G.R. No.

180147 June 4, 2014

SARA LEE PHILIPPINES, INC., Petitioner,

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

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G.R. No. 180148

ARIS PHILIPPINES, INC., Petitioner,

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

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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.

DECISION

PEREZ, J.:
The dilemma of the appeal bond in labor cases is epochal, present whenever the amount of monetary
award becomes debatably impedimental to the completion of remedies. Such instances exaggerate
the ambivalence between rigidity and liberality in the application of the requirement that the bond
must be equal to the arbiters award. The rule of reasonableness in the determination of the compliant
amount of the bond has been formulated to allow the review of the arbiters award. However, that rule
seemingly becomes inadequate when the award staggers belief but is, nonetheless, supported by the
premises of the controversy. The enormity of the award cannot prevent the settlement of the dispute.
The amount of award may vary case-to-case. But the law remains constant.

Before us are six (6) consolidated petitions for review on certiorari pertaining to the P3,453,664,710.66
(P3.45 Billion) appeal bond, which, as mandated by Article 233 of the Labor Code, is equivalent to the
monetary award adjudged by the labor arbiter in the cases. The first 5 petitions seek a relaxation of
the rule while the last petition urges its strict interpretation.

Petitioners in G.R. Nos. 180147,180148, 180149,180150, and 180319 are Sara Lee Philippines, Inc.
(SLPI), Aris Philippines, Inc. (Aris), Sara Lee Corporation (SLC), Atty. Cesar Cruz (Cruz), and Fashion
Accessories Philippines, Inc. (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 a 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 of 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 the 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 of Aris. Emilinda D. Macatlang allegedly represents the employees whose employment was
terminated upon the closure of Aris.

I.

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

Aris Philippines Workers Confederation of Filipino Workers (Union), which represents 5,984 6 rank-and-
file 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 benefits which accrued by virtue of the companys closure, which settlement amounted to P419
Million9 and an additionalP15 Million10 Benevolent Fund to the Union. On 26 October 1995, FAPI was
incorporated.11 When said incorporation came to the knowledge of the affected employees, they all
filed 63 separate complaints against Aris for illegal dismissal. The complaints were consolidated before
the labor arbiter. Later amendments to the complaint included as respondents SLC, SLP, FAPI and Cruz,
and Emilinda D. Macatlang, et al.,is captioned as the complainant, represented in the suit by Emilinda
D. Macatlang. The complaints alleged that FAPI is engaged in the manufacture and exportation of the
same articles manufactured by Aris; that there was a mass transfer of Aris equipment and employees
to FAPIs plant in Muntinlupa, Rizal; that contractors of Aris continued as contractors of FAPI; and that
the export quota of Aris was transferred to FAPI.12 Essentially, the complainants insisted that FAPI was
organized by the management of Aris to continue the same business of Aris, thereby intending to
defeat their right to security of tenure. They likewise impleaded in their subsequent pleadings that SLC
and SLP are the major stockholders 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 it is not, in any way, connected with FAPI, which is a separate and distinct corporation;
that the contracts of Aris with its contractors were already terminated; and that there is no truth to the
claim that its export quota with Garments 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 illegal and awarding them separation pay and other monetary benefits amounting
to P3,453,664,710.86.14 The dispositive portion of the decision read:

WHEREFORE, premises all considered, judgment is hereby rendered dismissing the complaint for unfair
labor practice (ULP); declaring that complainants were illegally dismissed; ordering respondents to
jointly and severally pay them separation pay at one (1) month for every year of service; backwages
from the time their compensation was withheld until the promulgation of this Decision[,] P5,000.00
moral damages and P5,000.00 exemplary damages for each of them, and eight percent (8%)
attorneys fee of the total monetary award, less the separation pay 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
complainants and their respective monetary awards.15

Upon receipt of a copy of the aforesaid decision, the Corporations filed their Notice of Appeal with
Motion to Reduce Appeal Bond and To Admit Reduced Amount with the National Labor Relations
Commission (NLRC). They asked the NLRC to reduce the appeal bond to P1 Million each on the grounds
that it is impossible for any insurance company to cover such huge amount and that, in requiring them
to post in full the appeal bond would be tantamount to denying them their right to appeal. 16 Aris
claimed that it was already dissolved and undergoing liquidation. SLC added that it is not the employer
of Emilinda D. Macatlang, et al., and that the latter had already received from Aris their separation pay
and other benefits amounting to P419,057,348.24, which covers practically more than 10% of the
monetary award.17 FAPI, for its part, claimed that its total assets would not be enough to answer for
even a small portion of the award. To compel it to post a bond might result in complete stoppage of
operations. FAPI also cited the possibility that the assailed decision once reviewed will be reversed and
set 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 is a jurisdictional defect since an appeal may only be perfected upon posting of a cash
bond equivalent to the 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 which the companies and their employees might suffer if the P3.45 Billion bond is sustained, the
NLRC granted the reduction of the appeal bond. The NLRC issued an Order dated 31 March
200620 directing the Corporations to post an additional P4.5 Million bond, bringing the total posted
bond to P9 Million. The dispositive portion of the Order provides: WHEREFORE, premises considered,
respondents are hereby ordered to post bond, either in cash, surety or property, in the additional
amount of FOUR MILLION FIVE HUNDRED THOUSAND PESOS (P4,500,000.00) within an INEXTENDIBLE
period of FIFTEEN (15) calendar days from receipt hereof. To the said extent, the Motion for Reduction
is granted. Failure to render strict compliance with the Order entered herein shall 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. SP No. 96363. They charged the NLRC with grave abuse of discretion in giving due course to the
appeal of petitioners despite the gross insufficiency of the cash bond. They declared that the appeal
bond must be equivalent to the amount of the award.22 Another petition, this time by Pacita Abelardo,
et al., was also filed before the 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
forum-shopping, absence of authorization from the employees for Emilinda D. Macatlang to file said
petition, and for failure to state the material dates.23

While the case was pending, the NLRC issued a Resolution on 19 December 2006 setting aside the
Decision of the labor arbiter and remanding the case to the "forum of origin for further proceedings." 24

In view of this related development, the Corporations filed their respective Manifestation and Motion
dated 30 January 2007 praying for the dismissal of the petition for certiorari for being moot and
academic.

On 26 March 2007, the Court of Appeals proceeded to reverse and set aside the 31 March 2006 NLRC
Resolution and deemed it reasonable under the circumstances of the case to order the posting of an
additional appeal bond of P1 Billion. The dispositive portion of the decision decreed:

WHEREFORE, premises considered, the March 31, 2006 Decision of the 2nd Division of the National
Labor Relations Commission, in NLRC NCR CA No. 046685-05, which reduced the required Php 3.453
BILLION Pesos appeal bond to a paltry9 Million Pesos, is hereby REVERSED and SET ASIDE and a new
one issued, to ensure availability of hard cash or reliable surety, on which victorious laborers could
rely, DIRECTING private respondents to POST additional appeal bond in the amount of Php 1 BILLION
Pesos, in cash or surety, within thirty (30) days from finality of this judgment, as pre-requisite to
perfecting appeal.25

All parties filed their Motion for Reconsideration but were later denied by the Court of Appeals in a
Resolution26dated 22 October 2007.

II.

Six (6) petitions for review on certiorariof the Decision of the Court of Appeals were filed before this
Court. They were docketed and entitled as follows: 1) G.R. No. 180147: Sara Lee Philippines, Inc. v.
Emilinda D. Macatlang, et al.; 2) G.R. No. 180148: Aris Philippines, Inc. v. Emilinda D. Macatlang, et al.;
3) G.R. No. 180149: Sara Lee Corporation v. Emilinda D. Macatlang, et al.; 4) G.R. No. 180150: Cesar C.
Cruz v. Emilinda D. Macatlang, et al.; 5) G.R. No. 180319: Fashion Accessories Phils., Inc. v. Emilinda D.
Macatlang, et al.; and 6) G.R. No. 180685: Emilinda D. Macatlang, et al. v. NLRC. In Resolutions dated
28 January 2008 and 18 February 2008, this Court resolved to consolidate these six (6) cases. 27

The Corporations argue that the Court of Appeals committed serious error in not dismissing Emilinda D.
Macatlang, et al.s petition due to the filing of two (2) separate petitions for certiorari, namely: Emilinda
Macatlang, et al. v. Aris Philippines in CA-G.R. SP No. 96363 (Macatlang petition) and Pacita S. Abelardo
v. NLRC, Aris Philippines, et al. in CAG.R. SP No. 95919 (Abelardo petition). These two petitions, the
Corporations aver, raise identical causes of action, subject matters and issues, which are clearly
violative of the rule against forum-shopping. Moreover, the petitioners in the Abelardo petition 28 consist
of 411 employees,29 all of whom are also petitioners in the Macatlang petition. The Corporations
question the authority of Emilinda D. Macatlang to file and sign the verification and certification of non-
forum shopping because Resolusyon Bilang09-01-1998 (Resolusyon) dated 5 September 1998 did not
make any specific reference or authority that Emilinda D. Macatlang can sign the verification and
certification against forum shopping on behalf of the other complainants. The Corporations claim that
the Macatlangs petition failed to state the material dates, such as when the NLRC order and resolution
were received and when the motion for reconsideration thereof was filed. 30

The Corporations impute another error on the Court of Appeals when it did not dismiss the petition for
being moot and academic despite the fact that on 19 December 2006, the NLRC had already set aside
the decision of the Labor Arbiter. They defend the validity of the NLRC resolution in the absence of a
temporary restraining order or writ of preliminary injunction issued by the Court of Appeals. 31

The Corporations assail the Court of Appeals in directing the posting of an additional appeal bond of P1
Billion. They contend that the Court of Appeals overlooked the fact that Macatlang, et al., had already
received their separation pay of P419 Million and P15 Million Benevolent Fund which went to the
union.32 The Court of Appeals also failed to exclude the amount awarded to complainants as damages
which under the NLRC Rules have to be excluded. The Corporations seek a liberal interpretation to the
requirement of posting of appeal bond in that the NLRC has the power and authority to set a reduced
amount of appeal bond.33

SLPI also adds that their right to due process was allegedly violated for the following reasons: first, it
was never impleaded in the complaints; second, the requirements of service of summons by
publication were not complied with as admitted by the labor arbiter himself thereby making it
defective; and third, there was no showing that there was prior resort to service of summons to the
duly authorized officer of the company before summons by 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 attention is the NLRCs ruling on the appeal bond. FAPI argues that the Court of Appeals has no
basis in stating that: (1) there were 7,637 employees of Aris who were already laid off and became
complainants when there are in fact only 5,984 employees of Aris involved in the illegal dismissal case;
(2) that the P419 Million was not proven to have been paid to the complainants when as a matter of
fact, records of the NLRC revealed that the amount was actually paid by Aris to its employees; and (3)
that a dummy subsidiary referring to FAPI was formed when records disclose that the ownership,
incorporators, officers, capitalization, place of business, and product manufactured by 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 of the Corporations had not been perfected in accordance with Article 223 of the Labor
Code when they failed to post the amount equivalent to the monetary award in the judgment appealed
from amounting to P3.45 Billion. Emilinda D. Macatlang, et al., submit that the P1 Billion bond is not
equivalent to the monetary award of P3.45 Billion. More importantly, Emilinda D. Macatlang, et al.,
accused the Court of Appeals of extending the period of appeal by prescribing an additional amount to
be paid within a reasonable period of time, which period it likewise determined, in contravention of
Article 223 of the Labor Code. Emilinda D. Macatlang, et al., expound that the filing of a bond outside
the period of appeal, even with the filing of a motion to reduce bond, would not stop the running of the
period of appeal. Emilinda D. Macatlang, et al., opine that the Court of Appeals has not been conferred
the 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 2009 by 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 intimate that the petitioners in the Fulido case are also former employees of
Aris whose employments were terminated as a result of Aris permanent closure. Petitioners submit
that Emilinda D. Macatlang, et al., and petitioners in the Fulidocase filed illegal dismissal cases before
the NLRC seeking identical reliefs. Considering the identity in essential facts and basic issues involved,
petitioners argue that there is compelling reason to adopt and incorporate by reference the conclusion
reached in the Fulido case.37

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 Abelardo
petition constitutes forum shopping.

2. Whether Emilinda D. Macatlang was duly authorized to sign the verification and certificate of non-
forum shopping 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
an 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 the Court of Appeals.

Forum shopping is the act of a litigant who repetitively avails of several judicial remedies in different
courts, simultaneously or successively, all substantially founded on the same transactions and on the
same essential facts and circumstances, and all raising substantially the same issues either pending in
or already resolved adversely by some other court, to increase his chances of obtaining a favorable
decision if not in one court, then in another.38

What is pivotal in determining whether forum shopping exists or not is the vexation caused the courts
and parties-litigants by a party who asks different courts and/or administrative agencies to rule on the
same or related cases and/or grant the same or substantially the same reliefs, in the process creating
the possibility of conflicting 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 will amount 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 rights asserted and relief prayed for, the relief being founded on the same
acts; and (c) the identity in the two cases should be such that the judgment which may be rendered in
one would, regardless of which party is successful, 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 18 September 2006. Indeed, these two petitions assailed the same order and resolution of
the NLRC in NLRC CA No. 046685-05, entitled Emilinda Macatlang, et al. v. Aris Philippines, Inc., et al.,
and sought for the dismissal of the Corporations appeal for non-perfection because of failure to post
the required appeal bond. A judgment in either case 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
forum-shopping. The Macatlang petition consists of 5,984 dismissed employees of Aris while the
Abelardo petition has 411 dismissed employees, all of which were already included as petitioners in
the Macatlang petition. With respect to these 411 petitioners, they could be declared guilty of forum
shopping when they filed the Abelardo petition despite the pendency of the Macatlang petition. As a
matter of fact, the Abelardo petition was dismissed by the Court of Appeals in a Resolution dated 17
November2006 on the ground of a defective certification on non-forum shopping, among others. 41 The
Abelardo petition appears to be defective as the petition itself was replete with procedural infirmities
prompting the Court of Appeals to dismiss it outright. Instead of curing the defects in their petition,
petitioners in Abelardo revealed that pertinent documents which should have been attached with their
petition were actually submitted before the Sixteenth Division of the Court of Appeals where the
Macatlang petition was pending. Evidently, petitioners in Abelardo have foreknowledge of an existing
petition but nevertheless proceeded to file another petition and omitting to mention it in their
certification on non-forum shopping, either intentionally 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 Macatlang petition? The answer is no. Forum shopping happens when there is identity of the
parties or at least such as to represent the same interest in both actions. We do not agree that the 411
petitioners of the Abelardo petition are representative of the interest of all petitioners in Macatlang
petition. First, the number is barely sufficient to comprise the majority of petitioners in Macatlang
petition. Second, it would be the height of injustice to dismiss the Macatlang petition which evidently
enjoys the support of an overwhelming majority due to the mistake committed by petitioners in the
Abelardo petition. In the absence of substantial similarity between the parties in Macatlang and
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 issue of forum shopping raised by petitioners therein precisely because at the
time it rendered the assailed decision, the Abelardo petition had already been summarily dismissed.

V.

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

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

a. Na, kami ay katawanin sa kaso o mga kaso laban sa mga nabanggit na Kompanya: ARIS, FAPI
ATSARA LEE CORP./SARA LEE PHILS., INC.at sa mga opisyales ng mga nabanggit; pirmahan ang
anumang demanda o "complaint" at lahat namga kaukulang papeles tulad ng Position Paper, Reply,
Rejoinder, Memorandumat iba pang papeles na may kinalaman o patungkol sakasong ito simula sa
NLRC, Court of Appeals, hanggang sa Korte Suprema;

b. Na, aming malayang iniaatangsa kanila ang karapatan upang makipagkasundo sa mga nademanda
sa pamamagitan ng isang "Compromise Agreement"o Kasunduan, gayon din ang karapatang
tanggapin ang kabuuang kabayaran sa aregluhan sa kaso na ayon sa kanilang pagsusuri ay mabuti at
makatarungan para sa amin, kaakibat ng aming mga pirmang tanda ng pagsang-ayon ito bilang
mayoria na nagdemanda o tanggapin ang 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
porsiyento (10%)ng aming "total claims"bilang attorneys fees ng aming humawak na abogado/legal
adviser: sina Atty. Ernesto R. Arellano and/or Villamor A. Mostrales at gayon din sa karagdagang
panagot sa kanilang ginastos, gagastusin sa pagtatanggol ng kaso bilang miscellaneous expensessa
kanilang ma[a]yos na pagsulong at 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 their attorney-in-fact to perform the following acts: 1) to represent them in the
case/cases filed against Aris, FAPI, SLC, and SLPI; sign any complaint, pleadings, or any other
documents pertinent or related to the instant case brought before the NLRC, Court of Appeals, and
Supreme Court; 2) to enter into any compromise agreement or settlement; and 3) to receive the full
payment as a consequence of any settlement. The first act necessarily encompasses the authority to
sign any document related to NLRC NCR No. 00-04-03677-98. The petition for review on certiorari is
one of these documents. Supreme Court Circular Nos. 28-91 and 04-94 require a Certification of Non-
Forum Shopping in any initiatory pleading filed before the Supreme Court and the Court of Appeals
while Section 1, Rule 45 of the Rules of Civil Procedure requires the petition for review on certiorari to
be verified, thereby making the verification and certification of non-forum shopping essential elements
of a petition for review 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 of Macatlang to state the material dates in the petition. Section 3, Rule 46 of the Rules of Court
mandates that in a petition for certiorari before the Court of Appeals, the material dates showing when
notice of the judgment orfinal order or resolution assailed was received, when the motion for
reconsideration was filed, and when notice of the denial thereof was received, must be indicated.
Under the same rule, failure to state the material dates shall be a ground for dismissal of the petition.
The rationale for the requirement is to enable the appellate court to determine whether the petition
was filed within the period fixed in the rules.43 However, the strict requirements of the law may be
dispensed with in the interest of justice. It may not be amiss to point out this Courts ruling in the case
of 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, provided the date of his receipt, i.e., 9 May 2006, of the RTC Resolution dated 18 April 2006
denying his Motion for Reconsideration is duly alleged in his Petition. In the recent case of Great
Southern Maritime Services Corporation v. Acua, we held that "the failure to comply with the rule on a
statement of material dates in the petition may be excused since the dates are evident from the
records." The more material date for purposes of appeal to the Court of Appeals is the date of receipt
of the trial court's order denying the motion for reconsideration. The other 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 received the Resolution of the NLRC on 6 July 2006, it can be determined whether the appeal to
the Court of Appeals was filed within the 60-day reglementary period. And as a matter of fact, the
appeal was filed on 8 September 2006, and well within the 60-day period.

VII.

Having disposed the procedural issues, we now tackle the Corporations arguments, in the main,
calling for a reduction of the appeal bond.
Well-settled is the doctrine that appeal is not a constitutional right, but a mere statutory privilege.
Hence, parties who seek to avail themselves of it must comply with the statutes or rules allowing
it.46 The primary rule governing appeal 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 to the Commission by any or both parties within ten (10)calendar days from receipt of such
decisions, awards, or orders. Such appeal may be entertained only on any of the following grounds:

a. If there is prima facie evidence of abuse of discretion on the part of the Labor Arbiter;

b. If the decision, order or award was secured through fraud or coercion, including graft and corruption;

c. If made purely on questions of law; and d. If serious errors in the findings of facts are raised which
would cause grave or irreparable damage or injury to the appellant.

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

Article 223, under Presidential Decree No. 442, was amended by Republic Act No. 6715 to include the
provision on 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 requisites must 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 failure to post the bond. The Court favored the appellant partly because the appeal was made just
after six (6) days from the effectivity of the Interim Rules of Republic Act No. 6715. The Court observed
that both parties did not know about the new rule yet.

It is presumed that an appeal bond is only necessary in cases where the labor arbiters decision or
order contains a monetary award. Conversely, when the labor arbiter does not state the judgment
award, posting of bond may be excused.

In YBL, the exact total amount due to the private respondents as separation pay was not stated which
would have been 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 to post the supersedeas bond. Nevertheless, the Court gave due course to the appeal for
"the broader interests of justice and the desired objective of resolving controversies on the merits."
The amount of the supersedeas bond could not be determined and it was only in the NLRC order that
the amount was specified and which bond, after extension 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 the failure 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. The Fifth Division of the Court of Appeals 53 postulated that "respondents cannot be expected
to post such appeal bond equivalent to the amount of the monetary award when the amount thereof
was not included in the decision of the labor arbiter." The computation of the amount awarded to
petitioner was not stated clearly in the decision of the labor 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
bond equivalent to the amount of the monetary award is not required to be posted. Erectors, Inc. v.
NLRC54 is a good example on this point. The NLRCs order to post a bond of P1,576,224.00 was nullified
because the bond was erroneously computed on the basis of the salary which the employee was no
longer receiving at the time of his separation.

Also, since the computation of the award in Star Angel Handicraft v. NLRC 55 was based on erroneous
wage and 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 of the alleged erroneous computation by the labor arbiter of the monetary award. While the labor
arbiter awardedP5,480,484.25 as retirement benefits, only P5,072,277.73, according to the
respondent's computation, was due and 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) based on a patently erroneous computation. Sans these two (2) instances, the appellant is
generally required to post a 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. By explicit provision of law, an appeal is perfected only upon the posting of a cash or surety bond.
The posting of the appeal bond within the period provided by law is not merely mandatory but
jurisdictional.57 The reason behind the 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 to assure the workers that if they prevail in the case, they will receive the money judgment in
their favor upon the dismissal of the employer's appeal. It was intended to discourage employers from
using an appeal to delay, or 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,61Sy v. ALC,62 Ciudad Fernandina Food Corporation Employees Union-Association Labor Unions v.
Court of Appeals,63 and Stolt-Nielsen Maritime Services, Inc. v. NLRC, 64 did not post a full or partial
appeal bond, it was held 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 other businesses to post the required bond. The Court did not find as acceptable petitioners
excuse, that "[using] funds from sources other than that earned from [its company is not] a sound
business judgment" to exempt it from posting an appeal bond.

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

The labor arbiters decision in Santos v. Velarde67 stated the exact award of backwages to be paid by
petitioner, thus the Court affirmed the dismissal of the appeal by the non-payment of the appeal bond
within the 10-day period provided by law.

Even if petitioner in Heritage Hotel Manila v. NLRC68 questioned as basis of the appeal bond the
computation of the monetary award, the Court did not excuse it from posting a bond in a reasonable
amount or what it believed to be the correct amount.
In Banahaw Broadcasting Corporation v. Pacana III,69 the NLRC issued an order denying petitioners
motion for recomputation 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 for Reconsideration on an entirely new ground, we held that the NLRC cannot be said to have
committed grave abuse 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
cases where: (1) there was substantial compliance with the Rules, (2) surrounding facts and
circumstances constitute meritorious grounds to reduce the bond, (3) a liberal interpretation of the
requirement of an appeal bond would serve the desired objective of resolving controversies on the
merits, or (4) the appellants, at the very least, 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 the filing of the motion to reduce the bond to that amount, as well as the filing of the
memorandum of appeal, all within the reglementary period, altogether constitute substantial
compliance with the Rules. In Intertranz Container Lines, Inc. v. Bautista, 73 this Court has relaxed the
appeal bond requirement when it was clear from the records that petitioners never intended to evade
the posting of an appeal bond. In Semblante v. Court of Appeals, 74 the Court stated that the rule on the
posting of an appeal bond cannot defeat the substantive rights of respondents to be free from an
unwarranted burden of answering for an illegal dismissal for which they were never responsible. It was
found that respondents, not being petitioners employees, could never have been dismissed legally or
illegally. In the recent case of Garcia v. KJ Commercial, 75 respondent showed willingness to post a
partial bond when it posted a P50,000.00 cash bond upon filing of a motion to reduce bond. In
addition, when respondents motion for reconsideration 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 duly authorized hearing officer involves a monetary award, an appeal by the employer shall be
perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly
accredited by the Commission or the Supreme Court in an amount equivalent to the monetary award,
exclusive of moral and exemplary damages and attorneys fees.

The employer as well as counsel shall submit a joint declaration under oath attesting that the surety
bond posted is 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. (As amended 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. In the NLRC New Rules of Procedure promulgated in 2002, another qualification to the reduction
of an appeal bond was added in Section 6 thereof:

No motion to reduce bond shall be entertained except on meritorious grounds, and only upon the
posting of a 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, shall not 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 is meritorious ground and (2) a bond in a reasonable amount is posted. Compliance with the
two conditions stops the running 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 an appeal bond, the same was insufficient, as it was not equivalent to the monetary award of
the Labor Arbiter. Moreover, when Ramirez sought a reduction of the bond, he merely said that the
bond was excessive and baseless 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
Cylinder, Mfg., Corp. v. Rollo,78 we found as acceptable reason for reducing the appeal bond the
downscaling of their operations considered together with the amount of the monetary award appealed.
In University Plans Incorporated 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 for the purpose would necessarily be less than the evidence required for a ruling on the
merits.80 As a matter of fact, in Star Angel, the NLRC was ordered to make a preliminary determination
on the merits for granting a reduction of the appeal bond. In University Plans, the Court took into
consideration the fact that petitioner was under receivership and it was possible that petitioner has no
liquid asset and it could not raise the amount of more thanP3Million within a period of 10-days from
receipt of the Labor Arbiters judgment. Therefore, the Court ordered a remand of the case to the NLRC
for the conduct of preliminary determination of the merit or lack of merit of petitioners motion to
reduce bond. The Court adopted the ruling in Nicol v. Footjoy Industrial Corp., where the case was also
remanded to the NLRC to determine the merits of the motion to reduce in view of our finding that the
NLRC in that case gravely abused its discretion when it dismissed Footjoys appeal, without even
receiving evidence 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 appellants lack of
financial capability to pay the full amount of the bond, the merits of the main appeal such as when
there is a valid claim that there was no illegal dismissal to justify the award, the absence of an
employer-employee relationship, prescription of claims, and other similarly valid issues that are raised
in the appeal. For the purpose of determining a meritorious ground, the NLRC is not precluded from
receiving evidence, or from making a preliminary determination of the merits of the appellants
contentions."82

In order to toll the running of the period to appeal once the motion for reduction is filed, McBurnie has
set a 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 to seek a reduction of the appeal bond are effectively carried out, without however defeating
the benefits of the bond requirement in favor of a winning litigant, all motions to reduce bond that are
to be filed with the NLRC shall be accompanied by the posting of a cash or surety bond equivalent to
10% of the monetary award that is subject of the appeal, which shall provisionally be deemed the
reasonable amount of the bond in the meantime that an appellants motion is pending resolution by
the Commission. In conformity with the NLRC Rules, the monetary award, for the purpose of computing
the necessary appeal bond, shall exclude damages and attorneys fees. Only after the posting of a
bond in the required percentage shall an appellants period to perfect an appeal under the 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 the running of the period to appeal, there is no hard and fast rule in determining whether the
additional bond to be posted 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
substantial compliance relative to the P789,000.00 judgment award. In Nicol, the P10 Million bond was
enough to perfect appeal 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 as compliant a P10 Million bond relative to the judgment award of P27 Million. In Pasig Cylinder
Mfg. Corp. v. Rollo, we ruled that the reduced appeal bond of P100,00.00 satisfies the requirement for
an appeal from the judgment award of P3.13 Million. In University Plans, the P30,000.00 bond was
accepted in perfecting an appeal from aP3.013 Million judgment.

In the case at bar, the motion to reduce bond filed by the Corporations was resolved by the NLRC in
the affirmative when it found that there are meritorious grounds in reducing the bond such as the huge
amount of the award 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 P4.5 Million bond posted by the Corporations as insufficient, hence
ordering them to post an additional P4.5 Million. Thus, 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 and raised 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 an average of Php452,140.00 separation pay for each of the 7,637 employees held to be
illegally dismissed by the employer who sought a reduction of the required Php3.453 BILLION appeal
bond because the employer allegedly put up Php428 Million which consists of the Php419 MILLION
unpaid commitment plus the Php9 Million already paid-up cash appeal bond.

Even if we consider Php 419 MILLION unpaid commitment plus the Php 9 Million already paid-up cash
appeal bond, the unpaid appeal bond is still Php 3.025 BILLION. Php428 Million is still miniscule
compared to the Php3.025 BILLION unpaid portion of the appeal bond. What the 7,637 workers need is
cash or surety guaranty in the event of renewed victory on appeal for the 7,637 petitioners-employees
who were awarded one month salary for every year of service as separation pay totaling Php3.453
BILLION Pesos. Php419 MILLION Pesos promise and the Php3.025 BILLION unpaid appeal bond both
become more obscure if the employer would be permitted to subsequently 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 is not unbridled and is subject to strict guidelines because Art. 223 of the Labor Codeis a
rule of jurisdiction that affords little leeway for liberal interpretation. The order of the NLRC reducing
the required appeal bond from Php 3.453 BILLION Pesos to only Php 9 MILLION Pesos is in grave abuse
of its discretion and therefore void, not to mention 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
reduce appeal bond.1wphi1 We have taken into consideration the Php 419 MILLION unpaid
commitment plus the Php 9 Million already paid-up cash appeal bond, and the resulting unpaid appeal
bond which is still Php 3.025 BILLION. We still deem it proper under the law and the Constitution for the
protection of labor that private respondents be required as pre-requisite to perfecting appeal, to POST,
within thirty (30) days from finality of this judgment, additional appeal bond of Php 1 BILLION Pesos, in
cash or surety, which amount is even less than one-third (1/3) of the original appeal bond required by
law, which We hold to be reasonable under the circumstances and to be based on the evidence
presented in this case. The additional appeal bond of Php 1 BILLION is equivalent to an average of Php
130,941.46 (instead of the original average of Php452,140.00) for each of the alleged illegally
dismissed 7,637 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 be excluded 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
the employer shall be perfected only upon the posting of a cash or surety bond issued by a reputable
bonding company duly accredited by the Commission in an amount equivalent to the monetary award
in the judgment appealed from.

For purposes of the bond required under Article 223 of the Labor Code, as amended, the monetary
award computed as of the date of promulgation of the decision appealed from shall be the basis of the
bond. For this 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 duly accredited by the regular courts, shall be acceptable. (Emphasis supplied). When the
rules were amended in 1993, attorneys fees were also excluded in the judgment award for the
purpose of computing the appeal bond, viz:

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

Subsequently, in an amendment by NLRC Resolution No. 01-02, Series of 2002, the rules in effect at
the time the appeal bond was interposed by the Corporations, the provision on exclusion of damages
and attorneys fees was retained:86

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

Thus, under the applicable rules, damages and attorneys fees are excluded from the computation of
the monetary award to determine the amount of the appeal bond. We shall refer to these exclusions as
"discretionaries," as distinguished from the "mandatories" or those amounts fixed in the decision to
which the employee is entitled upon application of the law on wages. These mandatories include
awards for backwages, holiday pay, overtime pay, separation 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 no question other than as regards the award of moral and/or exemplary damages. In Cosico, Jr.,
v. NLRC,88 the employer was held to have substantially complied with the requirement when it posted
the bond on time based on the monetary award for backwages and thirteenth month pay, excluding
the exorbitant award for moral and exemplary damages.

The judgment award in the instant case amounted to an immense P3.45 Billion. The award is broken
down as follows: backwages, separation pay, moral and exemplary damages. For purposes of
determining the reasonable amount 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 ranges from P170-P200. The average years of service ranges from 5-35 years. The backwages
were computed at 108 months or reckoned from the time the employees were actually terminated
until the finality of the Labor Arbiters Decision. Approximately, the amount to be received by an
employee, exclusive of damages and attorneys fees, is about P600,000.00. The Labor Arbiter granted
moral damages amounting to P10,000.00, and another P10,000.00 as exemplary damages. The total
number of employees receiving P20,000.00 each for damages is 5,984, bringing the total amount of
damages to P119,680,000.00. This amount should be deducted as well as the P419 Million unpaid
commitment plus the P 9 Million already paid-up cash appeal bond from the actual amount to
determine the 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 it reasonable to reduce the amount of the appeal bond to P725 Million. This directive already
considers that the award if not illegal, is extraordinarily huge and that no insurance company would be
willing to issue a bond for such big money. The amount of P725 Million is approximately 25% of the
basis above calculated. It is a balancing of the constitutional obligation of the state to afford protection
to labor which, specific to this case, is assurance that in case of affirmance of the award, recovery is
not negated; and on the other end of the spectrum, the opportunity of the employer to appeal.

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

The Corporations invoked the decision issued by the NLRC last 19 December 2006 which set aside the
labor arbiters decision and ordered remand of the case to the forum of origin to have the instant
petitions dismissed for being moot.

When the NLRC granted the motion to reduce the appeal bond and the Corporations posted the
required additional bond, the appeal was deemed to have been perfected. The act of the NLRC in
deciding the case was based on petitioners appeal of the labor arbiters ruling, which it deemed to
have been perfected and therefore, ripe for decision.

Prudence however dictates that the NLRC should not have decided the case on its merits during the
pendency of the instant petition. The very issue raised in the petitions determines whether or not the
appeal by the Corporations has been perfected. Until its resolution, the NLRC should have held in
abeyance the resolution of the case 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
MODIFIED. The Corporations are directed to post 1!725 Million, in cash or surety bond, within TEN ( 10)
days from the receipt of this DECISION. The Resolution of the NLRC dated 19 December 2006 is
VACATED for being premature and the NLRC is DIRECTED to act with dispatch to resolve the merits of
the case upon perfection of the appeal.

G.R. No. 182800 April 20, 2015

MANILA MINING CORPORATION, Petitioner,

vs.
LOWITO AMOR, ET. AL., Respondents.

DECISION

PEREZ, J.:

Compliance with the requirements for the perfection of an appeal from the decision of a Labor Arbiter
is at issue in this Rule 45 Petition for Review on Certiorari which primarily seeks the nullification of the
29 November 2007 Decision1 rendered by the then Twenty-Second Division of the Court of Appeals
(CA) in CA-G.R. SP No. 00609,2the decretal portion of which states:
WHEREFORE, the petition is hereby GRANTED. The Resolutions of the NLRC dated 25 April 2005 and 30
June 2007, respectively, are ANNULLED and SET ASIDE. The 25 October 2004 Resolution of the Labor
Arbiter is REINSTATED.

SO ORDERED.3

The facts are not in dispute.

Respondents Lowito Amor, Rollybie Ceredon, Julius Cesar, Ronito Martinez and Fermin Tabili, Jr. were
regular employees of petitioner Manila Mining Corporation, a domestic corporation which operated a
mining claim in Placer, Surigao del Norte, in pursuit of its business of large-scale open-pit mining for
gold and copper ore. In compliance with existing environmental laws, petitioner maintained Tailing
Pond No. 7 (TP No. 7), a tailings containment facility required for the storage of waste materials
generated by its mining operations. When the mine tailings being pumped into TP No. 7 reached the
maximum level in December 2000, petitioner temporarily shut down its mining operations pending
approval of its application to increase said faciltys capacity by the Department of Environment and
Natural Resources-Environment Management Bureau (DENR-EMB), Butuan City. Although the DENR-
EMB issued a temporary authority on 25 January 2001 for it to be able to continue operating TP No. 7
for another six (6) months and to increase its capacity, petitioner failed to secure an extension permit
when said temporary authority eventually lapsed.4

On 27 July 2001, petitioner served a notice, informing its employees and the Department of Labor and
Employment Regional Office No. XII (DOLE) of the temporary suspension of its operations for six
months and the temporary lay-off of two-thirds of its employees. 5 After the lapse of said period,
petitioner notified the DOLE on 11 December 2001 that it was extending the temporary shutdown of its
operations for another six months.6 Adversely affected by petitioners continued failure to resume its
operations, respondents filed the complaint for constructive dismissal and monetary claims which was
docketed as NLRC Case No. RAB-13-10-00226-2003 before the Regional Arbitration Branch No. XIII of
the National Labor Relations Commission (NLRC). On 25 October 2004, Executive Labor Arbiter
Benjamin E. Pelaez rendered a Decision holding petitioner liable for constructive dismissal in view of
the suspension of its operations beyond the six-month period allowed under Article 286 7 of the Labor
Code of the Philippines. Finding that the cause of suspension of petitioners business was not beyond
its control,8the Labor Arbiter applied Article 2839 of the same Code and disposed of the case in the
following wise:

WHEREFORE, premises considered, judgment is hereby entered:

1) Declaring [respondents] to have been constructively dismissed from their employment; and 2)
Ordering [petitioner] to pay xxx [respondents] their separation pay equivalent to one (1) month pay or
to at least one-half (1/2) month pay for every year of service, whichever is higher, a fraction of at least
six (6) months shall be considered as one whole year, moral damages and exemplary damages in the
amount of Ten Thousand Pesos (P10,000.00) and Five Thousand Pesos (P5,000.00), respectively, for
each of the [respondents] and attorneys fees equivalent to ten (10%) percent in the total amount of
TWO MILLION ONE HUNDRED THIRTY EIGHT THOUSAND ONE HUNDRED NINETY & 02/100 PESOS
(P2,138,190.02) ONLY x x x x

All other claims are dismissed for lack of merit.

SO ORDERED.10

Aggrieved, petitioner filed its memorandum of appeal before the NLRC11 and moved for the reduction
of the appeal bond to P100,000.00, on the ground that its financial losses in the preceding years had
rendered it unable to put up one in cash and/or surety equivalent to the monetary award. 12 In
opposition, respondents moved for the dismissal of the appeal in view of the fact that, despite receipt
of the appealed decision on 24 November 2004, petitioner mailed their copy of the memorandum of
appeal only on 7 February 2005. Respondents also argued that the appeal bond tendered by petitioner
was so grossly disproportionate to monetary award for the same to be considered substantial
compliance with the requirements for the perfection of an appeal from a Labor Arbiters
decision.13 Without addressing the procedural issues raised by respondents, however, the NLRC Fifth
Division went on to render a Resolution dated 25 April 2005 in NLRC CA No. M-008433-2005, reversing
the appealed decision and dismissing the complaint for lack of merit. Finding that the continued
suspension of petitioners operations was due to circumstances beyond its control, the NLRC ruled
that, under Article 283 of the Labor Code, respondents were not even entitled to separation pay
considering the eventual closure of their employers business due to serious business losses or
financial reverses.14

Unfazed by the denial of their motion for reconsideration in the NLRCs 30 June 2005
Resolution,15 respondents filed the Rule 65 petition for certiorari which was docketed as CA-G.R. SP No.
00609 before the Mindanao Station of the CA. Insisting that petitioners memorandum of appeal was
filed 65 days after the lapse of reglementary period for appeal, respondents called attention to the fact
that, as grossly inadequate as it already was vis--vis the P2,138,190.0216 monetary award adjudicated
in their favor, the check in the sum of P100,000.00 deposited by petitioner by way of appeal bond was
dishonored upon presentment for payment. Aside from the fact that the Labor Arbiters25 October
2004 Decision had already attained finality, respondents faulted the NLRC for applying Article 283 of
the Labor Code absent allegation and proof of compliance with the requirements for the closure of an
employers business due to serious business losses. 17 In its comment, on the other hand, petitioner
claimed that, having caused the same to be immediately funded, the check it issued for the appeal
bond had since been deposited by the NLRC. Insisting that the cessation of its operations was due to
causes beyond its control, petitioner argued that the subsequent closure of its business due to
business losses exempted it from paying separation pay. 18

On 29 November 2007, the CAs then Twenty-Second Division rendered the herein assailed decision,
granting respondents petition and nullifying the NLRCs 25 April 2005 Resolution. In reinstating the
Labor Arbiters 25 October 2004 Decision, the CA ruled that petitioner failed to perfect its appeal
therefrom considering that the copy of its 3 December 2004 Memorandum of Appeal intended for
respondents was served the latter by registered mail only on 7 February 2005. Aside from posting an
unusually smaller sum as appeal bond, petitioner was likewise faulted for replenishing the check it
issued only on 1 April 2005 or 24 days before the rendition of the assailed NLRC Decision. Applying the
principle that the right to appeal is merely a statutory remedy and that the party who seeks to avail of
the same must strictly follow the requirements therefor, the CA decreed that the Labor Arbiters
Decision had already attained finality and, for said reason, had been placed beyond the NLRCs power
of review.19 Petitioners motion for reconsideration of the foregoing decision was denied for lack of
merit in the CAs 2 May 2008 Resolution,20 hence, this Rule 45 petition for review on
certiorari.21 Petitioner seeks the reversal of the CAs 29 November 2007 Decision and 2 May 2008
Resolution on the following grounds:

THE COURT OF APPEALS GRAVELY ERRED IN RULING THAT PETITIONERS APPEAL FILED WITH THE
NATIONAL LABOR RELATIONS COMMISSION WAS FATALLY DEFECTIVE [SINCE IT] HAD FULLY COMPLIED
WITH THE REQUIREMENTS OF THE LABOR CODE FOR PERFECTING AN APPEAL.

THE COURT OF APPEALS COMMITTED A GRAVE ABUSE OF DISCRETION IN IMMEDIATELY SETTING ASIDE
THE DECISION OF THE NLRC WITHOUT REVIEWING THE MERITS OF THE CASE.

AT THE TIME OF THE PROMULGATION OF THE ASSAILED DECISION BY THE COURT OFAPPEALS, THE
HONORABLE SUPREME COURT HAD ALREADY AFFIRMED THE FINDING THAT PETITIONER WAS ALREADY
PERMANENTLY CLOSED DUE TO MASSIVE FINANCIAL LOSSES. 22

Time and again, it has been held that the right to appeal is not a natural right or a part of due process;
it is merely a statutory privilege, and may be exercised only in the manner and in accordance with the
provisions of law.23 A party who seeks to avail of the right must, therefore, comply with the
requirements of the rules, failing which the right to appeal is invariably lost. 24 Insofar as appeals from
decisions of the Labor Arbiter are concerned, Article 223 of the Labor Code of the Philippines 25 provides
that, "(d)ecisions, awards, or orders of the Labor Arbiter are final and executory unless appealed to the
[NLRC] by any or both parties within ten (10) calendar days from the receipt of such decisions, awards
or orders." In case of a judgment involving a monetary award, the same provision mandates that, "an
appeal by the employer may be perfected only upon the posting of a cash or surety bond issued by a
reputable bonding company duly accredited by the [NLRC] in the amount equivalent to the monetary
award in the judgment appealed from." Alongside the requirement that "the appellant shall furnish a
copy of the memorandum of appeal to the other party," the foregoing requisites for the perfection of
an appeal are reiterated under Sections 1, 4 and 6, Rule VI of the NLRC Rules of Procedure in force at
the time petitioner appealed the Labor Arbiters 25 October 2004 Decision, viz.:

SECTION 1. PERIODS OF APPEAL. - Decisions, resolutions or orders of the Labor Arbiter shall be final
and executory unless appealed to the Commission by any or both parties within ten (10)calendar days
from receipt of such decisions, resolutions or orders of the Labor Arbiter x x x x. If the 10th x x x x day
x x x x falls on a Saturday, Sunday or a holiday, the last day to perfect the appeal shall be the next
working day.

SECTION 4. REQUISITES FOR PERFECTION OF APPEAL. - (a) The Appeal shall be filed within the
reglementary period as provided in Section 1 of this Rule; shall be verified by appellant himself in
accordance with Section 4, Rule 7 of the Rules of Court, with proof of payment of the required appeal
fee and the posting of a cash or surety bond as provided in Section 6 of this Rule; shall be
accompanied by memorandum of appeal in three (3) legibly typewritten copies which shall state the
grounds relied upon and the arguments in support thereof; the relief prayed for; and a statement of
the date when the appellant received the appealed decision, resolution or order and a certificate of
non-forum shopping with proof of service on the other party of such appeal. A mere notice of appeal
without complying with the other requisites aforestated shall not stop the running of the period for
perfecting an appeal. (Italics supplied)

xxxx

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

xxxx

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

The filing of the motion to reduce bond without compliance with the requisites in the preceding
paragraph shall not stop the running of the period to perfect an appeal.

Having received the Labor Arbiters Decision on 24 November 2004, 26 petitioner had ten (10) calendar
days or until 4 December 2004 within which to perfect an appeal. Considering that the latter date fell
on a Saturday, petitioner had until the next working day, 6 December 2004, within which to comply
with the requirements for the perfection of its appeal. Our perusal of the record shows that, despite
bearing the date 3 December 2004, petitioners memorandum of appeal was subscribed before Notary
Public Ronald Rex Recidoro only on 6 December 2004.27 Without proof as to the actual date of filing of
said pleading being presented by both parties, the CA discounted the timeliness of its filing in light of
the established fact that the copy thereof intended for respondents was only served by registered mail
on 7 February 2005.28 Since proof of service of the memorandum on appeal is required for the
perfection of an appeal from the decision of the Labor Arbiter, the CA ruled that "respondents filed its
appeal not earlier than 07 February 200[5], which is way beyond the ten-day reglementary period to
appeal."29

As allegation is not evidence, however, the rule is settled that the burden of evidence lies with the
party who asserts the affirmative of an issue.30 As the parties claiming the non-perfection of
petitioners appeal, it was, therefore, respondents who had the burden of proving that said
memorandum of appeal was, indeed, filed out of time. By and of itself, the fact that the copy of
memorandum of appeal intended for respondents was served upon them by registered mail only on 7
February 2005 does not necessarily mean that petitioners appeal from the Labor Arbiters decision
was filed out of time. On the principle that justice should not be sacrificed for technicality, 31 it has been
ruled that the failure of a party to serve a copy of the memorandum to the opposing party is not a
jurisdictional defect and does not bar the NLRC from entertaining the appeal. 32 Considering that such
an omission is merely regarded as a formal lapse or an excusable neglect, 33 the CA reversibly erred in
ruling that, under the circumstances, petitioner could not have filed its appeal earlier than 7 February
2005.

The question regarding the appeal bond rises from the record which shows that, in addition to its
memorandum of appeal, petitioner filed a 6 December 2004 motion for the reduction of the appeal
bond on the ground that the cash equivalent of the monetary award and/or cost of the surety bond
have proven to be prohibitive in view of the tremendous business losses it allegedly sustained. As
supposed measure of its good faith in complying with the Rules, petitioner attached to its motion
Philam Bank Check No. 0000627153, dated 6 December2004, in the amount of P100,000.00 only. As
pointed out by respondents, however, said check was subsequently dishonored upon presentment for
payment for insufficiency of funds. In its 1 April 2005 Ex-Parte Manifestation, petitioner informed the
NLRC that it "only learned belatedly that the same check was dishonored" as there appeared to be "an
inadvertent mix-up as other checks issued for [its] other obligations were negotiated ahead [thereof],
leaving an insufficient balance in its account." As a consequence, petitioner claimed that "the
deficiency in deposit has been promptly and immediately replenished as soon as the check's dishonor
was reported" and that the same may already be re-deposited at any of NLRC's depositary banks. 34

The issue that has be devilled labor litigation for long has been clarified by the ruling in McBurnie v.
Ganzon, et al.,35 which built on and extended the ruling that while it is true that reduction of the appeal
bond has been allowed in meritorious cases36 on the principle that substantial justice is better served
by allowing appeals on the merits,37it has been ruled that the employer should comply with the
following conditions: (1) the motion to reduce the bond shall be based on meritorious grounds; and (2)
a reasonable amount in relation to the monetary award is posted by the appellant, otherwise the filing
of the motion to reduce bond shall not stop the running of the period to perfect an appeal. 38

The McBurnie ruling pronounced:

xxx

Furthermore, on the matter of the filing and acceptance of motions to reduce appeal bond, as provided
in Section 6, Rule VI of the 2011 NLRC Rules of Procedure, the Court hereby RESOLVES that henceforth,
the following guidelines shall be observed:

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

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

(c) Compliance with the foregoing conditions shall suffice to suspend the running of the 10-day
reglementary 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
final amount of bond that shall be posted by the appellant, still in accordance with the standards of
meritorious grounds and reasonable amount; and

(e) In the event that the NLRC denies the motion to reduce bond, or requires a bond that exceeds the
amount of the provisional bond, the appellant shall be given a fresh period of ten (10) days from notice
of the NLRC order within which to perfect the appeal by posting the required appeal bond. 39

In this case, we see that with no proof to substantiate its claim, petitioner moved for a reduction of the
appeal bond on the proferred basis of serious losses and reverses it supposedly sustained in the years
prior to the rendition of the Labor Arbiter's decision.

The first condition may be left for the nonce. As to the second condition, we may consider that the
amount ofP100,000.00 supposedly posted was provisional bond sufficient to suspend the running of
the 10-day reglementary period to perfect an appeal from the Labor Arbiter's decision. That would
however not improve petitioner's position one bit.

Respondent correctly called attention to the fact that the check submitted by petitioner was
dishonored upon presentment for payment, thereby rendering the tender thereof ineffectual. Although
the NLRC chose not to address the issue of the perfection of the appeal as well as the reduction of the
bond in its Resolution dated 25 April 2005, the record shows that petitioner only manifested its deposit
of the funds for the check 24 days before the resolution of its appeal or 116 days after its right to
appeal the Labor Arbiters decision had expired. Having filed its motion and memorandum on the very
last day of the reglementary period for appeal, moreover, petitioner had no one but itself to blame for
failing to post the full amount pending the NLRCs action on its motion for reduction of the appeal
bond. If redundancy be risked it must be emphasized that the posting of a bond is indispensable to the
perfection of an appeal in cases involving monetary awards from the decision of the Labor Arbiter.
Since it is the posting of a cash or surety bond which confers jurisdiction upon the NLRC, 40 the rule is
settled that non-compliance is fatal and has the effect of rendering the award final and executory. 41

Viewed in the light of the foregoing considerations, the CA cannot be faulted for no longer discussing
the merits of petitioners case.1avvphi1 Although appeal is an essential part of our judicial process, it
has been held, time and again, that the right thereto is not a natural right or a part of due process but
is merely a statutory privilege. Thus, the perfection of an appeal in the manner and within the period
prescribed by law is not only mandatory but also jurisdictional and failure of a party to conform to the
rules regarding appeal will render the judgment final and executory. Once a decision attains finality, it
becomes the law of the case and can no longer be revised, reviewed, changed or altered. The basic
rule of finality of judgment is grounded on the fundamental principle of public policy and sound
practice that, at the risk of occasional error, the judgment of courts and the award of quasi-judicial
agencies must become final at some definite date fixed by law. 42

Without necessarily resulting to a termination of employment, an employer may at any rate, bona fide
suspend the operation of its business for a period of not exceeding six months under Article 286 of the
Labor Code.43 While the employer is, on the one hand, duty bound to reinstate his employees to their
former positions without loss of seniority rights if the operation of the business is resumed within six
months, employment is deemed terminated where the suspension exceeds said period. 44 Not having
resumed its operations within six months from the time it suspended its operations on 27 July 2001, it
necessarily follows that petitioner is liable to pay respondents separation pay 45 computed at one (1)
month pay or at least one-half (1/2) month pay for every year of service, whichever is higher, 46 as well
as the damages and attorneys fees adjudicated by the Labor Arbiter. Without proof of the serious
business losses it allegedly sustained and/or compliance with the reportorial requirements under
Article 283 of the Labor Code, petitioner cannot expediently plead exemption from said liabilities due
to the supposed financial reverses which led to the eventual closure of its business. It is essentially
required that the alleged losses in business operations must be proven for, otherwise, said ground for
termination would be susceptible to abuse by scheming employers who might be merely feigning
business losses or reverses in their business ventures in order to ease out employees. 47 The condition
of business losses justifying retrenchment is normally shown by audited financial documents like yearly
balance sheets and profit and loss statements as well as annual income tax returns 48 which were not
presented in this case.

Neither can petitioner evade said liabilities on the strength of the 28 July 2005 Decision rendered by
the CA's Twenty-Second Division in CAG.R. SP No. 00072, entitled Rosita Asumen, et al. v. National
Labor Relations Commission, et al., where its employees' claim for separation pay was denied on
account of the subsequent closure of its business due to serious business losses and financial
reverses.49 Although the employees Rule 45 petition for review on certiorari had been denied in the 7
February 2007 Resolution issued by this Court's Second Division in UDK-13776, 50 the ruling in said case
can hardly be considered binding on respondents who were not parties thereto. As for the inequality in
benefits which would supposedly result if the CA's assailed decision and resolution were not reversed,
suffice it to say that this Court had sustained the claim for . separation pay of petitioner's employees in
the case of Manila Mining Corp Employees Association-Federation of Free Workers Chapter, et al. v.
Manila Mining Corporation, et al.51 Stare decisis is inapplicable; the matter of separation pay for
petitioner's employees has been decided case to case.

WHEREFORE, premises considered, the petition is DENIED for lack of merit

G.R. No. 195513 June 22, 2015

MARLON BED UY A, ROSARIO DUMAS* ALEX LEONOZA, RAMILO FAJARDO, HARLAN

LEONOZA, ALVIN ABUYOT, DINDO URSABIA,** BERNIE BESONA, ROMEO ONANAD,***
ARMANDO LIPORADA,**** FRANKFER ODULIO, MARCELO MATA, ALEX COLOCADO, JOJO
PACATANG, RANDY GENODIA and ISABINO B. ALARMA, JR., Petitioners,******
vs.
ACE PROMOTION AND MARKETING CORPORATION and GLEN********
HERNANDEZ, Respondents.

DECISION

DEL CASTILLO, J.:

Procedural rules should be relaxed if only to serve the ends of justice.

This Petition for Review on Certiorari1 assails the November 30, 2010 Decision2 of the Court of Appeals
(CA) in CA-G.R. SP No. 111536 affirming the February 23, 2009 Decision 3 and August 4, 2009
Resolution4 of the National Labor Relations Commission (NLRC), which granted respondents appeal
from the April 24, 2008 Decision5 of the Labor Arbiter and ordered the dismissal of petitioners
complaint for illegal dismissal. Likewise assailed is the February 3, 2011 CA Resolution 6 which denied
petitioners Motion for Reconsideration of the said CA Decision.

Antecedent Facts

Respondent Ace Promotion and Marketing Corporation (APMC), with respondent Glen Hernandez as its
President, is a contractor engaged in the deployment of workers to various companies to promote the
latters products through promotional and merchandising services. In pursuance of its business, APMC
entered into a Promotional Contract7 with Delfi Marketing, Inc.8 (Delfi) whereby the former undertook to
conduct promotional activities for the latters confectionery products. For this purpose, APMC
employed workers, including petitioners Marlon Beduya, Rosario Dumas, Alex Leonoza, Alvin Abuyot,
Dindo Ursabia, Bernie Bosona, Romeo Onanad, Armando Liporada, Frankfer Odulio, Marcelo Mata, Alex
Colocado, Jojo Pacatang, Randy Genodia and Isabino B. Alarma, Jr. (petitioners), as merchandisers and
assigned them to various retail outlets and supermarkets under fixed-term employment contracts. The
last contracts of employment9 that petitioners signed were until January 30, 2007.

In a letter10 dated December 27, 2006, Delfi notified APMC that their Promotional Contract will expire
effective January 31, 2007. On January 29, 2007, APMC informed petitioners, among other workers,
that their last day of work would be on January 30, 2007.

Proceedings before the Labor Arbiter

Before the Labor Arbiter, three separate complaints11 for illegal dismissal and money claims against
respondents were filed by petitioners and by other employees (complainants) w hose employment was
terminated allegedly by reason of the expiration of APMCs contract with Delfi. The said complaints,
docketed as NLRC-NCR Case No s. 00-02-01022-07, 00-02-0185-07 and 00-03-02756-07, were
consolidated.

In their Position Paper,12 complainants alleged that: they are regular employees of APMC, having
continuously worked in APMC since 1997; they are bona fide members of the Social Security System
(SSS) and the companys Home Development Mutual Fund (HDMF); the expiration of the Promotional
Contract between APMC and Delfi does not automatically result in their dismissal; and, the said
Promotional Contract is still subsisting as new workers were hired as their replacements. All of the
complainants asked for wage differentials, claiming that part of their wages were unlawfully withheld
unless they sign a waiver and quitclaim in favor of APMC, while 18 of them additionally prayed for
recovery of unpaid ECOLA.

Respondents, on the other hand, countered that AP MC is a legitimate job contractor that hires
employees for a specific job on a contractual basis. With respect to complainants, respondents claimed
that they were duly apprised of the contractual nature of their employment, its duration, working
hours, basic salaries, and the basic work policies as stipulated in their contracts of employment. And
since complainants were hired as merchandisers for Delfi, their employment automatically ended when
APMCs Promotional Contract with Delfi expired. On the complainants allegation of continuous
employment, respondents explained that, indeed, complainants were previously engaged as
merchandisers for a client, Goya, Inc. (Goya). But when Goyas business interest was sold to Delfi,
complainants fixed-term employment contracts also accordingly expired. They were then rehired and
reassigned to Delfi, again on a fixed-term basis, which employment was necessarily terminated upon
the end of the term. In view of this, respondents denied liability over complainants money claims,
damages, and attorneys fees.

In a Decision13 dated April 24, 2008, the Labor Arbiter, after finding no credible evidence to prove that
they were employed on a contractual basis, declared complain ants to have been illegally dismissed.
He found unconvincing APMCs allegation that complainants employment was terminated due to the
expiration of its contract with Delfi considering that it continued to hire new employees as
replacements for complainants. This, the Labor Arbiter opined, infringed upon complainants right to
security of tenure. On the other hand, he viewed complainants continuous employment with APMC for
a considerable length of time and the fact that they are SSS and HDMF members, as indications of
their being regular employees. Thus, he ordered complainants reinstatement or payment of separation
pay, payment of backwages, unpaid wages, ECOLA, moral and exemplary damages, and attorneys
fees. The dispositive portion of the Labor Arbiters Decision reads:

WHEREFORE, premises all considered, judgment is hereby rendered finding the dismissal illegal and
ordering respondents, as follows:

1. To reinstate complainants to their former position with full backwages to be reckoned from the date
of their dismissal up to the finality of this decision.

2. In the alternative, to pay them x x x their backwages plus separation pay equivalent to half month
salary for every year of service if employment is no longer tenable.

3. To pay the named eighteen (18) employees x x x their unpaid ECOLA for one (1) year.

4. To pay complainants x x x their unpaid wages for fifteen (15) days.

5. To pay moral damages in the amount of P10,000.00 each.

6. To pay exemplary damages [in] the [amount] of P5,000.00 each.

7. To pay attorneys fees equivalent to 10% of the total monetary award.

The computation of the monetary award as computed by the Computation Division of this Office is
attached hereto and forms part of this decision.

SO ORDERED.14

Proceedings before the National Labor Relations Commission

Respondents filed a Memorandum of Appeal with Motion for Reduction of Bond 15 with the NLRC. They
maintained that complainants were contractual employees. As such, their contracts of employment
were terminated upon the expiration of APMCs Promotional Contract with Delfi. Anent their motion for
reduction of appeal bond, respondents contended that the awards granted to complainants amounting
to 6,269,856.89 should be decreased considering that:

(1) eight complainants did not sign the position paper submitted to the Labor Arbiter and therefore, the
monetary awards given in their favor should be excluded in the computation of the total award; (2)
nine complainants already withdrew their complaints as shown by their Affidavits of Desistance; 16 (3)
assuming that separation pay was correctly awarded, the computation thereof should start from year
2003 when complainants started working for Goya and not from year 1997 as computed by the Labor
Arbiter; and (4) the backwages should be computed only up to January 31, 2007 or up to the expiration
of the Promotional Contract with Delfi and not until July 31, 2008. Respondents attached a supersede
as bond17 in the amount of 437,210.00 along with their appeal.

In their Opposition with Motion to Dismiss Appeal, 18 complainants prayed for the dismissal of
respondents appeal based on insufficiency of the bond posted. This thus resulted in the non-perfection
of the appeal, and consequently, the Labor Arbiters Decision had become final and executory.

Without acting on respondents motion for reduction of bond and the complainants opposition thereto,
the NLRC rendered a Decision19 on February 23, 2009 finding complainants to be contractual
employees hired for a specific duration. The NLRC noted that complainants were duly informed at the
commencement of their employment that they were hired for a definite period and for a specific
project, i.e., Delfi, and that they voluntarily agreed to these and the other terms of their employment
contracts. Hence, when the specific project or undertaking for which they were hired cease d, their
employment also ceased. They were therefore not illegally dismissed. In the ultimate, the NLRC
reversed the Labor Arbiters Decision and dismissed the complaints for illegal dismissal. It, however,
affirmed the awards of unpaid wages and ECOLA in favor of complainants. Thus:

WHEREFORE, premises considered, judgment is hereby rendered GRANTING the instant appeal. The
Decision of the Labor Arbiter dated 24 April 2008 is hereby reversed and set aside, and a new one is
issued dismissing the complaint. Respondents-Appellants are, however, directed to cause the
immediate satisfaction of complainants-appellees unpaid wages for fifteen (15) days and ECOLA for
one (1) year.

SO ORDERED.20

In their Motion for Reconsideration,21 complainants maintained that the

437,210.00 appeal bond is in sufficient and unreasonable in relation to the total monetary award of
6,269,856 .89, which should have warranted the dismissal of respondents appeal. Complainants
likewise pointed out that the NLRC gravely abused its discretion when it did not re solve respondents
motion to reduce bond and their opposition thereto with motion to dismiss before rendering its
decision granting the appeal. Complainants Motion for Reconsideration was, however, denied by the
NLRC in its Resolution22 dated August 4, 2009.

Proceedings before the Court of Appeals

Some of the complainants, including petitioners, filed a Petition for Certiorari 23 with the CA. They
insisted that the NLRC gravely abused its discretion in granting respondents appeal despite the
latters failure to perfect the same since the appeal bond filed was grossly insufficient and inadequate.
Consequently, the Labor Arbiters Decision had already become final and executory.

On November 30, 2010, the CA rendered a Decision 24 dismissing the petition. It found respondents
willingness and good faith in complying with the requirements as sufficient justification to relax the
rule on posting of an appeal bond. Moreover, the CA agreed with the NLRC in finding that complainants
were not illegally dismissed. The termination of their employment was simply brought about by the
expiration of the fixed period stipulated in their contract s that they voluntarily signed after the terms
thereof were fully explained to them.

Complainants Motion for Reconsideration25 was denied by the CA in its Resolution 26 of February 3,
2011.
Thus, petitioners, from among all the complainants, are now before this Court through the present
Petition.

Issues

(a)

WHETHER X X X THE FILING OF APPEAL WITH MOTION TO REDUCE APPEAL BOND WILL TOLL THE
RUNNING OF THE PERIOD TO PERFECT AN APPEAL

(b)

WHETHER X X X AN APPEAL BOND IN THE AMOUNT OF P473,210.00 IS REASONABLE IN RELATION TO [A

POSSIBLE] MONETARY AWARD OF 6,269,856.00

(c)

WHETHER X X X THE DECISION RENDERED BY THE LABOR ARBITER IS DEEMED FINAL AND EXECUTORY
AS THE APPEAL WAS NOT PERFECTED

(d)

WHETHER X X X IT IS PROCEDURALLY CORRECT TO PASS JUDGMENT ON A CASE WHEN THERE IS STILL

A PENDING MOTION TO BE RESOLVED27

For respondents alleged failure to comply with the jurisdictional requirements on appeal bonds,
petitioners maintain that the NLRC did not acquire jurisdiction over respondents appeal. Moreover,
they claim that the NLRC erred in resolving the merits of the appeal without first ruling on respondents
motion to reduce appeal bond and their opposition thereto with motion to dismiss.

Our Ruling

The Petition has no merit.

Article 223 of the Labor Code provides:

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

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 finding of facts are raised which would cause grave or irreparable damage or
injury to the appellant.
In case of a judgment involving a monetary award, an appeal by the employer may be perfected only
upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by
the Commission in the amount equivalent to the monetary award in the judgment appealed from.

While Sections 4(a) and 6 of Rule VI of the 2005 Revised Rules of Procedure of the NLRC provide:

SECTION 4. REQUISITES FOR PERFECTION OF APPEAL. (a) The Appeal shall be: 1) filed within the
reglementary period as provided in Section 1 of this Rule; 2) verified by appellant himself in
accordance with Section 4, Rule 7 of the Rules of Court, as amended; 3) in the form of a memorandum
of appeal which shall state the grounds relied upon and the arguments in support thereof, the relief
prayed for, and with a statement of the date the appellant received the appealed decision, resolution
or order; 4) in three (3) legibly written or printed copies; and 5) accompanied by i) proof of payment of
the required appeal fee; ii) posting of a cash or surety bond as provided in Section 6 of this Rule; iii) a
certificate of non-forum shopping; and iv) proof of service upon the other parties.

SECTION 6. BOND. In case the decision of the Labor Arbiter or the Regional Director involves a
monetary award, an appeal by the employer may be perfected only upon the posting of a bond which
shall either be in the form of cash deposit or surety bond equivalent in amount to the monetary award,
exclusive of damages and attorneys fees.

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

The mere filing of a motion to reduce bond without complying with the requisites in the preceding
paragraphs shall not stop the running of the period to perfect an appeal.

It is thus clear from the foregoing that the filing of supersede as bond for the perfection of an appeal is
mandatory and jurisdictional and failure to comply with this requirement renders the decision of the
Labor

Arbiter final and executory.28

However, this Court, in many cases,29 has relaxed this stringent requirement whenever justified. Thus,
the rules, specifically Section 6 of Rule VI of the 2005 Revised Rules of Procedure of the NLRC, allows
the reduction of the appeal bond subject to the conditions that: (1) the motion to reduce the bond shall
be based on meritorious grounds; and (2) a reasonable amount in relation to the monetary award is
posted by the appellant. Otherwise, the filing of a motion to reduce bond shall not stop the running of
the period to perfect an appeal. Still, the rule that the filing of a motion to reduce bond shall not stop
the running of the period to perfect an appeal is not absolute. 30 The Court may relax the rule under
certain exceptional circumstances which include fundamental consideration of substantial justice,
prevention of miscarriage of justice or of unjust enrichment and special circumstances of the case
combined with its legal merits, and the amount and the issue involved. 31 Indeed, in meritorious cases,
the Court was propelled to relax the requirements relating to appeal bonds such as when there are
valid issues raised in the appeal32 and in the absence of any valid claims against the employer. 33

In the case at bench, the Court finds that respondents motion to reduce appeal bond was predicated
on meritorious and justifiable grounds. First, the fact that eight complainants failed to verify or affix
their signatures on the position paper filed before the Labor Arbiter merits the exclusion of the
monetary awards adjudged to them. In Martos v. New San Jose Builders, Inc., 34 it was held that the
failure of some of the complainants therein to verify their position paper submitted before the Labor
Arbiter brought about the dismissal of the complaint as to them who did not verify. The Court went on
to say that their negligence and passive attitude towards the rule on verification amounted to their
refusal to further prosecute their claims. Second, the withdrawal of seven complainants 35 in this case
likewise warrants the reduction of the monetary award rendered against respondents. Suffice it to say
that the said seven complainants are bound by the Affidavits of Desistance which are presumed to
have been freely and voluntarily executed by them. Accordingly, they no longer participated in the
subsequent proceedings after having received their last salaries and due benefits.

Petitioners, however, posit that the amount of the appeal bond posted, i.e.,

437,210.00, is unreasonable and inadequate vis-a-vis the total monetary award of 6,269,856.83. What
they consider as reasonable percentage of the total monetary award is at least 30% thereof.

In the recent case of Mcburnie v. Ganzon,36 the Court has set a provisional percentage of 10% of the
monetary award, exclusive of damages and attorneys fees, as a reasonable amount of bond that an
appellant should post pending resolution by the NLRC of a motion to reduce bond. It is only after the
posting of this bond that an appellants period to perfect an appeal is suspended. Here, after deducting
from the total monetary award the amount of attorneys fees and the amounts awarded to those
complainants who did not verify their position papers and those who had withdrawn their complaints,
the total monetary award amounts to only more than 3 million. 37 Hence, the appeal bond of
437,210.00 posted by respondents is in fact even more than 10% of the said total monetary award.
Thus, applying the same parameter set in Mcburnie, the Court finds the amount of bond posted by
respondents in the present case to be reasonable.

In any event, the Court notes that in Mcburnie, it was held that the required 10% of the monetary
award as appeal bond is merely provisional given that the NLRC still retains the authority to exercise its
full discretion to resolve a motion for the reduction of bond and determine the final amount of bond
that should be posted by an appellant in accordance with the standards of meritorious grounds and
reasonable amount.38

In consideration of the foregoing, the Court finds no merit in petitioners contention that the NLRC fa
iled to establish its jurisdictional authority over respondents appeal. Again, the filing of a motion to
reduce bond predicated on meritorious grounds coupled with the posting of a reasonable amount of
cash or surety bond suffice to suspend the running of the period within which to appeal. As discussed,
respondents in this case have substantially complied with these requirements and, on account thereof,
their appeal from the Labor Arbiters Decision was timely filed. Clearly, the NLRC was conferred with
jurisdiction over respondents appeal thus placing the same within the power of the said labor tribunal
to review.

With respect to the NLRCs failure to initially ac t upon respondents motion to reduce bond and
petitioners opposition thereto with motion to dismiss, suffice it to say that the same did not divest the
NLRC of its authority to resolve the appeal on its substantive matters. After all, the NLRC is not bound
by technical rules of procedure and is allowed to be liberal in the application of its rules in deciding
labor cases.39 Further, the NLRC is mandated to use every and all reasonable means to ascertain the
fact s in each case speedily and objectively, without regard to technicalities of law or procedure, all in
the interest of due process.40

Coming now to the substantive matters, the Court finds that the CA correctly affirmed the NLRC
Decision which granted respondents appeal and dismissed the illegal dismissal complaints. As aptly
found by them, petitioners were fixed-term employees whose respective contracts of employment had
already expired. Therefore, there can be no illegal dismissal to speak of. The following observations
made by the CA were supported by substantial evidence on record, viz:

We find and so rule that private respondents are independent contractors, and petitioners were
deployed to Delfi Foods to render various services.1wphi1 This was admitted by petitioners during the
proceedings before the labor tribunal. The relationship between the parties is governed by the
Employment Contract which petitioners voluntarily signed before being deployed at Delfi Foods.

The NLRC extensively quoted the aforesaid contract which primarily provided that petitioners
employment was for a fixed period, that is, from 1 December 2006 until 30 January 2007. Significantly,
no allegations were made that petitioners were forced or pressure d into affixing their signatures upon
the contract. There is likewise no concrete proof that private respondents prevailed upon petitioners,
exercising moral dominance over the latter, to accept the conditions set forth in the said contract.
Having accepted the terms thereof, petitioners were bound by its unequivocal stipulation that their
employment was not permanent, but would expire at the end of the fixed period. 41

WHEREFORE, the Petition is DENIED. The November 30, 2010 Decision and February 3, 2011
Resolution of the Court of Appeals in CA-G.R. SP No. 111536 are AFFIRMEd

G.R. No. 198587, January 14, 2015

SAUDI ARABIAN AIRLINES (SAUDIA) AND BRENDA J. BETIA, Petitioners, v. MA. JOPETTE M.
REBESENCIO, MONTASSAH B. SACAR-ADIONG, ROUEN RUTH A. CRISTOBAL AND LORAINE S.
SCHNEIDER-CRUZ, Respondents.

DECISION

LEONEN, J.:

All Filipinos are entitled to the protection of the rights guaranteed in the Constitution.

This is a Petition for Review on Certiorari with application for the issuance of a temporary restraining
order and/or writ of preliminary injunction under Rule 45 of the 1997 Rules of Civil Procedure praying
that judgment be rendered reversing and setting aside the June 16, 2011 Decision 1 and September 13,
2011 Resolution2 of the Court of Appeals in CA-G.R. SP. No. 113006.

Petitioner Saudi Arabian Airlines (Saudia) is a foreign corporation established and existing under the
laws of Jeddah, Kingdom of Saudi Arabia. It has a Philippine office located at 4/F, Metro House Building,
Sen. Gil J. Puyat Avenue, Makati City.3 In its Petition filed with this court, Saudia identified itself as
follows:chanroblesvirtuallawlibrary

1. Petitioner SAUDIA is a foreign corporation established and existing under the Royal Decree No. M/24
of 18.07.1385H (10.02.1962G) in Jeddah, Kingdom of Saudi Arabia ("KSA"). Its Philippine Office is
located at 4/F Metro House Building, Sen, Gil J. Puyat Avenue, Makati City (Philippine Office). It may be
served with orders of this Honorable Court through undersigned counsel at 4 th and 6th Floors, Citibank
Center Bldg., 8741 Paseo de Roxas, Makati City.4 (Emphasis supplied)

Respondents (complainants before the Labor Arbiter) were recruited and hired by Saudia as Temporary
Flight Attendants with the accreditation and approval of the Philippine Overseas Employment
Administration.5 After undergoing seminars required by the Philippine Overseas Employment
Administration for deployment overseas, as well as training modules offered by Saudia (e.g., initial
flight attendant/training course and transition training), and after working as Temporary Flight
Attendants, respondents became Permanent Flight Attendants. They then entered into Cabin Attendant
contracts with Saudia: Ma. Jopette M. Rebesencio (Ma. Jopette) on May 16, 1990; 6Montassah B. Sacar-
Adiong (Montassah) and Rouen Ruth A. Cristobal (Rouen Ruth) on May 22, 1993; 7and Loraine
Schneider-Cruz (Loraine) on August 27, 1995.8

Respondents continued their employment with Saudia until they were separated from service on
various dates in 2006.9

Respondents contended that the termination of their employment was illegal. They alleged that the
termination was made solely because they were pregnant. 10
As respondents alleged, they had informed Saudia of their respective pregnancies and had gone
through the necessary procedures to process their maternity leaves. Initially, Saudia had given its
approval but later on informed respondents that its management in Jeddah, Saudi Arabia had
disapproved their maternity leaves. In addition, it required respondents to file their resignation
letters.11

Respondents were told that if they did not resign, Saudia would terminate them all the same. The
threat of termination entailed the loss of benefits, such as separation pay and ticket discount
entitlements.12

Specifically, Ma. Jopette received a call on October 16, 2006 from Saudia's Base Manager, Abdulmalik
Saddik (Abdulmalik).13 Montassah was informed personally by Abdulmalik and a certain Faisal Hussein
on October 20, 2006 after being required to report to the office one (1) month into her maternity
leave.14 Rouen Ruth was also personally informed by Abdulmalik on October 17, 2006 after being
required to report to the office by her Group Supervisor.15 Loraine received a call on October 12, 2006
from her Group Supervisor, Dakila Salvador. 16

Saudia anchored its disapproval of respondents' maternity leaves and demand for their resignation on
its "Unified Employment Contract for Female Cabin Attendants" (Unified Contract). 17 Under the Unified
Contract, the employment of a Flight Attendant who becomes pregnant is rendered void. It
provides:chanroblesvirtuallawlibrary

(H) Due to the essential nature of the Air Hostess functions to be physically fit on board to provide
various services required in normal or emergency cases on both domestic/international flights beside
her role in maintaining continuous safety and security of passengers, and since she will not be able to
maintain the required medical fitness while at work in case of pregnancy, accordingly, if the Air
Hostess becomes pregnant at any time during the term of this contract, this shall render
her employment contract as void and she will be terminated due to lack of medical
fitness.18 (Emphasis supplied)

In their Comment on the present Petition, 19 respondents emphasized that the Unified Contract took
effect on September 23, 2006 (the first day of Ramadan),20 well after they had filed and had their
maternity leaves approved. Ma. Jopette filed her maternity leave application on September 5,
2006.21Montassah filed her maternity leave application on August 29, 2006, and its approval was
already indicated in Saudia's computer system by August 30, 2006. 22 Rouen Ruth filed her maternity
leave application on September 13, 2006,23 and Loraine filed her maternity leave application on August
22, 2006.24

Rather than comply and tender resignation letters, respondents filed separate appeal letters that were
all rejected.25

Despite these initial rejections, respondents each received calls on the morning of November 6, 2006
from Saudia's office secretary informing them that their maternity leaves had been approved. Saudia,
however, was quick to renege on its approval. On the evening of November 6, 2006, respondents again
received calls informing them that it had received notification from Jeddah, Saudi Arabia that their
maternity leaves had been disapproved.26

Faced with the dilemma of resigning or totally losing their benefits, respondents executed handwritten
resignation letters. In Montassah's and Rouen Ruth's cases, their resignations were executed on
Saudia's blank letterheads that Saudia had provided. These letterheads already had the word
"RESIGNATION" typed on the subject portions of their headings when these were handed to
respondents.27

On November 8, 2007, respondents filed a Complaint against Saudia and its officers for illegal
dismissal and for underpayment of salary, overtime pay, premium pay for holiday, rest day, premium,
service incentive leave pay, 13th month pay, separation pay, night shift differentials, medical expense
reimbursements, retirement benefits, illegal deduction, lay-over expense and allowances, moral and
exemplary damages, and attorney's fees.28 The case was initially assigned to Labor Arbiter Hermino V.
Suelo and docketed as NLRC NCR Case No. 00-11-12342-07.

Saudia assailed the jurisdiction of the Labor Arbiter. 29 It claimed that all the determining points of
contact referred to foreign law and insisted that the Complaint ought to be dismissed on the ground
offorum non conveniens.30 It added that respondents had no cause of action as they resigned
voluntarily.31

On December 12, 2008, Executive Labor Arbiter Fatima Jambaro-Franco rendered the
Decision32dismissing respondents' Complaint. The dispositive portion of this Decision
reads:chanroblesvirtuallawlibrary

WHEREFORE, premises' considered, judgment is hereby rendered DISMISSING the instant complaint
for lack of jurisdiction/merit.33cralawlawlibrary

On respondents' appeal, the National Labor Relations Commission's Sixth Division reversed the ruling
of Executive Labor Arbiter Jambaro-Franco. It explained that "[considering that complainants-appellants
are OFWs, the Labor Arbiters and the NLRC has [sic] jurisdiction to hear and decide their complaint for
illegal termination."34 On the matter of forum non conveniens, it noted that there were no special
circumstances that warranted its abstention from exercising jurisdiction. 35 On the issue of whether
respondents were validly dismissed, it held that there was nothing on record to support Saudia's claim
that respondents resigned voluntarily.

The dispositive portion of the November 19, 2009 National Labor Relations Commission
Decision36reads:chanroblesvirtuallawlibrary

WHEREFORE, premises considered, judgment is hereby rendered finding the appeal impressed with
merit. The respondents-appellees are hereby directed to pay complainants-appellants the aggregate
amount of SR614,001.24 corresponding to their backwages and separation pay plus ten (10%) percent
thereof as attorney's fees. The decision of the Labor Arbiter dated December 12, 2008 is hereby
VACATED and SET ASIDE. Attached is the computation prepared by this Commission and made an
integral part of this Decision.37cralawlawlibrary

In the Resolution dated February 11, 2010,38 the National Labor Relations Commission denied
petitioners' Motion for Reconsideration.

In the June 16, 2011 Decision, 39 the Court of Appeals denied petitioners' Rule 65 Petition and modified
the Decision of the National Labor Relations Commission with respect to the award of separation pay
and backwages.

The dispositive portion of the Court of Appeals Decision reads:chanroblesvirtuallawlibrary

WHEREFORE, the instant petition is hereby DENIED. The Decision dated November 19, 2009 issued
by public respondent, Sixth Division of the National Labor Relations Commission - National Capital
Region is MODIFIED only insofar as the computation of the award of separation pay and backwages.
For greater clarity, petitioners are ordered to pay private respondents separation pay which shall be
computed from private respondents' first day of employment up to the finality of this decision, at the
rate of one month per year of service and backwages which shall be computed from the date the
private respondents were illegally terminated until finality of this decision. Consequently, the ten
percent (10%) attorney's fees shall be based on the total amount of the award. The assailed Decision is
affirmed in all other respects.
The labor arbiter is hereby DIRECTED to make a recomputation based on the
foregoing.40cralawlawlibrary

In the Resolution dated September 13, 2011, 41 the Court of Appeals denied petitioners' Motion for
Reconsideration.

Hence, this Appeal was filed.

The issues for resolution are the following:

First, whether the Labor Arbiter and the National Labor Relations Commission may exercise jurisdiction
over Saudi Arabian Airlines and apply Philippine law in adjudicating the present dispute;

Second, whether respondents' voluntarily resigned or were illegally terminated; and

Lastly, whether Brenda J. Betia may be held personally liable along with Saudi Arabian
Airlines.chanRoblesvirtualLawlibrary

Summons were validly served on Saudia and jurisdiction over it validly acquired.

There is no doubt that the pleadings and summons were served on Saudia through its
counsel.42Saudia, however, claims that the Labor Arbiter and the National Labor Relations Commission
had no jurisdiction over it because summons were never served on it but on "Saudia
Manila."43 Referring to itself as "Saudia Jeddah," it claims that "Saudia Jeddah" and not "Saudia Manila"
was the employer of respondents because:

First, "Saudia Manila" was never a party to the Cabin Attendant contracts entered into by respondents;

Second, it was "Saudia Jeddah" that provided the funds to pay for respondents' salaries and benefits;
and

Lastly, it was with "Saudia Jeddah" that respondents filed their resignations. 44

Saudia posits that respondents' Complaint was brought against the wrong party because "Saudia
Manila," upon which summons was served, was never the employer of respondents. 45

Saudia is vainly splitting hairs in its effort to absolve itself of liability. Other than its bare allegation,
there is no basis for concluding that "Saudia Jeddah" is distinct from "Saudia Manila."

What is clear is Saudia's statement in its own Petition that what it has is a "Philippine Office . . . located
at 4/F Metro House Building, Sen. Gil J. Puyat Avenue, Makati City." 46 Even in the position paper that
Saudia submitted to the Labor Arbiter,47 what Saudia now refers to as "Saudia Jeddah" was then only
referred to as "Saudia Head Office at Jeddah, KSA," 48 while what Saudia now refers to as "Saudia
Manila" was then only referred to as "Saudia's office in Manila."49

By its own admission, Saudia, while a foreign corporation, has a Philippine office.

Section 3(d) of Republic Act No.. 7042, otherwise known as the Foreign Investments Act of 1991,
provides the following:chanroblesvirtuallawlibrary
The phrase "doing business" shall include . . . opening offices, whether called "liaison"
offices or branches; . . . and any other act or acts that imply a continuity of commercial dealings or
arrangements and contemplate to that extent the performance of acts or works, or the exercise of
some of the functions normally incident to, and in progressive prosecution of commercial gain or of the
purpose and object of the business organization. (Emphasis supplied)

A plain application of Section 3(d) of the Foreign Investments Act leads to no other conclusion than
that Saudia is a foreign corporation doing business in the Philippines. As such, Saudia may be sued in
the Philippines and is subject to the jurisdiction of Philippine tribunals.

Moreover, since there is no real distinction between "Saudia Jeddah" and "Saudia Manila" the latter
being nothing more than Saudia's local office service of summons to Saudia's office in Manila
sufficed to vest jurisdiction over Saudia's person in Philippine tribunals.chanRoblesvirtualLawlibrary

II

Saudia asserts that Philippine courts and/or tribunals are not in a position to make an intelligent
decision as to the law and the facts. This is because respondents' Cabin Attendant contracts require
the application of the laws of Saudi Arabia, rather than those of the Philippines. 50 It claims that the
difficulty of ascertaining foreign law calls into operation the principle of forum non conveniens, thereby
rendering improper the exercise of jurisdiction by Philippine tribunals. 51

A choice of law governing the validity of contracts or the interpretation of its provisions dees not
necessarily imply forum non conveniens. Choice of law and forum non conveniens are entirely different
matters.

Choice of law provisions are an offshoot of the fundamental principle of autonomy of contracts. Article
1306 of the Civil Code firmly ensconces this:chanroblesvirtuallawlibrary

Article 1306. The contracting parties may establish such stipulations, clauses, terms and conditions as
they may deem convenient, provided they are not contrary to law, morals, good customs, public order,
or public policy.

In contrast, forum non conveniens is a device akin to the rule against forum shopping. It is designed to
frustrate illicit means for securing advantages and vexing litigants that would otherwise be possible if
the venue of litigation (or dispute resolution) were left entirely to the whim of either party.

Contractual choice of law provisions factor into transnational litigation and dispute resolution in one of
or in a combination of four ways: (1) procedures for settling disputes, e.g., arbitration; (2) forum, i.e.,
venue; (3) governing law; and (4) basis for interpretation. Forum non conveniens relates to, but is not
subsumed by, the second of these.

Likewise, contractual choice of law is not determinative of jurisdiction. Stipulating on the laws of a
given jurisdiction as the governing law of a contract does not preclude the exercise of jurisdiction by
tribunals elsewhere. The reverse is equally true: The assumption of jurisdiction by tribunals does
notipso facto mean that it cannot apply and rule on the basis of the parties' stipulation. In Hasegawa v.
Kitamura:52ChanRoblesVirtualawlibrary

Analytically, jurisdiction and choice of law are two distinct concepts. Jurisdiction considers whether it is
fair to cause a defendant to travel to this state; choice of law asks the further question whether the
application of a substantive law V'hich will determine the merits of the case is fair to both parties. The
power to exercise jurisdiction does not automatically give a state constitutional authority to apply
forum law. While jurisdiction and the choice of the lex fori will often, coincide, the "minimum contacts"
for one do not always provide the necessary "significant contacts" for the other. The question of
whether the law of a state can be applied to a transaction is different from the question of whether the
courts of that state have jurisdiction to enter a judgment. 53cralawlawlibrary

As various dealings, commercial or otherwise, are facilitated by the progressive ease of communication
and travel, persons from various jurisdictions find themselves transacting with each other. Contracts
involving foreign elements are, however, nothing new. Conflict of laws situations precipitated by
disputes and litigation anchored on these contracts are not totally novel.

Transnational transactions entail differing laws on the requirements Q for the validity of the formalities
and substantive provisions of contracts and their interpretation. These transactions inevitably lend
themselves to the possibility of various fora for litigation and dispute resolution. As observed by an
eminent expert on transnational law:chanroblesvirtuallawlibrary

The more jurisdictions having an interest in, or merely even a point of contact with, a transaction or
relationship, the greater the number of potential fora for the resolution of disputes arising out of or
related to that transaction or relationship. In a world of increased mobility, where business and
personal transactions transcend national boundaries, the jurisdiction of a number of different fora may
easily be invoked in a single or a set of related disputes. 54cralawlawlibrary

Philippine law is definite as to what governs the formal or extrinsic validity of contracts. The first
paragraph of Article 17 of the Civil Code provides that "[t]he forms and solemnities of contracts . . .
shall be governed by the laws of the country in which they are executed" 55 (i.e., lex loci celebrationis).

In contrast, there is no statutorily established mode of settling conflict of laws situations on matters
pertaining to substantive content of contracts. It has been noted that three (3) modes have emerged:
(1) lex loci contractus or the law of the place of the making; (2) lex loci solutionis or the law of the
place of performance; and (3) lex loci intentionis or the law intended by the parties.56

Given Saudia's assertions, of particular relevance to resolving the present dispute is lex loci intentionis.

An author observed that Spanish jurists and commentators "favor lex loci intentionis."57 These jurists
and commentators proceed from the Civil Code of Spain, which, like our Civil Code, is silent on what
governs the intrinsic validity of contracts, and the same civil law traditions from which we draw ours.

In this jurisdiction, this court, in Philippine Export and Foreign Loan Guarantee v. V.P. Eusebio
Construction, Inc.,58 manifested preference for allowing the parties to select the law applicable to their
contract":chanroblesvirtuallawlibrary

No conflicts rule on essential validity of contracts is expressly provided for in our laws. The rule
followed by most legal systems, however, is that the intrinsic validity of a contract must be governed
by the lex contractus or "proper law of the contract." This is the law voluntarily agreed upon by the
parties (the lex loci voluntatis) or the law intended by them either expressly or implicitly (the lex loci
intentionis). The law selected may be implied from such factors as substantial connection with the
transaction, or the nationality or domicile of the parties. Philippine courts would do well to adopt the
first and most basic rule in most legal systems, namely, to allow the parties to select the law
applicable to their contract, subject to the limitation that it is not against the law, morals, or public
policy of the forum and that the chosen law must bear a substantive relationship to the
transaction.59 (Emphasis in the original)

Saudia asserts that stipulations set in the Cabin Attendant contracts require the application of the laws
of Saudi Arabia. It insists that the need to comply with these stipulations calls into operation the
doctrine of forum non conveniens and, in turn, makes it necessary for Philippine tribunals to refrain
from exercising jurisdiction.

As mentioned, contractual choice of laws factors into transnational litigation in any or a combination of
four (4) ways. Moreover, forum non conveniens relates to one of these: choosing between multiple
possible fora.

Nevertheless, the possibility of parallel litigation in multiple fora along with the host of difficulties it
poses is not unique to transnational litigation. It is a difficulty that similarly arises in disputes well
within the bounds of a singe jurisdiction.

When parallel litigation arises strictly within the context of a single jurisdiction, such rules as those on
forum shopping, litis pendentia, and res judicata come into operation. Thus, in the Philippines, the
1997 Rules on Civil Procedure provide for willful and deliberate forum shopping as a ground not only
for summary dismissal with prejudice but also for citing parties and counsels in direct contempt, as
well as for the imposition of administrative sanctions. 60 Likewise, the same rules expressly provide that
a party may seek the dismissal of a Complaint or another pleading asserting a claim on the ground
"[t]hat there is another action pending between the same parties for the same cause," i.e., litis
pendentia, or "[t]hat the cause of action is barred by a prior judgment,"61 i.e., res judicata.

Forum non conveniens, like the rules of forum shopping, litis pendentia, and res judicata, is a means of
addressing the problem of parallel litigation. While the rules of forum shopping, litis pendentia, andres
judicata are designed to address the problem of parallel litigation within a single jurisdiction, forum
non conveniens is a means devised to address parallel litigation arising in multiple jurisdictions.

Forum non conveniens literally translates to "the forum is inconvenient." 62 It is a concept in private
international law and was devised to combat the "less than honorable" reasons and excuses that
litigants use to secure procedural advantages, annoy and harass defendants, avoid overcrowded
dockets, and select a "friendlier" venue.63 Thus, the doctrine of forum non conveniens addresses the
same rationale that the rule against forum shopping does, albeit on a multijurisdictional scale.

Forum non conveniens, like res judicata,64 is a concept originating in common law.65 However, unlike
the rule on res judicata, as well as those on litis pendentia and forum shopping, forum non
conveniensfinds no textual anchor, whether in statute or in procedural rules, in our civil law system.
Nevertheless, jurisprudence has applied forum non conveniens as basis for a court to decline its
exercise of jurisdiction.66

Forum non conveniens is soundly applied not only to address parallel litigation and undermine a
litigant's capacity to vex and secure undue advantages by engaging in forum shopping on an
international scale. It is also grounded on principles of comity and judicial efficiency.

Consistent with the principle of comity, a tribunal's desistance in exercising jurisdiction on account
offorum non conveniens is a deferential gesture to the tribunals of another sovereign. It is a measure
that prevents the former's having to interfere in affairs which are better and more competently
addressed by the latter. Further, forum non conveniens entails a recognition not only that tribunals
elsewhere are better suited to rule on and resolve a controversy, but also, that these tribunals
arebetter positioned to enforce judgments and, ultimately, to dispense justice. Forum non
conveniensprevents the embarrassment of an awkward situation where a tribunal is rendered
incompetent in the face of the greater capability both analytical and practical of a tribunal in
another jurisdiction.

The wisdom of avoiding conflicting and unenforceable judgments is as much a matter of efficiency and
economy as it is a matter of international courtesy. A court would effectively be neutering itself if it
insists on adjudicating a controversy when it knows full well that it is in no position to enforce its
judgment. Doing so is not only an exercise in futility; it is an act of frivolity. It clogs the dockets of
a.tribunal and leaves it to waste its efforts on affairs, which, given transnational exigencies, will be
reduced to mere academic, if not trivial, exercises.

Accordingly, under the doctrine of forum non conveniens, "a court, in conflicts of law cases, mayrefuse
impositions on its jurisdiction where it is not the most 'convenient' or available forum and the parties
are not precluded from seeking remedies elsewhere."67 In Puyat v. Zabarte,68 this court recognized the
following situations as among those that may warrant a court's desistance from exercising
jurisdiction:chanroblesvirtuallawlibrary

1) The belief that the matter can be better tried and decided elsewhere, either because the main
aspects of the case transpired in a foreign jurisdiction or the material witnesses have their
residence there;

2) The belief that the non-resident plaintiff sought the forum[,] a practice known asforum
shopping[,] merely to secure procedural advantages or to convey or harass the defendant;

3) The unwillingness to extend local judicial facilities to non residents or aliens when the docket may
already be overcrowded;

4) The inadequacy of the local judicial machinery for effectuating the right sought to be maintained;
and

5) The difficulty of ascertaining foreign law.69

In Bank of America, NT&SA, Bank of America International, Ltd. v. Court of Appeals,70 this court
underscored that a Philippine court may properly assume jurisdiction over a case if it chooses to do so
to the extent: "(1) that the Philippine Court is one to which the parties may conveniently resort to; (2)
that the Philippine Court is in a position to make an intelligent decision as to the law and the facts; and
(3) that the Philippine Court has or is likely to have power to enforce its decision." 71

The use of the word "may" (i.e., "may refuse impositions on its jurisdiction"72) in the decisions shows
that the matter of jurisdiction rests on the sound discretion of a court. Neither the mere invocation
offorum non conveniens nor the averment of foreign elements operates to automatically divest a court
of jurisdiction. Rather, a court should renounce jurisdiction only "after 'vital facts are established, to
determine whether special circumstances' require the court's desistance." 73 As the propriety of
applying forum non conveniens is contingent on a factual determination, it is, therefore, a matter of
defense.74

The second sentence of Rule 9, Section 1 of the 1997 Rules of Civil Procedure is exclusive in its recital
of the grounds for dismissal that are exempt from the omnibus motion rule: (1) lack of jurisdiction over
the subject matter; (2) litis pendentia; (3) res judicata; and (4) prescription. Moreover, dismissal on
account offorum non conveniens is a fundamentally discretionary matter. It is, therefore, not a matter
for a defendant to foist upon the court at his or her own convenience; rather, it must be pleaded at the
earliest possible opportunity.
On the matter of pleading forum non conveniens, we state the rule, thus: Forum non conveniens must
not only be clearly pleaded as a ground for dismissal; it must be pleaded as such at the earliest
possible opportunity. Otherwise, it shall be deemed waived.

This court notes that in Hasegawa,76 this court stated that forum non conveniens is not a ground for a
motion to dismiss. The factual ambience of this case however does not squarely raise the viability of
this doctrine. Until the opportunity comes to review the use of motions to dismiss for parallel
litigation,Hasegawa remains existing doctrine.

Consistent with forum non conveniens as fundamentally a factual matter, it is imperative that it
proceed from & factually established basis. It would be improper to dismiss an action pursuant toforum
non conveniens based merely on a perceived, likely, or hypothetical multiplicity of fora. Thus, a
defendant must also plead and show that a prior suit has, in fact, been brought in another jurisdiction.

The existence of a prior suit makes real the vexation engendered by duplicitous litigation, the
embarrassment of intruding into the affairs of another sovereign, and the squandering of judicial
efforts in resolving a dispute already lodged and better resolved elsewhere. As has been
noted:chanroblesvirtuallawlibrary

A case will not be stayed o dismissed on [forum] non conveniens grounds unless the plaintiff is shown
to have an available alternative forum elsewhere. On this, the moving party bears the burden of proof.

A number of factors affect the assessment of an alternative forum's adequacy. The statute of
limitations abroad may have run, of the foreign court may lack either subject matter or personal
jurisdiction over the defendant. . . . Occasionally, doubts will be raised as to the integrity or impartiality
of the foreign court (based, for example, on suspicions of corruption or bias in favor of local nationals),
as to the fairness of its judicial procedures, or as to is operational efficiency (due, for example, to lack
of resources, congestion and delay, or interfering circumstances such as a civil unrest). In one noted
case, [it was found] that delays of 'up to a quarter of a century' rendered the foreign forum...
inadequate for these purposes.77cralawlawlibrary

We deem it more appropriate and in the greater interest of prudence that a defendant not only allege
supposed dangerous tendencies in litigating in this jurisdiction; the defendant must also show that
such danger is real and present in that litigation or dispute resolution has commenced in another
jurisdiction and that a foreign tribunal has chosen to exercise jurisdiction.

III

Forum non conveniens finds no application and does not operate to divest Philippine tribunals of
jurisdiction and to require the application of foreign law.

Saudia invokes forum non conveniens to supposedly effectuate the stipulations of the Cabin Attendant
contracts that require the application of the laws of Saudi Arabia.

Forum non conveniens relates to forum, not to the choice of governing law. Thai forum non
conveniensmay ultimately result in the application of foreign law is merely an incident of its
application. In this strict sense, forum non conveniens is not applicable. It is not the primarily pivotal
consideration in this case.

In any case, even a further consideration of the applicability of forum non conveniens on the incidental
matter of the law governing respondents' relation with Saudia leads to the conclusion that it is
improper for Philippine tribunals to divest themselves of jurisdiction.
Any evaluation of the propriety of contracting parties' choice of a forum and'its incidents must grapple
with two (2) considerations: first, the availability and adequacy of recourse to a foreign tribunal; and
second, the question of where, as between the forum court and a foreign court, the balance of
interests inhering in a dispute weighs more heavily.

The first is a pragmatic matter. It relates to the viability of ceding jurisdiction to a foreign tribunal and
can be resolved by juxtaposing the competencies and practical circumstances of the tribunals in
alternative fora. Exigencies, like the statute of limitations, capacity to enforce orders and judgments,
access to records, requirements for the acquisition of jurisdiction, and even questions relating to the
integrity of foreign courts, may render undesirable or even totally unfeasible recourse to a foreign
court. As mentioned, we consider it in the greater interest of prudence that a defendant show, in
pleading forum non conveniens, that litigation has commenced in another jurisdiction and that a
foieign tribunal has, in fact, chosen to exercise jurisdiction.

Two (2) factors weigh into a court's appraisal of the balance of interests inhering in a dispute: first, the
vinculum which the parties and their relation have to a given jurisdiction; and second, the public
interest that must animate a tribunal, in its capacity as an agent of the sovereign, in choosing to
assume or decline jurisdiction. The first is more concerned with the parties, their personal
circumstances, and private interests; the second concerns itself with the state and the greater social
order.

In considering the vinculum, a court must look into the preponderance of linkages which the parties
and their transaction may have to either jurisdiction. In this respect, factors, such as the parties'
respective nationalities and places of negotiation, execution, performance, engagement or
deployment, come into play.

In considering public interest, a court proceeds with a consciousness that it is an organ of the state. It
must, thus, determine if the interests of the sovereign (which acts through it) are outweighed by those
of the alternative jurisdiction. In this respect, the court delves into a consideration of public policy.
Should it find that public interest weighs more heavily in favor of its assumption of jurisdiction, it
should proceed in adjudicating the dispute, any doubt or .contrary view arising from the
preponderance of linkages notwithstanding.

Our law on contracts recognizes the validity of contractual choice of law provisions. Where such
provisions exist, Philippine tribunals, acting as the forum court, generally defer to the parties'
articulated choice.

This is consistent with the fundamental principle of autonomy of contracts. Article 1306 of the Civ:l
Code expressly provides that "[t]he contracting parties may establish 'such stipulations, clauses, terms
and conditions as they may deem convenient."78 Nevertheless, while a Philippine tribunal (acting as
the forum court) is called upon to respect the parties' choice of governing law, such respect must not
be so permissive as to lose sight of considerations of law, morals, good customs, public order, or public
policy that underlie the contract central to the controversy.

Specifically with respect to public policy, in Pakistan International Airlines Corporation v. Ople,79 this
court explained that:chanroblesvirtuallawlibrary

counter-balancing the principle of autonomy of contracting parties is the equally general rule that
provisions of applicable law, especially provisions relating to matters affected with public policy, are
deemed written inta the contract. Put a little differently, the governing principle is that parties may not
contract away applicable provisions of law especially peremptory provisions dealing with matters
heavily impressed with public interest.80 (Emphasis supplied)
Article II, Section 14 of the 1987 Constitution provides that "[t]he State ... shall ensure the fundamental
equality before the law of women and men." Contrasted with Article II, Section 1 of the 1987
Constitution's statement that "[n]o person shall ... be denied the equal protection of the laws," Article
II, Section 14 exhorts the State to "ensure." This does not only mean that the Philippines shall not
countenance nor lend legal recognition and approbation to measures that discriminate on the basis of
one's being male or female. It imposes an obligation to actively engage in securing the fundamental
equality of men and women.

The Convention on the Elimination of all Forms of Discrimination against Women (CEDAW), signed and
ratified by the Philippines on July 15, 1980, and on August 5, 1981, respectively, 81 is part of the law of
the land. In view of the widespread signing and ratification of, as well as adherence (in practice) to it
by states, it may even be said that many provisions of the CEDAW may have become customary
international law. The CEDAW gives effect to the Constitution's policy statement in Article II, Section
14. Article I of the CEDAW defines "discrimination against women" as:chanroblesvirtuallawlibrary

any distinction, exclusion or restriction made on the basis of sex which has the effect or purpose of
impairing or nullifying the recognition, enjoyment or exercise by women, irrespective of their marital
status, on a basis of equality of men and women, of human rights and fundamental freedoms in the
political, economic, social, cultural, civil or any other field. 82cralawlawlibrary

The constitutional exhortation to ensure fundamental equality, as illumined by its enabling law, the
CEDAW, must inform and animate all the actions of all personalities acting on behalf of the State. It is,
therefore, the bounden duty of this court, in rendering judgment on the disputes brought before it, to
ensure that no discrimination is heaped upon women on the mere basis of their being women. This is a
point so basic and central that all our discussions and pronouncements regardless of whatever
averments there may be of foreign law must proceed from this premise.

So informed and animated, we emphasize the glaringly discriminatory nature of Saudia's policy. As
argued by respondents, Saudia's policy entails the termination of employment of flight attendants who
become pregnant. At the risk of stating the obvious, pregnancy is an occurrence that pertains
specifically to women. Saudia's policy excludes from and restricts employment on the basis of no other
consideration but sex.

We do not lose sight of the reality that pregnancy does present physical limitations that may render
difficult the performance of functions associated with being a flight attendant. Nevertheless, it would
be the height of iniquity to view pregnancy as a disability so permanent and immutable that, it must
entail the termination of one's employment. It is clear to us that any individual, regardless of gender,
may be subject to exigencies that limit the performance of functions. However, we fail to appreciate
how pregnancy could be such an impairing occurrence that it leaves no other recourse but the
complete termination of the means through which a woman earns a living.

Apart from the constitutional policy on the fundamental equality before the law of men and women, it
is settled that contracts relating to labor and employment are impressed with public interest. Article
1700 of the Civil Code provides that "[t]he relation between capital and labor are not merely
contractual. They are so impressed with public interest that labor contracts must yield to the common
good."

Consistent with this, this court's pronouncements in Pakistan International Airlines Corporation83 are
clear and unmistakable:chanroblesvirtuallawlibrary

Petitioner PIA cannot take refuge in paragraph 10 of its employment agreement which specifies, firstly,
the law of Pakistan as the applicable law of the agreement, and, secondly, lays the venue for
settlement of any dispute arising out of or in connection with the agreement "only [in] courts of
Karachi, Pakistan". The first clause of paragraph 10 cannot be invoked to prevent the application of
Philippine labor laws and'regulations to the subject matter of this case, i.e., the employer-employee
relationship between petitioner PIA and private respondents. We have already pointed out that the
relationship is much affected with public interest and that the otherwise applicable Philippine laws and
regulations cannot be rendered illusory by the parties agreeing upon some other law to govern their
relationship. . . . Under these circumstances, paragraph 10 of the employment agreement cannot be
given effect so as to oust Philippine agencies and courts of the jurisdiction vested upon them by
Philippine law.84 (Emphasis supplied)

As the present dispute relates to (what the respondents allege to be) the illegal termination of
respondents' employment, this case is immutably a matter of public interest and public policy.
Consistent with clear pronouncements in law and jurisprudence, Philippine laws properly find
application in and govern this case. 'Moreover, as this premise for Saudia's insistence on the
application forum non conveniens has been shattered, it follows that Philippine tribunals may properly
assume jurisdiction over the present controversy. Philippine jurisprudence provides ample illustrations
of when a court's renunciation of jurisdiction on account of forum non conveniens is proper or
improper.'

In Philsec Investment Corporation v. Court of Appeals,85 this court noted that the trial court failed to
consider that one of the plaintiffs was a domestic corporation, that one of the defendants was a
Filipino, and that it was the extinguishment of the latter's debt that was the object of the transaction
subject of the litigation. Thus, this court held, among others, that the trial court's refusal to assume
jurisdiction was not justified by forum non conveniens and remanded the case to the trial court.

In Raytheon International, Inc. v. Rouzie, Jr.,86 this court sustained the trial court's assumption of
jurisdiction considering that the trial court could properly enforce judgment on the petitioner which
was a foreign corporation licensed to do business in the Philippines.

In Pioneer International, Ltd. v. Guadiz, Jr.,87 this court found no reason to disturb the trial court's
assumption of jurisdiction over a case in which, as noted by the trial court, "it is more convenient to
hear and decide the case in the Philippines because Todaro [the plaintiff] resides in the Philippines and
the contract allegedly breached involve[d] employment in the Philippines." 88

In Pacific Consultants International Asia, Inc. v. Schonfeld,89 this court held that the fact that the
complainant in an illegal dismissal case was a Canadian citizen and a repatriate did not warrant the
application of forum non conveniens considering that: (1) the Labor Code does not include forum non
conveniens as a ground for the dismissal of a complaint for illegal dismissal; (2) the propriety of
dismissing a case based on forum non conveniens requires a factual determination; and (3) the
requisites for assumption of jurisdiction as laid out in Bank of America, NT&SA90 were all satisfied.

In contrast, this court ruled in The Manila Hotel Corp. v. National Labor Relations Commission 91 that the
National Labor Relations Q Commission was a seriously inconvenient forum. In that case, private
respondent Marcelo G. Santos was working in the Sultanate of Oman when he received a letter from
Palace Hotel recruiting him for employment in Beijing, China. Santos accepted the offer. Subsequently,
however, he was released from employment supposedly due to business reverses arising from political
upheavals in China (i.e., the Tiananmen Square incidents of 1989). Santos later filed a Complaint for
illegal dismissal impleading Palace Hotel's General Manager, Mr. Gerhard Schmidt, the Manila Hotel
International Company Ltd. (which was, responsible for training Palace Hotel's personnel and staff),
and the Manila Hotel Corporation (which owned 50% of Manila Hotel International Company Ltd.'s
capital stock).

In ruling against the National Labor Relations Commission's exercise of jurisdiction, this court noted
that the main aspects of the case transpired in two (2) foreign jurisdictions, Oman and China, and that
the case involved purely foreign elements. Specifically, Santos was directly hired by a foreign employer
through correspondence sent to Oman. Also, the proper defendants were neither Philippine nationals
nor engaged in business in the Philippines, while the main witnesses were not residents of the
Philippines. Likewise, this court noted that the National Labor Relations Commission was in no position
to conduct the following: first, determine the law governing the employment contract, as it was
entered into in foreign soil; second, determine the facts, as Santos' employment was terminated in
Beijing; and third, enforce its judgment, since Santos' employer, Palace Hotel, was incorporated under
the laws of China and was not even served with summons.

Contrary to Manila Hotel, the case now before us does not entail a preponderance of linkages that
favor a foreign jurisdiction.

Here, the circumstances of the parties and their relation do not approximate the circumstances
enumerated in Puyat,92 which this court recognized as possibly justifying the desistance of Philippine
tribunals from exercising jurisdiction.

First, there is no basis for concluding that the case can be more conveniently tried elsewhere. As
established earlier, Saudia is doing business in the Philippines. For their part, all four (4) respondents
are Filipino citizens maintaining residence in the Philippines and, apart from their previous employment
with Saudia, have no other connection to the Kingdom of Saudi Arabia. It would even be to
respondents' inconvenience if this case were to be tried elsewhere.

Second, the records are bereft of any indication that respondents filed their Complaint in an effort to
engage in forum shopping or to vex and inconvenience Saudia.

Third, there is no indication of "unwillingness to extend local judicial facilities to non-residents or

aliens."93 That Saudia has managed to bring the present controversy all the way to this court proves
this.

Fourth, it cannot be said that the local judicial machinery is inadequate for effectuating the right
sought to be maintained. Summons was properly served on Saudia and jurisdiction over its person was
validly acquired.

Lastly, there is not even room for considering foreign law. Philippine law properly governs the present
dispute.

As the question of applicable law has been settled, the supposed difficulty of ascertaining foreign law
(which requires the application of forum non conveniens) provides no insurmountable inconvenience or
special circumstance that will justify depriving Philippine tribunals of jurisdiction.

Even if we were to assume, for the sake of discussion, that it is the laws of Saudi Arabia which should
apply, it does not follow that Philippine tribunals should refrain from exercising jurisdiction. To. recall
our pronouncements in Puyat,94 as well as in Bank of America, NT&SA,95 it is not so much the mere
applicability of foreign law which calls into operation forum non conveniens. Rather, what justifies a
court's desistance from exercising jurisdiction is "[t]he difficulty of ascertaining foreign law"96 or the
inability of a "Philippine Court to make an intelligent decision as to the law[.]" 97

Consistent with lex loci intentionis, to the extent that it is proper and practicable (i.e., "to make an
intelligent decision"98), Philippine tribunals may apply the foreign law selected by the parties. In fact,
(albeit without meaning to make a pronouncement on the accuracy and reliability of respondents'
citation) in this case, respondents themselves have made averments as to the laws of Saudi Arabia. In
their Comment, respondents write:chanroblesvirtuallawlibrary

Under the Labor Laws of Saudi Arabia and the Philippines[,] it is illegal and unlawful to terminate the
employment of any woman by virtue of pregnancy. The law in Saudi Arabia is even more harsh and
strict [sic] in that no employer can terminate the employment of a female worker or give her a warning
of the same while on Maternity Leave, the specific provision of Saudi Labor Laws on the matter is
hereto quoted as follows:chanroblesvirtuallawlibrary

"An employer may not terminate the employment of a female worker or give her a warning of the
same while on maternity leave." (Article 155, Labor Law of the Kingdom of Saudi Arabia, Royal Decree
No. M/51.)99cralawlawlibrary

All told, the considerations for assumption of jurisdiction by Philippine tribunals as outlined in Bank of
America, NT&SA100 have been satisfied. First, all the parties are based in the Philippines and all the
material incidents transpired in this jurisdiction. Thus, the parties may conveniently seek relief from
Philippine tribunals. Second, Philippine tribunals are in a position to make an intelligent decision as to
the law and the facts. Third, Philippine tribunals are in a position to enforce their decisions. There is no
compelling basis for ceding jurisdiction to a foreign tribunal. Quite the contrary, the immense public
policy considerations attendant to this case behoove Philippine tribunals to not shy away from their
duty to rule on the case.chanRoblesvirtualLawlibrary

IV

Respondents were illegally terminated.

In Bilbao v. Saudi Arabian Airlines,101 this court defined voluntary resignation as "the voluntary act of
an employee who is in a situation where one believes that personal reasons cannot be sacrificed in
favor of the exigency of the service, and one has no other choice but to dissociate oneself from
employment. It is a formal pronouncement or relinquishment of an office, with the intention of
relinquishing the office accompanied by the act of relinquishment."102 Thus, essential to the act of
resignation is voluntariness. It must be the result of an employee's exercise of his or her own will.

In the same case of Bilbao, this court advanced a means for determining whether an employee
resigned voluntarily:chanroblesvirtuallawlibrary

As the intent to relinquish must concur with the overt act of relinquishment, the acts of the employee
before and after the alleged resignation must be considered in determining whether he or she, in fact,
intended, to sever his or her employment.103(Emphasis supplied)

On the other hand, constructive dismissal has been defined as "cessation of work because 'continued
employment is rendered impossible, unreasonable or unlikely, as an offer involving a demotion in rank
or a diminution in pay' and other benefits."104

In Penaflor v. Outdoor Clothing Manufacturing Corporation,105 constructive dismissal has been

described as tantamount to "involuntarily [sic] resignation due to the harsh, hostile, and unfavorable
conditions set by the employer."106 In the same case, it was noted that "[t]he gauge for constructive
dismissal is whether a reasonable person in the employee's position would feel compelled to give up
his employment under the prevailing circumstances."107

Applying the cited standards on resignation and constructive dismissal, it is clear that respondents
were constructively dismissed. Hence, their termination was illegal.

The termination of respondents' employment happened when they were pregnant and expecting to
incur costs on account of child delivery and infant rearing. As noted by the Court of Appeals,
pregnancy is a time when they need employment to sustain their families. 108 Indeed, it goes against
normal and reasonable human behavior to abandon one's livelihood in a time of great financial need.

It is clear that respondents intended to remain employed with Saudia. All they did was avail of their
maternity leaves. Evidently, the very nature of a maternity leave means that a pregnant employee will
not report for work only temporarily and that she will resume the performance of her duties as soon as
the leave allowance expires.

It is also clear that respondents exerted all efforts to' remain employed with Saudia. Each of them
repeatedly filed appeal letters (as much as five [5] letters in the case of Rebesencio 109) asking Saudia
to reconsider the ultimatum that they resign or be terminated along with the forfeiture of their
benefits. Some of them even went to Saudia's office to personally seek reconsideration. 110

Respondents also adduced a copy of the "Unified Employment Contract for Female Cabin
Attendants."111 This contract deemed void the employment of a flight attendant who becomes
pregnant and threatened termination due to lack of medical fitness. 112 The threat of termination (and
the forfeiture of benefits that it entailed) is enough to compel a reasonable person in respondents'
position to give up his or her employment.

Saudia draws attention to how respondents' resignation letters were supposedly made in their own
handwriting. This minutia fails to surmount all the other indications negating any voluntariness on
respondents' part. If at all, these same resignation letters are proof of how any supposed resignation
did not arise from respondents' own initiative. As earlier pointed out, respondents' resignations were
executed on Saudia's blank letterheads that Saudia had provided. These letterheads already had the
word "RESIGNATION" typed on the subject portion of their respective headings when these were
handed to respondents.113ChanRoblesVirtualawlibrary

"In termination cases, the burden of proving just or valid cause for dismissing an employee rests on
the employer."114 In this case, Saudia makes much of how respondents supposedly completed their exit
interviews, executed quitclaims, received their separation pay, and took more than a year to file their
Complaint.115 If at all, however, these circumstances prove only the fact of their occurrence, nothing
more. The voluntariness of respondents' departure from Saudia is non sequitur.

Mere compliance with standard procedures or processes, such as the completion of their exit
interviews, neither negates compulsion nor indicates voluntariness.

As with respondent's resignation letters, their exit interview forms even support their claim of illegal
dismissal and militates against Saudia's arguments. These exit interview forms, as reproduced by
Saudia in its own Petition, confirms the unfavorable conditions as regards respondents' maternity
leaves. Ma. Jopette's and Loraine's exit interview forms are particularly
telling:chanroblesvirtuallawlibrary

a. From Ma. Jopette's exit interview form:

3. In what respects has the job met or failed to meet your expectations?

THE SUDDEN TWIST OF DECISION REGARDING THE MATERNITY LEAVE. 116

b. From Loraine's exit interview form:

1. What are your main reasons for leaving Saudia? What company are you joining?

xxx xxx xxx

Others
CHANGING POLICIES REGARDING MATERNITY LEAVE (PREGNANCY) 117

As to respondents' quitclaims, in Phil. Employ Services and Resources, Inc. v. Paramio,118 this court
noted that "[i]f (a) there is clear proof that the waiver was wangled from an unsuspecting or gullible
person; or (b) the terms of the settlement are unconscionable, and on their face invalid, such
quitclaims must be struck down as invalid or illegal."119 Respondents executed their quitclaims after
having been unfairly given an ultimatum to resign or be terminated (and forfeit their benefits).

Having been illegally and unjustly dismissed, respondents are entitled to full backwages and benefits
from the time of their termination until the finality of this Decision. They are likewise entitled to
separation pay in the amount of one (1) month's salary for every year of service until the fmality of
this Decision, with a fraction of a year of at least six (6) months being counted as one (1) whole year.

Moreover, "[m]oral damages are awarded in termination cases where the employee's dismissal was
attended by bad faith, malice or fraud, or where it constitutes an act oppressive to labor, or where it
was done in a manner contrary to morals, good customs or public policy." 120 In this case, Saudia
terminated respondents' employment in a manner that is patently discriminatory and running afoul of
the public interest that underlies employer-employee relationships. As such, respondents are entitled
to moral damages.

To provide an "example or correction for the public good" 121 as against such discriminatory and callous
schemes, respondents are likewise entitled to exemplary damages.

In a long line of cases, this court awarded exemplary damages to illegally dismissed employees whose
"dismissal[s were] effected in a wanton, oppressive or malevolent manner." 122 This court has awarded
exemplary damages to employees who were terminated on such frivolous, arbitrary, and unjust
grounds as membership in or involvement with labor unions, 123 injuries sustained in the course of
employment,124 development of a medical condition due to the employer's own violation of the
employment contract,125 and lodging of a Complaint against the employer.126 Exemplary damages were
also awarded to employees who were deemed illegally dismissed by an employer in an attempt to
evade compliance with statutorily established employee benefits. 127 Likewise, employees dismissed for
supposedly just causes, but in violation of due process requirements, were awarded exemplary
damages.128

These examples pale in comparison to the present controversy. Stripped of all unnecessary
complexities, respondents were dismissed for no other reason than simply that they were pregnant.
This is as wanton, oppressive, and tainted with bad faith as any reason for termination of employment
can be. This is no ordinary case of illegal dismissal. This is a case of manifest gender discrimination. It
is an affront not only to our statutes and policies on employees' security of tenure, but more so, to the
Constitution's dictum of fundamental equality between men and women. 129

The award of exemplary damages is, therefore, warranted, not only to remind employers of the need to
adhere to the requirements of procedural and substantive due process in termination of employment,
but more importantly, to demonstrate that gender discrimination should in no case be countenanced.

Having been compelled to litigate to seek reliefs for their illegal and unjust dismissal, respondents are
likewise entitled to attorney's fees in the amount of 10% of the total monetary award. 130

VI
Petitioner Brenda J. Betia may not be held liable.
A corporation has a personality separate and distinct from those of the persons composing it. Thus, as
a rule, corporate directors and officers are not liable for the illegal termination of a corporation's
employees. It is only when they acted in bad faith or with malice that they become solidarity liable
with the corporation.131

In Ever Electrical Manufacturing, Inc. (EEMI) v. Samahang Manggagawa ng Ever Electrical,132 this court
clarified that "[b]ad faith does not connote bad judgment or negligence; it imports a dishonest purpose
or some moral obliquity and conscious doing of wrong; it means breach of a known duty through some
motive or interest or ill will; it partakes of the nature of fraud."133

Respondents have not produced proof to show that Brenda J. Betia acted in bad faith or with malice as
regards their termination. Thus, she may not be held solidarity liable with Saudia.cralawred

WHEREFORE, with the MODIFICATIONS that first, petitioner Brenda J. Betia is not solidarity liable
with petitioner Saudi Arabian Airlines, and second, that petitioner Saudi Arabian Airlines is liable for
moral and exemplary damages. The June 16, 2011 Decision and the September 13, 2011 Resolution of
the Court of Appeals in CA-G.R. SP. No. 113006 are hereby AFFIRMED in all other respects.
Accordingly, petitioner Saudi Arabian Airlines is ordered to pay respondents:

(1) Full backwages and all other benefits computed from the respective dates in which each of the
respondents were illegally terminated until the finality of this Decision;

(2) Separation pay computed from the respective dates in which each of the respondents
commenced employment until the finality of this Decision at the rate of one (1) month's salary for
every year of service, with a fraction of a year of at least six (6) months being counted as one (1)
whole year;

(3) Moral damages in the amount of P100,000.00 per respondent;

(4) Exemplary damages in the amount of P200,000.00 per respondent; and

(5) Attorney's fees equivalent to 10% of the total award.

Interest of 6% per annum shall likewise be imposed on the total judgment award from the finality of
this Decision until full satisfaction thereof.

This case is REMANDED to the Labor Arbiter to make a detailed computation of the amounts due to
respondents which petitioner Saudi Arabian Airlines should pay without delay.
SECOND DIVISION

G.R. No. 202961, February 04, 2015

EMER MILAN, RANDY MASANGKAY, WILFREDO JAVIER, RONALDO DAVID, BONIFACIO

MATUNDAN, NORA MENDOZA, ET AL., Petitioners, v. NATIONAL LABOR RELATIONS
COMMISSION, SOLID MILLS, INC., AND/OR PHILIP ANG, Respondents.

DECISION

LEONEN, J.:

An employer is allowed to withhold terminal pay and benefits pending the employees return of its
properties.

Petitioners are respondent Solid Mills, Inc.s (Solid Mills) employees. 1 They are represented by the
National Federation of Labor Unions (NAFLU), their collective bargaining
agent.2chanroblesvirtuallawlibrary

As Solid Mills employees, petitioners and their families were allowed to occupy SMI Village, a property
owned by Solid Mills.3 According to Solid Mills, this was [o]ut of liberality and for the convenience of
its employees . . . [and] on the condition that the employees . . . would vacate the premises anytime
the Company deems fit.4chanroblesvirtuallawlibrary

In September 2003, petitioners were informed that effective October 10, 2003, Solid Mills would cease
its operations due to serious business losses. 5 NAFLU recognized Solid Mills closure due to serious
business losses in the memorandum of agreement dated September 1, 2003. 6 The memorandum of
agreement provided for Solid Mills grant of separation pay less accountabilities, accrued sick leave
benefits, vacation leave benefits, and 13th month pay to the employees. 7 Pertinent portions of the
agreement provide:chanRoblesvirtualLawlibrary

WHEREAS, the COMPANY has incurred substantial financial losses and is currently experiencing further
severe financial losses;chanrobleslaw

WHEREAS, in view of such irreversible financial losses, the COMPANY will cease its operations on
October 10, 2003;chanrobleslaw

WHEREAS, all employees of the COMPANY on account of irreversible financial losses, will be
dismissed from employment effective October 10, 2003;chanrobleslaw

In view thereof, the parties agree as follows:chanRoblesvirtualLawlibrary

1. That UNION acknowledges that the COMPANY is experiencing severe financial losses and as a
consequence of which, management is constrained to cease the companys operations.

2. The UNION acknowledges that under Article 283 of the Labor Code, separation pay is granted
to employees who are dismissed due to closures or cessation of operations NOT DUE to serious
business losses.

3. The UNION acknowledges that in view of the serious business losses the Company has been
experiencing as seen in their audited financial statements, employees ARE NOT granted
separation benefits under the law.

4. The COMPANY, by way of goodwill and in the spirit of generosity agrees to grant financial
assistance less accountabilities to members of the Union based on length of service to be
computed as follows: (Ita

Number of days - 12.625 for every year of service

5. In view of the above, the members of the UNION will receive such financial assistance on an
equal monthly installments basis based on the following schedule:chanRoblesvirtualLawlibrary

First Check due on January 5, 2004 and every 5th of the month thereafter until
December 5, 2004.

6. The COMPANY commits to pay any accrued benefits the Union members are entitled to,
specifically those arising from sick and vacation leave benefits and 13th month pay, less
accountabilities based on the following schedule:chanRoblesvirtualLawlibrary

One Time Cash Payment to be distributed anywhere from. . . .

....

7. The foregoing agreement is entered into with full knowledge by the parties of their rights under
the law and they hereby bind themselves not to conduct any concerted action of whatsoever
kind, otherwise the grant of financial assistance as discussed above will be
withheld.8 (Emphasis in the original)

Solid Mills filed its Department of Labor and Employment termination report on September 2,
2003.9chanroblesvirtuallawlibrary

Later, Solid Mills, through Alfredo Jingco, sent to petitioners individual notices to vacate SMI
Village.10chanroblesvirtuallawlibrary

Petitioners were no longer allowed to report for work by October 10, 2003. 11 They were required to
sign a memorandum of agreement with release and quitclaim before their vacation and sick leave
benefits, 13th month pay, and separation pay would be released. 12 Employees who signed the
memorandum of agreement were considered to have agreed to vacate SMI Village, and to the
demolition of the constructed houses inside as condition for the release of their termination benefits
and separation pay.13 Petitioners refused to sign the documents and demanded to be paid their
benefits and separation pay.14chanroblesvirtuallawlibrary
Hence, petitioners filed complaints before the Labor Arbiter for alleged non-payment of separation pay,
accrued sick and vacation leaves, and 13th month pay. 15 They argued that their accrued benefits and
separation pay should not be withheld because their payment is based on company policy and
practice.16 Moreover, the 13th month pay is based on law, specifically, Presidential Decree No. 851. 17
Their possession of Solid Mills property is not an accountability that is subject to clearance
procedures.18 They had already turned over to Solid Mills their uniforms and equipment when Solid
Mills ceased operations.

On the other hand, Solid Mills argued that petitioners complaint was premature because they had not
vacated its property.2

The Labor Arbiter ruled in favor of petitioners.21 According to the Labor Arbiter, Solid Mills illegally
withheld petitioners benefits and separation pay.22 Petitioners right to the payment of their benefits
and separation pay was vested by law and contract.23 The memorandum of agreement dated
September 1, 2003 stated no condition to the effect that petitioners must vacate Solid Mills property
before their benefits could be given to them.24 Petitioners possession should not be construed as
petitioners accountabilities that must be cleared first before the release of benefits. 25 Their
possession is not by virtue of any employer-employee relationship. 26 It is a civil issue, which is
outside the jurisdiction of the Labor Arbiter.

The dispositive portion of the Labor Arbiters decision reads:

WHEREFORE, premises considered, judgment is entered ORDERING respondentsSOLID MILLS,

INC. and/or PHILIP ANG (President), in solido to pay the remaining 21
complainants:chanRoblesvirtualLawlibrary

1) 19 of which, namely EMER MILAN, RAMON MASANGKAY, ALFREDO JAVIER, RONALDO DAVID,
BONIFACIO MATUNDAN, NORA MENDOZA, MYRNA IGCAS, RAUL DE LAS ALAS, RENATO ESTOLANO, REX
S. DIMAFELIX, MAURA MILAN, JESSICA BAYBAYON, ALFREDO MENDOZA, ROBERTO IGCAS, ISMAEL MATA,
CARLITO DAMIAN, TEODORA MAHILOM, MARILOU LINGA, RENATO LINGA their separation pay of 12.625
days pay per year of service, pro-rated 13th month pay for 2003 and accrued vacation and sick
leaves, plus 12% interest p.a. from date of filing of the lead case/judicial demand on 12/08/03 until
actual payment and/or finality;

2) the remaining 2 of which, complainants CLEOPATRA ZACARIAS, as she already received on 12/19/03
her accrued 13th month pay for 2003, accrued VL/SL total amount of P15,435.16, likewise,
complainant Jerry L. Sesma as he already received his accrued 13th month pay for 2003, SL/VL in the
total amount of P10,974.97, shall be paid only their separation pay of 12.625 days pay per year of
service but also with 12% interest p.a. from date of filing of the lead case/judicial demand on 12/08/03
until actual payment and/or finality, which computation as of date, amount to as shown in the attached
computation sheet.

3) Nine (9) individual complaints viz., of Maria Agojo, Joey Suarez, Ronaldo Vergara, Ronnie Vergara,
Antonio R. Dulo, Sr., Bryan D. Durano, Silverio P. Durano, Sr., Elizabeth Duarte and Purificacion
Malabanan are DISMISSED WITH PREJUDICE due to amicable settlement, whereas, that of [RONIE
ARANAS], [EMILITO NAVARRO], [NONILON PASCO], [GENOVEVA PASCO], [OLIMPIO A. PASCO]
are DISMISSED WITHOUT PREJUDICE, for lack of interest and/or failure to prosecute.

The Computation and Examination unit is directed to cause the computation of the award in Pars. 2
and 3 above.

Solid Mills appealed to the National Labor Relations Commission. 29 It prayed for, among others, the
dismissal of the complaints against it and the reversal of the Labor Arbiters decision. 3
The National Labor Relations Commission affirmed paragraph 3 of the Labor Arbiters dispositive
portion, but reversed paragraphs 1 and 2. Thus:

WHEREFORE, the Decision of Labor Arbiter Renaldo O. Hernandez dated 10/17/05 is AFFIRMED in so far
as par. 3 thereof is concerned but modified in that paragraphs 1 and 2 thereof are REVERSED and SET
ASIDE. Accordingly, the following complainants, namely: Emir Milan, Ramon Masangkay, Alfredo Javier,
Ronaldo David, Bonifacio Matundan, Nora Mendoza, Myrna Igcas, Raul De Las Alas, Renato Estolano,
Rex S. Dimaf[e]lix, Maura Milan, Jessica Baybayon, Alfredo Mendoza, Roberto Igcas, Cleopatra Zacarias
and Jerry L. Sesmas monetary claims in the form of separation pay, accrued 13th month pay for 2003,
accrued vacation and sick leave pays are held in abeyance pending compliance of their
accountabilities to respondent company by turning over the subject lots they respectively occupy at
SMI Village Sucat Muntinlupa City, Metro Manila to herein respondent company. 31

The National Labor Relations Commission noted that complainants Marilou Linga, Renato Linga, Ismael
Mata, and Carlito Damian were already paid their respective separation pays and benefits. 32
Meanwhile, Teodora Mahilom already retired long before Solid Mills closure. 33 She was already given
her retirement benefits.

The National Labor Relations Commission ruled that because of petitioners failure to vacate Solid Mills
property, Solid Mills was justified in withholding their benefits and separation pay. 35 Solid Mills granted
the petitioners the privilege to occupy its property on account of petitioners employment. 36 It had the
prerogative to terminate such privilege.37 The termination of Solid Mills and petitioners employer-
employee relationship made it incumbent upon petitioners to turn over the property to Solid Mills. 3

Petitioners filed a motion for partial reconsideration on October 18, 2010, 39 but this was denied in the
November 30, 2010 resolution.

Petitioners, thus, filed a petition for certiorari41 before the Court of Appeals to assail the National Labor
Relations Commission decision of August 31, 2010 and resolution of November 30, 2010.

On January 31, 2012, the Court of Appeals issued a decision dismissing petitioners petition, 43thus:

WHEREFORE, the petition is hereby ordered DISMISSED.44

The Court of Appeals ruled that Solid Mills act of allowing its employees to make temporary dwellings
in its property was a liberality on its part. It may be revoked any time at its discretion.45 As a
consequence of Solid Mills closure and the resulting termination of petitioners, the employer-employee
relationship between them ceased to exist. There was no more reason for them to stay in Solid Mills
property.46 Moreover, the memorandum of agreement between Solid Mills and the union representing
petitioners provided that Solid Mills payment of employees benefits should be less accountabilities.

On petitioners claim that there was no evidence that Teodora Mahilom already received her retirement
pay, the Court of Appeals ruled that her complaint filed before the Labor Arbiter did not include a claim
for retirement pay. The issue was also raised for the first time on appeal, which is not allowed. 48 In
any case, she already retired before Solid Mills ceased its operations.

The Court of Appeals agreed with the National Labor Relations Commissions deletion of interest since
it found that Solid Mills act of withholding payment of benefits and separation pay was proper.
Petitioners terminal benefits and pay were withheld because of petitioners failure to vacate Solid
Mills property.

Finally, the Court of Appeals noted that Carlito Damian already received his separation pay and
benefits.51 Hence, he should no longer be awarded these claims. 5

In the resolution promulgated on July 16, 2012, the Court of Appeals denied petitioners motion for
reconsideration.5

Petitioners raise in this petition the following errors: y

WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE ERROR WHEN IT
RULED THAT PAYMENT OF THE MONETARY CLAIMS OF PETITIONERS SHOULD BE HELD IN ABEYANCE
PENDING COMPLIANCE OF THEIR ACCOUNTABILITIES TO RESPONDENT SOLID MILLS BY TURNING OVER
THE SUBJECT LOTS THEY RESPECTIVELY OCCUPY AT SMI VILLAGE, SUCAT, MUNTINLUPA CITY.

II

WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE ERROR WHEN IT
UPHELD THE RULING OF THE NLRC DELETING THE INTEREST OF 12% PER ANNUM IMPOSED BY THE
HONORABLE LABOR ARBITER HERNANDEZ ON THE AMOUNT DUE FROM THE DATE OF FILING OF THE
LEAD CASE/JUDICIAL DEMAND ON DECEMBER 8, 2003 UNTIL ACTUAL PAYMENT AND/OR FINALITY.

III

WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE ERROR WHEN IT
UPHELD THE RULING OF THE NLRC DENYING THE CLAIM OF TEODORA MAHILOM FOR PAYMENT OF
RETIREMENT BENEFITS DESPITE LACK OF ANY EVIDENCE THAT SHE RECEIVED THE SAME.

IV

WHETHER OR NOT PETITIONER CARLITO DAMIAN IS ENTITLED TO HIS MONETARY BENEFITS FROM
RESPONDENT SOLID MILLS.54

Petitioners argue that respondent Solid Mills and NAFLUs memorandum of agreement has no provision
stating that benefits shall be paid only upon return of the possession of respondent Solid Mills
property.55 It only provides that the benefits shall be less accountabilities, which should not be
interpreted to include such possession.56 The fact that majority of NAFLUs members were not
occupants of respondent Solid Mills property is evidence that possession of the property was not
contemplated in the agreement.57 Accountabilities should be interpreted to refer only to
accountabilities that were incurred by petitioners while they were performing their duties as
employees at the worksite.58 Moreover, applicable laws, company practice, or policies do not provide
that 13th month pay, and sick and vacation leave pay benefits, may be withheld pending satisfaction
of liabilities by the employee.

Petitioners also point out that the National Labor Relations Commission and the Court of Appeals have
no jurisdiction to declare that petitioners act of withholding possession of respondent Solid Mills
property is illegal.60 The regular courts have jurisdiction over this issue. 61 It is independent from the
issue of payment of petitioners monetary benefits.

For these reasons, and because, according to petitioners, the amount of monetary award is no longer
in question, petitioners are entitled to 12% interest per annum

Petitioners also argue that Teodora Mahilom and Carlito Damian are entitled to their claims. They insist
that Teodora Mahilom did not receive her retirement benefits and that Carlito Damian did not receive
his separation benefits.6

Respondents Solid Mills and Philip Ang, in their joint comment, argue that petitioners failure to turn
over respondent Solid Mills property constituted an unsatisfied accountability for which reason
petitioners benefits could rightfully be withheld. 65 The term accountability should be given its
natural and ordinary meaning.66 Thus, it should be interpreted as a state of being liable or
responsible, or obligation.67 Petitioners differentiation between accountabilities incurred while
performing jobs at the worksite and accountabilities incurred outside the worksite is baseless because
the agreement with NAFLU merely stated accountabilities, without qualification. 6

On the removal of the award of 12% interest per annum, respondents argue that such removal was
proper since respondent Solid Mills was justified in withholding the monetary claims.

Respondents argue that Teodora Mahilom had no more cause of action for retirement benefits claim. 70
She had already retired more than a decade before Solid Mills closure. She also already received her
retirement benefits in 1991.71 Teodora Mahiloms claim was also not included in the complaint filed
before the Labor Arbiter. It was improper to raise this claim for the first time on appeal. In any case,
Teodora Mahiloms claim was asserted long after the three-year prescriptive period provided in Article
291 of the Labor Code.

Lastly, according to respondents, it would be unjust if Carlito Damian would be allowed to receive
monetary benefits again, which he, admittedly, already received from Solid Mills

The National Labor Relations

Commission may preliminarily
determine issues related to rights
arising from an employer-employee
relationship

The National Labor Relations Commission has jurisdiction to determine, preliminarily, the parties rights
over a property, when it is necessary to determine an issue related to rights or claims arising from an
employer-employee relationship.

Article 217 provides that the Labor Arbiter, in his or her original jurisdiction, and the National Labor
Relations Commission, in its appellate jurisdiction, may determine issues involving claims arising from
employer-employee relations. Thus:
ART. 217. JURISDICTION OF LABOR ARBITERS AND THE COMMISSION. (1) Except as otherwise
provided under this Code, the Labor Arbiters shall have original and exclusive jurisdiction to hear and
decide within thirty (30) calendar days after the submission of the case by the parties for decision
without extension, even in the absence of stenographic notes, the following cases involving workers,
whether agricultural or non-agricultural:

1. Unfair labor practice cases;

2. Termination disputes;

3. If accompanied with a claim for reinstatement, those cases that workers may file involving
wages, rates of pay, hours of work and other terms and conditions of employment;

4. Claims for actual, moral, exemplary and other forms of damages arising from the employer-
employee relations;

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

6. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits,
all other claims, arising from employer-employee relations including those of persons in
domestic or household service, involving an amount exceeding five thousand pesos
(P5,000.00), regardless of whether accompanied with a claim for reinstatement.

(2) The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters.

Petitioners claim that they have the right to the immediate release of their benefits as employees
separated from respondent Solid Mills is a question arising from the employer-employee relationship
between the parties.

Claims arising from an employer-employee relationship are not limited to claims by an employee.
Employers may also have claims against the employee, which arise from the same relationship.

In Baez v. Valdevilla,74 this court ruled that Article 217 of the Labor Code also applies to employers
claim for damages, which arises from or is connected with the labor issue. Thus:

Whereas this Court in a number of occasions had applied the jurisdictional provisions of Article 217 to
claims for damages filed by employees, we hold that by the designating clause arising from the
employer-employee relations Article 217 should apply with equal force to the claim of an employer for
actual damages against its dismissed employee, where the basis for the claim arises from or is
necessarily connected with the fact of termination, and should be entered as a counterclaim in the
illegal dismissal case.75

Baez was cited in Domondon v. National Labor Relations Commission.76 One of the issues in
Domondon is whether the Labor Arbiter has jurisdiction to decide an issue on the transfer of ownership
of a vehicle assigned to the employee. It was argued that only regular courts have jurisdiction to
decide the issue.77chanroblesvirtuallawlibrary

This court ruled that since the transfer of ownership of the vehicle to the employee was connected to
his separation from the employer and arose from the employer-employee relationship of the parties,
the employers claim fell within the Labor Arbiters jurisdiction.
As a general rule, therefore, a claim only needs to be sufficiently connected to the labor issue raised
and must arise from an employer-employee relationship for the labor tribunals to have jurisdiction.

In this case, respondent Solid Mills claims that its properties are in petitioners possession by virtue of
their status as its employees. Respondent Solid Mills allowed petitioners to use its property as an act
of liberality. Put in other words, it would not have allowed petitioners to use its property had they not
been its employees. The return of its properties in petitioners possession by virtue of their status as
employees is an issue that must be resolved to determine whether benefits can be released
immediately. The issue raised by the employer is, therefore, connected to petitioners claim for
benefits and is sufficiently intertwined with the parties employer-employee relationship. Thus, it is
properly within the labor tribunals jurisdiction.

II

Institution of clearance procedures

has legal bases

Requiring clearance before the release of last payments to the employee is a standard procedure
among employers, whether public or private. Clearance procedures are instituted to ensure that the
properties, real or personal, belonging to the employer but are in the possession of the separated
employee, are returned to the employer before the employees departure.

As a general rule, employers are prohibited from withholding wages from employees. The Labor Code
provides:

Art. 116. Withholding of wages and kickbacks prohibited. It shall be unlawful for any person,
directly or indirectly, to withhold any amount from the wages of a worker or induce him to give up any
part of his wages by force, stealth, intimidation, threat or by any other means whatsoever without the
workers consent.

The Labor Code also prohibits the elimination or diminution of benefits.

Art. 100. Prohibition against elimination or diminution of benefits. Nothing in this Book shall
be construed to eliminate or in any way diminish supplements, or other employee benefits being
enjoyed at the time of promulgation of this Code.

However, our law supports the employers institution of clearance procedures before the release of
wages. As an exception to the general rule that wages may not be withheld and benefits may not be
diminished, the Labor Code provides:

Art. 113. Wage deduction. No employer, in his own behalf or in behalf of any person, shall make any
deduction from the wages of his employees, except:
1. In cases where the worker is insured with his consent by the employer, and the deduction is to
recompense the employer for the amount paid by him as premium on the insurance; 2. For union dues,
in cases where the right of the worker or his union to check-off has been recognized by the employer
or authorized in writing by the individual worker concerned; and

3. In cases where the employer is authorized by law or regulations issued by the Secretary of Labor
and Employment. (

The Civil Code provides that the employer is authorized to withhold wages for debts due:
Article 1706. Withholding of the wages, except for a debt due, shall not be made by the
employer.cralawred

Debt in this case refers to any obligation due from the employee to the employer. It includes any
accountability that the employee may have to the employer. There is no reason to limit its scope to
uniforms and equipment, as petitioners would argue.

More importantly, respondent Solid Mills and NAFLU, the union representing petitioners, agreed that
the release of petitioners benefits shall be less accountabilities.

Accountability, in its ordinary sense, means obligation or debt. The ordinary meaning of the term
accountability does not limit the definition of accountability to those incurred in the worksite. As
long as the debt or obligation was incurred by virtue of the employer-employee relationship, generally,
it shall be included in the employees accountabilities that are subject to clearance procedures.

It may be true that not all employees enjoyed the privilege of staying in respondent Solid Mills
property. However, this alone does not imply that this privilege when enjoyed was not a result of the
employer-employee relationship. Those who did avail of the privilege were employees of respondent
Solid Mills. Petitioners possession should, therefore, be included in the term accountability.

Accountabilities of employees are personal. They need not be uniform among all employees in order
to be included in accountabilities incurred by virtue of an employer-employee relationship.

Petitioners do not categorically deny respondent Solid Mills ownership of the property, and they do not
claim superior right to it. What can be gathered from the findings of the Labor Arbiter, National Labor
Relations Commission, and the Court of Appeals is that respondent Solid Mills allowed the use of its
property for the benefit of petitioners as its employees. Petitioners were merely allowed to possess
and use it out of respondent Solid Mills liberality. The employer may, therefore, demand the property
at will.

The return of the propertys possession became an obligation or liability on the part of the employees
when the employer-employee relationship ceased. Thus, respondent Solid Mills has the right to
withhold petitioners wages and benefits because of this existing debt or liability. In Solas v. Power and
Telephone Supply Phils., Inc., et al., this court recognized this right of the employer when it ruled that
the employee in that case was not constructively dismissed. 80

There was valid reason for respondents withholding of petitioners salary for the month of February
2000. Petitioner does not deny that he is indebted to his employer in the amount of around
P95,000.00. Respondents explained that petitioners salary for the period of February 1-15, 2000 was
applied as partial payment for his debt and for withholding taxes on his income; while for the period of
February 15-28, 2000, petitioner was already on absence without leave, hence, was not entitled to any
pay.81

The law does not sanction a situation where employees who do not even assert any claim over the
employers property are allowed to take all the benefits out of their employment while they
simultaneously withhold possession of their employers property for no rightful reason.

Withholding of payment by the employer does not mean that the employer may renege on its
obligation to pay employees their wages, termination payments, and due benefits. The employees
benefits are also not being reduced. It is only subjected to the condition that the employees return
properties properly belonging to the employer. This is only consistent with the equitable principle that
no one shall be unjustly enriched or benefited at the expense of another.
For these reasons, we cannot hold that petitioners are entitled to interest of their withheld separation
benefits. These benefits were properly withheld by respondent Solid Mills because of their refusal to
return its property.
Mahilom and Damian are not
entitled to the benefits claimed
Teodora Mahilom is not entitled to separation benefits.

Both the National Labor Relations Commission and the Court of Appeals found that Teodora Mahilom
already retired long before respondent Solid Mills closure. They found that she already received her
retirement benefits. We have no reason to disturb this finding. This court is not a trier of facts.
Findings of the National Labor Relations Commission, especially when affirmed by the Court of Appeals,
are binding upon this court.8

Moreover, Teodora Mahiloms claim for retirement benefits was not included in her complaint filed
before the Labor Arbiter. Hence, it may not be raised in the appeal.

Similarly, the National Labor Relations Commission and the Court of Appeals found that Carlito Damian
already received his terminal benefits. Hence, he may no longer claim terminal benefits.

The fact that respondent Solid Mills has not yet demolished Carlito Damians house in SMI Village is not
evidence that he did not receive his benefits. Both the National Labor Relations Commission and the
Court of Appeals found that he executed an affidavit stating that he already received the benefits.

Absent any showing that the National Labor Relations Commission and the Court of Appeals
misconstrued these facts, we will not reverse these findings.

Our laws provide for a clear preference for labor. This is in recognition of the asymmetrical power of
those with capital when they are left to negotiate with their workers without the standards and
protection of law. In cases such as these, the collective bargaining unit of workers are able to get more
benefits and in exchange, the owners are able to continue with the program of cutting their losses or
wind down their operations due to serious business losses. The company in this case did all that was
required by law.
The preferential treatment given by our law to labor, however, is not a license for abuse. 84 It is not a
signal to commit acts of unfairness that will unreasonably infringe on the property rights of the
company. Both labor and employer have social utility, and the law is not so biased that it does not find
a middle ground to give each their due.
Clearly, in this case, it is for the workers to return their housing in exchange for the release of their
benefits. This is what they agreed upon. It is what is fair in the premises.

WHEREFORE, the petition is DENIED. The Court of Appeals decision is AFFIRMED.

G.R. No. 195109, February 04, 2015

ANDY D. BALITE, DELFIN M. ANZALDO AND MONALIZA DL. BIHASA, Petitioners, v. SS

VENTURES INTERNATIONAL, INC., SUNG SIK LEE AND EVELYN RAYALA , Respondents.

DECISION

PEREZ, J.:

This is a Petition for Review on Certiorari pursuant to Rule 45 of the Revised Rules of Court, assailing
the 18 June 2010 Decision1 rendered by the Tenth Division of the Court of Appeals in CA-G.R. SP No.
109589. In its assailed decision, the appellate court reversed the Resolution of the National Labor
Relations Commission (NLRC) which denied the Motion to Reduce Appeal Bond filed by respondents SS
Ventures International, Inc., Sung Sik Lee and Evelyn Rayala

In a Resolution2 dated 30 December 2010, the appellate court refused to reconsider its earlier decision.

The Facts
Respondent SS Ventures International, Inc. is a domestic corporation duly engaged in the business of
manufacturing footwear products for local sales and export abroad. It is represented in this action by
respondents Sung Sik Lee and Evelyn Rayala. Petitioners Andy Balite (Balite), Monaliza Bihasa (Bihasa)
and Delfin Anzaldo (Anzaldo) were regular employees of the respondent company until their
employments were severed for violation of various company policies.

For his part, Balite was issued a Show Cause Memorandum by the respondent company on 4 August
2005 charging him with the following infractions: (1) making false reports, malicious and fraudulent
statements and rumor-mongering against the company; (2) threatening and intimidating co-workers;
(3) refusing to cooperate in the conduct of investigation; and (4) gross negligence in the care and use
of the company property resulting in the damage of the finished products. After respondent found
Balites explanation insufficient, he was dismissed from employment, through a Notice of Termination
on 6 September 2005.

Bihasa, on the other hand, was charged with absence without leave on two occasions and with
improper behavior, stubbornness, arrogance and uncooperative attitude towards superiors and
employees. Bihasa was likewise terminated from the service on 5 May 2006 after her explanation in an
administrative investigation was found unsatisfactory by the respondent company.

Anzaldo was also dismissed from employment after purportedly giving him due process. The records of
the infractions he committed as well as the date of his termination, however, are not borne by the
records.

Consequently, the three employees charged respondents with illegal dismissal and recovery of
backwages, 13th month pay and attorneys fees before the Labor Arbiter.

In refuting the allegations of the petitioners, respondents averred that petitioners were separated from
employment for just causes and after affording them procedural due process of law.

On 30 December 2007, the Labor Arbiter rendered a Decision 3 in favor of petitioners and held that
respondents are liable for illegal dismissal for failing to comply with the procedural and substantive
requirements in terminating employment. The decretal portion of the Labor Arbiter Decision
reads:chanRoblesvirtualLawlibrary

WHEREFORE, premises considered, [petitioners] are hereby found to have been illegally dismissed
even as respondents are held liable therefore.

Consequently, respondent corporation is hereby ordered to reinstate [petitioners] to their former

positions without loss of seniority rights and other privileges with backwages initially computed at this
time and reflected below.

The reinstatement aspect of this decision is immediately executory and thus respondents are hereby
required to submit a report of compliance therewith within ten (10) days from receipt thereof.

Respondent corporation is likewise ordered to pay [petitioners] their 13 th month pay and 10%
attorneys fees.

Backwages 13th month pay Attorneys fees

1. Andy Balite P162,969.04 P 17,511.00 P 18,048.00

2. Delfin 158,299.44 17,511.00 17,511.00

Anzaldo

3. Monaliza
116,506.62 17,511.00 13,401.75
Bihasa

All other claims are dismissed for lack of factual or legal basis. 4

Aggrieved, respondents interposed an appeal by filing a Notice of Appeal and paying the
corresponding appeal fee. However, instead of filing the required appeal bond equivalent to the total
amount of the monetary award which is P490,308.00, respondents filed a Motion to Reduce the Appeal
Bond to P100,000.00 and appended therein a managers check bearing the said amount. Respondents
cited financial difficulty as justification for their inability to post the appeal bond in full owing to the
partial shutdown of respondent companys operations.

In a Resolution5 dated 27 November 2008, the NLRC dismissed the appeal filed by the respondents for
non-perfection. The NLRC ruled that posting of an appeal bond equivalent to the monetary award is
indispensable for the perfection of the appeal and the reduction of the appeal bond, absent any
showing of meritorious ground to justify the same, is not warranted in the instant case.

Similarly ill-fated was respondents Motion for Reconsideration which was denied by the NLRC in a
Resolution6 dated 30 April 2009.

On certiorari, the Court of Appeals reversed the NLRC Decision and allowed the relaxation of the rule
on posting of the appeal bond. According to the appellate court, there was substantial compliance with
the rules for the perfection of an appeal because respondents seasonably filed their Memorandum of
Appeal and posted an appeal bond in the amount of P100,000.00. While the amount of the appeal
bond posted was not equivalent to the monetary award, the Court of Appeals ruled that respondents
were able to sufficiently prove their incapability to post the required amount of bond. 7The Court of
Appeals disposed in this wise:

WHEREFORE, premises considered, finding grave abuse of discretion on the part of the [NLRC], the
instant petition is GRANTED. The [NLRCs] Resolutions dated November 27, 2008 and April 30, 2009,
respectively, are hereby SET ASIDE. [The NLRC] is hereby directed to decide petitioners appeal on
the merits.8

In a Resolution9 dated 30 December 2010, the Court of Appeals refused to reconsider its earlier
decision.

Petitioners are now before this Court via this instant Petition for Review on Certiorari10 praying that the
Court of Appeals Decision and Resolution be reversed and set aside on the ground that:

WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS COMMITTED A GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OR IN EXCESS OF JURISDICTION WHEN IT REVERSED THE
RESOLUTION OF THE NLRC DISMISSING RESPONDENTS APPEAL FOR NON-PERFECTION THEREOF. 11

The Courts Ruling

Petitioners, in assailing the appellate courts decision, argue that posting of an appeal bond in full is
not only mandatory but a jurisdictional requirement that must be complied with in order to confer
jurisdiction upon the NLRC. They posit that the posting of an insufficient amount of appeal bond, as in
this case, resulted to the non-perfection of the appeal rendering the decision of the Labor Arbiter final
and executory.

Banking on the appellate courts decision, respondents, for their part, urge the Court to relax the rules
on appeal underscoring on the so-called utmost good faith they demonstrated in filing a Motion to
Reduce Appeal Bond and in posting a cash bond in the amount of P100,000.00. In justifying their
inability to post the required appeal bond, respondents reasoned that respondent company is in dire
financial condition due to lack of orders from customers constraining it to temporarily shut down its
operations resulting in significant loss of revenues. Respondents now plea for the liberal interpretation
of the rules so that the case can be threshed out on the merits, and not on technicality.

Time and again we reiterate the established rule that in the exercise of the Supreme Courts power of
review, the Court is not a trier of facts12 and does not routinely undertake the re-examination of the
evidence presented by the contending parties during the trial of the case considering that the findings
of facts of labor officials who are deemed to have acquired expertise in matters within their respective
jurisdiction are generally accorded not only respect, but even finality, and are binding upon this Court,
when supported by substantial evidence.13chanroblesvirtuallawlibrary

The NLRC ruled that no appeal had been perfected on time because of respondents failure to post the
required amount of appeal bond. As a result of which, the decision of the Labor Arbiter has attained
finality. The Court of Appeals, on the contrary, allowed the relaxation of the rules and held that
respondents were justified in failing to pay the required appeal bond. Despite the non-posting of the
appeal bond in full, however, the appellate court deemed that respondents were able to seasonably
perfect their appeal before the NLRC, thereby directing the NLRC to resolve the case on the merits.

The pertinent rule on the matter is Article 223 of the Labor Code, as amended, which sets forth the
rules on appeal from the Labor Arbiters monetary award:

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

xxxx

In case of a judgment involving a monetary award, an appeal by the employer may be perfected only
upon the posting of a cash or surety bond issued by a reputable bonding company duly
accredited by the Commission in the amount equivalent to the monetary award in the judgment
appealed from. (Emphases ours).

Implementing the aforestated provisions of the Labor Code are the provisions of Rule VI of the 2011
Rules of Procedure of the NLRC on perfection of appeals which read: ry

Section. 1. Periods of Appeal. - Decisions, awards or orders of the Labor Arbiter shall be final and
executory unless appealed to the Commission by any or both parties within ten (10) calendar days
from receipt thereof. x x x If the 10th day or the 5th day, as the case may be, falls on a Saturday,
Sunday or holiday, the last day to perfect the appeal shall be the first working day following such
Saturday, Sunday or holiday.

xxxx

Section 4. Requisites for Perfection of Appeal. (a) The appeal shall be:c
(1) filed within the reglementary period as provided in Section 1 of this Rule;

(2) verified by the appellant himself/herself in accordance with Section 4, Rule 7 of the Rules of Court
,as amended;

(3) in the form a of a memorandum of appeal which shall state the grounds relied upon and the
arguments in support thereof; the relief prayed for; and with a statement of the date when the
appellant received the appealed decision, award or order;

(4) in three (3) legibly typewritten or printed copies; and

(5) accompanied by:

i) proof of payment of the required appeal fee and legal research fee;

ii) posting of cash or surety bond as provided in Section 6 of this Rule; and

iii) proof of service upon the other parties.

xxxx

(b) A mere notice of appeal without complying with the other requisites aforestated shall not stop the
running of the period for perfecting an appeal.

xxxx

Section 5. Appeal Fee. - The appellant shall pay the prevailing appeal fee and legal research fee to the
Regional Arbitration Branch or Regional Office of origin, and the official receipt of such payment shall
form part of the records of the case.

Section 6. Bond. - In case the decision of the Labor Arbiter, or the Regional Director involves a
monetary award, an appeal by the employer shall be perfected only upon the posting of a
bond, which shall either be in the form of cash deposit or surety bond equivalent in amount to the
monetary award, exclusive of damages and attorneys fees.

xxxx

The Commission through the Chairman may on justifiable grounds blacklist a bonding company,
notwithstanding its accreditation by the Supreme Court.

These statutory and regulatory provisions explicitly provide that an appeal from the Labor Arbiter to
the NLRC must be perfected within ten calendar days from receipt of such decisions, awards
or orders of the Labor Arbiter. In a judgment involving a monetary award, the appeal shall be
perfected only upon (1) proof of payment of the required appeal fee; (2) posting of a cash or surety
bond issued by a reputable bonding company; and (3) filing of a memorandum of appeal.

In McBurnie v. Ganzon,15 we harmonized the provision on appeal that its procedures are fairly applied
to both the petitioner and the respondent, assuring by such application that neither one or the other
party is unfairly favored. We pronounced that the posting of a cash or surety bond in an amount
equivalent to 10% of the monetary award pending resolution of the motion to reduce appeal bond shall
be deemed sufficient to perfect an appeal, to wit:

It is in this light that the Court finds it necessary to set a parameter for the litigants and the NLRCs
guidance on the amount of bond that shall hereafter be filed with a motion for a bonds reduction. To
ensure that the provisions of Section 6, Rule VI of the NLRC Rules of Procedure that give parties the
chance to seek a reduction of the appeal bond are effectively carried out, without however defeating
the benefits of the bond requirement in favor of a winning litigant, all motions to reduce bond that are
to be filed with the NLRC shall be accompanied by the posting of a cash or surety bond equivalent to
10% of the monetary award that is subject of the appeal, which shall provisionally be deemed the
reasonable amount of the bond in the meantime that an appellants motion is pending resolution by
the Commission. In conformity with the NLRC Rules, the monetary award, for the purpose of computing
the necessary appeal bond, shall exclude damages and attorneys fees. Only after the posting of a
bond in the required percentage shall an appellants period to perfect an appeal under the NLRC Rules
be deemed suspended. d

The rule We set in McBurnie was clarified by the Court in Sara Lee Philippines v. Ermilinda
Macatlang.16 Considering the peculiar circumstances in Sara Lee, We determined what is the
reasonable amount of appeal bond. We underscored the fact that the amount of 10% of the award is
not a permissible bond but is only such amount that shall be deemed reasonable in the meantime that
the appellants motion is pending resolution by the Commission. The actual reasonable amount yet to
be determined is necessarily a bigger amount. In an effort to strike a balance between the
constitutional obligation of the state to afford protection to labor on the one hand, and the opportunity
afforded to the employer to appeal on the other, We considered the appeal bond in the amount of
P725M which is equivalent to 25% of the monetary award sufficient to perfect the appeal, viz

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

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

In line with Sara Lee and the objective that the appeal on the merits to be threshed out soonest by the
NLRC, the Court holds that the appeal bond posted by the respondent in the amount of P100,000.00
which is equivalent to around 20% of the total amount of monetary bond is sufficient to perfect an
appeal. With the employers demonstrated good faith in filing the motion to reduce the bond on
demonstrable grounds coupled with the posting of the appeal bond in the requested amount, as well
as the filing of the memorandum of appeal, the right of the employer to appeal must be upheld. This is
in recognition of the importance of the remedy of appeal, which is an essential part of our judicial
system and the need to ensure that every party litigant is given the amplest opportunity for the proper
and just disposition of his cause freed from the constraints of technicalities.

WHEREFORE, premises considered, the petition is DENIED. The assailed Decision and Resolution of
the Court of Appeals are hereby AFFIRMED
G.R. No. 206612, August 17, 2015

TOYOTA ALABANG, INC., Petitioner, v. EDWIN GAMES, Respondent.

RESOLUTION

SERENO, C.J.:

Remaining at bench is the Motion for Reconsideration 1 of petitioner Toyota Alabang, Inc. We had
unanimously denied2 its Petition for Review on Certiorari with Urgent Prayer for Injunctive Relief, 3which
sought the nullity of the Court of Appeals (CA) Decision and Resolution. 4 The CA affirmed the
Resolutions5 of the National Labor Relations Commission (NLRC) dismissing petitioner's appeal for non-
perfection and for lack of merit. In effect, the NLRC sustained the ruling 6 of the labor arbiter (LA)
finding that petitioner had illegally dismissed respondent Edwin Games (Games).

In gist, the antecedent facts are as follows:

Games, who worked as a foreman for petitioner, allegedly stole its vehicle lubricants. Subsequently, it
charged him with qualified theft before the trial court. Two years thereafter, or on 24 August 2007,
Games filed a Complainant for illegal dismissal, nonpayment of benefits, and damages against
petitioner. The latter, through counsel, failed to file its Position Paper on the date set on 15 November
2007.

Several resettings of the hearings ensued. During the 21 December 2007 hearing, petitioner
manifested that it had failed to file its Position Paper because its handling lawyer was no longer
connected with the company. Then, in the hearing of 11 January 2008, petitioner failed to appear and
even reneged on submitting its pleading. Accordingly, on 25 January 2008, the case was declared
submitted for decision.

On 5 February 2008, the LA ruled against petitioner and ordered the latter to pay Games P535,553.07
for his separation pay, back wages, service incentive leave pay and attorney's fees resulting from his
illegal dismissal. Petitioner no longer filed a motion for reconsideration. As a result, the LA's ruling
became final and executory.

The LA issued a Writ of Execution, which petitioner sought to quash. It prayed that the proceedings be
reopened, explaining that it had failed to present evidence because of its counsel's negligence in filing
the appropriate pleadings. The LA denied the claims of petitioner. Aggrieved, the latter appealed
before the NLRC.

The appeal of petitioner was denied due course because it had failed to show proof of its security
deposit for the appeal bond under Section 6, Rule VI of the 2005 NLRC Rules of Procedure. According to
the NLRC, the bonding company's mere declaration in the Certification of Security Deposit that the
bond was fully secured7 was not tantamount to a faithful compliance with the rule, because there must
first be an accompanying assignment of the employer's bank deposit.

On the merits, the NLRC dismissed the case on the basis of the rule that no appeal may be taken from
an order of execution of a final judgment.8 For the NLRC, petitioner's failure to appeal the LA Decision
already made the ruling final and executory.

Petitioner elevated the case to the CA via a Petition for Certiorari, but the action was dismissed. Firstly,
the CA ruled that the NLRC did not gravely abuse its discretion in denying the appeal, given that
petitioner had failed to comply faithfully with the bond requirement. Secondly, it echoed the ruling of
the NLRC that a final judgment is no longer appealable. Thirdly, the CA found that petitioner's own
negligence had caused it to lose its right to appeal.

Aggrieved, petitioner filed a Petition for Review on Certiorari with Urgent Prayer for Injunctive Relief
before this Court. It disputed the finding that it did not show proof of its security deposit for the appeal
bond. It also insisted that its counsel's gross negligence justified the reopening of the proceedings
below.

By way of a minute Resolution, this Court denied the petition considering that the allegations, issues
and arguments raised by petitioner failed to sufficiently show that the CA had committed any
reversible error in the challenged decision and resolution as to warrant the exercise of this
Court'sdiscretionary appellate jurisdiction. Hence, the instant Motion for Reconsideration.

The determinative issues in this case remain the same. This Court is tasked to review, on
reconsideration, whether or not the CA committed a reversible error in refusing to reopen the
proceedings below.

RULING OF THE COURT

To recall, the LA's decision finding that petitioner illegally dismissed respondent was already final and
executory because of petitioner's failure to file a timely appeal. Therefore, the labor dispute between
the parties should have been considered a closed case by then, and no longer subject to appeal. At
that point, Games should have already reaped the benefits of a favorable judgment. Still, petitioner
sought the reopening of the case, which the tribunals a quo denied.

This Court maintains that the CA correctly refused to reopen the proceedings below. The reopening of a
case is an extraordinary remedy,9 which, if abused, can make a complete farce of a duly promulgated
decision that has long become final and executory. Hence, there must be good cause on the movant's
part before it can be granted.

In this case, petitioner itself was negligent in advancing its case. As found by the appellate court,
petitioner was present during the mandatory conference hearing in which the latter was informed by
the LA of the need to file a Position Paper on 15 November 2007. However, petitioner not only reneged
on the submission of its Position Paper, but even failed to move for the filing of the pleading at any
point before the LA resolved the case on 5 February 2008.

Moreover, petitioner had failed to exhibit diligence when it did not attend the hearing on 11 January
2008, or any of the proceedings thereafter, despite its manifestation that it no longer had any legal
representative. Given the instances of negligence by petitioner itself, the Court finds that the CA justly
refused to reopen the case in the former's favor. Definitely, petitioner cannot now be allowed to claim
denial of due process when it was petitioner who was less than vigilant of its rights. 10redarclaw

At this stage of appellate review, Justice Lucas P. Bersamin dissents and votes to remand the case to
the LA for the reception of petitioner's evidence. He posits three reasons as follows:

First, he states that the NLRC gravely abused its discretion in requiring petitioner to post an appeal
bond, because this requirement does not cover an appeal from a decision of the LA denying a motion
to quash a writ of execution.

Second, he writes that in any event, the NLRC erred in requiring petitioner to accompany the appeal
bond with proof of a security deposit or collateral securing the bond. He bases this point on the fact
that the bonding company has already issued a Certificate of Security Deposit declaring that the
appeal bond was fully secured by a security deposit equivalent to the judgment award.

Third, he advances the opinion that there may be merit in the Rule 45 petition filed by petitioner. He
cites that it had a just cause to dismiss respondent after he had allegedly stolen its vehicle lubricants.

Before discussing these points, it is apropos to elucidate that this Court must be faithful to the
framework of resolving labor cases on appellate review before this Court. Universal Robina Sugar
Milling Corporation v. Acibo aptly explains:1

This Court's power of review in a Rule 45 pet1t1on is limited to resolving matters pertaining to any
perceived legal errors, which the CA may have committed in issuing the assailed decision. In reviewing
the legal correctness of the CA's Rule 65 decision in a labor case, we examine the CA decision in
the context that it determined, i.e., the presence or absence of grave abuse of discretion in
the NLRC decision before it and not on the basis of whether the NLRC decision on the
merits of the case was correct. In other words, we have to be keenly aware that the CA undertook
a Rule 65 review, not a review on appeal, of the NLRC decision challenged before it. (
Based on the foregoing, the task at hand involves a determination of whether or not the CA gravely
erred in finding that the NLRC did not exceed its jurisdiction in refusing to grant petitioner's entreaty to
reopen the case. In other words, as long as the exercise of discretion below is based on well founded
factual and legal bases,12 no abuse of discretion amounting to lack or excess of jurisdiction can be
imputed, and we are then justified to deny due course both to the Rule 45 petition and the
concomitant Motion for Reconsideration.

The tribunals below gave overwhelming justifications for their rulings. In contrast, the first
pointespoused in the dissenting opinion has no basis. The paraphrased proposition that "an appeal
bond is not required in appeals from decisions of the LA denying a motion to quash a writ of execution"
lacks any citation sourced from a statute or case law. Article 223 of the Labor Code and Section 6, Rule
VI of the 2011 NLRC Rules of Procedure, uniformly state thus:

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

Evidently, the above rules do not limit the appeal bond requirement only to certain kinds of rulings of
the LA. Rather, these rules generally state that in case the ruling of the LA involves a monetary
award, an employer's appeal may be perfected only upon the posting of a bond. Therefore, absent
any qualifying terms,13 so long as the decision of the LA involves a monetary award, as in this
case,14 that ruling can only be appealed after the employer posts a bond.

Clearly, this construction is but proper considering the avowed purpose of appeal bonds demanded by
the law from employers in labor cases. This matter was discussed by the Court in Computer
Innovations Center v. NLRC,15 to wit:

As earlier stated, the underlying purpose of the appeal bond is to ensure that the employee has
properties on which he or she can execute upon in the event of a final, providential
award. The non payment or woefully insufficient payment of the appeal bond by the employer
frustrates these ends. Respondent Cario alleges in hisComment before this Court that petitioner
Quilos and his wife have since gone abroad, and wonders aloud whether he still would be able to
collect his monetary award considering the circumstances. Petitioners, in
their Reply and Memorandum, do not aver otherwise. Indeed, such eventuality appears plausible
considering that Quilos himself did not personally verify the petition, and had in fact executed a
Special Power of Attorney in favor of his counsel, Atty. Bernabe B. Alabastro, authorizing the filing of
cases in his name. ft does not necessarily follow that the absence of Quilos from this country precludes
the execution of the award due Cario. However, if the absence of Quilos from this country proves to
render impossible the execution of judgment in favor of Cario, then the latter's victory may sadly be
rendered pyrrhic. The appeal bond requirement precisely aims to prevent empty or inconsequential
victories by the laborer, and it is hoped that herein petitioners' refusal to post the appropriate legal
appeal bond does not frustrate the ends of justice in this case.

If we are to construe otherwise, then an aggrieved party may simply seek the quashal of a writ of
execution, instead of going through the normal modes of appeal, to altogether avoid paying for an
appeal bond. This ruse will then circumvent the requirement of both labor rules and jurisprudence 16to
post an appeal bond before contesting the LA's grant of monetary award. Hence, the first point is not
only incorrect, but also dangerous.

The second point likewise fails to justify the grant of petitioner's Motion for Reconsideration. This point
refers to the proper construction of Section 6, Rule VI of the 2011 NLRC Rules of Procedure, which
demands that an appeal bond must be accompanied by a "proof of security deposit or collateral
securing the bond."

According to the NLRC and the CA, the bonding company's mere declaration in the Certification of
Security Deposit that the bond is fully secured17 is not tantamount to a faithful compliance with the
rule, because there must first be an accompanying assignment of the employer's bank deposit. On the
other hand, the dissent sees this declaration as an act that satisfies Section 6, Rule VI of the 2011
NLRC Rules of Procedure. For this reason, he opines that the NLRC should have entertained the appeal
of petitioner.

Notwithstanding this issue, the NLRC has given a well-founded reason for refusing to entertain
petitioner's appeal, namely, no appeal may be taken from an order of execution of a final and
executory judgment.

An appeal is not a matter of right, but is a mere statutory privilege. It may be availed of only in the
manner provided by law and the rules.18 Thus, a party who seeks to elevate an action must comply
with the requirements of the 2011 NLRC Rules of Procedure as regards the period, grounds, venue,
fees, bonds, and other requisites for a proper appeal before the NLRC; and in Section 6, Rule VI, the
aforesaid rules prohibit appeals from final and executory decisions of the Labor Arbiter.

In this case, petitioner elevated to the NLRC an already final and executory decision of the LA. To recall,
after petitioner learned of its former counsel's negligence in filing a Position Paper before the LA, it
nonetheless failed to file a motion reconsideration to question the ruling of the LA that it illegally
dismissed Games. At that point, the Decision was already final and executory, so the LA dutifully
issued a Writ of Execution. Petitioner sought the quashal of the writ of execution and the reopening of
its case only at that stage; and only after it was rebuffed by the LA did petitioner appeal before the
NLRC. Based on the timeline, therefore, the LA's adverse Decision had become final and executory
even prior to petitioner's appeal before the NLRC contesting the denial of the Motion to Quash the Writ
of Execution. Consequently, the NLRC dismissed the appeal based on its clear prohibition under
Section 5, Rule V of the 2011 NLRC Rules of Procedure.

The NLRC's reasoning that no appeal may be taken from an order of execution of a final and executory
judgment is also rooted in case law. Jurisprudence dictates that a final and executory decision of the LA
can no longer be reversed or modified.20 After all, just as a losing party has the right to file an appeal
within the prescribed period, so does the winning party have the correlative right to enjoy the finality
of the resolution of the case.21 On this basis, theCA did not grievously err when it concluded that the
ruling of the NLRC denying petitioner's appeal was not baseless, arbitrary, whimsical, or despotic.

Finally, as regards the third point pertaining to the advancement of the merits 23 of the case, it may no
longer be properly considered by this Court. To adjudicate on the merits of the instant appeal would
require the reopening of the whole case, a step that all the tribunals below - the LA, the NLRC, and the
CA- have already refused to take.

As correctly ruled by the CA, the reopening of a case is, by default, not allowed merely on the ground
that the counsel has been negligent in taking the required steps to protect the interest of the client,
such as timely filing a pleading, appearing during hearings, and perfecting appeals. 24 An exception
arises only when there is good cause and excusable negligence on the client's part.

Both the explanation of the CA and the records undeniably show no good cause or excusable
negligence on the part of the client - petitioner Toyota Alabang, Inc. given the totality of the instances
of the latter's own negligence in these proceedings, viz: (1) despite being informed, during the
mandatory conference hearing, of the necessity to file a Position Paper, petitioner reneged on its duty
to timely submit its Position Paper to the LA on 15 November 2007; (2) after manifesting that it no
longer had a counsel, petitioner was still absent on 11 January 2008, the date when it could still have
submitted its belated Position Paper; (3) thereafter, it altogether absented itself from all the
proceedings before the LA; (4) at no point before the LA's resolution of the case on 5 February 2008
did petitioner file a Position Paper; and (5) after allowing the LA Decision to attain finality as a result of
its non-submission of an appeal or a motion for reconsideration, petitioner belatedly sought the
quasha1 of the execution of the LA Decision granting compensation to respondent.

Despite the overwhelming lapses mentioned above, the dissent maintains that petitioner cannot be
considered negligent by any measure. According to the dissent, petitioner could not be faulted for
failing to file a position paper because the filing of pleadings has been entrusted to its counsel. For the
dissent, "given the nature and extent of its business and operations, the petitioner could not be
expected to supervise and monitor all the cases it had entrusted to its lawyer." But, this stance is
baseless as can be seen by the lack of legal citation in the dissent.

More importantly, this Court cannot give special treatment to petitioner. In our past cases, this Court
already held that the failure of the counsel to file the required position papers before the LA is not a
ground to declare that petitioner had been deprived of due process; and is not a cause to conclude
that the proceedings a quo had been null and void.26 In Building Care Corporation v. Macaraeg,27 this
Court thoroughly explained that

It is, however, an oft-repeated ruling that the negligence and mistakes of counsel bind the client. A
departure from this rule would bring about never-ending suits, so long as lawyers could allege their
own fault or negligence to support the client's case and obtain remedies and reliefs already lost by the
operation of law. The only exception would be, where the lawyer's gross negligence would result in the
grave injustice of depriving his client of the due process of law. In this case, there was no such
deprivation of due process. Respondent was able to fully present and argue her case before the Labor
Arbiter. She was accorded the opportunity to be heard.

We have consistently held that the requirements of due process are satisfied when the parties are
given the opportunity to submit position papers wherein they are supposed to attach all the
documents that would prove their claim in case it be decided that no hearing should be conducted or
was necessary.28 Here, petitioner, despite being given several chances to pass its position paper, did
not at all comply. Worse, petitioner also had other instances of negligence. Consequently, this Court
cannot redo the whole proceedings of the Labor Arbiter who had already afforded due process to the
former.

Given the foregoing reasons, juxtaposed with the high threshold for resolving appellate reviews in
labor cases before this Court, we rule for the denial of petitioner's Motion for Reconsideration.

WHEREFORE, the Petition for Review with Urgent Prayer for Injunctive Relief filed by Toyota Alabang,
Inc. is DENIED with FINALITY. No further pleadings shall be entertained in this case. Let an Entry of
Judgment be issued in due course.
G.R. No. 215630, March 09, 2015

METROGUARDS SECURITY AGENCY CORPORATION (FORMERLY KNOWN AS BEEGUARDS

CORPORATION) AND MS. MILAGROS T. CHAN, Petitioners, v. ALBERTO N. HILONGO,Respondent.

RESOLUTION

VILLARAMA, JR., J.:

Before us is a petition for review of the Decision 1 dated July 22, 2014 and Resolution2 dated November
18, 2014 of the Court of Appeals (CA) in CA-G.R. SP No. 134501.

The facts follow:

In his Decision3 dated April 30, 2010 in NLRC NCR-10-14411-09, entitled Alberto Hilongo v. Bee Guards
Corp./Milagros Chan, the Labor Arbiter ruled that herein respondent Alberto N. Hilongo was illegally
dismissed, to wit:

WHEREFORE, premises considered, judgment is rendered finding the dismissal of complainant

[Hilongo] as illegal and ordering the respondents [herein petitioners] to pay complainant [Hilongo] his
backwages from the date of dismissal to the date of this decision and separation pay of one month pay
per year of service, plus 10% thereof as attorneys fees as all hereunder
computed:chanRoblesvirtualLawlibrary

I. Backwages:

A. Basic Salary

9/5/09 4/30/09 (sic) = 7.83

P382 x 26 x 7.83 P77,767.56

B. 13th Month Pay

P77,767.56/12 6,480.63

C. Service Incentive Leave 1,246.27 P85,494.46

II. Separation Pay

10/25/01 4/30/10 = 7 yrs. P 69,524.00

P382 x 26 x 7 years P155,018.46

III. 10% Attorneys fees 15,501.85

P170,520.31

SO ORDERED.4

On appeal, the National Labor Relations Commission (NLRC) reversed the ruling of the Labor Arbiter in
its Decision5 dated September 30, 2010 and Resolution dated November 23,
2010.6chanroblesvirtuallawlibrary

Aggrieved, Hilongo filed a petition for certiorari before the CA, docketed as CA-G.R. SP No. 117891. 7In
its Decision8 dated September 7, 2012, the CA reversed the NLRC decision and reinstated the Labor
Arbiters Decision dated April 30, 2010.9 Petitioners motion for reconsideration was denied by the CA
in its Resolution10 dated March 26, 2013. Petitioners no longer appealed to this Court. 1

Hilongo then filed a motion for entry of judgment and a motion for clarification of Decision/Resolution
praying that the CAs March 26, 2013 Resolution be clarified and interpreted to include the amount of
the award as stated in the Labor Arbiters Decision dated April 30, 2010 and additional award
computed from May 1, 2010 to March 26, 2013, or the date the CA denied petitioners motion for
reconsideration.

In its Resolution13 dated June 11, 2013, the CA granted the motion for entry of judgment and noted
Hilongos motion for clarification of Decision/Resolution. The CA held that when an appellate court
affirms the Labor Arbiters ruling, it is understood that awards due to the illegally dismissed employee
shall be recomputed in order to account for the period of time that has lapsed from the rendition of the
Labor Arbiters decision up to its finality. The CA quoted this Courts ruling in Session Delights Ice
Cream and Fast Foods v. Court of Appeals,14 and Gonzales v. Solid Cement Corporation15:

Consistent with what we discussed above, we hold that under the terms of the decision under
execution, no essential change is made by a re-computation as this step is a necessary consequence
that flows from the nature of the illegality of dismissal declared in that decision. A re-computation (or
an original computation, if no previous computation has been made) is a part of the law specifically,
Article 279 of the Labor Code and the established jurisprudence on this provision that is read into the
decision. By the nature of an illegal dismissal case, the reliefs continue to add on until full satisfaction,
as expressed under Article 279 of the Labor Code. The re-computation of the consequences of illegal
dismissal upon execution of the decision does not constitute an alteration or amendment of the final
decision being implemented. The illegal dismissal ruling stands; only the computation of monetary
consequences of this dismissal is affected and this is not a violation of the principle of immutability of
final judgments.16

After the corresponding entry of judgment was issued on June 11, 2013, the case was remanded to the
Labor Arbiter. On July 9, 2013, respondent Hilongo filed a motion for issuance of writ of execution
alleging that the June 11, 2013 CA Resolution had confirmed that the amount of P170,520.31 awarded
by the Labor Arbiter is not sufficient, and that there is a need to compute additional monetary awards
reckoned from May 1, 2010 up to April 26, 2013 or the date Hilongo presumed as the date of finality of
the decision.1y

In an Order18 dated October 29, 2013, the Labor Arbiter directed the issuance of a writ of execution
and ruled that the award of P170,520.31 as stated in the Labor Arbiters Decision dated April 30, 2010
prevails.

Hilongo filed a petition for extraordinary remedy before the NLRC which dismissed the petition in its
Decision19 dated November 29, 2013. The NLRC also denied Hilongos motion for reconsideration in its
Resolution20 dated January 16, 2014.

Hence, Hilongo filed a petition for certiorari before the CA.

In the assailed Decision dated July 22, 2014, the CA granted Hilongos petition and set aside the NLRC
Decision dated November 29, 2013 and Resolution dated January 16, 2014. The CA ordered the Labor
Arbiter to re-compute Hilongos monetary awards, to wit:

WHEREFORE, in view of the foregoing, the petition is GRANTED. The Decision dated November 29,
2013 and Resolution dated January 16, 2014 of public respondent National Labor Relations
Commission, Second Division, in NLRC LER N[o]. 11-322-13/NLRC LAC N[o]. 07-001-485-10 (NLRC NCR-
10-14411-09) are hereby REVERSED and SET ASIDE.

The case is hereby REMANDED to the Labor Arbiter for the RE-COMPUTATION of the total monetary
benefits due to petitioner [Hilongo]. The Labor Arbiter is furtherDIRECTED to incorporate the following
in the re-computation:

(1) Additional backwages and separation pay from May 1, 2010 to June 11, 2013, or the date when the
April 30, 2010 Decision of Labor Arbiter Macam became final and executory;

(2) Interest of twelve percent (12%) per annum of the total monetary awards, computed from June 11,
2013 to June 30, 2013 and six percent x x x (6%) per annum from July 1, 2013 until their full
satisfaction.

SO ORDERED.21

The CA held that it is already settled that the computation of the monetary awards due to the illegally
dismissed employee must continue to run until the final termination of the case on appeal. The CA
ruled that the Labor Arbiter should have been guided by the CA Resolution dated June 11, 2013 which
had clarified that a re-computation of Hilongos award is necessary. 22 The CA also ruled that the re-
computation of the monetary awards is a necessary consequence that flows from the nature of the
illegality of Hilongos dismissal. The CA further noted that since the Labor Arbiters Decision dated April
30, 2010 had ordered the payment of separation pay, in lieu of reinstatement, the finality of said
decision on June 11, 2013 effectively declares that Hilongos employment relationship with petitioners
has ended on said date. Hence, separation pay and back wages must be computed up to that point to
account for the time the illegally dismissed employee should have been paid his salary and benefit
entitlements.

Hence, this petition.

The issue for our consideration is whether the CA erred in ordering the re-computation of Hilongos
monetary awards.

We rule in the negative.

The issue is not novel. In Nacar v. Gallery Frames,24 we have held that:chanRoblesvirtualLawlibrary

x x x no essential change is made by a recomputation as this step is a necessary consequence that

flows from the nature of the illegality of dismissal declared by the Labor Arbiter in that decision. A
recomputation (or an original computation, if no previous computation has been made) is a part of the
law specifically, Article 279 of the Labor Code and the established jurisprudence on this provision
that is read into the decision. By the nature of an illegal dismissal case, the reliefs continue to add up
until full satisfaction, as expressed under Article 279 of the Labor Code. The recomputation of the
consequences of illegal dismissal upon execution of the decision does not constitute an alteration or
amendment of the final decision being implemented. The illegal dismissal ruling stands; only the
computation of monetary consequences of this dismissal is affected, and this is not a violation of the
principle of immutability of final judgments.

Nacar reiterated the Courts ruling in the earlier cases of Session Delights and Gonzales.

We thus cannot agree with petitioners contention that a decision that has acquired finality becomes
immutable and unalterable.25 The re-computation of the consequences of illegal dismissal upon
execution of the decision does not constitute an alteration or amendment of the final decision being
implemented. The illegal dismissal ruling stands; only the computation of monetary consequences of
this dismissal is affected, and this is not a violation of the principle of immutability of final judgments.

Likewise without merit is petitioners contention that [i]t may very well be argued that the NLRCs
final decision reversing the Labor Arbiter is in fact the final decision that effectively declared the
employment relationship between Hilongo and [petitioners] as ended on which date the computation
of the separation pay and backwages awarded by the Labor Arbiter ultimately ceased. 26 We note that
the CA, in its Decision dated September 7, 2012, had reversed the NLRC Decision dated September 30,
2010 and Resolution dated November 23, 2010, and reinstated the Labor Arbiters Decision dated April
30, 2010. Thus, petitioners cannot claim that the NLRC decision which was set aside with finality is
the NLRCs final decision and the final decision that effectively declared the employment
relationship between the parties as ended.

Said CA Decision dated September 7, 2012 became final and executory on April 26, 2013.27 Thus, the
April 30, 2010 Decision of the Labor Arbiter which ordered the payment of separation pay in lieu of
reinstatement, effectively ended the employment relationship of the parties on April 26, 2013, the date
the CA decision became final. Since the Labor Arbiters computation of Hilongos monetary award was
up to the date of his April 30, 2010 Decision only, the CA properly decreed the computation of
additional back wages and separation pay.

However, the CA incorrectly concluded that the April 30, 2010 Decision of the Labor Arbiter became
final on June 11, 2013,28 contrary to its own finding that it became final and executory on April 26,
2013.29 This led to its erroneous computation of the additional back wages and separation pay of
Hilongo, as well as reckoning the date of the 12% legal interest. Following the teaching of Nacar v.
Gallery Frames30 that the computation of the monetary consequences (back wages and separation
pay) of the illegal dismissal decision should be reckoned from its finality, the additional back wages
and separation pay of Hilongo should be computed from May 1, 2010 to April 26, 2013. Further, the
payment of legal interest of 12% per annum should also be from April 26, 2013 up to June 30, 2013.
Thereafter, in accordance with Bangko Sentral ng Pilipinas Monetary Boards Circular No. 799, 31 series
of 2013, the legal interest computed from July 1, 2013 until the monetary awards were fully satisfied
will be 6% per annum.

WHEREFORE, we DENY the instant petition and AFFIRM with MODIFICATION the Decision dated
July 22, 2014 and Resolution dated November 18, 2014 of the Court of Appeals in CA-G.R. SP No.
134501. The dispositive portion of the Decision dated July 22, 2014 of the Court of Appeals in CA-G.R.
SP No. 134501 shall read as follows:

WHEREFORE, in view of the foregoing, the petition is GRANTED. The Decision dated November 29,
2013 and Resolution dated January 16, 2014 of public respondent National Labor Relations
Commission, Second Division, in NLRC LER N[o]. 11-322-13/NLRC LAC N[o]. 07-001-485-10 (NLRC NCR-
10-14411-09) are hereby REVERSED and SET ASIDE.
The case is hereby REMANDED to the Labor Arbiter for the RE-COMPUTATION of the total monetary
benefits due to petitioner [Hilongo]. The Labor Arbiter is furtherDIRECTED to incorporate the following
in the re-computation:

(1) Additional backwages and separation pay from May 1, 2010 to April 26, 2013, or the date when
the April 30, 2010 Decision of Labor Arbiter Macam became final and executory

(2) Interest of twelve percent (12%) per annum of the total monetary awards, computed from April
26, 2013 to June 30, 2013 and six percent x x x (6%) per annum from July 1, 2013 until their full
satisfaction.

G.R. No. 209383, March 11, 2015

SEACREST MARITIME MANAGEMENT, INC., ROLANDO B. MAGCALE, AND SEALION SHIPPING

LIMITED UNITED KINGDOM, Petitioners, v. MAURICIO G. PICAR, JR., Respondent.

DECISION

MENDOZA, J.:

This is a petition for review under Rule 45 of the Rules of Court assailing the May 2, 2013 Decision 1and
the September 9, 2013 Resolution2 of the Court of Appeals (CA) in CA-G.R. SP No. 124763, which
dismissed, for being moot and academic, the petition for certiorari filed under Rule 65 questioning the
decision of the National Labor Relations Commission (NLRC), in a case for disability benefits.

The Antecedents

Respondent Mauricio Picar, Jr. (Picar) was employed by petitioner Sealion Shipping Limited United
Kingdom through its local manning agent Seacrest Maritime Management, Inc. (petitioners), as Chief
Cook continuously for several contracts from April 2005 until his last employment contract in 2010, on
board the vessel, MV Toisa Paladin. The last contract was for a fixed duration of three (3) months
which commenced on September 5, 2010 with a basic salary of US$630.00 exclusive of overtime pay
and other benefits.

On September 24, 2010, Picar experienced high fever, chilling, lumbar back pain, and difficulty in
urinating accompanied with blood. He was referred for medical treatment to the Maritime Medical
Center PTE, Ltd in Singapore (MMC). He was diagnosed with Urinary Tract Infection (UTI) and Renal
Calculus. After his check-up, he was required to go back to the vessel and take a rest. On September
28, 2010, he was brought back to MMC where he was confined until October 1, 2010. On October 2,
2010, he was repatriated.

Upon his arrival in Manila, Picar was referred to Dr. Natalio G. Alegre (Dr. Alegre) at St. Lukes Medical
Center (SLMC). On October 21, 2010, he underwent sonography of his kidneys and urinary bladder,
which showed renal cyst on his right kidney; calyceal lithiasis, right; and normal urinary bladder;
slightly enlarged prostate gland was noted. Dr. Alegre repeatedly recommended that he undergo
extracorporeal shockwave lithotripsy for the dissolution of his right kidney stone.

On February 23, 2011, Picar consulted Dr. Efren R. Vicaldo (Dr. Vicaldo) who also diagnosed him to be
suffering from Right Renal Calculus, Essential Hypertension. Dr. Vicaldo considered his illness as work
aggravated/related and declared him unfit to resume work as a seafarer in any capacity.

Picar then filed a complaint for permanent disability compensation, balance of sick wages,
reimbursement of medical expenses, moral and exemplary damages, and attorneys fees.

On June 22, 2011, the Labor Arbiter (LA) rendered judgment7 in favor of Picar. The LA found that his
illness was work-related and that the nature of his work as a chief cook contributed to the aggravation
of his condition. The dispositive portion of the decision reads:

WHEREFORE, premises considered, judgment is hereby rendered ordering respondents to pay jointly
and severally the complainant his permanent disability compensation in the sum of US$60,000.00,
balance of sick wages in the sum of US$1,890.00, moral damages in the sum of P200,000.00,
exemplary damages in the sum of P200,000.00, and ten percent (10%) of the judgment award as
attorneys fees.

All other claims are dismissed for lack of merit.

SO ORDERED.

On appeal, the NLRC affirmed in toto the decision of the LA.9 The NLRC ruled that Picars disability was
permanent as he was totally unable to perform his job for more than 120 days from his repatriation. In
support of its ruling, it cited the case of Remigio v. NLRC10 where it was held that if an employee was
unable to perform his customary job for more than 120 days and did not come within the coverage of
Rule X of the Amended Rules on Employees Compensability (which, in more detailed manner,
describes what constitutes temporary total disability), then the said employee undoubtedly suffered
from permanent total disability regardless of whether or not he lost the use of any part of his body.

Aggrieved, petitioners elevated the matter to the CA.

In the meantime, Picar moved for the execution of the LA decision. On July 3, 2012, the LA issued a
Writ of Execution for the enforcement and full satisfaction of its decision. Consequently, petitioners
paid the judgment award as evidenced by the Satisfaction of Judgment pursuant to a Writ of Execution
with Acknowledgment Receipt executed by the NLRC-NCR Sheriff on August 13, 2012.

In its assailed Decision, dated May 2, 2013, the CA dismissed the petition. Citing the case of Career
Philippines Ship Management, Inc. v. Madjus,12 the CA ruled that the payment by petitioners of the
judgment award constituted an amicable settlement that had rendered the petition moot and
academic. The dispositive portion of the decision reads:

WHEREFORE, in light of the foregoing considerations, the instant petition is DISMISSED for having
become MOOT AND ACADEMIC.

Petitioners filed a motion for reconsideration of the said decision, but it was denied in the CA
Resolution, dated September 9, 2013.

Hence, this petition.

Issues and Arguments

For resolution is the sole issue of whether the CA committed reversible error in dismissing the petition
for having become moot and academic.
Petitioners contend that the settlement of the judgment award was by virtue of a writ of execution duly
issued and was effected specifically without prejudice to further recourse before the CA. There was
nothing voluntary about the satisfaction of the judgment award made in strict and compulsory
compliance with Rule XI, Section 8 of the 2011 NLRC Rules of Procedure. The terms of the settlement
were fair to both the employer and the employee. Hence, the ruling in Career Philippines,relied upon
by the CA, was inapplicable.

On April 14, 2014, Picar filed his Comment 14 wherein he stresses that the CA committed no error in
dismissing the petition. He asserts that the voluntary satisfaction by petitioners of the full judgment
award rendered the said petition moot and was a clear indication that petitioners believed on the
merits and judiciousness of the award for disability compensation.

Petitioners fault the CA for dismissing outright the petition for being moot and academic instead of
resolving the same on its merits.

The Courts Ruling

As correctly argued by petitioners, the petition for certiorari before the CA was not rendered moot and
academic by their satisfaction of the judgment award in compliance with the writ of execution issued
by the LA The CA cited Career Philippines, but it finds no application here. Career Philippineswas
resolved on equitable considerations. In the said case, while petitioner employer had the luxury of
having other remedies available to it such as its petition for certiorari pending before the CA and an
eventual appeal to this Court, respondent seafarer could no longer pursue other claims, including for
interests that may accrue during the pendency of the case. Thus, it was held that the LA and the CA
could not be faulted for interpreting petitioners "conditional settlement" to be tantamount to an
amicable settlement of the case resulting in the mootness of the petition for certiorari.

In this case, no such document was executed between the parties. The payment of the judgment
award without prejudice by petitioners required no obligations whatsoever on the part of Picar.

The case of Leonis Navigation v. Villamater(Leonis Navigation) 15 is more in point, where the Court
explained:

Petitioners never moved for a reconsideration of this Order regarding the voluntariness of their
payment to Sonia, as well as the dismissal with prejudice and the concomitant termination of the case.

However, petitioners argued that the finality of the case did not render the petition
for certiorari before the CA moot and academic. On this point, we agree with petitioners.

In the landmark case of St. Martin Funeral Home v. NLRC,16 we ruled that judicial review of decisions of
the NLRC is sought via a petition for certiorari under Rule 65 of the Rules of Court, and the petition
should be filed before the CA, following the strict observance of the hierarchy of courts. Under Rule 65,
Section 4,17 petitioners are allowed sixty (60) days from notice of the assailed order or resolution within
which to file the petition. Thus, although the petition was not filed within the 10-day period, petitioners
seasonably filed their petition for certiorari before the CA within the 60-day reglementary period under
Rule 65.

Further, a petition for certiorari does not normally include an inquiry into the correctness of its
evaluation of the evidence. Errors of judgment, as distinguished from errors of jurisdiction, are not
within the province of a special civil action for certiorari,which is merely confined to issues of
jurisdiction or grave abuse of discretion. It is, thus, incumbent upon petitioners to satisfactorily
establish that the NLRC acted capriciously and whimsically in order that the extraordinary writ
of certiorari will lie. By grave abuse of discretion is meant such capricious and whimsical exercise of
judgment as is equivalent to lack of jurisdiction, and it must be shown that the discretion was
exercised arbitrarily or despotically.

Adhering to the pronouncement in Leonis Navigation, the Court, in Philippine Transmarine Carriers, Inc.
v. Legaspi (Transmarine),19 held that the satisfaction of the monetary award by the employer did not
render the petition for certiorari moot before the CA. In Transmarine, pursuant to a writ of execution
issued, the employer ship-owner/manning agency and the complaining seafarer agreed to a settlement
of the judgment award. It was, however, stipulated that the settlement shall be without prejudice to
the pending petition for certiorari filed by the employer before the CA. It was further agreed that, in
the event that the petition would be granted and the judgment award would be eventually reversed,
whether in full or partially, the seafarer shall return all amounts in excess of what he would be entitled
to and the employer shall be allowed to file the necessary motion for the return or restitution of the
amount unjustly paid. The parties covenants, as well as the acknowledgment by the seafarer of
receipt in full of the judgment award, were embodied in a receipt of the judgment award with
undertaking.

The CA, upon being informed of the settlement, dismissed the petition for certiorari for being moot
and academic. In support of the dismissal, the CA also relied on Career Philippines. In reversing and
setting aside the order of dismissal issued by the CA, the Court in Transmarine wrote:

In Career Philippines, believing that the execution of the LA Decision was imminent after its petition for
injunctive relief was denied, the employer filed before the LA a pleading embodying a conditional
satisfaction of judgment before the CA and, accordingly, paid the employee the monetary award in the
LA decision. In the said pleading, the employer stated that the conditional satisfaction of the judgment
award was without prejudice to its pending appeal before the CA and that it was being made only to
prevent the imminent execution.

The CA later dismissed the employers petition for being moot and academic, noting that the decision
of the LA had attained finality with the satisfaction of the judgment award. This Court affirmed the
ruling of the CA, interpreting the "conditional settlement" to be tantamount to an amicable settlement
of the case resulting in the mootness of the petition for certiorari, considering (i) that the employee
could no longer pursue other claims, and (ii) that the employer could not have been compelled to
immediately pay because it had filed an appeal bond to ensure payment to the employee.

Stated differently, the Court ruled against the employer because the conditional satisfaction of
judgment signed by the parties was highly prejudicial to the employee. The agreement stated that the
payment of the monetary award was without prejudice to the right of the employer to file a petition
for certiorari and appeal, while the employee agreed that she would no longer file any complaint or
prosecute any suit of action against the employer after receiving the payment.

In the present case, the Receipt of the Judgment Award with Undertaking was fair to both the employer
and the employee. As in Leonis Navigation, the said agreement stipulated that respondent should
return the amount to petitioner if the petition for certiorari would be granted but without prejudice to
respondents right to appeal. The agreement, thus, provided available remedies to both parties.

It is clear that petitioner paid respondent subject to the terms and conditions stated in the Receipt of
the Judgment Award with Undertaking. Both parties signed the agreement. Respondent neither refuted
the agreement nor claimed that he was forced to sign it against his will. Therefore, the petition
for certiorari was not rendered moot despite petitioners satisfaction of the judgment award, as the
respondent had obliged himself to return the payment if the petition would be granted.

Verily in this case, petitioners satisfied the judgment award in strict compliance with a duly issued writ
of execution and pursuant to terms fair to both parties. Thus, the equitable ruling in Career
Philippines would certainly be unfair to petitioners in this case as they still have a remedy under the
rules. The CA, therefore, was in error in dismissing the petition for being moot and academic.

WHEREFORE, the petition is GRANTED. The May 2, 2013 Decision and the September 9, 2013
Resolution of the Court of Appeals in CA-G.R. SP No. 124763 are REVERSED and SET ASIDE. The case
is ordered REMANDED to the Court of Appeals for decision on the merits.

G.R. No. 190828, March 16, 2015

ONOFRE V. MONTERO, EDGARDO N. ESTRAERO, RENING P. PADRE, GABRIEL A. MADERA,

HERMINIO T. TACLA, NELSON C. VILORIA, DEMETRIO Q. PAJARILLO, ALFREDO R. AGANON,
REYNALDO AVILA, ALBERT T. RUIZ, NESTOR Y. YAGO, HARTY M. TUPASI, AGUSTIN R. AVILA,
JR. OR MARCOS R. AVILA, BONIFACIO B. GAANO, JOSELITO D. CUENTA, JONAS P. ESTILONG,
DOMINADOR C. CANARIA, GENARO C. RONDARIS, HERARDO M. DULAY, FRANKLIN A. RAVINA,
JR., AND RUBEN C. CABELLO, Petitioners, v. TIMES TRANSPORTATION CO., INC., AND
SANTIAGO RONDARIS, MENCORP TRANSPORT SYSTEMS, INC., VIRGINIA R. MENDOZA AND
REYNALDO MENDOZA, Respondents.

DECISION

REYES, J.:

This appeal by petition for review1 seeks to annul and set aside the Decision 2 dated August 28, 2009
and Resolution3 dated December 11, 2009 of the Court of Appeals (CA) in CA-G.R. SP No. 106260,
which affirmed the Decision4dated March 31, 2008 of the National Labor Relations Commission (NLRC)
in NLRC CA No. 046325-05 (08), and its Resolution 5 dated September 5, 2008, denying the petitioners
Motion for Reconsideration. The NLRC decision vacated and set aside the Decision 6 dated June 29,
2005 of the Labor Arbiter (LA) on the ground that the consolidated complaints for illegal dismissal,
unfair labor practice and money claims have already prescribed.

The Facts

Respondent Times Transportation Co., Inc., (TTCI) is a company engaged in the business of land
transportation for passengers and goods serving the Ilocos Region to Metro Manila route. TTCI
employed the herein 21 petitioners as bus drivers, conductors, mechanics, welders, security guards
and utility personnel, namely: Onofre V. Montero (Montero), Edgardo N. Estraero (Estraero), Rening P.
Padre (Padre), Gabriel A. Madera (Madera), Herminio T. Tacla, Nelson C. Viloria, Demetrio Q. Pajarillo
(Pajarillo), Alfredo R. Aganon (Aganon), Reynaldo Avila (Avila), Albert T. Ruiz, Nestor Y. Yago (Yago),
Harty M. Tupasi (Tupasi), Agustin R. Avila, Jr. (Avila, Jr.), Bonifacio B. Gaano (Gaano), Joselito D. Cuenta
(Cuenta), Jonas P. Estilong (Estilong), Dominador C. Canaria (Canaria), Genaro C. Rondaris (Genaro),
Herardo M. Dulay (Dulay), Franklin A. Ravina, Jr. (Ravina), and Ruben C. Cabello (Cabello) (petitioners).

Sometime in 1995, the rank-and-file employees of TTCI formed a union named as Times Employees
Union (TEU) which was later certified as the sole and exclusive bargaining unit within TTCI.

In March 1997, members of TEU went on strike; but when former Labor Secretary Leonardo A.
Quisimbing assumed jurisdiction over the labor dispute and certified the same for compulsory
arbitration, a return-to-work Order dated March 10, 1997 was issued which ended the strike and
enjoined the parties from committing any other act that may intensify the situation.

On August 23, 1997, TTCI Board of Directors approved a resolution confirming the authority given to
respondent Santiago Rondaris (Santiago), TTCI President and Chairman of the Board of Directors, to
gradually dispose the assets of the TTCI as a result of its unabated increase of the cost of operations
and losses for the last two years. TTCI also adopted a company-wide retrenchment program, which will
take effect on October 1, 1997, where Santiago was given the authority to determine the number of
excess employees who would be the subject of retrenchment.

The sale of 25 buses of TTCI, as well as the Certificates of Public Convenience for the operation of the
buses, were likewise approved and subsequently transferred to respondent Mencorp Transport
Systems, Inc., (MENCORP) by virtue of a Deed of Sale dated December 12, 1997. Thereafter, several
union members received notices that they were being retrenched effective 30 days from September
16, 1997.

For a second time, on October 17, 1997, TEU declared a strike against TTCI, but the latter merely
reiterated the earlier return-to-work order of the Labor Secretary. For disregarding the said return-to-
work order, Santiago issued two notices of termination dated October 26, 1997 12 terminating some 106
workers and a revised list dated November 24, 1997 13 increasing the number of dismissed employees
to 119, for participating in the illegal strike.

On December 4, 1997, Santiago served to the Department of Labor and Employment Regional Office I
a notice that TTCI would be closing its operations due to heavy business losses.

On May 14, 1998, petitioners Estraero, Pajarillo, Padre, Avila, Avila, Jr., Tupasi, Cuenta, Dulay, Yago,
and Aganon filed several complaints against TTCI and MENCORP before the NLRC. The complaints were
thereafter consolidated under the case entitled Malana v. TTCI docketed as NLRC RAB-I-01-
1007.16 However, this case was withdrawn on March 4, 1999 upon motion by the TEUs counsel which
was given due course on March 22, 1999.

Four years later, several complaints for unfair labor practice, illegal dismissal with money claims,
damages and attorneys fees were filed against TTCI, Santiago, MENCORP and its General Manager
Virginia Mendoza, including the latters husband Reynaldo Mendoza (collectively called the
respondents), before the LA from June to July 2002.18 Accordingly, these complaints were consolidated.

In response, TTCI asserted that the petitioners cause of action had already been barred by prescription
because the complaints were filed only in June 2002 or after almost five years from the date of their
dismissal. MENCORP, on the other hand, raised the defense of lack of employer-employee relationship
since it never engaged the services of the petitioners when TTCI sold to them its buses and the
Certificates of Public Convenience.

On June 9, 2005, the LA rendered a Decision dismissing the petitioners claim for unfair labor practice
and money claims on the ground of prescription. However, with regard to the issue of illegal dismissal,
only the complaints of Montero, Ravina, Cabello, Genaro, Madera, Gaano, Arsenio Donato and Estilong
were dismissed for having been barred by prescription.

The LA found that petitioners Estraero, Pajarillo, Aganon, Padre, Dulay, Cuenta, Canaria, Yago, Avila
and Avila, Jr. were illegally dismissed and were awarded their separation pay and backwages.
According to the LA, the complaints of these 10 petitioners were timely filed in June 2002 because the
eight-month period during which their cases were pending should be excluded from the four-year
prescriptive period.

Disagreeing with the LA decision, all parties interposed an appeal before the NLRC. However, said
appeals have both been denied for non-perfection, particularly for failure of the petitioners to verify
their appeal, and for failure of the respondent to post the required cash or surety bond. In a
Decision22 dated March 31, 2008, the NLRC vacated and set aside the findings of the LA, upon finding
that the petitioners complaints had already been barred by prescription. The dispositive part of which
reads:

WHEREFORE, IN VIEW OF THE FOREGOING, the decision appealed from is hereby VACATED and SET
ASIDE, and the complaints dismissed on ground of prescription.

SO ORDERED.23

The NLRC observed that the LA had ignored the rule on prescription, and chose to be selective in
awarding relief to the 10 complainants by stating in his decision that the period during which the labor
cases were pending should be deducted from the period of prescription. According to the NLRC:

We have thoroughly examined the records and find no justification for the [LA] to rule that the
pendency of the cases has worked in favor of the complainants to whom he awarded separation pay
and backwages. The [LA] has not at all indicated in his decision when the eight (8)[-]month period of
pendency he alluded to commenced and when it ended. As a matter of fact, these cases took almost
three (3) years from filing of the complaints to the rendition of the appealed decision. 24

The NLRC added that the application of the principle of prescription should not be done on a selective
basis, especially when the dates of accrual of the causes of action and the filing of the complaints
readily show that prescription has set in.

The petitioners filed a motion for reconsideration 26 dated May 16, 2008, but it was denied.27 Hence,
they filed a petition for certiorari28 before the CA.

On August 28, 2009, the CA Decision dismissed the petition. 29 In sustaining the NLRC decision, the
appellate court ratiocinated:

Here, the illegal dismissal case was filed only in June 2002 or for more than four (4) years and seven
(7) months from the time petitioners received the notices of their dismissal in November and October
1997. Clearly, the four-year prescriptive period has already elapsed.

Moreover, there is likewise no merit in petitioners contention that the period when they filed a
complaint on May 14, 1998 but withdrawn on March 30, 1998 should be excluded from the
computation of the four-year prescriptive [period] for illegal dismissal cases. The prescriptive period
continues even after the withdrawal of the case as though no action has been filed at all. This was
clarified in the case of Intercontinental Broadcasting Corporation vs. Panganiban, where the
Supreme Court held that although the commencement of an action stops the running of the statute of
prescription or limitations, its dismissal or voluntary abandonment by plaintiff leaves the parties in
exactly the same position as though no action had been commenced at all. x x x. 30

Aggrieved by the foregoing disquisition, the petitioners moved for reconsideration 31 but it was denied
by the CA.32 Hence, the present petition for review on certiorari.
The Issue
The main issue in this case is whether or not the petitioners complaints for illegal dismissal have
already prescribed.

Ruling of the Court

The petition is bereft of merit.

It should be emphasized at the outset that as a rule, this Court is not a trier of facts and this applies
with greater force in labor cases. Hence, factual findings of quasi-judicial bodies like the NLRC,
particularly when they coincide with those of the [LA] and if supported by substantial evidence, are
accorded respect and even finality by this Court. But where the findings of the NLRC and the [LA] are
contradictory, as in the present case, this Court may delve into the records and examine for itself the
questioned findings.

Nevertheless, the Court has thoroughly reviewed the records in this case and finds that the NLRC did
not commit any grave abuse of its discretion amounting to lack or in excess of jurisdiction in rendering
its decision in favor of the respondents. The CA acted in accord with the evidence on record and case
law when it dismissed the petition and affirmed the assailed decision and resolution of the NLRC.

In the case at bar, October 26, 1997 and November 24, 1997 appear on record to be the dates when
the petitioners employment were terminated by TTCI. The antecedent facts that gave rise to the
petitioners dismissal from employment are not disputed in this case. There is no question about the
fact that the petitioners complaints for unfair labor practice and money claims have already
prescribed.

The petitioners however argue that their complaints for illegal dismissal were duly filed within the four-
year prescriptive period since the period during which their cases were pending should be deducted
from the period of prescription. On the other hand, the respondents insist that said complaints have
already prescribed. Hence, the pivotal question in resolving the issues hinges on the resolution of
whether the period during which the petitioners cases were pending should be excluded from the
period of prescription.

Settled is the rule that when one is arbitrarily and unjustly deprived of his job or means of livelihood,
the action instituted to contest the legality of ones dismissal from employment constitutes, in
essence, an action predicated upon an injury to the rights of the plaintiff, as contemplated under
Article 114635 of the New Civil Code, which must be brought within four years.

The petitioners contend that the period when they filed a labor case on May 14, 1998 but withdrawn
on March 22, 1999 should be excluded from the computation of the four-year prescriptive period for
illegal dismissal cases. However, the Court had already ruled that the prescriptive period continues
even after the withdrawal of the case as though no action has been filed at all. The applicability of
Article 115537of the Civil Code in labor cases was upheld in the case of Intercontinental Broadcasting
Corporation v. Panganiban38 where the Court held that although the commencement of a civil action
stops the running of the statute of prescription or limitations, its dismissal or voluntary abandonment
by plaintiff leaves the parties in exactly the same position as though no action had been commenced
at all.

In like manner, while the filing of the complaint for illegal dismissal before the LA interrupted the
running of the prescriptive period, its voluntary withdrawal left the petitioners in exactly the same
position as though no complaint had been filed at all. The withdrawal of their complaint effectively
erased the tolling of the reglementary period.
A prudent review of the antecedents of the claim reveals that it has in fact prescribed due to the
petitioners withdrawal of their labor case docketed as NLRC RAB-I-01-1007. 40 Hence, while the filing of
the said case could have interrupted the running of the four-year prescriptive period, the voluntary
withdrawal of the petitioners effectively cancelled the tolling of the prescriptive period within which to
file their illegal dismissal case, leaving them in exactly the same position as though no labor case had
been filed at all. The running of the four-year prescriptive period not having been interrupted by the
filing of NLRC RAB-I-01-1007, the petitioners cause of action had already prescribed in four years after
their cessation of employment on October 26, 1997 and November 24, 1997. Consequently, when the
petitioners filed their complaint for illegal dismissal, separation pay, retirement benefits, and damages
in 2002, their claim, clearly, had already been barred by prescription.
Sadly, the petitioners have no one but themselves to blame for their own predicament. By their own
allegations in their respective complaints, they have barred their remedy and extinguished their right
of action. Although the Constitution is committed to the policy of social justice and the protection of
the working class, it does not necessary follow that every labor dispute will be automatically decided in
favor of labor. The management also has its own rights. Out of concern for the less privileged in life,
this Court, has more often than not inclined, to uphold the cause of the worker in his conflict with the
employer. Such leaning, however, does not blind the Court to the rule that justice is in every case for
the deserving, to be dispensed in the light of the established facts and applicable law and doctrine.

WHEREFORE, the Decision dated August 28, 2009 and Resolution dated December 11, 2009 of the
Court of Appeals in CA-G.R. SP No. 106260 are AFFIRMED.

G.R. No. 204646 April 15, 2015

SMART COMMUNICATIONS, INC., NAPOLEON L. NAZARENO, and RICARDO P.

ISLA,* Petitioners,
vs.
JOSE LENI Z. SOLIDUM, Respondent.

DECISION

CARPIO, J.:

The Case

This is a petition1 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 Court of
Appeals' 3 July 2012 Amended Decision2 and 23 November 2012 Resolution3 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, Islagave Solidum a memorandum 5 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 21 October 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 attorneys fees.

In his 3 July 2006 Decision,11 the Labor Arbiter found that Solidums preventive suspension and
dismissal were illegal and that he was entitled to full back wages, moral and exemplary damages, and
attorneys fees. The dispositive portion of the Decision stated:

WHEREFORE, premises all considered, judgment is hereby rendered 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 and tantamount to constructive dismissal, and ordering respondents to
jointly and severally pay complainant his corresponding salaries, benefits, privileges, allowances and
other incentives/bonuses during the period from October 22 to November 10, 2005, in the amount
ofP236,061.94;

2. Ordering respondents to jointly and severally pay the complainants unpaid salaries, benefits,
privileges, allowances, and other benefits/bonuses during the 30-day preventive suspension, in the
amount ofP365,896.00;

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 his full 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 drivers 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 attorneys fees equivalent to 10% of the
judgment award.

SO ORDERED.12

On 25 July 2006, Smart appealed to the NLRC. On 13 November 2006, the Labor Arbiter issued a writ of
execution ordering the sheriff to collect from petitioners P1,440,667.93, representing Solidums
accrued 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 November2008, and 22 January
2009, the Labor Arbiter issued seven other alias writs of execution ordering the sheriff to collect from
petitioners Solidums accrued salaries, allowances, benefits, incentives and bonuses.

In its 26 January 2009 Resolution,13 the NLRC reversed the Labor Arbiters 3 July 2006 Decision and
dismissed for lack of merit Solidums complaint. Solidum filed a motion 14 for reconsideration dated 9
February 2009.

On 4 May 2009, Solidum filed with the Labor Arbiter an ex-parte Motion 15 praying that an alias writ of
execution be issued directing the sheriff to collect from petitioners P1,440,667.93, representing
Solidums 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 Solidums 9 February 2009 motion for
reconsideration.

The Labor Arbiters Ruling

In his 29 July 2009 Order,17 the Labor Arbiter denied for lack of merit Solidums ex-parte motion
praying that an alias writ of execution be issued directing the sheriff to collect from
petitioners P1,440,667.93, representing Solidums accrued salaries, allowances, benefits, incentives
and bonuses from 21 January to 20April 2009. The Labor Arbiter held that:

In the instant case, the NLRC promulgated its Decision dated January 26, 2009 reversing this Offices
Decision dated July 03, 2006. Also, the NLRC in its Decision dated May 29, 2009 denied the
complainants 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

Solidum appealed to the NLRC.

The NLRCs Ruling

In its 31 May 2010 Decision,19 the NLRC reversed the Labor Arbiters 29 July 2009 Order. The NLRC held
that:
In the case at bar, records show that respondents appealed from the Labor Arbiters 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 his former position. Hence, pursuant to Article 223
of the Labor Code, as amended, relative to the reinstatement aspect of the Labor Arbiters Decision,
respondents are obligated to pay complainants salaries and benefits, computed from July 13, 2006,
when respondents received a copy of the Labor Arbiters Decision which, among others, ordered the
reinstatement of complainant, up to the date of finality of the Commissions resolution reversing the
Labor Arbiters Decision, which, for this purpose, is reckoned on May 29, 2009, when the Commission
denied complainants Motion for Reconsideration.

Indeed, common sense dictates that complainants entitlement to reinstatement salaries/wages and
benefits, emanating from the Labor Arbiters order of reinstatement, presupposes that said order of
reinstatement is still enforceable. Here, the Labor Arbiters order of reinstatement dated July 3, 2006
was no longer enforceable as of May 29, 2009 when the Commissions resolution reversing the Labor
Arbiters order 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 latters
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 complainants motion with respect to his reinstatement salaries and benefits
as he is entitled to the same for the period starting July 13, 2006 to May 29, 2009. 20

Solidum filed a motion21 for partial reconsideration. Petitioners filed a motion 22 for reconsideration. In
its 30July 2010 Resolution, the NLRC granted Solidums 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 Arbiters Decision dated July 3, 2006 is
August 10, 2009, and the computation of complainants 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 Solidums 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 NLRCs 31 May 2010 Decision and 30 July 2010
Resolution. The Court of Appeals held that:

The order of the Labor Arbiter denying Private Respondents 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. The subject 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 not appealable until
after the rendition of the judgment on the merits for a contrary 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 2005 Revised Rules of Procedure of the NLRC. Consequently, the Labor
Arbiters 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 Public Respondent NLRCs 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 Respondents Complaint for Illegal Dismissal
against Petitioners already attained finality on June 1, 2010. Indeed, an Entry 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 complaint for lack of merit. Ruling on Private
Respondents 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 becomes executory, 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
petitionersP1,440,667.93, representing Solidums accrued salaries, allowances, benefits, incentives
and bonuses from 21 April to 20 July 2009. Petitioners filed with the Court of Appeals a motion 29 to
order Solidum to returnP2,881,335.86, 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 Solidums 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 August10, 2009 and not on
June 1, 2010. (Rollo, page 1895) Conformably with the foregoing, the involved portion of 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.

xxxx

On the last issue for consideration refund of monetary award, We find necessary to quote the
following pronouncement of the High Court:

xxxx

The Court reaffirms the prevailing principle that even if the order of reinstatement of the Labor Arbiter
is reversed on appeal, it is obligatory on the part of the employer to reinstate and pay the wages of the
dismissed employee during the period of appeal until reversal by the higher court. (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 was denied on May 29, 2009.
Thereafter, an Entry of Judgment was issued which provides in particular the following: "this is to
certify that on May 29, 2009, a DECISION was rendered x x x and that the same has, pursuant to 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 case
here. 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.

xxxx

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
January21, 2009 to July 20, 2009, thus, the latter 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). (See Juanito 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 NLRCs 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 Courts Ruling

The petition is unmeritorious.

The NLRCs 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 as follows:

"WHERFORE, premises considered, complainants motion 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, 2009and 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 NLRCs 29 May 2009 Decision
becamefinal 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 June 2009 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 the absence of return cards, certifications from the
post office, or other proof of service to parties.36 (Boldfacing supplied)

Since the NLRCs 29 May 2009 Decision became final and executory on 10 August 2009, Solidum is
entitled toP2,881,335.86, representing his accrued salaries, allowances, benefits, incentives and
bonuses for the period 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 NLRCs reversal of the labor arbiters order of reinstatement
becomes final and executory, as shown on the entry of judgment. The Court held that:

Finally, on Arlyns claim that respondents "unilaterally withheld her payroll reinstatement" after the
NLRC reversed on September 27, 2004 the Labor Arbiters 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

xxxx

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/Division shall 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, in the 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

xxxx

SECTION 6. EFFECT OF FILING OF PETITION FOR CERTIORARI 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. If 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. x x 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 CAG.R. SP No. 115794 are AFFIRMED.

G.R. No. 205575, July 22, 2015

VISAYAN ELECTRIC COMPANY EMPLOYEES UNION-ALU-TUCP AND CASMERO

MAHILUM,Petitioners, v. VISAYAN ELECTRIC COMPANY, INC. (VECO), Respondent.

DECISION

PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari1 are the Resolutions dated September 25, 20122 and
December 19, 20123 of the Court of Appeals (CA) in CA-GR. SP No. 06329, which dismissed
thecertiorari petition filed by petitioners Visayan Electric Company Employees Union-ALU-TUCP (the
Union) and Casmero Mahilum (Mahilum; collectively petitioners) against the Decision 4 dated June 30,
2011 of the National Labor Relations Commission (NLRC) in NLRC CC(V)-12-000003-10 (NCMB-RBVII-
NS-10-12-10) for failure of their new counsel to show cause why their certiorari petition should not be
dismissed for having been filed beyond the reglementary period.

The Facts

Respondent Visayan Electric Company, Inc. (VECO) is a corporation engaged in the supply and
distribution of electricity in Cebu City and its neighboring cities, municipalities, and barangays. 5 The
Union is the exclusive bargaining agent of VECO's rank-and-file employees, and Mahilum was the
Union's president from October 2007 until his termination from employment on October 28, 2010.

It was claimed that, before Mahilum was elected as union officer, he was transferred from VECO's
Public Relations Section to its Administrative Services Section without any specific work. When he was
elected as union secretary, he was transferred to the Line Services Department as its Customer
Service Representative.7 At the time of his election as union president, VECO management allegedly:
(a) terminated active union members without going through the grievance machinery procedure
prescribed under the Collective Bargaining Agreement8 (CBA); (b) refused to implement the profit-
sharing scheme provided under the same CBA9; (c) took back the motorbikes issued to active union
members; and (d) revised the electricity privilege10 granted to VECO's employees.

Thus, on May 1, 2009, union members marched on the streets of Cebu City to protest VECO's refusal to
comply with the political and economic provisions of the CBA. Mahilum and other union officers were
interviewed by the media, and they handed out a document 12 containing their grievances against
VECO, the gist of which came out in local newspapers. 13 Following said incident, Mahilum was allegedly
demoted as warehouse staff to isolate him and restrict his movements. Other union officers were
transferred to positions that will keep them away from the general union membership. 14redarclaw

On May 8, 2009, Mahilum was issued a Notice to Explain 15 why he should not be terminated from
service due to loss of trust and confidence, as well as in violating the Company Code of Discipline, for
causing the publication of what VECO deemed as a libelous article. The other union officers likewise
received similar notices16 for them to explain their actions, which they justified17 as merely an
expression of their collective sentiments against the treatment of VECO's management towards them.

On May 20, 2009, the union officers were notified19 of the administrative investigation to be conducted
relative to the charges against them. During the scheduled investigation, the Union's counsel initially
raised its objection to the proceedings and insisted that the investigation should be conducted through
the grievance machinery procedure, as provided in the CBA. 20 However, upon the agreement to
proceed with the investigation of the Union Vice President, Renato Gregorio M. Gimenez (Gimenez),
through his own counsel, Mahilum and the other union officers likewise agreed to proceed with the
aforesaid investigation, with Gimenez's counsel representing the Union.

Prior to the said investigation, the Union filed on May 18, 2009, a Notice of Strike 22 with the National
Conciliation and Mediation Board (NCMB) against VECO, which facilitated a series of conferences that
yielded a Memorandum of Agreement23 (MOA) signed by the parties on August 7, 2009.24 The parties
likewise put to rest the critical issue of electricity privilege and agreed before the NCMB on a
conversion rate of said privilege to basic pay. Moreover, the administrative investigation on the alleged
libelous publication was deferred until after the CBA renegotiation.
However, even before the conclusion of the CBA renegotiation 26 on June 28, 2010, several complaints
for libel were filed against Mahilum and the other union officers by VECO's Executive Vice President
and Chief Operating Officer Jaime Jose Y. Aboitiz.27 The administrative hearing on the charges against
Mahilum resumed with due notice to the latter, but he protested the same, referring to it as "moro-
moro" or "kangaroo" and insisting that the investigation should follow the grievance machinery
procedure under the CBA.28 Nonetheless, VECO's management carried on with its investigation and, on
the basis of the findings thereof, issued a notice 29 terminating Mahilum from employment on October
28, 2010.

On even date, the Union filed another Notice of Strike 31 with the NCMB against VECO on the grounds of
unfair labor practice, specifically union busting for the dismissal and/or suspension of its union
president and officers, refusal to bargain collectively, as well as non-observance of the grievance
procedure in their CBA.32 To avert any work stoppage that will prejudice VECO's power distribution
activity, the Secretary of Labor intervened and issued an Order33 dated November 10, 2010 certifying
the labor dispute to the NLRC for compulsory arbitration. 34 Consequently, the strike was enjoined;
Mahilum was ordered reinstated in the payroll; and the parties were directed to refrain from
committing any act that would exacerbate the situation.

The NLRC Ruling

After submission of the respective position papers36 of both parties, the NLRC Seventh Division
rendered Decision37 on June 30, 2011 dismissing the charge of unfair labor practice against VECO for
lack of merit, and declaring Mahilum's dismissal from employment as legal.

The NLRC found VECO to have acted within the bounds of law when it administratively investigated the
suspended or terminated employees and union officers/members, instead of subjecting their
respective cases to the grievance machinery procedure provided in the CBA. 38 In resolving apparently
conflicting provisions in the CBA, the NLRC applied the specific provision found in Section 13 of Article
XIV that disciplinary actions shall be governed by the rules and regulations promulgated by the
company. Since the administrative investigations conducted by VECO were found to have complied
with procedural due process requirements, there was no unfair labor practice to speak of.

On the matter of Mahilum's dismissal and the filing of criminal cases against the union officers, the
NLRC found no substantial evidence to prove the imputation of union busting. Similarly
unsubstantiated were the allegations of fraud and deceit in hiring and contracting out services for
functions performed by union members, and declaring certain positions confidential and transferring
union members to other positions without prior discussions, thereby allegedly interfering with their
right to self-organization and reducing union membership

The issue on VECO's alleged modification of the electricity privilege, which the Union claimed as
violative of the CBA, was declared mooted by the MOA entered into between the parties, with the
assistance of the NCMB, providing for, inter alia, electricity privilege conversion to basic pay. This was
subsequently incorporated in the Renegotiated CBA dated June 28, 2010.

Finally, the NLRC ruled that Mahilum was terminated for a just and valid cause under Article 282 (c) of
the Labor Code, i.e., fraud or willful breach of trust by the employee of the trust reposed in him by his
employer or duly authorized representative, when he, together with some other union officers, caused
the publication of a document which was deemed to have dishonored and blackened the memory of
former corporate officer Luis Alfonso Y. Aboitiz, besmirched VECO's name and reputation, and exposed
the latter to public hatred, 9ontempt, and ridicule.

Aggrieved, petitioners filed a motion for reconsideration43 from the foregoing NLRC Decision, which was
denied in a Resolution44 dated July 29, 2011. They received said Resolution on August 18, 2011.

On October 18, 2011, petitioners elevated their case to the CA on certiorari petition,46 docketed as CA-
G.R. SP No. 06329, imputing grave abuse of discretion amounting to lack or excess of jurisdiction on
the part of the NLRC.

On February 29, 2012, the CA issued a Resolution47 directing petitioners to show cause why
thecertiorari petition should not be dismissed for having been filed "one day behind the reglementary
period."

On March 13, 2012, Atty. Jonas V. Asis (Atty. Asis) from the Seno Mendoza & Associates Law Offices
filed in behalf of petitioners a Manifestation/Explanation 49 claiming that "there was unintended
error/mistake in the computation of the period,"50 and that there was no prejudice caused to VECO by
the "unintended one-day late filing of the petition."

The CA Ruling

On September 25, 2012, the CA issued the assailed September 25, 2012 Resolution 52 pointing out that
on March 7, 2012, petitioners had filed a Manifestation 53 that they had terminated the services of Atty.
Asis and the Seno Mendoza & Associates as their counsel in this case, and have contracted the
services of Atty. Remigio D. Saladero, Jr. (Atty. Saladero) as their new counsel. Consequently, the CA
deemed as not filed the Manifestation/Explanation filed by Atty. Asis, and dismissed
the certioraripetition for failure of Atty. Saladero to comply with the Resolution dated February 29,
2012.

The motion for reconsideration54 filed by Atty. Saladero imploring the CA to consider the
Manifestation/Explanation filed by Atty. Asis despite the fact that he was no longer petitioners' counsel
of record was denied in a Resolution55 dated December 19, 2012 for lack of merit.

The Issue

Undeterred, petitioners are now before the Court maintaining that the CA erred in dismissing
thecertiorari petition on account of the one-day delay in its filing despite the serious errors committed
by the NLRC in absolving VECO from the charge of unfair labor practice and illegal dismissal of
Mahilum.

The Court's Ruling

The petition is not impressed with merit.

Under Section 4, Rule 65 of the 1997 Rules of Civil Procedure, certiorari should be filed "not later
than sixty (60) days from notice of the judgment, order or resolution" sought to be assailed. The
provisions on reglementary periods are strictly applied, indispensable as they are to the prevention of
needless delays, and are necessary to the orderly and speedy discharge of judicial business. The
timeliness of filing a pleading is a jurisdictional caveat that even this Court cannot trifle with.

The Union admittedly57 received on August 18, 2011 the NLRC's July 29, 2011 Resolution, which denied
their motion for reconsideration of the NLRC's June 30, 2011 Decision. Therefore, the 60-day period
within which to file a petition for certiorari ended on October 17, 2011. But the certioraripetition was
filed one day after, or on October 18, 2011. Thus, petitioners' failure to file said petition within the
required 60-day period rendered the NLRC's Decision and Resolution impervious to any attack through
a Rule 65 petition for certiorari, and no court can exercise jurisdiction to review the same.

Petitioners adamantly insist, however, that the "one-day delay occasioned by an honest mistake in the
computation of dates should have been overlooked by the CA in favor of substantial justice." 59Their
former counsel, Atty. Asis, allegedly thought in good faith that the month of August has thirty (30)
days, and that sixty (60) days from August 18, 2011 is October 18, 2011.

The Court is not convinced.

First. The fact that the delay in the filing of the petition for certiorari was only one day is not a legal
justification for non-compliance with the rule requiring that it be filed not later than sixty (60) days
from notice of the assailed judgment, order or resolution. The Court cannot subscribe to the theory
that the ends of justice would be better subserved by allowing a petition for certiorari filed only one-
day late. When the law fixes sixty (60) days, it cannot be taken to mean also sixty-one (61) days, as
the Court had previously declared in this wise:

[W]hen the law fixes thirty days [or sixty days as in the present case], we cannot take it to mean also
thirty-one days. If that deadline could be stretched to thirty-one days in one case, what would prevent
its being further stretched to thirty-two days in another case, and so on, step by step, until the original
line is forgotten or buried in the growing confusion resulting from the alterations? That is intolerable.
We cannot fix a period with the solemnity of a statute and disregard it like a joke. If law is founded on
reason, whim and fancy should play no part in its application. 61

Second. While it is always in the power of the Court to suspend its own rules, or to except a particular
case from its operation,62 the liberality with which equity jurisdiction is exercised must always be
anchored on the basic consideration that the same must be warranted by the circumstances obtaining
in the case.63 However, there is no showing herein of any exceptional circumstance that may
rationalize a digression from the rule on timeliness of petitions.

Moreover, petitioners failed to satisfactorily show that the refusal of VECO to follow the grievance
machinery procedure under Section 4, Article XVII of the CBA in the suspension and termination from
employment of the other union officers and members constituted unfair labor practice.

True, it is a fundamental doctrine in labor law that the CBA is the law between the parties and they are
obliged to comply with its provisions. If the provisions of the CBA seem clear and unambiguous, the
literal meaning of their stipulations shall control. However, as in this case, when general and specific
provisions of the CBA are inconsistent, the specific provision shall be paramount to and govern
the general provision.

Section 4, Article XVII of the CBA states that "(a)ny difference of opinion, controversy, dispute problem
or complaint arising from CompanyUnion or Company-Worker relations concerning the interpretation or
application of this Agreement or regarding any matter affecting Company Union or Company-Worker
relations shall be considered a grievance."65 On the other hand, under Section 13, Article XIV, "(t)he
Company agrees that henceforth there shall be a fair and uniform application of its rules and
regulations. It is understood that disciplinary actions imposed on employee or laborer shall be
governed by the rules and regulations promulgated by the Company as well as those provided for by
existing laws on the matter."

The Court is in accord with the ratiocination of the NLRC that the sweeping statement "any matter
affecting Company-Union or Company Worker relations shall be considered a grievance" under Section
4, Article XVII is general, as opposed to Section 13, Article XIV of the CBA, which is specific, as it
precisely refers to "what governs employee disciplinary actions." 67 Thus, the NLRC correctly ruled that
VECO acted within the bounds of law when it proceeded with its administrative investigation of the
charges against other union officers and members.
This is consistent with jurisprudential rulings supporting an employer's free reign and "wide latitude of
discretion to regulate all aspects of employment, including the prerogative to instill discipline in
its employees and to impose penalties, including dismissal, upon erring employees. This is
management prerogative, where the free will of management to conduct its own affairs to achieve its
purpose takes form. The only criterion to guide the exercise of its management prerogative is that the
policies, rules[,] and regulations on work-related activities of the employees must always be fair and
reasonable[,] and the corresponding penalties, when prescribed, are commensurate to the offense
involved and to the degree of the infraction."68 The Labor Code does not excuse employees from
complying with valid company policies and reasonable regulations for their governance and guidance.

Delving now into the merits of Mahilum's dismissal, the Court holds that the two requisites for a valid
dismissal from employment have been met, namely: (1) it must be for a just or authorized cause; and
(2) the employee must be afforded due process.

VECO anchored its termination of Mahilum on Article 282 (c) of the Labor Code and Articles 5.1 and
4.471 of VECO's Company Code of Discipline, which read as follows:

Article 282 (c) of tile Labor Code:

Art. 282. Termination By Employer. - An employer may terminate an employment for any of the
following causes:

xxxx

(c) fraud or willful breach of trust by the employee of the trust reposed in him by his employer or duly
authorized representative;

Company Code of Discipline:

Art. 5.1 Every employee shall uphold company trust and confidence as well as the trust relationship
between the company and its customers/suppliers.

Art. 4.4 Every employee shall willfully respect the honor or person of his immediate superior and/or
department head or company officers.

VECO found the following "Press Release",72 which Mahilum, together with other union officers, caused
to be published, as libelous for dishonoring and blackening the memory of then corporate officer Luis
Alfonso Y. Aboitiz, as well as for maliciously impeaching and besmirching the company's name and
reputation:

VECEU-ALU President, Casmero A. Mahilum, said that since 2004 up to present the new VECO
Management under the administration of the Aboitizes unceasingly attack the local Union by
continuously limit (sic) its membership and diminish (sic) and/or abolish (sic) worker's benefits and
privileges stipulated in the CBA. x x x. Through clever use of psychological warfare, intimidation,
deception, divide and rule tactic and taking great advantage of the weakness of the Union especially of
the leadership during that time, the [new] Management under the late Alfonso Y. Aboitiz was able to
secure a Memorandum of Agreement (MOA) signed by the Union and Management representatives and
ratified by the General Membership that gave Management more flexibility in dealing with labor. x x x.

xxxx
The [l]ocal Union wrote a letter to Mr. Aboitiz expressing full support of his campaign for energy
conservation x x x. But Mr. Aboitiz was too hard and too arrogant to deal with. x x x.

x x x. We, therefore, ask the general public to understand our plight and support our actions. We also
urge everyone to oppose any electricity rate increase filed by VECO and NAPOCOR at the Energy
Regulatory Commission (ERC). Any rate increase in the electricity will only worsen the already
burdened public and further increase profits for the Aboitizes. The entire Union membership are one
with you in condemning such increase and brazen connivance of VECO and NAPOCOR to justify
increases in electricity rate.

x x x x73

The Court has consistently held that "x x x loss of trust and confidence must be based on willful breach
of the trust reposed in the employee by his employer. Such breach is willful if it is done intentionally,
knowingly, and purposely, without justifiable excuse, as distinguished from an act done carelessly,
thoughtlessly, heedlessly or inadvertently. Moreover, it must be based on substantial evidence and not
on the employer's whims or caprices or suspicions[,] otherwise, the employee would eternally remain
at the mercy of the employer. x x x. And, in order to constitute a just cause for dismissal, the act
complained of must be work-related and show that the employee concerned is unfit to continue
working for the employer. In addition, loss of confidence x x x is premised on the fact that the
employee concerned holds a position of responsibility, trust, and confidence or that the employee
concerned is entrusted with confidence with respect to delicate matters, such as handling or care and
protection of the property and assets of the employer. The betrayal of this trust is the essence of the
offense for which an employee is penalized."

Mahilum's attempt to rationalize his act as part of his "moral, legal or social duty x x x to make known
his legitimate perception"75 against VECO does not, in any way, detract from the indubitable fact that
he intentionally, knowingly, and purposely caused the aforequoted "disparaging publication." Neither
can he hide behind the claim that the press release was simply "an expression of a valid
grievance."76 As the NLRC aptly pointed out, "(i)nstead of him and the rest of the union officers
bringing their sentiments and/or grievances against the management to the proper forum, they
intentionally, knowingly and purposefully breached their employer's trust, by issuing x x x derogatory
statements and causing their publication, apparently, to incite public condemnation against the
latter."77 It bears noting that, while petitioners harp on the refusal of VECO to follow the grievance
machinery procedure under the CBA, they conveniently forgot that they themselves shunned the very
procedure to which they now hang by a thread.

Moreover, the Court is unmoved by Mahilum's insistence that there was nothing in his position which
called for management's trust and confidence in him. 78 The NLRC, whose findings of facts and
conclusions are generally accorded not only great weight and respect but even with finality, correctly
held that, as Customer Service Representative, Mahilum occupied a position of responsibility especially
in dealing with VECO's clients.79 His duties and responsibilities included: (1) accepting pertinent
documents and processing electrical service applications; (2) verifying authenticity of documents
submitted; (3) interviewing customer-applicant on applications, complaints, and requests; (4)
preparing job assignment of service inspectors; (5) filing all service orders of inspectors; (6) assessing
and accepting bill deposits; (7) preparing and facilitating signing of Metered Service Contract; (8)
issuing service order for meter-related activities; (9) verifying existing account of customer-applicant
and approving account clearances; (10) accepting payment of bills from customer-applicant for
account clearances; and (11) processing payment arrangements of customers. 80 His performance was
measured according to how he: (1) handled customers' transactions; (2) made decisions in processing
customers' applications and payment arrangements; and (3) maintained posture at all times in
handling customers' transactions even wi.th angry customers.

It is clear from the foregoing that Mahilum was not an ordinary rank and-file employee. His job entailed
the observance of proper company procedures relating to processing and determination of electrical
service applications culminating in the signing of service contracts, which constitutes the very lifeblood
of VECO's existence. He was further entrusted with handling the accounts of customers and accepting
payments from them. Not only that, it was his duty to address customer complaints and requests.
Being a frontliner of VECO, with the most consistent and direct interaction with customers, Mahilum's
job involved a high degree of responsibility requiring a substantial amount of trust and confidence on
the part of his employer, i.e., VECO.

However, with the derogatory statements issued by Mahilum that were intended to incite, not just
public condemnation of VECO, but antagonism and obstruction against rate increases in electricity that
it may be allowed, by law, to fix, there can be no dispute that VECO, indeed, had lost its trust and
confidence in Mahilum and his ability to perform his tasks with utmost efficiency and loyalty expected
of an employee entrusted to handle customers and funds. Settled is the rule that an employer cannot
be compelled to retain an employee who is guilty of acts inimical to the interests of the employer. A
company has the right to dismiss its employee if only as a measure of self-protection.

Thus, Mahilum was terminated for a just and valid cause. Moreover, as declared by the NLRC, VECO
complied with the procedural due process requirements of furnishing Mahilum with two written notices
before the termination of employment can be effected. On May 8, 2009, 83 Mahilum was apprised of the
particular acts for which his termination was sought; and, after due investigation, he was given a
Notice of Decision84 on October 28, 2010 informing him of his dismissal from service.

The fact that Mahilum served the company for a considerable period of time will not help his cause. It
is well to emphasize that the longer an employee stays in the service of the company, the greater is
his responsibility for knowledge and compliance with the norms of conduct and the code of discipline in
the company.

As a final word, while it is the state's responsibility to afford protection to labor, this policy should not
be used as an instrument to oppress management and capital. In resolving disputes between labor and
capital, fairness and justice should always prevail. Social justice does not mandate that every dispute
should be automatically decided in favor of labor. Justice is to be granted to the deserving and
dispensed in the light of the established facts and the applicable law and doctrine.

WHEREFORE, the instant petition is hereby DENIED.