G.R. No. 180147, January 14, 2015 - SARA LEE PHILIPPINES, INC., Petitioner, v. EMILINDA D.

MACATLANG, ET AL.,1 Respondents.; G.R. NO. 180148 - ARIS PHILIPPINES, INC., Petitioner, v.
EMILINDA D. MACATLANG, ET AL., Respondents.; G.R. NO. 180149 - SARA LEE CORPORATION,
Petitioner, v. EMILINDA D. MACATLANG, ET AL., Respondents.; G.R. NO. 180150 - CESAR C. CRUZ,
Petitioner, v. EMILINDA D. MACATLANG, ET AL., Respondents.; G.R. NO. 180319 - FASHION
ACCESSORIES PHILS., INC., Petitioner, v. EMILINDA D. MACATLANG, ET AL., Respondents.; G.R. NO.
180685 - EMILINDA D. MACATLANG, ET AL., Petitioners, v. NLRC, ARIS PHILIPPINES, INC., FASHION
ACCESSORIES PHILS., INC., SARA LEE CORPORATION, SARA LEE PHILIPPINES, INC., COLLIN BEAL
AND ATTY. CESAR C. CRUZ, Respondents.

SPECIAL SECOND DIVISION

G.R. No. 180147, January 14, 2015
SARA LEE PHILIPPINES, INC., Petitioner, v. EMILINDA D. MACATLANG, ET AL.,1Respondents.
[G.R. NO. 180148]
ARIS PHILIPPINES, INC., Petitioner, v. EMILINDA D. MACATLANG, ET AL., Respondents.
[G.R. NO. 180149]
SARA LEE CORPORATION, Petitioner, v. EMILINDA D. MACATLANG, ET AL., Respondents.
[G.R. NO. 180150]
CESAR C. CRUZ, Petitioner, v. EMILINDA D. MACATLANG, ET AL., Respondents.
[G.R. NO. 180319]
FASHION ACCESSORIES PHILS., INC., Petitioner, v. EMILINDA D. MACATLANG, ET
AL.,Respondents.
[G.R. NO. 180685]
EMILINDA D. MACATLANG, ET AL., Petitioners, v. NLRC, ARIS PHILIPPINES, INC., FASHION
ACCESSORIES PHILS., INC., SARA LEE CORPORATION, SARA LEE PHILIPPINES, INC.,
COLLIN BEAL AND ATTY. CESAR C. CRUZ, Respondents.
RESOLUTION
PEREZ, J.:
This treats of the 1) Motion for Reconsideration with Urgent Petition for the Courts Approval of the
Pending Motion for Leave of Court to File and Admit Herein Statement and Confession of Judgment
to Buy Peace and/or Secure against any Possible Contingent Liability by Sara Lee Corporation
filed by Sara Lee Philippines Inc. (SLPI), Aris Philippines Inc. (Aris), Sara Lee Corporation (SLC) and
Cesar C. Cruz, 2) Motion for Reconsideration filed by Fashion Accessories Phils. Inc. (FAPI), and 3)
Manifestation of Conformity to the Motion for Leave of Court to File and Admit Confession of

Judgment to Buy Peace and/or to Secure against any Possible Contingent Liability by Petitioner
SLC.
In the Decision dated 4 June 2014, this Court directed SLPI, Aris, SLC, Cesar Cruz, and FAPI,
collectively known as the Corporations, to post P725 Million, in cash or surety bond, within 10 days
from the receipt of the Decision. The Court further nullified the Resolution of the National Labor
Relations Commission (NLRC) dated 19 December 2006 for being premature.
The Motion for Reconsideration is anchored on the following grounds:

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A. The Court failed to consider the Motion for Leave of Court to file and Admit Herein Statement
and Confession of Judgment to Buy Peace and/or to Secure Against any Possible Contingent Liability
by Petitioner Sara Lee Corporation (hereafter the compromise agreement) filed by petitioner Sara
Lee Corporation on June 23, 2014 before receipt of the Decision of June 04, 2014 on July 31, 2014
with the conformity of the respondents in their Manifestation and Conformity to the Petitioners
Motion for Leave to File and Admit Statement of Confession of Judgment dated July 04, 2014 which
could have terminated the present cases and avoid delays with its remand for further proceedings
below.
B. The Court did not duly rule on the violations of the rights of due process of Petitioner SLPI as
shown by the following:
1. The Labor Arbiter has never acquired jurisdiction over Petitioner SLPI which was never impleaded
as a party respondent and was never validly served with summons which fact was specifically
mentioned in NLRCs Resolution of December 19, 2006; and
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2. There is no employer-employee relationships between Petitioner SLPI and the respondents.

C. The Court did not duly rule on the violations of the rights of due process of Petitioner SLC
because of the following:
1. The Labor Arbiter has never acquired jurisdiction over Petitioner SLC which was never impleaded
as a party respondent and was never validly served with summons which fact was specifically raised
by the Court as an issue in page 12 of the Decision of June 04, 2014 but remained unresolved; and
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2. There is no employer-employee relationship between Petitioner SLC and the respondents.

D. The Court did not duly rule on the violations of the rights of due process of Petitioner Cesar C.
Cruz as shown by the following:
1. The Labor Arbiter has never acquired jurisdiction over Petitioner Cesar C. Cruz who was never
impleaded as a party respondent and was never validly served with summons; and
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2. There is no employer-employee relationship between petitioner Cesar C. Cruz and the

respondents.
E. There was no legal impediment for the NLRC to issue its Resolution of December 19, 2006
vacating the Labor Arbiters Decision and remanding the case to the Labor Arbiter for further
proceeding as no Temporary Restraining Order (TRO) or Writ of Preliminary Injunction was issued by
the Court of Appeals and the rule on judicial courtesy remains the exception rather than the rule.
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F. The Court did not duly rule on the applicability of the final and executory Decision of Fullido, et
al., v. Aris Philippines, Inc. and Cesar C. Cruz (G.R. No. 185948) with respect to the present
consolidated cases considering the identical facts and issues involved plus the fact that the Court in
Fullido sustained the findings and decisions of three (3) other tribunals, i.e., the Court of Appeals,
the NLRC and the Labor Arbiter.
G. The Court failed to consider the prescription of the complaints for money claims filed by the
respondents against the Petitioners under Article 291 of the Labor Code due to the lapse of three
(3) years and four (4) months when Petitioners were impleaded as respondents only through the
amendment of complaints by the complainants, the respondents herein.
H. The Court also did not consider that the Complaints filed by the respondents are barred by res
judicata because of the final and executory decision rendered by the Voluntary Arbitrator on the
identical facts and issues in the case filed by the labor union representing the respondents against
Petitioner API.
I. Contrary to the Decision of June 04, 2014, the Abelardo petition (CA GR SP No. 95919, Pacita S.

Abelardo v. NLRC, Aris, Philippines, Inc.) was filed earlier than the Macatlang petition (CA GR SP No.
96363) as shown by the lower docket number, thus, the Macatlang petition should be the one
dismissed for forum shopping.
J. In fixing the bond to PhP725 Million which is 25% of the monetary award, the Court failed to
consider the En Banc Decision in McBurnie v. Ganzon, 707 SCRA 646, 693 (2013) which required
only the posting of a bond equivalent to ten percent (10%) of the monetary award. 2
We briefly revisit the factual milieu of this case.
Aris permanently ceased operations on 9 October 1995 displacing 5,984 rank-and-file employees.
On 26 October 1995, FAPI was incorporated prompting former Aris employees to file a case for
illegal dismissal on the allegations that FAPI was a continuing business of Aris. SLC, SLP and Cesar
Cruz were impleaded as defendants being major stockholders of FAPI and officers of Aris,
respectively.
On 30 October 2004, the Labor Arbiter found the dismissal of 5,984 Aris employees illegal and
awarded them monetary benefits amounting to P3,453,664,710.86. The judgment award is
composed of separation pay of one month for every year of service, backwages, moral and
exemplary damages and attorneys fees.
The Corporations filed a Notice of Appeal with Motion to Reduce Appeal Bond. They posted a P4.5
Million bond. The NLRC granted the reduction of the appeal bond and ordered the Corporations to
post an additional P4.5 Million bond.
The 5,984 former Aris employees, represented by Emilinda Macatlang (Macatlang petition), filed a
petition for review before the Court of Appeals insisting that the appeal was not perfected due to
failure of the Corporations to post the correct amount of the bond which is equivalent to the
judgment award.
While the case was pending before the appellate court, the NLRC prematurely issued an order
setting aside the decision of the Labor Arbiter for being procedurally infirmed.
The Court of Appeals, on 26 March 2007, ordered the Corporations to post an additional appeal
bond of P1 Billion.
In our Decision dated 4 June 2014, we modified the Court of Appeals Decision, to wit:

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WHEREFORE, the Decision of the Court of Appeals in CA-G.R. SP No. 96363 dated 26 March 2007 is
MODIFIED. The Corporations are directed to post P725 Million, in cash or surety bond, within TEN
(10) days from the receipt of this DECISION. The Resolution of the NLRC dated 19 December 2006
is VACATED for being premature and the NLRC is DIRECTED to act with dispatch to resolve the
merits of the case upon perfection of the appeal.3
We also resolved the procedural issue of forum-shopping by holding that the 411 petitioners of the
Pacita Abelardo petition (Abelardo petition) are not representative of the interest of all petitioners in
Macatlang petition. The number is barely sufficient to comprise the majority of petitioners in
Macatlang petition and it would be the height of injustice to dismiss the Macatlang petition which
evidently enjoys the support of an overwhelming majority due to the mistake committed by
petitioners in the Abelardo petition.
The Motion for Reconsideration has no merit.
The Corporations score this Court for failing to consider the ruling in McBurnie v. Ganzon4 which
purportedly required only the posting of a bond equivalent to 10% of the monetary award.
The Corporations gravely misappreciated the ruling in McBurnie. The 10% requirement pertains to
the reasonable amount which the NLRC would accept as the minimum of the bond that should
accompany the motion to reduce bond in order to suspend the period to perfect an appeal under the
NLRC rules. The 10% is based on the judgment award and should in no case be construed as the
minimum amount of bond to be posted in order to perfect appeal. There is no room for a different
interpretation whenMcBurnie made it clear that the percentage of bond set is provisional, thus:
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The foregoing shall not be misconstrued to unduly hinder the NLRCs exercise of its discretion, given
that the percentage of bond that is set by this guideline shall be merely provisional. The NLRC
retains its authority and duty to resolve the motion and determine the final amount of bond that
shall be posted by the appellant, still in accordance with the standards of "meritorious grounds" and
"reasonable amount." Should the NLRC, after considering the motions merit, determine that a
greater amount or the full amount of the bond needs to be posted by the appellant, then the party
shall comply accordingly. The appellant shall be given a period of 10 days from notice of the NLRC
order within which to perfect the appeal by posting the required appeal bond.
The Corporations argue that there was no legal impediment for the NRLC to issue its 19 December
2006 Resolution vacating the Labor Arbiters Decision as no TRO or injunction was issued by the
Court of Appeals. The Corporations assert that the rule on judicial courtesy remains the exception
rather than the rule.
We do not agree. In the recent case of Trajano v. Uniwide Sales Warehouse Club,5 this Court gave a
brief discourse on judicial courtesy, which concept was first introduced in Eternal Gardens Memorial
Park Corp. v. Court of Appeals,6 to wit:
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x x x [t]he principle of judicial courtesy to justify the suspension of the proceedings before the lower
court even without an injunctive writ or order from the higher court. In that case, we pronounced
that [d]ue respect for the Supreme Court and practical and ethical considerations should have
prompted the appellate court to wait for the final determination of the petition [for certiorari] before
taking cognizance of the case and trying to render moot exactly what was before this [C]ourt. We
subsequently reiterated the concept of judicial courtesy in Joy Mart Consolidated Corp. v. Court of
Appeals.
We, however, have qualified and limited the application of judicial courtesy in Go v.
Abrogar and Republic v. Sandiganbayan. In these cases, we expressly delimited the application of
judicial courtesy to maintain the efficacy of Section 7, Rule 65 of the Rules of Court, and held that
the principle of judicial courtesy applies only if there is a strong probability that the issues before
the higher court would be rendered moot and moribund as a result of the continuation of the
proceedings in the lower court. Through these cases, we clarified that the principle of judicial
courtesy remains to be the exception rather than the rule. 7
The Corporations argument is specious. Judicial courtesy indeed applies if there is a strong
probability that the issues before the higher court would be rendered moot as a result of the
continuation of the proceedings in the lower court. This is the exception contemplated in the
aforesaid ruling and it obtains in this case. The 19 December 2006 ruling of the NLRC would moot
the appeal filed before the higher courts because the issue involves the appeal bond which is an
indispensable requirement to the perfection of the appeal before the NLRC. Unless this issue is
resolved, the NLRC should be precluded from ruling on the merits on the case. This is the essence
of judicial courtesy.
The other grounds raised by the Corporations in this Motion for Reconsideration such as the denial
of due process due to invalid service of summons on SLPI, SLC and Cesar Cruz; prescription, res
judicata, and the applicability of the Fulido case8 with the instant case were all raised and resolved
by the Labor Arbiter in favor of former Aris employees in its Decision dated 30 October 2004. That
same decision was appealed by the Corporations before the NLRC. The perfection of said appeal
through the posting of a partial bond was put into question and that is precisely the main issue
brought before the appellate court and before us.
By urging this Court to make a definitive ruling on these issues petitioners would have us rule on
the merits, which at this point this Court cannot do as the labor proceedings remain incomplete. If
at all, the stage that has been passed is the proceedings before the Labor Arbiter. And, without the
NLRC stage, the Labor Arbiters decision is final and executory. It is obvious that petitioners do not
want either of the two options now open to them: a) allow the finality of the adverse judgment in
the amount of P3,453,664,710.86, or b) file the P750 Million bond for the review by the NLRC of the
P3,453,664,710.86 decision of the Labor Arbiter. They would want their liability finally reduced to
just half of the amount of the required appeal bond, or P350 million. The injustice to the employees
is patent.
Now we proceed to tackle the Motion filed by the parties to Admit Confession of Judgment.

The Corporations entered into a compromise with some of the former Aris employees which they
designate as Confession of Judgment. The Corporations reason that a resort to judgment by
confession is the acceptable alternative to a compromise agreement because of the impossibility to
obtain the consent to a compromise of all the 5,984 complainants.
A confession of judgment is an acknowledgment that a debt is justly due and cuts off all defenses
and right of appeal. It is used as a shortcut to a judgment in a case where the defendant concedes
liability. It is seen as the written authority of the debtor and a direction for entry of judgment
against the debtor.9
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The Corporations cite the case of Republic of the Philippines v. Bisaya Land Transportation Co. 10 to
outline the distinction between a compromise agreement/judgment on consent and a confession of
judgment/judgment by confession, thus:
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x x x a motion for judgment on consent is not to be equated with a judgment by confession. The
former is one the provisions and terms of which are settled and a agreed upon by the parties to the
action, and which is entered in the record by the consent and sanction of the court, Hence, there
must be an unqualified agreement among the parties to be bound by the judgment on consent
before said judgment may be entered. The court does not have the power to supply terms,
provisions, or essential details not previously agreed to by the parties x x x. On the other hand, a
judgment by confession is not a plea but an affirmative and voluntary act of the defendant himself.
Here, the court exercises a certain amount of supervision over the entry of judgment, as well as
equitable jurisdiction over their subsequent status. 11
In the same breadth, the Corporations also acknowledge that a compromise agreement and a
judgment by confession stand upon the same footing in that both may not be executed by counsel
without knowledge and authority of the client. If we were to rely on the Corporations submission
that all 5,984 complainants SPAs could not be obtained, then the Confession of Judgment is void.
Even if we dismiss the Corporations choice of designation as pure semantics and consider the
agreement they entered into with the complainants as a form of a compromise agreement, we still
could not approve the same.
We elucidate.
A compromise is a contract whereby the parties, by making reciprocal concessions, avoid a litigation
or put an end to one already commenced. It is an agreement between two or more persons, who,
for preventing or putting an end to a lawsuit, adjust their difficulties by mutual consent in the
manner which they agree on, and which everyone of them prefers to the hope of gaining, balanced
by the danger of losing.12
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A compromise must not be contrary to law, morals, good customs and public policy; and must have
been freely and intelligently executed by and between the parties. 13
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Article 227 of the Labor Code of the Philippines authorizes compromise agreements voluntarily
agreed upon by the parties, in conformity with the basic policy of the State to promote and
emphasize the primacy of free collective bargaining and negotiations, including voluntary
arbitration, mediation and conciliation, as modes of settling labor or industrial disputes.14 The
provision reads:
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ART. 227 Compromise Agreements. Any compromise settlement, including those involving labor
standard laws, voluntarily agreed upon by the parties with the assistance of the Bureau or the
regional office of the Department of Labor, shall be final and binding upon the parties. The National
Labor Relations Commission or any court shall not assume jurisdiction over issues involved therein
except in case of noncompliance thereof or if there is prima facie evidence that the settlement was
obtained through fraud, misrepresentation, or coercion.
A compromise agreement is valid as long as the consideration is reasonable and the employee
signed the waiver voluntarily, with a full understanding of what he was entering into.15
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The compromise agreement which the Corporations deem as Confession of Judgment is reproduced
in full below:
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CONFESSION OF JUDGMENT
The undersigned counsel, by virtue of the special authority granted by HILLSHIRE earlier attached
as Annex B and made an integral part hereof seeks the approval of this Honorable Court of this
Judgment by Confession under the following terms and conditions, to wit:
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1. HILLSHIRE will pay to the 5,984 respondents (complainants) the total amount of THREE
HUNDRED FORTY TWO MILLION TWO HUNDRED EIGHTY-FOUR THOUSAND AND EIGHT HUNDRED
PESOS (PhP342,284,800.00) or at FIFTY SEVEN THOUSAND TWO HUNDRED PESOS
(PhP57,200.00) for each respondent (complainant) inclusive of the attorneys fees of EIGHT
THOUSAND FIVE HUNDRED EIGHTY PESOS (PhP8,580.00) which each respondent (complainant) will
actually pay to their counsel of record as the total consideration for the dismissal with prejudice of
all the pending cases before this Honorable Court and all the cases pending before the National
Labor Relations Commission against all the petitioners.
2. The above agreed amount of THREE HUNDRED FORTY TWO MILLION TWO HUNDRED EIGHTYFOUR THOUSAND AND EIGHT HUNDRED PESOS (PhP342,284,800.00) shall be distributed as
follows:
2.1 FORTY EIGHT THOUSAND SIX [HUNDRED] TWENTY PESOS (PhP48,620.00) to each respondent
(complainant), and
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2.2 EIGHT THOUSAND FIVE HUNDRED EIGHTY PESOS (PhP8,580.00) to the lawyer of each
respondent (complainant) by virtue of the Special Power of Attorney given by each respondent
(complainant) to lead Emilinda D. Macatlang who gave SPA to Atty. Alex Tan.
3. HILLSHIRE will deposit the amount of THREE HUNDRED FORTY TWO MILLION TWO HUNDRED
EIGHTY-FOUR THOUSAND AND EIGHT HUNDRED PESOS (PhP342,284,800.00) with a local bank
duly licensed by the Bangko Sentral ng Pilipinas (BSP) within sixty (60) days from the date of the
issuance of a Certificate of Finality and/or Entry of Judgment of the Decision of this Honorable Court
on this Confession of Judgment.
4. The amount of FORTY EIGHT THOUSAND SIX HUNDRED TWENTY PESOS (PhP48,620.00) shall be
paid directly to each respondent (complainant) and the corresponding attorneys fees of EIGHT
THOUSAND FIVE HUNDRED EIGHTY PESOS (PhP8,580.00) shall be paid to their lawyers (duly
authorized by an SPA) by the bank through a managers check.
5. The total deposit of THREE HUNDRED FORTY TWO MILLION TWO HUNDRED EIGHTY FOUR
THOUSAND EIGHT HUNDRED PESOS (PhP342,284,800.00) must be claimed by the respondents
(complainants) from the depository bank within two (2) years from the date of the Certificate of
Finality or Entry of Judgment issued by this Honorable Court.
6. Any balance of the deposited amount which remains unclaimed by the respondents
(complainants) within the two (2) year period referred to above shall automatically revert and be
returned to and may be withdrawn by HILLSHIRE and/or its attorney-in-fact, without the necessity
of any prior Order or permission from this Honorable Court.
7. Thereafter, upon expiration of the two (2) year period referred to above, HILLSHIREs obligation
to make any payment to the respondents (Complainants) shall ipso facto cease, expire and
terminate and the judgment by confession shall be considered satisfied, fulfilled and terminated.
8. The bank to which the amount of the confessed judgment (PhP342,284,800.00) is deposited shall
be authorized by HILLSHIRE through the undersigned attorney to pay to individual respondents
(complainants) listed in the original Decision dated October 30, 2004 of the Labor Arbiter and/or
their lawyers the above agreed amounts subject to the following conditions:
8.1 Complainants shall personally claim the payment to them from the bank upon presentation of
any recognized government IDs such as Drivers License, Senior Citizens Card, Voters ID, SSS ID,
Unified Multipurpose Identification Card, Postal ID, Passport, or Certification Under Oath by the
Barangay Chairman as to the identity of the respondent (complainant), or
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8.2 By the duly authorized representative of respondent (complainant) evidenced by a duly

notarized Special Power of Attorney in case the respondent (complainant) cannot personally claim
his/her payment due to sickness or physical disability.
9. The lead complainant, Ms. Emilinda D. Macatlang, and Atty. Alex Tan shall take adequate steps to
inform all the respondents (complainants) by personal notice or media announcement of this
confession of judgment upon receipt of the Decision of this Honorable Court.
10. All fully paid respondents (complainants) shall execute a Waiver, Release and Quitclaim.
11. Upon the approval of this Confession of Judgment by this Honorable Court, all cases pending
before this Honorable Court and the NLRC shall automatically be considered dismissed, terminated
and of no force and effect.
Petitioners invite the attention of this Honorable Court that the above monetary consideration for
both the respondents (complainants) and their counsel under the above terms and conditions have
been agreed upon with Atty. Alex Tan before the filing of this confession of judgment.
To reiterate, this confession of judgment is made by HILLSHIRE for the purpose of buying peace
and/or to secure to the said petitioner and the other Petitioners against any possible contingent
liability which may accrue to them as a consequence of their having been made Respondents in the
Complaints filed by the Complainants before the NLRC. 16
A review of the compromise agreement shows a gross disparity between the amount offered by the
Corporations compared to the judgment award. The judgment award is P3,453,664,710.86 or each
employee is slated to receive P577,149.85. On the other hand, the P342,284,800.00 compromise is
to be distributed among 5,984 employees which would translate to only P57,200.00 per employee.
From this amount, P8,580.00 as attorneys fees will be deducted, leaving each employee with a
measly P48,620.00. In fact, the compromised amount roughly comprises only 10% of the judgment
award.
In our Decision, the appeal bond was set at P725 Million after taking into consideration the interests
of all parties. To reiterate, the underlying purpose of the appeal bond is to ensure that the
employer has properties on which he or she can execute upon in the event of a final, providential
award. Thus, non-payment or woefully insufficient payment of the appeal bond by the employer
frustrates these ends.17 As a matter of fact, the appeal bond is valid and effective from the date of
posting until the case is terminated or the award is satisfied.18 Our Decision highlights the
importance of an appeal bond such that said amount should be the base amount for negotiation
between the parties. As it is, the P342,284,800.00 compromise is still measly compared to the
P725 Million bond we set in this case, as it only accounts to approximately 50% of the reduced
appeal bond.
In Arellano v. Powertech Corporation,19 we voided the P150,000.00 compromise for the P2.5 Million
judgment on appeal to the NLRC. We note that the compromise is a mere 6% of the contingent sum
that may be received by petitioners and the minuscule amount is certainly questionable because it
does not represent a true and fair amount which a reasonable agent may bargain for his
principal.20
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In Mindoro Lumber and Hardware v. Bacay,21 we found that the private respondents individual
claims, ranging from P6,744.20 to P242,626.90, are grossly disproportionate to what each of them
actually received under the Sama-samang Salaysay sa Pag-uurong ng Sakdal. The amount of the
settlement is indubitably unconscionable; hence, ineffective to bar the workers from claiming the
full measure of their legal rights.22
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The complainants filed a motion for reconsideration asking this Court to modify its Decision on the
ground that the parties have entered into a compromise agreement. The complainants justified
their acquiescence to the compromise on the possibility that it will take another decade before the
case may be resolved and attained finality. We beg to disagree.
In our Decision, we have already directed the NLRC to act with dispatch in resolving the merits of
the case upon receipt of the cash or surety bond in the amount of P725 Million within 10 days from
receipt of the Decision. If indeed the parties want an immediate and expeditious resolution of the
case, then the NLRC should be unhindered with technicalities to dispose of the case.

Accepting an outrageously low amount of consideration as compromise defeats the complainants

legitimate claim.
In Unicane Workers Union-CLUP v. NLRC,23 we held the P100,000.00 amount in the quitclaim is
unconscionable because the complainants had been awarded by the labor arbiter more than P2
million. It should have been aware that had petitioners pursued their case, they would have been
assured of getting said amount, since, absent a perfected appeal, complainants were already
entitled to said amount by virtue of a final judgment. We proceeded to state that:
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Not all quitclaims are per se invalid as against public policy. But, where there is clear proof that the
waiver was wrangled from an unsuspecting or gullible person, or the terms of settlement are
unconscionable on its face, then the law will step in to annul the questionable transaction. 24
In fine, we will not hesitate to strike down a compromise agreement which is unconscionable and
against public policy.
WHEREFORE, the Court DENIES petitioners' Motion for Reconsideration and Motion for Leave of
Court to File and Admit Herein Statement and Confession of Judgment; and the respondents Partial
Motion for Reconsideration for their lack of merit. The directive in the Decision dated 4 June 2014
to the National Labor Relations Commission to act with dispatch to resolve the merits of the case
upon perfection of the appeal is hereby REITERATED.
SO ORDERED.
Carpio, (Chairperson), Velasco, Jr.,* Del Castillo, and Perlas-Bernabe, JJ., concur.

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G.R. No. 197556, March 25, 2015 - WATERFRONT CEBU CITY CASINO HOTEL, INC. AND MARCO
PROTACIO, Petitioners, v. ILDEBRANDO LEDESMA, Respondent.

THIRD DIVISION
G.R. No. 197556, March 25, 2015
WATERFRONT CEBU CITY CASINO HOTEL, INC. AND MARCO
PROTACIO, Petitioners, v.ILDEBRANDO LEDESMA, Respondent.
DECISION
VILLARAMA, JR., J.:
This is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as
amended, seeking to set aside the Decision1 dated March 17, 2011 and Resolution2 dated June 21,
2011 of the Court of Appeals (CA) in CA-G.R. CEB SP No. 05071. The CA reversed the
Decision3 dated November 27, 2009 and Resolution4 dated February 22, 2010 of the National Labor
Relations Commission (NLRC) and reinstated the Decision 5 dated April 29, 2009 of the Labor Arbiter
(LA). The LA declared that respondent Ildebrando Ledesma was illegally dismissed from his
employment by petitioner Waterfront Cebu City Casino Hotel, Inc. (Waterfront).

The factual antecedents follow:

Respondent was employed as a House Detective at Waterfront located at Salinas Drive, Cebu City.
On the basis of the complaints filed before Waterfront by Christe6 Mandal, a supplier of a
concessionaire of Waterfront, and Rosanna Lofranco, who was seeking a job at the same hotel,
Ledesma was dismissed from employment.7 From the affidavits8 and testimonies9 of Christe Mandal
and Rosanna Lofranco during the administrative hearings conducted by Waterfront, the latter found,
among others, that Ledesma kissed and mashed the breasts of Christe Mandal inside the hotels
elevator, and exhibited his penis and asked Rosanna Lofranco to masturbate him at the conference
room of the hotel.
On August 12, 2008, Ledesma filed a complaint10 for illegal dismissal which was docketed as NLRC
RAB-VII Case No. 08-1887-08. The LA found that the allegations leveled against Ledesma are mere
concoctions, and concluded that Ledesma was illegally dismissed. The dispositive portion of the
April 29, 2009 Decision of the LA, reads:
WHEREFORE, in view of the foregoing, a decision is hereby rendered declaring the suspension as
well as the dismissal of herein complainant illegal. Consequently, respondent Waterfront Cebu City
Hotel is ordered to reinstate complainant Ildebrando Ledesma to his former position without loss of
seniority right and with full backwages reckoned from the date of the suspension up to actual
reinstatement.
Herein respondent is likewise ordered to pay complainant Ledesma service incentive leave pay in
the amount of THREE THOUSAND NINE HUNDRED TEN PESOS AND FIFTY CENTAVOS (P3,910.50)
plus ten percent (10%) of the total monetary award as attorneys fees.
All other claims are DISMISSED for lack of merit.
SO ORDERED.11
On appeal to the NLRC, the latter reversed the ruling of the LA and held that Ledesmas acts of
sexual overtures to Christe Mandal and Rosanna Lofranco constituted grave misconduct justifying
his dismissal from employment. The fallo of the November 27, 2009 Decision of the NLRC reads:
WHEREFORE, premises considered, the appealed Decision is hereby REVERSED and SET ASIDE.
Another one is entered declaring the dismissal of complainant as valid.
SO ORDERED.12
The NLRC denied Ledesmas motion for reconsideration in a Resolution dated February 22, 2010. A
copy of the said Resolution was received by Atty. Gines Abellana (Atty. Abellana), Ledesmas
counsel of record, on March 15, 2010.13
On May 17, 2010,14 or sixty-three (63) days after Atty. Abellana received a copy of the NLRCs
Resolution denying the motion for reconsideration, said counsel filed before the CA a petition for
certiorari under Rule 65 of the Rules of Court.
In its Comment,15 Waterfront prayed for the outright dismissal of the petition on the ground that it
was belatedly filed.
On August 5, 2010, Ledesma, now assisted by a new counsel, filed a motion for leave to file
amended petition,16 and sought the admission of his Amended Petition for Certiorari. 17 In the
amended petition, Ledesma contended that his receipt on March 24, 2010 (and not the receipt on
March 15, 2010 by Atty. Abellana), is the reckoning date of the 60-day reglementary period within
which to file the petition. Hence, Ledesma claims that the petition was timely filed on May 17,
2010.18
By its Resolution19 dated August 27, 2010, the CA granted leave of court to Ledesma and admitted
his amended petition for certiorari. The CA, thereafter, rendered a Decision dated March 17, 2011,
reversing the Decision of the NLRC and reinstating the ruling of the LA. The fallo of the assailed CA
Decision reads:

IN LIGHT OF ALL THE FOREGOING, this petition is GRANTED. The 27 November 2009 NLRC
Decision and 22 February 2010 Resolution in NLRC Case No. VAC-09-000912-2009
is REVERSED and SET ASIDE and the 29 April 2009 Decision of the Labor Arbiter is
hereby REINSTATED.
No pronouncement as to costs.
SO ORDERED.20
The CA denied the motion for reconsideration filed by Waterfront in a Resolution dated June 21,
2011. Thus, the present petition for review on certiorari where Waterfront raised the main issue of
whether the petition for certiorari was timely filed with the CA.21
In his Comment,22 Ledesma sought the dismissal of the instant petition of Waterfront on the basis of
the following formal infirmities: (1) the presentation of Gaye Maureen Cenabre, the representative
of Waterfront, of a Community Tax Certificate before the Notary Public to prove her identity, violated
A.M. No. 02-8-13-SC, and rendered the jurat in the verification and certification on non-forum
shopping of the petition as defective; and (2) no certified true copy of the August 10, 2011 Board
Resolution quoted in the Secretarys Certificate was attached to the petition.
The Court finds Waterfronts petition to be meritorious.
The procedural infirmities23 pointed out by Ledesma are not adequate to cause the dismissal of the
present petition. Gaye Maureen Cenabre presented to the Notary Public a Community Tax Certificate
numbered 27401128 to prove her identity instead of a current identification document issued by an
official agency bearing her photograph and signature as required by A.M. No. 02-8-13-SC. This
rendered the jurat in the verification/certification of non-forum shopping of Waterfront as defective.
Nonetheless, any flaw in the verification, being only a formal, not a jurisdictional requirement, is not
a fatal defect.24 In like manner, there is no need to attach the certified true copy of the Board
Resolution quoted in the Secretarys Certificate attached to the petition. Only the judgment, order
or resolution assailed in the petition are the attachments required under Section 4, 25 Rule 45 of the
Rules of Court to be duplicate originals or certified true copies.
On the main issue, the unjustified failure of Ledesma to file his petition for certiorari before the CA
within the 60-day period is a ground for the outright dismissal of said petition.
Section 4, Rule 65 of the Rules of Court, as amended by A.M. No. 07-7-12-SC, reads:
SEC. 4. When and where to file the petition. The petition shall be filed not later than sixty (60)
days from notice of the judgment, order or resolution. In case a motion for reconsideration or new
trial is timely filed, whether such motion is required or not, the petition shall be filed not later than
sixty (60) days counted from the notice of the denial of the motion.
If the petition relates to an act or an omission of a municipal trial court or of a corporation, a board,
an officer or a person, it shall be filed with the Regional Trial Court exercising jurisdiction over the
territorial area as defined by the Supreme Court. It may also be filed with the Court of Appeals or
with the Sandiganbayan, whether or not the same is in aid of the courts appellate jurisdiction. If
the petition involves an act or an omission of a quasi-judicial agency, unless otherwise provided by
law or these rules, the petition shall be filed with and be cognizable only by the Court of Appeals.
In election cases involving an act or an omission of a municipal or a regional trial court, the petition
shall be filed exclusively with the Commission on Elections, in aid of its appellate jurisdiction.
In Laguna Metts Corporation v. Court of Appeals,26 we categorically ruled that the present rule now
mandatorily requires compliance with the reglementary period. The period can no longer be
extended as previously allowed before the amendment, thus:
As a rule, an amendment by the deletion of certain words or phrases indicates an intention to
change its meaning. It is presumed that the deletion would not have been made if there had been
no intention to effect a change in the meaning of the law or rule. The amended law or rule should
accordingly be given a construction different from that previous to its amendment.

If the Court intended to retain the authority of the proper courts to grant extensions under Section
4 of Rule 65, the paragraph providing for such authority would have been preserved. The removal of
the said paragraph under the amendment by A.M. No. 07-7-12-SC of Section 4, Rule 65 simply
meant that there can no longer be any extension of the 60-day period within which to file a petition
for certiorari.
The rationale for the amendments under A.M. No. 07-7-12-SC is essentially to prevent the use (or
abuse) of the petition for certiorari under Rule 65 to delay a case or even defeat the ends of justice.
Deleting the paragraph allowing extensions to file petition on compelling grounds did away with the
filing of such motions. As the Rule now stands, petitions for certiorari must be filed strictly
within 60 days from notice of judgment or from the order denying a motion for
reconsideration.27 (Additional emphasis and underscoring supplied)
In the subsequent case of Domdom v. Third & Fifth Divisions of the Sandiganbayan,28 the absence
of a specific prohibition in Section 4 of Rule 65, as amended, for the extension of the 60-day period
to file a petition for certiorari was construed as a discretionary authority of the courts to grant an
extension.
Republic v. St. Vincent De Paul Colleges, Inc.29 clarified the conflict between the rulings in Laguna
Metts Corporation30 and Domdom,31 in that the former is the general rule while the latter is the
exception, thus:
What seems to be a conflict is actually more apparent than real. A reading of the foregoing rulings
leads to the simple conclusion that Laguna Metts Corporation involves a strict application of the
general rule that petitions for certiorari must be filed strictly within sixty (60) days from
notice of judgment or from the order denying a motion for reconsideration. Domdom, on
the other hand, relaxed the rule and allowed an extension of the sixty (60)-day period
subject to the Courts sound discretion.32 (Emphasis in the original)
In relaxing the rules and allowing an extension, Thenamaris Philippines, Inc. v. Court of
Appeals33reiterated the necessity for the party invoking liberality to advance a reasonable or
meritorious explanation34 for the failure to file the petition for certiorari within the 60-day period.
The petition for certiorari was filed with
the CA beyond the 60-day period
Atty. Abellana, Ledesmas counsel, admittedly received a copy of the NLRC Resolution denying the
Motion for Reconsideration on March 15, 2010 while Ledesma received his copy on March 24,
2010.
Ledesma erroneously asserted in his petition for certiorari filed before the CA, that the 60 th day is
May 15, 2010, counted from March 15, 2010.35 In computing a period, the first day shall be
excluded, and the last included;36 hence, the last day to file his petition for certiorari is on May 14,
2010, a Friday. Ledesma therefore belatedly filed his petition on May 17, 2010.
Realizing his procedural faux pas, Ledesma filed an amended petition where he contended that he
timely filed his petition for certiorari on May 17, 2010 counted from his receipt of the NLRC
Resolution denying his motion for reconsideration on March 24, 2010.37 This stance is bereft of any
legal basis. When a party to a suit appears by counsel, service of every judgment and all orders of
the court must be sent to the counsel. This is so because notice to counsel is an effective notice to
the client, while notice to the client and not his counsel is not notice in law.38 Receipt of notice by
the counsel of record is the reckoning point of the reglementary period.39
The negligence of Atty. Abellana in the computation of the 60-day period, and reckoning such period
from the partys receipt of the assailed NLRC resolution were similar arguments rejected in Labao v.
Flores.40 In the Labao case,41 the respondents maintained that they should not suffer the negligence
of their counsel in the late filing of their petition for certiorari, and the 60-day period be reckoned
from their own notice of the NLRCs denial of their motion for reconsideration. In rejecting said
arguments we ruled as follows:
The general rule is that a client is bound by the acts, even mistakes, of his counsel in the realm of
procedural technique. The exception to this rule is when the negligence of counsel is so gross,

reckless and inexcusable that the client is deprived of his day in court. The failure of a partys
counsel to notify him on time of the adverse judgment, to enable him to appeal therefrom, is
negligence that is not excusable. We have repeatedly held that notice sent to counsel of record is
binding upon the client, and the neglect or failure of counsel to inform him of an adverse judgment
resulting in the loss of his right to appeal is not a ground for setting aside a judgment valid and
regular on its face.42 (Emphasis omitted)
With the expiration of the 60-day period to file a petition for certiorari, a review of the Resolution of
the NLRC will be beyond the jurisdiction of any court.43 No longer assailable, the NLRC Resolution
could not be altered or modified, as previously held in Labao v. Flores:44
The NLRCs resolution became final ten (10) days after counsels receipt, and the respondents
failure to file the petition within the required (60)-day period rendered it impervious to any attack
through a Rule 65 petition for certiorari. Thus, no court can exercise jurisdiction to review the
resolution.
Needless to stress, a decision that has acquired finality becomes immutable and unalterable and
may no longer be modified in any respect, even if the modification is meant to correct erroneous
conclusions of fact or law and whether it will be made by the court that rendered it or by the highest
court of the land. All the issues between the parties are deemed resolved and laid to rest once a
judgment becomes final and executory; execution of the decision proceeds as a matter of right as
vested rights are acquired by the winning party. Just as a losing party has the right to appeal within
the prescribed period, the winning party has the correlative right to enjoy the finality of the decision
on the case. After all, a denial of a petition for being time-barred is tantamount to a decision on the
merits. Otherwise, there will be no end to litigation, and this will set to naught the main role of
courts of justice to assist in the enforcement of the rule of law and the maintenance of peace and
order by settling justiciable controversies with finality.
Ledesma did not attempt to justify
the belated filing of his petition for
certiorari
The relaxation of procedural rules may be allowed only when there are exceptional circumstances to
justify the same.45 There should be an effort on the part of the party invoking liberality to advance
a reasonable or meritorious explanation for his/her failure to comply with the rules. 46 Moreover,
those who seek exemption from the application of a procedural rule have the burden of proving the
existence of exceptionally meritorious reason warranting such departure. 47 In Philippine National
Bank v. Commissioner of Internal Revenue,48 we said:
It is an accepted tenet that rules of procedure must be faithfully followed except only when, for
persuasive and weighting reasons, they may be relaxed to relieve a litigant of an injustice
commensurate with his failure to comply with the prescribed procedure.Concomitant to a liberal
interpretation of the rules of procedure, however, should be an effort on the part of the
party invoking liberality to adequately explain his failure to abide by the rules. (Emphasis
supplied)
Both in his petition and amended petition, Ledesma never invoked the liberality of the CA nor
endeavored to justify the belated filing of his petition. On the contrary, Ledesma remained firm that
his petition was filed with the CA within the reglementary period. 49 Absent valid and compelling
reasons for the procedural lapse, the desired leniency cannot be accorded to Ledesma. 50
In sum, the late filing by Ledesma of his petition for certiorari, and his failure to justify his
procedural lapse to merit a lenient application of the rules divested the CA of jurisdiction to
entertain the petition.51
Assuming for a moment that the petition for certiorari was timely filed with the CA, said recourse
should suffer the same fate of dismissal for lack of merit. Otherwise stated, there is no substantial
justice that may be served here in disregarding the procedural flaw committed by Ledesma because
the NLRC correctly found him guilty of misconduct or improper behavior in committing lascivious
conduct and demanding sexual favors from Christe Mandal and Rosanna Lofranco.
The CA ruled in favor of Ledesma since it believed his version that the complainants merely invented

the accusations against him because Waterfront failed to present as evidence the CCTV footages of
the alleged lascivious conduct of Ledesma inside the elevator and the conference room. But this
argument was not even raised by Ledesma himself and it was only the CA which utilized this as a
justification to bolster its findings that Ledesma did not commit any infraction. This being a labor
case, the evidence required is only substantial evidence which was adequately established here by
the positive and credible testimonies of the complainants.
Notably, Ledesma never refuted, at the administrative investigation level at Waterfront, and even
at the proceedings before the LA, NLRC, and the CA, the allegations leveled against him by Rosanna
Lofranco that, after deluding her to perform a massage on him, Ledesma exhibited to her his penis
and requested that he be masturbated while inside the conference room of the hotel. If not for the
position of Ledesma as a House Detective, he will not have access to the conference room nor will
he know that the premises is not monitored through a closed-circuit television,52 thus giving him the
untrammeled opportunity to accomplish his lewd design on the unsuspecting victim. Such acts of
Ledesma constituted misconduct or improper behavior53 which is a just cause for his dismissal.
WHEREFORE, the petition for review on certiorari is GRANTED. The March 17, 2011 Decision and
June 21, 2011 Resolution of the Court of Appeals in CA-G.R. CEB SP No. 05071
are REVERSED and SET ASIDE. The November 27, 2009 Decision and February 22, 2010
Resolution of the National Labor Relations Commission which found as valid the dismissal from
employment of Ildebrando Ledesma areREINSTATED.
No pronouncement as to costs.
SO ORDERED.
Velasco, Jr., (Chairperson), Peralta, Reyes, and Jardeleza, JJ., concur.

Sy et al., vs. Fairland Knitcraft Co Inc. [GR No. 189658,

December 12, 2011]Facts:
Fairland is a domestic corporation engaged in garments business, while
Susan de Leon (Susan) is the owner/proprietress of Weesan
Garments(Weesan). On the other hand, the complaining workers (the
workers) are sewers, trimmers, helpers, a guard and a secretary who
were hired byWeesan.
On December 23, 2002, workers Marialy O. Sy, Vivencia Penullar,
Aurora Aguinaldo, Gina Aniano, Gemma dela Pea and Efremia Matias
filedwith the Arbitration Branch of the NLRC a Complaint for
underpayment and/or non-payment of wages, overtime pay, premium
pay for holidays,13th month pay and other monetary benefits against
Susan/Weesan. In January 2003, the rest of the aforementioned
workers also filed similarcomplaints. Eventually all the cases were
consolidated as they involved the same causes of action. On February
5, 2003, Weesan filed before the Department of Labor and
Employment-National Capital Region (DOLE-NCR) a report on
itstemporary closure for a period of not less than six months. As the
workers were not anymore allowed to work on that same day, they
filed onFebruary 18, 2003 an Amended Complaint, and on March 13,
2003, another pleading entitled Amended Complaints and Position
Paper forComplainants, to include the charge of illegal dismissal and
impleaded Fairland and its manager, Debbie Manduabas (Debbie), as
additionalrespondents.

Issue:
1.Whether or not the CA erred in finding that petitioner is a labor-only
contractor acting as an agent of respondent fairland
2.Can the Labor Arbiter acquire jurisdiction over the person of
the respondent without the latter being served with summons?
Ruling:
1
.Susan/Weesan is a mere labor-only contractor.
"There is labor-only contracting when the contractor or subcontractor
merely recruits, supplies or places workers toperform a job, work or
service for a principal. In labor-only contracting, the following elements
are present: (a)The person supplying workers to an employer does not
have substantial capital or investment in the form of tools,equipment,
machineries, work premises, among others; andIDESTH (b)The workers
recruited and placed by such person are performing activities which
are directly related to the principalbusiness of the employer."Here,
there is no question that the workers, majority of whom are sewers,
were recruited by Susan/Weesan and that they performed
activitieswhich are directly related to Fairland's principal business of
garments. What must be determined is whether Susan/Weesan has
substantial capitalor investment in the form of tools, equipment,
machineries, work premises, among others.
2. "It is basic that the Labor Arbiter cannot acquire jurisdiction over the
person of the respondent without the latter being served with
summons." However, "if there is no valid service of summons, the
court can still acquire jurisdiction over the person of the defendant by
virtue of the latter'svoluntary appearance."It can be recalled that the
workers' original complaints for non-payment/underpayment of wages
and benefits were only against Susan/Weesan.For these complaints,
the Labor Arbiter issued summons to Susan/Weesan which was
received by the latter on January 15, 2003. The workersthereafter
amended their then already consolidated complaints to include illegal
dismissal as an additional cause of action as well as Fairland
andDebbie as additional respondents. We have, however, scanned the
records but found nothing to indicate that summons with respect to the
saidamended complaints was ever served upon Weesan, Susan, or
Fairland. True to their claim, Fairland and Debbie were indeed never
summoned bythe Labor Arbiter. Viewed in its entirety, we thus declare
that Fairland is the principal of the labor-only contractor, Weesan.
Fairland, therefore, as the principal employer, is solidarily liable with
Susan/Weesan, the labor-only contractor, for the rightful claims of
theemployees. Under this set-up, Susan/Weesan, as the "labor-only"
contractor, is deemed an agent of the principal, Fairland, and the law
makes theprincipal responsible to the employees of the "labor-only"

contractor as if the principal itself directly hired or employed the

employees.