G.R. No.

142351 November 22, 2006

ST. MARTIN FUNERAL HOMES, Petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION , AND BIENVENIDO ARICAYOS, Respondents.

DECISION

VELASCO, JR., J.:

This is a Petition for Review1 on Certiorari under Rule 45 of the 1997 Revised Rules of Civil Procedure,
seeking to reverse and set aside the September 30, 1999 Decision2 of the Court of Appeals (CA) in CA-
G.R. SP No. 49183, which affirmed the June 13, 1997 Resolution of the National Labor Relations
Commission (NLRC) in NLRC Case No. 012311-97 remanding the complaint of respondent Aricayos to the
Labor Arbiter for further proceedings, and the February 11, 2000 Resolution3 of the Court of Appeals,
denying petitioner's Motion for Reconsideration.4

The instant petition originated from a complaint for illegal dismissal with prayer for reinstatement,
payment of back wages, and damages filed by private respondent Aricayos against petitioner. The
initiatory pleading was filed before the NLRC Regional Arbitration Branch (RAB) No. III in San Fernando,
Pampanga and docketed as RAB III-05-7022-96.

The facts culled from the records are:

The owner of petitioner St. Martin Funeral Homes, Inc. (St. Martin) is Amelita Malabed. Prior to January
1996, Amelitas mother managed the funeral parlor; respondent Aricayos, on the other hand, was
formerly an overseas contract worker. Sometime in 1995, Aricayos was granted financial assistance by
Amelitas mother. As a sign of appreciation, respondent extended assistance to Amelitas mother in
managing St. Martin without compensation. There was no written employment contract between
Amelitas mother and respondent Aricayos; furthermore, respondent Aricayos was not even listed as an
employee in the Companys payroll.

When Amelitas mother died in January 1996, Amelita took over as manager of St. Martin. Much to her
chagrin, she found out that St. Martin had arrearages in the payment of BIR taxes and other fees owing
to the government, but company records tended to show that payments were made thereon. As a
result, Amelita removed the authority from respondent Aricayos and his wife from taking part in
managing St. Martins operations.

Aggrieved, respondent Aricayos accused St. Martin of his illegal dismissal as Operations Manager of the
company. He believed that the cause of his termination was Amelitas suspicion that he pocketed PhP
38,000.00 which was set aside for payment to the BIR of St. Martins valued added taxes.

On October 25, 1996, the Labor Arbiter rendered a Decision, in favor of petitioner declaring that his
office had no jurisdiction over the case, in this wise:

We rule in favor of the respondent since this office has no jurisdiction over the instant complaint,
because as held in Dela Salle University vs. NLRC, 135 SCR 674, 677 (1988) where the existence of an
employer-employee relationship is disputed and not assumed, as in these cases, the determination of
that question should be handled by the regular courts after full dress trial and not by the Labor Arbiter.
The Supreme Court ruled:

We hold that the Labor Arbiter and the NLRC have no jurisdiction over the case. It was properly brought
to the Civil Court. The issue was the existence of the employer-employee relationship between Lao and
the University. Under Article 265 (5) The existence of employer-employee relations is assumed not
disputed.

In this case, it is necessary to determine whether Lao became a permanent employee after she was
hired as a probationary employee. The determination of the question could be more competently
handled by the court after a full dress trial and not by the Labor Arbiter by means of position paper
procedure followed by him.5

Aggrieved, respondent Aricayos appealed the Labor Arbiters adverse ruling to the NLRC. On June 13,
1997, the NLRC issued a Resolution annulling the Arbiters Decision and remanded the case to him for
appropriate proceedings, to determine the factual issue of the existence of employer-employee
relationship between the parties, ratiocinating this way:

Considering the diametrically opposing contentions of the parties herein on the issue of employer-
employee relationship, it was imperative on the Labor Arbiter to have threshed out the issue in further
appropriate proceedings. The Labor Arbiter is so authorized under our Rules when the facts are not too
clear. As it is, the conclusions herein are not well substantiated.

Indeed, the ends of justice would better be served if both parties are given further opportunity to
ventilate their respective positions on issues at hand.6

When its motion for reconsideration was rejected by the NLRC, petitioner filed a petition for certiorari
under Rule 65 before this Court, docketed as G.R. No. 130866.

On September 16, 1998, this Court through Justice Jose Vitug, rendered the landmark Decision in this
case then docketed as G.R. No. 130866, holding for the first time that all petitions for certiorari under
Rule 65 assailing the decisions of the NLRC should henceforth be filed with the CA, thus:

Therefore, all references in the amended section 9 of B.P. No. 129 to supposed appeals from the NLRC
to the Supreme Court are interpreted and refer to petitions for certiorari under Rule 65. Consequently,
all such petitions should henceforth be initially filed in the Court of Appeals in strict observance of the
doctrine on the hierarchy of courts as the appropriate forum for the relief desired.

Thus, the petition was remanded to the CA and redocketed as CA-G.R. SP No. 49183.

Subsequently, the CA rendered the assailed September 30, 1999 Decision, dismissing petitioners appeal
for lack of merit with the finding that respondent NLRC did not commit grave abuse of discretion, in its
pronouncement that the Labor Arbiter did not make any finding on the alleged employer-employee
relationship between the parties, reasoning this way:

Actually the Labor Arbiter did not determine whether there is an employer-employee relation between
the parties because according to him, such issue should be resolved by the regular court pursuant to the
ruling of the Supreme Court in De la Salle University vs. NLRC (135 SCRA 674, 677 (1988)).

For its part, respondent NLRC, is remanding the case to the Labor Arbiter, reminded the latter that he is
authorized by the NLRC Rules to determine, in an appropriate proceeding the existence of an employer-
employee relationship.7

In its February 11, 2000 Resolution, petitioners Motion for Reconsideration was likewise denied. Thus,
the instant petition.

Petitioner insists that, contrary to the findings of the NLRC as affirmed by the CA, the Labor Arbiter
actually concluded that there was no employer-employee relationship between the parties considering
the memoranda, position papers, and the documentary evidence presented in support of their
respective positions. St. Martin asserts that the Labor Arbiter already undertook the "appropriate
proceeding" referred to by the NLRC and the CA and therefore, the NLRC and the CA decided the case
contrary to the evidence presented, the applicable laws, and jurisprudence.

The petition must fail.

The main issue is whether the Labor Arbiter made a determination of the presence of an employer-
employee relationship between St. Martin and respondent Aricayos based on the evidence on record.
Petitioner St. Martin contends that the Labor Arbiter indeed made a finding of the non-existence of any
relationship between respondent Aricayos and the company based on the position papers and
memoranda of the parties. In addition, petitioner claims several affidavits of its employees were
attached to its position paper whereby they attested under oath that respondent Aricayos was never an
employee of St. Martin. It concludes that the Arbiter made the determination of the absence of an
employer-employee relationship only after considering the documentary evidence on record and hence,
substantial evidence supports such finding.

On the other hand, respondent Aricayos supports the pronouncement of the NLRC as affirmed by the CA
that there was no determination whether he was an employee of St. Martin and the main basis for the
dismissal of his complaint was the reliance of the Labor Arbiter on the cited case of De La Salle
University v. NLRC that it should be the regular court which should make such finding.

We rule for respondent Aricayos.

At the outset, it is clear that the issue submitted for resolution is a question of fact which is proscribed
by the rule disallowing factual issues in appeal by certiorari to the Supreme Court under Rule 45. This is
explicit in Rule 45, Section 1 that petitions of this nature "shall raise only questions of law which must be
distinctly set forth." Petitioner St. Martin would like the Court to examine the pleadings and
documentary evidence extant on the records of the Labor Arbiter to determine if said official indeed
made a finding on the existence of the alleged employer-employee nexus between the parties based on
the facts contained in said pleadings and evidence. Evidently this issue is embraced by the
circumscription.

Even if we would like to relax the rule and allow the examination of the documentary evidence as an
exception to the general rule, we are precluded by the abject failure of petitioner to attach to the
petition important and material portions of the records as would support the petition prescribed by Rule
45, Section 4. St. Martin asks us to find out if the Labor Arbiter was correct in concluding that
respondent Aricayos was not in its employ; but committed the blunder of not attaching to the petition
even the Decision of the Labor Arbiter sought to be reviewed, the NLRC Decision, the position papers
and memoranda of the parties filed with the Labor Arbiter, the affidavits of petitioners employees, and
other pieces of evidence that we can consider in resolving the factual issue on employment. Without
these vital documents, petitioner cannot be given the relief prayed for.

Even with the inadequate information and few documents on hand, one thing is clearthat the Labor
Arbiter did not set the labor case for hearing to be able to determine the veracity of the conflicting
positions of the parties. On this point alone, a remand is needed.

We held in a catena of cases that while a formal trial or hearing is discretionary on the part of the Labor
Arbiter, when there are factual issues that require a formal presentation of evidence in a hearing, the
Labor Arbiter cannot simply rely on the position papers, more so, on mere unsubstantiated claims of
parties.1wphi1

In Batongbacal v. Associated Bank, we remanded the case for further proceedings as "equity and justice
demand that not only the factual issue of whether or not an assistant vice-president is a managerial
employee, but also whether petitioner is entitled to an award of moral and exemplary damages, should
be considered."8 In Greenhills Airconditioning and Services, Inc. v. NLRC,9 we also put to task the Labor
Arbiter for issuing an order submitting the case for decision without conducting a hearing. As such, the
Labor Arbiters Decision was rendered merely upon his reliance on the bare allegations of the parties in
their position papers. While the parties submitted documentary evidence in Progress Homes v. NLRC10 it
was clear that a hearing was still required in order to ventilate the factual issues.1wphi1

In the case at bar, there are certain admissions by petitioner St. Martin that should have prodded the
Labor Arbiter to conduct a hearing for a more in-depth examination of the contrasting positions of the
parties, namely; that respondent helped Amelitas mother manage the funeral parlor business by
running errands for her,11 overseeing the business from 1995 up to January 1996 when the mother died,
and that after Amelita made changes in the business operation, private respondent and his wife were no
longer allowed to participate in the management of St. Martin.12 These facts, as admitted by the
petitioner and the affidavits of St. Martins witnesses, could have been examined more in detail by the
Labor Arbiter in a hearing to convince himself that there was indeed no employment relationship
between the parties as he originally found.

In the light of these premises, we find no reason to disturb the assailed judgment of the CA.

WHEREFORE, the instant petition is DENIED for lack of merit, and the September 30, 1999 Decision and
the February 11, 2000 Resolution of the Court of Appeals in CA-G.R. SP No. 49183 are
hereby AFFIRMED IN TOTO.Costs against petitioner.

SO ORDERED.
[ GR No. 202961, Feb 04, 2015 ]

EMER MILAN v. NLRC +

LEONEN, J.:

An employer is allowed to withhold terminal pay and benefits pending the employee's return of its
properties.

Petitioners are respondent Solid Mills, Inc.'s (Solid Mills) employees.[1] They are represented by the
National Federation of Labor Unions (NAFLU), their collective bargaining agent.[2]

As Solid Mills' employees, petitioners and their families were allowed to occupy SMI Village, a property
owned by Solid Mills.[3] According to Solid Mills, this was "[o]ut of liberality and for the convenience of
its employees . . . [and] on the condition that the employees . . . would vacate the premises anytime the
Company deems fit."[4]

In September 2003, petitioners were informed that effective October 10, 2003, Solid Mills would cease
its operations due to serious business losses.[5] NAFLU recognized Solid Mills' closure due to serious
business losses in the memorandum of agreement dated September 1, 2003.[6] The memorandum of
agreement provided for Solid Mills' grant of separation pay less accountabilities, accrued sick leave
benefits, vacation leave benefits, and 13th month pay to the employees.[7] Pertinent portions of the
agreement provide:

WHEREAS, the COMPANY has incurred substantial financial losses and is currently experiencing further
severe financial losses;

WHEREAS, in view of such irreversible financial losses, the COMPANY will cease its operations on
October 10, 2003;

WHEREAS, all employees of the COMPANY on account of irreversible financial losses, will be dismissed
from employment effective October 10, 2003;

In view thereof, the parties agree as follows:

1. That UNION acknowledges that the COMPANY is experiencing severe financial losses and as a
consequence of which, management is constrained to cease the company's operations.

2. The UNION acknowledges that under Article 283 of the Labor Code, separation pay is granted to
employees who are dismissed due to closures or cessation of operations NOT DUE to serious
business losses.

3. The UNION acknowledges that in view of the serious business losses the Company has been
experiencing as seen in their audited financial statements, employees ARE NOT granted
separation benefits under the law.

4. The COMPANY, by way of goodwill and in the spirit of generosity agrees to grant financial
assistance less accountabilities to members of the Union based on length of service to be
computed as follows: (Italics in this paragraph supplied)

Number of days - 12.625 for every year of service

5. In view of the above, the members of the UNION will receive such financial assistance on an
equal monthly installments basis based on the following schedule:

First Check due on January 5, 2004 and every 5th of the month thereafter until December 5,
 2004.

6. The COMPANY commits to pay any accrued benefits the Union members are entitled to,
specifically those arising from sick and vacation leave benefits and 13th month pay, less
accountabilities based on the following schedule:

One Time Cash Payment to be distributed anywhere from. . . .

....

7. The foregoing agreement is entered into with full knowledge by the parties of their rights under
the law and they hereby bind themselves not to conduct any concerted action of whatsoever
kind, otherwise the grant of financial assistance as discussed above will be withheld.[8] (Emphasis
in the original)

Solid Mills filed its Department of Labor and Employment termination report on September 2, 2003.[9]

Later, Solid Mills, through Alfredo Jingco, sent to petitioners individual notices to vacate SMI Village.[10]

Petitioners were no longer allowed to report for work by October 10, 2003.[11] They were required to
sign a memorandum of agreement with release and quitclaim before their vacation and sick leave
benefits, 13th month pay, and separation pay would be released.[12] Employees who signed the
memorandum of agreement were considered to have agreed to vacate SMI Village, and to the
demolition of the constructed houses inside as condition for the release of their termination benefits
and separation pay.[13] Petitioners refused to sign the documents and demanded to be paid their
benefits and separation pay.[14]

Hence, petitioners filed complaints before the Labor Arbiter for alleged non-payment of separation pay,
accrued sick and vacation leaves, and 13th month pay.[15] They argued that their accrued benefits and
separation pay should not be withheld because their payment is based on company policy and
practice.[16] Moreover, the 13th month pay is based on law, specifically, Presidential Decree No.
851.[17] Their possession of Solid Mills property is not an accountability that is subject to clearance
procedures.[18] They had already turned over to Solid Mills their uniforms and equipment when Solid
Mills ceased operations.[19]

On the other hand, Solid Mills argued that petitioners' complaint was premature because they had not
vacated its property.[20]

The Labor Arbiter ruled in favor of petitioners.[21] According to the Labor Arbiter, Solid Mills illegally
withheld petitioners' benefits and separation pay.[22] Petitioners' right to the payment of their benefits
and separation pay was vested by law and contract.[23] The memorandum of agreement dated
September 1, 2003 stated no condition to the effect that petitioners must vacate Solid Mills' property
before their benefits could be given to them.[24] Petitioners' possession should not be construed as
petitioners' "accountabilities" that must be cleared first before the release of benefits.[25] Their
possession "is not by virtue of any employer-employee relationship."[26] It is a civil issue, which is
outside the jurisdiction of the Labor Arbiter.[27]

The dispositive portion of the Labor Arbiter's decision reads:

WHEREFORE, premises considered, judgment is entered ORDERING respondents SOLID MILLS,

INC. and/or PHILIP ANG(President), in solido to pay the remaining 21 complainants:

1) 19 of which, namely EMER MILAN, RAMON MASANGKAY, ALFREDO JAVIER, RONALDO DAVID,
BONIFACIO MATUNDAN, NORA MENDOZA, MYRNA IGCAS, RAUL DE LAS ALAS, RENATO ESTOLANO, REX
S. DIMAFELIX, MAURA MILAN, JESSICA BAYBAYON, ALFREDO MENDOZA, ROBERTO IGCAS, ISMAEL
MATA, CARLITO DAMIAN, TEODORA MAHILOM, MARILOU LINGA, RENATO LINGA their separation pay of
12.625 days' pay per year of service, pro-rated 13th month pay for 2003 and accrued vacation and sick
leaves, plus 12% interest p.a. from date of filing of the lead case/judicial demand on 12/08/03 until
actual payment and/or finality;

2) the remaining 2 of which, complainants CLEOPATRA ZACARIAS, as she already received on 12/19/03
her accrued 13th month pay for 2003, accrued VL/SL total amount of P15,435.16, likewise, complainant
Jerry L. Sesma as he already received his accrued 13th month pay for 2003, SL/VL in the total amount of
P10,974.97, shall be paid only their separation pay of 12.625 days' pay per year of service but also with
12% interest p.a. from date of filing of the lead case/judicial demand on 12/08/03 until actual payment
and/or finality, which computation as of date, amount to as shown in the attached computation sheet.

3) Nine (9) individual complaints viz., of Maria Agojo, Joey Suarez, Ronaldo Vergara, Ronnie Vergara,
Antonio R. Dulo, Sr., Bryan D. Durano, Silverio P. Durano, Sr., Elizabeth Duarte and Purificacion
Malabanan are DISMISSED WITH PREJUDICE due to amicable settlement, whereas, that of [RONIE
ARANAS], [EMILITO NAVARRO], [NONILON PASCO], [GENOVEVA PASCO], [OLIMPIO A. PASCO]
are DISMISSED WITHOUT PREJUDICE, for lack of interest and/or failure to prosecute.

The Computation and Examination unit is directed to cause the computation of the award in Pars. 2 and
3 above.[28] (Emphasis in the original)

Solid Mills appealed to the National Labor Relations Commission.[29] It prayed for, among others, the
dismissal of the complaints against it and the reversal of the Labor Arbiter's decision.[30]

The National Labor Relations Commission affirmed paragraph 3 of the Labor Arbiter's dispositive
portion, but reversed paragraphs 1 and 2. Thus:

WHEREFORE, the Decision of Labor Arbiter Renaldo O. Hernandez dated 10/17/05 is AFFIRMED in so far
as par. 3 thereof is concerned but modified in that paragraphs 1 and 2 thereof are REVERSED and SET
ASIDE. Accordingly, the following complainants, namely: Emir Milan, Ramon Masangkay, Alfredo Javier,
Ronaldo David, Bonifacio Matundan, Nora Mendoza, Myrna Igcas, Raul De Las Alas, Renato Estolano,
Rex S. Dimaf[e]lix, Maura Milan, Jessica Baybayon, Alfredo Mendoza, Roberto Igcas, Cleopatra Zacarias
and Jerry L. Sesma's monetary claims in the form of separation pay, accrued 13th month pay for 2003,
accrued vacation and sick leave pays are held in abeyance pending compliance of their accountabilities
to respondent company by turning over the subject lots they respectively occupy at SMI Village Sucat
Muntinlupa City, Metro Manila to herein respondent company.[31]

The National Labor Relations Commission noted that complainants Marilou Linga, Renato Linga, Ismael
Mata, and Carlito Damian were already paid their respective separation pays and
benefits.[32] Meanwhile, Teodora Mahilom already retired long before Solid Mills' closure.[33] She was
already given her retirement benefits.[34]

The National Labor Relations Commission ruled that because of petitioners' failure to vacate Solid Mills'
property, Solid Mills was justified in withholding their benefits and separation pay.[35] Solid Mills granted
the petitioners the privilege to occupy its property on account of petitioners' employment.[36] It had the
prerogative to terminate such privilege.[37] The termination of Solid Mills and petitioners' employer-
employee relationship made it incumbent upon petitioners to turn over the property to Solid Mills.[38]

Petitioners filed a motion for partial reconsideration on October 18, 2010,[39] but this was denied in the
November 30, 2010 resolution.[40]

Petitioners, thus, filed a petition for certiorari[41] before the Court of Appeals to assail the National Labor
Relations Commission decision of August 31, 2010 and resolution of November 30, 2010.[42]

On January 31, 2012, the Court of Appeals issued a decision dismissing petitioners' petition,[43] thus:

WHEREFORE, the petition is hereby ordered DISMISSED.[44]

The Court of Appeals ruled that Solid Mills' act of allowing its employees to make temporary dwellings in
its property was a liberality on its part. It may be revoked any time at its discretion.[45] As a
consequence of Solid Mills' closure and the resulting termination of petitioners, the employer-employee
relationship between them ceased to exist. There was no more reason for them to stay in Solid Mills'
property.[46] Moreover, the memorandum of agreement between Solid Mills and the union representing
petitioners provided that Solid Mills' payment of employees' benefits should be "less
accountabilities."[47]

On petitioners' claim that there was no evidence that Teodora Mahilom already received her retirement
pay, the Court of Appeals ruled that her complaint filed before the Labor Arbiter did not include a claim
for retirement pay. The issue was also raised for the first time on appeal, which is not allowed.[48] In any
case, she already retired before Solid Mills ceased its operations.[49]

The Court of Appeals agreed with the National Labor Relations Commission's deletion of interest since it
found that Solid Mills' act of withholding payment of benefits and separation pay was
proper. Petitioners' terminal benefits and pay were withheld because of petitioners' failure to vacate
Solid Mills' property.[50]

Finally, the Court of Appeals noted that Carlito Damian already received his separation pay and
benefits.[51] Hence, he should no longer be awarded these claims.[52]

In the resolution promulgated on July 16, 2012, the Court of Appeals denied petitioners' motion for
reconsideration.[53]

Petitioners raise in this petition the following errors:

WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE ERROR WHEN IT
RULED THAT PAYMENT OF THE MONETARY CLAIMS OF PETITIONERS SHOULD BE HELD IN ABEYANCE
PENDING COMPLIANCE OF THEIR ACCOUNTABILITIES TO RESPONDENT SOLID MILLS BY TURNING OVER
THE SUBJECT LOTS THEY RESPECTIVELY OCCUPY AT SMI VILLAGE, SUCAT, MUNTINLUPA CITY.

II

WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE ERROR WHEN IT
UPHELD THE RULING OF THE NLRC DELETING THE INTEREST OF 12% PER ANNUM IMPOSED BY THE
HONORABLE LABOR ARBITER HERNANDEZ ON THE AMOUNT DUE FROM THE DATE OF FILING OF THE
LEAD CASE/JUDICIAL DEMAND ON DECEMBER 8, 2003 UNTIL ACTUAL PAYMENT AND/OR FINALITY.

III

WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE ERROR WHEN IT
UPHELD THE RULING OF THE NLRC DENYING THE CLAIM OF TEODORA MAHILOM FOR PAYMENT OF
RETIREMENT BENEFITS DESPITE LACK OF ANY EVIDENCE THAT SHE RECEIVED THE SAME.

IV

WHETHER OR NOT PETITIONER CARLITO DAMIAN IS ENTITLED TO HIS MONETARY BENEFITS FROM
RESPONDENT SOLID MILLS.[54]

Petitioners argue that respondent Solid Mills and NAFLU's memorandum of agreement has no provision
stating that benefits shall be paid only upon return of the possession of respondent Solid Mills'
property.[55] It only provides that the benefits shall be "less accountabilities," which should not be
interpreted to include such possession.[56] The fact that majority of NAFLU's members were not
occupants of respondent Solid Mills' property is evidence that possession of the property was not
contemplated in the agreement.[57] "Accountabilities" should be interpreted to refer only to
accountabilities that were incurred by petitioners while they were performing their duties as employees
at the worksite.[58] Moreover, applicable laws, company practice, or policies do not provide that 13th
month pay, and sick and vacation leave pay benefits, may be withheld pending satisfaction of liabilities
by the employee.[59]

Petitioners also point out that the National Labor Relations Commission and the Court of Appeals have
no jurisdiction to declare that petitioners' act of withholding possession of respondent Solid Mills'
property is illegal.[60] The regular courts have jurisdiction over this issue.[61] It is independent from the
issue of payment of petitioners' monetary benefits.[62]

For these reasons, and because, according to petitioners, the amount of monetary award is no longer in
question, petitioners are entitled to 12% interest per annum.[63]

Petitioners also argue that Teodora Mahilom and Carlito Damian are entitled to their claims. They insist
that Teodora Mahilom did not receive her retirement benefits and that Carlito Damian did not receive
his separation benefits.[64]

Respondents Solid Mills and Philip Ang, in their joint comment, argue that petitioners' failure to turn
over respondent Solid Mills' property "constituted an unsatisfied accountability" for which reason
"petitioners' benefits could rightfully be withheld."[65] The term "accountability" should be given its
natural and ordinary meaning.[66] Thus, it should be interpreted as "a state of being liable or
responsible," or "obligation."[67] Petitioners' differentiation between accountabilities incurred while
performing jobs at the worksite and accountabilities incurred outside the worksite is baseless because
the agreement with NAFLU merely stated "accountabilities," without qualification.[68]

On the removal of the award of 12% interest per annum, respondents argue that such removal was
proper since respondent Solid Mills was justified in withholding the monetary claims.[69]

Respondents argue that Teodora Mahilom had no more cause of action for retirement benefits
claim.[70] She had already retired more than a decade before Solid Mills' closure. She also already
received her retirement benefits in 1991.[71] Teodora Mahilom's claim was also not included in the
complaint filed before the Labor Arbiter. It was improper to raise this claim for the first time on
appeal. In any case, Teodora Mahilom's claim was asserted long after the three-year prescriptive period
provided in Article 291 of the Labor Code.[72]

Lastly, according to respondents, it would be unjust if Carlito Damian would be allowed to receive
monetary benefits again, which he, admittedly, already received from Solid Mills.[73]

The National Labor Relations

Commission may preliminarily
determine issues related to rights
arising from an employer-employee
relationship

The National Labor Relations Commission has jurisdiction to determine, preliminarily, the parties' rights
over a property, when it is necessary to determine an issue related to rights or claims arising from an
employer-employee relationship.

Article 217 provides that the Labor Arbiter, in his or her original jurisdiction, and the National Labor
Relations Commission, in its appellate jurisdiction, may determine issues involving claims arising from
employer-employee relations. Thus:

ART. 217. JURISDICTION OF LABOR ARBITERS AND THE COMMISSION. (1) Except as otherwise provided
under this Code, the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide
within thirty (30) calendar days after the submission of the case by the parties for decision without
extension, even in the absence of stenographic notes, the following cases involving workers, whether
agricultural or non-agricultural:

1. Unfair labor practice cases;

2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that workers may file involving
wages, rates of pay, hours of work and other terms and conditions of employment;
4. Claims for actual, moral, exemplary and other forms of damages arising from the employer-
employee relations;
5. Cases arising from any violation of Article 264 of this Code, including questions involving the
legality of strikes and lockouts; and
6. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all
other claims, arising from employer-employee relations including those of persons in domestic or
household service, involving an amount exceeding five thousand pesos (P5,000.00), regardless of
whether accompanied with a claim for reinstatement.

(2) The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters.
(Emphasis supplied)

Petitioners' claim that they have the right to the immediate release of their benefits as employees
separated from respondent Solid Mills is a question arising from the employer-employee relationship
between the parties.

Claims arising from an employer-employee relationship are not limited to claims by an

employee. Employers may also have claims against the employee, which arise from the same
relationship.

In Baez v. Valdevilla,[74] this court ruled that Article 217 of the Labor Code also applies to employers'
claim for damages, which arises from or is connected with the labor issue. Thus:

Whereas this Court in a number of occasions had applied the jurisdictional provisions of Article 217 to
claims for damages filed by employees, we hold that by the designating clause "arising from the
employer-employee relations" Article 217 should apply with equal force to the claim of an employer for
actual damages against its dismissed employee, where the basis for the claim arises from or is
necessarily connected with the fact of termination, and should be entered as a counterclaim in the
illegal dismissal case.[75]

Baez was cited in Domondon v. National Labor Relations Commission.[76] One of the issues in
Domondon is whether the Labor Arbiter has jurisdiction to decide an issue on the transfer of ownership
of a vehicle assigned to the employee. It was argued that only regular courts have jurisdiction to decide
the issue.[77]

This court ruled that since the transfer of ownership of the vehicle to the employee was connected to
his separation from the employer and arose from the employer-employee relationship of the parties,
the employer's claim fell within the Labor Arbiter's jurisdiction.[78]

As a general rule, therefore, a claim only needs to be sufficiently connected to the labor issue raised and
must arise from an employer-employee relationship for the labor tribunals to have jurisdiction.

In this case, respondent Solid Mills claims that its properties are in petitioners' possession by virtue of
their status as its employees. Respondent Solid Mills allowed petitioners to use its property as an act of
liberality. Put in other words, it would not have allowed petitioners to use its property had they not
been its employees. The return of its properties in petitioners' possession by virtue of their status as
employees is an issue that must be resolved to determine whether benefits can be released
immediately. The issue raised by the employer is, therefore, connected to petitioners' claim for benefits
and is sufficiently intertwined with the parties' employer-employee relationship. Thus, it is properly
within the labor tribunals' jurisdiction.

II

Institution of clearance procedures

has legal bases

Requiring clearance before the release of last payments to the employee is a standard procedure among
employers, whether public or private. Clearance procedures are instituted to ensure that the
properties, real or personal, belonging to the employer but are in the possession of the separated
employee, are returned to the employer before the employee's departure.

As a general rule, employers are prohibited from withholding wages from employees. The Labor Code
provides:

Art. 116. Withholding of wages and kickbacks prohibited. It shall be unlawful for any person, directly or
indirectly, to withhold any amount from the wages of a worker or induce him to give up any part of his
wages by force, stealth, intimidation, threat or by any other means whatsoever without the worker's
consent.

The Labor Code also prohibits the elimination or diminution of benefits. Thus:

Art. 100. Prohibition against elimination or diminution of benefits. Nothing in this Book shall be
construed to eliminate or in any way diminish supplements, or other employee benefits being enjoyed
at the time of promulgation of this Code.

However, our law supports the employers' institution of clearance procedures before the release of
wages. As an exception to the general rule that wages may not be withheld and benefits may not be
diminished, the Labor Code provides:

Art. 113. Wage deduction. No employer, in his own behalf or in behalf of any person, shall make any
deduction from the wages of his employees, except:

1. In cases where the worker is insured with his consent by the employer, and the deduction is to
recompense the employer for the amount paid by him as premium on the insurance;

2. For union dues, in cases where the right of the worker or his union to check-off has been recognized
by the employer or authorized in writing by the individual worker concerned; and

3. In cases where the employer is authorized by law or regulations issued by the Secretary of Labor and
Employment. (Emphasis supplied)

The Civil Code provides that the employer is authorized to withhold wages for debts due:

Article 1706. Withholding of the wages, except for a debt due, shall not be made by the employer.

"Debt" in this case refers to any obligation due from the employee to the employer. It includes any
accountability that the employee may have to the employer. There is no reason to limit its scope to
uniforms and equipment, as petitioners would argue.

More importantly, respondent Solid Mills and NAFLU, the union representing petitioners, agreed that
the release of petitioners' benefits shall be "less accountabilities."

"Accountability," in its ordinary sense, means obligation or debt. The ordinary meaning of the term
"accountability" does not limit the definition of accountability to those incurred in the worksite. As long
as the debt or obligation was incurred by virtue of the employer-employee relationship, generally, it
shall be included in the employee's accountabilities that are subject to clearance procedures.

It may be true that not all employees enjoyed the privilege of staying in respondent Solid Mills'
property. However, this alone does not imply that this privilege when enjoyed was not a result of the
employer-employee relationship. Those who did avail of the privilege were employees of respondent
Solid Mills. Petitioners' possession should, therefore, be included in the term "accountability."

Accountabilities of employees are personal. They need not be uniform among all employees in order to
be included in accountabilities incurred by virtue of an employer-employee relationship.

Petitioners do not categorically deny respondent Solid Mills' ownership of the property, and they do not
claim superior right to it. What can be gathered from the findings of the Labor Arbiter, National Labor
Relations Commission, and the Court of Appeals is that respondent Solid Mills allowed the use of its
property for the benefit of petitioners as its employees. Petitioners were merely allowed to possess and
use it out of respondent Solid Mills' liberality. The employer may, therefore, demand the property at
will.[79]

The return of the property's possession became an obligation or liability on the part of the employees
when the employer-employee relationship ceased. Thus, respondent Solid Mills has the right to
withhold petitioners' wages and benefits because of this existing debt or liability. In Solas v. Power and
Telephone Supply Phils., Inc., et al., this court recognized this right of the employer when it ruled that
the employee in that case was not constructively dismissed.[80] Thus:

There was valid reason for respondents' withholding of petitioner's salary for the month of February
2000. Petitioner does not deny that he is indebted to his employer in the amount of around P95,000.00.
Respondents explained that petitioner's salary for the period of February 1-15, 2000 was applied as
partial payment for his debt and for withholding taxes on his income; while for the period of February
15-28, 2000, petitioner was already on absence without leave, hence, was not entitled to any pay.[81]

The law does not sanction a situation where employees who do not even assert any claim over the
employer's property are allowed to take all the benefits out of their employment while they
simultaneously withhold possession of their employer's property for no rightful reason.

Withholding of payment by the employer does not mean that the employer may renege on its obligation
to pay employees their wages, termination payments, and due benefits. The employees' benefits are
also not being reduced. It is only subjected to the condition that the employees return properties
properly belonging to the employer. This is only consistent with the equitable principle that "no one
shall be unjustly enriched or benefited at the expense of another."[82]

For these reasons, we cannot hold that petitioners are entitled to interest of their withheld separation
benefits. These benefits were properly withheld by respondent Solid Mills because of their refusal to
return its property.

III
Mahilom and Damian are not
entitled to the benefits claimed

Teodora Mahilom is not entitled to separation benefits.

Both the National Labor Relations Commission and the Court of Appeals found that Teodora Mahilom
already retired long before respondent Solid Mills' closure. They found that she already received her
retirement benefits. We have no reason to disturb this finding. This court is not a trier of facts. Findings
of the National Labor Relations Commission, especially when affirmed by the Court of Appeals, are
binding upon this court.[83]

Moreover, Teodora Mahilom's claim for retirement benefits was not included in her complaint filed
before the Labor Arbiter. Hence, it may not be raised in the appeal.

Similarly, the National Labor Relations Commission and the Court of Appeals found that Carlito Damian
already received his terminal benefits. Hence, he may no longer claim terminal benefits.

The fact that respondent Solid Mills has not yet demolished Carlito Damian's house in SMI Village is not
evidence that he did not receive his benefits. Both the National Labor Relations Commission and the
Court of Appeals found that he executed an affidavit stating that he already received the benefits.

Absent any showing that the National Labor Relations Commission and the Court of Appeals
misconstrued these facts, we will not reverse these findings.

Our laws provide for a clear preference for labor. This is in recognition of the asymmetrical power of
those with capital when they are left to negotiate with their workers without the standards and
protection of law. In cases such as these, the collective bargaining unit of workers are able to get more
benefits and in exchange, the owners are able to continue with the program of cutting their losses or
wind down their operations due to serious business losses. The company in this case did all that was
required by law.

The preferential treatment given by our law to labor, however, is not a license for abuse.[84] It is not a
signal to commit acts of unfairness that will unreasonably infringe on the property rights of the
company. Both labor and employer have social utility, and the law is not so biased that it does not find a
middle ground to give each their due.

Clearly, in this case, it is for the workers to return their housing in exchange for the release of their
benefits. This is what they agreed upon. It is what is fair in the premises.

WHEREFORE, the petition is DENIED. The Court of Appeals' decision is AFFIRMED.

Carpio, (Chairperson), Velasco, Jr.* Del Castillo, and Mendoza, JJ., concur.
[ GR No. 195109, Feb 04, 2015 ]

ANDY D. BALITE v. SS VENTURES INTERNATIONAL

PEREZ, J.:
This is a Petition for Review on Certiorari pursuant to Rule 45 of the Revised Rules of Court, assailing the
18 June 2010 Decision[1]rendered by the Tenth Division of the Court of Appeals in CA-G.R. SP No.
109589. In its assailed decision, the appellate court reversed the Resolution of the National Labor
Relations Commission (NLRC) which denied the Motion to Reduce Appeal Bond filed by respondents SS
Ventures International, Inc., Sung Sik Lee and Evelyn Rayala

In a Resolution[2] dated 30 December 2010, the appellate court refused to reconsider its earlier decision.

The Facts

Respondent SS Ventures International, Inc. is a domestic corporation duly engaged in the business of
manufacturing footwear products for local sales and export abroad. It is represented in this action by
respondents Sung Sik Lee and Evelyn Rayala. Petitioners Andy Balite (Balite), Monaliza Bihasa (Bihasa)
and Delfin Anzaldo (Anzaldo) were regular employees of the respondent company until their
employments were severed for violation of various company policies.

For his part, Balite was issued a Show Cause Memorandum by the respondent company on 4 August
2005 charging him with the following infractions: (1) making false reports, malicious and fraudulent
statements and rumor-mongering against the company; (2) threatening and intimidating co-workers; (3)
refusing to cooperate in the conduct of investigation; and (4) gross negligence in the care and use of the
company property resulting in the damage of the finished products. After respondent found Balite's
explanation insufficient, he was dismissed from employment, through a Notice of Termination on 6
September 2005.

Bihasa, on the other hand, was charged with absence without leave on two occasions and with improper
behavior, stubbornness, arrogance and uncooperative attitude towards superiors and employees.
Bihasa was likewise terminated from the service on 5 May 2006 after her explanation in an
administrative investigation was found unsatisfactory by the respondent company.

Anzaldo was also dismissed from employment after purportedly giving him due process. The records of
the infractions he committed as well as the date of his termination, however, are not borne by the
records.

Consequently, the three employees charged respondents with illegal dismissal and recovery of
backwages, 13th month pay and attorney's fees before the Labor Arbiter.

In refuting the allegations of the petitioners, respondents averred that petitioners were separated from
employment for just causes and after affording them procedural due process of law.

On 30 December 2007, the Labor Arbiter rendered a Decision[3] in favor of petitioners and held that
respondents are liable for illegal dismissal for failing to comply with the procedural and substantive
requirements in terminating employment. The decretal portion of the Labor Arbiter Decision reads:

WHEREFORE, premises considered, [petitioners] are hereby found to have been illegally dismissed even
as respondents are held liable therefore.

Consequently, respondent corporation is hereby ordered to reinstate [petitioners] to their former

positions without loss of seniority rights and other privileges with backwages initially computed at this
time and reflected below.

The reinstatement aspect of this decision is immediately executory and thus respondents are hereby
required to submit a report of compliance therewith within ten (10) days from receipt thereof.
Respondent corporation is likewise ordered to pay [petitioners] their 13th month pay and 10% attorney's
fees.
Backwages 13th month pay Attorney's fees

1. Andy Balite P162,969.04 P 17,511.00 P 18,048.00

2. Delfin
158,299.44 17,511.00 17,511.00
Anzaldo
3. Monaliza
116,506.62 17,511.00 13,401.75
Bihasa

All other claims are dismissed for lack of factual or legal basis.[4]
Aggrieved, respondents interposed an appeal by filing a Notice of Appeal and paying the corresponding
appeal fee. However, instead of filing the required appeal bond equivalent to the total amount of the
monetary award which is P490,308.00, respondents filed a Motion to Reduce the Appeal Bond to
P100,000.00 and appended therein a manager's check bearing the said amount. Respondents cited
financial difficulty as justification for their inability to post the appeal bond in full owing to the partial
shutdown of respondent company's operations.

In a Resolution[5] dated 27 November 2008, the NLRC dismissed the appeal filed by the respondents for
non-perfection. The NLRC ruled that posting of an appeal bond equivalent to the monetary award is
indispensable for the perfection of the appeal and the reduction of the appeal bond, absent any
showing of meritorious ground to justify the same, is not warranted in the instant case.

Similarly ill-fated was respondents' Motion for Reconsideration which was denied by the NLRC in a
Resolution[6] dated 30 April 2009.

On certiorari, the Court of Appeals reversed the NLRC Decision and allowed the relaxation of the rule on
posting of the appeal bond. According to the appellate court, there was substantial compliance with the
rules for the perfection of an appeal because respondents seasonably filed their Memorandum of
Appeal and posted an appeal bond in the amount of P100,000.00. While the amount of the appeal bond
posted was not equivalent to the monetary award, the Court of Appeals ruled that respondents were
able to sufficiently prove their incapability to post the required amount of bond.[7] The Court of Appeals
disposed in this wise:

WHEREFORE, premises considered, finding grave abuse of discretion on the part of the [NLRC], the
instant petition is GRANTED. The [NLRC's] Resolutions dated November 27, 2008 and April 30, 2009,
respectively, are hereby SET ASIDE. [The NLRC] is hereby directed to decide petitioners' appeal on the
merits.[8]

In a Resolution[9] dated 30 December 2010, the Court of Appeals refused to reconsider its earlier
decision.

Petitioners are now before this Court via this instant Petition for Review on Certiorari[10] praying that the
Court of Appeals Decision and Resolution be reversed and set aside on the ground that:

WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS COMMITTED A GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR IN EXCESS OF JURISDICTION WHEN IT REVERSED THE RESOLUTION OF THE
NLRC DISMISSING RESPONDENTS' APPEAL FOR NON-PERFECTION THEREOF.[11]
The Court's Ruling

Petitioners, in assailing the appellate court's decision, argue that posting of an appeal bond in full is not
only mandatory but a jurisdictional requirement that must be complied with in order to confer
jurisdiction upon the NLRC. They posit that the posting of an insufficient amount of appeal bond, as in
this case, resulted to the non-perfection of the appeal rendering the decision of the Labor Arbiter final
and executory.

Banking on the appellate court's decision, respondents, for their part, urge the Court to relax the rules
on appeal underscoring on the so-called "utmost good faith" they demonstrated in filing a Motion to
Reduce Appeal Bond and in posting a cash bond in the amount of P100,000.00. In justifying their
inability to post the required appeal bond, respondents reasoned that respondent company is in dire
financial condition due to lack of orders from customers constraining it to temporarily shut down its
operations resulting in significant loss of revenues. Respondents now plea for the liberal interpretation
of the rules so that the case can be threshed out on the merits, and not on technicality.

Time and again we reiterate the established rule that in the exercise of the Supreme Court's power of
review, the Court is not a trier of facts[12] and does not routinely undertake the re-examination of the
evidence presented by the contending parties during the trial of the case considering that the findings of
facts of labor officials who are deemed to have acquired expertise in matters within their respective
jurisdiction are generally accorded not only respect, but even finality, and are binding upon this Court,
when supported by substantial evidence.[13]

The NLRC ruled that no appeal had been perfected on time because of respondents' failure to post the
required amount of appeal bond. As a result of which, the decision of the Labor Arbiter has attained
finality. The Court of Appeals, on the contrary, allowed the relaxation of the rules and held that
respondents were justified in failing to pay the required appeal bond. Despite the non-posting of the
appeal bond in full, however, the appellate court deemed that respondents were able to seasonably
perfect their appeal before the NLRC, thereby directing the NLRC to resolve the case on the merits.

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. x x x.

xxxx

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.
(Emphases ours).
Implementing the aforestated provisions of the Labor Code are the provisions of Rule VI of the 2011
Rules of Procedure of the NLRC on perfection of appeals which read:

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. x x x If the 10th day or the 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.

xxxx

Section 4. Requisites for Perfection of Appeal. (a) The appeal shall be:

(1) filed within the reglementary period as provided in Section 1 of this Rule;
verified by the appellant himself/herself in accordance with Section 4, Rule 7 of the Rules of Court
(2)
,as amended;
in the form a of a memorandum of appeal which shall state the grounds relied upon and the
(3) arguments in support thereof; the relief prayed for; and with a statement of the date when the
appellant received the appealed decision, award or order;
(4) in three (3) legibly typewritten or printed copies; and
(5) accompanied by:
i) proof of payment of the required appeal fee and legal research fee;
ii) posting of cash or surety bond as provided in Section 6 of this Rule; and
iii) proof of service upon the other parties.
xxxx

(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.

xxxx

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 shall 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.

xxxx

The Commission through the Chairman may on justifiable grounds blacklist a bonding company,
notwithstanding its accreditation by the Supreme Court.
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.[14]

In McBurnie v. Ganzon,[15] we harmonized the provision on appeal that its procedures are fairly applied
to both the petitioner and the respondent, assuring by such application that neither one or the other
party is unfairly favored. We pronounced that the posting of a cash or surety bond in an amount
equivalent to 10% of the monetary award pending resolution of the motion to reduce appeal bond shall
be deemed sufficient to perfect an appeal, to wit:

It is in this light that the Court finds it necessary to set a parameter for the litigants' and the NLRC's
guidance on the amount of bond that shall hereafter be filed with a motion for a bond's reduction. To
ensure that the provisions of Section 6, Rule VI of the NLRC Rules of Procedure that give parties the
chance to seek a reduction of the appeal bond are effectively carried out, without however defeating
the benefits of the bond requirement in favor of a winning litigant, all motions to reduce bond that are
to be filed with the NLRC shall be accompanied by the posting of a cash or surety bond equivalent to
10% of the monetary award that is subject of the appeal, which shall provisionally be deemed the
reasonable amount of the bond in the meantime that an appellant's motion is pending resolution by the
Commission. In conformity with the NLRC Rules, the monetary award, for the purpose of computing the
necessary appeal bond, shall exclude damages and attorney's fees. Only after the posting of a bond in
the required percentage shall an appellant's period to perfect an appeal under the NLRC Rules be
deemed suspended.

The rule We set in McBurnie was clarified by the Court in Sara Lee Philippines v. Ermilinda
Macatlang.[16] Considering the peculiar circumstances in Sara Lee, We determined what is the
reasonable amount of appeal bond. We underscored the fact that the amount of 10% of the award is
not a permissible bond but is only such amount that shall be deemed reasonable in the meantime that
the appellant's motion is pending resolution by the Commission. The actual reasonable amount yet to
be determined is necessarily a bigger amount. In an effort to strike a balance between the constitutional
obligation of the state to afford protection to labor on the one hand, and the opportunity afforded to
the employer to appeal on the other, We considered the appeal bond in the amount of P725M which is
equivalent to 25% of the monetary award sufficient to perfect the appeal, viz.:

We sustain the Court of Appeals in so far as it increases the amount of the required appeal bond. But we
deem it reasonable to reduce the amount of the appeal bond to P725 Million. This directive already
considers that the award if not illegal, is extraordinarily huge and that no insurance company would be
willing to issue a bond for such big money. The amount of P725 Million is approximately 25% of the basis
above calculated. It is a balancing of the constitutional obligation of the state to afford protection to
labor which, specific to this case, is assurance that in case of affirmance of the award, recovery is not
negated; and on the other end of the spectrum, the opportunity of the employer to appeal.

By reducing the amount of the appeal bond in this case, the employees would still be assured of at least
substantial compensation, in case a judgment award is affirmed. On the other hand, management will
not be effectively denied of its statutory privilege of appeal.
In line with Sara Lee and the objective that the appeal on the merits to be threshed out soonest by the
NLRC, the Court holds that the appeal bond posted by the respondent in the amount of P100,000.00
which is equivalent to around 20% of the total amount of monetary bond is sufficient to perfect an
appeal. With the employer's demonstrated good faith in filing the motion to reduce the bond on
demonstrable grounds coupled with the posting of the appeal bond in the requested amount, as well as
the filing of the memorandum of appeal, the right of the employer to appeal must be upheld. This is in
recognition of the importance of the remedy of appeal, which is an essential part of our judicial system
and the need to ensure that every party litigant is given the amplest opportunity for the proper and just
disposition of his cause freed from the constraints of technicalities.[17]

WHEREFORE, premises considered, the petition is DENIED. The assailed Decision and Resolution of the
Court of Appeals are hereby AFFIRMED.

SO ORDERED.

Sereno, C. J., (Chairperson), Leonardo De-Castro, Bersamin, and Perlas-Bernabe, JJ., concur.
[ GR No. 206612, Aug 17, 2015 ]

TOYOTA ALABANG v. EDWIN GAMES

SERENO, C.J.:

Remaining at bench is the Motion for Reconsideration[1] of petitioner Toyota Alabang, Inc. We had
unanimously denied[2] its Petition for Review on Certiorari with Urgent Prayer for Injunctive Relief,[3]
which sought the nullity of the Court of Appeals (CA) Decision and Resolution.[4] The CA affirmed the
Resolutions[5] of the National Labor Relations Commission (NLRC) dismissing petitioner's appeal for
non-perfection and for lack of merit. In effect, the NLRC sustained the ruling[6] of the labor arbiter (LA)
finding that petitioner had illegally dismissed respondent Edwin Games (Games).

In gist, the antecedent facts are as follows:

Games, who worked as a foreman for petitioner, allegedly stole its vehicle lubricants. Subsequently, it
charged him with qualified theft before the trial court. Two years thereafter, or on 24 August 2007,
Games filed a Complainant for illegal dismissal, nonpayment of benefits, and damages against
petitioner. The latter, through counsel, failed to file its Position Paper on the date set on 15 November
2007.

Several resettings of the hearings ensued. During the 21 December 2007 hearing, petitioner manifested
that it had failed to file its Position Paper because its handling lawyer was no longer connected with the
company. Then, in the hearing of 11 January 2008, petitioner failed to appear and even reneged on
submitting its pleading. Accordingly, on 25 January 2008, the case was declared submitted for decision.

On 5 February 2008, the LA ruled against petitioner and ordered the latter to pay Games P535,553.07
for his separation pay, back wages, service incentive leave pay and attorney's fees resulting from his
illegal dismissal. Petitioner no longer filed a motion for reconsideration. As a result, the LA's ruling
became final and executory.

The LA issued a Writ of Execution, which petitioner sought to quash. It prayed that the proceedings be
reopened, explaining that it had failed to present evidence because of its counsel's negligence in filing
the appropriate pleadings. The LA denied the claims of petitioner. Aggrieved, the latter appealed before
the NLRC.

The appeal of petitioner was denied due course because it had failed to show proof of its security
deposit for the appeal bond under Section 6, Rule VI of the 2005 NLRC Rules of Procedure. According to
the NLRC, the bonding company's mere declaration in the Certification of Security Deposit that the bond
was fully secured[7] was not tantamount to a faithful compliance with the rule, because there must first
be an accompanying assignment of the employer's bank deposit.

On the merits, the NLRC dismissed the case on the basis of the rule that no appeal may be taken from an
order of execution of a final judgment.[8] For the NLRC, petitioner's failure to appeal the LA Decision
already made the ruling final and executory.

Petitioner elevated the case to the CA via a Petition for Certiorari, but the action was dismissed. Firstly,
the CA ruled that the NLRC did not gravely abuse its discretion in denying the appeal, given that
petitioner had failed to comply faithfully with the bond requirement. Secondly, it echoed the ruling of
the NLRC that a final judgment is no longer appealable. Thirdly, the CA found that petitioner's own
negligence had caused it to lose its right to appeal.

Aggrieved, petitioner filed a Petition for Review on Certiorari with Urgent Prayer for Injunctive Relief
before this Court. It disputed the finding that it did not show proof of its security deposit for the appeal
bond. It also insisted that its counsel's gross negligence justified the reopening of the proceedings
below.

By way of a minute Resolution, this Court denied the petition considering that the allegations, issues and
arguments raised by petitioner failed to sufficiently show that the CA had committed any reversible
error in the challenged decision and resolution as to warrant the exercise of this Court's discretionary
appellate jurisdiction. Hence, the instant Motion for Reconsideration.

The determinative issues in this case remain the same. This Court is tasked to review, on
reconsideration, whether or not the CA committed a reversible error in refusing to reopen the
proceedings below.

RULING OF THE COURT

To recall, the LA's decision finding that petitioner illegally dismissed respondent was already final and
executory because of petitioner's failure to file a timely appeal. Therefore, the labor dispute between
the parties should have been considered a closed case by then, and no longer subject to appeal. At that
point, Games should have already reaped the benefits of a favorable judgment. Still, petitioner sought
the reopening of the case, which the tribunals a quo denied.

This Court maintains that the CA correctly refused to reopen the proceedings below. The reopening of a
case is an extraordinary remedy,[9] which, if abused, can make a complete farce of a duly promulgated
decision that has long become final and executory. Hence, there must be good cause on the movant's
part before it can be granted.

In this case, petitioner itself was negligent in advancing its case. As found by the appellate court,
petitioner was present during the mandatory conference hearing in which the latter was informed by
the LA of the need to file a Position Paper on 15 November 2007. However, petitioner not only reneged
on the submission of its Position Paper, but even failed to move for the filing of the pleading at any point
before the LA resolved the case on 5 February 2008.

Moreover, petitioner had failed to exhibit diligence when it did not attend the hearing on 11 January
2008, or any of the proceedings thereafter, despite its manifestation that it no longer had any legal
representative. Given the instances of negligence by petitioner itself, the Court finds that the CA justly
refused to reopen the case in the former's favor. Definitely, petitioner cannot now be allowed to claim
denial of due process when it was petitioner who was less than vigilant of its rights.[10]

At this stage of appellate review, Justice Lucas P. Bersamin dissents and votes to remand the case to the
LA for the reception of petitioner's evidence. He posits three reasons as follows:

First, he states that the NLRC gravely abused its discretion in requiring petitioner to post an appeal
bond, because this requirement does not cover an appeal from a decision of the LA denying a motion to
quash a writ of execution.

Second, he writes that in any event, the NLRC erred in requiring petitioner to accompany the appeal
bond with proof of a security deposit or collateral securing the bond. He bases this point on the fact that
the bonding company has already issued a Certificate of Security Deposit declaring that the appeal bond
was fully secured by a security deposit equivalent to the judgment award.

Third, he advances the opinion that there may be merit in the Rule 45 petition filed by petitioner. He
cites that it had a just cause to dismiss respondent after he had allegedly stolen its vehicle lubricants.

Before discussing these points, it is apropos to elucidate that this Court must be faithful to the
framework of resolving labor cases on appellate review before this Court. Universal Robina Sugar Milling
Corporation v. Acibo aptly explains:[11]
This Court's power of review in a Rule 45 pet1t1on is limited to resolving matters pertaining to any
perceived legal errors, which the CA may have committed in issuing the assailed decision. In reviewing
the legal correctness of the CA's Rule 65 decision in a labor case, we examine the CA decision in the
context that it determined, i.e., the presence or absence of grave abuse of discretion in the NLRC
decision before it and not on the basis of whether the NLRC decision on the merits of the case was
correct. In other words, we have to be keenly aware that the CA undertook a Rule 65 review, not a
review on appeal, of the NLRC decision challenged before it. (Emphasis supplied)

Based on the foregoing, the task at hand involves a determination of whether or not the CA gravely
erred in finding that the NLRC did not exceed its jurisdiction in refusing to grant petitioner's entreaty to
reopen the case. In other words, as long as the exercise of discretion below is based on well- founded
factual and legal bases,12 no abuse of discretion amounting to lack or excess of jurisdiction can be
imputed, and we are then justified to deny due course both to the Rule 45 petition and the concomitant
Motion for Reconsideration.

The tribunals below gave overwhelming justifications for their rulings. In contrast, the first point
espoused in the dissenting opinion has no basis. The paraphrased proposition that "an appeal bond is
not required in appeals from decisions of the LA denying a motion to quash a writ of execution" lacks
any citation sourced from a statute or case law. Article 223 of the Labor Code and Section 6, Rule VI of
the 2011 NLRC Rules of Procedure, uniformly state thus:

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. (Emphasis supplied)

Evidently, the above rules do not limit the appeal bond requirement only to certain kinds of rulings of
the LA. Rather, these rules generally state that in case the ruling of the LA involves a monetary award, an
employer's appeal may be perfected only upon the posting of a bond. Therefore, absent any qualifying
terms,[13] so long as the decision of the LA involves a monetary award, as in this case,[14] that ruling
can only be appealed after the employer posts a bond.

Clearly, this construction is but proper considering the avowed purpose of appeal bonds demanded by
the law from employers in labor cases. This matter was discussed by the Court in Computer Innovations
Center v. NLRC,[15] to wit:

As earlier stated, the underlying purpose of the appeal bond is to ensure that the employee has
properties on which he or she can execute upon in the event of a final, providential award. The non
payment or woefully insufficient payment of the appeal bond by the employer frustrates these ends.
Respondent Cario alleges in his Comment before this Court that petitioner Quilos and his wife have
since gone abroad, and wonders aloud whether he still would be able to collect his monetary award
considering the circumstances. Petitioners, in their Reply and Memorandum, do not aver otherwise.
Indeed, such eventuality appears plausible considering that Quilos himself did not personally verify the
petition, and had in fact executed a Special Power of Attorney in favor of his counsel, Atty. Bernabe B.
Alabastro, authorizing the filing of cases in his name. ft does not necessarily follow that the absence of
Quilos from this country precludes the execution of the award due Cario. However, if the absence of
Quilos from this country proves to render impossible the execution of judgment in favor of Cario, then
the latter's victory may sadly be rendered pyrrhic. The appeal bond requirement precisely aims to
prevent empty or inconsequential victories by the laborer, and it is hoped that herein petitioners' refusal
to post the appropriate legal appeal bond does not frustrate the ends of justice in this case. (Emphasis
supplied)
If we are to construe otherwise, then an aggrieved party may simply seek the quashal of a writ of
execution, instead of going through the normal modes of appeal, to altogether avoid paying for an
appeal bond. This ruse will then circumvent the requirement of both labor rules and jurisprudence[16]
to post an appeal bond before contesting the LA's grant of monetary award. Hence, the first point is not
only incorrect, but also dangerous.

The second point likewise fails to justify the grant of petitioner's Motion for Reconsideration. This point
refers to the proper construction of Section 6, Rule VI of the 2011 NLRC Rules of Procedure, which
demands that an appeal bond must be accompanied by a "proof of security deposit or collateral
securing the bond."

According to the NLRC and the CA, the bonding company's mere declaration in the Certification of
Security Deposit that the bond is fully secured[17] is not tantamount to a faithful compliance with the
rule, because there must first be an accompanying assignment of the employer's bank deposit. On the
other hand, the dissent sees this declaration as an act that satisfies Section 6, Rule VI of the 2011 NLRC
Rules of Procedure. For this reason, he opines that the NLRC should have entertained the appeal of
petitioner.

Notwithstanding this issue, the NLRC has given a well-founded reason for refusing to entertain
petitioner's appeal, namely, no appeal may be taken from an order of execution of a final and executory
judgment.

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.[18] Thus, a party who seeks to elevate an action must comply
with the requirements of the 2011 NLRC Rules of Procedure as regards the period, grounds, venue, fees,
bonds, and other requisites for a proper appeal before the NLRC; and in Section 6, Rule VI, the aforesaid
rules prohibit appeals from final and executory decisions of the Labor Arbiter.

In this case, petitioner elevated to the NLRC an already final and executory decision of the LA. To recall,
after petitioner learned of its former counsel's negligence in filing a Position Paper before the LA, it
nonetheless failed to file a motion reconsideration to question the ruling of the LA that it illegally
dismissed Games. At that point, the Decision was already final and executory, so the LA dutifully issued a
Writ of Execution. Petitioner sought the quashal of the writ of execution and the reopening of its case
only at that stage; and only after it was rebuffed by the LA did petitioner appeal before the NLRC. Based
on the timeline, therefore, the LA's adverse Decision had become final and executory even prior to
petitioner's appeal before the NLRC contesting the denial of the Motion to Quash the Writ of Execution.
Consequently, the NLRC dismissed the appeal based on its clear prohibition under Section 5, Rule V of
the 2011 NLRC Rules of Procedure.[19]

The NLRC's reasoning that no appeal may be taken from an order of execution of a final and executory
judgment is also rooted in case law. Jurisprudence dictates that a final and executory decision of the LA
can no longer be reversed or modified.[20] After all, just as a losing party has the right to file an appeal
within the prescribed period, so does the winning party have the correlative right to enjoy the finality of
the resolution of the case.[21] On this basis, theCA did not grievously err when it concluded that the
ruling of the NLRC denying petitioner's appeal was not baseless, arbitrary, whimsical, or despotic.[22]

Finally, as regards the third point pertaining to the advancement of the merits[23] of the case, it may no
longer be properly considered by this Court. To adjudicate on the merits of the instant appeal would
require the reopening of the whole case, a step that all the tribunals below - the LA, the NLRC, and the
CA- have already refused to take.
As correctly ruled by the CA, the reopening of a case is, by default, not allowed merely on the ground
that the counsel has been negligent in taking the required steps to protect the interest of the client,
such as timely filing a pleading, appearing during hearings, and perfecting appeals.[24] An exception
arises only when there is good cause and excusable negligence on the client's part.[25]

Both the explanation of the CA and the records undeniably show no good cause or excusable negligence
on the part of the client - petitioner Toyota Alabang, Inc. given the totality of the instances of the latter's
own negligence in these proceedings, viz: (1) despite being informed, during the mandatory conference
hearing, of the necessity to file a Position Paper, petitioner reneged on its duty to timely submit its
Position Paper to the LA on 15 November 2007; (2) after manifesting that it no longer had a counsel,
petitioner was still absent on 11 January 2008, the date when it could still have submitted its belated
Position Paper; (3) thereafter, it altogether absented itself from all the proceedings before the LA; (4) at
no point before the LA's resolution of the case on 5 February 2008 did petitioner file a Position Paper;
and (5) after allowing the LA Decision to attain finality as a result of its non-submission of an appeal or a
motion for reconsideration, petitioner belatedly sought the quasha1 of the execution of the LA Decision
granting compensation to respondent.

Despite the overwhelming lapses mentioned above, the dissent maintains that petitioner cannot be
considered negligent by any measure. According to the dissent, petitioner could not be faulted for failing
to file a position paper because the filing of pleadings has been entrusted to its counsel. For the dissent,
"given the nature and extent of its business and operations, the petitioner could not be expected to
supervise and monitor all the cases it had entrusted to its lawyer." But, this stance is baseless as can be
seen by the lack of legal citation in the dissent.

More importantly, this Court cannot give special treatment to petitioner. In our past cases, this Court
already held that the failure of the counsel to file the required position papers before the LA is not a
ground to declare that petitioner had been deprived of due process; and is not a cause to conclude that
the proceedings a quo had been null and void.[26] In Building Care Corporation v. Macaraeg,[27] this
Court thoroughly explained that:

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. 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. 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.

We have consistently held that the requirements of due process are satisfied when the parties are given
the opportunity to submit position papers wherein they are supposed to attach all the documents that
would prove their claim in case it be decided that no hearing should be conducted or was necessary.[28]
Here, petitioner, despite being given several chances to pass its position paper, did not at all comply.
Worse, petitioner also had other instances of negligence. Consequently, this Court cannot redo the
whole proceedings of the Labor Arbiter who had already afforded due process to the former.

Given the foregoing reasons, juxtaposed with the high threshold for resolving appellate reviews in labor
cases before this Court, we rule for the denial of petitioner's Motion for Reconsideration.

WHEREFORE, the Petition for Review with Urgent Prayer for Injunctive Relief filed by Toyota Alabang,
Inc. is DENIED with FINALITY. No further pleadings shall be entertained in this case. Let an Entry of
Judgment be issued in due course.

SO ORDERED.