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SECOND DIVISION

G.R. No. 180147 June 4, 2014

SARA LEE PHILIPPINES, INC., Petitioner,


vs.
EMILINDA D. MACATLANG, ET AL.,1 Respondents.

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G.R. No. 180148

ARIS PHILIPPINES, INC., Petitioner,


vs.
EMILINDA D. MACATLANG, ET AL., Respondents.

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G.R. No. 180149

SARA LEE CORPORATION, Petitioner,


vs.
EMILINDA D. MACATLANG, ET AL., Respondents.

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G.R. No. 180150

CESAR C. CRUZ, Petitioner,


vs.
EMILINDA D. MACA TLANG, ET AL., Respondents.
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G.R. No. 180319

FASHION ACCESSORIES PHILS., INC., Petitioner,


vs.
EMILINDA D. MACATLANG, ET AL., Respondents.

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G.R. No. 180685

EMILINDA D. MACA TLANG, ET AL., Petitioners,


vs.
NLRC, ARIS PHILIPPINES, INC., FASHION ACCESSORIES PHILS., INC., SARA LEE
CORPORATION, SARA LEE PHILIPPINES, INC., COLLIN BEAL and ATTY. CESAR C.
CRUZ, Respondents.

DECISION

PEREZ, J.:

The dilemma of the appeal bond in labor cases is epochal, present whenever the amount of
monetary award becomes debatably impedimental to the completion of remedies. Such
instances exaggerate the ambivalence between rigidity and liberality in the application of the
requirement that the bond must be equal to the arbiters award. The rule of reasonableness
in the determination of the compliant amount of the bond has been formulated to allow the
review of the arbiters award. However, that rule seemingly becomes inadequate when the
award staggers belief but is, nonetheless, supported by the premises of the controversy. The
enormity of the award cannot prevent the settlement of the dispute. The amount of award
may vary case-to-case. But the law remains constant.

Before us are six (6) consolidated petitions for review on certiorari pertaining to the
P3,453,664,710.66 (P3.45 Billion) appeal bond, which, as mandated by Article 233 of the
Labor Code, is equivalent to the monetary award adjudged by the labor arbiter in the cases.
The first 5 petitions seek a relaxation of the rule while the last petition urges its strict
interpretation.
Petitioners in G.R. Nos. 180147,180148, 180149,180150, and 180319 are Sara Lee
Philippines, Inc. (SLPI), Aris Philippines, Inc. (Aris), Sara Lee Corporation (SLC), Atty. Cesar
Cruz (Cruz), and Fashion Accessories Philippines, Inc. (FAPI), respectively and shall be
collectively referred to as the "Corporations."

SLPI is a domestic corporation engaged in the manufacture and distribution of personal care
products and is a subsidiary of SLC.

Aris is a domestic corporation engaged in the business of producing gloves and other
apparel.2

FAPI is a corporation engaged in the manufacture of knitted products.3

SLC, a corporation duly organized and existing under the laws of the United States of
America, is a stockholder of Aris. It exercised control over Aris, FAPI, and SLPI which were
all its subsidiaries or affiliates.4

Cruz was the external counsel of Aris at the time of its closure. When Aris filed for its
dissolution, Cruz became the Vice-President and Director of Aris.5

The petition docketed as G.R. No. 180685 is filed by Emilinda D. Macatlang and 5,983 other
former employees of Aris. Emilinda D. Macatlang allegedly represents the employees whose
employment was terminated upon the closure of Aris.

I.

This controversy stemmed from a Notice of Permanent Closure filed by Aris on 4 September
1995 with the Department of Labor and Employment stating that it will permanently cease its
operations effective 9 October 1995. All employees of Aris were duly informed.

Aris Philippines Workers Confederation of Filipino Workers (Union), which represents 5,9846
rank-and-file employees of Aris, staged a strike for violation of duty to bargain collectively,7
union busting and illegal closure.8

After conciliation, the parties entered into an agreement whereby Aris undertook to pay its
employees the benefits which accrued by virtue of the companys closure, which settlement
amounted to P419 Million9 and an additional P15 Million10 Benevolent Fund to the Union.
On 26 October 1995, FAPI was incorporated.11 When said incorporation came to the
knowledge of the affected employees, they all filed 63 separate complaints against Aris for
illegal dismissal. The complaints were consolidated before the labor arbiter. Later
amendments to the complaint included as respondents SLC, SLP, FAPI and Cruz, and
Emilinda D. Macatlang, et al.,is captioned as the complainant, represented in the suit by
Emilinda D. Macatlang. The complaints alleged that FAPI is engaged in the manufacture and
exportation of the same articles manufactured by Aris; that there was a mass transfer of Aris
equipment and employees to FAPIs plant in Muntinlupa, Rizal; that contractors of Aris
continued as contractors of FAPI; and that the export quota of Aris was transferred to
FAPI.12 Essentially, the complainants insisted that FAPI was organized by the management
of Aris to continue the same business of Aris, thereby intending to defeat their right to
security of tenure. They likewise impleaded in their subsequent pleadings that SLC and SLP
are the major stockholders of FAPI, and Cruz as Vice-President and Director of Aris.

Aris countered that it had complied with all the legal requirements for a valid closure of
business operations; that it is not, in any way, connected with FAPI, which is a separate and
distinct corporation; that the contracts of Aris with its contractors were already terminated;
and that there is no truth to the claim that its export quota with Garments and Textile Export
Board was transferred to FAPI because the export quota is non-transferable.13

On 30 October 2004, the Labor Arbiter rendered judgment finding the dismissal of 5,984
complainants as illegal and awarding them separation pay and other monetary benefits
amounting to P3,453,664,710.86.14 The dispositive portion of the decision read:

WHEREFORE, premises all considered, judgment is hereby rendered dismissing the


complaint for unfair labor practice (ULP); declaring that complainants were illegally
dismissed; ordering respondents to jointly and severally pay them separation pay at one (1)
month for every year of service; backwages from the time their compensation was withheld
until the promulgation of this Decision[,] P5,000.00 moral damages and P5,000.00
exemplary damages for each of them, and eight percent (8%) attorneys fee of the total
monetary award, less the separation pay they received upon closure of API.

All other claims are hereby DISMISSED.

Attached and marked as Annexes "A" to "A-117" and shall form part of this decision are the
lists of complainants and their respective monetary awards.15

Upon receipt of a copy of the aforesaid decision, the Corporations filed their Notice of Appeal
with Motion to Reduce Appeal Bond and To Admit Reduced Amount with the National Labor
Relations Commission (NLRC). They asked the NLRC to reduce the appeal bond to P1
Million each on the grounds that it is impossible for any insurance company to cover such
huge amount and that, in requiring them to post in full the appeal bond would be tantamount
to denying them their right to appeal.16 Aris claimed that it was already dissolved and
undergoing liquidation. SLC added that it is not the employer of Emilinda D. Macatlang, et
al., and that the latter had already received from Aris their separation pay and other benefits
amounting to P419,057,348.24, which covers practically more than 10% of the monetary
award.17 FAPI, for its part, claimed that its total assets would not be enough to answer for
even a small portion of the award. To compel it to post a bond might result in complete
stoppage of operations. FAPI also cited the possibility that the assailed decision once
reviewed will be reversed and set aside.18 The Corporations posted a total of P4.5 Million.

Emilinda D. Macatlang, et al., opposed the motion by asserting that failure to comply with the
bond requirement is a jurisdictional defect since an appeal may only be perfected upon
posting of a cash bond equivalent to the monetary award provided by Article 223 of the
Labor Code.19

In light of the impossibility for any surety company to cover the appeal bond and the huge
economic losses which the companies and their employees might suffer if the P3.45 Billion
bond is sustained, the NLRC granted the reduction of the appeal bond. The NLRC issued an
Order dated 31 March 200620 directing the Corporations to post an additional P4.5 Million
bond, bringing the total posted bond to P9 Million. The dispositive portion of the Order
provides: WHEREFORE, premises considered, respondents are hereby ordered to post
bond, either in cash, surety or property, in the additional amount of FOUR MILLION FIVE
HUNDRED THOUSAND PESOS (P4,500,000.00) within an INEXTENDIBLE period of
FIFTEEN (15) calendar days from receipt hereof. To the said extent, the Motion for
Reduction is granted. Failure to render strict compliance with the Order entered herein shall
render the dismissal of the appeal and the decision sought for review, as final and
executory.21

Emilinda D. Macatlang, et al., filed a petition for certiorari before the Court of Appeals,
docketed as CA-G.R. SP No. 96363. They charged the NLRC with grave abuse of discretion
in giving due course to the appeal of petitioners despite the gross insufficiency of the cash
bond. They declared that the appeal bond must be equivalent to the amount of the award.22
Another petition, this time by Pacita Abelardo, et al., was also filed before the Court of
Appeals and docketed as CA-G.R. SP No. 95919.

The Corporations filed a Motion to Dismiss the petition in CA-G.R. SP No. 95919 on the
grounds of forum-shopping, absence of authorization from the employees for Emilinda D.
Macatlang to file said petition, and for failure to state the material dates.23

While the case was pending, the NLRC issued a Resolution on 19 December 2006 setting
aside the Decision of the labor arbiter and remanding the case to the "forum of origin for
further proceedings."24

In view of this related development, the Corporations filed their respective Manifestation and
Motion dated 30 January 2007 praying for the dismissal of the petition for certiorari for being
moot and academic.
On 26 March 2007, the Court of Appeals proceeded to reverse and set aside the 31 March
2006 NLRC Resolution and deemed it reasonable under the circumstances of the case to
order the posting of an additional appeal bond of P1 Billion. The dispositive portion of the
decision decreed:

WHEREFORE, premises considered, the March 31, 2006 Decision of the 2nd Division of the
National Labor Relations Commission, in NLRC NCR CA No. 046685-05, which reduced the
required Php 3.453 BILLION Pesos appeal bond to a paltry9 Million Pesos, is hereby
REVERSED and SET ASIDE and a new one issued, to ensure availability of hard cash or
reliable surety, on which victorious laborers could rely, DIRECTING private respondents to
POST additional appeal bond in the amount of Php 1 BILLION Pesos, in cash or surety,
within thirty (30) days from finality of this judgment, as pre-requisite to perfecting appeal.25

All parties filed their Motion for Reconsideration but were later denied by the Court of
Appeals in a Resolution26 dated 22 October 2007.

II.

Six (6) petitions for review on certiorariof the Decision of the Court of Appeals were filed
before this Court. They were docketed and entitled as follows: 1) G.R. No. 180147: Sara Lee
Philippines, Inc. v. Emilinda D. Macatlang, et al.; 2) G.R. No. 180148: Aris Philippines, Inc. v.
Emilinda D. Macatlang, et al.; 3) G.R. No. 180149: Sara Lee Corporation v. Emilinda D.
Macatlang, et al.; 4) G.R. No. 180150: Cesar C. Cruz v. Emilinda D. Macatlang, et al.; 5)
G.R. No. 180319: Fashion Accessories Phils., Inc. v. Emilinda D. Macatlang, et al.; and 6)
G.R. No. 180685: Emilinda D. Macatlang, et al. v. NLRC. In Resolutions dated 28 January
2008 and 18 February 2008, this Court resolved to consolidate these six (6) cases.27

The Corporations argue that the Court of Appeals committed serious error in not dismissing
Emilinda D. Macatlang, et al.s petition due to the filing of two (2) separate petitions for
certiorari, namely: Emilinda Macatlang, et al. v. Aris Philippines in CA-G.R. SP No. 96363
(Macatlang petition) and Pacita S. Abelardo v. NLRC, Aris Philippines, et al. in CAG.R. SP
No. 95919 (Abelardo petition). These two petitions, the Corporations aver, raise identical
causes of action, subject matters and issues, which are clearly violative of the rule against
forum-shopping. Moreover, the petitioners in the Abelardo petition28 consist of 411
employees,29 all of whom are also petitioners in the Macatlang petition. The Corporations
question the authority of Emilinda D. Macatlang to file and sign the verification and
certification of non-forum shopping because Resolusyon Bilang09-01-1998 (Resolusyon)
dated 5 September 1998 did not make any specific reference or authority that Emilinda D.
Macatlang can sign the verification and certification against forum shopping on behalf of the
other complainants. The Corporations claim that the Macatlangs petition failed to state the
material dates, such as when the NLRC order and resolution were received and when the
motion for reconsideration thereof was filed.30
The Corporations impute another error on the Court of Appeals when it did not dismiss the
petition for being moot and academic despite the fact that on 19 December 2006, the NLRC
had already set aside the decision of the Labor Arbiter. They defend the validity of the NLRC
resolution in the absence of a temporary restraining order or writ of preliminary injunction
issued by the Court of Appeals.31

The Corporations assail the Court of Appeals in directing the posting of an additional appeal
bond of P1 Billion. They contend that the Court of Appeals overlooked the fact that
Macatlang, et al., had already received their separation pay of P419 Million and P15 Million
Benevolent Fund which went to the union.32 The Court of Appeals also failed to exclude the
amount awarded to complainants as damages which under the NLRC Rules have to be
excluded. The Corporations seek a liberal interpretation to the requirement of posting of
appeal bond in that the NLRC has the power and authority to set a reduced amount of
appeal bond.33

SLPI also adds that their right to due process was allegedly violated for the following
reasons: first, it was never impleaded in the complaints; second, the requirements of service
of summons by publication were not complied with as admitted by the labor arbiter himself
thereby making it defective; and third, there was no showing that there was prior resort to
service of summons to the duly authorized officer of the company before summons by
publication was made to SLPI.34

FAPI slams the Court of Appeals for touching on the merits of the case when the only issue
brought to its attention is the NLRCs ruling on the appeal bond. FAPI argues that the Court
of Appeals has no basis in stating that: (1) there were 7,637 employees of Aris who were
already laid off and became complainants when there are in fact only 5,984 employees of
Aris involved in the illegal dismissal case; (2) that the P419 Million was not proven to have
been paid to the complainants when as a matter of fact, records of the NLRC revealed that
the amount was actually paid by Aris to its employees; and (3) that a dummy subsidiary
referring to FAPI was formed when records disclose that the ownership, incorporators,
officers, capitalization, place of business, and product manufactured by FAPI and Aris are
different.35

On the other hand, Emilinda D. Macatlang, et al., in their petition for review on certiorari
assert that the appeal of the Corporations had not been perfected in accordance with Article
223 of the Labor Code when they failed to post the amount equivalent to the monetary
award in the judgment appealed from amounting to P3.45 Billion. Emilinda D. Macatlang, et
al., submit that the P1 Billion bond is not equivalent to the monetary award of P3.45 Billion.
More importantly, Emilinda D. Macatlang, et al., accused the Court of Appeals of extending
the period of appeal by prescribing an additional amount to be paid within a reasonable
period of time, which period it likewise determined, in contravention of Article 223 of the
Labor Code. Emilinda D. Macatlang, et al., expound that the filing of a bond outside the
period of appeal, even with the filing of a motion to reduce bond, would not stop the running
of the period of appeal. Emilinda D. Macatlang, et al., opine that the Court of Appeals has
not been conferred the power to legislate hence it should have strictly followed Article 223 of
the Labor Code, as the same was clear.36
In an Urgent Manifestation and Motion, the Corporations informed this Court of a Resolution
dated 30 March 2009 by the Third Division of this Court entitled, "Gabriel Fulido, et al. v. Aris
Philippines, Inc." docketed as G.R. No. 185948 (Fulido case) denying the petition for review
filed by complainants in that case. The Corporations intimate that the petitioners in the Fulido
case are also former employees of Aris whose employments were terminated as a result of
Aris permanent closure. Petitioners submit that Emilinda D. Macatlang, et al., and
petitioners in the Fulidocase filed illegal dismissal cases before the NLRC seeking identical
reliefs. Considering the identity in essential facts and basic issues involved, petitioners argue
that there is compelling reason to adopt and incorporate by reference the conclusion
reached in the Fulido case.37

III.

The issues raised in these consolidated cases can be summarized as follows:

1. Whether the filing of two (2) petitions for certiorari, namely: the Macatlang petition and the
Abelardo petition constitutes forum shopping.

2. Whether Emilinda D. Macatlang was duly authorized to sign the verification and certificate
of non-forum shopping attached to the Macatlang petition.

3. Whether the petition should be dismissed for failure to state the material dates.

4. Whether the service of summons by publication on SLC is defective.

5. Whether the subsequent NLRC ruling on the merits during the pendency of the petition
questioning an interlocutory order renders the instant petition moot and academic.

6. Whether the appeal bond may be reduced.

Before we proceed to the gist of this controversy, we shall resolve the first 3 procedural
issues first.

IV.
The Corporations claim that the group of Macatlang committed forum shopping by filing two
petitions before the Court of Appeals.

Forum shopping is the act of a litigant who repetitively avails of several judicial remedies in
different courts, simultaneously or successively, all substantially founded on the same
transactions and on the same essential facts and circumstances, and all raising substantially
the same issues either pending in or already resolved adversely by some other court, to
increase his chances of obtaining a favorable decision if not in one court, then in another.38

What is pivotal in determining whether forum shopping exists or not is the vexation caused
the courts and parties-litigants by a party who asks different courts and/or administrative
agencies to rule on the same or related cases and/or grant the same or substantially the
same reliefs, in the process creating the possibility of conflicting decisions being rendered by
the different courts and/or administrative agencies upon the same issues.39

Forum shopping exists when the elements of litis pendentia are present, and when a final
judgment in one case will amount to res judicatain the other. For litis pendentia to be a
ground for the dismissal of an action, there must be: (a) identity of the parties or at least
such as to represent the same interest in both actions; (b) identity of rights asserted and
relief prayed for, the relief being founded on the same acts; and (c) the identity in the two
cases should be such that the judgment which may be rendered in one would, regardless of
which party is successful, amount to res judicata in the other.40

The Macatlang petition was filed on 8 September 2006 while the Abelardo petition was filed
10 days later, or on 18 September 2006. Indeed, these two petitions assailed the same order
and resolution of the NLRC in NLRC CA No. 046685-05, entitled Emilinda Macatlang, et al.
v. Aris Philippines, Inc., et al., and sought for the dismissal of the Corporations appeal for
non-perfection because of failure to post the required appeal bond. A judgment in either case
would have, if principles are correctly applied, amounted to res judicatain the other.

At first glance, it appears that there is also identity of parties in both petitions which is
indicative of forum-shopping. The Macatlang petition consists of 5,984 dismissed employees
of Aris while the Abelardo petition has 411 dismissed employees, all of which were already
included as petitioners in the Macatlang petition. With respect to these 411 petitioners, they
could be declared guilty of forum shopping when they filed the Abelardo petition despite the
pendency of the Macatlang petition. As a matter of fact, the Abelardo petition was dismissed
by the Court of Appeals in a Resolution dated 17 November2006 on the ground of a
defective certification on non-forum shopping, among others.41 The Abelardo petition
appears to be defective as the petition itself was replete with procedural infirmities prompting
the Court of Appeals to dismiss it outright. Instead of curing the defects in their petition,
petitioners in Abelardo revealed that pertinent documents which should have been attached
with their petition were actually submitted before the Sixteenth Division of the Court of
Appeals where the Macatlang petition was pending. Evidently, petitioners in Abelardo have
foreknowledge of an existing petition but nevertheless proceeded to file another petition and
omitting to mention it in their certification on non-forum shopping, either intentionally or not.
Clearly, the petitioners in the Abelardo petition committed forum shopping.

Now, should the act of these 411 employees prejudice the rights of the 5,573 other
complainants in the Macatlang petition? The answer is no. Forum shopping happens when
there is identity of the parties or at least such as to represent the same interest in both
actions. We do not agree that the 411 petitioners of the Abelardo petition are representative
of the interest of all petitioners in Macatlang petition. First, the number is barely sufficient to
comprise the majority of petitioners in Macatlang petition. Second, 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.
In the absence of substantial similarity between the parties in Macatlang and Abelardo
petitions, we find that the petitioners in Macatlang petition did not commit forum shopping.
This view was implicitly shared by the Thirteenth Division of the Court of Appeals when it did
not bother to address the issue of forum shopping raised by petitioners therein precisely
because at the time it rendered the assailed decision, the Abelardo petition had already
been summarily dismissed.

V.

Next, the Corporations complain that Macatlang was not duly authorized to sign the
verification and certification of non-forum shopping which accompanied the main petition
before the Court of Appeals. They anchored their argument on Resolusyon, which reads in
part:

1. Aming binigyan ng karapatan sina ERNESTO R. ARELLANO AT/O VILLAMOR


MOSTRALES, aming mga abogado/legal advisers ng Arellano & Associates at si EMILINDA
D. MACATLANG, aming head complainant, bilang aming ATTORNEYS-IN-FACT para
katawanin at kanilang gampanan ang mga sumusunod na Gawain alinsunod sa aming
kagustuhan:

a. Na, kami ay katawanin sa kaso o mga kaso laban sa mga nabanggit na Kompanya: ARIS,
FAPI ATSARA LEE CORP./SARA LEE PHILS., INC.at sa mga opisyales ng mga nabanggit;
pirmahan ang anumang demanda o "complaint" at lahat namga kaukulang papeles tulad ng
Position Paper, Reply, Rejoinder, Memorandumat iba pang papeles na may kinalaman o
patungkol sakasong ito simula sa NLRC, Court of Appeals, hanggang sa Korte Suprema;

b. Na, aming malayang iniaatangsa kanila ang karapatan upang makipagkasundo sa mga
nademanda sa pamamagitan ng isang "Compromise Agreement"o Kasunduan, gayon din
ang karapatang tanggapin ang kabuuang kabayaran sa aregluhan sa kaso na ayon sa
kanilang pagsusuri ay mabuti at makatarungan para sa amin, kaakibat ng aming mga
pirmang tanda ng pagsang-ayon ito bilang mayoria na nagdemanda o tanggapin ang
kabuuang bayad sa pagtatapos ng kaso, bilang aming kinatawan at ATTORNEYS-IN-FACT;
c. Na, sa kanilang puspusan at matapat na paghawak sa naturang kaso, aming ibibigay ang
sampung porsiyento (10%)ng aming "total claims"bilang attorneys fees ng aming humawak
na abogado/legal adviser: sina Atty. Ernesto R. Arellano and/or Villamor A. Mostrales at
gayon din sa karagdagang panagot sa kanilang ginastos, gagastusin sa pagtatanggol ng
kaso bilang miscellaneous expensessa kanilang ma[a]yos na pagsulong at pagtangan ng
aming pangkalahatang interes sa naturang kaso.42

From the foregoing document, it can easily be gleaned that Macatlang was assigned by the
complainants as their attorney-in-fact to perform the following acts: 1) to represent them in
the case/cases filed against Aris, FAPI, SLC, and SLPI; sign any complaint, pleadings, or
any other documents pertinent or related to the instant case brought before the NLRC, Court
of Appeals, and Supreme Court; 2) to enter into any compromise agreement or settlement;
and 3) to receive the full payment as a consequence of any settlement. The first act
necessarily encompasses the authority to sign any document related to NLRC NCR No. 00-
04-03677-98. The petition for review on certiorari is one of these documents. Supreme Court
Circular Nos. 28-91 and 04-94 require a Certification of Non-Forum Shopping in any
initiatory pleading filed before the Supreme Court and the Court of Appeals while Section 1,
Rule 45 of the Rules of Civil Procedure requires the petition for review on certiorari to be
verified, thereby making the verification and certification of non-forum shopping essential
elements of a petition for review on certiorari, which Macatlang herself was authorized under
the Resolusyon to sign.

VI.

The Corporations argue that the case before the Court of Appeals should have been
dismissed for failure of Macatlang to state the material dates in the petition. Section 3, Rule
46 of the Rules of Court mandates that in a petition for certiorari before the Court of Appeals,
the material dates showing when notice of the judgment orfinal order or resolution assailed
was received, when the motion for reconsideration was filed, and when notice of the denial
thereof was received, must be indicated. Under the same rule, failure to state the material
dates shall be a ground for dismissal of the petition. The rationale for the requirement is to
enable the appellate court to determine whether the petition was filed within the period fixed
in the rules.43 However, the strict requirements of the law may be dispensed with in the
interest of justice. It may not be amiss to point out this Courts ruling in the case of Acaylar,
Jr. v. Harayo,44 and we quote:

We also agree with the petitioner that failure to state the material dates is not fatal to his
cause of action, provided the date of his receipt, i.e., 9 May 2006, of the RTC Resolution
dated 18 April 2006 denying his Motion for Reconsideration is duly alleged in his Petition. In
the recent case of Great Southern Maritime Services Corporation v. Acua, we held that "the
failure to comply with the rule on a statement of material dates in the petition may be
excused since the dates are evident from the records." The more material date for purposes
of appeal to the Court of Appeals is the date of receipt of the trial court's order denying the
motion for reconsideration. The other material dates may be gleaned from the records of the
case if reasonably evident.45

In the instant case, the Corporations alleged in their petition before the Court of Appeals that
when they received the Resolution of the NLRC on 6 July 2006, it can be determined
whether the appeal to the Court of Appeals was filed within the 60-day reglementary period.
And as a matter of fact, the appeal was filed on 8 September 2006, and well within the 60-
day period.

VII.

Having disposed the procedural issues, we now tackle the Corporations arguments, in the
main, calling for a reduction of the appeal bond.

Well-settled is the doctrine that appeal is not a constitutional right, but a mere statutory
privilege. Hence, parties who seek to avail themselves of it must comply with the statutes or
rules allowing it.46 The primary rule governing appeal from the ruling of the labor arbiter is
Article 223 of the Labor Code which provides:

Art. 223. Appeal. Decisions, awards, or orders of the Labor Arbiter are final and executory
unless appealed to the Commission by any or both parties within ten (10)calendar days from
receipt of such decisions, awards, or orders. Such appeal may be entertained only on any of
the following grounds:

a. If there is prima facie evidence of abuse of discretion on the part of the Labor Arbiter;

b. If the decision, order or award was secured through fraud or coercion, including graft and
corruption;

c. If made purely on questions of law; and d. If serious errors in the findings of facts are
raised which would cause grave or irreparable damage or injury to the appellant.

In case of a judgment involving a monetary award, an appeal by the employer may be


perfected only upon the posting of a cash or surety bond issued by a reputable bonding
company duly accredited by the Commission in the amount equivalent to the monetary
award in the judgment appealed from. (Emphasis supplied).
Article 223, under Presidential Decree No. 442, was amended by Republic Act No. 6715 to
include the provision on the posting of a cash or surety bond as a precondition to the
perfection of appeal.

The requisites for perfection of appeal as embodied in Article 223, as amended, are: 1)
payment of appeal fees; 2) filing of the memorandum of appeal; and 3) payment of the
required cash or surety bond.47 These requisites must be satisfied within 10days from
receipt of the decision or order appealed from.

In YBL v. NLRC,48 the Court was more liberal in construing Article 223. The NLRC
dismissed the appeal for failure to post the bond. The Court favored the appellant partly
because the appeal was made just after six (6) days from the effectivity of the Interim Rules
of Republic Act No. 6715. The Court observed that both parties did not know about the new
rule yet.

It is presumed that an appeal bond is only necessary in cases where the labor arbiters
decision or order contains a monetary award. Conversely, when the labor arbiter does not
state the judgment award, posting of bond may be excused.

In YBL, the exact total amount due to the private respondents as separation pay was not
stated which would have been the basis of the bond that is required to be filed by petitioners
under the said law.

From an award of backwages and overtime pay by the labor arbiter in Rada v. NLRC,49
petitioner therein failed to post the supersedeas bond. Nevertheless, the Court gave due
course to the appeal for "the broader interests of justice and the desired objective of
resolving controversies on the merits." The amount of the supersedeas bond could not be
determined and it was only in the NLRC order that the amount was specified and which
bond, after extension granted by the NLRC, was timely filed by petitioner.

In the same vein, the Court in Blancaflor v. NLRC,50 excused the failure of appellant to post
a bond due to the failure of the Labor Arbiter to state the exact amount of back wages and
separation pay due.

Citing Taberrah v. NLRC51 and National Federation of Labor Union v. Hon. Ladrido III,52 the
Court in Orozco v. The Fifth Division of the Court of Appeals53 postulated that "respondents
cannot be expected to post such appeal bond equivalent to the amount of the monetary
award when the amount thereof was not included in the decision of the labor arbiter." The
computation of the amount awarded to petitioner was not stated clearly in the decision of the
labor arbiter, hence, respondents had no basis in determining the amount of the bond to be
posted.
Furthermore, when the judgment award is based on a patently erroneous computation, the
appeal bond equivalent to the amount of the monetary award is not required to be posted.
Erectors, Inc. v. NLRC54 is a good example on this point. The NLRCs order to post a bond
of P1,576,224.00 was nullified because the bond was erroneously computed on the basis of
the salary which the employee was no longer receiving at the time of his separation.

Also, since the computation of the award in Star Angel Handicraft v. NLRC55 was based on
erroneous wage and that a big portion of the award had already prescribed, the non-posting
of appeal bond was excused.

In Dr. Postigo v. Phil. Tuberculosis Society, Inc.,56 respondent deferred the posting of the
surety bond in view of the alleged erroneous computation by the labor arbiter of the
monetary award. While the labor arbiter awarded P5,480,484.25 as retirement benefits, only
P5,072,277.73, according to the respondent's computation, was due and owing to the
petitioners.

In sum, the NLRC may dispense of the posting of the bond when the judgment award is: (1)
not stated or(2) based on a patently erroneous computation. Sans these two (2) instances,
the appellant is generally required to post a bond to perfect his appeal.

The Court adhered to a strict application of Article 223 when appellants do not post an
appeal bond at all. By explicit provision of law, an appeal is perfected only upon the posting
of a cash or surety bond. The posting of the appeal bond within the period provided by law is
not merely mandatory but jurisdictional.57 The reason behind the imposition of this
requirement is enunciated in Viron Garments Mfg. Co., Inc. v. NLRC,58 thus:

The requirement that the employer post a cash or surety bond to perfect its/his appeal is
apparently 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 was
intended to discourage employers from using an appeal to delay, or even evade, their
obligation to satisfy their employees' just and lawful claims.59

Thus, when petitioners, in the cases of Ong v. Court of Appeals,60 Rural Bank of Coron
(Palawan), Inc. v. Cortes,61 Sy v. ALC,62 Ciudad Fernandina Food Corporation Employees
Union-Association Labor Unions v. Court of Appeals,63 and Stolt-Nielsen Maritime Services,
Inc. v. NLRC,64 did not post a full or partial appeal bond, it was held that no appeal was
perfected. A longer look on past rulings would show that:

In Nationwide Security and Allied Services, Inc. v. NLRC,65 it was found that petitioners had
funds from its other businesses to post the required bond. The Court did not find as
acceptable petitioners excuse, that "[using] funds from sources other than that earned from
[its company is not] a sound business judgment" to exempt it from posting an appeal bond.
Petitioners failure in Mers Shoes Mfg, Inc. v. NLRC,66 to post the required bond within the
reglementary period after it has been ordered reduced, justified the dismissal of its appeal.

The labor arbiters decision in Santos v. Velarde67 stated the exact award of backwages to
be paid by petitioner, thus the Court affirmed the dismissal of the appeal by the non-payment
of the appeal bond within the 10-day period provided by law.

Even if petitioner in Heritage Hotel Manila v. NLRC68 questioned as basis of the appeal
bond the computation of the monetary award, the Court did not excuse it from posting a
bond in a reasonable amount or what it believed to be the correct amount.

In Banahaw Broadcasting Corporation v. Pacana III,69 the NLRC issued an order denying
petitioners motion for recomputation of the monetary award and ordered it to post the
required bond within 10 days.

When BBC further demonstrated its unwillingness by completely ignoring this warning and
by filing a Motion for Reconsideration on an entirely new ground, we held that the NLRC
cannot be said to have committed grave abuse of discretion by making good its warning to
dismiss the appeal.70

Upon the other hand, the Court did relax the rule respecting the bond requirement to perfect
appeal in cases where: (1) there was substantial compliance with the Rules, (2) surrounding
facts and circumstances constitute meritorious grounds to reduce the bond, (3) a liberal
interpretation of the requirement of an appeal bond would serve the desired objective of
resolving controversies on the merits, or (4) the appellants, at the very least, exhibited their
willingness and/or good faith by posting a partial bond during the reglementary period.71

In Lopez v. Quezon City Sports Club Inc.,72 the posting of the amount of P4,000,000.00
simultaneously with the filing of the motion to reduce the bond to that amount, as well as the
filing of the memorandum of appeal, all within the reglementary period, altogether constitute
substantial compliance with the Rules. In Intertranz Container Lines, Inc. v. Bautista,73 this
Court has relaxed the appeal bond requirement when it was clear from the records that
petitioners never intended to evade the posting of an appeal bond. In Semblante v. Court of
Appeals,74 the Court stated that the rule on the posting of an appeal bond cannot defeat the
substantive rights of respondents to be free from an unwarranted burden of answering for an
illegal dismissal for which they were never responsible. It was found that respondents, not
being petitioners employees, could never have been dismissed legally or illegally. In the
recent case of Garcia v. KJ Commercial,75 respondent showed willingness to post a partial
bond when it posted a P50,000.00 cash bond upon filing of a motion to reduce bond. In
addition, when respondents motion for reconsideration was denied, it posted the full surety
bond.
The old NLRC Rules of Procedure, which took effect in 5 November 1993,76 provides:

SECTION 6. Bond. In case the decision of a Labor Arbiter POEA Administrator and
Regional Director or his duly authorized hearing officer involves a monetary award, an
appeal by the employer shall be perfected only upon the posting of a cash or surety bond
issued by a reputable bonding company duly accredited by the Commission or the Supreme
Court in an amount equivalent to the monetary award, exclusive of moral and exemplary
damages and attorneys fees.

The employer as well as counsel shall submit a joint declaration under oath attesting that the
surety bond posted is genuine and that it shall be in effect until final disposition of the case.

The Commission may, in meritorious cases and upon Motion of the Appellant, reduce the
amount of the bond. (As amended by Nov. 5, 1993) (Emphasis Supplied).

Thus, appellants are given the option to file a motion to reduce the amount of bond only in
meritorious cases. In the NLRC New Rules of Procedure promulgated in 2002, another
qualification to the reduction of an appeal bond was added in Section 6 thereof:

No motion to reduce bond shall be entertained except on meritorious grounds, and only
upon the posting of a bond in a reasonable amount in relation to the monetary award.
(Emphasis Supplied).

Said Rules significantly provide that:

The filing of the motion to reduce bond without compliance with the requisites in the
preceding paragraphs, shall not stop the running of the period to perfect an appeal.

Clearly therefore, the Rules only allow the filing of a motion to reduce bond on two (2)
conditions: (1) that there is meritorious ground and (2) a bond in a reasonable amount is
posted. Compliance with the two conditions stops the running of the period to perfect an
appeal provided that they are complied within the 10-day reglementary period.

In Ramirez v. Court of Appeals,77 the Court did not find any merit to reduce the bond.
Although Ramirez posted an appeal bond, the same was insufficient, as it was not
equivalent to the monetary award of the Labor Arbiter. Moreover, when Ramirez sought a
reduction of the bond, he merely said that the bond was excessive and baseless without
amplifying why he considered it as such.
The grounds to be cited in the motion to reduce must be valid and acceptable. For instance,
in Pasig Cylinder, Mfg., Corp. v. Rollo,78 we found as acceptable reason for reducing the
appeal bond the downscaling of their operations considered together with the amount of the
monetary award appealed. In University Plans Incorporated v. Solano,79 the fact of
receivership was considered as a meritorious ground in reducing the appeal bond.

Since the intention is merely to give the NLRC an idea of the justification for the reduced
bond, the evidence for the purpose would necessarily be less than the evidence required for
a ruling on the merits.80 As a matter of fact, in Star Angel, the NLRC was ordered to make a
preliminary determination on the merits for granting a reduction of the appeal bond. In
University Plans, the Court took into consideration the fact that petitioner was under
receivership and it was possible that petitioner has no liquid asset and it could not raise the
amount of more than P3Million within a period of 10-days from receipt of the Labor Arbiters
judgment. Therefore, the Court ordered a remand of the case to the NLRC for the conduct of
preliminary determination of the merit or lack of merit of petitioners motion to reduce bond.
The Court adopted the ruling in Nicol v. Footjoy Industrial Corp., where the case was also
remanded to the NLRC to determine the merits of the motion to reduce in view of our finding
that the NLRC in that case gravely abused its discretion when it dismissed Footjoys appeal,
without even receiving evidence from which it could have determined the merit or lack of it of
the motion to reduce the appeal bond.

In the recent case of McBurnie v. Ganzon,81 we held that merit may "pertain to an
appellants lack of financial capability to pay the full amount of the bond, the merits of the
main appeal such as when there is a valid claim that there was no illegal dismissal to justify
the award, the absence of an employer-employee relationship, prescription of claims, and
other similarly valid issues that are raised in the appeal. For the purpose of determining a
meritorious ground, the NLRC is not precluded from receiving evidence, or from making a
preliminary determination of the merits of the appellants contentions."82

In order to toll the running of the period to appeal once the motion for reduction is filed,
McBurnie has set a parameter on what amount is reasonable for such purpose:

To ensure that the provisions of Section 6, Rule VI of the NLRC Rules of Procedure that give
parties the chance to seek a reduction of the appeal bond are effectively carried out, without
however defeating the benefits of the bond requirement in favor of a winning litigant, all
motions to reduce bond that are to be filed with the NLRC shall be accompanied by the
posting of a cash or surety bond equivalent to 10% of the monetary award that is subject of
the appeal, which shall provisionally be deemed the reasonable amount of the bond in the
meantime that an appellants motion is pending resolution by the Commission. In conformity
with the NLRC Rules, the monetary award, for the purpose of computing the necessary
appeal bond, shall exclude damages and attorneys fees. Only after the posting of a bond in
the required percentage shall an appellants period to perfect an appeal under the NLRC
Rules be deemed suspended.83 (Emphasis and underline supplied).
While McBurnie has effectively addressed the preliminary amount of the bond to be posted
in order to toll the running of the period to appeal, there is no hard and fast rule in
determining whether the additional bond to be posted is reasonable in relation to the
judgment award.

In Rosewood Processing Inc. v. NLRC,84 we found the reduced bond of P50,000.00


acceptable as substantial compliance relative to the P789,000.00 judgment award. In Nicol,
the P10 Million bond was enough to perfect appeal from a P51.9 Million judgment award.

In Lopez v. Quezon City Sports Club, Inc., the NLRC ordered the posting of an additional P6
Million and held as compliant a P10 Million bond relative to the judgment award of P27
Million. In Pasig Cylinder Mfg. Corp. v. Rollo, we ruled that the reduced appeal bond of
P100,00.00 satisfies the requirement for an appeal from the judgment award of P3.13
Million. In University Plans, the P30,000.00 bond was accepted in perfecting an appeal from
a P3.013 Million judgment.

In the case at bar, the motion to reduce bond filed by the Corporations was resolved by the
NLRC in the affirmative when it found that there are meritorious grounds in reducing the
bond such as the huge amount of the award and impossibility of proceeding against the
Corporations properties which correspond to a lower valuation. Also, the NLRC took into
consideration the fact of partial payment of P419 Million. The NLRC found the P4.5 Million
bond posted by the Corporations as insufficient, hence ordering them to post an additional
P4.5 Million. Thus, P9 Million was held as the amount of the bond as reduced.

The Court of Appeals found the amount of the appeal bond adjudged by the NLRC as
measly and insufficient and raised it to P1 Billion. The appellate court rationalized:

The required Php3.453 BILLION appeal bond sought to be reduced by the private
respondents is equivalent to an average of Php452,140.00 separation pay for each of the
7,637 employees held to be illegally dismissed by the employer who sought a reduction of
the required Php3.453 BILLION appeal bond because the employer allegedly put up Php428
Million which consists of the Php419 MILLION unpaid commitment plus the Php9 Million
already paid-up cash appeal bond.

Even if we consider Php 419 MILLION unpaid commitment plus the Php 9 Million already
paid-up cash appeal bond, the unpaid appeal bond is still Php 3.025 BILLION. Php428
Million is still miniscule compared to the Php3.025 BILLION unpaid portion of the appeal
bond. What the 7,637 workers need is cash or surety guaranty in the event of renewed
victory on appeal for the 7,637 petitioners-employees who were awarded one month salary
for every year of service as separation pay totaling Php3.453 BILLION Pesos. Php419
MILLION Pesos promise and the Php3.025 BILLION unpaid appeal bond both become more
obscure if the employer would be permitted to subsequently employ artifices to evade
execution of judgment.
The decision to reduce the amount of appeal bond is not a blanket power to the NLRC,
because the discretion is not unbridled and is subject to strict guidelines because Art. 223 of
the Labor Codeis a rule of jurisdiction that affords little leeway for liberal interpretation. The
order of the NLRC reducing the required appeal bond from Php 3.453 BILLION Pesos to
only Php 9 MILLION Pesos is in grave abuse of its discretion and therefore void, not to
mention that it is per se unreasonable and without factual basis.

We have considered the circumstances and evidence presented in this case relative to the
motion to reduce appeal bond.1wphi1 We have taken into consideration the Php 419
MILLION unpaid commitment plus the Php 9 Million already paid-up cash appeal bond, and
the resulting unpaid appeal bond which is still Php 3.025 BILLION. We still deem it proper
under the law and the Constitution for the protection of labor that private respondents be
required as pre-requisite to perfecting appeal, to POST, within thirty (30) days from finality of
this judgment, additional appeal bond of Php 1 BILLION Pesos, in cash or surety, which
amount is even less than one-third (1/3) of the original appeal bond required by law, which
We hold to be reasonable under the circumstances and to be based on the evidence
presented in this case. The additional appeal bond of Php 1 BILLION is equivalent to an
average of Php 130,941.46 (instead of the original average of Php452,140.00) for each of
the alleged illegally dismissed 7,637 workers.85 Notably, the computation of the judgment
award in this case includes damages.

The NLRC Interim Rules on Appeals under Republic Act No. 6715 specifically provides that
damages shall be excluded in the determination of the appeal bond, thus:

SECTION 7. Bond. In case of a judgment of the Labor Arbiter involving a monetary award,
an appeal by the employer shall be perfected only upon the posting of a cash or surety bond
issued by a reputable bonding company duly accredited by the Commission in an amount
equivalent to the monetary award in the judgment appealed from.

For purposes of the bond required under Article 223 of the Labor Code, as amended, the
monetary award computed as of the date of promulgation of the decision appealed from
shall be the basis of the bond. For this purpose, moral and exemplary damages shall not be
included in fixing the amount of the bond.

Pending the issuance of the appropriate guidelines for accreditation, bonds posted by
bonding companies duly accredited by the regular courts, shall be acceptable. (Emphasis
supplied). When the rules were amended in 1993, attorneys fees were also excluded in the
judgment award for the purpose of computing the appeal bond, viz:

SECTION 6. BOND. - In case the decision of the Labor Arbiter, POEA Administrator and
Regional Director or his duly authorized hearing officer involves a monetary award, an
appeal by the employer shall be perfected only upon the posting of a cash or surety bond
issued by a reputable bonding company duly accredited by the Commission or the Supreme
Court in an amount equivalent to the monetary award, exclusive of moral and exemplary
damages and attorneys fees.

Subsequently, in an amendment by NLRC Resolution No. 01-02, Series of 2002, the rules in
effect at the time the appeal bond was interposed by the Corporations, the provision on
exclusion of damages and attorneys fees was retained:86

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.

Thus, under the applicable rules, damages and attorneys fees are excluded from the
computation of the monetary award to determine the amount of the appeal bond. We shall
refer to these exclusions as "discretionaries," as distinguished from the "mandatories" or
those amounts fixed in the decision to which the employee is entitled upon application of the
law on wages. These mandatories include awards for backwages, holiday pay, overtime pay,
separation pay and 13th month pay.

As a matter of fact, in Erectors, Inc. v. NLRC,87 it was concluded that no bond is required if
an appeal raises no question other than as regards the award of moral and/or exemplary
damages. In Cosico, Jr., v. NLRC,88 the employer was held to have substantially complied
with the requirement when it posted the bond on time based on the monetary award for
backwages and thirteenth month pay, excluding the exorbitant award for moral and
exemplary damages.

The judgment award in the instant case amounted to an immense P3.45 Billion. The award
is broken down as follows: backwages, separation pay, moral and exemplary damages. For
purposes of determining the reasonable amount of the appeal bond, we reduce the total
amount of awards as follows:

The mandatories comprise the backwages and separation pay. The daily wage rate of an
employee of Aris ranges from P170-P200. The average years of service ranges from 5-35
years. The backwages were computed at 108 months or reckoned from the time the
employees were actually terminated until the finality of the Labor Arbiters Decision.
Approximately, the amount to be received by an employee, exclusive of damages and
attorneys fees, is about P600,000.00. The Labor Arbiter granted moral damages amounting
to P10,000.00, and another P10,000.00 as exemplary damages. The total number of
employees receiving P20,000.00 each for damages is 5,984, bringing the total amount of
damages to P119,680,000.00. This amount should be deducted as well as the P419 Million
unpaid commitment plus the P 9 Million already paid-up cash appeal bond from the actual
amount to determine the amount on which to base the appeal bond. Thus, the total amount
is P2.9 Billion.
We sustain the Court of Appeals in so far as it increases the amount of the required appeal
bond. But we deem it reasonable to reduce the amount of the appeal bond to P725 Million.
This directive already considers that the award if not illegal, is extraordinarily huge and that
no insurance company would be willing to issue a bond for such big money. The amount of
P725 Million is approximately 25% of the basis above calculated. It is a balancing of the
constitutional obligation of the state to afford protection to labor which, specific to this case,
is assurance that in case of affirmance of the award, recovery is not negated; and on the
other end of the spectrum, the opportunity of the employer to appeal.

By reducing the amount of the appeal bond in this case, the employees would still be
assured of at least substantial compensation, in case a judgment award is affirmed. On the
other hand, management will not be effectively denied of its statutory privilege of appeal.

VIII.

The Corporations invoked the decision issued by the NLRC last 19 December 2006 which
set aside the labor arbiters decision and ordered remand of the case to the forum of origin
to have the instant petitions dismissed for being moot.

When the NLRC granted the motion to reduce the appeal bond and the Corporations posted
the required additional bond, the appeal was deemed to have been perfected. The act of the
NLRC in deciding the case was based on petitioners appeal of the labor arbiters ruling,
which it deemed to have been perfected and therefore, ripe for decision.

Prudence however dictates that the NLRC should not have decided the case on its merits
during the pendency of the instant petition. The very issue raised in the petitions determines
whether or not the appeal by the Corporations has been perfected. Until its resolution, the
NLRC should have held in abeyance the resolution of the case to prevent the case from
being mooted. The NLRC decision was issued prematurely.

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 1!725 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.

SO ORDERED.
SECOND DIVISION

G.R. No. 195227 April 21, 2014

FROILAN M. BERGONIO, JR., DEAN G. PELAEZ, CRISANTO O. GEONGO, WARLITO O.


JANAYA, SALVADOR VILLAR, JR., RONALDO CAFIRMA, RANDY LUCAR, ALBERTO
ALBUERA, DENNIS NOPUENTE and ALLAN SALVACION, Petitioners,
vs.
SOUTH EAST ASIAN AIRLINES and IRENE DORNIER, Respondents.

DECISION

BRION, J.:

We resolve in this petition for review on certiorari1 the challenge to the September 30, 2010
decision2 and the January 13, 2011 resolution3 of the Court of Appeals (CA) in CA-G.R. SP
No. 112011.

This CA decision reversed the July 16, 2008 decision4 of the National Labor Relations
Commission (NLRC), which, in turn, affirmed the March 13, 2008 order5 of the Labor Arbiter
(LA) in NLRC Case No. 00-04-05469- 2004. The LA granted the Motion filed by petitioners
Froilan M. Bergonio, Jr., Dean G. Pelaez, et.al., (collectively, the petitioners) for the release
of the garnished amount to satisfy the petitioners accrued wages.

The Factual Antecedents

On April 30, 2004, the petitioners filed before the LA a complaint for illegal dismissal and
illegal suspension with prayer for reinstatement against respondents South East Asian
Airlines (SEAIR) and Irene Dornier as SEAIRs President (collectively, the respondents).

In a decision dated May 31, 2005, the LA found the petitioners illegally dismissed and
ordered the respondents, among others, to immediately reinstate the petitioners with full
backwages. The respondents received their copy of this decision on July 8, 2005.6
On August 20, 2005, the petitioners filed before the LA a Motion for issuance of Writ of
Execution for their immediate reinstatement.

During the scheduled pre-execution conference held on September 14, 2005, the
respondents manifested their option to reinstate the petitioners in the payroll. The payroll
reinstatement, however, did not materialize. Thus, on September 22, 2005, the petitioners
filed before the LA a manifestation for their immediate reinstatement.

On October 3, 2005, the respondents filed an opposition to the petitioners motion for
execution.7 They claimed that the relationship between them and the petitioners had already
been strained because of the petitioners threatening text messages, thus precluding the
latters reinstatement.

On October 7, 2005, the LA granted the petitioners motion and issued a writ of execution.8

The respondents moved to quash the writ of execution with a prayer to hold in abeyance the
implementation of the reinstatement order.9 They maintained that the relationship between
them and the petitioners had been so strained that reinstatement was no longer possible.

The October 7, 2005 writ of execution was returned unsatisfied. In response, the petitioners
filed a motion for re-computation of accrued wages, and, on January 25, 2006, a motion for
execution of the re-computed amount. On February 16, 2006, the LA granted this motion
and issued an alias writ of execution.10

On February 21, 2006, the respondents issued a Memorandum11 directing the petitioners to
report for work on February 24, 2006. The petitioners failed to report for work on the
appointed date. On February 28, 2006, the respondents moved before the LA to suspend
the order for the petitioners reinstatement.12

Meanwhile, the respondents appealed with the NLRC the May 31, 2005 illegal dismissal
ruling of the LA.

In an order dated August 15, 2006,13 the NLRC dismissed the respondents appeal for non-
perfection. The NLRC likewise denied the respondents motion for reconsideration in its
November 29, 2006 resolution, prompting the respondents to file before the CA a petition for
certiorari.

The NLRC issued an Entry of Judgment on February 6, 2007 declaring its November 29,
2006 resolution final and executory. The petitioners forthwith filed with the LA another motion
for the issuance of a writ of execution, which the LA granted on April 24, 2007. The LA also
issued another writ of execution.14 A Notice of Garnishment was thereafter issued to the
respondents depositary bank Metrobank-San Lorenzo Village Branch, Makati City in the
amount of P1,900,000.00 on June 6, 2007.

On December 18, 2007, the CA rendered its decision (on the illegal dismissal ruling of the
LA) partly granting the respondents petition. The CA declared the petitioners dismissal valid
and awarded them P30,000.00 as nominal damages for the respondents failure to observe
due process.

The records show that the petitioners appealed the December 18, 2007 CA decision with this
Court. In a resolution dated August 4, 2008, the Court denied the petition. The Court likewise
denied the petitioners subsequent motion for reconsideration, and thereafter issued an Entry
of Judgment certifying that its August 4, 2008 resolution had become final and executory on
March 9, 2009.

On January 31, 2008, the petitioners filed with the LA an Urgent Ex-Parte Motion for the
Immediate Release of the Garnished Amount.

In its March 13, 2008 order,15 the LA granted the petitioners motion; it directed Metrobank-
San Lorenzo to release the P1,900,000.00 garnished amount. The LA found valid and
meritorious the respondents claim for accrued wages in view of the respondents refusal to
reinstate the petitioners despite the final and executory nature of the reinstatement aspect of
its (LAs) May 31, 2005 decision. The LA noted that as of the December 18, 2007 CA
decision (that reversed the illegal dismissal findings of the LA), the petitioners accrued
wages amounted to P3,078,366.33.

In its July 16, 2008 resolution,16 the NLRC affirmed in toto the LAs March 13, 2008 order.
The NLRC afterwards denied the respondents motion for reconsideration for lack of merit.17

The respondents assailed the July 16, 2008 decision and September 29, 2009 resolution of
the NLRC via a petition for certiorari filed with the CA.

The CAs ruling

The CA granted the respondents petition.18 It reversed and set aside the July 16, 2008
decision and the September 29, 2009 resolution of the NLRC and remanded the case to the
Computation and Examination Unit of the NLRC for the proper computation of the
petitioners accrued wages, computed up to February 24, 2006.
The CA agreed that the reinstatement aspect of the LAs decision is immediately executory
even pending appeal, such that the employer is obliged to reinstate and pay the wages of
the dismissed employee during the period of appeal until the decision (finding the employee
illegally dismissed including the reinstatement order) is reversed by a higher court. Applying
this principle, the CA noted that the petitioners accrued wages could have been properly
computed until December 18, 2007, the date of the CAs decision finding the petitioners
validly dismissed.

The CA, however, pointed out that when the LAs decision is "reversed by a higher tribunal,
an employee may be barred from collecting the accrued wages if shown that the delay in
enforcing the reinstatement pending appeal was without fault" on the employers part. In this
case, the CA declared that the delay in the execution of the reinstatement order was not due
to the respondents unjustified act or omission. Rather, the petitioners refusal to comply with
the February 21, 2006 return-to-work Memorandum that the respondents issued and
personally delivered to them (the petitioners) prevented the enforcement of the
reinstatement order.

Thus, the CA declared that, given this peculiar circumstance (of the petitioners failure to
report for work), the petitioners accrued wages should only be computed until February 24,
2006 when they were supposed to report for work per the return-to-work Memorandum.
Accordingly, the CA reversed, for grave abuse of discretion, the NLRCs July 16, 2008
decision that affirmed the LAs order to release the garnished amount.

The Petition

The petitioners argue that the CA gravely erred when it ruled, contrary to Article 223,
paragraph 3 of the Labor Code, that the computation of their accrued wages stopped when
they failed to report for work on February 24, 2006. They maintain that the February 21,
2006 Memorandum was merely an afterthought on the respondents part to make it appear
that they complied with the LAs October 7, 2005 writ of execution. They likewise argue that
had the respondents really intended to have them report for work to comply with the writ of
execution, the respondents could and should have issued the Memorandum immediately
after the LA issued the first writ of execution. As matters stand, the respondents issued the
Memorandum more than four months after the issuance of this writ and only after the LA
issued the alias writ of execution on February 16, 2006.

Additionally, the petitioners direct the Courts attention to the several pleadings that the
respondents filed to prevent the execution of the reinstatement aspect of the LAs May 31,
2005 decision, i.e., the Opposition to the Issuance of the Writ of Execution, the Motion to
Quash the Writ of Execution and the Motion to Suspend the Order of Reinstatement. They
also point out that in all these pleadings, the respondents claimed that strained relationship
barred their (the petitioners) reinstatement, evidently confirming the respondents lack of
intention to reinstate them.
Finally, the petitioners point out that the February 21, 2006 Memorandum directed them to
report for work at Clark Field, Angeles, Pampanga instead of at the NAIA-Domestic Airport in
Pasay City where they had been assigned. They argue that this directive to report for work at
Clark Field violates Article 223, paragraph 3 of the Labor Code that requires the employees
reinstatement to be under the same terms and conditions prevailing prior to the dismissal.
Moreover, they point out that the respondents handed the Memorandum only to Pelaez, who
did not act in representation of the other petitioners, and only in the afternoon of February
23, 2006.

Thus, the petitioners claim that the delay in their reinstatement was in fact due to the
respondents unjustified acts and that the respondents never really complied with the LAs
reinstatement order.

The Case for the Respondents

The respondents counter, in their comment,19 that the issues that the petitioners raise in this
petition are all factual in nature and had already considered and explained in the CA
decision. In any case, the respondents maintain that the petitioners were validly dismissed
and that they complied with the LAs reinstatement order when it directed the petitioners to
report back to work, which directive the petitioners did not heed.

The respondents add that while the reinstatement of an employee found illegally dismissed
is immediately executory, the employer is nevertheless not prohibited from questioning this
rule especially when the latter has valid and legal reasons to oppose the employees
reinstatement. In the petitioners case, the respondents point out that their relationship had
been so strained that reinstatement was no longer possible. Despite this strained
relationship, the respondents point out that they still required the petitioners to report back to
work if only to comply with the LAs reinstatement order. Instead of reporting for work as
directed, the petitioners, however, insisted for a payroll reinstatement, which option the law
grants to them (the respondents) as employer. Also, contrary to the petitioners claim, the
Memorandum directed them to report at Clark Field, Pampanga only for a re-orientation of
their respective duties and responsibilities.

Thus, relying on the CAs ruling, the respondents claim that the delay in the petitioners
reinstatement was in fact due to the latters refusal to report for work after the issuance of
the February 21, 2006 Memorandum in addition to their strained relationship.

The Courts Ruling

We GRANT the petition.


Preliminary considerations: jurisdictional
limitations of the Courts Rule 45 review of
the CAs Rule 65 decision in labor cases

In a Rule 45 petition for review on certiorari, what we review are the legal errors that the CA
may have committed in the assailed decision, in contrast with the review for jurisdictional
errors that we undertake in an original certiorari action. In reviewing the legal correctness of
the CA decision in a labor case taken under Rule 65 of the Rules of Court, we examine the
CA decision in the context that it determined the presence or the absence of grave abuse of
discretion in the NLRC decision before it and not on the basis of whether the NLRC decision,
on the merits of the case, was correct. Otherwise stated, we proceed from the premise that
the CA undertook a Rule 65 review, not a review on appeal, of the NLRC decision
challenged before it. Within this narrow scope of our Rule 45 review, the question that we
ask is: Did the CA correctly determine whether the NLRC committed grave abuse of
discretion in ruling on the case?20

In addition, the Courts jurisdiction in a Rule 45 petition for review on certiorari is limited to
resolving only questions of law.

The present petition essentially raises the question whether the petitioners may recover
the accrued wages prior to the CAs reversal of the LAs May 31, 2005 decision. This is a
question of law that falls well within the Courts power in a Rule 45 petition.

Resolution of this question of law, however, is inextricably linked with the largely factual
issue of whether the accrued wages should be computed until December 17, 2008 when the
CA reversed the illegal dismissal findings of the LA or only until February 24, 2006 when the
petitioners were supposed to report for work per the February 21, 2006 Memorandum. In
either case, the determination of this factual issue presupposes another factual issue, i.e.,
whether the delay in the execution of the reinstatement order was due to the respondents
fault. As questions of fact, they are proscribed by our Rule 45 jurisdiction; we generally
cannot address these factual issues except to the extent necessary to determine whether
the CA correctly found the NLRC in grave abuse of discretion in affirming the release of the
garnished amount despite the respondents issuance of and the petitioners failure to comply
with the February 21, 2006 return-to-work Memorandum.

The jurisdictional limitations of our Rule 45 review of the CAs Rule 65 decision in labor
cases, notwithstanding, we resolve this petitions factual issues for we find legal errors in the
CAs decision. Our consideration of the facts taken within this narrow scope of our factual
review power convinced us, as our subsequent discussion will show, that no grave abuse of
discretion attended the NLRC decision.

Nature of the reinstatement aspect of the


LAs decision on a finding of illegal
dismissal

Article 223 (now Article 229)21 of the Labor Code governs appeals from, and the execution
of, the LAs decision. Pertinently, paragraph 3, Article 223 of the Labor Code provides:

Article 223. APPEAL

xxxx

In any event, the decision of the Labor Arbiter reinstating a dismissed or separated
employee, insofar as the reinstatement aspect is concerned, shall immediately be executory,
pending appeal. The employee shall either be admitted back to work under the same terms
and conditions prevailing prior to his dismissal or separation or, at the option of the employer,
merely reinstated in the payroll. The posting of a bond by the employer shall not stay the
execution for reinstatement provided herein. [Emphasis and underscoring supplied]

Under paragraph 3, Article 223 of the Labor Code, the LAs order for the reinstatement of an
employee found illegally dismissed is immediately executory even during pendency of the
employers appeal from the decision. Under this provision, the employer must reinstate the
employee either by physically admitting him under the conditions prevailing prior to his
dismissal, and paying his wages; or, at the employers option, merely reinstating the
employee in the payroll until the decision is reversed by the higher court.22 Failure of the
employer to comply with the reinstatement order, by exercising the options in the alternative,
renders him liable to pay the employees salaries.23

Otherwise stated, a dismissed employee whose case was favorably decided by the LA is
entitled to receive wages pending appeal upon reinstatement, which reinstatement is
immediately executory.24 Unless the appellate tribunal issues a restraining order, the LA is
duty bound to implement the order of reinstatement and the employer has no option but to
comply with it.25

Moreover, and equally worth emphasizing, is that an order of reinstatement issued by the LA
is self-executory, i.e., the dismissed employee need not even apply for and the LA need not
even issue a writ of execution to trigger the employers duty to reinstate the dismissed
employee.

In Pioneer Texturizing Corp. v. NLRC, et. al.,26 decided in 1997, the Court clarified once and
for all this self-executory nature of a reinstatement order. After tracing back the various Court
rulings interpreting the amendments introduced by Republic Act No. 671527 on the
reinstatement aspect of a labor decision under Article 223 of the Labor Code, the Court
concluded that to otherwise "require the application for and issuance of a writ of execution
as prerequisites for the execution of a reinstatement award would certainly betray and run
counter to the very object and intent of Article 223, i.e., the immediate execution of a
reinstatement order."28

In short, therefore, with respect to decisions reinstating employees, the law itself has
determined a sufficiently overwhelming reason for its immediate and automatic execution
even pending appeal.29 The employer is duty-bound to reinstate the employee, failing
which, the employer is liable instead to pay the dismissed employees salary. The Courts
consistent and prevailing treatment and interpretation of the reinstatement order as
immediately enforceable, in fact, merely underscores the right to security of tenure of
employees that the Constitution30 protects.

The employer is obliged to pay the


dismissed employees salary if he
refuses to reinstate until actual
reinstatement or reversal by a higher
tribunal; circumstances that may bar an
employee from receiving the accrued wages

As we amply discussed above, an employer is obliged to immediately reinstate the


employee upon the LAs finding of illegal dismissal; if the employer fails, it is liable to pay the
salary of the dismissed employee. Of course, it is not always the case that the LAs finding of
illegal dismissal is, on appeal by the employer, upheld by the appellate court. After the LAs
decision is reversed by a higher tribunal, the employers duty to reinstate the dismissed
employee is effectively terminated. This means that an employer is no longer obliged to keep
the employee in the actual service or in the payroll. The employee, in turn, is not required to
return the wages that he had received prior to the reversal of the LAs decision.31

The reversal by a higher tribunal of the LAs finding (of illegal dismissal), notwithstanding, an
employer, who, despite the LAs order of reinstatement, did not reinstate the employee
during the pendency of the appeal up to the reversal by a higher tribunal may still be held
liable for the accrued wages of the employee, i.e., the unpaid salary accruing up to the time
the higher tribunal reverses the decision.32 The rule, therefore, is that an employee may still
recover the accrued wages up to and despite the reversal by the higher tribunal. This
entitlement of the employee to the accrued wages proceeds from the immediate and self-
executory nature of the reinstatement aspect of the LAs decision.

By way of exception to the above rule, an employee may be barred from collecting the
accrued wages if shown that the delay in enforcing the reinstatement pending appeal was
without fault on the part of the employer. To determine whether an employee is thus barred,
two tests must be satisfied: (1) actual delay or the fact that the order of reinstatement
pending appeal was not executed prior to its reversal; and (2) the delay must not be due to
the employers unjustified act or omission. Note that under the second test, the delay must
be without the employers fault. If the delay is due to the employers unjustified refusal, the
employer may still be required to pay the salaries notwithstanding the reversal of the LAs
decision.33

Application of the two-fold test; the


petitioners are entitled to receive their
accrued salaries until December 18, 2007

As we earlier pointed out, the core issue to be resolved is whether the petitioners may
recover the accrued wages until the CAs reversal of the LAs decision. An affirmative answer
to this question will lead us to reverse the assailed CA decision for legal errors and reinstate
the NLRCs decision affirming the release of the garnished amount. Otherwise, we uphold
the CAs decision to be legally correct. To resolve this question, we apply the two-fold test.

First, the existence of delay - whether there was actual delay or whether the order of
reinstatement pending appeal was not executed prior to its reversal? We answer this test in
the affirmative.

To recall, on May 31, 2005, the LA rendered the decision finding the petitioners illegally
dismissed and ordering their immediate reinstatement. Per the records, the respondents
received copy of this decision on July 8, 2005. On August 20, 2005, the petitioners filed
before the LA a Motion for Issuance of Writ of Execution for their immediate reinstatement.
The LA issued the Writ of Execution on October 7, 2005. From the time the respondents
received copy of the LAs decision, and the issuance of the writ of execution, until the CA
reversed this decision on December 17, 2008, the respondents had not reinstated the
petitioners, either by actual reinstatement or in the payroll. This continued non-execution of
the reinstatement order in fact moved the LA to issue an alias writ of execution on February
16, 2006 and another writ of execution on April 24, 2007.

From these facts and without doubt, there was actual delay in the execution of the
reinstatement aspect of the LAs May 31, 2005 decision before it was reversed in the CAs
decision.

Second, the cause of the delay whether the delay was not due to the employers
unjustified act or omission. We answer this test in the negative; we find that the delay in the
execution of the reinstatement pending appeal was due to the respondents unjustified acts.

In reversing, for grave abuse of discretion, the NLRCs order affirming the release of the
garnished amount, the CA relied on the fact of the issuance of the February 21, 2006
Memorandum and of the petitioners failure to comply with its return-to-work directive. In
other words, with the issuance of this Memorandum, the CA considered the respondents as
having sufficiently complied with their obligation to reinstate the petitioners. And, the
subsequent delay in or the non-execution of the reinstatement order was no longer the
respondents fault, but rather of the petitioners who refused to report back to work despite
the directive.

Our careful consideration of the facts and the circumstances that surrounded the case
convinced us that the delay in the reinstatement pending appeal was due to the
respondents fault. For one, the respondents filed several pleadings to suspend the
execution of the LAs reinstatement order, i.e., the opposition to the petitioners motion for
execution filed on October 3, 2005; the motion to quash the October 7, 2005 writ of
execution with prayer to hold in abeyance the implementation of the reinstatement order;
and the motion to suspend the order for the petitioners reinstatement filed on February 28,
2006 after the LA issued the February 16, 2006 alias writ of execution. These pleadings, to
our mind, show a determined effort on the respondents part to prevent or suspend the
execution of the reinstatement pending appeal.

Another reason is that the respondents, contrary to the CAs conclusion, did not sufficiently
notify the petitioners of their intent to actually reinstate them; neither did the respondents
give them ample opportunity to comply with the return-to-work directive. We note that the
respondents delivered the February 21, 2006 Memorandum (requiring the petitioners to
report for work on February 24, 2006) only in the afternoon of February 23, 2006. Worse, the
respondents handed the notice to only one of the petitioners Pelaez who did not act in
representation of the others. Evidently, the petitioners could not reasonably be expected to
comply with a directive that they had no or insufficient notice of.

Lastly, the petitioners continuously and actively pursued the execution of the reinstatement
aspect of the LAs decision, i.e., by filing several motions for execution of the reinstatement
order, and motion to cite the respondents in contempt and re-computation of the accrued
wages for the respondents continued failure to reinstate them.

These facts altogether show that the respondents were not at all sincere in reinstating the
petitioners. These facts when taken together with the fact of delay reveal the
respondents obstinate resolve and willful disregard of the immediate and self-executory
nature of the reinstatement aspect of the LAs decision.

A further and final point that we considered in concluding that the delay was due to the
respondents fault is the fact that per the 2005 Revised Rules of Procedure of the NLRC
(2005 NLRC Rules),34 employers are required to submit a report of compliance within ten
(10) calendar days from receipt of the LAs decision, noncompliance with which signifies a
clear refusal to reinstate. Arguably, the 2005 NLRC Rules took effect only on January 7,
2006; hence, the respondents could not have been reasonably expected to comply with this
duty that was not yet in effect when the LA rendered its decision (finding illegal dismissal)
and issued the writ of execution in 2005. Nevertheless, when the LA issued the February 16,
2006 alias writ of execution and the April 24, 2007 writ of execution, the 2005 NLRC Rules
was already in place such that the respondents had become duty-bound to submit the
required compliance report; their noncompliance with this rule all the more showed a clear
and determined refusal to reinstate.

All told, under the facts and the surrounding circumstances, the delay was due to the acts of
the respondents that we find were unjustified. We reiterate and emphasize, Article 223,
paragraph 3, of the Labor Code mandates the employer to immediately reinstate the
dismissed employee, either by actually reinstating him/her under the conditions prevailing
prior to the dismissal or, at the option of the employer, in the payroll. The respondents' failure
in this case to exercise either option rendered them liable for the petitioners' accrued salary
until the LA decision was reversed by the CA on December 17, 2008. We, therefore, find that
the NLRC, in affirming the release of the garnished amount, merely implemented the
mandate of Article 223; it simply recognized as immediate and self-executory the
reinstatement aspect of the LA's decision.

Accordingly, we reverse for legal errors the CA decision.1wphi1 We find no grave abuse of
discretion attended the NLRC's July 16, 2008 resolution that affirmed the March 13, 2008
decision of the LA granting the release of the garnished amount.

WHEREFORE, in light of these considerations, we hereby GRANT the petition. We


REVERSE and SET ASIDE the September 30, 2010 decision and the January 13, 2011
resolution of the Court of Appeals (CA) in CA-G.R. Sp No. 112011. Accordingly, we
REINSTATE the July 16, 2008 decision of the National Labor Relations Commission (NLRC)
affirming the March 13, 2008 order of the Labor Arbiter in NLRC Case No. 00-04-05469-
2004.

Costs against the respondents South East Asian Airlines and Irene Dornier.

SO ORDERED.

FIRST DIVISION

G.R. No. 161006, October 14, 2015

ROGELIO BARONDA, Petitioner, v. HON. COURT OF APPEALS, AND HIDECO SUGAR


MILLING CO., INC., Respondents.

DECISION
BERSAMIN, J.:

The reinstatement aspect of the Voluntary Arbitrator's award or decision is immediately


executory from its receipt by the parties.

The Case

The petitioner assails the decision1 promulgated on August 21, 2003 in CA-G.R. SP No.
67059, whereby the Court of Appeals (CA) annulled and set aside the order issued by the
Voluntary Arbitrator2 granting his motion for the issuance of the writ of execution.
Antecedents

Respondent Hideco Sugar Milling Co., Inc. (HIDECO) employed the petitioner as a mud
press truck driver with a daily salary of P281.00. On May 1, 1998, he hit HIDECO's
transmission lines while operating a dump truck, causing a total factory blackout from 9:00
pm until 2:00 am of the next day. Power was eventually restored but the restoration cost
HIDECO damages totaling P26,481.11. Following the incident, HIDECO served a notice of
offense requiring him to explain the incident within three days from notice. He complied.
Thereafter, the management conducted its investigation, and, finding him guilty of
negligence, recommended his dismissal.4 On June 15, 1998, the resident manager served a
termination letter and informed him of the decision to terminate his employment effective at
the close of office hours of that day. Hence, HIDECO no longer allowed him to report to work
on the next day.

In August 1998, the petitioner, along with another employee also dismissed by HIDECO, filed
in the Office of the Voluntary Arbitrator of the National Conciliation and Mediation Board in
Tacloban City a complaint for illegal dismissal against HIDECO.

Voluntary Arbitrator Antonio C. Lopez, Jr. handled the case and eventually rendered his
decision on January 13, 1999 by finding the petitioner's dismissal illegal, and ordering his
reinstatement. Voluntary Arbitrator Lopez, Jr. deemed the petitioner's separation from the
service from June 16, 1998 to January 15, 1999 as a suspension from work without pay, and
commanded him to pay on installment basis the damages sustained by HIDECO from the
May 1, 1998 incident he had caused,6 to wit:
Wherefore, in so far as the case of ROGELIO BARONDA is concerned, this Office finds his
dismissal illegal and reinstatement is therefore ordered. His separation on June 16, 1998 up
to January 15, 1999 is deemed suspension without pay for his negligent acts, and is further
ordered to pay respondent employer the sum of P26,484.41 for actual damages at
P1,500.00 every month deductible from his salary until complete payment is made.
HIDECO filed a motion for reconsideration,8 but the Voluntary Arbitrator denied the motion
on August 11, 2000.9 Accepting the outcome, HIDECO reinstated the petitioner on
September 29, 2000.

Thereafter, on October 9, 2000, the petitioner filed his manifestation with motion for the
issuance of the writ of execution in the Office of the Voluntary Arbitrator,11 praying for the
execution of the decision, and insisting on being entitled to backwages and other benefits
corresponding to the period from January 16, 1999 up to September 28, 2000 totaling
P192,268.66 based on Article 279 of the Labor Code ("An employee who is unjustly
dismissed from work shall be entitled to reinstatement without loss of seniority rights and
other privileges and to his full backwages, inclusive of allowances, and to his other benefits
or their monetary equivalent computed from the time his compensation was withheld from
him up to the time of his actual reinstatement'').

HIDECO opposed the petitioner's motion for execution,12 and simultaneously presented its
own motion for execution to enforce the decision of the Voluntary Arbitrator directing the
petitioner to pay the actual damages totaling P26,484.41 at the rate of P1,500.00/month
deductible from his salary starting in January 2001 until complete payment was made.13
In his order dated March 20, 2001,14 the Voluntary Arbitrator denied the petitioner's motion
for execution on the ground that the decision did not award any backwages; and granted
HIDECO's motion for execution by directing the petitioner to pay HIDECO P26,484.41 at the
rate of P1,500.00/month.

On May 17, 2001, the petitioner filed another motion for execution praying that a writ of
execution requiring HIDECO to pay to him unpaid wages, 13th month pay and bonuses from
January 16, 2001, the date when his reinstatement was effected, until his actual
reinstatement.15 HIDECO opposed the petitioner's second motion for execution because
"the items prayed for by the complainant in his Motion for Issuance of Writ of Execution are
not included in the dispository portion of the decision of the voluntary arbitrator, neither are
the said items mentioned in any part of the same decision."16

On July 25, 2001, however, the Voluntary Arbitrator granted the petitioner's second motion
for execution,17 to wit:

Wherefore, for failure of complainant to re-admit complainant nor reinstate him in the payroll
for the period from January 21, [1999] up to September 28, 2000, let an order or execution
issue for the satisfaction of his reinstatement wages in the amount of P155,647.00 (554 days
at P281.00 per day), 13 month pay in the amount of P7,200.00, bonus in the amount of
P8,000.00 for 1999, and P8,000.00 for his signing bonus.
The sheriff of the National Labor Relations Commission, Regional Arbitration Branch No. VIII
is directed to implement the writ.

So ordered.

The Voluntary Arbitrator cited as basis Article 223 of the Labor Code, which pertinently
provides:

Art. 223. Appeal -

xxxx

In any event, the decision of the Labor Arbiter reinstating a dismissed or separated
employee, insofar as the reinstatement aspect is concerned, shall immediately be executory,
even pending appeal. The employee shall either be admitted back to work under the same
terms and conditions prevailing prior to his dismissal or separation or, at the option of the
employer, merely reinstated in the payroll. The posting of a bond by the employer shall not
stay the execution for reinstatement provided herein.

Having received a copy of the order of July 25, 2001 on August 7, 2001,18 HIDECO
instituted a special civil action for certiorari in the Court of Appeals (CA) on October 2,
2001.19

Decision of the CA

HIDECO's petition for certiorari averred that the Voluntary Arbitrator had acted with grave
abuse of discretion amounting to lack or excess of jurisdiction in issuing the July 25, 2001
order. It listed the following issues, namely:

I. The voluntary arbitrator, in rendering the assailed order actually granted an award without
giving due process to the herein petitioner.20

II. The voluntary arbitrator resolved the (second) motion by applying Art. 223 of the Labor
Code. Was this the correct law to apply under the circumstances? Did he have jurisdiction to
apply this law?21

III. The decision dated January 13, 1999 clearly stated the relief that had been granted to the
complainant Baronda, which was reinstatement. Baronda was reinstated on September 29,
2000, thus [HIDECO] had complied with the decision. The questions therefore: Could a relief
that is not written in the decision be executed? Since the voluntary arbitrator clearly did this
in this case, is it not correct to say that he committed grave abuse of discretion?22

IV. In the assailed Order dated July 25, 2001 the Voluntary Arbitrator said, among others,
that it treated a second motion for the issuance of a writ of execution, and that a first motion
had already been denied on the ground that no backwages had been awarded to the
complainant Baronda. Did he have any legal basis then to issue two different and
contradictory orders for what are essentially similar motions?

In his comment,24 the petitioner countered that the petition for certiorari should be
dismissed considering that HIDECO should have appealed the decision of the Voluntary
Arbitrator under Rule 43 of the Rules of Court because certiorari was not a substitute for a
lost appeal; that HIDECO did not file a motion for reconsideration of the questioned order,
which would have been an adequate remedy at law; that the petition for certiorari did not
raise any jurisdictional error on the part of the Voluntary Arbitrator but only factual and legal
issues not proper in certiorari; and that the Voluntary Arbitrator did not commit any error,
much less grave abuse of discretion amounting to lack or excess of jurisdiction in rendering
the questioned order.

In the decision promulgated on August 21, 2003,25 the CA treated HIDECO's petition for
certiorari as a petition for review brought under Rule 43, and brushed aside the matters
raised by the petitioner. It observed that the petition for certiorari included the contents
required by Section 6, Rule 43 for the petition for review; that the writ of execution was
proper only when the decision to be executed carried an award in favor of the movant; that
the Voluntary Arbitrator had issued the writ of execution for backwages despite his decision
lacking such award for backwages; and that the reliance by the Voluntary Arbitrator on Article
223 of the Labor Code was misplaced because said provision referred to decisions, awards
or orders of the Labor Arbiter, not the Voluntary Arbitrator. It disposed as follows:

WHEREFORE, the instant petition is hereby GRANTED and the questioned Order dated
July 25, 2001 of the public respondent ANNULLED and SET ASIDE.

SO ORDERED.26

Issues

In this appeal, the petitioner submits the following issues,27 namely

I.
THE HONORABLE COURT OF APPEALS COMMITTED AN ERROR OF LAW WHEN IT
CONSIDERED THE PETITION FOR CERTIORARI FILED BY PRIVATE RESPONDENT AS
ONE FILED UNDER RULE 43 OF THE RULES OF COURT WHEN SAID PETITION
EXPRESSLY DECLARED THAT IT WAS FILED UNDER RULE 65 OF THE RULES OF
COURT. EVEN GRANTING FOR THE SAKE OF ARGUMENT THAT SAID PETITION
COULD BE CONSIDERED AS FILED UNDER RULE 43 OF THE RULES OF COURT, THE
HONORABLE COURT OF APPEALS COMMITTED AN ERROR OF LAW IN NOT
CONSIDERING THAT IT WAS FILED OUT OF TIME.

II.

THE HONORABLE COURT OF APPEALS COMMITTED AN ERROR OF LAW WHEN IT


DID NOT DISMISS THE PETITION FILED BY THE PRIVATE RESPONDENT FOR NOT
HAVING PREVIOUSLY FILED A MOTION FOR RECONSIDERATION BEFORE
RESORTING TO THE PETITION FOR CERTIORARI.

III.

THE HONORABLE COURT OF APPEALS COMMITTED AN ERROR OF LAW WHEN IT


CONSIDERED THE WRIT OF EXECUTION AS ISSUED FOR THE SATISFACTION OF
BACKWAGES INSTEAD OF FOR REINSTATEMENT WAGES.

IV.

THE HONORABLE COURT OF APPEALS COMMITTED AN ERROR OF LAW AND


SANCTIONED A VIOLATION OF THE EQUAL PROTECTION OF THE LAWS WHEN IT
RULED THAT THE REINSTATEMENT ASPECT OF THE DECISION OF THE VOLUNTARY
ARBITRATOR IS NOT IMMEDIATELY EXECUTORY.
V.

THE HONORABLE COURT OF APPEALS COMMITTED AN ERROR OF LAW WHEN IT


DECLARED THAT PRIVATE RESPONDENT WAS DENIED DUE PROCESS OF LAW.

In other words, the decisive issues for consideration and resolution are: (a) whether or not
the CA erred in granting HIDECO's petition for certiorari despite its procedural flaws; and (b)
whether or not the reinstatement aspect of the Voluntary Arbitrator's decision was executory
pending appeal.
Ruling
The appeal is meritorious.

I
HIDECO's proper recourse was to appeal
by petition for review; hence, the CA erred
in granting HIDECO's petition for certiorari

The order issued on July 25, 2001 by the Voluntary Arbitrator, albeit directing the execution
of the award or decision of January 13, 1999, was a final order, as contrasted from a merely
interlocutory order, because its issuance left nothing more to be done or taken by the
Voluntary Arbitrator in the case.28 It thus completely disposed of what the reinstatement of
the petitioner as ordered by the Voluntary Arbitrator in the award or decision of January 13,
1999 signified.

The proper remedy from such order was to appeal to the CA by petition for review under
Rule 43 of the Rules of Court, whose Section 1 specifically provides:

Section 1. Scope. - This Rule shall apply to appeals from judgments or final orders of the
Court of Tax Appeals and from awards, judgments, final orders or resolutions of or
authorized by any quasi-judicial agency in the exercise of its quasi-judicial functions. Among
these agencies are the Civil Service Commission, Central Boards of Assessment Appeals,
Securities and Exchange Commission, Office of the President, Land Registration Authority,
Social Security Commission, Civil Aeronautics Board, Bureau of Patents, Trademarks and
Technology Transfer, National Electrification Administration, Energy Regulation Board,
National Telecommunications Commission, Department of Agrarian Reform under Republic
Act No. 6657, Government Service Insurance System, Employees Compensation
Commission, Agricultural Inventions Board, Insurance Commission, Philippine Atomic
Energy Commission, Board of Investments, Construction Industry Arbitration Commission,
and voluntary arbitrators authorized by law.

The period of appeal was 10 days from receipt of the copy of the order of July 25, 2001 by
the parties. It is true that Section 4 of Rule 43 stipulates that the appeal shall be taken within
15 days from notice of the award, judgment, final order or resolution, or from the date of its
last publication, if publication is required by law for its effectivity, or of the denial of the
petitioner's motion for new trial or reconsideration duly filed in accordance with the governing
law of the court or agency a quo. However, Article 262-A of the Labor Code, the relevant
portion of which follows, expressly states that the award or decision of the Voluntary
Arbitrator shall be final and executory after 10 calendar days from receipt of the copy of the
award or decision by the parties, viz.:
Art. 262-A. Procedures. -

xxxx

The award or decision of the Voluntary Arbitrator or panel of Voluntary Arbitrators shall
contain the facts and the law on which it is based. It shall be final and executory after ten
(10) calendar days from receipt of the copy of the award or decision by the parties.

Upon motion of any interested party, the Voluntary Arbitrator or panel of Voluntary Arbitrators
or the Labor Arbiter in the region where the movant resides, in case of the absence or
incapacity of the Voluntary Arbitrator or panel of Voluntary Arbitrators for any reason, may
issue a writ of execution requiring either the sheriff of the Commission or regular courts or
any public official whom the parties may designate in the submission agreement to execute
the final decision, order or award. (Emphasis supplied)

On account of Article 262-A of the Labor Code, the period to appeal was necessarily 10 days
from receipt of the copy of the award or decision of the Voluntary Arbitrator or panel of
Voluntary Arbitrators; otherwise, the order of July 25, 2001 would become final and
immutable, because only a timely appeal or motion for reconsideration could prevent the
award or decision from attaining finality and immutability.

Yet, HIDECO filed the petition for certiorari, not a petition for review under Rule 43, and the
CA liberally treated the petition for certiorari as a petition for review under Rule 43.

We hold that such treatment by the CA was procedurally unwarranted.

To begin with, even if the error sought to be reviewed concerned grave abuse of discretion
on the part of the Voluntary Arbitrator,29 the remedy was an appeal in due course by filing
the petition for review within 10 days from notice of the award or decision. This was because
certiorari, as an extraordinary remedy, was available only when there was no appeal, or any
plain, speedy and adequate remedy in the ordinary course of law.30 In other words, the
justification for HIDECO's resort to the extraordinary equitable remedy of certiorari did not
exist due to the availability of appeal, or other ordinary remedies in law to which HIDECO as
the aggrieved party could resort.

Although it is true that certiorari cannot be a substitute for a lost appeal, and that either
remedy was not an alternative of the other, we have at times permitted the resort to certiorari
despite the availability of appeal, or of any plain speedy and adequate remedy in the
ordinary course of law in exceptional situations, such as: (1) when the remedy of certiorari is
necessary to prevent irreparable damages and injury to a party; (2) where the trial judge
capriciously and whimsically exercised his judgment; (3) where there may be danger of a
failure of justice; (4) where appeal would be slow, inadequate and insufficient; (5) where the
issue raised is one purely of law; (6) where public interest is involved; and (7) in case of
urgency.31 Verily, as pointed out in Jaca v. Davao Lumber Company,32 the availability of the
ordinary course of appeal does not constitute sufficient ground to prevent a party from
making use of certiorari where the appeal is not an adequate remedy or equally beneficial,
speedy and sufficient; for it is inadequacy, not the mere absence of all other legal remedies
and the danger of failure of justice without the writ that must usually determine the propriety
of certiorari. It is nonetheless necessary in such exceptional situations for the petitioner to
make a strong showing in such situations that the respondent judicial or quasi-judicial official
or tribunal lacked or exceeded its jurisdiction, or gravely abused its discretion amounting to
lack or excess of jurisdiction.

HIDECO did not establish that its case came within any of the aforestated exceptional
situations.

And, secondly, HIDECO filed the petition for certiorari on October 2, 2001. Even assuming,
as the CA held, that the petition for certiorari contained the matters required by Rule 43,
such filing was not timely because 56 days had already lapsed from HIDECO's receipt of the
denial by the Voluntary Arbitrator of the motion for reconsideration. In short, HIDECO had
thereby forfeited its right to appeal. We have always emphasized the nature of appeal as a
merely statutory right for the aggrieved litigant, and such nature requires the strict
observance of all the rules and regulations as to the manner of its perfection and as to the
time of its taking. Whenever appeal is belatedly resorted to, therefore, the litigant forfeits the
right to appeal, and the higher court ipso facto loses the authority to review, reverse, modify
or otherwise alter the judgment. The loss of such authority is jurisdictional, and renders the
adverse judgment both final and immutable.

II
Voluntary Arbitrator's order of reinstatement of
the petitioner was immediately executory

The next query is whether the order of reinstatement of the petitioner by the Voluntary
Arbitrator was immediately executory or not.

We answer the query in the affirmative. Although the timely filing of a motion for
reconsideration or of an appeal forestalls the finality of the decision or award of the Voluntary
Arbitrator,33 the reinstatement aspect of the Voluntary Arbitrator's decision or award remains
executory regardless of the filing of such motion for reconsideration or appeal.

The immediate reinstatement of the employee pending the appeal has been introduced by
Section 12 of Republic Act No. 6715, which amended Article 223 of the Labor Code, to wit:
SEC. 12. Article 223 of the same code is amended to read as follows:

Art. 223. Appeal. -

xxxx

In any event, the decision of the Labor Arbiter reinstating a dismissed or separated
employee, in so far as the reinstatement aspect is concerned, shall immediately be
executory, even pending appeal. The employee shall either be admitted back to work under
the same terms and conditions prevailing prior to his dismissal or separation or, at the option
of the employer, merely reinstated in the payroll. The posting of a bond by the employer shall
not stay the execution for reinstatement provided herein, (bold underscoring supplied for
emphasis)

The normal consequences of a finding that an employee was illegally dismissed are, firstly,
that the employee becomes entitled to reinstatement to his former position without loss of
seniority rights; and, secondly, the payment of wages corresponding to the period from his
illegal dismissal up to the time of actual reinstatement. These two consequences give
meaning and substance to the constitutional right of labor to security of tenure.34
Reinstatement pending appeal thus affirms the constitutional mandate to protect labor and to
enhance social justice, for, as the Court has said in Aris (Phil.) Inc. v. National Labor
Relations Commission:35

In authorizing execution pending appeal of the reinstatement aspect of a decision of a Labor


Arbiter reinstating a dismissed or separated employee, the law itself has laid down a
compassionate policy which, once more, vivifies and enhances the provisions of the 1987
Constitution on labor and the working-man.

xxxx

These duties and responsibilities of the State are imposed not so much to express sympathy
for the workingman as to forcefully and meaningfully underscore labor as a primary social
and economic force, which the Constitution also expressly affirms with equal intensity. Labor
is an indispensable partner for the nation's progress and stability.

If in ordinary civil actions execution of judgment pending appeal is authorized for reasons the
determination of which is merely left to the discretion of the judge, We find no plausible
reason to withhold it in cases of decisions reinstating dismissed or separated employees. In
such cases, the poor employees had been deprived of their only source of livelihood, their
only means of support for their family their lifeblood. To Us, this special circumstance is far
better than any other which a judge, in his sound discretion, may determine. In short, with
respect to decisions reinstating employees, the law itself has determined sufficiently
overwhelming reason for its execution pending appeal.

x x x Then, by and pursuant to the same power (police power), the State may authorize an
immediate implementation, pending appeal, of a decision reinstating a dismissed or
separated employee since that saving act is designed to stop, although temporarily since the
appeal may be decided in favor of the appellant, a continuing threat or danger to the survival
or even the life of the dismissed or separated employee and its family.36

We also see no reason to obstruct the reinstatement decreed by the Voluntary Arbitrator, or
to treat it any less than the reinstatement that is ordered by the Labor Arbiter. Voluntary
arbitration really takes precedence over other dispute settlement devices. Such primacy of
voluntary arbitration is mandated by no less than the Philippine Constitution,37 and is
ingrained as a policy objective of our labor relations law.38 The reinstatement order by the
Voluntary Arbitrator should have the same authority, force and effect as that of the
reinstatement order by the Labor Arbiter not only to encourage parties to settle their disputes
through this mode, but also, and more importantly, to enforce the constitutional mandate to
protect labor, to provide security of tenure, and to enhance social justice.

The 2001 Procedural Guidelines in the Execution of Voluntary Arbitration Awards/Decisions


(Guidelines), albeit not explicitly discussing the executory nature of the reinstatement order,
seems to align with the Court's stance by punishing the noncompliance by a party of the
decision or order for reinstatement. Section 2, Rule III of the Guidelines states:

Sec. 2. Issuance, Form and Contents of a Writ of Execution. -

xxxx

b) If the execution be for the reinstatement of any person to any position, office or
employment, such writ shall be served by the sheriff upon the losing party or in case of death
of the losing party upon his successor-in-interest, executor or administrator and such party
or person may be punished for contempt if he disobeys such decision or order for
reinstatement. (bold underscoring supplied for emphasis)

The 2005 NCMB Revised Procedural Guidelines in the Conduct of Voluntary Arbitration
Proceedings also supports this Court's position, for Section 6 of its Rule VIII reads:

Sec. 6. Effect of Filing of Petition for Ceriiorari on Execution. The filing of a petition for
certiorari with the Court of Appeals or the Supreme Court shall not stay the execution of the
assailed decision unless a temporary restraining order or injunction is issued by the Court of
Appeals or the Supreme Court pending resolution of such petition.(Emphasis Ours)

We declare, therefore, that the reinstatement decreed by the Voluntary Arbitrator was
immediately executory upon the receipt of the award or decision by the parties.

WHEREFORE, the Court GRANTS the petition for review on certiorari; REINSTATES the
order dated July 25, 2001 of the Voluntary Arbitrator; and ORDERS respondent Hideco
Sugar Milling Co., Inc. to pay the costs of suit.

SO ORDERED.

SECOND DIVISION

G.R. No. 180962 February 26, 2014

PIDLTRANCO SERVICE ENTERPRISES, INC., represented by its Vice-President for


Administration, M/GEN. NEMESIO M. SIGAYA, Petitioner,
vs.
PHILTRANCO WORKERS UNION-ASSOCIATION OF GENUINE LABOR
ORGANIZATIONS (PWU-AGLO), represented by JOSE JESSIE OLIVAR, Respondent.

DECISION

DEL CASTILLO, J.:

While a government office1 may prohibit altogether the filing of a motion for reconsideration
with respect to its decisions or orders, the fact remains that certiorari inherently requires the
filing of a motion for reconsideration, which is the tangible representation of the opportunity
given to the office to correct itself. Unless it is filed, there could be no occasion to rectify.
Worse, the remedy of certiorari would be unavailing. Simply put, regardless of the
proscription against the filing of a motion for reconsideration, the same may be filed on the
assumption that rectification of the decision or order must be obtained, and before a petition
for certiorari may be instituted.
This Petition for Review on Certiorari2 seeks a review and setting aside of the September
20, 2007 Resolution3 of the Court of Appeals (CA) in CA-G.R. SP No. 100324,4 as well as
its December 14, 2007 Resolution5 denying petitioners Motion for Reconsideration.

Factual Antecedents

On the ground that it was suffering business losses, petitioner Philtranco Service
Enterprises, Inc., a local land transportation company engaged in the business of carrying
passengers and freight, retrenched 21 of its employees. Consequently, the company union,
herein private respondent Philtranco Workers Union-Association of Genuine Labor
Organizations (PWU-AGLU), filed a Notice of Strike with the Department of Labor and
Employment (DOLE), claiming that petitioner engaged in unfair labor practices. The case
was docketed as NCMB-NCR CASE No. NS-02-028-07.

Unable to settle their differences at the scheduled February 21, 2007 preliminary conference
held before Conciliator-Mediator Amorsolo Aglibut (Aglibut) of the National Conciliation and
Mediation Board (NCMB), the case was thereafter referred to the Office of the Secretary of
the DOLE (Secretary of Labor), where the case was docketed as Case No. OS-VA-2007-
008.

After considering the parties respective position papers and other submissions, Acting
DOLE Secretary Danilo P. Cruz issued a Decision6 dated June 13, 2007, the dispositive
portion of which reads, as follows:

WHEREFORE, premises considered, we hereby ORDER Philtranco to:

1. REINSTATE to their former positions, without loss of seniority rights, the ILLEGALLY
TERMINATED 17 "union officers", x x x, and PAY them BACKWAGES from the time of
termination until their actual or payroll reinstatement, provided in the computation of
backwages among the seventeen (17) who had received their separation pay should deduct
the payments made to them from the backwages due them.

2. MAINTAIN the status quo and continue in full force and effect the terms and conditions of
the existing CBA specifically, Article VI on Salaries and Wages (commissions) and Article
XI, on Medical and Hospitalization until a new agreement is reached by the parties; and

3. REMIT the withheld union dues to PWU-AGLU without unnecessary delay.

The PARTIES are enjoined to strictly and fully comply with the provisions of the existing CBA
and the other dispositions of this Decision.
SO ORDERED.7

Petitioner received a copy of the above Decision on June 14, 2007. It filed a Motion for
Reconsideration on June 25, 2007, a Monday. Private respondent, on the other hand,
submitted a "Partial Appeal."

In an August 15, 2007 Order8 which petitioner received on August 17, 2007, the Secretary of
Labor declined to rule on petitioners Motion for Reconsideration and private respondents
"Partial Appeal", citing a DOLE Regulation9 which provided that voluntary arbitrators
decisions, orders, resolutions or awards shall not be the subject of motions for
reconsideration. The Secretary of Labor held:

WHEREFORE, the complainants and the respondents respective pleadings are hereby
NOTED as pleadings that need not be acted upon for lack of legal basis.

SO ORDERED.10

The Assailed Court of Appeals Resolutions

On August 29, 2007, petitioner filed before the CA an original Petition for Certiorari and
Prohibition, and sought injunctive relief, which case was docketed as CA-G.R. SP No.
100324.

On September 20, 2007, the CA issued the assailed Resolution which decreed as follows:

WHEREFORE, premises considered, the instant Petition for Certiorari and Prohibition with
Prayer for Temporary Restraining Order and Preliminary Injunction is hereby DISMISSED.
Philtrancos pleading entitled "Reiterating Motion for The Issuance of Writ of Preliminary
Injunction and/or Temporary Restraining Order" is NOTED.

SO ORDERED.11

The CA held that, in assailing the Decision of the DOLE voluntary arbitrator, petitioner erred
in filing a petition for certiorari under Rule 65 of the 1997 Rules, when it should have filed a
petition for review under Rule 43 thereof, which properly covers decisions of voluntary labor
arbitrators.12 For this reason, the petition is dismissible pursuant to Supreme Court Circular
No. 2-90.13 The CA added that since the assailed Decision was not timely appealed within
the reglementary 15-day period under Rule 43, the same became final and executory.
Finally, the appellate court ruled that even assuming for the sake of argument that certiorari
was indeed the correct remedy, still the petition should be dismissed for being filed out of
time. Petitioners unauthorized Motion for Reconsideration filed with the Secretary of Labor
did not toll the running of the reglementary 60-day period within which to avail of certiorari;
thus, from the time of its receipt of Acting Labor Secretary Cruzs June 13, 2007 Decision on
June 14 or the following day, petitioner had until August 13 to file the petition yet it filed the
same only on August 29.

Petitioner filed a Motion for Reconsideration, which was denied by the CA through the
second assailed December 14, 2007 Resolution. In denying the motion, the CA held that the
fact that the Acting Secretary of Labor rendered the decision on the voluntary arbitration
case did not remove the same from the jurisdiction of the NCMB, which thus places the case
within the coverage of Rule 43.

Issues

In this Petition,14 the following errors are assigned:

THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE PETITIONER


AVAILED OF THE ERRONEOUS REMEDY IN FILING A PETITION FOR CERTIORARI
UNDER RULE 65 INSTEAD OF UNDER RULE 43 OF THE RULES OF COURT.

THE HONORABLE COURT OF APPEALS ERRED WHEN IT HELD THAT THE PETITION
FOR CERTIORARI WAS FILED OUT OF TIME.

THE HONORABLE COURT OF APPEALS ERRED WHEN IT DISMISSED THE PETITION


OUTRIGHT ON THE BASIS OF PURE TECHNICALITY.15

Petitioners Arguments

In its Petition and Reply,16 petitioner argues that a petition for certiorari under Rule 65 and
not a petition for review under Rule 43 is the proper remedy to assail the June 13, 2007
Decision of the DOLE Acting Secretary, pointing to the Courts pronouncement in National
Federation of Labor v. Hon. Laguesma17 that the remedy of an aggrieved party against the
decisions and discretionary acts of the NLRC as well as the Secretary of Labor is to timely
file a motion for reconsideration, and then seasonably file a special civil action for certiorari
under Rule 65 of the 1997 Rules of Civil Procedure.
Petitioner adds that, contrary to the CAs ruling, NCMB-NCR CASE No. NS-02-028-07 is not
a simple voluntary arbitration case. The character of the case, which involves an impending
strike by petitioners employees; the nature of petitioners business as a public transportation
company, which is imbued with public interest; the merits of its case; and the assumption of
jurisdiction by the Secretary of Labor all these circumstances removed the case from the
coverage of Article 262,18 and instead placed it under Article 263,19 of the Labor Code.
Besides, Rule 43 does not apply to judgments or final orders issued under the Labor
Code.20

On the procedural issue, petitioner insists that it timely filed the Petition for Certiorari with the
CA, arguing that Rule 65 fixes the 60-day period within which to file the petition from notice
of the denial of a timely filed motion for reconsideration, whether such motion is required or
not. It cites the Courts pronouncement in ABS-CBN Union Members v. ABS-CBN
Corporation21 that "before a petition for certiorari under Rule 65 of the Rules of Court may
be availed of, the filing of a motion for reconsideration is a condition sine qua non to afford
an opportunity for the correction of the error or mistake complained of" and since "a decision
of the Secretary of Labor is subject to judicial review only through a special civil action of
certiorari x x x [it] cannot be resorted to without the aggrieved party having exhausted
administrative remedies through a motion for reconsideration".

Respondents Arguments

In its Comment,22 respondent argues that the Secretary of Labor decided Case No. OS-VA-
2007-008 in his capacity as voluntary arbitrator; thus, his decision, being that of a voluntary
arbitrator, is only assailable via a petition for review under Rule 43. It further echoes the CAs
ruling that even granting that certiorari was the proper remedy, the same was filed out of
time as the filing of a motion for reconsideration, which was an unauthorized pleading, did
not toll the running of the 60-day period. Finally, it argues that on the merits, petitioners case
could not hold water as it failed to abide by the requirements of law in effecting a
retrenchment on the ground of business losses.

Our Ruling

The Court grants the Petition.

It cannot be said that in taking cognizance of NCMB-NCR CASE No. NS-02-028-07, the
Secretary of Labor did so in a limited capacity, i.e., as a voluntary arbitrator. The fact is
undeniable that by referring the case to the Secretary of Labor, Conciliator-Mediator Aglibut
conceded that the case fell within the coverage of Article 263 of the Labor Code; the
impending strike in Philtranco, a public transportation company whose business is imbued
with public interest, required that the Secretary of Labor assume jurisdiction over the case,
which he in fact did. By assuming jurisdiction over the case, the provisions of Article 263
became applicable, any representation to the contrary or that he is deciding the case in his
capacity as a voluntary arbitrator notwithstanding.
It has long been settled that the remedy of an aggrieved party in a decision or resolution of
the Secretary of Labor is to timely file a motion for reconsideration as a precondition for any
further or subsequent remedy, and then seasonably file a special civil action for certiorari
under Rule 65 of the 1997 Rules on Civil Procedure.23 There is no distinction: when the
Secretary of Labor assumes jurisdiction over a labor case in an industry indispensable to
national interest, "he exercises great breadth of discretion" in finding a solution to the parties
dispute.24 "[T]he authority of the Secretary of Labor to assume jurisdiction over a labor
dispute causing or likely to cause a strike or lockout in an industry indispensable to national
interest includes and extends to all questions and controversies arising therefrom. The
power is plenary and discretionary in nature to enable him to effectively and efficiently
dispose of the primary dispute."25 This wide latitude of discretion given to the Secretary of
Labor may not be the subject of appeal.

Accordingly, the Secretary of Labors Decision in Case No. OS-VA-2007-008 is a proper


subject of certiorari, pursuant to the Courts pronouncement in National Federation of Labor
v. Laguesma,26 thus:

Though appeals from the NLRC to the Secretary of Labor were eliminated, presently there
are several instances in the Labor Code and its implementing and related rules where an
appeal can be filed with the Office of the Secretary of Labor or the Secretary of Labor issues
a ruling, to wit:

xxxx

(6) Art. 263 provides that the Secretary of Labor shall decide or resolve the labor dispute
[over] which he assumed jurisdiction within thirty (30) days from the date of the assumption
of jurisdiction. His decision shall be final and executory ten (10) calendar days after receipt
thereof by the parties.

From the foregoing we see that the Labor Code and its implementing and related rules
generally do not provide for any mode for reviewing the decision of the Secretary of Labor. It
is further generally provided that the decision of the Secretary of Labor shall be final and
executory after ten (10) days from notice. Yet, like decisions of the NLRC which under Art.
223 of the Labor Code become final after ten (10) days, decisions of the Secretary of Labor
come to this Court by way of a petition for certiorari even beyond the ten-day period provided
in the Labor Code and the implementing rules but within the reglementary period set for Rule
65 petitions under the 1997 Rules of Civil Procedure. x x x

xxxx
In fine, we find that it is procedurally feasible as well as practicable that petitions for certiorari
under Rule 65 against the decisions of the Secretary of Labor rendered under the Labor
Code and its implementing and related rules be filed initially in the Court of Appeals.
Paramount consideration is strict observance of the doctrine on the hierarchy of the courts,
emphasized in St. Martin Funeral Homes v. NLRC, on "the judicial policy that this Court will
not entertain direct resort to it unless the redress desired cannot be obtained in the
appropriate courts or where exceptional and compelling circumstances justify availment of a
remedy within and calling for the exercise of our primary jurisdiction."27

On the question of whether the Petition for Certiorari was timely filed, the Court agrees with
petitioners submission. Rule 65 states that where 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
60 days counted from the notice of the denial of the motion.28 This can only mean that even
though a motion for reconsideration is not required or even prohibited by the concerned
government office, and the petitioner files the motion just the same, the 60-day period shall
nonetheless be counted from notice of the denial of the motion. The very nature of certiorari
which is an extraordinary remedy resorted to only in the absence of plain, available,
speedy and adequate remedies in the course of law requires that the office issuing the
decision or order be given the opportunity to correct itself. Quite evidently, this opportunity
for rectification does not arise if no motion for reconsideration has been filed. This is
precisely what the Court said in the ABS-CBN Union Members case, whose essence
continues to this day. Thus:

Section 8, Rule VIII, Book V of the Omnibus Rules Implementing the Labor Code, provides:

"The Secretary shall have fifteen (15) calendar days within which to decide the appeal from
receipt of the records of the case. The decision of the Secretary shall be final and
inappealable." x x x

The aforecited provision cannot be construed to mean that the Decision of the public
respondent cannot be reconsidered since the same is reviewable by writ of certiorari under
Rule 65 of the Rules of Court. As a rule, the law requires a motion for reconsideration to
enable the public respondent to correct his mistakes, if any. In Pearl S. Buck Foundation,
Inc., vs. NLRC, this Court held:

"Hence, the only way by which a labor case may reach the Supreme Court is through a
petition for certiorari under Rule 65 of the Rules of Court alleging lack or excess of
jurisdiction or grave abuse of discretion. Such petition may be filed within a reasonable time
from receipt of the resolution denying the motion for reconsideration of the NLRC decision."
xxx

Clearly, before a petition for certiorari under Rule 65 of the Rules of Court may be availed of,
the filing of a motion for reconsideration is a condition sine qua non to afford an opportunity
for the correction of the error or mistake complained of.
So also, considering that a decision of the Secretary of Labor is subject to judicial review
only through a special civil action of certiorari and, as a rule, cannot be resorted to without
the aggrieved party having exhausted administrative remedies through a motion for
reconsideration, the aggrieved party, must be allowed to move for a reconsideration of the
same so that he can bring a special civil action for certiorari before the Supreme Court.29

Indeed, what needs to be realized is that while a government office may prohibit altogether
the filing of a motion for reconsideration with respect to its decisions or orders, the fact
remains that certiorari inherently requires the filing of a motion for reconsideration, which is
the tangible representation of the opportunity given to the office to correct itself. Unless it is
filed, there could be no occasion to rectify. Worse, the remedy of certiorari would be
unavailing. Simply put, regardless of the proscription against the filing of a motion for
reconsideration, the same may be filed on the assumption that rectification of the decision or
order must be obtained, and before a petition for certiorari may be instituted.

Petitioner received a copy of the Acting Secretary of Labors Decision on June 14,
2007.1wphi1 It timely filed a Motion for Reconsideration on June 25, which was a Monday,
or the first working day following the last day (Sunday, June 24) for filing the motion. But for
lack of procedural basis, the same was effectively denied by the Secretary of Labor via his
August 15, 2007 Order which petitioner received on August 17. It then filed the Petition for
Certiorari on August 29, or well within the fresh 60-day period allowed by the Rules from
August 17. Given these facts, the Court finds that the Petition was timely filed.

Going by the foregoing pronouncements, the CA doubly erred in dismissing CA-G.R. SP No.
100324.

WHEREFORE, the Petition is GRANTED. The assailed September 20, 2007 and December
14, 2007 Resolutions of the Court of Appeals are REVERSED and SET ASIDE. The Petition
in CA-G.R. SP No. 100324 is ordered REINSTATED and the Court of Appeals is DIRECTED
to RESOLVE the same with DELIBERATE DISPATCH.

SO ORDERED.

FIRST DIVISION

REPUBLIC OF THE PHILIPPINES, represented by the PRIVATIZATION AND


MANAGEMENT OFFICE (PMO),
Petitioner,
- versus -

PANTRANCO NORTH EXPRESS, INC. (PNEI), PANTRANCO EMPLOYEES


ASSOCIATION (PEA-PTGWO), EUSEBIO RAMOSO, CIRIACO M. MAGSINO, A.
CACHUELA, A. CAMUS, M. CALAHI, R. CANO, B.T. LANTANO, L. BERSAMINA, A.
ALFARO and 495 OTHERS,
Respondents.

G.R. No. 178593

Present:

CORONA, C.J.,
Chairperson,
LEONARDO-DE CASTRO,
BERSAMIN,
DEL CASTILLO, and
VILLARAMA, JR., JJ.

Promulgated:

February 15, 2012


x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

RESOLUTION

VILLARAMA, JR., J.:


Before us is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil
Procedure, as amended, assailing the January 8, 2007[1] and June 26, 2007[2] Resolutions
of the Court of Appeals (CA) in CA-G.R. SP No. 97348. The CA dismissed the petition for
certiorari filed by petitioner Privatization and Management Office (PMO) to set aside the
September 27, 2006 Resolution[3] of the National Labor Relations Commission (NLRC). The
CA ruled that the petition was premature since petitioner did not seek reconsideration of the
assailed NLRC resolution.
The facts of the case follow:
On May 27, 1993, the Labor Arbiter rendered a Decision[4] in the consolidated complaints[5]
for illegal retrenchment filed by Pantranco Employees Association, et al., against respondent
Pantranco North Express, Inc. (PNEI). The Labor Arbiter ordered PNEI to pay each of the
345 illegally retrenched employees four months back wages in the total amount of
P11,134,954 plus attorneys fees equivalent to 10% of the monetary award. The NLRC
affirmed the decision, and the decision became executory on November 3, 1993.[6]
The judgment was partially satisfied in the amount of P895,000, leaving a balance of
P10,239,954 plus P1,113,495 as attorneys fees or a total of P11,353,449.[7] Several alias
writs of execution were issued but were returned unsatisfied. On September 6, 2001, a 5th
Alias Writ of Execution was issued.[8]
On the strength of a 5th Alias Writ of Execution, a Notice of Levy/Sale on Execution of
Personal Property[9] was issued. Certain properties consisting of machinery, equipment
tools, spare parts, dilapidated buses and unserviceable motor vehicles formerly belonging to
PNEI and located at Pantranco Compound, Himlayan Road, Barangay Pasong Tamo,
Tandang Sora, Quezon City, were levied upon and scheduled for auction sale on September
18, 2001 at 11:00 a.m.
On September 17, 2001, petitioner filed a Notice of Third-Party Claim[10] over the levied
properties and attached to said notice an Affidavit of Third-Party Claim.[11] Petitioner
asserted that the properties are mortgaged to the National Government through its trustee,
the Asset Privatization Trust (now Privatization and Management Office or PMO). Petitioner
argued that the National Government has a superior lien over the properties and that the
claims/receivables of the National Government must be satisfied first before the judgment in
favor of the retrenched employees.
In their Opposition to the Third-Party Claim with Motion to Dismiss, respondent employees
argued that PMO has no legal right to appropriate the PNEIs assets and that PMOs takeover
of PNEIs assets is only for the purpose of privatization and disposition to pay the claims of
PNEIs creditor-employees.[12]
In reply, petitioner changed its stance and no longer asserted that the National Government
has a mortgage lien over the subject properties but instead owned them. Petitioner averred
that its ownership over the subject properties arose because PNEI obtained various loan
accommodations and other credit facilities from the National Investment and Development
Corporation (NIDC), a subsidiary arm of PNB, and executed mortgages over its real and
personal properties, including the properties subject of this case. Upon the dissolution of
NIDC, all of NIDCs accounts were transferred to PNB which continued to extend financial
and credit accommodations to PNEI. On July 28, 1983, PNEI restructured its loan
obligations to PNB and executed in favor of PNB a Dacion en Pago conveying certain
properties. In 1993, PNEI closed shop. Then, on March 28, 1994, pursuant to Proclamation
No. 50,[13] as amended by Proclamation No. 50-A[14] and Administrative Order No. 14[15]
dated February 3, 1987, PNB assigned, transferred and conveyed to the Asset Privatization
Trust (now PMO) in trust for the National Government, all of its rights, title and interest on its
non-performing assets, including the credit and mortgage account of PNEI. Later, PNEIs
assets, including the subject properties, were foreclosed and transferred to APT in trust for
the Republic of the Philippines.[16]
Hence, as PNEI no longer owned the subject properties, petitioner argued that said
properties cannot be made to satisfy the 1993 judgment in favor of respondent PNEI
employees.
In an Order[17] dated October 22, 2001, the Labor Arbiter denied petitioners third-party
claim for want of merit and directed the sheriff to proceed with the execution process. The
Labor Arbiter noted that the Notice of Third-Party Claim filed by the Asset Privatization Trust
had been denied in an Order dated July 6, 1994 and no appeal was timely filed. Moreover,
the Labor Arbiter noted that petitioner PMO failed to introduce documents which would show
that said junk buses, scrap equipment, other motor pool scrap and spare parts were indeed
mortgaged.
On September 27, 2006, the NLRC issued a Resolution[18] affirming the October 22, 2001
Order of the Labor Arbiter. The NLRC also ordered that the records of the case be remanded
to the Arbitration Branch for immediate appropriate proceedings.
Without filing a motion for reconsideration, petitioner filed a petition for certiorari before the
CA.
On January 8, 2007, the CA issued a Resolution[19] which denied due course and dismissed
the petition for being premature. The CA held that petitioners failure to file a motion for
reconsideration of the NLRC resolution was a fatal procedural defect.
On June 26, 2007, the CA also denied petitioners motion for reconsideration. Hence, this
petition.
Petitioner alleges that
I
THE COURT OF APPEALS ERRED WHEN IT DISMISSED PETITIONERS PETITION ON
THE GROUND THAT NO PRIOR MOTION FOR RECONSIDERATION WAS FILED
BEFORE THE NATIONAL LABOR RELATIONS COMMISSION.
II
THE COURT OF APPEALS ERRED WHEN IT FAILED TO GIVE DUE COURSE TO
PETITIONERS MOTION FOR RECONSIDERATION OF THE RESOLUTION DATED
JANUARY 8, 2007.[20]
Essentially, the issue for our resolution is, did the CA err in dismissing petitioners Rule 65
petition?
Petitioner argues that its petition should have been given due course notwithstanding its
failure to file a motion for reconsideration of the September 27, 2006 NLRC Resolution.
Petitioner cites the following grounds: (a) the filing of such motion for reconsideration would
have been useless; (b) the matter is one of extreme urgency; (c) the question raised is
purely of law; (d) public interest is involved; (e) the application of the rule would cause great
and irreparable damage to petitioner; and (f) judicial intervention is urgently necessary.
Petitioner claims that the filing of a motion for reconsideration would be inadequate and
entirely useless because the NLRC is bent on immediately proceeding with execution.
Petitioner adds that the matter is one of extreme urgency which calls for direct, urgent and
immediate judicial intervention. It involves public interest since the subject properties already
belong to the State; hence, beyond the long arm of the labor agency to award in favor of the
retrenched employees.
The petition is bereft of merit.
The well-established rule is that a motion for reconsideration is an indispensable condition
before an aggrieved party can resort to the special civil action for certiorari under Rule 65 of
the 1997 Rules of Civil Procedure, as amended.[21] A motion for reconsideration of the
order, resolution or decision of the NLRC should be seasonably filed as a precondition for
pursuing any further or subsequent recourse; otherwise, the order, resolution or decision
would become final and executory after ten calendar days from receipt thereof.[22] The
rationale for the rule is that the law intends to afford the NLRC an opportunity to rectify such
errors or mistakes it may have committed before resort to courts of justice can be had.[23]
Of course, the rule is not absolute and jurisprudence has laid down exceptions when the
filing of a petition for certiorari is proper notwithstanding the failure to file a motion for
reconsideration. Thus, resort to the courts under Rule 65 is allowed even without a motion
for reconsideration first having been filed:
(a) where the order is a patent nullity, as where the court a quo has no jurisdiction;
(b) where the questions raised in the certiorari proceedings have been duly raised and
passed upon by the lower court, or are the same as those raised and passed upon in the
lower court;
(c) where there is an urgent necessity for the resolution of the question and any further
delay would prejudice the interests of the Government or of the petitioner or the subject
matter of the petition is perishable;
(d) where, under the circumstances, a motion for reconsideration would be useless;
(e) where petitioner was deprived of due process and there is extreme urgency for relief;
(f) where, in a criminal case, relief from an order of arrest is urgent and the granting of
such relief by the trial court is improbable;
(g) where the proceedings in the lower court are a nullity for lack of due process;
(h) where the proceeding was ex parte or in which the petitioner had no opportunity to
object; and,
(i) where the issue raised is one purely of law or public interest is involved.[24]
However, petitioner failed to show that this case falls under any of the exceptions. Here,
except for its bare allegation, petitioner failed to present any plausible justification for
dispensing with the requirement of a prior motion for reconsideration. Notably, the petition
filed before the CA did not state any reason for its failure to file a motion for reconsideration
from the NLRC resolution. It was only in its motion for reconsideration of the CA resolution
dismissing the petition and in the present petition that petitioner justified its non-filing of a
motion for reconsideration. According to petitioner, a motion for reconsideration would be
inadequate and useless since the labor agency is bent on immediately proceeding with the
execution, levy and sale on execution of the subject properties. But it is not for petitioner to
determine whether the filing of a motion for reconsideration should be dispensed with. As
enunciated in the case of Sim v. National Labor Relations Commission[25]:
It must be emphasized that a writ of certiorari is a prerogative writ, never demandable as a
matter of right, never issued except in the exercise of judicial discretion. Hence, he who
seeks a writ of certiorari must apply for it only in the manner and strictly in accordance with
the provisions of the law and the Rules. Petitioner may not arrogate to himself the
determination of whether a motion for reconsideration is necessary or not. To dispense with
the requirement of filing a motion for reconsideration, petitioner must show a concrete,
compelling, and valid reason for doing so, which petitioner failed to do. Thus, the Court of
Appeals correctly dismissed the petition.
It must be emphasized that the filing of a motion for reconsideration and filing it on time are
not mere technicalities of procedure.[26] These are jurisdictional and mandatory
requirements which must be strictly complied with.[27] Thus, failure to file a motion for
reconsideration with the NLRC before availing oneself of the special civil action for certiorari
is a fatal infirmity.
Be that as it may, even if we set aside the procedural infirmity, the CA could still not be
faulted for not giving due course to the petition since petitioner failed to show any error or
grave abuse of discretion on the part of the Labor Arbiter and the NLRC in denying its third-
party claim. Both the Labor Arbiter and the NLRC are in accord that petitioner PMO as the
successor entity of APT can no longer question the Notice of Levy and/or Sale on Execution
of the Personal Assets/Properties of PNEI. As early as July 6, 1994, an order had been
issued by the Labor Arbiter which denied the Third-Party Claim of PMOs predecessor-in-
interest, APT, to stop the execution of the levied buses owned by PNEI. There being no
appeal interposed by the Office of the Government Corporate Counsel from such order, it
became final and executory. PMO cannot now be allowed to raise the same ground invoked
by APT to again delay the execution in satisfaction of the 1993 judgment of the Labor Arbiter
in favor of respondent PNEI employees. We find no cogent reason in this case to deviate
from the rulings of both labor offices whose findings are based on established facts.
Furthermore, the records are bereft of any concrete proof that the subject properties of PNEI
were among those included in the list of accounts that were transferred to the National
Government and which were subsequently transferred to APT/PMO. We quote with approval
the Labor Arbiters pertinent findings on this matter, to wit:
x x x PMO failed to introduce documentary evidence showing that the personal properties
levied were indeed subjected to a chattel mortgage to NIDC and/or PNB. It is to be noted
that the Dacion en Pago covered a general statement on Pantrancos assets. There is no
single piece of evidence that said junk buses, scrap equipments, and other motorpool scrap
and spare parts were indeed mortgaged (chattel).[28]
But even assuming that the levied properties were included in those transferred to the
National Government, this Courts pronouncement in the related case of Republic v. National
Labor Relations Commission[29] as to the claim of ownership of APT (PMO) over the PNEI
properties entrusted to it pursuant to Presidential Proclamation No. 50, is enlightening. The
Court said,
x x x A matter that must not be overlooked is the fact that the inclusion of APT as a
respondent in the monetary claims against PNEI is merely the consequence of its being a
conservator of assets, a role that APT normally plays in, or the relationship that ordinarily it
maintains with, corporations identified for and while under privatization. The liability of APT
under this particular arrangement, nothing else having been shown, should be co-extensive
with the amount of assets taken over from the privatized firm. PNEIs assets obviously
remain to be subject to execution by judgment creditors of PNEI. Accordingly, the levy and
auction sale of the property of PNEI to satisfy the monetary judgment rendered in favor of
PNEI employees can be sustained since such assets are to be deemed subject to all valid
claims against PNEI.[30] [Emphasis ours.]
In sum, the CA did not err in dismissing the petition.
WHEREFORE, the petition is DENIED. The January 8, 2007 and June 26, 2007 Resolutions
of the Court of Appeals in CA-G.R. SP No. 97348 are hereby AFFIRMED.
No costs.
SO ORDERED.

SECOND DIVISION

FEDERICO S. ROBOSA, ROLANDO E. PANDY, NOEL D. ROXAS, ALEXANDER


ANGELES, VERONICA GUTIERREZ, FERNANDO EMBAT, and NANETTE H. PINTO,
Petitioners,

- versus -

NATIONAL LABOR RELATIONS COMMISSION (First Division), CHEMO-TECHNISCHE


MANUFACTURING, INC. and its responsible officials led by FRANKLIN R. DE LUZURIAGA,
and PROCTER & GAMBLE PHILIPPINES, INC.,
Respondents.
G.R. No. 176085

Present:

CARPIO, J., Chairperson,


BRION,
PEREZ,
SERENO, and
REYES, JJ.

Promulgated:

February 8, 2012

x------------------------------------------------------------------------------------------x

DECISION

BRION, J.:

We resolve the petition for review on certiorari[1] seeking the reversal of the resolutions of
the Court of Appeals (CA) rendered on February 24, 2006[2] and December 14, 2006[3] in
CA-G.R. SP No. 80436.

Factual Background

Federico S. Robosa, Rolando E. Pandy, Noel D. Roxas, Alexander Angeles, Veronica


Gutierrez, Fernando Embat and Nanette H. Pinto (petitioners) were rank-and-file employees
of respondent Chemo-Technische Manufacturing, Inc. (CTMI), the manufacturer and
distributor of Wella products. They were officers and members of the CTMI Employees
Union-DFA (union). Respondent Procter and Gamble Philippines, Inc. (P & GPI) acquired all
the interests, franchises and goodwill of CTMI during the pendency of the dispute.
Sometime in the first semester of 1991, the union filed a petition for certification election at
CTMI. On June 10, 1991, Med-Arbiter Rasidali Abdullah of the Office of the Department of
Labor and Employment in the National Capital Region (DOLE-NCR) granted the petition.
The DOLE-NCR conducted a consent election on July 5, 1991, but the union failed to garner
the votes required to be certified as the exclusive bargaining agent of the company.

On July 15, 1991, CTMI, through its President and General Manager Franklin R. de
Luzuriaga, issued a memorandum[4] announcing that effective that day: (1) all sales
territories were demobilized; (2) all vehicles assigned to sales representatives should be
returned to the company and would be sold; (3) sales representatives would continue to
service their customers through public transportation and would be given transportation
allowance; (4) deliveries of customers orders would be undertaken by the warehouses; and
(5) revolving funds for ex-truck selling held by sales representatives should be surrendered
to the cashier (for Metro Manila) or to the supervisor (for Visayas and Mindanao), and truck
stocks should immediately be surrendered to the warehouse.

On the same day, CTMI issued another memorandum[5] informing the companys sales
representatives and sales drivers of the new system in the Salon Business Groups selling
operations.

The union asked for the withdrawal and deferment of CTMIs directives, branding them as
union busting acts constituting unfair labor practice. CTMI ignored the request. Instead, it
issued on July 23, 1991 a notice of termination of employment to the sales drivers, due to
the abolition of the sales driver positions.[6]

On August 1, 1991, the union and its affected members filed a complaint for illegal dismissal
and unfair labor practice, with a claim for damages, against CTMI, De Luzuriaga and other
CTMI officers. The union also moved for the issuance of a writ of preliminary injunction
and/or temporary restraining order (TRO).

The Compulsory Arbitration Proceedings

The labor arbiter handling the case denied the unions motion for a stay order on the ground
that the issues raised by the petitioners can best be ventilated during the trial on the merits
of the case. This prompted the union to file on August 16, 1991 with the National Labor
Relations Commission (NLRC), a petition for the issuance of a preliminary mandatory
injunction and/or TRO.[7]

On August 23, 1991, the NLRC issued a TRO.[8] It directed CTMI, De Luzuriaga and other
company executives to (1) cease and desist from dismissing any member of the union and
from implementing the July 23, 1991 memorandum terminating the services of the sales
drivers, and to immediately reinstate them if the dismissals have been effected; (2) cease
and desist from implementing the July 15, 1991 memorandum grounding the sales
personnel; and (3) restore the status quo ante prior to the formation of the union and the
conduct of the consent election.

Allegedly, the respondents did not comply with the NLRCs August 23, 1991 resolution. They
instead moved to dissolve the TRO and opposed the unions petition for preliminary
injunction.

On September 12, 1991, the NLRC upgraded the TRO to a writ of preliminary injunction.[9]
The respondents moved for reconsideration. The union opposed the motion and urgently
moved to cite the responsible CTMI officers in contempt of court.

On August 25, 1993, the NLRC denied the respondents motion for reconsideration and
directed Labor Arbiter Cristeta Tamayo to hear the motion for contempt. In reaction, the
respondents questioned the NLRC orders before this Court through a petition for certiorari
and prohibition with preliminary injunction. The Court dismissed the petition for being
premature. It also denied the respondents motion for reconsideration, as well as a second
motion for reconsideration, with finality. This notwithstanding, the respondents allegedly
refused to obey the NLRC directives. The respondents defiance, according to the petitioners,
resulted in the loss of their employment.

Meanwhile, the NLRC heard the contempt charge. On October 31, 2000, it issued a
resolution[10] dismissing the charge. It ordered the labor arbiter to proceed hearing the main
case on the merits.

The petitioners moved for, but failed to secure, a reconsideration from the NLRC on the
dismissal of the contempt charge. They then sought relief from the CA by way of a petition
for certiorari under Rule 65.

The CA Decision

The CA saw no need to dwell on the issues raised by the petitioners as the question it
deemed appropriate for resolution is whether the NLRCs dismissal of the contempt charge
against the respondents may be the proper subject of an appeal. It opined that the dismissal
is not subject to review by an appellate court. Accordingly, the CA Special Sixth Division
dismissed the petition in its resolution of February 24, 2006.[11]

The CA considered the prayer of P & GPI to be dropped as party-respondent moot and
academic.
The petitioners sought a reconsideration, but the CA denied the motion in its resolution of
December 14, 2006.[12] Hence, the present Rule 45 petition.

The Petition

The petitioners charge the CA with grave abuse of discretion in upholding the NLRC
resolutions, despite the reversible errors the labor tribunal committed in dismissing the
contempt charge against the respondents. They contend that the respondents were guilty of
contempt for their failure (1) to observe strictly the NLRC status quo order; and (2) to
reinstate the dismissed petitioners and to pay them their lost wages, sales commissions, per
diems, allowances and other employee benefits. They also claim that the NLRC, in effect,
overturned this Courts affirmation of the TRO and of the preliminary injunction.

The petitioners assail the CAs reliance on the Courts ruling that a contempt charge partakes
of a criminal proceeding where an acquittal is not subject to appeal. They argue that the
facts obtaining in the present case are different from the facts of the cases where the Courts
ruling was made. They further argue that by the nature of this case, the Labor Code and its
implementing rules and regulations should apply, but in any event, the appellate court is not
prevented from reviewing the factual basis of the acquittal of the respondents from the
contempt charges.

The petitioners lament that the NLRC, in issuing the challenged resolutions, had
unconstitutionally applied the law. They maintain that not only did the NLRC unconscionably
delay the disposition of the case for more than twelve (12) years; it also rendered an unjust,
unkind and dubious judgment. They bewail that [f]or some strange reason, the respondent
NLRC made a queer [somersault] from its earlier rulings which favor the petitioners.[13]

The Case for the Respondents

Franklin K. De Luzuriaga

De Luzuriaga filed a Comment[14] on May 17, 2007 and a Memorandum on December 4,


2008,[15] praying for a dismissal of the petition.

De Luzuriaga argues that the CA committed no error when it dismissed the petition for
certiorari since the dismissal of the contempt charge against the respondents amounted to
an acquittal where review by an appellate court will not lie. In any event, he submits, the
respondents were charged with indirect contempt which may be initiated only in the
appropriate regional trial court, pursuant to Section 12, Rule 71 of the Rules of Court. He
posits that the NLRC has no jurisdiction over an indirect contempt charge. He thus argues
that the petitioners improperly brought the contempt charge before the NLRC.

Additionally, De Luzuriaga points out that the petition raises only questions of facts which,
procedurally, is not allowed in a petition for review on certiorari. Be this as it may, he submits
that pursuant to Philippine Long Distance Telephone Company, Inc. v. Tiamson,[16] factual
findings of labor officials, who are deemed to have acquired expertise in matters within their
respective jurisdictions, are generally accorded not only respect but even finality. He
stresses that the CA committed no reversible error in not reviewing the NLRCs factual
findings.

Further, De Luzuriaga contends that the petitioners verification and certification against
forum shopping is defective because it was only Robosa and Pandy who executed the
document. There was no indication that they were authorized by Roxas, Angeles, Gutierrez,
Embat and Pinto to execute the required verification and certification.

Lastly, De Luzuriaga maintains that the petitioners are guilty of forum shopping as the reliefs
prayed for in the petition before the CA, as well as in the present petition, are the same
reliefs that the petitioners may be entitled to in the complaint before the labor arbiter.[17]

P & GPI

As it did with the CA when it was asked to comment on the petitioners motion for
reconsideration,[18] P & GPI prays in its Comment[19] and Memorandum[20] that it be
dropped as a party-respondent, and that it be excused from further participating in the
proceedings. It argues that inasmuch as the NLRC resolved the contempt charge on the
merits, an appeal from its dismissal through a petition for certiorari is barred. Especially in its
case, the dismissal of the petition for certiorari is correct because it was never made a party
to the contempt proceedings and, thus, it was never afforded the opportunity to be heard. It
adds that it is an entity separate from CTMI. It submits that it cannot be made to assume any
or all of CTMIs liabilities, absent an agreement to that effect but even if it may be liable, the
present proceedings are not the proper venue to determine its liability, if any.

On December 16, 2008, the petitioners filed a Memorandum[21] raising essentially the same
issues and arguments laid down in the petition.

The Courts Ruling


Issues

The parties submissions raise the following issues:

(1) whether the NLRC has contempt powers;


(2) whether the dismissal of a contempt charge is appealable; and
(3) whether the NLRC committed grave abuse of discretion in dismissing the contempt
charge against the respondents.

On the first issue, we stress that under Article 218[22] of the Labor Code, the NLRC (and the
labor arbiters) may hold any offending party in contempt, directly or indirectly, and impose
appropriate penalties in accordance with law. The penalty for direct contempt consists of
either imprisonment or fine, the degree or amount depends on whether the contempt is
against the Commission or the labor arbiter. The Labor Code, however, requires the labor
arbiter or the Commission to deal with indirect contempt in the manner prescribed under
Rule 71 of the Rules of Court.[23]

Rule 71 of the Rules of Court does not require the labor arbiter or the NLRC to initiate
indirect contempt proceedings before the trial court. This mode is to be observed only when
there is no law granting them contempt powers.[24] As is clear under Article 218(d) of the
Labor Code, the labor arbiter or the Commission is empowered or has jurisdiction to hold the
offending party or parties in direct or indirect contempt. The petitioners, therefore, have not
improperly brought the indirect contempt charges against the respondents before the NLRC.

The second issue pertains to the nature of contempt proceedings, especially with respect to
the remedy available to the party adjudged to have committed indirect contempt or has been
absolved of indirect contempt charges. In this regard, Section 11, Rule 71 of the Rules of
Court states that the judgment or final order of a court in a case of indirect contempt may be
appealed to the proper court as in a criminal case. This is not the point at issue, however, in
this petition. It is rather the question of whether the dismissal of a contempt charge, as in the
present case, is appealable. The CA held that the NLRCs dismissal of the contempt charges
against the respondents amounts to an acquittal in a criminal case and is not subject to
appeal.

The CA ruling is grounded on prevailing jurisprudence.

In Yasay, Jr. v. Recto,[25] the Court declared:


A distinction is made between a civil and [a] criminal contempt. Civil contempt is the failure to
do something ordered by a court to be done for the benefit of a party. A criminal contempt is
any conduct directed against the authority or dignity of the court.[26]

The Court further explained in Remman Enterprises, Inc. v. Court of Appeals[27] and People
v. Godoy[28] the character of contempt proceedings, thus

The real character of the proceedings in contempt cases is to be determined by the relief
sought or by the dominant purpose. The proceedings are to be regarded as criminal when
the purpose is primarily punishment and civil when the purpose is primarily compensatory or
remedial.
Still further, the Court held in Santiago v. Anunciacion, Jr.[29] that:

But whether the first or the second, contempt is still a criminal proceeding in which acquittal,
for instance, is a bar to a second prosecution. The distinction is for the purpose only of
determining the character of punishment to be administered.

In the earlier case of The Insurance Commissioner v. Globe Assurance Co., Inc.,[30] the
Court dismissed the appeal from the ruling of the lower court denying a petition to punish the
respondent therein from contempt for lack of evidence. The Court said in that case:

It is not the sole reason for dismissing this appeal. In the leading case of In re Mison, Jr. v.
Subido, it was stressed by Justice J.B.L. Reyes as ponente, that the contempt proceeding
far from being a civil action is of a criminal nature and of summary character in which the
court exercises but limited jurisdiction. It was then explicitly held: Hence, as in criminal
proceedings, an appeal would not lie from the order of dismissal of, or an exoneration from,
a charge of contempt of court. [footnote omitted]

Is the NLRCs dismissal of the contempt charges against the respondents beyond review by
this Court? On this important question, we note that the petitioners, in assailing the CA main
decision, claim that the appellate court committed grave abuse of discretion in not ruling on
the dismissal by the NLRC of the contempt charges.[31] They also charge the NLRC of
having gravely abused its discretion and having committed reversible errors in:

(1) setting aside its earlier resolutions and orders, including the writ of preliminary injunction
it issued, with its dismissal of the petition to cite the respondents in contempt of court;
(2) overturning this Courts resolutions upholding the TRO and the writ of preliminary
injunction;
(3) failing to impose administrative fines upon the respondents for violation of the TRO and
the writ of preliminary injunction; and
(4) failing to order the reinstatement of the dismissed petitioners and the payment of their
accrued wages and other benefits.

In view of the grave abuse of discretion allegation in this case, we deem it necessary to look
into the NLRCs dismissal of the contempt charges against the respondents. As the charges
were rooted into the respondents alleged non-compliance with the NLRC directives
contained in the TRO[32] and the writ of preliminary injunction,[33] we first inquire into what
really happened to these directives.

The assailed NLRC resolution of October 31, 2000[34] gave us the following account on the
matter -

On the first directive, x x x We find that there was no violation of the said order. A perusal of
the records would show that in compliance with the temporary restraining order (TRO),
respondents reinstated back to work the sales drivers who complained of illegal dismissal
(Memorandum of Respondents, page 4).

Petitioners allegation that there was only payroll reinstatement does not make the
respondents guilty of contempt of court. Even if the drivers were just in the garage doing
nothing, the same does not make respondents guilty of contempt nor does it make them
violators of the injunction order. What is important is that they were reinstated and receiving
their salaries.

As for petitioners Danilo Real, Roberto Sedano and Rolando Manalo, they have resigned
from their jobs and were paid their separation pay xxx (Exhibits 6, 6-A, 7, 7-A, 8, 8-A,
Respondents Memorandum dated August 12, 1996). The issue of whether they were illegally
dismissed should be threshed out before the Labor Arbiter in whose sala the case of unfair
labor practice and illegal dismissal were (sic) filed. Records also show that petitioner Antonio
Desquitado during the pendency of the case executed an affidavit of desistance asking that
he be dropped as party complainant in as much as he has already accepted separation
benefits totaling to P63,087.33.

With respect to the second directive ordering respondents to cease and desist from
implementing the memoranda dated July 15, 1991 designed to ground sales personnel who
are members of the union, respondents alleged that they can no longer be restrained or
enjoined and that the status quo can no longer be restored, for implementation of the
memorandum was already consummated or was a fait accompli. x x x

All sales vehicles were ordered to be turned over to management and the same were
already sold[.] xxx [I]t would be hard to undo the sales transactions, the same being valid
and binding. The memorandum of July 15, 1991 authorized still all sales representatives to
continue servicing their customers using public transportation and a transportation allowance
would be issued.

xxxx

The third directive of the Commission is to preserve the status quo ante between the parties.

Records reveal that WELLA AG of Germany terminated its Licensing Agreement with
respondent company effective December 31, 1991 (Exhibit 11, Respondents Memorandum).

On January 31, 1992, individual petitioners together with the other employees were
terminated xxx. In fact, this event resulted to the closure of the respondent company. The
manufacturing and marketing operations ceased. This is evidenced by the testimony of
Rosalito del Rosario and her affidavit (Exh. 9, memorandum of Respondents) as well as
Employers Monthly Report on Employees Termination/dismissals/suspension xxx (Exhibits
12-A to 12-F, ibid) as well as the report that there is a permanent shutdown/total closure of
all units of operations in the establishment (Ibid). A letter was likewise sent to the
Department of Labor and Employment (Exh. 12, Ibid) in compliance with Article 283 of the
Labor Code, serving notice that it will cease business operations effective January 31, 1992.

The petitioners strongly dispute the above account. They maintain that the NLRC failed to
consider the following:

1. CTMI violated the status quo ante order when it did not restore to their former work
assignments the dismissed sales drivers. They lament that their being garaged deprived
them of benefits, and they were subjected to ridicule and psychological abuse. They assail
the NLRC for considering the payroll reinstatement of the drivers as compliance with its stay
order.

They also bewail the NLRCs recognition of the resignation of Danilo Real, Roberto Sedano,
Rolando Manalo and Antonio Desquitado as they were just compelled by economic
necessity to resign from their employment. The quitclaims they executed were contrary to
public policy and should not bar them from claiming the full measure of their rights, including
their counsel who was unduly deprived of his right to collect attorneys fees.

2. It was error for the NLRC to rule that the memorandum, grounding the sales drivers, could
no longer be restrained or enjoined because all sales vehicles were already sold. No
substantial evidence was presented by the respondents to prove their allegation, but even if
there was a valid sale of the vehicles, it did not relieve the respondents of responsibility
under the stay order.

3. The alleged termination of the licensing agreement between CTMI and WELLA AG of
Germany, which allegedly resulted in the closure of CTMIs manufacturing and marketing
operations, occurred after the NLRCs issuance of the injunctive reliefs. CTMI failed to
present substantial evidence to support its contention that it folded up its operations when
the licensing agreement was terminated. Even assuming that there was a valid closure of
CTMIs business operations, they should have been paid their lost wages, allowances,
incentives, sales commissions, per diems and other employee benefits from August 23,
1991 up to the date of the alleged termination of CTMIs marketing operations.

Did the NLRC commit grave abuse of discretion in dismissing the contempt charges against
the respondents? An act of a court or tribunal may only be considered as committed in grave
abuse of discretion when it was performed in a capricious or whimsical exercise of judgment
which is equivalent to lack of jurisdiction. The abuse of discretion must be so patent and
gross as to amount to an evasion of a positive duty enjoined by law, or to act at all in
contemplation of law, as where the power is exercised in an arbitrary and despotic manner
by reason of passion or personal hostility.[35]

The petitioners insist that the respondents violated the NLRC directives, especially the status
quo ante order, for their failure to reinstate the dismissed petitioners and to pay them their
benefits. In light of the facts of the case as drawn above, we cannot see how the status quo
ante or the employer-employee situation before the formation of the union and the conduct
of the consent election can be maintained. As the NLRC explained, CTMI closed its
manufacturing and marketing operations after the termination of its licensing agreement with
WELLA AG of Germany. In fact, the closure resulted in the termination of CTMIs remaining
employees on January 31, 1992, aside from the sales drivers who were earlier dismissed but
reinstated in the payroll, in compliance with the NLRC injunction. The petitioners termination
of employment, as well as all of their money claims, was the subject of the illegal dismissal
and unfair labor practice complaint before the labor arbiter. The latter was ordered by the
NLRC on October 31, 2000 to proceed hearing the case.[36] The NLRC thus subsumed all
other issues into the main illegal dismissal and unfair labor practice case pending with the
labor arbiter. On this point, the NLRC declared:

Note that when the injunction order was issued, WELLA AG of Germany was still under
licensing agreement with respondent company. However, the situation has changed when
WELLA AG of Germany terminated its licensing agreement with the respondent, causing the
latter to close its business.

Respondents could no longer be ordered to restore the status quo as far as the individual
petitioners are concerned as these matters regarding the termination of the employees are
now pending litigation with the Arbitration Branch of the Commission. To resolve the incident
now regarding the closure of the respondent company and the matters alleged by petitioners
such as the creations of three (3) new corporations xxx as successor-corporations are
matters best left to the Labor Arbiter hearing the merits of the unfair labor practice and illegal
dismissal cases.[37]

We find no grave abuse of discretion in the assailed NLRC ruling. It rightly avoided delving
into issues which would clearly be in excess of its jurisdiction for they are issues involving
the merits of the case which are by law within the original and exclusive jurisdiction of the
labor arbiter.[38] To be sure, whether payroll reinstatement of some of the petitioners is
proper; whether the resignation of some of them was compelled by dire economic necessity;
whether the petitioners are entitled to their money claims; and whether quitclaims are
contrary to law or public policy are issues that should be heard by the labor arbiter in the first
instance. The NLRC can inquire into them only on appeal after the merits of the case shall
have been adjudicated by the labor arbiter.

The NLRC correctly dismissed the contempt charges against the respondents. The CA
likewise committed no grave abuse of discretion in not disturbing the NLRC resolution.

In light of the above discussion, we find no need to dwell into the other issues the parties
raised.

WHEREFORE, premises considered, we hereby DENY the petition for lack of merit and
AFFIRM the assailed resolutions of the Court of Appeals.

SO ORDERED.

SECOND DIVISION

SESSION DELIGHTS ICE CREAM AND FAST FOODS,


Petitioner,

- versus -
THE HON. COURT OF APPEALS (Sixth Division), HON. NATIONAL LABOR RELATIONS
COMMISSION (Second Division) and ADONIS ARMENIO M. FLORA,
Respondents.
G.R. No. 172149

Present:
CARPIO, J., Chairperson,
BRION,
BERSAMIN,*
ABAD, and
PEREZ, JJ.

Promulgated:

February 8, 2010

x---------------------------------------------------------------------------------------------------------x
DECISION

BRION, J.:

We rule on the petition for review on certiorari assailing the decision[1] and resolution[2] of
the Court of Appeals[3] (CA) in CA-G.R. SP No. 89326. These CA rulings dismissed the
petition for certiorari the petitioner Session Delights Ice Cream and Fast Foods (petitioner)
filed to challenge the resolutions[4] of the Second Division of the National Labor Relations
Commission[5] (NLRC) that in turn affirmed the order[6] of the Labor Arbiter[7] granting a re-
computation of the monetary awards in favor of the private respondent Adonis Armenio M.
Flora (private respondent).

The Facts
The private respondent filed against the petitioner a complaint for illegal dismissal, entitled
Adonis Armenio M. Flora, Complainant versus Session Delights Ice Cream & Fast Foods, et.
al, Private respondents, docketed as NLRC Case No. RAB-CAR 09-0507-00.

The labor arbiter decided the complaint on February 8, 2001, finding that the petitioner
illegally dismissed the private respondent. The decision awarded the private respondent
backwages, separation pay in lieu of reinstatement, indemnity, and attorneys fees, under a
computation that the decision itself outlined in its dispositive portion. The dispositive portion
reads:

WHEREFORE, judgment is hereby rendered declaring private respondent guilty of illegal


dismissal. Accordingly, private respondent SESSION DELIGHTS is ordered to pay
complainant the following:

a) Backwages:
P170.00 x 154 days P 26,180.00
Proportional 13th month pay
P 26,180/12 2,181.65 28,361.65

b) Separation Pay:
P 170.00 x 314/12 x 1 4,448.35

c) Indemnity of P5,000.00 for failure to observe due process

d) Attorneys fees which is 10% of the total award in the amount of P3,781.00.

SO ORDERED.[8]

On the petitioners appeal, the NLRC affirmed the labor arbiters decision in its resolutions
dated May 31, 2002 and September 30, 2002.[9] The dispositive portion of the NLRCs
resolution of May 31, 2002 states:
WHEREFORE, premises considered, the decision under review is hereby AFFIRMED, and
the appeal, DISMISSED, for lack of merit.[10]

The petitioner continued to seek relief, this time by filing a petition for certiorari before the
CA, which petition was docketed as CA-G.R. SP No. 74653.
On July 4, 2003, the CA dismissed the petition and affirmed with modification the NLRC
decision by deleting the awards for a proportionate 13th month pay and for indemnity.[11]
The CA decision became final per Entry of Judgment dated July 29, 2003.[12] The
dispositive portion of this CA decision states:

WHEREFORE, premises considered, the instant petition is hereby DISMISSED. The


decision of the National Labor Relations Commission is AFFIRMED with modification that
the award of proportional 13th month pay as well as the award of indemnity of P 5,000.00 for
failure to observe due process are DELETED.

In January 2004, and in the course of the execution of the above final judgment pursuant to
Section 3, Rule VIII[13] of the then NLRC Rules of Procedure, the Finance Analyst of the
Labor Arbiters Office held a pre-execution conference with the contending parties in
attendance. The Finance Analyst submitted an updated computation of the monetary awards
due the private respondent in the total amount of P235,986.00.[14] This updated
computation included additional backwages and separation pay due the private respondent
computed from March 1, 2001 to September 17, 2003. The computation also included the
proportionate amount of the private respondents 13th month pay. On March 25, 2004, the
labor arbiter approved the updated computation which ran, as follows:
C O M P U TAT I O N

Total computation as per NLRC CAR


decision dated February 8, 2001 (sic) 41,591.00

1. Additional backwages: (March 1, 2001-Sept. 17, 2003)


March 1, 2001-April 30, 2002:
P178.00 x 52 days = 9,256.00
May 1, 2001-June 30, 2002:
P185.00 x 365 days = 67,525.00
July 1, 2002- Sept. 17, 2003:
P190.00 x 382 days = 72,580.00 149,361.00
Proportional 13th month pay:
P149,361.00/12 = 12,446.75
161,807.75
2. Additional separation pay:
P190.00 x 314/12 x 3 years = 14,915.00
3. Additional attorneys fee:
P176,722.75 x 10% = 17,672.25 194,395.00
TOTAL 253,986.00

The petitioner objected to the re-computation and appealed the labor arbiters order to the
NLRC. The petitioner claimed that the updated computation was inconsistent with the
dispositive portion of the labor arbiters February 8, 2001 decision, as modified by the CA in
CA-G.R. SP No. 74653. The NLRC disagreed with the petitioner and affirmed the labor
arbiters decision in a resolution dated October 25, 2004. The NLRC also denied the
petitioners motion for reconsideration in its resolution dated January 31, 2005.

The petitioner sought recourse with the CA through a petition for certiorari on the ground that
the NLRC acted with grave abuse of discretion amounting to lack or excess of jurisdiction.

The CA Rulings

The CA partially granted the petition in its decision of December 19, 2005 (now challenged
before us) by deleting the awarded proportionate 13th month pay. The CA ruled:

WHEREFORE, the petition is PARTIALLY GRANTED. The Labor Arbiter is DIRECTED to


compute only the following (a) private respondents backwages from the time his salary was
withheld up to July 29, 2003, the finality of the Decision in CA-G.R. SP No. 74653; (b) private
respondents separation pay from July 31, 2000 up to July 29, 2003; and (c) attorneys fees
equivalent to 10% of the total monetary claims from (a) and (b). The total monetary award
shall earn legal interest from July 29, 2003 until fully paid. No pronouncement as to cost.

SO ORDERED.[15]

The CA explained in this ruling that employees illegally dismissed are entitled to
reinstatement, full backwages, inclusive of allowances and other benefits or their monetary
equivalent, computed from the time actual compensation was withheld from them, up to the
time of actual reinstatement. If reinstatement is no longer feasible, the backwages shall be
computed from the time of their illegal dismissal up to the finality of the decision. The CA
reasoned that a re-computation of the monetary awards was necessary to determine the
correct amount due the private respondent from the time his salary was withheld from him
until July 29, 2003 (the date of finality of the July 4, 2003 decision in CA-G.R. SP No. 74653)
since the separation pay, which was awarded in lieu of reinstatement, had not been paid by
the petitioner. The attorneys fees likewise have to be re-computed in light of the deletion of
the proportionate 13th month pay and indemnity awards.
The petitioner timely filed a motion for reconsideration which the CA denied in its resolution
of March 30, 2006, now similarly assailed before us.

The Issue

The lone issue the petitioner raised is whether a final and executory decision (the labor
arbiters decision of February 8, 2001, as affirmed with modification by the CA decision in
CA-G.R. SP No. 74653) may be enforced beyond the terms decreed in its dispositive
portion.

In the pleadings submitted to the Court, the petitioner insists on a literal reading and
application of the labor arbiters February 8, 2001 decision, as modified by the CA in CA-G.R.
SP No. 74653. The petitioner argues that since the modified labor arbiters February 8, 2001
decision did not provide in its dispositive portion for a computation of the monetary award up
to the finality of the judgment in the case, the CA should have enforced the decision
according to its express and literal terms. In other words, the CA cannot now allow the
execution of the labor arbiters original decision (which the CA affirmed with finality but with
modification) beyond the express terms of its dispositive portion; thus, the amounts that
accrued during the pendency of the petitioners recourses with the NLRC and the CA cannot
be read into and implemented as part of the final and executory judgment.

The petitioner, as an alternative argument, argues that even assuming that the body of the
CA decision in CA-G.R. SP No. 74653 intended a computation of the monetary award up to
the finality of the decision, the dispositive portion remains to be the directive that should be
enforced, as it is the part of the decision that governs, settles, and declares the rights and
obligations of the parties.

The private respondent, for his part, counters that the computation of the monetary award
until the finality of the CA decision in CA-G.R. SP No. 74653 is in accord with Article 279 of
the Labor Code, as amended.

The Courts Ruling

We resolve to dismiss the petition and, accordingly, affirm the CA decision.

We state at the outset that, as a rule, we frown upon any delay in the execution of final and
executory decisions, as the immediate enforcement of the parties rights, confirmed by a final
decision, is a major component of the ideal administration of justice. We admit, however, that
circumstances may transpire rendering delay unavoidable. One such occasion is when the
execution of the final judgment is not in accord with what the final judgment decrees in its
dispositive portion. Just as the execution of a final judgment is a matter of right for the
winning litigant who should not be denied the fruits of his or her victory, the right of the losing
party to give, perform, pay, and deliver only what has been decreed in the final judgment
should also be respected.

That a judgment should be implemented according to the terms of its dispositive portion is a
long and well-established rule.[16] Otherwise stated, it is the dispositive portion that
categorically states the rights and obligations of the parties to the dispute as against each
other.[17] Thus, it is the dispositive portion which the entities charged with the execution of a
final judgment that must be enforced to ensure the validity of the execution.[18]

A companion to the above rule on the execution of a final judgment is the principle of its
immutability. Save for recognized exceptions,[19] a final judgment may no longer be altered,
amended or modified, even if the alteration, amendment or modification is meant to correct
what is perceived to be an erroneous conclusion of fact or law and regardless of what court,
be it the highest Court of the land, renders it.[20] Any attempt on the part of the responsible
entities charged with the execution of a final judgment to insert, change or add matters not
clearly contemplated in the dispositive portion violates the rule on immutability of judgments.

In the present case, with the CAs deletion of the proportionate 13th month pay and
indemnity awards in the labor arbiters February 8, 2001 decision, only the awards of
backwages, separation pay, and attorneys fees remain. These are the awards subject to
execution.

Award of backwages and separation pay

A distinct feature of the judgment under execution is that the February 8, 2001 labor arbiter
decision already provided for the computation of the payable separation pay and backwages
due, and did not literally order the computation of the monetary awards up to the time of the
finality of the judgment. The private respondent, too, did not contest the decision through an
appeal. The petitioners argument to confine the awards to what the labor arbiter stated in the
dispositive part of his decision is largely based on these established features of the
judgment.

We reject the petitioners view as a narrow and misplaced interpretation of an illegal


dismissal decision, particularly of the terms of the labor arbiters decision.

While the private respondent failed to appeal the February 8, 2001 decision of the labor
arbiter, the failure, at the most, had the effect of making the awards granted to him final so
that he could no longer seek any other affirmative relief, or pray for any award additional to
what the labor arbiter had given. Other than these, the illegal dismissal case remained open
for adjudication based on the appeal made for the higher tribunals consideration. In other
words, the higher tribunals, on appropriate recourses made, may reverse the judgment and
declare that no illegal dismissal took place, or affirm the illegal dismissal already decreed
with or without modifying the monetary consequences flowing from the dismissal.

As the case developed and is presented to us, the issue before us is not the correctness of
the awards, nor the finality of the CAs judgment, nor the petitioners failure to appeal. The
issue before us is the propriety of the computation of the awards made, and, whether this
violated the principle of immutability of final judgments.

In concrete terms, the question is whether a re-computation in the course of execution of the
labor arbiters original computation of the awards made, pegged as of the time the decision
was rendered and confirmed with modification by a final CA decision, is legally proper. The
question is posed, given that the petitioner did not immediately pay the awards stated in the
original labor arbiters decision; it delayed payment because it continued with the litigation
until final judgment at the CA level.

A source of misunderstanding in implementing the final decision in this case proceeds from
the way the original labor arbiter framed his decision. The decision consists essentially of
two parts.

The first is that part of the decision that cannot now be disputed because it has been
confirmed with finality. This is the finding of the illegality of the dismissal and the awards of
separation pay in lieu of reinstatement, backwages, attorneys fees, and legal interests.

The second part is the computation of the awards made. On its face, the computation the
labor arbiter made shows that it was time-bound as can be seen from the figures used in the
computation. This part, being merely a computation of what the first part of the decision
established and declared, can, by its nature, be re-computed. This is the part, too, that the
petitioner now posits should no longer be re-computed because the computation is already
in the labor arbiters decision that the CA had affirmed. The public and private respondents,
on the other hand, posit that a re-computation is necessary because the relief in an illegal
dismissal decision goes all the way up to reinstatement if reinstatement is to be made, or up
to the finality of the decision, if separation pay is to be given in lieu reinstatement.

That the labor arbiters decision, at the same time that it found that an illegal dismissal had
taken place, also made a computation of the award, is understandable in light of Section 3,
Rule VIII of the then NLRC Rules of Procedure which requires that a computation be made.
This Section in part states:
[T]he Labor Arbiter of origin, in cases involving monetary awards and at all events, as far as
practicable, shall embody in any such decision or order the detailed and full amount
awarded.
Clearly implied from this original computation is its currency up to the finality of the labor
arbiters decision. As we noted above, this implication is apparent from the terms of the
computation itself, and no question would have arisen had the parties terminated the case
and implemented the decision at that point.

However, the petitioner disagreed with the labor arbiters findings on all counts i.e., on the
finding of illegality as well as on all the consequent awards made. Hence, the petitioner
appealed the case to the NLRC which, in turn, affirmed the labor arbiters decision. By law,
[21] the NLRC decision is final, reviewable only by the CA on jurisdictional grounds.

The petitioner appropriately sought to nullify the NLRC decision on jurisdictional grounds
through a timely filed Rule 65 petition for certiorari. The CA decision, finding that NLRC
exceeded its authority in affirming the payment of 13th month pay and indemnity, lapsed to
finality and was subsequently returned to the labor arbiter of origin for execution.

It was at this point that the present case arose. Focusing on the core illegal dismissal portion
of the original labor arbiters decision, the implementing labor arbiter ordered the award re-
computed; he apparently read the figures originally ordered to be paid to be the computation
due had the case been terminated and implemented at the labor arbiters level. Thus, the
labor arbiter re-computed the award to include the separation pay and the backwages due
up to the finality of the CA decision that fully terminated the case on the merits.
Unfortunately, the labor arbiters approved computation went beyond the finality of the CA
decision (July 29, 2003) and included as well the payment for awards the final CA decision
had deleted specifically, the proportionate 13th month pay and the indemnity awards. Hence,
the CA issued the decision now questioned in the present petition.

We see no error in the CA decision confirming that a re-computation is necessary as it


essentially considered the labor arbiters original decision in accordance with its basic
component parts as we discussed above. To reiterate, the first part contains the finding of
illegality and its monetary consequences; the second part is the computation of the awards
or monetary consequences of the illegal dismissal, computed as of the time of the labor
arbiters original decision.

To illustrate these points, had the case involved a pure money claim for a specific sum (e.g.
salary for a specific period) or a specific benefit (e.g. 13th month pay for a specific year)
made by a former employee, the labor arbiters computation would admittedly have
continuing currency because the sum is specific and any variation may only be on the
interests that may run from the finality of the decision ordering the payment of the specific
sum.

In contrast with a ruling on a specific pure money claim, is a claim that relates to status (as in
this case, where the claim is the legality of the termination of the employment relationship).
In this type of cases, the decision or ruling is essentially declaratory of the status and of the
rights, obligations and monetary consequences that flow from the declared status (in this
case, the payment of separation pay and backwages and attorneys fees when illegal
dismissal is found). When this type of decision is executed, what is primarily implemented is
the declaratory finding on the status and the rights and obligations of the parties therein; the
arising monetary consequences from the declaration only follow as component of the parties
rights and obligations.

In the present case, the CA confirmed that indeed an illegal dismissal had taken place, so
that separation pay in lieu of reinstatement and backwages should be paid. How much that
separation pay would be, would ideally be stated in the final CA decision; if not, the matter is
for handling and computation by the labor arbiter of origin as the labor official charged with
the implementation of decisions before the NLRC.[22]

As the CA correctly pointed out, the basis for the computation of separation pay and
backwages is Article 279 of the Labor Code, as amended, which reads:

x x x An employee who is unjustly dismissed from work shall be entitled to reinstatement


without loss of seniority rights and other privileges and to his full backwages, inclusive of
allowances, and to his other benefits or their monetary equivalent computed from the time
his compensation was withheld from him up to the time of his actual reinstatement.

By jurisprudence derived from this provision, separation pay may be awarded to an illegally
dismissed employee in lieu of reinstatement.[23] Recourse to the payment of separation pay
is made when continued employment is no longer possible, in cases where the dismissed
employees position is no longer available, or the continued relationship between the
employer and the employee is no longer viable due to the strained relations between them,
or when the dismissed employee opted not to be reinstated, or payment of separation
benefits will be for the best interest of the parties involved.[24]

This reading of Article 279, of course, does not appear to be disputed in the present case as
the petitioner admits that separation pay in lieu of reinstatement shall be paid, computed up
to the finality of the judgment finding that illegal dismissal had taken place. What the
petitioner simply disputes is the re-computation of the award when the final CA decision did
not order any re-computation while the NLRC decision that the CA affirmed and the labor
arbiter decision the NLRC in turn affirmed, already made a computation that on the basis of
immutability of judgment and the rule on execution of the dispositive portion of the decision
should not now be disturbed.

Consistent with what we discussed above, we hold that under the terms of the decision
under execution, no essential change is made by a re-computation as this step is a
necessary consequence that flows from the nature of the illegality of dismissal declared in
that decision. A re-computation (or an original computation, if no previous computation has
been made) is a part of the law specifically, Article 279 of the Labor Code and the
established jurisprudence on this provision that is read into the decision. By the nature of an
illegal dismissal case, the reliefs continue to add on until full satisfaction, as expressed under
Article 279 of the Labor Code. The re-computation of the consequences of illegal dismissal
upon execution of the decision does not constitute an alteration or amendment of the final
decision being implemented. The illegal dismissal ruling stands; only the computation of
monetary consequences of this dismissal is affected and this is not a violation of the
principle of immutability of final judgments.
We fully appreciate the petitioners efforts in trying to clarify how the standing jurisprudence
on the payment of separation pay in lieu of reinstatement and the accompanying payment of
backwages ought to be read and reconciled. Its attempt, however, is out of place and, rather
than clarify, may only confuse the implementation of Article 279; the core issue in this case is
not the payment of separation pay and backwages but their re-computation in light of an
original labor arbiter ruling that already contained a dated computation of the monetary
consequences of illegal dismissal.

That the amount the petitioner shall now pay has greatly increased is a consequence that it
cannot avoid as it is the risk that it ran when it continued to seek recourses against the labor
arbiters decision. Article 279 provides for the consequences of illegal dismissal in no
uncertain terms, qualified only by jurisprudence in its interpretation of when separation pay in
lieu of reinstatement is allowed. When that happens, the finality of the illegal dismissal
decision becomes the reckoning point instead of the reinstatement that the law decrees. In
allowing separation pay, the final decision effectively declares that the employment
relationship ended so that separation pay and backwages are to be computed up to that
point. The decision also becomes a judgment for money from which another consequence
flows the payment of interest in case of delay. This was what the CA correctly decreed when
it provided for the payment of the legal interest of 12% from the finality of the judgment, in
accordance with our ruling in Eastern Shipping Lines, Inc. v. Court of Appeals.[25]

WHEREFORE, premises considered, we hereby AFFIRM the decision of the Court of


Appeals dated December 19, 2005 and its resolution dated March 30, 2006 in CA-G.R. SP
No. 89326.

For greater certainty, the petitioner is ORDERED to PAY the private respondent:

(a) backwages computed from August 28, 2000 (the date the employer illegally dismissed
the private respondent) up to July 29, 2003, the date of finality of the decision of the Court of
Appeals in CA-G.R. SP No. 74653;

(b) separation pay computed from July 31, 2000 (the private respondents first day of
employment) up to July 29, 2003 at the rate of one month pay per year of service;

(c) ten percent (10%) attorneys fees based on the total amount of the awards under (a) and
(b) above; and
(d) legal interest of twelve percent (12%) per annum of the total monetary awards computed
from July 29, 2003, until their full satisfaction.

The labor arbiter is hereby ORDERED to make another re-computation according to the
above directives.
Costs against the petitioner.

SO ORDERED.

EN BANC

G.R. No. 189871 August 13, 2013

DARIO NACAR, PETITIONER,


vs.
GALLERY FRAMES AND/OR FELIPE BORDEY, JR., RESPONDENTS.

DECISION

PERALTA, J.:

This is a petition for review on certiorari assailing the Decision1 dated September 23, 2008
of the Court of Appeals (CA) in CA-G.R. SP No. 98591, and the Resolution2 dated October
9, 2009 denying petitioners motion for reconsideration.

The factual antecedents are undisputed.

Petitioner Dario Nacar filed a complaint for constructive dismissal before the Arbitration
Branch of the National Labor Relations Commission (NLRC) against respondents Gallery
Frames (GF) and/or Felipe Bordey, Jr., docketed as NLRC NCR Case No. 01-00519-97.
On October 15, 1998, the Labor Arbiter rendered a Decision3 in favor of petitioner and found
that he was dismissed from employment without a valid or just cause. Thus, petitioner was
awarded backwages and separation pay in lieu of reinstatement in the amount of
P158,919.92. The dispositive portion of the decision, reads:

With the foregoing, we find and so rule that respondents failed to discharge the burden of
showing that complainant was dismissed from employment for a just or valid cause. All the
more, it is clear from the records that complainant was never afforded due process before he
was terminated. As such, we are perforce constrained to grant complainants prayer for the
payments of separation pay in lieu of reinstatement to his former position, considering the
strained relationship between the parties, and his apparent reluctance to be reinstated,
computed only up to promulgation of this decision as follows:

SEPARATION PAY
Date Hired = August 1990
Rate = P198/day
Date of Decision = Aug. 18, 1998
Length of Service = 8 yrs. & 1 month
P198.00 x 26 days x 8 months = P41,184.00
BACKWAGES
Date Dismissed = January 24, 1997
Rate per day = P196.00
Date of Decisions = Aug. 18, 1998
a) 1/24/97 to 2/5/98 = 12.36 mos.
P196.00/day x 12.36 mos. = P62,986.56
b) 2/6/98 to 8/18/98 = 6.4 months
Prevailing Rate per day = P62,986.00
P198.00 x 26 days x 6.4 mos. = P32,947.20
T O TAL = P95.933.76
xxxx

WHEREFORE, premises considered, judgment is hereby rendered finding respondents


guilty of constructive dismissal and are therefore, ordered:

To pay jointly and severally the complainant the amount of sixty-two thousand nine hundred
eighty-six pesos and 56/100 (P62,986.56) Pesos representing his separation pay;
To pay jointly and severally the complainant the amount of nine (sic) five thousand nine
hundred thirty-three and 36/100 (P95,933.36) representing his backwages; and

All other claims are hereby dismissed for lack of merit.

SO ORDERED.4

Respondents appealed to the NLRC, but it was dismissed for lack of merit in the Resolution5
dated February 29, 2000. Accordingly, the NLRC sustained the decision of the Labor Arbiter.
Respondents filed a motion for reconsideration, but it was denied.6

Dissatisfied, respondents filed a Petition for Review on Certiorari before the CA. On August
24, 2000, the CA issued a Resolution dismissing the petition. Respondents filed a Motion for
Reconsideration, but it was likewise denied in a Resolution dated May 8, 2001.7

Respondents then sought relief before the Supreme Court, docketed as G.R. No. 151332.
Finding no reversible error on the part of the CA, this Court denied the petition in the
Resolution dated April 17, 2002.8

An Entry of Judgment was later issued certifying that the resolution became final and
executory on May 27, 2002.9 The case was, thereafter, referred back to the Labor Arbiter. A
pre-execution conference was consequently scheduled, but respondents failed to appear.10

On November 5, 2002, petitioner filed a Motion for Correct Computation, praying that his
backwages be computed from the date of his dismissal on January 24, 1997 up to the finality
of the Resolution of the Supreme Court on May 27, 2002.11 Upon recomputation, the
Computation and Examination Unit of the NLRC arrived at an updated amount in the sum of
P471,320.31.12

On December 2, 2002, a Writ of Execution13 was issued by the Labor Arbiter ordering the
Sheriff to collect from respondents the total amount of P471,320.31. Respondents filed a
Motion to Quash Writ of Execution, arguing, among other things, that since the Labor Arbiter
awarded separation pay of P62,986.56 and limited backwages of P95,933.36, no more
recomputation is required to be made of the said awards. They claimed that after the
decision becomes final and executory, the same cannot be altered or amended anymore.14
On January 13, 2003, the Labor Arbiter issued an Order15 denying the motion. Thus, an
Alias Writ of Execution16 was issued on January 14, 2003.
Respondents again appealed before the NLRC, which on June 30, 2003 issued a
Resolution17 granting the appeal in favor of the respondents and ordered the recomputation
of the judgment award.

On August 20, 2003, an Entry of Judgment was issued declaring the Resolution of the NLRC
to be final and executory. Consequently, another pre-execution conference was held, but
respondents failed to appear on time. Meanwhile, petitioner moved that an Alias Writ of
Execution be issued to enforce the earlier recomputed judgment award in the sum of
P471,320.31.18

The records of the case were again forwarded to the Computation and Examination Unit for
recomputation, where the judgment award of petitioner was reassessed to be in the total
amount of only P147,560.19.

Petitioner then moved that a writ of execution be issued ordering respondents to pay him the
original amount as determined by the Labor Arbiter in his Decision dated October 15, 1998,
pending the final computation of his backwages and separation pay.

On January 14, 2003, the Labor Arbiter issued an Alias Writ of Execution to satisfy the
judgment award that was due to petitioner in the amount of P147,560.19, which petitioner
eventually received.

Petitioner then filed a Manifestation and Motion praying for the re-computation of the
monetary award to include the appropriate interests.19

On May 10, 2005, the Labor Arbiter issued an Order20 granting the motion, but only up to
the amount of P11,459.73. The Labor Arbiter reasoned that it is the October 15, 1998
Decision that should be enforced considering that it was the one that became final and
executory. However, the Labor Arbiter reasoned that since the decision states that the
separation pay and backwages are computed only up to the promulgation of the said
decision, it is the amount of P158,919.92 that should be executed. Thus, since petitioner
already received P147,560.19, he is only entitled to the balance of P11,459.73.

Petitioner then appealed before the NLRC,21 which appeal was denied by the NLRC in its
Resolution22 dated September 27, 2006. Petitioner filed a Motion for Reconsideration, but it
was likewise denied in the Resolution23 dated January 31, 2007.

Aggrieved, petitioner then sought recourse before the CA, docketed as CA-G.R. SP No.
98591.
On September 23, 2008, the CA rendered a Decision24 denying the petition. The CA opined
that since petitioner no longer appealed the October 15, 1998 Decision of the Labor Arbiter,
which already became final and executory, a belated correction thereof is no longer allowed.
The CA stated that there is nothing left to be done except to enforce the said judgment.
Consequently, it can no longer be modified in any respect, except to correct clerical errors or
mistakes.

Petitioner filed a Motion for Reconsideration, but it was denied in the Resolution25 dated
October 9, 2009.

Hence, the petition assigning the lone error:

WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED,


COMMITTED GRAVE ABUSE OF DISCRETION AND DECIDED CONTRARY TO LAW IN
UPHOLDING THE QUESTIONED RESOLUTIONS OF THE NLRC WHICH, IN TURN,
SUSTAINED THE MAY 10, 2005 ORDER OF LABOR ARBITER MAGAT MAKING THE
DISPOSITIVE PORTION OF THE OCTOBER 15, 1998 DECISION OF LABOR ARBITER
LUSTRIA SUBSERVIENT TO AN OPINION EXPRESSED IN THE BODY OF THE SAME
DECISION.26

Petitioner argues that notwithstanding the fact that there was a computation of backwages in
the Labor Arbiters decision, the same is not final until reinstatement is made or until finality
of the decision, in case of an award of separation pay. Petitioner maintains that considering
that the October 15, 1998 decision of the Labor Arbiter did not become final and executory
until the April 17, 2002 Resolution of the Supreme Court in G.R. No. 151332 was entered in
the Book of Entries on May 27, 2002, the reckoning point for the computation of the
backwages and separation pay should be on May 27, 2002 and not when the decision of the
Labor Arbiter was rendered on October 15, 1998. Further, petitioner posits that he is also
entitled to the payment of interest from the finality of the decision until full payment by the
respondents.

On their part, respondents assert that since only separation pay and limited backwages were
awarded to petitioner by the October 15, 1998 decision of the Labor Arbiter, no more
recomputation is required to be made of said awards. Respondents insist that since the
decision clearly stated that the separation pay and backwages are "computed only up to
[the] promulgation of this decision," and considering that petitioner no longer appealed the
decision, petitioner is only entitled to the award as computed by the Labor Arbiter in the total
amount of P158,919.92. Respondents added that it was only during the execution
proceedings that the petitioner questioned the award, long after the decision had become
final and executory. Respondents contend that to allow the further recomputation of the
backwages to be awarded to petitioner at this point of the proceedings would substantially
vary the decision of the Labor Arbiter as it violates the rule on immutability of judgments.
The petition is meritorious.

The instant case is similar to the case of Session Delights Ice Cream and Fast Foods v.
Court of Appeals (Sixth Division),27 wherein the issue submitted to the Court for resolution
was the propriety of the computation of the awards made, and whether this violated the
principle of immutability of judgment. Like in the present case, it was a distinct feature of the
judgment of the Labor Arbiter in the above-cited case that the decision already provided for
the computation of the payable separation pay and backwages due and did not further order
the computation of the monetary awards up to the time of the finality of the judgment. Also in
Session Delights, the dismissed employee failed to appeal the decision of the labor arbiter.
The Court clarified, thus:

In concrete terms, the question is whether a re-computation in the course of execution of the
labor arbiter's original computation of the awards made, pegged as of the time the decision
was rendered and confirmed with modification by a final CA decision, is legally proper. The
question is posed, given that the petitioner did not immediately pay the awards stated in the
original labor arbiter's decision; it delayed payment because it continued with the litigation
until final judgment at the CA level.

A source of misunderstanding in implementing the final decision in this case proceeds from
the way the original labor arbiter framed his decision. The decision consists essentially of
two parts.

The first is that part of the decision that cannot now be disputed because it has been
confirmed with finality. This is the finding of the illegality of the dismissal and the awards of
separation pay in lieu of reinstatement, backwages, attorney's fees, and legal interests.

The second part is the computation of the awards made. On its face, the computation the
labor arbiter made shows that it was time-bound as can be seen from the figures used in the
computation. This part, being merely a computation of what the first part of the decision
established and declared, can, by its nature, be re-computed. This is the part, too, that the
petitioner now posits should no longer be re-computed because the computation is already
in the labor arbiter's decision that the CA had affirmed. The public and private respondents,
on the other hand, posit that a re-computation is necessary because the relief in an illegal
dismissal decision goes all the way up to reinstatement if reinstatement is to be made, or up
to the finality of the decision, if separation pay is to be given in lieu reinstatement.

That the labor arbiter's decision, at the same time that it found that an illegal dismissal had
taken place, also made a computation of the award, is understandable in light of Section 3,
Rule VIII of the then NLRC Rules of Procedure which requires that a computation be made.
This Section in part states:
[T]he Labor Arbiter of origin, in cases involving monetary awards and at all events, as far as
practicable, shall embody in any such decision or order the detailed and full amount
awarded.

Clearly implied from this original computation is its currency up to the finality of the labor
arbiter's decision. As we noted above, this implication is apparent from the terms of the
computation itself, and no question would have arisen had the parties terminated the case
and implemented the decision at that point.

However, the petitioner disagreed with the labor arbiter's findings on all counts - i.e., on the
finding of illegality as well as on all the consequent awards made. Hence, the petitioner
appealed the case to the NLRC which, in turn, affirmed the labor arbiter's decision. By law,
the NLRC decision is final, reviewable only by the CA on jurisdictional grounds.

The petitioner appropriately sought to nullify the NLRC decision on jurisdictional grounds
through a timely filed Rule 65 petition for certiorari. The CA decision, finding that NLRC
exceeded its authority in affirming the payment of 13th month pay and indemnity, lapsed to
finality and was subsequently returned to the labor arbiter of origin for execution.

It was at this point that the present case arose. Focusing on the core illegal dismissal portion
of the original labor arbiter's decision, the implementing labor arbiter ordered the award re-
computed; he apparently read the figures originally ordered to be paid to be the computation
due had the case been terminated and implemented at the labor arbiter's level. Thus, the
labor arbiter re-computed the award to include the separation pay and the backwages due
up to the finality of the CA decision that fully terminated the case on the merits.
Unfortunately, the labor arbiter's approved computation went beyond the finality of the CA
decision (July 29, 2003) and included as well the payment for awards the final CA decision
had deleted - specifically, the proportionate 13th month pay and the indemnity awards.
Hence, the CA issued the decision now questioned in the present petition.

We see no error in the CA decision confirming that a re-computation is necessary as it


essentially considered the labor arbiter's original decision in accordance with its basic
component parts as we discussed above. To reiterate, the first part contains the finding of
illegality and its monetary consequences; the second part is the computation of the awards
or monetary consequences of the illegal dismissal, computed as of the time of the labor
arbiter's original decision.28

Consequently, from the above disquisitions, under the terms of the decision which is sought
to be executed by the petitioner, no essential change is made by a recomputation as this
step is a necessary consequence that flows from the nature of the illegality of dismissal
declared by the Labor Arbiter in that decision.29 A recomputation (or an original computation,
if no previous computation has been made) is a part of the law specifically, Article 279 of
the Labor Code and the established jurisprudence on this provision that is read into the
decision. By the nature of an illegal dismissal case, the reliefs continue to add up until full
satisfaction, as expressed under Article 279 of the Labor Code. The recomputation of the
consequences of illegal dismissal upon execution of the decision does not constitute an
alteration or amendment of the final decision being implemented. The illegal dismissal ruling
stands; only the computation of monetary consequences of this dismissal is affected, and
this is not a violation of the principle of immutability of final judgments.30

That the amount respondents shall now pay has greatly increased is a consequence that it
cannot avoid as it is the risk that it ran when it continued to seek recourses against the Labor
Arbiter's decision. Article 279 provides for the consequences of illegal dismissal in no
uncertain terms, qualified only by jurisprudence in its interpretation of when separation pay in
lieu of reinstatement is allowed. When that happens, the finality of the illegal dismissal
decision becomes the reckoning point instead of the reinstatement that the law decrees. In
allowing separation pay, the final decision effectively declares that the employment
relationship ended so that separation pay and backwages are to be computed up to that
point.31

Finally, anent the payment of legal interest. In the landmark case of Eastern Shipping Lines,
Inc. v. Court of Appeals,32 the Court laid down the guidelines regarding the manner of
computing legal interest, to wit:

II. With regard particularly to an award of interest in the concept of actual and compensatory
damages, the rate of interest, as well as the accrual thereof, is imposed, as follows:

1. When the obligation is breached, and it consists in the payment of a sum of money, i.e., a
loan or forbearance of money, the interest due should be that which may have been
stipulated in writing. Furthermore, the interest due shall itself earn legal interest from the time
it is judicially demanded. In the absence of stipulation, the rate of interest shall be 12% per
annum to be computed from default, i.e., from judicial or extrajudicial demand under and
subject to the provisions of Article 1169 of the Civil Code.

2. When an obligation, not constituting a loan or forbearance of money, is breached, an


interest on the amount of damages awarded may be imposed at the discretion of the court at
the rate of 6% per annum. No interest, however, shall be adjudged on unliquidated claims or
damages except when or until the demand can be established with reasonable certainty.
Accordingly, where the demand is established with reasonable certainty, the interest shall
begin to run from the time the claim is made judicially or extrajudicially (Art. 1169, Civil Code)
but when such certainty cannot be so reasonably established at the time the demand is
made, the interest shall begin to run only from the date the judgment of the court is made (at
which time the quantification of damages may be deemed to have been reasonably
ascertained). The actual base for the computation of legal interest shall, in any case, be on
the amount finally adjudged.
3. When the judgment of the court awarding a sum of money becomes final and executory,
the rate of legal interest, whether the case falls under paragraph 1 or paragraph 2, above,
shall be 12% per annum from such finality until its satisfaction, this interim period being
deemed to be by then an equivalent to a forbearance of credit.33

Recently, however, the Bangko Sentral ng Pilipinas Monetary Board (BSP-MB), in its
Resolution No. 796 dated May 16, 2013, approved the amendment of Section 234 of
Circular No. 905, Series of 1982 and, accordingly, issued Circular No. 799,35 Series of
2013, effective July 1, 2013, the pertinent portion of which reads:

The Monetary Board, in its Resolution No. 796 dated 16 May 2013, approved the following
revisions governing the rate of interest in the absence of stipulation in loan contracts,
thereby amending Section 2 of Circular No. 905, Series of 1982:

Section 1. The rate of interest for the loan or forbearance of any money, goods or credits and
the rate allowed in judgments, in the absence of an express contract as to such rate of
interest, shall be six percent (6%) per annum.

Section 2. In view of the above, Subsection X305.136 of the Manual of Regulations for
Banks and Sections 4305Q.1,37 4305S.338 and 4303P.139 of the Manual of Regulations for
Non-Bank Financial Institutions are hereby amended accordingly.

This Circular shall take effect on 1 July 2013.

Thus, from the foregoing, in the absence of an express stipulation as to the rate of interest
that would govern the parties, the rate of legal interest for loans or forbearance of any
money, goods or credits and the rate allowed in judgments shall no longer be twelve percent
(12%) per annum - as reflected in the case of Eastern Shipping Lines40 and Subsection
X305.1 of the Manual of Regulations for Banks and Sections 4305Q.1, 4305S.3 and 4303P.1
of the Manual of Regulations for Non-Bank Financial Institutions, before its amendment by
BSP-MB Circular No. 799 - but will now be six percent (6%) per annum effective July 1,
2013. It should be noted, nonetheless, that the new rate could only be applied prospectively
and not retroactively. Consequently, the twelve percent (12%) per annum legal interest shall
apply only until June 30, 2013. Come July 1, 2013 the new rate of six percent (6%) per
annum shall be the prevailing rate of interest when applicable.

Corollarily, in the recent case of Advocates for Truth in Lending, Inc. and Eduardo B. Olaguer
v. Bangko Sentral Monetary Board,41 this Court affirmed the authority of the BSP-MB to set
interest rates and to issue and enforce Circulars when it ruled that "the BSP-MB may
prescribe the maximum rate or rates of interest for all loans or renewals thereof or the
forbearance of any money, goods or credits, including those for loans of low priority such as
consumer loans, as well as such loans made by pawnshops, finance companies and similar
credit institutions. It even authorizes the BSP-MB to prescribe different maximum rate or
rates for different types of borrowings, including deposits and deposit substitutes, or loans of
financial intermediaries."

Nonetheless, with regard to those judgments that have become final and executory prior to
July 1, 2013, said judgments shall not be disturbed and shall continue to be implemented
applying the rate of interest fixed therein.1awp++i1

To recapitulate and for future guidance, the guidelines laid down in the case of Eastern
Shipping Lines42 are accordingly modified to embody BSP-MB Circular No. 799, as follows:

I. When an obligation, regardless of its source, i.e., law, contracts, quasi-contracts, delicts or
quasi-delicts is breached, the contravenor can be held liable for damages. The provisions
under Title XVIII on "Damages" of the Civil Code govern in determining the measure of
recoverable damages.1wphi1

II. With regard particularly to an award of interest in the concept of actual and compensatory
damages, the rate of interest, as well as the accrual thereof, is imposed, as follows:

When the obligation is breached, and it consists in the payment of a sum of money, i.e., a
loan or forbearance of money, the interest due should be that which may have been
stipulated in writing. Furthermore, the interest due shall itself earn legal interest from the time
it is judicially demanded. In the absence of stipulation, the rate of interest shall be 6% per
annum to be computed from default, i.e., from judicial or extrajudicial demand under and
subject to the provisions of Article 1169 of the Civil Code.

When an obligation, not constituting a loan or forbearance of money, is breached, an interest


on the amount of damages awarded may be imposed at the discretion of the court at the
rate of 6% per annum. No interest, however, shall be adjudged on unliquidated claims or
damages, except when or until the demand can be established with reasonable certainty.
Accordingly, where the demand is established with reasonable certainty, the interest shall
begin to run from the time the claim is made judicially or extrajudicially (Art. 1169, Civil
Code), but when such certainty cannot be so reasonably established at the time the demand
is made, the interest shall begin to run only from the date the judgment of the court is made
(at which time the quantification of damages may be deemed to have been reasonably
ascertained). The actual base for the computation of legal interest shall, in any case, be on
the amount finally adjudged.

When the judgment of the court awarding a sum of money becomes final and executory, the
rate of legal interest, whether the case falls under paragraph 1 or paragraph 2, above, shall
be 6% per annum from such finality until its satisfaction, this interim period being deemed to
be by then an equivalent to a forbearance of credit.
And, in addition to the above, judgments that have become final and executory prior to July
1, 2013, shall not be disturbed and shall continue to be implemented applying the rate of
interest fixed therein.

WHEREFORE, premises considered, the Decision dated September 23, 2008 of the Court
of Appeals in CA-G.R. SP No. 98591, and the Resolution dated October 9, 2009 are
REVERSED and SET ASIDE. Respondents are Ordered to Pay petitioner:

(1) backwages computed from the time petitioner was illegally dismissed on January 24,
1997 up to May 27, 2002, when the Resolution of this Court in G.R. No. 151332 became
final and executory;

(2) separation pay computed from August 1990 up to May 27, 2002 at the rate of one month
pay per year of service; and

(3) interest of twelve percent (12%) per annum of the total monetary awards, computed from
May 27, 2002 to June 30, 2013 and six percent (6%) per annum from July 1, 2013 until their
full satisfaction.

The Labor Arbiter is hereby ORDERED to make another recomputation of the total monetary
benefits awarded and due to petitioner in accordance with this Decision.

SO ORDERED.

SECOND DIVISION

PAQUITO V. ANDO,
Petitioner,

- versus -
ANDRESITO Y. CAMPO, ET AL.,
Respondents.

G.R. No. 184007

Present:

CARPIO, J.,
Chairperson,
NACHURA,
PERALTA,
ABAD, and
MENDOZA, JJ.

Promulgated:

February 16, 2011

x------------------------------------------------------------------------------------x

DECISION

NACHURA, J.:

Before this Court is a Petition for Review on Certiorari[1] under Rule 45 of the Rules of
Court. Petitioner Paquito V. Ando (petitioner) is assailing the Decision[2] dated February 21,
2008 and the Resolution[3] dated July 25, 2008 of the Court of Appeals (CA) in CA-G.R.
CEB-SP. No. 02370.
Petitioner was the president of Premier Allied and Contracting Services, Inc. (PACSI), an
independent labor contractor. Respondents were hired by PACSI as pilers or haulers tasked
to manually carry bags of sugar from the warehouse of Victorias Milling Company and load
them on trucks.[4] In June 1998, respondents were dismissed from employment. They filed a
case for illegal dismissal and some money claims with the National Labor Relations
Commission (NLRC), Regional Arbitration Branch No. VI, Bacolod City.[5]

On June 14, 2001, Labor Arbiter Phibun D. Pura (Labor Arbiter) promulgated a decision,
ruling in respondents favor.[6] PACSI and petitioner were directed to pay a total of
P422,702.28, representing respondents separation pay and the award of attorneys fees.[7]

Petitioner and PACSI appealed to the NLRC. In a decision[8] dated October 20, 2004, the
NLRC ruled that petitioner failed to perfect his appeal because he did not pay the
supersedeas bond. It also affirmed the Labor Arbiters decision with modification of the award
for separation pay to four other employees who were similarly situated. Upon finality of the
decision, respondents moved for its execution.[9]

To answer for the monetary award, NLRC Acting Sheriff Romeo Pasustento issued a Notice
of Sale on Execution of Personal Property[10] over the property covered by Transfer
Certificate of Title (TCT) No. T-140167 in the name of Paquito V. Ando x x x married to
Erlinda S. Ando.

This prompted petitioner to file an action for prohibition and damages with prayer for the
issuance of a temporary restraining order (TRO) before the Regional Trial Court (RTC),
Branch 50, Bacolod City. Petitioner claimed that the property belonged to him and his wife,
not to the corporation, and, hence, could not be subject of the execution sale. Since it is the
corporation that was the judgment debtor, execution should be made on the latters
properties.[11]

On December 27, 2006, the RTC issued an Order[12] denying the prayer for a TRO, holding
that the trial court had no jurisdiction to try and decide the case. The RTC ruled that,
pursuant to the NLRC Manual on the Execution of Judgment, petitioners remedy was to file
a third-party claim with the NLRC Sheriff. Despite lack of jurisdiction, however, the RTC went
on to decide the merits of the case.

Petitioner did not file a motion for reconsideration of the RTC Order. Instead, he filed a
petition for certiorari under Rule 65[13] before the CA. He contended that the RTC acted
without or in excess of jurisdiction or with grave abuse of discretion amounting to lack or
excess of jurisdiction in issuing the Order. Petitioner argued that the writ of execution was
issued improvidently or without authority since the property to be levied belonged to him in
his personal capacity and his wife. The RTC, respondent contended, could stay the
execution of a judgment if the same was unjust.[14] He also contended that, pursuant to a
ruling of this Court, a third party who is not a judgment creditor may choose between filing a
third-party claim with the NLRC sheriff or filing a separate action with the courts.[15]

In the Decision now assailed before this Court, the CA affirmed the RTC Order in so far as it
dismissed the complaint on the ground that it had no jurisdiction over the case, and nullified
all other pronouncements in the same Order. Petitioner moved for reconsideration, but the
motion was denied.

Petitioner then filed the present petition seeking the nullification of the CA Decision. He
argues that he was never sued in his personal capacity, but in his representative capacity as
president of PACSI. Neither was there any indication in the body of the Decision that he was
solidarily liable with the corporation.[16] He also concedes that the Labor Arbiters decision
has become final. Hence, he is not seeking to stop the execution of the judgment against the
properties of PACSI. He also avers, however, that there is no evidence that the sheriff ever
implemented the writ of execution against the properties of PACSI.[17]

Petitioner also raises anew his argument that he can choose between filing a third-party
claim with the sheriff of the NLRC or filing a separate action.[18] He maintains that this
special civil action is purely civil in nature since it involves the manner in which the writ of
execution in a labor case will be implemented against the property of petitioner which is not
a corporate property of PACSI.[19] What he is seeking to be restrained, petitioner maintains,
is not the Decision itself but the manner of its execution.[20] Further, he claims that the
property levied has been constituted as a family home within the contemplation of the Family
Code.[21]

The petition is meritorious.

Initially, we must state that the CA did not, in fact, err in upholding the RTCs lack of
jurisdiction to restrain the implementation of the writ of execution issued by the Labor Arbiter.
The Court has long recognized that regular courts have no jurisdiction to hear and decide
questions which arise from and are incidental to the enforcement of decisions, orders, or
awards rendered in labor cases by appropriate officers and tribunals of the Department of
Labor and Employment. To hold otherwise is to sanction splitting of jurisdiction which is
obnoxious to the orderly administration of justice.[22]

Thus, it is, first and foremost, the NLRC Manual on the Execution of Judgment that governs
any question on the execution of a judgment of that body. Petitioner need not look further
than that. The Rules of Court apply only by analogy or in a suppletory character.[23]

Consider the provision in Section 16, Rule 39 of the Rules of Court on third-party claims:
SEC. 16. Proceedings where property claimed by third person.If the property levied on is
claimed by any person other than the judgment obligor or his agent, and such person makes
an affidavit of his title thereto or right to the possession thereof, stating the grounds of such
right or title, and serves the same upon the officer making the levy and a copy thereof upon
the judgment obligee, the officer shall not be bound to keep the property, unless such
judgment obligee, on demand of the officer, files a bond approved by the court to indemnify
the third-party claimant in a sum not less than the value of the property levied on. In case of
disagreement as to such value, the same shall be determined by the court issuing the writ of
execution. No claim for damages for the taking or keeping of the property may be enforced
against the bond unless the action therefor is filed within one hundred twenty (120) days
from the date of the filing of the bond.

The officer shall not be liable for damages for the taking or keeping of the property, to any
third-party claimant if such bond is filed. Nothing herein contained shall prevent such
claimant or any third person from vindicating his claim to the property in a separate action, or
prevent the judgment obligee from claiming damages in the same or a separate action
against a third-party claimant who filed a frivolous or plainly spurious claim.

When the writ of execution is issued in favor of the Republic of the Philippines, or any officer
duly representing it, the filing of such bond shall not be required, and in case the sheriff or
levying officer is sued for damages as a result of the levy, he shall be represented by the
Solicitor General and if held liable therefor, the actual damages adjudged by the court shall
be paid by the National Treasurer out of such funds as may be appropriated for the purpose.

On the other hand, the NLRC Manual on the Execution of Judgment deals specifically with
third-party claims in cases brought before that body. It defines a third-party claim as one
where a person, not a party to the case, asserts title to or right to the possession of the
property levied upon.[24] It also sets out the procedure for the filing of a third-party claim, to
wit:
SECTION 2. Proceedings. If property levied upon be claimed by any person other than the
losing party or his agent, such person shall make an affidavit of his title thereto or right to the
possession thereof, stating the grounds of such right or title and shall file the same with the
sheriff and copies thereof served upon the Labor Arbiter or proper officer issuing the writ and
upon the prevailing party. Upon receipt of the third party claim, all proceedings with respect
to the execution of the property subject of the third party claim shall automatically be
suspended and the Labor Arbiter or proper officer issuing the writ shall conduct a hearing
with due notice to all parties concerned and resolve the validity of the claim within ten (10)
working days from receipt thereof and his decision is appealable to the Commission within
ten (10) working days from notice, and the Commission shall resolve the appeal within same
period.
There is no doubt in our mind that petitioners complaint is a third- party claim within the
cognizance of the NLRC. Petitioner may indeed be considered a third party in relation to the
property subject of the execution vis--vis the Labor Arbiters decision. There is no question
that the property belongs to petitioner and his wife, and not to the corporation. It can be said
that the property belongs to the conjugal partnership, not to petitioner alone. Thus, the
property belongs to a third party, i.e., the conjugal partnership. At the very least, the Court
can consider that petitioners wife is a third party within contemplation of the law.

The Courts pronouncements in Deltaventures Resources, Inc. v. Hon. Cabato[25] are


instructive:

Ostensibly the complaint before the trial court was for the recovery of possession and
injunction, but in essence it was an action challenging the legality or propriety of the levy vis-
a-vis the alias writ of execution, including the acts performed by the Labor Arbiter and the
Deputy Sheriff implementing the writ. The complaint was in effect a motion to quash the writ
of execution of a decision rendered on a case properly within the jurisdiction of the Labor
Arbiter, to wit: Illegal Dismissal and Unfair Labor Practice. Considering the factual setting, it
is then logical to conclude that the subject matter of the third party claim is but an incident of
the labor case, a matter beyond the jurisdiction of regional trial courts.

xxxx

x x x. Whatever irregularities attended the issuance an execution of the alias writ of


execution should be referred to the same administrative tribunal which rendered the
decision. This is because any court which issued a writ of execution has the inherent power,
for the advancement of justice, to correct errors of its ministerial officers and to control its
own processes.

The broad powers granted to the Labor Arbiter and to the National Labor Relations
Commission by Articles 217, 218 and 224 of the Labor Code can only be interpreted as
vesting in them jurisdiction over incidents arising from, in connection with or relating to labor
disputes, as the controversy under consideration, to the exclusion of the regular courts.[26]

There is no denying that the present controversy arose from the complaint for illegal
dismissal. The subject matter of petitioners complaint is the execution of the NLRC decision.
Execution is an essential part of the proceedings before the NLRC. Jurisdiction, once
acquired, continues until the case is finally terminated,[27] and there can be no end to the
controversy without the full and proper implementation of the commissions directives.
Further underscoring the RTCs lack of jurisdiction over petitioners complaint is Article 254 of
the Labor Code, to wit:

ART. 254. INJUNCTION PROHIBITED. No temporary or permanent injunction or restraining


order in any case involving or growing out of labor disputes shall be issued by any court or
other entity, except as otherwise provided in Articles 218 and 264 of this Code.

That said, however, we resolve to put an end to the controversy right now, considering the
length of time that has passed since the levy on the property was made.

Petitioner claims that the property sought to be levied does not belong to PACSI, the
judgment debtor, but to him and his wife. Since he was sued in a representative capacity,
and not in his personal capacity, the property could not be made to answer for the judgment
obligation of the corporation.

The TCT[28] of the property bears out that, indeed, it belongs to petitioner and his wife.
Thus, even if we consider petitioner as an agent of the corporation and, therefore, not a
stranger to the case such that the provision on third-party claims will not apply to him, the
property was registered not only in the name of petitioner but also of his wife. She stands to
lose the property subject of execution without ever being a party to the case. This will be
tantamount to deprivation of property without due process.

Moreover, the power of the NLRC, or the courts, to execute its judgment extends only to
properties unquestionably belonging to the judgment debtor alone.[29] A sheriff, therefore,
has no authority to attach the property of any person except that of the judgment debtor.[30]
Likewise, there is no showing that the sheriff ever tried to execute on the properties of the
corporation.

In sum, while petitioner availed himself of the wrong remedy to vindicate his rights,
nonetheless, justice demands that this Court look beyond his procedural missteps and grant
the petition.

WHEREFORE, the foregoing premises considered, the petition is GRANTED. The Decision
dated February 21, 2008 and the Resolution dated July 25, 2008 of the Court of Appeals in
CA-G.R. CEB-SP. No. 02370 are hereby REVERSED and SET ASIDE, and a new one is
entered declaring NULL and VOID (1) the Order of the Regional Trial Court of Negros
Occidental dated December 27, 2006 in Civil Case No. 06-12927; and (2) the Notice of Sale
on Execution of Personal Property dated December 4, 2006 over the property covered by
Transfer Certificate of Title No. T-140167, issued by the Acting Sheriff of the National Labor
Relations Commission.

SO ORDERED.

FIRST DIVISION

G.R. No. 199617, September 02, 2015

REY TORRECAMPO, JOVITA V. CALMA, WINTHROP MARK N. BARBA AND LEA TAPNIO,
Petitioners, v. NATIONAL LABOR RELATIONS COMMISSION (NLRC), MATSUSHITA
ELECTRONIC PHILS. CORP., SEIICHI FUKAMI, IROKAZU UMEDA, BARTOLOME
SARANGGAYA, JAIME TIONGSON AND SINICHI JOSONE, Respondents.

RESOLUTION

PEREZ, J.:

For resolution of the Court is the instant Petition for Review on Certiorari1 filed by petitioners
Rey Torrecampo, Jovita V. Calma, Winthrop Mark N. Barba and Leo Q. Tapnio seeking to
reverse and set aside the Resolutions dated 12 July 20112 and 6 December 20113 of the
Court of Appeals (CA) in CA-G.R. SP. No. 119590. The assailed resolutions dismissed the
Petition for Certiorari filed by petitioners for having been filed out of time rendering the
National Labor Relations Commission (NLRC) Decision dated 5 January 2011 and its
Resolution dated 7 March 2011 final and executory.

In a Resolution dated 6 December 2011, the appellate court refused to reconsider its earlier
Resolution.

The Antecedents

On 12 July 2011, the CA issued a resolution dismissing the Petition for Certiorari filed by
petitioners for failing to perfect their petition for certiorari within the 60-day reglementary
period provided under the Revised Rules of Court. In dismissing their petition, the appellate
court found that not only did petitioners fail to perfect their petition for certiorari on time, they
likewise attempted to mislead the appellate court as to the date of the receipt of the assailed
decision, thus:
For one, petitioners failed to provide a cogent and compelling reason in order for [u]s to
extend liberality and exempt them from a strict application of the rules. For another, apart
from the obvious fact that the petition was filed late, petitioners had still the gall to state that
their petition is x x x "filed within the 60-day reglementary period." Not only that, what is
worse is that petitioners put the blame on the housemaid of their counsel on record for the
late filing of their petition alleging that "x x x the housemaid of their counsel on record
erroneously informed them x x x" that the assailed NLRC Resolution was received on March
27, 2011 instead of March 21, 2011.4
After finding that petitioners received copy of the assailed NLRC Resolution on 21 March
2011 and not on 27 March 2011, and, without any justifiable cause to warrant the relaxation
of the rules, the CA arrived at the inevitable conclusion that petitioners failed to seasonably
file their appeal, viz.:
Petitioners allege that a copy of the NLRC Resolution dated March 7, 2011 was received on
March 21, 2011. Under the afore-quoted Rule, petitioners have 60 days from March 21, 2011
or until May 20, 2011 within which to file a petition for certiorari. However, a perusal of the
rollo of this case shows that it was filed only on May 25, 2011 or five (5) days after the
expiration of the 60-day reglementary period provided by the afore-quoted Rule.
Undoubtedly, therefore, the instant petition is filed out of time.5 (Emphasis supplied)
Aggrieved by the foregoing resolution, petitioners timely interposed a Motion for
Reconsideration which was also denied by the appellate court in a Resolution dated 6
December 2011.

Issue

Petitioners are now before this Court via this instant Petition for Review on Certiorari praying
that the CA Resolutions be reversed and set aside on the ground that:
THE COURT OF APPEALS GRAVELY ERRED IN STRICTLY APPLYING THE RULES OF
PROCEDURE AND PLEADING AGAINST THE PETITIONERS.
The Court's Ruling

Petitioners, in assailing the appellate court's decision, argue that strict application of the
rules in light of the extant merits of this case is not justified under the circumstances. They
argue that the delay in assailing the NLRC Resolution was mainly attributable to their former
counsel who, for unknown reasons and without promptly informing them, deserted their
case. In justifying their original claim that they received the NLRC resolution on 21 March
2011, the petitioners reasoned that they merely relied on the declarations made by the
housemaid of their counsel. Petitioners plead for the liberal interpretation of the rule on
perfection of appeal so that the case. can be threshed out on the merits, and not on
technicality.

We deny the petition.


Under Section 4 of Rule 65 of the 1997 Rules of Civil Procedure,6certiorari should be
instituted within a period of 60 days from notice of the judgment, order, or resolution sought
to be assailed.7 The 60-day period is inextendible to avoid any unreasonable delay that
would violate the constitutional rights of parties to a speedy disposition of their case.8 Rules
of procedure must be faithfully complied with and should not be discarded with the mere
expediency of claiming substantial merit.9 As a corollary, rules prescribing the time for doing
specific acts or for taking certain proceedings are considered absolutely indispensable to
prevent needless delays and to orderly and promptly discharge judicial business. By their
very nature, these rules are regarded as mandatory.10

It is beyond dispute that petitioners received a copy of the 7 March 2011 NLRC Resolution
denying their Motion for Reconsideration on 21 March 2011. Applying the rules set under
Section 4 of the Revised Rules of Court as amended by A.M. No. 07-7-12-SC,11 petitioners
had until 20 May 2011 within which to file their petition for certiorari. The filing of the petition
before the CA five days later or on 25 May 2011 resulted to the non-perfection of the appeal
rendering the decision of the NLRC final and executory.

We are not persuaded by petitioners' argument that they should not be bounded by their
counsel's negligence in not taking the proper course of action after the issuance by the
NLRC of an adverse decision. Petitioners are not entirely blameless as they were not vigilant
in monitoring the progress of their case.

The general rule is that a client is bound by the counsel's acts, including even mistakes in
the realm of procedural technique. The rationale for the rule is that a counsel, once retained,
holds the implied authority to do all acts necessary or, atleast, incidental to the prosecution
and management of the suit in behalf of his client, such that any act or omission by counsel
within the scope of the authority is regarded, in the eyes of the law, as the act or omission of
the client himself. A recognized exception to the rule is when the reckless or gross
negligence of the counsel deprives the client of due process of law. For the exception to
apply, however, the gross negligence should not be accompanied by the client's own
negligence or malice, considering that the client has the duty to be vigilant in respect of his
interests by keeping himself up-to-date on the status of the case. Failing in this duty, the
client should suffer whatever adverse judgment is rendered against him.12

Truly, a litigant bears the responsibility to monitor the status of his case, for no prudent party
leaves the fate of his case entirely in the hands of his lawyer. It is the client's duty to be in
contact with his lawyer from time to time in order to be informed of the progress and
developments of his case; hence, to merely rely on the bare reassurances of his lawyer that
everything is being taken care of is not enough.13

Well settled is the doctrine that appeal is not a constitutional right, but a mere statutory
privilege. Hence parties who seek to avail themselves of it must comply with the statutes and
rules allowing it.14 There is no doubt that no petition for certiorari was perfected by the
petitioners within the 60-day period under Rule 65 of the Revised Rules of Court.
Consequently, the Court of Appeals did not commit an error in dismissing the appeal of the
petitioners on account of non-perfection of the same.

WHEREFORE, premises considered, the instant petition is hereby DENIED. The assailed
Resolutions of the Court of Appeals are hereby AFFIRMED.

SO ORDERED.