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G.R. No. 172013 October 2, 2009 the collective bargaining negotiations between the management and the
association, at the soonest possible time.
PATRICIA HALAGUEA, MA. ANGELITA L. PULIDO, MA. TERESITA P.
S A N T I A G O , M A R I A N N E V. K AT I N D I G , B E R N A D E T T E A . On July 29, 2004, petitioners filed a Special Civil Action for Declaratory
CABALQUINTO, LORNA B. TUGAS, MARY CHRISTINE A. VILLARETE, Relief with Prayer for the Issuance of Temporary Restraining Order and Writ
CYNTHIA A. STEHMEIER, ROSE ANNA G. VICTA, NOEMI R. of Preliminary Injunction7 with the Regional Trial Court (RTC) of Makati City,
CRESENCIO, and other flight attendants of PHILIPPINE Branch 147, docketed as Civil Case No. 04-886, against respondent for the
AIRLINES, Petitioners, invalidity of Section 144, Part A of the PAL-FASAP CBA. The RTC set a
vs. hearing on petitioners' application for a TRO and, thereafter, required the
PHILIPPINE AIRLINES INCORPORATED, Respondent. parties to submit their respective memoranda.
DECISION On August 9, 2004, the RTC issued an Order8 upholding its jurisdiction over
the present case. The RTC reasoned that:
PERALTA, J.:
In the instant case, the thrust of the Petition is Sec. 144 of the subject CBA
Before this Court is a petition for review on certiorari under Rule 45 of the
which is allegedly discriminatory as it discriminates against female flight
Rules of Court seeking to annul and set aside the Decision1 and the
attendants, in violation of the Constitution, the Labor Code, and the
Resolution2 of the Court of Appeals (CA) in CA-G.R. SP. No. 86813.
CEDAW. The allegations in the Petition do not make out a labor dispute
Petitioners were employed as female flight attendants of respondent arising from employer-employee relationship as none is shown to exist.
Philippine Airlines (PAL) on different dates prior to November 22, 1996. This case is not directed specifically against respondent arising from any
They are members of the Flight Attendants and Stewards Association of the act of the latter, nor does it involve a claim against the respondent. Rather,
Philippines (FASAP), a labor organization certified as the sole and this case seeks a declaration of the nullity of the questioned provision of the
exclusive certified as the sole and exclusive bargaining representative of CBA, which is within the Court's competence, with the allegations in the
the flight attendants, flight stewards and pursers of respondent. Petition constituting the bases for such relief sought.
On July 11, 2001, respondent and FASAP entered into a Collective The RTC issued a TRO on August 10, 2004,9 enjoining the respondent for
Bargaining Agreement3 incorporating the terms and conditions of their implementing Section 144, Part A of the PAL-FASAP CBA.
agreement for the years 2000 to 2005, hereinafter referred to as PAL-
The respondent filed an omnibus motion10 seeking reconsideration of the
FASAP CBA.
order overruling its objection to the jurisdiction of the RTC the lifting of the
Section 144, Part A of the PAL-FASAP CBA, provides that: TRO. It further prayed that the (1) petitioners' application for the issuance of
A. For the Cabin Attendants hired before 22 November 1996: a writ of preliminary injunction be denied; and (2) the petition be dismissed
or the proceedings in this case be suspended.
xxxx
On September 27, 2004, the RTC issued an Order11 directing the issuance
3. Compulsory Retirement of a writ of preliminary injunction enjoining the respondent or any of its
Subject to the grooming standards provisions of this Agreement, agents and representatives from further implementing Sec. 144, Part A of
compulsory retirement shall be fifty-five (55) for females and sixty (60) for the PAL-FASAP CBA pending the resolution of the case.
males. x x x. Aggrieved, respondent, on October 8, 2004, filed a Petition for Certiorari
2003,4
In a letter dated July 22, petitioners and several female cabin crews and Prohibition with Prayer for a Temporary Restraining Order and Writ of
manifested that the aforementioned CBA provision on compulsory Preliminary Injunction12 with the Court of Appeals (CA) praying that the
retirement is discriminatory, and demanded for an equal treatment with their order of the RTC, which denied its objection to its jurisdiction, be annuled
male counterparts. This demand was reiterated in a letter5 by petitioners' and set aside for having been issued without and/or with grave abuse of
counsel addressed to respondent demanding the removal of gender discretion amounting to lack of jurisdiction.
discrimination provisions in the coming re-negotiations of the PAL-FASAP The CA rendered a Decision, dated August 31, 2005, granting the
CBA. respondent's petition, and ruled that:
On July 12, 2004, Robert D. Anduiza, President of FASAP submitted their WHEREFORE, the respondent court is by us declared to have NO
2004-2005 CBA proposals6 and manifested their willingness to commence JURISDICTION OVER THE CASE BELOW and, consequently, all the
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proceedings, orders and processes it has so far issued therein are In the case at bar, the allegations in the petition for declaratory relief plainly
ANNULED and SET ASIDE. Respondent court is ordered to DISMISS its show that petitioners' cause of action is the annulment of Section 144, Part
Civil Case No. 04-886. A of the PAL-FASAP CBA. The pertinent portion of the petition recites:
SO ORDERED. CAUSE OF ACTION
Petitioner filed a motion for reconsideration,13 which was denied by the CA 24. Petitioners have the constitutional right to fundamental equality
in its Resolution dated March 7, 2006. with men under Section 14, Article II, 1987 of the Constitution and,
within the specific context of this case, with the male cabin
Hence, the instant petition assigning the following error:
attendants of Philippine Airlines.
THE COURT OF APPEALS' CONCLUSION THAT THE SUBJECT
26. Petitioners have the statutory right to equal work and
MATTER IS A LABOR DISPUTE OR GRIEVANCE IS CONTRARY TO LAW
employment opportunities with men under Article 3, Presidential
AND JURISPRUDENCE.
Decree No. 442, The Labor Code and, within the specific context of
The main issue in this case is whether the RTC has jurisdiction over the this case, with the male cabin attendants of Philippine Airlines.
petitioners' action challenging the legality or constitutionality of the
27. It is unlawful, even criminal, for an employer to discriminate
provisions on the compulsory retirement age contained in the CBA between
against women employees with respect to terms and conditions of
respondent PAL and FASAP.
employment solely on account of their sex under Article 135 of the
Petitioners submit that the RTC has jurisdiction in all civil actions in which Labor Code as amended by Republic Act No. 6725 or the Act
the subject of the litigation is incapable of pecuniary estimation and in all Strengthening Prohibition on Discrimination Against Women.
cases not within the exclusive jurisdiction of any court, tribunal, person or
28. This discrimination against Petitioners is likewise against the
body exercising judicial or quasi-judicial functions. The RTC has the power
Convention on the Elimination of All Forms of Discrimination
to adjudicate all controversies except those expressly witheld from the
Against Women (hereafter, "CEDAW"), a multilateral convention
plenary powers of the court. Accordingly, it has the power to decide issues
that the Philippines ratified in 1981. The Government and its
of constitutionality or legality of the provisions of Section 144, Part A of the
agents, including our courts, not only must condemn all forms of
PAL-FASAP CBA. As the issue involved is constitutional in character, the
discrimination against women, but must also implement measures
labor arbiter or the National Labor Relations Commission (NLRC) has no
towards its elimination.
jurisdiction over the case and, thus, the petitioners pray that judgment be
rendered on the merits declaring Section 144, Part A of the PAL-FASAP 29. This case is a matter of public interest not only because of
CBA null and void. Philippine Airlines' violation of the Constitution and existing laws,
but also because it highlights the fact that twenty-three years after
Respondent, on the other hand, alleges that the labor tribunals have
the Philippine Senate ratified the CEDAW, discrimination against
jurisdiction over the present case, as the controversy partakes of a labor
women continues.
dispute. The dispute concerns the terms and conditions of petitioners'
employment in PAL, specifically their retirement age. The RTC has no 31. Section 114, Part A of the PAL-FASAP 2000-20005 CBA on
jurisdiction over the subject matter of petitioners' petition for declaratory compulsory retirement from service is invidiously discriminatory
relief because the Voluntary Arbitrator or panel of Voluntary Arbitrators have against and manifestly prejudicial to Petitioners because, they are
original and exclusive jurisdiction to hear and decide all unresolved compelled to retire at a lower age (fifty-five (55) relative to their
grievances arising from the interpretation or implementation of the CBA. male counterparts (sixty (60).
Regular courts have no power to set and fix the terms and conditions of 33. There is no reasonable, much less lawful, basis for Philippine
employment. Finally, respondent alleged that petitioners' prayer before this Airlines to distinguish, differentiate or classify cabin attendants on
Court to resolve their petition for declaratory relief on the merits is the basis of sex and thereby arbitrarily set a lower compulsory
procedurally improper and baseless. retirement age of 55 for Petitioners for the sole reason that they are
The petition is meritorious. women.
Jurisdiction of the court is determined on the basis of the material 37. For being patently unconstitutional and unlawful, Section 114,
allegations of the complaint and the character of the relief prayed for Part A of the PAL-FASAP 2000-2005 CBA must be declared invalid
irrespective of whether plaintiff is entitled to such relief.14
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and stricken down to the extent that it discriminates against Thus, where the principal relief sought is to be resolved not by reference to
petitioner. the Labor Code or other labor relations statute or a collective bargaining
agreement but by the general civil law, the jurisdiction over the dispute
38. Accordingly, consistent with the constitutional and statutory
belongs to the regular courts of justice and not to the labor arbiter and the
guarantee of equality between men and women, Petitioners should
NLRC. In such situations, resolution of the dispute requires expertise, not in
be adjudged and declared entitled, like their male counterparts, to
labor management relations nor in wage structures and other terms and
work until they are sixty (60) years old.
conditions of employment, but rather in the application of the general civil
PRAYER law. Clearly, such claims fall outside the area of competence or expertise
WHEREFORE, it is most respectfully prayed that the Honorable Court: ordinarily ascribed to labor arbiters and the NLRC and the rationale for
granting jurisdiction over such claims to these agencies disappears.19
c. after trial on the merits:
If We divest the regular courts of jurisdiction over the case, then which
(I) declare Section 114, Part A of the PAL-FASAP 2000-2005 CBA INVALID, tribunal or forum shall determine the constitutionality or legality of the
NULL and VOID to the extent that it discriminates against Petitioners; x x x assailed CBA provision?
x
This Court holds that the grievance machinery and voluntary arbitrators do
From the petitioners' allegations and relief prayed for in its petition, it is not have the power to determine and settle the issues at hand. They have
clear that the issue raised is whether Section 144, Part A of the PAL-FASAP no jurisdiction and competence to decide constitutional issues relative to
CBA is unlawful and unconstitutional. Here, the petitioners' primary relief in the questioned compulsory retirement age. Their exercise of jurisdiction is
Civil Case No. 04-886 is the annulment of Section 144, Part A of the PAL- futile, as it is like vesting power to someone who cannot wield it.
FASAP CBA, which allegedly discriminates against them for being female
flight attendants. The subject of litigation is incapable of pecuniary In Gonzales v. Climax Mining Ltd.,20 this Court affirmed the jurisdiction of
estimation, exclusively cognizable by the RTC, pursuant to Section 19 (1) courts over questions on constitutionality of contracts, as the same involves
of Batas Pambansa Blg. 129, as amended.15 Being an ordinary civil action, the exercise of judicial power. The Court said:
the same is beyond the jurisdiction of labor tribunals. Whether the case involves void or voidable contracts is still a judicial
The said issue cannot be resolved solely by applying the Labor Code. question. It may, in some instances, involve questions of fact especially
Rather, it requires the application of the Constitution, labor statutes, law on with regard to the determination of the circumstances of the execution of
contracts and the Convention on the Elimination of All Forms of the contracts. But the resolution of the validity or voidness of the contracts
Discrimination Against Women,16 and the power to apply and interpret the remains a legal or judicial question as it requires the exercise of judicial
constitution and CEDAW is within the jurisdiction of trial courts, a court of function. It requires the ascertainment of what laws are applicable to the
general jurisdiction. In Georg Grotjahn GMBH & Co. v. Isnani,17 this Court dispute, the interpretation and application of those laws, and the rendering
held that not every dispute between an employer and employee involves of a judgment based thereon. Clearly, the dispute is not a mining conflict. It
matters that only labor arbiters and the NLRC can resolve in the exercise of is essentially judicial. The complaint was not merely for the determination of
their adjudicatory or quasi-judicial powers. The jurisdiction of labor arbiters rights under the mining contracts since the very validity of those contracts is
and the NLRC under Article 217 of the Labor Code is limited to disputes put in issue.
arising from an employer-employee relationship which can only be resolved In Saura v. Saura, Jr.,21 this Court emphasized the primacy of the regular
by reference to the Labor Code, other labor statutes, or their collective court's judicial power enshrined in the Constitution that is true that the trend
bargaining agreement. is towards vesting administrative bodies like the SEC with the power to
Not every controversy or money claim by an employee against the adjudicate matters coming under their particular specialization, to insure a
employer or vice-versa is within the exclusive jurisdiction of the labor more knowledgeable solution of the problems submitted to them. This
arbiter. Actions between employees and employer where the employer- would also relieve the regular courts of a substantial number of cases that
employee relationship is merely incidental and the cause of action would otherwise swell their already clogged dockets. But as expedient as
precedes from a different source of obligation is within the exclusive this policy may be, it should not deprive the courts of justice of their
jurisdiction of the regular court.18 Here, the employer-employee relationship power to decide ordinary cases in accordance with the general laws
between the parties is merely incidental and the cause of action ultimately that do not require any particular expertise or training to interpret and
arose from different sources of obligation, i.e., the Constitution and apply. Otherwise, the creeping take-over by the administrative
CEDAW. agencies of the judicial power vested in the courts would render the
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judiciary virtually impotent in the discharge of the duties assigned to members who were dismissed, on the other hand. The dispute has to be
it by the Constitution. settled before an impartial body. The grievance machinery with members
designated by the union and the company cannot be expected to be
To be sure, in Rivera v. Espiritu,22 after Philippine Airlines (PAL) and PAL
impartial against the dismissed employees. Due process demands that the
Employees Association (PALEA) entered into an agreement, which includes
dismissed workers grievances be ventilated before an impartial body. x x
the provision to suspend the PAL-PALEA CBA for 10 years, several
x.
employees questioned its validity via a petition for certiorari directly to the
Supreme Court. They said that the suspension was unconstitutional and Applying the same rationale to the case at bar, it cannot be said that the
contrary to public policy. Petitioners submit that the suspension was "dispute" is between the union and petitioner company because both have
inordinately long, way beyond the maximum statutory life of 5 years for a previously agreed upon the provision on "compulsory retirement" as
CBA provided for in Article 253-A of the Labor Code. By agreeing to a 10- embodied in the CBA. Also, it was only private respondent on his own who
year suspension, PALEA, in effect, abdicated the workers' constitutional questioned the compulsory retirement. x x x.
right to bargain for another CBA at the mandated time. In the same vein, the dispute in the case at bar is not between FASAP and
In that case, this Court denied the petition for certiorari, ruling that there is respondent PAL, who have both previously agreed upon the provision on
available to petitioners a plain, speedy, and adequate remedy in the the compulsory retirement of female flight attendants as embodied in the
ordinary course of law. The Court said that while the petition was CBA. The dispute is between respondent PAL and several female flight
denominated as one for certiorari and prohibition, its object was actually the attendants who questioned the provision on compulsory retirement of
nullification of the PAL-PALEA agreement. As such, petitioners' proper female flight attendants. Thus, applying the principle in the aforementioned
remedy is an ordinary civil action for annulment of contract, an action which case cited, referral to the grievance machinery and voluntary arbitration
properly falls under the jurisdiction of the regional trial courts. would not serve the interest of the petitioners.
The change in the terms and conditions of employment, should Section 144 Besides, a referral of the case to the grievance machinery and to the
of the CBA be held invalid, is but a necessary and unavoidable voluntary arbitrator under the CBA would be futile because respondent
consequence of the principal relief sought, i.e., nullification of the alleged already implemented Section 114, Part A of PAL-FASAP CBA when several
discriminatory provision in the CBA. Thus, it does not necessarily follow of its female flight attendants reached the compulsory retirement age of 55.
that a resolution of controversy that would bring about a change in the Further, FASAP, in a letter dated July 12, 2004, addressed to PAL,
terms and conditions of employment is a labor dispute, cognizable by labor submitted its association's bargaining proposal for the remaining period of
tribunals. It is unfair to preclude petitioners from invoking the trial court's 2004-2005 of the PAL-FASAP CBA, which includes the renegotiation of the
jurisdiction merely because it may eventually result into a change of the subject Section 144. However, FASAP's attempt to change the questioned
terms and conditions of employment. Along that line, the trial court is not provision was shallow and superficial, to say the least, because it exerted
asked to set and fix the terms and conditions of employment, but is called no further efforts to pursue its proposal. When petitioners in their individual
upon to determine whether CBA is consistent with the laws. capacities questioned the legality of the compulsory retirement in the CBA
Although the CBA provides for a procedure for the adjustment of before the trial court, there was no showing that FASAP, as their
grievances, such referral to the grievance machinery and thereafter to representative, endeavored to adjust, settle or negotiate with PAL for the
voluntary arbitration would be inappropriate to the petitioners, because the removal of the difference in compulsory age retirement between its female
union and the management have unanimously agreed to the terms of the and male flight attendants, particularly those employed before November
CBA and their interest is unified. 22, 1996. Without FASAP's active participation on behalf of its female flight
attendants, the utilization of the grievance machinery or voluntary
In Pantranco North Express, Inc., v. NLRC,23 this Court held that:
arbitration would be pointless.
x x x Hence, only disputes involving the union and the company shall be
The trial court in this case is not asked to interpret Section 144, Part A of
referred to the grievance machinery or voluntary arbitrators.
the PAL-FASAP CBA. Interpretation, as defined in Black's Law Dictionary,
In the instant case, both the union and the company are united or have is the art of or process of discovering and ascertaining the meaning of a
come to an agreement regarding the dismissal of private respondents. No statute, will, contract, or other written document.24 The provision regarding
grievance between them exists which could be brought to a grievance the compulsory retirement of flight attendants is not ambiguous and does
machinery. The problem or dispute in the present case is between the not require interpretation. Neither is there any question regarding the
union and the company on the one hand and some union and non-union implementation of the subject CBA provision, because the manner of
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implementing the same is clear in itself. The only controversy lies in its The question as to whether said Section 114, Part A of the PAL-FASAP
intrinsic validity. CBA is discriminatory or not is a question of fact. This would require the
presentation and reception of evidence by the parties in order for the trial
Although it is a rule that a contract freely entered between the parties
court to ascertain the facts of the case and whether said provision violates
should be respected, since a contract is the law between the parties, said
the Constitution, statutes and treaties. A full-blown trial is necessary, which
rule is not absolute.
jurisdiction to hear the same is properly lodged with the the RTC.
In Pakistan International Airlines Corporation v. Ople,25 this Court held that: Therefore, a remand of this case to the RTC for the proper determination of
The principle of party autonomy in contracts is not, however, an absolute the merits of the petition for declaratory relief is just and proper.1avvphi1
principle. The rule in Article 1306, of our Civil Code is that the contracting WHEREFORE, the petition is PARTLY GRANTED. The Decision and
parties may establish such stipulations as they may deem convenient, Resolution of the Court of Appeals, dated August 31, 2005 and March 7,
"provided they are not contrary to law, morals, good customs, public order 2006, respectively, in CA-G.R. SP. No. 86813 are REVERSED and SET
or public policy." Thus, counter-balancing the principle of autonomy of ASIDE. The Regional Trial Court of Makati City, Branch 147 is DIRECTED
contracting parties is the equally general rule that provisions of applicable to continue the proceedings in Civil Case No. 04-886 with deliberate
law, especially provisions relating to matters affected with public policy, are dispatch.
deemed written into the contract. Put a little differently, the governing
SO ORDERED.
principle is that parties may not contract away applicable provisions of law
especially peremptory provisions dealing with matters heavily impressed
with public interest. The law relating to labor and employment is clearly
such an area and parties are not at liberty to insulate themselves and their
relationships from the impact of labor laws and regulations by simply
contracting with each other.
Moreover, the relations between capital and labor are not merely
contractual. They are so impressed with public interest that labor contracts
must yield to the common good.x x x 26 The supremacy of the law over
contracts is explained by the fact that labor contracts are not ordinary
contracts; these are imbued with public interest and therefore are subject to
the police power of the state.27 It should not be taken to mean that
retirement provisions agreed upon in the CBA are absolutely beyond the
ambit of judicial review and nullification. A CBA, as a labor contract, is not
merely contractual in nature but impressed with public interest. If the
retirement provisions in the CBA run contrary to law, public morals, or
public policy, such provisions may very well be voided.28
Finally, the issue in the petition for certiorari brought before the CA by the
respondent was the alleged exercise of grave abuse of discretion of the
RTC in taking cognizance of the case for declaratory relief. When the CA
annuled and set aside the RTC's order, petitioners sought relief before this
Court through the instant petition for review under Rule 45. A perusal of the
petition before Us, petitioners pray for the declaration of the alleged
discriminatory provision in the CBA against its female flight attendants.
This Court is not persuaded. The rule is settled that pure questions of fact
may not be the proper subject of an appeal by certiorari under Rule 45 of
the Revised Rules of Court. This mode of appeal is generally limited only to
questions of law which must be distinctly set forth in the petition. The
Supreme Court is not a trier of facts.29
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G.R. No. 112139 January 31, 2000 rate adjustment payable by defendant amounted to P462,346.25.
Defendant opposed the Complaint by raising the following
L A PA N D AY A G R I C U LT U R A L DEVELOPMENT
defenses: (1) the rate adjustment is the obligation of the plaintiff as
CORPORATION, petitioner,
employer of the security guards; (2) assuming its liability, the sum it
vs.
should pay is less in amount; and (3) the Wage Orders violate the
THE HONORABLE COURT OF APPEALS (Former Eighth Division) and
impairment clause of the Constitution.
COMMANDO SECURITY SERVICE AGENCY, INC., respondents.
The trial court decided in favor of the plaintiff. It held:
GONZAGA-REYES, J.:
xxx xxx xxx
Before us is a Petition for Review on Certiorari of the decision1 of the Court
of Appeals2 in CA-G.R. CV No. 33893 entitled COMMANDO SECURITY However, in order for the security agency to pay the security
SERVICE AGENCY, INCORPORATED vs. LAPANDAY AGRICULTURAL guards, the Wage Orders made specific provisions to amend
DEVELOPMENT CORPORATION which affirmed the decision3 of the existing contracts for security services by allowing the adjustment
Regional Trial Court, 11th Judicial Region, Branch 9, Davao City in Civil of the consideration paid by the principal to the security agency
Case No. 19203-88. concerned. (Eagle Security Agency, Inc. vs. NLRC, Phil.
Tuberculosis Society, Inc. vs. NLRC, et al., May 18, 1989).
The pertinent facts as found by the Court of Appeals are as follows:
1wphi1.nt
The evidence shows that in June 1986, plaintiff Commando
The Wage Orders require the amendment of the contract as to the
Security Service Agency, Inc., and defendant Lapanday Agricultural
consideration to cover the service contractor's payment of the
Development Corporation entered into a Guard Service Contract.
increases mandated. However, in the case at bar, the contract for
Plaintiff provided security guards in defendant's banana plantation.
security services had earlier been terminated without the
The contract called for the payment to a guard of P754.28 on a
corresponding amendment. Plaintiff now demands adjustment in
daily 8-hour basis and an additional P565.72 for a four hour
the contract price as the same was deemed amended by Wage
overtime while the shift-in-charge was to be paid P811.40 on a
Order Nos. 5 and 6.
daily 8-hour basis and P808.60 for the 4-hour overtime.
Before the plaintiff could pay the minimum wage as mandated by
Wage Orders increasing the minimum wage in 1983 were complied
law, adjustments must be paid by the principal to the security
with by the defendant. On June 16, 1984, Wage Order No. 5 was
agency concerned.
promulgated directing an increase of P3.00 per day on the
minimum wage of workers in the private sector and a P5.00 Given these circumstances, if PTS pays the security
increase on the ECOLA. This was followed on November 1, 1984 guards, it cannot claim reimbursements from Eagle. But if
by Wage Order No. 6 which further increased said minimum wage its Eagle that pays them, the latter can claim
by P3.00 on the ECOLA. Both Wage Orders contain the following reimbursement from PTS in lieu of an adjustment,
provision: considering that the contract had expired and had not been
renewed. (Eagle Security Agency vs. NLRC and Phil.
"In the case of contract for construction projects and for
Tuberculosis Society, Inc. vs. NLRC, et al., 18 May 1989).
security, janitorial and similar services, the increase in the
minimum wage and allowances rates of the workers shall "As to the issue that Wage Orders Nos. 5 and 6 constitute
be borne by the principal or client of the construction/ impairments of contracts in violation of constitutional guarantees,
service contractor and the contracts shall be deemed the High Court ruled" The Supreme Court has rejected the
amended accordingly, subject to the provisions of Sec. 3 impairment of contract argument in sustaining the validity and
(b) of this order" (Sec. 6 and Sec. 9, Wage Orders No. 5 constitutionality of labor and social legislation like the Blue Sunday
and 6, respectively). Law, compulsory coverage of private sector employees in the
Social Security System, and the abolition of share tenancy enacted
Plaintiff demanded that its Guard Service Contract with defendant
pursuant to the police power of the state (Eagle Security Agency,
be upgraded in compliance with Wage Order Nos. 5 and 6.
Inc. vs. National Labor Relation Commission and Phil. Tuberculosis
Defendant refused. Their Contract expired on June 6, 1986 without
Society, Inc. vs. NLRC, et al., May 18, 1989).
the rate adjustment called for Wage Order Nos. 5 and 6 being
implemented. By the time of the filing of plaintiff's Complaint, the
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Petitioner's motion for reconsideration was denied;4 hence this petition wages and ECOLA are due to private respondent and not to the security
where petitioner cites the following grounds to support the instant petition guards who are not parties to the said contract. It is therefore immaterial
for review: whether or not private respondent paid its security guards their wages as
adjusted by said Wage Orders and that since the forty-two (42) security
1. THE WAGE INCREASES PROVIDED FOR IN THE WAGE
guards are not parties to the Guard Service Contract, there is no need for
ORDERS WERE DUE TO THE GUARDS AND NOT THE
them to authorize the filing of, or be joined in, this suit.
SECURITY AGENCY;
As regards the award to private respondent of the amount of P115,585.31
2. A SECURITY AGENCY WHO DID NOT PAY WAGE INCREASE
as attorney's fees, private respondent maintains that there is enough
TO ITS GUARDS IT HAD ALREADY TERMINATED AND
evidence and/or basis for the grant thereof, considering that the adamant
WITHOUT THEIR AUTHORIZATION CANNOT INSTITUTE AN
attitude of the petitioner (in implementing the questioned Wage Orders)
ACTION TO RECOVER SAID WAGE INCREASE FOR ITS
compelled the herein private respondent, to litigate in court. Furthermore,
BENEFIT;
since the legal fee payable by private respondent to its counsel is
3. IN THE ABSENCE OF BAD FAITH AND WITHOUT THE TRIAL essentially on contingent basis, the amount of P115,583.31 granted by the
COURT CORRECTLY ESTABLISHING THE BASIS FOR trial court which is 25% of the total claim is not unconscionable.
ATTORNEY'S FEES, THE SAME MAY NOT BE AWARDED.
As regards the jurisdiction of the RTC, private respondent alleges that the
4. THE NATIONAL LABOR RELATIONS (SIC) IS THE PROPER suit filed before the trial court is for the purpose of securing the upgrading
FORUM THAT HAS THE JURISDICTION TO RESOLVE THE of the Guard Service Contract entered into by herein petitioner and private
ISSUE OF WHETHER OR NOT THE PETITIONER IS LIABLE TO respondent in June 1983. The enforcement of this written contract does not
PAY T H E P R I VAT E R E S P O N D E N T T H E WA G E A N D fall under the jurisdiction of the NLRC because the money claims involved
ALLOWANCE INCREASES MANDATED UNDER WAGE ORDER therein did not arise from employer-employee relations between the parties
NOS. 5 AND 6.5 and is intrinsically a civil dispute. Thus, jurisdiction lies with the regular
Reiterating its position below, petitioner asserts that private respondent has courts. Private respondent further contends that petitioner is estopped or
no factual and legal basis to collect the benefits under subject Wage Order barred from raising the question of jurisdiction for the first time before the
Nos. 5 and 6 intended for the security guards without the authorization of Supreme Court after having voluntarily submitted to the jurisdiction of the
the security guards concerned. Inasmuch as the services of the forty-two regular courts below and having lost its case therein.7
(42) security guards were already terminated at the time the complaint was We resolve to grant the petition.
filed on August 15, 1988, private respondent's complaint partakes of the
We resolve first the issue of jurisdiction. We agree with the respondent that
nature of an action for recovery of what was supposedly due the guards
the RTC has jurisdiction over the subject matter of the present case. It is
under said Wage Orders, amounts that they claim were never paid by
well settled in law and jurisprudence that where no employer-employee
private respondent and therefore not collectible by the latter from the
relationship exists between the parties and no issue is involved which may
petitioner. Petitioner also assails the award of attorney's fees in the amount
be resolved by reference to the Labor Code, other labor statutes or any
of P115,585.31 or 25% of the total adjustment claim of P462,341.25 for lack
collective bargaining agreement, it is the Regional Trial Court that has
of basis and for being unconscionable.
jurisdiction.8 In its complaint, private respondent is not seeking any relief
Moreover, petitioner submits that it is the National Labor Relations under the Labor Code but seeks payment of a sum of money and damages
Commission (NLRC) and not the civil courts that has jurisdiction to resolve on account of petitioner's alleged breach of its obligation under their Guard
the issue involved in this case for it refers to the enforcement of wage Service Contract. The action is within the realm of civil law hence
adjustment and other benefits due to private respondent's security guards jurisdiction over the case belongs to the regular courts.9 While the
mandated under Wage Order Nos. 5 and 6. Considering that the RTC has resolution of the issue involves the application of labor laws, reference to
no jurisdiction, its decision is without force and effect.6 the labor code was only for the determination of the solidary liability of the
On the other hand, private respondent contends that the basis of its action petitioner to the respondent where no employer-employee relation exists.
against petitioner-appellant is the enforcement of the Guard Service Article 217 of the Labor Code as amended vests upon the labor arbiters
Contract entered into by them, which is deemed amended by Section 6 of exclusive original jurisdiction only over the following:
Wage Order No. 5 and Section 9 of Wage Order No. 6; that pursuant to 1. Unfair labor practices;
their amended Guard Service Contract, the increases/adjustments in
2. Termination disputes;
Page 8 of 52 | LABREL 4E | FT CASES B1

3. If accompanied with a claim for reinstatement, those cases that with an independent contractor for the performance of any work,
workers may file involving wages, rates of pay, hours of work and task, job or project.
other terms and conditions of employment; It will be seen from the above provisions that the principal (petitioner) and
4. Claims for actual, moral exemplary and other form of damages the contractor (respondent) are jointly and severally liable to the employees
arising from employer-employee relations; f o r t h e i r w a g e s . T h i s C o u r t h e l d i n E a g l e S e c u r i t y,
Inc. vs. NLRC 13 and Spartan Security and Detective Agency,
5. Cases arising from any violation of Article 264 of this Code,
Inc. vs. NLRC 14 that the joint and several liability of the contractor and the
including questions involving legality of strikes and lockouts; and
principal is mandated by the Labor Code to assure compliance with the
6. Except claims for Employees Compensation, Social Security, provisions therein including the minimum wage. The contractor is made
Medicare and maternity benefits, all other claims, arising from liable by virtue of his status as direct employer. The principal, on the other
employer-employee relations, including those of persons in hand, is made the indirect employer of the contractor's employees to
domestic or household service, involving an amount exceeding five secure payment of their wages should the contractor be unable to pay
thousand pesos (P5,000.00) regardless of whether accompanied them.15 Even in the absence of an employer-employee relationship, the law
with a claim for reinstatement. itself establishes one between the principal and the employees of the
In all these cases, an employer-employee relationship is an indispensable agency for a limited purpose i.e. in order to ensure that the employees are
jurisdictional requisite;10 and there is none in this case. paid the wages due them. In the above-mentioned cases, the solidary
liability of the principal and contractor was held to apply to the
On the merits, the core issue involved in the present petition is whether or aforementioned Wage Order Nos. 5 and 6.16 In ruling that under the Wage
not petitioner is liable to the private respondent for the wage adjustments Orders, existing security guard services contracts are amended to allow
provided under Wage Order Nos. 5 and 6 and for attorney's fees. adjustment of the consideration in order to cover payment of mandated
Private respondent admits that there is no employer-employee relationship increases, and that the principal is ultimately liable for the said increases,
between it and the petitioner. The private respondent is an independent/job this Court stated:
contractor11 who assigned security guards at the petitioner's premises for a The Wage Orders are explicit that payment of the increases are "to
stipulated amount per guard per month. The Contract of Security Services be borne" by the principal or client. "To be borne", however, does
expressly stipulated that the security guards are employees of the Agency not mean that the principal, PTSI in this case, would directly pay
and not of the petitioner.12 Articles 106 and 107 of the Labor Code provides the security guards the wage and allowance increases because
the rule governing the payment of wages of employees in the event that the there is no privity of contract between them. The security guards'
contractor fails to pay such wages as follows: contractual relationship is with their immediate employer, EAGLE.
Art. 106. Contractor or sub contractor. Whenever an employer As an employer, EAGLE is tasked, among others, with the payment
enters into a contract with another person for the performance of of their wages [See Article VII Sec. 3 of the Contract for Security
the former's work, the employees of the contractor and of the Services, supraand Bautista vs. Inciong, G.R. No. 52824, March
latter's subcontractor, if any, shall be paid in accordance with the 16, 1988, 158 SCRA 665].
provisions of this Code. On the other hand, there existed a contractual agreement between
In the event that the contractor or subcontractor fails to pay the PTSI and EAGLE wherein the former availed of the security
wages of his employees in accordance with this Code, the services provided by the latter. In return, the security agency
employer shall be jointly and severally liable with his contractor or collects from its client payment for its security services. This
subcontractor to such employees to the extent of the work payment covers the wages for the security guards and also
performed under the contract, in the same manner and extent that expenses for their supervision and training, the guards bonds,
he is liable to employees directly employed by him. firearms with ammunitions, uniforms and other equipments,
accessories, tools, materials and supplies necessary for the
xxx xxx xxx maintenance of a security force.
Art. 107. Indirect employer. The provisions of the immediately Premises considered, the security guards' immediate recourse for
preceding Article shall likewise apply to any person, partnership, the payment of the increases is with their direct employer, EAGLE.
association or corporation which, not being an employer, contracts However, in order for the security agency to comply with the new
Page 9 of 52 | LABREL 4E | FT CASES B1

wage and allowance rates it has to pay the security guards, the respondent has not actually paid the security guards the wage increases
Wage Orders made specific provision to amend existing contracts granted under the Wage Orders in question. Neither is it alleged that there
for security services by allowing the adjustment of the is an extant claim for such wage adjustments from the security guards
consideration paid by the principal to the security agency concerned, whose services have already been terminated by the
concerned. What the Wage Orders require, therefore, is the contractor. Accordingly, private respondent has no cause of action against
amendment of the contracts as to the consideration to cover the petitioner to recover the wage increases. Needless to stress, the increases
service contractors' payment of the increases mandated. In the in wages are intended for the benefit of the laborers and the contractor may
end, therefore, ultimate liability for the payment of the increases not assert a claim against the principal for salary wage adjustments that it
rests with the principal. has not actually paid. Otherwise, as correctly put by the respondent, the
contractor would be unduly enriching itself by recovering wage increases,
In view of the foregoing, the security guards should claim the
for its own benefit.
amount of the increases from EAGLE. Under the Labor Code, in
case the agency fails to pay them the amounts claimed, PTSI Finally, considering that the private respondent has no cause of action
should be held solidarily liable with EAGLE [Articles 106, 107 and against the petitioner, private respondent is not entitled to attorney's fees.
109]. Should EAGLE pay, it can claim an adjustment from PTSI for 1wphi1.nt
an increase in consideration to cover the increases payable to the WHEREFORE, the petition is GRANTED. The decision of the Court of
security guards.17 Appeals dated May 24, 1993 is REVERSED and SET ASIDE. The
It is clear also from the foregoing that it is only when contractor pays the complaint of private respondent COMMANDO SECURITY SERVICE
increases mandated that it can claim an adjustment from the principal to AGENCY, INC. is hereby DISMISSED.
cover the increases payable to the security guards. The conclusion that the SO ORDERED.
right of the contractor (as principal debtor) to recover from the principal as
solidary co-debtor) arises only if he has paid the amounts for which both of
them are jointly and severally liable is in line with Article 1217 of the Civil
Code which provides:
Art. 1217. Payment made by one of the solidary debtors
extinguishes the obligation. If two or more solidary debtors offer to
pay, the creditor may choose which offer to accept.
He who made payment may claim from his codebtors only the
share which corresponds to each, with interest for the payment
already made. If the payment is made before the debt is due, no
interest for the intervening period may be demanded. . . .
Pursuant to the above provision, the right of reimbursement from a co-
debtor is recognized in favor of the one who paid.
It will be seen that the liability of the petitioner to reimburse the respondent
only arises if and when respondent actually pays its employees the
increases granted by Wage Order Nos. 5 and 6. Payment, which means not
only the delivery of money but also the performance, in any other manner,
of the obligation,18 is the operative fact which will entitle either of the
solidary debtors to seek reimbursement for the share which corresponds to
each of the debtors.
The records show that judgment was rendered by Labor Arbiter Newton R.
Sancho holding both petitioner and private respondent jointly and solidarily
liable to the security guards in a Decision19 dated October 17, 1986 (NLRC
Case No. 2849-MC-XI-86).20 However, it is not disputed that the private
Page 10 of 52 | LABREL 4E | FT CASES B1

G.R. No. 182295 June 26, 2013 On 17 September 1997, petitioner corporation filed its Position Paper in the
NCMB arbitration case.11 It denied that respondent was terminated from
7K CORPORATION, Petitioner,
work, much less illegally dismissed. The corporation claimed that he had
vs.
voluntarily stopped reporting for work after receiving a verbal reprimand for
EDDIE ALBARICO, Respondent.
his sales performance; hence, it was he who was guilty of abandonment of
DECISION employment. Respondent made an oral manifestation that he was adopting
SERENO, CJ.: the position paper he submitted to the labor arbiter, a position paper in
which the former claimed that he had been illegally dismissed.12
This is a Petition for Review on Certiorari filed under Rule 45 of the Revised
Rules of Court, asking the Court to determine whether a voluntary arbitrator On 12 January 2005, almost 12 years after the filing of the NCMB case,
in a labor dispute exceeded his jurisdiction in deciding issues not specified both parties appeared in a hearing before the NCMB.13 Respondent
in the submission agreement of the parties. It assails the Decision1 dated manifested that he was willing to settle the case amicably with petitioner
18 September 2007 and the Resolution2dated 17 March 2008 of the Court based on the decision of the labor arbiter ordering the payment of
of Appeals (CA).3 separation pay in lieu of reinstatement, backwages and attorneys fees. On
its part, petitioner made a counter-manifestation that it was likewise
FACTS amenable to settling the dispute. However, it was willing to pay only the
When he was dismissed on 5 April 1993, respondent Eddie Albarico separation pay and the sales commission according to the Submission
(Albarico) was a regular employee of petitioner 7K Corporation, a company Agreement dated 19 April 1993.14
selling water purifiers. He started working for the company in 1990 as a The factual findings of the voluntary arbitrator, as well as of the CA, are not
salesman.4Because of his good performance, his employment was clear on what happened afterwards. Even the records are bereft of
regularized. He was also promoted several times: from salesman, he was sufficient information.
promoted to senior sales representative and then to acting team field
supervisor. In 1992, he was awarded the Presidents Trophy for being one On 18 November 2005, the NCMB voluntary arbitrator rendered a Decision
of the companys top water purifier specialist distributors. finding petitioner corporation liable for illegal dismissal.15 The termination of
respondent Albarico, by reason of alleged poor performance, was found
In April of 1993, the chief operating officer of petitioner 7K Corporation invalid.16 The arbitrator explained that the promotions, increases in salary,
terminated Albaricos employment allegedly for his poor sales performance. and awards received by respondent belied the claim that the latter was
5 Respondent had to stop reporting for work, and he subsequently
performing poorly.17 It was also found that Albarico could not have
submitted his money claims against petitioner for arbitration before the abandoned his job, as the abandonment should have been clearly shown.
National Conciliation and Mediation Board (NCMB). The issue for voluntary Mere absence was not sufficient, according to the arbitrator, but must have
arbitration before the NCMB, according to the parties Submission been accompanied by overt acts pointing to the fact that the employee did
Agreement dated 19 April 1993, was whether respondent Albarico was not want to work anymore. It was noted that, in the present case, the
entitled to the payment of separation pay and the sales commission immediate filing of a complaint for illegal dismissal against the employer,
reserved for him by the corporation.6 with a prayer for reinstatement, showed that the employee was not
While the NCMB arbitration case was pending, respondent Albarico filed a abandoning his work. The voluntary arbitrator also found that Albarico was
Complaint against petitioner corporation with the Arbitration Branch of the dismissed from his work without due process.
National Labor Relations Commission (NLRC) for illegal dismissal with However, it was found that reinstatement was no longer possible because
money claims for overtime pay, holiday compensation, commission, and of the strained relationship of the parties.18 Thus, in lieu of reinstatement,
food and travelling allowances.7 The Complaint was decided by the labor the voluntary arbitrator ordered the corporation to pay separation pay for
arbiter in favor of respondent Albarico, who was awarded separation pay in two years at P4,456 for each year, or a total amount of P8,912.
lieu of reinstatement, backwages and attorneys fees.8
Additionally, in view of the finding that Albarico had been illegally dismissed,
On appeal by petitioner, the labor arbiters Decision was vacated by the the voluntary arbitrator also ruled that the former was entitled to backwages
NLRC for forum shopping on the part of respondent Albarico, because the in the amount of P90,804.19 Finally, the arbitrator awarded attorneys fees in
NCMB arbitration case was still pending.9 The NLRC Decision, which respondents favor, because he had been compelled to file an action for
explicitly stated that the dismissal was without prejudice to the pending illegal dismissal.20
NCMB arbitration case,10 became final after no appeal was taken.
Page 11 of 52 | LABREL 4E | FT CASES B1

Petitioner corporation subsequently appealed to the CA, imputing to the of whether accompanied with a claim for reinstatement. (Emphases
voluntary arbitrator grave abuse of discretion amounting to lack or excess supplied)
of jurisdiction for awarding backwages and attorneys fees to respondent Thus, although the general rule under the Labor Code gives the labor
Albarico based on the formers finding of illegal dismissal.21 The arbitrator arbiter exclusive and original jurisdiction over termination disputes, it also
contended that the issue of the legality of dismissal was not explicitly recognizes exceptions. One of the exceptions is provided in Article 262 of
included in the Submission Agreement dated 19 April 1993 filed for the Labor Code. In San Jose v. NLRC,25 we said:
voluntary arbitration and resolution. It prayed that the said awards be set
aside, and that only separation pay of P8,912.00 and sales commission The phrase "Except as otherwise provided under this Code" refers to the
of P4,787.60 be awarded. following exceptions:
The CA affirmed the Decision of the voluntary arbitrator, but eliminated the A. Art. 217. Jurisdiction of Labor Arbiters . . .
award of attorneys fees for having been made without factual, legal or xxxx
equitable justification.22 Petitioners Motion for Partial Reconsideration was
denied as well.23 (c) Cases arising from the interpretation or implementation of collective
bargaining agreement and those arising from the interpretation or
Hence, this Petition. enforcement of company procedure/policies shall be disposed of by the
ISSUE Labor Arbiter by referring the same to the grievance machinery and
voluntary arbitrator as may be provided in said agreement.
The issue before the Court is whether the CA committed reversible error in
finding that the voluntary arbitrator properly assumed jurisdiction to decide B. Art. 262. Jurisdiction over other labor disputes. The Voluntary Arbitrator
the issue of the legality of the dismissal of respondent as well as the latters or panel of Voluntary Arbitrators, upon agreement of the parties, shall also
entitlement to backwages, even if neither the legality nor the entitlement hear and decide all other labor disputes including unfair labor practices and
was expressedly claimed in the Submission Agreement of the parties. bargaining deadlocks. (Emphasis supplied)
The Petition is denied for being devoid of merit. We also said in the same case that "the labor disputes referred to in the
same Article 262 of the Labor Code can include all those disputes
DISCUSSION mentioned in Article 217 over which the Labor Arbiter has original and
Preliminarily, we address petitioners claim that under Article 217 of the exclusive jurisdiction."26
Labor Code, original and exclusive jurisdiction over termination disputes, From the above discussion, it is clear that voluntary arbitrators may, by
such as the present case, is lodged only with the labor arbiter of the NLRC.
24 agreement of the parties, assume jurisdiction over a termination dispute
such as the present case, contrary to the assertion of petitioner that they
Petitioner overlooks the proviso in the said article, thus: may not.
Art. 217. Jurisdiction of the Labor Arbiters and the Commission. We now resolve the main issue. Petitioner argues that, assuming that the
voluntary arbitrator has jurisdiction over the present termination dispute, the
a. Except as otherwise provided under this Code, the Labor Arbiters shall
latter should have limited his decision to the issue contained in the
have original and exclusive jurisdiction to hear and decide, within thirty (30)
Submission Agreement of the parties the issue of whether respondent
calendar days after the submission of the case by the parties for decision
Albarico was entitled to separation pay and to the sales commission the
without extension, even in the absence of stenographic notes, the following
latter earned before being terminated.27 Petitioner asserts that under Article
cases involving all workers, whether agricultural or nonagricultural:
262 of the Labor Code, the jurisdiction of a voluntary arbitrator is strictly
xxxx limited to the issues that the parties agree to submit. Thus, it contends that
2. Termination disputes; the voluntary arbitrator exceeded his jurisdiction when he resolved the
issues of the legality of the dismissal of respondent and the latters
xxxx entitlement to backwages on the basis of a finding of illegal dismissal.
6. Except claims for Employees Compensation, Social Security, Medicare According to petitioner, the CA wrongly concluded that the issue of
and maternity benefits, all other claims arising from employer-employee respondents entitlement to separation pay was necessarily based on his
relations, including those of persons in domestic or household service, allegation of illegal dismissal, thereby making the issue of the legality of his
involving an amount exceeding five thousand pesos (P5,000.00) regardless dismissal implicitly submitted to the voluntary arbitrator for resolution.
Page 12 of 52 | LABREL 4E | FT CASES B1
28 Petitioner argues that this was an erroneous conclusion, because shopping. Thus, it is now estopped from claiming that the issue before the
separation pay may in fact be awarded even in circumstances in which NCMB does not include the issue of the legality of the dismissal of
there is no illegal dismissal. respondent. Besides, there has to be a reason for deciding the issue of
respondents entitlement to separation pay. To think otherwise would lead to
We rule that although petitioner correctly contends that separation pay may
absurdity, because the voluntary arbitrator would then be deciding that
in fact be awarded for reasons other than illegal dismissal, the
issue in a vacuum. The arbitrator would have no basis whatsoever for
circumstances of the instant case lead to no other conclusion than that the
saying that Albarico was entitled to separation pay or not if the issue of the
claim of respondent Albarico for separation pay was premised on his
legality of respondents dismissal was not resolve first.
allegation of illegal dismissal. Thus, the voluntary arbitrator properly
assumed jurisdiction over the issue of the legality of his dismissal. Hence, the voluntary arbitrator correctly assumed that the core issue
behind the issue of separation pay is the legality of the dismissal of
True, under the Labor Code, separation pay may be given not only when
respondent. Moreover, we have ruled in Sime Darby Pilipinas, Inc. v.
there is illegal dismissal. In fact, it is also given to employees who are
Deputy Administrator Magsalin33 that a voluntary arbitrator has plenary
terminated for authorized causes, such as redundancy, retrenchment or
jurisdiction and authority to interpret an agreement to arbitrate and to
installation of labor-saving devices under Article 28329 of the Labor Code.
determine the scope of his own authority when the said agreement is vague
Additionally, jurisprudence holds that separation pay may also be awarded
subject only, in a proper case, to the certiorari jurisdiction of this Court.
for considerations of social justice, even if an employee has been
terminated for a just cause other than serious misconduct or an act Having established that the issue of the legality of dismissal of Albarico was
reflecting on moral character.30 The Court has also ruled that separation in fact necessarily albeit not explicitly included in the Submission
pay may be awarded if it has become an established practice of the Agreement signed by the parties, this Court rules that the voluntary
company to pay the said benefit to voluntarily resigning employees31 or to arbitrator rightly assumed jurisdiction to decide the said issue.
those validly dismissed for non-membership in a union as required in a Consequently, we also rule that the voluntary arbitrator may award
closed-shop agreement.32 backwages upon a finding of illegal dismissal, even though the issue of
The above circumstances, however, do not obtain in the present case. entitlement thereto is not explicitly claimed in the Submission Agreement.
1wphi1 There is no claim that the issue of entitlement to separation pay is Backwages, in general, are awarded on the ground of equity as a form of
being resolved in the context of any authorized cause of termination relief that restores the income lost by the terminated employee by reason of
undertaken by petitioner corporation. Neither is there any allegation that a his illegal dismissal.34
consideration of social justice is being resolved here. In fact, even in In Sime Darby we ruled that although the specific issue presented by the
instances in which separation pay is awarded in consideration of social parties to the voluntary arbitrator was only "the issue of performance
justice, the issue of the validity of the dismissal still needs to be resolved bonus," the latter had the authority to determine not only the issue of
first. Only when there is already a finding of a valid dismissal for a just whether or not a performance bonus was to be granted, but also the related
cause does the court then award separation pay for reason of social justice. question of the amount of the bonus, were it to be granted. We explained
The other circumstances when separation pay may be awarded are not that there was no indication at all that the parties to the arbitration
present in this case. agreement had regarded "the issue of performance bonus" as a two-tiered
The foregoing findings indisputably prove that the issue of separation pay issue, of which only one aspect was being submitted to arbitration. Thus,
emanates solely from respondents allegation of illegal dismissal. In fact, we held that the failure of the parties to limit the issues specifically to that
petitioner itself acknowledged the issue of illegal dismissal in its position which was stated allowed the arbitrator to assume jurisdiction over the
paper submitted to the NCMB. related issue.
Moreover, we note that even the NLRC was of the understanding that the Similarly, in the present case, there is no indication that the issue of illegal
NCMB arbitration case sought to resolve the issue of the legality of the dismissal should be treated. as a two-tiered issue whereupon entitlement to
dismissal of the respondent. In fact, the identity of the issue of the legality backwages must be determined separately. Besides, "since arbitration is a
of his dismissal, which was previously submitted to the NCMB, and later final resort for the adjudication of disputes," the voluntary arbitrator in the
submitted to the NLRC, was the basis of the latters finding of forum present case can assume that he has the necessary power to make a final
shopping and the consequent dismissal of the case before it. In fact, settlement.35 Thus, we rule that the voluntary arbitrator correctly assumed
petitioner also implicitly acknowledged this when it filed before the NLRC its jurisdiction over the issue of entitlement of respondent Albarico to
Motion to Dismiss respondents Complaint on the ground of forum backwages on the basis of the former's finding of illegal dismissal.
Page 13 of 52 | LABREL 4E | FT CASES B1

WHEREFORE, premises considered, the instant Petition is DENIED. The


18 September 2007 Decision and 17 March 2008 Resolution of the Court of
Appeals in CA-G.R. SP No. 92526, are hereby AFFIRMED.
SO ORDERED.
Page 14 of 52 | LABREL 4E | FT CASES B1

G.R. No. 179652 May 8, 2009 On the other hand, complainant Juezans alleged violation of non-
diminution of benefits is computed as follows:
PEOPLE'S BROADCASTING (BOMBO RADYO PHILS., INC.), Petitioner,
vs. @ P 2,000/15 days + 1.5 mos = P 6,000
THE SECRETARY OF THE DEPARTMENT OF LABOR AND (August 1/03 to Sept 15/03)
EMPLOYMENT, THE REGIONAL DIRECTOR, DOLE REGION VII, and
JANDELEON JUEZAN, Respondents. Note: Recommend for summary investigation or whatever action deem
proper.5
DECISION
Petitioner was required to rectify/restitute the violations within five (5) days
TINGA, J.: from receipt. No rectification was effected by petitioner; thus, summary
The present controversy concerns a matter of first impression, requiring as investigations were conducted, with the parties eventually ordered to
it does the determination of the demarcation line between the prerogative of submit their respective position papers.6
the Department of Labor and Employment (DOLE) Secretary and his duly In his Order dated 27 February 2004,7 DOLE Regional Director Atty.
authorized representatives, on the one hand, and the jurisdiction of the Rodolfo M. Sabulao (Regional Director) ruled that respondent is an
National Labor Relations Commission, on the other, under Article 128 (b) of employee of petitioner, and that the former is entitled to his money claims
the Labor Code in an instance where the employer has challenged the amounting to P203,726.30. Petitioner sought reconsideration of the Order,
jurisdiction of the DOLE at the very first level on the ground that no claiming that the Regional Director gave credence to the documents offered
employer-employee relationship ever existed between the parties. by respondent without examining the originals, but at the same time he
I. missed or failed to consider petitioners evidence. Petitioners motion for
reconsideration was denied.8 On appeal to the DOLE Secretary, petitioner
The instant petition for certiorari under Rule 65 assails the decision and the
denied once more the existence of employer-employee relationship. In its
resolution of the Court of Appeals dated 26 October 2006 and 26 June
Order dated 27 January 2005, the Acting DOLE Secretary dismissed the
2007, respectively, in C.A. G.R. CEB-SP No. 00855.1
appeal on the ground that petitioner did not post a cash or surety bond and
The petition traces its origins to a complaint filed by Jandeleon Juezan instead submitted a Deed of Assignment of Bank Deposit.9
(respondent) against Peoples Broadcasting Service, Inc. (Bombo Radyo
Petitioner elevated the case to the Court of Appeals, claiming that it was
Phils., Inc) (petitioner) for illegal deduction, non-payment of service
denied due process when the DOLE Secretary disregarded the evidence it
incentive leave, 13th month pay, premium pay for holiday and rest day and
presented and failed to give it the opportunity to refute the claims of
illegal diminution of benefits, delayed payment of wages and non-coverage
respondent. Petitioner maintained that there is no employer-employee
of SSS, PAG-IBIG and Philhealth before the Department of Labor and
relationship had ever existed between it and respondent because it was the
Employment (DOLE) Regional Office No. VII, Cebu City.2 On the basis of
drama directors and producers who paid, supervised and disciplined
the complaint, the DOLE conducted a plant level inspection on 23
respondent. It also added that the case was beyond the jurisdiction of the
September 2003. In the Inspection Report Form,3 the Labor Inspector wrote
DOLE and should have been considered by the labor arbiter because
under the heading "Findings/Recommendations" "non-diminution of
respondents claim exceeded P5,000.00.
benefits" and "Note: Respondent deny employer-employee relationship with
the complainant- see Notice of Inspection results." In the Notice of The Court of Appeals held that petitioner was not deprived of due process
Inspection Results4 also bearing the date 23 September 2003, the Labor as the essence thereof is only an opportunity to be heard, which petitioner
Inspector made the following notations: had when it filed a motion for reconsideration with the DOLE Secretary. It
further ruled that the latter had the power to order and enforce compliance
Management representative informed that complainant is a drama talent
with labor standard laws irrespective of the amount of individual claims
hired on a per drama " participation basis" hence no employer-
because the limitation imposed by Article 29 of the Labor Code had been
employeeship [sic] existed between them. As proof of this, management
repealed by Republic Act No. 7730.10 Petitioner sought reconsideration of
presented photocopies of cash vouchers, billing statement, employments of
the decision but its motion was denied.11
specific undertaking (a contract between the talent director & the
complainant), summary of billing of drama production etc. They (mgt.) has Before this Court, petitioner argues that the National Labor Relations
[sic] not control of the talent if he ventures into another contract w/ other Commission (NLRC), and not the DOLE Secretary, has jurisdiction over
broadcasting industries. respondents claim, in view of Articles 217 and 128 of the Labor Code.12 It
adds that the Court of Appeals committed grave abuse of discretion when it
Page 15 of 52 | LABREL 4E | FT CASES B1

dismissed petitioners appeal without delving on the issues raised therein, employer-employee still exists." It also underscores the avowed objective
particularly the claim that no employer-employee relationship had ever underlying the grant of power to the DOLE which is "to give effect to the
existed between petitioner and respondent. Finally, petitioner avers that labor standard provision of this Code and other labor legislation." Of
there is no appeal, or any plain, speedy and adequate remedy in the course, a persons entitlement to labor standard benefits under the labor
ordinary course of law available to it. laws presupposes the existence of employer-employee relationship in the
first place.
On the other hand, respondent posits that the Court of Appeals did not
abuse its discretion. He invokes Republic Act No. 7730, which "removes The clause "in cases where the relationship of employer-employee still
the jurisdiction of the Secretary of Labor and Employment or his duly exists" signifies that the employer-employee relationship must have existed
authorized representatives, from the effects of the restrictive provisions of even before the emergence of the controversy. Necessarily, the DOLEs
Article 129 and 217 of the Labor Code, regarding the confinement of power does not apply in two instances, namely: (a) where the employer-
jurisdiction based on the amount of claims."13 Respondent also claims that employee relationship has ceased; and (b) where no such relationship has
petitioner was not denied due process since even when the case was with ever existed.
the Regional Director, a hearing was conducted and pieces of evidence The first situation is categorically covered by Sec. 3, Rule 11 of the Rules
were presented. Respondent stands by the propriety of the Court of on the Disposition of Labor Standards Cases15 issued by the DOLE
Appeals ruling that there exists an employer-employee relationship Secretary. It reads:
between him and petitioner. Finally, respondent argues that the instant
petition for certiorari is a wrong mode of appeal considering that petitioner Rule II MONEY CLAIMS ARISING FROM COMPLAINT/ROUTINE
had earlier filed a Petition for Certiorari, Mandamus and Prohibition with the INSPECTION
Court of Appeals; petitioner, instead, should have filed a Petition for Sec. 3. Complaints where no employer-employee relationship actually
Review.14 exists. Where employer-employee relationship no longer exists by reason
II. of the fact that it has already been severed, claims for payment of monetary
benefits fall within the exclusive and original jurisdiction of the labor
The significance of this case may be reduced to one simple questiondoes arbiters. Accordingly, if on the face of the complaint, it can be ascertained
the Secretary of Labor have the power to determine the existence of an that employer-employee relationship no longer exists, the case, whether
employer-employee relationship? accompanied by an allegation of illegal dismissal, shall immediately be
To resolve this pivotal issue, one must look into the extent of the visitorial endorsed by the Regional Director to the appropriate branch of the National
and enforcement power of the DOLE found in Article 128 (b) of the Labor Labor Relations Commission (NLRC).
Code, as amended by Republic Act 7730. It reads: In the recent case of Bay Haven, Inc. v. Abuan,16 this Court recognized the
Article 128 (b) Notwithstanding the provisions of Articles 129 and 217 of this first situation and accordingly ruled that a complainants allegation of his
Code to the contrary, and in cases where the relationship of employer- illegal dismissal had deprived the DOLE of jurisdiction as per Article 217 of
employee still exists, the Secretary of Labor and Employment or his duly the Labor Code.17
authorized representatives shall have the power to issue compliance orders In the first situation, the claim has to be referred to the NLRC because it is
to give effect to the labor standards provisions of this Code and other labor the NLRC which has jurisdiction in view of the termination of the employer-
legislation based on the findings of labor employment and enforcement employee relationship. The same procedure has to be followed in the
officers or industrial safety engineers made in the course of inspection. The second situation since it is the NLRC that has jurisdiction in view of the
Secretary or his duly authorized representative shall issue writs of absence of employer-employee relationship between the evidentiary parties
execution to the appropriate authority for the enforcement of their orders, from the start.
except in cases where the employer contests the findings of the labor
employment and enforcement officer and raises issues supported by Clearly the law accords a prerogative to the NLRC over the claim when the
documentary proofs which were not considered in the course of inspection. employer-employee relationship has terminated or such relationship has
(emphasis supplied) not arisen at all. The reason is obvious. In the second situation especially,
the existence of an employer-employee relationship is a matter which is not
xxx easily determinable from an ordinary inspection, necessarily so, because
The provision is quite explicit that the visitorial and enforcement power of the elements of such a relationship are not verifiable from a mere ocular
the DOLE comes into play only "in cases when the relationship of examination. The intricacies and implications of an employer-employee
Page 16 of 52 | LABREL 4E | FT CASES B1

relationship demand that the level of scrutiny should be far above the collateral matter be or be not within the limits, yet, upon this preliminary
cursory and the mechanical. While documents, particularly documents question, its decision must always be open to inquiry in the superior court.18
found in the employers A more liberal interpretative mode, "pragmatic or functional analysis," has
office are the primary source materials, what may prove decisive are also emerged in ascertaining the jurisdictional boundaries of administrative
factors related to the history of the employers business operations, its agencies whose jurisdiction is established by statute. Under this approach,
current state as well as accepted contemporary practices in the industry. the Court examines the intended function of the tribunal and decides
More often than not, the question of employer-employee relationship whether a particular provision falls within or outside that function, rather
becomes a battle of evidence, the determination of which should be than making the provision itself the determining centerpiece of the analysis.
comprehensive and intensive and therefore best left to the specialized 19Yet even under this more expansive approach, the dissent fails.

quasi-judicial body that is the NLRC. A reading of Art. 128 of the Labor Code reveals that the Secretary of Labor
It can be assumed that the DOLE in the exercise of its visitorial and or his authorized representatives was granted visitorial and enforcement
enforcement power somehow has to make a determination of the existence powers for the purpose of determining violations of, and enforcing, the
of an employer-employee relationship. Such prerogatival determination, Labor Code and any labor law, wage order, or rules and regulations issued
however, cannot be coextensive with the visitorial and enforcement power pursuant thereto. Necessarily, the actual existence of an employer-
itself. Indeed, such determination is merely preliminary, incidental and employee relationship affects the complexion of the putative findings that
collateral to the DOLEs primary function of enforcing labor standards the Secretary of Labor may determine, since employees are entitled to a
provisions. The determination of the existence of employer-employee different set of rights under the Labor Code from the employer as opposed
relationship is still primarily lodged with the NLRC. This is the meaning of to non-employees. Among these differentiated rights are those accorded by
the clause "in cases where the relationship of employer-employee still the "labor standards" provisions of the Labor Code, which the Secretary of
exists" in Art. 128 (b). Labor is mandated to enforce. If there is no employer-employee
relationship in the first place, the duty of the employer to adhere to those
Thus, before the DOLE may exercise its powers under Article 128, two
labor standards with respect to the non-employees is questionable.
important questions must be resolved: (1) Does the employer-employee
relationship still exist, or alternatively, was there ever an employer- This decision should not be considered as placing an undue burden on the
employee relationship to speak of; and (2) Are there violations of the Labor Secretary of Labor in the exercise of visitorial and enforcement powers, nor
Code or of any labor law? seen as an unprecedented diminution of the same, but rather a recognition
of the statutory limitations thereon. A mere assertion of absence of
The existence of an employer-employee relationship is a statutory
employer-employee relationship does not deprive the DOLE of jurisdiction
prerequisite to and a limitation on the power of the Secretary of Labor, one
over the claim under Article 128 of the Labor Code. At least a prima facie
which the legislative branch is entitled to impose. The rationale underlying
showing of such absence of relationship, as in this case, is needed to
this limitation is to eliminate the prospect of competing conclusions of the
preclude the DOLE from the exercise of its power. The Secretary of Labor
Secretary of Labor and the NLRC, on a matter fraught with questions of fact
would not have been precluded from exercising the powers under Article
and law, which is best resolved by the quasi-judicial body, which is the
128 (b) over petitioner if another person with better-grounded claim of
NRLC, rather than an administrative official of the executive branch of the
employment than that which respondent had. Respondent, especially if he
government. If the Secretary of Labor proceeds to exercise his visitorial and
were an employee, could have very well enjoined other employees to
enforcement powers absent the first requisite, as the dissent proposes, his
complain with the DOLE, and, at the same time, petitioner could ill-afford to
office confers jurisdiction on itself which it cannot otherwise acquire.
disclaim an employment relationship with all of the people under its aegis.
The approach suggested by the dissent is frowned upon by common law.
Without a doubt, petitioner, since the inception of this case had been
To wit:
consistent in maintaining that respondent is not its employee. Certainly, a
[I]t is a general rule, that no court of limited jurisdiction can give itself preliminary determination, based on the evidence offered, and noted by the
jurisdiction by a wrong decision on a point collateral to the merits of the Labor Inspector during the inspection as well as submitted during the
case upon which the limit to its jurisdiction depends; and however its proceedings before the Regional Director puts in genuine doubt the
decision may be final on all particulars, making up together that subject existence of employer-employee relationship. From that point on, the
matter which, if true, is within its jurisdiction, and however necessary in prudent recourse on the part of the DOLE should have been to refer
many cases it may be for it to make a preliminary inquiry, whether some respondent to the NLRC for the proper dispensation of his claims.
Page 17 of 52 | LABREL 4E | FT CASES B1

Furthermore, as discussed earlier, even the evidence relied on by the interviewed other employees in the premises. After all, the labor inspector,
Regional Director in his order are mere self-serving declarations of as a labor regulation officer is given "access to employers records and
respondent, and hence cannot be relied upon as proof of employer- premises at any time of day or night whenever work is being undertaken
employee relationship. therein, and the right to copy therefrom, to question any employee and
investigate any fact, condition or matter which may be necessary to
III.
determine violations or which may aid in the enforcement of this Code and
Aside from lack of jurisdiction, there is another cogent reason to to set of any labor law, wage order or rules and regulations pursuant
aside the Regional Directors 27 February 2004 Order. A careful study of thereto."22 Despite these far-reaching powers of labor regulation officers,
the case reveals that the said Order, which found respondent as an records reveal that no additional efforts were exerted in the course of the
employee of petitioner and directed the payment of respondents money inspection.
claims, is not supported by substantial evidence, and was even made in
The Court further examined the records and discovered to its dismay that
disregard of the evidence on record.
even the Regional Director turned a blind eye to the evidence presented by
It is not enough that the evidence be simply considered. The standard is petitioner and relied instead on the self-serving claims of respondent.
substantial evidence as in all other quasi-judicial agencies. The standard
In his position paper, respondent claimed that he was hired by petitioner in
employed in the last sentence of Article 128(b) of the Labor Code that the
September 1996 as a radio talent/spinner, working from 8:00 am until 5
documentary proofs be "considered in the course of inspection" does not
p.m., six days a week, on a gross rate of P60.00 per script, earning an
apply. It applies only to issues other than the fundamental issue of
average of P15,0000.00 per month, payable on a semi-monthly basis. He
existence of employer-employee relationship. A contrary rule would lead to
added that the payment of wages was delayed; that he was not given any
controversies on the part of labor officials in resolving the issue of
service incentive leave or its monetary commutation, or his 13th month pay;
employer-employee relationship. The onset of arbitrariness is the advent of
and that he was not made a member of the Social Security System (SSS),
denial of substantive due process.
Pag-Ibig and PhilHealth. By January 2001, the number of radio programs of
As a general rule, the Supreme Court is not a trier of facts. This applies which respondent was a talent/spinner was reduced, resulting in the
with greater force in cases before quasi-judicial agencies whose findings of reduction of his monthly income from P15,000.00 to only P4,000.00, an
fact are accorded great respect and even finality. To be sure, the same amount he could barely live on. Anent the claim of petitioner that no
findings should be supported by substantial evidence from which the said employer-employee relationship ever existed, respondent argued that that
tribunals can make its own independent evaluation of the facts. Likewise, it he was hired by petitioner, his wages were paid under the payroll of the
must not be rendered with grave abuse of discretion; otherwise, this Court latter, he was under the control of petitioner and its agents, and it was
will not uphold the tribunals conclusion.20 In the same manner, this Court petitioner who had the power to dismiss him from his employment.23 In
will not hesitate to set aside the labor tribunals findings of fact when it is support of his position paper, respondent attached a photocopy of an
clearly shown that they were arrived at arbitrarily or in disregard of the identification card purportedly issued by petitioner, bearing respondents
evidence on record or when there is showing of fraud or error of law.21 picture and name with the designation "Spinner"; at the back of the I.D., the
At the onset, it is the Courts considered view that the existence of following is written: " This certifies that the card holder is a duly Authorized
employer- employee relationship could have been easily resolved, or at MEDIA Representative of BOMBO RADYO PHILIPPINES THE NO.1
least prima facie determined by the labor inspector, during the inspection by Radio Network in the Country ***BASTA RADYO BOMBO***"24 Respondent
looking at the records of petitioner which can be found in the work likewise included a Certification which reads:
premises. Nevertheless, even if the labor inspector had noted petitioners This is to certify that MR. JANDELEON JUEZAN is a program employee of
manifestation and documents in the Notice of Inspection Results, it is clear PEOPLES BROADCASTING SERVICES, INC. (DYMF- Bombo Radyo
that he did not give much credence to said evidence, as he did not find the Cebu) since 1990 up to the present.
need to investigate the matter further. Considering that the documents
Furtherly certifies that Mr. Juezan is receiving a monthly salary of FIFTEEN
shown by petitioner, namely: cash vouchers, checks and statements of
THOUSAND (P15,000.00) PESOS.
account, summary billings evidencing payment to the alleged real employer
of respondent, letter-contracts denominated as "Employment for a Specific This certification is issued upon the request of the above stated name to
Undertaking," prima facie negate the existence of employer-employee substantiate loan requirement.
relationship, the labor inspector could have exerted a bit more effort and Given this 18th day of April 2000, Cebu City , Philippines.
looked into petitioners payroll, for example, or its roll of employees, or
Page 18 of 52 | LABREL 4E | FT CASES B1

(signed) Furthermore, this is the property of Bombo Radyo Philippines and


GREMAN B. SOLANTE must be surrendered upon separation from the company.
Station Manager HUMAN RESOURCE DEPARMENT
On the other hand, petitioner maintained in its position paper that (Signed)
respondent had never been its employee. Attached as annexes to its JENALIN D. PALER
position paper are photocopies of cash vouchers it issued to drama HRD HEAD
producers, as well as letters of employment captioned "Employment for a
Specific Undertaking", wherein respondent was appointed by different Respondent tried to address the discrepancy between his identification
drama directors as spinner/narrator for specific radio programs.25 card and the standard identification cards issued by petitioner to its
employees by arguing that what he annexed to his position paper was the
In his Order, the Regional Director merely made a passing remark on old identification card issued to him by petitioner. He then presented a
petitioners claim of lack of employer-employee relationshipa token photocopy of another "old" identification card, this time purportedly issued
paragraphand proceeded to a detailed recitation of respondents to one of the employees who was issued the new identification card
allegations. The documents introduced by petitioner in its position paper presented by petitioner.29Respondents argument does not convince. If it
and even those presented during the inspection were not given an iota of were true that he is an employee of petitioner, he would have been issued a
credibility. Instead, full recognition and acceptance was accorded to the new identification card similar to the ones presented by petitioner, and he
claims of respondentfrom the hours of work to his monthly salary, to his should have presented a copy of such new identification card. His failure to
alleged actual duties, as well as to his alleged "evidence." In fact, the show a new identification card merely demonstrates that what he has is
findings are anchored almost verbatim on the self-serving allegations of only his "Media" ID, which does not constitute proof of his employment with
respondent. petitioner.
Furthermore, respondents pieces of evidencethe identification card and It has long been established that in administrative and quasi-judicial
the certification issued by petitioners Greman Solante are not even proceedings, substantial evidence is sufficient as a basis for judgment on
determinative of an employer-employee relationship. The certification, the existence of employer-employee relationship. Substantial evidence,
issued upon the request of respondent, specifically stated that "MR. which is the quantum of proof required in labor cases, is "that amount of
JANDELEON JUEZAN is a program employee of PEOPLES relevant evidence which a reasonable mind might accept as adequate to
BROADCASTING SERVICES, INC. (DYMF- Bombo Radyo Cebu)," it is not justify a conclusion."30 No particular form of evidence is required to prove
therefore "crystal clear that complainant is a station employee rather than a the existence of such employer-employee relationship. Any competent and
program employee hence entitled to all the benefits appurtenant relevant evidence to prove the relationship may be admitted.31 Hence,
thereto,"26 as found by the DOLE Regional Director. Respondent should be while no particular form of evidence is required, a finding that such
bound by his own evidence. Moreover, the classification as to whether one relationship exists must still rest on some substantial evidence. Moreover,
is a "station employee" and "program employee," as lifted from Policy the substantiality of the evidence depends on its quantitative as well as
Instruction No. 40,27 dividing the workers in the broadcast industry into only its qualitative aspects.32
two groups is not binding on this Court, especially when the classification
has no basis either in law or in fact.28 In the instant case, save for respondents self-serving allegations and self-
defeating evidence, there is no substantial basis to warrant the Regional
Even the identification card purportedly issued by petitioner is not proof of Directors finding that respondent is an employee of petitioner. Interestingly,
employer-employee relationship since it only identified respondent as an the Order of the Secretary of Labor denying petitioners appeal dated 27
"Authorized Representative of Bombo Radyo," and not as an employee. January 2005, as well as the decision of the Court of Appeals dismissing
The phrase gains significance when compared vis a vis the following the petition for certiorari, are silent on the issue of the existence of an
notation in the sample identification cards presented by petitioner in its employer-employee relationship, which further suggests that no real and
motion for reconsideration: proper determination the existence of such relationship was ever made by
1. This is to certify that the person whose picture and signature these tribunals. Even the dissent skirted away from the issue of the
appear hereon is an employee of Bombo Radio Philippines. existence of employer-employee relationship and conveniently ignored the
dearth of evidence presented by respondent.
2. This ID must be worn at all times within Bombo Radyo
Philippines premises for proper identification and security. Although substantial evidence is not a function of quantity but rather of
quality, the peculiar environmental circumstances of the instant case
Page 19 of 52 | LABREL 4E | FT CASES B1

demand that something more should have been proffered.33 Had there and/or good faith by posting a partial bond during the reglementary period.
been other proofs of employment, such as respondents inclusion in 38

petitioners payroll, or a clear exercise of control, the Court would have A review of the documents submitted by petitioner is called for to determine
affirmed the finding of employer-employee relationship. The Regional whether they should have been admitted as or in lieu of the surety or cash
Director, therefore, committed grievous error in ordering petitioner to bond to sustain the appeal and serve the ends of substantial justice.
answer for respondents claims. Moreover, with the conclusion that no
employer-employee relationship has ever existed between petitioner and The Deed of Assignment reads:
respondent, it is crystal-clear that the DOLE Regional Director had no DEED OF ASSIGNMENT OF BANK DEPOSIT
jurisdiction over respondents complaint. Thus, the improvident exercise of WITH SPECIAL POWER OF ATTORNEY
power by the Secretary of Labor and the Regional Director behooves the
court to subject their actions for review and to invalidate all the subsequent KNOW ALL MEN BY THESE PRESENTS:
orders they issued. That I, GREMAN B. SOLANTE in my capacity as Station Manager of DYMF
IV. Cebu City, PEOPLES BROADCASTING SERVICES, INC., a corporation
duly authorized and existing under and by virtue of the laws of the
The records show that petitioners appeal was denied because it had Philippines, for and in consideration of the sum of PESOS: TWO
allegedly failed to post a cash or surety bond. What it attached instead to its HUNDRED THREE THOUSAND SEVEN HUNDRED TWENTY SIX
appeal was the Letter Agreement34 executed by petitioner and its bank, the PESOS & 30/100 ONLY (P203,726.30) Phil. Currency, as CASH BOND
cash voucher,35 and the Deed of Assignment of Bank Deposits.36 According GUARANTEE for the monetary award in favor to the Plaintiff in the Labor
to the DOLE, these documents do not constitute the cash or surety bond Case docketed as LSED Case No. R0700-2003-09-CI-09, now pending
contemplated by law; thus, it is as if no cash or surety bond was posted appeal.
when it filed its appeal.
That Respondent-Appellant do hereby undertake to guarantee available
The Court does not agree. and sufficient funds covered by Platinum Savings Deposit (PSD) No.
The provision on appeals from the DOLE Regional Offices to the DOLE 010-8-00038-4 of PEOPLES BROADCASTING SERVICES, INC. in the
Secretary is in the last paragraph of Art. 128 (b) of the Labor Code, which amount of PESOS: TWO HUNDRED THREE THOUSAND SEVEN
reads: HUNDRED TWENTY SIX PESOS & 30/100 ONLY (P203,726.30) payable
to Plaintiff-Appellee/Department of Labor and Employment Regional Office
An order issued by the duly authorized representative of the Secretary of VII at Queen City Development Bank, Cebu Branch, Sanciangko St. Cebu
Labor and Employment under this article may be appealed to the latter. In City.
case said order involves a monetary award, an appeal by the employer
may be perfected only upon the posting of a cash or surety bond issued by It is understood that the said bank has the full control of Platinum Savings
a reputable bonding company duly accredited by the Secretary of Labor Deposit (PSD) No. 010-8-00038-4 from and after this date and that said
and Employment in the amount equivalent to the monetary award in the sum cannot be withdrawn by the Plaintiff-Appellee/ Department of Labor
order appealed from. (emphasis supplied) and Employment Regional Office VII until such time that a Writ of Execution
shall be ordered by the Appellate Office.
While the requirements for perfecting an appeal must be strictly followed as
they are considered indispensable interdictions against needless delays FURTHER, this Deed of Assignment is limited to the principal amount of
and for orderly discharge of judicial business, the law does admit PESOS: TWO HUNDRED THREE THOUSAND SEVEN HUNDRED
exceptions when warranted by the circumstances. Technicality should not TWENTY SIX PESOS & 30/100 ONLY (P203,726.30) Phil. Currency,
be allowed to stand in the way of equitably and completely resolving the therefore, any interest to be earned from the said Deposit will be for the
rights and obligations of the parties.37 Thus, in some cases, the bond account holder.
requirement on appeals involving monetary awards had been relaxed, such IN WITNESS WHEREOF, I have hereunto affixed my signature this 18th
as when (i) there was substantial compliance with the Rules; (ii) the day if June, 2004, in the City of Cebu, Philippines.
surrounding facts and circumstances constitute meritorious ground to
reduce the bond; (iii) a liberal interpretation of the requirement of an appeal PEOPLES BROADCASTING SERVICES, INC.
bond would serve the desired objective of resolving controversies on the By:
merits; or (iv) the appellants, at the very least exhibited their willingness
Page 20 of 52 | LABREL 4E | FT CASES B1

(Signed) making withdrawals from the savings account. Finally, the amount
GREMAN B. SOLANTE deposited was measly compared to the total monetary award in the
Station Manager judgment.42
As priorly mentioned, the Deed of Assignment was accompanied by a V.
Letter Agreement between Queen City Development Bank and petitioner Another question of technicality was posed against the instant petition in
concerning Platinum Savings Deposit (PSD) No. 010-8-00038-4,39 and a the hope that it would not be given due course. Respondent asserts that
Cash Voucher issued by petitioner showing the amount of P203,726.30 petitioner pursued the wrong mode of appeal and thus the instant petition
deposited at the said bank. must be dismissed.1avvphi1.zw+ Once more, the Court is not convinced.
Casting aside the technical imprecision and inaptness of words that mark A petition for certiorari is the proper remedy when any tribunal, board or
the three documents, a liberal reading reveals the documents petitioner did officer exercising judicial or quasi-judicial functions has acted without or in
assign, as cash bond for the monetary award in favor of respondent in excess of its jurisdiction, or with grave abuse of discretion amounting to
LSED Case NO. RO700-2003-CI-09, the amount of P203,726.30 covered lack or excess of jurisdiction and there is no appeal, nor any plain speedy,
by petitioners PSD Account No. 010-8-00038-4 with the Queen City and adequate remedy at law. There is "grave abuse of discretion" when
Development Bank at Sanciangko St. Cebu City, with the depositary bank respondent acts in a capricious or whimsical manner in the exercise of its
authorized to remit the amount to, and upon withdrawal by respondent and judgment as to be equivalent to lack of jurisdiction.43
or the Department of Labor and Employment Regional Office VII, on the
basis of the proper writ of execution. The Court finds that the Deed of Respondent may have a point in asserting that in this case a Rule 65
Assignment constitutes substantial compliance with the bond requirement. petition is a wrong mode of appeal, as indeed the writ of certiorari is an
extraordinary remedy, and certiorari jurisdiction is not to be equated with
The purpose of an appeal bond is to ensure, during the period of appeal, appellate jurisdiction. Nevertheless, it is settled, as a general proposition,
against any occurrence that would defeat or diminish recovery by the that the availability of an appeal does not foreclose recourse to the
aggrieved employees under the judgment if subsequently affirmed.40 The extraordinary remedies, such as certiorari and prohibition, where appeal is
Deed of Assignment in the instant case, like a cash or surety bond, serves not adequate or equally beneficial, speedy and sufficient, as where the
the same purpose. First, the Deed of Assignment constitutes not just a orders of the trial court were issued in excess of or without jurisdiction, or
partial amount, but rather the entire award in the appealed Order. Second, there is need to promptly relieve the aggrieved party from the injurious
it is clear from the Deed of Assignment that the entire amount is under the effects of the acts of an inferior court or tribunal, e.g., the court has
full control of the bank, and not of petitioner, and is in fact payable to the authorized execution of the judgment.44 This Court has even recognized
DOLE Regional Office, to be withdrawn by the same office after it had that a recourse to certiorari is proper not only where there is a clear
issued a writ of execution. For all intents and purposes, the Deed of deprivation of petitioners fundamental right to due process, but so also
Assignment in tandem with the Letter Agreement and Cash Voucher is as where other special circumstances warrant immediate and more direct
good as cash. Third, the Court finds that the execution of the Deed of action.45
Assignment, the Letter Agreement and the Cash Voucher were made in
good faith, and constituted clear manifestation of petitioners willingness to In one case, it was held that the extraordinary writ of certiorari will lie if it is
pay the judgment amount. satisfactorily established that the tribunal acted capriciously and
whimsically in total disregard of evidence material to or even decisive of the
The Deed of Assignment must be distinguished from the type of bank controversy,46and if it is shown that the refusal to allow a Rule 65 petition
certification submitted by appellants in Cordova v. Keysas Boutique,
41 wherein this Court found that such bank certification did not come close would result in the infliction of an injustice on a party by a judgment that
evidently was rendered whimsically and capriciously, ignoring and
to the cash or surety bond required by law. The bank certification in disregarding uncontroverted facts and familiar legal principles without any
Cordova merely stated that the employer maintains a depository account valid cause whatsoever.47
with a balance of P23,008.19, and that the certification was issued upon the
depositors request for whatever legal purposes it may serve. There was no It must be remembered that a wide breadth of discretion is granted a court
indication that the said deposit was made specifically for the pending of justice in certiorari proceedings.48 The Court has not too infrequently
appeal, as in the instant case. Thus, the Court ruled that the bank given due course to a petition for certiorari, even when the proper remedy
certification had not in any way ensured that the award would be paid would have been an appeal, where valid and compelling considerations
should the appeal fail. Neither was the appellee in the case prevented from would warrant such a recourse.49 Moreover, the Court allowed a Rule 65
Page 21 of 52 | LABREL 4E | FT CASES B1

petition, despite the availability of plain, speedy or adequate remedy, in respondent has never been petitioners employee. But the DOLE did not
view of the importance of the issues raised address, while the Court of Appeals glossed over, the issue. The
peremptory dismissal of the instant petition on a technicality would deprive
therein.50 The rules were also relaxed by the Court after considering the
the Court of the opportunity to resolve the novel controversy.1avvphi1
public interest involved in the case;51 when public welfare and the
advancement of public policy dictates; when the broader interest of justice WHEREFORE, the petition is GRANTED. The Decision dated 26 October
so requires; when the writs issued are null and void; or when the 2006 and the Resolution dated 26 June 2007 of the Court of Appeals in
questioned order amounts to an oppressive exercise of judicial authority.52 C.A. G.R. CEB-SP No. 00855 are REVERSED and SET ASIDE. The Order
of the then Acting Secretary of the Department of Labor and Employment
"The peculiar circumstances of this case warrant, as we held in Republic v.
dated 27 January 2005 denying petitioners appeal, and the Orders of the
Court of Appeals, 107 SCRA 504, 524, the exercise once more of our
Director, DOLE Regional Office No. VII, dated 24 May 2004 and 27
exclusive prerogative to suspend our own rules or to exempt a particular
February 2004, respectively, are ANNULLED. The complaint against
case from its operation as in x x Republic of the Philippines v. Court of
petitioner is DISMISSED.
Appeals, et al., (83 SCRA 453, 478-480 [1978]), thus: x x The Rules have
been drafted with the primary objective of enhancing fair trials and SO ORDERED.
expediting justice. As a corollary, if their applications and operation tend to
subvert and defeat instead of promote and enhance it, their suspension is
justified."53
The Regional Director fully relied on the self-serving allegations of
respondent and misinterpreted the documents presented as evidence by
respondent. To make matters worse, DOLE denied petitioners appeal
based solely on petitioners alleged failure to file a cash or surety bond,
without any discussion on the merits of the case. Since the petition for
certiorari before the Court of Appeals sought the reversal of the two
aforesaid orders, the appellate court necessarily had to examine the
evidence anew to determine whether the conclusions of the DOLE were
supported by the evidence presented. It appears, however, that the Court of
Appeals did not even review the assailed orders and focused instead on a
general discussion of due process and the jurisdiction of the Regional
Director. Had the appellate court truly reviewed the records of the case, it
would have seen that there existed valid and sufficient grounds for finding
grave abuse of discretion on the part of the DOLE Secretary as well the
Regional Director. In ruling and acting as it did, the Court finds that the
Court of Appeals may be properly subjected to its certiorari jurisdiction.
After all, this Court has previously ruled that the extraordinary writ of
certiorari will lie if it is satisfactorily1avvphi1
established that the tribunal had acted capriciously and whimsically in total
disregard of evidence material to or even decisive of the controversy.54
The most important consideration for the allowance of the instant petition is
the opportunity for the Court not only to set the demarcation between the
NLRCs jurisdiction and the DOLEs prerogative but also the procedure
when the case involves the fundamental challenge on the DOLEs
prerogative based on lack of employer-employee relationship. As
exhaustively discussed here, the DOLEs prerogative hinges on the
existence of employer-employee relationship, the issue is which is at the
very heart of this case. And the evidence clearly indicates private
Page 22 of 52 | LABREL 4E | FT CASES B1

G.R. No. 87530 June 13, 1990 The PKI allegedly received a copy of the decision of the NLRC only on
September 13, 1988. A motion for reconsideration of said decision dated
GERONIMO SADOL, petitioner,
September 22, 1988 was filed by said respondent and a similar motion was
vs.
filed by Samahang Kabuhayan ng Barangay Luz Banzon (SKLB for brevity)
PILIPINAS KAO, INC., REQUITO VEGA, BELEN GOMEZ, ARTURO
to which an opposition was filed by petitioner.
GOMEZ & NLRC SECOND DIVISION, respondents.
On September 30, 1988, a resolution was promulgated by the same
Oliver A. Luproso for petitioner.
division of the NLRC, setting aside its decision and dismissing the case for
Cayetano W. Paderanga for private respondent. lack of merit. A motion for reconsideration thereof filed by petitioner who
besides questioning its findings of facts raised the issue that said
respondent's appeal having been filed out of time its motion for
GANCAYCO, J.: reconsideration of the decision should not have been entertained as it
The issue posed in this case is whether or not a party who failed to appeal raised issues for the first on appeal which were not raised before the labor
from a decision of the labor arbiter to the National Labor Relations arbiter. This motion was denied on November 27, 1988.
Commission (NLRC) within the ten (10) day reglementary period can still Hence, the herein petition for certiorari wherein petitioner recites the
participate in a separate appeal timely interposed by the adverse party by following assignment of errors:
filing a motion for reconsideration of a decision of the NLRC on such
appeal. I

Petitioner was recruited as a laborer by private respondents Requito Vega, THE HONORABLE COMMISSION, SECOND DIVISION,
Antonio Gomez and Belen Gomez, who are the owners of Vega & Co., a SERIOUSLY ERRED IN FINDING THAT RESPONDENTS
private recruitment agency, with assignment at respondent Pilipinas Kao, REQUITO VEGA, ARTURO GOMEZ AND BELEN GOMEZ
Inc. (PKI for brevity), particularly at the Pit Burning area. Sometime on April IS A LAWFUL INDEPENDENT LABOR CONTRACTOR;
16, 1984, he was allegedly summarily dismissed. Hence, on July 24, 1986, II
he filed a complaint for reinstatement and backwages with Region X of the
THE HONORABLE COMMISSION, SECOND DIVISION,
Department of Labor and Employment in Cagayan de Oro City.
SERIOUSLY ERRED IN FINDING IN ITS RESOLUTION
On November 13, 1986, the labor arbiter ordered all parties to submit their THAT COMPLAINANT-APPELLANT VOLUNTARILY
position papers. Only petitioner complied. On December 17, 1986, ABANDONED HIS JOB;
petitioner filed an urgent motion that the failure of respondent to file their
III
position papers is a waiver and so judgment should be rendered in favor of
petitioner. Similar motions were filed by petitioner on January 23, 1987 and THE HONORABLE COMMISSION, SECOND DIVISION,
May 15, 1987. SERIOUSLY ERRED AND/OR COMMITTED GRAVE
ABUSE OF DISCRETION IN GIVING DUE COURSE AND/
On June 26, 1987, the labor arbiter rendered a decision ordering private
O R E N T E RTA I N I N G T H E M O T I O N F O R
respondents to jointly and solidarity pay petitioner his separation pay
RECONSIDERATION FILED BY RESPONDENT-
computed at one month for every year of service within the reglementary
APPELLANTS AND REVERSING ITS OWN DECISION/
period. Petitioner appealed to the NLRC. Said respondents also appealed
RESOLUTION DATED AUGUST 26, 1988;
but it was filed out of time.
IV
On August 26, 1988, the Second Division of the NLRC promulgated a
decision modifying the appealed decision in that respondent PKI was THE HONORABLE COMMISSION, SECOND DIVISION,
ordered to reinstate petitioner to his former position without loss of seniority SERIOUSLY ERRED IN FAILING TO GIVE DUE
rights and other accrued benefits and with full backwages from the time of CONSIDERATION OF COMPLAINANT-APPELLANT'S
dismissal up to his actual reinstatement, and in case reinstatement is OPPOSITION TO MOTION FOR RECONSIDERATION
impossible, payment of full backwages and separation pay of one (1) month DATED SEPTEMBER 27, 1988. 1
salary for every year of service. The appeal of respondent Pig was The third and fourth assignment of errors shall first be resolved.
dismissed for having been filed out of time.
Page 23 of 52 | LABREL 4E | FT CASES B1

There is no question that private respondents failed to file a timely appeal independent labor contractor, citing the case of Vda. de
from the derision of the labor arbiter while the petitioner was able to Eustaquio vs. Workmen's Compensation Commission, 97
interpose his appeal within the reglementary period. It is also an accepted SCRA 255, thus:
postulate that issues not raised in the lower court or the labor arbiter may An independent contractor is one who, in
not be raised for the first time on appeal. rendering services, exercise an
Note is taken of the fact that even the Solicitor General refused to represent independent employment or occupation
the NLRC in this proceeding as it shares the view of petitioner that the and represents the will of his employer
decision of the labor arbiter having become final by the failure to only as to the results of his work; and who
respondent PKI to appeal on time the NLRC may no longer amend, modify, is engaged to perform a certain service to
much less set aside the same. 2 another according to his own manner and
methods, free from control and direction of
This posture is correct insofar as respondent PKI is concerned. However,
his employer in all matters connected with
as petitioner had filed a timely appeal the NLRC had jurisdiction to give due
the performance of the service, except as
se to his appeal and render the decision of August 28, 1988, a copy of
to the result of the work.
which was furnished respondents. Having lost the right to appeal can
respondent PKI file a motion for reconsideration of said decision? The To further buttress respondent SKLB's claim of being an
Court resolves the question in the affirmative. The rules of technicality must independent labor contractor and employer of complainant,
yield to the broader interest of justice. It is only by giving due course to the it submitted a copy of a Memorandum dated April 21, 1984
motion for reconsideration that was timely filed that the NLRC may be able, sent to complainant requiring the latter to report to its office
to equitably evaluate the conflicting versions of facts presented by the immediately otherwise he would be deemed to have
parties. abandoned his work.
In the now questioned resolution of the NLRC dated September 30,1988, It does strike Us as odd that if indeed complainant was
the following findings and conclusions were made: dismissed sometime in April 1984 it took him almost three
(3) years before filing the instant case for illegal dismissal .
Respondent SKLB assails the finding of the Commission
This circumstance adds a significant dimension to
that it is engaged in labor-only contracting. In support
respondent's position that indeed complainant abandoned
thereof, respondent submitted a Clearance Certificate
his job to look for greener pastures and it was only when
issued by the Department of Labor and Employment,
he failed to find such opportunity that he came back to
Regional Office No. 10 situated in Cagayan de Oro City,
demand that he be allowed to resume the employment
certifying to its being cleared for issuance of a permit as a
which he unceremoniously abandoned.
labor contractor. It also submitted payrolls showing that it
indeed operated as such independent labor contractor in All the foregoing undisputed taken together, preponderate
accordance with Article 106 of the Labor Code. in favor of respondent SKLB's claim of being a lawful
independent labor contractor which employed complainant
Attached to respondent SKLB's motion likewise is the joint
who unjustifiably abandoned his employment.
affidavit of one Mario T. Ecarnum and Benito U. Ecarnum
who jointly stated that they were neighbors and co- WHEREFORE, the derision sought to be reconsidered is
workers of the complainant in the pit burning area, in a hereby SET ASIDE and a new one entered, dismissing the
work contracted by aforesaid respondent with respondent case for lack of merit. 3
Pilipinas Kao, Inc.; that complainant abandoned his work The factual findings of the NLRC are conclusive on this Court because the
starting April 19,1984 when he went to Manila to apply for same appear to be supported by substantial evidence.
work abroad and it wall only about eight (8) months later
that he returned when he failed to secure an overseas WHEREFORE, the petition is DISMISSED for lack of merit. No costs.
employment; that complainant's prolonged absence was SO ORDERED.
without prior permission or leave of absence.
Respondent SKLB further contends that it meets all
requirements set by law and jurisprudence pertaining to an
Page 24 of 52 | LABREL 4E | FT CASES B1

G.R. No. 152494 September 22, 2004 year of service due to the indefiniteness of the rotation scheme and
strained relations caused by the filing of the complaints.6
MARIANO ONG, doing business under the name and style
MILESTONE METAL MANUFACTURING, petitioner, Petitioner filed with the NLRC a notice of appeal with a memorandum of
vs. appeal and paid the docket fees therefor. However, instead of posting the
THE COURT OF APPEALS, CONRADO DABAC, BERNABE TAYACTAC, required cash or surety bond, he filed a motion to reduce the appeal bond.
MANUEL ABEJUELLA, LOLITO ABELONG, RONNIE HERRERO, The NLRC, in a resolution dated April 28, 2000, denied the motion to
APOLLO PAMIAS, JAIME ONGUTAN, NOEL ATENDIDO, CARLOS reduce bond and dismissed the appeal for failure to post cash or surety
TABBAL, JOEL ATENDIDO, BIENVENIDO EBBER, RENATO bond within the reglementary period. 7 Petitioner s motion for
ABEJUELLA, LEONILO ATENDIDO, JR., LODULADO FAA and JAIME reconsideration was likewise denied.8
LOZADA, respondents. Petitioner filed a petition for certiorari with the Court of Appeals alleging that
DECISION the NLRC acted with grave abuse of discretion in dismissing the appeal for
non-perfection of appeal although a motion to reduce appeal bond was
YNARES-SANTIAGO, J.:
seasonably filed. However, the petition was dismissed and thereafter the
This is a petition for review on certiorari assailing the decision1 of the Court motion for reconsideration was likewise dismissed for lack of merit.9
of Appeals in CA-G.R. SP No. 62129, dated October 10, 2001, which
Hence, this petition for review on the following assignment of errors:
dismissed the petition for certiorari for lack of merit, as well as the
resolution,2 dated March 7, 2002, denying the motion for reconsideration. I.
Petitioner is the sole proprietor of Milestone Metal Manufacturing PUBLIC RESPONDENT COURT OF APPEALS COMMITTED
(Milestone), which manufactures, among others, wearing apparels, belts, SERIOUS ERROR AND GRAVE ABUSE OF DISCRETION IN
and umbrellas.3 Sometime in May 1998, the business suffered very low AFFIRMING THE DECISION OF THE NLRC DISMISSING THE
sales and productivity because of the economic crisis in the country. APPEAL OF PETITIONERS (sic) FOR NON-PERFECTION WHEN
Hence, it adopted a rotation scheme by reducing the workdays of its A MOTION TO REDUCE APPEAL BOND WAS SEASONABLY
employees to three days a week or less for an indefinite period.4 FILED WHICH IS ALLOWED BY THE RULES OF PROCEDURE
OF THE NLRC.
On separate dates, the 15 respondents filed before the National Labor
Relations Commission (NLRC) complaints for illegal dismissal, II.
underpayment of wages, non-payment of overtime pay, holiday pay, service PUBLIC RESPONDENT COURT OF APPEALS COMMITTED
incentive leave pay, 13th month pay, damages, and attorneys fees against SERIOUS ERROR AND GRAVE ABUSE OF DISCRETION IN
petitioner. These were consolidated and assigned to Labor Arbiter Manuel AFFIRMING THE DISMISSAL BY NLRC OF PETITIONERS
Manasala. APPEAL AND IN EFFECT UPHOLDING THE ERRONEOUS
Petitioner claimed that 9 of the 15 respondents were not employees of DECISION OF THE LABOR ARBITER AWARDING SEPARATION
Milestone but of Protone Industrial Corporation which, however, stopped its PAY TO PRIVATE RESPONDENTS DESPITE THE FINDING THAT
operation due to business losses. Further, he claims that respondents THERE WAS NO ILLEGAL DISMISSAL MADE BY MILESTONE.
Manuel Abuela, Lolita Abelong, Ronnie Herrero, Carlos Tabbal, Conrado III.
Dabac, and Lodualdo Faa were not dismissed from employment; rather,
they refused to work after the rotation scheme was adopted. Anent their PUBLIC RESPONDENT COURT OF APPEALS COMMITTED
monetary claims, petitioner presented documents showing that he paid SERIOUS ERROR IN AFFIRMING THE NLRCS DISMISSAL OF
respondents minimum wage, 13th month pay, holiday pay, and PETITIONERS APPEAL AND IN EFFECT UPHOLDING THE
contributions to the SSS, Medicare, and Pag-Ibig Funds.5 ERRONEOUS DECISION OF THE LABOR ARBITER THAT
PETITIONER MILESTONE HAS VIOLATED THE MINIMUM WAGE
On November 25, 1999, the Labor Arbiter rendered a decision awarding to LAW AND THAT PRIVATE RESPONDENTS WERE UNDERPAID.
the respondents the aggregate amount of P1,111,200.40 representing their
wage differential, holiday pay, service incentive leave pay and 13th month IV.
pay, plus 10% thereof as attorneys fees. Further, petitioner was ordered to PUBLIC RESPONDENT COURT OF APPEALS COMMITTED
pay the respondents separation pay equivalent to month salary for every SERIOUS ERROR IN AFFIRMING THE NLRCS DISMISSAL OF
Page 25 of 52 | LABREL 4E | FT CASES B1

PETITIONERS APPEAL AND IN EFFECT UPHOLDING THE Section 3. Requisites for Perfection of Appeal. (a) The appeal
ERRONEOUS DECISION OF THE LABOR ARBITER THAT shall be filed within the reglementary period as provided in Section
P E T I T I O N E R M I L E S TO N E H A S N O T PA I D P R I VAT E 1 of this Rule; shall be under oath with proof of payment of the
RESPONDENTS THEIR SERVICE INCENTIVE LEAVE PAY, 13th required appeal fee and the posting of a cash or surety bond as
MONTH PAY, AND HOLIDAY PAY. provided in Section 5 of this Rule; shall be accompanied by a
memorandum of appeal which shall state the grounds relied upon
V.
and the arguments in support thereof; the relief prayed for; and a
PUBLIC RESPONDENT COURT OF APPEALS COMMITTED statement of the date when the appellant received the appealed
SERIOUS ERROR IN AFFIRMING THE NLRCS DISMISSAL OF decision, order or award and proof of service on the other party of
PETITIONERS APPEAL AND IN EFFECT UPHOLDING THE such appeal.
ERRONEOUS DECISION OF THE LABOR ARBITER THAT THE
A mere notice of appeal without complying with the other requisite
EVIDENCE SUBMITTED BY PRIVATE RESPONDENTS IN
aforestated shall not stop the running of the period for perfecting an
SUPPORT OF THEIR CLAIMS ARE NOT SELF-SERVING,
appeal.
IRRELEVANT AND IMMATERIAL TO THE FACTS AND LAW IN
ISSUE IN THIS CASE.10 xxx xxx xxx
The petition lacks merit. Section 6. Bond. In case the decision of the Labor Arbiter, the
Regional Director or his duly authorized Hearing Officer involves a
Time and again it has been held that the right to appeal is not a natural
monetary award, an appeal by the employer shall be
right or a part of due process, it is merely a statutory privilege, and may be
perfected only upon the posting of a cash or surety bond,
exercised only in the manner and in accordance with the provisions of law.
which shall be in effect until final disposition of the case, issued by
The party who seeks to avail of the same must comply with the
a reputable bonding company duly accredited by the Commission
requirements of the rules. Failing to do so, the right to appeal is lost.11
or the Supreme Court in an amount equivalent to the monetary
Article 223 of the Labor Code, as amended, sets forth the rules on appeal award, exclusive of damages and attorneys fees.
from the Labor Arbiters monetary award:
The employer, his counsel, as well as the bonding company, shall submit a
ART. 223. Appeal. Decisions, awards, or orders of the Labor joint declaration under oath attesting that the surety bond posted is
Arbiter are final and executory unless appealed to the Commission genuine.
by any or both parties within ten (10) calendar days from receipt of
The Commission may, in justifiable cases and upon Motion of the
such decisions, awards, or orders. x x x.
Appellant, reduce the amount of the bond. The filing of the motion
xxx xxx xxx to reduce bond shall not stop the running of the period to perfect
In case of a judgment involving a monetary award, an appeal by appeal. (Emphasis ours)
the employer may be perfected only upon the posting of a cash In the case at bar, petitioner received the decision of the Labor Arbiter on
or surety bond issued by a reputable bonding company duly January 6, 2000. He filed his notice of appeal with memorandum of appeal
accredited by the Commission in the amount equivalent to the and paid the corresponding appeal fees on January 17, 2000, the last day
monetary award in the judgment appealed from. (Emphasis ours) of filing the appeal. However, in lieu of the required cash or surety bond, he
The pertinent provisions of Rule VI of the New Rules of Procedure of the filed a motion to reduce bond alleging that the amount of P1,427,802,04 as
NLRC,12 which were in effect when petitioner filed his appeal, provide: bond is "unjustified and prohibitive" and prayed that the same be reduced
to a "reasonable level." The NLRC denied the motion and consequently
Section 1. Periods of Appeal. Decisions, awards or orders of the dismissed the appeal for non-perfection. Petitioner now contends that he
Labor Arbiter and the POEA Administrator shall be final and was deprived of the chance to post bond because the NLRC took 102 days
executory unless appealed to the Commission by any or both to decide his motion.
parties within ten (10) calendar days from receipt of such decisions,
awards or orders of the Labor Arbiter x x x. Petitioners argument is unavailing.

xxx xxx xxx While, Section 6, Rule VI of the NLRCs New Rules of Procedure allows the
Commission to reduce the amount of the bond, the exercise of the authority
is not a matter of right on the part of the movant but lies within the sound
Page 26 of 52 | LABREL 4E | FT CASES B1

discretion of the NLRC upon showing of meritorious grounds.13 Petitioners The fact that the NLRC took 102 days to resolve the motion will not help
motion reads: petitioners case. The NLRC Rules clearly provide that "the filing of the
motion to reduce bond shall not stop the running of the period to perfect
1. The appeal bond which respondents-appellants will post in this
appeal."Petitioner should have seasonably filed the appeal bond within the
case is P1,427,802.04. They are precisely questioning this amount
ten-day reglementary period following the receipt of the order, resolution or
as being unjustified and prohibitive under the premises.
decision of the NLRC to forestall the finality of such order, resolution or
2. The amount of this appeal bond must be reduced to a decision. In the alternative, he should have paid only a moderate and
reasonable level by this Honorable Office. reasonable sum for the premium, as was held in Biogenerics Marketing and
WHEREFORE, in view thereof, it is respectfully prayed of this Research Corporation v. NLRC,21 to wit:
Honorable Office that the appeal bond of P1,427,802.04 be x x x The mandatory filing of a bond for the perfection of an appeal
reduced.14 is evident from the aforequoted provision that the appeal may be
After careful scrutiny of the motion to reduce appeal bond, we agree with perfected only upon the posting of cash or surety bond. It is not an
the Court of Appeals that the NLRC did not act with grave abuse of excuse that the over P2 million award is too much for a small
discretion when it denied petitioners motion for the same failed to either business enterprise, like the petitioner company, to shoulder. The
elucidate why the amount of the bond was "unjustified and prohibitive" or to law does not require its outright payment, but only the posting
indicate what would be a "reasonable level."15 of a bond to ensure that the award will be eventually paid
should the appeal fail. What petitioners have to pay is a
In Calabash Garments, Inc. v. NLRC,16 it was held that "a substantial moderate and reasonable sum for the premium for such
monetary award, even if it runs into millions, does not necessarily give the bond. (Emphasis ours)
employer-appellant a "meritorious case" and does not automatically warrant
a reduction of the appeal bond." While the bond requirement on appeals involving monetary awards has
been relaxed in certain cases, this can only be done where there was
Even granting arguendo that petitioner has meritorious grounds to reduce substantial compliance of the Rules or where the appellants, at the very
the appeal bond, the result would have been the same since he failed to least, exhibited willingness to pay by posting a partial bond.22 Petitioners
post cash or surety bond within the prescribed period. reliance on the case of Rosewood Processing, Inc. v. NLRC23 is misplaced.
The above-cited provisions explicitly provide that an appeal from the Labor Petitioner in the said case substantially complied with the rules by posting a
Arbiter to the NLRC must be perfected within ten calendar days from partial surety bond of fifty thousand pesos issued by Prudential Guarantee
receipt of such decisions, awards or orders of the Labor Arbiter. In a and Assurance, Inc. while his motion to reduce appeal bond was pending
judgment involving a monetary award, the appeal shall be perfected only before the NLRC.
upon (1) proof of payment of the required appeal fee; (2) posting of a cash In the case at bar, petitioner did not post a full or partial appeal bond within
or surety bond issued by a reputable bonding company; and (3) filing of a the prescribed period, thus, no appeal was perfected from the decision of
memorandum of appeal. A mere notice of appeal without complying with the Labor Arbiter. For this reason, the decision sought to be appealed to the
the other requisites mentioned shall not stop the running of the period for NLRC had become final and executory and therefore immutable. Clearly,
perfection of appeal.17 The posting of cash or surety bond is not only then, the NLRC has no authority to entertain the appeal, much less to
mandatory but jurisdictional as well, and non-compliance therewith is fatal reverse the decision of the Labor Arbiter. Any amendment or alteration
and has the effect of rendering the judgment final and executory.18 This made which substantially affects the final and executory judgment is null
requirement is intended to discourage employers from using the appeal to and void for lack of jurisdiction, including the entire proceeding held for that
delay, or even evade, their obligation to satisfy their employees just and purpose.24
lawful claims.19
WHEREFORE, in view of the foregoing, the petition is DENIED. The
The intention of the lawmakers to make the bond an indispensable requisite assailed decision of the Court of Appeals in CA-G.R. SP No. 62129, dated
for the perfection of an appeal by the employer is underscored by the October 10, 2001, dismissing the petition for certiorari for lack of merit,
provision that an appeal by the employer may be perfected only upon the is AFFIRMED.
posting of a cash or surety bond. The word "only" makes it perfectly clear
that the lawmakers intended the posting of a cash or surety bond by the No pronouncement as to costs.
employer to be the exclusive means by which an employers appeal may SO ORDERED.
be perfected.20
Page 27 of 52 | LABREL 4E | FT CASES B1

G.R. Nos. 178034 & 178117 G R. Nos. 186984-85 October 17, McBurnie left for Australia for his medical treatment, he had not yet
2013 obtained a work permit.
ANDREW JAMES MCBURNIE, Petitioner, In a Decision6 dated September 30, 2004, the LA declared McBurnie as
vs. having been illegally dismissed from employment, and thus entitled to
EULALIO GANZON, EGI-MANAGERS, INC. and E. GANZON, receive from the respondents the following amounts: (a) US$985,162.00 as
INC., Respondents. salary and benefits for the unexpired term of their employment contract,
(b) P2,000,000.00 as moral and exemplary damages, and (c) attorneys
RESOLUTION
fees equivalent to 10% of the total monetary award.
REYES, J.:
Feeling aggrieved, the respondents appealed the LAs Decision to the
For resolution are the NLRC.7 On November 5, 2004, they filed their Memorandum of
(1) third motion for reconsideration1 filed by Eulalio Ganzon Appeal8 and Motion to Reduce Bond9, and posted an appeal bond in the
(Ganzon), EGI-Managers, Inc. (EGI) and E. Ganzon, Inc. amount of P100,000.00. The respondents contended in their Motion to
(respondents) on March 27, 2012, seeking a reconsideration of the Reduce Bond, inter alia, that the monetary awards of the LA were null and
Courts Decision2 dated September 18, 2009 that ordered the excessive, allegedly with the intention of rendering them incapable of
dismissal of their appeal to the National Labor Relations posting the necessary appeal bond. They claimed that an award of "more
Commission (NLRC) for failure to post additional appeal bond in than P60 Million Pesos to a single foreigner who had no work permit and
the amount of P54,083,910.00; and who left the country for good one month after the purported
commencement of his employment" was a patent nullity.10Furthermore,
(2) motion for reconsideration3 filed by petitioner Andrew James they claimed that because of their business losses that may be attributed to
McBurnie (McBurnie) on September 26, 2012, assailing the Court an economic crisis, they lacked the capacity to pay the bond of almost P60
en bancs Resolution4 dated September 4, 2012 that (1) accepted Million, or even the millions of pesos in premium required for such bond.
the case from the Courts Third Division and (2) enjoined the
implementation of the Labor Arbiters (LA) decision finding him to On March 31, 2005, the NLRC denied11 the motion to reduce bond,
be illegally dismissed by the respondents. explaining that "in cases involving monetary award, an employer seeking to
appeal the [LAs] decision to the Commission is unconditionally required by
Antecedent Facts Art. 223, Labor Code to post bond in the amount equivalent to the monetary
The Decision dated September 18, 2009 provides the following antecedent award x x x."12 Thus, the NLRC required from the respondents the posting
facts and proceedings of an additional bond in the amount of P54,083,910.00.
On October 4, 2002, McBurnie, an Australian national, instituted a When their motion for reconsideration was denied,13 the respondents
complaint for illegal dismissal and other monetary claims against the decided to elevate the matter to the Court of Appeals (CA) via the Petition
respondents. McBurnie claimed that on May 11, 1999, he signed a five-year for Certiorari and Prohibition (With Extremely Urgent Prayer for the
employment agreement5 with the company EGI as an Executive Vice- Issuance of a Preliminary Injunction and/or Temporary Restraining
President who shall oversee the management of the companys hotels and Order)14 docketed as CA-G.R. SP No. 90845.
resorts within the Philippines. He performed work for the company until In the meantime, in view of the respondents failure to post the required
sometime in November 1999, when he figured in an accident that additional bond, the NLRC dismissed their appeal in a Resolution15 dated
compelled him to go back to Australia while recuperating from his injuries. March 8, 2006. The respondents motion for reconsideration was denied on
While in Australia, he was informed by respondent Ganzon that his services June 30, 2006.16 This prompted the respondents to file with the CA the
were no longer needed because their intended project would no longer Petition for Certiorari (With Urgent Prayers for the Immediate Issuance of a
push through. Te m p o r a r y R e s t r a i n i n g O r d e r a n d a W r i t o f P r e l i m i n a r y
The respondents opposed the complaint, contending that their agreement Injunction)17 docketed as CA-G.R. SP No. 95916, which was later
with McBurnie was to jointly invest in and establish a company for the consolidated with CA-G.R. SP No. 90845.
management of hotels. They did not intend to create an employer- CA-G.R. SP Nos. 90845 and 95916
employee relationship, and the execution of the employment contract that
was being invoked by McBurnie was solely for the purpose of allowing On February 16, 2007, the CA issued a Resolution18 granting the
McBurnie to obtain an alien work permit in the Philippines. At the time respondents application for a writ of preliminary injunction. It directed the
Page 28 of 52 | LABREL 4E | FT CASES B1

NLRC, McBurnie, and all persons acting for and under their authority to meritorious grounds and upon posting of a bond in a reasonable amount in
refrain from causing the execution and enforcement of the LAs decision in relation to the monetary award."30
favor of McBurnie, conditioned upon the respondents posting of a bond in On the issue31 of the NLRCs dismissal of the appeal on the ground of the
the amount of P10,000,000.00. McBurnie sought reconsideration of the respondents failure to post the additional appeal bond, the CA also found
issuance of the writ of preliminary injunction, but this was denied by the CA grave abuse of discretion on the part of the NLRC, explaining that an
in its Resolution19 dated May 29, 2007. appeal bond in the amount of P54,083,910.00 was prohibitive and
McBurnie then filed with the Court a Petition for Review on excessive. Moreover, the appellate court cited the pendency of the petition
Certiorari20 docketed as G.R. Nos. 178034 and 178117, assailing the CA for certiorari over the denial of the motion to reduce bond, which should
Resolutions that granted the respondents application for the injunctive writ. have prevented the NLRC from immediately dismissing the respondents
On July 4, 2007, the Court denied the petition on the ground of McBurnies appeal.32
failure to comply with the 2004 Rules on Notarial Practice and to sufficiently Undeterred, McBurnie filed a motion for reconsideration. At the same time,
show that the CA committed any reversible error.21 A motion for the respondents moved that the appeal be resolved on the merits by the
reconsideration was denied with finality in a Resolution22 dated October 8, CA. On March 3, 2009, the CA issued a Resolution33 denying both motions.
2007. McBurnie then filed with the Court the Petition for Review on
Unyielding, McBurnie filed a Motion for Leave (1) To File Supplemental Certiorari34 docketed as G.R. Nos. 186984-85.
Motion for Reconsideration and (2) To Admit the Attached Supplemental In the meantime, the NLRC, acting on the CAs order of remand, accepted
Motion for Reconsideration,23 which was treated by the Court as a second the appeal from the LAs decision, and in its Decision35 dated November 17,
motion for reconsideration, a prohibited pleading under Section 2, Rule 56 2009, reversed and set aside the Decision of the LA, and entered a new
of the Rules of Court. Thus, the motion for leave was denied by the Court in one dismissing McBurnies complaint. It explained that based on records,
a Resolution24 dated November 26, 2007. The Courts Resolution dated McBurnie was never an employee of any of the respondents, but a potential
July 4, 2007 then became final and executory on November 13, 2007; investor in a project that included said respondents, barring a claim of
accordingly, entry of judgment was made in G.R. Nos. 178034 and dismissal, much less, an illegal dismissal. Granting that there was a
178117.25 contract of employment executed by the parties, McBurnie failed to obtain a
In the meantime, the CA ruled on the merits of CA-G.R. SP No. 90845 and work permit which would have allowed him to work for any of the
CA-G.R. SP No. 95916 and rendered its Decision26 dated October 27, respondents.36 In the absence of such permit, the employment agreement
2008, allowing the respondents motion to reduce appeal bond and was void and thus, could not be the source of any right or obligation.
directing the NLRC to give due course to their appeal. The dispositive Court Decision dated September 18, 2009
portion of the CA Decision reads:
On September 18, 2009, the Third Division of this Court rendered its
WHEREFORE, in view of the foregoing, the petition for certiorari and Decision37 which reversed the CA Decision dated October 27, 2008 and
prohibition docketed as CA GR SP No. 90845 and the petition for certiorari Resolution dated March 3, 2009. The dispositive portion reads:
docketed as CA GR SP No. 95916 are GRANTED. Petitioners Motion to
Reduce Appeal Bond is GRANTED. Petitioners are hereby DIRECTED to WHEREFORE, the petition is GRANTED. The Decision of the Court of
post appeal bond in the amount of P10,000,000.00. The NLRC is hereby Appeals in CA-G.R. SP Nos. 90845 and 95916 dated October 27, 2008
DIRECTED to give due course to petitioners appeal in CA GR SP No. granting respondents Motion to Reduce Appeal Bond and ordering the
95916 which is ordered remanded to the NLRC for further proceedings. National Labor Relations Commission to give due course to respondents
appeal, and its March 3, 2009 Resolution denying petitioners motion for
SO ORDERED.27 reconsideration, are REVERSED and SET ASIDE. The March 8, 2006 and
On the issue28 of the NLRCs denial of the respondents motion to reduce June 30, 2006 Resolutions of the National Labor Relations Commission in
appeal bond, the CA ruled that the NLRC committed grave abuse of NLRC NCR CA NO. 042913-05 dismissing respondents appeal for failure
discretion in immediately denying the motion without fixing an appeal bond to perfect an appeal and denying their motion for reconsideration,
in an amount that was reasonable, as it denied the respondents of their respectively, are REINSTATED and AFFIRMED.
right to appeal from the decision of the LA.29 The CA explained that "(w)hile SO ORDERED.38
Art. 223 of the Labor Code requiring bond equivalent to the monetary
award is explicit, Section 6, Rule VI of the NLRC Rules of Procedure, as The Court explained that the respondents failure to post a bond equivalent
amended, recognized as exception a motion to reduce bond upon in amount to the LAs monetary award was fatal to the appeal.39 Although
Page 29 of 52 | LABREL 4E | FT CASES B1

an appeal bond may be reduced upon motion by an employer, the following I.


conditions must first be satisfied: (1) the motion to reduce bond shall be THE PREVIOUS 15 MARCH 2010 RESOLUTION OF THE HONORABLE
based on meritorious grounds; and (2) a reasonable amount in relation to COURT ACTUALLY GRANTED RESPONDENTS "MOTION FOR LEAVE
the monetary award is posted by the appellant. Unless the NLRC grants the TO SUBMIT A SECOND MOTION FOR RECONSIDERATION."
motion to reduce the cash bond within the 10-day reglementary period to
perfect an appeal from a judgment of the LA, the employer is mandated to HENCE, RESPONDENTS RESPECTFULLY CONTEND THAT THE
post the cash or surety bond securing the full amount within the said 10-day SUBSEQUENT 25 JANUARY 2012 RESOLUTION CANNOT DENY THE "
period.40 The respondents initial appeal bond of P100,000.00 was grossly SECOND MOTION FOR RECONSIDERATION " ON THE GROUND THAT
inadequate compared to the LAs monetary award. IT IS A PROHIBITED PLEADING. MOREOVER, IT IS RESPECTFULLY
CONTENDED THAT THERE ARE VERY PECULIAR CIRCUMSTANCES
The respondents first motion for reconsideration41 was denied by the Court AND NUMEROUS IMPORTANT ISSUES IN THESE CASES THAT
for lack of merit via a Resolution42dated December 14, 2009. CLEARLY JUSTIFY GIVING DUE COURSE TO RESPONDENTS
Meanwhile, on the basis of the Courts Decision, McBurnie filed with the "SECOND MOTION FOR RECONSIDERATION," WHICH ARE:
NLRC a motion for reconsideration with motion to recall and expunge from II.
the records the NLRC Decision dated November 17, 2009.43 The motion
was granted by the NLRC in its Decision44 dated January 14, 2010.45 THE 10 MILLION PESOS BOND WHICH WAS POSTED IN COMPLIANCE
WITH THE OCTOBER 27, 2008 DECISION OF THE COURT OF APPEALS
Undaunted by the denial of their first motion for reconsideration of the IS A SUBSTANTIAL AND SPECIAL MERITORIOUS CIRCUMSTANCE TO
Decision dated September 18, 2009, the respondents filed with the Court a MERIT RECONSIDERATION OF THIS APPEAL.
Motion for Leave to Submit Attached Second Motion for
Reconsideration46 and Second Motion for Reconsideration,47 which motion III.
for leave was granted in a Resolution48 dated March 15, 2010. McBurnie THE HONORABLE COURT HAS HELD IN NUMEROUS LABOR CASES
was allowed to submit his comment on the second motion, and the THAT WITH RESPECT TO ARTICLE 223 OF THE LABOR CODE, THE
respondents, their reply to the comment. On January 25, 2012, however, REQUIREMENTS OF THE LAW SHOULD BE GIVEN A LIBERAL
the Court issued a Resolution49 denying the second motion "for lack of I N T E R P R E TAT I O N , E S P E C I A L LY I F T H E R E A R E S P E C I A L
merit," "considering that a second motion for reconsideration is a prohibited MERITORIOUS CIRCUMSTANCES AND ISSUES.
pleading x x x."50
IV. THE LAS JUDGMENT WAS PATENTLY VOID SINCE IT AWARDS
The Courts Decision dated September 18, 2009 became final and MORE THAN P60 MILLION PESOS TO A SINGLE FOREIGNER WHO
executory on March 14, 2012. Thus, entry of judgment51 was made in due HAD NO WORK PERMIT, AND NO WORKING VISA.
course, as follows:
V.
ENTRY OF JUDGMENT
PETITIONER MCBURNIE DID NOT IMPLEAD THE NATIONAL LABOR
This is to certify that on September 18, 2009 a decision rendered in the RELATIONS COMMISSION (NLRC) IN HIS APPEAL HEREIN, MAKING
above-entitled cases was filed in this Office, the dispositive part of which THE APPEAL INEFFECTIVE AGAINST THE NLRC.
reads as follows:
VI.
xxxx
NLRC HAS DISMISSED THE COMPLAINT OF PETITIONER MCBURNIE
and that the same has, on March 14, 2012 become final and executory and IN ITS NOVEMBER 17, 2009 DECISION.
is hereby recorded in the Book of Entries of Judgments.52
VII.
The Entry of Judgment indicated that the same was made for the Courts
Decision rendered in G.R. Nos. 186984-85. THE HONORABLE COURTS 18 SEPTEMBER 2009 DECISION WAS
TAINTED WITH VERY SERIOUS IRREGULARITIES.
On March 27, 2012, the respondents filed a Motion for Leave to File
Attached Third Motion for Reconsideration, with an attached Motion for VIII.
Reconsideration (on the Honorable Courts 25 January 2012 Resolution) GR NOS. 178034 AND 178117 HAVE BEEN INADVERTENTLY INCLUDED
with Motion to Refer These Cases to the Honorable Court En Banc.53 The IN THIS CASE.
third motion for reconsideration is founded on the following grounds:
Page 30 of 52 | LABREL 4E | FT CASES B1

IX. In light of pertinent law and jurisprudence, and upon taking a second hard
look of the parties arguments and the records of the case, the Court has
THE HONORABLE COURT DID NOT DULY RULE UPON THE OTHER
ascertained that a reconsideration of this Courts Decision dated
VERY MERITORIOUS ARGUMENTS OF THE RESPONDENTS WHICH
September 18, 2009 and Resolutions dated December 14, 2009 and
ARE AS FOLLOWS:
January 25, 2012, along with the lifting of the entry of judgment in G.R. No.
(A) PETITIONER NEVER ATTENDED ANY OF ALL 14 HEARINGS 186984-85, is in order.
BEFORE THE [LA] (WHEN 2 MISSED HEARINGS MEAN
The Courts acceptance of the
DISMISSAL).
third motion for reconsideration
(B) PETITIONER REFERRED TO HIMSELF AS A "VICTIM" OF
LEISURE EXPERTS, INC., BUT NOT OF ANY OF THE At the outset, the Court emphasizes that second and subsequent motions
RESPONDENTS. for reconsideration are, as a general rule, prohibited. Section 2, Rule 52 of
the Rules of Court provides that "no second motion for reconsideration of a
(C) PETITIONERS POSITIVE LETTER TO RESPONDENT MR.
judgment or final resolution by the same party shall be entertained." The
EULALIO GANZON CLEARLY SHOWS THAT HE WAS NOT
rule rests on the basic tenet of immutability of judgments. "At some point, a
ILLEGALLY DISMISSED NOR EVEN DISMISSED BY ANY OF
decision becomes final and executory and, consequently, all litigations must
THE RESPONDENTS AND PETITIONER EVEN PROMISED TO
come to an end."58
PAY HIS DEBTS FOR ADVANCES MADE BY RESPONDENTS.
The general rule, however, against second and subsequent motions for
(D) PETITIONER WAS NEVER EMPLOYED BY ANY OF THE
reconsideration admits of settled exceptions. For one, the present Internal
RESPONDENTS. PETITIONER PRESENTED WORK FOR
Rules of the Supreme Court, particularly Section 3, Rule 15 thereof,
CORONADO BEACH RESORT WHICH IS [NEITHER] OWNED
provides:
NOR CONNECTED WITH ANY OF THE RESPONDENTS.
Sec. 3. Second motion for reconsideration. The Court shall not entertain
(E) THE [LA] CONCLUDED THAT PETITIONER WAS DISMISSED
a second motion for reconsideration, and any exception to this rule can only
EVEN IF THERE WAS ABSOLUTELY NO EVIDENCE AT ALL
be granted in the higher interest of justice by the Court en banc upon a vote
PRESENTED THAT PETITIONER WAS DISMISSED BY THE
of at least two-thirds of its actual membership. There is reconsideration "in
RESPONDENTS.
the higher interest of justice" when the assailed decision is not only legally
(F) PETITIONER LEFT THE PHILIPPINES FOR AUSTRALIA JUST erroneous, but is likewise patently unjust and potentially capable of causing
2 M O N T H S A F T E R T H E S TA R T O F T H E A L L E G E D unwarranted and irremediable injury or damage to the parties. A second
EMPLOYMENT AGREEMENT, AND HAS STILL NOT RETURNED motion for reconsideration can only be entertained before the ruling sought
TO THE PHILIPPINES AS CONFIRMED BY THE BUREAU OF to be reconsidered becomes final by operation of law or by the Courts
IMMIGRATION. declaration.
( G ) P E T I T I O N E R C O U L D N O T H AV E S I G N E D A N D x x x x (Emphasis ours)
P E R S O N A L LY A P P E A R E D B E F O R E T H E N L R C
In a line of cases, the Court has then entertained and granted second
ADMINISTERING OFFICER AS INDICATED IN THE COMPLAINT
motions for reconsideration "in the higher interest of substantial justice," as
SHEET SINCE HE LEFT THE COUNTRY 3 YEARS BEFORE THE
allowed under the Internal Rules when the assailed decision is "legally
COMPLAINT WAS FILED AND HE NEVER CAME BACK.54
erroneous," "patently unjust" and "potentially capable of causing
O n S e p t e m b e r 4 , 2 0 1 2 , t h e C o u r t e n b a n c55 i s s u e d a unwarranted and irremediable injury or damage to the parties." In Tirazona
Resolution56 accepting the case from the Third Division. It also issued a v. Philippine EDS Techno-Service, Inc. (PET, Inc.),59 we also explained that
temporary restraining order (TRO) enjoining the implementation of the LAs a second motion for reconsideration may be allowed in instances of
Decision dated September 30, 2004. This prompted McBurnies filing of a "extraordinarily persuasive reasons and only after an express leave shall
Motion for Reconsideration,57 where he invoked the fact that the Courts have been obtained."60 In Apo Fruits Corporation v. Land Bank of the
Decision dated September 18, 2009 had become final and executory, with Philippines,61 we allowed a second motion for reconsideration as the issue
an entry of judgment already made by the Court. involved therein was a matter of public interest, as it pertained to the proper
Our Ruling application of a basic constitutionally-guaranteed right in the governments
implementation of its agrarian reform program. In San Miguel Corporation v.
Page 31 of 52 | LABREL 4E | FT CASES B1

NLRC,62 the Court set aside the decisions of the LA and the NLRC that intervenors the right to be heard since they would be adversely affected by
favored claimants-security guards upon the Courts review of San Miguel the judgment in this case despite not being original parties thereto, but also
Corporations second motion for reconsideration. In Vir-Jen Shipping and to arrive at the correct interpretation of the provisions of the [Local
Marine Services, Inc. v. NLRC, et al.,63 the Court en banc reversed on a Government Code (LGC)] with respect to the creation of local government
third motion for reconsideration the ruling of the Courts Division on therein units. x x x.68(Citations omitted)
private respondents claim for wages and monetary benefits. In Munoz v. CA,69 the Court resolved to recall an entry of judgment to
It is also recognized that in some instances, the prudent action towards a prevent a miscarriage of justice. This justification was likewise applied in
just resolution of a case is for the Court to suspend rules of procedure, for Tan Tiac Chiong v. Hon. Cosico,70 wherein the Court held that:
"the power of this Court to suspend its own rules or to except a particular The recall of entries of judgments, albeit rare, is not a novelty. In Muoz v.
case from its operations whenever the purposes of justice require it, cannot CA , where the case was elevated to this Court and a first and second
be questioned."64 In De Guzman v. Sandiganbayan,65 the Court, thus, motion for reconsideration had been denied with finality , the Court, in the
explained: interest of substantial justice, recalled the Entry of Judgment as well as the
The rules of procedure should be viewed as mere tools designed to letter of transmittal of the records to the Court of Appeals.71 (Citation
facilitate the attainment of justice. Their strict and rigid application, which omitted)
would result in technicalities that tend to frustrate rather than promote In Barnes v. Judge Padilla,72 we ruled:
substantial justice, must always be avoided. Even the Rules of Court
envision this liberality. This power to suspend or even disregard the rules A final and executory judgment can no longer be attacked by any of the
can be so pervasive and encompassing so as to alter even that which this parties or be modified, directly or indirectly, even by the highest court of the
Court itself has already declared to be final, as we are now compelled to do land.
in this case. x x x. However, this Court has relaxed this rule in order to serve substantial
xxxx justice considering (a) matters of life, liberty, honor or property, (b) the
existence of special or compelling circumstances, (c) the merits of the case,
The Rules of Court was conceived and promulgated to set forth guidelines (d) a cause not entirely attributable to the fault or negligence of the party
in the dispensation of justice but not to bind and chain the hand that favored by the suspension of the rules, (e) a lack of any showing that the
dispenses it, for otherwise, courts will be mere slaves to or robots of review sought is merely frivolous and dilatory, and (f) the other party will not
technical rules, shorn of judicial discretion. That is precisely why courts in be unjustly prejudiced thereby.73 (Citations omitted)
rendering real justice have always been, as they in fact ought to be,
conscientiously guided by the norm that when on the balance, technicalities As we shall explain, the instant case also qualifies as an exception to, first,
take a backseat against substantive rights, and not the other way around. the proscription against second and subsequent motions for
Truly then, technicalities, in the appropriate language of Justice Makalintal, reconsideration, and second, the rule on immutability of judgments; a
"should give way to the realities of the situation." x x x.66 (Citations omitted) reconsideration of the Decision dated September 18, 2009, along with the
Resolutions dated December 14, 2009 and January 25, 2012, is justified by
Consistent with the foregoing precepts, the Court has then reconsidered the higher interest of substantial justice.
even decisions that have attained finality, finding it more appropriate to lift
entries of judgments already made in these cases. In Navarro v. Executive To begin with, the Court agrees with the respondents that the Courts prior
Secretary,67 we reiterated the pronouncement in De Guzman that the power resolve to grant , and not just merely note, in a Resolution dated March 15,
to suspend or even disregard rules of procedure can be so pervasive and 2010 the respondents motion for leave to submit their second motion for
compelling as to alter even that which this Court itself has already declared reconsideration already warranted a resolution and discussion of the
final. The Court then recalled in Navarro an entry of judgment after it had motion for reconsideration on its merits. Instead of doing this, however, the
determined the validity and constitutionality of Republic Act No. 9355, Court issued on January 25, 2012 a Resolution74 denying the motion to
explaining that: reconsider for lack of merit, merely citing that it was a "prohibited pleading
under Section 2, Rule 52 in relation to Section 4, Rule 56 of the 1997 Rules
Verily, the Court had, on several occasions, sanctioned the recall of entries of Civil Procedure, as amended."75 In League of Cities of the Philippines
of judgment in light of attendant extraordinary circumstances. The power to (LCP) v. Commission on Elections,76 we reiterated a ruling that when a
suspend or even disregard rules of procedure can be so pervasive and motion for leave to file and admit a second motion for reconsideration is
compelling as to alter even that which this Court itself had already declared granted by the Court, the Court therefore allows the filing of the second
final. In this case, the compelling concern is not only to afford the movants-
Page 32 of 52 | LABREL 4E | FT CASES B1

motion for reconsideration. In such a case, the second motion for the perfection of an appeal by the employer as inferred from the provision
reconsideration is no longer a prohibited pleading. Similarly in this case, that an appeal by the employer may be perfected "only upon the posting of
there was then no reason for the Court to still consider the respondents a cash or surety bond." The word "only" makes it clear that the posting of a
second motion for reconsideration as a prohibited pleading, and deny it cash or surety bond by the employer is the essential and exclusive means
plainly on such ground. The Court intends to remedy such error through by which an employers appeal may be perfected. x x x.
this resolution. Moreover, the filing of the bond is not only mandatory but a jurisdictional
More importantly, the Court finds it appropriate to accept the pending requirement as well, that must be complied with in order to confer
motion for reconsideration and resolve it on the merits in order to rectify its jurisdiction upon the NLRC. Non-compliance therewith renders the decision
prior disposition of the main issues in the petition. Upon review, the Court is of the Labor Arbiter final and executory. This requirement is intended to
constrained to rule differently on the petitions. We have determined the assure the workers that if they prevail in the case, they will receive the
grave error in affirming the NLRCs rulings, promoting results that are money judgment in their favor upon the dismissal of the employers appeal.
patently unjust for the respondents, as we consider the facts of the case, It is intended to discourage employers from using an appeal to delay or
pertinent law, jurisprudence, and the degree of the injury and damage to evade their obligation to satisfy their employees just and lawful claims.
the respondents that will inevitably result from the implementation of the xxxx
Courts Decision dated September 18, 2009.
Thus, it behooves the Court to give utmost regard to the legislative and
The rule on appeal bonds administrative intent to strictly require the employer to post a cash or surety
We emphasize that the crucial issue in this case concerns the sufficiency of bond securing the full amount of the monetary award within the 10[-]day
the appeal bond that was posted by the respondents. The present rule on reglementary period. Nothing in the Labor Code or the NLRC Rules of
the matter is Section 6, Rule VI of the 2011 NLRC Rules of Procedure, Procedure authorizes the posting of a bond that is less than the monetary
which was substantially the same provision in effect at the time of the award in the judgment, or would deem such insufficient posting as sufficient
respondents appeal to the NLRC, and which reads: to perfect the appeal.
RULE VI While the bond may be reduced upon motion by the employer, this is
APPEALS subject to the conditions that (1) the motion to reduce the bond shall be
based on meritorious grounds; and (2) a reasonable amount in relation to
Sec. 6. BOND. In case the decision of the Labor Arbiter or the Regional
the monetary award is posted by the appellant, otherwise the filing of the
Director involves a monetary award, an appeal by the employer may be
motion to reduce bond shall not stop the running of the period to perfect an
perfected only upon the posting of a cash or surety bond. The appeal bond
appeal. The qualification effectively requires that unless the NLRC grants
shall either be in cash or surety in an amount equivalent to the monetary
the reduction of the cash bond within the 10-day reglementary period, the
award, exclusive of damages and attorneys fees.
employer is still expected to post the cash or surety bond securing the full
xxxx amount within the said 10-day period. If the NLRC does eventually grant
No motion to reduce bond shall be entertained except on meritorious the motion for reduction after the reglementary period has elapsed, the
grounds and upon the posting of a bond in a reasonable amount in relation correct relief would be to reduce the cash or surety bond already posted by
to the monetary award. the employer within the 10-day period.77 (Emphasis supplied; underscoring
ours)
The filing of the motion to reduce bond without compliance with the
requisites in the preceding paragraph shall not stop the running of the To begin with, the Court rectifies its prior pronouncement the unqualified
period to perfect an appeal. (Emphasis supplied) statement that even an appellant who seeks a reduction of an appeal bond
before the NLRC is expected to post a cash or surety bond securing the full
While the CA, in this case, allowed an appeal bond in the reduced amount amount of the judgment award within the 10-day reglementary period to
of P10,000,000.00 and then ordered the cases remand to the NLRC, this perfect the appeal.
Courts Decision dated September 18, 2009 provides otherwise, as it reads
in part:
The posting of a bond is indispensable to the perfection of an appeal in
cases involving monetary awards from the decision of the Labor Arbiter.
The lawmakers clearly intended to make the bond a mandatory requisite for
Page 33 of 52 | LABREL 4E | FT CASES B1

The suspension of the period to substantial justice; (2) prevention of miscarriage of justice or of unjust
perfect the appeal upon the filing of enrichment; and (3) special circumstances of the case combined with its
a motion to reduce bond legal merits, and the amount and the issue involved."80(Citations omitted
and emphasis ours)
To clarify, the prevailing jurisprudence on the matter provides that the filing
of a motion to reduce bond, coupled with compliance with the two A serious error of the NLRC was its outright denial of the motion to reduce
conditions emphasized in Garcia v. KJ Commercial78 for the grant of such the bond, without even considering the respondents arguments and totally
motion, namely, (1) a meritorious ground, and (2) posting of a bond in a unmindful of the rules and jurisprudence that allow the bonds reduction.
reasonable amount, shall suffice to suspend the running of the period to Instead of resolving the motion to reduce the bond on its merits, the NLRC
perfect an appeal from the labor arbiters decision to the NLRC.79 To insisted on an amount that was equivalent to the monetary award, merely
require the full amount of the bond within the 10-day reglementary period explaining:
would only render nugatory the legal provisions which allow an appellant to We are constrained to deny respondents motion for reduction. As held by
seek a reduction of the bond. Thus, we explained in Garcia: the Supreme Court in a recent case, in cases involving monetary award, an
The filing of a motion to reduce bond and compliance with the two employer seeking to appeal the Labor Arbiters decision to the Commission
conditions stop the running of the period to perfect an appeal. x x x is unconditionally required by Art. 223, Labor Code to post bond in the
amount equivalent to the monetary award (Calabash Garments vs. NLRC,
xxxx
G.R. No. 110827, August 8, 1996). x x x81 (Emphasis ours)
The NLRC has full discretion to grant or deny the motion to reduce bond,
When the respondents sought to reconsider, the NLRC still refused to fully
and it may rule on the motion beyond the 10-day period within which to
decide on the motion. It refused to at least make a preliminary
perfect an appeal. Obviously, at the time of the filing of the motion to reduce
determination of the merits of the appeal, as it held:
bond and posting of a bond in a reasonable amount, there is no assurance
whether the appellants motion is indeed based on "meritorious ground" We are constrained to dismiss respondents Motion for Reconsideration.
and whether the bond he or she posted is of a "reasonable amount." Thus, Respondents contention that the appeal bond is excessive and based on a
the appellant always runs the risk of failing to perfect an appeal. decision which is a patent nullity involves the merits of the case. x x x82
x x x In order to give full effect to the provisions on motion to reduce bond, Prevailing rules and jurisprudence
the appellant must be allowed to wait for the ruling of the NLRC on the allow the reduction of appeal bonds.
motion even beyond the 10-day period to perfect an appeal. If the NLRC By such haste of the NLRC in peremptorily denying the respondents
grants the motion and rules that there is indeed meritorious ground and that motion without considering the respondents arguments, it effectively
the amount of the bond posted is reasonable, then the appeal is perfected. denied the respondents of their opportunity to seek a reduction of the bond
If the NLRC denies the motion, the appellant may still file a motion for even when the same is allowed under the rules and settled jurisprudence. It
reconsideration as provided under Section 15, Rule VII of the Rules. If the was equivalent to the NLRCs refusal to exercise its discretion, as it refused
NLRC grants the motion for reconsideration and rules that there is indeed to determine and rule on a showing of meritorious grounds and the
meritorious ground and that the amount of the bond posted is reasonable, reasonableness of the bond tendered under the circumstances.83 Time and
then the appeal is perfected. If the NLRC denies the motion, then the again, the Court has cautioned the NLRC to give Article 223 of the Labor
decision of the labor arbiter becomes final and executory. Code, particularly the provisions requiring bonds in appeals involving
xxxx monetary awards, a liberal interpretation in line with the desired objective of
resolving controversies on the merits.84 The NLRCs failure to take action
In any case, the rule that the filing of a motion to reduce bond shall not stop
on the motion to reduce the bond in the manner prescribed by law and
the running of the period to perfect an appeal is not absolute. The Court
jurisprudence then cannot be countenanced. Although an appeal by parties
may relax the rule. In Intertranz Container Lines, Inc. v. Bautista, the Court
from decisions that are adverse to their interests is neither a natural right
held:
nor a part of due process, it is an essential part of our judicial system.
"Jurisprudence tells us that in labor cases, an appeal from a decision Courts should proceed with caution so as not to deprive a party of the right
involving a monetary award may be perfected only upon the posting of cash to appeal, but rather, ensure that every party has the amplest opportunity
or surety bond. The Court, however, has relaxed this requirement under for the proper and just disposition of their cause, free from the constraints
certain exceptional circumstances in order to resolve controversies on their of technicalities.85 Considering the mandate of labor tribunals, the principle
merits. These circumstances include: (1) fundamental consideration of equally applies to them.
Page 34 of 52 | LABREL 4E | FT CASES B1

Given the circumstances of the case, the Courts affirmance in the Decision appellants, its posting may also signify their good faith and willingness to
dated September 18, 2009 of the NLRCs strict application of the rule on recognize the final outcome of their appeal.
appeal bonds then demands a re-examination. Again, the emerging trend in At the time of a motion to reduce appeal bonds filing, the question of what
our jurisprudence is to afford every party-litigant the amplest opportunity for constitutes "a reasonable amount of bond" that must accompany the
the proper and just determination of his cause, free from the constraints of motion may be subject to differing interpretations of litigants. The judgment
technicalities.86 Section 2, Rule I of the NLRC Rules of Procedure also of the NLRC which has the discretion under the law to determine such
provides the policy that "the Rules shall be liberally construed to carry out amount cannot as yet be invoked by litigants until after their motions to
the objectives of the Constitution, the Labor Code of the Philippines and reduce appeal bond are accepted.
other relevant legislations, and to assist the parties in obtaining just,
expeditious and inexpensive resolution and settlement of labor disputes."87 Given these limitations, it is not uncommon for a party to unduly forfeit his
opportunity to seek a reduction of the required bond and thus, to appeal,
In accordance with the foregoing, although the general rule provides that an when the NLRC eventually disagrees with the partys assessment. These
appeal in labor cases from a decision involving a monetary award may be have also resulted in the filing of numerous petitions against the NLRC,
perfected only upon the posting of a cash or surety bond, the Court has citing an alleged grave abuse of discretion on the part of the labor tribunal
relaxed this requirement under certain exceptional circumstances in order for its finding on the sufficiency or insufficiency of posted appeal bonds.
to resolve controversies on their merits. These circumstances include: (1)
the fundamental consideration of substantial justice; (2) the prevention of It is in this light that the Court finds it necessary to set a parameter for the
miscarriage of justice or of unjust enrichment; and (3) special litigants and the NLRCs guidance on the amount of bond that shall
circumstances of the case combined with its legal merits, and the amount hereafter be filed with a motion for a bonds reduction. To ensure that the
and the issue involved.88 Guidelines that are applicable in the reduction of provisions of Section 6, Rule VI of the NLRC Rules of Procedure that give
appeal bonds were also explained in Nicol v. Footjoy Industrial Corporation. parties the chance to seek a reduction of the appeal bond are effectively
89 The bond requirement in appeals involving monetary awards has been carried out, without however defeating the benefits of the bond requirement
and may be relaxed in meritorious cases, including instances in which (1) in favor of a winning litigant, all motions to reduce bond that are to be filed
there was substantial compliance with the Rules, (2) surrounding facts and with the NLRC shall be accompanied by the posting of a cash or surety
circumstances constitute meritorious grounds to reduce the bond, (3) a bond equivalent to 10% of the monetary award that is subject of the appeal,
liberal interpretation of the requirement of an appeal bond would serve the which shall provisionally be deemed the reasonable amount of the bond in
desired objective of resolving controversies on the merits, or (4) the the meantime that an appellants motion is pending resolution by the
appellants, at the very least, exhibited their willingness and/or good faith by Commission. In conformity with the NLRC Rules, the monetary award, for
posting a partial bond during the reglementary period.90 the purpose of computing the necessary appeal bond, shall exclude
damages and attorneys fees.94 Only after the posting of a bond in the
In Blancaflor v. NLRC,91 the Court also emphasized that while Article required percentage shall an appellants period to perfect an appeal under
22392 of the Labor Code, as amended by Republic Act No. 6715, which the NLRC Rules be deemed suspended.
requires a cash or surety bond in an amount equivalent to the monetary
award in the judgment appealed from may be considered a jurisdictional The foregoing shall not be misconstrued to unduly hinder the NLRCs
requirement for the perfection of an appeal, nevertheless, adhering to the exercise of its discretion, given that the percentage of bond that is set by
principle that substantial justice is better served by allowing the appeal on this guideline shall be merely provisional. The NLRC retains its authority
the merits to be threshed out by the NLRC, the foregoing requirement of and duty to resolve the motion and determine the final amount of bond that
the law should be given a liberal interpretation. shall be posted by the appellant, still in accordance with the standards of
"meritorious grounds" and "reasonable amount". Should the NLRC, after
As the Court, nonetheless, remains firm on the importance of appeal bonds considering the motions merit, determine that a greater amount or the full
in appeals from monetary awards of LAs, we stress that the NLRC, amount of the bond needs to be posted by the appellant, then the party
pursuant to Section 6, Rule VI of the NLRC Rules of Procedure, shall only shall comply accordingly. The appellant shall be given a period of 10 days
accept motions to reduce bond that are coupled with the posting of a bond from notice of the NLRC order within which to perfect the appeal by posting
in a reasonable amount. Time and again, we have explained that the bond the required appeal bond.
requirement imposed upon appellants in labor cases is intended to ensure
the satisfaction of awards that are made in favor of appellees, in the event Meritorious ground as a condition
that their claims are eventually sustained by the courts.93 On the part of the for the reduction of the appeal bond
Page 35 of 52 | LABREL 4E | FT CASES B1

In all cases, the reduction of the appeal bond shall be justified by It is understood that this Contract is made subject to the understanding that
meritorious grounds and accompanied by the posting of the required it is effective only when the project financing for our Baguio Hotel project
appeal bond in a reasonable amount. pushed through.
The requirement on the existence of a "meritorious ground" delves on the The agreement with EGI Managers, Inc. is made now to support your need
worth of the parties arguments, taking into account their respective rights to facilitate your work permit with the Department of Labor in view of the
and the circumstances that attend the case. The condition was emphasized expiration of your contract with Pan Pacific.
in University Plans Incorporated v. Solano,95 wherein the Court held that Regards,
while the NLRCs Revised Rules of Procedure "allows the [NLRC] to reduce
the amount of the bond, the exercise of the authority is not a matter of right Sgd. Eulalio Ganzon (p. 203, Records)103
on the part of the movant, but lies within the sound discretion of the NLRC For the NLRC, the employment agreement could not have given rise to an
upon a showing of meritorious grounds."96 By jurisprudence, the merit employer-employee relationship by reason of legal impossibility. The two
referred to may pertain to an appellants lack of financial capability to pay conditions that form part of their agreement, namely, the successful
the full amount of the bond,97 the merits of the main appeal such as when completion of the project financing for the hotel project in Baguio City and
there is a valid claim that there was no illegal dismissal to justify the award, McBurnies acquisition of an Alien Employment Permit, remained
98 the absence of an employer-employee relationship,99 prescription of
unsatisfied.104 The NLRC concluded that McBurnie was instead a potential
claims,100 and other similarly valid issues that are raised in the appeal. investor in a project that included Ganzon, but the said project failed to
101 For the purpose of determining a "meritorious ground", the NLRC is not
pursue due to lack of funds. Any work performed by McBurnie in relation to
precluded from receiving evidence, or from making a preliminary the project was merely preliminary to the business venture and part of his
determination of the merits of the appellants contentions.102 "due diligence" study before pursuing the project, "done at his own
In this case, the NLRC then should have considered the respondents instance, not in furtherance of the employment contract but for his own
arguments in the memorandum on appeal that was filed with the motion to investment purposes."105 Lastly, the alleged employment of the petitioner
reduce the requisite appeal bond. Although a consideration of said would have been void for being contrary to law, since it is undisputed that
arguments at that point would have been merely preliminary and should not McBurnie did not have any work permit. The NLRC declared:
in any way bind the eventual outcome of the appeal, it was apparent that Absent an employment permit, any employment relationship that McBurnie
the respondents defenses came with an indication of merit that deserved a contemplated with the respondents was void for being contrary to law. A
full review of the decision of the LA. The CA, by its Resolution dated void or inexistent contract, in turn, has no force and effect from the
February 16, 2007, even found justified the issuance of a preliminary beginning as if it had never been entered into. Thus, without an Alien
injunction to enjoin the immediate execution of the LAs decision, and this Employment Permit, the "Employment Agreement" is void and could not be
Court, a temporary restraining order on September 4, 2012. the source of a right or obligation. In support thereof, the DOLE issued a
Significantly, following the CAs remand of the case to the NLRC, the latter certification that McBurnie has neither applied nor been issued an Alien
even rendered a Decision that contained findings that are inconsistent with Employment Permit (p. 204, Records).106
McBurnies claims. The NLRC reversed and set aside the decision of the McBurnie moved to reconsider, citing the Courts Decision of September
LA, and entered a new one dismissing McBurnies complaint. It explained 18, 2009 that reversed and set aside the CAs Decision authorizing the
that McBurnie was not an employee of the respondents; thus, they could remand. Although the NLRC granted the motion on the said ground via a
not have dismissed him from employment. The purported employment Decision107that set aside the NLRCs Decision dated November 17, 2009,
contract of the respondents with the petitioner was qualified by the the findings of the NLRC in the November 17, 2009 decision merit
conditions set forth in a letter dated May 11, 1999, which reads: consideration, especially since the findings made therein are supported by
May 11, 1999 the case records.
MR. ANDREW MCBURNIE In addition to the apparent merit of the respondents appeal, the Court finds
the reduction of the appeal bond justified by the substantial amount of the
Re: Employment Contract LAs monetary award. Given its considerable amount, we find reason in the
Dear Andrew, respondents claim that to require an appeal bond in such amount could
only deprive them of the right to appeal, even force them out of business
and affect the livelihood of their employees.108 In Rosewood Processing,
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Inc. v. NLRC,109 we emphasized: "Where a decision may be made to rest posted a bond in a "reasonable amount", and had thus complied with the
on informed judgment rather than rigid rules, the equities of the case must requirements for the perfection of an appeal from the LAs decision. The CA
be accorded their due weight because labor determinations should not be was correct in ruling that:
secundum rationem but also secundum caritatem."110 In the case of Nueva Ecija I Electric Cooperative, Inc. (NEECO I)
What constitutes a reasonable Employees Association, President Rodolfo Jimenez, and members,
amount in the determination of the Reynaldo Fajardo, et al. vs. NLRC, Nueva Ecija I Electric Cooperative, Inc.
final amount of appeal bond (NEECO I) and Patricio de la Pea (GR No. 116066, January 24, 2000), the
Supreme Court recognized that: "the NLRC, in its Resolution No. 11-01-91
As regards the requirement on the posting of a bond in a "reasonable
dated November 7, 1991 deleted the phrase "exclusive of moral and
amount," the Court holds that the final determination thereof by the NLRC
exemplary damages as well as attorneys fees in the determination of the
shall be based primarily on the merits of the motion and the main appeal.
amount of bond, and provided a safeguard against the imposition of
Although the NLRC Rules of Procedure, particularly Section 6 of Rule VI excessive bonds by providing that "(T)he Commission may in meritorious
thereof, provides that the bond to be posted shall be "in a reasonable cases and upon motion of the appellant, reduce the amount of the bond."
amount in relation to the monetary award ," the merit of the motion shall
In the case of Cosico, Jr. vs. NLRC, 272 SCRA 583, it was held:
always take precedence in the determination. Settled is the rule that
procedural rules were conceived, and should thus be applied in a manner "The unreasonable and excessive amount of bond would be oppressive
that would only aid the attainment of justice. If a stringent application of the and unjust and would have the effect of depriving a party of his right to
rules would hinder rather than serve the demands of substantial justice, the appeal."
former must yield to the latter.111 xxxx
Thus, in Nicol where the appellant posted a bond of P10,000,000.00 upon In dismissing outright the motion to reduce bond filed by petitioners, NLRC
an appeal from the LAs award of P51,956,314.00, the Court, instead of abused its discretion. It should have fixed an appeal bond in a reasonable
ruling right away on the reasonableness of the bonds amount solely on the amount. Said dismissal deprived petitioners of their right to appeal the
basis of the judgment award, found it appropriate to remand the case to the Labor Arbiters decision.
NLRC, which should first determine the merits of the motion. In University
Plans,112 the Court also reversed the outright dismissal of an appeal where xxxx
the bond posted in a judgment award of more than P30,000,000.00 NLRC Rules allow reduction of appeal bond on meritorious grounds (Sec.
was P30,000.00. The Court then directed the NLRC to first determine the 6, Rule VI, NLRC Rules of Procedure). This Court finds the appeal bond in
merit, or lack of merit, of the motion to reduce the bond, after the appellant the amount of P54,083,910.00 prohibitive and excessive, which constitutes
therein claimed that it was under receivership and thus, could not dispose a meritorious ground to allow a motion for reduction thereof.115
of its assets within a short notice. Clearly, the rule on the posting of an
appeal bond should not be allowed to defeat the substantive rights of the The foregoing declaration of the Court requiring a bond in a reasonable
parties.113 amount, taking into account the merits of the motion and the appeal, is
consistent with the oft-repeated principle that letter-perfect rules must yield
Notably, in the present case, following the CAs rendition of its Decision to the broader interest of substantial justice.116
which allowed a reduced appeal bond, the respondents have posted a
bond in the amount of P10,000,000.00. In Rosewood, the Court deemed The effect of a denial of the appeal
the posting of a surety bond of P50,000.00, coupled with a motion to to the NLRC
reduce the appeal bond, as substantial compliance with the legal
requirements for an appeal from a P789,154.39 monetary award In finding merit in the respondents motion for reconsideration, we also take
"considering the clear merits which appear, res ipsa loquitor, in the appeal into account the unwarranted results that will arise from an implementation
from the LAs Decision, and the petitioners substantial compliance with of the Courts Decision dated September 18, 2009. We emphasize,
rules governing appeals."114 The foregoing jurisprudence strongly indicate moreover, that although a remand and an order upon the NLRC to give due
that in determining the reasonable amount of appeal bonds, the Court course to the appeal would have been the usual course after a finding that
primarily considers the merits of the motions and appeals. the conditions for the reduction of an appeal bond were duly satisfied by the
respondents, given such results, the Court finds it necessary to modify the
Given the circumstances in this case and the merits of the respondents
arguments before the NLRC, the Court holds that the respondents had
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CAs order of remand, and instead rule on the dismissal of the complaint status quo must prevail in the present case and we leave the parties where
against the respondents. they are. This ruling, however, does not bar Galera from seeking relief from
other jurisdictions.119 (Citations omitted and underscoring ours)
Without the reversal of the Courts Decision and the dismissal of the
complaint against the respondents, McBurnie would be allowed to claim Clearly, this circumstance on the failure of McBurnie to obtain an
benefits under our labor laws despite his failure to comply with a settled employment permit, by itself, necessitates the dismissal of his labor
requirement for foreign nationals. complaint.
Considering that McBurnie, an Australian, alleged illegal dismissal and Furthermore, as has been previously discussed, the NLRC has ruled in its
sought to claim under our labor laws, it was necessary for him to establish, Decision dated November 17, 2009 on the issue of illegal dismissal. It
first and foremost, that he was qualified and duly authorized to obtain declared that McBurnie was never an employee of any of the respondents.
employment within our jurisdiction. A requirement for foreigners who intend 120 It explained:

to work within the country is an employment permit, as provided under All these facts and circumstances prove that McBurnie was never an
Article 40, Title II of the Labor Code which reads: employee of Eulalio Ganzon or the respondent companies, but a potential
Art. 40. Employment permit for non-resident aliens. Any alien seeking investor in a project with a group including Eulalio Ganzon and Martinez but
admission to the Philippines for employment purposes and any domestic or said project did not take off because of lack of funds.
foreign employer who desires to engage an alien for employment in the McBurnie further claims that in conformity with the provision of the
Philippines shall obtain an employment permit from the Department of employment contract pertaining to the obligation of the respondents to
Labor. provide housing, respondents assigned him Condo Unit # 812 of the Makati
In WPP Marketing Communications, Inc. v. Galera,117 we held that a foreign Cinema Square Condominium owned by the respondents. He was also
nationals failure to seek an employment permit prior to employment poses allowed to use a Hyundai car. If it were true that the contract of employment
a serious problem in seeking relief from the Court.118 Thus, although the was for working visa purposes only, why did the respondents perform their
respondent therein appeared to have been illegally dismissed from obligations to him?
employment, we explained: There is no question that respondents assigned him Condo Unit # 812 of
This is Galeras dilemma: Galera worked in the Philippines without proper the MCS, but this was not free of charge. If it were true that it is part of the
work permit but now wants to claim employees benefits under Philippine compensation package as employee, then McBurnie would not be
labor laws. obligated to pay anything, but clearly, he admitted in his letter that he had to
pay all the expenses incurred in the apartment.
xxxx
Assuming for the sake of argument that the employment contract is valid
The law and the rules are consistent in stating that the employment permit
between them, record shows that McBurnie worked from September 1,
must be acquired prior to employment. The Labor Code states: "Any alien
1999 until he met an accident on the last week of October. During the
seeking admission to the Philippines for employment purposes and any
period of employment, the respondents must have paid his salaries in the
domestic or foreign employer who desires to engage an alien for
sum of US$26,000.00, more or less.
employment in the Philippines shall obtain an employment permit from the
Department of Labor." Section 4, Rule XIV, Book I of the Implementing However, McBurnie failed to present a single evidence that [the
Rules and Regulations provides: respondents] paid his salaries like payslip, check or cash vouchers duly
signed by him or any document showing proof of receipt of his
"Employment permit required for entry. No alien seeking employment,
compensation from the respondents or activity in furtherance of the
whether as a resident or non-resident, may enter the Philippines without
employment contract. Granting again that there was a valid contract of
first securing an employment permit from the Ministry. If an alien enters the
employment, it is undisputed that on November 1, 1999, McBurnie left for
country under a non-working visa and wishes to be employed thereafter, he
Australia and never came back. x x x.121(Emphasis supplied)
may be allowed to be employed upon presentation of a duly approved
employment permit." Although the NLRCs Decision dated November 17, 2009 was set aside in
a Decision dated January 14, 2010, the Courts resolve to now reconsider
Galera cannot come to this Court with unclean hands. To grant Galeras
its Decision dated September 18, 2009 and to affirm the CAs Decision and
prayer is to sanction the violation of the Philippine labor laws requiring
Resolution in the respondents favor effectively restores the NLRCs basis
aliens to secure work permits before their employment. We hold that the
for rendering the Decision dated November 17, 2009.
Page 38 of 52 | LABREL 4E | FT CASES B1

More importantly, the NLRCs findings on the contractual relations between that the NLRC should now rule differently on the cases merits. In Medline
McBurnie and the respondents are supported by the records. Management, Inc. v. Roslinda,127 the Court ruled that when there is enough
basis on which the Court may render a proper evaluation of the merits of
First, before a case for illegal dismissal can prosper, an employer-employee
the case, the Court may dispense with the time-consuming procedure of
relationship must first be established.122 Although an employment
remanding a case to a labor tribunal in order "to prevent delays in the
agreement forms part of the case records, respondent Ganzon signed it
disposition of the case," "to serve the ends of justice" and when a remand
with the notation "per my note."123 The respondents have sufficiently
"would serve no purpose save to further delay its disposition contrary to the
explained that the note refers to the letter124dated May 11, 1999 which
spirit of fair play."128 In Real v. Sangu Philippines, Inc.,129 we again ruled:
embodied certain conditions for the employments effectivity. As we have
previously explained, however, the said conditions, particularly on the With the foregoing, it is clear that the CA erred in affirming the decision of
successful completion of the project financing for the hotel project in Baguio the NLRC which dismissed petitioners complaint for lack of jurisdiction. In
City and McBurnies acquisition of an Alien Employment Permit, failed to cases such as this, the Court normally remands the case to the NLRC and
materialize. Such defense of the respondents, which was duly considered directs it to properly dispose of the case on the merits. "However, when
by the NLRC in its Decision dated November 17, 2009, was not sufficiently there is enough basis on which a proper evaluation of the merits of
rebutted by McBurnie. petitioners case may be had, the Court may dispense with the time-
consuming procedure of remand in order to prevent further delays in the
Second, McBurnie failed to present any employment permit which would
disposition of the case." "It is already an accepted rule of procedure for us
have authorized him to obtain employment in the Philippines. This
to strive to settle the entire controversy in a single proceeding, leaving no
circumstance negates McBurnies claim that he had been performing work
root or branch to bear the seeds of litigation. If, based on the records, the
for the respondents by virtue of an employer-employee relationship. The
pleadings, and other evidence, the dispute can be resolved by us, we will
absence of the employment permit instead bolsters the claim that the
do so to serve the ends of justice instead of remanding the case to the
supposed employment of McBurnie was merely simulated, or did not ensue
lower court for further proceedings." x x x.130 (Citations omitted)
due to the non-fulfillment of the conditions that were set forth in the letter of
May 11, 1999. It bears mentioning that although the Court resolves to grant the
respondents motion for reconsideration, the other grounds raised in the
Third, besides the employment agreement, McBurnie failed to present other
motion, especially as they pertain to insinuations on irregularities in the
competent evidence to prove his claim of an employer-employee
Court, deserve no merit for being founded on baseless conclusions.
relationship. Given the parties conflicting claims on their true intention in
Furthermore, the Court finds it unnecessary to discuss the other grounds
executing the agreement, it was necessary to resort to the established
that are raised in the motion, considering the grounds that already justify
criteria for the determination of an employer-employee relationship, namely:
the dismissal of McBurnies complaint.
(1) the selection and engagement of the employee; (2) the payment of
wages; (3) the power of dismissal; and (4) the power to control the All these considered, the Court also affirms its Resolution dated September
employees conduct.125 The rule of thumb remains: the onus probandi falls 4, 2012; accordingly, McBurnies motion for reconsideration thereof is
on the claimant to establish or substantiate the claim by the requisite denied.
quantum of evidence. Whoever claims entitlement to the benefits provided WHEREFORE, in light of the foregoing, the Court rules as follows:
by law should establish his or her right thereto.126 McBurnie failed in this
regard.1wphi1 As previously observed by the NLRC, McBurnie even failed (a) The motion for reconsideration filed on September 26, 2012 by
to show through any document such as payslips or vouchers that his petitioner Andrew James McBurnie is DENIED;
salaries during the time that he allegedly worked for the respondents were (b) The motion for reconsideration filed on March 27, 2012 by
paid by the company. In the absence of an employer-employee relationship respondents Eulalio Ganzon, EGI-Managers, Inc. and E. Ganzon,
between McBurnie and the respondents, McBurnie could not successfully Inc. is GRANTED.
claim that he was dismissed, much less illegally dismissed, by the latter.
Even granting that there was such an employer-employee relationship, the (c) The Entry of Judgment issued in G.R. Nos. 186984-85 is
records are barren of any document showing that its termination was by the LIFTED. This Courts Decision dated September 18, 2009 and
respondents dismissal of McBurnie. Resolutions dated December 14, 2009 and January 25, 2012 are
SET ASIDE. The Court of Appeals Decision dated October 27,
Given these circumstances, it would be a circuitous exercise for the Court 2008 and Resolution dated March 3, 2009 in CA-G.R. SP No.
to remand the case to the NLRC, more so in the absence of any showing 90845 and CA-G.R. SP No. 95916 are AFFIRMED WITH
Page 39 of 52 | LABREL 4E | FT CASES B1

MODIFICATION. In lieu of a remand of the case to the National


Labor Relations Commission, the complaint for illegal dismissal
filed by petitioner Andrew James McBurnie against respondents
Eulalio Ganzon, EGI-Managers, Inc. and E. Ganzon, Inc. is
DISMISSED.
Furthermore, on the matter of the filing and acceptance of motions to
reduce appeal bond, as provided in Section 6, Rule VI of the 2011 NLRC
Rules of Procedure, the Court hereby RESOLVES that henceforth, the
following guidelines shall be observed:
(a) The filing o a motion to reduce appeal bond shall be entertained
by the NLRC subject to the following conditions: (1) there is
meritorious ground; and (2) a bond in a reasonable amount is
posted;
(b) For purposes o compliance with condition no. (2), a motion shall
be accompanied by the posting o a provisional cash or surety bond
equivalent to ten percent (10,) of the monetary award subject o the
appeal, exclusive o damages and attorney's fees;
(c) Compliance with the foregoing conditions shall suffice to
suspend the running o the 1 0-day reglementary period to perfect
an appeal from the labor arbiter's decision to the NLRC;
(d) The NLRC retains its authority and duty to resolve the motion to
reduce bond and determine the final amount o bond that shall be
posted by the appellant, still in accordance with the standards o
meritorious grounds and reasonable amount; and
(e) In the event that the NLRC denies the motion to reduce bond,
or requires a bond that exceeds the amount o the provisional bond,
the appellant shall be given a fresh period o ten 1 0) days from
notice o the NLRC order within which to perfect the appeal by
posting the required appeal bond.
SO ORDERED.
Page 40 of 52 | LABREL 4E | FT CASES B1

G.R. No. 196047 January 15, 2014 including its harness and his detergent soap which was inserted in the
skullguard harness. A few minutes later, private respondent saw SG
LEPANTO CONSOLIDATED MINING CORPORATION, Petitioner,
Bulwayan [pick] up a wrapped object at the bathing station and gave it to
vs.
his companion. SGs Bulwayan and Papsa-ao invited the private respondent
BELIO ICAO, Respondent.
to go with them at the investigation office to answer questions regarding the
DECISION wrapped object. He was then charged with "highgrading" or the act of
SERENO, CJ: concealing, possessing or unauthorized extraction of highgrade material/
ore without proper authority. Private respondent vehemently denied the
This Petition under Rule 45 of the Rules of Court seeks to annul and set charge. Consequently, he was dismissed from his work.
aside the Court of Appeals (CA) Decision dated 27 September 2010 and
the Resolution dated 11 March 2011 in CA-G.R. SP. No. 113095.1 In the Private respondent claimed that his dismissal from work was without just or
assailed Decision and Resolution, the CA upheld the Order of the National authorized cause since petitioners failed to prove by ample and sufficient
Labor and Relations Commission (NLRC) First Division dismissing evidence that he stole gold bearing highgrade ores from the company
petitioner s appeal for allegedly failing to post an appeal bond as required premises. If private respondent was really placing a wrapped object inside
by the Labor Code. Petitioner had instead filed a motion to release the cash his boots, he should have been sitting or bending down to insert the same,
bond it posted in another NLRC case which had been decided with finality instead of just standing on a muckpile as alleged by petitioners. Moreover,
in its favor with a view to applying the bond to the appealed case before the it is beyond imagination that a person, knowing fully well that he was being
NLRC First Division. Hence, the Court is now asked to rule whether chased for allegedly placing wrapped ore inside his boots, will transfer it to
petitioner had complied with the appeal bond requirement. If it had, its his skullguard. The tendency in such situation is to throw the object away.
appeal before the NLRC First Division should be reinstated. As such, private respondent prayed that petitioners be held liable for illegal
dismissal, to reinstate him to his former position without loss of seniority
The Facts rights and benefits, and to pay his full backwages, damages and attorneys
We quote the CA s narration of facts as follows: fees.
The instant petition stemmed from a complaint for illegal dismissal and For their defense, petitioners averred that SG Bulwayan saw private
damages filed by private respondent Belio C. Icao [Icao] against petitioners respondent standing on a muckpile and inserting a wrapped object inside
Lepanto Consolidated Mining Company (LCMC) and its Chief Executive his right rubber boot. SG Bulwayan immediately ran towards private
Officer [CEO] Felipe U. Yap [Yap] before the Arbitration Branch of the respondent, but the latter ran away to escape. He tried to chase private
NLRC. respondent but failed to capture him. Thereafter, while SG Bulwayan was
on his way to see his co-guard SG Papsa-ao, he saw private respondent
Private respondent essentially alleged in his complaint that he was an moving out of a stope. He then shouted at SG Papsa-ao to intercept him.
employee of petitioner LCMC assigned as a lead miner in its underground When private respondent was apprehended, SG Bulwayan ordered him to
mine in Paco, Mankayan, Benguet. On January 4, 2008, private respondent remove his skullguard for inspection and saw a wrapped object placed
reported for the 1st shift of work (11:00 p.m. to 7:00 a.m.) and was inside the helmet. SG Bulwayan grabbed it, but the harness of the
assigned at 248-8M2, 750 Level of the mining area. At their workplace, skullguard was also detached causing the object to fall on the ground.
private respondent did some barring down, installed five (5) rock bolt Immediately, SG Bulwayan recovered and inspected the same which
support, and drilled eight (8) blast holes for the mid-shift blast. They then turned out to be pieces of stone ores. Private respondent and the stone
had their meal break. When they went back to their workplace, they again ores were later turned over to the Mankayan Philippine National Police
barred down loose rocks and drilled eight (8) more blast holes for the last where he was given a written notice of the charge against him. On January
round of blast. While waiting for the time to ignite their round, one of his co- 9, 2008, a hearing was held where private respondent, together with the
workers shouted to prepare the explosives for blasting, prompting private officers of his union as well as the apprehending guards appeared. On
respondent to run to the adjacent panels and warn the other miners. February 4, 2008, private respondent received a copy of the resolution of
Thereafter, he decided to take a bath and proceeded at [sic] the bathing the company informing him of his dismissal from employment due to breach
station where four (4) of his co-workers were also present. Before he could of trust and confidence and the act of highgrading.2
join them, he heard a voice at his back and saw Security Guard (SG) Larry
Bulwayan instructing his companion SG Dale Papsa-ao to frisk him. As THE LABOR ARBITERS RULING THAT
private respondent was removing his boots, SG Bulwayan forcibly pulled PETITIONER LCMC IS LIABLE FOR ILLEGAL DISMISSAL
his skullguard from his head causing it to fall down [sic] to the ground
Page 41 of 52 | LABREL 4E | FT CASES B1

On 30 September 2008, the labor arbiter rendered a Decision holding The rules are clear. Appeals from decision involving a monetary award
petitioner and its CEO liable for illegal dismissal and ordering them to pay maybe [sic] perfected only upon posting of a cash or surety-bond within the
respondent Icao P345,879.45, representing his full backwages and ten (10) day reglementary period for filing an appeal. Failure to file and post
separation pay.3 The alleged highgrading attributed by LCMCs security the required appeal bond within the said period results in the appeal not
guards was found to have been fabricated; consequently, there was no just being perfected and the appealed judgment becomes final and executory.
cause for the dismissal of respondent. The labor arbiter concluded that the Thus, the Commission loses authority to entertain or act on the appeal
claim of the security guards that Icao had inserted ores in his boots while in much less reverse the decision of the Labor Arbiter (Gaudia vs. NLRC, 318
a standing position was not in accord with normal human physiological SCRA 439).
functioning.4 In this case, respondents failed to post the required appeal bond equivalent
The labor arbiter also noted that it was inconsistent with normal human to the monetary award of P345,879.45. The Consolidated Motion for
behavior for a man, who knew that he was being chased for allegedly Release of Cash Bond (posted as appeal bond in another case) with prayer
placing wrapped ore inside his boots, to then transfer the ore to his to apply the bond to be released as appeal bond may not be considered as
skullguard, where it could be found once he was apprehended.5 To further compliance with the jurisdictional requirement, as the application or posting
support the improbability of the allegation of highgrading, the labor arbiter is subject to the condition that the cash bond would be released. Besides,
noted that throughout the 21 years of service of Icao to LCMC, he had even if the motion for release is approved, the ten (10) day period has long
never been accused of or penalized for highgrading or any other infraction expired, rendering the statutory right to appeal forever lost.
involving moral turpitude until this alleged incident.6 WHEREFORE, respondents appeal is hereby DISMISSED for non-
THE NLRC ORDER DISMISSING THE APPEAL perfection and the questioned decision is declared as having become final
OF PETITIONER LCMC FOR FAILURE TO POST THE APPEAL BOND and executory. Let the Motion for Release of Cash bond be forwarded to
the Third Division, this Commission, for appropriate action.
On 8 December 2008, petitioner and its CEO filed an Appearance with
Memorandum of Appeal7 before the NLRC. Instead of posting the required SO ORDERED.12 (Emphasis supplied)
appeal bond in the form of a cash bond or a surety bond in an amount Petitioner and its CEO filed a Motion for Reconsideration. They
equivalent to the monetary award of P345,879.45 adjudged in favor of Icao, emphasized therein that they had tried to comply in good faith with the
they filed a Consolidated Motion For Release Of Cash Bond And To Apply requisite appeal bond by trying to produce a cash bond anew and also to
Bond Subject For Release As Payment For Appeal Bond (Consolidated procure a new surety bond. However, after canvassing several bonding
Motion).8 They requested therein that the NLRC release the cash bond companies, the costs have proved to be prohibitive.13 Hence, they resorted
of P401,610.84, which they had posted in the separate case Dangiw to using the cash bond they posted in Dangiw Siggaao because the bond
Siggaao v. LCMC,9 and apply that same cash bond to their present appeal was now free, unencumbered and could rightfully be withdrawn and used
bond liability. They reasoned that since this Court had already decided by them.14 Their motion was denied in a Resolution dated 27 November
Dangiw Siggaao in their favor, and that the ruling therein had become final 2009. Hence, they filed a Petition for Certiorari with the CA.
and executory, the cash bond posted therein could now be released.10 They
also cited financial difficulty as a reason for resorting to this course of action THE CA RULING AFFIRMING THE ORDER OF THE NLRC
and prayed that, in the interest of justice, the motion be granted. On 27 September 2010, the CA issued its assailed Decision15 affirming the
In its Order dated 27 February 2009, the NLRC First Division dismissed the Order of the NLRC First Division, which had dismissed the appeal of
appeal of petitioner and the latters CEO for non-perfection.11 It found that petitioner and the latters CEO. According to the CA, they failed to comply
they had failed to post the required appeal bond equivalent to the monetary with the requirements of law and consequently lost the right to appeal.16
award of P345,879.45. It explained that their Consolidated Motion for the The CA explained that under Article 223 of the Labor Code, an appeal from
release of the cash bond in another case (Dangiw Siggaao), for the the labor arbiters Decision must be filed within 10 calendar days from
purpose of applying the same bond to the appealed case before it, could receipt of the decision. In case of a judgment involving a monetary award,
not be considered as compliance with the requirement to post the required the posting of a cash or surety bond in an amount equivalent to the
appeal bond. Consequently, it declared the labor arbiters Decision to be monetary award is mandatory for the perfection of an appeal. In the instant
final and executory. The pertinent portions of the assailed Order are quoted case, the CA found that petitioner and its CEO did not pay the appeal fees
below: and the required appeal bond equivalent to P345,879.45. Instead, it filed a
Consolidated Motion praying that the cash bond it had previously posted in
Page 42 of 52 | LABREL 4E | FT CASES B1

another labor case be released and applied to the present one. According in the amount equivalent to the monetary award in the judgment appealed
to the CA, this arrangement is not allowed under the rules of procedure of from. (Emphasis and underlining supplied)
the NLRC.17 The 2011 NLRC Rules of Procedure (NLRC Rules) incorporates this
Furthermore, the CA said that since the payment of appeal fees and the requirement in Rule VI, Section 6, which provides:
posting of an appeal bond are indispensable jurisdictional requirements, SECTION 6. Bond. In case the decision of the Labor Arbiter or the
noncompliance with them resulted in petitioners failure to perfect its Regional Director involves a monetary award, an appeal by the employer
appeal. Consequently, the labor arbiters Decision became final and may be perfected only upon the posting of a bond, which shall either be in
executory and, hence, binding upon the appellate court.18 the form of cash deposit or surety bond equivalent in amount to the
Nevertheless, the CA ruled that the CEO of petitioner LCMC should be monetary award, exclusive of damages and attorneys fees. (Emphases
dropped as a party to this case.19 No specific act was alleged in private and underlining supplied)
respondents pleadings to show that he had a hand in Icaos illegal In Viron Garments Manufacturing Co., Inc. v. NLRC,21 the Court explained
dismissal; much less, that he acted in bad faith. In fact, the labor arbiter did the mandatory nature of this requirement as follows:
not cite any factual or legal basis in its Decision that would render the CEO
liable to respondent. The rule is that in the absence of bad faith, an officer The intention of the lawmakers to make the bond an indispensable requisite
of a corporation cannot be made personally liable for corporate liabilities. for the perfection of an appeal by the employer, is clearly limned in the
provision that an appeal by the employer may be perfected "only upon the
THE ISSUE posting of a cash or surety bond." The word "only" makes it perfectly clear,
The sole issue before the Court is whether or not petitioner complied with that the lawmakers intended the posting of a cash or surety bond by the
the appeal bond requirement under the Labor Code and the NLRC Rules employer to be the exclusive means by which an employer's appeal may be
by filing a Consolidated Motion to release the cash bond it posted in perfected. (Emphases supplied)
another case, which had been decided with finality in its favor, with a view We now turn to the main question of whether petitioners Consolidated
to applying the same cash bond to the present case. Motion to release the cash bond it posted in a previous case, for application
OUR RULING to the present case, constitutes compliance with the appeal bond
requirement. While it is true that the procedure undertaken by petitioner is
The Petition is meritorious. The Court finds that petitioner substantially
not provided under the Labor Code or in the NLRC Rules, we answer the
complied with the appeal bond requirement.
question in the affirmative. We reiterate our pronouncement in Araneta v.
Before discussing its ruling, however, the Court finds it necessary to Rodas,22 where the Court said that when the law does not clearly provide a
emphasize the well-entrenched doctrine that an appeal is not a matter of rule or norm for the tribunal to follow in deciding a question submitted, but
right, but is a mere statutory privilege. It may be availed of only in the leaves to the tribunal the discretion to determine the case in one way or
manner provided by law and the rules. Thus, a party who seeks to exercise another, the judge must decide the question in conformity with justice,
the right to appeal must comply with the requirements of the rules; reason and equity, in view of the circumstances of the case. Applying this
otherwise, the privilege is lost.20 doctrine, we rule that petitioner substantially complied with the mandatory
In appeals from any decision or order of the labor arbiter, the posting of an requirement of posting an appeal bond for the reasons explained below.
appeal bond is required under Article 223 of the Labor Code, which reads: First, there is no question that the appeal was filed within the 10-day
Article 223. APPEAL. Decisions, awards, or orders of the Labor Arbiter reglementary period.23 Except for the alleged failure to post an appeal
are final and executory unless appealed to the Commission by any or both bond, the appeal to the NLRC was therefore in order.
parties within ten (10) calendar days from receipt of such decisions, Second, it is also undisputed that petitioner has an unencumbered amount
awards, or orders. Such appeal may be entertained only on any of the of money in the form of cash in the custody of the NLRC. To reiterate,
following grounds: petitioner had posted a cash bond of P401,610.84 in the separate case
xxxx Dangiw Siggaao, which was earlier decided in its favor. As claimed by
petitioner and confirmed by the Judgment Division of the Judicial Records
In case of a judgment involving a monetary award, an appeal by the Office of this Court, the Decision of the Court in Dangiw Siggaao had
employer may be perfected only upon the posting of a cash or surety bond become final and executory as of 28 April 2008, or more than seven
issued by a reputable bonding company duly accredited by the Commission months before petitioner had to file its appeal in the present case. This fact
Page 43 of 52 | LABREL 4E | FT CASES B1

is shown by the Entry of Judgment on file with the aforementioned office. rules on appeal bond, there is all the more reason in the present case to
Hence, the cash bond in that case ought to have been released to find that petitioner substantially complied with the requirement. We
petitioner then. emphasize that in this case we are not even exempting petitioner from the
rule, as in fact we are enforcing compliance with the posting of an appeal
Under the Rule VI, Section 6 of the 2005 NLRC Rules, "[a] cash or surety
bond. We are simply liberally applying the rules on what constitutes
bond shall be valid and effective from the date of deposit or posting, until
compliance with the requirement, given the special circumstances
the case is finally decided, resolved or terminated, or the award satisfied."
surrounding the case as explained above.
Hence, it is clear that a bond is encumbered and bound to a case only for
as long as 1) the case has not been finally decided, resolved or terminated; Having complied with the appeal bond requirement, petitioner s appeal
or 2) the award has not been satisfied. Therefore, once the appeal is finally before the NLRC must therefore be reinstated.1wphi1
decided and no award needs to be satisfied, the bond is automatically Finally, a word of caution. Lest litigants be misled into thinking that they
released. Since the money is now unencumbered, the employer who may now wantonly disregard the rules on appeal bond in labor cases, we
posted it should now have unrestricted access to the cash which he may reiterate the mandatory nature of the requirement. The Court will liberally
now use as he pleases as appeal bond in another case, for instance. This apply the rules only in very highly exceptional cases such as this, in
is what petitioner simply did. Third, the cash bond in the amount keeping with the dictates of justice, reason and equity.
of P401,610.84 posted in Dangiw Siggaao is more than enough to cover
the appeal bond in the amount of P345,879.45 required in the present WHEREFORE, premises considered, the instant Rule 45 Petition is
case. GRANTED. The Court of Appeals Decision dated 27 September 2010 and
its Resolution dated March 2011 in CA-G.R. SP. No. 113095, which
Fourth, this ruling remains faithful to the spirit behind the appeal bond dismisse4 petitioner s Rule 65 Petition, are hereby REVERSED. Finally, the
requirement which is to ensure that workers will receive the money National Labor Relations Commission Resolutions dated 27 February 2009
awarded in their favor when the employers appeal eventually fails.24 There and 27 November 2009 are SET ASIDE and the appeal of petitioner before
was no showing at all of any attempt on the part of petitioner to evade the it is hereby REINSTATED.
posting of the appeal bond. On the contrary, petitioners move showed a
willingness to comply with the requirement. Hence, the welfare of Icao is SO ORDERED.
adequately protected.
Moreover, this Court has liberally applied the NLRC Rules and the Labor
Code provisions on the posting of an appeal bond in exceptional cases. In
Your Bus Lines v. NLRC,25 the Court excused the appellants failure to post
a bond, because it relied on the notice of the decision. While the notice
enumerated all the other requirements for perfecting an appeal, it did not
include a bond in the list. In Blancaflor v. NLRC,26 the failure of the
appellant therein to post a bond was partly caused by the labor arbiters
failure to state the exact amount of monetary award due, which would have
been the basis of the amount of the bond to be posted. In Cabalan
Pastulan Negrito Labor Association v. NLRC27 petitioner-appellant was an
association of Negritos performing trash-sorting services in the American
naval base in Subic Bay. The plea of the association that its appeal be
given due course despite its non-posting of a bond, on account of
its insolvency and poverty, was granted by this Court. In UERM-Memorial
Medical Center v. NLRC28 we allowed the appellant-employer to post a
property bond in lieu of a cash or surety bond. The assailed judgment
involved more than P17 million; thus, its execution could adversely affect
the economic survival of the employer, which was a medical center.
If n the above-cited cases, the Court found exceptional circumstances that
warranted an extraordinary exercise of its power to exempt a party from the
Page 44 of 52 | LABREL 4E | FT CASES B1

G.R. No. 126322 January 16, 2002 NLRC-NCR-IC. 0000602-95. This case is still pending with that
Commission.
YUPANGCO COTTON MILLS, INC., petitioner,
vs. "6. It filed a complaint in the Regional Trial Court in Manila which
COURT OF APPEALS, HON. URBANO C. VICTORIO, SR., Presiding was docketed as Civil Case No. 95-76395. The dismissal of this
Judge, RTC Branch 50, Manila, RODRIGO SY MENDOZA, SAMAHANG case by public respondent triggered the filing of the instant petition.
MANGGAGAWA NG ARTEX (SAMAR-ANGLO) represented by its Local "In all of the foregoing actions, petitioner raised a common issue,
President RUSTICO CORTEZ, and WESTERN GUARANTY which is that it is the owner of the properties located in the
CORPORATION, respondents. compound and buildings of Artex Development Corporation, which
PARDO, J.: were erroneously levied upon by the sheriff of the NLRC as a
consequence of the decision rendered by the said Commission in a
The Case
labor case docketed as NLRC-NCR Case No. 00-05-02960-90."2
The case is a petition for review on certiorari of the decision of the Court of
On March 29, 1996, the Court of Appeals promulgated a
Appeals1 dismissing the petition ruling that petitioner was guilty of forum
decision3 dismissing the petition on the ground of forum shopping and that
shopping and that the proper remedy was appeal in due course, not
petitioner's remedy was to seek relief from this Court.
certiorari or mandamus.
On April 18, 1996, petitioner filed with the Court of Appeals a motion for
In its decision, the Court of Appeals sustained the trial court's ruling that the
reconsideration of the decision.4 Petitioner argued that the filing of a
remedies granted under Section 17, Rule 39 of the Rules of Court are not
complaint for accion reinvindicatoria with the Regional Trial Court was
available to the petitioner because the Manual of Instructions for Sheriffs of
proper because it is a remedy specifically granted to an owner (whose
the NLRC does not include the remedy of an independent action by the
properties were subjected to a writ of execution to enforce a decision
owner to establish his right to his property.
rendered in a labor dispute in which it was not a party) by Section 17 (now
The Facts 16), Rule 39, Revised Rules of Court and by the doctrines laid down in Sy
The facts, as found by the Court of Appeals, are as follows: v. Discaya,5 Santos v. Bayhon6 and Manliguez v. Court of Appeals.7

"From the records before us and by petitioner's own allegations In addition, petitioner argued that the reliefs sought and the issues involved
and admission, it has taken the following actions in connection with in the complaint for recovery of property and damages filed with the
its claim that a sheriff of the National Labor Relations Commission Regional Trial Court of Manila, presided over by respondent judge, were
"erroneously and unlawfully levied" upon certain properties which it entirely distinct and separate from the reliefs sought and the issues
claims as its own. involved in the proceedings before the Labor Arbiter and the NLRC.
Besides, petitioner pointed out that neither the NLRC nor the Labor Arbiter
"1. It filed a notice of third-party claim with the Labor Arbiter on May is empowered to adjudicate matters involving ownership of properties.
4, 1995.
On August 27, 1996, the Court of Appeals denied petitioner's motion for
"2. It filed an Affidavit of Adverse Claim with the National Labor reconsideration.8
Relations Commission (NLRC) on July 4, 1995, which was
dismissed on August 30, 1995, by the labor Arbiter. Hence, this appeal.9

"3. It filed a petition for certiorari and prohibition with the Regional The Issues
Trial Court of Manila, Branch 49, docketed as Civil Case No. The issues raised are (1) whether the Court of Appeals erred in ruling that
95-75628 on October 6, 1995. The Regional Trial Court dismissed petitioner was guilty of forum shopping, and (2) whether the Court of
the case on October 11, 1995 for lack of merit. Appeals erred in dismissing the petitioner's accion reinvindicatoria on the
"4. It appealed to the NLRC the order of the Labor Arbiter dated ground of lack of jurisdiction of the trial court.
August 13, 1995 which dismissed the appeal for lack of merit on The Court's Ruling
December 8, 1995.
On the first issue raised, we rule that there was no forum shopping:
"5. It filed an original petition for mandatory injunction with the
In Golangco v. Court of Appeals,10 we held:
NLRC on November 16, 1995. This was docketed as Case No.
Page 45 of 52 | LABREL 4E | FT CASES B1

"What is truly important to consider in determining whether forum b) If the third party claim is denied, the third party may appeal the
shopping exists or not is the vexation caused the courts and denial to the NLRC.13
parties-litigant by a party who asks different courts and/or Even if a third party claim was denied, a third party may still file a proper
administrative agencies to rule on the same on related caused and/ action with a competent court to recover ownership of the property illegally
or grant the same or substantially the same reliefs, in the process seized by the sheriff. This finds support in Section 17 (now 16), Rule 39,
creating possibility of conflicting decisions being rendered by the Revised Rules of Court, to wit:
different for a upon the same issues.
"SEC. 17 (now 16). Proceedings where property claimed by third
"xxx xxx xxx person. - If property claimed by any other person than the judgment
"There is no forum-shopping where two different orders were debtor or his agent, and such person makes an affidavit of his title
questioned, two distinct causes of action and issues were raised, thereto or right to the possession thereof, stating the grounds of
and two objectives were sought." (Underscoring ours) such right or title, and serve the same upon the officer making the
levy, and a copy thereof upon the judgment creditor, the officer
In the case at bar, there was no identity of parties, rights and causes of
shall not be bound to keep the property, unless such judgment
action and reliefs sought.
creditor or his agent, on demand of the officer, indemnify the officer
The case before the NLRC where Labor Arbiter Reyes issued a labor against such claim by a bond in a sum not greater than the value of
dispute between Artex and Samar-Anglo. Petitioner was not a party to the the property levied on. In case of disagreement as to such value,
case. The only issue petitioner raised before the NLRC was whether or not the same shall be determined by the court issuing the writ of
the writ of execution issued by the labor arbiter could be satisfied against execution. 1wphi1.nt
the property of petitioner, not a party to the labor case.
"The officer is not liable for damages, for the taking or keeping of
On the other hand, the accion reinvindicatoria filed by petitioner in the trial the property, to any third-party claimant unless a claim is made by
court was to recover the property illegally levied upon and sold at auction. the latter and unless an action for damages is brought by him
Hence, the causes of action in these cases were different. against the officer within one hundred twenty (120) days from the
The rule is that "for forum-shopping to exist both actions must involve the date of the filing of the bond. But nothing herein contained shall
same transactions, the same circumstances. The actions must also raise prevent such claimant or any third person from vindicating his claim
identical causes of action, subject matter and issues.11 to the property by any proper action.

In Chemphil Export & Import Corporation v. Court of Appeals,12 we ruled "When the party in whose favor the writ of execution runs, is the
that: Republic of the Philippines, or any officer duly representing it, the
filing of such bond shall not be required, and in case the sheriff or
"Forum-shopping or the act of a party against whom an adverse levying officer is sued for damages as a result of the levy, he shall
judgment has been rendered in one forum, of seeking another (and be represented by the Solicitor General and if held liable therefor,
possible) opinion in another forum (other than by appeal or the the actual damages adjudged by the court shall be paid by the
special civil action of certiorari), or the institution of two (2) or more National Treasurer out of such funds as may be appropriated for
actions or proceedings grounded on the same cause on the the purpose." (Underscoring ours)
supposition that one or the other would make a favorable
disposition." In Sy v. Discaya,14 we ruled that:

On the second issue, a third party whose property has been levied upon by "The right of a third-party claimant to file an independent action to
a sheriff to enforce a decision against a judgment debtor is afforded with vindicate his claim of ownership over the properties seized is
several alternative remedies to protect its interests. The third party may reserved by Section 17 (now 16), Rule 39 of the Rules of Court, x x
avail himself of alternative remedies cumulatively, and one will not preclude x:
the third party from availing himself of the other alternative remedies in the "xxx xxx xxx
event he failed in the remedy first availed of.
"As held in the case of Ong v. Tating, et. al., construing the
Thus, a third party may avail himself of the following alternative remedies: aforecited rule, a third person whose property was seized by a
a) File a third party claim with the sheriff of the Labor Arbiter, and sheriff to answer for the obligation of a judgment debtor may invoke
the supervisory power of the court which authorized such
Page 46 of 52 | LABREL 4E | FT CASES B1

execution. Upon due application by the third person and after "The remedies above mentioned are cumulative and may be
summary hearing, the court may command that the property be resorted to by a third-party claimant independent of or
released from the mistaken levy and restored to the rightful owner separately from and without need of availing of the others. If a
or possession. What said court do in these instances, however, is third-party claimant opted to file a proper action to vindicate his
limited to a determination of whether the sheriff has acted rightful or claim of ownership, he must institute an action, distinct and
wrongly in the performance of his duties in the execution of separate from that in which the judgment is being enforced, with
judgment, more specifically, if he has indeed take hold of property the court of competent jurisdiction even before or without need of
not belonging to the judgment debtor. The court does not and filing a claim in the court which issued the writ, the latter not being
cannot pass upon the question of title to the property, with any a condition sine qua non for the former. In such proper action, the
character of finality. It can treat of the matter only insofar as may be validity and sufficiency of the title of the third-party claimant will be
necessary to decide if the sheriff has acted correctly or not. It can resolved and a writ of preliminary injunction against the sheriff may
require the sheriff to restore the property to the claimant's be issued." (Emphasis and underscoring ours)
possession if warranted by the evidence. However, if the claimant's In light of the above, the filing of a third party claim with the Labor Arbiter
proof do not persuade the court of the validity of his title or right of and the NLRC did not preclude the petitioner from filing a subsequent
possession thereto, the claim will be denied. action for recovery of property and damages with the Regional Trial Court.
"Independent of the above-stated recourse, a third-party claimant And, the institution of such complaint will not make petitioner guilty of forum
may also avail of the remedy known as "terceria', provided in shopping.15
Section 17 (now 16), Rule 39, by serving on the officer making the In Santos v. Bayhon,16 wherein Labor Arbiter Ceferina Diosana rendered a
levy an affidavit of his title and a copy thereof upon the judgment decision in NLRC NCR Case No. 1-313-85 in favor of Kamapi, the NLRC
creditor. The officer shall not be bound to keep the property, unless affirmed the decision. Thereafter, Kamapi obtained a writ of execution
such judgment creditor or his agent, on demand of the officer, against the properties of Poly-Plastic Products or Anthony Ching. However,
indemnifies the officer against such claim by a bond in a sum not respondent Priscilla Carrera filed a third-party claim alleging that Anthony
greater than the value of the property levied on. An action for Ching had sold the property to her. Nevertheless, upon posting by the
damages may be brought against the sheriff within one hundred judgment creditor of an indemnity bond, the NLRC Sheriff proceeded with
twenty (120) days from the filing of the bond. the public auction sale. Consequently, respondent Carrera filed with
"The aforesaid remedies are nevertheless without prejudice to 'any Regional Trial Court, Manila an action to recover the levied property and
proper action' that a third-party claimant may deem suitable to obtained a temporary restraining order against Labor Arbiter Diosana and
vindicate 'his claim to the property.' Such a 'proper action' is, the NLRC Sheriff from issuing a certificate of sale over the levied property.
obviously, entirely distinct from that explicitly prescribed in Section Eventually, Labor Arbiter Santos issued an order allowing the execution to
17 of Rule 39, which is an action for damages brought by a third- proceed against the property of Poly-Plastic Products. Also, Labor Arbiter
party claimant against the officer within one hundred twenty (120) Santos and the NLRC Sheriff filed a motion to dismiss the civil case
days from the date of the filing of the bond for the taking or keeping instituted by respondent Carrera on the ground that the Regional Trial Court
of the property subject of the 'terceria'. did not have jurisdiction over the labor case. The trial court issued an order
enjoining the enforcement of the writ of execution over the properties
"Quite obviously, too, this 'proper action' would have for its object
claimed by respondent Carrera pending the determination of the validity of
the recovery of ownership or possession of the property seized by
the sale made in her favor by the judgment debtor Poly-Plastic Products
the sheriff, as well as damages resulting from the allegedly
and Anthony Ching.
wrongful seizure and detention thereof despite the third-party claim;
and it may be brought against the sheriff and such other parties as In dismissing the petition for certiorari filed by Labor Arbiter Santos, we
may be alleged to have colluded with him in the supposedly ruled that:
wrongful execution proceedings, such as the judgment creditor "x x x. The power of the NLRC to execute its judgments extends
himself. Such 'proper action', as above pointed out, is and should only to properties unquestionably belonging to the judgment debtor
be an entirely separate and distinct action from that in which (Special Servicing Corp. v. Centro La Paz, 121 SCRA 748).
execution has issued, if instituted by a stranger to the latter suit.
"The general rule that no court has the power to interfere by
injunction with the judgments or decrees of another court with
Page 47 of 52 | LABREL 4E | FT CASES B1

concurrent or coordinate jurisdiction possessing equal power to WHEREFORE, the Court REVERSES the decision of the Court of Appeals
grant injunctive relief, applies only when no third-party claimant is and the resolution denying reconsideration.19 In lieu thereof, the Court
involved (Traders Royal Bank v. Intermediate Appellate Court, 133 renders judgment ANNULLING the sale on execution of the subject
SCRA 141 [1984]). When a third-party, or a stranger to the action, property conducted by NLRC Sheriff Anam Timbayan in favor of respondent
asserts a claim over the property levied upon, the claimant may SAMAR-ANGLO and the subsequent sale of the same to Rodrigo Sy
vindicate his claim by an independent action in the proper civil Mendoza. The Court declares the petitioner to be the rightful owner of the
court which may stop the execution of the judgment on property not property involved and remands the case to the trial court to determine the
belonging to the judgment debtor." (Underscoring ours) liability of respondents SAMAR-ANGLO, Rodrigo Sy Mendoza, and
WESTERN GUARANTY CORPORATION to pay actual damages that
in Consolidated Bank and Trust Corp. v. Court of Appeals, 193 SCRA 158
petitioner claimed.
[1991], we ruled that:
Costs against respondents, except the Court of Appeals.1wphi1.nt
"The well-settled doctrine is that a 'proper levy' is indispensable to
a valid sale on execution. A sale unless preceded by a valid levy is SO ORDERED.
void. Therefore, since there was no sufficient levy on the execution
in question, the private respondent did not take any title to the
properties sold thereunder x x x.
"A person other than the judgment debtor who claims ownership or
right over the levied properties is not precluded, however, from
taking other legal remedies." (Underscoring ours)
Jurisprudence is likewise replete with rulings that since the third-party
claimant is not one of the parties to the action, he could not, strictly
speaking, appeal from the order denying his claim, but should file a
separate reinvindicatory action against the execution creditor or the
purchaser of the property after the sale at public auction, or a complaint for
damages against the bond filed by the judgment creditor in favor of the
sheriff.17
And in Lorenzana v. Cayetano,18 we ruled that:
"The rights of a third-party claimant should not be decided in the
action where the third-party claim has been presented, but in a
separate action to be instituted by the third person. The appeal that
should be interposed if the term 'appeal' may properly be
employed, is a separate reinvidincatory action against the
execution creditor or the purchaser of the property after the sale at
public auction, or complaint for damages to be charged against the
bond filed by the judgment creditor in favor of the sheriff. Such
reinvindicatory action is reserved to the third-party claimant."
A separate civil action for recovery of ownership of the property would not
constitute interference with the powers or processes of the Arbiter and the
NLRC which rendered the judgment to enforce and execute upon the levied
properties. The property levied upon being that of a stranger is not subject
to levy. Thus, a separate action for recovery, upon a claim and prima-
facie showing of ownership by the petitioner, cannot be considered as
interference.
The Fallo
Page 48 of 52 | LABREL 4E | FT CASES B1

G.R. No. 120567 March 20, 1998 On April 3, 1995, the NLRC issued a temporary mandatory
injunction 2 enjoining petitioner to cease and desist from enforcing its
PHILIPPINE AIRLINES, INC., petitioner,
February 22, 1995 Memorandum of dismissal. In granting the writ, the
vs.
NLRC considered the following facts, to wit:
NATIONAL LABOR RELATIONS COMMISSION, FERDINAND PINEDA
and GOGFREDO CABLING, respondents. . . . that almost two (2) years ago, i.e. on April 15, 1993, the
petitioners were instructed to attend an investigation by
respondent's "Security and Fraud Prevention Sub-
MARTINEZ, J.: Department" regarding an April 3, 1993 incident in
Can the National Labor Relations Commission (NLRC), even without a Hongkong at which Joseph Abaca, respondent's Avionics
complaint for illegal dismissal tiled before the labor arbiter, entertain an Mechanic in Hongkong "was intercepted by the Hongkong
action for injunction and issue such writ enjoining petitioner Philippine Airport Police at Gate 05 . . . the ramp area of the Kai Tak
Airlines, inc. from enforcing its Orders of dismissal against private International Airport while . . . about to exit said gate
respondents, and ordering petitioner to reinstate the private respondents to carrying a . . . bag said to contain some 2.5 million pesos in
their previous positions? Philippine Currencies. That at the Police Station. Mr. Abaca
claimed that he just found said plastic bag at the Skybed
This is the pivotal issue presented before us in this petition Section of the arrival flight PR300/03 April 93," where
for certiorari under Rule 65 of the Revised Rules of Court which seeks the petitioners served as flight stewards of said flight PR300; . .
nullification of the injunctive writ dated April 3, 1995 issued by the NLRC the petitioners sought "a more detailed account of what this
and the Order denying petitioner's motion for reconsideration on the ground HKG incident is all about"; but instead, the petitioners were
that the said Orders were issued in excess of jurisdiction. administratively charged, "a hearing" on which "did
Private respondents are flight stewards of the petitioner. Both were not push through" until almost two (2) years after, i.e, "on
dismissed from the service for their alleged involvement in the April 3, 1993 January 20, 1995 . . . where a confrontation between Mr.
currency smuggling in Hong Kong. Abaca and petitioners herein was compulsorily arranged by
the respondent's disciplinary board" at which hearing,
Aggrieved by said dismissal, private respondents filed with the NLRC a Abaca was made to identify petitioners as co-conspirators;
petition1 for injunction praying that: that despite the fact that the procedure of identification
I. Upon filing of this Petition, a temporary restraining order adopted by respondent's Disciplinary Board was
be issued, prohibiting respondents (petitioner herein) from anomalous "as there was no one else in the line-up (which
effecting or enforcing the Decision dated Feb. 22, 1995, or could not be called one) but petitioners . . . Joseph Abaca
to reinstate petitioners temporarily while a hearing on the still had difficulty in identifying petitioner Pineda as his co-
propriety of the issuance of a writ of preliminary injunction conspirator, and as to petitioner Cabling, he was implicated
is being undertaken; and pointed by Abaca only after respondent's Atty.
Cabatuando pressed the former to identify petitioner
II. After hearing, a writ of preliminary mandatory injunction Cabling as co-conspirator"; that with the hearing reset to
be issued ordering respondent to reinstate petitioners to January 25, 1995, "Mr. Joseph Abaca finally gave
their former positions pending the hearing of this case, or, exculpating statements to the board in that he cleared
prohibiting respondent from enforcing its Decision dated petitioners from any participation or from being the owners
February 22, 1995 while this case is pending adjudication; of the currencies, and at which hearing Mr. Joseph Abaca
III. After hearing, that the writ of preliminary injunction as to volunteered the information that the real owner of said
the reliefs sought for be made permanent, that petitioners money was one who frequented his headquarters in
be awarded full backwages, moral damages of PHP Hongkong to which information, the Disciplinary Board
500,000.00 each and exemplary damages of PHP Chairman, Mr. Ismael Khan," opined "for the need for
500,000.00 each, attorney's fees equivalent to ten percent another hearing to go to the bottom of the incident"; that
of whatever amount is awarded, and the costs of suit. from said statement, it appeared "that Mr. Joseph Abaca
was the courier, and had another mechanic in Manila who
hid the currency at the plane's skybed for Abaca to retrieve
Page 49 of 52 | LABREL 4E | FT CASES B1

in Hongkong, which findings of how the money was found 2. . . . in granting a temporary injunction
was previously confirmed by Mr. Joseph Abaca himself order when the termination of private
when he was first investigated by the Hongkong respondents have long been carried out;
authorities"; that just as petitioners "thought that they were 3. . . . in ordering the reinstatement of
already fully cleared of the charges, as they no longer private respondents on the basis of their
received any summons/notices on the intended "additional mere allegations, in violation of PAL's right
hearings" mandated by the Disciplinary Board," they were to due process:
surprised to receive "on February 23, 1995. . . a
Memorandum dated February 22, 1995" terminating their 4. . . . in arrogating unto itself management
services for alleged violation of respondent's Code of prerogative to discipline its employees and
Discipline "effective immediately"; that sometime . . . first divesting the labor arbiter of its original and
week of March, 1995, petitioner Pineda received another exclusive jurisdiction over illegal dismissal
Memorandum from respondent Mr. Juan Paraiso, advising cases;
him of his termination effective February 3, 1995, likewise 5. . . . in suspending the effects of
for violation of respondent's Code of Discipline; . . . termination when such action is exclusively
In support of the issuance of the writ of temporary injunction, the NLRC within the jurisdiction of the Secretary of
adapted the view that: (1) private respondents cannot be validly dismissed Labor;
on the strength of petitioner's Code of Discipline which was declared illegal 6. . . . in issuing the temporary injunction in
by this Court in the ease at PAL, Inc. vs. NLRC, (G.R. No. 85985), the absence of any irreparable or
promulgated August 13, 1993, for the reason that it was formulated by the substantial injury to both private
petitioner without the participation of its employees as required in R.A. respondents.
6715, amending Article 211 of the Labor Code; (2) the whimsical, baseless
and premature dismissals of private respondents which "caused them On May 31, 1995, the NLRC denied petitioner's motion for reconsideration,
grave and irreparable injury" is enjoinable as private respondents are left ruling:
"with no speedy and adequate remedy at law" except the issuance of a "The respondent (now petitioner), for one, cannot validly
temporary mandatory injunction; (3) the NLRC is empowered under Article claim that we cannot exercise our injunctive power under
218 (e) of the Labor Code not only to restrain any actual or threatened Article 218 (e) of the Labor Code on the pretext that what
commission of any or all prohibited or unlawful acts but also to require the we have here is not a labor dispute as long as it concedes
performance of a particular act in any labor dispute, which, if not restrained that as defined by law, a" (l) "Labor Dispute" includes any
or performed forthwith, may cause grave or irreparable damage to any controversy or matter concerning terms or conditions of
party; and (4) the temporary power of the NLRC was recognized by this employment." If security of tenure, which has been
Court in the case of Chemo-Technische Mfg., Inc. Employees Union, DFA, breached by respondent and which, precisely, is sought to
et. al. vs. Chemo-Technische Mfg., Inc. [G.R. No. 107031, January 25, be protected by our temporary mandatory injunction (the
1993]. core of controversy in this case) is not a "term or condition
On May 4, 1995, petitioner moved for reconsideration3 arguing that the of employment", what then is?
NLRC erred: xxx xxx xxx
1. . . . in granting a temporary injunction Anent respondent's second argument . . . . Article 218 (e)
order when it has no jurisdiction to issue of the Labor Code . . . empowered the Commission not
an injunction or restraining order since this only to issue a prohibitory injunction, but a mandatory ("to
may be issued only under Article 218 of require the performance") one as well. Besides, as earlier
the Labor Code if the case involves or discussed, we already exercised (on August 23, 1991) this
arises from labor disputes; temporary mandatory injunctive power in the case of
"Chemo-Technische Mfg., Inc. Employees Union-DFA et.
al. vs. Chemo-Technische Mfg., Inc., et. al." (supra) and
effectively enjoined one (1) month old dismissals by
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Chemo-Technische and that our aforesaid mandatory of said law, enforceable when necessary, through Article
exercise of injunctive power, when questioned through a 218 (e) of the Labor Code (without need of an illegal
petition for certiorari, was sustained by the Third Division of dismissal suit under Article 217 (a) of the Code) if such
the Supreme court per its Resolution dated January 25, whimsical and capricious act of illegal dismissal will "cause
1993. grave or irreparable injury to a party". . . . .4
xxx xxx xxx Hence, the present recourse.
Respondent's fourth argument that petitioner's remedy for Generally, injunction is a preservative remedy for the protection of one's
their dismissals is "to file an illegal dismissal case against substantive rights or interest. It is not a cause of action in itself but merely a
PAL which cases are within the original and exclusive provisional remedy, an adjunct to a main suit. It is resorted to only when
jurisdiction of the Labor Arbiter' is ignorant. In requiring as there is a pressing necessity to avoid injurious consequences which cannot
a condition for the issuance of a "temporary or permanent be remedied under any standard of compensation. The application of the
injunction" "(4) That complainant has no adequate injunctive writ rests upon the existence of an emergency or of a special
remedy at law;" Article 218 (e) of the Labor Code clearly reason before the main case be regularly heard. The essential conditions
envisioned adequacy, and not plain availability of a remedy for granting such temporary injunctive relief are that the complaint alleges
at law as an alternative bar to the issuance of an injunction. facts which appear to be sufficient to constitute a proper basis for injunction
An illegal dismissal suit (which takes, on its expeditious and that on the entire showing from the contending parties, the injunction is
side, three (3) years before it can be disposed of) while reasonably necessary to protect the legal rights of the plaintiff pending the
available as a remedy under Article 217 (a) of the Labor litigation.5 Injunction is also a special equitable relief granted only in cases
Code, is certainly not an "adequate; remedy at law, Ergo, it where there is no plain, adequate and complete remedy at law.6
cannot as an alternative remedy, bar our exercise of that In labor cases, Article 218 of the Labor Code empowers the NLRC
injunctive power given us by Article 218 (e) of the Code.
(e) To enjoin or restrain any actual or threatened
xxx xxx xxx commission of any or all prohibited or unlawful acts or to
Thus, Article 218 (e), as earlier discussed [which require the performance of a particular act in any labor
empowers this Commission "to require the performance of dispute which, if not restrained or performed forthwith, may
a particular act" (such as our requiring respondent "to cause grave or irreparable damage to any party or render
cease and desist from enforcing" its whimsical memoranda ineffectual any decision in favor of such
of dismissals and "instead to reinstate petitioners to their party; . . ." (Emphasis Ours)
respective position held prior to their subject dismissals") in Complementing the above-quoted provision, Sec. 1, Rule XI of the New
"any labor dispute which, if not . . . performed forthwith, Rules of Procedure of the NLRC, pertinently provides as follows:
may cause grave and irreparable damage to any party"]
stands as the sole "adequate remedy at law" for petitioners Sec. 1. Injunction in Ordinary Labor Dispute. A
here. preliminary injunction or a restraining order may be granted
by the Commission through its divisions pursuant to the
Finally, the respondent, in its sixth argument claims that provisions of paragraph (e) of Article 218 of the Labor
even if its acts of dismissing petitioners "may be great, still Code, as amended, when it is established on the bases of
the same is capable of compensation", and that the sworn allegations in the petition that the acts
consequently, "injunction need not be issued where complained of, involving or arising from any labor dispute
adequate compensation at law could be obtained". before the Commission, which, if not restrained or
Actually, performed forthwith, may cause grave or irreparable
what respondent PAL argues here is that we need not damage to any party or render ineffectual any decision in
interfere in its whimsical dismissals of petitioners as, after favor of such party.
all, it can pay the latter its backwages. . . .
xxx xxx xxx
But just the same, we have to stress that Article 279 does
not speak alone of backwages as an obtainable relief for The foregoing ancillary power may be exercised by the
illegal dismissal; that reinstatement as well is the concern Labor Arbiters only as an incident to the cases pending
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before them in order to preserve the rights of the parties (4) Claims for actual, moral, exemplary
during the pendency of the case, but excluding labor and other forms of damages arising from
disputes involving strikes or lockout. 7 (Emphasis Ours) the employer-employee relations;
From the foregoing provisions of law, the power of the NLRC to issue an (5) Cases arising from any violation of
injunctive writ originates from "any labor dispute" upon application by a Article 264 of this Code, including
party thereof, which application if not granted "may cause grave or questions involving the legality of strikes
irreparable damage to any party or render ineffectual any decision in favor and lockouts; and
of such party." (6) Except claims for employees
The term "labor dispute" is defined as "any controversy or matter compensation, social security, medicare
concerning terms and conditions of employment or the association or and maternity benefits, all other claims
representation of persons in negotiating, fixing. maintaining, changing, or arising from employer- employee relations,
arranging the terms and conditions of employment regardless of whether or including those of persons in domestic or
not the disputants stand in the proximate relation of employers and household service, involving an amount
employees." 8 exceeding five thousand pesos
(P5,000.00), whether or not accompanied
The term "controversy" is likewise defined as "a litigated
with a claim for reinstatement. 11
question; adversary proceeding in a court of law; a civil action or suit, either
at law or in equity; a justiciable dispute."9 The jurisdiction conferred by the foregoing legal provision to the labor
arbiter is both original and exclusive, meaning, no other officer or tribunal
A "justiciable controversy" is "one involving an active antagonistic assertion
can take cognizance of, hear and decide any of the cases therein
of a legal right on one side and a denial thereof on the other concerning a
enumerated. The only exceptions are where the Secretary of Labor and
real, and not a mere theoretical question or issue." 10
Employment or the NLRC exercises the power of compulsory arbitration, or
Taking into account the foregoing definitions, it is an essential requirement the parties agree to submit the matter to voluntary arbitration pursuant to
that there must first be a labor dispute between the contending parties Article 263 (g) of the Labor Code, the pertinent portions of which reads:
before the labor arbiter. In the present case, there is no labor dispute
(g) When, in his opinion, there exists a labor dispute
between the petitioner and private respondents as there has yet been no
causing or likely to cause a strike or lockout in an industry
complaint for illegal dismissal filed with the labor arbiter by the private
indispensable to the national interest, the Secretary of
respondents against the petitioner.
Labor and Employment may assume jurisdiction over the
The petition for injunction directly filed before the NLRC is in reality an dispute and decide it or certify the same to the Commission
action for illegal dismissal. This is clear from the allegations in the petition for compulsory arbitration. Such assumption or certification
which prays for; reinstatement of private respondents; award of full shall have the effect of automatically enjoining the intended
backwages, moral and exemplary damages; and attorney's fees. As such, or impending strike or lockout as specified in the
the petition should have been filed with the labor arbiter who has the assumption or certification order. If one has already taken
original and exclusive jurisdiction to hear and decide the following cases place at the time of assumption or certification, all striking
involving all workers, whether agricultural or non-agricultural: or locked out employees shall immediately resume
(1) Unfair labor practice; operations and readmit all workers under the same terms
and conditions prevailing before the strike or lockout. The
(2) Termination disputes; Secretary of Labor and Employment or the Commission
(3) If accompanied with a claim for may seek the assistance of law enforcement agencies to
reinstatement, those cases that workers ensure compliance with this provision as well as with such
may file involving wages, rates of pay, orders as he may issue to enforce the same.
hours of work and other terms and On the other hand, the NLRC shall have exclusive appellate jurisdiction
conditions of employment; over all cases decided by labor arbiters as provided in Article 217(b) of the
Labor Code. In short, the jurisdiction of the NLRC in illegal dismissal cases
is appellate in nature and, therefore, it cannot entertain the private
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respondents' petition for injunction which challenges the dismissal orders of Article 279 of the Labor Code provides that an employee who is unjustly
petitioner. Article 218(e) of the Labor Code does not provide blanket dismissed from employment shall be entitled to reinstatement, without loss
authority to the NLRC or any of its divisions to issue writs of injunction, of seniority rights and other privileges, and to the payment of full
considering that Section 1 of Rule XI of the New Rules of Procedure of the backwages, inclusive of allowances, and to other benefits or their monetary
NLRC makes injunction only an ancillary remedy in ordinary labor equivalent computed from the time his compensation was withheld from
disputes." 12 him up to the time of his actual reinstatement.
Thus, the NLRC exceeded its jurisdiction when it issued the assailed Order The ruling of the NLRC that the Supreme Court upheld its power to issue
granting private respondents' petition for injunction and ordering the temporary mandatory injunction orders in the case of Chemo-Technische
petitioner to reinstate private respondents. Mfg., Inc. Employees Union-DFA, et. al. vs. Chemo-Technische Mfg.,
Inc. et. al., docketed as G.R. No. 107031, is misleading. As correctly
The argument of the NLRC in its assailed Order that to file an illegal
argued by the petitioner, no such pronouncement was made by this Court
dismissal suit with the labor arbiter is not an "adequate" remedy since it
in said case. On January 25, 1993, we issued a Minute Resolution in the
takes three (3) years before it can be disposed of, is patently erroneous. An
subject case stating as follows:
"adequate" remedy at law has been defined as one "that affords relief with
reference to the matter in controversy, and which is appropriate to the Considering the allegations contained, the issues raised
particular circumstances of the case." 13 It is a remedy which is equally, and the arguments adduced in the petition for certiorari, as
beneficial, speedy and sufficient which will promptly relieve the petitioner well as the comments of both public and private
from the injurious effects of the acts complained of. 14 respondents thereon, and the reply of the petitioners to
private respondent's motion to dismiss the petition, the
Under the Labor Code, the ordinary and proper recourse of an illegally
Court Resolved to DENY the same for being premature.
dismissed employee is to file a complaint for illegal dismissal with the labor
arbiter. 15 In the case at bar, private respondents disregarded this rule and It is clear from the above resolution that we did not in anyway sustain the
directly went to the NLRC through a petition for injunction praying that action of the NLRC in issuing such temporary mandatory injunction but
petitioner be enjoined from enforcing its dismissal orders. In Lamb rather we dismissed the petition as the NLRC had yet to rule upon the
vs. Phipps, 16 we ruled that if the remedy is specifically provided by law, it is motion for reconsideration filed by petitioner. Thus, the minute resolution
presumed to be adequate. Moreover, the preliminary mandatory injunction denying the petition for being prematurely filed.
prayed for by the private respondents in their petition before the NLRC can Finally, an injunction, as an extraordinary remedy, is not favored in labor
also be entertained by the labor arbiter who, as shown earlier, has the law considering that it generally has not proved to be an effective means of
ancillary power to issue preliminary injunctions or restraining orders as an settling labor disputes. 20 It has been the policy of the State to encourage
incident in the cases pending before him in order to preserve the rights of the parties to use the non-judicial process of negotiation and compromise,
the parties during the pendency of the case. 17 mediation and arbitration. 21 Thus, injunctions may be issued only in cases
Furthermore, an examination of private respondents' petition for injunction of extreme necessity based on legal grounds clearly established, after due
reveals that it has no basis since there is no showing of any urgency or consultations or hearing and when all efforts at conciliation are exhausted
irreparable injury which the private respondents might suffer. An injury is which factors, however, are clearly absent in the present case.
considered irreparable if it is of such constant and frequent recurrence that WHEREFORE, the petition is hereby GRANTED. The assailed Orders
no fair and reasonable redress can be had therefor in a court of law, 18 or dated April 3, 1995 and May 31, 1995, issued by the National Labor
where there is no standard by which their amount can be measured with Relations Commission (First Division), in NLRC NCR IC No. 000563-95,
reasonable accuracy, that is, it is not susceptible of mathematical are hereby REVERSED and SET ASIDE.
computation. It is considered irreparable injury when it cannot be
adequately compensated in damages due to the nature of the injury itself or SO ORDERED.
the nature of the right or property injured or when there exists no certain
pecuniary standard for the measurement of damages. 19
In the case at bar, the alleged injury which private respondents stand to
suffer by reason of their alleged illegal dismissal can be adequately
compensated and therefore, there exists no "irreparable injury," as defined
above which would necessitate the issuance of the injunction sought for.