Leo R. Rosales, et al. vs. New A.N.J.H.

Enterprises et al

G.R. No. 203355 Aug. 18, 2015

Velasco, JR., J.

Facts:

The petitioners are former employees of respondent New ANJH Enterprises which was owned by
respondent Noel Awayan.

On Feb. 11, 2010, Noel Awayan wrote to the Director of DOLE Region IV-A regarding New
ANJH's impending cessation of operations, the sale of its assets to NH Oil Mill Corp., and the
termination of the former's 33 employees.

Later on, the said assets, composed of machines, tools and/or other equipment, were sold to NH Oil
Mill, as represented by Heidi Ilagan, Noel's sister. it was also noted that in NH Oil Mill's Articles
of Incorporation, Noel appears to have more than 2/3 of the subscribed capital stock, while the rest
of the shares were subscribed by Heidi and other members of the Awayan family.

On March 8, 2010, New ANJH and Noel filed before the NLRC Sub-Regional Arbitration Branch
No. IV a "Letter Request for Intervention", notifying said commission of New ANJH's permanent
closing due to lack of capital, and requesting that they be allowed to effect the payment of
separation of benefits of their employees.

On March 16, 27, and 29, 2010, the former employees received their respective separation pays and
signed their respective Quitclaims and Release. Following the payments, Labor Arbiter
Melchisedek Guan issued 4 Orders wherein he declared the "labor dispute" between New ANJH
and the former employees as "dismissed with prejudice on ground of settlement."

The former employees filed a complaint for illegal dismissal, alleging that though New ANJH
ceased operation on March 15, 2010, it resumed its operation as NH Oil using the same
machineries, with the same owners and management, and that the sale of the assets of New ANJH
to NH Oil was a circumvention of their security of tenure.

Executive Labor Arbiter Generoso Santos found that the former employees had been illegally
dismissed and ordered their reinstatement plus payment of their full back wages less the amount
paid to the as their separation pay. The companies and other respondents then filed their Notice of
Appeal with Appeal Memorandum along with a Verified Motion to Reduce Bond, while the former
employees filed a Memorandum of Partial Appeal claiming that ELA Santos erred in failing to
award them moral and exemplary damages.

The NLRC denied the New ANJH, et al's Motion to Reduce Bond and dismissed their appeal for
non-perfection. The NLRC also granted the former employees' partial appeal. New ANJH, et al,
then filed a motion for Reconsideration with Motion to Admit Additional Appeal Cash Bond, which
was opposed by the former employees. The NLRC then reversed its earlier decision and ordered the
dismissal of the former employees' complaint due to res judicata, and that the sale of assets to NH
Oil Mill was ab exercise of sound management prerogative and that there was no proof that it was
made to defeat the former employees' security of tenure. NLRC also denied the former employees'
Motion for Reconsideration thus this petition.
Issue:

Whether or not Noel Awayan’s letter involved a labor dispute?

Held:

Yes. 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 the disputants
stand in the proximate relation of employer and employee. Since separation pay concerns a term
and condition of employment, Noel's request is clearly a labor dispute under the Labor Code.