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Today is Friday, July 31, 2015

Republic of the PhilippinesSUPREME COURT

Manila

SECOND DIVISION

G.R. No. 180147 June 4, 2014

SARA LEE PHILIPPINES, INC., Petitioner,vs.

EMILINDA D. MACATLANG, ET AL.,1 Respondents.

x - - - - - - - - - - - - - - - - - - - - - - - x

G.R. No. 180148

ARIS PHILIPPINES, INC., Petitioner,

vs.EMILINDA D. MACATLANG, ET AL., Respondents.

x - - - - - - - - - - - - - - - - - - - - - - - x

G.R. No. 180149

SARA LEE CORPORATION, Petitioner,vs.EMILINDA D. MACATLANG, ET AL., Respondents.

x - - - - - - - - - - - - - - - - - - - - - - - x

G.R. No. 180150

CESAR C. CRUZ, Petitioner,vs.EMILINDA D. MACA TLANG, ET AL., Respondents.

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G.R. No. 180319

FASHION ACCESSORIES PHILS., INC., Petitioner,vs.EMILINDA D. MACATLANG, ET AL., Respondents.

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G.R. No. 180685

EMILINDA D. MACA TLANG, ET AL., Petitioners,vs.

NLRC, ARIS PHILIPPINES, INC., FASHION ACCESSORIES PHILS., INC., SARA LEE CORPORATION, SARA LEE

PHILIPPINES, INC., COLLIN BEAL and ATTY. CESAR C. CRUZ, Respondents.



D E C I S I O N

PEREZ, J.:

The dilemma of the appeal bond in labor cases is epochal, present whenever the amount of monetary awarbecomes debatably impedimental to the completion of remedies. Such instances exaggerate the ambivalencbetween rigidity and liberality in the application of the requirement that the bond must be equal to the arbiteraward. The rule of reasonableness in the determination of the compliant amount of the bond has been formulateto allow the review of the arbiter’s award. However, that rule seemingly becomes inadequate when the awarstaggers belief but is, nonetheless, supported by the premises of the controversy. The enormity of the awarcannot prevent the settlement of the dispute. The amount of award may vary case-to-case. But the law remainconstant.

Before us are six (6) consolidated petitions for review on certiorari pertaining to the P3,453,664,710.66 (P3.4Billion) appeal bond, which, as mandated by Article 233 of the Labor Code, is equivalent to the monetary awaradjudged by the labor arbiter in the cases. The first 5 petitions seek a relaxation of the rule while the last petitiourges its strict interpretation.

Petitioners in G.R. Nos. 180147,180148, 180149,180150, and 180319 are Sara Lee Philippines, Inc. (SLPI), AriPhilippines, Inc. (Aris), Sara Lee Corporation (SLC), Atty. Cesar Cruz (Cruz), and Fashion Accessories PhilippineInc. (FAPI), respectively and shall be collectively referred to as the "Corporations."

SLPI is a domestic corporation engaged in the manufacture and distribution of personal care products and is subsidiary of SLC.

Aris is a domestic corporation engaged in the business of producing gloves and other apparel.2

FAPI is a corporation engaged in the manufacture of knitted products. 3

SLC, a corporation duly organized and existing under the laws of the United States of America, is a stockholder o

Aris. It exercised control over Aris, FAPI, and SLPI which were all its subsidiaries or affiliates.4

Cruz was the external counsel of Aris at the time of its closure. When Aris filed for its dissolution, Cruz became th

Vice-President and Director of Aris.5

The petition docketed as G.R. No. 180685 is filed by Emilinda D. Macatlang and 5,983 other former employees o Aris. Emilinda D. Macatlang allegedly represents the employees whose employment was terminated upon thclosure of Aris.

I.

This controversy stemmed from a Notice of Permanent Closure filed by Aris on 4 September 1995 with thDepartment of Labor and Employment stating that it will permanently cease its operations effective 9 Octobe1995. All employees of Aris were duly informed.

Aris Philippines Workers Confederation of Filipino Workers (Union), which represents 5,9846 rank-and-fi

employees of Aris, staged a strike for violation of duty to bargain collectively, 7 union busting and illegal closure.8

After conciliation, the parties entered into an agreement whereby Aris undertook to pay its employees the benefi

which accrued by virtue of the company’s closure, which settlement amounted to P419 Million9 and an addition

P15 Million10

Benevolent Fund to the Union. On 26 October 1995, FAPI was incorporated.11

When saincorporation came to the knowledge of the affected employees, they all filed 63 separate complaints against Arfor illegal dismissal. The complaints were consolidated before the labor arbiter. Later amendments to the complainincluded as respondents SLC, SLP, FAPI and Cruz, and Emilinda D. Macatlang, et al.,is captioned as th

complainant, represented in the suit by Emilinda D. Macatlang. The complaints alleged that FAPI is engaged in thmanufacture and exportation of the same articles manufactured by Aris; that there was a mass transfer of Arisequipment and employees to FAPI’s plant in Muntinlupa, Rizal; that contractors of Aris continued as contractors o

FAPI; and that the export quota of Aris was transferred to FAPI. 12 Essentially, the complainants insisted that FAPwas organized by the management of Aris to continue the same business of Aris, thereby intending to defeat the



right to security of tenure. They likewise impleaded in their subsequent pleadings that SLC and SLP are the majostockholders of FAPI, and Cruz as Vice-President and Director of Aris.

Aris countered that it had complied with all the legal requirements for a valid closure of business operations; that is not, in any way, connected with FAPI, which is a separate and distinct corporation; that the contracts of Aris witits contractors were already terminated; and that there is no truth to the claim that its export quota with Garment

and Textile Export Board was transferred to FAPI because the export quota is non-transferable. 13

On 30 October 2004, the Labor Arbiter rendered judgment finding the dismissal of 5,984 complainants as illeg

and awarding them separation pay and other monetary benefits amounting to P3,453,664,710.86.14 Thdispositive portion of the decision read:

WHEREFORE, premises all considered, judgment is hereby rendered dismissing the complaint for unfair labopractice (ULP); declaring that complainants were illegally dismissed; ordering respondents to jointly and severalpay them separation pay at one (1) month for every year of service; backwages from the time their compensatiowas withheld until the promulgation of this Decision[,] P5,000.00 moral damages and P5,000.00 exempladamages for each of them, and eight percent (8%) attorney’s fee of the total monetary award, less the separatiopay they received upon closure of API.

All other claims are hereby DISMISSED.

Attached and marked as Annexes "A" to "A-117" and shall form part of this decision are the lists of complainan

and their respective monetary awards.15

Upon receipt of a copy of the aforesaid decision, the Corporations filed their Notice of Appeal with Motion t

Reduce Appeal Bond and To Admit Reduced Amount with the National Labor Relations Commission (NLRC). Theasked the NLRC to reduce the appeal bond to P1 Million each on the grounds that it is impossible for aninsurance company to cover such huge amount and that, in requiring them to post in full the appeal bond would b

tantamount to denying them their right to appeal.16 Aris claimed that it was already dissolved and undergoinliquidation. SLC added that it is not the employer of Emilinda D. Macatlang, et al., and that the latter had alreadreceived from Aris their separation pay and other benefits amounting to P419,057,348.24, which covers practical

more than 10% of the monetary award.17 FAPI, for its part, claimed that its total assets would not be enough tanswer for even a small portion of the award. To compel it to post a bond might result in complete stoppage ooperations. FAPI also cited the possibility that the assailed decision once reviewed will be reversed and se

aside.18 The Corporations posted a total of P4.5 Million.

Emilinda D. Macatlang, et al., opposed the motion by asserting that failure to comply with the bond requirement a jurisdictional defect since an appeal may only be perfected upon posting of a cash bond equivalent to th

monetary award provided by Article 223 of the Labor Code.19

In light of the impossibility for any surety company to cover the appeal bond and the huge economic losses whicthe companies and their employees might suffer if the P3.45 Billion bond is sustained, the NLRC granted th

reduction of the appeal bond. The NLRC issued an Order dated 31 March 200620 directing the Corporations tpost an additional P4.5 Million bond, bringing the total posted bond to P9 Million. The dispositive portion of thOrder provides: WHEREFORE, premises considered, respondents are hereby ordered to post bond, either cash, surety or property, in the additional amount of FOUR MILLION FIVE HUNDRED THOUSAND PESO(P4,500,000.00) within an INEXTENDIBLE period of FIFTEEN (15) calendar days from receipt hereof. To the saextent, the Motion for Reduction is granted. Failure to render strict compliance with the Order entered herein sha

render the dismissal of the appeal and the decision sought for review, as final and executory.21

Emilinda D. Macatlang, et al., filed a petition for certiorari before the Court of Appeals, docketed as CA-G.R. S

No. 96363. They charged the NLRC with grave abuse of discretion in giving due course to the appeal opetitioners despite the gross insufficiency of the cash bond. They declared that the appeal bond must b

equivalent to the amount of the award.22 Another petition, this time by Pacita Abelardo, et al., was also filed beforthe Court of Appeals and docketed as CA-G.R. SP No. 95919.

The Corporations filed a Motion to Dismiss the petition in CA-G.R. SP No. 95919 on the grounds of forumshopping, absence of authorization from the employees for Emilinda D. Macatlang to file said petition, and fo

23



was pr or resor o serv ce o summons o e u y au or ze o cer o e company e ore summons publication was made to SLPI.34

FAPI slams the Court of Appeals for touching on the merits of the case when the only issue brought to its attentiois the NLRC’s ruling on the appeal bond. FAPI argues that the Court of Appeals has no basis in stating that: (1there were 7,637 employees of Aris who were already laid off and became complainants when there are in faconly 5,984 employees of Aris involved in the illegal dismissal case; (2) that the P419 Million was not proven thave been paid to the complainants when as a matter of fact, records of the NLRC revealed that the amount waactually paid by Aris to its employees; and (3) that a dummy subsidiary referring to FAPI was formed when recorddisclose that the ownership, incorporators, officers, capitalization, place of business, and product manufactured b

FAPI and Aris are different.35

On the other hand, Emilinda D. Macatlang, et al., in their petition for review on certiorari assert that the appeal othe Corporations had not been perfected in accordance with Article 223 of the Labor Code when they failed tpost the amount equivalent to the monetary award in the judgment appealed from amounting to P3.45 BillionEmilinda D. Macatlang, et al., submit that the P1 Billion bond is not equivalent to the monetary award of P3.4Billion. More importantly, Emilinda D. Macatlang, et al., accused the Court of Appeals of extending the period oappeal by prescribing an additional amount to be paid within a reasonable period of time, which period it likewisdetermined, in contravention of Article 223 of the Labor Code. Emilinda D. Macatlang, et al., expound that the filinof a bond outside the period of appeal, even with the filing of a motion to reduce bond, would not stop the runninof the period of appeal. Emilinda D. Macatlang, et al., opine that the Court of Appeals has not been conferred th

power to legislate hence it should have strictly followed Article 223 of the Labor Code, as the same was clear.36

In an Urgent Manifestation and Motion, the Corporations informed this Court of a Resolution dated 30 March 200by the Third Division of this Court entitled, "Gabriel Fulido, et al. v. Aris Philippines, Inc." docketed as G.R. No

185948 (Fulido case) denying the petition for review filed by complainants in that case. The Corporations intimatthat the petitioners in the Fulido case are also former employees of Aris whose employments were terminated as result of Aris’ permanent closure. Petitioners submit that Emilinda D. Macatlang, et al., and petitioners in thFulidocase filed illegal dismissal cases before the NLRC seeking identical reliefs. Considering the identity iessential facts and basic issues involved, petitioners argue that there is compelling reason to adopt an

incorporate by reference the conclusion reached in the Fulido case.37

III.

The issues raised in these consolidated cases can be summarized as follows:

1. Whether the filing of two (2) petitions for certiorari, namely: the Macatlang petition and the Abelardpetition constitutes forum shopping.

2. Whether Emilinda D. Macatlang was duly authorized to sign the verification and certificate of non-forushopping attached to the Macatlang petition.

3. Whether the petition should be dismissed for failure to state the material dates.

4. Whether the service of summons by publication on SLC is defective.

5. Whether the subsequent NLRC ruling on the merits during the pendency of the petition questioning a

interlocutory order renders the instant petition moot and academic.

6. Whether the appeal bond may be reduced.

Before we proceed to the gist of this controversy, we shall resolve the first 3 procedural issues first.

IV.

The Corporations claim that the group of Macatlang committed forum shopping by filing two petitions before thCourt of Appeals.

Forum shopping is the act of a litigant who repetitively avails of several judicial remedies in different courtssimultaneously or successively, all substantially founded on the same transactions and on the same essential fact



,by some other court, to increase his chances of obtaining a favorable decision if not in one court, then i

another.38

What is pivotal in determining whether forum shopping exists or not is the vexation caused the courts and partieslitigants by a party who asks different courts and/or administrative agencies to rule on the same or related caseand/or grant the same or substantially the same reliefs, in the process creating the possibility of conflictin

decisions being rendered by the different courts and/or administrative agencies upon the same issues.39

Forum shopping exists when the elements of litis pendentia are present, and when a final judgment in one case wiamount to res judicatain the other. For litis pendentia to be a ground for the dismissal of an action, there must be(a) identity of the parties or at least such as to represent the same interest in both actions; (b) identity of rightasserted and relief prayed for, the relief being founded on the same acts; and (c) the identity in the two caseshould be such that the judgment which may be rendered in one would, regardless of which party is successfu

amount to res judicata in the other.40

The Macatlang petition was filed on 8 September 2006 while the Abelardo petition was filed 10 days later, or on 1September 2006. Indeed, these two petitions assailed the same order and resolution of the NLRC in NLRC CA No046685-05, entitled Emilinda Macatlang, et al. v. Aris Philippines, Inc., et al., and sought for the dismissal of thCorporations’ appeal for non-perfection because of failure to post the required appeal bond. A judgment in eithecase would have, if principles are correctly applied, amounted to res judicatain the other.

At first glance, it appears that there is also identity of parties in both petitions which is indicative of forumshopping. The Macatlang petition consists of 5,984 dismissed employees of Aris while the Abelardo petition ha411 dismissed employees, all of which were already included as petitioners in the Macatlang petition. With respec

to these 411 petitioners, they could be declared guilty of forum shopping when they filed the Abelardo petitiodespite the pendency of the Macatlang petition. As a matter of fact, the Abelardo petition was dismissed by thCourt of Appeals in a Resolution dated 17 November2006 on the ground of a defective certification on non-foru

shopping, among others.41 The Abelardo petition appears to be defective as the petition itself was replete witprocedural infirmities prompting the Court of Appeals to dismiss it outright. Instead of curing the defects in thepetition, petitioners in Abelardo revealed that pertinent documents which should have been attached with thepetition were actually submitted before the Sixteenth Division of the Court of Appeals where the Macatlang petitiowas pending. Evidently, petitioners in Abelardo have foreknowledge of an existing petition but neverthelesproceeded to file another petition and omitting to mention it in their certification on non-forum shopping, eitheintentionally or not. Clearly, the petitioners in the Abelardo petition committed forum shopping.

Now, should the act of these 411 employees prejudice the rights of the 5,573 other complainants in the Macatlanpetition? The answer is no. Forum shopping happens when there is identity of the parties or at least such as t

represent the same interest in both actions. We do not agree that the 411 petitioners of the Abelardo petition arrepresentative of the interest of all petitioners in Macatlang petition. First, the number is barely sufficient tcomprise the majority of petitioners in Macatlang petition. Second, it would be the height of injustice to dismiss thMacatlang petition which evidently enjoys the support of an overwhelming majority due to the mistake committeby petitioners in the Abelardo petition. In the absence of substantial similarity between the parties in Macatlanand Abelardo petitions, we find that the petitioners in Macatlang petition did not commit forum shopping. This view

was implicitly shared by the Thirteenth Division of the Court of Appeals when it did not bother to address the issuof forum shopping raised by petitioners therein precisely because at the time it rendered the assailed decision, th Abelardo petition had already been summarily dismissed.

V.

Next, the Corporations complain that Macatlang was not duly authorized to sign the verification and certification onon-forum shopping which accompanied the main petition before the Court of Appeals. They anchored theargument on Resolusyon, which reads in part:

1. Aming binigyan ng karapatan sina ERNESTO R. ARELLANO AT/O VILLAMOR MOSTRALES, aming mgabogado/legal advisers ng Arellano & Associates at si EMILINDA D. MACATLANG, aming head complainant, bilanaming ATTORNEYS-IN-FACT para katawanin at kanilang gampanan ang mga sumusunod na Gawain alinsunod saming kagustuhan:

a. Na, kami a katawanin sa kaso o m a kaso laban sa m a naban it na Kom an a: ARIS, FAPI ATSARA LE



CORP./SARA LEE PHILS., INC.at sa mga opisyales ng mga nabanggit; pirmahan ang anumang demanda "complaint" at lahat namga kaukulang papeles tulad ng Position Paper, Reply, Rejoinder, Memorandumat iba panpapeles na may kinalaman o patungkol sakasong ito simula sa NLRC, Court of Appeals, hanggang sa KortSuprema;

b. Na, aming malayang iniaatangsa kanila ang karapatan upang makipagkasundo sa mga nademanda spamamagitan ng isang "Compromise Agreement"o Kasunduan, gayon din ang karapatang tanggapin ankabuuang kabayaran sa aregluhan sa kaso na ayon sa kanilang pagsusuri ay mabuti at makatarungan para samin, kaakibat ng aming mga pirmang tanda ng pagsang-ayon ito bilang mayoria na nagdemanda o tanggapiang kabuuang bayad sa pagtatapos ng kaso, bilang aming kinatawan at ATTORNEYS-IN-FACT;

c. Na, sa kanilang puspusan at matapat na paghawak sa naturang kaso, aming ibibigay ang sampung porsiyent

(10%)ng aming "total claims"bilang attorney’s fees ng aming humawak na abogado/legal adviser: sina AttyErnesto R. Arellano and/or Villamor A. Mostrales at gayon din sa karagdagang panagot sa kanilang ginastosgagastusin sa pagtatanggol ng kaso bilang miscellaneous expensessa kanilang ma[a]yos na pagsulong a

pagtangan ng aming pangkalahatang interes sa naturang kaso.42

From the foregoing document, it can easily be gleaned that Macatlang was assigned by the complainants as theattorney-in-fact to perform the following acts: 1) to represent them in the case/cases filed against Aris, FAPI, SLCand SLPI; sign any complaint, pleadings, or any other documents pertinent or related to the instant case brougbefore the NLRC, Court of Appeals, and Supreme Court; 2) to enter into any compromise agreement osettlement; and 3) to receive the full payment as a consequence of any settlement. The first act necessariencompasses the authority to sign any document related to NLRC NCR No. 00-04-03677-98. The petition foreview on certiorari is one of these documents. Supreme Court Circular Nos. 28-91 and 04-94 require Certification of Non-Forum Shopping in any initiatory pleading filed before the Supreme Court and the Court o Appeals while Section 1, Rule 45 of the Rules of Civil Procedure requires the petition for review on certiorari to bverified, thereby making the verification and certification of non-forum shopping essential elements of a petition foreview on certiorari, which Macatlang herself was authorized under the Resolusyon to sign.

VI.

The Corporations argue that the case before the Court of Appeals should have been dismissed for failure oMacatlang to state the material dates in the petition. Section 3, Rule 46 of the Rules of Court mandates that in petition for certiorari before the Court of Appeals, the material dates showing when notice of the judgment orfinorder or resolution assailed was received, when the motion for reconsideration was filed, and when notice of thdenial thereof was received, must be indicated. Under the same rule, failure to state the material dates shall be ground for dismissal of the petition. The rationale for the requirement is to enable the appellate court to determin

whether the petition was filed within the period fixed in the rules.43

However, the strict requirements of the law mabe dispensed with in the interest of justice. It may not be amiss to point out this Court’s ruling in the case o

Acaylar, Jr. v. Harayo,44 and we quote:

We also agree with the petitioner that failure to state the material dates is not fatal to his cause of action, providethe date of his receipt, i.e., 9 May 2006, of the RTC Resolution dated 18 April 2006 denying his Motion foReconsideration is duly alleged in his Petition. In the recent case of Great Southern Maritime Services Corporatiov. Acuña, we held that "the failure to comply with the rule on a statement of material dates in the petition may bexcused since the dates are evident from the records." The more material date for purposes of appeal to thCourt of Appeals is the date of receipt of the trial court's order denying the motion for reconsideration. The othe

material dates may be gleaned from the records of the case if reasonably evident.45

In the instant case, the Corporations alleged in their petition before the Court of Appeals that when they receivethe Resolution of the NLRC on 6 July 2006, it can be determined whether the appeal to the Court of Appeals wafiled within the 60-day reglementary period. And as a matter of fact, the appeal was filed on 8 September 2006and well within the 60-day period.

VII.

Having disposed the procedural issues, we now tackle the Corporations’ arguments, in the main, calling for reduction of the appeal bond.



- , . ,who seek to avail themselves of it must comply with the statutes or rules allowing it.46 The primary rule governinappeal from the ruling of the labor arbiter is Article 223 of the Labor Code which provides:

Art. 223. Appeal. — Decisions, awards, or orders of the Labor Arbiter are final and executory unless appealed tthe Commission by any or both parties within ten (10)calendar days from receipt of such decisions, awards, oorders. 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 woul

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 thposting of a cash or surety bond issued by a reputable bonding company duly accredited by the Commission ithe amount equivalent to the monetary award in the judgment appealed from. (Emphasis supplied).

Article 223, under Presidential Decree No. 442, was amended by Republic Act No. 6715 to include the provisioon the posting of a cash or surety bond as a precondition to the perfection of appeal.

The requisites for perfection of appeal as embodied in Article 223, as amended, are: 1) payment of appeal fees

2) filing of the memorandum of appeal; and 3) payment of the required cash or surety bond.47 These requisitemust be satisfied within 10days from receipt of the decision or order appealed from.

In YBL v. NLRC,48 the Court was more liberal in construing Article 223. The NLRC dismissed the appeal for failurto post the bond. The Court favored the appellant partly because the appeal was made just after six (6) days frothe effectivity of the Interim Rules of Republic Act No. 6715. The Court observed that both parties did not knoabout the new rule yet.

It is presumed that an appeal bond is only necessary in cases where the labor arbiter’s decision or order containa monetary award. Conversely, when the labor arbiter does not state the judgment award, posting of bond may bexcused.

In YBL, the exact total amount due to the private respondents as separation pay was not stated which would havbeen the basis of the bond that is required to be filed by petitioners under the said law.

From an award of backwages and overtime pay by the labor arbiter in Rada v. NLRC,

49

petitioner therein failed t

post the supersedeas bond. Nevertheless, the Court gave due course to the appeal for "the broader interests o justice and the desired objective of resolving controversies on the merits." The amount of the supersedeas boncould not be determined and it was only in the NLRC order that the amount was specified and which bond, afteextension granted by the NLRC, was timely filed by petitioner.

In the same vein, the Court in Blancaflor v. NLRC,50 excused the failure of appellant to post a bond due to thfailure of the Labor Arbiter to state the exact amount of back wages and separation pay due.

Citing Taberrah v. NLRC51 and National Federation of Labor Union v. Hon. Ladrido III,52 the Court in Orozco v. Th

Fifth Division of the Court of Appeals53 postulated that "respondents cannot be expected to post such appeal bonequivalent to the amount of the monetary award when the amount thereof was not included in the decision of th

labor arbiter." The computation of the amount awarded to petitioner was not stated clearly in the decision of thlabor arbiter, hence, respondents had no basis in determining the amount of the bond to be posted.

Furthermore, when the judgment award is based on a patently erroneous computation, the appeal bon

equivalent to the amount of the monetary award is not required to be posted. Erectors, Inc. v. NLRC 54 is a gooexample on this point. The NLRC’s order to post a bond of P1,576,224.00 was nullified because the bond waerroneously computed on the basis of the salary which the employee was no longer receiving at the time of hseparation.

55



, .that a big portion of the award had already prescribed, the non-posting of appeal bond was excused.

In Dr. Postigo v. Phil. Tuberculosis Society, Inc.,56 respondent deferred the posting of the surety bond in view othe alleged erroneous computation by the labor arbiter of the monetary award. While the labor arbiter awardeP5,480,484.25 as retirement benefits, only P5,072,277.73, according to the respondent's computation, was duand owing to the petitioners.

In sum, the NLRC may dispense of the posting of the bond when the judgment award is: (1) not stated or(2) baseon a patently erroneous computation. Sans these two (2) instances, the appellant is generally required to post bond to perfect his appeal.

The Court adhered to a strict application of Article 223 when appellants do not post an appeal bond at all. B

explicit provision of law, an appeal is perfected only upon the posting of a cash or surety bond. The posting of thappeal bond within the period provided by law is not merely mandatory but jurisdictional.57 The reason behind th

imposition of this requirement is enunciated in Viron Garments Mfg. Co., Inc. v. NLRC,58 thus:

The requirement that the employer post a cash or surety bond to perfect its/his appeal is apparently intended tassure the workers that if they prevail in the case, they will receive the money judgment in their favor upon thdismissal of the employer's appeal. It was intended to discourage employers from using an appeal to delay, o

even evade, their obligation to satisfy their employees' just and lawful claims.59

Thus, when petitioners, in the cases of Ong v. Court of Appeals,60 Rural Bank of Coron (Palawan), Inc. v. Cortes,

Sy v. ALC,62 Ciudad Fernandina Food Corporation Employees Union-Association Labor Unions v. Court o

Appeals,63 and Stolt-Nielsen Maritime Services, Inc. v. NLRC,64 did not post a full or partial appeal bond, it was hel

that no appeal was perfected. A longer look on past rulings would show that:

In Nationwide Security and Allied Services, Inc. v. NLRC,65 it was found that petitioners had funds from its othebusinesses to post the required bond. The Court did not find as acceptable petitioner’s excuse, that "[using] fundfrom sources other than that earned from [its company is not] a sound business judgment" to exempt it fromposting an appeal bond.

Petitioner’s failure in Mers Shoes Mfg, Inc. v. NLRC,66 to post the required bond within the reglementary perioafter it has been ordered reduced, justified the dismissal of its appeal.

The labor arbiter’s decision in Santos v. Velarde67 stated the exact award of backwages to be paid by petitione

thus the Court affirmed the dismissal of the appeal by the non-payment of the appeal bond within the 10-da

period provided by law.

Even if petitioner in Heritage Hotel Manila v. NLRC68 questioned as basis of the appeal bond the computation othe monetary award, the Court did not excuse it from posting a bond in a reasonable amount or what it believed tbe the correct amount.

In Banahaw Broadcasting Corporation v. Pacana III,69 the NLRC issued an order denying petitioner’s motion forecomputation of the monetary award and ordered it to post the required bond within 10 days.

When BBC further demonstrated its unwillingness by completely ignoring this warning and by filing a Motion foReconsideration on an entirely new ground, we held that the NLRC cannot be said to have committed grave abus

of discretion by making good its warning to dismiss the appeal. 70

Upon the other hand, the Court did relax the rule respecting the bond requirement to perfect appeal in casewhere: (1) there was substantial compliance with the Rules, (2) surrounding facts and circumstances constitutmeritorious grounds to reduce the bond, (3) a liberal interpretation of the requirement of an appeal bond woulserve the desired objective of resolving controversies on the merits, or (4) the appellants, at the very leas

exhibited their willingness and/or good faith by posting a partial bond during the reglementary period. 71

In Lopez v. Quezon City Sports Club Inc.,72 the posting of the amount of P4,000,000.00 simultaneously with thfiling of the motion to reduce the bond to that amount, as well as the filing of the memorandum of appeal, all withithe reglementary period, altogether constitute substantial compliance with the Rules. In Intertranz Container Line



nc. v. au s a, s our as re axe e appea on requ remen w en was c ear rom e recor s apetitioners never intended to evade the posting of an appeal bond. In Semblante v. Court of Appeals,74 the Coustated that the rule on the posting of an appeal bond cannot defeat the substantive rights of respondents to bfree from an unwarranted burden of answering for an illegal dismissal for which they were never responsible. It wafound that respondents, not being petitioners’ employees, could never have been dismissed legally or illegally. I

the recent case of Garcia v. KJ Commercial,75 respondent showed willingness to post a partial bond when it postea P50,000.00 cash bond upon filing of a motion to reduce bond. In addition, when respondent’s motion foreconsideration was denied, it posted the full surety bond.

The old NLRC Rules of Procedure, which took effect in 5 November 1993,76 provides:

SECTION 6. Bond. — In case the decision of a Labor Arbiter POEA Administrator and Regional Director or his du

authorized hearing officer involves a monetary award, an appeal by the employer shall be perfected only upon thposting of a cash or surety bond issued by a reputable bonding company duly accredited by the Commission othe Supreme Court in an amount equivalent to the monetary award, exclusive of moral and exemplary damageand attorney’s fees.

The employer as well as counsel shall submit a joint declaration under oath attesting that the surety bond posteis genuine and that it shall be in effect until final disposition of the case.

The Commission may, in meritorious cases and upon Motion of the Appellant, reduce the amount of the bond. (Aamended by Nov. 5, 1993) (Emphasis Supplied).

Thus, appellants are given the option to file a motion to reduce the amount of bond only in meritorious cases. Ithe NLRC New Rules of Procedure promulgated in 2002, another qualification to the reduction of an appeal bon

was added in Section 6 thereof:

No motion to reduce bond shall be entertained except on meritorious grounds, and only upon the posting of bond in a reasonable amount in relation to the monetary award. (Emphasis Supplied).

Said Rules significantly provide that:

The filing of the motion to reduce bond without compliance with the requisites in the preceding paragraphs, shanot stop the running of the period to perfect an appeal.

Clearly therefore, the Rules only allow the filing of a motion to reduce bond on two (2) conditions: (1) that there imeritorious ground and (2) a bond in a reasonable amount is posted. Compliance with the two conditions stops thrunning of the period to perfect an appeal provided that they are complied within the 10-day reglementary period.

In Ramirez v. Court of Appeals,77 the Court did not find any merit to reduce the bond. Although Ramirez posted aappeal bond, the same was insufficient, as it was not equivalent to the monetary award of the Labor ArbiteMoreover, when Ramirez sought a reduction of the bond, he merely said that the bond was excessive anbaseless without amplifying why he considered it as such.

The grounds to be cited in the motion to reduce must be valid and acceptable. For instance, in Pasig Cylinde

Mfg., Corp. v. Rollo,78 we found as acceptable reason for reducing the appeal bond the downscaling of theoperations considered together with the amount of the monetary award appealed. In University Plans Incorporate

v. Solano,79 the fact of receivership was considered as a meritorious ground in reducing the appeal bond.

Since the intention is merely to give the NLRC an idea of the justification for the reduced bond, the evidence fo

the purpose would necessarily be less than the evidence required for a ruling on the merits. 80 As a matter of fac

in Star Angel, the NLRC was ordered to make a preliminary determination on the merits for granting a reduction othe appeal bond. In University Plans, the Court took into consideration the fact that petitioner was undereceivership and it was possible that petitioner has no liquid asset and it could not raise the amount of more thaP3Million within a period of 10-days from receipt of the Labor Arbiter’s judgment. Therefore, the Court ordered remand of the case to the NLRC for the conduct of preliminary determination of the merit or lack of merit opetitioner’s motion to reduce bond. The Court adopted the ruling in Nicol v. Footjoy Industrial Corp., where thcase was also remanded to the NLRC to determine the merits of the motion to reduce in view of our finding thathe NLRC in that case gravely abused its discretion when it dismissed Footjoy’s appeal, without even receivinevidence from which it could have determined the merit or lack of it of the motion to reduce the appeal bond.



In the recent case of McBurnie v. Ganzon,81 we held that merit may "pertain to an appellant’s lack of financiacapability to pay the full amount of the bond, the merits of the main appeal such as when there is a valid claim thathere was no illegal dismissal to justify the award, the absence of an employer-employee relationship, prescriptioof claims, and other similarly valid issues that are raised in the appeal. For the purpose of determining ‘meritorious ground,’ the NLRC is not precluded from receiving evidence, or from making a preliminar

determination of the merits of the appellant’s contentions."82

In order to toll the running of the period to appeal once the motion for reduction is filed, McBurnie has set parameter on what amount is reasonable for such purpose:

To ensure that the provisions of Section 6, Rule VI of the NLRC Rules of Procedure that give parties the chance tseek a reduction of the appeal bond are effectively carried out, without however defeating the benefits of the bon

requirement in favor of a winning litigant, all motions to reduce bond that are to be filed with the NLRC shall baccompanied by the posting of a cash or surety bond equivalent to 10% of the monetary award that is subject othe appeal, which shall provisionally be deemed the reasonable amount of the bond in the meantime that aappellant’s motion is pending resolution by the Commission. In conformity with the NLRC Rules, the monetaraward, for the purpose of computing the necessary appeal bond, shall exclude damages and attorney’s fees. Onafter the posting of a bond in the required percentage shall an appellant’s period to perfect an appeal under th

NLRC Rules be deemed suspended.83 (Emphasis and underline supplied).

While McBurnie has effectively addressed the preliminary amount of the bond to be posted in order to toll thrunning of the period to appeal, there is no hard and fast rule in determining whether the additional bond to bposted is reasonable in relation to the judgment award.

In Rosewood Processing Inc. v. NLRC,84 we found the reduced bond of P50,000.00 acceptable as substantiacompliance relative to the P789,000.00 judgment award. In Nicol, the P10 Million bond was enough to perfecappeal from a P51.9 Million judgment award.

In Lopez v. Quezon City Sports Club, Inc., the NLRC ordered the posting of an additional P6 Million and held acompliant a P10 Million bond relative to the judgment award of P27 Million. In Pasig Cylinder Mfg. Corp. v. Rollowe ruled that the reduced appeal bond of P100,00.00 satisfies the requirement for an appeal from the judgmenaward of P3.13 Million. In University Plans, the P30,000.00 bond was accepted in perfecting an appeal from P3.013 Million judgment.

In the case at bar, the motion to reduce bond filed by the Corporations was resolved by the NLRC in thaffirmative when it found that there are meritorious grounds in reducing the bond such as the huge amount of thaward and impossibility of proceeding against the Corporations’ properties which correspond to a lower valuation

Also, the NLRC took into consideration the fact of partial payment of P419 Million. The NLRC found the P4Million bond posted by the Corporations as insufficient, hence ordering them to post an additional P4.5 MillioThus, P9 Million was held as the amount of the bond as reduced.

The Court of Appeals found the amount of the appeal bond adjudged by the NLRC as measly and insufficient anraised it to P1 Billion. The appellate court rationalized:

The required Php3.453 BILLION appeal bond sought to be reduced by the private respondents is equivalent to aaverage of Php452,140.00 separation pay for each of the 7,637 employees held to be illegally dismissed by themployer who sought a reduction of the required Php3.453 BILLION appeal bond because the employer allegedput up Php428 Million which consists of the Php419 MILLION unpaid commitment plus the Php9 Million alreadpaid-up cash appeal bond.

Even if we consider Php 419 MILLION unpaid commitment plus the Php 9 Million already paid-up cash appeabond, the unpaid appeal bond is still Php 3.025 BILLION. Php428 Million is still miniscule compared to thPhp3.025 BILLION unpaid portion of the appeal bond. What the 7,637 workers need is cash or surety guaranty the event of renewed victory on appeal for the 7,637 petitioners-employees who were awarded one month salarfor every year of service as separation pay totaling Php3.453 BILLION Pesos. Php419 MILLION Pesos promisand the Php3.025 BILLION unpaid appeal bond both become more obscure if the employer would be permitted tsubsequently employ artifices to evade execution of judgment.

The decision to reduce the amount of appeal bond is not a blanket power to the NLRC, because the discretion inot unbridled and is sub ect to strict uidelines because Art. 223 of the Labor Codeis a rule of urisdiction tha



affords little leeway for liberal interpretation. The order of the NLRC reducing the required appeal bond from Ph3.453 BILLION Pesos to only Php 9 MILLION Pesos is in grave abuse of its discretion and therefore void, not tmention that it is per se unreasonable and without factual basis.

We have considered the circumstances and evidence presented in this case relative to the motion to reducappeal bond.1 â w p h i 1 We have taken into consideration the Php 419 MILLION unpaid commitment plus the Php 9 Millioalready paid-up cash appeal bond, and the resulting unpaid appeal bond which is still Php 3.025 BILLION. We stdeem it proper under the law and the Constitution for the protection of labor that private respondents be requireas pre-requisite to perfecting appeal, to POST, within thirty (30) days from finality of this judgment, additionaappeal bond of Php 1 BILLION Pesos, in cash or surety, which amount is even less than one-third (1/3) of thoriginal appeal bond required by law, which We hold to be reasonable under the circumstances and to be baseon the evidence presented in this case. The additional appeal bond of Php 1 BILLION is equivalent to an averag

of Php 130,941.46 (instead of the original average of Php452,140.00) for each of the alleged illegally dismisse7,637 workers.85 Notably, the computation of the judgment award in this case includes damages.

The NLRC Interim Rules on Appeals under Republic Act No. 6715 specifically provides that damages shall bexcluded in the determination of the appeal bond, thus:

SECTION 7. Bond. In case of a judgment of the Labor Arbiter involving a monetary award, an appeal by themployer shall be perfected only upon the posting of a cash or surety bond issued by a reputable bondincompany duly accredited by the Commission in an amount equivalent to the monetary award in the judgmenappealed from.

For purposes of the bond required under Article 223 of the Labor Code, as amended, the monetary awarcomputed as of the date of promulgation of the decision appealed from shall be the basis of the bond. For th

purpose, moral and exemplary damages shall not be included in fixing the amount of the bond.

Pending the issuance of the appropriate guidelines for accreditation, bonds posted by bonding companies du

accredited by the regular courts, shall be acceptable. (Emphasis supplied). When the rules were amended 1993, attorney’s fees were also excluded in the judgment award for the purpose of computing the appeal bondviz:

SECTION 6. BOND. - In case the decision of the Labor Arbiter, POEA Administrator and Regional Director or hduly authorized hearing officer involves a monetary award, an appeal by the employer shall be perfected onupon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by thCommission or the Supreme Court in an amount equivalent to the monetary award, exclusive of moral anexemplary damages and attorney’s fees.

Subsequently, in an amendment by NLRC Resolution No. 01-02, Series of 2002, the rules in effect at the time thappeal bond was interposed by the Corporations, the provision on exclusion of damages and attorney’s fees wa

retained:86

SECTION 6. BOND. - In case the decision of the Labor Arbiter or the Regional Director involves a monetary awardan appeal by the employer may be perfected only upon the posting of a cash or surety bond. The appeal bonshall either be in cash or surety in an amount equivalent to the monetary award, exclusive of damages anattorney’s fees.

Thus, under the applicable rules, damages and attorney’s fees are excluded from the computation of the monetaraward to determine the amount of the appeal bond. We shall refer to these exclusions as "discretionaries," adistinguished from the "mandatories" or those amounts fixed in the decision to which the employee is entitled upoapplication of the law on wages. These mandatories include awards for backwages, holiday pay, overtime payseparation pay and 13th month pay.

As a matter of fact, in Erectors, Inc. v. NLRC,87 it was concluded that no bond is required if an appeal raises n

question other than as regards the award of moral and/or exemplary damages. In Cosico, Jr., v. NLRC,88 themployer was held to have substantially complied with the requirement when it posted the bond on time based othe monetary award for backwages and thirteenth month pay, excluding the exorbitant award for moral anexemplary damages.



e u gmen awar n e ns an case amoun e o an mmense . on. e awar s ro en own afollows: backwages, separation pay, moral and exemplary damages. For purposes of determining the reasonablamount of the appeal bond, we reduce the total amount of awards as follows:

The mandatories comprise the backwages and separation pay. The daily wage rate of an employee of Aris rangefrom P170-P200. The average years of service ranges from 5-35 years. The backwages were computed at 10months or reckoned from the time the employees were actually terminated until the finality of the Labor ArbiterDecision. Approximately, the amount to be received by an employee, exclusive of damages and attorney’s fees, about P600,000.00. The Labor Arbiter granted moral damages amounting to P10,000.00, and another P10,000.0as exemplary damages. The total number of employees receiving P20,000.00 each for damages is 5,984, bringinthe total amount of damages to P119,680,000.00. This amount should be deducted as well as the P419 Milliounpaid commitment plus the P 9 Million already paid-up cash appeal bond from the actual amount to determine th

amount on which to base the appeal bond. Thus, the total amount is P2.9 Billion.

We sustain the Court of Appeals in so far as it increases the amount of the required appeal bond. But we deem reasonable to reduce the amount of the appeal bond to P725 Million. This directive already considers that thaward if not illegal, is extraordinarily huge and that no insurance company would be willing to issue a bond for sucbig money. The amount of P725 Million is approximately 25% of the basis above calculated. It is a balancing of thconstitutional obligation of the state to afford protection to labor which, specific to this case, is assurance that icase of affirmance of the award, recovery is not negated; and on the other end of the spectrum, the opportunity othe employer to appeal.

By reducing the amount of the appeal bond in this case, the employees would still be assured of at leassubstantial compensation, in case a judgment award is affirmed. On the other hand, management will not beffectively denied of its statutory privilege of appeal.

VIII.

The Corporations invoked the decision issued by the NLRC last 19 December 2006 which set aside the laboarbiter’s decision and ordered remand of the case to the forum of origin to have the instant petitions dismissed fobeing moot.

When the NLRC granted the motion to reduce the appeal bond and the Corporations posted the requireadditional bond, the appeal was deemed to have been perfected. The act of the NLRC in deciding the case wabased on petitioner’s appeal of the labor arbiter’s ruling, which it deemed to have been perfected and thereforeripe for decision.

Prudence however dictates that the NLRC should not have decided the case on its merits during the pendency othe instant petition. The very issue raised in the petitions determines whether or not the appeal by thCorporations has been perfected. Until its resolution, the NLRC should have held in abeyance the resolution of thcase to prevent the case from being mooted. The NLRC decision was issued prematurely.

WHEREFORE, the Decision of the Court of Appeals in CA-G.R. SP No. 96363 dated 26 March 2007 is MODIFIEDThe Corporations are directed to post 1!725 Million, in cash or surety bond, within TEN ( 10) days from the receipof this DECISION. The Resolution of the NLRC dated 19 December 2006 is VACATED for being premature and thNLRC is DIRECTED to act with dispatch to resolve the merits of the case upon perfection of the appeal.

SO ORDERED.

JOSE PORTUGAL PEREZ

Associate Justice

WE CONCUR:

ANTONIO T. CARPIO

Associate JusticeChairperson

ARTURO D. BRION

Associate JusticeMARIO C. DEL CASTILLO

Associate Justice



ESTELA M. PERLAS-BERNABE

Associate Justice

A T T E S T A T I O N

I attest that the conclusions in the above Decision had been reached in consultation before the case was assigneto the writer of the opinion of the Court's Division.

ANTONIO T. CARPIO


C E R T I F I C A T I O N

Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson's Attestation, I certify that thconclusions in the above Decision had been reached in consultation before the case was assigned to the writer othe opinion of the Court's Division.

MARIA LOURDES P. A. SERENO

Chief Justice

Footnotes

1 Due to the sheer number of complainants, the names of the 5,983 others were omitted but which could bfound in the annexes of the Labor Arbiter's decision. See Rollo (G.R. No. 180147), pp. 230-348.

2 Rollo (G.R. No. 180319, Vol. I), p. 12.

3 Id. at 49-50.

4 Id. at 13.

5 Rollo (G.R. No. 180150), p. 14.

6 The original number of complainants is 7,637, however upon counter-checking, the number was reduce

to 5,984 because a good number of complainants filed their complaints several times. See Labor ArbiteDecision. Rollo (G.R. No. 180147), p.197.

7 The Union submitted a proposal for the renegotiation of the CBA but Aris gave no counterproposaThereafter, Aris sent a notice of closure to all its employees. Id. at 208-209.

8 Rollo (G.R. No. 180148), p. 17.

9 Id. at 87.

10 Id. at 18.

11 Rollo (G.R. No. 180319, Vol. III), p. 1751.

12 Id. at 1752.

13 Id.

14 Id. at 359.

15 Id. at 241.

16 Id. at 360-373.



17 Rollo (G.R. No. 180147), p. 22.

18 Rollo (G.R. No. 180319, Vol. I), pp. 365-369.

19 Rollo(G.R. No. 180150), p. 431.


21 Id. at 130.

22 Rollo (G.R. No. 180147), pp. 577-578.

23 Rollo (G.R. No. 180150), pp. 26-27.

24 Rollo (G.R. No. 180147), p. 789.

25 Rollo (G.R. No. 180319, Vol. I), p. 27.

26 Id. at 29-32.

27 Rollo (G.R. No. 180149), pp. 908-909.

28 The petition was dismissed on technical grounds by the Court of Appeals on 17 November 2006. Id. a902.

29 Id. 35-38.

30 Id. at 34-45.

31 Id. at 50.

32 Id. at 51.

33 Id. at 58.

34 Id. at 79.


36 Rollo (G.R. No. 180685), pp. 10-17.

37 Rollo (G.R. No. 180148), pp. 1191-1201.

38 SM Systems Corporation v. Camerino, G.R. No. 178591, 26 July 2010, 625 SCRA 482, 489 citing AttyBriones v. Henson-Cruz, 585 Phil. 63, 80 (2008).

39 Yu v. Lim,G.R. No. 182291, 22 September 2010, 631 SCRA 172, 184 citing Lim v. Judge Vianzon, 52Phil. 472, 484-485 (2006) citing further Rudecon Management Corporation v. Singson, 494 Phil. 581, 599600 (2005).

40 In Re: Reconstitution of Transfer Certificates of Title Nos. 303168 and 303169 and Issuance of OwnerDuplicate Certificates of Title in Lieu of those Lost, Rolando Edward G. Lim, G.R. No. 156797, 6 July 2010624 SCRA 81, 88-89 citing Cooperative Development Authority v. Dolefil Agrarian Reform BeneficiarieCooperative, Inc., 432 Phil. 290, 317 (2002); Sps. Cruz v. Sps. Caraos,550 Phil. 98, 110 (2007); Republic Carmel Development, Inc, 427 Phil. 723, 739 (2002); R & M General Merchandise, Inc. v. Court of Appeals419 Phil. 131, 145 (2001); Prubankers Association v. Prudential Bank and Trust Company,361 Phil. 744755 (1999); Cebu International Finance Corp. v. Court of Appeals, 374 Phil. 844, 857 (1999).

41 Rollo (G.R. No. 180149), p. 902.



42 Id. at 622.

43 Technological Institute of the Philippines Teachers and Employees Organization (TIPTEO) v. Court o Appeals,608 Phil. 632 (2009).

44 582 Phil. 600, 612 (2008) citing Great Southern Maritime Services Corp. v. Acuña, 492 Phil. 518, 525-52(2005); Security Bank Corporation v. Indiana Aerospace University, 500 Phil. 51, 57-60 (2005).

45 Acaylar, Jr. v. Harayo, id.

46 Calipay v. National Labor Relations Commission, G.R. No. 166411, 3 August 2010, 626 SCRA 409, 41citing McBurnie v. Ganzon, G.R. Nos. 178034, 178117, 186984-85, 18 September 2009, 600 SCRA 658672; Land Bank of the Philippines v. Ascot Holdings and Equities, Inc., 562 Phil. 974, 983-984 (2007Philippine Long Distance Telephone Company v. Raut, 613 Phil. 427 (2009) citing Accessories SpecialisInc. v. Alabanza, 581 Phil. 517, 530 (2008) citing further Cuevas v. Bais Steel Corporation, 439 Phil. 793805 (2002).

47 Ramirez v. Court of Appeals, G.R. No. 182626, 4 December 2009, 607 SCRA 752, 761 citing CiudaFernandina Food Corporation Employees Union-Associated Labor Unions v. Court of Appeals, 528 Ph415, 430 (2006).

48 268 Phil. 169 (1990).

49 G.R. No. 96078, 9 January 1992, 205 SCRA 69, 205 SCRA 69, 76.

50 G.R. No. 101013, 2 February 1993, 218 SCRA 366.

51 342 Phil. 394 (1997).

52 274 Phil. 244 (1991).

53 497 Phil. 227, 236 (2005).

54 G.R. No. 93690, 10 October 1991, 202 SCRA 597.

55 G.R. No. 108914, 20 September 1994, 236 SCRA 580.

56 515 Phil. 601 (2006).

57 Banahaw Broadcasting Corp. v. Pacana III, G.R. No. 171673, 30 May 2011, 649 SCRA 196, 210.

58 G.R. No. 97357, 18 March 1992, 207 SCRA 339.

59 Id. at 342.

60 482 Phil. 170 (2004).

61 539 Phil. 498 (2006).

62

589 Phil. 354 (2008).63 Supra note 42.

64 513 Phil. 642 (2005).

65 341 Phil. 393, 403 (1997).

66 350 Phil. 294 (1998).



. .

68 614 Phil. 320 (2009).

69 Supra note 52.

70 Id.

71 Nicol v. Footjoy Industrial Corp., 555 Phil. 275, 292 (2007).

72 596 Phil. 204 (2009).

73 G.R. No. 187693, 13 July 2010, 625 SCRA 75.

74 G.R. No. 196426, 15 August 2011, 655 SCRA 444.

75 G.R. No. 196830, 29 February 2012, 667 SCRA 396.

76 As amended by Resolution No. 01-02, series of 2002. It amended certain provisions of the New Rules oProcedure of the NLRC which was promulgated on February 12, 2002 and took effect on March 18, 2002.

77 G.R. No. 182626, 4 December 2009, 607 SCRA 752.

78 G.R. No. 173631, 8 September 2010, 630 SCRA 320.

79

G.R. No. 170416, 22 June 2011, 652 SCRA 492.80 Id. at 506.

81 G.R. Nos. 178034 & 178117, G.R. Nos. 186984-85, 17 October 2013.

82 Id.

83 Id.

84 352 Phil. 1013 (1998).

85 Rollo (G.R. No. 180149), pp. 122-123.

86 It was likewise retained in the present 2011 NLRC Rules of Procedure.

87 Supra note 49.

88 338 Phil. 1080 (1997).

The Lawphil Project - Arellano Law Foundation





Manila

SECOND DIVISION

G.R. No. 196830 February 29, 2012

CESAR V. GARCIA, CARLOS RAZON, ALBERTO DE GUZMAN, TOMAS RAZON, OMER E. PALO, RIZALDVALENCIA, ALLAN BASA, JESSIE GARCIA,JUANITO PARAS, ALEJANDRO ORAG, ROMMEL PANGAN, RUESOLIMAN, and CENEN CANLAPAN, represented by SERENO, and CESAR V. GARCIA, Petitioners,vs.KJ COMMERCIAL and REYNALDO QUE, Respondents.

D E C I S I O N

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 Ap

2011 Decision2 of the Court of Appeals in CA-G.R. SP No. 115851, affirming the 8 February3 and 25 June4 201Resolutions of the National Labor Relations Commission (NLRC) in NLRC-LAC-No. 12-004061-08. The NLRC se

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 distributincement products. On different dates, KJ Commercial employed as truck drivers and truck helpers petitioners Cesa

V. Garcia, Carlos Razon, Alberto De Guzman, Tomas Razon, Omer E. Palo, Rizalde Valencia, Allan Basa, JessiGarcia, 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 grantheir demand, they stopped working and abandoned their trucks at the Northern Cement Plant Station in SisonPangasinan. They also blocked other workers from reporting to work.

On 3 February 2006, petitioners filed with the Labor Arbiter a complaint6 for illegal dismissal, underpayment osalary and non-payment of service incentive leave and thirteenth month pay.

The Labor Arbiter’s Ruling

In his 30 October 2008 Decision, the Labor Arbiter held that KJ Commercial illegally dismissed petitioners. Th

Labor Arbiter held:

After a careful examination and evaluation of the facts and evidences adduced by both parties, we find valid ancogent reasons to declare that these complainants were illegally dismissed from their work to be entitled to theseparation in lieu of reinstatement equivalent to their salary for one (1) month for every year of service anbackwages 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 fromtheir employment but were the one [sic] who abandoned their work by staging strike and refused to perform the

- -



, , - - ,claims of the complainants that when they asked for an increase of their salary for P40.00, they were illegaldismissed from their employment without due process, and we gave more credence and value to the allegations othe complainants that they were illegally dismissed from their employment without due process and did noabandoned [sic] their work as the respondents wanted to project. We examined the narration of facts of threspondents in their Position Paper and Supplemental Position Paper and we concluded that these complainanwere actually terminated on January 2, 2006 and did not abandoned [sic] their jobs as claimed by the respondenwhen the respondents, in their Position Paper, admitted that their cement plant was shutdown on January 3, 200and when it resumed its operation on January 7, 2006, they ordered the other drivers to get the trucks in ordethat 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, whthen that [sic] the cement plant was shutdown on January 3, 2006 and resumed operation on January 7, 2006when there are fifty (50) drivers of the respondents and only thirteen (13) of them were allegedly stopped fromworking. Further, if these complainants actually abandoned their work, as claimed by the respondents, themiserably failed to show by substantial evidence that these complainants deliberately and unjustifiably refused tresume their employment.

x x x x

The acts of these complainants in filing this instant case a month after they were terminated from their work more than sufficient evidence to prove and show that they do not have the intention of abandoning their workWhile we acknowledged the offer of the respondents for these complainants to return back to work during thmandatory conference, the fact that these complainants were illegally terminated and prevented from performintheir work as truck drivers of the respondents and that there was no compliance with the substantive an

procedural due process of terminating an employee, their subsequent offer to return to work will not cure thdefect 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 P50,00cash bond.

The NLRC’s 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 oP50,000.00 only. x x x

We find no merit on [sic] the respondents-appellants’ Motion. It must be stressed that under Section 6, Rule VI othe 2005 Revised Rules of this Commission, a motion to reduce bond shall only be entertained when the followinrequisites 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 threquired appeal bond, they are unwilling to at least put up a property to secure a surety bond. Understandably, nsurety agency would normally accept a surety obligation involving a substantial amount without a guarantee that would be indemnified in case the surety bond posted is forfeited in favor of a judgment creditor. Respondentsappellants’ insinuation that no surety company can finish the processing of a surety bond in ten days time is no

worthy of belief as it is contrary to ordinary business experience. What is obvious is that respondents-appellantare not willing to accept the usual conditions of a surety agreement that is why no surety bond could bprocessed. The reduction of the required bond is not a matter of right o[n] the part of the movant but lies within thsound discretion of the NLRC upon showing of meritorious grounds x x x. In this case, we find that the instan

motion is not founded on a meritorious ground. x x x Moreover, we note that the P50,000.00 cash bond posted brespondents-appellants which represents less than two (2) percent of the monetary award is dismaldisproportionate to the monetary award of P2,612,930.00 and that the amount of bond posted by respondentsappellants is not reasonable in relation to the monetary award. x x x A motion to reduce bond that does not satisfthe 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 201Resolution, the NLRC granted the motion and set aside the Labor Arbiter’s 30 October 2008 Decision. The NLRheld:

x x x [T]his Commission opts to resolve and grant the Motion for Reconsideration filed by respondent-appellanseeking for reconsideration of Our Decision promulgated on March 9, 2009 dismissing the Appeal for nonperfection, there being an honest effort by the appellants to comply with putting up the full amount of the requireappeal bond. Moreover, considering the merit of the appeal, by granting the motion for reconsideration, thparamount interest of justice is better served in the resolution of this case.

x x x x

Going over the record of the case, this Commission noted that in respondents’ Supplemental Position Paper, denying complainants’ imputation of illegal dismissal, respondents categorically alleged "..[.] that complainanwere not illegally dismissed but on January 2, 2006, they abandoned their work by means of [‘]work stoppage[’] othey engaged in an [‘]illegal strike[’] when they demanded for a higher rate..[.] that while their respective assignetrucks were all in the cement plant ready to be loaded, complainants paralyzed respondents’ hauling or truckinoperation by staging a work stoppage at the premises of KJ Commercial compound by further blocking their codrivers not to report for work." We have observed that despite these damaging allegations, complainants nevebothered to dispute nor contradicted these material allegations. Complainants’ silence on these materiaallegations consequently lends support to respondents-appellants[’] contention that complainants were nevedismissed at all but had stopped driving the hauler truck assigned to each of them when their demand for salar

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 bthe Labor Arbiter a quo as the principal cause of complainants’ purported dismissal cannot be attributed trespondents because it was never established by evidence that respondents were the owner [sic] of the cemenplant where complainants as truck drivers were hauling cargoes of cement with trucks owned by respondenwhose business is confined to that of a cement distributor and cargo truck hauler. Based on the undisputeaccount of respondents-appellants, it appears that the cement plant was compelled to shut down because thhauling or trucking operation was paralyzed due to complainants’ resort to work stoppage by refusing to drive thehauler 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 ove

acts showing how they were in fact dismissed on 02 January 2006. The complainants had not even alleged thathey were specifically told that they were dismissed after they demanded for a salary increase or any statement tthat effect. Neither had they alleged that they were prevented from reporting for work. This only shows there wanever a dismissal to begin with.

x x x x

We cannot affirm the Labor Arbiter’s conclusions absent showing a fact of termination or circumstances undewhich the dismissal was effected. Though only substantial evidence is required in proceedings before the Labo Arbiter to support a litigant’s claim, the same still requires evidence separate and different, and something whicsupports the allegations affirmatively made. The complainants’ claim that they were dismissed on 02 Januar

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 lac

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 appeabond. Having earlier denied the motion to reduce bond of the respondents-appellants, this Commission is noprecluded from reconsidering its earlier Decision on second look when it finds meritorious ground to serve thends of justice. Settled is the norm in the matter of appeal bonds that letter-perfect rules must yield to the broadeinterest of substantial justice x x x. In this case, the Decision of the Labor Arbiter had not really become final anexecutor as res ondents timel filed a Memorandum of A eal with a Motion to Reduce A eal Bond and



partial appeal bond. Although the respondents[’] appeal was dismissed, in the earlier decision, the same Decisiowas later reconsidered on considerations that the Labor Arbiter committed palpable errors in his findings and thmonetary awards to the appellees are secured by a partial bond and then later, by an appeal bond for the fu

amount of the monetary awards.12

Petitioners filed with the Court of Appeals a petition13 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 NLRC’s 8 February an25 June 2010 Resolutions. The Court of Appeals held:

After scrupulously examining the contrasting positions of the parties, and the conflicting decisions of the labotribunals, We find the records of the case bereft of evidence to substantiate the conclusions reached by the Labo Arbiter that petitioners were illegally dismissed from employment.

While petitioners vehemently argue that they were unlawfully separated from work, records are devoid of evidencto show the fact of dismissal. Neither was there any evidence offered by petitioners to prove that they were nlonger allowed to perform their duties as truck drivers or they were prevented from entering KJ Commercialpremises, except for their empty and general allegations that they were illegally dismissed from employment. Sucbare and sweeping statement contains nothing but empty imputation of a fact that could hardly be given anevidentiary weight by this Court. At the very least, petitioners should have detailed or elaborated thcircumstances surrounding their dismissal or substantiate their claims by submitting evidence to butress succontention. Without a doubt, petitioners’ allegation of illegal dismissal has no leg to stand on. Accordingly, the

should not expect this Court to swallow their asseveration hook, line and sinker in the absence of supporting proo Allegation that one was illegally dismissed from work is not a magic word that once invoked will automatically swathis Court to rule in favor of the party invoking it. There must first be substantial evidence to prove that indee

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 Arbiter’s 30 October 2008 Decision became final and executory; thus, thNLRC’s 8 February and 25 June 2010 Resolutions and the Court of Appeals’ 29 April 2011 Decision are void folack of jurisdiction. Petitioners claim that KJ Commercial failed to perfect an appeal since the motion to reducbond did not stop the running of the period to appeal.

The Court’s 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 Labo Arbiter’s 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 O

JURISDICTION WHEN IT REVERSED THE DECISION OF THE LABOR ARBITER A QUO AND PRONOUNCETHAT THE PETITIONERS WERE NOT ILLEGALLY DISMISSED DESPITE CLEAR AND SUBSTANTIAEVIDENCE ON THE RECORDS SHOWING THAT COMPLAINANTS WERE REGULAR EMPLOYEES TO BENTITLED 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 OJURISDICTION WHEN IT GIVE [sic] MUCH WEIGHT TO PRIVATE RESPONDENTS[’] BASELES



COMPLAINANTS HAD ABANDONED THEIR WORK BY MEANS OF "WORK STOPPAGE" OR THEENGAGED IN AN "ILLEGAL STRIKE" WHEN THEY DEMANDED FOR A HIGHER RATE.

III.

THE NLRC GRAVELY ERRED TANTAMOUNT TO LACK OR EXCESS OF JURISDICTION WHEN ICONCLUDED THAT "COMPLAINANTS PARALYZED HAULING OR TRUCKING OPERATION BY STAGING WORK STOPPAGE AT THE PREMISES OF KJ COMMERCIAL COMPOUND BY FURTHER BLOCKINTHEIR CO-DRIVERS NOT TO REPORT FOR WORK" WITHOUT A SINGLE EVIDENCE TO SUPPORT SUC ALLEGATIONS OF PRIVATE RESPONDENTS.

IV.

THE NLRC GRAVELY ERRED WHEN IT CONCLUDED THAT THE PRINCIPAL CAUSE OF COMPLAINANTSDISMISSAL WAS DUE TO THE PURPORTED SHUTDOWN OF THE CEMENT PLANT CITED BY THE LABO

ARBITER IN HIS DECISION.15

Accordingly, the Court of Appeals limited itself to the resolution of the enumerated issues. In its 29 April 201Decision, the Court of Appeals held:

Hence, petitioners seek recourse before this Court via this Petition for Certiorari challenging the NLRC Resolutionand raising the following issues:

I.

THE NLRC COMMITTED GRAVE ABUSE OF DISCRETION TANTAMOUNT TO LACK OR EXCESS OJURISDICTION WHEN IT REVERSED THE DECISION OF THE LABOR ARBITER A QUO AND PRONOUNCETHAT PETITIONERS WERE NOT ILLEGALLY DISMISSED DESPITE CLEAR AND SUBSTANTIAL EVIDENCON THE RECORDS SHOWING THAT PETITIONERS WERE REGULAR EMPLOYEES TO BE ENTITLED TSECURITY OF TENURE AND WERE ILLEGALLY DISMISSED FROM THEIR EMPLOYMENT.

II.

THE NLRC HAS COMMITTED GRAVE ABUSE OF DISCRETION TANTAMOUNT TO LACK OR EXCESS OJURISDICTION WHEN IT GAVE MUCH WEIGHT TO PRIVATE RESPONDENTS BASELESS ALLEGATIONS IITS [sic] MOTION FOR RECONSIDERATION WHEN IT [sic] ALLEGED THAT PETITIONERS HA ABANDONED THEIR WORK BY MEANS OF "WORK STOPPAGE" OR THEY ENGAGED IN AN "ILLEGA

STRIKE" WHEN THEY DEMANDED FOR A HIGHER RATE.

III.

THE NLRC GRAVELY ERRED WHEN IT CONCLUDED THAT "PETITIONERS PARALYZED HAULING ANTRUCKING OPERATION BY STAGING A WORK STOPPAGE AT THE PREMISES OF KJ COMMERCIACOMPOUND BY FURTHER BLOCKING THEIR CO-DRIVERS NOT TO REPORT FOR WORK" WITHOUT SINGLE EVIDENCE TO SUPPORT SUCH ALLEGATIONS OF PRIVATE RESPONDENTS.

IV.

THE NLRC GRAVELY ERRED WHEN IT CONCLUDED THAT THE PRINCIPAL CAUSE OF PETITIONERSDISMISSAL WAS DUE TO THE PURPORTED SHUTDOWN OF THE CEMENT PLANT CITED BY THE LABO

ARBITER IN HIS DECISION.16

Petitoners cannot, for the first time, raise as issue in their petition filed with this Court that the Labor Arbiter’s 3October 2008 Decision had become final and executory. Points of law, theories and arguments not raised beforthe Court of Appeals will not be considered by this Court. Otherwise, KJ Commercial will be denied its right to du

process. In Tolosa v. National Labor Relations Commission,17 the Court held:

Petitioner contends that the labor arbiter’s monetary award has already reached finality, since private respondenwere not able to file a timely appeal before the NLRC.



This argument cannot be passed upon in this appeal, be cause it was not raised in the tribunals a quoWell-settled is the rule that issues not raised be low cannot be raised for the first time on appeal. Thuspoints 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. Petitioner’s allegation cannot be accepted bthis Court on its face; to do so would be tantamount to a denial of respondent’s right to due process.

Furthermore, whether respondents were able to appeal on time is a question of fact that cannot be entertained ia petition for review under Rule 45 of the Rules of Court. In general, the jurisdiction of this Court in cases brough

before it from the Court of Appeals is limited to a review of errors of law allegedly committed by the court a quo.1

(Emphasis supplied)

KJ Commercial’s filing of a motion to reduce bond and delayed posting of the P2,562,930 surety bond did no

render the Labor Arbiter’s 30 October 2008 Decision final and executory. The Rules of Procedure of the NLRCallows the filing of a motion to reduce bond subject to two conditions: (1) there is meritorious ground, and (2) 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 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 paragrapshall 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 t

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 motioto reduce the bond shall be based on meritorious grounds; and (2) a reasonable amount in relation to thmonetary award is posted by the appellant, otherwise the filing of the motion to reduce bond shall not stop th

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 beyonthe 10-day period within which to perfect an appeal. Obviously, at the time of the filing of the motion to reducbond and posting of a bond in a reasonable amount, there is no assurance whether the appellant’s motion iindeed based on "meritorious ground" and whether the bond he or she posted is of a "reasonable amount." Thuthe 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 t

carry out the objectives of the Constitution, the Labor Code of the Philippines and other relevant legislations, anto assist the parties in obtaining just, expeditious and inexpensive resolution and settlement of labor disputes." Iorder to give full effect to the provisions on motion to reduce bond, the appellant must be allowed to wait for thruling of the NLRC on the motion even beyond the 10-day period to perfect an appeal. If the NLRC grants thmotion and rules that there is indeed meritorious ground and that the amount of the bond posted is reasonablethen the appeal is perfected. If the NLRC denies the motion, the appellant may still file a motion for reconsideratio

as provided under Section 15, Rule VII of the Rules. If the NLRC grants the motion for reconsideration and rulethat there is indeed meritorious ground and that the amount of the bond posted is reasonable, then the appeal 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 thNLRC denied its motion, KJ Commercial filed a motion for reconsideration and posted the full P2,562,930 suret

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 a

appeal is not absolute. The Court may relax the rule. In Intertranz Container Lines, Inc. v. Bautista,22 the Couheld:

Jurisprudence tells us that in labor cases, an appeal from a decision involving a monetary award may be perfecteonly upon the posting of a cash or surety bond. The Court, however, has relaxed this requirement under certaiexceptional circumstances in order to resolve controversies on their merits. These circumstances include: (1



and (3) special circumstances of the case combined with its legal merits, and the amount and the issue involved.2

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 jurisdictionaand noncompliance with such legal requirement is fatal and effectively renders the judgment final and executoryThe Labor Code provides:

ART. 223. Appeal . — Decisions, awards or orders of the Labor Arbiter are final and executory unlessappealed to the Commission by any or both parties within ten (10) calendar days from receipt of suchdecisions, awards, or orders.

In case of a judgment involving a monetary award, an appeal by the employer may be perfected only upon thposting of a cash or surety bond issued by a reputable bonding company duly accredited by the Commission ithe 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 bperfected "only upon the posting of a cash or surety bond." The lawmakers intended the posting of the bond to ban indispensable requirement to perfect an employer’s appeal.

However, in a number of cases, this Court has relaxed this requirement in order to bring about the immediate anappropriate resolution of controversies on the merits. Some of these cases include: "(a) counsel’s reliance on thfootnote of the notice of the decision of the labor arbiter that the aggrieved party may appeal within ten (10working days; (b) fundamental consideration of substantial justice; (c) prevention of miscarriage of justice or o

unjust enrichment, as where the tardy appeal is from a decision granting separation pay which was alreadgranted in an earlier final decision; and (d) special circumstances of the case combined with its legal merits or thamount and the issue involved."

In Quiambao vs. National Labor Relations Commission, this Court ruled that a relaxation of the appeal bonrequirement could be justified by substantial compliance with the rule.

In Globe General Services and Security Agency vs. National Labor Relations Commission, the Court observed ththe NLRC, in actual practice, allows the reduction of the appeal bond upon motion of the appellant and omeritorious grounds; hence, petitioners in that case should have filed a motion to reduce the bond within threglementary period for appeal.

That is the exact situation in the case at bar. Here, petitioner claims to have received the labor arbiter’s Decisio

on April 6, 1993. On April 16, 1993, it filed, together with its memorandum on appeal and notice of appeal, motion to reduce the appeal bond accompanied by a surety bond for fifty thousand pesos issued by PrudentiaGuarantee and Assurance, Inc. Ignoring petitioner’s motion (to reduce bond), Respondent Commission rendereits 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 appebond, even if it was filed on time, was defective, as it was not in an amount "equivalent to the monetary award ithe 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 holdin

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 i

substantial compliance with the Rules of Procedure of the NLRC or when the appellant shows willingness to post partial bond. The Court held that, "While the bond requirement on appeals involving monetary awards has beerelaxed in certain cases, this can only be done where there was substantial compliance of the Rules or where th

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. 1 â w p h i 1 In fact, it posted a P50,000 casbond. In Ong , the Court held that, "Petitioner in the said case substantially complied with the rules by posting partial surety bond of fifty thousand pesos issued by Prudential Guarantee and Assurance, Inc. while his motion t

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 imotion for reconsideration of the NLRC’s 9 March 2009 Decision. In Dr. Postigo v. Philippine Tuberculosis Societ

Inc.,29 the Court held:

x x x [T]he respondent immediately submitted a supersedeas bond with its motion for reconsideration of the NLRresolution dismissing its appeal. In Ong v. Court of Appeals, we ruled that the aggrieved party may file the appebond within the ten-day reglementary period following the receipt of the resolution of the NLRC to forestall thfinality of such resolution. Hence, while the appeal of a decision involving a monetary award in labor cases may bperfected only upon the posting of a cash or surety bond and the posting of the bond is an indispensablrequirement to perfect such an appeal, a relaxation of the appeal bond requirement could be justified b

substantial compliance with the rule.30

WHEREFORE, the Court DENIES the petition and AFFIRMS the 29 April 2011 Decision of the Court of Appeals iCA-G.R. SP No. 115851.

SO ORDERED.

ANTONIO T. CARPIO Associate Justice

WE CONCUR:

ARTURO D. BRION Associate Justice

JOSE PORTUGAL PEREZ Associate Justice

MARIA LOURDES P. A. SERENO Associate Justice

BIENVENIDO L. REYES Associate Justice


I attest that the conclusions in the above Decision had been reached in consultation before the case was assigneto the writer of the opinion of the Court’s Division.

ANTONIO T. CARPIO

Associate Justice

Chairperson


Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson’s Attestation, I certify that thconclusions in the above Decision had been reached in consultation before the case was assigned to the writer othe opinion of the Court’s Division.

RENATO C. CORONAChief Justice

Footnotes

1 Rollo, pp. 11-41.

2 Id. at 48-55. Penned by Associate Justice Samuel H. Gaerlan, with Associate Justices Rosmari DCarandang and Ramon R. Garcia concurring.

3 Id. at 149-157. Penned b Presidin Commissioner Herminio V. Suelo with Commissioners An elo An



. . . ,Palana and Numeriano D. Villena concurring.

4 Id. at 163-167.

5 Id. at 102-119. Penned by Labor Arbiter Mariano L. Bactin.

6 Id. at 62.

7 Id. at 108-111.

8 Id. at 132-136.

9 Id. at 133-135.

10 Id. at 137-138.

11 Id. at 150-156.

12 Id. at 166.

13 Id. at 168-188.

14 Id. at 53.

15 Id. at 174-176.

16 Id. at 51-52.

17 449 Phil. 271 (2003).

18 Id. at 284-285.

19 G.R. Nos. 178034, 178117, 186984 and 186985, 18 September 2009, 600 SCRA 658.

20 Id. at 669.

21 Id. at 671.

22 G.R. No. 187693, 13 July 2010, 625 SCRA 75.

23 Id. at 84.

24 352 Phil. 1013 (1998).

25 Id. at 1028-1031.

26 482 Phil. 170 (2004).

27 Id. at 181.

28 Id. at 181-182.

29 515 Phil. 601 (2006).

30 Id. at 607-608.





Manila

FIRST DIVISION

G.R. No. 196047 January 15, 2014

LEPANTO CONSOLIDATED MINING CORPORATION, Petitioner,vs.BELIO ICAO, Respondent.

D E C I S I O N

SERENO, CJ:

This Petition under Rule 45 of the Rules of Court seeks to annul and set aside the Court of Appeals (CA) Decisio

dated 27 September 2010 and the Resolution dated 11 March 2011 in CA-G.R. SP. No. 113095.1 In the assaileDecision and Resolution, the CA upheld the Order of the National Labor and Relations Commission (NLRC) FirsDivision dismissing petitioner s appeal for allegedly failing to post an appeal bond as required by the Labor CodePetitioner had instead filed a motion to release the cash bond it posted in another NLRC case which had beedecided with finality in its favor with a view to applying the bond to the appealed case before the NLRC FirDivision. Hence, the Court is now asked to rule whether petitioner had complied with the appeal bond requiremenIf it had, its appeal before the NLRC First Division should be reinstated.

The Facts

We quote the CA s narration of facts as follows:

The instant petition stemmed from a complaint for illegal dismissal and damages filed by private respondent Beli

C. Icao [Icao] against petitioners Lepanto Consolidated Mining Company (LCMC) and its Chief Executive Office[CEO] Felipe U. Yap [Yap] before the Arbitration Branch of the NLRC.

Private respondent essentially alleged in his complaint that he was an employee of petitioner LCMC assigned as lead miner in its underground mine in Paco, Mankayan, Benguet. On January 4, 2008, private respondenreported for the 1st shift of work (11:00 p.m. to 7:00 a.m.) and was assigned at 248-8M2, 750 Level of the mininarea. At their workplace, private respondent did some barring down, installed five (5) rock bolt support, and drilleeight (8) blast holes for the mid-shift blast. They then had their meal break. When they went back to theworkplace, they again barred down loose rocks and drilled eight (8) more blast holes for the last round of blasWhile waiting for the time to ignite their round, one of his co-workers shouted to prepare the explosives foblasting, prompting private respondent to run to the adjacent panels and warn the other miners. Thereafter, hdecided to take a bath and proceeded at [sic] the bathing station where four (4) of his co-workers were alspresent. Before he could join them, he heard a voice at his back and saw Security Guard (SG) Larry Bulwayainstructing his companion SG Dale Papsa-ao to frisk him. As private respondent was removing his boots, SGBulwayan forcibly pulled his skullguard from his head causing it to fall down [sic] to the ground including itharness and his detergent soap which was inserted in the skullguard harness. A few minutes later, privatrespondent saw SG Bulwayan [pick] up a wrapped object at the bathing station and gave it to his companion. SGBulwayan and Papsa-ao invited the private respondent to go with them at the investigation office to answequestions regarding the wrapped object. He was then charged with "highgrading" or the act of concealing

possessing or unauthorized extraction of highgrade material/ore without proper authority. Private respondenvehemently denied the charge. Consequently, he was dismissed from his work.



Private respondent claimed that his dismissal from work was without just or authorized cause since petitionerfailed to prove by ample and sufficient evidence that he stole gold bearing highgrade ores from the companpremises. If private respondent was really placing a wrapped object inside his boots, he should have been sittinor bending down to insert the same, instead of just standing on a muckpile as alleged by petitioners. Moreover, is beyond imagination that a person, knowing fully well that he was being chased for allegedly placing wrapped orinside his boots, will transfer it to his skullguard. The tendency in such situation is to throw the object away. Asuch, private respondent prayed that petitioners be held liable for illegal dismissal, to reinstate him to his formeposition without loss of seniority rights and benefits, and to pay his full backwages, damages and attorney’s fees.

For their defense, petitioners averred that SG Bulwayan saw private respondent standing on a muckpile aninserting a wrapped object inside his right rubber boot. SG Bulwayan immediately ran towards private respondenbut the latter ran away to escape. He tried to chase private respondent but failed to capture him. Thereafter, whil

SG Bulwayan was on his way to see his co-guard SG Papsa-ao, he saw private respondent moving out of a stopeHe then shouted at SG Papsa-ao to intercept him. When private respondent was apprehended, SG Bulwayaordered him to remove his skullguard for inspection and saw a wrapped object placed inside the helmet. SGBulwayan grabbed it, but the harness of the skullguard was also detached causing the object to fall on the groundImmediately, SG Bulwayan recovered and inspected the same which turned out to be pieces of stone ores. Privatrespondent and the stone ores were later turned over to the Mankayan Philippine National Police where he wagiven a written notice of the charge against him. On January 9, 2008, a hearing was held where privatrespondent, together with the officers of his union as well as the apprehending guards appeared. On February 42008, private respondent received a copy of the resolution of the company informing him of his dismissal fro

employment due to breach of trust and confidence and the act of highgrading.2

THE LABOR ARBITER’S RULING THAT

PETITIONER LCMC IS LIABLE FOR ILLEGAL DISMISSAL

On 30 September 2008, the labor arbiter rendered a Decision holding petitioner and its CEO liable for illegdismissal and ordering them to pay respondent Icao P345,879.45, representing his full backwages and separatio

pay.3 The alleged highgrading attributed by LCMC’s security guards was found to have been fabricatedconsequently, there was no just cause for the dismissal of respondent. The labor arbiter concluded that the claiof the security guards that Icao had inserted ores in his boots while in a standing position was not in accord wit

normal human physiological functioning.4

The labor arbiter also noted that it was inconsistent with normal human behavior for a man, who knew that he wabeing chased for allegedly placing wrapped ore inside his boots, to then transfer the ore to his skullguard, where

could be found once he was apprehended.5 To further support the improbability of the allegation of highgradingthe labor arbiter noted that throughout the 21 years of service of Icao to LCMC, he had never been accused of o

penalized for highgrading or any other infraction involving moral turpitude – until this alleged incident. 6

THE NLRC ORDER DISMISSING THE APPEALOF PETITIONER LCMC FOR FAILURE TO POST THE APPEAL BOND

On 8 December 2008, petitioner and its CEO filed an Appearance with Memorandum of Appeal 7 before the NLRCInstead of posting the required appeal bond in the form of a cash bond or a surety bond in an amount equivaleto the monetary award of P345,879.45 adjudged in favor of Icao, they filed a Consolidated Motion For Release O

Cash Bond And To Apply Bond Subject For Release As Payment For Appeal Bond (Consolidated Motion). 8 Therequested therein that the NLRC release the cash bond of P401,610.84, which they had posted in the separat

case Dangiw Siggaao v. LCMC,9 and apply that same cash bond to their present appeal bond liability. Thereasoned that since this Court had already decided Dangiw Siggaao in their favor, and that the ruling therein ha

become final and executory, the cash bond posted therein could now be released.10

They also cited financidifficulty as a reason for resorting to this course of action and prayed that, in the interest of justice, the motion bgranted.

In its Order dated 27 February 2009, the NLRC First Division dismissed the appeal of petitioner and the latter’

CEO for non-perfection.11 It found that they had failed to post the required appeal bond equivalent to the monetaaward of P345,879.45. It explained that their Consolidated Motion for the release of the cash bond in another cas(Dangiw Siggaao), for the purpose of applying the same bond to the appealed case before it, could not bconsidered as compliance with the requirement to post the required appeal bond. Consequently, it declared th



labor arbiter’s Decision to be final and executory. The pertinent portions of the assailed Order are quoted below:

The rules are clear. Appeals from decision involving a monetary award maybe [sic] perfected only upon posting oa cash or surety-bond within the ten (10) day reglementary period for filing an appeal. Failure to file and post threquired appeal bond within the said period results in the appeal not being perfected and the appealed judgmebecomes final and executory. Thus, the Commission loses authority to entertain or act on the appeal much lesreverse the decision of the Labor Arbiter (Gaudia vs. NLRC, 318 SCRA 439).

In this case, respondents failed to post the required appeal bond equivalent to the monetary award oP345,879.45. The Consolidated Motion for Release of Cash Bond (posted as appeal bond in another case) witprayer to apply the bond to be released as appeal bond may not be considered as compliance with th jurisdictional requirement, as the application or posting is subject to the condition that the cash bond would b

released. Besides, even if the motion for release is approved, the ten (10) day period has long expired, renderinthe statutory right to appeal forever lost.

WHEREFORE, respondents’ appeal is hereby DISMISSED for non-perfection and the questioned decision declared as having become final and executory. Let the Motion for Release of Cash bond be forwarded to thThird Division, this Commission, for appropriate action.

SO ORDERED.12 (Emphasis supplied)

Petitioner and its CEO filed a Motion for Reconsideration. They emphasized therein that they had tried to compin good faith with the requisite appeal bond by trying to produce a cash bond anew and also to procure a ne

surety bond. However, after canvassing several bonding companies, the costs have proved to be prohibitive.Hence, they resorted to using the cash bond they posted in Dangiw Siggaao because the bond was now free

unencumbered and could rightfully be withdrawn and used by them.14 Their motion was denied in a Resolutiodated 27 November 2009. Hence, they filed a Petition for Certiorari with the CA.

THE CA RULING AFFIRMING THE ORDER OF THE NLRC

On 27 September 2010, the CA issued its assailed Decision15 affirming the Order of the NLRC First Division, whichad dismissed the appeal of petitioner and the latter’s CEO. According to the CA, they failed to comply with th

requirements of law and consequently lost the right to appeal.16

The CA explained that under Article 223 of the Labor Code, an appeal from the labor arbiter’s Decision must bfiled within 10 calendar days from receipt of the decision. In case of a judgment involving a monetary award, thposting of a cash or surety bond in an amount equivalent to the monetary award is mandatory for the perfection oan appeal. In the instant case, the CA found that petitioner and its CEO did not pay the appeal fees and threquired appeal bond equivalent to P345,879.45. Instead, it filed a Consolidated Motion praying that the casbond it had previously posted in another labor case be released and applied to the present one. According to th

CA, this arrangement is not allowed under the rules of procedure of the NLRC.17

Furthermore, the CA said that since the payment of appeal fees and the posting of an appeal bond arindispensable jurisdictional requirements, noncompliance with them resulted in petitioner’s failure to perfect iappeal. Consequently, the labor arbiter’s Decision became final and executory and, hence, binding upon th

appellate court.18

Nevertheless, the CA ruled that the CEO of petitioner LCMC should be dropped as a party to this case.19 Nspecific act was alleged in private respondent’s pleadings to show that he had a hand in Icao’s illegal dismissamuch less, that he acted in bad faith. In fact, the labor arbiter did not cite any factual or legal basis in its Decisio

that would render the CEO liable to respondent. The rule is that in the absence of bad faith, an officer of corporation cannot be made personally liable for corporate liabilities.

THE ISSUE

The sole issue before the Court is whether or not petitioner complied with the appeal bond requirement under thLabor Code and the NLRC Rules by filing a Consolidated Motion to release the cash bond it posted in anothecase, which had been decided with finality in its favor, with a view to applying the same cash bond to the presencase.

OUR RULING



The Petition is meritorious. The Court finds that petitioner substantially complied with the appeal bonrequirement.

Before discussing its ruling, however, the Court finds it necessary to emphasize the well-entrenched doctrine thaan appeal is not a matter of right, but is a mere statutory privilege. It may be availed of only in the manneprovided by law and the rules. Thus, a party who seeks to exercise the right to appeal must comply with th

requirements of the rules; otherwise, the privilege is lost.20

In appeals from any decision or order of the labor arbiter, the posting of an appeal bond is required under Articl223 of the Labor Code, which reads:

Article 223. APPEAL. — Decisions, awards, or orders of the Labor Arbiter are final and executory unless appealeto the Commission by any or both parties within ten (10) calendar days from receipt of such decisions, awards, oorders. Such appeal may be entertained only on any of the following grounds:

x x x x

In case of a judgment involving a monetary award, an appeal by the employer may be perfected only upon thposting of a cash or surety bond issued by a reputable bonding company duly accredited by the Commission ithe amount equivalent to the monetary award in the judgment appealed from. (Emphasis and underlining supplied

The 2011 NLRC Rules of Procedure (NLRC Rules) incorporates this requirement in Rule VI, Section 6, whicprovides:

SECTION 6. Bond. — In case the decision of the Labor Arbiter or the Regional Director involves a monetaraward, an appeal by the employer may be perfected only upon the posting of a bond, which shall either be in thform of cash deposit or surety bond equivalent in amount to the monetary award, exclusive of damages anattorney’s fees. (Emphases and underlining supplied)

In Viron Garments Manufacturing Co., Inc. v. NLRC,21 the Court explained the mandatory nature of threquirement as follows:

The intention of the lawmakers to make the bond an indispensable requisite for the perfection of an appeal by themployer, is clearly limned in the provision that an appeal by the employer may be perfected "only upon thposting of a cash or surety bond." The word "only" makes it perfectly clear, that the lawmakers intended thposting of a cash or surety bond by the employer to be the exclusive means by which an employer's appeal mabe perfected. (Emphases supplied)

We now turn to the main question of whether petitioner’s Consolidated Motion to release the cash bond it postein a previous case, for application to the present case, constitutes compliance with the appeal bond requiremenWhile it is true that the procedure undertaken by petitioner is not provided under the Labor Code or in the NLR

Rules, we answer the question in the affirmative. We reiterate our pronouncement in Araneta v. Rodas,22 wherthe Court said that when the law does not clearly provide a rule or norm for the tribunal to follow in deciding question submitted, but leaves to the tribunal the discretion to determine the case in one way or another, th judge must decide the question in conformity with justice, reason and equity, in view of the circumstances of thcase. Applying this doctrine, we rule that petitioner substantially complied with the mandatory requirement oposting an appeal bond for the reasons explained below.

First, there is no question that the appeal was filed within the 10-day reglementary period.23 Except for the allegefailure to post an appeal bond, the appeal to the NLRC was therefore in order.

Second, it is also undisputed that petitioner has an unencumbered amount of money in the form of cash in thcustody of the NLRC. To reiterate, petitioner had posted a cash bond of P401,610.84 in the separate case DangiSiggaao, which was earlier decided in its favor. As claimed by petitioner and confirmed by the Judgment Division othe Judicial Records Office of this Court, the Decision of the Court in Dangiw Siggaao had become final anexecutory as of 28 April 2008, or more than seven months before petitioner had to file its appeal in the presencase. This fact is shown by the Entry of Judgment on file with the aforementioned office. Hence, the cash bond ithat case ought to have been released to petitioner then.



Under the Rule VI, Section 6 of the 2005 NLRC Rules, "[a] cash or surety bond shall be valid and effective fromthe date of deposit or posting, until the case is finally decided, resolved or terminated, or the award satisfiedHence, it is clear that a bond is encumbered and bound to a case only for as long as 1) the case has not beefinally decided, resolved or terminated; or 2) the award has not been satisfied. Therefore, once the appeal ifinally decided and no award needs to be satisfied, the bond is automatically released. Since the money is nowunencumbered, the employer who posted it should now have unrestricted access to the cash which he may nouse as he pleases – as appeal bond in another case, for instance. This is what petitioner simply did. Third, thcash bond in the amount of P401,610.84 posted in Dangiw Siggaao is more than enough to cover the appeabond in the amount of P345,879.45 required in the present case.

Fourth, this ruling remains faithful to the spirit behind the appeal bond requirement which is to ensure that worker

will receive the money awarded in their favor when the employer’s appeal eventually fails.

24

There was no showinat all of any attempt on the part of petitioner to evade the posting of the appeal bond. On the contrary, petitionermove showed a willingness to comply with the requirement. Hence, the welfare of Icao is adequately protected.

Moreover, this Court has liberally applied the NLRC Rules and the Labor Code provisions on the posting of a

appeal bond in exceptional cases. In Your Bus Lines v. NLRC,25 the Court excused the appellant’s failure to post bond, because it relied on the notice of the decision. While the notice enumerated all the other requirements fo

perfecting an appeal, it did not include a bond in the list. In Blancaflor v. NLRC,26 the failure of the appellantherein to post a bond was partly caused by the labor arbiter’s failure to state the exact amount of monetary awardue, which would have been the basis of the amount of the bond to be posted. In Cabalan Pastulan Negrito Labo

Association v. NLRC27 petitioner-appellant was an association of Negritos performing trash-sorting services in th American naval base in Subic Bay. The plea of the association that its appeal be given due course despite its nonposting of a bond, on account of

its insolvency and poverty, was granted by this Court. In UERM-Memorial Medical Center v. NLRC28 we allowed thappellant-employer to post a property bond in lieu of a cash or surety bond. The assailed judgment involved morthan P17 million; thus, its execution could adversely affect the economic survival of the employer, which was medical center.

If n the above-cited cases, the Court found exceptional circumstances that warranted an extraordinary exercise oits power to exempt a party from the rules on appeal bond, there is all the more reason in the present case to finthat petitioner substantially complied with the requirement. We emphasize that in this case we are not eveexempting petitioner from the rule, as in fact we are enforcing compliance with the posting of an appeal bond. Ware simply liberally applying the rules on what constitutes compliance with the requirement, given the speciacircumstances surrounding the case as explained above.

Having complied with the appeal bond requirement, petitioner s appeal before the NLRC must therefore breinstated.1 â w p h i 1

Finally, a word of caution. Lest litigants be misled into thinking that they may now wantonly disregard the rules oappeal bond in labor cases, we reiterate the mandatory nature of the requirement. The Court will liberally appthe rules only in very highly exceptional cases such as this, in keeping with the dictates of justice, reason anequity.

WHEREFORE, premises considered, the instant Rule 45 Petition is GRANTED. The Court of Appeals Decisio

dated 27 September 2010 and its Resolution dated March 2011 in CA-G.R. SP. No. 113095, which dismissepetitioner s Rule 65 Petition, are hereby REVERSED. Finally, the National Labor Relations CommissioResolutions dated 27 February 2009 and 27 November 2009 are SET ASIDE and the appeal of petitioner before

is hereby REINSTATED.

SO ORDERED.

MARIA LOURDES P. A. SERENOChief Justice, Chairperson

WE CONCUR:

TERESITA J. LEONARDO-DE CASTRO



ssoc a e us ce

LUCAS P. BERSAMIN Associate Justice

MARTIN S. VILLARAMA, JR. Associate Justice

BIENVENIDO L. REYES Associate Justice


Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above Decision had beereached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

MARIA LOURDES P. A. SERENOChief Justice

Footnotes

1 Both the Decision and the Resolution in CA-G.R. SP. No. 113095 were penned by CA Associate JusticRamon R. Garcia, and concurred in by Associate Justices Rosmari D. Carandang and Manuel M. Barrios.

2 Rollo, pp. 58-61.

3

Id. at 124-133.4 Id. at 129.

5 Id.

6 Id. at 131.

7 Id. at 134-150.

8 Id. at 151-153.

9 Docketed as G.R. No. 179013, the unrelated case of Dangiw Siggaao involved a different employee wh

filed his Complaint for illegal dismissal against LCMC (docketed as NLRC Case No. RAB-CAR-05-0250-03several years before the employee in the instant case filed his. In any case, the Dangiw Siggaao Complainwas decided by the labor arbiter in favor of the complainants. Consequently LCMC filed an appeal to thNLRC (docketed as NLRC NCR CA No. 03767-04) which in a Decision dated 18 May 2005, reversed thlabor arbiter’s Decision. The CA (where the appeal was docketed as CA-GR SP No. 91681) affirmed thNLRC in CA Decision dated 30 March 2007. The CA Decision was brought to this Court through a Petitio

for Review on Certiorari which the Court dismissed on technical grounds in a Resolution dated 3 Octobe2007. See Consolidated Motion for Release of Cash Bond dated 8 December 2008 and Entry of JudgmenDangiw Siggaao v. LCMC, dated 28 April 2008 and sent to the parties on 10 July 2008, Annex "O" of thinstant Petition; rollo, pp.151-156.

10 Id. at 151.

11 Id. at 157-159.

12 Id. at 158-159.

13 Id. at 162.

14 Id.

15 Id. at 57-71.



. .

16 Id. at 65.

17 Id. at 68.

18 Id.

19 Id. at 69.

20 BPI Family Savings Bank, Inc., v. Pryce Gases, Inc., G.R. No. 188365, 29 June 2011, 653 SCRA 42, 51National Power Corporation v. Spouses Laohoo , G.R. No. 151973, 23 July 2009, 593 SCRA 564; PhiluxInc. v. National Labor Relations Commission , G.R. No. 151854, 3 September 2008, 564 SCRA 21, 33; Cu

unjieng v. Court of Appeals, 515 Phil. 568 (2006); Stolt-Nielsen Services, Inc. v. NLRC, 513 Phil. 642 (2005Producers Bank of the Philippines v. Court of Appeals, 430 Phil 812 (2002); Villanueva v. Court of AppealsG.R. No. 99357, 27 January 1992, 205 SCRA 537; Trans International v. Court of Appeals , 348 Phil. 83(1998); Acme Shoe, Rubber & Plastic Corporation v. Court of Appeals, 329 Phil. 531 (1996 ) ; and Ozaeta vCourt of Appeals, 259 Phil. 428 (1989).

21 G.R. No. 97357, 18 March 1992, 207 SCRA 339, 342. See also Accessories Specialist, Inc. v. AlabanzaG.R. No. 168985, 23 July 2008, 559 SCRA 550; Cordova v. Keysa’s Boutique, 507 Phil. 147 (2005); Gaudiv. NLRC, 376 Phil. 548 (1999); and Garais v. NLRC, 326 Phil. 568 (1996).

22 81 Phil. 506 (1948).

23 NLRC Records, p. 95.

24 Accessories Specialist, Inc. v. Alabanza, 581 Phil. 517 (2008), Roos Industrial Construction, Inc. vNational Labor Relations Commission, 567 Phil. 631 (2008), Borja Estate v. Ballad, 498 Phil. 694 (2005).

25 268 Phil. 169, 172 (1990).

26 G.R. No. 101013, 2 February 1993, 218 SCRA 366, 371.

27 311 Phil. 744 (1995).

28 336 Phil. 66 (1997).






Baguio City

SECOND DIVISION

G.R. No. 195227 April 21, 2014

FROILAN M. BERGONIO, JR., DEAN G. PELAEZ, CRISANTO O. GEONGO, WARLITO O. JANAYA, SALVADOVILLAR, JR., RONALDO CAFIRMA, RANDY LUCAR, ALBERTO ALBUERA, DENNIS NOPUENTE and ALLASALVACION, Petitioners,vs.SOUTH EAST ASIAN AIRLINES and IRENE DORNIER, Respondents.

D E C I S I O N

BRION, J.:

We resolve in this petition for review on certiorari1 the challenge to the September 30, 2010 decision2 and th

January 13, 2011 resolution3 of the Court of Appeals (CA) in CA-G.R. SP No. 112011.

This CA decision reversed the July 16, 2008 decision4 of the National Labor Relations Commission (NLRC), whic

in turn, affirmed the March 13, 2008 order 5 of the Labor Arbiter (LA) in NLRC Case No. 00-04-05469- 2004. ThLA granted the Motion filed by petitioners Froilan M. Bergonio, Jr., Dean G. Pelaez, et.al., (collectively, thpetitioners) for the release of the garnished amount to satisfy the petitioners’ accrued wages.

The Factual Antecedents

On April 30, 2004, the petitioners filed before the LA a complaint for illegal dismissal and illegal suspension witprayer for reinstatement against respondents South East Asian Airlines (SEAIR) and Irene Dornier as SEAIR

President (collectively, the respondents).

In a decision dated May 31, 2005, the LA found the petitioners illegally dismissed and ordered the respondentsamong others, to immediately reinstate the petitioners with full backwages. The respondents received their copy o

this decision on July 8, 2005.6

On August 20, 2005, the petitioners filed before the LA a Motion for issuance of Writ of Execution for theimmediate reinstatement.

During the scheduled pre-execution conference held on September 14, 2005, the respondents manifested theoption to reinstate the petitioners in the payroll. The payroll reinstatement, however, did not materialize. Thus, oSeptember 22, 2005, the petitioners filed before the LA a manifestation for their immediate reinstatement.

On October 3, 2005, the respondents filed an opposition to the petitioners’ motion for execution.7 They claimethat the relationship between them and the petitioners had already been strained because of the petitionersthreatening text messages, thus precluding the latter’s reinstatement.

On October 7, 2005, the LA granted the petitioners’ motion and issued a writ of execution.8

The respondents moved to quash the writ of execution with a prayer to hold in abeyance the implementation of th

reinstatement order.9 They maintained that the relationship between them and the petitioners had been s



.

The October 7, 2005 writ of execution was returned unsatisfied. In response, the petitioners filed a motion for recomputation of accrued wages, and, on January 25, 2006, a motion for execution of the re-computed amount. O

February 16, 2006, the LA granted this motion and issued an alias writ of execution.10

On February 21, 2006, the respondents issued a Memorandum11 directing the petitioners to report for work oFebruary 24, 2006. The petitioners failed to report for work on the appointed date. On February 28, 2006, th

respondents moved before the LA to suspend the order for the petitioners’ reinstatement.12

Meanwhile, the respondents appealed with the NLRC the May 31, 2005 illegal dismissal ruling of the LA.

In an order dated August 15, 2006,13 the NLRC dismissed the respondents’ appeal for non-perfection. The NLR

likewise denied the respondents’ motion for reconsideration in its November 29, 2006 resolution, prompting threspondents to file before the CA a petition for certiorari.

The NLRC issued an Entry of Judgment on February 6, 2007 declaring its November 29, 2006 resolution final anexecutory. The petitioners forthwith filed with the LA another motion for the issuance of a writ of execution, whic

the LA granted on April 24, 2007. The LA also issued another writ of execution.14 A Notice of Garnishment wathereafter issued to the respondents’ depositary bank – Metrobank-San Lorenzo Village Branch, Makati City – the amount of P1,900,000.00 on June 6, 2007.

On December 18, 2007, the CA rendered its decision (on the illegal dismissal ruling of the LA) partly granting threspondents’ petition. The CA declared the petitioners’ dismissal valid and awarded them P30,000.00 as nominadamages for the respondents’ failure to observe due process.

The records show that the petitioners appealed the December 18, 2007 CA decision with this Court. In a resolutiodated August 4, 2008, the Court denied the petition. The Court likewise denied the petitioners’ subsequent motiofor reconsideration, and thereafter issued an Entry of Judgment certifying that its August 4, 2008 resolution habecome final and executory on March 9, 2009.

On January 31, 2008, the petitioners filed with the LA an Urgent Ex-Parte Motion for the Immediate Release of thGarnished Amount.

In its March 13, 2008 order,15 the LA granted the petitioners’ motion; it directed Metrobank-San Lorenzo to releasthe P1,900,000.00 garnished amount. The LA found valid and meritorious the respondents’ claim for accruewages in view of the respondents’ refusal to reinstate the petitioners despite the final and executory nature of threinstatement aspect of its (LA’s) May 31, 2005 decision. The LA noted that as of the December 18, 2007 C

decision (that reversed the illegal dismissal findings of the LA), the petitioners’ accrued wages amounted tP3,078,366.33.

In its July 16, 2008 resolution,16 the NLRC affirmed in toto the LA’s March 13, 2008 order. The NLRC afterward

denied the respondents’ motion for reconsideration for lack of merit.17

The respondents assailed the July 16, 2008 decision and September 29, 2009 resolution of the NLRC via petition for certiorari filed with the CA.

The CA’s ruling

The CA granted the respondents’ petition.18 It reversed and set aside the July 16, 2008 decision and thSeptember 29, 2009 resolution of the NLRC and remanded the case to the Computation and Examination Unit o

the NLRC for the proper computation of the petitioners’ accrued wages, computed up to February 24, 2006.

The CA agreed that the reinstatement aspect of the LA’s decision is immediately executory even pending appeasuch that the employer is obliged to reinstate and pay the wages of the dismissed employee during the period o

appeal until the decision (finding the employee illegally dismissed including the reinstatement order) is reversed ba higher court. Applying this principle, the CA noted that the petitioners’ accrued wages could have been propercomputed until December 18, 2007, the date of the CA’s decision finding the petitioners validly dismissed.

The CA, however, pointed out that when the LA’s decision is "reversed by a higher tribunal, an employee may b



arre rom co ec ng e accrue wages s own a e e ay n en orcng e re ns a emen pen ng appewas without fault" on the employer’s part. In this case, the CA declared that the delay in the execution of threinstatement order was not due to the respondents’ unjustified act or omission. Rather, the petitioners’ refusal tcomply with the February 21, 2006 return-to-work Memorandum that the respondents issued and personaldelivered to them (the petitioners) prevented the enforcement of the reinstatement order.

Thus, the CA declared that, given this peculiar circumstance (of the petitioners’ failure to report for work), thpetitioners’ accrued wages should only be computed until February 24, 2006 when they were supposed to repofor work per the return-to-work Memorandum. Accordingly, the CA reversed, for grave abuse of discretion, thNLRC’s July 16, 2008 decision that affirmed the LA’s order to release the garnished amount.

The Petition

The petitioners argue that the CA gravely erred when it ruled, contrary to Article 223, paragraph 3 of the LaboCode, that the computation of their accrued wages stopped when they failed to report for work on February 242006. They maintain that the February 21, 2006 Memorandum was merely an afterthought on the respondentpart to make it appear that they complied with the LA’s October 7, 2005 writ of execution. They likewise argue thahad the respondents really intended to have them report for work to comply with the writ of execution, threspondents could and should have issued the Memorandum immediately after the LA issued the first writ oexecution. As matters stand, the respondents issued the Memorandum more than four months after the issuancof this writ and only after the LA issued the alias writ of execution on February 16, 2006.

Additionally, the petitioners direct the Court’s attention to the several pleadings that the respondents filed tprevent the execution of the reinstatement aspect of the LA’s May 31, 2005 decision, i.e., the Opposition to thIssuance of the Writ of Execution, the Motion to Quash the Writ of Execution and the Motion to Suspend the Orde

of Reinstatement. They also point out that in all these pleadings, the respondents claimed that strainerelationship barred their (the petitioners’) reinstatement, evidently confirming the respondents’ lack of intention treinstate them.

Finally, the petitioners point out that the February 21, 2006 Memorandum directed them to report for work at ClarField, Angeles, Pampanga instead of at the NAIA-Domestic Airport in Pasay City where they had been assignedThey argue that this directive to report for work at Clark Field violates Article 223, paragraph 3 of the Labor Codthat requires the employee’s reinstatement to be under the same terms and conditions prevailing prior to thdismissal. Moreover, they point out that the respondents handed the Memorandum only to Pelaez, who did not ain representation of the other petitioners, and only in the afternoon of February 23, 2006.

Thus, the petitioners claim that the delay in their reinstatement was in fact due to the respondents’ unjustified actand that the respondents never really complied with the LA’s reinstatement order.

The Case for the Respondents

The respondents counter, in their comment,19 that the issues that the petitioners raise in this petition are all factuin nature and had already considered and explained in the CA decision. In any case, the respondents maintaithat the petitioners were validly dismissed and that they complied with the LA’s reinstatement order when directed the petitioners to report back to work, which directive the petitioners did not heed.

The respondents add that while the reinstatement of an employee found illegally dismissed is immediateexecutory, the employer is nevertheless not prohibited from questioning this rule especially when the latter havalid and legal reasons to oppose the employee’s reinstatement. In the petitioners’ case, the respondents poinout that their relationship had been so strained that reinstatement was no longer possible. Despite this strainerelationship, the respondents point out that they still required the petitioners to report back to work if only t

comply with the LA’s reinstatement order. Instead of reporting for work as directed, the petitioners, howeve

insisted for a payroll reinstatement, which option the law grants to them (the respondents) as employer. Alsocontrary to the petitioners’ claim, the Memorandum directed them to report at Clark Field, Pampanga only for a reorientation of their respective duties and responsibilities.

Thus, relying on the CA’s ruling, the respondents claim that the delay in the petitioners’ reinstatement was in facdue to the latter’s refusal to report for work after the issuance of the February 21, 2006 Memorandum in additioto their strained relationship.




We GRANT the petition.Preliminary considerations: jurisdictional limitations of the Court’s Rule 45 review of the CA’s Rule 65 decision in labor cases

In a Rule 45 petition for review on certiorari, what we review are the legal errors that the CA may have committein the assailed decision, in contrast with the review for jurisdictional errors that we undertake in an originacertiorari action. In reviewing the legal correctness of the CA decision in a labor case taken under Rule 65 of thRules of Court, we examine the CA decision in the context that it determined the presence or the absence of gravabuse of discretion in the NLRC decision before it and not on the basis of whether the NLRC decision, on th

merits of the case, was correct. Otherwise stated, we proceed from the premise that the CA undertook a Rule 6review, not a review on appeal, of the NLRC decision challenged before it. Within this narrow scope of our Rule 4review, the question that we ask is: Did the CA correctly determine whether the NLRC committed grave abuse o

discretion in ruling on the case?20

In addition, the Court’s jurisdiction in a Rule 45 petition for review on certiorari is limited to resolving only questionof law.

The present petition essentially raises the question – whether the petitioners may recover the accrued wages prioto the CA’s reversal of the LA’s May 31, 2005 decision. This is a question of law that falls well within the Court’power in a Rule 45 petition.

Resolution of this question of law, however, is inextricably linked with the largely factual issue of whether th

accrued wages should be computed until December 17, 2008 when the CA reversed the illegal dismissal findingof the LA or only until February 24, 2006 when the petitioners were supposed to report for work per the Februar21, 2006 Memorandum. In either case, the determination of this factual issue presupposes another factual issuei.e., whether the delay in the execution of the reinstatement order was due to the respondents’ fault. As questionof fact, they are proscribed by our Rule 45 jurisdiction; we generally cannot address these factual issues except tthe extent necessary to determine whether the CA correctly found the NLRC in grave abuse of discretion iaffirming the release of the garnished amount despite the respondents’ issuance of and the petitioners’ failure tcomply with the February 21, 2006 return-to-work Memorandum.

The jurisdictional limitations of our Rule 45 review of the CA’s Rule 65 decision in labor cases, notwithstanding, wresolve this petition’s factual issues for we find legal errors in the CA’s decision. Our consideration of the facttaken within this narrow scope of our factual review power convinced us, as our subsequent discussion will showthat no grave abuse of discretion attended the NLRC decision.

Nature of the reinstatement aspect of theLA’s decision on a finding of illegal dismissal

Article 223 (now Article 229)21 of the Labor Code governs appeals from, and the execution of, the LA’s decisioPertinently, paragraph 3, Article 223 of the Labor Code provides:

Article 223. APPEAL

x x x x

In any event, the decision of the Labor Arbiter reinstating a dismissed or separated employee, insofar as th

reinstatement aspect is concerned, shall immediately be executory, pending appeal. The employee shall either badmitted back to work under the same terms and conditions prevailing prior to his dismissal or separation or, athe option of the employer, merely reinstated in the payroll. The posting of a bond by the employer shall not stathe execution for reinstatement provided herein. [Emphasis and underscoring supplied]

Under paragraph 3, Article 223 of the Labor Code, the LA’s order for the reinstatement of an employee founillegally dismissed is immediately executory even during pendency of the employer’s appeal from the decisioUnder this provision, the employer must reinstate the employee – either by physically admitting him under thconditions prevailing prior to his dismissal, and paying his wages; or, at the employer’s option, merely reinstatin



e emp oyee n e payro un e ec s on s reverse y e g er cour . a ure o e emp oyer o compwith the reinstatement order, by exercising the options in the alternative, renders him liable to pay the employee’

salaries.23

Otherwise stated, a dismissed employee whose case was favorably decided by the LA is entitled to receive wage

pending appeal upon reinstatement, which reinstatement is immediately executory.24 Unless the appellate tribunissues a restraining order, the LA is duty bound to implement the order of reinstatement and the employer has n

option but to comply with it.25

Moreover, and equally worth emphasizing, is that an order of reinstatement issued by the LA is self-executory, i.ethe dismissed employee need not even apply for and the LA need not even issue a writ of execution to trigger themployer’s duty to reinstate the dismissed employee.

In Pioneer Texturizing Corp. v. NLRC, et. al.,26 decided in 1997, the Court clarified once and for all this selexecutory nature of a reinstatement order. After tracing back the various Court rulings interpreting th

amendments introduced by Republic Act No. 671527 on the reinstatement aspect of a labor decision under Artic223 of the Labor Code, the Court concluded that to otherwise "require the application for and issuance of a writ oexecution as prerequisites for the execution of a reinstatement award would certainly betray and run counter to th

very object and intent of Article 223, i.e., the immediate execution of a reinstatement order."28

In short, therefore, with respect to decisions reinstating employees, the law itself has determined a sufficient

overwhelming reason for its immediate and automatic execution even pending appeal. 29 The employer is dutybound to reinstate the employee, failing which, the employer is liable instead to pay the dismissed employee’salary. The Court’s consistent and prevailing treatment and interpretation of the reinstatement order aimmediately enforceable, in fact, merely underscores the right to security of tenure of employees that th

Constitution30 protects.

The employer is obliged to pay thedismissed employee’s salary if herefuses to reinstate until actual reinstatement or reversal by a higher tribunal; circumstances that may bar anemployee from receiving the accrued wages

As we amply discussed above, an employer is obliged to immediately reinstate the employee upon the LA’s findinof illegal dismissal; if the employer fails, it is liable to pay the salary of the dismissed employee. Of course, it is noalways the case that the LA’s finding of illegal dismissal is, on appeal by the employer, upheld by the appellatcourt. After the LA’s decision is reversed by a higher tribunal, the employer’s duty to reinstate the dismisseemployee is effectively terminated. This means that an employer is no longer obliged to keep the employee in thactual service or in the payroll. The employee, in turn, is not required to return the wages that he had receive

prior to the reversal of the LA’s decision.31

The reversal by a higher tribunal of the LA’s finding (of illegal dismissal), notwithstanding, an employer, whodespite the LA’s order of reinstatement, did not reinstate the employee during the pendency of the appeal up tthe reversal by a higher tribunal may still be held liable for the accrued wages of the employee, i.e., the unpai

salary accruing up to the time the higher tribunal reverses the decision.32 The rule, therefore, is that an employe

may still recover the accrued wages up to and despite the reversal by the higher tribunal. This entitlement of themployee to the accrued wages proceeds from the immediate and self-executory nature of the reinstatemenaspect of the LA’s decision.

By way of exception to the above rule, an employee may be barred from collecting the accrued wages if showthat the delay in enforcing the reinstatement pending appeal was without fault on the part of the employer. Tdetermine whether an employee is thus barred, two tests must be satisfied: (1) actual delay or the fact that thorder of reinstatement pending appeal was not executed prior to its reversal; and (2) the delay must not be due tthe employer’s unjustified act or omission. Note that under the second test, the delay must be without themployer’s fault. If the delay is due to the employer’s unjustified refusal, the employer may still be required to pa

the salaries notwithstanding the reversal of the LA’s decision.33

Application of the two-fold test; the



petitioners are entitled to receive their accrued salaries until December 18, 2007

As we earlier pointed out, the core issue to be resolved is whether the petitioners may recover the accrued wageuntil the CA’s reversal of the LA’s decision. An affirmative answer to this question will lead us to reverse thassailed CA decision for legal errors and reinstate the NLRC’s decision affirming the release of the garnisheamount. Otherwise, we uphold the CA’s decision to be legally correct. To resolve this question, we apply the twofold test.

First, the existence of delay - whether there was actual delay or whether the order of reinstatement pendinappeal was not executed prior to its reversal? We answer this test in the affirmative.

To recall, on May 31, 2005, the LA rendered the decision finding the petitioners illegally dismissed and orderintheir immediate reinstatement. Per the records, the respondents received copy of this decision on July 8, 2005. O August 20, 2005, the petitioners filed before the LA a Motion for Issuance of Writ of Execution for their immediatreinstatement. The LA issued the Writ of Execution on October 7, 2005. From the time the respondents receivecopy of the LA’s decision, and the issuance of the writ of execution, until the CA reversed this decision oDecember 17, 2008, the respondents had not reinstated the petitioners, either by actual reinstatement or in thpayroll. This continued non-execution of the reinstatement order in fact moved the LA to issue an alias writ oexecution on February 16, 2006 and another writ of execution on April 24, 2007.

From these facts and without doubt, there was actual delay in the execution of the reinstatement aspect of thLA’s May 31, 2005 decision before it was reversed in the CA’s decision.

Second, the cause of the delay – whether the delay was not due to the employer’s unjustified act or omission. W

answer this test in the negative; we find that the delay in the execution of the reinstatement pending appeal wadue to the respondents’ unjustified acts.

In reversing, for grave abuse of discretion, the NLRC’s order affirming the release of the garnished amount, thCA relied on the fact of the issuance of the February 21, 2006 Memorandum and of the petitioners’ failure tcomply with its return-to-work directive. In other words, with the issuance of this Memorandum, the CA considerethe respondents as having sufficiently complied with their obligation to reinstate the petitioners. And, thsubsequent delay in or the non-execution of the reinstatement order was no longer the respondents’ fault, burather of the petitioners who refused to report back to work despite the directive.

Our careful consideration of the facts and the circumstances that surrounded the case convinced us that the delain the reinstatement pending appeal was due to the respondents’ fault. For one, the respondents filed severapleadings to suspend the execution of the LA’s reinstatement order, i.e., the opposition to the petitioners’ motio

for execution filed on October 3, 2005; the motion to quash the October 7, 2005 writ of execution with prayer thold in abeyance the implementation of the reinstatement order; and the motion to suspend the order for thpetitioners’ reinstatement filed on February 28, 2006 after the LA issued the February 16, 2006 alias writ oexecution. These pleadings, to our mind, show a determined effort on the respondents’ part to prevent or suspenthe execution of the reinstatement pending appeal.

Another reason is that the respondents, contrary to the CA’s conclusion, did not sufficiently notify the petitioners otheir intent to actually reinstate them; neither did the respondents give them ample opportunity to comply with threturn-to-work directive. We note that the respondents delivered the February 21, 2006 Memorandum (requirinthe petitioners to report for work on February 24, 2006) only in the afternoon of February 23, 2006. Worse, threspondents handed the notice to only one of the petitioners – Pelaez – who did not act in representation of thothers. Evidently, the petitioners could not reasonably be expected to comply with a directive that they had no o

insufficient notice of.

Lastly, the petitioners continuously and actively pursued the execution of the reinstatement aspect of the LA’decision, i.e., by filing several motions for execution of the reinstatement order, and motion to cite the respondenin contempt and re-computation of the accrued wages for the respondents’ continued failure to reinstate them.

These facts altogether show that the respondents were not at all sincere in reinstating the petitioners. These fact – when taken together with the fact of delay – reveal the respondents’ obstinate resolve and willful disregard of thimmediate and self-executory nature of the reinstatement aspect of the LA’s decision.



A further and final point that we considered in concluding that the delay was due to the respondents’ fault is th

fact that per the 2005 Revised Rules of Procedure of the NLRC (2005 NLRC Rules),34 employers are required tsubmit a report of compliance within ten (10) calendar days from receipt of the LA’s decision, noncompliance witwhich signifies a clear refusal to reinstate. Arguably, the 2005 NLRC Rules took effect only on January 7, 2006hence, the respondents could not have been reasonably expected to comply with this duty that was not yet ieffect when the LA rendered its decision (finding illegal dismissal) and issued the writ of execution in 2005Nevertheless, when the LA issued the February 16, 2006 alias writ of execution and the April 24, 2007 writ oexecution, the 2005 NLRC Rules was already in place such that the respondents had become duty-bound tsubmit the required compliance report; their noncompliance with this rule all the more showed a clear andetermined refusal to reinstate.

All told, under the facts and the surrounding circumstances, the delay was due to the acts of the respondents tha

we find were unjustified. We reiterate and emphasize, Article 223, paragraph 3, of the Labor Code mandates themployer to immediately reinstate the dismissed employee, either by actually reinstating him/her under thconditions prevailing prior to the dismissal or, at the option of the employer, in the payroll. The respondents' failurin this case to exercise either option rendered them liable for the petitioners' accrued salary until the LA decisiowas reversed by the CA on December 17, 2008. We, therefore, find that the NLRC, in affirming the release of thgarnished amount, merely implemented the mandate of Article 223; it simply recognized as immediate and selexecutory the reinstatement aspect of the LA's decision.

Accordingly, we reverse for legal errors the CA decision. 1 â w p h i 1 We find no grave abuse of discretion attended thNLRC's July 16, 2008 resolution that affirmed the March 13, 2008 decision of the LA granting the release of thgarnished amount.

WHEREFORE, in light of these considerations, we hereby GRANT the petition. We REVERSE and SET ASIDE thSeptember 30, 2010 decision and the January 13, 2011 resolution of the Court of Appeals (CA) in CA-G.R. Sp No112011. Accordingly, we REINSTATE the July 16, 2008 decision of the National Labor Relations Commissio(NLRC) affirming the March 13, 2008 order of the Labor Arbiter in NLRC Case No. 00-04-05469-2004.

Costs against the respondents South East Asian Airlines and Irene Dornier.

SO ORDERED.


WE CONCUR:


Chairperson

MARIANO C. DEL CASTILLO Associate Justice


ESTELA M. PERLAS-BERNABE Associate Justice



ANTONIO T. CARPIO Associate JusticeChairperson, Second Division


Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson's Attestation, I certify that th



24 Roquero v. Philippine Airlines, 449 Phil. 437, 446 (2003).

25 Ibid.

26 345 Phil. 1056.

27 Effective March 21, 1989.

28 Supra, note 26, at 1075. See also International Container Terminal Services, Inc. v. NLRC, G.R. No115452, December 21, 1998, 360 Phil. 527, 534.

29

See Roquero v. Philippine Airlines, Inc., supra, note 24, at 445.

30 See Article XIII, Section 3 of the 1987 Constitution.

31 See Roquero v. Philippine Airlines, Inc., supra, note 24, at 446. See also Garcia v. Philippine Airlines, Incsupra, note 23, 536-539.

32 See Medina v. Consolidated Broadcasting System (CBS)-DZWX, supra, note 22, at 711; InternationaContainer Terminal Services, Inc. v. NLRC, supra, note 28, at 535. See also Philippine Rabbit Bus LinesInc. v. NLRC, 365 Phil. 598, 604; C. Alcantara & Sons v. Court of Appeals, G.R. No. 155109, September 292010.

33 See Garcia v. Philippine Airlines, supra, note 23, at 541.

34 See Section 14, Rule V and Section 6, Rule XI of the Revised Rules of Procedure of the NLRC (2005).






Manila

EN BANC

G.R. Nos. 178034 & 178117 G R. Nos. 186984-85 October 17, 2013

ANDREW JAMES MCBURNIE, Petitioner,vs.EULALIO GANZON, EGI-MANAGERS, INC. and E. GANZON, INC., Respondents.

R E S O L U T I O N

REYES, J.:

For resolution are the –

(1) third motion for reconsideration1 filed by Eulalio Ganzon (Ganzon), EGI-Managers, Inc. (EGI) and E

Ganzon, Inc. (respondents) on March 27, 2012, seeking a reconsideration of the Court’s Decision2 dateSeptember 18, 2009 that ordered the dismissal of their appeal to the National Labor Relations Commissio(NLRC) for failure to post additional appeal bond in the amount of P54,083,910.00; and

(2) motion for reconsideration3 filed by petitioner Andrew James McBurnie (McBurnie) on September 26

2012, assailing the Court en banc’s Resolution4 dated September 4, 2012 that (1) accepted the case frothe Court’s Third Division and (2) enjoined the implementation of the Labor Arbiter’s (LA) decision findinhim to be illegally dismissed by the respondents.

Antecedent Facts

The Decision dated September 18, 2009 provides the following antecedent facts and proceedings –

On October 4, 2002, McBurnie, an Australian national, instituted a complaint for illegal dismissal and othemonetary claims against the respondents. McBurnie claimed that on May 11, 1999, he signed a five-yea

employment agreement5 with the company EGI as an Executive Vice-President who shall oversee thmanagement of the company’s hotels and resorts within the Philippines. He performed work for the company unsometime in November 1999, when he figured in an accident that compelled him to go back to Australia whilrecuperating from his injuries. While in Australia, he was informed by respondent Ganzon that his services were nlonger needed because their intended project would no longer push through.

The respondents opposed the complaint, contending that their agreement with McBurnie was to jointly invest and establish a company for the management of hotels. They did not intend to create an employer-employerelationship, and the execution of the employment contract that was being invoked by McBurnie was solely for thpurpose of allowing McBurnie to obtain an alien work permit in the Philippines. At the time McBurnie left fo Australia for his medical treatment, he had not yet obtained a work permit.

In a Decision6 dated September 30, 2004, the LA declared McBurnie as having been illegally dismissed froemployment, and thus entitled to receive from the respondents the following amounts: (a) US$985,162.00 a

salary and benefits for the unexpired term of their employment contract, (b) P2,000,000.00 as moral anexemplary damages, and (c) attorney’s fees equivalent to 10% of the total monetary award.



Feeling aggrieved, the respondents appealed the LA’s Decision to the NLRC.7 On November 5, 2004, they file

their Memorandum of Appeal8 and Motion to Reduce Bond9, and posted an appeal bond in the amount oP100,000.00. The respondents contended in their Motion to Reduce Bond, inter alia, that the monetary awards othe LA were null and excessive, allegedly with the intention of rendering them incapable of posting the necessaappeal bond. They claimed that an award of "more than P60 Million Pesos to a single foreigner who had no wopermit and who left the country for good one month after the purported commencement of his employment" was

patent nullity.10 Furthermore, they claimed that because of their business losses that may be attributed to aeconomic crisis, they lacked the capacity to pay the bond of almost P60 Million, or even the millions of pesos premium required for such bond.

On March 31, 2005, the NLRC denied11 the motion to reduce bond, explaining that "in cases involving monetar

award, an employer seeking to appeal the [LA’s] decision to the Commission is unconditionally required by Ar223, Labor Code to post bond in the amount equivalent to the monetary award x x x."12 Thus, the NLRC requirefrom the respondents the posting of an additional bond in the amount of P54,083,910.00.

When their motion for reconsideration was denied,13 the respondents decided to elevate the matter to the Couof Appeals (CA) via the Petition for Certiorari and Prohibition (With Extremely Urgent Prayer for the Issuance of

Preliminary Injunction and/or Temporary Restraining Order)14 docketed as CA-G.R. SP No. 90845.

In the meantime, in view of the respondents’ failure to post the required additional bond, the NLRC dismissed the

appeal in a Resolution15 dated March 8, 2006. The respondents’ motion for reconsideration was denied on Jun

30, 2006.16 This prompted the respondents to file with the CA the Petition for Certiorari (With Urgent Prayers fo

the Immediate Issuance of a Temporary Restraining Order and a Writ of Preliminary Injunction)17 docketed as CAG.R. SP No. 95916, which was later consolidated with CA-G.R. SP No. 90845.

CA-G.R. SP Nos. 90845 and 95916

On February 16, 2007, the CA issued a Resolution18 granting the respondents’ application for a writ of preliminainjunction. It directed the NLRC, McBurnie, and all persons acting for and under their authority to refrain fromcausing the execution and enforcement of the LA’s decision in favor of McBurnie, conditioned upon threspondents’ posting of a bond in the amount of P10,000,000.00. McBurnie sought reconsideration of th

issuance of the writ of preliminary injunction, but this was denied by the CA in its Resolution19 dated May 292007.

McBurnie then filed with the Court a Petition for Review on Certiorari20 docketed as G.R. Nos. 178034 an178117, assailing the CA Resolutions that granted the respondents’ application for the injunctive writ. On July 42007, the Court denied the petition on the ground of McBurnie’s failure to comply with the 2004 Rules on Notaria

Practice and to sufficiently show that the CA committed any reversible error.21 A motion for reconsideration wa

denied with finality in a Resolution22 dated October 8, 2007.

Unyielding, McBurnie filed a Motion for Leave (1) To File Supplemental Motion for Reconsideration and (2) T

Admit the Attached Supplemental Motion for Reconsideration,23 which was treated by the Court as a seconmotion for reconsideration, a prohibited pleading under Section 2, Rule 56 of the Rules of Court. Thus, the motio

for leave was denied by the Court in a Resolution24 dated November 26, 2007. The Court’s Resolution dated Ju4, 2007 then became final and executory on November 13, 2007; accordingly, entry of judgment was made in G.R

Nos. 178034 and 178117.25

In the meantime, the CA ruled on the merits of CA-G.R. SP No. 90845 and CA-G.R. SP No. 95916 and rendere

its Decision26 dated October 27, 2008, allowing the respondents’ motion to reduce appeal bond and directing th

NLRC to give due course to their appeal. The dispositive portion of the CA Decision reads:

WHEREFORE, in view of the foregoing, the petition for certiorari and prohibition docketed as CA GR SP No. 9084and the petition for certiorari docketed as CA GR SP No. 95916 are GRANTED. Petitioners’ Motion to Reduc Appeal Bond is GRANTED. Petitioners are hereby DIRECTED to post appeal bond in the amount o



, , . . e s ere y o g ve ue course o pe oners appea n o95916 which is ordered remanded to the NLRC for further proceedings.

SO ORDERED.27

On the issue28 of the NLRC’s denial of the respondents’ motion to reduce appeal bond, the CA ruled that thNLRC committed grave abuse of discretion in immediately denying the motion without fixing an appeal bond in a

amount that was reasonable, as it denied the respondents of their right to appeal from the decision of the LA. 2

The CA explained that "(w)hile Art. 223 of the Labor Code requiring bond equivalent to the monetary award explicit, Section 6, Rule VI of the NLRC Rules of Procedure, as amended, recognized as exception a motion treduce bond upon meritorious grounds and upon posting of a bond in a reasonable amount in relation to th

monetary award."

30

On the issue31 of the NLRC’s dismissal of the appeal on the ground of the respondents’ failure to post thadditional appeal bond, the CA also found grave abuse of discretion on the part of the NLRC, explaining that aappeal bond in the amount of P54,083,910.00 was prohibitive and excessive. Moreover, the appellate court citethe pendency of the petition for certiorari over the denial of the motion to reduce bond, which should hav

prevented the NLRC from immediately dismissing the respondents’ appeal.32

Undeterred, McBurnie filed a motion for reconsideration. At the same time, the respondents moved that the appea

be resolved on the merits by the CA. On March 3, 2009, the CA issued a Resolution33 denying both motion

McBurnie then filed with the Court the Petition for Review on Certiorari34 docketed as G.R. Nos. 186984-85.

In the meantime, the NLRC, acting on the CA’s order of remand, accepted the appeal from the LA’s decision, anin its Decision35 dated November 17, 2009, reversed and set aside the Decision of the LA, and entered a new ondismissing McBurnie’s complaint. It explained that based on records, McBurnie was never an employee of any othe respondents, but a potential investor in a project that included said respondents, barring a claim of dismissamuch less, an illegal dismissal. Granting that there was a contract of employment executed by the parties

McBurnie failed to obtain a work permit which would have allowed him to work for any of the respondents.36 In thabsence of such permit, the employment agreement was void and thus, could not be the source of any right oobligation.

Court Decision dated September 18, 2009

On September 18, 2009, the Third Division of this Court rendered its Decision37 which reversed the CA Decisio

dated October 27, 2008 and Resolution dated March 3, 2009. The dispositive portion reads:

WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals in CA-G.R. SP Nos. 90845 an95916 dated October 27, 2008 granting respondents’ Motion to Reduce Appeal Bond and ordering the NationaLabor Relations Commission to give due course to respondents’ appeal, and its March 3, 2009 Resolution denyinpetitioner’s motion for reconsideration, are REVERSED and SET ASIDE. The March 8, 2006 and June 30, 200Resolutions of the National Labor Relations Commission in NLRC NCR CA NO. 042913-05 dismissinrespondents’ appeal for failure to perfect an appeal and denying their motion for reconsideration, respectively, arREINSTATED and AFFIRMED.

SO ORDERED.38

The Court explained that the respondents’ failure to post a bond equivalent in amount to the LA’s monetary awar

was fatal to the appeal.39 Although an appeal bond may be reduced upon motion by an employer, the followin

conditions must first be satisfied: (1) the motion to reduce bond shall be based on meritorious grounds; and (2) reasonable amount in relation to the monetary award is posted by the appellant. Unless the NLRC grants thmotion to reduce the cash bond within the 10-day reglementary period to perfect an appeal from a judgment of thLA, the employer is mandated to post the cash or surety bond securing the full amount within the said 10-da

period.40 The respondents’ initial appeal bond of P100,000.00 was grossly inadequate compared to the LAmonetary award.

’



e respon en s rs mo on or recons era on was en e y e our or ac o mer v a a eso u ondated December 14, 2009.

Meanwhile, on the basis of the Court’s Decision, McBurnie filed with the NLRC a motion for reconsideration wit

motion to recall and expunge from the records the NLRC Decision dated November 17, 2009.43 The motion wa

granted by the NLRC in its Decision44 dated January 14, 2010.45

Undaunted by the denial of their first motion for reconsideration of the Decision dated September 18, 2009, th

respondents filed with the Court a Motion for Leave to Submit Attached Second Motion for Reconsideration 46 an

Second Motion for Reconsideration,47 which motion for leave was granted in a Resolution48 dated March 152010. McBurnie was allowed to submit his comment on the second motion, and the respondents, their reply to th

comment. On January 25, 2012, however, the Court issued a Resolution49

denying the second motion "for lack omerit," "considering that a second motion for reconsideration is a prohibited pleading x x x." 50

The Court’s Decision dated September 18, 2009 became final and executory on March 14, 2012. Thus, entry o

judgment51 was made in due course, as follows:

ENTRY OF JUDGMENT

This is to certify that on September 18, 2009 a decision rendered in the above-entitled cases wasfiled in this Office, the dispositive part of which reads as follows:

x x x x

and that the same has, on March 14, 2012 become final and executory and is hereby recorded in the Book oEntries of Judgments.52

The Entry of Judgment indicated that the same was made for the Court’s Decision rendered in G.R. Nos. 18698485.

On March 27, 2012, the respondents filed a Motion for Leave to File Attached Third Motion for Reconsiderationwith an attached Motion for Reconsideration (on the Honorable Court’s 25 January 2012 Resolution) with Motion t

Refer These Cases to the Honorable Court En Banc.53 The third motion for reconsideration is founded on thfollowing grounds:

I.

THE PREVIOUS 15 MARCH 2010 RESOLUTION OF THE HONORABLE COURT ACTUALLYGRANTED RESPONDENTS’ "MOTION FOR LEAVE TO SUBMIT A SECOND MOTION FORRECONSIDERATION."

HENCE, RESPONDENTS RESPECTFULLY CONTEND THAT THE SUBSEQUENT 25 JANUARY 2012RESOLUTION CANNOT DENY THE " SECOND MOTION FOR RECONSIDERATION " ON THEGROUND THAT IT IS A PROHIBITED PLEADING. MOREOVER, IT IS RESPECTFULLY CONTENDEDTHAT THERE ARE VERY PECULIAR CIRCUMSTANCES AND NUMEROUS IMPORTANT ISSUES INTHESE CASES THAT CLEARLY JUSTIFY GIVING DUE COURSE TO RESPONDENTS’ "SECONDMOTION FOR RECONSIDERATION," WHICH ARE:

II.

THE 10 MILLION PESOS BOND WHICH WAS POSTED IN COMPLIANCE WITH THE OCTOBER 27,2008 DECISION OF THE COURT OF APPEALS IS A SUBSTANTIAL AND SPECIAL MERITORIOUSCIRCUMSTANCE TO MERIT RECONSIDERATION OF THIS APPEAL.

III.

THE HONORABLE COURT HAS HELD IN NUMEROUS LABOR CASES THAT WITH RESPECT TO ARTICLE 223 OF THE LABOR CODE, THE REQUIREMENTS OF THE LAW SHOULD BE GIVEN A



,CIRCUMSTANCES AND ISSUES.

IV. THE LA’S JUDGMENT WAS PATENTLY VOID SINCE IT AWARDS MORE THAN P60 MILLIONPESOS TO A SINGLE FOREIGNER WHO HAD NO WORK PERMIT, AND NO WORKING VISA.

V.

PETITIONER MCBURNIE DID NOT IMPLEAD THE NATIONAL LABOR RELATIONS COMMISSION(NLRC) IN HIS APPEAL HEREIN, MAKING THE APPEAL INEFFECTIVE AGAINST THE NLRC.

VI.

NLRC HAS DISMISSED THE COMPLAINT OF PETITIONER MCBURNIE IN ITS NOVEMBER 17, 2009DECISION.

VII.

THE HONORABLE COURT’S 18 SEPTEMBER 2009 DECISION WAS TAINTED WITH VERY SERIOUSIRREGULARITIES.

VIII.

GR NOS. 178034 AND 178117 HAVE BEEN INADVERTENTLY INCLUDED IN THIS CASE.

IX.

THE HONORABLE COURT DID NOT DULY RULE UPON THE OTHER VERY MERITORIOUS ARGUMENTS OF THE RESPONDENTS WHICH ARE AS FOLLOWS:

(A) PETITIONER NEVER ATTENDED ANY OF ALL 14 HEARINGS BEFORE THE [LA] (WHEN 2MISSED HEARINGS MEAN DISMISSAL).

(B) PETITIONER REFERRED TO HIMSELF AS A "VICTIM" OF LEISURE EXPERTS, INC., BUTNOT OF ANY OF THE RESPONDENTS.

(C) PETITIONER’S POSITIVE LETTER TO RESPONDENT MR. EULALIO GANZON CLEARLYSHOWS THAT HE WAS NOT ILLEGALLY DISMISSED NOR EVEN DISMISSED BY ANY OF THERESPONDENTS AND PETITIONER EVEN PROMISED TO PAY HIS DEBTS FOR ADVANCES

MADE BY RESPONDENTS.

(D) PETITIONER WAS NEVER EMPLOYED BY ANY OF THE RESPONDENTS. PETITIONERPRESENTED WORK FOR CORONADO BEACH RESORT WHICH IS [NEITHER] OWNED NORCONNECTED WITH ANY OF THE RESPONDENTS.

(E) THE [LA] CONCLUDED THAT PETITIONER WAS DISMISSED EVEN IF THERE WAS ABSOLUTELY NO EVIDENCE AT ALL PRESENTED THAT PETITIONER WAS DISMISSED BYTHE RESPONDENTS.

(F) PETITIONER LEFT THE PHILIPPINES FOR AUSTRALIA JUST 2 MONTHS AFTER THESTART OF THE ALLEGED EMPLOYMENT AGREEMENT, AND HAS STILL NOT RETURNEDTO THE PHILIPPINES AS CONFIRMED BY THE BUREAU OF IMMIGRATION.

(G) PETITIONER COULD NOT HAVE SIGNED AND PERSONALLY APPEARED BEFORE THENLRC ADMINISTERING OFFICER AS INDICATED IN THE COMPLAINT SHEET SINCE HE LEFTTHE COUNTRY 3 YEARS BEFORE THE COMPLAINT WAS FILED AND HE NEVER CAME

BACK.54

On September 4, 2012, the Court en banc55 issued a Resolution56 accepting the case from the Third Division. also issued a temporary restraining order (TRO) enjoining the implementation of the LA’s Decision date

September 30, 2004. This prompted McBurnie’s filing of a Motion for Reconsideration,57 where he invoked the fa ’



a e our s ec s on a e ep em er , a ecome na an execu ory, w an en ry o u gmealready made by the Court.

Our Ruling

In light of pertinent law and jurisprudence, and upon taking a second hard look of the parties’ arguments and threcords of the case, the Court has ascertained that a reconsideration of this Court’s Decision dated Septembe18, 2009 and Resolutions dated December 14, 2009 and January 25, 2012, along with the lifting of the entry o judgment in G.R. No. 186984-85, is in order.

The Court’s acceptance of the

third motion for reconsideration

At the outset, the Court emphasizes that second and subsequent motions for reconsideration are, as a generrule, prohibited. Section 2, Rule 52 of the Rules of Court provides that "no second motion for reconsideration of judgment or final resolution by the same party shall be entertained." The rule rests on the basic tenet oimmutability of judgments. "At some point, a decision becomes final and executory and, consequently, all litigation

must come to an end."58

The general rule, however, against second and subsequent motions for reconsideration admits of settleexceptions. For one, the present Internal Rules of the Supreme Court, particularly Section 3, Rule 15 thereoprovides:

Sec. 3. Second motion for reconsideration. ― The Court shall not entertain a second motion for reconsideration

and any exception to this rule can only be granted in the higher interest of justice by the Court en banc upon vote of at least two-thirds of its actual membership. There is reconsideration "in the higher interest of justice" whethe assailed decision is not only legally erroneous, but is likewise patently unjust and potentially capable ocausing unwarranted and irremediable injury or damage to the parties. A second motion for reconsideration caonly be entertained before the ruling sought to be reconsidered becomes final by operation of law or by thCourt’s declaration.

x x x x (Emphasis ours)

In a line of cases, the Court has then entertained and granted second motions for reconsideration "in the higheinterest of substantial justice," as allowed under the Internal Rules when the assailed decision is "legalerroneous," "patently unjust" and "potentially capable of causing unwarranted and irremediable injury or damag

to the parties." In Tirazona v. Philippine EDS Techno-Service, Inc. (PET, Inc.),59 we also explained that a secon

motion for reconsideration may be allowed in instances of "extraordinarily persuasive reasons and only after aexpress leave shall have been obtained."60 In Apo Fruits Corporation v. Land Bank of the Philippines,61 wallowed a second motion for reconsideration as the issue involved therein was a matter of public interest, as pertained to the proper application of a basic constitutionally-guaranteed right in the government’s implementatio

of its agrarian reform program. In San Miguel Corporation v. NLRC,62 the Court set aside the decisions of the Land the NLRC that favored claimants-security guards upon the Court’s review of San Miguel Corporation’s secon

motion for reconsideration. In Vir-Jen Shipping and Marine Services, Inc. v. NLRC, et al.,63 the Court en banreversed on a third motion for reconsideration the ruling of the Court’s Division on therein private respondentclaim for wages and monetary benefits.

It is also recognized that in some instances, the prudent action towards a just resolution of a case is for the Courto suspend rules of procedure, for "the power of this Court to suspend its own rules or to except a particular cas

from its operations whenever the purposes of justice require it, cannot be questioned."64 In De Guzman

Sandiganbayan,65 the Court, thus, explained:

The rules of procedure should be viewed as mere tools designed to facilitate the attainment of justice. Their stricand rigid application, which would result in technicalities that tend to frustrate rather than promote substantia justice, must always be avoided. Even the Rules of Court envision this liberality. This power to suspend or evedisregard the rules can be so pervasive and encompassing so as to alter even that which this Court itself haalready declared to be final, as we are now compelled to do in this case. x x x.



x x x x

The Rules of Court was conceived and promulgated to set forth guidelines in the dispensation of justice but not tbind and chain the hand that dispenses it, for otherwise, courts will be mere slaves to or robots of technical rulesshorn of judicial discretion. That is precisely why courts in rendering real justice have always been, as they in facought to be, conscientiously guided by the norm that when on the balance, technicalities take a backseat againssubstantive rights, and not the other way around. Truly then, technicalities, in the appropriate language of Justic

Makalintal, "should give way to the realities of the situation." x x x.66 (Citations omitted)

Consistent with the foregoing precepts, the Court has then reconsidered even decisions that have attained finalitfinding it more appropriate to lift entries of judgments already made in these cases. In Navarro v. Executiv

Secretary,67 we reiterated the pronouncement in De Guzman that the power to suspend or even disregard rules o

procedure can be so pervasive and compelling as to alter even that which this Court itself has already declarefinal. The Court then recalled in Navarro an entry of judgment after it had determined the validity anconstitutionality of Republic Act No. 9355, explaining that:

Verily, the Court had, on several occasions, sanctioned the recall of entries of judgment in light of attendanextraordinary circumstances. The power to suspend or even disregard rules of procedure can be so pervasivand compelling as to alter even that which this Court itself had already declared final. In this case, the compellinconcern is not only to afford the movants-intervenors the right to be heard since they would be adversely affecteby the judgment in this case despite not being original parties thereto, but also to arrive at the correcinterpretation of the provisions of the [Local Government Code (LGC)] with respect to the creation of loca

government units. x x x.68 (Citations omitted)

In Munoz v. CA,69 the Court resolved to recall an entry of judgment to prevent a miscarriage of justice. Th justification was likewise applied in Tan Tiac Chiong v. Hon. Cosico,70 wherein the Court held that:

The recall of entries of judgments, albeit rare, is not a novelty. In Muñoz v. CA , where the case was elevated tothis Court and a first and second motion for reconsideration had been denied with finality , the Court, in thinterest of substantial justice, recalled the Entry of Judgment as well as the letter of transmittal of the records t

the Court of Appeals.71 (Citation omitted)

In Barnes v. Judge Padilla,72 we ruled:

A final and executory judgment can no longer be attacked by any of the parties or be modified, directly oindirectly, even by the highest court of the land.

However, this Court has relaxed this rule in order to serve substantial justice considering (a) matters of life, libertyhonor or property, (b) the existence of special or compelling circumstances, (c) the merits of the case, (d) a causnot entirely attributable to the fault or negligence of the party favored by the suspension of the rules, (e) a lack o

any showing that the review sought is merely frivolous and dilatory, and (f) the other party will not be unjustl

prejudiced thereby.73 (Citations omitted)

As we shall explain, the instant case also qualifies as an exception to, first, the proscription against second ansubsequent motions for reconsideration, and second, the rule on immutability of judgments; a reconsideration othe Decision dated September 18, 2009, along with the Resolutions dated December 14, 2009 and January 252012, is justified by the higher interest of substantial justice.

To begin with, the Court agrees with the respondents that the Court’s prior resolve to grant , and not just merenote, in a Resolution dated March 15, 2010 the respondents’ motion for leave to submit their second motion foreconsideration already warranted a resolution and discussion of the motion for reconsideration on its merits

Instead of doing this, however, the Court issued on January 25, 2012 a Resolution74 denying the motion treconsider for lack of merit, merely citing that it was a "prohibited pleading under Section 2, Rule 52 in relation t

Section 4, Rule 56 of the 1997 Rules of Civil Procedure, as amended."75 In League of Cities of the Philippine

(LCP) v. Commission on Elections,76 we reiterated a ruling that when a motion for leave to file and admit a seconmotion for reconsideration is granted by the Court, the Court therefore allows the filing of the second motion foreconsideration. In such a case, the second motion for reconsideration is no longer a prohibited pleading. Similar



n s case, ere was en no reason or e our o s cons er e respon en s secon mo on oreconsideration as a prohibited pleading, and deny it plainly on such ground. The Court intends to remedy sucerror through this resolution.

More importantly, the Court finds it appropriate to accept the pending motion for reconsideration and resolve it othe merits in order to rectify its prior disposition of the main issues in the petition. Upon review, the Court constrained to rule differently on the petitions. We have determined the grave error in affirming the NLRCrulings, promoting results that are patently unjust for the respondents, as we consider the facts of the casepertinent law, jurisprudence, and the degree of the injury and damage to the respondents that will inevitably resufrom the implementation of the Court’s Decision dated September 18, 2009.

The rule on appeal bonds

We emphasize that the crucial issue in this case concerns the sufficiency of the appeal bond that was posted bthe respondents. The present rule on the matter is Section 6, Rule VI of the 2011 NLRC Rules of Procedure, whicwas substantially the same provision in effect at the time of the respondents’ appeal to the NLRC, and whicreads:

RULE VI APPEALS

Sec. 6. BOND. – In case the decision of the Labor Arbiter or the Regional Director involves a monetary award, aappeal by the employer may be perfected only upon the posting of a cash or surety bond. The appeal bond shaeither be in cash or surety in an amount equivalent to the monetary award, exclusive of damages and attorneyfees.

x x x x

No motion to reduce bond shall be entertained except on meritorious grounds and upon the posting of a bond in reasonable amount in relation to the monetary award.

The filing of the motion to reduce bond without compliance with the requisites in the preceding paragraph shall nostop the running of the period to perfect an appeal. (Emphasis supplied)

While the CA, in this case, allowed an appeal bond in the reduced amount of P10,000,000.00 and then orderethe case’s remand to the NLRC, this Court’s Decision dated September 18, 2009 provides otherwise, as it reads ipart:

The posting of a bond is indispensable to the perfection of an appeal in cases involving monetary awards from th

decision of the Labor Arbiter. The lawmakers clearly intended to make the bond a mandatory requisite for thperfection of an appeal by the employer as inferred from the provision that an appeal by the employer may bperfected "only upon the posting of a cash or surety bond." The word "only" makes it clear that the posting of cash or surety bond by the employer is the essential and exclusive means by which an employer’s appeal may bperfected. x x x.

Moreover, the filing of the bond is not only mandatory but a jurisdictional requirement as well, that must bcomplied with in order to confer jurisdiction upon the NLRC. Non-compliance therewith renders the decision of thLabor Arbiter final and executory. This requirement is intended to assure the workers that if they prevail in thcase, they will receive the money judgment in their favor upon the dismissal of the employer’s appeal. It is intendeto discourage employers from using an appeal to delay or evade their obligation to satisfy their employees’ jus

and lawful claims.

x x x x

Thus, it behooves the Court to give utmost regard to the legislative and administrative intent to strictly require themployer to post a cash or surety bond securing the full amount of the monetary award within the 10[-]dareglementary period. Nothing in the Labor Code or the NLRC Rules of Procedure authorizes the posting of a bonthat is less than the monetary award in the judgment, or would deem such insufficient posting as sufficient tperfect the appeal.



While the bond may be reduced upon motion by the employer, this is subject to the conditions that (1) the motioto reduce the bond shall be based on meritorious grounds; and (2) a reasonable amount in relation to thmonetary award is posted by the appellant, otherwise the filing of the motion to reduce bond shall not stop thrunning of the period to perfect an appeal. The qualification effectively requires that unless the NLRC grants threduction of the cash bond within the 10-day reglementary period, the employer is still expected to post the casor surety bond securing the full amount within the said 10-day period. If the NLRC does eventually grant thmotion for reduction after the reglementary period has elapsed, the correct relief would be to reduce the cash o

surety bond already posted by the employer within the 10-day period.77 (Emphasis supplied; underscoring ours)

To begin with, the Court rectifies its prior pronouncement – the unqualified statement that even an appellant whseeks a reduction of an appeal bond before the NLRC is expected to post a cash or surety bond securing the fuamount of the judgment award within the 10-day reglementary period to perfect the appeal.

The suspension of the period toperfect the appeal upon the filing of a motion to reduce bond

To clarify, the prevailing jurisprudence on the matter provides that the filing of a motion to reduce bond, couple

with compliance with the two conditions emphasized in Garcia v. KJ Commercial78 for the grant of such motionnamely, (1) a meritorious ground, and (2) posting of a bond in a reasonable amount, shall suffice to suspend th

running of the period to perfect an appeal from the labor arbiter’s decision to the NLRC. 79 To require the fuamount of the bond within the 10-day reglementary period would only render nugatory the legal provisions whicallow an appellant to seek a reduction of the bond. Thus, we explained in Garcia:

The filing of a motion to reduce bond and compliance with the two conditions stop the running of the period tperfect an appeal. x x x

x x x x

The NLRC has full discretion to grant or deny the motion to reduce bond, and it may rule on the motion beyonthe 10-day period within which to perfect an appeal. Obviously, at the time of the filing of the motion to reducbond and posting of a bond in a reasonable amount, there is no assurance whether the appellant’s motion indeed based on "meritorious ground" and whether the bond he or she posted is of a "reasonable amount." Thuthe appellant always runs the risk of failing to perfect an appeal.

x x x In order to give full effect to the provisions on motion to reduce bond, the appellant must be allowed to wait fothe ruling of the NLRC on the motion even beyond the 10-day period to perfect an appeal. If the NLRC grants th

motion and rules that there is indeed meritorious ground and that the amount of the bond posted is reasonablethen the appeal is perfected. If the NLRC denies the motion, the appellant may still file a motion for reconsideratioas provided under Section 15, Rule VII of the Rules. If the NLRC grants the motion for reconsideration and rulethat there is indeed meritorious ground and that the amount of the bond posted is reasonable, then the appeal perfected. If the NLRC denies the motion, then the decision of the labor arbiter becomes final and executory.

x x x x

In any case, the rule that the filing of a motion to reduce bond shall not stop the running of the period to perfect aappeal is not absolute. The Court may relax the rule. In Intertranz Container Lines, Inc. v. Bautista, the Court held

"Jurisprudence tells us that in labor cases, an appeal from a decision involving a monetary award may bperfected only upon the posting of cash or surety bond. The Court, however, has relaxed this requirement unde

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 unjusenrichment; and (3) special circumstances of the case combined with its legal merits, and the amount and th

issue involved."80 (Citations omitted and emphasis ours)

A serious error of the NLRC was its outright denial of the motion to reduce the bond, without even considering threspondents’ arguments and totally unmindful of the rules and jurisprudence that allow the bond’s reductionInstead of resolving the motion to reduce the bond on its merits, the NLRC insisted on an amount that waequivalent to the monetary award, merely explaining:



We are constrained to deny respondents’ motion for reduction. As held by the Supreme Court in a recent case, cases involving monetary award, an employer seeking to appeal the Labor Arbiter’s decision to the Commission unconditionally required by Art. 223, Labor Code to post bond in the amount equivalent to the monetary awar

(Calabash Garments vs. NLRC, G.R. No. 110827, August 8, 1996). x x x81 (Emphasis ours)

When the respondents sought to reconsider, the NLRC still refused to fully decide on the motion. It refused to aleast make a preliminary determination of the merits of the appeal, as it held:

We are constrained to dismiss respondents’ Motion for Reconsideration. Respondents’ contention that the appea

bond is excessive and based on a decision which is a patent nullity involves the merits of the case. x x x82

Prevailing rules and jurisprudenceallow the reduction of appeal bonds.

By such haste of the NLRC in peremptorily denying the respondents’ motion without considering the respondentsarguments, it effectively denied the respondents of their opportunity to seek a reduction of the bond even whethe same is allowed under the rules and settled jurisprudence. It was equivalent to the NLRC’s refusal to exercisits discretion, as it refused to determine and rule on a showing of meritorious grounds and the reasonableness o

the bond tendered under the circumstances.83 Time and again, the Court has cautioned the NLRC to give Articl223 of the Labor Code, particularly the provisions requiring bonds in appeals involving monetary awards, a liber

interpretation in line with the desired objective of resolving controversies on the merits.84 The NLRC’s failure ttake action on the motion to reduce the bond in the manner prescribed by law and jurisprudence then cannot bcountenanced. Although an appeal by parties from decisions that are adverse to their interests is neither a natura

right nor a part of due process, it is an essential part of our judicial system. Courts should proceed with caution sas not to deprive a party of the right to appeal, but rather, ensure that every party has the amplest opportunity fo

the proper and just disposition of their cause, free from the constraints of technicalities.85 Considering thmandate of labor tribunals, the principle equally applies to them.

Given the circumstances of the case, the Court’s affirmance in the Decision dated September 18, 2009 of thNLRC’s strict application of the rule on appeal bonds then demands a re-examination. Again, the emerging trenin our jurisprudence is to afford every party-litigant the amplest opportunity for the proper and just determinatio

of his cause, free from the constraints of technicalities.86 Section 2, Rule I of the NLRC Rules of Procedure alsprovides the policy that "the Rules shall be liberally construed to carry out the objectives of the Constitution, thLabor Code of the Philippines and other relevant legislations, and to assist the parties in obtaining jus

expeditious and inexpensive resolution and settlement of labor disputes."87

In accordance with the foregoing, although the general rule provides that an appeal in labor cases from a decisioinvolving a monetary award may be perfected only upon the posting of a cash or surety bond, the Court harelaxed this requirement under certain exceptional circumstances in order to resolve controversies on their meritsThese circumstances include: (1) the fundamental consideration of substantial justice; (2) the prevention omiscarriage of justice or of unjust enrichment; and (3) special circumstances of the case combined with its lega

merits, and the amount and the issue involved.88 Guidelines that are applicable in the reduction of appeal bond

were also explained in Nicol v. Footjoy Industrial Corporation.89 The bond requirement in appeals involvinmonetary awards has been and may be relaxed in meritorious cases, including instances in which (1) there wasubstantial compliance with the Rules, (2) surrounding facts and circumstances constitute meritorious grounds treduce the bond, (3) a liberal interpretation of the requirement of an appeal bond would serve the desire

objective of resolving controversies on the merits, or (4) the appellants, at the very least, exhibited their willingnesand/or good faith by posting a partial bond during the reglementary period.90

In Blancaflor v. NLRC,91 the Court also emphasized that while Article 22392 of the Labor Code, as amended bRepublic Act No. 6715, which requires a cash or surety bond in an amount equivalent to the monetary award in th judgment appealed from may be considered a jurisdictional requirement for the perfection of an appeanevertheless, adhering to the principle that substantial justice is better served by allowing the appeal on the meritto be threshed out by the NLRC, the foregoing requirement of the law should be given a liberal interpretation.



, ,LAs, we stress that the NLRC, pursuant to Section 6, Rule VI of the NLRC Rules of Procedure, shall only accepmotions to reduce bond that are coupled with the posting of a bond in a reasonable amount. Time and again, whave explained that the bond requirement imposed upon appellants in labor cases is intended to ensure thsatisfaction of awards that are made in favor of appellees, in the event that their claims are eventually sustaine

by the courts.93 On the part of the appellants, its posting may also signify their good faith and willingness trecognize the final outcome of their appeal.

At the time of a motion to reduce appeal bond’s filing, the question of what constitutes "a reasonable amount obond" that must accompany the motion may be subject to differing interpretations of litigants. The judgment of thNLRC which has the discretion under the law to determine such amount cannot as yet be invoked by litigants untafter their motions to reduce appeal bond are accepted.

Given these limitations, it is not uncommon for a party to unduly forfeit his opportunity to seek a reduction of threquired bond and thus, to appeal, when the NLRC eventually disagrees with the party’s assessment. These havalso resulted in the filing of numerous petitions against the NLRC, citing an alleged grave abuse of discretion othe part of the labor tribunal for its finding on the sufficiency or insufficiency of posted appeal bonds.

It is in this light that the Court finds it necessary to set a parameter for the litigants’ and the NLRC’s guidance othe amount of bond that shall hereafter be filed with a motion for a bond’s reduction. To ensure that the provisionof Section 6, Rule VI of the NLRC Rules of Procedure that give parties the chance to seek a reduction of thappeal bond are effectively carried out, without however defeating the benefits of the bond requirement in favor oa winning litigant, all motions to reduce bond that are to be filed with the NLRC shall be accompanied by thposting of a cash or surety bond equivalent to 10% of the monetary award that is subject of the appeal, which shaprovisionally be deemed the reasonable amount of the bond in the meantime that an appellant’s motion is pendin

resolution by the Commission. In conformity with the NLRC Rules, the monetary award, for the purpose ocomputing the necessary appeal bond, shall exclude damages and attorney’s fees.94 Only after the posting of bond in the required percentage shall an appellant’s period to perfect an appeal under the NLRC Rules bdeemed suspended.

The foregoing shall not be misconstrued to unduly hinder the NLRC’s exercise of its discretion, given that th

percentage of bond that is set by this guideline shall be merely provisional. The NLRC retains its authority anduty to resolve the motion and determine the final amount of bond that shall be posted by the appellant, still iaccordance with the standards of "meritorious grounds" and "reasonable amount". Should the NLRC, afteconsidering the motion’s merit, determine that a greater amount or the full amount of the bond needs to be posteby the appellant, then the party shall comply accordingly. The appellant shall be given a period of 10 days fromnotice of the NLRC order within which to perfect the appeal by posting the required appeal bond.

Meritorious ground as a conditionfor the reduction of the appeal bond

In all cases, the reduction of the appeal bond shall be justified by meritorious grounds and accompanied by thposting of the required appeal bond in a reasonable amount.

The requirement on the existence of a "meritorious ground" delves on the worth of the parties’ arguments, takininto account their respective rights and the circumstances that attend the case. The condition was emphasized i

University Plans Incorporated v. Solano,95 wherein the Court held that while the NLRC’s Revised Rules oProcedure "allows the [NLRC] to reduce the amount of the bond, the exercise of the authority is not a matter oright on the part of the movant, but lies within the sound discretion of the NLRC upon a showing of meritoriou

grounds."96 By jurisprudence, the merit referred to may pertain to an appellant’s lack of financial capability to pa

the full amount of the bond,97 the merits of the main appeal such as when there is a valid claim that there was n

illegal dismissal to justify the award,98 the absence of an employer-employee relationship,99 prescription o

claims,100 and other similarly valid issues that are raised in the appeal.101 For the purpose of determining "meritorious ground", the NLRC is not precluded from receiving evidence, or from making a prelimina

determination of the merits of the appellant’s contentions.102

In this case, the NLRC then should have considered the respondents’ arguments in the memorandum on appethat was filed with the motion to reduce the requisite appeal bond. Although a consideration of said arguments a



a po n wou ave een mere y pre mnary an s ou no n any way n e even ua ou come o e appeait was apparent that the respondents’ defenses came with an indication of merit that deserved a full review of thdecision of the LA. The CA, by its Resolution dated February 16, 2007, even found justified the issuance of preliminary injunction to enjoin the immediate execution of the LA’s decision, and this Court, a temporarrestraining order on September 4, 2012.

Significantly, following the CA’s remand of the case to the NLRC, the latter even rendered a Decision thacontained findings that are inconsistent with McBurnie’s claims. The NLRC reversed and set aside the decision othe LA, and entered a new one dismissing McBurnie’s complaint. It explained that McBurnie was not an employeof the respondents; thus, they could not have dismissed him from employment. The purported employmencontract of the respondents with the petitioner was qualified by the conditions set forth in a letter dated May 111999, which reads:

May 11, 1999

MR. ANDREW MCBURNIE

Re: Employment Contract

Dear Andrew,

It is understood that this Contract is made subject to the understanding that it is effective only whenthe project financing for our Baguio Hotel project pushed through.

The agreement with EGI Managers, Inc. is made now to support your need to facilitate your workpermit with the Department of Labor in view of the expiration of your contract with Pan Pacific.

Regards,

Sgd. Eulalio Ganzon (p. 203, Records)103

For the NLRC, the employment agreement could not have given rise to an employer-employee relationship breason of legal impossibility. The two conditions that form part of their agreement, namely, the successfcompletion of the project financing for the hotel project in Baguio City and McBurnie’s acquisition of an Alie

Employment Permit, remained unsatisfied.104 The NLRC concluded that McBurnie was instead a potential investoin a project that included Ganzon, but the said project failed to pursue due to lack of funds. Any work performed bMcBurnie in relation to the project was merely preliminary to the business venture and part of his "due diligence

study before pursuing the project, "done at his own instance, not in furtherance of the employment contract but fohis own investment purposes."105 Lastly, the alleged employment of the petitioner would have been void for beincontrary to law, since it is undisputed that McBurnie did not have any work permit. The NLRC declared:

Absent an employment permit, any employment relationship that McBurnie contemplated with the respondents wavoid for being contrary to law. A void or inexistent contract, in turn, has no force and effect from the beginning as it had never been entered into. Thus, without an Alien Employment Permit, the "Employment Agreement" is voiand could not be the source of a right or obligation. In support thereof, the DOLE issued a certification tha

McBurnie has neither applied nor been issued an Alien Employment Permit (p. 204, Records).106

McBurnie moved to reconsider, citing the Court’s Decision of September 18, 2009 that reversed and set aside thCA’s Decision authorizing the remand. Although the NLRC granted the motion on the said ground via

Decision107

that set aside the NLRC’s Decision dated November 17, 2009, the findings of the NLRC in thNovember 17, 2009 decision merit consideration, especially since the findings made therein are supported by thcase records.

In addition to the apparent merit of the respondents’ appeal, the Court finds the reduction of the appeal bon justified by the substantial amount of the LA’s monetary award. Given its considerable amount, we find reason the respondents’ claim that to require an appeal bond in such amount could only deprive them of the right t

appeal, even force them out of business and affect the livelihood of their employees.108 In Rosewood Processing

Inc. v. NLRC,109 we emphasized: "Where a decision may be made to rest on informed judgment rather than rigi



,‘secundum rationem but also secundum caritatem.’"110

What constitutes a reasonableamount in the determination of thefinal amount of appeal bond

As regards the requirement on the posting of a bond in a "reasonable amount," the Court holds that the findetermination thereof by the NLRC shall be based primarily on the merits of the motion and the main appeal.

Although the NLRC Rules of Procedure, particularly Section 6 of Rule VI thereof, provides that the bond to bposted shall be "in a reasonable amount in relation to the monetary award ," the merit of the motion shall alwaytake precedence in the determination. Settled is the rule that procedural rules were conceived, and should thus bapplied in a manner that would only aid the attainment of justice. If a stringent application of the rules would hinde

rather than serve the demands of substantial justice, the former must yield to the latter.111

Thus, in Nicol where the appellant posted a bond of P10,000,000.00 upon an appeal from the LA’s award oP51,956,314.00, the Court, instead of ruling right away on the reasonableness of the bond’s amount solely on thbasis of the judgment award, found it appropriate to remand the case to the NLRC, which should first determin

the merits of the motion. In University Plans,112 the Court also reversed the outright dismissal of an appeal wherthe bond posted in a judgment award of more than P30,000,000.00 was P30,000.00. The Court then directed thNLRC to first determine the merit, or lack of merit, of the motion to reduce the bond, after the appellant thereiclaimed that it was under receivership and thus, could not dispose of its assets within a short notice. Clearly, th

rule on the posting of an appeal bond should not be allowed to defeat the substantive rights of the parties.113

Notably, in the present case, following the CA’s rendition of its Decision which allowed a reduced appeal bond, threspondents have posted a bond in the amount of P10,000,000.00. In Rosewood, the Court deemed the postinof a surety bond of P50,000.00, coupled with a motion to reduce the appeal bond, as substantial compliance witthe legal requirements for an appeal from a P789,154.39 monetary award "considering the clear merits whicappear, res ipsa loquitor, in the appeal from the LA’s Decision, and the petitioner’s substantial compliance wit

rules governing appeals."114 The foregoing jurisprudence strongly indicate that in determining the reasonabamount of appeal bonds, the Court primarily considers the merits of the motions and appeals.

Given the circumstances in this case and the merits of the respondents’ arguments before the NLRC, the Couholds that the respondents had posted a bond in a "reasonable amount", and had thus complied with threquirements for the perfection of an appeal from the LA’s decision. The CA was correct in ruling that:

In the case of Nueva Ecija I Electric Cooperative, Inc. (NEECO I) Employees Association, President RodolfJimenez, and members, Reynaldo Fajardo, et al. vs. NLRC, Nueva Ecija I Electric Cooperative, Inc. (NEECO I) anPatricio de la Peña (GR No. 116066, January 24, 2000), the Supreme Court recognized that: "the NLRC, in itResolution No. 11-01-91 dated November 7, 1991 deleted the phrase "exclusive of moral and exemplary damageas well as attorney’s fees in the determination of the amount of bond, and provided a safeguard against thimposition of excessive bonds by providing that "(T)he Commission may in meritorious cases and upon motion othe appellant, reduce the amount of the bond."

In the case of Cosico, Jr. vs. NLRC, 272 SCRA 583, it was held:

"The unreasonable and excessive amount of bond would be oppressive and unjust and would have the effect odepriving a party of his right to appeal."

x x x x

In dismissing outright the motion to reduce bond filed by petitioners, NLRC abused its discretion. It should havfixed an appeal bond in a reasonable amount. Said dismissal deprived petitioners of their right to appeal the Labo Arbiter’s decision.

x x x x

NLRC Rules allow reduction of appeal bond on meritorious grounds (Sec. 6, Rule VI, NLRC Rules of Procedure



This Court finds the appeal bond in the amount of P54,083,910.00 prohibitive and excessive, which constitutes

meritorious ground to allow a motion for reduction thereof.115

The foregoing declaration of the Court requiring a bond in a reasonable amount, taking into account the merits the motion and the appeal, is consistent with the oft-repeated principle that letter-perfect rules must yield to th

broader interest of substantial justice.116

The effect of a denial of the appeal

to the NLRC

In finding merit in the respondents’ motion for reconsideration, we also take into account the unwarranted result

that will arise from an implementation of the Court’s Decision dated September 18, 2009. We emphasizemoreover, that although a remand and an order upon the NLRC to give due course to the appeal would havbeen the usual course after a finding that the conditions for the reduction of an appeal bond were duly satisfied bthe respondents, given such results, the Court finds it necessary to modify the CA’s order of remand, and instearule on the dismissal of the complaint against the respondents.

Without the reversal of the Court’s Decision and the dismissal of the complaint against the respondents, McBurnwould be allowed to claim benefits under our labor laws despite his failure to comply with a settled requirement foforeign nationals.

Considering that McBurnie, an Australian, alleged illegal dismissal and sought to claim under our labor laws, it wa

necessary for him to establish, first and foremost, that he was qualified and duly authorized to obtain employmen

within our jurisdiction. A requirement for foreigners who intend to work within the country is an employment permias provided under Article 40, Title II of the Labor Code which reads:

Art. 40. Employment permit for non-resident aliens. Any alien seeking admission to the Philippines for employmepurposes and any domestic or foreign employer who desires to engage an alien for employment in the Philippineshall obtain an employment permit from the Department of Labor.

In WPP Marketing Communications, Inc. v. Galera,117 we held that a foreign national’s failure to seek a

employment permit prior to employment poses a serious problem in seeking relief from the Court.118 Thualthough the respondent therein appeared to have been illegally dismissed from employment, we explained:

This is Galera’s dilemma: Galera worked in the Philippines without proper work permit but now wants to claimemployee’s benefits under Philippine labor laws.

x x x x

The law and the rules are consistent in stating that the employment permit must be acquired prior to employmenThe Labor Code states: "Any alien seeking admission to the Philippines for employment purposes and andomestic or foreign employer who desires to engage an alien for employment in the Philippines shall obtain aemployment permit from the Department of Labor." Section 4, Rule XIV, Book I of the Implementing Rules anRegulations provides:

"Employment permit required for entry. – No alien seeking employment, whether as a resident or non-residenmay enter the Philippines without first securing an employment permit from the Ministry. If an alien enters thcountry under a non-working visa and wishes to be employed thereafter, he may be allowed to be employed upopresentation of a duly approved employment permit."

Galera cannot come to this Court with unclean hands. To grant Galera’s prayer is to sanction the violation of thPhilippine labor laws requiring aliens to secure work permits before their employment. We hold that the status qumust prevail in the present case and we leave the parties where they are. This ruling, however, does not ba

Galera from seeking relief from other jurisdictions.119 (Citations omitted and underscoring ours)

Clearly, this circumstance on the failure of McBurnie to obtain an employment permit, by itself, necessitates thdismissal of his labor complaint.



ur ermore, as as een prev ous y scusse , e as ru e n s ec s on a e ovem er , o

the issue of illegal dismissal. It declared that McBurnie was never an employee of any of the respondents.120 explained:

All these facts and circumstances prove that McBurnie was never an employee of Eulalio Ganzon or threspondent companies, but a potential investor in a project with a group including Eulalio Ganzon and Martinez busaid project did not take off because of lack of funds.

McBurnie further claims that in conformity with the provision of the employment contract pertaining to the obligatioof the respondents to provide housing, respondents assigned him Condo Unit # 812 of the Makati Cinema SquarCondominium owned by the respondents. He was also allowed to use a Hyundai car. If it were true that thcontract of employment was for working visa purposes only, why did the respondents perform their obligations t

him?

There is no question that respondents assigned him Condo Unit # 812 of the MCS, but this was not free of chargeIf it were true that it is part of the compensation package as employee, then McBurnie would not be obligated tpay anything, but clearly, he admitted in his letter that he had to pay all the expenses incurred in the apartment.

Assuming for the sake of argument that the employment contract is valid between them, record shows thaMcBurnie worked from September 1, 1999 until he met an accident on the last week of October. During the perioof employment, the respondents must have paid his salaries in the sum of US$26,000.00, more or less.

However, McBurnie failed to present a single evidence that [the respondents] paid his salaries like payslip, checor cash vouchers duly signed by him or any document showing proof of receipt of his compensation from threspondents or activity in furtherance of the employment contract. Granting again that there was a valid contrac

of employment, it is undisputed that on November 1, 1999, McBurnie left for Australia and never came back. x x.121 (Emphasis supplied)

Although the NLRC’s Decision dated November 17, 2009 was set aside in a Decision dated January 14, 2010, thCourt’s resolve to now reconsider its Decision dated September 18, 2009 and to affirm the CA’s Decision anResolution in the respondents’ favor effectively restores the NLRC’s basis for rendering the Decision dateNovember 17, 2009.

More importantly, the NLRC’s findings on the contractual relations between McBurnie and the respondents arsupported by the records.

First, before a case for illegal dismissal can prosper, an employer-employee relationship must first b

established.

122

Although an employment agreement forms part of the case records, respondent Ganzon signed with the notation "per my note."123 The respondents have sufficiently explained that the note refers to the letter 12

dated May 11, 1999 which embodied certain conditions for the employment’s effectivity. As we have previouslexplained, however, the said conditions, particularly on the successful completion of the project financing for thhotel project in Baguio City and McBurnie’s acquisition of an Alien Employment Permit, failed to materialize. Sucdefense of the respondents, which was duly considered by the NLRC in its Decision dated November 17, 2009was not sufficiently rebutted by McBurnie.

Second, McBurnie failed to present any employment permit which would have authorized him to obtain employmenin the Philippines. This circumstance negates McBurnie’s claim that he had been performing work for threspondents by virtue of an employer-employee relationship. The absence of the employment permit insteabolsters the claim that the supposed employment of McBurnie was merely simulated, or did not ensue due to thnon-fulfillment of the conditions that were set forth in the letter of May 11, 1999.

Third, besides the employment agreement, McBurnie failed to present other competent evidence to prove hclaim of an employer-employee relationship. Given the parties’ conflicting claims on their true intention in executinthe agreement, it was necessary to resort to the established criteria for the determination of an employeemployee relationship, namely: (1) the selection and engagement of the employee; (2) the payment of wages; (3

the power of dismissal; and (4) the power to control the employee’s conduct.125 The rule of thumb remains: thonus probandi falls on the claimant to establish or substantiate the claim by the requisite quantum of evidence

Whoever claims entitlement to the benefits provided by law should establish his or her right thereto. 126 McBurnfailed in this regard. 1 â w p h i 1 As previously observed by the NLRC, McBurnie even failed to show through any documen



such as payslips or vouchers that his salaries during the time that he allegedly worked for the respondents werpaid by the company. In the absence of an employer-employee relationship between McBurnie and threspondents, McBurnie could not successfully claim that he was dismissed, much less illegally dismissed, by thlatter. Even granting that there was such an employer-employee relationship, the records are barren of andocument showing that its termination was by the respondents’ dismissal of McBurnie.

Given these circumstances, it would be a circuitous exercise for the Court to remand the case to the NLRC, morso in the absence of any showing that the NLRC should now rule differently on the case’s merits. In Medlin

Management, Inc. v. Roslinda,127 the Court ruled that when there is enough basis on which the Court may rendea proper evaluation of the merits of the case, the Court may dispense with the time-consuming procedure oremanding a case to a labor tr ibunal in order "to prevent delays in the disposition of the case," "to serve the endof justice" and when a remand "would serve no purpose save to further delay its disposition contrary to the spirit o

fair play."128 In Real v. Sangu Philippines, Inc.,129 we again ruled:

With the foregoing, it is clear that the CA erred in affirming the decision of the NLRC which dismissed petitionercomplaint for lack of jurisdiction. In cases such as this, the Court normally remands the case to the NLRC andirects it to properly dispose of the case on the merits. "However, when there is enough basis on which a prope

evaluation of the merits of petitioner’s case may be had, the Court may dispense with the time-consuminprocedure of remand in order to prevent further delays in the disposition of the case." "It is already an accepterule of procedure for us to strive to settle the entire controversy in a single proceeding, leaving no root or brancto bear the seeds of litigation. If, based on the records, the pleadings, and other evidence, the dispute can bresolved by us, we will do so to serve the ends of justice instead of remanding the case to the lower court fo

further proceedings." x x x.130 (Citations omitted)

It bears mentioning that although the Court resolves to grant the respondents’ motion for reconsideration, thother grounds raised in the motion, especially as they pertain to insinuations on irregularities in the Court, deservno merit for being founded on baseless conclusions. Furthermore, the Court finds it unnecessary to discuss thother grounds that are raised in the motion, considering the grounds that already justify the dismissal oMcBurnie’s complaint.

All these considered, the Court also affirms its Resolution dated September 4, 2012; accordingly, McBurniemotion for reconsideration thereof is denied.

WHEREFORE, in light of the foregoing, the Court rules as follows:

(a) The motion for reconsideration filed on September 26, 2012 by petitioner Andrew James McBurnie

DENIED;

(b) The motion for reconsideration filed on March 27, 2012 by respondents Eulalio Ganzon, EGI-ManagersInc. and E. Ganzon, Inc. is GRANTED.

(c) The Entry of Judgment issued in G.R. Nos. 186984-85 is LIFTED. This Court’s Decision dateSeptember 18, 2009 and Resolutions dated December 14, 2009 and January 25, 2012 are SET ASIDE. ThCourt of Appeals Decision dated October 27, 2008 and Resolution dated March 3, 2009 in CA-G.R. SP No90845 and CA-G.R. SP No. 95916 are AFFIRMED WITH MODIFICATION. In lieu of a remand of the case tthe National Labor Relations Commission, the complaint for illegal dismissal filed by petitioner Andrew JameMcBurnie against respondents Eulalio Ganzon, EGI-Managers, Inc. and E. Ganzon, Inc. is DISMISSED.

Furthermore, on the matter of the filing and acceptance of motions to reduce appeal bond, as provided in Sectio

6, Rule VI of the 2011 NLRC Rules of Procedure, the Court hereby RESOLVES that henceforth, the followinguidelines shall be observed:

(a) The filing o a motion to reduce appeal bond shall be entertained by the NLRC subject to the followinconditions: (1) there is meritorious ground; and (2) a bond in a reasonable amount is posted;

(b) For purposes o compliance with condition no. (2), a motion shall be accompanied by the posting o provisional cash or surety bond equivalent to ten percent (10,) of the monetary award subject o the appeaexclusive o damages and attorney's fees;



(c) Compliance with the foregoing conditions shall suffice to suspend the running o the 1 0-dareglementary period to perfect an appeal from the labor arbiter's decision to the NLRC;

(d) The NLRC retains its authority and duty to resolve the motion to reduce bond and determine the finamount o bond that shall be posted by the appellant, still in accordance with the standards o meritoriougrounds and reasonable amount; and

(e) In the event that the NLRC denies the motion to reduce bond, or requires a bond that exceeds thamount o the provisional bond, the appellant shall be given a fresh period o ten 1 0) days from notice o thNLRC order within which to perfect the appeal by posting the required appeal bond.

SO ORDERED.

BIENVENIDO L. REYES

Associate Justice

WE CONCUR:

MARIA LOURDES P. A. SERENOChief JusticeChairperson

ANTONIO T. CARPIO

Associate JusticePRESBITERO J. VELASCO, JR.

Associate Justice

TERESITA J. LEONARDO-DE CASTRO Associate Justice


DIOSDADO M. PERALTA

Associate JusticeLUCAS P. BERSAMIN

Associate Justice

(On official leave)

MARIANO C. DEL CASTILLO*

Associate Justice

(On official leave)

ROBERTO A. ABAD*

Associate Justice

MARTIN S. VILLARAMA, JR.

Associate Justice

JOSE PORTUGAL PEREZ

Associate Justice

JOSE CATRAL MENDOZA

Associate Justice

No PartESTELA M. PERLAS-BERNABE

Associate Justice

(On official leave)

MARVIC MARIO VICTOR F. LEONEN*

Associate Justice


Pursuant to Section 13 Article VIII o the Constitution, I certify that the conclusions in the above Resolution habeen reached in consultation before the case was assigned to the writer o the opinion o the Court.


Chief Justice

Footnotes



* On official leave.

1 Rollo (G.R. Nos. 186984-85), pp. 874-909; subject of the Motion for Leave to File Attached Third Motiofor Reconsideration dated March 27, 2012, id. at 867-871.

2 Penned by Associate Justice Consuelo Ynares-Santiago (retired), with Associate Justices Minita V. ChicoNazario (retired), Presbitero J. Velasco, Jr., Antonio Eduardo B. Nachura (retired) and Diosdado M. Peraltaconcurring; id. at 481-493.

3 Id. at 994-1010.

4 Id. at 979.

5 Id. at 165-169.

6 Id. at 424-435.

7 Docketed as NLRC NCR CA No. 042913-05.

8 Rollo (G.R. Nos. 178034 and 178117), pp. 65-106.

9 Rollo (G.R. Nos. 186984-85), pp. 216-226.

10 Id. at 216.

11 Id. at 267-271.

12 Id. at 269.

13 Id. at 324-326.


15 Rollo (G.R. Nos. 186984-85), pp. 328-330.

16 Id. at 347-350.

17 Id. at 88-141.


19 Id. at 263-265.

20 Id. at 28-51.

21 Id. at 297.

22 Id. at 320.

23 Id. at 322-324.

24 Id. at 350-351.

25 Id. at 240.



26 Penned by Associate Justice Arcangelita M. Romilla-Lontok (retired), with Associate Justices Mariano CDel Castillo (now a member of this Court) and Portia Aliño-Hormachuelos (retired), concurring; rollo (G.RNos. 186984-85), pp. 47-70.

27 Id. at 70.

28 Subject of CA-G.R. SP No. 90845.

29 Rollo (G.R. Nos. 186984-85), p. 67.

30 Id.

31 Subject of CA-G.R. SP No. 95916.

32 Rollo (G.R. Nos. 186984-85), p. 69.

33 Id. at 44-45.

34 Id. at 3-36.

35 Id. at 640-655.

36

Id. at 655.

37 Id. at 481-493.

38 Id. at 492.

39 Id. at 490.

40 Id. at 489.

41 Id. at 494-546.

42 Id. at 595-596.

43 Id. at 657.

44 Id. at 657-659.

45 Id. at 659. The dispositive portion of the NLRC Decision reads: WHEREFORE, the foregoing consideredcomplainant’s Motion for Reconsideration is hereby GRANTED. The Decision of the Commission, dateNovember 17, 2009, is SET ASIDE. However, let the Decision of the Commission remain on file with the casrecords. SO ORDERED.

46 Id. at 598-601

47 Id. at 602-637.

48 Id. at 732-733.

49 Id. at 853.

50 Id.



51 Id. at 914.

52 Id.

53 Id. at 874-909.

54 Id. at 876-878.

55 By a vote of 12.

56 Rollo (G.R. Nos. 186984-85), p. 979.

57 Id. at 994-1010.

58 Verginesa-Suarez v. Dilag, A.M. No. RTJ-06-2014, August 16, 2011, 655 SCRA 454, 459-460.

59 G.R. No. 169712, January 20, 2009, 576 SCRA 625.

60 Id. at 628, citing Ortigas and Company Limited Partnership v. Velasco, 324 Phil. 483, 489 (1996).

61 G.R. No. 164195, April 5, 2011, 647 SCRA 207.

62 256 Phil. 271 (1989).

63 210 Phil. 482 (1983).

64 De Guzman v. Sandiganbayan, 326 Phil. 182, 188 (1996), citing Vda. De Ronquillo, et al. v. Marasigan115 Phil. 292 (1962); Piczon v. Court of Appeals, 268 Phil. 23 (1990).

65 326 Phil. 182 (1996).

66 Id. at 190-191.

67 G.R. No. 180050, April 12, 2011, 648 SCRA 400.

68

Id. at 436.69 379 Phil. 809 (2000).

70 434 Phil. 753 (2002).

71 Id. at 762.

72 482 Phil. 903 (2004).

73 Id. at 915.

74 Rollo (G.R. Nos. 186984-85), p. 853.

75 Id.

76 G.R. No. 176951, February 15, 2011, 643 SCRA 149.

77 Rollo (G.R. Nos. 186984-85), pp. 487-489.




79 Id. at 409.

80 Id. at 409-411.

81 Rollo (G.R. Nos. 186984-85), p. 244.

82 Id. at 325.

83 See Nicol v. Footjoy Industrial Corp., 555 Phil. 275, 287 (2007).

84 Cosico, Jr. v. NLRC, 338 Phil. 1080 (1997), citing Star Angel Handicraft v. National Labor RelationCommission, G.R. No. 108914, September 20, 1994, 236 SCRA 580; Dr. Postigo v. Phil. Tuberculos

Society, Inc., 515 Phil. 601 (2006); Rada v. NLRC, G.R. No. 96078, January 9, 1992, 205 SCRA 69, anYBL (Your Bus Line) v. National Labor Relations Commission, 268 Phil. 169 (1990).

85 Bolos v. Bolos, G.R. No. 186400, October 20, 2010, 634 SCRA 429, 439.

86 Aujero v. Philippine Communications Satellite Corporation, G.R. No. 193484, January 18, 2012, 66SCRA 467, 481-482, citing Heirs of the Deceased Spouses Arcilla v. Teodoro, G.R. No. 162886, August 112008, 561 SCRA 545, 557.

87 Garcia v. KJ Commercial, supra note 78, at 410.

88 Intertranz Container Lines, Inc. v. Bautista, G.R. No. 187693, July 13, 2010, 625 SCRA 75, 84, citinRosewood Processing, Inc. v. NLRC, 352 Phil. 1013 (1998).

89 555 Phil. 275 (2007).

90 Id. at 292.


92 Art. 223. Appeal – Decisions, awards, or orders of the Labor Arbiter are final and executory unlesappealed to the Commission by any or both parties within ten (10) calendar days from receipt of suc

decisions, awards, or orders. x x x In case of a judgment involving a monetary award, an appeal by themployer may be perfected only upon the posting of a cash or surety bond issued by a reputable bondincompany duly accredited by the Commission in the amount equivalent to the monetary award in th judgment appealed from. x x x x

93 See Mindanao Times Corporation v. Confesor, G.R. No. 183417, February 5, 2010, 611 SCRA 748Computer Innovations Center v. NLRC, 500 Phil. 573 (2005); St. Gothard Disco Pub & Restaurant v. NLRCG.R. No. 102570, February 1, 1993, 218 SCRA 327.

94 2011 NLRC Rules of Procedure, Rule VI, Section 6 reads:

SEC. 6. BOND. ― In case the decision of the Labor Arbiter or the Regional Director involves a monetaraward, an appeal by the employer may be perfected only upon the posting of a bond, which shall either bin the form of cash deposit or surety bond equivalent in amount to the monetary award, exclusive odamages and attorney’s fees.

95 G.R. No. 170416, June 22, 2011, 652 SCRA 492.

96 Id. at 503-504, citing Ramirez v. CA, G.R. No. 182626, December 4, 2004, 607 SCRA 752, 765.

97 See Nicol v. Footjoy Industrial Corp., supra note 89.



98 See Semblante v. Court of Appeals, G.R. No. 196426, August 15, 2011, 655 SCRA 444.

99 Id.

100 See Star Angel Handicraft v. National Labor Relations Commission, supra note 84.

101 See YBL (Your Bus Line) v. NLRC, supra note 84.

102 See University Plans Incorporated v. Solano, supra note 95; Nicol v. Footjoy Industrial Corp., supra not89.

103 Rollo (G.R. Nos. 186984-85), p. 649.

104 Id. at 650.

105 Id. at 650-651.

106 Id. at 654.

107 Id. at 640-655.

108 Id. at 64-65.

109 352 Phil. 1013 (1998).

110 Id. at 1031.

111 City of Dumaguete v. Philippine Ports Authority, G.R. No. 168973, August 24, 2011, 656 SCRA 102117, citing Basco v. CA, 392 Phil. 251, 266 (2000).

112 Supra note 95.

113 Supra note 98.

114

Supra note 109, at 1031.

115 Rollo (G.R. Nos. 186984-85), pp. 67, 69.

116 Nicol v. Footjoy Industrial Corp., supra note 89, at 290, citing Rosewood Processing, Inc. v. NLRC, suprnote 109.

117 G.R. No. 169207, March 25, 2010, 616 SCRA 422.

118 Id. at 442-443.

119 Id.

120 Rollo (G.R. Nos. 186984-85), p. 652.

121 Id. at 652-653.

122 Lopez v. Bodega City (Video-Disco Kitchen of the Phils.) and/or Torres-Yap, 558 Phil. 666, 674 (2007)

123 Rollo (G.R. Nos. 186984-85), p. 169.



124 Supra note 103.

125 Javier v. Fly Ace Corporation, G.R. No. 192558, February 15, 2012, 666 SCRA 382.

126 Id. at 397-398.

127 G.R. No. 168715, September 15, 2010, 630 SCRA 471.

128 Id. at 486.


130 Id. at 89-90.




31.\epublic

of

tbe

~ i l i p p i n e s

~ u p r m

Q ourt

:.manila

THIRD DIVISION

WATERFRONT CEBU CITY

CASINO

HOTEL

INC.

and

MARCO

PROTACIO

Petitioners,

- versus -

G.R. No. 197556

Present:

VELASCO, JR. J. Chairperson

PERALTA,

VILLARAMA, JR.,

REYES, and

JARDELEZA,

JJ.

ILDEBRANDO LEDESMA, Promulgated:

Respondent.

March 25, 2015 .

x _ S J ? ; ; ~ ~

x

·DECISION

VILLARAMA, JR. J :

This is a petition for review on certiorari under Rule

45

of the 1997

Rules

of

Civil Procedure, as amended, seeking to set aside the Decision

1

dated

March 17, 2011 and Resolution

2

dated June 21, 2011 of the Court ofAppeals

CA) in CA-G.R. CEB SP No. 05071. The CA reversed the Decision

3

dated

November 27, 2009 and Resolution

4

dated February 22, 2010

ofthe

National

Labor Relations Commission NLRC) and reinstated the Decision

5

dated April

29, 2009

of

the Labor Arbiter LA). The LA declared that respondent

Ildebrando Ledesma was illegally dismissed from his employment by petitioner

Waterfront Cebu City Casino Hotel, Inc. Waterfront).

The factual antecedents follow:

Respondent was employed as a House Detective at Waterfront located

at Salinas Drive, Cebu City.



Decision 2 G.R. No. 197556

On the basis of the complaints filed before Waterfront by Christe6

Mandal, a supplier of a concessionaire of Waterfront, and Rosanna Lofranco,

who was seeking a job at the same hotel, Ledesma was dismissed from

employment.7 From the affidavits8 and testimonies9 of Christe Mandal and

Rosanna Lofranco during the administrative hearings conducted by Waterfront,

the latter found, among others, that Ledesma kissed and mashed the breasts of

Christe Mandal inside the hotel’s elevator, and exhibited his penis and asked

Rosanna Lofranco to masturbate him at the conference room of the hotel.

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

which was docketed as NLRC RAB-VII Case No. 08-1887-08. The LA

found that the allegations leveled against Ledesma are mere concoctions,

and concluded that Ledesma was illegally dismissed. The dispositive

portion of the April 29, 2009 Decision of the LA, reads:

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

rendered declaring the suspension as well as the dismissal of herein

complainant illegal. Consequently, respondent Waterfront Cebu CityHotel is ordered to reinstate complainant Ildebrando Ledesma to his

former position without loss of seniority right and with full backwages

reckoned from the date of the suspension up to actual reinstatement.

Herein respondent is likewise ordered to pay complainant Ledesma

service incentive leave pay in the amount of THREE THOUSAND NINE

HUNDRED TEN PESOS AND FIFTY CENTAVOS (P3,910.50) plus ten

percent (10%) of the total monetary award as attorney’s fees.

All other claims are DISMISSED for lack of merit.

SO ORDERED.11

On appeal to the NLRC, the latter reversed the ruling of the LA and

held that Ledesma’s acts of sexual overtures to Christe Mandal and Rosanna

Lofranco constituted grave misconduct justifying his dismissal from

employment. The fallo of the November 27, 2009 Decision of the NLRC

reads:

WHEREFORE, premises considered, the appealed Decision is

hereby REVERSED and SET ASIDE. Another one is entered declaringthe dismissal of complainant as valid.

SO ORDERED.12

The NLRC denied Ledesma’s motion for reconsideration in a

Resolution dated February 22, 2010. A copy of the said Resolution was

6 Also spelled as Christie or Christy.




received by Atty. Gines Abellana (Atty. Abellana), Ledesma’s counsel of

record, on March 15, 2010.13

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

received a copy of the NLRC’s Resolution denying the motion forreconsideration, said counsel filed before the CA a petition for certiorari

under Rule 65 of the Rules of Court.

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

petition on the ground that it was belatedly filed.

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

motion for leave to file amended petition,16 and sought the admission of his

Amended Petition for Certiorari.17 In the amended petition, Ledesma

contended that his receipt on March 24, 2010 (and not the receipt on March

15, 2010 by Atty. Abellana), is the reckoning date of the 60-day

reglementary period within which to file the petition. Hence, Ledesma

claims that the petition was timely filed on May 17, 2010.18

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

court to Ledesma and admitted his amended petition for certiorari. The CA,

thereafter, rendered a Decision dated March 17, 2011, reversing the Decision

of the NLRC and reinstating the ruling of the LA. The fallo of the assailed

CA Decision reads:

IN LIGHT OF ALL THE FOREGOING , this petition is

GRANTED. The 27 November 2009 NLRC Decision and 22 February

2010 Resolution in NLRC Case No. VAC-09-000912-2009 is

REVERSED and SET ASIDE and the 29 April 2009 Decision of theLabor Arbiter is hereby REINSTATED.

No pronouncement as to costs.

SO ORDERED.20

The CA denied the motion for reconsideration filed by Waterfront in a

Resolution dated June 21, 2011. Thus, the present petition for review on

certiorari where Waterfront raised the main issue of whether the petition for

certiorari was timely filed with the CA.21

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

petition of Waterfront on the basis of the following formal infirmities: (1)

13 Id. at 5. Paragraph 14 of the Petition for Certiorari.14 Id. at 3. See the date of receipt by the CA stamped at the upper right portion.15 Id. at 103-110.16 Id. at 112-114.




the presentation of Gaye Maureen Cenabre, the representative of Waterfront,

of a Community Tax Certificate before the Notary Public to prove her

identity, violated A.M. No. 02-8-13-SC, and rendered the jurat in the

verification and certification on non-forum shopping of the petition as

defective; and (2) no certified true copy of the August 10, 2011 Board

Resolution quoted in the Secretary’s Certificate was attached to the petition.

The Court finds Waterfront’s petition to be meritorious.

The procedural infirmities23 pointed out by Ledesma are not adequate to

cause the dismissal of the present petition. Gaye Maureen Cenabre presented to

the Notary Public a Community Tax Certificate numbered 27401128 to prove

her identity instead of a current identification document issued by an official

agency bearing her photograph and signature as required by A.M. No. 02-8-13-

SC. This rendered the jurat in the verification/certification of non-forumshopping of Waterfront as defective. Nonetheless, any flaw in the verification,

being only a formal, not a jurisdictional requirement, is not a fatal defect.24 In

like manner, there is no need to attach the certified true copy of the Board

Resolution quoted in the Secretary’s Certificate attached to the petition. Only

the judgment, order or resolution assailed in the petition are the attachments

required under Section 4,25 Rule 45 of the Rules of Court to be duplicate

originals or certified true copies.

On the main issue, the unjustified failure of Ledesma to file his petition for certiorari before the CA within the 60-day period is a ground for

the outright dismissal of said petition.

Section 4, Rule 65 of the Rules of Court, as amended by A.M. No. 07-

7-12-SC, reads:

SEC. 4. When and where to file the petition. – The petition shall be

filed not later than sixty (60) days from notice of the judgment, order orresolution. In case a motion for reconsideration or new trial is timely

filed, whether such motion is required or not, the petition shall be filed notlater than sixty (60) days counted from the notice of the denial of themotion.

If the petition relates to an act or an omission of a municipal trialcourt or of a corporation, a board, an officer or a person, it shall be filed

with the Regional Trial Court exercising jurisdiction over the territorial

area as defined by the Supreme Court. It may also be filed with the Courtof Appeals or with the Sandiganbayan, whether or not the same is in aid of

the court’s appellate jurisdiction. If the petition involves an act or an

omission of a quasi-judicial agency, unless otherwise provided by law or

23 Id. at 103-104.




these rules, the petition shall be filed with and be cognizable only by the

Court of Appeals.

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

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

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

ruled that the present rule now mandatorily requires compliance with the

reglementary period. The period can no longer be extended as previously

allowed before the amendment, thus:

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

phrases indicates an intention to change its meaning. It is presumed that

the deletion would not have been made if there had been no intention to

effect a change in the meaning of the law or rule. The amended law or rule

should accordingly be given a construction different from that previous toits amendment.

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

grant extensions under Section 4 of Rule 65, the paragraph providing forsuch authority would have been preserved. The removal of the said

paragraph under the amendment by A.M. No. 07-7-12-SC of Section 4,

Rule 65 simply meant that there can no longer be any extension of the 60-

day period within which to file a petition for certiorari.

The rationale for the amendments under A.M. No. 07-7-12-SC is

essentially to prevent the use (or abuse) of the petition for certiorari underRule 65 to delay a case or even defeat the ends of justice. Deleting the

paragraph allowing extensions to file petition on compelling grounds didaway with the filing of such motions. As the Rule now stands, petitions

for certiorari must be filed strictly within 60 days from notice of

judgment or from the order denying a motion for reconsideration.27

(Additional emphasis and underscoring supplied)

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

Sandiganbayan,28 the absence of a specific prohibition in Section 4 of Rule

65, as amended, for the extension of the 60-day period to file a petition forcertiorari was construed as a discretionary authority of the courts to grant an

extension.

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

between the rulings in Laguna Metts Corporation30 and Domdom,31 in that

the former is the general rule while the latter is the exception, thus:

What seems to be a “conflict” is actually more apparent than real.A reading of the foregoing rulings leads to the simple conclusion that

Laguna Metts Corporation involves a strict application of the general rulethat petitions for certiorari must be filed strictly within sixty (60) days




from notice of judgment or from the order denying a motion for

reconsideration. Domdom, on the other hand, relaxed the rule and

allowed an extension of the sixty (60)-day period subject to the

Court’s sound discretion.32 (Emphasis in the original)

In relaxing the rules and allowing an extension, Thenamaris Philippines, Inc. v. Court of Appeals33 reiterated the necessity for the party

invoking liberality to advance a reasonable or meritorious explanation34 for

the failure to file the petition for certiorari within the 60-day period.

The petition for certiorari was filed

with the CA beyond the 60-day

period

Atty. Abellana, Ledesma’s counsel, admittedly received a copy of the NLRC Resolution denying the Motion for Reconsideration on March 15,

2010 while Ledesma received his copy on March 24, 2010.

Ledesma erroneously asserted in his petition for certiorari filed before

the CA, that the 60th day is May 15, 2010, counted from March 15, 2010.35 In

computing a period, the first day shall be excluded, and the last included;36

hence, the last day to file his petition for certiorari is on May 14, 2010, a

Friday. Ledesma therefore belatedly filed his petition on May 17, 2010.

Realizing his procedural faux pas, Ledesma filed an amended petition

where he contended that he timely filed his petition for certiorari on May 17,

2010 counted from his receipt of the NLRC Resolution denying his motion

32 Republic v. St. Vincent De Paul Colleges, Inc., supra note 29, at 747.33 G.R. No. 191215, February 3, 2014, 715 SCRA 153, 166, citing Labao v. Flores, G.R. No. 187984,

November 15, 2010, 634 SCRA 723, 732.34 Among the “recognized exceptions” are: (1) most persuasive and weighty reasons; (2) to relieve a

litigant from an injustice not commensurate with his failure to comply with the prescribed procedure;

(3) good faith of the defaulting party by immediately paying within a reasonable time from the time ofthe default; (4) the existence of special or compelling circumstances; (5) the merits of the case; (6) a

cause not entirely attributable to the fault or negligence of the party favored by the suspension of the

rules; (7) a lack of any showing that the review sought is merely frivolous and dilatory; (8) the other

party will not be unjustly prejudiced thereby; (9) fraud, accident, mistake or excusable negligence

without appellant’s fault; (10) peculiar legal and equitable circumstances attendant to each case; (11) inthe name of substantial justice and fair play; (12) importance of the issues involved; and (13) exercise

of sound discretion by the judge guided by all the attendant circumstances. Thenamaris Philippines,

Inc. v. Court of Appeals, id.35 Paragraph 14 of the Petition provides:

14. That the said resolution denying the motion for reconsideration was served upon

the petitioner on March 15, 2010 and the sixty (60) day period allowed by Rule 65 falls on

May 15, 2010 which is a Saturday so that the next business day is still within the period to file

the x x x petition; (CA rollo, p. 5.)36 Article 13 of the Civil Code reads:

ART. 13. When the law speaks of years, months, days or nights, it shall be




for reconsideration on March 24, 2010.37 This stance is bereft of any legal

basis. When a party to a suit appears by counsel, service of every judgment

and all orders of the court must be sent to the counsel. This is so because

notice to counsel is an effective notice to the client, while notice to the client

and not his counsel is not notice in law.38 Receipt of notice by the counsel

of record is the reckoning point of the reglementary period.39

The negligence of Atty. Abellana in the computation of the 60-day

period, and reckoning such period from the party’s receipt of the assailed

NLRC resolution were similar arguments rejected in Labao v. Flores.40 In

the Labao case,41 the respondents maintained that they should not suffer the

negligence of their counsel in the late filing of their petition for certiorari,

and the 60-day period be reckoned from their own notice of the NLRC’s

denial of their motion for reconsideration. In rejecting said arguments we

ruled as follows:

The general rule is that a client is bound by the acts, even mistakes, of

his counsel in the realm of procedural technique. The exception to this rule iswhen the negligence of counsel is so gross, reckless and inexcusable that the

client is deprived of his day in court. The failure of a party’s counsel to notify

him on time of the adverse judgment, to enable him to appeal therefrom, isnegligence that is not excusable. We have repeatedly held that notice sent to

counsel of record is binding upon the client, and the neglect or failure of

counsel to inform him of an adverse judgment resulting in the loss of his rightto appeal is not a ground for setting aside a judgment valid and regular on its

face.42 (Emphasis omitted)

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

certiorari, a review of the Resolution of the NLRC will be beyond the

jurisdiction of any court.43 No longer assailable, the NLRC Resolution

could not be altered or modified, as previously held in Labao v. Flores:44

The NLRC’s resolution became final ten (10) days after counsel’s

receipt, and the respondents’ failure to file the petition within the required

(60)-day period rendered it impervious to any attack through a Rule 65

petition for certiorari. Thus, no court can exercise jurisdiction to reviewthe resolution.

Needless to stress, a decision that has acquired finality becomes

immutable and unalterable and may no longer be modified in any respect,

even if the modification is meant to correct erroneous conclusions of factor law and whether it will be made by the court that rendered it or by the

highest court of the land. All the issues between the parties are deemed

resolved and laid to rest once a judgment becomes final and executory;

37 CA rollo, pp. 118-119.38 Ramos v. Sps. Lim, 497 Phil. 560, 564-565 (2005).39 See Manaya v. Alabang Country Club, Inc., 552 Phil. 226, 233 (2007), citing Ram’s Studio and

Photographic Equipment, Inc. v. Court of Appeals, 400 Phil. 542, 549 (2000).




execution of the decision proceeds as a matter of right as vested rights are

acquired by the winning party. Just as a losing party has the right to appealwithin the prescribed period, the winning party has the correlative right to

enjoy the finality of the decision on the case. After all, a denial of a

petition for being time-barred is tantamount to a decision on the merits.

Otherwise, there will be no end to litigation, and this will set to naught themain role of courts of justice to assist in the enforcement of the rule of law

and the maintenance of peace and order by settling justiciable

controversies with finality.

Ledesma did not attempt to justify

the belated filing of his petition for

certiorari

The relaxation of procedural rules may be allowed only when there

are exceptional circumstances to justify the same.45 There should be aneffort on the part of the party invoking liberality to advance a reasonable or

meritorious explanation for his/her failure to comply with the rules.46

Moreover, those who seek exemption from the application of a procedural

rule have the burden of proving the existence of exceptionally meritorious

reason warranting such departure.47 In Philippine National Bank v.

Commissioner of Internal Revenue,48 we said:

It is an accepted tenet that rules of procedure must be faithfullyfollowed except only when, for persuasive and weighting reasons, they

may be relaxed to relieve a litigant of an injustice commensurate with hisfailure to comply with the prescribed procedure. Concomitant to a

liberal interpretation of the rules of procedure, however, should be an

effort on the part of the party invoking liberality to adequately

explain his failure to abide by the rules. (Emphasis supplied)

Both in his petition and amended petition, Ledesma never invoked the

liberality of the CA nor endeavored to justify the belated filing of his petition.

On the contrary, Ledesma remained firm that his petition was filed with the CA

within the reglementary period.49 Absent valid and compelling reasons for the

procedural lapse, the desired leniency cannot be accorded to Ledesma.50

In sum, the late filing by Ledesma of his petition for certiorari, and his

failure to justify his procedural lapse to merit a lenient application of the

rules divested the CA of jurisdiction to entertain the petition.51

Assuming for a moment that the petition for certiorari was timely filed

with the CA, said recourse should suffer the same fate of dismissal for lack

45 Tagle v. Equitable PCI Bank , 575 Phil. 384, 405 (2008).46 People v. Castañeda, Jr., G.R. No. 208290, December 11, 2013, 712 SCRA 800, 807, citing Republic v. St.

Vincent de Paul Colleges, Inc., supra note 29, at 748, further citing Labao v. Flores, supra note 33, at 732.



Decision

9

G.R. No. 197556

ofmerit. Otherwise stated, there is no substantial justice that may be served

here in disregarding the procedural flaw committed by Ledesma because the

NLRC correctly found him guilty

of

misconduct or improper behavior in

committing lascivious conduct and demanding sexual favors from Christe

Mandal and Rosanna Lofranco.

The CA ruled in favor

of

Ledesma since it believed his version that the

complainants merely invented the accusations against him because Waterfront

failed to present

as

evidence the CCTV footages

of

the alleged lascivious

conduct

of

Ledesma inside the elevator and the conference room. But this

argument was not even raised by Ledesma himself and it was only the CA

which utilized this

as

a justification to bolster its findings that Ledesma did not

commit any infraction. This being a labor case, the evidence required

is

only

substantial evidence which was adequately established here by the positive and

credible testimonies

of

the complainants.

Notably, Ledesma never refuted, at the administrative investigation

level at Waterfront, and even at the proceedings before the LA, NLRC, and

the CA, the allegations leveled against him by Rosanna Lofranco that, after

deluding her to perform a massage on him, Ledesma exhibited to her his

penis and requested that he be masturbated while inside the conference room

of the hotel.

f

not for the position ofLedesma as a House Detective, he will

not have access to the conference room nor will he know that the premises

is

not monitored through a closed-circuit television,

52

thus giving him the

untrammeled opportunity to accomplish his lewd design on the unsuspecting

victim. Such acts

of

Ledesma constituted misconduct or improper

behavior

53

which is a just cause for his dismissal.

WHEREFORE, the petition for review on certiorari is GRANTED.

The March 17 2011 Decision and June 21, 2011 Resolution of the Court

of

Appeals in CA-G.R. CEB SP No. 05071 are REVERSED and SET ASIDE.

The November 27, 2009 Decision and February 22, 2010 Resolution

of

the

National Labor Relations Commission which found as valid the dismissal

from employment oflldebrando Ledesma are REINSTATED.

No pronouncement as to costs.

SO

ORDERED.

JR.

Associate

~



Decision

W CONCUR:

1

P R E S I T E R ~ J. VELASCO,

JR.

Ast,>ciate Justice

Chairperson

G.R. No. 197556

~

//

~

BIENVENIDO L. REYES

, Associate Justice

A

Associate Justice

T T E S T T IO N

I attest that the conclusions in the above Decision had been reached in

consultation before the case was assigned to the writer

of

the opinion

of

the

Court s Division.

PRESBITE;t J.

VELASCO,

JR.

As ciate Justice

Chairp son, Third Division



l\epublic of tbe ~ i l i p p i n e ~

>upreme < Court

lJjaguio

< Citp

SECOND DIVISION

SMART COMMUNICATIONS, INC., G.R. No. 204646

NAPOLEON L. NAZARENO, and

RICARDO

P.

ISLA,

Petitioners,

- versus -

JOSE LENI Z. SOLIDUM,

Respondent.

Present:

CARPIO, J. Chairperson,

DEL CASTILLO,

PEREZ

MENDOZA, and

LEONEN JJ.

Promul_s;ated:

-, PR 2

x

DECISION

CARPIO,

J :

The Case

This is a petition

1

for review on certiorari under Rule

45

of the Rules

of Court. Petitioners Smart Communications, Inc. (Smart), Napoleon L.

Nazareno and Ricardo P. Isla (Isla) challenge the Coµrt

of

Appeals 3 July

2012 Amended Decision

2

and 23 November 2012 Resolution

3

in CA-G.R.

SP No. 115794, affirming the National Labor Relations Commission s

(NLRC) 30 July 2010 Resolution.

4




The Facts

On 26 April 2004, Smart hired respondent Jose Leni Z. Solidum

(Solidum) as Department Head for Smart Buddy Activation. Smart Buddy

Activation is under the Product Marketing Group which is headed by Isla.

On 21 September 2005, Isla gave Solidum a memorandum5 informing him

of alleged acts of dishonesty, directing him to explain why his employment

should not be terminated, and placing him under preventive suspension

without pay for 30 days. On 28 September 2005, Solidum submitted his

written explanation6 in response to the 21 September 2005 notice.

On 22 October 2005, Isla gave Solidum a memorandum7 dated 21October 2005 informing him of a modified set of alleged acts of dishonesty,

directing him to explain why his employment should not be terminated,

extending his preventive suspension by 10 days, and inviting him to the

administrative investigation scheduled on 26 October 2005.

On 11 November 2005, Isla gave Solidum a memorandum8 dated 9

November 2005 terminating his employment “for fraud or willful breach of

trust, falsification, misrepresentation, conflict of interest, serious misconduct

and dishonesty-related offenses.”9

Solidum filed against Smart a complaint10 for illegal dismissal, illegal

suspension, non-payment of salaries, actual, moral and exemplary damages,

and attorney’s fees.

In his 3 July 2006 Decision,11 the Labor Arbiter found that Solidum’s

preventive suspension and dismissal were illegal and that he was entitled to

full back wages, moral and exemplary damages, and attorney’s fees. The

dispositive portion of the Decision stated:

WHEREFORE, premises all considered, judgment is herebyrendered in favor of complainant and against respondents, as follows:

1. Declaring the 20-day extended preventive suspension of

complainant from October 22, 2005 to November 10, 2005 illegal andtantamount to constructive dismissal, and ordering respondents to jointly

and severally pay complainant his corresponding salaries, benefits,

privileges, allowances and other incentives/bonuses during the periodfrom October 22 to November 10, 2005, in the amount of P236,061.94;

5 Id. at 64-66.




2. Ordering respondents to jointly and severally pay thecomplainant’s unpaid salaries, benefits, privileges, allowances, and other

benefits/bonuses during the 30-day preventive suspension, in the amountof P365,896.00;

3. Declaring the dismissal of complainant effective November 11,

2005 as illegal, and ordering respondents to reinstate the complainant to

his former position, immediately upon receipt of this decision, either physically or in the payroll, at the option of the former, and failure to

exercise their option within ten (10) days hereof, shall place the

complainant on payroll reinstatement, with payment of accrued salaries,allowances, benefits/incentives and bonuses;

4. Ordering respondents to jointly and severally pay complainant hisfull backwages, inclusive of all benefits bonuses, privileges, incentives,

allowances or their money equivalents, from date of dismissal on

November 11, 2005 until actual reinstatement, partially computed as

follows:

a. Backwages and benefits - P2,903,561.79

b. Quarterly performance bonus - P935,640.00

c. Monthly Gas allowance - P90,693.00

d. Monthly Rice allowance - P9,000.00

e. Monthly driver’s allowance - P68,175.00

f. 13th month pay (pro-rata) - P265,569.68

g. Unpaid accumulated leaves

2004 & 2005 - P472,123.87

h. Smart incentive entitlement - P7,370,250.00[;]

5. Ordering respondents to jointly and severally pay complainant for the foregone opportunity of pursuing studies in the United Kingdom under

the British Chevening Scholarship Award, in the sum of 20,189.00 British

pounds or Peso 1,982,727.37[; and]

6. Ordering respondents to jointly and severally pay complainant

moral damages in the amount of P2 million, exemplary damages in the

amount of P2 million, and attorney’s fees equivalent to 10% of the judgment award.

SO ORDERED.12

O 25 J l 2006 S l d h NLRC O 13 N b




salaries, allowances, benefits, incentives and bonuses from 21 July to 20

October 2006. On 15 August and 25 October 2007, 11 February, 28 April,

23 July and 11 November 2008, and 22 January 2009, the Labor Arbiter

issued seven other alias writs of execution ordering the sheriff to collect

from petitioners Solidum’s accrued salaries, allowances, benefits, incentives

and bonuses.

In its 26 January 2009 Resolution,13 the NLRC reversed the Labor

Arbiter’s 3 July 2006 Decision and dismissed for lack of merit Solidum’s

complaint. Solidum filed a motion14 for reconsideration dated 9 February

2009.

On 4 May 2009, Solidum filed with the Labor Arbiter an ex-parte

motion15 praying that an alias writ of execution be issued directing the

sheriff to collect from petitioners P1,440,667.93, representing Solidum’s

accrued salaries, allowances, benefits, incentives and bonuses from 21

January to 20 April 2009.

In its 29 May 2009 Decision,16 the NLRC denied for lack of merit

Solidum’s 9 February 2009 motion for reconsideration.

The Labor Arbiter’s Ruling

In his 29 July 2009 Order,17 the Labor Arbiter denied for lack of merit

Solidum’s ex-parte motion praying that an alias writ of execution be issued

directing the sheriff to collect from petitioners P1,440,667.93, representing

Solidum’s accrued salaries, allowances, benefits, incentives and bonuses

from 21 January to 20 April 2009. The Labor Arbiter held that:

In the instant case, the NLRC promulgated its Decision dated

January 26, 2009 reversing this Office’s Decision dated July 03, 2006.

Also, the NLRC in its Decision dated May 29, 2009 denied thecomplainant’s motion for reconsideration of its Decision dated January 26,

2009. This Office is mindful of the fact that the NLRC is tasked with the

review of decisions promulgated by this Office, as such, it is a higher tribunal as contemplated by law.

Verily, the recent decision of the NLRC reversing the Decision of this Office prevents any future issuance of any writ of execution on the

reinstatement aspect in line with Gracia, et al. vs. Philippine Airlines, Inc.

and International Container Terminal Services vs. NLRC.18

13 Id. at 244-265. Penned by Commissioner Romeo L. Go, with Presiding Commissioner Gerardo C.




Solidum appealed to the NLRC.

The NLRC’s Ruling

In its 31 May 2010 Decision,19 the NLRC reversed the Labor Arbiter’s

29 July 2009 Order. The NLRC held that:

In the case at bar, records show that respondents appealed from theLabor Arbiter’s Decision to the Commission on July 25, 2006. The

Commission resolved respondents’ appeal on January 26, 2009, reversing

the Decision of the Labor Arbiter dated July 3, 2006. Notably, there is no

showing in the records that respondents reinstated complainant to hisformer position. Hence, pursuant to Article 223 of the Labor Code, as

amended, relative to the reinstatement aspect of the Labor Arbiter’s

Decision, respondents are obligated to pay complainant’s salaries and benefits, computed from July 13, 2006, when respondents received a copy

of the Labor Arbiter’s Decision which, among others, ordered the

reinstatement of complainant, up to the date of finality of theCommission’s resolution reversing the Labor Arbiter’s Decision, which,

for this purpose, is reckoned on May 29, 2009, when the Commission

denied complainant’s Motion for Reconsideration.

Indeed, common sense dictates that complainant’s entitlement toreinstatement salaries/wages and benefits, emanating from the Labor

Arbiter’s order of reinstatement, presupposes that said order of reinstatement is still enforceable. Here, the Labor Arbiter’s order of

reinstatement dated July 3, 2006 was no longer enforceable as of May 29,

2009 when the Commission’s resolution reversing the Labor Arbiter’sorder of reinstatement is deemed to have become final as hereinabove

discussed. Patently then, complainant is no longer entitled to

reinstatement salaries/wages and benefits after May 29, 2009.

Significantly, the Order of the Labor Arbiter being appealed from

by complainant, denied the latter’s motion for issuance of alias writ of execution for the collection of his reinstatement salaries and benefits for the period covering January 21, 2009 to April 20, 2009. The Labor Arbiter

thus committed serious error in denying complainant’s motion with

respect to his reinstatement salaries and benefits as he is entitled to thesame for the period starting July 13, 2006 to May 29, 2009.20

Solidum filed a motion21 for partial reconsideration. Petitioners filed a

motion22 for reconsideration. In its 30 July 2010 Resolution, the NLRC

granted Solidum’s motion for partial reconsideration and denied for lack of

merit petitioners’ motion for reconsideration. The NLRC held that:




Our Entry of Judgment dated June 01, 2010 clearly states that the

Decision promulgated by this Commission on May 29, 2009 had become

final and executory on August 10, 2009. Thus, We so hold that the date of

finality of Our Decision reversing the Labor Arbiter’s Decision dated July3, 2006 is August 10, 2009, and the computation of complainant’s

reinstatement or accrued salaries/wages and other benefits should be up to

August 10, 2009.

Anent respondents’ Motion for Reconsideration, We find the same

unmeritorious.23

Petitoners appealed to the Court of Appeals.

In his alias writ24 of execution dated 22 October 2010, the Labor

Arbiter ordered the sheriff to collect from petitioners P1,440,667.93,

representing Solidum’s accrued salaries, allowances, benefits, incentives and

bonuses from 21 January to 20 April 2009.

The Court of Appeals’ Ruling

In its 25 January 2011 Decision,25 the Court of Appeals granted

petitioners’ petition for certiorari, prohibition and mandamus with prayer for the issuance of a writ of preliminary injunction and/or temporary restraining

order and set aside the NLRC’s 31 May 2010 Decision and 30 July 2010

Resolution. The Court of Appeals held that:

The order of the Labor Arbiter denying Private Respondent’s ex- parte motion for issuance of Alias Writ of Execution is not a final order as

there was something else to be done, namely, the resolution of his

Complaint for Illegal Dismissal against Petitioners on the merits. Thesubject Order of the Labor Arbiter did not put an end to the issues of

illegal suspension and illegal dismissal, and, thus, partakes the nature of an

interlocutory order. It is jurisprudential that an interlocutory order is notappealable until after the rendition of the judgment on the merits for acontrary rule would delay the administration of justice and unduly burden

the courts. Being interlocutory in nature, the subject Order could not have

been validly appealed.

Moreover, as correctly argued by the Petitioners, an appeal from an

interlocutory order is a prohibited pleading under Section 4 of the 2005Revised Rules of Procedure of the NLRC. Consequently, the Labor

Arbiter’s order being interlocutory and unappealable, Public Respondent

NLRC has no jurisdiction to rule on the appeal except to dismiss the same.

The assailed Decision and the Resolution, rendered in excess of the PublicRespondent NLRC’s jurisdiction, are therefore null.




Besides and more importantly, records show that the Decision,dated May 29, 2009, of the NLRC in the Illegal Dismissal Case which

effectively denied Private Respondent’s Complaint for Illegal Dismissalagainst Petitioners already attained finality on June 1, 2010. Indeed, anEntry of Judgment was accordingly made. Clearly, Private Respondent

can neither pray nor cause this Court to grant his Ex-parte Motion for

Issuance of Writ of Execution to reinstate him since his dismissal by

Petitioners was finally ruled to be legal; hence, the denial of his complaintfor lack of merit. Ruling on Private Respondent’s Ex-parte motion shall

also have an effect of reviewing a final judgment which the law and the

court abhor. It bears to stress that when a final judgment becomesexecutory, it thereby becomes immutable and unalterable.26

Solidum filed a motion27 for reconsideration.

In his alias writ28 of execution dated 18 May 2011, the Labor Arbiter

ordered the sheriff to collect from petitioners P1,440,667.93, representing

Solidum’s accrued salaries, allowances, benefits, incentives and bonuses

from 21 April to 20 July 2009. Petitioners filed with the Court of Appeals a

motion29 to order Solidum to return P2,881,335.86, representing the total

amount under the 22 October 2010 and 18 May 2011 alias writs of

execution.

In its 3 July 2012 Amended Decision, the Court of Appeals partly

granted Solidum’s motion for reconsideration and denied petitioners’ motion

to order the return of P2,881,335.86. The Court of Appeals held that:

[T]here was a wrong appreciation of fact relative to the date of finality of

judgment. The true date when the May 29, 2009 NLRC decision became

final and executory was on August 10, 2009 and not on June 1, 2010.

(Rollo, page 1895) Conformably with the foregoing, the involved portionof our ruling which is the subject of the discussion at hand is hereby

modified by changing the stated date therein from June 1, 2010 to August

10, 2009.

x x x x

On the last issue for consideration — refund of monetary award,

We find necessary to quote the following pronouncement of the High

Court:

x x x x

The Court reaffirms the prevailing principle that

even if the order of reinstatement of the Labor Arbiter isreversed on appeal, it is obligatory on the part of the

l t i t t d th f th di i d




employee during the period of appeal until reversal by thehigher court. (Juanito A. Garcia vs. Philippine Airlines,

Inc., G.R. No. 164856, January 20, 2009)

In view thereof, no refund will thus be permitted by this Court.30

Petitioners filed a motion31 for partial reconsideration with motion to

order the return of P2,881,335.86. In its 23 November 2012 Resolution, the

Court of Appeals held that:

The move to reconsider the January 26, 2009 decision of the NLRC wasdenied on May 29, 2009. Thereafter, an Entry of Judgment was issued

which provides in particular the following: “this is to certify that on May29, 2009, a DECISION was rendered x x x and that the same has, pursuantto Rules of the Commission, became [sic] final and executory on Aug. 10,

2009”. (Rollo, p. 1895) It appears therefore that the situation

contemplated in the last paragraph of the Section 14 had been the casehere. In view of this, We find no cogent reason to reverse our earlier

ruling that August 10, 2009 is the true date of finality of subject decision.

x x x x

In the light, however, of our earlier discussion on the true date of

finality of judgment, we cannot order the return of the amounts released by way of the 8th and 9th Alias Writ of Execution. The wages,

allowances, incentives/benefits and bonuses received through the said

writs covered the period from January 21, 2009 to July 20, 2009, thus, thelatter is not required to reimburse the same due to the fact that one is

entitled to such amounts until the day that the reinstatement order was

reversed with finality (which in this case falls on August 10, 2009). (SeeJuanito A. Garcia vs. Philippine Airlines, Inc. G.R. No. 164856, January

20, 2009)32

Hence, the present petition.

The Issues

Petitioners raised as issues that the Court of Appeals erred in ruling

that (1) the NLRC’s 29 May 2009 Decision became final and executory on

10 August 2009, and (2) Solidum was entitled to P2,881,335.86,

representing the total amount under the 22 October 2010 and 18 May 2011

alias writs of execution.





The petition is unmeritorious.

The NLRC’s 29 May 2009 Decision became final and executory on 10

August 2009 as shown on the entry of judgment.33 The entry of judgment

states:

This is to certify that on May 29, 2009, a DECISION was rendered

in the above-entitled case, the dispositive portion of which reads asfollows:

“WHERFORE, premises considered, complainant’smotion for reconsideration, as well as respondents’ motion

for injunction are hereby both DENIED for lack of merit.

Accordingly, Our January 26, 2009 Resolution is hereby

REITERATED.

SO ORDERED.”

and that the same has pursuant to the Rules of the Commission,

become final and executory on Aug. 10, 2009 and is hereby recorded in

the Book of Entries of Judgments.

Quezon City, Philippines, June 01, 2010.34 (Boldfacing supplied)

Moreover, the certification35 issued by the NLRC states that the

NLRC’s 29 May 2009 Decision became final and executory on 10 August

2009:

This is to certify that the Decision in NLRC Case No. 00-11-

09564-05/NLRC CA No. 049875-06, entitled: Jose Leni Z. Solidum vs.

Smart Communications, Inc., Napoleon L. Nazareno, and/or Ricky P. Isla,

was promulgated on 29 May 2009; the same was mailed on 11 June2009 and in the absence of return cards, the decision had become final

and executory on 10 August 2009, (after sixty (60) calendar days from

the date of mailing), and had been recorded in the Book of Entries of

Judgment, pursuant to Rule VII Section 14 of the 2005 Revised Rules of Procedure of the NLRC which provides: “The Executive Clerk or Deputy

Executive Clerk shall consider the decision, resolution or order as final

and executory after sixty (60) calendar days from date of mailing in theabsence of return cards, certifications from the post office, or other proof

of service to parties.36 (Boldfacing supplied)

Since the NLRC’s 29 May 2009 Decision became final and executoryon 10 August 2009, Solidum is entitled to P2,881,335.86, representing his




21 January to 20 July 2009.

In Bago v. NLRC ,37 the Court held that employees are entitled to their

accrued salaries, allowances, benefits, incentives and bonuses until the

NLRC’s reversal of the labor arbiter’s order of reinstatement becomes final

and executory, as shown on the entry of judgment. The Court held that:

Finally, on Arlyn’s claim that respondents “unilaterally withheld

her payroll reinstatement” after the NLRC reversed on September 27,

2004 the Labor Arbiter’s decision, Article 223, paragraph 6 of the Labor Code provides that the decision of the NLRC on appeals from decisions of

the Labor Arbiter “shall become final and executory after ten (10) calendar

days from receipt thereof by the parties.” The 2002 New Rules of Procedure of the NLRC provided:

RULE VII

x x x x

SECTION 14. FINALITY OF DECISION OF THE

COMMISSION AND ENTRY OF JUDGMENT. — (a)Finality of the Decisions, Resolutions or Orders of the

Commission. Except as provided in Rule XI, Section 9, the

decisions, resolutions or orders of the Commission/Divisionshall become executory after ten (10) calendar days from

receipt of the same.

(b) Entry of Judgment. — Upon the expiration of the ten (10) calendar day period provided in paragraph (a)

of this section, the decision/resolution/order shall, as far as

practicable, be entered in a book of entries of judgment.

(c) Allowance for Delay of Mail in the Issuance of Entries of Judgment. — In issuing entries of judgment, the

Executive Clerk of Court or the Deputy Executive Clerk, inthe absence of a return card or certification from the post

office concerned, shall determine the finality of the decision by making allowance for delay of mail, computed sixty (60)

calendar days from the date of mailing of the decision,

resolution or order.

That the Court of Appeals may take cognizance of and resolve a petition for certiorari for the nullification of the decisions of the NLRC on

jurisdictional and due process considerations does not affect the statutory

finality of the NLRC Decision. The 2002 New Rules of Procedure of the

NLRC so provided:

RULE VIII



Decision

G.R. No. 204646

SECTION 6 EFFECT OF FILING OF PETITION

FOR

CERTIOR RI

ON EXECUTION. - A petition for

certiorari with the Court of Appeals or the Supreme Court

shall not stay the execution

of

the assailed decision unless a

temporary restraining order

is

issued by the Court

of

Appeals or the Supreme Court.

In the case at bar, Arlyn received the September 27, 2004 NLRC

decision on October 25, 2004, and the January 31, 2005 NLRC Resolution

denying her Motion for Reconsideration on February 23, 2005. There is

no showing that the Court

of

Appeals issued a temporary restraining order

to enjoin the execution

of

the NLRC decision, as affirmed by its

Resolution of January 31, 2005.

f above-quoted

paragraph

(a)

of

Section 14

of

Rule

VII of

the

2002 NLRC New Rules of Procedure were followed, the decision of the

NLRC would have become final and executory on March 7, 2005, ten

(10)

calendar

days from February 25, 2005.

The NLRC,

however,

issued on

June

16,

2005

a Notice

of Entry of

Judgment stating that

the

NLRC Resolution of

January

31, 2005 became final and executory on

April

16,

2005, apparently

following

the

above-quoted last

paragraph

of Section 14 of Rule VII. No objection having been raised by any of

the parties

to

the

declaration in

the

Notice

of

Entry of Judgment

of

the date of

finality

of

the

NLRC

January 31,

2005

Resolution,

Arlyn s

payroll reinstatement ended on April 16, 2005.

xx

x

WHEREFORE, the petition is, in light

of

the foregoing

discussions, DENIED and the questioned decision of the court a quo

is

AFFIRMED with MODIFICATION in that respondent Standard

Insurance, Co., Inc. is

ordered

to

pay

the salaries due petitioner, Arlyn

Bago, from

the

time her payroll reinstatement was withheld

after the

promulgation

on

September 27, 2004 of the

decision

of the

National

Labor

Relations Commission until April 16, 2005 when it became final

and

executory.

38

(Boldfacing supplied)

WHEREFORE,

the petition is DENIED. The Court of Appeals 3

July 2012 Amended Decision and

23

November 2012 Resolution in CA

G.R. SP No. 115794 are AFFIRMED.

SO ORDERED.

} ~



Decision

WE

CONCUR:

2

A

· A l f ~ ; : ;

Associate Justice

REZ

JOSEC

:--MARVIC M.V.F. LEONEN

Associate Justice

ATTESTATION

G.R. No. 204646

ND OZ

I attest that the conclusions in the above Decision had been reached in

consultation before the case was assigned to the writer o the opinion o the

Court s Division.

a z = ~ ~



Decision

3

G.R. No. 204646

CERTIFICATION

Pursuant to Section 13, Article VIII o the Constitution, and the

Division Chairperson s Attestation, I certify that the conclusions in the

above Decision had been reached in consultation before the case was

assigned to the writer o the opinion

o

the Court s Division.

MARIA LOURDES P A SERENO

Chief Justice





Manila

FIRST DIVISION

G.R. No. 177467 March 9, 2011

PFIZER, INC. AND/OR REY GERARDO BACARRO, AND/OR FERDINAND CORTES, AND/OR ALFREDMAGALLON, AND/OR ARISTOTLE ARCE, Petitioners,vs.GERALDINE VELASCO, Respondent.

D E C I S I O N

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 thResolution1 dated October 23, 2006 as well as the Resolution2 dated April 10, 2007 both issued by the Court o Appeals in CA-G.R. SP No. 88987 entitled, "Pfizer, Inc. and/or Rey Gerardo Bacarro, and/or Ferdinand Cortesand/or Alfred Magallon, and/or Aristotle Arce v. National Labor Relations Commission Second Division anGerald i ne Velasco." The October 23, 2006 Resolution modified upon respondent’s motion for reconsideration th

Decision3 dated November 23, 2005 of the Court of Appeals by requiring PFIZER, Inc. (PFIZER) to pa

respondent’s wages from the date of the Labor Arbiter’s Decision4 dated December 5, 2003 until it was eventualreversed and set aside by the Court of Appeals. The April 10, 2007 Resolution, on the other hand, deniePFIZER’s 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 CarRepresentative since 1 August 1992. Sometime in April 2003, Velasco had a medical work up for her high-rispregnancy and was subsequently advised bed rest which resulted in her extending her leave of absence. Velascfiled her sick leave for the period from 26 March to 18 June 2003, her vacation leave from 19 June to 20 Jun2003, 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 petitioneFerdinand Cortez, personally served Velasco a "Show-cause Notice" dated 25 June 2003. Aside from mentioninabout an investigation on her possible violations of company work rules regarding "unauthorized deals and/odiscounts in money or samples and unauthorized withdrawal and/or pull-out of stocks" and instructing her tsubmit her explanation on the matter within 48 hours from receipt of the same, the notice also advised her that shwas being placed under "preventive suspension" for 30 days or from that day to 6 August 2003 and consequentordered 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 6MPOA/TPOA Revolving Travel Fund. The following day, petitioner Cortez together with one Efren Darianretrieved the above-mentioned "accountabilities" from Velasco’s residence.

In response, Velasco sent a letter addressed to Cortez dated 28 June 2003 denying the charges. In her letteVelasco claimed that the transaction with Mercury Drug, Magsaysay Branch covered by her check (no. 1072)

the amount of P23,980.00 was merely to accommodate two undisclosed patients of a certain Dr. Renato ManaloIn support thereto, Velasco attached the Doctor’s letter and the affidavit of the latter’s secretary.



On 12 July 2003, Velasco received a "Second Show-cause Notice" informing her of additional developments itheir investigation. According to the notice, a certain Carlito Jomen executed an affidavit pointing to Velasco as thone who transacted with a printing shop to print PFIZER discount coupons. Jomen also presented text messageoriginating from Velasco’s company issued cellphone referring to the printing of the said coupons. Again, Velascwas given 48 hours to submit her written explanation on the matter. On 16 July 2003, Velasco sent a letter tPFIZER 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 ArbitratioBranch. The following day, 17 July 2003, PFIZER sent her a letter inviting her to a disciplinary hearing to be helon 22 July 2003. Velasco received it under protest and informed PFIZER via the receiving copy of the said lettethat she had lodged a complaint against the latter and that the issues that may be raised in the July 22 hearin"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 "Third Show-cause Notice," together with copies of the affidavits of two Branch Managers of Mercury Drug, askinher for her comment within 48 hours. Finally, on 29 July 2003, PFIZER informed Velasco of its "ManagemenDecision" terminating her employment.

On 5 December 2003, the Labor Arbiter rendered its decision declaring the dismissal of Velasco illegal, orderinher reinstatement with backwages and further awarding moral and exemplary damages with attorney’s fees. O

appeal, the NLRC affirmed the same but deleted the award of moral and exemplary damages.5

The dispositive portion of the Labor Arbiter’s Decision dated December 5, 2003 is as follows:

WHEREFORE, judgment is hereby rendered declaring that complainant was illegally dismissed. Respondents ar

ordered to reinstate the complainant to her former position without loss of seniority rights and with full backwageand to pay the complainant the following:

1. Full backwages (basic salary, company benefits, all allowancesas of December 5, 2003 in the amount of P572,780.00);

2. 13th Month Pay, Midyear, Christmas and performance bonusesin the amount of P105,300.00;

3. Moral damages of P50,000.00;

4. Exemplary damages in the amount of P30,000.00;

5. Attorney’s Fees of 10% of the award excluding damages in theamount of P67,808.00.

The total award is in the amount of P758,080.00.6

PFIZER appealed to the National Labor Relations Commission (NLRC) but its appeal was denied via the NLR

Decision7 dated October 20, 2004, which affirmed the Labor Arbiter’s ruling but deleted the award for damagesthe dispositive portion of which is as follows:

WHEREFORE, premises considered, the instant appeal and the motion praying for the deposit in escrow ocomplainant’s payroll reinstatement are hereby denied and the Decision of the Labor Arbiter is affirmed with thmodification that the award of moral and exemplary damages is deleted and attorney’s fees shall be based on th

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 Resolution 9 dateDecember 14, 2004.

Undaunted, PFIZER filed with the Court of Appeals a special civil action for the issuance of a writ of certioraunder Rule 65 of the Rules of Court to annul and set aside the aforementioned NLRC issuances. In a Decisiodated November 23, 2005, the Court of Appeals upheld the validity of respondent’s dismissal from employmenthe dispositive portion of which reads as follows:



, e ns an pe on s . e assa e ec s on o e a e c o er awell as its Resolution of 14 December 2004 is hereby ANNULED and SET ASIDE. Having found the termination oGeraldine L. Velasco’s employment in accordance with the two notice rule pursuant to the due proces

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 Resolutiodated October 23, 2006 wherein it affirmed the validity of respondent’s dismissal from employment but modified itearlier ruling by directing PFIZER to pay respondent her wages from the date of the Labor Arbiter’s Decision dateDecember 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 PFIZERINC. is hereby ordered to pay her the wages to which she is entitled to from the time the reinstatement order wa

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 assailethe Court of Appeals Decision dated November 23, 2005 and was docketed as G.R. No. 175122. Respondentpetition, questioning the Court of Appeals’ dismissal of her complaint, was denied by this Court’s Second Divisio

in a minute Resolution12 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 Couresolves to DENY the petition for failure to sufficiently show any reversible error in the assailed judgment twarrant the exercise of this Court’s discretionary appellate jurisdiction, and for raising substantially factual issues.

On the other hand, PFIZER filed the instant petition assailing the aforementioned Court of Appeals Resolutionand 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 paVelasco wages from the date of the Labor Arbiter’s decision ordering her reinstatement until November 23, 2005

when the Court of Appeals rendered its decision declaring Velasco’s 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 regarto 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

dismissed employee entitles him to payment of his salaries effective from the time the employer failed to reinstathim despite the issuance of a writ of execution. Unless there is a restraining order issued, it is ministerial upon thLabor Arbiter to implement the order of reinstatement. In the case at bar, no restraining order was granted. Thusit was mandatory on PAL to actually reinstate Roquero or reinstate him in the payroll. Having failed to do so, PAmust 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 PFIZER’s contention in its Memorandum16 that "there was no unjustified refusal on [its part] to reinstat

[respondent] Velasco during the pendency of the appeal,"17 thus, the pronouncement in Roquero cannot be madto govern this case. During the pendency of the case with the Court of Appeals and prior to its November 23, 200Decision, PFIZER claimed that it had already required respondent to report for work on July 1, 2005. Howeveaccording to PFIZER, it was respondent who refused to return to work when she wrote PFIZER, through counse

that she was opting to receive her separation pay and to avail of PFIZER’s early retirement program.

In PFIZER’s view, it should no longer be required to pay wages considering that (1) it had already previously paian enormous sum to respondent under the writ of execution issued by the Labor Arbiter; (2) it was allegedly readto reinstate respondent as of July 1, 2005 but it was respondent who unjustifiably refused to report for work; (3) would purportedly be tantamount to allowing respondent to choose "payroll reinstatement" when by law it was themployer which had the right to choose between actual and payroll reinstatement; (4) respondent should bdeemed to have "resigned" and therefore not entitled to additional backwages or separation pay; and (5) thCourt should not mechanically apply Roquero but rather should follow the doctrine in Genuino v. National Labo

18 " "19



.

We do not agree.

At the outset, we note that PFIZER’s previous payment to respondent of the amount of P1,963,855.0(representing her wages from December 5, 2003, or the date of the Labor Arbiter decision, until May 5, 2005) thawas successfully garnished under the Labor Arbiter’s Writ of Execution dated May 26, 2005 cannot be considerein its favor. Not only was this sum legally due to respondent under prevailing jurisprudence but also thcircumstance highlighted PFIZER’s unreasonable delay in complying with the reinstatement order of the Labo Arbiter. A perusal of the records, including PFIZER’s own submissions, confirmed that it only required responden

to report for work on July 1, 2005, as shown by its Letter 20 dated June 27, 2005, which is almost two years fromthe time the order of reinstatement was handed down in the Labor Arbiter’s Decision dated December 5, 2003.

As far back as 1997 in the seminal case of Pioneer Texturizing Corporation v. National Labor Relation

Commission,21 the Court held that an award or order of reinstatement is immediately self-executory without th

need for the issuance of a writ of execution in accordance with the third paragraph of Article 223 22 of the LaboCode. 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 immediateexecutory even pending appeal and the posting of a bond by the employer shall not stay the execution foreinstatement . The legislative intent is quite obvious, i.e., to make an award of reinstatement immediateenforceable, even pending appeal. To require the application for and issuance of a writ of execution aprerequisites for the execution of a reinstatement award would certainly betray and run counter to the very objecand intent of Article 223, i.e., the immediate execution of a reinstatement order. The reason is simple. Aapplication for a writ of execution and its issuance could be delayed for numerous reasons. A mere continuance opostponement of a scheduled hearing, for instance, or an inaction on the part of the Labor Arbiter or the NLRcould easily delay the issuance of the writ thereby setting at naught the strict mandate and noble purposenvisioned by Article 223. In other words, if the requirements of Article 224 [including the issuance of a writ oexecution] were to govern, as we so declared in Maranaw , then the executory nature of a reinstatement order oaward contemplated by Article 223 will be unduly circumscribed and rendered ineffectual. In enacting the law, thlegislature is presumed to have ordained a valid and sensible law, one which operates no further than may bnecessary to achieve its specific purpose. Statutes, as a rule, are to be construed in the light of the purpose to bachieved and the evil sought to be prevented. x x x In introducing a new rule on the reinstatement aspect of labor decision under Republic Act No. 6715, Congress should not be considered to be indulging in mere semant

exercise. x x x23 (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, shoul

have been done as soon as an order or award of reinstatement is handed down by the Labor Arbiter without neefor the issuance of a writ of execution. Thus, respondent was entitled to the wages paid to her under thaforementioned writ of execution. At most, PFIZER’s payment of the same can only be deemed partiacompliance/execution of the Court of Appeals Resolution dated October 23, 2006 and would not bar respondenfrom 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 bthe Labor Arbiter to pay the amount of P1,963,855.00 representing respondent’s full backwages from Decembe5, 2003 up to May 5, 2005, did PFIZER decide to require respondent to report back to work via the Letter dateJune 27, 2005.

PFIZER makes much of respondent’s non-compliance with its return- to-work directive by downplaying the reasonforwarded by respondent as less than sufficient to justify her purported refusal to be reinstated. In PFIZER’s view

the return-to-work order it sent to respondent was adequate to satisfy the jurisprudential requisites concerning threinstatement of an illegally dismissed employee.

It would be useful to reproduce here the text of PFIZER’s Letter dated June 27, 2005:

Dear Ms. Velasco:

Please be informed that, pursuant to the resolutions dated 20 October 2004 and 14 December 2004rendered by the National Labor Relations Commission and the order dated 24 May 2005 issued by



. , , . .,at Pfizer’s main office at the 23rd Floor, Ayala Life–FGU 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 admitteback to work under the same terms and conditions prevailing prior to his dismissal or separation or, at thoption 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 habeen removed or separated. The person reinstated assumes the position he had occupied prior to his dismissaReinstatement presupposes that the previous position from which one had been removed still exists, or that theris an unfilled position which is substantially equivalent or of similar nature as the one previously occupied by th

employee.25

Applying the foregoing principle to the case before us, it cannot be said that with PFIZER’s June 27, 2005 Lettein belated fulfillment of the Labor Arbiter’s reinstatement order, it had shown a clear intent to reinstate respondento her former position under the same terms and conditions nor to a substantially equivalent position. To begwith, the return-to-work order PFIZER sent respondent is silent with regard to the position or the exact nature oemployment that it wanted respondent to take up as of July 1, 2005. Even if we assume that the job awaitinrespondent in the new location is of the same designation and pay category as what she had before, it is plafrom the text of PFIZER’s June 27, 2005 letter that such reinstatement was not "under the same terms anconditions" as her previous employment, considering that PFIZER ordered respondent to report to its main officin Makati City while knowing fully well that respondent’s previous job had her stationed in Baguio Cit(respondent’s place of residence) and it was still necessary for respondent to be briefed regarding her worassignments and responsibilities, including her re location benefits.

The Court is cognizant of the prerogative of management to transfer an employee from one office to another withthe business establishment, provided that there is no demotion in rank or diminution of his salary, benefits another privileges and the action is not motivated by discrimination, made in bad faith, or effected as a form o

punishment or demotion without sufficient cause.26 Likewise, the management prerogative to transfer personnmust 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 PFIZER’s Makati maioffice would necessarily cause hardship to respondent, a married woman with a family to support residing iBaguio City. However, PFIZER, as the employer, offered no reason or justification for the relocation such as thfilling up of respondent’s former position and the unavailability of substantially equivalent position in Baguio City. transfer of work assignment without any justification therefor, even if respondent would be presumably doing th

same job with the same pay, cannot be deemed faithful compliance with the reinstatement order. In other words, ithis instance, there was no real, bona fide reinstatement to speak of prior to the reversal by the Court of Appeaof the finding of illegal dismissal.

In view of PFIZER’s failure to effect respondent's actual or payroll reinstatement, it is indubitable that the Roquerruling is applicable to the case at bar. The circumstance that respondent opted for separation pay in lieu o

reinstatement as manifested in her counsel’s Letter 28 dated July 18, 2005 is of no moment. We do not serespondent’s letter as taking away the option from management to effect actual or payroll reinstatement but, ratheunder the factual milieu of this case, where the employer failed to categorically reinstate the employee to he



,ambivalent return-to-work order. To uphold PFIZER’s view that it was respondent who unjustifiably refused to worwhen PFIZER did not reinstate her to her former position, and worse, required her to report for work undeconditions prejudicial to her, is to open the doors to potential employer abuse. Foreseeably, an employer macircumvent the immediately enforceable reinstatement order of the Labor Arbiter by crafting return-to-wordirectives that are ambiguous or meant to be rejected by the employee and then disclaim liability for backwagedue to non-reinstatement by capitalizing on the employee’s purported refusal to work. In sum, the option of themployer to effect actual or payroll reinstatement must be exercised in good faith.

Moreover, while the Court has upheld the employer’s right to choose between actually reinstating an employee omerely reinstating him in the payroll, we have also in the past recognized that reinstatement might no longer b

possible under certain circumstances. In F.F. Marine Corporation v. National Labor Relations Commission,29 whad the occasion to state:

It is well-settled that when a person is illegally dismissed, he is entitled to reinstatement without loss of senioritrights and other privileges and to his full backwages. In the event, however, that reinstatement is no longefeasible, or if the employee decides not be reinstated, the employer shall pay him separation pay in lieu oreinstatement. Such a rule is likewise observed in the case of a strained employer-employee relationship or whethe work or position formerly held by the dismissed employee no longer exists. In sum, an illegally dismisseemployee is entitled to: (1) either reinstatement if viable or separation pay if reinstatement is no longer viable, an

(2) backwages.30 (Emphasis supplied.)

Similarly, we have previously held that an employee’s demand for separation pay may be indicative of straine

relations that may justify payment of separation pay in lieu of reinstatement.31 This is not to say, however, tharespondent is entitled to separation pay in addition to backwages. We stress here that a finding of straine

relations must nonetheless still be supported by substantial evidence.32

In the case at bar, respondent’s decision to claim separation pay over reinstatement had no legal effect, not onlbecause there was no genuine compliance by the employer to the reinstatement order but also because themployer chose not to act on said claim. If it was PFIZER’s position that respondent’s act amounted to "resignation" it should have informed respondent that it was accepting her resignation and that in view thereof shwas not entitled to separation pay. PFIZER did not respond to respondent’s demand at all. As it was, PFIZERfailure to effect reinstatement and accept respondent’s offer to terminate her employment relationship with thcompany meant that, prior to the Court of Appeals’ reversal in the November 23, 2005 Decision, PFIZER’s liabilitfor backwages continued to accrue for the period not covered by the writ of execution dated May 24, 2005 untNovember 23, 2005.

Lastly, PFIZER exhorts the Court to re-examine the application of Roquero with a view that a mechanicapplication of the same would cause injustice since, in the present case, respondent was able to gain pecuniarbenefit notwithstanding the circumstance of reversal by the Court of Appeals of the rulings of the Labor Arbiteand the NLRC thereby allowing respondent to profit from the dishonesty she committed against PFIZER which wathe basis for her termination. In its stead, PFIZER proposes that the Court apply the ruling in Genuino v. Nation

Labor Relations Commission33 which it believes to be more in accord with the dictates of fairness and justice. I

that case, we canceled the award of salaries from the date of the decision of the Labor Arbiter awardinreinstatement 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 thcomplainant from the date it reinstated complainant in the payroll (computed at P60,000.00 a month, as found bthe Labor Arbiter) up to and until the date of this decision," the Court hereby cancels said award in view of it

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 Ar223, paragraph 3 of the Labor Code, which states:

x x x x

If the decision of the labor arbiter is later reversed on appeal upon the finding that the ground for dismissal ivalid, then the employer has the right to require the dismissed employee on payroll reinstatement to refund thsalaries s/he received while the case was endin a eal, or it can be deducted from the accrued benefits that th



dismissed employee was entitled to receive from his/her employer under existing laws, collective bargaininagreement provisions, and company practices. However, if the employee was reinstated to work during thpendency of the appeal, then the employee is entitled to the compensation received for actual services renderewithout need of refund.

Considering that Genuino was not reinstated to work or placed on payroll reinstatement, and her dismissal based on a just cause, then she is not entitled to be paid the salaries stated in item no. 3 of the fallo of th

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 requirrespondent to refund the amount that she was able to collect by way of garnishment from PFIZER as her accruesalaries.

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 Genuino requiring the dismissed employee placed on payroll reinstatement to refund the salaries in case a finadecision upholds the validity of the dismissal. In Garcia, we clarified the principle of reinstatement pending appedue 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 pendinappeal or, particularly, the option of payroll reinstatement. On the one hand is the jurisprudential trend aexpounded in a line of cases including Air Philippines Corp. v. Zamora, while on the other is the recent case oGenuino v. National Labor Relations Commission. At the core of the seeming divergence is the application o

paragraph 3 of Article 223 of the Labor Code x x x.

x x x x

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 othe part of the employer to reinstate and pay the wages of the dismissed employee during the perioof appeal until reversal by the higher court. On the other hand, if the employee has been reinstated durinthe appeal period and such reinstatement order is reversed with finality, the employee is not required to reimburswhatever 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 receivwages pending appeal upon reinstatement, which is immediately executory. Unless there is a restraining order, it ministerial upon the Labor Arbiter to implement the order of reinstatement and it is mandatory on the employer tcomply 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 ivalid, then the employer has the right to require the dismissed employee on payroll reinstatement trefund the salaries [he] received while the case was pending appeal, or it can be deducted from the accruebenefits that the dismissed employee was entitled to receive from [his] employer under existing laws, collectivbargaining agreement provisions, and company practices. However, if the employee was reinstated to work durinthe pendency of the appeal, then the employee is entitled to the compensation received for actual servicerendered without need of refund.

Considering that Genuino was not reinstated to work or placed on payroll reinstatement, and her dismissal based on a just cause, then she is not entitled to be paid the salaries stated in item no. 3 of the fallo of thSeptember 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 wafound 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 wa



. , ,order the refund of salaries garnished or received by payroll-reinstated employees despite a subsequent reversof the reinstatement order.

The dearth of authority supporting Genuino is not difficult to fathom for it would otherwise render inutile thrationale of reinstatement pending appeal.

x x x x

x x x Then, by and pursuant to the same power (police power), the State may authorize an immediatimplementation, pending appeal, of a decision reinstating a dismissed or separated employee since that saving ais designed to stop, although temporarily since the appeal may be decided in favor of the appellant, a continuin

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 doctrineerroneously espoused in Genuino:

Even outside the theoretical trappings of the discussion and into the mundane realities of human experience, th"refund doctrine" easily demonstrates how a favorable decision by the Labor Arbiter could harm, more than help, dismissed employee. The employee, to make both ends meet, would necessarily have to use up the salariereceived during the pendency of the appeal, only to end up having to refund the sum in case of a final unfavorabdecision. It is mirage of a stop-gap leading the employee to a risky cliff of insolvency. 1 a v v p h i 1

Advisably, the sum is better left unspent. It becomes more logical and practical for the employee to refuse payroreinstatement and simply find work elsewhere in the interim, if any is available. Notably, the option of payro

reinstatement belongs to the employer, even if the employee is able and raring to return to work. Prior to Genuinit is unthinkable for one to refuse payroll reinstatement. In the face of the grim possibilities, the rise of concerneemployees declining payroll reinstatement is on the horizon.

Further, the Genuino ruling not only disregards the social justice principles behind the rule, but also institutes scheme unduly favorable to management. Under such scheme, the salaries dispensed pendente lite merely servas a bond posted in installment by the employer. For in the event of a reversal of the Labor Arbiter's decisioordering reinstatement, the employer gets back the same amount without having to spend ordinarily for bonpremiums. This circumvents, if not directly contradicts, the proscription that the "posting of a bond [even a casbond] 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 refunthe salaries in case a final decision upholds the validity of the dismissal, the Court realigns the proper course o

the prevailing doctrine on reinstatement pending appeal vis-à-vis the effect of a reversal on appeal.

x x x x

The Court reaffirms the pre vailing principle that even if the order of re instatement of the Labor Arbiteis reversed on appeal, it is obligatory on the part of the employer to reinstate and pay the wages of th

dismissed employee during the period of appeal until reversal by the higher court. x x x.37 (Emphassupplied.)

In sum, the Court reiterates the principle that reinstatement pending appeal necessitates that it must bimmediately self-executory without need for a writ of execution during the pendency of the appeal, if the law is tserve its noble purpose, and any attempt on the part of the employer to evade or delay its execution should not ballowed. Furthermore, we likewise restate our ruling that an order for reinstatement entitles an employee to receiv

his accrued backwages from the moment the reinstatement order was issued up to the date when the same wareversed by a higher court without fear of refunding what he had received. It cannot be denied that, under oustatutory and jurisprudential framework, respondent is entitled to payment of her wages for the period afteDecember 5, 2003 until the Court of Appeals Decision dated November 23, 2005, notwithstanding the findintherein that her dismissal was legal and for just cause. Thus, the payment of such wages cannot be deemed aunjust enrichment on respondent’s part.

WHEREFORE, the petition is DENIED and the assailed Resolution dated October 23, 2006 as well as thResolution dated April 10, 2007 both issued by the Court of Appeals in CA-G.R. SP No. 88987 are hereb



.

SO ORDERED.


WE CONCUR:

RENATO C. CORONAChief JusticeChairperson

PRESBITERO J. VELASCO, JR. Associate Justice




Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above Decision had beereached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.


Footnotes

1 Rollo, pp. 42-44.

2 Id. at 65-66.

3 Id. at 307-323; penned by Associate Justice Rosmari D. Carandang with Associate Justices Andres BReyes, Jr. and Monina Arevalo-Zenarosa, concurring.

4 Id. at 187-201.

5 Id. at 307-310.

6 Id. at 201.

7 Id. at 234-248; penned by NLRC Commissioner Ernesto C. Verceles with Presiding Commissioner LourdeC. Javier and Commissioner Tito F. Genilo, concurring.

8 Id. at 247.

9 Id. at 265-266.

10 Id. at 322-323.

11 Id. at 43.

12 Rollo (G.R. No. 175122), p. 238.

13 Id. at 403.

14



. .

15 Id. at 446.

16 Rollo, pp. 394-415.

17 Id. at 405.

18 G.R. Nos. 142732-33 and 142753-54, December 4, 2007, 539 SCRA 342.

19 Rollo, p. 411.

20 Id. at 304.

21 345 Phil. 1057 (1997).

22 In any event, the decision of the Labor Arbiter reinstating a dismissed or separated employee, insofar athe reinstatement aspect is concerned, shall immediately be executory, even pending appeal. The employeshall either be admitted back to work under the same terms and conditions prevailing prior to his dismissor separation or, at the option of the employer, merely reinstated in the payroll. The posting of a bond bthe employer shall not stay the execution for reinstatement provided herein.

23 Pioneer Texturizing Corporation v. National Labor Relations Commission, supra note 21 at 1075-1076.

24 Rollo, p. 304.

25 Asian Terminals, Inc. v. Villanueva, G.R. No. 143219, November 28, 2006, 508 SCRA 346, 352.

26 Norkis Trading Co., Inc. v. Gnilo, G.R. No. 159730, February 11, 2008, 544 SCRA 279, 289.

27 Urbanes, Jr. v. Court of Appeals, G.R. No. 138379, November 25, 2004, 444 SCRA 84, 95.

28 Rollo, pp. 305-306.

29 495 Phil. 140 (2005).

30 Id. at 159.

31 F.R.F. Enterprises, Inc. v. National Labor Relations Commission, 313 Phil. 493, 502 (1995).

32 Golden Ace Builders v. Talde, G.R. No. 187200, May 5, 2010.

33 Supra note 18.

34 Id. at 363-364.


36 Id. at 488-491.

37 Id. at 491-493.






Manila

THIRD DIVISION

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.

D E C I S I O N

PUNO, J.:

This petition seeks to set aside the Decision dated March 13, 2000 and Resolution dated February 13, 2001 othe Court of Appeals in CA-G.R. SP No. 53204 entitled "Cottonway Marketing Corp. vs. National Labor RelationCommission, et al."

The facts are as follows:

Petitioners were former employees of Cottonway Marketing Corp. (Cottonway), hired as promo girls for thegarment products. In October, 1994, after their services were terminated as the company was allegedly sufferinbusiness losses, petitioners filed with the National Labor Relations Commission (NLRC) a complaint for illegadismissal, underpayment of salary, and non-payment of premium pay for rest day, service incentive leave pay an

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' retrenchme

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 anordered the reinstatement of petitioners without loss of seniority rights and other privileges. It also ordereCottonway to pay petitioners their proportionate thirteenth month pay and their full backwages inclusive oallowances and other benefits, or their monetary equivalent computed from the time their salaries were withhe

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 ordeof reinstatement by sending notices dated June 5, 1996 requiring the petitioners to return to work, but to no avaand consequently, they sent letters to petitioners dated August 1, 1996 informing them that they have lost the

employment for failure to comply with the return to work order.5 Cottonway also filed a petition for certiorari wit

the Supreme Court which was dismissed on October 14, 1996.6



, ,had become final and executory.7

On December 4, 1996, the Research and Investigation Unit of the NLRC issued a computation of the monetar

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, 199

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 manifestatio

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 opetitioners' 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 allothe reception of evidence with respect to their claim that petitioners have found new employment. The Commissio

denied Cottonway’s 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 obackwages and proportionate thirteenth month pay to petitioners should be limited from the time of their illegadismissal up to the time they received the notice of termination sent by the company upon their refusal to repofor work despite the order of reinstatement. He cited the fact that petitioners failed to report to their posts withou justifiable reason despite respondent's order requiring them to return to work immediately. The Labor Arbite

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 dateSeptember 21, 1998. The Commission ruled that its Decision dated March 26, 1996 has become final anexecutory and it is the ministerial duty of the Labor Arbiter to issue the corresponding writ of execution to effect fu

and unqualified implementation of said decision.15 The Commission thus ordered that the records of the case bremanded 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 thNLRC 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 petitioner

reinstatement was no longer possible as they deliberately refused to return to work despite the notice given bCottonway. The Court of Appeals thus held that the amount of backwages due them should be computed only uto 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 despitdue notice being valid, it would change the substance of the questioned March 26, 1996 decision which awardbackwages to the complainants up to their reinstatement. Again, private respondents' reinstatement is no longepossible because of the supervening event which is their valid termination. The deliberate failure to report for worafter notice to return bars reinstatement. It would be unjust and inequitable then to require petitioner to pay privatrespondents their backwages even after the latter were validly terminated when in fact petitioner dutifully compliewith the reinstatement aspect of the decision. Thus, the period within which the monetary award of privatrespondents should be based is limited up to the time of private respondents' receipt of the respective notices o

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 excesof jurisdiction in rendering the assailed decision in CA-G.R. No. SP 53204 without first performing itministerial duty of taking initial judicial action thereon unlawfully depriving the petitioners the opportunity t



commen an or e respons ve p ea ngs o e pe on resu ng o e r e ng un aw u y en e a ay court;

II. That the Honorable Court of Appeals gravely abused its discretion amounting to lack of and/or in excesof jurisdiction in rendering a decision in CA-G.R. No. SP 53204 reversing and setting aside the lawful anappropriate September 21, 1998 and March 31, 1999 resolutions of the Honorable NLRC and reinstatinthe 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 excesof jurisdiction in issuing the February 13, 2001 Resolution which denied petitioners' motion fo

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' backwages—whetheit should be limited from the time they were illegally dismissed until they received the notice of termination sent bCottonway on August 1, 1996 as argued by respondent company, or whether it should be computed from the timof 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 dateMarch 26, 1996. Thus, Cottonway was ordered to reinstate petitioners to their former position without loss oseniority 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 Corporatiois hereby ordered to reinstate the complainants without loss of seniority rights and other privileges and to pa

them the following: (1) their proportionate 13th month pay for 1994; and (2) their full backwages inclusive oallowances and other benefits, or their monetary equivalent computed from the time their salaries were withhefrom 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 themployee to the position from which he was removed, i.e., to his status quo ante dismissal, while the grant obackwages allows the same employee to recover from the employer that which he lost by way of wages because o

his dismissal.20

Under R.A. 6715, employees who are illegally dismissed are entitled to full backwages, inclusive of allowances another benefits or their monetary equivalent, computed from the time their actual compensation was withheld fro

them up to the time of their actual reinstatement. If reinstatement is no longer possible, the backwages shall b

computed from the time of their illegal termination up to the finality of the decision. 21 The Court explained th

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 aenunciated in said Pines City Educational Center case, by now holding that conformably with the evident legislativintent as expressed in Rep. Act No. 6715, above-quoted, backwages to be awarded to an illegally dismisseemployee, should not, as a general rule, be diminished or reduced by the earnings derived by him elsewherduring the period of his illegal dismissal. The underlying reason for this ruling is that the employee, while litigatinthe legality (illegality) of his dismissal, must still earn a living to support himself and family, while full backwagehave to be paid by the employer as part of the price or penalty he has to pay for illegally dismissing his employeeThe clear legislative intent of the amendment in Rep. Act No. 6715 is to give more benefits to workers than wa

previously given them under the Mercury Drug rule or the "deduction of earnings elsewhere" rule. Thus, a close

adherence to the legislative policy behind Rep. Act No. 6715 points to "full backwages" as meaning exactly thai.e., without deducting from backwages the earnings derived elsewhere by the concerned employee during thperiod of his illegal dismissal. In other words, the provision calling for "full backwages" to illegally dismisseemployees is clear, plain and free from ambiguity and, therefore, must be applied without attempted or straineinterpretation. 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 thNLRC dated March 26 1996 has become final and executor u on the dismissal b this Court of Cottonwa



petition for certiorari assailing said decision and the denial of its motion for reconsideration. Said judgment may nlonger be disturbed or modified by any court or tribunal. It is a fundamental rule that when a judgment becomefinal and executory, it becomes immutable and unalterable, and any amendment or alteration which substantialaffects a final and executory judgment is void, including the entire proceedings held for that purpose. Once judgment becomes final and executory, the prevailing party can have it executed as a matter of right, and thissuance of a writ of execution becomes a ministerial duty of the court. A decision that has attained finalibecomes the law of the case regardless of any claim that it is erroneous. The writ of execution must therefor

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 o Appeals cited the existence of a supervening event, that is, the valid termination of petitioners' employment due ttheir 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 thetermination. Such failure does not amount to abandonment which would justify the severance of their employmenTo warrant a valid dismissal on the ground of abandonment, the employer must prove the concurrence of twelements: (1) the failure to report for work or absence without valid or justifiable reason, and (2) a clear intentio

to sever the employer-employee relationship.24

The facts of this case do not support the claim of Cottonway that petitioners have abandoned their desire to returto their previous work at said company. It appears that three months after the NLRC had rendered its decisioordering petitioners’ reinstatement to their former positions, Cottonway sent individual notices to petitionermandating them to immediately report to work. The standard letter, signed by the company’s 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 inBelma Alivid vs. Network Fashion, Inc., JCT Int’l 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 withinfive (5) days from receipt of this letter, otherwise, your failure will be deemed lack of interest tocontinue 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 LUNALegal Counsel"

The petitioners, however, were not able to promptly comply with the order. Instead, their counsel, Atty. Roberto LLPeralta, sent a reply letter to Atty. De Luna stating that his clients were not in a position to comply with said orde

since the NLRC has not yet finally disposed of the case. The reply letter stated:26

"June 20, 1996

ATTY. AMBROSIO B. DE LUNAUnit 2-D Bouganvilla (sic) Mansions

91 P. Tuazon Street, CubaoQuezon City

Compañero,

Your letter dated June 5, 1996 to our clients, Erlinda Arga, et al., complainants in NLRC NCR CASENO. 00-10-07238-94, Genalyn Pelobello, et al. vs. Network Fashion, et al., was referred to us for reply.



to report for work within five (5) days from receipt thereof since the National Labor RelationsCommission, 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 March26, 1996 of the NLRC, we are then willing to sit down with you relative to the satisfaction of the sameto avoid said decision from being enforced by the sheriff.

Trusting your cooperation on this matter.

Thank you.

Very truly yours,

(Sgd) ROBERTO LL. PERALTACounsel For The Complainants"

Consequently, Cottonway sent the petitioners individual notices of termination. The standard letter of terminatiowhich was likewise signed by counsel and individually addressed to petitioners stated:

"August 1, 1996

BELMA ALIVIDc/o Sonia Flores#1256-A St. Nino StreetTondo(,) 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 fromreceipt of the same, you are considered to have lost your employment status effective this date withthe company on the ground of failure to report for work.

Please be guided accordingly.

Very truly yours,

(Sgd) Ambrosio B. De LunaLegal Counsel of

Network Fashion(,) Inc."

We note that Cottonway, before finally deciding to dispense with their services, did not give the petitioners thopportunity to explain why they were not able to report to work. The records also do not bear any proof that all thpetitioners received a copy of the letters. Cottonway merely claimed that some of them have left the country ansome have found other employment. This, however, does not necessarily mean that petitioners were no longeinterested in resuming their employment at Cottonway as it has not been shown that their employment in the othecompanies was permanent. It should be expected that petitioners would seek other means of income to tide themover during the time that the legality of their termination is under litigation. Furthermore, petitioners neve

abandoned their suit against Cottonway. While the case was pending appeal before the NLRC, the Court o Appeals and this Court, petitioners continued to file pleadings to ensure that the company would comply with thdirective of the NLRC to reinstate them and to pay them full backwages in case said decision is upheld. Moreove

in his reply to the company’s first letter, petitioners’ counsel expressed willingness to meet with the companyrepresentative 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 worimmediately was only a scheme to remove the petitioners for good. Petitioners’ failure to instantaneously abide bthe directive gave them a convenient reason to dispense with their services. This the Court cannot allowCottonway cited Article 223 of the Labor Code providing that the decision ordering the reinstatement of an illegaldismissed employee is immediately executory even pending appeal as basis for its decision to terminate themployment 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 tthe Commission by any or both parties within ten (10) calendar days from receipt of such decisions, awards, oorders. x x x

x x x x x x x x x

In any event, the decision of the Labor Arbiter reinstating a dismissed or separated employee, insofar as threinstatement aspect is concerned, shall immediately be executory, even pending appeal. The employee shaeither be admitted back to work under the same terms and conditions prevailing prior to his dismissal or separatioor, at the option of the employer, merely reinstated in the payroll. The posting of a bond by the employer shall nostay 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 owinterest. The law mandates the employer to either admit the dismissed employee back to work under the samterms and conditions prevailing prior to his dismissal or to reinstate him in the payroll to abate further loss oincome on the part of the employee during the pendency of the appeal. But we cannot stretch the language of thlaw as to give the employer the right to remove an employee who fails to immediately comply with threinstatement order, especially when there is reasonable explanation for the failure. If Cottonway were realsincere in its offer to immediately reinstate petitioners to their former positions, it should have given thereasonable time to wind up their current preoccupation or at least to explain why they could not return to work aCottonway at once. Cottonway did not do either. Instead, it gave them only five days to report to their posts anwhen the petitioners failed to do so, it lost no time in serving them their individual notices of termination. We aretherefore, not impressed with the claim of respondent company that petitioners have been validly dismissed o

August 1, 1996 and hence their backwages should only be computed up to that time. We hold that petitioners arentitled to receive full backwages computed from the time their compensation was actually withheld until theactual reinstatement, or if reinstatement is no longer possible, until the finality of the decision, in accordance wit

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 anResolution dated February 13, 2001 in CA-G.R. SP No. 53204 are REVERSED and SET ASIDE. Let the records othis case be remanded to the Labor Arbiter for execution in accordance with the Decision of the NLRC dateMarch 26, 1996.

SO ORDERED.

Panganiban, Sandoval-Gutierrez, Corona, and Carpio-Morales, JJ., concur.

Footnotes

1 Original Record, vol. 1, p. 2.

2 Id., pp. 240-247.

3 Id., pp. 319-326.

4 Id., pp. 386-390.

5 Id., p. 432.

6 Id., p. 478.

7 Id., p. 479.



., p. .


10 Id., pp. 78-80.

11 Id., p. 102.

12 Id., p. 109.

13 Id.


15 Id., pp. 712-718.

16 Rollo, pp. 40-50.

17 Decision, CA-G.R. SP No. 53204, pp. 10-11; Rollo, pp. 49-50.

18 Rollo, pp. 52-53.

19 Petition, Rollo, pp. 15-16.

20 De Guzman vs. NLRC, 312 SCRA 266 (1999).

21 Prudential Bank and Trust Co. vs. Reyes, 352 SCRA 316 (2001); Times Transit Credit Cooperative, Inc.vs. NLRC, 304 SCRA 11 (1999).

22 265 SCRA 61 (1996).

23 Buaya vs. Stronghold Insurance Co., Inc., 342 SCRA 576 (2000); Equatorial Realty Development, Inc. vsMayfair Theater, Inc., 332 SCRA 139 (2000).

24 Icawat vs. NLRC, 334 SCRA 75 (2000).

25 Similar letters were sent to the other petitioners, Maryjane Menor, Estrelita Manahan, Nerissa Buenviaje,Rebecca Ebol, Josie Raguero, Genalyn Pelobello, Erlinda Arga and Sonia Flores, differing only in the nameof the addressee and the title of the complaint before the NLRC. (See Original Records, vol. 2, pp. 90-98).

26 Original Records, vol. 2.

27 Similar letters were sent to Maryjane Menor, Estrelita Manahan, Nerissa Buenviaje, Rebecca Ebol, JosieRaguero, Genalyn Pelobello, Erlinda Arga and Sonia Flores. (See Original Records, vol. 2, pp. 81-89)

28 Association of Independent Unions in the Philippines vs. NLRC, 305 SCRA 219 (1999); Quebec, Sr. vs.NLRC, 301 SCRA 627 (1999).


http://www.lawphil.net/judjuris/juri1999/jan1999/gr_123184_1999.html

http://www.lawphil.net/judjuris/juri1999/mar1999/gr_120505_1999.html

http://www.lawphil.net/judjuris/juri2000/jun2000/gr_133573_2000.html

http://www.lawphil.net/judjuris/juri2000/may2000/gr_136221_2000.html

http://www.lawphil.net/judjuris/juri1999/mar1999/gr_117105_1999.html

http://www.lawphil.net/judjuris/juri2001/feb2001/gr_141093_2001.html

http://www.lawphil.net/judjuris/juri1999/aug1999/gr_130617_1999.html





Baguio City

SECOND DIVISION

G.R. No. 207983 April 7, 2014

WENPHIL CORPORATION, Petitioner,vs.ALMER R. ABING and ANABELLE M. TUAZON, Respondents.

D E C I S I O N

BRION, J.:

We resolve this petition for review on certiorari1 under Rule 45 of the Rules of Court, challenging the August 3

2012 decision2 and the June 20, 2013 resolution3 (assailed CA rulings) of the Court of Appeals (CA) in CA-G.RSP No. 117366.

These assailed CA rulings annulled and set aside the March 26, 2010 Decision4 and September 15, 2010resolution (NLRC rulings) of the National Labor Relations Commission (NLRC) in NLRC CA No. 02-8233-01 (R08).

The NLRC rulings, in turn, fully affirmed the November 16, 2007 Order 6 of the Labor Arbiter (LA) in NLRC-NCCase Nos. 30-03-00993-00 and 30-03-01020-00. The LA’s order found that an illegal dismissal took place. Thusthe LA directed petitioner Wenphil Corporation (Wenphil) to pay respondents Almer Abing and Anabelle Tuazo(respondents) their backwages for the period from February 15, 2002 to November 8, 2002, pursuant to the rul

that an order of reinstatement is immediately executory even pending appeal.7

Factual Antecedents

This case stemmed from a complaint for illegal dismissal filed by the respondents against Wenphil, docketed aNLRC NCR Case No. 30-03-00993-00.

On December 8, 2000, LA Geobel A. Bartolabac ruled8 that the respondents had been illegally dismissed bWenphil. According to the LA, the allegation of serious misconduct against the respondents had no factual an

legal basis.9 Consequently, LA Bartolabac ordered Wenphil to immediately reinstate the respondents to therespective positions or to equivalent ones, whether actuall or in the payroll. Also, the LA ordered Wenphil to pa

the respondents their backwages from February 3, 2000 until the date of their actual reinstatement.10

Because of the unfavorable LA decision, Wenphil appealed to the NLRC on April 16, 2001 11. In the meantime, th

respondents moved for the immediate execution of the LA’s December 8, 2000 decision.12

On October 29, 2001, Wenphil and the respondents entered into a compromise agreement13 before LBartolabac. They agreed to the respondents’ payroll reinstatement while Wenphil’s appeal with the NLRC waongoing. Wenphil also agreed to pay the accumulated salaries of the respondents for the payroll period from Apr

5, 2001 until October 15, 2001.14 As for the remaining payroll period starting October 16, 2001, Wenphcommitted itself to credit the respective salaries of the respondents to their ATM payroll accounts until such tim

that the questioned decision of LA Bartolabac is either modified, amended or reversed by the Honorable Nation

Labor Relations Commission.15



On January 30, 2002, the NLRC issued a resolution16 affirming LA Bartolabac’s decision with modifications. Insteaof ordering the respondents’ reinstatement, the NLRC directed Wenphil to pay the respondents their respectivseparation pay at the rate of one (1) month salary for every year of service. Also, the NLRC found that while threspondents had been illegally dismissed, they had not been illegally suspended. Thus, the period from Februar3 to February 28, 2000 during which the respondents were on preventive suspension – was excluded by the NLRC

in the computation of the respondents’ backwages.17

Subsequently, Wenphil moved for the reconsideration18 of the NLRC’s January 30, 2002 resolution, but the NLR

denied the motion in another resolution dated September 24, 2002.19

Wenphil thereafter went up to the CA via a petition for certiorari to question the NLRC’s January 30, 2002 an

September 24, 2002 resolutions.20 On August 27, 2003, the CA rendered its decision 21 reversing the NLRCfinding that the respondents had been illegally dismissed. According to the CA, there was enough evidence t

show that the respondents had been guilty of serious misconduct; thus, their dismissal was for a valid cause.22 Th

respondents moved for the reconsideration of the CA’s decision.23 In a resolution24 dated February 23, 2004, thCA denied the respondents’ motion.

On appeal to the Supreme Court (SC) via Rule 45 (docketed as G.R. No. 162447 25 and dated December 27

2006), the SC denied the respondents petition for review on certiorari26 and affirmed the CA’s August 27, 200decision and February 23, 2004 resolution. The respondents did not file any motion for reconsideration t

question the SC’s decision; thus, the decision became final and executory on February 15, 2007. 27

The Labor Arbitration Rulings

Sometime after the SC’s decision in G.R. No. 162447 became final and executory, the respondents filed with LBartolabac a motion for computation and issuance of writ of execution.28 The respondents asserted in this motiothat although the CA’s ruling on the absence of illegal dismissal (as affirmed by the SC) was adverse to themunder the law and settled jurisprudence, they were still entitled to backwages from the time of their dismissal unt

the NLRC’s decision finding them to be illegally dismissed was reversed with finality.29

LA Bartolabac granted the respondents’ motion and, in an order dated November 16, 2007,30 directed Wenphil tpay each complainant their salaries on reinstatement covering the period from February 15, 2002 (the datWenphil last paid the respondents’ respective salaries) to November 8, 2002 (since the NLRC’s decision findinthe respondents illegally dismissed became final and executory on February 28, 2002).

Both parties appealed to the NLRC to question LA Bartolabac’s November 16, 2007 order.31 Wenphil argued thathe respondents were no longer entitled to payment of backwages in view of the compromise agreement theexecuted on October 29, 2001. According to Wenphil, the compromise agreement provided that Wenphil’obligation to pay the respondents’ backwages should cease as soon as LA Bartolabac’s decision was "modifiedamended or reversed" by the NLRC. Since the NLRC modified the LA’s ruling by ordering the payment oseparation pay in lieu of reinstatement, then the respondents, under the terms of the compromise agreemen

were entitled to backwages only up to the finality of the NLRC decision.32

The respondents questioned in their appeal the determined period for the computation of their backwages; theposited that the period for payment should end, not on November 8, 2002, but on February 14, 2007, since th

SC’s decision which upheld the CA’s ruling became final and executory on February 15, 2007.33

The NLRC denied the parties’ respective appeals in its decision dated March 26, 2010 34 and affirmed in toto thLA’s order. Both parties moved for the reconsideration of the NLRC’s decision but the NLRC denied the

respective motions in the resolution of September 15, 2010.35

The CA’s Ruling

In its decision dated August 31, 2012,36 the CA reversed the NLRC rulings and prescribed a different computatioperiod.

The CA ruled that the NLRC committed grave abuse of discretion when it affirmed the LA’s computed period whicwas from February 15, 2002 to November 8, 2002. In arriving at this conclusion, the CA cited the case of Pfizer v



Velasco where this Court ruled that even if the order of reinstatement of the Labor Arbiter is reversed on appeait is obligatory on the part of the employer to reinstate and pay the dismissed employee’s wages during the perio

of appeal until reversal by the higher court.38 The CA construed this "higher court" to be the CA, not the SC.

The CA reasoned out that it was a "higher court" than the NLRC when it reversed the NLRC’s rulings; thus, thperiod for computation should end when it promulgated its decision reversing that of the NLRC, and not on thdate when the SC affirmed its decision.

The CA likewise held that the compromise agreement did not contain any waiver of rights for any award th

respondents might have received when the NLRC changed or modified the LA’s award. 39

The Petition

In its petition for review with this Court, Wenphil maintained that the respondents were no longer entitled tpayment of backwages in view of the modification of the LA’s ruling by the NLRC pursuant with their October 292001 compromise agreement.

Wenphil argued that the CA utterly disregarded the terms of the parties’ compromise agreement whose terms wervery clear; the agreement reads:

3. That for the payroll period from October 16-31 and thereafter, their [respondents] salaries (net of withholdintax, SSS, Philhealth and Pag-ibig) shall be credited every 10th and 25th of the succeeding months through therespective ATM employee’s account until such time that the questioned decision of the Honorable Labor Arbite

Geobel Bartolabac is modified, amended or reversed by the Honorable Labor Relations Commission.40 [emphasours]

It was Wenphil’s assertion that since the NLRC’s decision partly changed the decision of LA Bartolabac bordering payment of separation pay in lieu of reinstatement, the NLRC decision was a "modification" that shouloperate to remove Wenphil’s obligation to pay the respondents’ backwages for the period of the CA’s reversal o

the NLRC’s illegal dismissal ruling.41 According to Wenphil, the words of the compromise agreement left no roo

for interpretation as to the parties’ intentions;42 as a valid agreement between the parties, it must be given effeand respected by the court.

Wenphil also contended that the CA’s cited Pfizer case cannot apply to the present case since there was n

compromise agreement in Pfizer where the dismissed employee waived her entitlement to backwages.43

Finally, Wenphil claimed that the reliefs of reinstatement and backwages are only available to illegally dismisseemployees. A ruling that the respondents were still entitled to reinstatement pay notwithstanding the validity o

their dismissal, would amount to the court’s tolerance of an unjust and equitable situation.44


We resolve to DENY the petition. An order of reinstatement is immediately executory even pending appeal. Themployer has the obligation to reinstate and pay the wages of the dismissed employee during the period of appeuntil reversal by the higher court.

Under Article 223 of the Labor Code, "the decision of the Labor Arbiter reinstating a dismissed or separateemployee, insofar as the reinstatement aspect is concerned, shall immediately be executory, even pendinappeal. The employee shall either be admitted back to work under the same terms and conditions prevailing prioto his dismissal or separation, or at the option of the employer, merely reinstated in the payroll. The posting of bond by the employer shall not stay the execution for reinstatement."

The Court discussed reason behind this legal policy in Aris v. NLRC,45 where it explained:

In authorizing execution pending appeal of the reinstatement aspect of a decision of the Labor Arbiter reinstating dismissed or separated employee, the law itself has laid down a compassionate policy which, once more, vivifieand enhances the provisions of the 1987 Constitution on labor and the working-man. These provisions are thquintessence of the aspirations of the workingman for recognition of his role in the social and economic life of thnation, for the protection of his rights, and the promotion of his welfare… These duties and responsibilities of thState are im osed not so much to ex ress s m ath for the workin man as to forcefull and meanin ful



underscore labor as a primary social and economic force, which the Constitution also expressly affirms with equaintensity. Labor is an indispensable partner for the nation's progress and stability. [emphasis ours]

Since the decision is immediately executory, it is the duty of the employer to comply with the order oreinstatement, which can be done either actually or through payroll reinstatement. As provided under Article 22of the Labor Code, this immediately executory nature of an order of reinstatement is not affected by the existencof an ongoing appeal. The employer has the duty to reinstate the employee in the interim period until a reversal decreed by a higher court or tribunal.

In the case of payroll reinstatement, even if the employer’s appeal turns the tide in its favor, the reinstateemployee has no duty to return or reimburse the salary he received during the period that the lower court otribunal’s governing decision was for the employee’s illegal dismissal.

Otherwise, the situation would run counter to the immediately executory nature of an order of reinstatement. Th

case of Garcia v. Philippine Airlines46 is enlightening on this point:

Even outside the theoretical trappings of the discussion and into the mundane realities of human experience, th"refund doctrine" easily demonstrates how a favorable decision by the Labor Arbiter could harm, more than help, dismissed employee. The employee, to make both ends meet, would necessarily have to use up the salariereceived during the pendency of the appeal, only to end up having to refund the sum in case of a final unfavorabdecision. 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 payroreinstatement and simply find work elsewhere in the interim, if any is available. 1 â w p h i 1 Notably, the option of payroreinstatement belongs to the employer, even if the employee is able and raring to return to work.

We see the situation discussed above to be present in the case before us as Wenphil observed the mandate o Article 223 to immediately comply with the order of reinstatement by the LA. On October 29, 2001, while Wenphilappeal with the NLRC was pending, it entered into a compromise agreement with the respondents. In thagreement, Wenphil committed to reinstate the respondents in its payroll. However, the commitment came with condition: Wenphil stipulated that its obligation to pay the wages due to the respondents would cease if th

decision of the LA would be "modified, amended or reversed" by the NLRC. 47

Thus, when the NLRC rendered its decision on the appeal affirming the LA’s finding that the respondents werillegally dismissed, but modifying the award of reinstatement to payment of separation pay, Wenphil stoppepaying the respondents’ wages.

The reinstatement salaries due to the respondents were, by their nature, payment of unworked backwages. Theswere salaries due to the respondents because they had been prevented from working despite the LA and thNLRC findings that they had been illegally dismissed.

We point out that reinstatement and backwages are two separate reliefs available to an illegally dismisseemployee. The normal consequences of a finding that an employee has been illegally dismissed are: first, that themployee becomes entitled to reinstatement to his former position without loss of seniority rights; and second, th

payment of backwages covers the period running from his illegal dismissal up to his actual reinstatement.48 Thestwo reliefs are not inconsistent with one another and the labor arbiter can award both simultaneously.

Moreover, the relief of separation pay may be granted in lieu of reinstatement but it cannot be a substitute for thpayment of backwages. In instances where reinstatement is no longer feasible because of strained relation

between the employee and the employer, separation pay should be granted. In effect, an illegally dismisse

employee should be entitled to either reinstatement – if viable, or separation pay if reinstatement is no longer bviable, plus backwages in either instance.49 The rationale for such policy of distinction was vividly explained

Santos v. NLRC under these terms:50

Though the grant of reinstatement commonly carries with it an award of backwages, the inappropriateness or nonavailability of one does not carry with it the inappropriateness or non-availability of the other. Separation pay waawarded in favor of petitioner Lydia Santos because the NLRC found that her reinstatement was no longefeasible or appropriate. As the term suggests, separation pay is the amount that an employee receives at the timof his severance from the service and, as correctly noted by the Solicitor General in his Comment, is designed t



prov e e emp oyee w e w erew a ur ng e per o a e s oo ng or ano er emp oymen . n instant case, the grant of separation pay was a substitute for immediate and continued re-employment with thprivate respondent Bank. The grant of separation pay did not redress the injury that is intended to be relieved bthe second remedy of backwages, that is, the loss of earnings that would have accrued to the dismissed employeduring the period between dismissal and reinstatement. Put a little differently, payment of backwages is a form orelief that restores the income that was lost by reason of unlawful dismissal; separation pay, in contrast, is orientetowards the immediate future, the transitional period the dismissed employee must undergo before locating replacement job. It was grievous error amounting to grave abuse of discretion on the part of the NLRC to havconsidered an award of separation pay as equivalent to the aggregate relief constituted by reinstatement plupayment of backwages under Article 280 of the Labor Code. The grant of separation pay was a proper substitutonly for reinstatement; it could not be an adequate substitute both for reinstatement and for backwages. In effecthe NLRC in its assailed decision failed to give to petitioner the full relief to which she was entitled under th

statute. [emphasis ours]

Apparently, when the NLRC changed the LA’s decision (specifically, the order to award separation pay in lieu oreinstatement), Wenphil read this to mean to be the "modification" envisioned in the compromise agreemenWenphil likewise effectively concluded that separation pay and backwages are the same or are interchangeablreliefs. This conclusion can be deduced from Wenphil’s insistence not to pay the respondent’s remaininbackwages under its erroneous reasoning that this was the effect of the NLRC’s order to Wenphil to paseparation pay in lieu of reinstatement.

We emphasize that the basis for the payment of backwages is different from that of the award of separation paySeparation pay is granted where reinstatement is no longer advisable because of strained relations between themployee and the employer. Backwages represent compensation that should have been earned but were nocollected because of the unjust dismissal. The basis for computing separation pay is usually the length of th

employee’s past service, while that for backwages is the actual period when the employee was unlawfullprevented from working.51

Had Wenphil really wanted to put a stop to the running of the period for the payment of the respondentsbackwages, then it should have immediately complied with the NLRC’s order to award the employees theseparation pay in lieu of reinstatement. This action would have immediately severed the employer-employerelationship. However, the records are bereft of any evidence that Wenphil actually paid the respondentsseparation pay. Thus, the employer-employee relationship between Wenphil and the respondents never ceaseand the employment status remained pending and uncertain until the CA actually rendered its decision that threspondents had not been illegally dismissed. In the context of the parties’ agreement, it was only at this point thathe payment of backwages should have stopped.

A compromise agreement should not be contrary to law, morals, good customs and public policy.

While it is true that a compromise agreement is binding between the parties and becomes the law between them,it is also a rule that to be valid, a compromise agreement must not be contrary to law, morals, good customs an

public policy.53

In the present case, the parties’ compromise agreement simply provided that Wenphil’s obligation to pay threspondents’ backwages shall end the moment the NLRC modifies, amends or reverses the illegal dismissdecision of LA Bartolabac. On its face, there is nothing invalid with such stipulation. Indeed, had the NLR

reversed the LA, the obligation to pay backwages would have stopped. The NLRC, however, did not decree reversal of the finding of illegal dismissal. In fact, it affirmed the illegal dismissal conclusion, confining itself merelto a modification of the consequences of the illegal dismissal – from reinstatement to the payment of separatio

pay.

This "modification" of course we cannot accept; the option under the legal policy is solely limited to a ruling that threspondents had not been illegally dismissed. Otherwise, we would be violating the Labor Code’s policy entitlinillegally dismissed employees to their right to backwages even during the period of appeal. As we held in the cas

of Garcia v. Philippine Airlines:54

The Court reaffirms the prevailing principle that even if the order of reinstatement of the Labor Arbiter is reverseon appeal, it is obligatory on the part of the employer to reinstate and pay the wages of the dismissed employeduring the period of appeal until reversal by the higher court. It settles the view that the Labor Arbiter's order o



reinstatement is immediately executory and the employer has to either re-admit them to work under the samterms and conditions prevailing prior to their dismissal, or to reinstate them in the payroll, and that failing texercise the options in the alternative, employer must pay the employee’s salaries. [emphasis ours]

This ruling embodies a principle and policy of the law that cannot be watered down by any lesser agreemenexcept perhaps when backwages are already earned entitlements that the employee chooses to surrender for valuable consideration (and even then, the consideration must at least be equitable). This legal policemphasizes, too, the rule that separation pay cannot be a substitute for backwages but only for reinstatemenThe award of separation pay is not inconsistent with the payment of backwages. Thus, until a higher court’s otribunal’s reversal of the finding that an employee had been illegally dismissed, the employee would be entitled treceive his reinstatement salary or backwages during the period of appeal until such reversal. This is in line witthe Labor Code’s policy that an order of reinstatement, which can either be actual or through the payroll,

immediately executory and is not affected by the period of appeal.

Period for Computation of Backwages

The records show that the inconsistency between the labor arbitration rulings and the CA’s ruling was on thperiod for the computation of such backwages and not on whether the respondents were still entitled to sucbackwages during the period of appeal until the reversal of the finding of illegal dismissal.

According to the LA, whose ruling the NLRC affirmed, the period for computation should be from February 152002 until November 8, 2002 since the NLRC’s decision which affirmed the LA’s finding of illegal dismissal becamfinal and executory on November 8, 2002. The LA started the counting of the period on February 15, 2002 sincthat was the day when Wenphil last paid the respondents’ backwages.

On the other hand, the CA, in setting aside the NLRC’s rulings, relied on the case of Pfizer v. Velasco where wruled that the backwages of the dismissed employee should be granted during the period of appeal until reversaby a higher court. Since the first CA decision which found that the respondents had not been illegally dismissewas promulgated on August 27, 2003, then the reversal by the higher court was effectively made on August 272003.

As against this view, the respondents argued that the period for payment of their backwages should end oFebruary 14, 2007 since the SC decision in G.R. No. 162447 which affirmed the CA’s findings that threspondents had not been legally dismissed became final and executory on February 15, 2007.

Among these views, the commanding one is the rule in Pfizer, which merely echoes the rulings we made in th

cases of Roquero v. Philippine Airlines55 and Garcia v. Philippine Airlines56 that the period for computing thbackwages due to the respondents during the period of appeal should end on the date that a higher cou

reversed the labor arbitration ruling of illegal dismissal. In this case, the higher court which first reversed thNLRC’s ruling was not the SC but rather the CA. In this light, the CA was correct when it found that that the perioof computation should end on August 27, 2003. The date when the SC’s decision became final and executorneed not matter as the rule in Roquero, Garcia and Pfizer merely referred to the date of reversal, not the date othe ultimate finality of such reversal.

As a last minor detail, we do not agree with the CA that the date of computation should start on February 152002. Rather, it should be on February 16, 2002. The respondents themselves admitted in their motion focomputation and issuance of writ of execution that the last date when they were paid their backwages was oFebruary 15, 2002. To start the computation on the same date would result to a duplication of wages for this daythus, computation should start on the following date - February 16, 2002.

WHEREFORE, in light of these considerations, we hereby DENY the petition. The Court of Appeals' decision date August 31, 2012 and resolution dated June 20, 2013, which annulled and set aside the March 26, 2010 decisioand September 15, 2010 resolution of the NLRC, are hereby AFFIRMED with MODIFICATION. The period for thcomputation of backwages of respondents Almer R. Abing and Anabelle M. Tuazon should be from February 162002 until August 27, 2003, when the Court of Appeals promulgated its decision reversing the NLRC' s finding oillegal dismissal. No costs.

SO ORDERED.

ARTURO D. BRION



Associate Justice

WE CONCUR:


Chairperson




Associate Justice



ANTONIO T. CARPIO Associate JusticeChairperson


Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson's Attestation, I certify that thconclusions in the above Decision had been reached in consultation before the case was assigned to the writer othe opinion of the Court's Division.

MARIA LOURDES P. A. SERENOChief Justice

Footnotes

1 Rollo, p. 7-22.

2 Penned by Associate Justice Marina L. Buzon, and concurred in by Associate Justices Mario L. Guariñand Santiago Javier Ranada; id. at 27-41.

3 Id. at 43-45.4 Id. at 171-177.

5 Id. at 188-190.

6 Id. at 148-153.

7 LABOR CODE, article 223.

8 Rollo, pp. 46-67.

9 Id. at 62.

10 Id. at 67.

11 Id. at 9.

12 Id.

13



. - .

14 Id. at 99.

15 Id.

16 Id. at 101-108.

17 Id. at 107.

18 Id. at 10.

19 Id. at 109-110.

20 Id. at note 19.

21 Id. at 111-127.

22 Id. at 118.

23 Id. at note 19.

24 Id. at 125-127.

25 Anabelle Muaje-Tuazon and Almer R. Abing v. Wenphil Corporation, Elizabeth P. Orbita, and the Court o Appeals, G.R. No. 162447, December 27, 2006, 511 SCRA 521.

26 Id. at note 19.

27 Id. at 138.

28 Id. at 139-141; on August 16, 2007.

29 Id. at 140.

30 Id. at 148-153.

31 Id. at 154-170.

32 Id. at 160.33 Id. at p. 168-169.

34 Id. at note 4.

35 Id. at note 5.

36 Id. at note 2.

37 G.R. No. 177467, March 9, 2011, 645 SCRA 135.

38 Id. at 152.

39 Rollo, pp. 39-40.

40 Id. at 99.

41 Id. at 14-15.

42 Id. at 16.

43 Id. at 17.



44 Id. at 19.

45 G.R. No. 90501, August 5, 1991, 200 SCRA 246.


47 Id. at note 15.

48 Santos v. NLRC, G.R. No. 76721, September 21, 1987, 154 SCRA 171.

49 Macasero v. Southern Industrial Gases Philippines, 597 Phil. 494 (2009).

50 Supra note 48, at 172.

51 Golden Ace Builders v. Talde, G.R. No. 187200, May 5, 2010, 620 SCRA 288.

52 Ago v. Court of Appeals, 116 Phil. 841 (1962).

53 Magbanua v. Uy, 497 Phil. 518 (2005).

54 Supra note 46.

55 G.R. No. 152329, 449 Phil. 437 (2003).

56

Supra note 46.






Manila

FIRST DIVISION

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 (SAMAR-ANGLO) represented by itsLocal 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 Appeals1 dismissing the petition rulinthat petitioner was guilty of forum shopping and that the proper remedy was appeal in due course, not certiorari omandamus.

In its decision, the Court of Appeals sustained the trial court's ruling that the remedies granted under Section 17Rule 39 of the Rules of Court are not available to the petitioner because the Manual of Instructions for Sheriffs othe 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 followinactions in connection with its claim that a sheriff of the National Labor Relations Commission "erroneousland 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 41995, 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 49docketed as Civil Case No. 95-75628 on October 6, 1995. The Regional Trial Court dismissed the case oOctober 11, 1995 for lack of merit.

"4. It appealed to the NLRC the order of the Labor Arbiter dated August 13, 1995 which dismissed thappeal 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 wadocketed 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.

"



, ,properties located in the compound and buildings of Artex Development Corporation, which wererroneously levied upon by the sheriff of the NLRC as a consequence of the decision rendered by the sai

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 decision3 dismissing the petition on the ground of forushopping 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.Petitioner argued that the filing of a complaint for accion reinvindicatoria with the Regional Trial Court was propebecause it is a remedy specifically granted to an owner (whose properties were subjected to a writ of execution tenforce 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 Court of Appeals.7

In addition, petitioner argued that the reliefs sought and the issues involved in the complaint for recovery oproperty and damages filed with the Regional Trial Court of Manila, presided over by respondent judge, werentirely distinct and separate from the reliefs sought and the issues involved in the proceedings before the Labo Arbiter and the NLRC. Besides, petitioner pointed out that neither the NLRC nor the Labor Arbiter is empowered tadjudicate 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 shoppingand (2) whether the Court of Appeals erred in dismissing the petitioner's accion reinvindicatoria on the ground olack 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 vexatiocaused the courts and parties-litigant by a party who asks different courts and/or administrative agencies trule on the same on related caused and/or grant the same or substantially the same reliefs, in the procescreating 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 anissues 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 thwrit of execution issued by the labor arbiter could be satisfied against the property of petitioner, not a party to thlabor case.

On the other hand, the accion reinvindicatoria filed by petitioner in the trial court was to recover the properillegally 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 sam

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 forumof seeking another (and possible) opinion in another forum (other than by appeal or the special civil actioof certiorari), or the institution of two (2) or more actions or proceedings grounded on the same cause othe 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 againsa judgment debtor is afforded with several alternative remedies to protect its interests. The third party may avahimself of alternative remedies cumulatively, and one will not preclude the third party from availing himself of thother 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 recoveownership of the property illegally seized by the sheriff. This finds support in Section 17 (now 16), Rule 39Revised Rules of Court, to wit:

"SEC. 17 (now 16). Proceedings where property claimed by third person. - If property claimed by any otheperson than the judgment debtor or his agent, and such person makes an affidavit of his title thereto or rig

to the possession thereof, stating the grounds of such right or title, and serve the same upon the officemaking the levy, and a copy thereof upon the judgment creditor, the officer shall not be bound to keep thproperty, unless such judgment creditor or his agent, on demand of the officer, indemnify the officer againssuch claim by a bond in a sum not greater than the value of the property levied on. In case of disagreemenas to such value, the same shall be determined by the court issuing the writ of execution. 1 â w p h i 1 . n ê t

"The officer is not liable for damages, for the taking or keeping of the property, to any third-party claimanunless a claim is made by the latter and unless an action for damages is brought by him against the officewithin one hundred twenty (120) days from the date of the filing of the bond. But nothing herein containeshall prevent such claimant or any third person from vindicating his claim to the property by any propeaction.

"When the party in whose favor the writ of execution runs, is the Republic of the Philippines, or any officeduly representing it, the filing of such bond shall not be required, and in case the sheriff or levying officer sued for damages as a result of the levy, he shall be represented by the Solicitor General and if held liabtherefor, the actual damages adjudged by the court shall be paid by the National Treasurer out of sucfunds 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 thproperties 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 propertwas seized by a sheriff to answer for the obligation of a judgment debtor may invoke the supervisory powe

of the court which authorized such execution. Upon due application by the third person and after summarhearing, the court may command that the property be released from the mistaken levy and restored to thrightful owner or possession. What said court do in these instances, however, is limited to a determination owhether the sheriff has acted rightful or wrongly in the performance of his duties in the execution o judgment, more specifically, if he has indeed take hold of property not belonging to the judgmendebtor . The court does not and cannot pass upon the question of title to the property, with any character ofinality. It can treat of the matter only insofar as may be necessary to decide if the sheriff has acted correctl

'



.evidence. However, if the claimant's proof do not persuade the court of the validity of his title or right opossession thereto, the claim will be denied.

"Independent of the above-stated recourse, a third-party claimant may also avail of the remedy known a"terceria', provided in Section 17 (now 16), Rule 39, by serving on the officer making the levy an affidavit ohis title and a copy thereof upon the judgment creditor. The officer shall not be bound to keep the propertunless such judgment creditor or his agent, on demand of the officer, indemnifies the officer against succlaim by a bond in a sum not greater than the value of the property levied on. An action for damages mabe 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 claimanmay deem suitable to vindicate 'his claim to the property.' Such a 'proper action' is, obviously, entire

distinct from that explicitly prescribed in Section 17 of Rule 39, which is an action for damages brought by third-party claimant against the officer within one hundred twenty (120) days from the date of the filing of thbond 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 possessioof the property seized by the sheriff, as well as damages resulting from the allegedly wrongful seizure andetention thereof despite the third-party claim; and it may be brought against the sheriff and such otheparties as may be alleged to have colluded with him in the supposedly wrongful execution proceedings, sucas the judgment creditor himself. Such 'proper action', as above pointed out, is and should be an entireseparate and distinct action from that in which execution has issued, if instituted by a stranger to the lattesuit.

"The remedies above mentioned are cumulative and may be resorted to by a third-party claimanindependent of or separately from and without need of availing of the others. If a third-parclaimant opted to file a proper action to vindicate his claim of ownership, he must institute an action, distincand separate from that in which the judgment is being enforced, with the court of competent jurisdictioeven before or without need of filing a claim in the court which issued the writ, the latter not being condition sine qua non for the former. In such proper action, the validity and sufficiency of the title of ththird-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 thpetitioner 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. 1313-85 in favor of Kamapi, the NLRC affirmed the decision. Thereafter, Kamapi obtained a writ of executioagainst the properties of Poly-Plastic Products or Anthony Ching. However, respondent Priscilla Carrera filed third-party claim alleging that Anthony Ching had sold the property to her. Nevertheless, upon posting by th judgment creditor of an indemnity bond, the NLRC Sheriff proceeded with the public auction sale. Consequentlrespondent Carrera filed with Regional Trial Court, Manila an action to recover the levied property and obtained temporary restraining order against Labor Arbiter Diosana and the NLRC Sheriff from issuing a certificate of salover the levied property. Eventually, Labor Arbiter Santos issued an order allowing the execution to proceeagainst the property of Poly-Plastic Products. Also, Labor Arbiter Santos and the NLRC Sheriff filed a motion tdismiss the civil case instituted by respondent Carrera on the ground that the Regional Trial Court did not hav jurisdiction over the labor case. The trial court issued an order enjoining the enforcement of the writ of executio

over the properties claimed by respondent Carrera pending the determination of the validity of the sale made i

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 belonginto 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 oanother court with concurrent or coordinate jurisdiction possessing equal power to grant injunctive relie

-



. 133 SCRA 141 [1984]). When a third-party, or a stranger to the action, asserts a claim over the propertlevied upon, the claimant may vindicate his claim by an independent action in the proper civil court whicmay stop the execution of the judgment on property not belonging to the judgment debtor." (Underscorinours)

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 unlespreceded by a valid levy is void. Therefore, since there was no sufficient levy on the execution in questionthe 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 no

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 thaction, he could not, strictly speaking, appeal from the order denying his claim, but should file a separatreinvindicatory action against the execution creditor or the purchaser of the property after the sale at publ

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 third-party claim habeen presented, but in a separate action to be instituted by the third person. The appeal that should binterposed if the term 'appeal' may properly be employed, is a separate reinvidincatory action against th

execution creditor or the purchaser of the property after the sale at public auction, or complaint for damageto be charged against the bond filed by the judgment creditor in favor of the sheriff. Such reinvindicatoraction is reserved to the third-party claimant."

A separate civil action for recovery of ownership of the property would not constitute interference with the poweor processes of the Arbiter and the NLRC which rendered the judgment to enforce and execute upon the levieproperties. The property levied upon being that of a stranger is not subject to levy. Thus, a separate action forecovery, upon a claim and prima-facie showing of ownership by the petitioner, cannot be considered ainterference.

The Fallo

WHEREFORE, the Court REVERSES the decision of the Court of Appeals and the resolution denyin

reconsideration.19 In lieu thereof, the Court renders judgment ANNULLING the sale on execution of the subjecproperty conducted by NLRC Sheriff Anam Timbayan in favor of respondent SAMAR-ANGLO and the subsequensale of the same to Rodrigo Sy Mendoza. The Court declares the petitioner to be the rightful owner of the propertinvolved and remands the case to the trial court to determine the liability of respondents SAMAR-ANGLO, RodrigSy Mendoza, and WESTERN GUARANTY CORPORATION to pay actual damages that petitioner claimed.

Costs against respondents, except the Court of Appeals. 1 â w p h i 1 . n ê t

SO ORDERED.

Davide, Jr., C.J., Puno, Kapunan, and Ynares-Santiago, JJ., concur.

Footnote

1 In CA-G. R. SP No. 39700, promulgated on March 29, 1996, Petition, Annex "A", Rollo, pp. 65-76. VerzolaJ., ponente, Abad Santos, Jr. and Agcaoili, JJ., concurring.

2 Supra, Note 1, at pp. 67-68.

3 Petition, Annex "A", Rollo, pp. 65-71. Verzola, J., ponente, Abad Santos, Jr. and Agcaoili, JJ., concurring.



4 CA Rollo, pp. 410-438.

5 181 SCRA 378, 382 [1990].

6 199 SCRA 525 [1991].

7 232 SCRA 427, 431-432 [1994].

8 Petition, Annex "B", Rollo, pp. 73-76.

9 Petition, filed on September 27, 1996, Rollo, pp. 4-63. On October 18, 1999, we gave due course to th

petition (Rollo, pp. 724-727).

10 347 Phil. 771 [1997].

11 International Container Terminal Services, Inc. v. Court of Appeals, 319 Phil. 510 [1995].

12 231 SCRA 257 [1994].

13 Section 2, Rule VI of the Manual of Instructions for Sheriffs of the NLRC.

14 Supra, Note 7.

15 Manliquez v. Court of Appeals, 232 SCRA 427 [1994].

16 Supra, Note 8.

17 Bayer Philippines, Inc. v. Agana, 63 SCRA 355 [1975].

18 78 SCRA 425 [1977].

19 In CA-G. R. SP No. 39700.






Manila

FIRST DIVISION

G.R. No. 182915 December 12, 2011

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

EFREMIAoMATIAS, ROSARIO BALUNSAY, ROSALINDA PARUNGAO, ARACELIoRUAZA, REGINA RELOXTEODORA VENTURA, AMELIA PESCADERO, LYDIA DE GUZMAN, HERMINIA HERNANDEZ, OLIVIA ABUAN

CARMEN PORTUGUEZ, LYDIA PENNULAR,oEMERENCIANA WOOD, PRISCILLAoESPINEDA, NANC

FERNANDEZ, EVAo MANDURIAGA, CONSOLACION SERRANO, SIONY CASILLAN, LUZVIMINDA GABUYA

MYRNA TAMIN, EVELYN REYES, EVA AYENG, EDNA YAP, RIZAo DELA CRUZ ZUÑIGA, TRINIDAD RELOXMARLON 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, GINANIANO, GEMMA DELA PEÑA, EFREMIA MATIAS, ROSARIO BALUNSAY, ROSALINDA PARUNGAO, ARACELRUAZA, REGINA RELOX, TEODORA VENTURA, AMELIA PESCADERO, RICHON APARRE, LYDIA DE GUZMANHERMINIA HERNANDEZ, OLIVIA ABUAN, CARMEN PORTUGUEZ, LYDIA PENNULAR, EMERENCIANA WOOD

PRISCILLA ESPINEDA, NANCY FERNANDEZ, EVA MANDURIAGA, CONSOLACION SERRANO, SIONCASILLAN, LUZVIMINDA GABUYA, MYRNA TAMIN, EVELYN REYES, EVA AYENG, EDNA YAP, RIZA DELCRUZ ZUÑIGA, TRINIDAD RELOX, MARLON FALLA, MARICEL OCON, and ELVIRA MACAPAGALRespondents.

D E C I S I O N

DEL CASTILLO, J.:

The issues of labor-only contracting and the acquisition of a labor tribunal of jurisdiction over the person of 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 Resolution1 of the Special Ninth Division of the Court of Appea

(CA) in CA-G.R. SP No. 93204 which reversed and set aside the July 25, 2007 Decision2 of the CA’s First Divisioand ordered the exclusion of Fairland Knitcraft Co., Inc. (Fairland) from the decisions of the labor tribunals. Sa

July 25, 2007 Decision, on the other hand, affirmed the November 30, 2004 Decision3 and August 26, 200

Resolution4 of the National Labor Relations Commission (NLRC) which, in turn, reversed and set aside th

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 CA’s Special Former SpeciEighth Division in CA-G.R. SP No. 93860, which affirmed the aforesaid November 30, 2004 Decision and Augu



26, 2005 Resolution of the NLRC. Likewise assailed is the October 1, 2009 CA Resolution denying the Motion foReconsideration thereto.

Factual Antecedents

Fairland is a domestic corporation engaged in garments business, while Susan de Leon (Susan) is thowner/proprietress of Weesan Garments (Weesan).

On the other hand, the complaining workers (the workers) are sewers, trimmers, helpers, a guard and a secretarwho 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 Peña 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/weekTeodora 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 Jul-99 1,200.00/week

Eve Manduriaga Feb-00 1,000.00/week

Priscila Espineda Nov-00 1,300.00/week

Aracelli Ruaza Mar-00 1,000.00/week

Nancy Fernandez Nov-00 1,400.00/week

Eva Ayeng Nov-00 1,000.00/week

Luzviminda Gabuya Nov-00 1,000.00/week

Liza Dela Cuz Zuñiga Oct-01 1,200.00/week

Vivencia Penullar Jan-00 1,500.00/week

Trinidad Relox Aug-96 1,200.00/week



.

Maricel Ocon 1/15/2001 1,500.00/week8

On December 23, 2002, workers Marialy O. Sy, Vivencia Penullar, Aurora Aguinaldo, Gina Aniano, Gemma de

Peña and Efremia Matias filed with the Arbitration Branch of the NLRC a Complaint9 for underpayment and/or nonpayment of wages, overtime pay, premium pay for holidays, 13th month pay and other monetary benefits againsSusan/Weesan. In January 2003, the rest of the aforementioned workers also filed similar complaints. Eventualall 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 Regio(DOLE-NCR) a report on its temporary closure for a period of not less than six months. As the workers were no

anymore allowed to work on that same day, they filed on February 18, 2003 an Amended Complaint,10

and oMarch 13, 2003, another pleading entitled Amended Complaints and Position Paper for Complainants,11 to includthe charge of illegal dismissal and impleaded Fairland and its manager, Debbie Manduabas (Debbie), aadditional respondents.

A Notice of Hearing12 was thereafter sent to Weesan requesting it to appear before Labor Arbiter Ramon ValentiC. Reyes (Labor Arbiter Reyes) on April 3, 2003, at 10:00 a.m. On said date and time, Atty. Antonio A. Geronim(Atty. Geronimo) appeared as counsel for Weesan and requested for an extension of time to file his client

position paper.13 On the next hearing on April 28, 2003, Atty. Geronimo also entered his appearance for Fairlan

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 fo

Susan/Weesan.16 The Position Paper for Fairland was verified by Debbie while the one for Susan/Weesan wa

verified by Susan. To these pleadings, the workers filed a Reply.17

Atty. Geronimo then filed a Consolidated Reply18 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 bway 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 Decision 2

reads:

WHEREFORE, premises considered, the appealed decision is hereby set aside and the dismissal of complainan

is declared illegal.

Respondents are, therefore, ordered to reinstate complainants to their original or equivalent position with fubackwages with legal interests thereon from February 5, 2003, until actually reinstated and fully paid, witretention of seniority rights and are further ordered to pay solidarily to the complainants the difference of theunderpaid/unpaid wages, unpaid holidays, unpaid 13th month pays and unpaid service incentive leaves with legainterests thereon, to wit:

x x x x



In the event that reinstatement is not possible, respondents are ordered to pay solidarily to complainants therespective separation pays computed as follows:

x x x x

Respondents are likewise ordered to pay ten (10%) percent of the gross award as and by way of attorney’s fees.

SO ORDERED.24

Hence, Atty. Geronimo filed a Motion for Reconsideration.25 However, Fairland filed another Motion fo

Reconsideration26 through Atty. Melina O. Tecson (Atty. Tecson) assailing the jurisdiction of the Labor Arbiter anthe NLRC over it, claiming that it was never summoned to appear, attend or participate in all the proceedingconducted 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 CA-G.R. SP No93204 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 CA’s First Division denied Fairland’s petition.28 It affirmed the NLRC’s ruling that the workerwere illegally dismissed and that Weesan and Fairland are solidarily liable to them as labor-only contractor anprincipal, respectively.

Fairland filed its Motion for Reconsideration29 as well as a Motion for Voluntary Inhibition30 of Associate JusticeCelia C. Librea-Leagogo and Regalado E. Maambong from handling the case. As the Motion for Voluntar

Inhibition was granted through a Resolution31 dated November 8, 2007, the case was transferred to the CA

Special Ninth Division for resolution of Fairland’s Motion for Reconsideration.32

On May 9, 2008, the CA’s Special Ninth Division reversed33 the First Division’s ruling. It held that the labotribunals did not acquire jurisdiction over the person of Fairland, and even assuming they did, Fairland is not liabto the workers since Weesan is not a mere labor-only contractor but a bona fide independent contractor. ThSpecial Ninth Division thus annulled and set aside the assailed NLRC Decision and Resolution insofar as Fairlanis 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 odiscretion 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 Augus26, 2005, respectively, are hereby ANNULLED and SET ASIDE insofar as [it] concerns the petitioner FairlanKnitcraft 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 Susan’s petition, the CA Special Ninth Division issued on May 11, 2006 a Resolution35 temporarirestraining the NLRC from enforcing its assailed November 30, 2004 Decision and thereafter the CA Speci

Eighth Division issued a writ of preliminary prohibitory injunction.36 On July 20, 2009, the Special Former Speci

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 accordingDISMISSED for lack of merit. The Decision dated November 30, 2004 and Resolution dated Au ust 26, 2005 of th



National Labor Relations Commission (NLRC) in CA No. 039375-04 (NLRC NCR 00-12-11294-02, 00-01-0002703, 00-01-00131-03, 00-01-00820-03 and 00-01-01249-03) are hereby AFFIRMED and UPHELD.

The writ of preliminary prohibitory injunction issued by this Court on July 13, 2006 is hereby LIFTED and SE 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 wadenied in this Court’s December 16, 2009 Resolution41 on technicality and for failure to sufficiently show anreversible error in the assailed judgment.

Susan and Fairland filed their respective Motions for Reconsideration.42 But before said motions could b

resolved, the Court ordered the consolidation of Susan’s petition with that of the workers.43

Susan’s Motion for Reconsideration of this Court’s December 16, 2009 Resolution in G.R No. 189658 is grantedConsequently, her Petition for Review on Certiorari is reinstated.

With Susan and Fairland’s respective Motions for Reconsideration still unresolved, this Court shall first addresthem.

One of the grounds for the denial of Susan’s petition was her failure to indicate the date of filing her Motion fo

Reconsideration with the CA as required under Section 4(b),44 Rule 45 of the Rules of Court. However, "failure tcomply with the rule on a statement of material [date] in the petition may be excused [if] the [date is] evident fro

the records."45 In the case of Susan, records show that she received the copy of the Decision of the CA on Jul24, 2009. She then timely filed her Motion for Reconsideration via registered mail on August 7, 2009 as shown b

the envelope46 with stamped receipt of the Batangas City Post Office bearing the date August 7, 2009. The fact o

such filing was also stated in the Motion for Extension of Time to File Petition for Review47 that she filed before thCourt which forms part of the records of this case. Hence, it is clear that Susan seasonably filed her Motion foReconsideration.

Moreover, while we note that Susan’s petition was also denied on the ground of no reversible error committed b

the CA, we deem it proper, in the interest of justice, to take a second look on the merits of Susan’s petition anreinstate G.R. No. 189658. This is also to harmonize our ruling in these consolidated petitions and avoid confusiothat may arise in their execution. Hence, we grant Susan’s Motion for Reconsideration and consequently, reinstather Petition for Review on Certiorari.

As to Fairland’s Motion for Reconsideration, we shall treat the same as its comment to Susan’s petition, Fairlanbeing 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 orespondent Fairland.

II.

The Court of Appeals erred in finding that the individual private respondents were illegally dismissed.

III.



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 oFairland because the latter voluntarily appeared and actively participated in the proceedings below when Att

Geronimo submitted on its behalf a Position Paper verified by its manager, Debbie. As manager, Debbie knew oall the material and significant events which transpired in Fairland since she had constant contact with the peopin the day-to-day operations of the company. Thus, the workers maintain that the Labor Arbiter and the NLRCacquired jurisdiction over the person of Fairland and the Decisions rendered by the said tribunals are valid anbinding upon it.

Lastly, the workers aver that Fairland is solidarily liable with Susan/ Weesan because it was shown that the lattewas indeed the sewing arm of the former and is a mere "labor-only contractor".

Fairland’s Arguments

In gist, Fairland contests the labor tribunals’ acquisition of jurisdiction over its person either through service osummons or voluntary appearance. It denies that it engaged the services of Atty. Geronimo and asserts that it ha

its own legal counsel, Atty. Tecson, who would have represented it had it known of the pendency of the complainagainst Fairland.

Fairland likewise emphasizes that when it filed its Motion for Reconsideration with the NLRC, it made an expresreservation that the same was without prejudice to its right to question the jurisdiction over its person and thbinding effect of the assailed decision. In the absence, therefore, of a valid service of summons or voluntarappearance, the proceedings conducted and the judgment rendered by the labor tribunals are null and void aagainst 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 workerto 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 thform 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 t

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 anthat they performed activities which are directly related to Fairland’s principal business of garments. What must bdetermined is whether Susan/Weesan has substantial capital or investment in the form of tools, equipmenmachineries, work premises, among others.

We have examined the records but found nothing therein to show that Weesan has investment in the form of toolsequipment or machineries. The records show that Fairland has to furnish Weesan with sewing machines for it t

be able to provide the sewing needs of the former.56 Also, save for the Balance Sheets57 purportedly submitteby Weesan to the Bureau of Internal Revenue (BIR) indicating its fixed assets (factory equipment) in the amount o



P243,000.00, Weesan was unable to show that apart from the borrowed sewing machines, it owned anpossessed any other tools, equipment, and machineries necessary to its being a contractor or sub-contractor fogarments. 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. A

may be recalled, the workers emphasized in their Appeal Memorandum58 filed with the NLRC that Susan/Weesawas a labor-only contractor and that Fairland was its principal. To buttress this, they alleged that the worpremises utilized by Weesan is owned by Fairland, which significantly, was not in the business of rentinproperties. They also advanced that there was no showing that Susan/Weesan paid any rentals for the use of thpremises. They contended that all that Susan had was a Mayor’s 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, AttyGeronimo. But when Susan’s petition for certiorari was given due course by the CA, she finally had the chance tanswer the same by denying that Fairland owned the work premises. Susan instead claimed that Weesan rente

the premises from another entity, De Luxe. To support this, she attached to her petition two Contracts of Lease5

purportedly entered into by her and De Luxe for the lease of the premises covering the periods August 1, 1997 tJuly 31, 2000 and January 1, 2001 to December 31, 2004.

On the other hand, the workers in their Comment60 filed in CA-G.R. SP No. 93204 (Fairland’s petition for certiora

before the CA), pointed out that in Fairland’s Amended Articles of Incorporation,61 five out of the seveincorporators listed therein appeared to be residents of the same 715 Ricafort St., Tondo, Manila. To the workersthis is a clear indication that Fairland indeed owned Weesan’s work premises. Fairland, for its part, tried to expla

this by saying that its incorporators, just like Weesan, were also mere lessees of a portion of the multi-storebuilding owned by De Luxe located at 715 Ricafort St., Tondo, Manila. It also claimed that two years prior t

Weesan’s 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 CA’s Special Former Special EightDivision 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 purporteContract of Lease with another entity, De Luxe Shirt Factory Co., Inc. Howeve r, there is no competent proof paid the supposed rentals to said ‘owner’. Curiously, under the item ‘Rent Expenses’ in its auditefinancial statement, only equipment rental was listed therein without any disbursement/expense forental of factory premises, which only buttressed the claim of private respondents that the place where the

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 thentry "Rent Expenses" in its financial statement, the rent for the factory premises is already deemed includetherein since the contracts of lease she entered into with De Luxe referred to both the factory premises anmachineries.

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 71Ricafort St., Tondo, Manila. Only incidental thereto is the inclusion therein of the equipment found in sa

premises. Hence, we cannot see why the rentals for the work premises, for which Susan even went to the extent oexecuting a contract with the purported lessor, was not included in the entry for rent expenses in Weesanfinancial statement. Even if we are to concede to Susan’s claim that the entry for rent expenses already includethe rentals for the work premises, we wonder why the rental expenses for the year 2000 which was P396,000.00 iof the same amount with the rental expenses for the year 2001. As borne out by the Contract of Lease coverin

the period August 1, 1997 to July 31, 2000, the monthly rent for the work premises was pegged at P25,000.00.6

However, in January to December 2001, same was increased to P27,500.00.65 There being an increase in threntals for the work premises, how come that Weesan’s rental expenses for the year 2001 is still P396,000.00This could only mean that said entry really only refers to the rentals of sewing machines and does not include th



rentals for the work premises. Moreover, we note that Susan could have just simply submitted receipts for hepayments 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 he

petition the following: (1) a plain copy of Transfer Certificate of Title (TCT) No. 13979066 and Declaration of Re

Property67 both under the name of De Luxe; and, (2) Real Property Tax receipts issued to De Luxe for the year

2000-2004.68 However, the Court finds these documents wanting. Nowhere from the said TCT and Declaration oReal Property can it be inferred that the property they refer to is the same property as that located at 715 RicafoSt., Tondo, Manila. Although in said Declaration, 715 Ricafort St., Tondo is the indicated address of the declaran(De Luxe), the address of the property declared is merely "Ricafort, Tondo I-A". The same thing can also be sawith regard to the real property tax receipts. The entry under the box Location of Property in the receipt for 2001

"I - 718 Ricafort" and in the receipts for 2002, 2003, and 2004, the entries are either "I – Ricafort St., Tondo" omerely "I-Ricafort St."

In sum, the Court finds that Susan’s effort to negate Fairland’s ownership of the work premises is futile. The logicaconclusion now is that Weesan does not have its own workplace and is only utilizing the workplace of Fairland twhom 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 contracto

overcomes the burden of proving that it has substantial capital, investment, tools and the like."69 ASusan/Weesan was not able to adduce evidence that Weesan had any substantial capital, investment or assets t

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 dismissa

To negate illegal dismissal, Susan relies on the due closure of Weesan pursuant to the Establishment TerminatioReport it submitted to the DOLE-NCR.

Indeed, Article 28371 of the Labor Code allows as a mode of termination of employment the closure or terminatioof business. "Closure or cessation of business is the complete or partial cessation of the operations and/or shudown of the establishment of the employer. It is carried out to either stave off the financial ruin or promote th

business interest of the employer."72 "The decision to close business [or to temporarily suspend operation] is management prerogative exclusive to the employer, the exercise of which no court or tribunal can meddle withexcept only when the employer fails to prove compliance with the requirements of Art. 283, to wit: a) that thclosure/cessation of business is bona fide, i.e., its purpose is to advance the interest of the employer and not tdefeat or circumvent the rights of employees under the law or a valid agreement ; b) that written notice was serve

on the employees and the DOLE at least one month before the intended date of closure or cessation of businessand c) in case of closure/cessation of business not due to financial losses, that the employees affected have beegiven separation pay equivalent to ½ month pay for every year of service or one month pay, whichever

higher."73

Here, Weesan filed its Establishment Termination Report74 allegedly due to serious business losses and otheeconomic reasons. However, we are mindful of the doubtful character of Weesan’s application for closure givethe circumstances surrounding the same.

First, workers Marialy Sy, Vivencia Penullar, Aurora Aguinaldo, Gina Aniano, Gemma Dela Peña and EfremMatias filed before the Labor Arbiter their complaint for underpayment of salary, non-payment of benefits

damages and attorney’s fees against Weesan on December 23, 2002.75 Summons76 was accordingly issued an

same was received by Susan on January 15, 2003.77 Meanwhile, other workers followed suit and filed the

respective complaints on January 2, 6, 17 and 28, 2003.78 Shortly thereafter or merely eight days after the filing othe 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 TerminatioReport, although bearing the stamped receipt of the Revenue District Office where they were purportedly filedcontain no signature or initials of the receiving officer. The same holds true with Weesan’s audited financi

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 thintended date of closure of business, as required under Art. 283 of the Labor Code. In fact, the workers allegethat when Weesan filed its Establishment Termination Report on February 5, 2003, it already closed the worpremises 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 th

employer."82 Clearly here, Susan/Weesan was not able to discharge this burden. The documents Weesasubmitted to support its claim of severe business losses cannot be considered as proof of financial crisis to justifthe temporary suspension of its operations since they clearly appear to have not been duly filed with the BIRWeesan failed to satisfactorily explain why the Income Tax Returns and financial statements it submitted do no

bear the signature of the receiving officers. Also hard to ignore is the absence of the mandatory 30-day prionotice to the workers.

Hence, the Court finds that Susan failed to prove that the suspension of operations of Weesan was bona fide anthat it complied with the mandatory requirement of notice under the law. Susan likewise failed to discharge heburden of proving that the termination of the workers was for a lawful cause. Therefore, the NLRC and the CA, 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 beforthe 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 processThe rule on substitution was crafted to protect every party's right to due process. It was designed to ensure thathe deceased party would continue to be properly represented in the suit through his heirs or the duly appointelegal representative of his estate. Moreover, non-compliance with the Rules results in the denial of the right to duprocess for the heirs who, though not duly notified of the proceedings, would be substantially affected by thdecision rendered therein. Thus, it is only when there is a denial of due process, as when the deceased is norepresented by any legal representative or heir, that the court nullifies the trial proceedings and the resultin judgment therein.

Here, the lack of formal substitution of the deceased worker Richon did not result to denial of due process as taffect the validity of the proceedings before the NLRC since his heir, Luzvilla, was aware of the proceedingtherein. In fact, she is considered to have voluntarily appeared before the said tribunal when she signed thworkers’ Memorandum of Appeal filed therewith. "This Court has ruled that formal substitution of parties is nonecessary when the heirs themselves voluntarily appeared, participated, and presented evidence during th

proceedings."85 Hence, the NLRC did not err in giving due course to the appeal with respect to Richon.

Fairland’s 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 3workers-complainants. According to Fairland, these six workers were the only ones who were in the employ oWeesan at the time Fairland and Weesan had existing contractual relationship in 1996 to 1997. But then, Fairlan

contends that the claims of these six workers have already been barred by prescription as they filed thecomplaint more than four years from the expiration of the alleged contractual relationship in 1997. However, thCourt notes that the records are bereft of anything that provides for such alleged contractual relationship and thperiod covered by it. Absent anything to support Fairland’s claim, same deserves scant consideration.

Interestingly, we noticed Fairland’s letter 86 dated January 31, 2003 informing Weesan that it would temporarily nobe availing of the latter’s sewing services and at the same time requesting for the return of the sewing machines lent to Weesan. Assuming said letter to be true, why was Fairland terminating Weesan’s services only on Janua31, 2003 when it is now claiming that its contractual relationship with the latter only lasted until 1997? Thus, w



.

G.R. No. 182915

"It is basic that the Labor Arbiter cannot acquire jurisdiction over the person of the respondent without the latte

being served with summons."87 However, "if there is no valid service of summons, the court can still acquir

jurisdiction over the person of the defendant by virtue of the latter’s voluntary appearance."88

Although not served with summons, jurisdiction over Fairland and Debbie was acquired through their voluntarappearance.

It can be recalled that the workers’ original complaints for non-payment/ underpayment of wages and benefits wer

only against Susan/Weesan. For these complaints, the Labor Arbiter issued summons89

to Susan/Weesan whicwas received by the latter on January 15, 2003.90 The workers thereafter amended their then alreadconsolidated complaints to include illegal dismissal as an additional cause of action as well as Fairland and Debbias additional respondents. We have, however, scanned the records but found nothing to indicate that summonwith respect to the said amended complaints was ever served upon Weesan, Susan, or Fairland. True to theclaim, 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 submthemselves to its jurisdiction?

Fairland argued before the CA that it did not engage Atty. Geronimo as its counsel. However, the Court held i

Santos v. National Labor Relations Commission,91 viz :

In the instant petition for certiorari , petitioner Santos reiterates that he should not have been adjudged personalliable by public respondents, the latter not having validly acquired jurisdiction over his person whether by personservice of summons or by substituted service under Rule 19 of the Rules of Court.

Petitioner’s contention is unacceptable. The fact that Atty. Romeo B. Perez has been able to timely ask for deferment of the initial hearing on 14 November 1986, coupled with his subsequent active participation in th

proceedings, should disprove the supposed want of service of legal processes. Although as a rule, modes oservice of summons are strictly followed in order that the court may acquire jurisdiction over the person of defendant, such procedural modes, however, are liberally construed in quasi-judicial proceedings, substanticompliance with the same being considered adequate. Moreover, jurisdiction over the person of the defendant civil cases is acquired not only by service of summons but also by voluntary appearance in court and submissioto its authority. ‘Appearance’ by a legal advocate is such ‘voluntary submission to a court’s jurisdiction’. It may b

made not only by actual physical appearance but likewise by the submission of pleadings in compliance with thorder 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 thSolicitor General, the Court likewise considers it unlikely that Atty. Perez would have been so irresponsible as trepresent petitioner if he were not, in fact, authorized. Atty. Perez is an officer of the court, and he must bpresumed to have acted with due propriety. The employment of a counsel or the authority to employ an attorney, might be pointed out, need not be proved in writing; such fact could [be] inferred from circumstantial evidence. x

x92 (Citations omitted.)

From the records, it appears that Atty. Geronimo first entered his appearance on behalf of Susan/Weesan in th

hearing held on April 3, 2003.93 Being then newly hired, he requested for an extension of time within which to file

position paper for said respondents. On the next scheduled hearing on April 28, 2003, Atty. Geronimo agaiasked for another extension to file a position paper for all the respondents considering that he likewise entered h

appearance for Fairland.94 Thereafter, said counsel filed pleadings such as Respondents’ Position Paper 95 an

Respondents’ Consolidated Reply96 on behalf of all the respondents namely, Susan/Weesan, Fairland anDebbie. The fact that Atty. Geronimo entered his appearance for Fairland and Debbie and that he activeldefended them before the Labor Arbiter raised the presumption that he is authorized to appear for them. As helin Santos, it is unlikely that Atty. Geronimo would have been so irresponsible as to represent Fairland and Debbiif he were not in fact authorized. As an officer of the Court, Atty. Geronimo is presumed to have acted with dupropriety. Moreover, "[i]t strains credulity that a counsel who has no personal interest in the case would fight fo



concerned."97

We do not agree with the reasons relied upon by the CA’s Special Ninth Division in its May 9, 2008 Resolution CA-G.R. No. 93204 when it ruled that Fairland, through Atty. Geronimo, did not voluntarily submit itself to thLabor Arbiter’s jurisdiction.

In so ruling, the CA noted that Atty. Geronimo has no prior authorization from the board of directors of Fairland thandle the case. Also, the alleged verification signed by Debbie, who is not one of Fairland’s duly authorizedirectors or officers, is defective as no board resolution or secretary’s certificate authorizing her to sign the samwas attached thereto. Because of these, the Special Ninth Division held that the Labor Arbiter committed gravabuse of discretion in not requiring Atty. Geronimo to show his proof of authority to represent Fairland considerin

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

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 ancause in which he appears, and no written power of attorney is required to authorize him to appear in court for hiclient, but the presiding judge may, on motion of either party and reasonable grounds therefor being shownrequire any attorney who assumes the right to appear in a case to produce or prove the authority under which happears, and to disclose whenever pertinent to any issue, the name of the person who employed him, and mathereupon make such order as justice requires. An attorney willfully appearing in court for a person without bein

employed, unless by leave of the court, may be punished for contempt as an officer of the court who hamisbehaved 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 athat time, states in part:

SECTION 8. APPEARANCES. - An attorney appearing for a party is presumed to be properly authorized for thapurpose. 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 bounby the latter one, the NLRC Rules of Procedure being specifically applicable to labor cases. As Atty. Geronimconsistently indicated his PTR and IBP numbers in the pleadings he filed, there is no reason for the Labor Arbite

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 requir Atty. Geronimo to prove his authority under said provision since there was no motion to that effect from eitheparty showing reasonable grounds therefor. Moreover, the fact that Debbie signed the verification attached to thposition paper filed by Atty. Geronimo, without a secretary’s certificate or board resolution attached thereto, is nosufficient reason for the Labor Arbiter to be on his guard and require Atty. Geronimo to prove his authorityDebbie, as General Manager of Fairland is one of the officials of the company who can sign the verification withouneed 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 former’s claim ounauthorized appearance, we hold that same is not sufficient to overcome the presumption of authority. Sucmere filing is not proof of Atty. Geronimo’s alleged unauthorized appearance. Suffice it to say that an attorney’

presumption of authority is a strong one.101 "A mere denial by a party that he authorized an attorney to appear fohim, in the absence of a compelling reason, is insufficient to overcome the presumption, especially when the denia

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 likewisemphasized that in labor cases, both the party and his counsel must be duly served their separate copies of th



or er, ec s on or reso u on un e n or nary procee ngs w ere no ce o counse s eeme no ce o e parIt 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 anRegional Director, the Commission or any Labor Arbiter, or med-arbiter or voluntary arbitrator may, motu proprior on motion of any interested party, issue a writ of execution on a judgment within five (5) years from the date becomes final and executory, requiring a sheriff or a duly deputized officer to execute or enforce final decisionsorders or awards of the Secretary of Labor and Employment or [R]egional Director, the Commission, the Labo Arbiter or Med-Arbiter, or Voluntary Arbitrators. In any case, it shall be the duty of the responsible officer tseparately furnish immediately the counsels of record and the parties with copies of said decisionorders or awards. Failure to comply with the duty prescribed herein shall subject such responsible officer t

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 th August 26, 2005 NLRC Resolution denying the motions for reconsideration of its November 30, 2004 Decisiosaid Decision cannot be enforced against Fairland. The CA likewise concluded that because of this, saNovember 30, 2004 Decision which held Susan/Weesan and Fairland solidarily liable to the workers, has noattained finality.

We cannot agree. In Ginete v. Sunrise Manning Agency 105 we held that:

The case of PNOC Dockyard and Engineering Corporation vs. NLRC cited by petitioner enunciated that ‘in labocases, both the party and its counsel must be duly served their separate copies of the order, decision oresolution; unlike in ordinary judicial proceedings where notice to counsel is deemed notice to the partyReference was made therein to Article 224 of the Labor Code. But, as correctly pointed out by private responden

in its Comment to the petition, Article 224 of the Labor Code does not govern the procedure for filing a petition focertiorari with the Court of Appeals from the decision of the NLRC but rather, it refers to the execution of ‘findecisions, orders or awards’ and requires the sheriff or a duly deputized officer to furnish both the parties antheir counsel with copies of the decision or award for that purpose. There is no reference, express or implied, tthe period to appeal or to file a petition for certiorari as indeed the caption is ‘execution of decisions, orders oawards’. Taken in proper context, Article 224 contemplates the furnishing of copies of ‘final decisions, orders oawards’ and could not have been intended to refer to the period for computing the period for appeal to the Couof Appeals from a non-final judgment or order. The period or manner of ‘appeal’ from the NLRC to the Court o Appeals is governed by Rule 65 pursuant to the ruling of the Court in the case of St. Martin Funeral Homes vNLRC. Section 4 of Rule 65, as amended, states that the ‘petition may be filed not later than sixty (60) days fromnotice 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 thpurposes of computing the period of appeal, the same shall be counted from receipt of such decisions, awards oorders by the counsel of record.’ Although this rule explicitly contemplates an appeal before the Labor Arbiter anthe NLRC, we do not see any cogent reason why the same rule should not apply to petitions for certiorari filed witthe Court of Appeals from decisions of the NLRC. This procedure is in line with the established rule thanotice to counsel is notice to party and when a party is represented by counsel, notices should bmade upon the counsel of record at his given address to which notices of all kinds emanating from thcourt should be sent. It is to be noted also that Section 7 of the NLRC Rules of Procedure providethat ‘(A)ttorneys and other representatives of parties shall have authority to bind their clients in amatters of procedure’’ a provision which is similar to Section 23, Rule 138 of the Rules of Court. Morimportantly, Section 2, Rule 13 of the 1997 Rules of Civil Procedure analogously provides that if anparty 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 partieand their counsel in connection with the execution of such final decisions, orders or awards. However, for thpurpose of computing the period for filing an appeal from the NLRC to the CA, same shall be counted from receipof the decision, order or award by the counsel of record pursuant to the established rule that notice to counsel notice to party. And since the period for filing of an appeal is reckoned from the counsel’s receipt of the decisionorder or award, it necessarily follows that the reckoning period for their finality is likewise the counsel’s date oreceipt thereof, if a party is represented by counsel. Hence, the date of receipt referred to in Sec. 14, Rule VII o



e en n orce ew u es o roce ure o e w c prov es a ec s ons, reso u ons or or ers othe NLRC shall become executory after 10 calendar days from receipt of the same, refers to the date of receipt bcounsel. Thus contrary to the CA’s conclusion, the said NLRC Decision became final, as to Fairland, 10 calenda

days after Atty. Tecson’s receipt107 thereof.108 In sum, we hold that the Labor Arbiter had validly acquire jurisdiction over Fairland and its manager, Debbie, through the appearance of Atty. Geronimo as their counsand likewise, through the latter’s filing of pleadings on their behalf.

Fairland is Weesan’s principal.

In addition to our discussion in G.R. No. 189658 with respect to the finding that Susan/Weesan is a mere laboonly contractor which we find to be likewise significant here, a careful examination of the records reveals othetelling facts that Fairland is Susan/Weesan’s principal, to wit: (1) aside from sewing machines, Fairland also len

Weesan other equipment such as fire extinguishers, office tables and chairs, and plastic chairs; 109 (2) no prooevidencing the contractual arrangement between Weesan and Fairland was ever submitted by Fairland; (3) whilboth Weesan and Fairland assert that the former had other clients aside from the latter, no proof of Weesan’contractual relationship with its other alleged client is extant on the records; and (4) there is no showing that any othe workers were assigned to other clients aside from Fairland. Moreover, as found by the NLRC and affirmed bboth the Special Former Special Eighth Division in CA-G.R. SP No. 93860 and the First Division in CA-G.R. SP No93204, the activities, the manner of work and the movement of the workers were subject to Fairland’s control. bears emphasizing that "factual findings of quasi-judicial agencies like the NLRC, when affirmed by the Court o

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 labor-only contractor, fothe rightful claims of the employees. Under this set-up, Susan/Weesan, as the "labor-only" contractor, is deemean agent of the principal, Fairland, and the law makes the principal responsible to the employees of the "labo

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 202009 and Resolution dated October 1, 2009 of the Special Former Special Eighth Division of the Court o 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 92008 of the Special Ninth Division of the Court of Appeals in CA-G.R. No. 93204 is hereby REVERSED an

SET ASIDE and the Decision dated July 25, 2007 of the First Division of the Court of Appeals REINSTATED and AFFIRMED.

SO ORDERED.


WE CONCUR:

RENATO C. CORONAChief JusticeChairperson


ARTURO D. BRION*

Associate Justice

ESTELA M. PERLAS-BERNABE*

Associate Justice




ursuan o ec on , r c e o e ons u on, s ere y cer e a e conc us ons n e a ovDecision had been reached in consultation before the case was assigned to the writer of the opinion of the CourtDivision.


Footnotes

o Also spelled as Anano, Eufemia, Aracelli, Penullar, Priscila, Eve and Liza in some parts of the records.

* Designated as additional member per raffle dated October 10, 2011.

1 CA rollo (CA-G.R. SP No. 93204), pp. 1093-1109; penned by Associate Justice Bienvenido L. Reyes (noa member of this Court) and concurred in by Associate Justices Vicente Q. Roxas and Pampio A. Abarintos

2 Id. at 819-844; penned by Associate Justice Celia C. Librea-Leagogo and concurred in by then PresidinJustice Ruben T. Reyes (later to become a member of this Court) and Associate Justice Regalado E

Maambong.

3 Records, Vol. 1, pp. 231-255; penned by Presiding Commissioner Raul T. Aquino and concurred in bCommissioners Victoriano R. Calaycay and Angelita A. Gacutan.

4 Id. at 281-282.

5 Id. at 115-120.

6 CA rollo (CA-G.R. SP No. 93860), pp. 802-823; penned by Associate Justice Martin S. Villarama, Jr. (noa Member of this Court) and concurred in by Associate Justices Arturo G. Tayag and Ramon M. Bato, Jr.

7 Id. at 879.

8 Records, Vol. I, p. 30.

9 Id. at 2.

10 Id. at 25-28.

11 Id. at 29-35.

12 Id. at 38.

13 See Constancia for the April 3, 2003 hearing, id. at 43.

14 Id. at 44.

15 Id. at 45-48.

16 Id. at 52-56.

17 Id. at 97-100.

18 Id. at 105-108.



. a .

20 Id. at 111-112.

21 Supra note 5.

22 Records, Vol. I, p.120.

23 Supra note 3.

24 Records, Vol. I, pp. 249-254.

25 Id. at 259-261.

26 Id. at 261A-274.

27 Supra note 4.

28 Supra note 2.

29 CA rollo (CA-G.R. SP No. 93204), pp. 954-988.

30 Id. at 989-992.

31 Id. at 1037-1045; penned by Associate Justices Regalado E. Maambong and Celia C. Librea-Leagogo.

32 Upon the inhibition of Justices Leagogo ( ponente) and Maambong, the case was re-raffled to JusticMonina Arevalo-Zenarosa as new ponente on November 14, 2007. The case was again re-raffled oJanuary 16, 2008 to Justice Bienvenido L. Reyes ( ponente) and the members of his Division. See rolcover of CA-G.R. SP No. 93204.

33 Supra note 1.

34 CA rollo (CA-G.R. SP No. 93204), p. 1109.

35 CA rollo (CA-G.R. SP No. 93860), pp. 730-737; penned by Associate Justice Lucas P. Bersamin (now

Member of this Court) and concurred in by Associate Justices Renato C. Dacudao and Mariflor PunzalaCastillo.

36 See Resolution dated July 13, 2006, id. at 789-798; penned by Associate Justice Lucas P. Bersam(now a member of this Court) and concurred in by Associate Justices Martin S. Villarama, Jr. (now a membeof this Court) and Ramon M. Bato, Jr.

37 Supra note 6.

38 CA rollo (CA-G.R. SP No. 93860), p. 823.

39 See Susan’s Motion for Reconsideration, id. at 855-862.

40 Supra note 7.

41 Rollo (G.R. No. 189658), pp. 455-456.

42 See Susan’s Motion for Reconsideration, id. at 529-537 and Fairland’s Motion for Reconsideration, id. a459-509.

43 Rollo G.R. No. 182915 , . 597.



68 Id. at 445-449.

69 7K Corporation v. National Labor Relations Commission, G.R. No. 148490, November 22, 2006, 50SCRA 509, 523.

70 Id.

71 Art. 283. Closure of establishment and reduction of personnel . — The employer may also terminate themployment of any employee due to the installation of labor saving devices, redundancy, retrenchment tprevent losses or the closing or cessation of operation of the establishment or undertaking unles

the closing is for the purpose of circumventing the provisions of this Title, by serving a written notice on thworkers and the Ministry of Labor and Employment at least one (1) month before the intended date thereoIn case of termination due to the installation of labor saving devices or redundancy, the worker affectethereby shall be entitled to a separation pay equivalent to at least his one (1) month pay or to at least on(1) month pay for every year of service, whichever is higher. In case of retrenchment to prevent losses anin cases of closures or cessation of operations of establishment or undertaking not due to serious busineslosses or financial reverses, the separation pay shall be equivalent to one (1) month pay or at least one-ha(1/2) month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall bconsidered one (1) whole year.

72 Eastridge Golf Club, Inc. vs. Eastridge Golf Club Inc., Labor Union-Super , G.R. No. 166760, August 222008, 563 SCRA 93, 105.

73 Id. at 106-107.


75 Id. at 1.

76 Id. at 5.

77 See the Return Card attached to the Summons, id.

78 Id. at 9, 13, 19 and 24.

79 Id. at 58-60.

80 Id. at 62-63, 65-66 and 68-69.

81 Id. at 25.

82 San Pedro Hospital of Digos, Inc. v. Sec. of Labor , 331 Phil. 390, 406 (1996).

83 G.R. No. 175910, July 30, 2009, 594 SCRA 410, 428-429.

84 Section 16. Death of party; duty of counsel. – Whenever a party to a pending action dies, and the claim

is not thereby extinguished, it shall be the duty of his counsel to inform the court within thirty (30) days aftesuch death of the fact thereof, and to give the name and address of his legal representatives. Failure ocounsel to comply with this duty shall be a ground for disciplinary action.

The heirs of the deceased may be allowed to be substituted for the deceased, without requiring thappointment of an executor or administrator and the court may appoint a guardian ad litem for thminor heirs.

The court shall forthwith order said legal representative or representatives to appear and bsubstituted within a eriod of thirt 30 da s from notice.



.

If no legal representative is named by the counsel for the deceased party, or if the one so nameshall fail to appear within the specified period, the court may order the opposing party, within specified time, to procure the appointment of an executor or administrator for the estate of thdeceased and the latter shall immediately appear for and on behalf of the deceased. The coucharges in procuring such appointment, if defrayed by the opposing party, may be recovered acosts.

85 Regional Agrarian Reform Adjudication Board v. Court of Appeals, G.R. No. 165155, April 13, 2010, 61SCRA 181, 201.


87 Larkins v. National Labor Relations Commission, 311 Phil. 687, 693 (1995).

88 Rapid City Realty and Development Corp. v. Villa, G.R. No. 184197, February 11, 2010, 612 SCRA 302305.


90 See the return card attached to the Summons, id.

91 325 Phil. 145 (1996).

92 Id. at 155-156.

93 See Constancia for the hearing held on April 3, 2003, records, vol. I, p. 43.

94 See Constancia for the hearing held on April 28, 2003, id. at 44.

95 Id. at 45-48 & 52-56.

96 Id. at 105-108.

97 Paramount Insurance Corporation v. Japzon, G.R. No. 68037, July 29, 1992, 211 SCRA 879, 886.

98 The NLRC Rules in force at that time.

99 The present Section 8, Rule III of the 2005 Revised Rules of Procedure of the NLRC partly reads:

SECTION 8. APPEARANCES. – a) A lawyer appearing for a party is presumed to be properauthorized for that purpose. In every case, he shall indicate in his pleadings and motions h Attorney’s Roll Number, as well as his PTR and IBP numbers for the current year. x x x

100 Cagayan Valley Drug Corporation v. Commissioner of Internal Revenue, G.R. No. 151413, February 132008, 545 SCRA 10, 18-19.

101

Agpalo, Ruben E., Legal and Judicial Ethics, Eight Ed. (2009), p. 328.

102 Id. at 328-329.

103 353 Phil. 431 (1998).

104 See pp. 11-12 of the Resolution dated May 9, 2008 of the CA’s Special Ninth Division, CA rollo (CA-G.RNo. 93204), pp. 1103-1104.



. . - .

106 Sec. 14, Rule VII of the 2005 Revised NLRC Rules now reads:

Sec. 14. FINALITY OF DECISION OF THE COMMISSION AND ENTRY OF JUDGMENT – a) Finality othe Decisions, Resolutions or Orders of the Commission. – Except as provided in Section 9 of Rule Xthe decisions, resolutions or orders of the Commission shall become final and executory after ten (10calendar days from receipt thereof by the parties. x x x

107 See proof of receipt, records, vol. I, p. 284.

108 By then, Fairland was already being represented by Atty. Melina O. Tecson after the latter filed befor

the NLRC a Motion for Reconsideration claiming that Fairland was not aware of the complaints filed againsit and that it never engaged the services of Atty. Geronimo.


110 Association of Integrated Security Force of Bislig (AISFB)-ALU v. Court of Appeals, 505 Phil. 10, 2(2005).

111 7K Corporation v. National Labor Relations Commission, supra note 69.




Petitioner did not file a motion for reconsideration of the RTC Order. Instead, he filed a petition for certiorari unde

Rule 6513 before the CA. He contended that the RTC acted without or in excess of jurisdiction or with grave abusof discretion amounting to lack or excess of jurisdiction in issuing the Order. Petitioner argued that the writ oexecution was issued improvidently or without authority since the property to be levied belonged to him – in hipersonal capacity – and his wife. The RTC, respondent contended, could stay the execution of a judgment if th

same was unjust.14 He also contended that, pursuant to a ruling of this Court, a third party who is not a judgmencreditor may choose between filing a third-party claim with the NLRC sheriff or filing a separate action with th

courts.15

In the Decision now assailed before this Court, the CA affirmed the RTC Order in so far as it dismissed thcomplaint on the ground that it had no jurisdiction over the case, and nullified all other pronouncements in th

same Order. Petitioner moved for reconsideration, but the motion was denied. l a w p h ! l

Petitioner then filed the present petition seeking the nullification of the CA Decision. He argues that he was nevesued in his personal capacity, but in his representative capacity as president of PACSI. Neither was there an

indication in the body of the Decision that he was solidarily liable with the corporation. 16 He also concedes that thLabor Arbiter’s decision has become final. Hence, he is not seeking to stop the execution of the judgment againsthe properties of PACSI. He also avers, however, that there is no evidence that the sheriff ever implemented th

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 o

the NLRC or filing a separate action.18 He maintains that this special civil action is purely civil in nature since "involves the manner in which the writ of execution in a labor case will be implemented against the property o

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 bee

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 RTC’s lack of jurisdiction to restrain thimplementation 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 arisfrom and are incidental to the enforcement of decisions, orders, or awards rendered in labor cases by appropriatofficers and tribunals of the Department of Labor and Employment. To hold otherwise is to sanction splitting o

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 thexecution of a judgment of that body. Petitioner need not look further than that. The Rules of Court apply only b

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 persoother than the judgment obligor or his agent, and such person makes an affidavit of his title thereto or right to thpossession thereof, stating the grounds of such right or title, and serves the same upon the officer making the levand a copy thereof upon the judgment obligee, the officer shall not be bound to keep the property, unless suc judgment obligee, on demand of the officer, files a bond approved by the court to indemnify the third-parclaimant in a sum not less than the value of the property levied on. In case of disagreement as to such value, thsame shall be determined by the court issuing the writ of execution. No claim for damages for the taking or keepinof the property may be enforced against the bond unless the action therefor is filed within one hundred twen

(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 third-party claimant such bond is filed. Nothing herein contained shall prevent such claimant or any third person from vindicating hiclaim to the property in a separate action, or prevent the judgment obligee from claiming damages in the same o



a separa e ac on aga ns a r -par y c a man w o e a r vo ous or p a n y spur ous c a m.

When the writ of execution is issued in favor of the Republic of the Philippines, or any officer duly representing ithe filing of such bond shall not be required, and in case the sheriff or levying officer is sued for damages as result of the levy, he shall be represented by the Solicitor General and if held liable therefor, the actual damageadjudged by the court shall be paid by the National Treasurer out of such funds as may be appropriated for thpurpose.

On the other hand, the NLRC Manual on the Execution of Judgment deals specifically with third-party claims 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 filinof a third-party claim, to wit:

SECTION 2. Proceedings. — If property levied upon be claimed by any person other than the losing party or hiagent, such person shall make an affidavit of his title thereto or right to the possession thereof, stating thgrounds of such right or title and shall file the same with the sheriff and copies thereof served upon the Labo Arbiter or proper officer issuing the writ and upon the prevailing party. Upon receipt of the third party claim, aproceedings with respect to the execution of the property subject of the third party claim shall automatically bsuspended and the Labor Arbiter or proper officer issuing the writ shall conduct a hearing with due notice to aparties concerned and resolve the validity of the claim within ten (10) working days from receipt thereof and hdecision is appealable to the Commission within ten (10) working days from notice, and the Commission sharesolve the appeal within same period.

There is no doubt in our mind that petitioner’s complaint is a third- party claim within the cognizance of the NLRCPetitioner may indeed be considered a "third party" in relation to the property subject of the execution vis-à-vis th

Labor Arbiter’s decision. There is no question that the property belongs to petitioner and his wife, and not to thcorporation. It can be said that the property belongs to the conjugal partnership, not to petitioner alone. Thus, thproperty belongs to a third party, i.e., the conjugal partnership. At the very least, the Court can consider thapetitioner’s wife is a third party within contemplation of the law.

The Court’s pronouncements in Deltaventures Resources, Inc. v. Hon. Cabato25 are instructive:

Ostensibly the complaint before the trial court was for the recovery of possession and injunction, but in essence was an action challenging the legality or propriety of the levy vis-a-vis the alias writ of execution, including the actperformed by the Labor Arbiter and the Deputy Sheriff implementing the writ. The complaint was in effect a motioto quash the writ of execution of a decision rendered on a case properly within the jurisdiction of the Labor Arbiteto wit: Illegal Dismissal and Unfair Labor Practice. Considering the factual setting, it is then logical to conclude tha

the subject matter of the third party claim is but an incident of the labor case, a matter beyond the jurisdiction oregional trial courts.

x x x x

x x x. Whatever irregularities attended the issuance an execution of the alias writ of execution should be referred tthe same administrative tribunal which rendered the decision. This is because any court which issued a writ oexecution has the inherent power, for the advancement of justice, to correct errors of its ministerial officers and tcontrol its own processes.

The broad powers granted to the Labor Arbiter and to the National Labor Relations Commission by Articles 217218 and 224 of the Labor Code can only be interpreted as vesting in them jurisdiction over incidents arising fromin connection with or relating to labor disputes, as the controversy under consideration, to the exclusion of th

regular courts.26

There is no denying that the present controversy arose from the complaint for illegal dismissal. The subject matteof petitioner’s complaint is the execution of the NLRC decision. Execution is an essential part of the proceeding

before the NLRC. Jurisdiction, once acquired, continues until the case is finally terminated,27 and there can be nend to the controversy without the full and proper implementation of the commission’s directives.

Further underscoring the RTC’s lack of jurisdiction over petitioner’s complaint is Article 254 of the Labor Code, twit:



ART. 254. INJUNCTION PROHIBITED. – No temporary or permanent injunction or restraining order in any casinvolving or growing out of labor disputes shall be issued by any court or other entity, except as otherwisprovided 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 hapassed 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 himand his wife. Since he was sued in a representative capacity, and not in his personal capacity, the property counot 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 conside

petitioner as an agent of the corporation – and, therefore, not a stranger to the case – such that the provision othird-party claims will not apply to him, the property was registered not only in the name of petitioner but also of hiwife. She stands to lose the property subject of execution without ever being a party to the case. This will btantamount to deprivation of property without due process.

Moreover, the power of the NLRC, or the courts, to execute its judgment extends only to properties unquestionab

belonging to the judgment debtor alone.29 A sheriff, therefore, has no authority to attach the property of an

person except that of the judgment debtor.30 Likewise, there is no showing that the sheriff ever tried to execute othe properties of the corporation.

In sum, while petitioner availed himself of the wrong remedy to vindicate his rights, nonetheless, justice demandthat this Court look beyond his procedural missteps and grant the petition.

WHEREFORE, the foregoing premises considered, the petition is GRANTED. The Decision dated February 212008 and the Resolution dated July 25, 2008 of the Court of Appeals in CA-G.R. CEB-SP. No. 02370 are herebREVERSED and SET ASIDE, and a new one is entered declaring NULL and VOID (1) the Order of the RegionTrial Court of Negros Occidental dated December 27, 2006 in Civil Case No. 06-12927; and (2) the Notice of Salon Execution of Personal Property dated December 4, 2006 over the property covered by Transfer Certificate oTitle No. T-140167, issued by the Acting Sheriff of the National Labor Relations Commission.

SO ORDERED.

ANTONIO EDUARDO B. NACHURA Associate Justice

WE CONCUR:


Chairperson

DIOSDADO M. PERALTA Associate Justice

ROBERTO A. ABAD Associate Justice

JOSE CATRAL MENDOZA Associate Justice



ANTONIO T. CARPIO Associate JusticeChairperson, Second Division




Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson's Attestation, I certify that thconclusions in the above Decision had been reached in consultation before the case was assigned to the writer othe opinion of the Court’s Division.


Footnotes

1 Rollo, pp. 26-48.

2 Penned by Associate Justice Priscilla Baltazar-Padilla, with Associate Justices Isaias P. Dicdican anFranchito N. Diamante, concurring; rollo, pp. 50-59.

3 Id. at 75-77.

4 CA rollo, p. 191.

5 Rollo, pp. 50-51.

6 CA rollo, pp. 191-199.

7 Id. at 198.

8 Id. at 200-204.

9 Rollo, p. 51.

10 CA rollo, pp. 72-73.

11 Rollo, p. 51.

12 CA rollo, pp. 41-44.

13 Id. at 2-40.

14 Id. at 16.

15 Id. at 26-27.

16 Rollo, p. 33.

17 Id. at 34.

18 Id. at 35.

19 Id. at 36.

20 Id. at 37.

21 Id. at 39.

22 Air Services Cooperative v. CA, 354 Phil. 905, 916 (1998), citing Balais v. Hon. Velasco, 322 Phil. 790807 (1996).



23 2005 Revised Rules of Procedure of the National Labor Relations Commission, Section 3. Suppletor Application of the Rules of Court. - In the absence of any applicable provision in these Rules, and in ordeto effectuate the objectives of the Labor Code, the pertinent provisions of the Rules of Court of thPhilippines may, in the interest of expeditious dispensation of labor justice and whenever practicable anconvenient, be applied by analogy or in a suppletory character and effect.

24 NLRC Manual on the Execution of Judgment, Rule VI, Sec. 1.

25 384 Phil. 252, 260 (2000).

26

Id. at 260-261. (Citations omitted.)

27 Mariño, Jr. v. Gamilla, 490 Phil. 607, 620 (2005), citing A’ Prime Security Services, Inc. v. Hon. Drilon, 31Phil. 532, 537 (1995).

28 CA rollo, p. 109.

29 Go v. Yamane, G.R. No. 160762, May 3, 2006, 489 SCRA 107, 124; Yao v. Hon. Perello, 460 Phil. 658662 (2003); Co Tuan v. NLRC, 352 Phil. 240, 250 (1998).

30 Johnson and Johnson (Phils.), Inc. v. CA, 330 Phil. 856, 873 (1996).






Manila

SECOND DIVISION

G.R. No. 190724 March 12, 2014

DIAMOND TAXI and/or BRYAN ONG, Petitioners,vs.FELIPE LLAMAS, JR., Respondent.

D E C I S I O N

BRION, J.:

In this petition for review on certiorari,1 we resolve the challenge to the August 13, 2008 decision2 and th

November 27, 2009 resolution3 of the Court of Appeals (CA) in CA-G.R. CEB-S.P. No. 02623. This CA decisioreversed and set aside the May 30, 2006 resolution4 of the National Labor Relations Commission (NLRC) in NLRCase No. V-000294-06 (RAB VII-07-1574-05) that dismissed respondent Felipe Llamas, Jr.'s appeal for nonperfection.

The Factual Antecedents

Llamas worked as a taxi driver for petitioner Diamond Taxi, owned and operated by petitioner Bryan Ong. On Jul18, 2005, Llamas filed before the Labor Arbiter (LA) a complaint for illegal dismissal against the petitioners.

In their position paper, the petitioners denied dismissing Llamas. They claimed that Llamas had been absenwithout official leave for several days, beginning July 14, 2005 until August 1, 2005. The petitioners submitted copy of the attendance logbook to prove that Llamas had been absent on these cited dates. They also pointed ou

that Llamas committed several traffic violations in the years 2000-2005 and that they had issued him severmemoranda for acts of insubordination and refusal to heed management instructions. They argued that these ac – traffic violations, insubordination and refusal to heed management instructions – constitute grounds for thtermination of Llamas’ employment.

Llamas failed to seasonably file his position paper.

On November 29, 2005, the LA rendered a decision5 dismissing Llamas’ complaint for lack of merit. The LA hethat Llamas was not dismissed, legally or illegally. Rather, the LA declared that Llamas left his job and had beeabsent for several days without leave.

Llamas received a copy of this LA decision on January 5, 2006. Meanwhile, he filed his position paper 6 oDecember 20, 2005.

In his position paper, Llamas claimed that he failed to seasonably file his position paper because his previoucounsel, despite his repeated pleas, had continuously deferred compliance with the LA’s orders for its submissionHence, he was forced to secure the services of another counsel on December 19, 2005 in order to comply with thLA’s directive.

On the merits of his complaint, Llamas alleged that he had a misunderstanding with Aljuver Ong, Bryan’s brotheand operations manager of Diamond Taxi, on July 13, 2005 (July 13, 2005 incident). When he reported for wor



reman e e case o e or ur er procee ngs.

Moreover, the petitioners point out that the NLRC did not gravely abuse its discretion when it rejected Llamaappeal. They argue that the NLRC’s action conformed with its rules and with this Court’s decisions that upheld thdismissal of an appeal for failure to file a certificate of non-forum shopping.

Directly addressing the CA’s findings on the dismissal issue, the petitioners argue that they did not constructivedismiss Llamas. They maintain that Llamas no longer reported for work because of the several liabilities hincurred that would certainly have, in any case, warranted his dismissal.

The Case for the Respondent

Llamas argues in his comment14 that the CA correctly found that the NLRC acted with grave abuse of discretiowhen it maintained its dismissal of his appeal despite his subsequent filing of the certificate of non-forum shoppingQuoting the CA’s ruling, Llamas argues that the NLRC should have given due course to his appeal to avoimiscarriage of substantial justice.

On the issue of dismissal, Llamas argues that the CA correctly reversed the LA’s ruling that found him nodismissed, legally or illegally. Relying on the CA’s ruling, Llamas points out that the petitioners bore the burden oproving the abandonment charge. In this case, the petitioners failed to discharge their burden; hence, hidismissal was illegal.


We do not find the petition meritorious.

Preliminary considerations: factual-issue-bar-rule

In this Rule 45 petition for review on certiorari, we review the legal errors that the CA may have committed in thassailed decision, in contrast with the review for jurisdictional error undertaken in an original certiorari action. Ireviewing the legal correctness of the CA decision in a labor case made under Rule 65 of the Rules of Court, wexamine the CA decision in the context that it determined the presence or the absence of grave abuse odiscretion in the NLRC decision before it and not on the basis of whether the NLRC decision, on the merits of thcase, was correct. In other words, we have to be keenly aware that the CA undertook a Rule 65 review, not review on appeal, of the challenged NLRC decision. In question form, the question that we ask is: Did the C

correctly determine whether the NLRC committed grave abuse of discretion in ruling on the case?15

In addition, the Court’s jurisdiction in a Rule 45 petition for review on certiorari is limited to resolving only question

of law. A question of law arises when the doubt or controversy concerns the correct application of law o jurisprudence to a certain set of facts. In contrast, a question of fact exists when the doubt or controvers

concerns the truth or falsehood of facts.16

As presented by the petitioners, the petition before us involves mixed questions of fact and law, with the core issubeing one of fact. Whether the CA, in ruling on the labor case before it under an original certiorari action, camake its own factual determination requires the consideration and application of law and jurisprudence; it essentially a question of law that a Rule 45 petition properly addresses.

In the context of this case, however, this legal issue is inextricably linked with and cannot be resolved without thdefinitive resolution of the core factual issue – whether Llamas abandoned his work or had been constructivedismissed. As a proscribed question of fact, we generally cannot address this issue, except to the extenecessary to determine whether the CA correctly found that the NLRC acted with grave abuse of discretion i

dismissing Llamas’ appeal on purely technical grounds.

For raising mixed questions of fact and law, we deny the petition outright. Even if this error were to be disregardedhowever, we would still deny the petition as we find the CA legally correct in reversing the NLRC’s resolution on thground of grave abuse of discretion.

The CA has ample authority to make itsown factual determination

We agree that remanding the case to the NLRC for factual determination and decision of the case on the merit



would have been, ordinarily, a prudent approach. Nevertheless, the CA’s action on this case was not proceduralwrong and was not without legal and jurisprudential basis.

In this jurisdiction, courts generally accord great respect and finality to factual findings of administrative agencies

i.e., labor tribunals, in the exercise of their quasi-judicial function.17 These findings, however, are not infallible. Thdoctrine espousing comity to administrative findings of facts cannot preclude the courts from reviewing and, wheproper, disregarding these findings of facts when shown that the administrative body committed grave abuse odiscretion by capriciously, whimsically or arbitrarily disregarding evidence or circumstances of considerabl

importance that are crucial or decisive of the controversy.18

Hence, in labor cases elevated to it via petition for certiorari, the CA can grant this prerogative writ when it findthat the NLRC acted with grave abuse of discretion in arriving at its factual conclusions. To make this finding, th

CA necessarily has to view the evidence if only to determine if the NLRC ruling had basis in evidence. It is in thsense and manner that the CA, in a Rule 65 certiorari petition before it, had to determine whether grave abuse odiscretion on factual issues attended the NLRC’s dismissal of Llamas’ appeal. Accordingly, we do not finerroneous the course that the CA took in resolving Llamas’ certiorari petition. The CA may resolve factual issueby express legal mandate and pursuant to its equity jurisdiction.

The NLRC committed grave abuse of discretion in dismissing Llamas’ appeal onmere technicality

Article 223 (now Article 229)19 of the Labor Code states that decisions (or awards or orders) of the LA shabecome final and executory unless appealed to the NLRC within ten (10) calendar days from receipt of thdecision. Consistent with Article 223, Section 1, Rule VI of the 2005 NLRC Rules also provides for a ten (10)-da

period for appealing the LA’s decision. Under Section 4(a), Rule VI20 of the 2005 NLRC Rules, the appeal shall bin the form of a verified memorandum of appeal and accompanied by proof of payment of the appeal fee, postinof cash or surety bond (when necessary), certificate of non-forum shopping, and proof of service upon the otheparties. Failure of the appealing party to comply with any or all of these requisites within the reglementary periowill render the LA’s decision final and executory.

Indisputably, Llamas did not file a memorandum of appeal from the LA’s decision. Instead, he filed, within the te(10)-day appeal period, a motion for reconsideration. Under Section 15, Rule V of the 2005 NLRC Rules, motionfor reconsideration from the LA’s decision are not allowed;

they may, however, be treated as an appeal provided they comply with the requirements for perfecting an appeaThe NLRC dismissed Llamas’ motion for reconsideration treated as an appeal for failure to attach the require

certificate of non-forum shopping per Section 4(a), Rule VI of the 2005 NLRC Rules.

The requirement for a sworn certification of non-forum shopping was prescribed by the Court under Revise

Circular 28-91,21 as amended by Administrative Circular No. 04-94,22 to prohibit and penalize the evils of forushopping. Revised Circular 28-91, as amended by Administrative Circular No. 04-94, requires a sworn certificatof non-forum shopping to be filed with every petition, complaint, application or other initiatory pleading filed beforthe Court, the CA, or the different divisions thereof, or any other court, tribunal or agency.

Ordinarily, the infirmity in Llamas’ appeal would have been fatal and would have justified an end to the case. careful consideration of the circumstances of the case, however, convinces us that the NLRC should, indeed, havgiven due course to Llamas’ appeal despite the initial absence of the required certificate. We note that in hmotion for reconsideration of the NLRC’s May 30, 2006 resolution, Llamas attached the required certificate of non

forum shopping.

Moreover, Llamas adequately explained, in his motion for reconsideration, the inadvertence and presented a clea justifiable ground to warrant the relaxation of the rules. To recall, Llamas was able to file his position papethrough his new counsel, only on December 20, 2005. He hired the new counsel on December 19, 2005 afteseveral repeated, albeit failed, pleas to his former counsel to submit, on or before October 25, 2005 per the LA’order, the required position paper. On November 29, 2005, however, the LA rendered a decision that Llamas anhis new counsel learned and received a copy of only on January 5, 2006. Evidently, the LA’s findings anconclusions were premised solely on the petitioners’ pleadings and evidence. And, while not the fault of the LALlamas, nevertheless, did not have a meaningful opportunity to present his case, refute the contents an

’



.

Faced with these circumstances, i.e., Llamas’ subsequent compliance with the certification-against-forum-shoppinrequirement; the utter negligence and inattention of Llamas’ former counsel to his pleas and cause, and hvigilance in immediately securing the services of a new counsel; Llamas’ filing of his position paper before hlearned and received a copy of the LA’s decision; the absence of a meaningful opportunity for Llamas to presenhis case before the LA; and the clear merits of his case (that our subsequent discussion will show), the NLRshould have relaxed the application of procedural rules in the broader interests of substantial justice.

Indeed, while the requirement as to the certificate of non-forum shopping is mandatory, this requirement shoulnot, however, be interpreted too literally and thus defeat the objective of preventing the undesirable practice o

forum-shopping.23

Under Article 221 (now Article 227)24 of the Labor Code, "the Commission and its members and the Labor Arbitershall use every and all reasonable means to ascertain the facts in each case speedily and objectively and withou

regard to technicalities of law or procedure, all in the interest of due process."25 Consistently, we have emphasizethat "rules of procedure are mere tools designed to facilitate the attainment of justice. A strict and rigid applicatiowhich would result in technicalities that tend to frustrate rather than promote substantial justice should not b

allowed x x x. No procedural rule is sacrosanct if such shall result in subverting justice."26 Ultimately, what shouguide judicial action is that a party is given the fullest opportunity to establish the merits of his action or defens

rather than for him to lose life, honor, or property on mere technicalities. 27

Then, too, we should remember that "the dismissal of an employee’s appeal on purely technical ground

inconsistent with the constitutional mandate on protection to labor."28 Under the Constitution29 and the Labo

Code,30 the State is bound to protect labor and assure the rights of workers to security of tenure – tenurial securit

being a preferred constitutional right that, under these fundamental guidelines, technical infirmities in labopleadings cannot defeat.31

In this case, Llamas’ action against the petitioners concerned his job, his security of tenure. 1 â w p h i 1 This is a proper

right of which he could not and should not be deprived of without due process. 32 But, more importantly, it is a righ

that assumes a preferred position in our legal hierarchy.33

Under these considerations, we agree that the NLRC committed grave abuse of discretion when, in dismissinLlamas’ appeal, it allowed purely technical infirmities to defeat Llamas’ tenurial security without full opportunity testablish his case’s merits.

Llamas did not abandon his work; he wasconstructively dismissed

"Abandonment is the deliberate and unjustified refusal of an employee to resume his employment."34 It is a form o

neglect of duty that constitutes just cause for the employer to dismiss the employee. 35

To constitute abandonment of work, two elements must concur: "(1) x x x the employee must have failed to repofor work or must have been absent without valid or justifiable reason; and (2) x x x there must have been a cleaintention [on the part of the employee] to sever the employer-employee relationship manifested by some ove

act."36 The employee’s absence must be accompanied by overt acts that unerringly point to the employee’s clea

intention to sever the employment relationship.37 And, to successfully invoke abandonment, whether as a grounfor dismissing an employee or as a defense, the employer bears the burden of proving the employee’s unjustifie

refusal to resume his employment.38 Mere absence of the employee is not enough.39

Guided by these parameters, we agree that the petitioners unerringly failed to prove the alleged abandonmenThey did not present proof of some overt act of Llamas that clearly and unequivocally shows his intention tabandon his job. We note that, aside from their bare allegation, the only evidence that the petitioners submitted t

prove abandonment were the photocopy of their attendance logbook and the July 15, 2005 memorandum40 thathey served on Llamas regarding the July 13, 2005 incident. These pieces of evidence, even when considerecollectively, indeed failed to prove the clear and unequivocal intention, on Llamas’ part, that the law requires tdeem as abandonment Llamas’ absence from work. Quite the contrary, the petitioners’ July 15, 200memorandum, in fact, supports, if not strengthens, Llamas' version of the events that led to his filing of thcom laint i.e. that as a result of the Jul 13 2005 incident the etitioners refused to ive him the ke to h



, . ., , ,assigned taxi cab unless he would sign the resignation letter.

Moreover, and as the CA pointed out, Llamas lost no time in filing the illegal dismissal case against them. Trecall, he filed the complaint on July 18, 2005 or only two days from the third time he was refused access to hiassigned taxi cab on July 16, 2005. Clearly, Llamas could not be deemed to have abandoned his work for, as whave previously held, the immediate filing by the employee of an illegal dismissal complaint is proof enough of h

intention to return to work and negates the employer's charge of abandonment.41

To reiterate and emphasize, abandonment is a matter of intention that cannot lightly be presumed from certain

equivocal acts of the employee.42

The CA, therefore, correctly regarded Llamas as constructively dismissed for the petitioners' failure to prove th

alleged just cause -abandonment - for his dismissal. Constructive dismissal exists when there is cessation of worbecause continued employment is rendered impossible, unreasonable or unlikely. Constructive dismissal is dismissal in disguise or an act amounting to dismissal but made to appear as if it were not. In constructivdismissal cases, the employer is, concededly, charged with the burden of proving that its conduct and action wer

for valid and legitimate grounds.43 The petitioners' persistent refusal to give Llamas the key to his assigned tacab, on the condition that he should first sign the resignation letter, rendered, without doubt, his continueemployment impossible, unreasonable and unlikely; it, thus, constituted constructive dismissal.

In sum, the CA correctly found equitable grounds to warrant relaxation of the rule on perfection of appeal (filing othe certificate of non-forum shopping) as there was patently absent sufficient proof for the charge oabandonment. Accordingly, we find the CA legally correct in reversing and setting aside the NLRC's resolutiorendered in grave abuse of discretion.

WHEREFORE, in light of these considerations, we hereby DENY the petition. We AFFIRM the decision date August 13, 2008 and the resolution dated November 27, 2009 of the Court of Appeals in CA-G.R. CEB-S.P. No02623.

SO ORDERED.

ARTURO D. BRION

Associate Justice

WE CONCUR:

ANTONIO T. CARPIO


MARIANO C. DEL CASTILLO

Associate JusticeJOSE PORTUGAL PEREZ

Associate Justice


Associate Justice



ANTONIO T. CARPIO

Associate JusticeChairperson, Second Division


Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson's Attestation, I certify that thconclusions in the above Decision had been reached in consultation before the case was assigned to the writer othe opinion of the Court's Division.




Chief Justice

Footnotes

1 Rollo, pp. 9-29.

2 Penned by Associate Justice Franchito N. Diamante, and concurred in by Associate Justices PriscillBaltazar-Padilla and Edgardo L. delos Santos; id. at 31-42.

3 Id. at 44-45.

4 Penned by Commissioner Aurelio D. Menzon, and concurred in by Commissioner Oscar S. Uy anPresiding Commissioner Gerardo C. Nograles; id. at 57-59.

5 Penned by LA Jose Gutierrez; id. at 46-47.

6 Id. at 48-51.

7 Supra note 4.

8 Rollo, pp. 60-69.

9 Id. at 71-72.

10 Id. at 73-90.

11 Supra note 2.

12 Rollo, pp. 103-124.

13 Supra note 3.

14 Rollo, pp. 129-134.

15

Montoya v. Transmed Manila Corporation, G.R. No. 183329, August 27, 2009, 597 SCRA 334, 342-343.16 Baguio Central University v. Ignacio Gallente, G.R. No. 188267, December 2, 2013.

17 See Cosmos Bottling Corp. v. Nagrama, Jr., 571 Phil. 281, 300 (2008).

18 See Norkis Trading Corporation v. Buenavista, G.R. No. 182018, October 10, 2012, 683 SCRA 406, 422citation omitted.

19 As directed by Republic Act No. 10151, entitled "An Act Allowing the Employment of Night Workerthereby Repealing Articles 130 and 131 of Presidential Decree Number Four Hundred Forty-Two, aamended, Otherwise Known as the Labor Code of the Philippines," approved on June 21, 2011, the LaboCode articles beginning with Article 130 are renumbered.

20 Section 4. Requisites for Perfection of Appeal. - a) The appeal shall be: 1) filed within the reglementarperiod provided in Section 1 of this Rule; 2) verified by the appellant himself in accordance with Section 4Rule 7 of the Rules of Court, as amended; 3) in the form of a memorandum of appeal which shall state thgrounds relied upon and the arguments in support thereof, the relief prayed for, and with a statement of thdate the appellant received the appealed decision, resolution or order; 4) in three (3) legibly typewritten oprinted copies; and 5) accompanied by i) proof of payment of the required appeal fee; ii) posting of a casor surety bond as provided in Section 6 of this Rule; iii) a certificate of non-forum shopping; and iv) proof oservice upon the other parties.



21 Issued on February 8, 1994 and made effective on April 1, 1994.

22 Effective April 1, 1994.

23 Caña v. Evangelical Free Church of the Phils., 568 Phil. 205, 213-214 (2008), citing Vicar InternationConstruction, Inc. v. FEB Leasing and Finance Corporation, G.R. No. 157195, April 22, 2005, 456 SCR588.

24 Supra note 19.

25 See also Section 10, Rule VI of the 2005 NLRC Rules.

26 Phil. Commercial Int’l Bank v. Cabrera, 494 Phil. 735, 743 (2005); citations omitted.

27 Id. at 743-744; and Caña v. Evangelical Free Church of the Phils., supra note 23, at 215.

28 Polsotin, Jr. v. De Guia Enterprises, Inc., G.R. No. 172624, December 5, 2011, 661 SCRA 523, 529.

29 See Article II, Section 18 and Article XIII, Section 3.

30 Under Article 4 of the Labor Code, all doubts in the implementation and interpretation of [its] provisions x x, including its implementing rules and regulations, shall be resolved in favor of labor."

31 See Spic N’ Span Services Corporation v. Paje, G.R. No. 174084, August 25, 2010, 629 SCRA 261, 270.

32 Polsotin, Jr. v. De Guia Enterprises, Inc., supra note 28, at 530.

33 See Spic N’ Span Services Corporation v. Paje, supra note 31, at 269.

34 NEECO II v. NLRC, 499 Phil. 777, 789 (2005).

35 See Article 282 (now Article 296) of the Labor Code.

36 Samarca v. Arc-Men Industries, Inc., 459 Phil. 506, 515 (2003). See also Harpoon Marine Services, Inc. vFrancisco, G.R. No. 167751, March 2, 2011, 644 SCRA 394, 405-406; and Aliten v. U-Need Lumber Hardware, 533 Phil. 213, 223 (2006).

37 See ACD Investigation Security Agency, Inc. v. Daquera, G.R. No. 147473, March 30, 2004, 426 SCR

494, 499.

38 See Samarca v. Arc-Men Industries, Inc., supra note 36, at 515; and Harpoon Marine Services, Inc. vFrancisco, supra note 36, at 406.

39 See Aliten v. U-Need Lumber & Hardware, supra note 36 at 222; and Functional, Inc. v. Granfil, G.R. No176377, November 16, 2011, 660 SCRA 279, 286-287.

40 Rollo, p. 112.

41 Labor v. National labor Relations Commission, G.R. No. 110388, September 14, 1995, 248 SCRA 183

198.

42 Josan, .JPS, Santiago Cargo Movers v. Aduna, G.R. No. 190794, February 22, 2012, 666 SCRA 679686; and Aliten v. U-Need Lumber & Hardware, supra note 36, at 223.

43 Galangv. Malasugui, G.R. No. 174173, March 7, 2012, 667 SCRA622, 634-635.






Manila

THIRD DIVISION

G.R. No. 167563 March 22, 2010

COLLEGE OF THE IMMACULATE CONCEPTION, Petitioner,vs.NATIONAL LABOR RELATIONS COMMISSION and ATTY. MARIUS F. CARLOS, PH.D., Respondents.

D E C I S I O N

PERALTA, J.:

Before this Court is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to set aside th

Decision1 and Resolution2 of the Court of Appeals (CA) in CA-G.R. SP No. 83321, which affirmed the Resolutiorendered by the National Labor Relations Commission (NLRC), Third Division in NLRC NCR CA No. 028096-01.

Petitioner College of the Immaculate Conception, through its former President Rev. Fr. Antonio A. Mangahas, Jrappointed respondent Atty. Marius F. Carlos on June 1, 1995 as Acting Dean of the Department of Busines Administration and Accountancy. Thereafter, in a letter dated May 23, 1996, petitioner informed respondent of happointment as Dean of the Department of Business, Economics and Accountancy effective June 1, 1996 unMay 31, 2000. Respondent served as Dean of said department for the designated term.

In a letter dated May 15, 2000, petitioner reminded respondent that upon the expiration of his term as Dean, hwill be appointed as full-time professor of Law and Accounting without diminution of his teaching salary as Dean As promised, on June 1, 2000, respondent was given eight (8) teaching loads as full-time professor. Respondenthen requested for the payment of overload pay, arguing that the regular full time load of a faculty member is onsix. Petitioner, in a letter dated July 3, 2000, denied respondent's claim for overload pay and explained thapursuant to the Faculty Manual, a full time faculty member, such as the respondent, is one who teaches at leastwenty-four units or eight (8) teaching loads per semester in the College Department. In the same letter, petitionerequested the respondent to vacate the Dean's office. Petitioner also directed respondent to explain why ndisciplinary action should be taken against him for engaging in the practice of law and teaching law in another laschool without prior permission from the petitioner.

In his written reply, respondent admitted that he was teaching at Araullo University without written permissiobecause it was unnecessary. As to his law practice, he explained that the only case he was handling was a petitiofor Declaration of Nullity of Marriage, which was referred to him by petitioner's Vice-President for Academic AffairsRespondent said that his demotion from Dean of the Department to a Faculty member was without legal basis anthat the non-renewal of his appointment as Dean was arbitrary, capricious, unlawful, tainted with abuse o

discretion, and injurious to his integrity and reputation. Further, the subsequent appointment of other personnel aacting Dean was violative of the law.

Petitioner replied that there was no demotion in position from Dean to Faculty member, because respondent’appointment as Dean was for a fixed period of four (4) years, from June 1, 1996 to May 31, 2000, as stated ipetitioner's letter dated May 23, 1996.

Petitioner refused to accept respondent's explanation that securing petitioner's prior written permission to teac

elsewhere, or to engage in any other remunerative occupation, is unnecessary. Thus, in its letter 3 dated July 17



, pe oner gave respon en wo op ons, o w :

1. Remain as a full-time professor, but without teaching loads outside; you may also continue to practicyour profession as a lawyer, provided that any additional cases you wish to handle should be subject to thprior written approval of the College; or

2. Become a part-time professor with an initial teaching load of fifteen (15) units, and with complete freedomto teach elsewhere and to practice your profession. This means that you will lose your tenure as a full-timfaculty member; moreover, your teaching loads in subsequent semesters will depend upon the Collegeevaluation of your performance and the teaching loads you will be carrying for that particular semester other schools.

Since respondent failed to respond to the aforementioned letter, petitioner again sent a letter to respondent oSeptember 20, 2000 to give him another chance to choose between the two foregoing options and to call hattention to Section 16.8, CHED Memorandum No. 19, S. 1998, of which provides:

x x x faculty members teaching in more than one school must give formal notice in their teaching assignment to aschools concerned; failure to give notices mean automatic withdrawal or cancellation of his teaching assignmen

and non-assignment of teaching load for the succeeding semester.4

Respondent requested for more time to reply, but failed to do so. Thus, petitioner informed respondent that he wi

not be assigned any teaching load for the succeeding semester pursuant to Section 16.8,5 CHED MemoranduNo. 19, series of 1998.

In a letter 6 dated October 15, 2000, respondent protested the imposition of sanction against him arising from h

part-time teaching of law in another university. He maintained that teaching in another university is a benefit henjoyed since July 1, 1999 as an administrator and Dean. He further said that his part-time teaching benefcannot be withheld despite his alleged demotion as a faculty member. Even assuming that he violated Sectio16.8, CHED Memorandum No. 19, series of 1998, respondent pointed out that under the College Faculty Manuateaching in another school without permission from the Department Head and the President is punishable at thfirst instance by mere censure or oral reprimand.

On October 19, 2000, respondent filed a complaint7 against petitioner before Regional Arbitration Branch No. III oSan Fernando, Pampanga, for unfair labor practice, illegal dismissal, with payment of backwages and damagesRespondent argued that the non-renewal of his appointment as Dean and his alleged demotion to a facultmember already constituted constructive dismissal and was but a prelude to his actual dismissal. Thereafter, hdismissal materialized when he was deprived of his teaching load.

Petitioner denied dismissing respondent and said it was only constrained to deprive respondent of his teachinload because he refused to abide by the mandate of Section 16.8, CHED Memorandum No. 19, series of 1998.

The Labor Arbiter (LA), in his Decision8 dated February 14, 2001, ruled that respondent was illegally dismissedThe dispositive portion of the decision reads:

WHEREFORE, in light of the foregoing, decision is hereby rendered declaring the employment termination aillegal. Respondents are hereby ordered to reinstate the complainant to his former position without loss of senioritrights and other privileges appurtenant thereto immediately upon receipt of this decision. Further, respondents arhereby ordered to pay complainant's backwages which as of the date of this decision has been computed in thamount of P54,567.00; representation allowance in the amount of P7,092.00; 13th month pay in the amount oP5,138.25, plus moral and exemplary damages in the amount of P50,000.00 and P30,000.00, respectively.

SO ORDERED.

On March 19, 2001, the LA then issued a Writ of Execution,9 directing the Sheriff of the NLRC to implement h

Decision dated February 14, 2001. The Petitioner opted to reinstate respondent in its payroll only.10

Dissatisfied with the Labor Arbiter's finding, petitioner appealed to the NLRC, which rendered a Decision11 date August 13, 2003, the dispositive portion of which reads:



WHEREFORE, premises considered, the Decision dated February 14, 2001 is hereby SET ASIDE and a new onentered DISMISSING the complaint. However, respondents are hereby ordered to reinstate complainant as fultime professor of Law and Accountancy without backwages.

SO ORDERED.

The NLRC ruled that petitioner's non-assignment of teaching load for the respondent was merely resorted to as sanction pursuant to Section 16.8 of CHED Memorandum No. 19, series of 1998. It was clear that respondentcontract as Dean was only for a period of four years, from June 1, 1996 to May 31, 2000, afterwhich, he would bappointed as a full- time professor without diminution of salary as a dean. Thus, the LA was incorrect when directed the reinstatement of the respondent to his former position as a Dean. The NLRC, likewise, deleted thaward of moral and exemplary damages for lack of factual and legal basis.

Petitioner filed a Motion for Clarification and/or Partial Reconsideration,12 praying that since the respondent wanot illegally dismissed, then he should be directed to refund the petitioner all the amounts he received by way o

payroll reinstatement. The NLRC, in its Resolution13 dated January 30, 2004, denied petitioner's motion for lack omerit.

Undaunted, petitioner filed a petition for certiorari14 with the CA alleging that the NLRC committed grave abuse odiscretion amounting to lack or excess of jurisdiction when it refused to order the respondent to return all thmonetary benefits he had received on account of his payroll reinstatement as Dean. The CA, in its Decision date August 31, 2004, dismissed the petition and sustained the ruling of the NLRC. Petitioner filed a motion foreconsideration, which the CA denied. Hence, the instant petition, which mainly poses the following issue:

Does the subsequent reversal of the LA's findings mean that respondent should reimburse petitioner all thsalaries and benefits he received pursuant to the immediate execution of the LA's erroneous decision ordering hreinstatement as Department Dean?

We rule in the negative. In Air Philippines Corporation v. Zamora,15 citing Roquero v. Philippine Airlines, Inc.,16 wheld that:

x x x Hence, even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory on thepart of the employer to reinstate and pay the wages of the dismissed employee during the period of appeal unreversal by the higher court. On the other hand, if the employee has been reinstated during the appeaperiod and such reinstatement order is reversed with finality, the employee is not required treimburse whatever salary he received for he is entitled to such, more so if he actually rendered serviceduring the period.

Petitioner, however, insists that Roquero finds no application to the case at bar, because here, respondent waordered reinstated to a position different from that which he previously held, i.e., the LA wrongfully ordered hreinstatement as Dean, when he should have been reinstated only as a full-time faculty member, because this wathe position he held when he filed the complaint for illegal dismissal. Further, petitioner takes a firm stand that th

case of International Container Terminal Services, Inc v. NLRC 17 refers only to a case of a dismissed employeand is inapplicable here, where it was correctly found on appeal that the employee was not dismissed at all, bwas only sanctioned for teaching in another university without petitioner's permission.

It is not disputed at this point that the LA erred in ordering respondent's reinstatement as Dean. The NLRC rulethat respondent should have been merely reinstated as a full-time law professor, because the term of happointment as Dean had long expired. However, such mistake on the part of the LA cannot, in any way, alter th

fact that during the pendency of the appeal of his decision, his order for respondent's reinstatement as Dean waimmediately executory. Article 223 of the Labor Code explicitly provides that:

Art. 223. - Appeal. – x x x

x x x x

In any event, the decision of the Labor Arbiter reinstating a dismissed or separated employee, insofar as threinstatement aspect is concerned, shall immediately be executory, even pending appeal. The employee shaeither be admitted back to work under the same terms and conditions prevailing prior to his dismissal or separatio



or, at the option of the employer, merely reinstated in the payroll. The posting of a bond by the employer shall nostay the execution for reinstatement provided therein. (Emphasis supplied)

Therefore, petitioner could not validly insist that it is entitled to reimbursement for the payment of the salaries orespondent pursuant to the execution of the LA's decision by simply arguing that the LA's order for reinstatemenis incorrect. The pertinent law on the matter is not concerned with the wisdom or propriety of the LA's order oreinstatement, for if it was, then it should have provided that the pendency of an appeal should stay its execution After all, a decision cannot be deemed irrefragable unless it attains finality.

In Garcia v. Philippine Airlines, Inc.,18 the Court made a very enlightening discussion on the aspect oreinstatement pending appeal:

On this score, the Court’s attention is drawn to seemingly divergent decisions concerning reinstatement pendinappeal or, particularly, the option of payroll reinstatement. On the one hand is the jurisprudential trend aexpounded in a line of cases including Air Philippines Corp. v. Zamora, while on the other is the recent case oGenuino v. National Labor Relations Commission. At the core of the seeming divergence is the application oparagraph 3 of Article 223 of the Labor Code x x x

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 othe employer to reinstate and pay the wages of the dismissed employee during the period of appeal until reversby the higher court. On the other hand, if the employee has been reinstated during the appeal period and sucreinstatement order is reversed with finality, the employee is not required to reimburse whatever salary hreceived for he is entitled to such, more so if he actually rendered services during the period. (Emphasis in th

original; italics and underscoring supplied)

In other words, a dismissed employee whose case was favorably decided by the Labor Arbiter is entitled to receivwages pending appeal upon reinstatement, which is immediately executory. Unless there is a restraining order, it ministerial upon the Labor Arbiter to implement the order of reinstatement and it is mandatory on the employer tcomply 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 ivalid, then the employer has the right to require the dismissed employee on payroll reinstatement to refund thsalaries [he] received while the case was pending appeal, or it can be deducted from the accrued benefits that thdismissed employee was entitled to receive from [his] employer under existing laws, collective bargainin

agreement provisions, and company practices. However, if the employee was reinstated to work during thpendency of the appeal, then the employee is entitled to the compensation received for actual services renderewithout need of refund.

Considering that Genuino was not reinstated to work or placed on payroll reinstatement, and her dismissal based on a just cause, then she is not entitled to be paid the salaries stated in item no. 3 of the fallo of theSeptember 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 wafound 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 wa

required to refund the salaries received on payroll reinstatement. In fact, in a catena of cases, the Court did noorder the refund of salaries garnished or received by payroll-reinstated employees despite a subsequent reversof the reinstatement order.

The dearth of authority supporting Genuino is not difficult to fathom for it would otherwise render inutile thrationale of reinstatement pending appeal.

x x x x



, ,implementation, pending appeal, of a decision reinstating a dismissed or separated employee since that saving ais designed to stop, although temporarily since the appeal may be decided in favor of the appellant, a continuinthreat or danger to the survival or even the life of the dismissed or separated employee and his family.

In the same case, the Court went on to discuss the illogical and unjust effects of the "refund doctrine" erroneousespoused in Genuino:

Even outside the theoretical trappings of the discussion and into the mundane realities of human experience, th"refund doctrine" easily demonstrates how a favorable decision by the Labor Arbiter could harm, more than help, dismissed employee. The employee, to make both ends meet, would necessarily have to use up the salariereceived during the pendency of the appeal, only to end up having to refund the sum in case of a final unfavorabdecision. 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 payroreinstatement and simply find work elsewhere in the interim, if any is available. Notably, the option of payroreinstatement belongs to the employer, even if the employee is able and raring to return to work. Prior to Genuinoit is unthinkable for one to refuse payroll reinstatement. In the face of the grim possibilities, the rise of concerneemployees declining payroll reinstatement is on the horizon.

Further, the Genuino ruling not only disregards the social justice principles behind the rule, but also institutes scheme unduly favorable to management. Under such scheme, the salaries dispensed pendente lite merely servas a bond posted in installment by the employer. For in the event of a reversal of the Labor Arbiter’s decisioordering reinstatement, the employer gets back the same amount without having to spend ordinarily for bonpremiums. This circumvents, if not directly contradicts, the proscription that the "posting of a bond [even a casbond] 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 refunthe salaries in case a final decision upholds the validity of the dismissal, the Court realigns the proper course othe prevailing doctrine on reinstatement pending appeal vis-à-vis the effect of a reversal on appeal.

x x x x

The Court reaffirms the prevailing principle that even if the order of reinstatement of the Labor Arbiter is reverseon appeal, it is obligatory on the part of the employer to reinstate and pay the wages of the dismissed employeduring the period of appeal until reversal by the higher court. x x x

Thus, the Court resolved the impasse by reaffirming the principle earlier enunciated in Air Philippines Corporationthat an employee cannot be compelled to reimburse the salaries and wages he received during the pendency ohis appeal, notwithstanding the reversal by the NLRC of the LA's order of reinstatement. In this case, there is evemore reason to hold the employee entitled to the salaries he received pending appeal, because the NLRC did noreverse the LA's order of reinstatement, but merely declared the correct position to which respondent is to breinstated, i.e., that of full-time professor, and not as Dean.

Petitioner alleged that due to the unreasonable demand of the respondent that he be reinstated as a Deaninstead of a faculty member, petitioner was constrained to reinstate him in the payroll only. Thus, petitioner arguethat when the respondent imposed uncalled conditions for his reinstatement, his claim for reinstatement pendin

appeal was effectively nullified. We rule that respondent did not impose any unreasonable condition on hreinstatement as a Dean, because he was merely demanding that he be reinstated in the manner set forth by thLA in the writ of execution. Moreover, it bears stressing that the manner of immediate reinstatement, pendin

appeal, or the promptness thereof is immaterial, as illustrated in the following two scenarios:

Situation No. 1. (As in the cases of Air Philippines Corporation and International Container Terminal Services, IncThe LA ruled in favor of the dismissed employee and ordered his reinstatement. However, the employer did noimmediately comply with the LA's directive. On appeal, the NLRC reversed the LA and found that there was nillegal dismissal. In this scenario, We ruled that the employee is entitled to payment of his salaries and allowancepending appeal.

Situation No. 2. (As in the present case) The LA ruled in favor of the dismissed employee and ordered the latter'reinstatement. This time, the employer complied by reinstating the employee in the payroll. On appeal, the LA



ruling was reversed, finding that there was no case of illegal dismissal but merely a temporary sanction, akin to suspension. Here, We also must rule that the employee cannot be required to reimburse the salaries he receivebecause if he was not reinstated in the payroll in the first place, the ruling in situation no. 1 will apply, i.e., themployee is entitled to payment of his salaries and allowances pending appeal. 1 a v v p h i 1

Thus, either way we look at it, at the end of the day, the employee gets his salaries and allowances pendinappeal. The only difference lies as to the time when the employee gets it.

Lastly, petitioner alleged that the LA's decision was tainted with fraud and graft and corruption, as the dispositivportion of the decision cites facts not found in the pleadings and documents submitted by the parties. Allegedlythe LA's computation of respondent's basic salary, representation allowance and 13th-month pay are nosupported by the records of the case. Petitioner even opined that the LA and the respondent connived in draftin

the decision.

Aside from the fact that this Court is not the proper forum to consider the merits of petitioner's charge of fraud angraft and corruption against the LA and the respondent, petitioner failed to overcome the presumption of regulari

in the performance of the LA's official duties19 in rendering his decision. Petitioner was not able to show clear anconvincing proof to establish partiality, fraud and acts constituting graft and corruption. Well-entrenched i jurisprudence is the time-honored principle that the law bestows upon a public official the presumption of regulari

in the discharge of one’s official duties and functions.20 The Court held that:

x x x public respondents have in their favor the presumption of regularity in the performance of official duties whicpetitioners failed to rebut when they did not present evidence to prove partiality, malice and bad faith. Bad fait

can never be presumed; it must be proved by clear and convincing evidence. x x x21

WHEREFORE, the petition is DENIED. The Decision and Resolution of the Court of Appeals in CA-G.R. SP No83321, dated August 31, 2004 and March 11, 2005, respectively, are AFFIRMED.

SO ORDERED.

DIOSDADO M. PERALTA Associate Justice

WE CONCUR:

RENATO C. CORONA Associate Justice

Chairperson

PRESBITERO J. VELASCO, JR. Associate Justice

ANTONIO EDUARDO B. NACHURA Associate Justice

JOSE CATRAL MENDOZA

Associate Justice



RENATO C. CORONA Associate JusticeThird Division, Chairperson


Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the abovDecision were reached in consultation before the case was assigned to the writer of the opinion of the CourtDivision.



REYNATO S. PUNOChief Justice

Footnotes

1 Penned by Associate Justice Aurora Santiago-Lagman, with Associate Justices Portia Aliño-Hormachueloand Rebecca De Guia-Salvador, concurring; rollo, pp. 29-40.

2 Id. at 42-43.

3 Records, pp. 26-27.

4 Id. at 28.

5 Id. at 31-32.

6 Id. at 33-38.

7 Id. at 1-2.

8 Rollo, pp. 44-67.

9 Records, pp. 208-209.

10 Id. at 212.

11 Rollo, pp. 68-84.

12 Records, pp. 480-488.

13 Id. at 494-499.

14 CA rollo, pp. 2-37.

15 G.R. No. 148247, August 7, 2006, 498 SCRA 59, 72-73. (Emphasis ours.)

16 449 Phil. 437, 446 (2003). In this case, the LA found the employees' dismissal to be valid. The NLRordered reinstatement to their former positions with backwages. The CA reinstated the LA's decision insofaas it upheld the dismissal order. The Court ruled that reinstatement is immediately executory. It is mandatoron the employer to actually reinstate the employee or reinstate him in the payroll. If the employer failed treinstate the employee, the employer must pay the employee the salary he is entitled to, as if he wareinstated, from the time the reinstatement was ordered until its reversal by a higher court.

17 360 Phil. 527 (1998). In this case, the LA found the employee's dismissal unjustified and ordered h

reinstatement with full backwages. The NLRC found the termination legal, but ordered the employer to paemployee wages from the filing of the appeal with the NLRC until its promulgation of the decision. The Couheld that under Art. 223, the reinstatement aspect of the LA's decision, albeit under appeal, waimmediately enforceable as a consequence of which, the employer was duty-bound to choose forthwitwhether to re-admit the employee or to reinstate him in the payroll and to inform the employee of his choicto enable the latter to act accordingly. Failing to exercise the options in the alternative, the employer muspay the employee's salary which automatically accrued from notice of the LA's order of reinstatement units ultimate reversal by the NLRC.

18

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