G.R. No.

168612 December 10, 2014

First Month ----- 350.00

PHILIPPINE ELECTRIC CORPORATION (PHILEC), Petitioner, Second month ----- 815.00

vs.
COURT OF APPEALS, NATIONAL CONCILIATION AND Third month ----- 815.00
MEDIATION BOARD (NCMB), Department of Labor and
Employment, RAMON T. JIMENEZ, in his capacity as Voluntary Fourth month ----- 815.00
Arbitrator, PHILEC WORKERS' UNION (PWU), ELEODORO V.
LIPIO, and EMERLITO C. IGNACIO, Respondents.
Please be guided accordingly.10
DECISION
Ignacio, Sr., then DT-Assembler with Pay Grade VII,11 was likewise
LEONEN, J.: selected for training for the position of Foreman I.12 On August 21,
1997, PHILEC served Ignacio, Sr. a memorandum,13 instructing him to
undergo training with the following schedule of allowance:
An appeal to reverse or modify a Voluntary Arbitrator's award or
decision must be filed before the Court of Appeals within 10 calendar
This will confirm your selection and that you will undergo training for
days from receipt of the award or decision.
the position of Foreman I (PG B) of the Assembly Section, Distribution
Transformer Manufacturing and Repair effective
This is a petition1 for review on certiorari of the Court of Appeals
decision2 dated May 25, 2004, dismissing the Philippine Electric
August 25, 1997.
Corporations petition for certiorari for lack of merit. Philippine Electric
Corporation (PHILEC) is a domestic corporation "engaged in the
manufacture and repairs of high voltage transformers."3 Among its You will be trained as a Foreman I,and shall receive the following
rank-and-file employees were Eleodoro V. Lipio (Lipio) and Emerlito C. training allowance until you have completed the training/observation
Ignacio, Sr. (Ignacio, Sr.), former members of the PHILEC Workers period which shall not exceed four (4) months.
Union (PWU).4 PWU is a legitimate labor organization and the
exclusive bargaining representative of PHILECs rank-and-file
employees.5 First Month ----- 255.00

From June 1, 1989 to May 31, 1997, PHILEC and its rank-and-file Second month ----- 605.00
employees were governed by collective bargaining agreements
providing for the following step increases in an employees basic salary Third month ----- 1,070.00
in case of promotion:6
Fourth month ----- 1,070.00

Rank-and-File (PWU)
Pay Please be guided accordingly.14
Grade June 1, 1989 to June 1, 1992 to June 1, 1994 to
May 31, 1992 May 31, 1994 May 31, 1997
On September 17, 1997, PHILEC and PWU entered into a new
I II 50 collective bargaining
60 65 agreement, effective retroactively on June 1,
1997 and expiring on May 31, 1999.15 Under Article X, Section 4 of the
II III 60 June 1, 1997 collective
70 78 bargaining agreement, a rank-and-file
employee promoted shall be entitled to the following step increases in
III IV 70 80 95 16
his or her basic salary:

IV V 80 110 120
Section 4. STEP INCREASES. [Philippine Electric Corporation] shall
V- VI 100 adopt the following
140 150step increases on the basic salary in case of
promotion effective June 1, 1997. Such increases shall be based on
VI VII 120 170 195
the scale below or upon the minimum of the new pay grade to which
the employee is promoted, whichever is higher:
VII VIII 170 230 255

VIII IX 220 290 340

Pay Grade Step Increase
IX X 260 350 455 I - II 80.00
II - III 105.00
III - IV 136.00
On August 18, 1997 and with the previous collective bargaining
agreements already expired, PHILEC selected Lipio for promotion from IV - V 175.00
Machinist under Pay Grade VIII7 to Foreman I under Pay Grade V - VI 224.00
B.8 PHILEC served Lipio a memorandum,9 instructing him to undergo VI - VII 285.00
training for the position of Foreman I beginning on August 25, 1997.
PHILEC undertook to pay Lipio training allowance as provided in the VII - VIII 361.00
memorandum: VIII - IX 456.00
IX - X 575.00
This will confirm your selection and that you will undergo training for To be promoted, a rank-and-file employee shall undergo training or
the position of Foreman I (PG B) of the Tank Finishing Section, observation and shall receive training allowance as provided in Article
Distribution Transformer Manufacturing and Repair effective August IX, Section 1(f) of the June 1, 1997 collective bargaining agreement:17
25, 1997.
Section 1. JOB POSTING AND BIDDING:
You will be trained as a Foreman I,and shall receive the following
training allowance until you have completed the training/observation
period which shall not exceed four (4) months. ....
 (f) Allowance for employees under Training or Observation
shall be on a graduated basis as follows:
For the first month of training, the allowance should be
equivalent to one step increase of the next higher grade.
Every month thereafter the corresponding increase shall be
equivalent to the next higher grade until the allowance for
the grade applied for is attained.
As an example, if a Grade I employee qualifies for a Grade
III position, he will receive the training allowance for Grade I
to Grade II for the first month. On the second month, he will
receive the training allowance for Grade I to Grade II plus
the allowance for Grade II to Grade III. He will then continue
to receive this amount until he finishes his training or
observation period.18
Claiming that the schedule of training allowance stated in the
memoranda served on Lipio and Ignacio,Sr. did not conform to Article
X, Section 4 of the June 1, 1997 collective bargaining agreement,
PWU submitted the grievance to the grievance machinery.19
PWU and PHILEC failed to amicably settle their grievance. Thus, on
December 21, 1998, the parties filed a submission agreement20 with
the National Conciliation and Mediation Board, submitting the following
issues to voluntary arbitration:
I agreement with PWU. Since PHILEC and PWU had not yet negotiated
WHETHER OR NOT PHILEC VIOLATED SECTION 4 (Step
Increases) ARTICLE X (Wage and Position Standardization) OF THE
EXISTING COLLECTIVE BARGAINING AGREEMENT (CBA) IN
IMPLEMENTING THE STEP INCREASES RELATIVE TO THE
PROMOTION OF INDIVIDUAL COMPLAINANTS.
II
WHETHER OR NOT PHILECs MANNER OF IMPLEMENTING THE
STEP INCREASES IN CONNECTION WITH THE PROMOTION OF
INDIVIDUAL COMPLAINANTS IN RELATION TO THE PROVISIONS
OF SECTION 4, ARTICLE X OF THE CBA CONSTITUTES UNFAIR
LABOR PRACTICE.21
With respect to Ignacio, Sr., he was holding the position of DTAs
sembler under Pay Grade VII when hewas selected to train for the
position of Foreman I under Pay Grade X. Thus, for his first month of
training, Ignacio, Sr. should be paid training allowance equal to the
step increase under pay grade bracket VII-VIII. For the second month,
he should be paid an allowance equal to the step increase under pay
grade bracket VIIVIII plus the step increase under pay grade bracket
VIII-IX. For the third and fourth months, Ignacio, Sr. should receive an
allowance equal to the amount he received for the second month plus
the amount equal to the step increase under pay grade bracket IX-X,
thus:26
First Month ----- 361.00
Second month ----- 817.00
Third month ----- 1,392.00
Fourth month ----- 1,392.00.
For PHILECs failure to apply the schedule of step increases under
Article X of the June 1, 1997 collective bargaining agreement, PWU
argued that PHILEC committed an unfair labor practice under Article
24827 of the Labor Code.28
In its position paper,29 PHILEC emphasized that it promoted Lipio and
Ignacio, Sr. while it was still negotiating a new collective bargaining
a new collective bargaining agreement when PHILEC selected Lipio
and Ignacio, Sr. for training, PHILEC applied the "Modified SGV" pay
grade scale in computing Lipios and Ignacio, Sr.s training allowance. 30
This "Modified SGV" pay grade scale, which PHILEC and PWU
allegedly agreed to implement beginning on May 9, 1997, covered both
rank-and-file and supervisory employees.31 According to PHILEC, its
past collective bargaining agreements withthe rank-and-file and
supervisory unions resulted in an overlap of union membership in Pay
Grade IX of the rank-and-file employees and Pay Grade A of the
supervisory employees.32 Worse, past collective bargaining
agreements resulted in rank-and-file employees under Pay Grades IX
and X enjoying higher step increases than supervisory employees
under Pay Grades A and B:33

Pay Grade
In their submission agreement, PWU and PHILEC designated Hon. Pay Grade Scale
Scale under the
Ramon T. Jimenez as Voluntary Arbitrator (Voluntary Arbitrator Step Increase under the Step
Rank-and-File
Jimenez).22 Supervisory CBA
CBA

Voluntary Arbitrator Jimenez, in the order23 dated January 4, 1999, VIII-IX 340.00 A
directed the parties to file their respective position papers.
IX-X 455.00 A-B

In its position paper,24 PWU maintained that PHILEC failed to follow

the schedule of step increases under Article X, Section 4 of the June 1, To preserve the hierarchical wage structure within PHILECs
1997 collective bargaining agreement. Machinist I, Lipios position enterprise, PHILEC and PWU allegedly agreed to implement the
before he underwent training for Foreman I, fell under Pay Grade VIII, uniform pay grade scale under the "Modified SGV" pay grade system,
while Foreman I fell under Pay Grade X. Following the schedule under thus:34
Article X, Section 4 of the June 1, 1997 collective bargaining
agreement and the formula under Article IX, Section 1(f), Lipio should
be paid training allowance equal to the step increase for pay grade Pay Grade
bracket VIII-IX for the first month of training. For the succeeding Step Increase
months, Lipio should be paid an allowance equal to the step increase Rank-and-File Supervisory
for pay grade bracket VIII-IX plus the step increase for pay grade
bracket IX-X, thus:25 I II 65.00

II-III 78.00
First Month ----- 456.00
III-IV 95.00
Second month ----- 1,031.00
IV-V 120.00
Third month ----- 1,031.00
V-VI 150.00
Fourth month ----- 1,031.00.
VI-VII 195.00

VII-VIII 255.00
VIII-IX A 350.00
IX-X A-B 465.00
X-XI B-C 570.00
XI-XII C-D 710.00
D-E 870.00
E-F 1,055.00
Pay grade bracket IIX covered rank-and-file employees, while pay
grade bracket AF covered supervisory employees.35
Under the "Modified SGV" pay grade scale, the position of Foreman I
fell under Pay Grade B. PHILEC then computed Lipios and Ignacio,
Sr.s training allowance accordingly.36
PHILEC disputed PWUs claim of unfair labor practice. According to
PHILEC, it did not violate its collective bargaining agreement with PWU
when it implemented the "Modified SGV" scale. Even assuming that it
violated the collective bargaining agreement, PHILEC argued that its
violation was not "gross" or a "flagrant and/or malicious refusal to
comply with the economic provisions of [the collective bargaining
agreement]."37 PHILEC, therefore, was not guilty of unfair labor
practice.38
Voluntary Arbitrator Jimenez held in the decision39 dated August 13,
1999, that PHILEC violated its collective bargaining agreement with
PWU.40 According to Voluntary Arbitrator Jimenez, the June 1, 1997
collective bargaining agreement governed when PHILEC selected
Lipio and Ignacio, Sr. for promotion on August 18 and 21, 1997. 41 The
provisions of the collective bargaining agreement being the law
between the parties, PHILEC should have computed Lipios and
Ignacio, Sr.s training allowance based on Article X, Section 4 of the
June 1, 1997 collective bargaining agreement.42
As to PHILECs claim that applying Article X, Section 4 would result in
salary distortion within PHILECs enterprise, Voluntary Arbitrator
Jimenez ruled that this was "a concern that PHILEC could have
anticipated and could have taken corrective action"43 before signing the
collective bargaining agreement.
Voluntary Arbitrator Jimenez dismissed PWUs claim of unfair labor
practice.44 According to him, PHILECs acts "cannot be considered a
gross violation of the [collective bargaining agreement] nor . . . [a]
flagrant and/or malicious refusal to comply withthe economic
provisions of the [agreement]."45
Thus, Voluntary Arbitrator Jimenez ordered PHILEC to pay Lipio and
Ignacio, Sr. training allowance based on Article X, Section 4 and Article
IX, Section 1 of the June 1, 1997 collective bargaining agreement.46
PHILEC received a copy of Voluntary Arbitrator Jimenezs decision on
August 16, 1999.47 On August 26, 1999, PHILEC filed a motion for
partial reconsideration48 of Voluntary Arbitrator Jimenezs decision.
In the resolution49 dated July 7, 2000, Voluntary Arbitrator Jimenez
denied PHILECs motion for partial reconsideration for lack of merit.
PHILEC received a copy of the July 7, 2000 resolution on August 11,
2000.50
On August 29, 2000, PHILEC filed a petition51 for certiorari before the
Court of Appeals, alleging that Voluntary Arbitrator Jimenez gravely
abused his discretion in rendering his decision. 52 PHILEC maintained
that it did not violate the June 1, 1997 collective bargaining
agreement.53 It applied the "Modified SGV" pay grade rates toavoid
salary distortion within its enterprise.54
In addition, PHILEC argued that Article X, Section 4 of the collective
bargaining agreement did not apply to Lipio and Ignacio, Sr.
Considering that Lipio and Ignacio, Sr. were promoted to a supervisory
position, their training allowance should be computed based on the
provisions of PHILECs collective bargaining agreement with ASSET,
the exclusive bargaining representative of PHILECs supervisory
employees.55
The Court of Appeals affirmed Voluntary Arbitrator Jimenezs
decision.56 It agreed that PHILEC was bound to apply Article X, Section
4 of its June 1, 1997 collective bargaining agreement with PWU in
computing Lipios and Ignacio, Sr.s training allowance.57 In its
decision, the Court of Appeals denied due course and dismissed
PHILECs petition for certiorari for lack of merit.58
PHILEC filed a motion for reconsideration, which the Court of Appeals
denied in the resolution59 dated June 23, 2005.
On August 3, 2005, PHILEC filed its petition for review on certiorari
before this court,60 insisting that it did not violate its collective
bargaining agreement with PWU.61 PHILEC maintains that Lipio and
Ignacio, Sr. were promoted to a position covered by the pay grade
scale for supervisory employees.62 Consequently, the provisions of
PHILECs collective bargaining agreement with its supervisory
employees should apply, not its collective bargaining agreement with
PWU.63 To insist on applying the pay grade scale in Article X, Section
4, PHILEC argues, would result in a salary distortion within PHILEC.64
In the resolution65 dated September 21, 2005,this court ordered PWU
to comment on PHILECs petition for review on certiorari.
In its comment,66 PWU argues that Voluntary Arbitrator Jimenez did
not gravely abuse his discretion in rendering his decision. He correctly
applied the provisions of the PWU collective bargaining agreement, the
law between PHILEC and its rank-and-file employees, in computing
Lipios and Ignacio, Sr.s training allowance.67
On September 27, 2006, PHILEC filed its reply,68 reiterating its
arguments in its petition for review on certiorari.
The issue for our resolution is whether Voluntary Arbitrator Jimenez
gravely abused his discretion in directing PHILEC to pay Lipios and
Ignacio, Sr.s training allowance based on Article X, Section 4 of the
June 1, 1997 rank-and-file collective bargaining agreement.
This petition should be denied.
I
The Voluntary Arbitrators decision
dated August 13, 1999 is already final and
executory
We note that PHILEC filed before the Court of Appeals a petition for
certiorari under Rule 65 of the Rules ofCourt against Voluntary
Arbitrator Jimenezs decision.69
This was not the proper remedy.
Instead, the proper remedy to reverse or modify a Voluntary
Arbitrators or a panel of Voluntary Arbitrators decision or award is to
appeal the award or decision before the Court of Appeals. Rule 43,
Sections 1 and 3 of the Rules of Court provide:
Section 1. Scope.
This Rule shall apply to appeals from judgments or final orders of the
Court of Tax Appeals and from awards, judgments, final orders or
resolutions of orauthorized by any quasi-judicial agency in the exercise
of its quasi-judicial functions. Among these agencies are the Civil
Service Commission, Central Board of Assessment Appeals,
Securities and Exchange Commission, Office of the President, Land
Registration Authority, Social Security Commission, Civil Aeronautics
Board, Bureau of Patents, Trademarks and Technology Transfer,
National Electrification Administration, Energy Regulatory Board,
National Telecommunications Commission, Department of Agrarian
Reform under Republic Act No. 6657, Government Service Insurance
System, Employees Compensation Commission, Agricultural
Inventions Board, Insurance Commission, Philippine Atomic Energy
Commission, Board of Investments, Construction Industry Arbitration
Commission, and voluntary arbitrators authorized by law.
....
Sec. 3. Where to appeal.
An appeal under this Rule may be taken to the Court of Appeals within
the period and in the manner herein provided, whether the appeal
involves questions of fact, of law, or mixed questions of fact and law.
(Emphasis supplied)
A Voluntary Arbitrator or a panel of Voluntary Arbitrators has the
exclusive original jurisdiction over grievances arising from the
interpretation or implementation of collective bargaining agreements.
Should the parties agree, a Voluntary Arbitrator or a panel of Voluntary
Arbitrators shall also resolve the parties other labor disputes, including
unfair labor practices and bargaining deadlocks. Articles 261 and 262
of the Labor Code provide:
ART. 261. JURISDICTION OF VOLUNTARY ARBITRATORS OR
PANEL OF VOLUNTARY ARBITRATORS.
The Voluntary Arbitrator or panel of Voluntary Arbitrators shall have
original and exclusive jurisdiction to hear and decide all unresolved
grievances arising from the interpretation or implementation of the
Collective Bargaining Agreement and those arising from the
interpretation or enforcement of company personnel policies referred to
in the immediately preceding article. Accordingly, violations of a
Collective Bargaining Agreement, except those which are gross in
character, shall no longer be treated as unfair labor practice and shall
be resolved as grievances under the Collective Bargaining Agreement.
For purposes of this article, gross violations of Collective Bargaining
Agreement shall mean flagrant and/or malicious refusal to comply with
the economic provisions of such agreement.
The Commission, its Regional Offices and the Regional Directors of
the Department of Labor and Employment shall not entertain disputes,
grievances, or matters under the exclusive and original jurisdiction of
the Voluntary Arbitrator orpanel of Voluntary Arbitrators and shall
immediately dispose and refer the same to the Grievance Machinery or
Voluntary Arbitration provided in the Collective Bargaining Agreement.
ART. 262. JURISDICTION OVER OTHER LABOR DISPUTES.
The Voluntary Arbitrator or panel of Voluntary Arbitrators, upon
agreement of the parties, shall also hear and decide all other labor
disputes including unfair labor practices and bargaining deadlocks.
In Luzon Development Bank v. Association of Luzon Development
Bank Employees,70 this court ruled that the proper remedy against the
award or decision of the Voluntary Arbitratoris an appeal before the
Court of Appeals. This court first characterized the office ofa Voluntary
Arbitrator or a panel of Voluntary Arbitrators as a quasi-judicial agency,
citing Volkschel Labor Union, et al. v. NLRC71 and Oceanic Bic Division
(FFW) v. Romero:72
In Volkschel Labor Union, et al. v. NLRC, et al.,on the settled premise
that the judgments of courts and awards of quasi-judicial agencies
must become final at some definite time, this Court ruled that the
awards of voluntary arbitrators determine the rights of parties; hence,
their decisions have the same legal effect as judgments of a court. In
Oceanic Bic Division (FFW), et al. v. Romero, et al., this Court ruled
that "a voluntary arbitrator by the nature of her functions acts in a
quasi-judicial capacity." Under these rulings, it follows that the
voluntary arbitrator, whether acting solely or in a panel, enjoys in law
the status of a quasijudicial agency but independent of, and apart from,
the NLRC since his decisions are not appealable to the
latter.73 (Citations omitted)
This court then stated that the office of a Voluntary Arbitrator or a panel
of Voluntary Arbitrators, even assuming that the office is not strictly a
quasi-judicial agency, may be considered an instrumentality, thus:
Assuming arguendo that the voluntaryarbitrator or the panel of
voluntary arbitrators may not strictly be considered as a quasi-judicial
agency, board or commission, still both he and the panel are
comprehended within the concept of a "quasi-judicial instrumentality."
It may even be stated that it was to meet the very situation presented
by the quasi-judicial functions of the voluntary arbitrators here, as well
as the subsequent arbitrator/arbitral tribunal operating under the
Construction Industry Arbitration Commission, that the broader term
"instrumentalities" was purposely included in the above-quoted
provision.
An "instrumentality" is anything used as a means or agency. Thus, the
terms governmental "agency" or "instrumentality" are synonymous in
the sense that either of them is a means by which a government acts,
or by which a certain government act or function is performed. The
word "instrumentality," with respect to a state, contemplates an
authority to which the state delegates governmental power for the
performance of a state function. An individual person, like an
administrator or executor, is a judicial instrumentality in the settling of
an estate, in the same manner that a sub-agent appointed by a
bankruptcy court is an instrumentality of the court, and a trustee in
bankruptcy of a defunct corporation is an instrumentality of the state.
The voluntary arbitrator no less performs a state function pursuant to a
governmental power delegated to him under the provisions therefor in
the Labor Code and he falls, therefore, within the contemplation of the
term "instrumentality" in the aforequoted Sec. 9 of B.P.
129.74 (Citations omitted)
Since the office of a Voluntary Arbitrator or a panel of Voluntary
Arbitrators is considered a quasi-judicial agency, this court concluded
that a decision or award rendered by a Voluntary Arbitrator is
appealable before the Court of Appeals. Under Section 9 of the
Judiciary Reorganization Act of 1980, the Court of Appeals has the
exclusive original jurisdiction over decisions or awards of quasi-judicial
agencies and instrumentalities:
Section 9. Jurisdiction. The Court of Appeals shall exercise:
....
3. Exclusive appellate jurisdiction over all final judgements, resolutions,
orders or awardsof Regional Trial Courts and quasijudicial agencies,
instrumentalities, boards or commission, including the Securities and
Exchange Commission, the Social Security Commission, the
Employees Compensation Commission and the Civil Service
Commission, except those falling within the appellate jurisdiction of the
Supreme Court in accordance with the Constitution, the Labor Code of
the Philippines under Presidential Decree No. 442, as amended, the
provisions of this Act, and of subparagraph (1) of the third paragraph
and subparagraph 4 of the fourth paragraph of Section 17 of the
Judiciary Act of 1948. (Emphasis supplied)
Luzon Development Bankwas decided in 1995 but remains "good
law."75 In the 2002 case of Alcantara, Jr. v. Court of Appeals, 76 this
court rejected petitioner Santiago Alcantara, Jr.s argument that the
Rules of Court, specifically Rule 43, Section 2, superseded the Luzon
Development Bank ruling:
Petitioner argues, however, that Luzon Development Bank is no longer
good law because of Section 2, Rule 43 of the Rules of Court, a new
provision introduced by the 1997 revision. The provision reads:
SEC. 2. Cases not covered. -This Rule shall not apply to judgments or
final orders issued under the Labor Code of the Philippines.
The provisions may be new to the Rules of Court but it is far from
being a new law. Section 2, Rule 42 of the 1997 Rules of Civil
Procedure, as presently worded, is nothing more but a reiteration of
the exception to the exclusive appellate jurisdiction of the Court of
Appeals, as provided for in Section 9, Batas Pambansa Blg. 129, 7 as
amended by Republic Act No. 7902:8
(3) Exclusive appellate jurisdiction over all final judgments, decisions,
resolutions, orders or awards of Regional Trial Courts and quasi-
judicial agencies, instrumentalities, boards or commissions, including
the Securities and Exchange Commission, the Employees
Compensation Commission and the Civil Service Commission, except
those falling within the appellate jurisdiction of the Supreme Court in
accordance with the Constitution, the Labor Code of the Philippines
under Presidential Decree No. 442, as amended, the provisions of this
Act and of subparagraph (1) of the third paragraph and subparagraph
(4) of the fourth paragraph of Section 17 of the Judiciary Act of 1948.
The Court took into account this exception in Luzon Development Bank
but, nevertheless, held that the decisions of voluntary arbitrators
issued pursuant to the Labor Codedo not come within its ambit:
x x x. The fact that [the voluntary arbitrators] functions and powers are
provided for in the Labor Code does not place him within the
exceptions to said Sec. 9 since he is a quasi-judicial instrumentality as
contemplated therein. It will be noted that, although the Employees
Compensation Commission is also provided for in the Labor Code,
Circular No. 1-91, which is the forerunner of the present Revised
Administrative Circular No. 1-95, laid down the procedure for the
appealability of its decisions to the Court of Appeals under the
foregoing rationalization, and this was later adopted by Republic Act
No. 7902 in amending Sec. 9 of B.P. 129.
A fortiori, the decision or award of the voluntary arbitrator or panel of
arbitrators should likewise be appealable to the Court of Appeals, in
line with the procedure outlined in Revised Administrative Circular No.
1-95, just like those of the quasi-judicial agencies, boards and
commissions enumerated therein.77 (Emphases in the original)
This court has since reiterated the Luzon Development Bankruling in
its decisions.78
Article 262-A of the Labor Code provides that the award or decision of
the Voluntary Arbitrator "shall befinal and executory after ten (10)
calendar days from receipt of the copy of the award or decision by the
parties":
Art. 262-A. PROCEDURES. The Voluntary Arbitrator or panel of
Voluntary Arbitrators shall have the power to hold hearings, receive
evidences and take whatever action isnecessary to resolve the issue
or issues subject of the dispute, including efforts to effect a voluntary
settlement between parties.
All parties to the dispute shall beentitled to attend the arbitration
proceedings. The attendance of any third party or the exclusion of any
witness from the proceedings shall be determined by the Voluntary
Arbitrator or panel of Voluntary Arbitrators. Hearing may be adjourned
for cause or upon agreement by the parties.
Unless the parties agree otherwise, it shall be mandatory for the
Voluntary Arbitrator or panel of Voluntary Arbitrators to render an
award or decision within twenty (20) calendar days from the date of
submission of the dispute to voluntary arbitration.
The award or decision of the Voluntary Arbitrator or panel of Voluntary
Arbitrators shall contain the facts and the law on which it is based. It
shall be final and executory after ten (10) calendar days from receipt of
the copy of the award or decision by the parties.
Upon motion of any interested party, the Voluntary Arbitrator or panel
of Voluntary Arbitrators or the Labor Arbiter in the region where the
movant resides, in case of the absence or incapacity of the Voluntary
Arbitrator or panel of Voluntary Arbitrators, for any reason, may issue a
writ of execution requiring either the sheriff of the Commission or
regular courts or any public official whomthe parties may designate in
the submission agreement to execute the final decision, order or
award. (Emphasis supplied)
Thus, in Coca-Cola Bottlers Philippines, Inc. Sales Force
UnionPTGWO-BALAIS v. Coca Cola-Bottlers Philippines, Inc.,79 this
court declared that the decision of the Voluntary Arbitrator had become
final and executory because it was appealed beyond the 10-day
reglementary period under Article 262-A of the Labor Code.
It is true that Rule 43, Section 4 of the Rules of Court provides for a 15-
day reglementary period for filing an appeal:
Section 4. Period of appeal. The appeal shall be taken within fifteen
(15) days from notice of the award, judgment, final order or resolution,
or from the date of its last publication, if publication is required by law
for its effectivity, or of the denial of petitioner's motion for new trial or
reconsideration duly filed in accordance with the governing law of the
court or agency a quo. Only one (1) motion for reconsideration shall be
allowed. Upon proper motion and the payment of the full amount of the
docket fee before the expiration of the reglementary period, the Court
of Appeals may grant an additional period of fifteen (15) days only
within which to file the petition for review. No further extension shall be
granted except for the most compelling reason and in no case to
exceed fifteen (15) days. (Emphasis supplied)
The 15-day reglementary period has been upheld by this court in a
long line of cases.80 In AMA Computer College-Santiago City, Inc. v.
Nacino,81 Nippon Paint Employees Union-OLALIA v. Court of
Appeals,82 Manila Midtown Hotel v. Borromeo,83 and Sevilla Trading
Company v. Semana,84 this court denied petitioners petitions for
review on certiorari since petitioners failed to appeal the Voluntary
Arbitrators decision within the 15-day reglementary period under
Rule43. In these cases, the Court of Appeals had no jurisdiction to
entertain the appeal assailing the Voluntary Arbitrators decision.
Despite Rule 43 providing for a 15-day period to appeal, we rule that
the Voluntary Arbitrators decision mustbe appealed before the Court
of Appeals within 10 calendar days from receipt of the decision as
provided in the Labor Code.
Appeal is a "statutory privilege,"85 which may be exercised "only in the
manner and in accordance withthe provisions of the law."86 "Perfection
of an appeal within the reglementary period is not only mandatory but
also jurisdictional so that failure to doso rendered the decision final and
executory, and deprives the appellate court of jurisdiction to alter the
final judgment much less to entertain the appeal."87
We ruled that Article 262-A of the Labor Code allows the appeal of
decisions rendered by Voluntary Arbitrators.88Statute provides that the
Voluntary Arbitrators decision "shall befinal and executory after ten
(10) calendar days from receipt of the copy of the award or decision by
the parties." Being provided in the statute,this 10-day period must be
complied with; otherwise, no appellate court willhave jurisdiction over
the appeal. This absurd situation occurs whenthe decision is appealed
on the 11th to 15th day from receipt as allowed under the Rules, but
which decision, under the law, has already become final and
executory.
Furthermore, under Article VIII, Section 5(5) of the Constitution, this
court "shall not diminish, increase, or modify substantive rights" in
promulgating rules of procedure in courts.89 The 10-day period to
appeal under the Labor Code being a substantive right, this period
cannot be
diminished, increased, or modified through the Rules of Court. 90
In Shioji v. Harvey,91 this court held that the "rules of court,
promulgated by authority of law, have the force and effect of law, if not
in conflict with positive law."92 Rules of Court are "subordinate to the
statute."93 In case of conflict between the law and the Rules of Court,
"the statute will prevail."94
The rule, therefore, is that a Voluntary Arbitrators award or decision
shall be appealed before the Court of Appeals within 10 days from
receipt of the award or decision. Should the aggrieved party choose to
file a motion for reconsideration with the Voluntary Arbitrator, 95 the
motion must be filed within the same 10-day period since a motion for
reconsideration is filed "within the period for taking an appeal." 96
A petition for certiorari is a special civil action "adopted to correct errors
of jurisdiction committed by the lower court or quasi-judicial agency, or
when there is grave abuse of discretion on the part of such court or
agency amounting to lack or excess of jurisdiction."97 An extraordinary
remedy,98 a petition for certiorari may be filed only if appeal is not
available.99 If appeal is available, an appeal must be taken even if the
ground relied upon is grave abuse of discretion.100
As an exception to the rule, this court has allowed petitions for
certiorari to be filed in lieu of an appeal "(a) when the public welfare
and the advancement of public policy dictate; (b) when the broader
interests of justice so require; (c) when the writs issued are null; and
(d) when the questioned order amounts to an oppressive exercise of
judicial authority."101
In Unicraft Industries International Corporation, et al. v. The Hon. Court
of Appeals,102 petitioners filed a petition for certiorari against the
Voluntary Arbitrators decision. Finding that the Voluntary Arbitrator
rendered an award without giving petitioners an opportunity to present
evidence, this court allowed petitioners petition for certiorari despite
being the wrong remedy. The Voluntary Arbitrators award, thiscourt
said, was null and void for violation of petitioners right to due process.
This court decided the case on the merits.
In Leyte IV Electric Cooperative, Inc. v. LEYECO IV Employees Union-
ALU,103 petitioner likewise filed a petition for certiorari against the
Voluntary Arbitrators decision, alleging that the decision lacked basis
in fact and in law. Ruling that the petition for certiorari was filed within
the reglementary period for filing an appeal, this court allowed
petitioners petition for certiorari in "the broader interests of justice." 104
In Mora v. Avesco Marketing Corporation,105 this court held that
petitioner Noel E. Mora erred in filing a petition for certiorari against the
Voluntary Arbitrators decision. Nevertheless, this court decided the
case on the merits "in the interest of substantial justice to arrive at the
proper conclusion that is conformable to the evidentiary facts."106
None of the circumstances similar to Unicraft, Leyte IV Electric
Cooperative, and Moraare present in this case. PHILEC received
Voluntary Arbitrator Jimenezs resolution denying its motion for partial
reconsideration on August 11, 2000.107 PHILEC filed its petition for
certiorari before the Court ofAppeals on August 29, 2000,108 which was
18 days after its receipt of Voluntary Arbitrator Jimenezs resolution.
The petition for certiorari was filed beyond the 10-day reglementary
period for filing an appeal. We cannot consider PHILECs petition for
certiorari as an appeal.
There being no appeal seasonably filed in this case, Voluntary
Arbitrator Jimenezs decision became final and executory after 10
calendar days from PHILECs receipt of the resolution denying its
motion for partial reconsideration.109 Voluntary Arbitrator Jimenezs
decision is already "beyond the purview of this Court to act upon."110
II
PHILEC must pay training allowance
based on the step increases provided in
the June 1, 1997 collective bargaining
agreement
The insurmountable procedural issue notwithstanding, the case will
also fail on its merits. Voluntary Arbitrator Jimenez correctly awarded
both Lipio and Ignacio, Sr. training allowances based on the amounts
and formula provided in the June 1, 1997 collective bargaining
agreement.
A collective bargaining agreement is "a contract executed upon the
request of either the employer or the exclusive bargaining
representative of the employees incorporating the agreement reached
after negotiations with respect to wages, hours of work and all other
terms and conditions of employment, including proposals for adjusting
any grievances or questions arising under such agreement." 111 A
collective bargaining agreement being a contract, its provisions
"constitute the law between the parties"112 and must be complied with
in good faith.113
PHILEC, as employer, and PWU, as the exclusive bargaining
representative of PHILECs rank-and-file employees, entered into a
collective bargaining agreement, which the parties agreed to make
effective from June 1, 1997 to May 31, 1999. Being the law between
the parties, the June 1, 1997 collective bargaining agreement must
govern PHILEC and its rank-and-file employees within the agreed
period.
Lipio and Ignacio, Sr. were rank-and-file employees when PHILEC
selected them for training for the position of Foreman I beginning
August 25, 1997. Lipio and Ignacio, Sr. were selected for training
during the effectivity of the June 1, 1997 rank-and-file collective
bargaining agreement. Therefore, Lipios and Ignacio, Sr.s training
allowance must be computed based on Article X, Section 4 and
ArticleIX, Section 1(f) of the June 1, 1997 collective bargaining
agreement.
Contrary to PHILECs claim, Lipio and Ignacio, Sr. were not transferred
out of the bargaining unit when they were selected for training. Lipio
and Ignacio, Sr. remained rank-and-file employees while they trained
for the position of Foreman I. Under Article IX, Section 1(e) of the June
1, 1997 collective bargaining agreement,114 a trainee who is "unable to
demonstrate his ability to perform the work . . . shall be reverted to his
previous assignment. . . ."115According to the same provision, the
trainee "shall hold that job on a trial or observation basis and . . .
subject to prior approval of the authorized management official, be
appointed to the position in a regular capacity."116
Thus, training is a condition precedent for promotion. Selection for
training does not mean automatic transfer out of the bargaining unit of
rankand-file employees.
Moreover, the June 1, 1997 collective bargaining agreement states
that the training allowance of a rank-and-file employee "whose
application for a posted job is accepted shall [be computed] in
accordance with Section (f) of [Article IX]."117 Since Lipio and Ignacio,
Sr. were rank-and-file employees when they applied for training for the
position of Foreman I, Lipios and Ignacio, Sr.s training allowance
must be computed based on Article IX, Section 1(f) of the June 1, 1997
rank-and-file collective bargaining agreement.
PHILEC allegedly applied the "Modified SGV" pay grade scale to
prevent any salary distortion within PHILECs enterprise. This,
however, does not justify PHILECs non-compliance with the June 1,
1997 collective bargaining agreement. This pay grade scale is not
provided in the collective bargaining agreement. In Samahang
Manggagawa sa Top Form Manufacturing United Workers of the
Philippines (SMTFM-UWP) v. NLRC,118 this court ruled that "only
provisions embodied in the [collective bargaining agreement] should be
so interpreted and complied with. Where a proposal raised by a
contracting party does not find print in the [collective bargaining
agreement], it is not part thereof and the proponent has no claim
whatsoever to its implementation."119
Had PHILEC wanted the "Modified SGV" pay grade scale applied
within its enterprise, "it could have requested or demanded that [the
Modified SGV scale] be incorporated in the [collective bargaining
agreement]."120 PHILEC had "the means under the law to compel
[PWU] to incorporate this specific economic proposal in the [collective
bargaining agreement]."121 It "could have invoked Article 252 of the
Labor Code"122 to incorporate the "Modified SGV" pay grade scale in
its collective bargaining agreement with PWU. But it did not. Since this
"Modified SGV" pay grade scale does not appear in PHILECs
collective bargaining agreement with PWU, PHILEC cannot insist on
the "Modified SGV" pay grade scales application. We reiterate
Voluntary Arbitrator Jimenezs decision dated August 13, 1999 where
he said that:
. . . since the signing of the current CBA took place on September 27,
1997, PHILEC, by oversight, may have overlooked the possibility of a
wage distortion occurring among ASSET-occupied positions. It is
surmised that this matter could have been negotiated and settled with
PWU before the actual signing of the CBA on September 27. Instead,
PHILEC, again, allowed the provisions of Art. X, Sec. 4 of the CBA to
remain the way it is and is now suffering the consequences of its
laches.123 (Emphasis in the original)
We note that PHILEC did not dispute PWUs contention that it selected
several rank-and-file employees for training and paid them training
allowance based on the schedule provided in the collective bargaining
agreement effective at the time of the trainees selection.124 PHILEC
cannot choose when and to whom to apply the provisions of its
collective bargaining agreement. The provisions of a collective
bargaining agreement must be applied uniformly and complied with in
good faith.
Given the foregoing, Lipios and Ignacio, Sr.s training allowance
should be computed based on Article X, Section 4 in relation to Article
IX, Section 1(f) of the June 1, 1997 rank-and-file collective bargaining
agreement. Lipio, who held the position of Machinist before selection
for training as Foreman I, should receive training allowance based on
the following schedule:
First Month ----- 456.00
Second month ----- 1,031.00
Third month ----- 1,031.00
Fourth month ----- 1,031.00
Ignacio, Sr., who held the position of DT-Assembler before selection
for training as Foreman I, should receive training allowance based on
the following schedule:
First Month ----- 361.00
Second month ----- 817.00
Third month ----- 1,392.00
Fourth month ----- 1,392.00
Considering that Voluntary Arbitrator Jimenezs decision awarded
sums of money, Lipio and Ignacio, Sr. are entitled to legal interest on
their training allowances. Voluntary Arbitrator Jimenezs decision
having become final and executory on August 22, 2000, PHILEC is
liable for legal interest equal to 12% per annum from finality of the
decision until full payment as this court ruled in Eastern Shipping
Lines, Inc. v. Court of Appeals:125
When the judgment of the court awarding a sum of money becomes
final and executory, the rate of legal interest. . . shall be 12% per
annum from such finality until its satisfaction, this interim period being
deemed to be by then as equivalent to a forbearance of credit. 126
The 6% legal interest under CircularNo. 799, Series of 2013, of the
Bangko Sentral ng Pilipinas Monetary Board shall not apply, Voluntary
Arbitrator Jimenezs decision having become final and executory prior
to the effectivity of the circular on July 1, 2013.1avvphi1 In Nacar v.
Gallery Frames,127 we held that:
. . . with regard to those judgments that have become final and
executory prior to July 1, 2013, said judgments shall not be disturbed
and shall continue to be implemented applying the rate of interest fixed
therein.128
WHEREFORE, the petition for review on certiorari is DENIED. The
Court of Appeals' decision dated May 25, 2004 is AFFIRMED.
Petitioner Philippine Electric Corporation is ORDERED to PAY
respondent Eleodoro V. Lipio a total of 3,549.00 for a four (4)-month
training for the position of Foreman I with legal interest of 12% per
annum from August 22, 2000 until the amount's full satisfaction.
For respondent Emerlito C. Ignacio, Sr., Philippine Electric Corporation
is ORDERED to PAY a total of 3,962.00 for a four (4)-month training
for the position of Foreman I with legal interest of 12% per annum from
August 22, 2000 until the amount's full satisfaction.
SO ORDERED
G.R. No. 191714 February 26, 2014
T & H SHOPFITTERS CORPORATION/GIN QUEEN
CORPORATION, STINNES HUANG, BEN HUANG and ROGELIO
MADRIAGA, Petitioners,
vs.
T & H SHOPFITTERS CORPORATION/GIN QUEEN WORKERS
UNION, ELPIDIO ZALDIVAR, DARI OS GONZALES, WILLIAM
DOMINGO, BOBBY CASTILLO, JIMMY M. PASCUA, GERMANO M.
BAJO, RICO L. MANZANO, ALLAN L. CALLORINA, ROMEO
BLANCO, GILBERT M. GARCIA, CARLOS F. GERILLO, EDUARDO
A. GRANDE, EDILBRANDO MARTICIO, VIVENCIO SUSANO,
ROLANDO GARCIA, JR., MICHAEL FABABIER, ROWELL
MADRIAGA, PRESNIL TOLENTINO, MARVIN VENTURA,
FRANCISCO RIVARES, PLACIDO TOLENTINO and ROLANDO
ROMERO, Respondents.
DECISION
MENDOZA, J.:
Assailed in this petition for review on certiorari under Rule 45 of the
Rules of Court are: 1) the November 12, 2009 Decision1 of the Court of
Appeals (CA), in CA-G.R. SP No. 107188, which affirmed the July 24,
2007 and November 13, 2008 Decision2 of the National Labor
Relations Commission (NLRC); and 2) its March 24, 2010
Resolution3 denying reconsideration of its decision.
The Facts
On September 7, 2004, the T&H Shopfitters Corporation/ Gin Queen
Corporation workers union (THS-GQ Union) and Elpidio
Zaldivar,4 Darios Gonzales, William Domingo, Bobby Castillo, Jimmy
M. Pascua, Germano M. Bajo,5Rico L. Manzano, Allan L.
Callorina,6 Romeo Blanco, Gilbert M. Garcia, Carlos F. Gerillo,
Eduardo A. Grande, Edilbrando Marticio, Vivencio Susano, Rolando
Garcia, Jr., Michael Fababier, Rowell Madriaga, Presnil Tolentino,
Marvin Ventura, Francisco Rivares, Placido Tolentino, and Rolando
Romero (respondents), all of whom are officers and/or members of
THS-GQ union, filed their Complaint7 for Unfair Labor Practice (ULP)
by way of union busting, and Illegal Lockout, with moral and exemplary
damages and attorneys fees, against T&H Shopfitters Corporation
(T&H Shopfitters) and Gin Queen Corporation (Gin Queen)
(collectively referred to as "petitioners"), before the Labor Arbiter (LA).
Respondents treated T&H Shopfitters and Gin Queen as a single entity
and their sole employer. In their desire to improve their working
conditions, respondents and other employees of petitioners held their
first formal meeting on November 23, 2003 to discuss the formation of
a union. The following day or on November 24, 2003, seventeen (17)
employees were barred from entering petitioners factory premises
located in Castillejos, Zambales, and ordered to transfer to T&H
Shopfitters warehouse at Subic Bay Freeport Zone (SBFZ) purportedly
because of its expansion. Afterwards, the said seventeen (17)
employees were repeatedly ordered to go on forced leave due to the
unavailability of work.
On December 18, 2003, the Department of Labor and Employment
(DOLE), Regional Office No. III issued a certificate of registration in
favor of THS-GQ Union.
Respondents contended that the affected employees were not given
regular work assignments, while subcontractors were continuously
hired to perform their functions. This development prompted
respondents to seek the assistance of the National Conciliation and
Mediation Board. Subsequently, an agreement between petitioners
and THS-GQ Union was reached. Petitioners agreed to give priority to
regular employees in the distribution of work assignments.
Respondents averred, however, that petitioners never complied with its
commitment but instead hired contractual workers.
On March 24, 2004, THS-GQ Union filed a petition for certification
election. On July 12, 2004, an order was issued to hold the certification
election in both T&H Shopfitters and Gin Queen. Eventually, the
certification election was scheduled on October 11, 2004.
Meanwhile, through a memorandum, dated August 17, 2004, petitioner
Ben Huang (Huang), Director for Gin Queen, informed its employees of
the expiration of the lease contract between Gin Queen and its lessor
in Castillejos, Zambales and announced the relocation of its office and
workers to Cabangan, Zambales. Some of the respondents, who
visited the site in Cabangan, discovered that it was a "talahiban" or
grassland. Later, the said union officers and members were made to
work as grass cutters in Cabangan, under the supervision of a certain
Barangay Captain Greg Pangan. Due to these circumstances, the
employees assigned in Cabangan did not report for work. As a
consequence, the THS-GQ Union president was made to explain why
he should not be terminated for insubordination. The other employees
who likewise failed to report in Cabangan were meted out with
suspension.
On October 10, 2004, petitioners sponsored a field trip to Iba,
Zambales, for its employees. The officers and members of the THS-
GQ Union were purportedly excluded from the field trip. On the
evening of the field trip, a certain Angel Madriaga, a sales officer of
petitioners, campaigned against the union in the forthcoming
certification election.
The following day or on October 11, 2004, the employees were
escorted from the field trip to the polling center in Zambales to cast
their votes. On October 13, 2004, the remaining employees situated at
the SBFZ plant cast their votes as well. Due to the heavy pressure
exerted by petitioners, the votes for "no union" prevailed. On October
14, 2004, the THS-GQ Union filed its protest with respect to the
certification election proceedings.
Respondents averred that the following week after the certification
elections were held, petitioners retrenched THG-GQ Union officers and
members assigned at the Zambales plant. Respondents claimed that
the work weeks of those employees in the SBFZ plant were drastically
reduced to only three (3) days in a month.
In its defense, Gin Queen, claiming that it is a corporation separate
and distinct from T&H Shopfitters, stressed that respondents were all
employees. Gin Queen claimed that due to the decrease in orders from
its customers, they had to resort to cost cutting measures to avoid
anticipated financial losses. Thus, it assigned work on a rotational
basis. It was of the impression that the employees, who opposed its
economic measures, were merely motivated by spite in filing the
complaint for ULP against it.
In addition, Gin Queen explained that its transfer from Castillejos,
Zambales to Cabangan, Zambales was a result of the expiration of its
lease agreement with Myra D. Lumibao (Myra), its lessor. Since the
Cabangan site was bare and still required construction, Gin Queen
offered work, to employees who opted to stay, on rotation as well.
In its Decision,8 dated December 21, 2005, the LA dismissed
respondents complaint and all their money claims for lack of merit.
In dismissing the complaint, the LA explained:
x x x x.
In the case at bar, we carefully examined the grounds raised by the
complainants [herein respondents] as basis for claiming that the
respondents [herein petitioners] committed unfair labor practices by
way of illegal lockout, one of which is the alleged transfer of 17 workers
to Subic Bay Freeport Zone, however, we are dismay (sic) to know that
not even one of these 17 workers is a complainant in these cases.
While the labor union may represent its members in filing cases before
this Office, at least these members must show their intention to file a
case by signing in the complaint to prove that they have grievances
against their employer which was lacking in these cases. Further, there
was no showing that the transfer of these 17 workers is considered an
unfair labor practice of the respondents considering that their transfer
was effected long before the union was organized.
We also analyzed the allegations of the complainants that the transfer
of the working cite (sic) of the respondent Gin Queen Corporation was
a part of the unfair labor practices committed by the respondents,
however, the complainants failed miserably to controvert the
documentary evidence adduced by the respondent Gin Queen
Corporation that the lease contract agreement of the place had already
expired and it was the management prerogative to transfer as a cost
cutting measures. Again the transfer of the place of work would not be
considered as unfair labor practice.
Complainants alleged that the respondents committed unfair labor
practices by means of lockout wherein the respondents should have
temporarily refused to provide work to the complainants by a result of
labor or industrial dispute. Complainants failed to show that the rotation
of work for them is considered an unfair labor practice and considered
a Lockout.
Complainants rather submitted several notices showing that the
company has no sufficient orders coming from clients and does not
have enough raw materials for production as basis for these
complainants not to render work and be rotated, and thus controvert
their allegations that there was lockout committed by the respondents.
Further, the documentary evidences adduced by the complainants
clearly show that respondents never terminated the complainants
when they were given their notices of suspension negating the claim
that there was lockout committed by respondents.
x x x x.9
Aggrieved, respondents appealed to the NLRC. In its July 24, 2007
Decision, the NLRC reversed the LA decision and ruled in favor of
respondents. The dispositive portion of the said decision reads:
WHEREFORE, the decision appealed from is hereby REVERSED.
Respondents T & H Shopfitters Corp., Gin Queen Corp. (or MDL, as it
is now called), Stennis Huang, as well as the presidents of the
respondent corporations as of November 2003 and the date of the
execution of this decision are hereby ordered to pay each of the
complainants moral and exemplary damages amounting to 50,000.00
and 35,000.00 respectively. In addition, they shall pay the
complainants attorneys fees equivalent to ten percent (10%) of the
total judgment award.
SO ORDERED.
In granting the appeal, the NLRC reasoned:
Based on the above-mentioned affidavits,10 it may be concluded that
the respondents [herein petitioners] committed unfair labor practice
acts consisting in interfering with the exercise of the employees right
to self-organization (specifically, sponsoring a field trip on the day
preceding the certification election, warning the employees of dire
consequences should the union prevail, and escorting them to the
polling center) and discriminating in regard to conditions of
employment in order to discourage union membership (assigning union
officers and active union members as grass cutters on rotation basis).
xxxx
Furthermore, it is noteworthy that, based on their Articles of
Incorporation, T & H Corporation and Gin Queen Corporation are
engaged in the same line of business. It should also be noted that
respondents did not controvert the allegations to the effect that Myra D.
Lumibao, the supposed lessor of respondent corporations, is the wife
of respondent Stennis Huang, and that Gin Queen Corporation has
been renamed MDL, but still carries on the same business in the
same premises using the same machines and facilities. These
circumstances, together with the supposed assignment of respondent
Stennis Huangs interest in Gin Queen Corporation to a third party are
badges of fraud that justify the piercing of the veil of corporate fiction. x
xx
Thus, based on the foregoing, respondents T & H Shopfitters
Corporation, Gin Queen Corporation (now known as MDL) and
Stennis Huang, as well as the presidents of the respondent
corporations as of November 2003 and the date of execution of this
decision may be held liable for unfair labor practice and the
corresponding award of moral and exemplary damages.11
Petitioners filed a motion for reconsideration but the NLRC denied the
same in its November 13, 2008 Decision.
Dissatisfied with the adverse ruling, petitioners instituted a petition for
certiorari under Rule 65 of the Rules of Court before the CA arguing
grave abuse of discretion on the part of the NLRC in reversing the LA
decision.
In its Decision, dated November 12, 2009, the CA sustained the NLRC
ruling. The fallo of which reads:
WHEREFORE, premises considered, the petition for certiorari is
DENIED. The NLRC Decisions dated July 24, 2007 and November 13,
2008 in NLRC NCR CA NO. 048258 (NLRC RAB III-09-7882-04,
NLRC RAB III-09-7980-04) are AFFIRMED.
SO ORDERED.
The CA held that errors of judgment are not within the province of a
special civil action for certiorari. It declared that factual findings of
quasi-judicial agencies that had acquired expertise in matters
entrusted to their jurisdiction were accorded not only respect but finality
if they were supported by substantial evidence. The CA noted that the
NLRC considered the evidence and applied the law in this case, thus,
no grave abuse of discretion could be imputed on the part of the NLRC
in reversing the LA ruling.
Petitioners moved for reconsideration but the same was denied by the
CA in its March 24, 2010 Resolution.
Not in conformity with the ruling of the CA, petitioners seek relief with
this Court raising the following ISSUES
I. WHETHER OR NOT PETITIONERS T & H
SHOPFITTERS CORPORATION AND GIN QUEEN
CORPORATION ARE ONE AND THE SAME
CORPORATION.
II. WHETHER OR NOT PETITIONER GIN QUEEN
CORPORATION IS LIABLE TO THE RESPONDENTS FOR
UNFAIR LABOR PRACTICE.
III. WHETHER OR NOT THE AWARD OF MORAL AND
EXEMPLARY DAMAGES IN FAVOR OF THE
RESPONDENTS IS PROPER.
IV. WHETHER OR NOT THE AWARD OF TEN PERCENT
(10%) ATTORNEYS FEES IN FAVOR OF THE
RESPONDENT IS PROPER.12
Simply put, the issue for the Courts resolution is whether ULP acts
were committed by petitioners against respondents in the case at
bench.
In support of their position, petitioners stress that T&H Shopfitters and
Gin Queen are corporations separate and distinct from each other.
Consequently, T&H Shopfitters and Stinnes Huang, an officer of T&H
Shopfitters, cannot be held liable for ULP for the reason that there is
no employer-employee relationship between the former and
respondents. Further, Gin Queen avers that its decision to implement
an enforced rotation of work assignments for respondents was a
management prerogative permitted by law, justified by the decrease in
the orders it received from its customers. It explains that its failure to
present concrete proof of its decreasing orders was due to the
impossibility of proving a negative assertion. It also asserts that the
transfer from Castillejos to Cabangan was made in good faith and
solely because of the expiration of its lease contract in Castillejos.
The Courts Ruling
As to the issue of ULP, petitioners argument is utterly without merit.
In the case at bench, petitioners are being accused of violations of
paragraphs (a), (c), and (e) of Article 257 (formerly Article 248) of the
Labor Code,13 to wit:
Article 257. Unfair labor practices of employers.It shall be unlawful
for an employer to commit any of the following unfair labor practices:
(a) To interfere with, restrain or coerce employees in the exercise of
their right to self-organization;
xxxx
(c) To contract out services or functions being performed by union
members when such will interfere with, restrain, or coerce employees
in the exercise of their right to self-organization;
xxxx
(e) To discriminate in regard to wages, hours of work, and other terms
and conditions of employment in order to encourage or discourage
membership in any labor organization. x x x
The concept of ULP is embodied in Article 256 (formerly Article 247) of
the Labor Code,14 which provides:
Article 256. Concept of unfair labor practice and procedure for
prosecution thereof.Unfair labor practices violate the constitutional
right of workers and employees to self-organization, are inimical to the
legitimate interests of both labor and management, including their right
to bargain collectively and otherwise deal with each other in an
atmosphere of freedom and mutual respect, disrupt industrial peace
and hinder the promotion of healthy and stable labor-management
relations.
xxxx
In essence, ULP relates to the commission of acts that transgress the
workers right to organize. As specified in Articles 248 [now Article 257]
and 249 [now Article 258] of the Labor Code, the prohibited acts must
necessarily relate to the workers' right to self-organization x x x.15
In the case of Insular Life Assurance Co., Ltd. Employees Association
NATU v. Insular Life Assurance Co. Ltd.,16this Court had occasion to
lay down the test of whether an employer has interfered with and
coerced employees in the exercise of their right to self-organization,
that is, whether the employer has engaged in conduct which, it may
reasonably be said, tends to interfere with the free exercise of
employees rights; and that it is not necessary that there be direct
evidence that any employee was in fact intimidated or coerced by
statements of threats of the employer if there is a reasonable inference
that anti-union conduct of the employer does have an adverse effect
on self-organization and collective bargaining.
The questioned acts of petitioners, namely: 1) sponsoring a field trip to
Zambales for its employees, to the exclusion of union members, before
the scheduled certification election; 2) the active campaign by the
sales officer of petitioners against the union prevailing as a bargaining
agent during the field trip; 3) escorting its employees after the field trip
to the polling center; 4) the continuous hiring of subcontractors
performing respondents functions; 5) assigning union members to the
Cabangan site to work as grass cutters; and 6) the enforcement of
work on a rotational basis for union members, all reek of interference
on the part of petitioners.
Indubitably, the various acts of petitioners, taken together, reasonably
support an inference that, indeed, such were all orchestrated to restrict
respondents free exercise of their right to self-organization. The Court
is of the considered view that petitioners undisputed actions prior and
immediately before the scheduled certification election, while
seemingly innocuous, unduly meddled in the affairs of its employees in
selecting their exclusive bargaining representative. In Holy Child
Catholic School v. Hon. Patricia Sto. Tomas,17 the Court ruled that a
certification election was the sole concern of the workers, save when
the employer itself had to file the petition x x x, but even after such
filing, its role in the certification process ceased and became merely a
bystander. Thus, petitioners had no business persuading and/or
assisting its employees in their legally protected independent process
of selecting their exclusive bargaining representative. The fact and
peculiar timing of the field trip sponsored by petitioners for its
employees not affiliated with THS-GQ Union, although a positive
enticement, was undoubtedly extraneous influence designed to impede
respondents in their quest to be certified. This cannot be
countenanced.
Not content with achieving a "no union" vote in the certification
election, petitioners launched a vindictive campaign against union
members by assigning work on a rotational basis while subcontractors
performed the latters functions regularly. Worse, some of the
respondents were made to work as grass cutters in an effort to
dissuade them from further collective action.1wphi1 Again, this
cannot be countenanced.
More importantly, petitioners' bare denial of some of the complained
acts and unacceptable explanations, a mere afte1ihought at best,
cannot prevail over respondents' detailed narration of the events that
transpired. At this juncture, it bears to emphasize that in labor cases,
the quantum of proof necessary is substantial evidence,18 or that
amount of relevant evidence as a reasonable mind might accept as
adequate to suppoti a conclusion, even if other minds, equally
reasonable, might conceivably opine otherwise.19
In fine, mindful of the nature of the charge of ULP, including its civil
and/or criminal consequences, the Court finds that the NLRC, as
correctly sustained by the CA, had sufficient factual and legal bases to
support its finding of ULP.
Anent the issue on the award of attorney's fees, the applicable law
concerning the grant thereof in labor cases is Article 11120 of the Labor
Code. Pursuant thereto, the award of 10% attorney's fees is limited to
cases of unlawful withholding of wages. In this case, however, the
Court cannot find any claim or proof that petitioners unlawfully withheld
the wages of respondents. Consequently, the grant of 10% attorney's
fees in favor of respondents is not justified under the circumstances.
Accordingly, the Court deems it proper to delete the same.
WHEREFORE, the November 12, 2009 Decision of the Court of
Appeals and its March 24, 2010 Resolution, in CA-G.R. SP No.
107188, are AFFIRMED, except with respect to the award of attorney's
fees which is hereby DELETED.
SO ORDERED
G.R. Nos. 178222-23 September 29, 2010
MANILA MINING CORP. EMPLOYEES ASSOCIATION-
FEDERATION OF FREE WORKERS CHAPTER, SAMUEL G.
ZUIGA, in his capacity as President, Petitioners,
vs.
MANILA MINING CORP. and/or ARTEMIO F. DISINI, President,
RENE F. CHANYUNGCO, (SVP-Treasurer), RODOLFO S.
MIRANDA, (VP-Controller), VIRGILIO MEDINA (VP), ATTY.
CRISANTO MARTINEZ (HRD), NIGEL TAMLYN (Resident
Manager), BRYAN YAP (VP), FELIPE YAP (Chairman of the
Board), and the NATIONAL LABOR RELATIONS COMMISSION
(FIRST DIVISION), Respondents.
DECISION
PEREZ, J.:
This petition for review on certiorari seeks a reversal of the 30 June
2006 Decision1 of the Court of Appeals in CA-G.R. SP No. 86073 and
its Resolution2 in the same case dated 30 May 2007.
Respondent Manila Mining Corporation (MMC) is a publicly-listed
corporation engaged in large-scale mining for gold and copper ore.
MMC is required by law to maintain a tailings containment facility to
store the waste material generated by its mining operations.
Consequently, MMC constructed several tailings dams to treat and
store its waste materials. One of these dams was Tailings Pond No. 7
(TP No. 7), which was constructed in 1993 and was operated under a
permit issued by the Department of Environment and Natural
Resources (DENR), through its Environmental Management Bureau
(EMB) in Butuan City, Agusan del Norte.3
On 10 January 2000, eleven (11) rank-and-file employees of MMC,
who later became complainants before the labor arbiter, attended the
organizational meeting of MMC-Makati Employees Association-
Federation of Free Workers Chapter (Union). On 3 March 2000, the
Union filed with the Department of Labor and Employment (DOLE) all
the requirements for its registration. The Union acquired its legitimate
registration status on 30 March 2000. Subsequently, it submitted
letters to MMC relating its intention to bargain collectively. On 11 July
2001, the Union submitted its Collective Bargaining Agreement (CBA)
proposal to MMC.
Upon expiration of the tailings permit on 25 July 2001, DENR-EMB did
not issue a permanent permit due to the inability of MMC to secure an
Environmental Compliance Certificate (ECC). An essential component
of an ECC is social acceptability or the consent of the residents in the
community to allow TP No. 7 to operate, which MMC failed to 4. Arsenio Mark M. Perez From June 1996 to
obtain.4 Hence, it was compelled to temporarily shut down its mining
operations, resulting in the temporary lay-off of more than 400
employees in the mine site. July 27, 2001 = 5 yrs.
P9,500/mo.
On 30 July 2001, MMC called for the suspension of negotiations on the P9,500 x 5 yrs. x P 23,750.00
CBA with the Union until resumption of mining operations.5
5. Edmundo M. Galvez From June 1997 to
Among the employees laid-off, complainants Samuel Zuiga, Myrna
Maquio, Doroteo Torre, Arsenio Mark Perez, Edmundo Galvez, Diana
Ruth Rellores, Jonathan Araneta, Teresita Lagman, Reynaldo July 27, 2001 = 4 yrs.
Anzures, Gerardo Opena, and Edwin Tuazon, together with the Union P9,500/mo.
filed a complaint before the labor arbiter6 on even date praying for
P9,500 x 4 yrs. x P 19,000.00
reinstatement, recognition of the Union as the sole and exclusive
representative of its rank-and-file employees, and payment of moral
and exemplary damages and attorneys fees.7 6. Jonathan Araneta From March 1992 to

In their Position Paper,8 complainants challenged the validity of their

lay-off on the averment that MMC was not suffering from business July 27, 2001 = 9 yrs.
losses. They alleged that MMC did not want to bargain collectively with P15,500/mo.
the Union, so that instead of submitting their counterproposal to the P15,500 x 9 yrs. x P 69,750.00
CBA, MMC decided to terminate all union officers and active members.
Petitioners questioned the timing of their lay-off, and alleged that first,
there was no showing that cost-cutting measures were taken by MMC; 7. Teresita D. Lagman From August 1980 to
second, no criteria were employed in choosing which employees to
lay-off; and third, the individuals laid-off were those who signed the
attendance sheet of the union organizational meeting. Petitioners July 27, 2001 = 20 yrs.
likewise claimed that they were denied due process because they were P10,900/mo.
not given a 30-day notice informing them of the lay-off. Neither was the P10,900 x 20 yrs. x P109,000.00
DOLE informed of this lay-off, as mandated by law.9

Respondents justified the temporary lay-off as bona fide in character 8. Gerardo Opena From October 1997 to
and a valid management prerogative pending the issuance of the
permit to continuously operate TP No. 7. July 27, 2001 = 4 yrs.
P8,250/mo.
The labor arbiter ruled in favor of MMC and held that the temporary
P8,250 x 4 yrs. x P 16,500.00
shutdown of the mining operation, as well as the temporary lay-off of
the employees, is valid.10
9. Edwin Tuazon From August 1994 to
On appeal, the National Labor Relations Commission (NLRC) modified
the judgment of the labor arbiter and ordered the payment of
July 27, 2001 = 8 yrs.
separation pay equivalent to one month pay for every year of service. It
ratiocinated that the temporary lay-off, which exceeded more than six P7,000/mo.
(6) months, had the effect of severance of the employer-employee P7,000 x 8 yrs. x P 28,000.00
relationship. The dispositive portion of the Decision read:
GRAND TOTAL P469,050.00

WHEREFORE, the assailed decision is, as it is hereby, Vacated and

Set Aside and a new one entered ordering respondent Manila Mining In addition respondent company is hereby ordered to pay attorneys
Corporation to pay the individual complainants their separation pay fees to complainants equivalent to 10% of the award. 11
computed as follows:
In an Order12 dated 31 May 2004, the NLRC affirmed its Resolution.
1. Samuel G. [Z]uiga From Feb. 1, 1995 to
Dissatisfied, both parties separately filed their petitions
for certiorari with the Court of Appeals, docketed as CA-G.R. SP No.
July 27, 2001 = 7 yrs.
86073 and CA G.R. SP No. 86163.
P14,300/mo.
P14,300 x 7 yrs. x P 50,050.00 The two petitions were consolidated upon motion by MMC in a
Resolution dated 3 February 2005.
2. Myrna Maquio From March 1992 to
In its Decision dated 30 June 2006, the Court of Appeals modified the
NLRC ruling, thus:
July 27, 2001 = 9 yrs.
P14,000/mo.
WHEREFORE, the instant petition is partially GRANTED and the
P14,000 x 9 yrs. x P 63,000.00 challenged Resolution dated August 29, 2003 of public respondent
National Labor Relations Commission in NLRC NCR CA No. 033111-
(CA No. 033111-02) is MODIFIED insofar as it holds MMC liable to pay
3. Doroteo J. Torre From July 1983 to
the Union attorneys fees equivalent to 10% of the award, which
portion of the questioned decision is now SET ASIDE.
July 27, 2001 = 18 yrs.
P10,000/mo. The monetary award of separation pay is maintained, but is MODIFIED
P10,000 x 18 yrs. x P 90,000.00 from one (1) month pay for every year of service to ONE-HALF (1/2)
MONTH PAY for every year of service, a fraction of at least six (6)
months being considered as one (1) whole year.13
Both parties filed their respective motions for reconsideration but in a
Resolution dated 30 May 2007, the Court of Appeals denied the
motions for lack of merit.141avvphi1
Only the Union elevated the case to this Court via the instant petition
for review on certiorari. The Union attributes bad faith on the part of
MMC in implementing the temporary lay-off resulting in the
complainants constructive dismissal. The Union alleges that the failure
to obtain a permit to operate TP No. 7 is largely due to failure on the
part of MMC to comply with the DENR-EMBs conditions.15
The Union claims that the temporary lay-off was effected without any
proper notice to the DOLE as mandated by Article 283 of the Labor
Code. It further maintains that MMC did not observe the jurisprudential
criteria in the selection of the employees to be laid-off.16
The Union insists that MMC is guilty of unfair labor practice when it
unilaterally suspended the negotiation for a CBA. The Union avers that
the lay-off and subsequent termination of complainants were due to the
formation of the union at MMC.17
MMC defends the temporary lay-off of the employees as valid and
done in the exercise of management prerogative. It concedes that
upon expiration of the 6-month period, coupled with losses suffered by
MMC, the complainants were constructively dismissed. However, MMC
takes exception to the application of Article 286 of the Labor Code in
that the 6-month period cannot and will not apply to the instant case in
order to consider the employees terminated and to support the
payment of separation pay. MMC explains that the 6-month period
does not refer to a situation where the employer does not have any
control over the nature, extent and period of the temporary suspension
of operations. MMC adds that the suspension of MMCs operations is
left primarily to the discretion of the DENR-EMB, which has the
authority to issue MMCs permit to operate TP No. 7.18
MMC further submits that where the closure is due to serious business
losses, such as in this case where the aggregate losses amounted to
over P880,000,000.00, the law does not impose any obligation upon
the employer to pay separation benefits.19
With respect to the charge of unfair labor practice, MMC avers that it
merely deferred responding to the Unions letter-proposal until the
resumption of its mining operations. It went to claim further that the
employment relationship between the parties was suspended at the
time the request to bargain was made.20
The issue of MMCs temporary suspension of business operations
resulting in the temporary lay-off of some of its employees was
squarely addressed by the labor tribunals and the Court of Appeals.
They sustained in unison the validity of the temporary suspension, as
well as the temporary lay-off.
We agree. The lay-off is neither illegal nor can it be considered as
unfair labor practice.
Despite all efforts exerted by MMC, it did not succeed in obtaining the
consent of the residents of the community where the tailings pond
would operate, one of the conditions imposed by DENR-EMB in
granting its application for a permanent permit. It is precisely MMCs
faultless failure to secure a permit which caused the temporary
shutdown of its mining operations. As aptly put by the Court of
Appeals:
The evidence on record indeed clearly shows that MMCs suspension
of its mining operations was bonafide and the reason for such
suspension was supported by substantial evidence. MMC cannot
conduct mining operations without a tailings disposal system. For this
purpose, MMC operates TP No. 7 under a valid permit from the
Department of Environment and Natural Resources (DENR) through its
Environmental Management Bureau (EMB). In fact, a "Temporary
Authority to Construct and Operate" was issued on January 25, 2001 in
favor of MMC valid for a period of six (6) months or until July 25, 2001.
The NLRC did not dispute MMCs claim that it had timely filed an
application for renewal of its permit to operate TP No. 7 but that the
renewal permit was not immediately released by the DENR-EMB,
hence, MMC was compelled to temporarily shutdown its milling and
mining operations. Here, it is once apparent that the suspension of
MMCs mining operations was not due to its fault nor was it
necessitated by financial reasons. Such suspension was brought about
by the non-issuance of a permit for the continued operation of TP No. 7
without which MMC cannot resume its milling and mining operations. x
x x.21[Emphasis supplied.]
Unfair labor practice cannot be imputed to MMC since, as ruled by the
Court of Appeals, the call of MMC for a suspension of the CBA
negotiations cannot be equated to "refusal to bargain."
Article 252 of the Labor Code defines the phrase "duty to bargain
collectively," to wit:
ARTICLE 252. Meaning of duty to bargain collectively. - The duty to
bargain collectively means the performance of a mutual obligation to
meet and convene promptly and expeditiously in good faith for the
purpose of negotiating an agreement with respect to wages, hours of
work and all other terms and conditions of employment including
proposals for adjusting any grievances or questions arising under such
agreements [and executing a contract incorporating such agreements]
if requested by either party but such duty does not compel any party to
agree to a proposal or to make any concession.
For a charge of unfair labor practice to prosper, it must be shown that
the employer was motivated by ill-will, bad faith or fraud, or was
oppressive to labor. The employer must have acted in a manner
contrary to morals, good customs, or public policy causing social
humiliation, wounded feelings or grave anxiety. While the law makes it
an obligation for the employer and the employees to bargain
collectively with each other, such compulsion does not include the
commitment to precipitately accept or agree to the proposals of the
other. All it contemplates is that both parties should approach the
negotiation with an open mind and make reasonable effort to reach a
common ground of agreement.22
The Union based its contention on the letter request by MMC for the
suspension of the collective bargaining negotiations until it resumes
operations.23 Verily, it cannot be said that MMC deliberately avoided
the negotiation. It merely sought a suspension and in fact, even
expressed its willingness to negotiate once the mining operations
resume. There was valid reliance on the suspension of mining
operations for the suspension, in turn, of the CBA negotiation. The
Union failed to prove bad faith in MMCs actuations.
Even as we declare the validity of the lay-off, we cannot say that MMC
has no obligation at all to the laid-off employees. The validity of its act
of suspending its operations does not excuse it from paying separation
pay.
MMC seeks refuge in Article 286 which provides:
ART. 286. When employment not deemed terminated. The bona fide
suspension of the operation of a business or undertaking for a period
not exceeding six (6) months, or the fulfillment by the employee of a
military or civic duty shall not terminate employment. In all such cases,
the employer shall reinstate the employee to his former position
without loss of seniority rights if he indicates his desire to resume his
work not later than one (1) month from the resumption of operations of
his employer or from his relief from the military or civic duty.
Article 286 of the Labor Code allows the bona fide suspension of
operations for a period not exceeding six (6) months. During the
suspension, an employee is not deemed terminated. As a matter of
fact, the employee is entitled to be reinstated once the employer
resumes operations within the 6-month period. However, Article 286 is
silent with respect to the rights of the employee if the suspension of
operations lasts for more than 6 months. Thus is bred the issue
regarding the responsibility of MMC toward its employees.
MMC subscribes to the view that for purposes of determining employer
responsibility, an employment should likewise not be deemed
terminated, should the suspension of operation go beyond six (6)
months as long as the continued suspension is due, as in this case, to
a cause beyond the control of the employer.
We disagree.
As correctly elucidated upon by the Court of Appeals:
We observe that MMC was forced by the circumstances, hence, it
resorted to a temporary suspension of its mining and milling
operations. It is clear that MMC had no choice. It would be well to
reiterate at this juncture that the reason for such suspension cannot be
attributed to DENR-EMB. It is thus, evident, that the MMC declared
temporary suspension of operations to avert further losses. 24
The decision to suspend operation ultimately lies with the employer,
who in its desire to avert possible financial losses, declares, as here,
suspension of operations.
Article 283 of the Labor Code applies to MMC and it provides:
ARTICLE 283. Closure of establishment and reduction of personnel. -
The employer may also terminate the employment of any employee
due to the installation of labor-saving devices, redundancy,
retrenchment to prevent losses or the closing or cessation of operation
of the establishment or undertaking unless the closing is for the
purpose of circumventing the provisions of this Title, by serving a
written notice on the workers and the Ministry of Labor and
Employment at least one (1) month before the intended date thereof. In
case of termination due to the installation of labor-saving devices or
redundancy, the worker affected thereby shall be entitled to a
separation pay equivalent to at least his one (1) month pay or to at
least one (1) month pay for every year of service, whichever is higher.
In case of retrenchment to prevent losses and in cases of closures or
cessation of operations of establishment or undertaking not due to
serious business losses or financial reverses, the separation pay shall
be equivalent to one (1) month pay or 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 one (1) whole year.
Said provision is emphatic that an employee, who was dismissed due
to cessation of business operation, is entitled to the separation pay
equivalent to one (1) month pay or at least one-half (1/2) month pay for
every year of service, whichever is higher. And it is jurisprudential that
separation pay should also be paid to employees even if the closure or
cessation of operations is not due to losses.25ten.lihpwal
The Court is not impressed with the claim that actual severe financial
losses exempt MMC from paying separation benefits to complainants.
In the first place, MMC did not appeal the decision of the Court of
Appeals which affirmed the NLRCs award of separation pay to
complainants. MMCs failure had the effect of making the awards final
so that MMC could no longer seek any other affirmative relief. In the
second place, the non-issuance of a permit forced MMC to
permanently cease its business operations, as confirmed by the Court
of Appeals. Under Article 283, the employer can lawfully close shop
anytime as long as cessation of or withdrawal from business
operations is bona fide in character and not impelled by a motive to
defeat or circumvent the tenurial rights of employees, and as long as
he pays his employees their termination pay in the amount
corresponding to their length of service.26The cessation of operations,
in the case at bar is of such nature. It was proven that MMC stopped
its operations precisely due to failure to secure permit to operate a
tailings pond. Separation pay must nonetheless be given to the
separated employees.
Finding no cogent reason to disturb its ruling, we affirm the Decision of
the Court of Appeals.
BASED ON THE FOREGOING, the petition is DENIED. The Decision
of the Court of Appeals is AFFIRMED. No costs.
SO ORDERED
G.R. No. 176249 November 27, 2009
FVC LABOR UNION-PHILIPPINE TRANSPORT AND GENERAL
WORKERS ORGANIZATION (FVCLU-PTGWO),Petitioner,
vs.
SAMA-SAMANG NAGKAKAISANG MANGGAGAWA SA FVC-
SOLIDARITY OF INDEPENDENT AND GENERAL LABOR
ORGANIZATIONS (SANAMA-FVC-SIGLO), Respondent.
DECISION
BRION, J.:
We pass upon the petition for review on certiorari under Rule 45 of the
Rules of Court1 filed by FVC Labor UnionPhilippine Transport and
General Workers Organization (FVCLU-PTGWO) to challenge the
Court of Appeals (CA) decision of July 25, 20062 and its resolution
rendered on January 15, 20073 in C.A. G.R. SP No. 83292.4
THE ANTECEDENTS
The facts are undisputed and are summarized below.
On December 22, 1997, the petitioner FVCLU-PTGWO the
recognized bargaining agent of the rank-and-file employees of the FVC
Philippines, Incorporated (company) signed a five-year collective
bargaining agreement (CBA) with the company. The five-year CBA
period was from February 1, 1998 to January 30, 2003.5 At the end of
the 3rd year of the five-year term and pursuant to the CBA, FVCLU-
PTGWO and the company entered into the renegotiation of the CBA
and modified, among other provisions, the CBAs duration. Article XXV,
Section 2 of the renegotiated CBA provides that "this re-negotiation
agreement shall take effect beginning February 1, 2001 and until May
31, 2003" thus extending the original five-year period of the CBA by
four (4) months.
On January 21, 2003, nine (9) days before the January 30, 2003
expiration of the originally-agreed five-year CBA term (and four [4]
months and nine [9] days away from the expiration of the amended
CBA period), the respondent Sama-Samang Nagkakaisang
Manggagawa sa FVC-Solidarity of Independent and General Labor
Organizations (SANAMA-SIGLO) filed before the Department of Labor
and Employment (DOLE) a petition for certification election for the
same rank-and-file unit covered by the FVCLU-PTGWO CBA. FVCLU-
PTGWO moved to dismiss the petition on the ground that the
certification election petition was filed outside the freedom period or
outside of the sixty (60) days before the expiration of the CBA on May
31, 2003.
Action on the Petition and Related Incidents
On June 17, 2003, Med-Arbiter Arturo V. Cosuco dismissed the
petition on the ground that it was filed outside the 60-day period
counted from the May 31, 2003 expiry date of the amended
CBA.6 SANAMA-SIGLO appealed the Med-Arbiters Order to the DOLE
Secretary, contending that the filing of the petition on January 21, 2003
was within 60-days from the January 30, 2003 expiration of the original
CBA term.
DOLE Secretary Patricia A. Sto. Tomas sustained SANAMA-SIGLOs
position, thereby setting aside the decision of the Med-Arbiter.7 She
ordered the conduct of a certification election in the company. FVCLU-
PTGWO moved for the reconsideration of the Secretarys decision.
On November 6, 2003, DOLE Acting Secretary Manuel G. Imson
granted the motion; he set aside the August 6, 2003 DOLE decision
and dismissed the petition as the Med-Arbiters Order of June 17, 2003
did.8 The Acting Secretary held that the amended CBA (which
extended the representation aspect of the original CBA by four [4]
months) had been ratified by members of the bargaining unit some of
whom later organized themselves as SANAMA-SIGLO, the certification
election applicant. Since these SANAMA-SIGLO members fully
accepted and in fact received the benefits arising from the
amendments, the Acting Secretary rationalized that they also accepted
the extended term of the CBA and cannot now file a petition for
certification election based on the original CBA expiration date.
SANAMA-SIGLO moved for the reconsideration of the Acting
Secretarys Order, but Secretary Sto. Tomas denied the motion in her
Order of January 30, 2004.9
SANAMA-SIGLO sought relief from the CA through a petition for
certiorari under Rule 65 of the Rules of Court based on the grave
abuse of discretion the Labor Secretary committed when she reversed
her earlier decision calling for a certification election. SANAMA-SIGLO
pointed out that the Secretarys new ruling is patently contrary to the
express provision of the law and established jurisprudence.
THE CA DECISION
The CA found SANAMA-SIGLOs petition meritorious on the basis of
the applicable law10 and the rules,11 as interpreted in the congressional
debates. It set aside the challenged DOLE Secretary decisions and
reinstated her earlier ruling calling for a certification election. The
appellate court declared:
It is clear from the foregoing that while the parties may renegotiate the
other provisions (economic and non-economic) of the CBA, this should
not affect the five-year representation aspect of the original CBA. If the
duration of the renegotiated agreement does not coincide with but
rather exceeds the original five-year term, the same will not adversely
affect the right of another union to challenge the majority status of the
incumbent bargaining agent within sixty (60) days before the lapse of
the original five (5) year term of the CBA. In the event a new union
wins in the certification election, such union is required to honor and
administer the renegotiated CBA throughout the excess period.
FVCLU-PTGWO moved to reconsider the CA decision but the CA
denied the motion in its resolution of January 15, 2007.12 With this
denial, FVCLU-PTGWO now comes before us to challenge the CA
rulings.13 It argues that in light of the peculiar attendant circumstances
of the case, the CA erred in strictly applying Section 11 (11b), Rule XI,
Book V of the Omnibus Rules Implementing the Labor Code, as
amended by Department Order No. 9, s. 1997.14
Apparently, the "peculiar circumstances" the FVCLU-PTGWO referred
to relate to the economic and other provisions of the February 1, 1998
to January 30, 2003 CBA that it renegotiated with the company. The
renegotiated CBA changed the CBAs remaining term from February 1,
2001 to May 31, 2003. To FVCLU-PTGWO, this extension of the CBA
term also changed the unions exclusive bargaining representation
status and effectively moved the reckoning point of the 60-day freedom
period from January 30, 2003 to May 30, 2003. FVCLU-PTGWO thus
moved to dismiss the petition for certification election filed on January
21, 2003 (9 days before the expiry date on January 30, 2003 of the
original CBA) by SANAMA-SIGLO on the ground that the petition was
filed outside the authorized 60-day freedom period.
It also submits in its petition that the SANAMA-SIGLO is estopped from
questioning the extension of the CBA term under the amendments
because its members are the very same ones who approved the
amendments, including the expiration date of the CBA, and who
benefited from these amendments.
Lastly, FVCLU-PTGWO posits that the representation petition had
been rendered moot by a new CBA it entered into with the company
covering the period June 1, 2003 to May 31, 2008.151avvphi1
Required to comment by the Court16 and to show cause for its failure to
comply,17 SANAMA-SIGLO manifested on October 10, 2007 that: since
the promulgation of the CA decision on July 25, 2006 or three years
after the petition for certification election was filed, the local leaders of
SANAMA-SIGLO had stopped reporting to the federation office or
attending meetings of the council of local leaders; the SANAMA-SIGLO
counsel, who is also the SIGLO national president, is no longer in the
position to pursue the present case because the local union and its
leadership, who are principals of SIGLO, had given up and abandoned
their desire to contest the representative status of FVCLU-PTGWO;
and a new CBA had already been signed by FVCLU-PTGWO and the
company.18Under these circumstances, SANAMA-SIGLO contends
that pursuing the case has become futile, and accordingly simply
adopted the CA decision of July 25, 2006 as its position; its counsel
likewise asked to be relieved from filing a comment in the case. We
granted the request for relief and dispensed with the filing of a
comment.19
THE COURTS RULING
While SANAMA-SIGLO has manifested its abandonment of its
challenge to the exclusive bargaining representation status of FVCLU-
PTGWO, we deem it necessary in the exercise of our discretion to
resolve the question of law raised since this exclusive representation
status issue will inevitably recur in the future as workplace parties avail
of opportunities to prolong workplace harmony by extending the term
of CBAs already in place.20
The legal question before us centers on the effect of the amended or
extended term of the CBA on the exclusive representation status of the
collective bargaining agent and the right of another union to ask for
certification as exclusive bargaining agent. The question arises
because the law allows a challenge to the exclusive representation
status of a collective bargaining agent through the filing of a
certification election petition only within 60 days from the expiration of
the five-year CBA.
Article 253-A of the Labor Code covers this situation and it provides:
Terms of a collective bargaining agreement. Any Collective
Bargaining Agreement that the parties may enter into, shall, insofar as
the representation aspect is concerned, be for a term of five (5) years.
No petition questioning the majority status of the incumbent bargaining
agent shall be entertained and no certification election shall be
conducted by the Department of Labor and Employment outside of the
sixty day period immediately before the date of expiry of such five-year
term of the Collective Bargaining Agreement. All other provisions of the
Collective Bargaining Agreement shall be renegotiated not later than
three (3) years after its execution.
Any agreement on such other provisions of the Collective Bargaining
Agreement entered into within six (6) months from the date of expiry of
the term of such other provisions as fixed in such Collective Bargaining
Agreement, shall retroact to the day immediately following such date. If
any such agreement is entered into beyond six months, the parties
shall agree on the duration of retroactivity thereof. In case of a
deadlock in the renegotiation of the collective bargaining agreement,
the parties may exercise their rights under this Code.
This Labor Code provision is implemented through Book V, Rule VIII of
the Rules Implementing the Labor Code21which states:
Sec. 14. Denial of the petition; grounds. The Med-Arbiter may
dismiss the petition on any of the following grounds:
 xxxx
(b) the petition was filed before or after the freedom period of a duly
registered collective bargaining agreement;provided that the sixty-day
period based on the original collective bargaining agreement shall not
be affected by any amendment, extension or renewal of the collective
bargaining agreement (underscoring supplied).
xxxx
The root of the controversy can be traced to a misunderstanding of the
interaction between a unions exclusive bargaining representation
status in a CBA and the term or effective period of the CBA.
FVCLU-PTGWO has taken the view that its exclusive representation
status should fully be in step with the term of the CBA and that this
status can be challenged only within 60 days before the expiration of
this term. Thus, when the term of the CBA was extended, its exclusive
bargaining status was similarly extended so that the freedom period for
the filing of a petition for certification election should be counted back
from the expiration of the amended CBA term.
We hold this FVCLU-PTGWO position to be correct, but only with
respect to the original five-year term of the CBA which, by law, is also
the effective period of the unions exclusive bargaining representation
status. While the parties may agree to extend the CBAs original five-
year term together with all other CBA provisions, any such amendment
or term in excess of five years will not carry with it a change in the
unions exclusive collective bargaining status. By express provision of
the above-quoted Article 253-A, the exclusive bargaining status cannot
go beyond five years and the representation status is a legal matter not
for the workplace parties to agree upon. In other words, despite an
agreement for a CBA with a life of more than five years, either as an
original provision or by amendment, the bargaining unions exclusive
bargaining status is effective only for five years and can be challenged
within sixty (60) days prior to the expiration of the CBAs first five
years. As we said in San Miguel Corp. Employees UnionPTGWO, et
al. v. Confesor, San Miguel Corp., Magnolia Corp. and San Miguel
Foods, Inc.,22where we cited the Memorandum of the Secretary of
Labor and Employment dated February 24, 1994:
In the event however, that the parties, by mutual agreement, enter into
a renegotiated contract with a term of three (3) years or one which
does not coincide with the said five-year term and said agreement is
ratified by majority of the members in the bargaining unit, the subject
contract is valid and legal and therefore, binds the contracting parties.
The same will however not adversely affect the right of another union
to challenge the majority status of the incumbent bargaining agent
within sixty (60) days before the lapse of the original five (5) year term
of the CBA.
In the present case, the CBA was originally signed for a period of five
years, i.e., from February 1, 1998 to January 30, 2003, with a provision
for the renegotiation of the CBAs other provisions at the end of the 3rd
year of the five-year CBA term. Thus, prior to January 30, 2001 the
workplace parties sat down for renegotiation but instead of confining
themselves to the economic and non-economic CBA provisions, also
extended the life of the CBA for another four months, i.e., from the
original expiry date on January 30, 2003 to May 30, 2003.
As discussed above, this negotiated extension of the CBA term has no
legal effect on the FVCLU-PTGWOs exclusive bargaining
representation status which remained effective only for five years
ending on the original expiry date of January 30, 2003. Thus, sixty
days prior to this date, or starting December 2, 2002, SANAMA-SIGLO
could properly file a petition for certification election. Its petition, filed
on January 21, 2003 or nine (9) days before the expiration of the CBA
and of FVCLU-PTGWOs exclusive bargaining status, was seasonably
filed.
We thus find no error in the appellate courts ruling reinstating the
DOLE order for the conduct of a certification election. If this ruling
cannot now be given effect, the only reason is SANAMA-SIGLOs own
desistance; we cannot disregard its manifestation that the members of
SANAMA themselves are no longer interested in contesting the
exclusive collective bargaining agent status of FVCLU-PTGWO. This
recognition is fully in accord with the Labor Codes intent to foster
industrial peace and harmony in the workplace.
WHEREFORE, premises considered, we AFFIRM the correctness of
the challenged Decision and Resolution of the Court of Appeals and
accordingly DISMISS the petition, but nevertheless DECLARE that no
certification election, pursuant to the underlying petition for certification
election filed with the Department of Labor and Employment, can be
enforced as this petition has effectively been abandoned.
SO ORDERED
G.R. No. 168406 January 14, 2015
CLUB FILIPINO, INC. and ATTY. ROBERTO F. DE
LEON, Petitioners,
vs.
BENJAMIN BAUTISTA, RONIE SUALOG, JOEL CALIDA, JOHNNY
ARINTO, CARLITO PRESENTACION, and ROBERTO DE
GUZMAN, Respondents.
RESOLUTION
LEONEN, J.:
This resolves Club Filipino, Inc.'s Supplemental Motion for
Reconsideration of this court's Resolution dated July 13, 2009.
Club Filipino Employees Association (CLUFEA) is a union representing
the employees of Club Filipino, Inc. CLUFEA and Club Filipino, Inc.
entered into previous collective bargaining agreements, the last of
which expired on May 31, 2000.1
Before CLUFEA and Club Filipino, Inc.s last collective bargaining
agreement expired and within the 60-day freedom period,2 CLUFEA
had made several demands on Club Filipino, Inc. to negotiate a new
agreement. Club Filipino, Inc., however, replied that its Board of
Directors could not muster a quorum to negotiate with CLUFEA. 3
CLUFEA then formally submitted its proposals to Club Filipino Inc.s
negotiating panel sometime in June 2000. Still, Club Filipino, Inc. failed
to negotiate, citing as reason the illness of the chairperson of its
negotiating panel.4
To compel Club Filipino, Inc. to negotiate with it, CLUFEA filed before
the National Conciliation and Mediation Board (NCMB) a request for
preventive mediation. The negotiating panels of CLUFEA and Club
Filipino, Inc. finally met on April 5, 2001. However, the meeting ended
with the parties respective panels declaring a deadlock in negotiation. 5
Thus, on April 6, 2001, CLUFEA filed with the NCMB a Notice of Strike
on the ground of bargaining deadlock. Club Filipino, Inc. submitted the
first part of its counterproposal on April 22, 2001.6
On May 4, 2001, CLUFEA conducted a strike vote under the
Department of Labor and Employments supervision with the majority
of CLUFEAs total union membership voting to strike.7
On May 11, 2001, Club Filipino, Inc. submitted to CLUFEA the second
part of its counterproposal, which CLUFEA countered with an improved
offer. Club Filipino, Inc., however, refused CLUFEAs improved offer.8
On May 26, 2001, CLUFEA staged a strike on the ground of bargaining
deadlock.9
On May 31, 2001, Club Filipino, Inc. filed before the National Capital
Regional Arbitration Branch of the National Labor Relations
Commission (NLRC) a Petition to Declare [CLUFEAs] Strike
Illegal.10 According to Club Filipino, Inc., CLUFEA failed to file a Notice
of Strike and to conduct a strike vote, in violation of the legal
requirements for staging a strike.11 Worse, CLUFEAs members
allegedly committed illegal acts while on strike, preventing their co-
workers from entering and leaving Club Filipino, Inc.s premises and
even cutting off Club Filipino, Inc.s electricity and water supply on the
first day of the strike.12 Club Filipino, Inc. prayed that all of CLUFEAs
officers who participated in the strike be declared to have lost their
employment pursuant to Article 264(a) of the Labor Code. 13
CLUFEA answered Club Filipino, Inc.s Petition with the following
officers verifying the Answer: Benjamin Bautista, President (Bautista);
Danilo Caluag, Vice President (Caluag); Ronie Sualog, Secretary
(Sualog); and Joel Calida, Treasurer (Calida).14
Labor Arbiter Manuel P. Asuncion decided Club Filipino, Inc.s Petition
for declaration of illegal strike.15 He found that CLUFEAs Notice of
Strike did not contain CLUFEAs written proposals and Club Filipino,
Inc.s counterproposals, in violation of then Rule XXII, Section 4 of the
Omnibus Rules Implementing the Labor Code.16The rule provided:
In cases of bargaining deadlocks, the notice shall, as far as
practicable, further state the unresolved issues in the bargaining
negotiations and be accompanied by the written proposals of the
union, the counter-proposals of the employer and the proof of a
request for conference to settle differences. In cases of unfair labor
practices, the notice shall, as far as practicable, state the acts
complained of, and efforts taken to resolve the dispute amicably.
Any notice which does not conform with the requirements of this and
the foregoing section shall be deemed as not having been filed and the
party concerned shall be so informed by the regional branch of the
Board.
Thus, in the Decision17 dated November 28, 2001, the Labor Arbiter
declared CLUFEAs strike "procedurally infirm"18 for CLUFEAs failure
to comply with the procedural requirements for staging a strike. The
Labor Arbiter declared the strike illegal and considered "all the officers
of the union . . . terminated from service."19 Because of the
retrenchment program Club Filipino, Inc. allegedly launched before the
Labor Arbiter issued his Decision, the dismissed union officers were
ordered to receive separation pay "similar in terms with those offered
to the employees affected by the retrenchment program of the club."20
On December 20, 2001, CLUFEA appealed the Labor Arbiters
Decision before the National Labor Relations Commission (NLRC) with
Bautista, Caluag, Sualog, and Calida verifying the Memorandum of
Appeal on CLUFEAs behalf.21
The NLRC ruled that CLUFEAs Appeal was filed by persons "[having]
no legal standing to question the [Labor Arbiters] decision."22 Bautista
had allegedly resigned from Club Filipino, Inc. on September 30, 2001,
receiving separation benefits pursuant to Club Filipino, Inc.s
Employees Retirement Plan.23
For their part, Caluag, Sualog, and Calida allegedly misrepresented
themselves as CLUFEAs officers when they appealed to the NLRC.
According to the NLRC, CLUFEA had already elected a new set of
officers on September 28, 2001. Caluag, Sualog, and Calida,
therefore, were no longer CLUFEAs officers when they filed the
Appeal on December 20, 2001.24
Finding that CLUFEA no longer wished to appeal the Labor Arbiters
Decision, the NLRC cited a letter the new officers of CLUFEA allegedly
gave Atty. Roberto F. De Leon, Club Filipino, Inc.s President:
Nais po naming ipabatid na ang ginawad na pagpapasya ng NLRC na
naging ilegal ang pagdaos ng pag-aalsa noong Mayo 26, 2001 ay hindi
lingid sa aming kaalaman at kamiylubos na nalulungkot para doon sa
mga kasaping opisyal na nasangkot at humantong sa ganito ng dahil
na rin sa kanilang kapabayaan, mga padalos-dalos at mapusok na
pagkilos na walang pagkunsulta sa mga miyembro. Ang pamunuan
sampu ng aming mga kasapi ay mariing tinututulan ang ano mang uri
ng pagaapela upang maisalba ang natitirang miyembro sa tiyak na
kapahamakan kung magpapatuloy and [sic]ganitong uri ng tagisan ng
bawat isa.25
Lastly, the NLRC found that as of November 23, 2001, CLUFEA had
terminated the services of its legal counsel.26Yet, its former legal
counsel filed and signed CLUFEAs Memorandum of Appeal to the
NLRC. The Memorandum of Appeal, therefore, was filed without
authority of CLUFEA.
Thus, in the Decision27 dated September 30, 2002, the NLRC denied
the Appeal filed on December 20, 2001 for lack of merit.
Club Filipino, Inc. filed a Motion for Partial Reconsideration, while
Bautista, Caluag, Sualog, and Calida filed a Motion for
Reconsideration of the NLRCs Decision dated September 30, 2002.
Johnny Arinto (Arinto), Roberto de Guzman (de Guzman), and
Laureno Fegalquin (Fegalquin), all directors and officers of
CLUFEA,28 joined Bautista, Caluag, Sualog, and Calida in filing the
Motion for Reconsideration.29
The NLRC denied the Motions in the Resolution30 dated July 15, 2003.
On September 22, 2003, Bautista, Sualog, Calida, Arinto, de Guzman,
and Fegalquin filed a Petition for Certiorari with the Court of
Appeals.31 However, Caluag no longer joined his colleagues. Instead,
Carlito Presentacion (Presentacion), a CLUFEA member, joined in the
filing of the Petition for Certiorari.
The Court of Appeals first resolved whether Bautista, Sualog, Calida,
Arinto, de Guzman, and Fegalquin had legal personality to appeal
before the NLRC. On this issue, the Court of Appeals ruled that "a
worker ordered dismissed under a tribunals decision has every right to
question his or her dismissal especially if he [or she] had not been
properly impleaded in the case and in the decision that decreed his or
her dismissal."32 Being officers of CLUFEA, Bautista, et al. had the
right to appeal the loss of their employment with the NLRC.
With respect to Arinto, de Guzman, and Fegalquin, the Court of
Appeals further ruled that they were not granted "the full hearing that
the due process requirements of the Philippine Constitution
impose."33 Arinto, de Guzman, and Fegalquin participated only during
the Motion for Reconsideration stage with the NLRC. The Labor
Arbiters Decision, therefore, did not bind Arinto, de Guzman, and
Fegalquin.
On the merits, the Court of Appeals held that the Labor Arbiter gravely
abused his discretion in declaring CLUFEAs strike illegal. The Court of
Appeals ruled that the requirements under Rule XXII, Section 4 of the
Omnibus Rules Implementing the Labor Code "[do] not appear to be
absolute."34 Rule XXII, Section 4 only requires that the proposals and
counterproposals be attached to the Notice of Strike "as far as
practicable."35 Since CLUFEA had already filed a Notice of Strike when
Club Filipino, Inc. submitted its counterproposals, it was not practicable
for CLUFEA to attach Club Filipino, Inc.s counterproposals to the
Notice of Strike.
The Court of Appeals found that the Labor Arbiter "disregarded"36 the
law on the status of employees who participated in an illegal strike.
Under the law, union officers may be dismissed for participating in an
illegal strike only if they knowingly participated in it. According to the
Court of Appeals, the Labor Arbiter erred in ordering all the officers of
CLUFEA dismissed from the service without even naming these
officers and specifying the acts these officers committed that rendered
the strike illegal.
The Court of Appeals, however, found that Bautista and Fegalquin had
already resigned during the pendency of the case and had received
separation benefits from Club Filipino, Inc. Bautista and Fegalquin,
therefore, "no longer [had] any legal interest [in filing the petition for
certiorari]."37
As for Presentacion, the Court of Appeals found that he was not an
officer of CLUFEA and was not dismissed by virtue of the Labor
Arbiters Decision. He, therefore, had no personality to join Bautista,
Sualog, Calida, Arinto, de Guzman, and Fegalquin in filing the Petition
for Certiorari. As for Sualog, Calida, Arinto, and de Guzman, the Court
of Appeals ruled that the Labor Arbiters Decision was void.
Thus, in the Decision38 dated May 31, 2005, the Court of Appeals
granted the Petition for Certiorari with respect to Sualog, Calida, Arinto,
and de Guzman. The Court of Appeals set aside the Labor Arbiters
Decision for being null and void and ordered the payment of full
backwages and benefits to them from the time of their dismissal up to
the finality of the Court of Appeals Decision. In lieu of reinstatement,
the Court of Appeals ordered Club Filipino, Inc. to pay Sualog, Calida,
Arinto, and de Guzman separation pay computed at one (1) month
salary per year of service from the time of their hiring up to the finality
of the Decision less any amount Sualog, Calida, Arinto, and de
Guzman may have received pursuant to the Labor Arbiters Decision.
As for Bautista, Fegalquin, and Presentacion, the Court of Appeals
dismissed the Petition for Certiorari.39
On June 23, 2005, Club Filipino, Inc. filed a Petition for Review on
Certiorari40 with this court. Bautista, Sualog, Calida, Arinto,
Presentacion, and de Guzman filed their Comment41 to which Club
Filipino, Inc. replied.42
After the parties had filed their respective memoranda,43 this court
considered this case submitted for decision. 44
This court agreed with the Court of Appeals Decision. This court ruled
that CLUFEA could not have attached Club Filipino, Inc.s
counterproposals in the Notice of Strike since Club Filipino, Inc.
submitted it only after CLUFEA had filed the Notice of Strike. It was,
therefore, "not practicable"45 for CLUFEA to attach Club Filipino, Inc.s
counterproposal to the Notice of Strike. CLUFEA did not violate Rule
XXII, Section 4 of the Omnibus Rules Implementing the Labor Code.
This court sustained the Court of Appeals finding that the Labor Arbiter
gravely abused his discretion in ordering the "wholesale dismissal" 46 of
CLUFEAs officers. According to this court, the law requires
"knowledge [of the illegality of the strike] as a condition sine qua non
before a union officer can be dismissed . . . for participating in an illegal
strike."47 However, "[n]owhere in the ruling of the labor arbiter can
[there be found] any discussion of how respondents, as union officers,
knowingly participated in the alleged illegal strike. Thus, even
assuming . . . that the strike was illegal, [the] automatic dismissal [of
CLUFEAs officers] had no basis."48
Thus, in the Resolution49 dated July 13, 2009, this court denied Club
Filipino, Inc.s Petition for Review on Certiorari.
On August 17, 2009, Club Filipino, Inc. filed a Motion for
Reconsideration,50 which this court denied with finality in the
Resolution51 dated September 9, 2009. This court declared that it shall
not entertain any further pleadings or motions and ordered that Entry of
Judgment in this case be made in due course.52
On September 14, 2009, Solis Medina Limpingco and Fajardo entered
its appearance for Club Filipino, Inc.53 and simultaneously filed a
Motion for Leave54 to file and admit the attached Supplemental Motion
for Reconsideration.55
On November 3, 2009, Club Filipino, Inc. filed its Motion for Leave to
File and Admit further Pleading/Motion,56alleging that this court failed to
consider its Supplemental Motion for Reconsideration in issuing its
September 9, 2009 Resolution denying Club Filipino, Inc.s first Motion
for Reconsideration. Club Filipino, Inc. prayed that this court resolve
the Supplemental Motion for Reconsideration.
In the Resolution57 dated January 11, 2010, this court granted Club
Filipino, Inc.s Motions for Leave and noted the Supplemental Motion
for Reconsideration.
However, because of this courts Resolution dated September 9, 2009,
an Entry of Judgment58 was issued on October 26, 2010, declaring that
this case had become final and executory as of October 26, 2009. This
court likewise ordered the return of the case records to the Court of
Appeals for remand to the court of origin.59
Club Filipino, Inc. received the Entry of Judgment on November 10,
2010.60 Nine (9) days after, Club Filipino, Inc. filed a Manifestation and
Motion,61 arguing that the court prematurely issued the Entry of
Judgment because it still had to resolve the Supplemental Motion for
Reconsideration.
This court noted the Manifestation and Motion in the Resolution62 dated
January 19, 2011. On October 18, 2011, Club Filipino, Inc. filed a very
urgent Motion to Resolve,63 alleging that respondents filed a Motion for
Execution of this courts Decision on the illegal strike case despite the
pendency of its Supplemental Motion for Reconsideration with this
court. Club Flipino, Inc. prayed that this court resolve the Supplemental
Motion for Reconsideration in order not to render the filing of its
Supplemental Motion for Reconsideration moot.
In the Resolution64 dated November 23, 2011, this court noted the very
urgent Motion to Resolve.
On March 23, 2012, Club Filipino, Inc. filed the very urgent Motion for
Leave to File and Admit very urgent Motion for Clarification.65 It
informed this court that the NLRC granted respondents Motion for
Execution, which would allegedly result in Club Filipino, Inc. paying
respondents separation pay twice. Because of the "extreme
urgency"66brought about by the developments in this case, Club
Filipino, Inc. prayed that this court resolve its Supplemental Motion for
Reconsideration.
On April 2, 2012, Club Filipino, Inc. filed a second very urgent Motion
for Clarification,67 pleading the court to clarify its January 11, 2010
Resolution noting the Supplemental Motion for Reconsideration. It
reiterated its claim that implementing the Writ of Execution in the illegal
strike case "will only result in doubly compensating respondents to the
utmost prejudice and manifest injustice of [Club Filipino, Inc.]."68
Club Filipino, Inc. subsequently filed the very urgent Manifestation and
Omnibus Motion,69 very urgent Omnibus Motion,70 and second very
urgent Omnibus Motion,71 all arguing that the implementation of the
Writ of Execution would result in double compensation to respondents.
All of these Motions were noted by this court.
In the Supplemental Motion for Reconsideration and the subsequent
Motions to Resolve, Club Filipino, Inc. maintains that this court erred in
affirming the Court of Appeals award of backwages and separation
pay in the illegal strike case on top of the separation pay respondents
received by virtue of Club Filipino, Inc.s retrenchment program.
Club Filipino, Inc. alleged that pending its Petition for declaration of
illegal strike with the NLRC, it implemented a retrenchment program to
minimize its "mounting losses."72 Among the 76 retrenched employees
were respondents.
Respondents, together with other retrenched employees, filed a
Complaint for illegal dismissal with the NLRC, questioning the validity
of the retrenchment program. In the Decision73 dated October 2, 2002,
Labor Arbiter Natividad M. Roma dismissed the Complaint and found
the retrenchment program valid. She ordered that the retrenched
employees, which included respondents, be paid their separation pay.
Labor Arbiter Natividad M. Romas Decision was affirmed by the NLRC
in the Decision dated February23, 2004. The NLRCs Decision became
final and executory on March 27, 2004. Considering that the NLRC had
finally resolved that respondents were not illegally dismissed and had
already ordered that respondents be paid separation pay under the
retrenchment program, Club Filipino, Inc. argues that the NLRCs
Resolution of the issue constituted res judicata as to bar the Court of
Appeals from declaring that respondents were illegally dismissed and
from awarding respondents separation pay in the illegal strike case.
The issues for our Resolution are:
(1) Whether Club Filipino, Inc.s filing of the Supplemental
Motion for Reconsideration prevented our Resolution dated
July 13, 2009 from becoming final and executory; and
(2) Whether the NLRCs Decision on the illegal dismissal
case was res judicata on the illegal strike case.
The Supplemental Motion for Reconsideration must be denied with
finality.
I
The filing of the Supplemental Motion for
Reconsideration did not prevent this
courts Resolution dated July 13, 2009
from becoming final and executory.
Petitioner Club Filipino, Inc.s Supplemental Motion for
Reconsideration of the Resolution dated July 13, 2009 is in the nature
of a second Motion for Reconsideration.
As a general rule, the filing of second Motions for Reconsideration of a
judgment or final resolution is prohibited. Rule 52, Section 2 of the
Rules of Court provides:
Section 2. Second motion for reconsideration. No second motion for
reconsideration of a judgment or final resolution by the same party
shall be entertained.
This prohibition is reiterated in Rule 15, Section 3 of the Internal Rules
of the Supreme Court: Section 3. Second motion for reconsideration.
The Court shall not entertain a second motion for reconsideration, and
any exception to this rule can only be granted in the higher interest of
justice by the Court en banc upon a vote of at least two-thirds of its
actual membership. There is reconsideration "in the higher interest of
justice" when the assailed decision is not only legally erroneous, but is
likewise patently unjust and potentially capable of causing unwarranted
and irremediable injury or damage to the parties. A second motion for
reconsideration can only be entertained before the ruling sought to be
reconsidered becomes final by operation of law or by the Courts
declaration.
In the Division, a vote of three Members shall be required to elevate a
second motion for reconsideration to the Court En Banc.
For this court to entertain second Motions for Reconsideration, the
second Motions must present "extraordinarily persuasive reasons and
only upon express leave first obtained."74 Once leave to file is granted,
the second Motion for Reconsideration is no longer prohibited. 75
This court explained the rationale for the rule in Ortigas and Company
Limited Partnership v. Judge Velasco,76thus:
A second motion for reconsideration is forbidden except for
extraordinarily persuasive reasons, and only upon express leave first
obtained. The propriety or acceptability of such a second motion for
reconsideration is not contingent upon the averment of "new" grounds
to assail the judgment, i.e., grounds other than those theretofore
presented and rejected. Otherwise, attainment of finality of a judgment
might be staved off indefinitely, depending on the party's
ingeniousness or cleverness in conceiving and formulating "additional
flaws" or "newly discovered errors" therein, or thinking up some injury
or prejudice to the rights of the movant for reconsideration. "Piece-
meal" impugnation of a judgment by successive motions for
reconsideration is anathema, being precluded by the salutary axiom
that a party seeking the setting aside of a judgment, act or proceeding
must set out in his motion all the grounds therefor, and those not so
included are deemed waived and cease to be available for subsequent
motions.
For all litigation must come to an end at some point, in accordance with
established rules of procedure and jurisprudence. As a matter of
practice and policy, courts must dispose of every case as promptly as
possible; and in fulfillment of their role in the administration of justice,
they should brook no delay in the termination of cases by stratagems
or maneuverings of parties or their lawyers.77
In the present case, this court granted leave to petitioner Club Filipino,
Inc. to file the Supplemental Motion for Reconsideration in the
Resolution dated January 11, 2010. The Supplemental Motion for
Reconsideration, therefore, is no longer prohibited.
The grant of leave to file the Supplemental Motion for Reconsideration,
however, did not prevent this courts July 13, 2009 Resolution from
becoming final and executory. A decision or resolution of this court is
deemed final and executory after the lapse of 15 days from the parties
receipt of a copy of the decision or resolution.78 The grant of leave to
file the second Motion for Reconsideration does not toll this 15-day
period. It only means that the Entry of Judgment first issued may be
lifted should the second Motion for Reconsideration be granted.79
In Aliviado v. Procter and Gamble Philippines, Inc.80 this court
explained that:
[i]t is immaterial that the Entry of Judgment was made without the
Court having first resolved P&Gs second motion for reconsideration.
This is because the issuance of the entry of judgment is reckoned from
the time the parties received a copy of the resolution denying the first
motion for reconsideration. The filing by P&G of several pleadings after
receipt of the resolution denying its first motion for reconsideration
does not in any way bar the finality or entry of judgment. Besides, to
reckon the finality of a judgment from receipt of the denial of the
second motion for reconsideration would be absurd. First, the Rules of
Court and the Internal Rules of the Supreme Court prohibit the filing of
a second motion for reconsideration. Second, some crafty litigants may
resort to filing prohibited pleadings just to delay entry of
judgment.81 (Underscoring in the original, emphasis supplied)
This case became final and executory on October 26, 2009, after the
lapse of the 15th day from petitioner Club Filipino, Inc.s receipt of the
Resolution denying its first Motion for Reconsideration. Entry of
Judgment, therefore, was in order.
Since this court did not issue any temporary restraining order to enjoin
the execution of the Court of Appeals Decision, the NLRC correctly
proceeded in implementing the Court of Appeals Decision in the illegal
strike case.
II
The NLRCs Decision on the illegal
dismissal case was not res judicata on the
illegal strike case.
Res judicata "literally means a matter adjudged; a thing judicially acted
upon or decided; [or] a thing or matter settled by judgment."82 Res
judicata" lays the rule that an existing final judgment or decree
rendered on the merits, and without fraud or collusion, by a court of
competent jurisdiction, upon any matter within its jurisdiction,is
conclusive of the rights of the parties or their privies, in all other actions
or suits in the same or any other judicial tribunal of concurrent
jurisdiction on the points and matters in issue in the first suit." 83
Res judicata has two (2) aspects. The first is bar by prior judgment that
precludes the prosecution of a second action upon the same claim,
demand or cause of action.84 The second aspect is conclusiveness of
judgment, which states that "issues actually and directly resolved in a
former suit cannot again be raised in any future case between the
same parties involving a different cause of action."85
The elements of res judicata are:
(1) the judgment sought to bar the new action must be final;
(2) the decision must have been rendered by a court having
jurisdiction over the subject matter and the parties;
(3) the disposition of the case must be a judgment on the
merits; and
(4) there must be as between the first and second action
identity of parties, subject matter, and causes of action.86
The first three (3) elements of res judicata are present in this case.
The NLRCs judgment on the illegal dismissal case is already final with
respondents not having appealed the Decision within the reglementary
period.
The Labor Arbiter, who has the exclusive original jurisdiction to hear,
try, and decide illegal dismissal cases,87decided the case. The Labor
Arbiters Decision was heard on appeal by the NLRC, which has
exclusive appellate jurisdiction over all cases decided by Labor
Arbiters.88
The Labor Arbiters judgment was on the merits. Based on the facts
89
presented by the parties, the Labor Arbiter ruled that petitioner Club
Filipino, Inc.s retrenchment program was valid.
The fourth element of res judicata, however, is absent. Although the
cases have substantially identical parties and subject matter of the
dismissal of respondents, the cause of action for declaration of illegal
strike and the cause of action for illegal dismissal are different.
A cause of action is "the act or omission by which a party violates the
rights of another."90 Its elements are:
1) a right in favor of the plaintiff by whatever means and
under whatever law it arises or is created;
2) an obligation on the part of the named defendant to
respect or not to violate such right; and 3) act or omission on
the part of such defendant in violation of the right of the
plaintiff or constituting a breach of the obligation of the
defendant to the plaintiff for which the latter may maintain an
action for recovery of damages or other appropriate relief.91
In an action for declaration of illegal strike, the cause of action is
premised on a union or a labor organizations conduct of a strike
without compliance with the statutory requirements. 92
On the other hand, in an action for illegal dismissal, the cause of action
is premised on an employers alleged dismissal of an employee without
a just or authorized cause as provided under Articles 282, 283, and
284 of the Labor Code.93
There is no res judicata in the present case. Petitioner Club Filipino,
Inc. filed the illegal strike because members of CLUFEA allegedly
disrupted petitioner Club Filipino, Inc.s business when they staged a
strike without complying with the requirements of the law. For their
part, respondents filed the illegal dismissal case to question the validity
of petitioner Club Filipino, Inc.s retrenchment program.
Although there is no res judicata, the actions have the same subject
matter.1wphi1 The subject matter of an action is "the matter or thing
from which the dispute has arisen."94 Both the illegal strike and illegal
dismissal cases involve the dismissal of respondents. In respondents
action for illegal dismissal, respondents were found to have been
dismissed by virtue of a valid retrenchment program. The NLRC then
ordered that they be paid separation pay based on the parties
collective bargaining agreement.
In petitioner Club Filipino, Inc.s action for declaration of illegal strike,
the Labor Arbiters finding that respondents conducted an illegal strike
resulted in their dismissal. Respondents were ordered to receive
separation pay "similar in terms with those offered to the employees
affected by the retrenchment program of the club."95 The Court of
Appeals, however, found that the Labor Arbiter gravely abused his
discretion in declaring the strike illegal. It then reversed the Labor
Arbiters Decision and awarded some of the respondents full
backwages, benefits, and separation pay.
Because of the cases similar subject matter, it was possible that an
employee who had already availed of the benefits under the
retrenchment program would be declared entitled to separation
benefits under the illegal strike case. This is true especially if the
retrenched employee did not execute a valid quitclaim upon receiving
the benefits under the retrenchment program.
Thus, to prevent double compensation, the Court of Appeals ordered
that those who already retired and received their benefits may no
longer claim full backwages, benefits, and separation pay under the
decision in the illegal strike case. This is with respect to respondents
Benjamin Bautista and Laureno Fegalquin who already executed their
quitclaims. The Court of Appeals said:
We agree in theory with the petitioners position that workers releases
and quitclaims are frowned upon and cannot simply be accepted at
face value. Jurisprudence however provides us guidance on when to
accept and when to reject workers releases and quitclaims. In the
present case where the recipients are responsible union officers who
have regularly acted in behalf of their members in the discharge of
their union duties and where there is no direct evidence of coercion or
vitiation of consent, we believe we can safely conclude that the
petitioners Bautista and Fegalquin fully knew that they entered into
when they accepted their retirement benefits and when they executed
their quitclaims. The Club (as well as the NLRC) is therefore correct in
their position that these petitioners no longer have any interest that can
serve as basis for their participation in the present petition.96(Citations
omitted)
With respect to respondent Carlito Presentacion who was not a union
officer and, therefore, could not have been dismissed under the illegal
strike case, the Court of Appeals held that he cannot receive benefits
under Court of Appeals Decision:
The same is true with respect to petitioner Carlito Presentacion who
does not appear to be covered by the assailed Labor Arbiter and
NLRC decisions because he was not a union officer and was not
dismissed under the assailed decisions, and who had sought redress
through a separately-filed case.97
For respondents who were not found to have executed a quitclaim with
respect to the benefits under the retrenchment program, the Court of
Appeals ruled that any benefits received" as a result of the decisions
[of the Labor Arbiter]"98 must be deducted from the separation pay
received under the illegal strike case. This is with respect to Ronie
Sualog, Joel Calida, Roberto de Guzman, and Johnny Arinto:
We grant the petition and declare the assailed decision null and void
with respect to petitioners Ronie Sualog, Joel Calida, Roberto de
Guzman and Johnny Arinto as the decision to dismiss them had been
attended by grave abuse of discretion on the part of the Labor Arbiter
and the NLRC as discussed above. In the exercise of our discretion,
however, we stop short of ordering the reinstatement of these
petitioners [sic] in light of their obviously strained relationship with the
Club resulting from the strike and in light as well of the restructuring of
the Clubs workforce since then. We confine our order therefore to the the Court of Appeals' Decision, there was no "double compensation"
payment of the petitioners full backwages and benefits from the time as petitioner Club Filipino, Inc. claims.
of their dismissal up the finality of this Decision, and to the payment of
petitioners' separation pay computed at one (1) month salary per year
All told, the Decision in the illegal dismissal case was not res judicata
of service from the time they were hired up to the finality of this
on the illegal strike case. The NLRC correctly executed the Court of
Decision. Any amount they might have received from the Club as a
Appeals' Decision in the illegal strike case. WHEREFORE, the
result of the decisions below can be deducted from the payments we
Supplemental Motion for Reconsideration is DENIED. No further
hereby find to be due them.99
pleadings shall be entertained in this case. The Entry of Judgment
issued in this case is AFFIRMED.
Since the Court of Appeals ordered that any benefit received from the
illegal dismissal case be deducted from any benefit receivable under
SO ORDERED