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G.R. No. 183233 December 23, 2009

VIRGILIO G. ANABE, Petitioner,
vs.
ASIAN CONSTRUCTION (ASIAKONSTRUKT), ZENAIDA P. ANGELES AND N.O. GARCIA, Respondents.
D E C I S I O N
CARPIO MORALES, J.:
Virgilio G. Anabe (petitioner) was hired by respondent Asian Construction (Asiakonstrukt) as radio technician/operator on
April 15, 1993. By notice dated September 8, 1999, he was advised that his services would be, as he was in fact, terminated
effective October 8, 1999 on the ground of retrenchment. Petitioner thus filed on February 10, 2000 a complaint
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for illegal
dismissal and illegal deduction and payment of overtime pay, premium pay, holiday pay, service incentive leave pay, and 13th
month pay.
Asiakonstrukt, attributing petitioners retrenchment to sudden business reversal in the construction industry, averred,
however, that petitioners money claims have been offset against his outstanding accountabilities.
By Decision
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of June 29, 2001, the Labor Arbiter, finding that Asiakonstrukt failed to submit financial statements to prove
losses, ruled that petitioner was not validly dismissed. Thus he disposed:
WHEREFORE, premises considered, judgment is hereby rendered finding the respondents liable for illegal dismissal and
consequently ordered to reinstate complainant to his former position or its equivalent without loss of seniority rights and
other privileges, with full backwages and benefits from date of dismissal up to actual date of reinstatement which is in the
amount of P136,277.14 as of this month. Respondent[s] are likewise ordered to pay complainant his 13th month pay in the
amount of P4,259.64 and illegal deductions in the amount ofP164,960.24 and overtime pay in the amount of P6.11
[underpayment of overtime pay as computed by the Computation and Examination Unit of the NLRC]. Respondents are
further ordered to pay complainant ten percent (10%) of the total award as attorneys fees.
On appeal, the National Labor Relations Commission (NLRC), taking into consideration the certified true copies of the Audited
Financial Statements from 1998 to 2000 submitted by Asiakonstrukt, partly granted the appeal by Resolution
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of March 10,
2004. It modified the Labor Arbiters Decision by holding that petitioner was not illegally dismissed. While it affirmed the
award of the 13th month pay, overtime pay and attorneys fees, it ordered the payment to petitioner of P19,170 as
separation pay.
Moreover, the NLRC reduced the reimbursable amount of illegal deductions from P164,960.24 to P88,000.00, ratiocinating
that petitioner is only entitled to money claims from 1997-1999, the claims prior thereto having already prescribed.
Petitioners motion for reconsideration was denied by Order
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dated August 31, 2005, hence, he appealed to the Court of
Appeals, assailing the consideration by the NLRC of the Audited Financial Statements which were submitted only on appeal.
By Decision
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of December 26, 2007, the appellate court held that there was no grave abuse of discretion on the part of the
NLRC when it considered the financial statements as they "already form part of the records on appeal."
Citing Clarion Printing House, Inc. v. NLRC,
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the appellate court noted that the NLRC is not precluded from receiving evidence
on appeal as technical rules of procedure are not binding in labor cases. And it affirmed the ruling of the NLRC that petitioner
is only entitled to the illegal deductions for the period 1997-1999 in the amount of P88,000.00, as the prescriptive period for
money claims is only three years from the time the cause of action accrues.
Petitioners motion for reconsideration having been denied by Resolution
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of April 2, 2008, he filed the present petition,
maintaining that he was illegally dismissed as Asiakonstrukt failed to prove that it was suffering business losses to warrant a
valid retrenchment of its employees; and Asiakonstrukt belatedly submitted financial statements were not shown to be
newly found evidence and unavailable during the proceedings before the Labor Arbiter to thus cast doubts as to their
veracity.
The petition is partly meritorious.
Retrenchment is the termination of employment initiated by the employer through no fault of and without prejudice to the
employees, it is resorted to during periods of business recession, industrial depression, or seasonal fluctuations or during lulls
occasioned by lack of orders, shortage of materials, conversion of the plant for a new production program or the introduction
of new methods or more efficient machinery or of automation. It is a management prerogative resorted to, to avoid or
minimize business losses,
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and is recognized by Article 283 of the Labor Code, as amended, viz:
Art. 283. Closure of establishment and reduction of personnel.The employer may also terminate the employment of any
employee due to x x x retrenchment to prevent losses or the closing or cessation of operations of the establishment x x x by
serving a written notice on the worker and the [DOLE] at least one month before the intended date thereof. x x x In case of
retrenchment to prevent losses, the separation pay shall be equivalent to one (1) month pay or at least one-half month pay
for every year of service whichever is higher. x x x (Emphasis ours.)
To effect a valid retrenchment, the following elements must be present: (1) the retrenchment is reasonably necessary and
likely to prevent business losses which, if already incurred, are not merely de minimis, but substantial, serious, and real, or
only if expected, are reasonably imminent as perceived objectively and in good faith by the employer; (2) the employer
serves written notice both to the employee/s concerned and the Department of Labor and Employment at least a month
before the intended date of retrenchment; (3) the employer pays the retrenched employee separation pay in an amount
prescribed by the Code; (4) the employer exercises its prerogative to retrench in good faith; and (5) the employer uses fair
and reasonable criteria in ascertaining who would be retrenched or retained.
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The losses must be supported by sufficient and convincing evidence,
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the normal method of discharging which is the
submission of financial statements duly audited by independent external auditors.
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In the present case, Asiakonstrukt failed to submit its audited financial statements within the two years that the case was
pending before the Labor Arbiter. It submitted them only after it received the adverse judgment of the Labor Arbiter.
Indubitably, the NLRC is not precluded from receiving evidence on appeal as technical rules of evidence are not binding in
labor cases. There is, however, a caveat to this policy. The delay in the submission of evidence should be clearly explained
and should adequately prove the employers allegation of the cause for termination.
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In the present case, Asiakonstrukt
proffered no explanation behind the belated submission. And the financial statements
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it submitted covered the period
1998-2000. Further, note that the audited financial statement
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covering the period 1998-2000 was prepared in April 2001,
which begs the question of how the management knew at such date of the companys huge losses to justify petitioners
retrenchment in 1999.
Furthermore, from the certification
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issued by the Securities and Exchange Commission (SEC), it would appear that
Asiakonstrukt failed to submit its financial statements to the SEC, as required under the law, for the period 1998-2000 and
2003-2005, thereby lending credence to petitioners theory that the financial statements submitted on appeal may have been
fabricated. Indeed, Asiakonstrukt could have easily submitted its audited financial statements during the pendency of the
proceedings at the labor arbiters level, especially considering that it was in late 2001 that the case was decided.
For failure then of Asiakonstrukt to clearly and satisfactorily substantiate its financial losses,
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the dismissal of petitioner on
account of retrenchment is unjustified. Petitioner is thus entitled to the twin reliefs of payment of backwages and other
benefits from the time of his dismissal up to the finality of this Courts Decision, and reinstatement without loss of seniority
rights or, in lieu thereof, payment of separation pay.
On the reduction of petitioners money claims on account of prescription, under Article 1139 of the Civil Code, actions
prescribe by the mere lapse of the time prescribed by law. That law may either be the Civil Code or special laws as specifically
mandated by Article 1148.1avvphi1In labor cases, the special law on prescription is Article 291 of the Labor Code which
provides:
Article 291. Money Claims. All money claims arising from employer-employee relations accruing during the effectivity of
this Code shall be filed within three (3) years from the time the cause of action accrued; otherwise they shall be barred
forever. (emphasis supplied)
The Labor Code has no specific provision on when a monetary claim accrues. Thus, again the general law on prescription
applies. Article 1150 of the Civil Code provides that
Article 1150. The time for prescription for all kinds of actions, when there is no special provision which ordains otherwise,
shall be counted from the day they may be brought. (emphasis supplied)
The day the action may be brought is the day a claim started as a legal possibility.
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In the present case, the day came when
petitioner learned of Asiakonstrukts deduction from his salary of the amount of advances he had received but had, by his
claim, been settled, the same having been reflected in his payslips, hence, it is assumed that he learned of it at the time he
received his monthly paychecks.
As thus correctly ruled by both the NLRC and the appellate court, only those illegal deductions made from 1997 to 1999 when
he was dismissed can be claimed, he having filed his complaint only in February 2000. Per his own computation and as
properly adopted by the NLRC in its assailed Resolution dated March 10, 2004, petitioner is thus entitled to reimbursement
of P88,000.00.
WHEREFORE, the petition is GRANTED. The Court of Appeals Decision dated December 26, 2007 and Resolution dated April 2,
2008 are SET ASIDE. The Decision of the Labor Arbiter dated June 29, 2001 isREINSTATED, with the MODIFICATION that
petitioner, Virgilio G. Anabe, is entitled to P88,000.00 representing reimbursement of the illegal deductions from his salary.
The case is REMANDED to the National Labor Relations Commission which is DIRECTED to recompute WITH DISPATCH the
monetary awards due petitioner.
SO ORDERED.
G.R. No. 79106 April 10, 1989
CHRISTIAN LITERATURE CRUSADE, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and LOIDA DEL ROSARIO, respondents.
Agustin S. Sundiam for petitioner.
The Solicitor General for public respondent.
Domingo V. del Rosario for private respondent.

MEDIALDEA, J.:
This is a petition for certiorari with preliminary injunction seeking to nullify the writ of execution dated June 2, 1987, issued
by the Labor Arbiter in NLRC-NCR-Case No. RBIV-9706-77, entitled "Loida del Rosario vs. Christian Literature Crusade."
The antecedent facts are as follows:
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Sometime in January, 1975, private respondent Loida del Rosario (hereinafter referred to as del Rosario) was hired by
petitioner Christian Literature Crusade (hereinafter referred to as Crusade) as a bookkeeper. Later, on October 4, 1976, an
application for clearance to terminate the services of del Rosario on the ground of incompetence was filed by Crusade with
the Ministry of Labor and Employment. The application was opposed by del Rosario. On November 20, 1976, del Rosario was
placed under preventive suspension.
On March 31, 1982, the Labor Arbiter rendered a decision, the dispositive portion of which reads (pp. 31-32,Rollo):
WHEREFORE, premises considered, judgment is hereby rendered denying the application for clearance filed
by Christian literature Crusade and it (applicant) is ordered to reinstate Loida del Rosario to her former
position/or substantially equivalent position, with backwages for a period of three (3) years without
deductions from possible earnings elsewhere, and without loss of seniority rights and other privileges
formerly appertaining to her.
SO ORDERED.
On August 9, 1982, a writ of execution was issued by the Labor Arbiter upon motion of del Rosario, there being no appeal (pp.
33-34, Rollo). On August 27, 1982, the award of backwages in the amount of THIRTEEN THOUSAND SIX HUNDRED EIGHTY
PESOS (P 13,680.00) computed on the basis of del Rosario's P 380.00 monthly salary was satisfied. However, on the issue of
reinstatement, the Sheriff stated in his return that del Rosario was not reinstated in view of the "Manifestation and Motion to
Hold in Abeyance the Execution of the Decision Per Reinstatement of the Complainant Loida del Rosario,' filed by Crusade on
August 31, 1982.
On February 2, 1983, del Rosario filed an "Ex-Parte Motion for the Issuance of an Alias Writ of Execution" praying therein for
reinstatement with payment of allowances and 13th month pay from 1976, the date of her dismissal, up to January, 1983,
amounting to P 20,072.00.
On February 28, 1983, an Alias Writ of Execution was issued by the Labor Arbiter for del Rosario's reinstatement.
On April 13, 1983, a Manifestation and Motion was again filed by del Rosario alleging that the computation of her backwages
should include the allowances and 13th month pay. On June 7, 1983, the Labor Arbiter resolved the question in this wise (p.
37, Rollo):
It might be noted that the Decision of Hon. Lacandola S. Leano states that complainant should be paid
backwages for a period of three (3) years without deductions from possible earnings elsewhere and without
loss of seniority rights and other privileges formerly appertaining to her.
The basis of the computation of the backwages of the complainant is the amount appearing in the
complaint which is P 380.00 a month that was in 1976 which is her latest salary. It might be noted that the
prevailing minimum wage during this time is P 260.00 plus P 110.00 monthly allowance, and without loss of
seniority rights and other privileges formerly appertaining to her.
The computation, we believe is correct and the Motion for Recomputation of the Backwages filed by the
complainant is hereby denied and let an Alias Writ of Execution for the reinstatement of the complainant
be issued.
On June 9, 1983, the Labor Arbiter issued a second Alias Writ of Execution for the purpose of reinstatement of del Rosario,
which was not satisfied.
The motions for recomputation of her backwages having been denied, del Rosario appealed to the National Labor Relations
Commission (hereinafter referred to as NLRC) regarding the interpretation of the March 31, 1982 decision of the Labor
Arbiter. On August 29, 1986, the NLRC rendered a decision, the dispositive portion of which reads (pp. 38-39, Rollo):
WHEREFORE, with the above modification, the appealed Order is Affirmed. Accordingly, let this case be
remanded to the Labor Arbiter of origin for execution of the reinstatement aspect of the 31 March 1982
Decision and likewise of the award hereto indicated after proper computation.
SO ORDERED.
The modification referred to states (p. 38, Rollo):
The term 'without loss of other privileges formerly appertaining to her' refers to other benefits that may
have accrued to her had she not been dismissed. Obviously, this includes the decretal allowances, service
incentive leave pay and 13th month pay as sought for in the motion. It appearing, however, that the
amount of P 380.00 set forth in the complaint and taken as the basis in the determination of complainant's
backwages already covers her monthly allowance, the same should therefore be excluded in this award.
And for purposes of quantifying the other two (2) remaining claims, the computation must be reckoned
from 20 November 1976, the date of her termination, until 20 November 1979, or for a period of three (3)
years as directed in the subject decision.
On February 9, 1987, del Rosario filed a Partial Motion for Reconsideration before the NLRC arguing that the latter erred in
"holding that the amount of P 380.00 covers the allowance and that her monthly rate was P 260.00 and prayed for payment
of additional backwages based on a computation of P 380.00 monthly rate with corresponding privileges and benefits on the
basis of said monthly rate.
Later, a Motion for the Issuance of a Writ of Execution was filed anew by del Rosario, alleging that based on her computation,
she is entitled to backwages including living allowance and 13th month pay in the total amount P 80,329.15 from September
1, 1982 to March 15, 1987 and prayed for the payment of the same and reinstatement.
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On June 2, 1987, the Labor Arbiter issued a Writ of Execution, the dispositive portion of which reads (p. 44,Rollo):
NOW, THEREFORE, you are hereby commanded to go to respondent Christian Literature Crusade's premises
at 104 Karuhatan, Valenzuela, Bulacan and reinstate Loida del Rosario to her former position or a
substantially equivalent position, without loss of seniority rights and other privileges formerly appertaining
to her and collect the amount of EIGHTY FOUR THOUSAND SIX HUNDRED EIGHTY ONE PESOS and NINETY
SIX CENTAVOS (P 84,681.96) representing her backwages and other benefits aside from the 3 years
deductible backwages as originally ordered and already satisfied, commencing from the period when the
Sheriff was unable to effect reinstatement per decision dated August 29, 1986, as per official computation
of the Research and Information Unit (attached as Annex "A" of this Writ) and thereafter turn over said
amount to this office for further disposition.
In case you fail to collect said amount in cash, you are directed to cause the satisfaction of the same from
the movable goods and immovable properties of respondent not exempt from execution.
You are further directed to return this Writ within fifteen (15) days from compliance thereof together with
your corresponding report.
You may collect legal fees from the respondent.
On July 16, 1987, the Motion to Quash Writ of Execution was denied.
Hence, the present petition.
Crusade alleged that on June 17, 1987, the Deputy Sheriff garnished its bank deposits amounting to more than P 8,000.00. On
August 3, 1987, We issued a temporary restraining order enjoining the NLRC, thru Labor Arbiter Edgardo M. Madriaga, from
releasing the garnished amounts of money to del Rosario. However, in her comment, del Rosario alleged that the amount of
P 7,771.88 has been released to her before the issuance of the temporary restraining order.
The main issue is whether or not del Rosario is entitled to additional backwages from September 1, 1982 to March 15, 1987.
Crusade alleges that the questioned writ of execution is null and void for the following reasons: (1) it does not conform to,
but is even violative of the decisions dated March 31, 1982 and August 29, 1986 which decisions merely awarded del Rosario
"backwages for a period of three (3) years without deductions from possible earnings elsewhere, without loss of seniority
rights and other privileges formerly appertaining to her; (2) del Rosario's backwages totalling P l3,680. 00 had already been
fully paid in 1982; and (3) it commands collection from Crusade of P 84,681.96 representing del Rosario's backwages from
September 1, 1982 until March 15, 1987. Unless the subject writ of execution is declared null and void, NLRC would be
allowed to award backwages to del Rosario for more than the three (3) years maximum, or seven (7) years and nine (9)
months to be more precise, or without any limit for that matter.
On the other hand, del Rosario argues that the challenged writ of execution is based on the obstinate refusal of Crusade to
reinstate her and not on the decisions dated March 31, 1982 and August 29, 1986. The power of the NLRC and/or the Labor
Arbiter to grant or extend backwages for refusal of the employer enjoined to reinstate terminated workers is recognized in
this jurisdiction in the case of TUPAS Local Chapter No. 979 vs. NLRC (G.R. Nos. 60532-33, November 5, 1985,139 SCRA 478).
The petition is impressed with merit.
It is a well-settled rule that the execution of judgment must conform to that which is ordained or decreed in the dispositive
portion of the decision Laingo vs. Camilo, G.R. No. L-35833, June 29, 1984, 130 SCRA 144; National Steel Corporation vs.
National Labor Relations Commission and Pelagio Remolado, G.R. No. 74711, September 19, 1988). Where the writ of
execution is not in harmony with and exceeds the judgment which gives it life, the writ has pro tanto no validity (Mutual
Security Insurance Corporation vs. Court of Appeals, G.R. No. L-47018, September 11, 1987,153 SCRA 678). This is so because
once a judgment has become final and executory or partially executed as in this case, it may no longer be amended, modified
or altered. What remains to be done is purely the ministerial enforcement or execution of the judgment.
In case of defiance or non-compliance with the writ of execution, as in this case, where Crusade paid del Rosario three (3)
years backwages but failed and refused and still fails and refuses to reinstate her despite several writs of execution, the
remedy is not for the grant in another writ of execution of continuing backwages up to the time of actual reinstatement. The
grant of additional backwages to serve as damages or as penalty to Crusade for persistently refusing to reinstate del Rosario
has no basis in the decision sought to be enforced and hence, it may not be resorted to in order to compel reinstatement.
The remedy is provided in the case of D.M. Consunji, Inc. vs. Pucan, et al., G.R. No. 71413, March 21, 1988, 159 SCRA 107,
wherein an alias writ of execution was likewise issued directing payment of additional backwages after the prior award of
backwages equivalent to five (5) years and seven (7) months had been fully satisfied. The Court, in nullifying the order for
payment of additional sums, therein held:
To ensure compliance with the court's order, and realizing the stubborn refusal to reinstate him, petitioner
(sic) should have resorted to more drastic remedies such as the filing of a motion to cite petitioner in
contempt. In this way, prompt compliance could have resulted.
Thus, del Rosario should have filed a motion to cite Crusade in contempt for refusing to reinstate her despite several writs of
execution issued by the Labor Arbiter.
The case of TUPAS Local Chapter No. 979 vs. NLRC, supra, relied upon by del Rosario in support of her claim for continuing
backwages, is inapplicable to the case at bar. It should be noted that the Court's departure therein from the usual equivalent
of the three years backwages generally awarded by this Court was still within its power to do, the reinstatement of the
workers therein being by virtue of a return-to-work order, not by virtue of a final and executory judgment. In Davao Free
Workers Front vs. CIR, G.R. No. L-29356, October 31,1974, 60 SCRA 408, this Court, in departing from the general rule, merely
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upheld the trial court's decision, which was not yet final and executory, awarding the employees therein unlawfully dismissed
full backwages without qualification from dismissal to reinstatement. Likewise, in National Shipyards and Steel Corporation
vs. CIR, G.R. No. L-32724, June 28,1974, 57 SCRA 642, this Court merely upheld the industrial court's questioned orders and
resolutions in implementation of this Court's long final and executory decision in a previous case involving exactly the same
subject matter. Said orders and resolutions provided for the employee's reinstatement with backwages until actually
reinstated. In upholding the same, this Court said that the matter of reinstatement with backwages was long resolved and
may no longer be reopened.
In the case at bar, what became final and executory is the decision of the Labor Arbiter granting reinstatement and only three
(3) years backwages. Thus, as far as this case is concerned, the issue of whether or not del Rosario's backwages should be
limited to three (3) years or continued indefinitely until actual reinstatement can no longer be raised or reopened. The
lengthy discussion made by Crusade that the award of backwages up to the maximum of three (3) years is not without
justification and the corresponding retort of del Rosario citing TUPAS, supra, where this Court granted backwages without
qualification until reinstatement, are, therefore, irrelevant and beside the point.
ACCORDINGLY, the petition is hereby GRANTED. The writ of execution dated June 2, 1987 insofar as it granted additional
backwages is hereby SET ASIDE and private respondent Loida del Rosario is hereby ordered to refund to petitioner Christian
Literature Crusade the amount of P 7,771.88. However, the writ STANDS insofar as it ordered petitioner to reinstate private
respondent to her former position or a substantially equivalent position. Where reinstatement is no longer feasible,
petitioner is ordered to pay separation pay as provided by law.
This decision is immediately executory.
SO ORDERED.
G.R. No. 105710 February 23, 1995
JAG & HAGGAR JEANS AND SPORTSWEAR CORPORATION, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, LAKAS MANGGA-GAWA SA JAG, DOMINGO NAMIA, RIZALDE FLORES, JULIETA
ADRIANO, ROBERTO ALAMO, JOSE BALDELOBAR, LILIBETH BIDES, NARCISO GARBIN, AMELITA LEBRIAS, MARIBEL MADRID,
VERONICA MAGPILI, IMELDA NEPOMUCENO, AND DAN VILLAMOR, respondents.

QUIASON, J.:
This is a petition for certiorari to set aside the Decision dated February 26, 1992 of the National Labor Relations Commission
(NLRC) in NCR Case No. 00-09-04050-88 and its Resolution dated April 22, 1992, denying petitioner's motion for
reconsideration. The decision held that the members of the Union who did not ratify or avail of the benefits under the
Compromise Agreement entered into between petitioner and the Union were not bound thereby (Rollo, pp. 32-41). In our
Resolution dated June 29, 1992, we issued a temporary restraining order.
I
In September 1988, the Lakas Manggagawa sa Jag (Union) composed of the rank-and-file employees of Jag & Haggar Jeans
and Sportswear Corporation, petitioner herein, staged a strike. Petitioner filed a petition to declare the strike illegal.
On November 29, 1988, Labor Arbiter Eduardo Madriaga rendered a decision, declaring the strike illegal and ordering the
dismissal of the officers, as well as the members of the Union who took part in the illegal strike. The dispositive portion of
said decision reads as follows:
WHEREFORE, premises considered, the strike conducted by respondent union and individual respondents
on September 22, 1988 and subsisting to date, is hereby declared to be illegal for failure to observe the
cooling-off period as agreed upon by the parties and the conduct of the strike vote as required by law, as
well as for commission of illegal acts in the staging of the said strike as averred in the affidavits of witnesses
for petitioner.
Accordingly, the officers of the union, to wit:
xxx xxx xxx
are hereby declared to have legally lost their employment status.
Likewise, for commission of illegal acts as averred in the affidavits of witnesses for petitioner which were
not controverted by respondents, the following rank-and-file employees, to wit:
xxx xxx xxx
are hereby declared to have legally lost their employment status.
The rest of the striking workers are hereby ordered to immediately dismantle their pickets and barricades
and return to work within seventy-two (72) hours from receipt of copy of this Decision.
Finally, both parties are hereby enjoined to maintain the status quo prior to the strike staged by
respondents (Rollo, pp. 12-14).
The affected officers and members of the Union appealed the decision to NLRC. On August 31, 1989, NLRC rendered its
decision setting aside the Labor Arbiter's decision and ordering the reinstatement of the affected employees (Rollo, pp. 14-
15).
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Acting on the motion for reconsideration filed by petitioner, NLRC, on May 31, 1990 modified its earlier decision as follows:
WHEREFORE, premises considered, the Commission's Decision dated 31 August 1989, is hereby modified as
follows:
1. The following officers of the Union Norma Jocson-President Narciso Sinag-Vice President; Gloria Gavis-
Treasurer; Luzviminda Guspid-Secretary; and Apolinario Sta. Ana-PRO are hereby declared to have lost their
employment;
2. The Union Board Members and Shop Stewards may be dismissed by respondent-appellee subject to the
payment of separation pay equivalent to one-half month for every year of service; and
3. The mere union members are directed to report for work within ten (10) days from receipt of this
Decision and management is ordered to accept them to their former or equivalent position. (Rollo, p. 15)
Again, the aggrieved officers and members of the Union filed a motion for reconsideration while petitioner filed a
Manifestation/Motion for Clarification (Rollo, p. 15).
Pending resolution of the two motions by NLRC, both parties agreed to negotiate a settlement and to defer the enforcement
of the decision.
On July 30, 1990, the two motions were dismissed by the NLRC (Rollo, p. 15).
On October 23, 1990, a compromise agreement was executed and signed by petitioner and the Union represented by its
officers (Rollo, pp. 16-18). The parties agreed that:
1. The Company shall pay to the officers and members of the Union named in the aforesaid decision
separation pay equivalent to one-half (1/2) month basic pay for every year of service.
2. Additionally, the Company shall pay to the officers of the Union mentioned in item No. 2 of the Decision,
namely the Union Board members, and Shop Stewards financial assistance in the amount of One Thousand
(P1,000.00) Pesos.
3. The Company shall also pay to the members of the Union mentioned in item No. 3 of the Decision,
namely those who should be allowed to work, financial assistance in the amount of Two Thousand
(P2,000.00) Pesos.
xxx xxx xxx
Out of a total of 114 affected employees, 90 of them availed of the benefits provided for under the Compromise Agreement
(Rollo, pp. 16-19).
On May 15, 1991, 24 of the affected employees moved for the execution of the May 31, 1990 Decision of NLRC (Rollo, p. 19).
Petitioner filed an opposition, citing the Compromise Agreement, which had been availed of by 90 of the affected employees
(Rollo, p. 19)
On September 12, 1991, Labor Arbiter Salimathar Nambi issued an order, denying the motion for execution (Rollo, p. 19). In
the meantime, 12 of the 24 affected employees also availed of the benefits under the Compromise Agreement. The
remaining 12 employees appealed to NLRC from the denial of their motion for execution. On February 26, 1992, NLRC set
aside the order of Labor Arbiter Nambi and directed petitioner to accept the union members to their former or equivalent
position with back wages from July 30, 1990 until they were reinstated (Rollo, p. 40).
A motion for reconsideration was filed by petitioner but this was denied on April 22, 1992 (Rollo, p. 42).
On May 19, 1992, petitioner filed with this Court a petition for certiorari with prayer for issuance of a restraining order and/or
writ of preliminary injunction docketed as G.R. No. 105184. However, the petition was dismissed by the First Division in a
resolution dated May 27, 1992 for failure to comply with the Revised Rules of Court and Circular Nos. 1-88 and 28-91 (G.R.
No. 105184, Rollo, p. 35).
On June 19, 1992, petitioner filed a motion for leave to refile its petition for certiorari (G.R. No. 105710). In a resolution dated
June 29, 1992, the Third Division of this Court granted the petition and resolved to issue a temporary restraining order (Rollo,
p. 44). The case was reassigned to the First Division.
II
The main issue to be resolved is whether or not the Compromise Agreement entered into by petitioner and the Union is
binding upon private respondents.
Petitioner contends that the Compromise Agreement was deemed ratified by the union members considering that 102 out of
the 114 affected employees already availed of and received the benefits under the said agreement and that private
respondents were represented in all stages of the proceedings without them questioning the authority of their union officers
and their counsel. It cites the case of Betting Ushers Union (PLUM) v. Jai-alai, 101 Phil. 822 (1957) wherein we ruled that the
"will of the majority should prevail over the minority" and which ruling was reiterated in Dionela v. Court of Industrial
Relations, 8 SCRA 832 (1963) and Chua v. National Labor Relations Commison, 190 SCRA 558 (1990).
On the other hand, private respondents allege that for a compromise agreement to be binding upon them, a special power of
attorney or their express consent was necessary for what was being waived or surrendered under the agreement was their
right to an employment. Such right is protected under the security of tenure provision of the Labor Code of the Philippines
and cannot be lost without due process of law (Rollo, p. 62).
7

"Settlement of disputes by way of compromise whereby the parties, by making reciprocal concessions, avoid a litigation or
put an end to one already commenced, is an accepted, nay desirable practice encouraged by the courts of law and
administrative tribunals" (Santiago v. De Guzman, 177 SCRA 344 [1989]).
The authority of attorneys to bind their clients is governed by Section 7, Rule IV of the New Rules of Procedure of the
National Labor Relations Commission, which provides:
Authority to bind party. Attorneys and other representatives of parties shall have authority to bind their
clients in all matters of procedure; but they cannot, without a special power of attorney or express consent,
enter into a compromise agreement with the opposing party in full or partial discharge of a client's
claim (Emphasis supplied).
It will be noted that the Compromise Agreement provides in paragraphs 2 and 3 thereof that:
2. The union Board Members and Shop Stewards may be dismissed by respondent-appellee subject to the
payment of separation pay equivalent to one-half month for every year of service; and
3. The mere union members are directed to report for work within 10 days from receipt of this Decision and
management is ordered to accept them to their former or equivalent position (Rollo, pp. 16-17).
The Decision dated May 8, 1990 ordered the reinstatement of the union members to their former or equivalent position
while in the case of the Union board members and shop stewards, petitioner was given the option to dismiss them subject to
the payment of separation pay. However, in the Compromise Agreement, not only the union officers, board members and
shop stewards were considered dismissed from the service but also the union members subject to the payment of separation
pay and financial assistance.
The waiver of reinstatement, like waivers of money claims, must be regarded as a personal right which must be exercised
personally by the workers themselves. "For a waiver thereof to be legally effective, the individual consent or ratification of
the workers or employees involved must be shown. Neither the officers nor the majority of the union had any authority to
waive the accrued rights pertaining to the dissenting minority members, . . . . The members of the union need the protective
shield of this doctrine not only vis-a-vis their employer but also, at times, vis-a-vis the management of their own union, and
at other times even against their own imprudence or impecuniousaess" (General Rubber and Footwear Corporation v. Drilon,
169 SCRA 808 [1989]).
We have ruled that ". . . when it comes to individual benefits accruing to members of a union from a favorable final judgment
of any court, the members themselves become the real parties in interest and it is for them, rather than for the union, to
accept or reject individually the fruits of litigation" (Esso Philippines, Inc. v. Malayang Manggagawa sa Esso (MME), 75 SCRA
73 [1977]).
The authority to compromise cannot lightly be presumed and should be duly established by evidence (General Rubber and
Footwear Corporation v. Drilon, supra; Kaisahan ng mga Manggagawa sa La Campana v. Sarmiento, 133 SCRA 220, [1984]).
We also find no reason for the union members to enter into a compromise when the decision of NLRC ordering their
reinstatement is more advantageous to them than their being dismissed from their jobs under said Compromise Agreement.
The Compromise Agreement does not apply to private respondents who did not sign the Compromise Agreement, nor avail
of its benefits.
However, while respondents Domingo Namia and Rizalde Flores are not bound by the terms of the Compromise Agreement,
they are bound by the amended decision of NLRC rendered on May 3, 1990 which provides that members of the board of
directors of the union may be dismissed by petitioner subject to the payment of separation pay. The two respondents did not
appeal the amended decision after the denial by NLRC of their motion for reconsideration thereof.
WHEREFORE, the Decision dated February 26, 1992 of the NLRC is AFFIRMED with the modification stated above with respect
to respondents Domingo Namia and Rizalde Flores. The temporary restraining order is lifted except with respect to
aforementioned respondents.
SO ORDERED.
G.R. No. 183417 February 5, 2010
MINDANAO TIMES CORPORATION, Petitioner,
vs.
MITCHEL R. CONFESOR, Respondent.
D E C I S I O N
CARPIO MORALES, J.:
Via petition for review on certiorari, Mindanao Times Corporation (petitioner) seeks the reversal of the Court of Appeals
Amended Decision
1
of November 29, 2007 and Resolution
2
of May 26, 2008 setting aside the National Labor Relations
Commission (NLRC) Resolutions of November 30, 2004
3
and February 28, 2005
4
which reinstated the Decision of the Labor
Arbiter.
Mitchel Confesor (respondent) was employed on May 1998 by petitioner, publisher of a newspaper of general circulation in
Mindanao and Davao City. He became petitioners Associate Editor in six months.
Respondent resigned from petitioner on June 17, 2003. On August 28, 2003, he filed a verified complaint
5
before the Labor
Arbiter for payment of separation pay and pro-rated 13th month pay for 2003. He later amended his complaint
6
from one of
money claims to illegal dismissal, averring that petitioners President and Chief Operating Officer forced him to resign after he
8

and Anthony Allada, a columnist, published separate articles which appeared in the June 14, 2003 issue of petitioners
newspaper accusing then Presidential Assistant Dominador "Boy" Zuo, Jr., Cong. Prospero Nograles and Cong. Corazon
Malanyaon of being involved in some anomalies; and that he did resign as he was told that he would be entitled to
separation pay and other benefits, but that the promised benefits were not forthcoming, hence, his filing of the complaint.
By Decision
7
of January 19, 2004, the Labor Arbiter, finding that respondent was constructively dismissed, ordered petitioner
to pay him P71,909.77 representing backwages, as well as separation pay and 10% of the total award as attorneys fees.
Both parties appealed to the NLRC in Cagayan de Oro City, respondent contending that, in addition to the award granted by
the Labor Arbiter, he was entitled to service incentive leave pay and moral and exemplary damages. Petitioner, on the other
hand, questioned the Labor Arbiters finding of constructive dismissal.
In compliance with the appeal bond requirement, petitioner deposited the amount of P71,909.77 with the United Coconut
Planters Bank and surrendered to the NLRC the passbook
8
covering the deposit, along with a Deed of Assignment
9
it executed
assigning the proceeds of the deposit in favor of respondent and authorizing the NLRC to release the same in the event that
the Labor Arbiters Decision becomes final and executory.
By Resolution of November 30, 2004, the NLRC reversed the ruling of the Labor Arbiter and dismissed respondents
complaint, holding that there was no constructive dismissal since respondent effectively resigned from his employment.
Respecting the issue raised by respondent of whether the bank deposit complied with the appeal bond requirement, the
NLRC held that it was in substantial compliance with Sec. 6, Rule 6 of the NLRC Rules of Procedure.
The Court of Appeals, to which respondent assailed the NLRC resolution via petition for certiorari, dismissed said petition by
Decision
10
of November 13, 2006.
On respondents Motion for Reconsideration, however, the appellate court, by the assailed Amended Decision of November
29, 2007, set aside the NLRC February 28, 2005 Resolution and reinstated the Labor Arbiters Decision which it declared to
have become final and executory.
In concluding that the Labor Arbiters Decision had become final and executory, the appellate court held that the bank
deposit of petitioner failed to substantially comply with the appeal bond requirement, noting that its Deed of Assignment
"cannot be a substitute for the cash or surety bond contemplated under the Rules for the perfection of appeal" as the deed
"does not ensure payment of the adjudged monetary award in case the appeal of [herein petitioner] fails."
Petitioners motion and supplemental motion for reconsideration having been denied, it filed the present petition, insisting
that its bank deposit and Deed of Assignment which it transmitted to the NLRC, along with the passbook, constituted
substantial compliance with the rule on perfection of appeals.
The petition is bereft of merit.
Article 223
11
of the Labor Code provides that an appeal by the employer to the NLRC from a judgment of a labor arbiter which
involves a monetary award may be perfected only upon the posting of a cash or surety bond issued by a reputable bonding
company duly accredited by the NLRC, in an amount equivalent to the monetary award in the judgment appealed from.
Section 4 of the New Rules of Procedure of the NLRC echoes the provision, viz.:
SECTION 4. 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 verified by appellant himself in accordance with Section 4, Rule 7 of the Rules of Court, with
proof of payment of the required appeal fee and the posting of a cash or surety bond as provided in Section 6 of this Rule;
shall be accompanied by memorandum of appeal in three (3) legibly typewritten copies 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, resolution or order and a certificate of non-forum shopping with proof of service on the other party of
such appeal. A mere notice of appeal without complying with the other requisites aforestated shall not stop the running of
the period for perfecting an appeal.
b) The appellee may file with the Regional Arbitration Branch or Regional Office where the appeal was filed, his
answer or reply to appellants memorandum of appeal, not later than ten (10) calendar days from receipt thereof.
Failure on the part of the appellee who was properly furnished with a copy of the appeal to file his answer or reply
within the said period may be construed as a waiver on his part to file the same.
c) Subject to the provisions of Article 218, once the appeal is perfected in accordance with these Rules, the
Commission shall limit itself to reviewing and deciding specific issues that were elevated on appeal. (emphasis
supplied)
Further, Sec. 6 of the same Rules 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 cash or surety bond. The appeal bond shall either be in cash or
surety in an amount equivalent to the monetary award, exclusive of damages and attorneys fees.
In case of surety bond, the same shall be issued by a reputable bonding company duly accredited by the Commission or the
Supreme Court, and shall be accompanied by:
a) a joint declaration under oath by the employer, his counsel, and the bonding company, attesting that the bond
posted is genuine, and shall be in effect until final disposition of the case.
b) a copy of the indemnity agreement between the employer-appellant and bonding company; and
c) a copy of security deposit or collateral securing the bond.
9

A certified true copy of the bond shall be furnished by the appellant to the appellee who shall verify the regularity and
genuineness thereof and immediately report to the Commission any irregularity.
Upon verification by the Commission that the bond is irregular or not genuine, the Commission shall cause the immediate
dismissal of the appeal.
No motion to reduce bond shall be entertained except on meritorious grounds and upon the posting of a bond in a
reasonable amount in relation to the monetary award.
The filing of the motion to reduce bond without compliance with the requisites in the preceding paragraph shall not stop the
running of the period to perfect an appeal. (emphasis and underscoring supplied)
Clearly, an appeal from a judgment as that involved in the present case is perfected "only" upon the posting of a cash or
surety bond. Accessories Specialist, Inc. v. Alabanza enlightens:
12

The posting of a bond is indispensable to the perfection of an appeal in cases involving monetary awards from the decision of
the LA. The intention of the lawmakers to make the bond a mandatory 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 plain that the lawmakers intended the posting of a cash or surety bond
by the employer to be the essential and exclusive means by which an employer's appeal may be perfected. The word "may"
refers to the perfection of an appeal as optional on the part of the defeated party, but not to the compulsory posting of an
appeal bond, if he desires to appeal. The meaning and the intention of the legislature in enacting a statute must be
determined from the language employed; and where there is no ambiguity in the words used, then there is no room for
construction.1avvphi1
The filing of the bond is not only mandatory but also a jurisdictional requirement that must be complied with in order to
confer jurisdiction upon the NLRC. Non-compliance therewith renders the decision of the LA final and executory. This
requirement is intended to assure the workers that if they prevail in the case, they will receive the money judgment in their
favor upon the dismissal of the employer's appeal. It is intended to discourage employers from using an appeal to delay or
evade their obligation to satisfy their employees' just and lawful claims. (citations omitted, italics in the original; emphasis
and underscoring supplied)
"Cash," means a sum of money; cash bail (the sense in which the term "cash bond" is used) is a sum of money posted by a
criminal defendant to ensure his presence in court, used in place of a surety bond and real estate.
13

In the present case, the Deed of Assignment, as well as the passbook, which petitioner submitted to the NLRC is neither a
cash nor a surety bond. Petitioners appeal to the NLRC was thus not duly perfected, thereby rendering the Labor Arbiters
Decision final and executory.
WHEREFORE, the petition is DENIED.
SO ORDERED.