Labrev Case 1 FULL

LABOR REV CASE FULL 1
1. [G.R. No. 172013. October 2, 2009.] PATRICIA HALAGUEA vs. PHILIPPINE AIRLINES INCORPORATED
DECISION
PERALTA, J. p:
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 Association of the Philippines (FASAP), a labor
organization certified as the sole and exclusive certified as the sole and exclusive bargaining representative of the flight
attendants, flight stewards and pursers of respondent.
On July 11, 2001, respondent and FASAP entered into a Collective Bargaining Agreement 3 incorporating the terms and
conditions of their agreement for the years 2000 to 2005, hereinafter referred to as PAL-FASAP CBA.
Section 144, Part A of the PAL-FASAP CBA, provides that:
A.For the Cabin Attendants hired before 22 November 1996:
xxx xxx xxx
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. . . . . cDHAaT
In a letter dated July 22, 2003, 4 petitioners and several female cabin 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 a letter 5 by petitioners' counsel addressed to respondent demanding the removal of gender discrimination provisions
in the coming re-negotiations of the PAL-FASAP CBA.
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.
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. HSDCTA
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.
1
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, 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. EScAID
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
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; . . . .
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. TIEHDC
2
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?
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. DTIaCS
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.
3
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. HaIATC
In Pantranco North Express, Inc., v. NLRC, 23 this Court held that:
. . . 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. . . . .
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. . . . .
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. AaDSTH
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
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. . . . 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
4
Finally, the issue in the petition for certiorari brought before the CA by the respondent was the alleged exercise of grave abuse of
discretion of the RTC in taking cognizance of the case for declaratory relief. When the CA annuled and set aside the RTC's
order, petitioners sought relief before this Court through the instant petition for review under Rule 45. A perusal of the petition
before Us, petitioners pray for the declaration of the alleged discriminatory provision in the CBA against its female flight
attendants.
This Court is not persuaded. The rule is settled that pure questions of fact may not be the proper subject of an appeal by certiorari
under Rule 45 of the Revised Rules of Court. This mode of appeal is generally limited only to questions of law which must be
distinctly set forth in the petition. The Supreme Court is not a trier of facts. 29
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.
DCScaT
SO ORDERED.
||| (Halaguea v. Philippine Airlines, Inc., G.R. No. 172013, [October 2, 2009], 617 PHIL 502-521)
2. [G.R. No. 112139. January 31, 2000.] LAPANDAY AGRICULTURAL DEVELOPMENT CORPORATION vs. CA and
COMMANDO SECURITY SERVICE AGENCY, INC.
SYNOPSIS
Petitioner Lapanday Agricultural Development Corporation and respondent Commando Security Service Agency, Inc., entered
into a Guard Service Contract. Respondent provided security guards in petitioner's banana plantation. Sometime in June 1986,
Wage Order Nos. 5 and 6 were promulgated increasing the prevailing minimum wage at that time. Respondent demanded that its
guard service contract with petitioner be upgraded in compliance with the wage orders. Petitioner refused. Respondent filed a
complaint with the Regional Trial Court demanding the rate adjustment. The trial court ruled in favor of respondent. Petitioner
filed a motion for reconsideration, but was denied. Petitioner contended that it is the National Labor Relations Commission
(NLRC) and not the civil courts that has jurisdiction to resolve the issue in the present case for it refers to the enforcement of
wage orders and other benefits due to respondent security guards. HSIaAT
The Supreme Court ruled that the Regional Trial Court has jurisdiction over the subject of the present case. According to the
Court, 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 exists. Employer-
employee relationship is an indispensable jurisdictional requisite and there was none in the present case. The Court, however,
ruled that private respondent had no cause of action against petitioner to recover the wage increases because the liability of the
petitioner to reimburse the respondent only arises if and when respondent actually pays its employees the increases granted by
the wage orders. The record showed that private respondent had not yet paid the security guards the wage increases. The Court
stressed that the increases 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, the contractor would be unduly enriching itself by
recovering wage increases, for its own benefit.
SYLLABUS
1. REMEDIAL LAW; JURISDICTION; THE REGIONAL TRIAL COURT HAS JURISDICTION OVER THE SUBJECT
MATTER OF THE PRESENT CASE; 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.
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. 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 petitioner's 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. 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.
2. CIVIL LAW; JOINT AND SOLIDARY OBLIGATIONS; PRIVATE RESPONDENT MAY NOT ASSERT A CLAIM
AGAINST PETITIONER FOR SALARY WAGE ADJUSTMENTS THAT IT HAS NOT ACTUALLY PAID; IT IS ONLY
WHEN PRIVATE RESPONDENT PAYS THE INCREASES MANDATED THAT IT CAN CLAIM AN ADJUSTMENT
FROM THE PETITIONER TO COVER THE INCREASES PAYABLE TO THE SECURITY GUARDS. 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
5
from the principal as solidary co-debtor) arises only if he has paid the amounts for which both of them are jointly and severally
liable is in line with Article 1217 of the Civil Code. 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, 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 dated October 17, 1986 (NLRC Case No. 2849-MC-
XI-86). 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. HAaDTI
DECISION
GONZAGA-REYES, J p:
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. LibLex
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 defendant's 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
Nos. 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 plaintiff's 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 xxx 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
contractor's 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 latter can claim
reimbursement from PTS in lieu of an adjustment, considering that the contract had
6
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 Relations Commission and Phil. Tuberculosis Society, Inc.
vs. NLRC, et al., May 18, 1989)." LibLex
Petitioner's 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 ATTORNEY'S 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 respondent's 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 attorney's 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 respondent's 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 attorney's 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 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 petitioner's alleged breach of its
obligation under their Guard Service Contract. The action is within the realm of civil law hence jurisdiction over the case
7
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: llcd
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 attorney's 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 petitioner's 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 former's work, the employees of the contractor and of the latter's subcontractor, if
any, shall be paid in accordance with the provisions of this Code.
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 xxx 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 contractor's 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.
8
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. cdtai
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 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 co-debtors only the share which corresponds to each, with
interest for the payment already made. If the payment is made before the debt is due, no interest for the
intervening period may be demanded. . . ."
Pursuant to the above provision, the right of reimbursement from a co-debtor is recognized in favor of the one who paid.
It will be seen that the liability of the petitioner to reimburse the respondent only arises if and when respondent actually pays its
employees the increases granted by Wage Order Nos. 5 and 6. Payment, which means not only the delivery of money but also
the performance, in any other manner, of the obligation, 18 is the operative fact which will entitle either of the solidary debtors to
seek reimbursement for the share which corresponds to each of the debtors.
The records show that judgment was rendered by Labor Arbiter Newton R. Sancho holding both petitioner and private
respondent jointly and solidarily liable to the security guards in a 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. LibLex
Finally, considering that the private respondent has no cause of action against the petitioner, private respondent is not entitled to
attorney's 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.
||| (Lapanday Agricultural Development Corp. v. Court of Appeals, G.R. No. 112139, [January 31, 2000], 381 PHIL 41-54)
3. [G.R. No. 182295. June 26, 2013.] 7K CORPORATION, petitioner, vs. EDDIE ALBARICO, respondent.
DECISION
SERENO, C.J p:
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 Decision 1 dated 18 September 2007 and the Resolution 2 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 President's Trophy for being one
of the company's top water purifier specialist distributors.
In April of 1993, the chief operating officer of petitioner 7K Corporation terminated Albarico's employment allegedly for his
poor sales performance. 5 Respondent 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
9
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 attorney's fees. 8
On appeal by petitioner, the labor arbiter's 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, 10 became final after no appeal was taken. HSTCcD
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 attorney's 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 received by respondent belied the claim that the latter
was performing poorly. 17 It was also found that Albarico could not have abandoned his job, as the abandonment should have
been clearly shown. Mere absence was not sufficient, according to the arbitrator, but must have been accompanied by overt acts
pointing to the fact that the employee did not want to work anymore. It was noted that, in the present case, the immediate filing
of a complaint for illegal dismissal against the employer, with a prayer for reinstatement, showed that the employee was not
abandoning his work. The voluntary arbitrator also found that Albarico was dismissed from his work without due process.
However, it was found that reinstatement was no longer possible because of the strained relationship of the parties. 18 Thus, in
lieu of reinstatement, the voluntary arbitrator ordered the corporation to pay separation pay for two years at P4,456 for each year,
or a total amount of P8,912.
Additionally, in view of the finding that Albarico had been illegally dismissed, the voluntary arbitrator also ruled that the former
was entitled to backwages in the amount of P90,804. 19 Finally, the arbitrator awarded attorney's fees in respondent's favor,
because he had been compelled to file an action for illegal dismissal. 20
Petitioner corporation subsequently appealed to the CA, imputing to the voluntary arbitrator grave abuse of discretion amounting
to lack or excess of jurisdiction for awarding backwages and attorney's fees to respondent Albarico based on the former's finding
of illegal dismissal. 21 The arbitrator contended that the issue of the legality of dismissal was not explicitly included in the
Submission Agreement dated 19 April 1993 filed for voluntary arbitration and resolution. It prayed that the said awards be set
aside, and that only separation pay of P8,912.00 and sales commission of P4,787.60 be awarded.
The CA affirmed the Decision of the voluntary arbitrator, but eliminated the award of attorney's fees for having been made
without factual, legal or equitable justification. 22 Petitioner's Motion for Partial Reconsideration was denied as well. 23
Hence, this Petition.
ISSUE
The issue before the Court is whether the CA committed reversible error in finding that the voluntary arbitrator properly assumed
jurisdiction to decide the issue of the legality of the dismissal of respondent as well as the latter's entitlement to backwages, even
if neither the legality nor the entitlement was expressedly claimed in the Submission Agreement of the parties.
The Petition is denied for being devoid of merit.
DISCUSSION
Preliminarily, we address petitioner's claim that under Article 217 of the Labor Code,original and exclusive jurisdiction over
termination disputes, such as the present case, is lodged only with the labor arbiter of the NLRC. 24
Petitioner overlooks the proviso in the said article, thus:
Art. 217. Jurisdiction of the Labor Arbiters and the Commission.
a. Except as otherwise provided under this Code, the Labor Arbiters shall have original and exclusive
jurisdiction to hear and decide, within thirty (30) calendar days after the submission of the case by the
parties for decision without extension, even in the absence of stenographic notes, the following cases
involving all workers, whether agricultural or non-agricultural:
xxx xxx xxx
2. Termination disputes;
xxx xxx xxx
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
10
household service, involving an amount exceeding five thousand pesos (P5,000.00) regardless of
whether accompanied with a claim for reinstatement. (Emphases supplied)
Thus, although the general rule under the Labor Code gives the labor arbiter exclusive and original jurisdiction over termination
disputes, it also recognizes exceptions. One of the exceptions is provided in Article 262 of the Labor Code.In San Jose v. NLRC,
25 we said:
The phrase "Except as otherwise provided under this Code" refers to the following exceptions:
A. Art. 217. Jurisdiction of Labor Arbiters. . . .
xxx xxx xxx
(c) Cases arising from the interpretation or implementation of collective bargaining agreement and those
arising from the interpretation or enforcement of company procedure/policies shall be disposed of by the
Labor Arbiter by referring the same to the grievance machinery and voluntary arbitrator as may be
provided in said agreement.
B. Art. 262. Jurisdiction over other labor disputes. The Voluntary Arbitrator or panel of
Voluntary Arbitrators, upon agreement of the parties, shall also hear and decide all other labor
disputes including unfair labor practices and bargaining deadlocks. (Emphasis supplied)
We also said in the same case that "[t]he labor disputes referred to in the same Article 262 [of the Labor Code] can include all
those disputes mentioned in Article 217 over which the Labor Arbiter has original and exclusive jurisdiction." 26
From the above discussion, it is clear that voluntary arbitrators may, by agreement of the parties, assume jurisdiction over a
termination dispute such as the present case, contrary to the assertion of petitioner that they may not.
We now resolve the main issue. Petitioner argues that, assuming that the voluntary arbitrator has jurisdiction over the present
termination dispute, the latter should have limited his decision to the issue contained in the Submission Agreement of the parties
the issue of whether respondent Albarico was entitled to separation pay and to the sales commission the latter earned before
being terminated. 27 Petitioner asserts that under Article 262 of the Labor Code,the jurisdiction of a voluntary arbitrator is
strictly limited to the issues that the parties agree to submit. Thus, it contends that the voluntary arbitrator exceeded his
jurisdiction when he resolved the issues of the legality of the dismissal of respondent and the latter's entitlement to backwages on
the basis of a finding of illegal dismissal.
According to petitioner, the CA wrongly concluded that the issue of respondent's entitlement to separation pay was necessarily
based on his allegation of illegal dismissal, thereby making the issue of the legality of his dismissal implicitly submitted to the
voluntary arbitrator for resolution. 28 Petitioner argues that this was an erroneous conclusion, because separation pay may in fact
be awarded even in circumstances in which there is no illegal dismissal.
We rule that although petitioner correctly contends that separation pay may in fact be awarded for reasons other than illegal
dismissal, the circumstances of the instant case lead to no other conclusion than that the claim of respondent Albarico for
separation pay was premised on his allegation of illegal dismissal. Thus, the voluntary arbitrator properly assumed jurisdiction
over the issue of the legality of his dismissal.
True, under the Labor Code, separation pay may be given not only when there is illegal dismissal. In fact, it is also given to
employees who are terminated for authorized causes, such as redundancy, retrenchment or installation of labor-saving devices
under Article 283 29 of the Labor Code.Additionally, jurisprudence holds that separation pay may also be awarded for
considerations of social justice, even if an employee has been terminated for a just cause other than serious misconduct or an act
reflecting on moral character. 30 The Court has also ruled that separation pay may be awarded if it has become an established
practice of the company to pay the said benefit to voluntarily resigning employees 31 or to those validly dismissed for non-
membership in a union as required in a closed-shop agreement. 32
The above circumstances, however, do not obtain in the present case. There is no claim that the issue of entitlement to separation
pay is being resolved in the context of any authorized cause of termination undertaken by petitioner corporation. Neither is there
any allegation that a consideration of social justice is being resolved here. In fact, 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 respondent's 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 latter's 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 respondent's 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 respondent's 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 respondent's 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 Magsalin 33 that a
11
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 former's 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.
||| (7K Corp. v. Albarico, G.R. No. 182295, [June 26, 2013])
4. [G.R. No. 179652. March 6, 2012.] PEOPLE'S BROADCASTING SERVICE (BOMBO RADYO PHILS., INC.) vs.
DOLE and JANDELEON JUEZAN
RESOLUTION
VELASCO, JR., J p:
In a Petition for Certiorari under Rule 65, petitioner People's 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. cSaCDT
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 Director's Order, but failed. The Acting DOLE Secretary dismissed petitioner's 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 petitioner's 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 Attorney's 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
12
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. SIDTCa
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 PhP5,000. RA 7730, or an Act Further
Strengthening the Visitorial and Enforcement Powers of the Secretary of Labor, did away with the PhP5,000 limitation, allowing
the DOLE Secretary to exercise its visitorial and enforcement power for claims beyond PhP5,000. 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 NLRC's 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. aCASEH
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 employer's power to control the
employee's 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 a prima 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 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.
13
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 PhP5,000 and below, the jurisdiction is with
the regional director of the DOLE, under Art. 129, and if the amount involved exceeds PhP5,000, 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). CAcEaS
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 the MODIFICATION that in the
exercise of the DOLE's visitorial and enforcement power, the Labor Secretary or the latter's authorized representative shall have
the power to determine the existence of an employer-employee relationship, to the exclusion of the NLRC.
SO ORDERED.
||| (People's Broadcasting Service v. Secretary of the Department of Labor and Employment, G.R. No. 179652 (Resolution),
[March 6, 2012], 683 PHIL 509-526)
5. [G.R. No. 87530. June 13, 1990.] GERONIMO SADOL vs. PILIPINAS KAO, INC., REQUITO VEGA, BELEN
GOMEZ, ARTURO GOMEZ & NLRC SECOND DIVISION
GANCAYCO, J p:
The issue posed in this case is whether or not a party who failed to appeal from a decision of the labor arbiter to the National
Labor Relations Commission (NLRC) within the ten (10) day reglementary period can still participate in a separate appeal timely
interposed by the adverse party by filing a motion for reconsideration of a decision of the NLRC on such appeal.
Petitioner was recruited as a laborer by private respondents Requito Vega, Antonio Gomez and Belen Gomez, who are the
owners of Vega & Co., a private recruitment agency, with assignment at respondent Pilipinas Kao, Inc. (PKI for brevity),
particularly at the Pit Burning area. Sometime on April 16, 1984, he was allegedly summarily dismissed. Hence, on July 24,
1986, he filed a complaint for reinstatement and backwages with Region X of the Department of Labor and Employment in
Cagayan de Oro City.
On November 13, 1986, the labor arbiter ordered all parties to submit their position papers. Only petitioner complied. On
December 17, 1986, petitioner filed an urgent motion that the failure of respondent to file their position papers is a waiver and so
judgment should be rendered in favor of petitioner. Similar motions were filed by petitioner on January 23, 1987 and May 15,
1987.
On June 26, 1987, the labor arbiter rendered a decision ordering private respondents to jointly and solidarily pay petitioner his
separation pay computed at one month for every year of service within the reglementary period. Petitioner appealed to the
NLRC. Said respondents also appealed but it was filed out of time.
On August 26, 1988, the Second Division of the NLRC promulgated a decision modifying the appealed decision in that
respondent PKI was ordered to reinstate petitioner to his former position without loss of seniority rights and other accrued
benefits and with full backwages from the time of dismissal up to his actual reinstatement, and in case reinstatement is
impossible, payment of full backwages and separation pay of one (1) month salary for every year of service. The appeal of
respondent PKI was dismissed for having been filed out of time.
14
The PKI allegedly received a copy of the decision of the NLRC only on September 13, 1988. A motion for reconsideration of
said decision dated September 22, 1988 was filed by said respondent and a similar motion was filed by Samahang Kabuhayan ng
Barangay Luz Banzon (SKLB for brevity) to which an opposition was filed by petitioner.
On September 30, 1988, a resolution was promulgated by the same division of the NLRC, setting aside its decision and
dismissing the case for lack of merit. A motion for reconsideration thereof filed by petitioner who besides questioning its
findings of facts raised the issue that said respondent's appeal having been filed out of time its motion for reconsideration of the
decision should not have been entertained as it raised issues for the first on appeal which were not raised before the labor arbiter.
This motion was denied on November 27, 1988.
Hence, the herein petition for certiorari wherein petitioner recites the following assignment of errors:
"I
THE HONORABLE COMMISSION, SECOND DIVISION, SERIOUSLY ERRED IN FINDING THAT
RESPONDENTS REQUITO VEGA, ARTURO GOMEZ AND BELEN GOMEZ IS A LAWFUL
INDEPENDENT LABOR CONTRACTOR;
II
THE HONORABLE COMMISSION, SECOND DIVISION, SERIOUSLY ERRED IN FINDING IN ITS
RESOLUTION THAT COMPLAINANT-APPELLANT VOLUNTARILY ABANDONED HIS JOB;
III
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 RESPONDENTS-
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 decision 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 course 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 this 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 was
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 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.'
15
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 6r 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 circumstances, 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 decision 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.
SO ORDERED.
||| (Sadol v. Pilipinas Kao, Inc., G.R. No. 87530, [June 13, 1990], 264 PHIL 869-874)
6. [G.R. No. 152494. September 22, 2004.]MARIANO ONG, doing business under the name and style MILESTONE
METAL MANUFACTURING vs. CA
YNARES-SANTIAGO, J p:
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 attorney's 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 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 13th month pay, plus 10%
thereof as attorney's fees. Further, petitioner was ordered to pay the respondents separation pay equivalent to 1/2 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 Petitioner's 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. TaISDA
II.
PUBLIC RESPONDENT COURT OF APPEALS COMMITTED SERIOUS ERROR AND GRAVE
ABUSE OF DISCRETION IN AFFIRMING THE DISMISSAL BY NLRC OF PETITIONER'S APPEAL
AND IN EFFECT UPHOLDING THE ERRONEOUS DECISION OF THE LABOR ARBITER
16
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
NLRC'S DISMISSAL OF PETITIONER'S 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.
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.
DECISION OF THE LABOR ARBITER THAT THE EVIDENCE SUBMITTED BY PRIVATE
RESPONDENTS IN SUPPORT OF THEIR CLAIMS ARE NOT SELF-SERVING, 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 Arbiter's 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 . . .
xxx xxx xxx
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 . . .
xxx xxx xxx
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.
xxx xxx xxx
Section 6. Bond. In case the decision of the Labor Arbiter, the Regional Director or his duly authorized
Hearing Officer involves a monetary award, an appeal by the employer shall be perfected only upon the
posting of a cash or surety bond, which shall be in effect until final disposition of the case, issued by a
reputable bonding company duly accredited by the Commission or the Supreme Court in an amount
equivalent to the monetary award, exclusive of damages and attorney's fees. ACIDSc
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
17
"unjustified and prohibitive" and prayed that the same be reduced to a "reasonable 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.
Petitioner's argument is unavailing.
While, Section 6, Rule VI of the NLRC's 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 Petitioner's 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 petitioner's 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 employee's 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 employer's appeal may be perfected. 20
The fact that the NLRC took 102 days to resolve the motion will not help petitioner's 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:
. . . 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)
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 Petitioner's 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. AEDHST
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.
||| (Ong v. Court of Appeals, G.R. No. 152494, [September 22, 2004], 482 PHIL 170-182)
18
7. [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.
**see digest**
8. [G.R. No. 196047. January 15, 2014.]LEPANTO CONSOLIDATED MINING CORPORATION vs. BELIO ICAO
This Petition under Rule 45 of the Rules of Court seeks to annul and set aside the Court of Appeals (CA) Decision dated 27
September 2010 and the Resolution dated 11 March 2011 in CA-G.R. SP. No. 113095. 1 In the assailed Decision and Resolution,
the CA upheld the Order of the National Labor and Relations Commission (NLRC) First Division dismissing petitioner's appeal
for allegedly failing to post an appeal bond as required by the Labor Code. Petitioner had instead filed a motion to release the
cash bond it posted in another NLRC case which had been decided with finality in its favor with a view to applying the bond to
the appealed case before the NLRC First Division. Hence, the Court is now asked to rule whether petitioner had complied with
the appeal bond requirement. If it had, its appeal before the NLRC First Division should be reinstated.
THE FACTS
We quote the CA's narration of facts as follows:
The instant petition stemmed from a complaint for illegal dismissal and damages filed by private respondent
Belio C. Icao [Icao] against petitioners Lepanto Consolidated Mining Company (LCMC) and its Chief
Executive Officer [CEO] Felipe U. Yap [Yap] before the Arbitration Branch of the NLRC.
Private respondent essentially alleged in his complaint that he was an employee of petitioner LCMC
assigned as a lead miner in its underground mine in Paco, Mankayan, Benguet. On January 4, 2008, 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 area. At their workplace, private respondent did some barring down, 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 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
shouted to prepare the explosives for blasting, prompting private respondent to run to the adjacent panels and
warn the other miners. Thereafter, he decided to take a bath and proceeded at [sic] the bathing station where
four (4) of his co-workers were also present. Before he could join them, he heard a voice at his back and saw
Security Guard (SG) Larry Bulwayan instructing his companion SG Dale Papsa-ao to frisk him. As private
respondent was removing his boots, SG Bulwayan forcibly pulled his skullguard from his head causing it to
fall down [sic] to the ground including its harness and his detergent soap which was inserted in the
skullguard harness. A few minutes later, private respondent saw SG Bulwayan [pick] up a wrapped object at
the bathing station and gave it to his companion. SGs Bulwayan and Papsa-ao invited the private respondent
to go with them at the investigation office to answer questions regarding the wrapped object. He was then
charged with "highgrading" or the act of concealing, possessing or unauthorized extraction of highgrade
material/ore without proper authority. Private respondent vehemently denied the charge. Consequently, he
was dismissed from his work.
Private respondent claimed that his dismissal from work was without just or authorized cause since
petitioners failed to prove by ample and 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 bending down to insert the same, instead of just standing on a muckpile as alleged by
petitioners. Moreover, it is beyond imagination that a person, knowing fully well that he was being chased
for allegedly placing wrapped ore inside his boots, will transfer it to his skullguard. The tendency in such
situation is to throw the object away. As such, private respondent prayed that petitioners be held liable for
illegal dismissal, to reinstate him to his former position without loss of seniority rights and benefits, and to
pay his full backwages, damages and attorney's fees. ISCTcH
For their defense, petitioners averred that SG Bulwayan saw private respondent standing on a muckpile and
inserting a wrapped object 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
19
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: DAaEIc
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
20
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. cEHSIC
THE ISSUE
The sole issue before the Court is whether or not petitioner complied with the appeal bond requirement under the Labor Code
and the 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 case.
OUR RULING
The Petition is meritorious. The Court finds that petitioner substantially complied with the appeal bond requirement.
Before discussing its ruling, however, the Court finds it necessary to 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 exercise the right to appeal must comply with the requirements of the rules; otherwise, the privilege is lost. 20
In appeals from any decision or order of the labor arbiter, the posting of an appeal bond is required under Article 223 of the
Labor Code,which reads:
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:
xxx xxx xxx
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 and
underlining supplied)
The 2011 NLRC Rules of Procedure (NLRC Rules) incorporates this requirement in Rule VI, Section 6, which provides:
SECTION 6. Bond. In case the decision of the Labor Arbiter or the Regional Director involves a
monetary award, an appeal by the employer may be perfected only upon the posting of a bond,
which shall either be in the form of cash deposit or surety bond equivalent in amount to the monetary
award, exclusive of damages and attorney's fees. (Emphases and underlining supplied)
In Viron Garments Manufacturing Co., Inc. v. NLRC, 21 the Court explained the mandatory nature of this requirement as
follows:
The intention of the lawmakers to make the bond an indispensable requisite for the perfection of an
appeal by the employer, is clearly limned in the provision that an appeal by the employer may be perfected
"only upon the 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 employer's appeal may be perfected. (Emphases supplied)
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 this doctrine, we rule that petitioner substantially complied with the mandatory requirement
of posting an appeal bond for the reasons explained below. DaTISc
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 in Dangiw 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
21
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. In Blancaflor 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 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 hereby REVERSED. 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.
||| (Lepanto Consolidated Mining Corp. v. Icao, G.R. No. 196047, [January 15, 2014], 724 PHIL 646-660)
9. [G.R. No. 126322. January 16, 2002.]YUPANGCO COTTON MILLS, INC vs. CA, RODRIGO SY MENDOZA,
SAMAHANG MANGGAGAWA NG ARTEX (SAMAR-ANGLO) represented by its Local President RUSTICO CORTEZ, and
WESTERN GUARANTY CORPORATION, respondents.
SYNOPSIS
The petitioner alleged that a sheriff of the National Labor Relations Commission (NLRC) erroneously levied upon certain
properties which it claims ownership. As a consequence, it filed an adverse claim with the NLRC, which was dismissed by the
labor arbiter. The dismissal was appealed by the petitioner to the NLRC, but the same was also dismissed for lack of merit. In the
meantime, petitioner filed an original mandatory injunction with the NLRC. While the injunction case was pending before the
NLRC, petitioner filed a complaint for accion reivindicatoria with the Regional Trial Court of Manila. The trial court dismissed
the complaint, hence, petitioner brought the case to the Court of Appeals. The Court of Appeals dismissed the petition on the
ground of forum shopping and lack of jurisdiction. Upon denial of the motion for reconsideration, the petitioner filed this appeal
before the Supreme Court.
The Supreme Court reversed the decision of the Court of Appeals. The Court ruled that there was no forum shopping in the case
at bar as there was no identity of parties, rights and causes of action and reliefs sought. The case before the NLRC was a labor
case on which petitioner was not a party, while the reivindicatoria case filed by the petitioner in the trial court was to recover the
property illegally levied upon and sold at public auction. The Court also ruled that a third party may avail himself of alternative
remedies cumulatively, and one will not preclude the third party from availing himself of the alternative remedies in the event he
failed in the remedy first availed of. The Supreme Court annulled the sale on execution of the subject property and the
subsequent sale of the same.
SYLLABUS
1. REMEDIAL LAW; ACTIONS; FORUM SHOPPING; CONSTRUED. In Golangco v. Court of Appeals, we held: "What is
truly important to consider in determining whether forum shopping exists or not is the vexation caused the courts and parties-
22
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. ". . . "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." 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. In Chemphil Export & Import Corporation v. Court of Appeals, 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." DTAcIa
2. ID.; ID.; THIRD PARTY CLAIMANT; MAY AVAIL OF SEVERAL ALTERNATIVE REMEDIES FOR THE
PROTECTION OF HIS INTEREST. 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 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. 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. 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.
3. ID.; ID.; ID.; FILING OF SEPARATE CIVIL ACTION FOR RECOVERY OF OWNERSHIP OF THE PROPERTY
LEVIED SHOULD NOT BE CONSIDERED INTERFERENCE UPON THE MAIN ACTION. 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 reivindicatory 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. And in Lorenzana v. Cayetano, we ruled that: "The rights of a third-party claimant should not be
decided in the action where the third-party claim has been presented, but in a separate action to be instituted by the third person.
The appeal that should be interposed if the term 'appeal' may properly be employed, is a separate reivindicatory 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 reivindicatory action is reserved to the third-party
claimant." A separate civil action for recovery of ownership of the property would not constitute interference with the powers or
processes of the Arbiter and the NLRC which rendered the judgment to enforce and execute upon the levied properties. The
property levied upon being that of a stranger is not subject to levy. Thus, a separate action for recovery, upon a claim and prima-
facie showing of ownership by the petitioner, cannot be considered as interference. aDSHIC
DECISION
PARDO, J p:
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 court's 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 petitioner's 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 lawfully 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. If 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.
23
"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 petitioner's 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 reivindicatoria 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 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 NLRC. Besides, petitioner
pointed out that neither the NLRC nor the Labor Arbiter is empowered to adjudicate matters involving ownership of properties.
AECacS
On August 27, 1996, the Court of Appeals denied petitioner's 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 petitioner's accion reivindicatoria on the ground of lack of jurisdiction of
the trial court.
The Court's 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." (Italics 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 reivindicatoria 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 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
24
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 made by 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." (Italics 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, . . .:
"xxx xxx xxx
"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 claimant's possession if warranted by the evidence.
However, if the claimant's 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.
"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 italics
supplied)
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-
25
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 by
respondent 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:
". . .. 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." (Italics ours)
In Consolidated Bank and Trust Corp. v. Court of Appeals, 193 SCRA 158 [1991], we ruled that:
"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 . . ..
"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." (Italics 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 reivindicatory action against the
execution creditor or the purchaser of the property after the sale of public auction, or a complaint for damages against the bond
filed by the judgment creditor in favor of the sheriff. 17
And in Lorenzana v. Cayetano, 18 we ruled that:
"The rights of a third-party claimant should not be decided in the action where the third-party claim has been
presented, but in a separate action to be instituted by the third person. The appeal that should be interposed if
the term 'appeal' may properly be employed, is a separate reivindicatory action against the execution creditor
or the purchaser of the property after the sale at public auction, or compliant for damages to be charged
against the bond filed by the judgment creditor in favor of the sheriff. Such reivindicatory action is reserved
to the third-party claimant."
A separate civil action for recovery of ownership of the property would not constitute interference with the powers or processes
of the Arbiter and the NLRC which rendered the judgment to enforce and execute upon the levied properties. The property levied
upon being that of a stranger is not subject to levy. Thus, a separate action for recovery, upon a claim and prima-facie showing of
ownership by the petitioner, cannot be considered as interference.
The Fallo
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.
||| (Yupangco Cotton Mills, Inc. v. Court of Appeals, G.R. No. 126322, [January 16, 2002], 424 PHIL 469-481)
10. [G.R. No. 120567. March 20, 1998.] PHILIPPINE AIRLINES, INC., petitioner, vs. NATIONAL LABOR RELATIONS
COMMISSION, FERDINAND PINEDA and GOGFREDO CABLING, respondents.
SYNOPSIS
Private respondents are flight stewards of the petitioner. Both were dismissed from the service for their alleged involvement in
the currency smuggling in Hong Kong. Aggrieved by said dismissal, private respondents filed with the NLRC a petition for
injunction. The NLRC issued a temporary mandatory injunction enjoining petitioner to cease and desist from enforcing its
Memorandum of Dismissal. Hence, this petition for certiorari. CaTSEA
26
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." 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. As such, the petition should have bee filed
with the labor arbiter who has the original and exclusive jurisdiction to hear and decide cases involving all workers. 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.
SYLLABUS
1. REMEDIAL LAW; PROVISIONAL REMEDIES; INJUNCTION ELUCIDATED. Generally, injunction is 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. Injunction is also a special equitable relief granted only in cases where there is no plain, adequate
and complete remedy at law.
2. LABOR AND SOCIAL LEGISLATION; NATIONAL LABOR RELATIONS COMMISSION; POWER TO ISSUE AN
INJUNCTIVE WRIT ORIGINATES FROM A LABOR DISPUTE. In labor cases, under Article 218 of the Labor Code and
Sec. 1, Rule XI of the New Rules of Procedure of the NLRC, 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."
3. ID.; LABOR DISPUTE, DEFINED. The term "labor dispute" is defined as "any controversy or matter concerning terms
and conditions of employment or the association or representation or 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." The term "controversy" is likewise defines 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." A "justiciable controversy" is one involving an
active antagonistic assertion of a legal right on one side and denial thereof on the other concerning a real, and not a mere
theoretical question or issue."
4. ID.; LABOR ARBITER; ORIGINAL & EXCLUSIVE JURISDICTION OVER ACTIONS FOR ILLEGAL DISMISSAL.
The petition for injunction directly filed before the NLRC is in reality an action for illegal dismissal. As such, the petition should
have been filed with the labor arbiter who has the original and exclusive jurisdiction to hear and decide cases involving all
workers, whether agricultural or non-agricultural under Art. 217 (a) of the Labor Code. The jurisdiction conferred being both
original and exclusive means 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. AaCEDS
5. ID.; NLRC; JURISDICTION; APPELLATE NATURE. The NLRC shall have exclusive appellate jurisdiction over all
cases decided by labor arbiters as provided in Article 217(b) of the Labor Code. Hence, 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."
6. ID.; ADEQUATE REMEDY; CASE AT BAR. 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." 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. Under the Labor Code, the ordinary and proper recourse of an illegally dismissed employees is to file a complaint
for illegal dismissal with the labor arbiter. In Lamb vs. Phipps, we ruled that if the remedy is specifically provided by law, it is
presumed to be adequate. Moreover, the preliminary mandatory injunction prayed for 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.
7. REMEDIAL LAW; PROVISIONAL REMEDIES; INJUNCTION; IRREPARABLE INJURY; NOT APPRECIATED IN
CASE AT BAR. 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, 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
27
of damages. In the case at bar, the alleged injury which private respondents stand to suffer by reason of their alleged illegal
dismissal can be adequately compensated and therefore, there exists no "irreparable injury," as defined above which would
necessitate the issuance of the injunction sought for. Article 279 of the Labor Code provides that an employee who is unjustly
dismissed from employment shall be entitled 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.
8. ID.; ID.; NOT FOUND IN LABOR CASES. 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. 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. 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.
DECISION
MARTINEZ, J p:
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. LLcd
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, attorney's 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:
". . . that almost two (2) years ago, i.e. on April 15, 1993, the petitioners were instructed to attend an
investigation by respondent's 'Security and Fraud Prevention Sub-Department' regarding an April 3, 1993
incident in Hongkong at which Joseph Abaca, respondent's Avionics Mechanic in Hongkong 'was
intercepted by the Hongkong Airport Police at Gate 05 . . . the ramp area of the Kai Tak International Airport
while . . . about to exit said gate carrying a . . . 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; . . . 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 . . . where a confrontation between Mr. Abaca and
petitioners herein was compulsorily arranged by the respondent's 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 respondent's Disciplinary Board was anomalous 'as there was no one else in the line-up (which
could not be called one) but petitioners . . . 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
respondent's 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 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 plane's 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
28
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 . . . a Memorandum dated February
22, 1995' terminating their services for alleged violation of respondent's Code of Discipline 'effective,
immediately'; that sometime . . . 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 respondent's Code of Discipline; . . . "
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-Technische 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: LLcd
"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"(1) 'Labor Dispute' includes any controversy or matter concerning
terms 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?
xxx xxx xxx
Anent respondent's second argument . . ., Article 218 (e) of the Labor Code . . . 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-
Technische 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.
xxx xxx xxx
Respondent's 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
plain availability 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
29
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 . . . 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 . . .
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'. . . ." 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 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; . . . (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;
30
(2) Termination disputes;
(3) If accompanied with a claim for reinstatement, those cases that workers may file involving wages, rates
of pay, hours of work and other terms and conditions of employment;
(4) Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee
relations;
(5) Cases arising from any violation of Article 264 of this Code, including questions involving the legality of
strikes and lockouts; and
(6) Except claims for employees compensation, social security, medicare and maternity benefits, all other
claims arising from employer-employee relations, including those of persons in domestic or
household service, involving an amount exceeding five thousand pesos (P5,000.00), 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.
xxx xxx xxx"
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
In the case at bar, the alleged injury which private respondents stand to suffer by reason of their alleged illegal dismissal can be
adequately compensated and therefore, there exists no "irreparable injury," as defined above which would necessitate the
issuance of the injunction sought for. Article 279 of the Labor Code provides that an employee who is unjustly dismissed from
employment shall be entitled 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.
31
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." LLcd
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 petitioner. 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.
WHEREFORE, the petition is hereby GRANTED. The assailed Orders dated April 3, 1995 and May 31, 1995, issued by the
National Labor Relations Commission (First Division), in NLRC NCR IC No. 000563-95, are hereby REVERSED and SET
ASIDE.
SO ORDERED.
||| (Philippine Airlines, Inc. v. National Labor Relations Commission, G.R. No. 120567, [March 20, 1998], 351 PHIL 172-188)
32

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