TOPIC 11: NLRC RULES OF PROCEDURE

MINDANAO TIMES CORP. VS. CONFESSOR;

G.R. No. 183417; February 5, 2012
Facts:
Mitchel Confesor (respondent) was employed by petitioner in 1998, publisher of a
newspaper of general circulation in Mindanao and Davao City. He became
petitioners Associate Editor in six months.
Respondent resigned June 2003. On August 2003, he filed a verified complaint
before the Labor Arbiter for payment of separation pay and pro-rated 13 th month
pay for 2003. He later amended his complaint from one of money claims to illegal
dismissal, averring that petitioners President forced him to resign after he
published articles which appeared in petitioners newspaper accusing political
figures of being involved in some anomalies; and that he did resign as he was told
that he would be entitled to separation pay and other benefits, but that the
promised benefits were not forthcoming, hence, his filing of the complaint.
The Labor Arbiter finds that respondent was constructively dismissed. Both parties
appealed to the NLRC. Petitioner, on the other hand, questioned the Labor Arbiters
finding of constructive dismissal. In compliance with the appeal bond requirement,
petitioner deposited the amount of P71,909.77 with UCPB and surrendered to the
NLRC the passbook covering the deposit, along with a Deed of Assignment.
The NLRC reversed the ruling of the Labor Arbiter and dismissed respondents
complaint, holding that there was no constructive dismissal since respondent
effectively resigned from his employment. NLRC also held that the bank deposit
complied with the appeal bond requirement and is a substantial compliance with
Sec. 6, Rule 6 of the NLRC Rules of Procedure.
The Court of Appeals, to which respondent assailed the NLRC resolution via petition
for certiorari, dismissed said petition. On respondents Motion for Reconsideration,
CA set aside the NLRC Resolution and reinstated the Labor Arbiters Decision which
it declared to have become final and executory. It held that the bank deposit of
petitioner failed to substantially comply with the appeal bond requirement, noting
that its Deed of Assignment cannot be a substitute for the cash or surety bond
contemplated under the Rules for the perfection of appeal as the deed does not
ensure payment of the adjudged monetary award in case the appeal of fails.
Petitioner filed the present petition insisting that its bank deposit and Deed of
Assignment which it transmitted to the NLRC, along with the passbook, constituted
substantial compliance with the rule on perfection of appeals.
Issue:
Whether or not bank deposit complied with the appeal bond requirement thus
perfection of appeals.

Held:
The petition is bereft of merit. Article 223 of the Labor Code provides that an appeal
by the employer to the NLRC from a judgment of a labor arbiter which involves a
monetary award may be perfected only upon the posting of a cash or surety
bond issued by a reputable bonding company duly accredited by the NLRC, in an
amount equivalent to the monetary award in the judgment appealed from. Cash,
means a sum of money; cash bail (the sense in which the term cash bond is used)
is a sum of money posted by a criminal defendant to ensure his presence in court,
used in place of a surety bond and real estate.
To comply with the appeal bond requirement, the company deposited the amount
of P71,909.77 with UCPB and surrendered to the NLRC the passbook covering the
deposit, along with a Deed of Assignment it executed assigning the proceeds of the
deposit in favor of the employee and authorizing the NLRC to release the same in
the event that the Labor Arbiters Decision becomes final and executory. Such Deed
of Assignment, as well as the passbook, is neither a cash bond nor a surety bond.
The companys appeal to the NLRC was thus not duly perfected, thereby rendering
the Labor Arbiters Decision final and executory.
Bank deposit does not comply with the appeal bond requirement under Section 6,
Rule 6, of the NLRC Rules of Procedure, viz.:
Section 6. Bond. In case the decision of the Labor Arbiter or the Regional
Director involves a monetary award, an appeal by the employer may be
perfected only upon the posting of a cash or surety bond. The appeal bond
shall either be in cash or surety in an amount equivalent to the monetary
award, exclusive of damages and attorneys fees.
The Supreme Court, giving no merit to petitioners contention, held that bank
deposit is not sufficient compliance with the appeal bond requirement under the
aforementioned section.
Clearly, an appeal from a judgment as that involved in the present case is
perfected only upon the posting of a cash or surety bond.
The posting of a bond is indispensable to the perfection of an appeal in cases
involving monetary awards from the decision of the LA. The intention of the
lawmakers to make the bond a mandatory requisite for the perfection of an appeal
by the employer is clearly limned in the provision that an appeal by the employer
may be perfected only upon the posting of a cash or surety bond. The word only
makes it perfectly plain that the lawmakers intended the posting of a cash or surety
bond by the employer to be the essential and exclusive means by which an
employers appeal may be perfected. The word may refers to the perfection of an
appeal as optional on the part of the defeated party, but not to the compulsory
posting of an appeal bond, if he desires to appeal.
The filing of the bond is not only mandatory but also a jurisdictional requirement
that must be complied with in order to confer jurisdiction upon the NLRC. Noncompliance therewith renders the decision of the LA final and executory. This
requirement is intended to assure the workers that if they prevail in the case, they
will receive the money judgment in their favor upon the dismissal of the employers
appeal. It is intended to discourage employers from using an appeal to delay or

evade their obligation to satisfy their employees just and lawful claims.
In the present case, the Deed of Assignment, as well as the passbook, which
petitioner submitted to the NLRC is neither a cash nor a surety bond. Petitioners
appeal to the NLRC was thus not duly perfected, thereby rendering the Labor
Arbiters Decision final and executory.
COLLEGE OF IMMACULATE CONCEPCION VS. NLRC;
G.R. No. 167563; March 22, 2012
Facts:
CIC appointed private respondent Atty. Carlos as Acting Dean of the Department of
Business Administration and Accountancy. After a year, he was appointed as Dean
of the Department of Business, Economics and Accountancy effective June 1, 1996
until May 31, 2000. He served as Dean of said department for the designated term.
Upon the expiration of his term, Atty. Carlos became a full-time professor without
the diminution of salary as former Dean. However, he was charged with violation of
CHED Memorandum No. 19, s.1998 for teaching part-time in another school and
handling cases without the prior approval or consent of CIC; and pursuant to the
Memorandum, he was not assigned any teaching load for the succeeding semester.
Carlos protested the imposition of sanction against him arising from his part-time
teaching of law in another university. He further claims that even assuming that he
violated Section 16.8, CHED Memorandum No. 19, series of 1998, he is only liable
for mere censure or oral reprimand. On October 19, 2000, respondent filed a
complaint against petitioner before Regional Arbitration Branch No. III of San
Fernando, Pampanga, for unfair labor practice, illegal dismissal, with payment of
backwages and damages. Respondent argued that the non-renewal of his
appointment as Dean and his alleged demotion to a faculty member already
constituted constructive dismissal and was but a prelude to his actual dismissal.
Thereafter, his dismissal materialized when he was deprived of his teaching load.
The Labor Arbiter rendered a decision which provided, among others, the
reinstatement of Atty. Carlos as Dean. CIC appealed to the NLRC, but the latter
affirmed the decision of the LA with modification reinstating the respondent to his
full-time teaching position. Petitioner filed a Motion for Clarification and/or Partial
Reconsideration, praying that since the respondent was not illegally dismissed, then
he should be directed to refund the petitioner all the amounts he received by way of
payroll reinstatement. The NLRC denied petitioner's motion for lack of merit.
Issue:
Does the subsequent reversal of the LA's findings mean that respondent should
reimburse petitioner all the salaries and benefits he received pursuant to the
immediate execution of the LA's erroneous decision ordering his reinstatement as
Department Dean?
Held:
The SC cited the case of Air Philippines Corporation v. Zamora,15 citing Roquero v.
Philippine Airlines, Inc., wherein it held that:

x x x Hence, even if the order of reinstatement of the Labor Arbiter is

reversed on appeal, it is obligatory on the part of the employer to reinstate
and pay the wages of the dismissed employee during the period of appeal
until reversal by the higher court. On the other hand, if the employee has
been reinstated during the appeal period and such reinstatement order is
reversed with finality, the employee is not required to reimburse whatever
salary he received for he is entitled to such, more so if he actually rendered
services during the period.
It is not disputed at this point that the LA erred in ordering respondent's
reinstatement as Dean. The NLRC ruled that respondent should have been merely
reinstated as a full-time law professor, because the term of his appointment as
Dean had long expired. However, such mistake on the part of the LA cannot, in any
way, alter the fact that during the pendency of the appeal of his decision, his order
for respondent's reinstatement as Dean was immediately executory. Article 223 of
the Labor Code explicitly provides that:
Art. 223. - Appeal. x x x
xxxx
In any event, the decision of the Labor Arbiter reinstating a dismissed or
separated employee, insofar as the reinstatement aspect is concerned, shall
immediately be executory, even pending appeal. The employee shall either
be admitted back to work under the same terms and conditions prevailing
prior to his dismissal or separation or, at the option of the employer, merely
reinstated in the payroll. The posting of a bond by the employer shall not stay
the execution for reinstatement provided therein. (Emphasis supplied)
Therefore, petitioner could not validly insist that it is entitled to reimbursement for
the payment of the salaries of respondent pursuant to the execution of the LA's
decision by simply arguing that the LA's order for reinstatement is incorrect. The
pertinent law on the matter is not concerned with the wisdom or propriety of the
LA's order of reinstatement, for if it was, then it should have provided that the
pendency of an appeal should stay its execution. After all, a decision cannot be
deemed irrefragable unless it attains finality.
The Court went on to discuss the illogical and unjust effects of the "refund doctrine"
as it easily demonstrates how a favorable decision by the Labor Arbiter could harm,
more than help, a dismissed employee. The employee, to make both ends meet,
would necessarily have to use up the salaries received during the pendency of the
appeal, only to end up having to refund the sum in case of a final unfavorable
decision. It is mirage of a stop-gap leading the employee to a risky cliff of
insolvency. It also disregards the social justice principles behind the rule, but also
institutes a scheme unduly favorable to management. Under such scheme, the
salaries dispensed pendente lite merely serve as a bond posted in installment by
the employer. For in the event of a reversal of the Labor Arbiters decision ordering
reinstatement, the employer gets back the same amount without having to spend
ordinarily for bond premiums. This circumvents, if not directly contradicts, the
proscription that the "posting of a bond [even a cash bond] by the employer shall
not stay the execution for reinstatement."

ORIENTAL SHIP MANAGEMENT CO. VS. BASTOL;

G.R. No. 186280; June 29, 2012
Facts:
OSCI hired Romy B. Bastol (Bastol) as bosun evidenced by a Contract of
Employment and was deployed on board the vessel MV Felicita. While on board the
vessel, Bastol suffered chest pains and cold clammy perspiration. He was
hospitalized in Algiers and found to be suffering from anterior myocardial
infarction. In short, he had a heart attack. He was subsequently repatriated due to
his illness. The company referred Bastol for medical treatment to the Metropolitan
Hospital under the care of company-designated physician Dr. Robert D. Lim.
Unsatisfied with the treatment by Dr. Lim and seeking a second opinion, he went to
Dr. Efren R. Vicaldo, a Cardiologist and Congenital Heart Disease Specialist of the
Philippine Heart Center, who diagnosed him to be suffering from "Coronary Artery
Disease and Extensive Anteriorseptalmia" with the corresponding remarks: "For
Disability, Impediment Grade 1 (120%). Feeling abandoned and aggrieved, Bastol,
through counsel, sent a letter on the President of OSCI, for a possible settlement of
his claim for disability benefits. He attached the Medical Certificate issued by Dr.
Vicaldo. His letter did not merit a response from OSCI. Bastol was compelled to file a
Complaint before the Labor Arbiter but OSCI countered that Bastol is not entitled to
his indemnity claims, among others, for disability benefits on account of noncompliance with the requirements of the 1994 revised Standard Employment
Contract (SEC) by failing to properly submit himself for treatment and examination
by the company-designated physician who is the only one authorized to set the
degree of disability.
Labor Arbiter Mayor, Jr. rendered a Decision based on the parties respective
position papers and the documentary evidence presented in NLRC in favor of Bastol.
The Labor Arbiter saw no need to conduct formal hearings. He found that Bastol was
healthy when deployed but subsequently contracted or suffered heart ailment
during his period of employment with OSCI. He also found that Bastol did not show
any appreciable improvement despite treatment by the company-designated
physician, thus ruling that the fact that Dr. Lim had not issued a certification as to
Bastols condition did not negate his claim for disability indemnity, as the
determination of the degree thereof by Dr. Vicaldo of the Philippine Heart Center
sufficed. NLRC ruled in favor of OSCI in that Bastol should have presented himself
before the Labor Arbiter for the latter to properly assess his condition, and that Dr.
Lim and Dr. Vicaldo should be presented to determine with certainty the status of
Bastols heart ailment. The CA ruled that the NLRC gravely erred in construing the
proviso that it is only the company-designated physician who could declare the
fitness of the seafarer to work or establish the degree of his disability for it does not
prohibit a second medical opinion.
Issue:
Whether the Complaint filed before the Labor Arbiter ought to be dismissed for lack
of certification against forum shopping as required by the Rules and W/N seeking a
second opinion and the certification of Dr. Vicaldo is sufficient.
Held:
Bastol should not be denied his claims.

For the expeditious and inexpensive filing of complaints by employees, the Regional
Arbitration Branch (RAB) of the NLRC provides pro-forma complaint forms. This is to
facilitate the exercise and protection of employees rights by the convenient
assertion of their claims against employers untrammeled by procedural rules and
complexities. To comply with the certification against forum shopping requirement,
a simple question embodied in the Complaint form answerable by "yes" or "no"
suffices. Employee-complainants are not even required to have a counsel before
they can file their complaint. An officer of the RAB, duly authorized to administer
oaths, is readily available to facilitate the execution of the required subscription or
jurat of the complaint. It is thus clear that the strict application of Sec. 4, Rule 7 of
the Rules of Court does not apply to labor complaints filed before the NLRC RAB.
Labor arbiters given full discretion whether to conduct a hearing or not and to
decide the case before him through position papers: The foregoing provisos
manifestly show the non-litigious and the summary nature of the proceedings
before the Labor Arbiter, who is given full discretion whether to conduct a hearing or
not and to decide the case before him through position papers. A hearing cannot be
demanded by either party as a matter of right. The rationale behind this is to avoid
delay and curtail the pernicious practice of withholding of evidence. The
proceedings before the Labor Arbiter are non-litigious in nature and the
technicalities of law and procedure, and the rules obtaining in the courts of law are
not applicable. Thus, the rules allow the admission of affidavits by the Labor Arbiter
as evidence despite the fact that the affiants were not presented for crossexamination by the counsel for the adverse party. To require otherwise would be to
negate the rationale and purpose of the summary nature of the administrative
proceedings and to make mandatory the application of the technical rules of
evidence. The belated submission of additional documentary evidence by Bastol
after the case was already submitted for decision did not make the proceedings
before the Labor Arbiter improper. The basic reason is that technical rules of
procedure are not binding in labor cases.
Bastol had been treated by these company-designated doctors for a period
spanning around seven months and 20 days or for approximately 230 days. Clearly
then, the maximum period of 120 days stipulated in the SEC for medical treatment
and the declaration or assessment by the company-designated physician of either
being fit to work or the degree of permanent disability had already lapsed. Thus, by
law, if Bastols condition was with the lapse of the 120 days of post-employment
medical examination and treatment, without his being employed at his usual job,
then it was certainly total permanent disability.
It has been held that disability is intimately related to ones earning capacity. It
should be understood less on its medical significance but more on the loss of
earning capacity. Total disability does not mean absolute helplessness. In disability
compensation, it is not the injury which is compensated, but rather the incapacity to
work resulting in the impairment of ones earning capacity. Thus, permanent
disability is the inability of a worker to perform his job for more than 120
days, regardless of whether or not he loses the use of any part of his body.
We can say that Bastol had the right to seek medical treatment other than the
company-designated physician after the lapse of the 120-day considering that said
physician, within the maximum 120-day period stipulated in the SEC neither

declared him fit to work or gave the assessment of the degree of his permanent
disability which he is incumbent to do. Dr. Vicaldos diagnosis and assessment
should be accorded greater weight considering that he is a Cardiologist and
Congenital Heart Disease Specialist of the Philippine Heart Center.
MILLENNIUM ERECTORS CORP. VS. MAGALLANES;
G.R. No. 184362; November 15, 2010
Facts:
Respondent Magallanes started working in 1988 as a utility man for Laurencito Tiu
(Tiu), Chief Executive Officer of Millennium Erectors Corporation (petitioner), Tius
family, and Kenneth Construction Corporation. He was assigned to different
construction projects undertaken by petitioner in Metro Manila, the last of which was
for a building in Libis, Quezon City. In July of 2004 he was told not to report for work
anymore allegedly due to old age, prompting him to file on August 6, 2004 an illegal
dismissal complaint before the Labor Arbiter.
Petitioner claimed that respondent was a project employee, that respondents
services were terminated as the project was nearing completion. Petitioner likewise
submitted a termination report to the DOLE dated August 17, 2004.
The Labor Arbiter ruled in favor of petitioner and dismissed the complaint, holding
that respondent knew of the nature of his employment as a project employee.
On appeal, the NLRC set aside the Labor Arbiters Decision holding that respondent
was a regular, not a project employee, as the employment contract he supposedly
signed contained the date of commencement but not a specific date when it would
end, contrary to the rule that the duration and scope of similar contracts should be
clearly set forth therein.
Petitioner moved for reconsideration of the NLRC decision, contending that
respondents motion for reconsideration which it treated as an appeal was not
perfected, it having been belatedly filed; that there was no statement of the date of
receipt of the appealed decision; and that it lacked verification and copies thereof
were not furnished the adverse parties. Petitioners motion was denied. The Court
of Appeals, to which petitioner appealed, affirmed the NLRCs ruling by Decision.
Issue:
WON the NLRC erred in treating the respondents motion for reconsideration as an
appeal despite its technical flaws.
Held:
The NLRC did not err in treating respondents motion for reconsideration as an
appeal, the presence of some procedural flaws including the lack of verification and
proof of service notwithstanding.
In labor cases, rules of procedure should not be applied in a very rigid and technical
sense. They are merely tools designed to facilitate the attainment of justice, and
where their strict application would result in the frustration rather than promotion of

substantial justice, technicalities must be avoided. Technicalities should not be

permitted to stand in the way of equitably and completely resolving the rights and
obligations of the parties. Where the ends of substantial justice shall be better
served, the application of technical rules of procedure may be relaxed.
As to the defective verification in the appeal memorandum before the NLRC, the
same liberality applies. After all, the requirement regarding verification of a
pleading is formal, not jurisdictional. Such requirement is simply a condition
affecting the form of pleading, the non-compliance of which does not necessarily
render the pleading fatally defective. As for the requirement on proof of service, it
may also be dispensed with since in appeals in labor cases, non-service of copy of
the appeal or appeal memorandum to the adverse party is not a jurisdictional
defect which calls for the dismissal of the appeal.
On the merits of the case, the Court finds that, indeed, respondent was a regular,
not a project employee.
Assuming arguendo that petitioner hired respondent initially on a per project basis,
his continued rehiring, as shown by the sample payrolls converted his status to that
of a regular employee.
ISLRIZ TRADING/LU VS. CAPADE;
G.R. No. 168501; January 31, 2011
Facts:
Respondents were employees of Islriz Trading, a gravel and sand business owned
and operated by petitioner Victor Hugo Lu. Claiming that they were illegally
dismissed, respondents filed a Complaint for illegal dismissal and non-payment of
overtime pay, holiday pay, rest day pay, allowances and separation pay against
petitioner.
On his part, petitioner imputed abandonment of work against
respondents.
The Labor Arbiter rendered judgment declaring Islriz Trading guilty of illegal
dismissal and ordered the latter to reinstate the respondents and for payment of
backwages until actual reinstatement. Upon appeal, the NLRC set aside the Decision
of Labor Arbiter. Finding that respondents failure to continue working for petitioner
was neither caused by termination nor abandonment of work, the NLRC ordered
respondents reinstatement but without backwages. However, pending appeal,
respondents moved for the execution of the reinstatement aspect of the Labor
Arbiters decision. However, until the issuance of the NLRC Resolution overturning
Labor Arbiter Gans decision, petitioner still failed to reinstate respondents or effect
payroll reinstatement. This prompted respondents to apply for a Writ of Execution to
enforce the monetary award. A Writ of Execution was issued by Labor Arbiter
Castillon. The proceedings thereafter were likewise upheld by the CA.
Issue:
Whether respondents may collect their wages during the period between the Labor
Arbiters order of reinstatement pending appeal and the NLRC Resolution
overturning that of the Labor Arbiter.
Held:
The petition is not meritorious.

Petitioner contends that the CAs act in upholding the issuance of the questioned
Writ of Execution for the enforcement of respondents accrued salaries, said
Decision and Resolution, in effect, altered the NLRC Resolution which only decreed
respondents reinstatement without backwages.
Paragraph 3 of Article 223 of the Labor Code reads:
In any event, the decision of the Labor Arbiter reinstating a dismissed or separated
employee, insofar as the reinstatement aspect is concerned, shall immediately be
executory, pending appeal. The employee shall either be admitted back to work
under the same terms and conditions prevailing prior to his dismissal or separation
or, at the option of the employer, merely reinstated in the payroll. The posting of a
bond by the employer shall not stay the execution for reinstatement provided
herein.
Thus in several cases, it has maintained that even if the order of reinstatement of
the Labor Arbiter is reversed on appeal, it is obligatory on the part of the employer
to reinstate and pay the wages of the dismissed employee during the period of
appeal until reversal by the higher court. On the other hand, if the employee has
been reinstated during the appeal period and such reinstatement order is reversed
with finality, the employee is not required to reimburse whatever salary he received
for he is entitled to such, more so if he actually rendered services during the period.
In other words, a dismissed employee whose case was favorably decided by the
Labor Arbiter is entitled to receive wages pending appeal upon reinstatement, which
is immediately executory. Unless there is a restraining order, it is ministerial upon
the Labor Arbiter to implement the order of reinstatement and it is mandatory on
the employer to comply therewith.
To come up with the answer to the present issue, we shall apply the two-fold test
used in Garcia. Was there an actual delay or was the order of reinstatement
pending appeal executed prior to its reversal?
As can be recalled, until the
issuance of the September 5, 2002 NLRC Resolution overturning Labor Arbiter Gans
Decision, petitioner still failed to reinstate respondents or effect payroll
reinstatement in accordance with Article 223 of the Labor Code. This was what
actually prompted respondents to move for the issuance of a computation of the
award of backwages and Alias Writ of Execution for its enforcement. It cannot
therefore be denied that there was an actual delay in the execution of the
reinstatement aspect of the Decision of Labor Arbiter Gan prior to the issuance of
the NLRC Resolution overturning the same.
Now, the next question is: Was the delay not due to the employers unjustified act
or omission? Unlike in Garcia where PAL, as the employer, was then under
corporate rehabilitation, Islriz Trading here did not undergo rehabilitation or was
under any analogous situation which would justify petitioners non-exercise of the
options provided under Article 223 of the Labor Code. Petitioner, without any
satisfactory reason, failed to fulfill its obligation and respondents remained to be not
reinstated until the NLRC resolved petitioners appeal. Evidently, the delay in the
execution of respondents reinstatement was due to petitioners unjustified refusal
to effect the same.

Hence, the conclusion is that respondents have the right to collect their accrued
salaries during the period between the Labor Arbiters Decision ordering their
reinstatement pending appeal and the NLRC Resolution overturning the same
because petitioners failure to reinstate them either actually or through payroll was
due to petitioners unjustified refusal to effect reinstatement. In order to enforce
this, Labor Arbiter Castillon thus correctly issued the Writ of Execution dated March
9, 2004 as well as the Order dated June 3, 2004 denying petitioners Motion to
Quash Writ of Execution and granting respondents Urgent Motion for Issuance of
Break-Open Order. Consequently, we find no error on the part of the CA in
upholding these issuances and in dismissing the petition for certiorari before it.
To clarify, respondents are entitled to their accrued salaries only from the time
petitioner received a copy of Labor Arbiter Gans Decision declaring respondents
termination illegal and ordering their reinstatement up to the date of the NLRC
Resolution overturning that of the Labor Arbiter. This is because it is only during
said period that respondents are deemed to have been illegally dismissed and are
entitled to reinstatement pursuant to Labor Arbiter Gans Decision which was the
one in effect at that time. Beyond that period, the NLRC Resolution declaring that
there was no illegal dismissal is already the one prevailing. From such point,
respondents salaries did not accrue not only because there is no more illegal
dismissal to speak of but also because respondents have not yet been actually
reinstated and have not rendered services to petitioner.
PANLILIO ET AL. VS. RTC BR. 51, CITY OF MANILA;
G.R. No. 173846; February 2, 2011
Facts:
On October 15, 2004, Jose Marcel Panlilio, Erlinda Panlilio, Nicole Morris and Marlo
Cristobal (petitioners), as corporate officers of Silahis International Hotel, Inc. (SIHI),
filed with the Regional Trial Court (RTC) of Manila, Branch 24, a petition for
Suspension of Payments and Rehabilitation[4] in SEC Corp. Case No. 04-111180.
On October 18, 2004, the RTC of Manila, Branch 24, issued an Order staying all
claims against SIHI upon finding the petition sufficient in form and substance.
At the time, however, of the filing of the petition for rehabilitation, there were a
number of criminal charges[7] pending against petitioners in Branch 51 of the RTC
of Manila. These criminal charges were initiated by respondent Social Security
System (SSS) and involved charges of violations of Section 28 (h)[8] of Republic Act
8282, or the Social Security Act of 1997 (SSS law), in relation to Article 315 (1) (b)
[9] of the Revised Penal Code, or Estafa. Consequently, petitioners filed with the
RTC of Manila, Branch 51, a Manifestation and Motion to Suspend Proceedings.[10]
Petitioners argued that the stay order issued by Branch 24 should also apply to the
criminal charges pending in Branch 51. Petitioners, thus, prayed that Branch 51
suspend its proceedings until the petition for rehabilitation was finally resolved.
Branch 51 issued an Order[11] denying petitioners motion to suspend the
proceedings. It ruled that the stay order issued by Branch 24 did not cover criminal
proceedings, to wit:

Xxxx
The Court shares the view of the private complainants and the SSS that the said
stay order does not include the prosecution of criminal offenses. Precisely, the law
criminalizes the non-remittance of SSS contributions by an employer to protect
the employees from unscrupulous employers. Clearly, in these cases, public interest
requires that the said criminal acts be immediately investigated and prosecuted for
the protection of society.
Issue:
Whether or not the stay order issued by branch 24, regional trial court of manila, in
sec corp. Case no. 04-111180 covers also violation of sss law for non-remittance of
premiums and violation of [article] [3] 515 of the revised penal code.
Held:
Yes. Rosario is at fours with the case at bar. Petitioners are charged with violations
of Section 28 (h) of the SSS law, in relation to Article 315 (1) (b) of the Revised Penal
Code, or Estafa. The SSS law clearly criminalizes the non-remittance of SSS
contributions by an employer to protect the employees from unscrupulous
employers. Therefore, public interest requires that the said criminal acts be
immediately investigated and prosecuted for the protection of society.
The rehabilitation of SIHI and the settlement of claims against the corporation is not
a legal ground for the extinction of petitioners criminal liabilities. There is no reason
why criminal proceedings should be suspended during corporate rehabilitation,
more so, since the prime purpose of the criminal action is to punish the offender in
order to deter him and others from committing the same or similar offense, to
isolate him from society, reform and rehabilitate him or, in general, to maintain
social order.[26] As correctly observed in Rosario,[27] it would be absurd for one
who has engaged in criminal conduct could escape punishment by the mere filing of
a petition for rehabilitation by the corporation of which he is an officer.
The prosecution of the officers of the corporation has no bearing on the pending
rehabilitation of the corporation, especially since they are charged in their individual
capacities. Such being the case, the purpose of the law for the issuance of the stay
order is not compromised, since the appointed rehabilitation receiver can still fully
discharge his functions as mandated by law. It bears to stress that the rehabilitation
receiver is not charged to defend the officers of the corporation. If there is anything
that the rehabilitation receiver might be remotely interested in is whether the court
also rules that petitioners are civilly liable. Such a scenario, however, is not a reason
to suspend the criminal proceedings, because as aptly discussed in Rosario, should
the court prosecuting the officers of the corporation find that an award or
indemnification is warranted, such award would fall under the category of claims,
the execution of which would be subject to the stay order issued by the
rehabilitation court.[28] The penal sanctions as a consequence of violation of the
SSS law, in relation to the revised penal code can therefore be implemented if
petitioners are found guilty after trial. However, any civil indemnity awarded as a
result of their conviction would be subject to the stay order issued by the
rehabilitation court. Only to this extent can the order of suspension be considered
obligatory upon any court, tribunal, branch or body where there are pending actions

for claims against the distressed corporation.

ANDO VS. CAMPO;
G.R. No. 184007; February 16, 2011
Facts:
Petitioner was the president of Premier Allied and Contracting Services, Inc. (PACSI),
an independent labor contractor. Respondents were hired by PACSI as haulers
tasked to manually carry bags of sugar from the warehouse of Victorias Milling
Company and load them on trucks. The respondents were dismissed from
employment and thereafter, filed a case for illegal dismissal and some money
claims with the NLRC. Labor Arbiter promulgated a decision, ruling in respondents
favor.
Petitioner and PACSI appealed to the NLRC and the NLRC ruled that petitioner failed
to perfect his appeal because he did not pay the supersedeas bond. It also affirmed
the Labor Arbiters decision and upon finality of the decision, respondents moved
for its execution.
To answer for the monetary award, NLRC Acting Sheriff Romeo Pasustento issued a
Notice of Sale on Execution of Personal Property over the property in the name of
Paquito V. Ando x x x married to Erlinda S. Ando.
This prompted petitioner to file an action for prohibition and damages with prayer
for the issuance of a TRO before RTC claiming that the property belonged to him and
his wife, not to the corporation, and, hence, could not be subject of the execution
sale. But the RTC issued an order denying the prayer for a TRO, holding that the trial
court had no jurisdiction to try and decide the case. The RTC ruled that, pursuant to
the NLRC Manual on the Execution of Judgment, petitioners remedy was to file a
third-party claim with the NLRC Sheriff.
Petitioner filed a petition for certiorari under Rule 65 before the CA contending that
the RTC acted without or in excess of jurisdiction or with grave abuse of discretion
amounting to lack or excess of jurisdiction in issuing the Order. The CA, however,
affirmed the RTC Order in so far as it dismissed the complaint on the ground that it
had no jurisdiction over the case, and nullified all other pronouncements in the
same Order. Petitioner moved for reconsideration, but the motion was denied.
Held:
Regular courts have no jurisdiction to hear and decide questions which arise from
and are incidental to the enforcement of decisions, orders, or awards rendered in
labor cases by appropriate officers and tribunals of the Department of Labor and
Employment. To hold otherwise is to sanction splitting of jurisdiction which is
obnoxious to the orderly administration of justice.
The NLRC Manual on the Execution of Judgment governs any question on the
execution of a judgment of that body(NLRC). The Rules of Court apply only by
analogy or in a suppletory character.
NLRC Manual on the Execution of Judgment deals specifically with third-party claims

in cases brought before that body. It defines a third-party claim as one where a
person, not a party to the case, asserts title to or right to the possession of the
property levied upon. It also sets out the procedure for the filing of a third-party
claim, to wit:
SECTION 2. Proceedings. If property levied upon be claimed by any
person other than the losing party or his agent, such person shall make
an affidavit of his title thereto or right to the possession thereof, stating the
grounds of such right or title and shall file the same with the sheriff and
copies thereof served upon the Labor Arbiter or proper officer issuing the writ
and upon the prevailing party. Upon receipt of the third party claim, all
proceedings with respect to the execution of the property subject of the third
party claim shall automatically be suspended and the Labor Arbiter or
proper officer issuing the writ shall conduct a hearing with due notice to all
parties concerned and resolve the validity of the claim within ten (10)
working days from receipt thereof and his decision is appealable to the
Commission within ten (10) working days from notice, and the Commission
shall resolve the appeal within same period.
There is no doubt in our mind that petitioners complaint is a third- party claim
within the cognizance of the NLRC. Petitioner may indeed be considered a third
party in relation to the property subject of the execution vis--vis the Labor
Arbiters decision. There is no question that the property belongs to petitioner and
his wife, and not to the corporation. It can be said that the property belongs to the
conjugal partnership, not to petitioner alone. Thus, the property belongs to a
third party, i.e., the conjugal partnership. At the very least, the Court can
consider that petitioners wife is a third party within contemplation of the law.
There is no denying that the present controversy arose from the complaint for illegal
dismissal. The subject matter of petitioners complaint is the execution of the NLRC
decision. Execution is an essential part of the proceedings before the NLRC.
Jurisdiction, once acquired, continues until the case is finally terminated, and there
can be no end to the controversy without the full and proper implementation of the
commissions directives.
Further underscoring the RTCs lack of jurisdiction over petitioners complaint is
Article 254 of the Labor Code, to wit:
ART. 254. INJUNCTION PROHIBITED. No temporary or permanent injunction
or restraining order in any case involving or growing out of labor disputes
shall be issued by any court or other entity, except as otherwise provided in
Articles 218 and 264 of this Code.
Moreover, the power of the NLRC, or the courts, to execute its judgment extends
only to properties unquestionably belonging to the judgment debtor alone. A
sheriff, therefore, has no authority to attach the property of any person except that
of the judgment debtor. Likewise, there is no showing that the sheriff ever tried to
execute on the properties of the corporation.
The TCT of the property bears out that, indeed, it belongs to petitioner and his wife
and the latter stands to lose the property subject of execution without ever being a

party to the case. This will be tantamount to deprivation of property without due
process.
EXODUS INTERNATIONAL CONSTRUCTION CORP. VS. BISCOCHO;
G.R. No. 166109; February 23, 2011
Facts:
Petitioner Exodus International Construction Corporation (Exodus) is a duly licensed
labor contractor for the painting of residential houses, condominium units and
commercial buildings. Petitioner Antonio P. Javalera is the President and General
Manager of Exodus.
Exodus obtained from Dutch Boy Philippines, Inc. (Dutch Boy) a contract for the
painting of the Imperial Sky Garden. Dutch Boy awarded another contract to Exodus
for the painting. In the furtherance of its business, Exodus hired respondents as
painters on different dates.
Guillermo Biscocho (Guillermo) was assigned at the Imperial Sky Garden from
February 8, 1999 to February 8, 2000. Fernando Pereda (Fernando) worked in the
same project from February 8, 1999 to June 17, 2000. Likewise, Ferdinand Mariano
(Ferdinand) worked there from April 12, 1999 to February 17, 2000. All of them were
then transferred to Pacific Plaza Towers.
Gregorio S. Bellita (Gregorio) was assigned to work at the house of Mr. Teofilo Yap in
Ayala Alabang, Muntinlupa City from May 20, 1999 to December 4, 1999.
Afterwards he was transferred to Pacific Plaza Towers.
Miguel B. Bobillo (Miguel) was hired and assigned at Pacific Plaza Towers on March
10, 2000.
On November 27, 2000, Guillermo, Fernando, Ferdinand, and Miguel filed a
complaint for illegal dismissal and non-payment of holiday pay, service incentive
leave pay, 13th month pay and night-shift differential pay.
On December 1, 2000, Gregorio also filed a complaint. He claimed that he was
dismissed from the service on September 12, 2000 while Guillermo, Fernando,
Ferdinand, and Miguel were orally notified of their dismissal from the service on
November 25, 2000.
Petitioners denied respondents allegations. As regards Gregorio, petitioners averred
that on September 15, 2000, he absented himself from work and applied as a
painter with SAEI-EEI which is the general building contractor of Pacific Plaza
Towers. Since then, he never reported back to work.
Guillermo absented himself from work without leave on November 27, 2000. When
he reported for work the following day, he was reprimanded for being Absent
Without Official Leave (AWOL). Because of the reprimand, he worked only half-day
and thereafter was unheard of until the filing of the instant complaint.
On March 21, 2002, the Labor Arbiter rendered a Decision exonerating petitioners

from the charge of illegal dismissal as respondents chose not to report for work.
The Labor Arbiter ruled that since there is neither illegal dismissal nor abandonment
of job, respondents should be reinstated but without any backwages.
She
disallowed the claims for premium pay for holidays and rest days and nightshift
differential pay as respondents failed to prove that actual service was rendered on
such non-working days. However, she allowed the claims for holiday pay, service
incentive leave pay and 13th month pay.
Petitioners sought recourse to the NLRC limiting their appeal to the award of service
incentive leave pay, 13th month pay, holiday pay and 10% attorneys fees in the
sum of P70,183.23. NLRC dismissed the appeal. It ruled that petitioners, who have
complete control over the records of the company, could have easily rebutted the
monetary claims against it. As to the award of attorneys fees, the NLRC found the
same to be proper because respondents were forced to litigate in order to validate
their claim.
The CA also affirmed LA and NLRC decision, hence this petition.
Held:
No illegal dismissal.
The rule is that one who alleges a fact has the burden of proving it; thus, petitioners
were burdened to prove their allegation that respondents dismissed them from their
employment. It must be stressed that the evidence to prove this fact must be clear,
positive and convincing. The rule that the employer bears the burden of proof in
illegal dismissal cases finds no application here because the respondents deny
having dismissed the petitioners.
In this case, petitioners were able to show that they never dismissed respondents.
As to the case of Fernando, Miguel and Ferdinand, it was shown that on November
25, 2000, at around 7:30 a.m., the petitioners foreman, Wenifredo Lalap
(Wenifredo) caught the three still eating when they were supposed to be working
already. Wenifredo reprimanded them and, apparently, they resented it so they no
longer reported for work. In the case of Gregorio, he absented himself from work on
September 15, 2000 to apply as a painter with SAEI-EEI, the general contractor of
Pacific Plaza Towers. Since then he never reported back to work. Lastly, in the case
of Guillermo, he absented himself without leave on November 27, 2000, and so he
was reprimanded when he reported for work the following day. Because of the
reprimand, he did not report for work anymore.
Respondents must be reinstated and paid their holiday pay, service incentive leave
pay, and 13th month pay.
However, petitioners are of the position that the reinstatement of respondents to
their former positions, which were no longer existing, is impossible, highly unfair
and unjust. Having completed their tasks, their positions automatically ceased to
exist. Consequently, there were no more positions where they can be reinstated as
painters.
Petitioners are misguided. They forgot that there are two types of employees in the

construction industry. The first is referred to as project employees or those

employed in connection with a particular construction project or phase thereof and
such employment is coterminous with each project or phase of the project to which
they are assigned. The second is known as non-project employees or those
employed without reference to any particular construction project or phase of a
project.
The second category is where respondents are classified. As such they are regular
employees of petitioners. It is clear from the records of the case that when one
project is completed, respondents were automatically transferred to the next project
awarded to petitioners. There was no employment agreement given to respondents
which clearly spelled out the duration of their employment, the specific work to be
performed and that such is made clear to them at the time of hiring. It is now too
late for petitioners to claim that respondents are project employees whose
employment is coterminous with each project or phase of the project to which they
are assigned.
A project employee x x x may acquire the status of a regular employee when the
following [factors] concur:
1. There is a continuous rehiring of project employees even after cessation of a
project; and
2. The tasks performed by the alleged project employee are vital, necessary and
indespensable to the usual business or trade of the employer.
In this case, the evidence on record shows that respondents were employed and
assigned continuously to the various projects of petitioners. As painters, they
performed activities which were necessary and desirable in the usual business of
petitioners, who are engaged in subcontracting jobs for painting of residential units,
condominium and commercial buildings. As regular employees, respondents are
entitled to be reinstated without loss of seniority rights.
Respondents are also entitled to the payment of attorneys fees.
Even though respondents were not represented by counsel in most of the stages of
the proceedings of this case, the award of attorneys fees as ruled by the Labor
Arbiter, the NLRC and the CA to the respondents is still proper. In Rutaquio v.
National Labor Relations Commission,[29] this Court held that:
It is settled that in actions for recovery of wages or where an employee was forced
to litigate and, thus, incur expenses to protect his rights and interest, the award of
attorneys fees is legally and morally justifiable.
In Producers Bank of the Philippines v. Court of Appeals[30] this Court ruled that:
Attorneys fees may be awarded when a party is compelled to litigate or to incur
expenses to protect his interest by reason of an unjustified act of the other party.
In this case, respondents filed a complaint for illegal dismissal with claim for

payment of their holiday pay, service incentive leave pay, and 13th month pay. The
Labor Arbiter, the NLRC and the CA were one in ruling that petitioners did not pay
the respondents their holiday pay, service incentive leave pay, and 13th month pay
as mandated by law. For sure, this unjustified act of petitioners had compelled the
respondents to institute an action primarily to protect their rights and interests.
As to Backwages
In cases where there is no evidence of dismissal, the remedy is
reinstatement but without backwages. In this case, both the Labor Arbiter and the
NLRC made a finding that there was no dismissal much less an illegal one. It is
settled that factual findings of quasi-judicial agencies are generally accorded
respect and finality so long as these are supported by substantial evidence. Thus,
inasmuch as no finding of illegal dismissal had been made, and considering that the
absence of such finding is supported by the records of the case, this Court is bound
by such conclusion and cannot allow an award of the payment of backwages.
PFIZER, INC. VS. VELASCO;
G.R. No. 177467; March 9, 2011
Facts:
Private respondent Geraldine L. Velasco was employed with petitioner PFIZER, INC.
as Professional Health Care Representative since 1 August 1992. Sometime in April
2003, Velasco had a medical work up for her high-risk pregnancy and was
subsequently advised bed rest which resulted in her extending her leave of
absence. Velasco filed her sick leave for the period from 26 March to 18 June 2003,
her vacation leave from 19 June to 20 June 2003, and leave without pay from 23
June to 14 July 2003.
On 26 June 2003, while Velasco was still on leave, PFIZER through its Area Sales
Manager, herein petitioner Ferdinand Cortez, personally served Velasco a "Showcause Notice" dated 25 June 2003. Aside from mentioning about an investigation on
her possible violations of company work rules regarding "unauthorized deals and/or
discounts in money or samples and unauthorized withdrawal and/or pull-out of
stocks" and instructing her to submit her explanation on the matter within 48 hours
from receipt of the same, the notice also advised her that she was being placed
under "preventive suspension" for 30 days .In response, Velasco sent a letter
addressed to Cortez dated 28 June 2003 denying the charges.
On 12 July 2003, Velasco received a "Second Show-cause Notice" informing her of
additional developments in their investigation. According to the notice, a certain
Carlito Jomen executed an affidavit pointing to Velasco as the one who transacted
with a printing shop to print PFIZER discount coupons. Velasco sent a letter to
PFIZER via Aboitiz courier service asking for additional time to answer the second
Show-cause Notice.
That same day, Velasco filed a complaint for illegal suspension with money claims
before the Regional Arbitration Branch. The following day, 17 July 2003, PFIZER sent
her a letter inviting her to a disciplinary hearing to be held on 22 July 2003. On 25
July 2003, Velasco received a "Third Show-cause Notice," together with copies of the
affidavits of two Branch Managers of Mercury Drug, asking her for her comment

within 48 hours. Finally, on 29 July 2003, PFIZER informed Velasco of its

"Management Decision" terminating her employment.
On 5 December 2003, the Labor Arbiter rendered its decision declaring the
dismissal of Velasco illegal, ordering her reinstatement with backwages and further
awarding moral and exemplary damages with attorneys fees. On appeal, the NLRC
affirmed the same but deleted the award of moral and exemplary damages.
Undaunted, PFIZER filed with the Court of Appeals a special civil action for the
issuance of a writ of certiorariunder Rule 65 of the Rules of Court to annul and set
aside the aforementioned NLRC issuances. In a Decision dated November 23, 2005,
the Court of Appeals upheld the validity of respondents dismissal from
employment, the dispositive portion of which reads as follows:
IN VIEW WHEREOF, the dismissal of private respondent Geraldine Velasco is
AFFIRMED, but petitioner PFIZER, INC. is hereby ordered to pay her the wages to
which she is entitled to from the time the reinstatement order was issued until
November 23, 2005, the date of promulgation of Our Decision.11
Issue:
Whether or not the Court of Appeals committed a serious but reversible error when
it ordered Pfizer to pay Velasco wages from the date of the Labor Arbiters decision
ordering her reinstatement until November 23, 2005, when the Court of Appeals
rendered its decision declaring Velascos dismissal valid.13
Held:
The petition is without merit.
At the outset, we note that PFIZERs previous payment to respondent of the amount
of P1,963,855.00 (representing her wages from December 5, 2003, or the date of
the Labor Arbiter decision, until May 5, 2005) that was successfully garnished under
the Labor Arbiters Writ of Execution dated May 26, 2005 cannot be considered in its
favor. Not only was this sum legally due to respondent under prevailing
jurisprudence but also this circumstance highlighted PFIZERs unreasonable delay in
complying with the reinstatement order of the Labor Arbiter
As far back as 1997 in the seminal case of Pioneer Texturizing Corporation v.
National Labor Relations Commission, the Court held that an award or order of
reinstatement is immediately self-executory without the need for the issuance of a
writ of execution in accordance with the third paragraph of Article 22322 of the
Labor Code. In that case, we discussed in length the rationale for that doctrine, to
wit:
The provision of Article 223 is clear that an award [by the Labor Arbiter] for
reinstatement shall be immediately executory even pending appeal and the posting
of a bond by the employer shall not stay the execution for reinstatement. The
legislative intent is quite obvious, i.e., to make an award of reinstatement
immediately enforceable, even pending appeal. To require the application for and
issuance of a writ of execution as prerequisites for the execution of a reinstatement
award would certainly betray and run counter to the very object and intent of Article
223, i.e., the immediate execution of a reinstatement order. The reason is simple.

An application for a writ of execution and its issuance could be delayed for
numerous reasons. A mere continuance or postponement of a scheduled hearing,
for instance, or an inaction on the part of the Labor Arbiter or the NLRC could easily
delay the issuance of the writ thereby setting at naught the strict mandate and
noble purpose envisioned by Article 223. In other words, if the requirements of
Article 224 [including the issuance of a writ of execution] were to govern, as we so
declared in Maranaw, then the executory nature of a reinstatement order or award
contemplated by Article 223 will be unduly circumscribed and rendered ineffectual.
In enacting the law, the legislature is presumed to have ordained a valid and
sensible law, one which operates no further than may be necessary to achieve its
specific purpose. Statutes, as a rule, are to be construed in the light of the purpose
to be achieved and the evil sought to be prevented. x x x In introducing a new rule
on the reinstatement aspect of a labor decision under Republic Act No. 6715,
Congress should not be considered to be indulging in mere semantic exercise. x x
x23 (Italics in the original; emphasis and underscoring supplied.)
In the case at bar, PFIZER did not immediately admit respondent back to work
which, according to the law, should have been done as soon as an order or award of
reinstatement is handed down by the Labor Arbiter without need for the issuance of
a writ of execution. Thus, respondent was entitled to the wages paid to her under
the aforementioned writ of execution. At most, PFIZERs payment of the same can
only be deemed partial compliance/execution of the Court of Appeals Resolution
dated October 23, 2006 and would not bar respondent from being paid her wages
from May 6, 2005 to November 23, 2005.
To reiterate, under Article 223 of the Labor Code, an employee entitled to
reinstatement "shall either be admitted back to work under the same terms and
conditions prevailing prior to his dismissal or separation or, at the option of the
employer, merely reinstated in the payroll."
The view as maintained in a number of cases is that:
x x x [E]ven if the order of reinstatement of the Labor Arbiter is
reversed on appeal, it is obligatory on the part of the employer to
reinstate and pay the wages of the dismissed employee during the
period of appeal until reversal by the higher court. On the other hand,
if the employee has been reinstated during the appeal period and such
reinstatement order is reversed with finality, the employee is not required to
reimburse whatever salary he received for he is entitled to such, more so if
he actually rendered services during the period.(Emphasis in the original;
italics and underscoring supplied)
In other words, a dismissed employee whose case was favorably decided by the
Labor Arbiter is entitled to receive wages pending appeal upon reinstatement, which
is immediately executory. Unless there is a restraining order, it is ministerial upon
the Labor Arbiter to implement the order of reinstatement and it is mandatory on
the employer to comply therewith.
LUNA VS. ALLADO CONSTRUCTION CO., INC.;
G.R. No. 175251; May 30, 2011

Facts:
Petitioner Luna was the employee of the constructions company of the Respondent.
He was assigned in Saranggani Province. As he was caught pilfering the
respondents property, he was dismissed from his employment, and thereby filed a
case of illegal dismissal against the respondent.
The Labor Arbiter ruled that there was no illegal dismissal, but awarded financial
assistance in favour of the petitioner. The respondent then appealed to the NLRC
questioning solely the LAs decision in awarding financial assistance. The NLRC
reversed the LAs decision, finding out that there was illegal dismissal and awarded
the backwages to the petitioner.
Aggrieved by such an unfavourable decision, the respondent via Rule 65 posed in its
appeal the validity of the NLRCs decision on the ground that it has no jurisdiction to
entertain questions not alleged in the appeal. The respondents ground was only
questioning the propriety of the award of the financial assistance, yet NLRC
entertained issues other than that posed in the appeal. With the same adverse
decision by the CA, the respondents came before the SC via petition for certiorari
still questioning the validity of the decision. Respondent argued that the NLRC does
not have authority to review issues not brought before it for appeal.
Issue:
WON the NLRC has jurisdiction to review issues not brought before it for appeal
Held:
NO.
Section 4(c), Rule VI of the 2002 Rules of Procedure of the NLRC, which was in effect
at the time respondents appealed the Labor Arbiters decision, expressly provided
that, on appeal, the NLRC shall limit itself only to the specific issues that were
elevated for review, to wit:
RULE
VI
Appeals
Section 4. Requisites for Perfection of Appeal. x x x.
xxxx
(c) Subject to the provisions of Article 218, once the appeal is perfected in
accordance with these Rules, the Commission shall limit itself to reviewing
and deciding specific issues that were elevated on appeal.
As a testament to its effectivity and the NLRCs continued implementation of this
procedural policy, the same provision was retained as Section 4(d), Rule VI of the
2005 Revised Rules of Procedure of the NLRC.
In the case at bar, the NLRC evidently went against its own rules of procedure when
it passed upon the issue of illegal dismissal although the question raised by
respondents in their appeal was concerned solely with the legality of the labor
arbiters award of financial assistance despite the finding that petitioner was
lawfully terminated.
An appeal from a decision, award or order of the labor arbiter must be brought to
the NLRC within ten (10) calendar days from receipt of such decision, award or

order, otherwise, the same becomes final and executory [Art. 223, Labor Code; Rule
VIII, Sec. 1(a), Revised Rules of the NLRC]. Moreover, the rules of the NLRC expressly
provide that on appeal, the Commission shall limit itself only to the specific issues
that were elevated for review, all other matters being final and executory [Rule VIII,
Sec. 5(c), Revised Rules of the NLRC, italics supplied].
In the present case, petitioner, aggrieved by the labor arbiters decision ordering
the extension of financial assistance to Galagar despite the finding that his
termination was for just cause, specifically limited his appeal to a single legal
question, i.e., the validity of the award of financial assistance to an employee
dismissed for pilfering company property. On the other hand, private respondent
did not appeal.
When petitioner limited the issue on appeal, necessarily the NLRC may
review only that issue raised. All other matters, including the issue of the
validity of private respondents dismissal, are final. If private respondent
wanted to challenge the finding of a valid dismissal, he should have
appealed his case seasonably to the NLRC. By raising new issues in the
reply to appeal, private respondent is in effect appealing his
case although he has, in fact, allowed his case to become final by not
appealing within the reglementary period. A reply/opposition to appeal cannot
take the place of an appeal. Therefore, in this case, the dismissal of the complaint
for illegal dismissal and the denial of the prayer for reinstatement, having become
final, can no longer be reviewed.
The Labor Code provision, read in its entirety, states that the NLRCs
power to correct errors, whether substantial or formal, may be exercised
only in the determination of a question, matter or controversywithin its
jurisdiction [Art. 218, Labor Code]. Therefore, by considering the arguments
and issues in the reply/opposition to appeal which were not properly raised by
timely appeal nor comprehended within the scope of the issue raised in petitioners
appeal, public respondent committed grave abuse of discretion amounting to
excess of jurisdiction.
The contention that the NLRC may nevertheless look into other issues although not
raised on appeal since it is not bound by technical rules of procedure, is likewise
devoid of merit.
The law does not provide that the NLRC is totally free from "technical
rules of procedure", but only that the rules of evidence prevailing in
courts of law or equity shall not be controlling in proceedings before the
NLRC [Art. 221, Labor Code]. This is hardly license for the NLRC to
disregard
and
violate
the
implementing
rules
it
has
itself
promulgated. Having done so, the NLRC committed grave abuse of discretion.
BANAHAW BROADCASTING CORP. VS. PACANA III;
G.R No. 171673; May 30, 2011
Facts:
On August 29, 1995, the DXWG personnel (Pacana III et al.) filed with the Labor
Arbiter a complaint for illegal dismissal, unfair labor practice, reimbursement of

unpaid Collective Bargaining Agreement (CBA) benefits, and attorneys fees against
IBC and BBC.
On June 21, 1996, Labor Arbiter Abdullah L. Alug rendered his Decision awarding the
DXWG personnel a total ofP12,002,157.28 as unpaid CBA benefits consisting of
unpaid wages and increases, 13th month pay, longevity pay, sick leave cash
conversion, rice and sugar subsidy, retirement pay, loyalty reward and separation
pay. The Labor Arbiter denied the other claims of the DXWG personnel for Christmas
bonus, educational assistance, medical check-up and optical expenses. Both sets of
parties appealed to the National Labor Relations Commission (NLRC).
The NLRC issued a resolution vacating the decision of the Labor Arbiter and
remanded the case to arbitration branch of origin. On October 15, 1998, Labor
Arbiter Nicodemus G. Palangan rendered a Decision adjudging BBC to be liable for
the same amount in the vacated Decision of Labor Arbiter Alug.
Both BBC and respondents appealed to the NLRC anew. In their appeal, the DXWG
personnel reasserted their claim for the remaining CBA benefits not awarded to
them, and alleged error in the reckoning date of the computation of the monetary
award. BBC, in its own Memorandum of Appeal, challenged the monetary award
itself, claiming that such benefits were only due to IBC, not BBC, employees. In the
same Memorandum of Appeal, BBC incorporated a Motion for the Recomputation of
the Monetary Award (of the Labor Arbiter), in order that the appeal bond may be
reduced.
The NLRC issued an Order denying the Motion for the Recomputation of the
Monetary Award. According to the NLRC, such recomputation would result in the
premature resolution of the issue raised on appeal. The NLRC ordered BBC to
post the required bond within 10 days from receipt of said Order, with a
warning that noncompliance will cause the dismissal of the appeal for
non-perfection. Instead of complying with the Order to post the required bond,
BBC filed a Motion for Reconsideration, alleging this time that since it is wholly
owned by the Republic of the Philippines, it need not post an appeal bond.
Issue:
Whether or not Banahaw Broadcasting Corporation (BBC), a Government Owned
and Controlled Corporation is exempt from posting an appeal bond
Held:
We can infer from the foregoing jurisprudential precedents that, as a general rule,
the government and all the attached agencies with no legal personality distinct from
the former are exempt from posting appeal bonds, whereas government-owned and
controlled corporations (GOCCs) are not similarly exempted. This distinction is
brought about by the very reason of the appeal bond itself: to protect the
presumptive judgment creditor against the insolvency of the presumptive
judgment debtor. When the State litigates, it is not required to put up an appeal
bond because it is presumed to be always solvent. This exemption, however, does
not, as a general rule, apply to GOCCs for the reason that the latter has a
personality distinct from its shareholders.

In the case at bar, BBC was organized as a private corporation, sequestered in

the 1980s and the ownership of which was subsequently transferred to the
government in a compromise agreement. Further, it is stated in its Amended
Articles of Incorporation that BBC has the following primary function:
To engage in commercial radio and television broadcasting, and for this purpose, to
establish, operate and maintain such stations, both terrestrial and satellite or
interplanetary, as may be necessary for broadcasting on a network wide or
international basis.
It is therefore crystal clear that BBCs function is purely commercial or proprietary
and not governmental. As such, BBC cannot be deemed entitled to an exemption
from the posting of an appeal bond.
Consequently, the NLRC did not commit an error, and much less grave abuse of
discretion, in dismissing the appeal of BBC on account of non-perfection of the
same.
SOCIAL SECURITY COMMISSION VS. RIZAL POULTRY ET AL.;
G.R. No. 167050; June 1, 2011
Facts:
The instant case stemmed from a petition filed by Alberto Angeles (Angeles) before
the Social Security Commission (SSC) to compel respondents Rizal Poultry and
Livestock Association, Inc. (Rizal Poultry) or BSD Agro Industrial Development
Corporation (BSD Agro) to remit to the Social Security System (SSS) all contributions
due for and in his behalf.
Angeles had earlier filed a complaint for illegal dismissal against BSD Agro and/or its
owner, Benjamin San Diego (San Diego). The Labor Arbiter initially found that
Angeles was an employee and that he was illegally dismissed. On appeal, however,
the NLRC reversed the Labor Arbiters Decision and held that no employer-employee
relationship existed between Angeles and respondents. The ruling was anchored on
the finding that the duties performed by Angeles, such as carpentry, plumbing,
painting and electrical works, were not independent and integral steps in the
essential operations of the company, which is engaged in the poultry business.
Angeles elevated the case to the Court of Appeals via petition for certiorari. The
appellate court affirmed the NLRC ruling and upheld the absence of employeremployee relationship. Angeles moved for reconsideration but it was denied by the
Court of Appeals. No further appeal was undertaken, hence, an entry of judgment
was made on 26 May 2001.
At any rate, the SSC did not take into consideration the decision of the NLRC. It
denied respondents motion to dismiss in an Order dated 19 February 2002. The
SSC ratiocinated, thus:
Decisions of the NLRC and other tribunals on the issue of existence of employeremployee relationship between parties are not binding on the Commission. At most,
such finding has only a persuasive effect and does not constitute res judicata as a
ground for dismissal of an action pending before Us. While it is true that the parties
before the NLRC and in this case are the same, the issues and subject matter are
entirely different. The labor case is for illegal dismissal with demand for backwages

and other monetary claims, while the present action is for remittance of unpaid
SS[S] contributions. In other words, although in both suits the respondents invoke
lack of employer-employee relationship, the same does not proceed from identical
causes of action as one is for violation of the Labor Code while the instant case is
for violation of the SS[S] Law.
Respondents sought recourse before the Court of Appeals by way of a petition for
certiorari. The Court of Appeals reversed the rulings of the SSC and held that there
is a common issue between the cases before the SSC and in the NLRC; and it is
whether there existed an employer-employee relationship between Angeles and
respondents. Thus, the case falls squarely under the principle of res judicata,
particularly under the rule on conclusiveness of judgment, as enunciated in Smith
Bell and Co. v. Court of Appeals.
Issue:
WON the decision of the NLRC and the Court of Appeals, finding no employeremployee relationship, constitutes res judicata as a rule on conclusiveness of
judgment as to preclude the relitigation of the issue of employer-employee
relationship in a subsequent case filed before the petitioner.
Held:
The elements of res judicata are: (1) the judgment sought to bar the new action
must be final; (2) the decision must have been rendered by a court having
jurisdiction over the subject matter and the parties; (3) the disposition of the case
must be a judgment on the merits; and (4) there must be as between the first and
second action, identity of parties, subject matter, and causes of action. Should
identity of parties, subject matter, and causes of action be shown in the two cases,
then res judicata in its aspect as a "bar by prior judgment" would apply. If as
between the two cases, only identity of parties can be shown, but not identical
causes of action, then res judicata as "conclusiveness of judgment" applies.
Verily, the principle of res judicata in the mode of "conclusiveness of judgment"
applies in this case. The first element is present in this case. The NLRC ruling was
affirmed by the Court of Appeals. It was a judicial affirmation through a decision
duly promulgated and rendered final and executory when no appeal was undertaken
within the reglementary period. The jurisdiction of the NLRC, which is a quasijudicial body, was undisputed. Neither can the jurisdiction of the Court of Appeals
over the NLRC decision be the subject of a dispute. The NLRC case was clearly
decided on its merits; likewise on the merits was the affirmance of the NLRC by the
Court of Appeals.
With respect to the fourth element of identity of parties, we hold that there is
substantial compliance.
The parties in SSC and NLRC cases are not strictly identical. Rizal Poultry was
impleaded as additional respondent in the SSC case. Jurisprudence however does
not dictate absolute identity but only substantial identity. There is substantial
identity of parties when there is a community of interest between a party in the first
case and a party in the second case, even if the latter was not impleaded in the first
case.

A case in point is Smith Bell and Co. v. Court of Appeals25 which, contrary to SSC, is
apt and proper reference. Smith Bell availed of the services of private respondents
to transport cargoes from the pier to the company's warehouse. Cases were filed
against Smith Bell, one for illegal dismissal before the NLRC and the other one with
the SSC, to direct Smith Bell to report all private respondents to the SSS for
coverage. While the SSC case was pending before the Court of Appeals, Smith Bell
presented the resolution of the Supreme Court in G.R. No. L-44620, which affirmed
the NLRC, Secretary of Labor, and Court of Appeals finding that no employeremployee relationship existed between the parties, to constitute as bar to the SSC
case. We granted the petition of Smith Bell and ordered the dismissal of the case.
We held that the controversy is squarely covered by the principle of res judicata,
particularly under the rule on "conclusiveness of judgment." Therefore, the
judgment in G.R. No. L-44620 bars the SSC case, as the relief sought in the latter
case is inextricably related to the ruling in G.R. No. L-44620 to the effect that
private respondents are not employees of Smith Bell.
UNIVERSITY PLANS, INC. VS. SOLANO;
G.R. No. 170416; June 22, 2011
Facts:
Respondents filed before the Labor Arbiter complaints for illegal dismissal, illegal
deductions, overriding commissions, unfair labor practice, moral and exemplary
damages, and actual damages against petitioner University Plans Incorporated.
The Labor Arbiter found petitioner guilty of illegal dismissal and ordered
respondents' reinstatement as well as the payment of their full backwages,
proportionate 13th month pay, moral/exemplary damages, and attorney's fees.
Petitioner appealed the Decision of the LA to the NLRC and filed its Memorandum on
Appeal as well as a Motion to Reduce Bond. Simultaneous with the filing of said
pleadings, it posted a cash bond in the amount of P30,000.00.
In its Motion to Reduce Bond, petitioner alleged that it was under receivership and
that it cannot dispose of its assets at such a short notice. Because of this, it could
not post the required bond. Nevertheless, it has P30,000.00 available for immediate
disposition and thus prayed that said amount be deemed sufficient to satisfy the
required bond for the perfection of its appeal. The NLRC denied petitioner's Motion
to Reduce Bond and directed it to post an additional appeal bond in the amount of
P3,013,599.50 within an unextendible period of 10 days from notice, otherwise the
appeal shall be dismissed for non-perfection.
The NLRC denied petitioner's motion for reconsideration ratiocinating that while it
has the discretion to reduce the appeal bond, it is nevertheless not persuaded that
petitioner was incapable of posting the required bond. It noted that petitioner failed
to submit any financial statement or provide details anent its alleged receivership or
its sources of income.
Unsatisfied, petitioner went to the CA through a Petition for Certiorari. The CA
upheld the NLRC Resolution.

Issue:
Whether or not the NLRC erred in not considering the merit or lack of merit of
petitioners Motion to Reduce Bond.
Held:
There is merit in the petition.
The NLRC erred in not considering the merit or lack of merit of petitioner's
Motion to Reduce Bond.
Petitioner attached to its Motion to Reduce Bond the SEC Orders dated August 23,
1999 and May 23, 2000. The Order of August 23, 1999 is a Cease and Desist Order
which, among others, prohibited the officers and agents of petitioner from
withdrawing from its trust funds or from making any disposition thereof and,
ordered the freeze of all its assets and properties. On the other hand, the May 23,
2000 Order placed UPI, Inc. under the management and control of a RECEIVER.
From the said SEC Orders, it is unmistakable that petitioner was under receivership.
And from the tenor and contents of said Orders, it is possible that petitioner has no
liquid asset which it could use to post the required amount of bond. Also, it is quite
understandable that because of petitioner's financial state, it cannot raise the
amount of more than P3 million within a period of 10 days from receipt of the Labor
Arbiter's judgment.
However, the NLRC ignored petitioner's allegations and instead remained adamant
that since the amount of bond is fixed by law, petitioner must post an additional
bond of more than P3 million. This, to us, is an utter disregard of the provision of the
Labor Code and of the NLRC Revised Rules of Procedure allowing the reduction of
bond in meritorious cases. While the NLRC tried to correct this error in its March 21,
2003 Resolution by further explaining that it was not persuaded by petitioner's
alleged incapability of posting the required amount of bond for failure to submit
financial statement, list of sources of income and other details with respect to the
alleged receivership, we still find the hasty denial of the motion to reduce bond not
proper.
Notwithstanding petitioner's failure to submit its financial statement and list of
sources of income and to give more details relative to its receivership, it was
nevertheless able to show through the abovementioned SEC Orders that it was
indeed under a state of receivership. This should have been sufficient reason for the
NLRC to not outrightly deny petitioner's motion. As to the lacking documents and
details on the receivership, it is true that they are needed by the NLRC in
determining petitioner's capacity to post the required amount of bond. However,
their absence should not lead to the outright denial of the motion since as earlier
discussed, the NLRC is not precluded from conducting a preliminary determination
on the merit or lack of merit of a motion to reduce bond. Here, considering the clear
showing of petitioner's state of receivership, the NLRC should have conducted such
preliminary determination and therein require the submission of said documents
and other necessary evidence before proceeding to resolve the subject motion.
After all, the present case falls under those cases where the bond requirement on
appeal may be relaxed considering that (1) there was substantial compliance with

the Rules; (2) the surrounding facts and circumstances constitute meritorious
grounds to reduce the bond; and (3) the petitioner, at the very least, exhibited its
willingness and/or good faith by posting a partial bond during the reglementary
period. Also, such a procedure would be in keeping with the Labor Code's mandate
to use every and all reasonable means to ascertain the facts in each case speedily
and objectively, without regard to technicalities of law or procedure, all in the
interest of due process. We thus find error on the part of the NLRC when it denied
petitioner's Motion to Reduce Bond and likewise on the part of the CA when it
affirmed said denial.
In view of the foregoing, a remand of this case to the NLRC for the conduct of
preliminary determination of the merit or lack of merit of petitioner's Motion to
Reduce Bond is proper.
BPI EMPLOYEES UNION METRO MANILA VS. BANK OF THE PHIL. ISLANDS;
G.R No. 178699; September 21, 2011
Facts:
Petitioner Uy was a bank teller of the respondent BPI. She was separated from her
job allegedly because of insubordination, disrespect and absence without leave. She
together with the Union, filed a case for illegal dismissal against respondent in the
Voluntary Arbitrator. The VA ruled in favour of her, ordering the respondent to
reinstate her and award full backwages.
Both appealed to the CA which affirmed the VAs decision with modifications. Still
unsatisfied, Uy and the Union went to SC and alleged that BPIs remedy is not
a certiorari petition under Rule 65 of the Rules of Court but an appeal from
judgments, final orders and resolutions of voluntary arbitrators under Rule 43 of the
Rules of Court. They also contended that BPIs petition is wanting in substance.
Issue:
WON BPIs remedy of certiorari petition under Rule 65 is proper
Held:
YES.
Section 1, Rule 41 of the Rules of Court explicitly provides that no appeal may be
taken from an order of execution, the remedy of an aggrieved party being an
appropriate special civil action under Rule 65 of the Rules of Court. Thus, BPI
correctly availed of the remedy of certiorari under Rule 65 of the Rules of Court
when it assailed the December 6, 2005 order of execution of the Voluntary
Arbitrator.
DUP SOUND PHILS. VS. CA;
G.R. No. 168317; November 21, 2011
Facts:
Private respondent, Pial is an employee of herein petitioner DUP Sound Phils. (DUP);
petitioner Tan is the owner and manager of DUP. Pial was given the job of
"mastering tape"; his main function was to adjust the sound level and intensity of
the music to be recorded as well as arrange the sequence of the songs to be

recorded in the cassette tapes. Pial got absent from work because he got sick. The
following day when he was ready for work, he was informed by the office secretary
not to report for work until such time that they will advise him to do so. After three
weeks without receiving any notice, Pial again called up their office. This time the
office secretary advised him to look for another job because, per instruction of Tan,
he is no longer allowed to work at DUP. Pial filed a complaint for illegal dismissal and
prayed for the payment of his unpaid service incentive leave pay, full backwages,
separation pay, moral and exemplary damages as well as attorney's fees.
Petitioners DUP and Tan denied the material allegations of Pial; that the latter failed
to report for work following an altercation with his supervisor the previous day and
that Pial called up their office and informed the office secretary that he will be going
back to work on September 17, 2001. However, he failed to report for work on the
said date. Petitioners were subsequently surprised when they learned that Pial filed
a complaint for illegal dismissal against them; Pial was never dismissed, instead, it
was his unilateral decision not to work at DUP anymore.
The Labor Arbiter rendered a decision declaring Pial to have been illegally dismissed
and ordering DUP and Tan to reinstate him to his former position and pay him
backwages, cost of living allowance, service incentive leave pay and attorney's fees.
On appeal, the NLRC modified the decision by deleting the award of backwages and
attorney's fees. The NLRC ruled that there was no illegal dismissal on the part of
DUP and Tan, but neither was there abandonment on the part of Pial. Pial then filed
a special civil action for certiorari with the CA. The CA set aside the decision of the
NLRC and reinstated the decision of the LA.
Issue:
Whether or not Pial was illegally dismissed.
Held:
This Court cannot give credence to petitioners' claim that private respondent
abandoned his job. Pial was illegally dismissed.
The settled rule in labor cases is that the employer has the burden of proving that
the employee was not dismissed, or, if dismissed, that the dismissal was not illegal,
and failure to discharge the same would mean that the dismissal is not justified and,
therefore, illegal. In the instant case, what betrays petitioners' claim that private
respondent was not dismissed from his employment but instead abandoned his job
is their failure to prove that the latter indeed stopped reporting for work without any
justifiable cause or a valid leave of absence.
If private respondent indeed abandoned his job, petitioners should have afforded
him due process by serving him written notices, as well as a chance to explain his
side, as required by law. It is settled that, procedurally, if the dismissal is based on a
just cause under Article 282 of the Labor Code, the employer must give the
employee two written notices and a hearing or opportunity to be heard if requested
by the employee before terminating the employment: a notice specifying the
grounds for which dismissal is sought, a hearing or an opportunity to be heard and,
after hearing or opportunity to be heard, a notice of the decision to dismiss. Again,
petitioners failed to do these. Thus, the foregoing bolsters private respondent's

claim that he did not abandon his work but was, in fact, dismissed.
Neither may private respondent's refusal to report for work subsequent to the LA's
issuance of an order for his reinstatement be considered as another abandonment
of his job. It is a settled rule that failure to report for work after a notice to return to
work has been served does not necessarily constitute abandonment. As defined
under established jurisprudence, abandonment is the deliberate and unjustified
refusal of an employee to resume his employment. It is a form of neglect of duty,
hence, a just cause for termination of employment by the employer. For a valid
finding of abandonment, these two factors should be present: (1) the failure to
report for work or absence without valid or justifiable reason; and (2) a clear
intention to sever employer-employee relationship, with the second as the more
determinative factor which is manifested by overt acts from which it may be
deduced that the employee has no more intention to work. The intent to discontinue
the employment must be shown by clear proof that it was deliberate and
unjustified. In the instant case, private respondent claimed that his subsequent
refusal to report for work despite the Labor Arbiter's order for his reinstatement is
due to the fact that he was subsequently made to perform the job of a
"bodegero" of which he is unfamiliar and which is totally different from his previous
task of "mastering tape." Moreover, he was assigned to a different workplace, which
is a warehouse, where he was isolated from all other employees. The Court notes
that petitioners failed to refute the foregoing claims of private respondent
Under the existing law, an employee who is unjustly dismissed from work shall be
entitled to reinstatement without loss of seniority rights. Article 279 of the Labor
Code clearly provides that an employee who is dismissed without just cause and
without due process is entitled to backwages and reinstatement or payment of
separation pay in lieu thereof. Article 223 of the same Code also provides that an
employee entitled to reinstatement shall either be admitted back to work under the
same terms and conditions prevailing prior to his dismissal or separation, or, at the
option of the employer, merely reinstated in the payroll. It is established in
jurisprudence that reinstatement means restoration to a state or condition from
which one had been removed or separated. The person reinstated assumes the
position he had occupied prior to his dismissal. Reinstatement presupposes that the
previous position from which one had been removed still exists, or that there is an
unfilled position which is substantially equivalent or of similar nature as the one
previously occupied by the employee.
This Court has ruled in many instances that reinstatement is no longer viable where,
among others, the relations between the employer and the employee have been so
severely strained, that it is not in the best interest of the parties, nor is it advisable
or practical to order reinstatement, or where the employee decides not to be
reinstated. In the instant case, the resulting circumstances show that reinstatement
would be impractical and would hardly promote the best interest of the parties.
Resentment and enmity between petitioners and private respondent necessarily
strained the relationship between them or even provoked antipathy and antagonism
as shown by the acts of the parties subsequent to the order of reinstatement.
Besides, private respondent expressly prayed for an award of separation pay in lieu
of reinstatement from the very start of the proceedings before the Labor Arbiter. By
so doing, he forecloses reinstatement as a relief by implication.

Where reinstatement is no longer viable as an option, separation pay equivalent to

one (1) month salary for every year of service should be awarded as an alternative.
This has been the consistent ruling in the award of separation pay to illegally
dismissed employees in lieu of reinstatement.
AUJERO VS. PHIL. COMMUNICATIONS SATELLITE CORP.;
G.R. No. 193484; January 18, 2012
Facts
Petitioner started working for Philcomsat in 1967 as an accountant. On August 15,
2001 or after 34 years of service, he applied for early retirement and the same was
approved on September 15, 2001. During that time, he was the Senior VicePresident. He executed a Deed of Release and Quitclaim in Philcomsats favor on
September 12, 2002 with a receipt from the latter of a check in the amount of P
9,439, 327.91.After almost 3 years, petitioner filed a complaint for unpaid
retirement benefits claiming that the actual amount of his retirement pay is P 14,
015, 055.00 and the P 9, 439, 327.91 that he received as supposed settlement is
unconscionable. Thus, his quitclaim must be declared as null and void. He said that
he had no choice but to accept said amount because he was in dire need thereof
and he was ready to return to his hometown so he signed the quitclaim despite the
deficiency as no money would be released if he did not execute a release and
waiver in Philcomsats favor. According to him, the letter of Philcomsats chairman
and president addressed to UCPB for the release of P 9,439,327.91 to him and P
4,575,727.09 to Philcomsat, which predated the execution of his quitclaim, indicates
the companys pre-conceived plans to deprive him of a portion of his retirement pay.
The LA decided in favor of the petitioner and ordered Philcomsat to pay him P
4,575,727.09and P 274,805.00 as balance of his retirement benefits and salary for
the period from August 15 to September 15, 2001. Petitioners complaint for unpaid
retirement benefits and salary was dismissed because he failed to prove
that Philcomsat employed means to vitiate his consent to the quitclaim.
Philcomsats appeal to the NLRC from LAs decision was filed and its surety bond
posted beyond the prescribed period of 10 days but since it was only one day
delayed, the NLRC disregard the procedural lapse & proceeded with the appeal.
Petitioner later filed for a petition for certiorari accusing NRLC with grave abuse
of discretion for proceeding despite respondents belated appeal. He claimed that
when Philcomsat filed its appeal and posted its surety bond, LAs decision became
final and executory and the failure of Philcomsats counsel to verify the copy does
not constitute excusable negligence. The CA however, found no merit in the claim of
petitioner and ruled that the NLRC was correct in upholding the validity of the
quitclaim because the terms of the Deed of Release and Quitclaim were reasonable
and there was no showing that Philcomsat employed coercion, fraud or undue
influence upon petitioner to compel him to sign the same.
Issues:
1. Whether or not the delay in the filing of Philcomsats appeal and posting of surety
bond is inexcusable; and
2. Whether or not the quitclaim executed by the petitioner in Philcomsats favor is
valid, thereby foreclosing his right to institute any claim against Philcomsat
Held:

The Court rules in Philcomsats favor since procedural rules may be waived or
dispensed with in absolutely meritorious cases. According to Philcomsat, when
petitioner made the execution of the quitclaim, it was voluntary. His educational
attainment and the position he occupied also militate against his claim that he
was pressured or coerced into signing the quitclaim. Absent any evidence that any
vices of consent is present and considering the petitioners position and education,
the quitclaim executed by the petitioner constitutes a valid and binding agreement.
Since petitioners claim of fraud and bad faith against Philcomsat is
unsubstantiated, this Court
thus, finds the quitclaim to be legitimate waiver. The factual issues were determined
by the NLRC and were affirmed by the CA. Petition is denied.
SARONA VS. NLRC;
G.R. No. 185280; January 18, 2012
Facts:
Petitioner, a security guard in Sceptre since April 1976, was asked by Sceptres
operations manager on June 2003, to submit a resignation letter as a requirement
for an application in Royale and to fill up an employment application form for the
said company. He was then assigned at Highlight Metal Craft Inc. from July 29 to
August 8, 2003 and was later transferred to Wide Wide World Express Inc. On
September 2003, he was informed that his assignment at WWWE Inc. was
withdrawn because Royale has been allegedly replaced by another security agency
which he later discovered to be untrue. Nevertheless, he was once again assigned
at Highlight Metal sometime in September 2003 and when he reported at Royales
office on October 1, 2003, he was informed that he would no longer be given any
assignment as instructed by Sceptres general manager. He thus filed a complaint
for illegal dismissal. The LA ruled in petitioners favor as he found him illegally
dismissed and was not convinced by the respondents claim on petitioners
abandonment.
Respondents were ordered to pay backwages computed from the day he was
dismissed up to the promulgation of his decision on May 11, 2005.The LA also
ordered for the payment of separation pay but refused to pierce Royales corporate
veil.
Respondents appealed to the NLRC claiming that the LA acted with grave abuse of
discretion upon ruling on the illegal dismissal of petitioner. NLRC partially affirmed
the LAs decision with regard to petitioners illegal dismissal and separation pay but
modified the amount of backwages and limited it to only 3 months of his last month
salary reducing P95, 600 to P15, 600 since he worked for Royale for only 1 month
and 3 days.
Petitioner did not appeal to LA but raised the validity of LAs findings on piercing
Royales corporate personality and computation of his separation pay and such
petition was dismissed by the NLRC.
Petitioner elevated NLRCs decision to the CA on a petition for certiorari, and the CA
disagreed with the NLRCs decision of not proceeding to review the evidence for
determining if Royale is Sceptres alter ego that would warrant the piercing of its
corporate veil.

Issues:
1) Whether or not Royales corporate fiction should be pierced for the purpose of
compelling it to recognize the petitioners length of service with Sceptre and for
holding it liable for the benefits that have accrued to him arising from his
employment with Sceptre; and
2) Whether or not petitioners backwages should be limited to his salary for 3
months
Held:
The doctrine of piercing the corporate veil is applicable on alter ego cases, where a
corporation is merely a farce since it is a mere alter ego or business conduit of a
person, or where the corporation is so organized and controlled and its affairs are so
conducted as to make it merely an instrumentality, agency, conduit or adjunct of
another corporation. The way on how petitioner was made to resign from Sceptre
then later on made an employee of Royale, reflects the use of the legal fiction of the
separate corporate personality and is an implication of continued employment.
Royale is a continuation or successor or Sceptre since the employees of Sceptre and
of Royale are the same and said companies have the same principal place of
business.
Because petitioners rights were violated and his employer has not changed, he is
entitled to separation pay which must be computed from the time he was hired until
the finality of this decision. Royale is also ordered to pay him backwages from his
dismissal on October 1, 2003 until the finality of this decision. However, the amount
already received by petitioner from the respondents shall be deducted. He is also
awarded moral and exemplary damages amounting to P 25, 000.00 each for his
dismissal which was tainted with bad faith and fraud. Petition is granted. CAs
decision is reversed and set aside.
SALENGA ET AL. VS. CA;
G.R. No. 174941; February 1, 2012
Facts:
President/Chief Executive Officer (CEO) Rufo Colayco issued an Order informing
petitioner that, pursuant to the decision of the board of directors of respondent
CDC, the position of head executive assistant the position held by petitioner was
declared redundant. Petitioner filed a Complaint for illegal dismissal with a claim for
reinstatement and payment of back wages, benefits, and moral and exemplary
damages against respondent CDC and Colayco. Respondents, represented by the
Office of the Government Corporate Counsel (OGCC), alleged that the NLRC had no
jurisdiction to entertain the case on the ground that petitioner was a corporate
officer and, thus, his dismissal was an intra-corporate matter falling properly within
the jurisdiction of the Securities and Exchange Commission (SEC). LA Darlucio
rendered a Decision in favor of petitioner. From the decision, the OCGCC filed an
appeal with the National Labor Relations Commission (NLRC) via a Memorandum of
Appeal verified and certified by Hilana Timbol-Roman, the executive vice president
of respondent CDC. The petitioner opposed the appeal on the ground that the
Memorandum of Appeal and Joint Affidavit were not accompanied by a board
resolution from respondents board of directors authorizing either Timbol-Roman or
Atty. Mallare, or both, to pursue the case or to file the appeal on behalf of

respondent.
Issue:
Whether or not the NLRC has jurisdiction to entertain the appeal.
Held:
NLRC has no jurisdiction to entertain the appeal. It is clear from the NLRC Rules of
Procedure that appeals must be verified and certified against forum-shopping by the
parties-in-interest themselves. A corporation can only exercise its powers and
transact its business through its board of directors and through its officers and
agents when authorized by a board resolution or its bylaws. Absent the requisite
board resolution, neither Timbol-Roman nor Atty. Mallari, who signed the
Memorandum of Appeal and Joint Affidavit of Declaration allegedly on behalf of
respondent corporation, may be considered as the appellant and employer
referred to by Rule VI, Sections 4 to 6 of the NLRC Rules of Procedure. The court
cannot agree with the OGCCs attempt to downplay this procedural flaw by claiming
that, as the statutorily assigned counsel for GOCCs, it does not need such
authorization. In Constantino-David v. Pangandaman-Gania, 456 Phil. 273, 294-298
(2003), the court exhaustively explained why it was necessary for government
agencies or instrumentalities to execute the verification and the certification against
forum-shopping through their duly authorized representatives. The purpose of
verification is to secure an assurance that the allegations in the pleading are true
and correct and have been filed in good faith. Unless equitable circumstances which
are manifest from the record of a case prevail, it therefore becomes necessary for
the concerned government agency or its authorized representatives to certify for
non-forum shopping if only to be sure that no other similar case or incident is
pending before any other court.
Anent the corporations liability, the decision of the LA still stands. In the case at
bar, respondents failed to adduce any evidence showing that the position of Head
Executive Assistant is superfluous. There is no evidence on record to show that the
position of Head Executive Assistant was abolished by the Board of Directors in its
meetings. Hence, the ground of redundancy is merely a device made by respondent
Colayco in order to ease out the complainant from the respondent corporation.
Moreover, the complainant was not accorded his right to due process prior to his
termination. He was not given the opportunity to be heard and defend himself.
However, the court notes that with regards to respondent Colaycos solidary
liability with the corporation, petitioner notably in the case at hand, did not
question the ruling made by NLRC in finding that respondent Colayco may not be
held solidarily responsible to him. As a result, it dropped him as a respondent.
Based on the foregoing, all other subsequent proceedings regarding the issue of
petitioners dismissal are null and void for having been conducted without
jurisdiction.
LOCKHEED DETECTIVE & WATCHMAN AGENCY VS. UNIVERSITY OF THE
PHILS.;
G.R No. 185918; April 18, 2012
Facts:
Petitioner entered into a contract for security services with respondent University of

the Philippines and they were both sued by several security guards in 1998 for
payment of underpaid wages and other benefits. The labor arbiter found the claims
meritorious and held both petitioner and respondent solidarily liable as job
contractor and principal. Upon appeal by both, the decision was only modified by
dismissing some claims (premium pay and service incentive leave pay) for lack of
basis but they were still held solidarily liable. An MR on this was also denied by the
NLRC. The NLRC decision became final and executor on 2002 and a writ of execution
was issued but later quashed by the LA on motion of UP due to the disputes
regarding the amount of the award. But, such order quashing the writ was reversed
by the NLRC.
UP moved to reconsider the NLRC resolution but it was upheld with the modification
that the satisfaction of the judgment award in favor of Lockheed will be only against
the funds of UP which are not identified as public funds. The order and resolution
became final and an alias writ of execution was issued.
Pursuant to such order, a notice of garnishment was issued to PNB for the
satisfaction of the award. UP filed a motion to quash the writ of garnishment and
argued that the funds are public in nature and are earmarked for educational
purposes. After 10 days from the receipt of the notice, PNB released the garnished
funds in favor of the NLRC.
UP filed a petition for certiorari before the CA on the garnishment order which was
initially upheld by the CA but upon reconsideration, it reversed itself and ruled in
favor of UP after applying the principles in the NEA case. Thus, Lockheed filed the
petition before the SC.
Issue:
WON the money claim against UP, being a Government instrumentality, should have
been coursed to the COA first.
Held:
Yes.
This Court held that like in the NED case, UP is a juridical personality separate and
distinct from the government and has the capacity to sue and be sued and being
such, it cannot evade execution, and its funds may be subject to garnishment or
levy. However, before execution may be had, a claim for payment of the judgment
award must first be filed with the COA. Under Commonwealth Act No. 327 as
amended by Section 26 of P.D. No. 1445, it is the COA which has primary
jurisdiction to examine, audit and settle "all debts and claims of any sort" due from
or owing the Government or any of its subdivisions, agencies and instrumentalities,
including government-owned or controlled corporations and their subsidiaries. With
respect to money claims arising from the implementation of Republic Act No.
6758, their allowance or disallowance is for COA to decide, subject only to the
remedy of appeal by petition for certiorari to this Court.
As to the fait accompli argument of Lockheed, contrary to its claim that there is
nothing that can be done since the funds of UP had already been garnished, since
the garnishment was erroneously carried out and did not go through the proper
procedure (the filing of a claim with the COA), UP is entitled to reimbursement of the
garnished funds plus interest of 6% per annum, to be computed from the time of

judicial demand to be reckoned from the time UP filed a petition for certiorari before
the CA which occurred right after the withdrawal of the garnished funds from PNB.
Petitioner Lockheed Detective and Watchman Agency, Inc. was ordered to
reimburse University of the Philippines the amount of P12,062,398.71 plus interest
of 6% per annum, to be computed from September 12, 2005 up to the finality of the
decision, and 12% interest on the entire amount from date of finality of the courts
decision until fully paid.

3RD ALERT SECURITY AND DETECTIVE SERVICES, INC. VS. NAVIA;

G.R. No. 200653; June 13, 2012
Facts:
Romualdo Navia filed an illegal dismissal complaint against 3rd Alert and the labor
arbiter issued a decision that Navia's dismissal was illegal. 3rd Alert appealed to the
NLRC which affirmed the ruling of the labor arbiter and later on, it issued an Entry of
Judgment certifying that the NLRC resolution has become final and executory. The
labor arbiter issued a writ of execution to enforce the recomputed monetary awards
upon Navias motion.
3rd Alert appealed the recomputed amount and alleged that the writ was issued
with grave abuse of discretion since there was already a notice of reinstatement
sent to Navia. The NLRC dismissed the appeal, ruling that 3rd Alert is guilty of bad
faith since there was no earnest effort to reinstate Navia and that there was no
notice or reinstatement sent to Navia's counsel. A motion for reconsideration was
filed, but it was likewise denied.
3rd Alert filed a petition for certiorari with the CA which found the petition without
merit because Navia had not been reinstated either physically or in the payroll. The
CA also denied the motion for reconsideration filed by 3rd Alert; hence, this petition.
Issue:
Whether or not, the CA erred in ruling that the NLRC did not commit any grave
abuse of discretion?
Held:
No. CA did not erred in ruling that the NLRC did not commit any grave abuse of
discretion
Article 223 of the Labor Code provides that in case there is an order of
reinstatement, the employer must admit the dismissed employee under the same
terms and conditions, or merely reinstate the employee in the payroll. The order
shall be immediately executory. Thus, 3rd Alert cannot escape liability by simply
invoking that Navia did not report for work. The law states that the employer must
still reinstate the employee in the payroll. Where reinstatement is no longer viable
as an option, separation pay equivalent to one (1) month salary for every year of
service could be awarded as an alternative.
In the case at bar, 3rd Alert resorted to legal tactics to frustrate the execution of the

labor arbiter's order; for about four (4) years, it evaded the obligation to reinstate
Navia. By so doing, 3rd Alert has made a mockery of justice. We thus find it proper,
under the circumstances, to impose treble costs against 3rd Alert for its utter
disregard to comply with the writ of execution. To reiterate, no indication exists
showing that 3rd Alert exerted any efforts to reinstate Navia; worse, 3rd Alert's lame
excuse of having sent a notice of reinstatement to a certain "Biznar" only
compounded the intent to mislead the courts. Failure to adduce additional evidence,
it was held that indeed there was no earnest effort for 3 rd alert to reinstate Navia.
Thus, CA was correct in affirming the judgment of the NLRC in this regard.
RADIO PHILIPPINES NETWORK, INC. VS. YAP;
G.R No. 187713; August 1, 2012
Facts:
Petitioner RPN, represented by OGCC, is a government sequestered corporation,
while petitioners Concio, Linao, Barrameda and Angeles were the President, General
Manager, Assistant General Manager for Finance, and Human Resources Manager,
respectively, of RPN who were impleaded and charged with indirect contempt, the
subject matter of the present petition. Respondents Yap, San Miguel, Dayon, Lemina
and Baptista were employees of RPN and former members of RPNEU, the bargaining
agent of the rank-and-file employees of the said company.
RPN and RPNEU entered into a CBA with a union security clause providing that a
member who has been expelled from the union shall also be terminated from the
company.
A conflict arose between the respondents and other members of RPNEU and
recommended to the union's board of directors the expulsion of the respondents
from the union. On January 24, 2006, the union wrote to RPN President Concio
demanding the termination of the respondents' employment from the company.
RPN
notified
the
respondents
that
their
employment
would
be
terminated whereupon the respondents filed with the Labor Arbiter (LA) a complaint
for illegal dismissal and non-payment of benefits.
The LA rendered a decision ordering the reinstatement of the respondents with
payment of backwages and full benefits and without loss of seniority rights after
finding that the petitioners failed to establish the legal basis of the termination of
respondents' employment. The LA also directed the company to pay the
respondents certain aggregate monetary benefits.
The petitioner submitted a Manifestation and Compliance. Respondents alleging
that there was no compliance yet and that no notice was received, respondents filed
with the LA a Manifestation and Urgent Motion to Cite for Contempt.
The petitioners denied any liability, insisting that the respondents had been duly
informed through a letter of their payroll reinstatement. The petitioners explained
that because of the intra-union dispute between the respondents and the union
leaders, they deemed it wise not to allow the respondents inside the company
premises to prevent any more untoward incidents, and to release their salaries only
at the gate.This measure was for the protection not only of respondents but also for

the other employees of RPN as well.

Unswayed by these manifestations, the LA cited the petitioners for indirect
contempt for committing disobedience to lawful order.
On appeal, the NLRC dismissed the same and it also denied the petitioners' motion
for reconsideration.
The CA dismissed the petition for failure to attach copies of pertinent pleadings
mentioned in the petition.
Issue:
WON petitioner has fully complied with the decision of the labor arbiter.
Held:
GRANTED
The manner of reinstating a dismissed employee in the payroll generally
involves an exercise of management prerogative.
The general policy of labor law is to discourage interference with an employer's
judgment in the conduct of his business. Even as the law is solicitous of the welfare
of the employees, it must also protect the right of an employer to exercise what are
clearly management prerogatives. As long as the company's exercise of judgment is
in good faith to advance its interest and not for the purpose of defeating or
circumventing the rights of employees under the laws or valid agreements, such
exercise will be upheld. Neither does labor law authorize the substitution of
judgment of the employer in the conduct of his business, unless it is shown to be
contrary to law, morals, or public policy. The only condition is that the exercise of
management prerogatives should not be done in bad faith or with abuse of
discretion.
The circumstances of the present case have more than amply shown that the
physical restoration of the respondents to their former positions would be
impractical and would hardly promote the best interest of both parties. Respondents
have accused the petitioners of being directly complicit in the plot to expel them
from the union and to terminate their employment, while petitioners have charged
the respondents with trying to sabotage the peace of the workplace in "furthering
their dispute with the union." The resentment and enmity between the parties have
so strained their relationship and even provoked antipathy and antagonism, as
amply borne out by the physical clashes that had ensued every time the
respondents attempted to enter the RPN compound, that respondents' presence in
the workplace will not only be distracting but even disruptive, to say the least.
Petitioners have substantially complied in good faith with the terms of
payroll reinstatement.
The petitioners insist that the respondents were immediately reinstated, albeit in
the payroll, in compliance with the order of the LA, and their salaries have since
been regularly paid without fail. And granting that there were occasional delays, the
petitioners assert that the respondents in their combative hostility toward the
petitioners were partly to blame for their recalcitrant demands as to the place and
schedule of payment, and their refusal to cooperate in the opening of their ATM
accounts.All these clearly show that the petitioners have substantially complied with

the LA's Decision

Petitioners are not guilty of indirect contempt.
Indirect contempt refers to contumacious or stubbornly disobedient acts
perpetrated outside of the court or tribunal, any abuse or any unlawful interference
with the process or proceedings of a court not constituting direct contempt; or any
improper conduct tending directly or indirectly to impede, obstruct or degrade the
administration of justice. To be considered contemptuous, an act must be clearly
contrary to or prohibited by the order of the court or tribunal. A person cannot, for
disobedience, be punished for contempt unless the act which is forbidden or
required to be done is clearly and exactly defined, so that there can be no
reasonable doubt or uncertainty as to what specific act or thing is forbidden or
required.
It is not denied that after the order of reinstatement of the respondents, RPN
forthwith restored them in its payroll without diminution of their benefits and
privileges, or loss of seniority rights. They retained their entitlement to the benefits
under the CBA and there was no sufficient basis for the charge of indirect contempt
against the petitioners, and that the same was made without due regard for their
right to exercise their management prerogatives to preserve the viability of the
company and the harmony of the workplace.
GONZALES VS. SOLID CEMENT CORP.;
G.R. No. 198423; October 23, 2012
Facts:
The current petition arose from the execution of the final and executory judgment in
the parties' illegal dismissal dispute. Since the LA found that an illegal dismissal
took place, the company reinstated petitioner Gonzales in the payroll.
In the meanwhile, the parties continued to pursue the original case on the merits.
The case was appealed to the NLRC and from there to the CA. The LA's ruling of
illegal dismissal was largely left undisturbed in these subsequent recourses.
The original case eventually came to this Court. We denied the petition of
respondent Solid Cement Corporation for lack of merit. Our ruling became final
and entry of judgment took place on July 12, 2005.
Soon after its finality, the original case was remanded to the LA for execution. The
LA decision declared the respondents guilty of illegal dismissal and ordered the
reinstatement of Gonzales to his former position "with full backwages and without
loss of seniority rights and other benefits. Actual reinstatement and return to
work for Gonzales (who had been on payroll reinstatement since January 22, 2001)
came on July 15, 2008.
When Gonzales moved for the issuance of an alias writ of execution on August 4,
2008, he included several items as components in computing the amount of his
backwages.
Acting on the motion, the LA added P57,900.00 as rice allowance and P14,675.00 as
medical reimbursement (with the company's apparent conformity), and excluded
the rest of the items prayed for in the motion, either because these items have
been paid or that, based on the records of the case, Gonzales was not entitled

thereto. Under the LA's execution Gonzales was entitled to a total of P965,014.15.
The NLRC, in its decision modified the LA's execution order by including the
following amounts as part of the judgment award. This ruling increased Gonzales'
entitlement to P2,805,698.04.
The CA set aside the NLRC's decision and reinstated the LA's order, prompting
Gonzales to come to the Court via a petition for review on certiorari.
From that point, only the implementation or execution of the final ruling remained to
be done. EDI
Issue:
Whether the CA was legally correct in finding that the NLRC acted outside its
jurisdiction when it modified the LA's execution order.
Held:
PARTIALLY GRANTED.
LA is DIRECTED to issue the appropriate writ of execution incorporating these
additional awards.
Re-computation of awards during execution of an illegal dismissal decision
Gonzales was almost immediately reinstated pending appeal, although only by way
of a payroll reinstatement as allowed by law. Upon the finality of the decision on the
appeal, Gonzales was actually reinstated.
Since Gonzales received his salary and benefit entitlements during his payroll
reinstatement; the general concern in the present case is more on the items that
should be included in the award, part of which are the backwages.
The current petition only generally involves a determination of the scope of the
awards that include the backwages.
The components of the backwages
a.Salary and 13th month differential due after dismissal
The Court ruled that in computing backwages, salary increases from the time of
dismissal until actual reinstatement, and benefits not yet granted at the time of
dismissal are excluded. Hence, we cannot fault the CA for finding that the NLRC
committed grave abuse of discretion in awarding the salary differential
amounting to P617,517.48 and the 13th month pay differentials
amounting to P51,459.48 that accrued subsequent to Gonzales' dismissal.
b.Legal interest of 12% on total judgment
Gonzales is entitled to 12% interest on the total unpaid judgment amount,
from the time the Court's decision (on the merits in the original case) became final.
When the judgment of the court awarding a sum of money becomes final and
executory, the rate of legal interest shall be 12% per annum from such finality until
its satisfaction.
c.Additional backwages and 13th month pay
Even where the plaintiff must allege non-payment, the general rule is that the
burden rests on the defendant to prove payment, rather than on the plaintiff to
prove non-payment.

Thus, even without proof of nonpayment, the NLRC was right in requiring the
payment of the 13th month pay and the salaries due after the LA's decision until the
illegally dismissed petitioner was reinstated in the payroll, i.e., from December 13,
2000 to January 21, 2001. It follows that the CA was wrong when it concluded that
the NLRC acted outside its jurisdiction by including these monetary awards as items
for execution.
These amounts are not excluded from the concept of backwages as the salaries
fell due after Gonzales should have been reinstated, while the 13th month pay fell
due for the same period by legal mandate. These are entitlements that cannot now
be glossed over if the final decision on the merits in this case were to be respected.
MARTOS VS. NEW SAN JOSE BUILDERS;
G.R. No. 192650; October 24, 2012
Facts:
Petitioner New San Jose Builders, Inc. is a domestic corporation duly organized and
existing under the laws of the Philippines and is engaged in the construction of
road, bridges, buildings, and low cost houses primarily for the government. One of
the projects of petitioner is the San Jose Plains Project. SJPP, calls for the
construction of low cost housing, which are being turned over to the National
Housing Authority to be awarded to deserving poor families.
Private respondents alleged that, on various dates, petitioner hired them on
different positions.
Sometime in 2000, petitioner was constrained to slow down and suspend most of
the works on the SJPP project due to lack of funds of the National Housing Authority.
Thus, the workers were informed that many of them would be laid off and the rest
would be reassigned to other projects.
Some who were retained and were issued new appointment papers to their
respective assignments, indicating therein that they are project employees.
However, they refused to sign the appointment papers as project employees and
subsequently refused to continue to work.
On different dates, three (3) Complaints for Illegal Dismissal and for money claims
were filed before the NLRC against petitioner and Jose Acuzar, by private
respondents who claimed to be the former employees of petitioner.
Petitioner denies that private respondents were illegally dismissed, and alleged that
they were project employees, whose employments were automatically terminated
upon completion of the project for which they were hired. On the other hand,
private respondents claim that petitioner hired them as regular employees,
continuously and without interruption.
Ruling of the Labor Arbiter
As earlier stated, on May 23, 2003, the LA handed down a decision declaring,
among others, that petitioner Felix Martos (Martos) was illegally dismissed and
entitled to separation pay, backwages and other monetary benefits; and dismissing,
without prejudice, the complaints/claims of the other complainants (petitioners).

Ruling of the NLRC

Both parties appealed the LA decision to the NLRC. Petitioners appealed that part
which dismissed all the complaints, without prejudice, except that of Martos. On the
other hand, New San Jose Builders, Inc. (respondent) appealed that part which held
that Martos was its regular employee and that he was illegally dismissed. The NLRC
resolved the appeal by dismissing the one filed by respondent and partially granting
that of the other petitioners.
Ruling of the CA
The CA stated that the factual circumstances of Martos' employment and his
dismissal from work could not equally apply to petitioners because they were not
similarly situated. The NLRC did not even bother to look at the evidence on record
and inappropriately granted monetary awards to petitioners who had either denied
having filed a case or withdrawn the case against respondent. According to the CA,
the position papers should have covered only those claims and causes of action
raised in the complaint excluding those that might have been amicably settled.
With respect to Martos, the CA ruled that he was a regular employee of respondent
and his termination was illegal. It explained that Martos should have been
considered a regular employee because there was no indication that he was merely
a project employee when he was hired.
Issue:
Whether or not Martos should be reinstated.
Held:
DENIED
The verification requirement is significant, as it is intended to secure an assurance
that the allegations in the pleading are true and correct and not the product of the
imagination or a matter of speculation, and that the pleading is filed in good
faith. Verification is deemed substantially complied with when, as in this case, one
who has ample knowledge to swear to the truth of the allegations in the complaint
or petition signs the verification, and when matters alleged in the petition have
been made in good faith or are true and correct.
The absence of a proper verification is cause to treat the pleading as unsigned and
dismissible.
The lone signature of Martos would have been sufficient if he was authorized by his
co-petitioners to sign for them. Unfortunately, petitioners failed to adduce proof that
he was so authorized.
The Court agrees with the CA that the dismissal of the other complaints were
brought about by the own negligence and passive attitude of the complainants
themselves.
As to Martos, the Court agrees that the reinstatement being sought by him was no
longer practicable because of strained relation between the parties. Indeed, he can
no longer question this fact. This issue was never raised or taken up on appeal
before the NLRC. It was only after he lost the appeal in the CA that he raised it.
The accepted doctrine is that separation pay may avail in lieu of reinstatement if
reinstatement is no longer practical or in the best interest of the parties. Separation

pay in lieu of reinstatement may likewise be awarded if the employee decides not to
be reinstated.
Under the doctrine of strained relations, the payment of separation pay is
considered an acceptable alternative to reinstatement when the latter option is no
longer desirable or viable. On one hand, such payment liberates the employee from
what could be a highly oppressive work environment. On the other hand, it releases
the employer from the grossly unpalatable obligation of maintaining in its employ a
worker it could no longer trust.
LOON ET AL. VS. POWER MASTERS, INC.;
G.R. No. 189404; December 11, 2013
Facts:
Respondents Power Master, Inc. and Tri-C General Services employed and assigned
the petitioners as janitors and leadsmen in various Philippine Long Distance
Telephone Company (PLDT) offices in Metro Manila area. Subsequently, the
petitioners filed a complaint for money claims against Power Master, Inc., Tri-C
General Services and their officers, the spouses Homer and Carina Alumisin
(collectively, the respondents). The petitioners alleged in their complaint that they
were not paid minimum wages, overtime, holiday, premium, service incentive leave,
and thirteenth month pays. They further averred that the respondents made them
sign blank payroll sheets. On June 11, 2001, the petitioners amended their
complaint and included illegal dismissal as their cause of action. They claimed that
the respondents relieved them from service in retaliation for the filing of their
original complaint. Notably, the respondents did not participate in the proceedings
before the Labor Arbiter except on April 19, 2001 and May 21, 2001 when Mr.
Romulo Pacia, Jr. appeared on the respondents' behalf. The respondents'
counsel also appeared in a preliminary mandatory conference on July 5,
2001. However, the respondents neither filed any position paper nor proffered
pieces of evidence in their defense despite their knowledge of the pendency of the
case.
In a decision dated March 15, 2002, Labor Arbiter (LA) Elias H. Salinas partially
ruled in favor of the petitioners. The LA awarded the petitioners salary
differential, service incentive leave, and thirteenth month pays. In awarding
these claims, the LA stated that the burden of proving the payment of these money
claims rests with the employer. The LA also awarded attorney's fees in favor of
the petitioners, pursuant to Article 111 of the Labor Code.
However, the LA denied the petitioners' claims for backwages, overtime,
holiday, and premium pays. The LA observed that the petitioners failed to show
that they rendered overtime work and worked on holidays and rest days without
compensation. The LA further concluded that the petitioners cannot be declared to
have been dismissed from employment because they did not show any notice of
termination of employment. They were also not barred from entering the
respondents' premises.
Both parties appealed the LA's ruling with the National Labor Relations Commission.
The petitioners disputed the LA's denial of their claim for backwages, overtime,
holiday and premium pays. Meanwhile, the respondents questioned the LA's ruling

on the ground that the LA did not acquire jurisdiction over their persons.
The respondents insisted that they were not personally served with summons and
other processes. They also claimed that they paid the petitioners minimum wages,
service incentive leave and thirteenth month pays. As proofs, they attached
photocopied and computerized copies of payroll sheets to their
memorandum on appeal. They further maintained that the petitioners were
validly dismissed. They argued that the petitioners' repeated defiance to their
transfer to different workplaces and their violations of the company rules and
regulations constituted serious misconduct and willful disobedience.
On January 3, 2003, the respondents filed an unverified supplemental appeal. They
attached photocopied and computerized copies of list of employees with
automated teller machine (ATM) cards to the supplemental appeal. This list
also showed the amounts allegedly deposited in the employees' ATM cards. 11
They also attached documentary evidence showing that the petitioners
were dismissed for cause and had been accorded due process.
On January 22, 2003, the petitioners filed an Urgent Manifestation and Motion
where they asked for the deletion of the supplemental appeal from the records
because it allegedly suffered from infirmities. First, the supplemental appeal was
not verified. Second, it was belatedly filed six months from the filing of the
respondents' notice of appeal with memorandum on appeal. The petitioners pointed
out that they only agreed to the respondents' filing of a responsive pleading until
December 18, 2002.
Third, the attached documentary evidence on the
supplemental appeal bore the petitioners' forged signatures.
They reiterated these allegations in an Urgent Motion to Resolve Manifestation
and Motion (To Expunge from the Records Respondents' Supplemental
Appeal, Reply and/or Rejoinder) dated January 31, 2003. Subsequently, the
petitioners filed an Urgent Manifestation with Reiterating Motion to StrikeOff the Record Supplemental Appeal/Reply, Quitclaims and Spurious
Documents Attached to Respondents' Appeal dated August 7, 2003. The
petitioners argued in this last motion that the payrolls should not be given probative
value because they were the respondents' fabrications. They reiterated that the
genuine payrolls bore their signatures, unlike the respondents' photocopies of the
payrolls. They also maintained that their signatures in the respondents' documents
(which showed their receipt of thirteenth month pay) had been forged.
In a resolution dated November 27, 2003, the NLRC partially ruled in favor of the
respondents. The NLRC affirmed the LA's awards of holiday pay and attorney's
fees. It also maintained that the LA acquired jurisdiction over the persons of the
respondents through their voluntary appearance.
However, it allowed the respondents to submit pieces of evidence for the
first time on appeal on the ground that they had been deprived of due
process. It found that the respondents did not actually receive the LA's processes.
It also admitted the respondents' unverified supplemental appeal on the ground
that technicalities may be disregarded to serve the greater interest of substantial
due process. Furthermore, the Rules of Court do not require the verification of a
supplemental pleading.

The NLRC also vacated the LA's awards of salary differential, thirteenth month
and service incentive leave pays. In so ruling, it gave weight to the pieces of
evidence attached to the memorandum on appeal and the supplemental appeal. It
maintained that the absence of the petitioners' signatures in the payrolls was not an
indispensable factor for their authenticity. It pointed out that the payment of money
claims was further evidenced by the list of employees with ATM cards. It also found
that the petitioners' signatures were not forged. It took judicial notice that many
people use at least two or more different signatures. AHTICD
The NLRC further ruled that the petitioners were lawfully dismissed on grounds
of serious misconduct and willful disobedience. It found that the petitioners
failed to comply with various memoranda directing them to transfer to other
workplaces and to attend training seminars for the intended reorganization and
reshuffling.
The NLRC denied the petitioners' motion for reconsideration in a resolution dated
April 28, 2006. 17 Aggrieved, the petitioners filed a petition for certiorari under Rule
65 of the Rules of Court before the CA. 18 AEaSTC
The CA affirmed the NLRC's ruling. The CA held that the petitioners were afforded
substantive and procedural due process. Accordingly, the petitioners deliberately
did not explain their side. Instead, they continuously resisted their transfer to other
PLDT offices and violated company rules and regulations. It also upheld the NLRC's
findings on the petitioners' monetary claims.
The CA denied the petitioners' motion for reconsideration in a resolution dated
August 28, 2009, prompting the petitioners to file the present petition. 19
Issue:
1. Whether the CA erred when it did not find that the NLRC committed grave
abuse of discretion in giving due course to the respondents' appeal;
2. Whether the respondents perfected their appeal before the NLRC;
and
3. Whether the NLRC properly allowed the respondents' supplemental
appeal
4. Whether the respondents were estopped from submitting pieces of
evidence for the first time on appeal;
5. Whether the petitioners were illegally dismissed and are thus
entitled to backwages;
Held:
1. The respondents perfected theirappeal with the NLRC because the
revocation of the bonding company'sauthority has a prospective
application
Paragraph 2, Article 223 of the Labor Code provides that "[i]n case of a judgment
involving a monetary award, an appeal by the employer may be perfected only

upon the posting of a cash or surety bond issued by a reputable bonding company
duly accredited by the Commission in the amount equivalent to the monetary
award in the judgment appealed from."
Contrary to the respondents' claim, the issue of the appeal bond's validity may be
raised for the first time on appeal since its proper filing is a jurisdictional
requirement. The requirement that the appeal bond should be issued by an
accredited bonding company is mandatory and jurisdictional. The rationale
of requiring an appeal bond is to discourage the employers from using an appeal to
delay or evade the employees' just and lawful claims. It is intended to assure the
workers that they will receive the money judgment in their favor upon the dismissal
of the employer's appeal.
In the present case, the respondents filed a surety bond issued by Security
Pacific Assurance Corporation (Security Pacific) on June 28, 2002. At that
time, Security Pacific was still an accredited bonding company. However, the NLRC
revoked its accreditation on February 16, 2003. Nonetheless, this
subsequent revocation should not prejudice the respondents who relied on
its then subsisting accreditation in good faith. A bonding company's
revocation of authority is prospective in application.
However, the respondents should post a new bond issued by an accredited
bonding company in compliance with paragraph 4, Section 6, Rule 6 of the NLRC
Rules of Procedure. This provision states that "[a] cash or surety bond shall be valid
and effective from the date of deposit or posting, until the case is finally
decided, resolved or terminated or the award satisfied."
2. The CA correctly ruled that the NLRC properly gave due course to the
respondents' supplemental appeal
The CA also correctly ruled that the NLRC properly gave due course to the
respondents' supplemental appeal. Neither the laws nor the rules require the
verification of the supplemental appeal. Furthermore, verification is a formal,
not a jurisdictional, requirement. It is mainly intended for the assurance that the
matters alleged in the pleading are true and correct and not of mere speculation. 27
Also, a supplemental appeal is merely an addendum to the verified memorandum
on appeal that was earlier filed in the present case; hence, the requirement for
verification has substantially been complied with.
The respondents also timely filed their supplemental appeal on January 3, 2003. The
records of the case show that the petitioners themselves agreed that the pleading
shall be filed until December 18, 2002. The NLRC further extended the filing of the
supplemental pleading until January 3, 2003 upon the respondents' motion for
extension.
3. A party may only adduce evidencefor the first time on appeal if he
adequately explains his delay in the submission of evidence and he
sufficiently proves the allegationssought to be proven
In labor cases, strict adherence to the technical rules of procedure is not required.
Time and again, we have allowed evidence to be submitted for the first
time on appeal with the NLRC in the interest of substantial justice. Thus,

we have consistently supported the rule that labor officials should use all
reasonable means to ascertain the facts in each case speedily and objectively,
without regard to technicalities of law or procedure, in the interest of due process.
However, this liberal policy should still be subject to rules of reason and fairplay.
The liberality of procedural rules is qualified by two requirements:
(1) a party should adequately explain any delay in the submission of
evidence; and
(2) a party should sufficiently prove the allegations sought to be
proven.
Guided by these principles, the CA grossly erred in ruling that the NLRC did not
commit grave abuse of discretion in arbitrarily admitting and giving weight to the
respondents' pieces of evidence for the first time on appeal.
A.The respondents failed toadequately explain their delayin the
submission of evidence
We cannot accept the respondents' cavalier attitude in blatantly disregarding the
NLRC Rules of Procedure. The CA gravely erred when it overlooked that the NLRC
blindly admitted and arbitrarily gave probative value to the respondents' evidence
despite their failure to adequately explain their delay in the submission of evidence.
Notably, the respondents' delay was anchored on their assertion that they were
oblivious of the proceedings before the LA. However, the respondents did not
dispute the LA's finding that Mr. Romulo Pacia, Jr. appeared on their behalf on April
19, 2001 and May 21, 2001. The respondents also failed to contest the petitioners'
assertion that the respondents' counsel appeared in a preliminary mandatory
conference on July 5, 2001.
Indeed, the NLRC capriciously and whimsically admitted and gave weight to the
respondents' evidence despite its finding that they voluntarily appeared in the
compulsory arbitration proceedings. The NLRC blatantly disregarded the fact that
the respondents voluntarily opted not to participate, to adduce evidence in their
defense and to file a position paper despite their knowledge of the pendency of the
proceedings before the LA. The respondents were also grossly negligent in not
informing the LA of the specific building unit where the respondents were
conducting their business and their counsel's address despite their knowledge of
their non-receipt of the processes.
B.The respondents failed tosufficiently prove theallegations sought to
beproven
Furthermore, the respondents failed to sufficiently prove the allegations sought to
be proven. Why the respondents' photocopied and computerized copies of
documentary evidence were not presented at the earliest opportunity is a serious
question that lends credence to the petitioners' claim that the respondents
fabricated the evidence for purposes of appeal. While we generally admit in
evidence and give probative value to photocopied documents in
administrative proceedings, allegations of forgery and fabrication should
prompt the adverse party to present the original documents for

inspection. It was incumbent upon the respondents to present the originals,

especially in this case where the petitioners had submitted their specimen
signatures. Instead, the respondents effectively deprived the petitioners of the
opportunity to examine and controvert the alleged spurious evidence by not
adducing the originals. This Court is thus left with no option but to rule that
the respondents' failure to present the originals raises the presumption
that evidence willfully suppressed would be adverse if produced.
It was also gross error for the CA to affirm the NLRC's proposition that "[i]t is of
common knowledge that there are many people who use at least two or more
different signatures." 37 The NLRC cannot take judicial notice that many people use
at least two signatures, especially in this case where the petitioners themselves
disown the signatures in the respondents' assailed documentary evidence. The
NLRC's position is unwarranted and is patently unsupported by the law and
jurisprudence.
3. The petitioners are entitled tobackwages
In termination cases, the burden of proving just and valid cause for dismissing an
employee from his employment rests upon the employer. The employer's failure to
discharge this burden results in the finding that the dismissal is unjustified. 40 This
is exactly what happened in the present case.
4. The petitioners are entitled to salarydifferential, service incentive,
holiday, and thirteenth month pays
As in illegal dismissal cases, the general rule is that the burden rests on the
defendant to prove payment rather than on the plaintiff to prove non-payment of
these money claims. The rationale for this rule is that the pertinent personnel files,
payrolls, records, remittances and other similar documents which will show that
differentials, service incentive leave and other claims of workers have been paid
are not in the possession of the worker but are in the custody and control of the
employer. 42
5. The petitioners are not entitled toovertime and premium pays
The burden of proving entitlement to overtime pay and premium pay for holidays
and rest days rests on the employee because these are not incurred in the
normal course of business. 43 In the present case, the petitioners failed to
adduce any evidence that would show that they actually rendered service
in excess of the regular eight working hours a day, and that they in fact
worked on holidays and rest days.
6. The petitioners are entitled toattorney's fees
The award of attorney's fees is also warranted under the circumstances of this case.
An employee is entitled to an award of attorney's fees equivalent to ten percent
(10%) of the amount of the wages in actions for unlawful withholding of wages. 44
As a final note, we observe that Kodelito Ayala, Winelito Ojel, Renato Rodrego and
Welito Loon are also named as petitioners in this case. However, we deny their
petition for the reason that they were not part of the proceedings before the CA.
Their failure to timely seek redress before the CA precludes this Court from

awarding them monetary claims.

WHEREFORE, based on these premises, we REVERSE and SET ASIDE the decision
dated June 5, 2009, and the resolution dated August 28, 2009 of the Court of
Appeals in CA-G.R. SP No. 95182. This case is REMANDED to the Labor Arbiter for
the sole purpose of computing petitioners' full backwages (computed from the date
of their respective dismissals up to the finality of this decision) and their salary
differential, service incentive leave, holiday, thirteenth month pays, and attorney's
fees equivalent to ten percent (10%) of the withheld wages.
LEPANTO CONSOLIDATED MINING CORP. VS. ICAO;
G.R. No. 196047; January 15, 2014
Facts:
The instant petition stemmed from a complaint for illegal dismissal and damages
filed by private respondent Belio C. Icao [Icao] against petitioners Lepanto
Consolidated Mining Company (LCMC) and its Chief Executive Officer [CEO] Felipe
U. Yap [Yap] before the Arbitration Branch of the NLRC.
Private respondent claimed that his dismissal from work was without just or
authorized cause since petitioners failed to prove by ample and sufficient
evidence that he stole gold bearing highgrade ores from the company premises.
If private respondent was really placing a wrapped object inside his boots, he
should have been sitting or bending down to insert the same, instead of just
standing on a muckpile as alleged by petitioners. Moreover, it is beyond
imagination that a person, knowing fully well that he was being chased for
allegedly placing wrapped ore inside his boots, will transfer it to his skullguard.
The tendency in such situation is to throw the object away. As such, private
respondent prayed that petitioners be held liable for illegal dismissal, to
reinstate him to his former position without loss of seniority rights and benefits,
and to pay his full backwages, damages and attorney's fees.
For their defense, petitioners averred that SG Bulwayan saw private respondent
standing on a muckpile and inserting a wrapped object inside his right rubber
boot. SG Bulwayan immediately ran towards private respondent, but the latter
ran away to escape. He tried to chase private respondent but failed to capture
him. Thereafter, while SG Bulwayan was on his way to see his co-guard SG
Papsa-ao, he saw private respondent moving out of a stope. He then shouted at
SG Papsa-ao to intercept him. When private respondent was apprehended, SG
Bulwayan ordered him to remove his skullguard for inspection and saw a
wrapped object placed inside the helmet. SG Bulwayan grabbed it, but the
harness of the skullguard was also detached causing the object to fall on the
ground. Immediately, SG Bulwayan recovered and inspected the same which
turned out to be pieces of stone ores. Private respondent and the stone ores
were later turned over to the Mankayan Philippine National Police where he was
given a written notice of the charge against him. On January 9, 2008, a hearing
was held where private respondent, together with the officers of his union as
well as the apprehending guards appeared. On February 4, 2008, private
respondent received a copy of the resolution of the company informing him of
his dismissal from employment due to breach of trust and confidence and the

act of highgrading.
On 30 September 2008, the labor arbiter rendered a Decision holding petitioner and
its CEO liable for illegal dismissal and ordering them to pay respondent Icao
P345,879.45, representing his full backwages and separation pay. 3 The alleged
highgrading attributed by LCMC's security guards was found to have been
fabricated; consequently, there was no just cause for the dismissal of respondent.
The labor arbiter concluded that the claim of the security guards that Icao had
inserted ores in his boots while in a standing position was not in accord with normal
human physiological functioning. 4
The labor arbiter also noted that it was inconsistent with normal human behavior for
a man, who knew that he was being chased for allegedly placing wrapped ore inside
his boots, to then transfer the ore to his skullguard, where it could be found once he
was apprehended. 5 To further support the improbability of the allegation of
highgrading, the labor arbiter noted that throughout the 21 years of service of Icao
to LCMC, he had never been accused of or penalized for highgrading or any other
infraction involving moral turpitude until this alleged incident. 6
THE NLRC ORDER DISMISSING THE APPEALOF PETITIONER LCMC FOR
FAILURE TO POST THE APPEAL BOND
On 8 December 2008, petitioner and its CEO filed an Appearance with Memorandum
of Appeal 7 before the NLRC. Instead of posting the required appeal bond in the
form of a cash bond or a surety bond in an amount equivalent to the monetary
award of P345,879.45 adjudged in favor of Icao, they filed a Consolidated Motion for
Release of Cash Bond and to Apply Bond Subject for Release As Payment for Appeal
Bond (Consolidated Motion). 8 They requested therein that the NLRC release the
cash bond of P401,610.84, which they had posted in the separate case Dangiw
Siggaao v. LCMC, 9 and apply that same cash bond to their present appeal bond
liability. They reasoned that since this Court had already decided Dangiw Siggaao in
their favor, and that the ruling therein had become final and executory, the cash
bond posted therein could now be released. 10 They also cited financial difficulty as
a reason for resorting to this course of action and prayed that, in the interest of
justice, the motion be granted.
In its Order dated 27 February 2009, the NLRC First Division dismissed the appeal of
petitioner and the latter's CEO for non-perfection. 11 It found that they had failed to
post the required appeal bond equivalent to the monetary award of P345,879.45.
THE CA RULING AFFIRMING THE ORDER OF THE NLRC
On 27 September 2010, the CA issued its assailed Decision 15 affirming the Order
of the NLRC First Division, which had dismissed the appeal of petitioner and the
latter's CEO. According to the CA, they failed to comply with the requirements of law
and consequently lost the right to appeal. 16
Issue:
whether or not petitioner complied with the appeal bond requirement under the
Labor Code and the NLRC Rules by filing a Consolidated Motion to release the cash
bond it posted in another case, which had been decided with finality in its favor,
with a view to applying the same cash bond to the present case.

Held:
The Petition is meritorious. The Court finds that petitioner substantially complied
with the appeal bond requirement.
Before discussing its ruling, however, the Court finds it necessary to emphasize the
well-entrenched doctrine that an appeal is not a matter of right, but is a mere
statutory privilege. It may be availed of only in the manner provided by law and the
rules. Thus, a party who seeks to exercise the right to appeal must comply with the
requirements of the rules; otherwise, the privilege is lost. 20
In appeals from any decision or order of the labor arbiter, the posting of an appeal
bond is required under Article 223 of the Labor Code, which reads:
Article 223. APPEAL. Decisions, awards, or orders of the Labor
Arbiter are final and executory unless appealed to the
Commission by any or both parties within ten (10) calendar days
from receipt of such decisions, awards, or orders. Such appeal
may be entertained only on any of the following grounds:
xxx xxx xxx
In case of a judgment involving a monetary award, an
appeal by the employer may be perfected only upon the
posting of a cash or surety bond issued by a reputable
bonding company duly accredited by the Commission in the
amount equivalent to the monetary award in the judgment
appealed from. (Emphasis and underlining supplied)
The 2011 NLRC Rules of Procedure (NLRC Rules) incorporates this requirement in
Rule VI, Section 6, which provides:
SECTION 6. Bond. In case the decision of the Labor
Arbiter or the Regional Director involves a monetary
award, an appeal by the employer may be perfected
only upon the posting of a bond, which shall either be in
the form of cash deposit or surety bond equivalent in amount
to the monetary award, exclusive of damages and attorney's
fees. (Emphases and underlining supplied)
We now turn to the main question of whether petitioner's Consolidated Motion to
release the cash bond it posted in a previous case, for application to the present
case, constitutes compliance with the appeal bond requirement. While it is true that
the procedure undertaken by petitioner is not provided under the Labor Code or in
the NLRC Rules, we answer the question in the affirmative.
we rule that petitioner substantially complied with the mandatory requirement of
posting an appeal bond for the reasons explained below.
First, there is no question that the appeal was filed within the 10-day
reglementary period. Except for the alleged failure to post an appeal bond, the
appeal to the NLRC was therefore in order.

Second, it is also undisputed that petitioner has an unencumbered amount of

money in the form of cash in the custody of the NLRC. To reiterate, petitioner had
posted a cash bond of P401,610.84 in the separate case Dangiw Siggaao, which was
earlier decided in its favor.
Under the Rule VI, Section 6 of the 2005 NLRC Rules, "[a] cash or surety bond shall
be valid and effective from the date of deposit or posting, until the case is finally
decided, resolved or terminated, or the award satisfied." Hence, it is clear that a
bond is encumbered and bound to a case only for as long as 1) the case has not
been finally decided, resolved or terminated; or 2) the award has not been satisfied.
Therefore, once the appeal is finally decided and no award needs to be satisfied, the
bond is automatically released. Since the money is now unencumbered, the
employer who posted it should now have unrestricted access to the cash
which he may now use as he pleases as appeal bond in another case, for
instance. This is what petitioner simply did.
Third, the cash bond in the amount of P401,610.84 posted in Dangiw Siggaao is
more than enough to cover the appeal bond in the amount of P345,879.45 required
in the present case.
Fourth, this ruling remains faithful to the spirit behind the appeal bond requirement
which is to ensure that workers will receive the money awarded in their favor when
the employer's appeal eventually fails. There was no showing at all of any attempt
on the part of petitioner to evade the posting of the appeal bond. On the contrary,
petitioner's move showed a willingness to comply with the requirement. Hence, the
welfare of Icao is adequately protected.
Having complied with the appeal bond requirement, petitioner's appeal before the
NLRC must therefore be reinstated.
The Court will liberally apply the rules only in very highly exceptional cases such as
this, in keeping with the dictates of justice, reason and equity.
BUILDING CARE CORP. VS. MACARAEG;
G.R. No. 198357; December 10, 2012
Facts:
Petitioners are in the business of providing security services to their clients. They
hired respondent as a security guard beginning August 25, 1996, assigning her at
Genato Building in Caloocan City. However, on March 9, 2008, respondent was
relieved of her post. She was re-assigned to Bayview Park Hotel from March 9-13,
2008, but after said period, she was allegedly no longer given any assignment.
Thus, on September 9, 2008, respondent filed a complaint against petitioners for
illegal dismissal, underpayment of salaries, non-payment of separation pay and
refund of cash bond. Conciliation and mediation proceedings failed, so the parties
were ordered to submit their respective position papers.
Respondent claimed that petitioners failed to give her an assignment for more than
nine months, amounting to constructive dismissal, and this compelled her to file the
complaint for illegal dismissal.

On the other hand, petitioners alleged in their position paper that respondent was
relieved from her post as requested by the client because of her habitual tardiness,
persistent borrowing of money from employees and tenants of the client, and
sleeping on the job. Petitioners allegedly directed respondent to explain why she
committed such infractions, but respondent failed to heed such order. Respondent
was nevertheless temporarily assigned to Bayview Park Hotel from March 9-13,
2008, but she also failed to meet said client's standards and her posting thereat
was not extended.
Respondent then filed an administrative complaint for illegal dismissal with the PNPSecurity Agencies and Guard Supervision Division on June 18, 2008, but she did not
attend the conference hearings for said case. Petitioners brought to the conference
hearings a new assignment order detailing respondent at the Ateneo de Manila
University but, due to her absence, petitioners failed to personally serve respondent
said assignment order. Petitioners then sent respondent a letter ordering her to
report to headquarters for work assignment, but respondent did not comply with
said order. Instead, respondent filed a complaint for illegal dismissal with the Labor
Arbiter.
LA dismissed for lack of merit. NLRC dismissed the appeal for having been filed out
of time, thereby declaring that the Labor Arbiter's Decision had become final and
executor. CA the petition was granted.
Issue:
Whether the CA erred in liberally applying the rules of procedure and ruling that
respondent's appeal should be allowed and resolved on the merits despite having
been filed out of time.
Held:
GRANTED
While procedural rules may be relaxed in the interest of justice, it is well-settled that
these are tools designed to facilitate the adjudication of cases. The relaxation of
procedural rules in the interest of justice was never intended to be a license for
erring litigants to violate the rules with impunity. Liberality in the interpretation and
application of the rules can be invoked only in proper cases and under justifiable
causes and circumstances. While litigation is not a game of technicalities, every
case must be prosecuted in accordance with the prescribed procedure to ensure an
orderly and speedy administration of justice.
In this case, the justifications given by the CA for its liberality by choosing to
overlook the belated filing of the appeal are, the importance of the issue raised, i.e.,
whether respondent was illegally dismissed; and the belief that respondent should
be "afforded the amplest opportunity for the proper and just determination of his
cause, free from the constraints of technicalities," considering that the belated filing
of respondent's appeal before the NLRC was the fault of respondent's former
counsel. Note, however, that neither respondent nor her former counsel gave any
explanation or reason citing extraordinary circumstances for her lawyer's failure to
abide by the rules for filing an appeal. Respondent merely insisted that she had not
been remiss in following up her case with said lawyer.

It is, however, an oft-repeated ruling that the negligence and mistakes of counsel
bind the client. A departure from this rule would bring about never-ending suits, so
long as lawyers could allege their own fault or negligence to support the client's
case and obtain remedies and reliefs already lost by the operation of law. 15 The
only exception would be, where the lawyer's gross negligence would result in the
grave injustice of depriving his client of the due process of law. 16 In this case, there
was no such deprivation of due process. Respondent was able to fully present and
argue her case before the Labor Arbiter. She was accorded the opportunity to be
heard. Her failure to appeal the Labor Arbiter's Decision cannot, therefore, be
deemed as a deprivation of her right to due process.
CO SAY COCO PRODUCTS PHILS INC. vs BALTAZAR;
GR No. 188828, March 5, 2014
Facts:
Petitioner Co Say is a domestic corporation duly organized and existing under
Philippine laws and is the owner of a private port located in Bigaa, Legazpi City.
Tanawan Port on the other hand, is a single proprietorship owned and managed by
Salazar.
On 18 March 2002, Co Say, thru its President, Efren Co Say, entered into a Contract
for Cargo Handling Services with petitioner Tanawan Port, wherein the latter was
given the authority to manage and operate the arrastre and stevedoring services of
its port. CIAHaT
To jumpstart the operation of its cargo handling services, Tanawan Port employed
respondents Benjamin Baltasar as Manager, Marvin Baltasar as Computer Operator,
Raymundo Botalon as Crane Operator, Nilo Bordeos, Jr. as Crane Helper, Cargo
Botalon as Crane Operator and Geronimo Bas as Fork Lift Operator.
Due to lack of clientele, the business venture of Tanawan Port failed to gain
momentum causing serious alarm to the company. A couple of months after
respondents were hired, Tanawan Port decided to cease operation by sending letters
to the City Treasurer of Legaspi City and the Revenue District Officer of the Bureau
of Internal Revenue informing them of its intention to close its business and to
surrender its business registration due to serious business losses. On 30 August
2002, the City Treasurer approved the retirement from business of Tanawan Port. On
the same day, Salazar convened respondents to formally inform them of her
intention to close Tanawan Port's operation, but she was prevailed upon by the
latter to hold it up while Baltasar is looking for new clients that could help boost the
company's revenue. Efforts to revive the business, however, proved to be futile
constraining the company to finally discontinue its operation and close its business.
As a result, respondents were terminated from employment but were accordingly
given their corresponding separation pay and 13th month pay
Barely a month after they received their separation pay, respondents filed
complaints for illegal dismissal and non-payment of labor standard benefits against
petitioners Tanawan Port, Salazar, Co Say and Efren Co Say before the Labor Arbiter.
In their Position Papers, respondents alleged that Tanawan Port was merely feigning
losses in order to ease out employees, pointing out the absence of evidence to

prove business reverses. Respondents also punctuated Tanawan Port's failure to

comply with the procedural requirement of sending notices to employees concerned
and to the Department of Labor and Employment (DOLE) one month before the
intended date of closure as required by law.
Tanawan Port, for its part, asserted that respondents' severance from employment
was brought about by closure or cessation of business operation which is an
authorized cause for termination of employment under the Labor Code. To dispute
the allegation of respondents that the closure was done in bad faith, Tanawan Port
insisted that the lack of clientele caused serious financial drain to the company
leaving the management with no other option but to shutdown its operations.
On 7 August 2003, the Labor Arbiter rendered a Joint Decision in favor of
respondents and held that petitioners are liable for illegal dismissal for failure to
comply with the procedural and substantive requirements of terminating
employment due to closure of business operations. It was found that while Tanawan
Port claimed that it was suffering from serious business losses, it failed to adduce its
financial statements to prove that its withdrawal from operation was bona fide in
character. A similar failure to comply with the notice requirement was likewise
observed by the labor officer resulting in the violation of respondents' right to due
process of law. Finally, the Labor Arbiter declared that Tanawan Port is engaged in
labor-only contracting and is merely an extension of the business personality of Co
Say, which is thus, solidarily liable with the former, the labor-only contractor, for the
rightful claims of the employees.
Contradicting the Labor Arbiter Decision, the NLRC in its Decision dated 31 May
2004, held that respondents' severance from employment was not illegal, as the
company where they were working closed due to business losses, and, the closure
of business or establishment is one of the authorized causes recognized by law in
dismissing an employee. The NLRC further ruled that there was sufficient
compliance with the substantive requirement in terminating employment and
held that proof of business losses is not necessary since cessation of business
operation is a management prerogative and should not be interfered with by
courts or labor tribunals.
In a Decision 14 dated 20 April 2009, the Court of Appeals reversed the NLRC
Decision due to failure of petitioners to perfect their appeal and proceeded to affirm
the Labor Arbiter's Decision. Contrary to the ruling of the NLRC, the appellate court
ruled that the posting of the appeal bond after the period to perfect the appeal had
expired, resulted in the non-perfection of the appeal. Accordingly, the Court of
Appeals ruled that the NLRC has no authority to alter, modify or reverse the Labor
Arbiter decision after the said decision became final and executory.

Issue:
THE COURT OF APPEALS ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO
LACK OF JURISDICTION WHEN IT RULED THAT THE RESPONDENTS FAILED TO
PERFECT THEIR APPEAL ON TIME;
Held:

The NLRC ruled that petitioners were able to post the surety bond and timely
perfect their appeal before the expiration of the 10-day reglementary period, while
the Court of Appeals oppositely ruled although both findings are based on the same
pieces of evidence available on record. According to the appellate court, the First
Certification issued by the RAB-NLRC on 2 October 2003 is telling of the petitioners'
failure to perfect an appeal. It appeared in the said certification that the appeal
bond, which is a mandatory requirement for perfecting an appeal, has not been
posted as of 2 October 2003
Three months after the said certification was issued, the RAB-NLRC issued a Second
Certification on 19 January 2004, indicating that petitioners posted a surety bond on
24 September 2003 although the said bond was received by the RAB-NLRC only on
28 October 2003.
It was on the basis of the Second Certification that the NLRC allowed the appeal.
The divergence of the findings of the NLRC on the one hand, and the Court of
Appeals on the other, necessitates a review of the records of this case to ascertain
which conclusion is supported by substantial evidence and, enough to remove the
conclusion away from the issue of grave abuse of discretion. Substantial evidence is
such amount of relevant evidence which a reasonable mind might accept as
adequate to support a conclusion.
The crucial issue in the resolution of the instant petition concerns the timely posting
of the appeal bond. The pertinent rule on the matter is Article 223 of the Labor
Code, as amended, which sets forth the rules on appeal from the Labor Arbiter's
monetary award:
ART. 223.Appeal. Decisions, awards, or orders of the Labor
Arbiter are final and executory unless appealed to the
Commission by any or both parties within ten (10) calendar days
from receipt of such decisions, awards, or orders. . . . .
xxx xxx xxx
In case of a judgment involving a monetary award, an appeal by
the employer may be perfected only upon the posting of a
cash or surety bond issued by a reputable bonding company
duly accredited by the Commission in the amount equivalent to
the monetary award in the judgment appealed from. (Emphasis
ours).
Implementing the aforestated provisions of the Labor Code are the provisions of
Rule VI of the 2011 NLRC Rules of Procedure on perfection of appeals which read:
aHSAIT
SECTION 1.PERIODS OF APPEAL. Decisions, awards, or orders
of the Labor Arbiter shall be final and executory unless appealed
to the Commission by any or both parties within ten (10)
calendar days from receipt thereof; and in case of decisions or
resolutions of the Regional Director of the Department of Labor
and Employment pursuant to Article 129 of the Labor Code,
within five (5) calendar days from receipt thereof. If the 10th or

5th day, as the case may be, falls on a Saturday, Sunday or

holiday, the last day to perfect the appeal shall be the first
working day following such Saturday, Sunday or holiday.
No motion or request for extension of the period within which to
perfect an appeal shall be allowed.
SECTION 2.GROUNDS. The appeal may be entertained only on
any of the following grounds:
a)If there is prima facie evidence of abuse of discretion
on the part of the Labor Arbiter or Regional
Director;
b)If the decision, award or order was secured through
fraud or coercion, including graft and
corruption;
c)If made purely on questions of law; and/or
d)If serious errors in the findings of facts are raised
which, if not corrected, would cause grave or
irreparable damage or injury to the appellant.
SECTION 3.WHERE FILED. The appeal shall be filed with the
Regional Arbitration Branch or Regional Office where the case
was heard and decided. cACTaI
SECTION 4.REQUISITES FOR PERFECTION OF APPEAL. a) The
appeal shall be:
(1)filed within the reglementary period provided in
Section 1 of this Rule;
(2)verified by the appellant himself/herself in
accordance with Section 4, Rule 7 of the Rules
of Court, as amended;
(3)in the form of a memorandum of appeal which shall
state the grounds relied upon and the
arguments in support thereof, the relief prayed
for, and with a statement of the date the
appellant received the appealed decision,
award or order;
(4)in three (3) legibly typewritten or printed copies; and
(5)accompanied by: aEcTDI
i)proof of payment of the required
appeal fee and legal research fee;
ii)posting of a cash or surety bond

as provided in Section 6 of this Rule;

and
iii)proof of service upon the other
parties.
b)A mere notice of appeal without complying with the other
requisites aforestated shall not stop the running of the period
for perfecting an appeal.
c)The appellee may file with the Regional Arbitration Branch or
Regional Office where the appeal was filed, his/her answer or
reply to appellant's memorandum of appeal, not later than ten
(10) calendar days from receipt thereof. Failure on the part of
the appellee who was properly furnished with a copy of the
appeal to file his/her answer or reply within the said period
may be construed as a waiver on his/her part to file the same.
d)Subject to the provisions of Article 218 of the Labor Code,
once the appeal is perfected in accordance with these Rules,
the Commission shall limit itself to reviewing and deciding
only the specific issues that were elevated on appeal.
SECTION 5.APPEAL FEE. The appellant shall pay the prevailing
appeal fee and legal research fee to the Regional Arbitration
Branch or Regional Office of origin, and the official receipt of
such payment shall form part of the records of the case.
SECTION 6.BOND. In case the decision of the Labor Arbiter or
the Regional Director involves a monetary award, an appeal by
the employer may be perfected only upon the posting of a bond,
which shall either be in the form of cash deposit or surety bond
equivalent in amount to the monetary award, exclusive of
damages and attorney's fees.
In case of surety bond, the same shall be issued by a reputable
bonding company duly accredited by the Commission or the
Supreme Court, and shall be accompanied by original or certified
true copies of the following:
a)a joint declaration under oath by the employer,
his/her counsel, and the bonding company,
attesting that the bond posted is genuine, and
shall be in effect until final disposition of the
case.
b)an indemnity agreement between the employerappellant and bonding company;
c)proof of security deposit or collateral securing the
bond: provided, that a check shall not be
considered as an acceptable security;

d)a

certificate of authority
Commission;

from

the

Insurance

e)certificate of registration from the Securities and

Exchange Commission; THcaDA
f)certificate of accreditation and authority from the
Supreme Court; and
g)notarized board resolution or secretary's certificate
from the bonding company showing its
authorized signatories and their specimen
signatures.
The Commission through the Chairman may on justifiable
grounds blacklist a bonding company, notwithstanding its
accreditation by the Supreme Court.
A cash or surety bond shall be valid and effective from the date
of deposit or posting, until the case is finally decided, resolved
or terminated, or the award satisfied.
This condition shall be deemed incorporated in the terms and
conditions of the surety bond, and shall be binding on the
appellants and the bonding company. cHESAD
The appellant shall furnish the appellee with a certified true
copy of the said surety bond with all the above-mentioned
supporting documents. The appellee shall verify the regularity
and genuineness thereof and immediately report any irregularity
to the Commission.
Upon verification by the Commission that the bond is irregular or
not genuine, the Commission shall cause the immediate
dismissal of the appeal, and censure the responsible parties and
their counsels, or subject them to reasonable fine or penalty,
and the bonding company may be blacklisted.
No motion to reduce bond shall be entertained except on
meritorious grounds, and only upon the posting of a bond in a
reasonable amount in relation to the monetary award. DIESaC
The mere filing of a motion to reduce bond without complying
with the requisites in the preceding paragraphs shall not stop
the running of the period to perfect an appeal.
These statutory and regulatory provisions explicitly provide that an appeal from the
Labor Arbiter to the NLRC must be perfected within ten calendar days from
receipt of such decisions, awards or orders of the Labor Arbiter. In a
judgment involving a monetary award, the appeal shall be perfected only upon; (1)
proof of payment of the required appeal fee; (2) posting of a cash or surety
bond issued by a reputable bonding company; and (3) filing of a memorandum
of appeal. 23

No appeal was perfected by the petitioners within the 10-day period under Article
223 of the Labor Code.
The petitioners received the 7 August 2003 Decision of the Labor Arbiter on 15
September 2003, hence, they had until 25 September 2003 to perfect their appeal.
A perusal of the records reveals an apparent contrariety on the date of the posting
of the appeal bond, a material fact decisive of the instant controversy. While the
First Certification indicated that no appeal bond has been posted as of 2 October
2003, the Second Certification and the Transmittal Letter stated that a surety bond
was posted on 24 September 2003.
The Second Certificate is not a document of timeliness of petitioners' appeal bond.
It is even confirmatory of the fact of tardiness that the First Certification stated
doubtlessly.
That the posting of the surety bond requires as necessary addition the seven
enumerated documents is underscored by the provision that the appellant shall
furnish the appellee with a certified true copy of the said surety bond with all the
above-mentioned supporting documents. The appellee shall verify the regularity
and genuineness thereof and immediately report any irregularity to the
Commission.
The rule gives the appellee the authority and opportunity, even the duty, to verify
the regularity and genuineness not only of the surety bond but also of the seven
attachments. To reiterate, even if the issuance of the surety bond on 24 September
2003 is considered as the posting of the bond, the certification cannot furthermore
be considered as the posting of the other seven required documents.
Without a straight statement, the Second Certification seems to consider posting as
mailing such that the date 24 September 2003 should be the reckoning date that
determines timeliness and not the date 28 October 2003 which was the date of
receipt of the surety bond. Even such insinuation, strained and all, is unacceptable
considering the absence of proof of mailing, it being the fact that there was no
mention at all in any of the pleadings below that the surety bond was mailed.
The Court of Appeals therefore, correctly ruled that petitioners failed to perfect their
appeal on time. In holding so, the appellate court only applied the appeal bond
requirement as already well explained in our previous pronouncements that there is
legislative and administrative intent to strictly apply the appeal bond requirement,
and the Court should give utmost regard to this intention. 27 The clear intent of
both statutory and procedural law is to require the employer to post a cash or
surety bond securing the full amount of the monetary award within the ten 10-day
reglementary period. 28 Rules on perfection of an appeal, particularly in labor
cases, must be strictly construed because to extend the period of the appeal is to
delay the case, a circumstance which would give the employer a chance to wear out
the efforts and meager resources of the worker to the point that the latter is
constrained to give up for less than what is due him. 29 This is to assure the
workers that if they finally prevail in the case the monetary award will be given to
them both upon dismissal of the employer's appeal. It is further meant to
discourage employers from using the appeal to delay or evade payment of their
obligations to the employees. 30 The appeal bond requirement precisely aims to

prevent empty or inconsequential victories secured by laborers in consonance with

the protection of labor clause ensconced and zealously guarded by our Constitution.
It is entrenched in our jurisprudence that perfection of an appeal in a manner and
within the period prescribed by law is not only mandatory but jurisdictional, and
failure to perfect an appeal has the effect of making judgment final and
executory. 32 While dismissal of an appeal on technical grounds is frowned upon,
Article 223 of the Labor Code which prescribes the appeal bond requirement,
however, is a rule of jurisdiction and not of procedure. 33 Hence, there is a little
leeway for condoning a liberal interpretation thereof, and certainly none premised
on the ground that its requirements are mere technicalities. 34 It is axiomatic that
an appeal is only a statutory privilege and it may only be exercised in the manner
provided by law. 35 The timely perfection of an appeal is a mandatory requirement,
which cannot be trifled with a "mere technicality" to suit the interest of party. 36 We
cannot condone the practice of parties who, either by their own or their counsel's
inadvertence, have allowed the judgment to become final and executory and, after
the same had reached finality, seeks the shield of substantial justice to assail it.
All considered then, the finding of the Labor Arbiter holding the petitioners liable for
illegal dismissal is binding on them. Not having been timely appealed, this issue is
already beyond our jurisdiction to resolve, and the finding of the Labor Arbiter can
no longer be disturbed without violating the fundamental principle that final
judgment is immutable and unalterable and may no longer be modified in any
respect, even if the modification is meant to correct erroneous conclusion of fact
and law. 37
WHEREFORE, premises considered, the petition is DENIED. The assailed Decision
and Resolution of the Court of Appeals, reversing the NLRC Resolution and
effectively reinstating the Labor Arbiter Decision, are hereby AFFIRMED.
OLORES VS MANILA DOCTORS COLLEGE;
GR NO. 201663, March 31, 2014
Facts:
Respondent is a private higher educational institution dedicated to providing
academic degrees and certificate courses related to Allied Medical Services and
Liberal Arts and Sciences. [Petitioner] was hired as a part-time faculty of
respondent on 07 November 2005. Thereafter, he signed fixed term employment
contracts as part-time instructor. From 03 November 2008, [petitioner] signed fixed
term employment contracts, this time as a full-time instructor.
[Petitioner] submitted the final grades of his students to Mr. Jacinto Bernardo, Jr.
(Bernardo), the chair of the Humanities Area. On 13 April 2010, Bernardo charged
[petitioner] with gross misconduct and gross inefficiency in the performance
of duty. [Petitioner] was accused of employing a grading system not in accordance
with the system because he: a) added 50 pts to the final examination raw scores;
b) added 50 pts to students who have not been attending classes; c) credited only
40% instead of 60% of the final examination; d) did not credit the essay questions;
and e) added further incentives (1-4 pts) aside from 50 pts. In so doing, [petitioner]

gave grades not based solely on scholastic records.

On 14 April 2010, [petitioner] submitted his answer stating that he: a) did not add
50 pts to the raw scores as verified by the dean and academic coordinator; b)
made certain adjustments to help students pass; c) did not credit the essay
questions because these have never been discussed in the meetings with
Bernardo; and d) did have the judgment to give an incentive for a task well done.
Also on this date, [petitioner] wrote a letter to respondent's Human Resources
Manager asking that he should now be granted a permanent status.
Acting on the report of Bernardo, respondent created the Manila Doctors Tribunal
(MDT) which was tasked to ascertain the truth. The MDT sent notices of hearing to
[petitioner]. During the administrative hearing, [petitioner] stood pat on his
answer. He, however, elucidated on his points by presenting slides.
On 31 May 2010, the MDT submitted its recommendation to the president of
respondent. The culpability of [petitioner] was established, hence, dismissal was
recommended. On 07 June 2010, respondent terminated the services of
[petitioner] for grave misconduct and gross inefficiency and incompetence.
dated December 8, 2010, the Labor Arbiter found merit in petitioner's charge for
illegal dismissal. However, it dismissed petitioner's claim for regularization.
Respondent appealed from the aforesaid decision to the NLRC. However, the same
was denied in a Resolution dated February 10, 2011. The NLRC reasoned that
respondent's appeal was not accompanied by neither a cash nor surety bond, thus,
no appeal was perfected from the decision of the Labor Arbiter.
September 30, 2011, the NLRC granted respondent's appeal and reversed its earlier
resolution.
Resultantly, petitioner filed a certiorari petition with the CA. In a Resolution dated
January 9, 2012, the CA held that since petitioner failed to file a motion for
reconsideration against the NLRC decision before seeking recourse to it via a
certiorari petition, the CA dismissed petitioner's special civil action for certiorari
Issue:
(1) whether respondent's appeal with the NLRC was perfected despite its failure to
post a bond; and
(2) whether the CA erred in dismissing petitioner's Rule 65 petition.
Held:
There is merit in the petition.
At the outset, it must be emphasized that Article 223 of the Labor Code states that
an appeal by the employer to the NLRC from a judgment of a Labor Arbiter, which
involves a monetary award, may be perfected only upon the posting of a cash or
surety bond issued by a reputable bonding company duly accredited by the NLRC, in
an amount equivalent to the monetary award in the judgment appealed from.

Sections 4 (a) and 6 of Rule VI of the New Rules of Procedure of the NLRC, as
amended, reaffirm the explicit jurisdictional principle in Article 223.
SECTION 4. REQUISITES FOR PERFECTION OF APPEAL. (a) The appeal shall be:
1) filed within the reglementary period provided in Section 1 of this Rule;
2) verified by the appellant himself in accordance with Section 4, Rule 7 of the
Rules of Court, as amended;
3) in the form of a memorandum of appeal which shall state the grounds relied
upon and the arguments in support thereof, the relief prayed for, and with a
statement of the date the appellant received the appealed decision,
resolution or order;
4) in three (3) legibly type written or printed copies; and
5) accompanied by:
i) proof of payment of the required appeal fee;
ii) posting of a cash or surety bond as provided in Section 6 of
this Rule;
iii) a certificate of non-forum shopping; and iv) proof of service upon
the other parties.
SECTION 6. BOND. In case the decision of the Labor Arbiter or the
Regional Director involves a monetary award, an appeal by the employer
may be perfected only upon the posting of a bond, which shall either be in
the form of cash deposit or surety bond equivalent in the amount to the
monetary award, exclusive of damages and attorney's fees. 15
The posting of a bond is indispensable to the perfection of an appeal in cases
involving monetary awards from the decisions of the Labor Arbiter. Moreover, the
filing of the bond is not only mandatory, but a jurisdictional requirement as well,
that must be complied with in order to confer jurisdiction upon the NLRC. Noncompliance therewith renders the decision of the Labor Arbiter final and executory.
This requirement is intended to assure the workers that if they prevail in the case,
they will receive the money judgment in their favor upon the dismissal of the
employer's appeal. It is intended to discourage employers from using an appeal to
delay or evade their obligation to satisfy their employees' just and lawful claims.
Here, it is undisputed that respondent's appeal was not accompanied by any appeal
bond despite the clear monetary obligation to pay petitioner his separation pay in
the amount of P100,000.00. Since the posting of a bond for the perfection of an
appeal is both mandatory and jurisdictional, the decision of the Labor Arbiter sought
to be appealed before the NLRC had already become final and executory. Therefore,
the NLRC had no authority to entertain the appeal, much less to reverse the
decision of the Labor Arbiter.
Nevertheless, assuming that the NLRC has jurisdiction to take cognizance of the
instant case, this Court would still be inclined to favor petitioner because the instant
case falls under one of the recognized exceptions to the rule that a motion for
reconsideration is necessary prior to the filing of a certiorari petition.
The general rule is that a motion for reconsideration is indispensable
before resort to the special civil action for certiorari to afford the court or

tribunal the opportunity to correct its error, if any. The rule is well settled
that the filing of a motion for reconsideration is an indispensable condition to the
filing of a special civil action for certiorari.
However, said rule is subject to several recognized exceptions:
(a) Where the order is a patent nullity, as where the court a quo has no
jurisdiction;
(b) Where the questions raised in the certiorari proceedings have been
duly raised and passed upon by the lower court, or are the same as
those raised and passed upon in the lower court;
(c) Where there is an urgent necessity for the resolution of the question and any
further delay would prejudice the interests of the Government or of the
petitioner or the subject matter of the action is perishable;
(d) Where, under the circumstances, a motion for reconsideration would be
useless;
(e) Where petitioner was deprived of due process and there is extreme urgency
for relief;
(f) Where, in a criminal case, relief from an order of arrest is urgent and the
granting of such relief by the trial court is improbable;
(g) Where the proceedings in the lower court are a nullity for lack of due process;
(h) Where the proceeding was ex parte or in which the petitioner had no
opportunity to object; and
(i) Where the issue raised is one purely of law or where public interest is
involved. 19
In the instant case, the NLRC had all the opportunity to review its ruling and correct
itself.
The NLRC issued a ruling on February 10, 2011 in favor of petitioner dismissing
respondent's appeal on the ground that the latter failed to file an appeal bond.
However, upon a motion for reconsideration filed by respondent, the NLRC
completely reversed itself and set aside its earlier resolution dismissing the appeal.
The NLRC had more than enough opportunity to pass upon the issues raised by both
parties on appeal of the ruling of the Labor Arbiter and the subsequent motion for
reconsideration of its resolution disposing the appeal. Thus, another motion for
reconsideration would have been useless under the circumstances since the
questions raised in the certiorari proceedings have already been duly raised and
passed upon by the NLRC.
In a similar case, the Labor Arbiter rendered a decision dismissing petitioner's case
for lack of merit. On appeal, the NLRC rendered a decision reversing the decision of
the Labor Arbiter and ordered the respondent therein to pay petitioner full
backwages, separation pay, salary differentials, 13th month pay and allowances.
Not satisfied, respondent therein moved for reconsideration of the aforesaid NLRC
resolution. The NLRC, thereafter, granted respondent's motion and reversed its
previous ruling. In a like manner, the petitioner therein filed a certiorari petition

without first filing a motion for reconsideration with the NLRC.

All told, the petition is meritorious. However, since this Court is not a trier of facts,
we cannot rule on the substantive issue of the case, i.e., whether petitioner has
attained regular status, inasmuch as the CA has not yet passed upon the factual
issues raised by the parties.
WHEREFORE, premises considered, the instant petition is hereby GRANTED and
the Resolutions dated January 9, 2012 and April 27, 2012, respectively, of the Court
of Appeals in CA-G.R. SP No. 122596, are hereby REVERSED and SET ASIDE. The
case is REMANDED to the Court of Appeals for further proceedings.

BERGONIO VS SOUTH EAST ASIAN AIRLINES;

GR No. 195227,.April 21, 2014
Facts:
On April 30, 2004, the petitioners filed before the LA a complaint for illegal dismissal
and illegal suspension with prayer for reinstatement against respondents South East
Asian Airlines (SEAIR) and Irene Dornier as SEAIR's President (collectively, the
respondents).
In a decision dated May 31, 2005, the LA found the petitioners illegally dismissed
and ordered the respondents, among others, to immediately reinstate the
petitioners with full backwages. The respondents received their copy of this decision
on July 8, 2005. 6
On August 20, 2005, the petitioners filed before the LA a Motion for issuance of Writ
of Execution for their immediate reinstatement.
During the scheduled pre-execution conference held on September 14, 2005, the
respondents manifested their option to reinstate the petitioners in the payroll. The
payroll reinstatement, however, did not materialize. Thus, on September 22, 2005,
the petitioners filed before the LA a manifestation for their immediate
reinstatement.
On October 3, 2005, the respondents filed an opposition to the petitioners' motion
for execution. 7 They claimed that the relationship between them and the
petitioners had already been strained because of the petitioners' threatening text
messages, thus precluding the latter's reinstatement. IAEcCT
On October 7, 2005, the LA granted the petitioners' motion and issued a writ of
execution. 8
The respondents moved to quash the writ of execution with a prayer to hold in
abeyance the implementation of the reinstatement order. 9 They maintained that
the relationship between them and the petitioners had been so strained that
reinstatement was no longer possible.
The October 7, 2005 writ of execution was returned unsatisfied. In response, the

petitioners filed a motion for re-computation of accrued wages, and, on January 25,
2006, a motion for execution of the re-computed amount. On February 16, 2006,
the LA granted this motion and issued an alias writ of execution. 10
On February 21, 2006, the respondents issued a Memorandum 11 directing the
petitioners to report for work on February 24, 2006. The petitioners failed to
report for work on the appointed date. On February 28, 2006, the respondents
moved before the LA to suspend the order for the petitioners' reinstatement. 12
Meanwhile, the respondents appealed with the NLRC the May 31, 2005 illegal
dismissal ruling of the LA.
In an order dated August 15, 2006, 13 the NLRC dismissed the respondents' appeal
for non-perfection. The NLRC likewise denied the respondents' motion for
reconsideration in its November 29, 2006 resolution, prompting the respondents to
file before the CA a petition for certiorari.
The NLRC issued an Entry of Judgment on February 6, 2007 declaring its November
29, 2006 resolution final and executory. The petitioners forthwith filed with the LA
another motion for the issuance of a writ of execution, which the LA granted on April
24, 2007. The LA also issued another writ of execution. 14 A Notice of Garnishment
was thereafter issued to the respondents' depositary bank Metrobank-San
Lorenzo Village Branch, Makati City in the amount of P1,900,000.00 on June 6,
2007.
On December 18, 2007, the CA rendered its decision (on the illegal dismissal
ruling of the LA) partly granting the respondents' petition. The CA declared the
petitioners' dismissal valid and awarded them P30,000.00 as nominal damages for
the respondents' failure to observe due process.
The records show that the petitioners appealed the December 18, 2007 CA decision
with this Court. In a resolution dated August 4, 2008, the Court denied the petition.
The Court likewise denied the petitioners' subsequent motion for reconsideration,
and thereafter issued an Entry of Judgment certifying that its August 4, 2008
resolution had become final and executory on March 9, 2009.
On January 31, 2008, the petitioners filed with the LA an Urgent Ex-Parte Motion for
the Immediate Release of the Garnished Amount.
In its March 13, 2008 order, 15 the LA granted the petitioners' motion; it directed
Metrobank-San Lorenzo to release the P1,900,000.00 garnished amount. The LA
found valid and meritorious the respondents' claim for accrued wages in view of the
respondents' refusal to reinstate the petitioners despite the final and executory
nature of the reinstatement aspect of its (LA's) May 31, 2005 decision. The LA noted
that as of the December 18, 2007 CA decision (that reversed the illegal dismissal
findings of the LA), the petitioners' accrued wages amounted to P3,078,366.33.
In its July 16, 2008 resolution, 16 the NLRC affirmed in toto the LA's March 13,
2008 order. The NLRC afterwards denied the respondents' motion for
reconsideration for lack of merit. 17
The respondents assailed the July 16, 2008 decision and September 29, 2009

resolution of the NLRC via a petition for certiorari filed with the CA. DIETcH
The CA's ruling
The CA granted the respondents' petition. 18 It reversed and set aside the July 16,
2008 decision and the September 29, 2009 resolution of the NLRC and remanded
the case to the Computation and Examination Unit of the NLRC for the proper
computation of the petitioners' accrued wages, computed up to February 24, 2006.
The CA agreed that the reinstatement aspect of the LA's decision is immediately
executory even pending appeal, such that the employer is obliged to reinstate and
pay the wages of the dismissed employee during the period of appeal until the
decision (finding the employee illegally dismissed including the reinstatement
order) is reversed by a higher court. Applying this principle, the CA noted that the
petitioners' accrued wages could have been properly computed until December 18,
2007, the date of the CA's decision finding the petitioners validly dismissed.
The CA, however, pointed out that when the LA's decision is "reversed by a higher
tribunal, an employee may be barred from collecting the accrued wages if shown
that the delay in enforcing the reinstatement pending appeal was without fault" on
the employer's part. In this case, the CA declared that the delay in the execution of
the reinstatement order was not due to the respondents' unjustified act or omission.
Rather, the petitioners' refusal to comply with the February 21, 2006 return-to-work
Memorandum that the respondents issued and personally delivered to them (the
petitioners) prevented the enforcement of the reinstatement order.
Thus, the CA declared that, given this peculiar circumstance (of the petitioners'
failure to report for work), the petitioners' accrued wages should only be computed
until February 24, 2006 when they were supposed to report for work per the returnto-work Memorandum. Accordingly, the CA reversed, for grave abuse of discretion,
the NLRC's July 16, 2008 decision that affirmed the LA's order to release the
garnished amount.
Issues:

The petitioners argue that the CA gravely erred when it ruled, contrary to
Article 223, paragraph 3 of the Labor Code, that the computation of their
accrued wages stopped when they failed to report for work on February 24,
2006.

Additionally, the petitioners direct the Court's attention to the several

pleadings that the respondents filed to prevent the execution of the
reinstatement aspect of the LA's May 31, 2005 decision, i.e., the Opposition
to the Issuance of the Writ of Execution, the Motion to Quash the Writ of
Execution and the Motion to Suspend the Order of Reinstatement. They also
point out that in all these pleadings, the respondents claimed that strained
relationship barred their (the petitioners') reinstatement, evidently confirming
the respondents' lack of intention to reinstate them.

Finally, the petitioners point out that the February 21, 2006 Memorandum
directed them to report for work at Clark Field, Angeles, Pampanga instead of
at the NAIA-Domestic Airport in Pasay City where they had been assigned.

They argue that this directive to report for work at Clark Field violates Article
223, paragraph 3 of the Labor Code that requires the employee's
reinstatement to be under the same terms and conditions prevailing prior to
the dismissal.

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

Held:
We GRANT the petition.
Preliminary considerations: jurisdictionallimitations of the Court's Rule
45 review ofthe CA's Rule 65 decision in labor cases
In a Rule 45 petition for review on certiorari, what we review are the legal errors
that the CA may have committed in the assailed decision, in contrast with the
review for jurisdictional errors that we undertake in an original certiorari action. In
reviewing the legal correctness of the CA decision in a labor case taken under Rule
65 of the Rules of Court, we examine the CA decision in the context that it
determined the presence or the absence of grave abuse of discretion in the NLRC
decision before it and not on the basis of whether the NLRC decision, on the merits
of the case, was correct. Otherwise stated, we proceed from the premise that the
CA undertook a Rule 65 review, not a review on appeal, of the NLRC decision
challenged before it. Within this narrow scope of our Rule 45 review, the question
that we ask is: Did the CA correctly determine whether the NLRC committed grave
abuse of discretion in ruling on the case? 20
In addition, the Court's jurisdiction in a Rule 45 petition for review on certiorari is
limited to resolving only questions of law.
The present petition essentially raises the question whether the petitioners may
recover the accrued wages prior to the CA's reversal of the LA's May 31, 2005
decision. This is a question of law that falls well within the Court's power in a Rule
45 petition.
Resolution of this question of law, however, is inextricably linked with the largely
factual issue of whether the accrued wages should be computed until December 17,
2008 when the CA reversed the illegal dismissal findings of the LA or only until
February 24, 2006 when the petitioners were supposed to report for work per the
February 21, 2006 Memorandum. In either case, the determination of this factual
issue presupposes another factual issue, i.e., whether the delay in the execution of
the reinstatement order was due to the respondents' fault. As questions of fact, they
are proscribed by our Rule 45 jurisdiction; we generally cannot address these
factual issues except to the extent necessary to determine whether the CA correctly
found the NLRC in grave abuse of discretion in affirming the release of the
garnished amount despite the respondents' issuance of and the petitioners' failure
to comply with the February 21, 2006 return-to-work Memorandum.

The jurisdictional limitations of our Rule 45 review of the CA's Rule 65 decision in
labor cases, notwithstanding, we resolve this petition's factual issues for we find
legal errors in the CA's decision. Our consideration of the facts taken within this
narrow scope of our factual review power convinced us, as our subsequent
discussion will show, that no grave abuse of discretion attended the NLRC decision.
DSHTaC
Nature of the reinstatement aspect of theLA's decision on a finding of
illegaldismissal
Article 223 (now Article 229) 21 of the Labor Code governs appeals from, and the
execution of, the LA's decision. Pertinently, paragraph 3, Article 223 of the Labor
Code provides:
Article 223. APPEAL.
xxx xxx xxx
In any event, the decision of the Labor Arbiter reinstating a
dismissed
or
separated
employee,
insofar
as
the
reinstatement aspect is concerned, shall immediately be
executory, pending appeal. The employee shall either be
admitted back to work under the same terms and conditions
prevailing prior to his dismissal or separation or, at the option of
the employer, merely reinstated in the payroll. The posting of a
bond by the employer shall not stay the execution for
reinstatement provided herein. [Emphasis and underscoring
supplied]
Under paragraph 3, Article 223 of the Labor Code, the LA's order for the
reinstatement of an employee found illegally dismissed is immediately executory
even during pendency of the employer's appeal from the decision. Under this
provision, the employer must reinstate the employee either by physically
admitting him under the conditions prevailing prior to his dismissal, and paying his
wages; or, at the employer's option, merely reinstating the employee in the payroll
until the decision is reversed by the higher court. 22 Failure of the employer to
comply with the reinstatement order, by exercising the options in the alternative,
renders him liable to pay the employee's salaries. 23
Otherwise stated, a dismissed employee whose case was favorably decided by the
LA is entitled to receive wages pending appeal upon reinstatement, which
reinstatement is immediately executory. 24 Unless the appellate tribunal
issues a restraining order, the LA is duty bound to implement the order of
reinstatement and the employer has no option but to comply with it. 25
Moreover, and equally worth emphasizing, is that an order of reinstatement
issued by the LA is self-executory, i.e., the dismissed employee need not even
apply for and the LA need not even issue a writ of execution to trigger the
employer's duty to reinstate the dismissed employee. In Pioneer Texturizing Corp. v.
NLRC, et al., 26 decided in 1997, the Court clarified once and for all this selfexecutory nature of a reinstatement order. After tracing back the various Court
rulings interpreting the amendments introduced by Republic Act No. 6715 27 on the

reinstatement aspect of a labor decision under Article 223 of the Labor Code, the
Court concluded that to otherwise "require the application for and issuance of a writ
of execution as prerequisites for the execution of a reinstatement award would
certainly betray and run counter to the very object and intent of Article 223, i.e.,
the immediate execution of a reinstatement order." 28
In short, therefore, with respect to decisions reinstating employees, the law itself
has determined a sufficiently overwhelming reason for its immediate and automatic
execution even pending appeal. 29 The employer is duty-bound to reinstate the
employee, failing which, the employer is liable instead to pay the dismissed
employee's salary. The Court's consistent and prevailing treatment and
interpretation of the reinstatement order as immediately enforceable, in fact,
merely underscores the right to security of tenure of employees that the
Constitution 30 protects.
The employer is obliged to pay thedismissed employee's salary if he
refuses to reinstate until actualreinstatement or reversal by a higher
tribunal; circumstances that may bar anemployee from receiving the
accrued wages
As we amply discussed above, an employer is obliged to immediately reinstate the
employee upon the LA's finding of illegal dismissal; if the employer fails, it is liable
to pay the salary of the dismissed employee. Of course, it is not always the case
that the LA's finding of illegal dismissal is, on appeal by the employer, upheld by the
appellate court. After the LA's decision is reversed by a higher tribunal, the
employer's duty to reinstate the dismissed employee is effectively terminated. This
means that an employer is no longer obliged to keep the employee in the actual
service or in the payroll. The employee, in turn, is not required to return the wages
that he had received prior to the reversal of the LA's decision. 31
The reversal by a higher tribunal of the LA's finding (of illegal dismissal),
notwithstanding, an employer, who, despite the LA's order of reinstatement, did not
reinstate the employee during the pendency of the appeal up to the reversal by a
higher tribunal may still be held liable for the accrued wages of the employee, i.e.,
the unpaid salary accruing up to the time the higher tribunal reverses the decision.
32 The rule, therefore, is that an employee may still recover the accrued wages up
to and despite the reversal by the higher tribunal. This entitlement of the employee
to the accrued wages proceeds from the immediate and self-executory nature of the
reinstatement aspect of the LA's decision. TEHIaA
By way of exception to the above rule, an employee may be barred from collecting
the accrued wages if shown that the delay in enforcing the reinstatement pending
appeal was without fault on the part of the employer. To determine whether an
employee is thus barred, two tests must be satisfied: (1) actual delay or the fact
that the order of reinstatement pending appeal was not executed prior to its
reversal; and (2) the delay must not be due to the employer's unjustified act
or omission. Note that under the second test, the delay must be without the
employer's fault. If the delay is due to the employer's unjustified refusal, the
employer may still be required to pay the salaries notwithstanding the reversal
of the LA's decision. 33
Application of the two-fold test; thepetitioners are entitled to receive

theiraccrued salaries until December 18, 2007

As we earlier pointed out, the core issue to be resolved is whether the petitioners
may recover the accrued wages until the CA's reversal of the LA's decision. An
affirmative answer to this question will lead us to reverse the assailed CA decision
for legal errors and reinstate the NLRC's decision affirming the release of the
garnished amount. Otherwise, we uphold the CA's decision to be legally correct. To
resolve this question, we apply the two-fold test.
First, the existence of delay whether there was actual delay or whether the
order of reinstatement pending appeal was not executed prior to its reversal? We
answer this test in the affirmative.
To recall, on May 31, 2005, the LA rendered the decision finding the petitioners
illegally dismissed and ordering their immediate reinstatement. Per the records, the
respondents received copy of this decision on July 8, 2005. On August 20, 2005, the
petitioners filed before the LA a Motion for Issuance of Writ of Execution for their
immediate reinstatement. The LA issued the Writ of Execution on October 7, 2005.
From the time the respondents received copy of the LA's decision, and the issuance
of the writ of execution, until the CA reversed this decision on December 17, 2008,
the respondents had not reinstated the petitioners, either by actual reinstatement
or in the payroll. This continued non-execution of the reinstatement order in fact
moved the LA to issue an alias writ of execution on February 16, 2006 and another
writ of execution on April 24, 2007.
From these facts and without doubt, there was actual delay in the execution of the
reinstatement aspect of the LA's May 31, 2005 decision before it was reversed in
the CA's decision.
Second, the cause of the delay whether the delay was not due to the
employer's unjustified act or omission. We answer this test in the negative; we find
that the delay in the execution of the reinstatement pending appeal was due to the
respondents' unjustified acts.
In reversing, for grave abuse of discretion, the NLRC's order affirming the release of
the garnished amount, the CA relied on the fact of the issuance of the February 21,
2006 Memorandum and of the petitioners' failure to comply with its return-to-work
directive. In other words, with the issuance of this Memorandum, the CA considered
the respondents as having sufficiently complied with their obligation to reinstate the
petitioners. And, the subsequent delay in or the non-execution of the reinstatement
order was no longer the respondents' fault, but rather of the petitioners who refused
to report back to work despite the directive.
Our careful consideration of the facts and the circumstances that surrounded the
case convinced us that the delay in the reinstatement pending appeal was due to
the respondents' fault. For one, the respondents filed several pleadings to suspend
the execution of the LA's reinstatement order, i.e., the opposition to the petitioners'
motion for execution filed on October 3, 2005; the motion to quash the October 7,
2005 writ of execution with prayer to hold in abeyance the implementation of the
reinstatement order; and the motion to suspend the order for the petitioners'
reinstatement filed on February 28, 2006 after the LA issued the February 16, 2006
alias writ of execution. These pleadings, to our mind, show a determined effort on

the respondents' part to prevent or suspend the execution of the reinstatement

pending appeal. EaCSTc
Another reason is that the respondents, contrary to the CA's conclusion, did not
sufficiently notify the petitioners of their intent to actually reinstate them; neither
did the respondents give them ample opportunity to comply with the return-to-work
directive. We note that the respondents delivered the February 21, 2006
Memorandum (requiring the petitioners to report for work on February 24, 2006)
only in the afternoon of February 23, 2006. Worse, the respondents handed the
notice to only one of the petitioners Pelaez who did not act in representation of
the others. Evidently, the petitioners could not reasonably be expected to comply
with a directive that they had no or insufficient notice of.
Lastly, the petitioners continuously and actively pursued the execution of the
reinstatement aspect of the LA's decision, i.e., by filing several motions for
execution of the reinstatement order, and motion to cite the respondents in
contempt and re-computation of the accrued wages for the respondents' continued
failure to reinstate them.
These facts altogether show that the respondents were not at all sincere in
reinstating the petitioners. These facts when taken together with the fact of delay
reveal the respondents' obstinate resolve and willful disregard of the immediate
and self-executory nature of the reinstatement aspect of the LA's decision.
A further and final point that we considered in concluding that the delay was due to
the respondents' fault is the fact that per the 2005 Revised Rules of Procedure of
the NLRC (2005 NLRC Rules), 34 employers are required to submit a report of
compliance within ten (10) calendar days from receipt of the LA's decision,
noncompliance with which signifies a clear refusal to reinstate. Arguably, the 2005
NLRC Rules took effect only on January 7, 2006; hence, the respondents could not
have been reasonably expected to comply with this duty that was not yet in effect
when the LA rendered its decision (finding illegal dismissal) and issued the writ of
execution in 2005. Nevertheless, when the LA issued the February 16, 2006 alias
writ of execution and the April 24, 2007 writ of execution, the 2005 NLRC Rules was
already in place such that the respondents had become duty-bound to submit the
required compliance report; their noncompliance with this rule all the more showed
a clear and determined refusal to reinstate.
All told, under the facts and the surrounding circumstances, the delay was due to
the acts of the respondents that we find were unjustified. We reiterate and
emphasize, Article 223, paragraph 3, of the Labor Code mandates the
employer to immediately reinstate the dismissed employee, either by actually
reinstating him/her under the conditions prevailing prior to the dismissal or, at the
option of the employer, in the payroll. The respondents' failure in this case to
exercise either option rendered them liable for the petitioners' accrued salary until
the LA decision was reversed by the CA on December 17, 2008. We, therefore, find
that the NLRC, in affirming the release of the garnished amount, merely
implemented the mandate of Article 223; it simply recognized as immediate and
self-executory the reinstatement aspect of the LA's decision.
Accordingly, we reverse for legal errors the CA decision. We find no grave abuse of

discretion attended the NLRC's July 16, 2008 resolution that affirmed the March 13,
2008 decision of the LA granting the release of the garnished amount.
ARABIT VS JARDINE PACIFIC FINANCE INC.;
GR NO. 181719, April 21, 2014
Facts:
Petitioners were former regular employees of respondent Jardine Pacific Finance,
Inc. (formerly MB Finance) (Jardine). The petitioners were also officers and members
of MB Finance Employees Association-FFW Chapter (the Union), a legitimate labor
union and the sole exclusive bargaining agent of the employees of Jardine. On the
claim of financial losses, Jardine decided to reorganize and implement a redundancy
program among its employees. The petitioners were among those affected by the
redundancy program. Jardine thereafter hired contractual employees to undertake
the functions these employees used to perform.
The Union filed a notice of strike with the National Conciliation and Mediation Board
(NCMB), questioning the termination of employment of the petitioners who were
also union officers. The Union alleged unfair labor practice on the part of Jardine, as
well as discrimination in the dismissal of its officers and members.
They reached a settlement but In the settlement, the petitioners accepted their
redundancy pay without prejudice to their right to question the legality of their
dismissal with the NLRC. Jardine paid the petitioners a separation package
composed of their severance pay, plus their grossed up transportation allowance.
Issue:
WON the petitioners was illegally dismissed because of the implementation of the
redundancy program
Held:
Yes, We cannot accept Jardines shallow understanding of the concepts of
redundancy and retrenchment in determining the validity of the severance of an
employer-employee relationship. These rulings appropriately clarify that redundancy
does not need to be always triggered by a decline in the business. Primarily,
employers resort to redundancy when the functions of an employee have already
become superfluous or in excess of what the business requires. Thus, even if a
business is doing well, an employer can still validly dismiss an employee from the
service due to redundancy if that employees position has already become in excess
of what the employers enterprise requires.
From this perspective, it is illogical for Jardine to terminate the petitioners
employment and replace them with contractual employees. The replacement
effectively belies Jardines claim that the petitioners positions were abolished due
to superfluity. Redundancy could have been justified if the functions of the
petitioners were transferred to other existing employees of the company. To dismiss

the petitioners and hire new contractual employees as replacements necessarily

give rise to the sound conclusion that the petitioners services have not really
become in excess of what Jardines business requires.
Guidelines in implementing redundancy
this Court laid down the principle that the employer must use fair and reasonable
criteria in the selection of employees who will be dismissed from employment due
to redundancy. Such fair and reasonable criteria may include the following, but are
not limited to: (a) less preferred status (e.g. temporary employee); (b)
efficiency; and (c) seniority. The presence of these criteria used by the employer
shows good faith on its part and is evidence that the implementation of redundancy
was painstakingly done by the employer in order to properly justify the termination
from the service of its employees (Golden Thread Knitting Industries vs NLRC).
For the implementation of a redundancy program to be valid, the employer must
comply with the following requisites: (1) written notice served on both the
employees and the Department of Labor and Employment at least one
month prior to the intended date of retrenchment; (2) payment of
separation pay equivalent to at least one month pay or at least one month
pay for every year of service, whichever is higher; (3) good faith in
abolishing the redundant positions; and (4) fair and reasonable criteria in
ascertaining what positions are to be declared redundant and accordingly
abolished (Asian Alcohol vs NLRC).
The first level, based on Asian Alcohol, is broader as the case recognized
distinctions on a per position basis. At this level, Jardine failed to explain why among
all of the existing positions in its organization, Jardine chose the petitioners posts as
the ones which have already become redundant and terminable.1wphi1
The second level, derived from Golden Thread, is more specific. Here the distinction
narrows down to the particular employees occupying the same positions which were
already declared to be redundant. At this level, Jardines lapse is shown by its failure
to explain why among all of its employees whose positions were determined to be
redundant, the petitioners were the ones selected to be dismissed from the service.
MIRANT VS CARO;
GR NO. 181490, April 23, 2014
Facts:
Respondent was hired by Mirant Pagbilao on January 3, 1994 as its Logistics Officer.
In 2002, when Southern Company was sold to Mirant, respondent was already a
Supervisor of the Logistics and Purchasing Department of petitioner. At the time of
the severance of his employment, respondent was the Procurement Supervisor of
Mirant Pagbilao assigned at petitioner corporations corporate office. As
Procurement Supervisor, his main task was to serve as the link between the
Materials Management Department of petitioner corporation and its staff, and the
suppliers and service contractors in order to ensure that procurement is carried out
in conformity with set policies, procedures and practices. In addition, respondent

was put incharge of ensuring the timely, economical, safe and expeditious delivery
of materials at the right quality and quantity to petitioner corporations plant.
Respondent was also responsible for guiding and overseeing the welfare and
training needs of the staff of the Materials Management Department. Due to the
nature of respondents functions, petitioner corporation considers his position as
confidential. On November 3, 2004, petitioner corporation conducted a random
drug test where respondent was randomly chosen among its employees who would
be tested for illegal drug use. Through an Intracompany Correspondence, 12 these
employees were informed that they were selected for random drug testing to be
conducted on the same day that they received the correspondence. Respondent
was duly notified that he was scheduled to be tested after lunch on that day. His
receipt of the notice was evidenced by his signature on the correspondence.
There was phone call from his wife. She said there was a bombing incident near her
workplace in Tel Aviv. So he acted on and told the secretary of his department that
respondent that he will give preferential attention to the emergency phone call that
he just received. He also told Torres that he would be back at the office as soon as
he has resolved his predicament.
On that same day, at around 6:15 p.m., respondent returned to petitioner
corporations office. When he was finally able to charge his cellphone at the office,
he received a text message from Tina Cecilia (Cecilia), a member of the Drug Watch
Committee that conducted the drug test, informing him to participate in the said
drug test. He immediately called up Cecilia to explain the reasons for his failure to
submit himself to the random drug test that day. He also proposed that he would
submit to a drug test the following day at his own expense. Respondent never heard
from Cecilia again.
On November 8, 2004, respondent received a Show Cause Notice 15 from petitioner
corporation through Jaime Dulot (Dulot), his immediate supervisor, requiring him to
explain in writing why he should not be charged with "unjustified refusal to submit
to random drug testing." Respondent submitted his written explanation 16 on
November 11, 2004. Petitioner corporation further required respondent on
December 14, 2004 to submit additional pieces of supporting documents.
He was found guilty by the petitioners corporation Investigating panel of
unjustified refusal of to submit random drug testing. and recommended a penalty
of four working weeks suspension without pay, instead of termination, due to the
presence of mitigating circumstances. petitioner corporations Asst. Vice President
for Material Management Department, George K. Lamela, Jr. (Lamela),
recommended19 that respondent be terminated from employment instead of merely
being suspended.
Issue:
WON respondent was validly terminated for his failure to take the mandatory drug
test
Held:

No, We agree with the disposition of the appellate court that there was illegal
dismissal in the case at bar. While the adoption and enforcement by petitioner
corporation of its Anti-Drugs Policy is recognized as a valid exercise of its
management prerogative as an employer, such exercise is not absolute and
unbridled. Managerial prerogatives are subject to limitations provided by law,
collective bargaining agreements, and the general principles of fair play and justice.
Petitioner corporations subject Anti-Drugs Policy fell short of being fair and
reasonable:
First. The policy was not clear on what constitutes "unjustified refusal" when the
subject drug policy prescribed that an employees "unjustified refusal" to submit to
a random drug test shall be punishable by the penalty of termination for the first
offense. To be sure, the term "unjustified refusal" could not possibly cover all forms
of "refusal" as the employees resistance. The fact that petitioner corporations own
personnel had to dissect the intended meaning of "unjustified refusal" is further
proof that it is not clear on what context the term "unjustified refusal" applies to.
Second. The penalty of termination imposed by petitioner corporation upon
respondent fell short of being reasonable. Company policies and regulations are
generally valid and binding between the employer and the employee unless shown
to be grossly oppressive or contrary to law 50 as in the case at bar. Recognizing the
ambiguity in the subject policy, the CA was more inclined to adopt the
recommendation of petitioner corporations own Investigating Panel over that of
Sliman and the NLRC. Thus, We find that the recommended four (4) working weeks
suspension without pay as the reasonable penalty to be imposed on [respondent]
for his disobedience but not the illegal termination of work.