point out that in all these pleadings, the respondents claimed
that strained relationship barred their (the petitioners') reinstatement, evidently
confirming the respondents' lack of intention to reinstate them.
Finally, the petitioners point out that the February 21, 2006 Memorandum directed
them to report for work at Clark Field, Angeles, Pampanga instead of at the NAIADomestic Airport in Pasay City where they had been assigned. They argue that this
directive to report for work at Clark Field violates Article 223, paragraph 3 of the Labor
Code that requires the employee's reinstatement to be under the same terms and
conditions prevailing prior to the dismissal. Moreover, they point out that the
respondents handed the Memorandum only to Pelaez, who did not act in
representation of the other petitioners, and only in the afternoon of February 23, 2006.
Thus, the petitioners claim that the delay in their reinstatement was in fact due to the
respondents' unjustified acts and that the respondents never really complied with the
LA's reinstatement order. CIHTac
The Case for the Respondents
The respondents counter, in their comment, 19 that the issues that the petitioners
raise in this petition are all factual in nature and had already considered and explained
in the CA decision. In any case, the respondents maintain that the petitioners were
validly dismissed and that they complied with the LA's reinstatement order when it
directed the petitioners to report back to work, which directive the petitioners did not
heed.
The respondents add that while the reinstatement of an employee found illegally
dismissed is immediately executory, the employer is nevertheless not prohibited from
questioning this rule especially when the latter has valid and legal reasons to oppose
the employee's reinstatement. In the petitioners' case, the respondents point out that
their relationship had been so strained that reinstatement was no longer possible.
Despite this strained relationship, the respondents point out that they still required the
petitioners to report back to work if only to comply with the LA's reinstatement order.
Instead of reporting for work as directed, the petitioners, however, insisted for a
payroll reinstatement, which option the law grants to them (the respondents) as
employer. Also, contrary to the petitioners' claim, the Memorandum directed them to
report at Clark Field, Pampanga only for a re-orientation of their respective duties and
responsibilities.
Thus, relying on the CA's ruling, the respondents claim that the delay in the petitioners'
reinstatement was in fact due to the latter's refusal to report for work after the
issuance of the February 21, 2006 Memorandum in addition to their strained
relationship.
The Court's Ruling
We GRANT the petition.
Preliminary considerations: jurisdictional
limitations of the Court's Rule 45 review of
the CA's Rule 65 decision in labor cases
In a Rule 45 petition for review on certiorari, what we review are the legal errors that
the CA may have committed in the assailed decision, in contrast with the review for
jurisdictional errors that we undertake in an original certiorari action. In reviewing the
legal correctness of the CA decision in a labor case taken under Rule 65 of the Rules of
Court, we examine the CA decision in the context that it determined the presence or
the absence of grave abuse of discretion in the NLRC decision before it and not on the
basis of whether the NLRC decision, on the merits of the case, was correct. Otherwise
stated, we proceed from the premise that the CA undertook a Rule 65 review, not a
review on appeal, of the NLRC decision challenged before it. Within this narrow scope
of our Rule 45 review, the question that we ask is: Did the CA correctly determine
whether the NLRC committed grave abuse of discretion in ruling on the case? 20
of
decision
the
reinstatement
aspect
on
a
finding
of
of
the
illegal
Article 223 (now Article 229) 21 of the Labor Code governs appeals from, and the
execution of, the LA's decision. Pertinently, paragraph 3, Article 223 of the Labor Code
provides:
Article 223. APPEAL.
xxx xxx xxx
In any event, the decision of the Labor Arbiter reinstating a dismissed or
separated employee, insofar as the reinstatement aspect is concerned,
shall immediately be executory, pending appeal. The employee shall
either be admitted back to work under the same terms and conditions
prevailing prior to his dismissal or separation or, at the option of the
employer, merely reinstated in the payroll. The posting of a bond by the
employer shall not stay the execution for reinstatement provided herein.
[Emphasis and underscoring supplied]
Under paragraph 3, Article 223 of the Labor Code,the LA's order for the reinstatement
of an employee found illegally dismissed is immediately executory even during
pendency of the employer's appeal from the decision. Under this provision, the
employer must reinstate the employee either by physically admitting him under the
conditions prevailing prior to his dismissal, and paying his wages; or, at the employer's
option, merely reinstating the employee in the payroll until the decision is reversed by
the higher court. 22 Failure of the employer to comply with the reinstatement order,
by exercising the options in the alternative, renders him liable to pay the employee's
salaries. 23
Otherwise stated, a dismissed employee whose case was favorably decided by the LA
is entitled to receive wages pending appeal upon reinstatement, which
reinstatement is immediately executory. 24 Unless the appellate tribunal issues a
restraining order, the LA is duty bound to implement the order of reinstatement and
the employer has no option but to comply with it. 25
Moreover, and equally worth emphasizing, is that an order of reinstatement issued by
the LA is self-executory, i.e., the dismissed employee need not even apply for and the
LA need not even issue a writ of execution to trigger the employer's duty to reinstate
the dismissed employee. In Pioneer Texturizing Corp. v. NLRC, et al., 26 decided in 1997,
the Court clarified once and for all this self-executory nature of a reinstatement order.
After tracing back the various Court rulings interpreting the amendments introduced
by Republic Act No. 6715 27 on the reinstatement aspect of a labor decision under
Article 223 of the Labor Code,the Court concluded that to otherwise "require the
application for and issuance of a writ of execution as prerequisites for the execution of
a reinstatement award would certainly betray and run counter to the very object and
intent of Article 223, i.e., the immediate execution of a reinstatement order." 28
In short, therefore, with respect to decisions reinstating employees, the law itself has
determined a sufficiently overwhelming reason for its immediate and automatic
execution even pending appeal. 29 The employer is duty-bound to reinstate the
employee, failing which, the employer is liable instead to pay the dismissed employee's
salary. The Court's consistent and prevailing treatment and interpretation of the
reinstatement order as immediately enforceable, in fact, merely underscores the right
to security of tenure of employees that the Constitution 30 protects.
The employer is obliged to pay the
dismissed employee's salary if he
refuses to reinstate until actual
reinstatement or reversal by a higher
tribunal; circumstances that may bar an
employee from receiving the accrued wages
As we amply discussed above, an employer is obliged to immediately reinstate the
employee upon the LA's finding of illegal dismissal; if the employer fails, it is liable to
pay the salary of the dismissed employee. Of course, it is not always the case that the
LA's finding of illegal dismissal is, on appeal by the employer, upheld by the appellate
court. After the LA's decision is reversed by a higher tribunal, the employer's duty to
reinstate the dismissed employee is effectively terminated. This means that an
employer is no longer obliged to keep the employee in the actual service or in the
payroll. The employee, in turn, is not required to return the wages that he had received
prior to the reversal of the LA's decision. 31
The reversal by a higher tribunal of the LA's finding (of illegal dismissal),
notwithstanding, an employer, who, despite the LA's order of reinstatement, did not
reinstate the employee during the pendency of the appeal up to the reversal by a
higher tribunal may still be held liable for the accrued wages of the employee, i.e., the
unpaid salary accruing up to the time the higher tribunal reverses the decision. 32 The
rule, therefore, is that an employee may still recover the accrued wages up to and
despite the reversal by the higher tribunal. This entitlement of the employee to the
accrued wages proceeds from the immediate and self-executory nature of the
reinstatement aspect of the LA's decision. TEHIaA
By way of exception to the above rule, an employee may be barred from collecting the
accrued wages if shown that the delay in enforcing the reinstatement pending appeal
was without fault on the part of the employer. To determine whether an employee is
thus barred, two tests must be satisfied: (1) actual delay or the fact that the order of
reinstatement pending appeal was not executed prior to its reversal; and (2) the delay
must not be due to the employer's unjustified act or omission. Note that under the
second test, the delay must be without the employer's fault. If the delay is due to the
employer's unjustified refusal, the employer may still be required to pay the salaries
notwithstanding the reversal of the LA's decision. 33
Application of the two-fold test; the
petitioners are entitled to receive their
accrued salaries until December 18, 2007
As we earlier pointed out, the core issue to be resolved is whether the petitioners may
recover the accrued wages until the CA's reversal of the LA's decision. An affirmative
answer to this question will lead us to reverse the assailed CA decision for legal errors
and reinstate the NLRC's decision affirming the release of the garnished amount.
Otherwise, we uphold the CA's decision to be legally correct. To resolve this question,
we apply the two-fold test.
First, the existence of delay whether there was actual delay or whether the order of
reinstatement pending appeal was not executed prior to its reversal? We answer this
test in the affirmative.
To recall, on May 31, 2005, the LA rendered the decision finding the petitioners illegally
dismissed and ordering their immediate reinstatement. Per the records, the
respondents received copy of this decision on July 8, 2005. On August 20, 2005, the
petitioners filed before the LA a Motion for Issuance of Writ of Execution for their
immediate reinstatement. The LA issued the Writ of Execution on October 7, 2005.
From the time the respondents received copy of the LA's decision, and the issuance of
the writ of execution, until the CA reversed this decision on December 17, 2008, the
respondents had not reinstated the petitioners, either by actual reinstatement or in
the payroll. This continued non-execution of the reinstatement order in fact moved the
LA to issue an alias writ of execution on February 16, 2006 and another writ of
execution on April 24, 2007.
From these facts and without doubt, there was actual delay in the execution of the
reinstatement aspect of the LA's May 31, 2005 decision before it was reversed in the
CA's decision.
Second, the cause of the delay whether the delay was not due to the employer's
unjustified act or omission. We answer this test in the negative; we find that the delay
in the execution of the reinstatement pending appeal was due to the respondents'
unjustified acts.
In reversing, for grave abuse of discretion, the NLRC's order affirming the release of
the garnished amount, the CA relied on the fact of the issuance of the February 21,
2006 Memorandum and of the petitioners' failure to comply with its return-to-work
directive. In other words, with the issuance of this Memorandum, the CA considered
the respondents as having sufficiently complied with their obligation to reinstate the
petitioners. And, the subsequent delay in or the non-execution of the reinstatement
order was no longer the respondents' fault, but rather of the petitioners who refused
to report back to work despite the directive.
Our careful consideration of the facts and the circumstances that surrounded the case
convinced us that the delay in the reinstatement pending appeal was due to the
respondents' fault. For one, the respondents filed several pleadings to suspend the
execution of the LA's reinstatement order, i.e., the opposition to the petitioners'
motion for execution filed on October 3, 2005; the motion to quash the October 7,
2005 writ of execution with prayer to hold in abeyance the implementation of the
reinstatement order; and the motion to suspend the order for the petitioners'
reinstatement filed on February 28, 2006 after the LA issued the February 16, 2006
alias writ of execution. These pleadings, to our mind, show a determined effort on the
respondents' part to prevent or suspend the execution of the reinstatement pending
appeal. EaCSTc
Another reason is that the respondents, contrary to the CA's conclusion, did not
sufficiently notify the petitioners of their intent to actually reinstate them; neither did
the respondents give them ample opportunity to comply with the return-to-work
directive. We note that the respondents delivered the February 21, 2006
Memorandum (requiring the petitioners to report for work on February 24, 2006) only
in the afternoon of February 23, 2006. Worse, the respondents handed the notice to
only one of the petitioners Pelaez who did not act in representation of the others.
Evidently, the petitioners could not reasonably be expected to comply with a directive
that they had no or insufficient notice of.
Lastly, the petitioners continuously and actively pursued the execution of the
reinstatement aspect of the LA's decision, i.e., by filing several motions for execution
of the reinstatement order, and motion to cite the respondents in contempt and recomputation of the accrued wages for the respondents' continued failure to reinstate
them.
These facts altogether show that the respondents were not at all sincere in reinstating
the petitioners. These facts when taken together with the fact of delay reveal the
respondents' obstinate resolve and willful disregard of the immediate and selfexecutory nature of the reinstatement aspect of the LA's decision.
A further and final point that we considered in concluding that the delay was due to
the respondents' fault is the fact that per the 2005 Revised Rules of Procedure of the
NLRC (2005 NLRC Rules), 34 employers are required to submit a report of compliance
within ten (10) calendar days from receipt of the LA's decision, noncompliance with
which signifies a clear refusal to reinstate. Arguably, the 2005 NLRC Rules took effect
only on January 7, 2006; hence, the respondents could not have been reasonably
expected to comply with this duty that was not yet in effect when the LA rendered its
decision (finding illegal dismissal) and issued the writ of execution in 2005.
Nevertheless, when the LA issued the February 16, 2006 alias writ of execution and the
April 24, 2007 writ of execution, the 2005 NLRC Rules was already in place such that
the respondents had become duty-bound to submit the required compliance report;
their noncompliance with this rule all the more showed a clear and determined refusal
to reinstate.
All told, under the facts and the surrounding circumstances, the delay was due to the
acts of the respondents that we find were unjustified. We reiterate and emphasize,
Article 223, paragraph 3, of the Labor Code mandates the employer to immediately
reinstate the dismissed employee, either by actually reinstating him/her under the
conditions prevailing prior to the dismissal or, at the option of the employer, in the
payroll. The respondents' failure in this case to exercise either option rendered them
liable for the petitioners' accrued salary until the LA decision was reversed by the CA
on December 17, 2008. We, therefore, find that the NLRC, in affirming the release of
the garnished amount, merely implemented the mandate of Article 223; it simply
recognized as immediate and self-executory the reinstatement aspect of the LA's
decision.
Accordingly, we reverse for legal errors the CA decision. We find no grave abuse of
discretion attended the NLRC's July 16, 2008 resolution that affirmed the March 13,
2008 decision of the LA granting the release of the garnished amount.