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G.R. No.

184007

February 16, 2011

PAQUITO V. ANDO, Petitioner,


vs.
ANDRESITO Y. CAMPO, ET AL., Respondents.
DECISION
NACHURA, J.:
Before this Court is a Petition for Review on Certiorari 1 under Rule 45 of the Rules of Court.
Petitioner Paquito V. Ando (petitioner) is assailing the Decision 2 dated February 21, 2008 and the
Resolution3 dated July 25, 2008 of the Court of Appeals (CA) in CA-G.R. CEB-SP. No. 02370.
Petitioner was the president of Premier Allied and Contracting Services, Inc. (PACSI), an
independent labor contractor. Respondents were hired by PACSI as pilers or haulers tasked to
manually carry bags of sugar from the warehouse of Victorias Milling Company and load them on
trucks.4 In June 1998, respondents were dismissed from employment. They filed a case for illegal
dismissal and some money claims with the National Labor Relations Commission (NLRC),
Regional Arbitration Branch No. VI, Bacolod City. 5
On June 14, 2001, Labor Arbiter Phibun D. Pura (Labor Arbiter) promulgated a decision, ruling in
respondents favor.6 PACSI and petitioner were directed to pay a total of P422,702.28,
representing respondents separation pay and the award of attorneys fees. 7
Petitioner and PACSI appealed to the NLRC. In a decision 8 dated October 20, 2004, the NLRC
ruled that petitioner failed to perfect his appeal because he did not pay the supersedeas bond. It
also affirmed the Labor Arbiters decision with modification of the award for separation pay to
four other employees who were similarly situated. Upon finality of the decision, respondents
moved for its execution.9
To answer for the monetary award, NLRC Acting Sheriff Romeo Pasustento issued a Notice of Sale
on Execution of Personal Property10 over the property covered by Transfer Certificate of Title
(TCT) No. T-140167 in the name of "Paquito V. Ando x x x married to Erlinda S. Ando."
This prompted petitioner to file an action for prohibition and damages with prayer for the
issuance of a temporary restraining order (TRO) before the Regional Trial Court (RTC), Branch 50,
Bacolod City. Petitioner claimed that the property belonged to him and his wife, not to the
corporation, and, hence, could not be subject of the execution sale. Since it is the corporation
that was the judgment debtor, execution should be made on the latters properties. 11
On December 27, 2006, the RTC issued an Order 12 denying the prayer for a TRO, holding that the
trial court had no jurisdiction to try and decide the case. The RTC ruled that, pursuant to the
NLRC Manual on the Execution of Judgment, petitioners remedy was to file a third-party claim
with the NLRC Sheriff. Despite lack of jurisdiction, however, the RTC went on to decide the merits
of the case.
Petitioner did not file a motion for reconsideration of the RTC Order. Instead, he filed a petition for
certiorari under Rule 6513 before the CA. He contended that the RTC acted without or in excess of
jurisdiction or with grave abuse of discretion amounting to lack or excess of jurisdiction in issuing
the Order. Petitioner argued that the writ of execution was issued improvidently or without
authority since the property to be levied belonged to him in his personal capacity and his
wife. The RTC, respondent contended, could stay the execution of a judgment if the same was
unjust.14 He also contended that, pursuant to a ruling of this Court, a third party who is not a
judgment creditor may choose between filing a third-party claim with the NLRC sheriff or filing a

separate action with the courts.15


In the Decision now assailed before this Court, the CA affirmed the RTC Order in so far as it
dismissed the complaint on the ground that it had no jurisdiction over the case, and nullified all
other pronouncements in the same Order. Petitioner moved for reconsideration, but the motion
was denied.lawph!l
Petitioner then filed the present petition seeking the nullification of the CA Decision. He argues
that he was never sued in his personal capacity, but in his representative capacity as president
of PACSI. Neither was there any indication in the body of the Decision that he was solidarily liable
with the corporation.16 He also concedes that the Labor Arbiters decision has become final.
Hence, he is not seeking to stop the execution of the judgment against the properties of PACSI.
He also avers, however, that there is no evidence that the sheriff ever implemented the writ of
execution against the properties of PACSI. 17
Petitioner also raises anew his argument that he can choose between filing a third-party claim
with the sheriff of the NLRC or filing a separate action. 18 He maintains that this special civil action
is purely civil in nature since it "involves the manner in which the writ of execution in a labor
case will be implemented against the property of petitioner which is not a corporate property of
PACSI."19 What he is seeking to be restrained, petitioner maintains, is not the Decision itself but
the manner of its execution.20 Further, he claims that the property levied has been constituted as
a family home within the contemplation of the Family Code. 21
The petition is meritorious.
Initially, we must state that the CA did not, in fact, err in upholding the RTCs lack of jurisdiction
to restrain the implementation of the writ of execution issued by the Labor Arbiter.
The Court has long recognized that regular courts have no jurisdiction to hear and decide
questions which arise from and are incidental to the enforcement of decisions, orders, or awards
rendered in labor cases by appropriate officers and tribunals of the Department of Labor and
Employment. To hold otherwise is to sanction splitting of jurisdiction which is obnoxious to the
orderly administration of justice.22
Thus, it is, first and foremost, the NLRC Manual on the Execution of Judgment that governs any
question on the execution of a judgment of that body. Petitioner need not look further than that.
The Rules of Court apply only by analogy or in a suppletory character. 23
Consider the provision in Section 16, Rule 39 of the Rules of Court on third-party claims:
SEC. 16. Proceedings where property claimed by third person.If the property levied on is
claimed by any person other than the judgment obligor or his agent, and such person makes an
affidavit of his title thereto or right to the possession thereof, stating the grounds of such right or
title, and serves the same upon the officer making the levy and a copy thereof upon the
judgment obligee, the officer shall not be bound to keep the property, unless such judgment
obligee, on demand of the officer, files a bond approved by the court to indemnify the third-party
claimant in a sum not less than the value of the property levied on. In case of disagreement as to
such value, the same shall be determined by the court issuing the writ of execution. No claim for
damages for the taking or keeping of the property may be enforced against the bond unless the
action therefor is filed within one hundred twenty (120) days from the date of the filing of the
bond.
The officer shall not be liable for damages for the taking or keeping of the property, to any thirdparty claimant if such bond is filed. Nothing herein contained shall prevent such claimant or any
third person from vindicating his claim to the property in a separate action, or prevent the

judgment obligee from claiming damages in the same or a separate action against a third-party
claimant who filed a frivolous or plainly spurious claim.
When the writ of execution is issued in favor of the Republic of the Philippines, or any officer duly
representing it, the filing of such bond shall not be required, and in case the sheriff or levying
officer is sued for damages as a result of the levy, he shall be represented by the Solicitor
General and if held liable therefor, the actual damages adjudged by the court shall be paid by
the National Treasurer out of such funds as may be appropriated for the purpose.
On the other hand, the NLRC Manual on the Execution of Judgment deals specifically with thirdparty claims in cases brought before that body. It defines a third-party claim as one where a
person, not a party to the case, asserts title to or right to the possession of the property levied
upon.24 It also sets out the procedure for the filing of a third-party claim, to wit:
SECTION 2. Proceedings. If property levied upon be claimed by any person other than the
losing party or his agent, such person shall make an affidavit of his title thereto or right to the
possession thereof, stating the grounds of such right or title and shall file the same with the
sheriff and copies thereof served upon the Labor Arbiter or proper officer issuing the writ and
upon the prevailing party. Upon receipt of the third party claim, all proceedings with respect to
the execution of the property subject of the third party claim shall automatically be suspended
and the Labor Arbiter or proper officer issuing the writ shall conduct a hearing with due notice to
all parties concerned and resolve the validity of the claim within ten (10) working days from
receipt thereof and his decision is appealable to the Commission within ten (10) working days
from notice, and the Commission shall resolve the appeal within same period.
There is no doubt in our mind that petitioners complaint is a third- party claim within the
cognizance of the NLRC. Petitioner may indeed be considered a "third party" in relation to the
property subject of the execution vis--vis the Labor Arbiters decision. There is no question that
the property belongs to petitioner and his wife, and not to the corporation. It can be said that the
property belongs to the conjugal partnership, not to petitioner alone. Thus, the property belongs
to a third party, i.e., the conjugal partnership. At the very least, the Court can consider that
petitioners wife is a third party within contemplation of the law.
The Courts pronouncements in Deltaventures Resources, Inc. v. Hon. Cabato 25 are instructive:
Ostensibly the complaint before the trial court was for the recovery of possession and injunction,
but in essence it was an action challenging the legality or propriety of the levy vis-a-vis the alias
writ of execution, including the acts performed by the Labor Arbiter and the Deputy Sheriff
implementing the writ. The complaint was in effect a motion to quash the writ of execution of a
decision rendered on a case properly within the jurisdiction of the Labor Arbiter, to wit: Illegal
Dismissal and Unfair Labor Practice. Considering the factual setting, it is then logical to conclude
that the subject matter of the third party claim is but an incident of the labor case, a matter
beyond the jurisdiction of regional trial courts.
xxxx
x x x. Whatever irregularities attended the issuance an execution of the alias writ of execution
should be referred to the same administrative tribunal which rendered the decision. This is
because any court which issued a writ of execution has the inherent power, for the advancement
of justice, to correct errors of its ministerial officers and to control its own processes.
The broad powers granted to the Labor Arbiter and to the National Labor Relations Commission
by Articles 217, 218 and 224 of the Labor Code can only be interpreted as vesting in them
jurisdiction over incidents arising from, in connection with or relating to labor disputes, as the
controversy under consideration, to the exclusion of the regular courts. 26

There is no denying that the present controversy arose from the complaint for illegal dismissal.
The subject matter of petitioners complaint is the execution of the NLRC decision. Execution is
an essential part of the proceedings before the NLRC. Jurisdiction, once acquired, continues until
the case is finally terminated,27 and there can be no end to the controversy without the full and
proper implementation of the commissions directives.
Further underscoring the RTCs lack of jurisdiction over petitioners complaint is Article 254 of the
Labor Code, to wit:
ART. 254. INJUNCTION PROHIBITED. No temporary or permanent injunction or restraining order
in any case involving or growing out of labor disputes shall be issued by any court or other entity,
except as otherwise provided in Articles 218 and 264 of this Code.
That said, however, we resolve to put an end to the controversy right now, considering the
length of time that has passed since the levy on the property was made.
Petitioner claims that the property sought to be levied does not belong to PACSI, the judgment
debtor, but to him and his wife. Since he was sued in a representative capacity, and not in his
personal capacity, the property could not be made to answer for the judgment obligation of the
corporation.
The TCT28 of the property bears out that, indeed, it belongs to petitioner and his wife. Thus, even
if we consider petitioner as an agent of the corporation and, therefore, not a stranger to the
case such that the provision on third-party claims will not apply to him, the property was
registered not only in the name of petitioner but also of his wife. She stands to lose the property
subject of execution without ever being a party to the case. This will be tantamount to
deprivation of property without due process.
Moreover, the power of the NLRC, or the courts, to execute its judgment extends only to
properties unquestionably belonging to the judgment debtor alone. 29 A sheriff, therefore, has no
authority to attach the property of any person except that of the judgment debtor. 30 Likewise,
there is no showing that the sheriff ever tried to execute on the properties of the corporation.
In sum, while petitioner availed himself of the wrong remedy to vindicate his rights, nonetheless,
justice demands that this Court look beyond his procedural missteps and grant the petition.
WHEREFORE, the foregoing premises considered, the petition is GRANTED. The Decision dated
February 21, 2008 and the Resolution dated July 25, 2008 of the Court of Appeals in CA-G.R. CEBSP. No. 02370 are hereby REVERSED and SET ASIDE, and a new one is entered declaring NULL
and VOID (1) the Order of the Regional Trial Court of Negros Occidental dated December 27,
2006 in Civil Case No. 06-12927; and (2) the Notice of Sale on Execution of Personal Property
dated December 4, 2006 over the property covered by Transfer Certificate of Title No. T-140167,
issued by the Acting Sheriff of the National Labor Relations Commission.
SO ORDERED.
G.R. Nos. 191288 & 191304

March 7, 2012

MANILA ELECTRIC COMPANY, Petitioner,


vs.
JAN CARLO GALA, Respondent.
DECISION
BRION, J.:

We resolve the petition for review on certiorari, 1 seeking to annul the decision2 dated August 25,
2009 and the resolution3 dated February 10, 2010 of the Court of Appeals (CA) rendered in CAG.R. SP. Nos. 105943 and 106021.
The Antecedents
The facts are summarized below.
On March 2, 2006, respondent Jan Carlo Gala commenced employment with the petitioner
Meralco Electric Company (Meralco) as a probationary lineman. He was assigned at Meralcos
Valenzuela Sector. He initially served as member of the crew of Meralcos Truck No. 1823
supervised by Foreman Narciso Matis. After one month, he joined the crew of Truck No. 1837
under the supervision of Foreman Raymundo Zuiga, Sr.
On July 27, 2006, barely four months on the job, Gala was dismissed for alleged complicity in
pilferages of Meralcos electrical supplies, particularly, for the incident which took place on May
25, 2006. On that day, Gala and other Meralco workers were instructed to replace a worn-out
electrical pole at the Pacheco Subdivision in Valenzuela City. Gala and the other linemen were
directed to join Truck No. 1891, under the supervision of Foreman Nemecio Hipolito.
When they arrived at the worksite, Gala and the other workers saw that Truck No. 1837,
supervised by Zuiga, was already there. The linemen of Truck No. 1837 were already at work.
Gala and the other members of the crew of Truck No. 1891 were instructed to help in the digging
of a hole for the pole to be installed.
While the Meralco crew was at work, one Noberto "Bing" Llanes, a non-Meralco employee,
arrived. He appeared to be known to the Meralco foremen as they were seen conversing with
him. Llanes boarded the trucks, without being stopped, and took out what were later found as
electrical supplies. Aside from Gala, the foremen and the other linemen who were at the worksite
when the pilferage happened were later charged with misconduct and dishonesty for their
involvement in the incident.
Unknown to Gala and the rest of the crew, a Meralco surveillance task force was monitoring their
activities and recording everything with a Sony video camera. The task force was composed of
Joseph Aguilar, Ariel Dola and Frederick Riano.
Meralco called for an investigation of the incident and asked Gala to explain. Gala denied
involvement in the pilferage, contending that even if his superiors might have committed a
wrongdoing, he had no participation in what they did. He claimed that: (1) he was at some
distance away from the trucks when the pilferage happened; (2) he did not have an inkling that
an illegal activity was taking place since his supervisors were conversing with Llanes, giving him
the impression that they knew him; (3) he did not call the attention of his superiors because he
was not in a position to do so as he was a mere lineman; and (4) he was just following
instructions in connection with his work and had no control in the disposition of company
supplies and materials. He maintained that his mere presence at the scene of the incident was
not sufficient to hold him liable as a conspirator.
Despite Galas explanation, Meralco proceeded with the investigation and eventually terminated
his employment on July 27, 2006.4 Gala responded by filing an illegal dismissal complaint against
Meralco.5
The Compulsory Arbitration Rulings
In a decision dated September 7, 2007,6 Labor Arbiter Teresita D. Castillon-Lora dismissed the
complaint for lack of merit. She held that Galas participation in the pilferage of Meralcos

property rendered him unqualified to become a regular employee.


Gala appealed to the National Labor Relations Commission (NLRC). In its decision of May 2,
2008,7 the NLRC reversed the labor arbiters ruling. It found that Gala had been illegally
dismissed, since there was "no concrete showing of complicity with the alleged
misconduct/dishonesty[.]"8 The NLRC, however, ruled out Galas reinstatement, stating that his
tenure lasted only up to the end of his probationary period. It awarded him backwages and
attorneys fees.
Both parties moved for partial reconsideration; Gala, on the ground that he should have been
reinstated with full backwages, damages and interests; and Meralco, on the ground that the
NLRC erred in finding that Gala had been illegally dismissed. The NLRC denied the motions.
Relying on the same grounds, Gala and Meralco elevated the case to the CA through a petition
for certiorari under Rule 65 of the Rules of Court.
The CA Decision
In its decision of August 25, 2009,9 the CA denied Meralcos petition for lack of merit and partially
granted Galas petition. It concurred with the NLRC that Gala had been illegally dismissed, a
ruling that was supported by the evidence. It opined that nothing in the records show Galas
knowledge of or complicity in the pilferage. It found insufficient the joint affidavit 10 of the
members of Meralcos task force testifying that Gala and two other linemen knew Llanes.
The CA modified the NLRC decision of May 2, 2008 11 and ordered Galas reinstatement with full
backwages and other benefits. The CA also denied Meralcos motion for reconsideration. Hence,
the present petition for review on certiorari. 12
The Petition
The petition is anchored on the ground that the CA seriously erred and gravely abused its
discretion in 1. ruling that Gala was illegally dismissed; and
2. directing Galas reinstatement despite his probationary status.
Meralco faults the CA for not giving credit to its witnesses Aguilar, Dola and Riano, and instead
treated their joint affidavit (Samasamang Sinumpaang Salaysay) as inconclusive to establish
Galas participation in the pilferage of company property on May 25, 2006. It submits that the
affidavit of the three Meralco employees disproves the CAs findings, considering that their
statements were based on their first-hand account of the incident during their day-long
surveillance on May 25, 2006. It points out that the three Meralco employees categorically stated
that all of the companys foremen and linemen present at that time, including Gala, had
knowledge of the pilferage that was happening at the time. According to Aguilar, Dola and Riano,
the trucks crew, including Gala, was familiar with Llanes who acted as if his presence
particularly, that of freely collecting materials and supplies was a regular occurrence during
their operations.
Meralco maintains that Gala himself admitted in his own testimony 13 that he had been familiar
with Llanes even before the May 25, 2006 incident where he saw Zuiga, the foreman of Truck
No. 1837, conversing with Llanes. Meralco submits that Galas admission, instead of
demonstrating "his feigned innocence," 14 even highlights his guilt, especially considering that by
design, his misfeasance assisted Llanes in pilfering company property; Gala neither intervened to
stop Llanes, nor did he report the incident to the Meralco management.

Meralco posits that because of his undeniable knowledge of, if not participation in, the pilferage
activities done by their group, the company was well within its right in terminating his
employment as a probationary employee for his failure to meet the basic standards for his
regularization. The standards, it points out, were duly explained to him and outlined in his
probationary employment contract. For this reason and due to the expiration of Galas
probationary employment, the CA should not have ordered his reinstatement with full
backwages.
Finally, Meralco argues that even if Gala was illegally dismissed, he was entitled to just his
backwages for the unexpired portion of his employment contract with the company.
Galas Case
By way of his Comment (to the Petition) dated September 2, 2010, 15 Gala asks for a denial of the
petition because of (1) serious and fatal infirmities in the petition; (2) unreliable statements of
Meralcos witnesses; and (3) clear lack of basis to support the termination of his employment.
Gala contends, in regard to the alleged procedural defects of the petition, that the "Verification
and Certification," "Secretarys Certificate" and "Affidavit of Service" do not contain the details of
the Community or Residence Tax Certificates of the affiants, in violation of Section 6 of
Commonwealth Act No. 465 (an Act to Impose a Residence Tax). Additionally, the lawyers who
signed the petition failed to indicate their updated Mandatory Continuing Legal Education (MCLE)
certificate numbers, in violation of the rules.
With respect to the merits of the case, Gala bewails Meralcos reliance on the joint affidavit 16 of
Aguilar, Dola and Riano not only because it was presented for the first time on appeal to the CA,
but also because it was a mere afterthought. He explains that Aguilar and Dola were the very
same persons who executed a much earlier sworn statement or transcription dated July 7, 2006.
This earlier statement did not even mention Gala, but the later joint affidavit "splashes GALAs
name in a desperate attempt to link him to an imagined wrongdoing." 17
Zeroing in on what he believes as lack of credibility of Meralcos evidence, Gala posits that there
is clear lack of basis for the termination of his employment. Thus, he wonders why Meralco did
not present as evidence the video footage of the entire incident which it claims exists. He
suspects that the footage was adverse to Meralcos position in the case.
Gala adds that the allegations of a "reported pilferage" or "rampant theft or pilferage" committed
prior to May 25, 2006 by his superiors were not established, for even the labor arbiter did not
make a finding on the foremens involvement in the incident. He stresses that the same is true in
his case as there is no proof of his participation in the pilferage.
Gala further submits that even if he saw Llanes on May 25, 2006 at about the time of the
occurrence of the pilferage near or around the Meralco trucks, he was not aware that a
wrongdoing was being committed or was about to be committed. He points out at that precise
time, his superiors were much nearer to the trucks than he as he was among the crew digging a
hole. He presumed at the time that his own superiors, being the more senior employees, could
be trusted to protect company property.
Finally, Gala posits that his reinstatement with full backwages is but a consequence of the
illegality of his dismissal. He argues that even if he was on probation, he is entitled to security of
tenure. Citing Philippine Manpower Services, Inc. v. NLRC, 18 he claims that in the absence of any
justification for the termination of his probationary employment, he is entitled to continued
employment even beyond the probationary period.
The Courts Ruling

The procedural issue


Gala would want the petition to be dismissed outright on procedural grounds, claiming that the
"Verification and Certification," "Secretarys Certificate" and "Affidavit of Service" accompanying
the petition do not contain the details of the Community Tax Certificates of the affiants, and that
the lawyers who signed the petition failed to indicate their updated MCLE certificate numbers, in
violation of existing rules.
We stress at this point that it is the spirit and intention of labor legislation that the NLRC and the
labor arbiters shall use every reasonable means to ascertain the facts in each case speedily and
objectively, without regard to technicalities of law or procedure, provided due process is duly
observed.19 In keeping with this policy and in the interest of substantial justice, we deem it
proper to give due course to the petition, especially in view of the conflict between the findings
of the labor arbiter, on the one hand, and the NLRC and the CA, on the other. As we said in S.S.
Ventures International, Inc. v. S.S. Ventures Labor Union, 20 "the application of technical rules of
procedure in labor cases may be relaxed to serve the demands of substantial justice."
The substantive aspect of the case
We find merit in the petition.
Contrary to the conclusions of the CA and the NLRC, there is substantial evidence supporting
Meralcos position that Gala had become unfit to continue his employment with the company.
Gala was found, after an administrative investigation, to have failed to meet the standards
expected of him to become a regular employee and this failure was mainly due to his
"undeniable knowledge, if not participation, in the pilferage activities done by their group, all to
the prejudice of the Companys interests." 21
Gala insists that he cannot be sanctioned for the theft of company property on May 25, 2006. He
maintains that he had no direct participation in the incident and that he was not aware that an
illegal activity was going on as he was at some distance from the trucks when the alleged theft
was being committed. He adds that he did not call the attention of the foremen because he was
a mere lineman and he was focused on what he was doing at the time. He argues that in any
event, his mere presence in the area was not enough to make him a conspirator in the
commission of the pilferage.
Gala misses the point. He forgets that as a probationary employee, his overall job performance
and his behavior were being monitored and measured in accordance with the standards (i.e., the
terms and conditions) laid down in his probationary employment agreement. 22 Under paragraph
8 of the agreement, he was subject to strict compliance with, and non-violation of the Company
Code on Employee Discipline, Safety Code, rules and regulations and existing policies. Par. 10
required him to observe at all times the highest degree of transparency, selflessness and
integrity in the performance of his duties and responsibilities, free from any form of conflict or
contradicting with his own personal interest.
The evidence on record established Galas presence in the worksite where the pilferage of
company property happened.1wphi1 It also established that it was not only on May 25, 2006
that Llanes, the pilferer, had been seen during a Meralco operation. He had been previously
noticed by Meralco employees, including Gala (based on his admission), 23 in past operations. If
Gala had seen Llanes in earlier projects or operations of the company, it is incredulous for him to
say that he did not know why Llanes was there or what Zuiga and Llanes were talking about. To
our mind, the Meralco crew (the foremen and the linemen) allowed or could have even asked
Llanes to be there during their operations for one and only purpose to serve as their conduit
for pilfered company supplies to be sold to ready buyers outside Meralco worksites.

The familiarity of the Meralco crew with Llanes, a non-Meralco employee who had been present
in Meralco field operations, does not contradict at all but rather support the Meralco submission
that there had been "reported pilferage" or "rampant theft," by the crew, of company property
even before May 25, 2006. Gala downplays this particular point with the argument that the labor
arbiter made no such finding as she merely assumed it to be a fact, 24 her only "basis" being the
statement that "may natanggap na balita na ang mga crew na ito ay palagiang hindi nagsasauli
ng mga electric facilities na kanilang ginagamit o pinapalitan bagkus ito ay ibinenta
palabas."25Gala impugns the statement as hearsay. He also wonders why Meralcos supposed
"video footage" of the incident on May 25, 2006 was never presented in evidence.
The established fact that Llanes, a non-Meralco employee, was often seen during company
operations, conversing with the foremen, for reason or reasons connected with the ongoing
company operations, gives rise to the question: what was he doing there? Apparently, he had
been visiting Meralco worksites, at least in the Valenzuela Sector, not simply to socialize, but to
do something else. As testified to by witnesses, he was picking up unused supplies and materials
that were not returned to the company. From these factual premises, it is not hard to conclude
that this activity was for the mutual pecuniary benefit of himself and the crew who tolerated the
practice. For one working at the scene who had seen or who had shown familiarity with Llanes (a
non-Meralco employee), not to have known the reason for his presence is to disregard the
obvious, or at least the very suspicious.
We consider, too, and we find credible the company submission that the Meralco crew who
worked at the Pacheco Subdivision in Valenzuela City on May 25, 2006 had not been returning
unused supplies and materials, to the prejudice of the company. From all these, the allegedly
hearsay evidence that is not competent in judicial proceedings (as noted above), takes on special
meaning and relevance.
With respect to the video footage of the May 25, 2006 incident, Gala himself admitted that he
viewed the tape during the administrative investigation, particularly in connection with the
accusation against him that he allowed Llanes (binatilyong may kapansanan sa bibig) to board
the Meralco trucks.26 The choice of evidence belongs to a party and the mere fact that the video
was shown to Gala indicates that the video was not an evidence that Meralco was trying to
suppress. Gala could have, if he had wanted to, served a subpoena for the production of the
video footage as evidence. The fact that he did not does not strengthen his case nor weaken the
case of Meralco.
On the whole, the totality of the circumstances obtaining in the case convinces us that Gala
could not but have knowledge of the pilferage of company electrical supplies on May 25, 2006;
he was complicit in its commission, if not by direct participation, certainly, by his inaction while it
was being perpetrated and by not reporting the incident to company authorities. Thus, we find
substantial evidence to support the conclusion that Gala does not deserve to remain in Meralcos
employ as a regular employee. He violated his probationary employment agreement, especially
the requirement for him "to observe at all times the highest degree of transparency, selflessness
and integrity in the performance of their duties and responsibilities[.]" 27 He failed to qualify as a
regular employee.28
For ignoring the evidence in this case, the NLRC committed grave abuse of discretion and, in
sustaining the NLRC, the CA committed a reversible error.
WHEREFORE, premises considered, the petition is GRANTED. The assailed decision and resolution
of the Court of Appeals are SET ASIDE. The complaint is DISMISSED for lack of merit.
SO ORDERED.
G.R. No. 155844

July 14, 2008

NATIONWIDE SECURITY and ALLIED SERVICES, INC., Petitioner,


vs.
THE COURT OF APPEALS, NATIONAL LABOR RELATIONS COMMISSION and JOSEPH
DIMPAZ, HIPOLITO LOPEZ, EDWARD ODATO, FELICISIMO PABON and JOHNNY
AGBAY, Respondents.
RESOLUTION
QUISUMBING, J.:
This petition for certiorari seeks the reversal and setting aside of the Decision 1 dated January 31,
2002 and the Resolution2 dated September 12, 2002 of the Court of Appeals in CA-G.R. SP No.
65465. The appellate court had affirmed the January 30, 2001 3 and April 20, 2001 Resolutions of
the National Labor Relations Commission (NLRC).
The factual antecedents of this case are as follows.
Labor Arbiter Manuel M. Manansala found petitioner Nationwide Security and Allied Services, Inc.,
a security agency, not liable for illegal dismissal in NLRC NCR 00-01-00833-96 and 00-02-0112996 involving eight security guards who were employees of the petitioner. However, the Labor
Arbiter directed the petitioner to pay the aforementioned security guards P81,750.00 in
separation pay, P8,700.00 in unpaid salaries, P93,795.68 for underpayment and 10% attorneys
fees based on the total monetary award.4
Dissatisfied with the decision, petitioner appealed to the NLRC which dismissed its appeal for two
reasons first, for having been filed beyond the reglementary period within which to perfect the
appeal and second, for filing an insufficient appeal bond. It disposed as follows:
WHEREFORE, in the light of the foregoing, it is hereby ordered that:
1. the instant appeal be considered DISMISSED; and,
2. the Decision appealed from be deemed FINAL and EXECUTORY.
SO ORDERED.5
Its motion for reconsideration having been denied, petitioner then appealed to the Court of
Appeals to have the appeal resolved on the merits rather than on pure technicalities in the
interest of due process.
The Court of Appeals dismissed the case, holding that in a special action for certiorari, the
burden is on petitioner to prove not merely reversible error, but grave abuse of discretion
amounting to lack of or excess of jurisdiction on the part of public respondent NLRC. The
dispositive portion of its decision states:
WHEREFORE, in view of the foregoing, the petition is hereby DISMISSED. The questioned
Resolutions dated 30 January 2001 and 20 April 2001 of the National Labor Relations Commission
are accordingly AFFIRMED.
SO ORDERED.6
The Court of Appeals likewise denied the petitioners motion for reconsideration. 7 Hence, this
petition which raises the following issues:

I.
WHETHER OR NOT TECHNICALITIES IN LABOR CASES MUST PREVAIL OVER THE SPIRIT AND
INTENTION OF THE LABOR CODE UNDER ARTICLE 221 THEREOF WHICH STATES:
"In any proceeding before the Commission or any of the Labor Arbiters, the rules of
evidence prevailing in courts of Law or equity shall not be controlling and it is the spirit
and [i]ntention of this Code that the Commission and its members and Labor
Arbiters shall use every and all reasonable means to ascertain the facts in each
case speedily and objectively and without [regard] to technicalities of law or
procedure, all [i]n the interest of due process." Emphasis added.
II.
WHETHER OR NOT THE DOCTRINE IN THE CASE OF STAR ANGEL HANDICRAFT vs. NLRC, et
al., 236 SCRA 580 AND ROSEWOOD PROCESSING, INC. VS. NLRC, G.R. [No.] 116476, May
21, 1998 FINDS APPLICATION IN THE INSTANT CASE [;]
III.
WHETHER OR NOT SEPARATION PAY IS JUSTIFIED AS AWARD IN CASES WHERE THE
EMPLOYEE IS TERMINATED DUE TO CONTRACT EXPIRATION AS IN THE INSTANT CASE; AND
IV.
WHETHER OR NOT THE REQUIREMENT ON CERTIFICATION AGAINST FORUM SHOPPING
WHICH WAS RAISED BEFORE THE NLRC IS ENFORCEABLE IN THE INSTANT CASE. 8
Petitioner contends that the Court of Appeals erred when it dismissed its case based on
technicalities while the private respondents contend that the appeal to the NLRC had not been
perfected, since the appeal was filed outside the reglementary period, and the bond was
insufficient.9
After considering all the circumstances in this case and the submission by the parties, we are in
agreement that the petition lacks merit.
At the outset it must be pointed out here that the petition for certiorari filed with the Court by
petitioner under Rule 65 of the Rules of Court is inappropriate. The proper remedy is a petition
for review under Rule 45 purely on questions of law. There being a remedy of appeal via petition
for review under Rule 45 of the Rules of Court available to the petitioner, the filing of a petition
for certiorari under Rule 65 is improper.1avvphi1
But even if we bend our Rules to allow the present petition for certiorari, still it will not prosper
because we do not find any grave abuse of discretion amounting to lack of or excess of
jurisdiction on the part of the Court of Appeals when it dismissed the petition of the security
agency. We must stress that under Rule 65, the abuse of discretion must be so patent and gross
as to amount to an evasion of positive duty or to a virtual refusal to perform a duty enjoined by
law, or to act at all in contemplation of law, as where the power is exercised in an arbitrary and
despotic manner by reason of passion or personal hostility. 10 No such abuse of discretion
happened here. The assailed decision by the Court of Appeals was certainly not capricious nor
arbitrary, nor was it a whimsical exercise of judgment amounting to a lack of jurisdiction. 11
The Labor Code provides as follows:

ART. 223. Appeal. Decisions, awards, or orders of the Labor Arbiter are final and executory
unless appealed to the Commission by any or both parties within ten (10) calendar days from
receipt of such decisions, awards, or orders. Such appeal may be entertained only on any of the
following grounds:
(a) If there is prima facie evidence of abuse of discretion on the part of the Labor Arbiter;
(b) If the decision, order or award was secured through fraud or coercion, including graft
and corruption;
(c) If made purely on questions of law, and
(d) If serious errors in the findings of facts are raised which would cause grave or
irreparable damage or injury to the appellant.
In case of a judgment involving a monetary award, an appeal by the employer may be perfected
only upon the posting of a cash or surety bond issued by a reputable bonding company duly
accredited by the Commission in the amount equivalent to the monetary award in the judgment
appealed from.
xxxx
The New Rules of Procedure of the NLRC states:
Section 1. Periods of appeal. Decisions, resolutions or orders of the Labor Arbiter shall be
final and executory unless appealed to the Commission by any or both parties within ten (10)
calendar days from receipt thereof; and in case of decisions, resolutions or orders of the Regional
Director of the Department of Labor and Employment pursuant to Article 129 of the Labor Code,
within five (5) calendar days from receipt thereof. If the 10th or 5th day, as the case may be, falls
on a Saturday, Sunday or holiday, the last day to perfect the appeal shall be the first working day
following such Saturday, Sunday or holiday.
No motion or request for extension of the period within which to perfect an appeal shall be
allowed.
In the instant case, both the NLRC and the Court of Appeals found that petitioner received the
decision of the Labor Arbiter on July 16, 1999. This factual finding is supported by sufficient
evidence,12 and we take it as binding on us. Petitioner then simultaneously filed its "Appeal
Memorandum", "Notice of Appeal" and "Motion to Reduce Bond", by registered mail on July 29,
1999, under Registry Receipt No. 003098.13 These were received by the NLRC on July 30,
1999.14 The appeal to the NLRC should have been perfected, as provided by its Rules, within a
period of 10 days from receipt by petitioner of the decision on July 16, 1999. Clearly, the filing of
the appeal--three days after July 26, 1999--was already beyond the reglementary period and in
violation of the NLRC Rules and the pertinent Article on Appeal in the Labor Code.
Failure to perfect an appeal renders the decision final and executory. 15 The right to appeal is a
statutory right and one who seeks to avail of the right must comply with the statute or the rules.
The rules, particularly the requirements for perfecting an appeal within the reglementary period
specified in the law, must be strictly followed as they are considered indispensable interdictions
against needless delays and for the orderly discharge of judicial business. 16 It is only in highly
meritorious cases that this Court will opt not to strictly apply the rules and thus prevent a grave
injustice from being done.17 The exception does not obtain here. Thus, we are in agreement that
the decision of the Labor Arbiter already became final and executory because petitioner failed to
file the appeal within 10 calendar days from receipt of the decision.

Clearly, the NLRC committed no grave abuse of discretion in dismissing the appeal before it. It
follows that the Court of Appeals, too, did not err, nor gravely abuse its discretion, in sustaining
the NLRC Order, by dismissing the petition for certiorari before it. Hence, with the primordial
issue resolved, we find no need to tarry on the other issues raised by petitioner.
WHEREFORE, the Decision dated January 31, 2002 and the Resolution dated September 12,
2002 of the Court of Appeals in CA- G.R. SP No. 65465 are AFFIRMED. Costs against petitioner.
SO ORDERED.
G.R. No. 168501

January 31, 2011

ISLRIZ TRADING/VICTOR HUGO LU, Petitioner,


vs.
EFREN CAPADA, LAURO LICUP, NORBERTO NIGOS, RONNIE ABEL, GODOFREDO
MAGNAYE, ARNEL SIBERRE, EDMUNDO CAPADA, NOMERLITO MAGNAYE and ALBERTO
DELA VEGA, Respondents.
DECISION
DEL CASTILLO, J.:
We reiterate in this petition the settled view that employees are entitled to their accrued salaries
during the period between the Labor Arbiters order of reinstatement pending appeal and the
resolution of the National Labor Relations Commission (NLRC) overturning that of the Labor
Arbiter. Otherwise stated, even if the order of reinstatement of the Labor Arbiter is reversed on
appeal, the employer is still obliged to reinstate and pay the wages of the employee during the
period of appeal until reversal by a higher court or tribunal. In this case, respondents are entitled
to their accrued salaries from the time petitioner received a copy of the Decision of the Labor
Arbiter declaring respondents termination illegal and ordering their reinstatement up to the date
of the NLRC resolution overturning that of the Labor Arbiter.
This Petition for Review on Certiorari assails the Decision1 dated March 18, 2005 of the Court of
Appeals (CA) in CA-G.R. SP No. 84744 which dismissed the petition for certiorari before it, as well
as the Resolution2 dated June 16, 2005 which denied the motion for reconsideration thereto.
Factual Antecedents
Respondents Efren Capada, Lauro Licup, Norberto Nigos and Godofredo Magnaye were drivers
while respondents Ronnie Abel, Arnel Siberre, Edmundo Capada, Nomerlito Magnaye and Alberto
Dela Vega were helpers of Islriz Trading, a gravel and sand business owned and operated by
petitioner Victor Hugo Lu. Claiming that they were illegally dismissed, respondents filed a
Complaint3 for illegal dismissal and non-payment of overtime pay, holiday pay, rest day pay,
allowances and separation pay against petitioner on August 9, 2000 before the Labor Arbiter. On
his part, petitioner imputed abandonment of work against respondents.
Proceedings before the Labor Arbiter and the NLRC
On December 21, 2001, Labor Arbiter Waldo Emerson R. Gan (Gan) rendered a Decision 4 in this
wise:
WHEREFORE, premises considered, judgment is hereby rendered as follows:
1. Declaring respondent ISLRIZ TRADING guilty of illegal dismissal.

2. Ordering respondent to reinstate complainants to their former positions without loss of


seniority rights and the payment of full backwages from date of dismissal to actual
reinstatement which are computed as follows: (As of date of decision);
1.
2.
3.
4.
5.
6.
7.
8.
9.

EFREN CAPADA
P 102,400.00 (6,400.00X16)
LAURO LICUP
87,040.00 (5,440.00X16)
NORBERTO NIGOS
87,040.00 (5,440.00X16)
RONNIE ABEL
76,800.00 (4,800.00X16)
GODOFREDO MAGNAYE
102,400.00 (6,400.00X16)
ARNEL SIBERRE
51,200.00 (3,200.00X16)
EDMUNDO CAPADA
76,800.00 (4,800.00X16)
NOMERLITO MAGNAYE
76,800.00 (4,800.00X16)
ALBERTO DELA VEGA
51,200.00 (3,200.00X16)

3. Ordering respondent to pay complainants 10% of the total monetary award as


attorneys fees.
All other claims are dismissed for lack of merit.
SO ORDERED.5
Aggrieved, petitioner appealed6 to the NLRC which granted the appeal. The NLRC set aside the
Decision of Labor Arbiter Gan in a Resolution7 dated September 5, 2002. Finding that
respondents failure to continue working for petitioner was neither caused by termination nor
abandonment of work, the NLRC ordered respondents reinstatement but without backwages.
The dispositive portion of said Resolution reads as follows:
WHEREFORE, premises considered, the appeal is GRANTED and the Decision dated 21 December
2001 is hereby ordered SET ASIDE.
A New Decision is hereby rendered finding that the failure to work of complainants-appellees is
neither occasioned by termination (n)or abandonment of work, hence, respondents-appellants
shall reinstate complainants-appellees to their former positions without backwages within ten
(10) days from receipt of this Resolution.
SO ORDERED.8
Respondents filed a Motion for Reconsideration 9 thereto but same was likewise denied in a
Resolution10 dated November 18, 2002. This became final and executory on December 7, 2002. 11
On December 9, 2003, however, respondents filed with the Labor Arbiter an Ex-Parte Motion to
Set Case for Conference with Motion.12 They averred therein that since the Decision of Labor
Arbiter Gan ordered their reinstatement, a Writ of Execution 13 dated April 22, 2002 was already
issued for the enforcement of its reinstatement aspect as same is immediately executory even
pending appeal. But this notwithstanding and despite the issuance and subsequent finality of the
NLRC Resolution which likewise ordered respondents reinstatement, petitioner still refused to
reinstate them. Thus, respondents prayed that in view of the orders of reinstatement, a
computation of the award of backwages be made and that an Alias Writ of Execution for its
enforcement be issued.
The case was then set for pre-execution conference on January 29, February 24 and March 5,
2004. Both parties appeared thereat but failed to come to terms on the issue of the monetary
award. Hence, the office of the Labor Arbiter through Fiscal Examiner II Ma. Irene T. Trinchera
(Fiscal Examiner Trinchera) issued an undated Computation 14 of respondents accrued salaries

from January 1, 2002 to January 30, 2004 or for a total of 24.97 months in the amount
of P1,110,665.60 computed as follows:
Accrued Salary from January 1, 2002 to January 30, 2004 = 24.97 months
1. Efren Capada P 6,400.00 x 24.97
months

P 159,808.0
0

2. Lauro Licup P 5,440.00 x 24.97


months

P 135,836.8
0

3. Norberto Nigos P 5,440.00 x 24.97


months

P 135,836.8
0

4. Ronnie Abel P 4,800.00 x 24.97


months

P 119,856.0
0

5. Godofredo Magnaye P 6,400.00 x


24.97 months

P 159,808.0
0

6. Arnel Siberre P 3,200.00 x 24.97


months

P 79,
904.00

7. Edmundo Capada P 4,800.00 x 24.97


months

P 119,
856.00

8. Nomerlito Magnaye P 4,800.00 x


24.97 months

P 119,
856.00

9. Alberto de la Vega P 3,200.00 x 24.97


months
Total

P 79,
904.00
P 1,110,665
.60

Petitioner questioned this computation in his Motion/Manifestation 15 claiming that said


computation was without any factual or legal basis considering that Labor Arbiter Gans Decision
had already been reversed and set aside by the NLRC and that therefore there should be no
monetary award.
Nevertheless, Labor Arbiter Danna M. Castillon (Castillon) still issued a Writ of Execution 16 dated
March 9, 2004 to enforce the monetary award in accordance with the abovementioned
computation. Accordingly, the Sheriff issued a Notice of Sale/Levy on Execution of Personal
Property17 by virtue of which petitioners properties were levied and set for auction sale on March
29, 2004. In an effort to forestall this impending execution, petitioner then filed a Motion to
Quash Writ of Execution with Prayer to Hold in Abeyance of Auction Sale 18 and a Supplemental
Motion to Quash/Stop Auction Sale.19 He also served upon the Sheriff a letter of protest. 20 All of
these protest actions proved futile as the Sheriff later submitted his Report dated March 30, 2004
informing the Labor Arbiter that he had levied some of petitioners personal properties and sold
them in an auction sale where respondents were the only bidders. After each of the respondents
entered a bid equal to their individual shares in the judgment award, the levied properties were
awarded to them.
Later, respondents claimed that although petitioners levied properties were already awarded to
them, they could not take full control, ownership and possession of said properties because
petitioner had allegedly padlocked the premises where the properties were situated. Hence, they
asked Labor Arbiter Castillon to issue a break-open order. 21 For his part and in a last ditch effort
to nullify the writ of execution, petitioner filed a Motion to Quash Writ of Execution, Notice of

Sale/Levy on Execution of Personal Property and Auction Sale on Additional Grounds. 22 He


reiterated that since the NLRC Resolution which reversed the Decision of the Labor Arbiter
ordered respondents reinstatement without payment of backwages or other monetary award,
only the execution of reinstatement sansany backwages or monetary award should be enforced.
It is his position that the Writ of Execution dated March 9, 2004 ordering the Sheriff to collect
respondents accrued salaries of P1,110,665.60 plus P1,096.00 execution fees or the total
amount of P1,111,761.60, in effect illegally amended the said NLRC Resolution; hence, said writ
of execution is null and void. And, as the writ is null and void, it follows that the Labor Arbiter
cannot issue a break-open order. In sum, petitioner prayed that the Writ of Execution be quashed
and all proceedings subsequent to it be declared null and void and that respondents Urgent
Motion for Issuance of Break Open Order be denied for lack of merit.
Both motions were resolved in an Order23 dated June 3, 2004. Labor Arbiter Castillon explained
therein that the monetary award subject of the questioned Writ of Execution refers to
respondents accrued salaries by reason of the reinstatement order of Labor Arbiter Gan which is
self-executory pursuant to Article 22324 of the Labor Code. The Order cited Roquero v. Philippine
Airlines Inc.25 where this Court ruled that employees are still entitled to their accrued salaries
even if the order of reinstatement has been reversed on appeal. As to the application for break
open order, Labor Arbiter Castillon relied on the Sheriffs report that there is imminent danger
that petitioners properties sold at the public auction might be transferred or removed, as in fact
four of said properties were already transferred. Thus, she deemed it necessary to grant
respondents request for a break open order to gain access to petitioners premises. The
dispositive portion of said Order reads:
WHEREFORE, premises considered, the Motion to Quash Writ of Execution [and] Notice of
Sale/Levy on Execution Sale filed by the respondent(s) [are] hereby DENIED. In view of the
refusal of the respondents entry to its premises, Deputy Sheriff S. Diega of this Office is hereby
ordered to break-open the entrance of the premises of respondent wherein the properties are
located.
For this purpose, he may secure the assistance of the local police officer having jurisdiction over
the locality where the said properties are located.
SO ORDERED.26
Undeterred, petitioner brought the matter to the CA through a Petition for Certiorari.
Proceedings before the Court of Appeals
Before the CA, petitioner imputed grave abuse of discretion amounting to lack or excess of
jurisdiction upon Labor Arbiter Castillon for issuing the questioned Writ of Execution and the
Order dated June 3, 2004. He maintained that since the December 21, 2001 Decision of Labor
Arbiter Gan has already been reversed and set aside by the September 5, 2002 Resolution of the
NLRC, the Writ of Execution issued by Labor Arbiter Castillon should have confined itself to the
said NLRC Resolution which ordered respondents reinstatement without backwages. Hence,
when Labor Arbiter Castillon issued the writ commanding the Sheriff to satisfy the monetary
award in the amount ofP1,111,761.60, she acted with grave abuse of discretion amounting to
lack or excess of jurisdiction. For the same reason, her issuance of the Order dated June 3, 2004
denying petitioners Motion to Quash Writ of Execution with Prayer to Hold in Abeyance Auction
Sale and granting respondents Urgent Motion for Issuance of Break Open Order is likewise
tainted with grave abuse of discretion. Aside from these, petitioner also questioned the conduct
of the auction sale. He likewise claimed that he was denied due process because he was not
given the opportunity to file a motion for reconsideration of the Order denying his Motion to
Quash Writ of Execution considering that a break-open order was also made in the same Order.
For their part, respondents posited that since they have already disposed of petitioners levied

properties, the petition has already become moot.


In a Decision27 dated March 18, 2005, the CA quoted the June 3, 2004 Order of Labor Arbiter
Castillon and agreed with her ratiocination that pursuant to Article 223 of the Labor Code, what is
sought to be enforced by the subject Writ of Execution is the accrued salaries owing to
respondents by reason of the reinstatement order of Labor Arbiter Gan. The CA also found as
unmeritorious the issues raised by petitioner with regard to the conduct of the auction sale.
Moreover, it did not give weight to petitioners claim of lack of due process considering that a
motion for reconsideration of a Writ of Execution is not an available remedy. Thus, the CA
dismissed the petition. Petitioners Motion for Reconsideration 28 suffered the same fate as it was
also denied in a Resolution29 dated June 16, 2005.
Hence, petitioner is now before this Court through this Petition for Review on Certiorari where he
presents the following issues:
1. Whether the provision of Article 223 of the Labor Code is applicable to this case x x x.
2. Whether x x x the Decision dated March 18, 2005 and the Resolution dated June 16,
2005 of the Court of Appeals are contrary to law and jurisprudence[.]
3. Whether x x x the award of accrued salaries has legal and factual bases[.] 30
The Parties Arguments
Petitioner contends that the assailed Decision and Resolution of the CA are contrary to law and
jurisprudence. This is because in upholding the issuance of the questioned Writ of Execution for
the enforcement of respondents accrued salaries, said Decision and Resolution, in effect, altered
the NLRC Resolution which only decreed respondents reinstatement without backwages.
Moreover, he
posits that Article 223 of the Labor Code only applies when an employee has been illegally
dismissed from work. And since in this case the NLRC ruled that respondents failure to continue
working for petitioner was not occasioned by termination, there is no illegal dismissal to speak of,
hence, said provision of the Labor Code does not apply. Lastly, petitioner claims that the
computation of respondents accrued salaries in the total amount ofP1,110,665.60 has no legal
and factual bases since as repeatedly pointed out by him, the NLRC Resolution reversing the
Labor Arbiters Decision has already ordered respondents reinstatement without backwages
after it found that there was no illegal termination.
Respondents, on the other hand, maintain that the CA did not err in applying Article 223 of the
Labor Code to the instant case. They thus contend that the computation of their accrued salaries
covering the period during which they were supposed to have been reinstated or from January 1,
2002 to January 30, 2004, should be upheld since same merely applied Article 223. In sum,
respondents believe that the assailed Decision and Resolution of the CA are in accord with law
and jurisprudence.
Our Ruling
The petition is not meritorious.
The core issue to be resolved in this case is similar to the one determined in Garcia v. Philippine
Airlines Inc.,31that is, whether respondents may collect their wages during the period between
the Labor Arbiters order of reinstatement pending appeal and the NLRC Resolution overturning
that of the Labor Arbiter.

In order to provide a thorough discussion of the present case, an overview of Garcia is proper.
In Garcia, petitioners therein were dismissed by Philippine Airlines Inc. (PAL) after they were
allegedly caught in the act of sniffing shabu during a raid at the PAL Technical Centers Toolroom
Section. They thus filed a complaint for illegal dismissal. In the meantime, PAL was placed under
an interim rehabilitation receivership because it was then suffering from severe financial losses.
Thereafter, the Labor Arbiter ruled in petitioners favor and ordered PAL to immediately comply
with the reinstatement aspect of the decision. PAL appealed to the NLRC. The NLRC reversed the
Labor Arbiters Decision and dismissed petitioners complaint for lack of merit. As petitioners
Motion for Reconsideration thereto was likewise denied, the NLRC issued an Entry of Judgment.
Notably, PALs Interim Rehabilitation Receiver was replaced by a Permanent Rehabilitation
Receiver during the pendency of its appeal with the NLRC. A writ of execution with respect to the
reinstatement aspect of the Labor Arbiters Decision was then issued and pursuant thereto, a
Notice of Garnishment was likewise issued. To stop this, PAL filed an Urgent Petition for Injunction
with the NLRC. While the NLRC suspended and referred the action to the rehabilitation receiver, it
however, likewise affirmed the validity of the writ so that PAL appealed to the CA. Fortunately for
PAL, the CA nullified the assailed NLRC Resolutions on the grounds that (1) a subsequent finding
of a valid dismissal removes the basis for the reinstatement aspect of a labor arbiters decision
and, (2) the impossibility to comply with the reinstatement order due to corporate rehabilitation
justifies PALs failure to exercise the options under Article 223 of the Labor Code. When the case
reached this Court, we partially granted the petition in a Decision dated August 29, 2007 and
effectively reinstated the NLRC Resolutions insofar as it suspended the proceedings. But as PAL
later manifested that the rehabilitation proceedings have already been terminated, the court
proceeded to determine the remaining issue, which is, as earlier stated, whether petitioners
therein may collect their wages during the period between the Labor Arbiters order of
reinstatement pending appeal and the NLRC Resolution overturning that of the Labor Arbiter.
In resolving the case, the Court examined its conflicting rulings with respect to the application of
paragraph 3 of Article 223 of the Labor Code, viz:
At the core of the seeming divergence is the application of paragraph 3 of Article 223 of the
Labor Code which reads:
In any event, the decision of the Labor Arbiter reinstating a dismissed or separated employee,
insofar as thereinstatement 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.
The view as maintained in a number of cases is that:
x x x [E]ven if the order of reinstatement of the Labor Arbiter is reversed on appeal, it
is obligatory on the part of the employer to reinstate and pay the wages of the
dismissed employee during the period of appeal until reversal by the higher court. On
the other hand, if the employee has been reinstated during the appeal period and such
reinstatement order is reversed with finality, the employee is not required to reimburse whatever
salary he received for he is entitled to such, more so if he actually rendered services during the
period.
In other words, a dismissed employee whose case was favorably decided by the Labor Arbiter is
entitled to receive wages pending appeal upon reinstatement, which is immediately executory.
Unless there is a restraining order, it is ministerial upon the Labor Arbiter to implement the order
of reinstatement and it is mandatory on the employer to comply therewith.

The opposite view is articulated in Genuino which states:


If the decision of the labor arbiter is later reversed on appeal upon the finding that the ground
for dismissal is valid, then the employer has the right to require the dismissed employee on
payroll reinstatement to refund the salaries s/he received while the case was pending appeal, or
it can be deducted from the accrued benefits that the dismissed employee was entitled to
receive from his/her employer under existing laws, collective bargaining agreement provisions,
and company practices. However, if the employee was reinstated to work during the pendency of
the appeal, then the employee is entitled to the compensation received for actual services
rendered without need of refund.
x x x x
It has thus been advanced that there is no point in releasing the wages to petitioners since their
dismissal was found to be valid, and to do so would constitute unjust enrichment." (Emphasis,
italics and underscoring in the original; citations omitted.) 32
The Court then stressed that as opposed to the abovementioned Genuino v. National Labor
Relations Commission,33 the social justice principles of labor law outweigh or render inapplicable
the civil law doctrine of unjust enrichment. It then went on to examine the precarious implication
of the "refund doctrine" as enunciated inGenuino, thus:
[T]he "refund doctrine" easily demonstrates how a favorable decision by the Labor Arbiter could
harm, more than help, a dismissed employee. The employee, to make both ends meet, would
necessarily have to use up the salaries received during the pendency of the appeal, only to end
up having to refund the sum in case of a final unfavorable decision. It is mirage of a stop-gap
leading the employee to a risky cliff of insolvency.
Advisably, the sum is better left unspent. It becomes more logical and practical for the employee
to refuse payroll reinstament and simply find work elsewhere in the interim, if any is available.
Notably, the option of payroll reinstatement belongs to the employer, even if the employee is
able and raring to return to work. Prior to Genuino,it is unthinkable for one to refuse payroll
reinstatement. In the face of the grim possibilities, the rise of concerned employees declining
payroll reinstatement is on the horizon.
Further, the Genuino ruling not only disregards the social justice principles behind the rule, but
also institutes a scheme unduly favorable to management. Under such scheme, the salaries
dispensed pendente lite merely serve as a bond posted in installment by the employer. For in the
event of a reversal of the Labor Arbiters decision ordering reinstatement, the employer gets
back the same amount without having to spend ordinarily for bond premiums. This circumvents,
if not directly contradicts, the proscription that the "posting of a bond [even a cash bond] by the
employer shall not stay the execution for reinstatement. [Underscoring in the original] 34
In view of this, the Court held this stance in Genuino as a stray posture and realigned the proper
course of the prevailing doctrine on reinstatement pending appeal vis--vis the effect of a
reversal on appeal, that is, even if the order of reinstatement of the Labor Arbiter is reversed on
appeal, it is obligatory on the part of the employer to reinstate and pay the wages of the
dismissed employee during the period of appeal until reversal by the higher court or tribunal. It
likewise settled the view that the Labor Arbiters order of reinstatement is immediately executory
and the employer has to either re-admit them to work under the same terms and conditions
prevailing prior to their dismissal, or to reinstate them in the payroll, and that failing to exercise
the options in the alternative, employer must pay the employees salaries.
The discussion, however, did not stop there. The court went on to declare that after the Labor
Arbiters decision is reversed by a higher tribunal, the employee may be barred from

collecting the accrued wages, if it is shown that the delay in enforcing the
reinstatement pending appeal was without fault on the part of the employer. It then
provided for the two-fold test in determining whether an employee is barred from recovering his
accrued wages, to wit: (1) there must be actual delay or that the order of reinstatement pending
appeal was not executed prior to its reversal; and (2) the delay must not be due to the
employers unjustified act or omission. If the delay is due to the employers unjustified refusal,
the employer may still be required to pay the salaries notwithstanding the reversal of the Labor
Arbiters Decision. In Garcia, after it had been established that there was clearly a delay in the
execution of the reinstatement order, the court proceeded to ascertain whether same was due to
PALs unjustified act or omission. In so doing, it upheld the CAs finding that the peculiar
predicament of a corporate rehabilitation rendered it impossible for PAL, under the
circumstances, to exercise its option under Article 223 of the Labor Code. The suspension of
claims dictated by rehabilitation procedure therefore constitutes a justification for PALs failure to
exercise the alternative options of actual reinstatement or payroll reinstatement. Because of this,
the Court held that PALs obligation to pay the salaries pending appeal, as the normal effect of
the non-exercise of the options, did not attach. Simply put, petitioners cannot anymore collect
their accrued salaries during the period between the Labor Arbiters order of reinstatement
pending appeal and the NLRC Resolution overturning that of the Labor Arbiter because PALs
failure to actually reinstate them or effect payroll reinstatement was justified by the latters
situation of being under corporate rehabilitation.
Application of the Two-Fold Test to the present case
As previously mentioned, the vital question that needs to be answered in the case at bar is: Can
respondents collect their accrued salaries for the period between the Labor Arbiters order of
reinstatement pending appeal and the NLRC Resolution overturning that of the Labor Arbiter? If
in the affirmative, the assailed CA Decision and Resolution which affirmed the June 3, 2004 Order
of Labor Arbiter Castillon denying the Motion to Quash Writ of Execution and ordering the breakopen of petitioners premises as well as the issuance of the subject Writ of Execution itself, have
to be upheld. Otherwise, they need to be set aside as what petitioner would want us to do.
To come up with the answer to said question, we shall apply the two-fold test used in Garcia.
Was there an actual delay or was the order of reinstatement pending appeal executed prior to its
reversal? As can be recalled, Labor Arbiter Gan issued his Decision ordering respondents
reinstatement on December 21, 2001, copy of which was allegedly received by petitioner on
February 21, 2002.35 On March 4, 2002, petitioner appealed said decision to the NLRC. A few
days later or on March 11, 2002, respondents filed an Ex-Parte Motion for Issuance of Writ of
Execution relative to the implementation of the reinstatement aspect of the decision. 36 On April
22, 2002, a Writ of Execution was issued by Labor Arbiter Gan. However, until the issuance of the
September 5, 2002 NLRC Resolution overturning Labor Arbiter Gans Decision, petitioner still
failed to reinstate respondents or effect payroll reinstatement in accordance with Article 223 of
the Labor Code. This was what actually prompted respondents to file an Ex-Parte Motion to Set
Case for Conference with Motion wherein they also prayed for the issuance of a computation of
the award of backwages and Alias Writ of Execution for its enforcement. It cannot therefore be
denied that there was an actual delay in the execution of the reinstatement aspect of the
Decision of Labor Arbiter Gan prior to the issuance of the NLRC Resolution overturning the same.
Now, the next question is: Was the delay not due to the employers unjustified act or
omission? Unlike in Garciawhere PAL, as the employer, was then under corporate rehabilitation,
Islriz Trading here did not undergo rehabilitation or was under any analogous situation which
would justify petitioners non-exercise of the options provided under Article 223 of the Labor
Code. Notably, what petitioner gave as reason in not immediately effecting reinstatement after
he was served with the Writ of Execution dated April 22, 2002 was that he would first refer the
matter to his counsel as he could not effectively act on the order of execution without the latters

advice.37 He gave his word that upon conferment with his lawyer, he will inform the Office of the
Labor Arbiter of his action on the writ. Petitioner, however, without any satisfactory reason, failed
to fulfill this promise and respondents remained to be not reinstated until the NLRC resolved
petitioners appeal. Evidently, the delay in the execution of respondents reinstatement was due
to petitioners unjustified refusal to effect the same.
Hence, the conclusion is that respondents have the right to collect their accrued salaries during
the period between the Labor Arbiters Decision ordering their reinstatement pending appeal and
the NLRC Resolution overturning the same because petitioners failure to reinstate them either
actually or through payroll was due to petitioners unjustified refusal to effect reinstatement. In
order to enforce this, Labor Arbiter Castillon thus correctly issued the Writ of Execution dated
March 9, 2004 as well as the Order dated June 3, 2004 denying petitioners Motion to Quash Writ
of Execution and granting respondents Urgent Motion for Issuance of Break-Open Order.
Consequently, we find no error on the part of the CA in upholding these issuances and in
dismissing the petition for certiorari before it.
Having settled this, we find it unnecessary to discuss further the issues raised by petitioner
except the one with respect to the computation of respondents accrued salaries.
Correctness of the Computation of Respondents Accrued Salaries
Petitioner contends that respondents accrued salaries in the total amount of P1,110,665.60 have
no factual and legal bases. This is because of his obstinate belief that the NLRCs reversal of
Labor Arbiter Gans Decision has effectively removed the basis for such award.
Although we do not agree with petitioners line of reasoning, we, however, find incorrect the
computation made by Fiscal Examiner Trinchera.
In Kimberly Clark (Phils.), Inc., v. Facundo,38 we held that:
[T]he Labor Arbiters order of reinstatement was immediately executory. After receipt of the
Labor Arbiters decision ordering private respondents reinstatement, petitioner has to either readmit them to work under the same terms and conditions prevailing prior to their dismissal, or to
reinstate them in the payroll. Failing to exercise the options in the alternative, petitioner
must pay private respondents salaries which automatically accrued from notice of
the Labor Arbiters order of reinstatement until its ultimate reversal of the NLRC.
xxxx
x x x [S]ince private respondents reinstatement pending appeal was effective only
until its reversal by the NLRC on April 28, 1999, they are no longer entitled to salaries from
May 1, 1999 to March 15, 2001, as ordered by the Labor Arbiter. (Emphasis supplied)
To clarify, respondents are entitled to their accrued salaries only from the time petitioner
received a copy of Labor Arbiter Gans Decision declaring respondents termination illegal and
ordering their reinstatement up to the date of the NLRC Resolution overturning that of the Labor
Arbiter. This is because it is only during said period that respondents are deemed to have been
illegally dismissed and are entitled to reinstatement pursuant to Labor Arbiter Gans Decision
which was the one in effect at that time. Beyond that period, the NLRC Resolution declaring that
there was no illegal dismissal is already the one prevailing. From such point, respondents
salaries did not accrue not only because there is no more illegal dismissal to speak of but also
because respondents have not yet been actually reinstated and have not rendered services to
petitioner.
Fiscal Examiner Trincheras computation of respondents accrued salaries covered the period

January 1, 2002 to January 30, 2004. As there was no showing when petitioner actually received
a copy of Labor Arbiter Gans decision except for petitioners self-serving claim that he received
the same on February 21, 2002,39 we are at a loss as to how Fiscal Examiner Trinchera came up
with January 1, 2002 as the reckoning point for computing respondents accrued wages. We
likewise wonder why it covered the period up to January 30, 2004 when on September 5, 2002,
the NLRC already promulgated its Resolution reversing that of the Labor Arbiter. Hence, we deem
it proper to remand the records of this case to the Labor Arbiter for the correct computation of
respondents accrued wages which shall commence from petitioners date of receipt of the Labor
Arbiters Decision ordering reinstatement up to the date of the NLRC Resolution reversing the
same. Considering, however, that petitioners levied properties have already been awarded to
respondents and as alleged by the latter, have also already been sold to third persons,
respondents are ordered to make the proper restitution to petitioner for whatever excess amount
received by them based on the correct computation.
As a final note, since it appears that petitioner still failed to reinstate respondents pursuant to
the final and executory Resolution of the NLRC, respondents proper recourse now is to move for
the execution of the same. It is worthy to note that Labor Arbiter Castillon stated in her
questioned Order of June 3, 2004 that the Writ of Execution she issued is for the sole purpose of
enforcing the wages accruing to respondents by reason of Labor Arbiter Gans order of
reinstatement. Indeed, the last paragraph of said writ provides only for the enforcement of said
monetary award and nothing on reinstatement, viz:
NOW THEREFORE, you are commanded to proceed to the premises of respondents Islriz
Trading/Victor Hugo C. Lu located at Brgy. Luciano Trece Martires[,] Cavite City or wherever it may
be found to collect the amount of One Million One Hundred Eleven Thousand Seven Hundred
Sixty One pesos & 60/100 (P1,111,761.60) inclusive [of]P1,096.00 as execution fees and turn
over the said amount to the NLRC Cashier for further disposition. In case you fail to collect the
said amount in cash, you are directed to cause the satisfaction of the same out of respondents
chattels, movable/immovable properties not exempt from execution. You are directed to return
these Writ One Hundred Eighty (180) days from receipt hereof, together with the report of
compliance.
SO ORDERED.40
WHEREFORE, the Petition for Review on Certiorari is DENIED. The assailed March 18, 2005
Decision and June 16, 2005 Resolution of the Court of Appeals in CA-G.R. SP No. 84744 are
AFFIRMED. The records of this case are ordered REMANDED to the Office of the Labor Arbiter for
the correct computation of respondents accrued salaries covering the date of petitioners receipt
of the December 21, 2001 Decision of the Labor Arbiter up to the issuance of the NLRC
Resolution on September 5, 2002. Respondents are ordered to make the proper restitution to
petitioner for whatever excess amount which may be
determined to have been received by them based on the correct computation.
SO ORDERED.
G.R. No. 196830

February 29, 2012

CESAR V. GARCIA, CARLOS RAZON, ALBERTO DE GUZMAN, TOMAS RAZON, OMER E.


PALO, RIZALDE VALENCIA, ALLAN BASA, JESSIE GARCIA,JUANITO PARAS, ALEJANDRO
ORAG, ROMMEL PANGAN, RUEL SOLIMAN, and CENEN CANLAPAN, represented by
SERENO, and CESAR V. GARCIA, Petitioners,
vs.
KJ COMMERCIAL and REYNALDO QUE, Respondents.

DECISION
CARPIO, J.:
The Case
This is a petition1 for review on certiorari under Rule 45 of the Rules of Court. The petition
challenges the 29 April 2011 Decision2 of the Court of Appeals in CA-G.R. SP No. 115851,
affirming the 8 February3 and 25 June4 2010 Resolutions of the National Labor Relations
Commission (NLRC) in NLRC-LAC-No. 12-004061-08. The NLRC set aside the 30 October 2008
Decision5 of the Labor Arbiter in NLRC Case No. RAB-III-02-9779-06.
The Facts
Respondent KJ Commercial is a sole proprietorship. It owns trucks and engages in the business of
distributing cement products. On different dates, KJ Commercial employed as truck drivers and
truck helpers petitioners Cesar V. Garcia, Carlos Razon, Alberto De Guzman, Tomas Razon, Omer
E. Palo, Rizalde Valencia, Allan Basa, Jessie Garcia, Juanito Paras, Alejandro Orag, Rommel
Pangan, Ruel Soliman, and Cenen Canlapan (petitioners).
On 2 January 2006, petitioners demanded for a P40 daily salary increase. To pressure KJ
Commercial to grant their demand, they stopped working and abandoned their trucks at the
Northern Cement Plant Station in Sison, Pangasinan. They also blocked other workers from
reporting to work.
On 3 February 2006, petitioners filed with the Labor Arbiter a complaint 6 for illegal dismissal,
underpayment of salary and non-payment of service incentive leave and thirteenth month pay.
The Labor Arbiters Ruling
In his 30 October 2008 Decision, the Labor Arbiter held that KJ Commercial illegally dismissed
petitioners. The Labor Arbiter held:
After a careful examination and evaluation of the facts and evidences adduced by both parties,
we find valid and cogent reasons to declare that these complainants were illegally dismissed
from their work to be entitled to their separation in lieu of reinstatement equivalent to their
salary for one (1) month for every year of service and backwages from the time that they were
terminated on January 2, 2006 up to the date of this Decision.
We carefully examined the defense set up by the respondents that these complainants were not
terminated from their employment but were the one [sic] who abandoned their work by staging
strike and refused to perform their work as drivers of the trucks owned by the respondents on
January 2, 2006, vis--vis, he [sic] allegations and claims of the complainants that when they
asked for an increase of their salary for P40.00, they were illegally dismissed from their
employment without due process, and we gave more credence and value to the allegations of
the complainants that they were illegally dismissed from their employment without due process
and did not abandoned [sic] their work as the respondents wanted to project. We examined the
narration of facts of the respondents in their Position Paper and Supplemental Position Paper and
we concluded that these complainants were actually terminated on January 2, 2006 and did not
abandoned [sic] their jobs as claimed by the respondents when the respondents, in their Position
Paper, admitted that their cement plant was shutdown on January 3, 2006 and when it resumed
its operation on January 7, 2006, they ordered the other drivers to get the trucks in order that
the hauling of the cements will not incur further delay and that their business will not be
prejudiced.

Granting for the sake of discussion that indeed these complainants abandoned their work on
January 2, 2006, why then that [sic] the cement plant was shutdown on January 3, 2006 and
resumed operation on January 7, 2006, when there are fifty (50) drivers of the respondents and
only thirteen (13) of them were allegedly stopped from working. Further, if these complainants
actually abandoned their work, as claimed by the respondents, they miserably failed to show by
substantial evidence that these complainants deliberately and unjustifiably refused to resume
their employment.
xxxx
The acts of these complainants in filing this instant case a month after they were terminated
from their work is more than sufficient evidence to prove and show that they do not have the
intention of abandoning their work. While we acknowledged the offer of the respondents for
these complainants to return back to work during the mandatory conference, the fact that these
complainants were illegally terminated and prevented from performing their work as truck
drivers of the respondents and that there was no compliance with the substantive and procedural
due process of terminating an employee, their subsequent offer to return to work will not cure
the defect that there was already illegal dismissal committed against these complainants. 7
KJ Commercial appealed to the NLRC. It filed before the NLRC a motion to reduce bond and
posted a P50,000 cash bond.
The NLRCs Ruling
In its 9 March 2009 Decision,8 the NLRC dismissed the appeal. The NLRC held:
Filed with respondents-appellants Appeal Memorandum is a Motion to Reduce Appeal Bond and
a cash bond ofP50,000.00 only. x x x
We find no merit on [sic] the respondents-appellants Motion. It must be stressed that under
Section 6, Rule VI of the 2005 Revised Rules of this Commission, a motion to reduce bond shall
only be entertained when the following requisites concur:
1. The motion is founded on meritorious ground; and
2. A bond of reasonable amount in relation to the monetary award is posted.
We note that while respondents-appellants claim that they could not possibly produce enough
cash for the required appeal bond, they are unwilling to at least put up a property to secure a
surety bond. Understandably, no surety agency would normally accept a surety obligation
involving a substantial amount without a guarantee that it would be indemnified in case the
surety bond posted is forfeited in favor of a judgment creditor. Respondents-appellants
insinuation that no surety company can finish the processing of a surety bond in ten days time is
not worthy of belief as it is contrary to ordinary business experience. What is obvious is that
respondents-appellants are not willing to accept the usual conditions of a surety agreement that
is why no surety bond could be processed. The reduction of the required bond is not a matter of
right o[n] the part of the movant but lies within the sound discretion of the NLRC upon showing of
meritorious grounds x x x. In this case, we find that the instant motion is not founded on a
meritorious ground. x x x Moreover, we note that the P50,000.00 cash bond posted by
respondents-appellants which represents less than two (2) percent of the monetary award is
dismally disproportionate to the monetary award of P2,612,930.00 and that the amount of bond
posted by respondents-appellants is not reasonable in relation to the monetary award. x x x A
motion to reduce bond that does not satisfy the conditions required under NLRC Rules shall not
stop the running of the period to perfect an appeal x x x.

Conversely, respondents-appellants failed to perfect an appeal for failure to post the required
bond.9
KJ Commercial filed a motion10 for reconsideration and posted a P2,562,930 surety bond. In its 8
February 2010 Resolution, the NLRC granted the motion and set aside the Labor Arbiters 30
October 2008 Decision. The NLRC held:
x x x [T]his Commission opts to resolve and grant the Motion for Reconsideration filed by
respondent-appellant seeking for reconsideration of Our Decision promulgated on March 9, 2009
dismissing the Appeal for non-perfection, there being an honest effort by the appellants to
comply with putting up the full amount of the required appeal bond. Moreover, considering the
merit of the appeal, by granting the motion for reconsideration, the paramount interest of justice
is better served in the resolution of this case.
xxxx
Going over the record of the case, this Commission noted that in respondents Supplemental
Position Paper, in denying complainants imputation of illegal dismissal, respondents
categorically alleged "..[.] that complainants were not illegally dismissed but on January 2, 2006,
they abandoned their work by means of []work stoppage[] or they engaged in an []illegal
strike[] when they demanded for a higher rate..[.] that while their respective assigned trucks
were all in the cement plant ready to be loaded, complainants paralyzed respondents hauling or
trucking operation by staging a work stoppage at the premises of KJ Commercial compound by
further blocking their co-drivers not to report for work." We have observed that despite these
damaging allegations, complainants never bothered to dispute nor contradicted these material
allegations. Complainants silence on these material allegations consequently lends support to
respondents-appellants[] contention that complainants were never dismissed at all but had
stopped driving the hauler truck assigned to each of them when their demand for salary increase
in the amount they wish was not granted by respondents-appellants.
Moreover, contrary to the findings of the Labor Arbiter, the purported shutdown of the cement
plant being cited by the Labor Arbiter a quo as the principal cause of complainants purported
dismissal cannot be attributed to respondents because it was never established by evidence that
respondents were the owner [sic] of the cement plant where complainants as truck drivers were
hauling cargoes of cement with trucks owned by respondents whose business is confined to that
of a cement distributor and cargo truck hauler. Based on the undisputed account of respondentsappellants, it appears that the cement plant was compelled to shut down because the hauling or
trucking operation was paralyzed due to complainants resort to work stoppage by refusing to
drive their hauler trucks despite the order of the management for them to get the trucks which
blockaded the cement plant.
Furthermore, a perusal of the complainants position paper and amended position paper failed to
allege the overt acts showing how they were in fact dismissed on 02 January 2006. The
complainants had not even alleged that they were specifically told that they were dismissed after
they demanded for a salary increase or any statement to that effect. Neither had they alleged
that they were prevented from reporting for work. This only shows there was never a dismissal to
begin with.
xxxx
We cannot affirm the Labor Arbiters conclusions absent showing a fact of termination or
circumstances under which the dismissal was effected. Though only substantial evidence is
required in proceedings before the Labor Arbiter to support a litigants claim, the same still
requires evidence separate and different, and something which supports the allegations
affirmatively made. The complainants claim that they were dismissed on 02 January 2006,

absent proof thereof or any supporting evidence thereto is at best self serving. 11
Petitioners filed a motion for reconsideration. In its 25 June 2010 Resolution, the NLRC denied the
motion for lack of merit. The NLRC held:
We stress that it is within the power and discretion of this Commission to grant or deny a motion
to reduce appeal bond. Having earlier denied the motion to reduce bond of the respondentsappellants, this Commission is not precluded from reconsidering its earlier Decision on second
look when it finds meritorious ground to serve the ends of justice. Settled is the norm in the
matter of appeal bonds that letter-perfect rules must yield to the broader interest of substantial
justice x x x. In this case, the Decision of the Labor Arbiter had not really become final and
executory as respondents timely filed a Memorandum of Appeal with a Motion to Reduce Appeal
Bond and a partial appeal bond. Although the respondents[] appeal was dismissed, in the earlier
decision, the same Decision was later reconsidered on considerations that the Labor Arbiter
committed palpable errors in his findings and the monetary awards to the appellees are secured
by a partial bond and then later, by an appeal bond for the full amount of the monetary awards. 12
Petitioners filed with the Court of Appeals a petition 13 for certiorari under Rule 65 of the Rules of
Court.
The Court of Appeals Ruling
In its 29 April 2011 Decision, the Court of Appeals dismissed the petition and affirmed the NLRCs
8 February and 25 June 2010 Resolutions. The Court of Appeals held:
After scrupulously examining the contrasting positions of the parties, and the conflicting
decisions of the labor tribunals, We find the records of the case bereft of evidence to substantiate
the conclusions reached by the Labor Arbiter that petitioners were illegally dismissed from
employment.
While petitioners vehemently argue that they were unlawfully separated from work, records are
devoid of evidence to show the fact of dismissal. Neither was there any evidence offered by
petitioners to prove that they were no longer allowed to perform their duties as truck drivers or
they were prevented from entering KJ Commercials premises, except for their empty and general
allegations that they were illegally dismissed from employment. Such bare and sweeping
statement contains nothing but empty imputation of a fact that could hardly be given any
evidentiary weight by this Court. At the very least, petitioners should have detailed or elaborated
the circumstances surrounding their dismissal or substantiate their claims by submitting
evidence to butress such contention. Without a doubt, petitioners allegation of illegal dismissal
has no leg to stand on. Accordingly, they should not expect this Court to swallow their
asseveration hook, line and sinker in the absence of supporting proof. Allegation that one was
illegally dismissed from work is not a magic word that once invoked will automatically sway this
Court to rule in favor of the party invoking it. There must first be substantial evidence to prove
that indeed there was illegal dismissal before the employer bears the burden to prove the
contrary.14
Hence, the present petition.
The Issue
Petitioners raise as issue that the Labor Arbiters 30 October 2008 Decision became final and
executory; thus, the NLRCs 8 February and 25 June 2010 Resolutions and the Court of Appeals
29 April 2011 Decision are void for lack of jurisdiction. Petitioners claim that KJ Commercial failed
to perfect an appeal since the motion to reduce bond did not stop the running of the period to
appeal.

The Courts Ruling


The petition is unmeritorious.
When petitioners filed with the Court of Appeals a petition for certiorari, they did not raise as
issue that the Labor Arbiters 30 October 2008 Decision had become final and executory. They
enumerated the issues in their petition:
GROUNDS FOR THE PETITION
I.
THE NLRC COMMITTED GRAVE ABUSE OF DISCRETION TANTAMOUNT TO LACK OR EXCESS
OF JURISDICTION WHEN IT REVERSED THE DECISION OF THE LABOR ARBITER A QUO AND
PRONOUNCED THAT THE PETITIONERS WERE NOT ILLEGALLY DISMISSED DESPITE CLEAR
AND SUBSTANTIAL EVIDENCE ON THE RECORDS SHOWING THAT COMPLAINANTS WERE
REGULAR EMPLOYEES TO BE ENTITLED TO SECURITY OF TENURE AND WERE ILLEGALLY
DISMISSED FROM THEIR EMPLOYMENT.
II.
THE NLRC HAS COMMITTED GRAVE ABUSE OF DISCRETION TANTAMOUNT TO LACK OR
EXCESS OF JURISDICTION WHEN IT GIVE [sic] MUCH WEIGHT TO PRIVATE RESPONDENTS[]
BASELESS ALLEGATIONS IN ITS [sic] MOTION FOR RECONSIDERATION WHEN IT [sic]
ALLEGED THAT COMPLAINANTS HAD ABANDONED THEIR WORK BY MEANS OF "WORK
STOPPAGE" OR THEY ENGAGED IN AN "ILLEGAL STRIKE" WHEN THEY DEMANDED FOR A
HIGHER RATE.
III.
THE NLRC GRAVELY ERRED TANTAMOUNT TO LACK OR EXCESS OF JURISDICTION WHEN IT
CONCLUDED THAT "COMPLAINANTS PARALYZED HAULING OR TRUCKING OPERATION BY
STAGING A WORK STOPPAGE AT THE PREMISES OF KJ COMMERCIAL COMPOUND BY
FURTHER BLOCKING THEIR CO-DRIVERS NOT TO REPORT FOR WORK" WITHOUT A SINGLE
EVIDENCE TO SUPPORT SUCH ALLEGATIONS OF PRIVATE RESPONDENTS.
IV.
THE NLRC GRAVELY ERRED WHEN IT CONCLUDED THAT THE PRINCIPAL CAUSE OF
COMPLAINANTS DISMISSAL WAS DUE TO THE PURPORTED SHUTDOWN OF THE CEMENT
PLANT CITED BY THE LABOR ARBITER IN HIS DECISION. 15
Accordingly, the Court of Appeals limited itself to the resolution of the enumerated issues. In its
29 April 2011 Decision, the Court of Appeals held:
Hence, petitioners seek recourse before this Court via this Petition for Certiorari challenging the
NLRC Resolutions and raising the following issues:
I.
THE NLRC COMMITTED GRAVE ABUSE OF DISCRETION TANTAMOUNT TO LACK OR EXCESS
OF JURISDICTION WHEN IT REVERSED THE DECISION OF THE LABOR ARBITER A QUO AND
PRONOUNCED THAT PETITIONERS WERE NOT ILLEGALLY DISMISSED DESPITE CLEAR AND
SUBSTANTIAL EVIDENCE ON THE RECORDS SHOWING THAT PETITIONERS WERE REGULAR

EMPLOYEES TO BE ENTITLED TO SECURITY OF TENURE AND WERE ILLEGALLY DISMISSED


FROM THEIR EMPLOYMENT.
II.
THE NLRC HAS COMMITTED GRAVE ABUSE OF DISCRETION TANTAMOUNT TO LACK OR
EXCESS OF JURISDICTION WHEN IT GAVE MUCH WEIGHT TO PRIVATE RESPONDENTS
BASELESS ALLEGATIONS IN ITS [sic] MOTION FOR RECONSIDERATION WHEN IT [sic]
ALLEGED THAT PETITIONERS HAD ABANDONED THEIR WORK BY MEANS OF "WORK
STOPPAGE" OR THEY ENGAGED IN AN "ILLEGAL STRIKE" WHEN THEY DEMANDED FOR A
HIGHER RATE.
III.
THE NLRC GRAVELY ERRED WHEN IT CONCLUDED THAT "PETITIONERS PARALYZED HAULING
AND TRUCKING OPERATION BY STAGING A WORK STOPPAGE AT THE PREMISES OF KJ
COMMERCIAL COMPOUND BY FURTHER BLOCKING THEIR CO-DRIVERS NOT TO REPORT FOR
WORK" WITHOUT A SINGLE EVIDENCE TO SUPPORT SUCH ALLEGATIONS OF PRIVATE
RESPONDENTS.
IV.
THE NLRC GRAVELY ERRED WHEN IT CONCLUDED THAT THE PRINCIPAL CAUSE OF
PETITIONERS DISMISSAL WAS DUE TO THE PURPORTED SHUTDOWN OF THE CEMENT
PLANT CITED BY THE LABOR ARBITER IN HIS DECISION. 16
Petitoners cannot, for the first time, raise as issue in their petition filed with this Court that the
Labor Arbiters 30 October 2008 Decision had become final and executory. Points of law, theories
and arguments not raised before the Court of Appeals will not be considered by this Court.
Otherwise, KJ Commercial will be denied its right to due process. In Tolosa v. National Labor
Relations Commission,17 the Court held:
Petitioner contends that the labor arbiters monetary award has already reached finality, since
private respondents were not able to file a timely appeal before the NLRC.
This argument cannot be passed upon in this appeal, because it was not raised in the
tribunals a quo. Well-settled is the rule that issues not raised below cannot be raised
for the first time on appeal. Thus, points of law, theories, and arguments not brought
to the attention of the Court of Appeals need not and ordinarily will not be
considered by this Court. Petitioners allegation cannot be accepted by this Court on
its face; to do so would be tantamount to a denial of respondents right to due
process.
Furthermore, whether respondents were able to appeal on time is a question of fact that cannot
be entertained in a petition for review under Rule 45 of the Rules of Court. In general, the
jurisdiction of this Court in cases brought before it from the Court of Appeals is limited to a
review of errors of law allegedly committed by the court a quo.18(Emphasis supplied)
KJ Commercials filing of a motion to reduce bond and delayed posting of the P2,562,930 surety
bond did not render the Labor Arbiters 30 October 2008 Decision final and executory. The Rules
of Procedure of the NLRC allows the filing of a motion to reduce bond subject to two conditions:
(1) there is meritorious ground, and (2) a bond in a reasonable amount is posted. Section 6 of
Article VI states:
No motion to reduce bond shall be entertained except on meritorious grounds and upon the

posting of a bond in a reasonable amount in relation to the monetary award.


The mere filing of the motion to reduce bond without compliance with the requisites in the
preceding paragraph shall not stop the running of the period to perfect an appeal.
The filing of a motion to reduce bond and compliance with the two conditions stop the running of
the period to perfect an appeal. In McBurnie v. Ganzon,19 the Court held:
x x x [T]he bond may be reduced upon motion by the employer, this is subject to the conditions
that (1) the motion to reduce the bond shall be based on meritorious grounds; and (2) a
reasonable amount in relation to the monetary award is posted by the appellant, otherwise the
filing of the motion to reduce bond shall not stop the running of the period to perfect an appeal. 20
The NLRC has full discretion to grant or deny the motion to reduce bond, 21 and it may rule on the
motion beyond the 10-day period within which to perfect an appeal. Obviously, at the time of the
filing of the motion to reduce bond and posting of a bond in a reasonable amount, there is no
assurance whether the appellants motion is indeed based on "meritorious ground" and whether
the bond he or she posted is of a "reasonable amount." Thus, the appellant always runs the risk
of failing to perfect an appeal.
Section 2, Article I of the Rules of Procedure of the NLRC states that, "These Rules shall be
liberally construed to carry out the objectives of the Constitution, the Labor Code of the
Philippines and other relevant legislations, and to assist the parties in obtaining just, expeditious
and inexpensive resolution and settlement of labor disputes." In order to give full effect to the
provisions on motion to reduce bond, the appellant must be allowed to wait for the ruling of the
NLRC on the motion even beyond the 10-day period to perfect an appeal. If the NLRC grants the
motion and rules that there is indeed meritorious ground and that the amount of the bond posted
is reasonable, then the appeal is perfected. If the NLRC denies the motion, the appellant may still
file a motion for reconsideration as provided under Section 15, Rule VII of the Rules. If the NLRC
grants the motion for reconsideration and rules that there is indeed meritorious ground and that
the amount of the bond posted is reasonable, then the appeal is perfected. If the NLRC denies
the motion, then the decision of the labor arbiter becomes final and executory.
In the present case, KJ Commercial filed a motion to reduce bond and posted a P50,000 cash
bond. When the NLRC denied its motion, KJ Commercial filed a motion for reconsideration and
posted the full P2,562,930 surety bond. The NLRC then granted the motion for reconsideration.
In any case, the rule that the filing of a motion to reduce bond shall not stop the running of the
period to perfect an appeal is not absolute. The Court may relax the rule. In Intertranz Container
Lines, Inc. v. Bautista,22 the Court held:
Jurisprudence tells us that in labor cases, an appeal from a decision involving a monetary award
may be perfected only upon the posting of a cash or surety bond. The Court, however, has
relaxed this requirement under certain exceptional circumstances in order to resolve
controversies on their merits. These circumstances include: (1) fundamental consideration of
substantial justice; (2) prevention of miscarriage of justice or of unjust enrichment; and (3)
special circumstances of the case combined with its legal merits, and the amount and the issue
involved.23
In Rosewood Processing, Inc. v. NLRC,24 the Court held:
The perfection of an appeal within the reglementary period and in the manner prescribed by law
is jurisdictional, and noncompliance with such legal requirement is fatal and effectively renders
the judgment final and executory. The Labor Code provides:

ART. 223. Appeal. Decisions, awards or orders of the Labor Arbiter are final and executory
unless appealed to the Commission by any or both parties within ten (10) calendar days from
receipt of such decisions, awards, or orders.
In case of a judgment involving a monetary award, an appeal by the employer may be perfected
only upon the posting of a cash or surety bond issued by a reputable bonding company duly
accredited by the Commission in the amount equivalent to the monetary award in the judgment
appealed from.
Indisputable is the legal doctrine that the appeal of a decision involving a monetary award in
labor cases may be perfected "only upon the posting of a cash or surety bond." The lawmakers
intended the posting of the bond to be an indispensable requirement to perfect an employers
appeal.
However, in a number of cases, this Court has relaxed this requirement in order to bring about
the immediate and appropriate resolution of controversies on the merits. Some of these cases
include: "(a) counsels reliance on the footnote of the notice of the decision of the labor arbiter
that the aggrieved party may appeal within ten (10) working days; (b) fundamental consideration
of substantial justice; (c) prevention of miscarriage of justice or of unjust enrichment, as where
the tardy appeal is from a decision granting separation pay which was already granted in an
earlier final decision; and (d) special circumstances of the case combined with its legal merits or
the amount and the issue involved."
In Quiambao vs. National Labor Relations Commission, this Court ruled that a relaxation of the
appeal bond requirement could be justified by substantial compliance with the rule.
In Globe General Services and Security Agency vs. National Labor Relations Commission, the
Court observed that the NLRC, in actual practice, allows the reduction of the appeal bond upon
motion of the appellant and on meritorious grounds; hence, petitioners in that case should have
filed a motion to reduce the bond within the reglementary period for appeal.
That is the exact situation in the case at bar. Here, petitioner claims to have received the labor
arbiters Decision on April 6, 1993. On April 16, 1993, it filed, together with its memorandum on
appeal and notice of appeal, a motion to reduce the appeal bond accompanied by a surety bond
for fifty thousand pesos issued by Prudential Guarantee and Assurance, Inc. Ignoring petitioners
motion (to reduce bond), Respondent Commission rendered its assailed Resolution dismissing the
appeal due to the late filing of the appeal bond.
The solicitor general argues for the affirmation of the assailed Resolution for the sole reason that
the appeal bond, even if it was filed on time, was defective, as it was not in an amount
"equivalent to the monetary award in the judgment appealed from." The Court disagrees.
We hold that petitioners motion to reduce the bond is a substantial compliance with the Labor
Code. This holding is consistent with the norm that letter-perfect rules must yield to the broader
interest of substantial justice.25
In Ong v. Court of Appeals,26 the Court held that the bond requirement on appeals may be
relaxed when there is substantial compliance with the Rules of Procedure of the NLRC or when
the appellant shows willingness to post a partial bond. The Court held that, "While the bond
requirement on appeals involving monetary awards has been relaxed in certain cases, this can
only be done where there was substantial compliance of the Rules or where the appellants, at
the very least, exhibited willingness to pay by posting a partial bond." 27
In the present case, KJ Commercial showed willingness to post a partial bond.1wphi1 In fact, it
posted a P50,000 cash bond. In Ong, the Court held that, "Petitioner in the said case

substantially complied with the rules by posting a partial surety bond of fifty thousand pesos
issued by Prudential Guarantee and Assurance, Inc. while his motion to reduce appeal bond was
pending before the NLRC."28
Aside from posting a partial bond, KJ Commercial immediately posted the full amount of the bond
when it filed its motion for reconsideration of the NLRCs 9 March 2009 Decision. In Dr. Postigo v.
Philippine Tuberculosis Society, Inc.,29 the Court held:
x x x [T]he respondent immediately submitted a supersedeas bond with its motion for
reconsideration of the NLRC resolution dismissing its appeal. In Ong v. Court of Appeals, we ruled
that the aggrieved party may file the appeal bond within the ten-day reglementary period
following the receipt of the resolution of the NLRC to forestall the finality of such resolution.
Hence, while the appeal of a decision involving a monetary award in labor cases may be
perfected only upon the posting of a cash or surety bond and the posting of the bond is an
indispensable requirement to perfect such an appeal, a relaxation of the appeal bond
requirement could be justified by substantial compliance with the rule.30
WHEREFORE, the Court DENIES the petition and AFFIRMS the 29 April 2011 Decision of the
Court of Appeals in CA-G.R. SP No. 115851.
G.R. No. 152494

September 22, 2004

MARIANO ONG, doing business under the name and style MILESTONE METAL
MANUFACTURING,petitioner,
vs.
THE COURT OF APPEALS, CONRADO DABAC, BERNABE TAYACTAC, MANUEL ABEJUELLA,
LOLITO ABELONG, RONNIE HERRERO, APOLLO PAMIAS, JAIME ONGUTAN, NOEL
ATENDIDO, CARLOS TABBAL, JOEL ATENDIDO, BIENVENIDO EBBER, RENATO ABEJUELLA,
LEONILO ATENDIDO, JR., LODULADO FAA and JAIME LOZADA, respondents.
DECISION
YNARES-SANTIAGO, J.:
This is a petition for review on certiorari assailing the decision 1 of the Court of Appeals in CA-G.R.
SP No. 62129, dated October 10, 2001, which dismissed the petition for certiorari for lack of
merit, as well as the resolution,2dated March 7, 2002, denying the motion for reconsideration.
Petitioner is the sole proprietor of Milestone Metal Manufacturing (Milestone), which
manufactures, among others, wearing apparels, belts, and umbrellas. 3 Sometime in May 1998,
the business suffered very low sales and productivity because of the economic crisis in the
country. Hence, it adopted a rotation scheme by reducing the workdays of its employees to three
days a week or less for an indefinite period. 4
On separate dates, the 15 respondents filed before the National Labor Relations Commission
(NLRC) complaints for illegal dismissal, underpayment of wages, non-payment of overtime pay,
holiday pay, service incentive leave pay, 13th month pay, damages, and attorneys fees against
petitioner. These were consolidated and assigned to Labor Arbiter Manuel Manasala.
Petitioner claimed that 9 of the 15 respondents were not employees of Milestone but of Protone
Industrial Corporation which, however, stopped its operation due to business losses. Further, he
claims that respondents Manuel Abuela, Lolita Abelong, Ronnie Herrero, Carlos Tabbal, Conrado
Dabac, and Lodualdo Faa were not dismissed from employment; rather, they refused to work
after the rotation scheme was adopted. Anent their monetary claims, petitioner presented
documents showing that he paid respondents minimum wage, 13th month pay, holiday pay, and

contributions to the SSS, Medicare, and Pag-Ibig Funds. 5


On November 25, 1999, the Labor Arbiter rendered a decision awarding to the respondents the
aggregate amount of P1,111,200.40 representing their wage differential, holiday pay, service
incentive leave pay and 13th month pay, plus 10% thereof as attorneys fees. Further, petitioner
was ordered to pay the respondents separation pay equivalent to month salary for every year
of service due to the indefiniteness of the rotation scheme and strained relations caused by the
filing of the complaints.6
Petitioner filed with the NLRC a notice of appeal with a memorandum of appeal and paid the
docket fees therefor. However, instead of posting the required cash or surety bond, he filed a
motion to reduce the appeal bond. The NLRC, in a resolution dated April 28, 2000, denied the
motion to reduce bond and dismissed the appeal for failure to post cash or surety bond within
the reglementary period.7 Petitioners motion for reconsideration was likewise denied. 8
Petitioner filed a petition for certiorari with the Court of Appeals alleging that the NLRC acted
with grave abuse of discretion in dismissing the appeal for non-perfection of appeal although a
motion to reduce appeal bond was seasonably filed. However, the petition was dismissed and
thereafter the motion for reconsideration was likewise dismissed for lack of merit. 9
Hence, this petition for review on the following assignment of errors:
I.
PUBLIC RESPONDENT COURT OF APPEALS COMMITTED SERIOUS ERROR AND GRAVE ABUSE
OF DISCRETION IN AFFIRMING THE DECISION OF THE NLRC DISMISSING THE APPEAL OF
PETITIONERS (sic) FOR NON-PERFECTION WHEN A MOTION TO REDUCE APPEAL BOND WAS
SEASONABLY FILED WHICH IS ALLOWED BY THE RULES OF PROCEDURE OF THE NLRC.
II.
PUBLIC RESPONDENT COURT OF APPEALS COMMITTED SERIOUS ERROR AND GRAVE ABUSE
OF DISCRETION IN AFFIRMING THE DISMISSAL BY NLRC OF PETITIONERS APPEAL AND IN
EFFECT UPHOLDING THE ERRONEOUS DECISION OF THE LABOR ARBITER AWARDING
SEPARATION PAY TO PRIVATE RESPONDENTS DESPITE THE FINDING THAT THERE WAS NO
ILLEGAL DISMISSAL MADE BY MILESTONE.
III.
PUBLIC RESPONDENT COURT OF APPEALS COMMITTED SERIOUS ERROR IN AFFIRMING THE
NLRCS DISMISSAL OF PETITIONERS APPEAL AND IN EFFECT UPHOLDING THE ERRONEOUS
DECISION OF THE LABOR ARBITER THAT PETITIONER MILESTONE HAS VIOLATED THE
MINIMUM WAGE LAW AND THAT PRIVATE RESPONDENTS WERE UNDERPAID.
IV.
PUBLIC RESPONDENT COURT OF APPEALS COMMITTED SERIOUS ERROR IN AFFIRMING THE
NLRCS DISMISSAL OF PETITIONERS APPEAL AND IN EFFECT UPHOLDING THE ERRONEOUS
DECISION OF THE LABOR ARBITER THAT PETITIONER MILESTONE HAS NOT PAID PRIVATE
RESPONDENTS THEIR SERVICE INCENTIVE LEAVE PAY, 13th MONTH PAY, AND HOLIDAY PAY.
V.
PUBLIC RESPONDENT COURT OF APPEALS COMMITTED SERIOUS ERROR IN AFFIRMING THE

NLRCS DISMISSAL OF PETITIONERS APPEAL AND IN EFFECT UPHOLDING THE ERRONEOUS


DECISION OF THE LABOR ARBITER THAT THE EVIDENCE SUBMITTED BY PRIVATE
RESPONDENTS IN SUPPORT OF THEIR CLAIMS ARE NOT SELF-SERVING, IRRELEVANT AND
IMMATERIAL TO THE FACTS AND LAW IN ISSUE IN THIS CASE. 10
The petition lacks merit.
Time and again it has been held that the right to appeal is not a natural right or a part of due
process, it is merely a statutory privilege, and may be exercised only in the manner and in
accordance with the provisions of law. The party who seeks to avail of the same must comply
with the requirements of the rules. Failing to do so, the right to appeal is lost. 11
Article 223 of the Labor Code, as amended, sets forth the rules on appeal from the Labor
Arbiters monetary award:
ART. 223. Appeal. Decisions, awards, or orders of the Labor Arbiter are final and
executory unless appealed to the Commission by any or both parties within ten (10)
calendar days from receipt of such decisions, awards, or orders. x x x.
xxx

xxx

xxx

In case of a judgment involving a monetary award, an appeal by the employer may be


perfected onlyupon the posting of a cash or surety bond issued by a reputable bonding
company duly accredited by the Commission in the amount equivalent to the monetary
award in the judgment appealed from. (Emphasis ours)
The pertinent provisions of Rule VI of the New Rules of Procedure of the NLRC, 12 which were in
effect when petitioner filed his appeal, provide:
Section 1. Periods of Appeal. Decisions, awards or orders of the Labor Arbiter and the
POEA Administrator shall be final and executory unless appealed to the Commission by
any or both parties within ten (10) calendar days from receipt of such decisions, awards or
orders of the Labor Arbiter x x x.
xxx

xxx

xxx

Section 3. Requisites for Perfection of Appeal. (a) The appeal shall be filed within the
reglementary period as provided in Section 1 of this Rule; shall be under oath with proof of
payment of the required appeal fee and the posting of a cash or surety bond as provided
in Section 5 of this Rule; shall be accompanied by a memorandum of appeal which shall
state the grounds relied upon and the arguments in support thereof; the relief prayed for;
and a statement of the date when the appellant received the appealed decision, order or
award and proof of service on the other party of such appeal.
A mere notice of appeal without complying with the other requisite aforestated shall not
stop the running of the period for perfecting an appeal.
xxx

xxx

xxx

Section 6. Bond. In case the decision of the Labor Arbiter, the Regional Director or his
duly authorized Hearing Officer involves a monetary award, an appeal by the employer
shall be perfected only upon the posting of a cash or surety bond, which shall be
in effect until final disposition of the case, issued by a reputable bonding company duly
accredited by the Commission or the Supreme Court in an amount equivalent to the
monetary award, exclusive of damages and attorneys fees.

The employer, his counsel, as well as the bonding company, shall submit a joint declaration
under oath attesting that the surety bond posted is genuine.
The Commission may, in justifiable cases and upon Motion of the Appellant, reduce the
amount of the bond. The filing of the motion to reduce bond shall not stop the running of
the period to perfect appeal. (Emphasis ours)
In the case at bar, petitioner received the decision of the Labor Arbiter on January 6, 2000. He
filed his notice of appeal with memorandum of appeal and paid the corresponding appeal fees on
January 17, 2000, the last day of filing the appeal. However, in lieu of the required cash or surety
bond, he filed a motion to reduce bond alleging that the amount of P1,427,802,04 as bond is
"unjustified and prohibitive" and prayed that the same be reduced to a "reasonable level." The
NLRC denied the motion and consequently dismissed the appeal for non-perfection. Petitioner
now contends that he was deprived of the chance to post bond because the NLRC took 102 days
to decide his motion.
Petitioners argument is unavailing.
While, Section 6, Rule VI of the NLRCs New Rules of Procedure allows the Commission to reduce
the amount of the bond, the exercise of the authority is not a matter of right on the part of the
movant but lies within the sound discretion of the NLRC upon showing of meritorious
grounds.13 Petitioners motion reads:
1. The appeal bond which respondents-appellants will post in this case is P1,427,802.04.
They are precisely questioning this amount as being unjustified and prohibitive under the
premises.
2. The amount of this appeal bond must be reduced to a reasonable level by this
Honorable Office.
WHEREFORE, in view thereof, it is respectfully prayed of this Honorable Office that the
appeal bond of P1,427,802.04 be reduced. 14
After careful scrutiny of the motion to reduce appeal bond, we agree with the Court of Appeals
that the NLRC did not act with grave abuse of discretion when it denied petitioners motion for
the same failed to either elucidate why the amount of the bond was "unjustified and prohibitive"
or to indicate what would be a "reasonable level."15
In Calabash Garments, Inc. v. NLRC,16 it was held that "a substantial monetary award, even if it
runs into millions, does not necessarily give the employer-appellant a "meritorious case" and
does not automatically warrant a reduction of the appeal bond."
Even granting arguendo that petitioner has meritorious grounds to reduce the appeal bond, the
result would have been the same since he failed to post cash or surety bond within the
prescribed period.
The above-cited provisions explicitly provide that an appeal from the Labor Arbiter to the NLRC
must be perfected within ten calendar days from receipt of such decisions, awards or orders of
the Labor Arbiter. In a judgment involving a monetary award, the appeal shall be perfected only
upon (1) proof of payment of the required appeal fee; (2) posting of a cash or surety bond issued
by a reputable bonding company; and (3) filing of a memorandum of appeal. A mere notice of
appeal without complying with the other requisites mentioned shall not stop the running of the
period for perfection of appeal.17 The posting of cash or surety bond is not only mandatory but
jurisdictional as well, and non-compliance therewith is fatal and has the effect of rendering the
judgment final and executory.18This requirement is intended to discourage employers from using

the appeal to delay, or even evade, their obligation to satisfy their employees just and lawful
claims.19
The intention of the lawmakers to make the bond an indispensable requisite for the perfection of
an appeal by the employer is underscored by the provision that an appeal by the employer may
be perfected only upon the posting of a cash or surety bond. The word "only" makes it perfectly
clear that the lawmakers intended the posting of a cash or surety bond by the employer to be
the exclusive means by which an employers appeal may be perfected. 20
The fact that the NLRC took 102 days to resolve the motion will not help petitioners case. The
NLRC Rules clearly provide that "the filing of the motion to reduce bond shall not stop the
running of the period to perfect appeal."Petitioner should have seasonably filed the appeal bond
within the ten-day reglementary period following the receipt of the order, resolution or decision
of the NLRC to forestall the finality of such order, resolution or decision. In the alternative, he
should have paid only a moderate and reasonable sum for the premium, as was held
inBiogenerics Marketing and Research Corporation v. NLRC,21 to wit:
x x x The mandatory filing of a bond for the perfection of an appeal is evident from the
aforequoted provision that the appeal may be perfected only upon the posting of cash or
surety bond. It is not an excuse that the over P2 million award is too much for a small
business enterprise, like the petitioner company, to shoulder.The law does not require
its outright payment, but only the posting of a bond to ensure that the award
will be eventually paid should the appeal fail. What petitioners have to pay is a
moderate and reasonable sum for the premium for such bond. (Emphasis ours)
While the bond requirement on appeals involving monetary awards has been relaxed in certain
cases, this can only be done where there was substantial compliance of the Rules or where the
appellants, at the very least, exhibited willingness to pay by posting a partial bond. 22 Petitioners
reliance on the case of Rosewood Processing, Inc. v. NLRC23 is misplaced. Petitioner in the said
case substantially complied with the rules by posting a partial surety bond of fifty thousand
pesos issued by Prudential Guarantee and Assurance, Inc. while his motion to reduce appeal
bond was pending before the NLRC.
In the case at bar, petitioner did not post a full or partial appeal bond within the prescribed
period, thus, no appeal was perfected from the decision of the Labor Arbiter. For this reason, the
decision sought to be appealed to the NLRC had become final and executory and therefore
immutable. Clearly, then, the NLRC has no authority to entertain the appeal, much less to
reverse the decision of the Labor Arbiter. Any amendment or alteration made which substantially
affects the final and executory judgment is null and void for lack of jurisdiction, including the
entire proceeding held for that purpose. 24
WHEREFORE, in view of the foregoing, the petition is DENIED. The assailed decision of the
Court of Appeals in CA-G.R. SP No. 62129, dated October 10, 2001, dismissing the petition for
certiorari for lack of merit, isAFFIRMED.
No pronouncement as to costs.
SO ORDERED.
G.R. Nos. 116476-84 May 21, 1998
ROSEWOOD PROCESSING, INC., petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, NAPOLEON C. MAMON, ARSENIO GAZZINGAN,
ROMEO C. VELASCO, ARMANDO L. BALLON, VICTOR E. ALDEZA, JOSE L. CABRERA, VETERANS

PHILIPPINE SCOUT SECURITY AGENCY, and/or ENGR. SERGIO JAMILA IV, respondents.

PANGANIBAN, J.:
Under the Labor Code, an employer is solidarily liable for legal ages due security guards for the
period of time they were assigned to it by its contracted security agency. However, in the
absence of proof that the employer itself committed the acts constitutive of illegal dismissal or
conspired with the security agency in the performance of such acts, the employer shall not be
liable for back wages and/or separation pay arising as a consequence of such unlawful
termination.
The Case
These are the legal principles on which this Court bases its resolution of this special civil action
for certiorari, seeking the nullification of the April 28, 1994 Resolution and the July 12, 1994
Order of the National Labor Relations Commission, which dismissed petitioner's appeal from the
labor arbiter's Decision and denied its Motion for Reconsideration, respectively, in NLRC NCR
Case Nos. 00-05-02834-91, 00-08-04630-91, 00-07-03966-91, 00-09-05617-91, 00-07-03967-91,
00-07-04455-91, 00-08-05030-91, 00-11-06389-91, and 00-03-01642-92.
On May 13, 1991, a complaint for illegal dismissal; underpayment of wages; and for nonpayment
of overtime pay, legal holiday pay, premium pay for holiday and rest day, thirteenth month pay,
cash bond deposit, unpaid wages and damages was filed against Veterans Philippine Scout
Security Agency and/or Sergio Jamila IV (collectively referred to as the "security agency," for
brevity). Thereafter, petitioner was impleaded as a third-party respondent by the security
agency. In due course, Labor Arbiter Ricardo C. Nora rendered a consolidated Decision dated
March 26, 1993, which disposed as follows: 1
IN VIEW OF ALL THE FOREGOING, respondents Veterans Philippine Scout Security
Agency, Sergio Jamila IV, and third-party respondent Rosewood Processing, Inc. are
hereby ordered to pay jointly and severally complainants the following amounts, to
wit:
1. Napoleon Mamon P126,411.10
2. Arsenio Gazzingan 128,639.71
3. Rodolfo Velasco 147,114.43
4. Armando Ballon 116,894.70
5. Jose L. Cabrera 133,047.81
6. Victor Aldeza 137,046.64
__________
TOTAL P789,154.39
=========
representing their monetary benefits in the amount of SEVEN HUNDRED EIGHTY
NINE THOUSAND ONE HUNDRED FIFTY FOUR PESOS AND 39/100 CENTAVOS
(P789,154.39).
Respondents are likewise ordered to pay attorney's fees in the amount of
P78,915.43 within ten (10) days from receipt of this Decision.
All other issues are hereby [d]ismissed for failure of the complainants to fully
substantiate their claims.

The appeal filed by petitioner was dismissed by the National Labor Relations Commission 2 in its
Resolution promulgated April 28, 1994, for failure of the petitioner to file the required appeal
bond within the reglementary period. 3Pertinent portions of the challenged Resolution are
herewith quoted:
It appears on record that [petitioner] received their copy of the [labor arbiter's]
decision on April 2, 1993 and subsequently filed a "Notice of Appeal with
Memorandum of Appeal" on April 26, 1993, in violation of Rule VI, Section 1, 3, and
6 of the 1990 New Rules of Procedure of the NLRC . . . .
xxx xxx xxx
Clearly, the appeal filed by the [petitioners] on April 12, 1993 was not perfected
within the reglementary period, and the decision dated March 26, 1993 became
final and executory as of April 23, 1993.
WHEREFORE, the appeal is hereby DISMISSED.
In its motion for reconsideration, petitioner contended that it received a copy of the labor
arbiter's Decision only on April 6, 1993, and that it filed on April 16, 1993 within the prescribed
time a Notice of Appeal with a Memorandum on Appeal, a Motion to Reduce Appeal Bond and a
surety bond issued by Prudential Guarantee and Assurance, Inc. in the amount of
P50,000. 4 Though not opposed by the complainants and the security agency, the arguments
stated in the motion were not taken up by Respondent Commission. Reconsideration was
nonetheless denied by Respondent Commission in its Order of July 12, 1994, quoted below: 5
Section 14, Rule VII of the NLRC New Rules of Procedure allows [u]s to entertain a
motion for reconsideration only on "palpable or patent" errors [w]e may have
committed in [o]ur disputed April 28, 1994 resolution.
There being no such assignment here, [petitioner's] motion for reconsideration
dated May 19, 1994 is hereby DENIED for lack of merit.
Hence, this recourse.

In a Resolution dated March 20, 1995, this Court issued a temporary restraining order enjoining
the respondents and their agents from implementing and enforcing the assailed Resolution and
Order until further notice. 7
The Facts
Undisputed are the facts of this case, narrated by the labor arbiter as follows:
All the complainants were employed by the [security agency] as security guards:
Napoleon Mamon on October 7, 1989; Arsenio Gazzingan on September 25, 1988;
Rodolfo C. Velasco on January 5, 1987; Armando Ballon on June 28, 1990; Victor
Aldeza on March 21, 1990; and Jose L. Cabrera [in] January 1988.
Napoleon Mamon started working for the [security agency] on October 7, 1989 and
was assigned as office guard for three (3) days without any pay nor allowance as it
was allegedly an on[-the-]job training so there [was] no pay[.] On October 10, 1989,
he was transferred to the residence of Mr. Benito Ong with 12 hours duty a day
receiving a salary very much less than the minimum wage for eight (8) hours work
until February 3, 1990 when he received an order transferring him to Rosewood
Processing, Inc. effective that date . . . ; [a]t Rosewood Processing, Inc., he was

required to render also 12 hours duty every day with a salary of P2,600.00/month.
He was not given his pay for February 1 and 2 by the paymaster of [the security
agency] allegedly because the payroll could not be located so after 3 to 4 times of
going back and forth to [the security agency's] office to get his salary[;] [after] . . .
two (2) days he gave up because he was already spending more than what he could
get thru transportation alone. On May 16, 1991, Rosewood Processing, Inc. asked for
the relief of Mamon and other guards at Rosewood because they came to know that
complainants filed a complaint for underpayment on May 13, 1991 with the National
Labor Relations Commission[.] On May 18 to 19, 1991, [the security agency]
assigned him to their [m]ain [o]ffice. After that, complainant was floated until May
29, 1991 when he was assigned to Mead Johnson Philippines Corporation. [A]t about
a week later, [the security agency] received summons on complainant's complaint
for underpayment and he was called to [the security agency's] office. When he
reported, he was told to sign a "Quitclaim and Waiver['] by Lt. R. Rodriguez because
according to the latter, he [could] only get a measly sum from his complaint with
the NLRC and if he (complainant) [signed] the quitclaim and waiver he [would] be
retained at his present assignment which [was] giving quite a good salary and other
benefits but if he [did] not sign the quitclaim and waiver, he [would] be relieved
from his post and [would] no longer be given any assignment. . . . He was given up
to the end of July 1991 to think it over. At the end of July 1991, h[e] was approached
by the Security in Charge A. Azuela and asked him to sign the quitclaim and waiver
and when he refused to sign, he was told that the following day August 1, 1991, he
[would have] no more assignment and should report to their office. Thinking that it
was only a joke, he reported the following day to the detachment commander Mr. A.
Yadao and he was told that the main office . . . relieved him because he did not sign
the quitclaim and waiver. He reported to their office asking for an assignment but he
was told by R. Rodriguez that "I no longer can be given an assignment so I had
better resign". He went back several times to the office of the [security agency] but
every time the answer was the same[:] that he better tender his resignation
because he cannot be given any assignment although respondent was recruiting
new guards and posting them.
Arsenio Gazzingan started to work for the [security agency] on September 29, 1988.
[Note: the introductory paragraph stated September 25, 1988.] He was assigned to
Purefoods Breeding Farm at Calauan, Laguna and given a salary of P54.00 a day
working eight (8) hours. After three (3) months, he was given an examination and
passed the same. On December 26, 1988, he was given an increase and was paid
P64.00/day working eight (8) hours; [h]e remained at the same post for 8 months
and transferred to Purefoods Feed Mill at Sta. Rosa, Laguna, with the same salary
and the same tour of duty, 8 hours[.] After four (4) months, he was transferred to
Purefoods Grand Perry at Sta. Rosa, Laguna, and after eleven (11) days on June
1989, he was transferred to Rosewood Processing, Inc. at Meycauayan, Bulacan and
required to work for 12 hours at a salary of P94.00/day for one year. [In] June 1990,
he was assigned at Purefoods DELPAN [to] guard . . . a barge loaded with corn and
rendered 12 hours work/day with a salary of only P148.00/day and after 24 days, he
was floated for one month. He reported to [the security agency's] office and was
assigned to Purefoods Breeder Farm in Canlubang rendering 8 hours work per day
receiving only P178.00/day. After 11 days, he asked to be transferred to Manila[.]
[B]ecause of the distance from his home . . . the transfer was approved but instead
of being transferred to Manila, he was assigned to Purefoods B-F-4 in Batangas
rendering 12 hours duty/day and receiving only P148.00 per day until January 28,
1991[;] and again he requested for transfer which was also approved by the
[security agency's] office[,] but since then he was told to come back again and
again. [U]p to the present he has not been given any assignment. Because of the
fact that his family [was] in danger of going hungry, he sought relief from the NLRCNCR-Arbitration Branch.

Rodolfo Velasco started working for the [security agency] on January 5, 1987. He
was assigned to PCI Bank Elcano, Tondo Branch, as probationary, and [for] working
8 hours a day for 9 days he received only P400.00. On January 16, 1987, he was
assigned to [the security agency's] headquarters up to January 31, 1987, working
12 hours a day[; he] received only P650.00 for the 16 days. On September 1, 1988,
he was assigned to Imperial Synthetic Rubber Products rendering 12 hours duty per
day until December 31, 1988 and was given a salary of P1,600.00/month. He was
later transferred to various posts like Polypaper Products working 12 hours a day
given a salary of P1,800.00 a month; Paramount Electrical, Inc. working 12 hours a
day given P1,100.00 for 15 days; Rosewood Processing, Inc., rendering 12 hours
duty per day receiving P2,200.00/month until May 16, 1991[;] Alen Engineering
rendering 12 hours duty/day receiving P1,100/month; Purefoods Corporation on
Delta II rendering 12 hours duty per day received P4,200.00 a month. He was
relieved on August 24 and his salary for the period August 20 to 23 has not been
paid by [the security agency.] He was suspended for no cause at all.
Armando Ballon started as security guard with [the security agency] July 1990
[Note: the introductory paragraph stated June 28, 1990] and was assigned to
Purefoods Corporation in Marikina for five (5) months and received a salary of
P50.00 per day for 8 hours. He was transferred to Rosewood Processing, Inc. on
November 6, 1990 rendering 12 hours duty as [d]etachment [c]ommander and a
salary of P2,700.00/month including P200.00 officer's allowance until May 15, 1991.
On May 16, 1991, he applied for sick leave on orders of his doctor for 15 days but
the HRM, Miss M. Andres[,] got angry and crumpled his application for sick leave,
that [was] why he was not able to forward it to the SSS. After 15 days, he came
back to the office of [the security agency] asking for an assignment and he was told
that he [was] already terminated. Complainant found out that the reason why Miss
Andres crumpled his application for sick leave was because of the complaint he
previously filed and was dismissed for failure to appear. He then refiled this case to
seek redress from this Office.
Jose L. Cabrera started working for the [security agency] as security guard January,
1988 and was assigned to Alencor Residence rendering 12 hours duty per day and
received a salary of P2,400.00 a month for 3 months[.] [I]n May, 1988, he was
transferred to E & L Restaurant rendering 12 hours duty per day and receiv[ing] a
salary of P1,500.00 per month for 6 months[.] [I]n January, 1989, he was transferred
to Paramount rendering 12 hours duty per day receiving only P1,800.00 per month
for 6 months[.] [I]n July 1989, he was transferred to Benito Ong['s] residence
rendering 12 hours duty per day and receiving a salary of P1,400.00 per month for 4
months[.] [I]n December, 1989, he was transferred to Sea Trade International
rendering . . . 12 hours duty per day and receiving a salary of P1,900 per month for
6 months[.] [I]n July, 1990, he was transferred to Holland Pacific & Paper Mills
rendering 8 hours duty per day and receiving a salary of P2,400.00 per month until
September 1990[.] [In] October 1990, he was transferred to RMG residence
rendering 12 hours duty per day receiving a salary of P2,200.00 per month for 3
months[.] [In] February 1991, he was transferred to Purefoods Corporation at
Mabini, Batangas rendering 12 hours duty per day with a salary of P3,600.00 per
month for only one month because he was hospitalized due to a stab wound
inflicted by his [d]etachment [c]ommander. When he was discharged from the
hospital and after he was examined and declared "fit to work" by the doctor, he
reported back to [the security agency's] office but was given the run-around [and
was told to] "come back tomorrow[.]" [H]e [could] see that [the agency was] posting
new recruits. He then complained to this Honorable Office to seek redress, hiring the
services of a counsel.

Victor Aldeza started working for the [security agency] on March 21, 1990 and was
assigned to Meridian Condominium, rendering 12 hours work per day and receiving
a salary of P1,500.00 per month. Although he knew that the salary was below
minimum yet he persevered because he had spent much to get this job and stayed
on until October 15, 1990[.] On October 16, 1990, he was transferred to Rosewood
Processing, Inc., rendering 12 hours duty per day and receiving a salary of
P2,600.00 per month up to May 15, 1991[.] On the later part of May 1991, he was
assigned to UPSSA (Sandoval Shipyard) rendering 12 hours duty per day receiving a
salary of P3,200.00 per month. [Aldeza] complained to [the security agency] about
the salary but [the agency] did not heed him; thus, he filed his complaint for
underpayment[.] [The agency] upon complainant's complaint for
underpayment . . . , instead of adjusting his salary to meet the minimum prescribed
by law[,] relieved him and left him floating[.] . . . When he complained of the
treatment, he was told to resign because he could no longer be given any
assignment. Because of this, complainant was forced to file another complaint for
illegal dismissal.
Labor Arbiter's Ruling
The labor arbiter noted the failure of the security agency to present evidence to refute the
complainants' allegation. Instead, it impleaded the petitioner as third-party respondent,
contending that its actions were primarily caused by petitioner's noncompliance with its
obligations under the contract for security services, and the subsequent cancellation of the said
contract.
The labor arbiter held petitioner jointly and severally liable with the security agency as the
complainants' indirect employer under Articles 106, 107 and 109 of the Labor Code, citing the
case of Spartan Security & Detective Agency, Inc. vs. National Labor Relations Commission. 8
Although the security agency could lawfully place the complainants on floating status for a
period not exceeding six months, the act was "illegal" because the former had issued a
newspaper advertisement for new security guards. Since the relation between the complainants
and the agency was already strained, the labor arbiter ordered the payment of separation pay in
lieu of reinstatement.
The award for wage differential, limited back wages and separation pay contained the following
details:
1. Napoleon Mamon
Wage Differentials P45,959.02
Backwages 72,764.38
Separation Pay 7,687.70 P126,411.10
_________
2. Arsenio Gazzingan
Wage Differentials P24,855.76
Backwages 96,096.25
Separation Pay 7,687.70 P128,639.71
__________
3. Rodolfo Velasco
Wage Differentials P66,393.58

Backwages 69,189.30
Separation Pay 11,531.55 P147,114.43
__________
4. Armando Ballon
Wage Differentials P31,176.85
Backwages 81,874.00
Separation Pay 3,843.85 P116,894.70
__________
5. Jose Cabrera
Wage Differentials P30,032.63
Backwages 91,483.63
Separation Pay 11,531.55 P133,047.81
__________
6. Victor Aldeza
Wage Differentials P49,406.86
Backwages 83,795.93
Separation Pay 3,843.85 P137,046.64
__________
P789, 154.39
==========
Ruling of Respondent Commission
As earlier stated, Respondent Commission dismissed petitioner's appeal, because it was
allegedly not perfected within the reglementary ten-day period. Petitioner received a copy of the
labor arbiter's Decision on April 2, 1993, and it filed its Memorandum of Appeal on April 12, 1993.
However, it submitted the appeal bond on April 26, 1993, or twelve days after the expiration of
the period for appeal per Rule VI, Section 1, 3 and 6 of the 1990 Rules of Procedure of the
National Labor Relations Commission. Thus, it ruled that the labor arbiter's Decision became final
and executory on April 13, 1993.
In the assailed Order, Respondent Commission denied reconsideration, because petitioner
allegedly failed to raise any palpable or patent error committed by said commission.
Assignment of Errors
Petitioner imputes the following errors to Respondent Commission:
Respondent NLRC committed grave abuse of discretion amounting to lack of
jurisdiction when it dismissed petitioner's appeal despite the fact that the same was
perfected within the reglementary period provided by law.
Respondent NLRC committed grave abuse of discretion amounting to lack of
jurisdiction when it dismissed petitioner's appeal despite the clearly meritorious
grounds relied upon therein.
Otherwise stated, the petition raises these two issues: first, whether the appeal from the labor
arbiter to the NLRC was perfected on time; and second, whether petitioner is solidarily liable with

the security agency for the payment of back wages, wage differential and separation pay.
The Court's Ruling
The petition is impressed with some merit and deserves partial grant.
First Issue: Substantial Compliance with the
Appeal Bond Requirement
The perfection of an appeal within the reglementary period and in the manner prescribed by law
is jurisdictional, and noncompliance with such legal requirement is fatal and effectively renders
the judgment final and executory. 9The Labor Code provides:
Art. 223. Appeal. Decisions, awards or orders of the Labor Arbiter are final and
executory unless appealed to the Commission by any or both parties within ten (10)
calendar days from receipt of such decisions, awards, or orders. . . .
xxx xxx xxx
In case of a judgment involving a monetary award, an appeal by the employer may
be perfected only upon the posting of a cash or surety bond issued by a reputable
bonding company duly accredited by the Commission in the amount equivalent to
the monetary award in the judgment appealed from.
xxx xxx xxx
Indisputable is the legal doctrine that the appeal of a decision involving a monetary award in
labor cases may be perfected "only upon the posting of a cash or surety bond." 10 The lawmakers
intended the posting of the bond to be an indispensable requirement to perfect an employer's
appeal. 11
However, in a number of cases, this Court has relaxed this requirement in order to bring about
the immediate and appropriate resolution of controversies on the merits. 12 Some of these cases
include: "(a) counsel's reliance on the footnote of the notice of the decision of the labor arbiter
that the aggrieved party may appeal . . . within ten (10) working days; (b) fundamental
consideration of substantial justice; (c) prevention of miscarriage of justice or of unjust
enrichment, as where the tardy appeal is from a decision granting separation pay which was
already granted in an earlier final decision; and (d) special circumstances of the case combined
with its legal merits or the amount and the issue involved." 13
In Quiambao vs. National Labor Relations Commission, 14 this Court ruled that a relaxation of the
appeal bond requirement could be justified by substantial compliance with the rule.
In Globe General Services and Security Agency vs. National Labor Relations Commission, 15 the
Court observed that the NLRC, in actual practice, allows the reduction of the appeal bond upon
motion of the appellant and on meritorious grounds; hence, petitioners in that case should have
filed a motion to reduce the bond within the reglementary period for appeal.
That is the exact situation in the case at bar. Here, petitioner claims to have received the labor
arbiter's Decision on April 6, 1993. 16 On April 16, 1993, it filed, together with its memorandum
on appeal 17 and notice of appeal, a motion to reduce the appeal bond 18 accompanied by a
surety bond for fifty thousand pesos issued by prudential Guarantee and Assurance,
Inc. 19 Ignoring petitioner's motion (to reduce bond), Respondent Commission rendered its
assailed Resolution dismissing the appeal due to the late filing of the appeal bond.

The solicitor general argues for the affirmation of the assailed Resolution for the sole reason that
the appeal bond, even if it was filed on time, was defective, as it was not in an amount
"equivalent to the monetary award in the judgment appealed from." The Court disagrees.
We hold that petitioner's motion to reduce the bond is a substantial compliance with the Labor
Code. This holding is consistent with the norm that letter-perfect rules must yield to the broader
interest of substantial justice. 20
Where a decision may be made to rest on informed judgment rather than rigid rules, the equities
of the case must be accorded their due weight because labor determinations should not only be
"secundum rationem but alsosecundum caritatem." 21 A judicious reading of the memorandum of
appeal would have made it evident to Respondent Commission that the recourse was
meritorious. Respondent Commission acted with grave abuse of discretion in peremptorily
dismissing the appeal without passing upon in fact, ignoring the motion to reduce the
appeal bond.
We repeat: Considering the clear merits which appear, res ipsa loquitur, in the appeal from the
labor arbiter's Decision, and the petitioner's substantial compliance with rules governing appeals,
we hold that the NLRC gravely abused its discretion in dismissing said appeal and in failing to
pass upon the grounds alleged in the Motion for Reconsideration.
Second Issue: Liability of an Indirect Employer
The overriding premise in the labor arbiter's Decision holding the security agency and the
petitioner liable was that said parties offered no evidence refuting or rebutting the complainants'
computation of their monetary claims. The arbiter ruled that petitioner was liable in solidum with
the agency for salary differentials based on Articles 106, 107 and 109 of the Labor Code which
hold an employer jointly and severally liable with its contractor or subcontractor, as if it is the
direct employer. We quote said provisions below:
Art. 106. Contractor or subcontractor. Whenever an employer enters into a
contract with another person for the performance of the former's work, the
employees of the contractor and of the latter's subcontractor, if any, shall be paid in
accordance with the provisions of this Code.
In the event that the contractor or subcontractor fails to pay the wages of his
employees in accordance with this Code, the employer shall be jointly and severally
liable with his contractor or subcontractor to such employees to the extent of the
work performed under the contract, in the same manner and extent that he is liable
to employees directly employed by him.
xxx xxx xxx
Art. 107. Indirect employer. The provisions of the immediately preceding Article
shall likewise apply to any person, partnership, association or corporation which, not
being an employer, contracts with an independent contractor for the performance of
any work, task, job or project.
Art. 109. Solidary liability. The provisions of existing laws to the contrary
notwithstanding, every employer or indirect employer shall be held responsible with
his contractor or subcontractor for any violation of any provision of this Code. For
purposes of determining the extent of their civil liability under this Chapter, they
shall be considered as direct employers.
Upon the other hand, back wages and separation pay were awarded because the complainants

were constructively and illegally dismissed by the security agency, which placed them on floating
status and at the same time gave assignments to newly hired security guards. Noting that the
relationship between the security agency and the complainants was already strained, the labor
arbiter granted separation pay in lieu of reinstatement.
In its memorandum of appeal, petitioner controverts its liability for the mentioned monetary
awards on the following grounds: 22
A. Complainant Jose Cabrera never rendered security services to [petitioner] or was
[n]ever assigned as security guard [for] the latter's business establishment;
B. Complainants Napoleon Mamon, Arsenio Gazzingan, Rodolfo Velasco, Armando
Ballon and Victor Aldeza rendered security services to [petitioner] for a fixed period
and were thereafter assigned to other entities or establishments or were floated or
recalled to the headquarters of Veterans; and,
C. The relationship between [petitioner] and Veterans was governed by a Contract
for Guard Services under which [petitioner] dutifully paid a contract price of
P3,500.00 a month for 12 hour duty per guard and later increased to P4,250.00 a
month for 12 hour duty per guard which are within the prevailing rates in the
industry and in accordance with labor standard laws.
The first two grounds are meritorious. Legally untenable, however, is the contention that
petitioner is not liable for any wage differential for the reason that it paid the employees in
accordance with the contract for security services which it had entered into with the
security agency. Notwithstanding the service contract between the petitioner and the
security agency, the former is still solidarily liable to the employees, who were not privy to
said contract, pursuant to the aforecited provisions of the Code. Labor standard
legislations are enacted to alleviate the plight of workers whose wages barely meet the
spiraling costs of their basic needs. They are considered written in every contract, and
stipulations in violation thereof are considered not written. Similarly, legislated wage
increases are deemed amendments to the contract. Thus, employers cannot hide behind
their contracts in order to evade their or their contractors' or subcontractors' liability for
noncompliance with the statutory minimum wage.
The joint and several liability of the employer or principal was enacted to ensure compliance with
the provisions of the Code, principally those on statutory minimum wage. The contractor or
subcontractor is made liable by virtue of his or her status as a direct employer, and the principal
as the indirect employer of the contractor's employees. This liability facilitates, if not guarantees,
payment of the workers' compensation, thus, giving the workers ample protection as mandated
by the 1987 Constitution. 23 This is not unduly burdensome to the employer. Should the indirect
employer be constrained to pay the workers, it can recover whatever amount it had paid in
accordance with the terms of the service contract between itself and the contractor. 24
Withal, fairness likewise dictates that the petitioner should not, however, be held liable for wage
differentials incurred while the complainants were assigned to other companies. Under these
cited provisions of the Labor Code, should the contractor fail to pay the wages of its employees
in accordance with law, the indirect employer (the petitioner in this case), is jointly and severally
liable with the contractor, but such responsibility should be understood to be limited to the
extent of the work performed under the contract, in the same manner and extent that he is liable
to the employees directly employed by him. This liability of petitioner covers the payment of the
workers' performance of any work, task, job or project. So long as the work, task, job or project
has been performed for petitioner's benefit or on its behalf, the liability accrues for such period
even if, later on, the employees are eventually transferred or reassigned elsewhere.

We repeat: The indirect employer's liability to the contractor's employees extends only to the
period during which they were working for the petitioner, and the fact that they were reassigned
to another principal necessarily ends such responsibility. The principal is made liable to his
indirect employees, because it can protect itself from irresponsible contractors by withholding
such sums and paying them directly to the employees or by requiring a bond from the contractor
or subcontractor for this purpose.
Similarly, the solidary liability for payment of back wages and separation pay is limited, under
Article 106, "to the extent of the work performed under the contract"; under Article 107, to "the
performance of any work, task, job or project"; and under Article 109, to "the extent of their civil
liability under this Chapter [on payment of wages]."
These provisions cannot apply to petitioner, considering that the complainants were no longer
working for or assigned to it when they were illegally dismissed. Furthermore, an order to pay
back wages and separation pay is invested with a punitive character, such that an indirect
employer should not be made liable without a finding that it had committed or conspired in the
illegal dismissal.
The liability arising from an illegal dismissal is unlike an order to pay the statutory minimum
wage, because the workers' right to such wage is derived from law. The proposition that payment
of back wages and separation pay should be covered by Article 109, which holds an indirect
employer solidarily responsible with his contractor or subcontractor for "any violation of any
provision of this Code," would have been tenable if there were proof there was none in this
case that the principal/employer had conspired with the contractor in the acts giving rise to
the illegal dismissal.
With the foregoing discussion in mind, we now take up in detail the petitioner's liability to each of
the complainants.
Case No. NCR-00-08-04630-91
Mamon worked for petitioner for a period of a little more than one year beginning February 3,
1990 until May 16, 1991. Inasmuch as petitioner was his indirect employer during such rime, it
should thus be severally liable for wage differential from the time of his employment until his
relief from duty. He was relieved upon the request of petitioner, after it had learned of the
complaint for underpayment of wages filed by Mamon and several other security guards.
However, this was not a dismissal from work because Mamon was still working for the security
agency and was immediately assigned, on May 29, 1991, to its other client, Mead Johnson
Philippines. His dismissal came about later, when he refused to sign a quitclaim and waiver in
favor of the security agency. Thus, he was illegally dismissed by the agency when he was no
longer employed by petitioner, which cannot thus be held liable for back wages and separation
pay in his case.
Napoleon Mamon . . . received an order transferring him to Rosewood Processing,
Inc. effective . . . February 3, 1990; . . . . On May 16, 1991, Rosewood Processing,
Inc. asked for the relief of Mamon and other guards at Rosewood because they
came to know that complainants filed a complaint for underpayment on May 13,
1991 with the National Labor Relations Commission[,] . . . After that, complainant
was floated until May 29, 1991 when he was assigned to Mead Johnson Philippines
Corporation. . . . [A] week later, [the security agency] received summons on
complainant's complaint for underpayment and he was called to [the security
agency] office. When he reported, he was told to sign a "Quitclaim and Waiver['] by
Lt. R. Rodriguez . . . and . . . if he [did] not sign the quitclaim and waiver, he [would]
be relieved from his post and [would] no longer be given any assignment. . . . At the

end of July 1991, he was approached by the Security in Charge, A. Azuela, . . . [for
him] to sign the quitclaim and waiver[,] and when he refused to sign, he was told
that . . . he ha[d] no more assignment and should report to their office. . . . [H]e
reported the following day to the detachment commander, Mr. A. Yadao and he was
told that the main office ha[d] relieved him . . . . He reported to their office asking
for an assignment but he was told by R. Rodriguez that "I no longer can be given an
assignment so I had better resign." He went back several times to the office of the
[security agency] but every time the answer was the same . . . although respondent
was recruiting new guards and posting them. 25
Case No. NCR-00-07-03966-91
Gazzingan was assigned to petitioner as a security guard for a period of one year. For said
period, petitioner is solidarily liable with the agency for underpayment of wages based on
Articles 106, 107 and 109 of the Code.
Arsenio Gazzingan . . . after eleven (11) days on June 1989, . . . was transferred to
Rosewood Processing, Inc. . . . . [I]n June 1990, he was assigned at Purefoods
DELPAN . . . . After 11 days, he asked to be transferred to Manila because of the
distance from his home and the transfer was approved but instead of being
transferred to Manila, he was assigned to Purefoods B-F-4 in Batangas . . . again he
requested for transfer which was also approved by the [security agency] office but
since then he was told to come back again and again and up to the present he has
not been given any assignment. . . . . 26
His dismissal cannot be blamed on the petitioner. Like Mamon, Gazzingan had already been
assigned to another client of the agency when he was illegally dismissed. Thus, Rosewood cannot
be held liable, jointly and severally with the agency, for back wages and separation pay.
Case No. NCR-00-07-03967-91
Rodolfo Velasco was assigned to petitioner from December 31, 1988 until May 16, 1991. Thus,
petitioner is solidarily liable for wage differentials during such period. Petitioner is not, however,
liable for back wages and separation pay, because Velasco was no longer working for petitioner
at the time of his illegal dismissal.
Rodolfo Velasco started working for the [security agency] on January 5, 1987. . . .
[On] December 31, 1988 . . . he was . . . transferred to various posts like . . .
Rosewood Processing, Inc., . . . until May 16, 1991 . . . . He was relieved on August
24 and his salary for the period August 20 to 23 has not been paid by [the security
agency]; [h]e was suspended for no cause at all. 27
Case No. NCR-00-07-0445-91
Petitioner was the indirect employer of Ballon during the period beginning November 6, 1990
until May 15, 1991; thus, it is liable for wage differentials for said period. However, it is not liable
for back wages and separation pay, as there was no evidence presented to show that it
participated in Ballon's illegal dismissal.
. . . [H]e [Armando Ballon] was transferred to Rosewood Processing, Inc. on
November 6, 1990 rendering 12 hours duty as [d]etachment [c]ommander and
received a salary of P2,700.00/month including P200.00 officer's allowance until
May 15, 1991. On May 16, 1991, he applied for sick leave on orders of his doctor for
15 days but the HRM, Miss M. Andres[,] got angry and crumpled his application for
sick leave that is why he was not able to forward it to the SSS. After 15 days, he

came back to the office of [the security agency] asking for an assignment and he
was told that he [was] already terminated. Complainant found out that the reason
why Miss Andres crumpled his application for sick leave was because of the
complaint he previously filed and was dismissed for failure to appear. He then
refiled this case to seek redress from this Office. 28
Case No. NCR-00-08-05030-91
Petitioner is liable for wage differentials in favor of Aldeza during the period he worked with
petitioner, that is, October 16, 1990 until May 15, 1991.
. . . On October 16, 1990, he [Aldeza] was transferred to Rosewood Processing,
Inc., . . . up to May 15, 1991[.] On the later part of May 1991, he was assigned to
UPSSA (Sandoval Shipyard) . . . . Complainant [sic] complained to [the security
agency] about the salary but [the security agency] did not heed him; thus, he filed
his complaint for underpayment[.] [The security agency] upon complainant's
complaint for underpayment reacted . . . , instead of adjusting his salary to meet
the minimum prescribed by law[,] relieved him and left him floating[;] and when he
complained of the treatment, he was told to resign because he could no longer be
given any assignment. Because of this, complainant was forced to file another
complaint for illegal dismissal. 29
The cause of Aldeza's illegal dismissal is imputable, not to petitioner, but solely to the security
agency. In Aldeza's case, the solidary liability for back wages and separation pay arising from
Articles 106, 107 and 109 of the Code has no application.
Case No. NCR-00-09-05617-91
Cabrera was an employee of the security agency, but he never rendered security services to
petitioner. This fact is evident in the labor arbiter's findings:
Jose L. Cabrera started working for the [security agency] as [a] security guard on
January, 1988 and was assigned to Alencor Residence . . . . [I]n May, 1988, he was
transferred to E & L, Restaurant . . . [.] [I]n January, 1989, he was transferred to
Paramount . . . [.] [I]n July 1989, he was transferred to Benito Ong['s] residence . . .
[.] [I]n December, 1989, he was transferred to Sea Trade International . . . [.] [I]n
July, 1990, he was transferred to Holland Pacific & Paper Mills . . . [.] [I]n October
1990, he was transferred to RMG [R]esidence . . . [.] [I]n February 1991, he was
transferred to Purefoods Corporation at Mabini, Batangas . . . . When he was
discharged from the hospital and after he was examined and declared "fit to work"
by the doctor, he reported back to [the security agency] office but was given the
run-around [and was told to] "come back tomorrow[,]" although he [could] see that
[it was] posting new recruits. He then complained to this Honorable Office to seek
redress, hiring the services of a counsel. 30
Hence, petitioner is not liable to Cabrera for anything.
In all these cases, however, the liability of the security agency is without question, as it did not
appeal from the Decisions of the labor arbiter and Respondent Commission.
WHEREFORE, the petition is partially GRANTED. The assailed Decision is hereby MODIFIED, such
that petitioner, with the Security agency, is solidarily liable to PAY the complainants only wage
differentials during the period that the complainants were actually under its employ, as above
detailed. Petitioner is EXONERATED from the payment of back wages and separation pay.

The temporary restraining order issued earlier is LIFTED, but the petitioner is deemed liable only
for the aforementioned wage differentials, which Respondent Commission is required to
RECOMPUTE within fifteen days from the finality of this Decision. No costs.
SO ORDERED.
G.R. No. 153859

December 11, 2003

FILIPINAS (Pre-fabricated Bldg.) SYSTEMS "FILSYSTEMS," INC. and FELIPE A. CRUZ,


JR., petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and CRESENCIANO BEBANCO, JUANITO R.
BENZON, REY NUALLA, BONIFACIO TORRES, ERNESTO SINCONEQUE and EMILIO
ANEANO, respondents.
DECISION
PUNO, J.:
The facts reveal that a complaint for illegal dismissal and monetary claims for service incentive
leave, 13th month pay and night shift differential was filed by respondents against petitioners
before the National Labor Relations Commission.1 The complaint was assigned to Labor Arbiter
Donato G. Quinto, Jr. who ordered the parties to file their position paper. Respondents complied,
but not the petitioners despite several warnings and time extensions. The inaction was construed
as a waiver by petitioners of their right to present evidence. 2
The Labor Arbiter decided the complaint on the merit and ruled in favor of respondents. He
sustained their claim of illegal dismissal as petitioners failed to adduce contrary evidence.
Petitioners were ordered to reinstate respondents. The monetary claims of the respondents were
likewise granted.3
Petitioners appealed to the National Labor Relations Commission. For the first time, they
submitted evidence that respondents were project employees and that their dismissal was due to
the discontinuation of the Jaka Tower I project where they were assigned. Respondents, however,
assailed the jurisdiction of the NLRC over the appeal for failure of the petitioners to file the
appeal bond within the ten (10)-day reglementary period. They further contended that it was too
late for petitioners to present evidence in the NLRC.
The NLRC nevertheless assumed jurisdiction over the appeal. Due to the evidence presented by
petitioners on the issue of illegal dismissal, it remanded the case to the Labor Arbiter for further
proceedings.4 Respondents motion for reconsideration was denied. 5
Respondents then repaired to the Court of Appeals on a Petition for Certiorari. The appellate
court ruled that the NLRC did not have jurisdiction over the appeal since the appeal bond of the
petitioners was filed out of time. It reinstated the decision of the Labor Arbiter. 6 Petitioners
motion for reconsideration proved futile.
Hence this petition where petitioners raise the following issues:
1. Whether or not the Court of Appeals erred and committed grave abuse of discretion in
finding and ruling that the NLRC has not acquired jurisdiction on the appeal of the
petitioners for submitting an appeal bond seven (7) days beyond the ten (10)-day
reglamentary (sic) period in perfecting an appeal;
2. Whether or not the Court of Appeals erred and committed grave abuse of discretion in

finding and ruling that:


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

xxx

x x x"

3. Whether or not the Court a quo erred and committed grave abuse of discretion in giving
due course to the private respondents petition for certiorari under Rule 65 of the 1997
Rules on Civil Procedure; and in annulling and setting aside the Resolutions (of) the NLRC,
and reinstating the Decision of the Labor Arbiter ordering the reinstatement of the private
respondents, with full backwages, and monetary awards for 13th month pay and Service
Incentive Leave pay.7
We affirm. The Labor Code provides a ten (10)-day period from receipt of the decision of the
Arbiter for the filing of an appeal together with an appeal bond if the decision involves a
monetary award in favor of the employees, viz:
ART. 223. Appeal. Decisions, awards, or orders of the Labor Arbiter are final and executory
unless appealed to the Commission by any or both parties within ten (10) calendar days from
receipt of such decisions, awards, or orders. x x x
In case of a judgment involving a monetary award, an appeal by the employer may be perfected
only upon the posting of a cash or surety bond issued by a reputable bonding company duly
accredited by the Commission in the amount equivalent to the monetary award in the judgment
appealed from.
xxx

xxx

xxx

(emphasis supplied)
The NLRC Rules of Procedure8 likewise require the appeal and the appeal bond to be filed within
the ten (10)-day reglementary period:
Section 1. Periods of Appeal. Decisions, awards, or orders of the Labor Arbiter and the POEA
Administrator shall be final and executory unless appealed to the Commission by any or both
parties within ten (10) calendar days from receipt of such decisions, awards, or orders of the
Labor Arbiter or of the Administrator, and in case of a decision or of the Regional Director or his
duly authorized Hearing Officer within five (5) calendar days from receipt of such decisions,
awards or orders. If the 10th or 5th day, as the case may be, falls on a Saturday, Sunday or a
holiday, the last day to perfect the appeal shall be the next working day.
xxx

xxx

xxx

Section 3. Requisites for Perfection of Appeal. (a) The appeal shall be filed within the
reglementary period as provided in Section 1 of this Rule; shall be under oath with proof of
payment of the required appeal fee and the posting of a cash surety bond as provided in Section
5 of this Rule (which provides how much and where the appeal fee is to be paid); shall be
accompanied by a memorandum of appeal which shall state the grounds relied upon and the
arguments in support thereof; the relief prayed for; and a statement of the date when the
appellant received the appealed decision, order or award and proof of service on the other party

of such appeal.
A mere notice of appeal without complying with the other requisite aforestated shall not stop the
running of the period for perfecting an appeal.
xxx

xxx

xxx

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

xxx

xxx

We have consistently ruled that payment of the appeal bond is a jurisdictional requisite for the
perfection of an appeal to the NLRC.9 It is only in rare instances that the court relaxes the rule
upon a showing of substantial compliance with it and to prevent patent injustice.
In the case at bar, petitioners alleged that they received a copy of the Arbiters decision on
October 31, 1998.10Their memorandum of appeal was dated November 9, 1998, but their appeal
bond to stay execution of the decision was executed only on November 17, 1998. 11 The records
show no partial payment of the bond was made during the reglementary period nor was there
any explanation for its late filing. Given these facts, the late filing of the bond divested the NLRC
of its jurisdiction to entertain petitioners appeal.
Likewise, we cannot countenance the late submission of petitioners evidence with the
NLRC.1wphi1 Petitioners should have adduced their evidence on the issue of illegal dismissal
before the Labor Arbiter. They failed to do so despite the opportunities given to them by the
Arbiter. It was only when an adverse decision was rendered against them by the Arbiter that they
offered to submit their evidence before the NLRC refuting respondents complaint of illegal
dismissal. Such a practice cannot be tolerated for it will defeat the speedy administration of
justice involving our poor workers. Moreover, it smacks of unfairness.
Yet, this is not all. Petitioners likewise ran roughshod of the procedural rules of the appellate
court. Respondents comment alleges that the appellate court already declared its judgment final
and executory. An entry of judgment was made after petitioners motion for reconsideration of
the appellate courts decision was denied on October 31, 2001 and no petition was filed before
this Court. Atty. Rodolfo P. Orticio, however, moved for cancellation of the entry of judgment on
the ground that he is the new counsel of the petitioners and that he received a copy of the denial
of their motion for reconsideration only on June 19, 2002. He contended that his request for
cancellation was filed within the allowable period. In a resolution dated August 20, 2002 denying
the request, the Court of Appeals ruled that:
From the records, it appears that when the decision and resolution denying the Motion for
Reconsideration dated 31 October 2001 were received, Atty. Orticio was not yet the counsel for
private respondent. In fact, he filed his notice of appearance on 23 November 2001 after receipt
on 9 November 2001 by private respondents former counsel, Atty. Louis Acosta, of the resolution
denying the motion for reconsideration. A judgment becomes final provided there was proper
service of notice thereof. In this case, the records clearly show there was such proper service
upon private respondents former counsel, Atty. Louis Acosta. Therefore, the decision of 2 April
2001 did become final and executory, leaving Us no more discretion to recall the entry of
judgment.12
It is thus contended by respondents that the petition at bar should not be allowed as the decision
of the appellate court has already become final.
Again, we agree. Petitioners should have filed the present petition within fifteen days under Rule

45 of the Rules of Court, viz:


SECTION 1. Filing of petition with Supreme Court. A party desiring to appeal by certiorari from a
judgment or final order or resolution of the Court of Appeals, the Sandiganbayan, the Regional
Trial Court or other courts whenever authorized by law, may file with the Supreme Court a
verified petition for review on certiorari. The petition shall raise only questions of law which must
be distinctly set forth.
SECTION 2. Time for filing. The petition shall be filed within fifteen (15) days from notice of the
judgment or final order or resolution appealed from, or of the denial of the petitioners motion for
new trial or reconsideration filed in due time after notice of the judgment. x x x.
Petitioners received a copy of the denial of their motion for reconsideration of the Court of
Appeals decision on November 9, 2001. They filed an extension of time to file the petition at bar
on June 16, 2002, alleging that they have a new counsel. We note, however, that petitioners
obtained the services of present counsel on November 23, 2001. Thus, there was ample time for
their counsel to appeal to this Court the adverse ruling of the appellate court. The appeal was
not seasonably made by said counsel and such procedural lapse is binding on petitioners.
IN VIEW WHEREOF, the petition is dismissed. The decision of the Labor Arbiter is reinstated
with the modification that if reinstatement of respondents is not feasible, they should be paid
separation pay in accordance with law.
SO ORDERED.
G.R. No. 150147

January 20, 2004

LYDIA BUENAOBRA, JOSIELYN FIEL, MARGIE MADRID, ROWENA MIRANDA, JUVY


ENDAYA, JUDY CARONAN, JOSEPHINE BARTOLOME, LITA MACALINAO, MARLITA AMBIL,
RIZA AMBIL, ANENCIA RECANA, LORENA REYES, JULIO BALAGTAS, SALVACION
FELISMENA, GINA SINLAO, MARITA CHAVEZ, JIMENA DRADA, YOLANDA ROLDAN,
RAFAELA OLICIA, ANGELEO FUENTES, EUFROCINA ALMERA, FELICISIMA DE GUZMAN,
ADELINA CALIM, SUSANITA SULAPAS, LOLITA MALICDEM, TERESITA BORLAZA, ESTER
OVERIO, IMELDA AGUIRRE, MARIBEL BELTRAN, MYLENE TAMAYO, ANNIE GREGORIO,
TERESA CLARINO, TERESA VILLANUEVA, MARIETTA ARCAYA, MILAGROS DAGDAGAN,
PAULINO PREALDE, MONINA VALLEJO, RITA MAGSINO, SOLIDAD LABAY, MARIA
BINARAO, MELCHORA DELA CRUZ, SUSAN BITAS, EMELY CAYETANO, EMILY DELA CRUZ,
ZENAIDA SALAS, BITUIN VALDEZ, AFRICA GUEVARRA, NELIA MORALES, ELOISA REYES,
AIDA CAYETANO, BENITA CAMPOSANO, ADELIA IGNACIO, NENITA SARCIA, VIOLETA
RONCAL, DOROTEA ALASKA, BLISELDA GALONGAN, SHIRLEY JOCSON, MARITES VELOZ,
ROGELIO CAPUZ, MARDIOLINA ALIOC, MARIETTA MADRID, LOURDES MERCADO,
ARACELLY CERDENOLA, REMEDIOS TAGNONG, MARISSA SANTOS, JOSEFINA CANALDA,
ZENAIDA DAMANDANTE, CONCHITA BELARMINO, MARIVIC TRINIDAD, MARGARITA
GUMBAN, ANGELES FERNANDEZ, MARIA BERNAL, MORALINDA DUARTE, IMELDA
TUNGOL, ALONA INNOCENCIO, MA. TERESA CRUZ, ANALIZA GABRIEL, MELODIEN
CARANDANG, CRESENCIA ACEBO, MARILYN CASIM, HERMINIA PINEDA, NORIE TORINO,
ERLINDA TADEO, CECILIA LLAVORE, ANA GINA GALMAN, IMELDA SALARDA, LUISA
SAROL, LOLITA MALICSE, AILEEN PAPANIO, EDITHA GANAL, RESTIE VISTAL, LUCELYN
QUISOY, ESTELA PABIO BRIONES, AUREA TUBIS, SAMUEL MALICSE, AURORA MISSION,
ANALYN CALICA, LEILANI ALEJAGA, LILIA BRIZUELA, ROSITA FACTOR, MERCEDES
MENDOZA, WARLITO COLOMA, PERLEEN MUI, JOSEPHINE BALDRES, ELENA
MAGDANGAL, IRMA BENGCO, CRISTITA GERALDEZ, ROMEO PANDO, ESTRELLITA
ZILMAR, ANGELITA SANDIG, NENITA LARIOSA, MARITA PANTI, AURORA HERNANDEZ,
DINNA SILVA, EVANGELINE CASIM, LUISA SOLAYAO, ANNABELLE SY, MARINA
REBLENCA, MARITESS GERANDOY, ELENA AGUDA, PERCY GARCIA, GERARDO TAPIT,

AMADOR HADE, MYRA BORJA, ELVIRA ALBAY, LELIOSA MORANO, VERONICA GUINDAY,
JULIETA ALMAYDA, VILMA SALDO, MAY ANN REPAYO, GLENDA SARAO, NELLY CARAGA,
JOSEPHINE TAQUIQUI, TRINIDAD BARROCA, DULCE ENDAYA, RIZA TADLIP, NENITA
LAGAMAYO, EUFRENCINA ROLDAN, ELENA VELASQUEZ, MARIVIC DEPANTI, MONINA
LOCSIN, ANA RAMOS, ANICIA LEUTIEJA, JOSEFINA MANUEL, AMALIA DAEP, JULIE
MANGANAAN, ROWENA ANYAYA, LUNINGNING ANYAYA, CARMENCITA ANYAYA, ROWENA
FIEL, VENAMEL BEA, NIDA PABLO, LOLITA BLANCO, ROSEMARIE MORALES, NATIVIDAD
CANETE, CORAZON GOROSPE, MADONNA RAGONOT, GEMMA DACAL, and CLARITA
MENDOZA,Petitioners,
vs.
LIM KING GUAN, JOHNNY LIM, NGO CHAP, CRISTINA NGO, GILBERTO LIM, CHENG SEN
WANG, HUNG PANG CHING, CHEN HSIU TSUNG as corporate officers of UNIX
INTERNATIONAL EXPORT CORPORATION, and CHEN HSIU TSUNG, LIM KING GUAN,
HUNG PANG CHING, WANG CHENG SEN, JOHNNY LIM, GILBERTO LIM, NGO CHIAP,
CRISTINA NGO, KATLEEN LIM, MARIE SOLEDAD CLEMENTE, ROSALINA N. LO, KIM PO
GONZALES, and AMELIA NGA as stockholders of record of UNIX INTERNATIONAL
EXPORT CORPORATION, and FUJI ZIPPER MANUFACTURING CORPORATION, Respondents.
DECISION
CORONA, J.:
This is a petition for review seeking for the reversal of the decision 1 of the Court of Appeals dated
May 29, 2001, dismissing the petition for certiorari of Lydia Buenaobra, et. al. and affirming the
orders of the National Labor Relations Commission (NLRC), Third Division, dated November 27,
1998 and February 15, 1999, which respectively directed private respondents to post a cash or
surety bond and dismissed petitioners motion for reconsideration.
The facts follow.
Petitioners were employees of private respondent Unix International Export Corporation (UNIX), a
corporation engaged in the business of manufacturing bags, wallets and the like.
Sometime in 1991 and 1992, petitioners filed several cases against UNIX and its incorporators
and officers for unfair labor practice, illegal lockout/dismissal, underpayment of wages, holiday
pay, proportionate 13th month pay, unpaid wages, interest, moral and exemplary damages and
attorneys fees.
The cases were consolidated and tried jointly. On February 23, 1993, labor arbiter Jose S. de Vera
rendered a decision:
WHEREFORE, all the foregoing premises being considered, judgment is hereby rendered ordering
respondent Unix Export Corporation to pay complainants, as follows:
1. P5,821,838.40 as backwages;
2. P1,484,912.00 as separation pay;
3. P527,748.00 as wage differentials;
4. P33,830.00 as regular holiday pay differentials; and
5. P365,551.95 as proportionate 13th month pay for 1990.

All other claims of the complainants are hereby dismissed for lack of merit. Likewise, the
complaint of Angelina Dimasin is dismissed with prejudice.
There being no appeal by respondents or petitioners, the decision of labor arbiter de Vera
eventually became final and executory. However, petitioners complained that the decision could
not be executed because UNIX allegedly diverted, invested and transferred all its money, assets
and properties to respondent Fuji Zipper Manufacturing Corporation (FUJI) whose stockholders
and officers were also those of UNIX.
Thus, on March 25, 1997, petitioners filed another complaint against respondents UNIX, its
corporate officers and stockholders of record, and FUJI. Petitioners mainly prayed that
respondents UNIX and FUJI be held jointly and severally held liable for the payment of the
monetary awards ordered by labor arbiter de Vera.
On May 31, 1998, labor arbiter Felipe Pati rendered a decision on the second complaint:
WHEREFORE, judgment is hereby rendered piercing the veil of corporate fiction of the two
respondent sister corporations which by virtue of this Decision are now considered as mere
associations of persons jointly and severally pay the subject amount of P8,233,880.30 out of the
properties and unpaid subscription on subscribed Capital Stock of the Board of Directors,
Corporate Officers, Incorporators and Stockholders of said respondent corporations, plus the
amount of P3,000,000.00 and P1,000,000.00 in the form of moral and exemplary damages,
respectively, as well as 10% attorneys fees from any recoverable amounts.
Other claims are hereby dismissed for lack of merit.
On July 30, 1998, private respondents FUJI, its officers and stockholders filed a memorandum on
appeal and a motion to dispense with the posting of a cash or surety appeal bond on the ground
that they were not the employers of petitioners. They alleged that they could not be held
responsible for petitioners claims and to require them to post the bond would be unjust and
unfair, and not sanctioned by law.
On November 27, 1998, the NLRC, Third Division rendered the first assailed order 2:
PREMISES CONSIDERED, instant motion to exempt from filing appeal bond is hereby DENIED for
lack of merit. Respondents are hereby directed to post cash or surety bond in the amount
of P8,233,880.30 within an unextendible period of ten (10) days upon receipt. Otherwise the
appeal shall be dismissed.
Petitioners moved for reconsideration of the said order, arguing that the timely posting of an
appeal bond is mandatory for the perfection of an appeal and should be complied with.
On February 15, 1999, the NLRC, Third Division rendered the second assailed order:
WHEREFORE, premises considered, complainants Motion for Reconsideration is hereby
DISMISSED for lack of merit. Respondents Supplemental Memorandum of Appeal is admitted.
Respondents and counsel are likewise hereby directed to submit a joint declaration under oath
within five (5) days upon receipt. Otherwise the appeal shall be dismissed.
Petitioners filed a petition in the Court of Appeals imputing grave abuse of discretion to the NLRC,
Third Division when it allowed private respondents to post the mandated cash or surety bond
four months after the filing of their memorandum on appeal.
On May 29, 2001, the Court of Appeals dismissed the petition for lack of merit. Hence, this
petition under Rule 45 of the Rules of Court, seeking to set aside the decision of the Court of

Appeals and praying that the orders dated February 15, 1999 and November 27, 1998 of the
NLRC, Third Division be set aside for having been issued without or in excess of its jurisdiction
and with grave abuse of discretion.
The petition has no merit.
The provision of Article 223 of the Labor Code requiring the posting of bond on appeals involving
monetary awards must be given liberal interpretation in line with the desired objective of
resolving controversies on the merits. 3 If only to achieve substantial justice, strict observance of
the reglementary periods may be relaxed if warranted. The NLRC, Third Division could not be said
to have abused its discretion in requiring the posting of bond after it denied private respondents
motion to be exempted therefrom.
It is true that the perfection of an appeal in the manner and within the period prescribed by law
is not only mandatory but jurisdictional, and failure to perfect an appeal has the effect of making
the judgment final and executory. However, technicality should not be allowed to stand in the
way of equitably and completely resolving the rights and obligations of the parties. 4 We have
allowed appeals from the decisions of the labor arbiter to the NLRC, even if filed beyond the
reglementary period, in the interest of justice. The facts and circumstances of the instant case
warrant liberality considering the amount involved and the fact that petitioners already obtained
a favorable judgment on February 23, 1993 against their employer UNIX.1wphi1
In the same decision which has already become final and executory, labor arbiter de Vera held:
This Branch upholds and maintains in the absence of substantial evidence to the contrary that
both respondent corporations have legitimate distinct and separate juridical personalities. Thus,
respondent Fuji Zipper Manufacturing, Inc. has been erroneously impleaded in this case. 5
It is only fair and just that respondent FUJI be afforded the opportunity to be heard on appeal
before the NLRC, specially in the light of labor arbiter Patis later decision holding FUJI jointly and
severally liable with UNIX in the payment of the monetary awards adjudged by labor arbiter de
Vera against UNIX.
In the absence of any showing that the NLRC committed grave abuse of discretion, or otherwise
acted without or in excess of jurisdiction, this Court is bound by its findings. Furthermore, the
Court of Appeals upheld the assailed orders of the said Commission.
WHEREFORE, the petition is hereby DENIED.
SO ORDERED.
G.R. No. 152329

April 22, 2003

ALEJANDRO ROQUERO, petitioner,


vs.
PHILIPPINE AIRLINES, INC., respondent.
PUNO, J.:
Brought up on this Petition for Review is the decision of the Court of Appeals dismissing Alejandro
Roquero as an employee of the respondent Philippine Airlines, Inc.
Roquero, along with Rene Pabayo, were ground equipment mechanics of respondent Philippine
Airlines, Inc. (PAL for brevity). From the evidence on record, it appears that Roquero and Pabayo

were caught red-handed possessing and using Methampethamine Hydrochloride or shabu in a


raid conducted by PAL security officers and NARCOM personnel.
The two alleged that they did not voluntarily indulge in the said act but were instigated by a
certain Jojie Alipato who was introduced to them by Joseph Ocul, Manager of the Airport
Maintenance Division of PAL. Pabayo alleged that Alipato often bragged about the drugs he could
smuggle inside the company premises and invited other employees to take the prohibited drugs.
Alipato was unsuccessful, until one day, he was able to persuade Pabayo to join him in taking the
drugs. They met Roquero along the way and he agreed to join them. Inside the company
premises, they locked the door and Alipato lost no time in preparing the drugs to be used. When
they started the procedure of taking the drugs, armed men entered the room, arrested Roquero
and Pabayo and seized the drugs and the paraphernalia used. 1 Roquero and Pabayo were
subjected to a physical examination where the results showed that they were positive of drugs.
They were also brought to the security office of PAL where they executed written confessions
without the benefit of counsel.2
On March 30, 1994, Roquero and Pabayo received a "notice of administrative charge" 3 for
violating the PAL Code of Discipline. They were required to answer the charges and were placed
under preventive suspension.
Roquero and Pabayo, in their "reply to notice of administrative charge," 4 assailed their arrest and
asserted that they were instigated by PAL to take the drugs. They argued that Alipato was not
really a trainee of PAL but was placed in the premises to instigate the commission of the crime.
They based their argument on the fact that Alipato was not arrested. Moreover, Alipato has no
record of employment with PAL.
In a Memorandum dated July 14, 1994, Roquero and Pabayo were dismissed by PAL. 5 Thus, they
filed a case for illegal dismissal.6
In the Labor Arbiter's decision, the dismissal of Roquero and Pabayo was upheld. The Labor
Arbiter found both parties at fault PAL for applying means to entice the complainants into
committing the infraction and the complainants for giving in to the temptation and eventually
indulging in the prohibited activity. Nonetheless, the Labor Arbiter awarded separation pay and
attorney's fees to the complainants.7
While the case was on appeal with the National Labor Relations Commission (NLRC), the
complainants were acquitted by the Regional Trial Court (RTC) Branch 114, Pasay City, in the
criminal case which charged them with "conspiracy for possession and use of a regulated drug in
violation of Section 16, Article III of Republic Act 6425," on the ground of instigation.
The NLRC ruled in favor of complainants as it likewise found PAL guilty of instigation. It ordered
reinstatement to their former positions but without backwages. 8 Complainants did not appeal
from the decision but filed a motion for a writ of execution of the order of reinstatement. The
Labor Arbiter granted the motion but PAL refused to execute the said order on the ground that
they have filed a Petition for Review before this Court. 9 In accordance with the case of St. Martin
Funeral Home vs. NLRC and Bienvenido Aricayos,10 PAL's petition was referred to the Court of
Appeals.11
During the pendency of the case with the Court of Appeals, PAL, and Pabayo filed a Motion to
Withdraw/Dismiss the case with respect to Pabayo, after they voluntarily entered into a
compromise agreement.12 The motion was granted in a Resolution promulgated by the Former
Thirteenth Division of the Court of Appeals on January 29, 2002. 13
The Court of Appeals later reversed the decision of the NLRC and reinstated the decision of the
Labor Arbiter insofar as it upheld the dismissal of Roquero. However, it denied the award of

separation pay and attorney's fees to Roquero on the ground that one who has been validly
dismissed is not entitled to those benefits. 14
The motion for reconsideration by Roquero was denied. In this Petition for Review on Certiorari
under Rule 45, he raises the following issues:
1. Whether or not the instigated employee shall be solely responsible for an action arising
from the instigation perpetrated by the employer;
2. Can the executory nature of the decision, more so the reinstatement aspect of a labor
tribunal's order be halted by a petition having been filed in higher courts without any
restraining order or preliminary injunction having been ordered in the meantime?
3. Would the employer who refused to reinstate an employee despite a writ duly issued be
held liable to pay the salary of the subject employee from the time that he was ordered
reinstated up to the time that the reversed decision was handed down? 15
I
There is no question that petitioner Roquero is guilty of serious misconduct for possessing and
using shabu. He violated Chapter 2, Article VII, section 4 of the PAL Code of Discipline which
states:
"Any employee who, while on company premises or on duty, takes or is under the
influence of prohibited or controlled drugs, or hallucinogenic substances or narcotics shall
be dismissed."16
Serious misconduct is defined as "the transgression of some established and definite rule of
action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and
not mere error in judgment."17 For serious misconduct to warrant the dismissal of an employee, it
(1) must be serious; (2) must relate to the performance of the employee's duty; and (3) must
show that the employee has become unit to continue working for the employer. 18
It is of public knowledge that drugs can damage the mental faculties of the user. Roquero was
tasked with the repair and maintenance of PAL's airplanes. He cannot discharge that duty if he is
a drug user. His failure to do his job can mean great loss of lives and properties. Hence, even if
he was instigated to take drugs he has no right to be reinstated to his position. He took the drugs
fully knowing that he was on duty and more so that it is prohibited by company rules. Instigation
is only a defense against criminal liability. It cannot be used as a shield against dismissal from
employment especially when the position involves the safety of human lives.
Petitioner cannot complain he was denied procedural due process. PAL complied with the twinnotice requirement before dismissing the petitioner. The twin-notice rule requires (1) the notice
which apprises the employee of the particular acts or omissions for which his dismissal is being
sought along with the opportunity for the employee to air his side, and (2) the subsequent notice
of the employer's decision to dismiss him.19 Both were given by respondent PAL.
II
Article 223 (3rd paragraph) of the Labor Code 20 as amended by Section 12 of Republic Act No.
6715,21 and Section 2 of the NLRC Interim Rules on Appeals under RA No. 6715, Amending the
Labor Code,22 provide that an order of reinstatement by the Labor Arbiter is immediately
executory even pending appeal. The rationale of the law has been explained in Aris (Phil.) Inc. vs.
NLRC:23

"In authorizing execution pending appeal of the reinstatement aspect of a decision of the
Labor Arbiter reinstating a dismissed or separated employee, the law itself has laid down a
compassionate policy which, once more, vivifies and enhances the provisions of the 1987
Constitution on labor and the working man.
xxx

xxx

xxx

These duties and responsibilities of the State are imposed not so much to express
sympathy for the workingman as to forcefully and meaningfully underscore labor as a
primary social and economic force, which the Constitution also expressly affirms with
equal intensity. Labor is an indispensable partner for the nation's progress and stability.
xxx

xxx

xxx

. . . In short, with respect to decisions reinstating employees, the law itself has determined
a sufficiently overwhelming reason for its execution pending appeal.
xxx

xxx

xxx

. . . Then, by and pursuant to the same power (police power), the State may authorize an
immediate implementation, pending appeal, of a decision reinstating a dismissed or
separated employee since that saving act is designed to stop, although temporarily since
the appeal may be decided in favor of the appellant, a continuing threat or danger to the
survival or even the life of the dismissed or separated employee and his family."
The order of reinstatement is immediately executory. The unjustified refusal of the employer to
reinstate a dismissed employee entitles him to payment of his salaries effective from the time
the employer failed to reinstate him despite the issuance of a writ of execution. 24 Unless there is
a restraining order issued, it is ministerial upon the Labor Arbiter to implement the order of
reinstatement. In the case at bar, no restraining order was granted. Thus, it was mandatory on
PAL to actually reinstate Roquero or reinstate him in the payroll. Having failed to do so, PAL must
pay Roquero the salary he is entitled to, as if he was reinstated, from the time of the decision of
the NLRC until the finality of the decision of this Court.
We reiterate the rule that technicalities have no room in labor cases where the Rules of Court are
applied only in a suppletory manner and only to effectuate the objectives of the Labor Code and
not to defeat them.25 Hence, even if the order of reinstatement of the Labor Arbiter is reversed
on appeal, it is obligatory on the part of the employer to reinstate and pay the wages of the
dismissed employee during the period of appeal until reversal by the higher court. On the other
hand, if the employee has been reinstated during the appeal period and such reinstatement
order is reversed with finality, the employee is not required to reimburse whatever salary he
received for he is entitled to such, more so if he actually rendered services during the period.
IN VIEW WHEREOF, the dismissal of petitioner Roquero is AFFIRMED, but respondent PAL is
ordered to pay the wages to which Roquero is entitled from the time the reinstatement order was
issued until the finality of this decision.
SO ORDERED.
G.R. NO. 148247 August 7, 2006
AIR PHILIPPINES CORPORATION, Petitioner,
vs.
ENRICO E. ZAMORA, Respondent.

DECISION
AUSTRIA-MARTINEZ, J.:
Only those pleadings, parts of case records and documents which are material and pertinent, in
that they may provide the basis for a determination of a prima facie case of abuse of discretion,
are required to be attached to a petition for certiorari. A petition lacking such documents
contravenes paragraph 2, Section 1, Rule 65 and may be dismissed outright under Section 3,
Rule 46. However, if it is shown that the omission has been rectified by the subsequent
submission of the documents required, the petition must be given due course or reinstated, if it
had been previously dismissed. 1
Other pleadings and portions of case records need not accompany the petition, unless the court
will require them in order to aid it in its review of the case. Omission of these documents from
the petition will not warrant its dismissal. 2
For being allegedly contrary to the foregoing rule, the Resolutions dated January 11, 2001 and
May 23, 2001 of the Court of Appeals in CA G.R. SP No. 62388 entitled, "Air Philippines
Corporation, Petitioner, versus, National Labor Relations Commission (5th Division) and Enrico
Zamora, Respondents" are sought to be annuled in the Petition for Review on Certiorari under
Rule 45 that is now before us. 3
The facts are not in dispute.
Enrico Zamora (Zamora) was employed with Air Philippines Corporation (APC) as a B-737 Flight
Deck Crew. 4 He applied for promotion to the position of airplane captain and underwent the
requisite training program. After completing training, he inquired about his promotion but APC
did not act on it; instead, it continued to give him assignments as flight deck crew. Thus, Zamora
filed a Complaint with the Labor Arbiter. He argued that the act of APC of withholding his
promotion rendered his continued employment with it oppressive and unjust. He therefore asked
that APC be held liable for constructive dismissal. 5
APC denied that it dismissed complainant. It pointed out that, when the complaint was filed on
May 14, 1997, complainant was still employed with it. It was only on May 22, 1997 that
complainant stopped reporting for work, not because he was forced to resign, but because he
had joined a rival airline, Grand Air. 6
In a Decision dated September 16, 1998, the Labor Arbiter ruled in favor of Zamora and declared
APC liable for constructive dismissal. It held:
WHEREFORE, judgment is hereby rendered finding respondent liable for illegal dismissal and
ordering the respondent to:
1. Reinstate complainant to his position as B-737 Captain without loss of seniority right
immediately upon receipt thereof (sic);
2. Pay complainant his full backwages from May 15, 1997 up to the promulgation of this decision
on (sic) the amount of P1,732,500 (sic);
3. Pay complainant the amount of TWO MILLION PESOS (P2,000,000.00) in the concept of moral
damages and ONE MILLION PESOS (P1,000,000.00) as exemplary damages;
4. Pay attorneys fees equivalent to TEN PERCENT (10%) of the total award. (Emphasis supplied)

SO ORDERED.

Zamora immediately filed a Motion for Execution of the order of reinstatement. On November 6,
1998, the Labor Arbiter granted the motion and issued a writ of execution directing APC to
reinstate complainant to his former position. 8
Meanwhile, APC filed with the NLRC an appeal assailing the finding of the Labor Arbiter that it
was liable for constructive dismissal. 9
The NLRC granted the appeal in a Resolution dated February 10, 1999. It held that no dismissal,
constructive or otherwise, took place for it was Zamora himself who voluntarilly terminated his
employment by not reporting for work and by joining a competitor Grand Air. 10
However, upon Motion for Reconsideration 11 filed by Zamora, the NLRC, in a Resolution dated
December 17, 1999, modified its earlier Resolution, thus:
WHEREFORE, the instant Motion for Reconsideration filed by complainant is DENIED for lack of
merit and the appealed decision AFFIRMED, while the instant petition for injunction filed by
respondent is GRANTED.
However, respondent Air Philippines Corporation is ordered to pay complainant his unpaid
salaries and allowances in the total amount of P198,502.30 within fifteen (15) days from receipt
of this resolution. 12 (Emphasis supplied)
Displeased with the modification, APC sought a partial reconsideration of the foregoing
resolution 13 but the NLRC denied the same. In its Resolution of October 11, 2000, the NLRC
justifed the award of unpaid salaries in this manner:
The grant of salaries and allowances to complainant arose from the order of his reinstatement
which is executory even pending appeal of respondent questioning the same, pursuant to Article
223 of the Labor Code. In the eyes of the law, complainant was as if actually working from the
date respondent received the copy of the appealed decision of the Labor Arbiter directing the
reinstatement of complainant based on his finding that the latter was illegally dismissed from
employment. 14 (Emphasis supplied)
This prompted APC (hereafter referred to as petitioner) to file a Petition for Certiorari with the
Court of Appeals to have the December 17, 1999 Resolution of the NLRC partially annulled and
its October 11, 2000 Resolution set aside on the ground that these were issued with grave abuse
of discretion. Petitioner attached to its petition, certified true copies of the Resolutions of the
NLRC dated February 10, 1999, December 17, 1999 and October 11, 2000 and the Decision of
the Labor Arbiter dated September 16, 1998, and photocopies of the February 24, 1999 notice of
garnishment, March 11, 1999 Order of the Labor Arbiter authorizing Sheriff Fulgencio Lavarez to
implement the writ of execution, and March 23, 1999 Resolution of the NLRC enjoining
implementation of the writ of execution. 15
In a Resolution dated January 11, 2001, the Court of Appeals dismissed the petition for failure of
petitioner to "x x x attach copies of all pleadings (such complaint, answer, position paper) and
other material portions of the record as would support the allegations therein x x x." 16
Petitioner filed a Motion for Reconsideration from the said Resolution and attached to it the
pleadings and portions of the case record required by the Court of Appeals. 17 Zamora (hereafter
referred to as respondent) filed an Opposition to Motion for Reconsideration. 18
In a Resolution dated May 23, 2001, the Court of Appeals denied the motion for reconsideration,
thus:

Up for consideration is petitioners motion for reconsideration (pages 64-71 of the Rollo) of this
Courts resolution of dismissal (page 54, id.), which was promulgated on January 11, 2001.
Considering private respondents undisputed comment on said motion (pages 159-161. id.), the
same is hereby DENIED. The resolution of dismissal stands. 19 (Emphasis supplied)
And so, herein Petition for Review on Certiorari under Rule 45. Petitioner would have us annul
and set aside the January 11, 2001 and May 23, 2001 Resolutions of the Court of Appeals on the
following grounds:
A. The Honorable Court of Appeals did not rule in accordance with prevailing laws and
jurisprudence when it dismissed the petition for certiorari filed by petitioner APC on the ground
that petitioner APC supposedly failed to attach copies of all pleadings (such as complaint,
answer, position papers) and other materials portions of the record as would support the
allegations therein.
B. The Honorable Court of Appeals did not rule in accordance with prevailing laws and
jurisprudence when it denied petitioner APCs motion for reconsideration in spite of the fact that
petitioner APC submitted copies of all pleadings and documents mentioned in its petition for
certiorari.
C. The Honorable Court of Appeals did not rule in accordance with prevailing laws and
jurisprudence when it denied petitioner APCs motion for reconsideration on a new ground
namely, the alleged failure of petitioner APC to dispute respondent Zamoras comment and/or
opposition to motion for reconsideration ("Opposition"), in spite of the fact that (i) the Honorable
Court of Appeals did not order petitioner APC to reply to the said opposition; and (ii) the said
Opposition is patently unmeritorious. 20
Respondent filed his Comment to the petition.

21

We grant the petition.


We agree with petitioner on the first and second issues.
In its Resolution of January 11, 2001, the Court of Appeals cited as ground for the dismissal of the
petition forcertiorari its lack of certified true copies of the pleadings and material portions of the
case record. This is an erroneous ruling, petitioner insists, for the deficiency was excusable:
pleadings and other portions of the case records were not attached to the petition because these
documents had no bearing on the sole issue raised therein, which was, whether the NLRC
committed grave abuse of discretion in awarding unpaid salaries to respondent despite having
adjudged the latter at fault for abandonment of employment. 22
Respondent disagrees. He argues that the requirements under Section 1, Rule 65 are mandatory
and jurisdictional; petitioners failure to comply with them was a valid ground for the dismissal of
its petition. 23
Both views are actually correct.
Certiorari, being an extraordinary remedy, the party seeking it must strictly observe the
requirements for its issuance. 24 Some of these requirements are found in paragraph 2, Section 1
of Rule 65, which reads:
SECTION. 1. Petition for certiorari.
xxxx

The petition shall be accompanied by a certified true copy of the judgment, order or resolution
subject thereof, copies of all pleadings and documents relevant and pertinent thereto x x x.
These requirements are emphasized in Section 3, Rule 46, thus:
SEC. 3. Contents and filing of petition; effect of non-compliance with requirements.
xxxx
[The petition] shall be x x x accompanied by a clearly legible duplicate original or certified true
copy of the judgment, order, resolution, or ruling subject thereof, such material portions of the
record as are referred to therein, and other documents relevant or pertinent thereto x x x.
xxxx
The failure of the petitioner to comply with any of the foregoing requirements shall be sufficient
ground for the dismissal of the petition.
Note that the foregoing rules speak of two sets of documents to be attached to the petition. The
first set consists of certified true copies of the judgment, order or resolution subject of the
petition. Duplicate originals or certified true copies thereof must be appended to enable the
reviewing court to determine whether the court, body or tribunal, which rendered the same
committed grave abuse of discretion. 25 The second set consists of the pleadings, portions of the
case record and other documents which are material and pertinent to the petition. 26Mere
photocopies thereof may be attached to the petition. 27 It is this second set of documents which
is relevant to this case.
As a general rule, a petition lacking copies of essential pleadings and portions of the case record
may be dismissed. 28 This rule, however, is not petrified. As the exact nature of the pleadings and
parts of the case record which must accompany a petition is not specified, much discretion is left
to the appellate court to determine the necessity for copies of pleading and other
documents. 29 There are, however, guideposts it must follow.
First, not all pleadings and parts of case records are required to be attached to the petition. Only
those which are relevant and pertinent must accompany it. The test of relevancy is whether the
document in question will support the material allegations in the petition, whether said
document will make out a prima facie case of grave abuse of discretion as to convince the court
to give due course to the petition. 30
Second, even if a document is relevant and pertinent to the petition, it need not be appended if it
is shown that the contents thereof can also found in another document already attached to the
petition. Thus, if the material allegations in a position paper are summarized in a questioned
judgment, it will suffice that only a certified true copy of the judgment is attached. 31
Third, a petition lacking an essential pleading or part of the case record may still be given due
course or reinstated (if earlier dismissed) upon showing that petitioner later submitted the
documents required, 32 or that it will serve the higher interest of justice that the case be decided
on the merits. 33
It is readily apparent in this case that the Court of Appeals was overzealous in its enforcement of
the rules.
To begin with, the pleadings and other documents it required of petitioner were not at all relevant
to the petition. It is noted that the only issue raised by petitioner was whether the NLRC
committed grave abuse of discretion in granting respondent unpaid salaries while declaring him

guilty of abandonment of employment. Certainly, copies of the Resolutions of the NLRC dated
February 10, 1999, December 17, 1999 and October 11, 2000 would have sufficed as basis for
the Court of Appeals to resolve this issue. After all, it is in these Resolutions that the NLRC
purportedly made contrary findings.
There was no need at all for copies of the position papers and other pleadings of the parties;
these would have only cluttered the docket. Besides, a summary of the material allegations in
the position papers can be found in both the September 16, 1998 Decision of the Labor Arbiter
and the February 10, 1999 Resolution of the NLCR. Quick reference to copies of the decision and
resolution would have already satisfied any question the court may have had regarding the
pleadings of the parties.
The attachments of petitioner to its petition for certiorari were already sufficient even without the
pleadings and portions of the case record. It was therefore unreasonable of the Court of Appeals
to have dismissed it. More so that petitioner later corrected the purported deficiency by
submitting copies of the pleadings and other documents.
This brings us to the third issue. Again, we agree with petitioner that the Court of Appeals erred
in denying its motion for reconsideration.
In its May 23, 2001 Resolution, the Court of Appeals cited as basis for denying the motion for
reconsideration of petitioner from the January 11, 2000 Resolution the latters purported failure
to contravene the Opposition filed by respondent. 34 This is certainly a curious ground to deny a
motion for reconsideration. As pointed out by petitioner, a reply to an opposition to a motion for
reconsideration is not filed as a matter of course. An order from the court may issue though to
direct the movant to file a reply. In this case, no such order came from the Court of Appeals
instructing petitioner to counter the Opposition filed by respondent. Hence, it cannot be assumed
that in failing to file a reply, petitioner, in effect, conceded to the Opposition of respondent.
It is not as if the Opposition which respondent filed required any answer. The matters discussed
therein were not even germane to the issue raised in the motion for reconsideration. It was as
though respondent passed in silence petitioners arguments against the January 11, 2000
Resolution. If we are to be technical about it, it was instead the motion for reconsideration of
petitioner which was not contravened by respondent. It was error on the part of the Court of
Appeals to have denied it.
In sum, we annul and set aside the January 11, 2000 and May 23, 2001 Resolutions of the Court
of Appeals. There is no more obstacle then to the petition for certiorari taking its course.
However, rather than remand it to the Court of Appeals for resolution, we resolve it here and now
to expedite matters. 35
We hold that the NLRC did not commit grave abuse of discretion in holding petitioner liable to
respondent forP198,502.30.
The premise of the award of unpaid salary to respondent is that prior to the reversal by the NLRC
of the decision of the Labor Arbiter, the order of reinstatement embodied therein was already the
subject of an alias writ of execution even pending appeal. Although petitioner did not comply
with this writ of execution, its intransigence made it liable nonetheless to the salaries of
respondent pending appeal. There is logic in this reasoning of the NLRC. In Roquero v. Philippine
Airlines, Inc., we resolved the same issue as follows:
We reiterate the rule that technicalities have no room in labor cases where the Rules of Court are
applied only in a suppletory manner and only to effectuate the objectives of the Labor Code and
not to defeat them. [36][25] Hence, even if the order of reinstatement of the Labor Arbiter is
reversed on appeal, it is obligatory on the part of the employer to reinstate and pay the wages of

the dismissed employee during the period of appeal until reversal by the higher court. On the
other hand, if the employee has been reinstated during the appeal period and such
reinstatement order is reversed with finality, the employee is not required to reimburse whatever
salary he received for he is entitled to such, more so if he actually rendered services during the
period.37
There is a policy elevated in this ruling. In Aris (Phil.) Inc. v. National Labor Relations Commission,
we held:
In short, with respect to decisions reinstating employees, the law itself has determined a
sufficiently overwhelming reason for its execution pending appeal.
xxxx
x x x Then, by and pursuant to the same power (police power), the State may authorize an
immediate implementation, pending appeal, of a decision reinstating a dismissed or separated
employee since that saving act is designed to stop, although temporarily since the appeal may
be decided in favor of the appellant, a continuing threat or danger to the survival or even the life
of the dismissed or separated employee and his family. 38
We cannot do less. The petition for certiorari in CA G.R. SP No. 62388 must be dismissed.
WHEREFORE, the petition is GRANTED.The January 11, 2000 and May 23, 2001 Resolutions of
the Court of Appeals are ANNULLED AND SET ASIDE, and the Petition for Certiorari docketed
as CA G.R. SP No. 62388 isDISMISSED. The Resolutions dated December 17, 1999 and October
11, 2000 of the National Labor Relations Commission are AFFIRMED.
Costs against petitioner.
SO ORDERED.
G.R. No. 177026

January 30, 2009

LUNESA O. LANSANGAN AND ROCITA CENDAA, Petitioners,


vs.
AMKOR TECHNOLOGY PHILIPPINES, INC., Respondent.
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
CARPIO MORALES, J.:
An anonymous e-mail was sent to the General Manager of Amkor Technology Philippines
(respondent) detailing allegations of malfeasance on the part of its supervisory employees
Lunesa Lansangan and Rosita Cendaa (petitioners) for "stealing company time." 1 Respondent
thus investigated the matter, requiring petitioners to submit their written explanation. In
handwritten letters, petitioners admitted their wrongdoing.2 Respondent thereupon terminated
petitioners for "extremely serious offenses" as defined in its Code of Discipline, 3 prompting
petitioners to file a complaint for illegal dismissal against it. 4
Labor Arbiter Arthur L. Amansec, by Decision of October 20, 2004, 5 dismissed petitioners
complaint, he having found them guilty of

"[s]wiping another employees [sic] I.D. card or requesting another employee to swipe ones I.D.
card to gain personal advantage and/or in the interest of cheating", an offense of dishonesty
punishable as a serious form of misconduct and fraud or breach of trust under Article 282 of the
Labor Code:
xxxx
which allows the dismissal of an employee for a valid cause. (Emphasis and underscoring
supplied)
The Arbiter, however, ordered the reinstatement of petitioners to their former positions without
backwages "as a measure of equitable and compassionate relief" owing mainly to petitioners
prior unblemished employment records, show of remorse, harshness of the penalty and defective
attendance monitoring system of respondent.6
Respondent assailed the reinstatement aspect of the Arbiters order before the National Labor
Relations Commission (NLRC).
In the meantime, petitioners, without appealing the Arbiters finding them guilty of "dishonesty
as a form of serious misconduct and fraud or breach of trust," moved for the issuance of a "writ
of reinstatement."7
After a series of oppositions, motions and orders, 8 the Arbiter issued an alias writ of execution
following which respondents bank account at Equitable-PCI Bank was garnished. Respondent
thereupon moved for the quashal of the alias writ of execution and lifting of the notice of
garnishment, which the Arbiter denied by Order of January 26, 2005, drawing respondent to
appeal to the NLRC.
After consolidating respondents appeal from the Labor Arbiters order of reinstatement and
subsequent appeal/order denying the quashal of the alias writ of execution and lifting of the
notice of garnishment, the NLRC, by Resolution of June 30, 2005, 9 granted respondents appeals
by deleting the reinstatement aspect of the Arbiters decision and setting aside the Arbiters Alias
Writ of Execution and Notice of Garnishment. Thus the NLRC disposed as follows:
ACCORDINGLY, the appeal is hereby GRANTED. The Labor Arbiters Decision dated October 20,
2004 is hereby MODIFIED by DELETING the portion that ruled for appelle[e]s
reinstatement. Consequently, the Writ of Execution dated November 19, 2004, the
subsequent Alias Writ of Execution dated January 26, 2005, and the Notice of Garnishment dated
January 14, 2005 served upon Equitable PCI Bank by Sheriff Agripina Sangel are hereby ordered
to be SET ASIDE.
SO ORDERED. (Underscoring supplied)
Petitioners motion for reconsideration of the NLRC Resolution having been denied, they filed a
petition for certiorari before the Court of Appeals which, by Decision 10 of September 19, 2006,
while affirming the finding that petitioners were guilty of misconduct and the like, ordered
respondent to "pay petitioners their corresponding backwages without qualification and
deduction for the period covering October 20, 2004 (date of the Arbiters decision) up to June 30,
2005 (date of the NLRC Decision)," citing Article 223 of the Labor Code and Roquero v. Philippine
Airlines.11
Both parties filed their respective motions for partial reconsideration which were denied. 12 Only
petitioners have come to this Court via the present petition for review, 13 contending that:
I

WITH ALL DUE RESPECT, THE ORDER OF THE HONORABLE COURT OF APPEALS LIMITING THE
PAYMENT OF BACKWAGES [TO] THE PETITIONERS FROM OCTOBER 20, 2004 (ARBITER DECISION)
UP TO JUNE 30, 2005 (NLRC DECISION) ONLY IS CONTRARY TO THE CASE OF ALEJANDRO
ROQUERO VS. PHILIPPINE AIRLINES, INC.[,] G.R. NO. 152329, APRIL [22,] 2003 [AND]
II
. . . THE HONORABLE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION
INCONCLUDING THAT THE PETITIONERS COMMITTED SERIOUS MISCONDUCT, FRAUD,
DISHONESTY AND BREACH OF TRUST. BUT EVEN ASSUMING THAT THE PETITIONERS COMMITTED
THE SWIPING IN OF IDENTIFICATION CARD, THE PENALTY OF DISMISSAL IS TOO SEVERE, HARSH
AND CONTRARY TO ARTICLE 282 OF THE LABOR CODE OF THE PHILIPPINES AND EXISTING
JURISPRUDENCE.14
Since respondent did not appeal from the appellate courts decision, the said courts order for it
to pay backwages to petitioners for the therein specified period has become final.
Petitioners highlight the Courts ruling in Roquero v. Philippine Airlines 15 where the therein
employer was ordered to pay the wages to which the therein employee was entitled from the
time the reinstatement order was issued until the finality of this Courts decision 16 in favor of the
therein employee. Thus, petitioners contend that the payment of backwages should not be
computed only up to the promulgation by the NLRC of its decision.
In its Comment,17 respondent asserts that, inter alia, petitioners reliance on Roquero is
misplaced in view of the glaring factual differences between said case and the present case.
The petition fails.
The decision of the Arbiter finding that petitioners committed "dishonesty as a form of serious
misconduct and fraud, or breach of trust" had become final, petitioners not having appealed the
same before the NLRC as in fact they even moved for the execution of the reinstatement aspect
of the decision. It bears recalling that it was only respondent which assailed the Arbiters decision
to the NLRC to solely question the propriety of the order for reinstatement, and it
succeeded.1avvphil.zw+
Roquero, as well as Article 22318 of the Labor Code on which the appellate court also relied, finds
no application in the present case. Article 223 concerns itself with an interim relief, granted to a
dismissed or separated employee while the case for illegal dismissal is pending appeal, as what
happened in Roquero. It does not apply where there is no finding of illegal dismissal, as in the
present case.
The Arbiter found petitioners dismissal to be valid. Such finding had, as stated earlier, become
final, petitioners not having appealed it. Following Article 279 which provides:
xxxx
In cases of regular employment, the employer shall not terminate the services of an employee
except for a just cause or when authorized by this Title. An employee who is unjustly dismissed
from work shall be entitled to reinstatement without loss of seniority rights and other privileges
and to his full backwages, inclusive of allowances, and to his other benefits or their monetary
equivalent computed from the time his compensation was withheld from him up to the time of
his actual reinstatement (Emphasis, underscoring and italics supplied),
petitioners are not entitled to full backwages as their dismissal was not found to be illegal.
Agabon v. NLRC19 so states payment of backwages and other benefits is justified only if the

employee was unjustly dismissed.


WHEREFORE, the petition is DENIED.
No costs.
SO ORDERED.
G.R. Nos. 142732-33

December 4, 2007

MARILOU S. GENUINO, petitioner,


vs.
NATIONAL LABOR RELATIONS COMMISSION, CITIBANK, N.A., WILLIAM FERGUSON, and
AZIZ RAJKOTWALA, respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. Nos. 142753-54
CITIBANK, N.A., WILLIAM FERGUSON, and AZIZ RAJKOTWALA, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and MARILOU GENUINO, respondents.
DECISION
VELASCO, JR., J.:
The Case
This Petition for Review on Certiorari under Rule 45 seeks to set aside the September 30, 1999
Decision1 and March 31, 2000 Resolution2 of the Court of Appeals (CA) in the consolidated cases
docketed as CA-G.R. SP Nos. 51532 and 51533. The appellate court dismissed the parties'
petitions involving the National Labor Relations Commission's (NLRC's) Decision 3 and
Resolution,4 which held that Marilou S. Genuino was validly dismissed by Citibank, N.A. (Citibank).
The NLRC likewise ordered the payment of salaries from the time that Genuino was reinstated in
the payroll to the date of the NLRC decision. Upon reconsideration, however, the CA modified its
decision and held that Citibank failed to observe due process in CA-G.R. SP No. 51532; hence,
Citibank should indemnify Genuino in the amount of PhP 5,000. Both parties are now before this
Court assailing portions of the CA's rulings. In G.R. Nos. 142732-33, Genuino assails the CA's
finding that her dismissal was valid. In G.R. Nos. 142753-54, Citibank questions the CA's finding
that Citibank violated Genuino's right to procedural due process and that Genuino has a right to
salaries.
Citibank is an American banking corporation duly licensed to do business in the Philippines.
William Ferguson was the Manila Country Corporate Officer and Business Head of the Global
Finance Bank of Citibank while Aziz Rajkotwala was the International Business Manager for the
Global Consumer Bank of Citibank.5
Genuino was employed by Citibank sometime in January 1992 as Treasury Sales Division Head
with the rank of Assistant Vice-President. She received a monthly compensation of PhP
60,487.96, exclusive of benefits and privileges. 6
On August 23, 1993, Citibank sent Genuino a letter charging her with "knowledge and/or
involvement" in transactions "which were irregular or even fraudulent." In the same letter,

Genuino was informed she was under preventive suspension. 7


Genuino wrote Citibank on September 13, 1993 and asked the bank the following:
a. Confront our client with the factual and legal basis of your charges, and afford her an
opportunity to explain;
b. Substantiate your charge of fraudulent transactions against our client; or if the same
cannot be substantiated;
c. Correct/repair/compensate the damage you have caused our client. 8
On September 13, 1993, Citibank, through Victorino P. Vargas, its Country Senior Human
Resources Officer, sent a letter to Genuino, the relevant portions of which read:
As you are well aware, the bank served you a letter dated August 23, 1993 advising you
that ongoing investigations show that you are involved and/or know of irregular
transactions which are at the very least in conflict with the bank's interest, and, may even
be fraudulent in nature.
These transactions are those involving Global Pacific and/or Citibank and the following
bank clients, among others:
1. Norma T. de Jesus
2. Carmen Intengan/Romeo Neri
3. Mario Mamon
4. Vienna Ochoa/IETI
5. William Samara
6. Roberto Estandarte
7. Rita Browner
8. Ma. Redencion Sumpaico
9. Cesar Bautista
10. Teddy Keng
11. NDC-Guthrie
12. Olivia Sy
In view of the foregoing, you are hereby directed to explain in writing three (3) days from
your receipt hereof why your employment should not be terminated in view of your
involvement in these irregular transactions. You are also directed to appear in an
administrative investigation of the matter which is set on Tuesday, Sept. 21, 1993 at 2:00
P.M. at the HR Conference Room, 6th Floor, Citibank Center. You may bring your counsel if
you so desire.9

Genuino's counsel replied through a letter dated September 17, 1993, demanding for a bill of
particulars regarding the charges against Genuino. Citibank's counsel replied on September 20,
1993, as follows:
1.2. [T]he bank has no intention of converting the administrative investigation of this case
to a full blown trial. What it is prepared to do is give your client, as required by law and
Supreme Court decisions, an opportunity to explain her side on the issue of whether she
violated the conflict of interest ruleeither in writing (which could be in the form of a
letter-reply to the September 13, 1993 letter to Citibank, N.A.) or in person, in the
administrative investigation which is set for tomorrow afternoon vis--vis the bank
clients/parties mentioned in the letter of Citibank, N.A.
xxxx
2.2. You will certainly not deny that we have already fully discussed with you what is
meant by the conflict with the bank's interest vis--vis the bank clients/parties named in
the September 13, 1993 letter of Citibank to Ms. Genuino. As we have repeatedly
explained to you, what the bank meant by it is that your client and Mr. Dante Santos, using
the facilities of their family corporations (Torrance and Global) appear to have participated
in the diversion of bank clients' funds from Citibank to, and investment thereof in, other
companies and that they made money in the process, in violation of the conflict of law
rule. It is her side of this issue that Citibank, N.A. is waiting to receive/hear from Ms.
Genuino.10
Genuino did not appear in the administrative investigation held on September 21, 1993. Her
lawyers wrote a letter to Citibank's counsel asking "what bank clients' funds were diverted from
the bank and invested in other companies, the specific amounts involved, the manner by which
and the date when such diversions were purportedly affected." In reply, Citibank's counsel noted
Genuino's failure to appear in the investigation and gave Genuino up to September 23, 1993 to
submit her written explanation. Genuino did not submit her written explanation. 11
On September 27, 1993, Citibank informed Genuino of the result of their investigation. It found
that Genuino with Santos used "facilities of Genuino's family corporation, namely, Global Pacific,
personally and actively participated in the diversion of bank clients' funds to products of other
companies that yielded interests higher than what Citibank products offered, and that Genuino
and Santos realized substantial financial gains, all in violation of existing company policy and the
Corporation Code, which for your information, carries a penal sanction." 12
Genuino's employment was terminated by Citibank on grounds of (1) serious misconduct, (2)
willful breach of the trust reposed upon her by the bank, and (3) commission of a crime against
the bank.13
On October 15, 1993, Genuino filed before the Labor Arbiter a Complaint 14 against Citibank
docketed as NLRC Case No. 00-10-06450-93 for illegal suspension and illegal dismissal with
damages and prayer for temporary restraining order and/or writ of preliminary injunction. The
Labor Arbiter rendered a Decision15 on May 2, 1994, the dispositive portion of which reads:
WHEREFORE, finding the dismissal of the complainant Marilou S. Genuino to be without
just cause and in violation of her right to due process, respondent CITIBANK, N.A., and any
and all persons acting on its behalf or by or under their authority are hereby ordered to
reinstate complainant immediately to her former position as Treasury Sales Division Head
or its equivalent without loss of seniority rights and other benefits, with backwages from
August 23, 1993 up to April 30, 1994 in the amount of P493,800.00 (P60,000 x 8.23 mos.)
subject to adjustment until reinstated actually or in the payroll.

Respondents are likewise ordered to pay complainant the amount of 1.5 Million Pesos and
P500,000.00 by way of moral and exemplary damages plus 10% of the total monetary
award as attorney's fees.16
Both parties appealed to the NLRC. The NLRC, in its September 3, 1994 Decision in NLRC-NCR
Case No. 00-10-06450-93 (CA No. 006947-94), reversed the Labor Arbiter's decision with the
following modification:
WHEREFORE, Judgment is hereby rendered (1) SETTING ASIDE the appealed decision of
the Labor Arbiter; (2) DECLARING the dismissal of the complainant valid and legal on the
ground of serious misconduct and breach of trust and confidence and consequently
DISMISSING the complaint a quo; but (3) ORDERING the respondent bank to pay the
salaries due to the complainant from the date it reinstated complainant in the payroll
(computed at P60,000.00 a month, as found by the Labor Arbiter) up to and until the date
of this decision.
SO ORDERED.17
The parties' motions for reconsideration were denied by the NLRC in a resolution dated October
28, 1994.18
The Ruling of the Court of Appeals
On December 6, 1994, Genuino filed a petition for certiorari docketed as G.R. No. 118023 with
this Court. Citibank's petition for certiorari, on the other hand, was docketed as G.R. No. 118667.
In the January 27, 1999 Resolution, we referred these petitions to the CA pursuant to our ruling
in St. Martin Funeral Home v. NLRC.19
Genuino's petition before the CA was docketed as CA-G.R. SP No. 51532 while Citibank's petition
was docketed as CA-G.R. SP No. 51533. Genuino prayed for the reversal of the NLRC's decision
insofar as it declared her dismissal valid and legal. Meanwhile, Citibank questioned the NLRC's
order to pay Genuino's salaries from the date of reinstatement until the date of the NLRC's
decision.
The CA promulgated its decision on September 30, 1999, denying due course to and dismissing
both petitions.20Both parties filed motions for reconsideration and on March 31, 2000, the
appellate court modified its decision and held:
WHEREFORE, save for the MODIFICATION ordering Citibank, N.A. to pay Ms. Marilou S.
Genuino five thousand pesos (P5,000.00) as indemnity for non-observance of due process
in CA-G.R. SP No. 51532, this Court's 30 September 1999 decision
is REITERATED and AFFIRMED in all other respects.
SO ORDERED.21
Hence, we have this petition.
The Issue
WHETHER OR NOT THE DISMISSAL OF GENUINO IS FOR A JUST CAUSE AND IN ACCORDANCE
WITH DUE PROCESS
In G.R. Nos. 142732-33, Genuino contends that Citibank failed to observe procedural due process
in terminating her employment. This failure is allegedly an indication that there were no valid

grounds in dismissing her. In G.R. Nos. 142753-54, Citibank questions the ruling that Genuino has
a right to reinstatement under Article 223 of the Labor Code. Citibank contends that the Labor
Arbiter's finding is not supported by evidence; thus, the decision is void. Since a void decision
cannot give rise to any rights, Citibank opines that there can be no right to payroll reinstatement.
The dismissal was for just cause but lacked due process
We affirm that Genuino was dismissed for just cause but without the observance of due process.
In a string of cases, 22 we have repeatedly said that the requirement of twin notices must be met.
In the recent case of King of Kings Transport, Inc. v. Mamac, we explained:
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 prepare adequately for
their defense. This should be construed as a period of at least five (5) calendar days from
receipt of the notice to give the employees an opportunity to study the accusation against
them, consult a union official or lawyer, gather data and evidence, and decide on the
defenses they will raise against the complaint. Moreover, in order to enable the employees
to intelligently prepare their explanation and defenses, the notice should contain a
detailed narration of the facts and circumstances that will serve as basis for the charge
against the employees. A general description of the charge will not suffice. Lastly, the
notice should specifically mention which company rules, if any, are violated and/or which
among the grounds under Art. 282 is being charged against the employees.
(2) After serving the first notice, the employers should schedule and conduct
a hearing or conferencewherein the employees will be given the opportunity to: (1)
explain and clarify their defenses to the charge against them; (2) present evidence in
support of their defenses; and (3) rebut the evidence presented against them by the
management. During the hearing or conference, the employees are given the chance to
defend themselves personally, with the assistance of a representative or counsel of their
choice. Moreover, this conference or hearing could be used by the parties as an
opportunity to come to an amicable settlement.
(3) After determining that termination of employment is justified, the employers shall
serve the employees awritten notice of termination indicating that: (1) all
circumstances involving the charge against the employees have been considered; and (2)
grounds have been established to justify the severance of their employment. 23
The Labor Arbiter found that Citibank failed to adequately notify Genuino of the charges against
her. On the contrary, the NLRC held that "the function of a 'notice to explain' is only to state the
basic facts of the employer's charges, which x x x the letters of September 13 and 17, 1993 in
question have fully served."24
We agree with the CA that the dismissal was valid and legal, and with its modification of the
NLRC ruling that PhP 5,000 is due Genuino for failure of Citibank to observe due process.
The Implementing Rules and Regulations of the Labor Code provide that any employer seeking to
dismiss a worker shall furnish the latter a written notice stating the particular acts or omissions
constituting the grounds for dismissal.25 The purpose of this notice is to sufficiently apprise the
employee of the acts complained of and enable him/her to prepare his/her defense.

In this case, the letters dated August 23, September 13 and 20, 1993 sent by Citibank did not
identify theparticular acts or omissions allegedly committed by Genuino. The August 23, 1993
letter charged Genuino with having "some knowledge and/or involvement" in some transactions
"which have the appearance of being irregular at the least and may even be fraudulent." The
September 13, 1993 letter, on the other hand, mentioned "irregular transactions" involving
Global Pacific and/or Citibank and 12 bank clients. Lastly, the September 20, 1993 letter stated
that Genuino and "Mr. Dante Santos, using the facilities of their family corporations (Torrance and
Global) appear to have participated in the diversion of bank clients' funds from Citibank to, and
investment thereof in, other companies and that they made money in the process, in violation of
the conflict of law rule [sic]." The extent of Genuino's alleged knowledge and participation in the
diversion of bank's clients' funds, manner of diversion, and amounts involved; the acts attributed
to Genuino that conflicted with the bank's interests; and the circumstances surrounding the
alleged irregular transactions, were not specified in the notices/letters.
While the bank gave Genuino an opportunity to deny the truth of the allegations in writing and
participate in the administrative investigation, the fact remains that the charges were too
general to enable Genuino to intelligently and adequately prepare her defense.
The two-notice requirement of the Labor Code is an essential part of due process. The first notice
informing the employee of the charges should neither be pro-forma nor vague. It should set out
clearly what the employee is being held liable for. The employee should be afforded ample
opportunity to be heard and not mere opportunity. As explained in King of Kings Transport, Inc.,
ample opportunity to be heard is especially accorded the employees sought to be dismissed after
they are specifically informed of the charges in order to give them an opportunity to refute such
accusations leveled against them. Since the notice of charges given to Genuino is inadequate,
the dismissal could not be in accordance with due process.
While we hold that Citibank failed to observe procedural due process, we nevertheless find
Genuino's dismissal justified.
Citibank maintains that Genuino was aware of the bank's Corporate Policy Manual specifically
Chapter 3 on "Principles and Policies" with regard to avoiding conflicts of interest. She had even
submitted a Conflict of Interest Survey to Citibank. In that survey, she denied any knowledge of
engaging in transactions in conflict with Citibank's interests. Citibank, for its part, submitted
evidence showing 99% ownership of Global stocks by Genuino and Santos. In July 1993, Citibank
discovered that Genuino and Santos were instrumental in the withdrawal by bank depositors of
PhP 120 million of investments in Citibank. This amount was subsequently invested in another
foreign bank, Internationale Nederlanden Bank, N.V., under the control of Global and Torrance,
another corporation controlled by Genuino and Santos. 26 Citibank also filed two criminal
complaints against Genuino and Santos for violations of the conflict of interest rule provided in
Sec. 31 in relation to Sec. 14427 of the Corporation Code.28
We note also that during the proceedings before the Labor Arbiter, Citibank presented the
following affidavits, with supporting documentary evidence against Genuino:
1) Vic Lim, an officer of Citibank who investigated the anomalies of Genuino and Santos,
concluded that Genuino and Santos realized substantial financial gains out of the transfer
of monies as supported by the following documents:
1) [S]ome of the Term Investment Applications (TIA), Applications for Money Transfer, all
filled up in the handwriting of Ms. Marilou Genuino. These documents cover/show the
transfer of the monies of the Citibank clients from their money placements/deposits with
Citibank, N.A. to Global and/or Torrance.
2) [S]ome of the checks that were drawn by Global and Torrance against their Citibank

accounts in favor of the other companies by which Global and Torrance transferred the
monies of the bank clients to the other companies.
3) [S]ome of the checks drawn by the other companies in favor of Global or Torrance by
which the other companies remitted back to Global and/or Torrance the monies of the
bank clients concerned.
4) [S]ome of the checks drawn by Global and Torrance against their Citibank accounts in
favor of Mr. Dante Santos and Ms. Marilou Genuino, covering the shares of the latter in the
spreads or margins Global and Torrance had derived from the investments of the monies of
the Citibank clients in the other companies.
5) [S]ome of the checks drawn by Torrance and Global in favor of Citibank clients by which
Global and Torrance remitted back to said bank clients their principal investments (or
portions thereof) and the rates of interests realized from their investment placed with the
other companies less the spreads made by Global and/or Torrance, Mr. Dante L. Santos
and Ms. Marilou Genuino.29
In Lim's Reply-Affidavit with attached supporting documents, he stated that out of the competing
money placement activities, Genuino and Santos derived financial gains amounting to PhP
2,027,098.08 and PhP 2,134,863.80, respectively. 30
2) Marilyn Bautista, a Treasury Sales Specialist in the Treasury Department of the Global
Consumer Bank of Citibank and whose superiors were Genuino and Santos, stated that:
Based on documents that have subsequently come to my knowledge, I realized that the
two (Genuino and Dante L. Santos), with the active cooperation of Redencion Sumpaico
(the Accountant of Global) had brokered for their own benefits and/or of Global the sale
of the financial products of Citibank called "Mortgage Backed Securities" or MBS and in the
process made money at the expense of the (Citibank) investors and the bank. 31
3) Patrick Cheng attested to other transactions from which Genuino, Santos, and Global brokered
the Mortgage Backed Securities (MBS), namely: ICC/Nemesio and Olivia Sy transaction, San
Miguel Corporation/ICC, CIPI/Asiatrust, FAPE, PERAA and Union Bank, and NDC-Guthrie
transactions.32
In her defense, Genuino asserts that Citibank has no evidence of any wrongful act or omission
imputable to her. According to her, she did not try to conceal from the bank her participation in
Global and she even disclosed the information when Global designated Citibank as its depositary.
She avers there was no conflict of interest because Global was not engaged in Citibank's
accepting deposits and granting loans, nor in money placement activities that compete with
Citibank's activities; and neither does Citibank invest in the outlets used by Global. She claims
that the controversy between Santos and Global had already been amicably resolved in a
Compromise Agreement between the two parties. 33
Genuino further asserts that the letter of termination did not indicate what existing company
policy had been violated, and what acts constituted serious misconduct or willful breach of the
trust reposed by the bank. She claims that Lim's testimony that the checks issued by Global in
her name were profits was malicious, hearsay, and lacked factual basis. She also posits that as to
the withdrawals of clients, she could not possibly dictate on the depositors. She pointed out that
the depositors even sent Citibank a letter dated August 25, 1993 informing the bank that the
withdrawals were made upon their express instructions. Genuino avers the bank's loss of
confidence should have to be proven by substantial evidence, setting out the facts upon which
loss of confidence in the employee may be made to rest. 34

Contrary to the Labor Arbiter's finding, the NLRC found the following facts supported by the
records:
a) Respondent bank has a conflict of interest rule, embodied in Chapter 3 of its Corporate
Policy Manual, prohibiting the officers of the bank from engaging in business activities,
situations or circumstances that are in conflict with the interest of the bank.
b) Complainant was familiar with said conflict of interest rule of the bank and of her duty
to disclose to the bank in writing any personal circumstances which conflicts or appears to
be in conflict with Citibank's interest.
c) Complainant is a substantial stockholder of Global Pacific, but she did not disclose fact
to the bank.
d) Global Pacific is engaged in money placement business like Citibank, N.A.; that in
carrying out its said money placement business, it used funds belonging to Citibank clients
which were withdrawn from Citibank with participation of complainant and Dante L.
Santos. In one transaction of this nature, P120,000,000.00 belonging to Citibank clients
was withdrawn from Citibank, N.A. and placed in another foreign bank, under the control of
Global Pacific. Said big investment money was returned to Citibank, N.A. only when
Citibank, N.A. filed an injunction suit.
e) Global Pacific also engaged in the brokering of the ABS or MBS, another financial
product of Citibank. It was the duty of complainant Genuino and Dante L. Santos to sell
said product on behalf of Citibank, N.A. and for Citibank N.A.'s benefit. In the brokering of
the ABS or MBS, Global Pacific made substantial profits which otherwise would have gone
to Citibank, N.A. if only they brokered the ABS or MBS for and on behalf of Citibank, N.A.
Art. 282(c) of the Labor Code provides that an employer may terminate an employment for fraud
or willful breach by the employee of the trust reposed in him/her by his/her employer or duly
authorized representative. In order to constitute as just cause for dismissal, loss of confidence
should relate to acts inimical to the interests of the employer. 35 Also, the act complained of
should have arisen from the performance of the employee's duties. 36 For loss of trust and
confidence to be a valid ground for an employee's dismissal, it must be substantial and not
arbitrary, and must be founded on clearly established facts sufficient to warrant the employee's
separation from work.37 We also held that:
[L]oss of confidence is a valid ground for dismissing an employee and proof beyond
reasonable doubt of the employee's misconduct is not required. It is sufficient if there is
some basis for such loss of confidence or if the employer has reasonable ground to believe
or to entertain the moral conviction that the employee concerned is responsible for the
misconduct and that the nature of his participation therein rendered him unworthy of the
trust and confidence demanded by his position. 38
As Assistant Vice-President of Citibank's Treasury Department, Genuino was tasked to solicit
investments, and peso and dollar deposits for, and keep them in Citibank; and to sell and/or push
for the sale of Citibank's financial products, such as the MBS, for the account and benefit of
Citibank.39 She held a position of trust and confidence. There is no way she could deny any
knowledge of the bank's policies nor her understanding of these policies as reflected in the
survey done by the bank. She could not likewise feign ignorance of the businesses of Citibank,
and of Global and Torrance. Assuming that Citibank did not engage in the same securities dealt
with by Global and Torrance; nevertheless, it is to the interests of Citibank to retain its clients and
continue investing in Citibank. Curiously, Genuino did not even dissuade the depositors from
withdrawing their monies from Citibank, and was even instrumental in the transfers of monies
from Citibank to a competing bank through Global and Torrance, the corporations under

Genuino's control.
All the pieces of evidence compel us to conclude that Genuino did not have her employer's
interest. The letter of the bank's clients which attested that the withdrawals from Citibank were
made upon their instructions is of no import. It did not explain why they preferred to invest in
Global and Torrance, nor did it mention that Genuino tried to dissuade them from withdrawing
their deposits. Genuino herself admitted her relationship with some of the depositors in her
affidavit, to wit:
6. Contrary to the allegations of Mr. Lim in par. 6.1 up to 8.1 concerning the alleged
scheme employed in the questioned transactions, insinuating an "in" and "out" movement
of funds of the seven (7) depositors,the truth is that after said "depositors"
instructed/authorized us to effect the withdrawal of their respective monies
from Citibank to attain the common goal of higher yields utilizing Global as the
vehicle for bulk purchases of securities or papers not dealt with/offered by
Citibank, said pooled investment remained with Global, and were managed through
Global for over a year until the controversy arose;
10. The seven (7) "depositors" mentioned in Mr. Lim's Affidavits are the long-time
friends of affiant Genuino who had formed a loosely constituted investment group for
purposes of realizing higher yields derivable from pooled investments, and as the advisor
of the group she had in effect chosen Citibank as the initial repository of their respective
monies prior to the implementation of plans for pooled investments under Global. Hence,
she had known and dealt with said "depositors" before they became substantial depositors
of Citibank. She did not come across them because of Citibank. 40 (Emphasis supplied.)
All told, Citibank had valid grounds to dismiss Genuino on ground of loss of confidence.
In view of Citibank's failure to observe due process, however, nominal damages are in order but
the amount is hereby raised to PhP 30,000 pursuant to Agabon v. NLRC. The NLRC's order for
payroll reinstatement is set aside.
In Agabon, we explained:
The violation of the petitioners' right to statutory due process by the private respondent
warrants the payment of indemnity in the form of nominal damages. The amount of such
damages is addressed to the sound discretion of the court, taking into account the
relevant circumstances. Considering the prevailing circumstances in the case at bar, we
deem it proper to fix it at P30,000.00. We believe this form of damages would serve to
deter employers from future violations of the statutory due process rights of employees. At
the very least, it provides a vindication or recognition of this fundamental right granted to
the latter under the Labor Code and its Implementing Rules. 41
Thus, the award of PhP 5,000 to Genuino as indemnity for non-observance of due process under
the CA's March 31, 2000 Resolution in CA-G.R. SP No. 51532 is increased to PhP 30,000.
Anent the directive of the NLRC in its September 3, 1994 Decision ordering Citibank "to pay the
salaries due to the complainant from the date it reinstated complainant in the payroll (computed
at P60,000.00 a month, as found by the Labor Arbiter) up to and until the date of this decision,"
the Court hereby cancels said award in view of its finding that the dismissal of Genuino is for a
legal and valid ground.
Ordinarily, the employer is required to reinstate the employee during the pendency of the appeal
pursuant to Art. 223, paragraph 3 of the Labor Code, which states:

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, even 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.
If the decision of the labor arbiter is later reversed on appeal upon the finding that the ground for
dismissal is valid, then the employer has the right to require the dismissed employee on payroll
reinstatement to refund the salaries s/he received while the case was pending appeal, or it can
be deducted from the accrued benefits that the dismissed employee was entitled to receive from
his/her employer under existing laws, collective bargaining agreement provisions, and company
practices.42 However, if the employee was reinstated to work during the pendency of the appeal,
then the employee is entitled to the compensation received for actual services rendered without
need of refund.
Considering that Genuino was not reinstated to work or placed on payroll reinstatement, and her
dismissal is based on a just cause, then she is not entitled to be paid the salaries stated in item
no. 3 of the fallo of the September 3, 1994 NLRC Decision.
WHEREFORE, the petitions of Genuino in G.R. Nos. 142732-33 are DENIED for lack of merit.
The petitions of Citibank in G.R. Nos. 142753-54 are GRANTED. The September 30, 1999
Decision and March 31, 2000 Resolution in CA-G.R. SP Nos. 51532 and 51533
are AFFIRMED with MODIFICATION that Genuino is entitled to PhP 30,000 as indemnity for
non-observance of due process. Item (3) in the dispositive portion of the September 3, 1994
Decision of the NLRC in NLRC-NCR Case No. 00-10-06450-93 (CA No. 006947-94)
is DELETED and SET ASIDE, and said NLRC decision is MODIFIED as follows:
WHEREFORE, Judgment is hereby rendered (1) SETTING ASIDE the appealed decision of
the Labor Arbiter; (2) DECLARING the dismissal of the complainant valid and legal on the
ground of serious misconduct and breach of trust and confidence and consequently
DISMISSING the complaint a quo; but (3)ORDERING the respondent bank to pay the
complainant nominal damages in the amount of PhP 30,000.
G.R. No. 173076

October 10, 2007

MT. CARMEL COLLEGE, petitioner,


vs.
JOCELYN RESUENA, EDDIE VILLALON, SYLVIA SEDAYON and ZONSAYDA
EMNACE, respondents.
DECISION
CHICO-NAZARIO, J.:
In this Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court, petitioner
seeks the reversal of the Decision1 dated 2 June 2006 of the Court of Appeals in CA-G.R. CEB-SP
No. 01615 entitled, Mt. Carmel College v. National Labor Relations Commission, Labor Arbiter
Phibun D. Pura, Jocelyn Resuena, et al. Petitioner seeks remedy from this Court for an alleged
illegal execution of the Decision2 dated 30 October 2001 by the National Labor Relations
Commission (NLRC) in NLRC CASE No. V-000176-2000 (RAB CASE Nos. 06-06-10393-98; 06-0610394-98; 06-06-10395-98; 06-06-10414-98) as affirmed by the Court of Appeals in CA-G.R. SP
No. 80639 in a Decision3 dated 17 March 2004, insisting it was not in accord with the dispositive
portion thereof. Petitioner is not appealing the judgment itself but the manner of execution of the
same.

The following are the factual antecedents of the instant Petition:


Petitioner Mt. Carmel College is a private educational institution. It is administered by the
Carmelite Fathers at New Escalante, Negros Occidental. Respondents were employees of
petitioner, namely: Jocelyn Resuena (Accounting Clerk), Eddie Villalon (Elementary Department
Principal); Sylvia Sedayon (Treasurer), and Zonsayda Emnace (Secretary to the Director).
On 21 November 1997, respondents, together with several faculty members, non-academic
personnel, and other students, participated in a protest action against petitioner. Thereafter,
petitioners Director, Rev. Fr. Modesto E. Malandac, issued a Memorandum to each of the
respondents. The Memorandum directed respondents to explain in writing why they should not
be dismissed for loss of trust and confidence for joining the protest action against the school
administration. Petitioner maintained that respondents were occupying positions of highly
confidential nature. After a hearing conducted by petitioners Fact-Finding Committee and
submission of its Report on 25 April 1998, recommending dismissal or suspension of
respondents, petitioner issued written notices of termination to respondents on 7 May 1998.
Respondents were terminated by petitioner on 15 May 1998.
Separate complaints were filed by each of the four respondents against petitioner before
Regional Arbitration Branch VI of the NLRC in Bacolod City. Respondents charged petitioner with
illegal dismissal and claimed 13thmonth pay, separation pay, damages and attorneys fees. The
cases were docketed as RAB Cases No. 06-06-10393-98, 06-06-10394-98, 06-06-10395-98, and
06-06-10414-98. All four cases were consolidated, and Labor Arbiter Ray T. Drilon thereafter
issued a Decision4 dated 25 May 1999 affirming the validity of respondents termination by
petitioner on the ground of loss of trust and confidence. Although the Decision found
respondents to have been legally dismissed, as equitable relief, however, they were awarded
separation pay computed at one month pay for every year of service, 5 their proportionate
13th month pay, and attorneys fees. Their claims for moral and exemplary damages were denied.
In issuing the aforesaid Decision, the Labor Arbiter ruled:
WHEREFORE, premises considered, judgment is hereby rendered ordering [herein
petitioner] Mount Carmel College represented by Fr. Modesto Malandac to pay [herein
respondents] Jocelyn Resuena, Zonsayda Emnace, Eddie Villalon and Sylvia Sedayon, their
respective 13th month pay, separation pay and attorneys fee in the total sum of THREE
HUNDRED THIRTY-FOUR THOUSAND EIGHT HUNDRED SEVENTY-FIVE PESOS AND 67/100
(P334,875.47) to be deposited with this office within ten (10) days from receipt of this
decision.
The complaint for moral and exemplary damages is hereby dismissed for lack of legal
basis.
All other claims are hereby dismissed for lack of merit. 6
On 9 September 1999, Labor Arbiter Drilon issued to the parties a Notice of Judgment/Decision of
his 25 May 1999 Decision. The notice indicated that a "decision of the Labor Arbiter reinstating a
dismissed or separated employee, in so far as the reinstatement aspect is concerned, shall
immediately be executory, even 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 employee (sic) merely reinstated in the payroll." 7
In the meantime, petitioner appealed to the NLRC Fourth Division in Cebu City, seeking the
reversal of the portion of the Labor Arbiters Decision dated 25 May 1999 awarding separation
pay to respondents. The NLRC dismissed the appeal in its Decision dated 30 October 2001. In the
same Decision dismissing the appeal, the NLRC reversed and modified the 25 May 1999 Decision
of the Labor Arbiter, and declared the termination of respondents to be illegal. It ordered the

reinstatement of respondents, with payment of backwages or payment of separation pay in lieu


thereof. The pertinent portion of the 30 October 2001 NLRC Decision reads:
We rule that complainants were illegally dismissed and must therefore be ordered
reinstated with payment of backwages from the time they were illegally dismissed up to
the time of their actual reinstatement.
All other claims are hereby dismissed for lack of merit.
WHEREFORE, premises considered the instant appeal is hereby DISMISSED for lack of
merit and the appealed decision is hereby AFFIRMED with modification ordering the
[herein petitioner] the payment of the backwages of the [herein respondents] from May
15, 1998 up to May 25, 1999, further directing the reinstatement of the [respondents] to
their original positions without loss of seniority or in lieu thereof the payment of their
separation pay as computed in the appealed decision. 8
Petitioner filed a Motion for Reconsideration of the 30 October 2001 Decision of the NLRC. The
said Motion was denied in the 19 June 2003 Resolution of the NLRC.
The case was elevated to the Court of Appeals via a Special Civil Action
for Certiorari and Prohibition, docketed as CA-G.R. SP No. 80639 where petitioner assailed the
aforementioned NLRC Decision dated 30 October 2001 and Resolution dated 19 June 2003,
arguing that there is more than enough basis for loss of trust and confidence as ground for
dismissing respondents. It also reiterated compliance with the twin requirements of notice and
hearing. The Court of Appeals denied the petition in a Decision promulgated on 17 March 2004,
ruling thus:
Consequently, we find no grave abuse of discretion committed by the NLRC in ruling that
[herein respondents] have been illegally dismissed. Likewise, said [NLRC] correctly held
that even if such participation of [respondents] in the protest picket is rather improper
under the circumstances or disappointing to the School Administrator who had rightly
expected them to take the side of the administration or at least stayed neutral on the
demand for ouster of Fr. Malandac and Barairo, dismissal is definitely too harsh where a
less punitive action such as reprimand or disciplinary action would have been sufficient.
Considering the long years of faithful service of [respondents] in the School without
previous record of misconduct, as duly noted by the NLRC in its decision, their termination
on the basis of alleged loss of confidence by taking part in an otherwise legitimate and
constitutionally-protected right to free speech and peaceful assembly, is certainly illegal
and unjustified.
xxxx
Having been illegally dismissed, [respondents] are entitled to back wages from the time of
their termination until reinstatement, and if reinstatement is no longer possible, the grant
of separation pay equivalent to one (1) month for every year of service. However, in this
case since the Labor Arbiter did not order reinstatement, the NLRC correctly excluded the
period of the appeal in the computation of back wages due to [respondents].
Finally, on the prayer for injunctive relief sought by petitioner on the ground that [public
respondent] Labor Arbiter exceeded his jurisdiction in issuing the writ of execution despite
the fact that his decision did not order reinstatement and that he is bereft of authority to
implement the decision of the NLRC (Fourth Division).
xxxx

Considering that there is already an entry of judgment on the Decision dated October 30,
2001, and in view of Our disposition of this petition, we find no more obstacle for the
enforcement of the said judgment even pending appeal, in accordance with Sections 1 and
2, Rule VIII of the NLRC Rules of Procedure, as amended, as well as Sections 2, 4 and 6,
Rule III of the NLRC Manual on Execution of Judgment.
xxxx
WHEREFORE, premises considered, the present petition is hereby DENIED DUE COURSE
and accordingly DISMISSED for lack of merit. The assailed Decision and Resolution are
AFFIRMED.9
No Motion for Reconsideration of the afore-quoted Court of Appeals Decision in CA-G.R. SP No.
80639 was filed and it became final and executory on 14 April 2004.
At about the same time as the foregoing developments in CA-G.R. SP No. 80639, Labor Arbiter
Phibun D. Pura issued an Order on 19 May 2003 opining on the self-executory nature of a
reinstatement order:
To be sure the Court has not been consistent in its interpretation of Art. 223. The nagging
issue has always been whether the reinstatement order is self-executory. Citing the
divergent views of the court beginning with Inciong v. NLRC followed by the deviation in
interpretation in Maranaw Hotel Corporation (Century Park Sheraton Manila) v. NLRC, as
reiterated and adopted in Archilles Manufacturing Corporation v. NLRC and Purificacion
Ram v. NLRC, the Court in the 1997 Pioneer case has laid down the doctrine that
henceforth an Order or award for reinstatement is self-executory, meaning that it does not
require a writ of execution, much less a motion for its issuance, as maintained by
petitioner. x x x.
Successive writs of execution pertaining to the backwages and accrued salaries of the
respondents were issued by Labor Arbiter Pura on these dates: 9 June 2003, 10 10 December
2003,11 and 20 January 2004.12
The first writ of execution, issued on 9 June 2003, directed the sheriff to collect from petitioner,
the amount ofP503,028.05 representing backwages from 15 May 1998 to 25 May 1999. Based on
the Sheriffs Report dated 25 June 2003, reinstatement had not been effected. There was a
Notice of Garnishment issued to the Equitable-PCI Bank Escalante Branch. Labor Arbiter Pura
ordered the release of the garnished amount of P508,168.05 with the said bank for deposit to the
Cashier of NLRC Regional Arbitration Branch VI in Bacolod City. Petitioner moved to quash the
Writ of Execution dated 9 June 2003. It was denied.
By 4 December 2003, the NLRC entered in its Book of Entries of Judgment its Decision dated 30
October 2001. The records of the case were endorsed back to NLRC Regional Arbitration Branch
VI for the execution of its final and executory decision, as no restraining order was issued by the
Court of Appeals.
After an exchange of pleadings, respondents filed an Ex-Parte Motion for Issuance of Writ of
Execution with the Labor Arbiter considering that the Entry of Judgment was already issued by
the NLRC. On 10 December 2003, the Labor Arbiter granted the Motion and issued the second
Writ of Execution. On motion of respondents, the Labor Arbiter ordered the release to them of the
garnished amount of P503,028.05 deposited with the Cashier of NLRC Regional Arbitration
Branch VI.
However, the foregoing amount was considered to be only a partial payment of the monetary
awards due the respondents and the unpaid balance thereof continued to grow to P1,307,806.50.

Respondents thus filed a motion for partial writ of execution, which the Labor Arbiter granted by
issuing the third Writ of Execution on 20 January 2004. 13 Under the foregoing writs of execution,
the aggregate amount of P1,736.592.0814 was garnished by Bailiff/Acting Sheriff Romeo D.
Pasustento, representing respondents accrued salaries, backwages, attorneys fees and sheriffs
fees computed from the promulgation of the NLRC Decision 30 October 2001.
Respondents filed on 14 July 2004 yet another Motion to Issue a Writ of Execution to collect
backwages from 1 January 2004 to 30 June 2004. Petitioner opposed the motion, but the Motion
to Issue a Writ of Execution was granted.
On 31 January 2005, Labor Arbiter Pura issued an Order 15 adopting the computation of the Fiscal
Examiner of NLRC Regional Arbitration Branch VI and issuing a writ of execution to enforce the
NLRC Decision dated 30 October 2001. The dispositive portion of the said Order reads:
In light of the foregoing, we have no choice but to adopt the computation of the RAB Fiscal
Examiner, hereto attached and forming part of the record of these cases and conformably
thereto, we grant the Motion to Issue Writ of Execution on backwages for the period stated
in this computation, taking into consideration the grant of differentials as there are
benefits which accrued to the [herein respondents] and which they should have enjoyed
had they been employed and/or reinstated, as the case may be, and such other amount as
may accrue until actually reinstated or in lieu of reinstatement, to pay [respondents]
separation pay to be computed at one (1) month salary for every year of service in
addition to backwages the formula adopted by the Labor Arbiter in the Decision dated May
25, 1999, page 7, paragraph 1.
Let therefore a Writ of Execution be, as it is hereby issued to enforce judgment in the
above entitled cases.16
On 8 February 2005, petitioner filed a Motion for Reconsideration of the foregoing Order
contending that the judgment of the NLRC mandated the payment of separation pay as
computed in the appealed decision. Respondents likewise filed a Manifestation and Motion to
include the month of November 2004 in the computation. In an Order dated 10 February 2005,
the Labor Arbiter denied the petitioners Motion for Reconsideration. On 22 February 2005, he
issued an Alias Writ of Execution17 for the collection from petitioner of the amount
ofP1,131,035.00 representing respondents backwages, separation pay, and attorneys fees.
Petitioner filed a Motion to Quash the Alias Writ of Execution on 17 March 2005. 18
On 15 April 2005, the Labor Arbiter issued an Order where it found no compelling reason to
warrant the grant of the Motion to Quash the Alias Writ of Execution. The afore-stated Order thus
reads:
WHEREFORE, for lack of merit the Motion to Quash the Alias Writ dated March 17, 2005 is
denied. [Respondents] Motion to Include February and March 2005 in the Computation of
wages is hereby GRANTED. The entry of appearance of the collaborating counsel is duly
noted.19
From the said Order of the Labor Arbiter, petitioner filed with the NLRC an appeal with an
application for issuance of a writ of preliminary injunction on the execution of judgment,
docketed as NLRC Case No. V-000377-05. Petitioner assailed the 15 April 2005 Order of the Labor
Arbiter averring that the latter seriously committed errors when he ordered the payment and
garnishment of backwages beyond the period 15 May 1998 to 25 May 1999. The NLRC dismissed
the petitioners appeal in a Resolution 20 dated 15 August 2005 for lack of merit. Petitioner filed a
Motion for Reconsideration but it was denied by the NLRC in a Resolution dated 30 November
2005, disposed of as follows:

WHEREFORE, premises considered, the appeal of respondents is hereby DISMISSED for


lack of merit. The 15 April 2005 Order of Labor Arbiter Phibun Pura is AFFIRMED. 21
From the foregoing, petitioner filed with the Court of Appeals a Special Civil Action for Certiorari
and Prohibition, docketed as CA-G.R. CEB-SP No. 01615, praying for the setting aside and
nullification of the Resolutions dated 15 August 2005 and 30 November 2005 of the NLRC in
NLRC Case No. V-000377-05. Petitioner contended that the NLRC acted with grave abuse of
discretion when it denied its appeal and motion for reconsideration and in not ruling that there
was already satisfaction of judgment. The crux of petitioners case, as succinctly worded by the
Court of Appeals in CA-G.R. CEB-SP No. 01615:
[P]etitioner seeks to annul and set aside the resolutions dated August 15, 2005 and
November 30, 2005 of the respondent NLRC in NLRC Case No. V-000377-05 when the
latter refuses to invalidate the various writs of executions and to refund petitioner of
whatever excess there might be on the theory that the execution done by the respondent
Labor Arbiter was illegal and in fact goes beyond what is stated in the decision dated
October 30, 2001 of the respondent NLRC in NLRC Case No. V-000176-2000. 22
The Court of Appeals eventually dismissed CA-G.R. CEB-SP No. 01615, ruling as follows:
Thus, petitioners avowal that their liability for private respondents backwages is limited
from May 15, 1998 up to May 25, 1999 is untenable on these grounds:
First, there is no showing, in the case at bench, that petitioner exercised its option to
reinstate private respondents to their former position or to grant them separation pay.
Accordingly, backwages have to be granted to private respondents until their
reinstatement to their former position is effected or upon petitioners payment of
separation pay to private respondents if reinstatement is no longer feasible; and
Second, the decision dated March 17, 2004 of the 17 th Division of the Court of Appeals in
CA-G.R. SP No. 80639 acquiesced the propriety of the issuance of the writs of execution by
the respondent labor arbiter on June 9, 2003, December 10, 2003 and January 30, 2004.
On April 14, 2004, the said decision which sanctioned the payment of backwages even
beyond May 25, 1999, became final and executory x x x.
xxxx
In light of the foregoing disquisition, we hereby find public respondent NLRC to have acted
accordingly and without grave abuse of discretion when it issued the questioned
Resolutions dated August 15, 2005 and November 30, 2005, respectively. Grave abuse of
discretion means such capricious and whimsical exercise of judgment as is equivalent to
lack of jurisdiction, or, in other words where the power is exercised in an arbitrary or
despotic manner by reason of passion or personal hostility, and it must be so patent and
gross as to amount to an evasion of positive duty or to a virtual refusal to perform the duty
enjoined or to act at all in contemplation of law. It is not sufficient that a tribunal, in the
exercise of power, abused its discretion; such abuse must be grave.
WHEREFORE, in view of the foregoing, the present petition is hereby DISMISSED and the
assailed Resolutions dated August 15, 2005 and November 30, 2005, respectively, issued
by the respondent NLRC in NLRC Case No. V-000377-05 are hereby AFFIRMED. 23
Hence, petitioner filed the instant Petition for Review on Certiorari, raising the following issues:
I.

THE HONORABLE COURT OF APPEALS ERRED IN UPHOLDING THE LABOR ARBITER AND THE
NLRC THAT THE AWARD OF BACKWAGES GOES BEYOND THE PERIOD FROM 15 MAY 1998
UP TO 25 MAY 1999 ON THE SUPPOSITION THAT REINSTATEMENT IS SELF-EXECUTORY AND
DOES NOT NEED A WRIT OF EXECUTION FOR ITS ENFORCEMENT.
II.
THE HONORABLE COURT OF APPEALS ERRED IN NOT FINIDING THAT THE CONTINUING
GRANT AND AWARD OF BACKWAGES UP TO THE PRESENT IS CONTRARY TO LAW AND
JURISPRUDENCE AS LAID DOWN BY THIS HONORABLE SUPREME COURT.
Petitioner prays that this Court render judgment (a) annulling and setting aside the assailed
Decision on 02 June 2006 of the Court of Appeals in CA-G.R. CEB-SP No. 01615 and all its orders
and issuances; (b) ordering that backwages be computed and executed corresponding only to
the period from 15 May 1998 to 25 May 1999; (c) ordering that separation pay be computed
based on the computation as originally submitted by the Labor Arbiter,P344,875.47, which
corresponds to the date of respondents employment until 15 May 1998; (d) that no other award
except for backwages for the period 15 May 1998 to 25 May 1999 and separation pay amounting
toP344,875.47 shall be paid by petitioner; and (e) that the respondents be ordered to refund and
pay the alleged excess in the amounts garnished by virtue of the Writs of Execution dated 9 June
2003, 10 December 2003, and 30 January 2004.
In sum, the resolution of this petition hinges on the following issues: (1) whether reinstatement in
the instant case is self-executory and does not need a writ of execution for its enforcement; and
(2) whether the continuing award of backwages is proper.
Petitioner insists that what is at issue is the manner of execution of the NLRC Decision dated 30
October 2001 in NLRC CASE No. V-000176-2000 (RAB CASE Nos. 06-06-10393-98; 06-06-1039498; 06-06-10395-98; 06-06-10414-98), as affirmed by the Decision dated 17 March 2004 of the
Court of Appeals in CA-G.R. No. 80639.
In ruling on the consolidated complaints filed by the four respondents, Labor Arbiter Drilon found
that they were not illegally dismissed but ordered that they be awarded 13 th month pay,
separation pay and attorneys fees in the amount of P334,875.47. Upon appeal to the NLRC, the
NLRC reversed the findings of the Labor Arbiter ruling that the termination of respondents was
illegal and ordering the payment of backwages of respondents from 15 May 1998 up to 25 May
1999. It further directed the reinstatement of respondents or payment of separation pay, with
backwages. This was affirmed by the Court of Appeals.
While petitioner concedes that the case pertaining to the complaints for illegal dismissal filed by
the respondents before the Labor Arbiter had been resolved with finality by the Court of Appeals
in CA-G.R. No. 80639, no other remedy having been taken therefrom, it however assails the
correctness and validity of the execution of the judgment therein. Petitioner avers that the Court
of Appeals erred in upholding the Labor Arbiter and the NLRC that the award of backwages goes
beyond the period 15 May 1998 to 25 May 1999 on the supposition that reinstatement is selfexecutory and does not need a writ of execution for its enforcement. Petitioner postulates that
the Labor Arbiter went beyond the terms of the NLRC Decision, as affirmed by the Court of
Appeals, and erroneously used as bases inapplicable law 24 and jurisprudence25 in the execution of
the same. Petitioner contends that the Labor Arbiters reliance on Pioneer Texturizing Corp. v.
National Labor Relations Commission26is misplaced, for it applied Article 223 of the Labor
Code 27 since reinstatement was ordered at the Labor Arbiters level while in the instant case,
reinstatement was ordered upon appeal to the NLRC. Petitioner argues that the relevant
statutory and regulatory provisions herein are Article 224 of the Labor Code, 28 and Rule III of the
NLRC Manual for Execution of Judgment,29 given that there was no order of reinstatement at the
Labor Arbiter level but only at the NLRC level. Petitioner insists that, applying Article 224 of the

Labor Code in the instant case, any reinstatement aspect of the NLRC Decision, as affirmed by
the Court of Appeals, should have been done through the issuance of a Writ of Execution as it is
no longer self-executory. It furthermore contends that it was impossible to reinstate respondents,
whether by way of an immediate execution or by way of a self-executory nature, since there was
nothing to execute pending appeal because there was no order for reinstatement.
Petitioner vehemently raises the argument that the award of backwages subject to execution is
limited to the period prior to the appeal and does not include the period during the pendency of
the appeal, on the contention that reinstatement during appeal is warranted only when the Labor
Arbiter rules that the dismissed employee should be reinstated. In support of its foregoing
argument, petitioner invokes Filflex Industrial & Manufacturing Corporation v. National Labor
Relations Commission30 where this Court ruled:
In other words, reinstatement during appeal is warranted only when the labor arbiter (LA)
himself rules that the dismissed employee should be reinstated. In the present case,
neither the dispositive portion nor the text of the labor arbiters decision ordered the
reinstatement of private respondent. Further, the back wages granted to private
respondent were specifically limited to the period prior to the filing of the appeal with
Respondent NLRC. In fact, the LAs decision ordered her separation from service for the
parties "mutual advantage and most importantly to physical and health welfare of the
complainant." Hence, it is an error and an abuse of discretion for the NLRC to hold that the
award of limited back wages, by implication, included an order for private respondents
reinstatement.
An order for reinstatement must be specifically declared and cannot be presumed; like
back wages, it is a separate and distinct relief given to an illegally dismissed employee.
There being no specific order for reinstatement and the order being for complainants
separation, there can be no basis for the award of salaries/back wages during the
pendency of appeal.
Petitioners reliance on Filflex is misplaced and inapplicable to the case at bar. Indeed in Filflex,
this Court ruled that the award of backwages is limited to the period prior to the filing of the
appeal with the NLRC. This Court had declared in the aforesaid case that reinstatement during
appeal is warranted only when the Labor Arbiter himself rules that the dismissed employee
should be reinstated. But this was precisely because on appeal to the NLRC, it found that there
was no illegal dismissal; thus, neither reinstatement nor backwages may be awarded. In
fact,Filfex deleted the award of backwages granted during appeal, reiterating that an award of
backwages by the NLRC during the period of appeal is totally inconsistent with its finding of a
valid dismissal. In the instant petition, the NLRC Decision dated 30 October 2001 finding the
termination of respondents illegal, had the effect of reversing Labor Arbiter Drilons Decision
dated 25 May 1999.
This Court sees no cogent reason as to the relevance of a discussion on whether or not
reinstatement is self-executory. However, since petitioner raised this issue, this Court has opted
to discuss it. Verily, Article 223 of the Labor Code is not applicable in the instant case. The said
provision stipulates that the decision of the Labor Arbiter reinstating a dismissed or separated
employee, insofar as the reinstatement aspect is concerned, shall immediately be executory,
even pending appeal.
Petitioner contends that the statutory provision applicable is Article 224 of the Labor Code, as
well as Rule III, Section 2(b) of the NLRC Manual on Execution of Judgment, because the case was
decided on appeal. Furthermore, it is a decision which is of a final and executory nature. The
provisions invoked by petitioner reads:
Art. 224. Execution of decisions, orders or awards. -- (a) The Secretary of Labor and

Employment or any Regional Director, the Commission or any Labor Arbiter, or med-arbiter
or voluntary arbitrator may, motu proprio or on motion of any interested party, issue a writ
of execution on a judgment within five (5) years from the date it becomes final and
executory x x x.31
If the execution be for the reinstatement of any person to any position, office or
employment, such writ shall be served by the sheriff upon the losing party or upon any
other person required by law to obey the same, and such party or person may be punished
for contempt if he disobeys such decisions, order for reinstatement. 32
The records of the case indicate that when Labor Arbiter Drilon issued its 25 May 1999 Decision,
there was no order of reinstatement yet although the dispositive portion of the 31 January 2005
Order issued by Labor Arbiter Pura already provided for reinstatement or payment of separation
pay, to wit:
In light of the foregoing, we have no choice but to adopt the computation of the RAB Fiscal
Examiner, hereto attached and forming part of the record of these cases and conformably
thereto, we grant the Motion to Issue Writ of Execution on backwages for the period stated
in this computation, taking into consideration the grant of differentials as there are
benefits which accrued to the complainants and which they should have enjoyed had they
been employed and/or reinstated, as the case may be, and such other amount as may
accrue until actually reinstated or in lieu of reinstatement, to pay complainants separation
pay to be computed at one (1) month salary for every year of service in addition to
backwages the formula adopted by the Labor Arbiter in the Decision dated May 25, 1999,
page 7, paragraph 1.
Let therefore a Writ of Execution be, as it is hereby issued to enforce judgment in the
above entitled cases.33
Art. 223 of the Labor Code provides that reinstatement is immediately executory even pending
appeal only when the Labor Arbiter himself ordered the reinstatement. In this case, the original
Decision of Labor Arbiter Drilon did not order reinstatement. Reinstatement in this case was
actually ordered by the NLRC, affirmed by the Court of Appeals. The order of Labor Arbiter Pura
on 31 January 2005 directing reinstatement was issued after the Court of Appeals Decision dated
17 March 2004 which affirmed the NLRCs order of reinstatement. Thus, Art. 223 finds no
application in the instant case. Considering that the order for reinstatement was first decided
upon appeal to the NLRC and affirmed with finality by the Court of Appeals in CA-G.R. SP 80369
on 17 March 2004, petitioner rightly invoked Art. 224 of the Labor Code. As contemplated by
Article 224 of the Labor Code, the Secretary of Labor and Employment or any Regional Director,
the Commission or any Labor Arbiter, or med-arbiter or voluntary arbitrator may, motu proprio or
on motion of any interested party, issue a writ of execution on a judgment within five (5) years
from the date it becomes final and executory. Consequently, under Rule III of the NLRC Manual on
the Execution of Judgment, it is provided that if the execution be for the reinstatement of any
person to a position, an office or an employment, such writ shall be served by the sheriff upon
the losing party or upon any other person required by law to obey the same, and such party or
person may be punished for contempt if he disobeys such decision or order for reinstatement. 34
However, as we can glean from the succeeding discussion, the above findings will not affect the
award of backwages for the period beyond 25 May 1999.
Anent the second issue, petitioner contends that the 25 May 1999 Decision of Labor Arbiter
Drilon did not order the reinstatement of respondents. Petitioner posits that since there was no
finding of illegal dismissal at the Labor Arbiters level, then it follows that there was no
reinstatement aspect, and its liability for backwages is limited to the period from 15 May 1998 up
to 25 May 1999, i.e., from dismissal to promulgation of the Labor Arbiters Decision only,

as allegedly determined by the NLRC in its Decision dated 30 October 2001. It argues that while
the said NLRC Decision awarded backwages from 15 May 1998 to 25 May 1999 only, the Writs of
Execution issued pursuant thereto ordered the payment of backwages way beyond the period
stated in the Decision35 it is supposed to execute.
Petitioners argument is absurd. Abbott v. National Labor Relations Commission,36 as cited by
petitioner, declared that there exists a big difference when what is sought to be reviewed is the
manner of execution of a decision and not the decision itself. "While it is true that the decision
itself has become final and executory and so can no longer be challenged, there is no question
that it must be enforced in accordance with its terms and conditions. Any deviation therefrom
can be the subject of a proper appeal." 37 In the instant case, however, the manner of execution
falls squarely within the terms of the Decision it seeks to implement.
The 30 October 2001 NLRC Decision ruled as follows:
We rule that complainants were illegally dismissed and must therefore be ordered
reinstated with payment of backwages from the time they were illegally dismissed up to
the time of their actual reinstatement.
All other claims are hereby dismissed for lack of merit.
WHEREFORE, premises considered the instant appeal is hereby DISMISSED for lack of
merit and the appealed decision is hereby AFFIRMED with modification ordering the
respondents the payment of the backwages of the complainants from May 15, 1998 up to
May 25, 1999, further directing the reinstatement of the complainants to their original
positions without loss of seniority or in lieu thereof the payment of their separation pay as
computed in the appealed decision.38
When the afore-quoted NLRC Decision was appealed to the Court of Appeals in CA-G.R. SP No.
80639, there seemed to be a contradiction between the body and the fallo of the appellate
courts Decision dated 17 March 2004. Petitioner cites the following from the text of the Court of
Appeals Decision:
However, in this case since the Labor Arbiter did not order reinstatement, the NLRC
correctly excluded the period of the appeal in the computation of back wages due to
private respondents.39
The dispositive portion of the same Decision, however, concludes:
WHEREFORE, premises considered, the present petition is hereby DENIED DUE COURSE
and accordingly DISMISSED for lack of merit. The assailed Decision and Resolution are
AFFIRMED.40
The general rule is that where there is conflict between the dispositive portion or the fallo and
the body of the decision, the fallo controls. This rule rests on the theory that the fallo is the final
order while the opinion in the body is merely a statement ordering nothing. 41 Clearly, the award
of backwages to respondents does not merely cover the period from 15 May 1998 up to 25 May
1999 alone.42 The findings of the NLRC, which were affirmed with finality in CA-G.R. SP No. 80639,
and subject of execution in the instant petition, pronounced:
We rule that [respondents] were illegally dismissed and must therefore be ordered
reinstated with payment of backwages from the time they were illegally dismissed up to
the time of their actual reinstatement.
All other claims are hereby dismissed for lack of merit.

WHEREFORE, premises considered the instant appeal is hereby DISMISSED for lack of
merit and the appealed decision is hereby AFFIRMED with modification ordering the
[petitioner] payment of the backwages of the [respondents] from May 15, 1998 up to May
25, 1999, further directing the reinstatement of the [respondents] to their original
positions without loss of seniority or in lieu thereof the payment of their separation pay as
computed in the appealed decision.43
The above ruling of the NLRC in its Decision dated 30 October 2001 had the effect of reversing
and modifying the findings of the Labor Arbiter. Under Article 218(c) of the Labor Code, the
Commission is empowered to "correct, amend, or waive any error, defect or irregularity whether
in substance or form," in the exercise of its appellate jurisdiction. 44 The dispositive portion of the
Labor Arbiters Decision as worded is clear and needs no further interpretation. The NLRC found
respondents to have been illegally dismissed by petitioner, and ordered reinstatement and
payment of backwages. Additionally, it stated that where reinstatement is not
possible,separation pay as computed in the appealed decision should be awarded to
respondents. Petitioner interprets the dispositive portion of the NLRC Decision to mean that it is
ordered to pay respondents backwages from 15 May 1998 to 25 May 1999 only. Petitioner seems
to have missed that the aforestated NLRC Decision also directed it to reinstate respondents, or in
lieu thereof, pay separation pay. This, petitioner failed to do. Petitioner did not exercise the
option of either reinstatement or paying the separation pay of respondents.
Backwages are to be computed from the time of illegal dismissal until reinstatement or upon
petitioners payment of separation pay to respondents if reinstatement is no longer possible.
Article 279 of the Labor Code, as amended, states:
Art. 279. Security of Tenure. x x x
In cases of regular employment the employer shall not terminate the services of an
employee except for a just cause or when authorized by this Title. An employee who is
unjustly dismissed from work shall be entitled to reinstatement without loss of seniority
rights and other privileges and to his full backwages, inclusive of allowances, and to his
other benefits or their monetary equivalent computed from the time his compensation was
withheld from him up to the time of his actual reinstatement.
Thus, an illegally dismissed employee is entitled to two reliefs: backwages and reinstatement.
The two reliefs provided are separate and distinct. In instances where reinstatement is no longer
feasible because of strained relations between the employee and the employer, separation pay is
granted. In effect, an illegally dismissed employee is entitled to either reinstatement, if viable, or
separation pay if reinstatement is no longer viable, and backwages. 45
The normal consequences of respondents illegal dismissal, then, are reinstatement without loss
of seniority rights, and payment of backwages computed from the time compensation was
withheld up to the date of actual reinstatement. Where reinstatement is no longer viable as an
option, separation pay equivalent to one (1) month salary for every year of service should be
awarded as an alternative.46 The payment of separation pay is in addition to payment of
backwages.
Concomitantly, it is evident that respondents backwages should not be limited to the period
from 15 May 1998 to 25 May 1999. The backwages due respondents must be computed from the
time they were unjustly dismissed until their actual reinstatement to their former position or
upon petitioners payment of separation pay to them if reinstatement is no longer feasible. Thus,
until petitioner actually implements the reinstatement aspect of the NLRC Decision dated 30
October 2001, as affirmed in the Court of Appeals Decision dated 17 March 2004 in CA-G.R. SP
No. 80639, its obligation to respondents, insofar as accrued backwages and other benefits are
concerned, continues to accumulate.

This Court takes this occasion to reiterate that execution is the final stage of litigation, the end of
the suit. It can not and should not be frustrated except for serious reasons demanded by justice
and equity.47 "Litigation must end sometime and somewhere. An effective and efficient
administration of justice requires that, once a judgment has become final, the winning party be
not, through a mere subterfuge, be deprived of the fruits of the verdicts. Courts must, therefore,
guard against any scheme calculated to bring about that result. Constituted as they are to put an
end to controversies, courts should frown upon any attempt to prolong them." 48
WHEREFORE, the instant petition is dismissed. The Decision dated 2 June 2006 of the Court of
Appeals in CA-G.R. CEB-SP No. 01615 is AFFIRMED. Petitioner is ORDERED to (1) reinstate
respondents to their original positions without loss of seniority rights, with payment of (a)
backwages computed from 15 May 1998, the time compensation of respondents was withheld
from them when they were unjustly terminated, up to the time of reinstatement; and (b) accrued
13th month pay for the same period; OR in lieu of reinstatement, (2) pay respondents (a)
separation pay, in the amount equivalent to one (1) month pay for every year of service; and (b)
backwages, computed from 15 May 1998, the time compensation of respondents was withheld
from them when they were unjustly terminated, up to the time of payment thereof; and (c) the
accrued 13th month pay for the same period. For this purpose, the records of this case are
hereby REMANDED to the Labor Arbiter for proper computation of the subject money claims as
discussed above. Costs against petitioner.
SO ORDERED.
G.R. No. 147806

November 12, 2002

NERISSA BUENVIAJE, SONIA FLORES, BELMA OLIVIO,


GENALYN PELOBELLO, MARY JANE MENOR, JOSIE RAQUERO,
ESTRELITA MANAHAN, REBECCA EBOL, and ERLINDA ARGA, petitioners,
vs.
THE HONORABLE COURT OF APPEALS (SPECIAL FORMER SEVENTH DIVISION),
HONORABLE ARBITER ROMULUS PROTASIO, COTTONWAY MARKETING CORPORATION
and MICHAEL G. TONG, President and General Manager, respondents.
DECISION
PUNO, J.:
This petition seeks to set aside the Decision dated March 13, 2000 and Resolution dated
February 13, 2001 of the Court of Appeals in CA-G.R. SP No. 53204 entitled "Cottonway
Marketing Corp. vs. National Labor Relations Commission, et al."
The facts are as follows:
Petitioners were former employees of Cottonway Marketing Corp. (Cottonway), hired as promo
girls for their garment products. In October, 1994, after their services were terminated as the
company was allegedly suffering business losses, petitioners filed with the National Labor
Relations Commission (NLRC) a complaint for illegal dismissal, underpayment of salary, and nonpayment of premium pay for rest day, service incentive leave pay and thirteenth month pay
against Cottonway Marketing Corp. and Network Fashion Inc./JCT International Trading. 1
On December 19, 1995, Labor Arbiter Romulus S. Protasio issued a Decision finding petitioners'
retrenchment valid and ordering Cottonway to pay petitioners' separation pay and their
proportionate thirteenth month pay.2
On appeal, the NLRC, in its Decision dated March 26, 1996, reversed the Decision of the Labor

Arbiter and ordered the reinstatement of petitioners without loss of seniority rights and other
privileges. It also ordered Cottonway to pay petitioners their proportionate thirteenth month pay
and their full backwages inclusive of allowances and other benefits, or their monetary equivalent
computed from the time their salaries were withheld from them up to the date of their actual
reinstatement.3
Cottonway filed a motion for reconsideration which was denied by the Commission in a
Resolution dated July 31, 1996.4
On August 30, 1996, Cottonway filed with the NLRC a manifestation stating that they have
complied with the order of reinstatement by sending notices dated June 5, 1996 requiring the
petitioners to return to work, but to no avail; and consequently, they sent letters to petitioners
dated August 1, 1996 informing them that they have lost their employment for failure to comply
with the return to work order.5 Cottonway also filed a petition for certiorari with the Supreme
Court which was dismissed on October 14, 1996. 6
On November 6, 1997, petitioners filed with the NLRC a motion for execution of its Decision on
the ground that it had become final and executory. 7
On December 4, 1996, the Research and Investigation Unit of the NLRC issued a computation of
the monetary award in accordance with the March 26 Decision of the NLRC. 8
Meanwhile, Cottonway filed a motion for reconsideration of the Supreme Court Resolution of
October 14, 1996 dismissing the petition for certiorari. The motion for reconsideration was
denied with finality on January 13, 1997.9
On March 4, 1997, Cottonway filed a manifestation with the NLRC reiterating their allegations in
their manifestation dated August 30, 1996, and further alleging that petitioners have already
found employment elsewhere.10
On March 13, 1997, the Research and Investigation Unit of the NLRC issued an additional
computation of petitioners' monetary award in accordance with the March 26 NLRC decision. 11
On the same date, Cottonway filed with the NLRC a supplemental manifestation praying that the
Commission allow the reception of evidence with respect to their claim that petitioners have
found new employment. The Commission denied Cottonways prayer in an Order dated March
24, 199712 and Resolution dated July 24, 1997.13
Nonetheless, on April 8, 1998, Labor Arbiter Romulus S. Protasio issued an Order declaring that
the award of backwages and proportionate thirteenth month pay to petitioners should be limited
from the time of their illegal dismissal up to the time they received the notice of termination sent
by the company upon their refusal to report for work despite the order of reinstatement. He cited
the fact that petitioners failed to report to their posts without justifiable reason despite
respondent's order requiring them to return to work immediately. The Labor Arbiter ordered the
Research and Investigation Unit to recompute the monetary award in accordance with its ruling. 14
The April 8 Order of the Labor Arbiter, however, was set aside by the Commission in its
Resolution dated September 21, 1998. The Commission ruled that its Decision dated March 26,
1996 has become final and executory and it is the ministerial duty of the Labor Arbiter to issue
the corresponding writ of execution to effect full and unqualified implementation of said
decision.15 The Commission thus ordered that the records of the case be remanded to the Labor
Arbiter for execution. Cottonway moved for reconsideration of said resolution, to no avail.
Hence, Cottonway filed a petition for certiorari with the Court of Appeals seeking the reversal of
the ruling of the NLRC and the reinstatement of the Order dated April 8, 1998 issued by Labor

Arbiter Romulus S. Protasio.


The appellate court granted the petition in its Decision dated March 13, 2000. 16 It ruled that
petitioners' reinstatement was no longer possible as they deliberately refused to return to work
despite the notice given by Cottonway. The Court of Appeals thus held that the amount of
backwages due them should be computed only up to the time they received their notice of
termination. It said:
"Petitioner's termination of private respondents' employment by reason of their failure to report
for work despite due notice being valid, it would change the substance of the questioned March
26, 1996 decision which awards backwages to the complainants up to their reinstatement. Again,
private respondents' reinstatement is no longer possible because of the supervening event which
is their valid termination. The deliberate failure to report for work after notice to return bars
reinstatement. It would be unjust and inequitable then to require petitioner to pay private
respondents their backwages even after the latter were validly terminated when in fact petitioner
dutifully complied with the reinstatement aspect of the decision. Thus, the period within which
the monetary award of private respondents should be based is limited up to the time of private
respondents' receipt of the respective notices of termination on August 27, 1998." 17
The Court of Appeals denied petitioners' motion for reconsideration in a Resolution issued on
February 13, 2001.18
Petitioners now question the Decision and Resolution of the Court of Appeals. They impute the
following errors:
"I. That the Honorable Court of Appeals gravely abused its discretion amounting to lack of
and/or in excess of jurisdiction in rendering the assailed decision in CA-G.R. No. SP 53204
without first performing its ministerial duty of taking initial judicial action thereon
unlawfully depriving the petitioners the opportunity to comment and/or file responsive
pleadings to the petition resulting to their being unlawfully denied a day in court;
II. That the Honorable Court of Appeals gravely abused its discretion amounting to lack of
and/or in excess of jurisdiction in rendering a decision in CA-G.R. No. SP 53204 reversing
and setting aside the lawful and appropriate September 21, 1998 and March 31, 1999
resolutions of the Honorable NLRC and reinstating the irregular and illegal April 8, 1998
Order of Honorable Arbiter Romulus Protasio; and
III. That the Honorable Court of Appeals gravely abused its discretion amounting to lack of
and/or in excess of jurisdiction in issuing the February 13, 2001 Resolution which denied
petitioners' motion for reconsideration from the decision of March 13, 2000 without stating
the legal basis therefor."19
We proceed directly to the central issue in this case which is the computation of petitioners'
backwageswhether it should be limited from the time they were illegally dismissed until they
received the notice of termination sent by Cottonway on August 1, 1996 as argued by
respondent company, or whether it should be computed from the time of their illegal dismissal
until their actual reinstatement as argued by the petitioners.
We agree with the petitioners.
The issue of the legality of the termination of petitioners services has been settled in the NLRC
decision dated March 26, 1996. Thus, Cottonway was ordered to reinstate petitioners to their
former position without loss of seniority rights and other privileges and to pay them full
backwages. The dispositive portion of the decision read:

"WHEREFORE, the decision appealed from is hereby REVERSED. Respondent Cottonway


Marketing Corporation is hereby ordered to reinstate the complainants without loss of seniority
rights and other privileges and to pay them the following: (1) their proportionate 13th month pay
for 1994; and (2) their full backwages inclusive of allowances and other benefits, or their
monetary equivalent computed from the time their salaries were withheld from them up to the
date of their actual reinstatement.
SO ORDERED."
These are the reliefs afforded to employees whose employment is unlawfully severed.
Reinstatement restores the employee to the position from which he was removed, i.e., to his
status quo ante dismissal, while the grant of backwages allows the same employee to recover
from the employer that which he lost by way of wages because of his dismissal.20
Under R.A. 6715, employees who are illegally dismissed are entitled to full backwages, inclusive
of allowances and other benefits or their monetary equivalent, computed from the time their
actual compensation was withheld from them up to the time of their actual reinstatement. If
reinstatement is no longer possible, the backwages shall be computed from the time of their
illegal termination up to the finality of the decision. 21 The Court explained the meaning of "full
backwages" in the case of Bustamante vs. NLRC: 22
"The Court deems it appropriate, however, to reconsider such earlier ruling on the computation
of backwages as enunciated in said Pines City Educational Center case, by now holding that
conformably with the evident legislative intent as expressed in Rep. Act No. 6715, above-quoted,
backwages to be awarded to an illegally dismissed employee, should not, as a general rule, be
diminished or reduced by the earnings derived by him elsewhere during the period of his illegal
dismissal. The underlying reason for this ruling is that the employee, while litigating the legality
(illegality) of his dismissal, must still earn a living to support himself and family, while full
backwages have to be paid by the employer as part of the price or penalty he has to pay for
illegally dismissing his employee. The clear legislative intent of the amendment in Rep. Act No.
6715 is to give more benefits to workers than was previously given them under the Mercury Drug
rule or the "deduction of earnings elsewhere" rule. Thus, a closer adherence to the legislative
policy behind Rep. Act No. 6715 points to "full backwages" as meaning exactly that, i.e., without
deducting from backwages the earnings derived elsewhere by the concerned employee during
the period of his illegal dismissal. In other words, the provision calling for "full backwages" to
illegally dismissed employees is clear, plain and free from ambiguity and, therefore, must be
applied without attempted or strained interpretation. Index animi sermo est." (emphasis
supplied)
The Court does not see any reason to depart from this rule in the case of herein petitioners. The
decision of the NLRC dated March 26, 1996 has become final and executory upon the dismissal
by this Court of Cottonways petition for certiorari assailing said decision and the denial of its
motion for reconsideration. Said judgment may no longer be disturbed or modified by any court
or tribunal. It is a fundamental rule that when a judgment becomes final and executory, it
becomes immutable and unalterable, and any amendment or alteration which substantially
affects a final and executory judgment is void, including the entire proceedings held for that
purpose. Once a judgment becomes final and executory, the prevailing party can have it
executed as a matter of right, and the issuance of a writ of execution becomes a ministerial duty
of the court. A decision that has attained finality becomes the law of the case regardless of any
claim that it is erroneous. The writ of execution must therefore conform to the judgment to be
executed and adhere strictly to the very essential particulars. 23
To justify the modification of the final and executory decision of the NLRC dated March 26, 1996,
the Court of Appeals cited the existence of a supervening event, that is, the valid termination of
petitioners' employment due to their refusal to return to work despite notice from respondents

reinstating them to their former position.


We cannot concur with said ruling. Petitioners' alleged failure to return to work cannot be made
the basis for their termination. Such failure does not amount to abandonment which would justify
the severance of their employment. To warrant a valid dismissal on the ground of abandonment,
the employer must prove the concurrence of two elements: (1) the failure to report for work or
absence without valid or justifiable reason, and (2) a clear intention to sever the employeremployee relationship.24
The facts of this case do not support the claim of Cottonway that petitioners have abandoned
their desire to return to their previous work at said company. It appears that three months after
the NLRC had rendered its decision ordering petitioners reinstatement to their former positions,
Cottonway sent individual notices to petitioners mandating them to immediately report to work.
The standard letter, signed by the companys legal counsel, Atty. Ambrosio B. De Luna, and sent
to each of the petitioners read:
"June 5, 1996
Dear Ms. Alivid,25
By virtue of the decision of the National Labor Relation(s) Commission dated March 26, 1996 in
Belma Alivid vs. Network Fashion, Inc., JCT Intl Trading and, Cotton Mktg., Corp., NLRC CASE NO.
NCR-010210-96 and NLRC NCR-00-10-07238-94, you are hereby ordered to report for work within
five (5) days from receipt of this letter, otherwise, your failure will be deemed lack of interest to
continue and considered to have abandoned your employment with the company.
Please give this matter your utmost attention.
Very truly your(s),
(Sgd) AMBROSIO B. DE LUNA
Legal Counsel"
The petitioners, however, were not able to promptly comply with the order. Instead, their
counsel, Atty. Roberto LL. Peralta, sent a reply letter to Atty. De Luna stating that his clients were
not in a position to comply with said order since the NLRC has not yet finally disposed of the
case. The reply letter stated:26
"June 20, 1996
ATTY. AMBROSIO B. DE LUNA
Unit 2-D Bouganvilla (sic) Mansions
91 P. Tuazon Street, Cubao
Quezon City
Compaero,
Your letter dated June 5, 1996 to our clients, Erlinda Arga, et al., complainants in NLRC NCR CASE
NO. 00-10-07238-94, Genalyn Pelobello, et al. vs. Network Fashion, et al., was referred to us for
reply.
Please be informed that our said clients are not in a position now to comply with your order for
them to report for work within five (5) days from receipt thereof since the National Labor
Relations Commission, First Division, has yet to finally disposed off (sic) the case.

However, if it is now a case that your client, Mr. Michael Tong, is yielding to the Decision dated
March 26, 1996 of the NLRC, we are then willing to sit down with you relative to the satisfaction
of the same to avoid said decision from being enforced by the sheriff.
Trusting your cooperation on this matter.
Thank you.
Very truly yours,
(Sgd) ROBERTO LL. PERALTA
Counsel For The Complainants"
Consequently, Cottonway sent the petitioners individual notices of termination. The standard
letter of termination which was likewise signed by counsel and individually addressed to
petitioners stated:
"August 1, 1996
BELMA ALIVID
c/o Sonia Flores
#1256-A St. Nino Street
Tondo(,) Manila
Dear Ms. Alivid,27
For your failure to report for work as per letter dated June 5, 1996 within the period of five days
from receipt of the same, you are considered to have lost your employment status effective this
date with the company on the ground of failure to report for work.
Please be guided accordingly.
Very truly yours,
(Sgd) Ambrosio B. De Luna
Legal Counsel of
Network Fashion(,) Inc."
We note that Cottonway, before finally deciding to dispense with their services, did not give the
petitioners the opportunity to explain why they were not able to report to work. The records also
do not bear any proof that all the petitioners received a copy of the letters. Cottonway merely
claimed that some of them have left the country and some have found other employment. This,
however, does not necessarily mean that petitioners were no longer interested in resuming their
employment at Cottonway as it has not been shown that their employment in the other
companies was permanent. It should be expected that petitioners would seek other means of
income to tide them over during the time that the legality of their termination is under litigation.
Furthermore, petitioners never abandoned their suit against Cottonway. While the case was
pending appeal before the NLRC, the Court of Appeals and this Court, petitioners continued to file
pleadings to ensure that the company would comply with the directive of the NLRC to reinstate
them and to pay them full backwages in case said decision is upheld. Moreover, in his reply to
the companys first letter, petitioners counsel expressed willingness to meet with the companys
representative regarding the satisfaction of the NLRC decision.
It appears that the supposed notice sent by Cottonway to the petitioners demanding that they

report back to work immediately was only a scheme to remove the petitioners for good.
Petitioners failure to instantaneously abide by the directive gave them a convenient reason to
dispense with their services. This the Court cannot allow. Cottonway cited Article 223 of the
Labor Code providing that the decision ordering the reinstatement of an illegally dismissed
employee is immediately executory even pending appeal as basis for its decision to terminate
the employment of petitioners. We are not convinced. Article 223 of the Labor Code provides:
"ART. 223. Appeal. Decisions, awards, or orders of the Labor Arbiter are final and executory
unless appealed to the Commission by any or both parties within ten (10) calendar days from
receipt of such decisions, awards, or orders. x x x
xxxxxxxxx
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, even 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. x x x
x x x x x x x x x."
The foregoing provision is intended for the benefit of the employee and cannot be used to defeat
their own interest. The law mandates the employer to either admit the dismissed employee back
to work under the same terms and conditions prevailing prior to his dismissal or to reinstate him
in the payroll to abate further loss of income on the part of the employee during the pendency of
the appeal. But we cannot stretch the language of the law as to give the employer the right to
remove an employee who fails to immediately comply with the reinstatement order, especially
when there is reasonable explanation for the failure. If Cottonway were really sincere in its offer
to immediately reinstate petitioners to their former positions, it should have given them
reasonable time to wind up their current preoccupation or at least to explain why they could not
return to work at Cottonway at once. Cottonway did not do either. Instead, it gave them only five
days to report to their posts and when the petitioners failed to do so, it lost no time in serving
them their individual notices of termination. We are, therefore, not impressed with the claim of
respondent company that petitioners have been validly dismissed on August 1, 1996 and hence
their backwages should only be computed up to that time. We hold that petitioners are entitled
to receive full backwages computed from the time their compensation was actually withheld until
their actual reinstatement, or if reinstatement is no longer possible, until the finality of the
decision, in accordance with the Decision of the NLRC dated March 26, 1996 which has attained
finality.28
IN VIEW WHEREOF, the petition is GRANTED. The Decision of the Court of Appeals dated March
13, 2000 and Resolution dated February 13, 2001 in CA-G.R. SP No. 53204 are REVERSED and
SET ASIDE. Let the records of this case be remanded to the Labor Arbiter for execution in
accordance with the Decision of the NLRC dated March 26, 1996.
SO ORDERED.
G.R. No. 164856

August 29, 2007

JUANITO A. GARCIA and ALBERTO J. DUMAGO, Petitioners,


vs.
PHILIPPINE AIRLINES, INC., Respondent.
DECISION

QUISUMBING, J.:
This petition for review assails both the Decision 1 dated December 5, 2003 and the
Resolution2 dated April 16, 2004 of the Court of Appeals in CA-G.R. SP No. 69540, which had
annulled the Resolutions3 dated November 26, 2001 and January 28, 2002 of the National Labor
Relations Commission (NLRC) in NLRC Injunction Case No. 0001038-01, and also denied the
motion for reconsideration, respectively.
The antecedent facts of the case are as follows:
Petitioners Alberto J. Dumago and Juanito A. Garcia were employed by respondent Philippine
Airlines, Inc. (PAL) as Aircraft Furnishers Master "C" and Aircraft Inspector, respectively. They
were assigned in the PAL Technical Center.
On July 24, 1995, a combined team of the PAL Security and National Bureau of Investigation (NBI)
Narcotics Operatives raided the Toolroom Section Plant Equipment Maintenance Division
(PEMD) of the PAL Technical Center. They found petitioners, with four others, near the said
section at that time. When the PAL Security searched the section, they found shabu
paraphernalia inside the company-issued locker of Ronaldo Broas who was also within the
vicinity. The six employees were later brought to the NBI for booking and proper investigation.
On July 26, 1995, a Notice of Administrative Charge 4 was served on petitioners. They were
allegedly "caught in the act of sniffing shabu inside the Toolroom Section," then placed under
preventive suspension and required to submit their written explanation within ten days from
receipt of the notice.
Petitioners vehemently denied the allegations and challenged PAL to show proof that they were
indeed "caught in the act of sniffing shabu." Dumago claimed that he was in the Toolroom
Section to request for an allen wrench to fix the needles of the sewing and zigzagger machines.
Garcia averred he was in the Toolroom Section to inquire where he could take the Tracksters tire
for vulcanizing.
On October 9, 1995, petitioners were dismissed for violation of Chapter II, Section 6, Article 46
(Violation of Law/Government Regulations) and Chapter II, Section 6, Article 48 (Prohibited
Drugs) of the PAL Code of Discipline.5 Both simultaneously filed a case for illegal dismissal and
damages.
In the meantime, the Securities and Exchange Commission (SEC) placed PAL under an Interim
Rehabilitation Receiver due to severe financial losses.
On January 11, 1999, the Labor Arbiter rendered a decision 6 in petitioners favor:
WHEREFORE, conformably with the foregoing, judgment is hereby rendered finding the
respondents guilty of illegal suspension and illegal dismissal and ordering them to reinstate
complainants to their former position without loss of seniority rights and other privileges.
Respondents are hereby further ordered to pay jointly and severally unto the complainants the
following:
Alberto J. Dumago - P409,500.00 backwages as of 1/10/99
34,125.00 for 13th month pay
Juanito A. Garcia - P1,290,744.00 backwages as of 1/10/99

107,562.00 for 13th month pay


The amounts of P100,000.00 and P50,000.00 to each complainant as and by way of moral and
exemplary damages; and
The sum equivalent to ten percent (10%) of the total award as and for attorneys fees.
Respondents are directed to immediately comply with the reinstatement aspect of this Decision.
However, in the event that reinstatement is no longer feasible, respondent[s] are hereby
ordered, in lieu thereof, to pay unto the complainants their separation pay computed at one
month for [e]very year of service.
SO ORDERED.7
Meanwhile, the SEC replaced the Interim Rehabilitation Receiver with a Permanent Rehabilitation
Receiver.
On appeal, the NLRC reversed the Labor Arbiters decision and dismissed the case for lack of
merit.8Reconsideration having been denied, an Entry of Judgment 9 was issued on July 13, 2000.
On October 5, 2000, the Labor Arbiter issued a Writ of Execution 10 commanding the sheriff to
proceed:
xxxx
1. To the Office of respondent PAL Building I, Legaspi St., Legaspi Village, Makati City or to
any of its Offices in the Philippines and cause reinstatement of complainants to their
former position and to cause the collection of the amount of [P]549,309.60 from
respondent PAL representing the backwages of said complainants on the reinstatement
aspect;
2. In case you cannot collect from respondent PAL for any reason, you shall levy on the
office equipment and other movables and garnish its deposits with any bank in the
Philippines, subject to the limitation that equivalent amount of such levied movables
and/or the amount garnished in your own judgment, shall be equivalent to [P]549,309.60.
If still insufficient, levy against immovable properties of PAL not otherwise exempt from
execution.
x x x x11
Although PAL filed an Urgent Motion to Quash Writ of Execution, the Labor Arbiter issued a Notice
of Garnishment12 addressed to the President/Manager of the Allied Bank Head Office in Makati
City for the amount of P549,309.60.
PAL moved to lift the Notice of Garnishment while petitioners moved for the release of the
garnished amount. PAL opposed petitioners motion. It also filed an Urgent Petition for Injunction
which the NLRC resolved as follows:
WHEREFORE, premises considered, the Petition is partially GRANTED. Accordingly, the Writ of
Execution dated October 5, 2000 and related [N]otice of Garnishment [dated October 25, 2000]
are DECLARED valid. However, the instant action is SUSPENDED and REFERRED to the Receiver
of Petitioner PAL for appropriate action.
SO ORDERED.13

PAL appealed to the Court of Appeals on the grounds that: (1) by declaring the writ of execution
and the notice of garnishment valid, the NLRC gave petitioners undue advantage and preference
over PALs other creditors and hampered the task of the Permanent Rehabilitation Receiver; and
(2) there was no longer any legal or factual basis to reinstate petitioners as a result of the
reversal by the NLRC of the Labor Arbiters decision.
The appellate court ruled that the Labor Arbiter issued the writ of execution and the notice of
garnishment without jurisdiction. Hence, the NLRC erred in upholding its validity. Since PAL was
under receivership, it could not have possibly reinstated petitioners due to retrenchment and
cash-flow constraints. The appellate court declared that a stay of execution may be warranted by
the fact that PAL was under rehabilitation receivership. The dispositive portion of the decision
reads:
WHEREFORE, premises considered and in view of the foregoing, the instant petition is
hereby GIVEN DUE COURSE. The assailed November 26, 2001 Resolution, as well as the
January 28, 2002 Resolution of public respondent National Labor Relations Commission is
hereby ANNULLED and SET ASIDE for having been issued with grave abuse of discretion
amounting to lack or excess of jurisdiction. Consequently, the Writ of Execution and the Notice of
Garnishment issued by the Labor Arbiter are hereby likewise ANNULLED and SET ASIDE.
SO ORDERED.14
Hence, the instant petition raising a single issue as follows:
WHETHER OR NOT THE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE PETITIONERS ARE
ENTITLED TO THEIR ACCRUED WAGES DURING THE PENDENCY OF PALS APPEAL. 15
Simply put, however, there are really two issues for our consideration: (1) Are petitioners entitled
to their wages during the pendency of PALs appeal to the NLRC? and (2) In the light of new
developments concerning PALs rehabilitation, are petitioners entitled to execution of the Labor
Arbiters order of reinstatement even if PAL is under receivership?
We shall first resolve the issue of whether the execution of the Labor Arbiters order is legally
possible even if PAL is under receivership.
We note that during the pendency of this case, PAL was placed by the SEC first, under an Interim
Rehabilitation Receiver and finally, under a Permanent Rehabilitation Receiver. The pertinent law
on this matter, Section 5(d) of Presidential Decree (P.D.) No. 902-A, as amended, provides that:
SECTION 5. In addition to the regulatory and adjudicative functions of the Securities and
Exchange Commission over corporations, partnerships and other forms of associations registered
with it as expressly granted under existing laws and decrees, it shall have original and exclusive
jurisdiction to hear and decide cases involving:
xxxx
d) Petitions of corporations, partnerships or associations to be declared in the state of suspension
of payments in cases where the corporation, partnership or association possesses property to
cover all of its debts but foresees the impossibility of meeting them when they respectively fall
due or in cases where the corporation, partnership or association has no sufficient assets to
cover its liabilities, but is under the [management of a rehabilitation receiver or] Management
Committee created pursuant to this Decree.
The same P.D., in Section 6(c) provides that:

SECTION 6. In order to effectively exercise such jurisdiction, the Commission shall possess the
following powers:
xxxx
c) To appoint one or more receivers of the property, real or personal, which is the subject of the
action pending before the Commission in accordance with the pertinent provisions of the Rules of
Court in such other cases whenever necessary in order to preserve the rights of the partieslitigants and/or protect the interest of the investing public and creditors:Provided, finally, That
upon appointment of a management committee, rehabilitation receiver, board or body, pursuant
to this Decree, all actions for claims against corporations, partnerships or associations under
management or receivership pending before any court, tribunal, board or body shall be
suspended accordingly.
xxxx
Worth stressing, upon appointment by the SEC of a rehabilitation receiver, all actions for claims
against the corporation pending before any court, tribunal or board shall ipso jure be suspended.
The purpose of the automatic stay of all pending actions for claims is to enable the rehabilitation
receiver to effectively exercise its/his powers free from any judicial or extra-judicial interference
that might unduly hinder or prevent the rescue of the corporation. 16
More importantly, the suspension of all actions for claims against the corporation embraces all
phases of the suit, be it before the trial court or any tribunal or before this Court. 17 No other
action may be taken, including the rendition of judgment during the state of suspension. It must
be stressed that what are automatically stayed or suspended are the proceedings of a suit and
not just the payment of claims during the execution stage after the case had become final and
executory.18
Furthermore, the actions that are suspended cover all claims against the corporation whether for
damages founded on a breach of contract of carriage, labor cases, collection suits or any other
claims of a pecuniary nature.19 No exception in favor of labor claims is mentioned in the
law.201avvphi1
This Courts adherence to the above-stated rule has been resolute and steadfast as evidenced by
its oft-repeated application in a plethora of cases involving PAL, the most recent of which is
Philippine Airlines, Inc. v. Zamora. 21
Since petitioners claim against PAL is a money claim for their wages during the pendency of
PALs appeal to the NLRC, the same should have been suspended pending the rehabilitation
proceedings. The Labor Arbiter, the NLRC, as well as the Court of Appeals should have abstained
from resolving petitioners case for illegal dismissal and should instead have directed them to
lodge their claim before PALs receiver.22
However, to still require petitioners at this time to re-file their labor claim against PAL under the
peculiar circumstances of the case that their dismissal was eventually held valid with only the
matter of reinstatement pending appeal being the issue this Court deems it legally expedient to
suspend the proceedings in this case.
WHEREFORE, the instant petition is PARTIALLY GRANTED in that the instant proceedings herein
are SUSPENDED until further notice from this Court. Accordingly, respondent Philippine Airlines,
Inc. is herebyDIRECTED to quarterly update the Court as to the status of its ongoing
rehabilitation. No costs.
SO ORDERED.

G.R. No. 177467

March 9, 2011

PFIZER, INC. AND/OR REY GERARDO BACARRO, AND/OR FERDINAND CORTES, AND/OR
ALFRED MAGALLON, AND/OR ARISTOTLE ARCE, Petitioners,
vs.
GERALDINE VELASCO, Respondent.
DECISION
LEONARDO-DE CASTRO, J.:
This is a petition for review on certiorari under Rule 45 of the Rules of Civil Procedure to annul
and set aside the Resolution1 dated October 23, 2006 as well as the Resolution 2 dated April 10,
2007 both issued by the Court of Appeals in CA-G.R. SP No. 88987 entitled, "Pfizer, Inc. and/or
Rey Gerardo Bacarro, and/or Ferdinand Cortes, and/or Alfred Magallon, and/or Aristotle Arce v.
National Labor Relations Commission Second Division and Geraldine Velasco." The October 23,
2006 Resolution modified upon respondents motion for reconsideration the Decision 3 dated
November 23, 2005 of the Court of Appeals by requiring PFIZER, Inc. (PFIZER) to pay
respondents wages from the date of the Labor Arbiters Decision 4 dated December 5, 2003 until
it was eventually reversed and set aside by the Court of Appeals. The April 10, 2007 Resolution,
on the other hand, denied PFIZERs motion for partial reconsideration.
The facts of this case, as stated in the Court of Appeals Decision dated November 23, 2005, are
as follows:
Private respondent Geraldine L. Velasco was employed with petitioner PFIZER, INC. as
Professional Health Care Representative since 1 August 1992. Sometime in April 2003, Velasco
had a medical work up for her high-risk pregnancy and was subsequently advised bed rest which
resulted in her extending her leave of absence. Velasco filed her sick leave for the period from 26
March to 18 June 2003, her vacation leave from 19 June to 20 June 2003, and leave without pay
from 23 June to 14 July 2003.
On 26 June 2003, while Velasco was still on leave, PFIZER through its Area Sales Manager, herein
petitioner Ferdinand Cortez, personally served Velasco a "Show-cause Notice" dated 25 June
2003. Aside from mentioning about an investigation on her possible violations of company work
rules regarding "unauthorized deals and/or discounts in money or samples and unauthorized
withdrawal and/or pull-out of stocks" and instructing her to submit her explanation on the matter
within 48 hours from receipt of the same, the notice also advised her that she was being placed
under "preventive suspension" for 30 days or from that day to 6 August 2003 and consequently
ordered to surrender the following "accountabilities;" 1) Company Car, 2) Samples and Promats,
3) CRF/ER/VEHICLE/SOA/POSAP/MPOA and other related Company Forms, 4) Cash Card, 5) Caltex
Card, and 6) MPOA/TPOA Revolving Travel Fund. The following day, petitioner Cortez together
with one Efren Dariano retrieved the above-mentioned "accountabilities" from Velascos
residence.
In response, Velasco sent a letter addressed to Cortez dated 28 June 2003 denying the charges.
In her letter, Velasco claimed that the transaction with Mercury Drug, Magsaysay Branch covered
by her check (no. 1072) in the amount of P23,980.00 was merely to accommodate two
undisclosed patients of a certain Dr. Renato Manalo. In support thereto, Velasco attached the
Doctors letter and the affidavit of the latters secretary.
On 12 July 2003, Velasco received a "Second Show-cause Notice" informing her of additional
developments in their investigation. According to the notice, a certain Carlito Jomen executed an

affidavit pointing to Velasco as the one who transacted with a printing shop to print PFIZER
discount coupons. Jomen also presented text messages originating from Velascos company
issued cellphone referring to the printing of the said coupons. Again, Velasco was given 48 hours
to submit her written explanation on the matter. On 16 July 2003, Velasco sent a letter to PFIZER
via Aboitiz courier service asking for additional time to answer the second Show-cause Notice.
That same day, Velasco filed a complaint for illegal suspension with money claims before the
Regional Arbitration Branch. The following day, 17 July 2003, PFIZER sent her a letter inviting her
to a disciplinary hearing to be held on 22 July 2003. Velasco received it under protest and
informed PFIZER via the receiving copy of the said letter that she had lodged a complaint against
the latter and that the issues that may be raised in the July 22 hearing "can be tackled during the
hearing of her case" or at the preliminary conference set for 5 and 8 of August 2003. She likewise
opted to withhold answering the Second Show-cause Notice. On 25 July 2003, Velasco received a
"Third Show-cause Notice," together with copies of the affidavits of two Branch Managers of
Mercury Drug, asking her for her comment within 48 hours. Finally, on 29 July 2003, PFIZER
informed Velasco of its "Management Decision" terminating her employment.
On 5 December 2003, the Labor Arbiter rendered its decision declaring the dismissal of Velasco
illegal, ordering her reinstatement with backwages and further awarding moral and exemplary
damages with attorneys fees. On appeal, the NLRC affirmed the same but deleted the award of
moral and exemplary damages.5
The dispositive portion of the Labor Arbiters Decision dated December 5, 2003 is as follows:
WHEREFORE, judgment is hereby rendered declaring that complainant was illegally dismissed.
Respondents are ordered to reinstate the complainant to her former position without loss of
seniority rights and with full backwages and to pay the complainant the following:
1. Full backwages (basic salary, company benefits, all
allowances
as of December 5, 2003 in the amount of

P572,780.0
0);

2. 13th Month Pay, Midyear, Christmas and


performance bonuses
in the amount of

P105,300.0
0;

3.
4.

Moral damages of

P50,000.00
;

Exemplary damages in the amount of

P30,000.00
;

5. Attorneys Fees of 10% of the award excluding


damages in the
amount of
The total award is in the amount of

P67,808.00
.
P758,080.0
0.6

PFIZER appealed to the National Labor Relations Commission (NLRC) but its appeal was
denied via the NLRC Decision7 dated October 20, 2004, which affirmed the Labor Arbiters ruling
but deleted the award for damages, the dispositive portion of which is as follows:
WHEREFORE, premises considered, the instant appeal and the motion praying for the deposit in
escrow of complainants payroll reinstatement are hereby denied and the Decision of the Labor
Arbiter is affirmed with the modification that the award of moral and exemplary damages is
deleted and attorneys fees shall be based on the award of 13th month pay pursuant to Article III

of the Labor Code.8


PFIZER moved for reconsideration but its motion was denied for lack of merit in a NLRC
Resolution9 dated December 14, 2004.
Undaunted, PFIZER filed with the Court of Appeals a special civil action for the issuance of a writ
of certiorariunder Rule 65 of the Rules of Court to annul and set aside the aforementioned NLRC
issuances. In a Decision dated November 23, 2005, the Court of Appeals upheld the validity of
respondents dismissal from employment, the dispositive portion of which reads as follows:
WHEREFORE, the instant petition is GRANTED. The assailed Decision of the NLRC dated 20
October 2004 as well as its Resolution of 14 December 2004 is hereby ANNULED and SET ASIDE.
Having found the termination of Geraldine L. Velascos employment in accordance with the two
notice rule pursuant to the due process requirement and with just cause, her complaint for illegal
dismissal is hereby DISMISSED.10
Respondent filed a Motion for Reconsideration which the Court of Appeals resolved in the
assailed Resolution dated October 23, 2006 wherein it affirmed the validity of respondents
dismissal from employment but modified its earlier ruling by directing PFIZER to pay respondent
her wages from the date of the Labor Arbiters Decision dated December 5, 2003 up to the Court
of Appeals Decision dated November 23, 2005, to wit:
IN VIEW WHEREOF, the dismissal of private respondent Geraldine Velasco is AFFIRMED, but
petitioner PFIZER, INC. is hereby ordered to pay her the wages to which she is entitled to from
the time the reinstatement order was issued until November 23, 2005, the date of promulgation
of Our Decision.11
Respondent filed with the Court a petition for review under Rule 45 of the Rules of Civil
Procedure, which assailed the Court of Appeals Decision dated November 23, 2005 and was
docketed as G.R. No. 175122. Respondents petition, questioning the Court of Appeals dismissal
of her complaint, was denied by this Courts Second Division in a minute Resolution 12 dated
December 5, 2007, the pertinent portion of which states:
Considering the allegations, issues and arguments adduced in the petition for review on
certiorari, the Court resolves to DENY the petition for failure to sufficiently show any reversible
error in the assailed judgment to warrant the exercise of this Courts discretionary appellate
jurisdiction, and for raising substantially factual issues.
On the other hand, PFIZER filed the instant petition assailing the aforementioned Court of
Appeals Resolutions and offering for our resolution a single legal issue, to wit:
Whether or not the Court of Appeals committed a serious but reversible error when it ordered
Pfizer to pay Velasco wages from the date of the Labor Arbiters decision ordering her
reinstatement until November 23, 2005, when the Court of Appeals rendered its decision
declaring Velascos dismissal valid.13
The petition is without merit.
PFIZER argues that, contrary to the Court of Appeals pronouncement in its assailed Decision
dated November 23, 2005, the ruling in Roquero v. Philippine Airlines, Inc.14 is not applicable in
the case at bar, particularly with regard to the nature and consequences of an order of
reinstatement, to wit:
The order of reinstatement is immediately executory. The unjustified refusal of the employer to
reinstate a dismissed employee entitles him to payment of his salaries effective from the time

the employer failed to reinstate him despite the issuance of a writ of execution. Unless there is a
restraining order issued, it is ministerial upon the Labor Arbiter to implement the order of
reinstatement. In the case at bar, no restraining order was granted. Thus, it was mandatory on
PAL to actually reinstate Roquero or reinstate him in the payroll. Having failed to do so, PAL must
pay Roquero the salary he is entitled to, as if he was reinstated, from the time of the decision of
the NLRC until the finality of the decision of the Court. 15 (Emphases supplied.)
It is PFIZERs contention in its Memorandum16 that "there was no unjustified refusal on [its part]
to reinstate [respondent] Velasco during the pendency of the appeal," 17 thus, the pronouncement
in Roquero cannot be made to govern this case. During the pendency of the case with the Court
of Appeals and prior to its November 23, 2005 Decision, PFIZER claimed that it had already
required respondent to report for work on July 1, 2005. However, according to PFIZER, it was
respondent who refused to return to work when she wrote PFIZER, through counsel, that she was
opting to receive her separation pay and to avail of PFIZERs early retirement program.
In PFIZERs view, it should no longer be required to pay wages considering that (1) it had already
previously paid an enormous sum to respondent under the writ of execution issued by the Labor
Arbiter; (2) it was allegedly ready to reinstate respondent as of July 1, 2005 but it was
respondent who unjustifiably refused to report for work; (3) it would purportedly be tantamount
to allowing respondent to choose "payroll reinstatement" when by law it was the employer which
had the right to choose between actual and payroll reinstatement; (4) respondent should be
deemed to have "resigned" and therefore not entitled to additional backwages or separation pay;
and (5) this Court should not mechanically apply Roquero but rather should follow the doctrine in
Genuino v. National Labor Relations Commission18 which was supposedly "more in accord with
the dictates of fairness and justice." 19
We do not agree.
At the outset, we note that PFIZERs previous payment to respondent of the amount
of P1,963,855.00 (representing her wages from December 5, 2003, or the date of the Labor
Arbiter decision, until May 5, 2005) that was successfully garnished under the Labor Arbiters
Writ of Execution dated May 26, 2005 cannot be considered in its favor. Not only was this sum
legally due to respondent under prevailing jurisprudence but also this circumstance highlighted
PFIZERs unreasonable delay in complying with the reinstatement order of the Labor Arbiter. A
perusal of the records, including PFIZERs own submissions, confirmed that it only required
respondent to report for work on July 1, 2005, as shown by its Letter 20 dated June 27, 2005, which
is almost two years from the time the order of reinstatement was handed down in the Labor
Arbiters Decision dated December 5, 2003.
As far back as 1997 in the seminal case of Pioneer Texturizing Corporation v. National Labor
Relations Commission,21 the Court held that an award or order of reinstatement is immediately
self-executory without the need for the issuance of a writ of execution in accordance with the
third paragraph of Article 22322 of the Labor Code. In that case, we discussed in length the
rationale for that doctrine, to wit:
The provision of Article 223 is clear that an award [by the Labor Arbiter] for reinstatement shall
be immediately executory even pending appeal and the posting of a bond by the employer shall
not stay the execution for reinstatement. The legislative intent is quite obvious, i.e., to make an
award of reinstatement immediately enforceable, even pending appeal. To 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. The reason is simple. An application for a writ
of execution and its issuance could be delayed for numerous reasons. A mere continuance or
postponement of a scheduled hearing, for instance, or an inaction on the part of the Labor
Arbiter or the NLRC could easily delay the issuance of the writ thereby setting at naught the strict

mandate and noble purpose envisioned by Article 223. In other words, if the requirements of
Article 224 [including the issuance of a writ of execution] were to govern, as we so declared
in Maranaw, then the executory nature of a reinstatement order or award contemplated by
Article 223 will be unduly circumscribed and rendered ineffectual. In enacting the law, the
legislature is presumed to have ordained a valid and sensible law, one which operates no further
than may be necessary to achieve its specific purpose. Statutes, as a rule, are to be construed in
the light of the purpose to be achieved and the evil sought to be prevented. x x x In introducing a
new rule on the reinstatement aspect of a labor decision under Republic Act No. 6715, Congress
should not be considered to be indulging in mere semantic exercise. x x x 23 (Italics in the original;
emphasis and underscoring supplied.)
In the case at bar, PFIZER did not immediately admit respondent back to work which, according
to the law, should have been done as soon as an order or award of reinstatement is handed
down by the Labor Arbiter without need for the issuance of a writ of execution. Thus, respondent
was entitled to the wages paid to her under the aforementioned writ of execution. At most,
PFIZERs payment of the same can only be deemed partial compliance/execution of the Court of
Appeals Resolution dated October 23, 2006 and would not bar respondent from being paid her
wages from May 6, 2005 to November 23, 2005.
It would also seem that PFIZER waited for the resolution of its appeal to the NLRC and, only after
it was ordered by the Labor Arbiter to pay the amount of P1,963,855.00 representing
respondents full backwages from December 5, 2003 up to May 5, 2005, did PFIZER decide to
require respondent to report back to work via the Letter dated June 27, 2005.
PFIZER makes much of respondents non-compliance with its return- to-work directive by
downplaying the reasons forwarded by respondent as less than sufficient to justify her purported
refusal to be reinstated. In PFIZERs view, the return-to-work order it sent to respondent was
adequate to satisfy the jurisprudential requisites concerning the reinstatement of an illegally
dismissed employee.
It would be useful to reproduce here the text of PFIZERs Letter dated June 27, 2005:
Dear Ms. Velasco:
Please be informed that, pursuant to the resolutions dated 20 October 2004 and 14 December
2004 rendered by the National Labor Relations Commission and the order dated 24 May 2005
issued by Executive Labor Arbiter Vito C. Bose, you are required to report for work on 1 July 2005,
at 9:00 a.m., at Pfizers main office at the 23rd Floor, Ayala LifeFGU Center, 6811 Ayala Avenue,
Makati City, Metro Manila.
Please report to the undersigned for a briefing on your work assignments and other
responsibilities, including the appropriate relocation benefits.
For your information and compliance.
Very truly yours,
(Sgd.)
Ma. Eden Grace Sagisi
Labor and Employee Relations Manager 24
To reiterate, under Article 223 of the Labor Code, an employee entitled to reinstatement "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."

It is established in jurisprudence that reinstatement means restoration to a state or condition


from which one had been removed or separated. The person reinstated assumes the position he
had occupied prior to his dismissal. Reinstatement presupposes that the previous position from
which one had been removed still exists, or that there is an unfilled position which is
substantially equivalent or of similar nature as the one previously occupied by the employee. 25
Applying the foregoing principle to the case before us, it cannot be said that with PFIZERs June
27, 2005 Letter, in belated fulfillment of the Labor Arbiters reinstatement order, it had shown a
clear intent to reinstate respondent to her former position under the same terms and
conditions nor to a substantially equivalent position. To begin with, the return-to-work order
PFIZER sent respondent is silent with regard to the position or the exact nature of employment
that it wanted respondent to take up as of July 1, 2005. Even if we assume that the job awaiting
respondent in the new location is of the same designation and pay category as what she had
before, it is plain from the text of PFIZERs June 27, 2005 letter that such reinstatement was not
"under the same terms and conditions" as her previous employment, considering that PFIZER
ordered respondent to report to its main office in Makati City while knowing fully well that
respondents previous job had her stationed in Baguio City (respondents place of residence) and
it was still necessary for respondent to be briefed regarding her work assignments and
responsibilities, including her relocation benefits.
The Court is cognizant of the prerogative of management to transfer an employee from one
office to another within the business establishment, provided that there is no demotion in rank or
diminution of his salary, benefits and other privileges and the action is not motivated by
discrimination, made in bad faith, or effected as a form of punishment or demotion without
sufficient cause.26 Likewise, the management prerogative to transfer personnel must be
exercised without grave abuse of discretion and putting to mind the basic elements of justice and
fair play. There must be no showing that it is unnecessary, inconvenient and prejudicial to the
displaced employee.27
The June 27, 2005 return-to-work directive implying that respondent was being relocated to
PFIZERs Makati main office would necessarily cause hardship to respondent, a married woman
with a family to support residing in Baguio City. However, PFIZER, as the employer, offered no
reason or justification for the relocation such as the filling up of respondents former position and
the unavailability of substantially equivalent position in Baguio City. A transfer of work
assignment without any justification therefor, even if respondent would be presumably doing the
same job with the same pay, cannot be deemed faithful compliance with the reinstatement
order. In other words, in this instance, there was no real, bona fide reinstatement to speak of
prior to the reversal by the Court of Appeals of the finding of illegal dismissal.
In view of PFIZERs failure to effect respondent's actual or payroll reinstatement, it is indubitable
that the Roqueroruling is applicable to the case at bar. The circumstance that respondent opted
for separation pay in lieu of reinstatement as manifested in her counsels Letter 28 dated July 18,
2005 is of no moment. We do not see respondents letter as taking away the option from
management to effect actual or payroll reinstatement but, rather under the factual milieu of this
case, where the employer failed to categorically reinstate the employee to her former or
equivalent position under the same terms, respondent was not obliged to comply with PFIZERs
ambivalent return-to-work order. To uphold PFIZERs view that it was respondent who
unjustifiably refused to work when PFIZER did not reinstate her to her former position, and worse,
required her to report for work under conditions prejudicial to her, is to open the doors to
potential employer abuse. Foreseeably, an employer may circumvent the immediately
enforceable reinstatement order of the Labor Arbiter by crafting return-to-work directives that
are ambiguous or meant to be rejected by the employee and then disclaim liability for
backwages due to non-reinstatement by capitalizing on the employees purported refusal to
work. In sum, the option of the employer to effect actual or payroll reinstatement must be
exercised in good faith.

Moreover, while the Court has upheld the employers right to choose between actually
reinstating an employee or merely reinstating him in the payroll, we have also in the past
recognized that reinstatement might no longer be possible under certain circumstances. In F.F.
Marine Corporation v. National Labor Relations Commission, 29 we had the occasion to state:
It is well-settled that when a person is illegally dismissed, he is entitled to reinstatement without
loss of seniority rights and other privileges and to his full backwages. In the event, however, that
reinstatement is no longer feasible, or if the employee decides not be reinstated, the
employer shall pay him separation pay in lieu of reinstatement. Such a rule is likewise observed
in the case of a strained employer-employee relationship or when the work or position formerly
held by the dismissed employee no longer exists. In sum, an illegally dismissed employee is
entitled to: (1) either reinstatement if viable or separation pay if reinstatement is no longer
viable, and (2) backwages.30 (Emphasis supplied.)
Similarly, we have previously held that an employees demand for separation pay may be
indicative of strained relations that may justify payment of separation pay in lieu of
reinstatement.31 This is not to say, however, that respondent is entitled to separation pay in
addition to backwages. We stress here that a finding of strained relations must nonetheless still
be supported by substantial evidence. 32
In the case at bar, respondents decision to claim separation pay over reinstatement had no legal
effect, not only because there was no genuine compliance by the employer to the reinstatement
order but also because the employer chose not to act on said claim. If it was PFIZERs position
that respondents act amounted to a "resignation" it should have informed respondent that it was
accepting her resignation and that in view thereof she was not entitled to separation pay. PFIZER
did not respond to respondents demand at all. As it was, PFIZERs failure to effect reinstatement
and accept respondents offer to terminate her employment relationship with the company
meant that, prior to the Court of Appeals reversal in the November 23, 2005 Decision, PFIZERs
liability for backwages continued to accrue for the period not covered by the writ of execution
dated May 24, 2005 until November 23, 2005.
Lastly, PFIZER exhorts the Court to re-examine the application of Roquero with a view that a
mechanical application of the same would cause injustice since, in the present case, respondent
was able to gain pecuniary benefit notwithstanding the circumstance of reversal by the Court of
Appeals of the rulings of the Labor Arbiter and the NLRC thereby allowing respondent to profit
from the dishonesty she committed against PFIZER which was the basis for her termination. In its
stead, PFIZER proposes that the Court apply the ruling in Genuino v. National Labor Relations
Commission33 which it believes to be more in accord with the dictates of fairness and justice. In
that case, we canceled the award of salaries from the date of the decision of the Labor Arbiter
awarding reinstatement in light of our subsequent ruling finding that the dismissal is for a legal
and valid ground, to wit:
Anent the directive of the NLRC in its September 3, 1994 Decision ordering Citibank "to pay the
salaries due to the complainant from the date it reinstated complainant in the payroll (computed
at P60,000.00 a month, as found by the Labor Arbiter) up to and until the date of this decision,"
the Court hereby cancels said award in view of its finding that the dismissal of Genuino is for a
legal and valid ground.
Ordinarily, the employer is required to reinstate the employee during the pendency of the appeal
pursuant to Art. 223, paragraph 3 of the Labor Code, which states:
xxxx
If the decision of the labor arbiter is later reversed on appeal upon the finding that the ground for
dismissal is valid, then the employer has the right to require the dismissed employee on payroll

reinstatement to refund the salaries s/he received while the case was pending appeal, or it can
be deducted from the accrued benefits that the dismissed employee was entitled to receive from
his/her employer under existing laws, collective bargaining agreement provisions, and company
practices. However, if the employee was reinstated to work during the pendency of the appeal,
then the employee is entitled to the compensation received for actual services rendered without
need of refund.
Considering that Genuino was not reinstated to work or placed on payroll reinstatement, and her
dismissal is based on a just cause, then she is not entitled to be paid the salaries stated in item
no. 3 of the fallo of the September 3, 1994 NLRC Decision.34 (Emphases supplied.)
Thus, PFIZER implores the Court to annul the award of backwages and separation pay as well as
to require respondent to refund the amount that she was able to collect by way of garnishment
from PFIZER as her accrued salaries.
The contention cannot be given merit since this question has been settled by the Court en banc.
In the recent milestone case of Garcia v. Philippine Airlines, Inc.,35 the Court wrote finis to the
stray posture inGenuino requiring the dismissed employee placed on payroll reinstatement to
refund the salaries in case a final decision upholds the validity of the dismissal. In Garcia, we
clarified the principle of reinstatement pending appeal due to the emergence of differing rulings
on the issue, to wit:
On this score, the Court's attention is drawn to seemingly divergent decisions concerning
reinstatement pending appeal or, particularly, the option of payroll reinstatement. On the one
hand is the jurisprudential trend as expounded in a line of cases including Air Philippines Corp. v.
Zamora, while on the other is the recent case ofGenuino v. National Labor Relations Commission.
At the core of the seeming divergence is the application of paragraph 3 of Article 223 of the
Labor Code x x x.
xxxx
The view as maintained in a number of cases is that:
x x x [E]ven if the order of reinstatement of the Labor Arbiter is reversed on appeal, it
is obligatory on the part of the employer to reinstate and pay the wages of the
dismissed employee during the period of appeal until reversal by the higher court. On
the other hand, if the employee has been reinstated during the appeal period and such
reinstatement order is reversed with finality, the employee is not required to reimburse whatever
salary he received for he is entitled to such, more so if he actually rendered services during the
period.(Emphasis in the original; italics and underscoring supplied)
In other words, a dismissed employee whose case was favorably decided by the Labor Arbiter is
entitled to receive wages pending appeal upon reinstatement, which is immediately executory.
Unless there is a restraining order, it is ministerial upon the Labor Arbiter to implement the order
of reinstatement and it is mandatory on the employer to comply therewith.
The opposite view is articulated in Genuino which states:
If the decision of the labor arbiter is later reversed on appeal upon the finding that the ground for
dismissal is valid, then the employer has the right to require the dismissed employee on
payroll reinstatement to refund the salaries [he] received while the case was pending
appeal, or it can be deducted from the accrued benefits that the dismissed employee was
entitled to receive from [his] employer under existing laws, collective bargaining agreement
provisions, and company practices. However, if the employee was reinstated to work during the

pendency of the appeal, then the employee is entitled to the compensation received for actual
services rendered without need of refund.
Considering that Genuino was not reinstated to work or placed on payroll reinstatement, and her
dismissal is based on a just cause, then she is not entitled to be paid the salaries stated in item
no. 3 of the fallo of the September 3, 1994 NLRC Decision. (Emphasis, italics and underscoring
supplied)
It has thus been advanced that there is no point in releasing the wages to petitioners since their
dismissal was found to be valid, and to do so would constitute unjust enrichment.
Prior to Genuino, there had been no known similar case containing a dispositive portion where
the employee was required to refund the salaries received on payroll reinstatement. In fact, in a
catena of cases, the Court did not order the refund of salaries garnished or received by payrollreinstated employees despite a subsequent reversal of the reinstatement order.
The dearth of authority supporting Genuino is not difficult to fathom for it would otherwise render
inutile the rationale of reinstatement pending appeal.
xxxx
x x x Then, by and pursuant to the same power (police power), the State may authorize an
immediate implementation, pending appeal, of a decision reinstating a dismissed or separated
employee since that saving act is designed to stop, although temporarily since the appeal may
be decided in favor of the appellant, a continuing threat or danger to the survival or even the life
of the dismissed or separated employee and his family. 36
Furthermore, in Garcia, the Court went on to discuss the illogical and unjust effects of the "refund
doctrine" erroneously espoused in Genuino:
Even outside the theoretical trappings of the discussion and into the mundane realities of human
experience, the "refund doctrine" easily demonstrates how a favorable decision by the Labor
Arbiter could harm, more than help, a dismissed employee. The employee, to make both ends
meet, would necessarily have to use up the salaries received during the pendency of the appeal,
only to end up having to refund the sum in case of a final unfavorable decision. It is mirage of a
stop-gap leading the employee to a risky cliff of insolvency.1avvphi1
Advisably, the sum is better left unspent. It becomes more logical and practical for the employee
to refuse payroll reinstatement and simply find work elsewhere in the interim, if any is available.
Notably, the option of payroll reinstatement belongs to the employer, even if the employee is
able and raring to return to work. Prior to Genuino, it is unthinkable for one to refuse payroll
reinstatement. In the face of the grim possibilities, the rise of concerned employees declining
payroll reinstatement is on the horizon.
Further, the Genuino ruling not only disregards the social justice principles behind the rule, but
also institutes a scheme unduly favorable to management. Under such scheme, the salaries
dispensed pendente lite merely serve as a bond posted in installment by the employer. For in the
event of a reversal of the Labor Arbiter's decision ordering reinstatement, the employer gets
back the same amount without having to spend ordinarily for bond premiums. This circumvents,
if not directly contradicts, the proscription that the "posting of a bond [even a cash bond] by the
employer shall not stay the execution for reinstatement."
In playing down the stray posture in Genuino requiring the dismissed employee on payroll
reinstatement to refund the salaries in case a final decision upholds the validity of the dismissal,
the Court realigns the proper course of the prevailing doctrine on reinstatement pending appeal

vis--vis the effect of a reversal on appeal.


xxxx
The Court reaffirms the prevailing principle that even if the order of reinstatement of
the Labor Arbiter is reversed on appeal, it is obligatory on the part of the employer to
reinstate and pay the wages of the dismissed employee during the period of appeal
until reversal by the higher court. x x x.37 (Emphasis supplied.)
In sum, the Court reiterates the principle that reinstatement pending appeal necessitates that it
must be immediately self-executory without need for a writ of execution during the pendency of
the appeal, if the law is to serve its noble purpose, and any attempt on the part of the employer
to evade or delay its execution should not be allowed. Furthermore, we likewise restate our ruling
that an order for reinstatement entitles an employee to receive his accrued backwages from the
moment the reinstatement order was issued up to the date when the same was reversed by a
higher court without fear of refunding what he had received. It cannot be denied that, under our
statutory and jurisprudential framework, respondent is entitled to payment of her wages for the
period after December 5, 2003 until the Court of Appeals Decision dated November 23, 2005,
notwithstanding the finding therein that her dismissal was legal and for just cause. Thus, the
payment of such wages cannot be deemed as unjust enrichment on respondents part.
WHEREFORE, the petition is DENIED and the assailed Resolution dated October 23, 2006 as well
as the Resolution dated April 10, 2007 both issued by the Court of Appeals in CA-G.R. SP No.
88987 are hereby AFFIRMED.
SO ORDERED.
G.R. No. 182915

December 12, 2011

MARIALY O. SY, VIVENCIA PENULLAR, AURORA AGUINALDO, GINA ANIANO,o GEMMA


DELA PEA, EFREMIAoMATIAS, ROSARIO BALUNSAY, ROSALINDA PARUNGAO,
ARACELIoRUAZA, REGINA RELOX, TEODORA VENTURA, AMELIA PESCADERO, LYDIA DE
GUZMAN, HERMINIA HERNANDEZ, OLIVIA ABUAN, CARMEN PORTUGUEZ, LYDIA
PENNULAR,oEMERENCIANA WOOD, PRISCILLAoESPINEDA, NANCY FERNANDEZ,
EVAo MANDURIAGA, CONSOLACION SERRANO, SIONY CASILLAN, LUZVIMINDA GABUYA,
MYRNA TAMIN, EVELYN REYES, EVA AYENG, EDNA YAP, RIZAo DELA CRUZ ZUIGA,
TRINIDAD RELOX, MARLON FALLA, MARICEL OCON, and ELVIRA MACAPAGAL, Petitioners,
vs.
FAIRLAND KNITCRAFT CO., INC., Respondent.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 189658
SUSAN T. DE LEON, Petitioner,
vs.
FAIRLAND KNITCRAFT CO., INC., MARIALY O. SY, VIVENCIA PENULLAR, AURORA
AGUINALDO, GINA ANIANO, GEMMA DELA PEA, EFREMIA MATIAS, ROSARIO
BALUNSAY, ROSALINDA PARUNGAO, ARACELI RUAZA, REGINA RELOX, TEODORA
VENTURA, AMELIA PESCADERO, RICHON APARRE, LYDIA DE GUZMAN, HERMINIA
HERNANDEZ, OLIVIA ABUAN, CARMEN PORTUGUEZ, LYDIA PENNULAR, EMERENCIANA
WOOD, PRISCILLA ESPINEDA, NANCY FERNANDEZ, EVA MANDURIAGA, CONSOLACION
SERRANO, SIONY CASILLAN, LUZVIMINDA GABUYA, MYRNA TAMIN, EVELYN REYES, EVA
AYENG, EDNA YAP, RIZA DELA CRUZ ZUIGA, TRINIDAD RELOX, MARLON FALLA,
MARICEL OCON, and ELVIRA MACAPAGAL,Respondents.

DECISION
DEL CASTILLO, J.:
The issues of labor-only contracting and the acquisition of a labor tribunal of jurisdiction over the
person of a respondent are the matters up for consideration in these consolidated Petitions for
Review on Certiorari.
Assailed in G.R. No. 182915 is the May 9, 2008 Resolution 1 of the Special Ninth Division of the
Court of Appeals (CA) in CA-G.R. SP No. 93204 which reversed and set aside the July 25, 2007
Decision2 of the CAs First Division and ordered the exclusion of Fairland Knitcraft Co., Inc.
(Fairland) from the decisions of the labor tribunals. Said July 25, 2007 Decision, on the other
hand, affirmed the November 30, 2004 Decision 3 and August 26, 2005 Resolution4 of the National
Labor Relations Commission (NLRC) which, in turn, reversed and set aside the November 26,
2003 Decision5 of the Labor Arbiter finding the dismissal as valid.
On the other hand, assailed in G.R. No. 189658 is the July 20, 2009 Decision 6 of the CAs Special
Former Special Eighth Division in CA-G.R. SP No. 93860, which affirmed the aforesaid November
30, 2004 Decision and August 26, 2005 Resolution of the NLRC. Likewise assailed is the October
1, 2009 CA Resolution7 denying the Motion for Reconsideration thereto.
Factual Antecedents
Fairland is a domestic corporation engaged in garments business, while Susan de Leon (Susan) is
the owner/proprietress of Weesan Garments (Weesan).
On the other hand, the complaining workers (the workers) are sewers, trimmers, helpers, a guard
and a secretary who were hired by Weesan as follows:
NAME
DATE HIRED
SALARIES
Marialy O. Sy
6/23/1997 P 1,500.00/week
Lydia Penullar
Apr-99
1,000.00/week
Lydia De Guzman
8/1/1998
1,000.00/week
Olivia Abuan
Aug-95
1,300.00/week
Evelyn Reyes
Nov-00
1,000.00/week
Myrna Tamin
Nov-00
1,000.00/week
Elvira Macapagal
4/1/2002
1,000.00/week
Edna Yap
10/24/1999
700.00/week
Rosario Balunsay
1/21/1998
1,400.00/week
Rosalinda P. Parungao
3/2/2001
1,000.00/week
Gemma Dela Pea
11/24/1999
1,000.00/week
Emerenciana Wood
Jan-98
1,400.00/week
Carmen Portuguez
Nov-00
800.00/week
Gina G. Anano
Sep-98
1,500.00/week
Aurora Aguinaldo
Jan-00
1,000.00/week
Amelia Pescadero
Jan-96
1,000.00/week
Siony Casillan
May-02
1,000.00/week
Consolacion Serrano
Oct-01
900.00/week
Teodora Ventura
Jan-00
1,000.00/week
Regina Relox
May-97
1,500.00/week
Eufemia Matias
Mar-00
1,000.00/week
Herminia Hernandez
Aug-95
1,000.00/week

Richon Aparre
Eve Manduriaga
Priscila Espineda
Aracelli Ruaza
Nancy Fernandez
Eva Ayeng
Luzviminda Gabuya
Liza Dela Cuz Zuiga
Vivencia Penullar
Trinidad Relox
Marlon Falla
Maricel Ocon

Jul-99
Feb-00
Nov-00
Mar-00
Nov-00
Nov-00
Nov-00
Oct-01
Jan-00
Aug-96
6/24/2000
1/15/2001

1,200.00/week
1,000.00/week
1,300.00/week
1,000.00/week
1,400.00/week
1,000.00/week
1,000.00/week
1,200.00/week
1,500.00/week
1,200.00/week
840.00/week
1,500.00/week8

On December 23, 2002, workers Marialy O. Sy, Vivencia Penullar, Aurora Aguinaldo, Gina Aniano,
Gemma dela Pea and Efremia Matias filed with the Arbitration Branch of the NLRC a
Complaint9 for underpayment and/or non-payment of wages, overtime pay, premium pay for
holidays, 13th month pay and other monetary benefits against Susan/Weesan. In January 2003,
the rest of the aforementioned workers also filed similar complaints. Eventually all the cases
were consolidated as they involved the same causes of action.
On February 5, 2003, Weesan filed before the Department of Labor and Employment-National
Capital Region (DOLE-NCR) a report on its temporary closure for a period of not less than six
months. As the workers were not anymore allowed to work on that same day, they filed on
February 18, 2003 an Amended Complaint,10 and on March 13, 2003, another pleading entitled
Amended Complaints and Position Paper for Complainants, 11 to include the charge of illegal
dismissal and impleaded Fairland and its manager, Debbie Manduabas (Debbie), as additional
respondents.
A Notice of Hearing12 was thereafter sent to Weesan requesting it to appear before Labor Arbiter
Ramon Valentin C. Reyes (Labor Arbiter Reyes) on April 3, 2003, at 10:00 a.m. On said date and
time, Atty. Antonio A. Geronimo (Atty. Geronimo) appeared as counsel for Weesan and requested
for an extension of time to file his clients position paper. 13 On the next hearing on April 28, 2003,
Atty. Geronimo also entered his appearance for Fairland and again requested for an extension of
time to file position paper.14
On May 16, 2003, Atty. Geronimo filed two separate position papers one for Fairland 15 and
another for Susan/Weesan.16 The Position Paper for Fairland was verified by Debbie while the one
for Susan/Weesan was verified by Susan. To these pleadings, the workers filed a Reply. 17
Atty. Geronimo then filed a Consolidated Reply 18 verified19 both by Susan and Debbie.
On November 25, 2003, the workers submitted their Rejoinder. 20
Ruling of the Labor Arbiter
On November 26, 2003, Labor Arbiter Reyes rendered his Decision,21 the dispositive portion of
which reads:
WHEREFORE, premises all considered, judgment is hereby rendered, as follows:
Dismissing the complaint for lack of merit; and ordering the respondents to pay each
complainant P5,000.00 by way of financial assistance.

SO ORDERED.22
Ruling of the National Labor Relations Commission
The workers filed their appeal which was granted by the NLRC. The dispositive portion of the
NLRC Decision23reads:
WHEREFORE, premises considered, the appealed decision is hereby set aside and the dismissal
of complainants is declared illegal.
Respondents are, therefore, ordered to reinstate complainants to their original or equivalent
position with full backwages with legal interests thereon from February 5, 2003, until actually
reinstated and fully paid, with retention of seniority rights and are further ordered to pay
solidarily to the complainants the difference of their underpaid/unpaid wages, unpaid holidays,
unpaid 13th month pays and unpaid service incentive leaves with legal interests thereon, to wit:
xxxx
In the event that reinstatement is not possible, respondents are ordered to pay solidarily to
complainants their respective separation pays computed as follows:
xxxx
Respondents are likewise ordered to pay ten (10%) percent of the gross award as and by way of
attorneys fees.
SO ORDERED.24
Hence, Atty. Geronimo filed a Motion for Reconsideration. 25 However, Fairland filed another
Motion for Reconsideration26 through Atty. Melina O. Tecson (Atty. Tecson) assailing the
jurisdiction of the Labor Arbiter and the NLRC over it, claiming that it was never summoned to
appear, attend or participate in all the proceedings conducted therein. It also denied that it
engaged the services of Atty. Geronimo.
The NLRC however, denied both motions for lack of merit. 27
Fairland and Susan thus filed their separate Petitions for Certiorari before the CA docketed as CAG.R. SP No. 93204 and CA-G.R. SP No. 93860, respectively.
Ruling of the Court of Appeals in CA-G.R. SP No. 93204
On July 25, 2007, the CAs First Division denied Fairlands petition. 28 It affirmed the NLRCs ruling
that the workers were illegally dismissed and that Weesan and Fairland are solidarily liable to
them as labor-only contractor and principal, respectively.
Fairland filed its Motion for Reconsideration 29 as well as a Motion for Voluntary Inhibition 30 of
Associate Justices Celia C. Librea-Leagogo and Regalado E. Maambong from handling the case.
As the Motion for Voluntary Inhibition was granted through a Resolution 31 dated November 8,
2007, the case was transferred to the CAs Special Ninth Division for resolution of Fairlands
Motion for Reconsideration.32
On May 9, 2008, the CAs Special Ninth Division reversed 33 the First Divisions ruling. It held that
the labor tribunals did not acquire jurisdiction over the person of Fairland, and even assuming
they did, Fairland is not liable to the workers since Weesan is not a mere labor-only contractor

but a bona fide independent contractor. The Special Ninth Division thus annulled and set aside
the assailed NLRC Decision and Resolution insofar as Fairland is concerned and excluded the
latter therefrom. The dispositive portion of said Resolution reads:
WHEREFORE, the Motion for Reconsideration filed by the movant is GRANTED.
The July 25, 2007 Decision of the First Division of this Court finding that the NLRC did not act with
grave abuse of discretion amounting to lack or excess of jurisdiction and denying the Petition is
REVERSED and SET ASIDE.
Consequently, the Decision and Resolution issued by the public respondent on November 30,
2004 and August 26, 2005, respectively, are hereby ANNULLED and SET ASIDE insofar as [it]
concerns the petitioner Fairland Knitcraft Co., Inc. [which] is hereby ordered dropped and
excluded therefrom.
SO ORDERED.34
Aggrieved, the workers filed before us their Petition for Review on Certiorari docketed as G.R. No.
182915.
Ruling of the Court of Appeals in CA-G.R. SP No. 93860
With regard to Susans petition, the CA Special Ninth Division issued on May 11, 2006 a
Resolution35 temporarily restraining the NLRC from enforcing its assailed November 30, 2004
Decision and thereafter the CA Special Eighth Division issued a writ of preliminary prohibitory
injunction.36 On July 20, 2009, the Special Former Special Eighth Division of the CA resolved the
case through a Decision,37 the dispositive portion of which reads:
WHEREFORE, premises considered, the present petition is hereby DENIED DUE COURSE and
accordingly DISMISSED for lack of merit. The Decision dated November 30, 2004 and Resolution
dated August 26, 2005 of the National Labor Relations Commission (NLRC) in CA No. 039375-04
(NLRC NCR 00-12-11294-02, 00-01-00027-03, 00-01-00131-03, 00-01-00820-03 and 00-0101249-03) are hereby AFFIRMED and UPHELD.
The writ of preliminary prohibitory injunction issued by this Court on July 13, 2006 is hereby
LIFTED and SET ASIDE.
With cost against petitioner.
SO ORDERED.38
Susan moved for reconsideration39 which was denied by the CA in its October 1, 2009
Resolution.40
Hence, she filed before this Court a Petition for Review on Certiorari docketed as G.R. No. 189658
which was denied in this Courts December 16, 2009 Resolution 41 on technicality and for failure
to sufficiently show any reversible error in the assailed judgment.
Susan and Fairland filed their respective Motions for Reconsideration. 42 But before said motions
could be resolved, the Court ordered the consolidation of Susans petition with that of the
workers.43
Susans Motion for Reconsideration of this Courts December 16, 2009 Resolution in G.R No.
189658 is granted. Consequently, her Petition for Review on Certiorari is reinstated.

With Susan and Fairlands respective Motions for Reconsideration still unresolved, this Court shall
first address them.
One of the grounds for the denial of Susans petition was her failure to indicate the date of filing
her Motion for Reconsideration with the CA as required under Section 4(b), 44 Rule 45 of the Rules
of Court. However, "failure to comply with the rule on a statement of material [date] in the
petition may be excused [if] the [date is] evident from the records." 45 In the case of Susan,
records show that she received the copy of the Decision of the CA on July 24, 2009. She then
timely filed her Motion for Reconsideration via registered mail on August 7, 2009 as shown by the
envelope46 with stamped receipt of the Batangas City Post Office bearing the date August 7,
2009. The fact of such filing was also stated in the Motion for Extension of Time to File Petition for
Review47 that she filed before this Court which forms part of the records of this case. Hence, it is
clear that Susan seasonably filed her Motion for Reconsideration.
Moreover, while we note that Susans petition was also denied on the ground of no reversible
error committed by the CA, we deem it proper, in the interest of justice, to take a second look on
the merits of Susans petition and reinstate G.R. No. 189658. This is also to harmonize our ruling
in these consolidated petitions and avoid confusion that may arise in their execution. Hence, we
grant Susans Motion for Reconsideration and consequently, reinstate her Petition for Review on
Certiorari.
As to Fairlands Motion for Reconsideration, we shall treat the same as its comment to Susans
petition, Fairland being one of the respondents therein.
Issues
In G.R. No. 189658, Susan imputes upon the CA the following errors:
I.
The Court of Appeals erred in finding that petitioner is a labor-only contractor acting as an
agent of respondent Fairland.
II.
The Court of Appeals erred in finding that the individual private respondents were illegally
dismissed.
III.
The Court of Appeals erred in not resolving the issue raised by petitioner in her reply
DATED JULY 8, 2006 regarding the propriety of the appeal taken by private respondent
Richon Cainoy Aparre who was already dead prior to the filing of the memorandum of
appeal before the NLRC.48
Susans Arguments
Susan insists that the CA erred in ruling that Weesan is a labor-only contractor based on the
finding that its workplace is owned by Fairland. She maintains that the place is owned by De Luxe
Shirt Factory, Inc. (De Luxe) and not by Fairland as shown by the Contracts of Lease between
Weesan and De Luxe.
Susan also avers that the CA erred in ruling that Weesan was guilty of illegal dismissal. She
maintains that the termination of the workers was due to financial losses suffered by Weesan as

shown by various documents submitted by the latter to the tribunals below. In fact, Weesan
submitted its Establishment Termination Report with the DOLE-NCR and same was duly received
by the latter.
Lastly, Susan argues that the appeal of one of the workers, Richon Cainoy Aparre (Richon),
should not have been given due course because in the Notice of Appeal with Appeal
Memorandum filed with the NLRC, a certain Luzvilla A. Rayon (Luzvilla), whose identity was never
established, signed for and on his behalf. However, there is no information submitted before the
NLRC that Richon is already dead, and in any event, no proper substitution was ever made.
The Workers Arguments
The workers claim that Weesan is a labor-only contractor because it does not have substantial
capital or investment in the form of tools, equipment, machineries, and work premises, among
others, and that the workers it recruited are performing activities which are directly related to the
garments business of Fairland. Hence, Weesan should be considered as a mere agent of Fairland,
who shall be responsible to the workers as if they were directly employed by it (Fairland). 49
The workers also allege that the temporary suspension of operations of Weesan was motivated
not by a desire to prevent further losses, but to discourage the workers from ventilating their
claims for non-payment/underpayment of wages and benefits. The fact that Weesan was
experiencing serious business losses was not sufficiently established and therefore the
termination of the workers due to alleged business losses is invalid. 50
Fairlands Arguments
Fairland maintains that it was never served with summons to appear in the proceedings before
the Labor Arbiter nor furnished copies of the Labor Arbiters Decision and Resolution on the
workers complaints for illegal dismissal; that it never voluntarily appeared before the labor
tribunals through Atty. Geronimo;51 that it is a separate and distinct business entity from Weesan;
that Weesan is a legitimate job contractor, hence, the workers were actually its (Weesans)
employees; and that, consequently, the workers have no cause of action against Fairland. 52
At any rate, assuming that the workers have a cause of action against Fairland, their claims are
already barred by prescription. Of the 34 individual complainants (the workers), only six were
employees of Weesan during the period of its contractual relationship with Fairland in 1996 and
1997. They were Marialy Sy, Olivia Abuan, Amelia Pescadero, Regina Relox, Hermina Hernandez
and Trinidad Relox. These workers filed their complaints in December 2002 and January 2003 or
more than four years from the expiration of Weesans contractual arrangement with Fairland in
1997. Article 291 of the Labor Code provides that all money claims arising from employeremployee relationship shall be filed within three years from the time the cause of action accrued;
otherwise, they shall be forever barred. Illegal dismissal prescribes in four years and damages
due to separation from employment for alleged unjustifiable causes injuring a plaintiffs right
must likewise be brought within four years under the Civil Code. Clearly, the claims of said six
employees are already barred by prescription. 53
In G.R. No. 182915, the workers advance the following issues:
I.
Whether x x x the National Labor Relations Commission acquired jurisdiction over the
[person of the] respondent[;]
II.

Whether x x x the decision of the National Labor Relations Commission became final and
executory[; and]
III.
Whether x x x respondent is solidarily liable with WEESAN GARMENT/ SUSAN DE LEON[.] 54
The Workers Arguments
The workers contend that the Labor Arbiter and the NLRC properly acquired jurisdiction over the
person of Fairland because the latter voluntarily appeared and actively participated in the
proceedings below when Atty. Geronimo submitted on its behalf a Position Paper verified by its
manager, Debbie. As manager, Debbie knew of all the material and significant events which
transpired in Fairland since she had constant contact with the people in the day-to-day
operations of the company. Thus, the workers maintain that the Labor Arbiter and the NLRC
acquired jurisdiction over the person of Fairland and the Decisions rendered by the said tribunals
are valid and binding upon it.
Lastly, the workers aver that Fairland is solidarily liable with Susan/ Weesan because it was
shown that the latter was indeed the sewing arm of the former and is a mere "labor-only
contractor".
Fairlands Arguments
In gist, Fairland contests the labor tribunals acquisition of jurisdiction over its person either
through service of summons or voluntary appearance. It denies that it engaged the services of
Atty. Geronimo and asserts that it has its own legal counsel, Atty. Tecson, who would have
represented it had it known of the pendency of the complaints against Fairland.
Fairland likewise emphasizes that when it filed its Motion for Reconsideration with the NLRC, it
made an express reservation that the same was without prejudice to its right to question the
jurisdiction over its person and the binding effect of the assailed decision. In the absence,
therefore, of a valid service of summons or voluntary appearance, the proceedings conducted
and the judgment rendered by the labor tribunals are null and void as against it. Hence, Fairland
cannot be held solidarily liable with Susan/Weesan.
Our Ruling
We grant the workers petition (G.R. No. 182915) but deny the petition of Susan (G.R. No.
189658).
G.R. No. 189658
Susan/Weesan is a mere labor-only contractor.
"There is labor-only contracting when the contractor or subcontractor merely recruits, supplies or
places workers to perform a job, work or service for a principal. In labor-only contracting, the
following elements are present:
(a) The person supplying workers to an employer does not have substantial capital or
investment in the form of tools, equipment, machineries, work premises, among others;
and
(b) The workers recruited and placed by such person are performing activities which are

directly related to the principal business of the employer." 55


Here, there is no question that the workers, majority of whom are sewers, were recruited by
Susan/Weesan and that they performed activities which are directly related to Fairlands principal
business of garments. What must be determined is whether Susan/Weesan has substantial
capital or investment in the form of tools, equipment, machineries, work premises, among
others.
We have examined the records but found nothing therein to show that Weesan has investment in
the form of tools, equipment or machineries. The records show that Fairland has to furnish
Weesan with sewing machines for it to be able to provide the sewing needs of the former. 56 Also,
save for the Balance Sheets57 purportedly submitted by Weesan to the Bureau of Internal
Revenue (BIR) indicating its fixed assets (factory equipment) in the amount ofP243,000.00,
Weesan was unable to show that apart from the borrowed sewing machines, it owned and
possessed any other tools, equipment, and machineries necessary to its being a contractor or
sub-contractor for garments. Neither was Weesan able to prove that it has substantial capital for
its business.
Likewise significant is the fact that there is doubt as to who really owns the work premises
occupied by Weesan. As may be recalled, the workers emphasized in their Appeal
Memorandum58 filed with the NLRC that Susan/Weesan was a labor-only contractor and that
Fairland was its principal. To buttress this, they alleged that the work premises utilized by
Weesan is owned by Fairland, which significantly, was not in the business of renting properties.
They also advanced that there was no showing that Susan/Weesan paid any rentals for the use of
the premises. They contended that all that Susan had was a Mayors Permit for
Weesan indicating 715 Ricafort Street, Tondo, Manila as its address.
Susan failed to refute these allegations before the NLRC and attributed such failure to her former
counsel, Atty. Geronimo. But when Susans petition for certiorari was given due course by the CA,
she finally had the chance to answer the same by denying that Fairland owned the work
premises. Susan instead claimed that Weesan rented the premises from another entity, De Luxe.
To support this, she attached to her petition two Contracts of Lease 59purportedly entered into by
her and De Luxe for the lease of the premises covering the periods August 1, 1997 to July 31,
2000 and January 1, 2001 to December 31, 2004.
On the other hand, the workers in their Comment 60 filed in CA-G.R. SP No. 93204 (Fairlands
petition for certiorari before the CA), pointed out that in Fairlands Amended Articles of
Incorporation,61 five out of the seven incorporators listed therein appeared to be residents of the
same 715 Ricafort St., Tondo, Manila. To the workers, this is a clear indication that Fairland indeed
owned Weesans work premises. Fairland, for its part, tried to explain this by saying that its
incorporators, just like Weesan, were also mere lessees of a portion of the multi-storey building
owned by De Luxe located at 715 Ricafort St., Tondo, Manila. It also claimed that two years prior
to Weesans occupation of said premises in 1996, the five incorporators alluded to already
transferred.62
We cannot, however, ignore the apt observation on the matter made by the CAs Special Former
Special Eighth Division in its Decision in CA-G.R. SP No. 93860, viz:
The work premises are likewise owned by Fairland, which petitioner tried to disprove by
presenting a purported Contract of Lease with another entity, De Luxe Shirt Factory Co.,
Inc. However, there is no competent proof it paid the supposed rentals to said
owner. Curiously, under the item Rent Expenses in its audited financial statement,
only equipment rental was listed therein without any disbursement/expense for rental
of factory premises, which only buttressed the claim of private respondents that the place

where they reported to and performed sewing jobs for petitioner [Susan] and Fairland at No. 715
Ricafort St., Tondo, Manila, belonged to Fairland. 63 (Emphasis supplied.)
Susan contests this pronouncement by pointing out that although only sewing machines were
specified under the entry "Rent Expenses" in its financial statement, the rent for the factory
premises is already deemed included therein since the contracts of lease she entered into with
De Luxe referred to both the factory premises and machineries.
We, however, find this contention implausible.
We went over the said contracts of lease and noted that same were principally for the lease of
the premises in 715 Ricafort St., Tondo, Manila. Only incidental thereto is the inclusion therein of
the equipment found in said premises. Hence, we cannot see why the rentals for the work
premises, for which Susan even went to the extent of executing a contract with the purported
lessor, was not included in the entry for rent expenses in Weesans financial statement. Even if
we are to concede to Susans claim that the entry for rent expenses already includes the rentals
for the work premises, we wonder why the rental expenses for the year 2000 which
was P396,000.00 is of the same amount with the rental expenses for the year 2001. As borne out
by the Contract of Lease covering the period August 1, 1997 to July 31, 2000, the monthly rent
for the work premises was pegged at P25,000.00.64However, in January to December 2001, same
was increased to P27,500.00.65 There being an increase in the rentals for the work premises, how
come that Weesans rental expenses for the year 2001 is still P396,000.00? This could only mean
that said entry really only refers to the rentals of sewing machines and does not include the
rentals for the work premises. Moreover, we note that Susan could have just simply submitted
receipts for her payments of rentals to De Luxe. However, she failed to present even a single
receipt evidencing such payment.
In an attempt to prove that it is De Luxe and not Fairland which owned the work premises, Susan
attached to her petition the following: (1) a plain copy of Transfer Certificate of Title (TCT) No.
13979066 and Declaration of Real Property67 both under the name of De Luxe; and, (2) Real
Property Tax receipts issued to De Luxe for the years 2000-2004. 68 However, the Court finds
these documents wanting. Nowhere from the said TCT and Declaration of Real Property can it be
inferred that the property they refer to is the same property as that located at 715 Ricafort St.,
Tondo, Manila. Although in said Declaration, 715 Ricafort St., Tondo is the indicated address of
the declarant (De Luxe), the address of the property declared is merely "Ricafort, Tondo I-A". The
same thing can also be said with regard to the real property tax receipts. The entry under the
box Location of Property in the receipt for 2001 is "I - 718 Ricafort" and in the receipts for 2002,
2003, and 2004, the entries are either "I Ricafort St., Tondo" or merely "I-Ricafort St."
In sum, the Court finds that Susans effort to negate Fairlands ownership of the work premises is
futile. The logical conclusion now is that Weesan does not have its own workplace and is only
utilizing the workplace of Fairland to whom it supplied workers for its garment business.
Suffice it to say that "[t]he presumption is that a contractor is a labor-only contractor unless such
contractor overcomes the burden of proving that it has substantial capital, investment, tools and
the like."69 As Susan/Weesan was not able to adduce evidence that Weesan had any substantial
capital, investment or assets to perform the work contracted for, the presumption that Weesan is
a labor-only contractor stands.70
The National Labor Relations Commission and the Court of Appeals did not err in their findings of
illegal dismissal.
To negate illegal dismissal, Susan relies on the due closure of Weesan pursuant to the
Establishment Termination Report it submitted to the DOLE-NCR.

Indeed, Article 28371 of the Labor Code allows as a mode of termination of employment the
closure or termination of business. "Closure or cessation of business is the complete or partial
cessation of the operations and/or shut-down of the establishment of the employer. It is carried
out to either stave off the financial ruin or promote the business interest of the employer." 72 "The
decision to close business [or to temporarily suspend operation] is a management prerogative
exclusive to the employer, the exercise of which no court or tribunal can meddle with, except
only when the employer fails to prove compliance with the requirements of Art. 283, to wit: a)
that the closure/cessation of business is bona fide, i.e., its purpose is to advance the interest of
the employer and not to defeat or circumvent the rights of employees under the law or a valid
agreement; b) that written notice was served on the employees and the DOLE at least one month
before the intended date of closure or cessation of business; and c) in case of closure/cessation
of business not due to financial losses, that the employees affected have been given separation
pay equivalent to month pay for every year of service or one month pay, whichever is
higher."73
Here, Weesan filed its Establishment Termination Report 74 allegedly due to serious business
losses and other economic reasons. However, we are mindful of the doubtful character of
Weesans application for closure given the circumstances surrounding the same.
First, workers Marialy Sy, Vivencia Penullar, Aurora Aguinaldo, Gina Aniano, Gemma Dela Pea
and Efremia Matias filed before the Labor Arbiter their complaint for underpayment of salary,
non-payment of benefits, damages and attorneys fees against Weesan on December 23,
2002.75 Summons76 was accordingly issued and same was received by Susan on January 15,
2003.77 Meanwhile, other workers followed suit and filed their respective complaints on January 2,
6, 17 and 28, 2003.78 Shortly thereafter or merely eight days after the filing of the last complaint,
Weesan filed with the DOLE-NCR its Establishment Termination Report.
Second, the Income Tax Returns79 for the years 2000, 2001 and 2002 attached to the
Establishment Termination Report, although bearing the stamped receipt of the Revenue District
Office where they were purportedly filed, contain no signature or initials of the receiving officer.
The same holds true with Weesans audited financial statements. 80 This engenders doubt as to
whether these documents were indeed filed with the proper authorities.
Third, there was no showing that Weesan served upon the workers written notice at least one
month before the intended date of closure of business, as required under Art. 283 of the Labor
Code. In fact, the workers alleged that when Weesan filed its Establishment Termination Report
on February 5, 2003, it already closed the work premises and did not anymore allow them to
report for work. This is the reason why the workers on February 18, 2003 amended their
complaint to include the charge of illegal dismissal. 81
It bears stressing that "[t]he burden of proving that x x x a temporary suspension is bona
fide falls upon the employer."82 Clearly here, Susan/Weesan was not able to discharge this
burden. The documents Weesan submitted to support its claim of severe business losses cannot
be considered as proof of financial crisis to justify the temporary suspension of its operations
since they clearly appear to have not been duly filed with the BIR. Weesan failed to satisfactorily
explain why the Income Tax Returns and financial statements it submitted do not bear the
signature of the receiving officers. Also hard to ignore is the absence of the mandatory 30-day
prior notice to the workers.
Hence, the Court finds that Susan failed to prove that the suspension of operations of Weesan
was bona fide and that it complied with the mandatory requirement of notice under the law.
Susan likewise failed to discharge her burden of proving that the termination of the workers was
for a lawful cause. Therefore, the NLRC and the CA, in CA-G.R. SP No. 93860, did not err in their
findings that the workers were illegally dismissed by Susan/Weesan.

The formal substitution of the deceased


worker Richon Aparre is not necessary as his heir voluntarily appeared and participated in the
proceedings before the National Labor Relations Commission.
In Sarsaba v. Fe Vda. de Te, we held that:83
The rule on substitution of parties is governed by Section 16, 84 Rule 3 of the [Rules of Court].
Strictly speaking, the rule on substitution by heirs is not a matter of jurisdiction, but a
requirement of due process. The rule on substitution was crafted to protect every party's right to
due process. It was designed to ensure that the deceased party would continue to be properly
represented in the suit through his heirs or the duly appointed legal representative of his estate.
Moreover, non-compliance with the Rules results in the denial of the right to due process for the
heirs who, though not duly notified of the proceedings, would be substantially affected by the
decision rendered therein. Thus, it is only when there is a denial of due process, as when the
deceased is not represented by any legal representative or heir, that the court nullifies the trial
proceedings and the resulting judgment therein.
Here, the lack of formal substitution of the deceased worker Richon did not result to denial of due
process as to affect the validity of the proceedings before the NLRC since his heir, Luzvilla, was
aware of the proceedings therein. In fact, she is considered to have voluntarily appeared before
the said tribunal when she signed the workers Memorandum of Appeal filed therewith. "This
Court has ruled that formal substitution of parties is not necessary when the heirs themselves
voluntarily appeared, participated, and presented evidence during the proceedings." 85 Hence, the
NLRC did not err in giving due course to the appeal with respect to Richon.
Fairlands claim of prescription deserves scant consideration.
Fairland asserts that assuming that the workers have valid claims against it, same only pertain to
six out of the 34 workers-complainants. According to Fairland, these six workers were the only
ones who were in the employ of Weesan at the time Fairland and Weesan had existing
contractual relationship in 1996 to 1997. But then, Fairland contends that the claims of these six
workers have already been barred by prescription as they filed their complaint more than four
years from the expiration of the alleged contractual relationship in 1997. However, the Court
notes that the records are bereft of anything that provides for such alleged contractual
relationship and the period covered by it. Absent anything to support Fairlands claim, same
deserves scant consideration.
Interestingly, we noticed Fairlands letter86 dated January 31, 2003 informing Weesan that it
would temporarily not be availing of the latters sewing services and at the same time requesting
for the return of the sewing machines it lent to Weesan. Assuming said letter to be true, why was
Fairland terminating Weesans services only on January 31, 2003 when it is now claiming that its
contractual relationship with the latter only lasted until 1997? Thus, we find the contentions
rather abstruse.
G.R. No. 182915
"It is basic that the Labor Arbiter cannot acquire jurisdiction over the person of the respondent
without the latter being served with summons." 87 However, "if there is no valid service of
summons, the court can still acquire jurisdiction over the person of the defendant by virtue of the
latters voluntary appearance."88
Although not served with summons, jurisdiction over Fairland and Debbie was acquired through
their voluntary appearance.

It can be recalled that the workers original complaints for non-payment/ underpayment of wages
and benefits were only against Susan/Weesan. For these complaints, the Labor Arbiter issued
summons89 to Susan/Weesan which was received by the latter on January 15, 2003. 90 The
workers thereafter amended their then already consolidated complaints to include illegal
dismissal as an additional cause of action as well as Fairland and Debbie as additional
respondents. We have, however, scanned the records but found nothing to indicate that
summons with respect to the said amended complaints was ever served upon Weesan, Susan, or
Fairland. True to their claim, Fairland and Debbie were indeed never summoned by the Labor
Arbiter.
The crucial question now is: Did Fairland and Debbie voluntarily appear before the Labor Arbiter
as to submit themselves to its jurisdiction?
Fairland argued before the CA that it did not engage Atty. Geronimo as its counsel. However, the
Court held inSantos v. National Labor Relations Commission,91 viz:
In the instant petition for certiorari, petitioner Santos reiterates that he should not have been
adjudged personally liable by public respondents, the latter not having validly acquired
jurisdiction over his person whether by personal service of summons or by substituted service
under Rule 19 of the Rules of Court.
Petitioners contention is unacceptable. The fact that Atty. Romeo B. Perez has been able to
timely ask for a deferment of the initial hearing on 14 November 1986, coupled with his
subsequent active participation in the proceedings, should disprove the supposed want of service
of legal processes. Although as a rule, modes of service of summons are strictly followed in order
that the court may acquire jurisdiction over the person of a defendant, such procedural modes,
however, are liberally construed in quasi-judicial proceedings, substantial compliance with the
same being considered adequate. Moreover, jurisdiction over the person of the defendant in civil
cases is acquired not only by service of summons but also by voluntary appearance in court and
submission to its authority. Appearance by a legal advocate is such voluntary submission to a
courts jurisdiction. It may be made not only by actual physical appearance but likewise by the
submission of pleadings in compliance with the order of the court or tribunal.
To say that petitioner did not authorize Atty. Perez to represent him in the case is to unduly tax
credulity. Like the Solicitor General, the Court likewise considers it unlikely that Atty. Perez would
have been so irresponsible as to represent petitioner if he were not, in fact, authorized. Atty.
Perez is an officer of the court, and he must be presumed to have acted with due propriety. The
employment of a counsel or the authority to employ an attorney, it might be pointed out, need
not be proved in writing; such fact could [be] inferred from circumstantial evidence. x x
x92 (Citations omitted.)
From the records, it appears that Atty. Geronimo first entered his appearance on behalf of
Susan/Weesan in the hearing held on April 3, 2003. 93 Being then newly hired, he requested for an
extension of time within which to file a position paper for said respondents. On the next
scheduled hearing on April 28, 2003, Atty. Geronimo again asked for another extension to file a
position paper for all the respondents considering that he likewise entered his appearance for
Fairland.94 Thereafter, said counsel filed pleadings such as Respondents Position Paper 95 and
Respondents Consolidated Reply96 on behalf of all the respondents namely, Susan/Weesan,
Fairland and Debbie. The fact that Atty. Geronimo entered his appearance for Fairland and Debbie
and that he actively defended them before the Labor Arbiter raised the presumption that he is
authorized to appear for them. As held in Santos, it is unlikely that Atty. Geronimo would have
been so irresponsible as to represent Fairland and Debbie if he were not in fact authorized. As an
officer of the Court, Atty. Geronimo is presumed to have acted with due propriety. Moreover, "[i]t
strains credulity that a counsel who has no personal interest in the case would fight for and
defend a case with persistence and vigor if he has not been authorized or employed by the party

concerned."97
We do not agree with the reasons relied upon by the CAs Special Ninth Division in its May 9,
2008 Resolution in CA-G.R. No. 93204 when it ruled that Fairland, through Atty. Geronimo, did not
voluntarily submit itself to the Labor Arbiters jurisdiction.
In so ruling, the CA noted that Atty. Geronimo has no prior authorization from the board of
directors of Fairland to handle the case. Also, the alleged verification signed by Debbie, who is
not one of Fairlands duly authorized directors or officers, is defective as no board resolution or
secretarys certificate authorizing her to sign the same was attached thereto. Because of these,
the Special Ninth Division held that the Labor Arbiter committed grave abuse of discretion in not
requiring Atty. Geronimo to show his proof of authority to represent Fairland considering that the
latter is a corporation.
The presumption of authority of counsel to appear on behalf of a client is found both in the Rules
of Court and in the New Rules of Procedure of the NLRC. 98
Sec. 21, Rule 138 of the Rules of Court provides:
Sec. 21. Authority of attorney to appear An attorney is presumed to be properly authorized to
represent any cause in which he appears, and no written power of attorney is required to
authorize him to appear in court for his client, but the presiding judge may, on motion of either
party and reasonable grounds therefor being shown, require any attorney who assumes the right
to appear in a case to produce or prove the authority under which he appears, and to disclose
whenever pertinent to any issue, the name of the person who employed him, and may thereupon
make such order as justice requires. An attorney willfully appearing in court for a person without
being employed, unless by leave of the court, may be punished for contempt as an officer of the
court who has misbehaved in his official transactions.
On the other hand, Sec. 8, Rule III of the New Rules of Procedure of the NLRC, 99 which is the rules
prevailing at that time, states in part:
SECTION 8. APPEARANCES. - An attorney appearing for a party is presumed to be properly
authorized for that purpose. However, he shall be required to indicate in his pleadings his PTR
and IBP numbers for the current year.
Between the two provisions providing for such authority of counsel to appear, the Labor Arbiter is
primarily bound by the latter one, the NLRC Rules of Procedure being specifically applicable to
labor cases. As Atty. Geronimo consistently indicated his PTR and IBP numbers in the pleadings
he filed, there is no reason for the Labor Arbiter not to extend to Atty. Geronimo the presumption
that he is authorized to represent Fairland.
Even if we are to apply Sec. 21, Rule 138 of the Rules of Court, the Labor Arbiter cannot be
expected to require Atty. Geronimo to prove his authority under said provision since there was no
motion to that effect from either party showing reasonable grounds therefor. Moreover, the fact
that Debbie signed the verification attached to the position paper filed by Atty. Geronimo,
without a secretarys certificate or board resolution attached thereto, is not sufficient reason for
the Labor Arbiter to be on his guard and require Atty. Geronimo to prove his authority. Debbie, as
General Manager of Fairland is one of the officials of the company who can sign the verification
without need of a board resolution because as such, she is in a position to verify the truthfulness
and correctness of the
allegations in the petition.100
Although we note that Fairland filed a disbarment case against Atty. Geronimo due to the

formers claim of unauthorized appearance, we hold that same is not sufficient to overcome the
presumption of authority. Such mere filing is not proof of Atty. Geronimos alleged unauthorized
appearance. Suffice it to say that an attorneys presumption of authority is a strong one. 101 "A
mere denial by a party that he authorized an attorney to appear for him, in the absence of a
compelling reason, is insufficient to overcome the presumption, especially when the denial
comes after the rendition of an adverse judgment," 102 such as in the present case.
Citing PNOC Dockyard and Engineering Corporation v. National Labor Relations
Commission,103 the CA likewise emphasized that in labor cases, both the party and his counsel
must be duly served their separate copies of the order, decision or resolution unlike in ordinary
proceedings where notice to counsel is deemed notice to the party. It then quoted Article 224 of
the Labor Code as follows:
ARTICLE 224. Execution of decisions, orders or awards. (a) the Secretary of Labor and
Employment or any Regional Director, the Commission or any Labor Arbiter, or med-arbiter or
voluntary arbitrator may, motu proprio or on motion of any interested party, issue a writ of
execution on a judgment within five (5) years from the date it becomes final and executory,
requiring a sheriff or a duly deputized officer to execute or enforce final decisions, orders or
awards of the Secretary of Labor and Employment or [R]egional Director, the Commission, the
Labor Arbiter or Med-Arbiter, or Voluntary Arbitrators. In any case, it shall be the duty of the
responsible officer toseparately furnish immediately the counsels of record and the parties with
copies of said decision, orders or awards. Failure to comply with the duty prescribed herein shall
subject such responsible officer to appropriate administrative sanctions x x x (Emphasis in the
original).104
The CA then concluded that since Fairland and its counsel were not separately furnished with a
copy of the August 26, 2005 NLRC Resolution denying the motions for reconsideration of its
November 30, 2004 Decision, said Decision cannot be enforced against Fairland. The CA likewise
concluded that because of this, said November 30, 2004 Decision which held Susan/Weesan and
Fairland solidarily liable to the workers, has not attained finality.
We cannot agree. In Ginete v. Sunrise Manning Agency105 we held that:
The case of PNOC Dockyard and Engineering Corporation vs. NLRC cited by petitioner enunciated
that in labor cases, both the party and its counsel must be duly served their separate copies of
the order, decision or resolution; unlike in ordinary judicial proceedings where notice to counsel is
deemed notice to the party. Reference was made therein to Article 224 of the Labor Code. But,
as correctly pointed out by private respondent in its Comment to the petition, Article 224 of the
Labor Code does not govern the procedure for filing a petition for certiorari with the Court of
Appeals from the decision of the NLRC but rather, it refers to the execution of final decisions,
orders or awards and requires the sheriff or a duly deputized officer to furnish both the parties
and their counsel with copies of the decision or award for that purpose. There is no reference,
express or implied, to the period to appeal or to file a petition for certiorari as indeed the caption
is execution of decisions, orders or awards. Taken in proper context, Article 224 contemplates
the furnishing of copies of final decisions, orders or awards and could not have been intended to
refer to the period for computing the period for appeal to the Court of Appeals from a non-final
judgment or order. The period or manner of appeal from the NLRC to the Court of Appeals is
governed by Rule 65 pursuant to the ruling of the Court in the case of St. Martin Funeral Homes
vs. NLRC. Section 4 of Rule 65, as amended, states that the petition may be filed not later than
sixty (60) days from notice of the judgment, or resolution sought to be assailed.
Corollarily, Section 4, Rule III of the New Rules of Procedure of the NLRC expressly mandates that
(F)or the purposes of computing the period of appeal, the same shall be counted from receipt of
such decisions, awards or orders by the counsel of record. Although this rule explicitly
contemplates an appeal before the Labor Arbiter and the NLRC, we do not see any cogent reason

why the same rule should not apply to petitions for certiorari filed with the Court of Appeals from
decisions of the NLRC. This procedure is in line with the established rule that notice to counsel is
notice to party and when a party is represented by counsel, notices should be made upon the
counsel of record at his given address to which notices of all kinds emanating from the court
should be sent. It is to be noted also that Section 7 of the NLRC Rules of Procedure provides that
(A)ttorneys and other representatives of parties shall have authority to bind their clients in all
matters of procedure a provision which is similar to Section 23, Rule 138 of the Rules of Court.
More importantly, Section 2, Rule 13 of the 1997 Rules of Civil Procedure analogously provides
that if any party has appeared by counsel, service upon him shall be made upon his
counsel. (Citations omitted; emphasis supplied)
To stress, Article 224 contemplates the furnishing of copies of final decisions, orders or
awards both to the parties and their counsel in connection with the execution of such final
decisions, orders or awards. However, for the purpose of computing the period for filing an
appeal from the NLRC to the CA, same shall be counted from receipt of the decision, order or
award by the counsel of record pursuant to the established rule that notice to counsel is notice to
party. And since the period for filing of an appeal is reckoned from the counsels receipt of the
decision, order or award, it necessarily follows that the reckoning period for their finality is
likewise the counsels date of receipt thereof, if a party is represented by counsel. Hence, the
date of receipt referred to in Sec. 14, Rule VII of the then in force New Rules of Procedure of the
NLRC106 which provides that decisions, resolutions or orders of the NLRC shall become
executory after 10 calendar days from receipt of the same, refers to the date of receipt by
counsel. Thus contrary to the CAs conclusion, the said NLRC Decision became final, as to
Fairland, 10 calendar days after Atty. Tecsons receipt 107 thereof.108 In sum, we hold that the Labor
Arbiter had validly acquired jurisdiction over Fairland and its manager, Debbie, through the
appearance of Atty. Geronimo as their counsel and likewise, through the latters filing of
pleadings on their behalf.
Fairland is Weesans principal.
In addition to our discussion in G.R. No. 189658 with respect to the finding that Susan/Weesan is
a mere labor-only contractor which we find to be likewise significant here, a careful examination
of the records reveals other telling facts that Fairland is Susan/Weesans principal, to wit: (1)
aside from sewing machines, Fairland also lent Weesan other equipment such as fire
extinguishers, office tables and chairs, and plastic chairs; 109 (2) no proof evidencing the
contractual arrangement between Weesan and Fairland was ever submitted by Fairland; (3) while
both Weesan and Fairland assert that the former had other clients aside from the latter, no proof
of Weesans contractual relationship with its other alleged client is extant on the records; and (4)
there is no showing that any of the workers were assigned to other clients aside from Fairland.
Moreover, as found by the NLRC and affirmed by both the Special Former Special Eighth Division
in CA-G.R. SP No. 93860 and the First Division in CA-G.R. SP No. 93204, the activities, the manner
of work and the movement of the workers were subject to Fairlands control. It bears
emphasizing that "factual findings of quasi-judicial agencies like the NLRC, when affirmed by the
Court of Appeals, as in the present case, are conclusive upon the parties and binding on this
Court."110
Viewed in its entirety, we thus declare that Fairland is the principal of the labor-only contractor,
Weesan.
Fairland, therefore, as the principal employer, is solidarily liable with Susan/Weesan, the laboronly contractor, for the rightful claims of the employees. Under this set-up, Susan/Weesan, as the
"labor-only" contractor, is deemed an agent of the principal, Fairland, and the law makes the
principal responsible to the employees of the "labor-only" contractor as if the principal itself
directly hired or employed the employees.111

WHEREFORE, the Court,


1) in G.R. No. 189658, denies the Petition for Review on Certiorari. The assailed Decision
dated July 20, 2009 and Resolution dated October 1, 2009 of the Special Former Special
Eighth Division of the Court of Appeals in CA-G.R. No. 93860 are AFFIRMED.
2) in G.R. No. 182915, grants the Petition for Review on Certiorari. The assailed Resolution
dated May 9, 2008 of the Special Ninth Division of the Court of Appeals in CA-G.R. No.
93204 is hereby REVERSED and SET ASIDE and the Decision dated July 25, 2007 of the
First Division of the Court of Appeals is REINSTATED and AFFIRMED.
SO ORDERED.
G.R. No. 126322

January 16, 2002

YUPANGCO COTTON MILLS, INC., petitioner,


vs.
COURT OF APPEALS, HON. URBANO C. VICTORIO, SR., Presiding Judge, RTC Branch 50,
Manila, RODRIGO SY MENDOZA, SAMAHANG MANGGAGAWA NG ARTEX (SAMARANGLO) represented by its Local President RUSTICO CORTEZ, and WESTERN
GUARANTY CORPORATION, respondents.
PARDO, J.:
The Case
The case is a petition for review on certiorari of the decision of the Court of Appeals 1 dismissing
the petition ruling that petitioner was guilty of forum shopping and that the proper remedy was
appeal in due course, not certiorari or mandamus.
In its decision, the Court of Appeals sustained the trial court's ruling that the remedies granted
under Section 17, Rule 39 of the Rules of Court are not available to the petitioner because the
Manual of Instructions for Sheriffs of the NLRC does not include the remedy of an independent
action by the owner to establish his right to his property.
The Facts
The facts, as found by the Court of Appeals, are as follows:
"From the records before us and by petitioner's own allegations and admission, it has
taken the following actions in connection with its claim that a sheriff of the National Labor
Relations Commission "erroneously and unlawfully levied" upon certain properties which it
claims as its own.
"1. It filed a notice of third-party claim with the Labor Arbiter on May 4, 1995.
"2. It filed an Affidavit of Adverse Claim with the National Labor Relations Commission
(NLRC) on July 4, 1995, which was dismissed on August 30, 1995, by the labor Arbiter.
"3. It filed a petition for certiorari and prohibition with the Regional Trial Court of Manila,
Branch 49, docketed as Civil Case No. 95-75628 on October 6, 1995. The Regional Trial
Court dismissed the case on October 11, 1995 for lack of merit.
"4. It appealed to the NLRC the order of the Labor Arbiter dated August 13, 1995 which

dismissed the appeal for lack of merit on December 8, 1995.


"5. It filed an original petition for mandatory injunction with the NLRC on November 16,
1995. This was docketed as Case No. NLRC-NCR-IC. 0000602-95. This case is still pending
with that Commission.
"6. It filed a complaint in the Regional Trial Court in Manila which was docketed as Civil
Case No. 95-76395. The dismissal of this case by public respondent triggered the filing of
the instant petition.
"In all of the foregoing actions, petitioner raised a common issue, which is that it is the
owner of the properties located in the compound and buildings of Artex Development
Corporation, which were erroneously levied upon by the sheriff of the NLRC as a
consequence of the decision rendered by the said Commission in a labor case docketed as
NLRC-NCR Case No. 00-05-02960-90."2
On March 29, 1996, the Court of Appeals promulgated a decision 3 dismissing the petition on the
ground of forum shopping and that petitioner's remedy was to seek relief from this Court.
On April 18, 1996, petitioner filed with the Court of Appeals a motion for reconsideration of the
decision.4Petitioner argued that the filing of a complaint for accion reinvindicatoria with the
Regional Trial Court was proper because it is a remedy specifically granted to an owner (whose
properties were subjected to a writ of execution to enforce a decision rendered in a labor dispute
in which it was not a party) by Section 17 (now 16), Rule 39, Revised Rules of Court and by the
doctrines laid down in Sy v. Discaya, 5 Santos v. Bayhon6 and Manliguez v. Court of Appeals.7
In addition, petitioner argued that the reliefs sought and the issues involved in the complaint for
recovery of property and damages filed with the Regional Trial Court of Manila, presided over by
respondent judge, were entirely distinct and separate from the reliefs sought and the issues
involved in the proceedings before the Labor Arbiter and the NLRC. Besides, petitioner pointed
out that neither the NLRC nor the Labor Arbiter is empowered to adjudicate matters involving
ownership of properties.
On August 27, 1996, the Court of Appeals denied petitioner's motion for reconsideration. 8
Hence, this appeal.9
The Issues
The issues raised are (1) whether the Court of Appeals erred in ruling that petitioner was guilty of
forum shopping, and (2) whether the Court of Appeals erred in dismissing the petitioner's accion
reinvindicatoria on the ground of lack of jurisdiction of the trial court.
The Court's Ruling
On the first issue raised, we rule that there was no forum shopping:
In Golangco v. Court of Appeals,10 we held:
"What is truly important to consider in determining whether forum shopping exists or not
is the vexation caused the courts and parties-litigant by a party who asks different courts
and/or administrative agencies to rule on the same on related caused and/or grant the
same or substantially the same reliefs, in the process creating possibility of conflicting
decisions being rendered by the different for a upon the same issues.

"xxx

xxx

xxx

"There is no forum-shopping where two different orders were questioned, two distinct
causes of action and issues were raised, and two objectives were sought." (Underscoring
ours)
In the case at bar, there was no identity of parties, rights and causes of action and reliefs sought.
The case before the NLRC where Labor Arbiter Reyes issued a labor dispute between Artex and
Samar-Anglo. Petitioner was not a party to the case. The only issue petitioner raised before the
NLRC was whether or not the writ of execution issued by the labor arbiter could be satisfied
against the property of petitioner, not a party to the labor case.
On the other hand, the accion reinvindicatoria filed by petitioner in the trial court was to recover
the property illegally levied upon and sold at auction. Hence, the causes of action in these cases
were different.
The rule is that "for forum-shopping to exist both actions must involve the same transactions, the
same circumstances. The actions must also raise identical causes of action, subject matter and
issues.11
In Chemphil Export & Import Corporation v. Court of Appeals, 12 we ruled that:
"Forum-shopping or the act of a party against whom an adverse judgment has been
rendered in one forum, of seeking another (and possible) opinion in another forum (other
than by appeal or the special civil action of certiorari), or the institution of two (2) or more
actions or proceedings grounded on the same cause on the supposition that one or the
other would make a favorable disposition."
On the second issue, a third party whose property has been levied upon by a sheriff to enforce a
decision against a judgment debtor is afforded with several alternative remedies to protect its
interests. The third party may avail himself of alternative remedies cumulatively, and one will not
preclude the third party from availing himself of the other alternative remedies in the event he
failed in the remedy first availed of.
Thus, a third party may avail himself of the following alternative remedies:
a) File a third party claim with the sheriff of the Labor Arbiter, and
b) If the third party claim is denied, the third party may appeal the denial to the NLRC. 13
Even if a third party claim was denied, a third party may still file a proper action with a
competent court to recover ownership of the property illegally seized by the sheriff. This finds
support in Section 17 (now 16), Rule 39, Revised Rules of Court, to wit:
"SEC. 17 (now 16). Proceedings where property claimed by third person. - If property
claimed by any other person than the judgment debtor or his agent, and such person
makes an affidavit of his title thereto or right to the possession thereof, stating the
grounds of such right or title, and serve the same upon the officer making the levy, and a
copy thereof upon the judgment creditor, the officer shall not be bound to keep the
property, unless such judgment creditor or his agent, on demand of the officer, indemnify
the officer against such claim by a bond in a sum not greater than the value of the
property levied on. In case of disagreement as to such value, the same shall be
determined by the court issuing the writ of execution. 1wphi1.nt

"The officer is not liable for damages, for the taking or keeping of the property, to any
third-party claimant unless a claim is made by the latter and unless an action for damages
is brought by him against the officer within one hundred twenty (120) days from the date
of the filing of the bond. But nothing herein contained shall prevent such claimant or any
third person from vindicating his claim to the property by any proper action.
"When the party in whose favor the writ of execution runs, is the Republic of the
Philippines, or any officer duly representing it, the filing of such bond shall not be required,
and in case the sheriff or levying officer is sued for damages as a result of the levy, he
shall be represented by the Solicitor General and if held liable therefor, the actual
damages adjudged by the court shall be paid by the National Treasurer out of such funds
as may be appropriated for the purpose." (Underscoring ours)
In Sy v. Discaya,14 we ruled that:
"The right of a third-party claimant to file an independent action to vindicate his claim of
ownership over the properties seized is reserved by Section 17 (now 16), Rule 39 of the
Rules of Court, x x x :
"xxx

xxx

xxx

"As held in the case of Ong v. Tating, et. al., construing the aforecited rule, a third person
whose property was seized by a sheriff to answer for the obligation of a judgment debtor
may invoke the supervisory power of the court which authorized such execution. Upon due
application by the third person and after summary hearing, the court may command that
the property be released from the mistaken levy and restored to the rightful owner or
possession. What said court do in these instances, however, is limited to a determination
of whether the sheriff has acted rightful or wrongly in the performance of his duties in the
execution of judgment, more specifically, if he has indeed take hold of property not
belonging to the judgment debtor. The court does not and cannot pass upon the
question of title to the property, with any character of finality. It can treat of the matter
only insofar as may be necessary to decide if the sheriff has acted correctly or not. It can
require the sheriff to restore the property to the claimant's possession if warranted by the
evidence. However, if the claimant's proof do not persuade the court of the validity of his
title or right of possession thereto, the claim will be denied.
"Independent of the above-stated recourse, a third-party claimant may also avail of the
remedy known as "terceria', provided in Section 17 (now 16), Rule 39, by serving on the
officer making the levy an affidavit of his title and a copy thereof upon the judgment
creditor. The officer shall not be bound to keep the property, unless such judgment
creditor or his agent, on demand of the officer, indemnifies the officer against such claim
by a bond in a sum not greater than the value of the property levied on. An action for
damages may be brought against the sheriff within one hundred twenty (120) days from
the filing of the bond.
"The aforesaid remedies are nevertheless without prejudice to 'any proper action' that a
third-party claimant may deem suitable to vindicate 'his claim to the property.' Such a
'proper action' is, obviously, entirely distinct from that explicitly prescribed in Section 17 of
Rule 39, which is an action for damages brought by a third-party claimant against the
officer within one hundred twenty (120) days from the date of the filing of the bond for the
taking or keeping of the property subject of the 'terceria'.
"Quite obviously, too, this 'proper action' would have for its object the recovery of
ownership or possession of the property seized by the sheriff, as well as damages resulting
from the allegedly wrongful seizure and detention thereof despite the third-party claim;

and it may be brought against the sheriff and such other parties as may be alleged to
have colluded with him in the supposedly wrongful execution proceedings, such as the
judgment creditor himself. Such 'proper action', as above pointed out, is and should be an
entirely separate and distinct action from that in which execution has issued, if instituted
by a stranger to the latter suit.
"The remedies above mentioned are cumulative and may be resorted to by a
third-party claimant independent of or separately from and without need of
availing of the others. If a third-party claimant opted to file a proper action to vindicate
his claim of ownership, he must institute an action, distinct and separate from that in
which the judgment is being enforced, with the court of competent jurisdiction even before
or without need of filing a claim in the court which issued the writ, the latter not being a
condition sine qua non for the former. In such proper action, the validity and sufficiency of
the title of the third-party claimant will be resolved and a writ of preliminary injunction
against the sheriff may be issued." (Emphasis and underscoring ours)
In light of the above, the filing of a third party claim with the Labor Arbiter and the NLRC did not
preclude the petitioner from filing a subsequent action for recovery of property and damages
with the Regional Trial Court. And, the institution of such complaint will not make petitioner guilty
of forum shopping.15
In Santos v. Bayhon,16 wherein Labor Arbiter Ceferina Diosana rendered a decision in NLRC NCR
Case No. 1-313-85 in favor of Kamapi, the NLRC affirmed the decision. Thereafter, Kamapi
obtained a writ of execution against the properties of Poly-Plastic Products or Anthony Ching.
However, respondent Priscilla Carrera filed a third-party claim alleging that Anthony Ching had
sold the property to her. Nevertheless, upon posting by the judgment creditor of an indemnity
bond, the NLRC Sheriff proceeded with the public auction sale. Consequently, respondent Carrera
filed with Regional Trial Court, Manila an action to recover the levied property and obtained a
temporary restraining order against Labor Arbiter Diosana and the NLRC Sheriff from issuing a
certificate of sale over the levied property. Eventually, Labor Arbiter Santos issued an order
allowing the execution to proceed against the property of Poly-Plastic Products. Also, Labor
Arbiter Santos and the NLRC Sheriff filed a motion to dismiss the civil case instituted by
respondent Carrera on the ground that the Regional Trial Court did not have jurisdiction over the
labor case. The trial court issued an order enjoining the enforcement of the writ of execution over
the properties claimed by respondent Carrera pending the determination of the validity of the
sale made in her favor by the judgment debtor Poly-Plastic Products and Anthony Ching.
In dismissing the petition for certiorari filed by Labor Arbiter Santos, we ruled that:
"x x x. The power of the NLRC to execute its judgments extends only to properties
unquestionably belonging to the judgment debtor (Special Servicing Corp. v. Centro La
Paz, 121 SCRA 748).
"The general rule that no court has the power to interfere by injunction with the judgments
or decrees of another court with concurrent or coordinate jurisdiction possessing equal
power to grant injunctive relief, applies only when no third-party claimant is involved
(Traders Royal Bank v. Intermediate Appellate Court, 133 SCRA 141 [1984]). When a thirdparty, or a stranger to the action, asserts a claim over the property levied upon, the
claimant may vindicate his claim by an independent action in the proper civil court which
may stop the execution of the judgment on property not belonging to the judgment
debtor." (Underscoring ours)
in Consolidated Bank and Trust Corp. v. Court of Appeals, 193 SCRA 158 [1991], we ruled that:
"The well-settled doctrine is that a 'proper levy' is indispensable to a valid sale on

execution. A sale unless preceded by a valid levy is void. Therefore, since there was no
sufficient levy on the execution in question, the private respondent did not take any title to
the properties sold thereunder x x x.
"A person other than the judgment debtor who claims ownership or right over the levied
properties is not precluded, however, from taking other legal remedies." (Underscoring
ours)
Jurisprudence is likewise replete with rulings that since the third-party claimant is not one of the
parties to the action, he could not, strictly speaking, appeal from the order denying his claim, but
should file a separate reinvindicatory action against the execution creditor or the purchaser of
the property after the sale at public auction, or a complaint for damages against the bond filed
by the judgment creditor in favor of the sheriff. 17
And in Lorenzana v. Cayetano, 18 we ruled that:
"The rights of a third-party claimant should not be decided in the action where the thirdparty claim has been presented, but in a separate action to be instituted by the third
person. The appeal that should be interposed if the term 'appeal' may properly be
employed, is a separate reinvidincatory action against the execution creditor or the
purchaser of the property after the sale at public auction, or complaint for damages to be
charged against the bond filed by the judgment creditor in favor of the sheriff. Such
reinvindicatory action is reserved to the third-party claimant."
A separate civil action for recovery of ownership of the property would not constitute
interference with the powers or processes of the Arbiter and the NLRC which rendered the
judgment to enforce and execute upon the levied properties. The property levied upon being that
of a stranger is not subject to levy. Thus, a separate action for recovery, upon a claim and primafacie showing of ownership by the petitioner, cannot be considered as interference.
The Fallo
WHEREFORE, the Court REVERSES the decision of the Court of Appeals and the resolution
denying reconsideration.19 In lieu thereof, the Court renders judgment ANNULLING the sale on
execution of the subject property conducted by NLRC Sheriff Anam Timbayan in favor of
respondent SAMAR-ANGLO and the subsequent sale of the same to Rodrigo Sy Mendoza. The
Court declares the petitioner to be the rightful owner of the property involved and remands the
case to the trial court to determine the liability of respondents SAMAR-ANGLO, Rodrigo Sy
Mendoza, and WESTERN GUARANTY CORPORATION to pay actual damages that petitioner
claimed.
Costs against respondents, except the Court of Appeals.1wphi1.nt
SO ORDERED.

G.R. No. 162943

December 6, 2010

EMPLOYEES UNION OF BAYER PHILS., FFW and JUANITO S. FACUNDO, in his capacity as
President,Petitioners,
vs.
BAYER PHILIPPINES, INC., DIETER J. LONISHEN (President), ASUNCION AMISTOSO (HRD
Manager), AVELINA REMIGIO AND ANASTACIA VILLAREAL, Respondents.
DECISION
VILLARAMA, JR., J.:
This petition for review on certiorari assails the Decision 1 dated December 15, 2003 and
Resolution2 dated March 23, 2004 of the Court of Appeals (CA) in CA-G.R. SP No. 73813.
Petitioner Employees Union of Bayer Philippines 3 (EUBP) is the exclusive bargaining agent of all
rank-and-file employees of Bayer Philippines (Bayer), and is an affiliate of the Federation of Free
Workers (FFW). In 1997, EUBP, headed by its president Juanito S. Facundo (Facundo), negotiated
with Bayer for the signing of a collective bargaining agreement (CBA). During the negotiations,
EUBP rejected Bayers 9.9% wage-increase proposal resulting in a bargaining deadlock.
Subsequently, EUBP staged a strike, prompting the Secretary of the Department of Labor and
Employment (DOLE) to assume jurisdiction over the dispute.
In November 1997, pending the resolution of the dispute, respondent Avelina Remigio (Remigio)
and 27 other union members, without any authority from their union leaders, accepted Bayers
wage-increase proposal. EUBPs grievance committee questioned Remigios action and
reprimanded Remigio and her allies. On January 7, 1998, the DOLE Secretary issued an arbitral
award ordering EUBP and Bayer to execute a CBA retroactive to January 1, 1997 and to be made
effective until December 31, 2001. The said CBA 4 was registered on July 8, 1998 with the
Industrial Relations Division of the DOLE-National Capital Region (NCR). 5
Meanwhile, the rift between Facundos leadership and Remigios group broadened. On August 3,
1998, barely six months from the signing of the new CBA, during a company-sponsored
seminar,6 Remigio solicited signatures from union members in support of a resolution containing
the decision of the signatories to: (1) disaffiliate from FFW, (2) rename the union as Reformed
Employees Union of Bayer Philippines (REUBP), (3) adopt a new constitution and by-laws for the
union, (4) abolish all existing officer positions in the union and elect a new set of interim officers,
and (5) authorize REUBP to administer the CBA between EUBP and Bayer. 7 The said resolution
was signed by 147 of the 257 local union members. A subsequent resolution was also issued
affirming the first resolution.8
A tug-of-war then ensued between the two rival groups, with both seeking recognition from Bayer
and demanding remittance of the union dues collected from its rank-and-file members. On
September 8, 1998, Remigios splinter group wrote Facundo, FFW and Bayer informing them of
the decision of the majority of the union members to disaffiliate from FFW. 9 This was followed by
another letter informing Facundo, FFW and Bayer that an interim set of REUBP executive officers
and board of directors had been appointed, and demanding the remittance of all union dues to
REUBP. Remigio also asked Bayer to desist from further transacting with EUBP. Facundo,
meanwhile, sent similar requests to Bayer 10 requesting for the remittance of union dues in favor
of EUBP and accusing the company of interfering with purely union matters. 11 Bayer responded
by deciding not to deal with either of the two groups, and by placing the union dues collected in
a trust account until the conflict between the two groups is resolved. 12
On September 15, 1998, EUBP filed a complaint for unfair labor practice (first ULP complaint)
against Bayer for non-remittance of union dues. The case was docketed as NLRC-NCR-Case No.
00-09-07564-98.13

EUBP later sent a letter dated November 5, 1998 to Bayer asking for a grievance
conference.14 The meeting was conducted by the management on November 11, 1998, with all
REUBP officers including their lawyers present. Facundo did not attend the meeting, but sent two
EUBP officers to inform REUBP and the management that a preventive mediation conference
between the two groups has been scheduled on November 12, 1998 before the National
Conciliation and Mediation Board (NCMB). 15
Apparently, the two groups failed to settle their issues as Facundo again sent respondent Dieter J.
Lonishen two more letters, dated January 14, 1999 16 and September 2, 1999,17 asking for a
grievance meeting with the management to discuss the failure of the latter to comply with the
terms of their CBA. Both requests remained unheeded.
On February 9, 1999, while the first ULP case was still pending and despite EUBPs repeated
request for a grievance conference, Bayer decided to turn over the collected union dues
amounting to P254,857.15 to respondent Anastacia Villareal, Treasurer of REUBP.
Aggrieved by the said development, EUBP lodged a complaint 18 on March 4, 1999 against
Remigios group before the Industrial Relations Division of the DOLE praying for their expulsion
from EUBP for commission of "acts that threaten the life of the union."
On June 18, 1999, Labor Arbiter Jovencio Ll. Mayor, Jr. dismissed the first ULP complaint for lack
of jurisdiction.19The Arbiter explained that the root cause for Bayers failure to remit the collected
union dues can be traced to the intra-union conflict between EUBP and Remigios group 20 and
that the charges imputed against Bayer should have been submitted instead to voluntary
arbitration.21 EUBP did not appeal the said decision. 22
On December 14, 1999, petitioners filed a second ULP complaint against herein respondents
docketed as NLRC-RAB-IV Case No. 12-11813-99-L. Three days later, petitioners amended the
complaint charging the respondents with unfair labor practice committed by organizing a
company union, gross violation of the CBA and violation of their duty to bargain. 23 Petitioners
complained that Bayer refused to remit the collected union dues to EUBP despite several
demands sent to the management.24 They also alleged that notwithstanding the requests sent to
Bayer for a renegotiation of the last two years of the 1997-2001 CBA between EUBP and Bayer,
the latter opted to negotiate instead with Remigios group. 25
On even date, REUBP and Bayer agreed to sign a new CBA. Remigio immediately informed her
allies of the managements decision.26
In response, petitioners immediately filed an urgent motion for the issuance of a restraining
order/injunction27before the National Labor Relations Commission (NLRC) and the Labor Arbiter
against respondents. Petitioners asserted their authority as the exclusive bargaining
representative of all rank-and-file employees of Bayer and asked that a temporary restraining
order be issued against Remigios group and Bayer to prevent the employees from ratifying the
new CBA. Later, petitioners filed a second amended complaint 28 to include in its complaint the
issue of gross violation of the CBA for violation of the contract bar rule following Bayers decision
to negotiate and sign a new CBA with Remigios group.
Meanwhile, on January 26, 2000, the Regional Director of the Industrial Relations Division of
DOLE issued a decision dismissing the issue on expulsion filed by EUBP against Remigio and her
allies for failure to exhaust reliefs within the union and ordering the conduct of a referendum to
determine which of the two groups should be recognized as union officers. 29 EUBP seasonably
appealed the said decision to the Bureau of Labor Relations (BLR). 30 On June 16, 2000, the BLR
reversed the Regional Directors ruling and ordered the management of Bayer to respect the
authority of the duly-elected officers of EUBP in the administration of the prevailing CBA. 31

Unfortunately, the said BLR ruling came late since Bayer had already signed a new CBA 32 with
REUBP on February 21, 2000. The said CBA was eventually ratified by majority of the bargaining
unit.33
On June 2, 2000, Labor Arbiter Waldo Emerson R. Gan dismissed EUBPs second ULP complaint
for lack of jurisdiction.34 The Labor Arbiter explained the dismissal as follows:
All told, were it not for the fact that there were two (2) [groups] of employees, the Union led by
its President Juanito Facundo and the members who decided to disaffiliate led by Ms. Avelina
Remigio, claiming to be the rightful representative of the rank and file employees, the Company
would not have acted the way it did and the Union would not have filed the instant case.
Clearly then, as the case involves intra-union disputes, this Office is bereft of any jurisdiction
pursuant to Article 226 of the Labor Code, as amended, which provides pertinently in part, thus:
"Bureau of Labor Relations The Bureau of Labor Relations and the Labor Relations Divisions in
the regional offices of the Department of Labor and Employment shall have original and
exclusive authority to act, at their own initiative or upon request of either or both parties, on all
inter-union and intra-union conflicts, and all disputes, grievances or problems arising from or
affecting labor-management relations in all workplaces whether agricultural or non-agricultural,
except those arising from the implementation or interpretation of collective bargaining
agreements which shall be the subject of grievance procedure and/or voluntary arbitration."
Specifically, with respect to the union dues, the authority is the case of Cebu Seamens
Association[,] Inc. vs. Ferrer-Calleja, (212 SCRA 51), where the Supreme Court held that when the
issue calls for the determination of which between the two groups within a union is entitled to
the union dues, the same cannot be taken cognizance of by the NLRC.
xxxx
WHEREFORE, premises considered, the instant complaint is hereby DISMISSED on the ground of
lack of jurisdiction.
SO ORDERED.35
On June 28, 2000, the NLRC resolved to dismiss36 petitioners motion for a restraining order
and/or injunction stating that the subject matter involved an intra-union dispute, over which the
said Commission has no jurisdiction.37
Aggrieved by the Labor Arbiters decision to dismiss the second ULP complaint, petitioners
appealed the said decision, but the NLRC denied the appeal. 38 EUBPs motion for reconsideration
was likewise denied.39
Thus, petitioners filed a Rule 65 petition to the CA. On December 15, 2003, the CA sustained
both the Labor Arbiter and the NLRCs rulings. The appellate court explained,
A cursory reading of the three pleadings, to wit: the Complaint (Vol. I, Rollo, p[p]. 166-167);
the Amended Complaint (Vol. I, Rollo[,] pp. 168-172) and the Second Amended Complaint dated
March 8, 2000 (Vol. II, Rollo, pp. 219-225) will readily show that the instant case was brought
about by the action of the Group of REM[I]GIO to disaffiliate from FFW and to organized (sic)
REUBP under the tutelage of REM[I]GIO and VILLAREAL. At first glance of the case at bar, it
involves purely an (sic) inter-union and intra-union conflicts or disputes between EUBP-FFW and
REUBP which issue should have been resolved by the Bureau of Labor Relations under Article 226
of the Labor Code. However, since no less than petitioners who admitted that respondents
committed gross violations of the CBA, then the BLR is divested of jurisdiction over the case and

the issue should have been referred to the Grievance Machinery and Voluntary Arbitrator and not
to the Labor Arbiter as what petitioners did in the case at bar. x x x
xxxx
Furthermore, the CBA entered between BAYER and EUBP-FFW [has] a life span of only five years
and after the said period, the employees have all the right to change their bargaining unit who
will represent them. If there exist[s] two opposing unions in the same company, the remedy is
not to declare that such act is considered unfair labor practice but rather they should conduct a
certification election provided [that] it should be conducted within 60 days of the so[-]called
freedom period before the expiration of the CBA.
WHEREFORE, premises considered, this Petition is DENIED and the assailed Decision dated
September 27, 2001 as well as the Order dated June 21, 2002, denying the motion for
reconsideration, by the National Labor Relations Commission, First Division, in NLRC Case No.
RAB-IV-12-11813-99-L, are hereby AFFIRMED in toto. Costs against petitioners.
SO ORDERED.40
Undaunted, petitioners filed this Rule 45 petition before this Court. Initially, the said petition was
denied for having been filed out of time and for failure to comply with the requirements provided
in the 1997 Rules of Civil Procedure, as amended.41 Upon petitioners motion, however, we
decided to reinstate their appeal.
The following are the issues raised by petitioners, to wit:
I. WHETHER OR NOT THE HONORABLE COURT OF APPEALS, IN ARRIVING AT THE DECISION
PROMULGATED ON 15 DECEMBER 2003 AND RESOLUTION PROMULGATED ON 23 MARCH
2004, DECIDED THE CASE IN ACCORDANCE WITH LAW AND JURISPRUDENCE; AND
II. WHETHER OR NOT THE HONORABLE COURT OF APPEALS, IN ARRIVING AT THE DECISION
PROMULGATED ON 15 DECEMBER 2003 AND RESOLUTION PROMULGATED ON 23 MARCH
2004, GRAVELY ABUSE[D] ITS DISCRETION IN ITS FINDINGS AND CONCLUSION THAT:
THE ACTS OF ABETTING OR ASSISTING IN THE CREATION OF ANOTHER UNION,
NEGOTIATING OR BARGAINING WITH SUCH UNION, WHICH IS NOT THE SOLE AND
EXCLUSIVE BARGAINING AGENT, VIOLATING THE DUTY TO BARGAIN COLLECTIVELY,
REFUSAL TO PROCESS GRIEVABLE ISSUES IN THE GRIEVANCE MACHINERY AND/OR
REFUSAL TO DEAL WITH THE SOLE AND EXCLUSIVE BARGAINING AGENT ARE ACTS
CONSTITUTING OR TANTAMOUNT TO UNFAIR LABOR PRACTICE.42
Respondents Bayer, Lonishen and Amistoso, meanwhile, identify the issues as follows:
I. WHETHER OR NOT THE UNIFORM FINDINGS OF THE COURT OF APPEALS, THE NLRC AND
THE LABOR ARBITER ARE BINDING ON THIS HONORABLE COURT;
II. WHETHER OR NOT THE LABOR ARBITER AND THE NLRC HAVE JURISDICTION OVER THE
INSTANT CASE;
III. WHETHER OR NOT THE INSTANT CASE INVOLVES AN INTRA-UNION DISPUTE;
IV. WHETHER OR NOT RESPONDENTS COMPANY, LONISHEN AND AMISTOSO COMMITTED
AN ACT OF UNFAIR LABOR PRACTICE; AND

V. WHETHER OR NOT THE INSTANT CASE HAS BECOME MOOT AND ACADEMIC. 43
Essentially, the issue in this petition is whether the act of the management of Bayer in dealing
and negotiating with Remigios splinter group despite its validly existing CBA with EUBP can be
considered unfair labor practice and, if so, whether EUBP is entitled to any relief.
Petitioners argue that the subject matter of their complaint, as well as the subsequent
amendments thereto, pertain to the unfair labor practice act of respondents Bayer, Lonishen and
Amistoso in dealing with Remigios splinter union. They contend that (1) the acts of abetting or
assisting in the creation of another union is among those considered by the Labor Code, as
amended, specifically under Article 248 (d) 44 thereof, as unfair labor practice; (2) the act of
negotiating with such union constitutes a violation of Bayers duty to bargain collectively; and (3)
Bayers unjustified refusal to process EUBPs grievances and to recognize the said union as the
sole and exclusive bargaining agent are tantamount to unfair labor practice. 45
Respondents Bayer, Lonishen and Amistoso, on the other hand, contend that there can be no
unfair labor practice on their part since the requisites for unfair labor practice i.e., that the
violation of the CBA should be gross, and that it should involve violation in the economic
provisions of the CBA were not satisfied. Moreover, they cite the ruling of the Labor Arbiter that
the issues raised in the complaint should have been ventilated and threshed out before the
voluntary arbitrators as provided in Article 261 of the Labor Code, as amended.46Respondents
Remigio and Villareal, meanwhile, point out that the case should be dismissed as against them
since they are not real parties in interest in the ULP complaint against Bayer, 47 and since there
are no specific or material acts imputed against them in the complaint. 48
The petition is partly meritorious.
An intra-union dispute refers to any conflict between and among union members, including
grievances arising from any violation of the rights and conditions of membership, violation of or
disagreement over any provision of the unions constitution and by-laws, or disputes arising from
chartering or disaffiliation of the union.49 Sections 1 and 2, Rule XI of Department Order No. 4003, Series of 2003 of the DOLE enumerate the following circumstances as inter/intra-union
disputes, viz:
RULE XI
INTER/INTRA-UNION DISPUTES AND
OTHER RELATED LABOR RELATIONS DISPUTES
Section 1. Coverage. - Inter/intra-union disputes shall include:
(a) cancellation of registration of a labor organization filed by its members or by another
labor organization;
(b) conduct of election of union and workers association officers/nullification of election of
union and workers association officers;
(c) audit/accounts examination of union or workers association funds;
(d) deregistration of collective bargaining agreements;
(e) validity/invalidity of union affiliation or disaffiliation;
(f) validity/invalidity of acceptance/non-acceptance for union membership;

(g) validity/invalidity of impeachment/expulsion of union and workers association officers


and members;
(h) validity/invalidity of voluntary recognition;
(i) opposition to application for union and CBA registration;
(j) violations of or disagreements over any provision in a union or workers association
constitution and by-laws;
(k) disagreements over chartering or registration of labor organizations and collective
bargaining agreements;
(l) violations of the rights and conditions of union or workers association membership;
(m) violations of the rights of legitimate labor organizations, except interpretation of
collective bargaining agreements;
(n) such other disputes or conflicts involving the rights to self-organization, union
membership and collective bargaining
(1) between and among legitimate labor organizations;
(2) between and among members of a union or workers association.
Section 2. Coverage. Other related labor relations disputes shall include any conflict between a
labor union and the employer or any individual, entity or group that is not a labor organization or
workers association. This includes: (1) cancellation of registration of unions and workers
associations; and (2) a petition for interpleader.
It is clear from the foregoing that the issues raised by petitioners do not fall under any of the
aforementioned circumstances constituting an intra-union dispute. More importantly, the
petitioners do not seek a determination of whether it is the Facundo group (EUBP) or the Remigio
group (REUBP) which is the true set of union officers. Instead, the issue raised pertained only to
the validity of the acts of management in light of the fact that it still has an existing CBA with
EUBP. Thus as to Bayer, Lonishen and Amistoso the question was whether they were liable for
unfair labor practice, which issue was within the jurisdiction of the NLRC. The dismissal of the
second ULP complaint was therefore erroneous.
However, as to respondents Remigio and Villareal, we find that petitioners complaint was validly
dismissed.
Petitioners ULP complaint cannot prosper as against respondents Remigio and Villareal because
the issue, as against them, essentially involves an intra-union dispute based on Section 1 (n) of
DOLE Department Order No. 40-03. To rule on the validity or illegality of their acts, the Labor
Arbiter and the NLRC will necessarily touch on the issues respecting the propriety of their
disaffiliation and the legality of the establishment of REUBP issues that are outside the scope of
their jurisdiction. Accordingly, the dismissal of the complaint was validly made, but only with
respect to these two respondents.
But are Bayer, Lonishen and Amistoso liable for unfair labor practice? On this score, we find that
the evidence supports an answer in the affirmative.
It must be remembered that a CBA is entered into in order to foster stability and mutual

cooperation between labor and capital. An employer should not be allowed to rescind unilaterally
its CBA with the duly certified bargaining agent it had previously contracted with, and decide to
bargain anew with a different group if there is no legitimate reason for doing so and without first
following the proper procedure. If such behavior would be tolerated, bargaining and negotiations
between the employer and the union will never be truthful and meaningful, and no CBA forged
after arduous negotiations will ever be honored or be relied upon. Article 253 of the Labor Code,
as amended, plainly provides:
ART. 253. Duty to bargain collectively when there exists a collective bargaining agreement.
Where there is a collective bargaining agreement, the duty to bargain collectively shall also
mean that neither party shall terminate or modify such agreement during its lifetime. However,
either party can serve a written notice to terminate or modify the agreement at least sixty (60)
days prior to its expiration date. It shall be the duty of both parties to keep the status quo and to
continue in full force and effect the terms and conditions of the existing agreement during the
60-day period and/or until a new agreement is reached by the parties. (Emphasis
supplied.)1avvphi1
This is the reason why it is axiomatic in labor relations that a CBA entered into by a legitimate
labor organization that has been duly certified as the exclusive bargaining representative and the
employer becomes the law between them. Additionally, in the Certificate of Registration 50 issued
by the DOLE, it is specified that the registered CBA serves as the covenant between the parties
and has the force and effect of law between them during the period of its duration. Compliance
with the terms and conditions of the CBA is mandated by express policy of the law primarily to
afford protection to labor51 and to promote industrial peace. Thus, when a valid and binding CBA
had been entered into by the workers and the employer, the latter is behooved to observe the
terms and conditions thereof bearing on union dues and representation. 52 If the employer grossly
violates its CBA with the duly recognized union, the former may be held administratively and
criminally liable for unfair labor practice. 53
Respondents Bayer, Lonishen and Amistoso, contend that their acts cannot constitute unfair
labor practice as the same did not involve gross violations in the economic provisions of the CBA,
citing the provisions of Articles 248 (1) and 261 54 of the Labor Code, as amended.55 Their
argument is, however, misplaced.
Indeed, in Silva v. National Labor Relations Commission, 56 we explained the correlations of Article
248 (1) and Article 261 of the Labor Code to mean that for a ULP case to be cognizable by the
Labor Arbiter, and for the NLRC to exercise appellate jurisdiction thereon, the allegations in the
complaint must show prima facie the concurrence of two things, namely: (1) gross violation of
the CBA; and (2) the violation pertains to the economic provisions of the CBA. 57
This pronouncement in Silva, however, should not be construed to apply to violations of the CBA
which can be considered as gross violations per se, such as utter disregard of the very existence
of the CBA itself, similar to what happened in this case. When an employer proceeds to negotiate
with a splinter union despite the existence of its valid CBA with the duly certified and exclusive
bargaining agent, the former indubitably abandons its recognition of the latter and terminates
the entire CBA.
Respondents cannot claim good faith to justify their acts. They knew that Facundos group
represented the duly-elected officers of EUBP. Moreover, they were cognizant of the fact that
even the DOLE Secretary himself had recognized the legitimacy of EUBPs mandate by rendering
an arbitral award ordering the signing of the 1997-2001 CBA between Bayer and EUBP.
Respondents were likewise well-aware of the pendency of the intra-union dispute case, yet they
still proceeded to turn over the collected union dues to REUBP and to effusively deal with
Remigio. The totality of respondents conduct, therefore, reeks with anti-EUBP animus.

Bayer, Lonishen and Amistoso argue that the case is already moot and academic following the
lapse of the 1997-2001 CBA and their renegotiation with EUBP for the 2006-2007 CBA. They also
reason that the act of the company in negotiating with EUBP for the 2006-2007 CBA is an
obvious recognition on their part that EUBP is now the certified collective bargaining agent of its
rank-and-file employees.58
We do not agree. First, a legitimate labor organization cannot be construed to have abandoned
its pending claim against the management/employer by returning to the negotiating table to
fulfill its duty to represent the interest of its members, except when the pending claim has been
expressly waived or compromised in its subsequent negotiations with the management. To hold
otherwise would be tantamount to subjecting industrial peace to the precondition that previous
claims that labor may have against capital must first be waived or abandoned before
negotiations between them may resume. Undoubtedly, this would be against public policy of
affording protection to labor and will encourage scheming employers to commit unlawful acts
without fear of being sanctioned in the future.1avvphi1
Second, that the management of Bayer decided to recognize EUBP as the certified collective
bargaining agent of its rank-and-file employees for purposes of its 2006-2007 CBA negotiations is
of no moment. It did not obliterate the fact that the management of Bayer had withdrawn its
recognition of EUBP and supported REUBP during the tumultuous implementation of the 19972001 CBA. Such act of interference which is violative of the existing CBA with EUBP led to the
filing of the subject complaint.
On the matter of damages prayed for by the petitioners, we have held that as a general rule, a
corporation cannot suffer nor be entitled to moral damages. A corporation, and by analogy a
labor organization, being an artificial person and having existence only in legal contemplation,
has no feelings, no emotions, no senses; therefore, it cannot experience physical suffering and
mental anguish. Mental suffering can be experienced only by one having a nervous system and it
flows from real ills, sorrows, and griefs of life all of which cannot be suffered by an artificial,
juridical person.59 A fortiori, the prayer for exemplary damages must also be
denied.60 Nevertheless, we find it in order to award (1) nominal damages in the amount
of P250,000.00 on the basis of our ruling in De La Salle University v. De La Salle University
Employees Association (DLSUEA-NAFTEU)61 and Article 2221,62 and (2) attorneys fees equivalent
to 10% of the monetary award. The remittance to petitioners of the collected union dues
previously turned over to Remigio and Villareal is likewise in order.
WHEREFORE, the petition for review on certiorari is PARTLY GRANTED. The Decision dated
December 15, 2003 and the Resolution dated March 23, 2004 of the Court of Appeals in CA-G.R.
SP No. 73813 are MODIFIED as follows:
1) Respondents Bayer Phils., Dieter J. Lonishen and Asuncion Amistoso are found LIABLE
for Unfair Labor Practice, and are hereby ORDERED to remit to petitioners the amount
of P254,857.15 representing the collected union dues previously turned over to Avelina
Remigio and Anastacia Villareal. They are likewise ORDERED to pay petitioners nominal
damages in the amount of P250,000.00 and attorneys fees equivalent to 10% of the
monetary award; and
2) The complaint, as against respondents Remigio and Villareal. is DISMISSED due to the
lack of jurisdiction of the Labor Arbiter and the NLRC, the complaint being in the nature of
an intra-union dispute.
No pronouncement as to costs.
SO ORDERED.

G.R. No. 168583

July 26, 2010

ATTY. ALLAN S. MONTAO, Petitioner,


vs.
ATTY. ERNESTO C. VERCELES, Respondent.
DECISION
DEL CASTILLO, J.:
The Federation/Unions Constitution and By-Laws govern the relationship between and among its
members. They are akin to ordinary contracts in that their provisions have obligatory force upon
the federation/ union and its member. What has been expressly stipulated therein shall be strictly
binding on both.
By this Petition for Review on Certiorari,1 petitioner Atty. Allan S. Montao (Atty. Montao) assails
the Decision2dated May 28, 2004 and Resolution3 dated June 28, 2005 of the Court of Appeals
(CA) in CA-G.R. SP No. 71731, which declared as null and void his election as the National VicePresident of Federation of Free Workers (FFW), thereby reversing the May 8, 2002 Decision 4 of
the Bureau of Labor Relations (BLR) in BLR-O-TR-66-7-13-01.
Factual Antecedents
Atty. Montao worked as legal assistant of FFW Legal Center on October 1, 1994. 5 Subsequently,
he joined the union of rank-and-file employees, the FFW Staff Association, and eventually
became the employees union president in July 1997. In November 1998, he was likewise
designated officer-in-charge of FFW Legal Center. 6
During the 21st National Convention and Election of National Officers of FFW, Atty. Montao was
nominated for the position of National Vice-President. In a letter dated May 25, 2001, 7 however,
the Commission on Election (FFW COMELEC), informed him that he is not qualified for the
position as his candidacy violates the 1998 FFW Constitution and By-Laws, particularly Section 76
of Article XIX8 and Section 25 (a) of Article VIII,9 both in Chapter II thereof. Atty. Montao thus
filed an Urgent Motion for Reconsideration 10 praying that his name be included in the official list
of candidates.
Election ensued on May 26-27, 2001 in the National Convention held at Subic International Hotel,
Olongapo City. Despite the pending motion for reconsideration with the FFW COMELEC, and
strong opposition and protest of respondent Atty. Ernesto C. Verceles (Atty. Verceles), a delegate
to the convention and president of University of the East Employees Association (UEEA-FFW)
which is an affiliate union of FFW, the convention delegates allowed Atty. Montaos candidacy.
He emerged victorious and was proclaimed as the National Vice-President.
On May 28, 2001, through a letter11 to the Chairman of FFW COMELEC, Atty. Verceles reiterated
his protest over Atty. Montaos candidacy which he manifested during the plenary session
before the holding of the election in the Convention. On June 18, 2001, Atty. Verceles sent a
follow-up letter12 to the President of FFW requesting for immediate action on his protest.
Proceedings before the Bureau of Labor Relations
On July 13, 2001, Atty. Verceles, as President of UEEA-FFW and officer of the Governing Board of
FFW, filed before the BLR a petition13 for the nullification of the election of Atty. Montao as FFW
National Vice-President. He alleged that, as already ruled by the FFW COMELEC, Atty. Montao is
not qualified to run for the position because Section 76 of Article XIX of the FFW Constitution and
By-Laws prohibits federation employees from sitting in its Governing Board. Claiming that Atty.

Montaos premature assumption of duties and formal induction as vice-president will cause
serious damage, Atty. Verceles likewise prayed for injunctive relief. 14
Atty. Montao filed his Comment with Motion to Dismiss 15 on the grounds that the Regional
Director of the Department of Labor and Employment (DOLE) and not the BLR has jurisdiction
over the case; that the filing of the petition was premature due to the pending and unresolved
protest before the FFW COMELEC; and that, Atty. Verceles has no legal standing to initiate the
petition not being the real party in interest.
Meanwhile, on July 16, 2001, the FFW COMELEC sent a letter to FFW National President, Bro.
Ramon J. Jabar, in reference to the election protest filed before it by Atty. Verceles. In this
correspondence, which was used by Atty. Verceles as an additional annex to his petition before
the BLR, the FFW COMELEC intimated its firm stand that Atty. Montaos candidacy contravenes
the FFWs Constitution, by stating:
At the time Atty. Verceles lodged his opposition in the floor before the holding of the election, we,
the Comelec unanimously made the decision that Atty. Montao and others are disqualified and
barred from running for any position in the election of the Federation, in view of pertinent
provisions of the FFW Constitution.
Our decision which we repeated several times as final was however further deliberated upon by
the body, which then gave the go signal for Atty. Montaos candidacy notwithstanding our
decision barring him from running and despite the fact that several delegates took the floor
[stating] that the convention body is not a constitutional convention body and as such could not
qualify to amend the FFWs present constitution to allow Atty. Montao to run.
We would like to reiterate what we stated during the plenary session that our decision was final
in view of the cited pertinent provisions of the FFW Constitution and we submit that the decision
of the convention body in allowing Atty. Montaos candidacy is not valid in view of the fact that
it runs counter to the FFW Constitution and the body at that time was not acting as a
Constitutional Convention body empowered to amend the FFW Constitution on the spot.
Our having conducted the election does not depart from the fact that we did not change our
decision disqualifying candidates such as Atty. Allan S. Montao, and others from running. The
National Convention as a co-equal constitutional body of the Comelec was not given the license
nor the authority to violate the Constitution. It therefore, cannot reverse the final decision of the
Comelec with regard to the candidacy of Atty. Allan Montao and other disqualified candidates. 16
The BLR, in its Order dated August 20, 2001, 17 did not give due course to Atty. Montaos Motion
to Dismiss but ordered the latter to submit his answer to the petition pursuant to the rules. The
parties thereafter submitted their respective pleadings and position papers.
On May 8, 2002, the BLR rendered a Decision18 dismissing the petition for lack of merit. While it
upheld its jurisdiction over the intra-union dispute case and affirmed, as well, Atty. Verceles legal
personality to institute the action as president of an affiliate union of FFW, the BLR ruled that
there were no grounds to hold Atty. Montao unqualified to run for National Vice-President of
FFW. It held that the applicable provision in the FFW Constitution and By-Laws to determine
whether one is qualified to run for office is not Section 76 of Article XIX 19 but Section 26 of Article
VIII20 thereof. The BLR opined that there was sufficient compliance with the requirements laid
down by this applicable provision and, besides, the convention delegates unanimously decided
that Atty. Montao was qualified to run for the position of National Vice-President.
Atty. Verceles filed a Motion for Reconsideration but it was denied by the BLR.
Proceedings before the Court of Appeals

Atty. Verceles thus elevated the matter to the CA via a petition for certiorari,21 arguing that the
Convention had no authority under the FFW Constitution and By-Laws to overrule and set aside
the FFW COMELECs Decision rendered pursuant to the latters power to screen candidates.
On May 28, 2004, the CA set aside the BLRs Decision. While it agreed that jurisdiction was
properly lodged with the BLR, that Atty. Verceles has legal standing to institute the petition, and
that the applicable provision of FFW Constitution and By-Laws is Section 26 of Article VIII and not
Section 76 of Article XIX, the CA however ruled that Atty. Montao did not possess the
qualification requirement under paragraph (d) of Section 26 that candidates must be an officer or
member of a legitimate labor organization. According to the CA, since Atty. Montao, as legal
assistant employed by FFW, is considered as confidential employee, consequently, he is
ineligible to join FFW Staff Association, the rank-and-file union of FFW. The CA, thus, granted the
petition and nullified the election of Atty. Montao as FFW National Vice-President.
Atty. Montao moved for reconsideration claiming that the CA seriously erred in granting Atty.
Verceles petition on the ground that FFW Staff Association, of which he is an officer and
member, is not a legitimate labor organization. He asserted that the legitimacy of the union was
never raised as an issue. Besides, the declaration of the CA that FFW Staff Association is not a
legitimate labor organization amounts to a collateral attack upon its legal personality, which is
proscribed by law. Atty. Montao also reiterated his allegations of lack of jurisdiction and lack of
cause of action due to a pending protest. In addition, he claimed violation of the mandatory
requirement on certification against forum shopping and mootness of the case due to the
appointment of Atty. Verceles as Commissioner of the National Labor Relations Commission
(NLRC), thereby divesting himself of interest in any matters relating to his affiliation with FFW.
Believing that it will be prejudiced by the CA Decision since its legal existence was put at stake,
the FFW Staff Association, through its president, Danilo A. Laserna, sought intervention.
On June 28, 2005, the CA issued a Resolution 22 denying both Atty. Montaos motion for
reconsideration23 and FFW Staff Associations motion for intervention/clarification. 24
Issues
Hence, this petition anchored on the following grounds:
I.
THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION, AMOUNTING TO LACK
AND/OR EXCESS OF JURISDICTION, IN RENDERING THE ASSAILED DECISION, IN THAT:
A.) THE SOLE GROUND USED AND/OR INVOKED IN GRANTING THE PETITION A QUO WAS
NOT EVEN RAISED AND/OR INVOKED BY PETITIONER;
B.) THE DECLARATION THAT "FFW STAFF ASSOCIATION IS NOT A LEGITIMATE LABOR
ORGANIZATION", WITHOUT GIVING SAID ORGANIZATION A DAY IN COURT AMOUNTS TO A
COLLATERAL ATTACK PROSCRIBED UNDER THE LAW; AND
C.) THE COURT OF APPEALS FAILED AND/OR REFUSED TO PASS UPON OTHER LEGAL
ISSUES WHICH HAD BEEN TIMELY RAISED, SPECIFICALLY ON THE PREMATURITY OF THE
COMPLAINT AND THE LACK OF CERTIFICATION AGAINST FORUM SHOPPING OF THE
PETITION A QUO.
II.
THE COURT OF APPEALS ERRED IN UPHOLDING THE EXERCISE OF JURISDICTION BY HEREIN

RESPONDENT BUREAU AND IN NOT ORDERING THE DISMISSAL OF THE CASE, DESPITE EXPRESS
PROVISION OF LAW GRANTING SAID JURISDICTION OVER CASES INVOLVINGPROTESTS AND
PETITIONS FOR ANNULMENT OF RESULTS OF ELECTIONS TO THE REGIONAL DIRECTORS OF THE
DEPARTMENT OF LABOR AND EMPLOYMENT.
III.
IN THE ALTERNATIVE, THE COURT OF APPEALS LIKEWISE ERRED IN NOT ORDERING THE
DISMISSAL OF THE PETITION A QUO, IN THAT:
A.) THE FILING OF THE PETITION FOR NULLIFICATION OF THE RESULT OF ELECTION IS
PREMATURE, IN VIEW OF PENDENCY OF HEREIN RESPONDENT ATTY. VERCELES PROTEST
BEFORE THE COMMISSION ON ELECTION OF THE FEDERATION OF FREE WORKERS (FFW
COMELEC) AT THE TIME OF THE FILING OF THE SAID PETITION, HENCE, HE HAS NO CAUSE
OF ACTION; AND
B.) HEREIN RESPONDENT ATTY. VERCELES HAS VIOLATED SECTION 5, RULE 7 OF THE 1997
RULES ON CIVIL PROCEDURE, AS HIS PETITION A QUO HAS NO CERTIFICATION AGAINST
FORUM SHOPPING, WHICH IS A MANDATORY REQUIREMENT. IT IS ALSO IN UTTER
DISREGARD AND IN GROSS VIOLATION OF SUPREME COURT CIRCULAR NO. 04-94.
IV.
FINALLY, ASSUMING ARGUENDO THAT HEREIN RESPONDENT BUREAU ACTED WITH JURISDICTION
OVER THE CASE; AND ASSUMING FURTHER THAT HEREIN RESPONDENT ATTY. VERCELES HAS A
CAUSE OF ACTION, DESPITE THE PENDENCY OF HIS PROTEST BEFORE FFWS COMELEC AT THE
TIME HE FILED HIS PETITION A QUO; AND ASSUMING FINALLY, THAT HEREIN RESPONDENT ATTY.
VERCELES BE EXCUSED IN DISREGARDING THE MANDATORY REQUIREMENT ON CERTIFICATION
AGAINST FORUM SHOPPING WHICH WAS TIMELY OBJECTED TO, THE COURT OF APPEALS
COMMITTED GRAVE ABUSE OF DISCRETION, AMOUNTING TO LACK AND/OR EXCESS OF
JURISDICTION, IN NOT ORDERING THE DISMISSAL OF THE CASE FOR HAVING BEEN RENDERED
MOOT AND ACADEMIC BY A SUPERVENING EVENT THAT WAS, WHEN HEREIN RESPONDENT ATTY.
VERCELES SOUGHT APPOINTMENT AND WAS APPOINTED AS COMMISSIONER OF THE NATIONAL
LABOR RELATIONS COMMISSION (NLRC), THUS, DIVESTING HIMSELF WITH ANY INTEREST WITH
MATTERS RELATING TO HIS FORMER MEMBERSHIP AND AFFILIATION WITH THE FEDERATION OF
FREE WORKERS (FFW), HENCE, HE IS NO LONGER A REAL PARTY IN INTEREST, AS HE DOES NOT
STAND TO BE INJURED OR BENEFITED BY THE JUDGMENT IN THE INSTANT CASE. 25
Atty. Montao contends that the CA gravely erred in upholding the jurisdiction of the BLR; in not
declaring as premature the petition in view of the pending protest before FFW COMELEC; in not
finding that the petition violated the rule on non-forum shopping; in not dismissing the case for
being moot in view of the appointment of Atty. Verceles as NLRC Commissioner; and in granting
the petition to annul his election as FFW National Vice-President on the ground that FFW Staff
Association is not a legitimate labor organization.
Our Ruling
The petition is devoid of merit.
The BLR has jurisdiction over intra-union disputes involving a federation.
We find no merit in petitioners claim that under Section 6 of Rule XV 26 in relation to Section 1 of
Rule XIV27 of Book V of the Omnibus Rules Implementing the Labor Code, it is the Regional
Director of the DOLE and not the BLR who has jurisdiction over election protests.

Section 226 of the Labor Code28 clearly provides that the BLR and the Regional Directors of DOLE
have concurrent jurisdiction over inter-union and intra-union disputes. Such disputes include the
conduct or nullification of election of union and workers association officers. 29 There is, thus, no
doubt as to the BLRs jurisdiction over the instant dispute involving member-unions of a
federation arising from disagreement over the provisions of the federations constitution and bylaws.
We agree with BLRs observation that:
Rule XVI lays down the decentralized intra-union dispute settlement mechanism. Section 1 states
that any complaint in this regard shall be filed in the Regional Office where the union is
domiciled. The concept of domicile in labor relations regulation is equivalent to the place where
the union seeks to operate or has established a geographical presence for purposes of collective
bargaining or for dealing with employers concerning terms and conditions of employment.
The matter of venue becomes problematic when the intra-union dispute involves a federation,
because the geographical presence of a federation may encompass more than one
administrative region. Pursuant to its authority under Article 226, this Bureau exercises original
jurisdiction over intra-union disputes involving federations. It is well-settled that FFW, having
local unions all over the country, operates in more than one administrative region. Therefore, this
Bureau maintains original and exclusive jurisdiction over disputes arising from any violation of or
disagreement over any provision of its constitution and by-laws. 30
The petition to annul Atty. Montaos election as VP was not prematurely filed.
There is likewise no merit to petitioners argument that the petition should have been
immediately dismissed due to a pending and unresolved protest before the FFW COMELEC
pursuant to Section 6, Rule XV, Book V of the Omnibus Rules Implementing the Labor Code. 31
It is true that under the Implementing Rules, redress must first be sought within the organization
itself in accordance with its constitution and by-laws. However, this requirement is not absolute
but yields to exception under varying circumstances. 32 In the case at bench, Atty. Verceles made
his protest over Atty. Montaos candidacy during the plenary session before the holding of the
election proceedings. The FFW COMELEC, notwithstanding its reservation and despite objections
from certain convention delegates, allowed Atty. Montaos candidacy and proclaimed him
winner for the position. Under the rules, the committee on election shall endeavor to settle or
resolve all protests during or immediately after the close of election proceedings and any protest
left unresolved shall be resolved by the committee within five days after the close of the election
proceedings.33 A day or two after the election, Atty. Verceles made his written/formal protest over
Atty. Montaos candidacy/proclamation with the FFW COMELEC. He exhausted the remedies
under the constitution and by-laws to have his protest acted upon by the proper forum and even
asked for a formal hearing on the matter. Still, the FFW COMELEC failed to timely act thereon.
Thus, Atty. Verceles had no other recourse but to take the next available remedy to protect the
interest of the union he represents as well as the whole federation, especially so that Atty.
Montao, immediately after being proclaimed, already assumed and started to perform the
duties of the position. Consequently, Atty. Verceles properly sought redress from the BLR so that
the right to due process will not be violated. To insist on the contrary is to render the exhaustion
of remedies within the union as illusory and vain. 34
The allegation regarding certification against forum shopping was belatedly raised.
Atty. Montao accuses Atty. Verceles of violating the rules on forum shopping. We note however
that this issue was only raised for the first time in Atty. Montaos motion for reconsideration of
the Decision of the CA, hence, the same deserves no merit. It is settled that new issues cannot
be raised for the first time on appeal or on motion for reconsideration. 35 While this allegation is

related to the ground of forum shopping alleged by Atty. Montao at the early stage of the
proceedings, the latter, as a ground for the dismissal of actions, is separate and distinct from the
failure to submit a proper certificate against forum shopping. 36
There is necessity to resolve the case despite the issues having become moot.
During the pendency of this case, the challenged term of office held and served by Atty. Montao
expired in 2006, thereby rendering the issues of the case moot. In addition, Atty. Verceles
appointment in 2003 as NLRC Commissioner rendered the case moot as such supervening event
divested him of any interest in and affiliation with the federation in accordance with Article 213
of the Labor Code. However, in a number of cases, 37 we still delved into the merits
notwithstanding supervening events that would ordinarily render the case moot, if the issues
are capable of repetition, yet evading review, as in this case.
As manifested by Atty. Verceles, Atty. Montao ran and won as FFW National President after his
challenged term as FFW National Vice-President had expired. It must be stated at this juncture
that the legitimacy of Atty. Montaos leadership as National President is beyond our jurisdiction
and is not in issue in the instant case. The only issue for our resolution is petitioners qualification
to run as FFW National Vice-President during the May 26-27, 2001 elections. We find it necessary
and imperative to resolve this issue not only to prevent further repetition but also to clear any
doubtful interpretation and application of the provisions of FFW Constitution & By-laws in order to
ensure credible future elections in the interest and welfare of affiliate unions of FFW.
Atty. Montao is not qualified to run as FFW National Vice-President in view of the prohibition
established in Section 76, Article XIX of the 1998 FFW Constitution and By-Laws.1awph!1
Section 76, Article XIX of the FFW Constitution and By-laws provides that no member of the
Governing Board shall at the same time be an employee in the staff of the federation. There is no
dispute that Atty. Montao, at the time of his nomination and election for the position in the
Governing Board, is the head of FFW Legal Center and the President of FFW Staff Association.
Even after he was elected, albeit challenged, he continued to perform his functions as staff
member of FFW and no evidence was presented to show that he tendered his resignation. 38 On
this basis, the FFW COMELEC disqualified Atty. Montao. The BLR, however, overturned FFW
COMELECs ruling and held that the applicable provision is Section 26 of Article VIII. The CA
subsequently affirmed this ruling of the BLR but held Atty. Montao unqualified for the position
for failing to meet the requirements set forth therein.
We find that both the BLR and CA erred in their findings.
To begin with, FFW COMELEC is vested with authority and power, under the FFW Constitution and
By-Laws, to screen candidates and determine their qualifications and eligibility to run in the
election and to adopt and promulgate rules concerning the conduct of elections. 39 Under the
Rules Implementing the Labor Code, the Committee shall have the power to prescribe rules on
the qualification and eligibility of candidates and such other rules as may facilitate the orderly
conduct of elections.40 The Committee is also regarded as the final arbiter of all election
protests.41 From the foregoing, FFW COMELEC, undeniably, has sufficient authority to adopt its
own interpretation of the explicit provisions of the federations constitution and by-laws and
unless it is shown to have committed grave abuse of discretion, its decision and ruling will not be
interfered with. The FFW Constitution and By-laws are clear that no member of the Governing
Board shall at the same time perform functions of the rank-and-file staff. The BLR erred in
disregarding this clear provision. The FFW COMELECs ruling which considered Atty. Montaos
candidacy in violation of the FFW Constitution is therefore correct.
We, thus, concur with the CA that Atty. Montao is not qualified to run for the position but not for
failure to meet the requirement specified under Section 26 (d) of Article VIII of FFW Constitution

and By-Laws. We note that the CAs declaration of the illegitimate status of FFW Staff Association
is proscribed by law, owing to the preclusion of collateral attack. 42 We nonetheless resolve to
affirm the CAs finding that Atty. Montao is disqualified to run for the position of National VicePresident in view of the proscription in the FFW Constitution and By-Laws on federation
employees from sitting in its Governing Board. Accordingly, the election of Atty. Montao as FFW
Vice-President is null and void.
WHEREFORE, the petition is DENIED. The assailed May 28, 2004 Decision of the Court of
Appeals in CA-G.R. SP No. 71731 nullifying the election of Atty. Allan S. Montao as FFW National
Vice-President and the June 28, 2005 Resolution denying the Motion for Reconsideration
are AFFIRMED.
SO ORDERED.
G.R. No. 168475

July 4, 2007

EMILIO E. DIOKNO, VICENTE R. ALCANTARA, ANTONIO Z. VERGARA, JR., DANTE M.


TONG, JAIME C. MENDOZA, ROMEO M. MACAPULAY, ROBERTO M. MASIGLAT, LEANDRO
C. ATIENZA, ROMULO AQUINO, JESUS SAMIA, GAUDENCIO CAMIT, DANTE PARAO,
ALBERTO MABUGAT, EDGARDO VILLANUEVA, JR., FRANCISCO ESCOTO, EDGARDO
SEVILLA, FELICITO MACASAET, and JOSE Z. TULLO, Petitioners,
vs.
HON. HANS LEO J. CACDAC, in his capacity as Director of the Bureau of Labor
Relations, DOLE, MANILA, MED-ARBITER TRANQUILINO C. REYES, EDGARDO DAYA,
PABLO LUCAS, LEANDRO M. TABILOG, REYNALDO ESPIRITU, JOSE VITO, ANTONIO DE
LUNA, ARMANDO YALUNG, EDWIN LAYUG, NARDS PABILONA, REYNALDO REYES,
EVANGELINE ESCALL, ALBERTO ALCANTARA, ROGELIO CERVITILLO, MARCELINO
MORELOS, FAUSTINO ERMINO, JIMMY S. ONG, ALFREDO ESCALL, NARDITO C. ALVAREZ,
JAIME T. VALERIANO, JOHNSON S. REYES, GAUDENCIO JIMENEZ, JR., GAVINO R.
VIDANES, ARNALDO G. TAYAO, BONIFACIO F. CIRUJANO, EDGARDO G. CADVONA,
MAXIMO A. CAOC, JOSE O. MACLIT, JR., LUZMINDO D. ACORDA, JR., LEMUEL R. RAGASA,
and GIL G. DE VERA, Respondents.
DECISION
CHICO-NAZARIO, J.:
This is a Petition for Review on Certiorari under Rule 45 of the 1997 Revised Rules of Civil
Procedure, seeking the nullification of the Decision 1 and Resolution2 of the Court of Appeals in
CA-G.R. SP No. 83061, dated 17 June 2004 and 10 June 2005, respectively, which dismissed
petitioners Petition for Certiorari and denied their Motion for Reconsideration thereon.
The Facts
The First Line Association of Meralco Supervisory Employees (FLAMES) is a legitimate labor
organization which is the supervisory union of Meralco. Petitioners and private respondents are
members of FLAMES.
On 1 April 2003, the FLAMES Executive Board created the Committee on Election (COMELEC) for
the conduct of its union elections scheduled on 7 May 2003. 3 The COMELEC was composed of
petitioner Dante M. Tong as its chairman, and petitioners Jaime C. Mendoza and Romeo M.
Macapulay as members. Subsequently, private respondents Jimmy S. Ong, Nardito C. Alvarez,
Alfredo J. Escall, and Jaime T. Valeriano filed their respective certificates of candidacy. On 12 April
2003, the COMELEC rejected Jimmy S. Ongs candidacy on the ground that he was not a member
of FLAMES. Meanwhile, the certificates of candidacy of Nardito C. Alvarez, Alfredo J. Escall, and

Jaime T. Valeriano were similarly rejected on the basis of the exclusion of their department from
the scope of the existing collective bargaining agreement (CBA). The employees assigned to the
aforesaid department are allegedly deemed disqualified from membership in the union for being
confidential employees.
On 24 April 2003, private respondents Jimmy S. Ong, Nardito C. Alvarez, Alfredo J. Escall, Jaime T.
Valeriano (Ong, et al.), and a certain Leandro M. Tabilog filed a Petition 4 before the MedArbitration Unit of the Department of Labor and Employment (DOLE). They prayed, inter alia, for
the nullification of the order of the COMELEC which disallowed their candidacy.5 They further
prayed that petitioners be directed to render an accounting of funds with full and detailed
disclosure of expenditures and financial transactions; and that a representative from the Bureau
of Labor Relations (BLR) be designated to act as chairman of the COMELEC in lieu of petitioner
Dante M. Tong.6
On 30 April 2003, DOLE-NCR Regional Director Alex E. Maraan issued an Order 7 directing DOLE
personnel to observe the conduct of the FLAMES election on 7 May 2003. 8
On 2 May 2003, petitioners filed a Petition 9 with the COMELEC seeking the disqualification of
private respondents Edgardo Daya, Pablo Lucas, Leandro Tabilog, Reynaldo Espiritu, Jose Vito,
Antonio de Luna, Armando Yalung, Edwin Layug, Nards Pabilona, Reynaldo Reyes, Evangeline
Escall, Alberto Alcantara, Rogelio Cervitillo, Marcelino Morelos, and Faustino Ermino (Daya, et al.).
Petitioners alleged that Daya, et al., allowed themselves to be assisted by non-union members,
and committed acts of disloyalty which are inimical to the interest of FLAMES. In their campaign,
they allegedly colluded with the officers of the Meralco Savings and Loan Association (MESALA)
and the Meralco Mutual Aid and Benefits Association (MEMABA) and exerted undue influence on
the members of FLAMES.
On 6 May 2003, the COMELEC issued a Decision, 10 declaring Daya, et al., officially disqualified to
run and/or to participate in the 7 May 2003 FLAMES elections. The COMELEC also resolved to
exclude their names from the list of candidates in the polls or precincts, and further declared that
any vote cast in their favor shall not be counted. According to the COMELEC, Daya, et al.,
violated Article IV, Section 4(a)(6) 11 of the FLAMES Constitution and By-Laws (CBL) by allowing
non-members to aid them in their campaign. Their acts of solicitation for support from non-union
members were deemed inimical to the interest of FLAMES.
On 7 May 2003, the COMELEC proclaimed the following candidates, including some of herein
petitioners as winners of the elections, to wit 12 :
1avvphi1
NAME

POSITION

Emilio E. Diokno

President

Vicente P.
Alcantara

Executive Vice President


External

Antonio Z. Vergara, Executive Vice President


Jr.
Internal
Alberto L. Mabugat Vice-President Organizing
Roberto D.
Masiglat, Jr.

Vice-President Education

Leandro C. Atienza

Vice-President Chief
Steward

Felito C. Macasaet

Secretary

Edgardo R.
Villanueva

Asst. Secretary

Romulo C. Aquino

Treasurer

Jesus D. Samia
Asst.

Treasurer

Gaudencio C.
Camit

Auditor

Rodante B. [Parao]

Asst. Auditor

Jose Z. Tullo

Central Coordinator

Bernardo C. Sevilla North Coordinator


Francis B. Escoto

South Coordinator

On 8 May 2003, private respondents Daya, et al., along with Ong, et al., filed with the MedArbitration Unit of the DOLE-NCR, a Petition13 to: a) Nullify Order of Disqualification; b) Nullify
Election Proceedings and Counting of Votes; c) Declare Failure of Election; and d) Declare Holding
of New Election to be Controlled and Supervised by the DOLE. The Petition was docketed as Case
No. NCR-OD-0304-002-LRD.
On 14 May 2003, another group led by private respondent Gaudencio Jimenez, Jr., along with
private respondents Johnson S. Reyes, Gavino R. Vidanes, Arnaldo G. Tayao, Bonifacio F. Cirujano,
Edgardo G. Cadavona, Maximo A. Caoc, Jose O. Maclit, Jr., Luzmindo D. Acorda, Jr., Lemuel R.
Ragasa and Gil G. de Vera (Jimenez, et al.) filed a Petition with the Med-Arbitration Unit of the
DOLE-NCR against petitioners to nullify the 7 May 2003 election on the ground that the same was
not free, orderly, and peaceful. It was docketed as Case No. NCR-OD-0305-004-LRD, which was
subsequently consolidated with the Petition of Daya, et al. and the earlier Petition of Ong, et al.
Meanwhile, the records show that a subsequent election was held on 30 June 2004, which was
participated in and won by herein private respondents Daya, et al. The validity of the 30 June
2004 elections was assailed by herein petitioners before the DOLE 14 and taken to the Court of
Appeals in CA-G.R. SP No. 88264 on certiorari, which case does not concern us in the instant
Petition. The Court of Appeals, in the aforesaid case, rendered a Decision 15 dated 12 January
2007, upholding the validity of the 30 June 2004 elections, and the declaration of herein private
respondents Daya, et al., as the duly elected winners therein.
The Decision of the Med-Arbiter
On 7 July 2003, Med-Arbiter Tranquilino B. Reyes, Jr. issued a Decision 16 in favor of private
respondents, Daya, et al. However, the petition of Jimenez, et al., was dismissed because it was
premature, it appearing that the COMELEC had not yet resolved their protest prior to their resort
to the Med-Arbiter. Finally, the Petition of Ong, et al., seeking to declare themselves as bona fide
members of FLAMES was ordered dismissed.
The Med-Arbiter noted in his decision that during a conference which was held on 15 May 2003,
the parties agreed that the issue anent the qualifications of private respondents Ong, et al. had
been rendered moot and academic.17
The Med-Arbiter reversed the disqualification imposed by the COMELEC against private
respondents Daya, et al. He said that the COMELEC accepted all the allegations of petitioners
against private respondents Daya, et al., sans evidence to substantiate the same. Moreover, he
found that the COMELEC erred in relying on Article IV, Section 4(a) (6) of the CBL as basis for

their disqualification. The Med-Arbiter read the aforesaid provision to refer to the dismissal and/or
expulsion of a member from FLAMES, but not to the disqualification of a member as a candidate
in a union election. He rationalized that the COMELEC cannot disqualify a candidate on the same
grounds for expulsion of members, which power is vested by the CBL on the Executive Board.
The Med-Arbiter also held that there was a denial of due process because the COMELEC failed to
receive private respondents Daya, et al.s motion for reconsideration of the order of their
disqualification. The COMELEC was also found to have refused to receive their written protest in
violation of the unions CBL.18
Lastly, the Med-Arbiter defended his jurisdiction over the case. He concluded that even as the
election of union officers is an internal affair of the union, his office has the right to inquire into
the merits and conduct of the election when its jurisdiction is sought. 19
The decretal portion of the Med-Arbiters Decision states, viz:
WHEREFORE, premises considered, the [P]etition to Nullify the Order of Disqualification; Nullify
Election proceedings and counting of Votes; and Declare a Failure of Elections is hereby granted.
The disqualification of [private respondent] Ed[gardo] Daya, et al., is hereby considered as null
and void. Perforce, the election of union officers of FLAMES on May 7, 2003 is declared a failure
and a new election is ordered conducted under the supervision of the Department of Labor and
Employment.
The [P]etition to conduct an accounting of union funds and to stop the release of funds to
[petitioner] Diokno, et al., is ordered dismissed for lack of merit.
And the Petition to Declare [private respondents] Jimmy Ong, Alfredo [E]scall, Nardito Alvarez,
and Jaime Valeriano as members of FLAMES is hereby ordered dismissed for lack of merit.
The [P]etition to Nullify the election filed by [private respondents] Gaudencio Jimenez, et al., is
likewise ordered dismissed.20
Aggrieved, petitioners filed an appeal before the Director of the BLR.
The Ruling of the BLR Director
On 3 December 2003, the Director of the BLR issued a Resolution, 21 affirming in toto the assailed
Decision of the Med-Arbiter.
Public respondent Director Hans Leo J. Cacdac ruled, inter alia, that the COMELECs reliance on
Article IV, Section 4(a) (6) of the CBL, as a ground for disqualifying private respondents Daya, et
al., was premature. He echoed the interpretation of the Med-Arbiter that the COMELEC
erroneously resorted to the aforecited provision which refers to the expulsion of a member from
the union on valid grounds and with due process, along with the requisite 2/3 vote of the
Executive Board. Hence, the COMELEC cut short the expulsion proceedings in disqualifying
private respondents Daya, et al.22 The BLR Director further held that the case involves a question
of disqualification on account of the alleged commission by private respondents Daya, et al., of
illegal campaign acts, which acts were not specifically mentioned in the guidelines for the
conduct of election as issued by the COMELEC. Likewise, on the alleged refusal of private
respondents Daya, et al., to submit to the jurisdiction of the COMELEC by failing to file a petition
to nullify its order of disqualification, the BLR Director deemed the same as an exception to the
rule on exhaustion of administrative remedies. Thus:
By themselves, such acts could not be taken as repugnant of COMELECs authority. Sensing that
they were prejudiced by the disqualification order, it was only incumbent upon [private
respondents Daya, et al.] to seek remedy before a body, which they thought has a more

objective perspective over the situation. In short, they opted to bypass the administrative
remedies within the union. Such a move could not be taken against [private respondents Daya,
et al.] considering that non-exhaustion of administrative remedies is justified in instances where
it would practically amount to a denial of justice, or would be illusory or vain, as in the present
controversy.23
The BLR Director disposed in this wise:
WHEREFORE, the appeal is DISMISSED for lack of merit. The Decision of Med-Arbiter Tranquilino
B. Reyes, DOLE-NCR, dated 7 July 2003 is AFFIRMED in its entirety.
Let the records of this case be returned to the DOLE-NCR for the immediate conduct of election
of officers of the First Line Association of Meralco Supervisory Employees (FLAMES) under the
supervision of DOLE-NCR personnel.24
Subsequently, petitioners sought a reversal of the 3 December 2003 Resolution, but the BLR
Director issued a Resolution dated 10 February 2003, 25 refusing to reverse his earlier Resolution
for lack of merit.
Petitioners elevated the case to the Court of Appeals via a Petition for Certiorari.
The Ruling of the Court of Appeals
The Court of Appeals found petitioners appeal to be bereft of merit.
The appellate court held that the provision relied upon by the COMELEC concerns the dismissal
and/or expulsion of union members, which power is vested in the FLAMES Executive Board, and
not the COMELEC. It affirmed the finding of the BLR Director that the COMELEC, in disqualifying
private respondents Daya, et al., committed a procedural shortcut. It held:
Without the requisite two-thirds (2/3) vote of the Executive Board dismissing and/or expelling
private respondents for acts contemplated thereunder, the COMELEC was clearly violating the
unions constitution and bylaws (sic) by utilizing the aforequoted provision in its said May 6, 2003
decision and, in the process, arrogating unto itself a power it did not possess. As the document
embodying the covenant between a union and its members and the fundamental law governing
the members rights and obligations, it goes without saying that the constitution and bylaws (sic)
should be upheld for as long as they are not contrary to law, good morals or public policy. 26
On the matter of the failure of private respondents Daya, et al. to come up with 30 percent (30%)
members support in filing the Petition to Nullify the COMELECs Decision before the Med-Arbiter,
the Court of Appeals said that the petition did not involve the entire membership of FLAMES, so
there was no need to comply with the aforesaid requirement. Furthermore, the appellate court
applied the exception to the rule on exhaustion of administrative remedies on the ground, inter
alia, that resort to such a remedy would have been futile, illusory or vain. 27 Indeed, the Court of
Appeals emphasized that private respondents Daya, et al., were directed by the COMELEC to file
their Answer to the petition for their disqualification only on 5 May 2003. Private respondents
Daya, et al., filed their Answer on 6 May 2003. On the same day, the COMELEC issued its
Decision disqualifying them. A day after, the 7 May 2003 election was held. The Court of Appeals
further stressed that private respondents Daya, et al.s efforts to have their disqualification
reconsidered were rebuffed by the COMELEC; hence, they were left with no choice but to seek
the intervention of the BLR,28 which was declared to have jurisdiction over intra-union disputes
even at its own initiative under Article 22629 of the Labor Code.
Petitioners sought a reconsideration of the 17 June 2004 Decision of the Court of Appeals, but the
same was denied in a Resolution30 dated 10 June 2005.

Hence, the instant Petition.


At the outset, petitioners contend that the instant Petition falls under the exceptions to the rule
that the Supreme Court is not a trier of facts. They implore this Court to make factual
determination anent the conduct of the 7 May 2003 elections. They also question the jurisdiction
of the BLR on the case at bar because of the failure of private respondents Daya, et al., to
exhaust administrative remedies within the union. It is the stance of petitioner that Article
22631 of the Labor Code which grants power to the BLR to resolve inter-union and intra-union
disputes is dead law, and has been amended by Section 14 of Republic Act No. 6715, whereby
the conciliation, mediation and voluntary arbitration functions of the BLR had been transferred to
the National Conciliation and Mediation Board.
Petitioners similarly assert that the 7 May 2003 election was conducted in a clean, honest, and
orderly manner, and that private respondents, some of whom are not bona fide members of
FLAMES, were validly disqualified by the COMELEC from running in the election. They also
rehashed their argument that non-members of the union were allowed by private respondents
Daya, et al., to participate in the affair. They challenge the finding of the BLR Director that the
reliance by the COMELEC on Article IV, Section 4(a)(6) of the CBL, was premature. Petitioners
insist that the COMELEC had the sole and exclusive power to pass upon the qualification of any
candidate, and therefore, it has the correlative power to disqualify any candidate in accordance
with its guidelines.
For their part, private respondents Daya, et al., maintain that the Petition they filed before the
DOLE-NCR Med-Arbiter questioning the disqualification order of the COMELEC and seeking the
nullification of the 7 May 2003 election involves an intra-union dispute which is within the
jurisdiction of the BLR. They further claim that the COMELEC, in disqualifying them, mistakenly
relied on a provision in the FLAMES CBL that addresses the expulsion of members from the
union, and no expulsion proceedings were held against them. Finally, they underscore the finding
of the appellate court that there was disenfranchisement among the general membership of
FLAMES due to their wrongful disqualification which restricted the members choices of
candidates. They reiterate the conclusion of the Court of Appeals that had the COMELEC
tabulated the votes cast in their favor, there would have been, at least, a basis for the
declaration that they lost in the elections.
Issues
Petitioners attribute to the Court of Appeals several errors to substantiate their Petition. 32 They all
boil down, though, to the question of whether the Court of Appeals committed grave abuse of
discretion when it affirmed the jurisdiction of the BLR to take cognizance of the case and then
upheld the ruling of the BLR Director and Med-Arbiter, nullifying the COMELECs order of
disqualification of private respondents Daya et al., and annulling the 7 May 2003 FLAMES
elections.
The Courts Ruling
The Petition is devoid of merit.
We affirm the finding of the Court of Appeals upholding the jurisdiction of the BLR. Article 226 of
the Labor Code is hereunder reproduced, to wit:
ART. 226. BUREAU OF LABOR RELATIONS. The Bureau of Labor Relations and the Labor
Relations Divisions in the regional offices of the Department of Labor shall have original and
exclusive authority to act, at their own initiative or upon request of either or both parties, on all
inter-union and intra-union conflicts, and all disputes, grievances or problems arising from or
affecting labor-management relations in all workplaces whether agricultural or nonagricultural,

except those arising from the implementation or interpretation of collective bargaining


agreements which shall be the subject of grievance procedure and/or voluntary arbitration.
The Bureau shall have fifteen (15) working days to act on labor cases before it, subject to
extension by agreement of the parties.
The amendment to Article 226, as couched in Republic Act No. 6715, 33 which is relied upon by
petitioners in arguing that the BLR had been divested of its jurisdiction, simply reads, thus:
Sec. 14. The second paragraph of Article 226 of the same Code is likewise hereby amended to
read as follows:
"The Bureau shall have fifteen (15) calendar days to act on labor cases before it, subject to
extension by agreement of the parties."
This Court in Bautista v. Court of Appeals,34 interpreting Article 226 of the Labor Code, was
explicit in declaring that the BLR has the original and exclusive jurisdiction on all inter-union and
intra-union conflicts. We said that since Article 226 of the Labor Code has declared that the BLR
shall have original and exclusive authority to act on all inter-union and intra-union conflicts, there
should be no more doubt as to its jurisdiction. As defined, an intra-union conflict would refer to a
conflict within or inside a labor union, while an inter-union controversy or dispute is one occurring
or carried on between or among unions. 35 More specifically, an intra-union dispute is defined
under Section (z), Rule I of the Rules Implementing Book V of the Labor Code, viz:
(z) "Intra-Union Dispute" refers to any conflict between and among union members, and includes
all disputes or grievances arising from any violation of or disagreement over any provision of the
constitution and by-laws of a union, including cases arising from chartering or affiliation of labor
organizations or from any violation of the rights and conditions of union membership provided for
in the Code.
The controversy in the case at bar is an intra-union dispute. There is no question that this is one
which involves a dispute within or inside FLAMES, a labor union. At issue is the propriety of the
disqualification of private respondents Daya, et al., by the FLAMES COMELEC in the 7 May 2003
elections. It must also be stressed that even as the dispute involves allegations that private
respondents Daya, et al., sought the help of non-members of the union in their election
campaign to the detriment of FLAMES, the same does not detract from the real character of the
controversy. It remains as one which involves the grievance over the constitution and bylaws of a
union, and it is a controversy involving members of the union. Moreover, the non-members of the
union who were alleged to have aided private respondents Daya, et al., are not parties in the
case. We are, therefore, unable to understand petitioners persistence in placing the controversy
outside of the jurisdiction of the BLR. The law is very clear. It requires no further interpretation.
The Petition which was initiated by private respondents Daya, et al., before the BLR was properly
within its cognizance, it being an intra-union dispute. Indubitably, when private respondents
Daya, et al., brought the case to the BLR, it was an invocation of the power and authority of the
BLR to act on an intra-union conflict.
After having settled the jurisdiction of the BLR, we proceed to determine if petitioners correctly
raised the argument that private respondents Daya, et al., prematurely sought the BLRs
jurisdiction on the ground that they failed to exhaust administrative remedies within the union.
On this matter, we affirm the findings of the Court of Appeals which upheld the application by the
BLR Director of the exception to the rule of exhaustion of administrative remedies.
In this regard, this Court is emphatic that "before a party is allowed to seek the intervention of
the court, it is a pre-condition that he should have availed of all the means of administrative
processes afforded him. Hence, if a remedy within the administrative machinery can still be

resorted to by giving the administrative officer concerned every opportunity to decide on a


matter that comes within his jurisdiction when such remedy should be exhausted first before the
courts judicial power can be sought. The premature invocation of courts judicial intervention is
fatal to ones cause of action."36
Verily, there are exceptions to the applicability of the doctrine. 37 Among the established
exceptions are: 1) when the question raised is purely legal; 2) when the administrative body is in
estoppel; 3) when the act complained of is patently illegal; 4) when there is urgent need for
judicial intervention; 5) when the claim involved is small; 6) when irreparable damage will be
suffered; 7) when there is no other plain, speedy, and adequate remedy; 8) when strong public
interest is involved; 9) when the subject of the proceeding is private land; 10) in quo warranto
proceedings;38 and 11) where the facts show that there was a violation of due process. 39 As aptly
determined by the BLR Director, private respondents Daya, et al., were prejudiced by the
disqualification order of the COMELEC. They endeavored to seek reconsideration, but the
COMELEC failed to act thereon.40 The COMELEC was also found to have refused to receive their
written protest.41 The foregoing facts sustain the finding that private respondents Daya, et al.,
were deprived of due process. Hence, it becomes incumbent upon private respondents Daya, et
al., to seek the aid of the BLR. To insist on the contrary is to render their exhaustion of remedies
within the union as illusory and vain.42 These antecedent circumstances convince this Court that
there was proper application by the Med-Arbiter of the exception to the rule of exhaustion of
administrative remedies, as affirmed by the BLR Director, and upheld by the Court of Appeals.
We cannot accept, and the Court of Appeals rightfully rejected, the contention of petitioners that
the private respondents Daya, et al.s complaint filed before the Med-Arbiter failed to comply
with the jurisdictional requirement because it was not supported by at least thirty percent (30%)
of the members of the union. Section 1 of Rule XIV of the Implementing Rules of Book V
mandates the thirty percent (30%) requirement only in cases where the issue involves the entire
membership of the union, which is clearly not the case before us. The issue is obviously limited
to the disqualification from participation in the elections by particular union members.
Having resolved the jurisdictional cobwebs in the instant case, it is now apt for this Court to
address the issue anent the disqualification of private respondents and the conduct of the 7 May
2003 elections.
On this matter, petitioners want this Court to consider the instant case as an exception to the
rule that the Supreme Court is not a trier of facts; hence, importuning that we make findings of
fact anew. It bears stressing that in a petition for review on certiorari, the scope of this Courts
judicial review of decisions of the Court of Appeals is generally confined only to errors of
law,43 and questions of fact are not entertained. We elucidated on our fidelity to this rule, and we
said:
Thus, only questions of law may be brought by the parties and passed upon by this Court in the
exercise of its power to review. Also, judicial review by this Court does not extend to a
reevaluation of the sufficiency of the evidence upon which the proper labor tribunal has based its
determination.44
It is aphoristic that a re-examination of factual findings cannot be done through a petition for
review on certiorari under Rule 45 of the Rules of Court because as earlier stated, this Court is
not a trier of facts; it reviews only questions of law. 45 The Supreme Court is not duty-bound to
analyze and weigh again the evidence considered in the proceedings below. 46 This is already
outside the province of the instant Petition for Certiorari. While there may be exceptions to this
rule, petitioners miserably failed to show why the exceptions should be applied here. With
greater force must this rule be applied in the instant case where the factual findings of the MedArbiter were affirmed by the BLR Director, and then, finally, by the Court of Appeals. The findings
below had sufficient bases both in fact and in law. The uniform conclusion was that private

respondents Daya, et al., were wrongfully disqualified by the COMELEC; consequently, the
FLAMES election should be annulled.
On the issue of disqualification, there was a blatant misapplication by the COMELEC of the
FLAMES CBL. As has been established ad nauseam, the provision 47 relied upon by the COMELEC
in disqualifying private respondents Daya, et al., applies to a case of expulsion of members from
the union.
In full, Article IV, Section 4 (a) (6) of the FLAMES CBL, provides, to wit:
Section 4(a). Any member may be DISMISSED and/or EXPELLED from the UNION, after due
process and investigation, by a two-thirds (2/3) vote of the Executive Board, for any of the
following causes:
xxxx
(6) Acting in a manner harmful to the interest and welfare of the UNION and/or its MEMBERS. 48
We highlight five points, thus:
First, Article IV, Section 4(a)(6) of the FLAMES CBL, embraces exclusively the case of dismissal
and/or expulsion of members from the union. Even a cursory reading of the provision does not
tell us that the same is to be automatically or directly applied in the disqualification of a
candidate from union elections, which is the matter at bar. It cannot be denied that the COMELEC
erroneously relied on Article IV, Section 4(a)(6) because the same does not contemplate the
situation of private respondents Daya, et al. The latter are not sought to be expelled or dismissed
by the Executive Board. They were brought before the COMELEC to be disqualified as candidates
in the 7 May 2003 elections.
Second, the aforecited provision evidently enunciates with clarity the procedural course that
should be taken to dismiss and expel a member from FLAMES. The CBL is succinct in stating that
the dismissal and expulsion of a member from the union should be after due process and
investigation, the same to be exercised by two-thirds (2/3) vote of the Executive Board for any of
the causes49 mentioned therein. The unmistakable directive is that in cases of expulsion and
dismissal, due process must be observed as laid down in the CBL.
Third, nevertheless, even if we maintain a lenient stance and consider the applicability of Article
IV, Section 4(a)(6) in the disqualification of private respondents Daya, et al., from the elections of
7 May 2003, still, the disqualification made by the COMELEC pursuant to the subject provision
was a rank disregard of the clear due process requirement embodied therein. Nowhere do we
find that private respondents Daya, et al. were investigated by the Executive Board. Neither do
we see the observance of the voting requirement as regards private respondents Daya, et al. In
all respects, they were denied due process.1avvphi1
Fourth, the Court of Appeals, the BLR Director, and the Med-Arbiter uniformly found that due
process was wanting in the disqualification order of the COMELEC. We are in accord with their
conclusion. If, indeed, there was a violation by private respondents Daya, et al., of the FLAMES
CBL that could be a ground for their expulsion and/or dismissal from the union, which in turn
could possibly be made a ground for their disqualification from the elections, the procedural
requirements for their expulsion should have been observed. In any event, therefore, whether
the case involves dismissal and/or expulsion from the union or disqualification from the elections,
the proper procedure must be observed. The disqualification ruled by the COMELEC against
private respondents Daya, et al., must not be allowed to abridge a clear procedural policy
established in the FLAMES CBL. If we uphold the COMELEC, we are countenancing a clear case of
denial of due process which is anathema to the Constitution of the Philippines which safeguards

the right to due process.


Fifth, from another angle, the erroneous disqualification of private respondents Daya, et al.,
constituted a case of disenfranchisement on the part of the member-voters of FLAMES. By
wrongfully excluding them from the 7 May 2003 elections, the options afforded to the union
members were clipped. Hence, the mandate of the union cannot be said to have been rightfully
determined. The factual irregularities in the FLAMES elections clearly provide proper bases for
the annulment of the union elections of 7 May 2003.
On a final note, as it appears that the question of the qualifications of private respondents Ong,
et al. had been rendered moot and academic, 50 we do not find any reason for this Court to rule
on the matter. As borne out by the records, the question had been laid to rest even when the
case was still before the Med-Arbiter.51
WHEREFORE, the Petition is DENIED. The Decision of the Court of Appeals dated 17 June 2004,
and its Resolution dated 10 June 2005 in CA-G.R. SP No. 83061 are AFFIRMED. Costs against
petitioners.
SO ORDERED.
G.R. No. 97092 July 27, 1992
PEPSI-COLA SALES AND ADVERTISING UNION, petitioner,
vs.
HON. SECRETARY OF LABOR and ROBERTO ALISASIS, respondents.

NARVASA, C.J.:
In its Decision in G.R. No. 80587 (Wenphil Corporation v. NLRC), promulgated on February 8,
1989, 1 this Court 2laid down the doctrine governing an illegal dismissal case where the employee
satisfactorily establishes that his employment was terminated without due process i.e.,
without written notice to him of the charges against him and without according him opportunity
to defend himself personally or through a representative but the employer nevertheless
proves the existence of just cause for the employee's dismissal. The controlling principle in such
a case is that since the employee's dismissal was for just cause, he is entitled neither to
reinstatement or back wages nor separation pay or salaries for the unexpired portion of his
contract, being entitled only to the salaries earned up to the last day of employment; at the
same time, however, as a general proposition, the employer is obliged, on account of its failure
to comply with the requirements of due process in terminating the services of the employee, to
pay damages to the latter fixed at P1,000.00, a sum deemed adequate for the purpose.
This doctrine, which has since been reaffirmed by this Court, 3 applies in the case at bar, in
resolution of the issue of whether or not the private respondent, Roberto Alisasis, may be
considered to have been dismissed for just cause within the meaning of the charter papers
organizing and governing a mutual aid program of which he was a participant.
From 1964 until sometime about 1985, Alisasis was an employee of the Pepsi-Cola Bottling Co.,
Inc. and later, of the Pepsi-Cola Products (Philippines) Inc., after the latter had bought out the
former. 4 He was also a member of the labor organization of all regular route and truck salesmen
and truck helpers of the company the Pepsi Cola Sales & Advertising Union (PSAU) from
June 1, 1965 up to the termination of his employment in 1985. 5 As a member of the PSAU, he
was also a participant in the "Mutual Aid Plan" set up by said union sometime in 1980. During the
entire period of his employment, there were regularly deducted from his wages the amounts

corresponding to union dues as well as contributions to the fund of the Mutual Aid Plan.

On May 7, 1986, Alisasis filed with the NLRC Arbitration Branch, Capital Region, Manila, a
complaint for illegal dismissal against Pepsi-Cola, Inc. 7 This resulted in a judgment by the Labor
Arbiter dated January 25, 1988 declaring him to have been illegally dismissed and ordering the
employer to reinstate him "to his former position without loss of seniority rights and with full
backwages for one (1) year from the time he was not allowed to report for
work . . ." 8 The judgment was subsequently affirmed with modification. by the Fourth Division of
the NLRC dated December 29, 1989, 9 disposing of the appeal as follows: 10
In view therefore of the foregoing considerations, the decision appealed from is
hereby modified in the sense that the order for respondent to reinstate complainant
is hereby set aside. The rest of the decision shall stand.
The deletion of the relief of reinstatement was justified by the NLRC in the following manner:

11

Certainly, with the actuations of complainant, respondent had ample reason or


enough basis then to lose trust and confidence in him. Complainant, being a
salesman, should be considered to have occupied a position of responsibility so
that, if respondent had lost trust and confidence in him, the former could validly and
legally terminate the services of the latter (Lamaan Trading, Inc. vs. Leodegario, Jr.,
G.R. 73245, September 30, 1986).
However, although there was valid and lawful cause in the dismissal of complainant
by respondent, the manner in which it was effected was not in accordance with law.
Complainant was not given written notice by respondent but was only verbally
advised, thru its Field Sales Manager, sometime in May 1985 that he should not
report for work anymore, obviously, because there was a charge against him.
And this is what makes the dismissal of complainant arbitrary and illegal for failure
to comply with the notice requirement under Batas Pambansa Blg. 130 on
termination of employees.
Ordinarily, when the dismissal of an employee is declared unjustified or illegal, he is
entitled to reinstatement and backwages (Art. 279 of the Labor Code). However, in
the instant case, considering that respondent had already lost trust and confidence
in complainant which is founded on a reasonable ground, as discussed earlier, there
is no point in requiring respondent to reinstate complainant to his former
position. To do so would be tantamount to compelling the management to employ
someone whom it can no longer trust, which is oppressive.
It appears that both Alisasis and Pepsi-Cola, Inc. accepted the NLRC's verdict and complied
therewith; that Pepsi-Cola gave Alisasis back wages for one (1) year; and that, Alisasis issued the
corresponding quitclaim and considered himself separated from his employment.
Alisasis thereafter asked his labor organization, PSAU, to pay him monetary benefits in
accordance with Section 3, Article X of the "Amended By-Laws of the Mutual Aid Plan of the
Pepsi-Cola Sales & Advertising Union (U.O.E.F.), 12 in an amount equal to "One (P1.00) Peso per
year of service multiplied by the number of member(s) . . ." 13 PSAU demurred, invoking in its
turn Section 1, Article XII of the same amended by-laws, declaring as disqualified from any
entitlement to the PLAN and . . (from any) Benefit or return of contributions . . under any
circumstances," inter alia, "(a)ny member dismissed for cause." 14
Alisasis thereupon filed a complaint against the union, PSAU, with the Med Arbitration Unit,
National Capital Region, Department of Labor and Employment, to compel the latter to pay him
his claimed benefits. 15 The principal defenses alleged by PSAU were that Alisasis was disqualified

to claim any benefits under the Mutual Aid Plan, supra; and that the Med-Arbiter had no original
jurisdiction over the case since Alisasis' claim for financial assistance was not among the cases
cognizable by Med-Arbiters under the law "such as representation cases, internal union and interunion disputes . . (or) a violation of the union's constitution and by-laws and the rights and
conditions of membership in a labor organization." 16 After due proceedings, the Med-Arbiter
promulgated an Order on April 16, 1990, ruling that he had jurisdiction and "ordering
respondent . . (PSAU) to pay complainant Roberto Alisasis . . his claim for financial assistance
under the Mutual Aid Fund of the union." PSAU appealed to the Secretary of Labor and
Employment who, by Resolution dated July 25, 1990, denied the appeal but reduced the MedArbiter's award from P18,669.00 to P17,886.00. 17 Nullification of the Med-Arbiter's Order of April
16, 1990 and the respondent Secretary's Resolution of July 25, 1990 is the prayer sought by the
petitioner in the special civil action of certiorari at bar.
Resolving first the issue of whether or not the case at bar is within the original jurisdiction of the
Med-Arbiter of the Bureau of Labor Relations, the Court holds that it is.
The jurisdiction of the Bureau of Labor Relations and its Divisions is set forth in the first
paragraph of Article 226 of the Labor Code, as amended, viz.:
Art. 226. Bureau of Labor Relations. The Bureau of Labor Relations and the Labor
Relations Divisions in the regional offices of the Department of Labor shall have
original and exclusive authority to act, at their own initiative or upon request of
either or both parties, on all inter-union and intra-union conflicts, and all disputes,
grievances or problems arising from or affecting labor management relations in all
workplaces whether agricultural or non-agricultural, except those arising from the
implementation or interpretation of collective bargaining agreements which shall be
the subject of grievance procedure and/or voluntary arbitration.
xxx xxx xxx
It is evident that the case at bar does not concern a dispute, grievance or problem "arising from
or affecting labor-management relations." So, if it is to be deemed as coming within the MedArbiter's jurisdiction, it will have to be as either an "intra-union" or "inter-union" conflict.
No definition is given by law of these precise terms, "intra-union and inter-union conflicts." It is
known, however, that "intra-" and "inter-" are both combining forms, prefixes the first, "intra-,"
meaning "within, inside of [intramural, intravenous];" and the other, "inter-, denoting "1.
between or among: the second element is singular in form [interstate] 2. with or on each other
(or one another), together, mutual, reciprocal, mutually, or reciprocally [interact]." 18 An intraunion conflict would therefore refer to a conflict within or inside a labor union conflict would
therefore refer to a conflict within or inside a labor union, and an inter-union controversy or
dispute, one occurring or carried on between or among unions. In this sense, the controversy
between Alisasis and his union, PSAU respecting the former's rights under the latter's "Mutual
Aid Plan" would be an intra-union conflict under Article 226 of the Labor Code and hence,
within the exclusive, original jurisdiction of the Med-Arbiter of the Bureau of Labor Relations
whose decision, it may additionally be mentioned, is appealable to the Secretary of Labor.
Certainly, said controversy is not one of those within the jurisdiction of the Labor Arbiters in
accordance with Article 217 of the Code, it not being an unfair labor practice case, or a
termination dispute, or one involving wages, rates of pay, hours of work and other terms and
conditions of employment (which is "accompanied with a claim for reinstatement"), or one for
damages arising from the employer-employee relations, or one for a violation of Article 264 of
the Code, or any other claim arising from employer-employee relations, or from the interpretation
or implementation of a collective bargaining agreement or of company personnel policies.

The second issue relates to the character of Alisasis' dismissal from employment. The Court
holds that Alisasis had indeed been "dismissed for cause." His employer had established this
factual proposition by competent evidence to the satisfaction of both the Labor Arbiter and the
National Labor Relations Commission. In the Latter's view, and in its own words, "Certainly, with
the actuations of complainant, . . (Alisasis' employer) had ample reason or enough basis to lose
trust and confidence in him . . . considering that (said employer) had already lost trust and
confidence in complainant which is founded on a reasonable ground, as discussed earlier, (and
therefore) there is no point in requiring respondent to reinstate complainant to his former
position . . (as to) do so would be tantamount to compelling the management to employ
someone whom it can no longer trust, which is oppressive."
It was merely "the manner in which such a dismissal from employment was effected . . (that was
deemed as) not in accordance with law, (there having been) failure to comply with the notice
requirement under Batas Pambansa Blg. 130 on termination of employees." That imperfection is,
however, a circumstance quite distinct from the existence of what the NLRC has clearly and
expressly conceded to be a "valid and lawful cause in the dismissal of complainant by
respondent." And this is precisely the reason why, as already pointed out, the NLRC declined to
accord to Alisasis all the remedies or reliefs usually attendant upon an illegal termination of
employment e.g., reinstatement, award of damages although requiring payment by the
employer of the sum of P1,000.00 simply on account of its failure "to comply with the notice
requirement under Batas Pambansa Blg. 130 on termination of employees." The situation is on all
fours with that in the Wenphil Corporation Case, 19 cited in this opinion's opening paragraph, in
which the following pronouncements, among others, were made:
Thus in the present case, where the private respondent, who appears to be of
violent temper, caused trouble during office hours and even defied his superiors as
they tried to pacify him, should not be rewarded with re-employment and back
wages. It may encourage him to do even worse and will render a mockery of the
rules of discipline that employees are required to observe. Under the
circumstances the dismissal of the private respondent for just cause should be
maintained. He has no right to return to his former employer.
However, the petitioner (employer) must nevertheless be held to account for failure
to extend to private respondent his right to an investigation before causing his
dismissal. . . Thus, it must be imposed a sanction for its failure to give a formal
notice and conduct an investigation as required by law before dismissing . .
(respondent) from employment. Considering the circumstances of this
casepetitioner (employer) must indemnify the private respondent (employee) the
amount of P1,000.00. The measure of this award depends on the facts of each case
and the gravity of the omission committed by the employer.
The petitioner union (PSAU) was therefore quite justified in considering Alisasis as a "member
dismissed for cause," and hence disqualified under its amended by-laws to claim any "Benefit or
return of contributions . . under any circumstances, . . ." The ruling to the contrary of the MedArbiter and the Secretary of Labor and Employment must thus be set aside as tainted with grave
abuse of discretion.
WHEREFORE, the petition is granted and the writ of certiorari prayed for issued, NULLIFYING and
SETTING ASIDE the challenged Order of the Med-Arbiter dated April 16, 1990 and the Resolution
of the respondent Secretary of Labor and Employment dated July 25, 1990, and DIRECTING THE
DISMISSAL of Alisasis' complaint in NLRC Case No. NCR-Od-M-90-01-037, without pronouncement
as to costs.
SO ORDERED.

G.R. No. 131374

January 26, 2000

ABBOTT LABORATORIES PHILIPPINES, INC., petitioner,


vs.
ABBOTT LABORATORIES EMPLOYEES UNION, MR. CRESENCIANO TRAJANO, in his
capacity as Acting Secretary of The Department Labor and of Employment and MR.
BENEDICTO ERNESTO BITONIO, JR., in his capacity as Director IV of the Bureau of
Labor Relations, respondents.
DAVIDE, JR., C.J.:
This special civil action for certiorari mandamus assails the action of the then Acting Secretary of
Labor and Employment Creseciano B. Trajano contained in its letter dated 19 September
1997,1 informing petitioner Abbott Laboratories Philippines, Inc. (hereafter ABBOTT), thru its
counsel that the Office of the Secretary of Labor cannot act on ABBOTT's appeal from the
decision of 31 March 19972 and the Order of 9 July 19973 of the Bureau of Labor Relations, for
lack of appellate jurisdiction.
ABBOTT is a corporation engaged in the manufacture and distribution of pharmaceutical drugs.
On 22 February 1996,4 the Abbott Laboratories Employees Union (hereafter ALEU) represented
by its president, Alvin B. Buerano, filed an application for union registration in the Department of
Labor and Employment. ALEU alleged in the application that it is a labor organization with
members consisting of 30 rank-and-file employees in the manufacturing unit of ABBOTT and that
there was no certified bargaining agent in the unit it sought to represent, namely, the
manufacturing unit.
On 28 February 1996,5 application was approved by the Bureau of Labor Relations, which in due
course issued Certificate of Registration No. NCR-UR-2-1638-96. Consequently, ALEU became a
legitimate labor organization.
On 2 April 1996,6 ABBOTT filed a petition for cancellation of the Certificate of Registration No.
NCR-UR-2-1638-96 in the Regional Office of the Bureau of Labor Relations. This case was
docketed as Case No. OD-M-9604-006. ABBOTT assailed the certificate of registration since
ALEU's application was not signed by at least 20% of the total 286 rank-and-file employees of the
entire employer unit; and that it omitted to submit copies of its books of account.
On 21 June 1996,7 the Regional Director of the Bureau of Labor Relations decreed the
cancellation of ALEU's registration certificate No. NCR-UR-11-1585-95.8 In its decision, the
Regional Director adopted the 13 June 19969findings and recommendations of the Med-Arbiter. It
ruled that the union has failed to show that the rank-and-file employees in the manufacturing
unit of ABBOTT were bound by a common interest to justify the formation of a bargaining unit
separate from those belonging to the sales and office staff units. There was, therefore, sufficient
reason to assume that the entire membership of the rank-and-file consisting of 286 employees or
the "employer unit" make up the appropriate bargaining unit. However, it was clear on the record
that the union's application for registration was supported by 30 signatures of its members or
barely constituting 10% of the entire rank-and-file employees of ABBOTT. Thus the Regional
Director found that for ALEU's failure to satisfy the requirements of union registration under
Article 234 of the Labor Code, the cancellation of its certificate of registration was in order.
Forthwith, on 19 August 1996,10 ALEU appealed said cancellation to the Office of the Secretary of
Labor and Employment, which referred the same to the Director of the Bureau of the Labor
Relations. The said appeal was docketed as Case No. BLR-A-10-25-96.
On 31 March 1997,11 The Bureau of Labor Relations rendered judgment reversing the 21 June
1996 decision of the Regional Director, thus:

WHEREFORE, the appeal is GRANTED and the decision of the Regional Director dated 21
June 1996 is hereby REVERSED. Abbott Laboratories Employees Union shall remain in the
roster of legitimate labor organizations, with all the rights, privilege and obligations
appurtenant thereto.12
It gave the following reasons to justify the reversal: (1) Article 234 of the Labor Code does not
require an applicant union to show proof of the "desirability of more than one bargaining unit
within an employer unit," and the absence of such proof is not a ground for the cancellation of a
union's registration pursuant to Article 239 of Book V, Rule II of the implementing rules of the
Labor Code; (2) the issue pertaining to the appropriateness of a bargaining unit cannot be raised
in a cancellation proceeding but may be treshed out in the exclusion-inclusion process during a
certification election; and (3) the "one-bargaining unit, one-employer unit policy" must not be
interpreted in a manner that shall derogate the right of the employees to self-organization and
freedom of association as guaranteed by Article III, Section 8 of the 1987 Constitution and Article
II of the International Labor Organization's Convention No. 87.
Its motion to reconsider the 31 March 1997 decision of the Bureau of Labor Relations having
been denied for lack of merit in the Order13 of 9 July 1997, ABBOTT appealed to the Secretary of
Labor and Employment. However, in its letter dated 19 September 1997, 14 addressed to
ABBOTT's counsel, the Secretary of Labor and Employment refused to act on ABBOTT's appeal on
the ground that it has no jurisdiction to review the decision of the Bureau of Labor Relations on
appeals in cancellation cases emanating from the Regional Offices. The decision of the Bureau of
Labor Relations therein is final and executory under Section 4, Rule III, Book V of the Rules and
Regulations Implementing the Labor Code, as amended by Department Order No. 09, s. of 1997.
Finally, the Secretary stated:
It has always been the policy of this Office that pleadings denominated as appeal thereto
over decisions of the BLR in cancellation cases coming from the Regional offices are
referred back to the BLR, so that the same may be treated as motions for reconsideration
and disposed of accordingly. However, since your office has already filed a motion for
reconsideration with the BLR which has been denied in its Order dated 09 July 1997, your
recourse should have been a special civil action for certiorari with the Supreme Court.
In view of the foregoing, please be informed that the Office of the Secretary cannot act
upon your Appeal, except to cause the BLR to include it in the records of the case.
Hence, this petition. ABBOTT, premised its argument on the authority of the Secretary of Labor
and Employment to review the decision of the Bureau of Labor Relations and at the same time
raised the issue on the validity of ALEU's certificate of registration.
We find no merit in this petition.
At the outset, it is worthy to note that the present petition assails only the letter of the then
Secretary of Labor & Employment refusing to take cognizance of ABBOTT's appeal for lack of
appellate jurisdiction. Hence, in the resolution of the present petition, it is just appropriate to
limit the issue on the power of the Secretary of Labor and Employment to review the decisions of
the Bureau of Labor Relations rendered in the exercise of its appellate jurisdiction over decisions
of the Regional Director in cases involving cancellations of certificates of registration of labor
unions. The issue anent the validity of ALEU's certificate of registration is subject of the Bureau of
Labor Relations decision dated 31 March 1997. However, said decision is not being assailed in
the present petition; hence, we are not at liberty to review the same.1wphi1.nt
Contrary to ABBOTT's contention, there has been no grave abuse of discretion on the part of the
Secretary of Labor and Employment. Its refusal to take cognizance of ALEU's appeal from the
decision of the Bureau of Labor Relations is in accordance with the provisions of Rule VIII, Book V

of the Omnibus Rules Implementing the Labor Code as amended by Department Order No.
09.15 The rule governing petitions for cancellation of registration of any legitimate labor
organization or worker association, as it now stands, provides:
Sec. 1. Venue of Action. If the respondent to the petition is a local/chapter, affiliate, or a
workers' association with operations limited to one region, the petition shall be filed with
the Regional Office having jurisdiction over the place where the respondent principally
operates. Petitions filed against federations, national or industry unions, trade union
centers, or workers' associations operating in more than one regional jurisdiction, shall be
filed with the Bureau.
Sec. 3. Cancellation of registration; nature and grounds. Subject to the requirements of
notice and due process, the registration of any legitimate labor organization or worker's
association may be cancelled by the Bureau or the Regional Office upon the filing of an
independent petition for cancellation based on any of the following grounds:
(a) Failure to comply with any of the requirements prescribed under Articles 234,
237 and 238 of the Code;
(b) Violation of any of the provisions of Article 239 of the Code;
(b) Commission of any of the acts enumerated under Article 241 of the Code;
provided, that no petition for cancellation based on this ground may be granted
unless supported by at least thirty percent (30%) of all the members of the
respondent labor organization or workers' association.
Sec. 4. Action on the petition; appeals. The Regional or Bureau Director, as the case
may be, shall have thirty (30) days from submission of the case for resolution within which
to resolve the petition. The decision of the Regional or Bureau Director may be appealed to
the Bureau or the Secretary, as the case may be, within ten (10) days from receipt thereof
by the aggrieved party on the ground of grave abuse of discretion or any violation of these
Rules.
The Bureau or the Secretary shall have fifteen (15) days from receipt of the records of the
case within which to decide the appeal. The decision of the Bureau or the Secretary shall
be final and executory.
Clearly, the Secretary of Labor and Employment has no jurisdiction to entertain the appeal of
ABBOTT. The appellate jurisdiction of the Secretary of Labor and Employment is limited only to a
review of cancellation proceedings decided by the Bureau of labor Relations in the exercise of its
exclusive and original jurisdiction. The Secretary of Labor and Employment has no jurisdiction
over decisions of the Bureau of Labor Relations rendered in the exercise of its appellate power to
review the decision of the Regional Director in a petition to cancel the union's certificate of
registration, said decisions being final and inappealable.16 We sustain the analysis and
interpretation of the OSG on this matter, to wit:
From the foregoing, the Office of the Secretary correctly maintained that it cannot take
cognizance of petitioner's appeal from the decision of BLR Director Bitonio. Sections 7 to
917 [of the implementing Rules of the Labor Code] thus provide for two situations:
(1) The first situation involves a petition for cancellation of union registration which
is filed with aRegional Office. A decision of a Regional Office cancelling a union's
certificate of registration may be appealed to the BLR whose decision on the matter
shall be final and inappealable.

(2) The second situation involves a petition for cancellation of certificate of union
registration which is filed directly with the BLR. A decision of the BLR cancelling a
union's certificate of registration may be appealed to the Secretary of Labor whose
decision on the mater shall be final and inappealable.
Respondent Acting Labor Secretary's ruling that the BLR's decision upholding the
validity of respondent union's certificate of registration is final and inappealable is thus
in accordance with aforequoted Omnibus Rules because the petition for cancellation of
union registration was filed by petitioner with a Regional Office, specifically, with the
Regional Office of the BLR, National Capital Region (vide pp. 1-2, Annex 2, Petition). The
cancellation proceedings initiated by petitioner before the Regional Office is covered by
the first situation contemplated by Sections 7 to 9 of the Omnibus Rules. Hence, an appeal
from the decision of the Regional Office may be brought to the BLR whose decision on the
matter is final and inappealable.
In the instant case, upon the cancellation of respondent union's registration by the
Regional Office, respondent union incorrectly appealed said decision to the Office of the
Secretary. Nevertheless, this situation was immediately rectified when the Office of the
Secretary motu propio referred the appeal to the BLR. However, upon reversal by the BLR
of the decision of the Regional Office cancelling registration, petitioner should have
immediately elevated the BLR decision to the Supreme Court in a special civil action
for certiorari under Rule 65 of the Rules of Court.
Under Sections 3 and 4, Rule VIII of Book V of the Rules and Regulations implementing the
Labor Code, as amended by Department Order No. 09, petitions for cancellation of union
registration may be filed with a Regional office, or directly, with the Bureau of Labor
Relations. Appeals from the decision of a Regional Director may be filed with the BLR
Director whose decision shall be final and executory. On the other hand, appeals from the
decisions of the BLR may be filed with the Secretary of Labor whose decision shall be final
and executory.
Thus, under Sections 7 to 9 of the Omnibus Rules and under Sections 3 and 4 of the
Implementing Rules (as amended by Department Order No. 09), the finality of the BLR
decision is dependent on whether or not the petition for cancellation was filed with the
BLR directly. Under said Rules, if the petition for cancellation is directly filed with the BLR,
its decision cancelling union registration is not yet final and executory as it may still be
appealed to the Office of the Secretary. However, if the petition for cancellation was filed
with the Regional Office, the decision of the BLR resolving an appeal of the decision of said
Regional Office is final and executory.18
It is clear then that the Secretary of Labor and Employment did not commit grave abuse of
discretion in not acting an ABBOTT's appeal. The decisions of the Bureau of Labor Relations on
cases brought before it on appeal from the Regional Director are final and executory. Hence, the
remedy of the aggrieved party is to seasonably avail of the special civil action of certiorari under
Rule 65 of the Rules of Court. 19
Even if we relaxed the rule and consider the present petition as a petition for certiorari not only
of the letter of the Secretary of Labor and Employment but also of the decision of the Bureau of
the Labor Relations which overruled the order of cancellation of ALEU's certificate registration,
the same would still be dismissable for being time-barred. Under Sec. 4 of Rule 65 of the 1997
Revised Rules of Court the special civil action for certiorari should be instituted within a period of
sixty (60) days from notice of the judgment, order or resolution sought to be assailed. ABBOTT
received the decision of the Bureau of Labor Relations on 14 April 1997 and the order denying its
motion for reconsideration of the said decision on 16 July 1997. The present petition was only
filed on 28 November 1997, after the lapse of more than four months. Thus, for failure to avail of

the correct remedy within the period provided by law, the decision of the Bureau of Labor
Relations has become final and executory.
WHEREFORE, the petition is DENIED. The challenged order in BLR-A-10-25-96 of the Secretary of
Labor and Employment embodied in its 19 September letter is hereby AFFIRMED.
SO ORDERED.