[G.R. No. 120567. March 20, 1998.

PHILIPPINE AIRLINES, INC., petitioner, vs.

NATIONAL LABOR RELATIONS COMMISSION,
FERDINAND PINEDA and GOGFREDO
CABLING, respondents.

Ferdinand D. Macaibay for petitioner.

Factoran Tria & De leon Law Office for private respondents.

SYNOPSIS

Private respondents are flight stewards of the petitioner. Both

were dismissed from the service for their alleged involvement in
the currency smuggling in Hong Kong. Aggrieved by said
dismissal, private respondents filed with the NLRC a petition for
injunction. The NLRC issued a temporary mandatory injunction
enjoining petitioner to cease and desist from enforcing its
Memorandum of Dismissal. Hence, this petition for certiorari. CaTSEA

The power of the NLRC to issue an injunctive writ originates

from "any labor dispute" upon application by a party thereof,
which application if not granted "may cause grave or irreparable
damage to any party or render ineffectual any decision in favor
of such party." In the present case, there is no labor dispute
between the petitioner and private respondents as there has yet
been no complaint for illegal dismissal filed with the labor arbiter
by the private respondents against the petitioner. The petition
for injunction directly filed before the NLRC is in reality an
action for illegal dismissal. As such, the petition should have bee
filed with the labor arbiter who has the original and exclusive
jurisdiction to hear and decide cases involving all workers. Thus,
the NLRC exceeded its jurisdiction when it issued the assailed
Order granting private respondents' petition for injunction and
ordering the petitioner to reinstate private respondents.

SYLLABUS

1. REMEDIAL LAW; PROVISIONAL REMEDIES; INJUNCTION

ELUCIDATED. Generally, injunction is preservative remedy
for the protection of one's substantive rights or interest. It is not
a cause of action in itself but merely a provisional remedy, an
adjunct to a main suit. It is resorted to only when there is a
pressing necessity to avoid injurious consequences which cannot
be remedied under any standard of compensation. The
application of the injunctive writ rests upon the existence of an
emergency or of a special reason before the main case be
regularly heard. The essential conditions for granting such
temporary injunctive relief are that the complaint alleges facts
which appear to be sufficient to constitute a proper basis for
injunction and that on the entire showing from the contending
parties, the injunction is reasonably necessary to protect the
legal rights of the plaintiff pending the litigation. Injunction is
also a special equitable relief granted only in cases where there is
no plain, adequate and complete remedy at law.

2. LABOR AND SOCIAL LEGISLATION; NATIONAL LABOR

RELATIONS COMMISSION; POWER TO ISSUE AN INJUNCTIVE
WRIT ORIGINATES FROM A LABOR DISPUTE. In labor cases,
under Article 218 of the Labor Code and Sec. 1, Rule XI of the
New Rules of Procedure of the NLRC, the power of the NLRC to
issue an injunctive writ originates from "any labor dispute" upon
application by a party thereof, which application if not granted
"may cause grave or irreparable damage to any party or render
ineffectual any decision in favor of such party."

3. ID.; LABOR DISPUTE, DEFINED. The term "labor dispute"

is defined as "any controversy or matter concerning terms and
conditions of employment or the association or representation or
persons in negotiating, fixing, maintaining, changing, or
arranging the terms and conditions of employment regardless of
whether or not the disputants stand in the proximate relation of
employers and employees." The term "controversy" is likewise
defines as "a litigated question; adversary proceeding in a court
of law; a civil action or suit, either at law or in equity; a
justiciable dispute." A "justiciable controversy" is one involving an
active antagonistic assertion of a legal right on one side and
denial thereof on the other concerning a real, and not a mere
theoretical question or issue."

4. ID.; LABOR ARBITER; ORIGINAL & EXCLUSIVE

JURISDICTION OVER ACTIONS FOR ILLEGAL DISMISSAL.
The petition for injunction directly filed before the NLRC is in
reality an action for illegal dismissal. As such, the petition should
have been filed with the labor arbiter who has the original and
exclusive jurisdiction to hear and decide cases involving all
workers, whether agricultural or non-agricultural under Art.
217 (a) of the Labor Code. The jurisdiction conferred being
both original andexclusive means no other officer or tribunal can
take cognizance of, hear and decide any of the cases therein
enumerated. The only exceptions are where the Secretary of
Labor and Employment or the NLRC exercises the power of
compulsory arbitration, or the parties agree to submit the
matter to voluntary arbitration pursuant to Article 263 (g) of
the Labor Code. AaCEDS

5. ID.; NLRC; JURISDICTION; APPELLATE NATURE. The

NLRC shall have exclusive appellate jurisdiction over all cases
decided by labor arbiters as provided in Article 217(b) of the
Labor Code. Hence, the jurisdiction of the NLRC in illegal
dismissal cases is appellate in nature and, therefore, it cannot
entertain the private respondents' petition for injunction which
challenges the dismissal orders of petitioner. Article 218(e) of
the Labor Code does not provide blanket authority to the NLRC
or any of its divisions to issue writs of injunction, considering
that Section 1 of Rule XI of the New Rules of Procedure of the
NLRC makes injunction only an ancillary remedy in ordinary
labor disputes."

6. ID.; ADEQUATE REMEDY; CASE AT BAR. An "adequate"

remedy at law has been defined as one "that affords relief with
reference to the matter in controversy, and which is appropriate
to the particular circumstances of the case." It is a remedy which
is equally beneficial, speedy and sufficient which will promptly
relieve the petitioner from the injurious effects of the acts
complained of. Under the Labor Code, the ordinary and proper
recourse of an illegally dismissed employees is to file a complaint
for illegal dismissal with the labor arbiter. In Lamb vs. Phipps, we
ruled that if the remedy is specifically provided by law, it is
presumed to be adequate. Moreover, the preliminary mandatory
injunction prayed for the private respondents in their petition
before the NLRC can also be entertained by the labor arbiter who,
as shown earlier, has the ancillary power to issue preliminary
injunctions or restraining orders as an incident in the cases
pending before him in order to preserve the rights of the parties
during the pendency of the case.

7. REMEDIAL LAW; PROVISIONAL REMEDIES; INJUNCTION;

IRREPARABLE INJURY; NOT APPRECIATED IN CASE AT BAR.
Private respondents' petition for injunction reveals that it has
no basis since there is no showing of any urgency or irreparable
injury which the private respondents might suffer. An injury is
considered irreparable if it is of such constant and frequent
recurrence that no fair and reasonable redress can be had
therefor in a court of law, or where there is no standard by
which their amount can be measured with reasonable accuracy,
that is, it is not susceptible of mathematical computation. It is
considered irreparable injury when it cannot be adequately
compensated in damages due to the nature of the injury itself or
the nature of the right or property injured or when there exists
no certain pecuniary standard for the measurement of damages.
In the case at bar, the alleged injury which private respondents
stand to suffer by reason of their alleged illegal dismissal can be
adequately compensated and therefore, there exists no
"irreparable injury," as defined above which would necessitate
the issuance of the injunction sought for. Article 279 of the Labor
Code provides that an employee who is unjustly dismissed from
employment shall be entitled to reinstatement, without loss of
seniority rights and other privileges, and to the payment of full
backwages, inclusive of allowances, and to other benefits or their
monetary equivalent computed from the time his compensation
was withheld from him up to the time of his actual
reinstatement.
8. ID.; ID.; NOT FOUND IN LABOR CASES. An injunction, as
an extraordinary remedy, is not favored in labor law considering
that it generally has not proved to be an effective means of
settling labor disputes. It has been the policy of the State to
encourage the parties to use the non-judicial process of
negotiation and compromise, mediation and arbitration. Thus,
injunctions may be issued only in cases of extreme necessity based
on legal grounds clearly established, after due consultations or
hearing and when all efforts at conciliation are exhausted which
factors, however, are clearly absent in the present case.

D E CI S I O N

MARTINEZ, J : p

Can the National Labor Relations Commission (NLRC), even

without a complaint for illegal dismissal filed before the labor
arbiter, entertain an action for injunction and issue such writ
enjoining petitioner Philippine Airlines, Inc. from enforcing its
Orders of dismissal against private respondents, and ordering
petitioner to reinstate the private respondents to their previous
positions?

This is the pivotal issue presented before us in this petition for

certiorari under Rule 65 of the Revised Rules of Court which
seeks the nullification of the injunctive writ dated April 3, 1995
issued by the NLRC and the Order denying petitioner's motion
for reconsideration on the ground that the said Orders were
issued in excess of jurisdiction. LLcd
Private respondents are flight stewards of the petitioner. Both
were dismissed from the service for their alleged involvement in
the April 3, 1993 currency smuggling in Hong Kong.

Aggrieved by said dismissal, private respondents filed with the

NLRC a petition 1 for injunction praying that:

"I. Upon filing of this Petition, a temporary restraining

order be issued, prohibiting respondents (petitioner
herein) from effecting or enforcing the Decision dated
Feb. 22, 1995, or to reinstate petitioners temporarily
while a hearing on the propriety of the issuance of a writ
of preliminary injunction is being undertaken;

"II. After hearing, a writ of preliminary mandatory

injunction be issued ordering respondent to reinstate
petitioners to their former positions pending the hearing
of this case, or, prohibiting respondent from enforcing
its Decision dated February 22, 1995 while this case is
pending adjudication;

"III. After hearing, that the writ of preliminary

injunction as to the reliefs sought for be made
permanent, that petitioners be awarded full backwages,
moral damages of PHP 500,000.00 each and
exemplary damages of PHP 500,000.00 each,
attorney's fees equivalent to ten percent of whatever
amount is awarded, and the costs of suit."

On April 3, 1995, the NLRC issued a temporary mandatory

injunction 2 enjoining petitioner to cease and desist from
enforcing its February 22, 1995 Memorandum of dismissal. In
granting the writ, the NLRC considered the following facts, to
wit:

". . . that almost two (2) years ago, i.e. on April 15, 1993,
the petitioners were instructed to attend an
investigation by respondent's 'Security and Fraud
Prevention Sub-Department' regarding an April 3,
1993 incident in Hongkong at which Joseph Abaca,
respondent's Avionics Mechanic in Hongkong 'was
intercepted by the Hongkong Airport Police at Gate
05 . . . the ramp area of the Kai Tak International
Airport while . . . about to exit said gate carrying a . . .
bag said to contain some 2.5 million pesos in Philippine
Currencies. That at the Police Station, Mr. Abaca
claimed that he just found said plastic bag at the Skybed
Section of the arrival flight PR300/03 April 93,' where
petitioners served as flight stewards of said flight
PR300; . . . the petitioners sought 'a more detailed
account of what this HKG incident is all about'; but
instead, the petitioners were administratively charged,
'a hearing' on which 'did not push through' until almost
two (2) years after, i.e. 'on January 20, 1995 . . . where
a confrontation between Mr. Abaca and petitioners
herein was compulsorily arranged by the respondent's
disciplinary board' at which hearing, Abaca was made to
identify petitioners as co-conspirators; that despite the
fact that the procedure of identification adopted by
respondent's Disciplinary Board was anomalous 'as there
was no one else in the line-up (which could not be called
one) but petitioners . . . Joseph Abaca still had difficulty
in identifying petitioner Pineda as his co-conspirator,
and as to petitioner Cabling, he was implicated and
pointed by Abaca only after respondent's Atty.
Cabatuando pressed the former to identify petitioner
Cabling as co-conspirator'; that with the hearing reset
to January 25, 1995, 'Mr. Joseph Abaca finally gave
exculpating statements to the board in that he cleared
petitioners from any participation or from being the
owners of the currencies, and at which hearing Mr.
Joseph Abaca volunteered the information that the real
owner of said money was one who frequented his
headquarters in Hongkong to which information, the
Disciplinary Board Chairman, Mr. Ismael Khan,' opined
'for the need for another hearing to go to the bottom of
the incident'; that from said statement, it appeared
'that Mr. Joseph Abaca was the courier, and had another
mechanic in Manila who hid the currency at the plane's
skybed for Abaca to retrieve in Hongkong, which
findings of how the money was found was previously
confirmed by Mr. Joseph Abaca himself when he was
first investigated by the Hongkong authorities'; that just
as petitioners 'thought that they were already fully
cleared of the charges, as they no longer received any
summons/notices on the intended 'additional hearings'
mandated by the Disciplinary Board,' they were
surprised to receive on February 23, 1995 . . . a
Memorandum dated February 22, 1995' terminating
their services for alleged violation of respondent's Code
of Discipline 'effective, immediately'; that sometime . . .
first week of March, 1995, petitioner Pineda received
another Memorandum from respondent Mr. Juan
Paraiso, advising him of his termination effective
February 3, 1995, likewise for violation of respondent's
Code of Discipline; . . . "
In support of the issuance of the writ of temporary injunction,
the NLRC adopted the view that: (1) private respondents cannot
be validly dismissed on the strength of petitioner's Code of
Discipline which was declared illegal by this Court in the case of
PAL, Inc. vs. NLRC, (G.R. No. 85985), promulgated August 13,
1993, for the reason that it was formulated by the petitioner
without the participation of its employees as required in R.A.
6715, amending Article 211 of the Labor Code; (2) the
whimsical, baseless and premature dismissals of private
respondents which "caused them grave and irreparable injury" is
enjoinable as private respondents are left "with no speedy and
adequate remedy at law" except the issuance of a temporary
mandatory injunction; (3) the NLRC is empowered under Article
218 (e) of the Labor Code not only to restrain any actual or
threatened commission of any or all prohibited or unlawful acts
but also to require the performance of a particular act in any
labor dispute, which, if not restrained or performed forthwith,
may cause grave or irreparable damage to any party; and (4)
the temporary mandatory power of the NLRC was recognized by
this Court in the case of Chemo-Technische Mfg., Inc. Employees
Union, DFA, et. al. vs. Chemo-Technische Mfg., Inc. [G.R. No.
107031, January 25, 1993].

On May 4, 1995, petitioner moved for

reconsideration 3 arguing that the NLRC erred:

1. . . . in granting a temporary injunction order

when it has no jurisdiction to issue an
injunction or restraining order since this may
be issued only under Article 218 of the Labor
 Code if the case involves or arises from labor
disputes;

2. . . . in granting a temporary injunction order

when the termination of private respondents
have long been carried out;

3. . . . in ordering the reinstatement of private

respondents on the basis of their mere
allegations, in violation of PAL's right to due
process;

4 . . . . in arrogating unto itself management

prerogative to discipline its employees
and divesting the labor arbiter of its original
and exclusive jurisdiction over illegal dismissal
cases;

5. . . . in suspending the effects of termination when

such action is exclusively within the
jurisdiction of the Secretary of Labor;

6 . . . . in issuing the temporary injunction in the

absence of any irreparable or substantial
injury to both private respondents.

On May 31, 1995, the NLRC denied petitioner's motion for

reconsideration, ruling: LLcd

"The respondent (now petitioner), for one, cannot

validly claim that we cannot exercise our injunctive
power under Article 218 (e) of the Labor Code on the
pretext that what we have here is not a labor dispute as
long as it concedes that as defined by law, a"(1) 'Labor
Dispute' includes any controversy or matter
concerning terms or conditions of employment." If
security of tenure, which has been breached by
respondent and which, precisely, is sought to be
protected by our temporary mandatory injunction (the
core of controversy in this case) is not a "term or
condition of employment", what then is?

xxx xxx xxx

Anent respondent's second argument . . ., Article 218 (e)

of the Labor Code . . . empowered the Commission not
only to issue a prohibitory injunction, but a mandatory
("to require the performance") one as well. Besides, as
earlier discussed, we already exercised (on August 23,
1991) this temporary mandatory injunctive power in
the case of "Chemo-Technische Mfg., Inc. Employees
Union-DFA et. al. vs. Chemo-Technische Mfg., Inc., et.
al." (supra) and effectively enjoined one (1) month old
dismissals by Chemo-Technische and that our aforesaid
mandatory exercise of injunctive power, when
questioned through a petition for certiorari, was
sustained by the Third Division of the Supreme court per
its Resolution dated January 25, 1993.

xxx xxx xxx

Respondent's fourth argument that petitioner's remedy

for their dismissals is 'to file an illegal dismissal case
against PAL which cases are within the original and
exclusive jurisdiction of the Labor Arbiter' is ignorant. In
requiring as a condition for the issuance of a 'temporary
or permanent injunction'- '(4) That complainant has no
adequate remedy at law;' Article 218 (e) of the Labor
Code clearly envisioned adequacy, and not
plain availability of a remedy at law as an alternative
bar to the issuance of an injunction. An illegal dismissal
suit (which takes, on its expeditious side, three (3) years
before it can be disposed of) while available as a remedy
under Article 217 (a) of the Labor Code, is certainly not
an 'adequate; remedy at law. Ergo, it cannot, as an
alternative remedy, bar our exercise of that injunctive
power given us by Article 218 (e) of the Code.

xxx xxx xxx

Thus, Article 218 (e), as earlier discussed [which

empowers this Commission 'to require the performance
of a particular act' (such as our requiring respondent 'to
cease and desist from enforcing' its whimsical
memoranda of dismissals and 'instead to reinstate
petitioners to their respective position held prior to their
subject dismissals') in 'any labor dispute which, if not . . .
performed forthwith, may cause grave and irreparable
damage to any party'] stands as the sole 'adequate
remedy at law' for petitioners here.

Finally, the respondent, in its sixth argument claims

that even if its acts of dismissing petitioners 'may be
great, still the same is capable of compensation', and
that consequently, 'injunction need not be issued where
adequate compensation at law could be obtained'.
Actually, what respondent PAL argues here is that we
need not interfere in its whimsical dismissals of
petitioners as, after all, it can pay the latter its
backwages . . .

But just the same, we have to stress that Article 279

does not speak alone of backwages as an obtainable relief
for illegal dismissal; that reinstatement as well is the
concern of said law, enforceable when necessary,
 through Article 218 (e) of the Labor Code (without need
of an illegal dismissal suit under Article 217 (a) of the
Code) if such whimsical and capricious act of illegal
dismissal will 'cause grave or irreparable injury to a
party'. . . ." 4

Hence, the present recourse.

Generally, injunction is a preservative remedy for the protection

of one's substantive rights or interest. It is not a cause of action
in itself but merely a provisional remedy, an adjunct to a main
suit. It is resorted to only when there is a pressing necessity to
avoid injurious consequences which cannot be remedied under
any standard of compensation. The application of the injunctive
writ rests upon the existence of an emergency or of a special
reason before the main case be regularly heard. The essential
conditions for granting such temporary injunctive relief are that
the complaint alleges facts which appear to be sufficient to
constitute a proper basis for injunction and that on the entire
showing from the contending parties, the injunction is
reasonably necessary to protect the legal rights of the plaintiff
pending the litigation. 5 Injunction is also a special equitable relief
granted only in cases where there is no plain, adequate and
complete remedy at law. 6

In labor cases, Article 218 of the Labor Code empowers the

NLRC

"(e) To enjoin or restrain any actual or threatened

commission of any or all prohibited or unlawful acts or
to require the performance of a particular act in any
labor dispute which, if not restrained or performed
 forthwith, may cause grave or irreparable damage to
any party or render ineffectual any decision in favor of
such party; . . . (Emphasis Ours)

Complementing the above-quoted provision, Sec. 1, Rule XI of

the New Rules of Procedure of the NLRC, pertinently provides as
follows:

"Section 1. Injunction in Ordinary Labor Dispute. A

preliminary injunction or a restraining order may be
granted by the Commission through its divisions
pursuant to the provisions of paragraph (e) of Article
218 of the Labor Code, as amended, when it is
established on the bases of the sworn allegations in the
petition that the acts complained of, involving or arising
from any labor dispute before the Commission, which, if
not restrained or performed forthwith, may cause grave
or irreparable damage to any party or render
ineffectual any decision in favor of such party.

xxx xxx xxx

The foregoing ancillary power may be exercised by the

Labor Arbiters only as an incident to the cases pending
before them in order to preserve the rights of the parties
during the pendency of the case, but excluding labor
disputes involving strikes or lockout. 7 (Emphasis Ours)

From the foregoing provisions of law, the power of the NLRC to

issue an injunctive writ originates from "any labor dispute" upon
application by a party thereof, which application if not granted
"may cause grave or irreparable damage to any party or render
ineffectual any decision in favor of such party."
The term "labor dispute" is defined as "any controversy or
matter concerning terms and conditions of employment or the
association or representation of persons in negotiating, fixing,
maintaining, changing, or arranging the terms and conditions of
employment regardless of whether or not the disputants stand
in the proximate relation of employers and employees." 8

The term "controversy" is likewise defined as "a litigated

question; adversary proceeding in a court of law; a civil action or
suit, either at law or in equity; a justiciable dispute." 9

A "justiciable controversy" is "one involving an active antagonistic

assertion of a legal right on one side and a denial thereof on the
other concerning a real, and not a mere theoretical question or
issue." 10

Taking into account the foregoing definitions, it is an essential

requirement that there must first be a labor dispute between the
contending parties before the labor arbiter. In the present case,
there is no labor dispute between the petitioner and private
respondents as there has yet been no complaint for illegal
dismissal filed with the labor arbiter by the private respondents
against the petitioner.

The petition for injunction directly filed before the NLRC is in

reality an action for illegal dismissal. This is clear from the
allegations in the petition which prays for; reinstatement of
private respondents; award of full backwages, moral and
exemplary damages; and attorney's fees. As such, the petition
should have been filed with the labor arbiter who has the original
and exclusive jurisdiction to hear and decide the following cases
involving all workers, whether agricultural or non-agricultural:
 (1) Unfair labor practice;

(2) Termination disputes;

(3) If accompanied with a claim for reinstatement,

those cases that workers may file involving
wages, rates of pay, hours of work and other
terms and conditions of employment;

(4) Claims for actual, moral, exemplary and other

forms of damages arising from the
employer-employee relations;

(5) Cases arising from any violation of Article 264

of this Code, including questions involving the
legality of strikes and lockouts; and

(6) Except claims for employees compensation,

social security, medicare and maternity
benefits, all other claims arising from
employer-employee relations, including those
of persons in domestic or household service,
involving an amount exceeding five thousand
pesos (P5,000.00), whether or not
accompanied with a claim for
reinstatement. 11

The jurisdiction conferred by the foregoing legal provision to the

labor arbiter is both original and exclusive, meaning, no other
officer or tribunal can take cognizance of, hear and decide any of
the cases therein enumerated. The only exceptions are where the
Secretary of Labor and Employment or the NLRC exercises the
power of compulsory arbitration, or the parties agree to submit
the matter to voluntary arbitration pursuant to Article 263 (g)
of the Labor Code, the pertinent portions of which reads:

"(g) When, in his opinion, there exists a labor dispute

causing or likely to cause a strike or lockout in an
industry indispensable to the national interest, the
Secretary of Labor and Employment may assume
jurisdiction over the dispute and decide it or certify the
same to the Commission for compulsory arbitration.
Such assumption or certification shall have the effect of
automatically enjoining the intended or impending
strike or lockout as specified in the assumption or
certification order. If one has already taken place at the
time of assumption or certification, all striking or locked
out employees shall immediately resume operations and
readmit all workers under the same terms and
conditions prevailing before the strike or lockout. The
Secretary of Labor and Employment or the Commission
may seek the assistance of law enforcement agencies to
ensure compliance with this provision as well as with
such orders as he may issue to enforce the same.

xxx xxx xxx"

On the other hand, the NLRC shall have

exclusive appellate jurisdiction over all cases decided by labor
arbiters as provided in Article 217(b) of the Labor Code. In short,
the jurisdiction of the NLRC in illegal dismissal cases is appellate
in nature and, therefore, it cannot entertain the private
respondents' petition for injunction which challenges the
dismissal orders of petitioner. Article 218(e) of the Labor Code
does not provide blanket authority to the NLRC or any of its
divisions to issue writs of injunction, considering that Section 1
of Rule XI of the New Rules of Procedure of the NLRC makes
injunction only an ancillary remedy in ordinary labor
disputes" 12

Thus, the NLRC exceeded its jurisdiction when it issued the

assailed Order granting private respondents' petition for
injunction and ordering the petitioner to reinstate private
respondents.

The argument of the NLRC in its assailed Order that to file an

illegal dismissal suit with the labor arbiter is not an "adequate"
remedy since it takes three (3) years before it can be disposed of,
is patently erroneous. An "adequate" remedy at law has been
defined as one "that affords relief with reference to the matter
in controversy, and which is appropriate to the particular
circumstances of the case." 13 It is a remedy which is equally
beneficial, speedy and sufficient which will promptly relieve the
petitioner from the injurious effects of the acts complained of. 14

Under the Labor Code, the ordinary and proper recourse of an

illegally dismissed employee is to file a complaint for illegal
dismissal with the labor arbiter. 15 In the case at bar, private
respondents disregarded this rule and directly went to the NLRC
through a petition for injunction praying that petitioner be
enjoined from enforcing its dismissal orders. In Lamb
vs. Phipps, 16 we ruled that if the remedy is specifically provided
by law, it is presumed to be adequate. Moreover, the preliminary
mandatory injunction prayed for by the private respondents in
their petition before the NLRC can also be entertained by the
labor arbiter who, as shown earlier, has the ancillary power to
issue preliminary injunctions or restraining orders as an incident
in the cases pending before him in order to preserve the rights of
the parties during the pendency of the case. 17

Furthermore, an examination of private respondents' petition

for injunction reveals that it has no basis since there is no
showing of any urgency or irreparable injury which the private
respondents might suffer. An injury is considered irreparable if
it is of such constant and frequent recurrence that no fair and
reasonable redress can be had therefor in a court of law, 18 or
where there is no standard by which their amount can be
measured with reasonable accuracy, that is, it is not susceptible
of mathematical computation. It is considered irreparable injury
when it cannot be adequately compensated in damages due to
the nature of the injury itself or the nature of the right or
property injured or when there exists no certain pecuniary
standard for the measurement of damages. 19

In the case at bar, the alleged injury which private respondents

stand to suffer by reason of their alleged illegal dismissal can be
adequately compensated and therefore, there exists no
"irreparable injury," as defined above which would necessitate
the issuance of the injunction sought for. Article 279 of the Labor
Code provides that an employee who is unjustly dismissed from
employment shall be entitled to reinstatement, without loss of
seniority rights and other privileges, and to the payment of full
backwages, inclusive of allowances, and to other benefits or their
monetary equivalent computed from the time his compensation
was withheld from him up to the time of his actual
reinstatement.
The ruling of the NLRC that the Supreme Court upheld its power
to issue temporary mandatory injunction orders in the case of
Chemo-Technische Mfg., Inc. Employees Union-DFA, et. al. vs.
Chemo-Technische Mfg., Inc. et. al., docketed as G.R. No.
107031, is misleading. As correctly argued by the petitioner, no
such pronouncement was made by this Court in said case. On
January 25, 1993, we issued a Minute Resolution in the subject
case stating as follows:

"Considering the allegations contained, the issues raised

and the arguments adduced in the petition for certiorari,
as well as the comments of both public and private
respondents thereon, and the reply of the petitioners to
private respondent's motion to dismiss the petition, the
Court Resolved to DENY the same for being
premature." LLcd

It is clear from the above resolution that we did not in anyway

sustain the action of the NLRC in issuing such temporary
mandatory injunction but rather we dismissed the petition as
the NLRC had yet to rule upon the motion for reconsideration
filed by petitioner. Thus, the minute resolution denying the
petition for being prematurely filed.

Finally, an injunction, as an extraordinary remedy, is not

favored in labor law considering that it generally has not proved
to be an effective means of settling labor disputes. 20 It has been
the policy of the State to encourage the parties to use the
non-judicial process of negotiation and compromise, mediation
and arbitration. 21Thus, injunctions may be issued only in cases
of extreme necessity based on legal grounds clearly established,
after due consultations or hearing and when all efforts at
conciliation are exhausted which factors, however, are clearly
absent in the present case.

WHEREFORE, the petition is hereby GRANTED. The assailed

Orders dated April 3, 1995 and May 31, 1995, issued by the
National Labor Relations Commission (First Division), in NLRC
NCR IC No. 000563-95, are hereby REVERSED and SET
ASIDE.

SO ORDERED.

||| (Philippine Airlines, Inc. v. National Labor Relations

Commission, G.R. No. 120567, [March 20, 1998], 351 PHIL
172-188)

[G.R. No. 152611. August 5, 2003.]

LAND BANK OF THE

PHILIPPINES, petitioner,vs.SEVERINO LISTANA,
SR., respondent.

Gonzales, Maranion & Associates for petitioners.

Armand A. Duran for respondent.

SYNOPSIS

Respondent herein voluntarily offered to sell his land to the

government through the Department of Agrarian Reform. After
summary administrative proceedings, the Department of
Agrarian Reform Adjudication Board (DARAB) set the just
compensation of the land and ordered the petitioner bank to pay
the said amount to the herein respondent. Respondent filed a
Motion for Contempt with the PARAD when the petitioner failed
to comply with the writ of execution. PARAD granted the
motion for contempt, and later on directed the issuance of an
arrest order against petitioner's manager. Petitioner filed a
petition for injunction of the arrest order, which was approved
by the trial court. After the respondent's motion for
reconsideration was denied by the court, it filed a special civil
action for certiorari with the Court of Appeals (CA).The
appellate court nullified the order of the trial court. Hence, this
petition. cSHATC

The Supreme Court granted the present petition. According to

the Court, quasi judicial agencies that have the power to cite
persons for indirect contempt can only do so by initiating them
in the proper Regional Trial Court. In this case, it was the PARAD
that cited petitioner's manager with indirect contempt. Hence,
the contempt proceedings initiated through an unverified
motion for contempt filed by the respondent with the PARAD
were invalid.

SYLLABUS

1. REMEDIAL LAW; PROVISIONAL REMEDIES; PRELIMINARY

INJUNCTION; THE GRANT THEREOF IS IN THE NATURE OF AN
INTERLOCUTORY ORDER WHICH IS UNAPPEALABLE;
PROPER REMEDY AVAILABLE. Generally, injunction is a
preservative remedy for the protection of one's substantive right
or interest. It is not a cause of action in itself but merely a
provisional remedy, an adjunct to a main suit. Thus, it has been
held that an order granting a writ of preliminary injunction is an
interlocutory order. As distinguished from a final order which
disposes of the subject matter in its entirety or terminates a
particular proceeding or action, leaving nothing else to be done
but to enforce by execution what has been determined by the
court, an interlocutory order does not dispose of a case
completely, but leaves something more to be adjudicated upon.
Clearly, the grant of a writ of preliminary injunction is in the
nature of an interlocutory order, hence, unappealable. Therefore,
respondent's special civil action for certiorari before the Court of
Appeals was the correct remedy under the
circumstances. Certiorari is available where there is no appeal,
or any plain, speedy, and adequate remedy in the ordinary
course of law. The order granting a writ of preliminary
injunction is an interlocutory order; as such, it cannot by itself be
subject of an appeal or a petition for review on certiorari.The
proper remedy of a party aggrieved by such an order is to bring
an ordinary appeal from an adverse judgment in the main case,
citing therein the grounds for assailing the interlocutory order.
However, the party concerned may file a petition
forcertiorari where the assailed order is patently erroneous and
appeal would not afford adequate and expeditious relief.

2. ID.;SPECIAL CIVIL ACTIONS; CONTEMPT; TWO WAYS OF

CHARGING INDIRECT CONTEMPT. There are only two ways
a person can be charged with indirect contempt, namely, (1)
through a verified petition; and (2) by order or formal charge
initiated by the court motu proprio.

3. ID.;ID.;ID.;INDIRECT CONTEMPT
OF QUASI-JUDICIAL ENTITIES SHOULD STILL BE DECIDED
BY THE REGIONAL TRIAL COURT; VIOLATION IN CASE AT BAR.
Quasi-judicial agencies that have the power to cite persons for
indirect contempt pursuant to Rule 71 of the Rules of Court can
only do so by initiating them in the proper Regional Trial Court.
It is not within their jurisdiction and competence to decide the
indirect contempt cases. These matters are still within the
province of the Regional Trial Courts. In the present case, the
indirect contempt charge was filed, not with the Regional Trial
Court, but with the PARAD, and it was the PARAD that cited Mr.
Lorayes with indirect contempt. Hence, the contempt
proceedings initiated through an unverified "Motion for
Contempt" filed by the respondent with the PARAD were invalid
for the following reasons: First,the Rules of Court clearly require
the filing of a verified petition with the Regional Trial Court,
which was not complied with in this case. The charge was not
initiated by the PARAD motu proprio;rather, it was by a motion
filed by respondent. Second, neither the PARAD nor the DARAB
have jurisdiction to decide the contempt charge filed by the
respondent. The issuance of a warrant of arrest was beyond the
power of the PARAD and the DARAB. Consequently, all the
proceedings that stemmed from respondent's "Motion for
Contempt," specifically the Orders of the PARAD dated August
20, 2000 and January 3, 2001 for the arrest of Alex A. Lorayes,
are null and void.

D E CI S I O N

YNARES-SANTIAGO, J : p

This is a petition for review of the decision of the Court of Appeals

in CA-G.R. SP No. 65276 dated December 11, 2001, 1 which
annulled the Orders dated January 29, 2001 and April 2,
2001 of the Regional Trial Court of Sorsogon, Sorsogon, Branch
51. 2

Respondent Severino Listana is the owner of a parcel of land

containing an area of 246.0561 hectares, located in Inlagadian,
Casiguran, Sorsogon, covered by Transfer Certificate of Title No.
T-20193. He voluntarily offered to sell the said land to the
government, through the Department of Agrarian Reform
(DAR), 3 under Section 20 ofR.A. 6657, also known as
the Comprehensive Agrarian Reform Law of 1988 (CARL). The
DAR valued the property at P5,871,689.03, which was
however rejected by the respondent. Hence, the Department of
Agrarian Reform Adjudication Board (DARAB) of Sorsogon
commenced summary administrative proceedings to determine
the just compensation of the land.

On October 14, 1998, the DARAB rendered a Decision, the

dispositive portion of which reads as follows:

WHEREFORE, taking into consideration the foregoing

computation, the prior valuation made by the Land
Bank of the Philippines is hereby set aside and a new
valuation in the amount of TEN MILLION NINE
HUNDRED FIFTY SIX THOUSAND NINE HUNDRED
SIXTY THREE PESOS AND 25 CENTAVOS
(P10,956,963.25) for the acquired area of 240.9066
hectares. The Land Bank of the Philippines is hereby
ordered to pay the same to the landowner in the
manner provided for by law.

SO ORDERED. 4

Thereafter, a Writ of Execution was issued by the PARAD

directing the manager of Land Bank to pay the respondent the
aforesaid amount as just compensation in the manner provided
by law. 5

On September 2, 1999, respondent filed a Motion for Contempt

with the PARAD, alleging that petitioner Land Bank failed to
comply with the Writ of Execution issued on June 18, 1999. He
argued that such failure of the petitioner to comply with the writ
of execution constitutes contempt of the DARAB.

Meanwhile, on September 6, 1999, petitioner Land Bank filed

a petition with the Regional Trial Court of Sorsogon, Branch 52,
sitting as a Special Agrarian Court (SAC), for the determination
of just compensation, as provided for in Section 16 (f) of
the CARL. 6

On August 20, 2000, the PARAD issued an Order granting the

Motion for Contempt, as follows:

WHEREFORE, premises considered, the motion for

contempt is hereby GRANTED, thus ALEX A. LORAYES,
as Manager of respondent LAND BANK, is cited for
indirect contempt and hereby ordered to be imprisoned
until he complies with the Decision of the case dated
October 14, 1998.

SO ORDERED. 7

Petitioner Land Bank filed a Motion for Reconsideration of the

aforequoted Order, 8 which was however denied by the PARAD
on September 20, 2000. 9 Thus, petitioner filed a Notice of
Appeal with the PARAD, manifesting its intention to appeal the
decision to the DARAB Central, pursuant to Rule XI, Section 3 of
the 1994 DARAB New Rules of Procedure. 10
On the other hand, the Special Agrarian Court dismissed the
petition for the determination of just compensation filed by
petitioner Land Bank in an Order dated October 25, 2000.
Petitioner's Motion for Reconsideration of said dismissal was
likewise denied. STcAIa

In a Resolution dated November 27, 2000, PARAD Capellan

denied due course to petitioner's Notice of Appeal and ordered
the issuance of an Alias Writ of Execution for the payment of the
adjudged amount of just compensation to respondent. 11 On
January 3, 2001, he directed the issuance of an arrest order
against Manager Alex A. Lorayes. 12

Petitioner Land Bank filed a petition for injunction before the

Regional Trial Court of Sorsogon, Sorsogon, with application for
the issuance of a writ of preliminary injunction to restrain
PARAD Capellan from issuing the order of arrest. 13 The case
was raffled to Branch 51 of said court. On January 29, 2001,
the trial court issued an Order, the dispositive portion of which
reads:

WHEREFORE, premises considered, the respondent

Provincial Adjudicator of the DARAB or anyone acting
in its stead is enjoined as it is hereby enjoined from
enforcing its order of arrest against Mr. Alex A. Lorayes
pending the final termination of the case before RTC
Branch 52, Sorsogon upon the posting of a cash bond by
the Land Bank.

SO ORDERED. 14

Respondent filed a Motion for Reconsideration of the trial court's

order, which was denied in an Order dated April 2, 2001. 15
Thus, respondent filed a special civil action for certiorari with
the Court of Appeals, 16 docketed as CA-G.R. SP No. 65276. On
December 11, 2001, the Court of Appeals rendered the assailed
decision which nullified the Orders of the Regional Trial Court of
Sorsogon, Sorsogon, Branch 51.

Hence, the instant petition for review on the following issues:

I. WHETHER OR NOT THE CA DEPARTED FROM THE

ACCEPTED COURSE OF JUDICIAL
PROCEEDINGS IN ENTERTAINING THE
RESPONDENT'S SPECIAL CIVIL ACTION FOR
CERTIORARI TO QUESTION THE FINAL ORDER
OF THE RTC WHICH, HOWEVER, WAS SUBJECT
TO APPEAL UNDER THE 1997 RULES OF CIVIL
PROCEDURE.

II. WHETHER OR NOT THE CA DECIDED IN A WAY NOT

IN ACCORD WITH LAW AND SUBSTANTIAL
JUSTICE, IN ANNULLING AND SETTING ASIDE
THE RTC FINAL ORDER OF INJUNCTION,
CONSIDERING THAT:

A. THE PARAD DID NOT ACQUIRE COMPETENT

JURISDICTION OVER THE CONTEMPT
PROCEEDINGS INASMUCH AS IT WAS
INITIATED BY MERE MOTION FOR
CONTEMPT AND NOT BY VERIFIED
PETITION, IN VIOLATION OF SECTION 2,
RULE XI OF THE NEW DARAB RULES OF
PROCEDURE AND OF RULE 71 OF THE
REVISED RULES OF COURT.
B. THE PARAD CONTEMPT ORDER CANNOT BE
CONSIDERED FINAL AND EXECUTORY,
BECAUSE THE PARAD ITSELF
DISALLOWED THE PETITIONER'S APPEAL
TO THE DARAB CENTRAL OFFICE, IN
DISREGARD OF THE BASIC RULE THAT
THE APPELLATE TRIBUNAL DETERMINES
THE MERITS OF THE APPEAL.

C. THE PARAD ORDER OF ARREST AGAINST

LBP MANAGER ALEX LORAYES WAS IN
GROSS AND PATENT VIOLATION OF HIS
PERSONAL, CONSTITUTIONAL AND CIVIL
RIGHTS AGAINST UNJUST ARREST AND
IMPRISONMENT, INASMUCH AS, UNDER
THE 1987 CONSTITUTION, ONLY JUDGES
CAN ISSUE WARRANTS OF ARREST
AGAINST CITIZENS, AND THE PROPER
SUBJECT OF THE CONTEMPT
PROCEEDING WAS THE PETITIONER
ITSELF AND NOT THE LBP MANAGER,
AND YET THE CONTEMPT ORDER WAS
AGAINST THE LBP MANAGER.

D. THE PARAD ORDER OF CONTEMPT WAS

PATENTLY NULL AND VOID, AS IT
ATTEMPTED TO ENFORCE COMPLIANCE
WITH THE PARAD DECISION THAT WAS
ADMITTEDLY NOT FINAL AND
EXECUTORY, AS THE MATTER OF JUST
COMPENSATION BEFORE THE SPECIAL
AGRARIAN COURT WAS ON APPEAL WITH
THE COURT OF APPEALS. 17
As regards the first issue, petitioner submits that the special civil
action for certiorari filed by respondent before the Court of
Appeals to nullify the injunction issued by the trial court was
improper, considering that the preliminary injunction issued by
the trial court was a final order which is appealable to the Court
of Appeals via a notice of appeal. 18

Petitioner's submission is untenable. Generally, injunction is a

preservative remedy for the protection of one's substantive right
or interest. It is not a cause of action in itself but merely a
provisional remedy, an adjunct to a main suit. Thus, it has been
held that an order granting a writ of preliminary injunction is an
interlocutory order. As distinguished from a final order which
disposes of the subject matter in its entirety or terminates a
particular proceeding or action, leaving nothing else to be done
but to enforce by execution what has been determined by the
court, an interlocutory order does not dispose of a case
completely, but leaves something more to be adjudicated
upon. 19

Clearly, the grant of a writ of preliminary injunction is in the

nature of an interlocutory order, hence, unappealable. Therefore,
respondent's special civil action forcertiorari before the Court of
Appeals was the correct remedy under the circumstances.
Certiorari is available where there is no appeal, or any plain,
speedy, and adequate remedy in the ordinary course of law. 20

The order granting a writ of preliminary injunction is an

interlocutory order; as such, it cannot by itself be subject
of an appeal or a petition for review on certiorari. The
proper remedy of a party aggrieved by such an order is
to bring an ordinary appeal from an adverse judgment
 in the main case, citing therein the grounds for assailing
the interlocutory order. However, the party concerned
may file a petition for certiorari where the assailed order
is patently erroneous and appeal would not afford
adequate and expeditious relief. 21

On the substantive issue of whether the order for the arrest of

petitioner's manager, Mr. Alex Lorayes by the PARAD, was
valid, Rule XVIII of the 2003 DARAB Rules reads, in pertinent
part:

SECTION 2. Indirect Contempt. The Board or any of

its members or its Adjudicator may also cite and punish
any person for indirect contempt on any of the grounds
and in the manner prescribed under Rule 71 of the
Revised Rules of Court.

In this connection, Rule 71, Section 4 of the 1997 Rules of Civil

Procedure, which deals with the commencement of indirect
contempt proceedings, provides:

Sec. 4. How proceedings commenced. Proceedings for

indirect contempt may be initiated motu proprio by the
court against which the contempt was committed by an
order or any other formal charge requiring the
respondent to show cause why he should not be punished
for contempt.

In all other cases, charges for indirect contempt shall be

commenced by a verified petition with supporting
particulars and certified true copies of documents or
papers involved therein, and upon full compliance with
the requirements for filing initiatory pleadings for civil
actions in the court concerned. If the contempt charges
arose out of or are related to a principal action pending
 in the court, the petition for contempt shall allege that
fact but said petition shall be docketed, heard and
decided separately, unless the court in its discretion
orders the consolidation of the contempt charge and the
principal action for joint hearing and decision. ITECSH

xxx xxx xxx

The requirement of a verified petition is mandatory. Justice

Florenz D. Regalado, Vice-Chairman of the Revision of the Rules
of Court Committee that drafted the 1997 Rules of Civil
Procedure explains this requirement:

1. This new provision clarifies with a regulatory norm

the proper procedure for commencing contempt
proceedings. While such proceeding has been classified as
a special civil action under the former Rules, the
heterogeneous practice, tolerated by the courts, has
been for any party to file a mere motion without paying
any docket or lawful fees therefor and without
complying with the requirements for initiatory
pleadings, which is now required in the second
paragraph of this amended section.

xxx xxx xxx

Henceforth, except for indirect contempt proceedings

initiated motu proprio by order of or a formal charge by
the offended court, all charges shall be commenced by a
verified petition with full compliance with the
requirements therefor and shall be disposed of in
accordance with the second paragraph of this section. 22

Therefore, there are only two ways a person can be charged with
indirect contempt, namely, (1) through a verified petition; and
(2) by order or formal charge initiated by the court motu
proprio.

In the case at bar, neither of these modes was adopted in

charging Mr. Lorayes with indirect contempt.

More specifically, Rule 71, Section 12 of the 1997 Rules of Civil

Procedure, referring to indirect contempt against quasi-judicial
entities, provides:

Sec. 12. Contempt against quasi-judicial entities.

Unless otherwise provided by law, this Rule shall apply to
contempt committed against persons, entities, bodies or
agencies exercising quasi-judicial functions, or shall have
suppletory effect to such rules as they may have adopted
pursuant to authority granted to them by law to punish
for contempt. The Regional Trial Court of the place
wherein the contempt has been committed shall have
jurisdiction over such charges as may be filed therefore.
(emphasis supplied)

The foregoing amended provision puts to rest once and for all the
questions regarding the applicability of these rules to
quasi-judicial bodies, to wit:

1. This new section was necessitated by the holdings

that the former Rule 71 applied only to superior and
inferior courts and did not comprehend contempt
committed against administrative or quasi judicial
officials or bodies, unless said contempt is clearly
considered and expressly defined as contempt of
court,as is done in the second paragraph of Sec. 580,
Revised Administrative Code. The provision referred to
contemplates the situation where a person, without
lawful excuse, fails to appear, make oath, give testimony
 or produce documents when required to do so by the
official or body exercising such powers. For such violation,
said person shall be subject to discipline, as in the case of
contempt of court, upon application of the official or
body with the Regional Trial Court for the corresponding
sanctions. 23(emphasis in the original)

Evidently, quasi-judicial agencies that have the power to cite

persons for indirect contempt pursuant to Rule 71 of the Rules
of Court can only do so by initiating them in the proper Regional
Trial Court. It is not within their jurisdiction and competence to
decide the indirect contempt cases. These matters are still within
the province of the Regional Trial Courts. In the present case, the
indirect contempt charge was filed, not with the Regional Trial
Court, but with the PARAD, and it was the PARAD that cited Mr.
Lorayes with indirect contempt.

Hence, the contempt proceedings initiated through an unverified

"Motion for Contempt" filed by the respondent with the PARAD
were invalid for the following reasons:24 First,the Rules of Court
clearly require the filing of a verified petition with the Regional
Trial Court, which was not complied with in this case. The charge
was not initiated by the PARAD motu proprio;rather, it was by
a motion filed by respondent. Second,neither the PARAD nor
the DARAB have jurisdiction to decide the contempt charge filed
by the respondent. The issuance of a warrant of arrest was
beyond the power of the PARAD and the DARAB. Consequently,
all the proceedings that stemmed from respondent's "Motion for
Contempt," specifically the Orders of the PARAD dated August
20, 2000 and January 3, 2001 for the arrest of Alex A. Lorayes,
are null and void.
WHEREFORE, in view of the foregoing, the petition for review is
GRANTED. The Decision of the Court of Appeals in CA-G.R. SP
No. 65276, dated December 11, 2001, is REVERSED and SET
ASIDE. The Order of the Regional Trial Court of Sorsogon,
Sorsogon, Branch 51, dated January 29, 2001, which enjoined
the Provincial Adjudicator of the DARAB or anyone acting in its
stead from enforcing its order of arrest against Mr. Alex A.
Lorayes pending the final termination of the case before Regional
Trial Court of Sorsogon, Sorsogon, Branch 52, is REINSTATED.

SO ORDERED.

||| (Land Bank of the Phils. v. Listana, Sr., G.R. No. 152611,
[August 5, 2003], 455 PHIL 750-761)

[G.R. No. 176085. February 8, 2012.]

FEDERICO S. ROBOSA, ROLANDO E. PANDY,

NOEL D. ROXAS, ALEXANDER ANGELES,
VERONICA GUTIERREZ, FERNANDO EMBAT, and
NANETTE H. PINTO, petitioners, vs. 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.

DECISION
BRION, J : p

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. SHTcDE

On the same day, CTMI issued another

memorandum 5 informing the company's sales representatives
and sales drivers of the new system in the Salon Business Group's
selling operations.

The union asked for the withdrawal and deferment of CTMI's

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 union's 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 NLRC's

August 23, 1991 resolution. They instead moved to dissolve the
TRO and opposed the union's 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 NLRC's 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. AcSCaI

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 quoorder; 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 Court's
affirmation of the TRO and of the preliminary injunction.

The petitioners assail the CA's reliance on the Court's 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 Court's 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 NLRC's 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. TSacAE
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 CTMI's
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 Court's 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. ESHcTD

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 NLRC's 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] cTEICD

Is the NLRC's 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 Court's 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 NLRC's 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, . . . 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 . . . (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. . . . CaSHAc

All sales vehicles were ordered to be turned over to

management and the same were already sold[.] . . . [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.

xxx xxx xxx

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 . . . . 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 Employer's
Monthly Report on Employees
Termination/dismissals/suspension . . . (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: SEcITC

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 NLRC's 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 attorney's 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 CTMI's manufacturing and marketing operations,
occurred after the NLRC's 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
CTMI's 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 CTMI's 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
CTMI's 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. CIcEHS

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 . . . 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. SATDHE

WHEREFORE, premises considered, we hereby DENY the

petition for lack of merit and AFFIRM the assailed resolutions of
the Court of Appeals.

SO ORDERED.

||| (Robosa v. National Labor Relations Commission, G.R. No.

176085, [February 8, 2012], 681 PHIL 446-462)

[G.R. Nos. 191288 & 191304. February 29, 2012.]

MANILA ELECTRIC COMPANY, petitioner, vs. JAN

CARLO GALA, respondent.

DECISION

BRION, J : p

We resolve the petition for review on certiorari, 1 seeking to

annul the decision 2 dated August 25, 2009 and the
resolution 3 dated February 10, 2010 of the Court of Appeals
(CA) rendered in CA-G.R. SP Nos. 105943 and 106021.

The Antecedents

The facts are summarized below.

On March 2, 2006, respondent Jan Carlo Gala commenced
employment with the petitioner Meralco Electric
Company (Meralco) as a probationary lineman. He was assigned
at Meralco's Valenzuela Sector. He initially served as member of
the crew of Meralco's Truck No. 1823 supervised by Foreman
Narciso Matis. After one month, he joined the crew of Truck No.
1837 under the supervision of Foreman Raymundo Zuiga, Sr.

On July 27, 2006, barely four months on the job, Gala was
dismissed for alleged complicity in pilferages of Meralco's
electrical supplies, particularly, for the incident which took place
on May 25, 2006. On that day, Gala and other Meralco workers
were instructed to replace a worn-out electrical pole at the
Pacheco Subdivision in Valenzuela City. Gala and the other
linemen were directed to join Truck No. 1891, under the
supervision of Foreman Nemecio Hipolito.

When they arrived at the worksite, Gala and the other workers
saw that Truck No. 1837, supervised by Zuiga, was already
there. The linemen of Truck No. 1837 were already at work.
Gala and the other members of the crew of Truck No. 1891 were
instructed to help in the digging of a hole for the pole to be
installed.

While the Meralco crew was at work, one Noberto "Bing" Llanes,
a non-Meralco employee, arrived. He appeared to be known to
the Meralco foremen as they were seen conversing with him.
Llanes boarded the trucks, without being stopped, and took out
what were later found as electrical supplies. Aside from Gala, the
foremen and the other linemen who were at the worksite when
the pilferage happened were later charged with misconduct and
dishonesty for their involvement in the incident. CITDES
Unknown to Gala and the rest of the crew, a Meralco surveillance
task force was monitoring their activities and recording
everything with a Sony video camera. The task force was
composed of Joseph Aguilar, Ariel Dola and Frederick Riano.

Meralco called for an investigation of the incident and asked Gala

to explain. Gala denied involvement in the pilferage, contending
that even if his superiors might have committed a wrongdoing,
he had no participation in what they did. He claimed that: (1) he
was at some distance away from the trucks when the pilferage
happened; (2) he did not have an inkling that an illegal activity
was taking place since his supervisors were conversing with
Llanes, giving him the impression that they knew him; (3) he did
not call the attention of his superiors because he was not in a
position to do so as he was a mere lineman; and (4) he was just
following instructions in connection with his work and had no
control in the disposition of company supplies and materials. He
maintained that his mere presence at the scene of the incident
was not sufficient to hold him liable as a conspirator.

Despite Gala's explanation, Meralco proceeded with the

investigation and eventually terminated his employment on July
27, 2006. 4 Gala responded by filing an illegal dismissal
complaint against Meralco. 5

The Compulsory Arbitration Rulings

In a decision dated September 7, 2007, 6 Labor Arbiter

Teresita D. Castillon-Lora dismissed the complaint for lack of
merit. She held that Gala's participation in the pilferage of
Meralco's property rendered him unqualified to become a regular
employee.
Gala appealed to the National Labor Relations
Commission (NLRC). In its decision of May 2, 2008, 7 the NLRC
reversed the labor arbiter's ruling. It found that Gala had been
illegally dismissed, since there was "no concrete showing of
complicity with the alleged misconduct/dishonesty[.]" 8 The
NLRC, however, ruled out Gala's reinstatement, stating that his
tenure lasted only up to the end of his probationary period. It
awarded him backwages and attorney's fees.

Both parties moved for partial reconsideration; Gala, on the

ground that he should have been reinstated with full backwages,
damages and interests; and Meralco, on the ground that the
NLRC erred in finding that Gala had been illegally dismissed. The
NLRC denied the motions. Relying on the same grounds, Gala
and Meralco elevated the case to the CA through a petition
for certiorari under Rule 65 of the Rules of Court.

The CA Decision

In its decision of August 25, 2009, 9 the CA denied Meralco's

petition for lack of merit and partially granted Gala's petition. It
concurred with the NLRC that Gala had been illegally dismissed,
a ruling that was supported by the evidence. It opined that
nothing in the records show Gala's knowledge of or complicity in
the pilferage. It found insufficient the joint affidavit 10 of the
members of Meralco's task force testifying that Gala and two
other linemen knew Llanes.

The CA modified the NLRC decision of May 2, 2008 11 and

ordered Gala's reinstatement with full backwages and other
benefits. The CA also denied Meralco's motion for reconsideration.
Hence, the present petition for review on certiorari. 12 TIHDAa
 The Petition

The petition is anchored on the ground that the CA seriously

erred and gravely abused its discretion in

1. ruling that Gala was illegally dismissed; and

2. directing Gala's reinstatement despite his

probationary status.

Meralco faults the CA for not giving credit to its witnesses

Aguilar, Dola and Riano, and instead treated their joint
affidavit (Samasamang Sinumpaang Salaysay) as inconclusive to
establish Gala's participation in the pilferage of company
property on May 25, 2006. It submits that the affidavit of the
three Meralco employees disproves the CA's findings, considering
that their statements were based on their first-hand account of
the incident during their day-long surveillance on May 25,
2006. It points out that the three Meralco employees
categorically stated that all of the company's foremen and
linemen present at that time, including Gala, had knowledge of
the pilferage that was happening at the time. According to
Aguilar, Dola and Riano, the trucks' crew, including Gala, was
familiar with Llanes who acted as if his presence particularly,
that of freely collecting materials and supplies was a regular
occurrence during their operations.

Meralco maintains that Gala himself admitted in his own

testimony 13 that he had been familiar with Llanes even before
the May 25, 2006 incident where he saw Zuiga, the foreman
of Truck No. 1837, conversing with Llanes. Meralco submits that
Gala's admission, instead of demonstrating "his feigned
innocence," 14 even highlights his guilt, especially considering
that by design, his misfeasance assisted Llanes in pilfering
company property; Gala neither intervened to stop Llanes, nor
did he report the incident to the Meralco management.

Meralco posits that because of his undeniable knowledge of, if not

participation in, the pilferage activities done by their group, the
company was well within its right in terminating his
employment as a probationary employee for his failure to meet
the basic standards for his regularization. The standards, it
points out, were duly explained to him and outlined in his
probationary employment contract. For this reason and due to
the expiration of Gala's probationary employment, the CA
should not have ordered his reinstatement with full backwages.

Finally, Meralco argues that even if Gala was illegally dismissed,

he was entitled to just his backwages for the unexpired portion
of his employment contract with the company.

Gala's Case

By way of his Comment (to the Petition) dated September 2,

2010, 15 Gala asks for a denial of the petition because of (1)
serious and fatal infirmities in the petition; (2) unreliable
statements of Meralco's witnesses; and (3) clear lack of basis to
support the termination of his employment.

Gala contends, in regard to the alleged procedural defects of the

petition, that the "Verification and Certification," "Secretary's
Certificate" and "Affidavit of Service" do not contain the details
of the Community or Residence Tax Certificates of the affiants,
in violation of Section 6 of Commonwealth Act No. 465 (an Act
to Impose a Residence Tax). Additionally, the lawyers who signed
the petition failed to indicate their updated Mandatory
Continuing Legal Education (MCLE) certificate numbers, in
violation of the rules.

With respect to the merits of the case, Gala bewails Meralco's

reliance on the joint affidavit 16 of Aguilar, Dola and Riano not
only because it was presented for the first time on appeal to the
CA, but also because it was a mere afterthought. He explains that
Aguilar and Dola were the very same persons who executed a
much earlier sworn statement or transcription dated July 7,
2006. This earlier statement did not even mention Gala, but the
later joint affidavit "splashes GALA's name in a desperate
attempt to link him to an imagined wrongdoing." 17 AEDCHc

Zeroing in on what he believes as lack of credibility of Meralco's

evidence, Gala posits that there is clear lack of basis for the
termination of his employment. Thus, he wonders why Meralco
did not present as evidence the video footage of the entire
incident which it claims exists. He suspects that the footage was
adverse to Meralco's position in the case.

Gala adds that the allegations of a "reported pilferage" or

"rampant theft or pilferage" committed prior to May 25, 2006
by his superiors were not established, for even the labor arbiter
did not make a finding on the foremen's involvement in the
incident. He stresses that the same is true in his case as there is
no proof of his participation in the pilferage.

Gala further submits that even if he saw Llanes on May 25,

2006 at about the time of the occurrence of the pilferage near
or around the Meralco trucks, he was not aware that a
wrongdoing was being committed or was about to be committed.
He points out at that precise time, his superiors were much
nearer to the trucks than he as he was among the crew digging
a hole. He presumed at the time that his own superiors, being the
more senior employees, could be trusted to protect company
property.

Finally, Gala posits that his reinstatement with full backwages is

but a consequence of the illegality of his dismissal. He argues that
even if he was on probation, he is entitled to security of tenure.
Citing Philippine Manpower Services, Inc. v. NLRC, 18 he claims
that in the absence of any justification for the termination of his
probationary employment, he is entitled to continued
employment even beyond the probationary period. DETACa

The Court's Ruling

The procedural issue

Gala would want the petition to be dismissed outright on

procedural grounds, claiming that the "Verification and
Certification," "Secretary's Certificate" and "Affidavit of Service"
accompanying the petition do not contain the details of the
Community Tax Certificates of the affiants, and that the lawyers
who signed the petition failed to indicate their updated MCLE
certificate numbers, in violation of existing rules.

We stress at this point that it is the spirit and intention of labor

legislation that the NLRC and the labor arbiters shall use every
reasonable means to ascertain the facts in each case speedily and
objectively, without regard to technicalities of law or procedure,
provided due process is duly observed. 19 In keeping with this
policy and in the interest of substantial justice, we deem it
proper to give due course to the petition, especially in view of the
conflict between the findings of the labor arbiter, on the one
hand, and the NLRC and the CA, on the other. As we said in S.S.
Ventures International, Inc. v. S.S. Ventures Labor Union, 20 "the
application of technical rules of procedure in labor cases may be
relaxed to serve the demands of substantial justice."

The substantive aspect of the case

We find merit in the petition.

Contrary to the conclusions of the CA and the NLRC, there is

substantial evidence supporting Meralco's position that Gala had
become unfit to continue his employment with the company.
Gala was found, after an administrative investigation, to have
failed to meet the standards expected of him to become a regular
employee and this failure was mainly due to his "undeniable
knowledge, if not participation, in the pilferage activities done by
their group, all to the prejudice of the Company's interests."21

Gala insists that he cannot be sanctioned for the theft of

company property on May 25, 2006. He maintains that he had
no direct participation in the incident and that he was not
aware that an illegal activity was going on as he was at some
distance from the trucks when the alleged theft was being
committed. He adds that he did not call the attention of the
foremen because he was a mere lineman and he was focused on
what he was doing at the time. He argues that in any event, his
mere presence in the area was not enough to make him a
conspirator in the commission of the pilferage.

Gala misses the point. He forgets that as a probationary

employee, his overall job performance and his behavior were
being monitored and measured in accordance with the
standards (i.e., the terms and conditions) laid down in his
probationary employment agreement. 22 Under paragraph 8 of
the agreement, he was subject to strict compliance with, and
non-violation of the Company Code on Employee Discipline,
Safety Code, rules and regulations and existing policies. Par. 10
required him to observe at all times the highest degree of
transparency, selflessness and integrity in the performance of his
duties and responsibilities, free from any form of conflict or
contradicting with his own personal interest. TDAHCS

The evidence on record established Gala's presence in the

worksite where the pilferage of company property happened. It
also established that it was not only on May 25, 2006 that
Llanes, the pilferer, had been seen during a Meralco operation.
He had been previously noticed by Meralco employees, including
Gala (based on his admission), 23 in past operations. If Gala had
seen Llanes in earlier projects or operations of the company, it is
incredulous for him to say that he did not know why Llanes was
there or what Zuiga and Llanes were talking about. To our
mind, the Meralco crew (the foremen and the linemen) allowed
or could have even asked Llanes to be there during their
operations for one and only purpose to serve as their conduit
for pilfered company supplies to be sold to ready buyers outside
Meralco worksites.

The familiarity of the Meralco crew with Llanes, a non-Meralco

employee who had been present in Meralco field operations, does
not contradict at all but rather support the Meralco submission
that there had been "reported pilferage" or "rampant theft," by
the crew, of company property even before May 25, 2006. Gala
downplays this particular point with the argument that the
labor arbiter made no such finding as she merely assumed it to
be a fact, 24 her only "basis" being the statement that "may
natanggap na balita na ang mga crew na ito ay palagiang hindi
nagsasauli ng mga electric facilities na kanilang ginagamit o
pinapalitan bagkus ito ay ibinenta palabas."25 Gala impugns the
statement as hearsay. He also wonders why Meralco's supposed
"video footage" of the incident on May 25, 2006 was never
presented in evidence.

The established fact that Llanes, a non-Meralco employee, was

often seen during company operations, conversing with the
foremen, for reason or reasons connected with the ongoing
company operations, gives rise to the question: what was he
doing there? Apparently, he had been visiting Meralco worksites,
at least in the Valenzuela Sector, not simply to socialize, but to
do something else. As testified to by witnesses, he was picking up
unused supplies and materials that were not returned to the
company. From these factual premises, it is not hard to conclude
that this activity was for the mutual pecuniary benefit of himself
and the crew who tolerated the practice. For one working at the
scene who had seen or who had shown familiarity with Llanes (a
non-Meralco employee), not to have known the reason for his
presence is to disregard the obvious, or at least the very
suspicious.

We consider, too, and we find credible the company submission

that the Meralco crew who worked at the Pacheco Subdivision in
Valenzuela City on May 25, 2006 had not been returning
unused supplies and materials, to the prejudice of the company.
From all these, the allegedly hearsay evidence that is not
competent in judicial proceedings (as noted above), takes on
special meaning and relevance.
With respect to the video footage of the May 25, 2006 incident,
Gala himself admitted that he viewed the tape during the
administrative investigation, particularly in connection with the
accusation against him that he allowed Llanes (binatilyong may
kapansanan sa bibig) to board the Meralco trucks. 26 The choice
of evidence belongs to a party and the mere fact that the video
was shown to Gala indicates that the video was not an evidence
that Meralco was trying to suppress. Gala could have, if he had
wanted to, served a subpoena for the production of the video
footage as evidence. The fact that he did not does not strengthen
his case nor weaken the case of Meralco.

On the whole, the totality of the circumstances obtaining in the

case convinces us that Gala could not but have knowledge of the
pilferage of company electrical supplies on May 25, 2006; he
was complicit in its commission, if not by direct participation,
certainly, by his inaction while it was being perpetrated and by
not reporting the incident to company authorities. Thus, we find
substantial evidence to support the conclusion that Gala does not
deserve to remain in Meralco's employ as a regular employee. He
violated his probationary employment agreement, especially the
requirement for him "to observe at all times the highest degree
of transparency, selflessness and integrity in the performance of
their duties and responsibilities[.]" 27 He failed to qualify as a
regular employee. 28

For ignoring the evidence in this case, the NLRC committed

grave abuse of discretion and, in sustaining the NLRC, the CA
committed a reversible error.
WHEREFORE, premises considered, the petition is GRANTED.
The assailed decision and resolution of the Court of Appeals
are SET ASIDE. The complaint is DISMISSEDfor lack of merit. DcCEHI

SO ORDERED.

||| (Manila Electric Co. v. Gala, G.R. Nos. 191288 & 191304,
[February 29, 2012], 683 PHIL 356-368)

[G.R. No. 190724. March 12, 2014.]

DIAMOND TAXI and/or BRYAN

ONG, petitioners, vs. FELIPE LLAMAS,
JR., respondent.

DECISION

BRION, J : p

In this petition for review on certiorari, 1 we resolve the

challenge to the August 13, 2008 decision 2 and the November
27, 2009 resolution 3 of the Court of Appeals (CA)in CA-G.R.
CEB-S.P. No. 02623. This CA decision reversed and set aside the
May 30, 2006 resolution 4 of the National Labor Relations
Commission (NLRC) in NLRC Case No. V-000294-06 (RAB
VII-07-1574-05) that dismissed respondent Felipe Llamas,
Jr.'s appeal for non-perfection.

The Factual Antecedents

Llamas worked as a taxi driver for petitioner Diamond Taxi,

owned and operated by petitioner Bryan Ong. On July 18,
2005, Llamas filed before the Labor Arbiter (LA) a complaint
for illegal dismissal against the petitioners.

In their position paper, the petitioners denied dismissing Llamas.

They claimed that Llamas had been absent without official leave
for several days, beginning July 14, 2005 until August 1, 2005.
The petitioners submitted a copy of the attendance logbook to
prove that Llamas had been absent on these cited dates. They
also pointed out that Llamas committed several traffic
violations in the years 2000-2005 and that they had issued him
several memoranda for acts of insubordination and refusal to
heed management instructions. They argued that these acts
traffic violations, insubordination and refusal to heed
management instructions constitute grounds for the
termination of Llamas' employment.

Llamas failed to seasonably file his position paper. IDaEHC

On November 29, 2005, the LA rendered a

decision 5 dismissing Llamas' complaint for lack of merit. The LA
held that Llamas was not dismissed, legally or illegally. Rather,
the LA declared that Llamas left his job and had been absent for
several days without leave.

Llamas received a copy of this LA decision on January 5, 2006.

Meanwhile, he filed his position paper 6 on December 20, 2005.

In his position paper, Llamas claimed that he failed to

seasonably file his position paper because his previous counsel,
despite his repeated pleas, had continuously deferred compliance
with the LA's orders for its submission. Hence, he was forced to
secure the services of another counsel on December 19, 2005 in
order to comply with the LA's directive.
On the merits of his complaint, Llamas alleged that he had a
misunderstanding with Aljuver Ong, Bryan's brother and
operations manager of Diamond Taxi, on July 13, 2005 (July
13, 2005 incident). When he reported for work on July 14,
2005, Bryan refused to give him the key to his assigned taxi cab
unless he would sign a prepared resignation letter. He did not
sign the resignation letter. He reported for work again on July
15 and 16, 2005, but Bryan insisted that he sign the
resignation letter prior to the release of the key to his
assigned taxi cab. Thus, he filed the illegal dismissal complaint.

On January 16, 2006, Llamas filed before the LA a motion for

reconsideration of its November 29, 2005 decision. The LA
treated Llamas' motion as an appeal per Section 15, Rule V of
the 2005 Revised Rules of Procedure of the NLRC (2005 NLRC
Rules) (the governing NLRC Rules of Procedure at the
time Llamas filed his complaint before the LA).

In its May 30, 2006 resolution, 7 the NLRC dismissed for

non-perfection Llamas' motion for reconsideration treated as
an appeal. The NLRC pointed out that Llamasfailed to attach the
required certification of non-forum shopping per Section 4, Rule
VI of the 2005 NLRC Rules.

Llamas moved to reconsider the May 30, 2006 NLRC resolution;

he attached the required certification of non-forum shopping.

When the NLRC denied his motion for reconsideration 8 in its

August 31, 2006 resolution, 9 Llamas filed before the CA a
petition for certiorari. 10

The CA's ruling

In its August 13, 2008 decision, 11 the CA reversed and set
aside the assailed NLRC resolution. Citing jurisprudence, the CA
pointed out that non-compliance with the requirement on the
filing of a certificate of non-forum shopping, while mandatory,
may nonetheless be excused upon showing of manifest equitable
grounds proving substantial compliance. Additionally, in order
to determine if cogent reasons exist to suspend the rules of
procedure, the court must first examine the substantive aspect
of the case.

The CA pointed out that the petitioners failed to prove overt acts
showing Llamas' clear intention to abandon his job. On the
contrary, the petitioners placed Llamas in a situation where he
was forced to quit as his continued employment has been
rendered impossible, unreasonable or unlikely, i.e., making him
sign a resignation letter as a precondition for giving him the key
to his assigned taxi cab. To the CA, the petitioners' act amounted
to constructive dismissal. The CA additionally noted
that Llamasimmediately filed the illegal dismissal case that
proved his desire to return to work and negates the charge of
abandonment.

Further, the CA brushed aside the petitioners' claim

that Llamas committed several infractions that warranted his
dismissal. The CA declared that the petitioners should have
charged Llamas for these infractions to give the latter an
opportunity to explain his side. As matters then stood, they did
not charge him for these infractions; hence, the petitioners could
not have successfully used these as supporting grounds to
justify Llamas' dismissal on the ground of abandonment.
As the CA found equitable grounds to take exception from the
rule on certificate of non-forum shopping, it declared that the
NLRC had acted with grave abuse of discretion when it
dismissed Llamas' appeal purely on a technicality. To the CA, the
NLRC should have considered as substantially compliant with
this rule Llamas' subsequent submission of the required
certificate with his motion for reconsideration (of the NLRC's
May 30, 2006 resolution).

Accordingly, the CA ordered the petitioners to

pay Llamas separation pay, full backwages and other benefits
due the latter from the time of the dismissal up to the finality of
the decision. The CA awarded separation pay in lieu of
reinstatement because of the resulting strained work
relationship between Llamas and Bryan following the
altercation between the former and the latter's brother.

The petitioners filed the present petition after the CA denied

their motion for reconsideration 12 in the CA's November 27,
2009 resolution. 13 HICcSA

The Petition

The petitioners argue that the CA erred when it encroached on

the NLRC's exclusive jurisdiction to review the merits of the LA's
decision. To the petitioners, the CA should have limited its action
in determining whether grave abuse of discretion attended the
NLRC's dismissal of Llamas' appeal; finding that it did, the CA
should have remanded the case to the NLRC for further
proceedings.

Moreover, the petitioners point out that the NLRC did not
gravely abuse its discretion when it rejected Llamas' appeal.
They argue that the NLRC's action conformed with its rules and
with this Court's decisions that upheld the dismissal of an appeal
for failure to file a certificate of non-forum shopping.

Directly addressing the CA's findings on the dismissal issue, the

petitioners argue that they did not constructively
dismiss Llamas. They maintain that Llamas no longer reported
for work because of the several liabilities he incurred that would
certainly have, in any case, warranted his dismissal.

The Case for the Respondent

Llamas argues in his comment 14 that the CA correctly found

that the NLRC acted with grave abuse of discretion when it
maintained its dismissal of his appeal despite his subsequent filing
of the certificate of non-forum shopping. Quoting the CA's
ruling, Llamas argues that the NLRC should have given due
course to his appeal to avoid miscarriage of substantial justice.

On the issue of dismissal, Llamas argues that the CA correctly

reversed the LA's ruling that found him not dismissed, legally or
illegally. Relying on the CA's ruling, Llamaspoints out that the
petitioners bore the burden of proving the abandonment charge.
In this case, the petitioners failed to discharge their burden;
hence, his dismissal was illegal.

The Court's Ruling

We do not find the petition meritorious.

Preliminary considerations:
factual-issue-bar-rule

In this Rule 45 petition for review on certiorari, we review the

legal errors that the CA may have committed in the assailed
decision, in contrast with the review for jurisdictional error
undertaken in an original certiorari action. In reviewing the
Legal correctness of the CA decision in a labor case made 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. In other words, we have to be keenly aware that the
CA undertook a Rule 65 review, not a review on appeal, of the
challenged NLRC decision. In question form, the question that we
ask is: Did the CA correctly determine whether the NLRC
committed grave abuse of discretion in ruling on the case? 15

In addition, the Court's jurisdiction in a Rule 45 petition for

review on certiorari is limited to resolving only questions of law.
A question of law arises when the doubt or controversy concerns
the correct application of law or jurisprudence to a certain set of
facts. In contrast, a question of fact exists when the doubt or
controversy concerns the truth or falsehood of facts. 16

As presented by the petitioners, the petition before us involves

mixed questions of fact and law, with the core issue being one of
fact. Whether the CA, in ruling on the labor case before it under
an original certiorari action, can make its own factual
determination requires the consideration and application of law
and jurisprudence; it is essentially a question of law that a Rule
45 petition properly addresses.

In the context of this case, however, this legal issue is inextricably

linked with and cannot be resolved without the definitive
resolution of the core factual issue
whether Llamas abandoned his work or had been constructively
dismissed. As a proscribed question of fact, we generally cannot
address this issue, except to the extent necessary to
determine whether the CA correctly found that the NLRC acted
with grave abuse of discretion in dismissing Llamas' appeal on
purely technical grounds. HcTEaA

For raising mixed questions of fact and law, we deny the petition
outright. Even if this error were to be disregarded, however, we
would still deny the petition as we find the CA legally correct in
reversing the NLRC's resolution on the ground of grave abuse of
discretion.

The CA has ample authority to make its

own factual determination

We agree that remanding the case to the NLRC for factual

determination and decision of the case on the merits would have
been, ordinarily, a prudent approach. Nevertheless, the CA's
action on this case was not procedurally wrong and was not
without legal and jurisprudential basis.

In this jurisdiction, courts generally accord great respect and

finality to factual findings of administrative agencies, i.e., labor
tribunals, in the exercise of their quasi-judicial function. 17 These
findings, however, are not infallible. This doctrine espousing
comity to administrative findings of facts cannot preclude the
courts from reviewing and, when proper, disregarding these
findings of facts when shown that the administrative body
committed grave abuse of discretion by capriciously, whimsically
or arbitrarily disregarding evidence or circumstances of
considerable importance that are crucial or decisive of the
controversy. 18
Hence, in labor cases elevated to it via petition for certiorari, the
CA can grant this prerogative writ when it finds that the NLRC
acted with grave abuse of discretion in arriving at its factual
conclusions. To make this finding, the CA necessarily has to view
the evidence if only to determine if the NLRC ruling had basis in
evidence. It is in the sense and manner that the CA, in a Rule
65 certiorari petition before it, had to determine whether grave
abuse of discretion on factual issues attended the NLRC's
dismissal of Llamas' appeal. Accordingly, we do not find
erroneous the course that the CA took in
resolving Llamas' certiorari petition. The CA may resolve factual
issues by express legal mandate and pursuant to its equity
jurisdiction.

The NLRC committed grave abuse of

discretion in dismissing Llamas' appeal on
mere technicality

Article 223 (now Article 229) 19 of the Labor Code states that
decisions (or awards or orders) of the LA shall become final and
executory unless appealed to the NLRC within ten (10) calendar
days from receipt of the decision. Consistent with Article 223,
Section 1, Rule VI of the 2005 NLRC Rules also provides for a
ten (10)-day period for appealing the LA's decision. Under
Section 4 (a), Rule VI 20 of the 2005 NLRC Rules, the appeal
shall be in the form of a verified memorandum of appeal and
accompanied by proof of payment of the appeal fee, posting of
cash or surety bond (when necessary), certificate of non-forum
shopping, and proof of service upon the other parties. Failure of
the appealing party to comply with any or all of these requisites
within the reglementary period will render the LA's decision
final and executory.

Indisputably, Llamas did not file a memorandum of appeal from

the LA's decision. Instead, he filed, within the ten (10)-day
appeal period, a motion for reconsideration. Under Section 15,
Rule V of the 2005 NLRC Rules, motions for reconsideration
from the LA's decision are not allowed; they may, however, be
treated as an appeal provided they comply with the
requirements for perfecting an appeal. The NLRC
dismissed Llamas' motion for reconsideration treated as an
appeal for failure to attach the required certificate of non-forum
shopping per Section 4 (a), Rule VI of the 2005 NLRC Rules.

The requirement for a sworn certification of non-forum

shopping was prescribed by the Court under Revised Circular
28-91, 21 as amended by Administrative Circular No.
04-94, 22 to prohibit and penalize the evils of forum
shopping. Revised Circular 28-91, as amended
by Administrative Circular No. 04-94, requires a sworn
certificate of non-forum shopping to be filed with every petition,
complaint, application or other initiatory pleading filed before
the Court, the CA, or the different divisions thereof, or any other
court, tribunal or agency. HIaTCc

Ordinarily, the infirmity in Llamas' appeal would have been fatal

and would have justified an end to the case. A careful
consideration of the circumstances of the case, however,
convinces us that the NLRC should, indeed, have given due course
to Llamas' appeal despite the initial absence of the required
certificate. We note that in his motion for reconsideration of the
NLRC's May 30, 2006 resolution, Llamas attached the required
certificate of non-forum shopping.

Moreover, Llamas adequately explained, in his motion for

reconsideration, the inadvertence and presented a clear
justifiable ground to warrant the relaxation of the rules. To
recall, Llamas was able to file his position paper, through his new
counsel, only on December 20, 2005. He hired the new counsel
on December 19, 2005 after several repeated, albeit failed,
pleas to his former counsel to submit, on or before October 25,
2005 per the LA's order, the required position paper. On
November 29, 2005, however, the LA rendered a decision
that Llamas and his new counsel learned and received a copy of
only on January 5, 2006. Evidently, the LA's findings and
conclusions were premised solely on the petitioners' pleadings
and evidence. And, while not the fault of the LA, Llamas,
nevertheless, did not have a meaningful opportunity to present
his case, refute the contents and allegations in the petitioners'
position paper and submit controverting evidence.

Faced with these circumstances, i.e., Llamas' subsequent

compliance with the certification-against-forum-shopping
requirement; the utter negligence and inattention ofLlamas'
former counsel to his pleas and cause, and his vigilance in
immediately securing the services of a new counsel; Llamas' filing
of his position paper before he learned and received a copy of the
LA's decision; the absence of a meaningful opportunity
for Llamas to present his case before the LA; and the clear
merits of his case (that our subsequent discussion will show), the
NLRC should have relaxed the application of procedural rules in
the broader interests of substantial justice. Indeed, while the
requirement as to the certificate of non-forum shopping is
mandatory, this requirement should not, however, be
interpreted too literally and thus defeat the objective of
preventing the undesirable practice of forum-shopping. 23

Under Article 221 (now Article 227) 24 of the Labor Code,"the

Commission and its members and the Labor Arbiters shall use
every and all reasonable means to ascertain the facts in each case
speedily and objectively and without regard to technicalities of
law or procedure, all in the interest of due
process." 25 Consistently, we have emphasized that "rules of
procedure are mere tools designed to facilitate the attainment of
justice. A strict and rigid application which would result in
technicalities that tend to frustrate rather than promote
substantial justice should not be allowed . . . . No procedural rule
is sacrosanct if such shall result in subverting
justice." 26Ultimately, what should guide judicial action is that a
party is given the fullest opportunity to establish the merits of his
action or defense rather than for him to lose life, honor, or
property on mere technicalities. 27

Then, too, we should remember that "the dismissal of an

employee's appeal on purely technical ground is inconsistent
with the constitutional mandate on protection to
labor." 28 Under the Constitution 29 and the Labor Code, 30 the
State is bound to protect labor and assure the rights of workers
to security of tenure tenurial security being a preferred
constitutional right that, under these fundamental guidelines,
technical infirmities in labor pleadings cannot defeat. 31

In this case, Llamas' action against the petitioners concerned his

job, his security of tenure. This is a property right of which he
could not and should not be deprived of without due
process. 32 But, more importantly, it is a right that assumes a
preferred position in our legal hierarchy. 33

Under these considerations, we agree that the NLRC committed

grave abuse of discretion when, in dismissing Llamas' appeal, it
allowed purely technical infirmities to defeat Llamas' tenurial
security without full opportunity to establish his case's merits.

Llamas did not abandon his work; he was

constructively dismissed

"Abandonment is the deliberate and unjustified refusal of an

employee to resume his employment." 34 It is a form of neglect
of duty that constitutes just cause for the employer to dismiss
the employee. 35

To constitute abandonment of work, two elements must concur:

"(1) . . . the employee must have failed to report for work or must
have been absent without valid or justifiable reason; and (2) . . .
there must have been a clear intention [on the part of the
employee] to sever the employer-employee relationship
manifested by some overt act." 36 The employee's absence must
be accompanied by overt acts that unerringly point to the
employee's clear intention to sever the employment
relationship.37 And, to successfully invoke abandonment,
whether as a ground for dismissing an employee or as a defense,
the employer bears the burden of proving the employee's
unjustified refusal to resume his employment. 38 Mere absence of
the employee is not enough. 39 TADcCS

Guided by these parameters, we agree that the petitioners

unerringly failed to prove the alleged abandonment. They did
not present proof of some overt act of Llamasthat clearly and
unequivocally shows his intention to abandon his job. We note
that, aside from their bare allegation, the only evidence that the
petitioners submitted to prove abandonment were the
photocopy of their attendance logbook and the July 15, 2005
memorandum 40 that they served on Llamas regarding the July
13, 2005 incident. These pieces of evidence, even when
considered collectively, indeed failed to prove the clear and
unequivocal intention, on Llamas' part, that the law requires to
deem as abandonment Llamas' absence from work. Quite the
contrary, the petitioners' July 15, 2005 memorandum, in fact,
supports, if not strengthens, Llamas' version of the events that
led to his filing of the complaint, i.e., that as a result of the July
13, 2005 incident, the petitioners refused to give him the key to
his assignedtaxi cab unless he would sign the resignation letter.

Moreover, and as the CA pointed out, Llamas lost no time in

filing the illegal dismissal case against them. To recall, he filed the
complaint on July 18, 2005 or only two days from the third
time he was refused access to his assigned taxi cab on July 16,
2005. Clearly, Llamas could not be deemed to have abandoned
his work for, as we have previously held, the immediate filing by
the employee of an illegal dismissal complaint is proof enough of
his intention to return to work and negates the employer's
charge of abandonment. 41 To reiterate and emphasize,
abandonment is a matter of intention that cannot lightly be
presumed from certain equivocal acts of the employee. 42

The CA, therefore, correctly regarded Llamas as constructively

dismissed for the petitioners' failure to prove the alleged just
cause abandonment for his dismissal. Constructive
dismissal exists when there is cessation of work because
continued employment is rendered impossible, unreasonable or
unlikely. Constructive dismissal is a dismissal in disguise or an act
amounting to dismissal but made to appear as if it were not. In
constructive dismissal cases, the employer is, concededly,
charged with the burden of proving that its conduct and action
were for valid and legitimate grounds. 43 The petitioners'
persistent refusal to give Llamas the key to his assignedtaxi cab,
on the condition that he should first sign the resignation letter,
rendered, without doubt, his continued employment impossible,
unreasonable and unlikely; it, thus, constituted constructive
dismissal.

In sum, the CA correctly found equitable grounds to warrant

relaxation of the rule on perfection of appeal (filing of the
certificate of non-forum shopping) as there was patently absent
sufficient proof for the charge of abandonment. Accordingly, we
find the CA legally correct in reversing and setting aside the
NLRC's resolution rendered in grave abuse of discretion.

WHEREFORE, in light of these considerations, we

hereby DENY the petition. We AFFIRM the decision dated
August 13, 2008 and the resolution dated November 27, 2009
of the Court of Appeals in CA-G.R. CEB-S.P. No. 02623.

SO ORDERED.

||| (Diamond Taxi v. Llamas, Jr., G.R. No. 190724, [March 12,
2014])

[G.R. No. 180147. January 14, 2015.]

SARA LEE PHILIPPINES, INC., petitioner, vs.
EMILINDA D. MACATLANG, ET AL., 1 respondents.

[G.R. No. 180148. January 14, 2015.]

ARIS PHILIPPINES, INC., petitioner, vs. EMILINDA

D. MACATLANG, ET AL., respondents.

[G.R. No. 180149. January 14, 2015.]

SARA LEE CORPORATION, petitioner, vs.

EMILINDA D. MACATLANG, ET AL., respondents.

[G.R. No. 180150. January 14, 2015.]

CESAR C. CRUZ, petitioner, vs. EMILINDA

D. MACATLANG, ET AL., respondents.

[G.R. No. 180319. January 14, 2015.]

FASHION ACCESSORIES PHILS.,

INC., petitioner, vs. EMILINDA D. MACATLANG, ET
AL., respondents.

[G.R. No. 180685. January 14, 2015.]

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

NLRC, ARIS PHILIPPINES, INC., FASHION
ACCESSORIES PHILS.,
INC., SARA LEE CORPORATION, SARALEE PHILI
 PPINES, INC., COLLIN BEAL and ATTY. CESAR C.
CRUZ, respondents.

RESOLUTION

PEREZ, J : p

This treats of the 1) Motion for Reconsideration with Urgent

Petition for the Court's Approval of the Pending "Motion for
Leave of Court to File and Admit Herein Statement and
Confession of Judgment to Buy Peace and/or Secure against
any Possible Contingent Liability by Sara Lee Corporation" filed
by Sara Lee Philippines, Inc. (SLPI), Aris Philippines, Inc.
(Aris), Sara Lee Corporation (SLC) and Cesar C. Cruz, 2) Motion
for Reconsideration filed by Fashion Accessories Phils., Inc. (FAPI),
and 3) Manifestation of Conformity to the Motion for Leave of
Court to File and Admit Confession of Judgment to Buy Peace
and/or to Secure against any Possible Contingent Liability by
Petitioner SLC.

In the Decision dated 4 June 2014, this Court directed SLPI,

Aris, SLC, Cesar Cruz, and FAPI, collectively known as the
Corporations, to post P725 Million, in cash or surety bond,
within 10 days from the receipt of the Decision. The Court
further nullified the Resolution of the National Labor Relations
Commission (NLRC) dated 19 December 2006 for being
premature.

The Motion for Reconsideration is anchored on the following

grounds:
A. The Court failed to consider the "Motion for Leave of
Court to file and Admit Herein Statement and
Confession of Judgment to Buy Peace and/or to Secure
Against any Possible Contingent Liability by
Petitioner Sara Lee Corporation" (hereafter the
"compromise agreement") filed by
petitioner Sara Lee Corporation on June 23, 2014
before receipt of the Decision of June 04, 2014 on July
31, 2014 with the conformity of the respondents in
their "Manifestation and Conformity to the Petitioners'
Motion for Leave to File and Admit Statement of
Confession of Judgment" dated July 04, 2014 which
could have terminated the present cases and avoid
delays with its remand for further proceedings below.

B. The Court did not duly rule on the violations of the

rights of due process of Petitioner SLPI as shown by the
following:

1. The Labor Arbiter has never acquired

jurisdiction over Petitioner SLPI which was never
impleaded as a party respondent and was never
validly served with summons which fact was
specifically mentioned in NLRC's Resolution of
December 19, 2006; and

2. There is no employer-employee relationships

between Petitioner SLPI and the respondents.

C. The Court did not duly rule on the violations of the

rights of due process of Petitioner SLC because of the
following:

1. The Labor Arbiter has never acquired

jurisdiction over Petitioner SLC which was never
impleaded as a party respondent and was never
 validly served with summons which fact was
specifically raised by the Court as an issue in page
12 of the Decision of June 04, 2014 but remained
unresolved; and

2. There is no employer-employee relationship

between Petitioner SLC and the respondents.

D. The Court did not duly rule on the violations of the

rights of due process of Petitioner Cesar C. Cruz as shown
by the following:

1. The Labor Arbiter has never acquired

jurisdiction over Petitioner Cesar C. Cruz who was
never impleaded as a party respondent and was
never validly served with summons; and caSDCA

2. There is no employer-employee relationship

between petitioner Cesar C. Cruz and the
respondents.

E. There was no legal impediment for the NLRC to issue

its Resolution of December 19, 2006 vacating the Labor
Arbiter's Decision and remanding the case to the Labor
Arbiter for further proceeding as no Temporary
Restraining Order (TRO) or Writ of Preliminary
Injunction was issued by the Court of Appeals and the
rule on judicial courtesy remains the exception rather
than the rule.

F. The Court did not duly rule on the applicability of the

final and executory Decision of Fullido, et al. v. Aris
Philippines, Inc. and Cesar C. Cruz (G.R. No. 185948)
with respect to the present consolidated cases
considering the identical facts and issues involved plus
the fact that the Court in Fullido sustained the findings
 and decisions of three (3) other tribunals, i.e., the Court
of Appeals, the NLRC and the Labor Arbiter.

G. The Court failed to consider the prescription of the

complaints for money claims filed by the respondents
against the Petitioners under Article 291 of the Labor
Code due to the lapse of three (3) years and four (4)
months when Petitioners were impleaded as
respondents only through the amendment of complaints
by the complainants, the respondents' herein.

H. The Court also did not consider that the Complaints

filed by the respondents are barred by res
judicata because of the final and executory decision
rendered by the Voluntary Arbitrator on the identical
facts and issues in the case filed by the labor union
representing the respondents against Petitioner API.

I. Contrary to the Decision of June 04, 2014, the

Abelardo petition (CA GR SP No. 95919, Pacita S.
Abelardo v. NLRC, Aris, Philippines, Inc.) was filed
earlier than theMacatlang petition (CA GR SP No.
96363) as shown by the lower docket number, thus,
the Macatlang petition should be the one dismissed for
forum shopping.

J. In fixing the bond to PhP725 Million which is 25% of

the monetary award, the Court failed to consider the En
Banc Decision in McBurnie v. Ganzon, 707 SCRA 646,
693 (2013) which required only the posting of a bond
equivalent to ten percent (10%) of the monetary
award. 2

We briefly revisit the factual milieu of this case.

Aris permanently ceased operations on 9 October 1995
displacing 5,984 rank-and-file employees. On 26 October
1995, FAPI was incorporated prompting former Aris employees
to file a case for illegal dismissal on the allegations that FAPI was
a continuing business of Aris. SLC, SLP and Cesar Cruz were
impleaded as defendants being major stockholders of FAPI and
officers of Aris, respectively.

On 30 October 2004, the Labor Arbiter found the dismissal of

5,984 Aris employees illegal and awarded them monetary
benefits amounting to P3,453,664,710.86. The judgment
award is composed of separation pay of one month for every
year of service, backwages, moral and exemplary damages and
attorney's fees.

The Corporations filed a Notice of Appeal with Motion to Reduce

Appeal Bond. They posted a P4.5 Million bond. The NLRC
granted the reduction of the appeal bond and ordered the
Corporations to post an additional P4.5 Million bond.

The 5,984 former Aris employees, represented by

Emilinda Macatlang (Macatlang petition), filed a petition for
review before the Court of Appeals insisting that the appeal was
not perfected due to failure of the Corporations to post the
correct amount of the bond which is equivalent to the judgment
award.

While the case was pending before the appellate court, the NLRC
prematurely issued an order setting aside the decision of the
Labor Arbiter for being procedurally infirmed.

The Court of Appeals, on 26 March 2007, ordered the

Corporations to post an additional appeal bond of P1 Billion.
In our Decision dated 4 June 2014, we modified the Court of
Appeals' Decision, to wit:

WHEREFORE, the Decision of the Court of Appeals in

CA-G.R. SP No. 96363 dated 26 March 2007 is
MODIFIED. The Corporations are directed to post P725
Million, in cash or surety bond, within TEN (10) days
from the receipt of this DECISION. The Resolution of the
NLRC dated 19 December 2006 is VACATED for being
premature and the NLRC is DIRECTED to act with
dispatch to resolve the merits of the case upon perfection
of the appeal. 3

We also resolved the procedural issue of forum-shopping by

holding that the 411 petitioners of the Pacita Abelardo petition
(Abelardo petition) are not representative of the interest of all
petitioners in Macatlang petition. The number is barely
sufficient to comprise the majority of petitioners
in Macatlang petition and it would be the height of injustice to
dismiss the Macatlang petition which evidently enjoys the
support of an overwhelming majority due to the mistake
committed by petitioners in the Abelardo petition.

The Motion for Reconsideration has no merit. EScHDA

The Corporations score this Court for failing to consider the

ruling in McBurnie v. Ganzon 4 which purportedly required only
the posting of a bond equivalent to 10% of the monetary award.

The Corporations gravely misappreciated the ruling in McBurnie.

The 10% requirement pertains to the reasonable amount which
the NLRC would accept as the minimum of the bond that should
accompany the motion to reduce bond in order to suspend the
period to perfect an appeal under the NLRC rules. The 10% is
based on the judgment award and should in no case be construed
as the minimum amount of bond to be posted in order to perfect
appeal. There is no room for a different interpretation
when McBurnie made it clear that the percentage of bond set is
provisional, thus:

The foregoing shall not be misconstrued to unduly hinder

the NLRC's exercise of its discretion, given that the
percentage of bond that is set by this guideline shall be
merely provisional. The NLRC retains its authority and
duty to resolve the motion and determine the final
amount of bond that shall be posted by the appellant,
still in accordance with the standards of "meritorious
grounds" and "reasonable amount." Should the NLRC,
after considering the motion's merit, determine that a
greater amount or the full amount of the bond needs to
be posted by the appellant, then the party shall comply
accordingly. The appellant shall be given a period of 10
days from notice of the NLRC order within which to
perfect the appeal by posting the required appeal bond.

The Corporations argue that there was no legal impediment for

the NLRC to issue its 19 December 2006 Resolution vacating the
Labor Arbiter's Decision as no TRO or injunction was issued by
the Court of Appeals. The Corporations assert that the rule on
judicial courtesy remains the exception rather than the rule.

We do not agree. In the recent case of Trajano v. Uniwide Sales

Warehouse Club, 5 this Court gave a brief discourse on judicial
courtesy, which concept was first introduced in Eternal Gardens
Memorial Park Corp. v. Court of Appeals, 6 to wit:

. . . [t]he principle of judicial courtesy to justify the

suspension of the proceedings before the lower court
 even without an injunctive writ or order from the higher
court. In that case, we pronounced that "[d]ue respect
for the Supreme Court and practical and ethical
considerations should have prompted the appellate
court to wait for the final determination of the petition
[for certiorari] before taking cognizance of the case and
trying to render moot exactly what was before this
[C]ourt." We subsequently reiterated the concept of
judicial courtesy in Joy Mart Consolidated Corp. v. Court
of Appeals.

We, however, have qualified and limited the application

of judicial courtesy in Go v. Abrogar and Republic v.
Sandiganbayan. In these cases, we expressly delimited
the application of judicial courtesy to maintain the
efficacy of Section 7, Rule 65 of the Rules of Court, and
held that the principle of judicial courtesy applies only "if
there is a strong probability that the issues before the
higher court would be rendered moot and moribund as
a result of the continuation of the proceedings in the
lower court." Through these cases, we clarified that the
principle of judicial courtesy remains to be the exception
rather than the rule. 7

The Corporations' argument is specious. Judicial courtesy indeed

applies if there is a strong probability that the issues before the
higher court would be rendered moot as a result of the
continuation of the proceedings in the lower court. This is the
exception contemplated in the aforesaid ruling and it obtains in
this case. The 19 December 2006 ruling of the NLRC would
moot the appeal filed before the higher courts because the issue
involves the appeal bond which is an indispensable requirement
to the perfection of the appeal before the NLRC. Unless this issue
is resolved, the NLRC should be precluded from ruling on the
merits on the case. This is the essence of judicial courtesy.

The other grounds raised by the Corporations in this Motion for

Reconsideration such as the denial of due process due to invalid
service of summons on SLPI, SLC and Cesar Cruz;
prescription, res judicata, and the applicability of
the Fulido case 8 with the instant case were all raised and
resolved by the Labor Arbiter in favor of former Aris employees
in its Decision dated 30 October 2004. That same decision was
appealed by the Corporations before the NLRC. The perfection of
said appeal through the posting of a partial bond was put into
question and that is precisely the main issue brought before the
appellate court and before us.

By urging this Court to make a definitive ruling on these issues

petitioners would have us rule on the merits, which at this point
this Court cannot do as the labor proceedings remain incomplete.
If at all, the stage that has been passed is the proceedings before
the Labor Arbiter. And, without the NLRC stage, the Labor
Arbiter's decision is final and executory. It is obvious that
petitioners do not want either of the two options now open to
them: a) allow the finality of the adverse judgment in the
amount of P3,453,664,710.86, or b) file the P750 Million
bond for the review by the NLRC of the P3,453,664,710.86
decision of the Labor Arbiter. They would want their liability
finally reduced to just half of the amount of the required appeal
bond, or P350 million. The injustice to the employees is patent.

Now we proceed to tackle the Motion filed by the parties to

Admit Confession of Judgment.
The Corporations entered into a compromise with some of the
former Aris employees which they designate as Confession of
Judgment. The Corporations reason that a resort to judgment
by confession is the acceptable alternative to a compromise
agreement because of the impossibility to obtain the consent to
a compromise of all the 5,984 complainants.

A confession of judgment is an acknowledgment that a debt is

justly due and cuts off all defenses and right of appeal. It is used
as a shortcut to a judgment in a case where the defendant
concedes liability. It is seen as the written authority of the debtor
and a direction for entry of judgment against the debtor. 9

The Corporations cite the case of Republic of the Philippines v.

Bisaya Land Transportation Co. 10 to outline the distinction
between a compromise agreement/judgment on consent and a
confession of judgment/judgment by confession, thus:

. . . a motion for judgment on consent is not to be

equated with a judgment by confession. The former is
one the provisions and terms of which are settled and a
agreed upon by the parties to the action, and which is
entered in the record by the consent and sanction of the
court, Hence, there must be an unqualified agreement
among the parties to be bound by the judgment on
consent before said judgment may be entered. The court
does not have the power to supply terms, provisions, or
essential details not previously agreed to by the
parties . . . . On the other hand, a judgment by confession
is not a plea but an affirmative and voluntary act of the
defendant himself. Here, the court exercises a certain
amount of supervision over the entry of judgment, as
 well as equitable jurisdiction over their subsequent
status.11

In the same breadth, the Corporations also acknowledge that a

compromise agreement and a judgment by confession stand
upon the same footing in that both may not be executed by
counsel without knowledge and authority of the client. If we were
to rely on the Corporations' submission that all 5,984
complainants' SPAs could not be obtained, then the Confession of
Judgment is void.

Even if we dismiss the Corporations' choice of designation as pure

semantics and consider the agreement they entered into with
the complainants as a form of a compromise agreement, we still
could not approve the same.

We elucidate.

A compromise is a contract whereby the parties, by making

reciprocal concessions, avoid a litigation or put an end to one
already commenced. It is an agreement between two or more
persons, who, for preventing or putting an end to a lawsuit,
adjust their difficulties by mutual consent in the manner which
they agree on, and which everyone of them prefers to the hope
of gaining, balanced by the danger of losing. 12 dctai

A compromise must not be contrary to law, morals, good

customs and public policy; and must have been freely and
intelligently executed by and between the parties. 13

Article 273 of the Labor Code of the Philippines authorizes

compromise agreements voluntarily agreed upon by the parties,
in conformity with the basic policy of the State "to promote and
emphasize the primacy of free collective bargaining and
negotiations, including voluntary arbitration, mediation and
conciliation, as modes of settling labor or industrial
disputes." 14 "The provision reads:"

ART. 227. Compromise Agreements. Any

compromise settlement, including those involving labor
standard laws, voluntarily agreed upon by the parties
with the assistance of the Bureau or the regional office of
the Department of Labor, shall be final and binding upon
the parties. The National Labor Relations Commission or
any court shall not assume jurisdiction over issues
involved therein except in case of noncompliance thereof
or if there is prima facie evidence that the settlement
was obtained through fraud, misrepresentation, or
coercion.

A compromise agreement is valid as long as the consideration is

reasonable and the employee signed the waiver voluntarily, with
a full understanding of what he was entering into. 15

The compromise agreement which the Corporations deem as

Confession of Judgment is reproduced in full below:

CONFESSION OF JUDGMENT

The undersigned counsel, by virtue of the special

authority granted by HILLSHIRE earlier attached as
Annex "B" and made an integral part hereof seeks the
approval of this Honorable Court of this Judgment by
Confession under the following terms and conditions, to
wit:

1. HILLSHIRE will pay to the 5,984 respondents

(complainants) the total amount of THREE HUNDRED
FORTY TWO MILLION TWO HUNDRED EIGHTY-FOUR
THOUSAND AND EIGHT HUNDRED PESOS
(PhP342,284,800.00) or at FIFTY SEVEN THOUSAND
TWO HUNDRED PESOS (PhP57,200.00) for each
respondent (complainant) inclusive of the attorney's fees
of EIGHT THOUSAND FIVE HUNDRED EIGHTY PESOS
(PhP8,580.00) which each respondent (complainant)
will actually pay to their counsel of record as the total
consideration for the dismissal with prejudice of all the
pending cases before this Honorable Court and all the
cases pending before the National Labor Relations
Commission against all the petitioners.

2. The above agreed amount of THREE HUNDRED

FORTY TWO MILLION TWO HUNDRED EIGHTY-FOUR
THOUSAND AND EIGHT HUNDRED PESOS
(PhP342,284,800.00) shall be distributed as follows:

2.1 FORTY EIGHT THOUSAND SIX [HUNDRED]

TWENTY PESOS (PhP48,620.00) to each
respondent (complainant), and

2.2 EIGHT THOUSAND FIVE HUNDRED EIGHTY

PESOS (PhP8,580.00) to the lawyer of each
respondent (complainant) by virtue of the Special
Power of Attorney given by each respondent
(complainant) to lead Emilinda D. Macatlang who
gave SPA to Atty. Alex Tan.

3. HILLSHIRE will deposit the amount of THREE

HUNDRED FORTY TWO MILLION TWO HUNDRED
EIGHTY-FOUR THOUSAND AND EIGHT HUNDRED
PESOS (PhP342,284,800.00) with a local bank duly
licensed by the Bangko Sentral ng Pilipinas (BSP) within
sixty (60) days from the date of the issuance of a
Certificate of Finality and/or Entry of Judgment of the
Decision of this Honorable Court on this Confession of
Judgment.

4. The amount of FORTY EIGHT THOUSAND SIX

HUNDRED TWENTY PESOS (PhP48,620.00) shall be
paid directly to each respondent (complainant) and the
corresponding attorney's fees of EIGHT THOUSAND
FIVE HUNDRED EIGHTY PESOS (PhP8,580.00) shall be
paid to their lawyers (duly authorized by an SPA) by the
bank through a manager's check.

5. The total deposit of THREE HUNDRED FORTY TWO

MILLION TWO HUNDRED EIGHTY FOUR THOUSAND
EIGHT HUNDRED PESOS (PhP342,284,800.00) must
be claimed by the respondents (complainants) from the
depository bank within two (2) years from the date of
the Certificate of Finality or Entry of Judgment issued
by this Honorable Court.

6. Any balance of the deposited amount which remains

unclaimed by the respondents (complainants) within the
two (2) year period referred to above shall automatically
revert and be returned to and may be withdrawn by
HILLSHIRE and/or its attorney-in-fact, without the
necessity of any prior Order or permission from this
Honorable Court.

7. Thereafter, upon expiration of the two (2) year

period referred to above, HILLSHIRE's obligation to
make any payment to the respondents (Complainants)
shallipso facto cease, expire and terminate and the
judgment by confession shall be considered satisfied,
fulfilled and terminated. DaEcTC

8. The bank to which the amount of the confessed

judgment (PhP342,284,800.00) is deposited shall be
authorized by HILLSHIRE through the undersigned
attorney to pay to individual respondents (complainants)
listed in the original Decision dated October 30, 2004 of
the Labor Arbiter and/or their lawyers the above agreed
amounts subject to the following conditions:

8.1 Complainants shall personally claim the

payment to them from the bank upon
presentation of any recognized government ID's
such as Driver's License, Senior Citizen's Card,
Voter's ID, SSS ID, Unified Multipurpose
Identification Card, Postal ID, Passport, or
Certification Under Oath by the Barangay
Chairman as to the identity of the respondent
(complainant), or

8.2 By the duly authorized representative of

respondent (complainant) evidenced by a duly
notarized Special Power of Attorney in case the
respondent (complainant) cannot personally
claim his/her payment due to sickness or physical
disability.

9. The lead complainant, Ms. Emilinda D. Macatlang,

and Atty. Alex Tan shall take adequate steps to inform
all the respondents (complainants) by personal notice or
media announcement of this confession of judgment
upon receipt of the Decision of this Honorable Court.

10. All fully paid respondents (complainants) shall

execute a Waiver, Release and Quitclaim.

11. Upon the approval of this Confession of Judgment

by this Honorable Court, all cases pending before this
Honorable Court and the NLRC shall automatically be
 considered dismissed, terminated and of no force and
effect.

Petitioners invite the attention of this Honorable Court

that the above monetary consideration for both the
respondents (complainants) and their counsel under the
above terms and conditions have been agreed upon with
Atty. Alex Tan before the filing of this confession of
judgment.

To reiterate, this confession of judgment is made by

HILLSHIRE for the purpose of buying peace and/or to
secure to the said petitioner and the other Petitioners
against any possible contingent liability which may
accrue to them as a consequence of their having been
made Respondents in the Complaints filed by the
Complainants before the NLRC. 16

A review of the compromise agreement shows a gross disparity

between the amount offered by the Corporations compared to
the judgment award. The judgment award is
P3,453,664,710.86 or each employee is slated to receive
P577,149.85. On the other hand, the P342,284,800.00
compromise is to be distributed among 5,984 employees which
would translate to only P57,200.00 per employee. From this
amount, P8,580.00 as attorney's fees will be deducted, leaving
each employee with a measly P48,620.00. In fact, the
compromised amount roughly comprises only 10% of the
judgment award.

In our Decision, the appeal bond was set at P725 Million after
taking into consideration the interests of all parties. To reiterate,
the underlying purpose of the appeal bond is to ensure that the
employer has properties on which he or she can execute upon in
the event of a final, providential award. Thus, non-payment or
woefully insufficient payment of the appeal bond by the
employer frustrates these ends. 17 As a matter of fact, the appeal
bond is valid and effective from the date of posting until the case
is terminated or the award is satisfied. 18 Our Decision highlights
the importance of an appeal bond such that said amount should
be the base amount for negotiation between the parties. As it is,
the P342,284,800.00 compromise is still measly compared to
the P725 Million bond we set in this case, as it only accounts to
approximately 50% of the reduced appeal bond.

In Arellano v. Powertech Corporation, 19 we voided the

P150,000.00 compromise for the P2.5 Million judgment on
appeal to the NLRC. We note that the compromise is a mere 6%
of the contingent sum that may be received by petitioners and
the minuscule amount is certainly questionable because it does
not represent a true and fair amount which a reasonable agent
may bargain for his principal. 20

In Mindoro Lumber and Hardware v. Bacay, 21 we found that

the private respondents' individual claims, ranging from
P6,744.20 to P242,626.90, are grossly disproportionate to
what each of them actually received under the Sama-samang
Salaysay sa Pag-uurong ng Sakdal. The amount of the
settlement is indubitably unconscionable; hence, ineffective to
bar the workers from claiming the full measure of their legal
rights. 22

The complainants filed a motion for reconsideration asking this

Court to modify its Decision on the ground that the parties have
entered into a compromise agreement. The complainants
justified their acquiescence to the compromise on the possibility
that it will take another decade before the case may be resolved
and attained finality. We beg to disagree.

In our Decision, we have already directed the NLRC to act with

dispatch in resolving the merits of the case upon receipt of the
cash or surety bond in the amount of P725 Million within 10
days from receipt of the Decision. If indeed the parties want an
immediate and expeditious resolution of the case, then the NLRC
should be unhindered with technicalities to dispose of the case.

Accepting an outrageously low amount of consideration as

compromise defeats the complainants' legitimate claim.

In Unicane Workers Union-CLUP v. NLRC, 23 we held the

P100,000.00 amount in the quitclaim is unconscionable because
the complainants had been awarded by the labor arbiter more
than P2 million. It should have been aware that had petitioners
pursued their case, they would have been assured of getting said
amount, since, absent a perfected appeal, complainants were
already entitled to said amount by virtue of a final judgment. We
proceeded to state that:

Not all quitclaims are per se invalid as against public

policy. But, where there is clear proof that the waiver
was wrangled from an unsuspecting or gullible person,
or the terms of settlement are unconscionable on its face,
then the law will step in to annul the questionable
transaction. 24

In fine, we will not hesitate to strike down a compromise

agreement which is unconscionable and against public policy.

WHEREFORE, the Court DENIES petitioners' Motion for

Reconsideration and Motion for Leave of Court to File and Admit
Herein Statement and Confession of Judgment; and the
respondents' Partial Motion for Reconsideration for their lack of
merit. The directive in the Decision dated 4 June 2014 to the
National Labor Relations Commission to act with dispatch to
resolve the merits of the case upon perfection of the appeal is
hereby REITERATED.

SO ORDERED.

||| (Sara Lee Phils., Inc. v. Macatlang, G.R. Nos. 180147, 180148,
180149 , 180150, 180319 & 180685 (Resolution), [January
14, 2015])

G.R. No. 207286. July 29, 2015.]

DELA ROSA LINER, INC. AND/OR ROSAURO DELA

ROSA, SR. AND NORA DELA
ROSA, petitioners, vs. CALIXTO B. BORELA AND
ESTELO A. AMARILLE,respondents.

DECISION

BRION, J : p

Before us is Dela Rosa Liner, et al.'s petition for review

on certiorari 1 which seeks to annul the March 8, 2013
decision 2 and May 21, 2013 resolution 3 of the Court of
Appeals in CA-G.R. SP No. 128188.

The Antecedents

The facts as set out in the CA decision are summarized

below.
 On September 23, 2011, respondents Calixto Borela,
bus driver, and Estelo Amarille, conductor, filed separate
complaints 4 (later consolidated) againstpetitioners Dela Rosa
Liner, Inc., a public transport company, Rosauro Dela Rosa,
Sr., and Nora Dela Rosa, for underpayment/non-payment of
salaries, holiday pay, overtime pay, service incentive leave pay,
13th month pay, sick leave and vacation leave, night shift
differential, illegal deductions, and violation of Wage Order
Nos. 13, 14, 15 and 16.

In a motion dated October 26, 2011, the petitioners

asked the labor arbiter to dismiss the case for forum shopping.
They alleged that on September 28, 2011, the CA 13th
Division disposed of a similar case between the parties
(CA-G.R. SP No. 118038) after they entered into a
compromise agreement 5 which covered all claims and causes
of action they had against each other in relation to the
respondents' employment.

The respondents opposed the motion, contending that

the causes of action in the present case are different from the
causes of action settled in the case the petitioners cited.

The Rulings on Compulsory Arbitration

Labor Arbiter (LA) Danna A. Castillon, in an

order 6 dated November 24, 2011, upheld the petitioners'
position and dismissed the complaint on grounds of forum
shopping. Respondents appealed the LA's ruling. On July 31,
2012, the National Labor Relations Commission (NLRC) 1st
Division granted the appeal, 7 reversed LA Castillon's
dismissal order, and reinstated the complaint.
 The NLRC held that the respondents could not have
committed forum shopping as there was no identity of causes
of action between the two cases. The first complaint, the
NLRC pointed out, charged the petitioners with illegal
dismissal and unfair labor practice; while the second
complaint was based on the petitioners' alleged
nonpayment/underpayment of their salaries and monetary
benefits, and violation of several wage orders.

The petitioners moved for reconsideration, but the

NLRC denied their motion, prompting them to file with the
CA a petition for certiorari, for alleged grave abuse of
discretion by the NLRC in: (1) holding that the respondents
did not commit forum shopping when they filed the second
complaint; and (2) disregarding respondents' quitclaim in
relation to the compromise agreement in the first complaint.

The CA Decision

In its decision under review, the CA 15th Division denied

the petition; it found no grave abuse of discretion in the NLRC
ruling that the respondents did not commit forum shopping
when they filed their second complaint. The NLRC likewise
held that neither was the case barred by res judicata arising
from the CA judgment in the first case.

The appeals court explained that the first case involved

the issues of whether respondents had been illegally dismissed
and whether petitioners should be liable for unfair labor
practice. The labor arbiter 8 dismissed the first complaint for
lack of merit in his decision of November 6, 2008. HSAcaE

On the respondents' appeal against the LA ruling in this

first case, the NLRC 6th Division rendered a decision on
March 25, 2010, reversing the dismissal of the complaint. It
awarded respondents back wages (P442,550.00 for Borela
and P215,775.00 for Amarille), damages (P10,000.00 each
in moral and exemplary damages for Borela), and moral and
exemplary damages (P25,000.00 each for Amarille), plus
10% attorney's fees for each of them. 9

On the petitioners' motion for reconsideration of the

NLRC ruling in the first complaint, however, the NLRC
vacated its decision, and in its resolution of September 30,
2010, issued a new ruling that followed the LA's ruling, with
modification. It awarded the respondents financial assistance
of P10,000.00 each, in consideration of their long years of
service to the company.

The respondents sought relief from the CA through a

petition for certiorari (CA-G.R. SP No. 118038). Thereafter,
the parties settled the case (involving the first complaint)
amicably through the compromise agreement 10 adverted to
earlier. Under the terms of this agreement, "(t)he parties has
(sic) agreed to terminate the case now pending before the
Court of Appeals and that both parties further agree that no
further action based on the same grounds be brought against
each other, and this Agreement applies to all claims and
damages or losses either party may have against each other
whether those damages or losses are known or unknown,
foreseen or unforeseen."

Based on this agreement, Borela and Amarille received

from respondents P350,000.00 and P150,000.00,
respectively, and executed a quitclaim. Consequently, the CA
13th Division rendered judgment in accordance with the
compromise agreement and ordered an entry of judgment
which was issued on September 28, 2011.In this manner, the
parties resolved the first case.

To go back to the present case CA-G.R. SP No. 128188,

which arose from the second complaint the respondents
subsequently filed), the CA 15th Division upheld the NLRC's
(1st Division) decision and ruled out the presence of forum
shopping and res judicata as bars to the respondents'
subsequent money claims against the petitioners. The
petitioners moved for reconsideration, but the CA denied the
motion in its resolution of May 21, 2013.

The Petition

The petitioners now ask the Court to nullify the CA

judgment in CA-G.R. SP No. 128188 (arising from the
second complaint), contending that the appellate court erred
in upholding the NLRC ruling that there was no forum
shopping nor res judicata that would bar the second
complaint. They submit that "private respondents should be
penalized and be dealt with more severely, knowing fully well
that the same action had been settled and they both received
a considerable amount for the settlement. 11

The Respondents' Position

In their Comment 12 filed on September 4, 2013, the

respondents pray for the denial of the petition for having been
filed out of time and for lack of merit.

They argue that the petition should not prosper as it was

belatedly filed. They claim that according to the petitioners'
counsel herself, her law firm received a copy of the CA
resolution of May 21, 2013, denying their motion for
reconsideration on May 28, 2013, and giving them until
June 12, 2013, to file the petition. The petition, they point
out, was notarized only on June 13, 2013, which means that
it was filed only on that day, or beyond the 15-day filing
period.

On the substantive aspect of the case, respondents

contend that their second complaint involved two causes of
action: (1) their claim for sick leave, vacation leave, and
13th-month pay under the collective bargaining agreement
of the company; and (2) the petitioners' noncompliance with
wage orders since the year 2000 until the present.

They quote the NLRC's (1st Division) decision of July 31,

2012, 13 almost in its entirety, to support their position that
they did not commit forum shopping in the filing of the
second complaint and that they should be heard on their
money claims against the petitioners. HESIcT

The Court's Ruling

The procedural issue

We find the petition for review on certiorari timely

filed pursuant to Rule 45, Section 2 of the Rules of Court. 14

The last day for filing of the petition, as respondents

claim, fell on June 12, 2013, Independence Day, a legal
holiday. In Reiner Pacific International Shipping, et al. v.
Captain Francisco B. Guevarra, et al., 15 the Court explained
that under Section 1, Rule 22 of the Rules of Court,as
clarified by A.M. 00-2-14 SC (in relation to the filing of
pleadings in courts), when the last day on which a pleading is
due falls on a Saturday, Sunday, or a legal holiday, the filing
of the pleading on the next working day is deemed on time.
The filing of the petition therefore on June 13, 2013, a
working day, fully complied with the rules.

The merits of the case

The CA 15th Division committed no reversible error

when it affirmed the NLRC ruling that the second complaint
is not barred by the rule on forum shopping nor by the
principle of res judicata. In other words, no grave abuse of
discretion could be attributed to the NLRC when it reinstated
the second complaint.

Contrary to the petitioners' submission, respondents'

second complaint (CA-G.R. SP No. 128188), a money
claim, is not a "similar case" to the first complaint (CA-G.R.
SP No. 118038). Thus, the filing of the second complaint did
not constitute forum shopping and the judgment in the first
case is not a res judicata ruling that bars the second
complaint.

As the CA aptly cited, the elements of forum shopping

are: (1) identity of parties; (2) identity of rights asserted and
relief prayed for, the relief being founded on the same facts;
and (3) identity of the two preceding particulars such that
any judgment rendered in the other action will, regardless of
which party is successful, amount to res judicata in the action
under consideration. 16

We concur with the CA that forum shopping and res

judicata are not applicable in the present case. There is no
identity of rights asserted and reliefs prayed for, and the
judgment rendered in the previous action will not amount
to res judicata in the action now under consideration.

There is also no identity of causes of action in the first

complaint and in the second complaint. In Yap v. Chua, 17 we
held that the test to determine whether causes of action are
identical is to ascertain whether the same evidence would
support both actions, or whether there is an identity in the
facts essential to the maintenance of the two actions. If the
same facts or evidence would support both actions, then they
are considered the same; a judgment in the first case would be
a bar to the subsequent action.

Under the circumstances of the case before us, sufficient

basis exists for the NLRC's and CA's conclusions that there is
no identity of causes of action between the respondents' two
complaints against the petitioners. The first complaint
involved illegal dismissal/suspension, unfair labor
practice with prayer for damages andattorney's fees; while
the second complaint (the subject of the present appeal)
involves claims for labor standards benefits the petitioners'
alleged violation of Wage Orders Nos. 13, 14, 15 and 16;
nonpayment of respondents' sick and vacation leave pays,
13th-month pay, service incentive leave benefit, overtime
pay, and night shift differential.

As the CA correctly held, the same facts or evidence

would not support both actions. To put it simply, the facts or
the evidence that would determine whether respondents
were illegally dismissed, illegally suspended, or had been the
subject of an unfair labor practice act by the petitioners are
not the same facts or evidence that would support the charge
of non-compliance with labor standards benefits and several
wage orders. We thus cannot find a basis for petitioners' claim
that "the same action had been settled . . . ." 18

Neither are we persuaded by petitioners' argument that

"The Compromise Agreement covered all claims and causes of
action that the parties may have against each other in
relation to the private respondents' employment." 19 The
compromise agreement had been concluded to terminate the
illegal dismissal and unfair labor case then pending before the
CA. While the parties agreed that no further action shall be
brought by the parties against each other, they pointedly
stated that they referred to actions on the same grounds. The
phrase same grounds can only refer to the grounds raised in
the first complaint and not to any other grounds.

We likewise cannot accept the compromise agreement's

application "to all claims and damages or losses either party
may have against each other whether those damages or losses
are known or unknown, foreseen or unforeseen." 20

This coverage is too sweeping and effectively excludes

any claims by the respondents against the petitioners,
including those that by law and jurisprudence cannot be
waived without appropriate consideration such as
nonpayment or underpayment of overtime pay and wages. caITAC

In Pampanga Sugar Development, Co., Inc. v. Court of

Industrial Relations, et al., 21 the Court reminded the parties
that while rights may be waived, the waiver must not be
contrary to law, public policy, morals, or good customs; or
prejudicial to a third person with a right recognized by
law. 22 In labor law, respondents' claim for 13th-month pay,
overtime pay, and statutory wages (under Wages Orders 13,
14, 15 and 16), among others, cannot simply
be generally waived as they are granted for workers'
protection and welfare; it takes more than a general waiver
to give up workers' rights to these legal entitlements.

Lastly, the petitioners' insinuation, that the respondents

are not and should not be entitled to anything more, because
they had already "received a considerable amount for the
settlement" 23 (P350,000.00 for Borela and P150,000.00
for Amarille), should be placed and understood in its proper
context.

We note that in the illegal dismissal case where the

compromise agreement took place, the NLRC 6th Division
(acting on the appeal from the LA's ruling) awarded Borela
P442,550.00 in backwages; P20,000.00 in moral and
exemplary damages, plus 10% attorney's fees; and to Amarille
P215,775.00 in back wages and P50,000.00 in moral and
exemplary damages, plus 10% attorney's fees. 24

Although the NLRC reconsidered these awards and

eventually granted financial assistance of P10,000.00 each
to Borela and Amarille, 25 it is reasonable to regard the
amounts they received as a fair compromise in the settlement
of the first complaint in relation with the initial NLRC award,
indicated above, before its reconsideration. To be sure, the
parties, especially the respondents, could not have considered
the P10,000.00 financial assistance or their labor standards
claims, particularly the alleged violation of the wage orders, as
a factor in their effort to settle the case amicably. The
compromise agreement, it should be emphasized, was
 executed on September 8, 2011, 26 while the labor standards
complaint was filed only on September 23, 2011. 27

For the reasons discussed above, we find the petition

without merit.

WHEREFORE, premises considered, the petition for

review on certiorari is DISMISSED for lack of merit. The
assailed decision and resolution of the Court of Appeals
are AFFIRMED.

SO ORDERED.

||| (Dela Rosa Liner, Inc. v. Borela, G.R. No. 207286, [July 29,
2015])