Additional Cases: Labor Relations - National Labor Relations Commission (Arts. 220-231)

  • Jaime Cagatan was dismissed by petitioner Sulpicio Lines, Inc. for allegedlybeing absent without leave for six months.
  • Cagatan filed a complaint for illegal dismissal with the NLRC in Manila.
  • Petitioner filed a Motion to Dismiss, on the ground of improper venue.
    • That the case should have been in NLRC's Regional Branch No. VII (Cebu), where its main office was located.
  • Labor Arbiter: Denied the Motion to Dismiss:
    • The complainant is a ship steward, travelling along the Manila-Enstancia-lloilo-Zamboanga-Cotabato vice-versa route, Manila can be said to be part of the complainant's territorial workplace.
  • NLRC: Found the appeal unmeritorious and sustained the LA's ruling.
    • The complainant instituted the action in Manila where he resides. 
    • The State shall afford protection to labor and that the NLRC is not bound by strict technical rules of procedure.
WoN public respondent NLRC acted with grave abuse of discretion amounting to lack or excess of jurisdiction when it issued its assailed rulings. NO

The question of venue essentially relates to the trial and touches more upon the convenience of the parties, rather than upon the substance and merits of the case. Our permissive rules underlying provisions on venue are intended to assure convenience for the plaintiff and his witnesses and to promote the ends of justice.
    Petitioner maintains its principal office in Cebu City but also operates a booking and shipping office in Manila, generating substantial revenue and employing a significant workforce. Insisting on holding proceedings in the NLRC-Cebu City, seemingly to inconvenience the private respondent, a steward residing in Metro Manila.
      Section 1, Rule IV of the NLRC Rules allows cases to be filed in the Regional Arbitration Branch having jurisdiction the workplace of the complainant/petitioner., using the word "may," indicating permissiveness for a different venue if substantial justice demands it.


      Topic: Intra-corporate Dispute
      • Purificacion Tabang was a founding member, a member of the Board of Trustees, and the corporate secretary of Pamana Golden Care Medical Center Foundation, Inc., a non-stock corporation engaged in extending medical and surgical services.
      • In October 1990, she was appointed as Medical Director and Hospital Administrator claiming a monthly retainer fee of P5,000, allegedly stopped in November 1991.
      • When she was informed of her removal, she then filed a complaint for illegal dismissal and non-payment of wages and allowances before the Labor Arbiter.
      • Corporation filed a motion to dismiss.
        • Ground: Lack of jurisdiction over the subject matter.
        • Her dismissal was intra-corporate controversy and within SEC's domain.
      • LA: Dismissed the complaint for lack of jurisdiction
      • NLRC: Affirmed the dismissal.
        • The position of a Medical Director and Hospital Administrator is akin to that of an executive position in a corporate ladder structure.
      WoN the SEC has jurisdiction over the case. YES

      Contrary to the contention of petitioner, a medical director and a hospital administrator are considered as corporate officers under the by-laws of respondent corporation. 

      The president, vice-president, secretary and treasurer are commonly regarded as the principal or executive officers of a corporation, and modern corporation statutes usually designate them as the officers of the corporation. However, other offices are sometimes created by the charter or by-laws of a corporation, or the board of directors may be empowered under the by-laws of a corporation to create additional offices as may be necessary.
      •  It has been held that an "office'' is created by the charter of the corporation and the officer is elected by the directors or stockholders.
      • On the other hand, an "employee" usually occupies no office and generally is employed not by action of the directors or stockholders but by the managing officer of the corporation who also determines the compensation to be paid to such employee. 
      Tabang, appointed by the Board of Trustees, is deemed a corporate officer. Corporate officer dismissal is an intra-corporate controversy, falling under SEC jurisdiction.  An intra-corporate controversy is one which arises between a stockholder and the corporation. 

      P5,000 monthly payment from Pamana, Inc., not considered compensation for Tabang's role as Medical Director and Hospital Administrator. Vouchers show payment by Pamana, Inc., a stock corporation separate from Pamana Golden Care Medical Center Foundation, Inc Tabang, a retained physician of Pamana, Inc., serves Pamana Golden Care cardholders, with vouchers considered proof of retainer fees. Monthly payment, even if a valid claim, does not alter SEC jurisdiction as it is part of corporate affairs and not a simple labor problem.

      Topic: Intra-corporate Dispute
      • After his dismissal as Vice President for Finance and Administration, Ricardo R. Coros filed a complaint for illegal suspension and illegal dismissal against Matling Industrial and corporate officers in NLRC.
      • Petitioners moved to dismiss.
        • Ground: Lack of Jurisdiction
        • The complaint is within the SEC jurisdiction, being an intra-corporate controversy, as respondent was a Matling Board of Directors member and Vice President.
      • Labor Arbiter: Granted the motion to dismiss, ruling respondent as a corporate officer.
      • NLRC: Set aside dismissal.
        • The position of Vice-President for Finance and Administration being held by complainant-appellant is not listed as among respondent's corporate officers in Matling’s Constitution and By-Laws.
      • CA: Dismissed the petition for certiorari.
        • For a position to be considered as a corporate office, or, for that matter, for one to be considered as a corporate officer, the position must, if not listed in the by-laws, have been created by the corporation's board of directors, and the occupant thereof appointed or elected by the same board of directors or stockholders.
        • The position which Coros used to hold in the corporation, was not created by the corporation’s board of directors. Coros’ appointment to said position was not made through any act of the board of directors or stockholders of the corporation. 
      WoN the respondent was a corporate officer of Matling. NO

      I. The Law on Jurisdiction in Dismissal Cases
      • Effective on August 8, 2000, upon the passage of Republic Act No. 8799, otherwise known as The Securities Regulation Code, the SEC’s jurisdiction over all intra-corporate disputes was transferred to the RTC. Considering that the respondent’s complaint for illegal dismissal was commenced on August 10, 2000, it might come under the coverage of Section 5.2 of RA No. 8799, should it turn out that the respondent was a corporate, not a regular, officer of Matling.
      II. Was the Respondent’s Position of Vice President for Administration and Finance a Corporate Office?
      • A position must be expressly mentioned in the By-Laws in order to be considered as a corporate office. Thus, the creation of an office pursuant to or under a By-Law enabling provision is not enough to make a position a corporate office. A different interpretation can easily leave the way open for the Board of Directors to circumvent the constitutionally guaranteed security of tenure of the employee by the expedient inclusion in the By-Laws of an enabling clause on the creation of just any corporate officer position.
        • The statement in Tabang, to the effect that offices not expressly mentioned in the By-Laws but were created pursuant to a By-Law enabling provision were also considered corporate offices, was plainly obiter dictum due to the position subject of the controversy being mentioned in the By-Laws. 
        • Considering that the observations earlier made herein show that the soundness of their dicta is not unassailable, Tabang should no longer be controlling.
      III Did Respondent’s Status as Director and Stockholder Automatically Convert his Dismissal into an Intra-Corporate Dispute?
      • In Tabang, an intra-corporate controversy is one which arises between a stockholder and the corporation. There is no distinction, qualification or any exemption whatsoever. However, the Tabang pronouncement is not controlling because it is too sweeping and does not accord with reason, justice, and fair play. 
      • In order to determine whether a dispute constitutes an intra-corporate controversy or not, the Court considers two elements instead, namely: 
        1. the status or relationship of the parties; and 
        2. the nature of the question that is the subject of their controversy. 
      • Not every conflict between a corporation and its stockholders involves corporate matters that only the SEC can resolve in the exercise of its adjudicatory or quasi-judicial powers.
      • In order that the SEC (now the regular courts) can take cognizance of a case, the controversy must pertain to any of the following relationships:
        1. between the corporation, partnership or association and the public;
        2. between the corporation, partnership or association and its stockholders, partners, members or officers;
        3. between the corporation, partnership or association and the State as far as its franchise, permit or license to operate is concerned; and
        4. among the stockholders, partners or associates themselves.
      • Criteria for distinguishing between corporate officers and ordinary employees depend on the manner of creating the office, not the nature of services performed..
        • Respondent's appointment as Vice President for Finance and Administration was not due to his status as a stockholder or director but based on 33 years of continuous employment.
        • Regular employment is determined by the nature of work and length of service, not the mode of hiring.
      Topic: Intra-corporate Dispute
      • Clarita Tan Reyes filed a complaint against Prudential Bank and Trust Company for illegal suspension and illegal dismissal.
      • Reyes held the position of Assistant Vice President in the foreign department of the Bank and was responsible for tasks related to the collection of checks from overseas banks and ensuring the collection of foreign bills or checks purchased.
      • Petitioner argues that the dispute is an intra-corporate controversy concerning as it does the non-election of private respondent to the position of Assistant Vice-President of the Bank.
      • Labor Arbiter: Ruled in favor of Reyes.
      • NLRC: Reversed the Labor Arbiter's decision.
      • CA: Found that the NLRC committed grave abuse of discretion, reinstating the Labor Arbiter's decision with modifications.
      WoN the NLRC has jurisdiction over the complaint for illegal dismissal. YES

      Petitioner Bank can no longer raise the issue of jurisdiction under the principle of estoppel. The Bank participated in the proceedings from start to finish. It filed its position paper with the Labor Arbiter. When the decision of the Labor Arbiter was adverse to it, the Bank appealed to the NLRC. When the NLRC decided in its favor, the bank said nothing about jurisdiction. Even before the Court of Appeals, it never questioned the proceedings on the ground of lack of jurisdiction. It was only when the Court of Appeals ruled in favor of private respondent did it raise the issue of jurisdiction. The Bank actively participated in the proceedings before the Labor Arbiter, the NLRC and the Court of Appeals. While it is true that jurisdiction over the subject matter of a case may be raised at any time of the proceedings, this rule presupposes that laches or estoppel has not supervened. 

      As far as the records before this Court reveal however, assertions was made only in the appeal to the NLRC and raised again before the Court of Appeals, not for purposes of questioning jurisdiction but to establish that private respondent's tenure was subject to the discretion of the Board of Directors and that her non-reelection was a mere expiration of her term. 

      The bank's contention that she merely holds an elective position and that in effect she is not a regular employee is belied by the nature of her work and her length of service with the Bank. The primary standard of determining regular employment is the reasonable connection between the particular activity performed by the employee in relation to the usual trade or business of the employer. Additionally, "an employee is regular because of the nature of work and the length of service, not because of the mode or even the reason for hiring them." As Assistant Vice-President of the Foreign Department of the Bank she performs tasks integral to the operations of the bank and her length of service with the bank totaling 28 years speaks volumes of her status as a regular employee of the bank. 

      Topic: Intra-corporate Dispute
      • Dr. Ma. Mercedes Barba received a scholarship grant from Liceo de Cagayan University, Inc. to pursue a three-year residency training.
      • After completing her residency, Barba returned to work for Liceo de Cagayan University and was appointed Acting Dean and later Dean of the College of Physical Therapy.
      • The College of Physical Therapy ceased operations due to significant decline in enrollees, and Barba went on leave without pay. Barba was then instructed to return to work in the College of Nursing.
      • Prior to her termination, Barba filed a complaint for illegal dismissal against alleging that her transfer to the College of Nursing amounted to constructive dismissal.
      • Labor Arbiter: Found that Barba was not constructively dismissed.
      • NLRC: Reversed the decision, ruling that she was indeed constructively dismissed.
      • Respondent filed a Supplemental Petition, introducing the issue of lack of jurisdiction of the LA and the NLRC over the case.
        • That a College Dean is a corporate officer under its by-laws, and petitioner and the appointment was approved by the board of directors.
      • CA: Initially reversed the NLRC but changed its stance and concluded that he position of a College Dean is a corporate office, and therefore, the labor tribunals had no jurisdiction over the complaint for constructive dismissal.
        • However, respondent's active participation in the proceedings estopped it from questioning the jurisdiction of the labor tribunals.
      WoN petitioner was an employee and not a corporate officer of respondent university. YES

      Corporate officers are elected or appointed by the directors or stockholders, and are those who are given that character either by the Corporation Code or by the corporation’s by-laws. True, the By-Laws of provides that there shall be a College Director. However, the position of Dean does not appear to be the same as that of a College Director. A College Director is directly appointed by the Board of Directors. However, a College Dean is appointed by the President upon the recommendation of the Vice President for Academic Affairs and the Executive Vice President and approval of the Board of Directors. Petitioner is not a College Director and she is not a corporate officer but an employee of respondent. Being an employee of respondent, her complaint for illegal/constructive dismissal against respondent was properly within the jurisdiction of the Labor Arbiter and the NLRC.

      For a transfer not to be considered a constructive dismissal, the employer must be able to show that such transfer is not unreasonable, inconvenient, or prejudicial to the employee. In this case, petitioner’s transfer was not unreasonable, inconvenient or prejudicial to her. On the contrary, the assignment of a teaching load in the College of Nursing was undertaken by respondent to accommodate petitioner following the closure of the College of Physical Therapy. Respondent further considered the fact that petitioner still has two years to serve the university under the Scholarship Contract.


      Topic: Intra-corporate Dispute, Appeal Bond
      • ProHealth Pharma Philippines, Inc. is a corporation engaged in the sale of pharmaceutical products and health food.
        • Nicanor Malcaba, an incorporator, alleged that after a leave request, he was told he resigned, leading to his removal.
        • Christian Nepomuceno was terminated for alleged fraud and willful breach of trust for failure to inform his flight relating to his vacation leave.
        • Palit-Ang, Finance Officer, was initially reassigned and later terminated for disobedience to orders.
      • Labor Arbiter: 
        • Found Malcaba constructively dismissed. 
        • Nepomuceno's dismissal lacked due process, and 
        • Palit-Ang's termination was too harsh.
      • NLRC: Affirmed the decision with modifications.
      • CA: Reversed the NLRC's/
        • Malcaba, as a corporate officer, should have filed an intra-corporate dispute with the Regional Trial Court.
        • Justified Nepomuceno and Palit-Ang's dismissal, finding due process was observed.
      WoN respondents failed to perfect their appeal when it was discovered that their appeal bond was a forged bond. NO

      Thus, while the procedural rules strictly require the employer to submit a genuine bond, an appeal could still be perfected if there was substantial compliance with the requirement.

      In this instance, the National Labor Relations Commission certified that respondents filed a security deposit in the amount of P6,512,524.84 under Security Bank check no. 0000045245,72 showing that the premium for the appeal bond was duly paid and that there was willingness to post it. Respondents likewise attached documents proving that Alpha Insurance was a legitimate and accredited bonding company. Despite their failure to collect on the appeal bond, petitioners do not deny that they were eventually able to garnish the amount from respondents' bank deposits. This fulfills the purpose of the bond, that is, "to guarantee the payment of valid and legal claims against the employer[.]" Respondents are considered to have substantially complied with the requirements on the posting of an appeal bond.

      WoN Labor Arbiter and National Labor Relations Commission had jurisdiction over petitioner Nicanor F. Malcaba's termination dispute considering the allegation that he was a corporate officer, and not a mere employee. NO

      Petitioner Malcaba was an incorporator of the corporation and a member of the Board of Directors. Respondent corporation's By-Laws creates the office of the President.
      Finding that petitioner Malcaba is the President of respondent corporation and a corporate officer, any issue on his alleged dismissal is beyond the jurisdiction of the Labor Arbiter or the National Labor Relations Commission. Their adjudication on his money claims is void for lack of jurisdiction. As a matter of equity, petitioner Malcaba must, therefore, return all amounts received as judgment award pending final adjudication of his claims.


      Topic: Appeal Bond
      • Vicente San Jose was a stevedore until his retirement at 65 years old. He filed a complain regarding his retirement pay.
      • Labor Arbiter: Ruled in favor of the complainant, awarding the claimed differential in separation pay.
        • Decision focused solely on the complaint's merits without mentioning jurisdictional issues.
      • NLRC: Reversed the Labor Arbiter's decision on jurisdictional grounds since it involved interpretation of the collective bargaining agreement.
      WoN the LA has jurisdiction over the matter. NO

      That the National Labor Relations Commission correctly ruled that the Labor Arbiter had no jurisdiction over the case, because the case involved an issue "arising from the interpretation or implementation" of a Collective Bargaining Agreement;

      WoN the appeal of the respondent corporation was interposed within the reglementary period. YES

       While it is true that private respondent company received a copy of the decision dated January 19, 1994 of the Labor Arbiter . . . and filed its appeal on February 14, 1994, it is undisputed that the tenth day within which to file an appeal fell on a Saturday, the last day to perfect an appeal shall be the next working day. If the 10th day . . . falls on a Saturday, Sunday or a Holiday, the last day to perfect the decision shall be the next working day.


      Topic: Jurisdiction
      • San Miguel Corporation (SMC) sponsors an Innovation Program, offering cash awards to employees for beneficial ideas and suggestions. 
      • Rustico Vega submits an innovation proposal titled "Modified Grande Pasteurization Process" to improve the quality of "San Miguel Beer Grande." 
      • Despite 13 years of employment with SMC, Vega's proposal is rejected, leading to his demand for a cash award under the Innovation Program. 
      • Vega files a complaint against SMC, claiming that his proposal had been accepted and implemented, entitling him to a cash prize of P60,000.00. 
      • SMC denies approval, citing lack of originality and impossibility of achieving the desired result. 
      • Labor Arbiter: Dismisses the complaint for lack of jurisdiction but awards Vega P2,000.00 as financial assistance. 
      • NLRC: Sets aside the Labor Arbiter's order and orders SMC to pay Vega P60,000.00.

      WoN the money claim of private respondent Rustico Vega, arising from his innovation proposal under the Innovation Program of San Miguel Corporation, falls within the original and exclusive jurisdiction of Labor Arbiters. NO

      Money claims of workers which now fall within the original and exclusive jurisdiction of Labor Arbiters are those money claims which have some reasonable causal connection with the employer-employee relationship.

      Applying the foregoing reading to the present case, we note that petitioner's Innovation Program is an employee incentive scheme offered and open only to employees of petitioner Corporation, more specifically to employees below the rank of manager. Without the existing employer-employee relationship between the parties here, there would have been no occasion to consider the petitioner's Innovation Program or the submission by Mr. Vega of his proposal concerning beer grande; without that relationship, private respondent Vega's suit against petitioner Corporation would never have arisen. The money claim of private respondent Vega in this case, therefore, arose out of or in connection with his employment relationship with petitioner.

      Thus, whether or not an enforceable contract, albeit implied arid innominate, had arisen between petitioner Corporation and private respondent Vega in the circumstances of this case, and if so, whether or not it had been breached, are preeminently legal questions, questions not to be resolved by referring to labor legislation and having nothing to do with wages or other terms and conditions of employment, but rather having recourse to our law on contracts.


      Topic: Appeal Bond
      • Andrew James McBurnie, an Australian national, filed a complaint for illegal dismissal and other claims against Eulalio Ganzon, EGI-Managers, Inc. and E. Ganzon, Inc.
      • McBurnie claimed he signed a five-year employment agreement as Executive Vice-President with EGI, overseeing hotels and resorts in the Philippines, but was illegally dismissed after an accident.
      • Respondents argued the agreement was for joint investment, not employment, and McBurnie lacked alien work permit.
      • Labor Arbiter: Declared McBurnie illegally dismissed and awarded significant amounts. 
        • Respondents appealed, filing a motion to reduce the bond.
      • NLRC: Denied the motion to reduce bond, requiring additional bond posting. The respondents' appeal was dismissed for failure to post the bond.
      • CA: Granted a writ of preliminary injunction, directing the NLRC to give due course to the appeal, conditioned on a ₱10,000,000.00 bond.
        • The CA later ruled in 2008 that the NLRC committed grave abuse of discretion in denying the motion to reduce bond and dismissing the appeal for failure to post an additional bond.
      • NLRC: Acting on the CA's order, reversed the LA's decision, stating McBurnie was never an employee and lacked a work permit.
      • Supreme Court: In 2009, reversed the CA's decision, reinstating the NLRC's dismissal of the appeal for failure to post a sufficient bond.
        • McBurnie's motion for reconsideration was denied, and the decision became final in 2012. Entry of judgment was made in due course.
      • In 2012, respondents filed a motion for reconsideration, alleging grave abuse of discretion, a substantial bond, and irregularities in the Supreme Court's 2009 decision.
      • The Supreme Court accepted the case en banc, issuing a TRO against implementing the LA's decision.
      • WoN the McBurnie was illegally dismissed. NO
      • McBurnie was not an employee of the respondents; thus, they could not have dismissed him from employment. The employment agreement could not have given rise to an employer-employee relationship by reason of legal impossibility. The two conditions that form part of their agreement, namely, the successful completion of the project financing for the hotel project in Baguio City and McBurnie’s acquisition of an Alien Employment Permit, remained unsatisfied. The NLRC concluded that McBurnie was instead a potential investor in a project that included Ganzon, but the said project failed to pursue due to lack of funds. Absent an employment permit, any employment relationship that McBurnie contemplated with the respondents was void for being contrary to law. A void or inexistent contract, in turn, has no force and effect from the beginning as if it had never been entered into. 
      • Furthermore, on the matter of the filing and acceptance of motions to reduce appeal bond, as provided in Section 6, Rule VI of the 2011 NLRC Rules of Procedure, the Court hereby RESOLVES that henceforth, the following guidelines shall be observed:
        1. The filing o a motion to reduce appeal bond shall be entertained by the NLRC subject to the following conditions: 
          1. there is meritorious ground; and 
          2. a bond in a reasonable amount is posted;
        2. For purposes o compliance with condition no. (2), a motion shall be accompanied by the posting o a provisional cash or surety bond equivalent to ten percent (10%) of the monetary award subject o the appeal, exclusive o damages and attorney's fees;
        3. Compliance with the foregoing conditions shall suffice to suspend the running o the 10-day reglementary period to perfect an appeal from the labor arbiter's decision to the NLRC;
        4. The NLRC retains its authority and duty to resolve the motion to reduce bond and determine the final amount o bond that shall be posted by the appellant, still in accordance with the standards o meritorious grounds and reasonable amount; and
        5. In the event that the NLRC denies the motion to reduce bond, or requires a bond that exceeds the amount o the provisional bond, the appellant shall be given a fresh period o ten (10) days from notice o the NLRC order within which to perfect the appeal by posting the required appeal bond.
      Topic: Appeal Bond
      • In 1999, Spouses Ballad filed a complaint against Borjas for illegal dismissal and various labor claims with the NLRC.
      • The Ballad spouses worked as overseers for the Borja Estate since 1972, appointed in writing by Paula Borja, overseeing agricultural lands and apartments. The Ballads were allegedly not paid various benefits for 27 years.
      • The Borjas defended that the Ballads were not employees but allowed to reside as a gesture of gratitude. 
      • Labor Arbiter: Ruled the Ballads were illegally dismissed.
      • The Borjas to appeal to the NLRC with a Motion for Reduction of Bond.
      • NLRC: Dismissed the motion and the appeal in April 2000 for failure to post a bond within the prescribed period. The motion for reconsideration was also denied.
      • CA: Affirmed the NLRC's decision, emphasizing the mandatory nature of posting a bond for appeal. The Court of Appeals noted the Borjas' late posting of the bond and ruled the Labor Arbiter's decision as final and executory. 
      • WoN the Court of Appeals erred in agreeing with the NLRC that the posting of a cash or surety bond during the period of time to file an appeal is mandatory and the failure to do so would have the effect of rendering the appealed decision final and executory. NO
      • The intention of the lawmakers to make the bond an indispensable requisite for the perfection of an appeal by the employer is underscored by the provision that an appeal may be perfected "only upon the posting of a cash or surety bond." The word "only" makes it perfectly clear that the lawmakers intended the posting of a cash or surety bond by the employer to be the exclusive means by which an employer’s appeal may be considered completed. The word "may", on the other hand refers to the perfection of an appeal as optional on the part of the defeated party, but not to the posting of an appeal bond, if he desires to appeal.
      • The requirement that the employer post a cash or surety bond to perfect its/his appeal is apparently intended to assure the workers that if they prevail in the case, they will receive the money judgment in their favor upon the dismissal of the employer’s appeal. It was intended to discourage employers from using an appeal to delay, or even evade, their obligation to satisfy their employees’ just and lawful claims.

      Topic: Appeal Bond
      • Republic Act No. 6640 and 6727 mandated salary increases, causing discrepancies in pay among faculty members, union, and non-union rank-and-file employees.
      • Labor Secretary Franklin Drilon also issued Policy Instruction No. 54, demanding full weekly wages for hospital and clinic personnel who complete a 40-hour/5-day workweek.
      • Petitioners challenged the policy, refusing salary payments for Saturdays and Sundays.
      • Private respondents filed a complaint claiming salary differentials and correction of salary distortion.
      • Labor Arbiter: Favored private respondents, directing payment of salary differentials under RA Nos. 6640 and 6727, and salary for Saturdays and Sundays as per Policy Instruction No. 54.
      • Petitioners filed an appeal with a Real Estate Bond worth P102,345,650, contrary to the requirement of a cash or surety bond.
      • NLRC: Directed petitioners to post a cash or surety bond amounting to the monetary award, warning that failure would result in appeal dismissal.
      WoN in perfecting an appeal to the National Labor Relations Commission (NLRC) a property bond is excluded by the two forms of appeal bond — cash or surety — as enumerated in Article 223 of the Labor Code. NO 

      Considering, however, that the current policy is not to strictly follow technical rules but rather to take into account the spirit and intention of the Labor Code, it would be prudent for us to look into the merits of the case, especially since petitioner disputes the allegation that private respondent was illegally dismissed.

      We reiterate this policy which stresses the importance of deciding cases on the basis of their substantive merit and not on strict technical rules. In the case at bar, the judgment involved is more than P17 million and its precipitate execution can adversely affect the existence of petitioner medical center. Likewise, the issues involved are not insignificant and they deserve a full discourse by our quasi-judicial and judicial authorities. We are also confident that the real property bond posted by the petitioners sufficiently protects the interests of private respondents should they finally prevail. It is not disputed that the real property offered by petitioners is worth P102,345,650. The judgment in favor of private respondent is only a little more than P17 million.


      Topic: Evidence
      • Bobby Toribiano was terminated by the Philippine Telegraph and Telephone Corporation General Santos branch, due to alleged tampering with a receipt.
      • Toribiano admitted a discrepancy in the receipt amounts, explaining it as an inadvertent mistake while handling various duties simultaneously.
      • Labor Arbiter: Ruled in favor of Toribiano, ordering his reinstatement.
      • NLRC: Affirmed the decision but modified it, removing the award of backwages.
      WoN Toribiano was validly terminated. NO 

      Well entrenched is the rule that when the conclusions of the labor arbiter are sufficiently corroborated by the evidence on record, the same should be respected by appellate tribunals since he is in a better position to assess and evaluate the credibility of the contending parties. Not even the failure of petitioner to present witnesses or counter-affidavits will constitute a fatal error as long as the parties were given a chance to submit position papers on the basis of which the labor arbiter rendered a decision.

      The imposition of such supreme penalty would certainly be very harsh and disproportionate to the infraction committed by private respondent, especially considering that it was private respondent's first offense after having faithfully rendered seven (7) long years of satisfactory service. 

      The belated presentation of the evidence notwithstanding, respondent commission should have considered them just the same. Technical rules of evidence are not binding in labor cases.

      Thus, even if the evidence was not submitted to the labor arbiter, the fact that it was duly introduced on appeal to respondent commission is enough basis for the latter to have been more judicious in admitting the same, instead of falling back on the mere technicality that said evidence can no longer be considered on appeal. Certainly, the first course of action would be more consistent with equity and the basic notions of fairness.


      Topic: Jurisdiction
      • Bienvenido Aricayos filed a complaint for illegal dismissal against St. Martin Funeral Home before NLRC-Pampanga.
      • Private respondent was the Operations Manager of St. Martin Funeral Home but was dismissed due to alleged misappropriation of funds intended for payment of taxes. He claimed no employment contract existed, and he was not listed in the payroll.
      • St. Martin Funeral Home, argued that the private respondent was not an employee but only the uncle of the owner who merely volunteered to help out in the business as a gesture of gratitude.
      • LA: Ruled in favor of the petitioner, stating there was no employer-employee relationship between the parties.
      • NLRC: Set aside the labor arbiter's decision and remanded the case to the LA for further proceedings.
        • NLRC denied the motion for reconsideration for lack of merit, hence the petitioner filed a petition for certiorari before the SC.
      WoN the filing of an appeal for certiorari on cases decided by the NLRC to the Supreme Court proper. NO
      • The NLRC's decision is final and executory after ten days, but the Supreme Court has maintained its power to review decisions on questions of law and jurisdiction (Judicial Review).
      • The remedy for an aggrieved party is to file a motion for reconsideration or then pursue a special civil action of certiorari under Rule 65 within 60 days from the notice of decision.
      • An amendment of Section 9 (Jurisdiction) B.P No. 129 in 1995 (R.A. No. 7902) grants the Court of Appeals exclusive appellate jurisdiction over final judgments of quasi-judicial agencies, except for cases falling within the appellate jurisdiction of the Supreme Court in accordance with the Constitution and the Labor Code.
      • The Court is, therefore, of the considered opinion that ever since appeals from the NLRC to the Supreme Court were eliminated, the legislative intendment was that the special civil action of certiorari was and still is the proper vehicle for judicial review of decisions of the NLRC.
      • While we do not wish to intrude into the Congressional sphere on the matter of the wisdom of a law, on this score we add the further observations that there is a growing number of labor cases being elevated to this Court which, not being a trier of fact, has at times been constrained to remand the case to the NLRC for resolution of unclear or ambiguous factual findings; that the Court of Appeals is procedurally equipped for that purpose, aside from the increased number of its component divisions; and that there is undeniably an imperative need for expeditious action on labor cases as a major aspect of constitutional protection to labor.
      • 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 hereby declared to mean and refer to petitions for certiorari under Rule 65. Consequently, all such petitions should hence forth 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
      • We reiterate the judicial policy that this Court will not entertain direct resort to it unless the redress desired cannot be obtained in the appropriate courts or where exceptional and compelling circumstances justify availment of a remedy within and calling for the exercise of our primary jurisdiction.

      Topic: Third Party Claim
      • Petitioner Yupangco Cotton Mills claimed that the sheriff of the National Labor Relations Commission (NLRC) erroneously levied on properties it owned.
      • Various actions were taken by the petitioner in connection with its claim:
        1. Filed a notice of third-party claim with the Labor Arbiter on May 4, 1995.
        2. Filed an Affidavit of Adverse Claim with the NLRC on July 4, 1995, dismissed by the Labor Arbiter on August 30, 1995.
        3. Filed a petition for certiorari and prohibition with the Regional Trial Court (RTC) on October 6, 1995, dismissed  on October 11, 1995.
        4. Appealed to the NLRC on December 8, 1995, against the Labor Arbiter's dismissal.
        5. Filed an original petition for mandatory injunction with the NLRC on November 16, 1995, still pending.
        6. Filed a complaint in the RTC-Manila, docketed as Civil Case No. 95-76395, dismissed, leading to the current petition.
      • CA: Dismissed the petition on the grounds of forum shopping and advised seeking relief from the Supreme Court.
      WoN the Court of Appeals erred in dismissing the petitioner's accion reinvindicatoria on the ground of lack of jurisdiction of the trial court. YES
      A third party whose property has been levied upon by a sheriff to enforce a decision against a judgment debtor is afforded with several alternative remedies to protect its interests. The third party may avail himself of alternative remedies cumulatively, and one will not preclude the third party from availing himself of the other alternative remedies in the event he failed in the remedy first availed of. Thus, a third party may avail himself of the following alternative remedies:
          a) File a third party claim with the sheriff of the Labor Arbiter, and  
          b) If the third party claim is denied, the third party may appeal the denial to the NLRC. 

      The filing of a third party claim with the Labor Arbiter and the NLRC did not preclude the petitioner from filing a subsequent action for recovery of property and damages with the Regional Trial Court. And, the institution of such complaint will not make petitioner guilty of forum shopping.
      A separate civil action for recovery of ownership of the property would not constitute interference with the powers or processes of the Arbiter and the NLRC which rendered the judgment to enforce and execute upon the levied properties. The property levied upon being that of a stranger is not subject to levy. Thus, a separate action for recovery, upon a claim and prima-facie showing of ownership by the petitioner, cannot be considered as interference.


      Topic: Third Party Claim
      • Felicidad Samson, Casiano A. Osin, Alberto Belbes and Luisito Venus were among the employees of Cayco Marine Service engaged in the business of hauling oil.
      • Respondents filed a case against Cayco for various labor violations.
      • LA: Dismissed the complaint for lack of merit.
      • NLRC: Ruled in favor of respondents, ordering payment of separation pay, backwages, and leave pay.
      • Labor arbiter issued a writ of execution against the company's property, including a motor tanker.
      • Dorotea Tanongon filed a third-party claim asserting ownership of the motor tanker acquired after the NLRC decision for and in consideration of P1,100,000.00.
      • LA: Dismissed Tanongon's claim, suspecting it was to defraud the respondents as judgment creditors.
      • NLRC: Reversed on two grounds and lifted the Writ of Execution previously imposed on the subject vessel and restrained its sale.
        • The power of the NLRC sheriff to execute judgments extended only to properties unquestionably belonging to the judgment debtor. 
        • Alienations of property in the fraud of creditors would give rise only to rescissible contracts. 
      • CA: Supported respondents' claims, stating Tanongon should have been cautious before acquiring the property and that the NLRC had the authority to enforce its decision.
        • No judicial rescission was required to determine the legitimacy of the sale between Cayco and Tanongon. The sale was seen as dubious and executed to evade the execution of the NLRC's decision.
      WoN a third-party claim of ownership on a levied property should not necessarily prevent execution. NO 

      The CA correctly ruled that the act of Olizon was a "cavalier attempt to evade payment of the judgment debt." She obviously got word of the issuance of the Writ and disposed of the tanker to prevent its sale on execution. Despite knowledge of these antecedents, petitioner bought the tanker barely ten days before it was levied upon on August 8, 1997. It is also more than coincidental that the purchase price for the tanker was P1,100,000.00, while Olizon's judgment debt to respondents amounted to P1,192,422.55. Petitioner should have inquired whether Olizon had other unsettled obligations and encumbrances that could burden the subject property. Any person engaged in business would be wary of buying from a company that is closing shop, because it may be dissipating its assets to defraud its creditors.

      A third-party claim on a levied property does not automatically prevent execution. Under Rule 39 of the Revised Rules of Court, execution is a remedy afforded by law for the enforcement of a judgment, its object being to obtain satisfaction of the decision on which the writ is issued. When a third-party claim is filed, the sheriff is not bound to proceed with the levy of the property unless the judgment creditor or the latter's agent posts an indemnity bond against the claim. Where the bond is filed, the remedy of the third-party claimant is to file an independent reivindicatory action against the judgment creditor or the purchaser of the property at public auction. The NLRC should not have automatically lifted the levy and restrained execution, just because a third-party claim had been filed.

      Topic: Compromise Agreement
      • Lakas Manggagawa sa Jag (Union) composed of the rank-and-file employees of Jag & Haggar Jeans and Sportswear Corporation, staged a strike.
      • Petitioner filed a petition to declare the strike illegal.
      • LA: Declared the strike illegal and ordered the dismissal of the officers and members of the Union who took part in the illegal strike.
      • NLRC: Initially set aside the Labor Arbiter's decision and ordering the reinstatement of the affected employees. 
        • Later modified the decision, declaring certain union officers dismissed and allowing other members to return to work.
      • A compromise agreement was executed by petitioner and the Union providing for separation pay and financial assistance. 
        • 102 out of 114 affected employees, availed of the benefits under the Agreement.
        • The remaining affected employees moved for the execution of the NLRC decision.
      • NLRC: Directed petitioner to accept the remaining 12 union members to their former or equivalent position with back wages.
      WoN the Compromise Agreement entered into by petitioner and the Union is binding upon private respondents. NO
       
      We find no reason for the union members to enter into a compromise when the decision of NLRC ordering their reinstatement is more advantageous to them than their being dismissed from their jobs under said Compromise Agreement.

      The Compromise Agreement does not apply to private respondents who did not sign the Compromise Agreement, nor avail of its benefits.



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