Association of the Philippines (FASAP), a labor

PATRICIA HALAGUEA, MA. ANGELITA L. G.R. No. 172013 organization certified as the sole and exclusive
PULIDO, MA. TERESITA P. SANTIAGO, certified as the sole and exclusive bargaining
MARIANNE V. KATINDIG, Present: representative of the flight attendants, flight stewards
BERNADETTE A. CABALQUINTO, and pursers of respondent.
LORNA B. TUGAS, MARY CHRISTINE A.
YNARES-SANTIAGO, J.,
VILLARETE, CYNTHIA A. STEHMEIER, On July 11, 2001, respondent and FASAP entered into
Chairperson,
ROSE ANNA G. VICTA, NOEMI R. a Collective Bargaining Agreement[3] incorporating the
CHICO-NAZARIO,
CRESENCIO, and other flight attendants of terms and conditions of their agreement for the years
VELASCO, JR.,
PHILIPPINE AIRLINES, 2000 to 2005, hereinafter referred to as PAL-FASAP
NACHURA, and
Petitioners, CBA.
PERALTA, JJ.
- versus - Section 144, Part A of the PAL-FASAP CBA, provides
that:
PHILIPPINE AIRLINES INCORPORATED, A. For the Cabin Attendants hired before 22
Respondent. November 1996:
xxxx
Promulgated:
3. Compulsory Retirement

Subject to the grooming standards provisions

of this Agreement, compulsory retirement shall
be fifty-five (55) for females and sixty (60) for
males. x x x.
October 2, 2009

x-------------------------------------------------- In a letter dated July 22, 2003,[4] petitioners and several female cabin
x crews manifested that the aforementioned CBA provision on
compulsory retirement is discriminatory, and demanded for an equal
treatment with their male counterparts. This demand was reiterated in
DECISION a letter[5] by petitioners' counsel addressed to respondent demanding
the removal of gender discrimination provisions in the coming re-
PERALTA, J.: negotiations of the PAL-FASAP CBA.

Before this Court is a petition for review on certiorari under Rule 45 of
the Rules of Court seeking to annul and set aside the Decision[1] and
the Resolution[2] of the Court of Appeals (CA) in CA-G.R. SP. No.
86813.
Petitioners were employed as female flight attendants of respondent
Philippine Airlines (PAL) on different dates prior to November 22,
1996. They are members of the Flight Attendants and Stewards
On July 12, 2004, Robert D. Anduiza, President of FASAP submitted
their 2004-2005 CBA proposals[6] and manifested their willingness to
commence the collective bargaining negotiations between the
management and the association, at the soonest possible time.
1
On July 29, 2004, petitioners filed a Special Civil Action for
Declaratory Relief with Prayer for the Issuance of Temporary
Restraining Order and Writ of Preliminary Injunction[7] with the
Regional Trial Court (RTC) of Makati City, Branch 147, docketed as
Civil Case No. 04-886, against respondent for the invalidity of Section
144, Part A of the PAL-FASAP CBA. The RTC set a hearing on
petitioners' application for a TRO and, thereafter, required the parties
to submit their respective memoranda.
On August 9, 2004, the RTC issued an Order[8] upholding its
jurisdiction over the present case. The RTC reasoned that:
In the instant case, the thrust of the Petition is Sec.
144 of the subject CBA which is allegedly
discriminatory as it discriminates against female flight
attendants, in violation of the Constitution, the Labor
Code, and the CEDAW. The allegations in the Petition
do not make out a labor dispute arising from employer-
employee relationship as none is shown to exist. This
case is not directed specifically against respondent
arising from any act of the latter, nor does it involve a
claim against the respondent. Rather, this case seeks
a declaration of the nullity of the questioned provision
of the CBA, which is within the Court's competence,
with the allegations in the Petition constituting the
bases for such relief sought.
The RTC issued a TRO on August 10, 2004,[9] enjoining the
respondent for implementing Section 144, Part A of the PAL-FASAP
CBA.
The respondent filed an omnibus motion[10] seeking reconsideration of
the order overruling its objection to the jurisdiction of the RTC the
lifting of the TRO. It further prayed that the (1) petitioners' application
for the issuance of a writ of preliminary injunction be denied; and (2)
the petition be dismissed or the proceedings in this case be
suspended.
On September 27, 2004, the RTC issued an Order[11] directing the
issuance of a writ of preliminary injunction enjoining the respondent or
any of its agents and representatives from further implementing Sec.
144, Part A of the PAL-FASAP CBA pending the resolution of the
case.
Aggrieved, respondent, on October 8, 2004, filed a Petition for
Certiorari and Prohibition with Prayer for a Temporary Restraining
Order and Writ of Preliminary Injunction[12] with the Court of Appeals
(CA) praying that the order of the RTC, which denied its objection to
its jurisdiction, be annuled and set aside for having been issued
without and/or with grave abuse of discretion amounting to lack of
jurisdiction.
The CA rendered a Decision, dated August 31, 2005, granting the
respondent's petition, and ruled that:
WHEREFORE, the respondent court is by us declared
to have NO JURISDICTION OVER THE CASE BELOW
and, consequently, all the proceedings, orders and
processes it has so far issued therein are ANNULED
and SET ASIDE. Respondent court is ordered to
DISMISS its Civil Case No. 04-886.
SO ORDERED.
Petitioner filed a motion for reconsideration,[13] which was denied by
the CA in its Resolution dated March 7, 2006.
Hence, the instant petition assigning the following error:
THE COURT OF APPEALS' CONCLUSION THAT THE
SUBJECT MATTER IS A LABOR DISPUTE OR
GRIEVANCE IS CONTRARY TO LAW AND
JURISPRUDENCE.
The main issue in this case is whether the RTC has jurisdiction over
the petitioners' action challenging the legality or constitutionality of the
provisions on the compulsory retirement age contained in the CBA
between respondent PAL and FASAP.
Petitioners submit that the RTC has jurisdiction in all civil actions in
which the subject of the litigation is incapable of pecuniary estimation
and in all cases not within the exclusive jurisdiction of any court,
2
tribunal, person or body exercising judicial or quasi-judicial functions.
The RTC has the power to adjudicate all controversies except those
expressly witheld from the plenary powers of the court. Accordingly, it
has the power to decide issues of constitutionality or legality of the
provisions of Section 144, Part A of the PAL-FASAP CBA. As the
issue involved is constitutional in character, the labor arbiter or the
National Labor Relations Commission (NLRC) has no jurisdiction over
the case and, thus, the petitioners pray that judgment be rendered on
the merits declaring Section 144, Part A of the PAL-FASAP CBA null
and void.
Respondent, on the other hand, alleges that the labor tribunals have
jurisdiction over the present case, as the controversy partakes of a
labor dispute. The dispute concerns the terms and conditions of
petitioners' employment in PAL, specifically their retirement age. The
RTC has no jurisdiction over the subject matter of petitioners' petition
for declaratory relief because the Voluntary Arbitrator or panel of
Voluntary Arbitrators have original and exclusive jurisdiction to hear
and decide all unresolved grievances arising from the interpretation or
implementation of the CBA. Regular courts have no power to set and
fix the terms and conditions of employment. Finally, respondent
alleged that petitioners' prayer before this Court to resolve their
petition for declaratory relief on the merits is procedurally improper
and baseless.
The petition is meritorious.
Jurisdiction of the court is determined on the basis of the material
allegations of the complaint and the character of the relief prayed for
irrespective of whether plaintiff is entitled to such relief.[14]
In the case at bar, the allegations in the petition for declaratory relief
plainly show that petitioners' cause of action is the annulment of
Section 144, Part A of the PAL-FASAP CBA. The pertinent portion of
the petition recites:
CAUSE OF ACTION
24. Petitioners have the constitutional right to
fundamental equality with men under Section 14,
Article II, 1987 of the Constitution and, within the
specific context of this case, with the male cabin
attendants of Philippine Airlines.
26. Petitioners have the statutory right to equal work
and employment opportunities with men under Article
3, Presidential Decree No. 442, The Labor Code and,
within the specific context of this case, with the male
cabin attendants of Philippine Airlines.
27. It is unlawful, even criminal, for an employer to
discriminate against women employees with respect to
terms and conditions of employment solely on account
of their sex under Article 135 of the Labor Code as
amended by Republic Act No. 6725 or the Act
Strengthening Prohibition on Discrimination Against
Women.
28. This discrimination against Petitioners is likewise
against the Convention on the Elimination of All Forms
of Discrimination Against Women (hereafter, CEDAW),
a multilateral convention that the Philippines ratified in
1981. The Government and its agents, including our
courts, not only must condemn all forms of
discrimination against women, but must also
implement measures towards its elimination.
29. This case is a matter of public interest not only
because of Philippine Airlines' violation of the
Constitution and existing laws, but also because it
highlights the fact that twenty-three years after the
Philippine Senate ratified the CEDAW, discrimination
against women continues.
31. Section 114, Part A of the PAL-FASAP 2000-
20005 CBA on compulsory retirement from service is
invidiously discriminatory against and manifestly
prejudicial to Petitioners because, they are compelled
to retire at a lower age (fifty-five (55) relative to their
male counterparts (sixty (60).
33. There is no reasonable, much less lawful, basis for
Philippine Airlines to distinguish, differentiate or
3
 classify cabin attendants on the basis of sex and
thereby arbitrarily set a lower compulsory retirement
age of 55 for Petitioners for the sole reason that they
are women.
37. For being patently unconstitutional and unlawful,
Section 114, Part A of the PAL-FASAP 2000-2005
CBA must be declared invalid and stricken down to the
extent that it discriminates against petitioner.
38. Accordingly, consistent with the constitutional and
statutory guarantee of equality between men and
women, Petitioners should be adjudged and declared
entitled, like their male counterparts, to work until they
are sixty (60) years old.
PRAYER
WHEREFORE, it is most respectfully prayed that the
Honorable Court:
c. after trial on the merits:
(I) declare Section 114, Part A of the
PAL-FASAP 2000-2005 CBA INVALID,
NULL and VOID to the extent that it
discriminates against Petitioners; x x x x
From the petitioners' allegations and relief prayed for in its petition, it
is clear that the issue raised is whether Section 144, Part A of the
PAL-FASAP CBA is unlawful and unconstitutional. Here, the
petitioners' primary relief in Civil Case No. 04-886 is the annulment of
Section 144, Part A of the PAL-FASAP CBA, which allegedly
discriminates against them for being female flight attendants. The
subject of litigation is incapable of pecuniary estimation, exclusively
cognizable by the RTC, pursuant to Section 19 (1) of Batas
Pambansa Blg. 129, as amended.[15] Being an ordinary civil action, the
same is beyond the jurisdiction of labor tribunals.
The said issue cannot be resolved solely by applying the Labor Code.
Rather, it requires the application of the Constitution, labor statutes,
law on contracts and the Convention on the Elimination of All Forms
of Discrimination Against Women,[16] and the power to apply and
interpret the constitution and CEDAW is within the jurisdiction of trial
courts, a court of general jurisdiction. In Georg Grotjahn GMBH & Co.
v. Isnani,[17] this Court held that not every dispute between an
employer and employee involves matters that only labor arbiters and
the NLRC can resolve in the exercise of their adjudicatory or quasi-
judicial powers. The jurisdiction of labor arbiters and the NLRC under
Article 217 of the Labor Code is limited to disputes arising from an
employer-employee relationship which can only be resolved by
reference to the Labor Code, other labor statutes, or their collective
bargaining agreement.
Not every controversy or money claim by an employee against the
employer or vice-versa is within the exclusive jurisdiction of the labor
arbiter. Actions between employees and employer where the
employer-employee relationship is merely incidental and the cause of
action precedes from a different source of obligation is within the
exclusive jurisdiction of the regular court.[18] Here, the employer-
employee relationship between the parties is merely incidental and
the cause of action ultimately arose from different sources of
obligation, i.e., the Constitution and CEDAW.
Thus, where the principal relief sought is to be resolved not by
reference to the Labor Code or other labor relations statute or a
collective bargaining agreement but by the general civil law, the
jurisdiction over the dispute belongs to the regular courts of justice
and not to the labor arbiter and the NLRC. In such situations,
resolution of the dispute requires expertise, not in labor management
relations nor in wage structures and other terms and conditions of
employment, but rather in the application of the general civil law.
Clearly, such claims fall outside the area of competence or expertise
ordinarily ascribed to labor arbiters and the NLRC and the rationale
for granting jurisdiction over such claims to these agencies
disappears.[19]
If We divest the regular courts of jurisdiction over the case, then which
tribunal or forum shall determine the constitutionality or legality of the
assailed CBA provision?
4

This Court holds that the grievance machinery and voluntary
arbitrators do not have the power to determine and settle the issues at
hand. They have no jurisdiction and competence to decide
constitutional issues relative to the questioned compulsory retirement
age. Their exercise of jurisdiction is futile, as it is like vesting power to
someone who cannot wield it.
In Gonzales v. Climax Mining Ltd.,[20] this Court affirmed the
jurisdiction of courts over questions on constitutionality of contracts,
as the same involves the exercise of judicial power. The Court said:
Whether the case involves void or voidable contracts is
still a judicial question. It may, in some instances,
involve questions of fact especially with regard to the
determination of the circumstances of the execution of
the contracts. But the resolution of the validity or
voidness of the contracts remains a legal or judicial
question as it requires the exercise of judicial
function. It requires the ascertainment of what laws are
applicable to the dispute, the interpretation and
application of those laws, and the rendering of a
judgment based thereon. Clearly, the dispute is not a
mining conflict. It is essentially judicial. The complaint
was not merely for the determination of rights under the
mining contracts since the very validity of those
contracts is put in issue.
In Saura v. Saura, Jr.,[21] this Court emphasized the primacy of the
regular court's judicial power enshrined in the Constitution that is true
that the trend is towards vesting administrative bodies like the SEC
with the power to adjudicate matters coming under their particular
specialization, to insure a more knowledgeable solution of the
problems submitted to them. This would also relieve the
regular courts of a substantial number of cases that would otherwise
swell their already clogged dockets. But as expedient as this policy
may be, it should not deprive the courts of justice of their power
to decide ordinary cases in accordance with the general laws
that do not require any particular expertise or training to interpret
and apply. Otherwise, the creeping take-over by the
administrative agencies of the judicial power vested in the courts
would render the judiciary virtually impotent in the discharge of
the duties assigned to it by the Constitution.
To be sure, in Rivera v. Espiritu,[22] after Philippine Airlines (PAL) and
PAL Employees Association (PALEA) entered into an agreement,
which includes the provision to suspend the PAL-PALEA CBA for 10
years, several employees questioned its validity via a petition for
certiorari directly to the Supreme Court. They said that the suspension
was unconstitutional and contrary to public policy. Petitioners submit
that the suspension was inordinately long, way beyond the maximum
statutory life of 5 years for a CBA provided for in Article 253-A of the
Labor Code. By agreeing to a 10-year suspension, PALEA, in effect,
abdicated the workers' constitutional right to bargain for another CBA
at the mandated time.
In that case, this Court denied the petition for certiorari, ruling that
there is available to petitioners a plain, speedy, and adequate remedy
in the ordinary course of law. The Court said that while the petition
was denominated as one for certiorari and prohibition, its object was
actually the nullification of the PAL-PALEA agreement. As such,
petitioners' proper remedy is an ordinary civil action for annulment of
contract, an action which properly falls under the jurisdiction of the
regional trial courts.
The change in the terms and conditions of employment, should
Section 144 of the CBA be held invalid, is but a necessary and
unavoidable consequence of the principal relief sought, i.e.,
nullification of the alleged discriminatory provision in the CBA. Thus, it
does not necessarily follow that a resolution of controversy that would
bring about a change in the terms and conditions of employment is a
labor dispute, cognizable by labor tribunals. It is unfair to preclude
petitioners from invoking the trial court's jurisdiction merely because it
may eventually result into a change of the terms and conditions of
employment. Along that line, the trial court is not asked to set and fix
the terms and conditions of employment, but is called upon to
determine whether CBA is consistent with the laws.
Although the CBA provides for a procedure for the adjustment of
grievances, such referral to the grievance machinery and thereafter to
voluntary arbitration would be inappropriate to the petitioners,
because the union and the management have unanimously agreed to
the terms of the CBA and their interest is unified.
5

In Pantranco North Express, Inc., v. NLRC,[23] this Court held that:
x x x Hence, only disputes involving the union and the
company shall be referred to the grievance machinery
or voluntary arbitrators.
In the instant case, both the union and the company
are united or have come to an agreement regarding
the dismissal of private respondents. No grievance
between them exists which could be brought to a
grievance machinery. The problem or dispute in the
present case is between the union and the company
on the one hand and some union and non-union
members who were dismissed, on the other hand. The
dispute has to be settled before an impartial body. The
grievance machinery with members designated by the
union and the company cannot be expected to be
impartial against the dismissed employees. Due
process demands that the dismissed workers
grievances be ventilated before an impartial body. x x
x.
Applying the same rationale to the case at bar, it
cannot be said that the "dispute" is between the union
and petitioner company because both have previously
agreed upon the provision on "compulsory retirement"
as embodied in the CBA. Also, it was only private
respondent on his own who questioned the
compulsory retirement. x x x.
In the same vein, the dispute in the case at bar is not between FASAP
and respondent PAL, who have both previously agreed upon the
provision on the compulsory retirement of female flight attendants as
embodied in the CBA. The dispute is between respondent PAL and
several female flight attendants who questioned the provision on
compulsory retirement of female flight attendants. Thus, applying the
principle in the aforementioned case cited, referral to the grievance
machinery and voluntary arbitration would not serve the interest of the
petitioners.
Besides, a referral of the case to the grievance machinery and to the
voluntary arbitrator under the CBA would be futile because
respondent already implemented Section 114, Part A of PAL-FASAP
CBA when several of its female flight attendants reached the
compulsory retirement age of 55.
Further, FASAP, in a letter dated July 12, 2004, addressed to PAL,
submitted its association's bargaining proposal for the remaining
period of 2004-2005 of the PAL-FASAP CBA, which includes the
renegotiation of the subject Section 144. However, FASAP's attempt
to change the questioned provision was shallow and superficial, to
say the least, because it exerted no further efforts to pursue its
proposal. When petitioners in their individual capacities questioned
the legality of the compulsory retirement in the CBA before the trial
court, there was no showing that FASAP, as their representative,
endeavored to adjust, settle or negotiate with PAL for the removal of
the difference in compulsory age retirement between its female and
male flight attendants, particularly those employed before November
22, 1996. Without FASAP's active participation on behalf of its female
flight attendants, the utilization of the grievance machinery or
voluntary arbitration would be pointless.
The trial court in this case is not asked to interpret Section 144, Part A
of the PAL-FASAP CBA. Interpretation, as defined in Black's Law
Dictionary, is the art of or process of discovering and ascertaining the
meaning of a statute, will, contract, or other written document.[24] The
provision regarding the compulsory retirement of flight attendants is
not ambiguous and does not require interpretation. Neither is there
any question regarding the implementation of the subject CBA
provision, because the manner of implementing the same is clear in
itself. The only controversy lies in its intrinsic validity.
Although it is a rule that a contract freely entered between the parties
should be respected, since a contract is the law between the parties,
said rule is not absolute.
In Pakistan International Airlines Corporation v. Ople,[25] this Court
held that:
The principle of party autonomy in contracts is not,
however, an absolute principle. The rule in Article
1306, of our Civil Code is that the contracting parties
may establish such stipulations as they may deem
6
 convenient, provided they are not contrary to law,
morals, good customs, public order or public policy.
Thus, counter-balancing the principle of autonomy of
contracting parties is the equally general rule that
provisions of applicable law, especially provisions
relating to matters affected with public policy, are
deemed written into the contract. Put a little differently,
the governing principle is that parties may not contract
away applicable provisions of law especially
peremptory provisions dealing with matters heavily
impressed with public interest. The law relating to labor
and employment is clearly such an area and parties
are not at liberty to insulate themselves and their
relationships from the impact of labor laws and
regulations by simply contracting with each other.
Moreover, the relations between capital and labor are not merely
contractual. They are so impressed with public interest that
labor contracts must yield to the common good.x x x [26] The
supremacy of the law over contracts is explained by the fact that labor
contracts are not ordinary contracts; these are imbued with public
interest and therefore are subject to the police power of the state.[27] It
should not be taken to mean that retirement provisions agreed upon in
the CBA are absolutely beyond the ambit of judicial review and
nullification. A CBA, as a labor contract, is not merely contractual in
nature but impressed with public interest. If the retirement provisions
in the CBA run contrary to law, public morals, or public policy, such
provisions may very well be voided.[28]
generally limited only to questions of law which must be distinctly set
forth in the petition. The Supreme Court is not a trier of facts.[29]
The question as to whether said Section 114, Part A of the PAL-
FASAP CBA is discriminatory or not is a question of fact. This would
require the presentation and reception of evidence by the parties in
order for the trial court to ascertain the facts of the case and whether
said provision violates the Constitution, statutes and treaties. A full-
blown trial is necessary, which jurisdiction to hear the same is
properly lodged with the the RTC. Therefore, a remand of this case to
the RTC for the proper determination of the merits of the petition for
declaratory relief is just and proper.
WHEREFORE, the petition is PARTLY GRANTED. The Decision and
Resolution of the Court of Appeals, dated August 31, 2005 and March
7, 2006, respectively, in CA-G.R. SP. No. 86813
are REVERSED and SET ASIDE. The Regional Trial Court of Makati
City, Branch 147 is DIRECTED to continue the proceedings in Civil
Case No. 04-886 with deliberate dispatch.
SO ORDERED.

Finally, the issue in the petition for certiorari brought before the CA by
the respondent was the alleged exercise of grave abuse of discretion
of the RTC in taking cognizance of the case for declaratory relief.
When the CA annuled and set aside the RTC's order, petitioners
sought relief before this Court through the instant petition for review
under Rule 45. A perusal of the petition before Us, petitioners pray for
the declaration of the alleged discriminatory provision in the CBA
against its female flight attendants.

This Court is not persuaded. The rule is settled that pure questions
of fact may not be the proper subject of an appeal by certiorari
under Rule 45 of the Revised Rules of Court. This mode of appeal is

7
[G.R. No. 112139. January 31, 2000]
LAPANDAY AGRICULTURAL DEVELOPMENT CORPORATION,
petitioner, vs. THE HONORABLE COURT OF APPEALS (Former
Eighth Division) and COMMANDO SECURITY SERVICE AGENCY,
INC., respondents.
DECISION
GONZAGA-REYES, J.:
Before us is a Petition for Review on Certiorari of the decision[1] of
the Court of Appeals[2] in CA-G.R. CV No. 33893 entitled
COMMANDO SECURITY SERVICE AGENCY, INCORPORATED vs.
LAPANDAY AGRICULTURAL DEVELOPMENT CORPORATION
which affirmed the decision[3] of the Regional Trial Court, 11th
Judicial Region, Branch 9, Davao City in Civil Case No. 19203-88.
The pertinent facts as found by the Court of Appeals are as follows:
"The evidence shows that in June 1986, plaintiff Commando Security
Service Agency, Inc., and defendant Lapanday Agricultural
Development Corporation entered into a Guard Service Contract.
Plaintiff provided security guards in defendants banana plantation.
The contract called for the payment to a guard of P754.28 on a daily
8-hour basis and an additional P565.72 for a four hour overtime while
the shift-in-charge was to be paid P811.40 on a daily 8-hour basis and
P808.60 for the 4-hour overtime.
Wage Orders increasing the minimum wage in 1983 were complied
with by the defendant. On June 16, 1984, Wage Order No. 5 was
promulgated directing an increase of P3.00 per day on the minimum
wage of workers in the private sector and a P5.00 increase on the
ECOLA. This was followed on November 1, 1984 by Wage Order No.
6 which further increased said minimum wage by P3.00 on the
ECOLA. Both Wage Orders contain the following provision:
"In the case of contract for construction projects and for security,
janitorial and similar services, the increase in the minimum wage and
allowances rates of the workers shall be borne by the principal or
client of the construction/service contractor and the contracts shall be
deemed amended accordingly, subject to the provisions of Sec. 3 (b)
of this order" (Sec. 6 and Sec. 9, Wage Orders No. 5 and 6,
respectively)."
Plaintiff demanded that its Guard Service Contract with defendant be
upgraded in compliance with Wage Order Nos. 5 and 6. Defendant
refused. Their Contract expired on June 6, 1986 without the rate
adjustment called for Wage Order Nos. 5 and 6 being implemented.
By the time of the filing of plaintiffs Complaint, the rate adjustment
payable by defendant amounted to P462,346.25. Defendant opposed
the Complaint by raising the following defenses: (1) the rate
adjustment is the obligation of the plaintiff as employer of the security
guards; (2) assuming its liability, the sum it should pay is less in
amount; and (3) the Wage Orders violate the impairment clause of the
Constitution.
The trial court decided in favor of the plaintiff. It held:
xxx
"However, in order for the security agency to pay the security guards,
the Wage Orders made specific provisions to amend existing
contracts for security services by allowing the adjustment of the
consideration paid by the principal to the security agency concerned.
(Eagle Security Agency, Inc. vs. NLRC, Phil. Tuberculosis Society,
Inc. vs. NLRC, et al., May 18, 1989).
The Wage Orders require the amendment of the contract as to the
consideration to cover the service contractors payment of the
increases mandated. However, in the case at bar, the contract for
security services had earlier been terminated without the
corresponding amendment. Plaintiff now demands adjustment in the
contract price as the same was deemed amended by Wage Order
Nos. 5 and 6.
Before the plaintiff could pay the minimum wage as mandated by law,
adjustments must be paid by the principal to the security agency
concerned.
"Given these circumstances, if PTS pays the security guards, it cannot
claim reimbursements from Eagle. But if its Eagle that pays them, the
8
latter can claim reimbursement from PTS in lieu of an adjustment,
considering that the contract had expired and had not been renewed.
(Eagle Security Agency vs. NLRC and Phil. Tuberculosis Society, Inc.
vs. NLRC, et al., 18 May 1989).
"As to the issue that Wage Orders Nos. 5 and 6 constitute
impairments of contracts in violation of constitutional guarantees, the
High Court ruled" The Supreme Court has rejected the impairment of
contract argument in sustaining the validity and constitutionality of
labor and social legislation like the Blue Sunday Law, compulsory
coverage of private sector employees in the Social Security System,
and the abolition of share tenancy enacted pursuant to the police
power of the state (Eagle Security Agency, Inc. vs. National Labor
Relation Commission and Phil. Tuberculosis Society, Inc. vs. NLRC,
et al., May 18, 1989)."
Petitioners motion for reconsideration was denied;[4] hence this
petition where petitioner cites the following grounds to support the
instant petition for review:
"1. THE WAGE INCREASES PROVIDED FOR IN THE WAGE
ORDERS WERE DUE TO THE GUARDS AND NOT THE SECURITY
AGENCY;
2. A SECURITY AGENCY WHO DID NOT PAY WAGE INCREASE
TO ITS GUARDS IT HAD ALREADY TERMINATED AND WITHOUT
THEIR AUTHORIZATION CANNOT INSTITUTE AN ACTION TO
RECOVER SAID WAGE INCREASE FOR ITS BENEFIT;
3. IN THE ABSENCE OF BAD FAITH AND WITHOUT THE TRIAL
COURT CORRECTLY ESTABLISHING THE BASIS FOR
ATTORNEYS FEES, THE SAME MAY NOT BE AWARDED.
4. THE NATIONAL LABOR RELATIONS (SIC) IS THE PROPER
FORUM THAT HAS THE JURISDICTION TO RESOLVE THE ISSUE
OF WHETHER OR NOT THE PETITIONER IS LIABLE TO PAY THE
PRIVATE RESPONDENT THE WAGE AND ALLOWANCE
INCREASES MANDATED UNDER WAGE ORDER NOS. 5 AND
6."[5]
Reiterating its position below, petitioner asserts that private
respondent has no factual and legal basis to collect the benefits under
subject Wage Order Nos. 5 and 6 intended for the security guards
without the authorization of the security guards concerned. Inasmuch
as the services of the forty-two (42) security guards were already
terminated at the time the complaint was filed on August 15, 1988,
private respondents complaint partakes of the nature of an action for
recovery of what was supposedly due the guards under said Wage
Orders, amounts that they claim were never paid by private
respondent and therefore not collectible by the latter from the
petitioner. Petitioner also assails the award of attorneys fees in the
amount of P115,585.31 or 25% of the total adjustment claim of
P462,341.25 for lack of basis and for being unconscionable.
Moreover, petitioner submits that it is the National Labor Relations
Commission (NLRC) and not the civil courts that has jurisdiction to
resolve the issue involved in this case for it refers to the enforcement
of wage adjustment and other benefits due to private respondents
security guards mandated under Wage Order Nos. 5 and 6.
Considering that the RTC has no jurisdiction, its decision is without
force and effect.[6]
On the other hand, private respondent contends that the basis of its
action against petitioner-appellant is the enforcement of the Guard
Service Contract entered into by them, which is deemed amended by
Section 6 of Wage Order No. 5 and Section 9 of Wage Order No. 6;
that pursuant to their amended Guard Service Contract, the
increases/adjustments in wages and ECOLA are due to private
respondent and not to the security guards who are not parties to the
said contract. It is therefore immaterial whether or not private
respondent paid its security guards their wages as adjusted by said
Wage Orders and that since the forty-two (42) security guards are not
parties to the Guard Service Contract, there is no need for them to
authorize the filing of, or be joined in, this suit.
As regards the award to private respondent of the amount of
P115,585.31 as attorneys fees, private respondent maintains that
there is enough evidence and/or basis for the grant thereof,
considering that the adamant attitude of the petitioner (in
implementing the questioned Wage Orders) compelled the herein
private respondent, to litigate in court. Furthermore, since the legal fee
9
payable by private respondent to its counsel is essentially on
contingent basis, the amount of P115,583.31 granted by the trial court
which is 25% of the total claim is not unconscionable.
As regards the jurisdiction of the RTC, private respondent alleges that
the suit filed before the trial court is for the purpose of securing the
upgrading of the Guard Service Contract entered into by herein
petitioner and private respondent in June 1983. The enforcement of
this written contract does not fall under the jurisdiction of the NLRC
because the money claims involved therein did not arise from
employer-employee relations between the parties and is intrinsically a
civil dispute. Thus, jurisdiction lies with the regular courts. Private
respondent further contends that petitioner is estopped or barred from
raising the question of jurisdiction for the first time before the Supreme
Court after having voluntarily submitted to the jurisdiction of the
regular courts below and having lost its case therein.[7]
We resolve to grant the petition.
We resolve first the issue of jurisdiction. We agree with the
respondent that the RTC has jurisdiction over the subject matter of the
present case. It is well settled in law and jurisprudence that where no
employer-employee relationship exists between the parties and no
issue is involved which may be resolved by reference to the Labor
Code, other labor statutes or any collective bargaining agreement, it is
the Regional Trial Court that has jurisdiction.[8] In its complaint,
private respondent is not seeking any relief under the Labor Code but
seeks payment of a sum of money and damages on account of
petitioners alleged breach of its obligation under their Guard Service
Contract. The action is within the realm of civil law hence jurisdiction
over the case belongs to the regular courts.[9] While the resolution of
the issue involves the application of labor laws, reference to the labor
code was only for the determination of the solidary liability of the
petitioner to the respondent where no employer-employee relation
exists. Article 217 of the Labor Code as amended vests upon the
labor arbiters exclusive original jurisdiction only over the following:
1. Unfair labor practices;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that
workers may file involving wages, rates of pay, hours of work and
other terms and conditions of employment;
4. Claims for actual, moral exemplary and other forms of damages
arising from employer-employee relations;
5. Cases arising from any violation of Article 264 of this Code,
including questions involving legality of strikes and lockouts; and
6. Except claims for Employees Compensation, Social Security,
Medicare and maternity benefits, all other claims, arising from
employer-employee relations, including those of persons in domestic
or household service, involving an amount exceeding five thousand
pesos (P5,000.00) regardless of whether accompanied with a claim
for reinstatement.
In all these cases, an employer-employee relationship is an
indispensable jurisdictional requisite;[10] and there is none in this
case.
On the merits, the core issue involved in the present petition is
whether or not petitioner is liable to the private respondent for the
wage adjustments provided under Wage Order Nos. 5 and 6 and for
attorneys fees.
Private respondent admits that there is no employer-employee
relationship between it and the petitioner. The private respondent is
an independent/job contractor[11] who assigned security guards at
the petitioners premises for a stipulated amount per guard per month.
The Contract of Security Services expressly stipulated that the
security guards are employees of the Agency and not of the
petitioner.[12] Articles 106 and 107 of the Labor Code provides the
rule governing the payment of wages of employees in the event that
the contractor fails to pay such wages as follows:
"Art. 106. Contractor or subcontractor. Whenever an employer enters
into a contract with another person for the performance of the formers
work, the employees of the contractor and of the latters subcontractor,
if any, shall be paid in accordance with the provisions of this Code.
10
In the event that the contractor or subcontractor fails to pay the wages
of his employees in accordance with this Code, the employer shall be
jointly and severally liable with his contractor or subcontractor to such
employees to the extent of the work performed under the contract, in
the same manner and extent that he is liable to employees directly
employed by him.
xxx
ART. 107. Indirect employer. The provisions of the immediately
preceding Article shall likewise apply to any person, partnership,
association or corporation which, not being an employer, contracts
with an independent contractor for the performance of any work, task,
job or project."
It will be seen from the above provisions that the principal (petitioner)
and the contractor (respondent) are jointly and severally liable to the
employees for their wages. This Court held in Eagle Security, Inc. vs.
NLRC[13] and Spartan Security and Detective Agency, Inc. vs.
NLRC[14] that the joint and several liability of the contractor and the
principal is mandated by the Labor Code to assure compliance with
the provisions therein including the minimum wage. The contractor is
made liable by virtue of his status as direct employer. The principal,
on the other hand, is made the indirect employer of the contractors
employees to secure payment of their wages should the contractor be
unable to pay them.[15] Even in the absence of an employer-
employee relationship, the law itself establishes one between the
principal and the employees of the agency for a limited purpose i.e. in
order to ensure that the employees are paid the wages due them. In
the above-mentioned cases, the solidary liability of the principal and
contractor was held to apply to the aforementioned Wage Order Nos.
5 and 6.[16] In ruling that under the Wage Orders, existing security
guard services contracts are amended to allow adjustment of the
consideration in order to cover payment of mandated increases, and
that the principal is ultimately liable for the said increases, this Court
stated:
"The Wage Orders are explicit that payment of the increases are to be
borne by the principal or client. To be borne, however, does not mean
that the principal, PTSI in this case, would directly pay the security
guards the wage and allowance increases because there is no privity
of contract between them. The security guards contractual
relationship is with their immediate employer, EAGLE. As an
employer, EAGLE is tasked, among others, with the payment of their
wages [See Article VII Sec. 3 of the Contract for Security Services,
supra and Bautista vs. Inciong, G. R. No. 52824, March 16, 1988, 158
SCRA 665].
On the other hand, there existed a contractual agreement between
PTSI and EAGLE wherein the former availed of the security services
provided by the latter. In return, the security agency collects from its
client payment for its security services. This payment covers the
wages for the security guards and also expenses for their supervision
and training, the guards bonds, firearms with ammunitions, uniforms
and other equipments, accessories, tools, materials and supplies
necessary for the maintenance of a security force.
Premises considered, the security guards immediate recourse for the
payment of the increases is with their direct employer, EAGLE.
However, in order for the security agency to comply with the new
wage and allowance rates it has to pay the security guards, the Wage
Orders made specific provision to amend existing contracts for
security services by allowing the adjustment of the consideration paid
by the principal to the security agency concerned. What the Wage
Orders require, therefore, is the amendment of the contracts as to the
consideration to cover the service contractors payment of the
increases mandated. In the end, therefore, ultimate liability for the
payment of the increases rests with the principal.
In view of the foregoing, the security guards should claim the amount
of the increases from EAGLE. Under the Labor Code, in case the
agency fails to pay them the amounts claimed, PTSI should be held
solidarily liable with EAGLE [Articles 106, 107 and 109]. Should
EAGLE pay, it can claim an adjustment from PTSI for an increase in
consideration to cover the increases payable to the security
guards."[17]
It is clear also from the foregoing that it is only when contractor pays
the increases mandated that it can claim an adjustment from the
principal to cover the increases payable to the security guards. The
conclusion that the right of the contractor (as principal debtor) to
recover from the principal as solidary co-debtor) arises only if he has
11
paid the amounts for which both of them are jointly and severally
liable is in line with Article 1217 of the Civil Code which provides:
"Art. 1217. Payment made by one of the solidary debtors extinguishes
the obligation. If two or more solidary debtors offer to pay, the creditor
may choose which offer to accept.
He who made payment may claim from his codebtors only the share
which corresponds to each, with interest for the payment already
made. If the payment is made before the debt is due, no interest for
the intervening period may be demanded. xxx"
Finally, considering that the private respondent has no cause of action
against the petitioner, private respondent is not entitled to attorneys
fees.
WHEREFORE, the petition is GRANTED. The decision of the Court of
Appeals dated May 24, 1993 is REVERSED and SET ASIDE. The
complaint of private respondent COMMANDO SECURITY SERVICE
AGENCY, INC. is hereby DISMISSED.
SO ORDERED.

Pursuant to the above provision, the right of reimbursement from a co-

debtor is recognized in favor of the one who paid.

It will be seen that the liability of the petitioner to reimburse the

respondent only arises if and when respondent actually pays its
employees the increases granted by Wage Order Nos. 5 and 6.
Payment, which means not only the delivery of money but also the
performance, in any other manner, of the obligation,[18] is the
operative fact which will entitle either of the solidary debtors to seek
reimbursement for the share which corresponds to each of the
debtors.

The records show that judgment was rendered by Labor Arbiter

Newton R. Sancho holding both petitioner and private respondent
jointly and solidarily liable to the security guards in a Decision[19]
dated October 17, 1986 (NLRC Case No. 2849-MC-XI-86).[20]
However, it is not disputed that the private respondent has not
actually paid the security guards the wage increases granted under
the Wage Orders in question. Neither is it alleged that there is an
extant claim for such wage adjustments from the security guards
concerned, whose services have already been terminated by the
contractor. Accordingly, private respondent has no cause of action
against petitioner to recover the wage increases. Needless to stress,
the increases in wages are intended for the benefit of the laborers and
the contractor may not assert a claim against the principal for salary
wage adjustments that it has not actually paid. Otherwise, as correctly
put by the respondent, the contractor would be unduly enriching itself
by recovering wage increases, for its own benefit.

12
G.R. No. 182295, June 26, 2013
7K CORPORATION, Petitioner, v. EDDIE ALBARICO, Respondent.
DECISION
SERENO, C.J.:
This is a Petition for Review on Certiorari filed under Rule 45 of the
Revised Rules of Court, asking the Court to determine whether a
voluntary arbitrator in a labor dispute exceeded his jurisdiction in
deciding issues not specified in the submission agreement of the
parties. It assails the Decision1 dated 18 September 2007 and the
Resolution2 dated 17 March 2008 of the Court of Appeals (CA).3
FACTS
When he was dismissed on 5 April 1993, respondent Eddie Albarico
(Albarico) was a regular employee of petitioner 7K Corporation, a
company selling water purifiers. He started working for the company
in 1990 as a salesman.4 Because of his good performance, his
employment was regularized. He was also promoted several times:
from salesman, he was promoted to senior sales representative and
then to acting team field supervisor. In 1992, he was awarded the
Presidents Trophy for being one of the companys top water purifier
specialist distributors. In April of 1993, the chief operating officer of
petitioner 7K Corporation terminated Albaricos employment allegedly
for his poor sales performance.5Respondent had to stop reporting for
work, and he subsequently submitted his money claims against
petitioner for arbitration before the National Conciliation and Mediation
Board (NCMB). The issue for voluntary arbitration before the NCMB,
according to the parties Submission Agreement dated 19 April 1993,
was whether respondent Albarico was entitled to the payment of
separation pay and the sales commission reserved for him by the
corporation.6
While the NCMB arbitration case was pending, respondent Albarico
filed a Complaint against petitioner corporation with the Arbitration
Branch of the National Labor Relations Commission (NLRC) for illegal
dismissal with money claims for overtime pay, holiday compensation,
commission, and food and travelling allowances.7 The Complaint was
decided by the labor arbiter in favor of respondent Albarico, who was
awarded separation pay in lieu of reinstatement, backwages and
attorneys fees.8
On appeal by petitioner, the labor arbiters Decision was vacated by
the NLRC for forum shopping on the part of respondent Albarico,
because the NCMB arbitration case was still pending.9 The NLRC
Decision, which explicitly stated that the dismissal was without
prejudice to the pending NCMB arbitration case,10became final after
no appeal was taken.
On 17 September 1997, petitioner corporation filed its Position Paper
in the NCMB arbitration case.11 It denied that respondent was
terminated from work, much less illegally dismissed. The corporation
claimed that he had voluntarily stopped reporting for work after
receiving a verbal reprimand for his sales performance; hence, it was
he who was guilty of abandonment of employment. Respondent
made an oral manifestation that he was adopting the position paper
he submitted to the labor arbiter, a position paper in which the former
claimed that he had been illegally dismissed.12
On 12 January 2005, almost 12 years after the filing of the NCMB
case, both parties appeared in a hearing before the
NCMB.13 Respondent manifested that he was willing to settle the case
amicably with petitioner based on the decision of the labor arbiter
ordering the payment of separation pay in lieu of reinstatement,
backwages and attorneys fees. On its part, petitioner made a
counter-manifestation that it was likewise amenable to settling the
dispute. However, it was willing to pay only the separation pay and the
sales commission according to the Submission Agreement dated 19
April 1993.14
The factual findings of the voluntary arbitrator, as well as of the CA,
are not clear on what happened afterwards. Even the records are
bereft of sufficient information.
On 18 November 2005, the NCMB voluntary arbitrator rendered a
Decision finding petitioner corporation liable for illegal
dismissal.15 The termination of respondent Albarico, by reason of
alleged poor performance, was found invalid.16 The arbitrator
explained that the promotions, increases in salary, and awards
13
received by respondent belied the claim that the latter was performing ISSUE
poorly.17 It was also found that Albarico could not have abandoned his
job, as the abandonment should have been clearly shown. Mere The issue before the Court is whether the CA committed reversible
absence was not sufficient, according to the arbitrator, but must have error in finding that the voluntary arbitrator properly assumed
been accompanied by overt acts pointing to the fact that the employee jurisdiction to decide the issue of the legality of the dismissal of
did not want to work anymore. It was noted that, in the present case, respondent as well as the latters entitlement to backwages, even if
the immediate filing of a complaint for illegal dismissal against the neither the legality nor the entitlement was expressedly claimed in the
employer, with a prayer for reinstatement, showed that the employee Submission Agreement of the parties.
was not abandoning his work. The voluntary arbitrator also found that
Albarico was dismissed from his work without due process. The Petition is denied for being devoid of merit.

However, it was found that reinstatement was no longer possible DISCUSSION

because of the strained relationship of the parties.18 Thus, in lieu of
reinstatement, the voluntary arbitrator ordered the corporation to pay Preliminarily, we address petitioners claim that under Article 217 of
separation pay for two years at P4,456 for each year, or a total the Labor Code, original and exclusive jurisdiction over termination
amount of P8,912. disputes, such as the present case, is lodged only with the labor
arbiter of the NLRC.24
Additionally, in view of the finding that Albarico had been illegally
dismissed, the voluntary arbitrator also ruled that the former was Petitioner overlooks the proviso in the said article,
entitled to backwages in the amount of P90,804.19 Finally, the thus:cralavvonlinelawlibrary
arbitrator awarded attorneys fees in respondents favor, because he Art. 217. Jurisdiction of the Labor Arbiters and the Commission.
had been compelled to file an action for illegal dismissal.20
a. Except as otherwise provided under this Code, the Labor Arbiters
Petitioner corporation subsequently appealed to the CA, imputing to shall have original and exclusive jurisdiction to hear and decide, within
the voluntary arbitrator grave abuse of discretion amounting to lack or thirty (30) calendar days after the submission of the case by the
excess of jurisdiction for awarding backwages and attorneys fees to parties for decision without extension, even in the absence of
respondent Albarico based on the formers finding of illegal stenographic notes, the following cases involving all workers, whether
dismissal.21 The arbitrator contended that the issue of the legality of agricultural or non-agricultural:cralavvonlinelawlibrary
dismissal was not explicitly included in the Submission Agreement
dated 19 April 1993 filed for voluntary arbitration and resolution. It x x x x
prayed that the said awards be set aside, and that only separation pay
of P8,912.00 and sales commission of P4,787.60 be awarded. 2. Termination disputes;

The CA affirmed the Decision of the voluntary arbitrator, but x x x x

eliminated the award of attorneys fees for having been made without
factual, legal or equitable justification.22 Petitioners Motion for Partial 6. Except claims for Employees Compensation, Social Security,
Reconsideration was denied as well.23 Medicare and maternity benefits, all other claims arising from
employer-employee relations, including those of persons in
Hence, this Petition. domestic or household service, involving an amount exceeding five
thousand pesos (P5,000.00) regardless of whether accompanied
with a claim for reinstatement. (Emphases supplied)

14
Thus, although the general rule under the Labor Code gives the labor Code, the jurisdiction of a voluntary arbitrator is strictly limited to the
arbiter exclusive and original jurisdiction over termination disputes, it issues that the parties agree to submit. Thus, it contends that the
also recognizes exceptions. One of the exceptions is provided in voluntary arbitrator exceeded his jurisdiction when he resolved the
Article 262 of the Labor Code. In San Jose v. NLRC,25 we issues of the legality of the dismissal of respondent and the latters
said:cralavvonlinelawlibrary entitlement to backwages on the basis of a finding of illegal dismissal.
The phrase Except as otherwise provided under this Code refers to
the following exceptions:cralavvonlinelawlibrary According to petitioner, the CA wrongly concluded that the issue of
respondents entitlement to separation pay was necessarily based on
A. Art. 217. Jurisdiction of Labor Arbiters . . . his allegation of illegal dismissal, thereby making the issue of the
legality of his dismissal implicitly submitted to the voluntary arbitrator
x x x x for resolution.28 Petitioner argues that this was an erroneous
conclusion, because separation pay may in fact be awarded even in
(c) Cases arising from the interpretation or implementation of circumstances in which there is no illegal dismissal.
collective bargaining agreement and those arising from the
interpretation or enforcement of company procedure/policies shall be We rule that although petitioner correctly contends that separation pay
disposed of by the Labor Arbiter by referring the same to the may in fact be awarded for reasons other than illegal dismissal, the
grievance machinery and voluntary arbitrator as may be provided in circumstances of the instant case lead to no other conclusion than
said agreement. that the claim of respondent Albarico for separation pay was premised
on his allegation of illegal dismissal. Thus, the voluntary arbitrator
B. Art. 262. Jurisdiction over other labor disputes. The Voluntary properly assumed jurisdiction over the issue of the legality of his
Arbitrator or panel of Voluntary Arbitrators, upon agreement of dismissal.
the parties, shall also hear and decide all other labor disputes
including unfair labor practices and bargaining True, under the Labor Code, separation pay may be given not only
deadlocks. (Emphasis supplied) when there is illegal dismissal. In fact, it is also given to employees
We also said in the same case that [t]he labor disputes referred to in who are terminated for authorized causes, such as redundancy,
the same Article 262 [of the Labor Code] can include all those retrenchment or installation of labor-saving devices under Article
disputes mentioned in Article 217 over which the Labor Arbiter has 28329 of the Labor Code. Additionally, jurisprudence holds that
original and exclusive jurisdiction.26 separation pay may also be awarded for considerations of social
justice, even if an employee has been terminated for a just cause
From the above discussion, it is clear that voluntary arbitrators may, other than serious misconduct or an act reflecting on moral
by agreement of the parties, assume jurisdiction over a termination character.30 The Court has also ruled that separation pay may be
dispute such as the present case, contrary to the assertion of awarded if it has become an established practice of the company to
petitioner that they may not. pay the said benefit to voluntarily resigning employees31 or to those
validly dismissed for non-membership in a union as required in a
We now resolve the main issue. Petitioner argues that, assuming that closed-shop agreement.32
the voluntary arbitrator has jurisdiction over the present termination
dispute, the latter should have limited his decision to the issue The above circumstances, however, do not obtain in the present case.
contained in the Submission Agreement of the parties the issue of There is no claim that the issue of entitlement to separation pay is
whether respondent Albarico was entitled to separation pay and to the being resolved in the context of any authorized cause of termination
sales commission the latter earned before being undertaken by petitioner corporation. Neither is there any allegation
27
terminated. Petitioner asserts that under Article 262 of the Labor that a consideration of social justice is being resolved here. In fact,

15
even in instances in which separation pay is awarded in consideration
of social justice, the issue of the validity of the dismissal still needs to
be resolved first. Only when there is already a finding of a valid
dismissal for a just cause does the court then award separation pay
for reason of social justice. The other circumstances when separation
pay may be awarded are not present in this case.
The foregoing findings indisputably prove that the issue of separation
pay emanates solely from respondents allegation of illegal dismissal.
In fact, petitioner itself acknowledged the issue of illegal dismissal in
its position paper submitted to the NCMB.
Moreover, we note that even the NLRC was of the understanding that
the NCMB arbitration case sought to resolve the issue of the legality
of the dismissal of the respondent. In fact, the identity of the issue of
the legality of his dismissal, which was previously submitted to the
NCMB, and later submitted to the NLRC, was the basis of the latters
finding of forum shopping and the consequent dismissal of the case
before it. In fact, petitioner also implicitly acknowledged this when it
filed before the NLRC its Motion to Dismiss respondents Complaint
on the ground of forum shopping. Thus, it is now estopped from
claiming that the issue before the NCMB does not include the issue of
the legality of the dismissal of respondent. Besides, there has to be a
reason for deciding the issue of respondents entitlement to
separation pay. To think otherwise would lead to absurdity, because
the voluntary arbitrator would then be deciding that issue in a vacuum.
The arbitrator would have no basis whatsoever for saying that
Albarico was entitled to separation pay or not if the issue of the
legality of respondents dismissal was not resolve first.
Hence, the voluntary arbitrator correctly assumed that the core issue
behind the issue of separation pay is the legality of the dismissal of
respondent. Moreover, we have ruled in Sime Darby Pilipinas, Inc. v.
Deputy Administrator Magsalin33 that a voluntary arbitrator has
plenary jurisdiction and authority to interpret an agreement to arbitrate
and to determine the scope of his own authority when the said
agreement is vague subject only, in a proper case, to
the certiorari jurisdiction of this Court.
Having established that the issue of the legality of dismissal of
Albarico was in fact necessarily albeit not explicitly included in the
Submission Agreement signed by the parties, this Court rules that the
voluntary arbitrator rightly assumed jurisdiction to decide the said
issue.
Consequently, we also rule that the voluntary arbitrator may award
backwages upon a finding of illegal dismissal, even though the issue
of entitlement thereto is not explicitly claimed in the Submission
Agreement. Backwages, in general, are awarded on the ground of
equity as a form of relief that restores the income lost by the
terminated employee by reason of his illegal dismissal.34
In Sime Darby we ruled that although the specific issue presented by
the parties to the voluntary arbitrator was only the issue of
performance bonus, the latter had the authority to determine not only
the issue of whether or not a performance bonus was to be granted,
but also the related question of the amount of the bonus, were it to be
granted. We explained that there was no indication at all that the
parties to the arbitration agreement had regarded the issue of
performance bonus as a two-tiered issue, of which only one aspect
was being submitted to arbitration. Thus, we held that the failure of
the parties to limit the issues specifically to that which was stated
allowed the arbitrator to assume jurisdiction over the related issue.
Similarly, in the present case, there is no indication that the issue of
illegal dismissal should be treated as a two-tiered issue whereupon
entitlement to backwages must be determined separately. Besides,
since arbitration is a final resort for the adjudication of disputes, the
voluntary arbitrator in the present case can assume that he has the
necessary power to make a final settlement.35 Thus, we rule that the
voluntary arbitrator correctly assumed jurisdiction over the issue of
entitlement of respondent Albarico to backwages on the basis of the
formers finding of illegal dismissal.
WHEREFORE, premises considered, the instant Petition is DENIED.
The 18 September 2007 Decision and 17 March 2008 Resolution of
the Court of Appeals in CA-G.R. SP No. 92526, are
hereby AFFIRMED.
SO ORDERED.
16

PEOPLES BROADCASTING SERVICE (BOMBO RADYO
PHILS., INC.),
Petitioner, - versus -
THE SECRETARY OF THE DEPARTMENT OF LABOR AND
EMPLOYMENT, THE REGIONAL DIRECTOR, DOLE
REGION VII, and JANDELEON JUEZAN,
Respondents.
In a Petition for Certiorari under Rule 65, petitioner Peoples
Broadcasting Service, Inc. (Bombo Radyo Phils., Inc.) questioned the
Decision and Resolution of the Court of Appeals (CA) dated October
26, 2006 and June 26, 2007, respectively, in C.A. G.R. CEB-SP No.
00855.
Private respondent Jandeleon Juezan filed a complaint against
petitioner with the Department of Labor and Employment (DOLE)
Regional Office No. VII, Cebu City, for illegal deduction, nonpayment
of service incentive leave, 13th month pay, premium pay for holiday
and rest day and illegal diminution of benefits, delayed payment of
wages and noncoverage of SSS, PAG-IBIG and Philhealth.[1] After the
conduct of summary investigations, and after the parties submitted
their position papers, the DOLE Regional Director found that private
respondent was an employee of petitioner, and was entitled to his
money claims.[2]Petitioner sought reconsideration of the Directors
Order, but failed. The Acting DOLE Secretary dismissed petitioners
appeal on the ground that petitioner submitted a Deed of Assignment
of Bank Deposit instead of posting a cash or surety bond. When the
matter was brought before the CA, where petitioner claimed that it had
been denied due process, it was held that petitioner was accorded
due process as it had been given the opportunity to be heard, and that
the DOLE Secretary had jurisdiction over the matter, as the
jurisdictional limitation imposed by Article 129 of the Labor Code on
the power of the DOLE Secretary under Art. 128(b) of the Code had
been repealed by Republic Act No. (RA) 7730.[3]
In the Decision of this Court, the CA Decision was reversed and set
aside, and the complaint against petitioner was dismissed. The
dispositive portion of the Decision reads as follows:
WHEREFORE, the petition is GRANTED. The
Decision dated 26 October 2006 and the Resolution
dated 26 June 2007 of the Court of Appeals in C.A.
G.R. CEB-SP No. 00855 are REVERSED and SET
ASIDE.The Order of the then Acting Secretary of the
Department of Labor and Employment dated 27
January 2005 denying petitioners appeal, and the
Orders of the Director, DOLE Regional Office No. VII,
dated 24 May 2004 and 27 February 2004,
respectively, are ANNULLED. The complaint against
petitioner is DISMISSED.[4]
The Court found that there was no employer-employee
relationship between petitioner and private respondent. It was held
that while the DOLE may make a determination of the existence of an
employer-employee relationship, this function could not be co-
extensive with the visitorial and enforcement power provided in Art.
128(b) of the Labor Code, as amended by RA 7730. The National
Labor Relations Commission (NLRC) was held to be the primary
agency in determining the existence of an employer-employee
relationship. This was the interpretation of the Court of the clause in
cases where the relationship of employer-employee still exists in Art.
128(b).[5]
From this Decision, the Public Attorneys Office (PAO) filed a
Motion for Clarification of Decision (with Leave of Court). The PAO
sought to clarify as to when the visitorial and enforcement power of
the DOLE be not considered as co-extensive with the power to
determine the existence of an employer-employee relationship.[6] In its
Comment,[7] the DOLE sought clarification as well, as to the extent of
its visitorial and enforcement power under the Labor Code, as
amended.
The Court treated the Motion for Clarification as a second
motion for reconsideration, granting said motion and reinstating the
petition.[8] It is apparent that there is a need to delineate the
jurisdiction of the DOLE Secretary vis--vis that of the NLRC.
Under Art. 129 of the Labor Code, the power of the DOLE and
its duly authorized hearing officers to hear and decide any matter
involving the recovery of wages and other monetary claims and
benefits was qualified by the proviso that the complaint not include a
claim for reinstatement, or that the aggregate money claims not
exceed PhP 5,000. RA 7730, or an Act Further Strengthening the
17
Visitorial and Enforcement Powers of the Secretary of Labor, did away
with the PhP 5,000 limitation, allowing the DOLE Secretary to
exercise its visitorial and enforcement power for claims beyond PhP
5,000. The only qualification to this expanded power of the DOLE was
only that there still be an existing employer-employee relationship.
It is conceded that if there is no employer-employee
relationship, whether it has been terminated or it has not existed from
the start, the DOLE has no jurisdiction. Under Art. 128(b) of the Labor
Code, as amended by RA 7730, the first sentence reads,
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. It is clear and beyond debate that
an employer-employee relationship must exist for the exercise of the
visitorial and enforcement power of the DOLE. The question now
arises, may the DOLE make a determination of whether or not an
employer-employee relationship exists, and if so, to what extent?
The first portion of the question must be answered in the
affirmative.
The prior decision of this Court in the present case accepts
such answer, but places a limitation upon the power of the DOLE, that
is, the determination of the existence of an employer-employee
relationship cannot be co-extensive with the visitorial and enforcement
power of the DOLE. But even in conceding the power of the DOLE to
determine the existence of an employer-employee relationship, the
Court held that the determination of the existence of an employer-
employee relationship is still primarily within the power of the NLRC,
that any finding by the DOLE is merely preliminary.
This conclusion must be revisited.
No limitation in the law was placed upon the power of the
DOLE to determine the existence of an employer-employee
relationship. No procedure was laid down where the DOLE would only
make a preliminary finding, that the power was primarily held by the
NLRC. The law did not say that the DOLE would first seek the NLRCs
determination of the existence of an employer-employee relationship,
or that should the existence of the employer-employee relationship be
disputed, the DOLE would refer the matter to the NLRC. The DOLE
must have the power to determine whether or not an employer-
employee relationship exists, and from there to decide whether or not
to issue compliance orders in accordance with Art. 128(b) of the Labor
Code, as amended by RA 7730.
The DOLE, in determining the existence of an employer-
employee relationship, has a ready set of guidelines to follow, the
same guide the courts themselves use. The elements to determine
the existence of an employment relationship are: (1) the selection and
engagement of the employee; (2) the payment of wages; (3) the
power of dismissal; (4) the employers power to control the employees
conduct.[9] The use of this test is not solely limited to the NLRC. The
DOLE Secretary, or his or her representatives, can utilize the same
test, even in the course of inspection, making use of the same
evidence that would have been presented before the NLRC.
The determination of the existence of an employer-employee
relationship by the DOLE must be respected. The expanded visitorial
and enforcement power of the DOLE granted by RA 7730 would be
rendered nugatory if the alleged employer could, by the simple
expedient of disputing the employer-employee relationship, force the
referral of the matter to the NLRC. The Court issued the declaration
that at least aprima facie showing of the absence of an employer-
employee relationship be made to oust the DOLE of jurisdiction. But it
is precisely the DOLE that will be faced with that evidence, and it is
the DOLE that will weigh it, to see if the same does successfully refute
the existence of an employer-employee relationship.
If the DOLE makes a finding that there is an existing employer-
employee relationship, it takes cognizance of the matter, to the
exclusion of the NLRC. The DOLE would have no jurisdiction only if
the employer-employee relationship has already been terminated, or it
appears, upon review, that no employer-employee relationship existed
in the first place.
The Court, in limiting the power of the DOLE, gave the
rationale that such limitation would eliminate the prospect of
competing conclusions between the DOLE and the NLRC. The
18
prospect of competing conclusions could just as well have been
eliminated by according respect to the DOLE findings, to the exclusion
of the NLRC, and this We believe is the more prudent course of action
to take.
This is not to say that the determination by the DOLE is
beyond question or review. Suffice it to say, there are judicial
remedies such as a petition for certiorari under Rule 65 that may be
availed of, should a party wish to dispute the findings of the DOLE.
It must also be remembered that the power of the DOLE to
determine the existence of an employer-employee relationship need
not necessarily result in an affirmative finding. The DOLE may well
make the determination that no employer-employee relationship
exists, thus divesting itself of jurisdiction over the case.It must not be
precluded from being able to reach its own conclusions, not by the
parties, and certainly not by this Court.
Under Art. 128(b) of the Labor Code, as amended by RA
7730, the DOLE is fully empowered to make a determination as to the
existence of an employer-employee relationship in the exercise of its
visitorial and enforcement power, subject to judicial review, not review
by the NLRC.
There is a view that despite Art. 128(b) of the Labor Code, as
amended by RA 7730, there is still a threshold amount set by Arts.
129 and 217 of the Labor Code when money claims are involved, i.e.,
that if it is for PhP 5,000 and below, the jurisdiction is with the regional
director of the DOLE, under Art. 129, and if the amount involved
exceeds PhP 5,000, the jurisdiction is with the labor arbiter, under Art.
217. The view states that despite the wording of Art. 128(b), this
would only apply in the course of regular inspections undertaken by
the DOLE, as differentiated from cases under Arts. 129 and 217,
which originate from complaints. There are several cases, however,
where the Court has ruled that Art. 128(b) has been amended to
expand the powers of the DOLE Secretary and his duly authorized
representatives by RA 7730. In these cases, the Court resolved that
the DOLE had the jurisdiction, despite the amount of the money
claims involved.Furthermore, in these cases, the inspection held by
the DOLE regional director was prompted specifically by a
complaint. Therefore, the initiation of a case through a complaint does
not divest the DOLE Secretary or his duly authorized representative of
jurisdiction under Art. 128(b).
To recapitulate, if a complaint is brought before the DOLE to
give effect to the labor standards provisions of the Labor Code or
other labor legislation, and there is a finding by the DOLE that there is
an existing employer-employee relationship, the DOLE exercises
jurisdiction to the exclusion of the NLRC. If the DOLE finds that there
is no employer-employee relationship, the jurisdiction is properly with
the NLRC.If a complaint is filed with the DOLE, and it is accompanied
by a claim for reinstatement, the jurisdiction is properly with the Labor
Arbiter, under Art. 217(3) of the Labor Code, which provides that the
Labor Arbiter has original and exclusive jurisdiction over those cases
involving wages, rates of pay, hours of work, and other terms and
conditions of employment, if accompanied by a claim for
reinstatement. If a complaint is filed with the NLRC, and there is still
an existing employer-employee relationship, the jurisdiction is properly
with the DOLE. The findings of the DOLE, however, may still be
questioned through a petition for certiorari under Rule 65 of the Rules
of Court.
In the present case, the finding of the DOLE Regional Director
that there was an employer-employee relationship has been subjected
to review by this Court, with the finding being that there was no
employer-employee relationship between petitioner and private
respondent, based on the evidence presented. Private respondent
presented self-serving allegations as well as self-defeating
evidence.[10] The findings of the Regional Director were not based on
substantial evidence, and private respondent failed to prove the
existence of an employer-employee relationship. The DOLE had no
jurisdiction over the case, as there was no employer-employee
relationship present. Thus, the dismissal of the complaint against
petitioner is proper.
WHEREFORE, the Decision of this Court in G.R. No. 179652
is hereby AFFIRMED, with theMODIFICATION that in the exercise of
the DOLEs visitorial and enforcement power, the Labor Secretary or
the latters authorized representative shall have the power to
determine the existence of an employer-employee relationship, to the
exclusion of the NLRC.
19
G.R. No. 87530 June 13, 1990 reinstatement is impossible, payment of full backwages and
separation pay of one (1) month salary for every year of service. The
GERONIMO SADOL, petitioner, appeal of respondent Pig was dismissed for having been filed out of
vs. time.
PILIPINAS KAO, INC., REQUITO VEGA, BELEN GOMEZ, ARTURO
GOMEZ & NLRC SECOND DIVISION,respondents. The PKI allegedly received a copy of the decision of the NLRC only
on September 13, 1988. A motion for reconsideration of said decision
The issue posed in this case is whether or not a party who failed to dated September 22, 1988 was filed by said respondent and a similar
appeal from a decision of the labor arbiter to the National Labor motion was filed by Samahang Kabuhayan ng Barangay Luz Banzon
Relations Commission (NLRC) within the ten (10) day reglementary (SKLB for brevity) to which an opposition was filed by petitioner.
period can still participate in a separate appeal timely interposed by
the adverse party by filing a motion for reconsideration of a decision of On September 30, 1988, a resolution was promulgated by the same
the NLRC on such appeal. division of the NLRC, setting aside its decision and dismissing the
case for lack of merit. A motion for reconsideration thereof filed by
Petitioner was recruited as a laborer by private respondents Requito petitioner who besides questioning its findings of facts raised the
Vega, Antonio Gomez and Belen Gomez, who are the owners of Vega issue that said respondent's appeal having been filed out of time its
& Co., a private recruitment agency, with assignment at respondent motion for reconsideration of the decision should not have been
Pilipinas Kao, Inc. (PKI for brevity), particularly at the Pit Burning area. entertained as it raised issues for the first on appeal which were not
Sometime on April 16, 1984, he was allegedly summarily dismissed. raised before the labor arbiter. This motion was denied on November
Hence, on July 24, 1986, he filed a complaint for reinstatement and 27, 1988.
backwages with Region X of the Department of Labor and
Employment in Cagayan de Oro City. Hence, the herein petition for certiorari wherein petitioner recites the
following assignment of errors:
On November 13, 1986, the labor arbiter ordered all parties to submit
their position papers. Only petitioner complied. On December 17, I
1986, petitioner filed an urgent motion that the failure of respondent to
file their position papers is a waiver and so judgment should be THE HONORABLE COMMISSION, SECOND
rendered in favor of petitioner. Similar motions were filed by petitioner DIVISION, SERIOUSLY ERRED IN FINDING THAT
on January 23, 1987 and May 15, 1987. RESPONDENTS REQUITO VEGA, ARTURO GOMEZ
AND BELEN GOMEZ IS A LAWFUL INDEPENDENT
On June 26, 1987, the labor arbiter rendered a decision ordering LABOR CONTRACTOR;
private respondents to jointly and solidarity pay petitioner his
separation pay computed at one month for every year of service II
within the reglementary period. Petitioner appealed to the NLRC. Said
respondents also appealed but it was filed out of time. THE HONORABLE COMMISSION, SECOND
DIVISION, SERIOUSLY ERRED IN FINDING IN ITS
On August 26, 1988, the Second Division of the NLRC promulgated a RESOLUTION THAT COMPLAINANT-APPELLANT
decision modifying the appealed decision in that respondent PKI was VOLUNTARILY ABANDONED HIS JOB;
ordered to reinstate petitioner to his former position without loss of
seniority rights and other accrued benefits and with full backwages III
from the time of dismissal up to his actual reinstatement, and in case
20
 THE HONORABLE COMMISSION, SECOND
DIVISION, SERIOUSLY ERRED AND/OR
COMMITTED GRAVE ABUSE OF DISCRETION IN
GIVING DUE COURSE AND/OR ENTERTAINING
THE MOTION FOR RECONSIDERATION FILED BY
RESPONDENT-APPELLANTS AND REVERSING ITS
OWN DECISION/RESOLUTION DATED AUGUST 26,
1988;
IV
THE HONORABLE COMMISSION, SECOND
DIVISION, SERIOUSLY ERRED IN FAILING TO GIVE
DUE CONSIDERATION OF COMPLAINANT-
APPELLANT'S OPPOSITION TO MOTION FOR
RECONSIDERATION DATED SEPTEMBER 27,
1988. 1
The third and fourth assignment of errors shall first be resolved.
There is no question that private respondents failed to file a timely
appeal from the derision of the labor arbiter while the petitioner was
able to interpose his appeal within the reglementary period. It is also
an accepted postulate that issues not raised in the lower court or the
labor arbiter may not be raised for the first time on appeal.
Note is taken of the fact that even the Solicitor General refused to
represent the NLRC in this proceeding as it shares the view of
petitioner that the decision of the labor arbiter having become final by
the failure to respondent PKI to appeal on time the NLRC may no
longer amend, modify, much less set aside the same. 2
This posture is correct insofar as respondent PKI is concerned.
However, as petitioner had filed a timely appeal the NLRC had
jurisdiction to give due se to his appeal and render the decision of
August 28, 1988, a copy of which was furnished respondents. Having
lost the right to appeal can respondent PKI file a motion for
reconsideration of said decision? The Court resolves the question in
the affirmative. The rules of technicality must yield to the broader
interest of justice. It is only by giving due course to the motion for
reconsideration that was timely filed that the NLRC may be able, to
equitably evaluate the conflicting versions of facts presented by the
parties.
In the now questioned resolution of the NLRC dated September
30,1988, the following findings and conclusions were made:
Respondent SKLB assails the finding of the
Commission that it is engaged in labor-only contracting.
In support thereof, respondent submitted a Clearance
Certificate issued by the Department of Labor and
Employment, Regional Office No. 10 situated in
Cagayan de Oro City, certifying to its being cleared for
issuance of a permit as a labor contractor. It also
submitted payrolls showing that it indeed operated as
such independent labor contractor in accordance with
Article 106 of the Labor Code.
Attached to respondent SKLB's motion likewise is the
joint affidavit of one Mario T. Ecarnum and Benito U.
Ecarnum who jointly stated that they were neighbors
and co- workers of the complainant in the pit burning
area, in a work contracted by aforesaid respondent with
respondent Pilipinas Kao, Inc.; that complainant
abandoned his work starting April 19,1984 when he
went to Manila to apply for work abroad and it wall only
about eight (8) months later that he returned when he
failed to secure an overseas employment; that
complainant's prolonged absence was without prior
permission or leave of absence.
Respondent SKLB further contends that it meets all
requirements set by law and jurisprudence pertaining to
an independent labor contractor, citing the case of Vda.
de Eustaquio vs. Workmen's Compensation
Commission, 97 SCRA 255, thus:
An independent contractor is one who,
in rendering services, exercise an
independent employment or occupation
and represents the will of his employer
only as to the results of his work; and
21
 who is engaged to perform a certain
service to another according to his own
manner and methods, free from control
and direction of his employer in all
matters connected with the performance
of the service, except as to the result of
the work.
To further buttress respondent SKLB's claim of being
an independent labor contractor and employer of
complainant, it submitted a copy of a Memorandum
dated April 21, 1984 sent to complainant requiring the
latter to report to its office immediately otherwise he
would be deemed to have abandoned his work.
It does strike Us as odd that if indeed complainant was
dismissed sometime in April 1984 it took him almost
three (3) years before filing the instant case for illegal
dismissal . This circumstance adds a significant
dimension to respondent's position that indeed
complainant abandoned his job to look for greener
pastures and it was only when he failed to find such
opportunity that he came back to demand that he be
allowed to resume the employment which he
unceremoniously abandoned.
All the foregoing undisputed taken together,
preponderate in favor of respondent SKLB's claim of
being a lawful independent labor contractor which
employed complainant who unjustifiably abandoned his
employment.
WHEREFORE, the derision sought to be reconsidered
is hereby SET ASIDE and a new one entered,
dismissing the case for lack of merit. 3
The factual findings of the NLRC are conclusive on this Court
because the same appear to be supported by substantial evidence.
WHEREFORE, the petition is DISMISSED for lack of merit. No costs.
[G.R. No. 152494. September 22, 2004]
MARIANO ONG, doing business under the name and style
MILESTONE METAL MANUFACTURING, petitioner, vs. THE
COURT OF APPEALS, CONRADO DABAC, BERNABE
TAYACTAC, MANUEL ABEJUELLA, LOLITO ABELONG, RONNIE
HERRERO, APOLLO PAMIAS, JAIME ONGUTAN, NOEL
ATENDIDO, CARLOS TABBAL, JOEL ATENDIDO, BIENVENIDO
EBBER, RENATO ABEJUELLA, LEONILO ATENDIDO, JR.,
LODULADO FAA and JAIME LOZADA, respondents.
DECISION
YNARES-SANTIAGO, J.:
This is a petition for review on certiorari assailing the decision[1] of
the Court of Appeals in CA-G.R. SP No. 62129, dated October 10,
2001, which dismissed the petition for certiorari for lack of merit, as
well as the resolution,[2] dated March 7, 2002, denying the motion for
reconsideration.
Petitioner is the sole proprietor of Milestone Metal Manufacturing
(Milestone), which manufactures, among others, wearing apparels,
belts, and umbrellas.[3] Sometime in May 1998, the business suffered
very low sales and productivity because of the economic crisis in the
country. Hence, it adopted a rotation scheme by reducing the
workdays of its employees to three days a week or less for an
indefinite period.[4]
On separate dates, the 15 respondents filed before the National
Labor Relations Commission (NLRC) complaints for illegal dismissal,
underpayment of wages, non-payment of overtime pay, holiday pay,
service incentive leave pay, 13th month pay, damages, and attorneys
fees against petitioner. These were consolidated and assigned to
Labor Arbiter Manuel Manasala.
Petitioner claimed that 9 of the 15 respondents were not
employees of Milestone but of Protone Industrial Corporation which,
however, stopped its operation due to business losses. Further, he
22
claims that respondents Manuel Abuela, Lolita Abelong, Ronnie
Herrero, Carlos Tabbal, Conrado Dabac, and Lodualdo Faa were not
dismissed from employment; rather, they refused to work after the
rotation scheme was adopted. Anent their monetary claims, petitioner
presented documents showing that he paid respondents minimum
wage, 13th month pay, holiday pay, and contributions to the SSS,
Medicare, and Pag-Ibig Funds.[5]
On November 25, 1999, the Labor Arbiter rendered a decision
awarding to the respondents the aggregate amount of P1,111,200.40
representing their wage differential, holiday pay, service incentive
leave pay and 13thmonth pay, plus 10% thereof as attorneys
fees. Further, petitioner was ordered to pay the respondents
separation pay equivalent to month salary for every year of service
due to the indefiniteness of the rotation scheme and strained relations
caused by the filing of the complaints.[6]
Petitioner filed with the NLRC a notice of appeal with a
memorandum of appeal and paid the docket fees therefor. However,
instead of posting the required cash or surety bond, he filed a motion
to reduce the appeal bond.The NLRC, in a resolution dated April 28,
2000, denied the motion to reduce bond and dismissed the appeal for
failure to post cash or surety bond within the reglementary
period.[7] Petitioners motion for reconsideration was likewise denied.[8]
Petitioner filed a petition for certiorari with the Court of Appeals
alleging that the NLRC acted with grave abuse of discretion in
dismissing the appeal for non-perfection of appeal although a motion
to reduce appeal bond was seasonably filed. However, the petition
was dismissed and thereafter the motion for reconsideration was
likewise dismissed for lack of merit.[9]
Hence, this petition for review on the following assignment of
errors:
I.
PUBLIC RESPONDENT COURT OF APPEALS COMMITTED
SERIOUS ERROR AND GRAVE ABUSE OF DISCRETION IN
AFFIRMING THE DECISION OF THE NLRC DISMISSING THE
APPEAL OF PETITIONERS (sic) FOR NON-PERFECTION WHEN A
MOTION TO REDUCE APPEAL BOND WAS SEASONABLY FILED
WHICH IS ALLOWED BY THE RULES OF PROCEDURE OF THE
NLRC.
II.
PUBLIC RESPONDENT COURT OF APPEALS COMMITTED
SERIOUS ERROR AND GRAVE ABUSE OF DISCRETION IN
AFFIRMING THE DISMISSAL BY NLRC OF PETITIONERS APPEAL
AND IN EFFECT UPHOLDING THE ERRONEOUS DECISION OF
THE LABOR ARBITER AWARDING SEPARATION PAY TO
PRIVATE RESPONDENTS DESPITE THE FINDING THAT THERE
WAS NO ILLEGAL DISMISSAL MADE BY MILESTONE.
III.
PUBLIC RESPONDENT COURT OF APPEALS COMMITTED
SERIOUS ERROR IN AFFIRMING THE NLRCS DISMISSAL OF
PETITIONERS APPEAL AND IN EFFECT UPHOLDING THE
ERRONEOUS DECISION OF THE LABOR ARBITER THAT
PETITIONER MILESTONE HAS VIOLATED THE MINIMUM WAGE
LAW AND THAT PRIVATE RESPONDENTS WERE UNDERPAID.
IV.
PUBLIC RESPONDENT COURT OF APPEALS COMMITTED
SERIOUS ERROR IN AFFIRMING THE NLRCS DISMISSAL OF
PETITIONERS APPEAL AND IN EFFECT UPHOLDING THE
ERRONEOUS DECISION OF THE LABOR ARBITER THAT
PETITIONER MILESTONE HAS NOT PAID PRIVATE
RESPONDENTS THEIR SERVICE INCENTIVE LEAVE PAY,
13TH MONTH PAY, AND HOLIDAY PAY.
V.
PUBLIC RESPONDENT COURT OF APPEALS COMMITTED
SERIOUS ERROR IN AFFIRMING THE NLRCS DISMISSAL OF
PETITIONERS APPEAL AND IN EFFECT UPHOLDING THE
ERRONEOUS DECISION OF THE LABOR ARBITER THAT THE
EVIDENCE SUBMITTED BY PRIVATE RESPONDENTS IN
SUPPORT OF THEIR CLAIMS ARE NOT SELF-SERVING,
23
IRRELEVANT AND IMMATERIAL TO THE FACTS AND LAW IN
ISSUE IN THIS CASE.[10]
The petition lacks merit.
Time and again it has been held that the right to appeal is not a
natural right or a part of due process, it is merely a statutory privilege,
and may be exercised only in the manner and in accordance with the
provisions of law. The party who seeks to avail of the same must
comply with the requirements of the rules. Failing to do so, the right to
appeal is lost.[11]
Article 223 of the Labor Code, as amended, sets forth the rules
on appeal from the Labor Arbiters monetary award:
ART. 223. Appeal. Decisions, awards, or orders of the Labor Arbiter
are final and executory unless appealed to the Commission by any or
both parties within ten (10) calendar days from receipt of such
decisions, awards, or orders. x x x.
xxxxxxxxx
In case of a judgment involving a monetary award, an appeal by the
employer may be perfected only upon the posting of a cash or
surety bond issued by a reputable bonding company duly accredited
by the Commission in the amount equivalent to the monetary award in
the judgment appealed from. (Emphasis ours)
The pertinent provisions of Rule VI of the New Rules of
Procedure of the NLRC,[12] which were in effect when petitioner filed
his appeal, provide:
Section 1. Periods of Appeal. Decisions, awards or orders of the
Labor Arbiter and the POEA Administrator shall be final and executory
unless appealed to the Commission by any or both parties within ten
(10) calendar days from receipt of such decisions, awards or orders of
the Labor Arbiter x x x.
xxxxxxxxx
Section 3. Requisites for Perfection of Appeal. (a) The appeal shall be
filed within the reglementary period as provided in Section 1 of this
Rule; shall be under oath with proof of payment of the required appeal
fee and the posting of a cash or surety bond as provided in Section 5
of this Rule; shall be accompanied by a memorandum of appeal which
shall state the grounds relied upon and the arguments in support
thereof; the relief prayed for; and a statement of the date when the
appellant received the appealed decision, order or award and proof of
service on the other party of such appeal.
A mere notice of appeal without complying with the other requisite
aforestated shall not stop the running of the period for perfecting an
appeal.
xxxxxxxxx
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 ours)
In the case at bar, petitioner received the decision of the Labor
Arbiter on January 6, 2000. He filed his notice of appeal with
memorandum of appeal and paid the corresponding appeal fees
on January 17, 2000, the last day of filing the appeal. However, in lieu
of the required cash or surety bond, he filed a motion to reduce bond
alleging that the amount of P1,427,802,04 as bond is unjustified and
prohibitive and prayed that the same be reduced to areasonable
24
level. The NLRC denied the motion and consequently dismissed the
appeal for non-perfection. Petitioner now contends that he was
deprived of the chance to post bond because the NLRC took 102
days to decide his motion.
Petitioners argument is unavailing.
While, Section 6, Rule VI of the NLRCs New Rules of Procedure
allows the Commission to reduce the amount of the bond, the
exercise of the authority is not a matter of right on the part of the
movant but lies within the sound discretion of the NLRC upon showing
of meritorious grounds.[13] Petitioners motion reads:
1. The appeal bond which respondents-appellants will post in
this case is P1,427,802.04. They are precisely questioning
this amount as being unjustified and prohibitive under the
premises.
2. The amount of this appeal bond must be reduced to
a reasonable level by this Honorable Office.
WHEREFORE, in view thereof, it is respectfully prayed of this
Honorable Office that the appeal bond of P1,427,802.04 be
reduced.[14]
After careful scrutiny of the motion to reduce appeal bond, we
agree with the Court of Appeals that the NLRC did not act with grave
abuse of discretion when it denied petitioners motion for the same
failed to either elucidate why the amount of the bond was unjustified
and prohibitive or to indicate what would be a reasonable level.[15]
In Calabash Garments, Inc. v. NLRC,[16] it was held that a
substantial monetary award, even if it runs into millions, does not
necessarily give the employer-appellant a meritorious case and does
not automatically warrant a reduction of the appeal bond.
Even granting arguendo that petitioner has meritorious grounds to
reduce the appeal bond, the result would have been the same since
he failed to post cash or surety bond within the prescribed period.
The above-cited 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. A mere notice of
appeal without complying with the other requisites mentioned shall not
stop the running of the period for perfection of appeal.[17] The posting
of cash or surety bond is not only mandatory but jurisdictional as well,
and non-compliance therewith is fatal and has the effect of rendering
the judgment final and executory.[18] This requirement is intended to
discourage employers from using the appeal to delay, or even evade,
their obligation to satisfy their employees just and lawful claims.[19]
The intention of the 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. 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 employers appeal may be
perfected.[20]
The fact that the NLRC took 102 days to resolve the motion will
not help petitioners case. The NLRC Rules clearly provide that the
filing of the motion to reduce bond shall not stop the running of the
period to perfect appeal.Petitioner should have seasonably filed the
appeal bond within the ten-day reglementary period following the
receipt of the order, resolution or decision of the NLRC to forestall the
finality of such order, resolution or decision. In the alternative, he
should have paid only a moderate and reasonable sum for the
premium, as was held in Biogenerics Marketing and Research
Corporation v. NLRC,[21] to wit:
x x x The mandatory filing of a bond for the perfection of an appeal is
evident from the aforequoted provision that the appeal may be
perfected only upon the posting of cash or surety bond. It is not an
excuse that the over P2 million award is too much for a small
business enterprise, like the petitioner company, to shoulder. The law
does not require its outright payment, but only the posting of a
bond to ensure that the award will be eventually paid should the
appeal fail. What petitioners have to pay is a moderate and
reasonable sum for the premium for such bond. (Emphasis ours)
25
 While the bond requirement on appeals involving monetary
awards has been relaxed in certain cases, this can only be done
where there was substantial compliance of the Rules or where the
appellants, at the very least, exhibited willingness to pay by posting a
partial bond.[22] Petitioners reliance on the case of Rosewood
Processing, Inc. v. NLRC[23] is misplaced. Petitioner in the said case
substantially complied with the rules by posting a partial surety bond
of fifty thousand pesos issued by Prudential Guarantee and
Assurance, Inc. while his motion to reduce appeal bond was pending
before the NLRC.
In the case at bar, petitioner did not post a full or partial appeal
bond within the prescribed period, thus, no appeal was perfected from
the decision of the Labor Arbiter. For this reason, the decision sought
to be appealed to the NLRC had become final and executory and
therefore immutable. Clearly, then, the NLRC has no authority to
entertain the appeal, much less to reverse the decision of the Labor
Arbiter. Any amendment or alteration made which substantially affects
the final and executory judgment is null and void for lack of
jurisdiction, including the entire proceeding held for that purpose.[24]
WHEREFORE, in view of the foregoing, the petition
is DENIED. The assailed decision of the Court of Appeals in CA-G.R.
SP No. 62129, dated October 10, 2001, dismissing the petition for
certiorari for lack of merit, is AFFIRMED.
No pronouncement as to costs.
SO ORDERED.

26
G.R. Nos. 178034 & 178117 G R. Nos. 186984-85 October
17, 2013
ANDREW JAMES MCBURNIE, Petitioner,
vs.
EULALIO GANZON, EGI-MANAGERS, INC. and E. GANZON,
INC., Respondents.
RESOLUTION
REYES, J.:
For resolution are the
(1) third motion for reconsideration1 filed by Eulalio Ganzon
(Ganzon), EGI-Managers, Inc. (EGI) and E. Ganzon, Inc.
(respondents) on March 27, 2012, seeking a reconsideration
of the Courts Decision2 dated September 18, 2009 that
ordered the dismissal of their appeal to the National Labor
Relations Commission (NLRC) for failure to post additional
appeal bond in the amount of 54,083,910.00; and
(2) motion for reconsideration3 filed by petitioner Andrew
James McBurnie (McBurnie) on September 26, 2012, assailing
the Court en bancs Resolution4 dated September 4, 2012 that
(1) accepted the case from the Courts Third Division and (2)
enjoined the implementation of the Labor Arbiters (LA)
decision finding him to be illegally dismissed by the
respondents.
Antecedent Facts
The Decision dated September 18, 2009 provides the following
antecedent facts and proceedings
On October 4, 2002, McBurnie, an Australian national, instituted a
complaint for illegal dismissal and other monetary claims against the
respondents. McBurnie claimed that on May 11, 1999, he signed a
five-year employment agreement5 with the company EGI as an
Executive Vice-President who shall oversee the management of the
companys hotels and resorts within the Philippines. He performed
work for the company until sometime in November 1999, when he
figured in an accident that compelled him to go back to Australia while
recuperating from his injuries. While in Australia, he was informed by
respondent Ganzon that his services were no longer needed because
their intended project would no longer push through.
The respondents opposed the complaint, contending that their
agreement with McBurnie was to jointly invest in and establish a
company for the management of hotels. They did not intend to create
an employer-employee relationship, and the execution of the
employment contract that was being invoked by McBurnie was solely
for the purpose of allowing McBurnie to obtain an alien work permit in
the Philippines. At the time McBurnie left for Australia for his medical
treatment, he had not yet obtained a work permit.
In a Decision6 dated September 30, 2004, the LA declared McBurnie
as having been illegally dismissed from employment, and thus entitled
to receive from the respondents the following amounts: (a)
US$985,162.00 as salary and benefits for the unexpired term of their
employment contract, (b) 2,000,000.00 as moral and exemplary
damages, and (c) attorneys fees equivalent to 10% of the total
monetary award.
Feeling aggrieved, the respondents appealed the LAs Decision to the
NLRC.7 On November 5, 2004, they filed their Memorandum of
Appeal8 and Motion to Reduce Bond9, and posted an appeal bond in
the amount of 100,000.00. The respondents contended in their
Motion to Reduce Bond, inter alia, that the monetary awards of the LA
were null and excessive, allegedly with the intention of rendering them
incapable of posting the necessary appeal bond. They claimed that an
award of "more than 60 Million Pesos to a single foreigner who had
no work permit and who left the country for good one month after the
purported commencement of his employment" was a patent
nullity.10Furthermore, they claimed that because of their business
losses that may be attributed to an economic crisis, they lacked the
capacity to pay the bond of almost 60 Million, or even the millions of
pesos in premium required for such bond.
On March 31, 2005, the NLRC denied11 the motion to reduce bond,
explaining that "in cases involving monetary award, an employer
27
seeking to appeal the [LAs] decision to the Commission is
unconditionally required by Art. 223, Labor Code to post bond in the
amount equivalent to the monetary award x x x."12 Thus, the NLRC
required from the respondents the posting of an additional bond in the
amount of 54,083,910.00.
When their motion for reconsideration was denied,13 the respondents
decided to elevate the matter to the Court of Appeals (CA) via the
Petition for Certiorari and Prohibition (With Extremely Urgent Prayer
for the Issuance of a Preliminary Injunction and/or Temporary
Restraining Order)14 docketed as CA-G.R. SP No. 90845.
In the meantime, in view of the respondents failure to post the
required additional bond, the NLRC dismissed their appeal in a
Resolution15 dated March 8, 2006. The respondents motion for
reconsideration was denied on June 30, 2006.16 This prompted the
respondents to file with the CA the Petition for Certiorari (With Urgent
Prayers for the Immediate Issuance of a Temporary Restraining Order
and a Writ of Preliminary Injunction)17 docketed as CA-G.R. SP No.
95916, which was later consolidated with CA-G.R. SP No. 90845.
CA-G.R. SP Nos. 90845 and 95916
On February 16, 2007, the CA issued a Resolution18 granting the
respondents application for a writ of preliminary injunction. It directed
the NLRC, McBurnie, and all persons acting for and under their
authority to refrain from causing the execution and enforcement of the
LAs decision in favor of McBurnie, conditioned upon the respondents
posting of a bond in the amount of 10,000,000.00. McBurnie sought
reconsideration of the issuance of the writ of preliminary injunction,
but this was denied by the CA in its Resolution19 dated May 29, 2007.
McBurnie then filed with the Court a Petition for Review on
Certiorari20 docketed as G.R. Nos. 178034 and 178117, assailing the
CA Resolutions that granted the respondents application for the
injunctive writ. On July 4, 2007, the Court denied the petition on the
ground of McBurnies failure to comply with the 2004 Rules on
Notarial Practice and to sufficiently show that the CA committed any
reversible error.21 A motion for reconsideration was denied with finality
in a Resolution22 dated October 8, 2007.
Unyielding, McBurnie filed a Motion for Leave (1) To File
Supplemental Motion for Reconsideration and (2) To Admit the
Attached Supplemental Motion for Reconsideration,23 which was
treated by the Court as a second motion for reconsideration, a
prohibited pleading under Section 2, Rule 56 of the Rules of Court.
Thus, the motion for leave was denied by the Court in a
Resolution24 dated November 26, 2007. The Courts Resolution dated
July 4, 2007 then became final and executory on November 13, 2007;
accordingly, entry of judgment was made in G.R. Nos. 178034 and
178117.25
In the meantime, the CA ruled on the merits of CA-G.R. SP No. 90845
and CA-G.R. SP No. 95916 and rendered its Decision26 dated
October 27, 2008, allowing the respondents motion to reduce appeal
bond and directing the NLRC to give due course to their appeal. The
dispositive portion of the CA Decision reads:
WHEREFORE, in view of the foregoing, the petition for certiorari and
prohibition docketed as CA GR SP No. 90845 and the petition for
certiorari docketed as CA GR SP No. 95916 are GRANTED.
Petitioners Motion to Reduce Appeal Bond is GRANTED. Petitioners
are hereby DIRECTED to post appeal bond in the amount of
10,000,000.00. The NLRC is hereby DIRECTED to give due course
to petitioners appeal in CA GR SP No. 95916 which is ordered
remanded to the NLRC for further proceedings.
SO ORDERED.27
On the issue28 of the NLRCs denial of the respondents motion to
reduce appeal bond, the CA ruled that the NLRC committed grave
abuse of discretion in immediately denying the motion without fixing
an appeal bond in an amount that was reasonable, as it denied the
respondents of their right to appeal from the decision of the LA.29 The
CA explained that "(w)hile Art. 223 of the Labor Code requiring bond
equivalent to the monetary award is explicit, Section 6, Rule VI of the
NLRC Rules of Procedure, as amended, recognized as exception a
motion to reduce bond upon meritorious grounds and upon posting of
a bond in a reasonable amount in relation to the monetary award."30
On the issue31 of the NLRCs dismissal of the appeal on the ground of
the respondents failure to post the additional appeal bond, the CA
28
also found grave abuse of discretion on the part of the NLRC,
explaining that an appeal bond in the amount of 54,083,910.00 was
prohibitive and excessive. Moreover, the appellate court cited the
pendency of the petition for certiorari over the denial of the motion to
reduce bond, which should have prevented the NLRC from
immediately dismissing the respondents appeal.32
Undeterred, McBurnie filed a motion for reconsideration. At the same
time, the respondents moved that the appeal be resolved on the
merits by the CA. On March 3, 2009, the CA issued a
Resolution33 denying both motions. McBurnie then filed with the Court
the Petition for Review on Certiorari34 docketed as G.R. Nos. 186984-
85.
In the meantime, the NLRC, acting on the CAs order of remand,
accepted the appeal from the LAs decision, and in its
Decision35 dated November 17, 2009, reversed and set aside the
Decision of the LA, and entered a new one dismissing McBurnies
complaint. It explained that based on records, McBurnie was never an
employee of any of the respondents, but a potential investor in a
project that included said respondents, barring a claim of dismissal,
much less, an illegal dismissal. Granting that there was a contract of
employment executed by the parties, McBurnie failed to obtain a work
permit which would have allowed him to work for any of the
respondents.36 In the absence of such permit, the employment
agreement was void and thus, could not be the source of any right or
obligation.
Court Decision dated September 18, 2009
On September 18, 2009, the Third Division of this Court rendered its
Decision37 which reversed the CA Decision dated October 27, 2008
and Resolution dated March 3, 2009. The dispositive portion reads:
WHEREFORE, the petition is GRANTED. The Decision of the Court
of Appeals in CA-G.R. SP Nos. 90845 and 95916 dated October 27,
2008 granting respondents Motion to Reduce Appeal Bond and
ordering the National Labor Relations Commission to give due course
to respondents appeal, and its March 3, 2009 Resolution denying
petitioners motion for reconsideration, are REVERSED and SET
ASIDE. The March 8, 2006 and June 30, 2006 Resolutions of the
National Labor Relations Commission in NLRC NCR CA NO. 042913-
05 dismissing respondents appeal for failure to perfect an appeal and
denying their motion for reconsideration, respectively, are
REINSTATED and AFFIRMED.
SO ORDERED.38
The Court explained that the respondents failure to post a bond
equivalent in amount to the LAs monetary award was fatal to the
appeal.39 Although an appeal bond may be reduced upon motion by
an employer, the following conditions must first be satisfied: (1) the
motion to reduce bond shall be based on meritorious grounds; and (2)
a reasonable amount in relation to the monetary award is posted by
the appellant. Unless the NLRC grants the motion to reduce the cash
bond within the 10-day reglementary period to perfect an appeal from
a judgment of the LA, the employer is mandated to post the cash or
surety bond securing the full amount within the said 10-day
period.40 The respondents initial appeal bond of 100,000.00 was
grossly inadequate compared to the LAs monetary award.
The respondents first motion for reconsideration41 was denied by the
Court for lack of merit via a Resolution42dated December 14, 2009.
Meanwhile, on the basis of the Courts Decision, McBurnie filed with
the NLRC a motion for reconsideration with motion to recall and
expunge from the records the NLRC Decision dated November 17,
2009.43 The motion was granted by the NLRC in its Decision44 dated
January 14, 2010.45
Undaunted by the denial of their first motion for reconsideration of the
Decision dated September 18, 2009, the respondents filed with the
Court a Motion for Leave to Submit Attached Second Motion for
Reconsideration46 and Second Motion for Reconsideration,47 which
motion for leave was granted in a Resolution48 dated March 15, 2010.
McBurnie was allowed to submit his comment on the second motion,
and the respondents, their reply to the comment. On January 25,
2012, however, the Court issued a Resolution49 denying the second
motion "for lack of merit," "considering that a second motion for
reconsideration is a prohibited pleading x x x."50
29
The Courts Decision dated September 18, 2009 became final and
executory on March 14, 2012. Thus, entry of judgment51 was made in
due course, as follows:
ENTRY OF JUDGMENT
This is to certify that on September 18, 2009 a decision rendered in
the above-entitled cases was filed in this Office, the dispositive part of
which reads as follows:
xxxx
and that the same has, on March 14, 2012 become final and
executory and is hereby recorded in the Book of Entries of
Judgments.52
The Entry of Judgment indicated that the same was made for the
Courts Decision rendered in G.R. Nos. 186984-85.
On March 27, 2012, the respondents filed a Motion for Leave to File
Attached Third Motion for Reconsideration, with an attached Motion
for Reconsideration (on the Honorable Courts 25 January 2012
Resolution) with Motion to Refer These Cases to the Honorable Court
En Banc.53 The third motion for reconsideration is founded on the
following grounds:
I.
THE PREVIOUS 15 MARCH 2010 RESOLUTION OF THE
HONORABLE COURT ACTUALLY GRANTED RESPONDENTS
"MOTION FOR LEAVE TO SUBMIT A SECOND MOTION FOR
RECONSIDERATION."
HENCE, RESPONDENTS RESPECTFULLY CONTEND THAT THE
SUBSEQUENT 25 JANUARY 2012 RESOLUTION CANNOT DENY
THE " SECOND MOTION FOR RECONSIDERATION " ON THE
GROUND THAT IT IS A PROHIBITED PLEADING. MOREOVER, IT
IS RESPECTFULLY CONTENDED THAT THERE ARE VERY
PECULIAR CIRCUMSTANCES AND NUMEROUS IMPORTANT
ISSUES IN THESE CASES THAT CLEARLY JUSTIFY GIVING DUE
COURSE TO RESPONDENTS "SECOND MOTION FOR
RECONSIDERATION," WHICH ARE:
II.
THE 10 MILLION PESOS BOND WHICH WAS POSTED IN
COMPLIANCE WITH THE OCTOBER 27, 2008 DECISION OF THE
COURT OF APPEALS IS A SUBSTANTIAL AND SPECIAL
MERITORIOUS CIRCUMSTANCE TO MERIT RECONSIDERATION
OF THIS APPEAL.
III.
THE HONORABLE COURT HAS HELD IN NUMEROUS LABOR
CASES THAT WITH RESPECT TO ARTICLE 223 OF THE LABOR
CODE, THE REQUIREMENTS OF THE LAW SHOULD BE GIVEN A
LIBERAL INTERPRETATION, ESPECIALLY IF THERE ARE
SPECIAL MERITORIOUS CIRCUMSTANCES AND ISSUES.
IV. THE LAS JUDGMENT WAS PATENTLY VOID SINCE IT
AWARDS MORE THAN 60 MILLION PESOS TO A SINGLE
FOREIGNER WHO HAD NO WORK PERMIT, AND NO WORKING
VISA.
V.
PETITIONER MCBURNIE DID NOT IMPLEAD THE NATIONAL
LABOR RELATIONS COMMISSION (NLRC) IN HIS APPEAL
HEREIN, MAKING THE APPEAL INEFFECTIVE AGAINST THE
NLRC.
VI.
NLRC HAS DISMISSED THE COMPLAINT OF PETITIONER
MCBURNIE IN ITS NOVEMBER 17, 2009 DECISION.
VII.
THE HONORABLE COURTS 18 SEPTEMBER 2009 DECISION
WAS TAINTED WITH VERY SERIOUS IRREGULARITIES.
30
VIII.
GR NOS. 178034 AND 178117 HAVE BEEN INADVERTENTLY
INCLUDED IN THIS CASE.
IX.
THE HONORABLE COURT DID NOT DULY RULE UPON THE
OTHER VERY MERITORIOUS ARGUMENTS OF THE
RESPONDENTS WHICH ARE AS FOLLOWS:
(A) PETITIONER NEVER ATTENDED ANY OF ALL 14
HEARINGS BEFORE THE [LA] (WHEN 2 MISSED
HEARINGS MEAN DISMISSAL).
(B) PETITIONER REFERRED TO HIMSELF AS A
"VICTIM" OF LEISURE EXPERTS, INC., BUT NOT OF
ANY OF THE RESPONDENTS.
(C) PETITIONERS POSITIVE LETTER TO
RESPONDENT MR. EULALIO GANZON CLEARLY
SHOWS THAT HE WAS NOT ILLEGALLY
DISMISSED NOR EVEN DISMISSED BY ANY OF
THE RESPONDENTS AND PETITIONER EVEN
PROMISED TO PAY HIS DEBTS FOR ADVANCES
MADE BY RESPONDENTS.
(D) PETITIONER WAS NEVER EMPLOYED BY ANY
OF THE RESPONDENTS. PETITIONER PRESENTED
WORK FOR CORONADO BEACH RESORT WHICH
IS [NEITHER] OWNED NOR CONNECTED WITH ANY
OF THE RESPONDENTS.
(E) THE [LA] CONCLUDED THAT PETITIONER WAS
DISMISSED EVEN IF THERE WAS ABSOLUTELY NO
EVIDENCE AT ALL PRESENTED THAT PETITIONER
WAS DISMISSED BY THE RESPONDENTS.
(F) PETITIONER LEFT THE PHILIPPINES FOR
AUSTRALIA JUST 2 MONTHS AFTER THE START
OF THE ALLEGED EMPLOYMENT AGREEMENT,
AND HAS STILL NOT RETURNED TO THE
PHILIPPINES AS CONFIRMED BY THE BUREAU OF
IMMIGRATION.
(G) PETITIONER COULD NOT HAVE SIGNED AND
PERSONALLY APPEARED BEFORE THE NLRC
ADMINISTERING OFFICER AS INDICATED IN THE
COMPLAINT SHEET SINCE HE LEFT THE
COUNTRY 3 YEARS BEFORE THE COMPLAINT
WAS FILED AND HE NEVER CAME BACK.54
On September 4, 2012, the Court en banc55 issued a
Resolution56 accepting the case from the Third Division. It also issued
a temporary restraining order (TRO) enjoining the implementation of
the LAs Decision dated September 30, 2004. This prompted
McBurnies filing of a Motion for Reconsideration,57 where he invoked
the fact that the Courts Decision dated September 18, 2009 had
become final and executory, with an entry of judgment already made
by the Court.
Our Ruling
In light of pertinent law and jurisprudence, and upon taking a second
hard look of the parties arguments and the records of the case, the
Court has ascertained that a reconsideration of this Courts Decision
dated September 18, 2009 and Resolutions dated December 14,
2009 and January 25, 2012, along with the lifting of the entry of
judgment in G.R. No. 186984-85, is in order.
The Courts acceptance of the
third motion for reconsideration
At the outset, the Court emphasizes that second and subsequent
motions for reconsideration are, as a general rule, prohibited. Section
2, Rule 52 of the Rules of Court provides that "no second motion for
reconsideration of a judgment or final resolution by the same party
shall be entertained." The rule rests on the basic tenet of immutability
of judgments. "At some point, a decision becomes final and executory
and, consequently, all litigations must come to an end."58
31
The general rule, however, against second and subsequent motions
for reconsideration admits of settled exceptions. For one, the present
Internal Rules of the Supreme Court, particularly Section 3, Rule 15
thereof, provides:
Sec. 3. Second motion for reconsideration. The Court shall not
entertain a second motion for reconsideration, and any exception to
this rule can only be granted in the higher interest of justice by the
Court en banc upon a vote of at least two-thirds of its actual
membership. There is reconsideration "in the higher interest of justice"
when the assailed decision is not only legally erroneous, but is
likewise patently unjust and potentially capable of causing
unwarranted and irremediable injury or damage to the parties. A
second motion for reconsideration can only be entertained before the
ruling sought to be reconsidered becomes final by operation of law or
by the Courts declaration.
x x x x (Emphasis ours)
In a line of cases, the Court has then entertained and granted second
motions for reconsideration "in the higher interest of substantial
justice," as allowed under the Internal Rules when the assailed
decision is "legally erroneous," "patently unjust" and "potentially
capable of causing unwarranted and irremediable injury or damage to
the parties." In Tirazona v. Philippine EDS Techno-Service, Inc. (PET,
Inc.),59 we also explained that a second motion for reconsideration
may be allowed in instances of "extraordinarily persuasive reasons
and only after an express leave shall have been obtained."60 In Apo
Fruits Corporation v. Land Bank of the Philippines,61 we allowed a
second motion for reconsideration as the issue involved therein was a
matter of public interest, as it pertained to the proper application of a
basic constitutionally-guaranteed right in the governments
implementation of its agrarian reform program. In San Miguel
Corporation v. NLRC,62 the Court set aside the decisions of the LA
and the NLRC that favored claimants-security guards upon the
Courts review of San Miguel Corporations second motion for
reconsideration. In Vir-Jen Shipping and Marine Services, Inc. v.
NLRC, et al.,63 the Court en banc reversed on a third motion for
reconsideration the ruling of the Courts Division on therein private
respondents claim for wages and monetary benefits.
It is also recognized that in some instances, the prudent action
towards a just resolution of a case is for the Court to suspend rules of
procedure, for "the power of this Court to suspend its own rules or to
except a particular case from its operations whenever the purposes of
justice require it, cannot be questioned."64 In De Guzman v.
Sandiganbayan,65 the Court, thus, explained:
The rules of procedure should be viewed as mere tools designed to
facilitate the attainment of justice. Their strict and rigid application,
which would result in technicalities that tend to frustrate rather than
promote substantial justice, must always be avoided. Even the Rules
of Court envision this liberality. This power to suspend or even
disregard the rules can be so pervasive and encompassing so as to
alter even that which this Court itself has already declared to be final,
as we are now compelled to do in this case. x x x.
xxxx
The Rules of Court was conceived and promulgated to set forth
guidelines in the dispensation of justice but not to bind and chain the
hand that dispenses it, for otherwise, courts will be mere slaves to or
robots of technical rules, shorn of judicial discretion. That is precisely
why courts in rendering real justice have always been, as they in fact
ought to be, conscientiously guided by the norm that when on the
balance, technicalities take a backseat against substantive rights, and
not the other way around. Truly then, technicalities, in the appropriate
language of Justice Makalintal, "should give way to the realities of the
situation." x x x.66 (Citations omitted)
Consistent with the foregoing precepts, the Court has then
reconsidered even decisions that have attained finality, finding it more
appropriate to lift entries of judgments already made in these cases.
In Navarro v. Executive Secretary,67 we reiterated the pronouncement
in De Guzman that the power to suspend or even disregard rules of
procedure can be so pervasive and compelling as to alter even that
which this Court itself has already declared final. The Court then
recalled in Navarro an entry of judgment after it had determined the
validity and constitutionality of Republic Act No. 9355, explaining that:
Verily, the Court had, on several occasions, sanctioned the recall of
entries of judgment in light of attendant extraordinary circumstances.
32
The power to suspend or even disregard rules of procedure can be so
pervasive and compelling as to alter even that which this Court itself
had already declared final. In this case, the compelling concern is not
only to afford the movants-intervenors the right to be heard since they
would be adversely affected by the judgment in this case despite not
being original parties thereto, but also to arrive at the correct
interpretation of the provisions of the [Local Government Code (LGC)]
with respect to the creation of local government units. x x
x.68(Citations omitted)
In Munoz v. CA,69 the Court resolved to recall an entry of judgment to
prevent a miscarriage of justice. This justification was likewise applied
in Tan Tiac Chiong v. Hon. Cosico,70 wherein the Court held that:
The recall of entries of judgments, albeit rare, is not a novelty. In
Muoz v. CA , where the case was elevated to this Court and a first
and second motion for reconsideration had been denied with finality ,
the Court, in the interest of substantial justice, recalled the Entry of
Judgment as well as the letter of transmittal of the records to the
Court of Appeals.71 (Citation omitted)
In Barnes v. Judge Padilla,72 we ruled:
A final and executory judgment can no longer be attacked by any of
the parties or be modified, directly or indirectly, even by the highest
court of the land.
However, this Court has relaxed this rule in order to serve substantial
justice considering (a) matters of life, liberty, honor or property, (b) the
existence of special or compelling circumstances, (c) the merits of the
case, (d) a cause not entirely attributable to the fault or negligence of
the party favored by the suspension of the rules, (e) a lack of any
showing that the review sought is merely frivolous and dilatory, and (f)
the other party will not be unjustly prejudiced thereby.73 (Citations
omitted)
As we shall explain, the instant case also qualifies as an exception to,
first, the proscription against second and subsequent motions for
reconsideration, and second, the rule on immutability of judgments; a
reconsideration of the Decision dated September 18, 2009, along with
the Resolutions dated December 14, 2009 and January 25, 2012, is
justified by the higher interest of substantial justice.
To begin with, the Court agrees with the respondents that the Courts
prior resolve to grant , and not just merely note, in a Resolution dated
March 15, 2010 the respondents motion for leave to submit their
second motion for reconsideration already warranted a resolution and
discussion of the motion for reconsideration on its merits. Instead of
doing this, however, the Court issued on January 25, 2012 a
Resolution74 denying the motion to reconsider for lack of merit, merely
citing that it was a "prohibited pleading under Section 2, Rule 52 in
relation to Section 4, Rule 56 of the 1997 Rules of Civil Procedure, as
amended."75 In League of Cities of the Philippines (LCP) v.
Commission on Elections,76 we reiterated a ruling that when a motion
for leave to file and admit a second motion for reconsideration is
granted by the Court, the Court therefore allows the filing of the
second motion for reconsideration. In such a case, the second motion
for reconsideration is no longer a prohibited pleading. Similarly in this
case, there was then no reason for the Court to still consider the
respondents second motion for reconsideration as a prohibited
pleading, and deny it plainly on such ground. The Court intends to
remedy such error through this resolution.
More importantly, the Court finds it appropriate to accept the pending
motion for reconsideration and resolve it on the merits in order to
rectify its prior disposition of the main issues in the petition. Upon
review, the Court is constrained to rule differently on the petitions. We
have determined the grave error in affirming the NLRCs rulings,
promoting results that are patently unjust for the respondents, as we
consider the facts of the case, pertinent law, jurisprudence, and the
degree of the injury and damage to the respondents that will inevitably
result from the implementation of the Courts Decision dated
September 18, 2009.
The rule on appeal bonds
We emphasize that the crucial issue in this case concerns the
sufficiency of the appeal bond that was posted by the respondents.
The present rule on the matter is Section 6, Rule VI of the 2011 NLRC
Rules of Procedure, which was substantially the same provision in
33
effect at the time of the respondents appeal to the NLRC, and which
reads:
RULE VI
APPEALS
Sec. 6. BOND. In case the decision of the Labor Arbiter or the
Regional Director involves a monetary award, an appeal by the
employer may be perfected only upon the posting of a cash or surety
bond. The appeal bond shall either be in cash or surety in an amount
equivalent to the monetary award, exclusive of damages and
attorneys fees.
xxxx
No motion to reduce bond shall be entertained except on meritorious
grounds and upon the posting of a bond in a reasonable amount in
relation to the monetary award.
The filing of the motion to reduce bond without compliance with the
requisites in the preceding paragraph shall not stop the running of the
period to perfect an appeal. (Emphasis supplied)
While the CA, in this case, allowed an appeal bond in the reduced
amount of 10,000,000.00 and then ordered the cases remand to the
NLRC, this Courts Decision dated September 18, 2009 provides
otherwise, as it reads in part:
The posting of a bond is indispensable to the perfection of an appeal
in cases involving monetary awards from the decision of the Labor
Arbiter. The lawmakers clearly intended to make the bond a
mandatory requisite for the perfection of an appeal by the employer as
inferred from the provision that an appeal by the employer may be
perfected "only upon the posting of a cash or surety bond." The word
"only" makes it clear that the posting of a cash or surety bond by the
employer is the essential and exclusive means by which an
employers appeal may be perfected. x x x.
Moreover, the filing of the bond is not only mandatory but a
jurisdictional requirement as well, that must be complied with in order
to confer jurisdiction upon the NLRC. Non-compliance therewith
renders the decision of the Labor Arbiter final and executory. This
requirement is intended to assure the workers that if they prevail in
the case, they will receive the money judgment in their favor upon the
dismissal of the employers appeal. It is intended to discourage
employers from using an appeal to delay or evade their obligation to
satisfy their employees just and lawful claims.
xxxx
Thus, it behooves the Court to give utmost regard to the legislative
and administrative intent to strictly require the employer to post a cash
or surety bond securing the full amount of the monetary award within
the 10[-]day reglementary period. Nothing in the Labor Code or the
NLRC Rules of Procedure authorizes the posting of a bond that is less
than the monetary award in the judgment, or would deem such
insufficient posting as sufficient to perfect the appeal.
While the bond may be reduced upon motion by the employer, this is
subject to the conditions that (1) the motion to reduce the bond shall
be based on meritorious grounds; and (2) a reasonable amount in
relation to the monetary award is posted by the appellant, otherwise
the filing of the motion to reduce bond shall not stop the running of the
period to perfect an appeal. The qualification effectively requires that
unless the NLRC grants the reduction of the cash bond within the 10-
day reglementary period, the employer is still expected to post the
cash or surety bond securing the full amount within the said 10-day
period. If the NLRC does eventually grant the motion for reduction
after the reglementary period has elapsed, the correct relief would be
to reduce the cash or surety bond already posted by the employer
within the 10-day period.77 (Emphasis supplied; underscoring ours)
To begin with, the Court rectifies its prior pronouncement the
unqualified statement that even an appellant who seeks a reduction of
an appeal bond before the NLRC is expected to post a cash or surety
bond securing the full amount of the judgment award within the 10-
day reglementary period to perfect the appeal.
The suspension of the period to
perfect the appeal upon the filing of
a motion to reduce bond
34
To clarify, the prevailing jurisprudence on the matter provides that the
filing of a motion to reduce bond, coupled with compliance with the
two conditions emphasized in Garcia v. KJ Commercial78 for the grant
of such motion, namely, (1) a meritorious ground, and (2) posting of a
bond in a reasonable amount, shall suffice to suspend the running of
the period to perfect an appeal from the labor arbiters decision to the
NLRC.79 To require the full amount of the bond within the 10-day
reglementary period would only render nugatory the legal provisions
which allow an appellant to seek a reduction of the bond. Thus, we
explained in Garcia:
The filing of a motion to reduce bond and compliance with the two
conditions stop the running of the period to perfect an appeal. x x x
xxxx
The NLRC has full discretion to grant or deny the motion to reduce
bond, and it may rule on the motion beyond the 10-day period within
which to perfect an appeal. Obviously, at the time of the filing of the
motion to reduce bond and posting of a bond in a reasonable amount,
there is no assurance whether the appellants motion is indeed based
on "meritorious ground" and whether the bond he or she posted is of a
"reasonable amount." Thus, the appellant always runs the risk of
failing to perfect an appeal.
x x x In order to give full effect to the provisions on motion to reduce
bond, the appellant must be allowed to wait for the ruling of the NLRC
on the motion even beyond the 10-day period to perfect an appeal. If
the NLRC grants the motion and rules that there is indeed meritorious
ground and that the amount of the bond posted is reasonable, then
the appeal is perfected. If the NLRC denies the motion, the appellant
may still file a motion for reconsideration as provided under Section
15, Rule VII of the Rules. If the NLRC grants the motion for
reconsideration and rules that there is indeed meritorious ground and
that the amount of the bond posted is reasonable, then the appeal is
perfected. If the NLRC denies the motion, then the decision of the
labor arbiter becomes final and executory.
xxxx
In any case, the rule that the filing of a motion to reduce bond shall
not stop the running of the period to perfect an appeal is not absolute.
The Court may relax the rule. In Intertranz Container Lines, Inc. v.
Bautista, the Court held:
"Jurisprudence tells us that in labor cases, an appeal from a decision
involving a monetary award may be perfected only upon the posting of
cash or surety bond. The Court, however, has relaxed this
requirement under certain exceptional circumstances in order to
resolve controversies on their merits. These circumstances include:
(1) fundamental consideration of substantial justice; (2) prevention of
miscarriage of justice or of unjust enrichment; and (3) special
circumstances of the case combined with its legal merits, and the
amount and the issue involved."80(Citations omitted and emphasis
ours)
A serious error of the NLRC was its outright denial of the motion to
reduce the bond, without even considering the respondents
arguments and totally unmindful of the rules and jurisprudence that
allow the bonds reduction. Instead of resolving the motion to reduce
the bond on its merits, the NLRC insisted on an amount that was
equivalent to the monetary award, merely explaining:
We are constrained to deny respondents motion for reduction. As
held by the Supreme Court in a recent case, in cases involving
monetary award, an employer seeking to appeal the Labor Arbiters
decision to the Commission is unconditionally required by Art. 223,
Labor Code to post bond in the amount equivalent to the monetary
award (Calabash Garments vs. NLRC, G.R. No. 110827, August 8,
1996). x x x81 (Emphasis ours)
When the respondents sought to reconsider, the NLRC still refused to
fully decide on the motion. It refused to at least make a preliminary
determination of the merits of the appeal, as it held:
We are constrained to dismiss respondents Motion for
Reconsideration. Respondents contention that the appeal bond is
excessive and based on a decision which is a patent nullity involves
the merits of the case. x x x82
35
Prevailing rules and jurisprudence
allow the reduction of appeal bonds.
By such haste of the NLRC in peremptorily denying the respondents
motion without considering the respondents arguments, it effectively
denied the respondents of their opportunity to seek a reduction of the
bond even when the same is allowed under the rules and settled
jurisprudence. It was equivalent to the NLRCs refusal to exercise its
discretion, as it refused to determine and rule on a showing of
meritorious grounds and the reasonableness of the bond tendered
under the circumstances.83 Time and again, the Court has cautioned
the NLRC to give Article 223 of the Labor Code, particularly the
provisions requiring bonds in appeals involving monetary awards, a
liberal interpretation in line with the desired objective of resolving
controversies on the merits.84 The NLRCs failure to take action on the
motion to reduce the bond in the manner prescribed by law and
jurisprudence then cannot be countenanced. Although an appeal by
parties from decisions that are adverse to their interests is neither a
natural right nor a part of due process, it is an essential part of our
judicial system. Courts should proceed with caution so as not to
deprive a party of the right to appeal, but rather, ensure that every
party has the amplest opportunity for the proper and just disposition of
their cause, free from the constraints of technicalities.85 Considering
the mandate of labor tribunals, the principle equally applies to them.
Given the circumstances of the case, the Courts affirmance in the
Decision dated September 18, 2009 of the NLRCs strict application of
the rule on appeal bonds then demands a re-examination. Again, the
emerging trend in our jurisprudence is to afford every party-litigant the
amplest opportunity for the proper and just determination of his cause,
free from the constraints of technicalities.86 Section 2, Rule I of the
NLRC Rules of Procedure also provides the policy that "the Rules
shall be liberally construed to carry out the objectives of the
Constitution, the Labor Code of the Philippines and other relevant
legislations, and to assist the parties in obtaining just, expeditious and
inexpensive resolution and settlement of labor disputes."87
In accordance with the foregoing, although the general rule provides
that an appeal in labor cases from a decision involving a monetary
award may be perfected only upon the posting of a cash or surety
bond, the Court has relaxed this requirement under certain
exceptional circumstances in order to resolve controversies on their
merits. These circumstances include: (1) the fundamental
consideration of substantial justice; (2) the prevention of miscarriage
of justice or of unjust enrichment; and (3) special circumstances of the
case combined with its legal merits, and the amount and the issue
involved.88 Guidelines that are applicable in the reduction of appeal
bonds were also explained in Nicol v. Footjoy Industrial
Corporation.89 The bond requirement in appeals involving monetary
awards has been and may be relaxed in meritorious cases, including
instances in which (1) there was substantial compliance with the
Rules, (2) surrounding facts and circumstances constitute meritorious
grounds to reduce the bond, (3) a liberal interpretation of the
requirement of an appeal bond would serve the desired objective of
resolving controversies on the merits, or (4) the appellants, at the very
least, exhibited their willingness and/or good faith by posting a partial
bond during the reglementary period.90
In Blancaflor v. NLRC,91 the Court also emphasized that while Article
22392 of the Labor Code, as amended by Republic Act No. 6715,
which requires a cash or surety bond in an amount equivalent to the
monetary award in the judgment appealed from may be considered a
jurisdictional requirement for the perfection of an appeal,
nevertheless, adhering to the principle that substantial justice is better
served by allowing the appeal on the merits to be threshed out by the
NLRC, the foregoing requirement of the law should be given a liberal
interpretation.
As the Court, nonetheless, remains firm on the importance of appeal
bonds in appeals from monetary awards of LAs, we stress that the
NLRC, pursuant to Section 6, Rule VI of the NLRC Rules of
Procedure, shall only accept motions to reduce bond that are coupled
with the posting of a bond in a reasonable amount. Time and again,
we have explained that the bond requirement imposed upon
appellants in labor cases is intended to ensure the satisfaction of
awards that are made in favor of appellees, in the event that their
claims are eventually sustained by the courts.93 On the part of the
appellants, its posting may also signify their good faith and willingness
to recognize the final outcome of their appeal.
At the time of a motion to reduce appeal bonds filing, the question of
what constitutes "a reasonable amount of bond" that must accompany
36
the motion may be subject to differing interpretations of litigants. The
judgment of the NLRC which has the discretion under the law to
determine such amount cannot as yet be invoked by litigants until
after their motions to reduce appeal bond are accepted.
Given these limitations, it is not uncommon for a party to unduly forfeit
his opportunity to seek a reduction of the required bond and thus, to
appeal, when the NLRC eventually disagrees with the partys
assessment. These have also resulted in the filing of numerous
petitions against the NLRC, citing an alleged grave abuse of
discretion on the part of the labor tribunal for its finding on the
sufficiency or insufficiency of posted appeal bonds.
It is in this light that the Court finds it necessary to set a parameter for
the litigants and the NLRCs guidance on the amount of bond that
shall hereafter be filed with a motion for a bonds reduction. To ensure
that the provisions of Section 6, Rule VI of the NLRC Rules of
Procedure that give parties the chance to seek a reduction of the
appeal bond are effectively carried out, without however defeating the
benefits of the bond requirement in favor of a winning litigant, all
motions to reduce bond that are to be filed with the NLRC shall be
accompanied by the posting of a cash or surety bond equivalent to
10% of the monetary award that is subject of the appeal, which shall
provisionally be deemed the reasonable amount of the bond in the
meantime that an appellants motion is pending resolution by the
Commission. In conformity with the NLRC Rules, the monetary award,
for the purpose of computing the necessary appeal bond, shall
exclude damages and attorneys fees.94 Only after the posting of a
bond in the required percentage shall an appellants period to perfect
an appeal under the NLRC Rules be deemed suspended.
The foregoing shall not be misconstrued to unduly hinder the NLRCs
exercise of its discretion, given that the percentage of bond that is set
by this guideline shall be merely provisional. The NLRC retains its
authority and duty to resolve the motion and determine the final
amount of bond that shall be posted by the appellant, still in
accordance with the standards of "meritorious grounds" and
"reasonable amount". Should the NLRC, after considering the
motions merit, determine that a greater amount or the full amount of
the bond needs to be posted by the appellant, then the party shall
comply accordingly. The appellant shall be given a period of 10 days
from notice of the NLRC order within which to perfect the appeal by
posting the required appeal bond.
Meritorious ground as a condition
for the reduction of the appeal bond
In all cases, the reduction of the appeal bond shall be justified by
meritorious grounds and accompanied by the posting of the required
appeal bond in a reasonable amount.
The requirement on the existence of a "meritorious ground" delves on
the worth of the parties arguments, taking into account their
respective rights and the circumstances that attend the case. The
condition was emphasized in University Plans Incorporated v.
Solano,95 wherein the Court held that while the NLRCs Revised Rules
of Procedure "allows the [NLRC] to reduce the amount of the bond,
the exercise of the authority is not a matter of right on the part of the
movant, but lies within the sound discretion of the NLRC upon a
showing of meritorious grounds."96 By jurisprudence, the merit
referred to may pertain to an appellants lack of financial capability to
pay the full amount of the bond,97 the merits of the main appeal such
as when there is a valid claim that there was no illegal dismissal to
justify the award,98 the absence of an employer-employee
relationship,99 prescription of claims,100 and other similarly valid issues
that are raised in the appeal.101 For the purpose of determining a
"meritorious ground", the NLRC is not precluded from receiving
evidence, or from making a preliminary determination of the merits of
the appellants contentions.102
In this case, the NLRC then should have considered the respondents
arguments in the memorandum on appeal that was filed with the
motion to reduce the requisite appeal bond. Although a consideration
of said arguments at that point would have been merely preliminary
and should not in any way bind the eventual outcome of the appeal, it
was apparent that the respondents defenses came with an indication
of merit that deserved a full review of the decision of the LA. The CA,
by its Resolution dated February 16, 2007, even found justified the
issuance of a preliminary injunction to enjoin the immediate execution
of the LAs decision, and this Court, a temporary restraining order on
September 4, 2012.
37
Significantly, following the CAs remand of the case to the NLRC, the
latter even rendered a Decision that contained findings that are
inconsistent with McBurnies claims. The NLRC reversed and set
aside the decision of the LA, and entered a new one dismissing
McBurnies complaint. It explained that McBurnie was not an
employee of the respondents; thus, they could not have dismissed
him from employment. The purported employment contract of the
respondents with the petitioner was qualified by the conditions set
forth in a letter dated May 11, 1999, which reads:
May 11, 1999
MR. ANDREW MCBURNIE
Re: Employment Contract
Dear Andrew,
It is understood that this Contract is made subject to the
understanding that it is effective only when the project financing for
our Baguio Hotel project pushed through.
The agreement with EGI Managers, Inc. is made now to support your
need to facilitate your work permit with the Department of Labor in
view of the expiration of your contract with Pan Pacific.
Regards,
Sgd. Eulalio Ganzon (p. 203, Records)103
For the NLRC, the employment agreement could not have given rise
to an employer-employee relationship by reason of legal impossibility.
The two conditions that form part of their agreement, namely, the
successful completion of the project financing for the hotel project in
Baguio City and McBurnies acquisition of an Alien Employment
Permit, remained unsatisfied.104 The NLRC concluded that McBurnie
was instead a potential investor in a project that included Ganzon, but
the said project failed to pursue due to lack of funds. Any work
performed by McBurnie in relation to the project was merely
preliminary to the business venture and part of his "due diligence"
study before pursuing the project, "done at his own instance, not in
furtherance of the employment contract but for his own investment
purposes."105 Lastly, the alleged employment of the petitioner would
have been void for being contrary to law, since it is undisputed that
McBurnie did not have any work permit. The NLRC declared:
Absent an employment permit, any employment relationship that
McBurnie contemplated with the respondents was void for being
contrary to law. A void or inexistent contract, in turn, has no force and
effect from the beginning as if it had never been entered into. Thus,
without an Alien Employment Permit, the "Employment Agreement" is
void and could not be the source of a right or obligation. In support
thereof, the DOLE issued a certification that McBurnie has neither
applied nor been issued an Alien Employment Permit (p. 204,
Records).106
McBurnie moved to reconsider, citing the Courts Decision of
September 18, 2009 that reversed and set aside the CAs Decision
authorizing the remand. Although the NLRC granted the motion on the
said ground via a Decision107that set aside the NLRCs Decision dated
November 17, 2009, the findings of the NLRC in the November 17,
2009 decision merit consideration, especially since the findings made
therein are supported by the case records.
In addition to the apparent merit of the respondents appeal, the Court
finds the reduction of the appeal bond justified by the substantial
amount of the LAs monetary award. Given its considerable amount,
we find reason in the respondents claim that to require an appeal
bond in such amount could only deprive them of the right to appeal,
even force them out of business and affect the livelihood of their
employees.108 In Rosewood Processing, Inc. v. NLRC,109 we
emphasized: "Where a decision may be made to rest on informed
judgment rather than rigid rules, the equities of the case must be
accorded their due weight because labor determinations should not
be secundum rationem but also secundum caritatem."110
What constitutes a reasonable
amount in the determination of the
final amount of appeal bond
38
As regards the requirement on the posting of a bond in a "reasonable
amount," the Court holds that the final determination thereof by the
NLRC shall be based primarily on the merits of the motion and the
main appeal.
Although the NLRC Rules of Procedure, particularly Section 6 of Rule
VI thereof, provides that the bond to be posted shall be "in a
reasonable amount in relation to the monetary award ," the merit of
the motion shall always take precedence in the determination. Settled
is the rule that procedural rules were conceived, and should thus be
applied in a manner that would only aid the attainment of justice. If a
stringent application of the rules would hinder rather than serve the
demands of substantial justice, the former must yield to the latter.111
Thus, in Nicol where the appellant posted a bond of 10,000,000.00
upon an appeal from the LAs award of 51,956,314.00, the Court,
instead of ruling right away on the reasonableness of the bonds
amount solely on the basis of the judgment award, found it
appropriate to remand the case to the NLRC, which should first
determine the merits of the motion. In University Plans,112 the Court
also reversed the outright dismissal of an appeal where the bond
posted in a judgment award of more than 30,000,000.00 was
30,000.00. The Court then directed the NLRC to first determine the
merit, or lack of merit, of the motion to reduce the bond, after the
appellant therein claimed that it was under receivership and thus,
could not dispose of its assets within a short notice. Clearly, the rule
on the posting of an appeal bond should not be allowed to defeat the
substantive rights of the parties.113
Notably, in the present case, following the CAs rendition of its
Decision which allowed a reduced appeal bond, the respondents have
posted a bond in the amount of 10,000,000.00. In Rosewood, the
Court deemed the posting of a surety bond of 50,000.00, coupled
with a motion to reduce the appeal bond, as substantial compliance
with the legal requirements for an appeal from a 789,154.39
monetary award "considering the clear merits which appear, res ipsa
loquitor, in the appeal from the LAs Decision, and the petitioners
substantial compliance with rules governing appeals."114 The
foregoing jurisprudence strongly indicate that in determining the
reasonable amount of appeal bonds, the Court primarily considers the
merits of the motions and appeals.
Given the circumstances in this case and the merits of the
respondents arguments before the NLRC, the Court holds that the
respondents had posted a bond in a "reasonable amount", and had
thus complied with the requirements for the perfection of an appeal
from the LAs decision. The CA was correct in ruling that:
In the case of Nueva Ecija I Electric Cooperative, Inc. (NEECO I)
Employees Association, President Rodolfo Jimenez, and members,
Reynaldo Fajardo, et al. vs. NLRC, Nueva Ecija I Electric
Cooperative, Inc. (NEECO I) and Patricio de la Pea (GR No. 116066,
January 24, 2000), the Supreme Court recognized that: "the NLRC, in
its Resolution No. 11-01-91 dated November 7, 1991 deleted the
phrase "exclusive of moral and exemplary damages as well as
attorneys fees in the determination of the amount of bond, and
provided a safeguard against the imposition of excessive bonds by
providing that "(T)he Commission may in meritorious cases and upon
motion of the appellant, reduce the amount of the bond."
In the case of Cosico, Jr. vs. NLRC, 272 SCRA 583, it was held:
"The unreasonable and excessive amount of bond would be
oppressive and unjust and would have the effect of depriving a party
of his right to appeal."
xxxx
In dismissing outright the motion to reduce bond filed by petitioners,
NLRC abused its discretion. It should have fixed an appeal bond in a
reasonable amount. Said dismissal deprived petitioners of their right
to appeal the Labor Arbiters decision.
xxxx
NLRC Rules allow reduction of appeal bond on meritorious grounds
(Sec. 6, Rule VI, NLRC Rules of Procedure). This Court finds the
appeal bond in the amount of 54,083,910.00 prohibitive and
excessive, which constitutes a meritorious ground to allow a motion
for reduction thereof.115
39
The foregoing declaration of the Court requiring a bond in a
reasonable amount, taking into account the merits of the motion and
the appeal, is consistent with the oft-repeated principle that letter-
perfect rules must yield to the broader interest of substantial justice.116
The effect of a denial of the appeal
to the NLRC
In finding merit in the respondents motion for reconsideration, we also
take into account the unwarranted results that will arise from an
implementation of the Courts Decision dated September 18, 2009.
We emphasize, moreover, that although a remand and an order upon
the NLRC to give due course to the appeal would have been the usual
course after a finding that the conditions for the reduction of an appeal
bond were duly satisfied by the respondents, given such results, the
Court finds it necessary to modify the CAs order of remand, and
instead rule on the dismissal of the complaint against the
respondents.
Without the reversal of the Courts Decision and the dismissal of the
complaint against the respondents, McBurnie would be allowed to
claim benefits under our labor laws despite his failure to comply with a
settled requirement for foreign nationals.
Considering that McBurnie, an Australian, alleged illegal dismissal
and sought to claim under our labor laws, it was necessary for him to
establish, first and foremost, that he was qualified and duly authorized
to obtain employment within our jurisdiction. A requirement for
foreigners who intend to work within the country is an employment
permit, as provided under Article 40, Title II of the Labor Code which
reads:
Art. 40. Employment permit for non-resident aliens. Any alien seeking
admission to the Philippines for employment purposes and any
domestic or foreign employer who desires to engage an alien for
employment in the Philippines shall obtain an employment permit from
the Department of Labor.
In WPP Marketing Communications, Inc. v. Galera,117 we held that a
foreign nationals failure to seek an employment permit prior to
employment poses a serious problem in seeking relief from the
Court.118 Thus, although the respondent therein appeared to have
been illegally dismissed from employment, we explained:
This is Galeras dilemma: Galera worked in the Philippines without
proper work permit but now wants to claim employees benefits under
Philippine labor laws.
xxxx
The law and the rules are consistent in stating that the employment
permit must be acquired prior to employment. The Labor Code states:
"Any alien seeking admission to the Philippines for employment
purposes and any domestic or foreign employer who desires to
engage an alien for employment in the Philippines shall obtain an
employment permit from the Department of Labor." Section 4, Rule
XIV, Book I of the Implementing Rules and Regulations provides:
"Employment permit required for entry. No alien seeking
employment, whether as a resident or non-resident, may enter the
Philippines without first securing an employment permit from the
Ministry. If an alien enters the country under a non-working visa and
wishes to be employed thereafter, he may be allowed to be employed
upon presentation of a duly approved employment permit."
Galera cannot come to this Court with unclean hands. To grant
Galeras prayer is to sanction the violation of the Philippine labor laws
requiring aliens to secure work permits before their employment. We
hold that the status quo must prevail in the present case and we leave
the parties where they are. This ruling, however, does not bar Galera
from seeking relief from other jurisdictions.119 (Citations omitted and
underscoring ours)
Clearly, this circumstance on the failure of McBurnie to obtain an
employment permit, by itself, necessitates the dismissal of his labor
complaint.
Furthermore, as has been previously discussed, the NLRC has ruled
in its Decision dated November 17, 2009 on the issue of illegal
dismissal. It declared that McBurnie was never an employee of any of
the respondents.120 It explained:
40
All these facts and circumstances prove that McBurnie was never an
employee of Eulalio Ganzon or the respondent companies, but a
potential investor in a project with a group including Eulalio Ganzon
and Martinez but said project did not take off because of lack of funds.
McBurnie further claims that in conformity with the provision of the
employment contract pertaining to the obligation of the respondents to
provide housing, respondents assigned him Condo Unit # 812 of the
Makati Cinema Square Condominium owned by the respondents. He
was also allowed to use a Hyundai car. If it were true that the contract
of employment was for working visa purposes only, why did the
respondents perform their obligations to him?
There is no question that respondents assigned him Condo Unit # 812
of the MCS, but this was not free of charge. If it were true that it is part
of the compensation package as employee, then McBurnie would not
be obligated to pay anything, but clearly, he admitted in his letter that
he had to pay all the expenses incurred in the apartment.
Assuming for the sake of argument that the employment contract is
valid between them, record shows that McBurnie worked from
September 1, 1999 until he met an accident on the last week of
October. During the period of employment, the respondents must
have paid his salaries in the sum of US$26,000.00, more or less.
However, McBurnie failed to present a single evidence that [the
respondents] paid his salaries like payslip, check or cash vouchers
duly signed by him or any document showing proof of receipt of his
compensation from the respondents or activity in furtherance of the
employment contract. Granting again that there was a valid contract of
employment, it is undisputed that on November 1, 1999, McBurnie left
for Australia and never came back. x x x.121(Emphasis supplied)
Although the NLRCs Decision dated November 17, 2009 was set
aside in a Decision dated January 14, 2010, the Courts resolve to
now reconsider its Decision dated September 18, 2009 and to affirm
the CAs Decision and Resolution in the respondents favor effectively
restores the NLRCs basis for rendering the Decision dated November
17, 2009.
More importantly, the NLRCs findings on the contractual relations
between McBurnie and the respondents are supported by the records.
First, before a case for illegal dismissal can prosper, an employer-
employee relationship must first be established.122 Although an
employment agreement forms part of the case records, respondent
Ganzon signed it with the notation "per my note."123 The respondents
have sufficiently explained that the note refers to the letter124dated
May 11, 1999 which embodied certain conditions for the
employments effectivity. As we have previously explained, however,
the said conditions, particularly on the successful completion of the
project financing for the hotel project in Baguio City and McBurnies
acquisition of an Alien Employment Permit, failed to materialize. Such
defense of the respondents, which was duly considered by the NLRC
in its Decision dated November 17, 2009, was not sufficiently rebutted
by McBurnie.
Second, McBurnie failed to present any employment permit which
would have authorized him to obtain employment in the Philippines.
This circumstance negates McBurnies claim that he had been
performing work for the respondents by virtue of an employer-
employee relationship. The absence of the employment permit
instead bolsters the claim that the supposed employment of McBurnie
was merely simulated, or did not ensue due to the non-fulfillment of
the conditions that were set forth in the letter of May 11, 1999.
Third, besides the employment agreement, McBurnie failed to present
other competent evidence to prove his claim of an employer-
employee relationship. Given the parties conflicting claims on their
true intention in executing the agreement, it was necessary to resort
to the established criteria for the determination of an employer-
employee relationship, namely: (1) the selection and engagement of
the employee; (2) the payment of wages; (3) the power of dismissal;
and (4) the power to control the employees conduct.125 The rule of
thumb remains: the onus probandi falls on the claimant to establish or
substantiate the claim by the requisite quantum of evidence. Whoever
claims entitlement to the benefits provided by law should establish his
or her right thereto.126 McBurnie failed in this regard.1wphi1 As
previously observed by the NLRC, McBurnie even failed to show
through any document such as payslips or vouchers that his salaries
during the time that he allegedly worked for the respondents were
41
paid by the company. In the absence of an employer-employee
relationship between McBurnie and the respondents, McBurnie could
not successfully claim that he was dismissed, much less illegally
dismissed, by the latter. Even granting that there was such an
employer-employee relationship, the records are barren of any
document showing that its termination was by the respondents
dismissal of McBurnie.
Given these circumstances, it would be a circuitous exercise for the
Court to remand the case to the NLRC, more so in the absence of any
showing that the NLRC should now rule differently on the cases
merits. In Medline Management, Inc. v. Roslinda,127 the Court ruled
that when there is enough basis on which the Court may render a
proper evaluation of the merits of the case, the Court may dispense
with the time-consuming procedure of remanding a case to a labor
tribunal in order "to prevent delays in the disposition of the case," "to
serve the ends of justice" and when a remand "would serve no
purpose save to further delay its disposition contrary to the spirit of fair
play."128 In Real v. Sangu Philippines, Inc.,129 we again ruled:
With the foregoing, it is clear that the CA erred in affirming the
decision of the NLRC which dismissed petitioners complaint for lack
of jurisdiction. In cases such as this, the Court normally remands the
case to the NLRC and directs it to properly dispose of the case on the
merits. "However, when there is enough basis on which a proper
evaluation of the merits of petitioners case may be had, the Court
may dispense with the time-consuming procedure of remand in order
to prevent further delays in the disposition of the case." "It is already
an accepted rule of procedure for us to strive to settle the entire
controversy in a single proceeding, leaving no root or branch to bear
the seeds of litigation. If, based on the records, the pleadings, and
other evidence, the dispute can be resolved by us, we will do so to
serve the ends of justice instead of remanding the case to the lower
court for further proceedings." x x x.130 (Citations omitted)
It bears mentioning that although the Court resolves to grant the
respondents motion for reconsideration, the other grounds raised in
the motion, especially as they pertain to insinuations on irregularities
in the Court, deserve no merit for being founded on baseless
conclusions. Furthermore, the Court finds it unnecessary to discuss
the other grounds that are raised in the motion, considering the
grounds that already justify the dismissal of McBurnies complaint.
All these considered, the Court also affirms its Resolution dated
September 4, 2012; accordingly, McBurnies motion for
reconsideration thereof is denied.
WHEREFORE, in light of the foregoing, the Court rules as follows:
(a) The motion for reconsideration filed on September 26,
2012 by petitioner Andrew James McBurnie is DENIED;
(b) The motion for reconsideration filed on March 27, 2012 by
respondents Eulalio Ganzon, EGI-Managers, Inc. and E.
Ganzon, Inc. is GRANTED.
(c) The Entry of Judgment issued in G.R. Nos. 186984-85 is
LIFTED. This Courts Decision dated September 18, 2009 and
Resolutions dated December 14, 2009 and January 25, 2012
are SET ASIDE. The Court of Appeals Decision dated October
27, 2008 and Resolution dated March 3, 2009 in CA-G.R. SP
No. 90845 and CA-G.R. SP No. 95916 are AFFIRMED WITH
MODIFICATION. In lieu of a remand of the case to the
National Labor Relations Commission, the complaint for illegal
dismissal filed by petitioner Andrew James McBurnie against
respondents Eulalio Ganzon, EGI-Managers, Inc. and E.
Ganzon, Inc. is DISMISSED.
Furthermore, on the matter of the filing and acceptance of motions to
reduce appeal bond, as provided in Section 6, Rule VI of the 2011
NLRC Rules of Procedure, the Court hereby RESOLVES that
henceforth, the following guidelines shall be observed:
(a) The filing o a motion to reduce appeal bond shall be
entertained by the NLRC subject to the following conditions:
(1) there is meritorious ground; and (2) a bond in a reasonable
amount is posted;
(b) For purposes o compliance with condition no. (2), a motion
shall be accompanied by the posting o a provisional cash or
42
 surety bond equivalent to ten percent (10,) of the monetary
award subject o the appeal, exclusive o damages and
attorney's fees;

(c) Compliance with the foregoing conditions shall suffice to

suspend the running o the 1 0-day reglementary period to
perfect an appeal from the labor arbiter's decision to the
NLRC;

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

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

SO ORDERED.

43
FIRST DIVISION installed five (5) rock bolt support, and drilled eight (8) blast holes for
the mid-shift blast. They then had their meal break. When they went
[ G.R. No. 196047, January 15, 2014 ] back to their workplace, they again barred down loose rocks and
drilled eight (8) more blast holes for the last round of blast. While
waiting for the time to ignite their round, one of his co-workers
LEPANTO CONSOLIDATED MINING CORPORATION,
shouted to prepare the explosives for blasting, prompting private
PETITIONER, VS. BELIO ICAO, RESPONDENT.
respondent to run to the adjacent panels and warn the other miners.
Thereafter, he decided to take a bath and proceeded at [sic] the
DECISION
bathing station where four (4) of his co-workers were also present.
SERENO, C.J.:
Before he could join them, he heard a voice at his back and saw
This Petition under Rule 45 of the Rules of Court seeks to annul and Security Guard (SG) Larry Bulwayan instructing his companion SG
set aside the Court of Appeals (CA) Decision dated 27 September Dale Papsa-ao to frisk him. As private respondent was removing his
2010 and the Resolution dated 11 March 2011 in CA-G.R. SP. No. boots, SG Bulwayan forcibly pulled his skullguard from his head
113095.[1] In the assailed Decision and Resolution, the CA upheld the causing it to fall down [sic] to the ground including its harness and his
Order of the National Labor and Relations Commission (NLRC) First detergent soap which was inserted in the skullguard harness. A few
Division dismissing petitioner's appeal for allegedly failing to post an minutes later, private respondent saw SG Bulwayan [pick] up a
appeal bond as required by the Labor Code. Petitioner had instead wrapped object at the bathing station and gave it to his companion.
filed a motion to release the cash bond it posted in another NLRC SGs Bulwayan and Papsa-ao invited the private respondent to go with
case which had been decided with finality in its favor with a view to them at the investigation office to answer questions regarding the
applying the bond to the appealed case before the NLRC First wrapped object. He was then charged with "highgrading" or the act of
Division. Hence, the Court is now asked to rule whether petitioner had concealing, possessing or unauthorized extraction of highgrade
complied with the appeal bond requirement. If it had, its appeal before material/ore without proper authority. Private respondent vehemently
the NLRC First Division should be reinstated. denied the charge. Consequently, he was dismissed from his work.

THE FACTS Private respondent claimed that his dismissal from work was without
just or authorized cause since petitioners failed to prove by ample and
We quote the CA's narration of facts as follows: sufficient evidence that he stole gold bearing highgrade ores from the
company premises. If private respondent was really placing a
wrapped object inside his boots, he should have been sitting or
The instant petition stemmed from a complaint for illegal dismissal bending down to insert the same, instead of just standing on a
and damages filed by private respondent Belio C. Icao [Icao] against muckpile as alleged by petitioners. Moreover, it is beyond imagination
petitioners Lepanto Consolidated Mining Company (LCMC) and its that a person, knowing fully well that he was being chased for
Chief Executive Officer [CEO] Felipe U. Yap [Yap] before the allegedly placing wrapped ore inside his boots, will transfer it to his
Arbitration Branch of the NLRC. skullguard. The tendency in such situation is to throw the object away.
As such, private respondent prayed that petitioners be held liable for
Private respondent essentially alleged in his complaint that he was an illegal dismissal, to reinstate him to his former position without loss of
employee of petitioner LCMC assigned as a lead miner in its seniority rights and benefits, and to pay his full backwages, damages
underground mine in Paco, Mankayan, Benguet. On January 4, 2008, and attorney's fees.
private respondent reported for the 1st shift of work (11:00 p.m. to
7:00 a.m.) and was assigned at 248-8M2, 750 Level of the mining For their defense, petitioners averred that SG Bulwayan saw private
area. At their workplace, private respondent did some barring down, respondent standing on a muckpile and inserting a wrapped object

44
inside his right rubber boot. SG Bulwayan immediately ran towards
private respondent, but the latter ran away to escape. He tried to
chase private respondent but failed to capture him. Thereafter, while
SG Bulwayan was on his way to see his co-guard SG Papsa-ao, he
saw private respondent moving out of a stope. He then shouted at SG
Papsa-ao to intercept him. When private respondent was
apprehended, SG Bulwayan ordered him to remove his skullguard for
inspection and saw a wrapped object placed inside the helmet. SG
Bulwayan grabbed it, but the harness of the skullguard was also
detached causing the object to fall on the ground. Immediately, SG
Bulwayan recovered and inspected the same which turned out to be
pieces of stone ores. Private respondent and the stone ores were
later turned over to the Mankayan Philippine National Police where he
was given a written notice of the charge against him. On January 9,
2008, a hearing was held where private respondent, together with the
officers of his union as well as the apprehending guards appeared. On
February 4, 2008, private respondent received a copy of the
resolution of the company informing him of his dismissal from
employment due to breach of trust and confidence and the act of
highgrading.[2]
THE LABOR ARBITER'S RULING THAT
PETITIONER LCMC IS LIABLE FOR ILLEGAL DISMISSAL
On 30 September 2008, the labor arbiter rendered a Decision holding
petitioner and its CEO liable for illegal dismissal and ordering them to
pay respondent Icao P345,879.45, representing his full backwages
and separation pay.[3] The alleged highgrading attributed by LCMC's
security guards was found to have been fabricated; consequently,
there was no just cause for the dismissal of respondent. The labor
arbiter concluded that the claim of the security guards that Icao had
inserted ores in his boots while in a standing position was not in
accord with normal human physiological functioning.[4]
The labor arbiter also noted that it was inconsistent with normal
human behavior for a man, who knew that he was being chased for
allegedly placing wrapped ore inside his boots, to then transfer the ore
to his skullguard, where it could be found once he was
apprehended.[5] To further support the improbability of the allegation of
highgrading, the labor arbiter noted that throughout the 21 years of
service of Icao to LCMC, he had never been accused of or penalized
for highgrading or any other infraction involving moral turpitude until
this alleged incident.[6]
THE NLRC ORDER DISMISSING THE APPEAL
OF PETITIONER LCMC FOR FAILURE TO POST THE APPEAL
BOND
On 8 December 2008, petitioner and its CEO filed an Appearance
with Memorandum of Appeal[7] before the NLRC. Instead of posting
the required appeal bond in the form of a cash bond or a surety bond
in an amount equivalent to the monetary award of P345,879.45
adjudged in favor of Icao, they filed a Consolidated Motion For
Release Of Cash Bond And To Apply Bond Subject For Release As
Payment For Appeal Bond (Consolidated Motion).[8] They requested
therein that the NLRC release the cash bond of P401,610.84, which
they had posted in the separate case Dangiw Siggaao v. LCMC,[9] and
apply that same cash bond to their present appeal bond liability. They
reasoned that since this Court had already decided Dangiw
Siggaao in their favor, and that the ruling therein had become final
and executory, the cash bond posted therein could now be
released.[10] They also cited financial difficulty as a reason for
resorting to this course of action and prayed that, in the interest of
justice, the motion be granted.
In its Order dated 27 February 2009, the NLRC First Division
dismissed the appeal of petitioner and the latter's CEO for non-
perfection.[11] It found that they had failed to post the required appeal
bond equivalent to the monetary award of P345,879.45. It explained
that their Consolidated Motion for the release of the cash bond in
another case (Dangiw Siggaao), for the purpose of applying the same
bond to the appealed case before it, could not be considered as
compliance with the requirement to post the required appeal bond.
Consequently, it declared the labor arbiter's Decision to be final and
executory. The pertinent portions of the assailed Order are quoted
below:
45
The rules are clear. Appeals from decision involving a monetary
award maybe [sic] perfected only upon posting of a cash or surety-
bond within the ten (10) day reglementary period for filing an appeal.
Failure to file and post the required appeal bond within the said period
results in the appeal not being perfected and the appealed judgment
becomes final and executory. Thus, the Commission loses authority to
entertain or act on the appeal much less reverse the decision of the
Labor Arbiter (Gaudia vs. NLRC, 318 SCRA 439).
In this case, respondents failed to post the required appeal bond
equivalent to the monetary award of P345,879.45. The
Consolidated Motion for Release of Cash Bond (posted as appeal
bond in another case) with prayer to apply the bond to be
released as appeal bond may not be considered as compliance
with the jurisdictional requirement, as the application or posting
is subject to the condition that the cash bond would be released.
Besides, even if the motion for release is approved, the ten (10)
day period has long expired, rendering the statutory right to
appeal forever lost.
WHEREFORE, respondents' appeal is hereby DISMISSED for non-
perfection and the questioned decision is declared as having become
final and executory. Let the Motion for Release of Cash bond be
forwarded to the Third Division, this Commission, for appropriate
action.
SO ORDERED.[12] (Emphasis supplied)
Petitioner and its CEO filed a Motion for Reconsideration. They
emphasized therein that they had tried to comply in good faith with the
requisite appeal bond by trying to produce a cash bond anew and also
to procure a new surety bond. However, after canvassing several
bonding companies, the costs have proved to be
prohibitive.[13] Hence, they resorted to using the cash bond they
posted in Dangiw Siggaao because the bond was now free,
unencumbered and could rightfully be withdrawn and used by
them.[14] Their motion was denied in a Resolution dated 27 November
2009. Hence, they filed a Petition for Certiorari with the CA.
THE CA RULING AFFIRMING THE ORDER OF THE NLRC
On 27 September 2010, the CA issued its assailed
Decision[15] affirming the Order of the NLRC First Division, which had
dismissed the appeal of petitioner and the latter's CEO. According to
the CA, they failed to comply with the requirements of law and
consequently lost the right to appeal.[16]
The CA explained that under Article 223 of the Labor Code, an appeal
from the labor arbiter's Decision must be filed within 10 calendar days
from receipt of the decision. In case of a judgment involving a
monetary award, the posting of a cash or surety bond in an amount
equivalent to the monetary award is mandatory for the perfection of an
appeal. In the instant case, the CA found that petitioner and its CEO
did not pay the appeal fees and the required appeal bond equivalent
to P345,879.45. Instead, it filed a Consolidated Motion praying that
the cash bond it had previously posted in another labor case be
released and applied to the present one. According to the CA, this
arrangement is not allowed under the rules of procedure of the
NLRC.[17]
Furthermore, the CA said that since the payment of appeal fees and
the posting of an appeal bond are indispensable jurisdictional
requirements, noncompliance with them resulted in petitioner's failure
to perfect its appeal. Consequently, the labor arbiter's Decision
became final and executory and, hence, binding upon the appellate
court.[18]
Nevertheless, the CA ruled that the CEO of petitioner LCMC should
be dropped as a party to this case.[19] No specific act was alleged in
private respondent's pleadings to show that he had a hand in Icao's
illegal dismissal; much less, that he acted in bad faith. In fact, the
labor arbiter did not cite any factual or legal basis in its Decision that
would render the CEO liable to respondent. The rule is that in the
absence of bad faith, an officer of a corporation cannot be made
personally liable for corporate liabilities.
46
 monetary award in the judgment appealed from. (Emphasis and
THE ISSUE underlining supplied)

The sole issue before the Court is whether or not petitioner complied The 2011 NLRC Rules of Procedure (NLRC Rules) incorporates this
with the appeal bond requirement under the Labor Code and the requirement in Rule VI, Section 6, which provides:
NLRC Rules by filing a Consolidated Motion to release the cash bond
it posted in another case, which had been decided with finality in its
favor, with a view to applying the same cash bond to the present SECTION 6. Bond. In case the decision of the Labor Arbiter or the
case. Regional Director involves a monetary award, an appeal by the
employer may be perfected only upon the posting of a bond,
which shall either be in the form of cash deposit or surety bond
Our Ruling equivalent in amount to the monetary award, exclusive of damages
and attorney's fees.
The Petition is meritorious. The Court finds that petitioner substantially (Emphases and underlining supplied)
complied with the appeal bond requirement.
In Viron Garments Manufacturing Co., Inc. v. NLRC,[21] the Court
Before discussing its ruling, however, the Court finds it necessary to explained the mandatory nature of this requirement as follows:
emphasize the well-entrenched doctrine that an appeal is not a matter
of right, but is a mere statutory privilege. It may be availed of only in
the manner provided by law and the rules. Thus, a party who seeks to The intention of the lawmakers to make the bond an indispensable
exercise the right to appeal must comply with the requirements of the requisite for the perfection of an appeal by the employer, is clearly
rules; otherwise, the privilege is lost.[20] limned in the provision that an appeal by the employer may be
perfected "only upon the posting of a cash or surety bond." The word
In appeals from any decision or order of the labor arbiter, the posting "only" makes it perfectly clear, that the lawmakers intended the
of an appeal bond is required under Article 223 of the Labor Code, posting of a cash or surety bond by the employer to be the exclusive
which reads: means by which an employer's appeal may be perfected. (Emphases
supplied)

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. Such appeal may be entertained only on
any of the following grounds:
x x x x
In case of a judgment involving a monetary award, an appeal by
the employer may be perfected only upon 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
We now turn to the main question of whether petitioner's Consolidated
Motion to release the cash bond it posted in a previous case, for
application to the present case, constitutes compliance with the
appeal bond requirement. While it is true that the procedure
undertaken by petitioner is not provided under the Labor Code or in
the NLRC Rules, we answer the question in the affirmative.
We reiterate our pronouncement in Araneta v. Rodas,[22] where the
Court said that when the law does not clearly provide a rule or norm
for the tribunal to follow in deciding a question submitted, but leaves
to the tribunal the discretion to determine the case in one way or
another, the judge must decide the question in conformity with justice,
reason and equity, in view of the circumstances of the case. Applying

47
this doctrine, we rule that petitioner substantially complied with the
mandatory requirement of posting an appeal bond for the reasons
explained below.
First, there is no question that the appeal was filed within the 10-day
reglementary period.[23] Except for the alleged failure to post an
appeal bond, the appeal to the NLRC was therefore in order.
Second, it is also undisputed that petitioner has an unencumbered
amount of money in the form of cash in the custody of the NLRC. To
reiterate, petitioner had posted a cash bond of P401,610.84 in the
separate case Dangiw Siggaao, which was earlier decided in its favor.
As claimed by petitioner and confirmed by the Judgment Division of
the Judicial Records Office of this Court, the Decision of the Court
inDangiw Siggaao had become final and executory as of 28 April
2008, or more than seven months before petitioner had to file its
appeal in the present case. This fact is shown by the Entry of
Judgment on file with the aforementioned office. Hence, the cash
bond in that case ought to have been released to petitioner then.
Under the Rule VI, Section 6 of the 2005 NLRC Rules, "[a] cash or
surety bond shall be valid and effective from the date of deposit or
posting, until the case is finally decided, resolved or terminated, or the
award satisfied." Hence, it is clear that a bond is encumbered and
bound to a case only for as long as 1) the case has not been finally
decided, resolved or terminated; or 2) the award has not been
satisfied. Therefore, once the appeal is finally decided and no award
needs to be satisfied, the bond is automatically released. Since the
money is now unencumbered, the employer who posted it should now
have unrestricted access to the cash which he may now use as he
pleases as appeal bond in another case, for instance. This is what
petitioner simply did.
Third, the cash bond in the amount of P401,610.84 posted in Dangiw
Siggaao is more than enough to cover the appeal bond in the amount
of P345,879.45 required in the present case.
Fourth, this ruling remains faithful to the spirit behind the appeal bond
requirement which is to ensure that workers will receive the money
awarded in their favor when the employer's appeal eventually
fails.[24] There was no showing at all of any attempt on the part of
petitioner to evade the posting of the appeal bond. On the contrary,
petitioner's move showed a willingness to comply with the
requirement. Hence, the welfare of Icao is adequately protected.
Moreover, this Court has liberally applied the NLRC Rules and the
Labor Code provisions on the posting of an appeal bond in
exceptional cases. In Your Bus Lines v. NLRC,[25] the Court excused
the appellant's failure to post a bond, because it relied on the notice of
the decision. While the notice enumerated all the other requirements
for perfecting an appeal, it did not include a bond in the list.
InBlancaflor v. NLRC,[26] the failure of the appellant therein to post a
bond was partly caused by the labor arbiter's failure to state the exact
amount of monetary award due, which would have been the basis of
the amount of the bond to be posted. In Cabalan Pastulan Negrito
Labor Association v. NLRC,[27] petitioner-appellant was an association
of Negritos performing trash-sorting services in the American naval
base in Subic Bay. The plea of the association that its appeal be given
due course despite its non-posting of a bond, on account of its
insolvency and poverty, was granted by this Court. In UERM-
Memorial Medical Center v. NLRC,[28] we allowed the appellant-
employer to post a property bond in lieu of a cash or surety bond. The
assailed judgment involved more than P17 million; thus, its execution
could adversely affect the economic survival of the employer, which
was a medical center.
If in the above-cited cases, the Court found exceptional circumstances
that warranted an extraordinary exercise of its power to exempt a
party from the rules on appeal bond, there is all the more reason in
the present case to find that petitioner substantially complied with the
requirement. We emphasize that in this case we are not even
exempting petitioner from the rule, as in fact we are enforcing
compliance with the posting of an appeal bond. We are simply
liberally applying the rules on what constitutes compliance with the
requirement, given the special circumstances surrounding the case as
explained above.
Having complied with the appeal bond requirement, petitioner's
appeal before the NLRC must therefore be reinstated.
Finally, a word of caution. Lest litigants be misled into thinking that
they may now wantonly disregard the rules on appeal bond in labor
48
cases, we reiterate the mandatory nature of the requirement. The
Court will liberally apply the rules only in very highly exceptional cases
such as this, in keeping with the dictates of justice, reason and equity.

WHEREFORE, premises considered, the instant Rule 45 Petition

is GRANTED. The Court of Appeals Decision dated 27 September
2010 and its Resolution dated 11 March 2011 in CA-G.R. SP. No.
113095, which dismissed petitioner's Rule 65 Petition, are
herebyREVERSED. Finally, the National Labor Relations Commission
Resolutions dated 27 February 2009 and 27 November 2009 are SET
ASIDE, and the appeal of petitioner before it is hereby REINSTATED.

SO ORDERED.

49
[G.R. No. 126322. January 16, 2002]
YUPANGCO COTTON MILLS, INC., petitioner, vs. COURT OF
APPEALS, HON. URBANO C. VICTORIO, SR., Presiding Judge,
RTC Branch 50, Manila, RODRIGO SY MENDOZA, SAMAHANG
MANGGAGAWA NG ARTEX (SAMAR-ANGLO) represented by its
Local President RUSTICO CORTEZ, and WESTERN GUARANTY
CORPORATION,respondents.
The Case
The case is a petition for review on certiorari of the decision of the
Court of Appeals[1] dismissing the petition ruling that petitioner was
guilty of forum shopping and that the proper remedy was appeal in
due course, not certiorari or mandamus.
In its decision, the Court of Appeals sustained the trial courts
ruling that the remedies granted under Section 17, Rule 39 of the
Rules of Court are not available to the petitioner because the Manual
of Instructions for Sheriffs of the NLRC does not include the remedy of
an independent action by the owner to establish his right to his
property.
The Facts
The facts, as found by the Court of Appeals, are as follows:
From the records before us and by petitioners own allegations and
admission, it has taken the following actions in connection with its
claim that a sheriff of the National Labor Relations Commission
erroneously and unlawfully levied upon certain properties which it
claims as its own.
1. It filed a notice of third-party claim with the Labor Arbiter on May 4,
1995.
2. It filed an Affidavit of Adverse Claim with the National Labor
Relations Commission (NLRC) on July 4, 1995, which was dismissed
on August 30, 1995, by the Labor Arbiter.
3. It filed a petition for certiorari and prohibition with the Regional Trial
Court of Manila, Branch 49, docketed as Civil Case No. 95-75628 on
October 6, 1995. The Regional Trial Court dismissed the case on
October 11, 1995 for lack of merit.
4. It appealed to the NLRC the order of the Labor Arbiter dated
August 13, 1995 which dismissed the appeal for lack of merit on
December 8, 1995.
5. It filed an original petition for mandatory injunction with the NLRC
on November 16, 1995. This was docketed as Case No. NLRC-NCR-
IC. 0000602-95. This case is still pending with that Commission.
6. It filed a complaint in the Regional Trial Court in Manila which was
docketed as Civil Case No. 95-76395. The dismissal of this case by
public respondent triggered the filing of the instant petition.
In all of the foregoing actions, petitioner raised a common issue,
which is that it is the owner of the properties located in the compound
and buildings of Artex Development Corporation, which were
erroneously levied upon by the sheriff of the NLRC as a consequence
of the decision rendered by the said Commission in a labor case
docketed as NLRC-NCR Case No. 00-05-02960-90.[2]
On March 29, 1996, the Court of Appeals promulgated a
decision[3] dismissing the petition on the ground of forum shopping
and that petitioners remedy was to seek relief from this Court.
On April 18, 1996, petitioner filed with the Court of Appeals a
motion for reconsideration of the decision.[4]Petitioner argued that the
filing of a complaint for accion reinvindicatoria with the Regional Trial
Court was proper because it is a remedy specifically granted to an
owner (whose properties were subjected to a writ of execution to
enforce a decision rendered in a labor dispute in which it was not a
50
party) by Section 17 (now 16), Rule 39, Revised Rules of Court and
by the doctrines laid down in Sy v. Discaya,[5] Santos v. Bayhon[6] and
Manliguez v. Court of Appeals.[7]
In addition, petitioner argued that the reliefs sought and the
issues involved in the complaint for recovery of property and damages
filed with the Regional Trial Court of Manila, presided over by
respondent judge, were entirely distinct and separate from the reliefs
sought and the issues involved in the proceedings before the Labor
Arbiter and the NLRC. Besides, petitioner pointed out that neither the
NLRC nor the Labor Arbiter is empowered to adjudicate matters
involving ownership of properties.
On August 27, 1996, the Court of Appeals denied petitioners
motion for reconsideration.[8]
Hence, this appeal.[9]
The Issues
The issues raised are (1) whether the Court of Appeals erred in
ruling that petitioner was guilty of forum shopping, and (2) whether the
Court of Appeals erred in dismissing the petitioners accion
reinvindicatoria on the ground of lack of jurisdiction of the trial court.
The Courts Ruling
On the first issue raised, we rule that there was no forum
shopping.
In Golangco v. Court of Appeals,[10] we held:
What is truly important to consider in determining whether forum
shopping exists or not is the vexation caused the courts and parties-
litigant by a party who asks different courts and/or administrative
agencies to rule on the same or related causes and/or grant the same
or substantially the same reliefs, in the process creating possibility of
conflicting decisions being rendered by the different for a upon the
same issues.
xxx xxx xxx
There is no forum-shopping where two
different orders were questioned, two distinct causes of action and
issues were raised, and two objectives were sought. (Underscoring
ours)
In the case at bar, there was no identity of parties, rights and
causes of action and reliefs sought.
The case before the NLRC where Labor Arbiter Reyes issued a
writ of execution on the property of petitioner was a labor dispute
between Artex and Samar-Anglo. Petitioner was not a party to the
case. The only issue petitioner raised before the NLRC was whether
or not the writ of execution issued by the labor arbiter could be
satisfied against the property of petitioner, not a party to the labor
case.
On the other hand, the accion reinvindicatoria filed by petitioner in
the trial court was to recover the property illegally levied upon and
sold at auction. Hence, the causes of action in these cases were
different.
The rule is that for forum-shopping to exist both actions must
involve the same transactions, the same circumstances. The actions
must also raise identical causes of action, subject matter and
issues.[11]
In Chemphil Export & Import Corporation v. Court of
Appeals,[12] we ruled that:
Forum-shopping or the act of a party against whom an adverse
judgment has been rendered in one forum, of seeking another (and
possible) opinion in another forum (other than by appeal or the special
civil action of certiorari), or the institution of two (2) or more actions or
proceedings grounded on the same cause on the supposition that one
or the other would make a favorable disposition.
On the second issue, a third party whose property has been
levied upon by a sheriff to enforce a decision against a judgment
debtor is afforded with several alternative remedies to protect its
interests. The third party may avail himself of alternative remedies
cumulatively, and one will not preclude the third party from availing
51
himself of the other alternative remedies in the event he failed in the
remedy first availed of.
Thus, a third party may avail himself of the following alternative
remedies:
a) File a third party claim with the sheriff of the Labor Arbiter,
and
b) If the third party claim is denied, the third party may appeal
the denial to the NLRC.[13]
Even if a third party claim was denied, a third party may still file a
proper action with a competent court to recover ownership of the
property illegally seized by the sheriff. This finds support in Section 17
(now 16), Rule 39, Revised Rules of Court, to wit:
SEC. 17 (now 16). Proceedings where property claimed by third
person. -If property claimed by any other person than the judgment
debtor or his agent, and such person makes an affidavit of his title
thereto or right to the possession thereof, stating the grounds of such
right or title, and serve the same upon the officer making the levy, and
a copy thereof upon the judgment creditor, the officer shall not be
bound to keep the property, unless such judgment creditor or his
agent, on demand of the officer, indemnify the officer against such
claim by a bond in a sum not greater than the value of the property
levied on. In case of disagreement as to such value, the same shall
be determined by the court issuing the writ of execution.
The officer is not liable for damages, for the taking or keeping of the
property, to any third-party claimant unless a claim is madeby the
latter and unless an action for damages is brought by him against the
officer within one hundred twenty (120) days from the date of the filing
of the bond. But nothing herein contained shall prevent such claimant
or any third person from vindicating his claim to the property by any
proper action.
When the party in whose favor the writ of execution runs, is the
Republic of the Philippines, or any officer duly representing it, the
filing of such bond shall not be required, and in case the sheriff or
levying officer is sued for damages as a result of the levy, he shall be
represented by the Solicitor General and if held liable therefor, the
actual damages adjudged by the court shall be paid by the National
Treasurer out of such funds as may be appropriated for the purpose.
(Underscoring ours)
In Sy v. Discaya,[14] we ruled that:
The right of a third-party claimant to file an independent action to
vindicate his claim of ownership over the properties seized is reserved
by Section 17 (now 16), Rule 39 of the Rules of Court, x x x:
xxxxxxxxx
As held in the case of Ong v. Tating, et. al., construing the aforecited
rule, a third person whose property was seized by a sheriff to answer
for the obligation of a judgment debtor may invoke the supervisory
power of the court which authorized such execution. Upon due
application by the third person and after summary hearing, the court
may command that the property be released from the mistaken levy
and restored to the rightful owner or possessor. What said court do in
these instances, however, is limited to a determination of whether the
sheriff has acted rightly or wrongly in the performance of his duties in
the execution of judgment, more specifically, if he has indeed taken
hold of property not belonging to the judgment debtor. The court
does not and cannot pass upon the question of title to the property,
with any character of finality. It can treat of the matter only insofar as
may be necessary to decide if the sheriff has acted correctly or not. It
can require the sheriff to restore the property to the claimants
possession if warranted by the evidence. However, if the claimants
proof do not persuade the court of the validity of his title or right of
possession thereto, the claim will be denied.
Independent of the above-stated recourse, a third-party claimant may
also avail of the remedy known as terceria, provided in Section 17
(now 16), Rule 39, by serving on the officer making the levy an
affidavit of his title and a copy thereof upon the judgment creditor. The
officer shall not be bound to keep the property, unless such judgment
creditor or his agent, on demand of the officer, indemnifies the officer
against such claim by a bond in a sum not greater than the value of
the property levied on. An action for damages may be brought against
the sheriff within one hundred twenty (120) days from the filing of the
bond.
52
The aforesaid remedies are nevertheless without prejudice to any
proper action that a third-party claimant may deem suitable to
vindicate his claim to the property. Such a proper action is, obviously,
entirely distinct from that explicitly prescribed in Section 17 of Rule
39, which is an action for damages brought by a third-party claimant
against the officer within one hundred twenty (120) days from the date
of the filing of the bond for the taking or keeping of the property
subject of the terceria.
Quite obviously, too, this proper action would have for its object the
recovery of ownership or possession of the property seized by the
sheriff, as well as damages resulting from the allegedly wrongful
seizure and detention thereof despite the third-party claim; and it may
be brought against the sheriff and such other parties as may be
alleged to have colluded with him in the supposedly wrongful
execution proceedings, such as the judgment creditor himself. Such
proper action, as above pointed out, is and should be an entirely
separate and distinct action from that in which execution has issued, if
instituted by a stranger to the latter suit.
The remedies above mentioned are cumulative and may be
resorted to by a third-party claimant independent of or separately
from and without need of availing of the others. If a third-party
claimant opted to file a proper action to vindicate his claim of
ownership, he must institute an action, distinct and separate from that
in which the judgment is being enforced, with the court of competent
jurisdiction even before or without need of filing a claim in the court
which issued the writ, the latter not being a condition sine qua non for
the former. In such proper action, the validity and sufficiency of the
title of the third-party claimant will be resolved and a writ of
preliminary injunction against the sheriff may be issued. (Emphasis
and underscoring ours)
In light of the above, the filing of a third party claim with the Labor
Arbiter and the NLRC did not preclude the petitioner from filing a
subsequent action for recovery of property and damages with the
Regional Trial Court. And, the institution of such complaint will not
make petitioner guilty of forum shopping.[15]
In Santos v. Bayhon,[16] wherein Labor Arbiter Ceferina Diosana
rendered a decision in NLRC NCR Case No. 1-313-85 in favor of
Kamapi, the NLRC affirmed the decision. Thereafter, Kamapi obtained
a writ of execution against the properties of Poly-Plastic Products or
Anthony Ching. However, respondent Priscilla Carrera filed a third-
party claim alleging that Anthony Ching had sold the property to
her. Nevertheless, upon posting by the judgment creditor of an
indemnity bond, the NLRC Sheriff proceeded with the public auction
sale. Consequently, respondent Carrera filed with Regional Trial
Court, Manila an action to recover the levied property and obtained a
temporary restraining order against Labor Arbiter Diosana and the
NLRC Sheriff from issuing a certificate of sale over the levied
property.Eventually, Labor Arbiter Santos issued an order allowing the
execution to proceed against the property of Poly-Plastic
Products. Also, Labor Arbiter Santos and the NLRC Sheriff filed a
motion to dismiss the civil case instituted by respondent Carrera on
the ground that the Regional Trial Court did not have jurisdiction over
the labor case. The trial court issued an order enjoining the
enforcement of the writ of execution over the properties
claimed byrespondent Carrera pending the determination of the
validity of the sale made in her favor by the judgment debtor Poly-
Plastic Products and Anthony Ching.
In dismissing the petition for certiorari filed by Labor Arbiter
Santos, we ruled that:
x x x. The power of the NLRC to execute its judgments extends only
to properties unquestionably belonging to the judgment debtor
(Special Servicing Corp. v. Centro La Paz, 121 SCRA 748).
The general rule that no court has the power to interfere by injunction
with the judgments or decrees of another court with concurrent or
coordinate jurisdiction possessing equal power to grant injunctive
relief, applies only when no third-party claimant is involved (Traders
Royal Bank v. Intermediate Appellate Court, 133 SCRA 141
[1984]). When a third-party, or a stranger to the action, asserts a claim
over the property levied upon, the claimant may vindicate his claim by
an independent action in the proper civil court which may stop the
execution of the judgment on property not belonging to the judgment
debtor.(Underscoring ours)
In Consolidated Bank and Trust Corp. v. Court of Appeals, 193
SCRA 158 [1991], we ruled that:
53
The well-settled doctrine is that a proper levy is indispensable to a
valid sale on execution. A sale unless preceded by a valid levy is
void. Therefore, since there was no sufficient levy on the execution in
question, the private respondent did not take any title to the properties
sold thereunder x x x.
A person other than the judgment debtor who claims ownership or
right over the levied properties is not precluded, however, from taking
other legal remedies. (Underscoring ours)
Jurisprudence is likewise replete with rulings that since the third-
party claimant is not one of the parties to the action, he could not,
strictly speaking, appeal from the order denying his claim, but should
file a separate reinvindicatory action against the execution creditor or
the purchaser of the property after the sale at public auction, or a
complaint for damages against the bond filed by the judgment creditor
in favor of the sheriff.[17]
And in Lorenzana v. Cayetano,[18] we ruled that:
The Fallo
WHEREFORE, the Court REVERSES the decision of the Court of
Appeals and the resolution denying reconsideration.[19] In lieu thereof,
the Court renders judgment ANNULLING the sale on execution of the
subject property conducted by NLRC Sheriff Anam Timbayan in favor
of respondent SAMAR-ANGLO and the subsequent sale of the same
to Rodrigo Sy Mendoza. The Court declares the petitioner to be the
rightful owner of the property involved and remands the case to the
trial court to determine the liability of respondents SAMAR-ANGLO,
Rodrigo Sy Mendoza, and WESTERN GUARANTY CORPORATION
to pay actual damages that petitioner claimed.
Costs against respondents, except the Court of Appeals.
SO ORDERED.

The rights of a third-party claimant should not be decided in the action

where the third-party claim has been presented, but in a separate
action to be instituted by the third person. The appeal that should be
interposed if the term appeal may properly be employed, is a separate
reinvindicatory action against the execution creditor or the purchaser
of the property after the sale at public auction, or complaint for
damages to be charged against the bond filed by the judgment
creditor in favor of the sheriff.Such reinvindicatory action is reserved
to the third-party claimant.

A separate civil action for recovery of ownership of the

property would not constitute interference with the powersor
processes of the Arbiter and the NLRC which rendered the judgment
to enforce and execute upon the levied properties. The property levied
upon being that of a stranger is not subject to levy. Thus, a separate
action for recovery, upon a claim and prima-facie showing of
ownership by the petitioner, cannot be considered as interference.

54
[G.R. No. 120567. March 20, 1998]
PHILIPPINE AIRLINES, INC., petitioner, vs., NATIONAL LABOR
RELATIONS COMMISSION, FERDINAND PINEDA and
GODOFREDO CABLING, respondents.
DECISION
MARTINEZ, J.:
Can the National Labor Relations Commission (NLRC), even
without a complaint for illegal dismissal filed before the labor arbiter,
entertain an action for injunction and issue such writ enjoining
petitioner Philippine Airlines, Inc. from enforcing its Orders of
dismissal against private respondents, and ordering petitioner to
reinstate the private respondents to their previous positions?
This is the pivotal issue presented before us in this petition for
certiorari under Rule 65 of the Revised Rules of Court which seeks
the nullification of the injunctive writ dated April 3,1995 issued by the
NLRC and the Order denying petitioner's motion for reconsideration
on the ground that the said Orders were issued in excess of
jurisdiction.
Private respondents are flight stewards of the petitioner. Both
were dismissed from the service for their alleged involvement in the
April 3, 1993 currency smuggling in Hong Kong.
Aggrieved by said dismissal, private respondents filed with the
NLRC a petition[1] for injunction praying that:
"I. Upon filing of this Petition, a temporary restraining order be issued,
prohibiting respondents (petitioner herein) from effecting or enforcing
the Decision dated Feb. 22, 1995, or to reinstate petitioners
temporarily while a hearing on the propriety of the issuance of a writ of
preliminary injunction is being undertaken;
"II. After hearing, a writ of preliminary mandatory injunction be issued
ordering respondent to reinstate petitioners to their former positions
pending the hearing of this case, or, prohibiting respondent from
enforcing its Decision dated February 22,1995 while this case is
pending adjudication;
"III. After hearing, that the writ of preliminary injunction as to the reliefs
sought for be made permanent, that petitioners be awarded full
backwages, moral damages of PHP 500,000.00 each and exemplary
damages of PHP 500,000.00 each, attorneys fees equivalent to ten
percent of whatever amount is awarded, and the costs of suit."
On April 3, 1995, the NLRC issued a temporary mandatory
injunction[2] enjoining petitioner to cease and desist from enforcing its
February 22, 1995 Memorandum of dismissal. In granting the writ, the
NLRC considered the following facts, to wit:
x x x that almost two (2) years ago, i.e. on April 15, 1993, the
petitioners were instructed to attend an investigation by respondents
Security and Fraud Prevention Sub-Department regarding an April 3,
1993 incident in Hongkong at which Joseph Abaca, respondents
Avionics Mechanic in Hongkong was intercepted by the Hongkong
Airport Police at Gate 05 xxx the ramp area of the Kai Tak
International Airport while xxx about to exit said gate carrying a xxx
bag said to contain some 2.5 million pesos in Philippine
Currencies. That at the Police Station, Mr. Abaca claimed that he just
found said plastic bag at the Skybed Section of the arrival flight
PR300/03 April 93, where petitioners served as flight stewards of said
flight PR300; x x the petitioners sought a more detailed account of
what this HKG incident is all about; but instead, the petitioners were
administratively charged, a hearing on which did not push through
until almost two (2) years after, i.e. on January 20, 1995 xxx where a
confrontation between Mr. Abaca and petitioners herein was
compulsorily arranged by the respondents disciplinary board at which
hearing, Abaca was made to identify petitioners as co-conspirators;
that despite the fact that the procedure of identification adopted by
respondents Disciplinary Board was anomalous as there was no one
else in the line-up (which could not be called one) but petitioners xxx
Joseph Abaca still had difficulty in identifying petitioner Pineda as his
co-conspirator, and as to petitioner Cabling, he was implicated and
pointed by Abaca only after respondents Atty. Cabatuando pressed
the former to identify petitioner Cabling as co-conspirator; that with the
hearing reset to January 25, 1995, Mr. Joseph Abaca finally gave
55
exculpating statements to the board in that he cleared petitioners from
any participation or from being the owners of the currencies, and at
which hearing Mr. Joseph Abaca volunteered the information that the
real owner of said money was one who frequented his headquarters
in Hongkong to which information, the Disciplinary Board Chairman,
Mr. Ismael Khan, opined for the need for another hearing to go to the
bottom of the incident; that from said statement, it appeared that Mr.
Joseph Abaca was the courier, and had another mechanic in Manila
who hid the currency at the planes skybed for Abaca to retrieve in
Hongkong, which findings of how the money was found was
previously confirmed by Mr. Joseph Abaca himself when he was first
investigated by the Hongkong authorities; that just as petitioners
thought that they were already fully cleared of the charges, as they no
longer received any summons/notices on the intended additional
hearings mandated by the Disciplinary Board, they were surprised to
receive on February 23, 1995 xxx a Memorandum dated February 22,
1995 terminating their services for alleged violation of respondents
Code of Discipline effective immediately; that sometime xxx first week
of March, 1995, petitioner Pineda received another Memorandum
from respondent Mr. Juan Paraiso, advising him of his termination
effective February 3, 1995, likewise for violation of respondents Code
of Discipline; x x x"
In support of the issuance of the writ of temporary injunction, the
NLRC adopted the view that: (1) private respondents cannot be validly
dismissed on the strength of petitioner's Code of Discipline which was
declared illegal by this Court in the case of PAL, Inc. vs. NLRC, (G.R.
No. 85985), promulgated August 13, 1993, for the reason that it was
formulated by the petitioner without the participation of its employees
as required in R.A. 6715, amending Article 211 of the Labor Code; (2)
the whimsical, baseless and premature dismissals of private
respondents which "caused them grave and irreparable injury" is
enjoinable as private respondents are left "with no speedy and
adequate remedy at law'"except the issuance of a temporary
mandatory injunction; (3) the NLRC is empowered under Article 218
(e) of the Labor Code not only to restrain any actual or threatened
commission of any or all prohibited or unlawful acts but also to require
the performance of a particular act in any labor dispute, which, if not
restrained or performed forthwith, may cause grave or irreparable
damage to any party; and (4) the temporary mandatory power of the
NLRC was recognized by this Court in the case of Chemo-Technicshe
Mfg., Inc. Employees Union,DFA, et.al. vs. Chemo-Technische Mfg.,
Inc. [G.R. No. 107031, January 25,1993].
On May 4,1995, petitioner moved for reconsideration[3] arguing
that the NLRC erred:
1. in granting a temporary injunction order when it has no
jurisdiction to issue an injunction or restraining order since this
may be issued only under Article 218 of the Labor Code if the
case involves or arises from labor disputes;
2. in granting a temporary injunction order when the termination of
private respondents have long been carried out;
3. ..in ordering the reinstatement of private respondents on the basis
of their mere allegations, in violation of PAL's right to due process;
4. ..in arrogating unto itself management prerogative to discipline its
employees and divesting the labor arbiter of its original and
exclusive jurisdiction over illegal dismissal cases;
5. ..in suspending the effects of termination when such action is
exclusively within the jurisdiction of the Secretary of Labor;
6. ..in issuing the temporary injunction in the absence of any
irreparable or substantial injury to both private respondents.
On May 31,1995, the NLRC denied petitioner's motion for
reconsideration, ruling:
The respondent (now petitioner), for one, cannot validly claim
that we cannot exercise our injunctive power under Article 218
(e) of the Labor Code on the pretext that what we have here is not
a labor dispute as long as it concedes that as defined by law, a(l)
Labor Dispute includes any controversy or matter
concerningterms or conditions of employment. . If security of
tenure, which has been breached by respondent and which, precisely,
is sought to be protected by our temporary mandatory injunction (the
core of controversy in this case) is not a term or condition of
employment, what then is?
56
xxxxxxxxx
Anent respondents second argument x x x, Article 218 (e) of the
Labor Code x x x empowered the Commission not only to issue a
prohibitory injunction, but a mandatory (to require the
performance) one as well. Besides, as earlier discussed, we
already exercised (on August 23,1991) this temporary mandatory
injunctive power in the case of Chemo-Technische Mfg., Inc.
Employees Union-DFA et.al. vs. Chemo-Technishe Mfg., Inc., et.
al. (supra) and effectively enjoined one (1) month old dismissals
by Chemo-Technische and that our aforesaid mandatory
exercise of injunctive power, when questioned through a petition
for certiorari, was sustained by the Third Division of the Supreme
court per its Resolution dated January 25,1993.
xxxxxxxxx
Respondents fourth argument that petitioner's remedy for their
dismissals is 'to file an illegal dismissal case against PAL which
cases are within the original and exclusive jurisdiction of the
Labor Arbiter' is ignorant. In requiring as a condition for the
issuance of a 'temporary or permanent injunction'- '(4) That
complainant has no adequate remedy at law;' Article 218 (e) of the
Labor Code clearly envisioned adequacy , and not
plainavailability of a remedy at law as an alternative bar to the
issuance of an injunction. An illegal dismissal suit (which takes,
on its expeditious side, three (3) years before it can be disposed
of) while available as a remedy under Article 217 (a) of the Labor
Code, is certainly not an 'adequate; remedy at law. Ergo, it
cannot, as an alternative remedy, bar our exercise of that
injunctive power given us by Article 218 (e) of the Code.
xxx xxx xxx
Thus, Article 218 (e), as earlier discussed [which empowers this
Commission 'to require the performance of a particular act' (such as
our requiring respondent 'to cease and desist from enforcing' its
whimsical memoranda of dismissals and 'instead to reinstate
petitioners to their respective position held prior to their subject
dismissals') in 'any labor dispute which, if not xxx performed forthwith,
may cause grave and irreparable damage to any party'] stands as the
sole 'adequate remedy at law' for petitioners here.
Finally, the respondent, in its sixth argument claims that even if its
acts of dismissing petitioners 'may be great, still the same is capable
of compensation', and that consequently, 'injunction need not be
issued where adequate compensation at law could be obtained'.
Actually, what respondent PAL argues here is that we need not
interfere in its whimsical dismissals of petitioners as, after all, it can
pay the latter its backwages. x x x
But just the same, we have to stress that Article 279 does not speak
alone of backwages as an obtainable relief for illegal dismissal; that
reinstatement as well is the concern of said law, enforceable when
necessary, through Article 218 (e) of the Labor Code (without need of
an illegal dismissal suit under Article 217 (a) of the Code) if such
whimsical and capricious act of illegal dismissal will 'cause grave or
irreparable injury to a party'. x x x " [4]
Hence, the present recourse.
Generally, injunction is a preservative remedy for the protection of
one's substantive rights or interest. It is not a cause of action in itself
but merely a provisional remedy, an adjunct to a main suit. It is
resorted to only when there is a pressing necessity to avoid injurious
consequences which cannot be remedied under any standard of
compensation. The application of the injunctive writ rests upon the
existence of an emergency or of a special reason before the main
case be regularly heard. The essential conditions for granting such
temporary injunctive relief are that the complaint alleges facts which
appear to be sufficient to constitute a proper basis for injunction and
that on the entire showing from the contending parties, the injunction
is reasonably necessary to protect the legal rights of the plaintiff
pending the litigation.[5] Injunction is also a special equitable relief
granted only in cases where there is no plain, adequate and complete
remedy at law.[6]
In labor cases, Article 218 of the Labor Code empowers the
NLRC-
"(e) To enjoin or restrain any actual or threatened commission of any
or all prohibited or unlawful acts or to require the performance of a
57
particular act in any labor dispute which, if not restrained or
performed forthwith, may cause grave or irreparable damage to any
party or render ineffectual any decision in favor of such party; x x
x." (Emphasis Ours)
Complementing the above-quoted provision, Sec. 1, Rule XI of
the New Rules of Procedure of the NLRC, pertinently provides as
follows:
"Section 1. Injunction in Ordinary Labor Dispute.-A preliminary
injunction or a restraining order may be granted by the Commission
through its divisions pursuant to the provisions of paragraph (e) of
Article 218 of the Labor Code, as amended, when it is established on
the bases of the sworn allegations in the petition that the acts
complained of,involving or arising from any labor dispute before
the Commission, which, if not restrained or performed forthwith, may
cause grave or irreparable damage to any party or render ineffectual
any decision in favor of such party.
xxx xxx xxx
The foregoing ancillary power may be exercised by the Labor
Arbiters only as an incident to the cases pending before them in order
to preserve the rights of the parties during the pendency of the case,
but excluding labor disputes involving strikes or lockout. [7] (Emphasis
Ours)
From the foregoing provisions of law, the power of the NLRC to
issue an injunctive writ originates from "any labor dispute" upon
application by a party thereof, which application if not granted "may
cause grave or irreparable damage to any party or render
ineffectual any decision in favor of such party."
The term "labor dispute" is defined as "any controversy or matter
concerning terms and conditions of employment or the association or
representation of persons in negotiating, fixing, maintaining, changing,
or arranging the terms and conditions of employment regardless of
whether or not the disputants stand in the proximate relation of
employers and employees."[8]
The term "controversy" is likewise defined as "a litigated
question; adversary proceeding in a court of law; a civil action or
suit, either at law or in equity; a justiciable dispute."[9]
A "justiciable controversy" is "one involving an active antagonistic
assertion of a legal right on one side and a denial thereof on the other
concerning a real, and not a mere theoretical question or issue."[10]
Taking into account the foregoing definitions, it is an essential
requirement that there must first be a labor dispute between the
contending parties before the labor arbiter. In the present case, there
is no labor dispute between the petitioner and private respondents as
there has yet been no complaint for illegal dismissal filed with the
labor arbiter by the private respondents against the petitioner.
The petition for injunction directly filed before the NLRC is in
reality an action for illegal dismissal. This is clear from the allegations
in the petition which prays for: reinstatement of private respondents;
award of full backwages, moral and exemplary damages; and
attorney's fees. As such, the petition should have been filed with the
labor arbiter who has the original and exclusive jurisdiction to hear
and decide the following cases involving all workers, whether
agricultural or non-agricultural:
(1) Unfair labor practice;
(2) Termination disputes;
(3) If accompanied with a claim for reinstatement, those cases
that workers may file involving wages, rates of pay, hours of
work and other terms and conditions of employment;
(4) Claims for actual, moral, exemplary and other forms of
damages arising from the employer-employee relations;
(5) Cases arising from any violation of Article 264 of this Code,
including questions involving the legality of strikes and lockouts; and
(6) Except claims for employees compensation, social security,
medicare and maternity benefits, all other claims arising from
employer-employee relations, including those of persons in domestic
or household service, involving an amount exceeding five thousand
58
pesos (P 5,000.00), whether or not accompanied with a claim for
reinstatement.[11]
The jurisdiction conferred by the foregoing legal provision to the
labor arbiter is both original and exclusive, meaning, no other officer
or tribunal can take cognizance of, hear and decide any of the cases
therein enumerated. The only exceptions are where the Secretary of
Labor and Employment or the NLRC exercises the power of
compulsory arbitration, or the parties agree to submit the matter to
voluntary arbitration pursuant to Article 263 (g) of the Labor Code, the
pertinent portions of which reads:
"(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 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 compliance with
this provision as well as with such orders as he may issue to enforce
the same.
xxxxxxxxx"
On the other hand, the NLRC shall have
exclusive appellate jurisdiction over all cases decided by labor
arbiters as provided in Article 217(b) of the Labor Code. In short, the
jurisdiction of the NLRC in illegal dismissal cases is appellate in
nature and, therefore, it cannot entertain the private respondents'
petition for injunction which challenges the dismissal orders of
petitioner. Article 218(e) of the Labor Code does not provide blanket
authority to the NLRC or any of its divisions to issue writs of
injunction, considering that Section 1 of Rule XI of the New Rules of
Procedure of the NLRC makes injunction only an ancillary remedy in
ordinary labor disputes"[12]
Thus, the NLRC exceeded its jurisdiction when it issued the
assailed Order granting private respondents' petition for injunction and
ordering the petitioner to reinstate private respondents.
The argument of the NLRC in its assailed Order that to file an
illegal dismissal suit with the labor arbiter is not an "adequate" remedy
since it takes three (3) years before it can be disposed of, is patently
erroneous. An "adequate" remedy at law has been defined as one
"that affords relief with reference to the matter in controversy, and
which is appropriate to the particular circumstances of the case."[13] It
is a remedy which is equally beneficial, speedy and sufficient which
will promptly relieve the petitioner from the injurious effects of the acts
complained of.[14]
Under the Labor Code, the ordinary and proper recourse of an
illegally dismissed employee is to file a complaint for illegal dismissal
with the labor arbiter.[15] In the case at bar, private
respondents disregarded this rule and directly went to the
NLRC through a petition for injunction praying that petitioner be
enjoined from enforcing its dismissal orders. In Lamb vs.
Phipps,[16] we ruled that if the remedy is specifically provided by law, it
is presumed to be adequate. Moreover, the preliminary mandatory
injunction prayed for by the private respondents in their petition before
the NLRC can also be entertained by the labor arbiter who, as shown
earlier, has the ancillary power to issue preliminary injunctions or
restraining orders as an incident in the cases pending before him in
order to preserve the rights of the parties during the pendency of the
case.[17]
Furthermore, an examination of private respondents' petition for
injunction reveals that it has no basis since there is no showing of any
urgency or irreparable injury which the private respondents might
suffer. An injury is considered irreparable if it is of such constant and
frequent recurrence that no fair and reasonable redress can be had
therefor in a court of law,[18] or where there is no standard by which
their amount can be measured with reasonable accuracy, that is, it is
not susceptible of mathematical computation. It is considered
irreparable injury when it cannot be adequately compensated in
damages due to the nature of the injury itself or the nature of the right
or property injured or when there exists no certain pecuniary standard
for the measurement of damages.[19]
59
 In the case at bar, the alleged injury which private respondents WHEREFORE, the petition is hereby GRANTED. The assailed
stand to suffer by reason of their alleged illegal dismissal can be Orders dated April 3,1995 and May 31,1995, issued by the National
adequately compensated and therefore, there exists no "irreparable Labor Relations Commission (First Division), in NLRC NCR IC No.
injury," as defined above which would necessitate the issuance of the 000563-95, are hereby REVERSED and SET ASIDE.
injunction sought for. Article 279 of the Labor Code provides that an
employee who is unjustly dismissed from employment shall be entitled SO ORDERED.
to reinstatement, without loss of seniority rights and other privileges,
and to the payment of full backwages, inclusive
of allowances, and to other benefits or their monetary equivalent
computed from the time his compensation was withheld from him up
to the time of his actual reinstatement.
The ruling of the NLRC that the Supreme Court upheld its power
to issue temporary mandatory injunction orders in the case of Chemo-
Technische Mfg., Inc. Employees Union-DFA, et.al. vs. Chemo-
Technische Mfg., Inc. et.al., docketed as G.R. No. 107031, is
misleading. As correctly argued by the petitioner, no such
pronouncement was made by this Court in said case. On January
25,1993, we issued a Minute Resolution in the subject case stating as
follows:

"Considering the allegations contained, the issues raised and the

arguments adduced in the petition for certiorari , as well as the
comments of both public and private respondents thereon, and the
reply of the petitioners to private respondent's motion to dismiss the
petition, the Court Resolved to DENY the same for being premature."

It is clear from the above resolution that we did not in anyway

sustain the action of the NLRC in issuing such temporary mandatory
injunction but rather we dismissed the petition as the NLRC had yet to
rule upon the motion for reconsideration filed by peitioner. Thus, the
minute resolution denying the petition for being prematurely filed.
Finally, an injunction, as an extraordinary remedy, is not favored
in labor law considering that it generally has not proved to be an
effective means of settling labor disputes.[20] It has been the policy of
the State to encourage the parties to use the non-judicial process of
negotiation and compromise, mediation and arbitration.[21] Thus,
injunctions may be issued only in cases of extreme necessity based
on legal grounds clearly established, after due consultations or
hearing and when all efforts at conciliation are exhausted which
factors, however, are clearly absent in the present case.
60