Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 175460 April 14, 2008

METRO TRANSIT ORGANIZATION, INC., and JOSE L. CORTEZ, JR., petitioners,

vs.
PIGLAS NFWU-KMU, SAMMY MALUNES, ROMULO QUIGAO, RODULFO CAMERINO, BRENDO MAKILING,
MAXIMO VITANGCOL, PETER DIA, ELMER BOBADILLA, NOEL ESGASANE, ISIDRO CORTEZ, CRISPIN
YAPCHIONGCO, MARLON E. SANTOS, WILFREDO DE RAMOS, ARTEMIO SALIG, AGRIFINO GOROSPE,
RUEL MAGBALANA, JOEL MARANO, MELCHOR ALARCON, ROMEO TAGUID, EMERSON LUMABI, ATILANO
JOB, DENNIS T. CRUZ, ARNOLD DIMALANTA, CARLITO MANZANILLA, GUILLERMO DUMAN, CRISANTO S.
MAGNAYE, RONALDO ESTRELLA, EDMUNDO QUEMADA, MARITO N. HEBREO, EDGARDO C. RAMOS,
VICTOR G. BABIERA, EDMUNDO B. GONZALEZ, ROSELL VILLANUEVA, FLORIFE BLAS, JAIME
ABULENCIA, RODOLFO GAMBOA, VALENTIN BORBON, ALAN ATURBA, TEOFANES TESIOMA, PEDRO
TESIOMA, CESAR BATTUNG, EDWIN ENRIQUEZ, RODOLFO PILAFIL, ARIEL BUSTAMANTE, CRISENDO
CASAS, RONALD LOVEDOREAL, VICENTE RAMIREZ, GERARDO DE GUZMAN, ROBINSON VINZON,
ELPIDIO P. VARGAS, LC DELA CRUZ, ARIEL DIMAWALA, JOEY A. LOBERIANO, REYNALDO S. DEL
ROSARIO, PAUL V. LEGASPI, EDUARDO C. SANTOS, JOHN R. NUNEZ, JUSTINO B. ASAYTANO, JR.,
RONALD G. DECOSTO, JOENEL G. BALIGUAT, RUTCHIE R. RELIMBO, BENJAMIN A. ABIDIN, ALLAN
CORTEZ, ALEJANDRO M. DIAZ, ANTONIO BALANGUE, RICARDO G. DALUNSONG, ERWIN S. BARRERA,
ALLAN M. MARANG, PONCIANO M. ZAMORA, APOLINARIO M. BOLGEN, ARNOLD B. ESTORES, RUBEN
BERNAL, ROLANDO B. CANLAS, RODOLFO C. HERESE, ANTONIO VILLAMOR, JR., ARTHUR B.
HERMITANIO, HERNANI M. LIBANTING, ALBERTO T. DELA CRUZ, JEREMIAH V. MAHINAY, HELEN P.
DIOLANDA, PAMPILO R. BALASBAS, EDUARDO G. MANOSCA, NATALIA PAYONGAYONG, JOHN M.
BISCOCHO, DESIDERIO S. MOSQUEDA, GIOVANNI V. MUESCAN, M. MAUR A. MENDELEVAR, ORLANDO
MALAYBA, ROLANDO DE GUZMAN, EDGAR V. VICELLAJE, JOEL G. EVANGELISTA, REYNALDO C.
VERANO, CYRILL MAYOR, JOEY J. SABANAL, JONNY L. IGNACIO, JESUS C. FAJARDO, LEOPOLDO
CAZENAS, ANASTACIO JANAVAN, VIRGILO C. CRUZ, EDGARDO ESPINOSA, ROMEO MIRAFUENTE, EDWIN
R. JUAT, RENATO TAPALLA, EDWARD F. MARIANO, JESSIE A. DUQUE, MANUEL M. FLOGIO, RODRIGO
SARASUA, EDWARD M. DIAZ, TEOFILO RIZ MOCORRO, JR., CESAR CUENCO, JR., ARIEL MAGNO,
NEPTALI PASADAS, MAURICIO DELA CRUZ, WILHEMINE POLINTAN, DANIEL F. IJIRAN, DELIA O.
CUPCUPIN, BERNARDINO G. MATIAS, DANILO B. MARIANO, JOSELITO G. CONCIO, RAMON CAQUIAT,
RICARDO B. ANO, JR., LAWRENCE SACDALAN, MICHAEL GUINTO, RAYMUNDO LITAN, JR., EUCLIDA
GAURANO, GENEROSO RAPOSA, RICARDO SANTOS, ROLANDO PEREZ, EXEJESON EVA RUAZOL,
EDUARDO ROQUE, RONALDO GELLE, RHODELIO G. CRUZ, RONNIE M. GONZALES, ELIZALDE JANAPIN,
EDWIN BORJA, RENIERO L. GAKO, REYNALDO T. IGNACIO, JOSE A. CENIDONIA, GLECIRIO M. SAYAT,
ROGELIO LUMABAN, LARRY ORATE, SANTIAGO CLARIN, ANTONIO LEGASPI, MARILYN BRAVO,
EDUARDO AGUILA, DANA KINGKING, TERESITA VELASQUEZ, AURELIO PAGTAKHAN, ALBERTO BRAVO,
DONALD REYES, REINERIO RIPAY, ALFONSO TRINIDAD, JR., CESAR CANETE, SILVESTRE ALVANO,
JOSEPH RODRIGUEZ, HAROLD FLORES, MICAHEL ROMBLON, RAMON AMEGLEO, PASCUAL PARAGAS,
VICTOR SANCHEZ, ESTHELA ATIENZA, ANTONY DE LUNA, AGNES DELA CRUZ, CLARYMAR ESTOQUE,
FELIX ARRIOLA, CARLOS SAMONTE, MEDWIN MESINA, REGGIE FELIXMENIA, RICARDO EVANGELISTA,
EDISON JOSE DORDAS, LORNA SALON, LELIBETH CASINO, GREGORIO SALVEDIA, AQUILINO EBEN,
RESTITUTO FELIPE, NELFRED DELETINA, FERNANDO MALLARI, RAMIR GORDO, CARLOS BANDILLA,
ERNESTOR SERENA, MATEO HAO, RONILO DE VERA, ALBERTO ASIS, JR., JAIME BARCOMA, WILLIAM
VILLANUEVA, ARMANDO NODADO, ENRIQUE ESPANOL, JR., FRANCISCO FLORES, ELMER CRUZ, DANILO
YU, ENRIQUE FLORES, JAYSON LIWAG, ROMEO PALAGANAS, EDUARDO BERBA, MELCHOR REGALADO,
REDEN NOLASCO, MARIO S. DELA CRUZ, ARNOLD MENDOZA, DANTE MENDOZA, LARRY TAN, LARRY
HERNANDEZ, GODOFREDO BEUNO, MANOLO SANTOS, RICARDO PATRIARCA, ALBERTO RAMOS,
ARNULFO DE LARA, WILFREDO BANDIALA, LOVIN DE LIMA, GEORGE DELA CUEVA, NELSO LABAYO,
EDITHA DELA ROSA, ELIZABETH REYES, EDMUNDO LIONGSON, JR., DANILO RIVERA, SR., BENJAMIN
CANDOLE, CATALINO MELEGRITO, respondents.

DECISION

CHICO-NAZARIO, J.:

Assailed in the instant Petition for Review on Certiorari under Rule 45 of the 1997 Rules of Civil Procedure is the
Resolution1 dated 24 August 2006 of the Court of Appeals in CA-G.R. SP. No. 95665, as well as its Resolution 2dated
14 November 2006 dismissing petitioners’ Motion for Reconsideration thereof.

1
Petitioner Metro Transit Organization, Inc. (MTO) is a government owned and controlled corporation which entered
into a Management and Operations Agreement (MOA) with the Light Rail Transit Authority (LRTA) for the operation
of the Light Rail Transit (LRT) Baclaran-Monumento Line. Petitioner Jose L. Cortez, Jr. was sued in his official
capacity as then Undersecretary of the Department of Transportation and Communications and Chairman of the
Board of Directors of petitioner MTO.

For purposes of collective bargaining agreement (CBA), petitioner MTO’s rank and file employees formed the Pinag-
isang Lakas ng Manggagawa sa Metro, Inc.-National Federation of Labor (PIGLAS). Meanwhile, its managerial and
supervisory employees created their own union bearing the name Supervisory Employees Association of Metro
(SEAM).

Petitioners MTO and PIGLAS entered into a CBA covering the period of 13 February 1995 to 13 February 2000.
SEAM similarly negotiated with petitioner MTO under a separate CBA. Allegedly disgruntled with PIGLAS, some
rank and file employees formed another union under the umbrella of the Philippine Transport Group Workers
Organization-Trade Union Congress of the Philippines (PTGWO-TUCP), which negotiated with management for
certification as the new bargaining agent. The aforesaid intra-union dispute was settled through a certification
election which PIGLAS won. Thereafter, PIGLAS renegotiated the CBA demanding higher benefits.

On 25 July 2000, due to a bargaining deadlock, PIGLAS filed a Notice of Strike before the National Conciliation and
Mediation Board (NCMB). On the same date, PIGLAS staged a strike. Consequently, Hon. Bienvenido E.
Laguesma, then Secretary of the Department of Labor and Employment (DOLE), issued an Order of Assumption of
Jurisdiction/Return to Work,3 dated 25 July 2000, directing the striking employees to immediately return to work, and
petitioner MTO to take them back under the same terms and conditions of employment prevailing prior to the strike.
The Order of Assumption of Jurisdiction/Return to Work was published in newspapers of general circulation. The
striking employees refused to receive a copy of said Order; hence, copies thereof were posted in the stations and
terminals of the LRT.

The striking PIGLAS members refused to accede to the Return to Work Order. Following their continued non-
compliance, on 28 July 2000, the LRTA formally informed petitioner MTO that it had issued a Board Resolution
which: (1) allowed the expiration after 31 July 2000 of LRTA’s MOA with petitioner MTO; and (2) directed the LRTA
to take over the operations and maintenance of the LRT Line. By virtue of said Resolution, petitioner MTO sent
termination notices to its employees, including herein respondents.

Resultantly, respondents filed with the Labor Arbiter Complaints 4 against petitioners and the LRTA for the following:
(1) illegal dismissal; (2) unfair labor practice for union busting; (3) moral and exemplary damages; and (4) attorney’s
fees.

On 13 September 2004, the Labor Arbiter rendered judgment in favor of respondents. The decretal portion of the
Labor Arbiter’s Decision, states:

WHEREFORE, premises considered, judgment is hereby rendered declaring the dismissal of the
complainants as illegal and ordering respondents Metro Transit Organization, Inc. and Light Rail Transit
Authority to jointly and severally pay complainants their separation pay and backwages in the amounts
indicated opposite their respective names as shown in Annexes "A" to "A-5" of this decision or in the total
amount of P208,235,682.72.

Respondents are further ordered to pay the sum equivalent to ten (10%) percent of the judgment award as
and by way of attorney’s fees or in the amount of P20,823,568.27.

The claim of complainant Ronald Lovedoreal is ordered dismissed without prejudice.

All other claims are ordered dismissed for lack of merit. 5

Petitioners appealed to the National Labor Relations Commission (NLRC). In a Resolution dated 19 May 2006, the
NLRC dismissed petitioners’ appeal for non-perfection since it failed to post the required bond. The NLRC
ratiocinated:

Section 6, Rule VI of the Rules of Procedure of the National Labor Relations Commission, as amended by
Resolution No. 01-02, Series of 2002 provides, to wit:

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

In this case [petitioners] filed a property bond, and applying a liberal interpretation of the above Rule and
finding support in the Supreme Court pronouncement in the case of UERM-Memorial Medical Center, et al.
2
 vs. NLRC, et al., G.R. No. 110419, March 3, 1997, we conditionally accepted the property bond subject to
the submission of the requirements specified in the Order. Moreover, [petitioners] were directed to comply
with the requirements within ten (10) days from receipt of the Order with a warning that failure to comply will
result in the dismissal of the appeal for non-perfection thereof.

It appears that to date, which is more than a month from receipt of the Order, [petitioners] failed to comply
with the conditions required in the posting of the property bond, this Commission is therefore constrained to
dismiss the appeal for non-perfection thereof.6

The NLRC thus disposed:

WHEREFORE, premises considered, an order is hereby issued DISMISSING the appeal of [petitioners] for
non-perfection thereof and the Decision dated 13 September 2004 has become final.

The Motion for Reconsideration filed by complainants-appellees and the motion to suspend proceedings
filed by [petitioners] are both DENIED for lack of merit.

No further motion of similar nature shall be entertained.7

Without filing a Motion for Reconsideration of the afore-quoted NLRC Resolution, petitioners filed a Petition
for Certiorari with the Court of Appeals assailing the same.

On 24 August 2006, the Court of Appeals issued a Resolution dismissing the Petition. It ruled:

The petitioners have filed this petition for certiorari against the resolution of the NLRC dated May 19, 2006
dismissing the appeal for non-perfection. They have not, however, filed a motion for reconsideration of the
ruling prior to filing the petition. This renders the petition fatally defective. The motion for reconsideration has
been held to be a condition sine qua non for certiorari, the rationale being that the lower court should be
given the opportunity to correct its error before recourse to the higher court is made. [Yau] vs. Manila
Banking Corp. 384 SCRA 340. The [acknowledged] exceptions to the rule find no application here. The
order of dismissal is issued by the NLRC in the exercise of its discretionary authority to fix the requirements
of the property bond for appeal, and the finding that the petitioners failed to perfect the appeal for non-
compliance with these conditions is both a factual and legal issue. We have a perfect textbook example of
an order that is amenable to a motion for reconsideration.8

Petitioners moved for the reconsideration of the appellate court’s dismissal of its Petition. The Court of Appeals,
however, in a Resolution dated 14 November 2006 found no cogent reason to disturb its original conclusions.

Hence, petitioners come to this Court, challenging the dismissal by the Court of Appeals of its Petition. 9

It must be primarily established that petitioners contravened the procedural rule for the extraordinary remedy
of certiorari. The rule is, for the writ to issue, it must be shown that there is no appeal, nor any plain, speedy and
adequate remedy in the ordinary course of law.10

The settled rule is that a motion for reconsideration is a condition sine qua non for the filing of a petition
for certiorari.11 Its purpose is to grant an opportunity for the court to correct any actual or perceived error attributed to
it by the re-examination of the legal and factual circumstances of the case. 12 The rationale of the rule rests upon the
presumption that the court or administrative body which issued the assailed order or resolution may amend the
same, if given the chance to correct its mistake or error.13

We have held that the "plain," "speedy," and "adequate remedy" referred to in Section 1, Rule 65 of the Rules of
Court14 is a motion for reconsideration of the questioned Order or Resolution. As we consistently held in numerous
cases, a motion for reconsideration is indispensable for it affords the NLRC an opportunity to rectify errors or
mistakes it might have committed before resort to the courts can be had. 15

In the case at bar, petitioners directly went to the Court of Appeals on certiorari without filing a motion for
reconsideration with the NLRC. The motion for reconsideration would have aptly furnished a plain, speedy, and
adequate remedy. As a rule, the Court of Appeals, in the exercise of its original jurisdiction, will not take cognizance
of a petition for certiorari under Rule 65, unless the lower court has been given the opportunity to correct the error
imputed to it.16 The Court of Appeals correctly ruled that petitioners’ failure to file a motion for reconsideration against
the assailed Resolution of the NLRC rendered its petition for certiorari before the appellate court as fatally defective.

We agree in the Court of Appeals’ finding that petitioners’ case does not fall under any of the recognized exceptions
to the filing of a motion for reconsideration, to wit: (1) when the issue raised is purely of law; (2) when public interest
is involved; (3) in case of urgency;17 or when the questions raised are the same as those that have already been
squarely argued and exhaustively passed upon by the lower court. 18 As the Court of Appeals reasoned, the issue

3
before the NLRC is both factual and legal at the same time, involving as it does the requirements of the property
bond for the perfection of the appeal, as well as the finding that petitioners failed to perfect the same. Evidently, the
burden is on petitioners seeking exception to the rule to show sufficient justification for dispensing with the
requirement.19 Certiorari cannot be resorted to as a shield from the adverse consequences of petitioners' own
omission of the filing of the required motion for reconsideration. 20

Nonetheless, even if we are to disregard the petitioners’ procedural faux pas with the Court of Appeals, and proceed
to review the propriety of the 19 May 2006 NLRC Resolution, we still arrive at the conclusion that the NLRC did not
err in denying petitioners’ appeal for its failure to file a bond in accordance with the Rules of Procedure of the
NLRC.21

In cases involving a monetary award, an employer seeking to appeal the decision of the Labor Arbiter to the NLRC
is unconditionally required by Article 22322 of the Labor Code to post a cash or surety bond equivalent to the amount
of the monetary award adjudged.23 It should be stressed that the intention of lawmakers to make the bond an
indispensable requisite for the perfection of an appeal by the employer is underscored by the provision that an
appeal by the employer may be perfected only upon the posting of a cash or surety bond. 24 The word "only" makes it
perfectly clear that the lawmakers intended the posting of a cash or surety bond by the employer to be the exclusive
means by which an employer’s appeal may be perfected. 25 Moreover, it bears stressing that the perfection of an
appeal in the manner and within the period prescribed by law is not only mandatory but jurisdictional, 26 and failure to
conform to the rules will render the judgment sought to be reviewed final and unappealable. 27 It cannot be
overemphasized that the NLRC Rules, akin to the Rules of Court, promulgated by authority of law, have the force
and effect of law.28

As borne by the records, petitioners filed a property bond which was conditionally accepted by the NLRC subject to
the following conditions specified in its 24 February 2006 Order:

The conditional acceptance of petitioner’s property bond was subject to the submission of the following: 1)
Certified copy of Board Resolution or a Certificate from the Corporate Secretary of Light Rail Transit
Authority stating that the Corporation President is authorized by a Board Resolution to submit title as
guarantee of judgment award; 2) Certified Copy of the Titles issued by the Registry of Deeds of Pasay City;
3) Certified Copy of the current tax declarations of Titles; 4) Tax clearance from the City Treasurer of Pasay
City; 5) Appraisal report of an accredited appraisal company attesting to the fair market value of property
within ten (10) days from receipt of this Order. Failure to comply therewith will result in the dismissal of the
appeal for non-perfection thereof.29

In the same Order, the NLRC warned that failure of the petitioners to comply with the conditions would result in the
dismissal of the appeal for non-perfection thereof. Petitioners were directed to comply with its given conditions within
10 days from receipt of the Order with a caveat that their failure will result in the dismissal of the appeal.
Subsequently, in its 19 May 2006 Resolution, the NLRC finally made a factual finding that petitioners failed to
comply with the conditions attached to their posting of the property bond. Thus, the NLRC dismissed petitioners’
appeal for non-perfection thereof.

Essentially, the failure of petitioners to comply with the conditions for the posting of the property bond is tantamount
to a failure to post the bond as required by law. What is even more salient is the fact that the NLRC had stressed
that petitioners had, for more than a month from receipt of its 24 February 2006 Order, to comply with the conditions
set forth therein for the posting of the property bond. It cannot be gainsaid that the NLRC had given petitioners a
period of 10 days from receipt of the Order with a warning that non-compliance would result in the dismissal of their
appeal for failure to perfect the same. Petitioners therefore disregarded the rudiments of the law in the perfection of
their appeal. We are without recourse but to take petitioners’ failure against their interest.

WHEREFORE, the Petition is DENIED. The Resolutions dated 24 August 2006 and 14 November 2006 of the Court
of Appeals in CA-G.R. SP. No. 95665 are AFFIRMED. Costs against petitioners.

SO ORDERED.

MINITA V. CHICO-NAZARIO
Associate Justice

WE CONCUR:

CONSUELO YNARES-SANTIAGO
Associate Justice
4
 Chairperson

MA. ALICIA AUSTRIA-MARTINEZ ANTONIO EDUARDO B. NACHURA

Associate Justice Associate Justice

RUBEN T. REYES
Associate Justice

ATTESTATION

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

CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson, Third Division

CERTIFICATION

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

REYNATO S. PUNO
Chief Justice

Footnotes

1
Penned by Associate Justice Mario L. Guariña III with Associate Justices Roberto A. Barrios and Lucenito
N. Tagle, concurring; rollo, pp. 52-53.

2
Id. at 55.

3
The Order disposed, thus:

WHEREFORE, foregoing premises considered, this Office hereby assumes jurisdiction over the
labor dispute at the Metro Transit Organization, Inc., pursuant to Article 263(g) of the Labor Code, as
amended.

Accordingly, all striking employees are hereby directed to return to work immediately upon receipt of
this Order and for the Company to accept them back under the same terms and conditions of
employment prevailing prior to the strike.

The parties are further directed to cease and desist from committing any act that will exacerbate the
situation.

Likewise, to expedite resolution of the dispute, the parties are directed to submit their respective
position papers and evidence to this Office within TEN (10) days from receipt hereof.

5
 Finally, to ensure compliance of this Order, PNP Chief Superintendent Edgardo Aglipay, NCR is
hereby deputized to assist in the peaceful and orderly implementation of this Order. (Id. at 194.)

4
Id. at 197-209.

5
CA rollo, pp. 135-136.

6
Id. at 36.

7
Id. at 37.

8
Rollo, p. 52.

9
Petitioner raises the following:

I. THE HONORABLE COURT OF APPEALS ERRED IN NOT DECLARING THAT THE PETITION
FOR CERTIORARI FALLS UNDER ANY OF THOSE INSTANCES WHERE A MOTION FOR
RECONSIDERATION NEED NOT BE FILED BEFORE A PETITION FOR CERTIORARI CAN BE
INSTITUTED.

II. THE HONORABLE COURT OF APPEALS ERRED IN IGNORING THE FACT THAT PUBLIC
RESPONDENT HAS NO JURISDICTION AND COMMITTED GRAVE ABUSE OF DISCRETION
WHEN IT ALSO ASSUMED JURISDICTION OVER THE PRESENT CASE DESPITE THE FACT
THAT IT IS THE SECRETARY OF LABOR WHICH HAS JURISDICTION OVER THE PRESENT
CASE.

III. ASSUMING PUBLIC RESPONDENT NLRC HAS JURISDICTION OVER THE PRESENT CASE,
THE HONORABLE COURT OF APPEALS ERRED IN IGNORING THE FACT THAT PUBLIC
RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION TANTAMOUNT TO LACK OR IN
EXCESS OF JURISDICTION WHEN IT DID NOT GIVE LRTA AND PETITIONER SUFFICIENT
TIME TO COMPLY WITH ITS ORDER TO SUBMIT THE DOCUMENTATION FOR THE APPEAL
BOND.

IV. ASSUMING PUBLIC RESPONDENT NLRC HAS JURISDICTION OVER THE PRESENT CASE,
THE HONORABLE COURT OF APPEALS ERRED IN IGNORING THE FACT THAT PUBLIC
RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION TANTAMOUNT TO LACK OR IN
EXCESS OF JURISDICTION WHEN IT DID NOT RESOLVE ON THE MERITS THE FOLLOWING
ISSUES:

A) The complaints state no cause of action because the non-renewal of the MOA between petitioner
and LRTA caused private respondents’ unemployment status.

B) The claims of private respondents are CBA related which CBA was entered into by and between
petitioner and PIGLAS or SEAM.

C) The unemployed status of private respondents was not caused by illegal dismissal.

D) Petitioner was not a labor-only contractor.

10
Solidum v. Court of Appeals, G.R. No. 161647, 22 June 2006, 492 SCRA 261, 270.

11
Office of the Ombudsman v. Laja, G.R. No. 169241, 2 May 2006, 488 SCRA 574, 580.

12
Id.

13
Republic v. Sandiganbayan, G.R. No. 141796, 15 June 2005, 460 SCRA 146, 158. The Court ruled that
the strict application of [Section 1 of Rule 65] will also prevent unnecessary and premature resort to
appellate proceedings.

14
SECTION 1. Petition for certiorari. – When any tribunal, board or officer exercising judicial or quasi-judicial
functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting
to lack or excess of jurisdiction, and there is no appeal, nor any plain, speedy, and adequate remedy in the
ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging
the facts with certainty and praying that judgment be rendered annulling or modifying the proceedings of
such tribunal, board or officer, and granting such incidental reliefs as law and justice may require.

6
15
Lagera v. National Labor Relations Commission, 385 Phil. 1087, 1091 (2000).

16
Yau v. Manila Banking Corporation, 433 Phil. 701, 709-710 (2002).

17
Government of the United States of America v. Purganan, 438 Phil. 417, 437 (2002).

18
Id.

19
Seagull Shipmanagement and Transport, Inc. v. National Labor Relations Commission, 388 Phil. 906, 912
(2000).

20
Id.

21
Section 6, Rule VI of the Rules of Procedure of the National Labor Relations Commission, provides:

Section 6. Bond. – In case the decision of the Labor Arbiter, the Regional Director or his duly
authorized Hearing Officer involves a monetary award, an appeal by the employer shall be perfected
only upon the posting of a cash or surety bond, which shall be in effect until final disposition of the
case, issued by a reputable bonding company duly accredited by the Commission or the Supreme
Court in an amount equivalent to the monetary award, exclusive of damages, and attorney’s fees.

The employer, his counsel, as well as the bonding company, shall submit a joint declaration under
oath attesting that the surety bond posted is genuine.

The Commission may, in justifiable cases and upon Motion of the Appellant, reduce the amount of
the bond. The filing of the motion to reduce bond shall not stop the running of the period to perfect
appeal.

22
The pertinent portion of Article 223 of the Labor Code, states:

ART. 223. Appeal. – x x x

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

23
Calabash Garments, Inc. v. National Labor Relations Commission, 329 Phil. 227, 233 (1996).

24
Navarro v. National Labor Relations Commission, 383 Phil. 765, 774 (2000).

25
Id.

Tan v. Court of Appeals, G.R. No. 157194, 20 June 2006, 491 SCRA 452, 459; Dela Cruz v. Golar Maritime
26

Services, Inc., G.R. No. 141277, 16 December 2005, 478 SCRA 173, 184; FILIPINAS (Pre-fabricated Bldg.)
Systems "Filsystems," Inc. v. National Labor Relations Commission, 463 Phil. 813, 818-819 (2003).

27
Philippine Transmarine Carriers, Inc. v. Cortina, 461 Phil. 422, 428 (2003), citing Imperial Textile Mills, Inc.
v. National Labor Relations Commission, G.R. No. 101527, 19 January 1993, 217 SCRA 237, 246.

28
Corporate Inn Hotel v. Lizo, G.R. No. 148279, 27 May 2004, 429 SCRA 573, 577.

29
Rollo, p. 171.

7
 SECOND DIVISION

G.R. No. 180962, February 26, 2014

PHILTRANCO SERVICE ENTERPRISES, INC., REPRESENTED BY ITS VICE–PRESIDENT FOR ADMINISTRATION,

M/GEN. NEMESIO M. SIGAYA, Petitioner, v. PHILTRANCO WORKERS UNION–ASSOCIATION OF GENUINE LABOR
ORGANIZATIONS (PWU–AGLO), REPRESENTED BY JOSE JESSIE OLIVAR, Respondent.

DECISION

DEL CASTILLO, J.:

While a government office1 may prohibit altogether the filing of a motion for reconsideration with respect to its decisions or
orders, the fact remains that certiorari inherently requires the filing of a motion for reconsideration, which is the tangible
representation of the opportunity given to the office to correct itself. Unless it is filed, there could be no occasion to rectify.
Worse, the remedy of certiorari would be unavailing. Simply put, regardless of the proscription against the filing of a motion
for reconsideration, the same may be filed on the assumption that rectification of the decision or order must be obtained, and
before a petition for certiorari may be instituted.

This Petition for Review on Certiorari2 seeks a review and setting aside of the September 20, 2007 Resolution 3 of the Court of
Appeals (CA) in CA–G.R. SP No. 100324,4 as well as its December 14, 2007 Resolution5 denying petitioner’s Motion for
Reconsideration.

Factual Antecedents

On the ground that it was suffering business losses, petitioner Philtranco Service Enterprises, Inc., a local land transportation
company engaged in the business of carrying passengers and freight, retrenched 21 of its employees. Consequently, the
company union, herein private respondent Philtranco Workers Union–Association of Genuine Labor Organizations (PWU–
AGLU), filed a Notice of Strike with the Department of Labor and Employment (DOLE), claiming that petitioner engaged in
unfair labor practices. The case was docketed as NCMB–NCR CASE No. NS–02–028–07.

Unable to settle their differences at the scheduled February 21, 2007 preliminary conference held before Conciliator–Mediator
Amorsolo Aglibut (Aglibut) of the National Conciliation and Mediation Board (NCMB), the case was thereafter referred to the
Office of the Secretary of the DOLE (Secretary of Labor), where the case was docketed as Case No. OS–VA–2007–008.

After considering the parties’ respective position papers and other submissions, Acting DOLE Secretary Danilo P. Cruz issued
a Decision6 dated June 13, 2007, the dispositive portion of which reads, as follows: chanRoblesvirtualLawlibrary

WHEREFORE, premises considered, we hereby ORDER Philtranco to:

1. REINSTATE to their former positions, without loss of seniority rights, the ILLEGALLY TERMINATED 17 “union officers”, x x
x, and PAY them BACKWAGES from the time of termination until their actual or payroll reinstatement, provided in the
computation of backwages among the seventeen (17) who had received their separation pay should deduct the payments
made to them from the backwages due them.

2. MAINTAIN the status quo and continue in full force and effect the terms and conditions of the existing CBA – specifically,
Article VI on Salaries and Wages (commissions) and Article XI, on Medical and Hospitalization – until a new agreement is
reached by the parties; and

3. REMIT the withheld union dues to PWU–AGLU without unnecessary delay.

The PARTIES are enjoined to strictly and fully comply with the provisions of the existing CBA and the other dispositions of
this Decision.

SO ORDERED.7 ChanRoblesVirtualawlibrary

Petitioner received a copy of the above Decision on June 14, 2007. It filed a Motion for Reconsideration on June 25, 2007, a
Monday. Private respondent, on the other hand, submitted a “Partial Appeal.”

In an August 15, 2007 Order8 which petitioner received on August 17, 2007, the Secretary of Labor declined to rule on
petitioner’s Motion for Reconsideration and private respondent’s “Partial Appeal”, citing a DOLE regulation 9 which provided
that voluntary arbitrators’ decisions, orders, resolutions or awards shall not be the subject of motions for reconsideration.
The Secretary of Labor held: chanRoblesvirt ualLawlibrary

WHEREFORE, the complainant’s and the respondent’s respective pleadings are hereby NOTED as pleadings that need not be
acted upon for lack of legal basis.

SO ORDERED.10 ChanRoblesVirtualawlibrary

The Assailed Court of Appeals Resolutions

On August 29, 2007, petitioner filed before the CA an original Petition for Certiorari and Prohibition, and sought injunctive
relief, which case was docketed as CA–G.R. SP No. 100324.

8
On September 20, 2007, the CA issued the assailed Resolution which decreed as follows: chanRoblesvirtualLawlibrary

WHEREFORE, premises considered, the instant Petition for Certiorari and Prohibition with Prayer for Temporary Restraining
Order and Preliminary Injunction is hereby DISMISSED. Philtranco’s pleading entitled “Reiterating Motion for The Issuance of
Writ of Preliminary Injunction and/or Temporary Restraining Order” is NOTED.

SO ORDERED.11 ChanRoblesVirtualawlibrary

The CA held that, in assailing the Decision of the DOLE voluntary arbitrator, petitioner erred in filing a petition
for certiorari under Rule 65 of the 1997 Rules, when it should have filed a petition for review under Rule 43 thereof, which
properly covers decisions of voluntary labor arbitrators. 12 For this reason, the petition is dismissible pursuant to Supreme
Court Circular No. 2–90.13 The CA added that since the assailed Decision was not timely appealed within the reglementary
15–day period under Rule 43, the same became final and executory. Finally, the appellate court ruled that even assuming for
the sake of argument that certiorari was indeed the correct remedy, still the petition should be dismissed for being filed out
of time. Petitioner’s unauthorized Motion for Reconsideration filed with the Secretary of Labor did not toll the running of the
reglementary 60–day period within which to avail of certiorari; thus, from the time of its receipt of Acting Labor Secretary
Cruz’s June 13, 2007 Decision on June 14 or the following day, petitioner had until August 13 to file the petition – yet it filed
the same only on August 29.

Petitioner filed a Motion for Reconsideration, which was denied by the CA through the second assailed December 14, 2007
Resolution. In denying the motion, the CA held that the fact that the Acting Secretary of Labor rendered the decision on the
voluntary arbitration case did not remove the same from the jurisdiction of the NCMB, which thus places the case within the
coverage of Rule 43.

Issues

In this Petition,14 the following errors are assigned: chanRoblesvirt ualLawlibrary

THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE PETITIONER AVAILED OF THE ERRONEOUS REMEDY IN
FILING A PETITION FOR CERTIORARI UNDER RULE 65 INSTEAD OF UNDER RULE 43 OF THE RULES OF COURT.

THE HONORABLE COURT OF APPEALS ERRED WHEN IT HELD THAT THE PETITION FOR CERTIORARI WAS FILED OUT OF
TIME.

THE HONORABLE COURT OF APPEALS ERRED WHEN IT DISMISSED THE PETITION OUTRIGHT ON THE BASIS OF PURE
TECHNICALITY.15 ChanRoblesVirtualawlibrary

Petitioner’s Arguments

In its Petition and Reply,16 petitioner argues that a petition for certiorari under Rule 65 – and not a petition for review under
Rule 43 – is the proper remedy to assail the June 13, 2007 Decision of the DOLE Acting Secretary, pointing to the Court’s
pronouncement in National Federation of Labor v. Hon. Laguesma 17 that the remedy of an aggrieved party against the
decisions and discretionary acts of the NLRC as well as the Secretary of Labor is to timely file a motion for reconsideration,
and then seasonably file a special civil action for certiorari under Rule 65 of the 1997 Rules of Civil Procedure.

Petitioner adds that, contrary to the CA’s ruling, NCMB–NCR CASE No. NS–02–028–07 is not a simple voluntary arbitration
case. The character of the case, which involves an impending strike by petitioner’s employees; the nature of petitioner’s
business as a public transportation company, which is imbued with public interest; the merits of its case; and the assumption
of jurisdiction by the Secretary of Labor – all these circumstances removed the case from the coverage of Article 262, 18 and
instead placed it under Article 263,19 of the Labor Code. Besides, Rule 43 does not apply to judgments or final orders issued
under the Labor Code.20

On the procedural issue, petitioner insists that it timely filed the Petition for Certiorari with the CA, arguing that Rule 65 fixes
the 60–day period within which to file the petition from notice of the denial of a timely filed motion for reconsideration,
whether such motion is required or not. It cites the Court’s pronouncement in ABS–CBN Union Members v. ABS–CBN
Corporation21 that “before a petition for certiorari under Rule 65 of the Rules of Court may be availed of, the filing of a motion
for reconsideration is a condition sine qua non to afford an opportunity for the correction of the error or mistake complained
of” and since “a decision of the Secretary of Labor is subject to judicial review only through a special civil action
of certiorari x x x [it] cannot be resorted to without the aggrieved party having exhausted administrative remedies through a
motion for reconsideration”.

Respondent’s Arguments

In its Comment,22 respondent argues that the Secretary of Labor decided Case No. OS–VA–2007–008 in his capacity as
voluntary arbitrator; thus, his decision, being that of a voluntary arbitrator, is only assailable via a petition for review under
Rule 43. It further echoes the CA’s ruling that even granting that certiorari was the proper remedy, the same was filed out of
time as the filing of a motion for reconsideration, which was an unauthorized pleading, did not toll the running of the 60–day
period. Finally, it argues that on the merits, petitioner’s case could not hold water as it failed to abide by the requirements of
law in effecting a retrenchment on the ground of business losses.

Our Ruling

The Court grants the Petition.

It cannot be said that in taking cognizance of NCMB–NCR CASE No. NS–02–028–07, the Secretary of Labor did so in a limited
capacity, i.e., as a voluntary arbitrator. The fact is undeniable that by referring the case to the Secretary of Labor,
Conciliator–Mediator Aglibut conceded that the case fell within the coverage of Article 263 of the Labor Code; the impending
strike in Philtranco, a public transportation company whose business is imbued with public interest, required that the
Secretary of Labor assume jurisdiction over the case, which he in fact did. By assuming jurisdiction over the case, the
provisions of Article 263 became applicable, any representation to the contrary or that he is deciding the case in his capacity
as a voluntary arbitrator notwithstanding.

9
It has long been settled that the remedy of an aggrieved party in a decision or resolution of the Secretary of Labor is to
timely file a motion for reconsideration as a precondition for any further or subsequent remedy, and then seasonably file a
special civil action for certiorari under Rule 65 of the 1997 Rules on Civil Procedure. 23 There is no distinction: when the
Secretary of Labor assumes jurisdiction over a labor case in an industry indispensable to national interest, “he exercises
great breadth of discretion” in finding a solution to the parties’ dispute. 24 “[T]he authority of the Secretary of Labor to
assume jurisdiction over a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to national
interest includes and extends to all questions and controversies arising therefrom. The power is plenary and discretionary in
nature to enable him to effectively and efficiently dispose of the primary dispute.” 25This wide latitude of discretion given to
the Secretary of Labor may not be the subject of appeal.

Accordingly, the Secretary of Labor’s Decision in Case No. OS–VA–2007–008 is a proper subject of certiorari, pursuant to the
Court’s pronouncement in National Federation of Labor v. Laguesma,26thus: chanRoblesvirtualLawlibrary

Though appeals from the NLRC to the Secretary of Labor were eliminated, presently there are several instances in the Labor
Code and its implementing and related rules where an appeal can be filed with the Office of the Secretary of Labor or the
Secretary of Labor issues a ruling, to wit: chanRoblesvirt ualLawlibrary

xxx

(6) Art. 263 provides that the Secretary of Labor shall decide or resolve the labor dispute [over] which he assumed
jurisdiction within thirty (30) days from the date of the assumption of jurisdiction. His decision shall be final and executory
ten (10) calendar days after receipt thereof by the parties.
From the foregoing we see that the Labor Code and its implementing and related rules generally do not provide for any mode
for reviewing the decision of the Secretary of Labor. It is further generally provided that the decision of the Secretary of
Labor shall be final and executory after ten (10) days from notice. Yet, like decisions of the NLRC which under Art. 223 of the
Labor Code become final after ten (10) days, decisions of the Secretary of Labor come to this Court by way of a petition for
certiorari even beyond the ten–day period provided in the Labor Code and the implementing rules but within the
reglementary period set for Rule 65 petitions under the 1997 Rules of Civil Procedure. x x x
xxx

In fine, we find that it is procedurally feasible as well as practicable that petitions for certiorari under Rule 65 against the
decisions of the Secretary of Labor rendered under the Labor Code and its implementing and related rules be filed initially in
the Court of Appeals. Paramount consideration is strict observance of the doctrine on the hierarchy of the courts, emphasized
in St. Martin Funeral Homes v. NLRC, on “the judicial policy that this Court will not entertain direct resort to it unless the
redress desired cannot be obtained in the appropriate courts or where exceptional and compelling circumstances justify
availment of a remedy within and calling for the exercise of our primary jurisdiction." 27 ChanRoblesVirtualawlibrary

On the question of whether the Petition for Certiorari was timely filed, the Court agrees with petitioner’s submission. Rule 65
states that where a motion for reconsideration or new trial is timely filed, whether such motion is required or not, the
petition shall be filed not later than 60 days counted from the notice of the denial of the motion. 28 This can only mean that
even though a motion for reconsideration is not required or even prohibited by the concerned government office, and the
petitioner files the motion just the same, the 60–day period shall nonetheless be counted from notice of the denial of the
motion. The very nature of certiorari – which is an extraordinary remedy resorted to only in the absence of plain,
available, speedy and adequate remedies in the course of law – requires that the office issuing the decision or order be given
the opportunity to correct itself. Quite evidently, this opportunity for rectification does not arise if no motion for
reconsideration has been filed. This is precisely what the Court said in the ABS–CBN Union Members case, whose essence
continues to this day. Thus: chanRoblesvirt ualLawlibrary

Section 8, Rule VIII, Book V of the Omnibus Rules Implementing the Labor Code, provides: chanRoblesvirtualLawlibrary

“The Secretary shall have fifteen (15) calendar days within which to decide the appeal from receipt of the records of the
case. The decision of the Secretary shall be final and inappealable.” x x x
The aforecited provision cannot be construed to mean that the Decision of the public respondent cannot be reconsidered
since the same is reviewable by writ of certiorari under Rule 65 of the Rules of Court. As a rule, the law requires a motion for
reconsideration to enable the public respondent to correct his mistakes, if any. In Pearl S. Buck Foundation, Inc., vs. NLRC,
this Court held:chanRoblesvirt ualLawlibrary

“Hence, the only way by which a labor case may reach the Supreme Court is through a petition for certiorari under Rule 65 of
the Rules of Court alleging lack or excess of jurisdiction or grave abuse of discretion. Such petition may be filed within a
reasonable time from receipt of the resolution denying the motion for reconsideration of the NLRC decision.” x x x
Clearly, before a petition for certiorari under Rule 65 of the Rules of Court may be availed of, the filing of a motion for
reconsideration is a condition sine qua non to afford an opportunity for the correction of the error or mistake complained of.

So also, considering that a decision of the Secretary of Labor is subject to judicial review only through a special civil action
of certiorari and, as a rule, cannot be resorted to without the aggrieved party having exhausted administrative remedies
through a motion for reconsideration, the aggrieved party, must be allowed to move for a reconsideration of the same so
that he can bring a special civil action for certiorari before the Supreme Court.29 ChanRoblesVirtualawlibrary

Indeed, what needs to be realized is that while a government office may prohibit altogether the filing of a motion for
reconsideration with respect to its decisions or orders, the fact remains that certiorariinherently requires the filing of a
motion for reconsideration, which is the tangible representation of the opportunity given to the office to correct itself. Unless
it is filed, there could be no occasion to rectify. Worse, the remedy of certiorari would be unavailing. Simply put, regardless
of the proscription against the filing of a motion for reconsideration, the same may be filed on the assumption that
rectification of the decision or order must be obtained, and before a petition for certiorari may be instituted.

Petitioner received a copy of the Acting Secretary of Labor’s Decision on June 14, 2007. It timely filed a Motion for
Reconsideration on June 25, which was a Monday, or the first working day following the last day (Sunday, June 24) for filing
the motion. But for lack of procedural basis, the same was effectively denied by the Secretary of Labor via his August 15,
2007 Order which petitioner received on August 17. It then filed the Petition for Certiorari on August 29, or well within the
fresh 60–day period allowed by the Rules from August 17. Given these facts, the Court finds that the Petition was timely
filed.

Going by the foregoing pronouncements, the CA doubly erred in dismissing CA–G.R. SP No. 100324.

WHEREFORE , the Petition is GRANTED. The assailed September 20, 2007 and December 14, 2007 Resolutions of the Court

10
of Appeals are REVERSED and SET ASIDE. The Petition in CA–G.R. SP No. 100324 is ordered REINSTATED and the Court
of Appeals is DIRECTED to RESOLVE the same with DELIBERATE DISPATCH. ChanRoblesVirtualawlibrary

SO ORDERED.

Carpio, Chairperson, Perez, Perlas–Bernabe, and Leonen,*JJ., concur

Endnotes:

*
Per Raffle dated February 5, 2014.

1
Or person, tribunal, or board.

Rollo , pp. 11–62.

2

3
Id. at 64–67; penned by Associate Justice Rosalinda Asuncion–Vicente and concurred in by Associate Justices Remedios A.
Salazar–Fernando and Enrico A. Lanzanas.

4
Entitled “Philtranco Service Enterprises, Inc., represented by its Vice President for Administration M/Gen. Nemesio M.
Sigaya, petitioner, versus The Honorable Secretary of the Department of Labor and Employment (DOLE) and Philtranco
Workers Union–Association of Genuine Labor Organizations, represented by Jose Jessie Olivar, respondents.”

Rollo, pp. 69–71.

5

6
Id. at 109–127.

7
Id. at 127.

8
Id. at 28; penned by then Secretary of Labor Arturo D. Brion (now a Member of this Court).

9
DEPARTMENT ORDER NO. 40–03, Rule XIX, Section 7.

10
Rollo, p. 128.

11
Id. at 67.

12
Rule 43, Section 1. Scope.

This Rule shall apply to appeals from judgments or final orders of the Court of Tax Appeals and from awards, judgments,
final orders or resolutions of or authorized by any quasi–judicial agency in the exercise of its quasi–judicial functions. Among
these agencies are the Civil Service Commission, Central Board of Assessment Appeals, Securities and Exchange
Commission, Office of the President, Land Registration Authority, Social Security Commission, Civil Aeronautics Board,
Bureau of Patents, Trademarks and Technology Transfer, National Electrification Administration, Energy Regulatory Board,
National Telecommunications Commission, Department of Agrarian Reform under Republic Act No. 6657, Government
Service Insurance System, Employees Compensation Commission, Agricultural Inventions Board, Insurance Commission,
Philippine Atomic Energy Commission, Board of Investments, Construction Industry Arbitration Commission, and voluntary
arbitratorsauthorized by law. (Emphasis supplied)

13
GUIDELINES TO BE OBSERVED IN APPEALS TO THE COURT OF APPEALS AND TO THE SUPREME COURT, which provides
that: chanRoblesvirt ualLawlibrary

4. Erroneous Appeals. – An appeal taken to either the Supreme Court or the Court of Appeals by the wrong or inappropriate
mode shall be dismissed. x x x
14
In a February 13, 2008 Resolution, the Court initially denied the petition for failure to sufficiently show that the appellate
court committed any reversible error. But on motion for reconsideration, the Court, in an August 27, 2008 Resolution,
reconsidered, and reinstated the Petition. Rollo, pp. 389, 452.

15
Id. at 24.

16
Id. at 485–495.

17
364 Phil. 44, 58 (1999).

18
ART. 262. Jurisdiction over other labor disputes. – The Voluntary Arbitrator or panel of Voluntary Arbitrators, upon
agreement of the parties, shall also hear and decide all other labor disputes including unfair labor practices and bargaining
deadlocks.

19
ART. 263. Strikes, picketing and lockouts. – (a) It is the policy of the State to encourage free trade unionism and free
collective bargaining.

(b) Workers shall have the right to engage in concerted activities for purposes of collective bargaining or for their mutual
benefit and protection. The right of legitimate labor organizations to strike and picket and of employers to lockout, consistent
with the national interest, shall continue to be recognized and respected. However, no labor union may strike and no
employer may declare a lockout on grounds involving inter–union and intra–union disputes.

(c) In case of bargaining deadlocks, the duly certified or recognized bargaining agent may file a notice of strike or the
employer may file a notice of lockout with the Department at least 30 days before the intended date thereof. In cases of
unfair labor practice, the period of notice shall be 15 days and in the absence of a duly certified or recognized bargaining
agent, the notice of strike may be filed by any legitimate labor organization in behalf of its members. However, in case of

11
dismissal from employment of union officers duly elected in accordance with the union constitution and by–laws, which may
constitute union busting where the existence of the union is threatened, the 15–day cooling–off period shall not apply and
the union may take action immediately.

(d) The notice must be in accordance with such implementing rules and regulations as the [Secretary] of Labor and
Employment may promulgate.

(e) During the cooling–off period, it shall be the duty of the [Department] to exert all efforts at mediation and conciliation to
effect a voluntary settlement. Should the dispute remain unsettled until the lapse of the requisite number of days from the
mandatory filing of the notice, the labor union may strike or the employer may declare a lockout.

(f) A decision to declare a strike must be approved by a majority of the total union membership in the bargaining unit
concerned, obtained by secret ballot in meetings or referenda called for that purpose. A decision to declare a lockout must be
approved by a majority of the board of directors of the corporation or association or of the partners in a partnership,
obtained by secret ballot in a meeting called for that purpose. The decision shall be valid for the duration of the dispute
based on substantially the same grounds considered when the strike or lockout vote was taken. The Department may, at its
own initiative or upon the request of any affected party, supervise the conduct of the secret balloting. In every case, the
union or the employer shall furnish the [Department the results of] the voting at least seven days before the intended strike
or lockout, subject to the cooling–off period herein provided.

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

In line with the national concern for and the highest respect accorded to the right of patients to life and health, strikes and
lockouts in hospitals, clinics and similar medical institutions shall, to every extent possible, be avoided, and all serious
efforts, not only by labor and management but government as well, be exhausted to substantially minimize, if not prevent,
their adverse effects on such life and health, through the exercise, however legitimate, by labor of its right to strike and by
management to lockout. In labor disputes adversely affecting the continued operation of such hospitals, clinics or medical
institutions, it shall be the duty of the striking union or locking–out employer to provide and maintain an effective skeletal
workforce of medical and other health personnel, whose movement and services shall be unhampered and unrestricted, as
are necessary to insure the proper and adequate protection of the life and health of its patients, most especially emergency
cases, for the duration of the strike or lockout. In such cases, therefore, the Secretary of Labor and Employment may
immediately assume, within twenty four (24) hours from knowledge of the occurrence of such a strike or lockout, jurisdiction
over the same or certify it to the Commission for compulsory arbitration. For this purpose, the contending parties are strictly
enjoined to comply with such orders, prohibitions and/or injunctions as are issued by the Secretary of Labor and Employment
or the Commission, under pain of immediate disciplinary action, including dismissal or loss of employment status or payment
by the locking–out employer of backwages, damages and other affirmative relief, even criminal prosecution against either or
both of them.

The foregoing notwithstanding, the President of the Philippines shall not be precluded from determining the industries that, in
his opinion, are indispensable to the national interest, and from intervening at any time and assuming jurisdiction over any
such labor dispute in order to settle or terminate the same.

(h) Before or at any stage of the compulsory arbitration process, the parties may opt to submit their dispute to voluntary
arbitration.

(i) The Secretary of Labor and Employment, the Commission or the voluntary arbitrator shall decide or resolve the dispute
within thirty (30) calendar days from the date of the assumption of jurisdiction or certification or submission of the dispute,
as the case may be. The decision of the President, the Secretary of Labor and Employment, the Commission or the voluntary
arbitrator shall be final and executory ten (10) calendar days after receipt thereof by the parties.

20
Citing Section 2 of the Rule, thus:

Sec. 2. Cases not covered.

This Rule shall not apply to judgments or final orders issued under the Labor Code of the Philippines.

21
364 Phil. 133, 141 (1999).

22
Rollo, pp. 454–469.

Barairo v. Office of the President, G.R. No. 189314, June 15, 2011, 652 SCRA 356, 358; Masada Security Agency, Inc. v.
23

Department of Labor and Employment, G.R. No. 158750, September 27, 2010 (Resolution); Philippine Long Distance
Telephone Co. Inc. v. Manggagawa ng Komunikasyon sa Pilipinas, 501 Phil. 704, 716 (2005); Manila Pearl Corporation v.
Manila Pearl Independent Workers Union, 496 Phil. 158, 162–163 (2005); University of Immaculate Concepcion v. Secretary
of Labor and Employment, 476 Phil. 704, 711–712 (2004).

Steel Corporation of the Philippines v. SCP Employees Union–National Federation of Labor Unions, G.R. Nos. 169829–30,
24

April 16, 2008, 551 SCRA 594, 609.

25
LMG Chemicals Corporation v. Secretary of Labor, 408 Phil. 701, 711 (2001).

26
National Federation of Labor v. Hon. Laguesma, supra note 16.

12
27
Id. at 54–58.

28
Sec. 4. When and where to file the petition. The petition shall be filed not later than sixty (60) days from notice of the
judgment, order or resolution. In case a motion for reconsideration or new trial is timely filed, whether such motion is
required or not, the petition shall be filed not later than sixty (60) days counted from the notice of the denial of the motion.

xxx

29
ABS–CBN Union Members v. ABS–CBN Corporation, supra note 21 at 140–141.

13
 THIRD DIVISION

G.R. No. 194575, April 11, 2018

ANGELITO N. GABRIEL, Petitioner, v. PETRON CORPORATION, ALFRED A. TRIO, AND FERDINANDO

ENRIQUEZ, Respondents.

DECISION

MARTIRES, J.:

We resolve the petition for review on certiorari under Rule 45 of the Rules of Court filed by Angelito N. Gabriel (Gabriel) of
the 21 July 20101 and the 17 November 20102 Resolutions of the Court of Appeals (CA) in CA-G.R. SP No. 114858.

THE FACTS

Gabriel was hired by Petron Corporation (Petron) as Maintenance Technician sometime in May 1987. Owing to his years of
service and continued education, Gabriel rose from the ranks and eventually became a Quality Management Systems (QMS)
Coordinator on 18 October 2004.3 However, Gabriel did not get any increase in his salary or any additional benefits despite
his new position in the company.

Gabriel lamented that he was unable to reap the benefits of his promotion because of a complaint letter filed by Ms. Charina
Quiwa (Quiwa),4 goddaughter of Alfred A. Trio (Trio), the General Manager of the Refining Division in Limay, Bataan. As a
result, Gabriel was given notice to explain his side, though the notice failed to include the letter of Quiwa. 5 Nevertheless,
Gabriel denied harassing Quiwa and her family, and explained he had already settled the misunderstanding in confidence. 6

According to his complaint, Gabriel thereafter suffered a series of harassment acts from private respondents as the company
interpreted all his acts as violations of its rules and regulations. 7 Hence, Gabriel claimed that he was constructively dismissed
from Petron.

On their part, Petron's management explained that Gabriel's assignment as QMS Coordinator was not a promotion but was a
result of company reorganization. Meanwhile, his relief as QMS Coordinator and detail to another office were not intended to
harass or punish him, but were primarily to afford him the opportunity to defend himself in the ongoing investigation.

In the course of the investigation of Quiwa's complaint, it was brought to the attention of the company that Gabriel, as
president of Gabriel Consultancy Services, proposed training services to another refinery plant in Bataan using the courses
used at Petron's refinery.8 Gabriel was required to explain his side.9 A few months later, Gabriel was asked to address
another violation,10 for his use of company equipment and resources to reproduce 1,603 pages of company proprietary
materials without authorization.11

Eventually, the investigation on Gabriel was concluded sometime in March 2005, and he was formally charged with
dishonesty, misconduct, misbehavior, and violation of "netiquette" policy, wherein he was required to justify why he should
not be terminated.12 Gabriel complied through a letter dated 30 March 2005, wherein he stressed that he had been placed in
an unbearable and humiliating situation.13

After the hearing committee was convened, Gabriel failed to show up at work so he was given another notice of violation for
absence without official leave.14 In his explanation, Gabriel said that he was merely following the advice of his psychiatrist
and that he had no work to report back to given that he had been placed under floating status since the beginning of the
investigation.15 On 12 May 2005, management took disciplinary action by suspending Gabriel from work for ten (10) days. 16

On 19 April 2007, after both parties had submitted their respective position papers, the labor arbiter rendered a decision in
favor of Gabriel. Upon close scrutiny of the job description of a QMS Coordinator and its various duties and responsibilities,
the labor arbiter concluded that it was a supervisory position and that Gabriel was indeed promoted from his previous
position.17

Moreover, the labor arbiter noted that Gabriel's fate shifted after the complaint of Quiwa. While at first glance the complaint
may appear serious, she found the matter not at all connected with Gabriel's work or would affect at all the performance of
his duties.18 She did not agree that the complaint could impact Gabriel's efficiency and compromise the company's
operations.19 As for the other charges attributed to Gabriel, the labor arbiter considered these as acts of harassment and
offshoots of the complaint filed by Quiwa.20

As a result of the labor arbiter's findings, Gabriel was awarded full back wages, separation pay, moral and exemplary
damages, and attorney's fees.21

The NLRC Decision

However, on 27 April 2009, the NLRC reversed the labor arbiter's ruling and dismissed the complaint against Petron. 22 In
dismissing the complaint against Petron, the NLRC held that: (1) Gabriel's assignment as QMS Coordinator was a mere
lateral transfer because the appointment letter did not indicate an increase in rank and/or salary; (2) his subsequent detail to
another office was not a demotion since Gabriel still received the same salary and benefits; (3) instead of putting Gabriel
14
under preventive suspension, Petron's management thought it best to just give him another assignment; and (4) there was
no substantial evidence to support the acts of harassment perpetrated by management.

After his motion for reconsideration was denied, Gabriel turned to the CA for recourse.

The Proceedings before the CA

Since Gabriel's counsel on record received the denial of his motion for reconsideration on 14 May 2010, he had sixty (60)
days or until 13 July 2010, to file a petition for certiorari. However, on 10 July 2010, Gabriel had to file a motion for
extension due to time and distance constraints for Gabriel to secure an authentication from the Philippine Consular Office in
Australia.23

In its 21 July 2010 resolution, the CA denied the motion for extension saying that no extensions are allowed under the
amended Rule 65 of the Rules of Court, to wit:
Section 4, Rule 65, 1997 Rules of Civil Procedure, as amended under A.M. No. 07-7-12-SC, December 7, 2007, no longer
provides for an extension of period to file a petition for certiorari. Significantly, in Laguna Metts Corporation vs. Court of
Appeals, 594 SCRA 139, July 27, 2009, the Supreme Court explicitly ruled:

xxxx

WHEREFORE, petitioner's motion for extension is denied and accordingly, the present case is dismissed. 24
From this, Gabriel filed his motion for reconsideration with prayer to admit the attached petition for certiorari claiming that
the factual circumstances of his case are exceptional and merit a relaxation of the rules of procedure. 25

After considering the submissions of both parties, the CA maintained that Gabriel's motion failed to present any substantial
and meritorious ground which would justify a reversal of its earlier ruling. 26

OUR RULING

Aggrieved, Gabriel now seeks relief before this Court through this present petition. At the onset, Gabriel wants to correct the
serious error the CA committed in denying his motion for extension out of sheer technicality. At the same time, Gabriel
imputes grave abuse of discretion amounting to lack or in excess of jurisdiction on the part of the NLRC for setting aside the
findings of constructive dismissal and reversing the decision of the labor arbiter.

Under our present labor laws, there is no provision for appeals from the decision of the NLRC. In fact, under Article 229 of
the Labor Code, all decisions of the NLRC shall be final and executory after ten (10) calendar days from receipt thereof by
the parties. Nevertheless, appellate courts - including this Court - still have an underlying power to scrutinize decisions of the
NLRC on questions of law even though the law gives no explicit right to appeal. Simply said, even if there is no direct appeal
from the NLRC decision, the aggrieved party still has a legal remedy.

Certiorari proceedings are limited in scope and narrow in character because they only correct acts rendered without
jurisdiction, in excess of jurisdiction, or with grave abuse of discretion. Indeed, relief in a special civil action for certiorari is
available only when the following essential requisites concur: (a) the petition must be directed against a tribunal, board, or
officer exercising judicial or quasi-judicial functions; (b) the tribunal, board, or officer must have acted without or in excess
of jurisdiction or with grave abuse of discretion amounting to lack or in excess of jurisdiction; and (c) there is no appeal, nor
any plain, speedy, and adequate remedy in the ordinary course of law. 27 It will issue to correct errors of jurisdiction and not
mere errors of judgment, particularly in the findings or conclusions of the quasi-judicial tribunals (such as the NLRC).
Accordingly, when a petition for certiorari is filed, the judicial inquiry should be limited to the issue of whether the NLRC
acted with grave abuse of discretion amounting to lack or in excess of jurisdiction. 28

In St. Martin Funeral Home v. NLRC,29 the Court laid down the proper recourse should the aggrieved party seek judicial
review of the NLRC decision:
The Court is, therefore, of the considered opinion that ever since appeals from the NLRC to the Supreme Court were
eliminated, the legislative intendment was that the special civil action of certiorari was and still is the proper vehicle for
judicial review of decisions of the NLRC.

xxxx

Therefore, all references in the amended Section 9 of B.P. No. 129 to supposed appeals from the NLRC to the Supreme Court
are interpreted and hereby declared to mean and refer to petitions for certiorari under Rule 65. Consequently, all such
petitions should henceforth be initially filed in the Court of Appeals in strict observance of the doctrine on the hierarchy of
courts as the appropriate forum for the relief desired.30
From the CA, the labor case is then elevated to this Court for final review. In reviewing labor cases through a petition for
review on certiorari, we are solely confronted with whether the CA correctly determined the presence or absence of grave
abuse of discretion in the NLRC decision before it, and notwhether the NLRC decision on the merits of the case was
correct.31 Specifically, we are limited to:

(1) Ascertaining the correctness of the CA's decision in finding the presence or
absence of grave abuse of discretion. This is done by examining, on the basis of
the parties' presentations, whether the CA correctly determined that at the NLRC
level, all the adduced pieces of evidence were considered; no evidence which
should not have been considered was considered; and the evidence presented
supports the NLRC's findings; and
(2) Deciding other jurisdictiohal error that attended the CA's interpretation or
application of the law.32

15
However, we are constrained from reviewing these issues in the present case because the CA, at the outset, denied Gabriel's
motion for extension to file a petition for certiorari and did not make any finding on the presence or absence of grave abuse
of discretion. In other words, we cannot dwell on matters covered under Gabriel's petition for certiorari because what was
elevated before us via petition for review on certiorari was the CA's denial of his motion for extension. Under these
circumstances, we can only look into the legal soundness behind the denial of the motion for extension because of our limited
mode of judicial review under Rule 45 of the Rules of Court.

Under Section 4 Rule 65 of the Rules of Court and as applied in the Laguna Metts Corporation case,33 the general rule is that
a petition for certiorari must be filed within sixty (60) days from notice of the judgment.

In Labao v. Flores,34 however, we laid down exceptions to the strict application of this rule:
However, there are recognized exceptions to their strict observance, such as: (1) most persuasive and weighty reasons; (2)
to relieve a litigant from an injustice not commensurate with his failure to comply with the prescribed procedure; (3) good
faith of the defaulting party by immediately paying within a reasonable time from the time of the default; (4) the existence of
special or compelling circumstances; (5) the merits of the case; (6) a cause not entirely attributable to the fault or
negligence of the party favored by the suspension of the rules; (7) a lack of any showing that the review sought is merely
frivolous and dilatory; (8) the other party will not be unjustly prejudiced thereby; (9) fraud, accident, mistake or excusable
negligence without appellant's fault; (10) peculiar legal and equitable circumstances attendant to each case; (11) in the
name of substantial justice and fair play; (12) importance of the issues involved; and (13) exercise of sound discretion by
the judge guided by all the attendant circumstances. Thus, there should be an effort on the part of the party invoking
liberality to advance a reasonable or meritorious explanation for his/her failure to comply with the rules. 35 (citations omitted)
In the motion for extension to file a petition for certiorari, it was stated that Gabriel had since been working and living in
Australia for a few years subsequent to his separation from Petron. The week before the 60-day deadline for filing, Gabriel's
counsel had already emailed a copy of the petition. Gabriel explained in his motion that he needed more time to secure an
appointment with the Philippine Consular Office in Melbourne, Australia.

Unlike those mentioned exceptions when the period to file a petition for certiorari was not strictly applied, we do not find
Gabriel's reason to meet the deadline compelling. In the first place, his counsel, who is supposed to be well-versed in our
rules of procedure, should have anticipated that Gabriel needed to take his oath before the Philippine Consular Office. By
giving Gabriel only one (1) week to comply with this requirement, his lawyer did not give him much time and simply
assumed that Gabriel could deliver on time. On the other hand, Gabriel, assuming he really wanted to pursue his case
against Petron, could have easily visited the Philippine Consular Office as soon as possible. Instead, he opted to wait for a
few days thinking that time was not of the essence.

We must remember that the rationale for the amendments under A.M. No. 07-7-12-SC is essentially to prevent the use (or
abuse) of the petition for certiorari under Rule 65 to delay a case or even defeat the ends of justice. 36 Here, we cannot simply
reward the lack of foresight on the part of Gabriel and his lawyer.

As a final note, although the C A never ruled on the merits of the case, it had a chance to consider Gabriel's petition for
certiorari because this was attached to the motion for reconsideration. For practical reasons, the CA would not have ignored
outright the attached petition and not consider the merits of the case. Regardless whether the CA did or not, we can assume
that it was acting within its judicial discretion.

WHEREFORE, premises considered, the present petition is DENIED. The assailed 21 July 2010 and 17 November 2010
Resolutions of the Court of Appeals in CA-G.R. SP No. 114858 are hereby AFFIRMED.

SO ORDERED.

Velasco, Jr., (Chairperson), Bersamin, Leonen, and Gesmundo, JJ., concur.

April 18, 2018

NOTICE OF JUDGMENT

Sirs / Mesdames:

Please take notice that on April 11, 2018 a Decision, copy attached hereto, was rendered by the Supreme Court in the
above-entitled case, the original of which was received by this Office on April 18, 2018 at 3:00 p.m.

Very truly yours,

(SGD)
WILFREDO V. LAPITAN
Division Clerk of Court

Endnotes:

1
Rollo, pp. 45-47; penned by Associate Justice Fernanda Lampas-Peralta, and concurred in by Associate Justices Priscilla J.
Baltazar-Padilla and Rodil Z. Zalameda.

2
Id. at 126.
16
3
Id. at 175-176.

4
Id. at 177. The complaint against Gabriel was about him fabricating e-mails to make it appear that they were involved in an
extramarital affair.

5
Id. at 187.

6
Id. at 188.

7
Id. at 240-242.

8
Id. at 178-186.

9
Id. at 189.

10
Id. at 190-191.

11
Id. at 192.

12
Id. at 197-198.

13
Id. at 203-206.

14
Id. at 208.

15
Id. at 213.

16
Id. at 216.

17
Id. at 93.

18
Id. at 96.

19
Id.

20
Id. at 97.

21
Id. at 97-100.

22
Id. at 101-109.

23
Id. at 39-43.

24
Id. at 45-47.

25
Id. at 48-54.

26
Id. at 126.

27
PALEA v. Cacdac, 645 Phil. 494, 501 (2010).

28
Empire Insurance Company v. NLRC, 355 Phil. 694, 701 (1998).

29
356 Phil. 811, 823 (1998).

30
Id. at 824.

Montoya v. Transmed Manila Corporation, 613 Phil. 696, 707 (2009); Phimco Industries, Inc. v. Phimco Industries Labor
31

Association (PILA), 642 Phil. 275, 288 (2010); Niña Jewelry Manufacturing of Metal Arts, Inc. v. Montecillo, 677 Phil. 447,
464 (2011); Gonzales v. Solid Cement Corporation, 697 Phil. 619, 638 ((2012; Career Philippines Shipmanagement, Inc. v.
Serna, 700 Phil. 1, 9 (2012); Century Iron Works, Inc. v. Banas, 711 Phil. 576, 586-587 (2013).

32
Stanley Fine Furniture v. Gallano, 748 Phil. 624, 637 (2014).

33
Phil. 530, 537 (2009).

34
649 Phil. 213-225 (2010).

35
Id. at 222-223.

36
Supra note 33 at 537.

17
 FIRST DIVISION

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

ANDY D. BALITE, DELFIN M. ANZALDO AND MONALIZA DL. BIHASA, Petitioners, v. SS VENTURES
INTERNATIONAL, INC., SUNG SIK LEE AND EVELYN RAYALA , Respondents.

DECISION

PEREZ, J.:

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

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

The Facts

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

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

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

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

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

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

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

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

Consequently, respondent corporation is hereby ordered to reinstate [petitioners] to their former positions without loss of
seniority rights and other privileges with backwages initially computed at this time and reflected below.

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

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

13th month Attorney’s

Backwages
pay fees

1. Andy
P162,969.04 P 17,511.00 P 18,048.00
Balite
2. Delfin
158,299.44 17,511.00 17,511.00
Anzaldo
3. Monaliza
116,506.62 17,511.00 13,401.75
Bihasa
All other claims are dismissed for lack of factual or legal basis. 4
Aggrieved, respondents interposed an appeal by filing a Notice of Appeal and paying the corresponding appeal fee. However,
instead of filing the required appeal bond equivalent to the total amount of the monetary award which is P490,308.00,
respondents filed a Motion to Reduce the Appeal Bond to P100,000.00 and appended therein a manager’s check bearing the
said amount. Respondents cited financial difficulty as justification for their inability to post the appeal bond in full owing to
18
the partial shutdown of respondent company’s operations.

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

Similarly ill-fated was respondents’ Motion for Reconsideration which was denied by the NLRC in a Resolution 6 dated 30 April
2009.

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

WHEREFORE, premises considered, finding grave abuse of discretion on the part of the [NLRC], the instant petition
is GRANTED. The [NLRC’s] Resolutions dated November 27, 2008 and April 30, 2009, respectively, are hereby SET ASIDE.
[The NLRC] is hereby directed to decide petitioners’ appeal on the merits. 8
In a Resolution9 dated 30 December 2010, the Court of Appeals refused to reconsider its earlier decision.

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

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

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

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

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

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

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

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

xxxx

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

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

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

xxxx

Section 4. Requisites for Perfection of Appeal. – (a) The appeal shall be: chanRoblesvirt ualLawlibrary

(1) filed within the reglementary period as provided in Section 1 of this Rule;
(2) verified by the appellant himself/herself in accordance with Section 4, Rule 7 of the
Rules of Court ,as amended;
(3) in the form a of a memorandum of appeal which shall state the grounds relied upon
19
 and the arguments in support thereof; the relief prayed for; and with a statement of
the date when the appellant received the appealed decision, award or order;
(4) in three (3) legibly typewritten or printed copies; and
(5) accompanied by:
i) proof of payment of the required appeal fee and legal research fee;
ii) posting of cash or surety bond as provided in Section 6 of this Rule; and
iii) proof of service upon the other parties.
xxxx

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

xxxx

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

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

xxxx

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

These statutory and regulatory provisions explicitly provide that an appeal from the Labor Arbiter to the NLRC must be
perfected within ten calendar days from receipt of such decisions, awards or orders of the Labor Arbiter. In a
judgment involving a monetary award, the appeal shall be perfected only upon (1) proof of payment of the required appeal
fee; (2) posting of a cash or surety bond issued by a reputable bonding company; and (3) filing of a memorandum
of appeal.14
chanroblesvirtuallawlibrary

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

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

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

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

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

In line with Sara Lee and the objective that the appeal on the merits to be threshed out soonest by the NLRC, the Court
holds that the appeal bond posted by the respondent in the amount of P100,000.00 which is equivalent to around 20% of the
total amount of monetary bond is sufficient to perfect an appeal. With the employer’s demonstrated good faith in filing the
motion to reduce the bond on demonstrable grounds coupled with the posting of the appeal bond in the requested amount,
as well as the filing of the memorandum of appeal, the right of the employer to appeal must be upheld. This is in recognition
of the importance of the remedy of appeal, which is an essential part of our judicial system and the need to ensure that
every party litigant is given the amplest opportunity for the proper and just disposition of his cause freed from the
constraints of technicalities.17 chanroblesvirtuallawlibrary

WHEREFORE, premises considered, the petition is DENIED. The assailed Decision and Resolution of the Court of Appeals
are hereby AFFIRMED.

20
SO ORDERED.

Sereno, C. J., (Chairperson), Leonardo De-Castro, Bersamin, and Perlas-Bernabe, JJ., concur. cralawlawlibrary

Endnotes:

1
Penned by Associate Justice Rosmari D. Carandang with Associate Justices Ramon R. Garcia and Manuel M. Barrios,
concurring. Rollo, pp. 22-31.

2
Id. at 33-34.

3
Id. at 24-25.

4
Id.

5
Id. at 61-63.

6
Id. at 58-60.

7
Id. at 23-31.

8
Id. at 30.

9
Id. at 33-34.

10
Id. at 6-20.

11
Id. at 11.

12
Exceptions: a) the conclusion is a finding of fact grounded on speculations, surmises and conjectures; b) the inferences
made are manifestly mistaken, absurd or impossible; c) there is a grave abuse of discretion; d) there is misappreciation of
facts; and e) the court, in arriving in its findings, went beyond the issues of the case and the same are contrary to the
admission of the parties or the evidence presented. OSM Shipping Phil., Inc. v. Dela Cruz, 490 Phil. 392, 402 (2005).

13
Bughaw Jr., v. Treasure Island Industrial Corporation, 573 Phil. 435, 442 (2008).

14
Colby Construction and Management Corporation v. NLRC, 564 Phil. 145, 156 (2007).

15
G.R. Nos. 178034, 178117 and 186984-85, October 17, 2013.

16
G.R. Nos. 180147-180150, 180319 and 180685, June 4, 2014.

17
Andrea Camposagrado v. Pablo Camposagrado, 506 Phil. 583, 588-589 (2005).

21
 Republic of the Philippines
Supreme Court
Manila

THIRD DIVISION

MRS. ALBERTA YANSON/ G.R. No. 159026

HACIENDA VALENTIN-BALABAG,
Petitioner,
Present:

YNARES-SANTIAGO, J.,
Chairperson,
- versus - AUSTRIA-MARTINEZ,
CORONA,*
NACHURA, and
REYES, JJ.
THE HON. SECRETARY, DEPARTMENT
OF LABOR AND EMPLOYMENT
(LEGAL SERVICE-MANILA),
Public Respondent,

MARDY CABIGO, MARIANO CABIGO,

JORGE CABIGO, RAMONA CABIGO,
RODOLFO VALDEZ, DEONELA VALDEZ,
LYDIA TALIBONG,** GERMAN TALIBONG,***
EFREN MALUNES, DELMA ENRIQUEZ,
REGIE ENRIQUEZ, LUCIA GERVACIO,
ROGELIO GERVACIO, EDWIN ESPARAS,
CONRADO ESPARAS, BERNALDA
ALCANTARA, RONALDO ALCANTARA,
RENALDO SENADRE,**** ANGELO SENADRE,*****
JOSE ANTARAN, MORITA ANTARAN,
JOHNNY ANTARAN, JOEMARIE ANTARAN,
SENADOR TALIDONG, JONELSON TALIDONG,
ANIOLINA OCSEN, RONITO LASQUETO,
LORETO LASQUETO, BELCESAN
LASQUETO, FELIZARDO DELOS REYES,
AURELIO DELOS REYES, ORLANDO PADOL,
PRECY CABAHOG, EMILIO CABAHOG,
EDEN MALUNES, CARMELO
ESMERALDA, DOLORES FLORES,
RENATO FLORES, ELADIO
ALCANTARA, INOCENCIO BERNAIZ,
and RONILO LASQUETO,
Private Respondents. Promulgated:
February 11, 2008
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
22
 DECISION

AUSTRIA-MARTINEZ, J.:

Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing
the October 30, 2002 Decision[1] of the Court of Appeals (CA) which affirmed the September
21, 2001 Order[2] of the Secretary of the Department of Labor and Employment (public
respondent), and the May 22, 2003 CA Resolution [3] which denied the motion for
reconsideration.

The facts are of record.

On March 27, 1998, Mardy Cabigo and 40 other workers (private respondents) filed with the
Department of Labor and Employment-Bacolod District Office (DOLE Bacolod) a request for
payroll inspection[4] of Hacienda Valentin Balabag owned by Alberta Yanson (petitioner). DOLE
Bacolod conducted an inspection of petitioners establishment on May 27, 1998, and issued a
Notice of Inspection Report, finding petitioner liable for the following violations of labor
standard laws:
1. Underpayment of salaries and wages (workers being paid a daily rate of Ninety Pesos
[P90.00] since 1997 and Seventy Five Pesos [P75.00] prior to such year);
2. Non-payment of 13th month pay for two (2) years;
3. Non-payment of Social Amelioration Bonus (SAB) for two (2) years;
4. Non-payment of employers 1/3 carabao share.[5]
and directing her to correct the same, thus:

You are required to affect [sic] restitution and/or correction of the foregoing at the company or
plant level within ten (10) calendar days from notice hereof.

Any question of the above findings should be submitted to this Office within five (5) working
days from notice hereof otherwise order of compliance shall be issued.

This notice shall be posted conspicuously in the premises of the workplace, removal of which
shall subject the establishment to a fine and/ or contempt proceedings.

When there is a certified union, a copy of the notice shall be furnished said union.[6]

In addition, DOLE Bacolod scheduled a summary investigation and issued, by registered mail,
notices of hearing[7] as well as a subpoena duces tecum[8] to the parties.Petitioner did not appear
in any of the scheduled hearings, or present any pleading or document.[9]

In a Compliance Order[10] dated August 12, 1998, DOLE Bacolod directed petitioner to pay,
within five (5) days, P9,084.00 to each of the 41 respondents or a total of P372,444.00, and to
submit proof of payment thereof. It also required petitioner to correct existing violations of
occupational safety and health standards.[11]

23
Thereafter, DOLE Bacolod issued on December 17, 1998 a Writ of Execution of its August 12,
1998 Compliance Order, viz.:

NOW, THEREFORE, you are hereby commanded to proceed to the premises of HAD.
VALENTIN/BALABAG, MS. ALBERTA YANSON located at Brgy. Graneda or at Burgos
St., BacolodCity and require the respondent to comply with the Order and pay the amount of
THREE HUNDRED SEVENTY-TWO THOUSAND FOUR HUNDRED FORTY-FOUR
(P372,444.00).

You are to collect the above-stated amount from the respondent and deposit the same to the
Cashier of this Office for appropriate disposition to herein workers and/;or the supervision of the
Office of the Regional Director. Otherwise, you are to execute this Writ by attaching the goods
and chattel of the respondent not exempt from execution or in case of insufficiency thereof,
against the real or immovable property.

You are further ordered to collect the Execution and/or Sheriff Fee in the amount of TWO
THOUSAND ONE HUNDRED TWENTY-SEVEN (P2,127.00) PESOS.

Return this Writ to this Office within sixty (60) days from receipt hereof together with your
statement in writing of the proceeding that you shall have conducted by virtue hereof.[12]
On February 17, 1999, petitioner filed with DOLE Bacolod a Double Verified Special
Appearance to Oppose Writ of Execution For Being a Blatant and Dangerous Violation of Due
Process,[13] claiming that she did not receive any form of communication, or participate in any
proceeding relative to the subject matter of the writ of execution. Petitioner also impugned the
validity of the August 12, 1998 Compliance Order subject of the writ of execution on the
ground of lack of employment relationship between her and private respondents. DOLE
Bacolod denied said motion in an Order[14] dated March 11, 1999.

Petitioner filed with public respondent a Verified Appeal[15] and Supplement to the Verified
Appeal,[16] posting therewith an appeal bond of P1,000.00 in money order and attaching thereto
a Motion to be Allowed to Post Minimal Bond with Motion for Reduction of Bond. [17] Public
respondent dismissed her appeal in an Order[18] dated September 21, 2001.

Petitioner filed a Petition for Certiorari[19] which was denied due course and dismissed by the
CA in its assailed October 30, 2002 Decision. Petitioners motion for reconsideration was also
denied.

Hence, petitioners present recourse on the following grounds:

I. The Honorable Court of Appeals and the Honorable Secretary of Labor, with all due respect,
deprived the herein petitioner-appellant of her constitutional right not to be deprived of property
without due process of law, and of free access to courts and quasi-judicial bodies by reason of
poverty;

II. The Honorable Labor Secretary in his assailed Decision, with all due respect, for some rather
mysterious reason or the other, dismissed the appeal with utter disregard of the fact that her
Regional Director, whose orders were appealed to her were never received by the Petitioner.

Said orders assessing payments against the petitioner were issued without notice received by
petitioner, and enforced without giving the petitioner a chance to controvert the atrocious figures,
and two years after the petitioners farm had ceased its operations;

III. The Honorable Labor Secretary denied the petitioner of her right to seasonably raise the issue
of lack of jurisdiction and the right [to] appeal;
24
 IV. There are very serious errors of fact and law in the assailed decision of the Honorable Labor
Secretary, with all due respect; or that the assailed decision, with all due respect, is patently and
blatantly contrary to law and jurisprudence.[20]

The petition lacks merit.

The appeal which petitioner filed with public respondent ultimately questioned the August 12,
1998 Compliance Order in which DOLE Bacolod, in the exercise of its visitorial and
enforcement power, awarded private respondents P9,084.00 each in labor standard benefits or
the aggregate sum of P377,444.00.[21] For its perfection, the appeal was therefore subject to the
requirements prescribed under Article 128 of the Labor Code, as amended by Republic Act No.
7730,[22] viz.:
Art. 128. Visitorial and Enforcement Power. - x x x (b) Notwithstanding the provisions of
Articles 129 and 217 of this Code to the contrary, and in cases where the relationship of
employer-employee still exists, the Secretary of Labor and Employment or his duly authorized
representatives shall have the power to issue compliance orders to give effect to the labor
standards provisions of this Code and other labor legislation based on the findings of labor
employment and enforcement officers or industrial safety engineers made in the course of
inspection. The Secretary or his duly authorized representatives shall issue writs of execution to
the appropriate authority for the enforcement of their orders, except in cases where the employer
contests the findings of the labor employment and enforcement officer and raises issues
supported by documentary proofs which were not considered in the course of inspection.

An order issued by the duly authorized representative of the Secretary of Labor and Employment
under this article may be appealed to the latter. In 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 a reputable bonding company duly accredited by the Secretary of Labor and Employment in
the amount equivalent to the monetary award in the order appealed from. (Emphasis ours)
When petitioner filed her Verified Appeal and Supplement to the Verified Appeal, she posted a
mere P1,000.00-appeal bond and attached a Motion to be Allowed to Post Minimal Bond with
Motion for Reduction of Bond. Public respondent rejected said appeal for insufficiency of the
appeal bond, viz.:

We note and stress that there is no analogous application in the Office of the Secretary of the
practice in the NLRC of reducing the appeal bond; the law applicable to the Office of the
Secretary of Labor and Employment does not allow this practice. In other words, the respondents
request for the reduction of the required bond cannot be allowed for lack of legal basis. Hence,
for lack of the required bond, the respondents appeal was never duly perfected and must
therefore be dismissed.[23] (Emphasis ours)
Citing Allied Investigation Bureau, Inc. v. Secretary of Labor and Employment,[24] the CA held
that public respondent did not commit grave abuse of discretion in holding that petitioner failed
to perfect her appeal due to the insufficiency of her bond.[25]
Petitioner contends that the CA and public respondent denied her the right to appeal when they
rejected her P1,000.00-appeal bond. She insists that her appeal bond cannot be based on the
monetary award of P372,444.00 granted by DOLE Bacolod in its August 14, 1998 Order which,
having been rendered without prior notice to her, was a patent nullity and completely without
effect.[26] She argues that her appeal bond should instead be based on her capacity to pay;
otherwise, her right to free access to the courts as guaranteed under Article III, Section 2 of the
Constitution would be set to naught merely because of her diminished financial capacity.

Our sympathy for petitioner cannot override our fidelity to the law.
25
In Guico, Jr. v. Hon. Quisumbing,[27] we held that the posting of the proper amount of the appeal
bond under Article 128 (b) is mandatory for the perfection of an appeal from a monetary award
in labor standard cases:

The next issue is whether petitioner was able to perfect his appeal to the Secretary of
Labor and Employment. Article 128 (b) of the Labor Code clearly provides that the appeal bond
must be "in the amount equivalent to the monetary award in the order appealed from." The
records show that petitioner failed to post the required amount of the appeal bond. His appeal
was therefore not perfected.[28]

Just like the petitioner in the present case, the employer in Guico v. Secretary of Labor had also
sought a reduction of the appeal bond due to financial losses arising from the shutdown of his
business; yet, we did not temper the strict requirement of Article 128 (b) for him. The rationale
behind the stringency of such requirement is that the employer-appellant may choose between a
cash bond and a surety bond. Hence, limitations in his liquidity should pose no obstacle to his
perfecting an appeal by posting a mere surety bond.

Moreover, Article 128(b) deliberately employed the word only in reference to the
requirements for perfection of an appeal in labor standards cases. Only commands a restrictive
application,[29] giving no room for modification of said requirements.

Petitioner pointed out, however, that Article 223[30] of the Labor Code prescribes similar
requirements for perfection of appeals to the National Labor Relations Commission (NLRC);
yet, the same has been applied with moderation in that a reduction of the appeal bond may be
allowed.[31] That is correct; but then, it should be borne in mind that reduction of bond in the
NLRC is expressly authorized under the Rules implementing Article 223, viz.:[32]
RULE VI. APPEALS

Section 6. Bond. In case the decision of the Labor Arbiter, the Regional Director or his
duly authorized Hearing Officer involves a monetary award, an appeal by the employer shall be
perfected only upon the posting of a cash or surety bond, which shall be in effect until final
disposition of the case, issued by a reputable bonding company duly accredited by the
Commission or the Supreme Court in an amount equivalent to the monetary award, exclusive of
damages and attorneys fees.

The employer, his counsel, as well as the bonding company, shall submit a joint
declaration under oath attesting that the surety bond posted is genuine.

The Commission may, in justifiable cases and upon Motion of the Appellant, reduce
the amount of the bond. The filing of the motion to reduce bond shall not stop the running of
the period to perfect appeal. (Emphasis supplied.)

No similar authority is given the DOLE Secretary in Department Order No. 18-02
(Implementing Rules), Series of 2002, amending Department Order No. 7-A, Series of 1995,
implementing Article 128(b), thus:
Rule X-A

Section 8. Appeal. - (a) The Order of the Regional Director shall be final and executory unless
appealed to the Secretary within ten (10) calendar days from receipt thereof.

26
 (b) The appeal shall be filed with the Regional Office where the case originated together with the
memorandum of the appealing party. The appellee may file his answer within ten (10) calendar
days from receipt of the appellants memorandum.

Section 9. Cash or surety bond; when required. - In case the 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 a duly accredited bonding company. The bond should be in the
amount equivalent to the monetary award indicated in the order.

Section 10. Writ of execution. - (a) If no appeal is perfected within the reglementary period, the
Regional Director shall, motu propio or upon motion of any interested party, issue a writ of
execution to enforce the order. In the enforcement of the writ, the assistance of the law
enforcement authorities may be sought.

(b) A writ of execution may be recalled subsequent to its issuance, if it is shown that an appeal
has been perfected in accordance with this rule. (Emphasis ours)
Under the foregoing Implementing Rules, it is plain that public respondent has no authority to
accept an appeal under a reduced bond.

Further applying the Implementing Rules, there is one other reason for holding that petitioner
failed to perfect her appeal. It is of record that she received the August 12, 1998 Compliance
Order issued by DOLE-Bacolod, as indicated in the registry return card marked Annex I.
[33]
Petitioner does not question this, except to point out that the registry return card does not
indicate the date she received the order. That is of no consequence, for the fact remains that
petitioner was put on actual notice not only of the existence of the August 12, 1998 Compliance
Order but also of the summary investigation of her establishment. It behooves her to file a
timely appeal to public respondent[34] or object to the conduct of the investigation.[35] Petitioner
did neither, opting instead to sit idle and wait until the following year to question the
investigation and resultant order, in the guise of opposing the writ of execution through a
motion dubbed Double Verified Special Appearance to Oppose 'Writ of Execution' For Being a
Blatant and Dangerous Violation of Due Process. [36] Such appeal already went beyond the ten-
day period allowed under Section 8(b) of Rule X-B of the Implementing Rules.

In fine, the CA was correct in holding that public respondent did not commit grave abuse
of discretion in rejecting the appeal of petitioner due to the insufficiency of her appeal bond.

Even if we delve into its substance, her appeal would still not prosper. Petitioner questions the
August 12, 1998 Compliance Order on the grounds that she was never notified of the
proceedings leading to its issuance, and that as early as 1997, her employment relationship with
the private respondents had already been severed.

We dwell only on questions of law, not purely questions of fact, in petitions for review
on certiorari under Rule 45 of the Rules of Court. The first issue which petitioner raised, that is,
whether she was properly served the notices of hearing issued by DOLE-Bacolod, is purely
factual.[37] The determination made by DOLE-Bacolod on this matter binds us, especially as it
was not reversed by public respondent and the CA. We therefore cannot supplant its factual
finding with our own,[38] moreso that petitioners bare denial cannot outweigh the probative value
of the registry return cards attached to the record which indicate that said notices were received
by petitioner.[39]

27
 Anent the second issue, the records do not sustain petitioners claim. In a Collective
Bargaining Agreement dated January 29, 1998,[40] petitioner acknowledged under oath that she
is the employer of private respondents Mardy Cabigo, et al., who are members of the union
known as Commercial and Agro-Industrial Labor Organization.

WHEREFORE, the petition is DENIED for lack of merit.

No costs.

SO ORDERED.

MA. ALICIA AUSTRIA-MARTINEZ

Associate Justice

WE CONCUR:

CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson

RENATO C. CORONA ANTONIO EDUARDO B. NACHURA

Associate Justice Associate Justice

RUBEN T. REYES
Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation before the
case was assigned to the writer of the opinion of the Courts Division.

CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson, Third Division
28
 C E R T I FI CAT I O N

Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairpersons
attestation, it is hereby certified that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the Courts Division.

REYNATO S. PUNO
Chief Justice

*
In lieu of Justice Minita V. Chico-Nazario, per Special Order No. 484 dated January 11, 2008.
**
Spelled Talidong in the December 17, 1998 Writ of Execution issued by DOLE Bacolod; rollo, p. 104
***
Id.
****
Spelled Sanadrein the December 17, 1998 Writ of Execution issued by DOLE Bacolod; rollo, p. 104.
*****
Id.
[1]
Penned by Associate Justice Bernardo P. Abesamis and concurred in by Associate Justices Juan Q. Enriquez, Jr. and Edgardo F.
Sundiam; rollo, p.42.
[2]
Id. at 77.
[3]
Id. at 55.
[4]
CA rollo, p. 65.
[5]
CA rollo, p. 91.
[6]
Id.
[7]
Rollo, pp. 102-102.
[8]
Memorandum for Public Respondent, id. at 222.
[9]
Id.
[10]
Id. at 104.
[11]
Id. at 105.
[12]
Rollo, p. 105.
[13]
Id. at 107.
[14]
Id. at 90.
[15]
Id. at 80.
[16]
Id. at 112.
[17]
Rollo, p. 99.
[18]
Id. at 77.
[19]
Id. at 62.
[20]
Id. at 25-26.
[21]
Verified Appeal, rollo, p. 82.
[22]
An Act Further Strengthening the Visitorial and Enforcement Powers of the Secretary of Labor and Employment, Amending for the
Purpose Article 128 (b) of Presidential Decree No. 442.
[23]
September 21, 2001 DOLE Order, id. at 28.
[24]
377 Phil. 80, 92 (1999).
[25]
Rollo, p. 47.
[26]
Petition, id. at 27.
[27]
359 Phil. 197 (1998).
[28]
Guico, Jr. v. Hon. Quisumbing, id. at 209.
[29]
Sapitan v. JB Line, G.R. No. 163775, October 19, 2007.
[30]
Article 223. Appeal. - Decisions, awards, or orders of the Labor Arbiter are final and executory unless appealed to the Commission
by any or both parties within ten (10) calendar days from receipt of such decisions, awards, or orders...
xxxx
In case of judgment involving a monetary award, an appeal by the employer may be perfected only upon the posting of a cash
or surety bond issued by a reputable bonding company duly accredited by the Commission in the amount equivalent to the monetary
award in the judgment appealed from.
[31]
Nicol v. Footjoy Industrial Corp., G.R. No. 159372, July 27, 2007.
[32]
Computer Innovations Center v. National Labor Relations Commission, G.R. No. 152410, June 29, 2005, 462 SCRA 183, 189.
[33]
Rollo, p. 103.
[34]
Laguna CATV Network, Inc. v. Maraan, 440 Phil. 734, 740 (2002).
[35]
EJR Crafts Corporation v. Court of Appeals, G.R. No. 154101, March 10, 2006, 484 SCRA 340, 351.
[36]
Rollo, p. 109.
[37]
Velayo-Fong v. Velayo, G.R. NO. 155488, December 6, 2006, 510 SCRA 320, 329.

29
[38]
EJR Crafts Corporation v. Court of Appeals, supra note 35, at 349.
[39]
Rollo, pp. 101-103.
[40]
CA rollo, pp. 70-83.

SECOND DIVISION

G.R. No. 220506, January 18, 2017

C.I.C.M. MISSION SEMINARIES (MARYHURST, MARYHEIGHTS, MARYSHORE AND MARYHILL) SCHOOL OF

THEOLOGY, INC., FR. ROMEO NIMEZ, CICM, Petitioners, v. MARIA VERONICA C. PEREZ, Respondent.

DECISION

MENDOZA, J.:

In this petition for review on certiorari1 under Rule 45 of the Rules of Court, petitioner C.I.C.M. Mission Seminaries
(Maryhurst, Maryheights, Maryshore and Maryhill) School of Theology, Inc., and Fr. Romeo Nimez, CICM (petitioners), seek
the review of the May 27, 2015 Decision2 and September 7, 2015 Resolution3 of the Court of Appeals (CA) in CA-G.R. SP. No.
137132.

In the assailed rulings, the CA dismissed the petitioners' petition for certiorari filed under Rule 65 of the Rules of Court
questioning the September 8, 2014 Resolution of the National Labor Relations Commission (NLRC) in LER Case No. 07-205-
14, which affirmed the July 10, 2014 Order of the Labor Arbiter (LA) in NLRC Case No. NCR-12-14242-07, issued in favor of
Maria Veronica C. Perez (respondent).

The Antecedents

This controversy is an offshoot of an illegal dismissal case filed by the respondent against the petitioners. In its June 16,
2008 Decision, the LA recognized respondent's right to receive from the petitioners backwages and separation pay in lieu of
reinstatement. Thus, it ordered the petitioners to pay respondent the aggregate amount of P286,670.58. The LA decision was
affirmed by the NLRC, by the CA and by this Court in G.R. No. 200490.

The decision became final and executory on October 4, 2012, as evidenced by the Entry of Judgment. Consequently,
respondent moved for the issuance of a writ of execution. The petitioners opposed and moved for the issuance of a certificate
of satisfaction of judgment, alleging that their obligation had been satisfied by the release of the cash bond in the amount of
P272,337.05 to respondent.

In its July 10, 2014 Order, the LA ruled that the cash bond posted by the petitioners was insufficient to satisfy their
obligation. Thus, it ordered the issuance of a writ of execution, to wit: chanRoblesvirt ualLawlibrary

After evaluation, this Office deems it proper to grant [respondent's] Motion for Issuance of Writ of Execution. The fact that
[petitioner CICM's] cash bond has been released to respondent in the amount of P272,337.05 does not mean full satisfaction
of the award as petitioner CICM insists.

The Decision dated 16 June 200[8] which was affirmed by the Commission, the Court of Appeals and the Supreme Court
specifically states that [respondent] is entitled to backwages and separation pay until the finality of the Decision. Further, the
Resolution of the Court of Appeals dated February 2, 2012 stressed the need to recompute the monetary award specifically
with regard to the payment of backwages, separation pay and attorney's fees, so as to update the total monetary award to
which respondent is entitled in accordance with prevailing laws and jurisprudence.

This Office therefore ordered the recomputation of complainant's award of additional backwages from 07 June 2008 until 04
October 2012, the finality of the Supreme Court decision, and additional separation pay also until 04 October 2012. The total
award therefore is P1,847,088.89. From this amount should be deducted the amount respondent received at P272,337.05.
Thus, the additional backwages and separation pay due is P1,575,751.84. Since there is no more legal hindrance in the
enforcement of the judgment; this Office orders the issuance of the writ of execution. 4

Undaunted, the petitioners elevated an appeal before the NLRC. Nevertheless, in its September 8, 2014 Decision, the NLRC
affirmed the ruling of the LA.

Aggrieved, the petitioners filed a petition for certiorari with the CA.

Meanwhile, the LA issued an undated writ of execution addressed to the Sheriff, who, in tum, implemented it by garnishing
upon CICM's bank deposit with BPI Family Savings Bank. CICM moved for the urgent quashal of the said writ and for the
garnishment to be lifted.

30
On January 14, 2015, the LA issued an order lifting the notice of garnishment made on CICM's bank accounts. Nonetheless,
on April 13, 2015, the LA still ordered the issuance of a writ of execution to enforce the balance of the judgment award. The
dispositive portion reads:chanRoblesvirt ualLawlibrary

WHEREFORE, premises considered, the Urgent Motion to Quash Writ of Execution is granted. The Writ of Execution dated 3
October 2014 is hereby ordered quashed effective immediately. The Motion to Lift Garnishment of CICM Missionaries, Inc.'s
account with BPI Family Savings Bank will be lifted upon release of its bond covered by BPI Check No. 0000704053 in the
amount of P266,670.58 (O.R. No. 6742637) to [respondent].

Let a Writ of Execution be issued against [petitioners] to enforce the balance of the judgment award. 5

On May 27, 2015, the CA dismissed the petition filed by the petitioners. The petitioners moved for reconsideration. In its
September 7, 2015 Resolution, the CA denied their motion.

Hence, this petition.

The petitioners, therefore, ask this Court to determine "what should be the legal basis for the computation of the backwages
and separation pay of an illegally dismissed employee in a case where reinstatement was not ordered despite appeals made
by said employee which [delayed] the final resolution of the issue on reinstatement." 6

The petitioners challenge the affirmation by the CA and NLRC of the July 10, 2014 Order of the LA, which recomputed
respondent's award of additional backwages and separation pay until October 4, 2012, the finality of this Court's decision in
G.R. No. 200490. They argue that the computation of backwages and separation pay of respondent should be only up to
June 16, 2008, the date when the LA rendered her decision in the main case and which was also the date when
reinstatement was refused. They contend that although the cases cited by the CA - Surima v. NLRC,7Gaco v. NLRC,8Oscar
Ledesma and Company v. NLRC,9Labor v. NLRC, 10Rasonable v. NLRC 11 and Bustamante v. NLRC,12 commonly held that the
computation of the separation pay and backwages shall be up to the time of finality of this Court's decision, the same were
not applicable to their case. They point varying factual antecedents and claim that in the cases mentioned, the employers
were the ones who appealed, thereby delaying the resolution of the illegal dismissal cases before the LA. Thus, the increase
in the awards should necessarily be shouldered by the employer. This circumstance, however, is not present in this case. In
other words, they posit that if the employer caused the delay in satisfying the judgment award, the computation should be
up to the finality of the case. If it were the employee's fault, as in this case, the computation should only run until the time
actual reinstatement is no longer possible nor practicable.13

In her Comment,14 respondent argued that the recomputation of the total monetary award should be until October 4, 2012
(the date when the main case became final); and that her appeal of the main case should not prejudice her as she had the
right to file the same.

In their Reply,15 the petitioners contended that the computation made by the LA in the main case, which has become final
and executory, could no longer be disturbed following the doctrine of immutability of judgment.

The Court's Ruling

The Court finds no merit in the petition.

To begin with, the petitioners failed to append the required affidavit of service. The rule is, such affidavit is essential to due
process and the orderly administration of justice even if it is used merely as proof that service has been made on the other
party.16 The utter disregard of this requirement as held in a catena of cases cannot be justified by harking to substantial
justice and the policy of liberal construction of the Rules. Indeed, technical rules of procedure are not meant to frustrate the
ends of justice. Rather, they serve to effect the proper and orderly disposition of cases and, thus, effectively prevent the
clogging of court dockets.17 Thus, in Ferrer v. Villanueva,18 the Court held that petitioner's failure to append the proof of
service to his petition for certiorari was a fatal defect.

Hence, the denial of this case is in order.

For the guidance of the bench and the bar, however, the Court opts to also delve into the merits of the case.

As a precept, the Court's duty in a Rule 45 petition, assailing the decision of the CA in a labor case elevated to it through a
Rule 65 petition, is limited only to the determination of whether the CA committed an error in judgment in declaring the
absence or existence, as the case may be, of grave abuse of discretion on the part of the NLRC. 19

As a consequence, the Court shall examine only whether the CA erred in not finding grave abuse of discretion when the NLRC
affirmed the LA's findings that the separation pay in lieu of reinstatement as well as backwages due to respondent should be
recomputed until the finality of the Court's decision in G.R. No. 200490, despite the fact that the delay in the resolution of
the said case was brought about by respondent herself.

On this point, the Court rules in the negative.

Grave abuse of discretion, which has been defined as a capricious and whimsical exercise of judgment so patent and gross as
to amount to an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law, 20 requires proof that the CA
committed errors such that its decision was not made in contemplation of law. The burden of proof rests upon the party who
asserts.21

The petitioners, however, failed to carry out such burden.

The decision of the CA is based on long standing jurisprudence that in the event the aspect of reinstatement is disputed,
backwages, including separation pay, shall be computed from the time of dismissal until the finality of the decision ordering
the separation pay. In Gaco v. NLRC,22 it was ruled that with respect to the payment of backwages and separation pay in lieu
31
of reinstatement of an illegally dismissed employee, the period shall be reckoned from the time compensation was withheld
up to the finality of this Court's decision. This was reiterated in Surima v. NLRC 23 and Session Delights Ice Cream and Fast
Foods v. CA.24

The reason for this was explained in Bani Rural Bank, Inc. v. De Guzman.25 When there is an order of separation pay (in lieu
of reinstatement or when the reinstatement aspect is waived or subsequently ordered in light of a supervening event making
the award of reinstatement no longer possible), the employment relationship is terminated only upon the finality of the
decision ordering the separation pay. The finality of the decision cuts-off the employment relationship and represents the
final settlement of the rights and obligations of the parties against each other. Hence, backwages no longer accumulate upon
the finality of the decision ordering the payment of separation pay because the employee is no longer entitled to any
compensation from the employer by reason of the severance of his employment. One cannot, therefore, attribute patent
error on the part of the CA when it merely affirmed the NLRC's conclusion, which was clearly based on jurisprudence.

Plainly, it does not matter if the delay caused by an appeal was brought about by the employer or by the employee. The rule
is, if the LA's decision, which granted separation pay in lieu of reinstatement, is appealed by any party, the employer-
employee relationship subsists and until such time when decision becomes final and executory, the employee is entitled to all
the monetary awards awarded by the LA.

In this case, respondent remained an employee of the petitioners pending her partial appeal. Her employment was only
severed when this Court, in G.R. No. 200490, affirmed with finality the rulings of the CA and the labor tribunals declaring her
right to separation pay instead of actual reinstatement. Accordingly, she is entitled to have her backwages and separation
pay computed until October 4, 2012, the date when the judgment of this Court became final and executory, as certified by
the Clerk of Court, per the Entry of Judgment in G.R. No. 200490.

The Court would not have expected the CA and the NLRC to rule contrary to the above pronouncements. If it were otherwise,
all employees who are similarly situated will be forced to relinquish early on their fight for reinstatement, a remedy, which
the law prefers over severance of employment relation. Furthermore, to favor the petitioners' position is nothing short of a
derogation of the State's policy to protect the rights of workers and their welfare under Article II, Section 8 of the 1987
Constitution.26

The petitioners, nonetheless, claim that it was not their fault why the amounts due ballooned to the present level. They are
mistaken. Suffice it to state that had they not illegally dismissed respondent, they will not be where they are today. They
took the risk and must suffer the consequences.

Finally, the Court disagrees with the petitioners' assertion that a recomputation would violate the doctrine of immutability of
judgment. It has been settled that no essential change is made by a recomputation as this step is a necessary consequence
that flows from the nature of the illegality of dismissal declared in that decision. By the nature of an illegal dismissal case,
the reliefs continue to add on until full satisfaction thereof. The recomputation of the awards stemming from an illegal
dismissal case does not constitute an alteration or amendment of the final decision being implemented. The illegal dismissal
ruling stands; only the computation of the monetary consequences of the dismissal is affected and this is not a violation of
the principle of immutability of final judgments. 27

WHEREFORE, the petition is DENIED. The Temporary Restraining Order issued by this Court on February 3, 2016 is
hereby LIFTED.

SO ORDERED. chanroblesvirtuallawlibrary

Carpio, (Chairperson), Peralta, Leonen, and Jardeleza,* JJ., concur.

Endnotes:

*
Per Special Order No. 2416 dated January 4, 2017.

Rollo, pp. 8-25.

1

2
Id. at 26-39. Penned by Associate Justice Marlene Gonzales-Sison, with Associate Justices Remedios A. Salazar-Fernando
and Ramon A. Cruz, concurring.

3
Id. at 40-41. Penned by Associate Justice Marlene Gonzales-Sison, with Associate Justices Remedios A. Salazar-Fernando
and Ramon A. Cruz, concurring.

4
The date of the LA's Decision should be 2008 not 2003.

5
See Petition, Rollo, p. 13.

6
Id. at 14.

7
353 Phil. 461 (1998).

8
300 Phil. 261(1994).

9
316 Phil. 80 (1995).

10
318 Phil. 219 (1995).

11
324 Phil. 191 (1996).

12
325 Phil. 415 (1996).

32
13
Rollo, p. 21.

14
Id. at 60-74.

15
Id. at 106-109.

16
Ang Biat Huan Sons Industries, Inc. v. Court of Appeals, 547 Phil. 588, 569 (2007).

17
Ferrer v. Villanueva, 557 Phil. 643, 648 (2007).

18
Id.

19
Brown Madonna Press Inc. v. Casas, G.R. No. 200898, June 15, 2015, 757 SCRA 525, 536.

20
United Coconut Planters Bank v. Looyuko, 560 Phil. 581, 591-592 (2007).

21
In Acabal v. Acabal, 494 Phil. 528, 541 (2005), this Court has reiterated that [b]asic is the rule in evidence that the burden
of proof lies upon him who asserts it, not upon him who denies, since, by the nature of things, he who denies a fact cannot
produce any proof of it.

22
Supra note 8.

23
353 Phil. 461 (1998).

24
625 Phil. 612 (2010).

25
721 Phil. 84 (2013).

The Constitution, Section 18. The State affirms labor as a primary social economic force. It shall protect the rights of
26

workers and promote their welfare.

27
Session Delights Ice Cream and Fast Foods v. CA, 625 Phil. 612, 629 (2010).

33
DURING the execution stage in a case for illegal dismissal filed by respondent Maria Veronica C.
Perez against petitioners C.I.C.M. Mission Seminaries School of Theology, Inc. and Fr. Romeo
Nimez, the latter challenged the affirmation by the Court of Appeals (CA) and National Labor
Relations Commission (NLRC) of the July 10, 2014 order of the Labor Arbiter (LA), which
computed respondent’s award of additional backwages and separation pay until Oct. 4, 2012, the
finality of the Supreme Court’s decision.

They argued that the computation of backwages and separation pay of respondent should be
only up to June 16, 2008, the date when the LA rendered her decision in the main case and which
was also the date when reinstatement was refused.

They contended that it was respondent who appealed the case, thereby delaying the resolution
of the illegal dismissal case. Thus, the increase in the awards should not be shouldered by them.

Does petitioners’ contention find merit?

Ruling: No.

The decision of the CA is based on long standing jurisprudence that in the event the aspect of
reinstatement is disputed, backwages, including separation pay, must be computed from the
time of dismissal until the finality of the decision ordering the separation pay. In Gaco v. NLRC,
300 Phil. 261(1994), it was ruled that with respect to the payment of backwages and separation
pay in lieu of reinstatement of an illegally dismissed employee, the period must be reckoned
from the time compensation was withheld up to the finality of the Court’s decision. This was
reiterated in Surima v. NLRC,353 Phil.461(1998) and Session Delights Ice Cream and Fast Foods
v. CA, 625 Phil.612 (2010).

The reason for this was explained in Bani Rural Bank, Inc. v. De Guzman, 721 Phil. 84 (2013).
When there is an order of separation pay (in lieu of reinstatement or when the reinstatement
aspect is waived or subsequently ordered in light of a supervening event making the award of
reinstatement no longer possible), the employment relationship is terminated only upon the
finality of the decision ordering the separation pay. The finality of the decision cuts off the
employment relationship and represents the final settlement of the rights and obligations of the
parties against each other.

Hence, backwages no longer accumulate upon the finality of the decision ordering the payment
of separation pay because the employee is no longer entitled to any compensation from the
employer by reason of the severance of his employment. One cannot, therefore, attribute patent
error on the part of the CA when it merely affirmed the NLRC’s conclusion, which was clearly
based on jurisprudence.

Plainly, it does not matter if the delay caused by an appeal was brought about by the employer
or by the employee. The rule is, if the LA’s decision, which granted separation pay in lieu of
reinstatement, is appealed by any party, the employer-employee relationship subsists and until
such time when decision becomes final and executory, the employee is entitled to all the
monetary awards awarded by the LA.

In this case, respondent remained an employee of the petitioners pending her partial appeal. Her
employment was only severed when this Court, in G.R. No. 200490, affirmed with finality the
rulings of the CA and the labor tribunals declaring her right to separation pay instead of actual
reinstatement.

Accordingly, she is entitled to have her backwages and separation pay computed until Oct. 4,
2012, the date when the judgment of the Court became final and executory, as certified by the
Clerk of Court, per the Entry of Judgment in G.R. No. 200490.

The Court would not have expected the CA and the NLRC to rule contrary to the above
pronouncements. If it were otherwise, all employees who are similarly situated will be forced to
relinquish early on their fight for reinstatement, a remedy, which the law prefers over severance
of employment relation. Furthermore, to favor the petitioners’ position is nothing short of a

34
derogation of the State’s policy to protect the rights of workers and their welfare under Article II,
Section 8 of the 1987 Constitution.

The petitioners, nonetheless, claim that it was not their fault why the amounts due ballooned to
the present level. They are mistaken. Suffice it to state that had they not illegally dismissed
respondent, they will not be where they are today. They took the risk and must suffer the
consequences. (Mendoza, J., SC 2nd Div., C.I.C.M. Mission Seminaries (Maryhurst, Maryheights,
Maryshore and Maryhill) School of Theology, Inc., et.al. vs. Maria Veronica C. Perez, G.R. No.
220506, January 18, 2017).

35
 THIRD DIVISION

G.R. No. 175689, August 13, 2014

GEORGE A. ARRIOLA, Petitioner, v. PILIPINO STAR NGAYON, INC. AND/OR MIGUEL G. BELMONTE, Respondents.

DECISION

LEONEN, J.:

The prescriptive period for filing an illegal dismissal complaint is four years from the time the cause of action accrued. This
four-year prescriptive period, not the three-year period for filing money claims under Article 291 of the Labor Code, applies
to claims for backwages and damages due to illegal dismissal.

This is a petition for review on certiorari of the Court of Appeals’ decision1 and resolution2 in CA-G.R. SP No. 91256, affirming
the decision of the National Labor Relations Commission. The Commission affirmed the Labor Arbiter’s findings that there
was no illegal dismissal in this case and that petitioner George A. Arriola abandoned his employment with respondent Pilipino
Star Ngayon, Inc.

In July 1986, Pilipino Star Ngayon, Inc. employed George A. Arriola as correspondent assigned in Olongapo City and
Zambales. Arriola had held various positions in Pilipino Star Ngayon, Inc. before becoming a section editor and writer of its
newspaper. He wrote “Tinig ng Pamilyang OFWs” until his column was removed from publication on November 15, 1999.
Since then, Arriola never returned for work.3 cralawre d

On November 15, 2002, Arriola filed a complaint4 for illegal dismissal, non-payment of salaries/wages, moral and exemplary
damages, actual damages, attorney's fees, and full backwages with the National Labor Relations Commission. In his position
paper,5 Arriola alleged that Pilipino Star Ngayon, Inc. “arbitrarily dismissed”6 him on November 15, 1999. Arguing that he
was a regular employee, Arriola contended that his rights to security of tenure and due process were violated when Pilipino
Star Ngayon, Inc. illegally dismissed him.7 cralawred

Pilipino Star Ngayon, Inc. and Miguel G. Belmonte denied Arriola’s allegations. In their position paper, 8they alleged that
around the third week of November 1999, Arriola suddenly absented himself from work and never returned despite
Belmonte’s phone calls and beeper messages. After a few months, they learned that Arriola transferred to a rival newspaper
publisher, Imbestigador, to write “Boses ng Pamilyang OFWs.” 9 cralawred

In his reply,10 Arriola denied that he abandoned his employment. He maintained that Pilipino Star Ngayon, Inc. ordered him
to stop reporting for work and to claim his separation pay. To prove his allegation, Arriola presented a statement of
account11 allegedly faxed to him by Pilipino Star Ngayon, Inc.’s accounting head. This statement of account showed a
computation of his separation pay as of November 30, 1999.

Labor Arbiter Fatima Jambaro-Franco decided the case. At the outset, she ruled that laches had set in, emphasizing that
Arriola took three years and one day to file his complaint. According to the Labor Arbiter, this was “contrary to the
immediate and natural reaction of an aggrieved person.” 12 If Arriola were indeed aggrieved, he would not have waited three
years and one day to sue Pilipino Star Ngayon, Inc.13 cralawre d

The Labor Arbiter found that Arriola abandoned his employment with Pilipino Star Ngayon, Inc. to write for a rival newspaper
publisher.14 She also noted Arriola’s admission that he did not contemplate the filing of an illegal dismissal complaint but
nevertheless filed one upon his lawyer’s advice.15 cralawred

On Arriola’s money claims, the Labor Arbiter ruled that they have already prescribed. 16 She cited Article 291 of the Labor
Code, which requires that all money claims arising from employer-employee relations be filed three years from the time the
cause of action accrued. Since Arriola filed his complaint on November 15, 2002, which was three years and one day from
his alleged illegal dismissal on November 15, 1999,17 the Labor Arbiter ruled that his money claims were already barred.

Thus, in the decision18 dated July 16, 2003, the Labor Arbiter dismissed Arriola's complaint for lack of merit.

On Arriola’s appeal, the National Labor Relations Commission sustained the Labor Arbiter’s findings and affirmed in toto the
decision dated July 16, 2003.19 The Commission likewise denied Arriola’s motion for reconsideration 20 for lack of merit.21 cralawred

Arriola filed a petition for certiorari with the Court of Appeals.22 cralawred

The Court of Appeals noted that the petition for certiorari questioned whether Arriola was illegally dismissed. According to
the appellate court, Arriola raised a factual issue “beyond the province of certiorari to resolve.”23 It added that the Labor
Arbiter’s factual findings, if affirmed by the National Labor Relations Commission, bound the appellate court. 24 cralawred

Nevertheless, the Court of Appeals resolved the factual issue “in the interest of substantial justice.” 25 cralawre d

The Court of Appeals ruled that Arriola was not illegally dismissed. Pilipino Star Ngayon, Inc. had the management
prerogative to determine which columns to maintain in its newspaper. Its removal of “Tinig ng Pamilyang OFWs” from
publication did not mean that it illegally dismissed Arriola. His employment, according to the appellate court, did not depend

36
on the existence of the column.26 cralawred

The appellate court enumerated the following factual findings belying Arriola’s claim of illegal dismissal: ChanRoblesVirtualawlibrary

a) In his complaint, Arriola alleged that he did not receive his salary for the period
covering November 1, 1999 to November 30, 1999. This implied that he had
worked for the whole month of November 1999. However, this was contrary to
his claim that Pilipino Star Ngayon, Inc. dismissed him on November 15, 1999.
b) Sometime in 1999, an Aurea Reyes charged Arriola with libel. Pilipino Star
Ngayon Inc.’s counsel represented Arriola in that case and filed a counter-
affidavit on November 24, 1999, nine days after Arriola’s alleged illegal
dismissal.
c) Pilipino Star Ngayon, Inc. never sent Arriola any notice of dismissal or
termination.27
Similar to the ruling of the Labor Arbiter and the National Labor Relations Commission, the Court of Appeals ruled that it was
Arriola who abandoned his employment.28 The Court of Appeals likewise ruled that his money claims have all prescribed
based on Article 291 of the Labor Code.29 cralawre d

Thus, in the decision30 dated August 9, 2006, the Court of Appeals found no grave abuse of discretion on the part of the
National Labor Relations Commission and dismissed Arriola's petition for certiorari .

Arriola moved for reconsideration,31 but the Court of Appeals denied the motion in its resolution 32 dated November 24, 2006.

In his petition for review on certiorari ,33 Arriola maintains that he did not abandon his employment. He insists that Pilipino
Star Ngayon, Inc. illegally dismissed him when it removed his column, “Tinig ng Pamilyang OFWs,” from publication. 34 cralawred

On the finding that he abandoned his work in Pilipino Star Ngayon, Inc. to write “Boses ng Pamilyang OFWs” in Imbestigador,
Arriola presents a certification35 from Imbestigador’s Managing Editor, Almar B. Danguilan, stating that Arriola started writing
for Imbestigador only on February 17, 2003. This was after he had filed his complaint for illegal dismissal on November 15,
2002.

As to the finding that his money claims have prescribed, Arriola argues that the three-year prescriptive period under Article
291 of the Labor Code should be counted from December 1, 1999, not November 15, 1999. According to Arriola, Pilipino
Star Ngayon, Inc. computed his separation pay up to November 30, 1999, as evidenced by the faxed statement of account.
Consequently, he was deprived of his salary as a regular employee beginning December 1, 1999. His cause of action for
payment of backwages and damages accrued only on December 1, 1999. 36 cralawre d

Arriola argues that assuming that his cause of action accrued on November 15, 1999, he pleads that his one-day-late filing of
the complaint be excused.

This court ordered Pilipino Star Ngayon, Inc. and Belmonte to comment on Arriola’s petition for review on certiorari .37 cralawred

In their comment,38 respondents argue that this court should not entertain Arriola’s petition for review on certiorari . Arriola
raised questions of fact not allowed in a Rule 45 petition. They highlight that the Labor Arbiter, the National Labor Relations
Commission, and the Court of Appeals all found that Arriola was not illegally dismissed and that he abandoned his
employment. These factual findings, respondents argue, bind this court. 39 cralawred

Respondents maintain that Arriola was not illegally dismissed. On the contrary, it was Arriola who abandoned his
employment in Pilipino Star Ngayon, Inc. According to respondents, they “must not be faulted if they presumed that
[Arriola] was no longer interested in [writing for Pilipino Star Ngayon, Inc.]” 40 considering that he did not report for work for
more than three years.

On Arriola’s money claims, respondents argue that these have all prescribed. According to respondents, Arriola’s one-day
late filing of the complaint cannot be excused because prescription is a matter of substantive law, not technicality. 41 cralawred

Arriola replied to respondents’ comment, reiterating his arguments in his petition for review on certiorari.42 cralawred

The issues for our resolution are the following: ChanRoblesVirtualawlibrary

I. Whether Arriola’s money claims have prescribed

II. Whether Pilipino Star Ngayon, Inc. illegally dismissed Arriola

The petition lacks merit.

Arriola’s claims for backwages and

damages have not yet prescribed when
he filed his complaint with the National
Labor Relations Commission

The Labor Arbiter, the National Labor Relations Commission, and the Court of Appeals all ruled that Arriola’s claims for

37
unpaid salaries, backwages, damages, and attorney’s fees have prescribed. They cited Article 291 of the Labor Code, which
requires that money claims arising from employer-employee relations be filed within three years from the time the cause of
action accrued: ChanRoblesVirtualawlibrary

Art. 291. MONEY CLAIMS. All money claims arising from employer-employee relations accruing during the effectivity of this
Code shall be filed within three (3) years from the time the cause of action accrued; otherwise they shall be forever barred.

Article 291 covers claims for overtime pay, 43 holiday pay,44 service incentive leave pay,45 bonuses,46salary differentials,47 and
illegal deductions by an employer.48 It also covers money claims arising from seafarer contracts.49 cralawred

The provision, however, does not cover “money claims” consequent to an illegal dismissal such as backwages. It also does
not cover claims for damages due to illegal dismissal. These claims are governed by Article 1146 of the Civil Code of the
Philippines, which provides: ChanRoblesVirtualawlibrary

Art. 1146. The following actions must be instituted within four years: ChanRoblesVirtualawlibrary

(1) Upon injury to the rights of the plaintiff[.]

In Callanta v. Carnation Philippines, Inc.,50 Virgilio Callanta worked as a salesperson for Carnation Philippines, Inc. beginning
in January 1974. On June 1, 1979, Carnation filed with the Regional Office No. X of the then Ministry of Labor and
Employment an application for issuance of clearance to terminate Callanta. The application was granted, and Callanta’s
employment was declared terminated effective June 1, 1979. 51 cralawred

On July 5, 1982, Callanta filed a complaint for illegal dismissal with claims for backwages and damages. In its defense,
Carnation argued that Callanta’s complaint was barred by prescription.52 cralawre d

Carnation stressed that Callanta filed his complaint three years, one month, and five days after his termination. Since illegal
dismissal is a violation of the Labor Code, Carnation argued that Callanta’s complaint was barred by Article 290 of the Labor
Code. 53 Under Article 290, offenses penalized under the Code shall prescribe in three years. 54 cralawre d

As to Callanta’s claims for backwages and damages, Carnation contended that these claims arose from employer-employee
relations. Since Callanta filed his complaint beyond the three-year period under Article 291 of the Labor Code, his claims for
backwages and damages were forever barred.55 cralawre d

This court ruled that Callanta’s complaint for illegal dismissal had not yet prescribed. Although illegal dismissal is a violation
of the Labor Code, it is not the “offense” contemplated in Article 290. 56 Article 290 refers to illegal acts penalized under the
Labor Code, including committing any of the prohibited activities during strikes or lockouts, unfair labor practices, and illegal
recruitment activities.57 The three-year prescriptive period under Article 290, therefore, does not apply to complaints for
illegal dismissal.

Instead, “by way of supplement,”58 Article 1146 of the Civil Code of the Philippines governs complaints for illegal dismissal.
Under Article 1146, an action based upon an injury to the rights of a plaintiff must be filed within four years. This court
explained: ChanRoblesVirtualawlibrary

. . . when one is arbitrarily and unjustly deprived of his job or means of livelihood, the action instituted to contest the
legality of one's dismissal from employment constitutes, in essence, an action predicated “upon an injury to the rights of the
plaintiff,” as contemplated under Art. 1146 of the New Civil Code, which must be brought within four 4years.59

This four-year prescriptive period applies to claims for backwages, not the three-year prescriptive period under Article 291 of
the Labor Code. A claim for backwages, according to this court, may be a money claim “by reason of its practical effect.” 60
Legally, however, an award of backwages “is merely one of the reliefs which an illegally dismissed employee prays the labor
arbiter and the NLRC to render in his favor as a consequence of the unlawful act committed by the employer.” 61 Though it
results “in the enrichment of the individual [illegally dismissed], the award of backwages is not in redress of a private right,
but, rather, is in the nature of a command upon the employer to make public reparation for his violation of the Labor
Code.”62cralawre d

Actions for damages due to illegal dismissal are likewise actions “upon an injury to the rights of the plaintiff.” Article 1146 of
the Civil Code of the Philippines, therefore, governs these actions. 63 cralawre d

Callanta filed his complaint for illegal dismissal with claims for backwages and damages three years, one month, and five
days from his termination. Thus, this court ruled that Callanta filed his claims for backwages and damages well within the
four-year prescriptive period.64 cralawred

This court applied the Callanta ruling in Texon Manufacturing v. Millena.65 In Texon, Marilyn and Grace Millena commenced
work for Texon Manufacturing in 1990 until Texon terminated their employment. Texon first dismissed Grace on May 31,
1994 then dismissed Marilyn on September 8, 1995.66 cralawre d

On August 21, 1995, Grace filed a complaint for money claims representing underpayment and non-payment of wages,
overtime pay, and holiday pay with the National Labor Relations Commission. Marilyn filed her own complaint for illegal
dismissal with prayer for payment of full backwages and benefits on September 11, 1995. 67 cralawre d

Texon filed a motion to dismiss both complaints on the ground of prescription. 68 It argued that Grace and Marilyn’s causes of
action accrued from the time they began working in Texon. Their complaints, therefore, were filed beyond the three-year
prescriptive period under Article 291 of the Labor Code.69 cralawred

This court ruled that both complaints had not yet prescribed. With respect to Grace’s complaint for overtime pay and holiday
pay, this court ruled that the three-year prescriptive period under Article 291 of the Labor Code applied. Since Grace filed
her claim one year, one month, and 21 days from her dismissal, her claims were filed within the three-year prescriptive
period.70 cralawred

38
With respect to Marilyn’s complaint for illegal dismissal with claims for backwages, this court while citing Callanta as legal
basis ruled that the four-year prescriptive period under Article 1146 of the Civil Code of the Philippines applied. Since
Marilyn filed her complaint three days from her dismissal, she filed her complaint well within the four-year prescriptive
period.71 cralawred

Applying these principles in this case, we agree that Arriola’s claims for unpaid salaries have prescribed. Arriola filed his
complaint three years and one day from the time he was allegedly dismissed and deprived of his salaries. Since a claim for
unpaid salaries arises from employer-employee relations, Article 291 of the Labor Code applies. 72 Arriola’s claim for unpaid
salaries was filed beyond the three-year prescriptive period.

However, we find that Arriola’s claims for backwages, damages, and attorney’s fees arising from his claim of illegal dismissal
have not yet prescribed when he filed his complaint with the Regional Arbitration Branch for the National Capital Region of
the National Labor Relations Commission. As discussed, the prescriptive period for filing an illegal dismissal complaint is four
years from the time the cause of action accrued. Since an award of backwages is merely consequent to a declaration of
illegal dismissal, a claim for backwages likewise prescribes in four years.

The four-year prescriptive period under Article 1146 also applies to actions for damages due to illegal dismissal since such
actions are based on an injury to the rights of the person dismissed.

In this case, Arriola filed his complaint three years and one day from his alleged illegal dismissal. He, therefore, filed his
claims for backwages, actual, moral and exemplary damages, and attorney’s fees well within the four-year prescriptive
period.

All told, the Court of Appeals erred in finding that Arriola’s claims for damages have already prescribed when he filed his
illegal dismissal complaint.

II

Arriola abandoned his employment

with Pilipino Star Ngayon, Inc.

In general, we do not entertain questions of fact in a petition for review on certiorari .73 We do not try facts.74 Rule 45,
Section 1 of the Rules of Court is clear that in a petition for review on certiorari with this court, only questions of law may be
raised:ChanRoblesVirtualawlibrary

Section 1. Filing of petition with Supreme Court.

A party desiring to appeal by certiorari from a judgment or final order or resolution of the Court of Appeals, the
Sandiganbayan, the Regional Trial Court or other courts whenever authorized by law, may file with the Supreme Court a
verified petition for review on certiorari . The petition shall raise only questions of law which must be distinctly set forth.
(Emphasis supplied)

A question of fact exists “when the doubt arises as to the truth or falsity of the alleged facts.” 75 On the other hand, there is a
question of law “when there is doubt as to what the law is on a certain state of facts.” 76 As this court explained in Century
Iron Works, Inc. v. Bañas:77 cralawred

. . . For a question to be one of law, the question must not involve an examination of the probative value of the evidence
presented by the litigants or any of them. The resolution of the issue must rest solely on what the law provides on the given
set of circumstances. Once it is clear that the issue invites a review of the evidence presented, the question posed is one of
fact.78

This court has made exceptions to this rule. We may review questions of fact in a petition for review on certiorari if: ChanRoblesVirtualawlibrary

(1) the findings are grounded entirely on speculations, surmises, or conjectures; (2) the inference made is manifestly
mistaken, absurd, or impossible; (3) there is a grave abuse of discretion; (4) the judgment is based on misappreciation of
facts; (5) the findings of fact are conflicting; (6) in making its findings, the same are contrary to the admissions of both
appellant and appellee; (7) the findings are contrary to those of the trial court; (8) the findings are conclusions without
citation of specific evidence on which they are based; (9) the facts set forth in the petition as well as in the petitioner’s main
and reply briefs are not disputed by the respondent; and (10) the findings of fact are premised on the supposed absence of
evidence and contradicted by the evidence on record. 79

In his petition for review on certiorari , Arriola raises questions of fact. He invites us to examine the probative value of a
faxed letter80 containing a computation of his separation pay, and a certification 81from Imbestigador’s Managing Editor,
stating that Arriola started writing for Imbestigador only on February 17, 2003. These pieces of documentary evidence
allegedly prove that Pilipino Star Ngayon, Inc. illegally dismissed Arriola and that he did not abandon his employment.

This court has ruled that the issues of illegal dismissal82 and abandonment of employment83 are factual issues which cannot
be raised in a petition for review on certiorari . Arriola also failed to persuade us why we should make an exception in this
case.

We agree that Pilipino Star Ngayon, Inc. did not illegally dismiss Arriola. As the Court of Appeals ruled, “the removal of
[Arriola’s] column from private respondent [Pilipino Star Ngayon, Inc.’s newspaper] is not tantamount to a termination of his
employment as his job is not dependent on the existence of the column ‘Tinig ng Pamilyang OFWs.’” 84 When Pilipino Star
Ngayon, Inc. removed “Tinig ng Pamilyang OFWs” from publication, Arriola remained as section editor.

Moreover, a newspaper publisher has the management prerogative to determine what columns to print in its newspaper. 85
As the Court of Appeals held: ChanRoblesVirtualawlibrary

39
. . . it is a management prerogative of private respondent [Pilipino Star Ngayon, Inc.] to decide on what sections should and
would appear in the newspaper publication taking into consideration the business viability and profitability of each section.
Respondent [Pilipino Star Ngayon, Inc.] decided to replace the “Pamilyang OFWs” section with another which it ought would
better sell to the reading public. Every business enterprise endeavors to increase its profits. In the process, it may adopt or
devise means designed towards that goal. Even as the law is solicitous of the welfare of the employees, it must also protect
the right of an employer to exercise what are clearly management prerogatives. . . . The free will of management to conduct
its own business affairs to achieve its purposes cannot be denied. 86cralawred

Arriola abandoned his employment with Pilipino Star Ngayon, Inc. Abandonment is the “clear, deliberate and unjustified
refusal of an employee to continue his employment, without any intention of returning.” 87 It has two elements: first, the
failure to report for work or absence without valid or justifiable reason and, second, a clear intention to sever employer-
employee relations exists.88 The second element is “the more determinative factor and is manifested by overt acts from
which it may be deduced that the employee has no more intention to work.” 89 cralawre d

Assuming that Arriola started writing for Imbestigador only on February 17, 2003, he nonetheless failed to report for work at
Pilipino Star Ngayon, Inc. after November 15, 1999 and only filed his illegal dismissal complaint on November 15, 2002. He
took three years and one day to remedy his dismissal. This shows his clear intention to sever his employment with Pilipino
Star Ngayon, Inc.

Contrary to Arriola’s claim, Villar v. NLRC,90 Globe Telecom, Inc. v. Florendo-Flores,91 and Anflo Management & Investment
Corp. v. Bolanio92 do not apply to this case. In these cases, the dismissed workers immediately took steps to remedy their
dismissal, unlike Arriola who “slept on his rights.” 93 In Villar, the workers filed their complaint within the month they were
dismissed.94 In Globe, the employee filed her complaint two months after she had been constructively dismissed. 95
In Anflo, the employee filed his complaint one day after he had been dismissed. 96 cralawred

With respect to the computation of Arriola’s separation pay allegedly faxed by Pilipino Star Ngayon, Inc.’s accounting head,
we agree with the Court of Appeals that this does not prove that Arriola was illegally dismissed: ChanRoblesVirtualawlibrary

[The faxed computation] does not conclusively show that the salaries were withheld from petitioner Arriola starting 01
December 1999. It could not likewise be given probative value as the said document does not bear the signature of an
unauthorized representative of private respondent PSN[.] [N]either does it bears (sic) the official seal of the company.
Besides, the abovementioned computation for separation pay is not a conclusive proof of the existence of dismissal or
termination from work. It is just a mere computations (sic) which the authenticity thereof is being assailed. 97 (Citations
omitted)

Considering the foregoing, we will not disturb the Labor Arbiter’s findings that Arriola was not illegally dismissed and that he
abandoned his employment. This is true especially since the National Labor Relations Commission and the Court of Appeals
affirmed these factual findings.98 cralawre d

WHEREFORE, the petition is DENIED. The Court of Appeals’ decision dated August 9, 2006 and resolution dated November
24, 2006 in CA-G.R. SP No. 91256 are AFFIRMED.

SO ORDERED. cralawlaw library

Velasco, Jr., (Chairperson), Peralta, Villarama, Jr.,* and Mendoza, JJ., concur.

Endnotes:

*
Villarama, Jr., J., designated as Acting Member per Special Order No. 1691 dated May 22, 2014 in view of the vacancy in
the Third Division.

1
Rollo, pp. 50–57. This decision is dated August 9, 2006. Associate Justice Bienvenido L. Reyes (now a Justice of this court)
penned the decision, with Associate Justices Jose C. Reyes, Jr. and Enrico A. Lanzanas concurring.

2
Id. at 58–59.

3
Id. at 7–8.

4
Id. at 60–61.

5
Id. at 62–72.

6
Id. at 64.

7
Id. at 65–67.

8
Id. at 85–91.

9
Id. at 87 and 63.

10
Id. at 141–155.

11
Id. at 136.

12
Id. at 97.

13
Id.

40
14
Id. at 98.

15
Id.

16
Id. at 98–99.

17
The year 2000 was a leap year.

18
Rollo, pp. 95–99.

19
Id. at 100–104.

20
Id. at 105–118.

21
Id. at 119–120.

22
Id. at 50.

23
Id. at 53.

24
Id.

25
Id.

26
Id. at 54.

27
Id. at 54–55.

28
Id. at 55.

29
Id. at 55–56.

30
Id. at 50–57.

31
Id. at 58.

32
Id. at 58–59.

33
Id. at 3–49.

34
Id. at 15–22.

35
Id. at 140.

36
Id. at 25–29.

37
Id. at 58, resolution dated January 29, 2007.

38
Id. at 59–70.

39
Id. at 59–60.

40
Id. at 63.

41
Id. at 64–66.

42
Id. at 75–105.

43
Texon Manufacturing v. Millena, 471 Phil. 318 (2004) [Per J. Sandoval-Gutierrez, Third Division].

44
Id.

45
Auto Bus Transport Systems, Inc. v. Bautista, 497 Phil. 863 (2005) [Per J. Chico-Nazario, Second Division].

46
Republic Planters Bank v. NLRC, 334 Phil. 124 (1997) [Per J. Bellosillo, First Division].

47
University of Pangasinan v. Hon. Confesor, 344 Phil. 134 (1997) [Per J. Romero, Second Division].

48
Anabe v. Asian Construction (Asiakonstrukt), G.R. No. 183233, December 23, 2009, 609 SCRA 213 [Per J. Carpio Morales,
First Division].

49
Southeastern Shipping v. Navarra, Jr., G.R. No. 167678, June 22, 2010, 621 SCRA 361 [Per J. Del Castillo, First Division].

50
Callanta v. Carnation Philippines, Inc., 229 Phil. 279 (1986) [Per J. Fernan, Second Division].

51
Id. at 283.

52
Id.

41
53
Id. at 283 and 285.

54
LABOR CODE, art. 290 provides: ChanRoblesVirtualawlibrary

Art. 290. OFFENSES. Offenses penalized under this Code and the rules and regulations issued pursuant thereto shall
prescribe in three (3) years.

55
Rollo, p. 285.

56
Id.

57
Id. at 286.

58
Id. at 288.

59
Id. at 289.

60
Id. at 287.

61
Id.

62
Id.

63
Id. at 287–288.

64
Id. at 289.

65
471 Phil. 318 (2004) [Per J. Sandoval-Gutierrez, Third Division].

66
Id. at 321.

67
Id.

68
Id. at 322.

69
Id. at 323.

70
Id. at 324.

71
Id. at 325.

University of Pangasinan v. Hon. Confesor, 344 Phil. 134 (1997) [Per J. Romero, Second Division]; Chavez v. Hon. Bonto-
72

Perez, 312 Phil. 88 (1995) [Per J. Puno, Second Division].

73
RULES OF COURT, Rule 45, sec. 1.

74
New City Builders, Inc. v. NLRC, 499 Phil. 207, 212 (2005) [Per J. Garcia, Third Division].

75
Century Iron Works, Inc. v. Bañas, G.R. No. 184116, June 19, 2013, 699 SCRA 157, 166 [Per J. Brion, Second Division].

76
Id.

77
G.R. No. 184116, June 19, 2013, 699 SCRA 157 [Per J. Brion, Second Division].

78
Id. at 166–167.

79
Macasero v. Southern Industrial Gases Philippines, 597 Phil. 494, 498 (2009) [Per J. Carpio Morales, Second Division],
citing Uy v. Villanueva, 553 Phil. 69, 79 (2009) [Per J. Nachura, Third Division].

80
Rollo, p. 136.

81
Id. at 140.

Cañedo v. Kampilan Security and Detective Agency, Inc., G.R. No. 179326, July 31, 2013, 702 SCRA 647, 658 [Per J. Del
82

Castillo, Second Division].

83
Pure Blue Industries, Inc. v. NLRC, 337 Phil. 710, 716 (1997) [Per J. Kapunan, First Division].

84
Rollo, p. 54.

85
See Orozco v. The Fifth Division of the Honorable Court of Appeals, 584 Phil. 35 (2008) [Per J. Nachura, Third Division].

86
Rollo, p. 54.

87
Camua, Jr. v. NLRC, 541 Phil. 650, 657 (2007) [Per J. Quisumbing, Second Division], citing Cruz v. NLRC, 381 Phil. 775,
784 (2000) [Per J. Purisima, Third Division].

88
Id. at 657.

89
Id.

42
90
387 Phil. 706 (2000) [Per J. Bellosillo, Second Division].

91
438 Phil. 756 (2002) [Per J. Bellosillo, Second Division].

92
439 Phil. 309 (2002) [Per J. Corona, Third Division].

93
Rollo, p. 97.

94
387 Phil. 706, 709–710 (2000) [Per J. Bellosillo, Second Division].

95
438 Phil. 756, 760–761 (2002) [Per J. Bellosillo, Second Division].

96
439 Phil. 309, 313 (2002) [Per J. Corona, Third Division].

97
Rollo, p. 56.

98
Urbanes, Jr. v. Court of Appeals, 486 Phil. 276, 283–284 (2004) [Per J. Austria-Martinez, Second Division].

43
 THIRD DIVISION

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

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

DECISION

REYES, J.:

This appeal by petition for review1 seeks to annul and set aside the Decision2 dated August 28, 2009 and Resolution3 dated
December 11, 2009 of the Court of Appeals (CA) in CA-G.R. SP No. 106260, which affirmed the Decision 4dated March 31,
2008 of the National Labor Relations Commission (NLRC) in NLRC CA No. 046325-05 (08), and its Resolution 5 dated
September 5, 2008, denying the petitioner’s Motion for Reconsideration. The NLRC decision vacated and set aside the
Decision6 dated June 29, 2005 of the Labor Arbiter (LA) on the ground that the consolidated complaints for illegal dismissal,
unfair labor practice and money claims have already prescribed.

The Facts

Respondent Times Transportation Co., Inc., (TTCI) is a company engaged in the business of land transportation for
passengers and goods serving the Ilocos Region to Metro Manila route. TTCI employed the herein 21 petitioners as bus
drivers, conductors, mechanics, welders, security guards and utility personnel, namely: Onofre V. Montero (Montero),
Edgardo N. Estrañero (Estrañero), Rening P. Padre (Padre), Gabriel A. Madera (Madera), Herminio T. Tacla, Nelson C. Viloria,
Demetrio Q. Pajarillo (Pajarillo), Alfredo R. Aganon (Aganon), Reynaldo Avila (Avila), Albert T. Ruiz, Nestor Y. Yago (Yago),
Harty M. Tupasi (Tupasi), Agustin R. Avila, Jr. (Avila, Jr.), Bonifacio B. Gaano (Gaano), Joselito D. Cuenta (Cuenta), Jonas P.
Estilong (Estilong), Dominador C. Canaria (Canaria), Genaro C. Rondaris (Genaro), Herardo M. Dulay (Dulay), Franklin A.
Ravina, Jr. (Ravina), and Ruben C. Cabello (Cabello) (petitioners). 7 chanroblesvirtuallawlibrary

Sometime in 1995, the rank-and-file employees of TTCI formed a union named as Times Employees Union (TEU) which was
later certified as the sole and exclusive bargaining unit within TTCI. 8 chanroblesvirtuallawlibrary

In March 1997, members of TEU went on strike; but when former Labor Secretary Leonardo A. Quisimbing assumed
jurisdiction over the labor dispute and certified the same for compulsory arbitration, a return-to-work Order dated March 10,
1997 was issued which ended the strike and enjoined the parties from committing any other act that may intensify the
situation.9
chanroblesvirtuallawlibrary

On August 23, 1997, TTCI Board of Directors approved a resolution confirming the authority given to respondent Santiago
Rondaris (Santiago), TTCI President and Chairman of the Board of Directors, to gradually dispose the assets of the TTCI as a
result of its unabated increase of the cost of operations and losses for the last two years. TTCI also adopted a company-wide
retrenchment program, which will take effect on October 1, 1997, where Santiago was given the authority to determine the
number of excess employees who would be the subject of retrenchment. 10 chanroblesvirtuallawlibrary

The sale of 25 buses of TTCI, as well as the Certificates of Public Convenience for the operation of the buses, were likewise
approved and subsequently transferred to respondent Mencorp Transport Systems, Inc., (MENCORP) by virtue of a Deed of
Sale dated December 12, 1997. Thereafter, several union members received notices that they were being retrenched
effective 30 days from September 16, 1997.11 chanroblesvirtuallawlibrary

For a second time, on October 17, 1997, TEU declared a strike against TTCI, but the latter merely reiterated the earlier
return-to-work order of the Labor Secretary. For disregarding the said return-to-work order, Santiago issued two notices of
termination dated October 26, 199712 terminating some 106 workers and a revised list dated November 24, 1997 13 increasing
the number of dismissed employees to 119, for participating in the illegal strike. 14 chanroblesvirtuallawlibrary

On December 4, 1997, Santiago served to the Department of Labor and Employment Regional Office I a notice that TTCI
would be closing its operations due to heavy business losses.15 chanroblesvirtuallawlibrary

On May 14, 1998, petitioners Estrañero, Pajarillo, Padre, Avila, Avila, Jr., Tupasi, Cuenta, Dulay, Yago, and Aganon filed
several complaints against TTCI and MENCORP before the NLRC. The complaints were thereafter consolidated under the case
entitled “Malana v. TTCI” docketed as NLRC RAB-I-01-1007.16However, this case was withdrawn on March 4, 1999 upon
motion by the TEU’s counsel which was given due course on March 22, 1999. 17 chanroblesvirtuallawlibrary

Four years later, several complaints for unfair labor practice, illegal dismissal with money claims, damages and attorney’s
fees were filed against TTCI, Santiago, MENCORP and its General Manager Virginia Mendoza, including the latter’s husband
Reynaldo Mendoza (collectively called the respondents), before the LA from June to July 2002. 18 Accordingly, these
complaints were consolidated.
44
In response, TTCI asserted that the petitioners’ cause of action had already been barred by prescription because the
complaints were filed only in June 2002 or after almost five years from the date of their dismissal. MENCORP, on the other
hand, raised the defense of lack of employer-employee relationship since it never engaged the services of the petitioners
when TTCI sold to them its buses and the Certificates of Public Convenience. 19 chanroblesvirtuallawlibrary

On June 9, 2005, the LA rendered a Decision dismissing the petitioners’ claim for unfair labor practice and money claims on
the ground of prescription. However, with regard to the issue of illegal dismissal, only the complaints of Montero, Ravina,
Cabello, Genaro, Madera, Gaano, Arsenio Donato and Estilong were dismissed for having been barred by prescription. 20 chanroblesvirtuallawlibrary

The LA found that petitioners Estrañero, Pajarillo, Aganon, Padre, Dulay, Cuenta, Canaria, Yago, Avila and Avila, Jr. were
illegally dismissed and were awarded their separation pay and backwages. According to the LA, the complaints of these 10
petitioners were timely filed in June 2002 because the eight-month period during which their cases were pending should be
excluded from the four-year prescriptive period.21 chanroblesvirtuallawlibrary

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

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

SO ORDERED.23
The NLRC observed that the LA had ignored the rule on prescription, and chose to be selective in awarding relief to the 10
complainants by stating in his decision that the period during which the labor cases were pending should be deducted from
the period of prescription. According to the NLRC: chanRoblesvirtualLawlibrary

We have thoroughly examined the records and find no justification for the [LA] to rule that the pendency of the cases has
worked in favor of the complainants to whom he awarded separation pay and backwages. The [LA] has not at all indicated in
his decision when the eight (8)[-]month period of pendency he alluded to commenced and when it ended. As a matter of
fact, these cases took almost three (3) years from filing of the complaints to the rendition of the appealed decision. 24
The NLRC added that the application of the principle of prescription should not be done on a selective basis, especially when
the dates of accrual of the causes of action and the filing of the complaints readily show that prescription has set in. 25 chanroblesvirtuallawlibrary

The petitioners filed a motion for reconsideration26 dated May 16, 2008, but it was denied.27 Hence, they filed a petition for
certiorari28 before the CA.

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

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

Moreover, there is likewise no merit in petitioners’ contention that the period when they filed a complaint on May 14, 1998
but withdrawn on March 30, 1998 should be excluded from the computation of the four-year prescriptive [period] for illegal
dismissal cases. The prescriptive period continues even after the withdrawal of the case as though no action has been filed at
all. This was clarified in the case of Intercontinental Broadcasting Corporation vs. Panganiban, where the Supreme
Court held that although the commencement of an action stops the running of the statute of prescription or limitations, its
dismissal or voluntary abandonment by plaintiff leaves the parties in exactly the same position as though no action had been
commenced at all. x x x.30
Aggrieved by the foregoing disquisition, the petitioners moved for reconsideration 31 but it was denied by the CA.32 Hence, the
present petition for review on certiorari.33 chanroblesvirtuallawlibrary

The Issue

The main issue in this case is whether or not the petitioners’ complaints for illegal dismissal have already prescribed.

Ruling of the Court

The petition is bereft of merit.

“It should be emphasized at the outset that as a rule, this Court is not a trier of facts and this applies with greater force in
labor cases. Hence, factual findings of quasi-judicial bodies like the NLRC, particularly when they coincide with those of the
[LA] and if supported by substantial evidence, are accorded respect and even finality by this Court. But where the findings of
the NLRC and the [LA] are contradictory, as in the present case, this Court may delve into the records and examine for itself
the questioned findings.”34 chanroblesvirtuallawlibrary

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

In the case at bar, October 26, 1997 and November 24, 1997 appear on record to be the dates when the petitioners’
employment were terminated by TTCI. The antecedent facts that gave rise to the petitioners’ dismissal from employment are
not disputed in this case. There is no question about the fact that the petitioners’ complaints for unfair labor practice and
money claims have already prescribed. The petitioners however argue that their complaints for illegal dismissal were duly
filed within the four-year prescriptive period since the period during which their cases were pending should be deducted from
the period of prescription. On the other hand, the respondents insist that said complaints have already prescribed. Hence,
the pivotal question in resolving the issues hinges on the resolution of whether the period during which the petitioners’ cases
45
were pending should be excluded from the period of prescription.

Settled is the rule that when one is arbitrarily and unjustly deprived of his job or means of livelihood, the action instituted to
contest the legality of one’s dismissal from employment constitutes, in essence, an action predicated upon an injury to the
rights of the plaintiff, as contemplated under Article 114635 of the New Civil Code, which must be brought within four
years.36 chanroblesvirtuallawlibrary

The petitioners contend that the period when they filed a labor case on May 14, 1998 but withdrawn on March 22, 1999
should be excluded from the computation of the four-year prescriptive period for illegal dismissal cases. However, the Court
had already ruled that the prescriptive period continues even after the withdrawal of the case as though no action has been
filed at all. The applicability of Article 115537of the Civil Code in labor cases was upheld in the case of Intercontinental
Broadcasting Corporation v. Panganiban38 where the Court held that “although the commencement of a civil action stops the
running of the statute of prescription or limitations, its dismissal or voluntary abandonment by plaintiff leaves the parties in
exactly the same position as though no action had been commenced at all.” 39 chanroblesvirtuallawlibrary

In like manner, while the filing of the complaint for illegal dismissal before the LA interrupted the running of the prescriptive
period, its voluntary withdrawal left the petitioners in exactly the same position as though no complaint had been filed at all.
The withdrawal of their complaint effectively erased the tolling of the reglementary period.

A prudent review of the antecedents of the claim reveals that it has in fact prescribed due to the petitioners’ withdrawal of
their labor case docketed as NLRC RAB-I-01-1007.40 Hence, while the filing of the said case could have interrupted the
running of the four-year prescriptive period, the voluntary withdrawal of the petitioners effectively cancelled the tolling of the
prescriptive period within which to file their illegal dismissal case, leaving them in exactly the same position as though no
labor case had been filed at all. The running of the four-year prescriptive period not having been interrupted by the filing of
NLRC RAB-I-01-1007, the petitioners’ cause of action had already prescribed in four years after their cessation of
employment on October 26, 1997 and November 24, 1997. Consequently, when the petitioners filed their complaint for
illegal dismissal, separation pay, retirement benefits, and damages in 2002, their claim, clearly, had already been barred by
prescription.41 chanroblesvirtuallawlibrary

Sadly, the petitioners have no one but themselves to blame for their own predicament. By their own allegations in their
respective complaints, they have barred their remedy and extinguished their right of action. Although the Constitution is
committed to the policy of social justice and the protection of the working class, it does not necessary follow that every labor
dispute will be automatically decided in favor of labor. The management also has its own rights. Out of concern for the less
privileged in life, this Court, has more often than not inclined, to uphold the cause of the worker in his conflict with the
employer. Such leaning, however, does not blind the Court to the rule that justice is in every case for the deserving, to be
dispensed in the light of the established facts and applicable law and doctrine. 42 chanroblesvirtuallawlibrary

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

SO ORDERED.

Velasco, Jr., (Chairperson), Del Castillo,* Villarama, Jr., and Jardeleza, JJ., concur. cralawlawlibrary

Endnotes:

*
Additional Member per Raffle dated January 12, 2015 vice Associate Justice Diosdado M. Peralta.

Rollo, pp. 9-27.

1

2
Penned by Associate Justice Ramon R. Garcia, with Associate Justices Portia Aliño-Hormachuelos and Fernanda Lampas
Peralta concurring; id. at 31-44.

3
Id. at 45-46.

4
Penned by Commissioner Gregorio O. Bilog III, with Presiding Commissioner Lourdes C. Javier and Commissioner Tito F.
Genilo concurring; id. at 197-208.

5
Id. at 215-217.

6
Issued by Labor Arbiter Irenarco R. Rimando; id. at 121-142.

7
Id. at 32.

8
Id.

9
Id. at 32-33.

10
Id. at 51.

11
Id. at 33.

12
Id. at 285-287.

13
Id. at 288-290.

14
Id. at 33-34.

46
15
Id. at 34.

16
Id.

17
Id. at 130.

18
Id. at 202.

a. June 13, 2002 by Montero, Estrañero, Padre, Madera, Herminio Tacla, Nelson C. Viloria, Pajarillo, Aganon, Avila, Albert T.
Ruiz, Yago, Tupasi, Avila, Jr., and Gaano

b. June 14, 2002 by Cuenta

c. June 18, 2002 by Danilo T. Donato and Estilong

d. June 24, 2002 by Canaria and Genaro

e. June 26, 2002 by Dulay

f. July 10, 2002 by Ravina

g. July 24, 2002 by Cabello

19
Id. at 35-36.

20
Id. at 36.

21
Id. at 36-37.

22
Id. at 197-208.

23
Id. at 207.

24
Id. at 206.

25
Id. at 207.

26
Id. at 209-214.

27
Id. at 215-217.

28
Id. at 218-232.

29
Id. at 31-44.

30
Id. at 42-43.

31
Id. at 47-50.

32
Id. at 45-46.

33
Id. at 9-27.

34
Victory Liner, Inc. v. Race, 548 Phil. 282, 293 (2007).

35
Art. 1146. The following actions must be instituted within four years: chanRoblesvirt ualLawlibrary

(1) Upon an injury to the rights of the plaintiff.

xxxx

36
Callanta v. Carnation Philippines, Inc., 229 Phil. 279, 289 (1986).

Art. 1155. The prescription of actions is interrupted when they are filed before the court, when there is a written
37

extrajudicial demand by the creditors, and when there is any written acknowledgment of the debt by the debtor.

38
543 Phil. 371 (2007).

39
Id. at 378.

40
Rollo, p. 130.

41
Supra note 38, at 379.

Philippine Long Distance Telephone Company (PLDT) v. Pingol, G.R. No. 182622, September 8, 2010, 630 SCRA 413, 423-
42

424. cralawre d

47
PETITIONERS Onofre V. Montero and 20 others were dismissed from service on Oct. 26, 1997 and
Nov. 24, 1997 by respondent Times Transportation Co., Inc. (TTCI). On May 14, 1998, some of the
petitioners, namely: Edgardo Estrañero, Demetrio Pajarillo, Rening Padre, Marcos Avila, Agustin
Avila, Jr., Harty Tupasi, Joselito Cuenta, Herardo Dulay, Nestor Yago, and Alfredo Aganon, filed
several complaints against TTCI and the other petitioner Mencorp Transport Systems, Inc.
(MENCORP), before the National Labor Relations Commission (NLRC). The case was withdrawn on
March 4, 1999, upon motion by Times Employees Union (TEU), petitioners’ union.

Four years later, several complaints for unfair labor practice, illegal dismissal with money claims,
damages and attorney’s fees were filed against TTCI, Santiago Rondaris, MENCORP and its
general manager Virginia Mendoza, including the latter’s husband Reynaldo Mendoza before the
Labor Arbiter from June to July 2002.

In defense, TTCI asserted that the petitioners’ cause of action had already been barred by
prescription because the complaints were filed only on June 2002 or after almost five years from
the date of their dismissal. Does this defense find merit?

Ruling: Yes.

The petitioners contend that the period when they filed a labor case on May 14, 1998 but
withdrawn on March 22, 1999 should be excluded from the computation of the four-year
prescriptive period for illegal dismissal cases. However, the Court had already ruled that the
prescriptive period continues even after the withdrawal of the case as though no action has been
filed at all. The applicability of Article 1155 of the Civil Code in labor cases was upheld in the
case of Intercontinental Broadcasting Corporation v. Panganiban, 543 Phil. 371 (2007) where the
Court held that “although the commencement of a civil action stops the running of the statute of
prescription or limitations, its dismissal or voluntary abandonment by plaintiff leaves the parties
in exactly the same position as though no action had been commenced at all.”

In like manner, while the filing of the complaint for illegal dismissal before the LA interrupted the
running of the prescriptive period, its voluntary withdrawal left the petitioners in exactly the
same position as though no complaint had been filed at all. The withdrawal of their complaint
effectively erased the tolling of the reglementary period.

A prudent review of the antecedents of the claim reveals that it has in fact prescribed due to the
petitioners’ withdrawal of their labor case docketed as NLRC RAB-I-01-1007. Hence, while the
filing of the said case could have interrupted the running of the four-year prescriptive period, the
voluntary withdrawal of the petitioners effectively cancelled the tolling of the prescriptive period
within which to file their illegal dismissal case, leaving them in exactly the same position as
though no labor case had been filed at all. The running of the four-year prescriptive period not
having been interrupted by the filing of NLRC RAB-I-01-1007, the petitioners’ cause of action had
already prescribed in four years after their cessation of employment on Oct. 26, 1997 and Nov.
24, 1997. Consequently, when the petitioners filed their complaint for illegal dismissal,
separation pay, retirement benefits, and damages in 2002, their claim, clearly, had already been
barred by prescription (Reyes, J., SC Third Division; Onofre V. Montero, et. al. vs. Times
Transportation Co., Inc., et. al., G.R. No. 190828, March 16, 2015).

48
 THIRD DIVISION

G.R. No. 191475, December 11, 2013

PHILIPPINE CARPET MANUFACTURING CORPORATION, PACIFIC CARPET MANUFACTURING CORPORATION, MR.

PATRICIO LIM AND MR. DAVID LIM, Petitioners, v. IGNACIO B. TAGYAMON, PABLITO L. LUNA, FE B. BADAYOS,
GRACE B. MARCOS, ROGELIO C. NEMIS, ROBERTO B. ILAO, ANICIA D. DELA CRUZ AND CYNTHIA L.
COMANDAO, Respondents.

DECISION

PERALTA, J.:

The Case

This is a petition for review on certiorari under Rule 45 of the Rules of Court assailing the Court of Appeals (CA)
Decision1 dated July 7, 2009 and Resolution2 dated February 26, 2010 in CA-G.R. SP No. 105236. The assailed decision
granted the petition for certiorari filed by respondents Ignacio B. Tagyamon (Tagyamon), Pablito I. Luna (Luna), Fe B.
Badayos (Badayos), Grace B. Marcos (Marcos), Rogelio C. Nemis (Nemis), Roberto B. Ilao (Ilao), Anicia D. Dela Cruz (Dela
Cruz), and Cynthia L. Comandao (Comandao), the dispositive portion of which reads:
WHEREFORE, the petition is GRANTED. The private respondent is hereby ordered to reinstate the petitioners with full
backwages less the amounts they received as separation pays. In case reinstatement would no longer be feasible because
the positions previously held no longer exist, the private respondent shall pay them backwages plus, in lieu of reinstatement,
separation pays equal to one (1) month pay, or one-half (1/2) month pay for every year of service, whichever is higher. In
addition, the private respondent is hereby ordered to pay the petitioners moral damages in the amount of P20,000.00 each.

SO ORDERED.3
The Facts

Petitioner Philippine Carpet Manufacturing Corporation (PCMC) is a corporation registered in the Philippines engaged in the
business of manufacturing wool and yarn carpets and rugs. 4 Respondents were its regular and permanent employees, but
were affected by petitioner’s retrenchment and voluntary retirement programs.

On March 15, 2004, Tagyamon,5 Luna,6 Badayos,7 Dela Cruz,8 and Comandao9 received a uniformly worded Memorandum of
dismissal, to wit:
This is to inform you that in view of a slump in the market demand for our products due to the un-competitiveness of our
price, the company is constrained to reduce the number of its workforce. The long-term effects of September 11 and the war
in the Middle East have greatly affected the viability of our business and we are left with no recourse but to reorganize and
downsize our organizational structure.

We wish to inform you that we are implementing a retrenchment program in accordance with Article 283 of the Labor Code
of the Philippines, as amended, and its implementing rules and regulations.

In this connection, we regret to advise you that you are one of those affected by the said exercise, and your employment
shall be terminated effective at the close of working hours on April 15, 2004.

Accordingly, you shall be paid your separation pay as mandated by law. You will no longer be required to report for work
during the 30-day notice period in order to give you more time to look for alternative employment. However, you will be paid
the salary corresponding to the said period. We shall process your clearance and other documents and you may claim the
payables due you on March 31, 2004.

Thank you for your services and good luck to your future endeavors. 10
As to Marcos, Ilao, and Nemis, they claimed that they were dismissed effective March 31, 2004, together with fifteen (15)
other employees on the ground of lack of market/slump in demand. 11 PCMC, however, claimed that they availed of the
company’s voluntary retirement program and, in fact, voluntarily executed their respective Deeds of Release, Waiver, and
Quitclaim.12

Claiming that they were aggrieved by PCMC’s decision to terminate their employment, respondents filed separate complaints
for illegal dismissal against PCMC, Pacific Carpet Manufacturing Corporation, Mr. Patricio Lim and Mr. David Lim. These cases
were later consolidated. Respondents primarily relied on the Supreme Court’s decision in Philippine Carpet Employees
Association (PHILCEA) v. Hon. Sto. Tomas (Philcea case),13 as to the validity of the company’s retrenchment program. They
further explained that PCMC did not, in fact, suffer losses shown by its acts prior to and subsequent to their
termination.14 They also insisted that their acceptance of separation pay and signing of quitclaim is not a bar to the pursuit of
illegal dismissal case.15

PCMC, for its part, defended its decision to terminate the services of respondents being a necessary management
prerogative. It pointed out that as an employer, it had no obligation to keep in its employ more workers than are necessary
for the operation of his business. Thus, there was an authorized cause for dismissal. Petitioners also stressed that
respondents belatedly filed their complaint as they allowed almost three years to pass making the principle of laches

49
applicable. Considering that respondents accepted their separation pay and voluntarily executed deeds of release, waiver and
quitclaim, PCMC invoked the principle of estoppel on the part of respondents to question their separation from the service.
Finally, as to Marcos, Ilao and Nemis, PCMC emphasized that they were not dismissed from employment, but in fact they
voluntarily retired from employment to take advantage of the company’s program. 16

On August 23, 2007, Labor Arbiter (LA) Donato G. Quinto, Jr. rendered a Decision dismissing the complaint for lack of
merit.17 The LA found no flaw in respondents’ termination as they voluntarily opted to retire and were subsequently re-
employed on a contractual basis then regularized, terminated from employment and were paid separation benefits. 18 In view
of respondents’ belated filing of the complaint, the LA concluded that such action is a mere afterthought designed primarily
for respondents to collect more money, taking advantage of the 2006 Supreme Court decision. 19

On appeal, the National Labor Relations Commission (NLRC) sustained the LA decision.20 In addition to the LA ratiocination,
the NLRC emphasized the application of the principle of laches for respondents’ inaction for an unreasonable period.

Still undaunted, respondents elevated the matter to the CA in a petition for certiorari. In reversing the earlier decisions of the
LA and the NLRC, the CA refused to apply the principle of laches, because the case was instituted prior to the expiration of
the prescriptive period set by law which is four years. It stressed that said principle cannot be invoked earlier than the
expiration of the prescriptive period.21Citing the Court’s decision in the Philcea case, the CA applied the doctrine of stare
decisis, in view of the similar factual circumstances of the cases. As to Ilao, Nemis and Marcos, while acknowledging their
voluntary resignation, the CA found the same not a bar to the illegal dismissal case because they did so on the mistaken
belief that PCMC was losing money.22 With the foregoing findings, the CA ordered that respondents be reinstated with full
backwages less the amounts they received as separation pay. In case of impossibility of reinstatement, the CA ordered PCMC
to pay respondents backwages and in lieu of reinstatement, separation pay equal to one month pay or ½ month pay for
every year of service whichever is higher, plus moral damages. 23

The Issues

Aggrieved, petitioners come before the Court in this petition for review on certiorari based on this ground, to wit:
IN RENDERING ITS DISPUTED DECISION AND RESOLUTION, THE COURT A QUO HAS DECIDED A QUESTION OF SUBSTANCE
NOT IN ACCORD WITH LAW AND/OR ESTABLISHED JURISPRUDENCE.

a) Res Judicata should not be followed if to follow it is to perpetuate error (Philippine

Trust Co., and Smith Bell & Co. vs. Mitchell, 59 Phil. 30, 36 (1933). The (Supreme)
Court is not precluded from rectifying errors of judgment if blind and stubborn
adherence to the doctrine of immutability of final judgments would involve the
sacrifice of justice for technicality (Heirs of Maura So vs. Obliosca, G.R. No. 147082,
January 28, 2008, 542 SCRA 406)
b) Not all waivers and quitclaims are invalid as against public policy. Waivers that
represent a voluntary and reasonable settlement of the laborer’s claims are
legitimate and should be respected by the Court as the law between the parties
(Gamo-gamo vs. PNOC Shipping and Transport Corp., G.R. No. 141707, May 2,
2002; Alcasero vs. NLRC, 288 SCRA 129) Where the persons making the waiver has
done so voluntarily, with a full understanding thereof, and the consideration for the
quitclaim is credible and reasonable, the transaction must be recognized as valid
and binding undertaking (Periquet vs. NLRC, 186 SCRA 724 [1990]; Magsalin vs.
Coca Cola Bottlers Phils., Inc. vs. National Organization of Working Men (N.O.W.M.],
G.R. No. 148492, May 2, 2003).24
Petitioners contend that the Philcea case decided by this Court and relied upon by the CA in the assailed decision was based
on erroneous factual findings, inapplicable financial statement, as well as erroneous analysis of such financial
statements.25 They, thus, implore the Court to revisit the cited case in order to dispense with substantial justice. 26 They
explain that the Court made conclusions based on erroneous information. Petitioners also insist that the doctrines of res
judicata and law of the case are not applicable, considering that this case does not involve the same parties as the Philcea
case.27 They likewise point out that not all respondents were involuntarily separated on the ground of redundancy as some of
them voluntarily availed of the company’s Voluntary Separation Program. 28 They further contend that respondents are guilty
not only of laches but also of estoppel in view of their inaction for an unreasonable length of time to assail the alleged illegal
dismissal and in voluntarily executing a release, quitclaim and waiver. 29

The Court’s Ruling

Laches

Laches has been defined as the failure or neglect for an unreasonable and unexplained length of time to do that which by
exercising due diligence, could or should have been done earlier, thus, giving rise to a presumption that the party entitled to
assert it either has abandoned or declined to assert it.30 It has been repeatedly31 held by the Court that:
x x x Laches is a doctrine in equity while prescription is based on law. Our courts are basically courts of law not courts of
equity. Thus, laches cannot be invoked to resist the enforcement of an existing legal right. x x x Courts exercising equity
jurisdiction are bound by rules of law and have no arbitrary discretion to disregard them. In Zabat Jr. v. Court of Appeals x x
x, this Court was more emphatic in upholding the rules of procedure. We said therein:
As for equity which has been aptly described as a “justice outside legality,” this is applied only in the absence of, and never
against, statutory law or, as in this case, judicial rules of procedure. Aequetas nunguam contravenit legis. The pertinent
positive rules being present here, they should preempt and prevail over all abstract arguments based only on equity.

50
Thus, where the claim was filed within the [four-year] statutory period, recovery therefore cannot be barred by laches.
Courts should never apply the doctrine of laches earlier than the expiration of time limited for the commencement of actions
at law.”32
An action for reinstatement by reason of illegal dismissal is one based on an injury to the complainants’ rights which should
be brought within four years from the time of their dismissal pursuant to Article 1146 33 of the Civil Code. Respondents’
complaint filed almost 3 years after their alleged illegal dismissal was still well within the prescriptive period. Laches cannot,
therefore, be invoked yet.34 To be sure, laches may be applied only upon the most convincing evidence of deliberate inaction,
for the rights of laborers are protected under the social justice provisions of the Constitution and under the Civil Code. 35

Stare Decisis

The main issue sought to be determined in this case is the validity of respondents’ dismissal from employment. Petitioners
contend that they either voluntarily retired from the service or terminated from employment based on an authorized cause.
The LA and the NLRC are one in saying that the dismissal was legal. The CA, however, no longer discussed the validity of the
ground of termination. Rather, it applied the Court’s decision in the Philcea case where the same ground was thoroughly
discussed. In other words, the appellate court applied the doctrine of stare decisis and reached the same conclusion as the
earlier case.

Under the doctrine of stare decisis, when a court has laid down a principle of law as applicable to a certain state of facts, it
will adhere to that principle and apply it to all future cases in which the facts are substantially the same, even though the
parties may be different.36 Where the facts are essentially different, however, stare decisis does not apply, for a perfectly
sound principle as applied to one set of facts might be entirely inappropriate when a factual variant is introduced. 37

The question, therefore, is whether the factual circumstances of this present case are substantially the same as the Philcea
case.

We answer in the affirmative.

This case and the Philcea case involve the same period which is March to April 2004; the issuance of Memorandum to
employees informing them of the implementation of the cost reduction program; the implementation of the voluntary
retirement program and retrenchment program, except that this case involves different employees; the execution of deeds of
release, waiver, and quitclaim, and the acceptance of separation pay by the affected employees.

The illegality of the basis of the implementation of both voluntary retirement and retrenchment programs of petitioners had
been thoroughly ruled upon by the Court in the Philcea case. It discussed the requisites of both retrenchment and
redundancy as authorized causes of termination and that petitioners failed to substantiate them. In ascertaining the bases of
the termination of employees, it took into consideration petitioners’ claim of business losses; the purchase of machinery and
equipment after the termination, the declaration of cash dividends to stockholders, the hiring of 100 new employees after the
retrenchment, and the authorization of full blast overtime work for six hours daily. These, said the Court, are inconsistent
with petitioners’ claim that there was a slump in the demand for its products which compelled them to implement the
termination programs. In arriving at its conclusions, the Court took note of petitioners’ net sales, gross and net profits, as
well as net income. The Court, thus, reached the conclusion that the retrenchment effected by PCMC is invalid due to a
substantive defect. We quote hereunder the Court’s pronouncement in the Philcea case, to wit:
Respondents failed to adduce clear and convincing evidence to prove the confluence of the essential requisites for a valid
retrenchment of its employees. We believe that respondents acted in bad faith in terminating the employment of the
members of petitioner Union.

Contrary to the claim of respondents that the Corporation was experiencing business losses, respondent Corporation, in fact,
amassed substantial earnings from 1999 to 2003. It found no need to appropriate its retained earnings except on March 23,
2001, when it appropriated P60,000,000.00 to increase production capacity. x x x

xxx

The evidence on record belies the P22,820,151.00 net income loss in 2004 as projected by the SOLE. On March 29, 2004,
the Board of Directors approved the appropriation of P20,000,000.00 to purchase machinery to improve its facilities, and
declared cash dividends to stockholders at P30.00 per share. x x x

xxx

It bears stressing that the appropriation of P20,000,000.00 by the respondent Corporation on September 16, 2004 was made
barely five months after the 77 Union members were dismissed on the ground that respondent Corporation was suffering
from "chronic depression." Cash dividends were likewise declared on March 29, 2004, barely two weeks after it implemented
its "retrenchment program."

If respondent Corporation were to be believed that it had to retrench employees due to the debilitating slump in demand for
its products resulting in severe losses, how could it justify the purchase of P20,000,000.00 worth of machinery and
equipment? There is likewise no justification for the hiring of more than 100 new employees, more than the number of those
who were retrenched, as well as the order authorizing full blast overtime work for six hours daily. All these are inconsistent
with the intransigent claim that respondent Corporation was impelled to retrench its employees precisely because of low
demand for its products and other external causes.

xxx

That respondents acted in bad faith in retrenching the 77 members of petitioner is buttressed by the fact that Diaz issued his
Memorandum announcing the cost-reduction program on March 9, 2004, after receipt of the February 10, 2004 letter of the
Union president which included the proposal for additional benefits and wage increases to be incorporated in the CBA for the
ensuing year. Petitioner and its members had no inkling, before February 10, 2004, that respondent Corporation would
terminate their employment. Moreover, respondent Corporation failed to exhaust all other means to avoid further losses
without retrenching its employees, such as utilizing the latter’s respective forced vacation leaves. Respondents also failed to
use fair and reasonable criteria in implementing the retrenchment program, and instead chose to retrench 77 of the
51
members of petitioner out of the dismissed 88 employees. Worse, respondent Corporation hired new employees and even
rehired the others who had been "retrenched."

As shown by the SGV & Co. Audit Report, as of year end December 31, 2003, respondent Corporation increased its net sales
by more than P8,000,000.00. Respondents failed to prove that there was a drastic or severe decrease in the product sales or
that it suffered severe business losses within an interval of three (3) months from January 2004 to March 9, 2004 when Diaz
issued said Memorandum. Such claim of a depressed market as of March 9, 2004 was only a pretext to retaliate against
petitioner Union and thereby frustrate its demands for more monetary benefits and, at the same time, justify the dismissal of
the 77 Union members.

xxx

In contrast, in this case, the retrenchment effected by respondent Corporation is invalid due to a substantive defect, non-
compliance with the substantial requirements to effect a valid retrenchment; it necessarily follows that the termination of the
employment of petitioner Union’s members on such ground is, likewise, illegal. As such, they (petitioner Union’s members)
are entitled to reinstatement with full backwages.38
We find no reason to depart from the above conclusions which are based on the Court’s examination of the evidence
presented by the parties therein. As the respondents here were similarly situated as the union members in the Philcea case,
and considering that the questioned dismissal from the service was based on the same grounds under the same
circumstances, there is no need to relitigate the issues presented herein. In short, we adopt the Court’s earlier findings that
there was no valid ground to terminate the employees.

A closer look at petitioners’ arguments would show that they want the Court to re-examine our decision in the Philcea
case allegedly on the ground that the conclusions therein were based on erroneous interpretation of the evidence presented.

Indeed, in Abaria v. National Labor Relations Commission,39 although the Court was confronted with the same issue of the
legality of a strike that has already been determined in a previous case, the Court refused to apply the doctrine of stare
decisis insofar as the award of backwages was concerned because of the clear erroneous application of the law. We held
therein that the Court abandons or overrules precedents whenever it realizes that it erred in the prior decision. 40 The Court’s
pronouncement in that case is instructive:
The doctrine though is not cast in stone for upon a showing that circumstances attendant in a particular case override the
great benefits derived by our judicial system from the doctrine of stare decisis, the Court is justified in setting it aside. For
the Court, as the highest court of the land, may be guided but is not controlled by precedent. Thus, the Court, especially with
a new membership, is not obliged to follow blindly a particular decision that it determines, after re-examination, to call for a
rectification.41
The Abaria case, however, is not applicable in this case. There is no reason to abandon the Court’s ruling in the Philcea case.

Do we apply the aforesaid decision to all the respondents herein? Again, we answer in the affirmative.

Just like the union members in the Philcea case, respondents Tagyamon, Luna, Badayos, Dela Cruz, and Comandao received
similarly worded memorandum of dismissal effective April 15, 2004 based on the same ground of slump in the market
demand for the company’s products. As such, they are similarly situated in all aspects as the union members. With respect to
respondents Marcos, Nemis and Ilao, although they applied for voluntary retirement, the same was not accepted by
petitioner. Instead, it issued notice of termination dated March 6, 2004 to these same employees. 42 And while it is true that
petitioner paid them separation pay, the payment was in the nature of separation and not retirement pay. In other words,
payment was made because of the implementation of the retrenchment program and not because of retirement. 43 As their
application for availing of the company’s voluntary retirement program was based on the wrong premise, the intent to retire
was not clearly established, or rather that the retirement is involuntary. Thus, they shall be considered discharged from
employment.44 Consequently, they shall be treated as if they are in the same footing as the other respondents herein and the
union members in the Philcea case.

Waivers, Releases and Quitclaims

“As a rule, deeds of release and quitclaim cannot bar employees from demanding benefits to which they are legally entitled
or from contesting the legality of their dismissal. The acceptance of those benefits would not amount to estoppel.” 45 To
excuse respondents from complying with the terms of their waivers, they must locate their case within any of three narrow
grounds: (1) the employer used fraud or deceit in obtaining the waivers; (2) the consideration the employer paid is incredible
and unreasonable; or (3) the terms of the waiver are contrary to law, public order, public policy, morals, or good customs or
prejudicial to a third person with a right recognized by law. 46 The instant case falls under the first situation.

As the ground for termination of employment was illegal, the quitclaims are deemed illegal as the employees’ consent had
been vitiated by mistake or fraud. The law looks with disfavor upon quitclaims and releases by employees pressured into
signing by unscrupulous employers minded to evade legal responsibilities. 47 The circumstances show that petitioner’s
misrepresentation led its employees, specifically respondents herein, to believe that the company was suffering losses which
necessitated the implementation of the voluntary retirement and retrenchment programs, and eventually the execution of
the deeds of release, waiver and quitclaim.48

It can safely be concluded that economic necessity constrained respondents to accept petitioners’ monetary offer and sign
the deeds of release, waiver and quitclaim. That respondents are supervisors and not rank-and-file employees does not make
them less susceptible to financial offers, faced as they were with the prospect of unemployment. The Court has allowed
supervisory employees to seek payment of benefits and a manager to sue for illegal dismissal even though, for a
consideration, they executed deeds of quitclaims releasing their employers from liability. 49
x x x There is no nexus between intelligence, or even the position which the employee held in the company when it concerns
the pressure which the employer may exert upon the free will of the employee who is asked to sign a release and quitclaim.
A lowly employee or a sales manager, as in the present case, who is confronted with the same dilemma of whether [to sign]
a release and quitclaim and accept what the company offers them, or [to refuse] to sign and walk out without receiving
anything, may do succumb to the same pressure, being very well aware that it is going to take quite a while before he can
recover whatever he is entitled to, because it is only after a protracted legal battle starting from the labor arbiter level, all
the way to this Court, can he receive anything at all. The Court understands that such a risk of not receiving anything

52
whatsoever, coupled with the probability of not immediately getting any gainful employment or means of livelihood in the
meantime, constitutes enough pressure upon anyone who is asked to sign a release and quitclaim in exchange of some
amount of money which may be way below what he may be entitled to based on company practice and policy or by law. 50
The amounts already received by respondents as consideration for signing the releases and quitclaims should be deducted
from their respective monetary awards.51 ChanRoblesVirtualawlibrary

WHEREFORE, premises considered, the petition is hereby DENIED. The Court of Appeals Decision dated July 7, 2009 and
Resolution dated February 26, 2010 in CA-G.R. SP No. 105236 are AFFIRMED. chanRoblesvirtualLawlibrary

SO ORDERED.

Velasco, Jr., (Chairperson), Leonardo-De Castro,* Abad, and Leonen, JJ., concur.

Endnotes:

*
Designated Acting Member in lieu of Associate Justice Jose Catral Mendoza, per Raffle dated February 16, 2011.

1
Penned by Associate Justice Jose Catral Mendoza, with Associate Justices Sesinando E. Villon and Marlene Gonzales-Sison,
concurring, rollo, pp. 50-59.

2
Penned by Associate Justice Marlene Gonzales-Sison, with Associate Justices Sesinando E. Villon and Ramon R. Garcia,
concurring; rollo, pp. 61-62.

Rollo, p. 58.
3

Philippine Carpet Employees Association (PHILCEA) v. Hon. Sto. Tomas, 518 Phil. 299 (2006).
4

Rollo, p. 82.
5

Id. at 83.
6

Id. at 84.
7

Id. at 85.
8

Id. at 86.
9

10
Id. at 82.

11
CA rollo, p. 73.

12
Rollo, pp. 73-81.

13
Supra note 4.

14
CA rollo, pp. 74-93.

15
Id. at 93-96.

16
Id. at 235-239.

17
Id. at 151-160.

18
Id. at 158.

19
Id. at 159.

20
Id. at 161-164.

21
Id. at 55-56.

22
Id. at 58.

23
Id.

24
Id. at 28-29.

25
Id. at 29.

26
Id.

27
Id. at 38.

28
Id. at 39.

29
Id. at 40-42.
53
30
GF Equity, Inc. v. Valenzona, G.R. No. 156841, June 30, 2005, 462 SCRA 466, 480.

31
See: GF Equity, Inc. v. Valenzona, supra; Mendoza v. NLRC, 350 Phil. 486 (1998); Reno Foods, Inc. v. National Labor
Relations Commission, 319 Phil. 500 (1995).

32
Mendoza v. NLRC, 350 Phil. 486, 495 (1998).

33
Art. 1146. The following actions must be instituted within four years:

(1) Upon an injury to the rights of the plaintiff;

(2) Upon a quai-delict.

34
Reno Foods, Inc. v. National Labor Relations Commission, supra note 31, at 509.

35
Id.

36
Abaria v. National Labor Relations Commission, G.R. No. 154113, December 7, 2011, 661 SCRA 686, 712.

37
Hacienda Bino/Hortencia Starke, Inc. v. Cuenca, 496 Phil. 198, 207 (2005).

38
Philippine Carpet Employees Association (PHILCEA) v. Hon. Sto. Tomas, supra note 4, at 317-323.

39
Supra note 36.

40
Abaria v. National Labor Relations Commission, supra note 36, at 713.

41
Id.

42
Rollo, pp. 422-424.

43
See Ariola v. Philex Mining Corp., 503 Phil. 765, 780 (2005).

44
Id. at 783.

45
Emco Plywood Corporation v. Abelgas, 471 Phil. 460, 483 (2004).

46
Quevedo v. Benguet Electric Cooperative, Inc., 599 Phil. 438, 451 (2009).

Emco Plywood Corporation v. Abelgas, supra note 45, at 483; Philippine Carpet Employee Association v. Philippine Carpet
47

Manufacturing Corporation, 394 Phil. 716, 728-729 (2000).

48
See: TEA-SPFL v. NLRC, 338 Phil. 681, 690 (1997).

49
Ariola v. Philex Mining Corp., supra note 43, at 789.

50
Becton Dickinson Phils., Inc. v. NLRC, 511 Phil. 566, 589-590 (2005).

51
Emco Plywood Corporation v. Abelgas, supra note 45.

54
ALMIRANTE-QUITCLIAM-361265
August 22, 2014

Dominador Almirante
Labor case digest

RESPONDENTS Ignacio B. Tagyamon, Pablito L. Luna, Fe B. Badayos, and Cynthia L.

Comandao were supervisors of petitioner Philippine Carpet Manufacturing Corp. (PCMC).

Last March 15, 2004, they received a memorandum of dismissal from the petitioner.
They were informed that the petitioner was implementing a retrenchment program in
accordance with Article 283 of the Labor Code. They were paid their separation pay and
executed deeds of release, waiver and quitclaim.

Claiming that they were aggrieved by petitioner’s decision to terminate their

employment, the respondents filed separate complaints against the petitioner for illegal
dismissal. They insisted that their acceptance of separation pay and signing of quitclaim
is not a bar to the pursuit of illegal dismissal case. Can their case prosper?

The Supreme Court (Third Division) ruling: Yes.

It can safely be concluded that economic necessity constrained the respondents to

accept the petitioners’ monetary offer and sign the deeds of release, waiver and
quitclaim. That respondents are supervisors and not rank-and-file employees does not
make them less susceptible to financial offers, faced as they were with the prospect of
unemployment. The Court has allowed supervisory employees to seek payment of
benefits and a manager to sue for illegal dismissal even though, for a consideration, they
executed deeds of quitclaims releasing their employers from liability (Ariola v. Philex
Mining Corp., 503 Phil. 765, 780 (2005) at 789).

x x x There is no nexus between intelligence, or even the position which the employee
held in the company when it concerns the pressure which the employer may exert upon
the free will of the employee who is asked to sign a release and quitclaim. A lowly
employee or a sales manager, as in the present case, who is confronted with the same
dilemma of whether (to sign) a release and quitclaim and accept what the company
offers them, or (to refuse) to sign and walk out without receiving anything, may succumb
to the same pressure, being very well aware that it is going to take quite a while before
he can recover whatever he is entitled to, because it is only after a protracted legal
battle starting from the labor arbiter level, all the way to this Court, can he receive
anything at all. The Court understands that such a risk of not receiving anything
whatsoever, coupled with the probability of not immediately getting any gainful
employment or means of livelihood in the meantime, constitutes enough pressure upon
anyone who is asked to sign a release and quitclaim in exchange of some amount of
money which may be way below what he may be entitled to based on company practice
and policy or by law (Philippine Carpet Manufacturing Corp., et. al. vs. Ignacio B.
Tagyamon, et. al., G.R. No. 191475, Dec. 11, 2013, quoting Becton Dickinson Phils., Inc.
v. NLRC, 511 Phil. 566, 589-590 (2005)

55
 SECOND DIVISION

G.R. No. 188753, October 01, 2014

AM-PHIL FOOD CONCEPTS, INC., Petitioner, v. PAOLO JESUS T. PADILLA, Respondent.

DECISION

LEONEN, J.:

This is a petition for review on certiorari1 under Rule 45 of the Rules of Court, praying that the February 25, 2009 decision 2 of
the Court of Appeals sustaining the February 28, 2007 resolution 3 of the National Labor Relations Commission, and the July
3, 2009 resolution4 of the Court of Appeals denying petitioner Am-Phil Food Concept, Inc.’s (Am-Phil) motion for
reconsideration, be annulled. The February 28, 2007 decision of the National Labor Relations Commission affirmed the May
9, 2005 decision5 of Labor Arbiter Eric V. Chuanico that held that respondent Paolo Jesus T. Padilla (Padilla) was illegally
dismissed.

Padilla’s position paper6 states that he was hired on April 1, 2002 as a Marketing Associate by Am-Phil, a corporation
engaged in the restaurant business.7 On September 29, 2002, Am-Phil sent Padilla a letter confirming his regular
employment.8 Sometime in the first week of March 2004, three (3) of Am-Phil’s officers (Marketing Supervisor Elaine de
Jesus, Area Director Art Latinazo, and Human Resources Officer Eunice Tugab) informed Padilla that Am-Phil would be
implementing a retrenchment program that would be affecting three (3) of its employees, Padilla being one of them. The
retrenchment program was allegedly on account of serious and adverse business conditions, i.e., lack of demand in the
market, stiffer competition, devaluation of the Philippine peso, and escalating operation costs. 9 cralawlawlibrary

Padilla questioned Am-Phil’s choice to retrench him. He noted that Am-Phil had six (6) contractual employees, while he was a
regular employee who had a good evaluation record. He pointed out that Am-Phil was actually then still hiring new
employees. He also noted that Am-Phil's sales have not been lower relative to the previous year. 10 cralawlawlibrary

In response, Am-Phil's three (3) officers gave him two options: (1) be retrenched with severance pay or (2) be transferred as
a waiter in Am-Phil’s restaurant, a move that entailed his demotion. 11 cralawlawlibrary

On March 17, 2004, Am-Phil sent Padilla a memorandum notifying him of his retrenchment. 12 Padilla was paid separation
pay in the amount of ?26,245.38. On April 20, 2004, Padilla executed a quitclaim and release in favor of Am-Phil. 13 cralawlawlibrary

On July 28, 2004, Padilla filed the complaint14 for illegal dismissal (with claims for backwages, damages, and attorney’s fees),
which is now subject of this petition. Apart from Am-Phil, Padilla impleaded Am-Phil’s officers: Luis L. Vera, Jr., Winston L.
Chan, Robert B. Epes, Richmond S. Yang, John Arthur Latinazo, and Eunice D. Tugab.

For its defense, Am-Phil claimed that Padilla was not illegally terminated and that it validly exercised a management
prerogative. It asserted that Padilla was hired merely as part of an experimental marketing program. It added that in 2003,
it did suffer serious and adverse business losses and that, in the first quarter of 2004, it was compelled to retrench
employees so as to avoid further losses. Am-Phil also underscored that Padilla executed a quitclaim and release in its favor.
With respect to its impleaded officers, Am-Phil claimed that the complaint should be dismissed as they have a personality
distinct and separate from Am-Phil.15 cralawlawlibrary

On May 9, 2005, Labor Arbiter Eric V. Chuanico (Labor Arbiter Chuanico) rendered the decision finding that Padilla was
illegally dismissed.16 He noted that Am-Phil failed to substantiate its claim of serious business losses and that it failed to
comply with the procedural requirement for a proper retrenchment (i.e., notifying the Department of Labor and
Employment).17 He also held that the quitclaim and release executed by Padilla is contrary to law. 18 Finding, however, that
Padilla failed to show bad faith on the part of Am-Phil’s officers, Labor Arbiter Chuanico dismissed the complaint with respect
to the latter and held that only Am-Phil was liable to Padilla. 19 cralawlawlibrary

The dispositive portion of Labor Arbiter Chuanico’s decision reads: chanRoblesvirt ualLawlibrary

Prescinding from the forgoing, this office orders the respondent to pay the complainant limited backwages from the time of
his dismissal up to the time of rendition of this judgment. The computation of backwages as prepared by the NLRC
Computation Unit is herewith attached and made an integral part of this decision. Given that the position had already been
abolished and since separation pay had already been received by the complainant, reinstatement is no longer viable [sic]
remedy under the present situation.

As the complainant was constrained to hire the services of a lawyer, attorneys [sic] fees are ordered paid equivalent to ten
percent of the total award thereof [sic]. Complainants [sic] claim for damages are [sic] denied for lack of merit.

For failure of the complainant to properly substantiate that individual respondents are guilty of bad faith or conduct towards
him (in Sunio et. al. vs. NLRC GRN L 57767 [sic] January 31, 1984) only respondent Am-Phil Food Concepts, Inc. is held
solidarily liable towards [sic] the complainant.

SO ORDERED.20 chanrobleslaw

56
On August 15, 2005, Am-Phil filed an appeal 21 with the National Labor Relations Commission. Apart from asserting its
position that Padilla was validly retrenched, Am-Phil claimed that Labor Arbiter Chuanico was in error in deciding the case
despite the pendency of its motion for leave to file supplemental rejoinder. 22 Through this supplemental rejoinder, Am-Phil
supposedly intended to submit its audited financial statements for the years 2001 to 2004 and, thereby, prove that it had
suffered business losses. Am-Phil claimed that its right to due process was violated by Labor Arbiter Chuanico’s refusal to
consider its 2001 to 2004 audited financial statements.23 cralawlawlibrary

On February 28, 2007, the National Labor Relations Commission issued the resolution affirming Labor Arbiter Chuanico’s
ruling, albeit clarifying that Labor Arbiter Chuanico wrongly used the word “solidarily” in describing Am-Phil’s liability to
Padilla.24
cralawlawlibrary

With respect to Am-Phil’s claim that Labor Arbiter Chuanico erroneously ignored its 2001 to 2004 audited financial
statements, the National Labor Relations Commission noted that a supplemental rejoinder was not a necessary pleading in
proceedings before labor arbiters. It added that, with the exception of the 2004 audited financial statements, all of Am-Phil’s
relevant audited financial statements were already available at the time it submitted its position paper, reply, and rejoinder,
but that Am-Phil failed to annex them to these pleadings. The National Labor Relations Commission added that, granting
that this failure was due to mere oversight, Am-Phil was well in a position to attach them in its memorandum of appeal but
still failed to do so.25 Holding that Labor Arbiter Chuanico could not be faulted for violating Am-Phil’s right to due process,
the National Labor Relations Commission emphasized that: chanRoblesvirtualLawlibrary

[O]mission by a party to rebut that which would have naturally invited an immediate pervasive and stiff competition creates
an adverse inference that either the controverting evidence to be presented will only prejudice its case or that the
uncontroverted evidence speaks the truth.26 (Citation omitted)

The dispositive portion of this National Labor Relations Commission resolution reads: chanRoblesvirt ualLawlibrary

WHEREFORE, the foregoing premises considered, the instant appeal is DIMISSED for lack of merit. Accordingly, the decision
appealed from is AFFIRMED.

However, the word “solidarily” in the last sentence of the decision should be deleted to conform with the Labor Arbiter’s
finding that the complainant-appellee failed to properly substantiate that individual respondents-appellants were guilty of bad
faith or conduct towards him.

SO ORDERED.27 chanrobleslaw

In the resolution28 dated April 27, 2007, the National Labor Relations Commission denied Am-Phil’s motion for
reconsideration.

Am-Phil then filed with the Court of Appeals a petition for certiorari29 under Rule 65 of the 1997 Rules of Civil Procedure.

On February 25, 2009, the Court of Appeals rendered the assailed decision 30 dismissing Am-Phil’s petition for certiorari and
affirming the National Labor Relations Commission’s February 28, 2007 and April 27, 2007 resolutions. The Court of Appeals
denied Am-Phil's motion for reconsideration in its July 3, 2009 resolution.

Hence, this petition.

Am-Phil insists on its position that it was denied due process and posits that the National Labor Relations Commission’s
contrary findings are founded on “illogical ratiocinations.”31 It asserts that the evidence support the conclusion that Padilla
was validly dismissed, that it was an error to ignore the quitclaim and release which Padilla had executed, and that Padilla’s
retrenchment was a valid exercise of management prerogative. 32 cralawlawlibrary

For resolution is the issue of whether respondent Paolo Jesus T. Padila was dismissed through a valid retrenchment
implemented by petitioner Am-Phil Food Concepts, Inc. Related to this, we must likewise resolve the underlying issue of
whether it was proper for Labor Arbiter Eric V. Chuanico to have ruled that Padilla was illegally dismissed despite Am-Phil’s
pending motion for leave to file supplemental rejoinder.

Am-Phil’s right to due

process was not violated

Am-Phil faults Labor Arbiter Chuanico for not having allowed its motion for leave to file supplemental rejoinder that included
its 2001 to 2004 audited financial statements as annexes. These statements supposedly show that Am-Phil suffered serious
business losses. Thus, it claims that its right to due process was violated.

Am-Phil’s motion for leave to file supplemental rejoinder,33 dated May 20, 2005,34 was filed on May 31, 2005,35 well after
Labor Arbiter Chuanico promulgated his May 9, 2005 decision. Common sense dictates that as the motion for leave to file
supplemental rejoinder was filed after the rendition of the decision, the decision could not have possibly taken into
consideration the motion. Giving consideration to a motion filed after the promulgation of the decision is not only
unreasonable, it is impossible. It follows that it is completely absurd to fault Labor Arbiter Chuanico for not considering a May
31 motion in his May 9 decision

Even if we were to ignore the curious fact that the motion was filed after the rendition of the decision, Labor Arbiter Chuanico
was under no obligation to admit the supplemental rejoinder.

Rule V of the 2002 National Labor Relations Commission Rules of Procedure (2002 Rules), which were in effect when Labor
Arbiter Chuanico promulgated his decision on May 9, 2005,36 provides: chanRoblesvirt ualLawlibrary

57
SECTION 4. SUBMISSION OF POSITION PAPERS / MEMORANDA. Without prejudice to the provisions of the last paragraph,
SECTION 2 of this Rule, the Labor Arbiter shall direct both parties to submit simultaneously their position papers with
supporting documents and affidavits within an inextendible period of ten (10) days from notice of termination of the
mandatory conference.

These verified position papers to be submitted shall cover only those claims and causes of action raised in the complaint
excluding those that may have been amicably settled, and shall be accompanied by all supporting documents including
the affidavits of their respective witnesses which shall take the place of the latter’s direct testimony. The parties shall
thereafter not be allowed to allege facts, or present evidence to prove facts, not referred to and any cause or
causes of action not included in the complaint or position papers, affidavits and other documents. 37 (Emphasis
supplied)

....

SECTION 11. ISSUANCE OF AN ORDER SUBMITTING THE CASE FOR DECISION. After the parties have submitted their
position papers and supporting documents, and upon evaluation of the case the Labor Arbiter finds no necessity of further
hearing, he shall issue an order expressly declaring the submission of the case for decision. 38 chanrobleslaw

From the provisions of the 2002 Rules, it is clear that a supplemental rejoinder, as correctly ruled by the National Labor
Relations Commission,39 is not a pleading which a labor arbiter is duty-bound to accept.40 Even following changes to the
National Labor Relations Commission Rules of Procedure in 2005 and 2011, a rejoinder has not been recognized as a
pleading that labor arbiters must necessarily admit. The 2005 and 2011 National Labor Relations Commission Rules of
Procedure only go so far as to recognize that a reply “may” be filed by the parties. 41 cralawlawlibrary

Thus, Labor Arbiter Chuanico was under no obligation to grant Am-Phil’s motion for leave to admit supplemental rejoinder
and, thereby, consider the supplemental rejoinder’s averments and annexes. That Am-Phil had to file a motion seeking
permission to file its supplemental rejoinder (i.e., motion for leave to file) is proof of its own recognition that the labor arbiter
is under no compulsion to accept any such pleading and that the supplemental rejoinder’s admission rests on the labor
arbiter’s discretion.

The standard of due process in labor cases was explained by this court in Sy v. ALC Industries, Inc.:42 cralawlawlibrary

Due process is satisfied when the parties are afforded fair and reasonable opportunity to explain their respective sides of the
controversy. In Mariveles Shipyard Corp. v. CA, we held: chanRoblesvirtualLawlibrary

The requirements of due process in labor cases before a Labor Arbiter is satisfied when the parties are given the
opportunity to submit their position papers to which they are supposed to attach all the supporting documents or
documentary evidence that would prove their respective claims, in the event that the Labor Arbiter determines that no formal
hearing would be conducted or that such hearing was not necessary. 43 (Emphasis in the original)

Am-Phil filed three (3) pleadings with Labor Arbiter Chuanico: first, its position paper 44 on September 9, 2004; second, its
reply45 on September 30, 2004; and third, its rejoinder46 on October 11, 2004. It was more than six (6) months after it had
filed its rejoinder that it filed its motion for leave to admit supplemental rejoinder on May 31, 2005.

Its three (3) pleadings having been allowed, Am-Phil had no shortage of opportunities to plead its claims and to adduce its
evidence. It has no basis for claiming that it was not “afforded [a] fair and reasonable opportunity to explain [its side] of the
controversy.”47 The filing of its motion for leave to admit supplemental rejoinder represents nothing more than a belated and
procedurally inutile attempt at resuscitating its case.

Retrenchment and its

requirements

Article 283 of the Labor Code recognizes retrenchment as an authorized cause for terminating employment. It states: chanRoblesvirtualLawlibrary

Art. 283. Closure of establishment and reduction of personnel. The employer may also terminate the employment of
any employee due to the installation of labor-saving devices, redundancy, retrenchment to prevent losses or the closing or
cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the
provisions of this Title, by serving a written notice on the workers and the Ministry of Labor and Employment at least one (1)
month before the intended date thereof. In case of termination due to the installation of labor-saving devices or redundancy,
the worker affected thereby shall be entitled to a separation pay equivalent to at least his one (1) month pay or to at least
one (1) month pay for every year of service, whichever is higher. In case of retrenchment to prevent losses and in cases of
closures or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses,
the separation pay shall be equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service,
whichever is higher. A fraction of at least six (6) months shall be considered one (1) whole year.

In Sebuguero v. National Labor Relations Commission,48 this court explained the concept of retrenchment as follows: chanRoblesvirtualLawlibrary

Retrenchment . . . is used interchangeably with the term "lay-off." It is the termination of employment initiated by the
employer through no fault of the employee's and without prejudice to the latter, resorted to by management during periods
of business recession, industrial depression, or seasonal fluctuations, or during lulls occasioned by lack of orders, shortage of
materials, conversion of the plant for a new production program or the introduction of new methods or more efficient
machinery, or of automation. Simply put, it is an act of the employer of dismissing employees because of losses in the
operation of a business, lack of work, and considerable reduction on the volume of his business, a right consistently
recognized and affirmed by this Court.49 chanrobleslaw

58
As correctly pointed out by Am-Phil, retrenchment entails an exercise of management prerogative. In Andrada v. National
Labor Relations Commission,50 this court stated: chanRoblesvirt ualLawlibrary

Retrenchment is an exercise of management’s prerogative to terminate the employment of its employees en masse, to either
minimize or prevent losses, or when the company is about to close or cease operations for causes not due to business
losses.51
chanrobleslaw

Nevertheless, as has also been emphasized in Andrada, the exercise of management prerogative is not absolute: chanRoblesvirt ualLawlibrary

A company’s exercise of its management prerogatives is not absolute. It cannot exercise its prerogative in a cruel,
repressive, or despotic manner. We held in F.F. Marine Corp. v. NLRC: chanRoblesvirtualLawlibrary

This Court is not oblivious of the significant role played by the corporate sector in the country’s economic and social progress.
Implicit in turn in the success of the corporate form in doing business is the ethos of business autonomy which allows
freedom of business determination with minimal governmental intrusion to ensure economic independence and development
in terms defined by businessmen. Yet, this vast expanse of management choices cannot be an unbridled prerogative that can
rise above the constitutional protection to labor. Employment is not merely a lifestyle choice to stave off boredom.
Employment to the common man is his very life and blood, which must be protected against concocted causes to legitimize
an otherwise irregular termination of employment. Imagined or undocumented business losses present the least propitious
scenario to justify retrenchment.52 (Underscoring supplied, citation omitted)

Thus, retrenchment has been described as “a measure of last resort when other less drastic means have been tried and
found to be inadequate.”53 cralawlawlibrary

Retrenchment is, therefore, not a tool to be wielded and used nonchalantly. To justify retrenchment, it “must be due to
business losses or reverses which are serious, actual and real.”54 cralawlawlibrary

There are substantive requirements relating to the losses or reverses that must underlie a retrenchment. That these losses
are serious relates to their gravity and that they are actual and real relates to their veracity and verifiability. Likewise, that a
retrenchment is anchored on serious, actual, and real losses or reverses is to say that the retrenchment is done in good faith
and not merely as a veneer to disguise the illicit termination of employees. Equally significant is an employer’s basis for
determining who among its employees shall be retrenched. Apart from these substantive requirements are the procedural
requirements imposed by Article 283 of the Labor Code.

Thus, this court has outlined the requirements for a valid retrenchment, each of which must be shown by clear and
convincing evidence, as follows: chanRoblesvirtualLawlibrary

(1) that the retrenchment is reasonably necessary and likely to prevent business losses
which, if already incurred, are not merely de minimis, but substantial, serious,
actual and real, or if only expected, are reasonably imminent as perceived
objectively and in good faith by the employer;
(2) that the employer served written notice both to the employees and to the
Department of Labor and Employment at least one month prior to the intended date
of retrenchment;
(3) that the employer pays the retrenched employees separation pay equivalent to one
month pay or at least ½ month pay for every year of service, whichever is higher;
(4) that the employer exercises its prerogative to retrench employees in good faith for
the advancement of its interest and not to defeat or circumvent the employees’
right to security of tenure; and
(5) that the employer used fair and reasonable criteria in ascertaining who would be
dismissed and who would be retained among the employees, such as status (i.e.,
whether they are temporary, casual, regular or managerial employees), efficiency,
seniority, physical fitness, age, and financial hardship for certain
workers.55 (Citations omitted)

Am-Phil failed to establish

compliance with the requisites
for a valid retrenchment

Am-Phil’s 2001 to 2004 audited financial statements, the sole proof upon which Am-Phil relies on to establish its claim that it
suffered business losses, have been deemed unworthy of consideration. These audited financial statements were mere
annexes to the motion for leave to admit supplemental rejoinder which Labor Arbiter Chuanico validly disregarded. No
credible explanation was offered as to why these statements were not presented when the evidence-in-chief was being
considered by the labor arbiter. It follows that there is no clear and convincing evidence to sustain the substantive ground
on which the supposed validity of Padilla’s retrenchment rests.

Moreover, it is admitted that Am-Phil did not serve a written notice to the Department of Labor and Employment one (1)
59
month before the intended date of Padilla’s retrenchment, as required by Article 283 of the Labor Code. 56cralawlawlibrary

While it is true that Am-Phil gave Padilla separation pay, compliance with none but one (1) of the many requisites for a valid
retrenchment does not absolve Am-Phil of liability.

Padilla’s quitclaim and release

does not negate his having been
illegally dismissed

It is of no consequence that Padilla ostensibly executed a quitclaim and release in favor of Am-Phil. This court’s
pronouncements in F.F. Marine Corporation v. National Labor Relations Commission,57 which similarly involved an invalid
retrenchment, are of note: chanRoblesvirtualLawlibrary

Considering that the ground for retrenchment availed of by petitioners was not sufficiently and convincingly established, the
retrenchment is hereby declared illegal and of no effect. The quitclaims executed by retrenched employees in favor of
petitioners were therefore not voluntarily entered into by them. Their consent was similarly vitiated by mistake or fraud. The
law looks with disfavor upon quitclaims and releases by employees pressured into signing by unscrupulous employers minded
to evade legal responsibilities. As a rule, deeds of release or quitclaim cannot bar employees from demanding benefits to
which they are legally entitled or from contesting the legality of their dismissal. The acceptance of those benefits would not
amount to estoppel. The amounts already received by the retrenched employees as consideration for signing the quitclaims
should, however, be deducted from their respective monetary awards. 58 (Citations omitted)

In sum, the Court of Appeals committed no error in holding that there was no grave abuse of discretion amounting to lack or
excess of jurisdiction on the part of the National Labor Relations Commission in affirming the May 9, 2005 decision of Labor
Arbiter Eric V. Chuanico holding that respondent Paolo Jesus T. Padilla was illegally dismissed.

WHEREFORE, the petition for review on certiorari is DENIED. The February 25, 2009 decision and the July 3, 2009
resolution of the Court of Appeals are AFFIRMED.

SO ORDERED. cralawre d

Carpio, (Chairperson), Brion, Del Castillo, Mendoza, and Leonen, JJ., concur.

Endnotes:

1
Rollo, pp. 10–28.

2
Id. at 32–45.

3
Id. at 138–144.

4
Id. at 46–47.

5
Id. at 206–212.

6
Id. at 259–265. Position paper of Padilla.

7
Id. at 260.

8
Id. at 261.

9
Id. at 262.

10
Id.

11
Id.

12
Id.

13
Id. at 263.

14
Id. at 282.

15
Id. at 267–277.

16
Id. at 209.

17
Id. at 210–211.

18
Id. at 211.

19
Id. at 211–212.

20
Id.

21
Id. at 175–199.
60
22
Id. at 183.

23
Id. at 183–184.

24
Id. at 144.

25
Id. at 141–142.

26
Id. at 142.

27
Id. at 144.

28
Id. at 145–146.

29
Id. at 119–135.

30
This decision was penned by Associate Justice Rosalinda Asuncion-Vicente and concurred in by Chairman of the Third
Division Associate Justice Martin S. Villarama, Jr. and Associate Justice Myrna Dimaranan-Vidal of the Third Division of the
Court of Appeals.

31
Rollo, p. 19.

32
Id. at 23–24.

33
Id. at 213–214.

34
Id. at 214.

35
Id. at 213.

36
The 2005 NLRC Rules of Procedure took effect on January 7, 2006. See Garcia v. Philippine Airlines, 596 Phil. 510, 542
(2009) [Per J. Carpio Morales, En Banc].

37
See Tegimenta Chemical Phils. v. Buensalida, 577 Phil. 534, 541–542 (2008) [Per J. Ynares-Santiago, Third Division].

38
See Mariveles Shipyard Corp. v. Court of Appeals, 461 Phil. 249, 264–265 (2003) [Per J. Quisumbing, Second Division].

39
Rollo, p. 142.

40
cf. 2005 and 2011 NLRC Rules of Procedure.

41
Per Rule V, sec. 7 of the 2005 NLRC Rules of Procedure: chanRoblesvirt ualLawlibrary

Section 7. Submission of Position Paper and Reply. –

a) Subject to Sections 4 and 5 of this Rule, the Labor Arbiter shall direct the parties to submit simultaneously their verified
position papers with supporting documents and affidavits, if any, within an inextendible period of ten (10) calendar days from
the date of termination of the mandatory conciliation and mediation conference.

b) The position papers of the parties shall cover only those claims and causes of action raised in the complaint or amended
complaint, excluding those that may have been amicably settled, and accompanied by all supporting documents, including
the affidavits of witnesses, which shall take the place of their direct testimony.

c) A reply may be filed by any party within ten (10) calendar days from receipt of the position paper of the adverse party.

d) In their position papers and replies, the parties shall not be allowed to allege facts, or present evidence to prove facts and
any cause or causes of action not referred to or included in the original or amended complaint or petition.

Per Rule V, Section 11 of the 2011 NLRC Rules of Procedure:

SECTION 11. SUBMISSION OF POSITION PAPER AND REPLY. –

a) Subject to Sections 9 and 10 of this Rule, the Labor Arbiter shall direct the parties to submit simultaneously their verified
position papers with supporting documents and affidavits, if any, on a date set by him/her within ten (10) calendar days from
the date of termination of the mandatory conciliation and mediation conference.

b) No amendment of the complaint or petition shall be allowed after the filing of position papers, unless with leave of the
Labor Arbiter.

c) The position papers of the parties shall cover only those claims and causes of action stated in the complaint or amended
complaint, accompanied by all supporting documents, including the affidavits of witnesses, which shall take the place of their
direct testimony, excluding those that may have been amicably settled.

d) Within ten (10) days from receipt of the position paper of the adverse party, a reply may be filed on a date agreed upon
and during a schedule set before the Labor Arbiter. The reply shall not allege and/or prove facts and any cause or causes of
action not referred to or included in the original or amended complaint or petition or raised in the position paper.
(Underscoring supplied)

42
589 Phil. 354 (2008) [Per J. Corona, First Division].

61
43
Id. at 361, citing Gutierrez v. Singer Sewing Machine Co., 458 Phil. 401, 409–410 (2003) [Per J. Quisumbing, Second
Division] and Mariveles Shipyard Corp. v. Court of Appeals, 461 Phil. 249, 265 (2003) [Per J. Quisumbing, Second Division].

44
Rollo, pp. 267–277.

45
Id. at 255–258.

46
Id. at 242–246.

47
Sy v. ALC Industries, Inc., 589 Phil. 354, 361 (2008) [Per J. Corona, First Division].

48
318 Phil. 635 (1995) [Per J. Davide, Jr., First Division]. See also Andrada v. NLRC, 565 Phil. 821, 843 (2007) [Per J.
Velasco, Jr., Second Division].

49
Id. at 646, citing J. A. Sibal, Philippine Legal Encyclopedia 502 (1986); LVN Pictures Employees and Workers Association v.
LVN Pictures, Inc., 146 Phil. 153, 164 (1970) [Per J. Ruiz Castro, En Banc]; and Columbia Development Corp. v. Minister of
Labor and Employment, 230 Phil. 520, 527 (1986) [Per J. Fernan, Second Division].

50
565 Phil. 821 (2007) [Per J. Velasco, Jr., Second Division].

51
Id. at 840.

52
Id. at 839.

Edge Apparel, Inc. v. NLRC, 349 Phil. 972, 983 (1998) [Per J. Vitug, First Division], citing Guerrero v. NLRC, 329 Phil. 1069,
53

1076 (1996) [Per J. Puno, Second Division].

Edge Apparel, Inc. v. NLRC, 349 Phil. 972, 982 (1998) [Per J. Vitug, First Division], citing Guerrero v. NLRC, 329 Phil. 1069,
54

1074 (1996) [Per J. Puno, Second Division].

55
Asian Alcohol Corporation v. NLRC, 364 Phil. 912, 926–927 (1999) [Per J. Puno, Second Division].

56
Rollo, p. 42.

57
495 Phil. 140 (2005) [Per J. Tinga, Second Division].

58
Id. at 158–159.

62
 FIRST DIVISION

G.R. No. 222730, November 07, 2016

BUENAFLOR CAR SERVICES, INC., Petitioner, v. CEZAR DURUMPILI DAVID, JR., Respondent.

DECISION

PERLAS-BERNABE, J.:

Assailed in this petition for review on certiorari1 are the Decision2 dated November 3, 2015 and the Resolution3 dated
February 9, 2016 of the Court of Appeals (CA) in CA-G.R. SP No. 139652, which affirmed with modification the Resolutions
dated November 28, 20144 and February 9, 20155 of the National Labor Relations Commission (NLRC) in NLRC LAC No. 11-
002727-14, finding respondent Cezar Durumpili David, Jr. (respondent) to have been illegally dismissed, and holding
petitioner Buenaflor Car Services, Inc. (petitioner) solely liable for the monetary award.
chanroblesvirtuallawlibrary

The Facts

Respondent was employed as Service Manager by petitioner, doing business under the trade name "Pronto! Auto Services."
In such capacity, he was in charge of the overall day-to-day operations of petitioner, including the authority to sign checks,
check vouchers, and purchase orders.6

In the course of its business operations, petitioner implemented a company policy with respect to the purchase and delivery
of automotive parts and products. The process begins with the preparation of a purchase order by the Purchasing Officer,
Sonny D. De Guzman (De Guzman), which is thereafter, submitted to respondent for his review and approval. Once
approved and signed by respondent and De Guzman, the duplicate copy of the said order is given to petitioner's supplier who
would deliver the goods/supplies. De Guzman was tasked to receive such goods and thereafter, submit a copy of the
purchase order to petitioner's Accounting Assistant, Marilyn A. Del Rosario (Del Rosario), who, in turn, prepares the request
for payment to be reviewed by her immediate supervisor,7 Finance Manager and Chief Finance Officer Ruby Anne B. Vasay
(Vasay). Once approved, the check voucher and corresponding check are prepared to be signed by any of the following
officers: respondent, Vasay, or Vice President for Operations Oliver S. Buenaflor (Buenaflor). 8 It was company policy that all
checks should be issued in the name of the specific supplier and not in "cash," and that the said checks are to be picked up
from Del Rosario at the company's office in Muntinlupa City. 9

On August 8, 2013, Chief Finance Officer Cristina S. David (David) of petitioner's affiliate company, Diamond IGB, Inc.,
received a call from the branch manager of ChinaBank, SM City Bicutan Branch, informing her that the latter had cleared
several checks issued by petitioner bearing the words "OR CASH" indicated after the payee's name. Alarmed, David
requested for petitioner's Statement of Account with scanned copies of the cleared checks bearing the words "OR CASH" after
the payee's name. The matter was then immediately brought to petitioner's attention through its President, Exequiel T.
Lampa (Lampa), and an investigation was conducted.10

On August 22, 2013, Lampa and petitioner's Human Resource Manager, Helen Lee (Lee), confronted Del Rosario on the
questioned checks. Del Rosario readily confessed that upon respondent's instruction, she inserted the words "OR CASH" after
the name of the payees when the same had been signed by all the authorized signatories. She also implicated De Guzman,
who was under respondent's direct supervision, for preparing spurious purchase orders that were used as basis in issuing the
subject checks, as well as petitioner's messenger/driver, Jayson G. Caranto (Caranto), who was directed to encash some of
the checks, with both persons also gaining from the scheme. 11 Her confession was put into writing in two (2) separate letters
both of even date (extrajudicial confession).12

As a result, respondent, together with Del Rosario, De Guzman, and Caranto, were placed under preventive suspension 13 for
a period of thirty (30) days, and directed to submit their respective written explanations. The ensuing investigation revealed
that there were twenty-seven (27) checks with the words "OR CASH" inserted after the payee's name, all signed by
respondent and either Vasay or Buenaflor, in the total amount of P1,021,561.72. 14

For his part,15 respondent vehemently denied the charges against him. He claimed that he has no control over the company's
finance and billing operations, nor the authority to instruct Del Rosario to make any check alterations, which changes, if any,
must be made known to Vasay or Buenaflor.

On September 20, 2013, respondent and his co-workers were served their respective notices of termination 16 after having
been found guilty of violating Items B (2), (3) and/or G (3) of the company's Code of Conduct and Behavior, particularly,
serious misconduct and willful breach of trust. Aggrieved, respondent, De Guzman, and Caranto filed a complaint 17 for illegal
dismissal with prayer for reinstatement and payment of damages and attorney's fees against petitioner, Diamond IGB, Inc.,
and one Isagani Buenaflor before the NLRC, docketed as NLRC RAB No. NCR-10-13915-13.

In the meantime, Lee, on behalf of petitioner, filed a criminal complaint 18 for twenty-seven (27) counts of Qualified Theft
through Falsification of Commercial Documents against respondent, De Guzman, Caranto, and Del Rosario, before the Office
of the Muntinlupa City Prosecutor, alleging that the said employees conspired with one another in devising the afore-
described scheme. In support thereof, petitioner submitted the affidavits of Buenaflor 19 and Vasay,20 which stated that at the
time they signed the questioned checks, the same did not bear the words "OR CASH," and that they did not authorize its
insertion after the payee's name. While the City Prosecutor initially found probable cause only against Del Rosario in a
63
Resolution21 dated November 25, 2014, the same was reconsidered22 and all the four (4) employees were indicted in an
Amended Information23 filed before the Regional Trial Court of Muntinlupa City, docketed as Criminal Case No. 14-1065. chanroblesvirtuallawlibrary

The LA Ruling

In a Decision dated September 29, 2014, the Labor Arbiter (LA) ruled that respondent, De Guzman, and Caranto were
illegally dismissed, and consequently, awarded backwages, separation pay and attorney's fees. 24 The LA observed that
petitioner failed to establish the existence of conspiracy among respondent, De Guzman, Caranto, and Del Rosario in altering
the checks and that the latter's extrajudicial confession was informally made and not supported by evidence. 25 cralawred

Dissatisfied, petitioner appealed to the NLRC. chanroblesvirtuallawlibrary

The NLRC Ruling

In a Resolution26 dated November 28, 2014, the NLRC affirmed with modification the LA's Decision, finding De Guzman and
Caranto to have been dismissed for cause, but sustained the illegality of respondent's termination from work.

In so ruling, the NLRC held that since De Guzman prepared the purchase orders that were the basis for the issuance of the
questioned checks, it could not be discounted that the latter may have participated in the scheme, benefited therefrom, or
had knowledge thereof. Similarly, it did not give credence to Caranto's bare denial of the illegal scheme, noting that he still
encashed the questioned checks upon the instruction of Del Rosario despite knowledge of the company's policy on the
matter. On the other hand, the NLRC found Del Rosario's extrajudicial confession against respondent insufficient, holding that
the records failed to show that the latter had a hand in the preparation and encashment of the checks; hence, his dismissal
was without cause and therefore, illegal.27

Unperturbed, petitioner filed a motion for partial reconsideration, 28 which the NLRC denied in a Resolution29 dated February 9,
2015, prompting the former to elevate the matter to the CA via a petition for certiorari.30

The CA Ruling

In a Decision31 dated November 3, 2015, the CA found no grave abuse of discretion on the part of the NLRC in holding that
respondent was illegally dismissed. It ruled that Del Rosario's extrajudicial confession only bound her as the confessant but
constitutes hearsay with respect to respondent and the other co-accused under the res inter alios acta rule. Moreover, while
respondent was a signatory to the checks in question, the CA noted that at the time these checks were signed, the words
"OR CASH" were not yet written thereon. As such, the CA held that no substantial evidence existed to establish that
respondent had breached the trust reposed in him.

However, the CA absolved petitioner's corporate officer, Isagani Buenaflor, from payment of the monetary awards for failure
to show any malicious act on his part, stating the general rule that obligations incurred by the corporation, acting thru its
directors, officers, and employees, are its sole liabilities. In the same vein, Diamond IGB, Inc. was also absolved from
liability, considering that, as a subsidiary, it had a separate and distinct juridical personality from petitioner. 32

Petitioner moved for partial reconsideration,33 which the CA denied in a Resolution34 dated February 9, 2016; hence, the
instant petition.
chanroblesvirtuallawlibrary

The Issue Before the Court

The essential issue for the Court's resolution is whether or not the CA committed reversible error in upholding the NLRC's
ruling that respondent was illegally dismissed. chanroblesvirtuallawlibrary

The Court's Ruling

The petition is meritorious.

Fundamental is the rule that an employee can be dismissed from employment only for a valid cause. The burden of proof
rests on the employer to prove that the dismissal was valid, failing in which, the law considers the matter a case of illegal
dismissal.35

Article 297 of the Labor Code, as renumbered,36 enumerates the just causes for termination of an employment, to wit: chanRoblesvirt ualLawlibrary

ART. 297. Termination by Employer. An employer may terminate an employment for any of the following causes: cralawlawlibrary

(a) Serious misconduct or willful disobedience by the employee of the lawful orders
of his employer or representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his
employer or duly authorized representative;
(d) Commission of a crime or offense by the employee against the person of his
employer or any immediate member of his family or his duly authorized
representatives; and
(e) Other causes analogous to the foregoing. (Emphases supplied)
In the case at bar, respondent's termination was grounded on his violation of petitioner's Code of Conduct and Behavior,
which was supposedly tantamount to (a) serious misconduct and/or (b) willful breach of the trust reposed in him by his

64
employer.

Misconduct is defined as an improper or wrong conduct. It is a transgression of some established and definite rule of
action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error
in judgment.37 For serious misconduct to be a just cause for dismissal, the concurrence of the following elements is
required: (a) the misconduct must be serious; (b) it must relate to the performance of the employee's duties showing that
the employee has become unfit to continue working for the employer; and (c) it must have been performed with wrongful
intent.38

On the other hand, for loss of trust to be a ground for dismissal, the employee must be holding a position of trust and
confidence, and there must be an act that would justify the loss of trust and confidence. 39While loss of trust and confidence
should be genuine, it does not require proof beyond reasonable doubt, it being sufficient that there is some basis for
the misconduct and that the nature of the employee's participation therein rendered him unworthy of the trust
and confidence demanded by his position.40

Petitioner's claims of serious misconduct and/or willful breach of trust against respondent was hinged on his alleged directive
to petitioner's Accounting Assistant, Del Rosario, to insert the word "OR CASH" in the checks payable to petitioner's
supplier/s after the same had been sigued by the authorized officers contrary to company policy. Accordingly, respondent
was accused of conspiring with his co-employees in the irregular issuance of twenty-seven (27) checks which supposedly
resulted in the defraudation of the company in the total amount of P1,021,561.72. 41 cralawred

While there is no denying that respondent holds a position of trust as he was charged with the overall day-to-day operations
of petitioner, and as such, is authorized to sign checks, check vouchers, and purchase orders, he argues, in defense, that he
had no control over the company's finance and billing operations, and hence, should not be held liable. Moreover, he asserts
that he had no power to instruct Del Rosario to make any check alterations, which changes, if any, must be made known to
Vasay or Buenaflor.

Although respondent's statements may be true, the Court, nonetheless, observes that it is highly unlikely that respondent did
not have any participation in the above-mentioned scheme to defraud petitioner. It is crucial to point out that the questioned
checks would not have been issued if there weren't any spurious purchase orders. As per company policy, the procurement
process of petitioner begins with the preparation of purchase orders by the Purchasing Officer, De Guzman. These purchase
orders have to be approved by respondent himself before the delivery and payment process can even
commence. It is only after the issuance of the approved purchase orders that petitioner's suppliers are directed to deliver
the ordered goods/supplies, and from there, requests for payment and the issuance of checks (through Del Rosario) would
be made. Thus, being the approving authority of these spurious purchase orders, respondent cannot disclaim any culpability
in the resultant issuance of the questioned checks. Clearly, without the approved purchase orders, there would be no delivery
of goods/supplies to petitioner, and consequently, the payment procedure would not even begin. These purchase orders
were, in fact, missing from the records, and respondent, who had the primary authority for their approval, did not, in any
manner, account for them.

Notably, the fact that respondent signed the checks prior to their alterations does not discount his participation. To recall, the
checks prepared by Del Rosario were first reviewed by her immediate supervisor, Finance Manager and Chief Finance Officer,
Vasay, and once approved, the check vouchers and corresponding checks were signed by respondent, followed by either
Vasay, or Vice President for Operations Buenaflor. To safeguard itself against fraud, the company implemented the policy
that all checks to its suppliers should be issued in their name and not in "cash." Thus, if the checks would be altered prior to
the signing of all these corporate officers, then they would obviously not pass petitioner's protocol. It is therefore reasonable
to conclude that the alterations were calculated to be made after all the required signatures were obtained; otherwise, the
scheme would not come into fruition.

Respondent was directly implicated in the controversy through the extrajudicial confession of his co-employee, Del Rosario,
who had admitted to be the author of the checks' alterations, although mentioned that she did so only upon respondent's
imprimatur. The NLRC, as affirmed by the CA, however, deemed the same to be inadmissible in evidence on account of
the res inter alios acta rule, which, as per Section 30,42 Rule 130 of the Rules of Court, provides that the rights of a party
cannot be prejudiced by an act, declaration, or omission of another. Consequently, an extrajudicial confession is binding only
on the confessant and is not admissible against his or her co-accused because it is considered as hearsay against
them.43

However, the NLRC should not have bound itself by the technical rules of procedure as it is allowed to be liberal in the
application of its rules in deciding labor cases.44 The NLRC Rules of Procedure state that "[t]he rules of procedure and
evidence prevailing in courts of law and equity shall not be controlling and the Commission shall use every and all reasonable
means to ascertain the facts in each case speedily and objectively, without regard to technicalities of law or procedure x x
x."45

In any case, even if it is assumed that the rule on res inter alios acta were to apply in this illegal dismissal case, the
treatment of the extrajudicial confession as hearsay is bound by the exception on independently relevant statements. "Under
the doctrine of independently relevant statements, regardless of their truth or falsity, the fact that such statements have
been made is relevant. The hearsay rule does not apply, and the statements are admissible as evidence. Evidence as to the
making of such statement is not secondary but primary, for the statement itself may constitute a fact in issue or be
circumstantially relevant as to the existence of such a fact." 46 Verily, Del Rosario's extrajudicial confession is independently
relevant to prove the participation of respondent in the instant controversy considering his vital role in petitioner's
procurement process. The fact that such statement was made by Del Rosario, who was the actual author of the alterations,
should have been given consideration by the NLRC as it is directly, if not circumstantially, relevant to the issue at hand.

Case law states that "labor suits require only substantial evidence to prove the validity of the dismissal." 47 Based on the
foregoing, the Court is convinced that enough substantial evidence exist to support petitioner's claim that respondent was
involved in the afore-discussed scheme to defraud the company, and hence, guilty of serious misconduct and/or willful
breach of trust which are just causes for his termination. Substantial evidence is defined as such amount of relevant evidence
that a reasonable mind might accept as adequate to justify a conclusion, 48 which evidentiary threshold petitioner successfully
hurdled in this case. As such, the NLRC gravely abused its discretion in holding that respondent was illegally dismissed.
Perforce, the reversal of the CA's decision and the granting of the instant petition are in order. Respondent is hereby declared

65
to be validly dismissed and thus, is not entitled to backwages, separation pay, as well as attorney's fees.

WHEREFORE, the petition is GRANTED. The Decision dated November 3, 2015 and the Resolution dated February 9, 2016,
of the Court of Appeals in CA-G.R. SP No. 139652 are hereby REVERSED and SET ASIDE.

SO ORDERED.

Sereno, C.J., (Chairperson), Leonardo-De Castro, Bersamin, and Caguioa, JJ., concur.

Endnotes:

Rollo, pp. 20-61.

1

2
Id. at 64 71. Penned by Associate Justice Agnes Reyes-Carpio with Associate Justices Romeo F. Barza and Elihu A. Ybañez
concurring.

3
Id. at 72-73.

4
CA rollo, pp. 49 53. Penned by Commissioner Pablo C. Espiritu, Jr. with Presiding Commissioner Alex A. Lopez concurring.

5
Id. at 54 55.

6
Id. at 6.

7
See id. at 103.

8
See id. at 133.

9
Id. at 7.

10
Id. at 8.

11
See id. at 8 and 51.

12
Id. at 56-57.

13
Id. at 60.

14
Id. at 10-11.

15
See Sinumpaang Salaysay dated January 15, 2014; id. at 132-138.

16
Id. at 96-99.

17
Id. at 378-379.

18
See Complaint-Affidavit dated October 11, 2013; id. at 246-260.

19
Id. at 124-125.

20
Id. at 126-128.

Id. at 339-345. Signed by Assistant City Prosecutor Donabelle V. Gonzalez, Senior Assistant City Prosecutor Leopoldo B.
21

Macinas, and City Prosecutor Aileen Marie S. Gutierrez.

22
Resolution dated February 4, 2015; id. at 261-264. Signed by Senior Assistant City Prosecutor Leopoldo B. Macinas and
approved by City Prosecutor Aileen Marie S. Gutierrez.

23
Id. at 265-267. Signed by Senior Assistant City Prosecutor Tomas Ken D. Romaquin, Jr.

24
See rollo, p. 65.

25
See CA rollo, p. 51.

26
Id. at 49-53.

27
Id. at 51-53.

28
Dated December 17, 2014; id. at 301-314.

29
Id. at 54-55.

30
Id. at 3-48.

31
Rollo, pp. 64-71.

32
Id. at 67-71.

66
33
Dated March 20, 2015; CA rollo, pp. 449-456.

34
Rollo, pp. 72-73.

35
Surigao Del Norte Electric Cooperative, Inc. v. Gonzaga, 710 Phil. 676, 687 (2013).

36
See Department of Labor and Employment's Department Advisory No. 1, Series of 2015, entitled "RENUMBERING OF THE
LABOR CODE OF THE PHILIPPINES, AS AMENDED," dated July 21, 2015.

37
Imasen Philippine Manufacturing Corporation v. Alcon, G.R. No. 194884, October 22, 2014, 739 SCRA 186, 196.

38
See Universal Robina Sugar Milling Corporation v. Ablay, G.R. No. 218172, March 16, 2016.

39
Jerusalem v. Keppel Monte Bank, 662 Phil. 676, 686 (2011).

40
P.J. Lhuillier, Inc. v. Velayo, G.R. No. 198620, November 12, 2014, 740 SCRA 147, 162.

41
Rollo, p. 27.

SEC. 30. Admission by conspirator. - The act or declaration of a conspirator relating to the conspiracy and during its
42

existence, may be given in evidence against the co-conspirator after the conspiracy is shown by evidence other than such act
or declaration.

43
People v. Cachuela, 710 Phil. 728, 741 (2013).

44
Opinaldo v. Ravina, 719 Phil. 584, 598 (2013).

45
Id., citing Section 10, Rule VII of the 2011 NLRC Rules of Procedure.

46
People v. Estibal, G.R. No. 208749, November 26, 2014, 743 SCRA 215, 240.

47
Paulino v. NLRC, 687 Phil. 220,226 (2012).

48
Travelaire & Tours Corp v. NLRC, 355 Phil. 932, 936 (1998).

67