Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 120567 March 20, 1998

PHILIPPINE AIRLINES, INC., petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION, FERDINAND PINEDA and GOGFREDO
CABLING, respondents.

MARTINEZ, J.:

Can the National Labor Relations Commission (NLRC), even without a complaint for illegal
dismissal tiled before the labor arbiter, entertain an action for injunction and issue such writ
enjoining petitioner Philippine Airlines, inc. from enforcing its Orders of dismissal against private
respondents, and ordering petitioner to reinstate the private respondents to their previous
positions?

This is the pivotal issue presented before us in this petition for certiorari under Rule 65 of the
Revised Rules of Court which seeks the nullification of the injunctive writ dated April 3, 1995
issued by the NLRC and the Order denying petitioner's motion for reconsideration on the ground
that the said Orders were issued in excess of jurisdiction.

Private respondents are flight stewards of the petitioner. Both were dismissed from the service for
their alleged involvement in the April 3, 1993 currency smuggling in Hong Kong.

Aggrieved by said dismissal, private respondents filed with the NLRC a petition1 for injunction
praying that:

I. Upon filing of this Petition, a temporary restraining order be issued, prohibiting

respondents (petitioner herein) from effecting or enforcing the Decision dated
Feb. 22, 1995, or to reinstate petitioners temporarily while a hearing on the
propriety of the issuance of a writ of preliminary injunction is being undertaken;

II. After hearing, a writ of preliminary mandatory injunction be issued ordering

respondent to reinstate petitioners to their former positions pending the hearing
of this case, or, prohibiting respondent from enforcing its Decision dated
February 22, 1995 while this case is pending adjudication;

III. After hearing, that the writ of preliminary injunction as to the reliefs sought for
be made permanent, that petitioners be awarded full backwages, moral damages
of PHP 500,000.00 each and exemplary damages of PHP 500,000.00 each,
attorney's fees equivalent to ten percent of whatever amount is awarded, and the
costs of suit.
On April 3, 1995, the NLRC issued a temporary mandatory injunction 2 enjoining petitioner to
cease and desist from enforcing its February 22, 1995 Memorandum of dismissal. In granting the
writ, the NLRC considered the following facts, to wit:

. . . that almost two (2) years ago, i.e. on April 15, 1993, the petitioners were
instructed to attend an investigation by respondent's "Security and Fraud
Prevention Sub-Department" regarding an April 3, 1993 incident in Hongkong at
which Joseph Abaca, respondent's Avionics Mechanic in Hongkong "was
intercepted by the Hongkong Airport Police at Gate 05 . . . the ramp area of the
Kai Tak International Airport while . . . about to exit said gate carrying a . . . bag
said to contain some 2.5 million pesos in Philippine Currencies. That at the
Police Station. Mr. Abaca claimed that he just found said plastic bag at the
Skybed Section of the arrival flight PR300/03 April 93," where petitioners served
as flight stewards of said flight PR300; . . the petitioners sought "a more detailed
account of what this HKG incident is all about"; but instead, the petitioners were
administratively charged, "a hearing" on which "did
not push through" until almost two (2) years after, i.e, "on January 20, 1995 . . .
where a confrontation between Mr. Abaca and petitioners herein was
compulsorily arranged by the respondent's disciplinary board" at which hearing,
Abaca was made to identify petitioners as co-conspirators; that despite the fact
that the procedure of identification adopted by respondent's Disciplinary Board
was anomalous "as there was no one else in the line-up (which could not be
called one) but petitioners . . . Joseph Abaca still had difficulty in identifying
petitioner Pineda as his co-conspirator, and as to petitioner Cabling, he was
implicated and pointed by Abaca only after respondent's Atty. Cabatuando
pressed the former to identify petitioner Cabling as co-conspirator"; that with the
hearing reset to January 25, 1995, "Mr. Joseph Abaca finally gave exculpating
statements to the board in that he cleared petitioners from any participation or
from being the owners of the currencies, and at which hearing Mr. Joseph Abaca
volunteered the information that the real owner of said money was one who
frequented his headquarters in Hongkong to which information, the Disciplinary
Board Chairman, Mr. Ismael Khan," opined "for the need for another hearing to
go to the bottom of the incident"; that from said statement, it appeared "that Mr.
Joseph Abaca was the courier, and had another mechanic in Manila who hid the
currency at the plane's skybed for Abaca to retrieve in Hongkong, which findings
of how the money was found was previously confirmed by Mr. Joseph Abaca
himself when he was first investigated by the Hongkong authorities"; that just as
petitioners "thought that they were already fully cleared of the charges, as they
no longer received any summons/notices on the intended "additional hearings"
mandated by the Disciplinary Board," they were surprised to receive "on
February 23, 1995. . . a Memorandum dated February 22, 1995" terminating their
services for alleged violation of respondent's Code of Discipline "effective
immediately"; that sometime . . . first week of March, 1995, petitioner Pineda
received another Memorandum from respondent Mr. Juan Paraiso, advising him
of his termination effective February 3, 1995, likewise for violation of
respondent's Code of Discipline; . . .

In support of the issuance of the writ of temporary injunction, the NLRC adapted the view that: (1)
private respondents cannot be validly dismissed on the strength of petitioner's Code of Discipline
which was declared illegal by this Court in the ease at PAL, Inc. vs. NLRC, (G.R. No. 85985),
promulgated August 13, 1993, for the reason that it was formulated by the petitioner without the
participation of its employees as required in R.A. 6715, amending Article 211 of the Labor Code;
(2) the whimsical, baseless and premature dismissals of private respondents which "caused them
grave and irreparable injury" is enjoinable as private respondents are left "with no speedy and
adequate remedy at law" except the issuance of a temporary mandatory injunction; (3) the NLRC
is empowered under Article 218 (e) of the Labor Code not only to restrain any actual or
threatened commission of any or all prohibited or unlawful acts but also to require the
performance of a particular act in any labor dispute, which, if not restrained or performed
forthwith, may cause grave or irreparable damage to any party; and (4) the temporary power of
the NLRC was recognized by this Court in the case of Chemo-Technische Mfg., Inc. Employees
Union, DFA, et. al. vs. Chemo-Technische Mfg., Inc. [G.R. No. 107031, January 25, 1993].

On May 4, 1995, petitioner moved for reconsideration3 arguing that the NLRC erred:

1. . . . in granting a temporary injunction order when it has no

jurisdiction to issue an injunction or restraining order since this
may be issued only under Article 218 of the Labor Code if the
case involves or arises from labor disputes;

2. . . . in granting a temporary injunction order when the

termination of private respondents have long been carried out;

3. . . . in ordering the reinstatement of private respondents on the

basis of their mere allegations, in violation of PAL's right to due
process:

4. . . . in arrogating unto itself management prerogative to

discipline its employees and divesting the labor arbiter of its
original and exclusive jurisdiction over illegal dismissal cases;

5. . . . in suspending the effects of termination when such action

is exclusively within the jurisdiction of the Secretary of Labor;

6. . . . in issuing the temporary injunction in the absence of any

irreparable or substantial injury to both private respondents.

On May 31, 1995, the NLRC denied petitioner's motion for reconsideration, ruling:

"The respondent (now petitioner), for one, cannot validly claim that we cannot
exercise our injunctive power under Article 218 (e) of the Labor Code on the
pretext that what we have here is not a labor dispute as long as it concedes that
as defined by law, a" (l) "Labor Dispute" includes any controversy or matter
concerning terms or conditions of employment." If security of tenure, which has
been breached by respondent and which, precisely, is sought to be protected by
our temporary mandatory injunction (the core of controversy in this case) is not a
"term or condition of employment", what then is?

xxx xxx xxx

Anent respondent's second argument . . . . Article 218 (e) of the Labor Code . . .
empowered the Commission not only to issue a prohibitory injunction, but a
mandatory ("to require the performance") one as well. Besides, as earlier
discussed, we already exercised (on August 23, 1991) this temporary mandatory
injunctive power in the case of "Chemo-Technische Mfg., Inc. Employees Union-
DFA et. al. vs. Chemo-Technische Mfg., Inc., et. al." (supra) and effectively
enjoined one (1) month old dismissals by Chemo-Technische and that our
aforesaid mandatory exercise of injunctive power, when questioned through a
 petition for certiorari, was sustained by the Third Division of the Supreme court
per its Resolution dated January 25, 1993.

xxx xxx xxx

Respondent's fourth argument that petitioner's remedy for their dismissals is "to
file an illegal dismissal case against PAL which cases are within the original and
exclusive jurisdiction of the Labor Arbiter' is ignorant. In requiring as a condition
for the issuance of a "temporary or permanent injunction" "(4) That
complainant has no adequate remedy at law;" Article 218 (e) of the Labor Code
clearly envisioned adequacy, and not plain availability of a remedy at law as an
alternative bar to the issuance of an injunction. An illegal dismissal suit (which
takes, on its expeditious side, three (3) years before it can be disposed of) while
available as a remedy under Article 217 (a) of the Labor Code, is certainly not an
"adequate; remedy at law, Ergo, it cannot as an alternative remedy, bar our
exercise of that injunctive power given us by Article 218 (e) of the Code.

xxx xxx xxx

Thus, Article 218 (e), as earlier discussed [which empowers this Commission "to
require the performance of a particular act" (such as our requiring respondent "to
cease and desist from enforcing" its whimsical memoranda of dismissals and
"instead to reinstate petitioners to their respective position held prior to their
subject dismissals") in "any labor dispute which, if not . . . performed forthwith,
may cause grave and irreparable damage to any party"] stands as the sole
"adequate remedy at law" for petitioners here.

Finally, the respondent, in its sixth argument claims that even if its acts of
dismissing petitioners "may be great, still the same is capable of compensation",
and that consequently, "injunction need not be issued where adequate
compensation at law could be obtained". Actually,
what respondent PAL argues here is that we need not interfere in its whimsical
dismissals of petitioners as, after all, it can pay the latter its backwages. . . .

But just the same, we have to stress that Article 279 does not speak alone of
backwages as an obtainable relief for illegal dismissal; that reinstatement as well
is the concern of said law, enforceable when necessary, through Article 218 (e)
of the Labor Code (without need of an illegal dismissal suit under Article 217 (a)
of the Code) if such whimsical and capricious act of illegal dismissal will "cause
grave or irreparable injury to a party". . . . .4

Hence, the present recourse.

Generally, injunction is a preservative remedy for the protection of one's substantive rights or
interest. It is not a cause of action in itself but merely a provisional remedy, an adjunct to a main
suit. It is resorted to only when there is a pressing necessity to avoid injurious consequences
which cannot be remedied under any standard of compensation. The application of the injunctive
writ rests upon the existence of an emergency or of a special reason before the main case be
regularly heard. The essential conditions for granting such temporary injunctive relief are that the
complaint alleges facts which appear to be sufficient to constitute a proper basis for injunction
and that on the entire showing from the contending parties, the injunction is reasonably
necessary to protect the legal rights of the plaintiff pending the litigation.5 Injunction is also a
special equitable relief granted only in cases where there is no plain, adequate and complete
remedy at law.6
In labor cases, Article 218 of the Labor Code empowers the NLRC

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

prohibited or unlawful acts or to require the performance of a particular act in any
labor dispute which, if not restrained or performed forthwith, may cause grave or
irreparable damage to any party or render ineffectual any decision in favor of
such party; . . ." (Emphasis Ours)

Complementing the above-quoted provision, Sec. 1, Rule XI of the New Rules of Procedure of
the NLRC, pertinently provides as follows:

Sec. 1. Injunction in Ordinary Labor Dispute. A preliminary injunction or a

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

xxx xxx xxx

The foregoing ancillary power may be exercised by the Labor Arbiters only as an
incident to the cases pending before them in order to preserve the rights of the
parties during the pendency of the case, but excluding labor disputes involving
strikes or lockout. 7 (Emphasis Ours)

From the foregoing provisions of law, the power of the NLRC to issue an injunctive writ originates
from "any labor dispute" upon application by a party thereof, which application if not granted "may
cause grave or irreparable damage to any party or render ineffectual any decision in favor of such
party."

The term "labor dispute" is defined as "any controversy or matter concerning terms and
conditions of employment or the association or representation of persons in negotiating, fixing.
maintaining, changing, or arranging the terms and conditions of employment regardless of
whether or not the disputants stand in the proximate relation of employers and employees." 8

The term "controversy" is likewise defined as "a litigated question; adversary proceeding in a
court of law; a civil action or suit, either at law or in equity; a justiciable dispute."9

A "justiciable controversy" is "one involving an active antagonistic assertion of a legal right on one
side and a denial thereof on the other concerning a real, and not a mere theoretical question or
issue." 10

Taking into account the foregoing definitions, it is an essential requirement that there must first be
a labor dispute between the contending parties before the labor arbiter. In the present case, there
is no labor dispute between the petitioner and private respondents as there has yet been no
complaint for illegal dismissal filed with the labor arbiter by the private respondents against the
petitioner.

The petition for injunction directly filed before the NLRC is in reality an action for illegal dismissal.
This is clear from the allegations in the petition which prays for; reinstatement of private
respondents; award of full backwages, moral and exemplary damages; and attorney's fees. As
such, the petition should have been filed with the labor arbiter who has the original and exclusive
jurisdiction to hear and decide the following cases involving all workers, whether agricultural or
non-agricultural:

(1) Unfair labor practice;

(2) Termination disputes;

(3) If accompanied with a claim for reinstatement, those cases

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

(4) Claims for actual, moral, exemplary and other forms of

damages arising from the employer-employee relations;

(5) Cases arising from any violation of Article 264 of this Code,
including questions involving the legality of strikes and lockouts;
and

(6) Except claims for employees compensation, social security,

medicare and maternity benefits, all other claims arising from
employer- employee relations, including those of persons in
domestic or household service, involving an amount exceeding
five thousand pesos (P5,000.00), whether or not accompanied
with a claim for reinstatement. 11

The jurisdiction conferred by the foregoing legal provision to the labor arbiter is both original and
exclusive, meaning, no other officer or tribunal can take cognizance of, hear and decide any of
the cases therein enumerated. The only exceptions are where the Secretary of Labor and
Employment or the NLRC exercises the power of compulsory arbitration, or the parties agree to
submit the matter to voluntary arbitration pursuant to Article 263 (g) of the Labor Code, the
pertinent portions of which reads:

(g) When, in his opinion, there exists a labor dispute causing or likely to cause a
strike or lockout in an industry indispensable to the national interest, the
Secretary of Labor and Employment may assume jurisdiction over the dispute
and decide it or certify the same to the Commission for compulsory arbitration.
Such assumption or certification shall have the effect of automatically enjoining
the intended or impending strike or lockout as specified in the assumption or
certification order. If one has already taken place at the time of assumption or
certification, all striking or locked out employees shall immediately resume
operations and readmit all workers under the same terms and conditions
prevailing before the strike or lockout. The Secretary of Labor and Employment
or the Commission may seek the assistance of law enforcement agencies to
ensure compliance with this provision as well as with such orders as he may
issue to enforce the same.

On the other hand, the NLRC shall have exclusive appellate jurisdiction over all cases decided by
labor arbiters as provided in Article 217(b) of the Labor Code. In short, the jurisdiction of the
NLRC in illegal dismissal cases is appellate in nature and, therefore, it cannot entertain the
private respondents' petition for injunction which challenges the dismissal orders of petitioner.
Article 218(e) of the Labor Code does not provide blanket authority to the NLRC or any of its
divisions to issue writs of injunction, considering that Section 1 of Rule XI of the New Rules of
Procedure of the NLRC makes injunction only an ancillary remedy in ordinary labor disputes." 12
Thus, the NLRC exceeded its jurisdiction when it issued the assailed Order granting private
respondents' petition for injunction and ordering the petitioner to reinstate private respondents.

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

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

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

In the case at bar, the alleged injury which private respondents stand to suffer by reason of their
alleged illegal dismissal can be adequately compensated and therefore, there exists no
"irreparable injury," as defined above which would necessitate the issuance of the injunction
sought for. Article 279 of the Labor Code provides that an employee who is unjustly dismissed
from employment shall be entitled to reinstatement, without loss of seniority rights and other
privileges, and to the payment of full backwages, inclusive of allowances, and to other benefits or
their monetary equivalent computed from the time his compensation was withheld from him up to
the time of his actual reinstatement.

The ruling of the NLRC that the Supreme Court upheld its power to issue temporary mandatory
injunction orders in the case of Chemo-Technische Mfg., Inc. Employees Union-DFA, et. al. vs.
Chemo-Technische Mfg., Inc. et. al., docketed as G.R. No. 107031, is misleading. As correctly
argued by the petitioner, no such pronouncement was made by this Court in said case. On
January 25, 1993, we issued a Minute Resolution in the subject case stating as follows:

Considering the allegations contained, the issues raised and the arguments
adduced in the petition for certiorari, as well as the comments of both public and
private respondents thereon, and the reply of the petitioners to private
respondent's motion to dismiss the petition, the Court Resolved to DENY the
same for being premature.

It is clear from the above resolution that we did not in anyway sustain the action of the NLRC in
issuing such temporary mandatory injunction but rather we dismissed the petition as the NLRC
had yet to rule upon the motion for reconsideration filed by petitioner. Thus, the minute resolution
denying the petition for being prematurely filed.

Finally, an injunction, as an extraordinary remedy, is not favored in labor law considering that it
generally has not proved to be an effective means of settling labor disputes. 20 It has been the
policy of the State to encourage the parties to use the non-judicial process of negotiation and
compromise, mediation and arbitration. 21 Thus, injunctions may be issued only in cases of
extreme necessity based on legal grounds clearly established, after due consultations or hearing
and when all efforts at conciliation are exhausted which factors, however, are clearly absent in
the present case.

WHEREFORE, the petition is hereby GRANTED. The assailed Orders dated April 3, 1995 and
May 31, 1995, issued by the National Labor Relations Commission (First Division), in NLRC NCR
IC No. 000563-95, are hereby REVERSED and SET ASIDE.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 152611 August 5, 2003

LAND BANK OF THE PHILIPPINES, petitioner,

vs.
SEVERINO LISTANA, SR., respondent.

YNARES-SANTIAGO, J.:

This is a petition for review of the decision of the Court of Appeals in CA-G.R. SP No. 65276 dated
December 11, 2001,1 which annulled the Orders dated January 29, 2001 and April 2, 2001 of the Regional
Trial Court of Sorsogon, Sorsogon, Branch 51.2

Respondent Severino Listana is the owner of a parcel of land containing an area of 246.0561 hectares,
located in Inlagadian, Casiguran, Sorsogon, covered by Transfer Certificate of Title No. T-20193. He
voluntarily offered to sell the said land to the government, through the Department of Agrarian Reform
(DAR),3 under Section 20 of R.A. 6657, also known as the Comprehensive Agrarian Reform Law of 1988
(CARL). The DAR valued the property at P5,871,689.03, which was however rejected by the respondent.
Hence, the Department of Agrarian Reform Adjudication Board (DARAB) of Sorsogon commenced
summary administrative proceedings to determine the just compensation of the land.

On October 14, 1998, the DARAB rendered a Decision, the dispositive portion of which reads as follows:

WHEREFORE, taking into consideration the foregoing computation, the prior valuation made by
the Land Bank of the Philippines is hereby set aside and a new valuation in the amount of TEN
MILLION NINE HUNDRED FIFTY SIX THOUSAND NINE HUNDRED SIXTY THREE
PESOS AND 25 CENTAVOS (P10,956,963.25) for the acquired area of 240.9066 hectares. The
Land Bank of the Philippines is hereby ordered to pay the same to the landowner in the manner
provided for by law.

SO ORDERED.4
Thereafter, a Writ of Execution was issued by the PARAD directing the manager of Land Bank to pay the
respondent the aforesaid amount as just compensation in the manner provided by law.5

On September 2, 1999, respondent filed a Motion for Contempt with the PARAD, alleging that petitioner
Land Bank failed to comply with the Writ of Execution issued on June 18, 1999. He argued that such
failure of the petitioner to comply with the writ of execution constitutes contempt of the DARAB.

Meanwhile, on September 6, 1999, petitioner Land Bank filed a petition with the Regional Trial Court of
Sorsogon, Branch 52, sitting as a Special Agrarian Court (SAC), for the determination of just
compensation, as provided for in Section 16 (f) of the CARL.6

On August 20, 2000, the PARAD issued an Order granting the Motion for Contempt, as follows:

WHEREFORE, premises considered, the motion for contempt is hereby GRANTED, thus ALEX
A. LORAYES, as Manager of respondent LAND BANK, is cited for indirect contempt and hereby
ordered to be imprisoned until he complies with the Decision of the case dated October 14, 1998.

SO ORDERED.7

Petitioner Land Bank filed a Motion for Reconsideration of the aforequoted Order,8 which was however
denied by the PARAD on September 20, 2000.9 Thus, petitioner filed a Notice of Appeal with the PARAD,
manifesting its intention to appeal the decision to the DARAB Central, pursuant to Rule XI, Section 3 of
the 1994 DARAB New Rules of Procedure.10

On the other hand, the Special Agrarian Court dismissed the petition for the determination of just
compensation filed by petitioner Land Bank in an Order dated October 25, 2000. Petitioners Motion for
Reconsideration of said dismissal was likewise denied.

In a Resolution dated November 27, 2000, PARAD Capellan denied due course to petitioners Notice of
Appeal and ordered the issuance of an Alias Writ of Execution for the payment of the adjudged amount of
just compensation to respondent.11 On January 3, 2001, he directed the issuance of an arrest order against
Manager Alex A. Lorayes.12

Petitioner Land Bank filed a petition for injunction before the Regional Trial Court of Sorsogon, Sorsogon,
with application for the issuance of a writ of preliminary injunction to restrain PARAD Capellan from
issuing the order of arrest.13 The case was raffled to Branch 51 of said court. On January 29, 2001, the trial
court issued an Order, the dispositive portion of which reads:

WHEREFORE, premises considered, the respondent Provincial Adjudicator of the DARAB or

anyone acting in its stead is enjoined as it is hereby enjoined from enforcing its order of arrest
against Mr. Alex A. Lorayes pending the final termination of the case before RTC Branch 52,
Sorsogon upon the posting of a cash bond by the Land Bank.

SO ORDERED.14

Respondent filed a Motion for Reconsideration of the trial courts order, which was denied in an Order
dated April 2, 2001.15

Thus, respondent filed a special civil action for certiorari with the Court of Appeals,16 docketed as CA-
G.R. SP No. 65276. On December 11, 2001, the Court of Appeals rendered the assailed decision which
nullified the Orders of the Regional Trial Court of Sorsogon, Sorsogon, Branch 51.

Hence, the instant petition for review on the following issues:

 I. WHETHER OR NOT THE CA DEPARTED FROM THE ACCEPTED COURSE OF
JUDICIAL PROCEEDINGS IN ENTERTAINING THE RESPONDENTS SPECIAL CIVIL
ACTION FOR CERTIORARI TO QUESTION THE FINAL ORDER OF THE RTC WHICH,
HOWEVER, WAS SUBJECT TO APPEAL UNDER THE 1997 RULES OF CIVIL
PROCEDURE.

II. WHETHER OR NOT THE CA DECIDED IN A WAY NOT IN ACCORD WITH LAW AND
SUBSTANTIAL JUSTICE IN ANNULLING AND SETTING ASIDE THE RTC FINAL
ORDER OF INJUNCTION, CONSIDERING THAT:

A. THE PARAD DID NOT ACQUIRE COMPETENT JURISDICTION OVER THE

CONTEMPT PROCEEDINGS INASMUCH AS IT WAS INITIATED BY MERE MOTION
FOR CONTEMPT AND NOT BY VERIFIED PETITION, IN VIOLATION OF SECTION 2,
RULE XI OF THE NEW DARAB RULES OF PROCEDURE AND OF RULE 71 OF THE
REVISED RULES OF COURT.

B. THE PARAD CONTEMPT ORDER CANNOT BE CONSIDERED FINAL AND

EXECUTORY, BECAUSE THE PARAD ITSELF DISALLOWED THE PETITIONERS
APPEAL TO THE DARAB CENTRAL OFFICE, IN DISREGARD OF THE BASIC RULE
THAT THE APPELLATE TRIBUNAL DETERMINES THE MERITS OF THE APPEAL.

C. THE PARAD ORDER OF ARREST AGAINST LBP MANAGER ALEX LORAYES WAS IN
GROSS AND PATENT VIOLATION OF HIS PERSONAL, CONSTITUTIONAL AND CIVIL
RIGHTS AGAINST UNJUST ARREST AND IMPRISONMENT, INASMUCH AS, UNDER
THE 1987 CONSTITUTION, ONLY JUDGES CAN ISSUE WARRANTS OF ARREST
AGAINST CITIZENS, AND THE PROPER SUBJECT OF THE CONTEMPT PROCEEDING
WAS THE PETITIONER ITSELF AND NOT THE LBP MANAGER, AND YET THE
CONTEMPT ORDER WAS AGAINST THE LBP MANAGER.

D. THE PARAD ORDER OF CONTEMPT WAS PATENTLY NULL AND VOID, AS IT

ATTEMPTED TO ENFORCE COMPLIANCE WITH THE PARAD DECISION THAT WAS
ADMITTEDLY NOT FINAL AND EXECUTORY, AS THE MATTER OF JUST
COMPENSATION BEFORE THE SPECIAL AGRARIAN COURT WAS ON APPEAL WITH
THE COURT OF APPEALS.17

As regards the first issue, petitioner submits that the special civil action for certiorari filed by respondent
before the Court of Appeals to nullify the injunction issued by the trial court was improper, considering that
the preliminary injunction issued by the trial court was a final order which is appealable to the Court of
Appeals via a notice of appeal.18

Petitioners submission is untenable. Generally, injunction is a preservative remedy for the protection of
ones substantive right or interest. It is not a cause of action in itself but merely a provisional remedy, an
adjunct to a main suit. Thus, it has been held that an order granting a writ of preliminary injunction is an
interlocutory order. As distinguished from a final order which disposes of the subject matter in its entirety
or terminates a particular proceeding or action, leaving nothing else to be done but to enforce by execution
what has been determined by the court, an interlocutory order does not dispose of a case completely, but
leaves something more to be adjudicated upon.19

Clearly, the grant of a writ of preliminary injunction is in the nature of an interlocutory order, hence,
unappealable. Therefore, respondents special civil action for certiorari before the Court of Appeals was
the correct remedy under the circumstances. Certiorari is available where there is no appeal, or any plain,
speedy, and adequate remedy in the ordinary course of law.20
 The order granting a writ of preliminary injunction is an interlocutory order; as such, it cannot by
itself be subject of an appeal or a petition for review on certiorari. The proper remedy of a party
aggrieved by such an order is to bring an ordinary appeal from an adverse judgment in the main
case, citing therein the grounds for assailing the interlocutory order. However, the party concerned
may file a petition for certiorari where the assailed order is patently erroneous and appeal would
not afford adequate and expeditious relief.21

On the substantive issue of whether the order for the arrest of petitioners manager, Mr. Alex Lorayes by
the PARAD, was valid, Rule XVIII of the 2003 DARAB Rules reads, in pertinent part:

Section 2. Indirect Contempt. The Board or any of its members or its Adjudicator may also cite
and punish any person for indirect contempt on any of the grounds and in the manner prescribed
under Rule 71 of the Revised Rules of Court.

In this connection, Rule 71, Section 4 of the 1997 Rules of Civil Procedure, which deals with the
commencement of indirect contempt proceedings, provides:

Sec. 4. How proceedings commenced. Proceedings for indirect contempt may be initiated motu
proprio by the court against which the contempt was committed by an order or any other formal
charge requiring the respondent to show cause why he should not be punished for contempt.

In all other cases, charges for indirect contempt shall be commenced by a verified petition with
supporting particulars and certified true copies of documents or papers involved therein, and upon
full compliance with the requirements for filing initiatory pleadings for civil actions in the court
concerned. If the contempt charges arose out of or are related to a principal action pending in the
court, the petition for contempt shall allege that fact but said petition shall be docketed, heard and
decided separately, unless the court in its discretion orders the consolidation of the contempt
charge and the principal action for joint hearing and decision.

xxx xxx xxx

The requirement of a verified petition is mandatory. Justice Florenz D. Regalado, Vice-Chairman of the
Revision of the Rules of Court Committee that drafted the 1997 Rules of Civil Procedure explains this
requirement:

1. This new provision clarifies with a regulatory norm the proper procedure for commencing
contempt proceedings. While such proceeding has been classified as a special civil action under
the former Rules, the heterogeneous practice, tolerated by the courts, has been for any party to file
a mere motion without paying any docket or lawful fees therefor and without complying with the
requirements for initiatory pleadings, which is now required in the second paragraph of this
amended section.

xxx xxx xxx

Henceforth, except for indirect contempt proceedings initiated motu proprio by order of or a
formal charge by the offended court, all charges shall be commenced by a verified petition with
full compliance with the requirements therefor and shall be disposed of in accordance with the
second paragraph of this section.22

Therefore, there are only two ways a person can be charged with indirect contempt, namely, (1) through a
verified petition; and (2) by order or formal charge initiated by the court motu proprio.

In the case at bar, neither of these modes was adopted in charging Mr. Lorayes with indirect contempt.
More specifically, Rule 71, Section 12 of the 1997 Rules of Civil Procedure, referring to indirect contempt
against quasi-judicial entities, provides:

Sec. 12. Contempt against quasi-judicial entities. Unless otherwise provided by law, this Rule
shall apply to contempt committed against persons, entities, bodies or agencies exercising quasi-
judicial functions, or shall have suppletory effect to such rules as they may have adopted pursuant
to authority granted to them by law to punish for contempt. The Regional Trial Court of the place
wherein the contempt has been committed shall have jurisdiction over such charges as may be
filed therefore. (emphasis supplied)

The foregoing amended provision puts to rest once and for all the questions regarding the applicability of
these rules to quasi-judicial bodies, to wit:

1. This new section was necessitated by the holdings that the former Rule 71 applied only to
superior and inferior courts and did not comprehend contempt committed against administrative or
quasi-judicial officials or bodies, unless said contempt is clearly considered and expressly defined
as contempt of court, as is done in the second paragraph of Sec. 580, Revised Administrative
Code. The provision referred to contemplates the situation where a person, without lawful excuse,
fails to appear, make oath, give testimony or produce documents when required to do so by the
official or body exercising such powers. For such violation, said person shall be subject to
discipline, as in the case of contempt of court, upon application of the official or body with the
Regional Trial Court for the corresponding sanctions.23 (emphasis in the original)

Evidently, quasi-judicial agencies that have the power to cite persons for indirect contempt pursuant to
Rule 71 of the Rules of Court can only do so by initiating them in the proper Regional Trial Court. It is not
within their jurisdiction and competence to decide the indirect contempt cases. These matters are still
within the province of the Regional Trial Courts. In the present case, the indirect contempt charge was
filed, not with the Regional Trial Court, but with the PARAD, and it was the PARAD that cited Mr.
Lorayes with indirect contempt.

Hence, the contempt proceedings initiated through an unverified "Motion for Contempt" filed by the
respondent with the PARAD were invalid for the following reasons:24 First, the Rules of Court clearly
require the filing of a verified petition with the Regional Trial Court, which was not complied with in this
case. The charge was not initiated by the PARAD motu proprio; rather, it was by a motion filed by
respondent. Second, neither the PARAD nor the DARAB have jurisdiction to decide the contempt charge
filed by the respondent. The issuance of a warrant of arrest was beyond the power of the PARAD and the
DARAB. Consequently, all the proceedings that stemmed from respondents "Motion for Contempt,"
specifically the Orders of the PARAD dated August 20, 2000 and January 3, 2001 for the arrest of Alex A.
Lorayes, are null and void.

WHEREFORE, in view of the foregoing, the petition for review is GRANTED. The Decision of the Court
of Appeals in CA-G.R. SP No. 65276, dated December 11, 2001, is REVERSED and SET ASIDE. The
Order of the Regional Trial Court of Sorsogon, Sorsogon, Branch 51, dated January 29, 2001, which
enjoined the Provincial Adjudicator of the DARAB or anyone acting in its stead from enforcing its order of
arrest against Mr. Alex A. Lorayes pending the final termination of the case before Regional Trial Court of
Sorsogon, Sorsogon, Branch 52, is REINSTATED.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION
G.R. No. 176085 February 8, 2012

FEDERICO S. ROBOSA, ROLANDO E. PANDY, NOEL D. ROXAS, ALEXANDER ANGELES,

VERONICA GUTIERREZ, FERNANDO EMBAT, and NANETTE H. PINTO, Petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION (First Division), CHEMO-TECHNISCHE
MANUFACTURING, INC. and its responsible officials led by FRANKLIN R. DE LUZURIAGA,
and PROCTER & GAMBLE PHILIPPINES, INC., Respondents.

DECISION

BRION, J.:

We resolve the petition for review on certiorari1 seeking the reversal of the resolutions of the Court of
Appeals (CA) rendered on February 24, 20062 and December 14, 20063 in CA-G.R. SP No. 80436.

Factual Background

Federico S. Robosa, Rolando E. Pandy, Noel D. Roxas, Alexander Angeles, Veronica Gutierrez, Fernando
Embat and Nanette H. Pinto (petitioners) were rank-and-file employees of respondent Chemo-Technische
Manufacturing, Inc. (CTMI), the manufacturer and distributor of "Wella" products. They were officers and
members of the CTMI Employees Union-DFA (union). Respondent Procter and Gamble Philippines, Inc.
(P & GPI) acquired all the interests, franchises and goodwill of CTMI during the pendency of the dispute.

Sometime in the first semester of 1991, the union filed a petition for certification election at CTMI. On
June 10, 1991, Med-Arbiter Rasidali Abdullah of the Office of the Department of Labor and Employment
in the National Capital Region (DOLE-NCR) granted the petition. The DOLE-NCR conducted a consent
election on July 5, 1991, but the union failed to garner the votes required to be certified as the exclusive
bargaining agent of the company.

On July 15, 1991, CTMI, through its President and General Manager Franklin R. de Luzuriaga, issued a
memorandum4 announcing that effective that day: (1) all sales territories were demobilized; (2) all vehicles
assigned to sales representatives should be returned to the company and would be sold; (3) sales
representatives would continue to service their customers through public transportation and would be given
transportation allowance; (4) deliveries of customers orders would be undertaken by the warehouses; and
(5) revolving funds for ex-truck selling held by sales representatives should be surrendered to the cashier
(for Metro Manila) or to the supervisor (for Visayas and Mindanao), and truck stocks should immediately
be surrendered to the warehouse.

On the same day, CTMI issued another memorandum5 informing the companys sales representatives and
sales drivers of the new system in the Salon Business Groups selling operations.

The union asked for the withdrawal and deferment of CTMIs directives, branding them as union busting
acts constituting unfair labor practice. CTMI ignored the request. Instead, it issued on July 23, 1991 a
notice of termination of employment to the sales drivers, due to the abolition of the sales driver positions.6

On August 1, 1991, the union and its affected members filed a complaint for illegal dismissal and unfair
labor practice, with a claim for damages, against CTMI, De Luzuriaga and other CTMI officers. The union
also moved for the issuance of a writ of preliminary injunction and/or temporary restraining order (TRO).

The Compulsory Arbitration Proceedings

The labor arbiter handling the case denied the unions motion for a stay order on the ground that the issues
raised by the petitioners can best be ventilated during the trial on the merits of the case. This prompted the
union to file on August 16, 1991 with the National Labor Relations Commission (NLRC), a petition for the
issuance of a preliminary mandatory injunction and/or TRO.7

On August 23, 1991, the NLRC issued a TRO.8 It directed CTMI, De Luzuriaga and other company
executives to (1) cease and desist from dismissing any member of the union and from implementing the
July 23, 1991 memorandum terminating the services of the sales drivers, and to immediately reinstate them
if the dismissals have been effected; (2) cease and desist from implementing the July 15, 1991
memorandum grounding the sales personnel; and (3) restore the status quo ante prior to the formation of the
union and the conduct of the consent election.

Allegedly, the respondents did not comply with the NLRCs August 23, 1991 resolution. They instead
moved to dissolve the TRO and opposed the unions petition for preliminary injunction.

On September 12, 1991, the NLRC upgraded the TRO to a writ of preliminary injunction.9 The respondents
moved for reconsideration. The union opposed the motion and urgently moved to cite the responsible
CTMI officers in contempt of court.

On August 25, 1993, the NLRC denied the respondents motion for reconsideration and directed Labor
Arbiter Cristeta Tamayo to hear the motion for contempt. In reaction, the respondents questioned the
NLRC orders before this Court through a petition for certiorari and prohibition with preliminary injunction.
The Court dismissed the petition for being premature. It also denied the respondents motion for
reconsideration, as well as a second motion for reconsideration, with finality. This notwithstanding, the
respondents allegedly refused to obey the NLRC directives. The respondents defiance, according to the
petitioners, resulted in the loss of their employment.

Meanwhile, the NLRC heard the contempt charge. On October 31, 2000, it issued a resolution 10 dismissing
the charge. It ordered the labor arbiter to proceed hearing the main case on the merits.

The petitioners moved for, but failed to secure, a reconsideration from the NLRC on the dismissal of the
contempt charge. They then sought relief from the CA by way of a petition for certiorari under Rule 65.

The CA Decision

The CA saw no need to dwell on the issues raised by the petitioners as the question it deemed appropriate
for resolution is whether the NLRCs dismissal of the contempt charge against the respondents may be the
proper subject of an appeal. It opined that the dismissal is not subject to review by an appellate court.
Accordingly, the CA Special Sixth Division dismissed the petition in its resolution of February 24, 2006.11

The CA considered the prayer of P & GPI to be dropped as party-respondent moot and academic.

The petitioners sought a reconsideration, but the CA denied the motion in its resolution of December 14,
2006.12 Hence, the present Rule 45 petition.

The Petition

The petitioners charge the CA with grave abuse of discretion in upholding the NLRC resolutions, despite
the reversible errors the labor tribunal committed in dismissing the contempt charge against the
respondents. They contend that the respondents were guilty of contempt for their failure (1) to observe
strictly the NLRC status quo order; and (2) to reinstate the dismissed petitioners and to pay them their lost
wages, sales commissions, per diems, allowances and other employee benefits. They also claim that the
NLRC, in effect, overturned this Courts affirmation of the TRO and of the preliminary injunction.
The petitioners assail the CAs reliance on the Courts ruling that a contempt charge partakes of a criminal
proceeding where an acquittal is not subject to appeal. They argue that the facts obtaining in the present
case are different from the facts of the cases where the Courts ruling was made. They further argue that by
the nature of this case, the Labor Code and its implementing rules and regulations should apply, but in any
event, the appellate court is not prevented from reviewing the factual basis of the acquittal of the
respondents from the contempt charges.

The petitioners lament that the NLRC, in issuing the challenged resolutions, had unconstitutionally applied
the law. They maintain that not only did the NLRC unconscionably delay the disposition of the case for
more than twelve (12) years; it also rendered an unjust, unkind and dubious judgment. They bewail that
"[f]or some strange reason, the respondent NLRC made a queer [somersault] from its earlier rulings which
favor the petitioners."13

The Case for the Respondents

Franklin K. De Luzuriaga

De Luzuriaga filed a Comment14 on May 17, 2007 and a Memorandum on December 4, 2008,15 praying for
a dismissal of the petition.

De Luzuriaga argues that the CA committed no error when it dismissed the petition for certiorari since the
dismissal of the contempt charge against the respondents amounted to an acquittal where review by an
appellate court will not lie. In any event, he submits, the respondents were charged with indirect contempt
which may be initiated only in the appropriate regional trial court, pursuant to Section 12, Rule 71 of the
Rules of Court. He posits that the NLRC has no jurisdiction over an indirect contempt charge. He thus
argues that the petitioners improperly brought the contempt charge before the NLRC.

Additionally, De Luzuriaga points out that the petition raises only questions of facts which, procedurally, is
not allowed in a petition for review on certiorari. Be this as it may, he submits that pursuant to Philippine
Long Distance Telephone Company, Inc. v. Tiamson,16 factual findings of labor officials, who are deemed
to have acquired expertise in matters within their respective jurisdictions, are generally accorded not only
respect but even finality. He stresses that the CA committed no reversible error in not reviewing the
NLRCs factual findings.

Further, De Luzuriaga contends that the petitioners verification and certification against forum shopping is
defective because it was only Robosa and Pandy who executed the document. There was no indication that
they were authorized by Roxas, Angeles, Gutierrez, Embat and Pinto to execute the required verification
and certification.

Lastly, De Luzuriaga maintains that the petitioners are guilty of forum shopping as the reliefs prayed for in
the petition before the CA, as well as in the present petition, are the same reliefs that the petitioners may be
entitled to in the complaint before the labor arbiter.17

P & GPI

As it did with the CA when it was asked to comment on the petitioners motion for reconsideration,18 P &
GPI prays in its Comment19 and Memorandum20 that it be dropped as a party-respondent, and that it be
excused from further participating in the proceedings. It argues that inasmuch as the NLRC resolved the
contempt charge on the merits, an appeal from its dismissal through a petition for certiorari is barred.
Especially in its case, the dismissal of the petition for certiorari is correct because it was never made a party
to the contempt proceedings and, thus, it was never afforded the opportunity to be heard. It adds that it is an
entity separate from CTMI. It submits that it cannot be made to assume any or all of CTMIs liabilities,
absent an agreement to that effect but even if it may be liable, the present proceedings are not the proper
venue to determine its liability, if any.

On December 16, 2008, the petitioners filed a Memorandum21 raising essentially the same issues and
arguments laid down in the petition.

The Courts Ruling

Issues

The parties submissions raise the following issues:

(1) whether the NLRC has contempt powers;

(2) whether the dismissal of a contempt charge is appealable; and

(3) whether the NLRC committed grave abuse of discretion in dismissing the contempt charge
against the respondents.

On the first issue, we stress that under Article 21822 of the Labor Code, the NLRC (and the labor arbiters)
may hold any offending party in contempt, directly or indirectly, and impose appropriate penalties in
accordance with law. The penalty for direct contempt consists of either imprisonment or fine, the degree or
amount depends on whether the contempt is against the Commission or the labor arbiter. The Labor Code,
however, requires the labor arbiter or the Commission to deal with indirect contempt in the manner
prescribed under Rule 71 of the Rules of Court.23

Rule 71 of the Rules of Court does not require the labor arbiter or the NLRC to initiate indirect contempt
proceedings before the trial court. This mode is to be observed only when there is no law granting them
contempt powers.24 As is clear under Article 218(d) of the Labor Code, the labor arbiter or the Commission
is empowered or has jurisdiction to hold the offending party or parties in direct or indirect contempt. The
petitioners, therefore, have not improperly brought the indirect contempt charges against the respondents
before the NLRC.

The second issue pertains to the nature of contempt proceedings, especially with respect to the remedy
available to the party adjudged to have committed indirect contempt or has been absolved of indirect
contempt charges. In this regard, Section 11, Rule 71 of the Rules of Court states that the judgment or final
order of a court in a case of indirect contempt may be appealed to the proper court as in a criminal case.
This is not the point at issue, however, in this petition. It is rather the question of whether the dismissal of a
contempt charge, as in the present case, is appealable. The CA held that the NLRCs dismissal of the
contempt charges against the respondents amounts to an acquittal in a criminal case and is not subject to
appeal.

The CA ruling is grounded on prevailing jurisprudence.

In Yasay, Jr. v. Recto,25 the Court declared:

A distinction is made between a civil and [a] criminal contempt. Civil contempt is the failure to do
something ordered by a court to be done for the benefit of a party. A criminal contempt is any conduct
directed against the authority or dignity of the court.26

The Court further explained in Remman Enterprises, Inc. v. Court of Appeals27 and People v. Godoy28 the
character of contempt proceedings, thus
The real character of the proceedings in contempt cases is to be determined by the relief sought or by the
dominant purpose. The proceedings are to be regarded as criminal when the purpose is primarily
punishment and civil when the purpose is primarily compensatory or remedial.

Still further, the Court held in Santiago v. Anunciacion, Jr.29 that:

But whether the first or the second, contempt is still a criminal proceeding in which acquittal, for instance,
is a bar to a second prosecution. The distinction is for the purpose only of determining the character of
punishment to be administered.

In the earlier case of The Insurance Commissioner v. Globe Assurance Co., Inc.,30 the Court dismissed the
appeal from the ruling of the lower court denying a petition to punish the respondent therein from contempt
for lack of evidence. The Court said in that case:

It is not the sole reason for dismissing this appeal. In the leading case of In re Mison, Jr. v. Subido, it was
stressed by Justice J.B.L. Reyes as ponente, that the contempt proceeding far from being a civil action is
"of a criminal nature and of summary character in which the court exercises but limited jurisdiction." It was
then explicitly held: "Hence, as in criminal proceedings, an appeal would not lie from the order of dismissal
of, or an exoneration from, a charge of contempt of court." [footnote omitted]

Is the NLRCs dismissal of the contempt charges against the respondents beyond review by this Court? On
this important question, we note that the petitioners, in assailing the CA main decision, claim that the
appellate court committed grave abuse of discretion in not ruling on the dismissal by the NLRC of the
contempt charges.31 They also charge the NLRC of having gravely abused its discretion and having
committed reversible errors in:

(1) setting aside its earlier resolutions and orders, including the writ of preliminary injunction it
issued, with its dismissal of the petition to cite the respondents in contempt of court;

(2) overturning this Courts resolutions upholding the TRO and the writ of preliminary injunction;

(3) failing to impose administrative fines upon the respondents for violation of the TRO and the
writ of preliminary injunction; and

(4) failing to order the reinstatement of the dismissed petitioners and the payment of their accrued
wages and other benefits.

In view of the grave abuse of discretion allegation in this case, we deem it necessary to look into the
NLRCs dismissal of the contempt charges against the respondents. As the charges were rooted into the
respondents alleged non-compliance with the NLRC directives contained in the TRO32 and the writ of
preliminary injunction,33 we first inquire into what really happened to these directives.

The assailed NLRC resolution of October 31, 200034 gave us the following account on the matter -

On the first directive, x x x We find that there was no violation of the said order. A perusal of the records
would show that in compliance with the temporary restraining order (TRO), respondents reinstated back to
work the sales drivers who complained of illegal dismissal (Memorandum of Respondents, page 4).

Petitioners allegation that there was only payroll reinstatement does not make the respondents guilty of
contempt of court. Even if the drivers were just in the garage doing nothing, the same does not make
respondents guilty of contempt nor does it make them violators of the injunction order. What is important is
that they were reinstated and receiving their salaries.
As for petitioners Danilo Real, Roberto Sedano and Rolando Manalo, they have resigned from their jobs
and were paid their separation pay xxx (Exhibits "6," "6-A," "7," "7-A," "8," "8-A," Respondents
Memorandum dated August 12, 1996). The issue of whether they were illegally dismissed should be
threshed out before the Labor Arbiter in whose sala the case of unfair labor practice and illegal dismissal
were (sic) filed. Records also show that petitioner Antonio Desquitado during the pendency of the case
executed an affidavit of desistance asking that he be dropped as party complainant in as much as he has
already accepted separation benefits totaling to P63,087.33.

With respect to the second directive ordering respondents to cease and desist from implementing the
memoranda dated July 15, 1991 designed to ground sales personnel who are members of the union,
respondents alleged that they can no longer be restrained or enjoined and that the status quo can no longer
be restored, for implementation of the memorandum was already consummated or was a fait accompli. x x
x

All sales vehicles were ordered to be turned over to management and the same were already sold[.] xxx [I]t
would be hard to undo the sales transactions, the same being valid and binding. The memorandum of July
15, 1991 authorized still all sales representatives to continue servicing their customers using public
transportation and a transportation allowance would be issued.

xxxx

The third directive of the Commission is to preserve the "status quo ante" between the parties.

Records reveal that WELLA AG of Germany terminated its Licensing Agreement with respondent
company effective December 31, 1991 (Exhibit "11," Respondents Memorandum).

On January 31, 1992, individual petitioners together with the other employees were terminated xxx. In fact,
this event resulted to the closure of the respondent company. The manufacturing and marketing operations
ceased. This is evidenced by the testimony of Rosalito del Rosario and her affidavit (Exh. "9,"
memorandum of Respondents) as well as Employers Monthly Report on Employees
Termination/dismissals/suspension xxx (Exhibits "12-A" to "12-F," ibid) as well as the report that there is a
permanent shutdown/total closure of all units of operations in the establishment (Ibid). A letter was
likewise sent to the Department of Labor and Employment (Exh. "12," Ibid) in compliance with Article 283
of the Labor Code, serving notice that it will cease business operations effective January 31, 1992.

The petitioners strongly dispute the above account. They maintain that the NLRC failed to consider the
following:

1. CTMI violated the status quo ante order when it did not restore to their former work
assignments the dismissed sales drivers. They lament that their being "garaged" deprived them of
benefits, and they were subjected to ridicule and psychological abuse. They assail the NLRC for
considering the payroll reinstatement of the drivers as compliance with its stay order.

They also bewail the NLRCs recognition of the resignation of Danilo Real, Roberto Sedano,
Rolando Manalo and Antonio Desquitado as they were just compelled by economic necessity to
resign from their employment. The quitclaims they executed were contrary to public policy and
should not bar them from claiming the full measure of their rights, including their counsel who
was unduly deprived of his right to collect attorneys fees.

2. It was error for the NLRC to rule that the memorandum, grounding the sales drivers, could no
longer be restrained or enjoined because all sales vehicles were already sold. No substantial
evidence was presented by the respondents to prove their allegation, but even if there was a valid
sale of the vehicles, it did not relieve the respondents of responsibility under the stay order.
 3. The alleged termination of the licensing agreement between CTMI and WELLA AG of
Germany, which allegedly resulted in the closure of CTMIs manufacturing and marketing
operations, occurred after the NLRCs issuance of the injunctive reliefs. CTMI failed to present
substantial evidence to support its contention that it folded up its operations when the licensing
agreement was terminated. Even assuming that there was a valid closure of CTMIs business
operations, they should have been paid their lost wages, allowances, incentives, sales
commissions, per diems and other employee benefits from August 23, 1991 up to the date of the
alleged termination of CTMIs marketing operations.

Did the NLRC commit grave abuse of discretion in dismissing the contempt charges against the
respondents? An act of a court or tribunal may only be considered as committed in grave abuse of
discretion when it was performed in a capricious or whimsical exercise of judgment which is equivalent to
lack of jurisdiction. The abuse of discretion must be so patent and gross as to amount to an evasion of a
positive duty enjoined by law, or to act at all in contemplation of law, as where the power is exercised in an
arbitrary and despotic manner by reason of passion or personal hostility.35

The petitioners insist that the respondents violated the NLRC directives, especially the status quo ante
order, for their failure to reinstate the dismissed petitioners and to pay them their benefits. In light of the
facts of the case as drawn above, we cannot see how the status quo ante or the employer-employee situation
before the formation of the union and the conduct of the consent election can be maintained. As the NLRC
explained, CTMI closed its manufacturing and marketing operations after the termination of its licensing
agreement with WELLA AG of Germany. In fact, the closure resulted in the termination of CTMIs
remaining employees on January 31, 1992, aside from the sales drivers who were earlier dismissed but
reinstated in the payroll, in compliance with the NLRC injunction. The petitioners termination of
employment, as well as all of their money claims, was the subject of the illegal dismissal and unfair labor
practice complaint before the labor arbiter. The latter was ordered by the NLRC on October 31, 2000 to
proceed hearing the case.36 The NLRC thus subsumed all other issues into the main illegal dismissal and
unfair labor practice case pending with the labor arbiter. On this point, the NLRC declared:

Note that when the injunction order was issued, WELLA AG of Germany was still under licensing
agreement with respondent company. However, the situation has changed when WELLA AG of Germany
terminated its licensing agreement with the respondent, causing the latter to close its business.

Respondents could no longer be ordered to restore the status quo as far as the individual petitioners are
concerned as these matters regarding the termination of the employees are now pending litigation with the
Arbitration Branch of the Commission. To resolve the incident now regarding the closure of the respondent
company and the matters alleged by petitioners such as the creations of three (3) new corporations xxx as
successor-corporations are matters best left to the Labor Arbiter hearing the merits of the unfair labor
practice and illegal dismissal cases.37

We find no grave abuse of discretion in the assailed NLRC ruling. It rightly avoided delving into issues
which would clearly be in excess of its jurisdiction for they are issues involving the merits of the case
which are by law within the original and exclusive jurisdiction of the labor arbiter.38 To be sure, whether
payroll reinstatement of some of the petitioners is proper; whether the resignation of some of them was
compelled by dire economic necessity; whether the petitioners are entitled to their money claims; and
whether quitclaims are contrary to law or public policy are issues that should be heard by the labor arbiter
in the first instance. The NLRC can inquire into them only on appeal after the merits of the case shall have
been adjudicated by the labor arbiter.

The NLRC correctly dismissed the contempt charges against the respondents.1wphi1 The CA likewise
committed no grave abuse of discretion in not disturbing the NLRC resolution.

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

SO ORDERED.